CORDOVA ELECTRIC COOPERATIVE, INC.
December 23, 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’s Pegau and Phillips participated in person. Directors Cook, Cooper, Ranney, Beedle, and Campbell participated via gotomeeting. CEO Koplin participated in person. Manager of Administration and Finance Merritt and Technology Manager Kudrna participated via gotomeeting.
APPROVAL OF AGENDA
Cook moved to approve the Agenda as presented, seconded by Campbell. Roll call vote: Unanimous. Motion passes.
Beedle moved to approve the consent agenda that includes the following:
- a) Minutes of Meeting of November 25, 2020
- b) Minutes of Special Meeting of December 15, 2020
- c) Estate Retirements
seconded by Ranney.
Roll call vote: Unanimous. Motion passes.
CEO Written Report
Power Creek Dam Replacement: The work is completed and Alpine Diesel revised purchase order on this agenda, a final billing from Wilson Construction for some additional support will be the final billing.
BESS Funding Summary: The priority is currently reimbursement for the $220,000 PNNL balance.
CEO Travel: I have no travel planned for the remainder of 2020 or in January.
Rate Study: The request for approval of this study with Aldrich and Associates is included in this agenda due to its time sensitive nature for rate-setting before summer season.
2021 Budget: The budget was split into two action items; operating budget and capital budget. The Capital Budget will have two options; one that includes a Cat efficiency upgrade, and one that does not. I have attached a memo to this report that helps explain why upgrading the Cats has recently become feasible, and staff’s perspective on why it is a priority project that will pay for itself.
Operations Report (Oct 24-Nov 19): I have not included an operations report; most of November centered around the Power Creek dam replacement, including staff and line crew support to the power production department. Regular operations and maintenance were fit in as necessary around this #1 priority.
AMI Project: A purchase order is included to start with AMI. After weekly technical and scoping meeting with Eaton (the preferred vendor that the CEC board concurred with earlier this year), and budgets received and discussed in detail this morning, COVID-related long lead times for meters and other key components of the system will be under heavy order pressure in January 21, so staff request approval of the $75,000 AMI budget to proceed with those purchases in late December or early January because out national lab partner can’t procure as quickly. Orders can be transferred to RADIANCE later but issuing the PO will assure shorter lead times which are already at 20 weeks.
Power Creek Unit 5 Upgrade: Follow-up discussions with Gilkes, our turbine manufacturers for the power creek units, indicate that if we can place orders for refurbishing or replacing our faulty spear and nozzle assembly in early January, we can expect delivery before seafood processing season, so staff is requesting approval for $375,000 in this agenda to start procurement. It is likely that new nozzle assemblies are approximately $150,000 each delivered, and we will not need to replace the runner. The turbine inlet valve would be repaired separately, so complete repairs may be somewhat less than the staff estimate of $750,000; we are awaiting more detailed estimates and shipping costs.
T9 Loan: Per Board direction, staff is requesting to draw down $710,000 for CEC capital projects; primarily the Power Creek Dam Replacement. This is less than the $960,000 budgeted.
PCS Annual Maintenance: A purchase order is included in this agenda for the PCS annual maintenance fees which are due in early January and require board approval to meet that schedule.
Second Street Payment: If CEC pays their contribution the first week of January, the ADOT can start engineering work, and authorize CEC’s engineering work which will be reimbursed approximately $100,000 by year end. Staff recommends approval to get work started on this community project.
CEO Verbal Report
Koplin gave a brief recap of the last few years perspectives including Crater Lake, Power Creek road, the Battery Energy Storage System project, electric boiler at the Orca plant, Advanced Metering Infrastructure pilot, Power Creek dam replacement, and what staff is looking at for next year including diesel upgrades where appropriate and the Power Creek Unit 5 rebuild. Staff feels all the above projects are consistent with the Strategic Plan.
Merritt reviewed and answered questions on the following reports:
- Financial Report for 11/30/2020
- Revenue Report for November
- Cash Flow Report for November
- Cash Disbursements for November
- Purchase Order Report
- Long Term Debt Summary
- Generation & Sales Statistics
T9 Loan Draw – Koplin explained the reason for the T9 Loan draw request. Cook moved to approve a $710,000 draw on the T9 Loan, seconded by Ranney. Roll call vote: Unanimous. Motion passes.
Revising Purchase Order #2285 to Alpine Diesel from $200,000 to $294,000 – Koplin mentioned Alpine Diesel spoke to their invoice at the special budget meeting. Phillips moved to approve revised Purchase Order #2285 to Alpine Diesel in the amount of $294,000, seconded by Campbell. Roll call vote: Unanimous. Motion passes.
2021 Proposed Operating Budget – Pegau said the Operating Budget and Capital Budget were divided into separate action items. Cook moved to approve the 2021 Operating Budget as presented, seconded by Ranney. Discussion on staff’s work in separating the operating and capital budgets and targeted items. Roll call vote: Unanimous. Motion passes.
