125 Years of Reliable Power, Clean Water and Excellent Customer Service 2000 -2014

Navigating the New Millennium: Growth, Challenges, and Technological Transformations

The demand for reliable power and clean water continued to grow for public, private and personal use with the advent of the new millennium. The 2000 census documented the largest increase in the United States’ population since the boom of the 1960s. Between 1990 and 2000, the nation’s population grew from 248.7 to 281.4 million, an overall increase of 13.2 percent. Growth in the west represented the largest increase at 19.7 percent, and Oregonians saw their population numbers increase by 20.4 percent. Yamhill County’s population increased from 65,551 to 84,992, with 8,532 people moving to McMinnville, increasing the local population from 20,324 to of 28,856 and housing units from 7,654 to 9,834, accommodating new residents. Economic forecasters predicted slow to moderate growth over the coming decade. Through all of this growth and expansion, McMinnville retained its small-town charm at the turn of the century, with an attractive historic downtown district, inviting suburban neighborhoods, and active commercial areas.[i]

The first decade of the twenty-first century saw major tragedies around the globe. Forever remembered as 9-11, hijacked airliners crashed into the World Trade Center in New York City, the Pentagon in Washington D.C., and a field in Shanksville, Pennsylvania on September 11, 2001, creating a major watershed moment in United States history. Southeast Asia experienced one of the largest earthquakes ever recorded in 2004, measuring 9.3 magnitude on the Richter scale; and Hurricane Katrina brought unprecedented destruction to Louisiana in 2005.[ii]

Increased reliance on computers led to an event at the stroke of midnight, December 31, 1999, known as Y2K. A few years prior to the arrival of the year 2000, information technology (IT) professionals worked very hard to prevent the predicted worldwide Y2K catastrophe. The issue involved computers using two digit date settings instead of a four digit system (e.g., 99 depicted the year 1999). IT professionals anticipated that the roll over to 2000 (00) would throw all systems back to 1900. This was particularly worrisome for power grid and other infrastructures using system-monitoring software such as SCADA. Although the predicted massive failures did not materialize, the issue had many IT professionals rethinking the limitations of two-digits used in computer monitoring systems – beyond just dates. By the year 2000, half of the households in the United States had access to a computer, with 42 percent also having access to the Internet. Office and business use of personal computers had tripled since the mid-1980s; and school aged children also began using computers, learning basic keyboarding techniques, writing reports and accessing the Internet for ‘electronic field trips’, research and other activities.[iii]

Expanding Horizons: Growth and Enhancements in McMinnville’s Utility Services

The new century brought continued service expansion of McMinnville’s water and electric systems. Residential developments expanded north and south on Hill Road, into the foothills of the Oregon Coast Range from West Second Street, at the north end of Lafayette Avenue and to the west on Three Mile Lane (Old Stone Village). Linfield also added new student housing for the first time since the late 1960s. Commercial developments gobbled former agricultural lands at the north end of McMinnville, out Three Mile Lane to the east, and to the west at Keck Drive and Baker Street. Enhancements, such as the Baker Creek Road 24-Inch Transmission Water Main project, which traveled from Baker to Doral streets, improved the delivery of required water services. McMinnville Water and Light staff continued the process for purchasing materials and necessary equipment (e.g., meters, switches, voltage regulators, utility poles, underground distribution cable and ductile iron water piping) for upgrading existing systems and for new construction in commercial and residential areas, although the rate of expansion slowed a bit in the early years of the new century.

Those serving on the McMinnville Water and Light Commission in 2000 included Dr. Vivian Bull, Tom Tankersley and Gene Zinda, with Edward Gormley still presiding as McMinnville’s mayor. Bruce Bryant vacated his position in December 1999 and the position remained empty until Dale Moore’s appointment in April 2000. Dave Haugeberg remained as Commission attorney at the turn of the twenty-first century and McMinnville Water and Light administrative staff included General Manager John Harshman, Clerk Mary Ann Nolan, Water Superintendent Eric Abrams, Resource Manager Dwayne Jackson, Electric Distribution Superintendent Jim Holland and Purchasing Agent Larry Terry. Consultants to the utility included Paul Koehler for Power Sales; MBG’s Bill Davidson for Forestry Management; and MSA’s David Leibbrandt for the McGuire Dam project.[iv]

Watershed Stewardship and Challenges in the New Millennium

Water persisted as a source of concern at the beginning of the twenty-first century. Stewardship of the watershed continued through best practices in forest management. A diversity of species helps to keep the forest healthy. An analysis of the south Yamhill watershed, conducted in 1998, showed 67 percent of forest acreage consisted of conifer stands, including Western Red Cedar, Western Hemlock and Douglas-fir, with the latter considered the dominant species. The age of stands ranged from 30 to 70 years. Hardwood trees made up the other 33 percent and included red alder, bigleaf maple, black cottonwood, Oregon ash, white oak and several types of willow. By the time of the Yamhill Basin Council’s 1999 report, the watershed’s old growth stands were gone leaving few mature forest areas and mostly developing habitats. Foresters watched for things like Phellinus weirii, a root fungus that attacked both Douglas and Grand firs, often killing them. Animals attracted to the watershed include black-tailed deer, Roosevelt elk, black bear, mountain lion, bobcat, beavers, quail and grouse at the upper elevations; and in lower areas, Rufus hummingbirds, raptors, geese, ducks, and many species of fish, salamanders, frogs, and the northern alligator lizard at the lower elevations. Effective stewardship in the late twentieth and early twenty-first centuries brought renewal of endangered and threatened species, such as the American bald eagle, pileated woodpecker, mountain quail, northern spotted owl, winter Steelhead and plants such as Sidalcea Nelsonia. During the previous 150 years – prior to 1999 – three significant Oregon Coast Range fires burned headwater acreage in McMinnville’s watershed lands. The Nestucca fire of 1848 burned 300,000 acres, and the great Tillamook Burns of 1933 and 1939 caused significant damage. A subsequent burn of a portion of area previously scorched during the Tillamook fires, burned again in 1951. On the opposite spectrum, natural rain on snow events brought flooding from the headwaters in the Coast Range to the valley floor, including the events of 1861 and 1964. Splash damming, an activity frequently used by logging operations between the mid-1880s to around 1910, affected the magnitude of flooding felt in later years by towns along the Yamhill River, including flood events in 1931 and 1955. Removal of large woody debris during the early 1960s and subsequent repair efforts that hardened river and stream banks to keep them in place, most likely contributed to the magnitude of the 1964 flood event, and possibly the 1996 event as well.[v]

By 2000, McMinnville Water and Light held six water right permits on the Nestucca River, the combination of which allowed for impoundment at McGuire Reservoir and direct diversion from the river for municipal use. The permits allowed for storage of 9,800-acre-feet or 3,194 million gallons of water, plus withdrawal of 2,036 million gallons – or 6,250-acre-feet with no maximum rate.[vi]

Timber Management and Sustainability

During its first meeting of the year, January 18, 2000, the McMinnville Water and Light Commission listened to MBG’s Bill Davidson report about the proposed annual watershed timber sale. Commenting on the rising market for timber that year, he reminded the Commissioners of their direction to increase the timber harvest, temporarily, as a means to raise funds for upcoming expenditures relevant to the raising of McGuire Impounding Dam, repair work at Link Impounding Dam and other capital projects. The Commission agreed to the sale proposal of 5,850,000 board feet for an estimated revenue of $3,635,000. A few months later when reviewing upcoming timber harvest bid results, the Commission addressed the issue of Forest Products Harvest Tax required by the Oregon Department of Revenue by directing a requirement for bids received from 2001 forward to include proof of tax payment by the contract harvester. Continuing its role as stewards of McMinnville Water and Light’s watershed lands, the Commission approved an application for forest certification through the American Tree Farm System in August 2001, and in the following years, the utility received annual certifications for planting seedlings in logged areas of the watershed, which served to recognize management of its timber as a sustainable resource.[vii]

In May 2000, the Commission postponed the timber sale referred to as Wirth No. 3 until the following year due to falling timber prices. At the same meeting, it agreed to a request from Willamette Industries for a “good neighbor” contribution of $7,000 toward the repair of an unmaintained county road near McGuire Reservoir, which not only helped improve the road but also helped with access for fire protection mitigation efforts. In early 2001, after a discussion about the annual Watershed Forest Management Review, Bill Davidson reported an estimated 3,000,000 board feet in timber sales with projected revenue at $1,080,000. By March that year, the reforestation of the timber area harvested in 2000 was complete. The Commission subsequently approved estimated timbers sales of 3,100,000 board feet with estimated revenue of $1,100,000 in 2002; 3,400,000 board feet for an estimated $1,380,000 in 2003; 4,050,000 board feet and projected revenue of $1,700,000 in 2004; and 4,450,000 board feet with an estimated revenue is $2,315,000 in 2005.[viii]

The McGuire Reservoir Expansion Project

In early 2000, MSA’s David Leibbrandt informed the Commission that the McGuire Dam project passed a milestone, which involved the submission of a joint Fill Removal Wetlands Permit to the USACE and Oregon Division of State Lands. Preparing the permit involved documentation of secured water rights on the Nestucca River, confirmation from Oregon State Parks about the project’s exclusion from the Nestucca River Wild and Scenic Rivers Act, and attaining a cooperative agreement with BLM that enabled certain minor areas of that entity’s property to be inundated by the raised reservoir pool. The permit also facilitated required relocations of a section of the Nestucca River Highway, as well as a conditional use permit from Yamhill County. Finally, it contained the complicated Memorandum of Understanding and Waiver for Fish Passage with ODFW and the developing Agreement in Principle with Tillamook County on Dam Safety and Emergency Preparedness Issues. Leibbrandt and his team, including the utility’s staff, continued to work on developing a proposed program for wetlands mitigation associated with the reservoir raise. By April, the permit had reached the comment stage with regulators, and a public Department of Environmental Quality hearing scheduled for May 10 at McMinnville Water and Light headquarters.

In April of 2000, Leibbrandt reported on short- term emergency work involving repairs and rehabilitation of Link Impounding Dam, which resulted from a 1996 landslide and presented safety risks in terms of future vulnerability. A small sink hole had also appeared at the time of the 1996 emergency repairs and in late 1999, it reopened. Draining the reservoir during the winter months, crews anticipated making permanent repairs during dry summer weather. This activity required rehabilitation of the drain, modification of the drain gate with an upgraded operating system, and modification of the tower. The Commission approved Leibbrandt’s suggestions of issuing a letter of intent to Hydro Gate Corporation as the sole source for material, and creating the necessary sluice gate equipment shop drawings to move the project forward, saving four weeks of time. The next step was advertising for repair work bids.[ix]

The Commission heard the bid results for the Link Reservoir Impoundment Dam Emergency Landslide Repairs, Outlet Replacement and Drain Rehabilitation project in May, and awarded the $1,411,575 construction contract to James W. Fowler in June, after receiving confirmation of necessary permit approval from the USACE and the Oregon Department of Lands. As that project moved forward, final approval of the McGuire Dam Raise project permits loomed, and by December 2000, MSA’s David Leibbrandt reported that the project continued on track in terms of advertisement and bidding schedule. He recommended moving forward with the bidding process to shorten time spent between receiving the permit and beginning construction. The Commission approved an amendment to MSA’s agreement in July 2000, authorizing the firm to prepare the final design of the McGuire Dam Raise at a cost not to exceed $1,669,900. Besides the hurdles presented by the permitting process, the project required consideration of unique insurance. During its October 2000 meeting, Gary Eastland of Hagan Hamilton presented several options, including an Owners Protective Professional Indemnity Policy with a $10 million limit for an estimated premium of $54,120. Deliberating further, the Commission eventually approved the application at the estimated premium rate for the dam construction project.[x]

In January 2001, the utility issued a notice to interested contractors for a pre-bid meeting and field tour, with the objective of opening the bid proposals for the two-year construction project by April 6, 2001. After hearing Leibbrandt’s explanation of several items, including the permitting process discussed above, which complicated the construction timeline, the Commission authorized the preparation of the required notices and advertising for the RFPs. Shortly thereafter, the Commission received word that the long-awaited USACE permit was ready for signatures. The Commission received the fully executed permit on February 20, 2001; however, there was still one more permit hurdle to overcome. The Commission’s authorization of a $250,000 cash bond agreement covered the costs for a five-year wetland mitigation-monitoring period for the Chehalem Creek Offsite Wetlands Mitigation Project and satisfied the Oregon Division of State Lands security requirements relevant to the permit for the McGuire Reservoir Expansion Project. A special public hearing took place in July regarding a conservation easement on property near Gaston relevant to the Chehalem Creek Offsite Wetlands Mitigation Project, resulting in no objections and fulfilling the last step for the required mitigation process.[xi]

With the permits achieved, it was time to advertise the project for construction as planned, with bids opened in early April. At the same time, utility staff took the necessary steps to set up a hearing relevant to the Chehalem Mitigation Project. When April arrived, the Commission reviewed and rejected all bids as not meeting the best interests of the citizens of McMinnville. Time was marching on and the Commission faced a very real possibility that McMinnville’s water supply would soon fall short of consumer demand. Rising construction costs added to the pressure of completing the project sooner than later. Moving forward, the Commission authorized the placement of new advertisements using the existing documents with a three-year construction timeline and a new bid opening date in early May. The second round advertisement netted nine responding bidders and after careful consideration and review of the proposals, and Leibbrandt’s recommendation, the Commission awarded a $10,371,221 construction contract to John L. Jersey and Son, Inc. (Jersey). Executing the contract and issuing the notice to proceed in late May, the Commission also approved MSA’s proposal for contract administration of the project, with Leibbrandt in the lead role. Work began on the project soon thereafter, and the Commission approved an estimated $43,000 – $70,000 contract modification with Jersey for excavation work on the spillway portion of the job during its September 2001 meeting. Considering additional agreements with Jersey for constructing a turn-around at the intersection of Old Bald Mountain and AB Tie roads for $9,776.26; and manufacturing and stockpiling 10,000 cubic yards of crushed rock for $117,500, the Commission approved both expenditures in October. The later expenditure solved two issues: a safety concern regarding what to do with fractured rock at the project site, and obtaining a stockpile of rock in the watershed area.

Water Superintendent Abrams provided periodic updates on the status of the McGuire project, including information about wetlands mitigation at the chute and at the Chehalem site. In December 2003, Abrams approached the Commission with information about an emergency warning radio system for McGuire, requesting and receiving approval for its purchase, installation and a one-year maintenance agreement with the National Oceanic and Atmospheric Administration (NOAA). During the same meeting, the Commission adopted a Memorandum of Agreement for NOAA Weather Radio Broadcasting Services, as introduced by Commission Attorney Haugeberg.

Previously, in March of 2001, the Commission learned that the Tillamook County Commission had concerns about the reservoir project. Three months later, it received a copy of a complaint filed by Tillamook County against the USACE relevant to a permit issued to McMinnville Water and Light for the McGuire Reservoir Expansion Project. The utility retained legal counsel to intervene on the Commission’s behalf, and if necessary, to prepare the necessary defense documents in the best interest of the utility. In May 2004, Commission Attorney Haugeberg and Water Superintendent Abrams attended a Tillamook County Commission meeting and returned with officially signed copies of two intergovernmental agreements: one with Tillamook County and one with the Tillamook County Emergency Communications District.[xii]

Finally, in October 2004, after more than two decades of planning and overcoming environmental, regulatory, legal and financial obstacles, McMinnville Water and Light began impounding water in the McGuire Reservoir to the 1,865-foot mark, reaching full capacity at 3.25 billion gallons. Key project highlights of the McGuire Reservoir Expansion project included a 30-foot earth and rockfill dam raise with seismic upgrades, 160,000 cubic yards of earth and rock material placement, construction of new spillway, headworks and outlet facilities, and 1,200 feet of large diameter welded steel piping. The project also involved three miles of roadway relocation, landslide mitigation efforts, on and off-site wetlands construction and mitigation, fish passage and screen improvements, and automated control systems with dam safety enhancements.

“The McGuire Reservoir raising project featured engineering that considered seismic issues and added materials to make the structure sound in the event of an earthquake,” commented Commission Chair Tankersley. “The utility installed a siren alert in case the reservoir breaks, allowing for plenty of warning. It also dedicated extra water storage for the ability to cool the water in the Nestucca River during low flow periods. A syphon tower opens at different levels for drawing upon reservoir water and releasing it into the river, helping the fish and other wildlife during warm summer months.”

