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HomeMy WebLinkAbout2006-11-15 RMLD Board of Commissioners MinutesReading Municipal Light Board of Commissioners RECEIVED Regular Session TOWN CLERK 230 Ash Street 'READING, MASS. Reading, MA 01867 November 15, 2006 Start Time of Regular Session: 7:32 p.m. End Time of Regular Session: 10:23 p.m. Attendees: Commissioners: Messrs. Pacino, Soli and Hahn, Mses. Kearns and O'Neill CAB: Mr. Vale RMLD Staff. Messrs. Cameron, Dion, Fournier and Seldon Mses. Antonio, Cavagnaro, Gottwald and O'Leary Chairman Pacino called the meeting to order at 7:32 p.m. Minutes October 4, 2006 Ms. O'Neill made a motion seconded by Mr. Hahn to approve the Regular Session meeting minutes of October 4, 2006 as presented. Motion carried 5:0:0. October 18, 2006 Mr. Soli made a motion seconded by Mr. Hahn to approve the Regular Session meeting minutes of October 18, 2006 as presented. Motion carried 5:0:0. Report of the Chairman of the Board Presentation to Subsequent Town Meeting Town of Reading Chairman Pacino said that he discussed the green power program as well as informing those in attendance on how to sign up for this program. Letter from Citizens' Advisory Board Chairman Roger Lessard Chairman Pacino said that he received the Citizens' Advisory Board (CAB) letter recommending to the RMLD Board of Commissioners to hold the refund of $1,230,629 until May 31, 2007, and revisit this request at that time and documented a vote 3:1:0 on the recommendation. Ms. Kearns asked Mr. Hahn if the General Manager was present at the meeting. Mr. Hahn replied, "yes". Mr. Hahn said that the CAB members had concerns about uncertainty about the future and thought it was better to hold off on the refund. Ms. Kearns inquired which CAB member voted against the motion? Mr. Cameron replied that it was Reading's CAB representative Andrew Herlihy. Mr. Cameron said that the latest update of the Six Year Plan projects that for fiscal year 2007 the RMLD will under recover by approximately $3.4 million, if there is a $1.2 million rate refund. Mr. Cameron stated that much of the under recovery is driven by a 23% increase in the Purchase Power cost, resulting from ISO's introduction of the Forward Capacity Market. Mr. Cameron said the Department could use the $1.2 million at the end of the year to address a possible under recovery. Chairman Pacino stated that the Six Year Plan demonstrated that in 2009 the Department is potentially looking at a rate increase based on these projections. Regular Session Minutes November 15, 2006 Report of the Chairman of the Board Letti* am Citjzexks' AdvisomBoard Chairman Roger Lessard Chairman Pacino said that by giving out the refund it will be moving up the rate increase by one year. Chairman Pacino stated that the Six Year Plan provides the quantification he has been seeking to show the effect of the refund. Ms. O'Neill stated that the money was earned above the Department's allowable rate of return last year. Ms. O'Neill pointed out that if this over recovery was brought to the Board's attention last spring probably this amount may have been incorporated in last year's refund. Mr. Cameron commented that the Six Year Plans shows that in 2007-2008 timeframe a rate increase is warranted. Discussion followed. Because the $1.2 million reflects monies earned above the Department's rate of return, and because those monies belong to persons who were RMLD customers during the last fiscal year, Ms. Kearns moved that the RMLD Board of Commissioners approves a refund of $1,230,629 to the customers. Ms. O'Neil seconded that motion. Motion carried 3:2:0. Messrs. Pacino and Soli voted against this motion. Selectmen Liaison, Citizens' Advisory Board and Customer Comments Mr. Vale said that he is fielding inquires from the state agency that oversees the renewable trust fund on green energy development statewide and generally they do not work with municipal utilities because they do not pay into the trust fund. Mr. Vale said they are interested to see what is going on with the Green Choice Program as to where the REC's are coming from. Update on Green Choice Program Ms. Cavagnaro reported that there are currently 145 customers who have signed up for the Green Choice program for a total of 293 blocks. Ms. Cavagnaro provided a break out by town. Discussion followed. Report of RMLD Board Subcommittees Power Contract, Rate Setting, Customer Choice Subcommittee (Commissioner Hahn) Mr. Hahn reported that Energy Services has embarked on a five-year power procurement plan that is in its initial phase. Mr. Hahn said that they would be meeting on November 29 and the subcommittee will be provided additional information including a monthly outlook for the time period when the Calpine escrow runs out. Mr. Hahn said that the RMLD should expect a step increase in that timeframe and to