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Home > About Us > Company > Board of Directors

July 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 July 12, 2012, at 10:00 a.m.

Present were Directors M. J. Cavanaugh, N. P. Dodge, J. K. Green, 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, J. W. Thurber, R. C. Shaneyfelt, T. R. Vasequez, J. J. Stevens, K. R. Dungan, D. Jacobberger, M. R. Jones, R. J. Rogers, and D. Begley of IBEW Local Union No. 1483 and C. Perkins and Jim Wright of IBEW 763. Others present included J. Petr of Kutak Rock, and 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 July 6, 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 May 2012 Comprehensive Financial and Operating Report and approval of the minutes for the last meeting be approved. The vote was recorded as follows: Cavanaugh – Yes; Green – Yes; McGuire – Absent; 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 next order of business was the Board’s consideration of the authorization for the creation and issuance of the Electric System Revenue Bonds, 2012 and 2013 Series.

The Corporate Secretary read a motion to dispense with the reading in full of Resolution No. 5911 as follows:

"BE IT RESOLVED THAT, because a copy of Resolution No. 5911 has been furnished to each Director in advance of this meeting, the reading in full of the Resolution in this meeting by the Secretary be dispensed with except for those portions of the Resolution which have been materially revised and the additions necessary to complete said Resolution."

It was moved and seconded to dispense with the full reading of RESOLUTION NO. 5911. The vote was recorded as follows: Cavanaugh – Yes; Green – Yes; McGuire – Absent; Scheve – Yes; Thompson – Yes; Ulrich – Yes; Weber – Yes; and Dodge – Yes. The motion carried.

Following the preceding vote, Board Chair Dodge called upon Mr. John Petr, a partner with Kutak Rock, the District’s Bond Counsel, for changes to Resolution No. 5911. Mr. Petr confirmed there have been no material changes or additions to Resolution No. 5911 since its distribution to the Board.

Director Cavanaugh said that Management believes that, if tax-exempt interest rates continue to drop in the future or if the District’s liquidity decreases below an acceptable level, it may be advantageous for the District to refund existing debt and/or fund a portion of the capital program outlined in the District’s 2012 Corporate Operating Plan and 2013 financial projections.

Whether Management issues debt to refund existing debt and/or fund a portion of the District’s capital program, it may issue one or more new series of bonds to be known as the 2012 or 2013 Series Electric System Revenue Bonds with such additional letter designations as deemed appropriate at the time of issuance. The bonds will be traditional tax-exempt bonds.

The Board of Directors will receive quarterly updates on the status of the bonds. Final pricing of a series of the bonds will be communicated to the Treasurer or the Chairman of the Board of Directors by delivery of a Pricing Certificate and will be presented at the next regularly scheduled Board Meeting immediately following the execution of the Bond Purchase Agreement.

Chairman Dodge then called upon Mr. Jon Petr for the opinion of Bond Counsel. Mr. Petr confirmed that on issuance of any Bonds in accordance with Resolution No. 5911, Kutak Rock will be in a position to render its opinion that the Bonds are validly issued under Nebraska law and that the interest is tax exempt for federal and state purposes.

Chairman Dodge then called upon Mr. Bruckner to provide the legal opinion. Mr. Bruckner said his firm as General Counsel of the District, has examined the proposed Series Bond Resolution designated as Resolution No. 5911 for the issuance by Omaha Public Power District of the Electric System Revenue Bonds, 2012 or 2013 Series. It is the General Counsel’s opinion that the Board of Directors of the District may legally adopt said Series Resolution, and authorize the issuance of the 2012 or 2013 Series Bonds in an aggregate amount not to exceed $550 million with such authorization being granted through and including December 31, 2013. At this time, Mr. Bruckner provided the firm’s legal opinion to the Corporate Secretary. Following the discussion, the vote was recorded as follows: Cavanaugh – Yes, Dodge – Yes; McGuire – Absent; Scheve – Yes; Thompson – Yes; Ulrich – Yes; Weber – Yes; and Green – Yes. The motion carried.

The next order of business was the Board’s consideration to approve the Official Statement and provide authority to execute the Pricing Certificate and Bond Purchase Agreement for the 2012 or 2013 Series Bonds through December 31, 2013.

