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HomeMy WebLinkAboutLC_07_20_20153� Vr Mansfield Electric Light Commission Minutes W July 20, 2015 OFFICE DAM 22 A c�- 49 Present: Jess Aptowitz, Chair; Olivier Kozlowski, Vice Chair; Frank DelVecchio, Clerk; Doug Annino; William Ross, Town Manager; Gary Babin, MMED Director and Laurie Ande��bt M1VIED Business Manager — Not Present: George DentinoFTS Chairman Aptowitz called the meeting to order and asked those present to stand for the Pledge of Allegiance. The Chairman reminded everyone the meeting is being broadcast live and taped for future broadcast on Mansfield Cable. Vice Chairman Kozlowski joins the meeting at 7:05 PM. Motion: To approve the Light Commission Minutes for April 1, 2015 (Annino/Kozlowski) PASSES 4:0 Motion: To approve the Light Commission Minutes for May 6, 2015 (Kozlowski/Annino) PASSES 4:0 None. Review and Discussion of MMED Receiving the RP3 Designation from APPA -Director Babin informed the Board that the Electric Department received a national award from the American Public Power Association that recognizes excellence in Operations. The RP3 (Reliable Public Power Provider) designation has been received by only 191 systems from over 2,000 publically owned electric utilities in the nation. APPA looks at four criteria: (1) System Reliability (2) Safety (3) Work Force Development and (4) System Improvement. Mansfield Electric received the Gold designation and was awarded a plaque. Director Babin stated that the MMED staff is proud of the award and it is independent confirmation of the things we thought we are doing right. Town Manager Ross stated that it is a tribute to the staff of the Electric Department. The designation lasts 3 years and he believes it is worth having so we will reapply when the 3 years is up. He informed the Board that we received feedback from the judges about things that could be improved upon to possibly meet all the criteria, although that might not be possible. Light Commission Meeting July 20, 2015 Pagel of 6 Vice Chair Kozlowski congratulated the department on receiving this award. He would like to see the feedback that was received. Selectman Annino stated that he knows that we have an outstanding department but it is nice to be recognized by peers. It is a big deal and hopes that we are taking it as such. Clerk DelVecchio stated that his interpretation is that we have to not only be good but organized as well in order to prepare the application. He stated that it is always good to receive an outside review and that it was time well spent. Chairman Aptowitz said he repeats what everyone else said that it was great and that the plaque should be displayed in the office where everyone who comes in can see it. Review and Discussion of Financial Results for the Month of May 2015 - Director Babin stated that he would review the May financials but the financials for fiscal year 2015 wouldn't be available until the end of the month. He would send the Board something and not wait for the next Light Commission meeting. He stated that Net Income was $1.4 million through May 2015 and was on target for $1.6 million to $1.7 million. The operating cash position is strong at $9.5 million, up $1 million from last year. The Generation Charge was over collected by about $286,000. Director Babin stated that we are currently in the process of sending that back to the customers through the current Generation Charge. Energy sales were down 2%, continuing the recent trend. The Depreciation Fund stands at $3.6 million. He stated that we will be expending some of that money on a big project on East Street in front of the schools. We are putting in infrastructure before the Safe Routes to Schools Project. It is finishing up and should be done in a month. Selectman Annino asked Town Manager Ross if he had spoken to Director Babin about the light poles there to which Town Manager Ross answered that he had not. Clerk DelVecchio stated that things seemed to be in line. Chairman Aptowitz stated that he liked the Cash Flow sheet but was wondering if he shouldn't be able to tie the ending cash balance to the balance sheet somehow. Mr. Babin stated that it is a combination of several accounts — Operating Cash, Depreciation Fund and MMWEC Reserve Trust. Chairman Aptowitz stated that those numbers add up to $14.6M and the Cash Flow number is $15.1M. He wonders if inventory is added in. Mr. Babin stated that he would look into it. Chairman Aptowitz would like the accounts flagged in the future. He also said that it looked like net income was pretty good even though business has shrunk a little bit. Review and Discussion of Customer Deposit Policies - Director Babin reminded the Board that customer deposits were discussed at the March meeting but that Town Manager Ross was not in attendance at that meeting so he was asked to bring it back to another meeting. Director Babin said he looked at bad debt write-offs to see if the policy is working. He stated that we currently hold over $900,000 in customer deposits that we have collected over the last 10 years and that it is fair to say that we have had favorable results with write-offs and that it is a good reflection on the Light Commission Meeting July 20, 2015 Page 2 of 6 deposit policy. The commercial write-offs since 2009 were 0.018% which reflects about $1.80 for $10,000. The residential write-offs were 0.467%. It is important to note that of the $308,801 in residential write-offs, that 64% ($196,747) are due to protected customers who walked away without paying because they are protected from being shut off through the DPU regulations. If you look at the rest of the residential write-offs it is about 0.17% or $1.70 per $1,000. It was noted that MMED cannot shut off residential customers between November and April, which sometimes extends into May due to DPU regulations. Town Manager Ross commented that the commercial write-off rate is outstanding. He believes that in private business these would be outstanding numbers for a private business that sells its product and is waiting to get paid for it. Director Babin explained that the way MMED writes off receivables is that, for example, any account that was closed out as of December 31, 2013 would be written off in January of 2015 if it was not paid. The accounts are sent to a collection agency but are considered uncollectable for accounting purposes based on a formal policy that MMED has