September 2007 Board Minutes
YAMPA VALLEY ELECTRIC ASSOCIATION, INC.
REGULAR MEETING OF THE BOARD OF DIRECTORS
The Board of Directors of Yampa Valley Electric Association, Inc. convened at 32 Tenth Street, Steamboat Springs, Colorado at 11:00 a.m. on September 21, 2007 for the regular meeting.
The Chairman reconvened the meeting of August 17, declared all business was concluded and upon motion being duly made and seconded, the August 17, 2007 meeting was adjourned.
The Chairman called the September 21, 2007 meeting to order.
Upon calling the roll, it was reported that the following directors were present: Dean Brosious, Peggy Espy, Bill Haight, Pat McClelland, Scott McGill, Chuck Perry, Jim Simos and Pud Stetson, being all the directors except Sam Haslem, who was absent.
There was no public comment.
Directors considered approval of the previous month’s minutes. A motion was duly made and seconded to approve the minutes of the previous meeting.
RESOLVED that the minutes of the previous meeting be and are herby approved.
Director comments were presented. Mr. Brosious shared a letter to the editor from the Craig newspaper which greatly complimented the work of YVEA crews. Ms. Espy inquired of Mr. Haslem’s health.
Directors considered the matter of member and employees surveys. The topic was identified at the last director retreat for further discussion. Directors discussed at length the wisdom, content, need, cost and timing of a member survey. It was determined that the topic would be revisited annually. Mr. Covillo reported to directors that an employee survey could be produced by Mtn. States Employers Council. Directors discussed that item at length and told Mr. Covillo they would like to see a survey with feedback of employees’ perceptions of working at YVEA.
Mr. Vaillancourt presented the safety report for the month of August. He stated there were no accidents in that month. Mr. Covillo reported the vehicle accident that occurred in early September which resulted in a fatality. Mr. Covillo discussed the matter and thanked Mr. Perry for his contact with the family of the deceased, on behalf of the Association.
Mr. Covillo reported a customer’s allegation regarding a mudslide in Steamboat Springs. Mr. Covillo explained the Association’s installation of cable in the road right of way. Mr. Sharp commented on the articles written in the local newspaper.
Upon motion being duly made and seconded, the following resolution was unanimously adopted:
RESOLVED that the safety report be accepted.
Mr. Covillo addressed power supply issues. He reviewed the REC transfer document that has been in negotiation with Xcel for approximately one year. He stated the Association needs a rider to the wholesale power contract with Xcel for the REC’s and that Xcel has produced that document to be filed with FERC.
Mr. Covillo discussed net metering and reviewed the net metering legislation to be introduced at the next session. He stated the matter was considered at CREA with review of the possible bill language. Mr. Covillo reviewed what is allowed in the YVEA contract with Xcel. There was some discussion of the situation at the Routt County Justice Center and review of why YVEA cannot buy the excess generation from their solar system. The Board concurred that Mr. Covillo should meet with the County Commissioners to explain YVEA’s position in the matter.
The Board adjourned for a lunch break at 12:05 p.m.
The Board reconvened at 12:45 to continue the meeting.
Mr. Covillo continued his discussion of power supply issues. He reported review of the Two Elks asset purchase agreement by himself and Misters Sharp, O’Neil and Wagner. He stated the revision was sent to North American Power Group. Mr. Covillo said he received the Participation Agreement the previous day and had not been able to review it. He reported that the attorneys expect extensive revisions and suggest a conference call with North American Power Group to address the items of concern.
Mr. Covillo stated that CoBank sent out the Request for Proposal for the engineering due diligence on the project. Only two firms responded and CoBank made recommendation of the firm E3 who was then found to have a potential conflict of interest. The issue was resolved to clarify that there was not a conflict and E3 is now proceeding with the engineering due diligence.
CoBank is ready to issue the Request for Proposal for legal counsel. Mr. Covillo commented on the possible respondents to that RFP.
Mr. Covillo discussed the wheeling and capacity swap issues of Two Elks. He said PacifiCorp will not communicate regarding the matter and described his attempts to contact them. He told the directors that Black Hills Power may present an opportunity for capacity swap. He said Tri-State has not been very responsive to the idea but may have a small interest in capacity swap. Mr. Covillo stated he may need to file an appeal to Oasis to identify the transmission path, cost and delivery options. Mr. Sharp asked about the Oasis report, inquiring how far out it would provide a wheeling rate. Mr. Covillo explained the report will show the possible path and the rates can be found as published wheeling rates. Mr. Haight asked what wheeling rate would kill the deal and Mr. Covillo responded to the rate expected.
Mr. Covillo had numerous miscellaneous items to report. He asked Mr. Chappell to review his attendance at the PUC meeting held September 11 at the YVEA community room. Mr. Chappell recapped the activities of the meeting and reviewed the comments made by the public and PUC commissioners at the meeting.
Mr. Covillo discussed NERC, the North American Electric Reliability Corporation, their authority and their revised regulations for reliability of the transmission grid. He explained the role of the Western Electricity Coordinating Council. He stated the Association may be subject to their regulations by virtue of our sales, given that we serve greater than 25MW of aggregated load at all delivery points. Mr. Covillo reviewed his attendance at a meeting of the WECC held in Salt Lake City. He reviewed the proposals, process, fines, etc. Mr. Covillo voiced his concerns with the regulations and expressed his opinion that the Association may not be properly included. He stated that he will file the letter of protest and appeal the Association’s inclusion.
