The Board meets on the first and third Monday of each month. Meetings begin at 1:00 p.m. and are held in the department conference room at 65 Lafayette Ave, Littleton. Board meetings are open to the public and time is allotted for public comments at each meeting.
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The regularly scheduled business meeting of the Littleton Water and Light (LWL) Board of Commissioners (BOC) began at 1:00 p.m. on Monday,
December 20, 2021 in the LWL conference room. Present were Commissioner Peter Cooper, Commissioner Ralph Ross, Commissioner Linda MacNeil, Director of Finance Lori Hogan, and Superintendent Thomas Considine.
MINUTES REVIEW:
The minutes of the December 6, 2021 regularly scheduled Commissioners meeting were reviewed. Commissioner MacNeil made a motion to accept the minutes as presented, seconded by Commissioner Ross.
The vote was in favor of the motion 3-0-0
SUPERINTENDENT/ GENERAL MANAGERS REPORT:
1. Mr. Derek Gray recently accepted an offer of employment from the LWL to fill the vacant line worker’s position. Mr. Gray's currently works for Duke Energy, his anticipated first day of work/report date is Tuesday, January 18, 2022.
2. The NH Department of Energy (NHDOE) recently distributed the proceeds from the fifty-fourth (54) Regional Greenhouse Gas Initiative (RGGI) Cap and Trade auction to LWL for disbursement in the amount of about $69,200. Once LWL receives payment from the NHDOE eligible LWL electric customers will receive a rebate (credit) in the amount of $11.42/1,000 kWh applied to their January 2022 LWL statement. This is the largest single distribution received (> 200%) through the RGGI program and is indicative of the high wholesale energy prices throughout New England.
GENERAL/OTHER BUSINESS:
The BOC was presented a power point slide presentation that highlighted the proposed 2022 operating and maintenance budgets for both the water and electric divisions in addition to the proposed Capital Improvement Project and Equipment requests.
Following some general discussion about the overall budget the presentation started with Superintendent Considine review the slide deck and the O&M budgets dated as of 12/17/2021.
1. The following changes were annotated on the water operating budget and are different from what was presented at the November 15, 2021 review:
1) US postage, budget line 102 was increase twenty-five (25) percent due to announced increase in the 2022 US postal rates, under General Expenses adjustments were made to retirement, retirement severance, and capital gain/loss budget line items 119,120, & 126 respectively and reflect changes in payroll and the 457 security benefits deferred compensation plan.
Following some general discussion budget line 135 annotated that the water division operation activities for 2022 would product a budget shortfall of about $12,000 or 1.7 percent below breakeven.
2. The following changes were annotated on the electric operating budget and are different from what was presented at the November 15, 2021 review: 1) Energy spot market, Budget Line item 31, US postage, budget line 140 was increase twenty-five (25) percent due to announced increase in the 2022 US postal rates, under General Expenses adjustments were made to retirement, retirement severance, and capital gain/loss budget line items 140, 156, 157 & 163 respectively and reflect changes in payroll and the 457 security benefits deferred compensation plan.
Sot market energy purchases (line 31), this amount ($1,236,100) represents about twenty-four (24) percent of LWL needed energy that is not currently hedge under a contract with a counter party and is being purchased from the spot market. The $/MWh estimated were future energy prices as of November 1st. Though the market has softened somewhat and prices have dropped somewhat the 2022 budget figures do not reflect any downward trend/move in market prices. A spring power supply solicitation is planned to reduce 2022 open position providing those forward prices continue to trend downward.
Line items discussed in greater detail: 1) transmission expenses are more than $277,400 or about 17% higher than 2021 and consistent with industry trends, 2) wholesale power supply expenses are about $1,320,000 or about 29% higher than 2021 and consistent with industry trends and 3) delivery distribution expenses are about $194,000 or about 7% higher than 2021 and reflect increases associated with inflation and supply chain issues.
Following some general discussion budget line 135 annotated that the electric divisions operation activities for 2022 would product a budget shortfall of about $1,278,500 or 13.6 percent below breakeven.
