Idaho Falls Utility Board Meetings

February 7, 2024 The Idaho Falls Power Board of the City of Idaho Falls met Wednesday, February 7, 2024, 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 Jim Francis Board Member John Radford (Via Zoom) Board Member Jim Freeman Board Member Lisa Burtenshaw (Arrived at 7:52 a.m.) Board Member Kirk Larsen Also present: Bear Prairie, IFP General Manager (GM) (Joined via Zoom at 8:40 a.m.) Stephen Boorman, IFP Assistant General Manager (AGM) Michael Kirkham, City of Idaho Falls Attorney Mike Squires, UAMPS Director of Government Affairs (Joined via Zoom at 8:30 a.m.) Josh Roos, IFP Chief Financial Officer Alan Cunningham, Design Services Manager Eric Grossarth, City Public Information Officer (PIO) Catherine Smith, Economic Development Administrator Richard Malloy, Engineering and Compliance Manager Linda Lundquist, IFP Board Secretary Mayor Casper called the meeting to order at 7:47 a.m. Calendar, Announcements, Events and Updates Mayor Casper reviewed announcements and mentioned there are two conflicts with Idaho Falls Power’s (IFP) Board calendar. It was determined that March 13, 2024, and August 7, 2024, are good dates to expect a quorum. She attended the Line Commission’s meeting last week where it was pointed out that energy transition is very challenging and according to Utah Associated Municipal Power Systems (UAMPS), Chief Executive Officer Mason Baker, a path to nuclear is still viable and pointed out that UAMPS’ role would be through power purchase agreements and not as owner. Mayor Casper announced an upcoming Nuclear Development Forum in Kennewick, Washington that is drawing much attention from local Washington legislators. She said the Idaho National Laboratory (INL) is hosting an international conference at the end of February. Board Member Freemen mentioned a visit that he and General Manager (GM) Prairie had with Fall River’s elected Board, whose focus is finding appropriate resources. There was a discussion about Representative Simpson’s local support of INL and the Department of Energy’s (DOE) research projects. Board Member Radford pointed out that the Connecting Us Sustaining Progress (CUSP) should continue to make Idaho Falls an attractive place to live and work. Mayor Casper reminded the Board that she, GM Prairie, and Board Members Radford and Freeman plan to attend the upcoming 2024 American Public Power Association’s (APPA) Legislative Rally in Washington D.C. at the end of the month. Regarding transformer legislation that APPA is involved with, Assistant General Manager (AGM) Boorman commented that transformers continue to be on an 18-month delivery schedule and pointed out that is at least 6 months longer than has been typically bid. Board Policy No. 2 (City Council Acting as IFP Board) Review AGM Boorman said there were no new comments/edits to the policy. Board Member Francis said he wanted to make sure the Board is adopting policies discussed in meetings and asked if the agenda is developed by  February 7, 2024 the Mayor and Council President. Mayor Casper explained the process of setting the agenda and said to bring topic ideas to her and/or the Council President and they will meet with GM Prairie about putting items on the agenda. Federal Legislative Update UAMPS Director of Government Affairs Mike Squires congratulated the City of Idaho Falls Council Members and Mayor on having received the Milken Institute award for Best-Performing Small City for a third time. He gave the status of the 2024 Republican Primary and pointed out the issues that he is monitoring, which include candidate endorsements and fundraising priorities. He mentioned an unprecedented move by the Republican National Committee (RNC) Chair to nominate a candidate after only two primaries had been held. He reviewed the next two state primaries and predicted a high turnout in support of Donald Trump. He expressed his opinion that political parties are searching for their footing and that voters are searching for a party. Mr. Squires mentioned that energy-related issues aren’t being debated nearly as much as issues like the border, taxes, and abortion. Board Member Burtenshaw mentioned the last energy crisis of the 1970s and pointed out that there are quite a few generations of voters who have not ever experienced an energy crisis. Mr. Squires gave an update on issues currently before Congress, reviewed the schedule for the upcoming 2024 APPA Legislative Rally, and mentioned some legislators won’t be in session in D.C. at that time. Board Member Radford mentioned that he’s noticed many voters are motivated over the abortion issue and Mr. Squires said a strategy for Democrats would be to put abortion on the ballot in as many states as possible, especially the swing states. Mayor Casper asked if all Board Members could be on the APPA Rally preparation call and Mr. Squires said he would extend the online invitation. Board Member Francis asked if there is evidence of bipartisanship on energy issues. Mr. Squires said Congressman Peters has been leading a bill and mentioned that very positive conversations have been taking place and that he will continue to do follow-ups. Peaking Plant Update AGM Boorman gave the general overview/timeline and said the plant’s construction agreement with ESI will be on the Council’s agenda later this week. City Attorney Mike Kirkham explained the negotiation and cost-sharing elements of the agreement. AGM Boorman reviewed the scoring sheet for the build agreement and noted that the scoring totals are relatively the same four months into the project as they were when first reviewed. Mayor Casper noted that ESI has significant