CORDOVA ELECTRIC COOPERATIVE, INC. REGULAR BOARD MEETING
October 26, 2016
The Regular Meeting of the Board of Directors of Cordova Electric Cooperative, Inc. was called to order at 6:04 pm by Chairman Pegau. Members present were Blackadar, Faulkner, Little, and Wooden. Zastrow and Cooper were absent. Also present were CEO Koplin, Managers of Administration and Finance Covel and Merritt, Project and Technology Coordinator Kuntz.
APPROVAL OF AGENDA
It was moved by Faulkner, seconded by Little to approve the agenda as presented. Voice Vote: Unanimous. Motion carried.
It was moved by Faulkner, seconded by Wooden to approve the consent agenda that includes the following:
- Minutes of September 28, 2016 Board Meeting
- New Members from July 1, 2016 through September 30, 2016 Voice Vote: Motion carried.
Budget: Low kWh sales in July and August have rebounding for a stronger September than last year. Cash flow was positive again during September and the year may end with net positive cash flow due primarily to lower than budgeted long-term interest rates, vacant positions, and the rate-based portion of fuel costs from better than expected hydro generation. Budget is also intact for these same reasons, but it is important to remember that these forces will likely not be at work next year, and a rate discussion will be an important consideration for 2017. I will include a general overview of budget expectations for 2017 in my verbal report.
Emma Merritt will attend the October board meeting for introduction to the board and board meetings. Scott Newlun, the new Manager of Generation and Distribution, may be able to attend as well. He starts work on October 31, 2016, and is in the process of moving from Yakutat.
Apprentice Power Production employee applications are under review, and apprentice lineman applications will also come under review in the ensuing weeks.
Crater Lake & Alternatives Update: Verbal / PowerPoint Update
CEC Headquarters Building
An engineering assessment is being performed on the CEC headquarters building by tenants to determine the current condition of the building in more detail. A recent failure of the elevator shaft support structure and equipment and roof leaks and rots have raised addition concerns.
CEC Power Outages Discussion: We have been experiencing a significant increase in power outages in 2016 over 2015. The outages have been due to a variety of causes. I will provide a more detailed Verbal / PowerPoint report and outline work in progress to mitigate outages.
- An outage occurred on Monday, October 3, 2016 at 12:35 AM. The cause was faulted primary cable on the 13 mi. feeder. The initial fault event led to the loss of generation resulting in frequency decay and the initiation of the under frequency load shed scheme. This led to the loss of all four main feeders. Power Production and Operation personnel responded restoring generation and the three non-faulted feeders at approximately 1:15 AM. The fault on the 13 mi. feeder was then located by the line crew and was found on one phase of the old primary cable crossing of the Eyak weir. The appropriate switching was done to de-energize the old cable and carry everything on the newer cable that crosses the weir. A study is being done to understand and remedy the cause of the loss of generation due to ground faults on the 13 mi. feeder. The old faulted cable has been abandoned and all load is now on the cable installed in 2013 to current CEC design
- Service upgrades are complete for residences at 900, 902 Cliff Trail, and 814 Lake
- New services were constructed at 100 Gandil Drive, Harborside Pizza (Storage Conex), Alpine Properties Lot 9, and a CTC fiber node at 3.2 mi. Copper River Highway (CRH). As part of the new fiber node construction an existing deferred conduit was extended to XF 623. This prevents the need for future asphalt cuts of the CRH to refeed XF
- The line crew has been at work straightening streetlight poles and addressing burnt out and “day-burner”
- Work continued on the Cordova Electric Energy Storage project. Tentatively, ideal output for a (battery energy) storage system would have storage capacity of 1.5 – 2.5 MWh and a power output of 1.5 – 2.5 MW. Numbers need to be refined, but an Electrical Energy Storage (EES) System of this size is estimated to save roughly 2,000 hours of diesel generation a
- The 2016 Spill Prevention, Control, and Countermeasure (SPCC) plan update has completed and the final draft has been approved by CEC management and is currently in the Professional Engineer (PE) review stage by Clay Koplin (P.E.). CEC is within compliance and once reviewed and stamped the plan will be completed for the 2016 update
- Preliminary design work has begun on capital projects for 2017 including the replacement of CEC facilities in the alleyway between 1st and 2nd street from Browning to
- New services were estimated and staked for 100 Gandil Drive, Harborside Pizza (Storage Conex), Alpine Properties Lot 9, and a CTC fiber node at 3.2 mi.
