MOUNTAIN PARKS ELECTRIC, INC.
Regular Meeting of the Board of Directors Granby Colorado
February 10, 2022
Present: Jeff Hauck, Carl Trick, Richard Zieff, Mark Volt, Liz McIntyre, Kristen Taddonio, Justin Fosha, Mark Johnston, Joe Palmer, Rob Taylor, Jessica Rahn, Stacie Dellamano, Donn Finn, Scott Simmons and Bryson Fredregill all via ZOOM.
Call to Order
President Jeff Hauck called the meeting to order at 8:00 a.m.
Determination of Quorum
A quorum was declared.
Jonathan Larson, Director of Base Operations Winter Park Resort joined at 8:02 a.m. Mr. Larson discussed the installation of EV chargers with the financial assistance of Mountain Parks Electric (MPE) and Tri-State. He explained the resort’s efforts to update their 10-year electrical plan. After completing the 10-year plan the resort will discuss future needs with Mountain Parks Electric. The resort would like to raise its awareness and would like to attend board meetings in the future. Winter Park Resort is looking at the feasibility of a floating solar array which could raise awareness of sustainability with the public as it will be very visible to guests. Discussion ensued about community solar and other options for other sustainable resources, and the possibilities of a partnership with MPE.
January meeting minutes were presented to the board.
MOTION: It was properly moved, seconded, and carried to approve the minutes for the January board meeting.
Attorney Summary Fees Report
Attorney Fredregill asked the board to review summary report emailed prior to the board meeting and had no additional updates during the open session. Director Hauck asked to add board/ attorney relationship to executive session.
- MPE requested Electric Thermal Storage (ETS) members to certify that their systems were still in place and operating. MPE received 356 ETS certification forms, covering approximately 96.4% of the total members; 16 members did not self-certify. MPE staff believe the MPE system can provide the information necessary to determine whether ETS units are operational. This would eliminate the need for members to certify.
- American Express was added as an option for member payment as of January 11th, 2022.
- Update on Winter Park Land. Rahn investigated connection to town and water/sewer. To be eligible for town water and sewer, the property must be annexed into the town. The town would not want to annex the land without a development plan in place; however, the property could be considered for annexation without a plan but likely only with limited use such as open space, forest, or agriculture.
- FERC settlement: The parties filed direct testimony filed by parties on January 7th, with answer testimony filed on February 4. Discovery has been ongoing, with many requests by parties on all sides. Hearing starts in May. FERC has not yet ruled on United Power’s motion for clarification of a “conditional notice”.
- On January 14th Tri-State presented a comparison of its modified contract termination payment methodology (Make Whole) and the methodology proposed by United (Balance Sheet).
- Johnston attended the CEO quarterly meeting with Tri-State. Member System CEOs held an Executive Session with Duane Highley to discuss the settlement process. Participants had the opportunity to ask and answer numerous questions. It appears there is still a chance to settle prior to the hearing.
- Fiber/broadband: Fraser, Winter Park, and Middle Park Health requested an update on our Fiber project. Middle Park Health is building a facility behind the Foundry in Fraser and would like to tie into MPE’s fiber. Construction will begin summer 2022.
- Attorney Williamson and MPE staff had a call with a law firm specializing in fiber agreements and leasing fiber to third parties. They provided options and advice on how MPE might proceed. MPE has asked for a proposal from the firm. MPE continues to have discussions with Conexon to gauge their level of interest in providing Fiber to the Home (FTTH). Conexon received Federal funds to provide FTTH service to MPE’s service territory. If Conexon does not commit to providing the FTTH by March 31st, MPE will issue an RFP to invite other interested parties to provide FTTH service.
- NRECA Next Conference. Johnston reported on the conference, including several good speakers on several topics such as the fast-changing world of electric service, EVs, and cybersecurity. The conference included energy managers from several large companies, including Caterpillar, Tesla, Target, and Wal-Mart. The conference provided an opportunity to meet with several vendors that offer services MPE could utilize: drones to monitor electric lines, solar developers, and battery storage.
- MPE’s safety coordinator, Brian Lee, resigned in January. MPE has begun recruiting for a new safety coordinator.
- Director Trick suggested MPE listen to the presentation from Jeff Wadsworth on the microgrid system PVREA constructed at Red Feather Lakes.
Johnston reported that MPE did not experience internal accidents, incidents, or near misses. On December 14th a semi-truck hit an MPE pole. On Dec. 23rd a bus hit another pole. On January 4th, a snowplow hit a transformer vault. All incidents are being handled by insurance. The Safety Committee & loss prevention remained active with training.
MOTION: It was properly moved, seconded, and carried to approve the Safety Report.
Discussion/Action Item B: Approve Election Supervisory Committee
The proposed Election Supervisory Committee members and alternates were presented to the board. Two of the supervisory committee members have served previously. Relevant policies and guidance are presented to the committee prior to the election.