Mr. Covillo discussed the Association’s filed rules and regulations regarding net metering. He explained what our wholesale contract with Xcel Energy allows and what the state law requires. He explained how YVEA handles net metering. Mr. Covillo discussed the difference of philosophy he has had with a customer who is in the solar business. He said the general topic was discussed at the CREA meeting. Mr. Covillo suggested change to YVEA policy in compliance with YVEA’s contract. Mr. Covillo discussed solar installations and possible output to the YVEA system. Mr. Brosious questioned the safety to YVEA linemen that need to work on these interconnected systems. Mr. Covillo explained the interconnection equipment and requirement. Mr. Covillo asked for board consensus to move to a true net metering policy with any excess generated by the interconnection to be paid at the avoided energy cost, which is the energy rate plus the fuel cost adjustment. Mr. Sharp asked for further explanation of how the customer charge is properly applied to the interconnection agreement customer. Mr. Covillo responded and directors discussed the matter. Mr. Covillo stated the recommendation matches the CREA proposal up to our contract limits. He stated that given Board consensus in the matter, he will bring an advice letter to a future meeting to propose the rule, regulation and policy change.
Mr. Covillo reminded directors that ACRE dues would be collected at the October meeting. He also informed directors that their flower fund was depleted and donations could also be collected at the next meeting.
Mr. Covillo reported that 1,600 customers are already taking advantage of the E-bill program.
Mr. Covillo stated that he was contacted by a representative of the estate of a landowner regarding possible sale of property to YVEA. He reported his conversation with the representative.
Mr. Covillo reported power prices in the southwest part of the country. He reminded directors that natural gas prices in Colorado have been lower due to trapped gas in the state. He told directors that the situation will not continue as the new gas transmission line will begin to move gas out of Colorado. Mr. Covillo discussed WAPA rates and reviewed the status of hydro generation.
Mr. Covillo reported that most directors receive the Form 7 and Form 7 notes by e-mail. He asked whether directors would prefer to receive the board agenda and minutes by e-mail. Mr. McGill and Mr. Perry asked to continue receiving hard copy; all other directors asked for e-mail.
Mr. Covillo reviewed the bylaw requirements for YVEA director candidates. Directors held lengthy discussion of the eligibility requirements and process for running for the YVEA Board of Directors. The matter of determination of director eligibility was considered and referred to Mr. Sharp for his review. Directors also considered the matter of director districts and the current territorial definitions of the districts. Directors requested the matter be placed on the agenda for the next board retreat.
Mr. Covillo reported he was asked by Xcel Energy and the Salt River Project to testify before the Routt County Commissioners regarding their rail spur application. Mr. Covillo stated he was also asked by Grand Valley Rural Power Lines to testify on their behalf before the PUC in a matter regarding line extension policy.
Mr. Simos presented the report of Paradigm Services. He reported the activities of the last board meeting and reviewed the operation and financial issues. Directors held lengthy discussion of the status of operations at Paradigm.
Mr. Covillo presented the report of BTA Associates.
The CREA report was presented by Mr. Haight. He attended for YVEA in the absence of Mr. Haslem. Mr. Covillo also reported his attendance at a CREA board meeting. Directors discussed whether alternate directors should be appointed to the outside boards but there was no proposal made.
Mr. Haight presented the report of Western United.
Mr. Covillo and Mr. Miller presented the financial and statistical reports. Upon motion being duly made and seconded, the following resolution was unanimously adopted:
RESOLVED that the financial and statistical reports are accepted.
A motion was duly made, seconded and approved unanimously to amend the agenda to consider new and unfinished business before the Executive Committee Report.
The Chairman called for new business, but there was none.
The Chairman called for unfinished business. The Chairman of the Board provided directors the following committee assignments for the upcoming year to correct the oversights in the previous list:
Audit Committee Executive Committee Finance Committee
Haight, Chairman Stetson, Chairman Simos, Chairman
Stetson Simos Stetson
Espy Haslem McGill
McGill Haight Perry
Brosious
Member Services Committee Policy Committee
Haslem, Chairman Brosious, Chairman
Stetson Stetson
Espy McClelland
McClelland Perry
Mr. Brosious gave the report of the Executive Committee which met earlier in the day. He addressed the attorney retainer for 2008. He reported the committee’s recommendation to increase the retainer in consideration of the CPI and the additional time being required of the attorney. Upon motion being duly made by Mr. Brosious and seconded by Mr. Haight, the following resolution was unanimously adopted:
RESOLVED that the attorney retainer be increased for 2008 to $1,550 per month.
Mr. Brosious presented the Executive Committee’s review of the general salary adjustment and benefit change. He reminded directors of the commitment made in the previous year to bring the salary scale to the 90th percentile. He reported the committee’s recommendation for variable pay grade changes resulting in an overall approximate 4.5% increase, the increase in employer contribution to medical insurance at two times the CPI for an adjustment of 6.8% and the changes in the design of the life insurance policy to increase the coverage levels for employee spouse and dependent children. He also reported the committee recommendation to accept the increase in the Association’s pension plan cost. Upon motion being made by Mr. Brosious and seconded by Mr. McClelland, the following resolution was unanimously adopted:
RESOLVED that the Association’s wage scales be adjusted to an overall approximate increase of 4.5%, with variation in the change to individual pay grades, and,
BE IT FURTHER RESOLVED that the Association’s benefits be changed to increase the employer contribution to medical insurance by 6.8%, the life insurance plan be revised to increase the coverage levels for the employee spouse and dependent children and to accept the increased cost for the Association’s pension plan.
A motion was duly made, seconded and approved to meet in Executive Session to discuss the General Manager performance and salary review.
Upon reconvening in regular session and upon motion being duly made and seconded, the following resolution was unanimously adopted:
RESOLVED that the General Manager salary be increased by 4.5% and the General Manager be provided the same benefits approved for all employees.
There being no further business, the meeting was recessed until such time as may be necessary to reconvene for the purpose of acting on unfinished business as may properly come before the Board.
Secretary
APPROVED:
Chairman of the Board
