According to census data, McMinnville’s population grew by eight percent between 2015 and 2019. There were 12,792 households, 91 percent of those had computers and 81.7 percent had subscriptions to the Internet. As access to the Internet grew, so did crime perpetrated through its channels over the World Wide Web. The McMinnville Water and Light Commission considered the security of its systems and its customers when upgrading utility systems.
Cybersecurity Measures in Utility Infrastructure
Previously, in November 2014, the Commission hired Tri-Axis Engineering to upgrade the SCADA system while also conducting an electric system planning study for a contracted sum of $160,000. In July 2016, the utility purchased a new SCADA system from Open Systems International for $124,799.88. During a Commission meeting the following year, Commissioner Keyes started a conversation about the issue of security relevant to the utility’s use of systems software.
Taking the issue of cybersecurity seriously, the Commissioners took it upon themselves to learn about the dangers of cyber-attacks. Commission Chair Tankersley commented, “There is a very real concern about cyber criminals accessing the nationwide power grid through smaller utilities. The American Public Power Association (APPA) and the federal Department of Energy (DOE) offered training programs and assistance to utilities to protect them from external access from nefarious players.”
Tankersley and other Commissioners attended the training and learned about opportunities for the utility’s staff to receive further training. Taking advantage of the training, staff also acquired software tools through the APPA and DOE programs, which generated reports showing system evaluations and providing a dashboard of vulnerable areas placing the utility at risk.
Information Technology (IT) Manager Mike Polzen disclosed RFP results for an IT security assessment during the March 20, 2018 Commission meeting, recommending BPM, LLC for the study. The Commission approved a $39,100 contract with BPM to conduct penetration testing and examine current IT policies and procedures.
“As a result, McMinnville Water and Light adopted cybersecurity measures through upgraded hardware and protocols,” said Tankersley. “Commissioner Patrick Fuchs helped to evaluate the system and the Commission receives a “report card” on the system every month in executive session.”
Even though the utility’s system operates internally as an intranet, with no access to or from the Internet, the Commission remains vigilant. In late 2019, IT Manager Polzen presented a proposed Cyber Security Policy for Commission approval. After a few revisions to address the issues of Network Vulnerability Assessments, outside vendors and policy compliance measures, the Commission adopted the policy on December 17, 2019, through Resolution 2019-28. During the same meeting, General Manager Dietz discussed creating an additional position to handle increased cybersecurity functions.
“The McMinnville Water and Light Information Technology Department put in a lot of work on cybersecurity protection,” commented Water Superintendent Klein. “They implemented policies and installed infrastructure to protect the utility from cyberattacks.”[i]
A Look at McMinnville Water and Light’s Renewable Energy Compliance and Infrastructure Enhancements
The utility continued strengthening its electric facilities in early 2015. Completing a voltage optimization project to increase energy efficiency at the Windishar Substation, utility crews were ready to proceed with the same project at the Baker Creek Substation. The Commission approved the $471,736 expenditure with the understanding that partial reimbursement of $220,000 would be forthcoming from BPA, and that the Walnut City Substation would be the next project to receive the upgrade. Also in early 2015, an opportunity to convert primary overhead power lines crossing over busy Highway 99W to underground service presented itself when the McMinnville Honda dealership embarked on a major remodel project. Drawing $15,000 from the Electric Underground Conversion Fund, the project improved system reliability.
In February 2015, Power Resource Manager Rick Rozanski joined the Commission in a discussion about the utility’s obligation to supply ten percent of its electricity from qualifying renewable energy sources beginning in 2025, under the State of Oregon Renewable Portfolio Standard (RPS). Although the distribution side of McMinnville Water and Light’s system had no RPS obligation because it had qualifying resources, many non-qualifying resources served its industrial customers and they would not meet the obligation. Because BPA viewed McMinnville Water and Light and its customers as one entity, Rozanski explained, the utility could meet its obligation through actual renewable energy or through a renewable energy credit (REC) that has the environmental attributes associated with the energy. Considering this information, the Commission directed staff to purchase the needed RECs, and during its next regular meeting on March 17, 2015, it authorized the purchase of Oregon Certified RECs through resolution 2015-2.[ii]
The Commission met jointly with the Yamhill Regional Water Authority on February 19, 2015 to discuss the status of the YRWA. Discussion topics included fish flow requirements and flow restrictions on the current YRWA permit, the effort underway to purchase senior water rights, the timeline for the regional water treatment system, cost sharing among the entities, and the advantages of a supply contract versus ownership of a regional water system. During its next regular meeting, the Commission discussed a potential water rights purchase from International Paper Company, dating to 1982, which placed it in seniority status to the right previously purchased by YRWA. Attached to 65.6 acres of International Paper Company property in Albany, Oregon, Water Right Certificate No. 85736 authorized up to 12 cubic feet per second of water from the Willamette River. The Commission authorized the purchase of a 7.75-cubic-feet-per-second portion of the water right for $2,800,000. A few months later, Commissioner Gormley informed the Commission about recent Willamette River water flow data. These statistics provide information about how many days certain water permits would not be able to draw water from the river. Data obtained for two years before April 2015 showed 13 days as the longest time that the authority could not draw water from the river; however, between April 5 and July 15, 2015, a total of 70 days, water would have been restricted each day. This made the point very clear that the regional authority would need another senior water right to enable drawing water from the river to meet the needs of the cities involved.
