VERMONT ELECTRIC COOPERATIVE, INC. REGULAR MEETING OF THE BOARD OF DIRECTORS NOVEMBER 24, 2015
APPROVED MINUTES As required under the VEC Bylaws, notice of this meeting was sent to each Director by deposit in U.S. mail on November 18, 2015
CALL TO ORDER – AGENDA ITEM #1 President Tom Bailey called the meeting to order at 12:02 p.m. in the Robert P. Northrop Boardroom at VEC offices in Johnson, Vermont. Present were Directors Dan Carswell (First Vice President), Michelle DaVia, Ken Hoeppner, George Lague, Molly Lambert, Carol Maroni (Second Vice President), John Ward (Treasurer), Mark Woodward (Secretary), and Don Worth. Also present from VEC were CEO David Hallquist, CFO Michael Bursell, General Counsel Vickie Brown, Manager of Government Affairs and Member Relations Andrea Cohen, and Acting Corporate Assistant Lindsey Fenton.
SAFETY DRILL – AGENDA ITEM #2 Dave Hallquist reported about a recent accident with one of our contractors. The contractor was using a buck squeeze belt that was not clipped in correctly and fell 32 feet. He did not sustain any injuries. The accident was reported immediately, and OSHA has said they will not be investigating this incident. Hallquist mentioned that no matter how long you have been working with a piece of equipment, you should always double check to make sure it is being used properly.
REVIEW BOARD OPERATING NORMS – AGENDA ITEM #3 Lague moved and Woodward seconded: That the Board enter into executive session to discuss the Board operating norms. By unanimous vote of those present the Board entered into executive session. By unanimous vote of those present executive session ended.
MEMBER INPUT – AGENDA ITEM #4 There were no members present.
APPROVAL OF REGULAR BOARD MEETING MINUTES – AGENDA ITEM #5 President Bailey asked if there were any additions or corrections to the minutes of the regular monthly Board meeting held on October 27, 2015 included in the November 24, 2015 Board packet. There were no comments. Lambert moved and Hoeppner seconded: That the minutes of the regular monthly meeting held on October 27, 2015 be approved. The motion carried by unanimous vote.
CEO SUMMARY – AGENDA ITEM #6 Lague moved and Worth seconded: That the Board enter into executive session to discuss contract negotiations. By unanimous vote of those present the Board entered into executive session. By unanimous vote of those present executive session ended. A director asked about the statement from Efficiency Vermont that was included in Hallquist’s executive summary. Discussion ensued about the appropriate level of the Efficiency Charge and whether VEC should take a position by policy. Hallquist stated that VEC’s member survey showed that the majority of VEC members support Efficiency Vermont. A director noted that some members wrongly perceive increases in the Efficiency Charge to be VEC rate increases. Discussion ensued about whether there were opportunities for VEC to pursue projects with Ranger Solar. Hallquist stated that VEC has had three goals in considering locating solar projects in VEC territory: (1) to improve the efficient operation of our grid, (2) to work with our communities, and (3) to locate projects near to loads to reduce the need for transmission upgrades. Hallquist noted that the Ranger projects proposed in VEC’s territory do not meet these goals. Discussion ensued about whether VEC is appropriately communicating the cost impact of the net metering program on VEC members. A director stated that we a have an obligation to let our members know about the cost impact, while another director mentioned we should be careful not to divide our members since many other subsidies exist in utility rates. Hallquist suggested that this issue could be discussed further at a Communications Committee meeting. A director asked about the NorthLink fiber and whether there will be an opportunity to supply internet service for VEC members. Hallquist explained that it is difficult to make the economics work, which is why VEC has stayed out of any telecommunications business. MANAGER REPORTS – AGENDA ITEM #7 Finance Update Lambert moved and Woodward seconded: That the Board enter into executive session to discuss solar project contract negotiations. By unanimous vote of those present the Board entered into executive session. By unanimous vote of those present executive session ended.
*President Bailey called a break in the proceedings at 1:56 p.m. The meeting resumed at 2:08p.m.
Operations Update COO Jeffrey Wright was present but there were no questions brought forward by the Board.
Corporate Services Update Manager of Government Affairs and Member Relations Andrea Cohen answered questions presented by the Board regarding her report in the 11/24/15 Board packet. Discussion ensued about the working group that was tasked with proposing the rules for implementing “Tier 3” (the Energy Transformation category of Act 56). Cohen explained that many utilities are participating, and members of the public are also welcome. Initial comments are due to the PSB on Dec 4th. A brief discussion ensued about using social media to keep our members connected. Cohen noted that VEC will be scheduling “Meet and Greets” with members at various times and locations around our VEC territory.
