s was recited. PUBLIC UTILITIES COMMISSION ELECTRIC DIVISION 100 JOHN STREET WALLINGFORD, CT DRAFT

1 2 3 4 5 6 7 DRAFT PUBLIC UTILITIES COMMISSION ELECTRIC DIVISION 100 JOHN STREET WALLINGFORD, CT Tuesday, August 16, 2016 6:30 p.m. 8 9 PRESENT: Chairman Robert Beaumont; Commissioner Patrick Birney; Director George Adair; 10 Electric Division General Manager Richard Hendershot; Office Manager Thomas Sullivan; Water 11 & Sewer Divisions General Manager Neil Amwake; Office Manager William Phelan; Town 12 Attorney Gerald E. Farrell Sr.; Recording Secretary Cynthia Kleist; 13 Public: Ed Grant, K&J Tree Removal; Rhoda Kreisman; Steve Gale; Bob Gross. 14 1. Chairman Beaumont called the Meeting to order at 6:30 p.m. and the Pledge of Allegiance s was recited. 16 2. Discussion and Action: Approval of the Meeting Minutes of July 19, 2016 and 17 August 4, 2016. 18 July 19, 2016 Meeting Minutes-Mr. Birney made a motion to approve the July 19, 19 2016 Meeting Minutes as amended. Mr. Beaumont seconded the motion. 20 On Page 7, line 23, "Amway" should be "Amwake". 21 On page 10, line 10, should read "Mr. Sullivan" not "Mr. Phelan". 22 Vote: 2 ayes 23 August 4, 2016 Meeting Minutes - Mr. Birney made a motion to approve the August 24 4, 2016 Meeting Minutes as presented. Mr. Beaumont seconded the motion. 25 Vote: 2 ayes. 26 3. Discussion and Action: Approval of the Director's Report for the month of July 27 2016.. Mr. Birney made a motion to approve the Director's Report for the month of 28 July 2016. Mr. Beaumont seconded the motion. Regular Mee~ing August 16, 2016 Page 1

- 1 ELECTRIC DIVIS10N - 2 Mr. Adair noted that July saw a slight increase in energy delivered to the system, and a slight 3 decrease in the peak. He said there were 83 street light repairs made and noted that Nick 4 Russo was promoted to Meter Technician B, effective August 1. 5 LS Power/Wallingford Energy Plant Expansion Project 6 Mr. Adair said work is ongoing and it appears there will be some further changes to the 7 substation, which had been modified when CMEEC added Pierce. Mr. Hendershot explained 8 there will be a separate enclosure added for one of the battery racks which create the space 9 inside the building. 10 Wholesale Power Supply 11 Mr. Adair said in June, 91 % of WED's load was hedged; vs. a forecast hedging level for June of 12 88.8%. Actual load came in 4.4% less than forecast. Mr. Adair said WED's all-in wholesale 13 14 purchased power costs per MWh: June actual = $81.92; 2015/2016 FY budget forecast for June = $84.69; prevailing six-month average PCA forecast (5/1/16-10/31/16)-$81.74 per MWh. Mr. 15 Adair said the long-awaited adjustment has come through on the invoice. He said the great bulk 16 will come through on the regular Wholesale Power Cost, the portion for Bristol-Myers Squibb 17 and Nucor which relates to their load during multiple months. He said this is a cost in advance 1 8 the PUC had given instructions to not include in the next PCA (Power Cost Adjustment) J.9 calculations, so it will come from cash. Mr. Adair spoke about Craig Kieny's report, noting that 20 market costs are such that WED could do better than the energy forecast for years 18, 19 and 21 2020. 22 Mr. Birney asked about the resettlement of capacity charge. Mr. Adair explained the entire 23 amount will go against power costs, but WED tracks this separately for rate making purposes. 24 He said from the standpoint of the PCA calculation, the $346,402 is the amount if this wasn't 25 removed, would have added to the cost for the six-month period. Mr. Birney asked what the 26 term "applied" means. Mr. Sullivan said this will be a part of the purchased power cost which 27 gets analyzed for the purposes of the PCA, but will be the PUC's direction and will be subtracted 28 out before arriving at the cost of power which will result in the PCA in the next calculation. 29 MR. Birney asked about page 3 of Mr. Kieny's report which discussed hedging which stated 30 "WED was already at its maximum load for 2019-2020 and Ql of 2017". Mr. Adair said years 16 31 and 17 are booked up to 90%. He said in 2018, there is nothing WED can do, but in the fourth 32 quarter, this will slide forward and the 2018 would have some headroom in the fourth quarter 33 of this year. He said WED won't be able to buy anything for 2019 and 2020. He noted WED 34 could buy an additional 5% for next year. 35 WATER DIVISION August 16, 2016 Page 2

