Electric City Power, Incorporated

JOURNAL OF BOARD PROCEEDINGS
June 4, 2007

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. Also present were the ECPI Executive Director, City Manager, Administrative Officer and the Operations Supervisor.

EXECUTIVE DIRECTOR REPORT

Coleen Balzarini introduced Sandra Wittke who will be replacing Jordan Love at the ECPI meetings starting in August. Love will begin graduate studies at Columbia University in the fall.

City Manager John Lawton spoke to the board about the City’s ownership share of Highwood Station. After an updated load forecast showed that the SME cooperatives’ needs had increased, the City’s share is now projected to be 15%. He stated that in the project’s five years of development, there have been several changes in the size and ownership shares of each of the SME members. The formula used to arrive at the current 15% is the same. HGS Capacity minus the cooperatives’ share equals the City’s share. The cooperatives’ loads have grown more than expected, hence their expanded share. Lawton noted that further changes are possible before the financial closing. Based on the assumption of one-quarter ownership, the City has contributed 25% to the development cost thus far. At the time of financial closing, the City’s final payment will be adjusted to reflect previous payments and final ownership share.

SME General Manager Tim Gregori presented a short history of the relationship between SME and Electric City Power. Gregori outlined the milestones reached in the project so far, and other milestones that are in the works for completion of the project. He answered questions again about why Highwood Station is planned to be located in Great Falls, and presented the physical changes to mitigate the plant’s impact on the Lewis and Clark Portage Route. Gregori noted that the financial allocation for the project is part of the Federal budget for 2008, so when it is passed the funds will be available.

Jeff Chafee from Bison Engineering presented an overview of SME’s research and development work to capture and sequester carbon dioxide from Highwood Station The Big Sky Carbon Sequestration Partnership from Bozeman is working on finding places to store CO2. He reported that geologic formations north of Great Falls are ideal for storing CO2 and that the project’s proximity to them could present a good opportunity for enhanced oil and gas recovery. Chairman Bob Pancich noted that oil companies may be willing to pay for the CO2 to increase their production.

Coleen Balzarini gave a sales program update, outlining the progress to date. Angelo Muzzin from RW Beck was scheduled to meet with her last week but had to cancel so there was no report on that meeting. Balzarini clarified the ECPI/City financial obligations in response to questions from the public. The City Commission passed Resolution 9534 in Dec. 2005. Resolution 9534 is a General Obligation of the City, meaning the City’s general fund is a co-signer on the non-voted general obligation debt authorized by the City Commission. She added that that portion of debt issued for development costs will are planned to be repaid by revenues from power sales.

Jordan Love reported on the ECPI Ordinance passed by the City Commission. At the time of passage, it was unknown exactly what form the City’s electric utility would take (i.e., if it would own any distribution facilities, which customer segments it would serve, if it would serve the entire community.) With the passage of House Bill 25 by the 2007 Montana Legislature, ECPI’s role can be more clearly known. As a result, Staff will begin a review of the Ordinance to determine if any changes are needed. Love noted that the Ordinance requires the board to consider and recommend rules from time to time and that staff would begin work on this element soon.

I.   OLD BUSINESS

Executive Director Balzarini gave an overview of the rates that ECPI customers pay for electricity and how they relate to those of NorthWestern Energy. She explained that ECPI Customers are attracted to ECPI because of the stability of pricing and lower rates.  Balzarini explained that the pricing structure of ECPI is outlined in individual customers’ contracts.

Recommendation to Great Falls City Commission RE: RES 9648, Establishing Electric City Power rates through June 30, 2011, for Block One Customers. There was a motion by George Golie to recommend to the City Commission to approve rates for Block 1 customers and ratify rates the City has been paying. The motion was seconded by Bill Ryan and he noted that ECPI’s rates continue to be below those of NorthWestern Energy and that this equated to substantial savings for its customers. The motion was passed unanimously.

II.  NEW BUSINESS

Accept Board Meeting Minutes of May 7, 2007.George Golie moved to accept the Board minutes from the May 7th meeting. Randy Gray seconded the motion and the minutes were accepted unanimously.

III. BOARD MEMBER REPORTS

IV.  COMMUNICATIONS

Executive Director Balzarini spoke to clarify and correct misinformation about air quality modeling data produced for the HGS Air Quality Permit. She stated that according to the Air Quality Permit on-site monitoring was used in addition to monitoring from the Great Falls International Airport.

Public Comment. Neil Taylor expressed appreciation for clarification on several questions he had from last month and urged the Board to consider Wind energy from the future Judith Gap Wind Farm.

Ron Gessaman said he believed the Board was not following its own by laws. He asked the board to consider buying energy from other potential sources. He stated that combustion style plants suffer a 4.8% penalty and felt that selling power outside of the City was not within the ECPI’s statement of purpose.

It was discussed and decided that the next meeting would be held Monday, July 9th, instead of July 2, due to the 4th of July holiday.

The meeting was adjourned at 7:00 pm.