EUGENE WATER & ELECTRIC BOARD
SPECIAL BOARD MEETING
EWEB BOARD ROOM
FEBRUARY 15, 2005
6:30 P.M.
Board Members Present: Ron Farmer, Sandra Bishop, Mel Menegat, and John Simpson. Commissioner Patrick Lanning was excused.
Others Present: Randy Berggren, Dick Varner, Roseanna McArthur, Jim Wiley, Marty Douglass, Terry Bequette, Tom Buckhouse, and Judy Chase of the EWEB staff; Ruth Atcherson, Minutes Recorder for the City of Eugene; and members of the public.
President Farmer convened the Special Board Meeting of the Eugene Water & Electric Board (EWEB) at 6:41 p.m.
AGENDA CHECK
There were no changes to the agenda.
PUBLIC INPUT
There were no members of the public who wished to speak.
APPROVAL OF CONSENT CALENDAR
MINUTES
Vice President Bishop pulled the minutes and, given that there were no other items on the Consent Calendar, there was no vote.
ITEMS FROM BOARD MEMBERS
There were no items from Board members.
CORRESPONDENCE
General Manager Randy Berggren reported the following:
BOARD AGENDAS
Mr. Berggren provided an overview of the Eugene Water & Electric Board: Board Agenda Report; February 15, 2005.
Vice President Bishop related that she had been asked by a local activist to take a look at the proposed power plant outside of Coburg. She said the activist felt the process for placement of the power plant had been circumvented and wanted EWEB to join in a request for a more thorough process that would require the State Department of Energy to undertake an ecological impact study (EIS) and would require the power provider to prove the need for the energy.
MAY 2005 ELECTRIC RATE PROPOSAL
Fiscal Services Supervisor Dick Varner provided an overview, with power points, of the Spring 2005 Electric Rates. He explained that the BPA had revised its Slice true-up forecast for FY 2005 by $10 million. He said how this was used was dependent on the actions of the Northwest Energy Board, but it was possible that this amount could be further lowered. He stated that, should the Board decide to pass this reduction through to the ratepayers, it would only reduce an average monthly power bill by approximately 75 cents to one dollar. He noted that the Board had voted to pass through a reduction in the spring of 2002, masked by a surcharge, and another one in the spring of 2004, which had been masked by a capital increase.
In response to a question from Commissioner Simpson, Mr. Varner stated that the 2002 rate action was not coupled with the institution of tiered rates.
In response to a question from President Farmer, Mr. Varner said the soonest a budget based action could be implemented would be in May. He said the utility would either not increase rates sooner or it would delay the decrease. He noted that at this point, staff had not placed a value on the public relations benefit of a rate decrease.
Vice President Bishop asked what the net increase was. Mr. Varner replied that the 2002 action netted a 2.5 percent increase in rates; in 2003 though a rate action was recommended, no action was taken; in 2004 there was a decrease masked by the capital increase, followed by an increase in water rates.
President Farmer remarked that all ratepayers saw was a bill that went up or down.
Mr. Varner commented that a larger transfer into the reserve fund might be needed, though the utility was still just about on budget for what it had planned for. He noted that the hydro projection had been accurate thus far. Further possible actions by the BPA would not be known until the mid to late summer.
In response to a question from President Farmer, Mr. Varner clarified that the utility had refinanced some of its debt by restructuring it and frontloading the savings and not just lowering the payments.
Commissioner Simpson noted that EWEB constituents compared EWEB with the Springfield Utility Board (SUB). He asked how the BPA actions would affect SUB. Mr. Varner responded that impacts to the Load-Based Cost Recovery Adjustment Clause (LB CRAC) impacted both SUB and EWEB, impacts to the Slice product impacted EWEB more than SUB, and Financial Based Cost Recovery Adjustment Clauses (FB CRAC) impacted SUB more than EWEB.
Mr. Varner stated that staff hoped to gain Board direction as to whether to pass the decrease in rates through to the ratepayers or to take no action at all. He commented that it was a small decrease.
Mr. Berggren said even a small decrease honored the utility’s commitment to customers to pass along rate actions, whether they were increases or decreases.
Commissioner Menegat was amenable to proceeding with a potential rate decrease. He advocated for careful tracking of BPA actions.
Vice President Bishop approved of keeping EWEB’s rates closely tied to the rates it was charged by the BPA. Commissioner Simpson said the utility needed to take every opportunity it had to lower rates as all customers seemed to ever see were rising prices. He definitely favored passing through the decrease.
President Farmer concurred. He believed there was value in passing the decrease along to the ratepayers.
Vice President Bishop remarked that the utility’s rates should be tied to the BPA’s rates. Mr. Varner responded that administratively it would be challenging to always pass it through.
FIRST PUBLIC HEARING ON MAY 2005 ELECTRIC RATE PROPOSAL
President Farmer opened the public hearing.
Seeing no one present who wished to speak, President Farmer closed the public hearing.
ITEMS REMOVED FROM THE CONSENT CALENDAR
Vice President Bishop asked that the last sentence of the third paragraph on page 5 be deleted. She also requested that the item she had reported on in the minutes be appropriately referenced.
Vice President Bishop, seconded by Commissioner Simpson, moved to approve the minutes from the Regular Meeting of the Eugene Water & Electric Board held on January 4, 2005, as amended. The motion passed unanimously, 4:0.
President Farmer adjourned the meeting at 7:15 p.m.
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Assistant Secretary President