advertising space in the Mountain America business center. Board Member Freeman asked what the ten percent (10%) contingency is for, and Mr. Malloy stated there is language in the agreement that states that ESI must first have a conversation with IFP before their contingency money can be accessed which is separate from the ten percent (10%) added by IFP in the event of additional changes requested by IFP. GM Prairie added that ESI is working to expand their business in Idaho Falls and Mr. Malloy added that ESI has opened a local office in town. AGM Boorman continued to run through the build timeline with construction to begin this summer. He explained the easement progress and the work thus far with Intermountain Gas to bring in the gas line (4400 feet, 6-inch-high pressure, steel casing) and pointed out that landscaping and road improvements will be required also by the county. He said to also keep in mind an eventual substation may go on the site as needed. Mr. Cunningham clarified that $75,000 is the cost of the easement and $1,400,000 is the projected cost to build out the line but that IFP will get billed based on the actual cost. Mayor Casper pointed out the site is being built for expansion/partnering/research, etc. Board Member Francis asked if the project would be bonded and if so, for how many years, and AGM Boorman said the Idaho Energy Resource Authority (IERA) would likely handle the bond and would likely be for 15 years. He added that IFP would have a power purchase agreement for the plant, which is constitutionally allowed in Idaho for power sales and transmission contracts. Board Member Francis asked about sewage and AGM Boorman said the plant doesn’t have wastewater needs beyond a couple of bathrooms which a simple septic can handle, and Mr. Cunningham clarified that he has met with the county on the civil plans. Board Member Francis asked Mr. Grossarth if this project has been run through the Public Outreach Planner (POP) and Mr. Grossarth said he had run it  February 7, 2024 through POP and pointed out the project is currently at the informing stage (level three) and thinks the focus on messaging should be the cost and explaining the reasoning for the plant is to keep the rates low. Mayor Casper and Board Member Freeman added that reliability should also be a focal point and Mayor Casper explained that when bonding projects, everyone pays for it over a period of time. Board Member Francis said he knows of only one feedback concern about carbon emission and that people who have concerns should be purchasing energy credits (green energy) and agrees that the messaging should be crafted as a benefit to the community. Board Member Larsen reiterated that the cost of the project needs to be included in the messaging to increase/address the trust and confidence factor and Mr. Grossarth said most concerns that he is aware of are about the cost. Board Member Francis asked if IFP’s portfolio would still be considered carbon-free and AGM Boorman explained that this would be generation that IFP owns and controls and could depend on how much the plant gets run versus how much energy is purchased on the market and added that IFP’s portfolio would likely remain in the 90s. Board Member Francis pointed out that IFP is still leading the nation in low-carbon emission portfolio. Board Member Ziel-Dingman said the City of Idaho Falls has a story to tell; comparing past leaders being wise to invest to today’s leaders having the same courage to invest in the city’s future. Annual Service Policy Review AGM Boorman reviewed the Service Policy updates and pointed out that language has been added regarding electric vehicle (EV) charging infrastructure and recommends that new construction add conduit in the ground. He said the annual contractor meeting is scheduled for March 12, 2024, when the service policy is reviewed. Mayor Casper said she’d like to see specific language in the policy be consistent with other city departments. There was a discussion regarding the city’s building department and if at some point, would they require contractors to install EV infrastructure. Board Members Francis and Ziel-Dingman said they felt that stronger language was needed that requires contractors to stub out the conduit. Mr. Cunningham explained that if a contractor opts out of installing conduit (despite IFP’s recommendation to stub it out) at the time of build and a charging station is later needed, the expense of the conduit installation is the responsibility of the contractor. AGM Boorman pointed out that it won’t change the charging rates either way but could save the contractor money on the front end. He added that IFP shouldn’t conflict with contractors by requiring they stub out conduit as it’s the property of the owner but noted that it is IFP’s job to point out the course of action because charging stations will likely be needed in the future. Board Member Francis said he would like language added that stipulates, “may require”. Grants Update Chief Financial Officer (CFO) Josh Roos reviewed the status of the Federal and State funding grants that have recently been applied for and explained that round one of the Grid Resilience and Innovation Partnership (GRIP) was denied, but that IFP is going after round two and pointed out that the Ferguson Group has been hired to help with the application as they’ve had much success in getting many of their clients awarded. Mr. Roos said the Department of Transportation (DOT) Charging and Fueling Infrastructure grant was accepted and explained that charge sites have been identified in Idaho Falls and that the IFP engineering group is working on the