Mountain Parks Electric, Inc.
Regular Meeting of the Board of directors
Granby, Colorado
October 13th, 2022
8:00 AM
Attendance
Present: Liz McIntyre, Jeff Hauck, Justin Fosha, Kristen Taddonio, Mark Volt, Cray Healy, Mark Johnston, Adam Paulsen, Rob Taylor, Joe Palmer, Leah McClain, Craig Stegner, Chris Michalowski, Tiffany Macchione, and Levi Williamson were present in person. Carl Trick and Adam White were present via video conference.
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 September 8, 2022, meeting. The minutes were revised, deleting an extraneous motion on page 4.
MOTION: It was properly moved, seconded, and carried to approve the minutes for the September 8, 2022, board meeting as revised.
Attorney Summary Fees Report
The Board reviewed Attorney Williamson’s fees summary report for September 2022.
Manager’s Report
General Manager Johnston presented the Manager’s Report. Johnston reported that the community solar project is still on hold pending resolution at the FERC regarding Tri-State Board Policy 119. Johnston reported on the ALJ’s decision in the FERC Tri-State CTP docket. There is no timeline for the FERC’s ruling on the decision. MPEI is nearly finished with both Phase 1 and Phase 2 of the fiber backbone project. Johnston reported that MPEI has begun to receive FEMA funds for projects that have been completed. MPEI will complete the Highway 125 project soon. MPEI received 19 applications for the HR Manager position. Johnston made an offer and expects the candidate to begin work December 5th. Johnston provided an update on the search for a CFO and General Manager.
Johnston reported that he has restructured the engineering and operations departments. He introduced Craig Stegner, who was promoted to Assistant Manager of Engineering. Johnston reported that the sale of the Vasquez Road property in Winter Park is on track for closing in December. The buyer conducted a wetland delineation study to assure protection of sensitive areas.
MPEI’s next strategic planning session will be April 18 and 19, 2023, facilitated by CFC. The CREA Energy Innovation Summit will occur in early November 2022.
New Construction of All-Electric Homes Presentation
Chris Michalowski of MPEI presented information on trends in new construction of all electric homes, focusing on EV chargers and cold-climate heat pumps. Level 2 EV chargers require a 240v, 40-amp circuit. Electric vehicles are growing quickly in market share, and global and US auto manufacturers have committed to large scale fleet electrification. MPEI provides a $500 match rebate for EV chargers and up to $500 for the cost of installation if members join the time-of-use rate. Heat pumps designed for cold climates can work well in MPEI’s service territory, providing heat in the winter and A/C in the summer in an all-in-one unit. Michalowski presented information indicating that heating a home in Granby with a heat pump is cheaper than heating with propane. MPEI will be hosting a sustainable building in mountain communities event on Thursday, November 3rd at the Headwaters Center from 9am-12:00 pm.
Discussion & Action Items
Policy C-1 Communications Policy
Manager Johnston presented revised Policy C-1.
MOTION: It was properly moved, seconded, and carried to approve the Policy as presented.
Policy C-2 Donations Policy
Manager Johnston presented revised Policy C-2. Revisions include authorizing the General Manager to approve donations. The Policy was further revised to move section II.E to II.A.
MOTION: It was properly moved, seconded, and carried to approve the Policy as revised.
IRS Form 990
General Manager Johnston presented MPEI’s IRS form 990 as completed by MPEI’s auditor.
MOTION: It was properly moved, seconded, and carried to approve the 990 as presented.
Tariff 202.06
General Manager Johnston presented revised Tariff 202.06, Street Lights. Revisions include changes to the cost of LED, high pressure sodium, mercury vapor, and other types (e.g., ornamental) of street lighting.
MOTION: It was properly moved, seconded, and carried to approve Tariff 202.06 as presented.
Grand Beginnings Donation Request
General Manager Johnston presented a donation request from Grand Beginnings, a nonprofit organization that supports health and education for young children in MPEI’s service territory, in the amount of $8,000/year for four years.
MOTION: It was properly moved, seconded, and carried to donate $8,000 per year for four years to Grand Beginnings, contingent on Grand Beginnings reporting to the MPEI Board annually.
Grand Enterprise Initiative Donation Request
Grand Enterprise Initiative requested $20,000 per year for 3 years starting in fiscal year 2023, with half of that reserved to support enterprises in Jackson County.