""',,:,-<"-'-' 1 Mr. Adair said water producuon fc r.july totaled 154.45-miilioii gahons, an ir.c:-ease of 7.15% 2 from July 2016. He said reservoir storage at month end was at 77.4% of total effective 3 impoundment vs. historical average for this time of year of 85.9%. Mr. Adair noted rainfall for 4 the month totaled 3.93 inches which is on par with the historical average, and is 112% greater 5 than the July 2015 rainfall. He said rainfall year-to-date totaled 24.40 inches, which is 13.4% 6 below the historical YTD average. 7 WASTEWATER DIVISION 8 Mr. Adair said at the wastewater plant, the average daily flow during July was 3.73 MGD a 9 decrease of 13% from July 2015. Nitrogen discharge for the month averaged 314 pounds per 10 day, above the current year permit target of 269 pounds per day, but lower than the July 2015 11 discharge rate of 315 pounds per day. The average concentration of phosphorous in the plant 12 effluent for the month was 0.66 parts per million vs. the permit limit of 0.7 ppm. The YTD 13 average concentration is 0.54 ppm 14 PRIVATE SIDE III MITIGATION 15 Division staff conducted 15 inspections, identified 6 issues, one of which has been corrected. In 16 support of its targeted inspection program in the area, staff distributed I/I informational flyers 17 to 126 homes in the I-91 pump station basin. Mr. Amwake said the biggest problem they have 18 seen has been sump pumps. He said postcard flyers will be sent to customers after Labor Day 9 and two other areas in Town have been targeted for I/I mitigation. 20 Vote: 2 ayes 21 WATER/SEWER 22 4. Discussion and Possible Action - Billing Issue- Kreisman 23 NO ACTION TAKEN 24 In her letter dated July 10, 2016, Ms. Kreisman said that on Feb. 21, 2016, there was a flood in 25 the basement as a result of the water main cracking. She said Service Master pumped the 26 water out of the basement and noted the water was not put into the sewer system. Ms. 27 Kreisman said in her conversations with Larry Regan of the Water & Sewer Division, he 28 indicated that she was responsible for the water usage as it is the owner's responsibility to keep 29 the basement at a temperature to avoid damage to the main. Ms. Kreisman said she has a large 30 heater in the basement that is set at 55 degrees in order to avoid bursting pipes. She said she 31 spoke with the person who pumped the water out of the basement, and he indicated the heater 32 which hangs from the ceiling, was working when he was on-premise. She said since the water 33 main is the property of the Town and since the crack did not occur as a result of the 34 temperature in the basement, she did not believe she should be responsible for the payment. August 16, 2016 Page 3

1 2 3 4 5 6 7 8 9 10 Ih"his All t1~fs; 2016 m~tn&,"rv1f: ffleiarrsafr:idrif'ei:hi9, 2016, a call was broadcasfi;.-0>.-er.the Town's radio freqnecy that there was a substantial amount of water in the basement at 393 Center Street. He said Water Division staff was dispatched to the location and the water was shut off at the curb. He noted since the water had been shut off and a meter reading obtained, a final bill was rendered for the period Dec. 9, 2015 through February 19, 2016 in the amount of $615.60. He said this bill represented water charges of $310.53 and sewer charges of $305.07. Mr. Phelan indicated on Feb. 22, 2016, Division personnel returned to the location, changed out the water meter and turned the water back on at the curb. He noted in accordance with Division policy, once it was determined that water from the leak did not enter the sewer system, a sewer credit of $277.63 was issued, thus revising the amount owned to $337.97. 