Board Members present: Patrick Lanning, Ron Farmer, Sandra Bishop, and Dorothy Anderson.

Others present: Randy Berggren, Deborrah Brewer, Jim Maloney, Debra Smith, Roseanna McArthur, Terry Bequette, Mel Damewood, Scott Spettel, Mat Northway, Ken Beeson, Dick Helgeson, Jim Wiley, Marty Douglass, Brenda Sirois, Dick Varner, and Krista Hince of the EWEB staff, and Ruth Atcherson, City of Eugene Minutes Recorder..

President Lanning called the Work Session of the Eugene Water & Electric Board (EWEB) to order at 5:35 p.m.

COMMUNITY OUTREACH PROGRAM FOR UPDATE OF EWEB'S INTEGRATED ENERGY RESOURCE PLAN (IERP)

Brenda Sirois, Resource Planning Analyst, provided an overview of the community outreach planned for the Integrated Energy Resource Plan (IERP) as outlined on the attachment entitled Staff Recommendations for Community Outreach EWEB IERP July 1, 2003. She explained that Jim Maloney, Ken Beeson, Deborrah Brewer and herself had met, brainstormed and had determined three points in the process at which they would be pursuing community feedback. She noted that staff had recommended that there be four different community outreach approaches, a informed working group to meet in an ongoing way, focus groups, public meetings and open houses, and solicitations for feedback from EWEB Web site communications. She related that it was hoped that a diverse array of input would come from the process. She added that staff hoped that two members of the Board of Commissioners would participate in the working group.

Commissioner Anderson endorsed the idea of Commissioner membership in the working group.

Commissioner Bishop voiced her preference for having the same Commissioners attend the group, rather than Commissioners attending irregularly as ad hoc members.

Ms. Sirois concurred, adding that staff ideally preferred Commissioners to be members of the group, rather than designating attendees by availability in a given month. She said that staff had wished to be considerate of the Commissioners' busy schedules, though, so didn't want to presume that two Commissioners could make such a commitment.

In response to a question from Vice President Farmer, Ms. Sirois stated that the larger purpose of the IERP update was to update the long-term resource plan, it was necessary to check in with community interests and customers on their thoughts on how EWEB should move forward. She said that staff also sought to create an informed group of customers, who would disseminate information further in the community.

Ms. Sirois clarified, at Vice President Farmer's request, that staff would provide the community working group with proposals as a framework and the group would review the proposals and provide feedback. She said that staff would utilize advertising and solicitation to seek communities of interest and create a larger stakeholder list.

Vice President Farmer asked why this method of getting feedback was being used. General Manager Randy Berggren responded that it had been a historical priority on the part of the Board to seek such input. He explained that the difference between this process and the last process was that, for this particular work group, the process would be more staff-directed.

Vice President Farmer expressed concern that frank interaction between members of the public and staff would be impeded by the presence of Board members.

Deborrah Brewer, Intergovernmental Affairs Coordinator, remarked that, in her experience, the presence of Board members did not impede the process.

Commissioner Anderson felt that the last time a work group had been formed, the process had been very valuable to the Board and the utility. She felt that the previous work group had laid the ground work for the process as well.

Vice President Farmer shared his reservations regarding the plan. He thought that there was potential that the plan would be developed and the responsibility for defending it would be thrust upon the Board. Commissioner Anderson replied that there would be places along the way to acknowledge whether the plan in process was aligned with the sentiments of the utility's stakeholders. Ms. Sirois added that everyone was equal in the process and that the result hoped for was to formulate the best resource strategy.

Commissioner Bishop recommended having more than seven customer representatives serve on the committee. Ms. Sirois responded that staff was currently planning on soliciting nine customer representatives for a full working group membership of 13.

In response to the portion of the presentation on the communities of interest, Commissioner Bishop suggested that there be representatives from local governments and businesses. Vice President Farmer stressed that he was most interested in feedback from ratepayers. Commissioner Bishop commented that a member of the Citizen's Utility Board (CUB) would provide beneficial insights to the process.

President Lanning approved of the work group selection provided that it was representative of the ratepayers, given that the vast majority of the customers were residential.

Regarding group size, Mr. Berggren strongly encouraged staff to form a group of 15 or less members. The Commissioners were in general agreement with this.

In response to a question from Commissioner Bishop, Ms. Sirois stated that a objective non-biased facilitator was considered necessary to the process and would be hired.

