Cordova Electric Cooperative

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Cordova Electric Cooperative

August 2020

Final

CORDOVA ELECTRIC COOPERATIVE, INC.

BOARD MEETING

August 26, 2020

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. Due to the COVID-19 pandemic Directors and staff have the option of participating via gotomeeting. Director Phillips and Beedle were present. Director’s Cook, Campbell, Ranney, Cooper and Pegau participated via gotomeeting. CEO Koplin, Manager of Generation and Distribution Newlun, and Executive Assistant/HR Bailer (Recorder), participated in person. Manager of Administration and Finance Merritt, and Project and Technology Manager Kuntz participated via gotomeeting.

MEMBERSHIP PARTICIPATION

None

APPROVAL OF AGENDA

Cook moved and Campbell seconded to approve the Agenda as presented. Roll call vote: Unanimous. Motion carried.

CONSENT AGENDA

Ranney moved and Cook seconded to approve the consent agenda that includes the following:

  1. a) Minutes of Meeting of July 22, 2020

Roll call vote: Unanimous. Motion carried.

MANAGEMENT REPORTS

CEO REPORT

CEO Written Report

CEC Connection of Private Power Producers: Sample tariffs have been collected for review for considering modification to CEC Tariff rate class 600 which addresses connection of private power producers to CEC grid. However, staff is recommending a cost of service study and rate analysis as outlined in Emma’s memo re: Fuel Surcharge Calculation (FSC). An updated rate class 600 could be included in that scope of work to be developed by rate setting professionals who are experienced in this arena.

Elevator Removal: A request for proposals has been circulated and contractors have performed site visits. An action item has been placed on the Agenda for Board consideration.

Electrify Alaska Conference: The conference will be hosted as a virtual event tentatively targeting the week of November 9th. The contract with ArktiKa, the conference coordinator, is being extended from July to December, and from a monthly rate to the hourly rate as planning the virtual conference requires a more sporadic work effort with no requested cost increase or decrease until conference coordination tasks and effort becomes clearer.

Hydro Kinetic Grant Application: After reviewing the match requirements and revising the budget several times, it will not be possible to meet the 50% match requirement without a CEC contribution. An action item is included in this agenda for a not-to-exceed amount of $300,000 which includes CEC labor and materials mostly in years 2 and 3 of the project. A final budget and work plan will be prepared if the grant is awarded, and that would come back to the CEC Board for approval before we proceed. In addition, there is a go/no-go decision after the year 1 feasibility work which will allow CEC to opt out if the project does not look favorable. The grant deadline has been extended to September 30th.

Strategic Planning: Staff met on August 7th to review the CEC strategic plan and evaluate current strengths, weaknesses, opportunities, and threats for CEC. Subjects included strategic approach to reducing diesel fuel use, aging diesel plant and headquarters building, underground wire replacements, and CEC’s new status and funding opportunities with Department of Energy and industry partners. I will prepare a slide deck for the Board meeting that outlines the high points.

CEC Communications: The CEC staff and Board worked together to identify CEC internal and external lines of communication and summarized them in the 2017 Communications Plan document. I have revised the Board communications portion of this document to reflect current Board communications with members which can form the basis of a CEC Board Member Outreach Plan/Communication Strategy in the Board Self-Evaluation and Development Performance Elements.

Raging Creek Hydro Assessment: The Board deferred this assessment for strategic planning and budget discussions. The Alaska Energy Authority has implemented a Renewable Energy Fund round 13 application process, and staff recommends applying for a grant to evaluate several of our hydro prospects as one comprehensive effort, which would be more cost-effective in general, and potentially cost-shared through the grant. Those projects would include Raging Creek, Snyder Falls Creek, Humpback Creek Storage, Power Creek Storage, and perhaps MHK (Marine Hydrokinetic Project) and/or two high elevation prospects near the CEC road system.