MOTION: It was properly moved, seconded, and carried to approve the Election Supervisory Committee and alternates as presented.
Discussion/Action Item C: Approve Date of Record for Director Election Voting
April 4th, 2022, was proposed to the board as date of record for member participation in the 2022 Annual Meeting, including director elections. To participate in the annual meeting, including voting in director elections, one must be a MPE member by April 4th, 2022. The record date occurs 40 days before annual meeting to allow MPE sufficient time to provide notice of meeting and to mail out ballots.
MOTION: It was properly moved, seconded, and carried to approve April 4th, 2022 to be date of record for member participation in the 2022 Annual Meeting.
Discussion/Action Item D: Discussion of District Member Count
Directors discussed member representation in districts. Directors discussed the MPE Bylaw provisions regarding district review, which provide for consideration of factors such as equality of representation, historical development of the cooperative, natural and geographic conditions, existing residential, commercial and industrial developments, and potential changes in population and development for determination of district boundaries. Johnston suggested using a third party to determine how redistricting might be done to make representation more equitable. Directors moved to hold a special meeting after the 2022 Annual Meeting to discuss the issue.
MOTION: It was properly moved, seconded, and carried by majority to set up special meeting after the annual meeting regarding district boundaries.
Discussion/Action Item A: B-1 Board of Directors and General Manager
Johnston presented Policy B-1 to the board with redlines.
MOTION: It was properly moved, seconded, and carried to approve B-1 as presented.
Discussion/Action Item E: RUS Refinance Loan Document Approval
It was reported that the CoBank resolution and loan documents had been uploaded to Call to Order. CFC revised its proposal presented to the Board at the January meeting, basically adjusting interest rates based on market changes. Staff provided CoBank an opportunity to provide a revised proposal. After reviewing both proposals, Staff decided to move forward with CoBank. MPE was able to lock in interest rates for 60 days. The new rates allow MPE to save up to $1.5 million.
MOTION: It was properly moved, seconded, and carried to approve the resolution authorizing refinance of Rural Utility Service loans to CO Bank as presented.
Discussion/Action Item F: MPEI Capital Credit Presentation
Manger Dellamano presented on capital credits.
Discussion/Action Item G: Western United Delegate Designee for Annual Meeting
It was proposed to appoint Director Zieff as MPE’s delegate and Director Hauck as alternate for the Western United Annual Meeting.
MOTION: It was properly moved, seconded, and carried to appoint Director Zieff and Director Hauck as MPE’s delegate and alternate, respectively for the Western United Annual Meeting.
Manager Simmons delivered the engineering report to the board. Directors complimented Simmons for identifying ways to monitor system demand.
Manager Finn discussed Avian protection measures to reduce bird-related outages. Finn discussed installation of trip savers in multiple areas. Operations and Engineering identified another option, current-limiting fuses, which will help reduce the risk of fires. These fuses provide similar protection as the trip savers at a lower cost. Nate Towne has earned his drone pilot license. MPE will be using the drone to provide better information to target vegetation management.
Manager Dellamano discussed the impacts of RUS buy-out, specific to MPE cash flows and the balance sheet. MPE 2021 margins were healthy. Financial Statement presentation in the future will be slightly different due to MPE not having access to RUS form 7.
Information Technology Report
Manager Palmer presented the IT report. Cybersecurity remains a priority for MPE. MPE continues to explore how to use new and improving technology to enhance security. All managers are now using multifactor authentication, as well as approximately 40% of all employees by the end of the month. Palmer provided updates on software, metering, and communications system (Tantalus) continuity and recovery in the event of power losses. Board members will be sent periodic IT security training. The board discussed recent attacks on other cooperatives and resulting loss of data.
Human Resources & Administration Report
Rahn submitted a written HR and Administration report to the board. She highlighted that MPE changed health care providers, returning to the NRECA plan.
Member Relations & Communications Report
Johnston and Manager Taylor discussed alternate venues for the annual meeting. MPE is considering using the Middle Park High School for its annual meeting. It is a large open space and will provide attendees more room to spread out. Management recommends using the high school this year to be able to facilitate an in-person meeting. Votes may be submitted via mail or by delivering ballots to the office in the event an in-person meeting is unavailable.
MOTION: It was properly moved, seconded, and carried to move the 2022 MPE Annual Meeting to the Middle Park High School
MPE is investigating the use of a cell phone-based polling software at the annual meeting. Members may have the opportunity to answer questions in real time to make the annual meeting more interactive. Tri-State and MPE are teaming up on a video to present at the annual meeting as well.
Bill for Payment
The board asked no questions on bills presented for payment.
Board Open Forum
The board reviewed a letter from Green Power Committee related to community solar and solar cares project encouraging the board and staff to keep working on the projects. Johnston is still having conversations with the non-profit. They are still interested in moving forward.
