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Friday, August 23, 2019

August 27, 2019 Regular EPB Meeting

TENTATIVE REGULAR MEETING AGENDA
GLASGOW ELECTRIC PLANT BOARD
AUGUST 27, 2019 - 6:00 pm
1. APPROVAL OF AGENDA AND ANY ADDITIONS
2. CONSIDER ENACTMENT OF GEPB RULES OF ORDER
3. REVIEW AND APPROVE MINUTES OF JULY 23, 2019 MEETING
4. CONSIDER RATIFICATION OF ADJUSTMENTS TO MATERIAL BID
5. CONSIDER PRELIMINARY REVIEW OF ELECTRIC RATE PERFORMANCE
6. CONSIDER TVA LONG TERM PROPOSAL
7. SUPERINTENDENT’S REPORT
A. JULY METRICS AND FINANCIAL METRICS REVIEW
B. SEPTEMBER FCA
C. CPD LEDGER
D. GLENVIEW HEALTH CARE BANKRUPTCY
E. WINDSTREAM BANKRUPTCY
8. ADJOURN

MEMORANDUM
TO: Members of Glasgow Electric Plant Board
FROM: William J. Ray, PE
DATE: 8/22/2019
SUBJECT: Board Meeting Information
August Main Topics
Ø Ongoing Discussion of Establishing GEPB Rules of Order
Ø Ratify Minor Changes to Materials Bid Authorized in July
Ø Preliminary Retail Rate Effectiveness Review and Discussion of TVA Long Term Offer
Ø Reports
📷September 1 FCA
Ø The September 2019 TVA FCA will decrease to 1.503 cents per kWh. This is the second monthly decrease to the FCA in the last two months, since the July increase. TVA’s explanation is that July sales and weather were in line with predictions, and ample rain provided more hydro power than expected.
Ø On September 1, the energy component of our retail rates will adjust to reflect this anticipated decrease to the wholesale cost of energy.
Action Items
Approval of Agenda and any New Items Desired by Board
Ø The present proposed agenda is attached to this narrative, but, as always, any board member can ask for additional items to be added.
EPB Rules of Order
Ø As we’ve all seen, proper compliance with Robert’s Rules of Order, as adopted by the Board earlier this year, was quite difficult due to the volume of rules contained therein, and the general lack of expertise on the many facets to Robert’s Rules.
Ø Since Glasgow EPB has operated quite effectively for over 50 years using simple parliamentary procedures to govern its meetings, the Board may want to consider adopting a written version of basic parliamentary procedure, perhaps customized to meet the specific desires of the Board, such that a return to less burdensome meeting procedures can occur.
Ø A copy of the parliamentary procedure document presented to you last month is attached again for the Board’s consideration. The document includes a few recommended changes, which would better reflect the established operational habits adopted by the EPB over the years. At the meeting this document can be discussed, and any desired alterations can be directed to the Superintendent. If the Board chooses to adopt the Rules of Order document, this document will be formally recorded in the minutes as to what meeting rules are in place for Glasgow EPB.
Review and Approve Minutes of July 23, 2019 Meeting
Ø This is the customary review and consideration of formally adopting the proposed minutes for the last meeting.
Consider Ratification of Changes to Materials Bid from July
Ø After the bid opening of "Transmission Project A" we separated items to find the best price for each item from each vendor. After the Board gave me authorization to proceed with purchase orders, we had a few instances where a vendor made contact with us requesting to be withdrawn from a couple of bids due to inaccuracy of their bid (bid wrong item or gave us wrong price), or instances where they bid materials together (buy all or none) to get us a better price (itemizing every quote still gets us a better price). After talking to each vendor and getting price changes on items such as Ductile Iron Poles, Fiberglass Crossarms, etc., the new price for the project was $241,544.39 vs. the original bid of $236,823.19, which you approved. This is not a material change on a project of this size -- an increase of only around $4700, but to get the minutes and the Purchase Orders to agree, we need you to ratify this change.
Preliminary Retail Rates Review
Ø We made a commitment to an Advisory Committee, and to the City of Glasgow, to conduct annual analysis of our retail electric rates. This is a sound business practice that should be followed, regardless of our commitments, and that review will begin to be shared with you at the August meeting.
Ø We will likely start off with a brief review of the presentation on the history of the EPB rate evolution, which ought to get everyone on the same page as to where we have been and where previous boards have set our course to follow.
Ø Melanie Reed has completed her preliminary analysis of the performance of our various retail rates utilized by the different customer classes, and we will review those at the meeting.
Ø It will be the Board’s decision on how we should proceed during September, and maybe October, as we move toward any adjustments necessary to stay the course.
Consideration of TVA Long Term Offer
Ø This matter really dovetails with the rate discussion above, and we will likely discuss both together.
Ø TVA’s new CEO has proposed a novel approach to the problem of declining energy sales, and that proposal is outlined in a document attached to this narrative, entitled “Long-Term Agreement.”
Ø This is a very complicated matter, but the simple elements are: TVA is willing to give LPCs a 3.1% credit to their power bills (for Glasgow, that means about $500,000 per year), they also want LPCs to alter their power contract to make the term a rolling 20-year agreement instead of the rolling 5-year term.
Ø There are many other “poison pills” in the proposed agreement, which is set to be considered by the TVA board on August 22. Like I said, this is exceedingly complicated and will require much consideration.
Reports
Ø JULY METRICS. Superintendent will do a brief review of the performance of the Glasgow EPB metrics for July.
Ø SEPTEMBER FCA. The Superintendent will go over the upcoming change to the Fuel Cost Adjustment for September, as dictated by TVA.
Ø CPD LEDGER. Since we altered our Variable Rate, at the request of an Advisory Council of our customers, to limit our peak predictions to four days per month, we have financial exposure when we miss the correct actual peak hour. To compensate for that exposure, we added a small amount to the wholesale cost of a peak kW, to collect funds to pay for missed predictions. The Superintendent will report on the status of that fund thus far in the fiscal year.
Ø GLENVIEW HEALTHCARE FACILITY BANKRUPTCY. This was a big surprise to us. At the meeting I will provide an estimate of our likely loss due to our security being lower than our exposure. This matter again points out the wisdom of getting adequate security on all commercial customers, no matter how trustworthy they believe themselves to be. This customer has paid their bills in proper fashion for decades. But, still, bad things happen to good businesses.
Ø WINDSTREAM BANKRUPTCY. Windstream Holdings (parent company of Windstream Company in Glasgow) filed Chapter 11 bankruptcy early this year. There is a large outstanding debt which is owed to EPB (about $40,000 now and increasing each month). To protect our interests and work to secure payment, as well as a suitable new relationship with Windstream going forward, I have engaged Scott Bachert, with the firm Kerrick Bachert PSC, to represent us in this matter. There will be a report on the progress at the meeting.
Conclusion
Please let me know if you have any questions before the meeting.

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