Idaho Falls Utility Board Meetings

July 27, 2017 The City Council of the City of Idaho Falls met in Special Meeting (Idaho Falls Power Board), Thursday, July 27, 2017, at Idaho Falls Power Conference Room, 140 S. Capital, Idaho Falls, Idaho at 8:00 a.m. Call to Order and Roll Call: There were present: Mayor Rebecca L. Noah Casper Councilmember John B. Radford Councilmember Ed Marohn Councilmember David M. Smith Councilmember Thomas Hally Councilmember Barbara Ehardt Councilmember Michelle Ziel-Dingman (arrived at 8:18 a.m.) Also present: Jackie Flowers, Idaho Falls Power Director Bear Prairie, Idaho Falls Power Assistant Manager Tim Blodgett, Hometown Connections Richard Malloy, Engineering and Compliance Manager Jace Yancey, Operations Technician Mark Reed, Generation Superintendent Wid Ritchie, Energy Services Manager Randy Westergard, Transmission and Distribution Superintendent Randy Fife, City Attorney Kathy Hampton, City Clerk Mayor Casper called the meeting to order at 8:03 a.m. Discussion of Idaho Falls Power (IFP) Budget and Fees: Mr. Prairie stated the Bonneville Power Administration (BPA) average customers rate increase came in lower than expected at 5.4%. The rate increase for Idaho Falls though will not be known until a few days from now when we get the utility specific rate impact values from BPA. 5.4% is an average for all customers, with some being higher and others lower. BPA also created a spill surcharge to recover costs associated with anticipated spill increase. The surcharge is a result of a ruling previously issued by the U.S. District Court. The surcharge is yet to be determined which could range from 0-2%, which would be in addition to the 5.4% increase or whatever the power rates increase is for Idaho Falls Power. Mr. Prairie stated if BPA rates drop below 0%, the Cost Recovery Adjustment Clause (CRAC) surcharge is automatically implemented also at the start of FY18, this could add another 1-2%. If we have a CRAC it will be known after their Q3 financial are released which is prior to us finalizing our rates proposal. All numbers combined = 8% BPA power increase with spill and no CRAC. He stated several factors determine the ‘average’ increase. After brief discussion, there was consensus of the Council to have a review of fees at the August 7 Council Work Session. Approval of Non-Binding Letter of Intent for Underwriting Services with Municipal Capital Markets (MCMG) Group, Inc.: Director Flowers stated the Non-binding Letter of Intent will allow the MCMG to give recommendations regarding potential issuance of bonds. She indicated future discussion will occur during an October IFP Board Meeting. It was moved by Councilmember Radford, seconded by Councilmember Marohn, to approve the Non-Binding Letter of Intent for Underwriting Services with Municipal Capital Markets (MCMG) Group, Inc. Roll call as follows: Aye – Councilmembers Ehardt, Marohn, Hally, Radford, Smith, Dingman. Nay – none. Motion carried. August Recess Talking Points: 1  July 27, 2017 Director Flowers stated items to be discussed at the Northwest Public Power Association (NWPPA) will include hydropower licensing/re-licensing, vegetation management, and wild fire budgeting. Mayor Casper stated these particular talking points may also be discussed at the Intermountain Energy Summit scheduled for August 8-9, 2017. IFP Strategic Planning Final Review: Director Flowers stated this is the final strategic session. She then turned the presentation to Mr. Blodgett. Mr. Blodgett expressed his appreciation for staff’s effort regarding the Strategic Plan. He stated the real focus will be on prioritization and discipline and he continued to challenge staff on these focus items. Mr. Blodgett recognized IFP’s limited resources of funding and staff to fully implement the plan. Director Flowers briefly reviewed the process and previously completed steps of the Strategic Plan including: Board Commissioning; Vision; Customers/Target Markets; Strengths, Weaknesses, Opportunities, and Threats; Strategic Areas of Focus; and, “Ends” Statements. Mr. Blodgett stated Step Seven includes Goals (Specific, Realistic, and Measurable). Growth – IFP shall anticipate energy and broadband needs for the continued vibrancy of the community. 1. Load Growth – Developed load growth plan that includes identification of available resources and target industries that would benefit from those resources for strategic recruitment by April 30, 2018. Director Flowers stated available resources could include land, surplus power, etc. that we identify as available for development. 2. Economic Development & Land Use – Working with economic development entities, identify and implement utility recruitment tools that would help promote our area for target industries by September 30, 2019. Directors Flowers stated there is a need to better understand what is important for that recruitment conversation. 3. Infrastructure Growth (includes fiber) – Working with economic development entities, identify geographical areas that are targeted City growth/industry recruitment areas and implement infrastructure expansion plans necessary to support commercial/industrial growth in those areas by September 30, 2022. Director Flowers stated examples include infrastructure investments and rate tools being pursued for the expanding INL campus. Brief discussion followed regarding service outside of City limits including the Area of Impact. Workforce – IFP shall maintain its position as an industry leader enabled by talented and trained staff. 