Board Members present: Dorothy Anderson, Patrick Lanning, Paul Conte, and Ron Farmer. Commissioner Sandra Bishop was excused.

Randy Berggren, Dick Varner, Debra Smith, Roseanna McArthur, Jim Origliosso, Joanne Anderson, Dick Helgeson, Ken Beeson, and Krista Hince of the EWEB staff; Jo Sams, City of Eugene Minutes Recorder; Members of the public and Carol Heinkel, Region 2050.

WANAPA DEVELOPMENT STATUS

Ken Beeson, Energy Resource Projects Manager, Scott Spettel, Power Management and Planning Manager, and Jim Origliosso, Treasurer, provided a presentation on the Wanapa Project. The presentation included a project review, a development status update, a project schedule, project budget status, and a summary of the project's potential benefits to EWEB. Mr. Beeson distributed a written copy of the presentation to be included in the meeting packet.

Mr. Beeson said the project was a proposed natural gas fired generation project on Umatilla Tribal land near Hermiston. He said the development participants were: Confederated Tribes of the Umatilla Reservation, The City of Hermiston, Port of Umatilla, and EWEB. He said the public entities involved in the project planned to form a "190 Entity" under Oregon Revised Statutes. He noted that EWEB would receive 15 percent of the project's power output. He noted that EWEB was not obligated to contribute any project financing.

Mr. Beeson noted that there would probably be a change in the project developer. He said the replacement developer would be Diamond Generating Corporation which was a subsidiary of Mitsubishi Corporation. He said that Diamond had a lot of experience in the generation project development area. He stressed that there would be no change in the development agreement or the developer's responsibilities and obligations.

Mr. Origliosso said the project was being pursued as a low cost project. He said the idea was to achieve the lowest cost per generated megawatt hour. He said there were alternatives that varied with two conditions:

1. Special accelerated tax depreciation given the location of the proposed project on tribal land.

2. Tax exempt financing.

Mr. Origliosso said the two conditions were usually an either/or situation.

Mr. Beeson said that before the project was brought to the Board for a final decision, staff would conduct a public briefing to discuss the project and get input from citizens. He said he had no schedule in mind but estimated that this could happen in Spring 2003.

Mr. Beeson presented a tentative project schedule. He said the partners would be looking hard at getting the business structure and financing in place for the project. He said the assumption that was driving the schedule was that it took approximately two years to complete a facility such as the one being proposed. He outlined pre-development and development costs and noted that EWEB and the City of Hermiston would potentially be reimbursed for some of the development costs. He estimated an amount of $50,000 to go back to the utility.

Mr. Beeson said there was a risk that if the project was not completed EWEB would not be reimbursed for the money it had invested.

In response to a question from Commissioner Conte regarding reimbursements to EWEB, Mr. Beeson said the development agreement provided for EWEB to be reimbursed. He said staff were working with the tribes to make an agreement about reimbursements so the utility would not loose its funding if the project were not completed.

Commissioner Farmer regarding due diligence on the financial side, Mr. Origliosso said staff were checking the financial status of Diamond at the current time.

In response to a question from Commissioner Farmer regarding sovereign rights of the tribe, Mr. Origliosso said that the tribes would require outside investment to do any development on their land. He said that the sovereign rights of the tribe had been a help to the project rather than a hindrance so far. He said the utility had not run into any problems with the tribe because of its sovereign status.

Commissioner Farmer raised concern over possible future trouble with sovereignty issues.

Mr. Berggren said the tribe had been very cooperative up to the present time.

In response to a question from Commissioner Farmer regarding market risk, Mr. Spettle said that Diamond Energy would only move forward if substantially all of the base load project output was sold on a firm, long-term basis. Mr. Spettel noted that were EWEB to purchase any project output directly, that EWEB would take on the risk that the cost of such purchased power would be advantageous relative to power prices in general.

Commissioner Farmer questioned EWEB's share of 16 million contribution, Ken Beeson, no direct contribution.

Commissioner Farmer urged caution over using synthetic leases.

