ML20098D137
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1.ttachrent N MINUTES OF THE
("J WASHINGTON PUBLIC POWER SUPPLY SYSTEM REGULAR BOARD OF DIRECTORS' MEETING GLENN C. WALKLEY ROOM, MULTIPURPOSE FACILITY RICHLAND, WASHINGTON APRIL 23, 1982 - 9:00 A.M.
The Regular Meeting of the Board of Directors of Washington Public Power Supply System was called to order by President Cain at 9:00 a.m.
There was a cuorum present.
President Cain stated this was an open public meeting of the Supply System.
Mr. G. E. C. Doupe', Acting Chief Counsel, reported that an environmental analysis of the April 23, 1982 Board of Directors' agenda had been prepared which showed that all item 3 on the agenda were categorically exempt from procedural requirements of the State Environmental Protection Act.
ROLL CALL PUD No. 1 of Benton County Donald R. Clayhold Present PUD No. 1 of Chelan County Robert O. Keiser Present PUD No. 1 of Clallam County A..E. Fletcher Present PUD No. 1 of Clark County Ed Fischer Presert PUD No. 1 or Cowlitz County Howard B. Richman Present PUD No. I of Douglas County Howard Prey Present PUD No. I of Ferry County William G. Kuehne Present PUD No. 1 of Franklin County Kenneth R. Cochrane Present f
PUD No. 2 of Grant County Harold F. Nelson Present
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PUD No. 1 of Grays Haroor County Jack Welen Present PUD No. I of Kittitas County Roger C. Sparks Present PUD No. 1 of Klickitat County Marion C. Babb Present PUD No. 1 of Lewis County John Kostick Present PUD No. 3 of Mason County Robert C. Olsen Present PUD No. 1 of Okanogan County Stanton H. Cain Present PUD No. 2 of Pacific County John E. Dunsmoor Present PUD No. 1 of Skamania County Parker Knight Present PUD No. 1 of Snohomish County C. Stanford Olsen Present PUD No. 1 of Wankiakum County David L. Myers Present City of Ellensburg Larry Nickel Present City of Ricnland Thomas Logston Present City of Seattle Joe Recchi Present City of Tacoma Paul J. Nolan Present Others Present:
Peter T.
- Johnson, E.
- Willard, R.
Ratcliffe, J.
- Curtis, Ea Sienkiewicz, J. R. Lewis, Bonneville Power Aoministration; Ray Foleen, Con-sultant to the WNP-4/5 Participants' Committee; J.
A.
Hare, Administrative Auditor; Frank Hensley, Legislative Budget Committee; Francis Coleman, Goldman Sachs; Jim Seagraves, R. W. Beck & Associates; J. P. Laspa, Bechtel Power Cor-paration; Gordon Culp, Bud Krogh and Robert Marritz, Culp, Owyer, Gutersor. &
Grader; T. S. Hundal, United Engineers and Constructors, Inc.; Congressman Sid Morrison; Senator Max E.
Benitz; Washington State Pepresentatives Shirley Hankins, Ray Isaacson and Dor. Hastings; Senator Sue Gould; Glenn Walkley ano
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BOARD OF OIRECTORS' MINUTES April 23, Puget Power & Light; David De LorenzoJohn Go of Directors; D. S. Spelle Columoia Basin Apartment Association; B
, Hanford High School; Nancy De Lorer Pasco City Council; Dean
. James, Energy Fair 1983; Susan Boo Okanogan County PUD; Al Pflugrath, Chela Sundouist, Seattle City Light; William Barn E. Roy Mundy and Larry Peterson, Grant Donald J. Smith, Kennewick High School; Harry H Information Research County PUO; David Marks, Citiz t
International, Ltd.
urless, Citizen Guin, Sandy Dodd, Tim Powell, Tori Rouse; N. K. Karamtaries Sol Rubenste Olsen, John Poyner
, Meridee Rouse, Donald Grondin, O
, J:
and Frank WashingtonEnterprises; Eugene Piazza, Stoel, RivesPennington, Citizens; George Garlick, Voice of Energy; John Searing, Cowlitz County PU GarI; Hanford C Thompson, onstruction Craft; James Hubenthal, Lewis Count Sheet Metal Workers Union, Regional Consultants; Millweights Union, Dale Snediger, Local 242; Sue Blakely, y P Stewa.