11 Mr. Phelan said an inspection of the meter found that it had cracked, a condition which is 12 typically due to water freezing inside the meter. He said water then began leaking from the 13 cracked meter and flooded the basement. He noted the building manager, after speaking with 14 his employees, confirmed that the meter had frozen and the customer was issued an invoice for 15 the frozen meter in the amount of $145.00. He said to date, this invoice remains unpaid. 16 Mr. Birney said that after examining both sides of the issue, he noted that Ms. Kreisman had 17 evidence from the person who handled the problem for her, that there was a heater hanging in 18 the basement. He asked for a concrete statement from this person that the heater was 19 operational. He noted the building manager said the meter had frozen which in his opinion ends,o the story. He said he still did not have enough concrete evidence to make a decision. Mr. Ll Phelan pointed out the memo from Larry Regan of Water & Sewer, which was attached to his 22 memo from Mr. Amwake. Mr. Birney said he did not see this memo. 23 Ms. Kreisman said the building manager is employed by her. She noted the phones had gone 24 out and when the phone company arrived on scene, they noticed the water in the basement. 25 Ms. Kreisman said if there is a problem, she contacts the building manager who called someone 26 to pump the water out of the basement. Mr. Birney asked if this person was here to refute his 27 statement to the Water Division that the water meter had frozen. Ms. Kreisman said she was 28 told the meter was cracked. She said it wasn't because the pipes burst, but because the water 29 main cracked. She said she spoke to Mr. Regan who told her she was responsible to keep the 30 basement at a reasonable temperature. She said she had a heater which kept the basement 31 between 50 and 55 degrees. She noted none of the pipes froze so it couldn't have been that 32 cold in the basement. She said she paid most of the outstanding water bill to avoid a shutoff. 33 Mr. Birney said he would have a hard time agreeing to modify the bill when Ms. Kreisman's own 34 agent acknowledged to Mr. Regan that the meter had frozen. Ms. Kreisman said the water main 35 was frozen. Mr. Phelan said the water main is the owner's responsibility, so if it cracks, it cracks 36 by no fault of the Town. He said it will either crack through corrosion or freezing. He noted the 37 water main won't freeze if water is flowing through it. He said the Town's responsibility ends at 38 the curbline and from that point to the building or inside the building, this is the property August 16, 2016 Page4

"'~ <>;,,.:..;.....,... y 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 13 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 ' 'crvvner<s9espon5if:jflrty; ~r.. Phelan said Mr. Reg:un.frid~a.GHt;.was the water-tt::..@tec,.4'.lct.tb.e"';";.,c...-... ri-i water main and Ms. Kreisman was confusing the terminology. Mr. Phelan said a frozen meter bill was issued to Ms. Kreisman to replace this meter. Chairman Beaumont said based upon what was presented, no action would be taken. NO ACTION TAKEN PUBLIC QUESTION & ANSWER PERIOD - 7:03 p.m. Mr. Gross asked about solar and if the Town had any intention of looking at solar as an energy source or investment. Chairman Beaumont said the Town has not looked into this and there is nothing on the drawing board at this time. Mr. Adair said he knows that WED did find that in the capacity auction for 2019-2020, there were several megawatts and some in earlier auctions. He said to the extent that solar units clear in the capacity auction and are part of the supply, it is a source of supply. He said WED has funds available for incentivizing the installation of solar by its customers; i.e. Choate Rosemary Hall, Proton Energy, a bank and two or three residential. He said the total amount is approximately 67 megawatts. In response to Mr. Birney's question, Mr. Adair said the 66 of the 25,000 is solar. Mr. Gross said other entities are getting into solar, including CMEEC. Mr. Adair said CMEEC is not a distributor and doesn't have rates. Mr. Gross said CMEEC is partaking with Solar City and producing approximately 4 megawatts. He said CMEEC has one solar farm in production and will have another solar farm by the end of the year. He asked why WED doesn't