EWEB Board of Commissioners — April 5, 2022

0:02 well april 5th 2022 regular meeting of the gene one electric board to order the first agenda item is uh agenda check anything that anybody wants to discuss about moving the agenda around or alterations uh i don't thank you i don't have anything this evening all right nothing for me sir mindy nothing sonia thank you good to go thank you very much thank you agenda items public input anybody signed up to either in person or on on phone from public employee we don't

0:47 and we're running a little bit ahead of schedule for in person so maybe we can circle back okay and then so i'm going to uh at 6 35 i'll look to the audience and see if anybody's attending attendance and if they are and we'll uh we'll deviate from schedule and let them testify is that correct okay thank you okay the next is uh consent count account approval consent calendar a i think you've all had a chance to read it uh is there is not is there a motion to approve without consent counter a second credit second by carlson all those in favor signify by saying hi and raising your hand hi unanimously

1:36 i'd like to pull the items uh number five number eight number ten five eight ten on consent counter b have been pulled uh anything else did anybody like to pull take a look at nine and mcrae is pulling nine okay absent five eight nine and ten is your motion to adopt consent calendar mike carlson thank you second by mccrary who's got consent calendar b minus the four items signify by saying i am raising your hand unanimously uh commissioner carlson you want to start with number five please so i pulled uh number five and number eight primarily due to the the size five

2:23 million dollars for nexter and pacific excavation i i just think that something of that significance shouldn't just be a quick uh you know vote on here i would like to have staff come and talk to us a little bit about it on each of those get a little bit more conversation and i would like to later talk about having a motion around consent calendar items removing those from consent calendar and actually having the agenda items okay i'd like to general manager's feedback on the the effects of pulling those if we delay them and things such as that so could you give us some feedback on that frank well i would um with respect to the

3:08 items pulled i would just assume refer to staff karen kelly and or appropriate staff to talk about the specific items okay number number five is the uh electrical products five million over five years uh karen kelly good evening commissioners karen kelly chief operations officer for the record um consent calendar number five for annexer is a standard stock of parts for electrical we did use a cooperative contract for that to try and get a pretty robust process through other means to save us time and get um other contracts going uh from another source so i think i will have quentin come online and

3:54 discuss that process the cooperative contract process sure thank you commissioners thank you karen so uh yes as karen mentioned there that is a what we call an interstate cooperative agreement and it was established through an entity um that awards that advertises basically for multiple agencies across the united states uh in the effort to get like a a larger contract put in place that will offer substantial savings to its participating members which eweb is one of and that that's that's basically it so there's a large contract that's available to us to use it's through our ors it's allowable to use those

4:39 cooperative procurements i want to make sure that if i may just understand committee carlson's concern i think she had kind of indicated that she would like a make these actually an agenda item when anything gets over five million dollars and so uh is this explanation enough for you to move this forward at this particular time i did have another follow-up question that i just wanted to get kind of a conversation around you you said that there was it was competitive and i just wanted to find out a little bit more about what the non-responsive piece meant and and how that's right okay so on item number five that one there there was nothing about a non-responsive

5:25 uh bidder on that one was there another item over there okay no i'm fine on this i just it just feels like with ones that have such a big dollar value that we should get a little bit more conversation with staff and maybe a little bit of work on it um and maybe others don't feel that way i just wanted to raise it as a conversation starter so i'm fine with moving forward with number five i would like to have the the same kind of conversation with pacific

6:10 excavation when we get to number eight but i'm fine with number five let's do one at a time so anybody wants to move to adopt consider consent calendar b item five so move at least so so move by seven by macrae all those in favor signal by fight high by raising your hand approved okay uh consent calendar b number eight uh civic excavation also karen kelly uh would you like to yeah so this one is uh 19 million for the two storage tanks wanted to talk a little bit about the process and you know how we arrived at this particular group

6:55 okay yeah i again will ask quentin to chime in but this this was a standard uh request for proposals and we we have worked with pacific excavation we did get uh a number of responsive bids and um you know uh we have worked with this contractor in the past we've had a good rapport with them um so quentin do you want to discuss the process sure yeah um as karen mentioned this was a standard invitation to bid process for a construction contract and it was bid competitively and we did receive a number of responses and the ranking was that uh pacific excavation was the highest ranked uh lowest responsive responsible bidder um so i i think that the question is more around

7:41 the the amount of the contract is that correct yeah i just you know this is and this is a test too so maybe it doesn't make sense but i wanted to just have the quick conversation with these two items since they're so large to make sure that we are giving them the due diligence that they deserve and i and i do well recognize that the documentation in the packets has increased significantly over the last number of years but it it seems like you know with with such a big dollar value that i just want to make sure that we're giving it due diligence and you know it doesn't seem like too much more is coming out of the conversation but um i wanted to see a little bit more about about what would come from it because it's just a big dollar value and it seems like it's not doing it justice to just have it as

8:27 a calendar item that we could vote on and move on but maybe that's something yeah yeah um sorry when i asked for number nine this specific excavation was the one that i was um looking to ask questions about so i i well anyway my uh agenda says this is number nine whatever uh i do have a few questions on this particular one um look and actually i would like to reiterate sonia's point that uh the background materials you all provide us on these contracts is super helpful you answer most of the questions uh thoroughly and it's it's they're consistently well done so thank you to staff on that front this one um i had a question just because looking at the contracts that we've had over the

9:13 last couple of years with pacific excavation um there are all of them have gone over budget which i think with projects of this complexity and given the current economic condition we're in perhaps that's not uncommon but i'd love to hear staffs thought about that are we seeing this consistently where excavation projects and large projects like this are just consistently over the budget that we're expecting are there any tools at our disposal to head against that kind of cost overrun and is our budget prepared to continue to deal with this um with all the projects that we have uh going forward i don't know how long this kind of economic situation is going to continue

9:58 but it's certainly a little unsettling for me anyway sorry a bunch of questions there so let me jump in i'll try to answer just a couple of them and if i miss someone some of them um anyone else can jump in here either karen if wally's here he can maybe jump in a little bit there too so um do we have tools in place to kind of watch for this yes we do you know have provisions within our contract that limit what the increases can be and there's like a process for allowing those increases uh and we do work with the contractors if there is going to be an amendment or a change order in this case for a construction project um as far as pacific excavation i know that they have

10:43 gone over if you're looking at the table that was provided there that a lot of the project had gone over a lot of the time that that's not painting the entire picture it's not necessarily that they were reckless in their construction and all of a sudden they've just increased dramatically in scope it's a lot of time that may be at staff direction there may be additional work that's identified that needs to be done now that the ground is open there's things that are exposed there can be concealed damages or concealed conditions i think one of the examples that we have here is willa gillespie the water main project and we took that opportunity to add the onyx street work to that and and so doing it may have increased the project total but it saved a lot of money because we didn't have to do

11:28 another process and then mobilize another contractor to bring them out so we saved some time and money and effort by doing that so um are we seeing crossover runs like that in uh from other contractors as well in this time construction i will just say this as all of you are aware we're in like very difficult times across the whole world right now so construction in general i don't think we're seeing as many i don't think you see it as as much in construction as you would if this was like a goods contract if you're buying just like a specific item items are costing a lot more than they were so the the cost of raw materials is really apparent when you're buying

12:14 just goods um obviously they're using goods for this so the prices are escalating in those types of contracts as well but i don't think it's translating to like massive cost overruns for construction no it definitely has gone up but nothing significantly like dramatic as opposed to like what we're trying to do with the warehouse by maintaining our existing pricing all right great thanks quinn thank you sonia i'm curious on the topic of that if it would be possible to put another little column at the end there it has prior contact contract activities it has like coding you know eweb directed that's why we have the cost

12:59 server running it was an opportunity you know or something like that so it gives us a little bit of a sense of well this was e-web driven versus this was you know supply chain just and if that's too much you know from a staff perspective it's just it would be helpful to know is this something that's on the contractor that would give us a red flag versus something that makes complete sense because this does take a little bit of a picture there of you know constant overruns some of it's explainable and you know maybe others are not maybe what it was a poorly managed project i'm not saying that this one was but and they just kept coming back because they weren't doing this and that and the other thing and that would indicate to us later if you know sure for someone on the board who sees these once a month i'm not in the you know mix of all these

13:45 contracts all the time and we're trying to make sure that we make good decisions on behalf of e-web repairs and sometimes it's hard to know if i mean i do trust that you have staff to go through a thorough process but we also have to do our own verification but we still have to get that information from staff in order to make that um determine the option yeah and what you're saying makes total sense i understand what you're saying um so we will take a look at this obviously we're always trying to improve these consent items it seems like every every month we're making one other small little change to to improve them so i will work with staff and see if there's something that we could do that maybe elaborate a little bit more on that i'm not sure exactly how we could do it they've already they've gotten fairly large at this point but what you're saying makes a lot of sense yes you need to understand

14:32 the whole picture well you know it just preserves the history of it too so when we look you know in the future what happened anyway okay well thank you very much i appreciate it i appreciate the conversation here so you need to have what you need i do and i'm willing to make a motion to approve and can i can i approve eight and nine if you're drawing it i'm more than happy to do that okay move to approve uh eight and items number eight nine have been true now resolution excuse me uh number 10 uh revolution is 2209 2210 and 2211.

