CORDOVA ELECTRIC COOPERATIVE, INC.
REGULAR BOARD MEETING
April 26, 2017
The Regular Meeting of the Board of Directors of Cordova Electric Cooperative, Inc. was called to order at 6:00 p.m. by Chairman Pegau. Members present were Wooden, Blackadar and Cook. Director Faulkner participated via teleconference. Directors Little and Cooper were absent. Also present were Manager of Administration and Finance Merritt, Executive Assistant/HR Coordinator Bailer (Recorder), and Manager of Generation and Distribution Newlun. CEO Koplin participated via teleconference.
APPROVAL OF AGENDA
It was moved by Wooden and seconded by Cook to approve the agenda as presented.
Voice vote: Unanimous. Motion carried.
It was moved by Faulkner and seconded by Wooden to approve the consent agenda that includes the following:
a) Minutes of March 22, 2017 Board Meeting
b) Minutes of Special Meeting of March 30, 2017
c) Approve New Members 1/20/17 – 3/31/17
d) Related Party Payment – Fireweed Graphics – $10.60 (2/17/17 Bankcard Statement)
e) Patronage Capital Estate Retirement
Voice vote: Unanimous. Motion carried.
CEO Written Report
H&K, CTC, and CEC Lease Agreement: We have arrived at a workable (verbal) agreement, and may revisit a more formal agreement later this year. H&K have been accommodating.
Website Updates: Significant work went into updating the CEC website, which will launch in the next few weeks. The new format is a content management system (word press) that can and will be updated as we add functions and information for our members. We will notify the board of the launch, and welcome feedback
Crater Lake Update: We met with the City Manager and presented to the City Council this week. City staff supports the project. City Council did not speak against the project, but are concerned with the price tag and where the money would come from with competing priorities. The primary reason for Washington, D.C. meetings and presentations from April 24 – May 4 are to identify and recruit partners for Crater Lake, Harbor Upgrades, and Battery Storage opportunities for Cordova.
Arctic Energy Summit and Arctic Encounter Symposium: I attended this conference in Seattle and was able to meet with both Congressman Young and Senator Murkowski briefly to set the stage for upcoming DC meetings. My presentation regarding technology development for storage dam construction was received with great interest. I contacted Dan Blanchard of UnCruise after attending his presentation on the smaller size passenger vessels. They are planning to start deploying their tropical Pacific cruise fleet to Alaskan destinations and Cordova is (now) firmly on their radar.
We have been very busy this period preparing for the power production season and starting some of our distribution upgrade projects. Our NECA Lineman’s last day is April 21st, and we thank Scott for his great service to CEC.
We have had a fairly active avalanche season that is winding down, thanks to Hoots, our training and equipment we had a safe season so far.
ORCA Power Plant (all diesel units)
- We completed the Current Transformer replacement on unit # 3. The process went fairly well the unit is back in the lineup and is operating as intended.
- Unit # 3 – repaired the vibration sensor on the cooling system.
- Unit # 3 had the one revolution inspection done and it is in good shape.
- Unit # 4 Fairbanks Morse Generator has developed a crack in one of the cylinder liners and needs to be repaired. We can run it in an emergency situation but it is out of the lineup for now.
- Unit # 5 is performing well; the only maintenance on it was to repair the crankcase vent.
- Unit # 6 has a fresh oil change and also had the crankcase vent repaired.
- Unit # 7 had to have a new power pack installed in cylinder #5 (cracked ring).
- Unit # 7 had a new head installed on another cylinder.
- Unit # 7 had the one revolution inspection completed and it is in good shape again.
- Started relocating Unit #7 Air Starter Exhaust to below the deck
- The boilers fuel systems were repaired.
- Sent oil samples for Units #4, 5, & 6.
- Finished putting up the safety rail on Tank #2 of the fuel farm.
Power Creek Hydro Plant
- Two of the breakers in the switchgear failed and one has been replaced with the spare; the other has been rebuilt and is in transit.
- Work continues on the remote control of the rotork controls for the new sluice gate.
- The VFD’s that control the dam inflation blowers are being configured to reset automatically with the SCADA system. Right now it takes a trip to the fore bay to manually reset them.
- Sent Oil Samples out for all of Power Creek plant Hydraulics and Oil Skids & Bearings
Humpback Creek Hydro Plant
- The four wheeler at the HBC location and will be replaced per budget.
- There is ongoing work to repair the Toshiba battery system at the fore bay.