McMinnville Water and Light overcame numerous obstacles while undertaking the McGuire project, which presented many unique issues. For example, ironically, no utility served the McGuire Reservoir area, which meant no access to electricity. Instead, the utility used photocells and a backup generator for power. The electric subcontractor received an engineering award recognizing the unique work on the controls for these devices on the project. Water Superintendent Abrams co-authored an article about the project, which appeared in the official magazine of the Pacific Northwest Section of the American Water Works Association in late 2004, and in 2006 the project won the first ever Excellence in Engineering Award for Large Project from the same organization. A dedication ceremony took place on September 15, 2005.[xiii]

Even before the completion of the McGuire Reservoir project, McMinnville Water and Light staff and the Commission began looking to future water options. In January 2004, Water Superintendent Eric Abrams, Finance Director Roger Mondahl, and Financial Analyst Bill Clouter presented information examining the financial future of the water system and capital improvements necessary to continue to supply the historic quality and quantity of water to city residents and businesses. In December 2004, the Commission reviewed a request by BLM that the utility provide a plan of action on its application for a permit in the Walker Creek area. Authorizing a modification of the permit application for impoundment and adding a gauging station, the Commission also requested Mason, Bruce and Girard to submit a proposed scope of work for developing water rights along Walker Creek. In the meantime, utility staff prepared and negotiated easements for a temporary construction permit, allowing BLM to replace a culvert with a bridge to assist fish passage at the confluence of Walker Creek and the Nestucca River. Biologist Mike Bonoff, of Mason, Bruce and Girard, conducted the work necessary to establish the Walker Creek gauging station in late 2005, bringing the total to three gauging stations in the utility’s watershed. River Measurement, Inc., performed equipment upgrades, annual maintenance and operation of the stations, located at Walker Creek, Haskins Creek and the Nestucca River.[xiv]

McMinnville Water and Light: Expanding Infrastructure and Ensuring Water Quality

Earlier, in 2001, the Commission awarded a $661,465.32 contract to Kizer Excavation for the Baker Creek Road 24-Inch Water Transmission Main and Road Improvement Project and the contractor completed the project on time. Later that year, Water Superintendent Abrams reviewed the “Water Distribution System Model Update and Three Mile Lane Hydraulic Analysis” report with the Commission, showing them a working map that illustrated replaced and upgraded water lines from the Capital Improvement Plan as well as options for improving water flow to Three Mile Lane. Abrams explained that the utility would not be able to achieve the high goal of 4,500 gallons per minute throughout the system until the completion of other planned improvement projects in McMinnville. These projects included working with ODOT to widen Three Mile Lane, which involved relocating power lines and removing 32 beloved trees. The trees witnessed many improvements over the years, including McMinnville Water and Light crews extending power lines for three miles out the old road to Dayton in 1914 and the construction of the steel truss bridge crossing the Yamhill River the same year.

Subsequent to removing the trees, the Commission awarded an $889,940 contract to Clackamas Construction for the 24-Inch Water Main Transmission Extension Project down Norton Lane to Three Mile Lane. The project involved obtaining a permit from the USACE and the Division of State Lands for crossing the Yamhill River, which the construction company completed in late 2004. Although issues concerning extra casing in the bore and receiving pits caused delays and costs overruns, by January 2005, the contractor had completed the 10,000-foot pipeline that comprised the extension project, which dramatically improved the fire hydrant flows for the Three Mile Lane area and provided the growing residential and commercial areas with good water. After replacing and adding the water mains discussed above, and several other pipelines in the area, Water Superintendent Abrams approached the Commission requesting abandonment of the old 16-inch steel line, which ran from the water service reservoirs on Fox Ridge Road to Memorial Elementary School. The Commission authorized the abandonment through Resolution 2005-2, with the understanding that the Mayor and Clerk could sign terminations of easements for individual tracts of property as requested.[xv]

The Commission continued its practice of power conservation measures, including the Conservation Loan Program, and its participation in the OURCA Intergovernmental Agency, approving an amended agreement that added Forest Grove Light and Power as a member and adjusted the cost allocation formula between all members. A discussion about negotiations with BPA for the purchase of the “East Mac 1 Substation” as well as some equipment associated with the “East Mac 2 Substation”, located at NE Fifth and Oregon streets, took place in February 2000. General Manager Harshman explained the utility’s effort to purchase all BPA facilities with low voltage points of delivery before BPA began charging for the service, and the amount under discussion would pay itself off over a five-year span with a reduction in BPA charges. East Mac 1 and 2 were the last of those, and the successful purchase eliminated the anticipated increase in delivery charges. On June 22, 2000, the Commission voted unanimously to approve Resolution 2000-1, authorizing the $660,000 acquisition of approximately 1.63 acres, substation facilities and equipment from BPA, with the expectation to pay off the purchase within four to five years.

Meeting the Challenges of Power Demand Growth

With a goal of alleviating the power demand emanating from the incredible growth of the 1990s, the Commission began planning for a new substation on the west side of the city. As part of the process in early 2000, it awarded a contract to GE-Prolec for a powerful $458,870 transformer with a guaranteed Reinhausen brand million-contact tap changer. The tap changer regulated the output voltage of the transformer. In March, Electric Distribution Superintendent Jim Holland reported that Consulting Engineer Rex Brown’s work on the specifications and drawings for the Baker Creek Substation was almost ready for requesting construction bids, and the Commission authorized staff to place the appropriate advertisements. By May, it awarded a $728,662 construction contract to Christenson Electric for the new Baker Creek Road Substation. As part of the construction process, BPA had to break the Walnut City tap line to create the addition of a new termination point to feed the new substation, with an estimated cost of $135,000. The Commission accepted the price estimate and signed Agreement Number 00TX30392 with BPA to power the new substation. In October, Electric Distribution Superintendent Holland reported an estimated construction completion date of January 2001.[xvi]

Power costs continued to rise. Due to BPA contract requirements, McMinnville Water and Light had to purchase, and place online, an average of 21 megawatts from the power market annually, beginning in November. In April 2000, Resource Manager Dwayne Jackson reported the solicited bid results for a six-megawatt block of power came in too high. During the May 4 meeting, Jackson reported that the prices had increased yet again and proposed pursuit of the requisite six-megawatts from Enron for $36.65 as the lowest and best bid – more than double the first block of power purchased in 1997 at $16. The Commission agreed to the power block purchase for one year only. Previously in 1999, the utility entered into a master contract with Enron, so the purchase only required a letter of confirmation from Mayor Gormley to complete the transaction. Power scheduling services also saw a sharp increase, with EWEB requesting nearly double the fee, which raised the expense from $4,160 to $8,000 per month. By the close of 2000, the bulk power market had climbed sharply due to issues with regional power on the West Coast and, coupled with weather conditions among other issues. This led General Manager Harshman to express the need for flexibility in the utility’s contracts with BPA.[xvii]

Paul O’Neal of BPA attended the September 2000 meeting of the McMinnville Water and Light Commission. One subject of conversation involved a change to the BPA’s conservation program funding. Instead of funding the program outright, the revised conservation program operated on renewable discounts based on the utility’s energy charge. The discounts would now serve as the funding source for the utility’s conservation programming instead of direct funding allocated for that purpose. Addressing the volatile power market, O’Neal explained that the BPA implemented a Cost Recovery Adjustment Clause (CRAC), which worked with the agency’s financial reserve. When that reserve fell below a defined threshold, the agency applied a CRAC surcharge to existing rates to stabilize the funds. Overall, the major topic of discussion was a draft ten-year power sales contract running from September 2001 through September 2011. The previous contract term (executed in 1981) was 20 years and provided for delivered power; however, BPA no longer offered contracts longer than ten years and the agency had reorganized to offer two different business lines: Power Sales and Transmission.

This change resulted in the necessity to create two new contracts. Ultimately, the Commission approved and adopted Resolution 2000-3 authorizing the ten-year contract extension of its current Transmission Contract with BPA; however, staff had more work to do on the complicated Power Sales Contract and accompanying Firm Resources Exhibit before finalizing the renewal agreement. As the October 31 deadline approached, although negotiations were still underway with BPA on the Firm Resources Exhibit, General Manager Harshman and Power Resource Manager Jackson brought forth the proposed Power Sales Contract for approval by the Commission. Ultimately, the Commission voted unanimously to pass Resolution 2000-4, authorizing the approval of the Actual Partial Service-Simple Power Sales Agreement with a five-year term (2001-2006).

McMinnville Water and Light’s Contract Amendments and Financial Strategies

In December 2000, due to the rapidly increasing bulk power market, Harshman recommended that the Commission take action to amend two Surplus Firm Power Sale Agreement contracts (98PB-10274 and 98PB-10310). The requested action created flexibility with the utility’s cash management while it faced the pressure of extremely high power prices. In essence, the contract modifications took the excessive power costs before October 1, 2001 and refinanced them over the term of the surplus firm contracts. The Commission could re-examine its position in nine months, measuring its liability with the option at that time of either paying out of cash or going forward with refinancing at the federal rate. Either way, the Commission faced a rate hike immediately and another in the summer of 2001 and it approved Amendment 3 of Surplus Firm Power Sale Agreement Contract 98PB-10274 through Resolution 2000-5, and Surplus Firm Power Sale Agreement Contract 98PB-10310 through Resolution 2000-6.

The Commission met in emergency session, on January 12, 2001, to address an email received by Power Resource Manager Jackson, late in the afternoon of the January 11 from BPA’s Paul O’Neal. The email disclosed a BPA offer that expired at the close of business on January 12. General Manager Harshman and the Commission discussed the forward pricing model, which showed a risk as high as $20 million. Fortunately, during the first couple of weeks in January the pricing model came down to about $15 or $16 million, which prompted a discussion with the BPA regarding different financial arrangements or other ways to mitigate the issue. That conversation resulted in the receipt of the email from BPA, which expressed a “firm offer to those OURCA members that signed pre-2001 Mid-C– index contracts”. The offer, as presented to five OURCA member utilities (Tillamook PUD, Northern Wasco PUD, Columbia River PUD, Clatskanie PUD and McMinnville Water and Light), allowed them to enter into a contract cap arrangement and an amendment to their indexed power product contracts for a $500,000 fee split between them. McMinnville Water and Light’s portion of the cap-related fee was $150,000. Harshman encouraged the Commission to approve the expenditure, as there was still a huge risk of escalating costs substantially higher than the cap offer. He further relayed the strategy for the utility to buy its way down to less financial risk. After discussing and considering the ramifications presented, the Commission passed Resolution 2001-1 authorizing Amendment Number 4 to the Surplus Firm Power Sale Agreement, Contract No. 98PB-I0274, with BPA for the purchase and sale of electric energy.[xviii]

Another significant contract modification came with BPA’s Demand Exchange Program. Accepted by several regional utilities, the Demand Exchange Program worked as a mechanism where customers shut down operations instead of having BPA purchase additional power to meet the load requirement. After several months of working through the complex details of program implementation, power sales and contract modification, General Manager Harshman brought two Demand Exchange Agreements to the Commission in February 2001: the first, between the utility and BPA, and the second with CSRM, McMinnville Water and Light’s biggest customer and largest consumer of power. The Commission passed both agreements via Resolutions 2001-3 and 2001-4, with the latter agreement placing the demand power risk on CSRM’s shoulders.

Utilities across the region found it necessary to pass on rising power costs to their customers several times during the first few years of the new century. General Manager Harshman addressed the issue with the Commission by sharing rate increases implemented by other utilities and proposing a 19.8 percent hike in electric rates to cover the estimated $2.8 million escalation in annual power costs for McMinnville Water and Light. In response, the Commission set a public hearing for February 20, 2001. In the meantime, changes also took place with the existing agreement between the Eugene Water and Electric Board (EWEB) and McMinnville Water and Light – and in this instance, it allowed the Commission to approve a lowering of its scheduling fee to five percent. This fee was applicable to expenditures above $500,000 in power cost savings, retroactive to January 1, 2001.[xix]

During the February 20, 2001 public hearing for electric rates, General Manager Harshman presented information behind the request to raise the rates for electricity, including details about how a significant rise in regional power costs affected the utility. Outlining the proposed rate structure, he explained that the anticipated increase reflected the necessary income for maintenance and operational forecasts as well as adequate reserve contingencies. Members of the public in attendance brought up concerns about low-income customers’ ability to pay higher electric bills and Harshman indicated a plan to strengthen the emergency assistance program. Members of the Linfield community spoke in support of the rate increase; however, they presented concerns surrounding the rates as applied to athletic field lighting. They remarked about the benefits the extra lighting brought to the community in educational and youth programs. They also requested the utility to treat residential halls as actual residences subject to residential rates. After adjourning the public hearing, the Commission approached the utility’s staff about modifying the draft rate proposal to address the issues raised by community members. Returning to the issue in March, the Commission adopted a new rate structure, which included the removal of athletic field lighting under demand charging and the application of residential rates to residential hall; and separate summer (May through October) and winter rates (November through April) for the first time.

McMinnville Water and Light incurred costs in building and maintaining the infrastructure necessary to deliver power and water to residences and commercial enterprises in its service areas. To pay for this endeavor, during the first 20 years of the twenty-first century, the Commission authorized power rate increases a total of ten times, including a nine percent increase in 2002; annual increases between 2010 and 2013; and annual increases between 2015 and 2019. Water rates increased by 10 percent initially in 2002, then in annual increments between 2004 and 2008; and between 2010 and 2012; and the years 2018 and 2019 (see Appendix L). The Commission designated the water rate increases during the five years spanning 2004 through 2008 as capital-improvement-project funds for expanding the capacity of the Scott Water Treatment Plant. The designation of funds during that five-year period equalized rates to cost levels associated with bringing water to homes and businesses, as well as overcoming a shortfall in projected timber revenue, which helped to pay for system upgrades and maintenance.[xx]

In a letter to the President of the United States, BPA Administrator Stephen J. Wright wrote, “We couldn’t increase the amount of water in the Columbia River Basin, nor could we quickly increase the amount of power available on the market. We could, however, challenge our customers to develop their own power supply or to further reduce their load on the agency through curtailments and conservation.” Declaring a power emergency in early April 2001, the BPA requested its public power customers to curtail their load by ten percent or face the alternative Cost Recovery Adjustment Clause and a 250 percent power bill increase. General Manager Harshman explained how the utility could achieve the ten percent reduction, resulting in the passage of Resolution 2001-6, which provided the vehicle for a rate mitigation agreement between McMinnville Water and Light and BPA. Also passing was Resolution 2001-7, which authorized a voluntary load reduction agreement.[xxi]

Addressing the subject of rising power costs and the need for conservation, the Commission assigned Commissioner Zinda to work with the utility’s staff on ways to communicate with customers about the seriousness of the issue. In November, General Manager Harshman distributed a recent comparison of McMinnville Water and Light’s rates to other utilities in Oregon and a proposal to solicit a cost of service study for further comparisons and other available research on the subject. After requesting proposals for a cost of service study, Harshman recommended versUtility Consultants, with Bill Clouter representing the firm. Clouter prepared a cost of service model for McMinnville Water and Light’s electric rates under the versUtility contract, and the utility later retained him as its Financial Analyst to focus on rate and tariff issues.[xxii]

It was during this time that McMinnville Water and Light began exploring the idea of net metering and interconnection activities. Net metering measures the difference between electricity purchased from a utility and electricity generated through an entity’s own solar, wind, micro-hydro or other acceptable renewable generating equipment. Interconnection refers to not only the technical aspects and equipment required to connect resources to a transmission system but also a requirement for a utility’s participation in the wholesale market. As usual, these actions took place several years before regulations made it mandatory to consider and adopt policies relevant to renewable energy use. During its August 21, 2001 meeting, Lucien Gunderman approached the Commission with plans for a proposed hydroelectric generation plant on his Baker Creek Road property known as Crown Hill Farms. General Manager Harshman expressed support for the project and by December that year, the utility’s work in this area involved BPA, the Oregon Department of Energy and Northwest Oregon Resource Conservation and Development in the process of defining the net metering policy. On April 16, 2002, the utility entered into a net metering contract with Crown Hill Farms, the first of its kind for the utility. Previously, in the summer of 2001, Riverbend Landfill approached McMinnville Water and Light regarding the possibility of converting captured landfill gas into energy. Several years later, SCS Engineering performed a gas stream study of the landfill for the Commission, which resulted in power purchase negotiations with Waste Management Corporation for renewable energy produced by Riverbend Landfill in 2007. During a public hearing held in August 2008, the Commission adopted Interconnection Rules for Net Metering, a form of Interconnection Agreement for Net Metering and a form of Net Metering Application.[xxiii]

Advancing Efficiency and Technology: McMinnville Water and Light’s Strategic Upgrades in the Early 2000s

In July 2001, Jim Lewis, of J Lewis and Associates, began a benchmark study of McMinnville Water and Light’s operations. At its meeting the following month, Lewis presented the Multi-Dimensional Benchmarking Report on McMinnville Water and Light’s distribution system to the Commission, including related costs and system performance. Ultimately, he concluded that out of 129 utilities studied, McMinnville Water and Light was clearly in the top five.[xxiv]

The Commission began 2002 passing a couple of resolutions relevant to agreements with BPA. The first, an agreement in place since 1996, related to network integration for transmission services. Passing Resolution 2002-1, the Commission extended the agreement for 30 years. The second resolution contained a batch of Priest Rapids Project agreements with Grant County PUD, which dated back to the 1950s, including the Reasonable Portion Power Sales Contract, the Product Sales Contract and the Exchange Agreement. The Commission passed the three of these through Resolution 2002-2.[xxv]

A Commission discussion about the utility’s SCADA expenditures, originally implemented in 1996, surrounded three elements in October 2000: replacing the telephone system; replacing and strengthening the Water Treatment Plant network; and tying together the substations. The recently added fiber network would serve as a backbone for all three elements. Agreeing with General Manager Harshman about improving the SCADA system, the Commission authorized the utility’s staff to write RFPs for the projects. Following up, General Manager Harshman recommended an Ethernet based radio link system to serve as the foundation for SCADA applications, connecting the headquarters office with not only the Water Treatment Plant, but also to McGuire and Link Impoundment Dams. The Commission approved the purchase of the system from Wireless Professional Communications Services for $41,377. Other system upgrades took place during the early years of the new century, including wireless Ethernet bridges for the network between the utility’s headquarters and the McGuire Dam site. The utility also incorporated software with new meter reading devices that not only gathered power usage data from residents and commercial entities, but also input that data into McMinnville Water and Light’s billing system. This affected the front office, which underwent changes to accommodate new machines and software.

