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HomeMy WebLinkAbout2006-07-19 RMLD Board of Commissioners MinutesV Reading Municipal Light Board of Commissioners Regular Session 230 Ash Street Reading, MA 01867 - July 19, 2006 Start Time of Regular Session: 7:30 p.m. End Time of Regular Session: 9:50 P.M. Attendees: Commissioners: Messrs. Patin, Soli, Hahn, and Ms. O'Neill RMLD Staff: Messrs. Cameron, Dion, and Fournier Mses. Antonio, Benson, Cavagnaro, Gottwald and Parenteau Citizens' Advisory Board: Mr. Carakatsane Chairman Pacino called the meeting to order at 7:30 p.m. This meeting of the Reading Municipal Light Department (RMLD) Board of Commissioners July 19, 2006, is being broadcast live at the RMLD's office at 230 Ash Street, Reading, MA. Live broadcasts are available only in Reading due to technology constraints. This meeting is being video taped for distribution to the community television stations in North Reading, Wilmington and Lynnfield. Minutes June 21, 2006 Mr. Hahn made a motion seconded by Mr. Soli to approve the Regular Session meeting minutes of June 21, 2006, with the changes presented by Secretary Soli and Commissioner O'Neill. Motion carried 4:0:0. Report of the Chairman of the Board Physical & Data Security Audits Mr. Soli stated that outside factors influenced him to suggest that data security and physical security audits are important issues for the RMLD. Mr. Soli said that to alleviate his concerns of this being an issue at the RMLD, conducting a security audit will address any possible security breaches. Mr. Soli stressed that this is only being brought forward to the RMLD because of external events. Mr. Cameron said that he will come back to the Board by October, 2006 with a plan for auditing the RMLD physical security and data security. Mr. Soli made a motion seconded by Mr. Hahn that the RMLB directs the RMLD General Manager to return for Board approval a plan for conducting audits of RMLD physical security and data security. The plan is to be submitted by the October 2006 monthly meeting of the RMLB. Motion carried 4:0:0. Report on Transformers Mr. Cameron stated that Mr. Dion, Engineering and Operations Manager, will report on the activity due to the heat wave over the last two days. Mr. Dion reported that the RMLD hit a new peak yesterday at 4:00 p.m. Mr. Dion said that in general the system performed extremely well and that the circuits held up well. Mr. Dion pointed out that all the outages experienced were transformer related. There were 34 transformers replaced and 4 added for capacity. The RMLD has addressed every issue. Mr. Dion said that the duration of overload issues was shorter on the second night. Ms. O'Neill's is concerned about the Transformer Maintenance line item in the budget. Why did so many transformers fail? Mr. Dion replied that due to increased energy uses in many homes, transformer loads go beyond their rated values. Regular Session Minutes 2 July 19, 2006 Report of the Chairman of the Board Report on Transformers Mr. Dion said that homeowners have added more air conditioning, central air, and other additions that the RMLD is not aware of. Mr. Dion noted that the transformers, which were originally designed to feed an area, are becoming overloaded. Mr. Dion said another issue is that it was not a very hot summer last summer so the load is showing two years worth of growth. Discussion followed. Ms. O'Neill suggested putting something in the In Brief to make customers aware of the need to inform the RMLD when they are increasing their load. Mr. Soli pointed out that the In Brief article it should inform customers that when the RMLD hits a new peak that means the rates the RMLD will pay for capacity would probably increase. Mr. Soli stressed that on a hot day customers can be more prudent on their electricity usage because it will reduce the amount of energy and peaking. Selectmen Liaison, Citizens' Advisory Board and Customer Comments There were no comments from those in attendance. Report of RMLD Board Subcommittees General Manager Subcommittee Meeting (Commissioner Hahn) Mr. Hahn reported that the General Manager Subcommittee met and the subject of the meeting was the General Manager's Employment Agreement. The Agreement says if the Board does not wish to continue the General Manager's employment then they need to serve notice six months in advance, which would be August 7, 2006. Mr. Hahn said the Subcommittee discussed this and came to the unanimous conclusion they do want Mr. Cameron to continue on for another year. Mr. Hahn said that the Subcommittee made the following motion which passed unanimously; Mr. Hahn made a motion seconded by Mr. Soli that the General Manager Subcommittee recommend to the RMLD Board that Mr. Cameron's Employment Agreement be extended according to the term of the employment agreement. Mr: Soli said that this is something the Subcommittee does annually. It is a proactive step, and this year Mr. Cameron did an especially good job on the Calpine issue. Mr. Hahn made a motion seconded by Mr. Soli that the RMLD Board of Commissioners extends Mr. Cameron's employment