Board Members Present: Dorothy Anderson, Patrick Lanning, and Ron Farmer.
Staff Members Present: Randy Berggren, Steve Hill, Brian Hawley, Scott Spettel, Libby Henry, Marty Douglass, Jean Meyers, Cathy Bloom, Jim Origliosso, Mike Logan, Mat Northway, John Yanov, Debra Smith, Roseanna McArthur, Tom Buckhouse, Chuck Dalton, JoAnn Andersen, Libby Henry, Reed Hart, Brian Hawley, Scott Spettel, Dick Helgeson, Jennifer Joule, Dick Varner, Jim Wiley, and Krista Hince of the EWEB staff; Gavin O'Neill, City of Eugene Minutes Recorder; George Hecht, Charlie Brown, and various members of the public were in attendance.
Vice President Lanning called the Regular Board Meeting to order at 7:42 p.m.
AGENDA CHECK
There were no changes to the agenda.
APPROVAL OF CONSENT CALENDAR
Minutes
Business Service Agreements
Award of Bid
Commissioner Farmer requested that Agenda Item 6 be removed from the consent calendar.
President Anderson, seconded by Vice President Lanning, moved to accept the consent calendar with the exception of Agenda Item 6. The motion passed unanimously.
ITEMS FROM BOARD MEMBERS
There were no items from Board members.
CORRESPONDENCE
General Manager Randy Berggren referred the Board to a memorandum concerning a local government Lane County Delegation luncheon. He said the date for the luncheon had been set for December 5. He said a memorandum was distributed regarding the Public Utilities Commission (PUC) citation. He called the Board's attention to follow-up memorandums from Commissioners' questions regarding tree removal from the Leaburg and Walterville power canals, and concerns of junk in the Walterville power canal. He also called the Board's attention to the memorandum entitled "Third Quarter Financial Results and Impacts." Mr. Berggren informed the Board of upcoming meetings and a variety of future topics to be discussed.
PUBLIC INPUT
Steve Manela identified himself as a member of the Lane County Human Services Commission. He said he had concerns regarding proposed reductions in support of low-income programs for the next fiscal year. He said in the past year there has been a 30 percent increase in senior citizens requesting energy assistance through the low-income energy assistance program (LEAP). He said approximately 1,400 senior and disabled citizens were served through a pilot project program currently under consideration for elimination. He said a survey of the 1,400 program participants indicated that 60 percent of these people had gone without food or medication because they had to pay their EWEB bill. Mr. Manela said he was hoping his organization could work with EWEB to find a stop-gap solution to the problem.
Douglas Moser identified himself as an agriculturalist. He said he lived next to a power canal that would be worked on next near. He said he had been watching the work on the current power canal project, and has seen the impact on the surrounding farms. He said he anticipated an even greater impact on his own farm because he received all his water directly from the canal. He said he understood the expense of removing fish from the lower canal could mean some water would still flow through the upper canal. He said he was informed by a fish hatchery on the canal that EWEB planned on emptying the upper canal. He said he would like to see this happen soon so that farms around the canal will not be adversely effected. He said he was concerned about water for his 50 year old blueberry plants.
RETIREE HEALTH BENEFITS PROGRAM
Jean Meyers, Human Resource Manager, asked the Board if it was ready to take action on the presented motion at the Work Session, held earlier in the evening, and indicated the Board may be willing to do so.
Commissioner Farmer moved to amend the motion to include item 3B as opposed to 3A. There was no second. The motion failed.
President Anderson, seconded by Commissioner Farmer, moved to accept the motion as presented by staff.
Commissioner Farmer explained that he reluctantly seconded the motion in order to prevent the issue from being tabled until the next meeting.
President Anderson said this was the hardest vote she has had to make in her twelve years on the Board. She said the Board had to balance customer and employee needs. She said she reluctantly supported the motion.
Commissioner Farmer said he was opposed to item 3A of the motion because he saw it as discrimination. He said he reluctantly supported the motion.
Vice President Lanning said this was the most challenging issue he had faced as a Board member. He said the country faced a national health care problem. He said he reluctantly supported the motion.
The motion passed unanimously.
Ms. Meyers thanked the Board for its careful consideration.