Ensuring Water Supply: McMinnville Water and Light’s Journey to Reliability
In August 2015, the city of Dayton left the YRWA; however, McMinnville Water and Light continued to work with the cities of Lafayette and Carlton in addressing water needs. General Manager Carr presented a brief history of the two city’s water needs to the Commission along with comments about McMinnville Water and Light’s desire to develop a redundant source of water, which led to creation of the Yamhill Regional Water Authority (YRWA) and the goal of acquiring water rights to develop a water source from the Willamette River. With Dayton leaving the group, the plan shifted a bit, and as a result, the utility was willing to discuss long-term water contracts with the cities of Carlton and Lafayette. The contracts would be for limited amounts and duration. After a discussion, the Commission authorized staff to submit the draft contract to the cities, recognizing that it was the beginning of a long process.
After nearly a year, General Manager Carr informed the Commission that the water right transfer application went through the protest period with no objections. A few weeks later, the State of Oregon issued a Final Order and International Paper executed a quitclaim deed to McMinnville Water and Light, which triggered the transaction to make the utility the official holder of the water right.
Toward the end of 2014, Utility Financial Solutions conducted another updated electric cost of service study and rate design and the Commission heard the study results from Mark Beauchamp on June 2, 2015. After a discussion, which covered a review of long-term financial projections, possible rate adjustment scenarios, customer rate impacts and cost of service results, the Commission directed staff to proceed with the rate design, effective October 1, 2015, to coincide with the effective date of BPA’s rate adjustments. A public hearing on September 15, 2015 produced no objections and the Commission adopted the increase in electric rates. In October 2016, residential customers saw another increase (see Appendix L).[iii]
Pioneering Water Management: McMinnville Water and Light’s Award-Winning Journey
Over the years, the utility’s consistent water system improvements paid off with continued clean drinking water delivered to the citizens of McMinnville. The utility won the 2015 Best Tasting Water Competition for the Northwest Oregon Subsection, Pacific Northwest Section of the American Water Works Association, and honor previously garnered in 2011. In mid-September 2015, Water Superintendent Bob Klein and the Commission discussed the next phase of the four-stage Water Transmission Main project. With the completion of the tunnel stage, it was time to begin the preliminary design and survey services for replacing the 16-inch steel finished water transmission pipeline. The Commission awarded a $24,000 design contract to CH2M Hill and a $14,000 survey and easement agreement with K & D Engineering for the project.[iv]
During a joint meeting of the McMinnville Water and Light Commission and the City Council, held on March 22, 2016, General Manager Carr remarked about the recently completed water rights purchase from International Paper, YRWA and the water contracts with the cities of Carlton and Lafayette. He also noted progress on the utility’s capital improvement projects, including involvement with the City’s transportation bond-funded activities. The utility’s tasks for these projects required relocation of the power poles and line from the island between Adams and Baker, and relocating the power line from the Walnut City Substation to the intersection at Hill Road. Another task involved the installation of conduit along Alpine Street at Fifth prior to road improvements in that area. Other on-going collaborative projects with the City included substations, expansions and cable replacement, all a part of McMinnville Water and Light’s ten-year plan. Carr also provided a brief update on the utility’s electric and water rates and commented about McMinnville Water and Light’s low carbon emissions.
General Manager Carr then turned the meeting over to Engineering and Operations Manager Dietz, who outlined the current and upcoming water system projects, including the relocation of a 16-inch water main on Hill Road; replacement of pipe on Alpine Avenue; and new 24-inch and 16-inch steel transmission lines coming from the Scott Water Treatment Plant. He added that the utility had several large upcoming projects within the next 10 to 15 years.[v]
Connecting the Dots: McMinnville Water and Light’s Water System Enhancements
In April 2016, the Commission engaged Carollo Engineers to provide a Willamette River Regional Water System cost estimate, with the cities of Carlton and Lafayette sharing the $14,000 cost. In the meantime, CH2M Hill provided additional preliminary design services. This allowed the firm to revise the preliminary plan and profile drawings for replacement of the 16-inch steel water transmission line from the Luoto Intertie to the Sitton Intertie. Modifications on various properties for the consolidation of the 24 and 36-inch water-transmission-line easements took place throughout 2017 and into 2018.
The Commission had previously hired Stantec Consulting Services, Inc., to design the Finished Water Transmission Main project and, when the time came to request construction proposals, assemble bid documents, evaluate the bids received for responsiveness and responsibility, prepare a recommendation for construction award to the Commission and provide engineering services during construction. Phase 1 of the project included the bored tunnel and hook up to the Panther Creek intertie. Phase 2 involved installing 6,650 feet of a new 36-inch water-transmission main between the Luoto and Sitton interties. In February 2019, with the completion of the formal bidding process for Phase 2, and a receipt of a recommendation from Stantec Consulting Services, the Commission awarded the $3,998,815 construction contract to Moore Excavation (Moore).[vi]
BPA launched a pilot program for demand response in the spring of 2016. The agency sought alternatives to building a costly transmission line and, issuing a Request for Offers (RFO) aimed at reducing transmission line congestion in the summer months on high voltage lines that enter the Portland metro area from the north. In a very good position to respond to the RFO, and receiving approval from the Commission, McMinnville Water and Light staff approached CRSM about the program and it joined the utility in making an offer to BPA. Terms of the offer included an 85 (CRSM) to 15 (MWL) percent split of any revenue received by CRSM from BPA under the demand response program. The Commission authorized utility staff and legal counsel to negotiate agreement details, approving it soon after. The success of the program resulted in McMinnville Water and Light’s continued participation in 2018.[vii]
In the fall of 2016, the YRWA received a letter from Lafayette Mayor Chris Pagella proposing negotiations on a water supply contract. Mayor Pagella, Commissioner Gormley and General Manager Carr negotiated a water sales agreement through the YRWA. The group started the process by revisiting the draft contract, prepared for review in late 2015, and reviewing a written memorandum addressed to the City of Lafayette from the McMinnville Water and Light Commission, signed by Chair Tankersley. The process moved forward through the fall of 2017. Meanwhile, Carlton’s reservoir was low and the city had issues with silt and organics in the water. In September, Carlton City Manager Chad Olsen contacted General Manager Carr about his city’s need for water. Carr informed Olsen that while a physical connection existed, it required mechanical alteration to allow the flow of water. Opening the connection also required Commission approval, which Carr obtained on September 29, 2016, when the Commission gave their unanimous consent for him to sell water to the City of Carlton on an emergency basis for 21 days at a rate no greater than that charged customers living within McMinnville’s city limits.
