MINUTES OF THE August 27,2019-8:00: a.m. Those in Attendance  BOUNTIFUL CITY POWER COMMISSION  4 5 6  7 Power Commission 8 John Cushing, Chairman 9 Susan Becker 10 Dan Bell 11 David Irvine 13 Paul Summers 14 15 City Administration 16 Gary Hill, City Manager 17 18 Excused 19 Jed Pitcher, Commissioner 20 21 WELCOME 22  Power Department Allen Johnson, Director Jay Christensen Alan Farnes Dave Farnes Luke Veigel Recording Secretary Nancy Lawrence  12 John Marc Knight, City Council Representative Jess Pearce  Chairman Cushing called the meeting to order at 8:00 a.m. and welcomed those in attendance.  Councilman Knight offered the invocation.  23 MINUTES-. June 25,2019  26  Minutes oft the regular meeting ofthe Bountiful City Power Commission held June 25, 2019  27 were presented and unanimously approved as written on ai motion made by Commissioner Summers and 28 seconded by Commissioner Irvine. Commissioners Cushing, Becker, Bell, Irvine, and Summers and  29 Councilman Knight voted "aye".  30 33  31 RESOLUTION NO.2019-08 TO APPROVETHE RED MESA 32 TAPAHA SOLAR FIRM POWERSUPPLY AGREEMENT  Mr. Johnson reviewed that the Power Department has been working to secure a utility size solar  34 power project for some time and we: now have an opportunity to purchase 8.8355% (or 5,831 kW) of the 35 661 MW output from the "Red Mesa Tapaha Solar Project". This project is owned by the Navajo Tribal 36 Utility Authority (NTUA) and is located on the Navaho reservation in Utah. The transmission rights for 37 this project have been secured and the power will be delivered under UAMPS' Transmission Service 38 Operating Agreement. The term oft the power purchase agreement would be 25 years commencing on  39 the commercial operation date which is anticipated to be June 1, 2022.  40 41  The purchase price for the project is $23.15 per megawatt hour (MWH) with an annual 2%  42 escalator for an average cost of $29.66/MWH ($0.23/kwh, orj just under $.03/kwh) for the 25 years. We 43 currently pay our solar customers up to $0.09/kwh, making the Red Mesa resource extremely favorable. 41 Mr. Johnson pointed out that this resource will allow us to increase our renewable energy portfolio for the entire City. This solar resource will be backed up by the existing Power Department's power plant toj provide power to the residents in the afternoons and evenings. The Agreement has been reviewed by  Page 1of5    (PC minutes August. 27, 2019)  the City Attorney andi iti is the recommendation of stafft that Resolution No. 2019-08 entitled, "A 2 RESOLUTION AUTHORIZING THE RED! MESA TAPAHA SOLAR PROJECT TRANSACTION SCHEDULE UNDER 3 THE POWER SUPPLY AGREEMENT WITHUTAH! ASSOCIATED MUNICIPAL POWER SYSTEMS; ANDI RELATED 4 MATTERS" be approved. Following al briefdiscussion, Commissioner Irvine enthusiastically motioned 5 that the Power Commission recommend to the City Council that Res. No. 2019-08 be approved and the 6 Mayor be authorized to sign it. Commissioner Summers seconded the motion and voting was 7 unanimous in the affirmative. Commissioners Cushing, Becker, Bell, Irvine, and Summers and  8 Councilman Knight voted "aye".  9 11  10 TRUCK CAB AND CHASSIS APPROVAL  Mr. Pearce reviewed that the 2019-20 budget includes the purchase of a new substation  12 maintenance vehicle to replace Unit #5026, a 2006 Chevrolet extended cab vehicle. The purchase will 13 be made in two parts - cab and chassis in one bid and service body in a second bid. The total budgeted  14 for this vehicle is $85,000.  15 16  Iti is the staff recommendation that the cab and chassis be purchased from Performance Ford  17 Lincoln (local dealer), low bid, for a 2020 Ford F-350 super cab, diesel, 4x4 at aj price of$43,240.90. 18 Commissioner Summers made ai motion that the Power Commission recommend to the City Council that 19 the bid from Performance Ford Lincoln in the amount of$43,240.90 be accepted. Commissioner Bell 20 seconded the motion and voting was unanimous. Commissioners Cushing, Becker, Bell, Irvine, and  21 Summers and Councilman Knight voted "aye". 23 SERVICE BODY APPROVAL  22 24  Mr. Pearce presented the bid results for the service body to be used on the cab and chassis, just  25 discussed (see above). Four bids were received from two local suppliers. Itis the staff recommendation 26 to accept the low bid from Mountain States Industrial Service, fora. Dakota service body in the amount 27 of$34,925.00. This will be within the budget as noted above. Commissioner Becker made ai motion 28 that the Power Commission recommend to the City Council that the bid for the Dakota service body be 29 approved, as presented. Commissioner Bell seconded the motion which carried unanimously. 30 Commissioners Cushing, Becker, Bell, Irvine, and Summers and Councilman Knight voted "aye".  