Board Meeting Minutes

VERMONT ELECTRIC COOPERATIVE, INC.
REGULAR MEETING OF THE BOARD OF DIRECTORS
DECEMBER 29, 2017

CALL TO ORDER – AGENDA ITEM #1
President Dan Carswell called the meeting to order at 12:00 p.m. in the Robert P. Northrop Boardroom at VEC offices in Johnson, Vermont. Present were Directors Rich Goggin, Ken Hoeppner, Carol Maroni (Second Vice President), John Ward (Treasurer), Rich Westman, Mark Woodward (Secretary), Tom Bailey, George Lague (First Vice President), Paul Lambert, and Don Worth. Also present from VEC was CEO Christine Hallquist, Safety & Security Manager John Varney, Chief Financial Officer Mike Bursell, Chief Operating Officer Peter Rossi, and General Counsel Vickie Brown.

MEMBER INPUT – AGENDA ITEM #2
No members were present.

SAFETY DRILL – AGENDA ITEM #3
Varney distributed the 2018 Safety Calendar to the directors. He noted that there were healthy living tips and recipes included in the calendar.

APPROVAL OF MINUTES – AGENDA ITEM #4
President Carswell asked if there were any additions or corrections to the minutes of the regular monthly Board of Directors meeting held on November 28, 2017.

Worth moved and Goggin seconded:

That the minutes of the regular monthly Board of Directors meeting held on November 28, 2017 be approved.

A director noted that the minutes included a suggestion to conduct a survey of members concerning broadband. He quoted from the 2017 member survey that asked about members’ views on broadband. The minutes need not be amended but that director asked that the 2017 member survey be considered in the context of future discussion of broadband.

A director asked that the audio be checked to make sure that the motion to approve the use of audio recordings was unanimous as indicated in the minutes.

The motion passed by unanimous vote.

EXECUTIVE SESSION -- AGENDA ITEM #5
Bailey moved and Worth seconded to enter into executive session to discuss a personal issue affecting the CEO. Varney, Rossi, Bursell and Brown left the meeting.

By unanimous consent, the Board exited executive session.

REPORT ON CEO’S 2017 GOALS – AGENDA ITEM #6
Varney, Rossi, Bursell and Brown re-joined the meeting. Hallquist provided a report as to VEC’s efforts in 2017 in implementing the company’s vision statement and the 2017 strategic plan. Highlights of the year include:
• Member focus: $1 million in patronage capital returns, member satisfaction high
• Innovative Services: Tier III, solar, battery deployment
• Keeping rates low: No rate increase for 4th year in a row
• Safety: Green Mountain VPP achievement, wellness award, cyber training
• Socially and environmentally responsible: EV plug ins, two new solar projects, meter inspections, relatively carbon-free power portfolio
• Workforce development: focus on culture, leadership training

There were numerous questions and answers throughout the presentation.

Carswell noted that also included in the packet was a report by Hallquist as to her 2017 goals. A director asked about the process for developing the core competencies and key focus areas. There was a discussion as to whether the Board’s role should be to develop these rather than review them. Discussion ensued. There was a suggestion that the conversation with the management team begin earlier than May to provide opportunity for back and forth.

Brown noted that following today’s discussion of the report on goals, she would launch the on-line BoardSource CEO evaluation tool that the Board would use for Hallquist’s review. After that, the Board would discuss salary and goals for 2018. There will be a two week time period for the survey.

There were numerous questions as to the details included in Hallquist’s report on the completion of her 2017 goals. As to capital project reporting, there was a discussion as to what types of capital project variances are reported to the Board. The current KPI holds management to a 5% variance for the entire capital budget, not per project.

STRATEGIC PLANNING & BOARD CALENDAR - AGENDA ITEM #7
Carswell noted that he would like to use the Board calendar to guide the strategic planning process. To address the concern that the Board needs to be more involved in the development of key focus areas, there was a sense that the Board should start sooner in 2018. There was extensive discussion about the proper process for moving forward with many different suggestions offered and debated. Carswell noted that the January meeting needed to address the CEO review but otherwise the agenda can be devoted to strategic planning.

Consensus was to devote most of the time at the next few Board meetings, using a facilitator, to brainstorming ideas and prioritizing of areas of focus. It would be helpful to hear from the staff as to areas that they identify as coming challenges and trends in the industry. There was a concern expressed about spending too much time rewriting the mission and vision statements, with the suggestion that the Board needs to look ahead at where we are going before it can evaluate whether these need to be changed.

There was a break in the meeting at 2:00 p.m.

REPORT ON ACLARA SYSTEM – AGENDA ITEM #8
Hallquist provided a presentation on the Aclara Metering system. We learned from the consumer behavior study that it is difficult to rely on members to change their own behavior through price incentives. As a result, the future will require adjustments to generation and load to be made automatically, without the need for member action. The Aclara system – which is VEC’s smart meter platform – has the ability to make this happen. Hallquist provided some background as to the Aclara software and VEC’s use of this technology to date. She also explained the capabilities of the system for the future. The key opportunity is for behind the meter pricing and control signals. There were numerous questions throughout the presentation.

COMMITTEE REPORTS – AGENDA ITEM #9
There were no committee reports.

MANAGER REPORTS – AGENDA ITEM #10
Director expressed appreciation for arranging the joint meeting with WEC and for the CEO’s end-of-year message. A director suggested that the next in-house Board training be focused on rate design with an invitation to WEC. Hallquist will discuss future trainings with Patty Richards. Hallquist sought input as to locations for the fall NEAEC training. Woodstock, Cooperstown and Middlebury were all popular sites.

Hallquist also polled the group as to preferred topics for the November Board training. She will take that into consideration in setting the agenda for that training.

Maroni moved and Bailey seconded to go into executive session to discuss the union negotiations and a possible real estate deal.

By unanimous consent, the Board exited executive session.

Bursell noted that he would discontinue updates on the solar projects in his updates as they are all operational under a fixed-price PPA. He will shift the focus to the storage projects. Bursell fielded some questions as to some of the storage projects.

ANY OTHER BUSINESS – AGENDA ITEM #11
There was no other business.

ADJOURN – AGENDA ITEM #12
There being no further business before the meeting,

Woodward moved and Ward seconded:

That the meeting be adjourned.

The motion carried unanimously.

The meeting adjourned at 3:30 p.m.