November 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 November 16, 2007 for the regular meeting.
The Chairman reconvened the meeting of October 19, declared all business was concluded and upon motion being duly made and seconded, the October 19, 2007 meeting was adjourned.
The Chairman called the November 16, 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.
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 hereby approved.
There was no public comment.
Director comments were presented. Mr. Brosious commented on a mass mailing to customers in the Craig area by a firm selling their services to reduce energy costs. Directors asked Mr. McGill about his injury. Mr. Haslem commented on the news article about Xcel’s plans to close two coal plants and increase their renewables. Mr. McClelland commented on an article in the Steamboat Today about the need for more generation.
Mr. Covillo led the discussion of the Two Elks project. He reviewed the status of negotiations and gave all directors copies of documents produced to date. He also handed out the current e-mail from the weekly update. He said the negotiation has reached a standstill. He reported his attempt to get all parties together, preferably in Washington, D.C. where all attorneys involved are located. Mr. Covillo said he has been unsuccessful so far in arranging that meeting. He said there has not been any movement in the language of the documents in over a month. Mr. Covillo reviewed the CoBank update and said they are concerned. The engineering firm, E3, was hired for the due diligence on the project and is missing so many documents that they cannot prepare a report. The list of items needed for their analysis is long and some represent large omissions in the data. Mr. Covillo stated the engineer firm is pulled off of the project pending receipt of the necessary information. Mr. Covillo said the Two Elks group was supposed to get the information to E3 last Monday and it did not happen. Directors questioned why Two Elks would not produce the necessary information to proceed.
Mr. Covillo stated the issues are still not resolved regarding delivery or displacement with PacificCorp. He said he has not been able to get response or discussion with anyone at Pacific to review the possible displacement option. He said he spoke to the people he was referred to at Pacific but they were unable to assist. Mr. Covillo said he can continue to pursue the matter with the Utah PUC.
Mr. Covillo said that there has not been any movement in many areas. The due diligence is not done, the documents are not done and the delivery and/or displacement issue is not established. Mr. Covillo held lengthy review and discussion of the items of concern noted in the Steptoe/Johnson brief, most of which focused on the missing information and documents.
Mr. Covillo stated he expected to have more documents at this meeting but three to four weeks have passed with no response from Two Elks and that is unacceptable. Mr. Perry questioned the CitiGroup involvement with Two Elks. Mr. Brosious questioned the status of the bonds to be issued by Citi. Mr. Covillo stated they were not yet marketed. Mr. Stetson stated he saw no need for YVEA to push the issue. He said Two Elks need to produce and they currently appear to be unorganized if not unprofessional. Mr. Covillo said some of the documents supplied are the same documents that were marketed to Holy Cross Energy and YVEA approximately five years ago.
The meeting recessed at 12:05 for a lunch break.
The meeting was reconvened at 12:45.
Mr. Vaillancourt presented the safety report for the month of October. He stated there was nothing to report. There were no personal injuries, no vehicle accidents and no liability claims. Upon motion being duly made and seconded, the following resolution was unanimously adopted:
RESOLVED that the safety report be accepted.
The matter of an employee holiday gift was considered. Upon motion being duly made and seconded, the following resolution was unanimously adopted:
RESOLVED that each employee be presented a Christmas gift from the Association of $150.00, and,
BE IT FURTHER RESOLVED that each employee be given an additional $150.00 appreciation gift from the Board of Directors.
Mr. Covillo reviewed the Xcel rate filing. He first reported the status of the REC agreement, stating he believed the wording is negotiated but the agreement is not filed. He then reported a rate case to be filed on all wholesale customers by the end of the year. He said the YVEA contract requires 45 days’ notice for possible negotiation. He said the received notice did not give any rate calculations or explanation. Mr. Covillo told directors he believes the case is due to Xcel’s pollution control improvements. The Colorado PUC allowed Xcel 90% cost recovery from their retail customers and were directed to collect the remaining 10% from their wholesale customers. That will have to be filed at FERC. YVEA and Holy Cross Energy have already put the attorneys and consultants on notice that we want the case analyzed. Mr. Covillo said he received an e-mail from Xcel asking for meeting dates to discuss the case which may occur on either November 28 or December 3. Mr. Covillo said that YVEA will cost share the attorneys with Holy Cross Energy and Grand Valley Rural Power. He said Xcel wants to treat the discussion as confidential settlement agreements. He explained that we were under the impression that no rate case would be filed until 2010 or 2011 when the new Comanche unit comes on line. Mr. Covillo suggested that our normal press release in December regarding YVEA’s retail rate for the new year will need to note a possible rate change due to the Xcel case. He said we may want to revise YVEA’s rates and he expected to have better numbers today but they were not received. Mr. Brosious asked the effective date. Mr. Covillo responded the first quarter but that YVEA intervention could delay it for sixty days. Mr. McGill asked how we were led to believe no rate case would be filed. Mr. Covillo said that came from our previous discussion and negotiations. Mr. McGill asked if there was anything contractual. Mr. Covillo said no. Mr. Covillo explained that we have previously obtained decreases from Xcel’s rate cases when they filed for an increase. Mr. Covillo said he believed they owed us $150,000 in the last rate case and Xcel agreed to keep that in mind on the next negotiation. He explained that if we received a one million dollar rate increase, that represents 4%. He said he will bring the matter to the Board with a recommendation. He noted the increase to Tri-State members will be 13% next year bringing their wholesale rate to 6¢ or above.
