MINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS OF UNITED POWER, INC. FRIDAY, NOVEMBER 15, 2013 GENERAL President Virginia Buczek called the regular meeting of the United Power Board of Directors to order at 9:03 a.m. on November 15, 2013. The meeting was held at the United Power Headquarters Building, 500 Cooperative Way, Brighton, Colorado. Present were Directors Bill Berens, Virginia Buczek, Tim Erickson, Bob Grant, Jim Jaeger, Beth Martin, Brian McCormick, Ursula Morgan, Rick Newman, Douglas Pryce and James Vigesaa. Chief Executive Officer Ron Asche and Executive Assistant to the Board Lee Roberts were also present. Others present for the meeting were staff members Dean Hubbuck, Kim Marsh, John Parker, Mitzi Rea, Bryant Robbins, Antelia Salazar-Ball, Myke Weis and Troy Whitmore. Director Berens gave the invocation and led in the Pledge of Allegiance. INVOCATION/PLEDGE None. ADDITIONS TO AGENDA AGENDA APPROVED A motion was made by Director Jaeger, seconded and carried to approve the Agenda as presented. CONSENT AGENDA MINUTES The October 18, 2013 Regular Board Meeting Minutes were included in the Board packet for review. Director Newman made a motion to approve the minutes as corrected. The motion was seconded and passed, approving the October 18, 2013 Board Meeting Minutes as corrected. 2014 BUDGET CEO Asche gave a presentation summarizing key aspects of the 2014 Operating and Capital Budgets and addressed Board questions. Director Martin made a motion, which was seconded, to adopt the Resolution Approving the 2014 Operating and Capital Budgets. During discussion, Director Newman made a motion, which was seconded, to amend the Resolution by adding a phrase in the second paragraph: and a realistic estimate of the associated costs. Following discussion, the motion to amend was approved. Director Grant made a motion, which was seconded, to amend the Resolution by moving the new added phrase to the end of the sentence in the second paragraph. The motion passed to amend the Resolution.
The motion to adopt the Resolution, as amended, approving the 2014 Operating and Capital Budget was then voted on and carried. RESOLUTION WHEREAS, the Chief Executive Officer and his Senior Management Team have developed and proposed an Operating and Capital Budget for calendar year 2014; and WHEREAS, the Board of Directors has reviewed said Operating and Capital Budget and has determined that it represents a realistic appraisal of work that should be accomplished in 2014 and a realistic estimate of the associated costs. NOW, THEREFORE, BE IT RESOLVED that said 2014 Operating and Capital Budget is hereby approved by the Board of Directors, and the Chief Executive Officer and his staff are authorized to carry out said Budget within the budgetary guidelines contained therein. REES LOBBYING AGREEMENT - - - - - - CEO Asche spoke about the proposed lobbying agreement and recommended that the board adopt the Resolution as presented. Director Jaeger made a motion, which was seconded, to adopt the Resolution Approving the Lobbying Agreement. Director Erickson made a motion, which was seconded, to amend the Resolution to include a bonus payment to Ms. Rees. The motion failed. Following discussion, the Resolution to Approve the Lobbying Agreement was voted on and carried. RESOLUTION WHEREAS, it is essential that United Power s voice be heard at the State Legislature and the Governor s office as issues arise which could impact United Power and its member-owners; and WHEREAS, issues such as renewable energy mandates, energy efficiency mandates, on-bill financing, feed-in tariffs, utility regulation amendments, and a variety of other issues may impact the members of United Power, Inc.; and WHEREAS, the Lobbying firm of Rees Consulting and Public Affairs, Inc. has a proven track record of providing excellent lobbying services for United Power for more than a decade; and WHEREAS, it is the Board s desire that United Power continue to retain this lobbying firm to represent it during the upcoming legislative session. NOW THEREFORE, BE IT RESOLVED that the Board of Directors of United Power, Inc. hereby authorizes the Chief Executive Officer to sign a lobbying Agreement with Rees Consulting and Public Affairs, Inc. for period December 1, 2013 through November 30, 2014. Note: Staff was directed to include the lobbying contract on the July 2014 Board meeting agenda for review and discussion. - - - - - - 2
EMPLOYEE CHRISTMAS BONUS CEO Asche discussed staff s recommendation to award a Christmas Bonus to all employees. Director Newman made a motion, which was seconded, to adopt the following Resolution Regarding Christmas Bonus. Following discussion, the Resolution was voted on and approved. RESOLUTION BE IT RESOLVED, that the Board of Directors of United Power, Inc. recognizes employees for their outstanding dedication and commitment to our mission over the past year. BE IT FURTHER RESOLVED, the Board of Directors hereby authorizes payment of a Christmas bonus to United Power s employees in the following amounts: Full-time employees hired prior to July 1, 2013, will receive $100. Full-time employees hired on or after July 1, 2013 will receive $50. Part-time employees hired prior to July 1, 2013 will receive $50. Part-time employees hired on or after July 1, 2013 will receive $25. - - - - - - POLICY C-28 After its review at the October Board Meeting, Policy C-28 Financial Goals was revised to incorporate changes and included in the Board packet for review. CEO Asche gave a brief summary of the changes. Following discussion, Director Newman made a motion, which was seconded, to approve Policy C-28 with various additional proposed revisions. That motion was voted on and failed. Director Berens made a motion to approve Policy C-28 as presented, and it was seconded. Following discussion, the motion to approve the final revised version of Policy C- 28 as presented in the Board packet was approved. Director Newman voted no, and asked to have his vote recorded. Director Grant left the meeting. CFC INTEGRITY FUND DESIGNATION CEO Asche explained the CFC Integrity Fund. CFC has submitted a request asking that we designate the use of the Integrity Fund to either (a) territorial integrity purposes only, or (b) regulatory, judicial, and legislative purposes in addition to territorial integrity purposes. During discussion Director Grant returned to the meeting. Director Newman made a motion to approve the designation of Integrity Fund to meet additional challenges as well as territorial integrity purposes. The motion was seconded and passed. Director Berens voted against the motion and asked to have his vote recorded. PROPOSED RATE CHANGES FOR 2014 CEO Asche gave a short background review about the comprehensive Cost of Service Study done last year to incorporate the effects of Tri-State s wholesale rate structure changes in our 2013 retail rates. He also gave a presentation regarding the new Cost of Service results and proposed rate changes for 2014. A memo and the presentation were distributed to the Board for review prior to the meeting. Mr. Asche and Dean Hubbuck addressed Board questions during the presentation. 3
