1 2 3 4 5 6  MEETING OF THE May 21,2019. - 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. Alan Farnes offered the invocation.  21 MINUTES- April 9,2019  Minutes of the regular meeting oft the Bountiful City Power Commission held April 9,  23 2019 were presented and unanimously approved as corrected on a motion made by 24 Commissioner Summers and seconded by Commissioner Pitcher. Commissioners Cushing, 25 Becker, Bell, Irvine, Pitcher, and Summers and Councilman Knight voted "aye". 27 BUDGET REPORT- YEAR-TO-DATE 10 MONTH PERIOD ENDING  26 29  28 30APRIL, 2019  Mr. Christensen presented the Budget Report for the Fiscal Year-to-Date 10-month  30 Period Ended 30 April, 2019. He noted that. July 2018 through March 2019 is final (with 31 estimates as shown) and April 2019 is preliminary. He called attention to the semi-annual 32 interest bond payment of $267,914.50 which was made on May 1, 2019 and the corresponding 33 Federal interest expense subsidy of$113,086.71 which wasi received on April 23, 2019.  34 35  Total revenues YTD were $26,408,547, above its historically allocated budget (HAB) by  36 $150,061. Revenue lines above budget included: electric metered sales (EMS), above its HAB 37 by $141,371 or 0.7%; preliminary interest income on investment, above its HAB by $117,527; 38 preliminary interest income on: rate stabilization fund, above its HAB by $15,494; and gain on 39 sale of fixed assets, above its HAB by $23,711. These were partially offset by revenue lines 40 below budget which included: street light income, below its HAB by $(47,741); and contribution  41 in aid to construction, below its HAB by $(122,190).  42 43  Total Operating Expenses YTD was $22,139,076, below the HAB by $1,001,724.  44, Expense lines below budget included: power costs, below its HAB by $929,331 (due to careful 45 purchasing and scheduling of power resources on a daily basis by Mr. Johnson); distribution 46 expense, below its HAB by $123,726; and transformer expense, below its HAB by $17,758. 47 These were partially offset by expense lines above budget which included: street lights, above its 48 HAB by $(95,803); special equipment, above its HAB by $(35,593) and included an unbudgeted  Page 1 of5    (PC minutes May 21,2019)  expense for 5-meter phasing kits required by OSHA to meet arc flash requirements; and loss on 2 fixed assets, above its HABI by $(95,658) with the transfer oftraffic signal system assets and 3 accumulated depreciation to the City's Engineering Department in December 2018.  4 5  Total Capital Expenditures YTD were $2,090,243, which included materials, labor, and  6 third-party work on the 1381 KV substation, feeder #575, the feeder inter-ties for #673-#271 and 7 #573-#676; feeder #37X East; the Stone Creek (Keller) project; the Culver's project, and several  8 other projects. 9 10 11 12 14 15 18 19  Labor and Benefits Expense YTD was $3,467,474, below the 80.5% target by $145,003. The Net Margin YTD was $2,179,228, above its HAB by $895,206 due in large part to Total Cash and Cash Equivalents were a net $26,861,550 at month end, up $1,552,557  13 lower power costs.  16 from $25,308,994 at 30. June 2018. The item giving the greatest strength to the positive cash  17 position was the Net Margin.  As requested by the Commission, Mr. Christensen presented ai report on Bountiful  20 Power's' Total Equity and its component accounts, as of30 April 2019. He began by discussing 21 the basic accounting equation of"Assets: = Liabilities + Equity" and applying it to Bountiful  22 Power. 23 24  He then reviewed Total Equity as reported in Bountiful Power's Budget Report for 30  25 April 2019 as "Fund Equity" of $67,323,881. Its three components included: $7,239,084 in 26 Contribution From Government Units, which is the sum ofall investments made by the City of 27 Bountiful from 1935 to the present; $5,481,826 in Reserve for Rate Stabilization, which is the 28 $5,000,000 cash reserve as required by the 2010 Bond, plus all interest earned on that reserve; 29 and $54,602,972: in Retained Earnings, which is the accumulation ofa all Net Margins, positive or  30 negative, over the entire history of the department since 1935.  