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HomeMy WebLinkAboutmin light comm 111907 ;":: E C ~:: l \f C ;~: ~~. Mansfield Municipal Electric Department Minutes of Light Commissioners Meeting 07 l'irt, r ! I ~) ">. r, ~ November 19, 2007 ,-v. I, ,~, ,j...: l.,A" "S"':' I ' 11.\ :-, I' ! f (~ C T T ... Present: Chairman David McCarter; Vice Chairman George Dentino; Commls~toner tb~\. Amoruso; Clerk Ann Baldwin; Director Gary Babin; Staff Accountant Ken Thomson; . Engineer Ann Langille; Engineer Chris Cox; Financial Assistant Jacqueline Lee and Town Manager John D' Agostino Light Commissioners Meeting The meeting was called to order at 7:35 PM followed by the Pledge of Allegiance. Motion: To approve the minutes of October 15, 2007 (Amoruso/Dentino seconds motion for discussion) At the October 15 meeting, Vice Chairman Dentino had asked about the $463,562 increase under AIR Light & Power Customers. He wondered if Director Babin had looked into it. Director Babin answered that he had planned to review this item under Old Business but would address it now since it had been brought up. The reason for the change in accounts receivable was that after MMED upgraded the billing and general ledger system, it was determined that that some of the codes were directing money to the wrong balance sheet items. The result was an overstatement of Accounts Receivable which Staff Accountant Ken Thomson has since corrected. Vice Chairman Dentino had also inquired about the $720,298 change under Accounts Payable. Director Babin explained that in 2007, there was one large MMWEC bill which was outstanding at that time and that the change represented the difference in outstanding MMWEC billing from August 2006 to August 2007. Motion: To approve the minutes of October 15, 2007 (Amoruso/McCarter) Passes 2/1/1 (Dentino against and Baldwin abstained) Financial Results for September 2007 - Director Babin reported that MMED's net operating income year-to-date through September was $707,319. Net income year-to-date was a negative $561,982. Director Babin also reported that the balance in the Calpine Rate Stabilization fund as of the end of September was $3,701,477. He said that MMED's cash position through September 2007 was $2,059,521, up from $1,360,839 for the same period in FY07. Year-to-date, energy sales were down 1.7% from FY07. Director Babin said that the Depreciation Fund balance was at $3,509,857, up from $2,004,970 in FY07. Chairman McCarter questioned the net income year-to-date being a negative number. Director Babin explained the reason was that the cost of the litigation settlement was recorded as an operating expense. He indicated that the auditors had been consulted on this. .... Mansfield Electric Assistance Program - Director Babin told the Board that he met with Gail Farrugia, Director of Mansfield Social Services, in July 2007 at which time they decided that because of the increased demand, a contribution of $50,000 should be requested from the Board for the winter of 2007-2908. He also stated that at the July 16 Light Commissioners meeting the Board approved a contribution to the Mansfield Electric Assistance Program in the amount of $20,000 and requested that Ms. Farrugia attend a Board meeting to justify the additional $30,000 request and answer any questions about the program. Ms. Farrugia told the Board that every year Social Services updates their qualifying guidelines for assistance. She said that over the last year they saw a substantial increase in the number of people seeking assistance, part of which was due to the new deposit procedure that MMED instituted at the Board's direction. Director Babin added that it is problematic for MMED that if a person can't pay their bill, they may decide to move but they can't pay the required deposit. This is why he determined that the Social Services monies should be used for deposits. Chairman McCarter questioned waiving the deposit in these cases. Director Babin did not agree as he believed that you should have a deposit policy that applies to everyone. Commissioner Amoruso inquired as to how much money from the deposits paid by Social Services was coming back and if the recipients of these deposits had paid their final electricity bills. Director Babin answered that a few times in the past the deposit had been used to pay the customer's final bill but that policy has been revised. Payment of the final bill is now pursued by the staff in accordance with the Board's Collection Policy through a series of letters, which after 50 days the account is turned over to the collection agency. After ninety days with the collection agency if the bill is still not paid, the deposit from Social Services is then used to pay the customer's final bill, although it is still pursued through collection. Director Babin told the Board that MMED leaves it to Social Services to make the decision as to who qualifies for assistance for paying the deposit or for routine billing since they are the individuals who are qualified to make that decision. He does not want the MMED staff to be involved in making those decisions. Vice Chairman Dentino questioned why the amount of MMED's