ABAG Power Executive Committee Meeting 99-01

ABAG Power: Executive Meeting Minutes

ABAG Power Executive Committee Meeting 99-0
January 20, 1999 n Alameda County Public Works Agency
951 Turner Ct., Rm 230C - Hayward

Welcome and Introductions

Ken Blackman opened the meeting with introductions at 12:05 p.m.

Committee Representatives	Jurisdictions
Ken Blackman Alan Nadritch Mike Garvey John deRussy Wayne Green Ross Hubbard Kathy Brown Christine Cleary David Finigan Ken Moy Joseph Chan	City of Santa Rosa City of Benicia City of San Carlos City of San Mateo City of Salinas Town of Moraga County of Contra Costa ABAG ABAG ABAG ABAG
Committee Representatives Absent
Cheryl Jackson	City of Milpitas

Public Comment

There was no public comment.

Approval of Minutes

It was moved by Garvey/S/Nadritch/C/ to adopt and approve the minutes of the December 2, 1998 Executive Committee Meeting.

Review of Proposed Refinement of Electric Energy Purchasing

Dave Finigan reviewed the RFP and RFQ process initiated in December indicating that the following nine electric energy suppliers have been reviewed by ABAG staff and recommended for approval to the Executive Committee: Arizona Public Service Company, Enron Capital and Trade Resources, Illinova Energy Partners, Morgan Stanley Dean Witter, PGE Energy Services, Power Ex, Seattle City Light, Southern Company Energy Marketing and Williams. He further indicated that the RFP process to solicit annual electric energy supply proposals had been suspended in order to present a proposed change in the energy purchasing policy to the Executive Committee that would reduce the risk of electric program costs being higher than PGE. Tom Green of NCPA made a comprehensive presentation on a refinement to the existing program that calls for the solicitation of short-term power from a group of pre-authorized power suppliers. This purchasing strategy which staff is calling Market Based Purchasing is summarized as follows:

Program Objectives

Refine ABAG POWER Purchase Strategy

OBJECTIVE - Power Purchase Program Costs less than PX Credit, plus mandated 10% discount
EXPOSURE - Power Purchase Program Costs greater than PX Credit, plus mandated 10% discount
STRATEGY - Minimize exposure to Program Costs that may exceed PX Credit by limiting long-term purchase commitments.

Method

Constantly monitor fixed price power products relative to expectation of fluctuating PX Market Clearing Price. Use quotes from brokers and NYMEX futures contract and other market price indicators.
Solicit short-term fixed price power products from stable of pre-authorized power suppliers when savings are indicated. Be prepared to strike on acceptable offers within 2 hours of quote.
Utilize NCPA as a source of supply to displace PX day-to-day, hour-to-hour and real time.

No guarantee of savings

After the presentation and discussion by Committee members, it was moved by Garvey/S/Nadritch/C/ to approve the refinement of the electric purchasing policy as presented by staff and Tom Green of NCPA. It was also moved by Garvey/S/Nadritch/C/ to approve the list of approved energy suppliers. Ross Hubbard abstained.

Review of Projected Electric Pool Program Costs for 1998 and 1999

Dave Finigan reviewed the 1998 program costs for the nine-month period of April 1 through December 31, 1998 indicating the projected total program costs were $17,220,662 and revenues $16,866,021 resulting in a small difference of $354,641. He noted that much of this difference may be gone after the actual costs are finalized in March. ABAG POWER purchased energy during this period of time at an average of $26.07 MWh compared to $26.46 MWh at the PX. He noted, however, that first year program revenues could not fund the $1,589,000 in one-time deposits required by the PX and ISO and recommended that these be funded through a special four-month 15% increase in the 1999 levelized payment to member agencies.

The projected 1999 budget was then reviewed which indicated estimated total program costs of $30,822,498 and revenues of $30,000,000. Since program costs were higher, it was recommended that the levelized payment be increased by 4% to balance the projected budget and another 4% to provide needed cash flow to fund program costs. After committee discussion, it was moved by deRussey/S/ Nadritch/C/ to approve the projected 1999 budget with an 8% increase in levelized payments for March through December and an additional 15% increase to fund the PX and ISO deposits for the four-month period of March through June, 1999. Wayne Green abstained.

Authorization to Establish a Standby Line of Credit for Cash Flow Purposes with Union Bank

It was moved by Nadritch/S/Brown/C/ to authorize the establishment of a standby line of credit for cash flow purposes with Union Bank.

Review of Natural Gas Program

Marcello Todaro of I.Q. Solutions reviewed the first quarter 1999 experience of the gas pool program which had resulted in a negative savings of approximately $56,000. He indicated that the primary reasons for this are PGE's implementation of the Gas Accord and their reporting of cost information on comparable PGE rates. He noted that other Northern California gas pools are having the same problem. It was moved by Garvey/S/Nadritch/C/ to request Marcello and staff to bring together a working group of representatives from the gas pool to address this issue with the PUC and State Legislature.

Approval of ABAG POWER Financial Reports as of September 30, 1998

It was moved by Brown/S/Green/C/ to approve the ABAG POWER Financial Reports as of September 30, 1998.

Status Reports on CellNet Meter Installation and Billing Subcommittee

Staff reported the status of CellNet meters as follows: 91 meters installed, 51 meters to be installed by March 1, 44 meters with communication paths being installed, and 37 meters needing customer action. Most of the meters needing communication paths are also anticipated to be installed by March 1. A bill format subcommittee of the billing adhoc committee will meet on January 21 to finalize changes to the summary page of the bill.

Schedule of Site Visit to NCPA in Roseville

The Committee agreed to making a site visit to NCPA in Roseville in February or March. Staff will send out a survey to committee members with alternative dates to determine the most appropriate date.

Adjourn

The meeting was adjourned at 2:49 p.m.

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