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HomeMy WebLinkAbout2006-03-16 RMLD Board of Commissioners MinutesReading Municipal Light Board of Commissioners Regular Session 230 Ash Street Reading, MA 01867 March 16, 2006 Start Time of Regular Session: 7:37 p.m. End Time of Regular Session: 9:15 p.m. Attendees: Commissioners: Herlihy, Pacino, Soli, and Kearns RMLD Staff. Messrs. Fournier and Donahoe Mses. Parenteau, Antonio, Benson, Gottwald and O'Leary CAB: Vale, O'Neill, Lessard Guest: Pat Schettini, Superintendent of Schools, Town of Reading G~... _ ? Chairman Herlihy called the meeting to order at 7:37 p.m. He read the following statement into the record "This meeting of the Reading Municipal Light Department (RMLD) Board of Commissioners March 16, 2006 is being broadcast 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." Report of the Chairman of the Board Chairman Herlihy reported that last week he attended the Northeast Sustainable Energy Association (NESEA) Conference at the World Trade Center in South Boston. Action Items 1. Groundskeeping/Landscaping 2005-11 Chairman Herlihy pointed out that the successful bidder was well below the Operating Budget allocation. Ms. Kearns asked if Mr. Donahoe had an opinion as to why the bidder's pricing was significantly lower? Mr. Donahoe replied that he believed that the vendor that RMLD had been using for eight years felt comfortable raising their rates. Mr. Donahoe also noted that there is more competition in landscaping than eight years ago, when the landscaping contract was first putout for bid. He said this factor also pushes the pricing down. Mr. Soli asked if the last time this went out to bid there was only one bid? Mr. Soli also asked if all the bidders met the insurance requirements? Mr. Donahoe replied, "yes" to both questions. Chairman Herlihy asked if the groundskeeping/landscaping bid included all the RMLD properties and the substations? Mr. Donahoe replied "yes". Ms. Kearns made a motion seconded by Mr. Pacino that bid 2005-11 for Groundskeeping/Landscaping be awarded to R&S Landscaping for a total cost of $29,400 as the lowest qualified bidder on the recommendation of the General Manager. Motion carried 4:0:0. 2. Material Handler/Bucket Truck Bid Number 2006-5 Mr. Donahoe said that the Department sent out bids to as many truck dealers as they could find, but because the equipment is so specialized there was not a lot of competition for the work. Mr. Donahoe said that the Department received three bids. Chairman Herlihy asked if this is replacing an old truck? Mr. Donahoe replied, "yes". The Department is replacing a track that he was forced to take off the road due to costly repairs. Mr. Donahoe added that the old truck was sixteen years old and had over 200,000 miles on it. Regular Session Minutes 2 March 16, 2006 Ms. Kearns made a motion seconded by Mr. Soli that bid 2006-5 for one Material Handler/Bucket Truck be awarded t James A. Kiley Co. for a total cost of $152,852 as the lowest qualified bidder on the recommendation of the Genei Manager. Motion carried 4:0:0. Selectmen Liaison, Citizens' Advisory Board and Customer Comments Chairman Herlihy asked those in attendance if they had any comments. Chairman Herlihy acknowledged the attendance of the Superintendent of the Reading Schools, Pat Schettini at the meeting. Report of RMLD Board Subcommittees 1. Community Relations Subcommittee (Secretary Kearns) Ms. Kearns reported to the Board that the Subcommittee requested the RMLD staff to draft a comprehensive plan for rolling out the RMLD green power program. Ms. Kearns said that the Subcommittee discussed methodologies for getting this message to the towns that RMLD services. The Subcommittee will be awaiting the General Manager's roll out of this program. 2. Rate Setting Customer Choice (Vice Chair Soli) Mr. Soli said the meeting was posted, but Commissioner Hahn was unable to attend. Mr. Soli had the opportunity, however, to discuss power supply with Ms. Parenteau. [At this point in the meeting, Chairman Herlihy pointed out that the General Manager was unable to be at the meeting tonight and that Jane Parenteau, Energy Services Manager was Acting General Manager this evening.] 