Minutes of the Regular Meeting Northwest Rural Public Power District Board of Directors January 31, 2013

The regular meeting of directors of Northwest Rural Public Power District was held in the Conference Room of the District January 31, 2013 at 1:00 P.M.

The meeting was called to order by the president, Gary Fuchser.  Directors who answered the roll call were Bruce Troester, Gary Fuchser, Mike Van Buskirk, Wayne Cobb, Robert Rickenbach, Lee Ahrens, and Jim Johnson was absent.

Also present were Rolland Skinner, manager; Arlene Lahaye, office manager; Russ Reichenberg, line superintendent; Ron Housh, planning engineer; Les Tlustos, consumer services; Terry Curtiss, District Counsel, Ron Olson, serviceman; and Rick Bridge.

The Open Meeting Law posting was acknowledged. 

All votes are unanimous upon a roll call vote unless noted.

Wayne Cobb made a motion to excuse Jim Johnson’s absence from the meeting.  The motion was duly seconded by Mike Van Buskirk; motion carried.

A motion was made by Robert Rickenbach, duly seconded by Wayne Cobb to accept the order of business as published and supplemented at this meeting; motion carried.

Re-elected directors Gary Fuchser, Wayne Cobb and Robert Rickenbach were seated on the Board with a motion being made by Bruce Troester, duly seconded by Lee Ahrens to seat Gary, Wayne and Robert on the Northwest Rural Board of Directors; motion carried.  The Oath of Office and the Directors’ Pledge was read and signed by afore mentioned Directors.

A motion was made by Bruce Troester, duly seconded by Mike Van Buskirk to keep the rotation and elect officers as follows:  President: Robert Rickenbach; Vice President: Jim Johnson; Secretary: Lee Ahrens; Treasurer: Bruce Troester. Motion unanimously carried.

A motion by Wayne Cobb, duly seconded by Bruce Troester to nominate Mike Van Buskirk as Assistant Treasurer; motion carried.

Mr. Rickenbach took over as board chair and presided over the balance of the meeting.

Rolland Skinner related information from Tri-State concerning to our Tri-State Director.  A discussion followed.  A motion was made by Gary Fuchser, duly seconded by Bruce Troester to re-appoint Wayne Cobb as Northwest Rural’s Tri-State Director.  Further discussion on voting delegate and alternate for the Tri-State Annual meeting.  Motion carried to re-appoint Wayne Cobb as NRPPD’s Tri-State Director.

A motion was made by Wayne Cobb, duly seconded Lee Ahrens, that the minutes of the meeting held December 27th be approved as published and mailed to all directors on January 25th; motion carried.

The manager began the year end report with the comment that 2012 was a year of extremes. The load graphs were reviewed and the record year for irrigation with an all time peak of 31914 kW was discussed.  

Ron Housh reviewed the irrigation kW/HP by irrigation type and the Load Control program for 2012.

The manager than reviewed the 2012 Cash Flow and discussed the difference between the 2012 actual year end and the 2012 budgeted amounts for energy sales and purchased power.  Here again it was pointed out that due to the drought our energy sales and purchased power were over what was budgeted.  A discussion followed.

Rick Bridge left at 2:15 PM.

Robert Scrivner explained to the board the new Tri-State rate and rate structure.  The new Tri-State rate is not billed on measured demand but will be calculated on the energy sales.  Explained that if we have a year again like 2012 and the usage is as high as it was in July & August it would mean a higher calculated demand and a higher power bill.

Mr. Scrivner reviewed the proposed rate increases to the various rate schedules.  A discussion followed.  A motion was made by Wayne Cobb, duly seconded by Gary Fuchser to approve the proposed average rate increase of 3.26% for 2013.  Mike Van Buskirk, nay; Bruce Troester, aye; Wayne Cobb, aye Robert Rickenbach, aye; Gary Fuchser, aye; Lee Ahrens, aye; motion carried.

Northwest Rural will maintain its current rate structure to gain a years experience with the new Tri-State rate and structure before beginning to change Northwest Rural’s structure towards Tri-State’s new rate philosophy.   

Robert Scrivner left at 3:40 PM.

