CORDOVA ELECTRIC COOPERATIVE, INC.
REGULAR BOARD MEETING
August 23, 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 Cook, Blackadar, and Cooper. Faulkner participated via teleconference. Directors Little and Wooden were absent. Also present were CEO Koplin, Manager of Administration and Finance Merritt, Manager of Generation and Distribution Newlun, Executive Assistant/HR Coordinator Bailer (Recorder), and Project and Technology Coordinator Kuntz.
APPROVAL OF AGENDA
It was moved by Cook and seconded by Cooper to approve the agenda as presented.
Voice vote on the main motion: Unanimous. Motion carried.
It was moved by Faulkner and seconded by Cooper to approve the consent agenda that includes the following:
- Minutes of July 26, 2017 Board Meeting
- Patronage Capital Estate Retirements
Voice vote: Unanimous. Motion carried.
CEO Written Report
Crater Lake Update: The draft geotechnical plan has been reviewed by agencies and comments have been received and incorporated into the plan. The Crater Lake stream gage was downloaded and stream flows measured. The next step is applying for Army Corp permits, and they have assigned a project lead for CEC and we plan to meet with them in the coming weeks.
Interest Rates: Interest rates have dropped since the fixes, and there is increasing Fed discussion around deferring the next rate hike as inflation lags below 1%, well off the 2% target the Fed has set for triggering rate increases.
Kallander Services Contract: Has been executed and just in time; the Whitehouse has been issuing press releases about starting work on an infrastructure package and hydroelectric has been included. This development is being closely monitored for an opportunity for Crater Lake funding.
K&H, LLC Lease Update: I believe we are ready to sign a final agreement and have scheduled a meeting with Mr. Harvill next week to finalize.
Power Creek Mitigation Funding: Craig Kuntz was able to navigate a multi-agency review group’s resistance to releasing mitigation funding held from the original construction of the Power Creek project to retrieve the $50,000 principal and over $20,000 of interest back to CEC. We received the check for over $70,000 and are excited at this unexpected success and support from the Alaska Department of Fish and Game with whom Craig worked.
CEC HQ Building: As we enter strategic planning review in October, we should determine a fix or sell option and proceed.
Snyder Falls Creek Stream Gages: Were removed this month.
Electric Energy Storage (EES) Project Update: There were two pieces of this project, a $110,000 study by the Alaska Center for Energy and Power (ACEP) to model energy storage and select the right battery size and control for CEC. Sandia National Labs received $50,000 to dynamically model the battery to see how it would respond to short circuits and generators tripping off line. The results of the study indicated that a 1.5MW, 1MWh battery is economically feasible for CEC, with most of the payback coming in “spinning reserve” which is the 500 kW worth of water we deflect at Power Creek when we are 100% hydro or the extra room we leave on a diesel generator (greatly reducing its efficiency) to pick up extra electrical loads when they occur. The Sandia study agreed that the best battery size is in that range and that the savings are viable. Their study determined that a battery of this size improves CEC’s system power quality and is not very sensitive to location. The rule of thumb for a new battery bank installation at this time is $1,000 per kW, or $1,500,000 for the bank recommended for Cordova. A battery storage system would complement the Crater Lake Project.
Grid Modernization Laboratory Consortium (GMLC): As our communications lines age and fail, and our sensors, electronics, and computers age and become obsolete, it has become apparent that large upgrades are necessary. New generations of equipment allow us to invest in equipment that positions us for smart grid capabilities, which will help us use more hydro when it is available, and less diesel when hydro is not available. An EES battery, described above, will reduce diesel fuel use, wear and tear on our diesel generators, and improve power quality. Further efficiencies and power quality improvements can be gained by installing fuel, water, and power quality meters in key locations. The GMLC, if accepted by the Department of Energy (DOE), will be a $7,810,000 investment in accomplishing all of these goals with $6,240,000 provided by DOE, and $1,570,000 provided by CEC over a three year span. The GMLC will count any CEC staff time, metering, automation, communications, and purchase of the battery as match. For the $1,500,000 battery outlined in the ESS above, CEC would purchase the batteries for approximately $750,000, and the remainder (inverter, controls, engineering, installation, integration to CEC system, and commissioning) cost of approximately $750,000 will be provided through the GMLC partnership. This is a case of all of our existing and future needs and strategic goals coming together in one opportunity. The smart grid that this project leaves behind will be very conducive to future industrial, academic, and government research projects.
