Board Members present: Dorothy Anderson, Sandra Bishop, Mike Dyer, Jeff Osanka, and Susie Smith.
Others present: Randy Berggren, Manda Bednarczyk, Ken Beeson, Cathy Bloom, Tom Buckhouse, Garilyn Crawly, Cathy Grey, Dick Helgeson, Libby Henry, Eric Hiaasen, Everett Jordan, Dale Kessinger, Garry Kunkel, Jim Maloney, Mat Northway, Jim Origliosso, Dick Varner, Pat Ventura, and Krista Hince of the EWEB staff; Jim Deason, EWEB Special Counsel; Arun Storrs, Rachel Shimshak, Alan Zalenka, and members of the public; and Kim Kunkel, minutes recorder.
President Smith called the meeting to order.
AGENDA CHECK
Given the number of individuals wanting to provide public input, President Smith requested that the Board revisit at a future point in the meeting the time alloted for each agenda item.
APPROVAL OF MINUTES
The Commissioners reviewed the minutes of the January 20, 1998, Work Session and Special Board Meeting.
Referring to page 2 of the Special Board Meeting minutes, Commissioner Anderson requested that paragraph 2 be amended to read "President Anderson said she agreed with Vice President Smith in that the focus of the Board should not be ward versus ward politics, but rather how it can assist in the effective function of the utility.
Referring to page 5 of the Special Board Meeting minutes, Vice President Osanka requested that the final paragraph be amended to read "President Smith determined that the majority of Board members were comfortable with staff proceeding with the water rate increase proposal."
Referring to page 5 of the Special Board Meeting minutes, President Smith requested that paragraph 7 be amended to read "President Smith said there are two separate issues at hand:
Referring to the Special Board Meeting minutes in general, Vice President Osanka requested that, following the item Agenda Check, he be referred to as "Vice President Osanka" rather than "Commissioner Osanka."
Vice President Osanka moved, seconded by Commissioner Dyer, to approve the minutes of the January 20, 1998, Work Session and Special Board Meeting, as amended. The motion passed unanimously.
CORRESPONDENCE
General Manager Randy Berggren reviewed the following information items included in the meeting agenda packet:
Mr. Berggren reviewed draft agendas for the March 3 Work Session and Regular Board Meeting.
PUBLIC INPUT
Bruce Mason, 36725 Oak Point Road, Springfield, OR, distributed and recited to the Board a written statement in which he urged Commissioners to continue supporting the inclusion of a land trust requirement as part of the FERC relicensing permit process. In addition, he requested that the Board consider including on customers' billing statements an option of rounding up the total amount owed and donating the proceeds to the McKenzie River Trust. Mr. Mason asked the Board to consider including in customer billing statements mailings aimed at increasing support for the McKenzie River Trust.
George Grier, 1342-1/2 N. 66th Street, Springfield, OR, expressed concern that EWEB's reaction to the FERC lawsuit may vilify the utility in the long-term and therefore render EWEB and its customer base vulnerable to competing entities. He said EWEB may be criticized for requesting a stay rather than moving forward with time-sensitive projects such as the Carmen/Smith relicensing.
Tom Bowerman, 532 Olive Street, Eugene, OR, said that during a recent meeting of local agencies and interested parties concerning the McKenzie River, a rumor was circulated suggesting that EWEB was willing to move off of its position that the FERC relicensing permit process should include a land trust requirement. He reminded the Board that EWEB's funding of land conservancy activities in the McKenzie basin began as mitigation measures and and stressed that the utility should not discontinue such activities without revisiting its initial agreements.
AWARD FROM RENEWABLE NORTHWEST
Rachael Shimshak, Renewable Northwest Project Director, presented to EWEB staff member Ken Beeson the Clean Energy Award for his role in securing EWEB's participation in the Wyoming Wind Project. Ms. Shimshak commended the EWEB Board, General Manager, and staff for their vision and persistence with regard to pursuing the wind power project and promoting renewable resources in general.
Mr. Beeson accepted the award and noted that the Board, General Manager, and many EWEB staff members were involved in securing the Wyoming Wind Project.