3. Green Power Subcommittee (Chairman Herlihy) Chairman Herlihy said that this Subcommittee met immediately before this evening's meeting and previewed some of Quincy Vale's presentation. Presentations 1. Reading Neighbors' Climate and Energy Committee (RNCEC) (Ron D'Addario) Chairman Herlihy introduced Ron D'Addario, the Chairman of the Reading Neighbors' Climate and Energy Committee (RNCEC). Mr. D'Addario thanked the RMLD Board for inviting him to the meeting. Mr. D'Addario congratulated Chairman Herlihy for his successful term of service. Mr. D'Addario introduced RNCEC Committee members present at the meeting, Gina Snyder, Secretary and Co-Founder, and RMLD employee Michele Benson. Mr. D'Addario said that the Committee members consist of Gina Snyder, Michele Benson, Raymond Porter, Stephanie Anderberg, and Tracy Sopchak. Mr. D'Addario then discussed the history and formation of the Cities for Climate Protection (CCP). Mr. D'Addario explained the goals and purposes of the CCP. Mr. D'Addario said that in his opinion, RMLD has stepped up to the plate because Ms. Benson secured $2,000 from the RMLD for the Committee as well as providing a loaned laptop computer. Mr. D'Addario explained that these funds will be used for an intern this summer to assist in directing the first of the Committee's five step program. The first step is to perform a local emissions analysis by using data from the town. Mr. D'Addario said that RNCEC received state grant funds and through the efforts of Mr. Cameron and Ms. Benson it received diesel-oxidizing catalysts to be installed on thirteen of RMLD's vehicles. The total for these is $15,600. Mr. D'Addario said for the next grant year they will be looking into photovoltaics. The RNCEC Committee said that it looks forward to partnering with the RMLD and the towns serviced by the RMLD via its Citizens' Advisory Board. Chairman Herlihy thanked Mr. D'Addario for his presentation. Chairman Herlihy said that the RNCEC Committee's goals mirror some of those of the Department's. Regular Session Minutes 3 March 16, 2006 2. Green Power/Tags and Funding Ideas for Renewable Generating Systems for Schools and Municipal Buildings (Quincy Vale) Mr. Vale said that his presentation would be a primer on renewable energy options for the RMLD. Mr. Vale said that he would address five topics: (1) What is Renewable Energy?, (2) What is Renewable Portfolio Standard (RPS)?, (3) What are Renewable Energy Certificates (RFC's)?, (4) What color is your electricity?, and (5) Three Broad Ideas for RMLD. Mr. Vale said that RPS applies to all power suppliers except municipal light plants. In Massachusetts, RPS obligates power suppliers to include renewable resources in their supply portfolios. Mr. Vale then addressed Renewable Energy Certificates (REC's). Mr. Vale said that REC's serve as the basis for most green electricity products offered to Massachusetts' consumers. Mr. Vale said that to have "green" power either you buy REC's or you make it yourself. Mr. Vale's had three suggestions for RMLD with regard to green power: 1. RMLD could adopt an RPS standard for its portfolio and buy REC's equal to 1% of its annual load, 2. RMLD could establish a "green" rider category that customers could voluntarily elect to join, 3. RMLD could establish a municipal funding account. Mr. Vale said that the Department of Energy is trying to encourage municipalities to adopt a municipal funding account. Mr. Vale said that a municipal funding account works by having RMLD ask its customers if they want to sign up for green power. If they say yes and make a contribution, the contribution goes into an account. Then an RMLD staff person such as an engineer or a subcontractor installs green power initiatives in municipal buildings. Ms. Kearns asked Mr. Vale how his proposed plans encouraged America to make electricity by using renewable resources? Mr. Vale replied that the market is sending a signal that it wants green power whether it is mandatory purchases by a power company such as RMLD or through voluntary purchases by using the REC's. Ms. O'Leary said that since schools are closed during the summer when electricity usage is highest how would photovoltaics on the schools solve the problem? Mr. Vale replied that there will always be a base load used during the summer and such items as fans and emergency lighting is in use. Mr. Vale said that on an instantaneous basis where you are generating more than you use the electricity goes out and gets used by others on the grid. Ms. Snyder pointed out there was a home on the tour of solar homes and she learned that it feeds into the system and zeros out when it produces a lot of load. Chairman Herlihy inquired about the building of the new Reading Memorial High School, and whether electricity costs can be taken off a bill using this technology? Mr. Vale replied that it depends on what you want to do. The payback period is a function on how expensive the alternatives are. Mr. Vale said that if the goal is to save as much money as possible and come up with the best economics, wind is a better economic payback than photovoltaics. He said that the issue with respect to wind power is where do you place the wind turbines. Mr. Schettini thanked Chairman Herlihy for inviting him tonight. Mr. Schettini said that they have a building construction. project, and, to date, have not gone the green route. Mr. Schettini asked Mr. Vale what recommendations he had that they might investigate? Mr. Schettini wanted to know where to begin, and said he wanted to visit other school districts to see how this technology is working. r