3. Combined operating activities for 2022 are projected to be greater than $11,400,00 and will produce a shortfall of about $1,290,500 or about 11.3 percent below breakeven.
4. The 2022 proposed Capital Improvement Project and Equipment (CIPE) plan (date 12/17/2021 were discussed in detail. Most of the CIPE discussion centered around the replacement of the bucket or digger truck and the Lafayette Substation proposed 15 kV conversion design recommendations.
There was some discussion whether to solicit a replacement bucket truck (712) or digger truck (808). Though the digger truck is 4 years older it is used much less when compared to the bucket truck and 808 is fully depreciated, only incurring actual maintenance and fuel expenses. Following some additional back and forth discussion the BOC agreed that a better use of funds would be to solicit a new bucket truck. As the lead time for a new truck is about one (1) this approved would be for funds disbursement in 2023 making the old bucket ten (10) to eleven (11) years old.
The BOC inquired about the proposed substation design and the purpose. Superintendent Considine stated that existing substation was not designed for 15 kV utilization so generally the new design recommendation is to accommodate electrical safety. Much of the existing superstructure needs to be modified and or replaced to achieve the needed safety clearances when operating at a higher voltage. In addition, the layout of the equipment is not correct and can be confusing. Though it has worked since installed improvement is recommended so that the power supply flows laterally in-line from line (High Voltage source) to load (Low Voltage).
5. General discussion regarding the proposed operating budget and that a pending rate adjustment is warranted by the projected shortfall in the financial position and whether LWL should present an operating budget annotating a shortfall position.
Margin, rate adjustment distribution, and timing were discussed at some length. It was decided that the several rate adjustment alternatives would be prepared and presented to the BOC for their consideration at their next meeting prior to setting the need revenue for 2022 though the expense portion of the budget could be accepted by the BOC as most of the expense are lock in and should not change.
Following some additional discussion relative to the operating budget and CIPE Commissioner MacNeil made a motion to accept the expense portion of the 2022 operating budget for both the water and electric division dated Friday, December 17, 2021 and as presented this afternoon. Seconded by Commissioner Ross.
Superintendent Considine stated that in the interest of full discloser that the Security Benefits 457 Plan and the proposed seven (7) percent LWL match of employee fund is built into the retirement general ledge line 647000 and 747000 for both water and electric personnel respectfully.
The vote was in favor of the motion 3-0-0
Commissioner Ross made a motion approve the 2022 CIPE plan as presented dated Friday, December 17, 2021, with the expectation and condition that the major funded project as discussed above come back before the BOC for discussion before executing. Seconded by Commissioner MacNeil.
The vote was in favor of the motion 3-0-0
6. Mrs. Hogan requested that for financial auditing and plan development purposes that the BOC vote separately on the proposed changes to the 457 plan that are reflected in the 2022 operating budgets. The 457 plan will be amended effective January 1, 2022 to include a $1 to $1 match up to a maximum of seven (7) percent by the employer. Additionally a 5-year vesting schedule (prorated 20% per year) will be added for the matching portion of the plan. The revised plan documents will be prepared for the BOC to review and approval at a future meeting.
Commissioner MacNeil made a motion to the LWL BOC acknowledges that the 2022 operating budget contains provisions to change the current 457 deferred compensation plan to retain qualified employees in a competitive marketplace. LWL will offer up to a seven (7) percent match of funds contributed by employees. In additional specific details as to how the plan will be implemented along with an appropriate vesting schedule will be approved by the BOC prior to executing. Seconded by Commissioner Ross.
The vote was in favor of the motion 3-0-0
MEETING ADJOURNMENT:
There being no further business to come before the board Commissioner Ross made a motion to adjourn the meeting, seconded by Commissioner MacNeil.
The vote was in favor of the motion 3-0-0.
Meeting adjourned at 3:35 p.m.
The regularly scheduled Commissioner’s meeting is held twice monthly on the first and third Monday, at 1:00 p.m., in the Department’s conference room.