CORDOVA ELECTRIC COOPERATIVE, INC.
REGULAR BOARD MEETING
July 24, 2019
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, Johnson and Ranney. Director’s Faulkner and Srb were absent. Also present were CEO Koplin, Manager of Administration and Finance Merritt, Manager of Generation and Distribution Newlun, Executive Assistant/HR Bailer (Recorder), and Project and Technology Coordinator Kuntz.
APPROVAL OF AGENDA
Cooper moved and Johnson seconded to approve the Agenda as presented. Voice vote: Unanimous. Motion carried.
Johnson moved and Cook seconded to approve the consent agenda that includes the following:
a) Minutes of June 26, 2019 Board Meeting
b) Approve New Members 04/01/19 – 6/30/19
Voice vote: Unanimous. Motion carried.
CEO Written Report
CoBank Loan Application: I will be presenting a PowerPoint business update that provides some history and options for financing construction and maintenance costs from debt, rates, cash reserves, or a combination of the three to help provide background for a loan decision. This will include a comprehensive update of the 3 to 5-year anticipated project pool, human resources update, and staff recommendations for how to finance those projects. Finally, there will be an explanation of the CoBank loan structure. If the Board wants to approve the loan this meeting from unfinished business then you can, or it can remain on the agenda as unfinished business until August.
Crater Lake Update and Go/No Go: I will prepare and present a Go/No-Go overview at the August meeting that summarizes work and budget to date, the current status, and options for next steps (or not). I will use the tollgates process as in the past. The Board requested a special meeting, and we can schedule that meeting date as a Board Pending Event.
Crater Lake Full Geotechnical Report: I am uncomfortable providing copies of this detailed field report to the Board outside of the CEC Office. After discussing this with your council, Andy Leman, he recommends that it be put on the regular agenda for approval by the board. My concern is that in the past, information has been circulated and used by competing contractors to file on Snyder Falls Creek. I am concerned that competitors or contractors may use this data to criticize or pursue the project. I have added this to the agenda as an action item with a cover memo that outlines several options and attached a copy of the portion of Policy 1 that assigns responsibility for Cooperative information to the CEO.
CTC Collaboration: I am reviewing a draft contract with CTC for fiber optic and communication infrastructure and will be discussing the merits and concerns of the contract with CTC General Manager Jeremiah Beckett.
Interest Rates: The variable rate has continued to drop, saving CEC money on our debt portfolio.
BESS Update: I have been spending a significant portion of my time on the Battery Energy Storage System (BESS) split between technical review and contribution, managing the contract with SAFT, and applying for grant reimbursement. So far $115,000 of the $800,000 contract payments have been requested and approved, and the balance are in progress. I hope to bill approximately $600,000 of the contract this year for work that is complete or nearly complete, and the balance will be collected over the next two years as we complete the contractual tasks (data collection, etc.). I have been working on the PNNL contract as well, which has deliverables starting as early as this month with background data requests and initial project scoping and tasks.
Power Creek Road Repairs: The work is commencing on this project. We worked with eh Alaska Department of Transportation to design it so that it can be built by local contactors with local materials and it has been a good construction project for local contractors.
Tariff Revisions: We hope to prepare the billing error revisions for public hearing and adoption in August or September.
Larsen Energy Customer Survey and Brand Audit: The summary report and a cover memo are included as information items in this packet.
Orca Boiler Update: The boiler work is tentatively scheduled to commence this fall as the boiler and materials arrive.