get involved in something of this nature. Chairman Beaumont said this will increase rates because of higher costs. He said once the storage gets to the point where it is economically feasible, then there is a possibility it will become more viable. Mr. Gross argued that if WED is not even looking at this possibility of solar, how they know it isn't viable, even if CMEEC believes it is viable. Chairman Beaumont said just because CMEEC is doing this, doesn't mean it is viable. Mr. Gross noted that at a previous meeting, it was stated rates were increasing because of distribution costs. Chairman Beaumont said transmission will raise the rates. Mr. Gross said if CMEEC's load is taken off the system, would everything stay constant. He asked if bringing the energy in would also be responsible for increasing the rates, not just the cost. Mr. Hendershot said the transmission costs are based on installed plans. He said adding any form of generation in Wallingford won't lower WED's share of transmission cost to be paid because all load will pay them. He said the Town constructing and owning solar as a capacity resource, the availability factor would have to be factored in because solar is available a certain amount of time. Mr. Adair said currently there are no projects or investments under way for solar. Mr. Gale asked about the CMEEC litigation. Mr. Adair said there have been no rulings and noted the ruling for Summary Disposition is scheduled for after Labor Day. Mr. Gale asked what would prevent WED from using the energy funds the ratepayers pay to come up with a program to August 16, 2016 Page 5

r... -, "1'..,-....l'J.~,.... ''i 2 3 install solar. Mr: tlertcf"er~fi i;ajtj,the most. 'GdSt.m~tiv~~'bE~'cUh~s r;,:{mey is to help custom0.r-c.... ".. --~:.,,.,~...,,.-. T.r'::-~ ; ""'t.::r~o. ':'i:... ""'">;;:'.~,.,,-, ~ reduce their energy consumption; the most valuable kilowatt hour to a customer is the one they don't buy. He said this is a better use of this fund-to build supply. 4 5 6 7 8 9 10 11 12 13 14 15 16 17.8 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 END OF PUBLIC QUESTION & ANSWER PERIOD - 7:15 p.m. WATER/SEWER 5. Discussion and Action: Water Division - Budget Transfer- Property Insurance - FY 2016-2017. Mr. Birney made a motion to approve a budget transfer in the amount of $1,700 in Account #43100924 (Property Insurance) from Account #43100925 (Injuries and Damages). Mr. Beaumont seconded the motion. In his August 8, 2016 memo, Mr. Amwake noted that the Water Division has received actual property and liability insurance premium invoices for the current fiscal year. Based on these invoices, the property insurance premiums exceed budget projections by approximately $1,700. He said although sufficient funds were budgeted as total insurance purposes, the relative amounts for property and liability insurance premiums are different than expected. As a result, the Water Division is requesting a transfer in the amount of $1,700 to the Property Insurance Account from Injuries and Damages Account. Vote: 2 ayes 6. Discussion and Action: Water Division - Budget Transfer- Worker's Compensation Reserve - FY 2015/2016. Mr. Birney asked how the $22,700 amount was arrived at. Chairman Beaumont said this is for the last fiscal year. Mr. Birney noted the true-up is at the end. He said the budget process is April and May and asked what the process was to reach the decision on what the ultimate budget is. Chairman Beaumont reiterated this is 15/16 not 16/17. Mr. Phelan explained that throughout the FY July 2015 through June 2016, payments are made to employees for their permanent disabilities. He said no one knows what the amount will be for the entire year, so this is paid out of the normal 925 Worker's Compensation Account and have a reserve which replenishes the disability payments to these employees. He said there is no budget per-se for every payment for a permanent disability rating, it is paid out of the reserve and trued-up at the end of the year. Mr. Birney asked why the true-up process isn't in the budget process. Mr. Phelan explained expenses aren't known. He said the Division prepares a 2015/2016 budget in Feb. and March of 2015 and have no idea what amounts will be awarded to the employees. Mr. Phelan said there is a Worker's Compensation Fund in the operating budget, and any balance that remains in that fund as of June 30 of the year, is used to offset the payments that the Division has made. August 16, 2016 Page 6