Alaska Center for Energy and Power (ACEP) Battery RFP: As outlined above, ACEP performed the bulk of the battery energy storage evaluation for the CEC system, and have expertise in small utility systems in Alaska. With the loss of our engineer in March, we do not have the staff to prepare the technical and bid specifications to go out to bid for an EES system. ACEP has an engineer that worked on the Cordova EES system available for six weeks starting September and has offered him to CEC at their unloaded rate. If we enter the GMLC with a battery specification, we will be sure of getting the system that is best suited to CEC. If we are not awarded the GMLC, there is a strong likelihood that we can get the battery at a 50% match through the Dept. of Energy (DOE) Energy Storage program, which was the planned “phase 2” of the ACEP/Sandia EES study.
Electric Vehicle Charging Stations: After additional clarifications from vendors and a comparison of costs and features I recommend that CEC purchase two sets of two chargers. The recommended charger is a lower cost, highly weatherproof, simple non-pay option for the lower and upper lots of the Cordova Center. The alternatives are higher cost, moderately weatherproof, low complexity, and charge for fee options with weaker warranty packages. The four chargers on pedestals will cost $4,500 including shipping and the two services to the pedestals are estimated to cost $5,000 by CEC, for a total of $9,500 to be covered from the renewable energy fund which has a balance of over $25,000. The purpose of the stations is to encourage the adoption of electric vehicles in Cordova as one element of increasing electric energy sales in the community while providing cost-saving alternatives to our members.
Power Creek Road Washout: The Power Creek Road washed out this Sunday, resulting in transmission lines being exposed. I worked with the Cordova Times to publish an article on a short timeline to help bring encouragement to DOT to address the long term fix for this situation which could result in significant damage, cost, and inconvenience to CEC members and the community.
Communications: We continue to have frequent communications failures. Over the last two weeks we have located, excavated, and evaluated the communications and power vault systems in Power Creek Road. The good news is the power system is in excellent shape and can be expected to stay that way for another 35 years (if not washed out). The communications lines, however, were faulted at nearly every splice and CTC has been re-splicing them. The quality of signal has steadily improved, and communications failures seem to have decreased. Our new knowledge of this system and its condition will factor into our evaluation of repairing existing copper and installing new fiber and/or microwave for better bandwidth and redundancy. Microwave was also evaluated, and we are in discussions with CTC about costs for space on their tower to better estimate what a microwave installation and operating cost would look like.
- Set up auto flush program with EPS.
- Met with New Horizons and did field trips to investigate tower sites and equipment needed.
- Apprentice has successfully completed his probation period.
- Working on fuel metering
- Dealing with ADEC and disposal of contaminated soil.
Power Creek Plant:
- Work with Craig and Hydrologist to set up the 1cfm flow system for Power Creek.
- Cleared brush at Power Creek plant
- Regular replacement and repairs
- Regular fleet maintenance
- Plumbing repairs at HQ
- Made the second road crossing on the alleyway job
- Had a metering class with Anixter.
- Several new services.
- Working on Power Creek communications and power vault locations and condition.
- Routine call outs, repairs, locates, and meter reading.
- Cleared brush around transformers and switches
- Apprentice has successfully completed his probation period.
CEO Business Travel: The US State Department has sponsored my expenses to offer grant writing, tribal energy partnership, microgrid renewable energy, and arctic energy development presentations in Canada from September 4-9 with the University of Saskatchewan in Saskatoon, Yellowknife, and Calgary. The cost to CEC is my staff time for five days, though I generally spend 1-3 hours a day keeping up with CEC business while travelling for business or personal anyway. The end of the month I will be presenting at the Arctic Energy Summit in Helsinki, Finland, hosted by Alaska with heavy Alaska and U.S. Government attendance by some of our strongest partners and funding agencies. I will be continuing to Copenhagen at my own expense to meet with Nukissiorfiit engineers from Greenland to briefly tour energy installations and manufacturers for a day and the rest personal time. I do not anticipate any business related travel for the remainder of the year though I will take some personal time in Cordova as time allows and will be in Kodiak from October 26-November 8 to hunt the elk permits my wife and I drew this year.
CEO Verbal Report
Koplin said when something big happens regarding the CEC system he notifies the Board, however, he missed contacting Directors to inform them of the Power Creek road washout resulting in the communication cables being exposed, and apologized. A discussion regarding the road washout and cables ensued. Koplin said the conduit with the communication wires is not exposed at this time.