15:18 all right um so this is on the leeburn canal properties i would like to we'll have a quick conversation uh about them i'm not particularly happy with the process that went through and i want to see how others feel about it and potentially recommend that we don't approve some portion of them or maybe one of them i've my uh my leaning would be to not approve the last one that didn't have a marketable it wasn't actually fully marketed it seems like maybe it was just jumped in there but 22-11 22-11 yes tentative resolution number 2211.

16:04 other people want to chime in on john b yeah just to give context to some of the people who may be watching uh these are a couple of properties along the lieber canal that will help us in remedying some of the issues that we're having with seepages and and ongoing problems we're going to have going forward two of the properties we've entered into a agreement with and i believe that that was our appropriate the third one we have some questions about and whether or not we're ready to move forward with it so i for me i think i would move forward with resolution number two nine and 2210

16:54 subsequently and put a hold on resolution two two one one for further x and then another morning another discussion um my mindy i want to hear from you if you have an opinion on this um i am in agreement with commissioner borrowski and then also i would just recommend that going forward um there's a new policy on how to make these decisions and that the board is informed or at least um privy to what that what that would look like future so we have a little bit of knowledge about how these decisions are made up yeah i mean i'd like to see appraisals done before

17:39 in the future i just want to put that on record and i want to make sure that our rates are horrible and i'd like to say appraisals if that's part of the process general manager awesome yeah i would um support um request of the board to evaluate the processes that we use for the acquisition or divestiture of real estate real property and i can work with staff as a follow-up to this meeting on that request thank you um matt you have anything you want to say about this all right john you want to make a motion about uh uh moving forward 2209 and 2210 do you want them separately or can we

18:24 combine them well it's all one resolution all one so i would just move each resolution move to adopt resolution 2209. and move to adopt resolution 2209 and the second okay is there a second for 0.209

19:12 table that resolution to a paid certain or what would be the process that the staff would effectively tabling it at this point does not approve it so either way and the board just satisfied now what i would do commissioner borowski is i would put a motion forth to pass 2211. and if the board should decide that they don't want to that's the board's decision we can bring back that property under a different process or in essence tables it for a later um

19:57 uh with that i will that way it makes it definitive just for the process of discussion i will move to approve resolution two two one one if not i'll call the vote all those in favor for moving forward resolution 22 11 say hi and raise your hand all those opposed raise your hand and say aye aye opposed unanimously resolution 2211 does not pass thank you that's enough for the consent council thank you very much let me move on next statements deborah hart really gets a moment

20:43 i hope i didn't butcher your last name julia you're great great destiny it's perfect um thank you for having me virtually tonight and i appreciate uh the time with the board i will uh am able to answer any questions that you might have during the course of this presentation um as well as uh if you do want to stop me or at the end i'll have time for questions as well so i am here tonight to present the 2021 audit results for eweb next slide please here we go what i want to talk to you real quickly about tonight is the engagement team what we did in our nature of our services that we provided to eweb this year some of our significant audit areas uh what our audit opinions and reports look like and some required communications that we need to have with

21:28 you as both charged with governance next slide please so these uh these pictures i've tried for years to get them to take pictures of these slide decks but they seem to like them a lot uh but this is your primary field team one thing i did want to point out on this is uh two things in fact i don't know how that got i'm glad keith is not here tonight um but keith is kissimovic is now a partner with our firm he just made it on january 1st and i completely missed that i actually did that slide deck so that is my fault um but one thing i wanted to point out was lori tish's role so our concurring reviewer role is a really important one within our firm and within our profession lori is uh responsible for reviewing all of our planning she reviews our audit areas our significance uh audit areas and then she also comes

22:14 at the end and makes sure that we engage as we plan to engage she will look at the entirety of the financial statements and every opinion that we put out and we cannot clear the audit without laurie's approval so i think it's a very important pier and we did change lori out lori has only been on the audit a couple of years so just wanted to note that as well next slide please i'm not going to read everything on the slide i promise but one of the things that we want to talk to you about is is what we did provide uh so as we have in the past uh we were able to report on the uh on the visit the financial statements um we also uh completed what's called the governmental auditing standards report the reason that we had that this year was because you did uh trigger into

23:00 the uniform grant guidance audit because your fema funds that were received from your last storm um so that audit was completed as well um and you'll see that number five i'm kind of skipping down instead of across number five is the the audit of compliance over your the uniform grant guidance for those fema funds uh we also help a little bit with the uh review of the financial statements however management does in your accounting department does produce the entire draft of those financial statements so it is produced by them because you are a municipal entity within the state of oregon you are required to follow the oregon municipal standards so that is a report and draft in the very back of your financial statements which is approximately 13 compliance requirements that we have to look at

23:45 over and above both our our general auditing in our governmental auditing and then tonight we're reporting out to you to those charged with governance next slide please so i want to point out in this slide that these are just a few of our significant audit areas these are all very very important but i don't want you to think that these are the only areas that we put significance into into but when we look through the audit and we look through risk and where ewib is at these are some areas that we consistently want to take a look at so work orders for sure your plant process is massive and you have a lot of control systems that are moving in and out of that plant process so making sure that we understand where all the funds are going through to how they're being classified reported on a general ledger

24:32 is incredibly important increasingly as a part of these audits your i2 oh sorry your i.t security and access uh incredibly important so so looking not only at the paper documents that you have but what's happening within your ip system how do people manage and get around those ip systems continues to take up even a more significant portion of our audit in fact we bring out an it only team that knows that eweb systems that comes out and completes that audit along with the financial team as well we just talked about the single audit uh we go back and forth single audit and uniform grants guidance audit are synonymous just an fyi it used to be called the single audit but that moved over a couple of years ago

25:17 we also want to make sure you know with all the moving pieces of covid and even the supply chain disruptions we just want to make sure that there's a consistent application of internal control throughout the entire year because these internal controls are incredibly important within the the utility and then finally we need to look at if there's any concerns over any um compliance with federal laws and regulations and organ minimum standards next slide so i'm pleased to report to you tonight um that we did provide an unmodified opinion on the financial statements if you happen to have had a chance to read the um the monumental document the massive document that is your financial statements you will notice if you try to compare the audit opinion to last year

26:03 it was considerably different so the aicpa made some significant changes to the form and makeup of the audit opinion it didn't change how we audit it just changes how that communication comes out in the form of the audit opinion so if you have any questions on that i'd be glad to answer any of those i'm also pleased to report that we had no findings or non-compliance with any laws or regulations in our government auditing standards report no findings with the oregon minimum standards report and we spent quite a bit of time on on that compliance finding and then your uniform grant guidance uh the fema project no question costs and no compliance findings without that within that fema program

26:49 next slide please so some other required communications that we need to make and again this is also in the letter charged those with governance if you want to read in further detail but a couple of things is just what our our responsibility our responsibility is is under auditing standards is to complete the audit it's managed to responsibly make any decisions upon the the business and so it's a very separate what we're required to do versus what's management's obligation in note 2 to your financial statements you'll find these significant accounting policies these are really important because they set the rules and the construct to your financial statements if one of those significantly changes the numbers will significantly change and so it's important to note if there's any changes we've been in a period of

27:34 the last couple of years due to covid where gasby the government accounting standards board has pushed off some of the bigger standards that we were supposed to implement because they didn't want any governments or anybody really worrying about those type of standards they wanted everybody fattening down and dealing with with the covet around us unfortunately that is that is ending so we have some big ones coming up in the next couple of years but for this year your accounting policies do not change they're comparable you've got apples to apples and from the prior year we do know that you do have management judgment and accounting estimates within your financial statements one of your largest ones is for example your your gas 368 or your pension liability that liability is an estimate made on an estimate made on 17 other estimates and

28:19 20 other estimates before that but what we look at is we want to see whether or not management has any bias introduced within the estimate making and whether the estimate makes sense in the industry and are consistently followed we believe that that they are absolutely in line with industry standards and we saw no evidence of bias during the course of our audit please also report that we found no audit adjustments or past audit adjustments as a result of the audit this really gets to just the level of due care that your accounting team and management really look at the audit we have a lot of clients that tend to use the audit as a crutch um so we come in and i actually just had a conversation with one this morning that we found about 25