RADIANCE Project Update: We are considering a project modification to move some of the budget from automated switchgear, which would be of lower value to CEC, to a larger Automated Metering Infrastructure pilot that can accomplish the same function as the switchgear, but be much more flexible and higher value to CEC. We will be making these decisions at the next Technical Interchange Meeting (TIM), which will be at Sandia National Laboratories this September 18th and 19th instead of Cordova. The hardware in the loop and digital blueprint models of our system are being built at the lab, and CEC staff will work with lab staff to tune the model to be an accurate representation of the Cordova grid. The CEC BESS project requires CEC to participate in three of the Department of Energy’s Energy Storage Peer Review meetings. Craig Kuntz presented at the last one, and I will present at this one September 22-26, which does cross over a Board meeting. We moved the TIM schedule to coincide with the Peer Review to avoid dual travel and expenses. Many CEC staff have been participating in many aspects of the project including modelling tuning, micro Phasor Measurement Units, event report gathering and sharing from reclosers and SCADA (Supervisor, Control, And Data Acquisition) system.
CEC HQ Building Update: The primary maintenance concern is with the aging piping and City service entrance which are starting to leak. We are taking advantage of EPS doing RADIANCE work on the Orca Boiler to have them assess and repair the water leak while here. The Native Village of Eyak has indicated interest in buying the building for a reduced price. We can discuss pricing and disposition in Executive Session. NVE has indicated that they would be willing to provide an extended lease to CEC to remain in the areas we are currently occupying and would prefer if we can vacate some of the space we are using.
Agenda Action Items: In addition to the business update in the PowerPoint, I will provide background and options for the Humpback Creek Thrust Block Repairs, the Power Creek bearing and/or Turbine Inlet Valve Repairs, a Mini Excavator and trailer for lease or purchase, and the CoBank Sharing Success Program which has a new matching level of up to $7,500 and can include up to 3 applications and non-501C3 non-profits.
CEO Verbal Report
Koplin said per Chairman Pegau’s suggestion he will show the power point slides referring to Action Items when the Action Item comes before the Board.
Koplin mentioned Board training and the information provided in the Agenda packet referencing various training options, saying staff thought the National Rural Utilities Cooperative Finance Corporation training would be beneficial to both the Board and staff, and would be at no cost to CEC.
Discussion on various CEO report topics.
GENERATION & DISTRIBUTION REPORT
Newlun and Koplin answered Board questions regarding various topics.
Merritt reviewed the following reports and answered questions.
- •Financial Reports 6/30/19 – Handout
- Revenue Report for June
- Cash Flow Analysis for June
- Cash Disbursements for June
- Purchase Order Report
- Generation and Sales Statistics
Appoint Representative and Alternate to the Alaska Power Association Board – Pegau mentioned Cook is currently the CEC representative and Cooper is the alternate, and when asked, both Cook and Cooper agreed to serve for another term. Johnson moved and Ranney seconded to appoint Joe Cook as the Alaska Power Association Representative and Alexis Cooper as the alternate. Voice vote: Unanimous. Motion carried.
Purchase Order #2172 to Marine Systems Inc. for $25,390.60 – Koplin showed the power point slide(s) relating to this item with an explanation of the purchase. Johnson moved and Cooper seconded to approve Purchase Order #2172 to Marine Systems Inc. for $25,390.60. Discussion. Voice vote: Unanimous. Motion carried.
Purchase Order #2175 to Remote Site Services for $200,000; Purchase Order #2165 to Hatch Associates Consultants, Inc. for $10,000; and Purchase Order #2176 to John Magee, PPE, for $30,000 regarding HBC Penstock Thrust Blocks – Koplin showed the power point slide(s) relating to this item with an explanation of the project. Pegau asked if the intent was to pay for this project with the CoBank Loan and Koplin said it was. Johnson moved and Cook seconded to approve Purchase Order #2175 to Remote Site Services for $200,000; Purchase Order #2165 to Hatch Associates Consultants, Inc. for $10,000; and Purchase Order #2176 to John Magee, PPE, for $30,000 for the HBC Penstock Thrust Block Project. Discussion on scope of work and thrust blocks involved.. Voice vote: Unanimous. Motion carried.