- Smoot, Northwest Fir-Carpenters Union, local 1849; Ronai Cecil Hendricks, Operating Engineers UnionGeorge Elgin local 1699; Boach, Clark County PUO; Brendan O'Brien,Local 370; Paul Runyan and Bruc Kennewick Times; Sandra McDonough,Benton County PU Wood & Dawson; Donald Anderson The Oregon,ian; Rochelle 0gershahaFra Mueller, KOIN TV; Steve TaylorGodfrey, Tri-City Herald Lane, Seatti-
, KATU TV
, KREM TV; Denni:
, KGW TV; Roger ;aolty, KOMO TV; Tri-City Herald Roy Musitelli, complete, inasmu;ch as the attendance book was not G
Yakima Herald Republic.
(This list is not
_ Staff Present:
circulated to all present.)
A.
J. J. Wentz, J. Squire, J. 0. Perko, G. E. C. Doupe' D. A.
Incres S. A. Reese. en, J. Read, D.
W. Mazur,,D. W.R. A. De Lorenzo, Clement and President Cain announced that President Cain recessed the Board of Diof the Su 12,000 supporters of the Multipurpose Facility.
n wh ich was in progress.
rectors' meeting to observe the rally 9:02 a.m.
The Board The Board of Directors' immediately recessed to permit the Exec tiof Directors' meeting w meeting was recessed at their agenda.
The Regular Boaro u
at 9:20 a.m.
of Directors've Board to conduct the b 4:10 p.m.
and meeting was reconvened MINUTES at meetings held on JanuaryThe Minutes of the Special Joint Board 22, 1982 of rectors' and Executive Board presented for consideration.the Special Board of Directors' mee ng held on February 11,1982, as districuted.
Mr. Kuehne moved that the Minutes be ap Mr. Richman secondeo the motion.
1982, were MOTION CARRIED.
proved as 106?.':;G2
j; 3
BOARD OF DIRECTORS' MINUTES April 23, 1982
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REPORT BY THE DEPUTY MANAGING OIRECTOR Mr. A. Squire, Deputy Managing Director, reported that R. L. Ferguson, Managing Director, was recuperating from his recent surgery; and it was antic-ipated that Mr. Ferguson would return to work part-time in the near future.
REPORT BY THE WNP-4/5 TERMINATION PROGRAM OIRECTOR Mr. R. A. De Lorenzo, WNP-4/5 Termination Program Director, pointed out that two documents pertaining to the WNP-4/5 Termination Program were included in the Board mereers' folders.
He stated that the Termination Program was proceeoing in accordance with the draft Management Plan which had been adopted.
He reported that it was estimated that as of the end of June,1982 the Ter-mination Program would have a positive cash balance.
If this were the case, the infusion of loans from the participants would not be recuired at tnat time.
Following 6 review of the cumulative disbursements, Mr. De Lorenzo reviewed the contract status at Projects 4 'and 5 as of the end of March 1982.
He j
reported that to date, 23 contracts had been terminated at WNP-4, with seven contracts being terminated at WNP-5.
Following further review, Mr. De Lorenzo highlighted the major milestones which had been completed in March.
He re-ported that the participants had committed $70.5 million to the controlled Termination Program for Projects 4 and 5. The major milestones to be completed during the month of April inch.ded approval of the final Management Plan, f
approval of the final Site Termination Plan, preparation of the Fiscal Year
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1983 buoget and the establishment of a sales team for assets disposal.
Mr. De Lorenzo also recorted that an agreement with Pacific Power & Light had been reacned. The agreement established procedures for the management of ter-mination of WNP-5. He stated that this matter would be adoressed later in the meeting by Mr. G. E. C. Daupe', Acting Chief Counsel.
Mr. De Lorenzo turned to the next chart contained in the package entitled
" Costs to Preserve Assets and Maintain Licenses in Phase I".
He pointed out that this chart represented a revised estimate of the costs to maintain the termination program in Phase I.
It was originally estimated that it woulo cost approximately $10 million to $15 million to preserve the assets and licenses in Phase I.
As a result of reevaluation, it had been determined that the monthly cost to preserve the assets and maintain the licenses for Projects 4 and 5 is approximately $695,000 or $8,340,000 for a one-year period.
i Mr. Clayhold referred to the WNP-4/5 cash flow forecast which was in-cluded in the Board members' folders.
He suggested that in future issues of this forecast, the item entitled " Interest Transfer /Other" be changed to reflect the fact that this included participants' loans.
Mr. Keiser asked how long Phase I would be extended.
Mr. De Lorenzo replied that figures identi-fied in the costs to preserve the assets and maintain the licenses had been determined by using the period April through Decemoer 1982.
Mr..Sauire i
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pointed out that the reduced figure for costs to preserve the assets and main-tain the licenses during Phase I did not reduce the total cost of the Termina-tion Program, only the amou'it for maintaining the assets and, licenses.