29:05 adjustments uh during the course of the audit uh that's because things weren't closed things weren't completely done that is not what happens at eweb management and accounting department does an incredible job of reviewing through everything and giving us completed information for which we start our audit process on we need to let you know if we know of any management consultation with other accountants that gets back to the old days of opinion shopping we know none of that we had no disagreements with management and no difficulties and perform the audit we and your accounting team spend a lot of time in the planning stage to make sure that we can get through this this audit in a very timely fashion and in fact it's one of our quicker turnarounds we legally just two weeks later we're issued and that takes a

29:50 great deal of one integrity to planning and just a great deal of working together in communication for both the audit team and uh accounting and management so we really appreciate the the how important that we know the audit process is to your teams slide please so again this is the end of the presentation and i'll be glad to answer any questions but a huge thank you for everybody because um we will say that you're one of the first utilities in the state of oregon that does get their financials uh out the door uh we appreciate the hard work that gets into that you can see the document if you have a chance to look at it is an intense document and it's only getting more intense with time and we just really appreciate all the uh the level of care and the level

30:35 of communication and just working with us to allow us to get this audit completed in a timely fashion so i'm around for any questions should you have them okay well thank you very much julie i really appreciate that presentation do staff have any anything else they want to say or you want to hear from us well i do want to hear from you but i just want to make sure that before we close this out and good to see faces in person again that i also thanked the e-web larger population of staff because it was hard work across the organization that brought us these results okay thank you very much all up in thecube if anybody has questions or

31:20 comments i know john b loves his stuff he just needs up budgets and things and so i i do have a couple comments um so first off question to julie um if i'm going through a 144 page report that you that you provided to us as a policy maker and a governance person what section should i be picking out of this as the most important thing to read oh you know i really wish that you were a year ago i had that question from you and i could put you in line with gatsby because they're asking that same question or they were about a year ago um so that's a great so if if i were to take a look at it from a policy perspective i would first look at one

32:05 the audit opinion because you want to know that that's unmodified because if it's modified anyway what's going on um two i would oh can you hear me oh there we go okay good sorry it went silent in my air scare me um two i would actually you and i wouldn't say this for every government um but your management discussion analysis is done very well so i think that that management discussion will give you a broader sense of of what's going on with the um with the wiki web um so that would be the second thing i read and then i'd go all the way to the back and look at your commitments and contingencies note that's the most risk that you have in the organization it's unfortunate that's the very last note it's required by gasby that we put it all away in the back but i never read financial statements if

32:52 i'm reading through them i never read them from beginning to end because they're not in the in the level of this so again um i start without opinion go to that md a if you have uh a good solid management the governments are pretty all over the board on their how well they do their management discussion analysis um and then go to your commitments and commit contingencies so a couple other things that jumped out at me um one i was really pleased with the with the pension the way the pensions performed over the last two years and the fact that we're not having to make a contribution this year that was that was eye-opening because that usually isn't the case with public employee pension contributions

33:37 and then the second thing is and deborah you may have to remind me this may have been a different audit but it seemed to me that last year there were things that were brought up that were items of concerns like not closing having things that weren't closed in a timely manner is this the same audit that would have showed that and were those all taken care of this is the same audit that would have shown that and uh and this year they found a work order uh close out issues and that was um in part what in large part what i'm thinking the staff utility for working so hard on so yes this is where this is where those showed up last year and it's where you would look for those okay well that's that's great congratulations to staff on that because

34:24 that's what i was looking through is like everything said yeah comply comply complied and then i recalled it an audit last year that said well complied compliant you need to work on this so congratulations on being able to work on that and and getting that resolved so thank you for the presentation other questions or comments matt i would just say thanks to the audit team uh for doing the work and providing us the confidence that our team is doing the work accurately and then thanks to our team for giving us the confidence by doing this work so thoroughly and carefully and accurately so much appreciation all around make it look easy and i know it's not another thanks mindy any questions or comments

35:09 nope not from me thank you i have a quick question if i may um uh maybe for julie or whomever but uh when we instituted wham and we had some problems with that it came up on the audit and but i didn't see anything in there at this time does that mean we've got it working the inventory system and when we do that is that all okay yes okay good thank you very much that's i mean it's it's wonderful to see that we don't see anything and so uh i guess no news is the best tips that's what we like all right i know that we want some glitches coming in with that new that new program we spent a lot of money on it and i'm about to see it's working and it's working as envisioned and planned so uh thank you frank

35:54 yeah i just i just want to know deborah thanked staff at large i i wanted to specifically think because it has come up in in past management recommendation letters the importance and i think julie touched on it is the importance of the is team and how we use our computer systems and how we institute controls within that system that has come up for a number of years and you'll notice again it was not on the management letter this time and so as we enter into upgrades and modernization of our systems that's the basis of which we're starting from now so really pleased with the is group and our partners around the utility have

36:39 been open and they've been asking how they can improve on these comments frank's point very much appreciated ris partners as well as all the folks who worked on the workforce without yeah one more comment just um the other thing that that a clean audit like this goes to show is when we go to moody's and we go to our other bond rating agencies having a clean audit like this can save us millions of dollars if you know if we go from an a to an a minus or a a minus minus that can be a huge financial uh impact on us so having a clean report like this is really important to the long-term

37:25 stability of of the utilities so thank you again for doing that and i'll just maybe close it up by saying only downside and i don't want to be down or i've already done that [Music] aren't we this is this is actually i've been through like 14 of these this is probably the best one i've seen so congratulations to everybody involved staff and everybody so thank you very much good job thank you and thank you julie i'm waving at you behind me on the screen nice to see you all right you didn't have to drive down from seattle this time did you that's good

38:11 i have to say i'm very appreciative because i'm actually um in the on the east coast i'm i'm visiting my son he's a freshman at purdue university so i'm able to be with him this week which is just a joy so most the time he is thank you very much if that's it then thank you very i don't much produce on the east coast though is it not quite bad she's good with math but not geography my time zone it's on the eastern time zone how's that my my mom went to purdue and i know it was on the eastern seaboard okay agenda item number eight quarters of the rfp process and document

39:00 commissioners we're here before you tonight to seek your approval of the rfp package that we proposed to you to sell eweb server front property the project team has been applying the guidance received from all of you over the last several months to put together a process that outlines the roles and responsibilities of all parties involved acceptable property acquisition options evaluation criteria and scoring as well as steps the board may use to select the proposal that's in the best interests of our customer owners and the community once the property is sold you will use that money in the best interest of our customer owners to make wise investments to control

39:46 costs and rates or we'll then make a decision to decide the highest and best use of cash taking into consideration our strategic plans financial policies and the current financial condition at the time that takes place so the rfp contains questions that aim to get information from proposals and holders to help you make the best decision the criteria and associated points are meant to reflect your goals and priorities for selling the property your board packets contain this detailed information in brief you'll see that criteria displayed on the slide economic benefit to customer owners is

40:31 the sales price economic benefit to the community includes both quantitative and qualitative attributes such as getting the buildings back on the tax rolls and the potential for job creation and tourism future intended use community benefit addresses the legacy outcome of your decision conditions and contingencies could include the proposers except exceptions to the sample purchase and sale agreement some qualifying things that might have have to happen before they can close the deal and things of that nature and it's also a place where we can get some follow-through assurance to make sure that the property's outcome is as

41:16 presented and this could be in the form of deed restriction or something of that nature and then lastly the triangle lot impact to future intended use has no points associated with it as it's only informational and meant to help the board with their future decision around whether to sell the triangle lot separately so tonight because we are doing an rfe process we've scheduled a public hearing to give customers and community members the opportunity to comment on the process we've laid out before the board deliberates and potentially takes action so at this time i'll turn it back over to president brown in case any

42:01 commissioners wish to make a statement and to open the public hearing okay i'll open the public carrier for the rfp process for the web headquarters property is there anybody signed up commissioners to see if there's comments about the rfp process uh yeah i just want to thank you uh and the staff and the team that helped develop this that would be mr brown and commissioner carlson were the commissioners that sat on the working group i think we came up with a

42:50 rfp that will help us inform when we have to make this this big decision and so i'm really hoping that we'll get a robust uh group of people that will submit rfps so that we have a hard time finding finding the right one because they're all going to be great projects that's what i really really hoping for i hope we're not stuck with just one or two and have to make that type of choice and if that is the case i even want to resubmit the rfp again if we don't get qualified and projects that rise to the need for the use of that

43:35 prime piece of real estate so thank you for your hard work other comments questions well i'm supportive of it we obviously had a big problem putting it together but i really wanted to thank her trying to hurt us together and have you know keeping us on task every week with different topics that he guided us through so thank you for all the work you did and for all the other staff involved and you know adding comments and it was it was a really thorough process week after week we had a number of meetings through it and i'm proud of what we did and i'm i'm looking forward to seeing how it how it plays out the purpose of the pudding right so um

