Idaho Falls Utility Board Meetings

April 10, 2024 The Idaho Falls Power Board of the City of Idaho Falls met Wednesday, April 10, 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 Lisa Burtenshaw Board Member Michelle Ziel-Dingman Board Member Jim Francis Board Member John Radford (Joined via Zoom) Board Member Jim Freeman Board Member Kirk Larsen Also present: Bear Prairie, IFP General Manager (GM) Stephen Boorman, IFP Assistant General Manager (AGM) Michael Kirkham, City of Idaho Falls Attorney Josh Roos, IFP Chief Financial Officer (CFO) Wid Ritchie, IFP Customer Service Manager Jim Burr, Partner at Chapman and Cutler (Joined via Zoom) Ryan Bjerke, Partner at Chapman and Cutler (Joined via Zoom) Linda Lundquist, IFP Board Secretary Mayor Casper called the meeting to order at 7:48 a.m. Calendar, Announcements, Events and Updates Mayor Casper recognized Councilman Francis as the Association of Idaho Cities’ (AIC’s) newest Board Member. She thanked IFP staff for streamlining and managing the IFP Board meetings. She announced that IFP was honored this week at the American Public Power Association’s (APPA’s) Engineering and Operations (E&O) Conference for achieving their top RP3 Diamond Designation. [The RP3 designation, which is awarded every three years, recognizes public power utilities that demonstrate proficiency in four key disciplines: reliability, safety, workforce development, and system improvement. Criteria include sound business practices and a utility-wide commitment to safe and reliable delivery of electricity. Idaho Falls Power is one of 2,000 public power utilities in the United States. Less than six percent of public power utilities hold the diamond designation.] Mayor Casper announced that IFP will also be honored later in the week at the Northwest Public Power Association’s (NWPPA’s) E&O Conference for receiving their prestigious recognition for IFP’s improvements in the workplace and employee safety in the days away, restricted or transferred (DART) category. [DART is a safety metric mandated by the Occupational Safety and Health Administration (OSHA). In 2023, Idaho Falls Power employees worked over 172,000 hours with only 18 hours of an employee being on restricted or light-work duty from an injury (which was a minor sprain). The Safety awards are based on a review of each utility’s entry and the incident and severity rate of accidents over the past year. Idaho Falls Power put in place a safety committee five years ago that is empowered to bring together industry best practices along with collaboration throughout operations.] General Manager (GM) Prairie explained the tenets of IFP’s employee-run safety committee and safety program and how the safety culture at IFP has drastically improved in only a few years. Board Member Freeman stated that there has been a lot of talk about shutting down power in the Western U.S. and how close the Northwest was to shutting power in the recent cold snap. Board Member Ziel-Dingman mentioned Maine’s recent ballot initiative (which failed) to move their investor-owned utilities to public power/community-owned utilities. GM Prairie reminded the Board that the Idaho Falls community was forward-thinking then when they passed a $48 million bond to rebuild the bulb turbine project in the late  April 10, 2024 1970s with ninety-three percent (93%) approval. He reviewed the current draft of architectural drawings of the peaking plant. Board Member Radford gave an APPA Policy Makers Council (PMC) report and noted the U.S. House passed a bipartisan atomic energy bill that establishes various requirements to accelerate the deployment of nuclear energy technologies, such as advanced nuclear reactors. GM Prairie announced that the Hawk Radio station provided an appreciation lunch for IFP. He mentioned the extra four days of work the IFP staff and crews spent managing the recent massive snowstorm and pointed out that staff is continuing to hold after-action reviews and assessments. He pointed out that most of the outages had customers back online within an hour. Board Member Freeman attributed the city’s having averted potentially longer-term and wider-spread outages to IFP’s aggressive vegetation management. GM Prairie said the Westside substation has been experiencing some bumps and explained how IFP is working in coordination with the Idaho Falls Police Department (IFPD) in deploying their drones to inspect the overhead lines. He added that he’s established a work order with IFPD to continue inspections as needed. Peaking Plant Financing Discussion Jim Burr, Partner at Chapman and Cutler reviewed the summary of the 2021 Paine Substation bond financing through the Idaho Energy Resources Authority (IERA). He commented that the financing was a spectacular success with only a one-point seven percent (1.7%) interest rate, which was bottom-level pricing coming out of COVID. Mr. Burr explained that it was at a 15-year financing plan, carrying an average of $1.5 million in annual debt. He commented that the Bank of America (BofA) underwriters did a nice job on the deal and only charged about $150,000 for their underwriting fee. He said the heavy lifting this time around should be significantly less. Mr. Burr reviewed the 2024 financing considerations/options and mentioned that BofA could again be utilized for the underwriting to avoid a costly and time-consuming request for proposal (RFP) that would also require hiring a financial advisor (FA) - which wasn’t used in 2021. He said the payment schedule is optional and recommended a 15 to 20-year bond. GM Prairie pointed out that BofA would need a formal agreement in place to engage. Board Member Larsen observed that a 