Idaho Falls Utility Board Meetings

October 12, 2017 The City Council of the City of Idaho Falls met in Special Meeting (Idaho Falls Power Board), Thursday, October 12, 2017, at Idaho Falls Power Conference Room, 140 S. Capital, Idaho Falls, Idaho at 9:00 a.m. Call to Order and Roll Call: There were present: Mayor Rebecca L. Noah Casper Councilmember Barbara Ehardt Councilmember Ed Marohn Councilmember Thomas Hally Councilmember John B. Radford Councilmember David M. Smith Councilmember Michelle Ziel-Dingman Also present: Jackie Flowers, Idaho Falls Power Director Bear Prairie, Idaho Falls Power Assistant Director Kathy Hampton, City Clerk Mayor Casper called the meeting to order at 9:03 a.m. Draft Strategic Plan Discussion: Director Flowers briefly reviewed the draft Idaho Falls Power (IFP) Strategic Plan with specific attention to the Strengths, Weaknesses, Opportunities, and Threats (SWOT). She indicated the final Strategic Plan will be presented to Council during a future board meeting for approval. She stated this will be a high-level policy document. Any action plan will be a separate policy for staff. Director Flowers reviewed each icon for the five (5) areas of strategic focus – Customer, Financial, Growth, Reliability, and Workforce. Each of the strategic focus areas will include specific items. She requested any feedback from Councilmembers prior to month end. Energy Imbalance Market Discussion: Mr. Prairie reviewed Energy Imbalance Charges stating PacifiCorp is responsible for the transmission operation in the geographic region. In the event that resources don’t match the load at any given time, PacifiCorp uses their resources to balance the load. Mr. Prairie stated the Tariff is the document detailing responsibilities of all companies involved and all companies must be treated equally per the Federal Energy Regulatory Commission (FERC). He indicated an average of all hours is charged, with the schedule of imbalance charges falling under Utah Associated Municipal Power Systems (UAMPS). Slice and block schedule should not have imbalance and any load deviations. This process was working well until PacifiCorp entered into the California Independent System Operator (CAISO) Energy Imbalance Market, now different metrics are being utilized. Due to this change, Mr. Prairie believes Bonneville Power Administration (BPA) does not fully understand the said charges. He stated in spring of 2017 IFP received notification of the charges, which must be paid. He reviewed the disputed charges, indicating IFP was the only BPA East Idaho customer who was direct charged. General discussion followed. Mr. Prairie reviewed the steps to dispute the charges. Upper Plant and Old Lower Plant Post Project Review: Mr. Prairie reviewed the Upper Plant Sedimentation Analysis project stating the amount of sedimentation, which mainly consisted of sand/volcanic material, was greater than anticipated. A coffer dam was also constructed as part of this capital project. Removal costs – Projected:  Sediment removal hard costs - $600,000 (50,000 yards)  Two added weeks of lost generation - $38,190  Bid option included additional yards beyond the 50,000 1  October 12, 2017 Actual Cost:  Bid was $520,372 for the 50,000 yards  IFP added 25,000 yards – $765,372 total cost Mr. Prairie reviewed payback related to the generation increase. He stated benefits of the project include lower abrasion of turbine blades and gates; replacement of plant transformer; and increased generation. He also reviewed generation outcome. Mr. Prairie indicated the analysis is not perfect due to hydrologic variables and while efficiency does appear to improve, the data sets are inconsistent on the levels. He believes generation was increased which will pay back over the course of time. The generation will continued to be reviewed. Mr. Prairie reviewed the Old Lower Plant Generation Analysis project. This was a 1940 vintage plant and, due to a 2011 plant failure, the plant was at end of life. He reviewed the HDR Study of plant performance including Old Lower Plant generation, lower bulb generation, and bulb only generation megawatt hours (MWh). Economics of project – Option A - rehabilitation of existing units = $7,837,000 Option B - replace = $9,883,000 Mr. Prairie stated Option B was better generation but was too costly in the economic study. He indicated IFP was able to complete the project (Option B) for $7,196,325. It was noted internal resources were utilized as well to keep the costs down. Mr. Prairie stated the takeaways for this project included extreme flows this past spring, flows moderated to more normal during July, and Old Lower Plant was more efficient than bulb at certain flows. He indicated analysis of blade curves and run protocol will continue. Large Single Load Negotiated Rate Agreement Discussion: Mr. Prairie stated Section 8-5-25(E) “applies to all single load customers whose aggregate demands at one or more points of delivery on the same premises exceed 1,000 kW” must be negotiated. He stated the current new load is projected at 2,500 kW and all customer accounts will be served by the new load rate. Mr. Prairie stated IFP was approached by the Idaho National Laboratory (INL) for assistance as they have a number of buildings on the industrial rate. The industrial rate agreement includes maintenance of their own equipment, including 11 transformers. Mr. Prairie stated the INL has requested a change to the commercial rate. This conversion would shift the responsibility for any maintenance/repair in the event of interruption of service to IFP. The cost to the INL for this conversion would amount to an estimated $970,000. This amount would be paid over the course of approximately two (3) years through all BEA accounts. Director Flowers believes this is a good opportunity to serve the INL and will allow possible expansion. She indicated the INL is the largest single load customer. This item will be included on the October 26 Council Meeting agenda. Brief discussion followed regarding future agenda items. There being no further business, the meeting adjourned at 10:38 a.m. s/ Kathy Hampton s/ Rebecca L. Noah Casper CITY CLERK MAYOR 2