Cordova Electric Cooperative

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Cordova Electric Cooperative

March 2018

CORDOVA ELECTRIC COOPERATIVE, INC.

REGULAR BOARD MEETING

The Regular Meeting of the Board of Directors of Cordova Electric Cooperative, Inc. was called to order at 6:00 p.m. by Director Faulkner. Members present were Little and Phillips. Director Pegau and Cook participated via teleconference. Directors Wooden and Cooper were absent. Also present were CEO Koplin, Manager of Generation & Distribution Newlun, Executive Assistant/HR Coordinator Bailer (Recorder), and Project & Technology Coordinator Kuntz.

MEMBERSHIP PARTICIPATION

Kara Johnson was present.

APPROVAL OF AGENDA

Little moved and Phillips seconded to approve the agenda as presented. Faulkner asked to amend the Agenda to move the Certification of Election Results to letter “b” of the Consent Agenda, and to add letter “g)” Stand for Alaska, HB199 under New Business.

Roll call vote on the Amendment – 5 yea – 0 nay. Motion carried.

Roll call vote on the main motion – 5 yea – 0 nay. Motion carried.

AUDIT PRESENTATION – Keith Simovic with Moss Adams LLP presented the audit. Simovic explained what an audit of the Cooperative entails, explained how the financial statements are a fair representation of transactions and ending balances for the year, talked about the procedures that were performed to identify fraud, and spoke of internal control recommendations. Simovic mentioned there was no non-compliance noted, no issues noted, and no audit adjustments made. Simovic mentioned all personnel across all departments were courteous, responsive and fulfilled all the auditors’ requests in a timely manner. Simovic answered questions from the Board and when done thanked them and staff.

CONSENT AGENDA

It was moved by Phillips and seconded by Little to approve the consent agenda that includes the following:

a) Minutes of February 28, 2018 Board Meeting

b) Certification of Election Results – Faulkner said the Director Candidate votes were tallied after the Annual Meeting on March 19, 2018 and the results were:

Kara Johnson 160 votes

Dede Srb 190 votes

Scott Pegau 212 votes

Phillips moved and Little seconded to certify the election results correct as stated.

Roll call vote: 5 yea – 0 nay. Motion carried.

Faulkner thanked Little for his time and commitment to the Board, welcomed Johnson to the Board, and welcomed Pegau back to the Board.

MANAGEMENT REPORTS

CEO REPORTS

CEO Written Report

I could repeat the opening to my February report verbatim; it has been an exceptionally busy month as dwindling staff work to execute an aggressive work plan. There has been significant progress in several areas, however, and the battery energy storage project in particular. I will present a brief power point at the meeting, primarily emphasizing the details of the battery energy storage.

Interest Rates: Short term interest rates have continued to rise with variable now at 3.60%. Long term rates, however, are stable at 4.89%, well below the long term average and rates at this time last year.

RADIANCE Project: We made significant progress on the RADIANCE project, but significant effort was required through last weekend to get the micro power monitoring units installed, and only 3 of 4 are working completely at this time. These projects are going to require significant human resources, and CEC has identified two interns for summer work at CEC to assist with projects. CEC will apply for financial assistance with NRECA who has committed to half-funding an intern, and ACEP who can assist as well.

EES Project CEC, ACEP, Sandia and Idaho National Labs staff have been intensively reviewing and following up with questions and concerns with the Battery Energy Storage Proposal, culminating in a discussion of best and final offers this morning with ABB and SAFT.

EPS Project Assistance: CEC projects will require significant technical and contracting assistance to implement RADIANCE, CEC work plan goal projects, and energy storage project. These costs are partially covered in the budget with the balance likely to be covered by CEC staff vacancies. I will keep the board updated as projects and the summer progress.

Monthly Financials: Emma is doing well in Anchorage, and working remotely to prepare partial financials, complete the audit, and keep up with the needs of CEC and her department.

