MUNICIPAL ELECTRIC POWER ADVISORY BOARD
Minutes
April 28, 2009
HMLD 7:00 p.m.
Members Present: Peter Liddy, Chair, Donna Fitch, Gary Harrington, Tom Runstrom and John Shepherd
Also Present: Jacquie Kelly, Assistant Town Manager, Michael Flagg, General Foreman, Margaret Donaldson, Office Manager, Chuck Underhill, Rates by Design
Minutes
On a motion by Mr. Runstrom, seconded by Mr. Liddy, the minutes from December 4, 2008 were approved.
On a motion by Mr. Shepherd, seconded by Mr. Harrington, the minutes from January 21, 2009 were approved as amended.
Rate Study
Mr. Chuck Underhill of Rates by Design made a presentation concerning the department's rate study. Mr. Underhill and staff have worked on the study for the past several months. The cost of service portion of the study indicates that several adjustments would be made in order for the Department to continue collecting adequate revenue under each of its rate classes. The residential rate would increase by about 1.7%; the small commercial rate would decrease about 11.5%, the general services rate would stay about the same (increase .3%), the municipal pumping rate would increase about 11.3%, and the streetlights rate would increase by 55.6%. Historically, the latter two classes of customer, municipal pump and streetlights, have not been paying their share of the costs. These rates would generate revenue reflective of the department's
costs in providing electric service within these classifications of customer.
Mr. Underhill and staff recommend that the customer charge be increased from $2.00 per month to $5.00 per month, an amount more accurately reflecting the cost of meter reading and billing. A portion of the fuel charge may be included in the base rate as well as the department's expense, net of any reimbursement by FEMA, for repairing the system after the December 2008 Ice Storm. The Department's membership fee for the MA Technology Collaborative will also be added to the rates. A share of the cost to the town of ice storm brush pick up and tree removal will be borne by the Department through its Rate Stabilization Reserve.
In addition to addressing the highlights of the proposed rate adjustments, Mr. Underhill explained that he was considering presenting a time-of-use rate for a pilot program. If the program were successful, the department would invest in upgraded meters and make the program available to all its customers.
Mr. Underhill has developed a simplified system to calculate and change the Power Cost Adjustment (PCA) factor. The new method will be used by department staff to calculate the PCA on a prospective (rather than reactive) basis. Also, the general services rate will be restructured so it is more understandable and easier to explain to our GS customers, who comprise over 30% of the department's revenue base.
The Board had questions and there was general discussion about the rates and various policy issues. The Board was concerned about the increase in customer service charge. They felt it should be a smaller increase. There was uneasiness about the possible increases in municipal pumping and streetlight rates. In effect, these increases would shift an expense from the Light Department rate payers, to the town's taxpayers. Also, there were many questions about time-of-use rates and the proposal to implement a pilot program where a limited number of customers would be allowed to participate in the program. The modifications to the PCA adjustment calculations also required further explanation.
The Board would like to meet again with the Consultant prior to the rate adjustment proposal going before the Board of Selectmen.
Red Flag Policy
A draft Red Flag Policy was distributed. The policy is a requirement of the Fair and Accurate Transaction Act of 2003 (FACT Act) which provides protections to the customers' private account information. The Act provides guidance to financial and other institutions (like the Light Department) to detect, prevent and mitigate identity theft in connection with customer accounts.
The Board reviewed and approved the Policy in concept. The policy will be implemented on May 1, 2009.
Substation Sound Wall
Mr. Flagg reported that new sound reduction wall will be put up around the Bullard Street Substation. This is in reponse to a few of the neighbors' complaints that the Substation emits noise that is disruptive to the surrounding area. A modular sound "proofing" wall has been ordered and shipped to the Light Department. It was the original plan of the Light Department to have its own employees install the wall. However, with the work load that resulted from the 2008 Ice Storm, department employees will not have the time to do the installation. Therefore, Mr. Flagg plans to hire a contractor to construct the wall and is working with a professional engineer to put together the specifications.
FEMA Reimbursement
Ms. Kelly reported that all the town's applications (project worksheets) for reimbursement from FEMA for storm related expenses have been completed and submitted for review. The total out of pocket costs (excluding brush removal) to the town are approximately $3.2 Million. Upon positive review by FEMA, the Town is eligible to receive 75% reimbursement. The brush removal will be handled by the Department of Conservation and Recreation (DCR). The DCR has a specific interest in the Asian Longhorned Beetle containment area. The contractor will pick up brush, trim branches hanging over public areas, and remove destroyed trees in both the Asian Longhorned Beetle area and the remainder of the Town. The Light Department will pay the town's proportional 25% share of the contract cost to DCR. DCR will pay the costs "up front" and will apply
to FEMA for reimbursement.
Brush Pick-Up and Disposal
Mr. Runstrom asked about a schedule for brush pick up. The contract with the DCR has been delayed multiple times. At present, it appears that the work could begin in early May. Staff estimates that the pick-up will take several weeks.
Having the DCR contract the work is financially advantageous to the town because they will pay the contractors the full amount, and the Light Department will only have to pay the 25% share.
New/Old Business
The Board congratulated Mr. Liddy on being in business as LidCo for 25 years.
Adjournment
There being no further business, on a motion by Ms. Fitch, seconded by Mr. Shepherd it was voted to adjourn the Municipal Electric Power Advisory Board meeting at approximately 9:15 p.m.
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