Board Meeting Minutes

VERMONT ELECTRIC COOPERATIVE, INC.

REGULAR MEETING OF THE BOARD OF DIRECTORS

MAY 29, 2018

APPROVED MINUTES

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), Mark Woodward (Secretary), George Lague (First Vice President) and Paul Lambert.  Also present from VEC was Interim-CEO/General Counsel Vickie Brown, Chief Operating Officer Peter Rossi, Chief Financial Officer Mike Bursell, Safety & Security Manager John Varney, Manager of Government Affairs and Member Relations Andrea Cohen and Corporate Assistant Lisa Vanat.

Rich Westman joined the meeting at 12:23 p.m.

MEMBER INPUT – AGENDA ITEM #2

No members were present.

SAFETY DRILL – AGENDA ITEM #3

Varney asked what should one do before they begin to mow their lawn?  Mention was made of having the proper footwear, pants, sunscreen and ear plugs.  Varney offered a “FOD walk down.”  “FOD” stands for foreign object damage such as rocks, toys and wire.  Varney also advised that letting the mower cool down before refueling is a wise idea. 

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 April 30, 2018. 

Hoeppner moved and Maroni seconded:

That the minutes of the regular monthly Board of Directors meeting held on April 30, 2018 be approved.

The minutes were approved by unanimous vote.

FINANCE COMMITTEE APPROVALS-- AGENDA ITEM #5

Carswell noted that the Finance Committee met in the morning and discussed patronage capital retirements for 2018 and reviewed the Equity Management Plan presented by staff.  There were several recommendations from the Committee.

Ward moved and Lague seconded to approve a Patronage Capital retirement for 2018 (from 2017 earnings) of $1.5M with $1.25M of balance to be applied to 1997 patronage and $250k of balance to be applied to 2017 patronage. 

The motion passed by unanimous vote.

Ward moved and Maroni seconded to approve the Equity Management Plan for 2018 as presented and included in the Finance Committee meeting packet.

The motion passed by unanimous vote.

Lague moved and Ward seconded to approve the purchase of VELCO stock that has been previously assigned for a September closing.

The motion passed by unanimous vote.

APPOINT CEO SEARCH & SELECTION COMMITTEE – AGENDA ITEM #6

Carswell nominated Maroni, Hoeppner and Ward to serve with him as members of the CEO Search Committee.  Maroni asked how Carswell came to this decision. Carswell noted that he was trying to find a balanced group to represent the Board in the first step of the CEO search and selection process. 

Worth moved and Lambert seconded to approve the CEO Search Committee nomination.

The motion passed by unanimous vote.

Brown explained that she, John Varney and Sally Lumbra reviewed over 90 applicants and selected a group of “qualified” candidates to be considered by the committee. 

Discussion ensued about the details of the CEO hiring process.  Carswell noted the full Board will be kept up to date as the process evolves.

STRATEGIC PLANNING – AGENDA ITEM #7

There was a discussion regarding the staff’s final recommendation as to the four key focus areas for the 2019 strategic plan.  Maroni advocated for the inclusion of a fifth key focus area for member engagement.  Bursell responded that member engagement is included throughout the core competencies and key focus areas. 

Maroni moved and Worth seconded to approve the following five key focus areas:

  1. We will pursue battery storage and other load control measures to provide benefits to all members.
  2. We will explore opportunities to increase our electric sales and expand our loads to optimize use of the grid and provide benefits to the members.
  3. We will continue to pursue excellence in our core business functions.
  4. We will continue to work toward a culture of high employee engagement and leadership at all levels consistent with our core values (rules of engagement).
  5. We will engage with members to promote understanding of the benefits of co-op membership.

The motion passed by unanimous vote.

Brown asked for guidance about topics that the Board would be interested in hearing about going forward.  She noted that Jim Spiers as a speaker has been on the parking lot for some time.  Discussion ensued and there was a consensus that Brown should inquire as to the subjects that Spiers is competent to speak on and bring that back to the Board. 

There was extensive discussion regarding changes in the utility industry and the long-range planning needed to position VEC to respond to those changes.  There was a consensus that the Board would like to be informed periodically as to some of the innovative projects that staff is pursuing.  Brown would like the Board to revisit its vision statement in a way that looks out 5-10 years.  With a new CEO in place, that would be a good time to take on that task. 

There was a discussion regarding the staff’s final recommendation as to the four key focus areas for the 2019 strategic plan.  Maroni advocated for the inclusion of a fifth key focus area for member engagement.  Bursell responded that member engagement is included throughout the core competencies and key focus areas. 

Maroni moved and Worth seconded to approve the following five key focus areas:

  1. We will pursue battery storage and other load control measures to provide benefits to all members.
  2. We will explore opportunities to increase our electric sales and expand our loads to optimize use of the grid and provide benefits to the members.
  3. We will continue to pursue excellence in our core business functions.
  4. We will continue to work toward a culture of high employee engagement and leadership at all levels consistent with our core values (rules of engagement).
  5. We will engage with members to promote understanding of the benefits of co-op membership.

The motion passed by unanimous vote.

Brown asked for guidance about topics that the Board would be interested in hearing about going forward.  She noted that Jim Spiers as a speaker has been on the parking lot for some time.  Discussion ensued and there was a consensus that Brown should inquire as to the subjects that Spiers is competent to speak on and bring that back to the Board. 

There was extensive discussion regarding changes in the utility industry and the long-range planning needed to position VEC to respond to those changes.  There was a consensus that the Board would like to be informed periodically as to some of the innovative projects that staff is pursuing.  Brown would like the Board to revisit its vision statement in a way that looks out 5-10 years.  With a new CEO in place, that would be a good time to take on that task. 

