Idaho Falls Utility Board Meetings

November 14, 2019 The Idaho Falls Power Board of the City of Idaho Falls met Thursday, November 14, 2019, at the Idaho Falls Power Conference Room, 140 S. Capital, Idaho Falls, Idaho at 7:00 a.m. Call to Order, Roll Call, and Announcements: There were present: Mayor Rebecca L. Noah Casper Board Member Thomas Hally Board Member Jim Francis Board Member Shelly Smede Board Member Jim Freeman Board Member John Radford (arrived at 7:02am) Board Member Michelle Ziel-Dingman (arrived at 7:02a.m.) Also present: Randy Fife, City Attorney Jace Yancey, Idaho Falls Power (IFP) Operation Technology Manager Darrin Blaisdale, IFP Senior Systems Analyst Lincoln Beard, IFP Senior Meter Technician Journeyman Pam Alexander, Director of Municipal Services Josh Roos, Treasurer Joelyn Hansen, IFP Customer Relations Supervisor Bobbi Wilhelm, IFP Energy Analyst Richard Malloy, IFP Hydropower and Utility Regulatory Compliance Manager Linda Lundquist, IFP Executive Assistant Mayor Casper called the meeting to order at 7:01 a.m. with the following items: Calendar, Announcements, and Events Update: Mayor Casper shared the Utah Associated Municipal Power Systems (UAMPS) directory and asked that Council review and update it with current information. She led a discussion about an announced addendum to an agreement between Governor Little and Attorney General Wasden on the Legacy Waste Management at the Idaho National Laboratory (INL) and noted that it will be a important step forward from the 2014 WHIP shutdown, which caused a significant deadlock in the cleanup. Mayor Casper stated that it’s been a trial and error process with scientific hurtles to overcome and continued to say that we can’t keep having arguments about legacy waste. Board Member Hally shared, that people including Jack Zimmermann have done a really good job overall on the cleanup, but he is being transferred to the Cincinnati field office. He continued to announce that Connie Flohr will serve as the Acting Field Director in Idaho and is very pragmatic and comes with a lot of Department of Energy (DOE) experience. Mayor Casper added that Idaho Consumer-Owned Utilities Association (ICUA) has taken some legislative positions and when we’re closer to their January conference, more information will be available on the topic. Updates from Board Members: Board Member Hally announced the Association of Idaho Cities (AIC) 2019 Fall Academies’ Training will occur this year at the Shilo Inn on December 12, 2019. Board Member Francis mentioned that INL periodically conducts tours for the public and thinks it’s a good option to keep current with what they are doing. He led a discussion on what the implication of the settlement in Pocatello might have or mean and thought a recent reporter’s article on the case may have been confused by the payment in lieu terminology, as the article was confusing. Attorney Fife stated that when a city sets their rates, that they have to be set 1  November 14, 2019 reasonably and that they cannot make a profit from them. A utility has a little more leeway when rate setting, as they can establish an exact cost of service. They can build in labor, appreciation and future planning costs. He continued, that it was his understanding that Pocatello decided they were going to make a profit. He said that this utility could give things away, like raffle off refrigerators, etc. and build that back into the rates, but what cannot happen is payment in lieu as a way of infusing money into the fund, as that would be illegal. Pocatello was trying to use it as a general fund revenue. They have done this several times and have lost in court. Attorney Fife continued that he has worked with IFP to ensure transfers are right-sized, so they can’t be used as a purse to hide fees. Idaho courts say you can either have a fee or a tax. The concept is – cities cannot generate money, cannot over charge or tax to make money, because it becomes an illegal tax. The City of Idaho Falls is well within the parameters of the law, and legality is determined by the courts. Board Member Hally stated that we have good accountants for safe costs. Attorney Fife followed up that we should have a regular review of our rates methodology and model by an outside entity. Mayor Casper continued that we have put a lot of effort into our rate setting and how we establish our rates and agreed that the reporter may have misunderstood the meaning of Payment in Lieu of Taxes (PILOT). Board Member Radford announced that the American Public Power Association (APPA) put out a nice statement around municipalities taking over private, for-profit utilities. The key benefit would mean eleven percent cheaper electricity rates and noted that it was posted on Facebook. He continued that Austin, Texas, has a 454 million budget, a 900 million operation revenue and a general fund worth 100 million dollars and noted that Idaho is much more succinct and better for rate payers. Board