31 32  He then reviewed Total Equity as reported in the Bountiful City Consolidated Annual  33 Financial Report (CAFR) for FY: 2018 ini its Statement ofNet Position - Proprietary Funds' 34 where the Light and Power' Fund (Bountiful Power) shows a "Total Net Position" (Total 35 Equity)ofs66391,845. Its three components included: $39,546,821 Net Investment In Capital 36 Assets, which is Bountiful Power's net equity in capital (fixed) assets and which are: funds that 37 are not available for use unless capital assets are sold; $590,898 Restricted, which is equity in 38 funds (cash) that are restricted for debt service, regulatory required insurance deposits, pensions, 39 and other post-employment benefits; and $26,254,126 Unrestricted, which is equity in funds 40 (cash) that are available for use, subject to the $16,000,000 minimum cash required to maintain 41 the. AA- bond rating. It was pointed out that this is an excellent bond rating and provides 42 Bountiful Power the ability to make major purchases, such as natural gas, at lower costs. Simply 43 stated, Bountiful Power's' Unrestricted Net Position" on the CAFR should be seen as the main 44 balance of usable assets to fund its operations and future capital needs. Iti is the only reserve that 45 could fund a future emergency, capital project, power market increase, or downturn in the  46 economy besides raising power rates.  Page 2 of5    (PC minutes May. 21, 2019)  1 2  A brief discussion followed regarding the Enron disaster that occurred in 2000 and the  3 negative financial impact it had on the Power Department; how the Power Department compares 4 with other utilities and whether or not there were any "business groupings" that Bountiful was 5 included which gave it ai rating. It was concluded that the AA- bond rating is indicative oft the  6 excellent financial position of Bountiful City Light and Power.  7 8  The Commission thanked Mr. Christensen for this report and Commissioner Pitcher made  9 ai motion to approve the Year-to-Date Budget Report for the Period Ending April 30, 2019, as 10 presented. Commissioner Bell seconded the motion and voting was unanimous. Commissioners 11 Becker, Bell, Cushing, Irvine, Pitcher and Summers and Councilman Knight voted "aye".  12 14  13 TITANI BATTERY PURCHASE UPDATE  Alan Farnes reviewed that the two Titan Generation Units (installed in 2011-12) each  15 have a battery bank and the most: recent battery test shows that the battery banks are starting to 16 show signs ofcell failures. Quotes for replacement battery banks were requested and it ist the 17 recommendation ofs staff to accept the low quote from GNB Industrial Power in the amount of 18 $22,630. This purchase will be funded from the Power Plant Equipment account. Commissioner 19 Summers motioned to recommend to the City Council that this purchase be approved. 20 Commissioner Pitcher seconded the motion and voting was unanimous.  21 23  22 DOUBLE BUCKET TRUCK PURCHASE  Mr. Pearce reviewed that the Light & Power Department 2019-20 budget includes the  24 purchase ofar new double bucket truck (to1 replace a 2005 truck). Thej proposed new unit will 25 reach higher and uses an incorporated telescopic boom which provides the capability of working 26 and reaching the top oft the poles on the transmission and distribution systems. Italso includes a 27 handling device which can be used for lifting and setting equipment, and added storage space for  28 tools and safety equipment.  29 30  Bids were received from three vendors and it is the staff recommendation to award the  31 bid to Altec Industries in the amount of $255,430. This was not the low bid, but the 32 recommendation is based on the fact that most of the BCL&P equipment is Altec and the 33 employees understand how they work and are comfortable with the functionality oft the overall 34 unit. This contributes to ai much higher safety level (muscle memory) when crews are working 35 with overhead primary conductors in tight spaces and many times holding energized lines while 36 maneuvering the equipment. This unit is also superior in its functionality, giving additional 37 flexibility when working. Altec (Salt Lake City) has given good service ini the past, consistently 38 providing same-day service, which is very valuable because we only have one double bucket unit  39 in our fleet. 40 41  Following a briefdiscussion, Commissioner Becker motioned to recommend to the City  42 Council that the bid be awarded to Altec, as presented. Commissioner Irvine seconded the 43 motion which carried unanimously. Commissioners Becker, Bell, Cushing, Irvine, Pitcher and 44 Summers and Councilman Knight voted "aye". It was also noted that the 2005 Altec truck that is  45 being replaced will be sold at auction.  46  Page 30 of5    (PC minutes May 21,2019)  1 RED MESA SOLAR PURCHASE DISCUSSION  2  Mr. Johnson explained that Red Mesa Solar is a project that UAMPS is looking at and if  3 we wanted toj participate in the project, it would be through UAMPS. Iti is located in the Four 4 Corners area andi is a 601 MW project. It requires a 25-year purchase and is priced just under 3 5 cents/kwh. Bountiful is signed up for 51 MW which would cost approximately 4 cents after 6 delivery. Mr. Johnson recommended that we look seriously at this project because it provides a 7 green energy component to our resources. (He reminded the group that our CRSP and hydro's 8 are not considered green because of when they were brought on line). The project is located on 9 the reservation and our contract would be with the Navajo nation, under tribal law.  10 12 15 17 20 21  11 TAURUSSTACK INSTALLATION UPDATE 14 the weather gets warmer) and the project is finished. 