MINUTES OF REGULAR BOARD OF DIRECTORS MEETING OF COBB ELECTRIC MEMBERSHIP CORPORATION 1000 EMC PARKWAY MARIETTA, GEORGIA

Transcription

1 MINUTES OF REGULAR BOARD OF DIRECTORS MEETING OF COBB ELECTRIC MEMBERSHIP CORPORATION 1000 EMC PARKWAY MARIETTA, GEORGIA CALL TO ORDER Chairman Tripper Sharp called the meeting of the (hereinafter Cobb EMC ) Board of Directors to order at approximately 4:00 p.m. The meeting was held in the Board Room of the Administrative Building. INVOCATION AND PLEDGE Chip Nelson gave the invocation and led the pledge. IN ATTENDANCE The following members of the Board of Directors were present: Bryan Boyd Tripper Sharp David McClellan David Tennant Ed Crowell Kelly Bodner Malcolm Swanson Eric B. Broadwell Rudy Underwood Others in attendance were: Chip Nelson David Johnson Robert Steele Tim Sosebee Kevan Espy Jamey Hulsey Kristi Knight Leslie Thompson Jenny Carroll Ron Younker Tim Jarrell

2 Minutes of Regular Board of Directors Meeting Page 2 of 10 Perla De La Rosa Dan Carmichael Carol Shaddix, Cobb EMC Foundation President Mr. And Mrs. Dan Porta. Member Guests Kevin Moore. General Counsel APPROVAL OF AGENDA Chairman Sharp requested the Benji Storm Overview be added to the agenda. Director Boyd made a motion to approve the agenda, with the noted change, seconded by Director Broadwell. The motion carried unanimously. SAFETY MESSAGE Dan Carmichael. Manager of Corporate Security, presented the Safety Message on K-9 Officer Amp and his many contributions to the Cherokee Country Sheriff s Office K-9 Unit. Mr. Carmichael introduced and welcomed Amp to the Board Room along with Sergeant Matt Azaroff, Head of the Cherokee County Sheriff s K-9 Unit, and Deputy Jack fulenwider, Amp s Handler. In 2009, Cobb EMC donated funds to purchase Amp who was named in honor of our cooperative. K-9 Amp is considered part of Cobb EMCs extended family and we are all very proud of what he has done for the community that Cobb EMC serves. Some of Amps many accomplishments include, apprehending perpetrators, locating illegal narcotics and participating in a host of public events. Amp often visits schools associated with Cobb EMC s Partners-In- Education as well as other schools in our area. After displaying an inspirational and informative video of Amp, Mr. Carmichael noted that Amp has been recognized and awarded on many occasions for his service and has faithfully served Cobb EMC for over 8 years. Sadly, Amp will be retiring from service in early Mr. Carmichael noted he has had the privilege to work with Amp from the beginning of his record breaking career, and will miss him upon his retirement. APPROVAL OF PREVIOUS MINUTES Chairman Sharp called for a vote to approve the minutes from the November 28, 2017 Board of Directors Meeting. Director McClellan seconded a motion made by Director Crowell to approve the minutes. The motion carried unanimously. WINTER STORM BENJI OVERVffW Mr. Nelson discussed past storms he had encountered while employed at Cobb EMC, namely the storms of 1973, 1995 and Mr. Nelson explained that each of these powerful storms caused massive power outages for Cobb EMC customers. As expected, our crews responded to each of these events with great professionalism and haste. Winter Storm Benji, however, was different. Not due to its severity or in Cobb EMC s response to restore power to its customers, but due to social media and the role it played in our communications with members.

