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Home > About Us > Company > Board of Directors

October 2012 Board Meeting 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 October 11, 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 Steve Bruckner and Troy Meyerson, General Counsel for the District.  Mr. Dodge, Board Chair, presided, and Ms. Emerson, Corporate Secretary, recorded the minutes.  Other members of Management present were T. J. Burke, E. E. Easterlin, J. T. Hansen, S. L. Hutcherson, T. J. Nissen, L. A.  Olson, D. C. Mueller, T. G. Tamke, D. Jacobberger,  M. R. Jones, P. E. Lukowski. James Williams and James Shield from Invenergy LLC, as well as several OPPD employees and 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 October 5, 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 August 2012 Comprehensive Financial and Operating Report and approval of the minutes and the excused absence of Director Thompson for the last meeting be approved.  The vote was recorded as follows:  Cavanaugh – Yes; Green – Absent; McGuire – Yes; Scheve – Yes; Thompson – Abstain; 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. 5925 authorization to use Insurance Recovery to reduce FPPA Receivable.  Committee Chair Cavanaugh reported that this item is to authorize the adjustment of the FPPA rate formula and FPPA receivable for any insurance recovery from Nuclear Electric Insurance Limited (NEIL) relating to the Fort Calhoun Station (FCS) outage.  The District has an insurance policy with NEIL which, after a 12-week deductible period, provides for a weekly indemnity of $1.5 million for an outage that is caused by accidental property damage at the FCS. The insurance policy was acquired to mitigate the financial impact of qualifying outages at the FCS including additional purchased power expenses.  Additional purchased power expenses, due to the FCS extended outage, have resulted in a significant increase in the FPPA receivable from customer-owners.  The District expects to receive insurance proceeds under this policy in 2012.  The use of these insurance proceeds to reduce the FPPA receivable will help offset the impact from additional purchased power expenses for the FCS extended outage, consistent with the objective of this insurance policy.  In addition, the FPPA rate formula, as set forth in Rate Schedule 461, will be adjusted to reflect the application of the insurance recovery to the FPPA under-recovered balance.  Board approval is needed to use insurance recovery to adjust the FPPA formula and reduce the FPPA receivable.  Vice President Easterlin added this is housekeeping item to allow management to make the necessary changes to the FPPA tariff and also an accounting basis, so management can take the proceeds of the insurance payment and apply to the FPPA adjustment to reduce future rate increases to customers.  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. 

RESOLUTION NO. 5926  authorization for management to negotiate and enter into a contract for the design, purchase, fabrication, and installation of Cured-in-Place Piping (CIPP) in the leaking drain piping below the concrete slab of the turbine building basement at the Fort Calhoun Station.  Committee Chair Thompson reported there is constant uncontrolled groundwater entering the turbine building under slab drainage piping due to broken, cracked, and loose joints.  This uncontrolled infiltration has allowed water and soil particles to enter the drainage system creating negatively affected soil under the turbine building.  Previous grouting attempts to stop the infiltration have not been successful and the affected soil cannot be allowed to continue to expand in size and depth.  Continued expansion would begin to affect the turbine building foundation and could affect other structures.  Stopping the expansion is a flood recovery commitment to the Nuclear Regulatory Commission.  Compliance with sealed bidding provisions of the Nebraska Revised Statutes Sections 70-637 through 70-639, as amended, would be impractical and not in the public interest.   Installation of the Cured-In-Place Piping is a permanent solution to stop the expansion of the negatively impacted soil.  Approval by the Board of Directors of the Engineer’s Certification and authorization for management to negotiate and enter into a contract for the design, purchase, fabrication, and installation of Cured-in-Place Piping (CIPP) and any other associated equipment and services required for the Fort Calhoun Station is being requested.  Director Ulrich inquired if this process is new.  Vice President Hansen said it has been used in the nuclear industry for the last 20 years and is the most cost effective method.  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.    

RESOLUTION NO. 5927 authorizes the purchase of a spare 18/24/30 (33.6) MVA transformer.  Committee Chair McGuire reported that this item is to approve the Engineer’s Certification and authorize management to negotiate and enter into a contract for the purchase of a spare 18/24/30 (33.6) MVA transformer.  On August 12, 2012, a 15/20/25 (28) MVA, 161-13.8kV transformer failed at Substation 1251 (Fort Calhoun Station). Replacement of that failed transformer will utilize the District’s only spare transformer of that size. The District’s 161kV mobile substation failed on September 10, 2012 so it is not available to provide backup service in the event of another transformer failure.  The District has an active contract with CG Power for a similarly sized transformer (18/24/30 (33.6) MVA) that will be utilized at new Substation 1366. CG Power has offered to supply a second unit for the same base price as the original unit, with delivery in the April/May 2013 timeframe. This slightly larger size of transformer would be adequate as a spare for the 28 MVA units in service and would serve as a spare for the size to be used at Substation 1366 and future substations.  Utilizing the sealed bid process to procure a spare transformer is not in the public interest given the risk that delay in the purchasing process would likely lead to higher costs and delayed delivery, as well as compromise system reliability in the event of a transformer failure. Approval by the Board of the Engineer’s Certification and authorization for management to negotiate and enter into a contract with CG Power to purchase a spare 18/24/30 (33.6) MVA transformer at the cost of $592,043 without complying with sealed bid procedures in accordance with Section 70-637 is being requested.   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.    

