Board Approved on July 28, 2009
MINUTES OF THE BOARD OF COMMISSIONERS’ MEETING
LANSING BOARD OF WATER AND LIGHT
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Tuesday, May 26, 2009
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The Board of Commissioners met in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan.
Present: Commissioners Margaret Bossenbery, Robert Cochran, Tony DeLuca, Semone James-Howes, Peter Kramer and Sandra Zerkle.
Absent: Commissioners Frank Lain and Tracy Thomas.
The Secretary declared a quorum present.
Acting Chairperson Zerkle called the meeting to order at 5:40 p.m.
APPROVAL OF MINUTES
Motion by Commissioner Kramer, seconded by Commissioner Cochran to approve the minutes of the rescheduled regular board meeting held March 26, 2009. Carried unanimously.
THE CHAIR ANNOUNCED THAT MEMEBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON ANY AGENDA SUBJECT. ANYONE WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO SO IMMEDIATELY PRIOR TO ADJOURNMENT.
There were no public comments.
Letter received April 7, 2009 from Clarence Suelter opposing the proposed new coal-fired power plant.
Received and placed on file.
Thank you e-mail and follow-up information received April 17, 2009 from Tremaine Phillips regarding the presentation held on April 14, 2009.
Received and placed on file.
Letter received May 15, 2009 from Nancy Mahlow of the Eastside Neighborhood Organization regarding the sludge pond on Aurelius Road.
Received and placed on file.
April 14, 2009
The Finance Committee of the Lansing Board of Water and Light met at the Executive Offices, Lansing beginning at 6:35 p.m. on Tuesday, April 14, 2009.
Finance Committee Chairperson Peter Kramer called the meeting to order and asked the Secretary to call the roll. The following members were present: Commissioners Robert Cochran, Tony DeLuca and Peter Kramer. Alternate committee members Margaret Bossenbery and Semone James-Howes were also present in addition to Commissioners Frank Lain and Sandra Zerkle.
Absent: Commissioner Tracy Thomas
There were no public comments.
Motion by Commissioner Lain, seconded by Commissioner Cochran to approve the Finance Committee meeting minutes of March 10, 2009 as amended.
Action: Carried unanimously.
The Finance Committee met to discuss the fiscal year 2009/2010 proposed budgets for the Corporate Secretary, Internal Auditor and the Board of Commissioners. Fiscal year budget comparisons for 2008/2009 and 2009/2010 were included in the packet materials to demonstrate the proposed net changes. A consolidated budget comparison that represented reductions for each respective department was also included in the materials. The proposed changes reflect the Lansing Board of Water and Light’s (BWL) current efforts to reduce cost. Following brief discussion, the committee recommended a $5,000 increase to the travel and conference line item for fiscal year 2009/2010 for both the Internal Auditor and the Board of Commissioners. The travel and conference budget allows for continuing education and certifications with respect to the Internal Audit Department, and utility and governance conferences for the Board of Commissioners. The line item changes for travel and conference represent a $38,500 budget reduction over 2008/2009 figures.
The committee also discussed in detail, the proposal to transfer the Corporate Secretary’s Administrative Assistant position to a different responsibility area, which also requires an overview of the duties of the respective office. The transfer deemed fiscally responsible would allow the Corporate Secretary Office to concentrate on matters specific to the Board of Commissioners and not those of an operational nature. Committee members also noted that traditionally staff shares resources and hence the Corporate Secretary Office would have support when needed. The committee members expressed their thoughts with regard to the proposal, departmental responsibilities relative to board and operational matters as well as City of Lansing charter directives. They also discussed the departments current structure, the need for support should the Secretary be unavailable and the relevance of moving the position to another department.
On motion by Commissioner Lain, seconded by Commissioner Bossenbery to move the proposed budget to the full board.
Discussion: It was recommended that the Human Resource Committee study the position to determine appropriate responsibilities for the Corporate Secretary Office. It was further suggested the committee conduct a desk audit as part of its evaluation process. In addition, some committee members did not understand the purpose in moving the Administrative Assistant position to another department and suggested sharing the resource with operations by 50%. They also discussed ensuring that there be sufficient resources dedicated to the Corporate Secretary Office to carry out its duties and responsibilities. After further discussion, the Finance Committee took the following action:
Action: The motion carried by a vote of 4-2.