'' ~~""'-;'... l~~c'imr~:bimeyrilaae~ffto.:a-ppro.ve"b budget transfer-frn;-i-ea-si~..,a(;count;.....,...-;~;../::,,.,.:..w.;~'{...r...,~.,.,;_,..,, 2 #43100925 (Injuries and Damages) by the amount of $22,700 through a decrease 3 to Account #43100920 (Administrative and General Salaries). Mr. Beaumont 4 seconded the motion. s Vote: 2 ayes. 6 7. Review of Water/Sewer Disbursements for the Month of July 2016. 7 Mr. Birney asked about multiple payments to H.D. Segur. Mr. Phelan explained this is for the 8 liability and property insurance premiums that the Division had to pay for one additional 9 premium. He said there will be another invoice after the approval of this this transfer for 10 approximately $2,300 for property insurance. On 7-9, Chairman Beaumont, asked about 11 "Outside Services, Surveying, Juliano Associates." Mr. Phelan said this is for the water main jobs 12 particularly for the upcoming water mains on S. Orchard St., Ward St., and S. Whittlesey Street. 13 Mr. Phelan said he believes property boundary lines are being surveyed. Mr. Amwake said the 14 survey also picks up existing utilities. 15 On 7-16, Chairman Beaumont asked about "Regulatory Expenses for Nitrogen." Mr. Phelan said 16 this is for CY 2015. 17 DISCUSSION ONLY-NO ACTION TAKEN.. 8 ELECTRIC 19 8. Discussion and Action: Billing Issue - K&J Tree Service 20 In their July 7, 2016 letter, K&J Tree Service stated they completed tree removal on June 9, 21 2016 at 1 Pine River Drive requiring a service drop which was scheduled with the line 22 department a few weeks prior. The letter stated that on June 9, WED staff dropped service to 23 the house in the morning as planned, but at approximately 3 p.m., WED returned to reconnect 24 the service but their project was not yet complete to allow safe reconnect of the wires. The 25 letter stated the technician told the foreman to call the WED office when they were ready for 26 reconnect and left the job site. The letter went on to say that when K&J contacted the line 27 department for the reconnect sometime after 4 p.m., they were advised that staff had left for 28 the day and there would be a cost associated with after-hours service to reconnect wires, but 29 noted it was agreed that K&J would be able to follow up with WED with regard to any charges 30 billed. 31 The letter states that on July 1, 2016, K&J was advised that an invoice in the amount of $418 32 was mailed to the property owners at 1 Pine River Drive. The letter states that while K&J 33 understands that WED staff works a certain schedule and any non-emergency services after 34 working hours are billable; K&J was never told that a call must be placed to the line department August 16, 2016 Page 7

,.,:,:.:.~.,,:.;,.:;.,.... ~~:.:"_l:>rrorto'.3'p:ilt. to ensure reconneohrn'if~'"'i(.t~,before.-tha,end.e;f ~b& Woi:k.~a.y1~K&l.stated l they were amenable to sharing the cost of the bill and would remit payment of $209 to WED... ~ - '._... _;.,._.: "':::;-~ 3 Mr. Hendershot said he didn't take a lot of exception to what Mr. Grant said. He said he 4 acknowledged there is nothing in writing between WED and K&J and didn't know if any words 5 were exchanged regarding an end of the day. Mr. Hendershot said the $418 is the overtime, the 6 two-hour minimum charge. Mr. Birney asked Mr. Hendershot that if he had the discretion to 7 split the charge would he do this. Mr. Hendershot said WED has a billing adjustment policy but 8 is very restrictive. 9 Mr. Birney made a motion to reduce the original WED invoice of $418 by half ($209). 10 Mr. Beaumont seconded the motion. 