Board Members present: Mike Dyer, Sandra Bishop, Dorothy Anderson, Peter Bartel, and Susie Smith.
Others present: Randy Berggren, JoAnn Andersen, Terry Bequette, Ken Beeson, Deborrah Brewer, Tom Buckhouse, Marty Douglass, Cathy Hamilton, Dick Helgeson, Garry Kunkel, Roseanna McArthur, Mat Northway, Jim Origliosso, Laurie Power, Dick Varner, Debra Wright, John Yanov, and Krista Hince of the EWEB staff; Ryan Lepecier, KVAL Television, Kim Kunkel, Minutes Recorder; Jim Thraikill, and various members of the public.
President Dyer called the Special Board Meeting of the Eugene Water & Electric Board (EWEB) to order.
AGENDA CHECK
President Dyer determined that there was consensus to approve the agenda, as written.
APPROVAL OF CONSENT CALENDAR
President Dyer noted that items presented for approval on the Consent Calendar included the following:
Minutes of the January 18, 2000 Work Session and Special Board Meeting
President Dyer requested that approval of the January 4 Work Session and Regular Board Meeting be pulled from the Consent Calendar.
Commissioner Bartel requested that Item 5 be pulled from the Consent Calendar.
Vice President Bishop moved, seconded by Commissioner Bartel, to approve the Consent Calendar, with the exception of approval of the January 4 Work Session and Regular Board Meeting, and Item 5. The motion passed unanimously.
ITEMS FROM BOARD MEMBERS
Commissioner Anderson distributed a letter from Orville Etter, a citizen who was unable to attend that evening's public hearing on the electric rate proposal. At Orville Etter's request, Commissioner Anderson distributed part of his testimony he had not been able to read at the City Council's public hearing on EWEB's proposed Telecommunications Charter Amendmeny.
Noting that EWEB had been offered a seat on the Downtown, Franklin Boulevard, Willamette Visioning Committee, Commissioner Smith said it was her recommendation that Commissioner Anderson represent EWEB. She said her recommendation was based upon Commissioner Anderson's familiarity with south bank issues and her experience on the Planning Commission. She said the committee would begin meeting in March and was scheduled to present its resulting plan in September.
Commissioner Bartel moved, seconded by Commissioner Smith, that Commissioner Anderson represent the EWEB Board on the Downtown, Franklin Boulevard, Willamette Visioning Committee.
Vice President Bishop said she felt "rushed" in making this decision and said she would like more understanding of what EWEB was committing to in terms of its involvement on the committee. She said she was not sure the Board had a collective vision regarding the area being examined by the committee. Commissioner Bartel explained that the study area extended from Charnelton Street to I-5. He said EWEB's interest in the matter was ensuring that the City does not make plans regarding the utility's site without EWEB's involvement. He expressed support for Commissioner Anderson serving on the committee, noting that her presence would enable the Board to forward to the committee a collective opinion.
The motion passed unanimously.
Referring to a memorandum entitled Combustion Turbine Feasibility Effort With Umatilla Tribes, Hermiston, copies of which were included in the meeting agenda packet, Commissioner Smith said she thought the proposed 500 megawatt combustion turbine project was at odds with the Board's principles concerning renewable energy resources. She said the proposal should include "green" aspects to align with EWEB's energy plan. Commissioner Smith said she was not supportive of moving forward with the project without further exploration of its potential in terms of renewable energy.
Noting that she had volunteered to take part in the combustion turbine feasibility effort due to her experience with tribal issues, Vice President Bishop apologized to the Board for not bringing forward information regarding this issue sooner. She said that neither EWEB nor the Confederated Tribes of the Umatilla realized the project would move forward so quickly. Noting that the site being examined was ideal in that it is located at the intersection of two major gas lines, Vice President Bishop said this was not intended to be a renewable energy project; however, it does represent modern gas technology.
General Manager Randy Berggren acknowledged that EWEB has a strategy for renewable or environmentally superior energy; however, "environmentally superior" has not yet been defined. He said the City of Hermiston, a partner in this feasibility effort, has agreed to cooperate with the environmental aspects of the project, as defined by EWEB and the tribe. He said the Memorandum of Understanding, for which staff is requesting the Board's authorization to sign, binds EWEB only to exploring the potential of the project, and any party may back out of the study with one weeks' notice. He said the Memorandum of Understanding would be presented to the Board during its next Board Meeting.
Commissioner Smith said "environmentally superior" was an unresolved term from the Resource Plan. She stated her opinion that the proposed project should be renewable and said she was not interested in a large combustion turbine project. She said she objected to using a project to define "environmentally superior." Commissioner Smith said the term should be defined according to the parameters of the Resource Plan. Noting that the Power Act states that renewables should be built prior to non-renewables, Commissioner Smith said that although the project in question might be designed as a quality project, as long as combustion turbines continue to be built, the renewables future remains out in the distance. She said pursuing such a project would be inconsistent with EWEB's message to the community regarding EWEB's commitment to renewable resources. Commissioner Smith stated that prior to investing much work in this effort, she would like additional discussion of the Resource Plan and consideration of what renewable opportunities EWEB might forego as the result of pursuing this opportunity.