Tne it.6C%G3
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BOARD OF DIRECTORS' MINUTES :
April 23, 198
.tt savings realized for use in other aspects of the Termination Pin this area of J
cussion, Mr. Clayhold asked what the effects would be Followin j
rogram.
will be transferret WNP-4 if action were taken to slow down the c on the termination of Mr.
pressed by Don Mazur during the Executive Board erns which had been ex-eeting.
WNP-4/5 PARTICIPANTS' COMMITTEE REPORT that much attention was being given to the fMr. Ray F
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4 c pants' Comittee, stated as required 0
it was anticipated that this Oversight Comitin the Termin 1
a-2 ment Plan.
He stated that tioning in the very near future.
Mr. Foleen also reported that the M s
Plan for the termination of Projects 4 and 5 had i
'3 participants.
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The Plan has been to the participants fornot yet been approve}
M comment period.
Mr. Foleen stated that sent Jantzen Beach Thunderbird.Comittee members was to be held the election review and a 1982 in Portland,of new Participants' Oregon at the 4
The following motion was presented for considerati on:
WNP-4/5 TERMINATION, BE AUTHORIZED T 0_
AM OIRECTOR, WITH PACIFIC POWER & LIGHT FOR MANAGEMEN HE ' AGREED PROCEDURES ON BEHALF 0F THE SUPPLY SYSTEM.*
TERMINATION OF WNP-5' E
Mr.
cedures to be followed uponDoupe' pointed out that the '0wner the project.did not describe the pro-n Pacific Power & Light has asserted that th termination of ship Agreement by terminating the project, but PP&L he Supply S He continued that in termination and has paid its ten perc has reserved ent share of termination costs.as agreed the right to withhold asserted tnat PP&L has no such such costs and PP&L Advance Termination Costs. procedures which are similar to the p right.
agreement Mr.
ns provides for ment approval has been lowered to $100 000 withDoupe' pointed o that the contract settle-Light will be consulted prior to negotiations onagreement that Pac fic Power & Light will
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such settlement. Also, Paci-Sale of Assets Plan when drafted. approve the Management
- Plan, He continued that future budgets and to either the project consultant under the Oagreemen
,1 the will submit the dispute
- tor, g
depending on the action In addition,wnership Agreement or an arbitra-involved and Pacific Power & Light have reserv.
I both ting the Termination Program to go forwaroand the issu ed the Supply System t
ater date while permit-
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BOARD OF DIRECTORS' MINUTES April 23, 1982
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Following this review, Mr. Prey moved that the motion be adopted.
Mr. Fletcher seconded the motion.
Mr. Foleen ooserved that the participants i
had not seen the proposed agreement witn Pacific Power & Light.
He asked if the agreement contained anything which was significantly different from the 3
proposed responsibilities of the Oversight Comittee.
Mr. Doupe' replied that-an attempt had been made to create parallel arrangements for Pacific Power &
Light and the participants.
Mr. Foleen expressed his concern that the Over-sight Comittee may.have a greater interest in providing a day-to-day oversight
- function than what was contained in the agreement with Pacific Power & Light.
Mr. Stan Olsen expressed his concern that the proposed agreement had not been reviewed by the Participants' Comittee.
He suggested that the motion could be amended to include language indicating that authorization to execute the procedures would be subject to concurrence by the Participants' Comittee.
Mr. Squire indicated that he did not feel this would be acceptacle, inasmuch as the Supply System had agreements with both Pacific Power & Light Company and the Participants' Comittee.
Therefore, the Supply System was working with two different entities.
Mr. Squire indicated that he did not feel the agreements between the parties should be subject to the soproval of the other party.
Mr. Clayhold asked if the procedures for the agreement with Pacific Power
& Light had been agreed upon only recently.
Mr. De Lorenzo replied that the final details hao been agreed to as late as the day prior to this meeting. He also stated that approval was being requested at this Board of Directors' f(
meeting, inasmuch as there was not anotner Board meeting scheduled in the near future.
Following further discussion, the question was called for.
MOTION CARRIED. ROBERT OLSEN V0TED "N0".
ELECTION OF EXECUTIVE COMMITTF.E MEMBER FOR CLASSIFICATION NO. 5 (CLARK /KLICKITAT/SKAMANIA) AC ELECTION OF EXECUTIVE BOARD MEMBER Mr. Doupe' pointed out that the Board members' folders contained letters from Clark County PUD, Klickitat County PUD and Skamania County PUD.
