HomeMy Public PortalAbout08-21-1995 PROCEEDINGS OF THE COMMON COUNCIL OF THE
CITY OF RICHMOND.INDIANA.SERVING AS A BOARD
JN CHARGE OF THE OPERATION OF THE RICHMOND POWER&LIGHT PLANT
MONDAY.AUGUST 21.1995
1 The Common Council of the City of Richmond, Indiana, serving as a Board in charge of the operations f the
2 Richmond Power & Light Plant met in regular session at 7 p.m. Monday, August 21, 1995, in the C uncil
3 Chambers in the Municipal Building in said City. Chairperson Howard "Jack" Elstro presided with the foil wing
4 Councilmembers in attendance:Gene Allen,Jane Brookbank, Bob Dickman, Mary Ellen Donat, Sally Hutto , Etta
5 Lundy, Don McBride and Larry Parker. The following business was had to-wit:
6
7 APPROVAL.OF MINUTES OF AUGUST 7.1995
8
9 Councilmember Parker moved to approve the minutes of the previous meeting as prepared, seconde by
10 Councilmember McBride and on a unanimous voice vote the motion was carried.
11
12 APPROVAL OF BILLS. INVESTMENTS AND TRANSFERS
13
14 Upon recommendation of the Finance Committee,Councilmember Donat moved to approve the following bil for
15 payment,seconded by Councilmember Hutton and by unanimous voice vote the motion carried.
16
17 Bills Already Paid
18 Payroll and Deductions 217,967.58
19
20
21 Investments Purchased From:
22 Cash Operating Fund 1,500,000.00
23 Bond Sinking Fund
24 Utiity Bond Reserve Fund
25 Depreciation Reserve Fund 91,000.00
26 Insurance Reserve Fund
27 28
Consumer Deposit Fund
Cash Reserve Fund 164,730.00
29 Group Insurance Fund
30
31 Total Investments 1,755,730.00
32
33
34 Transfer from Cash Operating Fund to;
35 Cash Reserve Fund for Payment to
36 the City in Iiv of taxes 164,730.00
37
38 Transfers from Cash Operatina Fund to:
39 Depreciation Fund for Property
40 and Plant 91,000.00
41
42 Transfers from Consumer Deposit to:
43 Cash Operating Fund
44 _.
45 Transfers from Utility Bond Reserve Fund to;
46 Bond Sinking Fund
47
48 Transfers from Cash Operating
49 Interest and Bond Principal
50 Bond Sinking Fund
51 Cash Reserve Fund
52 Utrlity Bond Sinking Fund
53 Depreciation Reserve Fund
54 Insurance Reserve Fund
55 Consumer Deposit Fund
56
57 Interest and Bond Principal
58
59 End of Month Petty Cash
60 Revenue Bonds
61 Interest Coupons Redeemed
62 Bond Coupons
63 Miscellaneous Bills Already Paid 1,501,665.10
64 Less EFT/Direct Deposit of Payroll (35,458.74)
65 Total prepaid invoices 3,695,633.94
Total Bills Not Paid 754,171.01
Grand Total 4,449,804.95 --_ ti - r:_
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RP&L Minutes Cont'd
August 21, 1995
Page 2
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1 REMARKS BY CHAIRPERSON
2 --
3 None were made.
4
5 UNFINISHED BUSINESS
6
7 Councilmember Brookbank questioned General Manager Irving Huffman again about the amount of raises given
8 to Pam Broering and he said he came prepared to give her the exact figures, concluding that she receive' only
9 one merit increase.Councilmember Brookbank responded that the RP& L Board gives Huffman a block of oney
10 to give the raises and said she felt the Board should discuss them before they are given.
11
12 Councilmember Allen asked Huffman whether or not RP&L pays for the education of its employees and H ffman
13 answered that had always been a policy. Councilmember Allen asked if there was a limit placed on the a ount
14 and Huffman said there was none.
15 .
16 STREET LIGHT COMMITTEE REPORT
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18 There was none.
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20 MISCELLANEOUS BUSINESS
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22 Peter Wickman, 1604-Pheasant Run, General Manager of Belden Wire & Cable, outlined the intentions f the
23 Richmond Industrial Group formed with the hope of coping with de-regulation.He said his purpose for spea ing to
24 the Board was to discuss the goals and objectives of his group.and its desire to work with RP& L in an open and
25 collaborative manner. His hope,he said, is to minimize any divisiveness.
26
27 Wickman said it is the advent of deregulation that will make pricing so much more difficult, noting that 'n ..;d
28 de-regulated environment, the purchaser will have the opportunity to shop at the best price. He stated that-
29 industry studies have consistently predicted a differential of five per cent will be sufficient motivation to convince
30 the large purchasers to switch. He said industry wants to be sure to pay the lowest rate possible for its power but
31 it should be fair. He said it is smart business to work closely with suppliers. As general manager of Belden,
32 Wickman said what his responsibility is, is $10 million worth of power each year and Belden is one of RP & L's
33 largest customers at $2/12 million this past year. He added that he feels the relationship with the supplier is
34 critical.
35 . .
36 Councilmember Lundy responded, saying it is vital for this Board to understand its customers and negotiati g will
37 mean working closely with the utility which needs to more efficiently manage the load and reduce overall :osts.
