Board Members Present: Peter Bartel, Patrick Lanning, and Susie Smith. President Dorothy Anderson and Commissioner Sandra Bishop were excused.
Others present: Randy Berggren, JoAnn Andersen, Tom Buckhouse, Dick Helgeson, Roseanna McArthur, Jim Origliosso, John Yanov, Dick Varner, Pat Ventura, Debra Wright, Jim Wiley, and Krista Hince of the EWEB staff; members of the public; and
Vice President Bartel called the Regular Session of the Eugene Water & Electric Board (EWEB) order at 7:30 p.m.
AGENDA CHECK
There was general consensus to move item No. 11 (Joint Resolution to City Council) to just after the public input portion of the meeting.
APPROVAL OF CONSENT CALENDAR
1. Minutes of August 20, 2001 Work Session and Regular Session
Request for Donation
2. Sustainable Business Symposium 2001 - November 9-10, 2001 - University of Oregon - $10,000
Resolution
3. PERS Pension Bonds, Bonding Resolution - Financial Services - Not to exceed $60,000,000
Budget Amendment
4. Budget Amendment No. 6 - Credit and Collections - Finance Division - $1,400,000
Business Service Contracts
5. State of Oregon Motor Pool Services - Facilities Services - $20,000
6. Cable Huston Benedict & Lloyd - FERC Refund Hearings - Electric Division - $300,000
Commissioner Lanning pulled item No. 2 (Sustainable Business Symposium) from the list to be considered.
Commissioner Smith, seconded by Commissioner Lanning moved to approve the remaining items on the consent calendar. The motion passed unanimously.
ITEMS FROM BOARD MEMBERS
There were no items from Board members.
CORRESPONDENCE
General Manager Randy Berggren said the September 11, Board Governance Meeting would be held on September 25, 2001. He noted that the next regular meeting would be held on September 21.
PUBLIC INPUT
Mike Kerry, 2822, River Walk Loop, raised concern over EWEB's MetroNet Project. He said that the program, as it was being presented, was not intended by the voters. He expressed a desire to see a vote for public acceptance of the project.
JOINT RESOLUTION TO CITY COUNCIL
Debra Wright, Telecommunications Project manager, made herself available for questions concerning the MetroNet Project and the Joint Resolution with the City Council.
Commissioner Smith, seconded by Commissioner Lanning, moved to accept the Joint Resolution with the City Council as presented by staff. The motion passed unanimously.
PROPOSED ELECTRIC RATES
John Yanov, Senior Financial/Rate Analyst, provided a presentation on the proposed electric rates. He noted that his presentation was the fifth public presentation on electric rates.
Mr. Yanov's presentation included a review of cost drivers for the rate increase, system revenue requirements, a cost of service summary, reasons for the tiered rate proposal, a summary of existing versus proposed rates, a comparison of rate design options, a comparison of monthly residential bills from regional utilities, and a comparison of estimated residential rate increases where known.
Mr. Yanov outlined three rate options to accompany the projected rate increase:
In response to a question from Commissioner Smith regarding whether wind power rates would be affected by the projected increase, Mr. Yanov said that those who's bill structure was at 100 percent wind power would not be affected by the raise in rates but those customers subscribing to partial wind power would see the non wind portion of their electric rates raised by an appropriate percentage.
PUBLIC HEARING ON PROPOSED ELECTRIC RATES
Vice President Bartel opened the public hearing.
Jan Spencer, 212 Benjamin, expressed his preference for option 2 of the proposed rate structures. He opined that it would send a price signal to rate payers to conserve more energy and added his opinion that power should be more expensive in general so that people would appreciate what they had.
Ken Rivernighter, 140 Hamilton Avenue, suggested that a tiered rate structure that made allowances for those with electric heating should be implemented.
Holly Cabel, 1460 West 10th, expressed her preference for option 2 of the proposed rate structures.
Dave Kintai, 38741 Cedar Flat Road, expressed his opposition to a tiered rate structure. He opined that it would be unfair to those with electric heating.
Cliff Barney, expressed his concern that the Board had "lost touch" with its rate payers and stressed the importance of making sure that those customers were "taken care of".
Bob Cassidy, favored Option 2 of the proposed rate structures. He complimented EWEB staff and the Board on considering a tiered rate and opined that such a rate structure would encourage customers to conserve power.
Howard Bonnett, 1835 East 28th Street, submitted written material into the record. He expressed his favor for a tiered rate structure and added his opinion that those in the third tier should not be eligible to subscribe to wind power.
Don Dumont, provided an overhead presentation to the Board. He commented that the tiered rate structures, as proposed, were too simplistic. He suggested that three power usage "seasons" be built into the system and monthly use, within those seasons, be averaged to come up with a more accurate rate.
Mr. Dumont also raised concern that the tiered rate structures, as proposed, would penalize those with electric heating and would encourage use of non renewable resources such as Gas and Oil.
Ted Heid, 2421 Madronna, expressed his support for tiered rates.
Peter Keyes, 1685 Skyline, spoke against the implementation of tiered rates. He opined that such a rate structure would penalize large families, those with older homes, renters, and those with electric heat. He opined that there was no data available to show that tiered rates would benefit the community and suggested that a tiered rate structure only be implemented for new construction.
Nick Urhausen, 2858 Warren, raised concern over the money being spent to educate the public on tiered rates. He stressed the importance of keeping the billing process as simple as possible.
