Board Members present: Dorothy Anderson, Peter Bartel, Susie Smith, Patrick Lanning, and Sandra Bishop.
Others present: Dick Helgeson, JoAnn Andersen, Terry Bequette, Tom Buckhouse, Roseanna McArthur, Debra Wright, Dick Varner, Mat Northway, John Yanov, Jim Wiley, Jim Origliosso, and Krista Hince of the EWEB staff; and Elise Self, City of Eugene Minutes Recorder, and members of the public.
President Anderson called the Regular Meeting of the Eugene Water & Electric Board (EWEB) to order.
AGENDA CHECK
President Anderson noted that Item 10, Interim Funding for Telecommunications School Lateral, would be pulled from the agenda. She requested that Item 2, Approval of Consent Calendar, and Item 4, Items From Board Members, be moved to the end of the agenda in order to begin the public hearing earlier in the meeting. The Commissioners agreed by consensus.
CORRESPONDENCE
Dick Helgeson, Director of Water & Steam Divisions, and filling in for the absent General Manager, made the following announcements:
Commissioner Bishop expressed her discomfort with meeting individually with Ms. Brewer and the Otak consultants. She said that it seemed that the project was shifting study and focus. She said that she would like to put this issue on an agenda for an open public discussion.
PUBLIC INPUT
Lee Moultan, 2427 Adams Street, said that he would like the Board to consider alternate forms of energy for electricity, specifically ethanol and methane. He said that there was methane running under the city streets to the wastewater management plant and that it could be used for energy. He offered to provide the information that he had about the use of ethanol to Board members. Mr. Moultan said that he understood that EWEB had some generators that were not being used. He suggested using an alternate energy source to run the generators.
Mr. Moultan invited Board members to attend the Oregon Ethanol Forum on May 8 at the Valley River Inn from 5:30-7:30 p.m. He thanked the Board for the opportunity to speak.
Commissioner Smith informed Mr. Moultan that the Wastewater Treatment Plant did generate one half of its electricity to run the plant from methane.
Nick Urhausen, 2858 Warren Street, suggested that EWEB do a study of residential use to find out why some people were such high users of electricity and some were not. He also suggested that EWEB include educational materials about conserving energy in its bills. He wondered how much energy was used when computer monitors were left on.
ELECTRIC RATE PROPOSAL
Dick Varner, Fiscal Services Supervisor, made a presentation using handouts and slides to discuss the electric rate proposal. For background information, he listed the following rate increase drivers: low precipitation to date, stream flow problems, more purchases needed to cover the low generation, and natural gas prices being well above $ per MMBTU annual average. He then noted that the financial situation in January was better than predicted because of several reasons including warmer weather, customer conservation, and selling some surplus power.
Mr. Varner reviewed the February through September projection which indicated a potential $18 million deficit by September 30. He said that this was about equal to current power reserves and that a 15 percent rate had been considered starting with the April EWEB bills. He said that only the power portion of the bill would be increased and that there would be no impact on the delivery or basic charge. He presented the Board with three residential rate proposal options: a flat option which would increase the rate from $.02632 to $.03232 per kWh; an inverted option with the first 1250 kWh at $.03067 and the remaining kWh at $.03666; and a "life line" option with the first 500 kWh at $.02632 and the remaining kWh at $.03590. Mr. Varner reviewed a table that showed the 2001 electric sales and revenue forecast comparing existing and proposed rated by rate class. He also provided a residential rate options graph which showed the difference in the percentage of bill increase between the three options.
Mr. Varner asked Mr. Northway to explain what EWEB was doing with customers in conjunction with the proposed rate increases. Mr. Northway referred members to the information included in the agenda packet. He said that the staff was considering three main activities as well as the normal conservation and customer information activities budgeted for 2001. He described the following three activities:
Cathy Hamilton, Communications Coordinator, distributed to Board members a packet of customer comments that the staff had received by email, letters, telephone calls, or by messages written on the back of the EWEB bills. She said that initially the comments were in favor of a flat increase as opposed to an inverted rate increase. She noted that trend had changed in the last few days with a fifty/fifty split among customers on these two rate proposals.
Mr. Varner concluded his presentation by informing the Board that with the improved financial situation in January, the Board had the option of taking a 30 day delay in any rate action. He said that if the Board decided to delay the decision, it would need to direct the staff as to the information and analysis that it would like to have in order to make a decision.
