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HomeMy WebLinkAbout1966-02-23 Min - Board110 Truckee, California February 23, 1966 The members of the Board of Directors of the Truckee -Public Utility District met in a special meeting at the off ice of the District on Wednesday evening, February 23rd, at 8 : 00 P.M., for the purpose of discussing the electrical problems of -the District with R. E . A. officials from Washington. D .0 . Following ollowin Directors were noted present: Aweeka, Firpo, Rose, Fink and Doyle. Legal Counsel, Attorney McDonough was also present. Re E . A, officials present were: Richard H . Wood, Assistant Admin- istrator , and Gerald F . Diddle, Director Western Area - Electric, Rural Electrification Administration, Washington, D .0 . , Also present were the following employees of the District and other townspeople: Longo, Cattan, Best, Snyder, Haltom, Vieu, Ramirez, Tramley and Mr. Land Mrs. Bouillez, along with stenotypist, Winifred Edmunds. out of town guest was: Mr . Al Engles Manager of Plumas-Sierra Electrical Cooperative, Inc.. Portola, Calif. Meeting was called to order by Chairman Aweeka, who explained the purpose of the meeting, invited questions from the parties present, and welcomed the R . E . A. officials! inviting them to speak to the Board on their findings after inspection of our facilities and the area. Mr. Richard Wood spoke first - advising that Truckee Public Utility District is doing a good job with our present . resources, but that we must make every effort to obtain cheaper power. He quoted cost comparisons between what we pay for purchased power, and what many of the other Districts are paying for federal power. He went on to advise some of the solutions open to us within the next few years* and what R.E.A. can do to help us in our fight to obtain this cheaper power. He then introduced Mr. Gerald Diddle, Director Western Area - Electric, who elaborated still further on solutions to our problems. Experiences and problems of various other R.E.A. borrowers were pointed out by both Mr. Wood and Mr. Diddle, and several good sugges- tions on operating procedures were made. Both officials were very impressed with growth strides and development made in this area, and by the District within the last two years, and stated that they are convinced that the area will advance rapidly in the future, especially in the field of recreation. Directors questioned R.E.A. officials on various phases of the data covered in the discussion, as well as including questions by Mr. Al Engle who was interested from the standpoint of participation by his cooperative. Attorney McDonough was asked to give an opinion as to whether any action by the - Board at this time would endanger the case before the Federal Power Commission. He said that he did not think that it would. Complete stenotype report of the meeting is attached herewith, and copies are being handed to each Director for his personal study* Meeting was informally adjourned at 10 : 00 P .M. , with all Directors, Managers Engineers RSA Vf f is ial s and Attorney McDonough remaining for legal discussion on our wheeling case. Chairman of the Board of Directors 2L Recording Setretary Truckee, California February 23, 1966 A. special meeting of the Board of Directors of the Truckee Public Utility District was held at 8 p m, February 23, 1966. Directors present: Chairman Aweeka; Directors, Firpo, Fink, Doyle and Rose. Staff present: Manaqer F. Longo; Phyllis Snyder, Sec; Winifred Edmunds, Stenotypist Others present: Attorney Martin McDonough, Mr. Wood and Mr. Diddle of the REA from Washington, D.C. George Cattan, Engineer for District; Mr. Engles of Plumas-Sierra; Mr & Mrs. Bouillez, Tim , Vieu Chairman called meeting to order and asked Mr. wood to present information he had received on a new possibility for cheaper power, Mr. wood and. Mr. Diddle have just attended an REA of America Coop Convention in Las Vegas. There were 8900 members in attendance, plus 3000 others. Mr. Wood stated he was very much encouraged by Truckee's progress and thought they were doing a good job. He is still trying to get a lower cost wholesale power supply. Sacramento pays 4 mills and Truckee pays 12 and one-half mills, Portola 4 and one-half mills. Truckee should get the same rate as Portola and when they do will see a tre- mendous change in use of electricity. Truckee has an allocation of power from Federal systems, but P G & E and. Sierra Pacific refuse to wheel it. He has looked into the cost of building our own system. Folsom Dam has a block