Member Hally stated that public utilities have adjusted better to pricing. Mayor Casper concluded that a speaker will be attending a planning session to talk about fire issues and what is going on with Pacific Gas and Electric (PG&E). Metering System Overview: Jace Yancey, IFP Operation Technology Manager stated that there are a number of different areas of focus with the utility. He introduced Darrin Blaisdale, IFP Senior Systems Analyst and Lincoln Beard, IFP Senior Meter Technician Journeyman. Mr. Yancey stated that we have many different systems and how they integrate with each other. He explained the benefits of the Advanced Metering Infrastructure (AMI) and how the system works with and benefits the outage system. The metering department has three employees handling all of the new meter installations. The deployment began in 2012 and are currently installing the newest round of meters, which have a capacitor that can hold for five minutes before it reports an outage. This feature saves a lot money on dispatch prematurely sending trucks out on calls. He continued to say that the utility has had AMI meters for a number of years and the initial meters were to get load profiles for customers, remote meter reading, and to roll out remote disconnects in certain areas. The utility has spent a lot of time in the last two years getting into needed areas of town. He added that the utility continues to troubleshoot and address issues including theft. Mr. Yancey talked about how AMI and fiber work together, specifically how information is collected from houses and sent to data collectors (gate keepers). Board Member Hally asked if the gate keepers where on light poles and Mr. Yancey answered that, yes, that there are about 100 white radio devices in the City on light poles. He continued that the network is very extensive and costly to maintain and that staff is continually fine-tuning it. Board Member Radford asked if Public Works’ water meters will be tied into the electric meters. Mr. Yancey stated that both meters will use the same system but not tied to electric meters but our system will read both electric and water meters. Board Member Hally asked if customers can control the meters when away from home. Mr. Yancey said that customers can be provided with data and initially in the pilot stage, some smart appliances were tested, but that customer energy usage data can be provided to the customer, but they do not interface or “control” IFP meters or equipment. Board Member Francis asked if the systems were compatible and Mr. Yancey answered yes, that the utility has created a communication network and that the water and electric meters are all purchased from Honeywell. Mayor Casper added, that while the City doesn’t currently meter water, it is something to be aware of in the future. Mr. Beard stated that the biggest issue will be the infrastructure 2  November 14, 2019 as each gate keeper is allowed a certain number of devices and as we add water meters, we will have to add more gate keepers. At some point, there will have to be a cost-share between the departments. Mr. Yancey pointed out that the utility has already provided the water department with fiber and that they have been using it for the Water Department’s Supervisory Control and Data Acquisition (SCADA) system for a few years now and added that the utility has a great working relationship with the water department. He continued that the ultimate goal as fiber progresses is to have the gate keepers connected with fiber instead of wireless, but that we are a few years away from implementing all areas. Mayor Casper added that this is one reason why we need fiber across the entire City. There was a discussion about the presentation slides showing how the network communicates. Mr. Yancey continued saying that the AMI business functions that have implemented prepaid options in other areas have been very successful and will be good for nonpayment situations for our City, where remote disconnect can turn on and off meters. He added that there are about 14,000 remote disconnect meters installed throughout the City that would facilitate a prepay option if it were to be implemented. There was some discussion on how the meters work and if the City is upgrading all the meters and at what cost. Mr. Beard added that meters currently do not have the ability to talk to appliances in homes. Board Member Hally commented on how remarkable the technology is with the new meters. Mr. Yancey concluded that Idaho Falls Power is on the cutting edge of technology, especially when he is still seeing utilities with 80-year-old relays on their systems and added that the City has many advantages with being smaller and having an infrastructure that is second to none. With microgrids, metering will flow both ways and will accept solar with some reprogramming. Outage Management System (OMS) Overview: Mr. Yancey stated that Geographic Information System (GIS) and Outage