Commissioner Smith asked how the situation might change if the same favorable conditions remained in February. Mr. Varner said that while he could not guess as to what would happen, if the conditions remained favorable, the Board could be faced with decisions that would be more palatable in the form of a further delay in rate increases or in a smaller increase. Commissioner Smith said that she would like to have some data or analysis of the different energy consumption in different types of homes. Mr. Varner said that the system did not have data about sizes of homes, heat sources, incomes, etc. He said that the staff could do some analysis about how the rate structures would affect certain types of homes. He said that there would not be information about how many of those homes existed in Eugene.
In response to a question from Commissioner Bishop, Mr. Varner said that he thought that a decrease in the whole load of 8 to 10 percent would allow EWEB not to have to make a 15 percent rate increase. He noted that residential customers were about 40 percent, small and medium customers were about 25 to 30 percent, with the remainder being large commercial and industrial customers.
Commissioner Smith said that she was inclined to take a delay and to have staff take a closer look at various inverted rate structure options that could provide a conservation incentive and not penalize low-income, fixed-income senior citizens. She said this would give the Board the opportunity to do a more thorough job of looking at the options.
Vice President Bartel said that he was in agreement with Commissioner Smith. He added that he was in favor of hearing from the public first to get their opinions on the different options of rate increases.
Commissioner Bishop said that she did not see any need at this time to raise rates. She noted that EWEB had come out of last year with its cash reserves in tact and that the financial situation was better than forecasted for January. She said that she did not think that adequate time had been given to what kind of conservation was available and that she would like to explore innovative possibilities such as turning out the advertising lights after midnight. She said that she thought that the potential was there to delay this decision more than 30 days.
President Anderson agreed with Commissioners Bartel that she wanted to hear from the public. She emphasized that the increase of rates was for the power only and that it was driven by forces outside of EWEB. She said that she wanted to make a decision with more information and figures about what would happen.
PUBLIC HEARING ON ELECTRIC RATE PROPOSAL
President Anderson opened the public hearing.
Jean Melton, P.O. Box 50193, said that she served on the Housing Policy Board, that she was president of Alfred Taylor which owned a low-income development for disabled people, and that she was a realtor. Ms. Melton said that the inverted structure would impact people who were powerless the hardest. She said that it was important to change the behavior of landlords. She thought that people who made money from housing should be required to weatherize that housing.
Mike Dyer, 2348 Douglas Drive, said that he realized that from time to time the Board did need to increase rates. He said that he was employed by Eugene Sand and Gravel which had also faced challenges such as declining revenues and increasing expenses. He said that in the past year, the company had frozen salaries, eliminated jobs, adjusted benefits, eliminated discretionary spending, and sold idle assets. He asked the Board to consider those steps before passing on a significant rate increase, which would be about $50,000 to his company.
Craig Mayne, 3330 Arden Place, said that he did not like the inverted rate proposal because he thought that it was sending the wrong message. He said that this proposal asked a certain part of the community to shoulder the greater part of the burden for those increases. He said that "heavy users" were interpreted as being "wasteful users." He said that he used many conservation techniques but that he was still above the average rate of 1250 kWh during the winter months. He said that he had spent a lot of money and time buying energy efficient appliances and he did not think that his was a wasteful family. He said that if energy costs were going to rise then everyone in the community who used energy should all shoulder the responsibility for paying those costs.
Mari Horn, 3572 Western Drive, said that she was not for a rate increase and that she thought that EWEB should first look internally at costs. She said that staff costs should be brought in line with the community that it served. She said that it was important to "tighten belts" before asking community members to pay more. Ms. Horn said that she thought that the current management of EWEB was excessively paid and made too many costly decisions without enough checks and balances. She noted that top positions at 4J School District were lower than the top positions at EWEB. Ms. Horn said that she did not think that some of the amenities offered by EWEB to their employees were not appropriate. She wondered what was the consequence to employees for a blunder such as the $1 million cost overrun of the Midgley Building. She said that because these actions were not appropriate, a rate increase was not appropriate. She said that EWEB needed to share the problem and to get "in line" with the community that it served.
Melvin Erickson, 2537 Agate Street, said that he was in favor of the inverted rate because it was more equitable. He said that those who use less would not have to pay for those who use a lot. He said that he thought that the inverted rate would lead to an incentive system. He said that this country was based on creating incentives and that those incentives would motivate people to use less electricity. He said that the incentive to use less would then promote the environment. He concluded by saying that he favored the incentive programs so that people would use less and would therefore not abuse the natural resources.