of our power. Bureau of Reclamation has authorized the new Auburn Dam, which is 65 miler away. Would have source of power same as Sacramento or Roseville, but would have to build certain size line to do the job and need someone else on the line to help pay for it. Sierra-Plumas is interested, as they have a. very light line at present, and will have to rebuild in future. Is possible to share this line. However, the best and most hopeful possibility is the Carson -Truckee Irrigation project in Nevada. They are very much interested and Mr. Wood and Diddle met with them today_ and discussed this. We would have to build the line to Fernley, which is about 70 miles. Mr. wood said, 'it had been their experience that when we get ready to build, the Sierra Pacific may do an about face and furnish cheap power. The outlook is very good and they will lend us all the assistance they can. (presented an exhibit showing REA rates and private power rates) Mr. Diddle is the Western Area Director of REA. Everything west of the Rockies, plus Alaska. There are 3 three high cost areas in the United States, California, New England and Michigan. If Truckee built the line, would make deal with Coop for this power and would not come under the commission. 60-70 miles to Fernley and 65 miles to Auburn Dam. Director Firpo asked about building line to South end of Lake Tahoe, are 14,000 people there. The Truckee Public Utility could not serve them since they are already being served by the Sierra Pacific Power Co. Manager Longo: If the power costs can be reduced will be of great economic value. Growth here is contingent upon Lake Tahoe. We will enjoy expansion on account of land. values. At present the TPUD is using 3000 KVW, but will double in next few years. Mr. Engles of Plumas-Sierra; 13 million KWs in 1965- by 1980 expects to be more than 25 million. The requirement they have anticipated and the anticipated amount for Truckee would carry_ the transmission line. The P G & E contract until 1971 on existing line. 3 Mr. Diddle stated these things take a long time to get the package put together. Carson Irrigation has not done any bonding before. This is a sizable investment, delivering a large number of KW hours. I-f this facility could be built for 2 and. one-half million dollars, 7 percent principle,, interest and maintenance- 80 million KW hours per year, would be about 2 point 2 mills. The package should be feasible and not so cumbersome could not get over hurdle. If they organize at the Lake and we have a source of power, it would be an inducement. Have to have a large number of KW hours to bring the cost down to a reasonable point. Largest cost would be the principal and interest. Would like to help us solve our power supply problems. They have some flexibility in the lending arrangement, and can vary the starting time of payments. Director Aweeka: Suppose Sierra Pacific tells us they will supply with a restrictive wholesale power contract, can't serve coops, etc. Mr. Diddle: They may try to write anything into a wholesale contract. Line from Auburn Dam would cost 2 and one-half million dollars - 4 percent and 3 percent added- would cost this much to own and operate- interest rate would be 2 percent. Mr. Wood: Negotiations are better when you have an alternative, and alternatives are limited. Mr. Diddle: We could finance Truckee and Sierra Plumas , and part of Carson -Truckee Irrigation. Could not finance facility which is already receiving power. Manager Longo: There has been a 20 percent increase a year for Truckee, and if we double in 5 years, and Plumas-Sierra doubles, line would be feasible. Mr. Diddle thought the Carson -Truckee system would be ideal- a 40 megowatt system. In 10 years would be pretty well loaded up. Manager Longo: Do not know if we are going to have wheeling from 4 from Sierra Pacific, but we know what our load is going to be - 20 megowatts . Can REA finance on the 1980 requirement? Mr. Diddle: Design a facility which will carry the load, you ought to have the line reasonably loaded within a 10 year period, voltage wise. Can't afford to design for 20 years in the future. Should' be reasonably loaded in 10 years. Design for higher voltage load and use it at lower, but should keep it at something reasonable. Chairman Aweeka: We started out with the idea of getting cheap power, but if we burden District with same rate, have defeated our purpose. Six point 7 would pay off the indebtedness, 4 point 2 at the dam. would rather go into debt for 3 or 4 million and be free, of Sierra Pacific and P G & E . Truckee Carson 40 million in 1965 and Sierra Plumas would be close to 80 million range. Director Doyle: How does this effect P G & E and Sierra Pacific-;-, Mr. Wood: If you start building line, negotiations may take a flip real suddenly. The Sierra Pacific doesn't want this line built. If preference power is available and they will wheel it, cancel con- tract for line. Director Pink: Can't they sell surplus power from Bonneville? Mr. Woods: If line is run to auburn Dam, will be getting Bonneville power in a round about way. Mr. Diddle: Explained that power from Bonneville can be sold if area is not more tha n 75 air miles from Bonneville, and Truckee would not qualify. Mr. Wood: The Amargosa Coop in Nevada built their own line, 120 miles, and got the Atomic Energy Commission to share the line, and the town of Beattie, Nevada. After line was built, the rate was one-third of what it had been, and the load trippled in 3 months. There were no street lights in Beattie before REA, but now can see them for miles. Manager Longo: Mr. Topal of the Burney_ Mill said he would put in a. 5 plywood mill if he could reduce the power cost. Mr. Woods: The population of this country will double by 1980, and the recreation potential in this part of the country is tremendous. Mr. Diddle: There are many pockets in California that do not have electric service. Can loan money to Carson -Truckee for part that is not getting service. Are willing to look at any feasible out. When Power plants were built, there was set up Bureau of Recla- mation marketing area. California, Nevada, New Mexico power didn't get away from the dams, no branch lines were built. Power Companies came to the dam. The little outfits that can't afford to build lines, but are entitled to power are being served by private companies. 4 states get Bonneville power- Federal lines carry it ( Army- Indian Service- Bureau) were put under one administration by Franklin Roosevelt. Director Firpo: Did any REA project ever go by the board? Mr. Wood: Only one ever went broke and that was on an island off the coast of Carolina- the plant was destroyed twice- after 2 hurricanes- $ 8 6 , 0 0 0 - ( 1 ten -thousandth of 1 percent) Last year were 158 rate reductions. One system is delinquent out of 1000 systems, and they are paying it back. The REA has the best record of any financing project the Government has ever been involved in. Sacramento (SMUD) borrowed everything from REA for outside of city limits. Director Doyle: We should go ahead with feasibility study of this. If this will force the hand of private enterprise, would be the wisest move to make. Mr. McDonough: We want to give this course very serious considera- tion. The REA has been most helpful. This is a big project, and this line could not be built without the REA's assistance. It will C be a lot of work by the entities involved. The Federal Power Commission is trying to make PG & E wheel power to us. Will be cheap power, and there is hope in that direction with Federal Power Commission. Would be well advised to pursue the ideas and that we evaluate the procedures given by them so that we can compare with our present procedure. Don't know which would be the best tonight, but should determine not too long from now which to take. Mr. Diddle: The capacity is the problem. Mr. McDonough: I do not expect the Board to make a final decision tonight. Mr. Woods: Read part of letter from Secretary Udall to Mr. Freeman regarding rights of way in California. "If the Forestry Department would get off the right of way, he would go after the Power Companies to try to do something." An approach will be found to be of benefit to these systems, that have long distances to points of delivery. Will require some time to work out. It might be better if REA approved them instead of Truckee public Utility District to get Forestry permit. Mr. Diddle: We held meeting and explained needs of Truckee and did get Truckee in the report. The electricity trend in the United States is going to large operations. The Coops are going together and forming pools. The companies recognize that the high voltage inter --connections don't want to share with public power and small companies. Manager Longo: power costs in 1965 were in excess of $155,000, which is 560. This is high. With the new substation, new transformers will make a difference of 6000 per year by the increased efficiency, and the load is building up. Mr. Diddle and Mr. Woods thanked Board for meeting with them. Chairman declared meeting adjourned at 10 p m. Winifred Edmunds Stenotypist