CARBON VALLEY HELP CENTER The following visitors attended the meeting: from the Town of Firestone Kristi Ritter, Trustee Matt Holcomb, Trustee George Heath, Trustee Darrell Walsh and Trustee Paul Sorensen; from the Carbon Valley Help Center Fred Skates, Felicia Smith Graybeal, Sue Pilon and Gloria Walsh; and Rachel Flutcher, the executive director of the Carbon Valley Chamber. Following introductions, Bill Meier introduced the two guests who were making presentations, Matt Holcomb from the Town of Firestone and Fred Skates from Carbon Valley Help Center. Each of them spoke about their individual organization and how the generous gift from United Power for aid to victims of the September 2013 flood will help accomplish their goals of providing assistance to members of their community who are in need. Mr. Holcomb and Mr. Skates presented two thank you plaques to the Board, which were accepted by President Buczek. The Board recessed to lunch at 11:58 a.m. and the meeting reconvened at 1:02 p.m. PROPOSED RATE CHANGES FOR 2014 (continued) Mr. Asche and Mr. Hubbuck continued the presentation and answering Board questions. Final recommendations on retail rate changes for 2014 will be presented by staff at the December Board meeting. REPORTING OF COMPANY EXPENSES The Board discussed external reporting of Director per diem payments and expense reimbursements for attendance at Board meetings, conferences, community events, etc. This item will be placed on a Board meeting agenda in early 2014 for further discussion. CEO REPORT CEO Asche discussed his November 6, 2013 report, which was included in the Board packet for review. Included in his summary was the Safety Report. He described a recent accident that resulted in an injury to an employee. He also addressed Board questions. Mr. Asche also discussed the meeting he and Dean Hubbuck had with Tri-State regarding the 5% self-supply provision in the wholesale power service contract. He also gave an update on discussions with the Town of Frederick on future power supply service and O & M services. CFO REPORT CFO Parker reviewed his November 6, 2013 report, which was included in the Board packet for review, and addressed Board questions. EXTERNAL AFFAIRS REPORT External Affairs Director Troy Whitmore reviewed his November 6, 2013 written report and addressed Board questions. 4
ENGINEERING/RATES DEPT. REPORT Engineering-Rates Manager Dean Hubbuck reviewed his November 6, 2013 written report and addressed Board questions. POLICY REVIEW CEO Asche spoke regarding proposed revisions to Policy C-32 titled Rate Stabilization Plan. Staff is still reviewing appropriate tax and accounting regulations relating to establishing a Rate Stabilization account. This item will be included on the agenda for further discussion at next month s Board meeting. DIRECTOR REPORTS Director Erickson noted that there was an opening for a seat on the Colorado Public Utilities Commission. Director McCormick stated that he has submitted an application for the position. Director Berens commented about an email notification that was sent out by CEO Asche. The email was sent to those members previously authorizing such notifications. The email requested the members to contact EPA and ask that EPA reconsider its All-But-One energy policy, which would effectively limit construction of new coal-fired generation. Director Martin talked about communications she has received regarding a cyber security task force established by NRECA, and about her recent tour of the Basin Electric Energy Trading Facility while attending Basin s Annual Meeting. President Buczek also shared information from the recent Basin Electric Annual Meeting. Director Pryce noted the potential for dissolution of BTA in the near future. Director McCormick advised that he attended an EPA listening session in Denver regarding future environmental regulation of coal fired power generation facilities. Directors Grant and Pryce commented about the recent CREA Energy Summit in Denver. Director Pryce advised the Board about an NRECA upcoming web conference regarding strategic planning. TRI-STATE REPORT Director Newman reviewed his written report for November 2013, talked about his additional meeting day handouts, and addressed board questions. CREA REPORT There was no written report received from CREA prior to our meeting. Director Jaeger discussed items of interest regarding CREA and addressed board questions. He suggested the board send an alternate representative to the CREA Board meetings starting in January or February. This will be further discussed at the next Board meeting. 5
WUE REPORT Director McCormick talked about topics of interest regarding WUE and addressed Board questions. The WUE Sales and Financial Report for October 2013 was included in the board packet for review. ROUND-UP FOUNDATION The Round-Up Foundation October Meeting Minutes, Update and Year-to-Date Summary by Director District were included in the Board packet for review and discussion. WRITTEN REPORTS The following written reports were included in the Board packet for review and discussion. Absences and Regular Hours Worked New Memberships Collection Activities Key Accounts MEETING SCHEDULE The next Regular Board Meeting is scheduled for Friday, December 13, 2013 at 9:00 a.m. at the Brighton Headquarters Office, 500 Cooperative Way, Brighton, Colorado. EXECUTIVE SESSION No session. ADJOURNMENT President Buczek declared the meeting adjourned at 5:23 p.m. CEO Ron Asche 6