Idaho Falls Utility Board Meetings

November 8, 2023 The Idaho Falls Power Board of the City of Idaho Falls met Wednesday, November 8, 2023, at the Idaho Falls Power Boardroom, 140 S. Capital, Idaho Falls, Idaho at 7:45 a.m. Call to Order, Roll Call, and Announcements: There were present: Mayor Rebecca L Noah Casper Board Member Michelle Ziel-Dingman Board Member Tom Hally Board Member Jim Francis Board Member Jim Freeman Board Member John Radford (arrived at 7:54 a.m., left at 10:29 a.m., joined by phone at 10:29 a.m.) Board Member Lisa Burtenshaw (arrived at 7:48 a.m.) Also present: Bear Prairie, Idaho Falls Power (IFP) General Manager Stephen Boorman, IFP Assistant General Manager (AGM) Randy Fife, City of Idaho Falls Attorney Richard Malloy, IFP Engineering and Compliance Manager Josh Roos, IFP Chief Financial Officer Catherine Smith, Community Development Administrator Linda Lundquist, IFP Board Secretary Mayor Casper called the meeting to order at 7:46 a.m. Calendar, Announcements, Events and Updates There was an election discussion, whereby one Council Member was retained, one was re-elected to office and there was a newly elected Council Member who will replace Councilman Hally’s seat for the City of Idaho Falls. It was decided on to swap the UAMPS Annual December Meeting dates with the December Board meeting dates and shorten the December 2023 Special Board meeting to two hours. General Manager (GM) Prairie pointed out the fiber repairs are complete from a recent and expensive squirrel chew in IFP’s yard and gave the status of the Upper Plant’s runner hub refurbishment and electrical upgrades. He reviewed IFP’s City Council consent agenda items and pointed out that residential transformers have stabilized in pricing but now have longer lead-times and mentioned that the price of medium-sized transformers has increased by up to 100 percent. Board Member Hally stated that he’d like to have that item moved to the regular agenda for an explanation to the public. GM Prairie described and demonstrated the type of conductor wire that he is requesting the Council’s approval to purchase to stay on top of lead times. Assistant General Manager (AGM) Boorman talked about the wire reel trailer purchase that will appear on the late November Council agenda and pointed out that the lowest unresponsive bidder has withdrawn their bid. Sponsorship & Advertising Outreach Opportunities GM Prairie explained the importance of keeping Idaho Falls Power’s and Idaho Falls Fiber’s names in the public eye and continue to educate around the energy efficiency opportunities and all the various products and services offered to the community while also being conscious of the costs of this outreach. He explained the marketing/advertising that is in place for the Idaho Falls Symphony, featuring the Mariachi Christmas, with tickets that will be donated to Idaho Fall’s families through local nonprofit organizations with a focus on the Hispanic community which the utility has struggled to engage with. GM Prairie pointed out that there are growing advertising needs for fiber because fiber is in a competitive market. Board Member Radford is interested in advertising over social media and GM Prairie said that social media is also a platform for Fiber’s community connected campaign and has robust social media advertising but is open to doing  November 8, 2023 Unapproved something different if they he has details. Board Member Ziel-Dingman agrees on the importance of educating and informing via advertising, and feels fiber is still very competitive and that IFP needs to continue advertising until the take rate is in the 90 percentiles. There was a discussion on the Zamboni at the Event Center and how effective the fiber/power advertising is for the Spud King’s power plays and other possible advertising opportunities for Zamboni rides, etc. Mayor Casper explained the Frontier Center’s current fundraising campaign strategies. Board Member Burtenshaw said it would be a very small contribution for fiber advertising if there are opportunities. GM Prairie pointed out some instances where he trades services for advertising. Board Member Hally suggested giving customers an opportunity to donate when paying their bills. Mayor Casper noted there could be billing limitations with the current software. GM Prairie pointed out that there is already a donation option when customers pay and that he wouldn’t want to confuse customers with too many options. Board Member Burtenshaw said she is satisfied with having had the conversation. City Attorney Fife gave some clarifications for when the City is speaking and pointed out that power/fiber has a broader place to advertise since it is owned by the City. Peaking Plant RFP Review and Discussion GM Prairie gave a general overview and recap to date. Mr. Malloy explained the evaluative matrix for determining the best bidder and reviewed their bottom-line costs for the project and pointed out the base bid and options that IFP requires. Board Member Francis asked if the bottom-line pricing includes the emissions requirements and Mr. Malloy said he’d cover that in a slide. He reviewed the proposed design models. Board Member Radford asked for clarification on how nine megawatts (MW) of output capability applies. Mayor