Nissan Leaf Purchase: The Nissan has been performing well and we are working on a liability release form before lending it to members.

Other work in progress: CEC HQ building plan, tariff consolidation for net metering, and a few other internal projects once again took a back seat while working on RADIANCE, year-end closeout, project preparations for 2018, and personnel management activities.

Summer Intern(s): We identified an additional intern, freshman chemical engineer with a strong resume. While in DC, NRECA committed to half funding for this position which will help with our budget.

Bill Thomas and Kallander & Associates Contracts: Board meeting handout.

CEO Travel: I will summarize the NRECA Tech Advantage and Washington, D.C. trips in the regular meeting power point presentation.

Generation and Operations Reports: 

ORCA Power Plant

  • Working on a second cracked liner on Unit 4, FM diesel
  • Operators to receive CAT training
  • Our new DC battery bank has been installed and cut over at the ORCA plant
  • Fuel metering equipment is still arriving and moving forward.
  • We are setting up procurement for fuel additive test with ACEP who will pay for it.
  • Set up the Communications modem to automatically resent on communication failures.
  • Installed a PMU with Idaho National Lab personnel for data collection.
  • Scheduled an EPS tech to go through our CAT switchgear after the outage we experienced.
  • Working on the electric boiler project scope with EPS.

Power Creek Hydro Plant

  • Met with Alaska hydro group and FERC in Portland and have scheduled an inspection for Aug
  • Darron Wager of Gilkes: discussed turbine tuning and governing (RADIANCE) and maintenance
  • Bridgestone recommended that the Dam be repaired and replaced within the next two years.
  • Mark Rapf estimated a replacement bladder of approximately $250,000 and 5-8 Months lead
  • Installed a PMU with Idaho National Lab personnel for data collection.
  • John Magee and Scott Hibbs of Extreme Access brought onsite for penstock maintenance scope.
  • Also scheduled for a FERC penstock inspection by Scott Hibbs May 7th-11th.
  • Our replacement TIV valves have arrived
  • Ongoing snow removal.
  • Dam deflate valve has been replaced and a new spare is sourced.
  • New level sensors have arrived and will be installed when avalanche danger is lower.

Humpback Creek Hydro Plant

  • Met With FERC in Portland and have scheduled an inspection for Aug 1st and 2nd.
  • Installed a PMU with Idaho National Lab personnel for data collection.

CEC Fleet Vehicles

  • Unit 36 has had repairs completed.
  • Unit 39 has had repairs completed.

Buildings

  • Some broken door locks at Illanka have been temporarily repaired.

Distribution

  • Repair J-box at Sunny Side Drive that was hit by a vehicle.
  • Work at the alley has been ongoing.
  • New lights at the HS crossing are Installed and operating.
  • Have met with EPS to design our ESS and substation/communication integration.
  • Installed a PMU at Substation Main Town feeder with Idaho National Lab for data collection
  • Our lineman apprentice is in Anchorage attending his first round of AJEATT School.
  • Power Town has been presented to the 4th graders with Roy Serb and production operators.
  • We have received quite a few applications for the Staking position that we have advertised. Several service calls have been addressed.
  • A contract has been awarded for meter reading and they will be training this month.
  • Meters have been read by the line crew.

CEO Verbal Report

Koplin mentioned the summary of the work product Kallander & Associates has produced for CEC during the month of March report that follows his report in the Agenda.

Koplin presented a power point featuring a battery energy storage system (BESS) overview including how the battery energy storage contributes to CEC’s Strategic Vision; showed average daily kW loads with excess hydro, discussed renewable energy storage categories; renewable energy storage attributes; CEC battery energy storage system overview, and BESS evaluation matrix of proposals received. Koplin said he would like to issue a Notice of Intent to Award the BEES project to SAFT using ABB batteries and that the BEES would be an action item on the April Agenda. Koplin mentioned and explained the New Business items on the Agenda. Koplin showed slides of the Power Creek penstock and explained the maintenance that needs to conducted on it.

