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Home > About Us > Company > Board of Directors

December 2011 Board Meeting Minutes

 

December 15, 2011

 

                        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 December 15, 2011, at 10:00 a.m. 

                        Present were Directors M. J. Cavanaugh, N. P. Dodge, J. K. Green, A. L. McGuire, L. Scheve, J. R. Thompson, F. J. Ulrich, and D. D. Weber.  Also present were W. G. Gates, President and S. M. Bruckner and T. Meyerson, General Counsel for the District.  Mr. Green, Board Chair, presided, and Ms. Emerson, Corporate Secretary, recorded the minutes.  Other members of Management present were D. J. Bannister, T. J. Burke, M. I. Doghman, E. E. Easterlin, J. T. Hansen, S. L. Hutcherson, T. R. Monroe, L. A. Olson, D. J. Jacobberger, D. K. Petrus, D. L. Morgan, T. G. Tamke, and M. R. Jones, and C. K. McClean.  Others present included several customer owners and various members of the local media.              

 

                        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 the same in the Omaha World-Herald and Outlets; by displaying such notice on the Arcade Level of Energy Plaza since December 9, 2011; 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 October 2011 Comprehensive Financial and Operating Report and that the minutes for the last meeting be approved.  The vote was recorded as follows:  Cavanaugh – Yes; Dodge – Yes; McGuire – Yes; Scheve – Yes; Thompson – Yes; Ulrich – Yes; Weber – Yes; and Green – 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.  Persons wishing to address the Board on all other matters will have an opportunity before the close of the meeting.”

                     

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. 5891 approves the District’s 2012 Corporate Operating Plan.    Committee Chair Thompson asked Vice President Easterlin to brief the Board on this item.  Vice President Easterlin reported that the Corporate Operating Plan as well as the 2012 rate proposal remain consistent with what was presented during the November Committee and Board meetings as well as the December Committee meetings.  Chairman Green said that since there was a formal public hearing in November and two open committee meetings, and that fact that the Plan has not changed, there was not a need for a formal presentation.  Director McGuire asked how the possible extension of the Fort Calhoun outage would affect the Corporate Operating Plan.  Vice President Easterlin commented that the Plan does not consider any extension of the outage.  He added an outage extension will include additional fuel and purchased power costs as well as impacting off-system sales. If approved, the Corporate Operating Plan will remain intact.  OPPD will then have a working budget that will analyze any additional impacts of the extended outage.  Mr. Easterlin also added that R. W. Beck reviewed the Corporate Operating Plan and reported the expenditures in the plan are reasonable.  CH2M Hill reviewed the rate proposal and said it was fair, reasonable and non-discriminatory. 

 

At this time, Chairman Green asked for any public comment on the 2012 Corporate Operating Plan as well as the 2012 rate proposal. 

 

                           Mr. Patrick Rinn, 13871 Sprague Street, Omaha, NE, expressed his concerns about status of the Fort Calhoun Station as well as the additional costs to the District for the extended outage.  President Gates responded that OPPD takes the issues at the station very seriously.  He also said OPPD is in constant communication with the Nuclear Regulatory Commission on these issues, and as the additional cost information on the extended outage is finalized, OPPD will remain transparent in this communication to our customer owners.

 

                           Mr. Duane Hovorka, 409 310 Street, Elmwood, NE, encouraged the Board to look at large scale energy efficiency programs to help benefit the ratepayers and the community. 

 

 

Following the discussion, the vote was recorded as follows:  Cavanaugh – Yes; Dodge – Yes; McGuire – Yes; Scheve – Yes; Thompson – Yes; Ulrich – Yes; Weber – Yes; and Green – Yes.  The motion carried.

 

                        RESOLUTION NO. 5892 authorizes the declaration of anticipated 2012 Capital Expenditures reimbursement.  Committee Chair Thompson indicated that in accordance with federal tax regulations concerning financing proceeds, the adoption of this resolution maintains the option for the District to issue tax-exempt or taxable debt obligations to reimburse 2012 capital expenditures and maximize the investment of the proceeds.  Since 1979, the District has utilized a financing plan that includes the reimbursement of Corporate Operating Plan expenditures from the proceeds of tax-exempt or taxable debt obligations.  Such reimbursement financing has been determined to be the most cost-effective and efficient means of avoiding arbitrage rebate restrictions on the investment of the proceeds.  The 2012 Corporate Operating Plan includes District expenditures of approximately $399 million for capital improvements, nuclear fuel and fossil fuel expenditures.  The District plans to issue tax-exempt or taxable debt obligations to reimburse a portion of these expenditures.  Following the discussion, the vote was recorded as follows:  Cavanaugh – Yes; Dodge – Yes; McGuire – Yes; Scheve – Yes; Thompson – Yes; Ulrich – Yes; Weber – Yes; and Green – Yes.  The motion carried.                          

 

                          RESOLUTION NO. 5893 approval of the District’s 2012 Electric Service Rate Adjustments and the Fuel and Purchased Power Adjustment.  Committee Chair McGuire indicated this action is for a general rate increase of 4.5% rate increase as well as a 1.4% fuel and purchased power adjustment.  She also said the District has an under-recovered amount from 2011 of $32 million.  The District will use rate stabilization funds to pay these costs and replenish the fund over a three-year period beginning in 2012.  She also said that $11.7 million of the costs will be included in the 2012 FPPA rate and the remaining $20.3 million will be collected through the 2013 and 2014 FPPA rates.  Ms. McGuire also thanked the public for their comments as well as the media inquiries, and would appreciate any additional comments.  Director Weber commented that he appreciated the work that was involved in developing individual responses to each public inquiry.   