On motion by Commissioner Cochran, seconded by Commissioner Lain, to excuse the absence of Commissioner Thomas.
Action: Carried unanimously.
There being no further business, the meeting adjourned at 7:29 p.m.
Respectfully submitted,
Peter W. Kramer, Chair
Finance Committee
The Committee of the Whole of the Lansing Board of Water and Light met at the Executive Offices, Lansing beginning at 5:35 p.m. on Tuesday, April 14, 2009.
Committee of the Whole Chairperson Sandra Zerkle called the meeting to order and asked the secretary to call the roll. The following members were present: Commissioners Margaret Bossenbery, Robert Cochran, Tony DeLuca, Semone James-Howes, Peter Kramer, Frank Lain and Sandra Zerkle.
Absent: Commissioner Tracy Thomas.
There were no public comments.
Motion by Commissioner Lain, seconded by Commissioner Cochran to approve the Committee of the Whole meeting minutes of March 10, 2009.
Action: Carried unanimously.
James Cliff, Douglas Jester, Tremaine Phillips and Stephen Rall from Lansing Can Do Better and the Michigan Environmental Council presented alternative solutions to the Lansing Board of Water and Light’s (BWL) current proposal with respect to new generation. The alternative proposal entitled, “Plan B: The Right Decision at the Right Time” includes a three-part strategy that speaks to a comprehensive and open evaluation of all potential resource options, which include:
1) Waiting 24-months before making a decision on new baseload generation.
2) Pursuing aggressive weatherization and energy efficiency programs.
3) Deploying renewable and distributed energy resources.
The presentation also included information regarding future energy demands for General Motors, federal legislation, state regulatory action, stability and outlook of financial markets, and BWL policies that support customer utilization of renewable energy sources. Plan B recommends a strong commitment to energy efficiency and weatherization as well as a 24-month timeline to develop a new Integrated Resource Plan, that allows for the full consideration of economic, political, and financial risks and changes.
In response to the information, committee members inquired as to the reliability of new technologies referenced during the presentation, more specifically compressed air energy storage. They also noted the importance of providing reliable baseload generation. Following discussion, the committee members noted that there would be need for additional information in the future as they proceed with discussions in regards to new generation.
On motion by Commissioner Cochran, seconded by Commissioner James-Howes to move the proposed resolution regarding the agreement with the Michigan Water/Wastewater Agency Response Network to the full board for consideration and approval.
Action: Carried unanimously.
Dick Peffley, Executive Director of Water and Special Projects reported that the BWL broke ground on the new chiller plant October 2008. Originally estimated at $21 million, the construction management team and trades people have diligently worked to bring the project in on schedule and at a budget not to exceed $20 million. In addition to the original plans, the BWL will also install two 6,000-kilowatt hour windmills, which will produce 12-kilowatts of total power. The new chilled water facility will be 60% more efficient than the previous chiller.
J. Peter Lark introduced the proposed resolution regarding the naming of the new chiller plant. It was recommended that the facility be named the “Roy E. Peffley Chilled Water Plant” in recognition of his 28 years of service and responsibility in the building of the Erickson Electric Generating Station.
On motion by Commissioner Kramer, seconded by Commissioner Lain, to move the proposed resolution regarding the Naming of the Chilled Water Plant to the full board for consideration and approval.
Discussion: Commissioner Zerkle advised that the plant naming was a wonderful gesture and tribute to both Roy E. Peffley and Dick Peffley for their dedication to the BWL.
Commissioner Kramer shared a childhood story with respect to the opening of the Erickson Electric Generating Station and the pride Roy Peffley felt at said occasion. He also noted that Dick Peffley will experience the same sentiment at the opening of the new chilled water plant.
In response Commissioner Lain’s suggestion, Mr. Lark noted that he has already directed staff to place a plague and/or picture of BWL retiree, Roy E. Peffley in the new facility.
Action: Carried unanimously.
Michelle Carlson, Marketing Analyst presented information to the committee members with respect to the newly proposed BWL logo. The BWL recommended a revision to its current logo in light of its upcoming 125th anniversary and progressive efforts in the areas of energy policies, business strategies, workforce diversity and environmental stewardship. The new logo revisions will modernize the look of the BWL as it continues to move forward in the community.