Mr. Berggren said he believed Commissioner Smith's concerns could be addressed with a minimal expenditure of staff resources. He said some answers could not be provided until the analysis was underway.
President Dyer suggested that this matter be added to the agenda of the next Board Meeting as an action item.
Commissioner Bartel echoed Commissioner Smith's objection to defining "environmentally superior" based upon a specific project. He requested that Mr. Berggren provide the Board with information concerning EWEB's commitment to the project in terms of time and staff resources.
CORRESPONDENCE
Mr. Berggren reviewed a variety of materials included in the meeting agenda packet, including a memorandum from Garry Kunkel concerning hydroelectric relicensing.
As the result of discussion, the Board scheduled its evaluation of General Manager Randy Berggren for February 29. Mr. Berggren noted that the Board would be polled regarding potential dates on which to meet with the EWEB Master Plan consultant.
As the result of discussion, the Board tentatively scheduled a planning session for April 14-15.
Mr. Berggren reminded the Board that OURCA would host a February 25 workshop at EWEB concerning issues related to Bonneville Power Administration (BPA) product subscription.
Mr. Berggren presented a brief overview of the agendas for the next Work Session and Regular Board Meeting.
PUBLIC INPUT
There were no members of the public present who wished to address the board concerning matters not scheduled for public hearing.
PRESIDENT'S ANNUAL MESSAGE
President Dyer recited the President's Annual Message, copies of which were distribute to the Board. His message focused on the role of EWEB in the new millennium, particularly with regard to deregulation. President Dyer discussed EWEB's strengths and areas in which improvement could be made with respect to 1) customer service; 2) value; 3) quality; 4) innovation; and 5)"community voice." In summary, President Dyer said EWEB was well-equipped to overcome future obstacles and seize future opportunities that will strengthen the utility for years to come.
ELECTRIC RATE PROPOSAL
Referring to a memorandum, draft 2000 Electric Rate Proposal, and series of overhead projections, copies of which were distributed to the Board, EWEB Senior Rates/Financial Analyst John Yanov presented a brief overview of the 2000 Electric Rate Proposal which, if approved, would become effective on April 1, 2000.
Noting that the COSA results for the 2000 Electric Rate Proposal indicate some significant shifts in costs between customer classes, Mr. Yanov said this was not unanticipated due to several factors affecting allocations, including 1) higher power costs; 2) the incorporation of load research results, and 3) customer class restructuring.
Referring to a series of overhead projects, copies of which were distributed to Commissioners, Mr. Yanov reviewed the following cost drivers of, and associated percent increases to, the proposed 2000 Electric Rate change:
Cost Driver Percent Increase
Power cost and transmission 5.2
Power system control 0.3
Transmission & Distribution labor 0.3
Tree-trimming 0.4
Total Overall Percent Change 6.2
Continuing, Mr. Yanov presented an overview of the proposed increases by customer class, as follows:
Customer Class Percent Increase
Residential 8.5
Small General Service 18.4
Medium General Service -4.7
Large General Service 2.7
Street Lighting 23.7
Private Lighting -21.8
Contract A 14.6
Contract B 37.8
Overall, without Contract B 6.2
Noting that staff struggled with the results of the COSA, given the magnitude of changes it suggested, Mr. Yanov said that in an attempt to balance the impacts of the rate increases with EWEB's desire to produce and live by an integrous COSA, staff was proposing a two-step, phase-in approach to achieve the cost of service. He said this approach would ensure a maximum increase of 10-11 percent for a rate class in one year. Mr. Yanov said the increases would be implemented in April 2000 and April 2001.
Recalling a proposal, made by staff the previous year, to disconnect power costs from non-power costs via a system in which a certain amount of power variability would be carried in the operating reserve with a pre-determined "ceiling," Mr. Varner recalled that the proposal included a provision in which variability beyond the set amount would be credited to customers or added to customer bills in the following years. Mr. Varner said the utility would utilize its power acquisition function to decrease the likelihood of depleting the operating reserve or surcharging customers more than was politically acceptable, resulting in a deficit that was covered by neither mechanism. He said a 5 percent ($2 million) operating reserve was recommended.
Commissioner Smith stated that her concerns, raised during the previous Work Session, regarding the impacts on small and medium general service classes appear to have been addressed to some extent; however, she said she remained uncomfortable with the declining block rate proposed in Option 3. She said the declining block rate sends the wrong consumption signals. Noting her appreciation for staff's work to moderate the impacts on small and medium general service customers and justify the transition between classes, Commissioner Smith said she would trust staff's opinion that Option 3 was superior to Option 2.
PUBLIC HEARING
President Dyer opened the public hearing.
Charles Biggs, 2405 Willakenzie, stated that he was opposed to the proposed electric rate increase. He said it appeared that a majority of the burden would fall on small business owners and average residents, while high energy using factories receive subsidies. He suggested that EWEB tie its business rate to the number of employees to which the business pays a "family wage." He said he did not want to reward large businesses that do not pay family wages.
