Yampa Valley Electric Association

 

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  October 19, 2007 for the regular meeting. 

The Chairman reconvened the meeting of September 21, declared all business was concluded and upon motion being duly made and seconded, the September 21, 2007 meeting was adjourned. 

The Chairman called the October 19, 2007 meeting to order.

Upon calling the roll, it was reported that the following directors were present: Dean Brosious, Peggy Espy, Bill Haight, Sam Haslem, Pat McClelland, Scott McGill, Chuck Perry, Jim Simos and Pud Stetson, being all the directors. 

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.  Misters Brosious, Stetson and Perry all welcomed Mr. Haslem back from his medical absence.  Mr. Haslem commented on his absence and thanked the Board for their flowers, visits and support.  Mr. McGill asked whether the door should be closed to the board room.   Directors were assured that the employees would show any visitors to the meeting room and the closed door provided quiet from the activity in the hallway and area next to the board room.

Mr. Vaillancourt presented the safety report for the month of September.  He stated there were no personal injuries in the month.  He stated the vehicle accident that occurred in early September was reviewed at the previous month’s meeting.  Upon motion being duly made and seconded, the following resolution was unanimously adopted:

            RESOLVED that the safety report be accepted.

Mr. Covillo discussed the Caring Consumers Foundation established by the YVEA Board of Directors.  He reviewed the bylaw requirement for two year director appointments and the identification of the YVEA Board Vice Chairman as a member of the Caring Consumers’ Board.  Directors discussed the difficulty in recruiting and retaining outside directors to Caring Consumers and considered removing the term limit for directors of the foundation.  Directors also concurred that the YVEA director appointment to the Board could be any current director and need not be the Vice Chairman by definition.  Upon motion being duly made and seconded, the following resolution was unanimously adopted:

RESOLVED that the Bylaws of the Caring Consumers Foundation be amended to delete the term limits of appointed directors and to delete the requirement that the YVEA director appointment be the Vice Chairman of the Board, and,

BE IT FURTHER RESOLVED that the Bylaws of the Caring Consumer Foundation allow reappointment of directors and require a current YVEA director to serve on the Caring Consumers Board.

Mr. Covillo discussed power plant issues.  He reviewed the status of the 2 Elk Generation project and discussed his attempts to identify a transmission path for delivery of power from the project or to secure a displacement agreement with PacifiCorp.  He stated the E3 engineer group was working on the transmission path as part of their due diligence.  Mr. Covillo reviewed his conversations with an attorney of PacifiCorp, an independent evaluator and a representative of the Utah PUC.  He stated he sent correspondence to the Utah PUC outlining YVEA’s position that PacifiCorp has the transmission path to deliver power from Hayden and Craig Station, that PacifiCorp is selling that power on the open market and that PacifiCorp’s removal of transmission charges from their delivery would be good for the customers.  Mr. Covillo said his opinion was that Pacific does not have an RFP conflict in discussing the displacement with YVEA but that he did not initiate a complaint that could be raised over the issue. 

Mr. Covillo reviewed the transmission path that is being investigated by E3.  He outlined the possible route and explained the PacificCorp, WAPA Loveland, WAPA CRSP and Xcel wheeling charges that would increase the cost of power.

Mr. Covillo outlined the work on the asset agreement and participation agreement.  He stated the attorneys, Mr. O’Neil and associates and Mr. Sharp, provided their comments which were incorporated in a revised document and sent to 2 Elks.  Mr. Covillo stated a telephone conference with the 2 Elks attorneys was brief with little negotiation.  The attorneys for CoBank got involved and they issued a draft to CoBank of items that must be resolved.  Mr. Covillo said those items were reviewed with all YVEA involved attorneys and another revision will be sent to the 2 Elks attorneys.  Mr. Covillo reported some of the items noted by CoBank will be required for the deal to go forward and gave examples of items that must be corrected.  Mr. Covillo said he hoped to have documents at this meeting but the conference call was scheduled for the following week to prepare the revised document.  Mr. Covillo reported certain of the items of negotiation will be a business decision and the Board must consider the business risk or authorize the General Manager to make the business risk decisions. 

Mr. Covillo noted that all involved attorney offices are in Washington, D.C. and they will attempt to meet there to negotiate the document.  The Board will then have the document for review and approval.

