Board Members Present: Dorothy Anderson, Peter Bartel, Susie Smith, and Sandra Bishop. Commissioner Patrick Lanning was excused.

Others present: Randy Berggren, Ken Beeson, Tom Buckhouse, Marty Douglass, Lance Robertson, JoAnn Andersen, Jim Origliosso, Jim Wiley, Jim Maloney, Brenda Sirois, Dick Varner, and Krista Hince of the EWEB staff; and Joe Sams, City of Eugene Minutes Recorder.

WANAPA DEVELOPMENT UPDATE

President Anderson called the Work Session of the Eugene Water & Electric Board to order at 5:30 p.m.

Ken Beeson, Energy Resource Project Manager, provided a presentation on updates in the Wanapa Project's development. The presentation included information on project development status, schedule, budget status, benefits of participation, and an environmental mitigation proposal.

Mr. Beeson noted that the work on the project was moving more slowly than what was envisioned by the participants at the time the development agreement was signed. He added that this was not unusual for a project of that size. He said until the transmission access schedule was defined more clearly the initial project pro-forma would be delayed.

Mr. Beeson said there would be open houses held to inform the public, and seek public input, about EWEB's participation in the Wanapa Project. He said staff viewed the project as a cost effective, reliable, and substantial source of power for the utility that would have stable prices.

In response to a question from Commissioner Bishop regarding how the project would diversify EWEB's portfolio, Mr. Beeson said it would reduce EWEB's dependence on Bonneville Power Administration. He added that there was a wind component that came with the project.

In response to a question from Commissioner Bishop regarding the availability of a dollar figure on the utility's risk, Mr. Beeson reiterated that the initial pro-forma was not yet available. Commissioner Bishop said there was little or no financial risk to pursue this project.

In response to a question from Commissioner Bishop regarding the delay, Mr. Beeson said certain work could be done without a clear idea of transmission access but noted that transmission access needed to be defined before the project could be completed.

In response to a question from Commissioner Smith regarding the environmental mitigation and whether it was realistic to only look at carbon dioxide emissions, Scott Spettel, Power Management & Planning Manager, and said all aspects of mitigation would be covered but there would be a special emphasis on carbon dioxide emissions. He noted that there was a 1997 law that required new thermal plants to offset a portion of carbon dioxide emissions.

Commissioner Smith raised concern over the seemingly narrow focus on carbon dioxide. She suggested looking for other significant areas and designing a flexible plan that would address the concerns expressed in the Environmental Impact Statement, (EIS).

Mr. Beeson said the issue was finding enough local projects to mitigate carbon dioxide emissions. He said other areas would be addressed by the EIS.

Mr. Beeson called for board feedback regarding whether there was enough focus on renewable investments. He said the target for the project was 156 megawatts, (30 percent), wind power. He said a wind project of that size would mitigate the carbon dioxide emissions for the entire project.

In response to a comment from Commissioner Smith regarding putting mitigation funding for the project into wind power, Mr. Spettel said it was still an open question but noted that wind power would play a role.

Commissioner Smith stressed that there were more benefits to wind power than just offsetting carbon dioxide emissions. She reiterated her desire to see mitigation funds used expressly for wind power.

In response to a question from Commissioner Bishop regarding the possibility of the project failing and the environmental projects continuing, Mr. Berggren said the money for renewables would have to come from the project financing and needed to occur simultaneously.

Vice President Bartel expressed concern that so many partners would mean a potential conflict between industry standards and local interests.

Vice President Bartel said the "big issue" for him was that the project was going to be used as a "hedge" to reduce dependence on BPA. He raised concern over the stability of BPA in the future and noted that the project was a substantial hedge. He urged staff to move ahead on the project.

Mr. Spettel noted that the contract with BPA could be extended in 2011. General Manager Randy Berggren added that the project was a large physical value for a reasonably low financial cost.

The work session adjourned at 7:20 p.m.

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Assistant Secretary President