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									                              MINUTES FOR THE REGULAR MEETING
                                     OF THE POWER BOARD
                               OF THE CITY OF SPRINGVILLE, UTAH
                                   WHITEHEAD POWER PLANT
                                     APRIL 9, 2008 – 6:30 A.M.

MEMBERS PRESENT:             Councilman Ben Jolley, Chairman Leon Lee, Martin Conover,
                             Rodney Burt, Clyde Gabbitas, David Neilsen, Lynn Panter, Glade
                             Creer, Travis Ball
MEMBERS ABSENT:              None
DEPARTMENT STAFF:            Leon Fredrickson, Matt Hancock, Tony Fieldsted

Minutes were recorded by Kami Craudell, Power Board Secretary.

The meeting was brought to order by Chairman Lee at 6:29 a.m.. Members were in attendance
as listed.

Motion was made by David Neilsen to approve the March 12, 2008 meeting minutes as written.
The motion was seconded by Lynn Panter and passed with an unanimous vote.

  1. New Chairman Election – The Power Board expressed their appreciation for the two
     terms that Mr. Lee served as Power Board Chairman. The floor was opened for
     nominations. Travis Ball was nominated by Clyde Gabbitas, seconded by Martin
     Conover. Mr. Ball did not decline. Glade Creer was nominated by Travis Ball, seconded
     by Clyde Gabbitas. Mr. Creer declined due to health reasons. Leon Lee was nominated
     by David Neilsen, seconded by Clyde Gabbitas. Mr. Lee declined due to his two
     previous terms. Travis Ball nominated Clyde Gabbitas, seconded by Glade Creer. Mr.
     Gabbitas did not decline. The motion was made by Rodney Burt to cease nominations.
     The motion was seconded by Leon Lee. The silent vote was counted by Councilman
     Jolley and Matt Hancock. Based on the count, a tie was declared. Councilman Jolley
     inquired if one candidate would accept the position with the other serving as Vice-Chair.
     Mr. Gabbitas agreed to accept the Vice-Chair position and Mr. Ball agreed to accept the
     Chairman position.
  2. Financial Report – Mr. Fredrickson reported that the operating revenues are holding
     strong with 70% of the budget amount being collected. The fiscal year is 66% elapsed.
     The kWh sold to residential, small commercial, and large commercial is showing an
     increase. Staff is anticipating the numbers to slow down for the 2008-2009 fiscal year.
     The non-operating revenues are down. These revenues include the new construction
     impact fees, meter fees, and development fees. The 2007-2008 budget was adjusted in
     February 2008 in order to better reflect the loss of revenue.
     Generation cost of power is at 65.3% expended for the fiscal year. The All-In-Pool price
     has been lower than market price, stabilizing Springville’s costs. The debt service line
     item will change on the April report due to a debt service payment in March. The debt
     service is scheduled for final payment in March 2009.

                                                                 Springville City Power Board
                                                                                  April 9, 2008

