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HomeMy WebLinkAbout2022-06-23 RMLD Board of Commissioners MinutesTown of Reading 0 Meeting Minutes Board - Committee - Commission - Council: RMLD Board of Commissioners RECEIVD TOWN CLERK READING, MA. 2022 DEC 22 AM if: 49 Date: 2022.06-23 Time: 7:30 PM Building: Reading Municipal Light 8ullding Location: Winfred Spurr Audio Visual Room Address: 230 Ash Street Session: Open Session Purpose: General Business Version: Final Attendees: Members - Present: Marlena Bits, Chair; Philip Pacino, Vice Chair; David Talbot, Commissioner; Robert Coulter, Commissioner. Members - Not Present: John Stempeck, Commissioner. Others Present: RMLD Staff: Gregory Phipps, Interim General Manager; Erica Morse, Executive Assistant; Wendy Markiewicz, Director of Business Finance; Janet Walsh, Director of Human Resources; Hamid Jaffari, Director of Engineering and Operations. RMLD Liaisons: Karen Herrick, Reading Select Board Liason. Minutes Respectfully Submitted By: Philip Pacino, Secretary Pro Tem Topics of Discussion: 1. Call Meeting to Order Chair Bita called the Board of Commissioner's (BoC) meeting to order at 7:40 PM and announced that the meeting would be held both in person and remotely on Zoom plus will be streamed live on RCN and youTube. Opening Remarks and Introductions Chair Bita read the RMLD BoC Code of Conduct and asked all remote attendees to Identify themselves. Commissioner Talbot participated In the meeting remotely on Zoom. Commissioner Coulter served as Secretary at the meeting until the arrival of Vice Chair Pacino, who then served as the Secretary. 2. Public Comment Liaisons to RMLD Board Karen Herrick, Reading Select Board Liaison, provided comments at the meeting. Herrick said that the Reading community is thrilled about the EV Chargers and thanked the BoC for extending an Invitation to the SB to attend the ribbon cutting. Page I t The Town will be working on EV spedfic parking regulations; Town Hall staff will reach out and coordinate with RMLD. A draft will tentatively be presented at the Jury 190 Select Board meeting. Coleen O'Brien, General Manager, has been working within the industry on a letter regarding Green Communities. Currently, the legislation is waiting approval from the State House. Herrick, as a SB member, urges the RMLD to continue this work, which will be brought to the next SS meeting. Public Comment There was no public comment at the meeting. 3. Report on the Citizens' Advisory Board (CAB) Meeting Commissioner Coulter attended the CAB meeting on lune 23, 2022, Immediately proceeding this BoC meeting, which had the same agenda items as the BoC meeting. 4. Interim General Manaaer Report Gregory Phipps, Acting General Manager, provided an update to the BoC. Talent Acquisition and Talent Management Phipps referenced the current employment opportunities, located on the RMLD website. Phipps said that there are currently 11 open positions across a variety of different roles. Julie Blackley, the new Communications Manager, will be working with HR to actively promote RMLD as a dynamic entity within a changing and dynamic Industry. RMLD attended several events at local colleges, which resulted in three summer Interns, who are currently working on a variety of things in the Integrated Resources Department. Phipps noted that networking Is a common way to find opportunities and encouraged the BoC and Reading Select Board to direct anyone interested in RMLD to the RMLD website. The primary contact for recruitment is Janet Walsh, Director of HR, but those who are Interested are welcome to speak with anyone at RMLD. Phipps said that talent acquisition is a critical piece for RMLD; there is a series of transitions happening due to growth, retirement, and open positions. Salary Survey The RMLD plans to commission an external salary survey in the month of July. The Department is currently pursuing a few parties through the procurement process. RMLD uses the annual MEAM salary survey; but Is commissioning the external survey to ensure that the Department attracts and retains the right people. Page 12 5. Annual R Phipps presented the Annual Report confirmation. The annual report can be found in the BOC packet on the RMLD website (Pages 3- 75). The CY21 report theme Is versatility; a new focus championed by the GM in 2021. Portions of the standard format were revised for CY21. The report is more customer focused, organized around customer needs Instead of the traditional organization by department. Commissioner Coulter made a motion, seconded by Chair Site, that the Board of Commissioners approve the Annual Report for CY21 as presented, on the recommendation of the General Manager. Motion Carried: 3: 0: 2 (3 In favor; 2 absent). Vice Chair Pacino and Commissioner Stempeck were absent from the meeting. Vice Chair Pacino voiced his approval of the motion upon his arrival. 