In response to Commissioner inquires, Mr. Lark advised that the BWL would phase in the new logo over a period of time, with an expectation to use it in its entirety by 2010, assuming good financial standing.
On motion by Commissioner Cochran, seconded by Commissioner Lain, to move the proposed resolution regarding the Revision of Lansing Board of Water and Light Logo to the full board for consideration and approval.
Active: Carried unanimously.
On motion by Commissioner Lain, seconded by Commissioner Cochran to excuse the absence of Commissioner Tracy Thomas.
Action: Carried unanimously.
Standard & Poor’s (S&P) Bond Rating. J. Peter Lark announced that it appears the BWL maintained its AA- bond rating. S&P will notify the BWL of its final analysis once it has been confirmed.
Federal Appropriations Budget. It was proposed by U. S. House of Representatives Mark Schauer that the BWL receive $4.7 million in federal appropriations for fiscal year 2010. Approximately $4 million will be designated for biomass projects and $700,000 for electric vehicles. A determination regarding the proposal is expected early 2010.
There being no further business, the meeting adjourned at 6:25 p.m.
Respectfully submitted
Sandra Zerkle, Chair
Committee of the Whole
ENTER INTO AN AGREEMENT WITH THE MICHIGAN WATER/WASTEWATER AGENCY RESPONSE NETWORK
WHEREAS, certain Michigan water and wastewater agencies, have formed the “Michigan Water/Wastewater Agency Response Network,” (MI-WARN), to share resources and to assist each other in the form of personnel, equipment, material and supplies in the event of emergencies that disrupt utility services; and
WHEREAS, the Urban Cooperative Act of 1967, being MCL 124.501 et seq., permits public bodies and private entities to work together to provide mutual aid and assistance to both public and private water and wastewater utilities in need of emergency assistance caused by natural or man-made disasters; and
WHEREAS, the Members have agreed to enter into this MI-WARN Mutual Aid Agreement, to describe the terms and conditions under which emergency assistance may be requested and provided; and
WHEREAS, by executing the Agreement, the Parties express their intent to participate in a program of Mutual Aid and Assistance within the State of Michigan.
THEREFORE BE IT RESOLVED, that the Board of Commissioners authorize the General Manager and Corporate Secretary to sign the Michigan Water/Wastewater Agency Response Network Mutual Aid and Assistance Agreement, in such form as approved by the Staff Attorney.
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Motion by Commissioner James-Howes, seconded by Commissioner Cochran, to approve the resolution entitled, “Enter into an Agreement with the Michigan Water/Wasterwater Agency Response Network”.
Action: Carried unanimously.
NAMING OF THE CHILLED WATER PLANT
WHEREAS, Roy E. Peffley served the Board of Water and Light for 28 years, the last eight of those as Electric Utility Director; and
WHEREAS, during his tenure he was responsible for, among other things, the design, construction, and operations of the Erickson Electric Generation Station; and
WHEREAS, in further recognition of his many other outstanding accomplishments including vision, leadership, and planning for the Board of Water and Light’s financial future, it is with great honor that his years of devoted service and dedication be recognized.
THEREFORE BE IT RESOLVED, that the chilled water plant located at 625 West Allegan Street in Lansing, Michigan, is hereby named the ROY E. PEFFLEY CHILLED WATER PLANT.
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Motion by Commissioner James-Howes, seconded by Commissioner Kramer to approve the resolution entitled, “Naming of the Chilled Water Plant”.
Action: Carried unanimously.
Fiscal Year 2010 Operating and Capital Budget
RESOLVED, that the annual Operating Budget covering Fiscal Year 2010 is hereby approved as presented;
RESOLVED, that the Fiscal Year 2010 Capital Budget is hereby approved as presented;
RESOLVED, that the forecast for capital expenditures for the Fiscal Years 2010-2015 is hereby accepted as presented; and
RESOLVED FURTHER, that the Corporate Secretary be directed to make the appropriate filings with the City of Lansing City Clerk’s office and the Mayor’s office in accordance with the Lansing City Charter regarding the above actions.
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Motion by Commissioner Kramer, seconded by Commissioner Cochran to approve the resolution entitled, “Fiscal Year 2010 Operating and Capital Budget”.
Action: Carried unanimously.
