1 2 3 4 5 6  MINUTES OF THE REGULAR MEETING OF THE BOUNTIFUL CITY POWER COMMISSION January 26, 2021-8 8:00 a.m. Those in Attendance  7 Power Commission 8 Jed Pitcher, Chairman 9 Susan Becker* 10 Dan Bell* 12 David Irvine 13 Paul Summers* 14 15 Excused 16 John Cushing, Power Commission 17 19 19 guidelines and restrictions. 20 21 WELCOME 22 24 invocation. 25 27  Power Department Allen Johnson, Director Jay Christensen Alan Farnes* Jess Pearce* Luke Veigel* Recording Secretary Nancy Lawrence  11 Richard Higginson, City Council Rep.  18 *Attended electronically via Zoom, Meeting #968 6839: 3220 in conformance with COVID-  Chairman Pitcher called the meeting to order at 8:00 a.m., Allen Johnson took roll  23 call, and Chairman Pitcher welcomed those in attendance. Mr. Christensen offered the  26 MINUTES-NOVEMBER17.2020  Minutes of the Regular Meeting ofthe Bountiful Power Commission held November  28 17,2020 were presented. Commissioner Becker requested that the minutes be amended to 29 reflect the intent of her statement regarding the approval by Box Elder County oft the project. 30 She shared that Box Elder County feels that the Steel Solar Project is a very favorable 31 project for the County, sO much so that the County has agreed to return a portion of the 32 project's tax increment to Steel Solar for 20 years as an economic incentive in order to 33 ensure that the project moves forward. Councilman Higginson made a motion to approve 34 the minutes as amended. Commissioner Irvine seconded the motion and Commissioners 35 Becker, Bell, Irvine, Pitcher and Summers, and Councilman Higginson voted "aye".  36 38  37 ELECTION OF CHAIRMAN AND VICE CHAIRMAN  Mr. Johnson reported that it is again time for the Power Commission to electa  39 Chairman and Vice Chairman and he opened the floor for nominations. Commissioner 40 Irvine recommended that the currently serving Commissioners be re-appointed for another 41 year. He motioned that Jed Pitcher bei re-appointed as Chairman oft the Power Commission 42 and Paul Summers be re-appointed as Vice Chairman. These appointments were confirmed 43 by acclamation and both men were congratulated on the outstanding service they have  44 rendered this past year.  45  Page 1 of6    (PC minutes. January 26, 2021)  1 BUDGET REPORT-YEAR-TO-DATESMONTH PERIOD ENDED 30  2 NOVEMBER: 2020  3  Mr. Christensen reported that the Fiscal Year 2020 Budget Report is final and the  4 independent audit has been completed. The Fiscal Year-to-date (YTD): 2021 for. July through 5 November is also final. He reviewed the changes made at the beginning oft this fiscal year 6 that eliminated the use of estimates on the Income Statement for Air Products Income and 7 UAMPS power costs and reduced the estimate used for Electric Metered Sales. These 8 changes have resulted in improved accuracy of the financial statements and this budget 9 report, though this data is now reported the second month after they are earned or incurred. 10 This change is a "work in progress' and further changes will be made as needed.  11 12  For the 20101 Bond, the $720,000.00 annual principal payment and $253,708.75  13 semi-annual interest payment were made on November 1, 2020, and the remaining balance 14 of$8,630,000 wasj paid off on November 9, 2020. The corresponding Federal Interest 15 Expense subsidy of$107,432.97 has also been received. With the payoffoft the 2010 Bond, 16 the $5,686,971.56 Rate Stabilization cash was moved to Cash & Investments (operating 17 cash), and the budget for interest earned on rate stabilization was included with interest 18 income on investments (operating cash). In response to a question from the group, 19 Councilman Higginson affirmed that the City currently has no debt but is committed to  20 purchase the Washington Elementary School property.  21 22  Total revenues YTD were $21,933,442, above its historically allocated budget  23 (HAB) by $511,748. Majori items above or (below) their HABs included: Electric Metered 24 Sales, above by $405,775; Street Light Income, above by $25,370; Contribution in Aid to 25 Construction, above by $52,099; and Interest Income on Investments, which now includes  26 interest income on rate stabilization, above by $25,075.  27 28  Total operating expenses YTD were $20,263,273, below its HAB by $361,828.  29 Majori items below their HABs included: Power Cost Expense, below by $193,523; Street 30 Light expense, below by $94,673; Computer Expense, below by $51,853; and Transformer 31 Expense, below by $35,505. Major items above their HABs included: Distribution Expense, 32 above by $(162,401) and included $55,404 ofunbudgeted September 2020 wind expense;  33 and Special Equipment, above by $(17,188).  