Solar Grant Update: The DER SurePatch grant application with Sandia Labs is in the final step of being selected for the Department of Energy (DOE) Solar Energy Technologies Office. There is a pre-selection committee interview on September 2nd are we are hopeful that this project will be awarded. This project would improve the cybersecurity of solar installations and develop a methodology for CEC to segment the grid into a solar plus BESS (Battery Energy Storage System) to keep a portion of the grid running on solar plus battery in an emergency. The project would include $200,000 of DOE funding for CEC participation, and a $500,000 match by CEC toward line extension to solar array, and vendor discounts for solar installation. The technical volume for the project has been placed in the Board’s dropbox folder.

CEO pandemic-related work time: I am now spending approximately 1 hour a week on pandemic-related work, none on CEC time.

Power Creek Dam Replacement: We closed out this work order and project to clear our books and our contractor’s but are still planning to proceed this fall as river flows drop. We will start fresh with a new contract and option for selecting new subcontractors, etc. The project cost is not expected to increase significantly.

BESS Funding Summary: We applied for the final $80,000 of Sandia Grant last week, which leaves a balance of $220,000 of Pacific Northwest National Labs project funding. I will be applying for payment for a portion of that in the coming weeks. Total billed to date: $605,000 of $825,000 for a billable balance of $220,000. I am working with Sandia staff to request follow-on funding to precisely measure fuel and operational costs and savings from the BESS to better advise the energy industry on the costs and values of energy storage.

Orca Boiler Update: The new electric boiler continues to perform well, saving significant fuel.

Payroll Protection Program Loan. CEC has accounted for enough eligible expense to qualify CEC for the maximum forgiveness amount. The reimbursement applications are yet being accepted by CoBank, but we expect the announcement to come soon.

CEO Travel: None until further notice.

CEO Updates to Board: Tariff section 600 was emailed to the board. Solar SurePatch proposal was added to Board drop box.

Operations Update: July and August power production and line crew activities included:

  • New Underground down Orca Inlet Road from Orca Plant to Fleming Spit
  • Diesel Engines 3 and 7 one-revolution maintenance
  • Maintained appropriate pandemic protocols in workplaces
  • Continued daily 7am tailboard meetings near company-wide daily call
  • Completed programming BESS controls for summer peaking and mode-changing
  • Upgrades to Meridio mapping software and CEC Work Order process
  • Responded to several customer requests for new services – higher than normal volume
  • Worked on RADIANCE project, server racks at Power Creek
  • Extensive internet and networking maintenance with CTC
  • Completed 2 splices to CTC powerline to Crater Lake tower
  • Staff Strategic Planning workday to assess power production needs and opportunities
  • August production so far is 2,256,000 kWh, well below average, and hydro percentage is 85.6% month to date as rainfall has been light and waterflows have dropped, 66% year to date
  • Emergency repairs to engine 7 starter
  • Changed out Humpback Creek lighting to LEDs

CEO Verbal Report

Koplin presented a “Strategy Map” power point and a discussion ensued regarding renewable energy options and cost.

Administrative Reports

Merritt reviewed the following reports:

  • Financial Report for 7/31/2020
  • Revenue Report for July
  • Historical Revenue Breakdown – Supplement
  • Cash Flow Report for July
  • Cash Disbursements for July
  • Purchase Order Report
  • Generation & Sales Statistics
  • Member Disconnects

NEW BUSINESS

Amendment 1 to CEC / ArKtiKa Company LLC Consultant Agreement – Koplin explained that due to the COVID pandemic the Electrify AK Conference scheduled to be in Cordova in August was postponed and preparations are being made to hold it virtually in November. Phillips moved and Ranney seconded to approve Amendment 1 to the CEC/ArKtiKa Company LLC Consultant Agreement, extending the Contract Duration to December 31, 2020. Discussion on conference and holding it virtually. Roll call vote: 6 Yea, 1 Nay (Cooper). Motion carried.

Alaska Power Association Legal Expenses – Cook explained the legal expenses that Alaska Power Association is seeking help to cover. Cooper moved and Phillips seconded to contribute $2,160 to the Alaska Power Association for Cordova Electric Cooperative’s pro-rata share to assist them with their pandemic related legal fees. Discussion on CEC’s legal use. Roll call vote: Unanimous. Motion carried.

