Board Members Present: Dorothy Anderson, Peter Bartel, Susie Smith, and Sandra Bishop. Commissioner Patrick Lanning was excused.
Others Present: Randy Berggren, Ken Beeson, Steven West, Chuck Bodine, Jill Hoyenga, Scott, Spettel, Dick Varner, others, and Krista Hince of the EWEB staff; and Kris Aanderud, City of Eugene Minutes Recorder.
Due to the early conclusion of the EWEB 6:30 p.m. Work Session, Board Agenda Item 8 from the Regular Board Meeting agenda was taken up prior to the beginning of the formal 7:30 p.m. EWEB Board Meeting. The following reflects the action taken by the Board.
WANAPA GENERATION PROJECT STATUS
Ken Beeson, Energy Resource Projects Manager, reported on the status of the Wanapa Generation Project. The history of the project was reviewed, as well as project development status, as outlined in a Memorandum from Ken Beeson, dated September 26, 2001. Mr. Beeson said that during project development, there will be a number of due diligence benchmarks in place, including: legal opinions, engineering opinions about the technical viability of the project, and a market analyst opinion of the projected costs of the power over the term of the financing. All of these opinions will need to be in place for financing and will be of value to EWEB. Issues reviewed included:
President Anderson asked what the EWEB costs would be if the project does not go forward. Mr. Beeson responded that in a worst case scenario, if the project does not move forward and financing is not secured, EWEB could be out approximately $350,000. The other partners would be out a similar amount and Williams Company could be out several million dollars. Mr. Beeson said that under the terms of the contract, if the project is financed, EWEB would be reimbursed for development expenditures.
Mr. Beeson said that the participants were still working to define the environmental mitigation/renewable development component of the project. A memorandum of understanding was being drafted with the Energy Facility Siting Council and the Tribes which will include agreement that when the project is completed, the project will comply with state requirements.
Mr. Beeson said that there was also interest in developing other renewable energy sources. He said that wind generation looks to be the most viable and cost effective. A portion of the $16 million has been set aside to study potential sites. In addition, as part of this project, a significant wind project may be developed.
Vice President Bartel asked what experience Williams Company has in the development of wind, and what do they see as their role in the development of this part of the project. Mr. Beeson said that they do not have experience in the development of renewables, but they seem to be quite interested in including new wind generation as part of the Wanapa project. He added that if new wind generation were to be financed as part of the project, that some of the margins from the project might have to be used to support the project and Williams Company would have to be willing to support this.
Vice President Bartel asked if Williams Company wanted to be a development partner. Mr. Beeson said that the preliminary proposal assumed that any wind generation development would be structured like the gas project with Williams owning 70% and the public entities owning 30%. He noted that this has not been presented to top Williams management.
Vice President Bartel asked if "green credits" had been discussed. Scott Spettel, Power Management & Planning Manager, said that they had been and Williams continues to be interested in this concept. Both parties were trying to identify what to do with the "green" attribute and what are the alternatives.
Mr. Berggren said that before the Board was asked for additional authorization to continue with development, it would be important to talk clearly about the environmental mitigation and renewable development component. Commissioner Smith asked that when this issue was brought back, that there be a similar level of schedule and detail for the next step. Mr. Beeson said that the next step would be one to three months out.
Jim Origliosso, Treasurer, added that Williams has asked if the wind project could be put online before the gas project.
Mr. Beeson told the Board that there has been work on the project economic model or pro-forma. Non-fuel and non-capital costs have been identified. Regarding the ownership and financing structure, issues being addressed included:
Mr. Beeson concluded that this project represents a significant opportunity for EWEB with limited risk. He said that he expected to be back before the Board, hopefully in November, with a clearer picture of the pro-forma and the environmental issues.
Commissioner Bishop expressed appreciation for the expertise and work of both EWEB staff and counsel in this project. She said that she was very excited about this project.
No Board action was taken on this issue.
The Board recessed until 7:30 p.m. for the Regular EWEB Board Meeting.
President Anderson called the EWEB Board meeting to order at 7:30 p.m.
AGENDA CHECK
President Anderson noted that Item 8 had been addressed prior and asked that Item 7 be moved forward ahead of Item 6.
CONSENT CALENDAR
1. Minutes of August 21, 2001 Special Board Meeting
Vice President Bartel moved, seconded by Commissioner Bishop, that Item 3 be removed from the Consent Calendar and the remaining items on the Consent Calendar be approved. The motion passed unanimously, 4:0.
ITEMS FROM BOARD MEMBERS
Vice President Bartel invited members to a charette by Bart Johnson, a Landscape Architect, at Lawrence Hall from 2-5 p.m. on Friday. He said that Mr. Johnson was being considered for work on the waterfront by the City. In addition, during the next several Wednesdays from 1-2:30 p.m. there will be forums for architect students, also in Lawrence Hall. Vice President Bartel announced that he would be speaking before the group on October 17.
President Anderson asked about the potential of rescheduling of the Governance Meeting, set for November 13. Commissioner Bishop said that while her schedule was not going to allow her to attend, she suggested that the meeting be held as scheduled. She said if her schedule permitted, she would come into the meeting late.