CEC Fleet Vehicles
- Studded tires are being taken off and replaced with summer tires on Units #36, 42 & 43
- Unit #28 tires were changed
- Unit #28 Trouble shooting backup alarm, got it partially working
- Unit #28 Replaced relay that operates the horn & lights
- Replaced the battery in Unit #33
- Fixed the problem with Unit #32 (Battery going dead all the time)
- Ordered new seat cushion and cover for Unit #30
- Unit 40 needs warranty work on the power steering.
- Ordered a new belt for the Bucket Truck.
- Parking lot has been updated with new paint for handicap and standard slots.
- Several lights at Ilanka have been repaired.
- Door openers at ESC are in the process of being repaired.
- Replaced blown light bulbs and fixed the light fixture in Bay #6 at ESC.
- Ordered a new step down transformer for ESC Bay #2 Door.
- Installed a cover on a Cat 5 LAN Box at the Ilanka clinic
- Several requests for new service are starting to come in.
- The upgrade project for the alleyway between Council and Browning has started.
- We are evaluating the work that will need to be done at the Airport with their large project.
- Our linemen assisted in the Current Transformer change out for the ORCA Plant.
- Junction cabinet 235 has been replaced on Council Avenue (schedule outage).
- Continuing to identify and confirm labeling of system components.
- Performed street light maintenance, meter reading and connects/disconnects.
- Rebuilt the 2” Honda Trash Pump for the Line crew.
- Maintenance of the Airman Compressor (Fuel Pressure Issue)
- Repaired the 20 Ton Bottle Jack at ESC.
- Repaired the Hydraulic Press at ESC.
Electric Energy Storage (EES) Project Update:
Sandia Laboratories dynamic modelling work is expected to be completed by early May now. However, the Alaska Center for Energy and Power (ACEP) prepared and shared a preliminary report with CEC which we are evaluating for economic and operational fit.
Power Creek Instream Flow Report:
The final request has been submitted to the Federal Energy Regulatory Commission for consideration. Delays in filling the commission with a quorum and new priorities for the commission may result in delays, we are following up next week.
CEC Rate Review
The CEC rate analysis does not indicate an immediate need to increase rates. However, rising interest rates, a marginal processing year, and the “loose” budgeting process indicates that CEC may not meet financial targets for this year, particularly the $250,000 operating margin. At this time I do not recommend a rate increase, but do recommend closely monitoring our financial performance and outlook for the next few months, and reconsider rates in September for 2018. I performed a fairly detailed comparison of CEC’s rates to Sitka’s. In general, we are approximately 30% higher in all but processor rate class, but I then discovered that they have approved a new and fairly significant rate increase. There are lots of nuances with published rates depending upon how fuel costs, administrative costs, and other elements are recovered. We can conduct a rate comparison if the board would like, but we should identify which communities or utilities to compare with, and discuss the nuances. I also prepared a rate history for CEC and will circulate the raw excel spreadsheet by email, and include some print outs that show some base bill comparisons over time, and some base (first tier) rate changes through time. The rates were not increase for 20 years, and were then increased sharply in 2004 to catch up and add Power Creek costs to the rate base. In 2005 as grant funds came in, rates were reduced back. Growing sales and operating efficiencies have managed to keep rates at bay. More recently we have been having modest increases of approximately 2% every two or three years, some directed at the processor class, but the most recent was across the board in 2015.
CEO Verbal Report
Upon question Koplin said work is ongoing for updating the CEC website and when ready we can send the Board a link for review and suggestions.
Koplin, upon question, said he talked to Harvill regarding the H&K, CTC, and CEC Lease Agreement. Koplin said we have arrived at a workable (verbal) agreement, and we may revisit this for a more formal agreement later this year.
Koplin explained the issues with Unit 4, Fairbanks Morse generator, and repairs.
Koplin, who is in Washington DC for meetings, mentioned he attended many meetings today and has more scheduled for tomorrow.
Upon question about Crater Lake and the meeting with the Cordova City Manager and City Council, Koplin said the City of Cordova staff supports the project and the City Council has questions on funding. He mentioned CEC staff is not ready to move forward at this time without a financial commitment from the City of Cordova.
Merritt reviewed the following reports:
- Statement of Operations for March
- Cash Flow Analysis for March
- Revenue Report for March
- Cash Disbursements for March
- Bankcard Services Summary of Charge Statement for 2/17/17 & 3/17/17
- Generation and Sales Statistics
Election of Officers – Pegau opened nominations for Board Chair and said any member may nominate another Board member for office. Faulkner nominated Pegau, who said he is willing to serve as Chair. Pegau asked if there were additional nominations. There were none.
Faulkner nominated Cook for Vice Chair. Cook said he was willing to run for this position. There were no further nominations.
