The Benton Public Utilities Commission (Benton Utilities) will meet at 6 p.m. Monday, April 12 at the Electric Utility Building, 1827 Dale Avenue. The agenda follows, as well as minutes from the previous meeting.
NOTE: Social distancing will be enforced for all attendees. Staff reports may be submitted in place of required attendance. Guests must adhere to precautionary guidelines as issued by the Governor’s office and State health officials. Audio recordings of the meeting will be available upon request.
AGENDA
1. Call to Order
2. Prayer
3. Pledge of Allegiance
4. Roll Call
5. Approval of Minutes from the Meeting of March 15, 2020.
6. Departmental Reports
A. Bid Approval for Split Case Pump Steve Robbins
B. Coakley Yearly Water Maintenance Contract Dewayne Hood
C. Wastewater Treatment Floating Aerators Greg Becker
D. Chenault Reservoir Repairs Byron Hicks
7. Old Business
8. New Business
A. Project Summary of Work Orders 63 & 64 Jacob Gillip
9. Announcements
A. Next Commission Meeting Date: April 19, 2021
10. Adjournment
MINUTES FROM THE PREVIOUS MEETING:
The City of Benton Utility Commissioners met in regular session Monday, March 15, 2021 at the Electric Utility Building, 1827 Dale Avenue.
In Attendance:
Doug Stracener, Chairman
Charlie Best, Member
Jim Martin, Member
Gary Ferrell, Member
Jerry Ponder, Member
David Vondran, General Manager
Chairman Stracener called the meeting to order with all members in attendance. Member Martin gave the invocation and Chairman Stracener led the Pledge of Allegiance.
The first item of business was approval of the minutes from the regular meeting of March 1, 2021. Member Martin made a motion to approve the minutes as presented and Member Ferrell seconded the motion. A vote was taken, and unanimous approval given.
Departmental Reports
A. Employee of the Month Brent Davis
Mr. Davis said extraordinary times call for extraordinary measures, and we had an extraordinary February as far as what 2 departments in particular did for Benton Utilities, and we’ve come to the decision that we would like to recognize, rather than 1 individual, the entire Water Distribution and the entire Water Purification departments as our employees of the month. We will get one plaque for each department. Chairman Stracener said he thinks that is very good.
B. February Financials Karen Scott
Mrs. Scott said on the first page you will see the revenues as of February 28, 2021. The current month ROE was $697,836, compared to 2020 which was $359,051. This is a difference of a positive of $338,785. She usually goes over this by department, but since she is on this page, note that on the 2nd to the right column of “Difference Between 2021 vs. 2020” for the month, revenues were up $276,000 (most of which was electric of $219,000). There were a couple of departments that had higher or significantly lower expenditures that created that difference. In wholesale electricity we purchased $71,000 more in wholesale power. The Electric Distribution Budget Expenditures were lower because in 2020 they bought a Caterpillar Track Loader, and WWC expenditures were significantly lower because we actually had an invoice to Heller that we paid in February of 2020, so those were some really high dollar things that were part of the reason. You will see that Water and Sewer revenues were also higher than last year. We had several leaks for customers, we billed more water and sewer utilization than last year and have already had customers contact billing saying they had a leak. There is a process for them to go through to ask for an adjustment, so that may be reflected in revenues in months going forward, but today that is what it is. On page 7, the Bad Debt Analysis by Month, in February of 202, we wrote off $20,812. We collected $4,569.57. YTD that is a net of loss of $26,000. At this time last year, our loss was $18,000, so we are slightly worse off there, but we are still encountering customers who are still struggling to pay their DPA’s. We are trying our best to work with them. Just the other day we found out that a house had been vacated, but there was still a utilization going on, so there is nobody to pay the bill. We are struggling a little bit with bad debts, but we are not in terrible shape considering the economic times, and we are hoping that this new round of stimulus will hopefully get some of our customers to pay some of those back. Page 13 is the Revenues vs. Expenditures per system. The Electric had ROE of $652,000, Water had ROE of $12,000 and WW had a positive of $33,000. The total of all 3 systems was ROE of $697,836. We will have some catching up on expenses that are being charged and paid for in March that were from the storm, so this is just how it landed on February 28th. Member Ferrell said it is not too many times that we hear that all 3 facilities are making money, so what a great month it was, other than the snow storm and the cold. A question on the people that have arrears that have decided to make payments. He asked if that is collected as revenue. Mrs. Scott said no, it was counted as revenue when it was billed. We move it from the regular account to a different accounts receivable when we set up their DPA. Member Ferrell said so it is not making everything rosy. Mrs. Scott said it is still impact until we write the account off and then it becomes bad debt. Member Ferrell asked if participation is growing for new people needing DPA’s and Mrs. Scott said as long as they are still receiving our utilities, they had to make arrangements on those bad debts/passed due accounts by January 1st or they were going to be cut off. The struggle for many of them is that they already were struggling to pay their monthly bill, so depending on how much they owed us, 1/6th of that being added on. Several of the people that had share applications had DPA’s that they had entered in to. Member Ferrell said we had an Arkansas Department of