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HomeMy WebLinkAbout2006-03-29 RMLD Board of Commissioners MinutesReading Municipal Light Board of Commissioners Regular Session 230 Ash Street Reading, MA 01867 March 29, 2006 Start Time of Regular Session: 7:40 p.m. End Time of Regular Session: 9:21 p.m. Attendees: Commissioners: Herlihy, Kearns, Soli, and Hahn RMLD Staff: Messrs. Cameron, Fournier, Seldon, Dion, Mses. Antonio and Cavagnaro CAB: Messr. Carakatsane and Ms. O'Neill Guests: Kay Herlihy, Gina Herlihy, and Shaw Rosen Chairman Herlihy called the meeting to order at 7:40 p.m. Chairman Herlihy read the following statement into the record: "The Reading Municipal Light Department (RMLD) Board of Commissioners meeting on March 29, 2006 is being broadcast at the RMLD's offices at 230 Ash Street, Reading, MA. Live broadcasts are available in Reading only due to technology constraints. This meeting is being video taped for distribution to the community television stations in North Reading, Wilmington, and Lynnfield." Minutes November 16, 2005 Ms. Kearns made a motion seconded by Mr: Hahn to approve the Regular Session meeting minutes of November 16, 2005 with the changes as presented. Motion carried 4:0:0. December 14, 2005 Ms. Kearns made a motion seconded by Mr. Soli to approve the Regular Session meeting minutes of December 14, 2005. Motion carries 4:0:0. January 5, 2006 Ms. Kearns made a motion seconded by Mr. Soli to approve the Regular Session meeting minutes of January 5, 2006. Motion carried 4:0:0. January 18, 2006 Ms. Kearns made a motion seconded by Mr. Soli to approve the Regular Session meeting minutes of January 18, 2006. Motion carried 4:0:0. January 25, 2006 Ms. Kearns made a motion seconded by Mr. Hahn to approve the Regular Session meeting minutes of January 25, 2006. Motion carried 3:0:1. Ms. Kearns abstained. Regular Session Meeting Minutes March 29, 2006 -2- Report of the Chairman of the Board Chairman Herlihy stated that tonight was his final meeting as Chairman and as a Member on the RMLD Board of Commissioners after serving for four years. He acknowledged his guests in the audience, and thanked his wife, Gina, for the time he spent away from home to attend the RMLD Board meetings. He also thanked his boss, Shaw Rosen, for the consideration she has shown him. Chairman Herlihy said that at the last RMLD Board meeting, Mr. Quincy Vale, a Citizens' Advisory Board (CAB) member, had made a very interesting presentation regarding alternative energy, and that Mr. Vale had made a number of recommendations to the Department on alternative energy. Chairman Herlihy said that the RMLD Board had also heard from the Citizens' for Climate Control from Reading on their recent efforts, and that today's Time Magazine contained a special report on global warming. Chairman Herlihy said that he feels strongly that the RMLD as a representative of Public Power has an opportunity to do some very innovative things that address conservation and environmental issues. He said that the Customer Survey showed that some of the customers do care where their power comes from, and he thinks some of the customers would like a choice in that matter. Chairman Herlihy proposed the following motions based on Mr. Vale's presentation: a. Suggested Motion: Move that the RMLD initiate a "Green choice" renewable energy rate program, whereby customers could choose to enroll voluntarily for the purpose of contributing to the Department's purchase of renewable energy credits. Furthermore, the RMLD Board of Commissioners directs the General Manager to determine specifics of such a program and report back to the Board no later than June 30, 2006. Furthermore, that the RMLD General Manager immediately commence the Department's comprehensive community outreach efforts to estimate customer interest in such a program, and to provide the Board with regular updates on this effort. b. Suggested Motion: - Move that the Department create a voluntary, contributory program whereby customers could make tax-deductible donations towards the purpose of providing schools and municipal buildings throughout our service territory with photovoltaic or other alternative energy equipment, with the Department serving the role of collector of funds and overseer of purchasing and installation of such equipment. Furthermore, the RMLD Board of Commissioners directs the General Manager to determine specifics of such a program, working with the CAB, officials in the four municipalities in the RMLD service territory, and others as he sees fit, and report back to the Board no later than December 31, 2006. Chairman Herlihy