Mr. Doupe' explained that when the Executive Board was formed, the existing Executive Comittee was transferred to the memoership of the Executive Board by resolution. He continued tnat due to Mr. Fischer's resignation, who repre-sented Classification No. 5, it was Mr. Doupe's opinion that the Board of Directors now had an obligation to elect an Executive Comittee memoer to replace Mr. Fischer from among the three representatives of Classification No. 5.
He continued that tne Rules of the Bearo of Directors further provice that the Board members from the classifications shall submit nominations.
In the event the Board menters representing the utilities in the classification failed to agree, the Board was to elect an Executive Comittee member from among those nominees.
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106C7565 i
BOARD OF DIRECTORS' MINUTES t April 23 T Mr. Doupe' report nominated Paul Runyan;ed that the nomi Babo.
Inasmuch as there was not agree sented replace, ment to the Executive Committee m nated Marion !
rectors to elect Mr. Fisc Mr. Fischer requested that Board of Directors until after the elhe be permitted to rem took place.
This would selection of his successor. permit him the opportun member of t pate in td meating was reconvened at 5:00 p.mPresident C 1
rectors' meeting at 4:55 p.m.
Th Mr.
resignation letter anDoupe' stated that during the reces County commissioners.d his attached state the comissioners and stated:
made to the Clarb tne Washington Public Power Suppl "That Connissioner Ed Fischer b become effective when the Supply SPaul Run ao been made to y System Poard of Directors by Co eplaced on ambert as Alternate and that meeting of the full Board of Directo oner ystem takes action at a special or re this action event, this not be later than April 30 rs of the Supply System and that mean that Mr.
gular time as the Board of Directors tFischer wo 1982."
until such Mr. Doupe' interpreted this to Executive Committee.
ook action to replace him his successor to the Executive CFor this reason, Mr. Fischer w omittee.
President Cain stated e alloweo to vote on were Paul Runyan and Marion C that the two nominations which had b tions.
Mr. Nelson moved that the nominatio Babb.
He asked if there were furtn the motion.
een received THE NOMINATIONS WERE CLOSED BY ns be closed.
na-US VOTE.Mr. Fletener sec C. Stanford Olsen made the following motion:
CLASSIFICATION NO. 5 AND E UTIVE COMMITTEE MEMBER HELD BY BALLOT."
EXECUTIVE BOARD MEMBE Mr. Recchi seconded the motion.
polling of the ballots, it was announc dMOTION CARRIED.
as the Execu that Marion C. Babb had be Board memoer.tive Committee member for Cla e
e 5 and the Executive Board of Directors' Resolution THE EXECUTION OF AMENDATORY AGREEMENT AGREEMENT (CONTRACT NO. NO. 3 TO THE ADMINIST AND WASHINGTON PU3LIC P0' ER SUPPLY 14-03-37
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BETWEEN BONNEVILLE POWER presented for a
VE SYSTEM - HANFORD GENERA consiceration.
Mr.
Ocupe' pointed out that was 1(.6('iCGG tnis resolution
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- e' BOARD OF DIRECT 0P.S' MINUTES April 23, 1982-h authorized an aaministrative change in the agreement between the Bonneville Power Acministration and the Supply System.
Mr. Nolan moved that the resolu-tion be adopted.
C. Stanford Olsen seconded the motion.
BOARD OF DIRECTORS' RESOLUTION 1219 ADOPTED BY UNANIMOUS VOTE.
DISCUSSION OF ACTION REQUIRED UNDER AMENDED EXECUTIVE BOARD LEGISLATION (SB 4996)
Mr. Doupe' stated that.he had sent a letter, dated April 13, 1982, to the Board of Directors which outlined the changes contained in the new legislation.
He stated that a procedure needed to be established to elect the five inside Executive Board members. The Rules of the Executive Board and Board of Direc-tors will need to be substantially revised.
Mr. Doupe' reported that the Act had been signed by the Governor on Tuesday, April 20, and goes into effect imediately.
The Act also states that the organizational meeting of the restructured Executive Board must be within 60 days after the date the legis-lation was enacted or on or before June 19, 1982.
Following some discussion regarding the actions necessary to revise the Rules of the Boaro of Directors, C. Stanfora Olsen, Chairman of the Ad Hoc Search Committee, reported that the Search Comittee had held meetings to dis-cuss the selection of candidates for the outside Executive Board members. The legislation states that the members of the Executive Board shall conduct their
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business in a manner which is in the best interests of all ratepayers affected
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by the joint operating cgency and its projects. With this in mino, Mr. Olsen suggested that ballots be cast by the Board of Directors which containec spaces for five names to be inserted.
The five Board memoers receiving the most votes would then be elected to the Executive Board.
Mr. Nelson voiced his reluctance to elect the Executive Board based strictly on a democratic vote. He stated that he felt consideration should be given to the percentage of financial interest of the members.