3 Minutes of Regular Board of Directors Meeting Page 4 of 10 future. Mr. Espy apologized for not meeting the expectations that members have grown to expect of Cobb EMC and stressed that efforts are underway to expand and connect communications to all parts of the company. Tim Sosebee. Senior Vice President of Business Operations also apologized for the telephone systems not performing as expected and stated his team is exploring ways to avoid this scenario again during future events. Mr. Sosebee provided the following statistics regarding members services calls and ernails received during the storm: Calls count Friday 17,237 1,375 (beginning at 5 p.m.) Saturday 45,757 10,132 Sunday 17,319 2,295 Monday 8, Tuesday 5, Total Mr. Espy reviewed Cobb EMCs communications to members during the storm and the tirneline of web updates provided via the Cobb EMC website. Mr. Espy noted during the storm, the cooperative s website received 70,516 page views. Regarding social media communications, Mr. Espy provided the following figures; 59 Facebook posts made 649 facebook private messages made total private conversations occurred between members and Cobb EMC employees 100 Tweets were made 84 Twitter direct messages made 179 total Twitter direct message conversations occurred between members and Cobb EMC employees Mr. Espy discussed facebook and Twitter analytics during the storm. Mr. Espy also reviewed several of the many thank you messages received from grateful members who appreciated our lineman s efforts to restore power and the efforts made to keep members informed. Cobb EMC also received praise and recognition from other utility customers in their social media forums regarding our outstanding efforts in communicating to members. RECOGMZE MEMBERS Chairman Sharp welcomed member guests Mr. and Mrs. Dan Porta to the meeting. Mr. Porta thanked the Board for the opporutnity to speak and address his concerns regarding Cobb EMCs performance during the storm. Mr. Porta stated that he was without power for 75 hours during Winter Storm Benji. Mr. Porta suggested Cobb EMC refocus their efforts when restoring power to those who have been out the longest and correct the lack of communictions between contractors and the cooperative.

4 Minutes of Regular Board of Directors Meeting Page 5 of 10 REPORT FROM BUDGET ANI) FINANCE COMMITTEE Director McClellan. Chairman of the Budget and finance Committee, presented the report from the Budget and Finance Committee Meeting held on December 18, Director McClellan stated the Committee approved the minutes of the November 27, 2017 Committee meeting. Kevin Greiner, President and CEO of Gas South, presented an update on Gas South s financial results as of November Gas South s net income for November was $2.5 million, which is favorable to budget by $100,000. The fiscal year-to-date is a loss of $300,000 million, which is $2.2 million favorable to the budget. The Committee received the Financial and Statistical Report for Cobb EMC for the month of November 2017 by Robert Steele, CFO. The net margin for November was reported at a loss of $300,000, which is $900,000 favorable to the budget. The calendar year to date net margin is $33.8 million, which is $2.4 million favorable to the budget. The Balance Sheet at the end of November is $916.1 million. Tim Sosehee, Senior Vice President of Business Operations presented to the Committee a report on write-offs for the month of November 2017 for $38,652. The Committee received a presentation from Tim Janell, Associate Vice President, Power Supply and Planning, outlining the 2018 Cost of Service Study timeline. The Committee received a staff recommendation for the Wholesale Power Cost Adjustment (WPA) of zero mils on member s bills rendered in January 2018 from David Johnson, COO. The Committee recommended the Wholesale Power Adjustment (WPA) to zero for the month of January The WPA will be reviewed monthly and adjusted if necessary. Chairman Sharp called for a vote on the motion from the Committee to approve the recommendation of a Wholesale Power Adjustment of zero mils starting January 1, 2018, with consideration thereof monthly. There being no second necessary, the motion to approve the Committee s recommendation, with consideration thereof monthly carried unanimously. Chairman Sharp stated the financial reports have been reviewed and are ready for submittal to the auditors. REPORTS FROM COMMITTEES Audit Committee Director Rudy Underwood, Chairman of the Audit Committee, stated the Committee plans to meet on December to discuss internal reviews and the schedule for the internal audit planned in Public Affairs and Education Committee Kelly Bodner, Chairman of the Public Affairs and Education Committee, stated the Committee did not meet in December. The Committee is scheduled to meet next on January 4, 2018.