PRELIMINARY 1997 FINANCIALS
Referring to a series of overhead displays, copies of which were distributed to the Board, Assistant Treasurer Cathy Bloom presented a brief overview of EWEB's 4th quarter financial results and impacts specific to the Water, Electric, and Steam Systems as well as the utility's Capital, Operating, and Payroll & Benefits Budgets.
WATER RATE PROPOSAL
Referring to both the meeting agenda packet and a series of overhead displays, copies of which were distributed to the Board, Senior Financial/Rate Analyst John Yanov presented an overview of EWEB's 1998 Water Rate Proposal, noting that it calls for a 4.6 percent water rate increase. He said drivers of the proposed rate increase include
Mr. Yanov noted that concurrent with the proposed rate change, staff is also recommending pricing for a new EWEB meter size -- a 3/4-inch meter. Benefits of the new service are a 50 percent increase in maximum flow rate over a 5/8-inch meter and a system development charge (SDC) substantially less than a 1-inch service. Noting that the system development charge (SDC) associated with this new service will require Board approval, Mr. Yanov said staff will request approval of both the SDC and the water rate proposal on March 17.
PUBLIC HEARING ON WATER RATES
President Smith opened the public hearing . Having determined there was no one wishing to speak, President Smith closed the public hearing.
President Smith initiated a process check. The Board agreed to proceed with the agenda, as drafted, and conclude the Board Meeting at 10 p.m.
LAWSUIT INTERVENTION UPDATE ON RELICENSING OF LEABURG/WALTERVILLE
Referring to a memorandum and attachments included in the meeting agenda packet, Electric Division Director Garry Kunkel reviewed background information relative to the lawsuits, filed on or about January 26, 1998, against the Federal Energy Regulatory Commission (FERC) regarding the new license for the Leaburg-Walterville Project. He explained that the filings, submitted by the Oregon Department of Fish and Wildlife, National Marine Fisheries Services, and American Rivers (along with Pacific Rivers Council, Oregon Natural Resources Council, Waterwatch of Oregon, and Friends of the Earth), essentially raised the same issues that were raised during the 1997 rehearings.
Mr. Kunkel explained that several of the items included in the appeal have far reaching impacts on EWEB's Leaburg-Walterville project and those of other hydroelectric project owners as well. He said the following items impact Leaburg-Walterville and are a threat to other hydroelectric projects in the United States:
Mr. Kunkel explained that EWEB does not automatically have standing in the 9th Circuit Court of Appeals process. EWEB must file for intervener's status and, as an intervener, must declare which side it will intervene on behalf of. Mr. Kunkel said that in this case, EWEB would file for intervention status on the side of the respondent, the Federal Energy Regulatory Commission. As an intervener, EWEB would receive information regarding the suit including correspondence, copies of briefs, etc., be able to supplement the record provided by FERC in the event important information was omitted, and submit a brief.
Mr. Kunkel explained that not intervening would relegate EWEB to allowing others to decide the fate of its hydroelectric facilities. He referred Commissioners to a copy of the draft intervention document prepared by EWEB's relicensing attorney for the Board's consideration.
Mr. Kunkel said that assuming no further challenges following a court decision, the appeals process could take from four months to two years to complete. In order to allow EWEB sufficient time to complete license articles when the appeal and related activities, if any, are completed, EWEB must file immediately for a stay and/or extensions from FERC. Relicensing Project Manager Gale Banry briefly reviewed the list of license articles staff believes are eligible for a stay or extension under these circumstances. He said the list of articles includes the following assumptions:
President Smith inquired as to whether staff had conducted a worst-case cost scenario in the event the flow and baseline issues are resolved in favor of the petitioners. Mr. Banry responded that staff is developing economic models related to such scenarios. He said that if the aforementioned issues were resolved in favor of the petitioner, the cost to EWEB would be significant. President Smith requested that staff provide her with a more detailed response.
President Smith inquired as to the annual fish mortality that will result if EWEB continues to delay installation of the Walterville fish screen. She said she is concerned about the proposed stay in terms of the impacts related to delaying such projects.