2021 Proposed Capital Budget – Koplin explained the Capital Budget proposals. Ranney moved to approve the 2021 Capital Budget for a not to exceed amount of $1,470,000, seconded by Beedle. Discussion on Capital Budget items. Roll call vote: 0-yea, 7-nay. Motion fails.
Campbell moved and Phillips to approve the 2021 Capital Budget as presented for $2,170,000. Discussion on the motion and project options. Pegau moved to amend the motion to move the headquarters repairs to a priority project for $100,000 and remove the vehicle replacement and Power Creek gravel sensors, seconded by Phillips. Pegau said this is to keep the dollar amount the same but changes the projects. Roll call vote on the amendment: Unanimous. Amended motion passes. Roll call vote on the main motion: 5-yea, 2-nay (Beedle, Ranney). Motion passes.
Purchase Order #2291 to PCS for Annual Maintenance Agreement for $48,824 – Koplin said this is for the annual maintenance support. Phillips moved to approve Purchase Order #2291 to PCS for $48,824 for 2021 Annual Support and Maintenance, seconded by Ranney. Roll call vote: Unanimous. Motion passes.
Second Street Project Payment – $150,000 – Koplin mentioned the Board approved the contribution for the Second Street Upgrade at an earlier meeting and that this City project was approved. He mentioned CEC will receive reimbursement for the engineering work CEC does this year and may get reimbursable funds for replacement items in the future. Ranney moved to approve a not to exceed amount of $150,000 to the City of Cordova to expedite the Second Street improvements project, seconded by Cook. Discussion on reimbursable items. Roll call vote: Unanimous. Motion passes.
Purchase Order #2295 to Gilkes for not-to-exceed $375,000 – Cooper moved to approve Purchase Order #2295 to Gilkes and Gordon Ltd. for a not to exceed amount of $375,000, seconded by Campbell. Roll call vote: Unanimous. Motion passes.
Purchase Order #2292 to Aldrich & Associates for $69,450 – Koplin mentioned the timeline for a rate study and if the Board decides on a rate increase after reviewing the results, when it may affect CEC members. Beedle moved to approve Purchase Order #2292 for $69,450 to Aldrich CPAs and Advisors for the 2021 Rate Study, seconded by Cooper. Discussion on Tariff Schedule 600. Roll call vote: Unanimous. Motion passes.
Purchase Order to Eaton for AMI Meters/Equipment for $75,000 – Cook moved to approve a not to exceed amount of $75,000 to Eaton for purchase of long lead time AMI components, seconded by Campbell. Roll call vote: Unanimous. Motion passes.
Cat Generators-EPS Preliminary Engineering PO #2293 & $2294 for $25,000 each – Cook moved to approve Purchase Order #2293 to Electric Power Systems for a not to exceed amount of $25,000 for cat upgrade mechanical engineering, and Purchase Order #2294 to Electric Power Systems for a not to exceed amount of $25,000 for cat upgrade electrical engineering, seconded by Ranney. Discussion on the engineering. Roll call vote: Unanimous. Motion passes.
Strategic Plan – Discussion – Ranney said this has been reviewed at past meetings and the confusion for him was the Cat relocation was not in the Strategic Plan. Discussion on long range plans.
Proposed Bylaw Revision, Article IV, Section 8 – Pegau said the attorney was contacted regarding potential revisions to this section of the Bylaws and that CEC can bring this item forward to the members in 2021 or at a future Annual Meeting. Koplin distributed the information from the attorney to Directors while Pegau read the options given for consideration of a change to Article IV, Section 8. Beedle moved to present to the membership option B to Article IV Section 8 as presented, seconded by Pegau. Discussion on the suggested revision. Roll call vote: 1-yea (Beedle), 6-nay. Motion fails.
CEO Travel – noted
Board Attendance at Regular Meetings – noted
Thank you letter from Alaska Power Association 11/20/2020 – noted
EXECUTIVE SESSION – none needed.
- Review Board Evaluation Quarterly (January/April/July/October)
- Communication Strategy
- 2021 Annual Meeting – March 22 (Monday)
BOARD PENDING EVENTS CALENDAR
SUMMARY OF BOARD DIRECTION TO CEO
- CEO self-evaluation to Board by January meeting
Cook – It’s been a tough year and hopefully things will get better and everyone will stay safe. Have a good year.
Cooper – Thank you to the Board and staff – I really appreciate the work staff did to present the Budget and options to the Board. Merry Christmas to everyone.
Phillips – Good meeting. I appreciate everyone’s dedication and time.
Campbell – Thanks all. Lots of heavy lifting this meeting that was helped by the extra Budget meeting. It’s been quite a year.
Ranney – Past Board’s brought CEC over 70% renewals and my New Year’s Resolution is to see what I can do to help us move forward with renewables.
Beedle – Have a wonderful Christmas and Happy New Year. I hope it is good for everyone here.
Pegau – Thanked staff and Board for being able to do as much as we did this evening. Appreciate everyone coming being prepared for the meeting. Reminded Board that all Directors can participate in the Christmas judging contest.
There being no further business the meeting adjourned at 8:25 p.m.