Electric City Power, Incorporated

JOURNAL OF BOARD PROCEEDINGS
July 9, 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, and Bill Ryan. Also present were the ECPI Executive Director, City Manager, Administrative Officer and the Assistant City Manager.

EXECUTIVE DIRECTOR REPORT

Executive Director Coleen Balzarini updated the Board on ECPI’s recent power sales activities. Angelo Muzzin from R.W. Beck met with City staff earlier in the month to discuss power sales strategy. All current customers are now contracted for service through 2011 and staff will begin seeking to enter long-term contracts with each as well as approaching other potential large customers. Balzarini noted that the proposed Highwood Generating Station (HGS) will represent a part of ECPI’s supply portfolio, which would include other sources and a renewable component.

George Golie asked if it would be helpful for Board members to be involved in discussions with customers, and Balzarini responded that in some cases it would.

Ms. Balzarini also noted that NorthWestern Energy’s rates are consistently above ECPI’s. She then showed the board current NWE, Mid C forward pricing, and past 30 day average rates.

The Executive Director also reported that she attempted to contact Invenergy to inquire about potential supplies of wind power purchases for ECPI’s portfolio, but has not received a response yet.

I.   OLD BUSINESS

II.  NEW BUSINESS

Accept Board Meeting Minutes of June 4, 2007.Randy Gray moved to accept the Board minutes from the June 4th meeting. George Golie seconded the motion and the minutes were accepted unanimously.

III. BOARD MEMBER REPORTS

Bill Ryan reported that he had attended the last SME project meeting in Billings and discussed the project’s progress. He noted that he was impressed with SME’s progress in moving HGS forward.

Coleen Balzarini added that the Rural Utility Service was contemplating the idea of adding a loan origination fee to SME’s loan somewhere in the 2% range.

IV.  COMMUNICATIONS

Executive Director Balzarini discussed The Future of Coal report produced by the Massachusetts Institute of Technology that discusses the role of coal fired electricity in a carbon constrained world. She reported that the actual document is roughly 200 pages and that the Executive Summary was included as a guide for further reading.

Randy Gray noted that Chapter 3 of the report which discusses coal technologies for carbon capture and sequestration is of particular interest.

Public Comment. Neil Taylor said he was pleased that staff had attempted to contact Invenergy regarding purchasing power from the Judith Gap Wind farm.

Kathy Gessaman asked the Board if the possible 2% loan origination fee being discussed would apply to ECPI’s portion of the total project cost. Balzarini responded that the possible 2% fee would only apply to SME’s loan to pay for their portion of the project, not ECPI’s.

Ron Gessaman asked the Board to speak more loudly. He also said that the MIT report discussed earlier in the meeting said that the United States should not fund power plants that do not use carbon capture and sequestration technology and that integrated gasification combined cycle (IGCC) technology was the technology of choice.

Mike Witsoe discussed the labor arrangements for the project and said that there are not sufficient laborers in Great Falls to meet all of the needs. He also said he thought there is insufficient rail infrastructure to support the needed coal trains for HGS. George Golie noted that coal trains frequently pass through Great Falls already.

ADJOURN: Executive Director Bob Pancich adjourned the meeting at 6:15 PM. The next meeting is set for August 6, 2007 at 5:30 in the Gibson Room of the Great Falls Civic Center.