MOTION: It was properly moved, seconded, and carried to donate $20,000 to Grand Enterprise, with $10,000 supporting Jackson County, contingent on the Enterprise receiving annual matching donations and giving annual reports to the MPEI Board.
NRECA Delegate
MOTION: It was properly moved, seconded, and carried to appoint Mark Johnston as MPEI’s delegate to the NRECA meeting and Liz McIntyre as the alternate.
Basin Electric Annual Meeting
No one from MPEI is available to travel to North Dakota to attend the Basin Electric annual meeting.
Green Power Program
President McIntyre reported that the Green Power Advisory Committee would like to change the name of the program to the Clean Power Program and the name of the committee to the Clean Power Advisory Board.
MOTION: It was properly moved, seconded, and carried to change the name of the Green Power Program to Clean Power Program and the name of the Green Power Advisory Committee to the Clean Power Advisory Board.
Line School Tuition Request
General Manager Johnston presented a request from a child of a MPEI member for reimbursement of cost of attendance at the Electric Line Worker Program at Western Colorado Community College.
MOTION: It was properly moved, seconded, and carried to approve reimbursement of tuition costs up to $24,000, with terms and conditions established by MPEI management
President McIntyre recessed the meeting at 9:30 a.m. and reconvened the meeting at 9:40 a.m.
Scholarships
The Board discussed the scholarship program, including the amount of money distributed and the allocation for trade schools. Director Healy discussed the relative merits of trade schools and encouraged the Board to consider promoting the availability of trade school scholarships. The Board is supportive of scholarship applications for trade schools.
2023 Budget
General Manager Johnston presented the preliminary 2023 budget. The budget for 2023 increased relative to 2022, with forecasted labor and benefits up significantly. Insurance costs also increased substantially. Expenses on system maintenance—such as breaker and regulator testing and maintenance—is also increasing. Cost of supplies such as conduit, breakers, etc. is also up. The budget also increases for IT and SCADA upgrades and deferred maintenance and safety related needs in MPEI’s buildings. Johnston was conservative in projections for 2023 revenue, anticipating similar revenue to 2022. Electric revenue may grow by 3-6% growth based on recent years, depending on weather and other factors, but power costs may increase as well. Johnston is not planning on a Tri-State capital credit refund to add to the budget. MPEI can draw on deferred revenue, and FEMA reimbursements are helping to offset rebuilding costs from 2020 fires. No rate increase is proposed this year. Next year’s capital credit retirements, if the board so chooses to approve them, will be consistent with those paid in 2022. If MPEI margins are higher than expected the Board could look at options to return more capital credits or provide other potential rate relief.
The board discussed the budget presentation and expressed appreciation for the thorough presentation. Director Taddonio asked about employee compensation and noted support for adjusting compensation to reflect inflation. Director Healy thanked staff and asked about legal expenses. Healy asked about projections for 2024 and whether that would result in a rate increase. Manager Johnston reported that if Tri-State raises rates in 2024 MPEI will need to raise electricity rates at that time. Carl Trick, the MPEI Tri-State representative, indicated that Tri-State is very likely to raise rates in 2024, possibly 5% or more, and asked if management had considered raising rates now to lessen the increase next year. Management does not plan to recommend a rate increase at this time, as a cost-of-service study will shed light on where and how rates should be increased. The MPEI Board approved a 20MW partial requirements contract, which can help reduce power costs but will not go into effect until 2025. MPEI continues to evaluate power supply options to save members money and reduce inflationary pressure.
Operations and Engineering Reports
Adam Paulsen and Leah McClain presented the operations and engineering reports. The highway 125 rebuild project is proceeding well, with conduit placed and overhead line retirement likely this year. MPEI is working with the state and FEMA to submit fire rebuild invoices as MPEI receives invoices from contractors for completed construction. Paulsen estimates that the fiber backbone project will be complete by the end of November. Operations and engineering are working to improve communications and workflow and relieve workload on employees who have taken on additional responsibility filling in for departed employees. MPEI is hiring a staker and has an offer out for an open journeyman lineman position in Kremmling. Some important maintenance to the boiler and plumbing system in the Granby buildings has been completed or scheduled. The Board and management commended staff for quick responses to outages over the last month, including the boat tarp that flew onto MPEI’s lines. Overall, this is a busy time, and the engineering and operations department managers believe the teams are working well together, with management working on new strategies to maintain and boost morale.
