CORDOVA ELECTRIC COOPERATIVE, INC.
REGULAR BOARD MEETING
June 27, 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, Faulkner, Phillips, Srb and Johnson. Director Cooper 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
Faulkner moved and Srb seconded to approve the agenda as presented
Voice vote: Unanimous. Motion carried.
Faulkner moved and Phillips seconded to amend the agenda to include item “i”, Marine Systems Inc. (MSI) Purchase Order Number 2081. Voice vote: Unanimous. Motion carried.
Faulkner moved and Phillips seconded to approve the consent agenda that includes the following:
- a) Minutes of May 23, 2018 Board Meeting
- b) Patronage Capital Estate Retirement
- c) Related Party Check – Three Point Learning
Voice vote: Unanimous. Motion carried.
CEO Written Report
Human Resources: Applicants for power production apprentice will be reviewed next week.
Tariff Revision: We have not had any questions by members, except that those building homes or seeking new electrical services anxiously waiting to see if the credit will increase.
Interest Rates: I did not place any fixes; they have been holding steady as the market had already priced in all of the anticipated rate increases announced by the Federal Reserve Board (FED).
RADIANCE Project: Work is progressing very strongly the past two weeks as employees and interns dig in while attacking other elements of our aggressive work plan. A reminder that the next onsite meeting is scheduled for July 16th-18th to include a battery energy storage meeting with SAFT and ABB an EPS (Electric Power Systems) to work through details during peak loading in Cordova.
EES Project I anticipate the final contract with Sandia will be in hand by next Wednesday, I included the draft contract for review. Two purchase orders for reimbursable tasks are included for EPS work.
Bill Thomas and Kallander & Associates Updates: I have included a monthly report from Kallander and Associates. Monitoring and support of CEC project funding goals are being executed continuously. The next big push under current contract is updating of the Crater Lake Water and Power project positioning for federal funding. There is a gap in staff capabilities to execute the CEC communications plan. The need to educate and re-educate the community on Crater Lake, Battery Energy Storage, Solar, and other options are becoming more critical as we monitor social media and direct feedback from the members. The organizational horsepower to organize and execute the battery and RADIANCE project ribbon cutting ceremony for State and Federal VIPS and our membership is going to be difficult for an already tasked staff to execute without assistance, and I am proposing a modest modification to the Kallander & Associates contract for the months of July – October as an action item. I sent some legislative updates from Bill Thomas of Ravens walk. His work is largely concluded for the season, and I would say successfully as we now have a scheduled Alaska Department of Transportation (ADOT) project for 2019 for Power Creek Road repairs, and the PCE funding remaining intact through another session. In addition, several creative funding options were identified during session.
CEO Travel: I received a link to the TEDx style talks in Fairbanks for National Lab day. I will try to make this same presentation to Cordova (much improved I hope) for some of the energy savings tips embedded in it: https://youtu.be/F9I0JGjC4ZA
If appointed to the Department of Energy’s Electricity Advisory Council (EAC), my first meeting would be July 9 & 10. I will be taking some personal leave July 26-August 1. I will be attending the CoBank Executive water and power conference August 9&10 and speaking at their Microgrids Energy Storage workshop the day prior on the 8th. CoBank is sponsoring my airfare and partial lodging as a speaker.
Power Creek Inspection: High water prevented including the Board in the penstock (pipeline) Federal Energy Regulatory Commission (FERC) inspection and water meter evaluation. The high river flows and Power Creek Road washouts on Friday the 15th and Monday the 18th required helicopter access to the intake on Tuesday. The uncertainty barely allowed CEC staff and contractors access.
Shoreside Petroleum Contract: I completed the negotiations, preparation, and legal review of our new contract with Shoreside Petroleum, Inc. for fair and high value to our members. I was pleased to see that our average annual fuel use dropped from 850,000 gallons per year in 2007/8 to an average of 550,000 gallons per year over the past five years though I expect this to be more in the 650,000 gallon range if we have “average” years. I have included the entire contract except the precise pricing, which can be discussed briefly in executive session.
Resolution for Solar Project Match: The full proposal will be mostly drafted over this weekend and will essentially commit $650,000 of CEC battery purchase not used as match to the RADIANCE project and $100,000 of line extension credit as match for a grid scale solar installation. My further research over the past two weeks, and some modelling from ACEP and Sandia with local weather data has elevated Solar as an important consideration for meeting an “off diesel” goal for Cordova.
Power Creek Road Repairs Match: I have included an action item for authorizing up to $100,000 contribution to Power Creek road repairs in exchange for permit relocation rights. To put this in perspective, we had Power Creek down for one additional day this week from washouts at a cost of just over $20,000 in excess diesel fuel and are averaging several down days a year due to washouts.