POWER PRODUCTION REPORT
Orca Power Plant
- Main fuel filters replaced
- Floor painting was completed
- New coolant refill station was installed to minimize time involved in filling cat radiators
- Replaced Cat Van light bulbs with LED bulbs
- Fixed roof leak by pulling back pavers and re-sealing watertight membrane
- Cleared roof drains of debris
- Removed brush from roof (looked like a jungle)
- Oil change on unit 5 diesel
- Filter change on unit 5 diesel
- Windows 10 installed on all computers
- Received Cat oil and refilled oil tote
- Took oil samples on the cats
Power Creek Hydro Plant
- Hydraulic pump at forebay failed and was replaced
- The hydraulic system at forebay was gone through and simplified by removing unnecessary components and hoses and as a result the hydraulic unit functions better
- The VFD motor that controls the hydraulic unit at the FB faulted due to overvoltage
- Sluice gate replacement has begun by removal of the sluice access panel
- Transferred Rotork motor to forebay
- Gave the new Manager of Administration and Finance a tour
Humpback Creek Hydro Plant
- A Tripplite surge protector failed causing a loss of communications to the forebay; a new temporary power supply was promptly installed and a replacement surge protector ordered
- Removed alders from forebay roof (still have more to do)
- Toshiba battery bank was removed from service and the umbilical cord was reinstalled for bypassing purposes. The unit needs a software upgrade and this is a service tech issue. After much convincing, Toshiba thought it was more conducive to allow us the use of the software rather than sending one of their techs. We are now waiting for the software to arrive
- Installed new Enersys battery bank for replacing old batteries in the power plant
- Cut over from the old batteries to the new with no problems
- Installed new oil seal on downstream bearing for Hydro 2, this is a techtite rather than ring split seal that can be installed without removal of the bearing housings and/or shaft. It only took 1 hour (total game changer for bearing replacements)
- Construction machinery (left over from initial build) was removed from the bushes and staged for disposal offsite
- NVE’s landing craft was utilized and the debris was hauled away
- CTC’s ditch witch was returned with help of the landing craft as well
CEC Fleet Vehicles
- Replaced back tires on back hoe
- Changing out back hoe rims and tires for spares
- Equinox door regulators
- Equinox cam shaft position sensor
- Changed oil in unit 40
- Changed oxygen sensors in unit 33
- Replaced service center air compressor
- Programmed bay door remotes
- Anti-freeze change in back hoe
- Disposed of used oil from drums
I included my Greenland travel report in the regular agenda packet. I am planning to take personal leave November 17th-19th to attend the Alaska Municipal League annual conference in Anchorage on behalf of the City of Cordova. I plan on attending the December 7th and 8th “December Meeting Series” of the Alaska Power Association; CEC board members often attend. This is the meeting at which resolutions are finalized and strategy set for the legislative session. It is also the time that the ARECA insurance exchange, Manager’s forum, APA board meetings are conducted. I may take personal leave to visit family over the Thanksgiving and/or Christmas holidays but do not have any other travel planned for the remainder of the year.
Interest Rate Forecast: Verbal report / PowerPoint
CEO Koplin presented a power point highlighting the following points:
- Unit #6 – Power outage on Friday October 21st/lube oil spill
- 2017 Budget
- Pressure on rates, revenues & expenses
- Capital investments should be in energy efficiency upgrades
- Maintenance for both distribution and generation
- New employee development and Human Resource challenges
- Crater Lake status on hold due to staff limitations and financial partners
- Power Creek potential via battery,
- Outage Summary for 2016 was reviewed
- Power Creek Instream Flow update
- Kuntz gave board an update explaining status with FERC and agencies to eliminate the
5 cfs licensing requirement and potentially release mitigation funds licensing requirement
- Interest Rates—Summary graph was presented and discussion ensued regarding forecast for 2017 and budget decision to fix rates
On question regarding lube oil spill for Unit #6 Koplin stated our SPCC plan was recently completed. When the spill occurred the process was followed and appropriate notification to DEC/EPA was completed. DEC verbally concurred with how we were handling the situation. No fines have been assessed; DEC will analyze and act up how much oil was actually recovered and/or spilled. We are still tabulating final estimates and will work with our consultants to minimize the financial impact. A discussion ensued on containment options for diesel Units #5 & #6. Koplin will keep Board apprised.