Mr. Vale responded that he thought the best thing to do was to contact Keyspan, the gas company and review the programs for insulation and replacement of windows. Mr. Soli added that energy efficiency programs are offered to the commercial customers as well. Regular Session Minutes 4 March 16, 2006 Ms. Benson added the RMLD offers a commercial lighting programming for retrofitting of lighting. Ms. Benson brief explained RMLD's retrofitting lighting program and her willingness to come out and assist customers. Mr. Soli added that the program was available to all municipalities in all four towns. Ms. Benson said that each town gets $10,000 per year for this program. Ms. Kearns asked Mr. Vale why he did not suggest that the RMLD buy green power? Mr. Vale said that was part of the first option he presented. Ms. Kearns replied that she understood his fast option to be mandatory versus voluntary. Mr. Vale said that it is more prudent to start on a pilot basis and try something out to determine how much interest before mandatory purchasing. Ms Kearns said that the RMLD recently conducted a customer survey and that sixty percent of the customers in Reading said they would be interested in green power even if the costs were $344 more per month. Chairman Herlihy said that he wanted to review the options for the schools. Chairman Herlihy said that concerned individuals and or businesses could conceivably donate money, which they then could write off on their taxes and the pool for these funds would be created here at the RMLD. The RMLD can accumulate the money to be used to purchase solar panels for the school. Schools can take the solar panels, which could be installed, by the RMLD or a vendor and the schools can use these panels as curriculum to teach about alternative energy. Chairman Herlihy said that he does not see who loses in that equation and there are issues that need to be worked out. Chairman Herlihy is extremely interested in pursuing something along those lines. Mr. Soli said that Wellesley did this. Mr. Soli asked how the 501(c)(3) was established so that donations could be t` deductible? Mr. Vale said that he was unsure how the 501(c)(3), was established, but a contribution to a governmental entity can be a charitable contribution. In Wellesley's case it was the Town of Wellesley that established the account. Mr. Soli said that he would like to get the nuts and bolts of the Wellesley energy program. Mr. Vale said that all options are not mutually exclusive. All could be done at the same time. Mr. D'Addario liked option three because the schools will get a payback immediately. Mr. D'Addario said the RNCEC Committee would like to get behind any one of the options presented. Chairman Herlihy said they will be having further discussions with the Citizens' Advisory Board. He added that it might be an interesting issue to bring to the School Committees in the towns. Chairman Herlihy said that in his opinion whatever option is elected should be a voluntary system. Mr. Schettini said that the School Department stands ready to participate. General Manager's Report 1. Financial Report, January 31, 2006 and Budget Variance Summary Analysis January 31, 2006 Mr. Fournier updated the Board on the January 31, 2006 Financial Report. Ms. Kearns asked when was the last time a payment was made to the Retirement Fund? Mr. Fournier replied that the last payment into the Retirement Fund was made in fiscal year 2004. Ms. Kearns said that since the Department has not made a payment for a year and a half, the next payment would have to be a catch-up. Mr. Fournier said that when Stone Consulting performs its actuarial valuation they will take that into account. Regular Session Minutes March 16, 2006 Mr. Soli asked why Engineering labor had a significant cost overrun? Mr. Fournier replied that Engineering labor was being switched to the Gaw Station Oil Circuit Breaker Replacement Capital Projects. Mr. Fournier said that much of the OCB project has been performed on weekends as overtime. Mr. Soli asked why labor has a line on Transformer Maintenance? Mr. Fournier replied that the Senior Techs were involved heavily in the OCB project, circuit breaker project, being performed on the weekends. Mr. Soli asked about the hazardous waste item. Mr. Fournier replied that it was not the quantity of the incidents that increased that line item; rather it was bigger ones that contributed to this number. Chairman Herlihy said that it looked like the Department had not appropriately budgeted for those spills. Mr. Fournier replied that it was a catch twenty-two if you put too much money in that line item, then the Department could be accused of over budgeting. Chairman Herlihy said that every year this is a budgeting issue, and that it seems to him it always comes in over budget. Mr. Fournier said that he would take this into account for next year's budget. 