Bill Kohler, 1238 Coburg Road, said that because the power generation companies had not prepared for times like these, the people should not be penalized for that. He said that if rates were raised now, they would probably not be lowered in the future. He suggested having rates be dependent on the size of home that one lived in. Mr. Kohler said that there were many "working poor" people who could not afford a rate increase. He said that he appreciated Ms. Bishop's support of consumers.
Dennis Martin, 2660 Woodstone Place, said that he was representing the Oregon Association for the Advancement of Retired Persons (AARP). He said that while the AARP was concerned with the proposed rate increase, the members realized that some rate increase was probably inevitable. He said that the AARP was concerned about the inflationary affect of the rate increase on nursing home care and other long-term care options for seniors, but that the most pressing concern at this time was the manner in which any increase was applied to residential customers. Mr. Martin said that on average seniors spent seven to eight percent of their income on energy with some lower income seniors paying 20 percent. He said that while the inverted approach might encourage conservation, those who could least afford it would in the end pay more for the same amount or less total energy than their more affluent neighbors. He said that many seniors did not have the money needed to retrofit the older inefficient heating systems and would be penalized under an inverted block rate system. He also questioned whether or not the inverted block system would promote conservation.
Mr. Martin summarized AARP's position as follows:
David Kelly, 2988 Chandler Street, said that he was speaking as an individual, not as a representative of the Eugene City Council. Mr. Kelly said that he did understand the rise in power costs and the rainfall issues and other factors that were out of the control of the Board and that he understood that eventually that there would be some need for a rate increase.
Mr. Kelly said that he was strongly in support of the inverted block rate system. He said that in order to maintain a healthy environment and economy, it was important to make everyone aware of power's real costs. He said that inverted rates were a way to help with that by providing a conservation incentive and by reflecting that all kilowatt hours were equal and that kilowatt hours at the top of the demand that led to additional capacity cost a lot more. Mr. Kelly said that a flat rate was just as blunt and unfair in some respects as people accused the inverted block rate of being. He suggested that the Board might even want to consider a second block tier for extremely high rates. He said that he applauded Commissioner Smith's desire to get more data before making a decision. Mr. Kelly said that he also hoped to see "smart reader meters" in the future that could lead to understanding "peak" versus "off-peak" power.
Mr. Kelly said that regardless of the method of rate increase, it would hit lower income residents disproportionately. He said that it was important to work on ideas to mitigate that affect. Mr. Kelly applauded the Board members comments and concerns about conservation. He encouraged the members to talk to the Ashland staff about the impressive things that they have done in power conservation.
Jim Wilcox, 205 W. 31st Avenue, pointed out that many citizens were buying and implementing conservation measures in their homes, while others were continuing to consume energy at greater and greater levels. He listed the conservation measures that he had installed in his home in the last five years. He noted that changing habits was also an additional important component in conservation. He said that part of the energy cost increase was due to those who chose not to invest in energy savings. He said that even though he would see less of an increase in costs because of the measures he had taken in his house, it would take him at least ten years to recuperate the costs.
Mr. Wilcox said that while his household believed that any revised rate structure should protect low-income families, the household also believed that a tiered rate structure would encourage conservation by rewarding those who shepard their energy use.
Ray Wiley, P.O. Box 5594, recounted the numerous projects he had worked on or been a part of for the past 40 years, including buying a well insulated home with electric ceiling heat designed by EWEB; working on the standards for the Gold Standard medallion homes; helping to draft the first Oregon Energy Conservation Code; designing and promoting the energy efficient building standards for EWEB; and converting the EWEB standards into the Super Good Sense Program. He said that for the past 50 years all of these programs had promoted only electric space heating. He said that about 78 percent of all housing units in the EWEB service area were now electrically heated. He noted that the owners of these homes had spent thousands of dollars to make them as energy efficient as possible. Mr. Wiley said that it would be very disingenuous of EWEB to now penalize these home owners with an inverted rate structure. He said that the key was to motivate home owners to finish work to bring their homes up to energy efficient standards. Mr. Wiley said that he had provided the Board with a draft of an energy certification program that would do that.