There was a discussion regarding the staff’s final recommendation as to the four key focus areas for the 2019 strategic plan.  Maroni advocated for the inclusion of a fifth key focus area for member engagement.  Bursell responded that member engagement is included throughout the core competencies and key focus areas. 

Maroni moved and Worth seconded to approve the following five key focus areas:

  1. We will pursue battery storage and other load control measures to provide benefits to all members.
  2. We will explore opportunities to increase our electric sales and expand our loads to optimize use of the grid and provide benefits to the members.
  3. We will continue to pursue excellence in our core business functions.
  4. We will continue to work toward a culture of high employee engagement and leadership at all levels consistent with our core values (rules of engagement).
  5. We will engage with members to promote understanding of the benefits of co-op membership.

The motion passed by unanimous vote.

Brown asked for guidance about topics that the Board would be interested in hearing about going forward.  She noted that Jim Spiers as a speaker has been on the parking lot for some time.  Discussion ensued and there was a consensus that Brown should inquire as to the subjects that Spiers is competent to speak on and bring that back to the Board. 

There was extensive discussion regarding changes in the utility industry and the long-range planning needed to position VEC to respond to those changes.  There was a consensus that the Board would like to be informed periodically as to some of the innovative projects that staff is pursuing.  Brown would like the Board to revisit its vision statement in a way that looks out 5-10 years.  With a new CEO in place, that would be a good time to take on that task. 

DEBRIEF OF NEAEC ANNUAL MEETING IN NORTH CONWAY– AGENDA ITEM #9

This agenda item was moved forward.  Board members who attended the NEAEC Annual meeting shared their learnings.  There was an extensive discussion of the experience of cooperatives which have entered the broadband business and the advantages and disadvantages of such an initiative for VEC.  A director asked whether management had had any discussions with our regulators as to whether VEC can legally get into the broadband business.  Brown noted that she had a conversation with a staff member at the Department of Public Service (DPS) about the opportunities to pursue fiber in Vermont and that he was skeptical.  He would be willing to speak to the Board about his experience.  Brown also noted that management met with officials with Consolidated Communications, who said they could not make an economic case for fiber to the premises.  There was further discussion and the consensus was to invite both the DPS and Consolidated to speak to the Board.

There was further sharing of other items of interest from the meeting.   There was a lengthy discussion about the proper way to evaluate a CEO but no consensus was reached.

There was a break in the meeting at 1:48 p.m.

The meeting resumed at 2:05 p.m.

LEGISLATIVE DEBRIEF – AGENDA ITEM #8

Warren Coleman joined the meeting.  He noted legislature is engaged in a special session focused on budget, although a handful of other bills have been introduced.  We had been active in four issues this session. 

  • Customers and energy efficiency program -- There was a pilot program approved to allow industrial customers to manage their own efficiency charge dollars (this benefits Omya) and there was expansion of the energy savings accounts which helps our member West Rock. West Rock was very appreciative of VEC’s support of this bill.  In the Rural Economic Development bill there is a requirement for the DPS to conduct a study of electric utilities’ use of demand charges.
  • Rural economic development -- Included in the Rural Economic Development bill is a requirement for the DPS to conduct a study of electric utilities’ use of demand charges.
  • SHEI – The PUC is tasked with providing a report on their decisions on the pending projects that are in the SHEI. They will also address the issue as part of a standard offer study.  The DPS is tasked with addressing the broader policy issues related to how Vermont can achieve its renewable goals in light of system constraints.  Cohen reported that while we were not successful in getting a moratorium on development in the SHEI (which we knew would be a long shot), we had a lot of opportunity to educate legislators who now have a better understanding of the concern.
  • Electric Vehicle study – The DPS is tasked to do a study around regulation and rates for EV charging station. This study is due in July 2019.

Coleman left the meeting.

COMMITTEE APPOINTMENTS- AGENDA ITEM #10

After a discussion about committee appointment preference, the following committee assignments were agreed to:

  • Communications Committee: Tom Bailey, Carol Maroni-Chair. Richard Westman. Mark Woodward, Don Worth, Ken Hoeppner, Paul Lambert.
  • Finance Committee: Carol Maroni, George Lague, John Ward-Chair, Rich Westman, Mark Woodward, Charlie Van Winkle.
  • Power Supply & Operations Committee: Tom Bailey, Charlie Van Winkle, Rich Goggin, Ken Hoeppner, George Lague-Chair, John Ward
  • Governance Committee: Rich Goggin, Ken Hoeppner-Chair, George Lague, Don Worth, Paul Lambert.
  • Community Fund: Rich Goggin, Charlie Van Winkle, Tom Bailey.

Carswell requested that the committee list and Board contact list be updated and distributed.

MANAGERS’ REPORTS– AGENDA ITEM #11

Directors engaged with staff to ask about and discuss a number of details included in managers’ reports. 

In response to a question about changes to the pension plan, Bursell noted that we will have approvals ready for the Board to consider in the next few months in order to allow the pension change to be effective on January 1st

Ward asked for an update about the Newport land purchase. 

Ward moved and Worth seconded to go into executive session to discuss the Newport land purchase.  By unanimous vote, the Board entered into executive session.  Vanat left the meeting. 

By unanimous vote, the Board exited executive session.

ANY OTHER BUSINESS– AGENDA ITEM #12

There was no other business.   

ADJOURN – AGENDA ITEM #13

There being no further business before the meeting,

Woodward moved and Westman seconded:

That the meeting be adjourned.

The motion carried unanimously.

The meeting adjourned at 3:30 p.m.