Blog Archive

Thursday, March 22, 2018

March 27, 2018 Board Meeting

MARCH 27, 2018 - 6:00 PM










A. NEW EMPLOYEE - Branson Redford



TO:                       Members of Glasgow Electric Plant Board                 
FROM:                  William J. Ray, PE                 
DATE:                  3/22/2018 - 6:00 PM    
SUBJECT:            Board Meeting Information                                          

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 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 ( 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.

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.

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.

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.