Mr. Wiley provided a case study of his 93 year old mother-in-law who lived alone in a modest all electric three bedroom home, one of the first to be fully weatherized under EWEB's program in the early 1980s. Mr. Wiley noted that she was on a fixed income and that it would be difficult for her to pay more for energy. He said that he did not think that she should have a higher electric rate than her neighbor who used gas heat for his home and therefore used less electric energy.
Gary Rayor, 2373 Washington Street, said that he thought that there was time to work out a rate structure. He said that he thought that the utility needed to do a better job of looking at residential business rates and the blending of them. Mr. Rayor referred to the chart in the handout titled 2001 Electric Sales & Revenue Forecast and noted that large general service businesses were paying less per kilowatt hour than the small general service businesses. He said that this showed that there was already something wrong with the inverted structure of the business pricing. He wondered why all of the contracts were not in line with the rest of the general services rate structure. Mr. Rayor concluded by saying that he had trouble with raising the residential rates without looking at business rates at the same time. He said that he approved of the inverted rate system.
Jerry L. Spencer, 4900 Royal Avenue #80, said that there was a shortage of utilities and that someone did not do a good job of planning. Mr. Spencer said that he had spent part of his retirement income on a heat pump in order to lower his electric bill. He said that now his electric bill was going to go up again. He wondered how he was going to pay his bill now on a fixed income. He also mentioned that his mother who was living on social security did not have the money to pay an increase. Mr. Spencer said that he could not understand why we sold our energy to California.
Nick Urhausen, 2858 Warren Street, said that he thought that the inverted rate increase would be an interesting experiment. He supported trying it to see how it would work. He noted that EWEB did not have to stick to it if it did not work.
Bob Cassidy, 1401 E. 27th Avenue, encouraged the Board to use Plan B, the inverted rate. He said that anything done to promote conservation seemed to make sense. He said that he had been a careful custodian of energy and noted that the inverted rate increase would probably be less for him than a flat rate increase. He criticized the plan because it did not apply to businesses noting that higher costs would encourage conservation among businesses also. He wondered if supplying energy outside of the urban growth boundary was part of the reason that EWEB needed to buy so much energy from BPA.
Mr. Cassidy entreated EWEB to get serious about conservation. He said that he had been trying for four years to suggest adjusting the thermostat anticipator after showing them the records of how much Mr. Cassidy had saved by doing that. He said that he had been assured by the EWEB staff that they would do this, and yet there had been nothing in the newsletters. He said that EWEB had not responded to his last email.
Dan Woodmark, 3010 County Farm Road, said that he was representing his mother who was on a fixed income. He said that he was leaning toward favoring the inverted rate system. He suggested having a ballot in each EWEB bill for people to vote on flat rate versus inverted rate. He said that he wanted a ceiling for electric rates so that he could plan for his business and his home.
Shawn Boles, 105 N. Adams Street, said that the inverted rate was a good idea that was long overdue. He said that the inverted rate system would be set up so that those people who were over consuming would be subsidizing those who were under consuming. He said that was an appropriate way to go. He said that he was concerned with Commissioner Bishop's strategy of not doing anything at this time. He said that if the Board did delay instituting a rate increase, he hoped that it would do some serious analysis. He suggested looking at this question: How long can this community and the Board pretend that we can provide all of the energy that everyone wanted forever? He said that conservation would stretch the capacity but that it did not increase it. He also suggested looking at the commercial rate structure at the same time as the residential rate structure. He said that he hoped that the Board would act for the long-term health of the community rather than the short-term interests of a few.
David G. Hinkley, 1350 Lawrence #6, said that he understood why the Board was considering a rate increase even though he did not like it. He said that he would be more comfortable if EWEB was out looking for more of its own generated capacity. He said that he was in favor of inverted rates and more conservation efforts. Mr. Hinkley warned that if the community did apply conservation measures before the State mandated such measures, the community could be at risk then for having to conserve even more. He noted that if rates for businesses were raised, the owner could either go out of business or raise its prices. He said that residents did not have that option.
Elizabeth Igl, 495 W. 25th Avenue, said that she lived in an all electric house and that she had participated in all the conservation efforts offered by EWEB. She wondered what would happen if the value of all the electric houses went down.
Ms. Igl said that there needed to be some incentive for landlords
to weatherize and to use conservation methods in their rental
properties.
