Board Members Present: Dorothy Anderson, Peter Bartel, Susie Smith, Patrick Lanning, and Sandra Bishop.
Others present: Randy Berggren, Dean Ahlsten, JoAnn Andersen, Tom Buckhouse, Ken Beeson, Bert Dunn, Marty Douglass, Dick Helgeson, Jim Maloney, Roseanna McArthur, Mat Northway, Jim Origliosso, Lance Robertson, Scott Spettel, Dick Varner, Pat Ventura, John Yanov, Jim Wiley, Debra Wright, and Krista Hince of the EWEB staff; Frank Nearing, KLCC-Radio and Scott Maben, Register-Guard; members of the public; and Joe Sams, City of Eugene Minutes Recorder.
President Anderson called the Regular Session of the Eugene Water & Electric Board, (EWEB), to order at 7:30 p.m.
AGENDA CHECK
The Board reviewed the agenda and agreed upon numerous changes to the agenda items.
APPROVAL OF CONSENT CALENDAR
1. Approval of August 14, 2001 Minutes
Business Service Contracts
2. Cardwell Consulting Group - Board Governance Work - General Manager's Office - $15,000.
3. Credit/Collections, Inactive Accounts - Customer Services - $46,250.
4. Contract Labor - Cash Accounting/Atrium Department - Customer Services - $30,000.
5. Bonneville Power Administration - Eugene Substation Breaker Replacement - Electric Engineering - Electrical Division - $176,000.
6. Approval of Change to Customer Service Policies, "All Utilities", - Customer Services
Contract Award
7. Pacific Utility of Portland, Oregon - Vehicle Acquisition - Facilities Services - $368,730.80.
Vice President Bartel, seconded by Commissioner Smith, moved to approve the items on the Consent Calendar.
Commissioner Lanning pulled item 2 from the meeting's consent calendar list.
The remaining items on the consent calendar list were approved unanimously.
ITEMS FROM BOARD MEMBERS
Commissioner Bishop reported that she had attended a Facilities Services Department Barbeque. She expressed her pleasure at seeing so many people there.
Commissioner Lanning thanked staff for their time in answering his questions regarding the rate structure.
Vice President Bartel reiterated Commissioner Lanning's thanks.
CORRESPONDENCE
General Manager Randy Berggren expressed his thanks to staff who had manned booths at the Eugene Celebration.
Mr. Berggren also expressed his thanks to staff who had effected repairs to damage done by the recent lightning storm.
Mr. Berggren noted that there would be a Board Governance Meeting held on September 25, and added that a regular meeting would be held on October 2, 2001.
RESOLUTION AMENDMENT TO EWEB/CITY OF EUGENE JOINT RESOLUTION NO. 4689 - METRONET
Telecommunications Project Manager Debra Wright reviewed the proposed City Council amendments to the joint resolution and requested Board approval.
Vice President Bartel, seconded by Commissioner Smith, moved to approve the amendments to the joint resolution.
Vice President Bartel complimented Ms. Wright on her work with the City Council and commented that she had been the difference between the resolution passing or not passing.
Commissioner Bishop expressed her appreciation of the staff work involved in the implementation of MetroNet. She stressed its importance to the utility.
The motion was approved unanimously.
APPROVAL OF CLIENT ENERGY SUPPLY MANAGEMENT CONTRACTS
Bert Dunn, Mid-Market Trader, provided an update on the status of the supply management contracts. He said that Tillamook People's Utility District was changing its relationship with the BPA and would no longer need EWEB services but he noted that McMinnville Water and Light would be continuing its service and added that Clatskanie PUD and Duke Trading and Marketing had signed similar contracts.
In response to a question from Commissioner Lanning regarding whether the new contracts were as valuable as the Tillamook contract, Mr. Dunn said that the new contracts would achieve the same financial goals staff had originally had.
In response to a question from Commissioner Bishop regarding whether there were any new prospects on the horizon, Mr. Dunn said not in the foreseeable future but noted that there might be smaller miscellaneous contracts.
Vice President Bartel, seconded by Commissioner Smith, moved approval of the contracts as recommended by staff. The motion passed unanimously.
APPROVAL OF HYNIX POWER SALES AGREEMENT
Tom Buckhouse, Director of Facilities Services, provided an update on the power sales agreement. He said it was a five-year agreement that began on October 1, 2001. He recommended approval of the agreement as presented by staff. He said that the proposed rate included a fully allocated share of all EWEB delivery costs and conservation measures. He also noted that, as of September 2001, Hynix had completed the repayment of all of the capital improvement charges for the interconnection facilities, the substation modification, and underground transmission lines. He said that Hynix had the option to have EWEB purchase wholesale power from a credit worthy supplier, in the future, should they so choose. He said that Hynix and that supplier would assume all credit and load risks if such an arrangement took place.