Commissioner Bishop stressed the importance of seeking a diverse group of people.

Ms. Brewer noted that the meetings were scheduled to begin in September or October and directed the Commissioners to look over the schedule provided in the packet.

Commissioners discussed the merits of Commissioners present at the committee and whether it should be the same two Commissioners at all of the meetings. President Lanning and Commissioner Bishop volunteered to serve on the committee, with Vice President Farmer and Commissioner Anderson serving as alternates.

Ms. Brewer reiterated that there would be time for public comment at every meeting. She added that, as information and input was gathered it would be provided via the Web and then people could respond, should they so choose, by posting a message at the site. In response to a question from Commissioner Bishop, it was noted that the message board was intended for members of the public and it had not been planned that Commissioners would respond to the input.

Ms. Brewer went over the budget. In response to a question from Commissioner Bishop, Ms. Brewer stated that an active, on-line chat room would be somewhat expensive to maintain.

In response to comments from Commissioner Bishop, Marty Douglass, Public Affairs Manager, explained that all of the Web site work was outsourced and EWEB had no Web manager in-house. Commissioner Bishop felt that hiring one to work in-house would be a prudent move.

Ms. Sirois provided a short presentation of the first electric resource backqrounder that will be used to educate the working group members.

Commissioner Bishop suggested that the financial information be put into a pie chart for improved readability. She felt that it would greatly aid the discussion for the group to have an understanding of how much of the budget was spent on power.

President Lanning thanked staff for the presentation. Noting that there was time remaining in the Work Session, he suggested to the Commissioners that they take a presentation item from the Special Board Meeting scheduled for 7:30 p.m. and cover it, in order to stay with the schedule, should members of the public be arriving for the meeting. Staff and commissioners were amenable to the change.

Vice President Farmer remarked that he had heard again and again at the conference he had attended the previous week that it was up to the Board of Commissioners to determine what was needed to be done and the job of staff was to figure out how to implement it. He said that the discussion that had just been held had represented the opposite of this. He strongly recommended that this be a point of discussion at the next Board Governance meeting.

MCKENZIE RIVER ISSUES UPDATE

Mr. Douglass reported the following:

• The construction work in the Leaburg Canal had been waiting for the in-water work permits. They were now in and construction will ensue immediately.
• The work on the chevrons, located at the confluence of the Walterville Canal and the river, was now completed. The president of the McKenzie River Guides had sent an e-mail congratulating EWEB on the completion of the work.
• The modifications that had been made to the Walterville Tail Race Velocity Barrier were completed and appear to be working in that fish were not getting into the tail race. EWEB is prepared to "deal with the flooding issue" that had resulted in the Walterville tail race.
• The citizen working group on the recreation plan has met four or five times and was on course toward providing recommendations to the utility.
• The citizen working group on the vegetation had also met and would be providing its recommendations at the same time, circa August.
• Jay L'Estrange, Generation Manager, had contacted citizens interested in the fence screen.
• The main issue to be addressed currently was the removal of slash piled in five locations.

Regarding the last point, Jim Wiley, Director of Electric Operations, explained that it was fairly obvious that EWEB's community commitment to remove the slash piles by June 30 would not be met. He noted that the community, as well as FERC, was not pleased by this development. He stated that the utility was in the process of removing the slash, beginning July 2, and the targeted completion date was now July 30.

Mr. Wiley related that the utility had held good intentions of meeting its obligation. He said that three contractors had been solicited to provide bids on the work and that they had provided radically different bids ranging from $13,700 to $149,625. He stated that the original plan had been to stockpile the slash on the Pond Row, by Walterville Pond, but that the recreation group had objected to this.

Continuing, Mr. Wiley reported that the utility had chosen to stockpile the slash into the five piles and then solicit quotes again, once the exact volume of the piles was known. He stated that, at that time, only one bid came in and, at $286,235, it exceeded the public bidding threshold. This required the utility to compile a contract package, approximately 150 pages, for a formal solicitation of public bidding. He said that two bids had been submitted, one for $70,000 and one for $90,000. He added that the contract had been awarded to Mesa Construction and they would begin moving their equipment onto the site the following day. He felt optimistic that the work would be completed by July 30, as Mesa Construction was scheduled to complete the Trowbridge work, currently three weeks late in environmental paperwork but tentatively scheduled to proceed by the end of July.