ADMINISTRATIVE REPORTS

Koplin reviewed the following reports:

  • 2018 Depreciation adjustment effective January 2018
  • Financial Statements for January and February
  • Revenue Report for February
  • Cash Flow Analysis for February
  • Cash Disbursements for February
  • Generation and Sales Statistics

NEW BUSINESS

Approve 2017 Audit as presented – Phillips moved and Pegau seconded to approve the 2017 Audit as presented. Roll call vote: 5 yea – 0 nay. Motion carried.

Purchase Order #2029 to Electric Power Systems for $30,000 – Phillips moved and Pegau seconded to approve Purchase Order #2029 to Electric Power Systems for $30,000. Discussion. Roll call vote: 5 yea – 0 nay. Motion carried.

Purchase Order #2030 to Extreme Access Inc. for $40,000 – Pegau moved and Phillips seconded to approve Purchase Order #2030 to Extreme Access Inc. for $40,000. Discussion. Roll call vote: 5 yea – 0 nay. Motion carried.

Purchase Order #2039 to Electric Power Systems for $12,000 – Phillips moved and Pegau seconded to approve Purchase Order #2039 to Electric Power Systems for $12,000. Discussion. Roll call vote: 5 yea – 0 nay. Motion carried.

Recordings of Board Meetings – Koplin said at the February Board meeting the Board asked to have this item on the March Agenda for discussion. Koplin said in the past the attorneys mentioned once the minutes are approved the meeting recordings do not need to be retained. Various Directors agreed as this was discussed during a Board training event last fall. Discussion. The Board directed staff to delete recordings of Board meetings once the minutes are approved.

Stand for Alaska – Cook explained House Bill #199 is a Bill to put more protections in place to protect the salmon and that Representative Stutes is rewriting it. Cook said the Alaska Power Association emailed a “Call to Action” and asked for replies by April 25, the date is past, and if it comes back CEC may want to participate.

Koplin mentioned he and Bailer will be conducting Board orientation with the new Directors, and any current Directors that would like to attend. Staff will notify the Board when this is scheduled.

UNFINISHED BUSINESS

None

INFORMATION ITEMS

CEO Travel – noted

Checklist: Getting Prepared for CEO Succession – noted

Thank you from Scholarship Winner – noted

OTHER ITEMS

Policy Review

  • Policy #2D – Delegations from the Board of Directors to the Chief Executive Officer
  • Policy #3C – Per Diem and Expenses for Board of Directors

EXECUTIVE SESSION

None

PENDING AGENDA

  • Nominating Committee Process for New Directors
  • Board training conducted by attorney in second quarter of every year. Schedule training. – Discussion. Board will contact Counsel for available dates and poll the Board.

BOARD PENDING EVENTS CALENDAR.

SUMMARY OF BOARD DIRECTION TO CEO

  • Destroy recordings of Board meetings once minutes are approved
  • Bill Thomas reports for Board
  • Summary of CEO travel/meetings for April agenda
  • Schedule and inform Board of New Director Orientation date/time
  • Check on dates for Board training with counsel

BOARD COMMENTS

Johnson – Glad to be here and am looking forward to learning more.

Phillips – Thanked staff for their work on the battery project – he is excited to see that going forward.

Cook – Thanked staff for the “Go-to-Meeting” platform for director participation in the Board meeting while traveling.

Pegau – Welcomed Kara. Said the “Go-to-Meeting” is working well and thanked staff.

Faulkner – Thanked everyone for allowing her to be the Chair for the meeting. She thanked staff for their hard work putting together the Annual Meeting saying it went very well.

Koplin – Mentioned he has had a lot of positive feedback regarding the Annual Meeting saying members like the length of the meeting and information provided. Koplin also thanked Merritt for the audit saying the auditors gave him a draft audit after 2 ½ days of being on site, which has never happened before, and is because the books were so clean.

Phillips moved to adjourn at 7:55 p.m.

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