Board members present: Patrick Lanning, Dorothy Anderson, and Henry Masterson. Vice President Ron Farmer and Commissioner Sandra Bishop was excused.

Others present: Randy Berggren, Ken Beeson, Scott Spettel, Brenda Sirois, Mark Freeman, Terry Bequette, Roseanna McArthur, Jim Wiley, John Yanov, Jim Origliosso, Kathy Grey, and Krista Hince of the EWEB staff; Joe Sams, City of Eugene Minutes Recorder; and members of the public.

President Lanning convened the meeting at 5:35 p.m.

GENERAL MANAGER'S GOALS FOR 2003

General Manager Randy Berggren outlined his goal document included in the meeting packet. He highlighted operating performance metrics and noted that they were on target.

He said there were four metrics "off trend:"

1. Electric System Reliability

Mr. Berggren said staff were in the process of examining the records but noted that there had not been any substation interruptions where customers power had to be restored quickly. He noted that a result of this was that the data was affected. He said staff were looking for an alternative set of indicators that would produce more useful data.

2. Water System Reliability

Mr. Berggren noted that water outages were also off target because of some power outages in the south hills that shut down electric pumps to higher elevations. He said this counted as a water outage. He said staff would be closely monitoring this item for the rest of the year.

3. Call Availability

Mr. Berggren noted that call availability depended heavily on customer service being fully staffed. He noted that the Board had approved an addition of five new call taking positions but said that three of those hired were still in training and not yet fully productive. He said he expected the call availability target to be reached by the end of the second quarter.

4. Safety Lost Days

Mr. Berggren said he was planning on changing the metrics process for this item. He commented that OSHA reportables were a guessing game and said his intent was to take data directly from employee time cards which would provide a more complete view of time lost due to injuries.

In response to a question from President Lanning regarding whether historic data was available, Mr. Berggren said that data was available and being used by staff.

In response to a question from Commissioner Anderson regarding whether there was enough flexibility in the goal statement, Mr. Berggren said there was enough as long as the Board gave him permission to adjust goals and targets as things became more uncertain. He said he was comfortable with the current process but noted that the situation could change in that predicting goals 12 months into the future would not be possible.

President Lanning thanked Mr. Berggren for his work on the goal document. He said it was well organized and easy to understand.

INTEGRATED ELECTRIC RESOURCE PLAN - Project Work Plan

Brenda Sirois, Resource Planning Analyst, and Scott Spettel, Power Management and Planning Manager, provided a power point presentation on the Integrated Electric Resource Plan. She outlined the tasks and objectives being undertaken in the next year. She said the objective of the meeting were to hear from Commissioners whether the proposed plan addressed the Board's concerns in regards to long-term resource planning and to get comments on the preliminary community outreach plan (slide 1 and slide 2).

Work Session Objectives

• Does the Project Plan Capture Board Concerns?
• Does the Proposed Staff Customer Outreach Plan Meet the Board's Public Outreach Objective?

Objectives of IERP Update

• Evaluate Alternative Resource Portfolios
• Determine Mix of BPA Power in Portfolio
• Integrate Risk Management Practices
• Quantify Risk Exposure of Current and Other Resource Portfolios
• Gain Insight Uncertainty may have on Resource Portfolios

Commissioner Anderson said she was satisfied with the goals and objectives as outlined by Ms. Sirois.

Ms. Sirois presented the major tasks of the IERP update inviting commissioners to comment on the project tasks (slide 3).

Major Tasks of IERP Update

• Re-Affirm Existing Policy Objectives & Decision Criteria
• Define Planning Boundaries & Assumptions
• Perform Analysis
• Define Indicators for Risk Management
• Select Best Resource Portfolio
• Develop Work plan

In response to a question from President Lanning regarding the utility's long term power resource acquisition and how that would be evaluated during the IERP update, Ms. Sirois said the bulk of the resource portfolio development would happen during completion of the project task called perform analysis. She said staff would look at different resource portfolios and compare them to the current portfolio (slide 3).

