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

Others present: Randy Berggren, Jim Maloney, Mat Northway, Gale Banry, Marc Anderson, Marty Douglass, Dick Varner, and Krista Hince of the EWEB staff; Gavin O'Neill, City of Eugene Minutes Recorder, and members of the public.

President Anderson called the Work Session to order at 5:38 p.m.

WINDPOWER MARKETING PROGRAM EVALUATION

Mr. Maloney, New Resource Projects Manager, referred the Board to a previously distributed report on the Windpower marketing program, a memorandum entitled "Windpower Marketing Program Evaluation, Introduction and Executive Summary," and a document that was a copy of his computer presentation called "EWEB's Windpower Marketing Program." He made the presentation and reviewed the documents in detail.

Commissioner Farmer referred to the section "Costs and Revenues" on page 6 of the presentation document. He said it appeared EWEB was losing money on the Windpower program. Mr. Maloney said the Board had voted to participate in the development of the Foote Creek Rim wind project and that all EWEB customers would have had to share the cost of the generated electricity. He said the Board made a later decision to start the Windpower marketing program, which allowed customers to pay higher rates for Windpower, thus absorbing some of the cost that would otherwise have been passed on to all customers.

Commissioner Farmer referred to page 5 of the Board's windpower report and asked why, for a certain tier group, Windpower was a cheaper alternative. Mr. Maloney said by the time a customer's consumption climbed to the third tier, standard electricity was more expensive than Windpower.

Commissioner Farmer said, according to the tier system, aggressive or excessive users of power could save money by using Windpower. Mr. Maloney said this was true. But, he noted that there was little indication that those customers had signed up.

Commissioner Farmer commented that this was another reason not to have tiers.

President Anderson asked if EWEB currently had to raise windpower rates. Mr. Maloney said he thought rates would have to risen last spring, but now he believed the rates would stay the same or drop slightly. He said an up to date analysis was pending after this Board review.

Vice President Lanning said that last year there were concerns from some members of the public that EWEB had misrepresented the project by leading people to believe electricity used in their homes was generated by windpower. He asked how this issue was addressed. Mr. Maloney said the marketing program attempted to honestly explain the system, but that customers who might not have seen the materials may be misinformed.

Mr. Maloney said one of the most effective communication tools for EWEB's Windpower customers was the Fresh-Air Journal.

Commissioner Farmer asked for a comment on the commercial acceptance of, or commercial appetite for Windpower. Mr. Maloney said there had not been an aggressive marketing plan to target the business population. Most of those customers that had signed up had contacted EWEB.

Commissioner Farmer said the key to moving forward with a program was being able to sell your product, and currently EWEB was only selling half of its windpower. He said EWEB's Windpower marketing program had to have commercial participation to approach a 100 percent sale ratio. He said the program only had three percent of the gross retail amount of windpower being utilized by the business sector. Mr. Maloney said there was a question as to whether the cost of more aggressive marketing program was worth the estimated return in revenue. He said he would like to investigate the possibilities.

Commissioner Farmer asked how long in the future EWEB had its contract to sell output to BPA. Mr. Maloney said it was a 25-year contract.

Commissioner Farmer asked what would have happened if EWEB had not entered into the Windpower marketing effort. Mr. Maloney said the 75 percent of EWEB's share of project output would have been allocated to the EWEB energy portfolio and spread among all ratepayers.

Mat Northway, Energy Management Services Manager, said most utilities never expect to go beyond five percent market penetration and that EWEB may have already reached the highest saturation point for this program with respect to the residential sector.

Commissioner Conte said he was supportive of Windpower and the Windpower marketing program. He said there were serious data gaps that affected the evaluation of the program's success, such as subscriber average income and measurement of marketing campaigns. He said there were opportunities for promotional campaigns. Mr. Maloney agreed that the lack of data on the program and its participants was detrimental to any efforts to improve the program.

President Anderson said she would like to see EWEB take a look at the block approach to windpower pricing.

Vice President Lanning asked what were the future plans for windpower promotion. Mr. Maloney said staff was waiting for confirmation to continue the program from the Board.

Mr. Maloney summarized the Board's direction as collect more customer information and marketing effectiveness data and market Windpower to achieve 100 percent sales.

Walterville/Leaburg Update

Gale Banry, Relicensing Project Manager, referred the Board to the copy of his computer presentation entitled "Update of Leaburg-Walterville." He presented and reviewed the document in detail.

Mr. Banry referred the Board to the section entitled "Public meeting to discuss," and introduced Marty Douglass, Public Affairs Manager, who reviewed the item.

Commissioner Farmer asked if the project had the potential to go over budget. Mr. Banry said he did not estimate any budget problems.

Vice President Lanning asked if the fish-screen cleaning would be automated. Mr. Banry said it would.

The meeting adjourned at 7:38 p.m.

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Assistant Secretary President