Board Meeting Minutes

VERMONT ELECTRIC COOPERATIVE, INC.

REGULAR MEETING OF THE BOARD OF DIRECTORS

SEPTEMBER 26, 2017

APPROVED MINUTES

As required under the VEC Bylaws, notice of this meeting was sent to each Director

via US Mail on September 19, 2017

CALL TO ORDER – AGENDA ITEM #1

President Dan Carswell called the meeting to order at 12:01 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, Paul Lambert, and Don Worth.  Also present from VEC was CEO Christine Hallquist, Safety & Security Manager John Varney, Chief Operating Officer Peter Rossi, Manager of Government Affairs and Member Relations Andrea Cohen, Chief Financial Officer Mike Bursell, and General Counsel Vickie Brown.

MEMBER INPUT – AGENDA ITEM #2

There were no members present.

SAFETY/CYBER SECURITY DRILL – AGENDA ITEM #3

Varney advised that when you are performing an activity that may cause frustration, be mindful of the moment that you first feel the frustration and stop and regroup to prevent accidents.

Varney also cautioned about using Equifax’s services to monitor the security of your data going forward.

Ward moved and Bailey seconded to add an agenda item to discuss the continued audio taping of Board meetings.  The motion passed by unanimous vote.

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 August 29, 2017. 

Bailey moved and Worth seconded:

That the minutes of the regular monthly Board of Directors meeting held on August 29, 2017 be approved.

The motion carried by unanimous vote and the minutes were approved.

AUDIO TAPING OF BOARD MEETINGS – NEW AGENDA ITEM

There was discussion of the current policy which states that audio recordings of Board meetings will be shared on the VEC website for a period of 60 days.  Currently the recordings are posted on the Drop Box so the Board has access but not posted on the website. Several directors expressed concerns about sharing recordings, such as inadvertently sharing confidential information.  Other directors spoke in favor of sharing the audio recordings as being more transparent to members.

After discussion, there was consensus that this issue needed further review and that there were a number of different decisions:  whether to record or no, whether to publish recordings or not, whether to extend recording to committee meetings?   

Hoeppner moved and Maroni seconded to remove the requirement in the policy to posting the recording on the website, pending further review of the policy. 

The motion passed with one nay vote. 

There was a further consensus to obtain Board counsel’s advice on the matter and to further discuss at a Governance Committee meeting.

STRATEGIC PRESENTATION GUEST GREG STARHEIM (CFC) – AGENDA ITEM #6

This agenda item was moved forward to accommodate the guest speaker. 

Starheim introduced himself as Senior Vice President, Business and Industry Development at CFC.  He presented on the topic “Evolving Trends in the Electric Utility Industry.”

He noted that there was a Governance Task force at work within the NRECA.  Their work will be presented at the December annual meeting.  There may be governance guidance for the VEC Board in the final report. 

Starheim summarized Wall Street as having a generally positive outlook toward electric cooperatives but noted several trends which were causing uncertainty.  He provided some background as to where things stand now and then identified trends which he predicts will continue, including continued low prices of oil and natural gas; acceleration of both new gas plants and renewables because of dropping costs of wind and solar; further loss of nuclear plants due to low market prices.  He noted that wholesale power markets are in transition as more and stricter RPS standards drive changes.  He is seeing states encourage and facilitate behind the meter resources and load control.  He cautioned to keep an eye on C&I customers so that they don’t look elsewhere for energy products/services. 

Distributed energy resources (DERs) are being used to promote both operational goals and power supply goals – in addition to providing something that members want.   The challenge is to fully monetize the value of DERs.  It takes knowledge of electric grid as well as markets. 

He provided some examples of other innovative projects that other cooperatives have implemented.  Discussion ensued.

EXECUTIVE SESSION – AGENDA ITEM #5

At 1:30, President Carswell called for a 15 minute break after which the Board entered into executive session (agenda item #5) to discuss Board norms.  Starheim left the meeting.

The Board exited executive session at 2:15.

STRATEGIC PRESENTATION GUEST DAVID HILL (SOLAR PATHWAYS) – AGENDA ITEM #7

Hallquist introduced David Hill and Damon Lane, of Vermont Energy Investment Corporation (VEIC) who led the “Solar Pathways” project.  This project was funded by a Department of Energy (DOE) grant.  Following the Sunshot Program, which had a goal of reducing the cost of solar to 6 cents by 2020, DOE recognized that the growth of solar at this rate would raise questions.  The premise for the Solar Pathways study was to evaluate what it would look like if Vermont had 20% of its electric portfolio of solar by 2025.  Questions explored in the study included:   Is there enough room? Can the grid handle it?  Will it be too costly?  Will costs be shared equitably?

Hill advised utilities to get information to the public and developers as to which feeders and circuits have hosting capacity and which do not.  As to public policy, the incentives provided for certain solar installations could favor those locations which have grid hosting capacity.  The current system where developers select locations and then utilities study interconnection capacity is not efficient and needs to be revisited.    

Hill noted that additional information is available on the website www.vermontsolarpathways.org.

Several directors offered comments and questions. 

Hill and lane left the meeting.  Rich Westman also left the meeting.

VEC 2018 STRATEGIC PLAN – AGENDA ITEM #8

Sally Lumbra and Amanda Zay joined the meeting.

Hallquist noted that management will be reporting each month on the KPIs that are included in the plan.  The question for the Board in reviewing the draft plan is to make sure we are measuring the right things.  The senior leadership team explained each KPI as well as the strategies that the staff has proposed for each of the four key focus areas.  There were numerous questions and suggestions.

Ward moved and Woodward seconded to approve the core competencies, key focus areas, and key performance indicators in the draft 2018 plan.

The motion passed by unanimous vote.

Lumbra and Zay left the meeting.

Hallquist interjected thanks to John Varney for leading the effort to lead the company on the path to VPP certification.  Varney explained the process as follows.  VEC must address 8 items identified by VOSHA and then VOSHA will forward a draft report to Vermont Commissioner of Labor for review and approval.

  

UTILITY SCALE STORAGE PROJECT – AGENDA ITEM #9

Craig Kieny joined the meeting.  He explained that with the guidance provided by the Board earlier in the summer, the storage team went back to the various vendors and obtained final bids.  Kieny explained each of the bids in detail and provided information about the track record of each bidder. 

There were numerous questions by Board members as to the various options.

Bailey moved and Hoeppner seconded to authorize management to pursue negotiations with Viridity for a 1 MW 4 MWh battery storage project with a 10-year lease with an option to buy on the terms set forth on pages 40 and 41 of the Board packet.  If the financial terms of the agreement change by greater than 10% staff will bring the project back to the Board for further review.   

The motion passed by unanimous vote.

There was a request that the final terms be shared with the Board for information only.

MANAGER REPORTS – AGENDA ITEM #10

A director asked about whether there was follow up with our solar partners to connect with the entity promoting planting pollinators at solar sites.  Cohen reported that she passed the request to Encore who is interested in pursuing this. 

A director requested to be informed as to the parameters that we will be using as we enter into negotiations with the union.  He requested a comparison of salary increases over the past few years.

There were some additional questions about details in the managers’ report.

ANY OTHER BUSINESS – AGENDA ITEM #11 

There was no further business.

ADJOURN – AGENDA ITEM #12

There being no further business before the meeting,

Ward moved and Goggin seconded:

That the meeting be adjourned.

The motion carried unanimously.

The meeting adjourned at 5:30 p.m.