The Corporate Secretary read a motion to dispense with the reading in full of Resolution No. 5912 as follows:

"BE IT RESOLVED THAT, because a copy of Resolution No. 5912 and the Preliminary Official Statement incident to the 2012 or 2013 Series Bonds have been furnished to each Director in advance of this meeting, the reading in full of the Resolution and the Preliminary Official Statement in this meeting by the Secretary be dispensed with except for those portions of the Resolution and Preliminary Official Statement which have been materially revised and the additions necessary to complete said Resolution and the Preliminary Official Statement."

It was moved and seconded to dispense with the full reading of RESOLUTION NO. 5912. The vote was recorded as follows: Cavanaugh – Yes; Green – Yes; McGuire – Absent; Scheve – Yes; Thompson – Yes; Ulrich – Yes; Weber – Yes; and Dodge – Yes. The motion carried.

Following the preceding vote, Board Chair Dodge called upon Mr. John Petr, a partner with Kutak Rock, the District’s Bond Counsel, for changes to Resolution No. 5912.  Mr. Petr confirmed there have been no material changes or additions to Resolution No. 5912 since its distribution to the Board.

Director Cavanaugh said that due to the recent volatility of the tax-exempt market, the District’s Financial Advisor, Barclays Capital Inc., has indicated that it is in the District’s best interest to execute a Bond Purchase Agreement on the same day that a series of Bonds is sold.  To facilitate this, Resolution No. 5912 approves the Official Statement and provides authority for the President and Chief Executive Officer or the Vice President and Chief Financial Officer to execute Investment Banking Agreements, Pricing Certificates and Bond Purchase Agreements for the 2012 or 2013 Series Bonds through December 31, 2013.  This authority would allow the Bonds to be sold when acceptable market conditions exist regardless of the timing of regularly scheduled Board meetings.  Pursuant to Resolution No. 5911, a written opinion of the District’s Financial Advisor will certify to the Board that the terms for the 2012 or 2013 Series Bonds reflect rates competitive with current market conditions.  Final pricing of any 2012 or 2013 Series Bond issue will be presented at the scheduled Regular Board Meeting immediately following the execution of the Bond Purchase Agreement.

Chairman Dodge then called upon Mr. Bruckner to provide the legal opinion.  Mr. Bruckner said his firm as General Counsel for the District, has examined the form of the Bond Purchase Agreement that is to be negotiated, executed, and delivered to one or more groups of local and national investment banks (collectively, the “Underwriters”) for the purchase of the Omaha Public Power District Electric System Revenue Bonds, 2012 or 2013 Series and the form of the Preliminary Official Statement for use in connection with the issuance by the Omaha Public Power District for the 2012 or 2013 Series Bonds.  In addition, his firm reviewed the form of Resolution No. 5912 authorizing the retention of those Underwriters for the negotiated sale of 2012 or 2013 Series Bonds and authorizing and approving the use of one or more Official Statements in substantially the form of the Preliminary Official Statement (together with such further modifications, updates, and amendments as, in the judgment of the President and Chief Executive Officer or the Vice President and Chief Financial Officer of the District, are necessary or appropriate for use in connection with the offering and sale of the 2012 or 2013 Series Bonds).  Mr. Bruckner also indicated it is the General Counsel’s opinion that the Board of Directors of the Omaha Public Power District may legally adopt Resolution No. 5912 authorizing the President and Chief Executive Officer or the Vice President and Chief Financial Officer of the District to execute and deliver one or more Pricing Certificates, Bond Purchase Agreements, and Official Statements for the 2012 or 2013 Series Bonds through December 31, 2013.  At this time, Mr. Bruckner provided the firm’s legal opinion to the Corporate Secretary.  Director Green asked Vice President Edward Easterlin to summarize the actions taken by the Board for the audience.  Vice President Easterlin indicated that Management is receiving authorization to issue bonds based upon acceptable market conditions.  The issue is the timing between the market conditions and the Board’s approval, and this authorization allows Management to be in the position to be in the market when it is economical for us to do so.  In addition, the District was looking at issuing new debt for capital in 2013; however, we have bonds that are very close to being able to be refunded and we are looking to advance the new debt issue to combine with a refunding debt issue in 2012 or 2013.  He added that before Management can proceed to the market, the rating agencies must confirm our bond rating and that will occur in August.  Following the discussion, the vote was recorded as follows:   Cavanaugh – Yes, Dodge – Yes; McGuire – Absent; Scheve – Yes; Thompson – Yes; Ulrich – Yes; Weber – Yes and Green – Yes.  The motion carried.