3. Cost Of Power - February 2008 – The cost for San Juan was higher in February as the
   plant worked on coming up to full capacity. The tolling arrangement with Rocky
   Mountain Power for the Nebo Power Station has expired. NPS is currently being used for
   participant load and some market sales. NPS staff has reported good margins on the
   market sales, but the sales are not covering all of the costs. Springville has scheduled 12
   MW to load for March due to the lack of coal power. IPP is currently down for a
   maintenance cycle.
   Lawyers are working to extend the air permit with the Department of Air Quality
   attached to IPP3 in order to keep the options open. The permit expires April 16, 2008.
4. Resource Update – Mr. Fredrickson provided a hand out for the Power Board members
   present detailing the list of available or upcoming projects that Springville is considering.
   The PPA is still with the Two Elks staff. A Two Elks representative will be in town on
   April 15, 2008 to meet with staff from Lehi, Payson, and Springville. The entities
   involved will be asking for pricing on purchasing a large block of power instead of small
   blocks separately. Mr. Hancock’s transmission and emission credit concerns with the
   PPA have not changed. Emission credits are usually included in the price of the power;
   Two Elks is requesting that Springville purchase the emission credits.
   Pacificorp and Wyoming Infrastructure have committed to build the transmission line,
   but construction has not been started. The current PPA is for an energy only contract, but
   the City Council may want to consider an equity ownership in order to provide a stable
   future base. The cost of equity ownership is initially higher than en energy only contact.
5. Proposed FY 08-09 Electric Enterprise Fund Budget – A copy of the first draft of the
   fiscal year 2008 – 2009 budget was provided for each member to review. The sales
   income in the budget is based on a five (5) year average and expected growth. Capital
   projects include the Hobble Creek Substation, the 46 KV line extension, continuation of
   the power factor correction project, and the new Knight Substation transformer. The
   labor for these items has been captured as part of the project. The UDOT project on
   400 S. will start sometime this Spring. Staff is considering moving the line underground.
   UDOT will reimburse costs to relocate the existing overhead line; any additional costs to
   go underground will be Springville’s responsibility.
   There is a separate line item created for each major individual projects in order to better
   capture the cost of power. The amount listed for gas purchase was lowered due to the
   expectation to only run the WHPP engines in third quarter only. Staff has contracts in
   place for 10 MW of DG&T and 4 MW of IPP1 and IPP2 during the summer months.
   Department staff is being proactive at the plant in order to reduce the plant consumption.
6. EMD Surplus Declarations - Replacement Discussion – The Springville City Council has
   declared the three (3) EMD engines as surplus in anticipation of a sale. A power
   consultant from Boston is interested in purchasing the units for a biofuel plant. A letter
   of interest has been received; a formal bid is expected. The consultant is asking for a
   First Right of Refusal letter from Springville City. The request has been transferred to
   the legal department. The Power Board has concerns on whether or not the units may be
   sold while still under bond. Mr. Hancock will research the point. The labor and costs to
   remove the engines would be minimal with equipment and employees already located at
   the plant. A major concern for staff is the current air permits. Utah State does not have
   an issue with decommissioning the units as long as staff is moving towards the best
   available technology. If the units are not replaced the current air permit may be
   decreased. If the units are replaced staff would schedule less outside purchases in favor

                                                                   Springville City Power Board
                                                                                    April 9, 2008

   6. EMD Surplus Declarations - Replacement Discussion Cont.
      of the more efficient new units. The units being considered are more efficient, with an
      8600 heat rate. The current plant would need to be expanded due to the size of the units.
      Another option would be to place a unit offsite with a heat reclaim project, possibly at
      City Hall or the Public Works area.

  1. Summary Comments: City Council Meeting with Doug Hunter – A copy of the power
     point presentation by UAMPS staff member Doug Hunter was provided for each
     member. The presentation included graphs and pie charts based on Springville’s electric
     loads and resources. One of the graphs indicated usage spikes during the summer of
     2000, 2002, and 2003. The spikes were attributed to customers changing from swamp
     coolers to air conditioning in addition to new residential construction. Mr. Hunter also
     reported that he felt confident that the IPP3 project is not a dead issue. He also made a
     strong point that the City Council should be considering equity ownership in projects
     with a viable track record.
  2. Generation – Generation staff are realigning unit K2 in preparation for a contractor to
     stitch the hairline fracture. The involved procedure is scheduled for the end of April or
     first of May. Staff is also working on renewing the Title V permit. The emissions limits
     listed were incorrect. Staff has been in contact with an engineer in order to correct the
     language. Mr. Hancock stated that he is looking at a financial hedge for a forward natural
     gas purchase in 2010. The basis is shrinking with REX online.
  3. Distribution – The Knight Substation has been ordered and is scheduled for delivery in
     July 2008. A temporary transformer has been moved into the substation and installed for
     the summer months. A new protective relay and RTU was added while the substation
     was down. Steel poles have been received for continuation of the 46 kV expansion
     project. The line will be completed to 400 S. and then from Center Street to 500 N.

  1. Net Metering Policy – A copy of Springville City’s proposed Net-Metering Policy was
     provided for each member to review. A couple of different options were investigated by
     staff in order to create the policy. The draft policy would exchange electricity on a 1:1
     basis with no allowances for an installation credit. There are currently two (2) citizens
     with a personal electrical system installed.
  2. Mr. Burt thanked Mr. Lee for his service to the Power Board.

The motion to adjourn the meeting was made by Glade Creer. Rodney Burt seconded the motion
which passed with a unanimous vote. The meeting as adjourned at 8:09 a.m.


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