agreement according to the terms of the agreement to February 7, 2008. Motion carried 4:0:0. Community Relations Subcommittee (Vice Chair Kearns) In the absence of Vice Chair Kearns, Ms. Gottwald presented this update. Ms. Gottwald stated that at the Community Relations Subcommittee meeting items discussed were: energy education and conservation, as well as a green power program that the RMLD will call Green Choice. Ms. Gottwald said that the RMLD is working on publicity to notify customers about Green Choice. Ms. Gottwald noted they will use recycled paper for as many publications as possible. Ms. Gottwald said that the theme of this year's T-Shirt contest would be changed from Safety to Conservation. Ms. Gottwald added that the RMLD will be giving out compact fluorescent light bulbs to those who sign up for Green Choice. The August In Brief will be published in green to kick off the Green Choice program. General Manager's Report Financial Report, May 31, 2006 Mr. Fournier pointed out the month of May represents the eleventh month in the fiscal year. The change in Net Assets is a little over $7 million. Mr. Fournier pointed out that Base Revenue is up 1.1 % over budget, attributable to the residential sector. Purchase Base Power Expense is over budget by $900,000 due to transmission costs comingm in higher than budget. Operating Expenses are $831,000 under budget. Mr. Soli asked if the June 30 Financial Report will reflect the $3 million refund? Mr. Fournier replied, "yes". Regular Session Minutes July 19, 2006 General Manager's Report Financial Report, May 31, 2006 Mr. Fournier commented that the monthly Calpine cash disbursement schedule through October 2007 is contained in the Financial Report. Mr. Fournier said that due to the Credit and Collections Department 90% of RMLD's receivables are under thirty days. Mr. Fournier pointed out that a sampling of the ratepayers may be receiving audit confirmations from the auditors. The RMLD would be appreciative if the customers receiving these confirmations could respond to the auditors. Mr. Fournier said that the auditors were on site performing a physical inventory during the last week of June. Mr. Fournier reported that the auditors would be on site August 8 to perform fieldwork and will be making their report at the September meeting. Mr. Fournier said that five divisions are 7% under budget with the Fuel and Base Power Supply being over budget. The individual departments are under budget. In May, Deferred Fuel charges exceeded Revenues dropping the Deferred Fuel Cash amount by $400,000. Discussion followed. Ms. O'Neill added that she would like to see a warehousing study and a study of space revolving around space efficiency. Power Supply Update Ms. Parenteau said that the load in May 2006 was 6.7% higher than the load of May 2005. In May the energy costs were $3.2 million, or 5.5¢ per kilowatt hour, which is $850,000 higher than April 2006. A large part of the increase was because on May 9, 2006, the real time prices in the NEMA load zone were in the price range of $900 per megawatt hour for an eight-hour period. This was a significant impact on the RMLD's energy costs as a result of transmission line maintenance that was performed. The ISO interchange on the kilowatts hours was down 19% from April to May. The RMLD hit a demand of 112 megawatts and capacity costs came in at $5.81 per kilowatt- month. Mr. Hahn asked if it was scheduled transmission maintenance that caused the price increase? Ms. Parenteau replied that she believes this is the case. Ms. Parenteau further explained that the RMLD gets access to a short-term transmission schedule and she spoke with Mr. Dion on that day. Discussion followed. Ms. Parenteau provided an update on the Green Choice Program. She said on June 30, 2006, Energy Services developed a tariff sheet that was filed with the Massachusetts Department of Telecommunications and Energy. There is a thirty-day waiting period so that the rate would be effective on July 30, 2006. Ms. Parenteau explained the charge would be $3 per hundred kilowatt hour block. Customers can chose as many blocks they wish. Customers who sign up for Green Choice must remain on the rate for thirty days. Green Choice rate is available to all customers. Ms. Parenteau explained that a customer signing up for these blocks is supporting Renewable Energy projects. Discussion followed. Mr. Hahn said the RMLD is taking a proactive step by offering green power because it does not have to, but it is the right thing to do and the customers are interested. Mr. Cameron said that Community Relations has been working on the publicity for the Green Choice Program, and the public relations effort will be begin once the rate filing comes back from the Department of Telecommunications and Energy. Regular Session Minutes July 19, 2006 General Manager's Report Vehicle Day This will be taking place at the Reading Library on August 15, 2006. Mr. Cameron said that Vehicle Day will take place from 7:30 to 9:30 a.m. on August 15 at the Reading Library, which is held annually. The RMLD will have a digger derrick truck