44:22 thanks everyone i'd like to reiterate that that uh support your staff i mean we were purchasing real estate and everybody involved i mean it was squeezing the balloon we'd go one way and then something that's a purchasing law a contracting law and everything else and everybody kept us online and did a great job of herding cats and you know getting everybody together once a week we and we did it so we didn't do it you did it and so thank you very much to that i do have one question from frank and that's we were going to uh kind of along your line john um you know what's the point that we don't accept any i don't know what that point is if it's if the highest bid is six million dollars do we say is that acceptable or the highest bid is you know i mean i still want that someplace in this

45:07 process personally i mean not just it's five of us that have to vote but i don't know what that threshold is or what the basis for that threshold would be not only just the range of use and users but the process so yes president brown it is baked into the process between uh after when the rfp goes out we will have meetings with staff and the board liaisons to develop some specific instructions around the evaluation process of which the board can have discussions that would establish certain minimum thresholds so that is in the process i believe that there is even a meeting scheduled for that and

45:52 andy can correct me but i believe it was june or july where that can be discussed specifically with the board and executive session and she may actually have a slide coming up on that now that i think of it okay any other questions or comments okay the next uh you know this is a this is an action item uh is to the approve the rfp process and document approval so i will entertain a function removed by carlson second by mccray any other discussion john i the only other discussion that i would have is the we talked about the communication uh process to get the word out to that is that baked and fully vetted and do we think

46:39 that we're gonna give it all to all the people who want to see it or is that something that we're still working on we do have some things in motion already i've been speaking to a number of people who've already expressed early interest this goes back to last summer when we did the survey of interest and a few others have popped on board since we've started doing press releases and a few news media picked up the story and i've been contacted by others since then i sent them all an update just yesterday to let them know that you all would be considering this decision this evening and so i'll keep updating them and we will be posting this on ewebs website oregonbuys and in newspapers of record

47:25 the registered guard in the weekly for certain and i believe the daily journal commerce and we'll probably do another press release as well and news stories on ewoof.org and we'll even have a little infomercial in our upcoming customer benchmark survey we're we're open to any and all suggestions if there's other just so just for to make it clearly the oregon buys that's the thing that goes out to like if we want to do a contract for building a water facility or whatever that goes out to everybody in the state type of a deal is that right that's a website that purchasing uses i think raymie or quentin can probably speak a little bit more because they use it regularly

48:10 well that that's okay just as long as it's being broadly distributed that's what i'm hoping for thank you any other questions or comments okay we've got a motion and a second all those in favor signify by saying hi hi hi passes unanimously thank you very much the next agenda item is the second public input of opportunity for in person i don't see anybody here that wants to take advantage of that so and we'll just move right through that and so i'll just have a process check with everybody although we have a meeting scheduled till 10 o'clock tonight we are about an hour and 20 minutes ahead of schedule so what we are the next gen item is you guys want to take a 10 minute break and come back and do irp and uh

48:57 the general management performance or um only break okay i gotta provoke for break we're gonna adjourn ten minutes

58:05 okay i'm going to reconvene the april 5th 2022 meeting at eugene modern electric board the next agenda item is the uh number five irp planning uh megan good evening commissioners so i'm megan kapper energy resources manager and i'm here with ben ulrich senior energy resource analyst before we get started i'm going i wanted to share with you that we have key new employees in power planning you'll recall we had a couple key members of our analytical team who um unexpectedly retired last year so we now have an aaron bush energy analyst who comes from the pacific uh the public power council and john kreider who is senior analyst i'm going to be a core modeler who comes to us from the oregon public utility commission so uh we're just really fortunate and wanted

58:50 to just announce that we do have a full team and we're really excited to move ahead tonight is our first of several board informational meetings preparing us to meet our organizational goal number five which is delivering of a public draft integrated resource plan or irp by this december in february in the february board meeting we walked through the irp roadmap and agreed on guiding principles well we talked about the integrated resource plan as a technical study and an action plan and we learned that there are four primary elements to the study first is customer load characteristics that we have resource characteristics portfolio alternatives and then development of an action plan as you can

59:37 see under april tonight we're going to explore customer load characteristics eweb has an obligation to serve our customers electricity needs 24 7 365 days of the year now and in the future and our irp is helping us to plan for that future tonight we're going to look at the key drivers of electricity consumption and how they impact our customers electricity uses as they change by season month day and even hour providing us with insight to how we plan for the future at the end of the presentation uh you'll have an opportunity to ask questions and comment so i'm going to hand it over to them so tonight we're here to talk about how much are you electricity or how much

1:00:23 electricity our e-web customers use and the forecast for the future throughout this presentation i'm going to be using terms like demand or load somewhat interchangeably but they all are talking about the same thing there's electricity consumptions of all of our electricity consumption of all of our customers we're talking about consumption as part of the irp because we need to have a solid understanding of eweb's load in order to make decisions about the best mix of resources for our future power planning we use two different types of metrics to illustrate electricity consumption over time average load both are useful but in different ways annual average load is helpful for providing a sense of scale of electricity consumption and long-term trends but an average can hide the variability

1:01:09 from hour to hour day to day and year to year peak load on the other hand is the highest amount of electricity consumption for a particular period of time and by looking at the maximum value we can see what uh's electricity needs are during the more extreme but less frequent events so tonight we're going to be talking about average load and peak load how much load that how much that load can vary throughout the year in august we'll be coming back to the board to talk about resource options which can be used to meet these electricity needs we have different ways of measuring a resource's ability to meet our needs capacity needs refers to our need to serve peak loads serve peak loads and certain resources are best suited to meet those capacity needs energy needs refers to our need to serve

1:01:55 load over time with reflectively by the day and the hour and the season our future portfolio will be a mix of resources that can serve both our energy needs and our capacity needs when we talk about these resources we need to understand the historic and future consumption of electricity this chart shows a lot of things about average load and peak load over the course of the year but it's kind of busy we're going to get oriented first this chart shows daily averages minimums and maximums over the course of a year based on 11 years of historical data the black line in the middle shows daily averages the blue shaded area around the black line represents two standard deviations above and below the average

1:02:40 as a refresher to your most recent statistics class that means that 95 of historical load falls within two standard deviations of the average meaning that ninety-five percent of our historical load actually falls in that blue shaded area around the average line the gray dots at the top show the maximum historical loads on those days the orange dots at the bottom show the minimum historical loads on the day on those days right away that you can see that the very the variation in our loads that i'm talking about and how looking at an overall annual average of 275 megawatts doesn't necessarily tell the whole story you can also see that our winter loads are typically higher than average and that our summer the loads are typically lower than average the key takeaway for

1:03:26 the irp is that it's not enough for eweb to just buy enough resources to meet our annual average loads we often say you can't fly through the mountains at an average altitude hours show a similar seasonality with our winter peaks being roughly 100 megawatts higher than our summer peaks historical data on this chart includes some typical peaks which are around 465 megawatts which we would call our one and two peaks we say one and two we mean that that load is estimated to occur once in every two years or fifty percent of the time you'll also see some very high peaks above 500 megawatts which are circled here these are examples of one hour peaks expected to occur in every 10 to 25 years

1:04:12 while our planning metrics forecast so while our planning metrics forecast that eweb has an annual average load of about 275 megawatts and a peak of 465 it's important to know that our actual consumption throughout the year varies and that 95 of the time our load is somewhere between 200 and 400 megawatts which is in this gray shaded area as you can see in the chart we're pretty much always consuming at least 200 megawatts of electricity which would be considered eweb's base load we also as we plan for electricity needs that are greater than 400 megawatts we're planning for energy needs that are a lot less frequent as we consider resources needs in the irp we're going to be thinking to find specific resources that may be better suited to ser to serve those particular

1:04:58 peak needs the previous chart showed seasonal variation and load but this is the chart shows the variation that we can experience in just a single day start starts at 1 a.m on the x-axis and it goes until midnight and it shows you the changing load throughout a 24-hour period you'll see a 1-10 summer peak day in yellow one in ten peak day in blue that's a winter peak excuse me an early takeaway is that our winter peak load is consistently higher than our summer load and it illustrates the e-web is currently a winter peaking a summer peak is only about eighty percent of our winter peak you'll note that the shapes are different winter and summer daily peaks happen at different hours of the day

1:05:44 winter has two distinct bumps the first bump being in the morning when you turn on your heaters and your lights and it maxes out around 8am electricity use then drops in the middle of the day as the sun warms up in the winter and around 4pm that load starts to increase again as people come home they start to cook dinner they watch tv and they turn up their thermostats again the summer is different air conditioning load just steadily increases throughout the day as it gets hotter outside peaking in the late afternoon around 3 pm while there are other factors like days of the week or holidays and affect our load shapes ultimately the weather is what causes our greatest variation in our loads as the key driver of our system peaks