Upon question a discussion ensued on the communication failures for the Power Creek Hydroelectric site. Koplin explained the work being done locating and repairing the cable and how communication with the plant has improved.
Koplin showed a power point presentation and discussed the items, some of which relate to New Business items on the agenda. The presentation included information on hydrokinetic energy, including hydro, wave energy, and tidal energy; the importance of have energy storage at CEC, i.e. battery and the Crater Lake Hydroelectric Project; upcoming system upgrades to the CEC system; grid modernization lab consortium participation with the potential benefits and risks; and Alaska Center for Energy and Power battery specifications and request for proposal opportunity. Board discussion ensued during the presentation with Koplin explaining the projects.
Merritt reviewed the following reports:
- Financial Reports for July
- Cash Flow Analysis for July
- Revenue Report for July
- Cash Disbursements for July
- Bankcard Services Summary of Charge Statement for 7/17/17
- Generation and Sales Statistics
CEC General Account Banking Services – Cooper moved and Faulkner seconded to transfer general funds and payroll accounts to First National Bank of Alaska from Wells Fargo Bank. Discussion. Voice vote: Unanimous. Motion carried.
DOE Grant – Grid Modernization Lab Consortium Grant – Blackadar moved and Pegau seconded to approve participation in the Grid Modernization Laboratory Consortium which could obligate CEC to as much as $1,570,000 over the next three years. Discussion. Voice vote: Unanimous. Motion carried.
Alaska Center for Energy & Power Battery RFP – Cooper moved and Cook seconded to approve the ACEP Energy Storage and Demand Response Review, Specification, and Dispatch Definition agreement for a Not to Exceed amount of $27,000 plus transportation to and from the Cordova Airport and lodging in the CEC apartment. Discussion. Voice vote: 1-yea (Cook), 4-nay (Cooper, Faulkner, Blackadar and Pegau). Motion failed.
Electric Vehicle Charge Stations – Blackadar moved and Pegau seconded to approve purchase of four electric vehicle charging stations for a not to exceed amount of $5,000 from the CEC renewable energy account. Koplin said these would be placed at the Cordova Center. Discussion. Voice vote: Unanimous. Motion carried.
CEO Travel – Noted
Net Meter Reading Tariff Addition – Draft – Koplin said when he was researching the Tariff he noticed there is restructuring that needs to be done to update it. Koplin recommends looking at and revamping the Tariff as a whole. Pegau asked the Board to review the draft Net Metering section before the next meeting. A discussion ensued.
- Policy #54C – Counting of Mail-In and Annual Meeting Ballots
- Policy #55A – Functions of the Bylaw Committee – a discussion ensued and the Board suggested changes to be made for review at the September Board meeting.
- Board Site Visits and Infrastructure Assessment
- Revenue Requirements Study – October
- CEC Scholarships
- Set Board Performance Elements – evaluation process
- Capital Credits – September (Budget prep for 2018)
- Board Self-Evaluation & Development 2017 – Performance Elements
BOARD PENDING EVENTS CALENDAR
SUMMARY OF BOARD DIRECTION TO CEO
- Schedule a time with the Grid Modernization Laboratory Consortium group to conduct a presentation to the Board before the project starts.
- Revise Policy 55A – Functions of the Bylaw Committee for the September Agenda
- Add Patronage Capital Estate Retirements to the September Agenda and include related information
- Email Capital Credit presentation to the Board
Faulkner – Good information and conversation. There were good decisions made tonight.
Blackadar – Suggests developing a strategy to advertise the electric car charging stations.
Cook – Staff needs to notify the Board of things that happen to the Cooperative as soon as possible. Action items were substantial tonight. Cook said every effort should be made to make sure Board members are in town and have all the information the rest of the Board members have.
Cooper – Thanked everyone for the conversation at the meeting. There were big decisions to be made with just a few days’ notice, however she understands things happen quickly as well. Cooper thanked Koplin for the Power Creek site tour.
Pegau – The Grid Modernization has some very important elements and we have to make sure it meets our needs. Pegau said we have to keep the resources that we have, i.e. Power Creek Road damage and CEC communications. It’s important that we keep moving forward. He appreciates everyone’s thoughts on the items discussed during the meeting.
Cooper moved and Pegau seconded to adjourn at 8:25 p.m.