Mr. Clayhold urged that the election of the five inside members be held as soon as possible 50 that the candidates for the outside positions would have this information when considering whether or not t. hey wished to serve on the Executive Board. Following further discussion, Presioent Cain pointed out that the Search Committee consisted of C. Stanford Olsen, Paul Nolan, Marion Babb, Howard Richman and Harold Nelson.
Board of Directors' Resolution 1218 entitled "A RESOLUTION APPROVING A QUARTERLY REPORT OF CHANGE ORDERS - WASHINGTON PUBLIC POWER SUPPLY SYSTEM NUCLEAR PROJECTS 4 AND 5" was presented for consideration.
Mr. Fletcher moved that the resolution be adopted.
Mr. Kuehne seconded the motion.
BOARD OF DIRECTORS' RESOLUTION 1218 AD0PTED BY UNANIMOUS VOTE.
Board of Directors' Resolution 1220 entitled "A RESOLUTION APPROVING A QUARTERLY REPORT OF CONTRACT AWARDS - WASHINGTON PUBLIC POWER SUPPLY SYSTEM" was presented for consideration.
Mr. Welch moved that the resolution be adopted.
Mr. Babb seconded the motion.
BOARD OF DIRECTORS' RESOLUTION 1220 ADOPTED BY UNANIMOUS VOTE.
106C7567
I BOARD OF DIRECTORS' MINUTES April 23, 1982
_ CLAIM VOUCHERS provided that none of the claim vouchers were for the i
uchers be approved, costs associated with Initiative 394:
I payment of litigation
- #14540 through 14706; NUCLEAR PROJECT NO.HANFORD GENERATING PROJECT
- 5509 through 5595; NUCLEAR PROJECTS 4/5 5 CONSTRUCTION TRUST ACCOUNT -
7464; 14-82; PACKWOOD LAKE REVENUE FUND - #5392 through 5432 ers 11-82 through the motion.
ing did not contain items related to the paymentFollowing as was called for.
u er list-MOTION CARRIED.
of these costs, the question President Cain recessed the Regular Board of Directo 5:35 p.m, stating that tne meeting would be reconvened at 2 p.m.
on April 28, 1982 in the Lopez Room at Notice of Adjournment which was po,sted at the meetin Seattle Center, Seattle Washington.
The and made a part of these Minutes.
g place,is attached hereto WEONE50AY, APRIL 28, 1982 The Regular Board of Directors' meeting was reconvened Wednesday, April 28, 1982.
this was a continuation of the Regular Board of DiThere was a quorum at 2:00 p.m. on for April 23, 1982.
President Cain stated rectors' meeting scheculed At the time the meeting was reconvened, the followi
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ROLL CALL ng were in attendance:
PUD No. I of Benton County PUO No. I of Chelan County Donald R. Clayhold PUD No. 1 of Clallam County Robert O. Keiser Present PUD No. 1 of Clark County A. E. Fletcher Present PUD No. 1 of Cowlitz County Paul Runyan Present PUO No. 1 of Douglas County Howard B. Richman Present PUD No.1 of Ferry County Howard Prey Present Present PUD No. 1 of Franklin County Kenneth Coyle (Alt.)
Present PUD No. 2 of Grant County Kenneth R. Cochrane PUD No. I of Grays Haroar County Harold F. Nelson Present Jack Welch Present PUD No, I of Kittitas County PUD No. 1 of Klickitat County Roger C. Sparks Present Marion C. Bebb Present PUO No. 1 of Lewis County PUD No. 3 of Mason County John Kostick Present PUD No. 1 of Okanogan County Robert C. Olsen Present Stanton H. Cain Present PUD No. 2 of Pacific County PUD No. 1 of Skamania County John E. Dunsmoor Present PUD No. I of Snohomish County Parker Knight Absent PUD No. 1 of Wahkiakum County C. Stanford Olsen Present David L. Myers Present Present 1.GU;cce
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BOARD OF DIRECTORS' MINUTES
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City of Ellensburg Larry Nickel Present City of Richland Thomas Logston Present
' City.of Seattle Joe Recchi Present y
City of Tacoma Paul J. Nolan
-Present i
i Others Present:
Peter T. Johnson, Bonneville Power Administrator.
(This list 8
I is not complete, inasmuch as the attendance book was not circulated to all present. It is estimated that there were approximately 500 citizens in atten-dance at the meeting.) There were an estimated 3,000 supporters of the Supply
. System's projects gathered outside of the meeting room at the Seattle Center.