UNIVERSITY OF OREGON SAVINGS ACTIVITIES
Steve Hill, EWEB Key Accounts Manager, said the University of Oregon has its own limited electrical generation capacity, and its own distribution system for the energy purchased from EWEB. He said representatives from the University were at the meeting to share the successes it had accomplished through its partnership with EWEB.
George Hecht, Director of Campus Operations, gave a computer presentation on the University of Oregon. He said the campus included 133 acres of building space, 265 acres of land, 21,000 students, 3,500 faculty and staff, and building ranging from 100 years old to some currently under construction. He said energy costs of the campus have increased to $15,000 per day. He said the mechanical improvements to the campus, resulting from the University's partnership with EWEB, had saved 5 million kilowatt hours per year.
Charlie Brown, Professor and head of the Architecture Department, and director of the Energy Studies in Buildings Laboratory at the University, said the halls and lobbies of the school use the most energy. He said in 2002, the University achieved a 14 percent decrease in all fuel use.
Brian Hawley, Staff Engineer, EWEB Energy Management Services, reviewed the history of his partnership with the University. He reviewed the percentages of University generated electricity compared to EWEB generated electricity. He said by the end of 2001, the University was saving 500,000 kilowatt hours per month, or 6 million per year, in reduced loads on campus. He said the University was EWEB's third largest customer with total energy use on campus reaching 57.6 million kilowatts per hour every year. He said this translated to 4,240 residential customers per year. He said the energy savings equaled 480 residential customers per year.
Commissioner Farmer asked what the correlation was between the cost of the energy the University produced compared to the energy purchased from EWEB. Mr. Hecht said at full power, the University produced 20-30 percent of its own electricity. At lower output, it produced 10-15 percent.
Mr. Hawley said the University averaged 10 percent self-generated electricity over the four year period 1997-2000, while in 2001, it generated 26 percent.
Commissioner Farmer asked how much money the University saved by co-generating electricity. Mr. Hecht said approximately $3-4,000 per month.
STANDARD MARKET DESIGN
Scott Spettel, Power Management and Planning Manager said he would review the Standard Market Design (SMD) discussion from the October 1, Board meeting, inform the Board of recent SMD developments, and revisit a tabled motion presented by Commissioner Conte. He said staff needed an idea of priority and resource commitment available for the issue. He referred the Board to an overhead presentation of highlights from the October 1, Board meeting, and to an overhead of the motion that was tabled on October 1.
This was the motion as stated in the minutes of October 1:
"Vice President 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 contest FERC's jurisdiction in this matter."
Mr. Spettel said the Federal Energy Regulatory Commission (FERC) had redefined the comment schedule, adjusting the deadline to January 10, 2003.
Mr. Spettel said the Bonneville Power Administration (BPA) had released comments regarding the implementation of SMD, and he summarized the comments as, "go slow, many reservations."
Mr. Spettel said there had been a meeting scheduled by FERC for November 4, in Portland to discuss issues pertaining to the effect of SMD on the western states, but that the meeting was postponed on short-notice by FERC. He said FERC made reference to a subcommittee of the Western Electric Coordinating Council committee on market interface called SSG-WI (Seams Steering Group-Western Interconnection), that was to provide comments and direction for the western market, and would have more flexibility in SMD implementation in the west.
Mr. Spettel said EWEB staff had created a group to coordinate responses to FERC's SMD plan. He said the group was focused in four major areas: market design issues, EWEB's transmission and technical issues, political issues, and community and public relations.
Libby Henry, EWEB's Legislative Representative, said there were energy bills in the Senate and House conference committee. She said it was unlikely anything would happen with the energy bill in total. She said there was no conference report, there was no design for the conferees to meet, nor would staff be meeting to discuss the bill. She said, according to her information, the chances of an energy bill passing was between 20 and 50 percent. She said Congressman DeFazio told her there would probably not be an electricity title this session of Congress.
Ms. Henry said a possible political strategy would be to put language into the Energy and Water Appropriations bill which governs the budget of FERC, stating that SMD would not be funded. She said that since there were 13 appropriation bills to consider, the bills might be joined together as an omnibus bill, making it difficult to amend any individual bill.
