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HomeMy WebLinkAbout1978-01-10 Min - Board SPECIAL MEETING January 10, 1978 The special meetingof the Board of Directors was called to order by the President in the District off ice at 4:27 P.M. ROLL CA LL: Directors Huber, Kuttel and Sutton were present. Directors Alexander and Maass were absent. EMPLOYEES PRESENT: A. Milton Seymour and Susan Craig were present. CONSULTANTS PRESENT: Steven E. Grumer was present. OTHERS PRESENT: George B. Sevier, R.E.A. Field Engineer, James R. Coulombe, R.E.A. Ope rations Field Representative, James R. Pressnall , R. W. Beck and Associates, and Don Strand. DISCUSS ION WITH REPRESENTATIVES OF R. W. BECK AND ASSOCIATES AND JIM COULOMBE OF R.E.A. RE THE R.E.A. LOAN Mr. Pressnall distributed to the Board and to the R.E.A. representatives is ared by R. W. Beck and Associat es defining the purposes and a synops p re p results of the Power Requirements Study, Two-Year Work Plan, and Financial Forecas t. He reviewed the synopsis in detail with the Board. A copy of that document has been attached to these minutes• serve new consumers was briefly The 1962 R.E.A. loan for a substation to se discuss ed. Mr. Seymour summarized the R.E.A. determination that the District is elig ible ible to borrow, for all act beneficiaries, 70% of the funds the Dis- trict requires. However, the 70% would be reduced by a ratio of.the non-act - q beneficiaries to total consumers. The District would be responsible for ocat Mr. Seymour further I ing another source from which to borrow the remaining 30%• • noted that if the Truckee and Tahoe-Donner substations are to be rebuilt, the not , ,.-- District would need approximately $400,000. how the Mr. Coulombe, R.E.A. Operations Field Representative, explained R.E.A. determines eligibility. Expenditures to R. W. Beck and Associates for to the R.E.A. loan were discussed. i services relating Mr. Se mour stated he felt the Board had three possible choices for Y obtaining funds; one, borrowing whatever funds are available from the R.E.A obt 9 financing Seymour recommended; two, f current with supplemental financing, which Mr. y i necessary funds through a bond election; and, three, financing out o I revenues. rd discussed u grading various portions of the District' s system The Boa P and service reliability, and possible misapplication of previous R.E.A. loan funds in relation to subdivisions. i oint a roximately 5:40 P.M. , At ths Director Maass arrived :at the p PP t meeting. Th e District's line extension policy was discussed by the Board and Mr. Sevier. Mr. Sevier requested clarification as to whether the loan should be pursued. Director Kuttel moved that the Board affirm that the District wishes to have the loan pursued on its behalf for substation and other system upgrading. The motion was seconded by Director Huber. ROLL CALL: Huber, aye; Kuttel , aye; Maass, aye; Sutton, aye. SO MOVED Director Huber moved that the line item of consumer line extensions in the amount of approximately $345, 000 be deleted from the loan proposal on the basis of the District's policy. The motion was seconded by Director Maass. ROLL CALL: Huber, aye; Kuttel , aye; Maass, aye; Sutton, aye. SO MOVED. At approximately 6:05, Director Maass left the meeting. Mr. Coulombe noted that in order for the District to receive R.E.A. loan funds the District must submit a current (not older than 60 days) operating - report with the request for funding. Management guidelines and policies recom mended b the R.E.A. were briefly discussed. Another necessity for the loan Y is the need for supplemental financing. Mr. Coulombe recommended that the General Manager in Washington at the Western Area Office be contacted re- specting this matter. Mr. Coulombe recommended R.E.A. bulletin 101-3, Business Management for Board Members of Electric Co-ops, which outlines planning and other things with the related bulletins that show the R.E.A. controls and pro- cedures. Mr. Coulombe and Mr. Sevier advised that the following items were re- quired by the R.E.A. for funding: Resolution requesting the R.E.A. loan, financial forecast, perhaps including a rate increase; work plan, power requirement study, form 740A, review of general funds; current operating report, area coverage and line extension policy, bylaws, flood hazard information, letter covering appli- cating including name, where serving and environmental problems; loan budget analysis, construction work plan, letter re historic sites, wholesale power contract amendment providing for increased capacity and two delivery points. The President requested that a representative from R. W. Beck and As- sociates return to the District for consultation purposes prior to January 30th. She expressed the hope that the District could advise the R.E.A. in early February as to where the District stands. She requested that Mr. Coulombe inform the District as to R.E.A. Bond Counsel requirements. Non-act beneficiaries and the 1962 R.E.A. loan were again discussed. Mr. Sevier advised that there would be a new field engineer assigned in the western area in February, Charlie Harper; his headquarters will be near Las Vegas. REVIEW AND DIRECTION RE NOVEMBER 42 1977, CORRESPONDENCE FROM R. W. BECK AND ASSOCIATES RE CONSULTING SERVICES WORK ORDER Mr. Seymour requested that this item be deferred until the January 16th --� meeting since Mr. Merriman was not able to be present. FINANCIAL FORECAST Mr. Pressnall inquired as to the procedure to be