34 35 38 39  Total Capital Expenditures YTD were $234,295 and included $126,652 for feeder  36 #575; $36,472 for Cottages on Main St.; $26,371 for the Renaissance Center; $21,136 for  37 500 South Orchard; and $15,204 for the 400 North pump.  Total Labor and Benefits Expense YTD (included in Operating Expenses YTDa and  40 Capital Expenditures listed above) was $1,741,207. As of14 November 2020, the last pay 41 period in the YTDj period, 37.5% or $1,767,654 of the TL&B could have been spent and the  42 actual TL&B was $26,447 below that target.  43 44  The Net Margin YTD was $1,435,874 with high EMS, low power costs, and low  45 capital expenditures. Mr. Christensen noted that this is expected to be reduced in future  46 months with true ups ofwindstorm costs.  Page 2 of6    (PC, minutes. January 26, 2021)  1 2  Total cash and cash equivalents were $18,790,871, down $(7,774,598). Major  3 changes included: the $1,435,874 net margin; a $755,897 decrease in accounts receivables; a 4 $(596,152) decrease in accounts payable; and a $(9,350,000) decrease in long-term debt  5 with the payoffo ofthe 2010 Bond.  6 7  Commissioner Pitcher asked about the total expense as ai result of the bad wind in  8 September. Mr. Christensen said it was around $750,000, aj part of which will be 9 reimbursed by FEMA. Commissioner Pitcher also asked whether or not the City received 10 anything from the Federal stimulus allocation. Mr. Johnson said that the City received an 11 allocation; however, none ofi it was for the Power Department. Councilman Higginson said 12 it was his understanding that the stimulus was restricted on its use and would be used to 13 offset police and fire department expenses. He noted that these funds are administered by  14 the County. 15 16 19 21  Commissioner Irvine motioned to accept the Budget Report, as presented.  17 Councilman Higginson seconded the motion and voting was unanimous. Commissioners 18 Becker, Bell, Pitcher and Summers and Councilman Higginson voted "aye". 20 COMPREHENSIVE, ANNUAL FINANCIAL REPORT (CAFR) REVIEW 22 the Fiscal Year Ended June 30, 2020. This Independent Auditor's Report, performed by 23 Keddington and Christensen, CPA's, is for the entire City, with the Power Department being 24 aportion oft the report. Ofsignificance, Mr. Christensen pointed out that the auditors gave 25 the City's financial statements an 'unqualified' opinion, meaning that :.. the financial 26 statements... present fairly, in all material respects, the: respective financial position ofthe 27 governmental activities, the business-type activities, each major fund, and the aggregate 28 remaining fund information ofl Bountiful City, Utah as of. June 30, 2020, and the respective 29 changes in financial position, and the respective budgetary comparison for the General Fund 30 and the Major Special Revenue Funds, and, where applicable, cash flows thereof for the year 31 then ended in conformity with accounting principles generally accepted in the United States  Mr. Christensen presented the Comprehensive Annual Financial Report (CAFR) for  32 ofA America." 33 34  Mr. Christensen reviewed line items on pages 31-32, "Statement ofl Net Position -  35 Proprietary Funds" including cash, inventories, and the 2010 Bond. Commissioner Bell 36 asked what the Item Intangible Asset - Power Projects" referred to. Mr. Johnson explained 37 that these assets are basically "rights oft use" for transmission lines, the plant turbines, etc. 40 Net Position - Proprietary Funds", he reviewed line items for Charges for Services, 41 Personnel costs, Power Purchases and Generation costs, and Transfer Out which shows the 42 contribution to the General Fund from Electric Metered Sales. He noted that the Light and 43 Power department reflected ai net Operating (Loss) of $(2,513,560) which he explained was 44 the result ofummidpud/mmludgeed repairs and maintenance costs. In response to a 45 question from Commissioner Bell, he explained that these costs were not capitalized, but  38 39  Continuing on pages 33-34, "Statement of Revenues, Expenditures, and Changes in  46 considered major costs to maintain an asset.  Page 3 of6    (PC minutes. January 26, 2021)  1 2  Mr. Christensen noted that power resources were discussed onj page 51 and long-  3 term debt and the Electric Revenue Series 2010 Bonds were discussed on page 52. This 4 generated a question as to whether or not the citizenry has beeni informed oft the early bond 5 pay-off. Mr. Christensen said there will be an entry in the City Newsletter for February  6 2021. 