develop a plan as a way to manage that step increase. Discussion followed. Meeting with the Town of Reading, Town Accountant (Secretary Soli) Mr. Soli reported they met last week and discussed how the books balance between the RMLD and Town Hall. The topic of who will perform the audit next year came up; therefore, the Audit Committee needs to meet. Action Items 2007-5 Hendrix 052 Alumoweld-Aluminum (AWA) Messenger Wire Chairman Pacino disclosed that he would recuse himself from voting on the bids because he has a possible business connection with Arthur J. Hurley Co. Mr. Soli made a motion seconded by Mr. Hahn that bid 2007-5 for Hendrix 052 Alumoweld-Aluminum (AWA) Messenger Wire or equal be awarded to Arthur J. Hurley Co. for a total cost of $30,000.00 as the lowest qualified bidder on the recommendation of the General Manager. Motion carried 4:0:1. Chairman Pacino abstained. Regular Session Minutes November 15, 2006 Action Items 2007-6 1/0 Single conductor AAAC Spacer Cable Mr. Dion stated that Graybar was disqualified because they had variable pricing. Discussion followed. Mr. Soli made a motion seconded by Mr. Hahn that bid 2007-6 1/0 for Single conductor AAAC Spacer Cable be awarded to Arthur J. Hurley Co. for a total cost of $18,090.00 as the lowest qualified bidder on the recommendation of the General Manager. Motion carried 4:0:1. Chairman Pacino abstained. 2007-13 for 600V Copper Cable Mr. Soli made a motion seconded by Mr. Hahn that bid 2007-13 for 600V Copper Cable be awarded to Arthur Hurley for a total cost of $29,400.00 as the lowest qualified bidder on the recommendation of the General Manager. Motion carried 4:0:1. Chairman Pacino abstained. General Manager's Report Quarterly Financial Update - Mr. Fournier Mr. Fournier presented the Quarterly Financial Update for the first three months of the 2007 Fiscal Year. Mr. Hahn asked if transmission costs were up? Mr. Fournier replied that transmission costs were up as compared to the budget and that the budget for that item was under estimated for the 2007 fiscal year. Mr. Fournier said that the Deferred Fuel Cash Reserve is $4.7 million, which represents a September over collection of $776,000. Discussion followed. Pension Trust - Mr. Fournier Mr. Fournier updated the Board on the Pension Trust. Engineering and Operations Monthly Report - Mr. Dion Chairman Pacino requested an update on the street lighting in Reading Square. Mr. Dion reported that the Reading proposed that the RMLD would provide the streetlights as part of the Reading downtown renovation. Mr. Dion said that Massachusetts Highway rejected this proposal. The RMLD will provide electricity to the streetlights, which will be purchased by the Town of Reading, therefore the capital outlay, will be significantly different. Ms. O'Neill said that she is interested in a monthly reliability report with a few key indicators. Mr. Soli said he would like to think about the format of the capital plan, which he believes could be improved, and he would like this on the December agenda. Power Supply Update for September 2006 - Mr. Seldon Ms. Kearns said that the Department should work with the Town of Reading to share information on the loss in the commercial customer base. Mr. Cameron said that the Department would look into Ms. Kearns' suggestion. Mr. Seldon highlighted the Deferred Fuel Cash Reserve memorandum contained in the Board package. Mr. Seldon stated that the RMLD's customers like to see things they can budget for and they do not like price spikes either way. Mr. Seldon said that Energy Services recommended that the Deferred Fuel Cash Reserve be at a balance of $1.7 million by December, 2006. Regular Session Minutes 4 November 15, 2006 General Manager's Report Power Supply Update - Mr. Seldon Mr. Seldon presented the scenarios outlined in the charts of Fuels Costs versus Fuel Charge and Fuel Expenses versus Deferred Fuel Cash Revenue. Mr. Seldon said that Energy Services predicts that the fuel charge will be in the seven cents range versus the four-cent range we are presently at. Ms. O'Neill asked Mr. Seldon what is Energy Services recommending? Mr. Seldon said that the recommendation going forward is that a half a cent per kilowatt-hour restriction may be too small when trying to keep the Deferred Fuel Cash Reserve within a certain range. Energy Services would like to have the ability to have a one-cent change per month. Mr. Seldon said that in the future it may be prudent to increase the Deferred Fuel at $3.0 to $3.5 million. This is based on the fuel charges and the power supply contracts. Mr. Cameron said that the variable portion of RMLD's power supply is 42% under the current power supply portfolio. Mr. Cameron said that it may be necessary to sign power supply contracts that are not fixed contracts. Mr. Cameron said that in order to abate these fluctuations a cushion