Mr. Wiley stressed that the goal was to improve the esthetics, so that the damage was no longer visible by the summer of 2004, and that this would entail stump removal, underbrush containment, and planting of vegetation this fall. He noted that new goat contracts had been awarded for the purpose of vegetation control.

Mr. Wiley stated that, as FERC had to review and approve the specifications, the utility had to work cooperatively with the agency. He reported that FERC had just received the draft and that a meeting had been scheduled for July 9 to finalize it. He predicted that it would go out to bid on July 16 and would likely cost at least $100,000. He said that it was still felt that the utility would meet its goal of re-vegetating the area prior to the fall, but acknowledged that FERC and the McKenzie area residents were not happy with this timeline.

Mr. Douglass related that some feedback had been received from the community. He affirmed that staff would be meeting with the McKenzie area neighbors and would explain in-depth what the delays in the process had been. He circulated copies of an advertisement that the utility had submitted to the McKenzie River Reflections that apologized and, though accepting full responsibility for the delay, expressed EWEB's frustration with the lack of progress, too.

Mr. Douglass noted that raising Leaburg Lake continued to be an issue and that there was continuing suspicion that EWEB was going forward with work that the residents were opposed to without communicating this to them. He thought that an onsite informational meeting with residents was warranted and stated that one would be scheduled for the coming week.

Commissioner Anderson commented that the Leaburg Lake residents had been putting pressure on the McKenzie Watershed Council and that some council members would be meeting with residents on July 16. She asked if EWEB staff would be meeting with them prior to that. Mr. Douglass said that it was staff's intention to do so and that the utility was engaging the residents as much as possible.

Commissioner Bishop requested that Mr. Wiley provide a written account as a reference for Commissioner, in order for them to be able to respond to customers in an educated manner. She expressed her displeasure at the utility's inability to meet its commitment to the McKenzie River community.

Vice President Farmer asked if it was assured that there was no danger of missing the deadline to remove the stumps. Mr. Wiley replied that staff was unsure of what technical specification FERC would require. Vice President Farmer urged staff to formulate a contingency plan, should the work not be completed prior to the beginning of the rainy season. Mr. Wiley assured him that such a plan had been prepared, adding that he was 90 percent sure that the work would be done by September 30. He added that FERC had given EWEB until December of 2005 to complete the required work and, though the utility had not met its commitment with residents, it was well within the limit FERC had specified.

Vice President Farmer, noting that there was potential that the canal would need to be drained again, asked for the current status of that situation. Mr. Wiley replied that, based on working with the independent engineer, staff was recommending that it be drawn down approximately eight to ten feet, but not drained altogether. Vice President Farmer encouraged staff to consider, as there was some potential that the canal would be drained, how best to communicate this to the residents in the area. Mr. Wiley noted that FERC would have to approve any reduction in water level.

Mr. Varner discussed a memorandum he had provided to the Commissioner in which he had enumerated the various items related to the McKenzie Valley, i.e. how many customers lived there, how many dollars came from them, what the usage/average bills were and how they compared with resident in the metro-area, etc. He noted that EWEB provided $100,000 in school grants in the area and that the rates that EWEB charged compared favorably with Lane County Electric Co-operative. He stressed that rural customers were not treated differently than urban customers, though the cost for transmission to the rural area was higher.

Commissioner Bishop commented that the memorandum was difficult to understand. She suggested that Mr. Douglass summarize the information for dissemination to the public.

Regarding Contributions-In-Lieu-of-Tax (CILT), Vice President Farmer strongly urged staff to impress upon the residents of the McKenzie Valley that this was not money that EWEB kept, that EWEB was a conduit for this money, and that should the residents truly want to see this changed, they should lobby the City government to do so.

President Lanning opined that the letter sent to the McKenzie River Reflections would have conveyed more sincerity had it been signed by Mr. Berggren or by the Board.

Mr. Berggren responded that he was willing to sign such a letter as staff was sincerely sorry to have created this negative impact on the area. He added, however, that it should be acknowledged that the generation staff had been up against a "herculean task" with the $45 million relicensing project and no extra staff to accomplish it.

Commissioner Bishop recommended that some of the informational backgrounders be posted on the EWEB web site and, perhaps, on the site that the McKenzie Valley residents have created to facilitate discussion and exchange of information related to EWEB projects up the McKenzie River. Mr. Douglass concurred that some of the memoranda would be useful to the residents.

President Lanning closed the Work Session at 7:40 p.m.

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Assistant Secretary President