Ms. Igl said that older houses like hers would be supporting bigger houses that were newer and more efficient. She said that she favored a flat rate. She reiterated her concern about what might happen to the value of all electric houses. She pointed out that car owners paid the same for gas no matter what kind of car they owned. She encouraged EWEB to teach citizens how to conserve.
David Blain, 2510 N. 21st Avenue, said that unfortunately EWEB did not anticipate that it would have to expand as the city grew. He added, though, that EWEB did a very good job. Mr. Blain said that the function of an electric utility was to provide electricity and not to do social engineering with a tiered rate structure. He said that was behavior modification and that it was not for EWEB to do. He said that he was against the inverted rate system.
Jake Elston, 50 North Danebo Street, said that he was the plant manager for Willamette Industries Eugene MDF. He said that most people now understood the critical nature of the energy situation. He said that with the proposed increase the total power related costs (including gas) would have increased $300,000 per month over last year at the same time. He said that these additional costs were negatively impacting Willamette Industries' competitive position in the global market. He said that he was asking the Board to closely review all its options in addressing the energy crises. He noted that any course taken by the Board would have direct or indirect impacts on the community, its residents, businesses, and potentially the environment.
Mr. Elston said that in a recent correspondence to its customers, BPA outlined the following four important areas to resolve the energy problem: increase generation; transmission improvements; conservation and voluntary curtailments; and more natural gas supplied to support additional generation. He said that his company had been exploring the option of load reduction with EWEB management and that the company thought that a load reduction of between 20 to 40 percent would be possible over time. He said that it had been indicated to EWEB management that the load share credit could be a fixed number per megawatt or a percentage of current market value. Reductions could be made in blocks or perhaps even daily reductions during peak hours. Mr. Elston said that these options could be advantageous to all concerned. He noted that a load share credit could be worth as much or more as marginal earnings gained through full production and could be justified to share holders and employees because the company would be acting in the best financial interest of both. He said that if load share credits did not materialize it would be necessary for the company to move as quickly as possible to full production. He said that once the company had made obligations to customers for full production schedule it would be much more difficult to justify volume reduction. Mr. Elston summarized by saying that Eugene MDF was committed to being part of both a short-term and long-term solution. He said that it was critical for the Board to look at some of these issues as soon as possible.
Jan Wostmann, 2645 Riverview Street, said that he supported the inverted rate system because conservation was one of the ways that EWEB could minimize the impact of rate increases to everyone. He said that he thought that the inverted rate structure should apply to businesses as well as residential customers. Mr. Wostmann said that more than two blocks should be considered in the rate structure. He added that he liked the idea of doing more education about conservation.
Richard Krause, 3787 West First Avenue, said that he was representing the board of directors for Whittier Wood Products and also as a resident of Eugene. He said that as a resident he thought that it made sense to sell power on an inverted rate structure because that is the way EWEB purchased it.
Mr. Krause said that his business had worked with EWEB to reduce its power usage and that he thought that there was more that could be done, such as using smart meters. He wondered if perhaps new businesses should be paying more for power since they would be creating the need for EWEB to purchase more power. He said that more could be done to conserve power and he thought that there needed to be a sharing, perhaps through tax credits, to accomplish this. He said that his company was wanting to work with EWEB to keep its power costs lower.
Jan Spencer, 212 Benjamin Street, said that a historical shift was happening from supply and demand to needing to reduce demand. He noted that encouraging businesses and people to move to this area resulted in increased costs to everyone. Mr. Spencer said that he was in favor of the inverted block so that people who use less energy would pay less for that energy. He added that he supported EWEB increasing its efforts in conservation programs and education. He listed some of the ways that he conserves energy at his home. Mr. Spencer said that we as a community needed to use less power.
Bob Tallman, 3275 Chevy Chase Boulevard, pointed out that everyone had different needs and used temperature as an example. He said that he did not approve of the inverted rate system and agreed that it was social engineering. He said that he had an all electric house that took a lot of energy and that one neighbor had a heat pump and another neighbor used gas, both of which took less energy. He said that he was paying the managers of EWEB to figure out how to lower rates and to do good planning. He said that there would always be cycles in the weather and that the worst case should always be considered when planning power needs. Mr. Tallman wondered why the Bonneville rates were going up. He said that it did not make sense to use the inverted rate and that EWEB had no way of knowing what kind of house people lived in and which houses were more efficient than others. He said that everyone should pay the same rate.