Transportation reimbursement at some point, and he assumes that money will be moved at some point. Mrs. Scott said whatever you want us to do with it. Member Ferrell said in the top accounts you have 10 million dollars. He asked if that is kind of high. Mrs. Scott said the second account (130.36.40), gets some electronic payments, but the other main account where customer payments go to is the one right below that (130.38) and the bottom one (130.40) is credit card payments and so forth. So, it is probably a timing issue that it is sitting in these accounts, and not being paid out for bills. We transfer from those accounts into Accounts Payable and payroll. Member Ferrell said yes, he sees the balance at 6.6 from last year, but it just seems to grow. He is just saying to look at it. His other question is if she does cash forecasting. Mrs. Scott said no. Alderman Steve Lee asked if we had received any of that government money and asked if there is any way to apply to get some of it. We got 1.2 million. Mrs. Scott said she reached out to the Municipal League in the first round of stimulus funding, and just last week when the 1.9 trillion was passed. The City of Benton is actually who got the allocation, so if Benton Utilities is going to get any, we have to get it from the City. Member Ferrell asked if there is an application to get it and Mrs. Scott said there is no mechanism for the Utility in the current rules and regulations for us to be a standalone grantee of those funds. Member Ferrell said so, we have to apply to the City. Mrs. Scott said what the Municipal League told her on the first round was that it was their understanding that the City expended all of their funds. Alderman Steve Lee said it was earmarked here and there. To get the 1.2, they used the pay for the firemen over a specific time period. They just chose that department because it was easy. Mrs. Scott said we definitely have some expenditures that we would like to have covered. Alderman Steve Lee said you have a bunch of employees that you paid. That is how they got it. Mrs. Scott said at one point, about 50% of our work force had covid and was off for some period of time where they were compensated. We had other expenditures, such as masks, volumes of sanitizers and sanitizing of our buildings every time we had someone who tested Covid positive. We have several expenditures that we would love to have reimbursed. Alderman Steve Lee said Mandy done all that. He has no clue if she would help you or not. Mrs. Scott said she personally has not approached the Mayor or Mandy, because again, the Municipal League said it was their understanding that the City spend all of their money. Member Ponder said his understanding is that there was 1.2 million received by the City, with $200,000 going to Animal Control, $500,000 to salaries, $50,000 for audit and the balance to 114 for future fire development. His comment there would be that we’ve got a half million dollars’ worth of bad debt, and we received stimulus money to assist. He understood from an inquiry previously that the Utilities did not have its own independent mechanism, but he would certainly hope that the Council would take the initiative to work with the Utilities to apply for more funds, and to distribute those on a basis where at least the Utilities’ extra expenses associated with all of that have been out the door. Alderman Steve Lee said he was totally unaware of even applying for it. He didn’t know anything about it until after the City had received the money. He just got a sheet of paper saying where it is going, or where it would like to have gone. Member Ponder said he would assume the Council would have had to have voted to designate those funds and Alderman Steve Lee said exactly. We did do that. Chairman Stracener asked if we know if there is anything new for municipalities in this new one and Mrs. Scott said there is not. Alderman Steve Lee he shall add that Mandy did state there was 1.2 million available, and she got it all. Chairman Stracener said no, he is talking about in the recent bill. Alderman Steve Lee said if there is a new process, he will take a look. Member Ponder said he knows money was coming down to states as part of this stimulus. Surely there’s an application process of some description for municipalities to be considered from the state. If the fed didn’t say how you had to divvy it up, or how you had to divvy it up. Mrs. Scott said her understanding was that it was all done through the municipal league. Chairman Stracener said Member Ponder makes a good point on the bad debt side of that. That would be the best place to apply that. Member Ferrell said we are going to eat some of that. We just don’t know how much yet. Alderman Lee said the government is saying you don’t have to pay your rent or anything else. Member Ponder said and he gets the future stuff that you’re accounting for, but he has a hard time having conversations with people about them not getting further utilities unless you are willing to enter into a DPA, and we are setting money aside for future projects we haven’t done yet. Member Martin moved that we accept the financials as presented, and Member Ferrell seconded the motion. A vote was taken and unanimous approval was given.
C. Grit Washer Bid Correction Greg Becker
Mr. Becker, Wastewater Treatment Manager said he knows you approved the grit washer at the last PUC meeting, but he made a mistake. He said we were going to purchase it from Jack Tyler, but we are actually going through Jack Tyler to purchase from Envirocare. He just wanted to seek approval for that requisition so he can make that purchase through Envirocare. Member Martin moved to approve the staff’s correction to the to the party he is enquiring this from. Mr. Becker said yes sir, we are purchasing it directly from Envirocare. Member Ponder seconded the motion. A vote was taken and unanimous approval was given.
