MUNICIPAL ELECTRIC POWER ADVISORY BOARD
December 4, 2008
HMLD 7:00 p.m.
Members Present: Donna Fitch, Gary Harrington, Peter Liddy, and Tom Runstrom
Also Present: David White, Selectman, Brian Bullock, Town/Light Manager, Jacquie Kelly, Assistant Town Manager, Michael Flagg, General Foreman, Margaret Donaldson, Office Manager
On a motion by Tom Runstrom, second by Gary Harrington, it was voted to appoint Peter Liddy as Chair. On a motion by Gary Harrington, second by Donna Fitch it was unanimously voted to approve the minutes of December 18, 2007 as presented.
2008 Power Supply
Brian Bullock discussed 2008 power supply issues that have occured over the past year. Unexpected increases in the cost of power due in large part to fuel costs, required that the HMLD take certain actions. The PCA and PASNY credit were adjusted quarterly: in April 2008, the PCA was increased by $0.01 making the new PCA $0.03945/kWh (Residential). In July 2008, the PCA was increased by $0.02 and the PASNY credit increased by $0.01 with a resulting Residential PCA of $0.04945 per kWh. In October 2008, the PASNY credit was lowered by $0.005, raising the Residential PCA to $0.05445 per kWh. The General Service and Small Commercial rate payers do not qualify for the PASNY credit so their PCA is currently $0.06445.
The HMLD also transferred $250,000 from its Rate Reserve Trust and a like amount from Depreciation to offset projected cash deficits in the Department's operating fund.
2009 Operating and Capital Budget
Jacquie Kelly reviewed the highlights of the proposed 2009 HMLD Budget. No further overall rate increases are projected in the 2009 budget, which is basically a "status quo" budget. Out of a total expense budget of about $15.5 Million, 16.9% are for department operations or a total of $2,625,870. The remaining expenses are for the purchase of power. The expenses have increased about 1% from 2008 to 2009 or $18,345.
The main changes are the budgeting of a financial/operations position in line #920, Administrative Salaries, in the amount of $80,000; the increase of $22,000 in Employee Benefits, line #926; wage adjustment/retro in the amount of $30,000 in line item #588; an increase of $50,000 for completion of the Industrial Park refurbishment project; and the addition of $5,000 in line #390 for a new meter tester. The Electronic sign was not purchased in 2008 so it has been re-budgeted in line #390 for 2009.
The budget shows an increase in sales revenue of 3.5% or $528,751 over last year. This mainly reflects the increase in revenue anticipated from the PCA adjustments. Also included as an increase in sales, is a proposed $0.0005 per kWh increase to support the HMLD's membership in the MA Technology Collaborative. This kWh charge will recoup approximately $50,000 per year which will be paid to the MTC as a membership fee. The Board supported the budget as presented and asked to review the final budget prior to adoption by the Board of Selectmen (1/5/09).
Jacquie Kelly reported on the Rate Study being done for the Department by Rates by Design. Chuck Underhill, principal of Rates by Design, has met with Department staff on a preliminary basis to review the base rate and PCA. The last rate study was done in 1998 and the cost of power has increased since that time. The base rate will likely be adjusted to cover a portion of the increased fuel charges. If that occurs, the PCA would be lowered so the resulting overall rate would be revenue neutral. Mr. Underhill has also suggested a revised method to adjust the PCA. Basically, his calculation would estimate the PCA going forward by the month based on MMWEC's projected bulk power charges. Presently, the Department makes adjustments to the PCA looking backward at the last quarter. Recommendations are expected by the end of January 2009.
MA Technology Collaborative
Brian Bullock discussed the MTC and the benefits of becoming a member. Membership would allow town residents and businesses, including the Town itself, to apply for grants to install alternative energy projects such as solar panels or wind turbines. The Department has received several inquiries from customers asking if they are eligible. Once the HMLD joins the Collaborative, it is a permanent membership.
On a motion by Peter Liddy, second by Donna Fitch, it was unanimously voted to join the MTC.
PV Solar Project
Brian Bullock gave an update on the plan to install photo voltaic panels at the Holden Light Department headquarters. A study is being conducted to align the panels so they general maximum solar power. The energy will be fed back into the local grid.
Industrial Park Project
Mike Flagg showed a series of photographs to provide an update on the work being done by town forces at the Industrial Park. All underground lines are being upgraded and replaced as necessary. The old stand pipes are also being upgraded as the project progresses. The project is expected to be complete by spring 2009.
Mike Flagg reported that a sound wall will be installed at the Bullard Street Substation. The sound wall is meant to block the noise generated by the transformers from disturbing the neighbors. It is a modular system called "Sound Fighter" that will be installed on concrete footings and a reinforced steel frame. HMLD forces will be doing the work. It is hoped that it can be completed this year.
Appliance Rebate Program
Margaret Donaldson reviewed the Department's appliance rebate program. As of November 2008, customers have taken advantage of the program to a total of $14,375 in credits to light bills. The Percy's event of 2008 was not as well attended as the prior year due to the weather. It was held earlier in the spring before the temperatures became warm enough for customers to be seeking out air-conditioners. Overall, the Program has been a big success and $15,000 is again budgeted for 2009.
Brian Bullock gave an update on the Berkshire Wind project, the Heat Rate Power Contracts secured by our consultant Energy New England, and the Town's committee Help at HOME.
There being no further business, on a motion by Tom Runstrom, second by Donna Fitch it was voted to adjourn the Municipal Electric Power Advisory Board meeting at approximately 8:20 p.m.
Prepared by: Jacquie Kelly, Assistant Town Manager