CORDOVA ELECTRIC COOPERATIVE, INC.
Regular Meeting September 28, 2016
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. Directors present were Wooden and Zastrow. Directors Faulkner and Cooper participated via teleconference. Director Little and Blackadar were absent.
Also present were CEO Koplin, Manager of Administration & Finance Covel, and Executive Assistant/HR Coordinator Bailer (recorder).
APPROVAL OF AGENDA
Faulkner moved and Wooden seconded to approve the agenda as presented. Roll call vote: 5 yea – 0 nay. Motion carried.
Faulkner moved and Wooden seconded to approve the Consent Agenda that includes:
- Minutes of August 24, 2016 meeting
- Patronage Capital Estate Retirements Roll Call Vote: 5 yea – 0 nay. Motion carried
CEO’s Written Report
Budget: The financials continue to perform well given the poor fishing season, loss of the fast ferry, and loss of most of our Coast Guard Cutter load for the summer. A summary of current interest rates will be distributed at the meeting (we don’t publish them to protect our bank from competitive access to their rate structures) and I have added a summary below of meetings with CoBank last week during the Alaska Power Association Conference. I will distribute a summary of CEC projects to date – those budgeted/not budgeted but completed, those in progress, and those which were deferred due to budget or human resources constraints or timing. I will also share an update of the CEC performance objectives to date. I have started very preliminary preparations for the 2017 budget cycle.
Alaska Power Association (APA) and National Hydropower Association (NHA) Meetings: The conferences were a resounding success both NHA, APA, CEC, and the Cordova business community. General feedback was that we have very well maintained plants (from operations managers and industry professionals from all over the country), that the food was fantastic (many described it as the best of any APA conference), and that CEC staff are very knowledgeable and capable. Special thanks to Barb, Valerie, Dan, and Craig who handled many of the logistics. Also special thanks to those working behind the scenes – Shannon and Angela covering the office, and Nate and Kevin keeping the lights on during the storms – working around the clock to keep the hydros running, and the line crew – Jeff, Tim, and Terry completing construction projects and jumping in to help the short-handed power production staff with screen cleaning and hydro challenges to keep our plants running and our hydro above 87% year to date. It was truly a community wide effort that brought an estimated $250,000 of business to Cordova and dazzled our industry peers. Special thanks to Scott who attended all meetings and events and drove for the plant tours, and Patience who attended many if not most of the general sessions and some of the meetings and awards banquet, and David Little for attending receptions and events as time allowed. It was gratifying to garner the respect and admiration of our legislators and peers in the national hydro industry and Alaska electric utility industry. I presented on the future of the industry and had a lot of positive feedback on our passion and strategic vision for the future.
Emma (Roemhildt) Merritt has been hired as the new Manager of Administration and Finance starting on 10/3/16, and Scott Newlun has been hired as the Manager of Generation and Distribution starting in mid to late October. These additions to CEC team will help round out the administrative portion of the team while focusing on filling vacancies in power production and line crew.
CoBank Meeting: Chairman Pegau and I had the opportunity to meet with our relationship manager at CoBank, Jake Good, Vice President of Power; Energy and Utilities Division, last week during APA meetings. We discussed the management of the CEC debt portfolio. He observed that most electric cooperatives carry an average of about 20% liquid assets (variable rate), and 80% fixed. He also noted that several utilities, including CEC, have carried a high percentage of liquid assets over the past few years and have looked “like geniuses” as a result. He reaffirmed CoBank’s confidence in CEC, and their categorization of CEC as a low risk customer due to the strong performance of our financials, and the strength of CEC management. Chairman Pegau also had the opportunity to meet with Brock Taylor, our former relationship manager now serving as CoBank’s Regional Vice President of Power; Energy and Utilities Division.
SPCC Plan Update: The SPCC Plans have been completed and submitted to CEC for final review and acceptance. With drafts in hand we are now back in compliance with our SPCC requirements.
Crater Lake Update: I have been working with staff to develop a financing/funding model that I think may work for the CEC Board and the Cordova City Council for managing the financial burden to CEC and the City by sharing the cost and risk with external stakeholders, which we continue to identify, engage, and evaluate as partners for the project.
Engineering Assessments: A draft report was received for Power Creek road slope stabilization and is under review.