“The conversion from the old software system to the new system was a challenging time for the front office,” recalled Customer Service Supervisor Kathy Danforth, who joined the utility in 1994. “We went from a green screen system to a live, web-based system. There was a lot to learn with the software changes; it was a huge learning curve and a big change in office technology. I really like it now, but it was a challenge at the time.”[xxvi]

Powering Progress: McMinnville Water and Light’s Infrastructure Developments

A presentation by Stanley Consultants covering a Telecommunications Feasibility Study resulted in a discussion about conceptual developments for McMinnville’s fiber optic network during a joint meeting between the McMinnville City Council and the Water and Light Commission in February 2000. This discussion continued on April 18, with members of the public representing commercial and community interests during another joint City Council and Commission meeting held at the Yamhill County Education Service District. Concerns raised included public versus private free enterprise, relevant First Amendment issues, costs, revenue and strengthening the community tax base, as well as the capacity of McMinnville Water and Light to operate a telecommunications system under its Charter. In May, while considering various aspects of its 2000-2001 budget, the Commission authorized staff to approach potential McMinnville Telecommunication System fiber tenants to determine the type of system they are interested in and the amount they would be willing to pay to lease it.

During a joint December 19, 2000 meeting of McMinnville’s City Council and the Water and Light Commission, General Manager Harshman relayed interest by the utility in pursuing a relationship with the Northwest Open Access Network (NoaNet). Previously, in September, Ben Doty of NoaNet visited the Commission and presented information about the BPA transmission grid, which included fiber optic cable. He shared information about NoaNet’s 20-year-mimimum agreement with BPA to operate and manage four of the surplus fibers in it system. In turn, NoaNet made the fiber available to its primary members: electric and water utilities. NoaNet’s purpose, as described by Doty, was providing cost-based electronic transport to rural Northwest communities and he explained how some member utilities used the fiber in their respective communities. Doty also attended the December joint meeting, where a discussion about the use of McMinnville’s fiber optic network ensued. Ultimately, Harshman’s concern during the joint meeting stemmed from the fast-approaching expiration date (December 31, 2000) of the Fiber Optic Telecommunications Agreement between the City of McMinnville and the utility. City Attorney Candace Haines and Commission Attorney Haugeberg distributed and explained Letter Agreement 2, which provided amendments to certain sections of the Fiber Optic Telecommunications Agreement. After further discussion between the Councilors and Commissioners covering time constraints, preparing a business plan, television and the resulting look of the network, both the Council and Commission approved Letter Agreement 2, extending the time for six months with an expiration date of June 30, 2001. Meeting in its regular session later in the evening of December 19, the Commission voted to join NoaNet as a member and requested staff to gather further input from local business experts.

Meanwhile, a group of interested citizens, including Frank Nelson, Dan Cochran and Stuart Pitman, formed the McMinnville Telecommunications Committee (MTC) back in 2002. MTC applied for and received a grant through the Mid-Willamette Valley Council of Governments (COG) for a feasibility analysis of broadband telecommunications improvements in McMinnville. Together with City Councilor Richard Windle, MTC approached McMinnville Water and Light about the possibility of administering the grant in early 2003. The Commission expressed interest in the study and offered support and cooperation through a letter to COG.[xxvii]

In January 2003, after fifteen years as General Manager, John Harshman announced plans to retire as of April 1. Commissioner Bull agreed to assist Harshman and Commission Clerk Nolan with drafting an advertisement for a new general manager, and in February, Commissioners Bull and Zinda agreed to form the General Manager Search Committee, with Zinda serving as Chair. By August, after receiving numerous applications and narrowing those down for interviews, the Search Committee recommended the hiring of Paul Elias effective September 2, 2003. Previously that April, Mike Keyes joined the Commission after the resignation of Dale Moore, who moved away from the area.[xxviii]

McMinnville Telecommunications Committee representatives provided periodic reports to the Commission, with Stuart Pitman presenting information from the municipal broadband feasibility study in August 2004. The discussion of the community broadband issue continued in October, with General Manager Elias and Information Technology Manager Mike Polzen providing information, including a comparison of different digital delivery systems and a range of options that could be available for the McMinnville Water and Light fiber network. The Commission asked members of the public in attendance if they wished to comment, and heard from Charles Howell of MTC, Kevin Bell of Comcast, Patrick Fuchs of OnlineMac, and Nancy Wills and Rommel Raj of Valley Internet. The discussion focused on ways to utilize the fiber network and the Commission directed General Manager Elias to develop tariffs, customer connection requirements, and operating procedures for providing limited carrier service on the existing McMinnville Water and Light fiber system.

In early 2005, General Manager Elias gave the Commission an overview of the McMinnville Water and Light Fiber Optic Business Plan with the understanding that it was still in progress and under legal review. By April, after reviewing the business plan, the Commission approved and authorized it, establishing the elements necessary for licensing the use of dark fiber cable, which in turn provided the McMinnville community with access to advanced, high bandwidth services. The business plan included a Dark Fiber License Rate Schedule, License Agreement for Use of Dark Fiber Optic Cable and a Fiber Extension Agreement. Pacific Wave Communications, Yamhill Public Works and Oregon Lithoprint became the first, second and third entities to obtain Fiber Extension Agreements from McMinnville Water and Light. The dark fiber route extensions traveled from the Community Center at Seventh and Ford, west to Evans and south on Evans to Fourth Street, then the location of Oregon Lithoprint. Patrick Fuchs later told the Commission how impressed he was with the utility’s handling of the dark fiber project.[xxix]

Previously, the Commission awarded a $50,000 engineering services contract to Rex D. Brown, Consulting Engineer, Inc. (Brown Consulting), for an Electric System Planning Study in 2004. Completing the work by mid-2005, Erik Kysar, of Brown Consulting, presented the major points of the Electric System Planning Study. After the presentation, General Manager Elias noted that while the system was in good shape and the utility expected no substantial increase in costs relevant to maintenance, challenges came from growth and the age of the BPA substations, which required some upgrading work. In late 2005, the Commission authorized another engineering services contract with Brown Consulting as a continuation of the earlier study with the firm designing the rebuild of the East McMinnville 2 Substation.[xxx]

Navigating Challenges and Seizing Opportunities

Resource Manager Dwayne Jackson officially retired on February 28, 2002. He joined McMinnville Water and Light as a Meter Reader on September 5, 1972 and worked his way through several roles, including Water Service Mechanic, Groundman, Chief Operator and Operations Supervisor before becoming the utility’s Resource Manager on September 1, 1999. In addition, like many other employees, Jackson’s dedication saw him staying on a bit past his retirement to help with the transition to his replacement, Rick Rozanski. He completed his final day of work on October 17, 2002. Another long-time employee, Rozanski joined the utility on December 1, 1984 as an Operator / Dispatcher. He also worked through several roles, including Plant Operator and Water / Electric Technician 3 before beginning his new role as Acting Resource Manager on March 1, 2002. He assumed the role of Resource Manager, with a slight title change to Power Resource Manager on September 16, 2002. Jackson and Rozanski demonstrate the longevity and dedication of McMinnville Water and Light employees.[xxxi]

During the Commission’s October 2003 meeting, General Manager Elias reported that BPA increased its wholesale power rates by 2.2 percent, which equated to $317,000 annually. Anticipating continued rising BPA rates, utility staff suggested approaching BPA with an offer to amend the power sales and industrial customer contracts, set to expire on September 30, 2006, and extend them through September 30, 2011, the expiration date of guaranteed low power agreements with BPA. After a nod of agreement from BPA and commercial customers CSRM and Air Liquide America, the Commission approved amending the agreements and authorized them through Resolutions 2004-9, 2004-10 and 2004-11. On December 21, 2004, Power Resource Manager Rick Rozanski made a presentation to the Commission regarding topics of transmission capacity, renewables, the power market and BPA. Closing out the year, in the typical McMinnville Water and Light fashion of foresight, the Commission began thinking about seeking new resources for future load growth.

In June 2005, after approving a revision to the Power Sales Agreement with BPA, the Commission addressed an amendment to the EWEB Power Scheduling and Service Agreement, lowering the fixed monthly fee from $8,000 to $3, 500 per month. At the same meeting, Power Resource Manager Rozanski updated the Commission on various issues including BPA’s rates, power function review, fish costs, regional dialogue, allocation, contract lock, and the State of Oregon Renewable Energy Action Plan. At the close of 2005, Rozanski brought forth a proposed BPA Service and Exchange Agreement and a similar services agreement proposed by EWEB, which offered to adjust its rate to that offered by BPA for scheduling power. The Commission opted for an amendment to the EWEB Scheduling Agreement to reflect the necessary changes.[xxxii]

McMinnville Water and Light’s Strategic Expansion: The Scott Water Treatment Plant Project and More

With the completion of several capital projects, including water main extensions and the raising of McGuire Reservoir, the Commission and utility staff turned their attention to the Scott Water Treatment Plant. In April 2005, General Manager Elias and Water Superintendent Abrams presented information to the Commission relevant to expanding and retrofitting the WTP and the issues surrounding the proposed project. With a target completion date of 2009, utility staff proposed a selection process plan for both construction and engineering design firms, with the goal of retaining an engineer design firm during the second and third quarters of 2005. In May 2005, the Commission heard a presentation by General Manager Elias and utility staff regarding the five-year capital improvement plan, which involved raising enough funds to pay for the WTP project and to replace the 16-inch water transmission main from the WTP to the service reservoirs on Fox Ridge Road. In June, after holding a public hearing, the Commission authorized the second of five water rate hikes to fund the WTP through Resolution 2005-7.

After devoting nearly six years of service to the McMinnville Water and Light Commission, Vivian Bull resigned her position due to retirement, effective July 2005. Nancy Carlton filled the last six months of Bull’s unexpired term, through December 2006.

During its July 19, 2005 meeting, the Commission authorized an $8,200 consulting services agreement with Robert E. Meyer to assist in the process of selecting an engineering design firm for the WTP project by the end of the year. In December, General Manager Elias distributed the review and rating results by the selection committee (consisting of Mayor Gormley and Commissioner Keyes) and the choice of CH2M Hill as the highest-ranking proposer. With concurrence of the selection coming from Elias and Finance Director Mondahl, the Commission accepted CH2M Hill as the engineering design firm and directed utility staff to move forward with the contract negotiation phase.

With an eye toward project financing, the Commission once again turned to the watershed and its sustainable timber harvest. Mason Bruce and Girard’s Bill Davidson presented his annual report on the state of the utility’s forest management activities during the Commission’s January 2006 meeting, bringing forth an estimated timber sales volume for that year of 3,650,000 board feet with estimated revenue totaling $1,850,000.

Economic Development Initiatives and Water System Expansion in McMinnville

In February 2006, MBG’s Mike Bonoff delivered the scope of work necessary for the installation of a stream gauging station on Walker Creek and received Commission authorization to conduct the task. Meanwhile General Manager Elias began a discussion with the Commission about the development of a Zone 2 water service level on McMinnville’s west side. During a special workshop meeting, held on April 13, 2006, the discussion surrounded the issues of possible development of new policies relating to Zone 2 service, allocation and recovery of associated expenses (capital outlay, operations and maintenance). A review and prioritization of the capital construction schedule also took place during the workshop. Existing policies under consideration included extending water service, construction of infrastructure to enable pressurized service to Zone 2, future growth considerations, easement and rights of way for service extensions and the costs associated with operations and maintenance. A review of McMinnville’s current urban growth boundary (UGB) showed 250 acres within the city already situated in the designated Zone 2 area, with 350 additional acres outside the city UGB, as well as a possible Zone 3 area for future expansion. Commissioners and staff also reviewed potential dwelling and population numbers as part of examining average and maximum demands for water.

Water Superintendent Abrams presented several options for Zone 2 service, which included at least one new reservoir, pumps and additional backup generation for an estimated cost of $3.4 million and annual operating and maintenance expenses of $20,000. Financial Analyst Bill Clouter discussed an economic and financial forecast, which indicated the municipal utility could continue planned capital projects out of projected cash flow, including an estimated $5.2 million for Zone 2 development costs. Ultimately, the workshop resulted in direction by the Commission for staff to prepare further engineering analysis for a future Zone 3, and to locate a knowledgeable consultant for further conversations relevant to extending water services. Holding a special meeting in June, the Commission heard a presentation by Randy Goff of HDR Engineering, which defined system development charges (SDCs), their use, financial and legal considerations and options available to the utility.[xxxiii]

In 2004, a partnership formed between the City of McMinnville, McMinnville Water and Light, McMinnville Industrial Promotions, the McMinnville Chamber of Commerce and local businesses, which eventually became the McMinnville Economic Development Partnership (MEDP) with a guiding mission to advance strategies that respond to the needs of McMinnville’s traded-sector businesses. This applied to any company creating goods or services for use outside the local region and, in turn, brought good paying jobs and new money into the community. Simply stated, MEDP’s main purpose encompassed continued development of the city’s economic vitality. In the spring of 2006, the McMinnville Water and Light Commission approved an annual budget allocation of $35,000 to support MEDP, with the initial funds helping to hire an executive director whose role would focus on business recruitment, retention and expansion in McMinnville. Jody Christensen became MEDP’s first executive director in September 2006.[xxxiv]

Attending the April 18, 2006 Commission meeting, CH2M Hill presented its scope of work for water system improvements and the WTP expansion project. Members of the CH2M Hill team (Bob Fuller, Craig Massie, and Paul Berg) culminated the meeting with a Water System Improvements Project presentation. Shortly thereafter, the Commission approved and authorized a contract with CH2M Hill, through Resolution 2006-1, for water project engineering services. During a public hearing on June 20, 2006, the Commission considered the third of five water rate increases to pay for future water delivery to McMinnville’s residents and commercial enterprises. Hearing no objections the Commission authorized the rate hike (see Appendix L).