1:06:29 this chart is a scatter plot showing temperature on the x-axis and historical system loads as temperature changes each gray dot represents one hour of time between 2017 and 2020. you look at the upper left area of the chart you can see that eweb's highest loads are above 500 megawatts and that happens when the temperature is below 20 degrees the yellow trend line shows the correlation between temperature and system load green dots are each one hour of that june 2021 heat dome event that we had green line is the trend line for that particular heat dump event you can see that even during that extreme heat our winter peak loads were still much higher we treat 65 degrees fahrenheit as a comfort time temperature which is

1:07:14 illustrated with this black line see that most of the data is skewed to the left showing that temperature is more often lower than 65 degrees than it is above 65 degrees makes a lot of sense given our climate this deviation from the comfort comfort temperature can be quantified in a metric called heating degree days it quantifies the how much lower the daily average temperature was compared to 65 degrees 80 degree days and cooling degree days can be useful in energy planning because we can use it to estimate electricity use even if you could predict the weather though there's still a range of possible outcomes due to other factors like day of the week or industrial loads you can imagine that means staff are constantly doing our best to predict the future recognizing that variation from our

1:07:59 estimates can happen within the year or the month or the hour we do our best to plan for the future long-term trends we also need to recognize that there's variability a great example of this is actually our budgeting process it makes best efforts to predict future energy use next year recognizes that our annual results may vary from our budgeted assumptions i'm going to warn you this is a pretty busy chart this next slide is an example of budget monitoring and when we see temperature deviating from these challenges this is actually a chart that's prepared by our friend our friends in finance they compile daily system load data for the month of february this year what they're looking at is how our load

1:08:44 deviated from the budgeted assumptions this is a complex chart so i'm just highlighting some key data points here at the bottom top one of the variables in the chart is a comparison between the budgeted heating degree days and the actuals and you can see that it's a positive number indicating that there was more heating degree days that was budgeted and then of course we have this system peak in the month of february a low temperature of 21 degrees outside and so we had a peak on that day of 483 megawatts on february 23rd so our temperature to load comparison chart on the previous slide can help us estimate estimate load based on temperature it still remains an imperfect science but there's there's a lot of moving

1:09:29 pieces to this and staff is constantly working to monitor these key drivers in the years ahead as we learn more about our customers energy use through advanced metering data we may be able to help improve the precision of our forecasting now that we've talked about historical electricity consumption and the variability we want to discuss how eweb does load forecasting um currently uses an econometric model the model considers certain key variables that help us predict future energy consumption for example we know that energy use correlates with population growth so by adding a population forecast to our forecasting tool we can better estimate electricity consumption the same process for unemployment data as well as heating and cooling degree days

1:10:14 the current load forecast assumes that our population is going to grow at a little less than one percent per year which is in line with historical trends and for unemployment we're assuming that we're going to see lower unemployment in the next five years as the economy recovers from the pandemic before returning to a historical median of 6.6 unemployment the model also uses the most recent 30 years of historical degree of most recent 30 years of heating degree data to come up with the forecast the most recent 10 years of cooling degree data to do a cooling degree in forecast we believe that using more recent historical data better incorporates the impacts of climate change into our forecasting process

1:10:59 in addition to the econometro econometric data our load forecast also considers other variables some are discrete inputs like a large industrial customer closing or opening these large customers are sometimes called new large single loads there are also emergent trends like electrification based on the results of our most recent electrification study you have is forecasting electrification will cause a gradual increase in our electricity consumption over time conservation has the opposite effect of electrification programs that promote energy conservation can be used to decrease our system load over time the previous irp in 2011 actually identified conservation as the most cost effective way to manage our loads

1:11:44 looking at the historical annual app excuse me sorry since 2011 e-web has used conservation to manage our load growth but we aren't assuming conservation will be always be the best way to serve our load growth for this irp in 2022 we'll be going to treat conservation as a resource that can be used to meet our needs just like wind and solar we plan to discuss the assumptions about conservation as a resource with the board in august so that brings us to our 20-year forecast for the irp this chart shows the trend in annual average megawatts through 2042 and as i said population growth is a contributing factor the larger contributing factor is electrification looking at the historic annual averages in black you can see that large decline around 2008 to the closure of the

1:12:30 heineken summit conduct semiconductor plant with our forecasted load growth annual elect energy use is not expected to surpass our historic levels until 2035. given the amount of uncertainty though in predicting our load or even the potential for load loss we plan to do some sensitivity analysis to consider how our irp might be impacted by this load forecasting uncertainty this next slide slide is the peak forecast through 2042 note that the numbers on the y-axis now go much higher because we're talking about maximum system load eweb is only expected to experience these peaks one hour out of the entire year and most of the time our load is actually within two standard deviations of the average which is shown here as a

1:13:15 black line for contacts we've shown the typical one and two system peaks in blue we've also added the less frequent 1 in 10 system peaks in orange peaks on this chart were calculated without the effects of conservation or other demand side management programs like incentives for customers to charge their evs during off-peak times just like the average forecast you can see that the typical peak load is not expected to surpass historic levels until 2035. while peak events can happen infrequently they're still important for power planning as we think about uncertainty we think that it's best practice to plan our energy supply around one and two system peaks so that we can avoid routinely relying on market purchases to serve our energy needs relying on the

1:14:00 market can expose eweb to resource adequacy risk and market pricing risks however procuring large amounts of energy far ahead of time to meet these infrequent peaks can be not always be cost effective as we continue our irp modeling work we plan to analyze the impacts of our peak planning standards and how our resource portfolio may meet our peak and average electricity needs so why do our customers electricity loads matter for the irp our customers electricity and demand is ultimately what drives our need for resources but that we know that's a moving target electricity use varies by the hour and season which is caused by both customer behavior and weather from a planning perspective we know that

1:14:45 our annual average load is 275 megawatts and our typical peak hour is 465 but that only tells part of the story the variability that we see in our load will inform the mix of resources that are that will best fit uweb's needs some resources will be used to meet our infrequent system peaks while some will be used to meet our energy needs across seasons some resources are dispatchable and can respond to changes in customer demand and some resources will be dispatched by mother nature as we look to the future we're anticipating that our electricity needs will grow over time and population growth is contributing to this and electric and electrification is also a bigger driver we know that the load forecasting has an inherent inherent uncertainty about the

1:15:31 future we plan to consider this in our irp modeling by doing some sensitivity analysis where we consider a possible decline in our loads as well as other variations from our forecast we hope that the deeper dive into a customer load is helpful for the board and gives more insight into our load forecasting process there are many parts of the irp modeling work but understanding our customers needs is key before we begin discussing the resources that can best fit those needs as you can see there are a lot of moving pieces it's complex work and our customers are looking to us to meet their energy needs today and into the future the rfp process asked us to think about the key drivers of our load and to consider how these drivers like population climate change

1:16:17 unemployment electrification will change over time to meet that load this is our high level timeline to engage the board on key irp topics our next informational meeting is august where we'll talk about resource characteristics but between now and then we're going to be setting up small group discussions as we heard [Music] we look forward to those discussions and we'll uh open it up to harmony questions well thank you very much megan and ben um that you know i've got through a lot of reasons and again that was one of the most understandable explanations i've had in a zillion years so thank you for me it was very educational and i'm very appreciative of that because many times

1:17:02 that stuff goes right over my head thank you so you you got the dummy uh on the team so good so i'll open up the queue and uh and see if anybody other has a question or not i have one small question if i can go ahead and start yeah right what price assumption uh money price assumption did you use in your forecasting i mean as the price of electricity goes up a lot of people don't use as much so what assumption on prices that you use in projecting that demand out to the future i've got an answer to that um so in our irp we kind of just look at look at demand without interfering with any sort of new pricing regime or anything like that we're just saying what are the key drivers of demand and

1:17:47 then we can use um a potential resource to meet that demand so we did time of use pricing or things like that that could change your customer demand and and those products are called demand response programs um or there's just different ways to send people signals to change their their consumption pattern so conservation is a great example too right that's an example where we have an incentive to have people curtail their energy use or to use less electricity so this forecast is before eweb intervenes with resources or customer demand side programs that influence their behavior so you just assumed a flat consumption price and no no e-web rate increases through that projection period because i'm just saying if you know you raised the price

1:18:33 of a commodity people tend to consume less and i'm just wondering if we continue to raise the price of electricity will be less consumption you know just making sure that that's what you do i don't think we we don't include it like a discrete input like you're talking about that feedback loop of how customer pricing changes yeah i'm not you know i'm just assuming in the models you just presented that it was just a flat sole yes thank you very much others have better right questions thanks for the memo and and um yeah in the presentation the memo as john just said really laid it all out i started writing questions at the beginning and then i found as i threw it