Mr. Banry deferred President Smith's question to Everett Jordan, Generation manager. Mr. Jordan indicated that during relicensing study scoping, the fisheries agencies determined that mortality studies would not be necessary at Walterville because EWEB would be required to build a fish screen as a condition of the license. Mr. Jordan stated that the latest available information on fish mortality at Walterville was a 1982 study of both projects which indicated that the greatest mortality was at Leaburg, with minimum mortality at Walterville. As a result, EWEB commenced construction of the Leaburg fish-screen shortly after completion of the 1982 study. Mr. Jordan said that within the last couple of years, ODFW has challenged the validity of the 1982 study, and moreover, have stated that they believe mortality at Walterville may be greater than the 1982 study indicates. Mr. Jordan concluded by saying that EWEB's current practice is to erect a tailrace barrier during the upstream adult migration periods, and the attendant at the monitoring site is instructed to report any carcasses discovered. To date, only "spawned-out" adults have been reported.
Commissioner Dyer commented that he believes ODFW themselves carry a large responsibility for any eventual delay and damage to fisheries resources resulting from their challenge to EWEB's license in the 9th Circuit Court. He said that absent this lawsuit and the uncertainty it introduces to the future economic value of the projects, EWEB was ready, willing, and able to construct scheduled fisheries improvements beginning this year.
Commissioner Anderson expressed her opinion that the Board must intervene on behalf of FERC.
Commissioner Anderson moved, seconded by Commissioner Bishop, to authorize staff to move forward with intervening in the 9th Circuit Court Appeal of EWEB's FERC Hydroelectric License, in favor of FERC, with the understanding that staff return to the Board for discussion of the specific items to which EWEB will respond.
Vice President Osanka stated that if EWEB fails to intervene and the relicensing agreement is then overturned in part or entirely, the resulting requirements could be deleterious to EWEB and its customers. He said it seems as though EWEB should intervene in this matter, repeating his understanding that staff will return to the Board for discussion of the specific items to which EWEB will respond.
Commissioner Bishop said she views this issue from a broader perspective than fish mortality. She said the innumerable variables involved make it impossible for EWEB to guarantee the protection of fish in isolation or to the exclusion of other benefits of owning hydroelectric power generation. Commissioner Bishop said determining whether to intervene on behalf of FERC is an uncomfortable decision for her and she finds it interesting that some groups who advocate on behalf of fish have elected not to be involved in this matter. In addition, Commissioner Bishop stated that the environmental cost of replacing the Leaburg-Walterville hydroelectric project would be enormous because it would likely be replaced with gas or coal. Commissioner Bishop stressed that she would be unwilling to relinquish her support for including the land trust requirement as part of the FERC relicensing process.
President Smith said she was distressed by this whole matter given the fact that EWEB has worked diligently with environmental groups to establish agreeable requirements. She said she concurs with George Grier's assessment that this is a lose-lose situation for EWEB. She suggested that staff be prepared to talk "dollars and cents" in terms of what this decision means for EWEB's project costs. President Smith stressed that the land trust requirement should be included as part of the FERC relicensing permit process. Lastly, President Smith said EWEB has much work to do beyond filing a brief with the 9th Circuit Court of Appeals, particularly in terms of public perception.
The motion passed unanimously.
Commissioner Anderson moved, seconded by Commissioner Bishop, to authorize staff to request a stay of license article implementation from FERC, with the understanding that the Board may reverse the stay of items with which it elects to proceed. The motion passed unanimously.
(The Commissioners took a short break)
ELECTRIC DEREGULATION UPDATE
Due to the late hour and significance of the issue, this item was deferred to the March 17 Work Session.
ITEMS FROM BOARD MEMBERS
Commissioner Anderson reported that pyramid schemes related to the deregulation of long distance telephone service are emerging and suggested that similar schemes related to the deregulation of the electric utility industry are likely.
Commissioner Bishop said she was disturbed about the Lane County billing issue and inquired as to whether EWEB could mandate payment of the bill. Mr. Berggren assured Commissioner Bishop that the continued escalation of the matter was not intentional on the part of EWEB. He said EWEB's lawyer is unsure about the legal precedence for mandating payment.
Referring to a recent article in The Register-Guard, President Smith suggested that EWEB utilize the media to convey to the public the message that EWEB is taking the moral high ground by intervening in the lawsuit on the side of FERC.
The meeting adjourned at 9:22 p.m.