implemented. Selectman Annino did not have any comments or questions. Clerk DelVecchio wanted to confirm that the write-off was net of the deposit. Director Babin replied that it was. Vice Chairman Kozlowski wondered if other municipal and/or public utilities have similar deposit policies. Director Babin was not aware of any. He also stated that some other utilities charge interest. Chairman Aptowitz recommends that if there is a problem with a commercial AutoPay that we should address it as soon as possible. Vice Chairman Kozlowski asked how quickly this would be addressed if a problem arose. Business Manager Anderson stated that on the afternoon that the auto pays are due she runs a report and calls the customer. Most times it is a credit card number that needs to be updated but if it was for insufficient funds that they would need to pay the amount due plus a deposit within 5 business days. Director Babin informed that Board that MMED's financial exposure with any commercial customer would be for 45-60 days' worth of usage. Update on Proposed Solar Installation on Branch Street - Director Babin informed the Board that MMED is actively negotiating a Purchase Power Agreement as well as a Development Agreement. Town Manager Ross stated that the key issue is payment of a property tax versus a PILOT agreement. The developers' last request was for a fixed amount for a year and if property tax is more than that they want to recuperate the amounts above the PILOT. State law and DOR require that a PILOT vote would have to go to town meeting, which won't occur until next spring. Town Manager Ross would like to see property tax paid and if state does away with personal property tax on solar equipment installed they probably would be willing to pay the property tax on the land. Director Babin stated that the developer has to sell this idea to get financing so they are looking to nail down fixed cost in the form of a PILOT in order to do that. Vice Chairman Kozlowski asked whether or not this discussion should be held in Executive Session. Chairman Aptowitz said it is different from contract negotiations because in this case there are only a couple of options on the scope of what they would be taxed for. Selectman Annino stated that the minimum should be what we are taxing the property at now. Light Commission Meeting July 20, 2015 Page 3 of 6 Town Manager Ross stated that in working through the agreements we are putting together a lot of the elements that the neighbors requested and that the Board wanted on a single site plan as they are easier to see in one location rather than having to go through the agreements to find them. He believes that the Town is close to an agreement but that nothing is final until the Board has had a chance to look at it and comment on it. Clerk DelVecchio stated that we don't want to introduce variability into it now unless it benefits us. Director Babin believes that it is a positive project, a good use of the brownfield property and that NP ED has a vested interest in making this work. It is in everyone's best interest to work with out. It provides renewable energy for MMED's power portfolio, which is important. Chairman Aptowitz commented that if someone builds a building on that site the appraiser goes out and it's worth $3 million, it is that amount times the tax rate for the taxes. In this case there may be millions of dollars of equipment but they can only produce so many kilowatts times the power rate and that's their revenue. Director Babin stated that there are tax credits, subsidies and renewable energy credits for the developer so there are many positive things about it. Director Babin mentioned that Massachusetts was selected as the most conservation minded state because of the solar program and that is the crown jewel of the Patrick Administration. Chairman Aptowitz asked if the project is approved what is the time from shovel ready to completion of project. Director Babin stated that they were hoping to start later this year but it may be next year. He stated that it doesn't take long to construct, maybe a few months. Review and Discussion of Current Solar Installation Locations in Mansfield - Town Manager Ross stated that Director Babin will discuss current solar installations that are in place. These are privately owned for their own use and the customer sells back the excess to MMED based on our rate structure. One of the issues is we have reached the maximum 2% of peak demand on our cap with current installations. National Lumber has expressed interest in installing solar on their property. Director Babin stated that he has spoken to about 50 to 60 solar developers over the years and most are just putting out feelers to see where MND is at but there is a lot of interest out there. One thing he wants to clarify is that the list that is being presented are those customers who qualify for net metering, which means they use the energy generated for themselves and anything that they export to MMED is paid to them at the Generation Charge. That is separate from the Purchase Power Agreement with Branch Street because Branch Street will only generate power to sell it to MMED, as opposed to generating it to use on the premises and then selling back the any excess. It is important to make that distinction. Chairman Aptowitz asked if he had a business and came to us and was told that we were at our cap can they say that's not fair and go to the State and NW ED could say too bad we are doing it. Director Babin replied that the Board filed a net metering tariff rate with the state which stated that 2% of our peak demand is the cap for solar projects that qualify for net metering. The cap applies to commercial customers but not residents. The cap applies to customers like VAM Realty on Francis Ave where they have an 850 kilowatt DC rating solar facility. Light Commission Meeting July 20, 2015 Page 4 of 6 Director Babin said that National Grid has reached their cap and have closed the program for new installations. All of solar developers and the solar industry are saying the cap is just a number so you just have to raise the number. The Baker Administration said that they are not ready to raise that number until we fully understand the implications. NStar still has room under their cap. Director Babin does not believe that we are required to offer net metering to commercial solar installations that go over the cap because of our tariff. Some