Casper asked if the bidders provided what was asked for as far as size and design and commented that she was impressed that the military has used ESI Construction for one of their plants and thinks it should be factored into the scoring. GM Prairie, AGM Boorman and Mr. Malloy noted that experience is already a scoring factor. Mr. Malloy showed an aerial of the 136-acre site and GM Prairie explained that the adjacent property owner is willing to sell his property at the original pricing (11-12 acres) to square off and clean up the property lines, which would provide better spur line rail access points. Mr. Malloy reviewed the emissions graphs and explained the treatment methodology options. GM Prairie pointed out that IFP isn’t legally required to provide any treatments based on the Department of Environmental Quality (DEQ) and Environmental Protection Agency (EPA) requirements for the permits/requirements and pointed out that this doesn’t mean we don’t want to do this for other reasons. Mr. Malloy reviewed the emissions control capabilities and reviewed the capital expenditure costs based on emissions control technology options. GM Prairie explained that there will be additional operating and maintenance costs for emissions controls if the Board chooses to go this route. Board Member Francis asked if the emissions output would matter to Idaho National Laboratory (INL) if they eventually joined the research lab. Mayor Casper said she’d expect that INL would follow their zero-carbon commitment but reminded everyone they are not paying for anything on this and are not partnering on this at all yet to do research and cautioned the Board to not let what-ifs cloud decisions on what needs to be done for Idaho Falls Power. Mr. Malloy reviewed costs based on different emission treatments provided by ESI Construction. Board Member Burtenshaw asked if IFP can afford the project and GM Prairie said yes and explained the financing/contracting process that this would not put undue pressure on rates because the utility is already buying expensive power from the market, and this will help offset those costs and should lower costs overall. Board Member Francis asked if ESI’s pricing would increase by adding in treatments and Mr. Malloy said yes, that he’s done his best to compare apples to apples between the bids that included treatment as standard compared to it being an option. He summarized the DEQ air permitting process and timeline and explained that IFP cannot begin construction until permitted. Board Member Francis asked if Lehi opted for the full emission treatment and GM Prairie said yes and AGM Boorman pointed out Lehi is also adjacent to houses in comparison to where IFP’s plant will be situated toward the center of the 136- acre property and where the emissions would be expected to fall off appropriately per regulation. GM Prairie pointed out on the overhead map the easements that could be purchased to bring in the gas line and explained that high pressure gas lines are about the same construction cost as transmission lines ($1 million per mile).  November 8, 2023 Unapproved There was a discussion on the Idaho Transportation Department’s (ITD) road improvement schedule, which may be occurring the same time as the peaking plant’s construction. GM Prairie explained natural gas pricing and pointed out that Idaho Falls straddles two regions whereby pricing could be capitalized upon and reviewed the operating economics chart. He pointed out that gas can be purchased in the forward market as is done for electric to hedge out expected higher pricing in certain seasons/time of the year. Board Member Francis asked for clarification on Lazard’s cost comparisons and GM Prairie said there are a lot of assumptions made in modeling comparisons and gave a realistic example for IFP. He pointed out that while there are varying factors, obtaining peak energy will continue to be a challenge for the entire industry and pointed out that it remains less expensive to create our own energy than relying on a volatile market in a lot of cases and certainly in the market we have seen the past few years, and mentioned that he doesn’t foresee this getting better with the resources being built in the region and dispatchable resource retirements. GM Prairie said that a 10-year depreciation plan, will lower current power supply costs potentially by a million dollars per year, plus, IFP will own the asset. Mayor Casper said the savings seems like a no-brainer and a win-win situation and summed up with; the cost estimates are in and have been compared and the savings are in check. She then reviewed the Board’s options to move forward. AGM Boorman pointed out there are more details to iron out and report back, once it’s decided on to proceed. Board Member Francis is for full emissions package options and seven generation units, because of the economics. Board Members Hally, Radford and Burtenshaw are for full emissions and penciling in the costs and Board Member Radford would like some language that transitions to hydrogen (clean fuels technology). AGM Boorman said we are well-documented to transition to clean fuels technology as that technology becomes functionally and financially viable. Mayor Casper is for six or seven generation sets, whatever