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HomeMy Public PortalAbout08-02-1999 PROCEEDINGS OF THE COMMON COUNCIL OF THE CITY OF RICHMOND,INDIANA,SERVING AS A BOARD IN CHARGE OF THE OPERATION OF THE RICHMOND POWER&LIGHT PLANT MONDAY,AUGUST 2,1999 The Common Council of the City of Richmond,Indiana,serving as a Board in charge of the operations of the Richmond Power&Light Plant met in regular session at 7 p.m.Monday,August 2, 1999,in the Council Chambers in the Municipal Building in said City.Chairperson Bruce Wissel presided with the following Councilmembers in attendance:Howard"Jack"Elstro,Etta Lundy,Bob Dickman,Sarah"Sally"Hutton,Dennis R.Rice Sr.,Bing Welch and Larry Parker.The following business was conducted: ROLL CALL Nine present. APPROVAL OF MINUTES Councilmember Hutton moved to approve the minutes of July 19, 1999,second by Councilmember Elstro and the motion was carried on a unanimous voice vote. APPROVAL OF BILLS,INVESTMENTS AND TRANSFERS Upon recommendation of the Finance Committee,Councilmember Hutton moved to approve the following bills for payment,seconded by Councilmember Allen and by unanimous voice vote the motion was carried. Bills Already Paid: Payroll and Deductions $247,796.40 Investments Purchased From: Cash Operating Fund 900,000.00 Bond Sinking Fund Utility Bond Reserve Fund Depreciation Reserve Fund 91,000.00 Insurance Reserve Fund Consumer Deposit Fund Cash Reserve Fund 178,309.00 Group Insurance Fund Total Investments $247,796.40 Transfer from Cash Operating Fund to: Cash Reserve Fund for Payment To City in lieu of taxes Transfer from Cash Operating Fund to: Depreciation Reserve Fund For Property&Plant Transfers from Depreciation Reserve to: Cash Operating Fund Transfers from Consumer Deposit to: Cash Operating Fund Transfers from Utility Bond Reserve Fund to: Bond Sinking Fund Transfers from Cash Operating to: Interest and Bond Principal Bond Sinking Fund Cash Reserve Fund Utility Bond Sinking Fund Depreciation Reserve Fund Insurance Reserve Fund Consumer Deposit Fund Interest and Bond Principal End of Month Petty Cash Revenue Bonds Interest Coupons Redeemed Interest Coupons Redeemed Bond Coupons Miscellaneous Prepaid Invoices 184,365.61 Total Prepaid Invoices 1,601,471.01 Less EFT/Direct Deposit of Payroll (71,130.48) Total Prepaid Invoices 1,530,340.53 Total EFT Transfers: 1,468,448.89 Total Prepaids plus EFT Transfers: 2,998,789.42 Total Bills Not Paid: 669,648.78 Grand Total of Bills to be approved: $3,668,438.20 RP&L Minutes Cont'd August 2, 1999 Page 2 REMARKS BY CHAIRPERSON Chairperson Wissel had no comments. UNFINISHED BUSINESS There was none. STREET LIGHT COMMITTEE REPORT Councilmember Elstro said he had no report. REPORT BY GENERAL MANAGER General Manager David Osburn reported on the operating results of the last two weeks during the 90-plus days,stating that RP&L issued requests for voluntary cutbacks by its customers to meet the peak demands.He said that was done primarily to assist the other utilities in the region,adding that the last two weeks have been extremely stressful within this area of the midwest and east coast. Osbum said a new all-time peak record of 168.9 megawatts was set Wednesday,July 21.Then,on July 22 that was surpassed with 172.8 megawatts.And,the following Monday,July 26 both those records were surpassed with 173.1 megawatts.Osbum pointed out that all three of those surpassed the all-time peak of 165 megawatts set in 1998,which is an increase of almost 8 megawatts or 4.8 percent.He added that having close to 5 percent increase in demand in one year is fairly high.He said you plan on increases of 2.5 to 3 percent.Osburn said at the time they were using 173.1 megawatts RP&L was meeting that with 92 megawatts of its own generation,66 megawatts from IMPA's combustion turbines for Round Barn Road and 15 megawatts of power coming in off the grid. Last Friday,Osburn said,some parts of the state reached 100 degrees and utilities were requesting cutbacks.He said ClNergy notified 1,200 of its largest customers asking them to shut down completely from noon to 6 p.m.,then around 1 p.m.they issued a Level 3 alert which is awfully close to grid collapse.In this area,Osbum said,they had good response from customers with Richmond Casting making the most noticeable difference with shutting down 2 megawatts load,and Belden and Johns Manville each with half a megawatt.He added that across the IMPA system the response was good with customers cooperating and cutting back. He added that without that cooperation there would have been blackouts throughout this area.He said he had heard that Chicago,Ill.and Columbus,Ohio,had blackouts on Friday.He said he feels it is most important that the customers have this information so they can realize just how serious the requests are.He said they are hoping there won't be a need for this next summer because over 1,000 megawatts of new generation are supposed to go on line before next summer.That's the good news,he said.The bad news is that it's all what is called peaking power,the gas combustion turbines that are more expensive to operate.While the power hopefully will be there next summer,he said,it would be more expensive. Some of the companies who are planning the units and building,are building what is called a merchant plant,which means it's not dedicated to this area nor to any particular customer,but it is on a first-come,first-served basis.Also contributing to the problems this past two weeks,Osbum said,was because of the high temperatures and the near drought conditions.He said several plants had to cut back in this area because they use river water for cooling water and they faced two problems—either the water was too hot or there wasn't enough water there.He said IMPA would very soon be looking at the feasibility of adding new generation and he plans on participating in that within the next two or three months. Osbum said