Ed Kemp, questioned the reasoning behind a rate increase. He commented that EWEB rates were higher than other utilities in the area.
Dick Neat, 1717 West 34th, spoke against the implementation of a tiered rate system. He opined that it would be unfair to those who heat with electricity.
Vice President Bartel closed the public hearing.
Commissioner Smith stressed the importance of providing background information on tiered rates to EWEB customers.
Commissioner Lanning asked staff to provide a formal response to Peter Keyes' testimony.
Vice President Bartel said that the Board would deliberate on rate structures at the September 21, 2001 Special Board Meeting. He thanked the members of the community who spoke for their testimony.
PROPOSED WATER RATES
Pat Ventura, Financial Analyst provided a presentation on proposed water rates. The presentation included a review of cost drivers for water rate increases, a comparison of existing versus proposed rates, rate comparisons under the proposed rate structure options, and a summary of a proposed elevation charge.
Mr. Ventura outlined the options proposed by staff:
Mr. Ventura noted that the base meter charge would be the same for all options. He added that the proposed elevation charge would recover some of the power costs of pumping water to higher elevations.
PUBLIC HEARING ON PROPOSED WATER RATES
Vice President Bartel opened the public hearing.
John Hyatt commented that the third option presented by staff was the only option that would encourage water conservation.
Seeing no one else wishing to testify, Vice President Bartel closed the public hearing.
BOARD DIRECTION FOR FINAL ELECTRIC AND WATER RATE PROPOSALS
There was general agreement for staff to compose written responses to the concerns voiced during public testimony.
WANAPUM/PRIEST RAPIDS CONTRACT STATUS
Vice President Bartel introduced Tom Fink and Vera Clausen, representing Grant County Commissioners, and Don Goddard, and Lon Topaz, General Manager and Electric Division Manager of Grant County, respectively.
Mr. Goddard stressed that Grant and EWEB had a 45-year history with the Priest Rapids Project. He said that there was an offer on the table to 12 purchasers of Priest Rapids power and the facility was looking for a commitment by October 1, 2001. He noted that the deadline would probably be extended.
Mr. Goddard said that the Federal Energy Regulatory Commission, (FERC), rules required that Grant sell its surplus power based on market principles, (auctioned to the highest bidder). He said that Grant was only interested in enough power to serve its local needs and sell the remaining power at cost. He said that Grant's usage would come to 70 percent of the power that it generated and would sell the remaining 30 percent. He said that if the 12 purchasers were willing to pick up the cost of producing that 30 percent of Grant's power they could have the benefits of selling that power on market principles.
Mr. Goddard said that Grant's Bonneville entitlement, (160 megawatts), would be made available to the purchasers in an effort to add as much value as possible to the purchasers.
Mr. Goddard said that surplus power, in excess of Grant's needs but less than its 70 percent, would be offered at cost to those utilities who signed with Grant by its established deadline.
Mr. Goddard said that people who signed with Grant would get, initially what they were currently getting under the old contract, but said that this amount would decrease as Grant's load demand increased. He acknowledged that purchasers would eventually get 2/3 of current power levels.
Vera Clausen, Board President of Grant County, said that EWEB had an important choice to make. She stressed the importance of public utilities sticking together. She commented that Grant had been a good neighbor and had every reason to believe that FERC would uphold their license.
Ms. Clausen said that the Commission would reallocate power availability after the question of right of first refusal was answered. She reiterated Grant's desire for public utility participants and stressed the value of EWEB's participation.
Jim Wiley, Director of Electric Division, distributed material to the Board that demonstrated the major area of concern with the contract offering from Grant County PUD. Mr. Wiley acknowledged the representatives from Grant County PUD and agreed that EWEB has never disagreed with the right of Grant County PUD to save its native load from the output of the Priest Rapids Project. However, the problems that EWEB and the other original purchasers have with the contract offering is the treatment of non-firm or secondary energy. The proposed contract provides Grant County PUD the right to the same percentage of the non-firm energy as the percentage of the firm energy used to serve native load. A much longer portion of this energy is currently available to the purchasers.
Mr. Wiley discussed another alternative to executing the contract with Grant County PUD for the diminishing output over time is to join parties currently proposing a competing license application for the project. This proposal is being developed by a joint venture between PacifiCorp and Yakima Tribe. This in not an issue of public power versus private power because many of the original public power entities are contemplating joining the competing license partners as purchasers. Mr. Wiley indicated that to staff's knowledge, no license application has every been awarded to a non-incumbent. However, this one may have a higher probability of success because it will have a wider regional distribution of the project benefits.
Mr. Wiley concluded that Grant offered some interesting contract options tonight that EWEB would pursue with them in more detail.
ITEMS FROM CONSENT CALENDAR
Commissioner Lanning said he had pulled the item because he thought a discussion of the funding amount requested would be in order.
Commissioner Smith commented that Mr. Berggren should have the authority to deal with the issue but acknowledged that the increase in the funding was significant.
Mr. Berggren said that he would gather more data and present it to the Board.
In response to a request for his opinion on the matter, Mr. Berggren said that he liked the speaker who was requested but also acknowledged that the increase in requested funding was significant.
The meeting adjourned at 10:30 p.m.
_____________ ______________________________________
Assistant Secretary President