Stephen Billings, 40087 Deerhorn Road, said that he understood the need to raise rates. He said that he did not understand what the number of people living in a house or the income level in a house had to do with a rate increase. He added that there was no way to have all of that information. Mr. Billings listed all the means he had taken to make his house energy efficient. He noted that once rates were increased it would be hard to ever lower them. He said that he did not think that this was the right time to start a new system that had never been tried here in Eugene.
Stephanie Midkiff, 3098 Hendricks Hill Drive, said that she was in favor of the inverted rate schedule. She said that people would not change their behavior until they were forced to for economic reasons. She said that the bottom line was to not waste energy and stewardship of resources. She spoke about how some decisions around energy and resources, such as strip mining, so damaged the environment that it was hard to recover what was lost. She noted that humans were not the only species on the earth that needed resources. Ms. Midkiff supported Commissioner Bishop's suggestion of cutting back on advertising lights at night as a good way to conserve energy. She said that perhaps a multi-tiered structure would address some of the criticisms about the inverted rate structure.
Ruth Duemler, 1745 Fircrest Street, complimented EWEB for working so hard on conservation with its weatherization program and also for its low-income program. She said that she was in favor of the inverted rate system. She said that it should also apply to businesses as well as residential customers. Ms. Duemler said that she was sorry that the inverted rate structure had not been voted in by the Board two years ago after a conservation study recommended it. She said that she thought that it was a fair way to have conservation. She made the following suggestions for more conservation: promote more co-generation among industries; promote performance auditing for homes and businesses; encourage new businesses that were not intense users of energy to come to Eugene. She said that she would like to see conservation be a bigger part of the solution.
Randy Prince, P.O. Box 927, made the following suggestion for applying financial incentives for conservation: EWEB could require a landlord to provide its tenant with a disclosure of the one year history of power usage which would allow the tenant more information to make a decision about renting and would therefore give the landlord financial incentive to make conservation improvements on the property. He said that EWEB was very important to the economic health of the community by providing reasonable stable rates to the consumer. He said that he was in favor of the concept of the inverted rate structure because it was an incentive for conservation and he that it was important to protect the economic well-being with long-term stability. He said that he thought that the kind of increase proposed was too weak to get good results. He thought that the rates should be raised even higher and use the extra money to rebate the money out of a fund of the excess revenues to pay a flat amount as a dividend to the customer. He said that the amount of the dividend should be determined by the number of legal bedrooms in the house and then factored by whether or not the house used gas or other fuel energy such as space heating or water heating. He thought that this was an egalitarian way to solve the problem. He said that the rates needed to be brought up high enough to encourage the major improvements, such as solar retrofitting of older homes and demand management.
Kathy Ging, 2878 Harris Street, supported inverted rate increases with the caveat that close consideration should be allowed for special exceptions. She noted that Eugene had some of the country's lowest priced electricity due partly to artificial subsidies. She said that it was time to plan outside the power line box. Ms. Ging asked that at this time the Board increase the rates using an inverted structure and then use some of the money to design more aggressive solar water heater implementation. She said that for the average house not using air conditioning in the summer, the water heater could provide 70 percent of the house's electricity.
Howard Bonnett, 1835 E. 28th Avenue, said that he was excited about the inverted rate structure and that he thought that it was time to implement something like that. Mr. Bonnett said that a flat rate structure was inequitable. He said that a flat rate structure increase would result in the people who do not heat with electricity subsidizing the people that do. He urged the Board to look at more than two different blocks for the inverted rate structure in order to get to a level that would have an impact. He concluded by saying that the more EWEB could do to reduce consumption and promote conservation, the better off everyone would be. He said that an inverted rate structure would do that.
Sherion Fulton said that she lived in the south Eugene area. She said that she had lived over seas where water and electrical rationing happened six months out of the year. She said that she knew how to conserve and listed several ways she was doing that. Ms. Fulton said that she had fallen on hard times and that her electric bill was one third of her income. She said that whatever was decided would affect individuals like her. She said that she did not qualify for some of the low-income programs offered by EWEB. She asked the Board to please be aware of the cost to individuals when the rates were raised. She said that controlling urban sprawl would be one way to conserve energy.
