1 2 3 4 5 6  MINUTES OF THE June 25, 2019-8 8:00 a.m. Those in Attendance  BOUNTIFUL CITY POWER COMMISSION  7 Power Commission 8 John Cushing, Chairman 9 Susan Becker 10 Dan Bell 11 David Irvine 13 Jed Pitcher 14 Paul Summers 15 16 17 WELCOME 18 20 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  19 attendance. Commissioner Bell offered the invocation.  21 MINUTES- May21,2019  Minutes of the regular meeting oft the Bountiful City Power Commission held May 21,  23 2019 were presented and unanimously approved as written on ai motion made by Commissioner 24 Irvine and seconded by Commissioner Summers. Commissioners Cushing, Becker, Bell, Irvine,  25 Pitcher, and Summers and Councilman Knight voted "aye".  26 29 32 33  27 BUDGET REPORT-) YEAR-TO-DATE 11 MONTH PERIOD ENDING  28 31M MAY,2019  Mr. Christensen presented the Budget Report for the Fiscal Year-to-Date 11-month  30 Period Ended 31 May, 2019. He noted that July 2018 through. April 2019i is final (with estimates  31 as shown) and May 2019 is preliminary.  Total revenues YTD were $28,583,068, above its historically allocated budget (HAB) by  34 $155,941. Majori items above their HABs included: electric metered sales, above by $106,765; 35 preliminary interest income on investment, above by $145,344; preliminary interest income on 36 rate stabilization fund, above by $21,255; and gain on sale of fixed assets, above by $58,858 with 37 the sale of used vehicles and the 62 MVA and 75 MVA transformers from the 138KV 38 substation. These accounts were partially offset by revenues below their HABs in the following 39 accounts: street light income, below by $(47,630); connection fees, below by $(18,413); ;and  40 contribution in aid to construction, below by $(168,304).  41 42  Total Operating Expenses YTD were $23,856,000, below its HAB by $1,091,290. Major  43 items below their HABs included: power costs, below by $1,071,713 due to careful purchasing 44 and scheduling of power resources on a daily basis by Mr. Johnson; and distribution expense, 45 below by $92,786. These were partially offset by: street light expense, above by $(94,711); 46 special equipment expense, above by $(35,122) with an unbudgeted expense for 5-meter phasing 47 kits required by OSHA to meet arc flash requirements and a budgeted purchase ofa 3-phase 48 meter tester; substation expense, above by $(37,021) with the write-offofa $97,007 obsolete 138  Page 10 of6    (PC, minutes sine 25, 2019)  KVt transformer in February; and loss on deleted fixed assets, above by $(95,658) with the 2 transfer of the traffic signal system assets and accumulated depreciation to the City's  3 Engineering Department in December 2018.  4 5  Total Capital Expenditures YTD were $2,411,508, which included materials, labor, and  6 third-party work on1 the 1381 KV substation, feeder #575, the feeder inter-ties for #573-#676 and 7 #673-#271; feeder #37X East; the Stone Creek (Keller): I project; the Culver'sproject, and other  8 projects. 9 10 11 $167,840. 12 13 15 16  Labor and benefits expense YTD was $3,788,683, below: its 88.2% YTD target by The net margin for the YTD was $2,315,559, above its HAB by $980,337 largely due to Total Cash and Cash Equivalents were ai net $25,995,818 at month end, up $686,824  14 lower than budgeted power costs.  17 from $25,308,994 at 30. June 2018. The item giving greatest strength to the positive cash 18 position was the net margin. Discussion followed regarding changes in the Balance Sheet and 19 the Cash Flow Statement, particularly with respect to the investment accounts used by the City. 20 In response to a question from Commissioner Pitcher, Mr. Johnson stated that the City is not  21 required tol bei in the State fund.  22 23 26 28  Commissioner Summers motioned for the Budget Report to be approved; Commissioner  24 Bell seconded the motion and voting was unanimous. Commissioners Cushing, Becker, Bell,  25 Irvine, Pitcher, and Summers and Councilman Knight voted "aye". 27 ECINORTHWEST SUBSTATION ENGINEERING APPROVAL  Alan Farnes reviewed that the Northwest substation is the oldest substation on our  29 substation (built in 1971-72). Iti is located east of the Viewmont High School football field. In 30 an effort to correct several system reliability and safety issues, this substation needs to be 31 upgraded and the 2020 budget begins to fund this work. He reviewed the proposed schedule, 32 including awarding a bid for a General Contractor and ordering long-lead equipment items. A 33 cost estimate has been requested from Electrical Consultants, Inc. (ECI) to assist with the 34 engineering consulting services for this project. They have worked with us on several projects, 35 most recently the rebuild of the 138 substation, and we have a good working relationship with 36 them. Itis the recommendation ofs staff that approval be given for the services ofECI, not to 37 exceed a cost of$350,000 for the requested engineering services. Commissioner Summers 38 motioned to recommend approval oft the $350,000 fee for electrical consulting services. 