Fuel Surcharge Calculation & Cost of Service & Rate Design Study – Merritt explained the calculation and studies. Cooper moved and Beedle seconded to direct staff to put together a bid packet requesting a Cost of Service Study in advance of the 2021 Budget. Roll call vote: 6 Yea, 0 Nay, one abstention (Ranney as he missed part of the conversation). Motion carried.

Eyak Remediation – Koplin explained the remediation work and mentioned the cost is split 50/50 with the City of Cordova. Phillips moved and Ranney seconded to approve a Purchase Order to Stantec Consulting Services Inc. for Eyak Remediation work for a not to exceed amount of $30,000. Discussion on this item in the budget. Roll call vote: Unanimous. Motion carried.

Insurance Renewals – Koplin explained the cost of the insurance. Cooper moved and Phillips seconded to approve the purchase of insurance coverage from ARECA Insurance Exchange and Parker, Smith & Feek for a total amount not to exceed $360,571.00. Roll call vote: Unanimous. Motion carried.

MHK Grant Application – Koplin explained the Grant process. Campbell moved and Pegau seconded to approve a not-to-exceed match of $300,000, approximately 7.5% of project cost, to Marine Hydrokinetic generator grant application. Discussion on project. Roll call vote: Unanimous. Motion carried.

Headquarters Elevator Removal – Kuntz gave an overview of the project. Ranney moved and Campbell seconded to award Phase I of the elevator removal as defined to Cordova Construction LLC in the amount of $23,780.00 with the option to award Phase II based on staff’s recommendation, in the amount of $24,350.00 for a total of $48,130.00. Discussion on this item being covered in the budget. Roll call vote: Unanimous. Motion carried.

Policy #56C – Drug & Alcohol Testing – Koplin mentioned Policy #56C combines Policy #53A – CDL Mandatory Drug Testing Policy and Policy #56B – Drug and Alcohol Testing into one Policy. He said staff is looking for Board acceptance of this Policy as revised to enable us to present it to the Union for their review. Discussion on Policy. Board gave the acceptance of the Policy as written.

AMI Vendor Selection – Koplin explained the Advanced Metering Infrastructure (AMI) smart meters and what they do. Discussion on AMI’s and the selection process. Pegau asked if there was any objection with proceeding with Vendor 2 and hearing none, told Koplin he has Board consensus to continue.

Equity Management Plan – Board reviewed the current Equity Management Plan and had no revisions.

Strategic Planning – Board reviewed the current Strategic Plan and directed Staff to add it to the September Agenda to allow the Board time to think about the Plan and any revisions.

UNFINISHED BUSINESS

None

INFORMATION ITEMS

CEO Travel – noted

Board Attendance at Regular Meetings – noted

OTHER ITEMS

Policy Review:

  • Policy #62 – Whistleblower Policy – referred to Staff to update
  • Policy #64 – Information Security Program – referred to Staff to update

EXECUTIVE SESSION – none needed

PENDING AGENDA

  • Review Board Evaluation Quarterly (January/April/July/October)

BOARD PENDING EVENTS CALENDAR

Noted

SUMMARY OF BOARD DIRECTION TO CEO

  • Policy #62 – Whistleblower Policy – update with legal input
  • Policy #64 – Information Security Program – update
  • Conduct a request for proposal for the Cost of Service Study

BOARD COMMENTS

Cook – Good job to the Chair on running the meeting. We did a lot of stuff tonight.

Beedle – Thank you all for your work – appreciates Staffs hard work.

Phillips – Thank you to everyone for your dedication to the Cooperative.

Campbell – Thank you to all.

Ranney – Thanks for a real good meeting Chairman Pegau. I really appreciate the presentations.

Cooper – Thank you to all.

Pegau – Thank you to the Board for your dedication and Staff for your work and for providing materials.

There being no further business Phillips moved to adjourn at 8:50 p.m. seconded by Cooper.

Date Approved Secretary/Treasurer

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