Generation & Operations Report
ORCA Power Plant
- More work on Air start system on Unit 3 and 7.
- Tour by Board member.
- New Title V air quality permit renewal has been submitted.
- New Hot start installed on unit 6.
- Farabee Mechanical Inc. (FMI) Fairbanks Morris repair shop sent report and Quote for repairs.
- Cleaned pits under engines.
- Marine Services Inc. (MSI) sends quote one of the cam shafts on unit 3.
- Work on cyber security with Grid Modernization Lab Consortium (GMLC) group.
- Fuel metering system is under construction, we have one of the CAT engines communicating.
Power Creek Hydro Plant
- Avalanche season is over.
- New server is installed and virtualized.
- A representative for Rittmeyer comes in to inspect Power Creek Hydro for new flow meter placement. He will work up some quotes for us to consider.
- Inspect Penstock with John Magee and Scott Hibbs of Extreme Access.
- Autoflush program is back up and running.
- McMillan Jacobs’s has replied with new power creek dam recommendations.
Humpback Creek Hydro Plant
- Unit H2 is down until we can get a new hydraulic valve. One is ordered and on its way.
- Routine maintenance check at the plant and forebay.
CEC Fleet Vehicles
- Unit 34 has had new shocks put on and find that it needs a new front axle.
- Have discovered that the bed on the flatbed is rusted beyond repair.
- Have sold a surplus Sherman & Reilly puller to EPS.
- Some light fixtures at Illanka have been replaced.
- Sewer line at the Eyak Service Center (ESC) has been replaced.
- Several new service requests.
- Locate for DOT road job on ORCA Inlet Road.
- Service connects and meter reading.
- Repaired a Junction Cabinet that caused an outage at the Airport area.
- Installed new services.
- Changed DOT light pole at Lake and Second.
- Working on secondary installation on Alleyway project.
- Installed new three phase system at the Airport area.
- Working on installing fiber at Power Creek Hydro Project.
CEO Verbal Report
Discussion ensued on various topics including the Shoreside Contract, Power Creek Road, Cyber Security and Solar Power.
Merritt reviewed the following reports:
- Financial Report 5/31/18
- Revenue Report for May
- Cash Flow Analysis for May
- Cash Disbursements for May
- Bankcard Statement Summary 3/17/18, 4/17/18, and 5/17/18
- Generation and Sales Statistics
Merritt was excused from the meeting.
Tariff Revision – Section 6.2.2 and 6.4.1 – Phillips moved and Cook seconded to modify the CEC Tariff Section 6.2.2 to allow members to pay as much as half of the costs in excess of the residential extension credit in monthly payments of not more than 24 months and Section 6.4.1 increasing the residential service extension credit from $1,500 to $3,500. Discussion. Voice vote: Unanimous. Motion carried.
Kallander & Associates Contract Modification – Faulkner moved and Srb seconded to approve the amendment to the Kallander and Associates, LLC contract for a not to exceed amount of $4,000 as outlined in the Amended Contract, Amendment 1 to the Consultant Agreement Between Cordova Electric Cooperative, Inc. and Kallander and Associates, LLC. Discussion. Voice vote: 5 – yea, 1- Nay (Cook). Motion carried.
Shoreside Petroleum Contract – Faulkner moved and Johnson seconded to approve the Agreement for Purchase and Delivery of Fuel with Shoreside Petroleum, Incorporated, per the attached contract. Discussion.
Faulkner moved and Johnson seconded to table this item to post Executive Session. Voice vote: Unanimous. Motion carried.
Sandia Contract – Phillips moved and Faulkner seconded to approve the Agreement with Sandia National Laboratories as presented. Discussion. Voice vote: Unanimous. Motion carried.
Resolution of Support for Solar Project Match – Phillips moved and Faulkner seconded to approve a Resolution of Support and a CEC battery energy storage contribution not to exceed $650,000 and a line extension credit not to exceed $100,000 for participation in a Solar Energy Technology Office grant to install a grid scale solar farm in Cordova. Discussion. Koplin asked to change the amount of the line extension credit to $150,000.