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Staff Present:
A. Squire, D. A. Thoresen, G. E. C. Doupe' and S. A. Reese.
President Cain updated ~ the Board members on the chronology of events leading to this meeting.
He stated that an urgent need existed to determine the construction schedules for the net billed projects.
This decision would allow financing to proceed for the Supply System's projects under construc-tion. He continued that for the purposes of making a decision in this matt'er, the Board had convened on Friday, April 23, 1982. However, the Board was pre-vented from acting on this matter because of an injunction issued by the Benton County Superior Court which stated that the Board could not act to slow down construction on Project I as recomended by Peter Johnson, the Bonneville Power Administrator.
President Cain then explained the contractual coliga-
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tions whicn existed between the Supply System.and the Bonneville Power Adrtin-(
istration. He stated that under the Project Agreements, BPA has the authority to approve financing and construction budgets.
President Cain continued that prior to April 19, the Executive Board Finance Committee asked the Bonneville Power Administration to make a recomendation concerning future financing of the net billed projects.
On April 19, the Bonneville Power Administrator recommended an extended construction delay of Nuclear Project 1.
On April 23, the Finance Committee received a letter from the Administrator which answered l
Questions previously posed by Board memoers regarding the BPA recommendation.
These Questions were discussed oy tne Board on April 23, 1982. President Cain pointed out tnat this meeting was a continuation of the oiscussions held on April 23.
President Cain stated that he had been advised by counsel that the injunction had been lif ted and that a reconsideration motion had been heard in L
Benton County Superior Court on the morning of this meeting; however, that l
motion was denied.
President Cain continued that a decision must be mace l-Quickly by the Bonneville Power Administration and tne members of the Board.
He pointed out that this decision would have an effect on an eight-state region in the Pacific Northwest. He stated that the Board was meeting at this time to allow additional public coment prior to making that decision.
President Cain then called on Jack Welch, Chairman of the Executive Board Finance Committee, for comments relating to this issue.
Mr. Welch stated that at tne April 23, 1982 Board meeting, a motion had been passed which directed k
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. BOARD OF DIRECTORS' MINUTES
. April 23, 198!
- the staff to develop possible options to th posals which present these options to the Finance Com itwere reco and financing pros to prepare such options and worked th ower Administration an m tee.
net billed projects. working papers which showed several var ons regarding the managem people had appeared at this meeting tomitte e Finance Com-that these coments be heard prior to the Boa dpresent pu that many or.
Mr. Welch stated The Board of Directors then heard public taking action in this matter.H r
one-half hour period from a numoer of intere t citizens pres s ed individuals.coments dur John Poynor, ented their views and su Ricnland Mayor Pro Tem; pport Charlie Silvernail,of the Suppl IBEW Local 77 Mark V stern Environ; mental Trade Associati Naulty, Pipefitter Business Manager, at WNP-1; Chuck tor Adecuate Electricity; John B l
- Keenan, o and, Concerned Citizen of Maidment Operations R
Hankins a,nd Ray Isaacson;esearen Consultant; State Sheila Renberger, Bill Sebero, Benton County CommissionS Representatives y
Shirley
, Port of Kennewick west Energy CoalitionKennewick City Council; Dr.er; Neal Shulm Chamber of Comerce;s Harbor, Grays Harbo l
Russell Peters, Secretary, Pierce Cou t nd Grays;Haroor ocal 374 Steve Council; Clancy Pirtel, Steamfitters Local;' William Grostick Teamsters Union; James Mytonn y Builoing Trades Council; Claude Oliver, Benton
, President P Boo Dilger, County Ccmission_er; Jay Holman, Port Harold Ma Trades Council; Executive Secretary, Washingtonenton; Bill Sarver. tthews, Franklin struction Teamsters Union Future Generation of Washingtonians; J dBus Concerned Citizen; State Bu Peter Pelcouin, u y Bell, Housewife and W Jerry Dennis Ernie 0000, Electrician; and Stella M r,
. Sonner, Senior Citizen of Kennewick.
Marc Sullivan, Don't Bankrupt Washi
- Director, Northwest Brigade; and Aubrey O. Dodd, Conservation Act Coalitionngton; Senator King Lysen; Mark Reis, must be made with regard to this issuesuggestions Jr.,
Seattle offeredSeattle Lig North u d deal with the decisions whi their Board of Directors' meeting at 4:Following this public c 50 p.m.,, President Cain recessed the Regula Seattle, Washington. reconvened at 2:00 p.m. on April 29 stating that
,1982 in the Boaro Roomthe meeting would oe The Notice of Adjournment which was pos,t dS ing place is attached nereto and mad e a part of these Minutes.
at the meet-e 1CGC'q/0
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BOARD OF DIRECTORS' MINUTES
-11 April 23, 1982 THURSDAY, APRIL 29, 1982 The continuation of the Regular Coard of Directors' meeting was called to order by President Cain at 2:05 p.m.