utilities don't even offer a net metering rate so they don't pay for any excess energy sent back to the utility. Developers have asked how to raise the number and Director Babin has told them it would take a vote of the Board and that the customer, not the developer, has the right to come in front of the Board and petition that the cap be raised but no one has done that yet. He has to believe that at some point someone will come in and ask to raise the cap. If they do, it would have to be through a revised filed tariff, undergo a public hearing and a full blown rate process. Town Manager Ross stated that it is a concern for MMED because under certain conditions energy can be exported back into the system that could go back to the substation and this could cause negative power flow through the substation, initiating unwanted system operations. The typical example is that on a Sunday afternoon at 1 PM when the solar installation has maximum output but system load is minimal. This is the type of condition that needs to be evaluated. Town Manager Ross stated that with this in mind, MMED has purchased software that will allow modeling of the electric system to evaluate the impact of any proposed installations. Chris Cox is currently being trained on the software. Vice Chair Kozlowski asked if we need this software for any particular customer. Town Manager Ross responded that it is software that we should have had right along to help us balance the system especially when we put the second substation in place. The water utility has had modeling software in place for quite a number of years. Discussion and Possible Action to Create a Promotional Video for Mansfield - Town Manager Ross informed the Board that the International City Management Association, of which he is a member, selects 5 or 6 communities at their annual conference to be highlighted in a video about their accomplishments. He received an email and call last Thursday that they would like to highlight Mansfield. Their focus this year is on fiscal management, community and economic development and civic engagement, all of which Mansfield is working on. The video would include Selectmen, Town Manager, Department heads, and citizens and would focus on the strategic plan, downtown, TOD development and budget process. The video would run 5 1/2 to 6 minutes. It would run continuously at the conference in Seattle and all 6,000 attendees of conference would receive a copy. It would be available online for 12 months. Mansfield would receive a master copy that is not copyrighted plus all the raw video which we can use in any manner we choose. He said they need to know fairly soon. It costs $22,500 to do this. It is something that we have talked about doing. He has viewed the online videos and they are very professionally done. He has not priced having any other firms to do this. He will send the Board the links for their review. He did not see any New England communities in the videos he viewed. Town Manager Ross believes it is an opportunity for us and asked for the Board's reaction. Light Commission Meeting July 20, 2015 Page 5 of 6 Vice Chairman Kozlowski asked if it would be a Town project or NE\4ED. Town Manager Ross responded that he believes a significant amount of the money would come from MMED. Vice Chairman Kozlowski asked about the deadline to which Town Manager Ross responded that it was this week. They want to have final product complete by September 91h because the conference is about 2 Y2 weeks after that. Clerk DelVecchio said that he was for it until he heard the price tag. Selectman Annino is concerned about the cost as well and doesn't support it at this time. Chairman Aptowitz shares the same concerns as the rest of the Board and questioned who should pay for it if we go through with it. Town Manager Ross will forward links to Board and speak with 1CMA regarding the deadline so it could be discussed at Selectmen's meeting on July 251h Neither Clerk DelVecchio nor Selectman Annino had any additional comments. Chairman Aptowitz informed Director Babin that there are about half dozen streetlights out on North Main Street. Vice Chair Kozlowski thanked the Electric Department for addressing a customer concern that he brought to us. The issue was resolved the next day and the customer was appreciative. Town Manager informed the Board that the Governor has filed a supplemental budget bill that would give $93 million to cities and towns for their snow and ice deficits. If approved by the Legislature, it would be distributed using the Chapter 90 formula. Mansfield's share would be around $93,000 which would go a long way toward wiping out the deficit. It would leave about $35,000 which should be paid by FEMA. Chairman Aptowitz asked if the audit had been scheduled. Director Babin responded that some preliminary field work such as inventory had been done. Chairman Aptowitz stated that he believes the auditors would like to tour the Bird Road and Gilbert Street substations and High Street to see physical assets. He brought up the Consolidated Annual Financial Report (CAFR) and the fact that it is a big deal and would be approved by GFOA. It is a feather in Mansfield's cap that people will like to see. Town Manager Ross stated that he spoke with Town Accountant John Stanbrook about the importance of it not only for our own insight but for transparency. It's like the annual report and financials merged together into one document. Chairman Aptowitz wondered about billing water, sewer and electric as a one charge bill. Director Babin reminded the Board is on a completely different general ledger system than Town but information flows back and forth between the two departments through John Stanbrook and Staff Accountant Ken Thomson. Town Manager Ross stated that it was a longer term goal. The timing of the next meeting was discussed and Town Manager Ross and Chairman Aptowitz prefer Monday night separate meeting. No date was set but it would be after Labor Day. Director Babin suggested that maybe he could bring the year-end report to a Selectmen's meeting instead of waiting for the next Light Commission. Light Commission Meeting July 20, 2015 Page 6 of 6 Motion: To adjourn Board of Selectmen's Meeting at 8:22 PM (DelVecchio/Kozlowski) PASSES 4:0 Signature of Clerk Date of Approval Ama Includes.- Copy of MMED Board Packet for July 20, 2015 meeting (19 pages) Light Commission Meeting July 20, 2015 Page 7 of 6