Award Power Creek H5 Bearing & TIV Proposal to Canyon Hydro for $150,000 – Koplin showed the power point slide(s) that referred to this project with an explanation of the project. Cooper moved and Johnson seconded to approve the acceptance of the bid from Canyon Hydro for work at the Power Creek Hydroelectric site as defined in their proposal for an amount not to exceed $150,000. Discussion. Voice vote: Unanimous. Motion carried.
Purchase Order #2173 to Kubota for $75,000 and Purchase Order #2174 to Equipment Source Inc. for $13,600 – Koplin showed the power point slide(s) referring to this item and explained the reason for the purchases. Johnson moved and Cooper seconded to approve Purchase Order #2173 to Kubota for $75,000 for the purchase of a mini excavator and Purchase Order #2174 to Equipment Source Inc. for $13,600 for the purchase of a trailer. Discussion. Voice vote: Unanimous. Motion carried.
CoBank Sharing Success Program – Johnson moved and Cooper seconded to approve an additional donation amount of $2,500 to the 2019 budget. Discussion. Voice vote: Unanimous. Motion carried.
Equity Management Plan- Pegau said the intent is not to recreate the Equity Management Plan Resolution but to come to an agreement of what the Board would like to edit, with the revised Resolution to come before the Board at the August meeting. Discussion with Board recommended edits to the Resolution.
Power Cost Equalization – Merritt explained what was happening with the Power Cost Equalization funding. Cooper moved and Cook seconded to remove PCE credit from customer bills until the resolution of PCE funding. Discussion. Voice vote: Unanimous. Motion carried.
Crater Lake Geotechnical Report Data – Pegau moved and Cooper seconded to provide the Crater Lake Geotechnical Report Data report electronically through the Board drop box. Discussion. Koplin asked if it was the Boards intention to keep this report confidential and Pegau said it was. Discussion. Voice vote: Unanimous. Motion carried.
Board Training & Strategic Planning with CFC – Discussion. Board directed staff to get dates for scheduling the CFC training.
CoBank Construction Loan – This item was postponed to August meeting at the June Board meeting.
CEO Travel – Koplin updated his travel schedule to include August and September travel. Koplin mentioned he would be on personal leave August 3-15 and upon question, said he would like to appoint Emma Merritt, Manager of Administration and Finance, as the acting CEO while he is gone. The Board concurred with his appointment.
NRECA Region IX Meeting – Spokane, September 24-26, 2019 – Noted
Larsen Energy Branding – Internal Interviews – Noted
- Policy #35J – Management Wage & Salary Plan – Noted
- Policy #36C – Personal Use of Company Vehicles – Noted
EXECUTIVE SESSION – None
- Review Board Evaluation Quarterly (January/April/July/October)
- Customer Appreciation Day – Thursday, August 29, 2019
- Crater Lake Go / No Go – Board will budget approximately 45 minutes at the August 28, 2019 Board meeting for a Crater Lake Water & Power Project presentation.
BOARD PENDING EVENTS CALENDAR – Noted
SUMMARY OF BOARD DIRECTION TO CEO
- Include letter of CTC interest in CEC sharing office space in August agenda
- Draft an Equity Management Plan Resolution with Board updates and include in August agenda
- Put full CLWPP Geotechnical Report in Board drop box
- Get schedule for CFC Board Training
- Review September meeting date at August meeting
- Crater Lake Go-No Go presentation at August meeting. Include as an action item on the September agenda.
Ranney – Noted we spent close one-half million dollars tonight.
Cook – Good meeting. We are back on top of things.
Johnson – Thank you to staff and Board. Directors need to drum up interest for members to attend the August Board meeting for the Crater Lake presentation.
Cooper – Likes the format and memos with each Purchase Order. Also likes having the power point presentation ahead of time to review. Thank you.
Pegau – Thanked staff for work done to modify the process to give the Board enough information to make decisions.
Johnson moved and Cooper seconded to adjourn at 8:35 p.m.
Date Approved Secretary/Treasurer