Cordova Electric Cooperative

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Cordova Electric Cooperative

March 2017

CORDOVA ELECTRIC COOPERATIVE, INC.

REGULAR BOARD MEETING

March 22, 2017

The Regular Meeting of the Board of Directors of Cordova Electric Cooperative, Inc. was called to order at 6:04 p.m. by Chairman Pegau. Members present were Wooden, Zastrow, Faulkner, Blackadar and Cooper. Director Little was absent. Also present were CEO Koplin, Manager of Administration and Finance Merritt, Executive Assistant/HR Coordinator Bailer (Recorder), Manager of Generation and Distribution Newlun, and Project and Technology Coordinator Kuntz.

MEMBERSHIP PARTICIPATION

Nate Cain was present and had no comments.

APPROVAL OF AGENDA

It was moved by Faulkner and seconded by Wooden to approve the agenda as presented.

Voice vote: Unanimous. Motion carried.

AUDIT PRESENTATION with Julie DeSimone, Moss Adams – Julie DeSimone of Moss Adams participated via teleconference to present the 2016 audit results to the Board of Directors. She stated the audit went well this year and appreciates the cooperation of Cordova Electric Cooperative staff in getting the requested documentation to Moss Adams before the audit, and their help during the on-site portion of the audit. DeSimone said Moss Adams expressed an opinion that the financial statements present fairly, in all material respects, the financial position of the Cooperative as of December 31, 2016 and 2015 and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the U.S. DeSimone said there were no disagreements with management and nothing new in the financial statements. DeSimone said CEC had an unmodified audit, meaning CEC had a “clean” audit. DeSimone mentioned two Board Directors met with her during the audit.

CONSENT AGENDA

It was moved by Faulkner and seconded by Wooden to approve the consent agenda that includes the following:

a) Minutes of February 22, 2017 Board Meeting

Voice vote: Unanimous. Motion carried.

MANAGEMENT REPORTS

CEO’s Written Report

H&K, CTC, and CEC Lease Agreement: No Update, meeting pending with H&K.

Crater Lake Update: It has been a busy month identifying and promoting funding sources for Crater Lake and commencing contractual and permitting activities for a geotechnical assessment.

Arctic Energy Summit and Artic Encounter Symposium: I have attached information about these two events which I plan to attend. While travel is generally focused on training and scanning for external opportunities and challenges, the current focus is on visibility and partnering for funding around two primary opportunities; businesses or government offices siting in Cordova and/or contributing funding or equipment to capital projects to deliver better value to our members. Unexpected opportunities often surface at these events when participating as a speaker or moderator.

OPERATIONS REPORT

Power Production – Manager and Foreman attended North West Hydropower Association (NWHA) Annual meeting and FERC dam safety and compliance training (co-located in Portland, OR). They attended presentations on design, operation, regulatory, and safety aspects of the hydro industry and were able to meet many of the vendors who provided various components of CEC’s existing hydro plants or provided estimates or concepts for the Crater Lake project.

Orca Plant:

  • The Humpback Creek failed relay was replaced; failed unit being remand as a spare
  • Preventative maintenance performed on units 5, 6 caterpillar diesels
  • Diesel backup air compressor maintained
  • High School Student Tour
  • Lube oil transfer hose burst spilling oil, reported and closed out per SPCC plan
  • Switchgear work on unit 3 diesel progressing; and
  • Outage planned for this Sunday afternoon, customers notified and outage advertised
  • Coolant leak on unit 4 Fairbanks Morse diesel has been repaired, avoiding a liner replacement
  • Diesel Boilers have been repaired
  • Drawings have been developed for the switchgear upgrade
  • Power Production and Line Crew apprentice training is in progress

Power Creek Plant:

  • Snow safety training was completed
  • Production is low (300kW) but closed gate is helping considerably
  • Air blower (dam inflation) was repaired
  • All filters were changed and hydraulic components inspected/replaced
  • Troubleshot and repaired one nozzle that was not responding properly
  • Routine Maintenance

Humpback Creek Plant:

  • Very low production
  • Repaired air compressor for dam inflation
  • Inspected inside sluice gate and Rotork electric operator
  • Troubleshot battery system – ordered replacement part
  • Routine Maintenance

Fleet Vehicles:

  • Unit 42 lights serviced and recall work completed

Building Maintenance:

  • Bay doors have been serviced at Eyak DSC
  • Heating repairs at HQ building
  • Eyak DSC lights maintained and repaired
  • Housekeeping, repairs, and snow removal as needed
  • Oil separator building was cleaned up and maintenance performed

Eyak Distribution Service Center (DSC):

  • Trash pump, small generators and other small equipment maintained
  • Large portable (trailer) air compressor serviced
  • Assisted power production with switching order/preparations for Sunday outage
  • Fault at 5.8 miles has been located and repaired; temporary service retrieved
  • Junction Cabinet 235 replacement planned outage completed (Wells Fargo, Ace, etc.)
  • System labelling review/maintenance
  • Routine street light maintenance, meter reading, connects/disconnects

Electric Energy Storage (EES) Project Update:

Sandia Laboratories dynamic modelling work is expected to be completed by early next week.