6. ENE Board of Directors Phipps reported on the Energy New England (ENE) Board of Directors. Phipps stated that RMLD is an equity owner in Energy New England (ENE) and the GM is the representative of RMLD on the Board of Directors. The GM and Phipps attended the most recent meeting; the GM was thanked for her contributions to the Board of Directors on behalf of ENE. The Intention Is for the Interim General Manager or newly appointed GM to fill the vacated role. Commissioner Coulter asked a question relative to the Class B Director. Phipps responded that the Class B director is related to the level of ownership RMLD holds. Commissioner Talbot requested a timely update to the BoC on what ENE is working on both In advance of and after each meeting. Commissioner Coulter made a motion, seconded by Chair Site, that pursuant to Section 3.2 of the Operating Agreement of the Energy New England, LLC, the Reading Municipal Light Department Board of Commissioners hereby appoint Greg Phipps as a Class B Director of the Energy New England, LLC Board of Directors for a term of three years. Motion Carried: 3: O: 2 (3 In favor; 2 absent). Vice Chair Pacino and Commissioner Stempeck were absent from the meeting. Vice Chair Padno voiced his approval of the motion upon his arrival. 7. 2022 N PPA Conference Phipps reported on the upcoming 2022 NEPPA Conference. The presented materials can be found in the BoC packet on the RMLD website (Pages 76-79). Page 13 Phipps noted that the NEPPA conference is an important regional event for the BoC, the CAB, and 1-2 members of the senior management team to attend. Phipps stated that the topics are typically timely and relevant to the RMLD, the content useful, and networking opportunities beneficial. Commissioner Coulter made a motion, seconded by Chair Bite, that the Board approve Greg Phipps's travel to, and attendance at, the NEPPA Annual Conference to take place August 14-17, 2022, at Snowflake Mountain Resort, in Stowe, Vermont. Motion Carried: 3: 0: 2 (3 in favor; 2 absent). Vice Chair Pacino and Commissioner Stempeck were absent from the meeting. Vice Chair voiced his approval of the motion upon his arrival. The BoC voted on Commissioner who can be in attendance at the 2022 NEPPA Conference. Commissioner Coulter made a motion, seconded by Chair Bite, that the Board approve travel to, and attendance at, the NEPPA Annual Conference to take place August 14-17, 2022, at Snowflake Mountain Resort, in Stowe, Vermont for up to five Commissioners. Motion Carried: 3: 0: 2 (3 in favor; 2 absent). Vice Chair Pacino and Commissioner Stempeck were absent from the meeting. Vice Chair Padno voiced his approval of the motion upon his arrival. 8. Report on Town Payments Wendy Markiewicz, Director of Business Finance, presented on Town Payments. The presentation can be found In the BoC packet on the RMLD website (Pages 80-84). Markiewicz stated that town payments occur twice a year; lune 30 and December 31. Pilot Payment Breakdown for CY2022 (Page 82) Markiewicz said that payments are based on $86M net plant and 658,000 kWh sales. Each towns payment is based on the town's proportion of total RMLD load. The lune 30 payment (issued) totals approximately $860K. Each town was communicated to and should have received their check. New Calculation Formula (Page 83) New Town of Reading ROI Estimated Payment Schedule (Page 84) Markiewicz explained that the three-year average of kWh sales is multiplied by 3.875 mils which gives a total payment to the Town of Reading for 2022 of $2.51M. Three years prior the total was - $2.411 each year. Herrick requested that the new payment chart be circulated. 