Commissioner Smith acknowledged Mr. Biggs' perception of the rate design; however, she said the proposed rate adjustments were based on a Cost of Service Analysis and designed to reflect actual costs of providing power to differing classes of customers. She stressed that EWEB has a no cross-subsidy policy.
Max Liebrick, 1969 Columbia, expressed concern regarding the proposed 5.5 percent increase to residential customers. He suggested that EWEB consider better uses for its properties, such as the Midgley's Building, which might result in added income for the facility and a reduced need to increase its customer's rates. Noting that he owns a number of apartments, Mr. Liebrick said he opposes the $10 hook-up fee per apartment unit. He said the basic charge is "ridiculous," and suggested that it be included in the rate. Mr. Liebrick suggested that EWEB consider an accounting system that prints a customer's bill on one sheet of paper. He said this would also result in cost savings for the utility.
Having determined that there were no other members of the public wishing to address the Board, President Dyer closed the public hearing.
MCKENZIE WATERSHED COUNCIL PRESENTATION AND INTRODUCTION OF NEW COORDINATOR
Referring to a memorandum, copies of which were included in the meeting agenda packet, Commissioner Anderson noted that the 20-member McKenzie Watershed Council (MWS) was created in 1993, in a collaborative effort by EWEB and Lane County, to respond to issues concerning the McKenzie River.
Referring to a series of overhead projections, Jim Thraikill, new MWS Coordinator, presented an overview of the various MWS committees (roles and responsibilities), and the following key projects that, in light of spring chinook as a threatened species, are particularly important:
TELECOMMUNICATIONS PUBLIC PROCESS RESOLUTION
Referring to a document entitled Eugene Water & Electric Board: Resolution - Public Process Related to EWEB Telecommunications System Development, copies of which were distributed to the Board, Telecommunications Development Manager Ken Beeson recited into the record, and requested Board approval of the following resolution:
WHEREAS, Phase I of the Eugene Water & Electric Board's (EWEB's) Telecommunications Project was completed and operational in December, 1999;
WHEREAS, the Board has reviewed the objectives, development alternatives and process for development of Phase II of EWEB's Telecommunications Project consisting of a publicly owned advanced broad band system or systems supporting voice, video, data, and Internet applications with universal service;
WHEREAS, there is a need to provide on a timely basis various electric and water utilities system and business applications, with communications to EWEB's residential, commercial and industrial customers;
WHEREAS, the community appears to want EWEB to provide the community with advanced telecommunications capability;
WHEREAS, in order to effectively provide such capability, alone or in conjunction with a development partner, the Charter of the City of Eugene should be amended to clarify EWEB's authority regarding telecommunications;
WHEREAS, EWEB has proposed to place a ballot measure on the May election ballot which provides for a charter amendment relating to EWEB telecommunications authority;
WHEREAS, if the charter amendment is adopted, EWEB may proceed with Phase II of its telecommunications system including the planning, development, financing and construction of said system;
WHEREAS, as part of the financing of said project, EWEB may need to proceed with issuance of non-recourse project revenue bonds;
WHEREAS, as part of the process of discussing the project with City Council, there has been an expression of interest that EWEB would proceed by way of election for approval of said financing.
NOW, THEREFORE, in the event the proposed charter amendment is adopted by the voters in May, 2000, and EWEB decides to proceed with Phase II of its telecommunications system, the Eugene Water & Electric Board does hereby resolve:
President Dyer said he would vote in support of the resolution because, by requiring the support of both City Council and the citizens of Eugene to place the matter on the ballot, the resolution goes "a long way" toward answering his concerns regarding unlimited authority.
Noting that she remained concerned about the issue of EWEB potentially becoming involved in the "content" of the telecommunications system, Commissioner Smith said she was relieved that the public would vote on the issue. Vice President Bishop said that although she remained concerned, she believed that obtaining the authority to conduct a full investigation of the system's potential was the correct course of action.
Commissioner Bartel moved, seconded by Commissioner Anderson, to approve the Resolution for Public Process related to EWEB Telecommunications System development. The motion passed unanimously.
PRELIMINARY FINANCING CALENDAR FOR WATER BONDS
Referring to a memorandum, copies of which were included in the meeting agenda packet, Treasurer Jim Origliosso stated that staff currently expects Board action on the supplemental bond resolution on May 16, pricing and sale of the bonds on June 6, and closing on June 21.
CONSENT CALENDAR
With regard to Consent Calendar Item 5, CH2M-Hill-Engineering and Construction Inspection Services - Water Division, President Dyer inquired as to whether the University of Oregon was to fund all costs associated with the project. Mr. Helgeson responded in the affirmative.
With regard to the minutes of the January 4 Work Session, President Dyer requested sentence 1 of paragraph 2 be amended to read: "Vice President Dyer said he believed the City Councilors with whom he spoke would not support EWEB providing cable TV and Internet access services."
Vice President Bishop informed the minutes recorder of a number of typographical errors included in the minutes of the January 4 Regular Board Meeting.
Vice President Bishop moved, seconded by Commissioner Bartel, to approve the minutes of the January 4 Work Session and Regular Board Meeting, and Consent Calendar Item 5. The motion passed unanimously.
The meeting adjourned at 9:55 p.m.
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Assistant Secretary President