Board Members present: Dorothy Anderson, Peter Bartel, Patrick Lanning, and Sandra Bishop. Commissioner Susie Smith was excused.
Others present: Randy Berggren, JoAnn Andersen, Tom Buckhouse, Marty Douglass, Mel Damewood, Cathy Hamilton, Ron Wilson, Jim Wiley, Dick Varner, John Yanov, and Krista Hince of the EWEB staff; members of the public; and Joe Sams, City of Eugene Minutes Recorder.
AGENDA CHECK
President Anderson called the meeting to order. There were no changes to the agenda.
APPROVAL OF CONSENT CALENDAR
Minutes
1. Approval of February 6, 2001 Work Session and Regular Session Minutes
Business Services Agreements
2. CYNTEC Corporation, Water Management Services, Water Division - $75,000 for three years.
President Anderson noted that there was a third consent item added to the packet relating to Lane Council of Governments and EWEB intergovernmental agreements.
Commissioner Bishop pulled the minutes and Item Number 3 from the consent calendar.
Vice President Bartel moved, seconded by Commissioner Lanning, to approve the remaining items on the consent calendar. The motion passed unanimously.
ITEMS FROM BOARD MEMBERS
There were no items raised by Board Members.
CORRESPONDENCE
General Manager Randy Berggren reported on the following items:
In response to a question from Commissioner Bishop regarding whether there would be any action taken during the upcoming BPA agenda item on March 20, Mr. Berggren said that the item was informational only.
PUBLIC INPUT
There were no members of the public wishing to speak.
ELECTRIC RATE PROPOSAL
Fiscal Services Supervisor Dick Varner provided a presentation on the electric rate proposal for Spring of 2001. He noted that there was no significant new information.
Mr. Varner went over uncertainties in the rate forecast. These included low stream flows, retail loads, forced outages, fluctuating market prices, margin on wholesale prices, and short term generation projects.
Mr. Varner went on to provide a current financial analysis and listed options for a spring rate increase. He outlined a no rate increase option, a 5 percent increase option that would take effect in April, and a 15 percent increase that would take effect in April.
Regarding EWEB's cost mitigation measures, Mr. Varner recommended options including aggressive conservation by EWEB, reducing the facility's open hours, a late fee for customer bills, and a deferral of capital projects.
Mr. Varner noted that there were other options including a wage and salary freeze, foregoing incentive payments to employees, and a hiring freeze, but stressed that staff was not recommending those options.
Mr. Varner said that there had been significant staff discussion on inverted rates and that staff was not recommending an inverted rate at the current time. He stressed that more study was needed to make a complicated inverted rate structure work.
In response to a question from Commissioner Bishop regarding the definition of an unforeseen non power event, Mr. Varner cited a storm as an example.
In response to a question from Vice President Bartel regarding the actual value of the load reduction proposal, Mr. Varner said that he could not estimate a value without knowing how many customers would participate.
In response to a question from Vice President Bartel regarding whether there had been discussion with Hyundai about a load reduction proposal, Mr. Varner said that Hyundai received its power directly from the Bonneville Power Administration (BPA).
In response to a question from Commissioner Bishop regarding load reduction proposals for residential customers, Mr. Varner said that the process would be too labor intensive to implement below a contract power level.
VII. PUBLIC HEARING ON ELECTRIC RATE PROPOSAL
President Anderson opened the public hearing.
Bob Cassidy spoke in favor of an inverted rate structure. He said that it would promote conservation and penalize heavy power users. He stressed that rate increases should be done solely to promote conservation.
Hugh Perrone recommended the third rate increase option as outlined in the staff presentation. He stressed that it was an economic reality that cost increases had to be passed on to the customer. He urged the Board to do the opposite of what was currently happening in California.
President Anderson closed the public hearing.
VIII. ELECTRIC RATE PROPOSAL DISCUSSION
President Anderson raised concern over reducing office hours and charging late fees for payments.
In response to a question from Vice President Bartel regarding the aggressive conservation mentioned in the staff report, Mr. Varner said that it would be an internal practice for EWEB employees to take a major part in ensuring that as much power as possible was saved.
Vice President Bartel commented that EWEB should act as an example when it came to energy conservation.
In response to a question from Vice President Bartel regarding charging late fees for payments, Mr. Varner said that EWEB was one of the few facilities in the state that did not currently charge late fees.
In response to a question from Vice President Bartel regarding deferral of capital projects, Mr. Varner specified that these would be projects that would not have a major impact to the facility during the year in question.
Commissioner Lanning spoke in support of aggressive conservation efforts on EWEB's part. He suggested looking at the other mitigation measures in the long term.
Commissioner Bishop said that the potential savings to the facility were not worth shortening its hours of business. She was also against the idea of charging late fees to customers but acknowledged that the option might need to be looked at in the short term. She agreed with Mr. Varner on the options that were not recommended by staff.
There was general consensus to implement an aggressive conservation strategy for the EWEB facility.
Mr. Berggren said that staff was recommending the 5.4 percent rate increase option.
In response to a question from Commissioner Lanning regarding whether a 5.4 percent increase would encourage customers to conserve energy, Mr. Varner said that staff was split on that question.
Mr. Berggren said that it was a balance proposal that provided incentive to customers to conserve while, at the same time, being fiscally prudent.
Vice President Bartel stressed his desire to see an inverted block rate structure before the planned October rate increase.
Vice President Bartel, seconded by Commissioner Bishop, moved to approve a 5.4 percent rate increase to begin in April of 2001.
In response to a question from Commissioner Bishop regarding cash reserves that EWEB could access, Mr. Varner said that the facility had $20 million in reserve but cautioned that if the market fluctuated this reserve could diminish at the rate of $2 - $4 million a month. He went on to say that the there was approximately $10 million in the capital reserve but noted that $8 million of that reserve had already been earmarked for other things. He also said that the facility had an $8 million line of credit to use in emergencies.
In response to a question from Commissioner Bishop regarding what a 5 percent increase would include, Mr. Varner said that only the power charge would be increased.
The motion passed unanimously.
Regarding inverted block rate structures, President Anderson stressed the importance of getting more information to the public and suggested an incentive program to get local landlords to weatherize their properties.
Mr. Varner estimated that it would take three months to come up with a workable inverted block rate structure proposal.
HAYDEN BRIDGE EXPANSION STATUS
The item was postponed to a later date.
Vice President Bartel left the meeting at 9:30
ITEMS REMOVED FROM THE CONSENT CALENDAR
Commissioner Bishop called attention to typographical errors on page 14 and 16 of the Minutes of February 6.
Commissioner Bishop noted that the November 21 meeting did not have a quorum and should not have been made a part of the public record since it was not an official meeting. She suggested getting rid of the notes.
Commissioner Bishop, seconded by Commissioner Lanning, moved to approve the minutes of February 6, 2001 as amended. The motion passed unanimously.
Regarding item 3 in the consent group, Commissioner Lanning stressed that all high schools in the area needed to be included in the project and called for wording that included the Bethel School District.
Commissioner Bishop, seconded by Commissioner Lanning, move to approve item 3 of the consent calendar. The motion passed unanimously.
The meeting adjourned at 9:40 p.m.
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Assistant Secretary President