31 34 37 38  32 BUDGET REPORT - YEAR-TO-DATE 12-MONTH PERIOD ENDING  33 JUNE30, 2019  Mr. Christensen presented the Budget Report for the Fiscal Year-to-Date 12-month Period Ended  35 June 30,2019. He noted that May 2019 is final (with estimates as shown) and June 2019 is] preliminary.  36 Missing data includes numerous fiscal year-end (FYE)adjustments.  Total revenues YTD were $30,603,038, below its historically allocated budget (HAB) by  39 $(4,035,349). Major items (below) their HABs were: Electric Metered Sales (EMS), below its HAB by 40 $(25,865) or 0.1%; Air Products Income, below its HAB by $(54,158) due to the temporary loss ofits 46 41 KV transformer in November 2018; Street Light Income, below its HAB by $(47,592) due to a timing 42 difference; Contribution In Aid to Construction, below its HAB by $(216,420); and Use of Retained 43 Earnings, below its HAB by $(3,964,152) as many budgeted capital expenditures which were to be 44 funded by the use ofretained earnings were either below their budgets or were not done. These were 45 partially offset by items over their HAB including: Interest Income on Investments, above its HAB by 46 $200,134; Interest Income on Rate Stabilization Fund, above its HAB by $37,698; and Gain On Sale of  Page 2 of5    (PC minutes August 27, 2019)  Fixed Assets, above its HAB by $52,660 with the sale oft transformers and used vehicles.  Total Operating Expenses YTD were $27,083,663, below its HAB by $914,224. Major expenses below their HABS included: Power Costs, below by $1,134,778; Distribution Expense, below by 5 $120,272; and Contingency Expense (which was not used), below by $657,246. Major items over their 6 HABs were Street Light Expense, below by $(272,838); Loss on Deleted Fixed Assets, below by 7 $(95,658) with the transfer oft the traffic signal system to the City's Engineering Department in 8 December 2018; and Amortization Expense, below by $(1,212,235) for the San Juan power plant, which  9 had not been included ini the budget.  10 11 14 15 18 19 22  Total Capital Expenditures YTD were $2,468,819, and included materials, labor, and third-party  12 work on1 the 138 KV substation, Feeders #575 and #37X East, feeder inter-ties for #673-#271 and #573-  13 676, the Stone Creek Rainey project, and the Culver's project.  Total Labor & Benefits (TL&B) expense YTD was $4,336,109. As of15June: 2019 (the last pay  16 period paid in the YTD period), 95.9% or $4,300,568 of the TL&B budget could have been spent; the  17 actual TL&B was $(35,541) above that target.  The Net Margin YTD was $1,050,556, above its HAB by $1,050,556, with lower than budgeted  20 capital expenditures, power costs, and many other operating expenses more than offsetting lower than  21 budgeted revenues.  Total cash & cash equivalents were ai net $26,047,203 at month end, up $738,209 from the total at 30. June 2018. The biggest factor ini the cash flow was the net margin. Commissioner Summers asked ifthere was a written policy regarding cash and cash equivalents balances. Mr. Johnson noted that the 26 only solid requirement is that $5 million be retained to back the bond. Otherwise, the cash balancei is 27 designed to support the operations oft the Department, maintain its AA- Bond rating, and fund its 30 BUDGET REPORT-YEAR-TO-DATE 1-MONTH PERIOD ENDED JULY: 31,2019 32 independent audit is completed (expected by November). Because oft this, the fiscal year-to-date (YTD) 33 July 2019 income statement, balance sheet, and cash flow statement in this report are subject to audit 34 adjustments and are also preliminary. He also explained the process for creating more accurate budget 35 comparisons for FY 2020 estimates for Electric Metered Sales, Airl Products Income, and UAMPS 36 power costs (all ofwhich have time delays of about a month between when revenues or expenses are  28 proposed 10-year capital expenditure program. (Motion/action in next item).  29 31  Mr. Christensen reiterated that the fiscal year (FY)2019 figures are preliminary until the  37 earned ori incurred and when they are reported in the financial statements.  38 39  Total Revenues YTD were $2,102,940, below its HAB by $(384,010). Major items below their  40 HABs included: Electric Metered Sale, below by $(272,881); Air Products Income, below by $(32,895) 41 with a 63% load factor; Contribution in Aid to Construction, below by $(38,416); and Interest Income 42 on Investments and Interest Income on. Rate Stabilization Fund which were both below their HABs due  43 tol FYE adjustments.  11  Total Operating Expenses YTD were $2,294,453, below its HAB by $645,973. The major item below its HAB was Power Costs, $556,387, attributed to lower EMS, and careful purchasing and  Page 30 of5    (PC minutes August 27, 2019)  scheduling of! power resources. Hydro Transmission was below its HAB by $64,501 and included only 2 the annual insurance payment. Significant items above their HABs were Distribution, $(16,165), and  3 Street Light Expense $(15,919).  