CORDOVA ELECTRIC COOPERATIVE, INC.
REGULAR BOARD MEETING
October 24, 2018
The Regular Meeting of the Board of Directors of Cordova Electric Cooperative, Inc. was called to order at 6:10 p.m. by Chairman Pegau. Members present were Cook, Phillips, and Srb. Director Johnson participated via teleconference. Directors Faulkner and Cooper were absent. Also present were CEO Koplin, Manager of Administration & Finance Merritt, Manager of Generation and Distribution Newlun, Executive Assistant/HR Coordinator Bailer (Recorder), and Project & Technology Coordinator Kuntz.
John Magee, P.E. was present and reported on the progress at the Humpback Creek Hydroelectric Project, specifically thrust block #7.
APPROVAL OF AGENDA
Cook moved and Phillips seconded to approve the agenda as presented. Phillips moved and Cook seconded to amend the Agenda to add, under New Business, Revise Purchase Order #2106 for Carlos Martin for a total of $24,000 and Amend Purchase Order to Remote Site Services Inc. for a not to exceed amount of $150,000. Voice vote on the amendment: Unanimous. Motion carried.
Voice vote on the main motion: Unanimous. Motion carried.
Phillips moved and Srb seconded to approve the consent agenda that includes the following:
- a) Minutes of September 19, 2018 Board Meeting
- b) Minutes of October 16, 2018 Special Board Meeting
- c) Approve New Members – 7/1/18 – 9/30/18
- d) Estate Retirements
Voice vote: Unanimous. Motion carried.
CEO Written Report
CEO Travel: On October 24 and 25 I attended the CHARGE branding conference in Iceland and presented as a speaker. The conference was attended by energy companies who are using branding to connect with their customers. This was a very insightful look in how to survey and learn your customer’s needs and their perceptions of CEC. I also learned from these customer-focused companies, their tools and programs to engage and serve customers. The information will be a powerful tool as we engage partners and customers over the next few years, and when combined with some other insights gained from meetings this month, will help me to recommend and advise strategy to the board. I met with Nukissiorfiit in Greenland the 26th and 27th and reviewed our project work and lessons learned from our RADIANCE, BESS, and other projects, and they got me up to speed on theirs. Their delivery of heat and electricity is a very valuable model for Cordova, and new technologies are offering some very compelling opportunities for CEC to reduce heating costs in Cordova and grow our electricity sales in the process. It may also support a model that will allow CEC to build Crater Lake and get higher value from it. As I write this, I have just finished my Electricity Advisory Committee meeting in Washington, D.C. and am continuing on to Reykjavik to speak at the Arctic Circle Assembly later today. The EAC meetings were fantastic. They helped me to understand why Cordova is so unique and has an easier path to develop the electric utility model of the future. I was able to speak with high level Department of Energy officials and get a better understanding of the opportunities that might be available for CEC. The Arctic Circle Assembly with Senator Murkowski through the weekend and tours of the energy plants on Monday will provide excellent exposure to the great technical progress at CEC to an audience of over 2,000 heads of State and sector leaders in transportation, energy, health care, science, and economic development. This has been the most significant travel year of my career at CEC, and the networking and exposure for CEC and to new opportunities has been exciting. However, I am glad that this concludes any significant travel for the next few months. I am looking forward to digging into strategic planning and budget and wrapping up some projects as we head into winter.
Interest Rates: Interest rates have risen, and the anticipated scenario seems to be playing out; the stock market has reacted very negatively, and the fed is coming under harsh criticism for raising rates with pressure to stop. The only way to spur the economy is to move back toward lower rates, though this will probably take a year or two.
Crater Lake Update: The core drilling was a little disappointing in that rock quality was not as good as hoped, which translates to higher costs to build and seal a dam foundation. However, progress on the Shepard Point Road design has revealed an opportunity to slide the power house several hundred feet to the north to significantly reduce costs, likely more than dam costs would increase.
Hydro Maintenance and Project work: Significant and exciting maintenance work has been completed over the past few weeks on our hydro projects; work that was identified years ago and Scott, Craig, Nate, Alan, Brian, Kevin, Aaron and the line crew are to be congratulated for finally getting some of this long-standing maintenance work completed, in addition to fuel metering and other projects outlined in the operations report.
RADIANCE Update: The RADIANCE project technical interchange meeting was the most exciting to date, and we appreciate Patience being able to attend for several hours and get a perspective on the exciting (and at the same time frightening regarding cyber security exposure) work in progress. The baseline modelling of our system and the development of the resilience metrics are nearing completion. The exciting pieces are the opportunity for an Advanced Metering Infrastructure and automatic dispatching of excess hydro to all be funded from the RADIANCE project and $300,000 of funding was approved by the Department of Energy for it. The other exciting development is that the cyber-security hardening is nearly complete, and in the words of one of the lab experts, we are the only electric utility in the country that is implementing a new zonal architecture that is the current best practice, military and national security grade architecture. The great aspect of this is that most of it was implemented on existing hardware, and we are likely to get deep discounts on the relatively inexpensive switches and routers needed for completion. Cordova Telephone has put significant time and resources into supporting these efforts and are really going the extra mile for CEC.
Electric Energy Storage (EES) Project Update: I have been busy working to support final engineering and design efforts, which have progressed a little slower than hoped. Final options and estimates have been received from SAFT and ABB for RADIANCE project elements, and these should be finalized by next week to allow final design completion. This will drag site construction into winter, which is forecast to be a mild El Nino, so construction might be possible through winter or early spring to keep the May 15 delivery date. The many panels and discussions around battery energy storage use cases at the EAC meetings this week provided a couple of additional examples of how we might use our battery to unlock additional fuel savings and grid strengthening.