Ron Olson reviewed the 2012 Safety Report.  There were 8 reported injuries, 42 incidents (29 NPPPD – 13 non NRPPD)

Russ Reichenberg reviewed the drug testing program.  There were 17 drug tests in 2012 and all tested negative for drugs or alcohol  

Ron Olson then reviewed the 2012 Outage Report.  We had 117 outages compared to 188 in 2011.  We had 5,594 customer hours off due to the fires in 2012.

Ron Olson left the meeting at 4:15 PM.

At 4:15 PM a motion was made by Bruce Troester, duly seconded by Gary Fuchser to go into an executive session and move the session to the manager’s office to discuss NADC issues. Lee Ahrens, aye; Mike Van Buskirk, abstain; Bruce Troester, aye; Wayne Cobb, aye; Robert Rickenbach, aye; Gary Fuchser, aye; motion carried.  Mike Van Buskirk, Ron Housh, Russ Reichenberg, Les Tlustos and Arlene Lahaye left the meeting.

At 4:40 PM Mike Van Buskirk, Russ Reichenberg, Ron Housh, Les Tlustos and Arlene Lahaye rejoined the meeting.

At 4:40 PM those in the executive session returned to the conference room and a motion was made by Gary Fuchser, duly seconded by Wayne Cobb to come out of executive session.  Lee Ahrens, aye; Mike Van Buskirk, abstain; Bruce Troester, aye; Wayne Cobb, aye; Robert Rickenbach, aye; Gary Fuchser, aye; motion carried.

Russ Reichenberg reported that in 2012 there was $1,049,478 in material charged out of inventory as compared to $513,886 in 2011.  We received $1,378,647 in material for 2012 as compared to $498,987 in 2011.  For 2012 we handled $3,645,219 in material.  

Ron Housh reported on the number of Work Order requests for 2012 and the number that have been completed.  We had 11 Work Orders for the fire damage and approximately 600 poles lost.  We have completed 4 of the fire related Work Orders and have replaced approximately 300 poles.

Russ gave a construction report for 2012.  There was $625,243 for normal construction, $426,473 on system upgrades and rebuild and $2,252,857 on other projects for a total construction cost of $3,304,573 for 2012.

Les Tlustos reported on the marketing activities for 2012.  Les began his report with the opening comment “Northwest’s Message – “Cares about the Consumer, we are not for profit organization with 1.4 customers per mile of line”. 

Addressed the advertising in 2012 and our inability to utilize the Tri-State and Touchstone energy Advertising Coop Program due to the stay placed on advertising June through October due to the election year.  The types of ads that were run were safety issues, customer information, and youth camp & scholarships.  Les stated that clearly, the distinction between “campaigning” and “informing/educating” is critical, and the ability to discuss publicly and truthfully all matters of public concern and or to educate consumers about issues, needs to be clarified.

Service for consumers, promotions and information/education were discussed.  Energy Audits with an infrared camera, high usage complaints.  Promoted Nebraska Water Balance Alliance, Upper Niobrara White Water Issues Meeting, Hay Springs High School Summer Mini Camp Sponsor, Youth Energy Camp, the Washington DC Youth tour, and “Our Energy and Our Future” Grassroots Campaign.

Les reviewed the renewable program for 2012.  At the end of 2012 we had 7 facilities that qualified under LB 436 as interconnected distributed generation.  The estimated rated generating capacity of the qualified facilities is 73.8 kW; this is approximately one half of the 1% we are mandated to allow under LB 436.

Rolland Skinner went on to discuss Northwest Rural’s findings on the distributed generation (DG) that is interconnected to our system.  The renewable industry and the DOE indicate that a 25 to 30% generation factor is available for pay back calculations; however Northwest Rural’s history shows that at best it is 10 -19%. 

Rolland stated that we purchase the kWh from the DG systems at 30 mills; which is what we pay Tri-State for purchased power.  However, the additional costs to Northwest Rural’s other consumers is a subsidy to distributed generation of approximately 2000 mills. 