16 DIRECTIONAL BORING UPDATE  Alan Farnes reported that the new exhaust stack that was ordered for the Taurus generator  13 was delivered on May 13thand has been installed. Itis ready to go as soon as it is needed (when  Mr. Veigel reported that we are currently working on the repair of street lights which are  18 not working, and have just finished the area east oft the cemetery along 1800 South between 400 19 East and Davis Boulevard and the area between 700 East and Davis Boulevard along 250 North. 22 enhance cell phone coverage. Verizon is planning on the installation of five (5) towers to 23 provide 4g with four (4) along Bountiful Boulevard and 1 near 100 East 800 South. These 24 towers will be upgradeable to 5g as is needed. He showed examples of what these towers will 25 look like and Mr. Johnson noted that in some cities, iti is anticipated that an antennae will be 26 attached every 300 - 400 feet (on every pole), and could include that equipment for 6-8 service  We: met with Verizon two weeks ago regarding the upgrades that are being installed to  27 providers. 28 30  29 SOLAR INSTALLATIONS UPDATE  Commissioner Bell commented on a letter to the editor (included in the packet) from a  31 solar customer regarding the questionable fairness ofbilling to solar customers. Discussion 32 followed and Mr. Johnson clarified the issue by noting a misunderstanding oft that customer 33 regarding the battery which is used to activate the customer's: solar generator.  34 35  Mr. Christensen referred to the Solar Customer Production and Usage Report hel had  36 prepared which compared production and usage ofNet Metering Residential, Net Metering 37 Commercial, and Feed-In Tariff customers. There are 1951 Net Metering residential customers, 38 6Net Metering commercial customers, and 15 Feed-In Tariff customers. He noted that 80 39 percent of what customers generate comes at a time we don'tneed it and after the City has 40 purchased that energy (or missed the opportunity to sell to the Feed-In Tariff customers); the lost  41 revenue for a year is approximately $200,000 per year.  42 44  43 RESOURCEUPDATE  Chairman Cushing referred to the NuScale nuclear project and stated that the City will  45 need to make a decision as to whether or not to participate in that project. The Department of 46 Energy (DOE) has agreed toj pay the capital costs oft this unit and the operating costs for 10 years  Page 4 of5    (PC minutes May 21, 2019)  1 on the condition that the subscribed owners would then pick up to "own" the project after that 2 time. Bountiful has tentatively agreed to subscribe to 5N MW oft the project and could sign up: for  3 7.5MW. 4 5  A concern regarding picking up the project after 10 years is: would we be getting a new  6 project, or a 10-year old project? In other words, what would be the true value oft the project 7 after ten years? Mr. Johnson said that his greatest çoncern is whether or not the project will get  8 enough subscribers to continue profitable operation.  9 10  Another concern that Chairman Cushing noted, is: what are our other options for power  11 resources? Will we: need other resources- -what current resource of5MW might we. lose? 12 Commissioner Becker was excused at this time (9:55 a.m.). Discussion continued and Mr. 13 Johnson explained that we are at aj place where we can still indicate our interest in thej project 14 without requiring us to pay anything more. The general opinion was that we should continue 15 support of the project, but the terms oft taking over from DOE (condition of project) in 10 years 18 Thej following items were included in the packet, but not discussed. in the meeting:  16 needs to be clarified.  17 19 21 22 23 24 25 26 27 28 29 30 32 35 37 38 39 ADJOURN 40 42 43 44 45  20 POWER SYSTEMS OPERATIONS REPORTS  a. March 2019 Resource Reports  b. April 2019 Lost Time Related Injuries/Safety Report  C. April 2019 Public Relations Report d. March & April 2019 Outage Reports  31 OTHER BUSINESS 34 Memorial Day.  Mr. Johnson reminded the Commission that ift they are interested in attending the Annual  33 UAMPS Conference in Jackson, Wyoming on August 18-21, 2019, to let him know before  36 NEXT POWER COMMISSION  The next meeting of the Power Commission will be on June 25, 2019 at 8:00 a.m.  The meeting adjourned at 10:07 a.m. on a motion made and seconded by Commissioners  41 Summers and Pitcher, respectively.  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