From Mayor Resignation to Demand Response Agreements: McMinnville Water and Light in 2016
After running for a position as Yamhill County Commissioner and winning the seat in the May primary election, Mayor Olson resigned from his role as McMinnville’s mayor, effective October 1, 2016, to prepare for his new duties as commissioner, beginning January 1, 2017. As McMinnville’s acting mayor, City Council President Kevin Jeffries called the McMinnville Water and Light Commission meeting to order on October 18, 2016. Preparing to move forward on the Water Transmission Main Project, the Commission awarded a $302,456 engineering services contract for installation of 7,000 feet of 16-inch finished water transmission main to MWH America’s, Inc.
During a public hearing, held November 15, the Commission considered an increase in dark fiber rates. Finance Director Mark Carlton explained that the proposed rate adjustments took into consideration the fiber system costs and income necessary to pay for system maintenance and operation, with adequate reserves for contingencies to cover contemplated additions, extensions, replacement and improvements. Members of the public, including Mark Davis and Duncan Scott, came forward as proponents during the hearing, urging the Commission to expand utilization of the fiber asset to attract more businesses to McMinnville. After adopting the new rates, the Commission instructed staff to schedule a discussion on December’s agenda to review the suggestions brought forward during the hearing.
McMinnville Water and Light received the Willamette River Regional Water System cost estimate report from Carollo Engineers in September. Commissioner Gormley and General Manager Carr reported that the City of Lafayette leaned toward a water supply contract, while the City of Carlton was examining an ownership option. The Commission reviewed and discussed the contract terms under negotiations with Lafayette before adjourning its November 2016 meeting.[viii]
Scott Hill became McMinnville’s new mayor in November 2016. Retiring after 37 years of banking industry service, including senior level leadership in the commercial and retail disciplines, as well as mortgage experience, Hill began civic service on McMinnville’s City Council, representing Ward 1 and after 12 years became Mayor of McMinnville. Committed to service in his home community, Hill also became involved with the McMinnville Chamber of Commerce, McMinnville Downtown Association, the Library Foundation, American Lung Association and the Oregon Partnership.
Mayor Hill called the Commission’s December 2016 meeting to order. Power Resource Manager Rozanski presented two final Demand Response Agreement contracts for approval. The Commission approved both through Resolutions 2016-7 (the Demand Response Agreement contract between McMinnville Water and Light and BPA) and 2016-8 (the Demand Response Agreement contract between Cascade Steel Rolling Mill and the utility).
The Changing Landscape of McMinnville Water and Light in 2017
Utility Financial Solutions updated the electric cost of service analysis in January 2017 and the Commission welcomed Mark Beauchamp back in June for a workshop to review the study results, during which he commented on the progress made with residential rates in recent years. BPA updated its rate information later that summer and staff followed with proposed rates for consideration soon after. Upon receiving the proposed rate adjustments from Financial Analyst Jaime Phillips, the Commission set a public hearing to consider the matter on September 19, 2017. During the public hearing, Phillips stated that the cost of service study results indicated that the utility’s projected revenues at the current rates were not sufficient to meet revenue requirements, primarily due to an increase in the wholesale power cost from BPA. The proposed rate adjustments would recover increased power costs and meet overall revenue requirements, maintain a positive operating income, maintain healthy cash reserves, and better align customer classes with cost of service. Hearing no comments or objections, the Commission adopted the electric rate adjustments, effective October 1, 2017. Additional rate adjustments took place during 2018 and 2019 (see Appendix L).[ix]
The utility was very involved with city-wide improvement projects from 2017 through 2019, made possible through a 2014 transportation bond measure. In the spring of 2017, the Commission approved an Intergovernmental Agreement (IGA) with the City of McMinnville for the construction of water and electric facilities in the Alpine Avenue area as part of the NE Gateway project. Set up as a reciprocal agreement, the utility paid for its portion of the new facilities while the City served as the contracting agency to enforce warranty and bond rights under the construction contract. The Commission authorized the use of $579,000 from the Electric Underground Conversion Fund as a means to address other infrastructural changes scheduled to begin in June as part of the City’s street improvements, including areas along NW Second Street from NE Adams to SW Elmwood and along NE Adams between First and Third streets. In May, based on Engineering and Operations Manager Dietz’s recommendation, the Commission approved a $227,000 contract with Brown & Kysar, Inc., to replace 1.3 miles of distribution line on Hill Road, as part of the City’s road realignment project. The relocation of a quarter mile of 115 kV transmission line on West Second Street required qualified engineering services, and the Commission approved a $100,000 contract with TriAxis, a division of David Evans and Associates, to conduct the work. In June, Engineering and Operations Manager Dietz discussed a new hotel project with the Commission. Located at NE Ford and NE Fourth streets, the project involved conversion to underground utility service for the new Atticus Hotel and adjacent business customers. The Commission approved the use of $36,076 from the Electric Underground Conversion Fund for the project.[x]