There was a quorum present.
At the time the meeting reconvened, the following were in attendance:
ROLL CALL PUD No. 1 of Benton County Donald R. Clayhold Present PUD No. 1 of Chelan County Robert O. Keiser Present PUD No. 1.of Clallam County A. E. Fletcher Present PUD No. I of Clark County Paul Runyan Present PUD No. 1 of Cowlitz County Howard B. Richman Present PUD No. 1 of Douglas County Howard Prey Present PUD No. I of Ferry County Kenneth Coyle (Alt.)
Present PUD No. 1 of Franklin County Kenneth R. Cochrane Present PUD No. 2 of Grant County Harold F. Nelson Present PUD No.1 of Grays Harbor County Jack Welen Present PUD No. I of Kittitas County Roger C. Sparks Present PUD No. 1 of Klickitat County Marion C. Babb Present PUD No. 1 of Lewis County John Kostick Present PUD No. 3 of Mason County Robert C. Olsen Present PUD No. I of Okanogan County Stanton H. Cain Present PUD No. 2 of Pacific County John E. Dunsmoor' Absent PUD No.1 of Skamania County Parker Knight Present PUD No. 1 of Snohomish County C. Stanford Olsen Present PUD No. I of Wankiakum County David L. Myers Present City of Ellensburg Larry Nickel Present City of Richland Thomas Logston Present City of Seattle Joe Recchi Present City of Tacoma Paul J. Nolan Present Others Present:
Peter T.
Johnson, Bonneville Power Administration; and Dr. Sergen Patterson, Citizen.
(This list is not complete, inasmuch as the attendance book was not circulated to all present.)
Staff Present:
A. Squire, D. A. Thoresen, G. E. C. Doupe' and S. A. Reese.
President Cain called on Mr. Welch, Chairman of the Executive Board Finance Committee, for a report.
Mr. Welch reviewed the history of tne issue which was being discussed.
He st&ted that at the direction of the Executive Board, the staff had preparea a number of options and alternatives to the Bonneville Power Administration proposal.
The Finance Committee considered these proposals and reviewed them with tne staff of the Bonneville Power Administration.
A response to these alternatives had been received in the form of a letter addressed to Stanton H.
Cain.
Mr. Welch called on Mr. A. Souire, Deputy Managing Director, to provide a general summary of the options whicn were presented to the Finance Comittee anc the Bonneville Power Administration.
'13607571
BOARD OF OfRECTORS' MINUTES
. April 23, 1982 Mr. Squire reported that directed at how the basic approach Projects 1 and 3 between this time period and thethe S which had been taken was to maximize funoing.
cash flow for earl the cash flow reouirements for the five months bHe said that it was determined that was determined that a 20 percent cash flow reo 1
prejudice the target schedules, but also the offici lon at WNP-1 w rget schedules. It was determined that a 15 a
schedule for WNP-1 plished without prejudice. percent cash flow reduction at WNP-3 co It to the target schedule.
WNP-2 was not considered due to the overridi A reduction of cash flow at ect 2.
Mr.
and had indicated that a bond offering in the ar accomplished.
Other possiele sources een contacted possible alternatives, these alternatives weresel million could be examined including i
ferred alternatives.
Following a r,eview of 15 reduced to the two most pre-Mr.
discussed with the Finance Committee and the BSou One alternative provided for construction at es wnich had been onneville Power Administration.
and 3 until Novemoer 1, 1982.
the present rate for Projects 1
$720 million and would This alternative would require a bond sale o include BPA funding of $200 million, million from fuel sales.
provided for a bond offering of $750 million a d as well as $100 he m er 1982.
This alternative (
amount of 5200 million to be received from SPA n
contemplated funding in. the Following further discussion, been President Cain read received from Peter Johnson, Bonneville Power the letter which hao April 29, 1982.
The letter stated, in part, as follows: Administrator, dated "I nave revieweo with the staff of the Bonneville P tion each of the alternatives to my recommendation ower Administra-1982 which have been presented to me of April 19, into account meeting of Aprilthe many public In addition, I have taken 28, 1982.
statements included in your Board All of the alternatives incorporate onelowing basic or to add capital:
temporarily reduce costs (1) temporarily reduce cash flow by a slowdown in. construction with little risk to target schedules; (2 available capital by the sale of certain nuclear fuel as)s increase (3) further increase capital _by an increase in the ets; and posed May bond sale.