Arlene Lahaye reviewed the Form 7 Financial Report.  The operating revenue for 2012 was $12,926,091 and the total expenses including depreciation were $11,639,168.  Utility plant increase to $36,487,532 and 99,527,829 kWh were sold; an all time peak of 31914 kW was set and our line loss was 8,29%.

Rolland Skinner closed the annual report with graphs on where are dollars came from and where they went along with graphs on debt, construction, total plant, revenue, funds available and equity.  Rolland commented on the extraordinary events that occurred in 2012 some planned such as the Rush Creek Substation, the Sub transmission line, AMI and the Tri-State Law suit.  There were also the unplanned events.  The adding of 26 new irrigation wells, 25 miles of new line, the fire with the loss of 600 plus poles, the failure of the Gordon Sub transmission line and the rewind of the Gordon Sub transformer.  

All of the unplanned events required many hours of time and additional financing issues.  As his closing statement “2012 was a year of unprecedented challenges for Northwest Rural Public Power District.  Natural disaster, equipment failure, planned expansions for better and more reliable service; unexpected but welcomed opportunities to expand to serve additional customer load; and changes in load characteristics and rate structures provided challenges to the Board, staff and employees.  Much time and extraordinary effort was expended by the employees, management and Board in addressing these matters.  Additionally, ongoing litigation to protect the interests of Northwest Rural Public Power District patrons in a fair rate structure and fair governance with its power supplier have required tremendous investments in time and money. Northwest rural Public Power District, its Board, its staff, and employees has faced unwarranted attack over its policies and actions in providing education to its customers and patrons in addressing all of these matters, needlessly complicating further already difficult matters and wasting staff time responding to the attacks.  

The results attained by Northwest Rural Public Power District demonstrate the dedication, knowledge and skill of the Board, management and employees in operating, maintaining, expanding, and protecting Northwest Rural Public Power District and serving its customers.”

Ron Housh reported to the Board the status of the AMI meter installations in the Gordon area.  The Gordon Mobile Substation was put in service on December 18th and we have been able to read several of the AMI meters even with the Mobile Substation.  There are approximately 200 meters left to install in addition to the meters on the irrigation accounts.  Ron stated that he hoped to have the Chadron Substation installed with the AMI equipment in February and begin the meter replacement process.

Ron informed the Board that the Gordon transformer was tested on January 30th and should be back around February 12th.  He also informed the Board that we will be billed rent on the Mobile Sub starting January 14th.

The Gordon 34.5 line is complete and one mile of the Rush Creek 34.5 line is up and energized.  

The Rush Creek transformer is set at the sub site, the ground grid is in and work is progressing and at this time appears to be a little ahead of schedule. 

Ron Housh left the meeting at 6:00 PM.

Russ Reichenberg reviewed the Safety Report for December.  A discussion was held concerning the high potential incident that occurred along with the Safety Rule violations.  The Board was informed that reprimands were given to those involved.  A motion was made by Bruce Troester, duly seconded by Gary Fuchser to accept the December Safety Report; motion carried.  

Rolland Skinner explained an issue concerning an annuity with Ohio National Insurance.  Rolland needs to have a document signed to authorize him as trustee to his annuity.  A motion was made by Gary Fuchser, duly seconded by Wayne Cobb to authorize the documents needed for Ohio National; motion carried.

 At 6:12 PM a motion was made by Gary Fuchser, duly seconded by Mike Van Buskirk to go into an executive session to discuss NPSIG litigation issues. Mike Van Buskirk, aye; Bruce Troester, aye; Wayne Cobb, abstain; Robert Rickenbach, aye; Gary Fuchser, aye; Lee Ahrens, aye; motion carried.  Wayne Cobb, Russ Reichenberg, Les Tlustos, and Arlene Lahaye left the meeting.

At 6:55 PM a motion was made by Mike Van Buskirk, duly seconded by Bruce Troester to come out of executive session.  Mike Van Buskirk, aye; Bruce Troester, aye; Lee Ahrens, aye; Wayne Cobb, absent; Robert Rickenbach, aye; Gary Fuchser, aye; motion carried.

There being no further business to come before the Board, the President declared the meeting adjourned at 6:56 P.M..

Approved: President

Signed: Secretary

Published: FEbruary 20, 2013