Continued discussions about water services took place over the late summer months of 2006. The Commission had enacted a moratorium on extending water services outside the city limits of McMinnville over twenty years earlier, on February 17, 1987. On August 2, 2006, through Resolution 2006-12, the Commission approved a revision to the moratorium making it an ongoing McMinnville Water and Light policy. In November 2006, during a special meeting about water service to the west side of town, Commissioners renewed their discussion about needed capital infrastructure investments for Zone 2 and expanded ability to supply treated water to utility customers. Manager of Engineering Services, Gail Shaw, outlined the challenges in providing water service to the west hills from the utility’s gravity-fed system without added pressure to push the water uphill. Then the Commission discussed the financial considerations to bring a pressurized system to fruition. One such consideration involved the use of a Local Improvement District. In Oregon, a Local Improvement District allows municipalities to assess a specific capital cost to identified properties where capital improvements are necessary.[xxxv]

Previously, Power Resource Manager Rick Rozanski spoke to the Commission about budgetary changes beginning with Federal fiscal year 2006, where Power Marketing Administrations (PMAs) transitioned to sales at market rates instead of cost. This had a big impact on the utility, which purchased most of its power from BPA a PMA. During a meeting held in June 2006, Rozanski updated the Commission on power supply issues in the region and provided information about the BPA’s Environmentally Preferred Product (EPP). Rozanski explained that the EPP product offering was a part of the BPA Conservation Rate Credit Program (formerly the Conservation and Renewables Discount Program). General Manager Elias recommended making a commitment to BPA relevant to EPP, which resulted in the Commission authorizing staff to notify BPA of its intent to acquire 3 megawatts of their Environmentally Preferred Product. On August 2, 2006, Rozanski told the Commission that approximately 1.3 megawatts of the EPP purchase was eligible for funding with rate credit dollars. Further elucidating on the issues and options associated with renewable power, Rozanski explained the need for the utility to fund the remaining 1.7 megawatts to achieve the full 3-megawatt purchase of EPP. Two years later, in June 2008, Rozanski recommended and the Commission approved the purchase of three average megawatts of EPP for BPA contract year 2009 requesting $440,000 in funding through the Conservation Rate Credit program and using utility dollars, when needed, to maintain the average three megawatts of EPP. Next, utility staff established an account with the Western Renewable Energy Generation Information System (WREGIS) for EPP purchases. Shortly thereafter, BPA registered as an account holder with WREGIS to help customers meet their Renewable Portfolio Standards (RPS) compliance goals. BPA’s action resulted in a revision to Exhibit A of the Actual Partial Service-Simple Power Sale Agreement Contract between the agency and McMinnville Water and Light, authorized by the Commission through Resolution 2008-13 on October 21, 2008. The authorization allowed BPA to transfer renewable energy certificates to WREGIS for the utility.[xxxvi]

In July 2006, the Commission began review of five new standards contained in the Public Utilities Regulatory Policy Act (PURPA). Falling under section 111(d), as part of the Energy Policy Act of 2005, the five new standards included net metering, fuel sources, fossil fuel generation, time-based metering and communications (“smart metering”), and interconnection. As passed by Congress, PURPA changed US energy policy and provided tax incentives and loan guarantees to programs that shifted focus to an increased use of both domestic and renewable energy, thereby reducing the reliance on fossil fuel and coal as energy sources. General Manager Elias briefly summarized each new standard and its relation to McMinnville Water and Light. As a first step toward adopting the new standards, the Commission requested staff to set up an analysis with recommendations for each of the five standards for its further consideration, and requested a published hearing notice on the subject.

Explaining a new Conservation Acquisition Agreement (CAA) with BPA to the Commission in September 2006, Key Accounts Manager Wes Thomas stated that it would replace the agreement in place at that time and would provide reimbursement for conservation measures implemented by utility customers. With a recommendation for approval from General Manager Elias, the Commission approved the CAA through Resolution 2006-13. Reviewing and considering important long-term challenges faced by the utility that included changes in BPA resource availability and the need for decisions relative to future power resource needs, the Commission requested staff to begin recruiting consultants to help with future planning.

Jody Christensen of MEDP attended a McMinnville Water and Light Commission meeting, during the early fall of 2006, to provide an update on her activities relevant to economic development for the city. The utility’s Commissioners had Christensen’s report, coupled with financial concerns over future power and water system infrastructures, and the forecast of unstable financial markets nation-wide on their minds. Desiring to understand the utility’s customer satisfaction rating in the community, the Commissioners authorized a contract with SDS Research (SDS) to conduct a survey of the utility’s commercial and residential customers. Todd Morris, of SDS, presented survey findings to the Commission during its January 16, 2007 meeting. Outlining the survey results, Morris stated that it was one of the best surveys ever conducted by SDS, especially in terms of overall customer satisfaction.[xxxvii]

The Impact of the Housing Market on the Great Recession and Energy Sector

The housing market, which served as fuel for the economy after the September 11, 2001 terrorist attack on the United States, showed signs of weakness in late 2006. A rapid rise in new housing construction at a time of record high vacancy rates, coupled with the baby boomer generation segueing into retirement and smaller homes, led to the “Great Recession” of 2007 through mid-2009. The construction and sale of new housing accounted for more than six percent of the nation’s GDP between 2002 and 2006, bringing on a five-year surge in consumption while savings rates declined. Data shows that households in the United States borrowed more than $600 billion against their home equity in 2005 alone. Between the mid-1990s and late 2006 housing prices rose more than 50 percent, which was well above the historical rate of 10 percent even with factored-in population growth. The decline in the housing market was a contributing factor in spurring on the recession, along with fiscally irresponsible subprime mortgages lacking governance. Slowed job growth led to a 5.3 percent rise in unemployment between November 2007 and October 2009, weakening the labor market. Government-enacted economic stimulus measures (bailouts in the form of loans, grants and investments), lowered interest rates and restrained spending to ease the crisis, which ultimately added to the debt shouldered by Americans. It took several years for the housing market to adjust and the market to stabilize, while households and financial institutions slowly paid down debt and employment levels returned to pre-recession levels. The Great Recession affected other sectors of the economy, including energy. Those working in the energy sector faced continued rising costs and the need to acquire new and renewable sources of power.[xxxviii]

Kicking off 2007, Mason Bruce Girard’s Bill Davidson reported an estimated timber sales volume of 3,500,000 board feet and estimated revenue $ 1,715,000. The CH2M Hill project team presented two alternative project plans for the WTP project, and team member Paul Berg outlined the details of each. The Commission chose the filter island alternative as its preferred plan through a unanimous vote and in April approved a draft Facility Plan for the Scott WTP expansion. In June, after another public hearing, it authorized the fourth of five water rate increases (see Appendix L) to help pay for the project. In July, following an update by CH2M Hill’s Sheryl Stuart and Craig Massie titled “‘Water Management and Conservation Plan, Transmission Pipeline, and Design Status”, the Commission authorized utility staff and CH2M Hill to submit the draft Water Management and Conservation Plan to the State of Oregon for review.

When Nancy Carlton resigned her position on the Commission at the end of her appointed term (December 2006), Mayor Gormley appointed C. Patrick Fuchs to fill her seat beginning in June 2007. At its meeting the next month, the Commission adopted PURPA’s Interconnection Service Standards, but opted not to adopt its Time Based Metering and Communications Standards. During a public hearing held one year later, on July 15, 2008, the Commission considered the adoption of PURPA standards, including net metering, fuel source diversity and fossil fuel efficiency. By 2008, McMinnville Water and Light already operated with a 94.4 percent non-fossil fuel portfolio and diversifying would have required the acquisition of fossil fuel generation, defeating the purposes of the Federal statute. Instead, the Commission declined diversification of its current energy portfolio and directed staff to develop a formal Energy Resource Plan (ERP) that considered fuel diversity, renewables, and conservation. Then it considered and adopted the fossil fuel efficiency standard, even though McMinnville Water and Light did not own or have direct control of fossil fuel generation. Moving on to net metering, it adopted the standard, which required electric utilities to make net metering services available to customers upon request. In December 2008, the Commission considered adoption of further revised PURPA standards through Resolution 2008-19.

Previously, when the topic of green energy came up during an early 2007 dinner meeting, the Commission requested staff to poll customer interest in purchasing green power and report the information at a future meeting. In March 2007, the Commission authorized staff to move forward with an RFP to develop its Electric Resource Plan (ERP) based on the utility’s load profile and relationship with BPA; and to develop resource integration strategies for its electric energy portfolio. In May, after reviewing two proposals for the ERP, it accepted EES Consulting’s $48,500 proposal. EES presented the ERP during a later public hearing, with no objections. The subject of green energy appeared again on the Commission’s October 16, 2007 agenda. In the time since the first discussion about the subject, Oregon’s governor signed Senate Bill 838 into law, requiring all consumer-owned utilities to offer a green power rate. Examining the subject thoroughly, the Commission directed staff to proceed with using the Bonneville Environmental Foundation (a third party, non-profit entity) as a vehicle to meet the State of Oregon’s green power rate requirements. It also instructed staff to pursue other channels of awareness for the public and determine a green power delivery method beneficial to McMinnville’s ratepayers.[xxxix]

WTP Expansion and Financing: McMinnville Water and Light’s Strategic Decisions

During the spring of 2007, the McMinnville Water and Light Commission examined future infrastructure expansion and improvements of both water and electric systems. While utility personnel repaired damage associated with the previous winter’s storm, the Commission reviewed the utility’s ten-year budget projections. The 2006 storm caused $178,000 in damage, and although the utility received reimbursement funds totaling $139,000 from FEMA, the recent storm remained fresh in the Commissioners’ minds. During a discussion of the electric department’s budget, commissioners expressed interest in developing a project to convert the existing overhead electric distribution to an underground system, which would mitigate the potential storm damage of downed power lines. Another wind event brought more downed power lines in December 2007, costing the utility $28,000 in damage. McMinnville Water and Light received $20,700 in FEMA funding to recover costs associated with the storm damage and in the process further examined avenues of mitigation for future storms. Staff presented a proposed funding policy to the Commission in early 2008, which addressed conversion to an underground system, the financial impact of such a policy and current practices regarding both overhead and underground service. Over the next several months, staff made presentations for Commission consideration covering the pros and cons of both systems as well as associated costs. Ultimately, in July 2008, the Commission voted to both create a policy and establish funding for the conversion of overhead power lines to underground through Resolution 2008-10. In August, the Commission awarded the first contract for underground power line conversion to Armadillo Underground, Inc. for $29,700 to complete the process along the portion of the Schmidt / Riverbend Landfill property on Highway 18. During the same meeting, it considered construction practices for electrical distribution with a bias toward underground construction. In October, General Manger Elias introduced Engineering and Operations Manager John Dietz, a recent addition to the utility’s staff. Dietz joined Electric Distribution Superintendent Scott Rosenbalm in asking the Commission to consider using electric underground conversion funds to convert overhead electric lines to underground in connection with the City of McMinnville Council Courts project. As a result, the Commission awarded the $113,000 contract for the purpose to Advantage Drilling LLC.[xl]

In late 2007, the Commission authorized the utility’s purchase of a two-acre parcel of land for $100,000, as the site of a future substation located where an addition to McDonald Lane would eventually intersect with the BPA’s 150 kV line. In January 2008, it purchased an additional two-acre parcel, located between the junction of Old Sheridan and Peavine Roads and Highway 18, for $70,000. The purchase included water and electric easements to the site of another future substation.[xli]

Key Accounts Manager Wes Thomas and Information Technology Manager Mike Polzen presented an updated McMinnville Water and Light website in January 2008, which featured information about the utility’s Green Power Program. In May, Power Resource Manager Rick Rozanski appeared before the Commission to explain the feasibility study covering the Riverbend Landfill Gas to Electric Project, which proposed to interconnect with the utility’s power distribution system and become part of the Green Power Program.[xlii]

As the time approached for the Commission to consider the process of hiring a construction contractor for the WTP expansion project, it weighed the pros and cons of bidding public contracts through the Design, Bid, Build process using the Construction Manager / General Contractor (CM/GC) model. It set a public hearing on the matter for November 6, 2007, which resulted in a unanimous approval, through Resolution 2007-14, exempting the Scott Water Treatment Plant upgrade and expansion from competitive bidding requirements outlined under Oregon Revised Statute Chapter 279C. Utility staff drafted a request for proposals for the project and by year’s end, after reviewing the recommendation of the Evaluation Review Committee, the Commission voted unanimously to execute a contract with Slayden Construction Group for phase one construction on the Scott Water Treatment Plant Upgrade and Expansion Project.[xliii]

Generating revenue for the project involved more timber harvesting in the utility’s watershed. The 2008 forecast saw a volume of 2,850,000 board feet with $1,450,000 in estimated revenue, plus the harvest of trees for use as transmission poles. During its April 2008 meeting, the Commission directed staff to determine transmission pole prices at various pole yards and to sell the poles to the yard that would yield the highest net price to the utility.

“The sale of timber as poles is a very specialized market,” noted Commission Chair Tom Tankersley. “To qualify as a pole the tree has to have a sapwood layer that is a minimum uniform thickness. This layer of sapwood absorbs the chemical treatment, which makes them last for a long time.”

Commenting further about the process, Tankersley said, “It takes highly skilled loggers to harvest timber for use as poles. The specialized logger conducts the art of “poling” the stands first, and then the following year a logging outfit will come in and clear-cut the stand. The cutters select and mark the trees, and excel at dropping them. They bevel the stumps at an angle to help break the tree’s fall, intentionally letting them brush against other trees to cushion the fall without cracking or damaging them. McMinnville Water and Light improved its roads in the watershed to allow for pole harvesting, making the curves wider to accommodate the length of the poles.” He also mentioned that scrap, left over from the pole harvest sale, went to sawmills that offered the highest net price.

The Commission approved a change order with CH2M Hill converting the means of project delivery from Design-Bid-Build to the CM/GC model, in January 2008, facilitating the completion of the WTP’s design phase and commencing construction. This change order saved the utility $11,300. A special meeting of the Commission took place in April to award the WTP upgrade and expansion project contract. During a workshop held on May 30, the Commission reviewed the topics of escalating cost estimates, guaranteed maximum price development and review, and engineering services during construction for the WTP project. Authorizing and awarding the phase 2 construction services contract to Slayden Construction for a guaranteed maximum price of $26,835,326, the Commission added a resolution provision of $200,000 to cover unavoidable increases in steel costs, subject to verification and approval by Mayor Gormley and General Manager Elias. A public hearing for the fifth and final water rate increase to cover costs for the WTP project took place on June 17, 2008, during which the Commission heard no objections and authorized the rate hike. This resulted in a $7.70 metered service access charge (per unit) with an additional meter size charge ranging from the smallest (5/8 inches) for $10.11 to the largest (12 inches) at $444.57. To top it off, consumers paid a consumption rate of $1.2258 per 100 cubic feet for the first 1,000 cubic feet and any usage over 1,000 cubic feet resulting in a rate of $1.3954 per 100 cubic feet.

Even with the water rate increases, concerns over financing the WTP expansion project continued and the Commission hired Western Financial Group for advice in September 2008. Western Financial presented possible financing alternatives for the project in October including a tax-exempt debt option adopted by the Commission through Resolution 2008-15, which expressed the intent of the utility to reimburse itself in the future with tax-exempt debt. Referring Resolution 2008-15 to the McMinnville City Council, the Commission felt the option gave them the financial flexibility of not using bonds to finance the WTP upgrade and expansion project. It also directed staff to use a $20 million figure as representative cost associated with the WTP project. Western Financial returned in March 2009 to present further considerations to the Commission, resulting in a workshop set in May for continued review of the WTP expansion project and related financial issues.[xliv]

BPA Contracts, Rate Studies, and Storm Recovery

Earlier, in March 2008, Electric Distribution Superintendent Scott Rosenbalm updated the Commission about engineering service bids for designing new electric substations for the utility. As part of the discussion, General Manager Elias stated that the utility would use the same design for three new substations planned for construction within the following five to ten years. Awarding an $180,530 engineering services contract to Elcon Associates, Inc. for electric substations design in July, the Commission also approved the purchase of a third two-acre parcel of land to the west of the future McDonald Lane extension at the BPA’s 115 kV transmission line for $282,000. Soon after, following the recommendation of Electric Superintendent Scott Rosenbalm and Amit Sinha of Elcon Associates, the Commission authorized the purchase of one 115 kV – 12,470 kV substation transformer, with mineral oil, for $952,117 from Delta Star.

On July 15, 2008, Power Resource Manager Rick Rozanski introduced BPA’s Conservation Rate Credit Program, which allowed utilities the option of providing customers with incentives for qualified projects. The country was in the middle of the Great Recession at the time, and the program offered an economic benefit to McMinnville Water and Light customers for using renewable energy provided by BPA through its Environmentally Preferred Power program. The Commission directed staff to periodically evaluate the benefit for this type of incentive program and bring their findings to future meetings. The following month, on August 19, the Commission approved a conservation program contract between the utility and CSRM along the same lines as the utility’s contract with BPA.