Mr. Covillo stated the independent engineer due diligence must provide a great deal of analysis yet to the attorneys for their review.  He said they are examining a great number of points.  The engineer report is due in the next two to three weeks.  He reiterated the engineers’ charge and bank requirement regarding delivery of the power.  Mr. Covillo provided additional comments on the transmission path and its possible affect on the power cost.

Mr. Stetson stated the negotiations to be held in Washington, D.C. with all attorneys are still preliminary to Board approval of other issues such as path, price, etc.  Mr. Haight stated the business risk discussion needs to be held in a meeting with all time necessary to address the issues.  Mr. Covillo stated that meeting can be held with the Association’s attorneys on line to answer director questions.

The meeting recessed at noon for a lunch break.

The meeting was reconvened at 12:35.

Mr. Covillo discussed Xcel issues related to negotiation of the REC’s.  He said the latest document proposes issuing YVEA REC’s by the end of the year.  He said the cost will not be known until April or May of 2008, with the charges to be paid in installments.  He said they are working on language to define the payment method, but the Association will get all REC’s from 2004 forward.  Mr. Covillo reviewed how REC’s work and what YVEA may be able to offer customers.  Mr. McGill asked about REC’s, the delivery of green power and the macro picture for those who participate.  He said he is getting questions from interconnection customers about our policy on who gets their REC’s.  Mr. Covillo said that matter would be discussed later in the meeting with the proposals in Advice Letter 43.  Mr. Covillo further explained REC’s and YVEA’s green energy requirement.

Mr. Covillo presented Mr. McGill his certificate for completion of the Credentialed Cooperative Director program.

Mr. Covillo reviewed a meeting held earlier in the week with a consultant who is working on the energy efficiency projects of the South Routt and Hayden school districts.  He said the firm is working to replace the boilers with heat pumps.  The Governor has asked the local utilities be contacted to request a special rate or funding for part of the school improvements.  Directors held lengthy discussion of the request and then tabled the matter for future consideration.

Mr. Covillo reviewed the MUAC meeting held earlier in the week with the City of Steamboat Springs.  He reported the various topics discussed were the City’s interest in the possible move of the YVEA headquarters building, YVEA rates, the undergrounding projects in downtown Steamboat Springs and utility issues related to the 700 LLC development west of Steamboat.  Mr. Covillo informed the City representatives that YVEA is concerned with the density of that project and the electric infrastructure’s need for a substation and transmission line.

Mr. Covillo reviewed the NERC matter reported at last month’s meeting.  He reviewed YVEA’s required registration with WECC and reported he filed an exemption request for YVEA.  He reviewed the timeline for approval and appeal of the request and stated that no response had been received from WECC.

Mr. Covillo discussed the CREA net metering bill to be proposed.  He said the CREA managers held a meeting to redraft the language for the CREA board’s review at their next meeting.  He said further discussion of net metering would be held with Advice Letter 43 later in the meeting.

Mr. Covillo reported Grand Valley Rural Power will request financial assistance at CREA for defense of their PUC hearing regarding their line extension policy.  Mr. Covillo reviewed why the issue is of importance to all cooperatives in the state.  If assistance is approved at CREA, the member systems would receive a special assessment.  Mr. Covillo stated that it was also suggested the CFC Integrity Fund may be another funding option.  Mr. Covillo reminded that he will testify in support of Grand Valley and stated he feels the issue is one we should support.  He asked the directors to give Mr. Haslem, YVEA’s representative on the CREA Board, some direction as to how much financial support we would be willing to provide.  Following discussion of the matter, directors gave Mr. Haslem direction as to how much financial assistance they could support.

Mr. Covillo stated the 2008 budget process will soon begin and asked directors if they wish to schedule a board retreat in the month of March.  Directors concurred that they would hold a retreat.

Mr. Simos presented the report of Paradigm Services.  He discussed the financial and management issues of concern at Paradigm.

Mr. Covillo stated that there was nothing new to report at BTA Associates.

Ms. Uttech presented the KPA report for the third quarter of the year.  Directors asked questions about the number of dig-ins that occurred, YVEA’s policy for handling them, the state regulations and what might be done to address the problem. 

