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

Others present: Randy Berggren, Dick Varner, Tom Buckhouse, Scott Spettel, Jim Origliosso, Jean Meyers, Jim Wiley, Jay Bozievich, Mark Oberle, Debra Smith, JoAnn Andersen, Roseanna McArthur, Dick Helgeson, Lance Roberts, Terry Bequette, Jennifer Joule, Marty Douglass, Ken Beeson, and Krista Hince of the EWEB staff, Ruth Atcherson, City of Eugene Minutes Recorder; Bob Jenks, Jeff Bissonette, Citizens' Utility Board, guests; and members of the public.

President Anderson called the Regular Board Meeting to order at 7:30 p.m.

Agenda Check

Commissioner Conte requested that the second item on the Consent Calendar, regarding the Retirement Benefits Project, be moved onto the regular agenda.

APPROVAL OF CONSENT CALENDAR

Minutes

• Re-submitted minutes of the August 6, 2002, Work Session and Regular Board Meeting, and the minutes of the September 25, 2002, Special Board Meeting, and the November 13, 2002, Board Planning Session

Employee Benefits Issue

2 Retirement Benefits Project - Human Resources - Corporate Services

Business Service Agreements

• BNY Western Trust - Trustee Fees for Bon Trust Accounts - Financial Services Division- $36,000
• Clark/Bardes Consulting (formerly Coates Kinney) - Actuarial Services - Financial Services Division - $30,000
• Brown and Caldwell - City View 1150' Reservoir - Water Division - $5,000
• Accent Business Services - BPA Slice Communications - Electric Division - Not to exceed $25,000
• Twenty-First Century - High Volume Call Taking Services - Electric Division - $36,000 per year, or $72,000 for two years

Bid Award

• CB & I Constructors - City View 1150' Reservoir - Water Division - $1,387,000

Vice President Lanning pulled the minutes from the Special Board Meeting held on September 25 and the Board Planning Session held on November 13.

Commissioner Bishop noted that the minutes from the Regular Board Meeting held on August 6, 2002, incorrectly listed the time that the meeting was to convene as 5:30 p.m., when it should have read 7:30 p.m.

Commissioner Conte pulled the second item (Retirement Benefits Project) for discussion.

Commissioner Conte, with a second from Vice President Lanning, moved to approve the Consent Calendar as amended. The motion passed unanimously.

ITEMS FROM BOARD MEMBERS

Commissioner Conte noted that this was his last meeting as a temporary Board replacement. He said that serving on the Board of Commissioners had been a positive experience.

Vice President Lanning thanked Commissioner Conte for his good work. He expressed the hope that Commissioner Conte would consider serving again in the future.

Commissioner Bishop noted that long-time Lane Electric Board of Commissioner Chris Atneave had died. She spoke glowingly of her work, stating that she had pushed the utility to be the "best we can be." President Anderson added that Ms. Atneave had worked in the energy field for a long time.

Vice President Lanning related that the Lane Council of Governments (LCOG) was looking for a site for their Board of Director's meeting in April. He wondered if the EWEB meeting space would be available for them. Krista Hince, Assistant Secretary, said she would set the meeting up in the Board Room for April.

CORRESPONDENCE

General Manager Randy Berggren highlighted the following items:

• The joint government legislative breakfast on PERS was rescheduled for January 4.
• A response had been sent in regard to the alleged PUC violation report and EWEB had signed a memorandum of understanding that the problems would be fixed.
• A memorandum regarding the settlement with the Williams Company in connection with its role in the Western Energy Crisis was included in Board packets so that Commissioners would have an opportunity to weigh in with Treasurer Jim Origliosso on this.
• A memorandum regarding the funding in the amount of $12,500 as the utility's portion of the expense of the Region 2050 project had been sent to Board members.
• A memorandum was included in the Commissioners' packets regarding the amount of the budgetary resources that are channeled into the attainment of the utility's goals.
• Meetings on January 7, 2003, include an Executive Session on PERS litigation at 5:30 p.m., a Work Session at 6:30 p.m. to discuss approaches to capital funding, and a Regular Board Meeting at 7:30, the agenda of which will include the process for filling the Board vacancy, the oath of office for Commissioners Farmer and Bishop, election of Board officers, and the ratification of Board consultants, among others.

