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HomeMy WebLinkAboutLCMIN06/13/2011Mansfield Municipal Electric Department RECEIVED Minutes of Light Commissioners Meeting r ,k . E? P" S OFFICE June 13, 2011 20 I JUL 28 A 41 t r� !F! D Present: Chairman George Dentine; Vice Chairman Kevin Moran; Cl srk 3r ietiK�glp*vd; Commissioner Douglas Annino; Commissioner Jess Aptowitz; Director Gary Babin; Staff Accountant Ken Thomson; Financial Assistant Jacqueline Lee and Town Manager William Ross Light Commissioners Meeting The meeting was called to order at 7:05 PM followed by the Pledge of Allegiance. Chairman Dentino stated that this meeting was being televised and taped by Mansfield Cable Access. There was no one signed up for Questions and Comments. Motion: To approve the minutes of the May 9, 2011 Light Commissioner's meeting (Aptowitz /Kozlowski) Passes 510 Financial Report for April 2011 — Director Babin presented the financial statements for April 2011. The net operating income year -to -date through April was $2,503,717. MMED's operating cash position through April 2011 was $8,365,037. Director Babin reported that year -to -date electric sales were up 3.9% and the depreciation Rind stands at $6,057,469. He also said that transmission expenses are up 25% over last year. Staff Accountant Thomson reported that in the operating section of the profit and loss statement the operating expenses were at $182,000 or 0.7% below last year's amount and were 4.3% below budget levels. Purchased power expenses were $1,074,000, or 5.2 %, below budget. Staff Accountant Thomson then reviewed the non - operating section of the profit and loss statement. He said that both sections of the profit and loss statement contribute to the $2.9 million net income thus far for the year. Commissioner Aptowitz asked that a column be added to the profit and loss statement which would show "budget vs. actual" as a percentage. He also inquired about collections and wondered how MMED was doing with commercial accounts. He suggested that the Board receive an update on collections every quarter. Commissioner Annino questioned the miscellaneous credit to surplus of $658,368 under net income. Staff Accountant Thomson explained that it was a flush of funds from MMWEC. Vice Chairman Moran questioned the spike in high tension power sales that occurred in April. Director Babin said he was not quite sure of the cause of the spike and would get the information on that. Chairman Dentino asked about the accounts payable of $71,061 on the profit and loss statement, which was an overcollection of the Generation Charge, and also asked about the payable of $36,627 in liabilities. Staff Accountant Thomson said that the $36,627 is a balance sheet number from the beginning of the use of the Generation Charge for money owed to ( customers and that the $71,061 is the Generation Charge liability. Commissioner Aptowitz pointed out that they should both be the same number. Director Babin and Staff Accountant Thomson then thought that perhaps, they didn't update the $71,061 figure from the prior month. Director Babin will look into that. Chairman Dentino questioned whether MMED was still doing business with Constellation. Director Babin said that MMED still does have a contract with Constellation, which is structured as a financial settlement and MMED pays the difference between the contractual price and the market price in any month. Solar Energy Net Metering Tariff- Director Babin reviewed the draft net metering tariff with the Board. He explained that the net metering recovery surcharge is to replenish revenues fiom net metered solar customers to offset any loss in distribution revenues. Any customer with a Class II Net Metering Facility would be billed a surcharge every month equal to $1.15/kWh multiplied by the billing demand for that billing period. With respect to the proposed tariff, Town Manager Ross pointed out that the tariff reimburses the customer for energy exported at a rate equaling the Generation Charge but that MMED already has a customer who offered to sell energy back at 5 cents per kWh from their solar facility. He made the suggestion to Director Babin that nothing should keep MMED from accepting something lower and as he did not see why MMED should turn this offer down, he offered that language be added to enable MMED to do that. Chairman Dentino questioned if the tariff was a variable and wondered how often it could be changed. Town Manager Ross said it is similar to setting the rates and can be changed at any time at a Board meeting. Commissioner Aptowitz wondered if they would be putting MMED's business in peril if solar installations were to become cheap and popular. Director Babin said that if this occurred, MMED could then change the tariff in order to recoup any lost revenues. Town Manager Ross believes the long -term issue is that technology changes and perhaps MMED will become only a back -up source for some customers. Commissioner Aptowitz said that he has concerns about keeping up revenues to maintain MMED's infrastructure. Chairman Dentino questioned whether this tariff is mimicking the IOU's. Director Babin answered that MMED is doing it slightly differently by creating a surcharge and applying it to those customers who build the facilities instead of socializing lost revenues across all customers, as do the IOU's. Town Manager Ross asked if the Board was ready to post