3. Power Supply Update Ms. Parenteau updated the Board on the January power supply. She said that January's energy costs increased by approximately $818,000 compared to December. She added that the RMLD incurred $1.87 million additional costs by replacing the Calpine contract as a result of market conditions. Since the Calpine contract was executed in 2001, the market has tripled above that contract price. Ms. Parenteau said that December's energy costs were $51.75 a megawatt hour and in January it rose to $67.07. Ms. Parenteau noted that the Deferred Cash Fuel Reserve is at approximately at $1.253 million and January the Department under collected by approximately $111,000. Ms. Parenteau stated that following the last Executive Session meeting on February 22, 2006, an affidavit of the General Manager was developed supporting the motion for relief. The motion for relief and the supporting affidavit was filed with the bankruptcy court in New York on March 3. She said that a date of April 4 has been set for objections to the motion and a hearing date to consider the motion has been set for April 11 at 10:00 a.m. Ms. Kearns asked about the difference between $51.67 versus $67.07, and what would be normal in other months? Ms. Parenteau replied that normal would be in the $48 range in November. Ms. Parenteau pointed out that the amount fluctuates based on market conditions. Natural gas is a big contributor, but the number was also influenced by the $1.8 million of additional expenses for the replacement contract. Ms. Kearns inquired if that was a one-time thing? Ms. Parenteau said that it is not anticipated to go down because the Department has locked into the contracts. Hopefully, once the Department receives relief from those escrow funds the numbers will comedown. Mr. Soli said that the cost will not decrease but the billing will come down if the escrow is received. Chairman Herlihy requested that the Calpine situation be explained to him. Ms. Parenteau said that a motion for relief was filed in court on March 3. The other side has until April 4 to object. On April 11, the court will hear oral arguments on RMLD's position. Regular Session Minutes March 16, 2006 6 Chairman Herlihy said that he was pleased with the fairly expeditious process. Chairman Herlihy said that letters were sent to customers explaining the situation. Ms. Kearns said that the motion that was filed in bankruptcy court said to the court "-we should not be here, because we have a different kind of contract and we should be outside of the Bankruptcy Court." She added, if Bankruptcy Court agrees then RMLD will go into state or federal court and seek an interpretation of the contract, which will hopefully find the Department is entitled to the escrow funds. Mr. Soli asked Ms. Parenteau to discuss year 2007. Ms. Parenteau said that the Calpine contract was in place until October 2007. She, Mr. Seldon and Mr. Cameron will be going to the Board, CAB and Rate Subcommittee with a strategic plan on how to fill that portfolio supply for the period after October 2007. She said that it will involve risk management, diversification, and optionality in terms of where the Department should be buying its energy. Board Discussion 1. Rate Comparisons, February 2006 Ms. Parenteau highlighted the rates. The RMLD is below all the investor owned utilities in its service area. Chairman Herlihy added there is press about NSTAR's rates going down. Ms. Parenteau responded that NSTAR's Time of Use Rate, even with their lower rate, will be eighty percent higher than the RMLD's rate. Chairman Herlihy encouraged those who could contribute to the Good Neighbor Energy Fund to do so because this is a yearly program. 2. Next Meeting Dates Wednesday, March 29, 2006 Wednesday, April 19, 2006 3. Motion to Adjourn At 9:15 p.m. Mr. Soli made a motion seconded by Ms. Kearns 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. Ellen C. Kearns, Secretary J' .3-o-vo voteu iviission Ljocument wain refer s recommenuatiwns: Cities for Climate Protection Committee Reading Massachusetts Mission Statement The Advisory Committee on the "Cities for Climate Protection Program" is an official town advisory committee, comprised of concerned citizen volunteers seeking to achieve environmental, economic and societal sustainability by raising public awareness and influencing the community, including its government, to reduce detrimental environmental impacts and energy expenditures. Specific Goals • Reduce Green House Gas Emissions in order to slow global warming. • Improve air quality to enhance public health. • Foster responsible stewardship of the local and global ecosystem to ensure its longevity. • Foster the conservation of energy sources to preserve them for future generations. • Reduce the energy expenses of the town, residents and businesses to improve our standard of living. 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