In response to a question from Vice President Bartel regarding the option to purchase power, Mr. Buckhouse said that when EWEB first entered into an agreement with Hynix, it gave Hynix an option to pick a source of power on the wholesale level to supply their load. He noted that, at the time, Hynix chose not to do that but had expressed a desire since that time. He said the agreement gave them that option since EWEB was not committed with any particular block of power, on a long term basis, to supply Hynix's load.
In response to a question from Commissioner Lanning regarding what EWEB would charge for its services to provide open market power, Mr. Buckhouse said there was an option for that to occur in the future.
Vice President Bartel, seconded by Commissioner Smith, moved to approve the agreement as presented by staff. The motion passed unanimously.
GLENWOOD
Steve Moe, representing Glenwood Water District, thanked EWEB for its years of service. He made himself available to answer questions pertaining to the agenda item.
Marty Douglas, Public Affairs Manager, noted that the agreement with Springfield Utility Board to take over Glenwood service had been in the works for 2 years. He asked for Board approval to have the General Manager sign the agreement. He noted that a copy of the agreement had been sent to the Lane County Local Government Boundary Commission.
Vice President Bartel, seconded by Commissioner Smith, moved to approve the agreement as presented by staff.
Commissioner Bishop expressed her appreciation for the staff work involved in the agreement.
The motion passed unanimously.
PUBLIC INPUT
Brinda Na-ryan Wold, 2055 Shiloh Street, expressed her support for the tiered rate structure. She opined that such a structure would promote conservation of energy.
Eric Wold, 2055 Shiloh Street, supported the tiered rate structure. He said that the price signal would help promote conservation.
Tom Bowerman, 33707 McKenzie View, responding to previous written testimony, commented that all rate proposals had inequalities but stressed that a tiered rate structure allowed people to pay for what they were actually using while promoting conservation. He stressed his support for a tiered rate structure.
Peg Boulay, 2525 Potter, expressed her support for a tiered rate structure because it would encourage people to save energy.
Bruce Newhouse, 2525 Potter, said he strongly supported a tiered rate structure. He raised concern over other rate structures that "subsidized" over consumers and said that a tiered rate structure would send a price signal to those who did.
Howard Bonnett, 1835 East 28th Avenue, spoke in support of the proposed tiered rate structure. He commented that it was the "fairest" of the rate options.
Judi Horstmann, 1835 East 28th Avenue, spoke in support of a tiered rate structure because it would promote energy conservation.
Jerry Tanton, 38814 Camp Creek Road, raised concern that a tiered rate structure would impact those who used high amounts of electricity, and that he felt it would make him go from a middle income level to a low income.
Alan Zelenka, 1659 Orchard, spoke in support of a tiered rate structure. He said it was designed to promote conservation and was based on a basic and well founded principle. He stressed that a tiered rate structure was the right thing to do and complimented EWEB on its conservation program.
Tom Scott, 2018 Orchard, expressed his support for a tiered rate structure.
Sue Jacobowski, 2018 Orchard, spoke in support of a tiered rate structure because it promoted conservation and offered a financial incentive to customers.
Phillip Richardson, 485 West 17th Avenue, expressed his support for a tiered rate structure.
Tim Bingham, 2385 Lincoln, spoke in support of a tiered rate structure. He said it was smart for the utility, the community, and the environment.
PROPOSED ELECTRIC RATES
John Yanov, Senior Financial/Rate Analyst, provided a presentation on proposed electric rate structures. He outlined rate options as presented in the meeting packet. He noted that the staff recommendation was General Service Option 2 and Residential Option 3. He distributed a comparison of annual bills under the different rate options. He noted that under Residential Option Three, 70 percent of rate payers would have bills lower than under a flat rate.
In response to a question from Vice President Bartel regarding the possibilities of the system handling a levelized payment system, Mr. Yanov pointed out that there was a levelized payment system currently available.
Joanne Anderson, Director of Customer Services, added that though there was a current system operating, it would take significantly more staff hours to figure out a levelized payment system for customers under a tiered rate structure.
Mr. Berggren noted that the current Banner Billing System did not have the capability of handling levelized payments under a tiered billing structure but noted that staff were working to increase capacity.
Commissioner Bishop expressed her desire to see the a rate structure that promoted energy conservation.
President Anderson noted that everyone below the third tier in the propose rate structure would see lower bills than they would under a flat rate structure.
Commissioner Smith stressed the benefits of tiered rates to the majority of the community and said that added staff time to handle the billing should not be entered into the discussion.
Mr. Berggren said that staff had taken steps to implement a tiered rate structure if it was approved and stressed the necessity to keep the Board informed of all parameters. He said that staff were dedicated to maintaining a high quality of customer service and meeting the expectations of customers. He added that staff were still trying to fully understand the impacts that a tiered rate structure would impact the day-to-day operations of customer service staff.
Vice President Bartel stressed the importance of serving the highest number of customers in the best way possible.