1:19:18 up and all my questions so um thank you uh for that i also appreciate breaking down the irp into bite-sized pieces because there's a lot to consume here and this is like very well done i appreciate that very much uh i want to acknowledge that the circumstances around energy planning are like the complexity of it is just going through the roof and um i appreciate that our we're dedicating resources to making sure we're out ahead of that and the work you're doing is is super important so thank you in um i would be interested in seeing uh more of the results from the electrification study included into these charts as we look at them just so as we're thinking about ultimately

1:20:03 you know the next steps we're able to think about okay what are the effects of electrification separately or different levels of electrification when we look at the overall um projected people or projected mode over time um and things like conservation i know we're talking about that um in the next round and i also recognize you kind of have to keep simplify things so it doesn't get too complicated in a graph but you know anywhere we can include sensitivities that help remind us all of like here's some of the impacts of um you know conservation at some level cost-effective conservation if we can estimate that um i think that would be helpful i know the the um electrification study

1:20:48 showed the maximum level of electrification at being something it was fifty right fifty percent of the old news or residents is it all buildings i should know this but i don't a building is being electrified right it's residential buildings under the aggressive carbon reduction scenario which was a scenario of the study but not our base case right right no understood um right so um i think including that just again to demonstrate for us what does that look like in comparison to our just um assumed increase over time what would we expect that higher level scenario to look like uh i also think it'd be super valuable and i think i mentioned this when we were looking at the electrification study earlier um to see an even more

1:21:35 aggressive scenario just to have a sense of like how sensitive is all of this to for example if we were hitting 50 electrification by 2035 and 100 by 2050 which uh most people who are looking at carbon emissions say something like that is necessary i'm not saying that's necessarily going to happen but it would be useful to know you know for us and for other policy making bodies that are thinking about this what would the impact be on our overall interviews again um the fact that it wasn't an electrification study may make that hard to ease out but if it's not super complicated that would be valuable um and then i have another question but i'll wait for another round okay next

1:22:27 maybe share the results i don't think you can answer it tonight um but if you did use econometric modeling i was wondering if you could share the the null hypothesis and the bubbles that sort of dad and would love to see the actual details and the variants and the art factors and all that so not tonight but if you don't mind at some point i'd love to just dig behind the curtain a little bit thanks yeah thank you um i have a question about the assumption of peak summer use and i know in the graphs that you showed um you included the super hot day that we had days that we

1:23:12 had last summer but i'm just curious like going forward if we continue to have these um heat waves over the summer is there something built in that shows like more people um installing air conditioning and that's what that would do to the to energy use instead of just assuming that um like the our energy use or or uh air conditioning level will stay steady because i'm just guessing that if it gets hotter and hotter that more people will stall air conditioning and then we'll see that peak maybe go up even more i don't know if that was something that you considered or not that's a really good question um that's a question that's being asked all

1:23:58 over the region right after particularly after the heat dome event and i think all utilities are trying to get an understanding of how that end use is is growing in their service territory and we're not we're not unique um we don't right now have a particularly great handle on that we recognize that there's a gap and it would be really beneficial to incorporate that data into our analysis and so we'll be looking at how we can do that great thank you john b yeah thank you for the presentation um you know something that jumped out to me and that i wanted we wanted to hear back in august is the

1:24:43 percentage of our customers so 90 of our customers are residential 10 are industrial but 50 of the loan is industrial and 50 is residential so for me the strategies that we're looking for in conservation and demand management are going to be very important on the industrial side if we can if we can figure out ways to get those done or it's bigger bang for the buck you know if we're if we're selling half of our power to industrial customers and we can figure out a way to say hey if you start at nine o'clock instead of seven o'clock your shift we can save you this money

1:25:30 or if you you know those types of things are things that i'm going to be looking for in the conservation side on the demand response side you know certain industries you know you can't you can't have snow temp turn off the compressors you know because because we've got a peak demand but are there other industries industrial users that we might be able to work the conservation and demand management because for me that's going to be the biggest buck if we can if we have a residential peak and we can call or incentivize a few of our large industrial customers to change their demands we may not have to buy a hundred megawatts at peak prices if we

1:26:16 can if we can get them to save that and so that's one of the things that i'll definitely be looking for in the august okay so that's it's a real it's a fabulous comment um what the irp the integrated resource plan is the modeling is going to show us it's going to first of all show us where we have gaps and resources under different you know features and so we're going to be able to see if there's going to be what types of resources and so we very well may see that there's a really good opportunity for some um energy efficiency that costs us x amount through a y amount and that is where we'll have to do that deeper dive after so i think that what you're what you're coming up with and what you're thinking is exactly where we need to go

1:27:01 the the irp is going to show us um is is energy efficiency but you know um if there's certain buckets and costs of energy efficiency that we need to go after and then we'll have to say okay where are those within our service territory and then do more research and that's kind of where i would say um when we start getting down into action items for uh between this this irp and our next irp depending on the results that's where we would start to see maybe an action item or a first staff to go out and do more of that research um yeah and then and then the other part that's going to be interesting to me is is the resources that we control right the the

1:27:47 generation resources that we control and and i'm thinking dispatchable and when i think dispatch will i think carmen right and the times that we can turn it on and off car garment to get rid of those so we don't have to buy it at the peak market and knowing how that plays into the irp you know how many megawatts is the maximum that we can get out of carmen on a super hot day that type of a deal something that maybe in these little more breakout sessions we can get down into that that type of minutia um and then at some point the the question of carbon intensity of

1:28:35 the irp that we're that we're looking at you know how carbon intensive is the portfolio that we're proposing to move forward with and and what cost you know what cost benefit that is for us if we want to you know and that's i think that's where we get into the policy decision is you know do we want to have higher prices than a less carbon intense portfolio or lower prices and one that may be more carbon intense so that's knowing when and where we can weigh in on those policy issues will be important to me

1:29:20 thank you any other questions or comments i have uh one more question really quickly thank you frank scott all right i am grateful that you're thinking about climate and how that'll uh impact future demand i appreciate you addressing that here um it sounds like our step right now is to kind of shorten the historic average in order to kind of reference some of those bigger swings and potentially changing averages um i and and i think you said that this is something that utilities are all over trying to figure out how do we look at the forecast and i just encourage them to um even if it's not perfect to take a look at what we have you know what what is available and try and see what we can say because we have some certainty about

1:30:05 the levels of change it's not i understand our climate projections don't tell you five years out here's what it's going to look like but um even just kind of directions in order of magnitude i think would be helpful for us all to just keep in mind right as we're looking at peak summer loads for example we can assume that those are going to bump up we don't know how much but i think you know shading that even in the graph just so we're thinking about that and seeing what that might look like useful thank you again for the work okay well thank you for the presentation frank that's it frank's got one comment yeah i was just gonna appreciate the fact that the board and listening to the basic discussion around consumption patterns

1:30:50 starts to actually lead into some of the follow-on questions which is around there is a difference between the past and the future for example you're touching on the fact that the past may not reflect the future and so when you're looking at load forecasts you need to be able to inject sensitivities into both the resource side and the consumption side commissioner barofsky what you're starting to talk about when you when you start talking about conservation is that there are there are different profiles of conservation and those are treated as resources just like you would have a difference between columbia gorge wind and montana wind those have different profiles so

1:31:36 conservation for certain types of industries would be would be different and you would be able to evaluate those as resources in the context of of your supply mixing with demand so these these are to come sensitivities you know once we understand the base case and the assumptions around a forecast we can then start to look at the resource mix that'll be the next discussion what a resources mix starts to look like and then you start to put them together in different portfolios and test out which ones give you the best overall results from a carbon perspective for example from a flexibility perspective or a capacity perspective as they talked about capacity so this is this is one sort of

1:32:22 spoke in the wheel and and there's definitely more to come and as you can see it it's it's going to get pretty complex but we're going to have to boil it back to where does the board start to contribute philosophies and decisions and action plans and those things i appreciate what staff put together thank you anything else for the good of the order on this topic if not thank you very much appreciate it great presentation okay the next agenda item is going to be the general manager's annual performance evaluation okay we've all had background information on this

1:33:11 and we've all discussed it executive session as you know so now is the time to uh decide whether or not uh when we want to comment first about uh financial world evaluation and what how we perceived his performance over the last 12 months anybody want to start in go first go ahead um i want to reiterate that we had a fair amount of conversation in executive session not only amongst ourselves but with frank so uh we don't weight into all of that uh in this public session but i do want to say as i've said to you frank uh i feel like this utility's been thrown so many curveballs over the last year and

1:33:56 especially last couple um and i feel like uh we're still on track you know and and doing really solid work so i just want to uh appreciate the the efforts that you put in the team that you have around you you know i recognize it's a whole team of people who make this holy utility run um anyway but your leadership clearly is is doing the trick right now um and i appreciate the work i think you've done an exemplary job i've gone through three general managers to say any one is better than the other but you're really good i know that it's uh in managing this is