Management System (OMS) go hand-in-hand. The City has a very good GIS system and has been in a partnership with Public Works for a long time. He gave a brief overview of the mapping system. Mr. Blaisdale explained that the maps help us to predict outage locations and to prioritize restoration efforts as far as which crews are going where, first. The system is also able to give us an idea of how long it will take to get large-scale interruptions back online. He showed how the OMS sits on top of the GIS system and ran an outage simulation to illustrate how dispatch knows what areas are without power. He added that for reliability, the maps have to be maintained consistently and fed with correct information. Board Member Hally asked if the information goes to dispatch and Mr. Blaisdale answered, yes, and added that dispatch uses the data to know where to send crews. Mayor Casper acknowledged the system’s ability to send email messages to staff on the notification side, and asked will it ever send texts to customers? Mr. Yancey answered that there are other systems to call the customer back if implemented. Mr. Blaisdale added that technology is changing rapidly and that artificial intelligence is another level of future advancement. Board Member Hally stated that instant information in the financial world can equate to instant profit and Mr. Blaisdale concluded that in the case of our utility, instant information equates to instant savings. Supervisory Control and Data Acquisition (SCADA) Upgrade and Overview, Cybersecurity: Mr. Yancey stated that the SCADA system is managed out of Eaglerock and operates 24 hours per day, seven days a week. He added that the Cooperative Response Center Inc. (CRC) is the utilities’ afterhours, weekend and holiday answering service. Board Member Freeman asked how that has been going? Joelyn Hansen, IFP Customer Relations Supervisor replied that, IFP is still working with CRC on a few snags with regard to other City departments, but commented that the partnership with Electric is working very well as customers are getting quick responses, the utility can handle more calls, and that CRC has helped internally with staffing and vacations. Mr. Yancey continued to say that in early 2000, SCADA had roughly 30-40 data points that Eaglerock monitored. Currently, IFP is in the middle of a software/hardware upgrade and is monitoring roughly 3500 data points. With fiber being connected to all facilities, communications are now very quick. Board Member Hally asked if the Federal Energy Regulatory Commission (FERC) looks 3  November 14, 2019 at this information? Mr. Yancey answered some of it, and added that they may request historical data. Board Member Dingman asked if we provide standardized reports to other departments? Mr. Yancey replied that we do not provide SCADA reports to other departments but could if needed. He demonstrated what the dispatcher sees on the monitors at Eaglerock, which is the run of the river from the upper plant to GEM state and added that the FERC license is a run of the river system, constantly monitoring the value of the river. Board Member Hally asked if it measures the water temperatures and Mr. Yancey replied, yes that it can monitor when a plant will freeze over and how carefully the river has to be monitored in the irrigation season. Board Member Hally asked what kind of maintenance is required and how often are the system upgrades? Mr. Yancey replied that there is not a lot of maintenance and that the system upgrades about every five years with a cost this time of $135,000 to $140,000 dollars and added that this year we went from physical to virtual boxes. He continued that we are currently in the middle of an upgrade and we’re testing all data points. He continued to say that with each upgrade, we try to implement additional features to help our dispatchers. Mr. Yancey invited those present to visit the control room. Board Member Freeman asked what the backup system is during the upgrade? Mr. Yancey replied that when we cut a site over to the new system, we always have the ability to switch back to the old system if needed and that staff stays onsite until all points are tested and functional. Board Member Radford stated that we are fortunate to have a cybersecurity team and it is his understanding that SCADA is a “dry-dock for foreign interests”. He stated that the cyberteam said, “If a foreign military power wanted to get into the system, we couldn’t do anything about it.” He added that, we’re at risk, only if it would benefit a foreign power to come after us. Mr. Yancey concluded that a sponsored attack is difficult to defend against. In the case of Ukraine, they had engineers that actually had access to the system. We’ve leveraged the Idaho National Laboratory (INL) in ways we can, for example, we bring in a cybersecurity expert anytime we do an upgrade to oversee our processes. Mr. Yancey said that cybersecurity is a single point of failure and that it started taking shape in 2007 for our utility and added that it’s very expensive to maintain and that the utility gets a significant benefit from our INL relationships. Fiber Update: Mr. Yancey announced that the fiber rollout is going very well and that the biggest issue is keeping up with the new installations. He added that staff is really digging in to make it work and constantly changing their processes. The weather has been very cooperative the last two weeks. He added that there are 377 contracts in as of today, with an average of three to five new contracts daily. By the end of next week, he expects to have over 400 fiber contracts. 