Ms. Henry said the western states, the southern states, and the Senate were opposed to SMD, while there was only moderate support in the northeastern states. She said FERC will probably still push ahead on the plan.
Marty Douglas, Public Affairs Manager, poised the question of whether EWEB wanted to take an active stance of opposition to FERC's SMD plan. He reminded the Board of Ms. Henry's idea for the Board to draft an op-ed piece for the newspaper, supporting Congressman DeFazio's and Senator Smith's opposition of SMD. He suggested the op-ed piece be written by Commissioner Conte, another Commissioner, and himself.
Commissioner Farmer asked who controlled FERC administration. Ms. Henry said the Secretary of Energy controlled FERC administration.
Commissioner Farmer asked if the decision to change FERC's plans had to come from the President. Ms. Henry said her understanding was that the current administration and the President's Office did support FERC's plan.
Commissioner Farmer asked if public pressure could influence the President's support on the issue. Ms. Henry said it could, and that opposition was currently mounting in such a way that this was very possible.
Commissioner Farmer asked what effect the small community of Eugene could have on this issue. Ms. Henry said she had asked Congressman DeFazio the same question, and that he said it was important to educate the public in Eugene, and support the efforts of Oregon's delegates.
Commissioner Farmer asked if there was any delegates in the northwest that supported FERC's SMD plan. Ms. Henry said there were not.
President Anderson asked if anyone was challenging FERC's jurisdiction in this matter. Mr. Spettel said this was the main issue of the states in opposition to the plan.
Vice President Lanning said he was in support of EWEB staff efforts on the issue. He suggested President Anderson be a partner in drafting the op-ed piece. He asked where EWEB should focus its energy and money in the opposition plan. Mr. Spettel estimated the financial cost of opposing the plan at $20-30,000 for consulting expenses.
President Anderson moved that the EWEB Board of Commissioners oppose the implementation of FERC's SMD as set forth in the NOPR dated July 31, 2002, that EWEB staff are directed to take such actions as they deem effective to persuade FERC and/or Congress to not adopt the SMD, and further that EWEB contest FERC's jurisdiction in this matter.
Commissioner Farmer said he was unclear regarding the meaning of the words oppose and actions in the motion. He asked for clarification regarding what staff action the motion was promoting. Mr. Spettel said he believed the motion defined the Board's position on the issue.
Commissioner Farmer explained that with the Oregon delegates and the northwestern states aligned in opposition to the issue, he did not understand what greater effect EWEB's resources could have at the present time. Mr. Spettel said EWEB could educate its staff on the issue, and make direct comments of opposition to FERC.
Commissioner Farmer seconded the motion. The motion passed unanimously.
FOLLOW UP FROM BOARD RETREAT ON OCTOBER 22 FOR BUDGET
The board decided to reschedule this item, due to the lateness of the hour.
ITEMS REMOVED FROM CONSENT CALENDAR
Commissioner Farmer asked for clarification on Agenda Item 6, "Montgomery Watson Harza (MWH) - Leaburg-Walterville Relicensing/Outage - Electric Division", from the consent calendar. Commissioner Farmer referred Jim Wiley, Electric Division Director, to page 2, paragraph 2 of the memorandum entitled "Amendment #6 for the Montgomery Watson Harza (MWH) Contract."
Commissioner Farmer asked if the total amount of the contract was $4.4 million, was the contract $3.2 million before the addition. Mr. Wiley said it was.
Commissioner Farmer asked if there was a 25 percent overrun on the contract. Mr. Wiley said it was not.
Commissioner Farmer asked where the extra $800,000 came from. Mr. Wiley said the money was in the budget. Mr. Berggren said the money was from contingency funds.
Commissioner Farmer asked how much was the contingency on a percentage basis. Mr. Wiley said 10 percent.
Commissioner Farmer referred to page 2, paragraph 3 which mentioned another 5.76 percent. He asked if this was in addition to the $800,000. Mr. Wiley said it was not. Mr. Wiley said the 5.76 percent was included in the budget and he estimated the project finishing $2 million under budget.
Commissioner Farmer, seconded by Vice President Lanning, moved to approve Agenda Item 6 from the consent calendar. The motion passed unanimously.
The meeting adjourned at 9:33 p.m.
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Assistant Secretary President