(See attachments)
Application of Financial Accounting Standards #71 (FAS #71) to all environmental remediation expense
WHEREAS, pursuant to Resolution #2003-8-3 the Board of Commissioners require management to receive Board approval before any deferrals under FAS 71; and
WHEREAS, the Board of Commissioners has approved the specific deferral of environmental remediation expenses associated with the North Lake Lansing Landfill and Comfort Street sites through Resolution #2004-11-2 and #2006-05-06; and
WHEREAS, the environmental charge implemented as part of the May 1, 2009 rate increase allows for Board approved rate recovery of all environmental remediation expenses; and
WHEREAS, consistent with Board approved rate recovery of environmental remediation expenses, the staff of the BWL proposes to record all appropriate deferrals allowed under FAS #71 related to the recovery of environmental remediation expenses.
RESOLVED, that the Board of Commissioners, as the regulatory body of the Board of Water and Light, approve, pursuant to the Financial Accounting Standards (FAS) 71, the recognition of all appropriate deferrals related to the incurrence of environmental remediation expenses subject to recovery under the Environmental Charge.
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Motion by Commissioner James-Howes, seconded by Commissioner Cochran, to approve the resolution entitled, “Application of Financial Standards #71 (FAS #71) to All Environmental Remediation Expense”.
Action: Carried unanimously.
Resolution 2009-5-5
Rules and Regulations for Electric, Water, Steam, and Chilled Water Utility Services
RESOLVED, that the amendments to the Rules and Regulations for Electric, Water, Steam, and Chilled Water Services be approved as presented, to be effective July 1, 2009 (see attachments.)
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Motion by Commissioner Kramer, seconded by Commissioner Bossenbery to approve the resolution entitled, “Rules and Regulations for Electric, Water, Steam, and Chilled Water Utility Services”.
Action: Carried unanimously.
Prohibit Demand Response Aggregators
WHEREAS, the Federal Energy Regulatory Commission has issued Order No. 719, 125 FERC ¶ 61,071, 73 Fed. Reg. 64,099 (October 28, 2008); and
WHEREAS, pursuant to Order No. 719, 18 C.F.R. § 35.28(g)(1)(iii) provides: “Each Commission-approved independent system operator and regional transmission organization must permit a qualified aggregator of retail customers to bid demand response on behalf of retail customers directly into the Commission-approved independent system operator’s or regional transmission organization’s organized markets, unless the laws and regulations of the relevant electric retail regulatory authority expressly do not permit a retail customer to participate.” ; and
WHEREAS, pursuant to Order No. 719, 18 C.F.R. § 35.28(g)(1)(i)(A) provides: “Every Commission-approved independent system operator or regional transmission organization that operates organized markets based on competitive bidding for energy imbalance, spinning reserves, supplemental reserves, reactive power and voltage control, or regulation and frequency response ancillary services (or its functional equivalent in the Commission-approved independent system operator’s or regional transmission organization’s tariff) must accept bids from demand response resources in these markets for that product on a basis comparable to any other resources, if the demand response resource meets the necessary technical requirements under the tariff, and submits a bid under the Commission-approved independent system operator’s or regional transmission organization’s bidding rules at or below the market-clearing price, unless not permitted by the laws or regulations of the relevant electric retail regulatory authority.”; and
WHEREAS, pursuant to Lansing City Charter, the Lansing Board of Water & Light is authorized to enact Rules and Regulations governing the provision of electric power its customers; and
WHEREAS, the Board of Commissioners of the Lansing Board of Water and Light has determined that it would be harmful to the Lansing Board of Water & Light, and the collective interests of the Lansing Board of Water & Light, as a load-serving entity with an obligation to serve at retail, and the Lansing Board of Water & Light’s retail customers to permit any entity other than the Lansing Board of Water & Light itself or its authorized designee to aggregate demand response on behalf of its retail customers; and
WHEREAS, the Board of Commissioners of the Lansing Board of Water & Light as the electric retail regulatory authority for the Lansing Board of Water & Light, has determined it to be desirable that the aggregation of demand response on behalf of retail customers served by the Lansing Board of Water & Light to be bid directly into the organized electric and ancillary services markets administered by the Midwest Independent System Operator (or any successor independent system operator or regional transmission organization to which the Lansing Board of Water & Light is a participant either independently or through the Michigan Public Power Agency (MPPA) be performed by the Lansing Board of Water & Light or its authorized designee, the following amendments to the Code of the Lansing Board of Water & Light are hereby adopted.
