Electric City Power, Incorporated

JOURNAL OF BOARD PROCEEDINGS
August 6, 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, and Bill Ryan. Also present were the ECPI Executive Director, City Manager, Assistant City Manager, Operations Supervisor, and the City Clerk.

EXECUTIVE DIRECTOR REPORT

Executive Director Coleen Balzarini updated the Board on the following:

It had been brought to the ECPI Board meeting previously that Invenergy, the owner of the Judith Gap Wind Farm, was willing to sell firmed wind power to ECPI at $42 per mW. Ms. Balzarini spoke to John Bacon, who referred her to Mark Jacobsen with Invenergy. Mr. Jacobsen stated they are currently offering power from new wind mill structures to be built, and are currently looking for customers to purchase this power. They are projecting customers to purchase 35-50 mW’s blocks of power in the $50 non-firm range. Ms. Balzarini stated staff is currently drafting an RFP, tentatively slated for October release, for renewable power sources for the ECPI power portfolio.

The lawsuit filed against the RUS regarding the Record of Decision resulting from the Environmental Impact Study is currently being reviewed by SME. SME will have an opportunity to respond to the deficiencies stated in the lawsuit. Ms. Balzarini stated that the EIS was accepted by Montana DEQ, and DEQ has issued an Air-Quality permit to Southern Montana Electric. She stated that there are time frames, limits, and guidelines to be followed in the objections process which will keep things moving forward.

The lawsuit filed against Cascade County regarding the zoning application had resulted in the Cascade County Commission re-writing their ordinance. It is expected that the change will be complete in October or November, and the property owners may then reapply for the zoning change in December or January.

City Manager, John Lawton, spoke to the Board regarding HB 25 and its effects on ECPI/City Contracts. HB 25 is the new legislation passed during the last session to “re-regulate” electricity supply in Montana. Any choice customers must settle contracts with non-default suppliers by October 1, 2007, to remain out of the default supply. Our existing customers currently have contracts thru 6/30/2011. The intent of these contracts is to keep our customers options open, and the clear intent to stay out of the default supply. He stated that these contracts are a cost-based, plus contract, meaning the price would be the cost of generation, plus related expenses such as an administrative fee. The contracts also contain a section regarding the status of contracts should Highwood Generating Station not be built. The contracts would revert from 30 year contracts, to 5 year contracts, with renewable terms. Currently, ECPI has 30 mW’s of current customers, 10 mW’s are in negotiations, and a 20 mW customer in the works. Again, ECPI is working on an RFP to add 6 to 10 mW’s of renewable power to our portfolio. This will consist of the co-generation facility at the waste water treatment plant, which is currently in the final testing stages. This process is taking renewable, methane gas and turning it into energy. This process controls emissions, with green power control. Staff is working on the final stages of the Air Quality Permitting Process.

I.   OLD BUSINESS

II.  NEW BUSINESS

Accept Board Meeting Minutes of July 9, 2007.George Golie moved to accept the Board minutes from the July 9th meeting. Bill Ryan seconded the motion. All three Board Members voted to accept the Board minutes in Individual Voting.

III. BOARD MEMBER REPORTS

IV.  COMMUNICATIONS

Public Comment.

Ron Madsen, Great Falls, stated that Mangie Consultants, who was hired to review the RUS lawsuit only “collates, checks, and makes sure the hoops have been jumped thru”, and not the facts of the issue. He stated that the rezoning lawsuit was filed by 40+ landowners.

Ron Gessamen, Great Falls, stated he again had an issue with ECPI not following their own by-laws. The agenda was not posted or the minutes were not available as required in the by-laws before the May, June, July and now August meeting. He stated the Executive Director was “non-existent”, and was not elected or approved by the Board. George Golie responded that the ECPI board approved the Executive Director and the By-Laws during the first or second meeting.

Ken Thorton, Great Falls, stated that Tim Gregori, with SME, doesn’t realize the problem with all plants regarding CO2 emissions. He stated Mr. Gregori seems to think Highwood will be a test plant for control programs. Mr. Thorton stated that there are over 11,000 coal-fired plants in the US, and that Highwood would probably not be selected as a test plant. He again expressed the need to include the cost of carbon sequestration be included in the projected costs of the plant.

ADJOURN: Executive Director Bob Pancich adjourned the meeting at 6:05 PM. The next meeting is set for September 10, 2007 at 5:30 in the Gibson Room of the Great Falls Civic Center.

Minutes Approved by ECPI Board September 10, 2007.