June 2010

   LA PLATA ELECTRIC ASSOCIATION, INC.

Durango, Colorado

The regular monthly meeting of the Board of Directors of La Plata Electric Association, Inc. was held Wednesday, June 16, 2010, in the headquarters building in Durango, Colorado. President Alley led the board in the Pledge of Allegiance.

President Alley called the meeting to order at 9:02 A.M. with the following directors present:

Terry Alley                   Bobby Lieb                              Harry Goff

Jeffrey Berman             Jerry McCaw                           Pam Patton

                        Davin Montoya             Harry Cole                              Herbert Brodsky

Joe Wheeling                J. Robert Formwalt                  

Excused absence: Tom Compton

Also present were:

Greg Munro, Chief Executive Officer

Barry Spear, Attorney

Dennis Svanes, Chief Financial Officer

Steve Gregg, Manager of Operations

Ron Meier, Manager of Engineering

Mark Schwantes, Manager of Corporate Services

Indiana Reed, Marketing & Communications Consultant

Linda Wilsey, Executive Secretary

GUESTS (from sign in sheet)

No guests attended the meeting

MEMBER COMMENTS AND CONCERNS

There were no comments or concerns.

AGENDA

President Alley addressed the agenda.

Motion:           Director Berman moved to approve the agenda as presented; motion seconded and passed without dissent.

President Alley presented Indiana Reed an award from the Council of Rural Electric Communicators for the best annual report to rural cooperative members for her 2008 LPEA Annual Report.

CONSENT BOARD ITEMS

The consent board items were presented and reviewed.

Motion:           Director Montoya moved to approve the consent board items including the May 19, 2010 minutes as presented, new members and capital credit payments to estates; motion seconded and carried without dissent.

ITEMS REQUIRING BOARD ACTIONS

Director reimbursements were presented and reviewed.

Board Meeting 6/16/10                              

Davin Montoya                   $217.50                 Harry Goff                    $200.00                      

                        Jeffrey Berman                  $200.00                  Harry Cole                   $236.00 

Joe Wheeling                     $211.00                  Herbert Brodsky          $200.00

                        Jerry McCaw                     $215.00                  Robert Formwalt          $260.00

Pam Patton                        $220.00                  Bobby Lieb                  $200.00

Terry Alley                        $260.00                 

Meetings

Joe Wheeling/CFC Forum                                            $2176.38

Harry Goff/Tri-State                                                   $1025.80

President Alley noted that though Director Compton is absent from the board meeting, he attended the CREA board meeting this month; that expense will be compensated next month.

Motion:           Director Cole moved to approve the director reimbursements as presented: motion seconded and passed without dissent.

REVIEW/APPROVE BOARD POLICY 119

Attorney Spear and CEO Munro presented a revised red and blue-lined copy of Policy 119, Statement of Function for Cooperative Attorney. A clean copy was given to the directors for final approval.

Motion:           Director Patton moved to approve revised Board Policy 119; motion seconded and carried without dissent.

REVIEW/APPROVE REVISED BOARD POLICIES 359 & 361

Mark Schwantes, Manager of Corporate Services, gave a PowerPoint Presentation of Green Power Program Financial Aspects. He explained how the funds work, both for Tri-State wind and local contributions, how the rebates for renewable generation work, what LPEA recommends moving forward and how much LPEA spends in marketing the program. He gave recommendations for the revised Policy 359 Renewable Generation and Environmental Attributes and Policy 361, Renewable Generation Funds. Questions were taken and answered.

The board requested copies of the presentation; Mark will forward it to Greg to send to the directors.

Prior to action on the policies, Director Patton suggested slight rewording on Policy 359.

Motion:           Director Goff moved to adopt revised Board Policy 359 with suggested changes; motion seconded and passed without dissent.

Motion:           Director Wheeling moved to adopt revised Board Policy 361; motion seconded.

Motion:           Following discussion Director Wheeling amended the original motion to delete the wording per Board Policy No. 359 from II. Policy B. 1; motion seconded and passed without dissent.

Motion:           A vote was taken on the original motion made by Director Wheeling; motion seconded and carried without dissent.

HERMOSA SUBSTATION SITE LEASE AGREEMENT

CEO Munro informed the directors the lease agreement is not being presented today so action will be postponed.

ATTORNEY REPORT

Attorney Spear stated he and CEO Munro met with the La Plata County manager, county attorney and planning staff to discuss the county’s proposal for a location and extent review process. A suggestion was made that if the planning commission denies a LPEA project due to public comments, the project would go to the LPEA Board to decide if the comments warranted changing the project.  Attorney Spear agreed this suggestion may be viable.

Attorney Spear has been working with CFO Svanes, CEO Munro and CoBank on the legal opinion needed for the LPEA loan.

CEO REPORT

CEO Munro gave highlights of his written report. The updated strategic plan was put in the board packet; it will be put in every month with new activities typed in colors.

He attended the CFC Forum and will give comments when others report on the forum.

The July Board meeting will be held in Pagosa Springs; invitations have been sent to the Archuleta Board of County Commissioners and the Pagosa Springs Town Council to join the board for lunch and discussions that day.

HB10-1098 has been signed by Governor Ritter. CEO Munro is working with CREA and the attorney and will make recommendations if they collectively determine that changes need to be made to LPEA policies to conform to the new state law on cooperative board of director elections.

The finance department recently implemented paying invoices every other week but is changing back to a weekly payment schedule.

LPEA staff will join Tri-State staff for a web conference regarding NERC standards. In July or August, Tri-State will come to LPEA to do a mock NERC audit. The safety accreditation team was here; a final report will be forthcoming from Steve Gregg, Manager of Operations.