at this event. Lynnfield Emergency Preparedness Fair, held on May 20, 2006 Mr. Cameron said that Susan Bagley Koyle thanked the RMLD for contributing safety materials and handouts for this event. Thank you letter from RMLD customer, Muriel Pawlowski Mr. Cameron stated that RMLD customer Muriel Pawlowski sent a letter thanking the RMLD for the June credit on the bill. Northeast Public Power Association (NEPPA) Distinguished Service Award Mr. Cameron said that Jane Parenteau and William Seldon, Energy Services Division, will receive this award at the NEPPA Conference. Mr. Carakatsane pointed out this is for Ms. Parenteau's and Mr. Seldon's diligence on the Calpine matter. Board Discussion Strategic Planning (Commissioner O'Neill) Ms. O'Neill said that she researched the American Public Power Association, (APPA) Handbook for Public Policy Makers in which it states, that "A responsible and effective Board should require of its management a unique and durable corporate strategy, review it periodically for validity, use as it as a reference point for all other Board decisions and share with management the risks associated with this adoption... Boards should require of management a long-term strategic plan that sets the future course of the utility for the next five to ten years... Planning is one of the most effective tools for enhancing the quality of management and policy making. It is integral to the capital intensive electric long lead-time utility industry." Ms. ONeill said that the RMLD needs to position itself for the future to continue to provide reliable power at reasonable rates. Ms. ONeill said that Mr. Hahn had attended a session at APPA similar on this topic. Ms. ONeill said that perhaps a consultant could be hired. Ms. ONeill said that this will aid in their decision making process for the capital plan, cash reserve levels, space planning and new possibilities. Mr. Soli said that three important issues to him are: How are we going to get power supply, Green power and its implications, and Capital planning with start/end dates assigned for items in the Capital Plan. Mr. Cameron said that the RMLD did respond to Ms. O'Neill with a five-year capital plan. Mr. Cameron mentioned that in the past the RMLD did try to put a plan together. Mr. Cameron said that strategic planning is important but the Board efforts in this area have not been successful. Chairman Pacino said that a strategic plan has to be very focused on particular issues. Chairman Pacino said that it is an intensive process but political forces can come into play. Chairman Pacino pointed out that this has been attempted three times since he has been on the Board. Mr. Hahn said that strategic planning exercises are difficult and time consuming. Mr. Hahn agrees with Chairman Pacino's statement that strategic planning needs to be focused. Mr. Hahn said that strategic planning means a lot of things to different people. Mr. Hahn pointed out that some companies look at strategic planning to assess what business they want to be in. Mr. Hahn said that he does not want to see the RMLD venture into cable television or broadband over power lines. The RMLD is in the electric delivery business with the objective to keep the lights on and rates low. If the objective of the strategic plan is to change that, it is not a great idea. Some of the other elements spoken about are operational issue such as buying a truck. Mr. Hahn is in agreement with Chairman Pacino about having a good focus on what we want to do and managing expectations around it. Regular Session Minutes July 19, 2006 Board Discussion Strategic Planning (Commissioner O'Neill) Ms. O`Neill said that perhaps strategic planning is not the word to use, but a long-range plan. Ms. ONeill pointed out the Town of Reading is required by law to have a master plan every ten years. Ms. O'Neill suggested looking at other municipals. Mr. Cameron will check with APPA and NEPPA, with respect to strategic plans, and come back to the Board with the results. Mr. Carakatsane cautioned that once such plans are finalized, they often are not implemented Ms. O'Neill stated that is not true in the Town of Reading because they are endeavoring to use the master plan on zoning issues. Next Meeting Dates NEPPA Conference, August 20 to August 23, 2006 Wednesday, August 30, 2006 Wednesday, September 20, 2006 RMLD Board of Commissioners Subcommittee Meetings Subcommittee meetings will be posted if deemed necessary by the Commissioners. RMLD Board Rotation at Citizens' Advisory Board (CAB) Meetings No date has been set for the next Citizens' Advisory Board meeting. Executive Session (General Manager's Conference Room) At 8:35 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, and to return to Regular Session for the sole purpose of adjournment. Chairman Pacino called for a poll of the Board: Mr. Hahn, Aye; Mr. Soli, Aye; Mr. Pacino, Aye; and Ms. O'Neill, Aye. Motion carried 4:0:0. Motion to Adjourn At 9:50 p.m. Mr. Soli made a motion seconded by Mr. Hahn to adjourn the Regular Session. Motion carried 4:0:0. 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