1:34:41 not easy and what we see is just a small microcosm of what you do and uh and what i'm really impressed with is your ability to take ownership of stuff that we may not agree with when you you know this evening when we had a little issue you said you took ownership of it you'll change it and uh you got right after it you didn't make any excuses you just said okay that is a sign of a a really good leader in my opinion and i know how the private sector would look at it in having to work in the public sector and manage five of us and 450 others is uh an exemplary and so i i think you've done a great job uh personally and so i want to thank you for doing what you do because it reflects

1:35:27 you know we serve a commodity that people don't have a choice with and it's a commodity that it's life and death for a lot of people you can't you can't live without what we provide and watching how this organization operates both daily and in crisis during storm events and other things is you know people look to us for leadership and that's because of you and the people that that climate you've cultivated so i for one am very proud of what you've done with that another question comments sonia i appreciate how every year just gets a little bit better and a little bit better i love the attention to continuous improvement and learning from both the wings and the failures and

1:36:12 i mean it just shows in how reactive situations i'm sure it shows in how teams treat one another too it's not about personal styles and such it's about figure out the problem let's get the root cause of it let's find solutions that meet the needs of our customers and let's communicate that to internally to the staff and ex you know and externally to customers and help us so that we can help you and it's just i look forward to continuing to work with you and and really appreciate you and everybody that you know you've got kind of rowing in the same direction now i feel like you know we've got good momentum and yeah we keep hitting lots of rapids but

1:36:57 keep staying afloat and not only staying afloat but you know whizzing on through and i really appreciate all that so thank you for everything you and continue to do yeah um i think this is something i said in our executive session about this but something um to echo what sonia has said is in the short time that i've been on this board i really have noticed just a um a maturity of the organization or the way that things are run um everything just seems to keep getting better and more professional and a little bit tighter and seems like a more cohesive team

1:37:42 and you're the leader of that team so that that's on you frank so thank you so much for that and um i also do appreciate like other board members have said that when something doesn't go right or it's not something the board wants or there's some kind of error made that you are really quick to um just you don't get defensive you um offer course corrections and figure out how to fix it and i really appreciate that because i know that that can sometimes be something that's that's hard to do and then um i guess lastly is i feel that this is a really well functioning board and um part of that is your relationship with

1:38:27 us as well i think that we are all kind of a team together and um i think that i really just appreciate the guidance and leadership that you provide to the board as well so thank you for all of your hard work thank you um yeah i can i can echo all all of what's been said um we did have a frank discussion a truly a framed discussion about frank in in executive session um and it was it was very helpful um so i'm going to move this along because the second part of this conversation is whether whether or not we want to amend the compensation

1:39:12 that is is afforded the general manager um and you know in these times prices are going up things are going up and also compensation for good employees needs to go up as well in my opinion i've i've seen it in my in my business you know to hang on to good employees you've got to compensate them uh correctly i think frank has has shown that he's done a good job over the past year um and i think what i would like to propose is that we add a three percent increase to his base salary as a performance bonus compensation this is what we did last year when he

1:39:58 helped get us through the pandemic and i think that that would be an appropriate thing and i would like to put that forward that's appropriate at this time i just had a quick question do you want to do a one-time bonus or is it a permanent increase in the pay just like we did last year which was a three percent increase to his base salary isn't that what we did last year it was a three percent okay three percent increase to the regime and i think that that was an appropriate amount and kind of going with what it is okay we have a motion and a second to increase ranks based salary by three percent now discussion

1:40:44 discussion i'll speak i'll speak to the motion i'm going to support it i know it's you know you know you're absolutely right you get what you pay for and i think he's done himself great job i know that uh you know you've got to be careful what you do here and the message you send but i don't think what we're saying is out of line with what's in the market what's going on uh you know inflation's eight to ten percent so i get it i know what you can do in the private sector with the confidence skill set so i think i'm gonna support the question

1:41:29 mindy would you like to comment you don't have to we're just we've got a motion on the floor in a second yeah i don't know i don't have any pumpkins that's right matt any comment i don't tell you make it any more awkward than it already is i'm just sitting this is always a challenging thing to do but it's the law and we have to do it in public sessions so oh well yeah no comments on it okay that's fine then i'm going to call the the on the floor is increased rank lawson's base salary by three percent it'll become effective may um is there any other discussion on the motion okay all those in favor signify by say aye and raise your hand all right all right

1:42:18 thank you right well i'm really i appreciate it commissioners i i feel like part of our organizational philosophy is to ensure that our compensation for all of our employees is fair and later this year we will do a more a deeper dive into compensation across the utility to ensure that we are remaining competitive to your point commissioner borofsky i'd also point out that that i do have the pleasure of working with a really good board a very functional board a woman that cares about the community and you represent your constituents well and and the fact that i have a great staff and great teammates that i work with is really important to me

1:43:03 we across the utility you know almost to an employee we care really deeply about the products and services that we provide and we recognize the importance of it to the community and that permeates throughout the organization and so i really do feel like i'm blessed with a good team and we've been tested um some throughout the last few years but i do believe that i'd appreciate the fact that a couple commissioners noticed that we're continuing to improve and i and i think in order to do that you have to be able to recognize when you do something right you also have to be able to recognize when you make a mistake and if you go into that understanding your intention

1:43:48 then you can make corrections and you can you can own it when it doesn't work out like you want and you can make corrections and learn from that and move forward in a different way so i appreciate my senior staff leadership across utility and staff really across the utility for the continued work that they do and they they make my job enjoyable almost always we all have challenges that creep up but i do want to just thank the staff and then thank the board it really is you know it takes everyone in the utility to do what we do and so i appreciate that and the vote of confidence thank you matt you had a comment yeah one of the things we talked

1:44:34 about um is that you do 360 reviews which is fantastic and i would encourage us to continue um i would suggest uh that perhaps next year we make that or at least provide some opportunity to do that anonymously i think you'll get different feedback if you're able to get 360 feedback from your team unanimously so just encourage us to give that a shot yeah i think also one of the things we'll do this year we haven't done it in recent years is a more a little deeper dive into an employee survey some of that always touches on leadership it touches on culture and some of the things and touch on my performance as well so

1:45:20 i think that will inform inform us further even beyond the 360 type of approach thank you okay next agenda item i apologize we're way ahead of schedule sorry you won't want to be delayed for a while and take it out but um well there was there was a slew of correspondence this month commissioners and and then there was one that you know i apologize for adding it after the official board run that had to do with a commissioner's request for an update on the partnership with northwest natural and the hydrogen project in particular

1:46:06 and especially relative to their 844 filing and the support they've requested from eweb is that partnership that was what i added after the fact the the others are in in many cases are related to either strategic work going on or things that we do on an annual basis just as part of our compliance and sort of situational reporting to the board so the roster is there if you had any additional comments or questions or guidance to provide we'd be happy to either answer those take that under consideration depending on your feedback okay

1:46:51 john yeah thank you for the the reports just uh note that i did go through and read them um you know the one that that stuck out to me was the hedging and and where we're going with hedging and then we're looking only a couple years out right now and i think that that's appropriate considering where we are with the irp but also knowing knowing that there's a you know a report let us know a lot of variables are out that are out there as as far as price of natural gas and a bunch of other things that impact our hedging operations so i i appreciate the report and look forward to hearing more about

1:47:36 those in the future thank you okay um matt yeah i just want to say the uh the item on grant opportunities appreciate that background i appreciate the the effort the kind of organizing we're doing around grant grant applications and and opportunities to kind of filter those and be strategic around you know what we go after what we don't um yeah there's there are just so many opportunities right now uh with grant funding i i think uh regular updates as grants come through would um you know just in this kind of format would be uh welcome just to keep us aware of the resources that our team has put together i appreciate that we have hired somebody

1:48:22 just to do uh to focus on on grant opportunities i think that's a great so thanks for that update keegan is very busy already i would point out that i think in the case of grants and the formation of this i'll call it clearinghouse team to evaluate opportunities both opportunities on the funding side and as well as the project side that is something that we'll probably routinely put into the quarterly reports just kind of where we are with with the grant process at least in the new year term since that's that's a newly formed group because there are a lot of opportunities out there so appreciate that feedback yeah i mean you're reporting here that uh

1:49:08 deborah put this together um that you know we're the utility is receiving millions of dollars to help us do the work we're doing and in some places helping us do the things that we couldn't afford to do otherwise and in some place offsetting our expenses and helping us so it's it is significant that was correspondence what what i did want to mention that um there were a couple of changes to the board agenda report for future agendas one of the things that i wanted to note for the board is that we've added an agenda item later in the year i believe it's september to talk about