24 percent of customers have signed up with another ten percent in progress. There was a 34 percent take-rate from the underground pilot neighborhood and a 14 percent take-rate from overhead. He asked what everyone has been hearing from the community. Board Member Freeman said most of what he hears is, “When can I get it?” Mayor Casper asked if we’ve mapped out where we are going next with fiber, and if we look at where people are signing up and if it is worth promoting the pre- sign up? Mr. Yancey stated that if you enter your address on the website, it will prompt you to fill in your information so that the system can notify you when fiber is in your area, and added that we are looking at pre-sign ups. He continued that for next year, we have areas already defined based on our fiber hut locations and that we plan on adding an additional fiber hut in a substation. He said that we are working with a number of customers including some on the Westside that need their electricity replaced and that engineering is working on that area. The goal is to get working in their area and get the huts in. Board Member Hally asked if the ground is better for digging on the Westside and Mr. Yancey replied yes, that it is much softer and added that any digging will take place between April and September 2020. Board Member Radford added that he would be cautious on using Stone Brook as a model for take rates, because they had a lot of support from their board. Mayor Casper concluded that our marketing should include some education as to why our City needs fiber and also asked if we were on target with our financial plan with spending and revenue coming in. 4  November 14, 2019 Review Utility Billing and Disconnect Policy: Pam Alexander, Director of Municipal Services reported that she has completed a lot of work between the departments in sorting out billing issues. Josh Roos, Treasurer started a new disconnect policy Oct. 1, 2018. Prior to that date, the policy was to send out the first billing and if it went unpaid, a second bill would be sent out, followed by a letter after 60 days of nonpayment. That letter would give the customer 11 more days to pay. If the customer still did not pay it could run up to 90 days before they were disconnected for nonpayment. In 2018, there were 3,343 electric disconnects. After the new policy in 2019, there were 9,526 electric disconnects. Ms. Hansen stated that people would generally stop paying their bills in September or October, hoping to catch up when the Energy Assistance Program becomes available on Nov. 1. Idaho Community Action Partnership (EICAP) designed the program to assist community members that struggle with paying their electric in the winter months, but what the utility has been noticing is people use the assistance to get caught up. Ms. Alexander added that they’ve worked as a team to revamp the donated funds plan. Board Member Francis asked how often the City delivers money to the plan and Mr. Roos answered, monthly. Ms. Alexander continued to say that new policies do change behavior over time. Ms. Hansen added that there has been a reduction of customers with bad budgeting practices and that the utility has changed the way autopayments are handled to make it easier for customers. Board Member Freeman asked if the fees are rightsized and Ms. Hansen answered that they are and most of the disconnects are remote. Mayor Casper stated that even though we see a downward trend, it may take a couple of winters to change behavior. Ms. Alexander said that one of the things the team works on, is that all of the customers are treated the same. Ms. Hansen stated that the City is seeing some positive changes and pointed out that the departments have been working together on changing how the utility bills look by making it more understandable and clarifying some of the graphics. She continued to say that when the new policy started, there were some very indebt customers to the City and as of today, there are not as many escalated calls from angry customers. Board Member Radford asked what the City’s process is in evaluating the changes staff is seeing? He continued to say that the purpose was to get people to pay their bills and not to disconnect huge amounts of customers. He said he is worried that the City is collecting fees and not changing