Faulkner nominated Wooden for Secretary/Treasurer. Wooden said she is willing to run. There were no further nominations.
Faulkner moved to close the nominations, seconded by Cook. Chairman Pegau declared that Pegau is Chair, Cook is Vice Chair and Wooden is Secretary/Treasurer by acclamation.
Pegau mentioned there would be modifications to Resolutions included in this Agenda due to the Officer change.
Appoint Bylaw Committee – Pegau appointed Little, Wooden and Blackadar to the Bylaw Committee
Appoint Board of Adjustments – Pegau appointed Cook, Faulkner and Cooper to the Board of Adjustments.
Resolution 17-01 – Resolution for a Checking Account at FNBA for Canadian Off Grid Utility Association (COGUA) Meeting in Cordova in 2017 – Faulkner moved and Cook seconded to approve Resolution 17-01 as written.
CORPORATE RESOLUTION AGREEMENT AND AUTHORITY TO ESTABLISH OR MAINTAIN A DEPOSIT ACCOUNT
I, Cully Wooden, certify that I am Secretary of Cordova Electric Cooperative, Inc. organized under the laws of Alaska, Federal Employer I.D. Number 92-0069167, engaged in business under the trade name of Cordova Electric Cooperative, Inc., and that the resolutions on this document are a correct copy of the resolutions adopted at a meeting of the Board of Directors of the Corporation duly and properly called and held on April 26, 2017.
Any Agent listed below, subject to any written limitations, is authorized to exercise the powers granted as indicated below:
A. Scott Pegau – Chairman
B. Joe Cook – Vice Chairman
C. Cully Wooden – Secretary/Treasurer
D. Clay Koplin – Chief Executive Officer
E. Emma Merritt – Manager of Administration and Finance
F. Barbara Bailer – Executive Assistant/HR Coordinator
FIRST: Resolved that THE FIRST NATIONAL BANK OF ANCHORAGE be and it hereby is selected as a depository for the funds of this Corporation and that a bank account or accounts, shall be opened and kept with the said bank in the name of this Corporation under the following designation or designations:
Cordova Electric Cooperative, Inc.
Canadian Off Grid Utility Association
and that endorsement for deposit may be made by the written or stamped endorsement of the Corporation without designation of the person making the endorsement.
SECOND: Be It Further Resolved that Scott Pegau, Chairman, Joe Cook, Vice Chairman and Cully Wooden, Secretary/Treasurer, Clay Koplin, Chief Executive Officer, Emma Merritt, Manager of Administration and Finance, and Barbara Bailer, Executive Assistant/HR Coordinator may endorse checks and orders for the payment of money or otherwise withdraw or transfer funds on deposit with this Financial Institution, and that two signatures are required to exercise the power.
THIRD: Be It Further Resolved that this resolution supersedes prior resolutions.
IN WITNESS WHEREOF, I have subscribed my name to this document and affixed the seal of the Corporation on April 26, 2017.
Discussion regarding the checking account. Pegau said this is a checking account for a single purpose, which is so CEC is able to receive monies and provide expenditures in support of this meeting. Pegau said there is a registration fee that has to be provided and a cost for meeting logistics and the reason it’s on CEC’s side is because working through the Canadian Banks versus doing it here is a lot more difficult so this is an easy way to offer support, with a short term bank account for this single purpose. Discussion. Koplin explained there is $60,000 in confirmed sponsorships for the meeting, which should cover the cost of the meeting, and COGUA (Canadian Off Grid Utility Association) has $9,000 in their meeting account. Discussion.
Roll call vote: Unanimous. Motion carried.
Resolution 17-02 – Resolution to Dave Zastrow for Board Service – Faulkner moved and Cook seconded to approve Resolution 17-02 as written.
A RESOLUTION EXPRESSING APPRECIATION TO DAVE ZASTROW FOR SERVICE
TO CORDOVA ELECTRIC COOPERATIVE, INC.
WHEREAS, Mr. Zastrow was elected to the Board of Directors in 2014, serving as Secretary/Treasurer from May 2014 – March 2015; and
WHEREAS, Mr. Zastrow was instrumental in the Strategic Planning of the Cooperative during his tenure on the Board; and
WHEREAS, Mr. Zastrow served on the New Director Training Committee to develop a clear training curriculum for new Directors; and
WHEREAS, Mr. Zastrow was Chair of the 2017 Bylaw Committee, reviewing and recommending changes to the CEC Bylaws for membership vote; and
WHEREAS, Mr. Zastrow is recognized as an outstanding person and Board member by his peers in the electric utility industry throughout Alaska; and
WHEREAS, Mr. Zastrow was dedicated to providing Cordova with affordable, adequate power; and
WHEREAS, Mr. Zastrow was easily accessible for members to discuss CEC business; and
WHEREAS, Mr. Zastrow will be missed by the Board and staff for his valuable input and dedication to the employees and members of the Cooperative;
NOW, THEREFORE, BE IT RESOLVED that the Board of Directors of Cordova Electric Cooperative Inc. extend their appreciation to Dave Zastrow for his service on the Board of Directors and to the members of the Cooperative during his tenure on the Board.
