WASHINGTON ELECTRIC COOPERATIVE, INC.

 

68TH ANNUAL MEMBERSHIP MEETING

 

May 22, 2007

 

The 68th Annual Membership Meeting was held at the Barre Elks Lodge on Tuesday, May 22, 2007, with 196 members, guests, and employees in attendance.  General Manager Avram Patt announced the ballot boxes were open from 5:00 until 7:00 p.m. for any member(s) desiring to vote in person.  Following dinner, the business meeting was called to order at 6:40 p.m. by President Barry Bernstein, who welcomed everyone to the meeting.

 

INTRODUCTION OF BOARD MEMBERS, DIRECTOR CANDIDATES, CONSULTANTS, GUESTS, AND STAFF

 

President Bernstein introduced the members of the Board of Directors in attendance:

 

Kimberly Cheney                      Roy Folsom                              Marion Milne

Wendell Cilley                          Roger Fox                                Richard Rubin

Donald Douglas                        Timothy Guiles                         

 

President Bernstein introduced, in addition to himself, director candidates Kimberly Cheney of Middlesex and Roy Folsom of Cabot; and numerous guests including WEC’s engineering consultants; Will Lindner, Co-op Currents’ editor; as well as Vermont senators and representatives, former WEC directors; and WEC staff who were in attendance.  President Bernstein commented that he had the opportunity to assist in the office during an outage and what he observed during that time would make all members proud of the people that work at the Co-op.

 

CERTIFICATION OF QUORUM AND NOTICE OF MEETING

 

Ballot Committee Co-chair Joseph Kelly of Williamstown certified that a quorum of members voted in the election process with 1,005 votes received by mail plus approximately 10 votes cast in person at the meeting for a total of 1,015 votes cast.

 

As secretary of the Cooperative, Director Marion Milne certified that the notice of the meeting was mailed to all members of record on the 1st day of May 2007, in accordance with the requirements of the Bylaws.

 

APPROVAL OF MINUTES—2006 ANNUAL MEMBERSHIP MEETING

 

President Bernstein called for a motion to waive the reading of the minutes of the May 23, 2006, Annual Membership Meeting, and approve the minutes as presented. 

 

A motion was made by Michael Duane to waive the reading of the minutes of the 2006 Annual Membership Meeting and to approve them as presented.  The motion was duly seconded by Jackie Folsom and approved unanimously by voice vote.

 

EMPLOYEE RECOGNITION

 

Manager Patt expressed appreciation for the work all employees of the Cooperative perform.  He explained that every year the Cooperative honors employees who have been with WEC by recognizing employment anniversaries in five-year increments.  He recognized Cashier/Member Services Representative Shawna Foran and  Member Service Representative  Elaine Gonier, for 5 years; Utility Field Technician Michael Patterson for 15 years of service with the Co-op; Sr. Utility Field Technician Brent Lilley for 20 years; and Member Services Supervisor Tammy Clark, a 15-year employee who was unable to attend the meeting.  Manager Patt presented each with a clock/calculator/calendar.

 

TREASURER’S REPORT

 

Treasurer Donald Douglas began his presentation with a reminder about automatic bill payments (ACH) and budget billing.  He encouraged members to take advantage of both but especially encouraged members to sign up for ACH as it would save postage which he noted has now gone up to $0.41. Treasurer Douglas informed the attendees that 10% of our membership is currently paying by ACH.

 

He pointed out that WEC met its financial obligations and that everything was going fine in 2006 until the fire in Coventry. He explained that we still had to make payments on the loan for the Coventry generation facility even though we weren’t generating power and that money was lost on the sale of  RECs as they are based on the amount of power generated. Treasurer Douglas thanked our sister co-op, Vermont Electric Cooperative, for helping us out during this lost production time by selling us replacement power.  He said the good news was that WEC did make the lenders’ TIER requirement in 2006.

 

Treasurer Douglas informed the membership that WEC has done a cost of service study which entails an examination of the different customer classifications.  He pointed out that a rate design is being looked at now and that while it is not a rate increase, some people’s rates will go up slightly and some will go down.   Treasurer Douglas commented that our audit was successful and he thanked Finance Director Linda Nelson for her work in the Finance Department.