behavior. Mayor Casper said that it takes a while to change financial behavior. Ms. Hansen suggested that we look at one more year of data to see change in behavior. Board Member Radford said that he voted for this to stop behavior but the numbers are growing. He continued to say that if we’re not having less people disconnected, how is it benefiting rate payers? Board Member Hally stated that change is slow. If you look at 2018, there should have been more disconnects. Board Member Radford asked when we should relook at the process? Board Member Freeman stated that less people are going into collections. Mayor Casper said that the trend is good. Board Member Francis suggested that in one of the studies, we have to investigate the cause. He added that we’ve improved our communication and, in another year, we’ll know more. Ms. Alexander stated that the disconnect percentage difference from 2018 to 2019 is not very high, maybe a percent or so. Board Member Radford asked if the percentage included water and electric and Ms. Alexander stated, yes. Board Member Hally continued to say that it is hard to compare 2018 with 2019, as the means of communication is different. Randy Fife, City Attorney stated that when the policy was proposed to City Council, the new policy was compared with what big utilities do. Utilities like Idaho Power and Rocky Mountain Power, where their policies are approved or allowed by the Public Utility Council (PUC). Mayor Casper said this policy is not a revenue generator, and not out of line with what other utilities do. Board Member Hally stated that we really want to target the people that have the money, but just don’t want to pay, and at the same time help balance the system and educate the community about the programs that can help those that can’t pay. He continued to say that we want to make sure we market in the best way possible to help the best ways we can. Ms. Hansen stated that the prepay option is the way we want move forward. It sizably reduces the debt owed to utilizes, but the main problem with implementing prepay is our current software. Board Member Freeman asked if a customer prepays $100 and uses it all up, is there a 5  November 14, 2019 charge for a disconnect or reconnect? Ms. Hansen answered, no. Board Member Hally mentioned that many of these customers are residential, but how many are LLCs that don’t pay and then file for bankruptcy? Ms. Alexander stated that improvements have been made to the write-off policy and that write-offs have been recategorized to identify residential and commercial. Ms. Hansen added that commercial customers pose a more complicated process to shutoff. Mayor Casper suggested to conclude the conversation. Board Member Radford asked why prepay is without penalty? Ms. Hansen clarified that customers that are turned off currently, have used electricity that has not been paid for, versus prepay customers can only use what they’ve already paid for. Ms. Alexander added that many services are eliminated with electronic disconnect. She continued to say that based on feedback, Electric, Public Works and Municipal Services want to clarify language in the City’s Fee Resolution Ordinance and will be presenting to Council in the near future, with further discussion at the director’s meeting. Mr. Roos concluded by stating, despite the huge increase in disconnects and fees charged, he is very optimistic that payment behavior will improve. Review Customer Satisfaction and Fiber Surveys: Ms. Hansen embarked on a customer outreach program to identify why people aren’t connecting to the fiber network despite sending out mailers and utilizing door hangars. She conducted a ten question in-person survey at two different times of day, resulting in 20 completed surveys between the 18th and 21st streets. Her observations were, 14 of the 20 didn’t know that Idaho Falls Fiber (IFF) was a public entity, this older area of town has many mature residents and rentals, and most people polled were satisfied with their Internet service. Ms. Hansen suggests improving the education about IFF and IFP and moving forward will look for neighborhood influencers. She will reach out to landlords and ask them to install internet boxes, which will create infrastructure for the next renter, making sign ups easier and less expensive. In January, the City infrastructure rate is planned to be reduced from $30 to $25. Board Member Hally suggested that the Secretary of State may be able to indicate which neighborhoods have Home Owner’s Associations (HOAs) and asked if the utility has considered using billboards in their marketing. Ms. Hansen said that in the new advertising rollout, that billboards may be utilized as well as the possibility of a fiber vehicle that will be equipped to simulate fiber installs and help educate the community. There was a conversation about Internet speeds and costs charged by providers and which providers are gaining the most customers. It was identified