Get ready to— BEC’s 82nd ANNUAL MEMBER Also on FaceBook LIVE. Go to the Beartooth Electric page. MEETING Historical Video Conference May 2, 2020 Staying Safe—Being Healthy 1
Agenda WELCOME & CALL TO ORDER 01 -President, Julie Lindgren PLEDGE OF ALLEGIANCE 02 -President, Julie Lindgren APPOINTMENT OF 03 PARLIAMENTARIAN -President, Julie Lindgren LAURENCE MARTIN, ESQ., COUNSEL 2
Agenda ESTABLISH A QUORUM 04 Secretary, Arleen Boyd NOTICE OF MEETING—MOTION 05 Secretary, Arleen Boyd APPROVAL OF 2019 ANNUAL 06 MEMBER MEETING MINUTES — MOTION Secretary, Arleen Boyd 3
JULIE LINDGREN, PRESIDENT 4
COMMITTEE LINDA BRUCE WALTER BILL HALSTEAD- MEMBERS— AUSTIN CLAPP HAND ACHARYA COMMUNICATION RISK MGMT COMMUNICATION COMMUNICATION SERVICE THAT SHINES JANET SHARLENE JEAN DAVID LULOFF MCCOMAS PETERSEN PETERSON POLICY BYLAW COMM-EDITOR RISK MGMT THANK YOU! MIKE FRANK JIM CHARLES SPECHT WILLETT RODGERS SANGMEISTER BYLAW FINANCE | RISK MGMT COMM | RISK MGMT BYLAW 5
TRUSTEE ELECTIONS DANIEL DUTTON RALPH LEWIS NO Ready to Serve? If you live in District 3 NOMINATIONS and would like to serve on the Board RECEIVED of Trustees, call us at 406-446-2310. 6
BYLAW COMMITTEE BYLAWS FOR A DEMOCRATIC COOPERATIVE MEMBER TRANSPARENCY INVOLVEMENT ARLEEN BOYD, CHAIR BEST BUSINESS MONTANA LAW PRACTICES CONFORMITY MCA 35-18-207. Bylaws. The original bylaws of a cooperative shall be adopted by its members. The bylaws shall set forth the rights and duties of members and may contain other provisions for the regulation and management of the affairs of the cooperative. Healthy 7
MIKE SPECHT, BYLAW COMMITTEE COMMITTEE MEMBER 2020 PROPOSED BYLAW AMENDMENTS • • Reflect changes in Reflect changes in Montana law. Montana law. • • Align provisions in Align provisions in The proposed Article XI various bylaw articles various bylaw articles amendment allows co-op with each other. with each other. spelling, grammar, and syntax changes that do not With the 2020 proposed • • Update and improve Update and improve affect the meaning of a amendments—few needed methods for methods for bylaw to be made without changes are expected near communicating with communicating with QUESTIONS? member approval. members. members. term. • • Clarify provisions in Clarify provisions in some Articles. some Articles Bylaws are the cooperative’s legal agreement with members and the rules and requirements for all parties. 8
RISK MANAGEMENT COMMITTEE Meet Fiduciary Responsibilities Analyze plans and projects ARLEEN BOYD, CO-CHAIR Examine developing trends and technology Involve members and engage outside expertise BILL PASCOE, CO-CHAIR Take care –Stay safe –Watch the money –Watch the future 9
9 RATE DESIGN 8 7 6 Did a lot of Rate Design Risk Management analysis, identified as a Involve members Committee considered a lot 5 priority issue in focused on Rate and engage of alternatives 2017 and 2019 Design since outside expertise • All work posted on Strategic Plans 4 October 2018 7.9 7.8 BEC website at MyBEC/Rate Design 6.7 3 5.7 5.6 5.5 4.6 4.5 4.4 4.4 4.3 4.3 2 3.5 3.3 3.2 2.9 2.8 2.5 2.4 2.4 2.4 THE PROCESS 1 1.8 1.6 1.2 0 10 January February March April May June July August September October November December
9 RATE DESIGN 8 30-day 7 RMC advance notice Recommendations to membership to the Board Minor changes to 6 Board will vote on in early May existing 3-Part Rates Rate Design for Large Commercial, 5 recommendations Industrial, and on June 30, 2020. Irrigation. 4 7.9 7.8 6.7 3 Transition to new 3- 5.7 5.6 5.5 Part Rates for 4.6 4.5 4.4 4.4 4.3 4.3 2 Residential and Small 3.5 3.3 Commercial. 3.2 2.9 2.8 2.5 2.4 2.4 2.4 THE PROCESS 1 1.8 1.6 1.2 0 11 January February March April May June July August September October November December
WHAT IS A 3-PART RATE? BEC’S COSTS FALL INTO THREE CATEGORIES: . BASE COSTS SYSTEM DRIVEN COSTS ENERGY DRIVEN COSTS • Linemen • Wholesale energy purchases • Meter reading • Vehicles • NorthWestern Energy transmission • Billing • System maintenance • Administration • Tree trimming “Energy” represents the electricity • Accounting • Property taxes consumed during a billing period, • Finance • System depreciation measured in kilowatt hours (kWh). • Customer service • Debt service, etc. • Communications, etc. “Transmission” represents the Costs that are driven by delivery of electricity to BEC’s Costs incurred without a single maximum energy usage distribution system. kilowatt (kWh) sold. measured in kilowatts (kW). These costs are generally recovered These costs are generally These costs are generally through a combined energy charge or recovered through a monthly recovered through a system independent transmission and energy base charge. charge. charges. 3-Part Rates establish charges that align with BEC’s costs 12