Old Business
A. Sungate Phase 1 Change Order 1 Approval David Vondran
Mr. Vondran said before you, you have the contract change order for Mr. Michael Bolin and Associates. He is the professional engineer representing Mr. Fred Brenner and the development of his property between Severn Landing Road and South Shoreline Blvd, north of Hurricane Lakes. When Mr. Brenner visited with the PUC, about donating a parcel of land for our elevated storage tank, it was briefly mentioned at that time, that the needs of the subdivision would be given a given line size, say 6” or 8”, but we would be interested in upsizing that in the interest of looping our system, and creating a backup, so to speak, for making a stronger distribution system network. Now that that development has gone in, Mr. Bolin has provided the incremental cost associated with that upsizing of that water line. The original cost from the contractor, the additions would be $78,000. That was the new material for the new larger line pipe diameter. The deletions are those of the smaller pipe diameter, so the net additions are $55,050. This is a non-budgeted expenditure, so we are requiring your approval and your action. It would be a good use for part of the 10 million in those checking accounts at the top of page 8 (of the February, 2021 Financial Report). It could also be taken from restricted funds if you so choose, but with it being a non-budgeted expenditure, we are bringing it to you for your recommendation. Member Ferrell asked Member Best if that price looks right to him (the price going from a 6” PVC water line to a 12” PVC water line) and Member Best asked if the price includes the other things there, and added that the 6” looks about right, and the 12” looks about right. The 12” is quite a bit more than the 6”. It jumps up fast. Mr. Vondran said the $78,000 divided by 1,400 linear feet, is $55 per linear foot. Member Best asked if he subtracted the other stuff and Mr. Vondran said he didn’t. Member Best said he thought it would be around $35 to be honest. Chairman Stracener asked if that is the installed cost and Mr. Vondran said yes. Mr. Hood said there was a considerable difference between the 6” valve and the 12”. Chairman Stracener said yes, he broke out the valves on the deletion, but not in the overall. Member Best said Mr. Hood probably knows if that is reasonable. Mr. Hood said he thought it was for what we are trying to do there. Chairman Stracener said what we don’t know is the cost of those gate valves. Member Best said the valves can go up extremely high. Chairman Stracener said it would have been nice to have had them itemized the same. Member Martin asked if this was originally a bidden project and Mr. Vondran said yes sir, by the developer. Not by us. Member Ferrell said it is actually his line and we are asking to go to 12” for our purposes. Member Martin said the total amount payable of this estimate is $163,000, and he asked if that is what we are asking for together. Chairman Stracener said our cost will be the $55,000. Mr. Vondran said on behalf of Mr. Hood, he will bring to their attention that when we reorganize our rate fee, customer service regulation, all rolled into one Benton Utilities rules, not only is it important that we address our rates, we know we have to address our rates, but we need to clarify and specify what developers are going to be asked to pay and bring to the table when they develop land and contribute capital. In the past, there have been some instances where developers were told to upsize the line at their expense. It has been done, sometime he believes it hasn’t been done, but we are now in a position where it is in the best interest of Benton Utilities, because we are the keepers of the master plan, it is to our benefit, and of course, our customer’s benefit, to upsize those lines as we go, and pay for that, and re-coop it as the next developer ties on. We will re-coop our fees. Member Best said the big difference is that you are jumping from a 6” to a 12”, 6” to and 8” or an 8” to a 10”. We just have to be on notice of that much. Mr. Hood said they basically hooked on to an existing 12” at the elevated tank, and went out to Severn Landing Road, so that now allows us to go either direction on Severn Landing and connect back into a 12” that we already have further down Severn Landing. It opens up for us to have access to a lot of vacant land in there that we might be able to serve in the future. Member Best said he thinks it is a good thing. Member Ferrell said we talked about this. He remembers the discussion. He asked where we want to take it. Mr. Vondran said he yields to Mrs. Scott; cash or restricted funds. Mrs. Scott said we have the cash and Mr. Vondran said he proposes cash. Member Ponder made a motion to approve the change order for $55,050 to be paid by cash, and Member Best seconded the motion. A vote was taken with unanimous approval given.
B. Net Metering Ordinance-Saline County Solar David Vondran
Chairman Stracener said since they had some visitors in attendance, he wanted to move the net metering ordinance to the front of the agenda before the employee reports. He then asked Mr. Vondran to introduce the visitors. Mr. Vondran asked Mr. Josh Davenport to introduce his team before they got started. Mr. Davenport said hello and introduced himself and said that he was one of the founders of a company called Seal Solar, based in North Little Rock. He said they had about 47 employees and they are just a local solar design and install company. He then introduced Mr. Will Gruber and said that he would let him tell you what he does. Mr. Gruber told them thank you for having them tonight and he was a Saline County Civil Attorney you may remember Clay Ford; I took his place when he became District Judge. I work with Judge Arey and he has a Quorum Court meeting that will start here in a little bit so he wishes he could be here but due to Quorum Court meeting he cannot. Mr. Alex Ray then introduced himself and said that he was the director of business development for Johnson Controls out of the Little Rock office but he is also a Saline County, Benton resident and he is happy to be here will everyone today. Chairman Stracener asked Mr. Vondran where we are at on this and he said, Mr. Chairman and Commissioners, you have before you a Benton Utilities net metering rules packet and there are additional copies available up on the front table. Under our current net metering ordinance, there is a 300-kW maximum limit on the size of facility that can be built. The County has submitted a proposal for 5 or 6 installations that are under that 300 kW and those applications have been processed and they are good to go. There will be some site-specific upgrades at those locations. Metering, breakers, that type of thing to make those installations ready to go but they are in progress and our team is communicating with their team to determine what that make ready is going to be. What we are needing to accommodate, there is one location that has been requested for 500 kW at the County Jail facility so we are needing to modify our ordinance in some capacity in order to accommodate that size of installation. He said if you will start at the front page, we will skip through the table of contents and we will go to Page 6, Item # 3, the new proposal before you will be Distributed Generation for Net Metering for a Governmental Facility will not have a generating capacity that exceeds the lesser of (a) 650 kW or (b) the generating capacity capable of producing eighty (80%) of the electricity (kWh) that was consumed at that site during the previous 12 months. So, if we