the public hearing or if they were in need of more information. Chairman Dentino and Commissioner Aptowitz said they wanted more information. PILOT Summary for Massachusetts Municipal Light Departments- Director Babin distributed and reviewed a PILOT summary of 33 municipal electric utilities. hi the different categories measured, MMED falls in the range of 10`' to 13th highest. He said that this was 2 purely informational and that it was provided because the FinCom had been looking at the PILOT and had let Town Manager Ross know that they would like to see MMED contribute a larger amount. Commissioner Aptowitz stated that he wants the Board to come up with a logical and fair amount for MMED's PILOT. Chairman Dentine believes that MMED has been overpaying for quite some time as they have been charged $480,000 per year for the last several years. He said if the payment is based on plant value then MMED is paying too much and believes there has been ongoing "taxing through the meter ". Solar RFP for Landfill- Director Babin told the Board that incentives had been created to encourage development of solar energy farms on municipal landfill sites. Currently, developers would receive a tax grant of 30% towards the capital cost of the installation; they would get 100% depreciation on the asset in the first year and would also receive the value of the renewable energy credits (REC) created by the installation. Those RECs have a market value with a floor of $300 per MWh and a cap of $600 per MWh when sold at auction. Director Babin commented to the Board that it will be interesting to see the proposals that are received as some will be serious bidders while others will be looking to turn a quick profit. Vice Chairman Moran said that he wants to put the RFP out there and is looking forward to seeing a response with teal numbers. ( Clerk Kozlowski wondered whether they have the right to reject all proposals. He questioned how the award/negotiation process works. Director Babin answered that the proposals are evaluated and ranked based on content and MMED would then look at the financial proposals once the rankings have been done. Commissioner Aptowitz would like to get this out quickly but doesn't want to spend a lot of money on legal counsel, especially high priced specialty counsel. Commissioner Annino suggested a change be made with the wording on page 2 of the RFP. He would like "may be required" to be changed to "will be required ". Chairman Dentino would like to see a copy of a purchased power agreement to use as a template, other than the Constellation or Calpine agreements. He also questioned who is responsible for real -time monitoring. Director Babin answered that the developer would provide MMED the information, which would then be put on the Town's website. Chairman Dentino then questioned whether MMED is taking a gamble with a flat rate. He wondered if there was any protection or built -in barometer to vary the rate. Town Manager Ross said he wants to get this process going, collect responses, do an analysis and get the information back to the Board so this can be in place by the end of the year. He would like to get the RFP out in the next couple of weeks. 3 Proposed Tax on Millstone Nuclear Power Plant Energy Output- Director Babin gave the Board an update on the proposed tax on the Millstone energy output. He said the situation remains pretty much the same as last month and that a tax of 0.25 cents/0" has been approved. He also said that this is supposed to be in effect for 2 years only and the impact is going to be about $38,500 annually for MMED and about $1.2 million annually for the MMWEC Millstone project participants. Director Babin believes there is the hope that consumer groups will continue to fight this. East Mansfield Substation — Director Babin updated the Board on the progress of the East . Mansfield Substation. He said that at Town Meeting the easement agreement with National Grid was accepted and that Town Manager Ross has executed the agreement. Town Counsel has contacted National Grid to finalize the closing documents for recording the easement. Director Babin reported that preparation of specifications for the substation is ongoing and material specs are due to be advertised by the end of June. A contract for site preparation and installation of the substation equipment will be advertised at the end of 2011. MMED staff has also prepared specifications for the installation of a conduit bank on Bird Road. The Town needs to execute and publicly advertise a document called a "Determination of Uniqueness" which was then circulated and signed by the Board members. The Town has to request proposals in the instance where an acquisition of land will cost more than $25,000 and it has to be advertised for 30 days. Motion: To approve the Determination of Uniqueness as outlined in the first paragraph of the document entitled Real Property Acquisition by the Town of Mansfield (Moran /Dentino) Passes 5/0 Commissioner Aptowitz inquired about a timeline for the nety substation. Director Babin said that construction is expected to begin in December 2011 or January 2012; transformers will be delivered in the spring of 2012 and the substation should be up and running by July 1, 2012. Motion: To adjourn the Light Commissioners meeting at 9:20 (Kozlowski) Respectfully bmitted: Jac aline Lee 7/20/11 Signature of Clerk 0 -7-2-0-1 Date of Approval