9. IRD Report Phipps presented the Integrated Resources report. The presentation can be found in the BOC packet on the RMLD website (Pages 85-90). Pege 14 Additional information relative to this presentation will be made available on the RMLD website. Vice Chair Pacino joined the meeting at 8:05 PM. The presentation should be considered in the context of the significant amount of press circulating relative to the dramatic increase in energy costs. The content of the presentation outlines what can be expected from a customer's perspective in terms of monthly electric bills from RMLD. Power Supply Context (Page 87) Phipps stated that the cost of natural gas is the primary driver of electricity in the wholesale market in New England. Due to Russia's activities in the Ukraine, the cost of energy, specifically natural gas and oil, has been driven up. New England energy casts are now influenced by international events. As 87% of RMLD's power supply is under fixed contracts, high increases In the wholesale market are only affecting 13% of power supply, in terms of MWH volume. The global context, the forward price curve increases, and the ]an - May actuals results yield updated power supply forecast for the 2022 power supply at $66M; or 9% higher than the original budget. RMLD is in the process of increasing hedging. Typically hedged power is between 80- 85%; currently RMLD's power supply is at 87% and striving towards the mid-90s. However, reasonably priced supply Is very hard to find, most prices are at forward price curve levels and hence, not worth locking in high prices. Phipps noted that the high cost of energy is expected to continue for 18-24 months. The duration and magnitude of the cost increase is heavily influenced by what is happening In Europe. Customer Cost - Residential Example (Page 101) Phipps noted that most customers are residential, 26,000 out of 30,000 meters and 40% of total load. The monthly power supply cost (pass through) is the actual cost that RMLD occurs on behalf of customers. Two cost variables are the fuel and PPCT charge (capacity and transmission). The rate stabilization and fuel funds act as buffers against variability. The goal is to reflect actual cost and dampen volatility. From a customer perspective, power supply is key piece and then annual operating cost. Phipps noted that the 2022 line In the Average Residential Bill by Month graph reflects actuals for the first half of 2022 and forecasted for the rest of the year. Page 15 The typical residential bill ranges from just under $100 to over $170. Seasonality is associated with what customers pay each month, which is primarily driven by usage. Phipps cited the example of AC In the summer. Although costs driven by usage could change dramatically, in general, customer behavior is stable and predictable. A rate increase was implemented in January 2022, which does not change until new rates are approved and filed. This leaves power supply cost as the only monthly variable. In 2021 the typical average bill over the year was $118. The 2022 forecast was 12% higher ($133). The $15 difference is due to the stability of operating costs throughout the year and the unanticipated power supply variability. Power supply increased from $67 in 2021 to $77 in 2022. This is driven by external markets and the amount of energy the Department has in an open/unhedged position. Phipps stated that the key takeaways of the presentation are as follows: • The ability for the RMLD and the BoC members to provide informed responses when customers ask questions relative to Increases in their bill. Phipps cited the example of explaining that the difference Is driven by power supply costs and global factors. • RMLD customers are in good shape, where the rate or cost shock will not be significant. • Seasonality plays a role in cost; summer costs will be higher due to AC Vice Chair Padno asked a question relative to the monthly bill chart. Phipps responded that the chart reflects only residential customers and is an average monthly bill Residential allows year to year comparison of the entire class. Phipps noted that a question was posed at the CAB meeting relative to how RMLD compares to other utilities. RMLD receives a quarterly report in terms of the Department's rates to other utilities in the region (both MLPs and IOUs). In the residential space RMLD falls in the middle of the MLPs and significantly less than IOUs. In the commercial and industrial space RMLD falls at the low end of the scale, largely due to the cost structure associated with the large customer concentration in Wilmington. Residential requires more network equipment (poles, wire, transformers) to cover a larger geography. RMLD, as an MLP, can implement long-term contracts, which reduce the exposure to the volatility that other energy providers face. From a legislative perspective, IOUs are limited to 6 -month terms. Page 16 Renewable Choke (Page 89) The renewable cholce program has not been adopted as much as RMLD had hoped. For residential, 66 out of 26K customers opted In; for