look at the load on the County Jail for the previous 12 months and we back into if that number is 80% of the bill capacity then that limit would be 650 kW which comes out to be a 500-kW unit. The County is proposing to build at the county facility a 500-kW unit and if these yellow modifications are accepted by you then that would facilitate them going forward with the 500-kW project at the County Jail. If you keep going on Page 8, down at the bottom of Page 8, it is highlighted under Rule 1.06 Avoided Cost, our avoided cost which currently has been adopted by City Council is .04189 per kWh for a fixed mount system. For a single access tracking system that number is .04439. Currently on our residential net metering customers, if a residential net metering customer produces enough excess generation that comes back on our system, we credit them at the .04439 rate. The retail rate residential is about $0.09 so that difference, the other $0.045 is our local cost, our distribution cost, our franchise fee, that is what it takes to support our system. Alderman Steve Lee asked what the first figure was that he gave and Mr. Vondran said .04189. Mr. Vondran said that is a fixed solar panel installation that does not move, it does not track with the movement of the sun. The .04439 is on a single axis that rotates and can actually move with the sun so it is a more efficient installation so therefore it deserves more credit. That is where those two numbers come from. With the retail rate being $.09 you just take $.09 minus one of those two figures to find out what our costs are for billing, distribution, and our staff. That is what it costs us to operate our grid. That really is just for example only, it does not apply to Small General Service customers our Class 300 customer accounts that are demand metered. There is a state law, Act 464 that requires us to credit a demand metered customer at a 1 to 1 rate rather than at avoided cost. That state law also allows us to incorporate what is known as a grid charge. If you will keep flipping through until you get to Page 12, the highlighted section on Page 12, Rule 2.06, Generation above Net Metering Limits. This is a compromise that has been inserted, new language that has been inserted into the net metering rules and it says “In addition to Net-Metering Facilities that comply with this Section 2, Governmental Customers may install a single Net-Metering Facility with the generating capacity that shall not excess, the lesser of (a) 500 kW, or (b) the generating capacity that is calculated to produce one hundred percent (100%) of the electricity (kWh). The County came to us and said we don’t want all of them to be 500 kW installs, we just want one. Here is a clause that allows one install greater than 300. It allows them one install up to 500. If that happens, 500 kW minus the 300 kW that is already in policy that is 200 kW. If you multiply that 200 kW times 8,760 hours per year times a 20% efficiency factor on a solar install then that would be about 350,400 kWh that the 500 kW is going to produce over a 300-kW facility. We are talking about the increment that the larger install is going to allow. If you take the 350,400 kW and you multiply times the difference between the commercial retail rate of $0.07 and the avoided cost you get $9,159.50 that we are being asked to subsidize. If we keep going on through the net-metering rules you will see Rule 4.03, Governmental Net Metering Application. This group is being created because we don’t have a rate structure for governmental entities and this would apply to governmental entities only. The lesser of (a) 650 kW, or (b) the generating capacity that is calculated to produce 80%. We have reviewed that. For new facilities, the lesser of 650 kW the generating capacity that is calculated to produce 80% and that is an agreement that we would not change the grid charge for a period of 5 years so that they could run those numbers and depend on those numbers under Rules 4.03. Following on page 17, Rule 4.06 Use of Distribution System, that yellow number is the one that we would be setting, that is the grid charge per kWh. This could be put into place so that that grid charge per kWh comes out to equal the $9,159.50 that our non-solar customers have been asked to subsidize the solar customers. There is a perimeter where we could recoup that unrecovered cost because we are having to credit one to one according to state law. The requirements in Act 464 apply to IOU’s (Investor-Owned Utilities) and the Co-Ops and us also but the act specifically references those types of entities (IOU’s and Co-Ops) because they are regulated by the Public Service Commission and we are not. That is why the legislation allows us as the local governing body to legislate this information. When I say us, it would go from the PUC to the City Council, the Council is the rate setting authority. When I say us, I mean the commission and the city as one. We have an option that would allow the County to proceed with the 500 kW install which is over and above the 300 with one of two decisions to make. One decision would be to allow the one-time install where our customers would absorb the $9,159.50 figure and the other option would be to create a grid charge so that it is neither beneficial nor detrimental as far as financing goes. Member Ponder asked Mr. Vondran if he anticipated future requests of this magnitude to come back or do you think this would be just a one-time thing? Mr. Vondran said he did believe that it would be a one-time thing for Saline County Administration or Saline County Organization. He thinks whatever they do here is going to be followed by the School District, it could very well be followed by State Agencies with state facilities that are within the City of Benton so we are creating a precedence. Member Ponder said he did hear him say in there per metering site on the way that that is constructed so if an entity like to school district has several metering sites it would be based each of those? Mr. Vondran said if they go under Rules 2, there is no meter aggregation. If they go under Rule 4 there is meter aggregation with the potential of a demand charge. Member Ponder said so what we are talking about here right now is City of Benton’s ratepayers or one of the aspects that we are talking about is City of Benton’s ratepayers subsidizing for the benefit of the entire county. Mr. Vondran said yes sir, the City of Benton would be subsidizing any County Facilities power cost and we would not be recouping the unrecovered cost that is the retail rate minus the avoided cost. Member Ponder said that is what he thought that he understood. Member Martin said that is applicable to this one customer right now but if the school district comes along and they want five 500 kW then we are looking at a cost of $9,000 for each unit basically in unrecovered costs so that multiplies out to whomever is putting in a 650 kW and Mr. Vondran said that is correct. Member Ponder said his first thought there from an equitability standpoint if you are going to set a precedence that would reach across multiple entities being fair seems to him that they would work out the methodology to do the grid charge there so that it is neutral. Mr. Vondran said a compromise would be if the grid charge, the grid charge can apply to the full 500 kW but a compromise would be to only apply the grid charge to the 500 minus the 300 and that is the $9,159.50 figure. Member Ponder said if you do it the way you just described it though then they are not recognizing or receiving the benefit that they might otherwise from putting in the