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. 5913 approval of Disposition of Certain Passenger Vehicles to Charitable Organizations Policy.  Chairman Dodge asked the Board to approve tabling this action for 30 days in order for the Board to gather additional information.   Following the discussion, the vote was recorded as follows:  Cavanaugh – Yes; Green – Yes; McGuire – Absent; Scheve – Yes; Thompson – Yes; Ulrich – Yes; Weber – Yes; and Dodge – Yes.  The motion carried to table this resolution for 30 days.

RESOLUTION NO. 5914 authorization to award a contract to build/rebuild transmission lines for Substation 1366.  Director Scheve reported that this contract is to procure contract labor to build/rebuild 4.5 miles of transmission lines.  This contract provides labor to build/rebuild two existing transmission lines to connect to new Substation 1366 at 27th and Platteview Road in Bellevue, NE.  Five proposals were received.  All proposals are legally and technically responsive. The Engineer’s Estimate is $1,900,000.  Director Ulrich asked if this contract includes the removal of old transmission lines and Vice President Doghman indicated removing old lines is included in the project.  Following the discussion, the vote was recorded as follows:  Cavanaugh – Yes; Green – Yes; McGuire – Absent; Scheve – Yes; Thompson – Yes; Ulrich – Yes; Weber – Yes; and Dodge – Yes.  The motion carried.

RESOLUTION NO. 5915 approves compensation adjustments for Chief Financial Officer Edward E. Easterlin, Vice President Timothy J. Burke, Vice President Mohamad I. Doghman, Vice President Jon T. Hansen, and Vice President Sherrye L. Hutcherson.  Director Green reported that compensation adjustments for corporate officers are approved by the Board of Directors on an annual basis.  Exhibit A lists the compensation adjustments and effective dates for the following Corporate Officers:

Timothy J. Burke, Vice President – Customer Service and Public Affairs

Mohamad I. Doghman, Vice President – Power Grid and Energy Delivery

Edward E. Easterlin, Vice President and Chief Financial Officer

Jon T. Hansen, Vice President – Energy Production and Marketing

Sherrye L. Hutcherson, Vice President – Essential Services

Director Green also said this is an annual review of the senior managers and approval of the adjustments will maintain competent and competitive salaries for these individuals. Following the discussion, the vote was recorded as follows: Cavanaugh – Yes; Green – Yes; McGuire – Absent; 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

  • Purchased an additional 50 MW on peak (5x16) for July for $29.50/MWh
  • On June 11, signed a contract with Luminant Energy for the purchase of 256,000 tons of spot coal for delivery in 2012.
  • On June 21, Globe Nuclear Services and Supply delivered 49,875 KgU as UF6 for the next Fort Calhoun reload. The was the last of 6 annual deliveries from the contract that was signed in 2006

GENERATION

  • Renewables account or 6.3% of retail sales YTD
  • Three additional projects:  Broken Bow I, Broken Bow II and Crofton Bluffs are under construction and will provide an additional 76 MW
    • Currently Broken Bow II is behind schedule due to a fault study which is being required by General Electric before they will guarantee their turbines.
  • Continue to work with Nebraska City Utilities on a Gas Transportation Agreement for the Nebraska City Station natural gas pipeline
  • Kiewit began providing outside labor services to the generating stations on July 1
  • Fort Calhoun Station
    • Plant Status & Activities
      • Plant remains in a safe condition in cold shutdown with fuel loaded in the reactor.
      • Electrical power sources are in a normal alignment for plant conditions.
    • Flood Recovery CAL Actions
      • FR CAL has been closed out and the remaining open items put into our new IMC 0350 CAL
      • Geo-Technical Evaluation
      • Maintenance Shop remediation complete – Turbine building drain line remediation complete.
      • Brought in an independent consultant to analyze specific site areas based upon the initial report.
      • Consultant verified what building expansion area was void free based upon borings.  Findings will be used to finalize the report.
    • Recovery Plan - 95003 Inspection delivery attributes nearly complete
    • 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

    The next public meeting with the NRC will be Tuesday, July 17 at the Doubletree Hotel in downtown Omaha.