Peggy Soomil, 5185 Nectar Way, said that she lived in an big old house and that she did make conservation efforts like closing off rooms and installing double pane windows and still used 5,000 kw of electricity a month. She said that she wanted to conserve, but that even if she reduced her usage by half, she would still be punished under the inverted rate structure. She said that she was against the inverted rate block and also the rate increase. She pointed out that seniors on a fixed income would also be affected as well as renters whose landlords would not weatherize. She said that basically she was turning off the heat in her house in order to conserve. She wondered if there was a way to reward people who cut their power consumption even if they still used a high number of kwhs.
President Anderson thanked all of the people who testified. She called for a five minute break at 10:20 p.m.
The meeting resumed at 10:27 p.m.
ELECTRIC RATE CHANGE
Commissioners agreed by consensus to postpone a decision about the rate increase.
Commissioner Smith thanked all the people who attended the meeting and who testified. She commented that the Board was as frustrated as those who testified. She made the following suggestions to the members of the public of ways to help with the larger picture:
Commissioner Smith clarified that the commercial, industrial, and residential rates were all based on cost of service analysis. She said that the utility and the Board had a policy that none of those sectors of classes of customers would cross subsidize any of the other classes of customers. She added that the commercial and industrial rates were being adjusted commensurately to address the cost of serving those classes of customers.
Commissioner Smith pointed out that the inverted block rate was not new and was not an experiment. She said that it had been used quite frequently as an incentive for conservation through out the 1970s and 1980s in other parts of the country.
Vice President Bartel said that he appreciated the city councilors who came and testified. He referred to Mr. Kelly's comment about any rate increase being a "blunt instrument." He agreed by noting that no rate structure was going to be perfect.
Vice President Bartel said that he would like the city council to do its part in this effort. He said that it could be anything from mandating, through the code certain standards particularly rental housing that had to meet to providing money for conservation programs.
Vice President Bartel said that he was interested in the load share credit idea. He asked the staff to provide any information as to whether or not this would be a viable option.
Vice President Bartel said that he was very impressed by the testimony and that it showed that people were thinking about the issue. He said that there was less negativity about raising the rates than how the rates would be raised.
Commissioner Bishop added to Commissioner Smith's comments about the cost of service by noting that the Board and the staff was always looking for ways to improve the cost of service.
Commissioner Bishop commented about the use of curtailment with businesses. She said that there had been some good decreases in electric usage with this method, but she cautioned that curtailment was fine until it affected the employees and also the peripheral community that supported the businesses. She added that she wanted to be really careful if that approach was used. She said that it was only fair if to offer a rebate to residential customers when it was offered to business customers. She said that if small businesses were allowed to load share, then the Board would have to look at that option for residential customers.
Commissioner Bishop said that she did not support the inverted rate structure at this time even though it sounded like a good idea. She said that she thought that the inverted rates that the Board was considering were just too simplistic and that they may punish people who had maxed out their ability to conserve. She said that an alternative to inverted rates was to set some standards that would get absentee landlords to bring their property up to standards. She said that perhaps this incentive could be tied to a hook-up standard.
Commissioner Bishop said that she would like for EWEB to set up a rate stabilization fund so that EWEB did not have to tap into operating cash reserves during an energy crises.
Commissioner Bishop thanked everyone for testifying. She said that it helped the Board to hear some of
Commissioner Lanning echoed the thanks to the community for its testimony. He also thanked the staff for their efforts to internally control the situation. He noted that everything the staff had done helped the Board to have another month to work on this issue.
Commissioner Lanning said that the testimony from the public had indicated that people understood that we live in an interconnected world. He said that he would like to see the staff do additional work on how EWEB could be even more progressive. He suggested a systems team within EWEB to look at other perspectives and opportunities and to look long-term for options that would have a significant impact. He said that, for example, perhaps some program with the rental housing would have a bigger impact on the community versus some other options.
President Anderson agreed that the Board needed to put more thought into how to deal with recalcitrant landlords who would not make conservation improvements to their property.
President Anderson commented to Commissioner Bishop that EWEB did have a rate stabilization fund and that it was EWEB's reserves account.
President Anderson said that instinctively she was in favor of inverted rates, but that she had not made a final decision yet. She said that she needed more information on the impacts and that she needed more time to study the other options. She said that she was not sure that this was the time to implement inverted rates, when rates were having to be raised.