1. Compensation Policy – Implement a utility-wide market based scale by January 31, 2018. 2. Succession Planning – Develop a comprehensive company succession plan, including individual employee development plans by December 31, 2018. It was noted that current succession planning is high level with detailed planning in areas of risk, high turnover, or apprentice programs where the training period is long. 3. Safety – Agree on a set of safety metrics to trace monthly to monitor trends and develop ‘safety ticket’ and ‘good catch’ programs by September 30, 2017. Mr. Reed stated staff will continue to grow a safe work culture. Cayenta will assist with the number of accidents. 4. Board Development (Board’s goal) – Identify three Council/Board policies and document by December 31, 2017 Develop new Council/Board training plan by December 31, 2017 Mr. Blodgett stated goals are important at the Board level for the community. Goals could include annual training and/or self evaluation. Discussion followed regarding a hybrid board and board turnover. Financial – IFP will operate in a stable, financially prudent and forward looking manner. 1. Utility Best Practices – Map data availability or sources, identify gaps to collect, add data reporting in Capital Improvement Projects (CIP) and budgeting - prioritize implementation plan by December 31, 2017, and integrate data into one or two programs per calendar year. Mr. Prairie stated annual reviews of financial policies will be ongoing. Other resources to tie data elements to existing planning documents are being explored. 2. Power Supply/Markets – Develop in-house scheduling expertise to coordinate and update procedures to leverage external scheduling agencies (UAMPS (Utah Associated Municipal Power Systems), TEA (The Energy Authority)) by December 31, 2018. 2  July 27, 2017 3. Regulations – Obtain FERC (Federal Energy Regulatory Commission) relicense consultant and establish a target relicense plan and schedule by December 31, 2018. Brief discussion followed regarding relicensing. Customer – IFP will serve as the customer’s trusted energy advisor. 1. Service Experience – Enhance customer experience by identifying, streamlining and implementing one process improvement per calendar year. Mr. Ritchie stated this would include formalizing and expanding key account services, one-stop shop service for customers to set up accounts, accept payments or implement a payment drop box. Conduct comprehensive customer satisfaction surveys and needs research by December 30, 2018 and annually thereafter. Mr. Ritchie stated surveys would compare IFP to unconventional markets. 2. Education/Communication/Outreach – Develop a plan by September 30, 2017 and review annually thereafter. Mr. Ritchie stated this plan would be comprehensive covering a range of topics. 3. Integrated Programs – Developed a technology plan to address customer needs and evolve utility services by December 30, 2018. Brief discussion followed regarding energy assistance to customers. Reliability – IFP will embrace change and technology to ensure a modern, adaptive grid. 1. Maintain – Establish procedures for continued progress toward sophisticated reliability tracing by September 30, 2017. Mr. Malloy stated data sets can be converted into Cayenta to build a history of CIP and staff time. This would also include review of assets for additional review by Mayor/Council. 2. Enhance – Develop a technology plan (including systems, people, process, security) by December 30, 2018. Mr. Malloy stated the technologies plan further contemplates and anticipates the interface. 3. Future Planning – Develop and implement a plan to island and restore power (micro-grid) to critical load centers under short notice conditions by September 30, 2022. Mr. Malloy stated this would include building off existing tools: CIP and financial policies. The length of time would be needed for the implementation plan. Actively participate in regional transmission planning by requiring biannual updates of transmission studies and implementation while coordinating regional participation. Mr. Malloy stated this would include conversation with Rocky Mountain Power. Director Flowers believes IFP may need to attend customer meetings as well. Step Eight: Action Items 1. Business Goals drive work plans of individual departments/functional/cross-functional areas 2. Assess resource implications and build into annual and/or capital budgets if necessary 3. Assemble appropriate players to build specific goals and action items around strategies 4. Develop a plan and timeline for plan 5. Build a communications process for reaching appropriate stakeholders Director Flowers stated goals and timelines may need to be adjusted depending on workload in certain divisions. Next steps include: develop action plan with more detailed goals (this may result in some target completion date adjustments to balance resources); bring final plan to Council for adoption; make the plan simple enough to become a part of ongoing discussions that have strategic implications (CIP, budget, and performance evaluations); keep the plan relevant by periodically revisiting the assumptions in the face of changes to the internal and external environments; and, make the plan part of your culture (the Management team will need to convert the remainder of the organization). There being no further business, it was moved by Councilmember Smith, seconded by Councilmember Marohn, to adjourn the meeting at 10:23 a.m. s/ Kathy Hampton s/ Rebecca L. Noah Casper CITY CLERK MAYOR 3