In late 2008, the Commission reviewed a new BPA Power Sales Agreement Contract to replace the contract scheduled to expire on September 30, 2011. Considering the clear reality that in the future BPA would no longer supply all of McMinnville Water and Light’s load growth needs, the Commission approved the new contract to begin on October 1, 2011 and continue through September 30, 2028. During its November meeting, the Commission authorized a contract with EES Consulting, which had previously completed the McMinnville Water and Light Electric Resource Plan, to perform an electric cost of service study and electric rate design, incorporating the new BPA contract rate methodology and the valuation of the utility’s public ownership in the firms’ scope of work.[xlv]

In fiscal year 2007-2008, BPA over-collected rates for the investor-owned utilities residential exchange program. This resulted in a return of funds to McMinnville Water and Light amounting to $3.7 million in the fall of 2008. The utility refunded associated amounts to industrial customers CSRM and Air Liquide. The Commission also examined the three percent in-lieu-of-tax-funds paid by industrial customers during the time BPA over-collected on rates, referring the matter to the City of McMinnville for consideration. As a result, the utility reimbursed the funds to both industrial customers on behalf of the City, subject to a re-payment schedule by the City to McMinnville Water and Light. The Commission signed a final settlement agreement with BPA in March 2011, and agreed to a later revision by BPA in May.[xlvi]

December 2008 brought a major weather system to the area, which lasted from December 15, 2008 through January 9, 2009. Water crews responded to more than 50 emergency water shut off calls due to frozen pipes and the freezing temperatures caused a power outage at the Scott Water Treatment Plant, which curtailed production. For the duration of the storm, utility personnel delivered diesel fuel in 100 to 200 gallon increments to assist with recovery and maintain water quality compliance. Overall, water curtailment was not necessary, thanks to the hard work of the WTP crew. Nearly 400 customers lost power – some for six days beginning December 20 until crews restored it on Christmas day. The storm delivered heavy snow and ice, causing limited access to 14 roads, which delayed power restoration. In short, the storm cost the utility more than $150,000 to recover, including needed tree trimming, mutual aid, labor and materials, fuel, equipment, lodging and food, and lost revenue. Tree trimming, conducted by the utility on a year-round basis in and along rights of way as part of electric line maintenance, prevented greater losses. Teamwork and commitment to its customers resulted in no major injuries or accidents during the storm, and although some lost power during the event, the utility experienced no major feeder outages and the storm did not affect 98 percent of McMinnville Water and Light’s customers.[xlvii]

From Retirements to Renewables: McMinnville Water and Light’s Late 2000s Developments

After serving the Commission for 14 years, Gene Zinda announced his retirement in December 2008. Mayor Ed Gormley also retired after serving 24 years as McMinnville’s Mayor and ex-officio member of the Commission. General Manager Elias and Clerk of Commission Nolan gave a slideshow presentation, “Celebrating 38 Years of Community Service”, which was followed by a reflection of those years and storytelling about achievements and problems experienced by the utility during that time. Mayor Gormley proclaimed Gene Zinda day, read a proclamation to that effect and presented it to Commissioner Zinda.

Gormley later received the Oregon Mayors Association (OMA) Lifetime Membership award, in 2014, to honor his many years of service to the community. Over Mayor Gormley’s 24-years’ service to the Commission he worked alongside 17 Commissioners (Homer Rohse, Norm Scott, Thomas Gunness, Charles Moore, Alan Hay, Sydney “Skip” Huwaldt, Tom Tankersley, O. C. Yocom, Jr., Allan Larsen, Gene Zinda, Scott Chambers, Bruce Bryant, Vivian Bull, Dale More, Mike Keyes, Nancy Carlton, and Patrick Fuchs). He also worked with four General Managers (Alan Jones, Robin Morecroft, John Harshman and Paul Elias) and two Clerks of the Commission (Dee Land and Mary Ann Nolan). Although he left the Commission in the role of Mayor, he returned as an appointed Commissioner, filling the seat of Gene Zinda and attending his first meeting in that capacity on March 31, 2009.

“The original charter that created McMinnville Water and Light has not changed. It provides for a self-guided Commission, which is not an arm of the City Council,” reflected Commissioner Gormley a few years later. “The Charter is unique in setting the utility aside from city operations, with the only connection being the Mayor, who has a tremendous amount of authority. In making appointments, the Mayor can be the utility’s greatest cheerleader.”[xlviii]

On January 20, 2009, those present for the McMinnville Water and Light Commission meeting included Mayor Rick Olson, Commission Chair Tom Tankersley, Commissioners Mike Keyes and Patrick Fuchs and Commission Attorneys Dave Haugeberg, Sam Justice and John McKeegan. Key utility staff included General Manager Paul Elias, Commission Clerk Mary Ann Nolan; Engineering and Operations Manager John Dietz, Water Superintendent Eric Abrams and Electric Distribution Superintendent Scott Rosenbalm. Key Accounts Manager Wes Thomas, Finance Director Mark Carlton, Information Technology Manager Mike Polzen, Project Administrator-Operations Pat Quinn, Technical Services Supervisor Steve Wendell, Conservation Manager David Christie, Power Resource Manager Rick Rozanski and Office Manager Vance Godfrey also attended the meeting. MBG’s Bill Davidson provided an update on the utility’s forest management activities, including estimated salvage and pole sales amounting to $850,000 in 2009 revenue, while other members of the MBG team, Kristen Currens and Mark Hynson, gave the Commission information about on-going wetland and fisheries mitigation projects.

Continuing its residential conservation efforts, the Commission considered a low-income weatherization campaign in early 2009, and authorized Mayor Olson and Clerk Nolan to sign an amended BPA Conservation Acquisition Agreement. The campaign, slated to begin in April 2009, had a goal to insulate, duct seal, air tighten and replace windows for qualified homes occupied by low-income customers. While the utility fought to keep costs down for its customers, BPA discussed wholesale power rate increases of 10 – 20 percent.

Moving forward with the utility’s plans for constructing the first of three planned new substations, Purchasing Manager Chad Hudson received Commission approval to purchase one 15 kV, substation metal-clad switchgear unit for $442,700 from Myers Power Products and one $60,734 121 kV circuit breaker from Areva T & D, in February 2009. A short time later, construction began on the new substation, named to recognized Ed Gormley’s service to the City of McMinnville and its municipal utility.

The Commission considered the completion of interconnection studies associated with the Riverbend Landfill’s proposal for a renewable energy facility during its March 31, 2009 meeting. It weighed other alternatives for producing energy, including those presented by Joshua Ferguson and Ramsey McPhillips, members of The BumperFuel Group, during the same meeting. At the time, a landfill generating resource was a very attractive opportunity considering the economic and energy environments, and it came priced conservatively. It was a valuable resource to McMinnville Water and Light in supplying the utility’s Tier 2 load growth needs. Ultimately, the Commission approved the agreement for the sale and purchase of renewable energy plus an interconnection and operating agreement with Waste Management Renewable Energy LLC., adding to its portfolio of alternative energy resources. A groundbreaking event for the Riverbend Renewable Energy Facility took place on September 23, 2009 and the Commission approved a Balancing Authority Area Services Agreement with BPA for integrating the Riverbend Renewable Energy Facility Project into the BPA balancing authority. A resolution (2010-13), passed by the Commission in the spring of 2010, designated BPA as the Qualified Reporting Entity for the Riverbend Renewable project under Quality Reporting Entity Agreement, Contract 10TX-14783. Later, in the summer of 2010, the electric department began use of a fiber connection to facilitate communications between the utility, the Riverbend Generation Project and BPA. In early 2011, the utility contracted with Spectron Energy to broker the sale of renewable energy certificates (REC), which eventually resulted in a five year REC only sale from the Riverbend Renewable Project and participation in the City of Tacoma’s RFP soliciting RECs.[xlix]

Passing the Torch: Leadership Changes and Funding Solutions

A special meeting of the McMinnville Water and Light Commission took place in late spring 2009. During the course of the meeting, the Commissioners learned of Water Superintendent Abrams’ planned retirement in 2010 and met Bob Klein, who would assume the role of Water Superintendent, enabling Abrams to focus exclusively on the WTP project through completion. The Commissioners gathered that day to deliberate upon the financing alternatives for the WTP project and eventually chose an inter-fund option, which placed the electric department in the role of lender and the water department in the position of borrower. After determining appropriate cash reserves for both water and electric departments, and setting the loan’s interest rate, the Commission approved Resolution 2009-4, creating the inter-fund loan policy, which served as a framework under Oregon law for the utility to conduct internal loans. A second resolution (2009-5) approved of and established the inter-fund loan for capital construction and related purposes. This fund provided financial support for the WTP project subject to monthly reviews. Resolution 2009-05 provided the loan formula for future borrowing, executed through resolution. Thus, Resolution 2009-06 served as the loan mechanism, executing the initial loan request, which allocated the maximum fund amount ($3 million) and included repayment, scheduled five years from transfer date of the first funds. The initial loan amount was $2.2 million with amounts varying upward and downward through resolutions in the following months. A change in Oregon law, effective January 1, 2010, modified the repayment timeframe for inter-fund loans from five to ten years. The Commission amended the utility’s inter-fund loan policy to reflect that change through Resolution 2010-6, and Resolution 2010-7 extended the inter-fund repayment schedule from five to seven years on all inter-fund loan resolutions adopted prior to January 1, 2010 and from that date forward.

Guests from Linfield College made an appearance at the June 16, 2009 Commission meeting. The school’s Director of Capital Planning and Development, John Hall, accompanied by Terry Wymore and Jessica Wade, presented the Commission with the Dan Moriarity Community Partner Award from the Oregon Campus Compact. Hall explained that Linfield had nominated McMinnville Water and Light for the honor and, as a result, the utility became the statewide recipient of the annual award for 2009. He further commended McMinnville Water and Light’s conservation staff for doing outstanding conservation work in partnership with Linfield staff. In October 2009, the McMinnville Chamber of Commerce recognized the utility as Business of the Year.

Gormley Substation & Stream Gauging Transition

The WTP project progressed on schedule through the summer and fall of 2009, with the Commission taking a tour of watershed lands and viewing the WTP project in person during August. WTP Project Manager Abrams provided monthly status reports to the Commission, sometimes with accompanying video documenting project activity. Authorizing the purchase of three instrument transformers and one voltage transformer for the new Gormley Substation from D’Ewart Representatives for $55,355, the utility moved toward breaking ground. During a special session held on July 15, 2009, The Commission awarded Mountain Power Construction the $826,780 contract to build the Gormley Substation. On August 18, it authorized the purchase of five steel transmission poles from Valmont Newark for $65,296 and in October, it approved a $39,515 change order for Mountain Power to install the poles. In April 2010, the Commission approved a $30,550 contract with Advantage Drilling for directional boring at the substation site.

In mid-2009, BPA modified the definition of its Tiered Rate Methodology for its customers who had large industrial consumers (such as McMinnville Water and Light’s CSRM). This proposal served as an effort to compensate the effect of the “high water mark” experienced by utilities during the economic downturn, based on their customer’s historic load. The Commission also approved revisions to McMinnville Water and Light’s Energy Conservation Agreement with BPA, as well as Exhibit A of the Power Sales Contract with the agency; and Exhibit C of the utility’s contract with Grant County, relevant to its share of Priest Rapids and Wanapum power generation allocation.

The Commission held a public hearing to consider PURPA Standards 16, 17, 18 and 19 on November 17, 2009. Because the utility did not bill its customers based upon time of use, the Commission chose not to commit to Standard 17, which involved a policy option directing the use of smart technology to measure electricity use. It committed to aspects of the other three standards, however, including integrated resource planning, rate design modifications to promote energy efficiency investments and consideration of smart grid information and investments.

Cross Connection and Water Conservation Specialist Marci Humlie presented information to the Commission, during its December 2009 meeting, about the transition of water gauging tasks in the watershed. The utility would begin transitioning in 2010 from consultant-based water gauging to in-house operation and maintenance of its gauging stations in the watershed, with gauging reports eventually incorporated under WTP operations. Humlie presented a goal for complete integration by 2011. The Commission directed continued monitoring by a consultant during the first year of in-house operation with subsequent review monitoring every three to five years. In October 2010, Humlie presented the staff’s first annual stream flow data report to the Commission.[l]

Adapting to a Changing Landscape

A new decade saw a population increase from 28,856 at the turn of the century to 32,836 in 2010; and an increase in households from 9,834 in 2000 to 12,568 in 2010. As McMinnville Water and Light entered its 120th year, the upgrade and extension of its water treatment plant reached a milestone of 18 months. During its January 19, 2010 meeting, The Commission listened to a presentation by Craig Massie and Josh Koch of CH2M HILL, which included photos and videos of construction progress and a financial update. All aspects of the project were going well, which Massie attributed to the cooperative, open relationship between McMinnville Water and Light, Slayden Construction and CH2M HILL. When Water Treatment Plant Project Manager Eric Abrams gave his WTP project status update to the Commission on June 15, 2010, the utility commended him for 30 years of service to the utility. Although he planned to retire on June 30, he remained to continue oversight of the WTP project. In July, the project was far enough along to allow for the release of $200,000 in retainage to Slayden Construction.

On January 19, 2010, the McMinnville Water and Light Commission contracted with consultant Katama Technologies to develop a business case for an Advanced Metering Infrastructure (AMI). Later, in September, Greg Johnson of Katama presented information about Smart Grid and AMI, which included ideas about how this current technology might fit in the utility’s future infrastructure planning.

The process of building the substation involved a metering agreement with BPA, through Resolution 2010-4, which memorialized the utility’s duties and responsibilities for design, construction, ownership operations and maintenance of revenue metering. The Commission hired Tri-Axis Engineering to update the utility’s 115 kV transmission construction standard, entering into another contract with the engineering firm later in the spring to develop the relay settings for the new Gormley Substation, and in the fall to conduct a review of the utilities Overhead Electric Distribution Standards.

During the first quarter of 2010, the Commission reviewed the water and light capital budget as projected 20 years into the future. Finance Director Mark Carlton provided different water rate increase scenarios for Commission consideration. Commissioners developed electric rate policy during a series of workshops conducted by EES Consulting, which began in July 2009. During the workshop on February 10, 2010, the Commission reviewed the impact of BPA tiered rates methodology (TRM) on distribution retail loads, power rate changes under TRM and the impact on rates of new industrial loads. It also considered its revenue requirements. By the time of the subsequent workshop, held on October 14, it developed a tentative direction for a distribution sector policy, new large single load determinations and a tentative industrial sector allocation. It also reviewed headroom, provision high-watermark and other concepts, and discussed industrial rate design.

In March, Lucien Gunderman updated the Commission about the Crown Hill Farm hydro system and asked about the possibility of selling some green power with McMinnville Water and Light’s assistance. Later that spring, Bill Davidson of Mason Bruce Girard reported that Pacific Wood Preserving (PWP) of Oregon wished to pay cash in advance for the 2010 Select Pole Harvest Sale, in lieu of a letter of credit. The Commission accepted the offer of pre-payment with a minimum $125,000 deposit and the understanding that PWP would pay for the legal costs of setting up the pre-payment method instead of the traditional letter of credit method.