BE IT RESOLVED, the Lansing Board of Water & Light Rules and Regulations for Electric Service, is hereby revised to add under the heading “Aggregation of Retail Customer Demand Response” a new subsection to provide as follows:
A. The Lansing Board of Water & Light or its authorized designee is the sole entity permitted to bid demand response on behalf of retail customers served by the Lansing Board of Water & Light directly into any Commission-approved independent system operator’s or regional transmission organization’s organized electric markets.
B. Retail customers served by the Lansing Board of Water & Light wishing to bid their demand response into a Commission-approved independent system operator’s or regional transmission organization’s organized electric markets may do so by participating in the program established by the Lansing Board of Water & Light or its authorized designee. Retail customers are not permitted to participate in the demand response program of any other entity without the express prior authorization of the Lansing Board of Water & Light.
FURTHER RESOLVED, the Lansing Board of Water & Light Rules and Regulations for Electric Service, is hereby revised to add under the heading “Ancillary Services Provided by Demand Response Resources” a new subsection to provide as follows:
A. The Lansing Board of Water & Light or its authorized designee is the sole entity permitted to bid demand response on behalf of retail customers served by Lansing Board of Water & Light directly into any Commission-approved independent system operator’s or regional transmission organization’s organized markets as allowed by the regional transmission organization’s existing tariffs.
B. Retail customers served by the Lansing Board of Water & Light wishing to bid their demand response into a Commission-approved independent system operator’s or regional transmission organization’s organized markets as allowed by the regional transmission organization’s existing tariffs may do so by participating in the program established by the Lansing Board of Water & Light or its authorized designee. Retail customers are not permitted to participate in the demand response program of any other entity without the express prior authorization of the Lansing Board of Water & Light.
Section 4. This Regulation shall take effect immediately upon approval by the Board.
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Motion by Commissioner Cochran, seconded by Commissioner DeLuca to approve the resolution entitled, “Prohibit Demand Response Aggregators”.
Action: Carried unanimously.
UNFINISHED BUSINESS
None.
NEW BUSINESS
None.
RESOLUTIONS
None.
MANAGER’S REMARKS
Chili Cook-off. General Manager J. Peter Lark reminded everyone of the upcoming 14th Annual BWL Chili Cook-off scheduled for Friday, June 5, 2009. Over 50 vendors, two bands, and Michigan State University athletes will participate in this year’s event. Proceeds will go to Hope Scholars, Impression 5 Science Museum and Sparrow Foundation. In response to a Commissioner inquiry, Lark noted that the charitable organizations are historically the same every year, with the exception of the Sparrow Foundation, which was added to the list of charities approximately one year ago. Lark also thanked staff members and IBEW for their efforts regarding this endeavor.
Commissioner James-Howes expressed the possibility of this being her last official board meeting. She has not requested reappointment for the purpose of devoting more time to her career and family. She expressed fondness for the BWL and its Board appointees, which include the General Manager, Corporate Secretary and Internal Auditor. Commissioner James-Howes remarked that she voted her conscious and felt she represented the citizens of Lansing and did a good job. She went on to acknowledge Lark for his excellence and wished him well in moving forward.
General Manager Lark thanked Commissioner James-Howes for her gracious service as a Board Commissioner.
Commissioner Zerkle noted that it has been a learning experience and a pleasure working with Commissioner James-Howes. She also thanked Commissioner James-Howes for her time and effort as a Board Commissioner.
Commissioner Kramer thanked Chief Financial Officer Susan Devon and staff for their financial efforts with respect to forecasting, developing the budget, and making concessions and departmental decisions to help keep the BWL successful.
EXCUSED ABSENCE
On motion by Commissioner DeLuca, seconded by Commissioner Kramer to excuse the absence of Commissioners Frank Lain and Tracy Thomas.
Action: Carried unanimously.
PUBLIC COMMENTS
There were no public comments.
ADJOURNMENT
On motion by Commissioner Cochran, seconded by Commissioner Bossenbery, the meeting adjourned at 6:03 p.m.
/s/ Rhonda Jones, Corporate Secretary
Filed with Lansing City Clerk
June 2, 2009