In June 2017, General Manager Carr introduced a resolution for Commission consideration, which outlined the purchase, from Yamhill County, of 5.5 acres of property known as the SE Mallard Lane site and located on Grand Island along the Willamette River. The Commission authorized the $165,000 purchase to serve as the future regional water intake site. With the approval of the sale by the Yamhill County Commission, McMinnville Water and Light became the site’s owner on August 18, 2017. In December, the Commission authorized a $53,444 contract with Carollo Engineers to conduct the Willamette Intake and Raw Water Pump Station Site Study at the SE Mallard Lane location. The study examined river depth, ground stability and riverbank erosion. Impressively, the bank condition was nearly the same as found during the first survey, conducted in the 1850s.[xi]
During their July 18, 2017 meeting, the Commission recognized Attorney Dave Haugeberg for his 37 years of service with a plaque and each commissioner expressed their deep appreciation for his excellent legal counsel and considerable contributions to McMinnville Water and Light. The Commission also recognized the law firm, Haugeberg, Rueter, Gowell, Fredricks & Higgins for its years of service to the utility. Known “[a]s the oldest law firm in Oregon”, it had represented McMinnville Water and Light’s legal interests since the utility’s early years. Haugeberg served the utility from 1980 through 2017 and had succeeded Eugene Marsh as McMinnville Water and Light’s legal counsel, and Marsh had served in the role since the mid-1920s until his retirement in 1980. Transitioning from the law firm Haugeberg, Rueter, Gowell, Fredricks & Higgins and serving McMinnville Water and Light alongside Haugeberg for many years, Sam Justice was hired as an employee and became the utility’s first in-house General Counsel upon Haugeberg’s retirement in 2017.
Attorney Justice received his undergraduate degree from Portland State University and his JD from Lewis and Clark Law School. His legal experience included service as a Yamhill County Deputy District Attorney, and a shareholder in the Haugeberg-Rueter law firm. He also spent time in service as a pro tem circuit court judge and juvenile court referee, and as secretary for both the Yamhill County Bar Association and the McMinnville Lions Club, as a board member of the McMinnville Chamber of Commerce, president of the McMinnville Downtown Association, and in both the US Army and US Army reserve.[xii]
Continuing future planning and contingency strategies, the Commission authorized staff to construct a 60-by-40-foot building with a septic system at the service reservoir site on Fox Ridge during the summer of 2017. The new structure served as storage and as an alternate site for operations in case of an emergency. In October, Engineering and Operations Manager Dietz presented an opportunity to purchase 1.5 acres surrounding the Baker Creek Substation. The Commission voted unanimously to acquire the property, with staff negotiating a final purchase price of $175,000 and paving the way for the planned Baker Creek Substation expansion. The following month it authorized the $1,396,542 purchase of two substation transformers from SPX Transformer Solutions: one as replacement at the East McMinnville Substation and the other for use with the upcoming Baker Creek Substation expansion. In February 2019, the Commission and General Counsel Justice discussed the City of McMinnville land use application related to the Baker Creek Substation’s expansion project. The application included a comprehensive plan map amendment, zone change, conditional use, and amendment of planned development overlay. The Commission approved the land use application and directed Justice to issue notices, conduct a neighborhood meeting, and carry out the other necessary tasks for the permit.[xiii]
The year 2017 brought about many retirements for the MW&L staff, culminating in the loss of 173 years of experience. Among them, General Manager Carr announced his intention to retire before the end of 2017. During a special meeting, held on July 26, 2017, members of the Commission discussed the hiring process, later adopting hiring procedures and criteria for the position of General Manager. General Manager Carr suggested the utility place advertisements for the position in industrial association publications, including the Northwest Public Power Association, American Water Works Association and the American Public Power Association. Commissioners Gormley and Keyes served as the subcommittee to review applications and make recommendations about the hiring of a new General Manager. After reviewing 15 applications and interviewing five, the subcommittee selected two for final interviews on October 5. During a special meeting held the following week, Commission Chair Tankersley announced that based on application materials, references and the interviews, that he felt John Dietz was the best candidate for the General Manager position. The other Commissioners agreed unanimously. General Manager Carr agreed to extend his employment through November 30, 2017 to assist with the transition to incoming General Manager Dietz, who would assume the role on November 1.[xiv]
Expanding Horizons
John Dietz brought 25 years of experience to McMinnville Water and Light when he joined the utility as the Engineering and Operations Manager in 2008. After working at Cowlitz PUD for 20 years, John spent time working for a family construction business in California and soon decided he would rather settle back in the Pacific Northwest. When he met McMinnville Water and Light’s General Manager Paul Elias, he really admired him, which led to his moving to McMinnville and working for the utility. Dietz became active on several boards and committees focused on community development and utility interests including the Public Power Council (PPC), McMinnville Economic Development Partnership (MEDP), Oregon Municipal Electric Utilities Association (OMEU), and the McMinnville Urban Renewal Advisory Committee (MURAC). He was also a licensed electrical engineer with a Bachelor of Science in Electrical Engineering from Washington State University.