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

On August 25, OPPD signed a 3-Way Monitoring Agreement with Natural Gas Pipeline of America (NGPL) and Nebraska City Utilities (NCU).

The agreement will allow use of the NCU meter at Nebraska City Station (NCS) for all volume calculations.

This is the second of three agreements needed to deliver natural gas from NGPL’s interstate pipeline at Avoca across the NCU distribution system to NCS starting in 2013.

This natural gas will be used for the startup of NC1 and NC2 and will replace the more expensive ultra-low sulfur No. 2 fuel oil used now.

On September 13, we received 5 proposals from three Powder River Basin coal producers and one utility in response to our request for 300,000 tons of spot coal for delivery in fourth quarter of 2012. 

The bids have been evaluated and the purchase was reported to the Board on Tuesday’s Committee meetings

GENERATION

Renewables account for 4.9% of retail sales YTD

This figure is down slightly from previous month’s 5.3% for a couple of reasons:

The capacity factor of wind is lowest in the summer season.  Therefore, the percentage renewable will decrease as you go thru the summer season.

Retail load is highest in the summer season.  Therefore, the percentage renewable will decrease as you go thru the summer season.

SPP Integrated Marketplace (Day 2) has been downgraded from Green (Go Live 3/1/2014) to Yellow (behind schedule).

SPP Vendors are behind schedule for settlements, market engine, registration, testing, and integration. 

OPPD and other SPP Members are behind schedule due to SPP Vendors behind schedule. 

Dry sorbent testing on Nebraska City Unit 1 was completed during a 20 day test period between September 10 and September 29.  This testing will provide us information to help us to make a more informed decision on MATS (Mercury Air Toxics Standard) compliance.

Special Recognition to:

157 days of continuous operation of NC2 (running record) at the Nebraska City Station.

The Peaking Plants’ staff for reaching 18 years without a lost time accident at the end of September.

Central Maintenance Machinists on reaching the 14 year milestone without a lost time injury on September 24, 2012.

Fort Calhoun Station  

Plant Status

Plant remains in cold shutdown

Status of On-going Work

The repairs to the fuel transfer carriage and up-ender were completed and core off-load recommenced and completed on 9/20. 

Next week the station will be going to full outage 24/7 to support start-up of the unit

Next month we will report on long-standing repair of Manhole 31

Continue to work on pertinent projects including containment electrical penetrations and containment structural beams

Regulatory

Drop-in meetings were conducted with the Region IV Regional Administrator and the NRC Commissioners and Chairperson.  Overall the meetings were well received with a good exchange of information.

FCS Focus

Completed the September 11th NRC public meeting

Next NRC public meeting will be November 15 and the location is yet to be determined


TRANSMISSION & DISTRIBUTION (T&D)

The transmission and distribution system performed at a high level of reliability in the last month.

Leaders from Energy Delivery met with personnel at StratCom’s Global Operations Center to continue a dialogue surrounding survivability of the base.

The first Nebraska Line Technician’s Rodeo was held on August 24-25 at the Nebraska State Fair. 

LES hosted the event in which a number of utilities participated. 

The event demonstrated to attendees at the Fair the climbing and safety skills that our line technicians use in providing electric service to our customers. 

The event was well received and the State Fair Board is going to enter the event in a national competition for “best new event/competition at the fair.”

OPPD received the results of a national benchmarking survey for transmission and distribution. 

Results of the survey placed OPPD in the first quartile performance level for the distribution area. 

The survey performed comparisons of 2011 costs and reliability amongst participating utilities. 

Notably, OPPD reduced the Distribution O&M cost per customer by 8% as compared to the 2010 data.

FINANCE

The Board of Directors at the July Board meeting authorized management to issue up to $550 million of Electric System Revenue Bonds for refunding and construction purposes through the end of 2013. 

Due to the favorable interest rate environment, OPPD sold two series of bonds on September 20.  The sale was very successful with orders for $2.4 billion of bonds. 

The 2012 Series A Bonds were sold in the amount of $272,655,000 at an average interest rate of 3.73%.  A portion of the 2012 A Bond proceeds were used to reimburse the District for previous capital expenditures and the remainder will be used to finance a portion of the District’s 2013 capital program. 