President Anderson noted that she met with Deborrah Brewer, Marty Douglas, and Chuck Dalton about the contribution of in-lieu-of-taxes (CILT). She said that there would be a start in working with Bobby Green and some of the social agencies to write or phone the City Councilors about their needs, followed up by personal contacts by EWEB Board members. The City Council would consider this on November 21 or 26. EWEB would be working on the history of CILT payments to the City. Commissioners expressed support for this program.
President Anderson reported that she received a phone call from a man who was unhappy that EWEB was providing free water at the Lane County Fair and the Eugene Celebration. She noted that the cost for water was 1/10,000 of a cent per cup of water.
Commissioner Bishop said that it had been several months since the staff had done a review of the relationship between the City of Eugene and EWEB in the Charter Review Committee process. President Anderson responded that EWEB would be addressing this on October 16, with the City considering this on October 18. She said that the Charter Review Committee was scheduled to meet later this week. Commissioner Bishop asked that information be forwarded as soon as possible. Mr. Berggren said that he would check on this issue and provide information as it became available.
Commissioner Bishop said that since the hiring of a communications coordinator, some of the media had not been giving much press to EWEB issues. Commissioner Bishop said that the feedback she had received from the public was that there was not enough news going out about EWEB meetings. Staff reported that the goal was to have the cameras in place and the EWEB meetings on air in January.
Commissioner Bishop reported that there was a public notice that David Hinkley and Mid-Valley PreSort were suing EWEB. Commissioner Bishop disclosed that Mid-Valley PreSort was a former client of hers and said that while she had worked for these individuals in the past, she did not have any business relationship with them at this time and that she did not feel that there would be any conflict of interest. Mr. Berggren said he was not aware of any suit, but would look further into this.
Commissioner Bishop inquired about the selection of suitable sites for meetings such as the Major Customer Reception, which were not held at EWEB. Mr. Berggren said that he made the decision. Commissioner Bishop expressed dissatisfaction with the selection of the Len Casanova Center. Mr. Berggren said that he had no feedback that there would be concerns about this facility. He said that the goal was to find a suitable facility that was available to EWEB at a reasonable price, and that parking at EWEB was not adequate. He also said that it was well received to hold these events in different locations of our major customers.
CORRESPONDENCE
Mr. Berggren reported:
Commissioner Smith asked that there be continued tracking with the industries that have embraced conservation under the curtailment contracts, which were coming to a close. Mr. Berggren said that EWEB got a level of attention from businesses that there were sustainable savings for them, as well as conservation of energy.
Vice President Bartel said that it would be helpful for him to have a fact sheet on the curtailment program, including who the stars have been, as well as what some of the rate issues will be for those customers who might be in attendance at the Major Customer Reception.
Commissioner Bishop asked for a list of attendees who will attend the major customer appreciation reception.
PUBLIC INPUT
Jo Laughery spoke about the tiered rate proposal. She said that it was implied that people who were using over 3,000 kWh could do something about reducing their energy usage. She challenged that assumption, stating that large families cannot get rid of some of their kids and larger homes, built 40-50 years ago, using electric heat, which was promoted by EWEB at the time. She spoke about her specific energy use and that the tiered rate was a punishing rate for people who had no other choice. Ms. Laughery said that their usage over the last three years was 600 KWh during the summer but 4,000 KWh during the winter.
President Anderson said that the initial shock would be the energy rate increase. Ms. Laughery concurred, but said that a tiered rate was punitive.
Vice President Bartel said that he did not intend for his comments to suggest that older homes were inefficient, but that there were inefficient practices by some residents in those homes. Ms. Laughery said that providing heat in the winter was not an optional practice, noting their own conservation and efficiency efforts. Commissioner Smith said that there was a general misconception about electric heat- noting that approximately 60-70 percent of the homes in Eugene were heated with electric heat and that 70 percent of those homes will have a rate decrease on an annualized rate. Commissioner Smith said that Ms. Laughery may benefit from the tiered rate during the summer and the low usage period. She added that there were different perspectives on what was "fair."
President Anderson noted that this program will be monitored. Commissioner Bishop added that there may be advancements that will allow customers to take advantage of technology, such as meters which would allow customers to use power during non-peak hours.
Gordon Caswell read from prepared remarks regarding the publicity of the three-tiered rate for increased rates. Mr. Caswell said that people who heat with gas, oil or wood, would intrinsically use less energy, but that families with electric heat, would intrinsically use more energy. Mr. Caswell said that he envisioned his rate increase to be equal to that of someone who heated with an alternative source, but also had a swimming pool or other luxury item which used significant energy.
Commissioner Smith spoke about the matching of tiered rates with the highest energy cost to EWEB being passed on to customers who were the heaviest user. She said that additional information could be provided to Mr. Caswell.
Commissioner Bishop asked if staff would provide a graphical representation of the tiered rate so that they could assist others in understanding the rate increases.