stated he would welcome discussion, feedback from the CAB, the General Manager, and the Department on these motions. One Board member expressed concern at Mr. Herlihy's use of the word "initiate". Board members said they were not ready to make a decision on "initiate" until they see the program. Mr. Hahn suggested that it would be better to make it clear that the proposed motions asked the Department to bring forth proposals. Chairman Herlihy agreed, and stated that he just wants to make sure the initiatives do not die after he leaves the Board. Mr. Soli edited the two suggested motions. (Note: See motions as corrected and voted below.) Mr. Hahn stated that he thought Mr. Soli's edits address the concerns. Chairman Herlihy agreed with the edits to his motions. a. MOVE that the RMLD Board of Commissioners directs the General Manager to determine the specifics of a "Green Choice" renewable energy rate program, whereby customers could choose to enroll voluntarily for the Regular Session Meeting Minutes March 29, 2006 -3- purpose of contributing to the Department's purchase of renewable energy credits, and report back to the Board no later than June 30, 2006. Motion carried 4:0:0. b. MOVE that the RMLD Board of Commissioners directs the General Manager to determine the specifics of a voluntary, contributory program whereby customers could make a tax-deductible donation towards the purpose of providing schools and municipal buildings throughout our service territory with photovoltaic or other alternative energy equipment, with the Department serving the role of collector of funds and ever-seer- ^f puff acing an and working with the CAB, officials in the four municipalities in the RMLD service territory, and others as he sees fit, and report back to the Board no later than December 31, 2006. Mr. Herlihy made an amendment to the Motion and asked to strike the words, "and overseer of purchasing and installation of such equipment". Mr. Hahn accepted the amendment and it was seconded by Mr. Soli. Motion carried 4:0:0. Selectmen Liaison, Citizens' Advisory Board and Customer Comments Chairman Herlihy thanked Mr. Duffy, although he was not present, for being the Board of Selectmen Liaison for the past two years. Mr. Cameron stated that Mr. Duffy came to all of the RMLD Meetings, and he was a real supporter of the Department that he called the "jewel of Reading". Mr. Cameron thanked Mr. Duffy and wished him continued good health. Mr. Carakatsane, a CAB Member, asked if the RMLD's Website could send out "E-Mail Blasts" regarding news of the RMLD, and suggested the Department investigate this possibility. Mr. Cameron said he would look into it. Mr. Carakatsane commended the General Manager and the staff, particularly Ms. Parenteau and Mr. Seldon, on the presentations relative to the Calpine Bankruptcy issues to the local Boards of Selectmen. He stated the presentations were well received. Report of RMLD Board Subcommittees Power Contracts, Rate Setting, Customer Choice Subcommittee Mr. Hahn stated the subcommittee met last evening and covered the following topics: 1. The possibility of expanding the Department's product offering of streetlights to include other types of fixtures. He said the General Manager will be working on a proposal regarding this matter; and, 2. Service to the new development at Inwood. Mr. Hahn explained that although the development is physically located in Woburn, it is easier to be connected to the RMLD system. NSTAR would be a RMLD "fringe customer". Ms. Kearns asked Mr. Hahn to expand on the streetlight issue. Mr. Hahn responded that the Department offers certain types of streetlights, but as new products are developed, some areas may require more decorative streetlights that may require a specific rate. Action Item Single Phase Watt-Hour Meters Chairman Herlihy read the following into the record: "On February 7, 2006, a bid invitation was placed as a legal notice in the Reading Chronicle requesting proposals for Single Phase Watt-Hour Meters for the Reading Municipal Light Department, and that the bids were publicly opened and read aloud at 11:00 A.M. on February 27, 2006, in the r Department's Board Room. He stated bids were received from Sensus, Graybar Electric, Avcom, and Stuart Irby. r. Ms. Kearns said that as Secretary she would move the following motion, but that she is not in favor of the motion, because she thinks Sensus is a better bid: Regular Session Meeting Minutes March 29, 2006 -4- MOVE that bid 2006-7 for Single Phase Watt-Hour Meters be awarded to Avcom for a total cost of $49,700, as the lowest qualified bidder on the recommendation of the