A public hearing to consider increased water rates took place on April 20, 2010. Utility staff based the requested rate increase on the costs of system maintenance and operation, adequate cash reserves to cover contingencies and contemplated additions, improvements, and extensions to the system. At the hearing’s conclusion, the Commission approved the new water rates through Resolution 2010-12, including a 63-cent increase in the minimum customer charge for a 5/8 inch meter and a $1.82 increase for the 2-inch meter. After the public hearing closed, staff presented information to the Commission regarding proposed electric rate increases, and it set May 18, 2010 as the public hearing date, which resulted in approved rate increases through Resolution 2010-17, including a 62-cent rise in the minimum customer charge (see Appendix L for both water and electric rates).[li]

Begun in 2006 and dedicated in September 2010, the WTP plant upgrade and expansion resulted in an on-site, robust, redundant and optimized treatment capability with an increase from 13 to 22 million-gallons-per-day (MGD) capacity. Water from McGuire and Link Reservoirs entered the pre-treatment process, where added coagulant caused particles to stick together or “floc”, enhancing the treatment process as the water flowed through the plant. Then the water entered a sedimentation area where the floc stuck to stainless steel plates and settled to the bottom of the basin. The water continued moving through additional filters, composed of sand and anthracite coal, and on to the disinfection area for sodium hypochlorite treatment. Finally, it entered a large storage structure called the Clearwell, and from there, it flowed to the distribution system. The upgraded plant had the ability to treat high-turbidity water from storm-event flows and future expansion capacity up to 30 MGD. Other highlights of the WTP project included updated operations, process analysis and meeting spaces; updated computer systems for process control and monitoring; increased particle capture upstream from filters and retrofitting of the existing basin with construction of a new parallel basin. It also featured upgrades to the four existing filters; the addition of two new filters in a separate “island” complex; and an air scour system to help with filter backwashing. The expansion resulted in a new chemical building for housing disinfection and other treatment chemical systems, and an upgrade from the old chlorine gas system to on-site generation of sodium hypochlorite. The expanded plant included a new equalization basin, which allowed for regulation of waste flows; a new gravity thickener for solids treatment; new sludge drying beds and a new Clearwell, allowing for operational flexibility and disinfection contact time. One of the project’s challenges involved its remote, stair-stepped, sloping and forested location and the need to work around existing, operational structures, without disrupting water service to McMinnville’s consumers. On October 19, the Commission approved the final payment to Slayden Construction Group for the WTP, closing out the successfully completed, under budget, multi-year project. Upgrading the WTP paid off in many ways, including a first place 2011 Best Tasting Water award from the Northwest Oregon Subsection, Pacific Northwest Section of the American Water Works Association.[lii]

While the 2005 expansion of McGuire Reservoir increased its capacity and provided ample water supply through at least 2025 (following a scenario of rapid population growth), surrounding communities’ long-term supply was more uncertain. In 2008, the Yamhill County Board of Commissioners formed a Water Task Force comprised of representatives from the ten cities in the county, with a mission to “work as a facilitating group to ensure adequate future water supply for its communities”. Focusing on developing a synergy from all of the cities working toward a common goal, the Task Force determined that most cities had an adequate water supply through 2050. The “Yamhill County Water Supply Analysis”, completed by consultant HDR, identified water supply alternatives and laid out a plan for near-future feasibility studies to develop water supply strategies and resources. It is noteworthy that the analysis did not consider agricultural use of water resources, focusing instead exclusively on the need of municipalities in Yamhill County. Oregon’s wine industry, a large portion of which was located in Yamhill County, consumed great amounts of water. A later study, conducted by Barney and Worth in 2009, examined the future of Yamhill County’s agriculture and tourism industries and the effect an inadequate water supply might have on both. The study concluded, “Unless new water supplies are developed, local domestic water agencies will likely purchase a portion of their water supply from agriculture to meet future municipal demand. The finite water supply may mean many sectors of local agriculture are approaching upper limits for expansion. Securing and conserving water will pay major dividends for the future of agriculture in this county”.[liii]

Water Expansion and Positive Feedback

Carlton Mayor Steve Sampson’s appearance at a McMinnville Water and Light Commission meeting in April 1999 served as a forecast for the future and an impetus for the utility’s commitment to a future regional water source and improved intertie between Carlton and McMinnville. On November 16, 2010, Carlton’s Mayor Kathy Oriet appeared before the Commission to ask for an upgrade of the existing water intertie at Carlton’s expense and a temporary contract for Carlton to use the intertie as an alternate water source while it dredged its reservoir. The Commission asked utility staff to work with Carlton on upgrading the intertie. During the spring of 2011, the Commission approved two resolutions for Intergovernmental Agreements between the City of McMinnville (through McMinnville Water and Light) and the cities of Dayton (Resolution 2011-3) and Carlton (Resolution 2011-4), to secure future water rights on the Willamette River. Early the following year, the Commission approved an extension for the scope of work performed by GSI Water Solutions, which included the application and review process for a Willamette River Water Use Permit, plus partial perfection of the permit.

In September 2010, McMinnville Water and Light hired SDS Research to conduct another customer satisfaction survey as a follow up to the survey of 2006. Todd Morris of SDS reported on the details of the survey and told the Commission that the utility had the highest overall excellence ratings the firm had ever seen, and that credit was due to the superior service delivered to the utility’s customers by its staff.[liv]

After completing two major projects during the first decade of the twenty-first century, it was time for McMinnville Water and light to update its water system master plan and the Commission hired CH2M Hill to complete the task. The Commission also hired FCS Group to conduct a Water System Development Charge study and set April 19, 2011 as a public hearing date for the second round of its three-year planned water rate increases, which averaged 6.2 percent annually. A public hearing for an electric rate increase took place on August 16, 2011, to offset the BPA’s rate increase of approximately 8.5 percent (see Appendix L). Around the same time, the Commission heard information from MBG about carbon credits and slash utilization as part of best forest management practices in the utility’s watershed, with the understanding they would learn more about these subjects in 2011. In December 2010, Engineering and Operations Manager Dietz presented his observations about the utility’s electric system – its strengths and areas of needed improvement, plus staff’s plans for maintaining and updating it. During the same meeting, General Manager Elias distributed a copy of the Public Power Council 2010 Annual Report to the Mayor and Commissioners, so they could digest the issues facing public power.

A power outage experienced at Windishar Substation prompted utility staff to check all of the substations in the McMinnville Water and Light system for similar issues with like equipment and in January 2011, due to an unexpected low price for substation transformers, the Commission authorized the purchase of three for a total expenditure of $1,738,788. Staff successfully completed the Windishar Substation reliability upgrade by July that year.[lv]

Carbon Credits, Slash Utilization, and Financial Considerations

In early 2011, the Commission amended its agreement with MBG for the required annual wetland mitigation, invasive species control, and fish passage monitoring on sites in the McMinnville Water and Light watershed, which allowed for continued compliance with the USACE and Oregon Department of State Lands permits. The McMinnville Water and Light Watershed Forest Management Review for 2011, as presented by MBG’s Bill Davidson, revealed an estimated timber sales volume of 3,600,000 board feet and $1,650,000 in estimated gross revenue. This information led to a continuation of a conversation begun with MBG’s Mark Rasmussen, in late 2010, about carbon credits and related possibilities for the utility as a forestland owner. Carbon credits provide measured environmental benefits intended to mitigate harm to habitat, environmental functions, or ecosystems. In short, while the earth experiences climate change, restoring and maintaining forests is one way to address the issue. Trees inhale carbon from the air and transmit it for storage in the soil. A third party, separate from the landowners and the agencies awarding carbon credits, measures and monitors forest growth and deforestation through onsite visits and satellite imagery. In practice, if landowners do not harvest timber on certain tracks of land for a set amount of time, they can receive credits for carbon reduction and sell them to a company that needs to meet regulatory obligations. Rasmussen also furthered a discussion about the opportunity to sell slash from timber sales instead of burning it, proposing that the utility could obtain revenue from the slash and contribute to the production of green power at the same time. The Commission liked the idea and requested MBG to investigate and pursue the option of selling the slash from the previous year’s timber sales. Davidson later reported to the Commission about a company with the expertise to dispose of woody biomass left from watershed timber sales. After listening to additional information relayed to them by Brent Keller of MBG and discussing the issue further, the Commissioners reached a consensus to review the issue in 2012.[lvi]

Finance Director Mark Carlton introduced John Ghilarducci of FCS Group to the Commission during its July 2011 meeting. Ghilarducci gave a report on the Water System Development Charge study; and General Manager Elias outlined the next steps involved in the process, which included the sub-policy decisions from the Commission. Toward the end of the meeting, Elias introduced Engineering and Operations Assistant Trena McManus to the Commission, noting that she would fill in for Clerk Nolan at the September meeting.

McManus spent ten years working for the City of Lafayette, where she gained valuable experience with city government, public works, contracts, finance and customer service – all skills that built a solid foundation for a smooth transition for her role at the utility.

“My first impressions of McMinnville Water and Light were that the organization was well run, had a solid, reliable system and great rates,” recalled McManus. “Balancing rising costs, growth, and regulatory obligations with delivering reliable, low cost water and electricity to the community – the commission and staff have done a great job with this balancing act – keeping rates as low as possible without compromising service, reliability, or future infrastructure needs.”

Closing the July meeting, General Manager Elias announced his upcoming retirement.[lvii]

Reshaping Industrial Rates and Welcoming a New General Manager

The Commission held several industrial rate public hearings, during the months of September and October 2011, to consider the CSRM and Air Liquide industrial-customer power sales contracts. Reviewing the substantial changes to the traditional way McMinnville Water and Light purchased power from BPA and how those changes would shape Commission policies regarding rates and policies for its customers, General Manager Elias, briefly outlined the items under Commission consideration. The items included the Air Liquide Power Sales Agreement and associated Industrial Schedule, and the CSRM Power Sales Agreement with associated Industrial Schedule. Power Resource Manager Rick Rozanski spoke about the high water mark allocation. Financial Analyst Jaime Phillips testified about power costs scenarios, equipment replacement, distribution charges, light rate schedules for both small (L-IND-1) and large (L-IND-2) industries, and the cost of service model prepared by EES Consulting. Finance Director Mark Carlton spoke about the credit enhancement provisions in the Air Liquide contract. After listening to staff testimony, as well as that of representatives from the two industrial companies, the Commission approved a policy for the delivery of electric energy to industrial customers not under contract with McMinnville Water and Light, which held a provision that the customer not resell power. The Commission approved the policy through Resolution 2011-13, which applied the utility’s large industrial rate schedule to CSRM without a contract; and Resolution 2011-14, which applied the utility’s small industrial rate schedule to Air Liquide without a contract. The contingent policies did not go into effect, however, because both companies and the utility reached mutual agreements, executing contracts in late October, retroactive to October 1, 2011.[lviii]

Although scheduled to retire as of September 30, 2011, the Commission appointed General Manager Elias to continue as Interim General Manager through the month of October. In the meantime, it considered three applications for the role of McMinnville Water and Light’s general manager during September and October. After reviewing and adopting hiring standards criteria and policy directives for the general manager position and interviewing the three candidates, the Commissioners hired Kem Carr with a start date of November 1, 2011.

General Manager Carr obtained a civil engineering degree from Auburn University in Alabama. An interest in environmental work led Carr to work with the State of Alabama and inspections at Decatur Utilities, located in Decatur, Alabama. Intrigued with the utility, Carr later took a job there in the role of Chief Engineer. He spent 24 years working for Decatur, with the last eight serving as the utility’s General Manager. Moving west, Carr settled for a short time in northern Washington, and managed the Lake Chelan Reclamation District before joining McMinnville Water and Light.

In mid-October 2011, Engineering and Operations Manager John Dietz presented the Commission with an application for a water right on the Willamette River, joining the cities of Dayton, Lafayette and Carlton. Along with this development came a proposed Intergovernmental Agreement (IGA) with the three cities to discuss and develop joint governance, financing and operation of water facilities. The Commission unanimously voted to approve the IGA, authorizing Mayor Olson and Clerk Nolan to sign it. During the same meeting, CH2M Hill presented an update to the utility’s Water System Master Plan, and after receiving answers to various questions about items in the plan from Finance Director Mark Carlton and Water Superintendent Bob Klein, the Commission voted to accept it.

Emergency Repairs and Public Involvement

Resource Specialist Marci Humlie presented McMinnville Water and Light’s Continuity of Operations Plan (COOP) to the Commission, in November. The COOP delivered structured details for the utility to follow, enabling continued operation of vital functions in the event of a lengthy disruption affecting its facilities and personnel. In December, General Manager Carr referred the Commission to a one-page information sheet related to the COOP, which explained coordinated efforts between the utility, the City of McMinnville and Yamhill County in the event of a disaster. The year ended with Commissioner Patrick Fuchs recognizing Engineering and Operations Manager John Dietz and Electric Superintendent Scott Rosenbalm for excellent work on a fiber project and Mayor Rick Olson complimenting Manager of Community Relations Wes Thomas for his work with Chemeketa Community College on their conservation project. Likewise, 2012 began with Commissioner Fuchs commenting upon the “above and beyond service” from Mike Polzen for his assistance with a fiber issue and Commissioner Tankersley remarking about how pleased utility customers were with the service and professionalism of the front office, recognizing Office Manager Vance Godfrey for his team.

Record snowfall on January 17 and 18, 2012, accompanied by hurricane-force winds and followed by a pineapple express that brought heavy rains on January 19 and 20 nearly produced a water-related disaster for McMinnville Water and Light. Teamwork and skilled staff averted a water transmission emergency. Water Superintendent Bob Klein shared photos with the Commission during its February 21, 2012 meeting, which showed an eroded bank on Baker Creek, revealing a good portion of the 24-inch water transmission lines at the point where they crossed the creek. With the erosion came a loss of support for the transmission lines, placing McMinnville’s water transmission service in jeopardy. With emergency policies in place, and with the assistance of General Manager Carr, Klein and his staff worked quickly to procure bank repair services. Ratifying the actions of utility staff and its general manager, the Commission authorized a contract with Kizer Excavating, who completed the emergency repairs. It is noteworthy that the emergency procurement policies, implemented just a few months previous, allowed staff to meet the requirements of many state agencies while expeditiously arranging the necessary repairs and avoiding a crisis.

In February 2012, Engineering and Operations Manager Dietz informed the commission about the history and ownership of a 3.8-mile, 230 kV transmission line, running from the BPA Carlton Substation to the CSRM Substation, explaining that for many years the utility thought the line belonged to BPA, but that it actually belonged to McMinnville Water and Light. The Commission directed staff to pursue the option of transferring ownership to BPA. It took several years to conclude the, zero-dollar-sale transaction, through Resolution 2015-5, which included termination of an agreement with BPA for the operation and maintenance of the transmission line and the 115 kV breaker that served the utility’s Booth Bend and Gormley Substations.[lix]

Action taken in late March 2012 by the McMinnville Water and Light Commission to enact water system development charges (SDCs) caught the attention of several local builders who read about the SDCs in a News Register article. The builders appeared to voice their opposition during the Commission’s April 17 meeting. This action prompted the Commission to direct utility staff to create a forum where builders could discuss SDC issues with it and utility personnel. In the meantime, staff reviewed the impact of different SDC amounts, timber revenue, sale of water to other cities, and a water rate increase on the water department’s budget.

McMinnville Water and Light contracted with Utility Financial Solutions (UFS) to conduct an electric and lighting cost of service analysis in early 2012. UFS consultant Mark Beauchamp presented an Electric Cost of Service Model on April 2, and afterward the Commission approved an amendment to the UFS contract to include a service analysis on water cost as well. Beauchamp’s later report indicated that the utility should make some adjustments on customer charges; however, overall both water and electric rates appeared close to cost of service. He further suggested the Commission adopt a cash reserve policy to provide guidance to future Commissioners.

In May, after reviewing an updated Electric Cost Service Model, which reflected the capital plan and power supply forecast, General Manager Carr and Finance Director Mark Carlton presented the proposed 2012-2013 electric department budget to the Commission for consideration. In June, the Commission approved proposed changes to the utility’s conservation incentive program, which became effective on October 1, 2012, capped commercial and industrial incentives, eliminated the appliance rebate program, and reduced the conservation program’s overall expense. Approving the budgets for both electric and water departments during the same meeting, the Commission set July 17, 2012 for public hearings about adjusted electric and water rate increases. The public hearings resulted in rate increases for both, effective October 1, 2012 (see Appendix L), which helped the utility fund additions and improvements to the systems while maintaining the minimum cash balance for on-going operational needs.[lx]

In the spring, MBG’s Bill Davidson and Brent Keller accompanied American Tree Farm Inspector Mike Barnes on a tour of McMinnville Water and Light’s watershed, an activity that takes place about every five years. Recertification requires the demonstrated best forest management practices of harvesting under a sustained yield regime. Complementing McMinnville Water and Light’s Commissioners for their stewardship, Barnes recommended recertification of the watershed as an American Tree Farm.

Bill Davidson penned a letter to the Commission early that summer, announcing his transition to part-time employment and informing them that Brent Keller, who had worked closely with him from 2002 through 2006, would assume his consulting role. Keller honed his skills with Hancock Forest Management from 2006 to 2011 before returning to MBG and renewing his work alongside Davidson on the utility’s watershed management. Davidson’s relationship with McMinnville Water and Light began in 1975, and in the letter he noted his 37-year association with utility as rewarding. He wrote, “Young seedlings that I planted in the 1970s are now more than 80-feet tall. The amount of timber harvested during my tenure has been over 150 million board feet, yet the inventory remains the same as when I came. Sustainability of the timber resource and protection of the water resource has been a goal well worth our efforts.”