5 Minutes of Regular Board of Directors Meeting Page 6 of 10 Governance Committee Director Ed Crowell, Chairman of the Governance Committee, stated the Committee did not meet and he had nothing to report. Energy Portfolio Committee Director David Tennant, Chairman of the Energy Portfolio Committee, stated the Committee met on December 12, 2017 and discussed the following; Electric Vehicle Rate Discovery Update -.Mr. Tim Jarrell, Associate Vice President of Power Supply and Planning, discussed his research on electric vehicles, noting several options for the placement of charging stations. Different installation costs are involved with each station, depending on the set up; such as Level 2 home, Level 2 parking garage, Level 2 Curbside and Curbside DC Fast Charger. The fee to use any of these stations is based on how fast and how long an owner will charge his vehicle. Mr. Jarrell provided information on electric vehicle rates from other power companies along with the options Cobb EMC could possibly offer. The Committee discussed ideas on how to explore and advertise different electric vehicle rates to our members as electric car sales are predicted to increase over the next few years. Eventually, this type of rate will need to be added to our plans. More studies and research will continue to be conducted. Peaking Block Fuel Index Update - During the October Committee meeting, Mr. Jarrell discussed the change from Zone 6 to Zone 4 as the index pricing used for the Peaking Block agreement with Southern Power. Southern Power proposed changing the index to Transco Zone 4 from Zone 6 as well as including Transco Zone 4 maximum interruptible transportation charges and fuel retention charges. Language in the contract allows for either party to offer a new index price if it can be shown the current index is not representative of the price of gas delivered to Plant Dahiberg. Southern Power demonstrated that Transco Zone 4 is a more reflective index of the true cost to serve Dahlberg (Peaking Block) than Transco Zone 6 non-ny. This was also confirmed through legal review. Cobb EMC believed the gas transport charge adder was excessive and over collected the transport cost for those times when the index price was for delivered cost of gas. Cobb EMC proposed a counter method for the transport cost that is a seasonal adder. After further negotiations, Southern Power has agreed to the counter method providing an estimated $2.7 million in savings of transport cost over the remaining life of the Peaking Block agreement. The agreement expires December 31, 2026; both parties have signed the letter agreement. EMC as the Energy Expert Seminar at Cobb EMC - Mr. Jarrell informed the committee of plans to collaborate with other EMC s to host an energy seminar sometime next year. Mr. Jarrell asked for input from directors and requested they provide topics to be covered during these seminars. As of now, nothing has been set as the seminar is still in the planning and brainstorming stages. Follow upon the Sandhills Sale Update Southern Power is selling a third of the Sandhill facilities. Language has been added to the consent agreement and we are currently waiting on their response.

6 displayed Mr. Minutes of Regular Board of Directors Meeting Page 7 of 10 December Cost of Service Study Overview - Jarrell reviewed each step in the process of development of rates. There are three phases in the development process; test year revenue requirements, cost of service model and rate design. Ideally, a study should be conducted every five years when there is a major loss or acquisition of load, and a change in anticipated growth rates or in structure of wholesale rates. The timeline for 201$ is as follows: - January: Begin Cost of Service Study - March: Complete Cost of Service Study - April-May: Rate Analysis - June-July: New/Confirm Rate Design - August-December: Possibility of rolling out rates/rate calculator Human Resource Committee Director Swanson, Chairman of the Human Resource Committee, stated the Committee did not meet in December. The Committee is scheduled to meet again on January 18, 2018 to discuss the pension plan and P3. APPROVE APPLICATIONS AND CANCELLATIONS OF MEMBERSHIPS Chip Nelson, President and CEO, presented the Applications and Cancellations of Memberships report, stating there were 1,640 activations and 1,448 cancellations, resulting in 192 net new members in the month of November. Net additions for the year total 1,591 and the member count as November 1, 2017 was 183,152. Director Crowell made a motion to approve the applications for new memberships and approve cancellations of memberships, as presented, seconded by Director Broadwell. The motion carried unanimously. REVIEW SAFETY REPORT Jamey Hulsey, Senior Vice President of Electric Operations, presented the October 2017 Board Safety Report. November 2017 Results November Safety Meetings - attendance is 100% for all departments, which includes 12 make-ups. Preventable Vehicle Accidents - displayed annual totals from 2013 through 2017 with zero preventable vehicle accidents occurring in November 2017 and seven year-to-date. Company-wide efforts are ongoing to reduce vehicle accidents and decrease this number. Safety Violation Incidents - displayed annual totals from 2013 through 2017 with zero safety violation occurring in November 2017 with a total of twenty-two year-to-date. Recordable Injury Incidents - annual totals from 2013 through 2017 with one non-violation, and no violation injuries occurring in November Eleven non-violation and two violation injuries have occurred year-to-date.