11 Vote: 2 ayes 12 Chairman Beaumont took the agenda in the following order: 13 18. Executive Session pursuant to Section 1-225(f) and 200(6)(B) and (9)(C) 14 regarding strategy and negotiations with respect to the pending litigation relating 15 to the Public Utilities Commission's consideration of action to enforce or implement 16 legal relief or legal rights relating to its CMEEC agreements and 1-200(6) and 1-17 210 (b)(4) and (10) to discuss records related thereto.. 8 Mr. Birney made a motion to go into Executive Session at 7:33 p.m. to discuss 19 pending litigation without further motions until a motion to come out of Executive 20 Session. Mr. Beaumont seconded the motion. 21 Vote: 2 ayes. 22 Present at Executive Session: Chairman Robert Beaumont; Commissioner Birney; Director 23 George Adair; General Manager Rick Hendershot; Atty. Gerald Farrell; Atty. Bob O'Neill and 24 Atty. Denise Goulet from Mccarter English (via telephone). 25 NO VOTES OR ACTIONS TAKEN. 26 Mr. Birney made a motion to come out of Executive Session at 9:12 p.m. Mr. 27 Beaumont seconded the motion. 28 Vote: 2 ayes 29 9. Discussion and Action: Budget Appropriation - Property Insurance - FY 16/17 30 Mr. Birney made a motion to approve the budget appropriation in the amount of 31 $4,770. Mr. Beaumont seconded the motion. August 16, 2016 Page 8

1. IA 11~~19.5~iU11-& me2m:cy. td;,-s.ir.io!:~;!jan.. is~!~rle-.d.tbat-.this budget amendmeo,t.,~~~):~;~...;;:,. ~. 2 appropriate $4, 770 from retained earnings to Account 924 - Property Insurance because the 3 renewal premiums for automobile, property, general liability and umbrella insurance policies 4 have been received for the new fiscal year and the premium due for property insurance is 5 higher than the premium estimates provided at the time of the budget preparation, therefore 6 an additional $4,770 in Account 924 is required..'"'.s"',...,. ~ :r- -G..,_ r:,..,,.. ': 7 Vote: 2 ayes 8 10. Discussion and Action: Electric Division - Budget Transfer - Distribution - Load 9 Dispatch - FY 2015/16 10 Mr. Birney made a motion to approve the budget transfer in the amount of $5,600. 11 Mr. Beaumont seconded the motion. 12 Mr. Sullivan explained in his August 10, 2016 memo that an additional $5,600 in Accoutn 581-13 Distribution - Load Dispatch is being requested because the account has experienced a higher 14 utilization of WED's labor, overtime and the associated overhead costs due to coverage needed 15 during extended absences. The additional funds are needed to accommodate the year end 16 accruals. He noted funds are available in Account #582 - Distribution - Station Expenses where 17 use is lower than budgeted due to vacancies during the year. 1 B Vote: 2 ayes 19 11. Discussion and Action: Electric Division - Budget Transfer - Transmission - Load 20 Dispatch - FY 2015/2016 21 Mr. Birney made a motion to approve the budget transfer in the amount of $300. Mr. 22 Beaumont seconded the motion. 23 Mr. Sullivan said in his August 10, 2016 memo that the Account has experienced a higher 24 utilization of WED labor, overtime and associated overhead costs due to coverage need during 25 extended absences. Funds are available in Account #562 -Transmission - Station Expenses. 26 Vote: 2 ayes 27 12. Discussion and Action: Electric Division -Adoption of Electric rates for Balance 28 of FY 2016/2017 29 Mr. Adair said these proposed rates were discussed at the August 4, 2016 workshop in detail 30 and prior to this, these rates were the subject of the July 19, 2016 Public Hearing. He said 31 based upon the Public Hearing, embracing these rates, the only other action would be adoption 32 by the PUC. August 16, 2016 Page 9

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19..,0 Ll 22 23 24 25 26 27 28 29 30 31 32 33 34 35,, Mr. in~;;.a~5}ib,.~~j~~ circulated redline :~~~ij -f-,"'"'te.any furthe!l'-r!~np~~- -t:.~.. 1;"1A... _~,~.,, -. -.,.:, T - - - ~... ~x\.--:-w~,~~~-~....,..~~..--;e.;;... j,..."'4~ ~4"' rates contained in agenda item # 12. Mr. Adair said there were no changes. Mr. Adair in his August 1, 2016 memo stated that staff proposes the PUC take steps necessary to adopt the draft rates as presented at the July 19, 2016 Public Hearing. If adopted by the PUC these rates would: 1. Produce sufficient revenue to cover all costs. 2. Achieve a rate of return on plant of 6.48%. 