Safety Update CEO Hallquist filled in for John Varney who was not present. Discussion ensued about two recent injuries to employees as well as an accident involving a contractor. A director asked whether there have been more accidents than normal lately. Wright noted that the incidents are not connected to one another, but just coincidental. Discussion ensued about challenge in getting employees and contractors to report injuries immediately, as required by VEC policy.
General Counsel Update Brown reported that the Public Service Board has declined to allow the 20 MW Ranger projects to receive a long-term power purchase agreements until such time as they have met all the criteria of section 248, as required by PSB rule. Ranger had requested waiver of that rule; VEC, the Department of Public Service and other utilities opposed such waiver; and the PSB declined to waive the rule.
APPROVE CAPITAL BUDGET – AGENDA ITEM #8 Bailey noted that, in a joint meeting that morning, the Finance Committee and Power Supply and Operations Committee had reviewed the proposed 2016 capital budget and recommended approval. Ward moved and Lambert seconded: That the Board approve the VEC Proposed 2016 Capital Budget as presented on page 71 of the 11/24/15 Board packet. The motion carried by unanimous vote.
BOARD MEMBERS TRIP REPORT – AGENDA ITEM #9 Board members Lague, Ward, Westman, and Woodward attended the NEAEC 2015 Directors Seminar in October and Woodward shared what they had learned with the full Board. The seminar focused on how to make members proud to be part of a cooperative and thereby foster member loyalty. Discussion ensued about different ways to implement this strategy and the specific recommendations from the seminar, which will be taken up by the Governance Committee at a future meeting. The Board discussed its role in shaping VEC’s legislative strategy for 2016. Cohen summarized the energy- related issues that the legislature would likely address, including net metering, solar siting, and perhaps a carbon tax. The consensus of the Board was to include legislative issues on the agenda of the December Governance Committee meeting. Prior to that meeting Cohen would reach out to Tony Klein and Chris Bray to discuss their energy agendas.
UPDATE ON STORAGE SOLUTIONS – AGENDA ITEM #10 Hallquist provided a presentation on the state of energy storage, arguing that it may provide the best opportunity for VEC to optimize the use of its electric grid. He recommended that implementing a storage project should be a goal for 2017, so discussion should begin in 2016 toward that goal. Location matters with storage, and VEC should consider providing incentives to encourage members to stay on the grid and use battery storage to help VEC manage system resources. Energy storage can create additional value in wholesale energy and capacity markets. Energy storage is still at the test level, and Hallquist explained the technologies currently being researched. Discussion among the Board ensued.
APPROVE 2016 STRATEGIC PLAN – AGENDA ITEM #11 Bailey noted that the Strategic Plan had been presented in prior meetings and asked for a motion to now approve it. Hoeppner moved and Woodward seconded: That the 2016 Strategic Plan as presented on page 89 of the 11/24/15 Board packet be approved. Discussion ensued about some of the Key Performance Indicators (KPIs) in the Member Focus area but no changes were suggested. Discussion ensued as to whether there should be a KPI for storage solutions, which are included as a strategy under Keep the Lights On. Hallquist noted that if it is included as a strategy, management is committed to address it. The motion carried, with one abstention.
COMMITTEE REPORTS – AGENDA ITEM #12 Governance Committee Meeting Hoeppner noted that the committee met on November 11, 2015, and requested some further research and information from management. A follow-up meeting has been scheduled for December 17th and will focus on the topics: (1) use of counsel by VEC, (2) inclusion of discount formula in capital credits policy, (3) revisions to Policies B. 9 and 10 concerning member requests for information and attendance at meetings, (4) revisions to Policy B. 13, and (5) discussion of 2016 legislative issues. Maroni moved and Lague seconded That the recommendation of the Governance Committee to accept the existing Policy B. 8 without change be approved. The motion carried by unanimous vote.
ANY OTHER BUSINESS – AGENDA ITEM #13 No other business or discussions were brought forward by the Board.
ADJOURN OR RECESS – AGENDA ITEM #13 There being no further business before the meeting, Ward moved and Lague seconded That the meeting be adjourned. The motion carried unanimously. The meeting adjourned at 4:05 p.m.