7 9  8 ECIENGINEERING APPROVAL  Alan Farnes reviewed construction and upgrades to the Southeast Substation  10 (beginning in 1996-97) and stated that the Department is desirous ofhaving an electronic set 11 ofd drawings that reflects the work and changes that have been made. Iti is the 12 recommendation of stafft to use the services of ECI (the firm that has performed the 13 engineering services for the last three upgrades) toj provide a set of drawings. ECI submitted 14 ap proposal of$76,000 toj perform this work, with completion by the end of April. 15 Commissioner Summers noted that this work is critically needed, and he motioned for 16 approval. Commissioner Irvine seconded the motion and voting was unanimous. 17 Commissioners Becker, Bell, Pitcher and Summers and Councilman Higginson voted "aye."  18 20  19 DECEMBER SOLAR INSTALLATIONS UPDATE  Mr. Christensen reviewed the Solar Customer Production & Usage Report which  21 wasi included in the packet. Hei noted that the totals represent Lost Revenue to the City, 22 subdivided by customer type (Residential Net Metering, Commercial Net Metering, and 23 Commercial). Losses are the result oft the customer providing their own solar generation, as 24 well as the rate structure. Currently, revenue is lost during the customer's solar generation 25 period and additional revenue is lost when the City pays customers for the excess generation 26 that is bought back. He said that the rate structure needs to be studied and adjusted for the 27 coming year. Solar customers increase the demand on our system, which also needs to be 28 considered when establishing rates. Total revenue lost for the calendar year 2020 was 29 $184,072. There are currently 230 solar customers (195 residential net metering, 6 30 commercial net metering, and 29 residential feed-in tariff). Mr. Johnson noted that there has 31 recently been a bit ofai new push on solar as the result ofa federal tax benefit.  32 34  33 COVID UPDATE  Mr. Pearce: reported that there have been five employees ofthe Power Department who  35 have contracted COVID. In each case, the employee and their crews were quarantined; three 36 of the employees are fully recovered and back to work and two are still in quarantine. All 37 employees practice social distancing and wear masks as much as possible; line crews, by 38 nature of their work and the dangers associated with masks are not always able to totally 39 comply with the recommended procedures. He explained that the scheduled outages which 40 are normally done are being handled with care in recognition of the fact that many customers 41 are now working from home and are dependent on electricity. He said that we have had no 42 major issues, and all cases have been mild. He also noted that rapid testing is available from  43 the Fire Department.  44 45 46  Page 4 of6    (PC minutes. January. 26, 2021)  CALENDAR UPDATE  2 4 5 RESOURCE UPDATE 6 8 purchases is: 9 10 11 12 13 14 15 16 17 18 19 20 22 23 25 27 29 30 31 32 33 35 38 40 41 8:00 a.m. 42 43 ADJOURN 44  Mr. Johnson advised that the Joint Power Commission/City Council meeting  3 scheduled for April 6, 2021 has been rescheduled to April13,2021.  Mr. Johnson narrated slides which showed Power Purchases through March 2027,  7 broken down by High and Lowl Load Hours, defined by KW and Price. A summary oft those  Red Mesa Steel Solar San Juan Muddy Creek Fermo Geothermal San Juan Solar & Batteries Natural Gas  5,8311 KW June 2022 (25 years) 6,459. K KW June 2023 (25 years)  OKW 5MW 5MW  June 2022 (will be replaced by Red Mesa)  UAMPS Geothermal UAMPS  Purchased at $2.675 through 2026  Enchant Coal Carbon Capture Project  Ini response to a question from Chairman Pitcher, Mr. Johnson reported that the Mr. Johnson then shared a video which showed the true cost of wind/solar projects  21 NuScale project is still moving forward; however, he did not have details.  24 after factoring in the costs associated with development and distribution of these resources. 26 Thefollowing items were included in the packet, but not discussed in the meeting:  28 POWER SYSTEMS OPERATIONS REPORT  a. October and November 2020 Resource Reports b.) December 2020 Lost Time/Safety Reports c. December 2020 Public Relation Reports d. October and November 2020 Outage Reports  34 OTHER BUSINESS 37 at the next meeting.  Mr. Johnson reported that Commissioner Cushing has had personal health issues and  36 has asked to be released from his service on the Power Commission. He will be recognized  39 NEXT POWER COMMISSION  The next meeting oft the Power Commission will be held on February 23, 2021 at  The meeting adjourned at 9:16 a.m. on ai motion made by Councilman Higginson and  45 seconded by Commissioner Bell. Voting was unanimous with Commissioners 46 Becker, Bell, Irvine, Pitcher, and Summers, and Councilman Higginson voting "aye".  Page 5of6    (PC minutes. January 26, 2021)  1 2 3 4  fa Jed) Pitcher, CHAIRMAN  Page 6 of6