Koplin introduced Emma Merritt who will be replacing Covel as Manager of Administration and Finance upon retirement. Merritt spoke briefly to the Board stating her credentials and her excitement for the challenge of the new position.
Covel reviewed the following reports:
- Statement of Operations for September
- Cash Flow Analysis for September
- Revenue Report for September
- Cash Disbursements for September
- Bankcard Services Summary of Charges September 2016
- Generation and Sales Statistics
Snow Removal Award – It was moved by Faulkner, seconded by Wooden to award the snow removal contract for Power Creek and all other CEC facilities to Wilson Construction. It was noted there could be a perceived conflict of interest on the Board due to financial interests.
Board agreed and Wooden withdrew her second. Director Little seconded. Voice Vote: 4 Yeas; 1 Abstention. Motion carried.
Nominating Committee Names Needed for Appointment at November Meeting – The following names were submitted:
- Dede Srb
- Victoria Baker
- Bryan Mills
Other directors will submit names by November meeting.
Appoint Scholarship Committee – It was moved by Pegau, seconded by Wooden to appoint Joe Cook, Patience Faulkner and Debby Collins to the Scholarship Committee. Voice Vote: 4 yeas; 1 Abstention (Faulkner). Motion carried.
Strategic and Operating Plan – The Annual Operating Plan for 2016 was reviewed in an effort to aid in the preparation of the 2017 Budget. Koplin indicated projects that had been completed in 2016, projects that will remain in the plan for 2017 and some projects that are undecided at this time. Pegau stated he felt the boiler project is important, repairs done to HBC Unit #1 should be mirrored on Unit #2; as well as repairs for Diesel Unit #6 being mirrored for Diesel Unit #5.
Concern was noted regarding the condition of the Power Creek Road. It was suggested that CEC work with the State Department of DOT as the project is vital to Cordova. The new Distribution and Production Manager comes on board October 31st at which time budget discussions will ensue. Other items for consideration are Website upgrades and Information Technology strategies.
CEO Travel – Noted
Greenland Workshop Trip Report – Koplin summarized his trip and thanked the Board for supporting him. Koplin delivered three power point presentations
- “Holistic Approach to Integrating Energy Supply to Meeting Community Needs”
- “Assessing the Timing of Investments in Storage”
- “Assessing Transmission Expansion and Distributed Generation Strategies”
During the conference several items were discussed with potential interest to CEC (i.e. electric vehicles, alternatives to deflector-controlled system frequency by a Turgo hydroelectric turbine on an isolated grid—the identical opportunity we are pursuing for Power Creek.
Christmas Decorating Contest – Board asked that “LED” be deleted from the category “Best LED Light Display” to read “Best Light Display”.
- Policy #33C—Assistance to Other Entities
- Policy #34C Changes in Tariff Rates, Rules and Regulations
- Article XII—Miscellaneous
Meeting Date for November – Board agreed to change the meeting date from November 23rd to November 21st due to the Thanksgiving Holiday.
- Board Site Visits and Infrastructure Assessment
- Approve Nominating Committee at November Board Meeting
- ByLaw Committee Meeting
Chairman Pegau reminded Board members of the Training session on November 3rd at 5:30pm regarding CEO Evaluation and Compensation.
BOARD PENDING EVENTS CALENDAR
November meeting date changed to Monday, November 21st.
SUMMARY OF BOARD DIRECTION TO CEO
- Provide updated Operations Plan with the 2017 Budget
At approximately 8:08pm it was moved by Wooden, seconded by Faulkner to go into executive session to consider matters, the immediate knowledge of which would clearly have an adverse effect on the finances of the cooperative. Voice Vote: Unanimous. Koplin, Covel and Merritt were excused.
Board reconvened at 8:12 pm. No action taken. BOARD COMMENTS
It was moved by Little, seconded by Faulkner to adjourn at 8:15 pm.