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

Others present: Randy Berggren, Dick Helgeson, Garry Kunkel, Jim Maloney, Kris Middlewood, Jim Origliosso, Scott Spettel, John Yanov, and Krista Hince of the EWEB staff; and Kim Kunkel, Minutes Recorder.

President Smith called the meeting to order.

INTEGRATED ELECTRIC RESOURCE PLAN (IERP)

Referring to a memorandum that was included in the meeting agenda packet and supplemental materials distributed to the Board, Resource Planning Analyst Jim Maloney said the agenda of this, the 11th Work Session concerning the Integrated Electric Resource Plan (IERP), would include the following:

1. process check-in -- a glimpse at the end game
2. futures
3. strategies

Mr. Maloney stated that staff has made a first attempt at reducing the nine alternative futures identified thus far to four. He said the intent was to capture the variety and thought that went in to the original set of futures, while decreasing the number of alternatives.

With regard to the next-step of creating strategies that can be tested against the identified futures, Mr. Maloney distributed and reviewed the draft Momentum Strategy and Momentum Strategy Results Table. He said the Results Table reveals how the Momentum Strategy would play out in several different futures. Mr. Maloney inquired as to whether the strategy and results table process will assist the Board in making resource decisions.

President Smith said the benefit of the tables is their ability to assist Commissioners to identify their tolerance for variability. She said the Board can then determine the threshold at which at-risk areas begin to encroach upon EWEB's success.

Referring to the strategy option "incremental development of centralized renewables" included in the Strategy Table under the Generation Strategy decision area, Vice President Osanka said it would be useful to insert a number that will serve as a benchmark to be considered in the Board's decision-making process. He said exceeding that threshold would trigger a review by the Board.

Mr. Maloney presented a brief overview of five futures tables drafted by staff and attached to the aforementioned memorandum which was included in the meeting agenda packet. In addition, he reviewed a proposed "structuring tool" that places environmental regulation and market condition extremes at either end of intersecting "x" and "y" axes. He said this results in four quartiles in which futures can be plotted to measure their relation to these extremes.

Referring to the Economic Downturn future, President Smith said she does not understand the connection between pricing and conservation and renewables. She said it is her opinion that society is at a precipice with regard to the environment. She said she does not believe EWEB will have the luxury of maintaining a connection between economics and the environment. President Smith said EWEB cannot assume that reduced economic capability can reduce its investment in the environment.

Vice President Osanka said that to select four futures among the many proposed, he needs to understand the difference between the Economic Downturn future and Commissioner Dyer's proposed future. He said the only distinctly different future proposed by staff is the Low Priced future. Referring to the diagrams included in the memorandum, Mr. Maloney explained that the four axes are "vanilla" options that reflect variations. He acknowledged that the axes may not reflect all of the nuances evident in the many futures discussed by the Board.

President Smith said she liked the exercise of plotting the futures on the axes. She said that from a planning perspective, it seems unwise to plan for extreme futures because the likelihood of such extremes actually occurring is slight. She said it makes sense to plan for more plausible futures while developing a contingency plan to address the relatively unlikely scenario of an extreme future.

Commissioner Anderson said she agreed with Mr. Maloney's suggestion that the Board consider strategies by which to address a worse case scenario. Mr. Maloney said there are two ways to plan for the future:

1. plan for the worse case scenario
2. identify the most likely future and develop a contingency plan in the event an extreme future unfolds

Mr. Maloney presented an overview of the five alternative futures drafted by staff. Commissioners offered their comments regarding each future, as follows:

Cultural Momentum Future:

• Keep it (Smith, Anderson, Bishop, Dyer)
• This future appears to be a modified "status quo;" suspicious of average futures; if vote against retaining this future, will argue that if this is the future, EWEB's problems are minimized because it is the status quo. This future is the antithesis of a worst case scenario (Osanka)

President Smith determined that a majority of the Board favored retaining the Cultural Momentum Future as an option.

Green Shift Future

• Extreme but plausible; Because item I-2 to is an essential element that occurs only in this future, support retaining the Green Shift Future (Bishop)
• Keep it (Anderson)
• Eliminate this future; The market working is inconsistent with the Green Shift Future philosophy (Osanka)
• Eliminate or modify this future; it is somewhat extreme; doubt that retail choice will be status quo; if have renewable portfolio standards, will probably not see carbon or other pollution taxes; renewables would be the resource of choice; retain item E-2, delete items G-6, F-3, and D-4 (Dyer)
• Delete item D-4 (Osanka)
• Delete item D-3; Retain item D-4 (Anderson)

President Smith determined that a majority of the Board supported modifying the Green Shift Future as follows:

1. Include E-2 rather than status quo
2. Delete items G-6 and F-3

The Board directed staff to revise the Green Shift Future for consideration by Commissioners during the next Board Meeting.

Market Future

• Keep it (Smith, Anderson, Dyer, Bishop)
• Eliminate this option. It does not differ from the other futures (Osanka)
• Add item I-2. There is reduced control over the system (Smith)
• Philosophical problem: The market is always variable. Is the I-2 scenario of over subscription and under investment short- or long-term? (Dyer)
• Not sure would call it a "market future" (Osanka)

Economic Downturn Future

• See no need for this future (Anderson)
• This future makes no sense (Smith, Bishop)

Low Price Future

• Keep it (Smith)
• Cannot imagine that status quo will continue in all those areas; very extreme and unlikely (Bishop)
• Suggest developing a future that is a hybrid of the Economic Downturn and Low Price Futures; the future proposed by Commissioner Dyer contains elements of both the Economic Downturn and Low Price Futures; it is a much more plausible future (Osanka)
• Delete item A-3 (Smith)
• Cannot see item D-4 occurring in that environment; perhaps item D-2, D-3, or D-4 (Dyer)
• Include items I-2 and D-3; delete item D-4 (Smith, Bishop, Anderson)
• Eliminate this future if Commissioner Dyer's proposed future is better (Osanka)

President Smith determined that a majority of Board members favored retaining a modified Low Price Future and eliminating as an option Commissioner Dyer's proposed future. She said Vice President Osanka and Commissioner Dyer were the only Board Members who had expressed support for revisiting Commissioner Dyer's proposed future.

Mr. Maloney said the that during the next Board Meeting, staff will address the issue of strategy development.

The meeting adjourned at 7:30 p.m.