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HomeMy WebLinkAboutMinutes 03/10/1997Call to Order: UTILITY ADVISORY COMMITTEE Port Angeles, Washington March 10, 1997 Chairman Braun called the meeting to order at 3:00 p.m. Roll Call: Members Present: Members Absent: Stuff Present: Councilmen Braun, Campbell, and Doyle, Joe Michalczik, and Bill Myers. None. C. Knutson, B. Titus, J. Pittis, S. McLain, and C. Hagar. IlL Approval of Minutes: Councilman Doyle moved to approve the minutes of the January 13, 1997, meeting. Councilman Campbell seconded the motion, which carried unanimously. IV. Discussion Items: A. Proposed Amendment to By-Laws - Change Meeting Time to 3:00 p.m. Councilman Campbell moved to amend the bylaw changing the meeting time to 3:00 p.m. Bill Myers seconded the motion, which carried unanimously. B. Deregulation, Competition, Retail Wheeling and Their Consequences to City Light Deputy Director Titus distributed copies of an outline entitled The Future of City Light, which listed a vision stutement, utility goals, utility objectives, current issues, future options, and decision making process. He reviewed the listed items and expounded on some of the issues listed. Under current issues, retail wheeling was of concern to the committee, and Deputy Director Titus explained that things have recently changed in the Legislature and Congress. A bill was passed out of the Senate last week, which will be discussed later in the agenda, and it appears retail wheeling will be possible as early as 1999. Companies are already looking to pick up national accounts, which could mean City Light losing national chains such as Kentucky Fried Chicken, Taco Bell, and Taco Time as customers. Traditional roles within the electric and -1- Utility Advisory Committee March 10, 1997 telecommunications industries are blurring. Both are undergoing deregulation. At a recent meeting, Deputy Director Titus learned some telephone companies are seeking entry to the energy business. Owning resources will not necessarily be a benefit, but rather it will be finance and marketing driven. Discussion ensued, and Mr. Titus responded to questions posed by the Committee. Deputy Director Titus continued reviewing the outline, and at the Committee's request, he explained what stranded costs entailed and what could be done in the event of a shortfall. Mr. Titus stated that Federal Treasury risk is shifting to utilities. Attorney Knutson asked how the utility can keep customers and pay the mandated costs if Congress is opening the door to retail wheeling. Mr. Titus felt in the future utilities will require contracts with all customers, and he explained why. Lengthy discussion followed, and Mr. Titus responded to questions posed by the Committee. Mr. Titus continued and completed the review of the outline. After further discussion, it was the general consensus of the committee that Deputy Director Titus and staff should continue to analyze options and make recommendations to the UAC. V. Late Items A. Senate House Bill 6006 Deputy Director Titus distributed summaries of Senate House Bill 6006 which deals with restructuring the electric utility industry. Mr. Titus stated the Bill passed out of Committee on Wednesday, is now in Rules with the recommendation to pass. Next, it will go to the floor within 90 days. He stated that Terry Mundorf, one of the WPAG consultants, spent Sunday night with Senator Finkbeiner's staff redrafting this Bill. It is now much more public power friendly than the original bill. If this legislation goes through, July 1999 is the date retail wheeling will be available to everyone. The Bill, in an effort to protect utilities with fewer than 25,000 customers, allows the City Council the option of letting the people vote on retail wheeling in 1999. If the vote fails, another vote will take place in 2001. If it fails again, it could not be brought to the ballot again without 10% of the voters signing a petition. This could mean no retail wheeling for the smallest utilities, which means they could keep their customers. Industrial customers would probably not approve, as it would lock them into the utility. From the public utility standpoint, the changes made to SB 6006 are favorable. Discussion followed, and Mr. Titus responded to questions posed by the Committee and clarified several issues concerning this bill. At Joe Michalczik's request, staff will meet with the industrial customers for further discussion of this Bill. No action was taken. -2- Utility Advisory Committee March 10, 1997 B. Displacement of Louisville Gas & Electric (LG&E) Power Deputy Director Titus distributed information which demonstrated the energy savings that could be realized by displacement of power from LG&E. The City could save approximately $15,000 by displacing power in April, May, and June. He reviewed the information in the handout, explained how the savings would occur, and stated someone needs to be authorized to make short term power purchases and notify LG&E of a decision to displace. Councihnan Doyle moved to recommend to the City Council that City Light be authorized to institute displacement of power contracts for monetary savings for the City for a three-month period. Joe Michalczik seconded the motion. Discussion followed, and Mr. Titus asked consideration be given to not limiting the authorization to only three months. There may be similar savings in the future, and with prices fluctuating rapidly, time is of the essence in seeking displacement. Director Pittis suggested a small group be formed, consisting of Director Pittis, Deputy Director Titus, Manager Pomeranz, and a UAC member, to make the decisions as they arise. There is a contract issue, and Attorney Knutson's input may be necessary. Attorney Knutson stated the Council could delegate the authority, and after further discussion, Councilman Doyle revised his motion to recommend to the City Council that they authorize staff to negotiate displacement contracts as they occur. Joe Michalczik agreed as seconder. A vote was taken on the motion, which carried unanimously. VI. Information Only Items A. 1996 Annual Report - 3-H Cable Communications Consultants Councilman Braun asked how long the consultants were going to be retained, and was the information necessary on an ongoing basis. Councilman Campbell asked what it cost to keep the consultant, and Attorney Knutson stated he thought it was around $5,000. Attorney Knutson also explained that there are standards that the cable company must meet, and this is one of the reasons the consultant does the annual evaluation. The consultant is also used to keep staff up-to-date on what's going on in the legislative area regarding cable vision and the senior citizen discount. Staff has asked them to provide information regarding how many hours are actually spent on performing work for the City. This information will be brought back to the Committee and/or the Council for a decision as to whether the contract should continue at 5% of the franchise fee arrangement, an hourly rate, or possibly be discontinued. The City receives approximately $110,000 per year in franchise fees from the cable company. In the past, it was felt that some of the money should go to ensuring the customers are getting some supervisory capabilities. -3- Utility Advisory Committee March 10, 1997 VII. Other Information Councilman Campbell noted that he had received a letter from the PUD. Councilman Doyle noted that the letter had been addressed only to the three Council representatives of the UAC and it was regarding a meeting to discuss combined utilities. Director Pittis noted that staff had not received a copy of the letter. It was his understanding that some members of the PUD staff expressed a concern that negotiations for the water service agreement are not going well. City staff is still waiting for some requested information before negotiations can continue. Discussion followed, and it was suggested that the PUD be invited to the next UAC meeting in order to voice their concerns to the entire Committee. It was the general consensus that Director Pittis should draft a letter to be signed by Councilman Braun, as Committee Chair, inviting PUD Commissioners to attend the next UAC meeting and requesting a list of topics for the agenda. VIII. Next Meeting: The next meeting of the Utility Advisory Committee will be held Monday, April 7, 1997, at 3:00 p.m. VIII. Adjournment: The meeting adjourned at 4:55 p.m. Ch,a),~mand ~ - . ~ Deputy City Clerk -4-