installation and Mr. Vondran said that is correct and our unrecovered cost is only on the first 300 kW because we are having to credit that one to one with no grid charge. Member Ferrell asked if there was a benefit to the citizens of Benton to do a no charge? Mr. Vondran said to do a no charge there is no financial benefit to the citizens of Benton. Member Ferrell then asked if there was a cost and Mr. Vondran said yes sir, the non-solar customers would be subsidizing the solar customers at a rate of retail minus avoided costs. Member Best said that would be almost another $9,000 and if you mean the whole thing you are talking about you are looking at $18,000. Mr. Vondran said yes sir, our numbers are so close that our avoided costs are almost equal to our unavoided costs. Member Martin said it certainly opens the door for additional costs for more than this one particular unit if we go with the avoided costs and the rate payers subsidize that. Member Ferrell said that he could not vote for that. Alderman Lee asked what would happen if that solar system just quit one day. Mr. Vondran explained that any replacement energy unless they are installing batteries, any replacement energy would come from our grid and our wholesale contract. Member Ferrell said so we have to have full load at all times and Mr. Vondran said that was correct. He said that he still believes the county is expecting us to provide full requirements load following. If they don’t need us during the peak production of the solar, they don’t need us and that’s great but if they need us due to a cloudy day or nighttime, absolutely we are still expected to provide it. Chairman Stracener asked Mr. Vondran to go back and explain the difference of 2.06 and 4.03. Mr. Vondran said 2.06 does not include meter aggregation and rule 4 does. Chairman Stracener said so under 2.06 we are not looking at any grid charges and Mr. Vondran said that is correct is we are willing to cover the $9,159.50. Chairman Stracener said but as it is proposed right here there is no grid charge. Mr. Vondran said under rule 2 that is correct. Basically, that is a one time, compromising, one shot install 500 kW that which exceeds the 300. They don’t get to meter aggregate but we don’t get to install the grid charge. That language is not approved, it is just an option. Member Ferrell then said so, there is a cost to us and Mr. Vondran said yes sir, Rule 2.06 is going to cost us $9,159.50 a year. Member Stracener said and 4.03. Mr. Vondran said it is going to cost us the same amount but 4.03 allows them to meter aggregate and allows us to calculate a grid charge which would cancel the $9,159.50 or to some extent thereof. Alderman Lee said the bottom line at the end of the day is that we would subsidize the county $9,159.50. He is speaking as one of the ten council members and they are always looking for ways to benefit the citizens not cost the citizens. He could not vote to use city money to subsidize anything outside of the city. That is just one out of tens opinion. Member Best said he just wanted to clarify one thing, again on 2.06 that is if the 300 is not counted but in reality, it is $18,000 roughly. You are subtracting and that is the difference between the 650 and 300 you are saying that is just a gift so we are really giving $9,000 there. Mr. Vondran said that is correct. Chairman Stracener asked if there were any other questions before we hear from the County representatives. Hearing none he turned the floor over to Mr. Gruber. Mr. Gruber said they are operating under the assumption that we are all trying to find solutions to the same issue. Just wanted to bring up a couple of things, not from a legal standpoint or a technical standpoint he would let Mr. Davenport and Mr. Ray address it from that standpoint. He just wanted to home in on two things, one which is that we have been discussing this project for months now. There was a commission meeting in November and he has read the minutes from that meeting and definitely did not get a sense that there was going to be a grid charge. He said that he has been the county attorney since December and has invested a bit of time and resources into this project based on a reliance of what occurred in November. On some level if you do what you are doing here would be detrimental to what we are doing. He just wanted to bring up that point. Saline County and Benton Utilities we want to work together to find a solution if we can. We are a significant rate payer, obviously we are invested in finding a solution to this. All of your rate payers are also Saline County Taxpayers and the project is being done to save taxpayer dollars, right? He thinks they can all agree that this project is working towards that goal and we have been working on this with Benton Utilities for 8 months. There was a November meeting where there was a lot of discussion and he has read the minutes and there was nothing in there that would lead him to believe there was going to be a gid charge imposed on this 500-kW project. They have invested a significant amount of time and resources into this project which is going to save taxpayer money a reality relying on what happened in November. He guessed what he was trying to articulate was that it would be very detrimental to the success of this project if you guys were to do something that had a negative impact on the project. In reading the law, in reading the rules, he thinks a lot of assumptions are being made tonight and contemplating by the rules and the statutes there needs to be more time. We just got this information for the first time today and we are having to come in here and on the fly try to determine whether or not what impact this might have on a project that is going to be in 20 years. Our request would be, allow us time to digest this. Allow us time to see if this is consistent with what Saline County needs to accomplish this project and provide feedback. If there are going to be cost’s we would like to see the costs. We would like to provide you with the benefits and we would like to provide you with the best ability to make the best possible decision for your rate payers. That is the position of Judge Arey and me so that is sort of the macro level perspective. Obviously, I want to refer to Mr. Davenport and Mr. Ray for any type of subject matter. Mr. Davenport said that he guessed they could dive into those details. The County made a decision based on the November meeting. Now, a grid charge changes that decision and changes the economics of the project. This issue of net metering and avoided cost is not new to Arkansas in fact it has been at the Public Service Commission for about 5 years now. There has been a lot of money spent on it and a lot of third parties spent on it and the truth is that it is still being dove into. There are costs and benefits that need to be associated with a net metering client. What we would ask is, literally that is the first thing that we have seen this is, have a sort of a time frame where they can come back and present to you what other benefits this solar project would have. Not only for Saline County but for Benton Utilities. Whether it is energy, generation costs, transmission costs, distribution costs, risk, hedging. You guys have a contract to buy power, that contract comes up next June. You might now see the benefit for Solar right now under your certain conditions but trust me, almost every other utility in the State see’s those capacity benefits. He would hate for them to look at this decision as a one-year decision when it is a 25- or 30-year product that is on your grid. He guesses that is the ask. They