December 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 11:10 a.m. on December 21, 2007 for the regular meeting.
The Chairman reconvened the meeting of November 16, declared all business was concluded and upon motion being duly made and seconded, the November 16, 2007 meeting was adjourned.
The Chairman called the December 21, 2007 meeting to order.
Upon calling the roll, it was reported that the following directors were present: Dean Brosious, Bill Haight, Sam Haslem, Pat McClelland, Scott McGill, Chuck Perry, Jim Simos and Pud Stetson, being all the directors except Peggy Espy, who was absent.
The Chairman called for public comment. It was noted that Rodger Steen requested to address the Board during the comment period to ask that YVEA consider a surcharge to rates for the benefit of undergrounding service lines. Mr. Covillo stated that Mr. Steen called to ask if he could speak to the Board at 1:00 p.m. rather than at the start of the meeting. Mr. Covillo said he would recommend the time change. The directors concurred.
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.
Director comments were presented. Mr. Brosious discussed a news article that reported Sierra Club issues with the Two Elks Project not being started timely in accordance with the permit requirements. Mr. McGill discussed his change to CFL’s in his home and asked questions about the spectrum of light given by the bulbs. Mr. Haslem reviewed his utility bill from another cooperative and discussed their minimum charge. Mr. Perry commented on carbon footprint legislation. Mr. McClelland discussed the Xcel plan to close two coal-fired plants and the RE magazine article on the national move to scrap construction plans for coal-fired plants. Mr. Stetson shared an article from the internet that advises customers of how to tamper their meters.
Mr. Vaillancourt presented the safety report for the month of November. He stated there was one reported elbow sprain that did not result in lost time. There were no vehicle accidents. Upon motion being duly made and seconded, the following resolution was unanimously adopted:
RESOLVED that the safety report be accepted.
Mr. Covillo reported his attendance at the CREA Managers’ Meeting. He reviewed the bills to be introduced at the next legislative session. He discussed the Climate Change Bill with a proposed tax to be focused on electricity. He said there may be efforts to take the item to a ballot initiative. Mr. Covillo discussed the net metering bill and the managers’ meeting with Senator Jim Isgar from southern Colorado who will carry the bill. Mr. Covillo gave an update on the Grand Valley case. He reported the administrative law judge who heard the testimony is familiar with line extension policy. He said he testified during the two day hearing. Mr. Covillo discussed long range planning with the directors and its implication in the immediate case. Mr. Covillo also discussed the copper theft being suffered by some of the Colorado cooperatives. He said there may be a proposal for more severe penalties but the prosecution of these cases has been most difficult.
Mr. Covillo stated the Renewable Energy Credit agreement was received from Xcel. The agreement will transfer REC’s from YVEA’s purchase of renewable power since 2004. The Association will receive enough credits to achieve the required renewable energy purchase percentage. Mr. Covillo reviewed possible changes to the YVEA wind power program for both the sale and rate of the energy. Mr. Covillo also discussed the YVEA notice to customers of a pending Xcel rate case which may increase the 2008 retail rates. He reviewed some options for change to YVEA’s rate structure. Directors held lengthy discussion of REC programs.
Mr. Covillo stated the December 3 meeting for settlement negotiations of the Xcel rate case did not occur. He said the Association has not yet received the data for review. The information is now due. If not received, Mr. Covillo said the January 4 meeting will need to be cancelled to give the Association adequate time to review the matter. Mr. Covillo said he believes Xcel will file February 1, but if no data is available, YVEA may file against Xcel for failure to comply with our contract. The requirement is a 45 day review of the data before implementation. Mr. Covillo stated he expects a $1 million dollar increase in the Association’s cost of power. He said he is working with Holy Cross Energy on the projections.
The meeting recessed at noon for a lunch break.
The meeting reconvened at 12:50 p.m.
Mr. Covillo presented the generation project report. He stated there would not be a displacement arrangement with PacifiCorp to deliver power to the Association. He said transmission paths are being reviewed and there is a possibility of power swap with Xcel. Mr. Covillo stated the Wyoming Transmission Authority is working on proposals for movement of power in Wyoming. He said the Association can pay to have these paths evaluated. Mr. Covillo said Two Elks has been helpful in attempts to identify a delivery path and they have shown renewed interest in continuing negotiations of a Participation Agreement and Asset Purchase Agreement. Mr. Covillo proposed the Association continue working with the lawyers to prepare the legal documents. He said he expected that legal work will not cost more than another $50,000 at this time but does not know the cost to explore a transmission path. He suggested we hold off referring the matter to OASIS until there are further talks with Xcel and the Wyoming Transmission Authority. Directors discussed the question of future coal plant development in the current climate. They discussed how a new transmission path may open up more options for future wholesale power purchase. Mr. Covillo said the transmission study may be another $50,000 expense. Mr. Brosious questioned Pacific’s sale of power out of Craig Station. Mr. Covillo responded that the commercial power marketing department informed him the power is sold.
Directors returned to the public comment agenda item. Mr. Rodger Steen joined the meeting and thanked the Board for accommodation of his time schedule. He reviewed the bylaw mission statement to present low cost power. He asked the Board to consider adding consideration of aesthetic impact to the mission statement. He said he believes the customer base is now interested in visual impact, particularly of overhead lines. He said many believe that besides power, there is value to the aesthetics because that is the reason people live here. He said he believes rock bottom price is not the only customer concern. Mr. Steen said his personal work with YVEA field representatives lead him to believe the policies and principles are still price only driven. Mr. Steen asked that the Board only consider his remarks, that he did not have a proposal to implement, but asked the Board to discuss the philosophy. Mr. Steen also asked how he might help advance the discussion as he would welcome an effective way to examine the idea.