that prices aren’t as much a driving factor as local companies are when it comes to customers choosing a provider. Bobbi Wilhelm, IFP Energy Analyst presented the current customer satisfaction survey that is underway and how it and the new disconnect policy impacts EICAP. She reviewed the pros and cons of past surveys and stated that moving forward, it might be better to conduct bi-annual instead of annual surveys. She continued to say that the survey calls will be completed by Nov. 25, 2019 with a full report due out in December. Board Member Radford asked if messages are being left for residents and Ms. Wilhelm replied, yes. Eastern Idaho Community Action Partnership (EICAP) Update: Ms. Wilhelm stated that according the Asset Limited, Income Constrained, Employed (ALICE) report, 41 percent of Eastern Idaho families can barely meet their needs and in the past, it was fairly difficult to access the Project HELP funds and continued to say that the funding policy has been revised to be easier administered by EICAP and allow for more people to utilize the funds. She stated that the average monthly balance of the Project HELP is much lower in 2019 compared with 2017 and 2018 due to Project HELP policy changes and not due to disconnects. Board Member Radford asked how many people have been helped with these funds? Ms. Wilhelm answered, that 84 households were served from January to September 2019, compared with 86 households the year prior and that the average past due amounts have slightly decreased from $330.81 to $283.00. She continued to talk about the state funded Low Income Heat 6  November 14, 2019 Energy Assistance Program (LIHEAP) and how they interpret crises differently today than in the past. Now you can get help to either pay your bill or to buy a more energy efficient furnace. Board Member Freeman asked if the state administers those funds and Ms. Wilhelm replied that EICAP assists families with this fund as well. Mayor Casper thanked Ms. Wilhelm and shared that Ms. Wilhelm is on the Board of EICAP. Overview – Hydro Relicensing Process, Kleinschmidt: Richard Malloy, IFP Hydropower and Utility Regulatory Compliance Manager stated that the utility has engaged the Kleinschmidt Group to develop a detailed relicensing plan with activities to begin next year and efforts ramping up in 2023. He said that the Bulbs and GEM State will relicense as one project. Board Member Radford asked about a statement of qualifications and Mr. Malloy said that yes, a Request for Qualifications (RFQ) had gone out and that the utility wants to find the best qualified company to address its specific needs and that Kleinschmidt was the only applicant that came onsite and gave a thorough proposal. He reviewed the laws and regulations pertinent to the relicensing process and talked about why the process is so onerous with the Federal Energy Regulatory Commission (FERC). Mr. Malloy pointed out that there are over 40 comprehensive plans approved by FERC, and that at least 20 will apply to this project and how equal consideration has to be given to competing interests. Board Member Radford asked if there was pressure on us since we are not in river runs? Mr. Malloy answered that runs aren’t pertinent to us as we are “run of the river”. He continued to say that there are about 49 stakeholders that have an interest in the river. Board Member Francis asked if Kleinschmidt stays with us for four years and Mr. Malloy replied yes, that is his expectation. Mayor Casper asked if Mr. Malloy recommends leveling this process so that it doesn’t have to go into the annual budget every year and Mr. Malloy replied that he is working with Bear Prairie the IFP General Manager on the issue of budgeting. He continued to say that the current contract is a not-to-exceed amount of $70,000 and should come before City Council on Dec. 12, 2019 for consideration. Mayor Casper asked where Kleinschmidt is based and Mr. Malloy stated that this is a national company. Mayor Casper added that this utility often requires national expertise. Mr. Malloy reiterated that a local firm did apply to the RFQ, but the contract was awarded to Kleinschmidt, who is much more qualified and added that they will shepherd the process in preparing documentation that has to go to FERC. Board Member Hally asked if they assign one person to the contract and Mr. Malloy answered yes, that we will have a contact. Mayor Casper asked if Kleinschmidt has been approved by the City Legal Department and Mr. Malloy answered yes, that legal has reviewed and approved the contract. Board Member Radford asked if Municipal Services gets involved and Mr. Malloy replied no, that he will take the lead on the process. Mayor Casper asked Mr. Malloy to explain his background. There being no further business, the meeting adjourned at 10:48 a.m. s/ Linda Lundquist__________________________ s/ Rebecca L. Noah Casper_______________ Linda Lundquist, EXECUTIVE ASSISTANT Rebecca L. Noah Casper, MAYOR 7