 

Treasurer Douglas was asked by a member if there was insurance for the damage caused by the fire at the Coventry generation facility.  He responded that there was and that had we not received some insurance money, we would not have made TIER.  Member Jackie Folsom inquired what determines whose rates are going up and whose are going down.  Treasurer Douglas explained that WEC has a commitment to hold a block of power to help keep bills down but that the larger the block of people you protect at the bottom, the more the members at the top are affected.  Member Folsom voiced concern there will be a problem for farmers that have gone through Efficiency Vermont and have done everything that they can to be efficient.  President Bernstein stated that the rate design is still being processed and probably won’t be complete until the end of this year.  He reminded the membership that the rate design still needs to go through Public Service Board approval.

                                                              

PRESIDENT’S REPORT

 

President Bernstein remarked that everyone was proud that Coventry was only down three months after the fire.  He noted that Co-op staff Dan Weston and Denise Jacques were instrumental in getting the facility back on line November 9th.  President Bernstein announced that the fourth engine went on line January 10 which was about a year ahead of schedule and this will put WEC in a good position in 2007.  Even though we will have a new rate design applied to our bills, he anticipates that WEC may avoid an overall rate increase for another two years.  President Bernstein commented that power costs were slowly slipping down and that only 39% of WEC’s costs are currently attributed to the cost of power.  He said this is a big change for WEC and that it is a welcomed change.

 

President Bernstein sincerely thanked General Manager Avram Patt and management staff.  He noted that it makes him very proud of employees being here for 5, 10, and 15+ years.  He thanked all employees on behalf of the board.

 

Former Board Director Carla Payne asked why do a new rate design if it is revenue neutral and it doesn’t bring any more money into the Co-op. President Bernstein responded that it was a PSB requirement.  Manager Patt commented that the purpose of the rate design is not to raise more or decrease revenue but to allocate the revenue among customers and as a result, some bills may go up while others may go down.  Member Payne then questioned the reason for the change.  President Bernstein answered that the power mix has changed and that the Board’s philosophy has changed as well; the Cost of Service is a combination of these.  When Member Payne inquired what the board’s philosophy was, President Bernstein explained the board wants a second block composed of Coventry power and some other sources.  WEC is still discussing this with our power planner and the PSB.  He added that the board has not reached a conclusion on what the philosophy should be.  Member Richard Payne asked how the farmers will fare.  President Bernstein said some farmers are classified as residential consumers and others as commercial.  He pointed out that all 10,000+ members will be looked at.  Director Guiles commented that he was surprised that the rate design was brought up this evening as it is still in the discussion stage.  Member Services Representative and WEC Member Shawna Foran commented that working in the Member Services Department, she gets a lot of older people asking if we have a special rate for senior citizens.  President Bernstein responded that Lifeline has been discussed in the past.  He informed the membership that the board is looking at an increased outreach with member households to conserve. He said our goals are to help make members more efficient in their energy use. 

 

Member Steven Farnham questioned whether the meeting about the rate design will be open to the public.   President Bernstein said committee meetings have been just the board but there will be public hearings on the rate design when it is finally adopted by the PSB.  Director Richard Rubin stated that all committee meetings and board meetings are open and anyone interested is welcome to attend.  He suggested that anyone interested in attending a meeting call the Co-op to find out when the meetings are.  Member Jackie Folsom said she understood the reason for doing the rate design, however, she hopes that the issue that we belong to a cooperative means we share in the good, the bad, and the ugly.  President Bernstein said it is always clear at the Co-op that people have divergent opinions. 

 

MANAGER’S REPORT

 

Manager Patt spoke briefly about WEC’s Service Quality and Reliability Plan.  He explained that we have to get certain measurements not just for outages but for other areas such as answering calls in a realistic amount of time.  Manager Patt explained that an article about WEC’s SQRP was recently published in the Co-op Currents.  He noted that we are always open to individual concerns of WEC members and asked that members let us know what their concerns are.  Manager Patt said we think our numbers show that we are making a slow but steady improvement and that we have all of our employees to thank for this.

 

Manager Patt gave a brief summary of our power supply.  He showed graphs of the anticipated Vermont Supply Gap, WEC’s energy requirements vs generation from 2005 – 2009, and WEC’s projected energy position from 2006 - 2010.  He noted that in 2000 WEC started looking at ways to replace its Vermont Yankee supply, which ended in 2002.  Manager Patt also commented that we probably won’t be getting wind power from UPC in 2007 as we had hoped.  He said Coventry is currently producing more than we had hoped.  We lowered our growth projection and hope to do more energy efficiency.   Manager Patt feels that this may result in a surplus of power which we will sell. 

