SNOHOMISH COUNTY PUBLIC UTILITY DISTRICT

Transcription

1 SNOHOMISH COUNTY PUBLIC UTILITY DISTRICT Regular Meeting December 5, 2017 The Regular Meeting was convened by Vice President Kathleen Vaughn at 10:00 a.m. in the Commission Meeting Room. Those attending were Tanya Olson, President; Sidney Logan, Secretary; CEO/General Manager Craig Collar; General Counsel Anne Spangler; Assistant General Managers Tom DeBoer, John Haarlow, Glenn McPherson, James West, and Brant Wood; Chief Information Officer Dean Galvez; other District staff; members of the public; Clerk of the Board Melissa Collins, and Deputy Clerks of the Board Jenny Rich and Lela Wall. * Items Taken Out of Order **Non-Agenda Items 1. CEO/GENERAL MANAGER BRIEFING AND STUDY SESSION A. Updates 1. Media. Communications and Marketing Director Julee Cunningham shared the District's Live Wire holiday video segment and reported on District related articles. A brief discussion took place regarding responses to Opinion Letters in the Everett Herald. Commissioner Vaughn suggested that District responses be included in the District's bill stuffer or as a guest opinion in the Everett Herald. 2. Other. Senior Manager Distribution & Engineering Shared Services Frank Castro provided information for a requested six-month interim extension to an existing easement agreement with the City of Lynnwood (City), while negotiations continue for a new agreement. The agreement grants the City access to a certain recreational trail, in a portion of the power line corridor property of the District, commonly known as the PNT Right-of Way. The resolution will be presented for Board consideration during the afternoon session. B. Recent Audit Activity Senior Manager Controller and Auditor Julia Anderson provided the annual summary of the District's various audit activities. Discussed were the reasons that the District transitioned back to using the local firm Moss Adams as its auditor. Ms. Anderson mentioned storm reimbursement amounts that the District was to receive from the Federal Emergency Management Agency (FEMA), resolved audit items, and concluded with other programs selected for audit, such as the compliance audits for renewables and conservation targets, stating the District was on track with those audits.

2 Regular Meeting 2 December 5, 2017 C. Low-Income Assistance An update on the District's Low-Income Assistance Program was provided by Senior Customer and Energy Services Program Manager Nathan Heber, who stressed the impact of public power on the District's community and the ways that the community comes together to assist those in need. A synopsis of the customer donation funded Project PRIDE (Providing Relief for Individuals Dependent on Energy), administered by St. Vincent de Paul (SVPD), included mention of a planned reserve fund downward adjustment and agency pledges. The close working relationship between the District and Snohomish County Energy Assistance was highlighted and examples were provided of the District coordinating with that agency to assist customers and promote the County's free low-income conservation programs. A background was provided of the Rate Discounts program, which has income thresholds and discount percentages established in the District's Customer Service Regulations passed by the Board. The District's program was compared with programs offered by other utilities. The District's average benefit per participant is $451. Mr. Heber concluded by emphasizing the positive community impact and assistance provided by the Low-Income Assistance Program. Kathleen Friend and Jennifer Young from the Snohomish County Human Services Office of Weatherization and Energy Assistance (OWEA) provided handouts at places, and made a part of the packet. Ms. Young spoke about the current funding status and the needs of their programs. Discussion occurred about whether excess Project PRIDE reserve funds would be able to be accessed to assist with OWEA project funding, in the event that the OWEA budget funding is not passed when needed. Commissioner Vaughn requested that staff come up with ideas regarding those funds and how they could be utilized. D. Credit Rating Agency Overview Assistant General Manager Finance & Treasurer Glenn McPherson provided a presentation about credit ratings, meant to serve as an introduction to an upcoming discussion of the District's cash reserves. The District receives credit ratings when bonds are issued; however, two of the three primary credit rating agencies also refreshed their Electric System ratings for Those bond-rating grades, and the ways the agencies arrive at their findings, were reviewed. Final thoughts were that, even though an important measurement of the District's financial health and outlook, not all of the policies and operations should surround the importance