PUBLIC INPUT

There were no members of the public wishing to speak at this time.

CITIZENS' UTILITY BOARD REQUEST FOR BILL STUFFER

Marty Douglass, Public Affairs Manager, explained that the Citizens' Utility Board (CUB) wished to include a bill stuffer in the EWEB utility bill for the purpose of membership recruitment. He related that staff had recommended a one-time approval for the request and that staff be authorized to craft some policy language regarding this. He noted that EWEB had only included a bill stuffer from another agency other than EWEB or the City of Eugene one other time. He said that the Emerald Public Utility District (EPUD) and the Springfield Utility Board (SUB) have policies regarding the enclosure of bill stuffers in their bills. Legal counsel had reviewed the current proposal, that of running the bill stuffer and measuring public response to it, and had recommended criteria to base whether to accept a bill stuffer from a public entity.

Bob Jenks, Executive Director of CUB, expressed appreciation for the work of the staff of EWEB, noting that CUB had worked with EWEB on state energy policy and state communication policy. He noted that Libby Henry (EWEB's Legislative Representative) had been particularly invaluable to the work and that Charles Dalton (EWEB's Customer Relations Manager) was "the leading person in the state of Oregon on low-income energy issues."

Continuing, Mr. Jenks explained that CUB was an independent non-profit set up by volunteers to represent utility customers. As such, he felt that utility bill inserts were a way to disseminate information to all utility customers and to give them an opportunity to join CUB and be represented by CUB in rate cases and Public Utility Commission issues related to the private utilities.

President Anderson stated that the two key elements that CUB should have to be granted the opportunity to use EWEB bills as a medium for membership recruitment was to be recognized in the statutes and to have goals that were consistent with the mission of EWEB. She felt that CUB met this criteria.

Commissioner Conte asked where, in the charter and mission of EWEB, was there a provision to do this sort of good work. He noted that EWEB could be promoting the Humane Society or another non-profit entity. Mr. Jenks responded that customers cared about more than just rates. They also cared about environmental quality and equity. He felt that EWEB and CUB both had energy policies that were to the benefit of customer. He reiterated that CUB was not requesting money.

Commissioner Bishop moved, with a second from President Anderson, to approve the request by the Citizens' Utility Board to include a one-time bill stuffer in the EWEB bill. She stressed that this approval was a one-time approval and that any policy changes were to be determined at a later date, pending customer response.

Vice President Lanning supported the motion, but felt that it should include language that gives the Board final approval of the copy in the bill stuffer. He added that he would like to see the recycling symbol printed on the flier. Mr. Jenks responded that CUB does use recycled paper.

Commissioner Conte moved to amend the motion to include the following:

• That the full direct and indirect costs be paid for by CUB.
• That the final copy be approved by staff.
• That the final copy include an explicit statement stating that the insert did not represent an endorsement by EWEB.

Vice President Lanning provided the second.

Commissioner Conte expressed support for the work done by the CUB.

Commissioner Bishop took issue with the language that stated that the insert did not represent an endorsement by EWEB. She said that EWEB strongly supports the work of the CUB. She felt that noting that EWEB was not paying for the insert would better represent the relationship that EWEB has with the CUB.

Commissioner Conte said that he would be amenable to changing the language of the amendment and stressed that the important part of the amendment was that EWEB would not pay for it and that the staff would review the final text.

Vice President Lanning called for the question. The amendment to the motion, with the last portion amended to state that EWEB was not paying for the insert, passed unanimously.

President Anderson called for the vote on the main motion. The motion passed unanimously.

WANAPA DEVELOPMENT

Ken Beeson, Energy Resource Project Manager, provided an update on the Wanapa Project, as outlined in the back grounder memorandum entitled Wanapa Energy Center Project. He related that the current primary focus of the project was the subscription of the power and the transmission access issues.

