August 14, 2008
The regular meeting of the Board of Directors of the Omaha Public Power District was held in the Board Room on the Atrium Level of Energy Plaza East, on August 14, 2008, at 10:00 a.m.
Present were Directors M. J. Cavanaugh, N. P. Dodge Jr., J. K. Green, G. C. Hall, A. L. McGuire, J. R. Thompson, F. J. Ulrich and D. D. Weber. Also present were W. G. Gates, President; M. C. Bodammer, Corporate Secretary; and S. G. Olson and S. M. Bruckner, General Counsel for the District. Mr. Ulrich, Board Chair, presided, and Mrs. Bodammer, Corporate Secretary, recorded the minutes. Other members of Management present were D. J. Bannister, T. J. Burke, A. J. Minks, C. P. Moriarty, D. F. Widoe, G. R. Williams, J. J. Hanson, T. J. Richards and M. R. Jones. Others present were C. E. Perkins and J. F. Wright from I.B.E.W. Local Union #763; and four customer-owners and employees of the District.
The Corporate Secretary read the following:
“Notice of the time and place of this meeting was publicized by notifying the area news media; by publicizing same in the Omaha World-Herald and Outlets; by displaying such notice on the Arcade Level of Energy Plaza since August 8, 2008; and by mailing such notice to each of the District’s Directors on that same date.
“A copy of the proposed agenda for this meeting has been maintained, on a current basis, and is readily available for public inspection in the office of the District’s Corporate Secretary.
“Additionally, a copy of the Open Meetings Law is available for inspection in the public meeting book located in this meeting room.”
It was moved and seconded that the Board reviewed the June 2008 Comprehensive Financial and Operating Report and that the minutes for the last meeting be approved. The vote was recorded as follows: Dodge – Yes; Green – Yes; Hall – Yes; McGuire – Yes; Thompson – Yes; Weber – Yes; Cavanaugh – Yes; and Ulrich - Yes. The motion carried.
Thereafter, the Corporate Secretary read the following:
“Persons wishing to address the Board on a particular item are asked to approach the microphone as that agenda item is discussed. Comments will be heard following Board discussion of the item and prior to a vote by the Board.”
The following resolutions were then read, and upon motion duly seconded, were placed on roll call. The vote on each resolution is indicated following the description of that resolution.
RESOLUTION NO. 5715 authorizes management to proceed with negotiations for an underwriting agreement with a group of national and local investment managers for the 2008 Series A Electric System Revenue Bonds for an amount up to $105 million. Director Dodge led the discussion stating that approximately $85 million of funds is required to reimburse previously incurred 2008 capital expenditures and an additional $20 million is needed to replenish cash that was utilized in February 2008 to defease a portion of the 2005 B Bonds that are now being secured by federal deposits. He stated that Nebraska and Midwest retail markets are being targeted as potential investors for these bonds which start in increments of $1000. Director Hall inquired what methods will be used to inform the public. Vice President Moriarty stated that customers have started receiving printed notices on their billing statement envelopes and also in Outlets which is included with their electric service statements. Also there will be purchased advertisements in the local print media. Thereafter, the vote was recorded as follows: Dodge – Yes; Green – Yes; Hall – Yes; McGuire – Yes; Thompson – Yes; Weber – Yes; Cavanaugh – Yes; and Ulrich - Yes. The motion carried.
RESOLUTION NO. 5716 authorizes the District to enter into a contract with L. G. Barcus and Sons, Inc. for the construction and replacement of the bridge on the Arbor Line in an amount not to exceed $1,775,507. Director Hall stated the bridge needs to be replaced due to its design and age and because it will not be able to handle the increased coal car traffic after Nebraska City Station Unit 2 becomes operational, as evidenced by the fact that current traffic conditions are already maximizing the weight tolerance of the bridge. He commented it would be prudent to replace the bridge now to avoid coal delivery and power production problems as the bridge deteriorates further. Director Thompson asked whether those utilities purchasing half the power output will be absorbing some of this cost. Vice President Moriarty replied the current participation contract for Nebraska City Station Unit 2 provides that the participants must each pay their fair share of all costs, including ancillary facilities which amount to approximately 25 percent of the costs. Thereafter, the vote was recorded as follows: Dodge – Yes; Green – Yes; Hall – Yes; McGuire – Yes; Thompson – Yes; Weber – Yes; Cavanaugh – Yes; and Ulrich - Yes. The motion carried.