might get down to the end of the line and realize yep, that is what it is. He thinks that in their position and being good stewards of taxpayer and rate payer’s money that you would see the full picture before you make a decision. Alderman Lee said as representing John Q. Public you are asking them to pay more to subsidize partially what you are doing to save tax dollars; I believe what your verbiage was. What benefit is John O. Public going to get. Is the county going to lower the taxes that they have to pay to make up? It sounds to me like one of those Democrat issues, just trust me. Is he talking to Schumer or Pelosi? Mr. Ray asked what Alderman Lee’s name was and he said I am Steve Lee and I am on the City Council. He then said that he was the liaison from the City Council. Mr. Ray told Alderman Lee that he appreciated that and he laughed because he is a card-carrying member of the Saline County Republican Committee. He is a card-carrying member of the Arkansas Republican Party. You can call him a lot of things but nobody has ever called him a liberal. That is why he laughed about that. With all due respect there are times where the concept of renewable power and the concept of clean energy been in years past been bi-partisan issues. WHO said he would tell them that a lot of members in the legislature today have stopped looking at it from a position of partisan politics and a position of economics. He said this will probably not be the last time ever that they will meet any of them. He is a Saline County taxpayer, he is a Saline County Citizen and he currently has some land under contract to buy in your utility service territory, in the city limits, counselor. His children will be Benton School District stakeholders. He is a future stakeholder of this utility and to Mr. Davenport’s point, what we have asked is to consider the long-term impact of a potential partnership between the County and Benton Utilities whereby there is going to be mutual benefit for everybody tangible and intangible. Not the least of which is to your point, all Benton Utility customers are County taxpayers. Of course, that is not the inverse. Not every single county taxpayer is a Benton Utilities customer but by and large every Benton Utility customer is a Saline County taxpayer. If we are able to extend an economic benefit to a county taxpayer, they are all of your rate payers. As we have evaluated the cost benefit, we have done it the best we can for the County on a 20-year life cycle for the project for the solar panel having a 30-year guarantee from the solar manufacturer. This will be producing economic benefit to the stake holders of this community of which we all are, his family and himself included taxpayers of this community for decades to come. WHO said I think our big ask is to slow down the process so if there is a cost and you haven’t seen any benefit because we haven’t been able to prepare that. All that we ask is that we create a little bit more formal of a process so that we can work together to find a solution and we would love to set up a time to get everybody in a room together to figure this out. If there is a cost, we would like to see how that figure came about. To be asked to be subsidized. Chairman Stracener said by building the solar you are asking to be subsidized by the rate payers who have put in all of the infrastructure over the last 50 years at no cost to you. Zero cost to you. Mr. Davenport said no sir and Chairman Stracener asked how he figured that because you are not paying anything for the distribution system at all. Mr. Davenport said when you build a solar rate onto an electric grid there are multiple savings that happens. Right now, your contract you don’t get capacity savings but when you get capacity savings and that solar rate is peaking at certain times of the day that is actual capacity that the entire grid needs. If we are producing solar instantaneously at a certain location that electricity does not have to come from Nuclear One or some wind power plant in Oklahoma it is produced on site so that is transmission savings, distribution savings, less strain on the transformer. What you have to look at is what does this system benefit over the life of the system of 30 years and how is that spread among everybody. Literally, the Public Service Commission has spent 5 years diving into this with third party studies and everything else and what he would ask is, he thinks its would be prudent to let them come back and show you what the benefits are. He doesn’t have enough time right now to come up with the benefits are without knowing how you buy power. This is the first time he has seen this honestly and they are kind of scrambling because they were under the impression from the other meeting that everything was okay and people made decisions based on off of that meeting and now the economics have changed in the 9th inning. Member Martin asked him to explain that. He heard the other guy talking about we have been 8 months into this, we had a meeting and all of this was agreed on back in November and all of a sudden you are accusing the commission of throwing something out there and interfering that is going to impact the whole big program over $9,000 give him a break. He doesn’t understand so explain to him these details that are interrupting this process by the utilities. Mr. Davenport said that was an excellent question. Member Martin said he was glad because he didn’t understand a whole lot about this. That you are looking past this project, this project is not the answer. You are looking at the broader scope of things in his opinion where you can put in multiple units of 650 kW’s and not just the county’s project that you are working on. Mr. Davenport said this is a little tense but it is good. He then asked Mr. Vondran to clarify because he and Commission Martin are under completely different understandings of Section 2.06. As you described earlier, the non-governmental entities would be allowed one 650 kW interconnection is that how 2.06 reads? Mr. Vondran said it actually reads 500 kW at 100%. Mr. Davenport said but just one, a single interconnection. Mr. Vondran said a single interconnection. Mr. Davenport then asked if they are talking A or DC, 500 AC or 650 DC. Mr. Vondran said it doesn’t specify but we are fine with those being AC numbers. Mr. Davenport then said so does that mean that a governmental entity could have one 500 kW or multiple. Mr. Vondran said one. Mr. Davenport said that is where they are on different pages, Benton Schools and the County could only do one, they could not do multiple. When they do it one time that is it. Member Ferrell said one 500 and Mr. Davenport said that is correct. The law allows not the PUC’s Commission, Act 464 of the General Assembly Law allows for up to 300 kW. What we are asking for in the 2.06 is one single 500 kW. Once Saline County does it one time and in 10 year’s they build another jail or a juvenile detention center there is no coming back for another one. Member Ferrell said no, but you could do 300’s. Mr. Davenport said that is right which is perfectly what the law allows. Member Ponder said that is something you could do without conversation at all. Alderman Lee said if the school was allowed one and once, they got done with one, he has been here a long time, he would guarantee it don’t matter what this says they are going to ask for another. They are going to fill this room up with school people that you haven’t seen in 20 years. Member Best said he was kind of under the impression that this was really urgent. How much time are ya’ll needing? Would you want another 30 