Commissioner Lanning acknowledged that tiered rates could help achieve a higher rate of conservation but raised concern over implementing a tiered rate at the same time as a general rate increase.
President Anderson commented that implementing the tiered rate structure would help customers deal with the imminent rate increase.
Commissioner Bishop raised concern that the tiered rate structure might not be fair to rate payers.
Commissioner Smith, seconded by Vice President Bartel, moved to approve General Service Option 2. The motion passed unanimously.
In response to a question from Commissioner Lanning regarding the numbers of people who had called or written regarding the proposed rate structure, (not including public testimony), Mr. Yanov said 53 of the comments were against tiered rates, 9 were in favor of flat rates, 11 were strongly in favor of tiered rates, and 1 was against flat rates.
Commissioner Bishop raised concern over implementing the tiered rate at the same time as the rate increase. She suggested having the rate increase and then implementing the tiered rate at a future time.
Commissioner Smith commented that flat rates were not fair and would be less fair after the rate increase. She said that the only reason that a tiered rate structure was being considered was because of the rate increase. She said that it was imperative that a tiered rate structure be implemented at the same time as the rate increase so that people who had invested in conservation measures were not subsidizing wasteful consumers.
Vice President Bartel said he was supporting a tiered rate because it was in favor of the majority of rate payers. He stressed that 70 percent of rate payers would have lower bills under a tiered rate than a flat rate.
Vice President Bartel, seconded by Commissioner Smith, moved approval of Residential Option 3 as presented by staff.
Commissioner Lanning raised concern that the utility was forcing public policy on its rate payers by implementing a tiered rate structure. He stressed the need to educate the public more fully on why a tiered system was better.
In response to a query from Commissioner Lanning regarding what the staff preference was, Mr. Berggren stressed the importance of choosing what was best for the rate payers.
The motion passed 3:2 with Commissioners Lanning and Bishop in opposition.
Vice President Bartel, seconded by Commissioner Smith, moved approval of the November, 2001 rate package. The motion passed 3:2 with Commissioners Lanning Bishop voting in opposition.
PROPOSED WATER RATES
Pat Ventura, Financial Analyst, provided a presentation on proposed water rates. He noted that an 11.4 percent increase was being proposed. He noted that there had been very little public input on proposed water rates.
Mr. Ventura said staff were asking approval of the proposed rate increase and as it applies with each rate class. He note there were three residential rate design options;
1. Flat Rate, (existing)
2. Seasonal Rate
3. Tiered Rate
Mr. Ventura said staff were also asking for approval of proposed elevation charges as presented in previous Board meetings.
Mr. Ventura noted that there were two options for water districts;
1. Flat Rate, (existing)
2. Seasonal Rate
In response to a question from President Anderson regarding whether there would be an administrative cost of the tiered rate versus the seasonal rate, Ms. Andersen commented that each option stood by its self.
In response to a question from Commissioner Lanning regarding a staff preference, Mr. Berggren commented that since a tiered rate had been chosen for electric rates, there would be a consistency issue if it were not chosen for water rates as well.
Commissioner Smith, seconded by Vice President Bartel, moved to approve Water Residential Option 3, (tiered rate option).
In response to comments from Commissioner Lanning and Commissioner Bishop favoring seasonal rates, Dick Helgeson commented that seasonal and tiered rates would produce comparable results.
The motion passed 4:1 with Commissioner Bishop voting in opposition.
Vice President Bartel, seconded by Commissioner Bishop, moved to approve the proposed elevation charges as outlined by staff.
Vice President Bartel cited the significant costs to the utility for pumping water to various elevations. He stressed the need to recover that cost.
Commissioner Smith opined that elevation charges were a geographic penalty. She added that an elevation charge would not help promote conservation. She said she would vote against such a charge.
Commissioner Lanning spoke against the proposed charge. He noted that there were other cost of service items that were not charged for.
The motion passed 3:2 with Commissioners Smith and Lanning voting in opposition.
Vice President Bartel, seconded by Commissioner Smith moved approval of the staff recommendation for water district rate options, (Option 2). The motion passed unanimously.
Vice President Bartel, seconded by Commissioner Smith, moved to approve the November, 2001 water rate proposal.
Commissioner Smith reiterated her opposition to elevation charges but said she would support the motion to show general Board approval for the rate increase.
The motion passed 3:2 with Commissioners Bishop and Lanning voting in opposition.
ITEMS REMOVED FROM THE CONSENT CALENDAR
In response to a question from Commissioner Lanning regarding the extra expenses, Mr. Berggren said that the item was not a budgetary item but a business service agreement constrained under board policies.
Commissioner Lanning stressed the importance of Board commitment to Board Governance work.
Commissioner Lanning, seconded by Commissioner Bishop, moved to approve item 2 on the consent calendar. The motion passed unanimously.
The meeting adjourned at 10:45 p.m.
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Assistant Secretary President