Mr. Covillo discussed reservation reminders for upcoming meetings. He said NRECA delayed the registration for their annual meeting to December. He reported the NRECA Director Conference for the end of March, the NRECA Annual Meeting at the end of February and the CREA Semi-Annual Meeting to be held February 9-12 in Denver.
Directors were presented forms to update their beneficiaries for the director AD&D insurance.
Mr. Covillo reported the status of the WECC registration and requirements. He said YVEA filed an appeal and received notice that WECC agrees with YVEA’s position. YVEA will be delisted from the registration and will not have the WECC filing requirements.
Mr. Covillo reported the arrangements for a Board and staff dinner to be held following the December board meeting.
Mr. Covillo discussed the Wyoming PSC. He reviewed the previous discussion of cooperative deregulation from the Wyoming PSC which would have been a vote of members at the annual meeting. He said a similarly situated cooperative took the vote and the Wyoming PSC denied it on a timeliness issue. However, he said the ruling also made point that they can only grant deregulation of a cooperative incorporated in the State of Wyoming. It would therefore appear that YVEA will not be able to become deregulated in Wyoming at this time.
Mr. Covillo also reported receipt of an order from the Wyoming PSC requiring an increase in the rate paid on deposits to 6.31%. He recommended the Association’s rule be amended to comply and to state the Association will pay the deposit interest rate set by the Wyoming PSC. Upon motion being duly made and seconded, the following resolution was unanimously adopted:
RESOLVED that the General Manager is directed to file the rule change in Wyoming amending the Association’s rate of interest paid on deposits as discussed in this meeting.
Mr. Covillo presented the report of BTA Associates. He said BTA received notice from the party interested in lease or purchase of licenses that they expect to make a proposal in December.
Mr. McClelland presented the report of Paradigm Services. He reported the activities of the November 1 board meeting. He discussed the financial report and the new budget presented by the interim CEO. Mr. Covillo reported the resignation of the CFO and stated the auditor firm is acting on an interim basis to prepare the financial reports. He said the Board discussed the CEO position and goals for the company. He noted that YVEA can expect a rate increase for the Underground Locator contracts.
Mr. Haslem presented the CREA report. He said the main topic at the meeting was the Grand Valley Rural Power Lines case. He reported his vote against the special assessment for legal assistance in the case because is was in excess of the amount the YVEA Board authorized at the last meeting. Mr. Haslem discussed the net metering bill and said there was an executive session for personnel review. Mr. Covillo reported the preliminary budget shows a dues increase. He reported the expenses in the GVRPL case are in excess of the estimate discussed at the last YVEA board meeting. He said all systems must participate in the assessment approved at CREA. Upon motion being duly made and seconded, the following resolution was unanimously adopted:
RESOLVED that YVEA participate in the CREA special assessment in the amount approved by the CREA Board.
Mr. Haight presented the report of Western United. He said there was no meeting in November but reviewed the financial report received by mail. He reported the sales are down due to the housing market and economy but the corporation is still making margins.
The Chairman called for unfinished business. The Grand Valley Line Extension Case listed as unfinished business on the agenda was previously considered in the meeting. Mr. Covillo noted the omission of the financial and statistical reports from the agenda.
Mr. Covillo and Mr. Miller presented the financial and statistical reports for the month of October. Upon motion being duly made and seconded, the following resolution was unanimously adopted:
RESOLVED that the financial and statistical reports are accepted.
The Chairman called for any other unfinished business. Mr. Haslem asked the Board for comment about his vote for the CREA budget. Mr. Covillo responded to Mr. Haslem that his fiduciary responsibility on that Board is to CREA as a CREA director even though he is a YVEA appointee to that Board.
The Chairman called for any new business. Mr. McGill asked whether there has been a decision on the appointment of a new Secretary of the Association. Mr. Covillo responded that a Human Resources Manager has been hired and that Mr. Miller will likely get the Secretary duties.
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.
APPROVED:
Chairman of the Board