Rate Design Committee
There are 42 members on the Tri-State Rate Design committee; 22 are CEOs, 14 are Tri-State Board Members, the rest are member system directors. The rate design is being evaluated because of Tri-State’s move to FERC jurisdiction. Tri State must make a rate filing with FERC by Sept 2023.
There were four reserved issues as part of settlement for the rate (A40), including transmission demand costs and whether to unbundle those costs. Johnston sent a spreadsheet to the Board that showed the impacts of having unbundled transmission. All Tri-State transmission costs historically have been rolled into one transmission rate. This is distributed to members based on kilowatt usage (demand). United wanted this to be unbundled, which makes the cost of the service more aligned with those who are driving the cost. This is currently being litigated at FERC.
The committee needs to make a recommendation by May 2023. This will give members a chance to provide comments prior to the September 2023 filing date. NewGen, who helped design the A40 rate, and GDS were hired to assist the committee. Each provided presentations. GDS is more familiar with FERC processes, and NewGen is familiar with Tri-State system costs. So, their knowledge compliments one another.
The new rate must be found just and reasonable by FERC and meet Tri-State’s revenue requirements. If all members agree to the rate design, FERC is more likely to approve it. If it is challenged by any member, the proposed rate will go into a settlement process that will likely prioritize FERC precedent and may take several years.
If Tri-State moves to a formula rate, the rate charged would vary from year to year. If Tri-State does not meet its revenue requirements, the costs would be added to the charges the following year to make up the loss.
The Board discussed risk shifting. Director Trick pointed out that the formula rate benefits Tri-State through increased certainty, by shifting the burden to membership. If Tri-State moves to a formula rate, Johnston mentioned it may require MPE to consider a formula rate as well.
Discussion ensued about whether Tri-State could or should have a stated rate (not formula) and remain competitive while providing more certainty to members, and how that might compare to other power providers who provide a stated rate.
Director Zieff reported that Western United is doing very well. There are concerns about the level of margins. Director Zieff and other members are encouraging lowering prices now instead of paying more capital credits later. Western United is looking at other suppliers to ensure access to materials during supply chain challenges.
Director Taddonio and Director Volt are taking a director class in Denver on Saturday toward required Credentialed Cooperative Director certificate.
Director Trick had a planning meeting. Most of the items discussed were in executive session. Tri-State is looking at an Electrify Everything program. The Empower program at San Isabel is providing 50% of the cooperative’s margins. There is $130 million left in deferred revenue with Tri-State, and the 2022 rate reduction should be covered by deferred revenue. The Policy 115 contract for La Plata was approved for connecting a school bus to the grid. The Electric Resource Plan settlement was approved. Director Taddonio reported some of the specifics of the resource plan settlement, including a commitment to reduce greenhouse gas emissions for Colorado customers by 26% from 2005 levels by 2026 and with graduated steps to 80% by 2030.
The CREA report was emailed to the board. Director Hauck reported that CREA elected new officers. Director Hauck has served his two years as President and will be done this weekend.
Grand Valley Power is moving to a time-of-use rate for all residential customers. On peak is 4-9 pm, and there is 2:1 price differential between on-peak vs. off-peak. Holy Cross is offering a power module for its customers to help them control their peak. It costs $30 a month for 10 years and provides 7.5 kWh for backup power during peak demand. The member then owns it. La Plata is doing a town hall power supply meeting tonight at 6 pm.
Emergency / Urgent Business
Stacie Dellamano presented an Education Fund grant request in the amount of $10,000 for Grand County Higher Education to broaden adult education and expand the Parent Education Speaker Series. Topics would include building resilient families, preventing drug abuse, raising kids in a digital age and other timely topics. Money would not go to support staff but would instead support the educational efforts to engage more parents and students.
MOTION: It was properly moved, seconded, and carried to approve $10,000 for the Grand County Higher Education with the requirement that they submit a report so the board can evaluate success.
The annual audit is taking place next month. Staff requested input from board on what they like to see in terms of board participation. Directors Fosha, McIntyre, and Zieff were on the audit committee last year. All board members are invited to attend if they are available. The meeting will take place Friday March 11th.
Covered under Emergency/Urgent business
President Hauck recessed the meeting at 12:39 p.m.to go into Mountain Parks Services Meeting with Lunch to follow.
Director Taddonio exited the meeting.
President reconvened the meeting at 1:30 p.m.
MOTION: It was properly moved, seconded, and carried to go into executive session to discuss employee housing, time of use rates, cybersecurity plan, board-attorney relationship, and capital credit allocation.
Board Members were in attendance as well as Attorney Fredregill, General Manager Johnston, Manager Simmons, Manager Taylor, Manager Palmer, Manager Dellamano, Manager Finn and Manager Rahn.
MOTION: It was properly moved, seconded, and carried to come out of executive session at 3:35pm and adjourn the meeting.