makes sense ultimately and with full emissions. She noted there won’t be an official vote until the contract is presented in a public City Council meeting. Board Member Francis wants a vote on the final contract and give the public a chance to hear about the project and voice their opinions. GM Prairie recapped that he is hearing clear support for the plant and to continue fine tuning IFP’s generation needs and its corresponding pricing and bring more details back to the December Board meeting and following Council meeting for a formal action to proceed. Board Member Francis asked if the building design would need to be changed if seven units are chosen and GM Prairie said no. A motion was made by Board Chair Mayor Casper that directs staff to continue to proceed and refine a contract with ESI Construction (based on their proposal), continue to conduct engineering for six to seven units with full emissions, and bring to an upcoming City Council meeting for a formal vote to proceed. The motion was moved by Board Member Freeman and seconded by Board Member Hally. Motion carried with unanimous approval. Board Policy No. 3 – Board Training Mayor Casper asked if there are any concerns about the policy and Board Member Francis asked if anyone was opposed to inviting the newly elected City Council Member to the December 2023 Board Meeting. There was no opposition and no suggestions to revise the policy. Board Training Plan & Board Schedule GM Prairie and Mayor Casper reviewed drafted board schedule and organizational membership meetings for 2024. There were no scheduling conflicts for the meetings at this time and Mayor Casper said the Board schedule will be further considered at the December 2023 annual calendaring meeting. She noted that dates could possibly be revised due to known or identified Council conflicts or travel schedules, vacations, etc. Board Self-Evaluation Process Review Board Member Radford stated that the Board has been refining the survey for the past few years and that he continues to bring the survey questions for Board review every year for refinement and suggested that  November 8, 2023 Unapproved now is the time to offer needed changes. GM Prairie gave the timeline to distribute and take the survey, and then compile the results ahead of the February Board review. Board Member Radford would like a comparison from the prior year in the final review. Mayor Casper would like to add open ended comments to each question and at the end. She gave an overview of what to expect in this afternoon’s Special Council meeting and asked for the Board’s approval to have the Board Secretary to take notes, and invite the City’s Public Information Officer, Assistant City Attorney, the City Economic Development Administrator, and IFP’s senior staff. GM Prairie advised that the Board needs to register for event in order to receive the meeting link. IFP Strategic Planning The Board continued to discuss and refine the IFP Strategic Plan. They worked through the Enabling Capabilities and Strategic Opportunities sections and will begin the next session with Aspirations 2028. Utility Reports Safety Metrics – GM Prairie said there will be a third section added to the safety metrics graph moving forward and explained the reasoning for it. Fiber – GM Prairie pointed out that fiber continues to move forward at a fast pace with about a 33% overall take rate and would like to grow over the next years to a 65-70% take rate as a stretch goal, but is still attainable and noted that the system is very scalable for future growth. AGM Boorman added that the utility has had a great fall construction window. Funding Grants - GRIP Grant – GM Prairie explained that most of the federal awards went to wildfire and hurricane mitigation projects and added that this was the first of three rounds of funding and noted that IFP is in a good position to pursue future funding calls. He said that IFP was encouraged by Department of Energy (DOE) to submit a full application for a long-duration battery storage call they put in on. He gave an update that the crews were working ahead of schedule on the alley demolition and refurbishment yesterday in the downtown area of Idaho Falls. Organizational Membership Reports PPC – GM Prairie stated that overall, he is adamantly opposed to entering California’s organized market any further and especially if they want to go full Regional Transmission Organization (RTO) due to governance concerns with the California Independent System Operator (CAISO) being governed for the benefit of California and no other members per se. He said the Bonneville Power Administration (BPA) Administrator will review all comments and release a final record of decision in the Spring 2024. Energy Northwest – GM Prairie said they are asking for BPA customers to put money together for a small modular reactor (SMR) study. Fish – GM Prairie said the White House continues to push on breaching the dams and to distrust the science and noted they are putting pressure on the National Oceanic and Atmospheric Administration (NOAA) fisheries to refrain from commenting. There being no further business, the meeting adjourned at 11:48am. s/ Linda Lundquist s/ Rebecca L. Noah Casper Linda Lundquist, BOARD SECRETARY Rebecca L. Noah Casper, MAYOR