Board Members Present: Patrick Lanning, Sandra Bishop, Paul Conte, and Ron Farmer. President Dorothy Anderson was excused.
Others present: Randy Berggren, JoAnn Andersen, Ken Beeson, Terry Bequette, Bill Fletcher, Tom Buckhouse, Marty Douglass, Jim Wiley, Dick Varner, Scott Spettel, Debra Smith, and Krista Hince of the EWEB staff; and Gavin O'Neill, City of Eugene Minutes Recorder
Vice-President Lanning called the Regular Board Meeting to order at 7:35 p.m.
AGENDA CHECK
There were no changes to the agenda.
APPROVAL OF CONSENT CALENDAR
Minutes
Business Service Agreements
Commissioner Bishop, seconded by Commissioner Farmer, moved to accept the consent calendar as presented. The motion passed unanimously (4-0).
ITEMS FROM BOARD MEMBERS
Commissioner Bishop said she received calls from concerned citizens regarding the clearing of trees and vegetation from the McKenzie River Canals. She asked why the clearing was happening. Electric Division Director Jim Wiley said there was an annual Federal Energy Regulatory Commission (FERC) safety inspection, which included checking the dams and berms for vegetation which led to leaks. FERC ordered the clearing completed by September, 2002. He said the clearing began in February or March 2002 using sheriff's work crews and a private logger who split the profits from the cleared timber. He said that while the local residents were informed of the plan, he had gotten calls as well, mostly regarding timber that has been cut down but not cleared during the fire season.
Commissioner Bishop said if this issue had been brought to her attention, she could have asked staff to ask FERC for another solution. Mr. Wiley said FERC would not allow for another solution. He said FERC was firm regarding its dam inspections, and that Eugene had already gotten by with ten or fifteen years of overgrowth.
Commissioner Bishop asked if the warming of the canal water due to the clearing project posed a water quality issue. General Manager Randy Berggren said that the canal water was warmed anyway as it passed through the generators.
Mr. Wiley noted that President Anderson and Commissioner Farmer had reviewed the site. FERC staff had also seen the site and were pleased with the project. He said FERC extended the project's deadline.
Commissioner Bishop said she had heard the clearing project was abusing the land so she wanted to visit the site so that she could speak to the complaints herself. Staff agreed to arrange a site visit for Commissioner Bishop.
CORRESPONDENCE
General Manager Randy Berggren said EWEB's presence at the Eugene Celebration was a success. He encouraged the Board to attend the upcoming Major Customer Meeting. He gave an update on the Northwest Power Planning Council meeting in Portland.
PUBLIC INPUT
There were no members of the public who wished to speak at this time.
TELECOMMUNICATIONS PROJECT
Debra Smith, Telecommunications Project Manager, said staff recommended the Board authorize the General Manager to negotiate a master agreement with Oregon NoaNet which would cover fiber extensions to NoaNet customers, a dark fiber lease for lateral extensions and backbone fiber, and pricing consistent with the methodology of the pricing model. She said NoaNet Oregon was a startup venture. NoaNet had agreed to put money on deposit with EWEB to cover the next lateral.
Commissioner Conte referred to page 5 of the "Telecommunications Future Strategy" memorandum, section entitled "Requested Action."
Commissioner Conte moved that the Board act on the action with a fifth clause added: "All of the above is subject to EWEB's counter-party credit policies."
Commissioner Farmer, seconded by Commissioner Conte, moved to amend the motion by striking the second clause, "Payment over time of the capital investment to connect the customer would be at EWEB's discretion and would not exceed three years," and the third clause, "Interest would accrue at EWEB's cost of funds as calculated for purposes of crediting customer deposit accounts." The motion passed unanimously.
Commissioner Conte, seconded by Commissioner Farmer, moved that the Board act on the action in its newly amended form. The motion passed unanimously.
ARROWROCK HYDRO POWER PURCHASE AGREEMENT
Scott Spettel, Power Management and Planning Manager, referred the Board to the September 24, 2002, report entitled "Arrowrock Hydro Project." Mr. Spettel said the cost of the project appeared feasible at first. However, his recommendation to the Board was not to proceed with this project. He referred to a list of six concerns beginning at the bottom of page 2 in the aforementioned memorandum. Regarding the first concern, hydro uncertainty, he said that between the years 1928 and 2000, the average output went down 11 percent. There were also a number of bad, or dry years that could wipe out the project financially. Regarding the second concern, climate change, he said the dry years presented a major financial risk as well. Regarding the third concern, fish and wildlife, he said EWEB could manage this concern. Regarding the fifth concern, the districts, he said EWEB could structure sound power sales contracts and had very good working relationships with the districts. Regarding the sixth concern, the Engineer, Procure, and Construction (EPC) contract, he said the developer selected by the districts did not come through with an adequate EPC contract.
Commissioner Conte, seconded by Commissioner Bishop, moved to accept staff's recommendation not to proceed with this project. The motion passed unanimously.
Mr. Spettel said he would draft a thank-you letter to the districts involved.
Commissioner Farmer left the meeting.
STANDARD MARKET DESIGN
Mr. Spettel referred to an overhead report entitled "Specific Areas of Potential Impact to EWEB." He reviewed points A-F of the report. Mr. Spettel asked the Board to inform staff where the Board's concerns lay and where the Board would like staff to focus efforts regarding this issue.
Vice President Lanning said FERC's Notice of Proposed Rulemaking (NOPR) on Standard Market Design (SMD) was an "unmitigated disaster," and that it was "one of the most important things EWEB's Board and staff should fight at each level they could".
Commissioner Lanning, seconded by Commissioner Bishop, moved that the EWEB Board of Commissioners oppose the implementation of FERC's SMD as set forth in the NOPR dated July 31, 2002, and further that EWEB staff are directed to take such actions as they deem effective to persuade FERC and/or Congress to not adopt the SMD.
Commissioner Bishop wanted the motion amended to state that EWEB contested FERC's jurisdiction in this matter.
Commissioner Bishop, seconded by Commissioner Conte, moved to table the motion as two members were absent. The motion passed unanimously.
The meeting adjourned at 9:00 p.m.
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Assistant Secretary President