General Manager. Mr. Cameron asked Mr. Dion, the Engineering and Operations Manager, to speak to the motion. Mr. Dion said that the Department has additional information concerning the lowest bidder's recent performance with another municipality. He asked the Board to take a minute and read the document. Mr. Dion explained the lowest bidder was having customer support issues and failure rate issues, and that is why the Department went to the next lowest qualified bidder: Ms. Kearns asked about the "exceptions" to the bid. Mr. Dion stated the exception pertained to the delivery schedule, and the schedule does meet the Department's needs. Mr. Hahn asked if these were simple residential type meters? Mr. Dion replied that they are solid state. Mr. Hahn asked if the Department has any Sensus meters? Mr. Dion responded that it does, however, the RMLD has not experienced the same failure rate and added that he believes the issue is more recent. Mr. Soli asked if he read correctly that with this purchase, the total spent in the budget would be $88,000. Mr. Dion replied, "Yes". Ms. Kearns asked if any additional meters would be purchased this year? Mr. Dion responded, "not for this budget year". Ms. Kearns stated that she thought that Mr. Dion made a good case, and was withdrawing her opposition to the motion. Mr. Soli seconded the motion. Motion carried 4:0:0 General Manager's Report Financial Report, February 2006 Mr. Fournier gave the Financial Report for February, 2006. Ms. Kearns asked if the Purchase Power Fuel was 54% above the budgeted number, and was that due to the cost of fuel or due to the Calpine issue. Mr. Fournier and Mr. Cameron responded that it is 44%o and mainly due to the cost of fuel. Ms. Kearns asked about the Purchase Power Capacity Refund (PPA). Mr. Fournier responded that the Department did not budget a PPA refund. Mr. Cameron clarified that on the Purchase Power Expense, the Calpine issue has increased the percentage along with the cost of fuel. Regular Session Meeting Minutes March 29, 2006 -5- Mr. Soli referred to Page 9, and stated that the cost to the ratepayers had held steady at $0.065 for the fuel charge, but in February the Department had to pay $0.085 for the fuel charge, and the difference came out of the reserves. He asked if the Department is estimating that the amount charged to the ratepayers for April will be $0.065? Mr. Cameron stated that was correct, and through April it should stay at $0.0641, where it's been since December. Mr. Fournier then went over the Budget Expense Variance Report stating that all five operating divisions are under budget to-date except the Purchase Power Base Expense and the Purchase Power Fuel. He said the Deferred Fuel gross charges exceed the Fuel Charge Revenue by $1.1 Million thereby reducing the Deferred Fuel Cash Reserve to $85,000. Mr. Herlihy asked if the CIBFMS was complete? Mr. Fournier responded, "Yes". Mr. Soli referred to the Manpower Report stating that in the Business Division the budget number is 20, however, it has been running at 19, and asked if that was expected to continue. Mr. Cameron responded, "Yes". Mr. Soli said the budget number in Engineering and Operations is 46, and has been running at 43. Mr. Cameron stated that the Department expects to get to the 46 soon. Ms. Kearns asked if there have been additional expenses because of the difference between the 46 and the 43 and others having to do additional work? - Mr. Cameron stated, "not for the most part". Power Supply Update Mr. Seldon was present to give the Power Supply Update. Mr. Seldon prefaced his update stating that the Energy Services Department still owes the written summary for February that will be out shortly. He then proceeded to explain the energy costs for the month of February including the expenses from the Independent System Operators (ISO) for the Reliability Must Run (RMR) contracts. Mr. Cameron explained that the RMR's are payments to generators that the ISO deems necessary for the reliability of an area. He added that the Mystic 8 and 9 units in Everett applied for an RMR contract last summer, but were denied at first, filed again, and were then successful. He said that there is a 345kV underground transmission line that will be completed from Stoughton to K Street in South Boston in June, 2006, and this, line will bring an additional 990 MW of power into the area. He stated there are also transition payments with respect to Locational Installed Capacity (LICAP). Mr. Seldon stated that under the RMR issue if it is deemed by the ISO that the transmission line is not going to relieve congestion in the area, the estimated