39 Commissioner Irvine seconded the motion and voting was unanimous. Commissioners Cushing, 40 Becker, Bell, Irvine, Pitcher, and Summers and Councilman Knight voted "aye".  41 43  42 ECHO EMERGENCY PLANT REPAIRS  Alan Farnes explained that there are three turbines at the Echo hydro plant and a problem  44 developed with the #1 unit (rated at 1,750 watts). This unit has been taken offline and Prime 45 Machine Inc. (experienced with maintaining and rebuilding turbines) was contracted toi inspect 46 the turbine and determine what the problem is. The total cost to mobilize their crew and  Page 2 of6    (PC, minutes. June 25, 2019)  equipment, dismantle, inspect, and reassemble and demobilize this unit is $33,113. The City 2 Manager authorized this expenditure due to its sensitive nature, and staff now seeks the 3 Council's approval. Commissioner Pitcher motioned that the Planning Commission recommend 4 this expenditure to the City Council. Commissioner Becker seconded the motion and voting was 5 unanimous. Commissioners Cushing, Becker, Bell, Irvine, Pitcher, and Summers and  6 Councilman Knight voted' "aye".  7 9  8 ECI3100 SOUTH ENGINEERING APPROVALS  Mr. Veigel explained that the rebuild oft the Feeder #575 line which runs along 3100  10 South from Orchard Drive to 400 East is one of the projects int the 2019-20 budget. This is part 11 oft the long-term plan to upgrade feeders for capacity and dependability. This project will require 12 ai few steel poles, which are al long-lead item. In anticipation of this schedule, and the need for 13 engineering consulting services, iti is the staffrecommendation that the services of Electrical 14 Consultants Inc. (ECI) be approved. The 2019-20 budget includes $550,000 for this project and 15 ECI has provided a not-to-exceed cost estimate of $35,000 for engineering services for same 16 project. The costs for design of the wood poles portions of this project will be done in-house. 19 explained that it is not required tol have competitive bidding for engineering services. 20 Commissioner Irvine asked about the considerations of wood VS steel poles and Mr. Veigel 21 explained that the main difference was in the anchoring. Wood has to have guy wires for support 22 and cannot be used in areas where there are sidewalks, etc. Following al brief discussion, 23 Commissioner Irvine motioned that the Planning Commission recommend approval ofECI 24 engineering services to the City Council in an amount not-to-exceed $35,000. Commissioner 25 Bell seconded the motion and voting was unanimous. Commissioners Cushing, Becker, Bell,  17 18  Commissioner Pitcher asked if competitive bidding was required and Mr. Veigel  26 Irvine, Pitcher, and Summers and Councilman Knight voted "aye".  27 29  28 DIRECTIONAL BORING UPDATE  Mr. Veigel explained that Hunt Electric and their subcontractors are working to change  30 out street light wires which were directly buried in the ground. The wires are being put in 31 conduit, and then the wires are attached at the bottom ofthe pole. Boring is done instead of 32 digging to facilitate less disruption to ground-level amenities. 15 poles have been identified 33 currently and there is one boring crew and one wiring crew working with Hunt Electric to  34 complete this work.  35 37  36 RED MESA SOLAR PURCHASE DISCUSSION  Mr. Johnson explained that the Red Mesa solar project through UAMPS is being  38 considered as a high/low resource match for the 61 MW ofthe turbines at our plant, but final costs 39 are not yet known. The estimated average cost could be approximately $30.50 per MWH. This 40 isa 25-year project, located on the Navajo reservation and appears that it will be successful; 41 however it is not yet finalized. The City Attorney has not yet reviewed the contract and needs to 42 look ati it. High load projects are currently provided between CRSP and the power plant, with 43 additional needs coming from the market. The CRSP project is a 50-year license which will 44 need to be renewed in a few years. One oft the major concerns is the resource needed for Air  45 Products, but we don'tknow that we will always have them.  46  Page 3of6    (PC, minutes. June 25, 2019)  1  Another consideration is the mounting pressure for matching solar revenue with costs.  2 We are currently paying $.0925/kwh to our residents and the delivered cost for the Red Mesa 3 resource is estimated at $.04/kwh. This "green" resource would be aj positive and would help 4 with bonding. Commissioner Bell asked what might stop the project at this point and Mr. 5 Johnson suggested that the main consideration would be negotiations onj pricing.  