20-year bond would be at a higher interest rate and Mr. Burr agreed that option would be about a 17-year average life at a marginally higher interest rate than a 15-year bond. GM Prairie added that he would recommend deferring payments for one to two years on the front end to help with costs which will coincide with fiber payments coming back to power’s balance sheet to help with cash flow in two years. Mr. Burr explained the timeline to close by early October and GM Prairie said he expects to have a recommendation to the Board by mid-summer and mentioned the potential need to call a special meeting before August. There was discussion around hiring an FA this time or using the same process at the 2021 transaction. GM Prairie said he felt comfortable with the expertise of Mr. Burr and Mr. Williams at the IERA along with Josh Roos and that an FA would not be needed for this type of deal. Mayor Casper gave tacit approval for the plan and asked if Board Member Radford had any questions/concerns, he said the bond process worked well in 2021 and doesn’t have concerns and asked if the bond could be refinanced down the road. Mr. Burr said the 2021 bonds can be refunded in 2031 (when called due) and said that refinancing the new project could be a possibility down the road. He said he expects there to be a lot of volatility in bond markets in the fall with elections and recommends getting in and out of the market very quickly to get the deal closed before the national election in early November. The board gave their approval to move forward without an FA and follow the same path as the last transaction in 2021. Board Policy No. 4 (Utility-Wide Market Based Compensation) Review GM Prairie asked if there was feedback/input regarding the policy and none was provided. The Board agreed to move the policy forward. 2024/25 IBEW Agreement Review GM Prairie gave an overview of the negotiation process from this year and noted that the union feels the policy is fair and transparent. He commented that the union tries to nibble at steps in the positions as they don’t like steps and prefer those workers, regardless of time in the position, get paid all the same from the  April 10, 2024 start. Board Member Francis asked how many steps are in each position and GM Prairie said four for union with 18-month intervals and eighteen for non-union but pointed out that step 12 is the target midpoint. Assistant General Manager (AGM) Boorman pointed out that employees are run through mid-year check- ins and annual evaluations and commented on how much time is expounded in this valuable and necessary process. Board Member Freeman asked how employees feel about the process, particularly someone with a frozen pay rate and GM Prairie explained in his estimation that the Milliman survey tool (which lags by a year) denotes a fair and transparent process and said he invites employees to bring forward information if they are seeing something different in the market. He explained the re-grading graphs and said that wages are around seventeen percent (17%) of IFP’s budget and pointed out that a one or two-percent swing in the labor market isn’t significant when compared to a bad week in the energy market. Mayor Casper said she appreciated the comparison. GM Prairie said the contract was approved by union members on April 3, 2024. He reviewed the change summary, including promotions and new positions, and explained the insurance true-up. Board Member Larsen asked about the tax implications and GM Prairie said the money remains tax deferred as it’s deposited in the employees' health savings account. GM Prairie said that the non-union utility employees are also eligible for LineCo coverage and added that LineCo is receptive to insuring the entire utility. Board Member Francis explained his preference for voting on the contract in a City Council meeting (where public comment is on the agenda) versus in a Board meeting to comply with his understanding of Board Policy Number Two and is happy to review that policy in the next Board meeting. GM Prairie pointed out that union negotiations and Board and Council meetings are all public meetings, and he is open to affording opportunities for public comment either in Board meetings or moving the union contract action to a City Council meeting where there is public comment on the agenda. He said he prefers to vote in the Board setting, as city employees tend to cherry-pick the contract, but agrees that clarity is good. Board Member Francis said he now agrees that it’s appropriate to vote on the union contract in a Board setting. Mayor Casper said the city has more transparency than ever before, and pointed out that many taxpayer dollars are spent trying to maintain transparency. GM Prairie offered that rewording the Board’s agendas to accept public comment could be considered. Board Member Francis implored it’s important to follow policy and reiterated that he looks forward to reviewing Board Policy Number Two in May. It was moved by Board Member Freeman and seconded by Board Member Larsen to accept and approve the 2024/25 IBEW Local Number Seven Agreement and give authorization to the Mayor to execute the contract. The motion passed unanimously with Board Member Radford voting electronically. IFP Strategic Plan Final Review GM Prairie reviewed Board Member Francis’ edits and worked with the Board to finalize the new design of the plan. He said the new design presents a better visual representation, sitting under IFP’s mission statement and Board Member Burtenshaw said she agreed and pointed out that the entire city adopted the structure. BPA 2028 Contract Update GM Prairie reviewed the Provider of Choice Timeline and