1:49:54 how we interact with customers specifically things like the lobby um and so that was added i believe in september i know there's been some customer feedback um in the meantime we'll have an opportunity to do a customer survey and that'll be part of what we ask in that customer survey is about preferred methods of interaction and lobbies and things like that so i just wanted to make note that that i know occasionally commissioners get feedback hey you guys close the lobby what's the deal you know we we will have a discussion specifically around sort of a physical presence and where that fits in the rest of how we interact with customers so i just wanted to make note of that since that's a new item thank you

1:50:42 yeah i wanted to see if there was interest in you know pulling items and putting them as separate agenda items for contracts that are over five million dollars so if you like making make the motion then we have a discussion on it good move to direct staff to investigate and propose applicable policy changes directing that all procurements presently requiring board approval values over five million be liberated by the borders dedicated agenda item your second second second by mcrae discussion i can see the merit in this but i also can see a lot of these contracts are over an extended period of

1:51:28 time so that they're you know it's a million dollars a year for five years or it's you know 1.5 million dollars a year for for five years and so i'm just wondering how if if we approve that and then things come back as higher or whatever we've seen in the past on this last consent calendar it's like okay we had a contract and it wasn't quite enough so we're adding to it the ppp one was was a prime example of that um so i don't know do you distinguish between five million dollars in one year do you distinguish to five million dollars in total or five million dollars over ten years i just i'm not clear on that i

1:52:14 mean for me if we are voting at five millions of dollars at one time and even if it's you know over multiple years maybe even especially if it's over multiple years because we're now holding future boards to that decision too it just seems like it warrants a bigger discussion and you know tonight i tested it out with the two that came up that were a little bit bigger i don't know that we got much more from it but i also think that there were some valid points that came up that i think were worth discussing and it just it just stuck to me because i know in other other government entities that kind of a thing it can't be on a consent calendar item it's not something that's just kind of

1:52:59 written off and it's one of the most important things about allocate budget and you know again the board packet has improved so much over the you know number of years that i've been here that it has so much more information in it that it may not warrant it but it was just something i wanted to discuss with the board and find out if there was others that made sense matt you had a yeah i have a question if you have a sense of how much i mean we don't have that many items over five million dollars coming to us you know on consent i'm just trying to get a sense of like how much extra work are we asking for if we if we go this route well a couple of clarifications so first of all you're not a lot over 5 million i don't view this from a staff perspective as requiring more work if

1:53:45 it's going to be on the consent calendar it's going to be a separate item it what it does is raised to the level of a separate board discussion so it doesn't get lost in the consent calendar in essence i don't see this as being extra work i would point out i think the motion actually asks direct staff to go back and look at the policy changes that it would take to implement this and propose something to the board i would encourage the board to pass this and we will bring something back for your consideration that maybe wrestles through some of the details that commissioner borofsky was asking about what qualifies this by how's the threshold or not and how does it mix with the other things that we're required to bring to the board so

1:54:32 i'm not a voter but i believe that um staff could provide the the information that's requested in the motion any other comments on this many of you want to chime in at all yeah i mean i think it's willing we i'm willing to give it a try and if it proves to be onerous and unnecessarily unnecessary we can always then get rid of it of course so i agree no i just think i'd be inclined to support it yeah i think i'm going to support it too i mean there are some contracts like tree trimming and flagging because we have prevailing wage non-prevailing wage and all that that you know that i'm

1:55:18 going to kick to the curb because there's not a lot of explanation i need but some of them get up to that threshold i'm not to the 5 million but yeah and so i i would support the motion that we take it to staff have them come back with the proposal for telling us what it takes to do it that doesn't mean we have to adopt it because the last thing i need to do is fill up the agenda even more than it's already full with time because you know by the time we have a staff presentation we have everybody gets three minutes we've eaten up another half hour and uh and you know we've got you know i wouldn't know a 19 million dollar contract for either right or not but you know i got that opportunity to pull it from the consent calendar and answer all the questions i want and when we get a heads

1:56:03 up those managing the schedule can't you know if somebody says sony says i want to pull that 20 million dollar reservoir contract and we'll add another 15 20 minutes to the consent calendar discussion on the agenda right there and if not then i mean there's a way to manage this and so i'm going to support the motion just for purposes of discussion that doesn't even have true but any other comments um was your motion seconded i'm sorry yeah it was okay okay i'm gonna call the question all those in favor signify by saying aye all right no

1:56:48 one last item that i wanted to know you know we voted on a number of real estate related topics tonight and i'm in the process of getting my real estate since uh took my test but i'm not fully licensed yet so there might be other things that i would note moving forward but i'm not employed by anyone or do you know i'm not signed up with anything or do i have any customers and such so just wanted to make that note about it moving forward we'll go together yeah don't worry about it we ordered dinner from somebody else's in my restaurant i don't have to declare that as a conflict of interest either so uh anything else from i have one question we got a river trip coming up in may i think the 20th and i

1:57:34 just want to status them because there's nothing worse than paying for a boat to go down with nobody in it because this is to educate people and make it can you give us an update if we need to go out and invite more elected officials or you know people that make a difference i mean it's an election year so so far we have 15 confirmed guests with five open seats and way more invitations out there that are paid in our speed it sounds like you're going to fail okay thank you very much okay i just want to make sure that we did that we didn't have to go out and play the game president brown moves down the list just a little bit sorry i've been making notes to myself sorry i'll take my

1:58:22 um yeah for me i guess board wrapper one of the one of the things that i would hope for is before the upriver trip in three weeks or up river meeting in three weeks we have some sort of heads up more maybe more than a day or two before what to expect up there um i don't know if we all we all have our one-on-ones plan before that or not but i think that that would be something that would be and at least with me it would be an advantage just to make sure that we're prepared uh with the answers that we may get asked i want i want to be able to go up there and not look like uh i want to be able to answer a question if it was posed to me

1:59:08 by the constituents that are up there because they don't have a commissioner that represents them really i mean mindy mindy is as close as you can get but they don't have a vote for us but they are our customers and so i think it's really important that we hear them and be prepared to uh address their issues yeah i think one of the couple of topics we're going to hear about is the leeberg issue you know one way or the other about how you know when you can buy so i think we're going to hear about that we're going to hear about bill estimating and we've already had a backgrounder on estimating reads and stuff and we've got a really good explanation for that but yeah i think that because i think i'm going to be moderating a meeting and so maybe you know the last stance who knows me but

1:59:54 it's usually not a ruckus group the only time we've had issues with upriver was when we did the boat then it got pretty pretty vocal it was a nimby thing but i think if we just hear people out and understand them and if they've got a gripe let them grind and uh they want to compliment i mean we've we've talked before we had met matt michael up there with the apple lane electric and we talked you guys want to switch to lane electric because they're surround the whole thing up there and we've had that discussion i'm not gonna i don't think it's appropriate to bring it up you know you know say you know electricity some other place but um yeah i think we're gonna hear some local critics i've got some pretty cursed emails about the middle reading and

2:00:40 things that's okay that's why we signed up for this job president i'll work with staff to get information to the board on any topics and questions that we think will be us and we'll have a signal from the back of the room just in case because no don't say that well and i would hope that we would have our partners up there that are our staff and our hopefully some of our partners up there that have been working really hard in the recovery process because i know that a lot of people up there are really appreciative of what we're doing so if we have that as a counterbalance you know it's like yeah you missed the estimation on my bill but you know i'm saving the river i know we we will

2:01:25 have staff i'll follow up and see which partners we've invited i know for example i've invited the lane electric general manager i commissioner believe was going to reach out to a couple of their appropriate board members um but other partners who were doing work up there i'll follow up with that yeah the watershed council maybe those people would do that they could are good sorry i didn't see it that's okay um kind of along those lines this is really part of uh correspondence but in the uh information about the process for lieberg one very very small thing that i noticed is there's a um kind of a timeline or listing of

2:02:10 upcoming things and it lists the work session that we're having on lieberg in june and i believe the date is incorrect because we changed the date of that work session and so um i think that an earlier date so either i'm wrong or it still has the old date but just to check up on that to make sure that the information that we're sending out is correct because that will be really important um and then the last thing is um the email from you frank last week i think announcing that we have a new climate policy advisor and just it would be nice maybe in the future our future immediately that person because so much of what we do

2:02:57 revolved around climate stuff and it'd be nice to say hi and welcome that person yes thank you commissioner schlossberg kelly hale who presently works at lane transit district has informed them of this decision so i'm not letting anything out of the bag prematurely but she has agreed to join e-web as a climate policy analyst and advisor specifically reporting into me as the general manager and he will begin on may 2nd i believe and so i will plan to introduce her to the board on may 3rd which is i believe a

2:03:42 nice day great and i look forward to seeing all of you in person at our upper remainder all right well mindy thank you for continuing to participate i know it's not easy when you're down and out so thank you i really appreciate that so with that nothing else i'm going to adjourn the meeting thank you