Ms. Sirois asked Commissioners if there was any supply or demand side option that they would not consider during this IERP update.

Commissioner Masterson said that nothing should be absolutely ruled out.

Commissioner Bishop stressed that the Board had certain policies in place that may prohibit specific resource alternatives and that all supply and demand side options must meet the policy supporting resource development.

President Lanning said he could not picture a time when he would support coal or nuclear power options and opined that the community would not support them either.

In response to a question from Ms. Sirois regarding what criteria the Board members would use when making decisions on resource planning, President Lanning said he would look at environmental and sustainability issues and what was best for the community.

Commissioner Anderson stressed the importance of net social costs and net social benefits as decision when evaluating different resource portfolios.

Ms. Sirois presented a project schedule for completion of the IERP update (slide 4).

Ms. Brewer, Intergovernmental Affairs Coordinator, outlined the preliminary plan for the Community Outreach portion of the IERP Update (slide 5).

Options to Gain Community Feedback

• Working Group
• Focus Groups
• Public Meetings/Open Houses
• Internet Communication

In response to a question regarding the criteria used to choose citizen representatives for the work group, Ms. Brewer noted that a representative from low income rate payers would be a possibility as would an expert in renewable resources and a major electric user.

Ms. Brewer said she would create a list and come back to the Board for their review and comments

In response to a question from President Lanning regarding how members were chosen for the water resource plan work group, Ms. Sirois said the members were randomly selected from different Commissioner's wards.

ELECTRIC CAPITAL FUNDING - (Item 8 on the Regular Meeting Agenda)

Ken Beeson, Energy Resource Projects Manager, provided a power point presentation on electric capital planning and funding. He said the focus of the discussion would be on how to develop a policy around planning and funding.

Mr. Beeson provided a brief review of the topics that had been covered to date. The review included capital improvement funding work to date, the context for electric capital improvement funding, policy development, project identification, project prioritization, work plan policy and funding.

Mr. Beeson stressed the need for a process of critical review of project priorities.

Mr. Beeson said he could come back before the Board with more detailed policy language at the end of the year.

In response to a question from President Lanning regarding whether there was anything in the proposed policy outline that was different from current practice, Mr. Beeson said there was nothing really different but noted that the process was now being formalized and documented so there would be clear policy direction.

In response to a question from President Lanning regarding whether five years was enough of a projection, Mr. Berggren said five years was long enough to identify trends and adjust policy. He said a longer view was possible but noted that a five-year view identified what things needed to be addressed in the short-term.

In response to a question from Commissioner Masterson regarding the definition of "new customer charge," Mr. Beeson said what that charge was meant to be was also called a systems development charge or customer development charge. He said there was still work to be done to see how it would be exactly defined but noted that, currently, for new customer service in a new development, the developer paid 100 percent of the cost for the facilities required for servicing that development.

Mr. Beeson said staff would be bringing more formal policy plans before the Board in October. He said a detailed work plan was needed for new customer charges. He said substantive preliminary analysis would be necessary and estimated that it would take until November.

In response to a question from President Lanning regarding whether new customer charges was a common practice regionally, Mr. Beeson said he did not believe it was not a common practice in the region. He said staff wanted to study the feasibility of the idea and get back to the Board with more detailed information. He said the charge would not supplant the need for an additional rate allocation.

Commissioner Masterson commented that the charge was similar to road and sewer Systems Development Charges, (SDC's), that were common in the area.

Mr. Beeson said he would present more detailed information in November when the Board could decide whether it wanted to pursue the idea.

In response to a question from Commissioner Anderson regarding whether such a charge would be compliant with State Law, Mr. Beeson said preliminary checks had indicated that state law did not specifically call out electric distribution and electric utilities. He said legal counsel was not clear yet on the issue. He said there was also an option that if the Board came up with a new customer charge, (SDC), the Board could take it to court and have it validated.

The work session adjourned at 7:30 p.m.

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Assistant Secretary President