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Home > About Us > Company > Board of Directors

June 2012 Board Meeting Minutes

 

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 June 21, 2012, 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, D. D. Weber, and F. J. Ulrich.  Also present were W. G. Gates, President, and S. M. Bruckner, General Counsel for the District.  Mr. Dodge, Board Chair, presided, and Ms. Emerson, Corporate Secretary, recorded the minutes.  Other members of Management present were D. J. Bannister, T. J. Burke, E. E. Easterlin, M. I. Doghman, J. T. Hansen, S. L. Hutcherson, L. A.  Olson, P. E. Lukowski, M. R. Jones, and T. G. Tamke.  Others present included several customer owners.

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 June 15, 2012; 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 April 2012 Comprehensive Financial and Operating Report and approval of the minutes and the excused absence of Director Green for the last meeting be approved. The vote was recorded as follows: Cavanaugh – Yes; Green – Absent; McGuire – Yes; Scheve – Yes; Thompson – Yes; Ulrich – Yes; Weber – Yes; and Dodge – 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 then placed on roll call. The vote on each resolution is indicated following the description of that resolution.

RESOLUTION NO. 5907 approval of Regulatory Accounting for Debt Issuance Costs. Committee Chair Cavanaugh reported that this item is to authorize regulatory accounting for debt issuance costs to be consistent with the District’s rate methodology and to levelize debt issuance impacts on customer-owners. The guidance for regulatory accounting permits the District, under certain conditions and Board approval, to include revenues and costs in a period other than the period in which these revenues and costs would be recognized by an unregulated entity. The Governmental Accounting Standards Board (GASB) has issued a new accounting pronouncement which will require the expensing of debt issuance costs in the period incurred unless regulatory accounting is used. The District’s accounting policy is to amortize these costs to expense over the life of the bond issues. The balance of unamortized debt issuance costs was $18 million as of May 31, 2012. The establishment of a regulatory asset for debt issuance costs, those previously incurred and for such costs incurred in the future, will be consistent with the District’s rate methodology which allocates these costs over the expected period of benefit and supports the District’s efforts to levelize debt issuance impacts on customer-owners. This regulatory asset will be amortized to expense over the life of the bond issues. Following the discussion, the vote was recorded as follows: Cavanaugh – Yes; Green – Absent; McGuire – Yes; Scheve – Yes; Thompson – Yes; Ulrich – Yes; Weber – Yes; and Dodge – Yes. The motion carried.

(Director Green entered the meeting at 10:05 a.m.)

RESOLUTION NO. 5908 authorizes management to commence eminent domain proceedings to acquire land for Substation 1367 in Douglas County. Committee Chair Weber reported that the Committee is asking the Board to authorize use of eminent domain as necessary to acquire land for new Substation 1367 supporting the expansion of electrical services for Douglas County. OPPD has identified the need for a new substation to support the future growth and development of west Douglas County, maintain exceptional power reliability, and continue to provide excellent customer service. One land acquisition will be required to construct the new substation of approximately 10 acres shown on Exhibit A. Formal negotiations to acquire property voluntarily will begin in mid- to late 2012. Use of eminent domain will be required after all reasonable efforts have been made to acquire land voluntarily. Eminent domain actions will be reported to the Board periodically over the next 12 months during project construction. Authorization by the Board of Directors to commence Eminent Domain proceedings on land acquisition not acquired voluntarily. Following the discussion, the vote was recorded as follows: Cavanaugh – Yes; Green – Yes; McGuire – Yes; Scheve – Yes; Thompson – Yes; Ulrich – Yes; Weber – Yes; and Dodge – Yes. The motion carried.

