Board of Directors January 10, 2014 Meeting Minutes

Board of Directors
January 10, 2014 Meeting Minutes
The PNUCC Board of Directors met on January 10, 2014, from 8:30 to 11:30 a.m.
at the Portland Airport Sheraton. The list of attendees is attached.
Next Board Meeting: February 7, 2014
Portland Airport Sheraton
Corporate Business
The meeting began with introductions, acknowledgment of the antitrust compliance
statement and approval of the October and November Board and Annual Meeting
minutes.
Jack Speer welcomed the two new PNUCC Board members, Mike Jones of Seattle
City Light and Mark Johnson of Flathead Electric Cooperative. The group then
selected Board officers for 2014 and 2015. Steve Eldrige nominated John Prescott,
PNGC Power, as Chairman; David Mills, Puget Sound Energy, as First Vice-Chair;
Jack Speer, Alcoa, as Second Vice-Chair; Lisa Grow, Idaho Power, as Treasurer;
and Dick Adams, PNUCC, as Secretary. The nominees were unanimously elected.
Jack ceremoniously turned the gavel over to John Prescott to continue the meeting.
PNUCC Member News
MidAmerican’s acquisition of NV Energy was finalized in December, Scott Bolton,
Pacific Power, announced. There will be some reshuffling of PacifiCorp employees
as MidAmerican restructures. Scott noted that Pat Egan, formerly of Pacific Power
has moved to Las Vegas to manage Customer Care as part of the shuffle. Scott said
that leaves him to handle community relations, economic development and
government affairs for Pacific Power.
The PNUCC Board said goodbye to Steve Oliver, BPA, and wished him well in his
future endeavors as he retires from BPA. Steve has been a BPA employee since
1991 and was involved with numerous high level projects and challenges, including
deregulation, the West Coast energy crisis and most recently the Columbia River
Treaty Review. He will be missed.
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Steve came prepared with an update on the 2014 water supply forecast. Currently,
the western portion of the system is showing signs of potential drought conditions
for most of Oregon, and southern Idaho. However, the northeastern portion of the
region has had fairly normal precipitation. While 2014 will likely be a lower than
average water year, there still is time for more snow and the water supply measured
at The Dalles is expected to be only slightly below normal.
Our neighbors to the south are having a rough winter, with California’s water
supply forecast near record lows. This could potentially lead to California buying
more Northwest power in 2014. Much like with the Northwest, it still is early in the
water supply year and a lot could change.
Before moving on, John Prescott offered a sincere thank you to Ken Canon, longtime veteran of the Northwest electric power community, for his many years of
service and significant contribution to the industry. The Board members wished
him well in retirement with a round of applause.
Columbia River Treaty – Next Steps
On December 13, 2013, the US Entity formally submitted their recommendation on
the future of the Columbia River Treaty to the Department of State. Although the
recommendation is out the door, there still is work to be done in 2014. Dick
mentioned that the Power Group will continue to conduct outreach efforts to ensure
that Northwest utility customer interests are met – primarily the re-balancing of
power delivered to Canada.
Steve Oliver briefly discussed the recommendation. He noted that the US Entity
received a great deal of comment regarding the Canadian Entitlement and
ecosystem function. Two possible future steps for the Treaty process are assessing
flood risk issues and addressing fish passage over Grand Coulee. Neither issue will
be resolved soon. Steve encouraged utilities to stay engaged. They worked long
and hard to reach a delicate balance of all interested parties in the Northwest. It is
vital that this balance stay in place as the discussion in Washington D.C. moves
forward.
Tony Webb, Grant PUD, wondered if the US negotiations over the Treaty could be
more localized, similar to how it is done in Canada. This is unlikely due to how the
Treaty is structured in the US, Steve said. It will need to pass through the US
Department of State. Mark Johnson, Flathead Electric Cooperative, inquired about
the Canadian’s reaction to the US Entity’s recommendation. Steve noted that
although Canada does not have a technical respond to the Entity’s study, they do
have an interest in keeping their current level of power benefits. Additionally, due
to a lack of anadromous fish, Canada does not have the same ecosystem priorities
as the US.