days? Chairman Stracener said they were under the impression that the County was driving this. Mr. Davenport said they were driving it under the ruling in November. Member Best said he was talking about finishing this up, he thought that was a real urgency but if they can wait another 30 days then do it and then come back. Mr. Vondran said for the benefit of Mr. Gruber, he is the newest member of the group and Commissioner Ponder, he wants to make sure that they get some things on the record. Because we referred to previous meetings and what we understand from the previous meetings. Some things are worth restating. One thing Mr. Gruber that is worth restating is, the Saline County Quorum Court has a group of stakeholders that includes Benton Utility Ratepayers. It is their authority if they want one subset of their constituents to subsidize another subset or the whole of their constituents. Benton Utilities represents the ratepaying customer only so we are the ones that are getting their pocket reached into in order to benefit a neighbor, friends and family that may also live in the county that are going to reap the benefit. That is one clarification that he would like to make. He is both a Saline County resident and a Benton Utility rate payer. One of the assumptions that all of this premise is based on for any solar installation, there has to be an assumed inflation, an assumed incremental cost of power and in the Johnson Control contract, the rate that is used is in excess of 2.8%. That is an annual estimated cost of power inflation. In the history of Benton Utilities there has actually been a decrease in power costs so that assumption is false. Don’t take my word for it, hire a 3rd party engineering company to verify the numbers. This may all be new information to you. Now, it doesn’t matter if it is a 300 kW or a 500-kW unit this project is not going to save Saline County Taxpayers money because they are assuming a 2.8% increase that we don’t think is going to happen. That decision is being made today on the best information we have today in this room. We all know from the snowstorm of last month that could change when we walk out the door but as of now, this project regardless of size will not save Saline County Taxpayers money. Don’t take my word for it, get your own 3rd party verification if you will. The Saline County Quorum Court Members that represent the Benton constituents, I don’t think they have a good understanding of that. I think the Quorum Court Members that represent unincorporated Saline County and Bryant and Haskell and Bauxite, they may understand that and they may choose for the Benton ratepayers to subsidize the Saline County taxpayers. I yield that to you so that you can do that research and have whatever amount of time you need to come back to us. Mr. Gruber thanked the commission and said he knew that it had gotten heated but he thinks if you look at the existing rules it contemplates a cost benefit analysis and it contemplates sort of what we are trying to accomplish here which is, taking time to figure out if there are costs, we would like to see it. We would like to prove to you the benefits and if there is going to be a grid charge. Obviously, we believe based on the information that we have provided that there shouldn’t be one. That is, you and the City Council’s decision to impose one and how much to impose. Our request as it has always been since he stepped foot into this room today is, hey we are not trying to prolong this thing indefinitely. We would like to get a decision quickly, we would just like it to be in a process where we can come together and you can present information and we can present information and figure out if there are some things we can agree on and some things we can’t agree on. But, ultimately come before you in 30 days as you said and let you have the best possible information before you make your decision. Like he said, he is just getting this today and he has a very simple mind on a very complex subject. He thinks it would be useful if they could just take a pause and they all have a chance to digest it and maybe come back in April and present. They will work with Mr. Vondran in the meantime. He is committed, Judge Arey is committed to see if there is a way that we can work together on this. That is what he is asking and he appreciates their time. Mr. Shawn Jackson, Project Manager for Benton Utilities said he was just curious, how much does the project cost? How much is the solar project, he is a taxpayer so he is wondering. Mr. Ray said he is a little off in the weeds about what they are discussing tonight versus the whole project County wide. The entire County project which includes solar, LED lighting, HVAC, building weatherization and water conservation was about 6.8 million with a guaranteed 20-year payback and a guaranteed net benefit of 9.8 million dollars over that 20 years. Mr. Jackson asked how much the solar project was and Mr. Ray said it was a little less than 4 million of the 6.8 million. Mr. Davenport said he thinks that it would be beneficial to explain what a guaranteed savings program looks like because there has been something thrown around about how it is going to cost the County money and from what he understands, Johnson Controls is guaranteeing the County save money. Mr. Ray said yes, which is outside the scope of this discussion. Mr. Davenport said he just thinks that needs to be heard. Mr. Vondran said if he may that guarantee for Mr. Grubers benefit that guarantee is only if our power costs increase at a rate higher than the 2.87%. If our power does not increase higher than the 2.87 or above, they are off the hook for the performance guarantee. He has no doubt that the entire scope of the County’s project, the LED lighting and the conservation part of the project is economically beneficial to the taxpayers of Saline County and to the taxpayer, rate payer of Benton Utilities. It is strictly the solar portion of the project that we feel is reducing the overall savings of the entire scope. Mr. Ray said that he knows that they want to move on but he thinks that really at the end of the day one of the very first things that he said was that he appreciates that you guys are looking out for the rate payers and know that’s their number one priority. When you are doing your job, you have a holistic view of it and the costs. Mr. Vondran has presented you with his prospective on costs which he certainly appreciates but they haven’t seen that. We haven’t been able to present to him or you the benefits associated with this as well. He thinks that is what is contemplated by the rules and by the statutes this weighing cost and benefit and presenting you with that information for you to make your determination. You don’t have to push this 6 months, 30 days would be great. We have been working on this for a long time and he thinks they owe it to everybody to make the most informed decision. Member Martin said they probably need 30 days anyway because the commissioners have not seen this before tonight. But rest assured we are going to be concerned about the impact that it has upon the citizens of Benton who are ratepayers. Mr. Gruber said that he absolutely agreed that this as to be their first priority. He is not disagreeing with that. Member Martin said that is the Commission’s mission. Mr. Gruber thanked them on behalf of Judge Arey who wished he could have been there tonight. They have Quorum Court meeting. If anybody has any questions, he would be glad to respond. He will give them his cell phone and they could do coffee or lunch. He won’t shy away from a difficult conversation.