7 Minutes of Regular Board of Directors Meeting Page 8 of 10 Incident I DART Rate (includes preventable and non-preventable injuries) - displayed annual totals from 2013 through Cobb EMC s year-to-date cumulative incident rate is 2.87 and the year-to-date dart rate is Safety Goal for 2017 = 100 percent the 2017 daily success rate is 99.3 percent; 331 out of 333 days has passed without a violation injury, with 97 days since the last violation injury. Percentage of Safety Participation Yearly totals for 2014 were 30.9 percent, 42.1 percent in 2015 and in Safety participation rose from percent last month to percent in November. Mr. Hulsey noted the cooperative is working diligently to trend this number upward. MARKETING AN]) CORPORATE COMMUNICATIONS REPORT Kevan Espy, Vice President of Marketing and Corporate Communications, presented the November 2017 Marketing and Corporate Communications report. Mr. Espy reported on Smart Choice accounts for November 2017, which totaled 42,178 active members. Mr. Espy discussed the Cobb EMC App, which had 1,648 downloads in November and 26,478 downloads since its release in March of Mr. Espy Announced the Legislative Biscuit Drop-In will be held on January 31 at the Capitol Building in Atlanta. Carol Shaddix. President of the Community Foundation, presented the foundation update and noted she had been involved with the Foundation since its inception but was stepping down to make room for others who would like to lead the organization. Ms. Shaddix expressed her gratitude for the opportunity to serve such a worthwhile organization. Ms. Shaddix reported total distributions for December 2017 totaled $77,200. From October to December of 2017, $231,496 had been donated to the Foundation. The Foundation recently reviewed 151 new applications, and approved 48, six of which were new organizations. Since its inception, $3.2 million has been donated to the foundation. REPORT FROM PRESIDENT %ND CEO Chip Nelson, President and CEO, discussed the following in his report; The Annual Cobb County Chamber of Commerce Dinner will be held February This week, the Cobb County Chamber named Sharon Mason of East Cobb as the new president and chief executive officer, where she has worked for the past decade, most recently as chief operating officer. REPORT FROM GENERAL COUNSEL General Counsel, Kevin Moore, stated he had nothing to report.

8 Minutes of Regular Board of Directors Meeting Page 9 of 10 REPORT FROM DIRECTORS Director Sharp apologized to the member guests for how the recent winter storm was handled by Cobb EMC and committed to doing a better job in the future. Director McClellan attended the NRECA Winter School for Directors and participated in two informative classes; 1. Rate Making Strategies and Policy Decisions for Electric Cooperative Boards, and 2. The Role of the Board Chair in Conducting Effective Meetings. Mr. McClellan stated he answered a host of calls from members during Winter Storm Benji. Director Underwood stated he received a multitude of calls from members during the storm and was personally without power for 24 hours. Many members called to offer thanks to our crews and commented on the professionalism they displayed. Director Bodner attended the NRECA Winter School for Directors and the robotics event hosted by Cobb EMC. Director Bodner also received many calls from members during the storm and received special thanks from a member who was without power for 4 days. This member s power was intentionally disconnected until a dangerous repair could be made to the electrical system of the home. Keeping the power off until this repair could be made ensured the safety of her family. Director Swanson attended the Winter School for directors and found it both informative and educational. Director Swanson also received a host of calls from members and stated that his 80-year-old neighbor who lives alone and his 84-year-old parents, were without power for several days, but all fared well. Director Swanson stated the cooperative cares about its members and will work to do better in the future. Director Crowell stated Cobb EMC did not have a failure of people during the storm, but instead, a failure of processes. Director Crowell noted the cooperative will now work on creating a more robust system and conduct internal and external audits to identify problem areas. Director Tennant stated he has served on the NRECA Advisory Group for two years and his affiliation to this group rolls off this December. Director Tennant stated he also received multiple calls from members. Director Boyd commented he received various calls from members and his 80-year-old mother in-law, who lives on the same street as Mr. Porta. was also without power but handled the situation well. Director Broadwell stated he attended the CFC Financial Workshop and found the conference extremely helpful and well worth his time. Director Broadwell encouraged all Directors to attend this workshop next year. Director Broadwell also received calls from members and will look for the cooperative to create new methods of communication to handle these situations better in the future. OLD BUSINESS Chairman Sharp stated there was no old business at this time.

9 Minutes of Regular Board of Directors Meeting Page 10 of 10 December NEW BUSINESS Chairman Sharp stated there was no new business at this time EXECUTIVE SESSION Chairman Sharp stated there were no matters or issues for executive session. ADJOURNMENT There being no further business, Director Boyd made a motion to adjourn the meeting; seconded by Director Broadwell. The motion carried unanimously. Bryd Secretary/Treasurer ThpperSharp Chairman