Going forward, the Department of State is cognizant of the region’s interest in the
Treaty. Every international treaty is renegotiated differently, so there are no
specific steps defined for proceeding with the final negotiation. By continuing to
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work with outreach groups and through regional Congressional leaders, the power
industry can make their voice heard, Steve offered.
Carbon White Paper
During 2013 the PNUCC System Planning Committee undertook analysis to
estimate the cost of reducing carbon from the Northwest power system using wind
and/or solar power. Building off this work, PNUCC staff is proposing developing a
white paper on carbon in the Northwest.
Tomás Morrissey walked the group through a draft outline. The paper would be
written with policy makers as the intended audience with three main focus areas.
First, the paper would seek to put the region’s electric carbon footprint into context.
The Northwest electric power industry has half the carbon intensity per megawatt
hour as the US average – this is a positive story that should be highlighted. Second,
the paper would detail current regional carbon policies and reduction efforts. This
section would describe renewable portfolio standards and state emission restrictions
for new baseload generation. Lastly, the paper would discuss carbon reduction
tools and potential tradeoffs.
Board members agreed that a white paper should not debate global warming.
Rather, it should focus on what utilities are doing as a result of carbon policies to
maintain reliability and reasonable retail power rates. Roger Gray, Eugene Water
and Electric Board, noted that the power industry needs to have more of a voice in
the dialogue. He shared that he attended the signing of the Pacific Coast Action
Plan on Climate and Energy where the Governors of Oregon, Washington,
California and the Premier of British Columbia agreed to work together to limit
carbon emissions. Roger noted that there were few, if any, electric power industry
folks in attendance.
One suggestion from the Board included surveying what other national power
industry entities are doing and saying on this topic. It will be important to maintain
consistency in our messages if we agree. They also discussed the value of possibly
partnering with a University to gain a broader perspective.
There was support for moving forward with a paper of this nature. The Board
recognized the value of having a baseline report that provides context for the
Northwest relative to the rest of the country and contrasts the power industry’s role
in carbon reduction to other sectors like transportation.
It was suggested that this paper might address how the growing number of carbon
related policies are potentially running headlong into each other. And it might be
helpful to point out the worldwide benefit of our efforts as well.
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Sidebar: Proposed 10-Year Spill Test
While it was not on the agenda, John Prescott took a minute to draw the Board’s
attention to an emerging issue – a ten-year spill test being proposed as an
amendment to the Council’s Fish and Wildlife Program. Fish advocates are
supporting this spill test arguing it would result in more returning adult fish.
According to Jim Litchfield there is a great debate and dueling reports about the
potential benefit of increasing spill at dams in the Columbia River to further
improve fish returns. The fear is a major impact on power operations with no
benefit and possible detriment to salmon returns. The Board was interested in
learning more and asked to have additional discussion at a future meeting.
2014 Utilities Load/Resource Picture
The Board was presented with the first peek at the 2014 sum-of-utilities loads and
resources for the Pacific Northwest. Shauna McReynolds said that almost all
utilities have provided their information and that they have been able to pull many
of the pieces together to see what the picture is starting look like. She shared
several tidbits with the Board with the caveat that the investigation into the details
is yet to come.
Starting with the load forecast, Shauna showed that the loads have shifted down a
few hundred megawatts again this year. However, the load growth remains about
the same as the last few years. Looking back at the forecast of five years ago, the
load projection for this coming year has fallen about 1,000 MW. The staff will be
digging deeper into what is behind this pattern.
The need for power is very similar to last year. The annual energy picture shows
the region in balance for several years. Shauna pointed out that the more interesting
story is in the monthly energy, where the seasonality of loads and resources is
demonstrated. Although the gap is smaller than last year, there is still a need for
additional firm peaking resources in the winter. The gap between firm loads and
power supply starts at 2,000 MW in the first year of the report. The need for
additional summer firm peaking resources starts to show up in 2017 with a gap of
about 500 MW under low water conditions and no market purchases.