RESOLUTION NO. 5909 authorizes management to commence eminent domain proceedings to acquire permanent easements required for construction and relocation of existing 161kV transmission lines in Douglas County. Committee Chair Weber reported that the Committee is asking the Board to authorize use of eminent domain as necessary to acquire permanent easements for new construction and relocation of existing 161kV transmission lines to accommodate the expansion of electrical services for Douglas County. OPPD has identified the need for construction and relocation of transmission lines to support the future growth and development of West Douglas County, maintain exceptional power reliability, and continue to provide excellent customer service. Easements for the project include up to two landowners with two tracts, which will be required to construct new and relocate existing power lines. Formal negotiations to acquire property voluntarily will begin in mid- to late 2012. Use of eminent domain will be required after all reasonable efforts have been made to acquire easements voluntarily. Eminent domain actions will be reported to the Board periodically over the next 12 months during project construction. Authorization by the Board of Directors to commence Eminent Domain proceedings on any parcels not acquired voluntarily. Director Ulrich confirmed that one of the primary reasons for the substation location is that minimal transmission line construction work would be required. Following the discussion, the vote was recorded as follows: Cavanaugh – Yes; Green – Yes; McGuire – Yes; Scheve – Yes; Thompson – Yes; Ulrich – Yes; Weber – Yes; and Dodge – Yes. The motion carried.

RESOLUTION NO. 5910 rejects bids received for the Nebraska City Station natural gas igniter system equipment and authorized management to negotiate a contract. Committee Chair McGuire reported this item is to reject bids received for the Nebraska City Station natural gas igniter system equipment and authorize management to negotiate a contract. The conversion of the Nebraska City Station burner ignition system to fire either natural gas or fuel oil will provide significant fuel cost savings. Three bids were received. All three bids were legally, technically or economically non-responsive. The work is technologically complex and it is not in the public’s best interest to obtain additional sealed bids. The work is scheduled to be completed in the spring of 2014. Approval by the Board of Directors of the Engineer’s Certification and authorization by management to negotiate and award a contract to engineer, design, and supply material to enable the Unit Nos. 1 and 2 igniters to fire natural gas in addition to fuel oil at the Nebraska City Station. Director Weber asked if there were other companies that provide this material and Vice President Hansen said these are the primary original equipment manufacturers (OEMs) and OPPD has worked with them on prior projects. Following the discussion, the vote was recorded as follows: Cavanaugh – Yes; Green – Yes; McGuire – Yes; Scheve – Yes; Thompson – Yes; Ulrich – Yes; Weber – Yes; and Dodge – Yes. The motion carried.

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

The next item of business was the President’s Report. President Gates gave the following report:

FUEL

  • Continuing to work with Nebraska City utilities on a Gas Transportation Agreement for the NC pipeline
  • Working with Key Energy Services to evaluate 400,000 dekatherm gas purchase for July and August

GENERATION

  • Renewables account or 6.3% of retail sales YTD 
  • Planned maintenance outages 
    • Nebraska City Unit 1 and North Omaha Unit 2 safely and successfully completed planned outages in May 
  • Fort Calhoun Station 
    • Integrated Performance Improvement Plan (IPIP) 
      • Plan and schedule has been created and station is working on plan elements. 
      • 75% complete on discovery 
    • Regulatory
      • NRC issued our Restart Checklist and CAL on June 11. Checklist contains the major areas that will need to be addressed prior to station restart including:
        • Findings of color (Bkr Failure, Flooding, RPS M-2)
        • Flood restoration
        • Evaluation of significant programs and processes
        • Licensing actions (amendments and commitments)
        • System restart readiness
        • Review of our Integrated Performance Improvement Plan
        • The NRC has agreed to implement the continuous inspection methodology. Five inspectors will be deployed starting mid-June to start inspection activities
    • Drop in meeting w/NRC Commissioners on May 30
      • Drop in meetings were held with four of the five NRC Commissioners (including the Chairman) and the Executive Director of Operations (EDO) to discuss the on-going recovery actions at FCS
    • Public Meeting with NRC on May 31
      • A category III (open house) public meeting was held at the Double Tree Hotel. The meeting was well received by the public and was a good information exchange of our recovery actions and sustainability efforts

TRANSMISSION & DISTRIBUTION (T&D)

  • We recently completed a major transformer replacement at the Sarpy County Substation located near 36th & Cornhusker. A large transformer connecting the 69kV and 161kV transmission systems failed in the spring of 2011.
  • We hosted a North American Transmission Forum (NATF) Peer Review during the week of June 4th – 8th. The goal of the review is to “raise the bar” regarding OPPD’s operational and reliability excellence. NATF membership is comprised of 73 electric utilities. Many participants from utilities such as Exelon, MidAmerican Energy, NPPD, LES, and Con Edison focused on OPPD practices related to power grid reliability and compliance with NERC operational standards.

