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Home My WebLink Aboutmin light commission 06/16/04 .. ~ RECEWEI fe ICE (! rf)~S 0 r ;h\ r Minutes of Light Commissioners Meeting t JUI 20 PM \: 3 G June 16, 2004 0 i ,-- ~, A N S F\ ESLEOTT S M~SS~CHU Present: Chairman Roger Achille; Vice Chairman Louis P. Amoruso; Clerk Bernie Dolan; Commissioner Mike McCue; Commissioner Steven MacCaffrie; Director Gary Babin; Chief Financial Officer Kimberly Stoyle; Engineer Chris Cox; Line Foreman Gary D' Ambra and Manager John D' Agostino Light Commissioners Meeting The meeting was called to order at 7 :30 followed by the Pledge of Allegiance and then a moment of silence in acknowledgement of the death of former President of the United States, Ronald Reagan. r Newly elected Chairman of the Light Commission, Roger Achille, introduced himself and the new officers, Lou Amoruso as Vice Chairman and Bernie Dolan as Clerk. He also gave an explanation as to the change from Monday to Wednesday evenings for the Light Commission meetings, stating there would be a greater degree of efficiency by having the Light Commission and Selectmen meet at the same time. He felt this was better than haphazardly choosing a Monday each month and commented that the Light Commissioners usually dressed down for their Monday night meetings. Complimenting the Light Department personnel on their professionalism, Chairman Achille believed the Light Commissioners should be professional as well. The plan is to have one hour set aside for the Light Department meeting, every second Wednesday of the month, starting in September. Minutes of May 10, 2004 Motion: To approve Passes 4/0/1 (Clerk Bernie Dolan abstained) Questions and Comments George Dentino, 2 Gladiola Terrace, asked ifhe could defer his questions until the end of the meeting, in the event they might be answered during the course of the meeting. Chairman Achille was agreeable. Director's Report Chairman Achille introduced Gary Babin, the new Director of the Light Department. Director Babin explained that since the meeting would be shorter than anticipated, two items were being tabled until next month: the Retail Rate Comparison analysis and the Capital Improvement Project OverJiew. (' " Chief Financial Officer, Kimberly Stoyle, reviewed the profit and loss statement and the r balance sheet for April. Total metered sales revenue for April was $2,035,122, up 1 % over the prior year. Total power production expense was $1,434,038, up 6% over last year. Net income before payments in lieu of taxes for the month was $141,736 which is down 47%. There was an after payment in lieu profit of $10 1,736, down 56% over prior year. YTn net income was $690,825 before payments in lieu of taxes, which is down 15% over prior year. The Light Department, however, is right where it needs to be for year-to-date, keeping in mind summer is approaching. CFO Stoyle also reported the cost of a barrel of oil is $41, which is up 60% over the prior year. This is an indication that the market needs to be watched. CFO Stoyle stated that MMED's external auditor, Jim Goulet, had been in the previous week and left a short list of items which would be taken care of next month. She believed everything would be wrapped up next month when the adjusting entries were done. She also said the Light Department would need to keep an eye on cash flow, as the payment to the Town for PILOT and internal transfers for FY04 is due June 30. Between this payment and the cost of the Gilbert Street Substation Upgrade (Phase 2), cash balances will go down. r Director Babin reported that two of the Financial Assistants were currently out on medical leaves, Donna Sirois since May 14 and Elaine Peri since May 26. He thanked Kim Stoyle and her staff as the office has continued to run smoothly despite being short staffed. He acknowledged Laurie Anderson, Jim Brinson and Jackie Lee for having helped out tremendously during this time. Commissioner MacCaffrie brought up the issue of temporary help. He thought it was something to keep in mind as he did not want to see the quality of customer service decline or see the office staff overburdened, particularly with the summer vacation season approaching. r Director Babin then spoke about the contract with Calpine Energy Services, L.P., which was entered into in 2001 at a weighted average cost of3.88 cents per kWh over the life of the contract and which represented 26% of the energy MMED purchased in 2003. In the fall of 2003, Calpine lost it's credit rating, dropping below BBB. There is, however, protection for MMED in the event that Calpine goes into bankruptcy. The exposed party (MMED) demands a payment be made into an escrow account which would represent the difference between the contract price and the market price. The amount currently in the account is $3.15 million, which would be used as a rate stabilization fund if Calpine went bankrupt and MMED had to replace the energy on the open market or by entering into a new contract. Director Babin distributed spreadsheets showing MMED' s total exposure during the remainder of the contract, July 2004 thru December 2008. To date, MMED has made one payment while Calpine has made four payments into the escrow fund. Commissioner McCue voiced concern regarding the state of Calpine and questioned what triggered these payments? Director Babin clarified that once Calpines credit rating went below investment grade, MMED can make claims to cover it's financial exposure. While there is no need to be overly concerned about Calpine going bankrupt, there is a need for protection for MMED and the rate payers. Director Babin explained MMED is working with attorneys Rubin & Rudman to create a boiler plate contract. It would involve five 2 '" ~ , entities who are credit worthy and would bid on MMED's load, so MMED could strike a r contract quickly in the market, if necessary. Engineer Chris Cox gave an update on Gilbert Street Substation Upgrade (Phase 2). He explained there are two portions of the project: (1) the storage area for equipment and materials, which should be completed in July and (2) the actual electric construction in the substation. He invited the Board to come out to the Substation and said there is a 1 :00 meeting there every Monday. He also explained that due to heavy rain in the spring, the contractor was unable to keep his aggressive schedule of completing the project before the hot weather came. Mass Electric Construction is now finishing foundations and then will install and connect the steel on the foundations. Cutovers are expected to be completed by the end of August or the beginning of September. A November completion date for the project is still in line. As a final note, Director Babin stated the system capacity is stable, even though loads are increasing dramatically. There is an economic boom in Mansfield with new customers coming aboard. The amount of power sold between January 2004 to April 2004 is up over 7% from last year. Engineer Ann Langille was unable to attend the meeting so Director Babin reviewed her outage summary. He made specific mention of the May 24 lightning storm which took out a part of Gilbert Street Substation for six seconds, affecting 2700 customers. He also reported that two of the outages during the month were due to bad cutouts. Cutout replacement is an on-going project. Currently 47% have been replaced and expected completion is within six months. Engineer Langille will give a six month outage r statistics report next month. Chairman Achille thanked Director Babin for his flexibility and wished him best of luck. Director Babin stated it is his pleasure, he feels welcome and is very impressed with the staff and townspeople. Old Business There was no old business. New Business There was no new business. The date for the next meeting will be set at a later date. Adjournment Motion: To adjourn the Light Commissioner's meeting at 8:00 Passes 5/0 Respectfully submitted: Jacqueline Lee 7/14/04 (' e~~ . ature of Clerk . ) - jl/-j/V Date of Approval 3