38 Wickman said he hopes his group and.RP&L can sit down together and identify creative solutions. He added that
39 there are ways RP&L can help all of us to be better consumers because power quality is already an area w here
40 RP & L excels. He added that it is an option both can explore together.. Wickman said RP & L p vided
41 information in a timely manner.
42 .
43 Councilmember Donat said she believed Wickman when he said he wanted to work with RP & L and mentioned
44 an editorial that appeared in the Palladium-Item, noting that the tone was disturbing to her. Wickman ans Bred
45 that the selection of this group's consultant is a subject he was not prepared to comment on. He said it is his
46 group's intent to be open, explaining why it made the selection. He said the selection is an ex-operations ma ager
47 who knows RP & L and he was evaluated from a selection standpoint through which they looked at the skive
48 which outweighed the negative. He said he reads the newspaper with interest but does not necessarily let it get
49 under his skin.
50
51 Councilmember McBride asked Wickman how RP & L's rates are in comparison with others.Wickman ans ered
52 that in the residential rate it is a favorable comparison but the benchmarking done on the industrial rates_sugcAct
53 there are more favorable rates available but these rates are in the middle of the pack.' In answer_!o
54 Councilmember Dickman'squestion as to where he wanted to head with this _information, Wickman s id he
55 needed to put it on record about being able to communicate. He added that he is satisfied to date with w at is
56 being done, adding that there had been no surprises.
57
58 Chairperson Elstro asked if most of the industries were going along with the group:Wickman answered that there
59 are a number who have elected to participate'and also,a number who chose not to. Councilmember Donat sked
60 Wickman to name the businesses involved and he said he would rather not, because there are some who o not
61 want the bad press because of the negative connotation of participating in the group. He added that there are a
62 number of companies who are participating and who have called the management of RP & L and he sug ested
63 that perhaps the utility might have that information on hand. Councilmember Donat said she found it discou aging
64 that the businesses want to be anonymous,:adding that if this is an above board cooperative effort there should
65 not be any negative connotations. She said she would hope Wickman would return to his group and expres her
concern and asked if nothing is wrong here,what are they hiding? •
RP&L Minutes Cont'd
August21, 1995
Page 3
1
2 REPORT BY GENERAL MANAGER
3
4 Huffman stated that RP&L has the same interest for all of its customers and agrees with the Indiana Utility
5 Regulatory Commission that one class of customer should not subsidize another. He added that when the cost of
6 service study is completed the information will be available to everyone. He said during the last rate case,all
7 parties were in agreement with the filing.Giving some background information, Huffman said RP&L had 15
8 employees 10 and 20 years ago and they have become more technically oriented. He said sales are up over 50
9 percent over those 20 years.He said in 1992,before the rate increase in 1993,all residential customers paid
10 5.417 cents and in 1993 there was a rate increase. Despite that,he said,the average paid last month was 5 195.
11 He said in 1992,the average industrial customer paid 4.6 cents and the average during the month of July thi -
12 year they paid 4.27.The rate went down 7.3 percent in that time frame. He said the residential customer rate
13 went up from 5.8 to 6.0 and it will go up again because more shift of the burden will go there.
14
15 Huffman said RP&L is competitive and it is wrong for any media to indicate they are not. He said two thirds of RP
16 &L's load is industrial and less than one third is residential so for any$1 given to the industrial area,two dollars
17 must come from the residential side.He said RP& L is a regulated industry and is not allowed to make negotiated
18 settlements at this point. In Indiana the service territories are defined.He said the law has to be changed and that
19 will probably not be done in this next session of the legislature.He said people on the east and west coast are
20 complaining because they want their rates lowered and the utilities in the midwest are saying they can sell wer
21 cheap.What will happen, he said, is that power will go to the east and west coast at a premium price and wh t is
22 going to happen in the midwest is that rates are going to go up.He said the intent is to smooth this out so th re is
23 not that big disparity on the east and west coast.
24
25 Councilmember Brookbank said she is concerned that the City pays one of the largest amounts for electricity in
26 the state.Chairperson Elstro reminded her that the City has more street lights than any city in Indiana. Huffm n
27 said the City has 2,183 and he suggested that not one other city in the United States has more street lights per
28 square foot than Richmond. Huffman said the IURC says the City must pay for that cost of service and when he
29 cost of service study indicated RP&L was not charging enough money the cost went up.
30
31 Councilmember Lundy asked if someone had been assigned by RP& L to work with the Richmond Industrial
32 Group and Huffman responded that he and Andy Boatright will be doing that.
33
34 Huffman reported that the bids for the network backup construction project came in very high and RP&L de ided
35 to break up the project and apportion it to different contractors.
36
37 Councilmember Brookbank asked if John Washington had got the information he wanted from RP& L -
38 Huffman said Daugherty had asked him to put it in writing.Washington said he did just that and it is in the m il.
39
40 Councilmember Allen questioned Huffman on the legal ad she had seen in the Palladium-Item and he explai ed
41 that is a property in the middle of REMC territory and it was agreed it would be more practical for RP&L to s rve
42 that customer until the territory is transferred permanently. He added that the hearing will be August 23 at th
43 Public Service Commission in Indianapolis.
44
45 ADJOURNMENT
46
47 There being no further business,on a motion duly made,seconded and passed the meeting was
48 adjourned.
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55 Howard"Jack"Elstro, Chairperson
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57 1,
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61
62 ATTEST: - _ _ -
63 Norma Cames,City Clerk
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