3. Reduce by $196,000 the subsidy of Rate 1 - Residential customers by other customers. 4. Enable the use of cash to reduce the impact of rising power costs on customers bills. 5. Realign demand (kw) and energy (kwh) charges for Rates 4, 5, and 9 to better reflect market costs for capacity and transmission. 6. Shift PCA periods to match the WED's FY's. 7. Eliminate the multiple behind-the-meter Customer Service Charge for multi-unit residential facilities served by a single meter 8. Provide the reduced Gross Earnings Tax rates that are required to serve residential customers under Rates 3, 4, and 5 through the creation of Rates 3-R, 4-R and 5-R. 9. Eliminate winter and summer rate variations. 10. Eliminate rate blocks for demand and energy. 11. Introduce new rates for LED streetlights and private lights. 12. 750 kwh Residential - Rate 1 monthly bill, using same PCA of $0.004997 per kwh throughout. FY 2016/2017 with current rates: $99.38 per month FY 2016/2017 - with new rates: $99.31 per month Mr. Birney made a motion to adopt the Electric Rates for FY 2016/2017. Mr. Beaumont seconded the motion. Mr. Birney thanked staff and rate consultant for their hard work and the flexibility to make last minute changes. He said he was satisfied and happy with the rates for the FY 2016/2017. Mr. Adair said he would be coming back to the PUC with the remaining three years. Chairman Beaumont echoed Mr. Birney's comments. Vote: 2 ayes 13.Discussion and Action: Annual Write-offs Mr. Birney made a motion to authorize the write-offs. Mr. Beaumont seconded the motion. Mr. Sullivan told Mr. Birney they are not going to stop trying to collect what is collectible. Mr. Sullivan said total write-offs for FY 2015/2016 result in a combined amount of $189,650.28 August 16, 2016 Page 10

~.. :<.. ~'-";-~~"-:.t":..:~ 0 ~ich represents,a<g.il&)~.;cf l % of t!'l a:r. r.~i:."bi#fns'b-th;i::!:llmovnj"pf the :write:-offs. ~;.;,:;;;,o;.~~~ 2 represents an improvement over recent years when write-offs have ranged from $212,600 to 3 $319, 140. He noted that during the fiscal year 2015-2016, $20, 065.53 was recovered through 4 collections on previous write-offs or transfers of previous write-offs to active accounts for 5 subsequent collection. Mr. Hendershot said he sent to the Law Dept. a letter regarding the life 6 threatening medical exceptions and establish a process where WED follows up with these 7 people and their physicians and that they will have to re-attest to this annually. 8 Vote: 2 ayes 9 14.Discussion and Action: Electric Division -Authorize the increase of Hedging 10 Limits for Fiscal Years 2018, 2019 and 2020. 11 Mr. Adair provided an update. He said this topic was thoroughly discussed and the fact that 12 WED has rates that deliberately in advance will be consuming $8 million to $9 million of cash to 13 lessen the effect of the middle years to achieve the power cost forecast for 2018, 2019 and 14 2020. Mr. Adair said the real number for the FY is 75% for 2020; 85% for 2018 and so on. He 15 said the counterparties take on the risk, 20% of the load, whatever that is. He noted that if 16 there was 100% load following, one would never be long or short and there would be high 17 prices. Mr. Adair said there is 30% load following and this helps WED achieve not getting 18 damaged by selling off a long position. He said there is a minimal amount in CY 18, none in 19 19 and none in 2020. Mr. Adair discussed the hedging bar chart. He said in order to facilitate, the.o PUC's consideration of possible strike prices higher than those in the August memo, staff 21 prepared the spread sheet which begins with the average block price of $40.44 for CYs 2018-22 2020, and adds to this an array of additional possible purchase prices, up to $50.94 per MWh, 23 in $0.50 per MWh increments. Mr. Adair said the highest calendar year price listed falls within 24 the s2nd percentile relative to historical prices. This means that, for the months during which 25 the reference year, 2018, has been trading, forward curve prices have been higher than 26 $50.94/MWh some 48% of the time. 27 Mr. Adair said based upon several discussions with Craig Kieny and Nick Zieja of Energy New 28 England (ENE), staff recommends the following revised pricing stipulations to accompany the 29 increases in hedging limits that were proposed in the August 11, 2016 memo: 30 1. Maximum Average Calendar Year Price per MWh for the Entire Purchase under this 31 Authorization: Blocks: $47.44 Load Following: $49.57. 