New Business
A. MCE Work Order # 58-Study of Downtown Water System Dewayne Hood
Mr. Hood yielded the discussion to Mr. Jacob Gillip of McClelland Engineering. Mr. Gillip said this is in conjunction with the City, as you are probably aware, the downtown has older waterlines, and because they are older, they are smaller in diameter, and in some cases the diameter has corroded and there is build up in the lines, which reduces the diameter. It doesn’t have the fire flow that we would like for commercial areas, so in conjunction with the City, we are proposing that the Mayor pay half and the Utility pay half to do a study together to determine what sort of improvements are necessary to get the desired fire flow in the downtown area. The first step of that would be to put out monitors, collecting the data and checking our modeling in that area to determine what kind of network would provide the desired flow. Mr. Vondran asked Mr. Gillip if McClelland has executed the other 50% of the workorder from the City side, or when he anticipates receiving it. Mr. Gillip said the Mayor did sign the draft invoice he sent to him, had it witnessed and sent it back, so we have the agreement from him. Mr. Hood said the total amount should have been $26,000. It should be $13,000 from us and $13,000 from them, and Mr. Gillip said he thinks it is in the ballpark of $13,000 from each one. Member Ferrell said he is assuming we don’t have CAD drawings of the downtown and Mr. Gillip said we have some drawings. The modeling is more to see how the system gets water to the downtown area. We foresee having to tear out the majority of those lines anyway, because they need bigger lines. We have also looked at maybe bringing more lines into the downtown area in order to get more flow into that part of the City. The modeling is just to check, because the lines are older it is sometimes difficult to accurately predict how the flow is occurring if the line has corrosion built up inside. It may not deliver as much water as we think it should. Member Ferrell said he is assuming then, that we don’t have drawings of the downtown area. Mr. Hood said yes sir, we do. They have modeled this; this is going to be some additional flow monitoring where they actually put some stuff out there to monitor the flow. Like Mr. Gillip said, based off your modeling software, you could put a co-efficiency in there of that pipe, but you can’t put something in there for something that is 80 to 100 years old. We need to actually go out and field verify and field monitor some of this. We’ve got our base already done, but we need to verify what is actually coming in there with some flow monitoring and make sure of what we are actually getting there. Member Ferrell asked what that will tell us; if we are going to replace most of what is going down there, then why are we going through this. Mr. Gillip said that will tell us how much water is getting to that part of the City now, and will give us an idea of how many large diameter lines we need to bring into the downtown area. Member Ferrell said we really don’t care what is there. We are just going to put new lines in and Mr. Gillip said for the most part, yes. Chairman Stracener asked where most of those lines are located; in the street right of way or the sidewalk. Mr. Hood said yes. It depends on what street. It is a pretty hodge-podge of stuff there. Member Stracener said it will be a major disruption in the downtown area. Member Martin said it sounds like the study is to find out how bad it is, and then determine where to go from there. Mr. Gillip said yes sir, part of it includes planning on how to phase a downtown project and some ballpark estimates. Downtown areas can be challenging when you start digging, because you find a lot of stuff you don’t want. Member Martin asked if Heller does waterlines and Mr. Gillip said he doesn’t know. He said it is possible sometimes to pop those waterlines, but he doesn’t know if we would want to do that downtown. Member Ferrell made a motion to accept the proposal as presented and Member Martin seconded the motion. A vote was taken with unanimous approval given. Chairman Stracener asked what the source of funds would be on this… cash or restricted funds. Mr. Vondran said with task number one not to exceed $15,000, and task number 3 not to exceed $6,000, we can keep an eye on this from a cash standpoint and come back to you. Mrs. Scott said we probably need to save some of the restricted money for recommendations to fix all of this stuff, and Mr. Vondran said for phasing. Chairman Stracener said cash and asked if the Commissioner agreed, and they said yes.
Member Martin asked if we received the ARDOT reimbursements and Mr. Gillip said no, but he spoke with Lynzi Frizzell today, and she anticipates it going out by the end of the week on the $100,000 one, and the one Garver reviewed should be going to the Highway Department for payment. Member Martin asked if the Highway Department holds out retaining on us and Mr. Gillip said no.
Member Ferrell asked if they saw the customer with the water heater damage or visit with them and Mr. Hood said he visited with him the following day and he was unsure of what he wanted to do. The customer thanked him for even considering it. Mr. Hood is going to look into it and get back with the Commission, but he has not called him back.
Announcements
A. Next Commission Meeting Date: April 5, 2021
Mrs. Scott said for the 2nd meeting in April on the 19th, Stephens is coming to discuss the status and performance of the pension plan in general. Jodi Carrera will be here as well. They will first present to the Pension Administrative Committee at 4:00 that day, so we probably want to have them first on the agenda that night. Just a little spoiler alert, the fund did make about 10% last year.
Mr. Vondran said we have an instance where we have a resident who has a water leak on the private side of the meter, and it is currently within 7,000 gallons of being 500,000 gallons, and he is knowledgeable of the leak, so he has declared that an emergency. We turned the meter off a couple of days ago. It has been turned on and off many times and left on, so he instructed our staff to go out, turn it off and lock it. We will assist when he calls a plumber, and turn the water on to help his plumber find the leak, but the water meter will remain off until the 493,000 gallons of water have been paid for, or he produces plumber receipts that the leak has been fixed. The next step will be a plumber fixing the problem and the customer coming to us for about a half-million-gallon water adjustment. He will keep the Commission posted. Member Ponder asked how long the leak has been there. Mr. Hood said from what the billing department said, it was during the cold weather. It ruptured under the house, runs behind the house and into the creek. It is not visible from the street. He did turn the water off and made a repair, but apparently it blew out and didn’t hold, so the water was on and off several times. We would go out and talk to the gentleman, and turn the water off and didn’t lock it, because he indicated he had a plumber on the way. In the meantime, he has turned it back on, so the billing department went back out there, turned it off and locked it. Chairman Stracener said you could probably hear that from the street. Mr. Hood said he is surprised one of the neighbors didn’t report it, but the way it was running behind the house and hitting the creek, that he guesses no one really thought too much about it.
Meeting adjourned at 7:31 PM to an Executive Session.
Executive Session
The meeting readjourned at 8:04 PM with no action taken. Meeting adjourned at 8:05 PM.
___________________________ ______________________________
Doug Stracener, Chairman Madeline Wilson, Recording Secretary