A RESOLUTION EXPRESSING SUPPORT FOR THE SOLAR PROJECT MATCH
WHEREAS, it is the strategic goal of Cordova Electric Cooperative to eliminate dependence upon diesel fuel generation for producing energy for Cordova; and
WHEREAS, solar photovoltaic (PV) energy can be integrated into the Cordova Electric Cooperative grid to improve grid resilience and provide emergency power to critical infrastructure during natural disasters and other cataclysmic events; and
WHEREAS, solar PV energy is an excellent complement to the Cordova Electric Cooperative summer and daytime peaking system, and to run-of-river hydropower plants that perform best when solar panels perform worst and vice-versa; and
WHEREAS, solar panels are a long-life, low operations and maintenance cost, renewable form of energy that fits with the operational, economic, and strategic goals of Cordova Electric Cooperative; and
WHEREAS, the Cordova Electric Cooperative grid offers the ideal site and location to advance bifacial, high-latitude, zonal grid configuration applications of solar voltaic energy to advance technical knowledge and performance characteristics,
NOW, THEREFORE, BE IT RESOLVED that the Board of Directors of Cordova Electric Cooperative Inc. commit a $650,000 battery energy storage installation and a $150,000 line extension credit for grid connection as a combined $800,000 match to a Solar Project Department of Energy Solar Technology Office (SETO), and Cordova Electric Cooperative, Inc.
Discussion. Voice vote: Unanimous. Motion carried.
State of Alaska Department of Transportation Match for Power Creek Road Repairs Not-to- Exceed $100,000 – Johnson moved and Phillips seconded to authorize the CEO to spend a not to exceed amount of $100,000 as a project match to the Alaska Department of Transportation for Power Creek Road repairs. Discussion. Voice vote: Unanimous. Motion carried.
Purchase Order #2079 to Electric Power Systems for $100,000 for EES – Phillips moved and Faulkner seconded to approve Purchase Order #2079 to Electric Power Systems, Inc. for RADIANCE project reimbursable battery electric energy storage project design and equipment not to exceed $100,000. Discussion. Board referred this back to staff.
Purchase Order #2080 to Electric Power Systems for $65,000 for EES – Phillips moved and Faulkner seconded to approve Purchase Order #2080 to Electric Power Systems for Sandia National Laboratories contract reimbursable battery electric energy storage project design not to exceed $65,000 with the stipulation of a signed contract with Sandia National Laboratories. Discussion. Voice vote: Unanimous. Motion carried.
Purchase Order #2081 to Marine Systems Inc. for a not to exceed amount of $20,000 – Phillips moved and Cook seconded to approve Purchase Order #2081 to Marine Systems Inc. for replacement of Unit #3 EMD camshaft for a not to exceed amount of $20,000. Discussion. Voice vote: Unanimous. Motion carried.
Audit Proposal – Discussion regarding CEC audits. The Board directed staff to request proposals for the next audit.
Credentialed Cooperative Director Training – The Board decided to schedule training for two Credentialed Cooperative Director classes, Strategic Planning and Understanding the Electric Business. Staff was directed to conduct a Doodle Poll for dates and to schedule the training through NWPPA.
Crater Lake Presentation – Koplin presented a power point on the Crater Lake project and a discussion ensued on the geology, hydrology, water supply, dam structure, etc.
Director Phillips was excused from the meeting.
CEO Travel – noted
Alaska Power Association Annual Meeting – Fairbanks, August 22-24, 2018 – Director Cook expressed interest in attending and Pegau said Phillips would also like to attend. Srb will check her schedule.
- • Policy #8C – Organization Policy – noted
- • Policy #9B – Internal Control – noted
CEO Contract and Shoreside Petroleum Contract – Faulkner moved and Johnson seconded to go into executive session at 9:15 p.m. to consider matters, the immediate knowledge of which would clearly have an adverse effect on the finances of the Cooperative. Staff was excused.
Board came out of executive session at 9:37 p.m. Chairman Pegau said the Board discussed the Shoreside Petroleum Contract and CEO Contract. No action was taken.
Shoreside Petroleum Contract – Chairman Pegau mentioned there is a motion on the table from the “New Business” item to approve the Agreement for Purchase and Delivery of Fuel with Shoreside Petroleum, Incorporated, per the attached contract. Voice vote: Unanimous. Motion carried.
- Board Credentialed Cooperative Director training
BOARD PENDING EVENTS CALENDAR – noted
SUMMARY OF BOARD DIRECTION TO CEO
- Copy Board on CREW meetings
- Add preliminary proposal for Solar Project to Drop Box
- RADIANCE reimbursable contract including CEC payment
- Audit Request for Proposal
- Circulate RADIANCE meeting schedule for the July 16-18 Cordova meetings to the Board. Schedule a meeting with RADIANCE personnel for a Board presentation or give the Board notice of when an overview of the project will be discussed at the meetings so Directors can attend.
- Change August Board meeting to August 29 due to Directors attending the APA Annual Meeting on August 22.
Faulkner – will not be participating in next month’s meeting as she will be out of town.
Johnson – No comments
Cook – Good meeting. Liked the Crater Lake review
Srb – Appreciates the Crater Lake review
Pegau – Also appreciated the Crater Lake review.
Johnson moved and Srb seconded to adjourn the meeting at 9:45 p.m.
Date Approved Secretary/Treasurer