Mr. Sharp discussed a previous similar situation at Stagecoach with the outcome determined by the regulatory body. Mr. Steen questioned how he might handle the matter in an existing area for change to existing facilities. He said the homeowner group came with interest in underground lines and would pay for it. Mr. Sharp suggested that the appropriate governmental group needs the control. Mr. Steen asked whether a different pole design concept is something YVEA could consider or is that not on the table? Mr. Covillo explained the Association’s policy that the costs for these changes shouldn’t be a burden to other customers. Mr. Steen thanked the group for their consideration and time.
The Board returned to the published agenda and continued discussion of the generation project. Directors discussed long range power supply issues and the carbon footprint issues that will probably be addressed by the next President. Directors concurred that the matter should be a topic of discussion at their next Board retreat. It was reported that Deseret has a 100 MW plant proposal with a lawsuit against its construction. Directors held further discussion of issues surrounding carbon, coal production and power supply.
Directors again asked the cost of the transmission path study by OASIS. Mr. Covillo estimated $50,000. Directors asked whether we should proceed so we can have the data; why delay that and if needed, we would only have further delay. Mr. Covillo said he would find out how long the Association would be in the queue for an OASIS study. Mr. Haight said he thought there were other items Mr. Covillo planned to explore before we look at OASIS. Mr. Covillo said he thought he could answer those questions before the next meeting.
Mr. Covillo reported receipt of a letter to YVEA with an offer to acquire YVEA’s interest in Paradigm. The letter was a letter of intent only. Mr. Covillo reviewed the offer letter terms. Mr. Brosious asked the amount of YVEA’s investment. Mr. Covillo stated there was $840,000 with no retained earnings. Directors said they were not interested in losing control of the subsidiary for a subordinated debt. Upon motion being duly made and seconded, the following resolution was unanimously adopted:
RESOLVED the offer to acquire YVEA’s interest in Paradigm Services is declined.
Mr. Covillo presented a new document for the Association’s Deferred Compensation Plan. The revision presented is a restatement of the plan to comply with IRS regulations and renames it the Executive Compensation Plan. Upon motion being duly made and seconded, the following resolution was unanimously adopted:
RESOLVED that the President and General Manager is authorized to execute the documents for restatement of the Association’s Deferred Compensation Plan, now to be known as the Executive Compensation Plan.
The Board considered appointment of the Secretary of the Association, due to Ms. Uttech’s retirement. Upon motion being duly made and seconded, the following resolution was unanimously adopted:
RESOLVED that Robert Miler be appointed Secretary of the Association.
Directors considered their reservations for the NRECA Annual Meeting.
The meeting was recessed from 2:15 to 2:20 for a break.
Directors returned to the meeting and Mr. Vaillancourt presented the 2008 Construction Plan.
Mr. Simos was Chairman of the Finance Committee meeting held earlier in the day. He presented brief comments of the committee discussion and asked Mr. Covillo to review the 2008 Work Program and Budget. Mr. Covillo presented a detailed review the projections used in the budget, the budget highlights and the additions to plant. Mr. Simos reported the committee’s recommendation to approve the work program and budget as presented. Upon motion being duly made and seconded, the following resolution was unanimously adopted:
RESOLVED that the 2008 Work Program and Budget be, and is hereby, approved.
The Board considered the write-off of uncollectible accounts. Upon motion being duly made and seconded, the following resolution was unanimously adopted:
RESOLVED that the uncollectible consumer energy accounts in the amount of $58,524.93 and uncollectible accounts other in the amount of $15,068.52 accrued from October 2006 to October 2007 as listed and presented at the meeting, be written off the books of the Association.
Mr. Covillo said there was no report of BTA. The expected offer for lease or purchase of certain of the licenses was not been received.
Mr. Simos presented the report of Paradigm Services. He said the financials are improving. Mr. Covillo discussed the line of credit with Wells Fargo as guaranteed by YVEA and Holy Cross Energy, with the Gunnison County Electric guarantee back to HCE and YVEA. He said Wells Fargo has asked we renew the credit line and the new document is for six months. Upon motion being duly made and seconded, the following resolution was unanimously adopted:
RESOLVED that the President and General Manager is authorized to execute the Wells Fargo line of credit as discussed in this meeting.
Mr. Haslem presented the report of CREA.
Mr. Haight gave the Western United report.
Mr. Covillo and Mr. Miller presented the financial and statistical reports for the month of November. 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 presented lengthy comments about the Deseret Plant.
The Chairman called for any new business. Mr. Covillo reported a change to the Region VII meeting dates for 2008. Mr. Haslem presented his thanks to Ms. Uttech for her years of service with the Association and her time as Secretary.
Mr. Stetson inquired of the Association’s surge protection program. He asked why it is not available to businesses. Mr. Chappell explained the manufacturer’s warranty is not available for commercial properties. Following discussion, it was concluded the surge protectors could be offered to businesses with the customer’s understanding that there is no warranty for their installation.
Mr. Haslem reported his attendance at flight training.
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
