CORDOVA ELECTRIC COOPERATIVE, INC.
REGULAR BOARD MEETING
July 25, 2018
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. Members present were Cook, Cooper, Phillips, Srb and Johnson. Director Faulkner was absent. Also present were CEO Koplin, Manager of Administration & Finance Merritt, Manager of Generation & Distribution Newlun, Executive Assistant/HR Coordinator Bailer (Recorder), and Project & Technology Coordinator Kuntz.
APPROVAL OF AGENDA
Cooper moved and Cook seconded to approve the agenda as presented.
Phillips moved and Srb seconded to amend the Agenda to add under New Business item “g”, Amendment to Purchase Order #2081 to Marine Services Inc. for a total amount of $25,525.11, item “h”, CoBank Resolution for Loan Document, and item “i” Emergency Generator Repairs to Unit #6. Voice vote on the amendment: Unanimous. Motion carried. Voice vote on the main motion: Unanimous. Motion carried.
Johnson moved and Cooper seconded to approve the consent agenda that includes the following:
- a) Minutes of June 27, 2018 Board Meeting
- b) Related Party Check – Cordova Computers
Voice vote: Unanimous. Motion carried.
Merritt reviewed the following reports:
- Financial Report 6/30/18
- Revenue Report for June
- Cash Flow Analysis for June
- Cash Disbursements for June
- Bankcard Statement Summary 6/17/18
CEO Written Report
Human Resources: Applicants for power production apprentice are being interviewed this week and next. I am putting out feelers for an engineer for CEC for 2019. There is one particularly attractive and interested prospect I will be investigating this fall, see travel below.
Tariff Revision: the approved tariff revision is being administratively adopted (home loan agreements for extension payment plans, etc.).
Interest Rates: Variable rates dropped slightly, short term rates continue to increase, while long term rates are dropping slightly over the past few weeks. Our spread is 3.83 variable to 4.89 20-yr. Remember that our effective rate is about 0.5% lower due to capital credits from our lender.
EES Project The $500,000 purchase order has been received from Sandia National Labs. This purchase order will reimburse CEC for internal labor and for external costs like EPS integration (programming the controls and user screens in our Supervisory Control And Data Acquisition or SCADA system) per the reimbursable work products in the Purchase Order. The $100,000 for the Battery (BESS) from the RADIANCE project has been approved for the work plan by Rob Hovsapian, the project leader. The RADIANCE project funding is dedicated to INL with the CEC subcontract embedded, so CEC does not require a formal federal contract. The July $100,000 purchase order to EPS for battery integration can be charged to either project, both are now confirmed as reimbursable to CEC. The purchase order is included on this agenda for approval. We ran internal numbers on the energy savings and produced lower benefit numbers of approximately 35,000 gallons in annual energy savings. However, the data was lower resolution and loses a good percentage of savings in between data points and was conservative. The current expectation is that fuel savings will range between 35,000 to 90,000 gallons per year but will require some more upgrades to approach the high end of savings, including purchase of a small (300-500kW) generator to run efficiently at low loads. The battery enables us to do this and improves our efficiency and cost over replacing a large generator like our Fairbanks-Morse. Estimated non-fuel savings (reduced run time hours, reduced starts and stops, lube oil, deferred capacity increase) are significant. Finally, the technical meetings this Monday, Tuesday, and Wednesday developed a very workable scenario for operating the battery and identified a few final details to confirm before construction and delivery of the battery. A ground-breaking ceremony is being scheduled for August 31, 2018 with Federal, State, and Local stakeholders and dignitaries.
RADIANCE Project: We had the technical interchange meeting (TIM) this Tuesday and Wednesday at the Cordova Center, Vice Chairman Cook was able to attend the kick-off meeting summary on Tuesday. The key deliverables for this year of the project are the baseline system model, the cybersecurity assessment, and development of the resilience metrics. All three tasks have made good progress and while certain areas need focus, there are no real deviations or barriers to completing the tasks and producing quality results. CEC is focusing on the procurement and integration of the battery energy storage system (BESS), communications and network hardening, and cybersecurity assessment and implementation of recommendations. We are also focusing on producing accurate, timely data to the laboratories and bringing our database and filing up to date in the process. I would characterize project performance as “good” and has so far exceeded my expectations. There is a looming go/no go decision in October, and I plan to provide the board a high-level project update and recommendation on whether or not to proceed with the project at the September regular board meeting.