6 8  7 CARBON FREE POWER PROJECT JUMP MODULE  Mr. Johnson narrated a slide presentation on the proposed carbon free nuclear project  9 currently being developed by NuScale. He first reviewed our current resources and how they 10 match our yearly load data and then gave an overview oft the proposed NuScale project, 11 including the 34.5 acre facilities and individual generation and storage units. He then went over 12 the Development Agreement, Licensing and participant options. In order for UAMPS to 13 participate economically in the project, they would need toj purchase 150 MW; they currently 14 have 1241 MW of"interested" participation. He explained that the Department of Energy has 15 extended an offer to participate for a 10-year period tol help get the project off the ground. This 16 is an 80-year resource, scheduled tol be complete in 2027. An initial commitment must be made 17 by the July meeting, but the Agreement provides for reduction of entitlement or withdrawal as  18 defined by Phases.  19 20  Considerations that BCLP must look at are current resources, how they match each other,  21 and their long-term existence, as well as costs of delivery of the NuScale resource. It was noted 22 that future changes in technology (electric cars, cell phones, etc.) will have an unknown impact 23 on demand for electricity. The general consideration was that this take-or-pay 99-year contract 24 resource should be considered and not dismissed at least as long as opting out or reducing 25 entitlement is an option. It was the recommendation ofs stafft to commit to 5 MW, relying on the 26 jump program, recognizing there is an opt-out provision, ifneeded. It was also suggested that 27 the staff and Power Commission meet in a one- or two-day retreat with the City Council to 28 review this project. Commissioner Pitcher made a motion to recommend to the City Council that 29 support be given to the existing 5 MW commitment and 2.4M MW ofjump program and move 30 forward with public relations in support of this project. Commissioner Summers seconded the 31 motion. Voting was unanimous with Commissioners Cushing, Becker, Bell, Irvine, Pitcher, and  32 Summers and Councilman Knight voting "aye". 34 GFCSUSTAINABLEGEOTHERMAL ENERGY  33 35 36 37 39  Allen - please summarize this one.  38 PRE-PAY GASSUPPLY CONTRACT  Mr. Johnson referred to the McCarter English Draft (June 5, 2019) oft the Gas Supply  40 Contract proposed between the Public Energy Authority of Kentucky (Kentucky) and others - of 41 which BCLP staffi is considering participation. He explained that Kentucky will pre-buy the gas 42 and participate with cities whose loads match the availability ofthe gas. Participating in this 43 contract will allow BCLP toj purchase gas at a savings of $30,000 a year. The contract period 44 would start next summer and go through 2049. The only down side is that it will only be 45 available during halft the year and we would still need toj purchase from our current supplier for 46 the other half. Iti is staffrecommendation to participate in this contract, subject to its review by  Page 4 of6    (PC, minutes. June 25, 2019)  1 the City Attorney. Commissioner Irvine made a motion to recommend participating in the Gas 2 Supply Contract with Public Energy Authority of Kentucky, subject to the City Attorney 3 reviewing the contract. Commissioner Pitcher seconded the motion and voting was unanimous. 4 Commissioners Cushing, Becker, Bell, Irvine, Pitcher, and Summers and Councilman Knight  5 voted "aye". 6 8  7 SOLARINSTALLATION UPDATES  Mr. Christensen reported that there are currently 216 solar customers in Bountiful and the  9 lost revenue for the 12 month tear-to-date period is $170,000. Five potential customers are in the 10 process ofinstalling solar. It was suggested that the solar report be given on a quarterly (not  11 monthly) basis. 13 RESOURCEUPDATE  12 14 15 17 19 20 21 22 23 24 25 26 27 28 30  This topic was integrated into the discussion of previous topics.  16 Thefollowing items were included ini the packet, but not discussed in the meeting:  18 POWER SYSTEMS OPERATIONS REPORTS  a. April 2019 Resource Reports  b. May 2019 Lost Time Related Injuries/Safety Report  c. May 2019 Public Relations Report D. May 2019 Outage Reports  29 OTHER BUSINESS  Al historical fact sheet regarding Municipal Bond Ratings, as of September 17,2018, was  31 presented and discussed. Fivej projects have been bonded since 2008 (San Juan project, Central- 32 St. George Transmission project, Payson Power Project, Horse Butte Wind project, and Veyo 33 Heat Recovery Project). City bonds were rated by S&P, Moody, and Fitch and currently are 34 either. A, A2, or A3. (One exception was the S&P rating of A- on the Payson Power Project). It  35 wasi noted that the better the bond rating, the lower is our interest rate.  36 37  Chairman Cushing recognized Mr. Johnson on his recent recognition ofa a personnel  38 service award at the national APPA conference in Austin, Texas. He thanked Mr. Johnson for 39 the bringing this honor to our utility, noting that it isap positive reflection oft the whole  40 department. 41 43 44 46  42 XECUTIVESESSION  This Agenda item was cancelled.  45 NEXT POWER COMMISSION  The next meeting of the Power Commission will be on August 27,2019 at 8:00 a.m.  Page 5of6    (PC, minutes June 25, 2019)  1 2 ADJOURN 3 5 6 7  The meeting adjourned at 10:00 a.m. on a motion made and seconded by Commissioners  4 Irvine and Summers, respectively.  MC Gag  Page 6 of6