CEO Verbal Report
Koplin mentioned the Purchase Order modifications that were added to the Agenda and explained the purpose for the amendments. Upon questions Koplin explained various items in his report. Discussion.
Generation and Distribution Report
ORCA Power Plant
- In the process of replacing bearings on cooling fan for engine 3.
- Still cleaning and repairing issues from coolant spill.
- Replace coolant temperature shut down, sensors on engine 3.
- Replace the system with fresh coolant engine 3.
- Install control monitoring meter on engine 6 to troubleshoot.
- Working on electric boiler with EPS.
- Finishing up fuel meter installation on engine 4.
- Day tank for fuel additive test has arrived.
- CAT van has been repainted.
- PMU data stream has been reconfigured for GMLC team collection.
- Extensive work on our Cyber Security is ongoing.
Power Creek Hydro Plant
- Completed all brush clearing and bridge work.
- Completed Tunnel inspection.
- Develop a plan for new server and communication hub location in control room.
- Routine maintenance check at the plant and forebay.
- DOT has rebuilt the road and it has been washed out.
- Spliced Communication line that parted in storm.
Humpback Creek Hydro Plant
- Routine maintenance check at the plant and forebay.
- Brush clearing and spot painting of penstock are completed for this season.
- Inspection of penstock between thrust block 6 and thrust block 10 has been completed.
- Rehab of Thrust Block 7 project has been developed and is being scheduled.
CEC Fleet Vehicles
- Breaks on unit 30 have been worked on.
- Hydraulic valve on Bucket truck has been repaired.
- Door on Van has been repaired.
- Oil changes and routine Maintenance.
- New rear tire and rim on backhoe.
- Replace steering rams on the outboards for our skiff.
- Some light fixtures at Ilanka have been replaced.
- Plumbing has been repaired at Ilanka.
- Parking stripes have been re-painted at Office.
- We have requested bids for snow removal for this season.
- Several new service requests.
- Grounding study at the substation has been completed.
- Survey work has been completed at the substation.
- Fiber at Power Creek Hydro Project has been spliced.
- Work on reclosers at Power Creek plant and substation.
- Several surge protection devices have been installed for customers.
- Respond to issues with high water.
- Anixter and line crew repair and develop plans for metering issues.
Merritt mentioned Diane Ujioka is retiring in January and CEC is advertising for a Customer Service Representative II. Merritt also mentioned the Capital Credit checks are printed and ready to be signed.
Merritt reviewed the following reports:
- Financial Report ending 9/30/18
- Revenue Report for September
- Cash Flow Analysis for September
- Cash Disbursements for September
- Bankcard Statement Summary 8/17/18
- Purchase Order Report
- Generation and Sales Statistics
Review Strategic Plan – Mid-term and short-term goals – Discussion ensued regarding the Strategic Plan.
Appoint Scholarship Committee – Phillips moved and Cook seconded to appoint Joe Cook, Patience Faulkner, Dede Srb and Kara Johnson to the CEC Scholarship Committee. Discussion. Voice vote: Unanimous. Motion carried.
Snow Removal Award – Sub moved and Phillips seconded to award the 2018/2019 snow removal contract for Power Creek and the Cordova facilities to Wilson Construction, sanding for Power Creek to Wilson Construction, and sanding for the Cordova facilities to Cordovan Snow Removal. Discussion. Voice vote: Unanimous. Motion carried.
Policy #15H – Records Management Policy – Phillips moved and Cook seconded to adopt Policy #15H as amended. Discussion. Voice vote: Unanimous. Motion carried.
Purchase Order #2110 to John Magee, P.E. in the amount of $20,000 – Phillips moved and Cook seconded to approve Purchase Order #2110 in the amount of $20,000 for the engineering and support services of John Magee, P.E. Discussion. Voice vote: Unanimous. Motion carried.
Revise Purchase Order #2106 for Carlos Martin for a total of $24,000 – Phillips moved and Cook seconded to amending Purchase Order #2106 to Carlos Martin and the sole source contract for work at the Power Creek Hydroelectric and Humpback Creek Hydroelectric sites for an additional amount of $9,000, bringing the total to $24,000. Discussion. Voice vote: Unanimous. Motion carried.
Amend Purchase Order to Remote Site Services Inc. for a not to exceed amount of $150,000 – Srb moved and Cook seconded to approve amending the Purchase Order to RSSI in the amount of $50,000 for a total not to exceed amount of $150,000. Discussion. Voice vote: Unanimous. Motion carried.
Nominating Committee names needed for appointment at November meeting – (Policy 40C) – Pegau reminded Directors they need to have the name of a member willing to serve on the Nominating Committee to Bailer by November 19 for approval at the November Board meeting.
CEO Travel – Koplin gave a brief report on the Electricity Advisory Committee meeting and Arctic Circle Assembly.
Director Training Schedule – Noted
Review Equity Management Plan – Review of Plan
Christmas Decorating Contest – Discussion on categories and something for the schools.
- Policy #16C – Loans to Employees and Directors – Noted
- Policy #17D – Safety Committee – Discussion
- 2019 Annual Meeting – Monday, March 25, 2019
- Nominating Committee names needed for November meeting
- CEC Safety Culture / Safety Program
BOARD PENDING EVENTS CALENDAR – Noted
SUMMARY OF BOARD DIRECTION TO CEO
- Quarterly update to 2018 Operating Plan
- Draft 2019 Annual Operating Plan
- What are operating expenses compared to 2015?
Johnson – Appreciates CEC’s effort to diversify use of local vendors
Srb – Appreciates Koplin presenting at the various meetings
Cook – Good job to everyone. Good snow removal/sanding diversion.
Phillips – Thank you to staff. Appreciates use of local vendors.
Pegau – Thanked Johnson for participating via teleconference.
Srb moved and Cook seconded to adjourn the meeting at 8:20 p.m.