Remarking about the caliber of people representing the utility’s interests, Davidson continued, “I have worked with three City of McMinnville Mayors, over two-dozen civic leaders who-have served as Commissioners, four Water [and] Light Department General Managers and three Clerks of the Commission. All have added their unique contribution, wisdom and guidance to me over the years, and I am grateful.”[lxi]

Utility Improvements and Collaborative Efforts

Representatives from CoastCom, Inc. and Tillamook Lightwave visited the Commission during their May 15, 2012 meeting. The two companies were partners in a fiber optic route that ran from Pacific City to Hillsboro, including a portion that ran 1.7 miles across McMinnville Water and Light property. The utility previously provided a license to Pacific Telecom for the fiber optics, dating to October 1989; however, that company went bankrupt in 2005. CoastCom and Tillamook Lightwave requested the Commission to grant them a new license for the existing fiber optics. By consensus, the Commission directed its attorney to draft a license agreement to include an annual $1,000 licensing fee with a consumer price index adjustment. McMinnville based Pacific Wave approached the Commission in mid-August, requesting and receiving approval to amend its contract with the utility, signed in 1999, to allow for an increase of pole contact points from 100 to 200.[lxii]

During 2012 and 2013, the Commission focused on upgrading several of the utility’s substations. It approved a contract with Tri-Axis Engineering to rebuild the Walnut City Substation for $125,000, and later awarded the Kizer Excavating Company a $241,216 contract for the upgrade project. In the summer of 2012, it authorized a contract with Lyda Excavating, Inc., to remove the existing foundation, construct a new concrete foundation, and install an oil containment area for the new transformer at East McMinnville Substation for $54,750. Finally, in the spring of 2013, the Commission approved a future expenditure, estimated at $391,470 for energy efficiency improvements to Windishar Substation. The project, as proposed, would bring projected energy savings of 1.3 million kilowatts annually, with a majority of the project (as high as 70 percent) offset by BPA conservation dollars.[lxiii]

In August 2012, Carlton’s mayor and city manager, Kathy Oriet and Chad Olsen, approached the Commission with a request to obtain an IGA with McMinnville Water and Light that allowed the sale of water to Carlton in case of an emergency. After reviewing the request, the Commission authorized an IGA for consideration and comment by the City of Carlton. Around the same time, the utility issued IGAs with the cities of Carlton, Dayton and Lafayette relevant to the receipt of the water right permit on the Willamette River, first discussed in October 2011. The new IGA allowed the four cities (Carlton, Dayton, Lafayette and McMinnville) to acquire and maintain the water right. Later that year, the cities of Carlton, Dayton and Lafayette joined McMinnville Water and Light and created the Yamhill Regional Water Authority (YRWA) to discuss and develop joint governance, financing and operation of future regional water facilities along the Willamette River.

“The Commission considered necessary redundant water sources, especially after the Walker Creek site failure and when considering risk mitigation from earthquakes and other issues,” recalled Commission Chair Tom Tankersley. “The Willamette River seemed a good choice, so the search for water rights began. In the meantime, other cities had water-sourcing problems, so the Commission offered them the opportunity to pay for part of the first water right obtained, and the result was the formation of the YRWA.”

In December 2012, the Commission elected Ed Gormley to serve as McMinnville Water and Light’s representative Commissioner with the YRWA, and General Manager Carr as an alternate. The following July, utility staff, including Engineering and Operations Manager Dietz, Resource Specialist Marci Humlie and Water Superintendent Bob Klein; and Dayton City Manager Scott Pingle, joined the Commission to discuss the status of the YRWA. This meeting resulted in the pursuit of an expert to develop a strategy on water intake, explore the YRWA’s ability to take water, long-term, from the Willamette River and develop a scope of work deliverable to the Commission for further discussion.[lxiv]

During its November 20 and December 18, 2012 meetings, the Commission considered whether the utility’s fiber system should operate on its own as a department independent from the Electric Department, with its own accounting structure and an adequate revenue stream for system maintenance and replacement. Commissioners also examined the buyout provision between the City of McMinnville and the utility if Phase Two of the fiber optic network occurred, and reviewed the connection fees to determine if they were too high or too low. Finally, the Commissioners explored the possibility of using a third party consultant to help sort out the issues and develop a current business model. These discussions led to Letter Agreement 3 to the Fiber Optics Telecommunications Agreement between the City of McMinnville and the McMinnville Water and Light Commission. The Letter Agreement allowed the utility, at its discretion, to expand the fiber optics system beyond Phase 1.

Broadband Growth and Green Power Adoption

In June 2013, the Commission adopted the utility’s 2013-2014 budgets, which featured a separation of the Fiber Department from the Light Department for the first time. By the end of 2013, McMinnville featured multiple service providers offering broadband services ranging from traditional dial-up service to DSL, T-1s, fiber and regional wireless. A Fiber Expansion project was underway, led by Online NW / Pacific Wave Communications and joined by McMinnville Water and Light, the City of McMinnville and McMinnville Industrial Promotions, with the expectation of providing high-speed internet access and telecommunication services to public participants. Part of the plan involved expanding the fiber optic communication system into the McMinnville Industrial Park situated between Lafayette Avenue and Riverside Drive.[lxv]

Utility Financial Solutions updated the electric cost of service analysis to prepare for the anticipated BPA rate increases scheduled for late 2013. Leading a workshop on the subject during a special Commission meeting on May 30, 2013, Mark Beauchamp of UFS discussed long-term financial projections and targeted rate adjustments over the next two to five years. Beauchamp and the Commission also went over the cost of service results, which showed revenue and expense for each customer class; methodology for determining distribution charges for contract customers, rate impacts for a typical customer in each class, and the manner for determining power supply rates for new large customers. General Manager Carr closed the workshop with the understanding that BPA would issue its rates by July, and the Commission could anticipate staff recommendations in August, with an effective date of October 1, 2013.

Financial Analyst Jaime Phillips presented a proposed green power rate schedule to the Commission in August, explaining a change in the requirement by the State of Oregon, which directed all utilities to offer green power rates to their customers. With the option of using a third party to satisfy the requirement no longer available, the Commission set August 20, 2013 as the date for a public hearing to consider establishing a green power rate schedule. During the hearing, the Commission heard from several citizens who loved the idea of green energy, but opposed power produced by Riverbend Landfill, indicating they would like to see another choice for purchasing green energy. As a result, the Commission directed staff to investigate the costs and feasibility to prepare information and a proposed rate schedule for two green power options: BPA Renewable Energy Credits (RECs) and Non-BPA RECs or Landfill RECs and Non-Landfill RECs. During a public hearing the following month, Phillips presented two products offered for green energy rates. These included the bio-methane produced at the landfill and a green melded product, consisting of a possible blend of wind, low impact hydro, solar, or other non-biomethane renewable resources.

Solar and wind power are intermittent resources, and not reliable all of the time, so utilities pair or “meld” them with a dependable power source like hydropower.

“The best wind sites produce energy about 30-40 percent of the time and the best solar about 17-18 percent of the time,” John Dietz, then the utility’s engineering and operations manager, later remarked. “Both need a high dollar investment, and the return is low power generation. One cannot depend upon variable or intermittent power sources, so you need to pair them with a firm power source.”

Riverbend Landfill converts a potent greenhouse gas called methane to energy by burning it with internal combustion engines, breaking down the molecular structure and making it less potent.

“McMinnville Water and Light purchases power output from the Riverbend Renewable Energy Facility and we meld it with the hydropower obtained through BPA, which is a firm resource,” said Dietz. “The incremental efficiency upgrades from hydropower and the Riverbend Renewable Energy Facility power purchase fill McMinnville Water and Light’s Renewable Portfolio Standard (RPS).”

With no objections or further questions raised by public hearing attendees, Mayor Olson closed the public hearing and the adopted the green power rate schedule through Resolution 2013-9.

In the spring of 2013, the Commission approved the purchase of a $57,583 meter reading mobile collection system, including electric meters. The acquisition promised to mitigate safety concerns over difficult to access meters and to increase efficiency in labor hours necessary for reading the meters.[lxvi]

Project Developments and Fiscal Choices

Earlier in 2013, the utility purchased 240 feet of 30-inch, Class 250 ductile pipe for use in the Haskins Creek diversion upgrade project. As part of the overall upgrade plan, the Commission approved a $775,412 engineering contract with Jacobs and Associates (Jacobs) for design and construction management services, kicking off the Water-Transmission-Main and-Tunneling Project. During the Commission’s June meeting, Engineering and Operations Manager John Dietz introduced Jamie Schick of Jacobs, who presented information about the project. A discussion about the project continued during an August 12, 2013 workshop, where Schick and associate Mark Havekost presented further information covering the issues of tunnel alignment and clearances from the existing tunnel, existing tunnel elevation at entrance and exit points, new tunnel pipe materials, and the project construction schedule. Havekost returned in October to update the Commission on the proposed schedule, the processes of prequalifying bidders and bid evaluation related to types of pipe material, associated prices, and risks. This led to project bid solicitation and negotiations with Weyerhaeuser about easements for the water transmission main tunnel. Engineering and Operation Manager Dietz and Havekost reported the bid results to the Commission in January, recommending the $4,740,315 bid from Emery and Sons.[lxvii]

Jody Christensen of McMinnville Economic Development Partnership attended the McMinnville Water and Light Commission’s August 20, 2013 meeting to provide an annual update about the organization’s activities. As of year-end 2012, MEDP helped with the retention of over 500 jobs and the addition of more than 200 new jobs to McMinnville’s workforce. MEDP also performed over 170 business consultations and managed several site visits and expansion projects. Further, during 2012 and 2013, MEDP participated in food processing recruitment efforts with TEAM Oregon.[lxviii]

In September, General Manager Carr explained an issue concerning BPA Energy Efficiency Improvement (EEI) Funds, which involved the utility’s ability to fully utilize the available fiscal year 2013 EEI funds from BPA, as much as $380,000, by the end of 2013. To avoid the loss of EEI Funds, BPA staff suggested the completion of a utility-to-utility transfer of those allocated for fiscal year 2013, and transferring the funds back during fiscal year 2014. Carr also told the Commission that the City of Cascade Locks was prepared to transfer its remaining 2013 EEI Funds to McMinnville Water and Light, with no expectation of a transfer back to Cascade Locks the following year. Ultimately, the utility participated in both the City of Cascade Locks transaction, and a transfer of its 2013 EEI Funds to the City Light Department of Seattle, Washington (SCL), with the understanding that SCL would transfer the same back to McMinnville Water and Light in 2014. This practice continued in the coming years.[lxix]

Customer billing changed over the years from hand written invoices in the beginning to the computer-generated invoices of today. The way customers pay for service has also changed. Early on, most customers paid in person by visiting the McMinnville Water and Light offices. Customers also had the option of paying by check through the US Postal Service, dropping their payment in the utility’s drop box, or paying over the telephone using a credit card. The utility began generating electronic invoicing during early 2000s, using Ebill software. McMinnville Water and Light also offered an automatic payment option, which involved a customer’s bank automatically paying the bill if a customer chose to sign up for the service. In October 2013, the Commission learned that SmartHub would soon replace Ebill, as the business software provider (NISC) had ceased support. General Manager Carr, Office Manager Vance Godfrey and Information Technology Manager Mike Polzen presented information about the software change and fielded questions from Commissioners, including those concerning cyber security. The Commission approved the change of the utility’s customer information and billing system to NISC’s SmartHub product, and a short time later the utility increased its cyber security insurance coverage.[lxx]

Progress in Water Management and Infrastructure: McMinnville Water and Light’s Year in Review – 2014

The State of Oregon required a progress report on the Water Management and Conservation Plan (WMCP) at least every ten years as a condition for McMinnville Water and Light’s new or extended water rights, with a progress report at five year intervals. The utility’s WMCP, prepared by CH2M Hill in 2008, served as a vehicle to extend the Willamette River Water Use Permit, obtained in 2011. With a permit extension deadline of March 11, 2014, the Commission contracted with CH2M Hill for an updated WMCP.

The updated plan discussed the issue of Oregon water law and the use of public water, which requires a water right permit from the Oregon Water Resources Department (OWRD). A water use permit declares the right to use the water and includes the priority date, the amount of water allowed for and conditions of use. The permit also requires the user to develop the infrastructure needed for beneficial use. Typically, the entity with the first permit is the last to have water use restrictions imposed upon it. If supply is short, the senior entity may demand the use of as much water as needed, with the second most senior following suit, and so on until all the water is acquired. Obtaining a water right certificate is the best way to guarantee the protection of use, especially for municipal use, which is not generally subject to cancellation. The WMCP outlined on-going conservation measures instituted by McMinnville Water and Light including public information about conservation programs, the availability of conservation kits and fixture replacement, leak detection and repair, water auditing, reservoir overflow prevention and technical assistance. It also provided an analysis of potential new conservation measures targeting commercial and industrial users, irrigation by the City of McMinnville and residential users, and increased indoor fixture replacement programs.

Previously, during the October 2013 meeting, General Manager Carr and the Commissioners discussed the need for a Willamette River Water Supply study inclusive of strategies for water rights and storage requirements. Ultimately, the Commission approved a $15,000 contract with GSI Water Solutions for the study, with the utility covering 75 percent of the cost and the remaining expenditure split between the cities of Lafayette (11 percent), Dayton (7 percent) and Carlton (7 Percent). In April 2014, Carr and the Commissioners held a further discussion about obtaining water rights from the Willamette and a connected future regional water treatment plant. There were concerns about the water right permit held by the Yamhill Regional Water Authority (YRWA) and restrictions that could stop water flowing to the regional water treatment plant. The conversation led to the possibility of obtaining a water right with no flow restrictions and the Commission directed General Manager Carr to explore that option. Carr later recommended the services of West Water Research, LLC, to conduct a valuation analysis of Willamette River Water Rights, resulting in the pursuit of several water rights on the Willamette in the coming years.[lxxi]

The Water Transmission Main Tunnel Project continued during the late summer and fall of 2014. As part of the project, the Commission approved an upgraded SCADA system, along with new meters and valves at the Panther Creek Intertie.

“The project included boring a new tunnel through the hill to install the new pipe,” recalled Water Superintendent Bob Klein. “The tunnel bore was 2,200 feet long and 48-inches in diameter, which enabled the installation of the 36-inch-diameter, welded steel pipe from one side of the tunnel at the Water Treatment Plant to the other side on Panther Creek Road. The connections on each side of the tunnel used 36-inch ductile iron pipe. As part of this project, we added a new intertie at the existing Panther Creek site so both the new 36-inch transmission main and the existing 24-inch transmission main go through this intertie.”

The tunnel project had two purposes. First, it increased the flow capacity of treated water from the WTP to the City. The existing 24-inch transmission main limited flow capacity to 15 MGD. The 2010 WTP upgrade and expansion project increased the WTP’s flow capacity from 13.3 MGD to 22 MGD, with future expansion capacity to 30 MGD. The utility needed the new 36-inch transmission main to meet the future demands of McMinnville consumers. Second, the additional water main provided redundancy.

Klein continued, “The existing 24-inch water transmission main between the Water Treatment Plant and the Panther Creek intertie goes through a tunnel 1500 feet in length. This 24-inch main was the only way to transmit water from the Water Treatment Plant to Panther Creek and the two water transmission mains that supply drinking water to the City. If some event were to occur that prevented flow through this existing 24-inch main, the utility would not be able to get treated water to the Panther Creek intertie. Installation of the second main gave McMinnville Water and Light needed redundancy between the Water Treatment Plant and the Panther Creek intertie.”[lxxii]

Nearly 100 years after completing its first tunnel for water delivery to City consumers, McMinnville Water and Light completed its second tunnel, hooking up the new intertie to the Panther Creek System in December 2014. During a joint session of the McMinnville City Council and the McMinnville Water and Light Commission, held a few months earlier, Engineering and Operations Manager Dietz provided an overview of the utility’s operations, which had consistently supplied McMinnville with drinking water and electrical service for 125 years. He remarked on the recent addition of wholesale fiber-optic services and noted that the utility operated 24-hours a day and seven-days-a-week. Touching on current activities, he spoke of utility crews creating the second tunnel for redundancy in bringing drinking water to McMinnville’s customers. He showed the 20-year master plan for future water projects, pointing out the largest of all – replacing a 16-inch water main. He also commented about the unique gravity fed system, stating that even though some of the City’s water came from the west side of the Coast Range, there was no need to pump water. Reviewing the McMinnville Water and Light electrical system, Dietz noted the utility crews’ progress replacing older equipment, such as substation transformers, the heart of the system. He also mentioned several replacement and upgrade projects, including work at Cascade Steel Rolling Mills, underground cable replacement, and participation in the City of McMinnville’s NE Gateway project, an infill and redevelopment plan, which addressed current and future transportation needs, and provided guidance for development through an integrated, mixed-use, pedestrian-oriented neighborhood over the next 20-30 years.