Looking back at McMinnville Water and Light’s history Dietz commented, “I was impressed that a city with a population of less than 1,500 had the convenience of running water and electricity dating back to 1889.” Continuing, Dietz said, “It demonstrates a determination and vision that has persevered generation after generation until today, where we have an amazing utility with a long history of low rates, high reliability and no debt.”[xv]
The Commission continued to acquire land for the utility’s watershed. In August 2017, Brent Keller, of Mason Bruce and Girard, reported that a property owner, with land near the McMinnville Water and Light watershed, offered to sell it to the utility. Keller visited the property, which consisted of 15 acres contiguous to the watershed, recommended its purchase to the Commission, which approved the $165,500 acquisition. The utility also acquired a two-acre parcel situated adjacent to the watershed the following year.
Clerk Mary Ann Nolan announced her intention to retire, effective October 31, 2017 and the Commission passed Resolution 2017-16, recognizing 40 years of contributions in service to McMinnville Water and Light. Staff proposed Trena McManus as the interim Clerk, effective November 1, to serve out the rest of Nolan’s term.[xvi]
Other staff retirements during the year included Power Resource Manager Rick Rozanski (1984-2017, 33 years of service), Equipment Supervisor Bob Banke (1988-2017, 30 years of service), Finance Director Mark Carlton (2007-2017, 10 years of service), Joint Use Coordinator Dave Barks (1985-2017, 32 years of service), and Water Distribution Supervisor Terry Olson (1995-2017, 22 years of service).
The Commission appointed General Manager John Dietz as the utility’s representative on the MEDP Board during its November 21, 2017. MEDP Executive Director Jody Christensen updated the Commission on the organization’s activities during the same meeting, thanking the Commission for its support. Commissioner Gormley congratulated Christensen for receiving the Oregon Economic Development Association’s 2017 Business Development Success Award for the Organic Valley Project. Wisconsin-based Organic Valley purchased McMinnville’s Farmers Creamery Cooperative, renovating it and reopening it as Organic Valley Creamery.[xvii]
Closing out 2017, General Manager Dietz reported on the Energy Efficiency Initiative (EEI) program, funded by BPA. McMinnville Water and Light had $2,676,274 available to spend on conservation measures during 2018 and 2019. The Commission authorized staff to hire Efficiency Services Group (ESG) to help plan McMinnville Water and Light’s effective use of the funds. Introducing potential future energy-efficiency-measures such as mailers, direct install-visit packages, and low-income programs the utility could make available to its residential customers, Conservation Specialist David Christie returned in March 2018, presenting a proposal for a multiple-phase residential energy efficiency project. Approved by the Commission, the utility kicked off the $1,080,000 program by mailing a 4-pack of 9-watt LED light bulbs to each of its residential customers. Once received, the customer could request a second kit or a home visit for direct installation. The second kit included more LED light bulbs, an Advanced Power Strip and a water-saving showerhead (if they used an electric water heater). The invested EEI funding provided energy saving measures to 970 homes, savings of nearly ten million kilowatt hours over the two-year period and, due to BPA reimbursements; it generated positive revenue for the utility. Due to its success, the Commission authorized the continuance of the program through September 30, 2021, amending ESG’s direct install contract, and allowing for $1,695,028 in available EEI funds through the BPA program.[xviii]
The Evolution of Business Systems at McMinnville Water and Light in 2018
During its first meeting of 2018, the McMinnville Water and Light Commission consisted of Mayor Scott Hill, Commission Chair Tom Tankersley and Commissioners Patrick Fuchs, Edward Gormley and Mike Keyes. Key staff included General Manager John Dietz, General Counsel Sam Justice, Interim Clerk Trena McManus, Finance Director Mark Dunmire, Electrical Distribution Superintendent Scott Rosenbalm, Water Superintendent Bob Klein, Purchasing Manager Chad Hudson, and Senior Power Analyst Jaime Phillips. Brent Keller represented long-time consulting firm Mason, Bruce and Girard. During the meeting, the Commission voted unanimously to elect Trena McManus as Clerk of the McMinnville Water and Light Commission.
As the Commission’s fifth clerk, McManus reflected upon the position’s role over the utility’s history. “In the early days of the clerk position, they had much more involvement in customer collections and finance. As the town and utility grew, departments formed and there is less clerk involvement in those areas today,” she said. “This position has always worked closely with the General Manager, and been closely tied with the Commission, scheduling meetings, planning agendas, attending meetings, and taking minutes.”
McManus also noted changes in business systems and operations since in the beginning of new millennium, and the transition by utility staff from working with paper documentation to mostly digital systems.