TRANSMISSION & DISTRIBUTION (T&D)

  • A storm moved through the service territory Thursday evening, June 14
    • Approximately 10,300 customers were out at the peak Thursday evening.  The storm was primarily isolated to the southeastern portion of the Metro area.  Crews restored service by Friday evening.
  • NC to Maryville high voltage transmission line project is proceeding. 
  • KCP&L and OPPD have met with U.S. Army Corps of Engineers in KC to discuss the potential Missouri River crossing locations. In- service date is June 2017.
  • Met with Stratcom to discuss options to improve the reliability of the power system. 

FINANCE

Staff continues to work with FEMA and insurance representatives to complete the requirements necessary to collect reimbursable flood related expenses, property damages, and an extended outage claim related to the flood event and the FCS breaker fire.

CUSTOMERS

  • On June 27, July 2, 5 and 6, the Air Conditioning Management Program cycling was initiated with relatively few problems or concerns.
    • Resulted in an estimated savings of 6 MW
    • Currently we have 5593 customers signed up to participate in the ACMP program
  • On July 5 and July 6, as a whole, OPPD curtailed 67.7 MW and 28.5 MW, respectively
  • Received notification from JD Power and Associates that OPPD is the Midwest Top Electric Utility in Customer Satisfaction for the 12th year in a row
  • We are developing a Stakeholder process to get input on the future use of our generating facilities

It is our goal at Omaha Public Power District to provide our customer-owners with the most reliable, affordable and diverse energy generation portfolio possible.  As you can imagine, that takes into account many aspects and it is important to consider all options. 

Currently have studies underway to provide analysis of some base case and potential scenarios

Over the years OPPD has utilized a stakeholder process for substation and transmission siting projects and included local stakeholders in the process.  We also recognize that not all critical District issues are localized issue and ultimately affect all of our customer-owners. 

We look forward to working with our customer-owners and other stakeholders to help them to better understand what the future mix for electricity generation will look like in the coming decades.  Our goal is to use a resource mix that reflects and balances the needs and desires of our customer-owners in an economical and environmentally compliant manner.

In our strategic plan, we have identified initiatives that will address and formalize the stakeholder process to ensure we communicate with all interested parties that are identified

PEOPLE/TEAM

  • The OPPD Young Professionals Group exists to offer and create opportunities for professional and personal development to young professionals as well as represents the next generation’s ideas to management
  • The 2012 Omaha Chamber of Commerce Young Professionals Summit was held.
    • 89 Young Professionals across the company attended the city-wide event

At this time, Director Green asked John Thurber to introduce the members of his team.  In attendance were Jim Stevens, Tim Vasquez, Rick Shaneyfelt, and Kris Dungan.

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

Mr John Pollack, 1412 N. 35 Street, Omaha, NE 68131, briefed the Board on future weather forecasts and thanked the Board for their efforts on reducing OPPD’s peak demand.

Mr. Ken Winston, 4905 S. 149 St., Omaha, Ne  68137, expressed his appreciation for OPPD’s stakeholder process and going forward, he would like OPPD to enlist the Nebraska Sierra Club and its resources in developing an energy plan.

Mr. Laverne Thraen, 4728 Cass St., #12, Omaha, NE  68132, asked the Board for additional information on OPPD’s coal costs as they relate to other states (Average annual increases in delivered coal costs by state - PDF) as well as a timeline for converting OPPD generating stations to natural gas. President Gates indicated Management would contact Mr. Thraen to discuss further.

Mr David Corbin, 1002 N. 49 Street, Omaha, NE 68132, asked the Board if the metrics surrounding the Nuclear Safety Culture Assessment would be discussed at the July 17 public meeting.  Information was provided by Vice President Bannister.

Director Scheve reminded everyone that the August Board of Directors meeting will begin at 7:00 p.m. and will be held in Blair, NE.

There being no further business, the meeting adjourned at 10:52 a.m.

 

Edward E. Easterlin
Assistant Secretary

D. S. Emerson
Corporate Secretary

 

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bullet Committee Mtg Agendas
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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