3 Regular Meeting 3 December 5, 2017 of a rating. Strong cash reserves need to be weighed against other operational and business requirements. Mr. McPherson said that staff performed an extensive review of District cash reserves and the current policy. The next steps included a District Cash Reserve Policy presentation on December 19, 2017 and an updated resolution to be brought to the Board during the first quarter of Credit rating agency updates are expected in spring 2018 and the next planned sale of revenue bonds will be in Discussion occurred regarding the size of the District's reserves and the need to make sure that there is a justification for each, while also acknowledging any potential risk of lowering the reserve amounts. The Regular Meeting recessed at 11: 17 a.m. RECONVENE REGULAR MEETING The Regular Meeting was reconvened by Vice President Kathleen Vaughn at 1 :30 p.m. in the Commission Meeting Room. Those attending were Tanya Olson, President (telephonically); Sidney Logan, Secretary; CEO/General Manager Craig Collar; General Counsel Anne Spangler; Assistant General Managers Tom DeBoer, John Haarlow, Glenn McPherson, James West, and Brant Wood; Chief Information Officer Dean Galvez; other District staff; members of the public; Clerk of the Board Melissa Collins, and Deputy Clerks of the Board Jenny Rich and Lela Wall. * Items Taken Out of Order **Non-Agenda Items 2. RECOGNITION/DECLARATIONS A. Employee of the Month for December - Julie Johnson Julie Johnson was recognized as Employee of the Month for December. 3. COMMENTS FROM THE PUBLIC Lora Cox, Gold Bar, discussed the Jackson Hydro Project; the licensing of the Sunset Falls Fish Project, and the District's "The Wire" newsletter. Pete Rainey, Gold Bar, provided a handout at places, and made a part of the packet. Mr. Rainey addressed the Sunset Falls Fish Project and the information regarding demand and current resources presented in the October 2017 update to the District's Integrated Resource Plan (IRP).

4 Regular Meeting 4 December 5, CONSENT AGENDA A. Bid Awards, Professional Services Contracts and Amendments Public Works Contract Award Recommendations Over $25,000: Request for Proposal No. Docl with Kemp West, Inc. Formal Bid Award Recommendations $60,000 and Over: Request for Quotation No with Myers Power Products, Inc. c/o Gore Electric Company, Inc. Professional Services Contract Award Recommendations $200,000 and Over: Miscellaneous Contract Award Recommendations $200,000 and Over: Purchase Order No with City of Seattle Cooperative Purchase Recommendations: Contracts: Amendments: Sole Source Purchase Recommendations: Emergency Declarations, Purchases and Public Works Contracts: Purchases Involving Special Facilities or Market Condition Recommendations: Formal Bid and Contract Amendments: Professional Services Contract No with Van Ness Felman, LLP Miscellaneous Contract No with Open Access Technology International, Inc. Miscellaneous Contract No with Silver Spring Networks, Inc. Public Works Contract No. CW with Asplundh Tree Surgery Co. Contract Acceptance Recommendations: B. Consideration of Certification/Ratification and Approval of District Checks and Vouchers A motion unanimously passed approving Agenda Item 4A - Bid Awards, Professional Services Contracts and Amendments; and 4B - Certification/Ratification and Approval of District Checks and Vouchers.

5 Regular Meeting 5 December 5, PUBLIC HEARING A. Continue Public Hearing on the 2018 Proposed Budget Vice President Vaughn opened the public hearing. Assistant General Manager Finance & Treasurer Glenn McPherson presented this fourth installment of the 2018 proposed budget hearings, as an additional opportunity for the Board to consider any changes. Staff suggested two changes to the Electric System Budget: (1) Re-budget North County Local Office project costs, that were put on hold while decisions continued for scope and overall project budget. The re-budgeted funds are needed for continuation of the Micro grid construction/earthwork in 2018; and (2) Update assumption for use of 2015 Bond Proceeds for Capital project expenditures in 2017, which will utilize more than expected use of 2015 Bond Proceeds; there will be less proceeds available in 2018 than originally budgeted. Recommended changes to the Water System Budget included updated growth and rate assumptions to match assumptions in the Water Model and Rate Hearings. The retail rate increase assumptions would go down from 3 percent to 1.8 percent, increase in average customer growth projections are from 1.3 percent to 2 percent, and minor impacts are expected for both taxes and purchased water. GFC revenues are expected to increase, due to increased growth expectations. A resolution will be brought forth at the December 19, 2017, meeting for the adoption of the 2018 budget. A motion unanimously passed continuing the public hearing on the Proposed 2018 Budget to December 19, 2017, at 1:30 p.m. in the District's Commission Meeting Room at 2320 California Street in Everett. B. Proposed Two-Year Conservation Targets for the Period and a 10-Year Conservation Potential Estimate for the Period for the District to Comply with Requirements of the Energy Independence Act Vice President Vaughn opened the public hearing. Senior Manager Power Supply Anna Berg stated that the Integrated Resource Plan (IRP) Outputs were the focus of this presentation and that the IRP was still being drafted, with staff intending to bring more updates to the Board in early 2018 for additional input. An Integrated Portfolio Approach was used to develop the 10-Year Conservation Potential, which was different from what was done in the past. The process was reviewed, including information about how the District's technical achievable potential was assessed.