Scott Spettel, Power Management and Planning Manager, emphasized that the involvement in this project stemmed from the central generation strategy of EWEB's integrated energy resource plan. He explained that EWEB had been looking to diversify its portfolio away from hydroelectric domination and the Bonneville Power Administration (BPA) risk. He related that the major change in the project was from the merchant model to a subscription model. He noted that when EWEB subscribed it would be taking some financial risk. He said that the decision that may be brought before the board in February or March would be whether the EWEB Board of Commissioners would be willing to sign a letter of intent, given what was now known about the project, for some increment of project output. He saw two different products that could be of interest to EWEB, the base-load energy and the option on some firming capability, in that there would be some secondary hydroelectric that was there.

President Anderson asked if EWEB would be running much of the project. Mr. Spettel responded that EWEB would be making many of the decisions, but that EWEB would not be the lead gas procurement entity. He said that, should EWEB reach the point in 2006 at which the project was completed, it would likely warrant a two FTE increase in personnel. He stressed that EWEB needed to make sure that the Wanapa project was the best resource acquisition of this type that the utility could make.

Jim Origliosso, Treasurer, discussed the issue of transmission access. He related that the BPA had done some scoping work on the seven mile section of line in question and had proposed that there be an open bidding period for private entities or third party financers to provide financing for the line. He noted that it would cost approximately $125 million for the 2200 MW capacity. He reported that the BPA had decided that it will pay the Federal Treasury rate plus two percentage points to the financing entity. Diamond Generating Company was considering submitting a proposal.

In response to a question from President Anderson, Mr. Origliosso explained that projects that are in the BPA queue have a say on whether or not a project that was behind them could move ahead. Commissioner Bishop noted that Wanapa had been the 29^th project in the queue and had now moved up to be the 5^th project.

In response to a question from Mr. Berggren, Mr. Spettel stated that the Diamond Generating Company would like to see a commitment to 500 MW from the interested parties. He felt that the outcomes would take longer than March, 2003.

Vice President Lanning asked if other public utilities were providing this type of service. Mr. Spettel cited the Power Resource Management as an example of one that was.

In response to a question from Commissioner Bishop, Mr. Beeson stated that the tribes would own the land that the plant would be built on and would lease it to whatever entity ended up building on it. He said that he did not believe that the tribes could be officially part of a "190" but would likely be a part of the project through an Inter-Governmental Agreement (IGA).

Mr. Spettel related that the Diamond Generating Company was interested in marketing "slices" of the Wanapa project, so that subscribers would be co-owners.

Continuing, Mr. Beeson said that the environmental mitigation proposal still stands in its entirety and a certain amount of the proceeds would be used to fund environmental projects.

In response to a question from Vice President Lanning, Mr. Beeson stated that there was still tribal support for the project.

Mr. Beeson affirmed, in response to another question from Vice President Lanning, that the budget for 2003 was slated to be $200,000.

ELECTRONIC MEDIA POLICY

Debra Smith, Telecommunications Project Manager, explained that this was a follow up on the discussion had occurred in a meeting in October, 2002. She noted that Ed Case and Eric DeFreest were present to provide legal counsel, should legal input be needed.

Commissioner Conte felt that the retention of e-mails seemed like a "mechanical thing." He preferred the discussion focus on issues having to do with the use of electronic communication. Commissioner Bishop suggested that the policy on retention be addressed in January.

Commissioner Conte moved to direct staff to develop alternatives that enable Commissioners to exchange messages electronically in one or more ways, that comply with applicable laws, that give the public appropriate access to read the Board's messages other than those exempted by applicable law, that maximize the flexibility for sending and reading messages with respect to time of day and range of topics. Staff is also directed to draft a report on the proposed alternatives by March 1, 2003, and the report should identify those technologies such as e-mail servers, web-based forms, news groups, and procedures that are suitable for this purpose, and should identify associated costs, functionality provided, potential legal issues, and any other significant factors to assist the Board in evaluating alternatives and should also include recommended policies to be adopted in conjunction with any or all of the proposed solutions.