design. Board Member Freeman asked if there are building time limits and Mr. Roos said a timetable was given when the application was made. Board Member Radford asked if these are pay-for-stations and if a vendor/contractor has been chosen and Mr. Roos said the stations will be paid-for-charging and said there will be a request for proposals (RFP) going out later in the year for the vendor/contractor to construct the stations. Mayor Casper asked if IFP’s match for the grant is in the budget and Mr. Roos said the budget request will go before City Council in March. Mr. Roos pointed out that the Office of Energy Management Resources (OEMR) downtown alley project was recently completed and pointed out there was $300,000 remaining in the grant and said that OEMR is allowing IFP to use the money for other downtown projects. He explained that round-two funding is underway and if awarded, would complete the rest of the downtown work. Board Member Freeman suggested the city hire  February 7, 2024 more grant writers or form a grant writing department and Mayor Casper and Board Member Larsen agreed more staff would free up regular staff from the grant writing and the reporting requirement process. Q4 Financial Report Mr. Roos reviewed IFP’s financial statement and pointed out that the utility and accounts are what customers have consumed but haven’t paid yet because the statement falls between billing cycles. Board Member Freeman asked what the packing plant payment status was, and Mr. Roos said their financial officer was on board to make the remaining payments on schedule. Board Member Francis asked what the compensated absences are, and Mr. Roos said it is sick pay if it had to be paid out all at once. Board Member Larsen said he noticed a bond payable net that wasn’t there last year, and Mr. Roos explained this is the remainder due and commented that the interest rate was so low that IFP is making money at a higher percentage rate. He reviewed IFP’s income statement and noted the income is much higher than last year’s due to a very cold winter and continued load growth. He explained why expenses seemed so much higher this year than last and said he’d found that finance hadn’t added in $8 million of appreciation. reviewed Idaho Falls Fiber’s (IFF) financials. Board Member Freeman asked if the added fiber positions will return to power, and AGM Boorman explained the expected retirements/attrition and other employee plans to return to power and Mr. Roos pointed out the remaining employees will still be needed in fiber. Mr. Roos said IFF’s take rate is about thirty percent (30%) and is getting close to 8000 fiber customers. (There are about 24,000 residential customers.) Mr. Roos reviewed IFP’s cash flow and attributed the jump in cash flow to the loan repayment from the airport and bond drawdown. Board Member Francis asked if there is national proof for time-of-use billing bringing down the peak and AGM Boorman explained that it depends on several variables, including customer class and the difference in rates between the times of use. Mr. Roos reviewed the power supply and water charts and noted that most reservoirs are nearly full. He said the 14-day weather outlook is predicted to be above-average precipitation then expected to dry out with cooler temperatures prevailing. He explained that the overall heavy load position is flat (unless the summer water continues to deteriorate) and will inform where power needs to be purchased on the market. Mr. Roos pointed out how much water flow and water levels impact IFP’s bottom line and noted that forward contract natural gas prices declined. He explained that the projected net power supply costs for the fiscal year 2024 are expected to be high this summer due to the predicted low water on the Columbia and Snake Rivers. Mr. Roos pointed out that the spread between the average water and ninety percent water shows the hydro risk/volatility with such high market prices and pointed out that the peaking plant will help to stabilize this risk. Review of 2023 Board Self-Evaluation Results Board Member Freeman noted that five of six surveys were returned and questions with “no” or “concerns” for answers were reviewed. Suggestions for next year’s survey questions are listed below. Question 1 – Split the packet and send out two links Board/Articles or provide weekly Friday additional readings – with a date and topic nomenclature. Question 3 – Weekly updates may help to shorten monthly meetings; the amount of detail is about right. Question 5 – What can be said on the monthly record is helpful – this is the time to get questions answered (updates on projects) – Action items in place if voting is required – The Whitepaper on the peaking plant is a good model to help with decision making on certain projects - RFPs are expensive and time-consuming and should be well-considered before being pursued – It was acknowledged that GM Prairie is available to answer questions outside of meetings. Question 6 – Compliance folder – Are there things we should know that we don’t know? – Not a great question – Rephrase question? Remove local laws – improve wording and work in regulatory. Question 8 – Broad question, big picture, not sure what question is asking – work on question for next year.  February 7, 2024 Question 10 – When policy issues are discussed, this is the time to voice opinions, but once a policy is determined, the Board should be united even though there could still be a difference in opinion. There being no further business, the meeting adjourned at 11:47 a.m. s/ Linda Lundquist s/ Rebecca L. Noah Casper Linda Lundquist, BOARD SECRETARY Rebecca L. Noah Casper, MAYOR