“Since I started working at McMinnville Water and Light, I have definitely seen a shift to a more digital world. We have implemented programs like Document Vault for electronic storage of documents, Call to Order for commission packets, Employee Self Serv for electronic timesheets, and a digital process for signing up for electric and water service,” she said. “Paper is still a part of our everyday life, but it has significantly decreased in the last 10 years.”[xix]
RP3 Gold Recognition and Infrastructure Projects
Utility Financial Solutions conducted an updated water cost of service analysis in February 2018. UFS completed the previous study in 2012. Mark Beauchamp of UFS presented the cost of service study during a public hearing on June 12, 2018. As part of the utility’s five-year strategic plan, Beauchamp recommended annual increases from 2018 through 2022. During a second public hearing, held a week later, the Commission considered the increased water rates. Finance Director Mark Dunmire testified that the proposed rate changes would provide for the continued funding of future capital improvements and extensions to the system while maintaining an appropriate cash balance. New items in the rate schedule included a Remote Read Meter Opt Out Fee of $2 per month and a Water Service Installation / Facility Construction Fee of Actual Cost. After polling hearing attendees for comments, and hearing none, the Commission approved the water rate increase for 2018, with future increases subject to annual public hearings over the next five years. [xx]
In May, General Manager Dietz commented on staff’s progress in negotiation efforts with BPA to purchase the Walnut City 115 kV tap line, several miles of transmission line and right-of-way. The utility set its proposed purchase price at $40,000 for the line, which traveled from switch B-1292 (near the intersection of Highway 47 and NE Highway 99W) to the termination of the line at the McMinnville Walnut City Substation. During its January 15, 2019 meeting, the Commission directed General Counsel Justice to move forward on purchase negotiations. The purchase included approximately 4.5 miles of 115 kV transmission line, 98 poles, two 115 kV switches and the assignment of 32 easements subject to a 180-day due diligence period for addressing conditions of the sale, which became official through Resolution 2019-24 by a unanimous vote.[xxi]
Water supply issues continued for the cities of Carlton and Lafayette. During a Commission meeting held in August, General Manager Dietz revisited the utility’s 2016 emergency water supply agreement with the City of Carlton and a new draft Lafayette Water Purchase Agreement. Commission Chair Tankersley and Commissioner Gormley reviewed the Lafayette agreement with General Counsel Justice and after discussing the issue during an executive session on October 16, the Commission directed staff to make noted changes and forward the contract to the City of Lafayette for review and consideration. Also during the October meeting, Commissioner Gormley updated the Commission on YRWA activities, including a report from Carlton’s new city manager, Dennis Durham, who stated that his city was in the planning stages for a reservoir-dredging project, which could last up to a year, and they needed to address water requirements during that time.[xxii]
McMinnville Water and Light staff submitted an application to the American Public Power Association’s (APPA) Reliable Public Power Provider (RP3) program on September 30, 2018. The RP3 designation recognizes utilities for sound business practices, reliable and safe electric service, workforce development, and system improvement. Joining more than 270 public power utilities across the United States, McMinnville Water and Light received a gold level RP3 designation during the spring of 2019.
Presenting the designation during the association’s annual conference that year, APPA RP3 Review Panel Chair Aaron Haderle commented, “Receiving an RP3 designation is a great honor. It demonstrates that a utility strives for a high level of service and is constantly looking to improve … Aside from demonstrating reliability, these designated utilities have shown commitment to system improvement, safety, and developing a strong and sustainable workforce.”
Accepting the RP3 designation, General Manager Dietz said, “We take a lot of pride in the work we do to power our community. It’s nice to be recognized as among the ‘best of the best’ on a national level.”[xxiii]
McMinnville Water and Light continued its practice of efficient and collaborative work practices. The Oregon Department of Transportation began designing a replacement for the Three Mile Lane Bridge (also known as the Yamhill River Bridge) in early 2018. ODOT had previously replaced the original wooden covered bridge known as “Old River” located a bit to the southwest – or down river – with a steel truss bridge in 1914, the same year McMinnville Water and Light ran an electric line out the Old Dayton Road. Then, in 1951, while realigning Third Street with Old Dayton Road (and renaming it Three Mile Lane) as part of the Highway 18 Bypass, ODOT replaced the second bridge with a concrete and steel girder deck, and a wood substructure. The City of McMinnville contracted with OBEC engineers to design a sewer main attached to the bridge and City staff recommended OBEC for designing McMinnville Water and Light’s water, power and fiber optic attachments as well. The Commission approved a $114,452 design services contract with OBEC for the Three Mile Lane Bridge project.[xxiv]
A Year of Progress: McMinnville Water and Light’s 2018 Highlights
The Hill Road project picked up steam in May 2018 with Commission approval of the $1,475,000 proposal from Pacific Excavation for installation of vaults and conduit via open trenching. The Commission issued a change order on the Hill Road project in late summer, which avoided a later redesign forecasted in City right of way projects, reducing future utility costs at the intersection of Hill Road and NW Second Street. The utility added $46,610 worth of additional conduit and vaults in the change order; however, it eliminated 370 feet of conduit installation, which saved $31,374. Mayor Hill and General Manager Dietz closed out the November 2018 meeting commending utility crews working on the Hill Road project for their joint effort with City crews to facilitate a smooth project.[xxv]
After nearly 30 years at the Marsh Lane address, McMinnville Water and Light began upgrading its facilities, starting with the front office and reception area of the main building in early 2017. Contracting with Cedar Mill Construction Company, the $161,690 project included Plexiglas customer service windows and a security door. The utility also embarked on an LED lighting project at the facility, hiring Conserve Energy to do the work for $15,305. In 2018, maintenance required the replacement of leaking windows and an inferior storefront door system in the main building and a new roof for the warehouse, all completed by Garland / DBS for a total of $574,545. In August, the utility participated in comprehensive condition and seismic assessments of its four Marsh Lane facility buildings by EMG Consulting for $23,600 as part of a larger evaluation of City-owned structures. The facility also received new carpet from Roby’s McMinnville for $23,074 in the fall that year.[xxvi]
Electric Superintendent Scott Rosenbalm became McMinnville Water and Light’s Electric Division Director on May 10, 2018. A Willamette Valley native, Rosenbalm grew up in Dallas and worked on farms in both Polk and Yamhill counties while attending high school. His educational background in forestry contributed to an understanding about utility pole harvesting and tree trimming for system safety and reliability and his surveying experience helped him with the mapping and easement issues involved with right-of-way issues. Settling in McMinnville to raise his family in 1990, Rosenbalm joined the utility as an Apprentice Lineman in 1992, advancing to a Journeyman Lineman role in 1995 and Electric Superintendent in 2004. He also became active in several industry and local service organizations over the years, serving with the McMinnville Lions Club, Oregon Municipal Electric Utilities’ Engineering and Operations group, and as past President of the Oregon Joint Use Association.