President Anderson expressed opposition to convening the Board over the Internet in order to allow the public to interface with Commissioners. She stressed that all people do not live with computers.

Commissioner Bishop felt that having an electronic repository to hold information in an electronic public forum might save time.

President Anderson suggested that the issue be brought back when Commissioner Farmer was present. She felt that how much Board members communicate via e-mail should be further addressed, but it was not advisable to provide staff direction regarding this without the input of all of the Board.

Commissioner Conte recommended that e-mails between Board members be made available to the public. Ms. Smith responded that she did not necessarily disagree with Commissioner Conte. She stressed that there were a certain amount of e-mails that were exchanged between Board members and staff members and, should all communications be subject to the public record, there would be a subtle shift in how things were communicated.

Commissioner Bishop commented that her perception was that staff had already done much of the work that was delineated in the motion that Commissioner Conte had set forth. Terry Bequette, Information Services Manager, responded that there would be "quite a bit more work" but that it would be in the details.

Mr. Berggren stated that the utility would have to be very careful not to let billing information or customer complaints find its way onto the Internet.

President Anderson suggested that further discussion be postponed. She reiterated that the best possible public forum was a public meeting where all could come and give voice should they choose.

Commissioner Bishop reiterated that the reason the issue had been brought up was the legal liability issue. She said that she had been uncomfortable with the use of e-mails because they were not being retained. Ms. Smith agreed that there was a need for an email policy.

Commissioner Bishop provided a second for the motion.

Commissioner Bishop recommended that the motion be tabled until the first quarter of the year. She felt that it could be a legal liability. She also recommended that EWEB contact a general counsel instead of the in-house counsel.

Vice President Lanning asserted that the discussion should take place in a public session. President Anderson reiterated that it should be held in January and with the input of Commissioner Farmer.

Motion was tabled.

ITEMS REMOVED FROM THE CONSENT CALENDAR

Commissioner Bishop offered the following correction to the minutes from the Special Board Meeting held on September 25, 2002:

• Page 9, paragraph 2: "... She wanted to say something about reliability without encouraging the BPA to raise its rates..."

Vice President Lanning offered the following correction to the minutes from the same September meeting:

• Page 5, bottom of page: "Vice President Lanning left was excused from the meeting."

Commissioner Bishop offered the following correction to the minutes from the Board Planning Session held on November 13, 2002:

• Page 4, paragraph 6: "Commissioner Bishop called for a discussion on said she was not in favor of a low income rate structure..."

Vice President Lanning offered the following correction to the minutes of the same November planning session:

• Page 6, paragraph 5: "Vice President Lanning said he was not in favor or imposing a cap without further review."

Commissioner Conte moved to approve the minutes that had been pulled from the Consent Calendar as amended. Vice President Lanning provided the second. The motion carried unanimously.

Regarding the Benefits and Compensation Issues memorandum, Commissioner Conte felt that the issues required a board vote.

Commissioner Conte moved, with a second from Vice President Lanning, to approve the annotated motion be adopted from Issue #1 of the benefit and compensation issues memorandum. The motion carried unanimously.

Ms. Muggy explained regarding Issue #3, that staff had been communicating with employees that were currently affected by the 4 percent. She reported that 11 of those individuals had opposed having the cap rescinded.

Ms. Muggy confirmed, in response to Commissioner Conte, that the e-mail of explanation that had gone out to the affected employees had included that it would be discussed at the present meeting.

Commissioner Bishop requested that the Board review the policy on what the Consent Calendar was used for in January.

Commissioner Conte moved, with a second from Vice President Lanning, to rescind the 4 percent ceiling for gross salary towards dependents' premiums effective January 1, 2003. The motion carried unanimously.

The meeting adjourned at 10:13 p.m.

_____________ ______________________________________

Assistant Secretary President