Mr. Beeson said the main benefit was that the utility would acquire a long term, low cost, dependable power source other than Bonneville. He said there was benefit in being involved in a project that set a higher standard for environmental mitigation.

Regarding next steps for the project, Mr. Beeson recommended taking a more detailed look at the work plan and decision points over the coming year. He said he expected a focus on business structure and financing arrangements. He said there were a series of steps involved in forming a public entity.

In response to a question from Commissioner Conte regarding whether there had been a review of the draft environmental assessment, Mr. Beeson said there would be a review prior to any official environmental impact statement being released.

Mr. Berggren noted that there was some sense of urgency on the development schedule. He noted that there was no Board meeting scheduled for review of the plan. He asked whether the Board were comfortable with him acting on his own authority.

Commissioner Anderson suggested that the Board could review any issues via e-mail.

Commissioner Farmer said he would defer to the General Manager's judgement.

REGION 2050 PRESENTATION

Marty Douglas, Public Affairs Manager, and Carol Heinkel, Lane Council of Governments representative, provided a power point presentation on Region 2050.

Mr. Douglas said EWEB was participating in the plan through the Lane Council of Governments, (LCOG), He said that LCOG was requesting $25,000 to be paid toward the plan over the next two years. He said that EWEB had been a participant in long range planning efforts in the past. He said EWEB's participation was to help ensure EWEB's capability to serve future customers. He said EWEB's own planning effort fit more into the time from the Region 2050 planning effort.

Ms. Heinkel said Region 2050's goal was to improve and sustain the region's quality of life by building consensus among public and private interests on goals, objectives, and actions taken in six quality of life categories:

1. Land Use and Development Patterns

2. Natural Resources, Open Space and the Environment

3. Community Facilities and Services

4. Jobs and the Economy

5. Housing

6. Transportation

Ms. Heinkel said one of the purposes of the plan was to eliminate mistakes in future development patterns for the region. She said the future distribution of the population was a major concern for the region.

Ms. Heinkel outlined the Yesterday, Today, and Tomorrow scenarios for the region. She noted that the Today scenario used less land and depended on nodal development. She noted that increased capacity in waste water and other utilities would be called for.

Ms. Heinkel said that, over the next two years, the public would become increasingly involved in the planning process.

In response to a question from Commissioner Anderson regarding input from smaller cities, Ms. Heinkel said there had been "amazing" participation from smaller cities. She noted that as many as three elected officials from each city in the region had been attending meetings.

In response to a question from Commissioner Conte regarding the funding for Region 2050, Ms. Heinkel said the project had received $310,000 in start up money for the first two years from the Department of Economic Development and the Department of Land Conservation and Development. She said the current budget was $95,000 for the next two years. She noted that staff were spending a lot of time seeking additional funding. She said the Oregon Community Foundation had been approached for a $65,000 donation.

In response to a question from Commissioner Conte regarding EWEB's role in the process, Ms. Heinkel said Deb Brewer had been a participant from the start of the process. She said that EWEB had been able to provide information on what parts of the region were being considered for service. Mr. Douglas added that there was also a factor regarding communication with other jurisdictions and how EWEB could assist them in utility service.

In response to a question from Commissioner Anderson regarding whether other areas in Oregon were doing the same thing, Ms. Heinkel said there were several other regions that were doing similar projects.

In response to a question from Commissioner Farmer regarding why some nearby jurisdictions were not participating in the process, Ms. Heinkel said some of the reason was political and some of the reason was practical, having to do with budgetary issues. She commented that the region should include Harrisburg and Monroe and other areas but said that it would be extremely expensive to put a regional geographic information system together for those smaller areas. She expressed a hope of at least engaging those areas in the discussion.

In response to a question from Commissioner Lanning regarding future conferences, Ms. Heinkel said the next conference in the City of Eugene would be October 31, 2002. She said there would be another regional livability conference held in the spring of that year.

The meeting adjourned at 7:05 p.m.

_____________ ______________________________________

Assistant Secretary President