Commissioner Smith said that she would like to look at the options in reference to the sustainability principles and to see what kind of a rate structure the sustainability principles would drive. She said that if the rate structure would impact negatively on the participants in the Universal Service Plan, then money from the increase should be put into the plan to mitigate that impact. Commissioner Smith said that she would like to see the rate structure support EWEB's values about the environment and conservation incentives.
Commissioner Smith said that she would like to see what a three block alternative would look like.
Commissioner Smith said that she would like to have a more complete discussion with the Board about the inverted rate structure. She added that she was a supporter of inverted rates and she was very much a supporter of programs that supported the needy in the community.
Vice President Bartel said that he was supportive of the inverted rate structure and thought that three tiers would be a good starting point. He said that the community had clearly said in the testimony that it would like a look at the inverted rate structure. He was glad to hear that other members of the Board were willing to consider the structure also.
Commissioner Bishop acknowledged that President Anderson could be right in saying that the Operating Reserve Fund was the same as a Rate Stabilization Fund.
Commissioner Bishop said that EWEB did not have a revenue shortfall and did have some financial flexibility, so she proposed that the staff be given 90 to 120 days to research and bring back information about the different rate structures. She said that she thought that a decision about a rate increase could be postponed until April or May.
Commissioner Lanning said that he wanted to know the long-term affects of inverted rates on conservation.
In response to a question from President Anderson, Mr. Helgeson proposed that the staff gather as much information as possible in the next 30 days and bring it back to the Board which would then decide whether or not to take action at that time based on the information and the financial situation. He reviewed the list of information requested by the Board members:
APPROVAL OF CONSENT CALENDAR
1. Minutes of the January 3, 2001 Work Session and Regular Board Meeting
In the last sentence of the second paragraph on page 8, Commissioner Smith changed the word "suggested" to "noted."
Commissioner Bishop said that she did not think that the meeting notes from November 21, 2000, should not be kept or published as there was not a quorum of members at the meeting.
BUSINESS SERVICES AGREEMENTS
2. Floyd L. Farstad - Treatment/Compliance Reporting Services - Water Production - Water Division - $7,620.
3. Sun Maintenance - Hardware/Software Support Renewal - Information Services, Corporate Services - $40,000.
4. Thomason Ford - Vehicle Acquisition - Shop - Facilities Services - $172,279.
5. Bob Hinrich's & Associates - Strategic Metering Project - Energy Management Services - Customer Services - $12,000.
6. Montgomery Watson-Leaburg-Walterville Relicensing - Electric Division - $48,847.
7. Pioneer - Electric Division - $116,230 of which $96,365 is reimbursable by TelecommLocate Developer and City of Eugene.
Vice President Bartel moved, seconded by Commissioner Smith, to approve the consent calendar. The motion passed unanimously, 5:0.
STATUS OF SHORT-TERM CONSERVATION COMMUNITY OUTREACH
John Mitchell, Communications Coordinator, asked the Board for feedback on the Conservation Communications Plan that was included in the agenda packet. He said that the plan was to encourage conservation in two ways: wise use of energy in the short-term, and the energy management programs which were long-term conservation. He said that there would be media campaign, newsletters, and other publications. He said that the staff would be reaching out to the schools. He noted that there had been two front page articles about conservation in The Register-Guard. He said that the staff would be using a more broad based approach than in the past to get the information out to the public.
Vice President Bartel said that the staff had done an outstanding job in getting the information out. He added that through the staff's efforts had resulted in the large number of community members who testified earlier in the meeting.
ITEMS FROM BOARD MEMBERS
Vice President Bartel said that he was sad to read the article about Charles Strange. He said that he had met him and that he was a very gregarious person.
Vice President Bartel said that he had moderated a project called Region 20/50. He said that Region 20/50 was a subsection of the Lane County Region. He said that representatives from the governmental jurisdictions and from the private sector met to discuss each jurisdiction's priorities. Vice President Bartel said that the discussion was very interesting. He noted that one community listed telecommunications as its priority.
Commissioner Lanning said that he had attended the City View Reservoir community input session on January 31 at Westmoreland Elementary School. He said that he was very impressed with the turn-out at the meeting and with the way the staff was engaged with the community. He thanked the staff for its work on that meeting.
Mr. Helgeson said that he had enjoyed being at the meeting and sitting in for Mr. Berggren.
President Anderson and the Board wished Jim Wiley a happy birthday.
The meeting was adjourned at 11:20 p.m.
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Assistant Secretary President