MOUNTAIN PARKS ELECTRIC, INC
Regular Meeting of the Board of Directors
Granby, Colorado
February 9th, 2023
8:00 A.M.
Attendance
Present: Cray Healy, Kristen Taddonio, Mark Volt, Justin Fosha, Mark Johnston, Adam Paulson, Rob Taylor, Joe Palmer, Adam White, Angie Wallace, Emily Meeks, and Attorney Levi Williamson attended in person. Liz McIntyre and Carl Trick attended remotely by video or telephone.
Call to Order
President Liz McIntyre called the meeting to order at 8:00 a.m.
Determination of Quorum
A quorum was declared.
Minutes
The Board reviewed minutes from the January 12, 2023, meeting.
MOTION: It was properly moved, seconded, and carried to approve the minutes for the January 12, 2023, board meeting as presented.
Attorney Summary Fees Report
The Board reviewed Attorney Williamson’s fees summary report for January 2022.
Manager’s Report
General Manager Johnston presented the Manager’s Report.
Manager Johnston reported that community solar contract negotiations with Cloudbreak continue. Johnston provided updates on the procedural schedule for the Federal Energy Regulatory Commission (FERC) dockets regarding Tri-State’s partial requirements policy and MPEI’s negotiations with Tri-State for a partial requirements contract. Johnston also provided updates on the fire-related repairs along Highway 125 and MPEI’s fiber project. Johnston reported that in the upcoming MPEI director elections, if no candidate earns 50% of the votes, a runoff will be held. Johnston reported that he is considering changes at the Walden office to address staffing and security issues. Johnston is considering opening the Walden office 7:00 a.m.-1:00 p.m., Monday-Friday. In conjunction with this change, MPEI could utilize a third-party location, such as the Dollar Store, to accept payments on MPEI accounts.
Public Comment
Todd Budin presented information on opportunities to obtain more state and federal funding for energy efficiency in MPEI’s service territory. His presentation included opportunities for residential energy assessments through Energy Smart Colorado, the Weatherization Assistance Program (WAP) administered by the Northwest Colorado Council of Governments, and Colorado Affordable Residential Energy program (CARE). Budin asked the MPEI Board to fund $8,000 for energy audit rebates and $20,000.00 for the CARE program, both in 2023.
Safety Report
Adam White presented the Safety Report. There were no accidents, incidents, or near misses in January, however, there was an equipment failure involving a skid steer door. The Skid steer that plows MPEI’s parking lot was repaired. Training in January involved snowmobile classroom and hands on training, avalanche awareness, and forklift recertification. Eight MPEI employees attended winter driving safety class. MPEI will conduct fleet dielectric testing, first aid training, and fire safety training in the coming months.
Discussion & Action Items
Western United Electric Supply Annual Meeting
Western United Electric Supply’s annual meeting will be February 23rd at the Grand Hyatt Denver.
MOTION: It was properly moved, seconded, and carried to appoint Liz McIntyre as MPEI’s delegate and Mark Johnston as the alternate to the WUE annual meeting.
Policy D-1 Director Duties and Standards of Conduct
General Manager Johnston presented revised Policy D-1 for review.
MOTION: It was properly moved, seconded, and carried to approve Policy D-1 as presented.
Policy D-2 Functions and Duties of the Board of Directors
General Manager Johnston presented Policy D-2 for review.
MOTION: It was properly moved, seconded, and carried to approve Policy D-2 as presented.
Rural Energy Savings Program (RESP) Loan Program
General Manager Johnston reported on the status of this $10 million, 0% interest loan. Attorney Williamson and Manager Johnston investigated options to continue using these funds even though MPEI is no longer an RUS infrastructure borrower. Manager Johnston believes that keeping the RESP loan is possible but may involve additional staff time and paperwork. Williamson is waiting to hear back from RUS on issues that must be resolved before moving forward.
GM Employment Agreement
Tabled to allow for discussion in executive session.
District 5 Vacancy
Tabled until 2 p.m.
MPHS Educational Fund Request
General Manager Johnston presented a request from Middle Park High School for $27,000 to purchase a Med4Elite machine, which is an athletic training device used for cold and hot therapy. After discussion, the Board did not act on the request.
President McIntyre recessed the meeting at 9:35 a.m. and reconvened the meeting at 9:50 a.m.