Reflecting upon the utility’s 130-year history, Rosenbalm spoke about early twentieth century McMinnville, when the Baker Creek Hydroelectric and Diesel Power Plants still operated. Power generated by those plants flowed to small substations, located in neighborhoods like Fellows Street and Brockwood Hill, Ford Street and College Avenue, for distribution to local homes. The substations served the community well for over 40 years.
“The utility removed the neighborhood substations when the Diesel and Baker Creek plants ceased operation and power came exclusively from BPA,” said Rosenbalm. “The smaller substations used lower voltages, which increased from 4 kV up to the 12.4 kV with BPA power.”
The 15,000 volts of power from BPA transmission lines steps down at the local substations for distribution through transformers to McMinnville’s homes and businesses. The utility’s distribution system grew to include eight substations (Baker Creek, Booth Bend, BPA – East Mac 1 and 2, Cascade, Gormley, Walnut City and Windishar), with the Baker Creek Substation scheduled for expansion in the coming months.[xxvii]
James Burke joined McMinnville Water and Light as the new Water Division Director in July 2018. The previous month, Commissioner Mike Keyes submitted his resignation, attending his last meeting on June 12, 2018 after 15 years of service on the McMinnville Water and Light Commission. The Commission welcomed back Nancy Carlton in August, noting her previous service in 2006. Commissioner Carlton’s background included experience working on development of alternate energy technologies while working for the California Energy Commission.
Transmission Tariff Resolution and Watershed Security
In late 2018, the BPA avoided a fight in court over terms and conditions relating to its long-term transmission customers. Bringing the issue up during the Commission’s November 2018 meeting, Senior Power Analyst Jaime Phillips relayed that the new agreement allowed BPA to provide a better response to the changing transmission environment. Through two months of negotiations, BPA offered a new Open Access Transmission Tariff and a lower rate increase (4 percent compared to 9.5 percent originally proposed) to utilities accepting it. Phillips told the Commissioners that the settlement agreement results brought three main items favorable to McMinnville Water and Light, including removal of FERC from the transmission tariff process, giving BPA customers more involvement and input in the process; lower risk and costs; and concessions by BPA favorable to the utility’s customers.[xxviii]
An uptick in trespassing incidents took place in the McMinnville Water and Light watershed during 2018, with ten individuals receiving citations to appear in court. Because of the increased instances, Water Superintendent Klein asked the Commission to consider adoption of proposed watershed access rules for the safety of the utility’s personnel, the security of its facilities and the protection of its source water and timber. The Commission adopted the new rules, approving them under Resolution 2019-2 and thereby ensuring continued protection of McMinnville’s vital water resource.
Changing technology created a need to amend McMinnville Water and Light’s Joint Use Construction Standards. Introduced by Electric Division Director Rosenbalm, the Commission adopted the amendment, which addressed wireless attachments to ensure they met the National Electric Safety Code and did not compromise the electric system or work safety. The Commission adopted the amended standards as well as a form of Joint Use License Contract for use with wire and wireless attachments.
Lafayette Water Purchase Agreement: A Milestone for McMinnville Water and Light
The Water Purchase Agreement between the City of Lafayette and McMinnville Water and Light finally came to fruition on March 19, 2019, and the Commission voted unanimously for its authorization and approval. The 21-year, wholesale contract supplied Lafayette with a limit amount of McMinnville’s surplus water.
“This was the first step and a short-term bridge for supplying and building a regional water treatment facility,” commented General Manager Dietz. “McMinnville looks at this future regional plant as a second source. Lafayette is looking at this plant as their future long-term supply for growth.”
Presenting the final document to the Commission, General Counsel Justice commented about the recent ongoing discussions, which began in 2017; however, authorization and approval of this water supply contract was the culmination of decades of discussion, dating back to the 1970s. Commission Chair Tankersley responded by expressing satisfaction with the outcome that resulted in a fair and beneficial agreement for McMinnville’s ratepayers and the City of Lafayette.
“The agreement with City of Lafayette allows for the transmission intertie with McMinnville Water and Light with a defined minimum and maximum draw purchased at a rate that is one-and-a-half-times that paid by the utility’s customers,” said Tankersley. “This is possible due to the availability of surplus water, which the commission believes will continue during the fixed term of the Lafayette agreement.”
