Board Members present: Susie Smith, Jeff Osanka, Sandra Bishop, and Dorothy Anderson. Commissioner Dyer was excused.

Others present: Randy Berggren, Manda Bednarczyk, Tom Buckhouse, Marty Douglass, Dick Helgeson, Eric Hiaasen, Everett Jordan, Jim Maloney, Jim Origliosso, Scott Spettel, and Krista Hince of the EWEB staff; and Kim Kunkel, Minutes Recorder.

President Smith called the meeting to order.

ELECTRIC INTEGRATED RESOURCE PLAN

Referring to a memorandum and attachments included in the meeting agenda packet, Resource Planning Analyst Jim Maloney stated that the proposed agenda of the 7^th Work Session regarding the Integrated Electric Resource Plan (IERP) was as follows:

1. review where staff/Commissioners are in the process
2. present, discuss, and refine the latest version of the Futures Table and the associated definitions or explanations of the specific items
3. begin consideration of the combinations of elements that form coherent and plausible futures relevant to the decisions EWEB faces
4. discuss alternative paths to completing the IERP

Noting that the next task in the process is to develop futures options and assess their alignment with Board Operating Policies, Mr. Maloney distributed and reviewed the revised Futures Table. In response to a request for suggested revisions to the document, the Board proposed the following:

• Include, as an extension of table item E-5, DISCO.
• Articulate, under a specific future, the issue of "providers of last resort" and low-income customers.

Having determined there was Board support for the draft Futures Table in concept, Mr. Maloney, Resource Planning Analyst Eric Hiaasen, and Power Management & Planning Manager Scott Spettel presented an overview of the following alternative futures themes and the areas of significant uncertainties related to each:

1. Retreating Forward
2. Wild, Wild West
3. Greenhouse Gambit
4. The Long Boom
5. Industrial Ecology
6. American Renaissance

The Board offered the following comments and suggestions for revision:

• "Bonding authority still vested in non-power customer citizenry" is not consistent with the Wild, Wild West scenario. A more appropriate alternative state would be that public power slowly divests itself.
• Revise table item F-4 to state "air emissions exemptions rescinded for older coal plants."

Mr. Maloney solicited additional Futures Table options. The Board responded, as follows:

Possible Futures: President Smith

Strategy title: "SPAM"

Strategy theme: Inability to push through retail access legislation has significantly slowed the pace of change due to a polarization between driving forces.

Applicable alternative states related to industry structure factors and other factors:

Structure of Wholesale Markets:

1. Status quo mix of market trading and contracts -- BPA power at cost

Financing/Ownership, etc:

1. Status quo
2. No new tax exempt financing for generation projects
3. Renewable portfolio standard adopted for generation (State or regional)

Renewable Energy and DSM:

1. Governmental support for renewable and DSM industries (low to medium support/includes Federal support)

Retail Choice:

1. Status Quo
2. IOU's mandated to open retail markets/customers have option to vote on level of retail access

Environmental Issues:

1. Increased regional intervention in environmental issues
2. New ESA listings on Columbia and McKenzie systems (not including dam removal)

Power Market/Fuel Prices:

1. Resource availability constraints cause discontinuities in price (gas/hydroelectric)
2. Older coal plant retirements accelerated (this item modified)

Technology:

1. Status quo or slow development

Wildcards:

1. System/grid reliability problems
2. Bonding authority still vested in non-power customer citizenry
3. Canada enacts comprehensive environmental protection laws

Possible Futures: Vice President Osanka

Strategy title: (unnamed)

Strategy theme: Demographics-based trend of economic "green" energy

Applicable alternative states related to industry structure factors and other factors:

Structure of Wholesale Markets:

1. Status quo mix of market trading and contracts--BPA power at cost

Financing/Ownership, etc:

1. State, regional, or national cooperatives form to own generation

"Stranded" Obligations:

1. Environmental costs allocated over competing uses on river system

Renewable Energy and DSM:

1. The "market" works and high demand for renewables drives development

Retail Choice:

1. Status quo; and tentatively
2. IOU's mandated to open retail markets/customers have option to vote on level of retail access

Environmental Issues:  

1. New ESA listings on Columbia and McKenzie systems including dam removal
2. Climate change--"permanent" El Nino in Northwest impacts hydro conditions (see as "wet")

Power Market/Fuel Prices:

1. Resource availability constraints cause discontinuities in price

Technology:

1. Micro-turbine and fuel cell generation in the 20-50 kW range is commercialized

Wildcards:

1. Electric vehicles (cars/busses) commercialized widely for urban transportation

Commissioner Bishop stated that she envisions as possible futures

1. regionalization
2. "extreme environmental awakening"

She said she will meet with Mr. Maloney and attempt to create matrixes related to these possible futures. Commissioner Bishop said she agrees with President Smith that the "glory" of deregulation is diminishing and rapid change is unlikely.

Mr. Maloney stated that, based on suggestions from Board members, staff will draft alternative futures and a related narrative. He said the number of alternative futures will ultimately be narrowed to four, based on their applicability to EWEB.

Noting his concern that continuing with a fully collaborative approach will delay the completion of the EIRP by several months, Mr. Berggren proposed scheduling an additional Work Session for the end of June. He said this would provide the Board an opportunity to come to closure on the four alternative futures. In addition, Mr. Berggren requested that the Board afford staff the latitude to conduct initial development work on proposed strategies related to the futures. He said staff would then submit this work to the Board for its review. Mr. Berggren stated that to complete the IERP in October, one-on-one meetings with Commissioners will be scheduled for August, followed by an additional Work Session in September.

Following discussion, the Board agreed to conduct an additional Work Session on June 23.

President Smith stated that her apprehension or impatience with the current process was the result of not knowing whether staff is doing the parallel creative research work necessary to pursue new resource choice opportunities that are available to EWEB regardless of the future the utility faces.

General Manager Randy Berggren responded that while EWEB is presented such resource opportunities, staff currently lacks the IERP information necessary to codify such decisions.

President Smith said she was concerned that the IERP process would result in no change to EWEB's current portfolio of resource options. Noting that she would like to see EWEB continue to be creative in identifying resource opportunities, she said such opportunities could result in the identification of a strategy that would have otherwise been overlooked. Mr. Berggren stated that staff could distribute to the Commissioners information regarding resource opportunities staff is currently researching.

Vice President Osanka requested that staff draft a list of potential policy directions related to EWEB maintaining a minimum percentage of renewable resources.

The meeting adjourned at 7:40 p.m.