CEO Travel: I will be taking vacation July 26-August 2nd. I will be presenting at the CoBank Executive Forum Battery Energy Storage Microgrid Applications Workshop on August 8th and attending the Executive Forum on Energy on August 9th and 10th. CoBank is covering my airfare and partial accommodations for the workshop. I will be attending (and presenting at) the APA Annual Meeting August 20-23 in Fairbanks. On September 24-25 I will be presenting at the Charge Branding conference in Reykjavik, Iceland https://branding.energy/ . This is primarily an industry forum (300-400 attendees) with an opportunity to market our Renewable Energy Certificates or Carbon Offsets for which we have not been able to find a market since 2012. It also provides the potential to draw in industry partners for some of our electric vehicle, smart grid and smart city opportunities. I will continue on to Greenland the 26th-28th to meet with Nukissiorfiit engineers to review their storage + hydro project and solar/battery deployment projects. October 17th and 18th is the next Electricity Advisory Committee meeting in Washington, D.C. which is reimbursable. Senator Murkowski (Energy and Natural Resources Staff) asked me to present and moderate a panel at the Arctic Circle Assembly which is being hosted by the US in Reykjavik, Iceland on October 19th-21st. They do not have a travel budget or stipend, but from Washington D.C. to Reykjavik is relatively quick and inexpensive, and if there is no objection, I will attend on behalf of CEC and the US. The forum is over the weekend and would mostly involve personal time. The assembly is attended by over 2,000 leaders across the arctic. The next TIM meeting for the Radiance project is scheduled for Cordova, the last week of October.
Power Creek Inflatable Dam Replacement: After getting initial quotes directly from vendors, CEC hired McMillen-Jacobs to seek quotes and prepare a work plan and estimate for replacement of the dam ($5,000 budget, $3,500 actual for the replacement plan). They got quotes from three different manufacturers, and Obermeyer was least expensive by a very narrow margin, but familiar to CEC (Humpback Creek gate) and located in the US (others were overseas). The proposal includes approximately $60,000 for design, procurement, expediting, and project management by McMillen-Jacobs. $134,000 was quoted for mobilization, removal of old dam, installation of new dam, and commissioning of new dam. The Obermeyer dam quote was $168,000 without shipping. Staff feels that additional work will not result in a more cost-effective or timely solution, and recommends hiring McMillen for the non-construction design and procurement for not to exceed $60,000, and not to exceed $175,000 for the Obermeyer replacement. The construction would be procured at a later date. Action items are included on the agenda if the boards wants to proceed at this time.
Solar Grant Application: The final proposal has been submitted, a copy is in the drop box.
Power Creek Road Repairs Match: I will be working on this in August.
Generation/Distribution Departments Monthly Report June-July 2018
ORCA Power Plant
- Cam failed on unit 3 and was replaced
- Unit 7 had some issues with load sharing and we had EPS come in and verify that it was ok to run.
- Operators resolved a fail to synchronize faulty Woodward governor setting to return unit 4 to service
- Cleaned radiators on both units 5 and 6.
- Replaced 24V DC power supply on unit 3.
- Started interviews for new apprentice operator.
Power Creek Hydro Plant
- Worked on standby generator.
- Performed maintenance on hydraulic system.
Humpback Creek Hydro Plant
- Inflation valve for the dam has been replaced.
- Routine maintenance check at the plant and forebay.
CEC Fleet Vehicles
- Routine Maintenance.
- Routine Maintenance and cleaning.
- Find out that EYAK remediation samples are not clear yet.
- New service requests.
- Replace a transformer at Camtu’s that failed and was determined to be under sized.
- Working on installing fiber at Power Creek Hydro Project.
- Meter reading and routine maintenance.
- Install temporary jumper for Power Creek comms.
- Train on Meridio software and tablet.
CEO Verbal Report
A power point presentation and discussion ensued regarding the Battery Energy Storage System.