Operations and Engineering Report
Adam Paulson presented the Operations and Engineering Report. He reported on the Trail Creek restoration from Troublesome Fire scope change request submitted to the Federal Emergency Management Agency (FEMA). Costs are higher than expected due to increasing prices. MPEI is also asking for a time extension to complete the work. Paulson is hopeful that the FEMA will provide funds sufficient to complete the work. Paulson reported that MPEI is developing streamlined service orders and charges for members. For example, Paulson plans to offer a flat fee “Simple Service” for a 200 amp meter pedestal anywhere on member property within 20 feet of MPEI’s existing facilities. Outages were minimal in January. MPEI crews have been busy completing compliance items, such as line patrol, while construction slows. Despite the winter season, MPEI added 50 new services in January. Regarding the MPEI wildfire risk mitigation plan, MPEI is seeking grant funds to underground overhead line. On January 19th MPEI learned that its $9.2 million grant request has been accepted by the State of Colorado and they’re passing it on to FEMA. FEMA has also increased the reimbursable amount from 75% to 90% of project costs. If finalized, this grant will significantly help MPEI implement its wildfire risk mitigation plan.
Finance Report
Emily Meeks reported that the December financial reports are still under review. The 2022 year-end financials will be presented at the next meeting, after the audit. Several changes are underway to streamline and improve financial planning and reporting to the board and management. MPEI is moving to better deposit accounts that provide higher interest payments on MPEI’s cash balances.
Information Technology (IT) Report
Joe Palmer presented the IT Report. MPEI continues to expand the use of multi-factor authentication. To improve technology to address reliability and load control, MPEI continues to implement the RF engineering portion of the Tantalus collector projects. Palmer reported on the status of artificial intelligence (AI) developments, including the Chat GPT program made available by Open AI, and how that may impact electric utility operations.
Human Resources and Administration Report
Angie Wallace presented the HR and Administration Report. Wallace reported that she will be conducting interviews for GIS and Meter Tech positions. The new IT employee will be starting soon. The new fleet mechanic also starts Monday. The system administrator position has been posted and MPEI is reviewing applications. The staff engineer position is still vacant, and MPEI has hired a recruiter. Policies, handbooks and guides are being cleaned up and refreshed. An equipment and facilities use policy is under development. Tiffany is improving the onboarding process. MPEI is working with the Employer’s Council on an updated wage review.
Member Relations and Communications Report
Rob Taylor presented the Member Relations and Communications Report. Taylor discussed energy audits, including training options for Building Performance Institute (BPI) and Home Energy Rating Systems (HERS) training for energy audits. The election supervisory committee will be presented to the board next month for approval.
Bills for Payment
The Board reviewed bills for payment in January.
Board Open Forum and Associated Reports
Cray Healy attended the Colorado Rural Electric Association (CREA) new director orientation and board meetings. He was appointed to the loss control committee. CREA is looking to better track mutual aid between co-ops. Much of the board meeting was spent discussing legislative activities. The CREA Board was really pushing back on any legislation that moved requirements above 80% renewable.
Carl Trick reported on his attendance at the regular meeting and strategic planning session of the Tri-State Board of Directors. Tri-state reviewed 2022 project ascend, trying to reduce costs. There will be $55 million savings over the long term. Fuel and supply costs increased $100 million. In strategic planning, Tri-State had a gentleman from Southwest Power Pool (SPP) provide a presentation. The independent power providers will need to prove resource adequacy before joining the SPP. Duane Highley reported that cash flow is strong. Tri-State will borrow $150 million to boost cash on hand. The commitment to join a regional transmission organization (RTO) was delayed. There are 7 direct current (DC) crossings for SPP; they’d like to increase that. Thermal generation requirements, load growth, weather events, and managing renewable integration are challenges for SPP. The Tri-State Board received a presentation on keeping the lights on. Tri-State has 600 megawatts of hydro and is on track to reduce greenhouse gas emissions by 26% in 2025, 46% by 2027 and 80% by 2030. Springerville will be retired in 2040 and Laramie River Station by 2043. Tri-State staff believes that the whole system needs to be in an RTO to manage the intermittent resources. A 200 MW wind project is under construction in Laramie Wyoming. The project cost is $22 per megawatt. There are protests and opposition in Laramie due to the visual impacts and concerns about property prices. It will connect to the Hayden transmission line, so there will be sufficient capacity on lines once Craig goes down.
Kristen Taddonio reported on her attendance at the Colorado Energy Code Board meeting and asked if MPEI had opinions on EV charger requirements for multifamily units in future building codes.