he had mentioned purchasing of SO2 credits to the Board before and he brought it back for more discussion tonight.He said he gave them a report that he gets monthly which gives examples of historical SO2 credits.In the discussion of one of the items the last time he brought this to the Board,he said,he was afraid he had misled them about when the EPA is going to have its annual auction.He said he had told them that we have to have the money in the account ahead of time.Now,he said,if they want to work with a broker just to purchase credits in the market they don't have to do that.He said he had talked with a company that said once the transaction has been approved and the EPA verifies that the credit has been transferred to your name,then they have to pay for it within three business days. Another broker he talked with,Osbum said,quoted the figure of five days. Osburn said he wanted to give the Board an example of what RP&L is facing.He said the utility is emitting almost 17,000 tons of SO 2 now and the limit starting the year 2000 is going to be 9,000,which means RP&L is going to have to shed about 8,000 tons of SO 2.He said they had hoped to meet some of the requirements by burning low sulfur coal and using the precipitators doing a humidification test.However,last week,he said they had trouble getting up to full load in their units,partially because they got some coal in with lower sulfur than they had hoped for.He said they fired up the LIFAC unit but didn't get the results they had hoped for and added that so far the early indications are that humidification may not work like they had hoped it would. Osburn said the option is available to install a bag house,which works like a big filter bag that would take out any emissions to keep us from having any violations.He said they are hoping to avoid that cost.He added that later in the year he would have more results to report. Getting back to SO 2 credits,Osbum said,he feels it's wise for RP&L to get in to this market.The reasoning behind this,he said,is that if they find out some time next year the utility can't meet the requirements it would be nice to have some of those in the bank to fall back on.He added that if they aren't used,they just sit there,and they can be used in the future or if you don't use them you can sell them.Councilmember Wissel asked if Osburn knew the amount of the fines that would be imposed and he answered that he did not. RP&L Minutes Cont'd August 2, 1999 Page 3 Osburn saidhe was looking to the Board for authorization to offer Anthem Preferred Provider Network for medical benefits to its employees,stating that a memo had been sent out showing the comparison of the two plans.Osbum said this is an options plan and not required,but Anthem is providing this so RP&L can possibly cut its costs and those employees electing to go on this plan will have that as an option.However,he added,they can still stay on the existing plan. Councilmember Welch asked Jim Daugherty,human resources director for RP&L,to highlight the major points. Daugherty said he thinks that some of the employees think this is an HMO,but that's not so.He said it is quite different and is a large network of doctors in the institution and Reid Hospital and Anthem will provide them with a list of those doctors.He estimated that 95 percent of the doctors in Wayne County are in the network whereas HMOs would be a much smaller,structured group.He said there are at least five or six things on the comparison sheet,which are incentives to go to the new plan.He added that it is not a lifetime situation because the plan is going to be offered on an annual basis.He said he hoped that most of the employees would see the advantages of going to the new one.He said if they do go cm the new plan,then decide to use the services of someone outside the network,they would go back to the old one and the claim would be honored under the conditions of the present plan. Councilmember Welch said the big savings is to the individual,and if they are participating with a primary care network,instead of paying their physician 80 percent of the cost for an office visit and whatever occurred during that visit,under what Anthem is offering they would only pay$10 as a co-pay.Being a self-insured plan,he added,it is important to keep the costs down and the employees share in the premium costs.He said everyone would gain by getting the total dollars down to a lower level,which would enable the utility to adjust premiums downward would be another advantage.Councilmember Allen asked how much work is involved in managing the two different plans. Daugherty answered that no more work is involved.He said Anthem charges a percentage of the paid claims so it is going to be the same amount,no matter which plan is used.He added that they only charge the administration fee. Osburn saidhe had met with the employees ahead of the time this was presented and he feels that,overall,it was fairly well received.He said you always expect some skeptics,but added that after a year,if they don't like it,they can switch back. Councilmember Welch moved to authorize the General Manager to offer Anthem Preferred Provider Network to the utility's employees,second by Councilmember Rice and the motion was carried on a unanimous voice vote. Councilmember Elstro,referring to the most recent A.P.P.A.newsletter,said an article on Page 10 is about a little town in Georgia.The title,he said,is"Newman,Ga.Shows Telecom Business Can Pay."He said they only have 5,500 customers and have Cable TV,furnishing 86 channels and 30 of those are for music.He said they are making money off of it,adding that they are also into the Internet.He encouraged his fellow Board members to read the article. ADJOURNMENT There being no further business,on a motion duly made,seconded and passed,the meeting was adjourned. Bruce Wissel,Chairperson ATTEST: Norma Schroeder,Clerk