Mr. Covillo reported his attendance at the CREA meeting.  He reviewed the net metering discussions earlier in the meeting.  Directors who attended the CREA Semi-Annual Meeting discussed the presentations of that meeting.  Mr. Perry asked for the Climate Action Panel’s recommendations to the Governor.  Mr. Covillo said he would provide it to the directors when it becomes available.  Mr. McClelland discussed the climate change focus and Mr. Stetson reviewed the need for education to customers. 

The Western United report was presented by Mr. Haight. 

Mr. Brosious served as Chairman of the Policy Committee meeting held earlier in the day.  He reviewed all policy changes and corrections recommended by the committee.  The Association Mission Statement needs correction of a typo only.  Policy 1-2 will be changed to delete the 1:00 p.m. start time for board meetings and to replace it with language that the start time will be specified on the agenda.  Policy 1-4 will correct language in the General Manager’s authorization to sign contracts and contracts for consumer services.  Policy 1-6 will change the language to authorize the General Manager to select consultants with the advice and counsel of the Board of Directors.  Policy 1-7 will change the director accident insurance to director AD&D insurance.  Board policy 1-10 will state the change in attorney compensation is effective in January of each year.  Board Policy 1-11 noted the execution of contracts and agreements for electric service as a director duty; this is being moved to policy 1-4 as a duty of the General Manager.  The committee considered the Association’s EMF policy and this topic will be moved to discussion at the director retreat.  The committee also noted the need to appoint a new Secretary of the Association in December.  Policy 3-3, General Funds, requires a word change only to clarify that general funds can be used to make plant investments.  The Capital Credits and Equity Management Plan, Policy 3-5, needs only a word change from CFC to other lenders.  Policy 5-8, Interconnection with Qualifying Facilities, needs revision to delete the reference to PURPA and substitute reference to the Colorado Revised Statutes.  Board Policy 7-7 will be changed to clarify a retiree’s participation in the Association medical insurance plan will cease at the retiree’s eligibility for Medicare enrollment.  The committee considered a draft of board policy for procedure if the Association receives an acquisition offer.  That matter was referred to the Association attorney for his review.   Mr. Brosious made the motion to approve all policy revisions as recommended by the committee.  Upon being seconded, the following resolution was unanimously adopted:

RESOLVED that the Association’s Mission Statement and Board Policies 1-2, 1-4, 1-6, 1-7, 1-10, 1-11, 3-3, 3-5, 5-8 and 7-7 be revised in the manner recommended by the Policy Committee and discussed in this meeting.

Directors were given worksheets to use in identifying whether their personal policy manuals are current. 

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.

Mr. Covillo presented Advice Letter 43.  On Sheet No. 30, the recommendation is to change the rate of payment for the excess power delivered to the Association from a Customer Generator, change the definition of Availability and change the conditions of service to comply with PUC regulations.  Mr. Covillo explained the change to Sheet No. 87 to add language requiring interconnected facilities to comply with provisions of interconnection standards and insurance requirements as defined by the Colorado Revised Statutes and to define “Net Metering”.  The Board held lengthy discussion of the proposals for Sheets 30 and 87 which will change the Association’s rate and interconnection rule to true net metering.  Revision to Sheet No. 58 was amend the terms of payment, paragraph d., to require cash or certified fund payment on checks and bank drafts that have been returned unpaid.  After review of all items and upon motion being duly made and seconded, the following resolution was unanimously adopted:

RESOLVED that Advice Letter 43 be approved.

Directors renewed their CARE/ACRE memberships.  Directors also made donations to their flower fund.

Mr. Simos and Mr. Stetson stated their comments regarding the Region VII meeting were presented earlier.  The meeting focused on global warming with a theme of Striking the Right Balance.

The Chairman called for unfinished business.  Mr. Haslem asked if board minutes should note the reason for director absence in the list of attendees.  Ms. Uttech responded to the question.

The Chairman called for new business.  Mr. McGill noted his receipt of e-mail from the City’s green team.  He reported the wind station installed at the Sangre de Cristo cooperative building and asked if this was something we’d be interested in.  Mr. Covillo noted that some of the Association’s customers are more interested in solar installations than wind.  He said the project at Sangre de Cristo is a demonstration project.  The Board discussed how YVEA might present demonstration projects in the future.

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