Electric City Power, Incorporated

JOURNAL OF BOARD PROCEEDINGS

November 5, 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, Bill Ryan and Dawn Willey. Also present were the ECPI Executive Director, City Manager, Assistant City Manager and the City Clerk.

EXECUTIVE DIRECTOR REPORT

Executive Director Coleen Balzarini updated the Board on the following:

Chairman Robert Pancich’s term expires December 31, 2007. The bylaws do not limit
terms. Mr. Pancich is eligible to be reappointed and, if he is interested, his name will be submitted to the City Commission with the recommendation that he be reappointed to a new six year term.

Ms. Balzarini explained that the minutes have not included signature lines and there was no way to determine originals. She stated she updated all the Board minutes with the Executive Director/Secretary’s signature retroactively and approved dates reflecting the date of execution.

Ms. Balzarini updated the Board on the Wholesale Power Contract between Southern Montana Electric and the City of Great Falls. Each party signed off on the agreement through the life of the Highwood Generating Station facility. The agreement is essentially the same, but adds more detail of duties and responsibilities. Bill Ryan noted that language regarding distribution system ownership was included, but he stated it is not ECPI’s intention of acquiring NorthWestern Energy poles or wires. The wording was included to recognize the authority exists in the event substations or something similar is required to be purchased by ECPI to ensure energy delivery to its customers.

I.   UNFINISHED BUSINESS

Ms. Balzarini advised that the PSC is in the rule making process for HB25. Counsel submitted questions to the PSC asking for clarification with regard to the effect HB25 has on ECPI’s licensing requirements. George Golie asked if the attorneys were looking at where the pilot program exists in the rule making process. Ms. Balzarini stated if no changes were made to energy supply laws, it was her understanding that as pilot program customers drop off or go away, so will the program.

II.  NEW BUSINESS

Accept Board Meeting Minutes of September 10, 2007. George Golie moved to accept the Board minutes from the September 10th meeting. Bill Ryan seconded the motion, and the minutes were approved by the Board unanimously.

Approve Assignment and Assumption Agreement between ECPI and the City of Great Falls. Ms. Balzarini explained that the City is the member of SME, and the City created ECPI to serve its electric customers. This agreement is a bridge document that allows ECPI use of the customer contracts as security for HGS financing, as well as assigning duties and responsibilities related to the energy supply business created by the City to ECPI. The City Commission approved this agreement on October 2, 2007. George Golie moved to approve the Assignment and Assumption Agreement between ECPI and the City of Great Falls. Dawn Willey seconded the motion, and the agreement was approved by the Board unanimously.

III. BOARD MEMBER REPORTS

IV.  COMMUNICATIONS

Public Comment.

Mary Jolley commented that the Great Falls legislators voted to buy the poles and lines from NorthWestern, but it failed. Ms. Jolley inquired what the rates will be that the City will charge when approved. Ms. Balzarini answered that the rates will be the same as the City of Great Falls is being charged.

Kathleen Gessaman requested a copy of the Assignment and Assumption Agreement between ECPI and the City of Great Falls, and Bill Ryan provided her a copy.

Ron Gessaman stated he arrived late and inquired if there was mention earlier of the Montgomery Energy lawsuit, and was informed no. Mr. Gessaman discussed the lawsuit and how it might affect the Highwood Generating Station. It was his opinion that this Board should investigate this lawsuit. Mr. Gessaman commented about the Board Member terms and the bylaws, and that a certification or attestation should be added to the minutes to swear the wording is accurate.

ADJOURN: Chairman Bob Pancich adjourned the meeting at 6:00 p.m. The next meeting is set for December 3, 2007, at 5:30 p.m. in the Gibson Room of the Great Falls Civic Center.