Roll call vote: Unanimous. Motion carried.
Purchase Order #1952 to Marine Systems Inc. for $10,871.00 – Faulkner moved and Wooden seconded to approve Purchase Order #1952 to Marine Systems Inc. for the amount of $10,871.00. Upon question Newlun explained what rev inspections are.
Voice vote: Cook abstained. 4-yea, 0-nay. Motion carried.
Fairfield Inn & Suites Rate and Crowne Plaza Agreements – Wooden moved and Faulkner seconded to approve the individual 2017 Local Volume Rate Agreements with the Fairfield Inn & Suites and Crowne Plaza as presented. Voice vote: Unanimous. Motion carried.
Policy 1G – Functions of the Board of Directors – First Reading – Pegau mentioned this is listed as a first reading but due to the Bylaw revision voted on at the Annual Meeting last March the Board can approve this Policy with one reading.
Faulkner moved and Wooden seconded to adopt the changes as presented. Discussion. Blackadar asked who came up with the changes and Pegau said staff did and this is the Board’s opportunity to edit or make suggestions. Discussion.
Voice vote: 4 yea – 1 nay (Blackadar). Motion carried.
Revenue Requirements Study – Merritt explained the Rate Analysis. Pegau mentioned this study is used to determine if CEC needs to increase rates. Discussion. Koplin reviewed the graphs in the Agenda and discussed the study with the Board. Upon question Koplin said the last rate increase was in 2015 and was a 2% increase across all rate classes. Discussion. It was the Board’s decision to leave rates as they are and have another Revenue Requirements Study in October with actual 2017 numbers.
Set Board Self Evaluation & Goals – 2017 Performance Elements – Pegau mentioned the Board is working to improve the evaluation process. Discussion. Pegau said the discussion is more about the evaluating process rather than the elements. Blackadar offered to work on the form and email it to the Board for review.
Blackadar moved and Wooden seconded to accept the Board Performance Elements for 2017 as presented with the understanding that the Board will continue to discuss the evaluation process. Voice vote: Unanimous. Motion carried.
Board Training – NRECA CCD – Pegau said the Board asked about Board training and the NRECA courses, with the possibility of having the training done in Cordova. Pegau asked if the Board prioritized the training they would like to have. Discussion. Board choose the Financial Decision-Making training, and Director Duties and Liabilities training to start with and directed staff to explore the cost and availability to conduct one or both of these training sessions in Cordova. Upon question Koplin said CEC could advertise this training with other utilities and try to get more participants.
Pegau mentioned CEC’s Counsel offers training, which is included in the packet, and a discussion ensued. Board directed staff to talk with Counsel to arrange training at the June Board meeting.
CEO Travel – Noted
- Policy #46B – Hearing Conservation Program
- Policy #47C – Compensatory Time
- Board Site Visits and Infrastructure Assessment – Koplin said starting in May there should be more site visit opportunities.
- Director Training in 2017 – previously discussed
- Discuss Capital Credits – add to May agenda
- CEC Webpage – add to May agenda
Cook asked to add CEC Scholarships to the pending agenda to discuss Scholarship requirements
BOARD PENDING EVENTS CALENDAR
SUMMARY OF BOARD DIRECTION TO CEO
- Koplin to email Board the ACEP (AK Center for Energy & Power) report
- Conduct a Revenue Requirement Study for October Agenda
- Staff to explore costs and availability to conduct NRECA training
- Schedule training with Counsel for June Board Meeting
- Add Capital Credits and Web Page to New Business on the May Agenda
Cook – I’m glad to be back and am ready to get involved.
Faulkner – Congratulations to the Officers. Thanks to staff for their hard work.
Wooden – Great meeting. Welcome back Joe.
Blackadar – Will try to work on the Board Evaluation Performance and get it to the Board.
Pegau – Appreciate Blackadar volunteering to work on the Board Evaluation process. Welcome back Joe. I appreciate getting your history and experience with the Board back, it will be very valuable for all of us.
Wooden moved and Cook seconded to adjourn at 7:40 p.m.