Board Members present: Sandra Bishop, Dorothy Anderson, Peter Bartel, Susie Smith, and Patrick Lanning.

Others Present: Randy Berggren, JoAnn Andersen, Tom Buckhouse, Garry Kunkel, Roseanna McArthur, Jim Maloney, Scott Spettel, Jim Origliosso, Dick Varner, and Krista Hince of the EWEB staff; and Kim Kunkel, Minutes Recorder.

President Bishop called the Special Board Meeting of the Eugene Water & Electric Board (EWEB) to order.

INTEGRATED ELECTRIC RESOURCE PLAN: ASPECTS OF "ENVIRONMENTALLY SUPERIOR RESOURCES"

Referring to a series of overhead displays, EWEB Resource Planning Analyst Jim Maloney prefaced the presentation with an overview of his personal account of how the Board arrived at its present discussion of centralized generation and, specifically, "environmentally superior resources." His recollection of significant events included the following:

1. 1992 Resource Plan
2. "FRE" White Paper
3. 1995/96 CIC Findings
4. Decision to "Co-Create" the IERP
5. Klammath Falls Consideration
6. BPA Subscription Process (versus long-term viability?)

Mr. Maloney said the aforementioned events illustrate the Board's historical struggle with the issue of centralized generation. He said the purpose of this Work Session was to identify the Board's current values regarding centralized generation and resource options. Mr. Berggren added that it was important to consider the question of whether Bonneville Power Administration (BPA) will continue to be a viable entity in the future. He said it was his opinion that adopting a centralized generation strategy was a "safety net" in the event of the loss of BPA.

Commissioner Smith expressed her opinion that the Board must

1. define its level of commitment to investing in sustainable resources; and
2. determine where EWEB stands, relative to other utilities in the market, in terms of affordability.

Commissioner Smith inquired as to whether "green" products were available on the market for purchase by EWEB. Mr. Maloney responded that several states are making efforts to develop standards for renewable resource investment.

Commissioner Bartel said it was important to consider the trade-offs and determine the "best" investment in terms of resource type. He said the Board must define "sustainability" and determine its level of commitment to it. Commissioner Bartel noted that although an investment in sustainable resources might cost more up-front, it would likely be a more prudent investment in the long-term.

Commissioner Smith recalled the Board's past discussion of a "hybrid" resource portfolio. She said the board might identify parameters for investment in gas, for example, as a means by which to guide the utility's investments in non-sustainable resources. She acknowledged that staff was currently in a frustrating position in terms of pursuing resource investment opportunities.

Mr. Berggren expressed his opinion that existing resources were not necessarily a constraint on EWEB's resource strategy. Mr. Spettel agreed that resource options were expandable to meet the values of the Board.

Commissioner Anderson inquired as to why EWEB could not adopt a strategy similar to Seattle's in which the utility agreed its resource investments would not result in the production of additional greenhouse gasses. Commissioner Smith reiterated that the Board must define "sustainable."

Commissioner Anderson suggested that the Board consider its definitions of "environmentally superior" and "sustainability" separately.

(The Board took a short break.)

The Board agreed to the following goals with related to resource investments (items are not listed in order of importance):

1) increase the portion of our power portfolio made up of sustainable resources;

2a) systematically reduce the environmental impacts associated with the remainder of our power supply; and

2b) hybrid ("insight")concept -- use the power purchase/generation development to increase acquisition of sustainable resources.

Mr. Berggren noted that one form of the hybrid strategy might be to reinvest portions of non-sustainable resource project revenue in sustainable resources.

The Board discussed the aforementioned goals and their applicability to hypothetical projects.

Commissioner Smith said she was not clear as to the Board's definition of "sustainability." She suggested that the Board establish sustainability criteria by which the utility will pursue resource investments. She said she was not interested in defining "environmentally superior."

The Board and staff discussed the value of defining "sustainability." The Board stressed that the sustainability criteria would serve as a "portfolio report card" by which potential resource investments could be evaluated.

Vice President Bishop said she felt a sense of urgency regarding a number of potential EWEB projects and was not supportive of engaging in an ongoing discussion regarding the definition of "sustainability."

Commissioner Smith said she was interested in obtaining various definitions of "sustainability" proposed in the literature of the industry. Mr. Maloney said staff would compile baseline information to serve as the basis of the Board's next discussion of resource acquisition and sustainability. The Board agreed that the focus of its next discussion regarding this matter would be proposed sustainability criteria.

The meeting adjourned at 9:15 p.m.

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Assistant Secretary President