impact to Reading through the year 2010 is about $27 Million or $446,000 per month that will be tacked onto the energy portion of the RMLD's bill. He stated the $446,000 was included on the February bill. Mr. Cameron believes the ISO will be taking another look at this issue, and he said that if the issue goes to litigation he will keep the Board informed in Executive Session. Mr. Hahn asked if this is a fixed RMR payment that is approved by the FERC? Mr. Seldon responded, "Yes". Regular Session Meeting Minutes March 29, 2006 -6- Mr. Hahn suggested that someone look at the filing. He asked if once the transmission line is complete, would the payments go into NSTAR's transmission tariff? Mr. Cameron responded, "Yes". Mr. Hahn asked if the Department would then see an increase in the transmission rates and continue to pay RMR payments. Mr. Cameron responded, "Yes", and said that the Department is trying to manage this, is not in this alone, and will find out what the cost is to fight this issue. He added that further discussion will be in Executive Session. American Public Power Association (APPA) 2006 Reliable Public Power Provider (RP3) Award Mr. Cameron announced that the Department has been awarded the Platinum level in APPA's RP3 Program. Mr. Cameron gave the background on the requirements for the award, and said that he would be picking up the award at APPA's Annual Conference in April. He stated this award is a credit to the RMLD's employees. 2006-2007 General Manager Performance Review Guidelines Mr. Soli stated there was a meeting with Mr. Hahn, the General Manager, and him, and they reached agreement to bring the guidelines to the Board. Mr. Soli stated there was no mention of the Calpine issue in the present guidelines and suggested that Item #19, "Resolve the Calpine Problem", be added, and the score would be by RMLB evaluation with 20 points possible. Discussion ensued on how to amend the guidelines, what assignments get added, and consideration of judging the General Manager on what he does and what he can do as opposed to things beyond his control A motion was made by Ms. Kearns and seconded by Mr. Hahn to add Item #19, Resolve the Calpine Issue, to the General Manager's Performance Review Guidelines. Motion carried 4:0:0. A motion was made by Mr. Soli and seconded by Ms. Kearns to accept the General Manager's Performance Review Guidelines as amended. Motion carried 4:0:0. Board Discussion Attendance at the APPA National Conference June 10-14, Chicago, Illinois Commissioner Hahn would like to attend this conference. Mr. Herlihy stated that Commissioner Hahn has expressed an interest in attending this conference. A motion was made by Ms. Kearns and seconded by Mr. Soli that the cost of Commissioner Hahn's attendance at the APPA National Conference in Chicago, Illinois, on June 10 through June 14 be approved. Motion carried 3:0:1. (Mr. Hahn abstained.) Mr. Soli asked if the General Manager would be attending. Mr. Cameron stated that he wanted to check the budget and would get back to the Board. Chairman Herlihy stated that if the General Manager or any employee has an opportunity to attend a conference with a purpose such as this one then he/she should. Rate Comparisons, March 2006 Mr. Cameron gave the Rate Comparisons and stated they have not changed much. Mr. Soli asked if the Rate Comparison chart font could be enlarged. Mr. Seldon made note of Mr. Soli's request. Regular Session Meeting Minutes March 29, 2006 -7- E-Mail Explanation for Account Payable and Payroll Removal Sheets No comments. Next Meeting Dates Wednesday, April 19, 2006 RMLD Board Rotation at Citizens' Advisory Board (CAB) Meetings No CAB meeting scheduled at this time. In closing, Mr. Herlihy related his background on the Board and thanked the Board members, the CAB members, and many of the Department's employees. Executive Session (General Manager's Conference Room) At 9:12 p.m. Ms. Kearns made a motion seconded by Mr. Soli that the Board go into Executive Session to discuss the minutes and to discuss the collective bargaining agreements, and to return to Regular Session for the sole purpose of adjournment. Motion carried by a polling of the Board 4:0:0. Mr. Herlihy - Aye; Ms. Kearns - Aye; Mr. Hahn - Aye; Mr. Herlihy - Aye. Motion to Adjourn At 9:21 p.m; Mr. Soli made a motion seconded by Mr. Hahn to adjourn the Regular Session. Motion carried by show of hands 4:0:0. Mr. Herlihy - Aye; Ms. Kearns - Aye; Mr. Hahn - Aye; Mr. Herlihy - Aye. A true copy of the RMLD Board of Commissioners minutes as approved by a majority of the Commission. Ellen C. Kearns, Secretary RMLD Board of Commissioners