 

Manager Patt stated that HydroQuebec will end in 2015 and that we are talking with potential power suppliers that could supply economical power.  He reported that the board adopted a strategy in 2001 to move toward renewable energy.  He reported that Coventry is now producing over one-half of our power needs and anticipates at some point it being over 60%. He said with Coventry production and the potential economical power suppliers we are pursuing, we may be on the long side and have a surplus of power. 

 

ELECTION RESULTS

 

President Bernstein reported that 1,018 votes were cast with 1,005 being mailed in ballots and 13 ballots being cast at the meeting. Director Barry Bernstein received 944 votes; Kimberly Cheney, 922; Roy Folsom, 933; write-ins, 27; and blank, 222.    President Bernstein congratulated incumbents who were reelected.

 

GUEST SPEAKER—MICHAEL DWORKIN

 

During his introduction of Michael Dworkin as the guest speaker, Manager Patt commented that it is nice to have someone of Michael Dworkin’s caliber on our lines.  He noted that Michael was a WEC member who has served as chair of the Vermont Public Service Board, is currently a Professor of Law and Director of the Institute for Energy and the Environment at Vermont Law School, and has just returned from a trip to China.   Manager Patt added that Michael speaks to the legislature, students and other groups and can present without talking down to anyone.

 

Guest speaker Michael Dworkin captured the attention of WEC members, staff, and guests with his PowerPoint presentation “Living in Interesting Times—Drawing on the Co-op’s Values to Meet the Challenges of a World of High Priced Power”.  He addressed what being exposed to the market meant, why we should care about world energy trends, wholesale power costs vs. Efficiency Vermont costs from 2002 through 2005, as well as discussing efficiency and conservation, VT Yankee, HydroQuebec, the spot market, renewables in Vermont, net metered projects, and the need to have a blended balance of power sources.

 

QUESTION/ANSWER SESSION

 

Rate Design.  President Bernstein inquired of Former PSB Chair Dworkin why the PSB would ask for a rate design.  Mr. Dworkin responded that some people use power in ways that are expensive to serve and some use power in cheaper ways and that it is just a question of cost.

 

Old Poles Remain.  Member Michael Duane inquired why there were so many old poles still standing next to new poles that have been set.  President Bernstein said the Co-op  set poles closer to the roadside and moved the wires.  It is common practice for Verizon to be slow at switching over their lines and taking down the old  lines, said President Bernstein.  Manager Patt added that it is a problem state wide.  He said VEC would agree that Verizon is suppose to move lines in a timely manner and it just doesn’t happen.  Manager Patt suggested that if members have a problem with poles, they should contact Director of Engineering and Operations Dan Weston. 

 

Line Maintainence.  Member Lori Barg suggested that owners take care of their own corridors when branches are covered with snow.  She said they ought to know how to cut the trees around their house.  Manager Patt explained that ROW Coordinator Mike Myers works with members to help safely maintain the ROW.  He stressed that WEC doesn’t want members cutting trees under the power lines but noted that there are particular plants that can be planted under the lines.  It was agreed that Will Lindner will publish an article in the Co-op Currents.  Director Tim Guiles voiced concern that members should not cut trees under the power lines.  He stated that we have professional people that cut trees on our lines.  Manager Patt encouraged members to report trees on the line even if they are just trouble trees.

 

Wind Projects. Member Katie Anderson shared her concern that WEC has hooked up with a developer (UPC) that has not done sufficient studies as to environmental effects caused by wind turbines.  She showed a picture of a job in Maine completed by UPC in which, according to Katie, an entire hill top was destroyed.  She asked that a DVD she brought with her could be shown so that the membership could see that the work UPC completed in Maine was not environmentally acceptable.  Member Bud Haas suggested that copies of the DVD be made available.  Manager Patt said he would make copies available for people who wanted one.  He added that WEC has followed the development in Maine and that the Vermont Agency of Natural Resources, after a thorough review, found their conditions had been met on UPC’s proposed project in Sheffield.  He added that he has seen large wind turbines and there is no question that there is environmental impact but suggested that one look at the benefit of wind power.

 

WEC member Steven Farnham questioned whether there was any reason the Co-op could not be in the business to build a wind farm on their own.  Manager Patt noted that we would be subject to the same regulatory process as a large company like UPC and that an environmental review is quite tough.  He added that the PSB has heard all the witnesses and rebuttal to UPC’s proposal and expect to make a decision this summer.  

 

There being no further essential business to discuss, the business meeting concluded at 8:34 p.m. following the door prize drawings.

 

 

Date of Membership Approval:  _________, 2008             Attest:  __________________________ 

                                                                                                              Marion Milne, Secretary