REVISIT BPA TRANSMISSION CONTRACT DECISION
Scott Spettel, Power Management & Planning Manager, reported on the BPA transmission contract. The recommendation was to approve the "full meal deal." In making the assessment, the frequency of transmission constraints would be increasing and that third party marketers were buying up transmission. He said that they were recommending buying up transmissions available. Short term, there will be an approximate $500,000 adverse impact relative to the amounts entered into the preliminary 2002 budget. However, this cost estimate would increase even if EWEB continued on the current path of purchasing "just in time" transmission. In addition, long term savings are anticipated by going with the "full meal" BPA Transmission Contract. Mr. Spettel asked concurrence for staff to revise the transmission arrangement with BPA.
Commissioner Bishop moved, seconded by Commissioner Bishop, that EWEB accept the staff recommendation on the BPA Transmission Contract.
Vice President Bartel asked for clarification of the regional transmission organizations. Mr. Spettel said that the RTOs would be like the air controllers, that they would control the transmission across constrained points on the grid. Mr. Spettel said that the concern for confirmed transmission rights was from John Day down to Portland. The second concern was getting power from Montana and Wyoming to the pacific northwest. As a load serving utility, EWEB would contract to have the maximum contractual rights grand-fathered.
Vice President Bartel asked what kind of market impact this might have. Can excess transmission rights be sold in the future. Mr. Spettel said that this would set EWEB up to be able to sell those rights in the future, if there were excess transmissions. He noted that there was no system in place for this at this time, but it was anticipated in the future-2003-2004.
President Anderson asked if BPA was intending to increase transmission north/south, similar to east/west buildup. Mr. Spettel said that was correct, noting that there were still budgetary and process constraints. Commissioner Smith said that at the All Utility Forum which she attended, she felt that Steve Wright was reporting that there was still no authorization to build or finance more. Mr. Spettel said that to cover the loads, the increase transmission purchase was necessary.
The motion passed unanimously, 4:0.
WATER CONSERVATION UPDATE
Stephen West, Water Management Supervisor, thanked Board members for the opportunity to present an update on EWEB water conservation activities. Members were provided with written materials regarding the program, including a Memorandum from Steve West, dated September 25, 2001, Water Conservation Awards presented to the University of Oregon Physical Plant Staff and Churchill Community Garden Partners, and a copy of a grant application for water efficiency improvements.
Mr. West noted that this year was considered to be the driest year in the past 75 years, running from October 1 through September 30. He reviewed through a series of graphs, conservation efforts and savings which have been made. He said that in checking with other systems around the state, similar reductions were seen, which may be due to the high profile of conservation efforts being needed for water due to the drought situation. With the addition of the "Slow the Flow" campaign, Mr. West said that he felt that there was a well rounded campaign, which included the following elements:
Water conservation directives (from the 1993 Citizen Advisory Committee findings and the 1995 Conservation Recommendation Report)
Chuck Bodine, Water Management Specialist, reviewed commercial/industrial conservation efforts, sample results, and cost savings, including:
Six areas of use were identified, including:
Jill Hoyenga, Water Management Specialist, reviewed residential water conservation programs and results, including:
Residential Program Focus
Mr. West summarized conclusions on the water conservation program, including:
Vice President Bartel asked for feedback on the conservation efforts in relation to the newly adopted tiered rate system. Mr. West said that the tiered rate would be one of the most significant conservation tools that will be in place. Vice President Bartel asked how there could be measurable analysis of consumption reduction as a result of the rate. Mr. West said that this would be very difficult. He said that there have been efforts to build the evaluation into the program, rather than trying to collect the data later. Building evaluations during the initial stage has made evaluation efforts more time efficient. It will be difficult to distinguish the difference between the rate impact and the conservation program impacts.
Dick Helgeson told the Board that in a very short period of time, the water conservation program has evolved into a program which is recognized as a regional leader. He said that the Board's commitment, in terms of funding at a level higher than any other utility in the northwest, is exemplary. He applauded the efforts by staff and the Board.
Commissioner Bishop said she received a clipping regarding a "toilet round-up" in the Tacoma area, which provided high profile media coverage. Ms. Hoyenga said that the current rebate program currently in place allowed a rebate reduction in the utility bill, after the customer sends in a receipt. She said that the difference between the two programs was that the EWEB rebate was $25, while the Tacoma rebate was $40.
Mr. West also thanked the staff for their exceptional efforts and said he was pleased to be able to work with such staff.
ITEMS REMOVED FROM CONSENT CALENDAR
Vice President Bartel asked why the contract amount for Sandy DeLuna was different in the materials provided for this evenings meeting from materials provided for the last meeting. Roseanna McArthur, Corporate Services Director, said that there was a miscalculation in the materials provided last meeting. This item had been removed from the agenda last meeting because it was premature.
Commissioner Smith moved, seconded by Commissioner Bishop, to approve the contract. The motion passed unanimously, 4:0.
Commissioners were provided with an additional Memorandum from Dick Varner, dated September 26, 2001, regarding Steams Fuels Charge.
The meeting was adjourned at 9:27 p.m.
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Assistant Secretary President