Closing on the CoBank loan is June 30^th.

Questions were taken and answered on the CEO Report. Senior Manager of External Affairs Gigi Dennis from Tri-State was introduced. She was in the area and stopped to meet the LPEA Board. She offered to come to a Board meeting to give a presentation on actual costs of energy bills being considered at the state/federal level.

Regarding the financials, CEO Munro indicated that load factor was excellent in May but predicts a bad load factor in June. Margins have been good but will be less starting in July due to reduced wheeling sales from Tri-State.

The REDLG program was addressed. Comments from other cooperatives that have dealt with REDLG were noted in the packet. Discussion ensued on the pros and cons of utilizing REDLG with Region 9 Economic Development District of Southwest Colorado. CEO Munro asked that the board give him direction to pursue or not pursue a contract with Region 9.

Motion:           Director McCaw moved to not pursue the REDLG program with Region 9;                               motion seconded and passed.

The Strategic Planning update and staff conference and travel report were noted in the packet.

4 CORE ADVISORY BOARD MEETING REPORT

Director Berman indicated there was no meeting this month. A document was drafted describing the programs and opportunities that exist in 4CORE’s area, probably as a necessary step for funding. This will be sent to the Governor’s Energy Office.

CFC FORUM REPORTS

Director Wheeling stated that, unlike last year’s forum, the content this year was less geared to the rural utilities business. There were great speakers but he did not believe he learned as much as he did at last year’s conference. CEO Munro reiterated that he didn’t learn very much information to bring back to LPEA or the Board. CFC sent out a survey and CEO Munro hopes they listen to the feedback to improve the next forum.

Director Patton noted her CoBank report in the board packet, pointing out federal subsidy costs on domestic energy sources in the United States.

LA PLATA ELECTRIC ROUND UP FOUNDATION

Director Brodsky reported an increase of 47 members rounding up this month. Many requests are being seen, this month the board considered 5 requests totaling $25,000. The board denied one, granted one if they proceed with certain criteria, and granted $4440. 2 educational grants each requesting $3000 was considered; each was granted $1,000. There was some confusion as to the meeting being held the 2^nd Monday this month. Jeannie Bennett handed out a calendar with future dates for the Foundation. Indiana Reed created an article for Colorado Country Life to encourage members rounding up.

FASTTRACK REPORT

Director Wheeling reported that Steve Dorf, CEO, announced his resignation the first of June effective June 30th. FastTrack 2.0 is on schedule; the equipment has been purchased, including Solar Winds, a software program that spots outages. The customer satisfaction survey has been sent out. Tony Shablo has been hired as a Network Specialist.

Dennis Svanes is now serving as FastTrack’s CFO. He has put together a forward looking forecast which is needed for the recently acquired loan.

Revenue is now split 50/50 between New Mexico and Colorado. There is no news on meeting with the City of Durango as the city manager and staff continues to be unavailable. SWCOG has not received any grant money; funds won’t be released until a viable plan is in motion.

Regarding hiring a CEO, a CEO search committee has been formed comprised of Herbert Brodsky, Jasper Welch, John Van Cleve, Pam Patton and Joe Wheeling. They will not hire a search firm, but will use e-media. Linda Looman, Human Resources Director of LPEA, is giving the committee administrative support.

WESODI REPORT

Director McCaw previously sent out the financials. WESODI has been busy with LPEA jobs but the BWR side is not doing well. BWR has had to lay off some employees. A Corrales job which had planned to be financially positive will be break even if that. Director McCaw reviewed the jobs currently being done. CEO Munro is meeting with WESODI CEO Kenny Robinson to forecast the remainder of the year.

TRI-STATE REPORT

Director Wheeling, as the newly appointed Tri-State representative, gave the report. The major discussion at the Tri-State board meeting was the bond issue. Their intent is to get long term financing while rates are down; Tri-State does not need the money at this point in time. The bond issue was floated during the meeting; it originally was for $500M but was subscribed at $400M for 30 years. On the operations side, this was a bad month with many Tri-State plants down, either planned or unplanned, but thanks to spot marketing energy being at a very low cost, Tri-State financials were not negatively impacted.

Director Wheeling indicated that Tri-State’s recent marketing has been awareness based, but they are now shifting to affordability.

Director Goff gave a brief report on his last meeting at Tri-State.

CREA REPORT

The written CREA report was noted in the board packet.

WESTERN UNITED REPORT

Director Formwalt stated that Western United did not have a meeting in May. He reviewed sales and inventory turnovers. Sales are down from last year but Western United is holding their own.

4CORE REPORT

No 4CORE report was given.

FUTURE COMMITTEE OF THE WHOLE MEETINGS FUTURE AGENDA ITEMS

There will not be a Committee of the Whole meeting in July. Agenda items will include the quarterly reports plus the safety accreditation report by Steve Gregg. The directors were reminded that the next Board meeting will be in Pagosa Springs on July 21 at 9:00 A.M.

UPCOMING EXTERNAL MEETINGS

Director Patton would like to attend the Region VII meeting in October. As the time gets closer, more directors may plan to attend. Director Patton encouraged the directors to consider attending next year’s CoBank conference in Colorado Springs.

EXECUTIVE SESSION

Motion:           Director Patton moved to go into executive session to discuss a Tri-State related issue; motion seconded and passed without dissent.

The Board went into executive session at 2:10 P.M.

The regular meeting reconvened and with no further business, the meeting adjourned at 2:25

P.M.

                                                                                    Recorded by: Linda Wilsey

                                                                                    ____________________________

                                                                                    Pam Patton, Secretary

Approved by:  __________________________

                          Terry Alley, President

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