explained their product offerings and proposed changes to Day Ahead Pricing and how everything is verified and tracked back to IFP. He said there should be new contracts in front of utilities for their review in January 2025. Board Member Francis asked about the record of decision (ROD) and whether it’s final. He said there were 450 pages of comments submitted in the ROD, including IFP’s desire to get credit for the bulbs and explained that the bulbs were not a new resource within the contract timeframe, and pointed out that they’ve always been a BPA-funded resource. GM Prairie said the contract will be a 19-year contract with 16 years of power deliveries and summarized that BPA is offering predominantly the same products but is working on design changes. He explained BPA’s desire to regain control in this area, especially with the load-following customers. Board Member Burtenshaw asked why utilities are letting entities like UAMPS manage the process for them and GM  April 10, 2024 Prairie said most utilities don’t care because they don’t have generation and they rely on joint operating entities or BPA through the load following product to manage their power supply and pointed out that most utilities the size of IFP don’t manage their power supply like IFP does. He said that BPA affirmed they will continue their transfer service against the Tier I pool and pointed out that if IFP develops additional resources outside of IFP’s service area, BPA says they will cover transfer costs up to 41 megawatt hours (MWh) per year, per contract. He said that he and Mr. Morgan are participating in rate design meetings over the next several months and there will be more details on product and rate design forthcoming. GM Prairie explained that IFP’s load growth shows up in Tier II which is a change and that customers are going to have to elect how much of their load growth they put on BPA at the start of the contract. Electric Vehicle Charging Update Mr. Roos reviewed the top ten states adopting electric vehicles (EVs) and pointed out that the adopting states tend to be the states surrounding Idaho (presumably traveling to/from Jackson/Yellowstone). He explained how the length of charging translates to the levels of charging. GM Prairie pointed out that the potential load for each charging station is huge at about .5 megawatts (MW) for level 3 charging. Mr. Ritchie said Idaho Falls Power received two of the forty-seven Department of Transportation (DOT) Charging and Fueling Infrastructure (CFI) grants that were awarded across the country to help build out the charging infrastructure. Mr. Roos explained the Federal cost share ($3,002,856) and IFP’s cost share ($750,714) to build out four locations in Idaho Falls. [There will be six charging ports at each of the 4 stations - all containing 2 Level III charging ports and 4 Level II charging ports per station.] GM Prairie pointed out that the stations will be for pay. Mr. Roos said the utility intends to keep the pricing below competing stations. He explained that the locations were selected in part because funding requires there to be a restroom nearby (open 24 hours) and pointed out that the selected locations will be upgraded including paving and lined spaces. Board Member Larsen asked if the stations would have Tesla charging and Mr. Ritchie said they would have both charging capabilities with adapters at the chargers. He mentioned the new charger lead time is expected to be four to six weeks. Mr. Roos gave the timeline for executing the contract which he anticipates will be brought to City Council sometime in late June 2024 with construction likely beginning in October 2024. He said that Idaho Falls Power was awarded a Department of Energy (DOE) Fellowship Grant, which is a 2-year program for grant administration, and noted that Associate Principal Deputy Assistant Secretary Alejandro Moreno for the Office of Energy Efficiency and Renewable Energy at the U.S. Department of Energy will help aid in the grant’s request for proposal (RFP) process and also assist with future studies and analysis of the stations on how usage could affect future programs. Fire Mitigation Plan Update AGM Boorman reviewed IFP’s Fire Mitigation Plan and pointed out that multiple large utilities are in bankruptcy or danger of bankruptcy due to wildfire. He said that IFP’s infrastructure is at low risk for wildfire and added that Idaho utilities are working on wildfire legislation. He explained how IFP has developed a draft plan/procedure but expects changes in the next year to match new state legislation. He highlighted the procedures/actions that IFP can and will be taking in coordination with emergency services and Bonneville County and pointed out the preventative actions IFP is already taking like IFP’s robust vegetation program, bird guards, and wire grounding. AGM Boorman explained the advantages/disadvantages of public safety power shutoff (PSPS) and pointed out the importance of line inspections before re-energizing. Utility Reports Generation –– GM Prairie said that Aalo Atomics has approached IFP with a concept to build in IFP’s research park in partnership with a 30,000 by 40,000 square foot (sq ft) building for their non-nuclear prototype. Board Member Burtenshaw said she is not as altruistic and views the project as a very big deal if it comes to fruition. The Board agreed to authorize GM Prairie to liaise with the groups involved. Mayor Casper advised the Board to voice any concerns to GM Prairie.  April 10, 2024 There being no further business, the meeting adjourned at 11:50 a.m. s/ Linda Lundquist s/ Rebecca L. Noah Casper Linda Lundquist, BOARD SECRETARY Rebecca L. Noah Casper, MAYOR