followed for the additional work required in conjunction with the financial forecast. Director Huber moved that the Board authorize R. W. Beck and Associates to revise and conclude the information for the financial forecast. The motion was seconded by Director Kuttel . ROLL CALL: Huber, aye; Kuttel , aye; Sutton; aye. SO MOVED, 1 t was agreed between the Board, Mr. Gr.umer, and Mr. Pressnal 1 to meet on February 2nd at-7:00 to discuss the power requirement study, work plan and financial forecast. ACTION RE FARMERS HOME ADMINISTRATION LOAN Mr. -Seymour explained that the District must pass the resolution amending resolution 77-47 to make corrections relating to the time of the note. Reso- lution 77-46 was passed prematurely; the FmHA offer should have been received first. RESOLUTION AMENDING RESOLUTION 77-47 Director Kuttel moved that the District adopt the proposed resolution amending resolution 77-47 a resolution providing for the issuance and sale of emergency drought relief promissory note of 1977; prescribing the amount, date, form and maturities thereof; fixing the rate of interest thereon; and providing for a pledge of revenues to pay the principal thereof and interest thereon. Director Huber seconded the motion. ROLL CALL: Huber, aye; Kuttel , aye; Sutton, aye. SO MOVED. AUTHORIZATION TO ACCEPT FmHA LOAN Director Kuttel moved that the President of the Board be authorized to write to the United States of America accepting the offer of an emergency drought relief loan of $190,800. The motion was seconded by Director Huber. ROLL CALL: Huber, aye; Kuttel , aye; Sutton, aye. SO MOVED. REAFFIRMATION OF THE PASSAGE OF RESOLUTION 77-46, LOAN RESOLUTION, AND AUTH- ORIZATION TO PUBLISH MINUTE ORDER • Huber moved that the Board reaffirm the passage of Resolution Director H The motion 77 46, Loan Resolution, and Authorization to Publish Minute Order• uttio b Director Kuttel . ROLL CALL: Huber, aye; Kuttel , aye, S ong was seconded y aye. SO MOVED REVIEW OF LETTE R OF CONDITIONS FROM THE FARMERS HOME ADMINISTRATION r-- President Sut ton deferred this item to the meeting of January 16th, and should be item b) under Farmers Home Administration Loan/Grant. i noted that t ADJOURNMENT Director Kuttel moved that the meeting be adjourned; the President adjourned the meeting at 7:30 P.M. TRUC KEE DONNER PUBLIC UTILITY DISTRICT B V� Y James- A: aass r' President of the Board Approved: April 17, 1978 Signed: i �— E i f I i it i I i i. I r' Susan M. Craig Executive Secretary f f f 1 i 1 smc i f i -- - Truckee-Donner Public Utility District (Calif ornia 44) SYNOPSIS OF POWER REQUIREMENTS STUDY, TWO-YEAR WORK PLAN,AND FINANCIAL FORECAST 1, Purpose of Studies These studies serve as support documents to a loan application to be submitted to the R EA to secure Funds for the Financing of a Capital Improvements Program for the Electric System. Z. Power Requirements Study (PRS) The purpose of this study is to project total system energy consump- tion and corresponding peak demand as well as growth rates for each of the consumer classes over the next ten years. 3. Construction Work Plan (CWP) The purpose of the CWP is to model the Electric System and then, utilizing growth patterns developed in the PRS, determine any defi- ciencies in the existing system when subjected to future loading con- ditions. The Work Plan contains recommended improvements to correct the deficiencies and related estimated construction costs. 4. Donner Lake Service Area Acquisition 5. Financial Forecast (FF) The purpose of the FF is to determine the financial soundness of the Utility over the next ten years based in part on projected reve- nues from the sale of power to future-year consumers as forecast in the PRS and in part on projected expenditures for capital improve- ments as presented in the CWP. 6. Results of the PRS a. 2, 950 consumers, annual energy consumption greater than 50, 000, 000 kWh, peak demand in excess of 13 MW. b, 1981 -- 3, 976 consumers, annual energy consumption of 87, 200, 000 kWh, peak demand of 20. 3 MW. -2- C. 1986 -- 52 231 consumers, annual energy consumption of 124, 000, 000 kWh, peak demand of 28. 7 MW. d. Annual demand growth rate of approximately 9% over the next ten years. e. Approximately 230 new consumers per year over the next ten years. f. Annual System energy losses represent approximately 8. 10/0 of total system consumption. g. System load factor of 49%. h. Effect of Large Commercial consumers on System operation. 7. Results of the Work Plan a. Distribution feeders appear to be adequate through the period of s tudy. b. Truckee Substation and Tahoe-Donner Substation require immediate upgrading. C. Conversion of Donner Lake Service Area from 13. 2 kV to 12. 47 kV is recommended. d. Benefits of capacitors. e. Larger wire sizes (336 and 556 KCM) may be advantageous. f. Long-range planning. g. Loan Form 740c, Appendix D. 8. Results of the FF The proposed financial plan should provide the following advantages over the existing plan; a. A more equitable plan of passing the cost of capital im- provements on to the consumers. b. A more consistent plan of scheduling and completing capital improvements based on the assurance that loan funds will be available. 3. C. A rate structure more competitive with those of adjacent utilitie s. ` d. A reasonable reserve of general funds to meet unforeseen con- tingencies. e. Sufficient funds to provide new customer service connections located within reasonable distances of existing facilities at no charge.