Power Creek Instream Flow Report:

We are converging on a 1 cfs requirement and hope to have this in place by October 2017.

Net Metering Tariff:

Staff will begin drafting a net metering tariff for board review, probably mid-summer. At the NWPPA meeting last week, several utilities shared their net metering experiences and this will be a good pool to draw from as CEC considers a policy that works for our members.

CEO Travel Report:

I attended Northwest Public Power Association Board of Trustees meeting in Missoula MT last Thursday and Friday, and conducted the trustee roles of the organization including federal legislative update, training and course offerings, committee reports, financials, utility round table discussion and legislative resolutions. In addition to insights into net metering, a scholarship program outlined during the round table would, I think, work well for CEC and passed it on to the scholarship committee to consider for our annual meeting. While preparing for the NWPPA meeting last week, Senate Energy and Natural Resources Committee staff requested testimony before the committee Tuesday the 14th regarding energy infrastructure investments. I considered cancelling the NWPPA meeting but the NWPPA lobbyist was a legislative staffer and helped me draft testimony and prepare for the hearing before continuing on to DC. The hearing gave me the opportunity to promote Cordova projects in the written testimony, and emphasize the importance of Federal contributions to projects like our Crater Lake Water and Power project in the verbal testimony. I recommended a field hearing in Cordova and Senators Murkowski and Cantwell are organizing a field hearing for June 10th in conjunction with Copper River Nouveau. Senator Murkowski is also on the Senate Appropriations Committee. Several articles and quotes circulated and NRECA staff wrote an article covering my testimony. This will provide excellent visibility and opportunities for Cordova.

CEO Verbal Report

Koplin mentioned the scheduled outage that occurred last Sunday for maintenance at the Orca facility and reviewed the outage with the Board.

Koplin said he would be attending the Arctic Encounter Symposium in Seattle that Kallander and Associates is subsidizing and that visibility is important at these functions especially when looking for grant funding.

Koplin mentioned at the February Board meeting the Board asked him to research what the numbers would be on the Crater Lake project without the City’s financial involvement per the Feasibility Study. He referred to his handout titled “Crater Lake, CEC Full Cost Sensitivity, “Worst Case”” and reviewed it with the Board.

ADMINISTRATIVE REPORTS

Merritt reviewed the following reports:

  • Statement of Operations for January & February
  • Cash Flow Analysis for January (revised) & February
  • Revenue Report for February
  • Cash Disbursements for February
  • Bankcard Services Summary of Charge Statement for 2/17/17
  • Generation and Sales Statistics

NEW BUSINESS

Approve 2016 Audit as Presented – Faulkner moved and Wooden seconded to approve the 2016 Audit as presented. Discussion. Voice vote: Unanimous. Motion carried.

Kallander & Associates Contract – Faulkner moved and Wooden seconded to approve the Kallander and Associates Crater Lake Water and Power Project Consultant Agreement for a not to exceed amount of $10,000 plus incentives as outlined in Attachment B of Contract. Discussion.

Blackadar moved and Faulkner seconded to amend the motion to have Attachment B, Item 3, read “Consultant shall receive an incentive bonus of up to 1.00% of all Crater Lake Water and Power Project grant funding awarded by December 31, 2018, received as a result of a wholly independent effort by Consultant. The increase to 1.00% from 0.25% is solely at the discretion of the CEC Board after review of the grant process. Any such payment shall not be deducted from grant funds, and may only be paid from CEC’s operating funds.” Discussion.

Voice vote: 3-yea (Faulkner, Wooden, Blackadar), 3-nay (Cooper, Pegau, Zastrow). Motion failed.

Additional discussion.

Pegau moved and Blackadar seconded to strike Item 3 from Attachment B. Discussion. Pegau and Blackadar withdrew the motion.