SIMPLE 3-PART RATE COOPERATIVE COSTS FLOW INTO CHARGES System Energy Base Costs Driven Costs Driven Costs Administrative BEC Operations & Member System Wholesale NWE & General Distribution Maintenance Services Depreciation Power Transmission (A&G) System (O&M) SYSTEM ENERGY BASE CHARGE CHARGE CHARGE 13
CURRENT COOPERATIVE COSTS FLOW INTO CHARGES RESIDENTIAL 2-PART RATE System Energy Base Costs Driven Costs Driven Costs Administrative BEC Operations & Member System Wholesale NWE & General Distribution Maintenance Services Depreciation Power Transmission (A&G) System (O&M) 100% 28% 72% 100% In the current 2-Part rate design, system driven costs are captured in both the base and energy charges. BASE ENERGY CHARGE CHARGE 14 $33.50/ $0.09238/ Month kWh SYSTEM CHARGE
COOPERATIVE COSTS FLOW INTO CHARGES PROPOSED RESIDENTIAL System Energy Base Costs Driven Costs Driven Costs 3-PART RATE Administrative BEC Operations & Member System Wholesale NWE & General Distribution Maintenance Services Depreciation Power Transmission (A&G) System (O&M) 20% 100% 57% 100% 23% In the recommended 3-Part rate design, the shift to a system charge results in 23% of the system driven BASE ENERGY costs allocated to CHARGE CHARGE this charge, and the $30.00/ introduction of the $0.08387/ $2.00/kW charge. Month kWh 15 SYSTEM CHARGE $2.00/ kW
CURRENT & PROPOSED RATES CURRENT RATES PROPOSED RATES RESIDENTIAL BASE CHARGE ($/MONTH) $33.50 $30.00 SYSTEM CHARGE ($/kW) $2.00 ENERGY CHARGE ($/kWh) $0.09238 $0.08387 SMALL COMMERCIAL BASE CHARGE ($/MONTH) $33.50 $30.00 SYSTEM CHARGE ($/kW) $2.00 ENERGY CHARGE ($/kWh) $0.08705 $0.08109 16
SYSTEM CHARGE BILLING SYSTEM CHARGE BILLED BASED ON THE MAXIMUM 15-MINUTE USAGE (kW) AT ANY TIME DURING THE MONTH. KILOWATTS (kW) IS THE TOTAL KILOWATTS KILOWATTS WATTS KILOWATTS APPLIANCE AMOUNT OF ELECTRICITY (kWh) (kWh) (w) (kW) BEING USED AT ANY POINT 1-hour 2-hours IN TIME. OVEN 2,000 2.0 2.0 4.0 REFRIGERATOR 500 0.5 0.5 1.0 KILOWATT-HOURS (kWh) IS THE LIGHTS 300 0.3 0.3 0.6 AMOUNT OF ELECTRICITY CONSUMED OVER TIME. TOTAL 2,800 2.8 2.8 5.6 17
BEC’S CURRENT REVENUES ARE ADEQUATE TO COVER CURRENT COSTS. NEW RATES WILL GENERATE SAME $ REVENUE FROM EACH CLASS AS CURRENT RATES (ASSUMING NORMAL WEATHER). SYSTEM CHARGE REVENUES WILL BE USED TO REDUCE THE BASE CHARGE (10.4%) AND THE ENERGY CHARGE (9.3%). TYPICAL MEMBER’S BILL WILL BE ABOUT THE SAME, BUT SOME MEMBERS WILL PAY A LITTLE MORE AND SOME WILL PAY A LITTLE LESS DEPENDING ON ELECTRICITY USAGE CHARACTERISTICS. REVENUE NEUTRAL GOAL: NEW RATE DESIGN IS REVENUE NEUTRAL 18
WHY NEW RATE DESIGN? ALLOCATES COSTS FAIRLY WITHIN EACH RATE CLASS. REDUCES DEPENDENCE ON ENERGY CHARGE TO FUND SYSTEM COSTS - MONTHLY REVENUES LESS VARIABLE AND MORE PREDICTABLE FOR BEC - MONTHLY BILLS LESS VARIABLE AND MORE PREDICTABLE FOR MEMBERS. REDUCES DEPENDENCE ON BASE CHARGE TO FUND SYSTEM COSTS - BASE CHARGE DISPROPORTIONATELY IMPACTS SMALL CONSUMERS. BETTER ALIGNS BEC AND MEMBER INTERESTS IN ENERGY EFFICIENCY AND DISTRIBUTED GENERATION. 19
WHAT’S NEXT 9 8 7 6 30-DAY Member Fall & Winter 2021 April 1, 2021 5 Notice | May 2020 Current rates remain in effect— • Member New rates, including • New bill format Fall & Winter 2021 System Charge, in comments 4 7.9 showing more 7.8 Current rates remain in effect for all rate welcomed on or usage information, June 30, 2020 effect (continued)— classes 6.7 before June 30 kW and kWh • Continuing Board decisions 3 5.7 5.6 member 5.5 on Rate Design communications 4.6 4.5 4.4 4.4 4.3 4.3 • Bill comparison 2 3.5 tool on website 3.3 3.2 2.9 2.8 2.5 2.4 2.4 2.4 1 1.8 1.6 1.2 0 20 January February March April May June July August September October November December
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