contribution to Social Services was greater than the amount that was disbursed. He said that in July the Board questioned the deposit policy which is why they voted to contribute only $20,000 then also asked that Ms. Farrugia attend a Board meeting. He reiterated that this program was originally designated as a heating assistance program. Ms. Farrugia stated that all the money goes to pay electric bills for those who qualify. Ms. Farrugia told the Board that she and her staff go through an extensive application process with those who are applying for assistance. She said that the staffwas concerned a couple of years ago when the deposit policy was instituted that people moving into Town couldn't pay -" the deposit after paying first months rent, last months rent and a security deposit to their landlord. Chairman McCarter said that the Board had envisioned this program to be for someone who has hit hard times. It was not intended to pay for someone's deposit. He stated that he is more conservative. Director Babin said he saw nothing wrong with using the money for deposits because he believes MMED never actually loses the money. He said that the money does come back to the Light Department if someone doesn't pay their final bill. If a customer terminates an account, the outstanding balance is either paid by the customer, in which case the deposit is credited back to Social Services, or MMED pursues collection through all available avenues before using that deposit toward the final outstanding bill. He also told the Board that he has suggested to both landlords and tenants that the security deposit should be reduced if the tenant is unable to pay the deposit to the Light Department. Commissioner Amoruso asked if there was a cap on non-deposit help. Ms. Farrugia answered that it was $400. Motion: That the Mansfield Municipal Electric Department contribute an additional amount of $30,000 to the Town of Mansfield for the purpose of donating this money to the Mansfield Electric Assistance Program in order to provide funding for FY08 (Amoruso/Baldwin) Fails 2/2 (Dentino and McCarter against) Vice Chairman Dentino stated that we are the path of least resistance. The tenant pays their rent and knows that the Light Department won't shut them off between November 15 and April 15. He asked if anyone tracks the program and wondered if the Light Department was losing money or breaking even. Director Babin responded that any tenant that did not pay their bill would be shut off on April 15. Ms. Farrugia stated that this is a win/win situation because we help those who cannot afford to pay. Vice Chairman Dentino questioned how long the Light Department could sustain this. Ms. Farrugia said that Social Services has changed their guidelines for regular electric assistance to make the money last longer. Instead of paying 25%, the customer now has to make a payment of 50% of the assistance received. Motion: That the Mansfield Municipal Electric Department contribute an additional amount of $20,000 to the Town of Mansfield for the purpose of donating this money to the Mansfield Electric Assistance Program in order to provide funding for FY08 (Amoruso/Baldwin) Passes 4/0 Presentation of PLM Planning Study for Proposed East Mansfield Substation - Allan Rice and Mayhew Seavey of PLM presented to the Board a report they had both worked on ..' regarding the proposed East Mansfield Substation. Director Babin indicated that this was the first of two studies to be produced by PLM and was the result of an RFP that MMED had awarded earlier this year to PLM for $57,940. Mr. Rice told the Board that the study produced a twenty year electrical demand forecast for Mansfield. He said that they had established a system design criteria and looked at thermal capacity of equipment. They also compared existing and projected system demand. Mr. Seavey said that PLM considered six forecasting models. The model with the best statistic fit was chosen as the base case. He explained the selected model used a bandwidth approach. The High Band forecast had an average growth rate of2.3% with a forecasted peak demand in 2026 of 84.0 MW. The Low Band forecast had an average growth rate of 1.3% with a forecasted peak demand in 2026 of 67.4 MW. Mr. Seavey also explained the 90% Probability Case, which takes into account the impact of extreme weather, resulted in a forecasted 2026 peak of 74.2 MW. Mr. Rice told the Board that PLM had arrived at a design system criteria document which rated all equipment as operating within normal ratings. He spoke about equipment capability and said that the distribution feeder normal rating is 10.4 MV A, which means there is more feeder capacity available than transformer capacity at Gilbert Street. In regards to loading conditions, he noted that MMED is going to try to maximize the capacity of the existing transformers at Gilbert Street by swapping loads between feeders. Mr. Rice said that there are capacity planning concerns since commercial development is only partially occupied in the Cabot Industrial Park. He added that MMED cannot control the amount of capacity provided by ADM's generators, who could decide at any time