During the same joint session, General Manager Carr commented about the sale of water to neighboring communities, stating that the utility’s first priority is McMinnville’s consumers and their future needs. Carr also spoke of McMinnville Water and Light’s joint pursuit with the cities of Carlton, Dayton and Lafayette to access water from the Willamette River in case of potential future water shortfalls. Finally, he commented on the “Customers Helping Customers” program, which reflected the utility’s mission to put its customers first.[lxxiii]

This mission focus would continue to position McMinnville Water and Light as a top tier, award-winning utility as the City of McMinnville continued to grow.

Urban Growth & Increased Regulations (1990-1999) The Recent Past (2015-2019)
[i] United States Census Bureau, “Census of Population and Housing – 2000” and “Census of Population and Housing – 1990”, https://www.census.gov/prod/www/decennial.html, retrieved October 3, 202; “McMinnville Economic Opportunities Analysis”, prepared for the City of McMinnville by ECONorthwest, November 2001, 4-11.

[ii] “History: 2000 Fast Facts”, United States Census Bureau, https://www.census.gov/history/www/through_the_decades/fast_facts/2000_new.html, retrieved October 3, 2020.

[iii] Eric Newburger, “Home Computers and Internet Use in the United States: August 2000”, Current Population Reports, issued September 2001, https://www.census.gov/prod/2001pubs/p23-207.pdf; retrieved October 3, 2020. “Population Profile of the United States: America at the Close of the 20th Century, Demographic Programs, issued March 2001, https://www.census.gov/prod/2001pubs/p23-205.pdf, retrieved October 3, 2020.

[iv] Water and Light Commission Minutes, January 18 2000 and April 18, 2000.

[v] “Willamina Watershed Assessment”, Yamhill Basin Council, August 2, 1999, p. 10; “North Yamhill River Watershed”, Denise Hoffert-Hay, 2001, pp. 20-27. Splash damming was the practice of building a dam in a stream, which created a deep pool of water to store downed trees. As soon as a sufficient amount of both water and timber had built up behind the dam, workers removed it, allowing the water to carry the wood downstream to the lumber mill. This method cleared the streams, removing debris and channelizing them, which allowed navigable streams where none existed before.

[vi] “Water Management and Conservation Plan”, prepared for McMinnville Water and Light by CH2MHill, May 15, 2014, 2-23.

[vii] Water and Light Commission Minutes, January 18 and March 28, 2000; August 21, 2001 and April 24, 2003.

[viii] Ibid., May 16, 2000; January 16 and March 7, 2001; January 15, 2002, January 21, 2003, January 20, 2004 and January 18, 2005.

[ix] Ibid., February 15 and April 18, 2000.

[x] Ibid., May 16, June 6 and 22, October 17, November 21 and December 19, 2000.

[xi] Ibid., January 16 and February 20, March 20 April 17 and July 2, 2001; July 15, 2003; and July 15, 2014. In July of 2003, the Commission executed a $623,090 contract with Brant Construction to conduct wetlands mitigation as part of the requirement for the McGuire Reservoir expansion project. The Chehalem Creek Wetland Mitigation Monitoring requirement by the Oregon Department of State Lands continued through 2016, when the project closed out.

[xii] Ibid., March 7, April 17, May 4, 9 and 31, June 19, September 25 and October 16, 2001; October 21, 2003; May 12, 2004. The Commission approved the two Intergovernmental Agreements under Resolutions 2004-3 and 2004-4.

[xiii] Ibid., January 20, 2004 and October 19, 2004; January 18 and August 16, 2005. “McGuire Reservoir Expansion Key Project Highlights”, downloaded in PDF format from McMinnville Water and Light website (https://www.mc-power.com/wordpress/wp-content/uploads/MWL-McGuire-Reservoir-Expansion.pdf), January 1, 2021. Tankersley Interview.

[xiv] Ibid., January 20 December 21, 2004; March 18, 2005 and September 20, 2005; January 25, 2006; and December 8, 2008.

[xv] Ibid., February 14, November 21, 2021; March 19 and November 19, 2002; September 25, 2003 and January 20, April 8 and October, 2004; January 18, February 15 and April 19, 2005. Email between Katherine Huit and ODOT’s Louis C Torres, November 30, 2020, states that the Oregon Highway Department constructed a steel truss bridge, number 02691, across the South Yamhill River realigning the route from McMinnville to Dayton. Before that time, people crossed the river via a covered bridge downstream at today’s Nehemiah Road and Dayton Avenue. Fox Ridge Road is also known as Teacher’s Hill due to a group of McMinnville area teachers purchasing a tract of land as a group investment.

[xvi] Ibid., February 15, March 28, May 16, June 6 and 22, July 7 and October 17, 2000.

[xvii] Ibid., April 18, May 4 June 22 and December 19, 2000; February 15 and 22, April 16 and May 21, 2002. Enron later filed bankruptcy, which prompted a special meeting of the Commission on February 22, 2002, for the purpose of addressing and bidding for power replacement. A discussion during the special meeting included the contracted price of power with Enron, money the utility owed Enron and the amount Enron owed the utility, the awarding of a contract to cover the time remaining on the Enron contract, current power prices and their volatility. Ultimately, the Commission voted to approve a power purchase in the amount of $30 or less, to cover the terminated Enron contract period of 29 months. In May 2002, due to ever-increasing prices, and after determining the credit worthiness of bidder AEP, the Commission authorized a purchase of power from AEP for the balance of the Enron contract (June 2002 through September 2004) at a cost of $33 per aMW.

[xviii] Ibid., September 19, October 17, December 19, 2000, January 12, 2001; and April 8, 2004. The Commission authorized renewal of the BPA’s conservation services through Resolution No. 2004-2, approving Revision No. 1, Sections 1, 2 and 3 to Exhibit A of the Purchase of Conservation Agreement, Contract No. 01PB-10380.

[xix] Ibid., December 19, 2000, January 16 and February 14 and February 20, 2001; May 21, 2002. Under Resolution 2002-6, the Commission authorized a new Power Scheduling and Services Agreement with EWEB on May 21, 2002, which included the requirement by BPA for utilities to have power schedulers and amended the enabling agreement for the purchase and sale of power directly with EWEB.

[xx] Ibid., February 20 and March 7, 2001; June 18, July 23 and August 20, 2002; May 12, 2004, June 21, 2005, April 18, 2006, May 15 2007 and April 15, 2008..

[xxi] Ibid., June 19, 2001; “Letter to the President” BPA 2001 Annual Report, Bonneville Power Administration website, https://www.bpa.gov/Finance/FinancialInformation/AnnualReports/Documents/AR2001.pdf, retrieved January 14, 2021.

[xxii] Ibid., August 21, 2001, November 20 and December 18; 2001 and January 31, 2002.

[xxiii] Ibid., April 17, June 19 and August 21, 2001; April 16,2002; June 19, 2007. Definition of net meter from McMinnville Water and Light website, https://www.mc-power.com/electric/net-metering, retrieved December 28, 2020. Definition of interconnections from “US Electric System is Made Up of Interconnections and Balancing Authorities”, US Energy Information Administration website, July 20, 2016, https://www.eia.gov/todayinenergy/detail.php?id=27152.

[xxiv] Ibid., July 12 and August 21, 2001.

[xxv] Ibid., January 15, 2002.

[xxvi] Ibid., October 17, 2000; March 19, April 16, August 20 and October 15, 2002; and January 21, 2003. . Interview with Kathy Danforth, conducted by Katherine Huit, February 11, 2021.

[xxvii] Ibid., February 15, April 18, September 19, and December 19, 2000, June 18 and November 19, 2002

[xxviii] Ibid., January 21, February 18, 2003.

[xxix] Ibid., February 18, July 15 and November 18, 2003; August 17 and October 19, 2004; January 18, March 18. May 17 and November 15, 2005.

[xxx] Ibid., July 20, 2004, July 19 and December 13, 2005; January 25 and February 21, 2006. The Commission increased the not to exceed cost by $2,800 after the utility’s staff clarified a couple of items bringing revised costs to light.

[xxxi] Email between Trena McManus and Katherine Huit, May 12, 2021, provides hire, transition and retirement dates for Rick Rozanski and Dwayne Jackson.

[xxxii] Ibid., October 21, 2003 and August 17, 2004, June 21 and December 13, 2005.

[xxxiii] Ibid., April 19, May 17, July 19, August 16 and December 13, 2005, January 25, February 21,and March 14 and April 13 and June 8, 2006.

[xxxiv] Ibid., April 18, 2006. “Founding Partners and Board of Directors”, McMinnville Economic Development Partnership website, https://www.mcminnvillebusiness.com/mission-history accessed February 6, 2021.

[xxxv] Ibid., April 18 and June 20, July 18, August 2 and November 30, 2006.

[xxxvi] Ibid., February 15. 2005, June 20 and August 2, 2006, June 17, August 19, October 21 and November 18, 2008.

[xxxvii] Ibid., September 22 and October 17, 2006 and January 16, 2007.

[xxxviii] “Economic Research – Unemployment Rate”, Federal Reserve Economic Data website, retrieved January 19, 2021. Baker, Dean. “Recession Looms for the US Economy in 2007”, Center for Economic and Policy Research November 2006.

[xxxix] Ibid., July 18, 2006, January 16 and 26, February 20, March 20, April 17, May 15, June 19, July 17 and August 21 and October 16, 2007, July 15 and December 8, 2008.

[xl] Ibid., March 20, April 17 and June 19, 2007; February 19, March 18, April 15, July15, August 19 and October 21, 2008.

[xli] Ibid., December 17, 2007.

[xlii] Ibid., January 15 and May 12, 2008.

[xliii] Ibid., October 16, November 6 and December 17, 2007.

[xliv] Ibid., January 15, March 18, April 15, May 13 and 30, September 16, October 21 and November 18, 2008; March 31, 2009. Tankersley Interview.

[xlv] Ibid., January 15, March 18, July 15, August 19 and September 16, October 21 and November 18, 2008.

[xlvi] Ibid., October 21 and November 18, 2008; March 15 and May 17, 2011.

[xlvii] Ibid., January 20, 2009.

[xlviii] Ibid., December 8, 2008 and May 20, 2014. Gormley Interview.

[xlix] Ibid., February 17 March 31 and August 19, 2009; March 16 April 20 and June 15, 2010; January 18, May 17 and June 6, 2011.

[l] Ibid., February 17, May 14, June 16, July 15 and 21, August 18, September 15, October 20 and November 17, 2009, March 16,2010.

[li] Ibid., January 19, February 10 April 20 May 18 July 20, August 17, September 21 and October 14, 2010. “Oregon: 2010 Summary Population and Housing Characteristics”, 2010 Census of Population and Housing, issued December 2012.

[lii] Water and Light Commission Minutes, August 17 and October 19, 2010; April 19, 2011; “The Norm Scott Water Treatment Plant”, McMinnville Water and Light brochure, September 2010; and “Scott Water Treatment Plant Upgrade and Expansion” brochure, McMinnville Water and Light, September 2010.

[liii] “Yamhill County Water Supply Analysis Executive Summary”, Yamhill County Board of Commissioners, April 7, 2008; Neuhauser, Will, “Developing a Water Plan for Yamhill County”, Of, By and For: How We Govern Matters, January 1, 2009; Neuhauser, “OPB News: Oregon Wine Country Towns Look to Willamette Drinking Water”, Of, By and For: How We Govern Matters, January 1, 2009; Neuhauser, “Yamhill County Water Supply Analysis”, Of, By and For: How We Govern Matters, April 7, 2008; and “E-Memo Re Yamhill County Agri-Business” Barney and Worth, December 1, 2008. The municipalities on the task force were Amity, Carlton, Dayton, Dundee, Lafayette, McMinnville, Newberg, Sheridan, Willamina and Yamhill.

[liv] Water and Light Commission Minutes, September 21 and November 16, 2010 and April 19, 2011.

[lv] Ibid., November 16 and December 21, 2010; January 18, March 15, April 19, July 19 and August 16, 2011.

[lvi] Ibid., January 18 and August 16 and October 18, 2011; “What Are Carbon Credits and How Are They Produced?” Arbor Day Foundation website https://www.arborday.org/carbon/carbon-credits.cfm, retrieved January 31, 2021; “Oregon Woodland Owners Consider Selling Carbon Credits,” Oregon Live, The Oregonian website https://www.oregonlive.com/news/2009/04/oregon_woodland_owners_conside.html, retrieved January 31, 2021; and “Want To Understand Carbon Credits? Read This,” Forbes website https://www.forbes.com/sites/erikkobayashisolomon/2020/03/13/want-to-understand-carbon-credits-read-this/?sh=6ef500b671aa, March 13, 2020.

[lvii] Ibid., July 19, 2011; Interview notes from Trena McManus, received by Katherine Huit on April 12, 2021.

[lviii] Ibid., September 20 and 28, October 13, 18 and 25, 2011; November 15 and December 20, 2011; and January 17, 2012. Resolution 2011-17 authorized and established the components of power costs, electrical rates, charges and fees for Cascade Steel Rolling Mills in conjunction with the Power Sales Agreement between the Steel Mill and McMinnville Water and Light. Resolution 2011-18 authorized and established the components of power costs, electrical rates, charges and fees for Air Liquide in conjunction with the Power Sales Agreement between the Air Liquide and the utility. The contract with Air Liquide underwent minor revisions and received final Commission approval on January 17, 2012.

[lix] Ibid., September 28, October 18 and 25, 2011, February 21, 2012 and July 21, 2015.

[lx] Ibid., March 20, April 2 and 17, May 15, June 19 July 17 and December 18, 2012.

[lxi] Ibid., January 17 and April 17, 2012; Letter from William Davidson, Mason, Bruce & Girard, dated June 5, 2012, is part of the June 19, 2012 Water and Light Commission Minutes. Brent Keller’s background came from an email between Katherine Huit and Trena McManus, May 20, 2021.

[lxii] Ibid., May 15, 2012.

[lxiii] Ibid., June 19 and August 21, 2012; and March 19 and June 26, 2013.

[lxiv] Ibid., February 21, May 15, June 19, August 8 and 15, September 18, November 20 and December 18, 2012; and July 16, 2013. Tankersley Interview. Yamhill Regional Water Authority page of the McMinnville Water and Light website: https://www.mc-power.com/water/yrwa/, accessed January 30, 2021.

[lxv] Water and Light Commission Minutes, November 20 and December 18, 2012; March 19 and June 26, 2013. “City of McMinnville Economic Opportunities Analysis”, November 2013, p. 35.

[lxvi] Ibid., May 21 and 30, August 20 and September 17, 2013. Interview with General Manager John Dietz, conducted by Katherine Huit, February 10, 2021.

[lxvii] Ibid., February 19, March 19, August 12, 2013; January 21, 2014.

[lxviii] Ibid., August 20, 2013; “City of McMinnville Economic Opportunities Analysis”, E. D. Hovee and Company, LLC. Economic Development Services, November 2013, p. 30.

[lxix] Water and Light Minutes, September 3, 2013, July 21. 2015, July 19 and October 18, 2016, September 8, 2017.

[lxx] Ibid., October 15, 2013; July 15 and August 19, 2014. “McMinnville Water and Light (MW&L) Implements NO FEE Model for Credit Card Payments.” Press release issued on the McMinnville Water and Light website, https://www.mc-power.com/news/, retrieved March 27, 2021.

[lxxi] Water and Light Commission Minutes, October 15, 2013; April 15, August 19, 2014. “Water Management and Conservation Plan,” prepared for McMinnville Water and Light by CH2M Hill, May 15, 2014.

[lxxii] Water and Light Commission Minutes, September 16, 2014. Klein Interview.

[lxxiii] Water and Light Commission Minutes, August 26, 2014. “Northeast Gateway Plan”, Final Draft, City of McMinnville Planning Department, March 2012.