- An outage occurred at 1942 on 08/19/2016 affecting parts of the 1st Street corridor. The cause of this outage was a faulted primary phase in the alleyway between 1st and 2nd A preliminary overhead repair was constructed and all customers were back in full power by 2300. The underground primary fault was located and spliced as well as an adjacent phase that tested weak on 08/25/2016. This has been a section of primary cable has been identified as a cause for concern and there are plans to reconstruct CEC facilities serving this area. A walk through occurred on 09/13/2016 involving the Linecrew and engineering staff to refine draft plans for the proposed work to install new facilities in the spring of 2017.
- An outage occurred at roughly 1558 on 9/14/2016 affecting three feeders (13 mi., New Town and Lake Ave.). The cause of this outage was frequency decay leading to the initiation on the load shedding scheme. Once the frequency had been arrested and the system stabilized it was determined clear to close back into the three feeders that were dropped. All but 32 customers were restored to full power by roughly 1615. There was a blown fuse as a result of inrush that left roughly 32 residences along Power Creek Rd out of power until it was refused at approximately
- The Linecrew has been at work straightening leaning streetlight poles and taking inventory of the condition of poles around the
- New temporary service was provided at the City of Cordova Boat Haulout to supply lighting load through the
- Work continued on the Cordova Electric Energy Storage
- Work continued on updating and bringing into compliance CEC’s Spill Prevention Countermeasure Control (SPCC)
- Two residential service upgrades were requested and plans have been drawn to facilitate These system
- The City of Cordova has begun preliminary planning on updating the electric service to the Eyak Water Treatment Plant. CEC staff has provided current service requirements to bring the service into compliance with current National Electric Safety Code and National Electric Code.
POWER PRODUCTION REPORT
Orca Power Plant
- Diesel Production has been minimal. The exhaust stack for Unit 4 diesel was coated
- Orca Diesel plant was cleaned, organization, and painted in preparation for NHA/APA
- A faulty current transformer in Unit 3 diesel was diagnosed and a repair plan is in progress
- All diesel units are in good running condition and available for service
- A circuit was run from Orca Plant to the Cat Vans to replace batteries
- The drainage upgrade to the Orca Plant has performed extremely well during flooding
Power Creek Hydro Plant
- The Power Creek hydro plant has been cleaned and maintenance performed in preparation for NHA and APA tours
- Despite extensive flooding and leaf debris and bed load movement, power production staff have kept hydro production stable at 87% year to date, which will likely result in an all-time high percentage of hydro production, and perhaps a kilowatt-hour record
- On 9/6/16 Chairman Pegau and new CEC staff toured the Power Creek hydro facilities in preparation for the APA and NHA conferences
- Trash Screens at Power Creek have continued to perform well
- Power Creek Road keeps flooding making access to clean leaves during the storms more difficult; production employees have been timing access and remote operations to limit shut downs to a few hours during flooding, rather than the days these events used to require
Humpback Creek Hydro Plant
- A poorly (contractor) installed instrumentation wiring bundle was pinched in the connector causing Unit 3 hydro at HBC to fail to start. Spare parts are at Power Creek and will be installed
- The new battery bank has been installed and placed back into service at the HBC intake structure by CEC staff (unbudgeted project)
- The VFD fan drive for the HBC tunnel has been repaired and placed back into service
- Parts for the HBC Crane repairs have been received and a work plan is in progress
- HBC site has been cleaned and organized
CEC Fleet Vehicles
- CEC fleet maintenance has been conducted on several pieces of CEC equipment and vehicles
CEC HQ Building Repairs
The repairs to the CEC building have been completed at approximately half of budget and there was no window leakage or failures during the storm. I met with the executive director of NVE and approved an engineering assessment of the HQ building (at NVE cost with the report to be shared with CEC) to determine approximate value/cost of elevator and other repairs identified during recent operations and inspections of portions of the building. The report will assist NVE in considering purchase of the building.
As I mentioned in previous reports, I will be traveling to Greenland this week to participate in the “Energizing the Arctic” workshop hosted by the US State Department, the Naalakkersuisut (parliament) and Nukissiorfiit (Greenland Electric Utility) in Nuuk, Greenland October 2-8. I will be participating in tours of their new hydro/community water supply, round table discussions, and delivering three presentations including holistic approach to integrating energy projects into a community and micro-grid, the timing of adding energy storage to a micro-grid, and assessing transmission expansion and distributed generation strategies from a remote system’s perspective. The presentations are largely based upon CEC case studies of past and future projects, and I can present them to the board upon request. I recommend Valerie Covel as Acting CEO October 1-24 (policy).