commerdal one out of 3K customers opted in, and zero industrial customers have opted in. Two industrial customers are motivated to adopt the program to meet corporate goals. These companies have environmental targets they are mandated to meet. Public companies face the challenge of balancing the cost versus corporate requirements. As previously stated, in July the RMLD will be transitioning Its initial presence relative to social media use. Vice Chair Pacino previously requested that the Department revisit the annualized line and see If there needs to be adjustments in 2022. This topic will be discussed In September. Currently, RMID Is retiring 26% of all certificates. The Renewable Choice Program allows for customers to contribute and enables RMLD to retire more. Chair Bita suggested other ways to incentivize customers, such as an incentive for the first 1K customers who sign up. Chair Blta cited the example of a gift card to a business in one of the four towns. Phipps noted that because the program is opt -in, there Is flexibility in terms of how the RMLD incentivizes customers. The incentive must be fair and flexible but can be creative. Vice Chair Pacino commented that he is disappointed In the numbers. Phipps stated that the RMLD Is transitioning to a strategy that targets social media, where most customers are. 10. RMLD Procurement Requests for Board Approval Hamid Jaffarl, Director of Engineering and Operations reported the procurement requests for Board approval. The materials presented can be found in the BoC packet on the RMLD website (Pages 91-93). IFP 2022-25 - ABB Gridshield SSkV Reclosed, IFP 2022-25 Is part of the grid modernization initiative the RMLD started in 2015. The delivery date has not changed since the previous bid in 2021. The cost has Increased by $6,515 from the previous bid ($20,243). The Increase in cost from 2021 Is due to factors such as the rising cost of materials and labor, the energy crisis, and market volatility. Vice Chair Pacino asked a question relative to the delivery data being pushed back due to supply chain Issues, and If there is a penalty for that. Hamid responded that for this Item, delivery is likely to be closer to 17 weeks, but the timeframe is not certain and there is no penalty for delayed delivery. Page 1 7 Vice Chair Pacino made a motion, seconded by Chair Etta, that proposal IFP 2022-25 for ABB GridShield 1SkV Reclosers be awarded to: WESCO Distribution, Inc. for $107,032, pursuant to M.G.L. c. 164,§ 56D, on the recommendation of the General Manager. Motion Carried: 4:0:1 (4 in favor; one absent). Commissioner Stempeck was absent from the meeting. 11. Schedulino Chair Bita presented on the upcoming RMLD BOC meeting dates and warrant schedule. Subsequent RMLD BoC Meetings Next Board Meeting will be held on Thursday July 21, 2022. There will be no August meeting. All future meetings will be tentatively scheduled for the Third Thursday of each month. Joint Meeting with the Select Board on Economic Development The next Joint meeting with the SB on Economic Development will be held on lune 28, 2022, at Town Hall at 6:00 PM. Warrant Schedule For the July warrant, Commissioner Coulter will be covering the CAB; Commissioner Talbot will be covering AP; and Commissioner Stempeck will be covering payroll. 12.E At 8:30 PM, Vice Chair Pacino made a motion, seconded by Chair Bita, that the Board of Commissioners go into Executive Session pursuant to Massachusetts G.L. c.164 section 47D, exemption from public records and open meeting requirements In certain Instances, To consider the purchase, exchange, lease or value of real property if the chair declares that an open meeting may have a detrimental effect on the negotiating position of the public body; and to conduct strategy sessions In preparation for negotiations with nonunion personnel or to conduct collective bargaining sessions or contract negotiations with nonunion personnel. Motion Carded: 4:0:1 (4 in favor; one absent). Commissioner Stempeck was absent from the meeting. 13. Adioumment Vice Chair Pacino made a motion, seconded by Commissioner Talbot, that the RMLD Board of Commissioners adjourn regular session. Note: Roll call vote required Motion Carried: 4:0:1 (4 in favor; one absent). Commissioner Stempeck was absent from the meeting. Regular Session adjourned at 9:19 PM Pape 18 A true copy of the RMLD Board of Commissioners minutes As approved by a majority the Commission. y'if(�[S'ibG/m bC (5 Philip B. Pacino, Secretary Pro Tem RMLD Board of Commissioners gage 19