Thursday, March 22, 2018
March 27, 2018 Board Meeting
10:38 AM | 
Posted by
Billy Ray |
TENTATIVE AGENDA
GLASGOW ELECTRIC PLANT BOARD
MARCH 27, 2018 - 6:00 PM
1. MINUTES OF PREVIOUS MEETING
2. ANALYTICS REPORT FOR MONTH OF FEBRUARY
3. REPORT ON APRIL 2018 FCA
4. REPORT ON RATE DESIGN FUNDAMENTALS
5. REPORT ON COMPARATIVE METRICS
6. CONSIDER NEW LED SECURITY LIGHT RATES
7. CONSIDER RULES AND REGULATIONS CHANGE
8. CONSIDER PEER AGREEMENT
9. NEW/OLD BUSINESS
A. NEW EMPLOYEE - Branson Redford
B. INTERNET CLOUD CONNECTION UPGRADE
10. ADJOURN
MEMORANDUM
TO: Members of Glasgow
Electric Plant Board
FROM: William J. Ray, PE
DATE: 3/22/2018 - 6:00 PM
SUBJECT: Board Meeting Information
Preamble
March has been relatively calm, and that
is totally fine with the EPB team. That doesn’t mean that we haven’t
accomplished anything though. We’ve made significant progress on our
reorganization plans to accommodate the large number of retirements coming up
in the next several months. We completed a long-planned upgrade to our internet
circuits to the outside world, and we completed our interrogatories associated
with the application for PEER certification. We’ve also completed the work to
set the new rate changes you approved last month into effect for April 1. It
was a busy, but still calm, month!
The main event for this month will be
EPB Finance Manager, Melanie Reed’s, annual report on how EPB metrics compare
to our peers. This report is based upon an annual report we get from TVA and it
is usually quite interesting to the board. As I have done for the last few
months, I will be prepared to answer questions about our retail rate design and
how we got to where we are today, should anyone want me to go over that again.
If not, I will skip those slides.
The meeting might be a bit long, depending
on the level of questions that you have about Melanie’s presentation, so try to
grab a snack before you arrive. Now, let’s move on to this month’s agenda!
April 1 FCA
As we continue the third year of our new retail rate designs, April 1
will bring us a decrease in overall power cost due to a decrease in the FCA.
The FCA calculation always trails actual TVA fuel expenditures by a couple of
months, so April will see us enjoying the relatively mild February and the
lower fuel cost attendant thereto. The April 2018 FCA is going to decrease to 1.988
cents per kWh, and that decrease, when blended with our other wholesale costs,
will bring about a roughly 2.2% decrease in overall energy costs to us and our
customers. As usual, I am attaching the narrative on the FCA from the TVA
portal. On April 1, the energy component of our retail rates will be adjusted
to reflect this decrease to the wholesale cost of energy.
Rate Design
Fundamentals
Comparative
Metrics
For the last few years we have invited our
Finance Manager, Melanie Reed, to the meeting to report on critical metrics
about our operation and contrast them with the other TVA distributors like us.
Normally this takes place immediately after we get the report from TVA that
provides the comparative data on the other LPCs. To that end, Melanie will be joining us this month to
deliver this report.
LED Security
Light Rate Recommendation
After kicking around ideas for funding a wholesale conversion of
Glasgow’s existing High Pressure Sodium (HPS) street and security lighting
fixtures to LED fixtures, no solution seemed immediately viable. So, several
months ago we began an organic and more affordable approach to the conversion by
simply ceasing to purchase replacement HPS fixtures. Since the HPS
fixtures have several predictable modes of failure, we were constantly having
to purchase replacement fixtures as the ones in plant failed. We now replace
failed HPS fixtures with much more efficient LED fixtures, and that process
will lead, over a multi-year period, to the complete conversion without the
need for a wholesale replacement program and the large amount of capital such an
effort would require.
We began with a program to replace 100 watt HPS fixtures (by far the most
common fixture in use in Glasgow), but now we want to expand the effort to
include replacements for failing 250 watt and 400 watt HPS fixtures. The plan
is to replace them with 154 watt and 247 watt LED fixtures, respectively.
Of course, to do that we need for the board to establish rates for these
new fixtures. TVA commonly asks us to complete a worksheet which incorporates
the cost of the new fixture, the anticipated kWh consumption, and the predicted
maintenance costs. We have performed that work and submitted the proposed rates
to TVA for their approval. At the meeting I will ask you to review the proposed
rates and approve them subject to TVA’s approval. With that completed, we can
extend our replacement program to cover these two existing fixtures such that
we can cease purchasing new versions of them.
Rules and
Regulations Change
Every time we think we have the Rules and Regulations in good shape for a
while, we seem to suddenly discover some language that isn’t right, or could be
stated better. Such is the case this month.
For those of you who are new to the board, the published Rules and
Regulations at http://www.glasgow-ky.com/documents/rulesregs.pdf form the core of what the Board has determined (and TVA regulatory has
approved) to be the rules for how Glasgow EPB interacts with its customers. If
you have not reviewed the Rules and Regulations in detail, it would be a great
thing to do!
One would think that this would be a very stable and static document, but
with a good deal of regularity, we find language that doesn’t really reflect
what prudent business practices actually dictate at present. When we find those
issues, we present them to the Board for consideration. If the Board approves a
recommended change, we then must submit that change to TVA for approval before
we change the published document.
This month we are concerned with the following
language in Section 3. BILLING. “A budget billing plan and an "E-Z Pay" plan are
available upon request for any residential Customer who has been receiving
service at their present location at least eight (8) months. Requests for
information may be made in person, by phone, mail, or email
(epb@glasgow-ky.com) at the office of the EPB.”
Actually, the
budget billing software needs a full twelve months of billing data in order to
render an accurate budget billing amount. We recommend that this language be
replaced with: A budget billing plan and
an "E-Z Pay" plan are available upon request for any residential
Customer who has enough billing history to qualify. A Customer who has been
receiving service at their present location for at least one (1) year may
qualify for this program, and any customer interested in same may make a
request for information regarding the specific impact of the budget billing
program on their account, such that they might elect to participate.
At the meeting I will recommend that you approve this language change
subject to TVA’s approval of same.
PEER
Agreement
Back in December, we were contacted by the Commonwealth of Kentucky
Energy and Environment Cabinet folks who felt that Glasgow EPB’s efforts to
evolve its electric power grid ought to qualify EPB for certification by PEER
(Performance Excellence in Electricity Renewal). They offered to support our application
for certification and to pay any and all fees required by the agency who owns
the PEER certification system, Green Business Certification, Inc. http://peer.gbci.org/
It seemed unwise for us to refuse this overture by the Energy and
Environment Cabinet, so we buckled down and spent a lot of January and February
producing the 140-page application for PEER certification. It appears that our
effort is about to be rewarded because they have now asked us to execute an
agreement between GBCI and Glasgow EPB, outlining the rights and
responsibilities that may come with being certified. It is our understanding
that, if we are successful, Glasgow EPB would become only the second electric
utility in North America to receive this honor.
At the meeting I hope to have a contract which meets the approval of Jeff
Herbert for you to consider. Right now, we are still working with their
standard form agreement and we have asked for a number of changes which they
are working through. We should have something for you to consider by Tuesday
night.
Reports
We have our first new employee as a part of the process of gearing up to
replace the many folks we have retiring over the next few years. Branson
Redford joined the team as an Engineering Technician last week. At the meeting
I will also have a report on our internet circuits upgrade and a couple of
other projects.
Conclusion
Well, that ought to be
more than enough to set your head to spinning for this month. Let me know if
you have any questions before the meeting.
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