Finance Report
General Manager Johnston presented the financial report. Through August, revenue is up 6.6% and is 9% above budget. Expenses are up 6.1% year over year, about 5% above budget. Overall, MPEI has slightly higher margins for the year compared to budget. MPEI has a healthy cash balance. MPEI is working on a December capital credit retirement and will present that to the Board in an upcoming meeting. The new finance manager is expected to begin in December or early January.
Information Technology Report
Joe Palmer presented the IT Report. The IT department is completing trainings, working on achieving their objectives to contribute to strategic plan implementation, and is wrapping up the new security architecture. MPEI is having a third-party IT security audit to identify best practices and make recommendations.
Human Resources & Administration Report
General Manager Johnston presented the HR Report. MPEI is renewing the NRECA insurance plan. MPEI held an all-employee breakfast on October 11th and President Liz McIntyre attended for the Board. MPEI is now using the Paylocity system for annual evaluations and compensation recommendations. Staff reported on open positions and recruitment. It is proving difficult to hire a GIS technician and system administrator. Johnston is considering the need to offer remote positions to attract more applicants. A new HR manager will likely start before the end of this year.
Communications and Member Relations Report
Rob Taylor presented the Communications and Member Relations Report. MPEI is holding an event on sustainable building on November 3rd. The 2-year anniversary of the 2020 East Troublesome Fire is approaching. Hundreds of MPEI members and 5 MPEI employees lost homes in the fire. MPEI is participating in commemorative events and community rebuilding efforts. The member survey was recently conducted, and feedback was largely positive. An ongoing point of contention for a few members is the convenience fee for one-time online payments. Many members commended MPEI’s customer service and encouraged MPEI to continue exploring options to keep service affordable.
President McIntyre recessed the meeting at 11:23 a.m. and reconvened the meeting at 11:30
Economic Update Presentation by CoBank
MPEI switched to a new lender this past year, CoBank. CoBank’s Colorado manager Michael Anthos introduced himself to the MPEI board and presented on CoBank, its mission and services, and current events in the US and global economy. CoBank is experiencing an increase in loan volume over the last 5 years. 2021 was their best year ever with $1.3 billion in net income, and they are on pace to exceed that in 2022. CoBank also returned a record amount of patronage capital last year. Many of their customers are large farming operations. Nationally, 64% of CoBank’s business is Farm Credit Associations (54%) and Farm Supply, Grain, and Marketing (10%). CoBank also lends to rural infrastructure projects including communications and water and wastewater companies. Electric Distribution represents $11.6 billion, or 9%, and G&T Power Supply is $7.1 billion, or 6%. Director Hauck asked whether CoBank is financing nuclear energy projects. Mr. Anthos responded that clients in Montana are exploring nuclear projects. G&T customers include Associated Electric Cooperative and Tri-State. Funding sources are typically bonds; they issue AAA bonds to raise capital and use that to make loans to their customers. In the economic update, Anthos discussed recession, the labor market, inflation, GDP and more.
Director Taddonio stepped out of the meeting at 12:00 noon and returned at 12:30 p.m.
President McIntyre recessed the meeting at 12:30 p.m. and reconvened at 12:55.
Bills for Payment
The Board reviewed bills for payment in September.
Board Reports and Open Forum
Director Carl Trick was unable to attend the last Tri-State Board meeting and referred MPEI board members to their written report. The Clean Power Advisory Board recommends reducing the solar rebate to $500 from $1000. They are co-organizing the sustainable building event on November 3rd and are exploring opportunities to obtain resources to help MPEI develop microgrid and battery solutions. Liz McIntyre reported on the Tri-State rate design committee meeting. The next rate increase will go into effect no earlier than January 2024, but the rate design has not yet been finalized. Tri-State staff is recommending a formula rate that will allow Tri-State to more easily pass on increases in energy cost and avoid the need for FERC approval each time additional revenue is needed. MPEI’s balance of energy and demand could result in less of an impact MPEI’s power costs compared to other Tri-State members. Director Taddonio reported that she was appointed as the energy efficiency member to the new Colorado Energy Code Board charged with adopting model energy Codes for Colorado.
MOTION: It was properly moved, seconded, and carried to go into Executive Session for consideration of the 2023 budget, GM recruiting, litigation, partial requirements, and FERC matters, with all Directors present at the meeting, General Manager Johnston, and Attorney Williamson in attendance. Attorney Williamson was present for all portions of the executive session except for the GM recruiting discussion.
MOTION: It was properly moved, seconded, and carried to exit executive session.
Old business
None
New business
None
The meeting adjourned at 5:15 p.m.