Blackadar moved and Faulkner seconded to replace Item 3 of Attachment B to read “Consultant may receive a bonus of up to 1.00% on all Crater Lake Water and Power Project grants fully awarded by December 31, 2018 for grants awarded due to additional efforts by the contractor for Attachment A Items 1, 2, and 3 as determined by the CEO. Any such payment shall not be deducted from grant funds, and may only be paid from CEC’s operating funds.” Discussion. Voice vote: Unanimous. Motion carried.

Faulkner moved and Blackadar seconded to amend the motion to strike the wording “CEC or City of Cordova” in Attachment A, Item 2. Discussion. Voice vote: Unanimous. Motion carried.

Discussion on main motion and amendments.

Voice vote on the main motion as amended: Unanimous. Motion carried.

McMillen Jacobs & Associates Contract for Crater Lake Water & Power Project Geotechnical Assessment – Koplin explained the use of the Design-Build Institute of America (DBIA) Standard form of contract. Koplin said we procured the work for Crater Lake so we could proceed with the contractor to perform the geotechnical assessment and the contractor is willing to write a not-to-exceed contract.

Faulkner moved and Wooden seconded to approve use of the Design Build Institute of America (DBIA) Standard Forms of Contract for proceeding with Crater Lake Water and Power Project Geotechnical Assessment with McMillen-Jacobs.

Discussion regarding insurance and warranty on the project, and subcontractors. Pegau said he prefers to leave the subcontracting to the Contractor and Koplin agreed it’s the responsibility of the Contractor to work with any subcontractors. The Board and CEO agree the contractor should be responsible for subcontractors.

Voice vote: Unanimous. Motion carried.

OLD BUSINESS

Set Board Self Evaluation & Goals – 2017 Performance Elements – Pegau moved to postpone setting the Board Self Evaluation & Goals – 2017 Performance Elements to the April meeting, seconded by Cooper. Voice vote: Unanimous.

INFORMATION ITEMS

CEO Travel – Noted

OTHER ITEMS

Policy Review

  • Policy #44C – New Exempt Employee Moving Expenses
  • Policy #45B – Smoking Policy

EXECUTIVE SESSION

CEO Evaluation – Faulkner moved and Wooden seconded to go into executive session at 8:20 p.m. to discuss subjects that tend to prejudice the reputation and character of a person; however, the person may request a public discussion. Voice vote: Unanimous. Motion carried. Staff was excused.

Board and CEO came out of executive session at 8:52 p.m. The item discussed was the CEO evaluation. No action was taken.

PENDING AGENDA

  • Board Site Visits and Infrastructure Assessment
  • CEC Annual Meeting, Monday, March 27 – Mt Eccles – Koplin reviewed the Order of Business for the Annual Meeting
  • Director Training in 2017 – Pegau mentioned Bailer emailed this information to the Board the day after the February meeting, however, he will ask her to email it to the Board again.
  • Discuss Capital Credits

BOARD PENDING EVENTS CALENDAR

Koplin and Pegau mentioned National Renewable Energy Laboratory (NREL) personnel will be in Cordova for meetings March 29-31, 2017 to discuss strategic resilient energy planning for Cordova. Meetings will be held at the Cordova Center.

SUMMARY OF BOARD DIRECTION TO CEO

  • Add Board Self Evaluation & Goals – 2017 Performance Elements to April Board agenda
  • Resend Board training information to Board
  • Bring special provisions to Crater Lake contract to Board
  • Website content – Kuntz to discuss at April meeting
  • Circulate agenda for NREL meetings to Board

BOARD COMMENTS

Cooper – Thank you for the good meeting and discussion. Thank you to Clay and Staff for all the work that goes into each meeting.

Blackadar – Asked Board to review Board Development vs. Board Evaluation, try to split them out, and think of items for Board Development and Board Evaluation

Zastrow said this is his last meeting and it has been an honor working with the Board. He said Clay and Staff are phenomenal and that he’s learned a lot. Zastrow said he has an amazing appreciation for the work this organization does and is happy he was able to spend the past few years with us.

Wooden said this was a good meeting and Zastrow will be missed. She said there was a lot of good information and she likes how everyone was engaged.

Faulkner said this was a very good meeting and spoke of everyone being engaged at the meetings. She thinks this Board has done an excellent job and thanked Zastrow for participating on the Board.

Pegau thanked everyone and echoed the comments that Blackadar said, asking the Board to take a look at what Blackadar provided regarding the Board Evaluation. He thanked Koplin for working on the evaluation process with the Board.

Faulkner moved and Wooden seconded to adjourn at 9:17 p.m.

____________________________________

Secretary

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