that it's not worthwhile to maintain their generators. He said that he and Mr. Seavey recommend maintaining a reserve margin of 1 MV A based on the concerns that he had just reviewed. He also noted that with respect to building a new substation, it would be 3-4 years before the entire process was done. The conclusion of Mr. Rice and Mr. Seavey were that system demand is projected to grow at 1.6% per year between now and 2026. They pointed out that Gilbert St. Substation is close to its firm capacity rating. Their recommendations are to plan to add substation capacity to meet the summer 2010 peak demand. Vice Chairman Dentino believes it is not feasible to expand Gilbert St. Substation. Director Babin said that MMED must evaluate all options. Mr. Rice said you need to look at what's the least cost solution. Mr. Rice then explained Phase 2 of the study. He told the Board that there were five locations in East Mansfield being evaluated for the potential new substation, four of which are currently vacant. He said that they considered all factors and found that some of the potential sites did have fatal flaws, such as the Town owned land that is conservation land. Director Babin said that MMED was doing its due diligence and he did not want to get into Phase 2 results at this time. r' Commissioner Amoruso believed there should be more than one source of electricity coming into Town. He asked if ADM did shut down, was it a possibility for the Town to use their equipment to generate electricity. Mr. Rice said that they did not consider that. Commissioner Amoruso questioned the possibility of home generated energy. He wondered if any thought had been given to encouraging people to do that. Mr. Seavey answered that it had not been considered in the planning process. Chairman McCarter inquired about the possibility of MMED generating its own electricity. Mr. Seavey said that was generally much more expensive than the substation alternative. Director Babin added that windmill power was not feasible for Mansfield as wind propagation studies have determined there was not enough wind to support this. Town Manager D' Agostino stated that the industrial park is going through a rebirth. He explained that right now it is going from warehouses to higher electric demand research and development companies. Mr. Seavey said that was not taken into consideration during their planning. Vice Chairman Dentino questioned whether PLM had already done this study in 1997. Engineer Cox answered yes and the result of the study was to expand Gilbert Street at that time. Request for 100% Green Power Portfolio- Director Babin told the Board that one of MMED's customers has expressed interest in obtaining a portfolio of green power. The reason is that they supply a large retail customer who requires that their suppliers utilize environmentally sensitive measures. The Mansfield company has a competitor who supplies to the same entity and the competitor advertises a portfolio of 100% green power on their web site, which puts the Mansfield customer at a competitive disadvantage. Mr. Seavey suggested that MMED may want to offer green power as an option to all customers. He explained that there are two options, or packages, that can be offered. The first option is 100% green power with a premium of 2.4 cents per kWh and the second option is 50% green power with a premium of 1.25 cents per kWh. Mr. Seavey said MMED would have to do very little to accommodate this type of supply as the firm MMED would contract with would be responsible for procurement, marketing and accounting. He believes a good number of customers would be interested. Motion: To approve MMED staff to pursue the possibility of a green power option (Amoruso/Baldwin) Passes 4/0 Vice Chairman Dentino questioned the cost of pursuing this option. Mr. Seavey stated it should be well under $1000 for his time. r' Old and New Business Commissioner Amoruso wished everyone a happy Thanksgiving. Chairman McCarter asked where things stood with MMWEC. Director Babin asked whether December 10 would be a good date for the next meeting so he could invite the General Manager from MMWEC to attend the meeting. Vice Chairman Dentino suggested one meeting for both Selectmen and Light Commissioners during the holidays. Chairman McCarter said that he prefers separate meetings. Vice Chairman Dentino asked if the start time could be moved to 7:00 PM. It was agreed to hold the next Light Commissioners meeting on December 10, 2007 at 7:00 PM. Selectmen's Business Motion: To approve the application for the Downtown Christmas Parade to be held on November 25, 2007 (Dentino/Baldwin) Passes 4/0 Motion: To adjourn to Executive Session at 9:40 and return for the purpose of adjourning the Light Commissioners meeting. (Baldwin/Amoruso) Role Call Vote: Baldwin-aye, Amoruso-aye, Dentino-aye, McCarter-aye Passes 4/0 The Board reconvened the Light Commissioners meeting at 10: 15 and the following motion was made. Motion: To adjourn the Light Commissioners meeting at 10:15 (Amoruso/Baldwin) Passes 4/0 Respectfully submitted: Jacqueline Lee 12/1 0/07 ~Yl-(\):Jo~~ Signature of Cler \ () \ \ C) \04 Date 'of Approval r