MID Board Report Archive

MID Board Meeting of Tuesday, July 25, 2006
Contact: MID Public Affairs Department, Maree Hawkins, 209 526-7390
The next MID Board meetings are scheduled for Aug. 8 and 15.

Heat wave

General Manager Allen Short, whose thoughts were echoed by Board members, thanked all employees for responding to the challenges presented by the heat wave and working together to keep the lights on and fix any problems.

Staff reported that the transmission and distribution systems have worked well despite the high temperatures and peak energy use. Forty-six transformers had problems over the weekend (MID has over 18,000 transformers). Some local generation plants had problems, but were brought back into service as quickly as possible.

Customer billing system update

Assistant General Manager Lou Hampel, Finance & General Services, reported that 30 percent of the top 10-task list for the customer billing system has been accomplished. Calls related to the heat wave almost doubled the number of calls to Customer Services on Monday-from an average of 600 to just over 1,000 calls.

Financing update

Lou Hampel reported that the financing of 2006 Certificates of Participation (COP) has been completed. The financing included $80 million in refinancing and $65 million in new money for transmission, distribution and generation projects through 2008. MID saved $6 million by doing the financing. Local brokers sold $54 million of the $145 million in COPs to central California customers.

Temporary services agreements

The Board unanimously approved agreements with Pride Staff Inc. and Pro-Trades Connection to provide temporary labor services. Assistant General Manager John Gronholt, Human Resources, said MID has used temporary agency staff organizations for over 25 years for clerical, technical and field positions during special projects, employee medical and other valid absences, or during peak workloads. The Memorandum of Understanding between MID and the International Brotherhood of Electrical Workers specifies that no temporary labor person hired through an agency may work at MID more than one year. Agreements with two more temp agencies are in legal review. Human Resources wants to have contracts with several agencies since each agency specializes in different skills and the element of competition helps MID gets the best price.

Ripon Generation Station

The Board unanimously authorized the filing of a Notice of Completion with San Joaquin County for the furnishing of all plant, labor, technical, professional and other services; supervision, materials and equipment; and performing all operations required on the contract for combined aboveground and underground construction at Ripon Generation Station. The Board also unanimously approved the final change order on Ripon Generation Station with The Industrial Company.

2007 budget workshop

Lou Hampel led a budget workshop with the board, providing MID goals, financial policies, budget development criteria and schedule.

Goals are: continuously evaluate performance and improve customer service, contribute to community welfare, establish cost-based rates, deliver reliable water and power, make and fulfill responsible commitments, commit to achieving financial goals, develop and maintain a trained, safety-conscious workforce, and use technology wisely.

Financial policies include: maintain A+ stable rating, debt service coverage of 1.5x by 2007, retail electric rates to cost by 2007, and reserves at $200 million by 2011.

Budget development criteria will include: fund retiree healthcare benefit at the actuarial recommended rate annually, finance 80 percent of capital, target pay-as-you go for routine capital, meet organizational goals and objectives, maintain favorable competitive position and system reliability, and meet existing legal commitments.

The budget schedule: Aug. 18-capital plan due; Aug. 25-division O&M budgets due; September-management review; Sept. 26, Oct. 10 and Oct. 25-Board workshops on the budget, and
Nov. 14-adoption.

The Board voted unanimously to maintain the existing budget format and review process. They also asked for more detail on what capital projects could be financed versus pay-as-you go.