Purchase Order #2079 to Electric Power Systems for BEES Integration for $100,000 – Phillips moved and Cook seconded to approve Purchase Order #2079 to Electric Power Systems, Inc. for Battery Electric Energy Storage Integration for $100,000. Discussion. Pegau wants to make sure CEC is getting reimbursed. Koplin said he thinks we will. Voice vote: Unanimous. Motion carried.
Approve a Purchase Order to McMillan Jacobs Associates for $60,000 for Power Creek Dam Replacement – Johnson moved and Phillips seconded to approve a Purchase Order to McMillan Jacobs Associates for $60,000 for Power Creek Dam replacement. Discussion. Voice vote: Unanimous. Motion carried.
Approve a Purchase Order to Obermeyer for $175,000 for a Replacement Dam at Power Creek – Cooper moved and Cook seconded to approve a Purchase Order to Obermeyer in the amount of $175,000 for a replacement dam at Power Creek. Discussion. Voice vote: Unanimous. Motion carried.
GB Productions Website Hosting and Maintenance Contract – Cooper moved and Johnson seconded to approve a 12-month contract with GB Productions for website hosting and maintenance from July 1, 2018 to June 30, 2019 in the amount of $1,188.00. Discussion. Voice vote: Unanimous. Motion carried.
Appoint Representative to the ARECA Insurance Exchange Board of Trustees – Phillips moved and Srb seconded to appoint Director Cook as the CEC representative on the ARECA Insurance Exchange Board of Trustees. Director Cook said he was willing to serve. Voice vote: Unanimous. Motion carried.
Appoint Audit Committee – Pegau explained the necessity of having an Audit Bid Committee to review the Audit proposals for recommendation of an audit firm to the Board at the August meeting. Discussion. Phillips moved and Cooper seconded to appoint Cooper, Johnson, Srb and Pegau to the Audit Bid Committee with Cooper serving as the Chair. Voice vote: Unanimous. Motion carried.
Amend Purchase Order #2081 to Marine Services Inc. to $25,525.11 – Phillips moved and Cooper seconded to approve the amendment of Purchase Order #2081 to Marine Services Inc. for a not to exceed amount of $25,525.11. Discussion. Voice vote: Unanimous. Motion carried.
CoBank Resolution –Phillips moved and Cook seconded to approve the CoBank Resolution of the Board of Directors of Cordova Electric Cooperative to adopt the Loan Document as presented. (CEC Resolution 18-02). Discussion. Pegau mentioned the Board previously approved $1,400,000 for the BEES project and the T08 CoBank Loan is in the amount of $1,500,000, therefore, staff cannot spend more than the $1,400,000 on the BEES project without going to the Board for approval.
Emergency Generator Repair for Unit 6 – Phillips moved and Srb seconded to approve a not to exceed amount of $25,000 for shipping and emergency repairs to Caterpillar generator #6. Discussion. Voice vote: Unanimous. Motion carried.
CEO Travel – Koplin explained the reasons for the trips to Iceland and Greenland, one being per a request from Senator Murkowski.
2018 Operating Plan Progress to Date – Reviewed and discussed.
NRECA Region IX Meeting – September 26-27, 2018 – Director Cook expressed interest in attending. Motion by Phillips seconded by Johnson to approve participation of Director Cook at the NRECA Region IX Meeting in Anchorage in September. Voice vote: Unanimous. Motion carried.
September Meeting Date – Board and Staff attending NRECA Region IX Meeting – Board agreed to reschedule the September Board meeting to Wednesday, September 19, 2018.
- Policy #10G –- noted
- Policy #11C – noted
- Nominating Committee Process for New Directors
- Board Credentialed Cooperative Director training October 16-17, 2018
BOARD PENDING EVENTS CALENDAR – update August and September meeting dates
SUMMARY OF BOARD DIRECTION TO CEO
- Add Audit Request for Proposal to Dropbox
- Prepare a summary of Board approved unbudgeted items for next meeting
- Compile a list of CEC loans and email to Board
Johnson – No comments
Srb – No comments
Cooper – No comments
Cook – Thanked staff for information including the emergency items that did not make it in the packet but were emailed so Directors could review them before the meeting.
Phillips – Thanked staff for keeping the board informed of emergency items.
Pegau – Appreciates having the anticipated agenda additions to the Board for review before the meeting.
Phillips moved and Johnson seconded to adjourn the meeting at 9:00 p.m.