Electric City Power, Incorporated (ECPI): Regular meeting of the Board of Directors Great Falls Civic Center, Gibson Room
CALL TO ORDER: 5:30 PM
ROLL CALL: Directors present: Chairman Bob Pancich, George Golie, Randy Gray Bill Ryan, and Dawn Willey. Also present were the ECPI Executive Director, City Manager, Assistant City Manager, Administrative Officer and the Operations Supervisor.
EXECUTIVE DIRECTOR REPORT
Executive Director Coleen Balzarini updated the Board on the recently released R.W. Beck independent engineer’s analysis of the proposed Highwood Generating Station. She noted that R.W. Beck reviewed the work done by Stanley Consultants on plant design, construction, fuel procurement, environmental permitting and performance, operations and maintenance and beyond. The report included two different sets of cost assumptions: one at the predicted cost levels, and a “sensitivity case” that assumed substantial cost escalation. Under both scenarios, the report concluded that the cost of power from Highwood Station will be competitive in the Northwest.
The next step will be to proceed with Phase II of the R.W. Beck work which includes assistance with customer base development, load forecasting, and support for financial documents relating to the City’s issuance of debt to finance its share of construction costs. An outline of the Phase II work will be provided at the next Board meeting.
Balzarini then reported to the Board that ECPI’s status with the Montana Secretary of State had been updated to “active” status after the necessary documents were filed with that office.
Administrative officer Jordan Love provided a brief update on the City’s legislative activities surrounding energy. He reported that two of the City’s legislative proposals that would enhance its role as an electricity supplier in Montana were tabled in the House Federal Relations, Energy, and Telecommunications Committee. Balzarini gave the Board an overview of House Bill 25, sponsored by Representative Alan Olson. The bill would allow NorthWestern to build generation facilities and build the costs into the rates of its customers after pre-approval by the Montana Public Service Commission.
Approval of Board Minutes from January 8, 2007.George Golie moved to adopt the minutes and Randy Gray seconded the motion. The January 8, 2007 minutes were approved unanimously.
Election of Officers. Bill Ryan moved to retain the current officers in their positions. Randy Gray seconded Ryan’s motion. The Board voted unanimously to retain the current officers.
Consider recommendation of proceeding to Phase II of independent engineer’s analysis to the Great Falls City Commission. George Golie asked about the cost of the second phase of R.W. Beck’s work. Executive Director Balzarini told the board that the exact costs cannot be know because the scope of Phase II is more fluid and will vary depending on the tasks involved. She noted that the majority of Phase II work will relate to the City’s customer base development and financing for its share of the project. Randy Gray then moved to enter discussions for recommending proceeding to Phase II. Bill Ryan seconded the motion and it was unanimously approved. Executive Director Balzarini told the Board that she would have an outline of the various Phase II tasks for the next meeting.
Public Comment
Stuart Lewin said that the R.W. Beck study did not include a discussion of a carbon tax. He added that Wall Street discussion on a carbon tax is that a potential tax will not affect all sources equally, but will rather focus on mass producers. Mr. Lewin was also concerned about the City’s sales of electricity below cost and how the City’s water credits would be repaid if Highwood Station is not built.
Cheryl Reichert discussed her concerns regarding Highwood Station mercury controls and emissions. She stated that nowhere in the EIS was activated carbon injection technology mentioned and that sub-bituminous coal has not been burned in a CFB boiler. She also asked if J.T. Boyd would be available to discuss studies of coal supplies in the Great Falls area.
Rich Liebert noted that mining coal in the Great Falls area is likely not cost-effective and would therefore be counterintuitive. He referenced his quote in the Great Falls Tribune that the R.W. Beck study was “professionally done,” but noted that analogies could be drawn between power sales operations and the Iraq War. He stated that conservation and efficiency should be the emphasis. He then asked if there was a contract between SME and the City. Executive Director Balzarini responded that there is an all requirements contract between the City and SME through 2011.
Charles Bocock spoke about SME load forecasts. He then referenced the R.W. Beck study and its discussion of SME’s reservation of 65 MW of transmission capacity.
Charles Christensen asked when the city knew of the change in price projections for Highwood Station. Executive Director Balzarini responded that the price is now more firm because the prices for the largest plant components have been secured. The prices became know in the past month or so.
Ken Thornton noted that a carbon tax will affect different generation technologies in different ways. He also talked about distributed generation. Mr. Thornton noted that the R.W. Beck analysis did not include an estimate of what form a carbon tax would take. Executive Director Balzarini responded that there is no clear consensus on what policy proposals the United States will adopt to reduce US anthropogenic carbon dioxide emissions. It could take the form of a flat tax on all sources, a cap and trade system could be implemented, among others. In some scenarios, such as capturing the carbon dioxide for enhanced oil and gas recovery, it could be a net benefit to the project.
Brett Doney, President of the Great Falls Development Authority, told the Board that he appreciates their work in taking charge of Great Falls’ energy future. He noted that competition for energy is key to economic development. He also said the City’s partnership with SME is a great example of urban/rural cooperation, and the energy development and associated businesses are target sectors for the GFDA. A stable source of electricity such as Highwood, along with a large source of water such as the Missouri River are main elements used by data centers such as those recently built on the Columbia River by Yahoo and Google.
Ron Madsen said he believes Great Falls should seek renewable forms of electricity, and said the future does not lay with coal.
Carol Fisher asked the Board from where ECPI gets its money. Bill Ryan responded the ECPI’s revenues come from its power sales. Coleen Balzarini added that the City Commission approved the issuance of up to $2 million of general obligation bonds for its share of development costs for Highwood Station.
Ole Stimac thanked the Board for its work and said that he is excited for plant construction to begin and for the jobs it will bring.
ADJOURN: Executive Director Bob Pancich adjourned the meeting at 6:45 PM. The next meeting is set for April 2, 2007 at 5:30 in the Gibson Room of the Great Falls Civic Center.
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