32 2. Load following purchase is subject to the following conditions: Corresponding block price 33 at the time of pricing load following shall be no more than 6% below the load following 34 price; if blocks are available at more than 60% below load following price, blocks must 35 be purchased. August 16, 2016 Page 11

,-?-:'.tl{.. ~~~a:i.r-:hoted 0 t:rnlt~1f.~~i*fd:@rern1iuedthatbased upon the load',st'1ape~~jitt.~flts.;providech by~~.::zt~~\ti'.-~. 2. load following contracts, the break-even premium for such contracts, compared to the cost for 3 blocks, is approximately 4.5%. 4 Mr. Birney made a motion to approve the following: 5 1. Purchase of forward energy in excess of the limits set forth in the WED's 6 Hedging Policy, to the following limits, expressed as percentages of the 7 WED's Projected Native Load, as defined in the Hedging Policy, subject to the 8 pricing stipulations stated in "2" and "3" below: 9 CY 2018-90 /o 10 CY 2019-800/o 11 CY 2020-10010 12 13 2. The average price per MWh for the entire purchase for all three calendar 14 years shall not exceed the following: 15 Blocks: $47.44 16 Load Following: $49.57 7 18 3. The load following purchase is subject to the following conditions: The 19 contemporaneous block price shall be no more than 6 /o below the load 20 following price: if blocks are available at more than 6 /o below the load 21 following price, blocks must be purchased. 22 Mr. Beaumont seconded the motion. 23 Vote: 2 ayes. 24 15. Discussion and Possible Action: Electric Division -Approval of a Contract 25 Amendment - BM Squibb. 26 Mr. Birney made a motion to authorize the execution of Amendment 1 to the Market 27 Priced Power Agreement. Mr. Beaumont seconded the motion. 28 In his August 10, 2016 memo, Mr. Sullivan explained the results of the billing calculations are 29 summarized as follows: 30 Rates effective 10/1/2016 August 16, 2016 Page 12

".;'.'~ '.~'.-~~ : :~.~4 '-.::.;bt@sp.t.~oon~rior to change --: BMS:~:~:h il--..:il\..1"'j.ljqq._,- Rate C:M.;:,f-nrn.intc,;;'*"ar, h.ar.::a-".,.,..,. "_,.,,, ""f""!. :i. ~ -~ r.. ~4...,..,;~l. - '.!'"-- --~... ~ -...J ~;"'"';;!,l~(.,.,...,~~~-f":<....,_;-.. 2 1,39S,124.10; Increase - 1S4,6SS.11; % 12.47%; Average monthly 12,887.93. The calculations 3 above are based on a full 12 months. 4 Vote: 2 ayes. 5 16.Discussion and Possible Action: Electric Division - Approval of a Contract 6 Amendment -Nucor. 7 Mr. Birney made a motion to authorize execution of Amendment 1 to the Market 8 Priced Power Amendment. Mr. Beaumont seconded the motion. 9 In his August 10, 2016 memo, the results of the attached calculations are as follows: 10 Rate effective 10/1/2016 11 Rate SM amount prior to change - Nucor - 2,SOS,931.7S; Rate SM amount after change - 12 2,S3S,9S0.80; Increase - 1.20%; Average monthly amount- 2,501.59. 13 Vote: 2 ayes. 14 17.Discussion and Possible Action: Electric Division- Donation of a WED pole at 15 Center Street Cemetery. 6 Mr. Birney made a motion to authorize donation of a pole which will be left in place. 17 Mr. Beaumont seconded the motion. 18 Mr. Hendershot explained in his August 10, 2016 memo that Public Works requested that WED 19 donate an existing WED pole to the Center Street Cemetery Association. Mr. Hendershot said 20 the pole in question is 36 years old and is fully depreciated and has no residual book value. He 21 noted there are no WED facilities attached to or supported by this pole. 22 Vote: 2 ayes. 23 PUC 24 Committee Reports/Correspondence 25 No reports or correspondence. 26 Adjournment 27 Mr. Birney made a motion to adjourn the Meeting at 10: 24 p.m. Mr. Beaumont 28 seconded the motion which passed unanimously. 29 August 16, 2016 Page 13

1. 2 Respectfully submitted, Respectfully submitted, 3 4 s Cynthia A. Kleist Patrick M. Birney 6 Recording Secretary Secretary 7 8 9 August 16, 2016 Page 14