Liz McIntyre reported that Clean Power Committee had a busy year in 2022 and has reduced the rebate to $500 for 2023. Member contributions were up to $44,000, about a 34% increase in member contributions. McIntyre discussed drivers’ education needs and requirements with community members (MPEI has historically sponsored drivers’ education). McIntyre attended a CREA workshop on funding opportunities through the bipartisan infrastructure bill and inflation reduction act. There is a lot of funding being made available for charging stations on US Highway 40 through MPEI’s service territory. There was a robust discussion on net metering at the workshop. McIntyre reported on her attendance at the meeting of the Tri-State rate design committee. At the February 3rd meeting, the committee discussed direct assignment of costs, such as third-party transmission costs, and state regulatory costs. Jeff Wadsworth from Poudre Valley Rural Electric Association (PVREA) presented an alternative rate design to the one that was recently approved. Today there is another meeting to discuss the formula rate proposal. The committee hopes to have something in March for the Tri-State board to vote on. United and La Plata may file a minority report if the rate discussed in January continues to be the rate recommended.
President McIntyre recessed the meeting at 11:40 a.m. and reconvened at 12:15 p.m.
Discussion of the Tri-State Rate Design Committee deliberations continued. Per Tri-State Policy, once a rate design is proposed, notice will be provided to member systems and then Tri-State directors can vote on it 90 days after notice is provided. Carl Trick asked whether the MPEI board members support the rate that the rate committee will be recommending in March. The consensus of the MPEI Board is that Trick should vote to provide notice of the proposed rate but the MPEI Board members could not reach a decision whether to fully support the rate before it is made available for them to review.
Old Business
Liz McIntyre asked if an MPEI director is available to attend the Charitable Trust meeting which will occur on February 14 at 4 p.m. A portion of MPEI’s unclaimed capital credits from the Education Fund are given to the volunteer Charitable Trust committee to administer. Justin Fosha and Kristen Taddonio will attend. Taddonio inquired about the donation approved by MPEI to the Headwaters Land Trust and asked if the documents have been made available for review yet. They have not.
New Business
No unnoticed new business.
Emergency Business
General Manager Johnston presented preliminary financials for 2022. In December 2021, MPEI lost money due to one-time contributions to employee 401(k) accounts and foregoing of service availability charges, which came to over $1 million. Revenue in 2022 was higher than 2021 and higher than budgeted. As a result, margins for 2022 were higher than budgeted. Part of that margin was driven by the sale of the Winter Park land. The 2022 year to date margin is approximately $1.4 million above budget, and $1.5 million above 2021’s margin. For 2022, MPEI has a $3.8 million margin (inclusive of Winter Park land, and about $3 million excluding the land sale). For comparison, the budgeted margin was approximately $1.8 million. 2023 may be a challenging year, depending on rate increases for wholesale power. MPEI currently has $1.5 in deferred revenue. Mark Johnston proposed moving $750,000 from 2022 margins to deferred revenue, bringing the total to $2.25 million, which would allow a buffer if there are higher expenses than budgeted in 2023. The board discussed the proposal. Taddonio and Healy asked about deferring more revenue, such as $1 million. Director Trick asked about paying down debt. Paying down debt would result in prepayment penalties, and interest rates on cash held are currently equal or greater than interest rates on MPEI’s debt. Deferred revenue would have to be approved by MPEI’s lenders. MPEI’s Times Interest Earned Ratio (TIER) is currently well above what’s required by lenders, so deferring more revenue is not anticipated to be problematic.
MOTION: It was properly moved, seconded, and carried to defer $1 million of 2022 margins subject to lenders’ approval.
The board discussed the $28,000 proposal from Todd Budin to allocate more funds to energy efficiency and weatherization projects.
MOTION: It was properly moved, seconded, and carried to allocate up to $28,000 from the 2023 budget to the CARES program and up to $8,000 for Energy Smart, contingent on annual reporting to the board.
Executive Session
MOTION: It was properly moved, seconded, and carried to go into Executive Session for consideration of power supply, legal updates, and general manager employment agreement, and confidential member communication. All directors present at the meeting were present for all of the executive session. Emily Meeks was present for the portion regarding power supply. Manager Johnston was present for the all topics except the General Manager employment agreement. Attorney Williamson was present for the entire executive session.
MOTION: It was properly moved, seconded, and carried to exit executive session.
MOTION: It was properly moved, seconded, and carried approve the General Manager’s employment agreement as presented in executive session.
MOTION: It was properly moved, seconded, and carried to appoint Michael Sjobakken to fill the District 5 vacancy.