 

At this time, Chairman Green asked for any public comment on the 2012 rate proposal.   

 

                           Mr. Patrick Rinn, 13871 Sprague Street, Omaha, NE, asked the Board if this rate increase includes the Fort Calhoun Station being operable by April 2012.  Vice President Easterlin said the proposed rate increase was based on Fort Calhoun returning to service in January 2012.  He added the costs continue to be evaluated and a determination will be made if additional rate action is necessary.  Chairman Green said the Board is extremely aware of the challenges ahead.  He mentioned the decline in the wholesale market as well as the EPA regulations that are ahead for the District and some of the issues at the Fort Calhoun Station.  He also said the Board’s intention is for management to present cost savings before any other rate action is taken.  Mr. Green also said it is important for our customers to note that the Fort Calhoun Station continues to be safe and that none of the current NRC issues have to do with the safety of the plant.   Director Thompson said there are a number of issues outside of the Fort Calhoun Station including the EPA regulations ahead for the District. 

 

 

Director Cavanaugh added that he and the other Directors take rate increases seriously, and even with this rate increase, our rates are still significantly lower than the national and regional averages.  Mr. Easterlin added that a utility’s infrastructure is typically financed over a 30-year period and that is the traditional cycle for a utility.  In 1982, our rates were 4.1 cents/kWh.  The CPI applied to the rates in 1982 would produce a rate of approximately 9.2 cents/kWh and that equates to a 2.7% annual increase in rates over that 30 year period.  In 2012, our projected rate is 7.70 cents/kWh, and that is 21% below the rate that would have been produced if we had increased our rates based on the CPI.  The actual increase is 2.1% compared to the CPI which is 2.7%.  Director Thompson added that the cost impact of the extended outage at the Fort Calhoun Station may be less as purchased power prices are lower in the winter and spring as opposed to the summer.  Following the discussion, the vote was recorded as follows:  Cavanaugh – Yes; Dodge – Yes; McGuire – Yes; Scheve – Yes; Thompson – Yes; Ulrich – Yes; Weber – Yes; and Green – Yes.  The motion carried.

 

                          RESOLUTION NO. 5894 authorizes the award of a contract for the purchase of a 67-13.8kV transformer.  Committee Chair Cavanaugh reported this contract is for the purchase of a 67-13.8kV transformer to use as a spare for the 59 units of this size that are currently in service.  Seven proposals were received and all are technically responsive and six are legally responsive.  The Engineer’s Estimate for the total contract is $575,000 and it is requested the Board award the contract to CG Power Systems USA Inc. in the amount of $493,036.   Following the discussion, the vote was recorded as follows:  Cavanaugh – Yes, Dodge – Yes;  McGuire – Yes; Scheve - Yes; Thompson – Yes; Ulrich – Yes; Weber – Yes; and Green – Yes.  The motion carried. 

 

                           RESOLUTION NO. 5895 approves an Amendment to the District’s Charter – Redistricting per 2010 Census.  Committee Chair Ulrich reported that Nebraska law requires the District to amend its Charter to reflect changes in population in its election subdivisions reflected in the 2010 Census.  Election subdivisions must have "substantially equal population." In the opinion of the District’s General Counsel, the proposed Charter Amendment, as described on the attachment to the proposed Board resolution, meets the “substantially equal population” requirement of Nebraska law. It must be approved by a three-fifths vote of the Board of Directors.  A Petition for Charter Amendment was filed with the Nebraska Power Review Board on Wednesday, November 25, 2011, and the Petition will be updated upon approval by the Board of the proposed Charter amendment.  The Power Review Board has a six-week period for public notice of charter amendments.  The District’s proposed Charter amendment will become effective upon approval by the Nebraska Power Review Board which is expected at that Board’s         January 13, 2012 meeting.  Director Ulrich added there are no split precincts in this revision to the Charter.

 

At this time, Chairman Green asked for any public comment on the Amendment to the District’s Charter item.     

 

                         Mr. Robert Twiss, 433 Sherwood Drive, Gretna, NE, addressed the Board to voice his concerns about redistricting in Nebraska.  He specifically wanted to know the deviation that is allowed.  Mr. Bruckner said the revisions to the Charter are not substantial and there is no deviation that is a concern.   

 

Following the discussion, the vote was recorded as follows:  Cavanaugh – Yes; Dodge – Yes; McGuire – Yes; Scheve – Yes; Thompson – Yes; Ulrich – Yes; Weber – Yes; and Green – Yes.  The motion carried.

 

                         Copies of the foregoing resolutions are filed in the District’s Corporate Records file.    

                         The next item of business was the opportunity for those in attendance to address the Board on any items of District concern.      

 

                          There being no further business, the meeting adjourned at 10:50 a.m.

 

________________________________                    _______________________________

E. E. Easterlin                                                               D. S. Emerson             

Assistant Secretary                                                       Corporate Secretary

 

 

Board of Directors

bullet Board Mtg Schedule
bullet Board Mtg Minutes
bullet Committee Mtg Agendas
bullet Committee Mtg Material
bullet Board Mtg Agenda
bullet Rules for Public Participation
bullet Approved Board of Directors Redistricting
bullet Preliminary 2014 Corporate Operating Plan
bullet Sustainablity Update March 20 2014
bullet Energy Assistance Program (EAP)/Common Fund

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