Blog Archive

Thursday, September 19, 2019

September 24, 2019 Regular EPB Meeting

TENTATIVE REGULAR MEETING AGENDA
GLASGOW ELECTRIC PLANT BOARD
SEPTEMBER 24, 2019, 6:00 P.M.
1. APPROVAL OF AGENDA AND ANY ADDITIONS
2. CONSIDER MINUTES OF AUGUST 27, 2019 MEETING
3. CONSIDER REVIEW OF ELECTRIC RATE PERFORMANCE AND POSSIBLE APPROVAL OF RATE CHANGES
4. CONSIDER TVA LONG TERM PROPOSAL
5. CONSIDER PROGRAMMING COMMITTEE RECOMMENDATION
6. SUPERINTENDENT’S REPORT
A. AUGUST METRICS AND FINANCIAL METRICS REVIEW
B. OCTOBER FCA
C. CPD LEDGER
D. WINDSTREAM BANKRUPTCY
7. ADJOURN


MEMORANDUM
TO: Members of Glasgow Electric Plant Board
FROM: William J. Ray, PE
DATE: 9/19/2019
SUBJECT: Board Meeting Information
September Main Topics
Ø Continued Retail Rate Effectiveness Review
Ø Discussion of TVA Long Term Offer
Ø Programming Committee Recommendation
Ø Reports
📷October 1 FCA
Ø The October 2019 TVA FCA will increase to 1.528 cents per kWh. This is the first monthly increase to the FCA in the last few months, since the July increase. TVA’s explanation is that August sales and weather were in line with predictions, but rainfall was low, providing less hydro power than expected. That shortfall was replaced with higher cost coal generation and purchases of power from neighbors.
Ø On October 1, the energy component of our retail rates will adjust to reflect this anticipated increase 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.
Review and Approve Minutes of August 27, 2019 Meeting
Ø This is the customary review and consideration of formally adopting the proposed minutes for the last meeting.
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, which we began in August, will continue in the September meeting.
Ø As per the Board’s input, more gradual progress toward making EPB’s rates 100% non-volumetric, will be presented at the meeting for your consideration.
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, especially demonstrating the very small impact on total bills that would result from altering the Customer Charge, while reducing the kWh charge.
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, especially since the TVA offer would produce pretty dramatic changes in retail rate design.
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 presently being reviewed by Ron Hampton.
Ø At the meeting, Ernie Peterson will be present to answer any questions about the proposed agreement that come up. Like I said, this is exceedingly complicated and will require much consideration, but it really must be considered along with our proposed actions which flow from the annual rate effectiveness study.
Consideration of Programming Committee Recommendation
Ø Due to an unreasonable rate increase proposal from the former vendor, who supplied the software and hardware for the local radar on Channel 9, we terminated our agreement with them. Since then, we’ve placed the NOAA weather radar on that channel, and many deem that unsatisfactory.
Ø Recently, a new vendor – WeatherPlay has made us a proposal to replace the NOAA weather radar with another product that seems more closely aligned with the former programming on Channel 9.
Ø The Programming Committee met and considered the cost and benefits of accepting the WeatherPlay offer, and unanimously voted to recommend we accept the offer.
Ø At the meeting we will quickly review some of the video and the pricing of this new product, for your consideration.
Reports
Ø AUGUST METRICS. Superintendent will do a brief review of the performance of the Glasgow EPB metrics for August.
Ø OCTOBER FCA. The Superintendent will go over the upcoming change to the Fuel Cost Adjustment for October, 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 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). 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.