6 Regular Meeting 6 December 5, 2017 Ms. Berg advised of an error in the conservation data presented at the prior briefing, which affected the allocation of costs and technical achievable potential in the bundles used in the integrated portfolio analysis; the CADMUS Group that conducted the District's 2017 Conservation Potential Assessment (CPA) needed to adjust the cost side of conservation. When staff ran through the model, with the updated data, conservation potential cost less, which reduced the District's portfolio in the IRP. The total cumulative 20-year technical achievable potential did not change; however, there was a slight improvement in the ratio between the annual savings to winter on-peak savings. Ms. Berg explained how the analysis was updated, stating that the overall the mix of resources did not change, but the amount of conservation did. Senior Utility Analyst Garrison Marr compared the prior CADMUS results with the updated results, in order to show what changed, and explained how those changes affected the Integrated Portfolio Approach that staff took. The results being that emissions have gone down, costs have decreased, and the need to add something on the supply side to balance the District's portfolio has been pushed back further into the future. Mr. Marr noted that the changes were, on a whole, fairly positive. Manager Market Segments Jessica Mitchell discussed the updated 10-Year Conservation Potential and the two year targets, which will be submitted to the Department of Commerce and require Board adoption. The results of important changes to conservation were mentioned, which were an outcome of the new measures in the Northwest Power & Conservation Council's Seventh Power Plan. Ms. Mitchell explained how District programs, like lighting, would be affected, and stated that there will be many new measures entering the District's portfolio. Also mentioned was how programs will need to be transitioned to target the winter peak demand reduction, that the District needs and to shift the focus to new technologies. The District's proposed 2-Year Biennial Conservation Target of average megawatts (amw), was a slightly higher target than in 2014 and 2016 and used the District's actual Distribution Busbar, as opposed to the Bonneville Power Administration (BPA) Regional Busbar that was used in the past. The 10-Year Potential was average megawatts (amw), which was a modest increase since October. The next steps include a public hearing on December 19, 2017, to consider adoption of the Biennial Target and 10-Year Conservation Potential Estimate; file those adopted items with the Department of Commerce by December 29, 2017; finalize and publish the IRP document; and return to the Board with additional IRP briefings in early The following citizen spoke: Pete Rainey, Gold Bar, inquired whether the changes mentioned would affect a graph (of the annual net position) from the October IRP presentation. Ms. Berg responded that the

7 Regular Meeting 7 December 5, 2017 lines that show the different scenarios may be affected slightly, but as the focus of 2017 IRP has been the growing capacity deficit, that graph does not tell the full story. There being no further questions or comments from the public, Commissioner Vaughn closed the Public Hearing. 6. ITEMS FOR INDIVIDUAL CONSIDERATION A. Consideration of a Motion Accepting the 3rd Quarter 2017 Financial Conditions and Activities Monitoring Report A motion unanimously passed accepting the 3rd Quarter 2017 Financial Conditions and Activities Monitoring Report. B. Consideration of a Resolution Amending the District's Water Utility Service Rates and Establishing Periodic Review of Water Utility Charges A motion unanimously passed approving Resolution No amending the District's Water Utility service rates and establishing periodic review of Water Utility charges. C. Consideration of a Resolution Authorizing the CEO/General Manager to Execute an Interlocal Agreement with the City of Mountlake Terrace Regarding the Relocation and Undergrounding of Electrical Distribution Facilities Associated with the Construction of Phase I of the City's Main Street Reconstruction Project A motion unanimously passed approving Resolution No authorizing the CEO/General Manager to execute an Interlocal Agreement with the City of Mountlake Terrace regarding the relocation and undergrounding of electrical distribution facilities associated with the construction of Phase I of the City's Main Street Reconstruction Project. D. Consideration of a Resolution Authorizing the Interim Manager, Real Estate Services, to Execute an Easement Amendment of an Easement Previously Granted by the District in Favor of the city of Lynnwood that Allows the City to Operate, Repair, and Maintain a Recreational Trail in a Portion of the Power Line Corridor Property of the District Commonly Known as the PNT Right-of-Way Located in the City of Lynnwood, Snohomish County, Washington A motion passed approving Resolution No authorizing the Interim Manager, Real Estate Services, to execute an Easement Amendment of an easement previously granted by the District in favor of the City of Lynnwood that allows the City to operate, repair, and maintain a recreational trail in a portion of the power line corridor property of the District commonly known as the PNT Right-of-Way Located in the City of Lynnwood, Snohomish County, Washington.

8 Regular Meeting 8 December 5, COMMISSION BUSINESS A. Commission Reports Commissioner Logan and Commissioner Vaughn reported on a recent visit to the Culmback Dam Water Temperature Conditioning jobsite, and viewing of the tunneling progress. B. Consideration of Election of Commission Officers for the Year 2018 A motion unanimously passed electing Commission Officers for the year 2018 as follows: Kathleen Vaughn, President; Sidney Logan, Vice President; and Tanya Olson, Secretary. 8. GOVERNANCE PLANNING A. Governance Planning Calendar Commissioner Olson expressed interest in a briefing, in early 2018, on the District's Battery Storage projects. The Board concurred. B. Proposed 2018 Governance Planning Calendar There were no changes to the proposed 2018 Governance Planning Calendar. ADJOURNMENT There being no further business or discussion to come before the Board, the Regular Meeting of December 5, 2017, adjourned at 2:54 p.m. An audio file of the meeting is on file in the Commission Office and available for review.