in the Deferred Fuel Cash Reserve is necessary. Mr. Cameron stated that he would like to retain the $3.0 to $3.5 million until the new power contracts are procured, then the Deferred Fuel Cash Reserve can be revisited. Discussion followed. Ms. Kearns said that she shares Mr. Cameron's concerns relative to the volatility of the market. Ms. Kearns has the problem of the one-cent drop due to the conservative nature of the staff at the Department. Ms. Kearns stated that the half-cent should remain and she does not have a problem with the $3 million threshold. Discussion then turned to transferring funds from the Deferred Cash Fuel Reserve to the Operating Fund and raising the increment by one cent versus half a cent. As part of this discussion, Ms. O'Neill questioned the value of the Six Year Plan as a planning document for financial decisions. Mr. Soli said that the sense of the Board to the CAB is required on this issue. Mr. Hahn said that there should be some underlying analysis as to why the change would be from one half cent to one cent and why the Deferred Fuel Reserve should be at $3.0 to $3.5 million. Ms. O'Neill made a motion seconded by Ms. Kearns that the sense of the RMLD Board is to set the Deferred Fuel Reserve at $3.0 to $3.5 million. Mr. Soli made a motion seconded by Ms. Kearns to table the previous motion. Motion carried 4:0:1. Mr. Hahn abstained. Mr. Soli made a motion seconded by Ms. Kearns that it is the sense of the RMLD Board of Commissioners (RMLB) to recommend a $1.7 million transfer from the Deferred Fuel Reserve to the Operating Fund and to ask the Citizens' Advisory Board to act upon this sense of the RMLB expeditiously. Motion carried 3:1:1. Ms. O'Neill voted against the motion. Mr. Hahn abstained. Residential Energy Assistance Programs Ms. Gottwald reported on the Good Neighbor Energy Fund program, which is available to RMLD's customers. Ms. Gottwald pointed out that a weatherization program is available to RMLD's customers who are eligible for fuel assistance. Ms. Cavagnaro spoke about the RMLD's residential appliance rebate program. Ms. Cavagnaro said that the RMLD has a residential energy audit program. Gift Certificate Program Ms. Cavagnaro said that the RMLD offers gift certificates in any denomination that may be used to pay customers bills. Regular Session Minutes November 15, 2006 General Manager's Report RMLD Calendars The RMLD calendars will be available on December 1, 2006. Annual Tree Lighting This will take place on Sunday, November 26 at 4:30 p.m. and RMLD employees are involved in this endeavor. Retreat with Department Heads Town of Reading, October 20, 2006 Mr. Cameron stated that he attended a retreat with the Town of Reading Department Heads at the Lexington library and he is a member of one of the break-out groups, which addresses a subject on an ongoing basis. Attendance at Outstanding Citizen Award Dinner honoring Brad Jones Jr., November 8, 2006 Mr. Cameron said that he attended this along with Citizens' Advisory Board member John Norton. Ms. O'Neill wanted information on the Town of Reading's Energy Committee. Mr. Cameron will provide this information. Ms. O'Neill would like to see the Cities for Climate Protection's report and would like them to report to the RMLD Board. Ms. O'Neill hopes all Board members have signed up for change-a-light initiative. Board Discussion Strategic Planning (Commissioner O'Neill) Mses. ONeill and Kearns plan to meet to have a Strategic Planning Subcommittee meeting in the beginning of January. Next Meeting Dates Wednesday, December 13, 2006 Thursday, January 4, 2007, T-Shirt Reception Wednesday, January 17, 2007 RMLD Board of Commissioners Subcommittee Meetings Power Contracts, Rate Setting and Customer Choice Subcommittee will meet on Wednesday, November 29, 2006 at 8:30 am. in the General Manager's Conference Room. RMLD Board Rotation at Citizens' Advisory Board (CAB) Meetings Mr. Soli will be attending the Citizens' Advisory Board meeting on Tuesday, December 5, 2006 at 6:30 p.m. Wilmington Town Hall, Room 4. Executive Session (General Manager's Conference Room) At 9:30 p.m. Mr. Soli made a motion seconded by Mr. Hahn that the Board go into Executive Session, to discuss strategy with respect to litigation, collective bargaining, and to return to Regular Session for the sole purpose of adjournment. Motion carried by a polling of the Board 5:0:0. Mr. Hahn, Aye; Mr. Soli, Aye; Ms. Kearns, Aye; Mr. Pacino, Aye; and Ms. O'Neill, Aye. Motion to Adjourn At 10:23 p.m. Mr. Soli made a motion seconded by Mr. Hahn to adjourn the Regular Session. Motion carried by show of hands 5:0:0. Mr. Hahn, Aye; Mr. Pacino, Aye; Ms. Kearns, Aye; Mr. Soli, Aye; and Ms. O'Neill, Aye. A true copy of the RMLD Board of Commissioners minutes as approved by a majority of the Commission. Robert Soli, Secretary RMLD Board of Commissioners