CEC Equity Management Plan Review
The CEC equity management plan (CEC Board Resolution) will be distributed at the meeting, staff is recommending no changes to the plan, but do recommend a board discussion around capital credits retirement. Staff does not recommend this for 2017.
CEO’s Verbal Report
Koplin mentioned the CEO Performance Elements are based on the Annual Operating Plan included in the Strategic Plan. The Annual Operating Plan for 2016 has been updated to show what is completed, the percent of completion of a project, deferred projects, and new projects.
Koplin mentioned Emma Merritt was hired as the new Manager of Administration & Finance and Scott Newlun has been hired as the new Manager of Generation & Distribution. Koplin mentioned Journeyman Lineman Tim Dillon resigned.
Koplin said he is planning on appointing Valerie Covel as the Acting CEO during his absence from October 1-24, 2016. Board concurred with his appointment.
Koplin reviewed the Orca boiler fuel usage for the years 2011 through 2016. A discussion ensued. ADMINISTRATIVE REPORTS
Covel reviewed the following reports:
- Statement of Operations for August
- Cash Flow Analysis for August
- Revenue Report for August
- Cash Disbursements for August
- Bankcard Services Summary of Charges as of 8/17/16
- Generation & Sales Statistics
Purchase Order #1891 to Keta Engineering for $46,000 (not budgeted) – Pegau said this Purchase Order was previously approved in the amount of $40,000 and there was a cost overrun of $6,000 so it is being brought back to the Board for approval. Wooden moved and Faulkner seconded to approve Purchase Order #1898 to Keta Engineering in the amended amount of $46,000.00. Roll Call Vote: 5 yea, 0 nay. Motion carried.
CoBank Sharing Success Program – Pegau said this information has been distributed to Directors
to review and rate. Discussion. Zastrow moved and Wooden seconded to approve a donation in the amount of $5,000 to the Cordova Arts and Pageants and to submit this donation request to CoBank’s Sharing Success matching grant program. Roll Call Vote: 4 yea, 1 nay (Faulkner).
Review Equity Management Plan – The Board reviewed the Equity Management Plan.
Communication Plan Update – Koplin reviewed the Communication Plan, which is 80% complete as of September 28, 2016.
Crater Lake – Scope of Project – Pegau said the Board has not discussed the size of the project or level of debt CEC may incur if the project moves forward. A discussion ensued and research on the project will continue.
CEO Travel – Noted
Board Stipend History – Bailer explained the history of the Board stipend and a discussion ensued. The Board turned this over to the Bylaw Committee to review and make a recommendation.
Board Self Evaluation Review – The Board reviewed their Self-Evaluation and Development Performance Elements for 2016 to date.
- Policy #31A – Member Education and Public Relations
- Policy #32D – Membership in Other Organizations
- Article XI – Financial Transactions
- Board site visits and Infrastructure Assessment
- Crater Lake Update
- Nominating Committee – need members to serve on Committee for October Board Meeting
- CEO Contract expires 12/31/16. Board to schedule meeting with CEO to discuss contract by 11/2/16.
BOARD PENDING EVENTS CALENDAR – Noted SUMMARY OF BOARD DIRECTION TO CEO
- Boiler fuel use – email to Board
- CoBank Sharing Success Program – submit application to CoBank
Cooper – Thanked everyone and said this was a great meeting. She appreciates all the work Clay’s done to help the Board.
Faulkner – Very good meeting – covered a lot of territory.
Wooden – Great meeting. Kudos to staff and Directors that participated in the National Hydropower Association Alaska Conference and Alaska Power Association Annual Meeting here in Cordova.
Zastrow – Thank you to all for the time committed to the National Hydropower Association Alaska Conference and Alaska Power Association Annual Meeting.
Pegau – Staff did a great job at the National Hydropower Association Alaska Conference and Alaska Power Association Annual Meeting. They really did an excellent job.
It was moved by Wooden and seconded by Zastrow to adjourn at 8:24 p.m.