Lafayette’s use of water supplied by McMinnville Water and Light is limited to the city’s service territory. Further, today’s State of Oregon regulations limit McMinnville Water and Light’s ability to extend urban services into rural areas because doing so encourages development of farmland. The only exception to the regulations occurs when easements allow for hook ups to water mains that traverse rural properties.
As the March meeting wrapped up, Commissioner Fuchs recognized the utility’s staff for years of hard work on the Lafayette Water Purchase Agreement and Mayor Hill shared a Regional Cooperative Project award, presented by the Mid-Willamette Council of Governments during its annual meeting, to Yamhill County and the cities of Carlton, Lafayette and McMinnville. The award recognized their cooperative efforts in developing a future regional water system. McMinnville Water and Light often extended its community service efforts beyond the city it served. For example, continuing a practice begun during the aftermath of the Columbus Day Storm, the utility dispatched a line crew to Eugene’s Emerald PUD to provide assistance with snowstorm outages. The utility was also one of six companies to participate in programs such as MEDP’s Career Pathways during the summer of 2019. Over the years, utility staff and members of the Commission participated in numerous service organizations and served on numerous boards, including the Economic Vitality Leadership Council, established by City ordinance 5062 to help implement the City’s MAC Town 2032 Strategic Plan. Commissioner Carlton agreed to serve a three-year term on the Leadership Council in May, with General Manager Dietz or General Counsel Justice attending in her absence.
2019: A Year of Water Infrastructure Progress for McMinnville Water and Light
Later in the summer of 2019, the Commission revisited the subject of additional water rights on the Willamette River, voting unanimously to hire GSI Water Solutions to manage the acquisition of future rights and provide technical support relevant to the ongoing management of the same. Moving forward on the Lafayette water project, the Commission authorized and approved a $406,017 design and construction services contract with Stantec Consulting Services for over 7,000 feet of 24-inch finished water transmission main as part of the project.
At year-end, Phase 2 of the Finished Water Transmission Main project reached substantial completion, on budget. Moore Excavation finished construction of the Fir Crest Road intertie and, in mid-November, performed commissioning tasks with utility staff witnessing the pressure testing and disinfection process. On November 19, 2019, water flowed from the WTP, through the tunnels and the Panther Creek intertie, into the new 36-inch water transmission main to the new Fir Crest Road intertie, then on to the service reservoirs and into McMinnville’s distribution system to the taps of homes and businesses. Moore also completed the duct bank, consisting of four three-inch conduits with 26,000 feet of conduit installed for future fiber and power.[xxix]
Senior Power Analyst Phillips updated the Commission about the Oregon Renewable Portfolio Standard (RPS) and McMinnville Water and Light’s inventory of Renewable Energy Certificates (RECs), reminding the Commission of the utility’s obligation to supply 10 percent of its electricity from qualifying renewable energy sources beginning in 2025. Phillips noted there was no forecasted RPS obligation for McMinnville Water and Light’s distribution customers as qualifying resources served them exclusively; however, the industrial customers would have an obligation because they received power from some non-qualifying resources. Phillips and the Commissioners discussed the utility’s REC balance, future obligations, and the potential market for selling excess RECs. Phillips returned in May, reporting on the utility’s banked RECs, potential sale of excess RECs and development of a method of sale in the form of a Request for Offers to sell the surplus. In June, the Commission approved an updated public contract policy, which addressed the sale of RECs as surplus property, under Resolution 2019-9. Following that approval, Phillips presented a staff proposal to declare 35 percent of the utility’s banked RECs as surplus, noting staff’s careful consideration of forecasted REC accruals through 2030 as well as future RECs needed to meet RPS requirements. The Commission voted unanimously to declare the listed RECs as surplus property, directing staff to solicit bids for their purchase.
Phillips became McMinnville Water and Light’s Power Resource Manager in November 2019. Growing up in the Willamette Valley, attending Oregon State University and graduating in 2000 with a Bachelor of Science degree in Agriculture Business Management, she went to work as an administrative assistant with the City of Tigard’s Public Works Department. Becoming a management analyst in 2003, she played a key role in budget administration, purchasing and contracts for the Public Works Department. Joining the utility as a financial analyst in 2008, Phillips assisted with rate design development, electric cost of service studies, and served as a backup for Power Resources Manager Rick Rozanski, who retired from the utility on November 30, 2017. From 2017 through 2019, she held the title of Senior Power Analyst, transitioning to Power Resource Manager on November 1, 2019. Today, Power Resource Manager Phillips directs, plans, and manages the utility’s conservation programs and power resources, including power and transmission contracts. She conducts load forecasting, which involves analyzing projected needs for power in future years and helps with BPA’s rate cases every two years. Similar to McMinnville Water and Light, the BPA’s rate case involves an analysis of its costs and the costs it will pass on to its customers. Assessing resources and forecasting adequacies in meeting the needs of the entire region, including McMinnville, and considering all the regulations involved, such as environmental concerns relevant to emissions and carbon. All play a role in the analysis.
Looking to the future, Power Resource Manager Phillips said, “Bigger challenges are ahead. When I joined McMinnville Water and Light, the utility had just signed the 2008 BPA contract, which included a new, tiered rate methodology. It was a big shift in how we purchased power. It took a lot of preparation and analysis to be sure that we correctly passed costs along to our residential, commercial and industrial customers. We are facing that challenge again with the renewal of the BPA contract in 2028.”[xxx] 125 Years of Reliable Power, Clean Water, & Excellent Customer Service (2000-2014) Epilogue (2020 & Beyond)