The 2012 Series B Bonds were sold in the amount of $226,715,000 at an average interest rate of 3.58%.  Proceeds from the 2012 B Bonds were used to refund a portion of the 2005 Series B Bonds and all of the 2006 Series A Bonds. 

Due to the low interest rates achieved on the 2012 B Bonds, the District will save approximately $27 million in reduced debt service costs over the next 30 years (approximately 11.5% present value savings). 

The bonds were issued to the bondholders and the proceeds were received by the District on October 10.

CUSTOMERS

OPPD held its 15th Annual Customer Meeting on October 4 at the Kroc Center.  They were over 200 customers in attendance to hear the State of OPPD.  All feedback from the meeting has been positive.

We have 11,500 signups for ACMP to date and 7,300 units have been installed to date.

There was discussion on an Omaha radio station that customers were cancelling the program

OPPD found that our actual churn rate is 1.3% (109 out of 11,500) of total customers have elected not to stay with the program

OPPD has over 23,736 customers on the Residential Surge and 19,911 on the In-Home Electric Protection Program.

OPPD completed another Speakers Series event on October 2. The event this month was entitled  Electricity 101

Call volumes remain high in October due to the increased usage this summer due to the extreme heat.

OPPD’s Customer Care Services answered 500,750 calls in 2011 and 508,125 year to date in 2012

The call mix is more complex and calls are taking longer. This is resulting in periods of time where call queues are longer than normal.  For example:  The max wait time on 9/27/2012 was 16:30 between 6:30 pm and 7 pm when our staffing levels are lower.

The call center is activating the following measures to reduce customer wait times:

Postponing all non-essential training until this winter when call volumes are lower.

Mandating overtime during peak times of the day and week.

Activated a vacation freeze during the month of October.

Also, we are expecting relief when the customer service hours change on 11/4, and there are more resources available during our peak times. 

PEOPLE/TEAM

The OPPD Young Professionals Group consists of about 215 employees from all age groups from all across the company. 

The Group:

Offers and creates opportunities for professional and personal development to young professionals as well as represents the next generation’s ideas to management. 

Collaborates with other OPPD sponsored groups to better utilize OPPDs resources and expand on learning and development opportunities.

Through collaboration with these groups, the YPG have seen conversations and ideas spread throughout OPPD across functional work and geographic barriers.

Today the YPG will host the 2nd Annual OPPD YPG Summit.  The Summit is being held at the Salvation Army Kroc Center and for this event, we are expecting about 115 OPPD employees from across the company to be in attendance.  

Featured speakers for the event are:
Sandy Dodge, Chairman of the OPPD Board of Directors and President of N.P. Dodge Company
Susan Jacques, President and CEO of Borsheims
Mary Ann O’Brien, CEO and Founder of OBI Creative

The OPPD Senior Team will also be available for a round table discussion

Director McGuire asked Vice President Burke to talk about the coordination between outside agencies and OPPD to assist our customers who are having difficulty paying their utility bills.  Mr. Burke indicated OPPD works with a variety of agencies to address the customer’s issues and concerns, whether it be difficulty in paying a utility bill to the customer’s service being disconnected because of safety reasons.

(Director Green entered the meeting at 10:25 a.m.)

Director McGuire also asked Mr. Burke to comment on the coordination with the re-Energize Program.  Mr. Burke indicated OPPD has submitted a proposal to the City of Omaha that would focus on some commercial businesses within the Re-Energize Program.  He also said that discussions are on-going concerning supporting residential customers. 

Director Weber asked Vice President Burke to talk about the effectiveness of the Air Conditioning Management Program.  Mr. Burke commented that, although the District saw its highest kilowatt consumption this summer, OPPD did not set a peak demand.  He also said that the Air Conditioning Management Program, along with commercial and industrial programs already in place, assisted with keeping the demand down.  This allows us to defer future generating facilities. 

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

Mr. Ken Winston, 4905 S. 149Street, Omaha, NE  68137, who represents the Sierra Club told the Board he recognizes and appreciates the communications and wants to maintain the relationship that has been established with OPPD’s executive team.  Mr. Winston also presented a report authored by Ron Binz to the Board of Directors  

Mr. Jim Shield, Executive Vice President of Invenergy LLC, provided the Board with information on Invenergy, LLC, and talked about two wind proposals currently before OPPD.  The Board asked Mr. Shield to continue his discussions with OPPD personnel.

Mr. Mark Welsch, 5611 Howard St. Omaha, Ne  68106 asked the Board to work with the District’s lobbyists to ensure Nebraska delegation understands the significance of extending the production tax credits for wind projects.   Vice President Burke indicated that the Nebraska delegation is very supporting of this extension.   

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

 

Edward E. Easterlin                                                    D. S. Emerson            

Assistant Secretary                                                     Corporate Secretary

 

 

Board of Directors

bullet Board Mtg Schedule
bullet Board Mtg Minutes
bullet Committee Mtg Material
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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