4 5 6 Inter-tie. 7 8 11 12 14 15  Total Capital Expenditures YTD were $2,803 and included materials for the feeder #673-#271 Total Labor and Benefits Expense YTD was $153,939. As of13. July 2019 (the last pay period  9 paid in the YTD period), 3.6% or $165,181 of the TL&B budget could have been spent; the actual  10 TL&B was $11,242 below that target.  The Net Margin for the YTD was $(191,316), above its HAB by $261,434, with lower than Commissioner Bell made ai motion to approve the Budget Reports for the following periods:  13 budgeted power costs that more than offset lower than budgeted revenues.  16 Year-To-Date 12-Month Period Ending June 30, 2019; and Year-To-Date 1-Month Period Ended July 17 31, 2019, as presented. Commissioner Summers seconded the motion and voting was unanimous ini the 18 affirmative. Commissioners Cushing, Becker, Bell, Irvine, and Summers and Councilman Knight voted  19 "aye". 20 22 23  21 Commissioner Irvine was excused at this time.  An informal discussion followed regarding the solar resource and future implications ofa air  24 pollution from natural gas, as well as the possibility of participating in the nuclear project in Idaho. 25 Commissioner Cushing also noted that, in the last 12 years, $48,482,128 has been expended for capital 26 projects by BCL&P for the purpose of maintaining substations, the plant, purchasing equipment and 27 other maintenance projects. In addition to accomplishing these improvements, BCL&P has been able to 28 maintain a positive cash position. He mentioned that consideration might be given to a small rate 29 increase every year- - as opposed to increasing rates less often but by more significant amounts.  30 32  31 ECHOLINE PROBLEMS UPDATE  Mr. Pearce reported on the recent damage/repair on the Echo Transmission. A cross arm on an  33 80-foot pole broke, and resulted in a wildfire starting below the pole. He narrated a video ofthe repair 34 that was done and which also showed additional weaknesses along this transmission line that will need 35 to be repaired this fall when the hydro line is not in use. This line is 33 years old and planned 36 maintenance will be scheduled. The video demonstrated the expertise oft the crews who were able to 37 work in very difficult terrain with equipment limitations and kudos were extended to those individuals. 40 involving five structures later this fall. Mr. Hill pointed outt that a healthy cash balance is a critical 41 condition ofbeing able to perform these repair/maintenance, jobs that were not included ini the budget. 43 City could be held liable for firefighting costs should a fire break out as a result of transmission issues. 44 With this ini mind, he said that we might look at getting fire coverage in our insurance package.  38 39 42 45 46  Mr. Pearce noted that Cache Valley Electric has been asked for a quote to do the line repair work In addition to making sure that our power resource is reliable, Mr. Johnson pointed out that the  Page 40 of5    (PC, minutes August 27, 2019)  DIRECTIONAL BORING UPDATE  Mr. Veigel reported that Hunt Electric just needs to do the wiring on the street lights to complete that project. An unidentified culvert was found near Andy's gas station on 1250 South 500 South and a solution to working around this obstacle is being studied. They are ready to start working on 1000  5 North (by the Fifth Amendment) to 200 West. He said this project is going well.  6 8  7 SOLARI INSTALLATIONS UPDATE  Mr. Christensen provided a spreadsheet on the current financial position ofs solar customers, with  9 total lost revenue from 195 residential customers (on net metering) at $152,580; lost revenue from six 10 (6) net metering commercial customers at $10,334. Revenue lost to Feed-in tariff customers was 11 $6,994. Wea are attempting to have rate schedules that make it sO non-solar customers are not  12 subsidizing those with solar and it is fair for all customers.  13 15 17 19 21 22  14 RESOURCE UPDATE  Mr. Johnson reported briefly on the proposed nuclear project and noted that he is still on the  16 UAMPS board for this project and will continue tol keep the Commission apprised of developments.  18 Thefollowing items were included in the packet, but not discussed in the meeting:  20 POWER SYSTEMS OPERATIONS REPORTS  a. May and June 2019 Resource Reports  b., June and July 2019 Lost Time Related Injuries/Safety Report  26 27 28 29 30 32 33 35 36 37 ADJOURN 38 40 41 42  June and July 2019 Public Relations Report D. June and July 2019 Outage Reports  31 OTHER BUSINESS  None.  34 NEXT POWER COMMISSION  The next meeting oft the Power Commission will be on September 24, 2019 at 8:00. a.m.  The meeting adjourned at 9:20 a.m. on a motion made by Commissioner Summers and seconded  39 by Commissioner Becker.  John Pg  Page 5of5