RESOLUTION NO. 5717 approves the Engineer’s Certification and authorizes management to negotiate and award contracts for procurement of equipment and equipment installation services for the high pressure turbine and main generator required for the Fort Calhoun Station Extended Power Uprate Project. Director Green stated the entire upgrade project, to be completed during Fort Calhoun Station’s refueling and maintenance outage in 2012, will increase the nuclear plant’s generation by 75 megawatts. Board Chair Ulrich inquired when the NRC is expected to approve the Extended Power Uprate Project, and Vice President Bannister replied final approval from the NRC is expected within the 2011 timeframe. Following the discussion, the vote was recorded as follows: Dodge – Yes; Green – Yes; Hall – Yes; McGuire – Yes; Thompson – Yes; Weber – Yes; Cavanaugh – Yes; and Ulrich - Yes. The motion carried.
RESOLUTION NO. 5718 authorizes the Board to revise the customer service charges effective January 1, 2009, to reflect changes in the costs of services. Director Cavanaugh stated these changes are required to recover increases in various costs of the District’s consumer services. He said this is not intended to be a revenue producing action and the proposed changes represent actual cost increases. Following discussion, the vote was recorded as follows: Dodge – Yes; Green – Yes; Hall – Yes; McGuire – Yes; Thompson – Yes; Weber – Yes; Cavanaugh – Yes; and Ulrich - Yes. The motion carried.
RESOLUTION NO. 5719 authorizes the Board to reject all bids received on Request for Proposal No. 2841 – 161 kV Transmission Line Construction Labor – and authorizes management to negotiate and enter into an acceptable contract. Director McGuire led the discussion stating that each bid proposal received on this contract was at least $1.5 million above the Engineer’s Estimate and therefore Board consideration is being requested to negotiate an acceptable contract in order to complete this project. Director Hall inquired whether the current time table will be affected by this action and Director McGuire called upon Vice President Widoe to answer his question. Mr. Widoe said a project schedule was developed with Cargill to accommodate their energy needs and his team will work diligently to achieve that schedule in early 2009. Thereafter, the vote was recorded as follows: Dodge – Yes; Green – Yes; Hall – Yes; McGuire – Yes; Thompson – Yes; Weber – Yes; Cavanaugh – Yes; and Ulrich - Yes. The motion carried.
RESOLUTION NO. 5720 authorizes the District to enter into a contract with FreightCar America, Inc. in an amount not to exceed $15,418,559.52 which includes the purchase of 252 new rapid discharge-type aluminum coal cars and the sale of 252 existing steel rapid discharge-type coal cars during the fourth quarter of 2008. Director McGuire provided the following reasons for converting from steel coal cars to aluminum coal cars: (1) a significant reduction in maintenance costs, (2) an increase load volume of nearly 7 tons per car, and (3) the current coal transportation contract includes an incentive in the form of a rate reduction providing that the District operates a fleet of all-aluminum coal cars. Director McGuire noted the District received an excellent offer for the 252 existing steel coal cars.
Director Thompson asked if it is typical for utilities, rather than the railroads, to own their own coal car fleets. Vice President Widoe replied that larger coal operators usually own their own fleets to help control maintenance costs and provide a compatible car design consistent with their unique unloading facilities which also assures consistent delivery standards. Director Cavanaugh inquired whether the District always uses its own cars, and Mr. Widoe responded that typically OPPD uses its own cars exclusively unless an issue arises that requires leasing. He added that occasionally the District leases its cars to other entities for extended outage periods of the plants when there is extended rail capacity available. Following the discussion, the vote was recorded as follows: Dodge – Yes; Green – Yes; Hall – Yes; McGuire – Yes; Thompson – Yes; Weber – Yes; Cavanaugh – Yes; and Ulrich - Yes. The motion carried.
Copies of the foregoing resolutions are filed in the District’s Corporate Records file.
At this time, Board Chair Ulrich recognized Mr. Bob Riebold (568 South 33rd Street, Omaha, Nebraska). Mr. Riebold said he represented many customer-owners throughout the state and expressed his appreciation for everything the District’s employees do to ensure quality service for its ratepayers. He especially wanted to thank the men and women who climb power poles in all kinds of adverse weather risking their lives to restore electricity. Mr. Riebold also commented that recognition should be given to OPPD’s customer service representatives who continually handle a multitude of various phone calls and assist their customers. Board Chair Ulrich thanked Mr. Riebold for his positive comments and remarked that he also appreciates the dedicated work provided by the OPPD crews, as well as the efficient efforts of the customer service representatives.
There being no further business, the meeting adjourned at 10:28 a.m.
A. J. Minks M. C. Bodammer
Assistant Secretary Corporate Secretary