FINANCE

  • The District hosted our annual NC2 participant meeting June 5th at the Nebraska City Station. All of the participants were represented with the exception of Central Minnesota Municipal Power Agency. The meeting was conducted in accordance with the Participation Power Agreements and included an overview of plant operations, flood response, financial information, and Southwest Power Pool Integrated Marketplace schedules.
  • 2012 Financial Update
    • Net income for 2012 was budgeted to be $42.9 million. The current 2012 financial projection is based on a Fort Calhoun Station restart in September. The estimated FCS incremental restart and recovery cost of $32 million will be offset by operation and maintenance budget reductions throughout OPPD. In addition, a potential insurance reimbursement is assumed to offset a significant portion of the additional purchase power costs. The net income projection remains unchanged at $42.9 million. We do not anticipate an additional rate increase in 2012.

CUSTOMERS

  • Products and Services
    • 4,100 ACMP (Air Conditioner Management Program)
      • 3,100 installed and 1,000 are pending
  • OPPD was identified as one of the top three utilities in the United States in its Brand Strength. E-Source in partnership with The Nielsen Company announced its second national Utility Brand Strength Study based on a broad sample of residential customers in 84 of the top utilities in the United States. The survey consisted of nine different attributes of brand strength and value. 

TEAM

  • Several recent storms have hit the service territory and OPPD employees worked to restore all customers quickly and safely.
  • OPPD has a vision to grow talent who will maintain a strong company and to be representative of the customers we serve.
  • To accomplish this, OPPD partners with community based organizations like the Partnership for Our Kids, a non-profit organization that serves 5,000 youths from the Omaha Public Schools.
  • Over the past five years, 144 different employees from across the District have volunteered 5,176 hours in the OPD classrooms.
  • Participate in Goal Setting Program for K-6th graders by working to improve academic achievement and life skills of the students.
  • Also participate in Group Mentoring Programs for 7th – 12th Graders by working to improve the academic achievement, college access and career exploration for these students.
  • With the work of the Partnership for Kids and volunteers from OPPD, we have seen
    • 90% Reading Achievement and 87% Math Achievement of the goals set on the elementary school level, 
    • 64% of students motivated to maintain good grades at the middle school level,
    • And graduation rate of 85% or higher since 1999 and 90% of the graduating participants attend college or trade school

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

Mr David Corbin, 1002 N. 49 Street, Omaha, NE 68132, asked that the Board consider streaming the Board meetings via the internet for customers who are unable to attend the monthly meetings as well as becoming more responsive to the public regarding decisions that are made.

Mr. Ken Winston, 4905 S. 149 St., Omaha, Ne 68137, expressed his concerns over OPPD’s challenges with the North Omaha Station as well as renewable energy and greater energy efficiencies and about opportunities for organizations such as the Sierra Club and others to partner with OPPD to find solutions.

Mr. Duane Hovorka, 409 310 Street, Elmwood, NE, told the Board that he was impressed with OPPD’s conservation efforts and encouraged the Board to continue to look at additional opportunities for energy efficiency programs.

Mr. Graham P. Christensen, 5653 S. 186 Ave., Omaha, NE 68135, briefed the Board on the Burt County Wind, LLC. A handout is attached.

There being no further business, the meeting adjourned at 10:45 a.m.


_______________________________ _______________________________
M. I. Doghman                                           D. S. Emerson 
Assistant Secretary                                   Corporate Secretary

 

Board of Directors

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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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