Electric City Power, Incorporated

JOURNAL OF BOARD PROCEEDINGS

November 2, 2009

Electric City Power, Incorporated (ECP): Regular meeting of the Board of Directors
Great Falls Civic Center, Gibson Room

CALL TO ORDER: 5:30 PM

ROLL CALL: Directors present: George Golie, Bill Ryan, Bob Pancich, Lee Ebeling and Olaf Stimac. Also present were the ECP Executive Director, Assistant City Manager, Acting City Attorney and the City Clerk.

I.  EXECUTIVE DIRECTOR REPORTS

Executive Director Coleen Balzarini updated the Board on the following:

Financials.

• Page 4, Balance Sheet – the first quarter of the fiscal year was completed.
• Page 11, the notes regarding the water credits were updated. She explained that the table shows the amount of water credits that were accumulated over the years, and what the anticipated pay back will be for them. The table will be modified and updated to reflect the gas plant as up and running in 2012, and it should be paid off in 2018.
• She reminded the Board that on July 7, 2009, the City Commission approved staff to move forward to engage a consultant to submit an application with DNRC modifying the point of diversion for raw water to operate the plant. There will be infiltration wells that will be used instead of the water being drawn directly from the river.
• Page 5, Revenue and Expenses – the first quarter revenues were 3% higher than budgeted. Energy expenses were 1.5% higher. The balance of net operating income was $93,861. After subtracting non-operating revenues and expenses, the balance was $76,133. Director Pancich asked what the unreadable words were under operating expenses. Ms. Balzarini responded that the first line is for travel; the second line is other services. Director Stimac inquired if the positive difference of $42,000 between July and September was a trend that is expected to continue. Ms. Balzarini responded that there will be rate adjustments, there could be a negative in some months, but the end of the year should be positive. Director Ebeling asked if there was an analysis of the new blended rates versus what the difference would have been if ECP had not gone to the blended rate. Ms. Balzarini responded that she can provide the previous base rate, but she does not have the information regarding the imbalance sales because they are all pooled now. The money on deposit with Southern is the difference between what the base rate would have been paid under the pass through rate and what it is under the blended rate.
• Page 16 includes the comparisons between NorthWestern Energy, Southern Montana and Electric City Power for FY’s 2008/2009 and 2009/2010.

U.S. Department of Interior letter dated September 30, 2009.  Ms. Balzarini commented that this item was included for informational purposes.  This letter was submitted by the Department of the Interior to the Department of Environmental Quality during the comment period for the air quality permit for the gas plant.   

City of Great Falls, et al. vs. PSC/NWE (Cause No.  CDV-09-127).  Ms. Balzarini reported that this item is Electric City Power’s reply to NorthWestern Energy and the Public Service Commission in regards to the meters and serving ECP’s customers.  Director Pancich commented that Harley Harris made some good arguments.  Ms. Balzarini reminded the Board members that the Complaint filed in this matter is scheduled for hearing in District Court in December. 

In the Matter of Electric City Power Petition for Certification of an Eligible Renewable Resource and Request for Waivers (Docket No. D2009.5.61), Order No. 7037.  Ms. Balzarini reported that ECP had made application to the PSC to accept the co-generation facility at the Wastewater Treatment Plant as a renewable energy resource.  ECP asked to be exempted from filing those credits with Western Renewable Energy Generation Information System (WREGIS).  This entity records and tracks the transactions related to the use of renewable energy credits.  Because all of the energy generated and all of the renewable energy credits stay on site at the Wastewater Treatment Plant, ECP argued that it was not necessary to register with WREGIS.  The PSC was concerned about having some way to readily see and track how many credits had been generated, who was using them, and making sure they weren’t used twice.  PSC did require ECP to register with WREGIS and both parties are working together to get that information on-line.    

In the Matter of Renewable Portfolio Standard Compliance Filings for Compliance Year 2008 (Docket No. N2009.10.137), Notice of Commission Action.  This action is in regard to electricity suppliers required to have 5% of their portfolio in renewable energy credits.  This came into effect after the 2007 legislative session.  ECP first wanted to get its co-generation facility recognized for its credits.  There was an exemption to the requirement in the statute for any contracts with customers prior to April of 2007.  At that time, ECP believed it was exempt from compliance until 2011.  However, the statute further set forth that if the contracts were re-written or modified the requirement applied.  ECP had the same contracts, but had renewed, reaffirmed or extended the terms of the contracts and, therefore, was required to comply.  This Order gave ECP and other suppliers until October 30th to respond.  ECP’s response was sent out on Friday.  A copy will be provided to the ECP Board.  Ms. Balzarini further explained that ECP didn’t receive the Order from the PSC advising that it had to register with WREGIS until October.  ECP is asking for a retroactive variance on that registration by requesting that the PSC accept the 2008 co-gen energy output as eligible renewable energy credits.

Chairman Golie asked if there were any questions from the Board members for Ms. Balzarini.  No one responded. 

II.  NEW BUSINESS

Accept Board Meeting Minutes of October 5, 2009.  Lee Ebeling moved, seconded by Bob Pancich, to approve the October 5, 2009, Board meeting minutes.

Chairman Golie asked if there were any inquiries from the public.

Ron Gessaman, 1006 36th Avenue NE, commented that he didn’t believe the City Manager was present at the meeting as noted in the minutes.

Chairman Golie asked if there was any discussion amongst the Board members.  No one responded.

Motion carried 5-0.

NWE Proposed Rates and Adjustments – November.  Ms. Balzarini reported that these documents were included for information purposes.

Chairman Golie asked if there were any comments from the Board members or inquiries from the public.  No one responded.

III.  BOARD MEMBER REPORTS

IV.  COMMUNICATIONS

Handouts from October 5, 2009, meeting.  Ms. Balzarini reported that this item notes that the handouts from the prior meeting were included in the Board member packets.

Public Comment.

Richard Liebert, 289 Boston Coulee Road, believes the ECP Board working towards WREGIS is a good step forward.  He thanked the Tribune for identifying Southern’s BBB rating from the Standard & Poor’s report.  Mr. Liebert expressed disappointment that the BBB rating wasn’t provided to the public via the ECP Board and to the Commissioners last June. 

Mr. Liebert inquired what the expected anticipated cost of the gas plant will be.  Ms. Balzarini responded that it is a multi-phase project.  There is no way of knowing when the final phase will be bid, or to what extent the construction costs will change. 

Ron Gessaman, 1006 36th Avenue NE, expressed concern why the Board members didn’t know about the BBB rating.  Mr. Gessaman discussed some of the contents of report and argued that the cost of the facility will be more than what has been reported.  Director Pancich asked if the $270 million was stated as costs of the facility or the amount of the bonds to be issued.  Mr. Gessaman responded that the report indicates the cost of the facility will be $250 million dollars, and the cost of the financing will be $270 million. 

Travis Kavulla, 725 49th Street South, commented that he was also surprised that the Standard & Poor’s document had not been procured by the ECP Board or the City Commission.  He believes the National Park Service letter to be “revealing” and encouraged the Board to read it.

ADJOURN: Chairman Golie adjourned the meeting at 6:07 p.m. The next meeting is set for December 7, 2009, at 5:30 p.m. in the Gibson Room of the Great Falls Civic Center.