The forecast of energy efficiency savings could turn out to be an interesting
anecdote, Shauna noted. The projected savings in the next ten years are slightly
lower than past projections. Staff will be digging into this information to clarify
what the real story is. Finally, the list of resources in the queue for meeting future
power needs, like last year is mostly natural gas fired generation and additional
wind generation.
The schedule for finalizing the 2014 version of the Forecast is the first part of
March. Shauna said that they will be leaning on the System Planning and
Communications committees to scrutinize staff’s conclusions and messages to be
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highlighted in the executive summary of final report before bringing the final draft
to the Board in March.
Member Agenda 2014
It is the first meeting of the year and a good time to take stock of the issues
consuming the PNUCC work plan. Dick Adams turned the group’s attention to the
list of priority topics that he has identified for 2014. He briefly walked through
each of the items to give everyone a sense of the work being considered. Then John
Prescott went around the table challenging each Board member to name their top
three issues on Dick’s list. He noted that all the issues are important and will likely
be addressed at some level in the coming year, but he wanted to give the staff an
indicator of the Board’s greatest interest. This impromptu survey resulted in some
interesting discussion. The chart below tallies the results.
Emerging Topics
Distributed Gen.
Peak & Flexibility
7th Power Plan
Power Sup./Dem.
Demand Side Mgmt.
Carbon Context
Natural Gas
Columbia Treaty
Communication
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Unraveling carbon policies, contributing to the Council’s 7th Power Plan,
understanding the role of distributed generation and keeping up on emerging topics
were popular choices. Continuing discussions on the role of natural gas, evaluating
regional peak and flexibility needs and understanding the contribution of demandside programs were mentioned as well.
Dick thanked the Board for their input and asked about other topics of interest. The
group asked about the future of an Energy Imbalance Market in the Northwest,
expected load growth in the region and how forecasts are aligning with actual load.
This discussion led to the suggestion of a presentation on recent economic trends in
the Northwest. Dick said he would bring someone to a future meeting on this topic.
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Attendance List
January 10, 2014 Board of Director’s Meeting
John Prescott
Jack Speer
Dick Adams
Scot Bolton
Tony Webb
Ted Coates
Joe Hoerner
Stefan Brown
Mark Johnson
Roger Gray
Steve Oliver
Steve Eldrige
Ed Brost
Michael Jones
Greg Delwiche
Shauna McReynolds
Tomás Morrissey
Ed Jenkins
Doug Olson
Ken Phillips
Ray Sieler
Dave Ward
Ken Canon
Mark Gendron
Mark Walker
Peter Brooks
Jim Litchfield
Denny Rohr
Craig Collar
Mark Ohrenschall
Bear Prairie
Brenna Moore
Melinda James-Saffron
Dan Peterson
Kevin Parrish
Scott Coe
Katherine Schacht
Chelsea Wright
Chris H. Byrd
Ann Fisher
Doug Grob
Jason Heuser
Hardev Juj
Tom DeBoer
Harry E. Hewitt
PNGC Power
Alcoa
PNUCC
Pacific Power
Grant PUD
Tacoma Power
Puget Sound Energy
Portland General Electric
Flathead Electric Cooperative
Eugene Water & Electric Board
Bonneville Power Administration
Umatilla Electric Cooperative
Franklin PUD
Seattle City Light
Bonneville Power Administration
PNUCC
PNUCC
Tillamook PUD
Tillamook PUD
Tillamook PUD
Tillamook PUD
Grays Harbor PUD
Consultant
Bonneville Power Administration
NW Power & Conservation Council
US Corps of Engineers
Litchfield Consulting Group
D. Rohr & Associates
Snohomish PUD
Energy Newsdata
Idaho Falls Power
Clark Public Utilities
Grays Harbor PUD
Pend Oreille PUD
Emerald PUD
Emerald PUD
Emerald PUD
Emerald PUD
Flathead Electric Cooperative
AF Legal & Consulting
Flathead Electric Cooperative
Eugene Water & Electric Board
Bonneville Power Administration
Puget Sound Energy
Tillamook PUD
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