After size of the pro-tives in the light of the criteria and objectifull consideration of these a letter of April 19, 1982, I ves described in my interest is better am of the opinion that tne public served by adherence to the recommendation made ItG C 2
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BOARD OF DIRECTORS' MINUTES-April 23, 1982
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in said letter.
I therefore must advise -you and the meinsers of your Board that I could not in good conscience approve moving for-
. ward on the basis of any of the alternatives presented or a finan-cing plan or bond resolution which was inconsistent with the origi-nal recommendation.
For the purpose of achieving the best balance of the many factors concerning us all, I again urge the Board to entrace the BPA reconsnendation and to instruct the Supply System staff to take the necessary steps to implement that reconsnendation..."
Peter ' Johnson, Bonneville Power Aaministrator, stated that the alterna-tives had been reviewed and that he admired the creativeness of the ideas con-tained in the alternatives.
He stated that he wanted to compliment the staff on the creativeness of the ideas set forth; however, he stated that he did not feel these alternatives represented good fiscal financing. For these reasons, he felt that it was not prudent to waver from his previous recommendation.
Mr. Sparks stated that he appreciated the examination which had occurred with respect to the recommendation to slow down the construction at WNP-1.
He expressed his concern that. construction at WNP-1 would be slowed down too fast.
Mr. Johnson replied that one of the insistences the Bonneville Power Administration had made was that the construction slowdown at WNP-1 be done in a reasonable, prudent manner.
He continued that it was necessa:y to reduce the staffing level to a point where the Project could be preserved and re-started in the-shortest possible time period.
Mr. Squire stated that if additional funding was not to be raised for WNP-1 and if the decision was made to slow down construction on May 1,
- 1982, the Supply System's analysis indicated that there were sufficient funds avail-able to permit an oroerly slowdown of construction activities.
Following further review of 'the actions which would bc necessary to accomplish an orderly construction slowdown, Mr. Recchi asked Peter Johnson if he would authorize any funding which was necessary to carry out an orderly construction slowdown.
Mr. Johnson replieo that it was his understanding that acequate funds were available to carry the project through Novemoer 1,
1983 in an cxtended construction delay mode.
Following that cate, the necessary mainte-nance costs could be paid out of tna revenues of Bonneville Power Administra-c' tion.
He added that it is contemplated that engineering and other analyses will be performed which would add value to the resource.
He continued that he felt it would be appropriate to go forward with financing for these types of activities.
Mr. Recchi asked if money was available to continue with engi-neering at the pro, ject. Mr. Squire replied that money was available for some He continued that it would be necessary to make a detailed engineering.
review of the engineering which needed to be continued and that which could be discontinued.
He indicated that a question existed as to how much of the engineering would need to be reexamined or redone following a construction delay of up to five years.
k 10607573
N BOARD OF DIRECTORS' MINUTES April 23, 1982 In summary, Mr. Souire stated that the funds available would allo orderly slowdown of WNP-1 and would maintain ~ the project w for an level until Novemoer 1983.
in a maintenance slowdown activity was being experienced across the count in load forecasts.
sel from others who have had a similar experience so change could be developed to save the resource and 50 the resource co at the least cost e ure in the shortest possible time.
this' resource was one which was needed in the region He continued that he arted Mr. Nelson stated that from D. W. Mazur, Director of Projects, on April 23the Board of Directors h lems and Mr. Nelson asked if it would be economically viable to co it were to be slowed down for two or more years.
p ete the project if project.
- viable, could not be finished,the Supply System would have a 60 percentIf it was not completed project which Mr. Johnson responded that BPA had made an economic an ldue to On a present value basis, it was believed that the actuala ysis on tnis subje ramping down and ramping back up would be approximat l additional cost of million.
This would be the only additional cost above the cost of the y 5250 which could not be recovered.
This additional e project resource to oe cost ineffective.
cost would not render the pleting No. 3 if WNP-1 was placedMr. Cochrane asked what Mr. Johns y would be of com-Johnson the Sonneville Power Acministrationin an ex replied that output of Projects 1,
Mr.
2 and 3 and ne felt them had purchased tne resources which would be neeoed in the future to serve thto be economical, viable Mr.
Johnson stated that it was his hope that at some future tim e needs of the region.
and 5 would also be determined to be viable resources for the reg e, Projects 4 oe acouired by the Bonneville Power Administration.
on and could
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Mr. Recchi far.t that the Supply System had made a determination toasked w tion on two plants, rather than three.
proceed with construc-cause concern in the investment comunity and result in a higherHe ask on future bond sales.
type were becoming more common throughout the countryMr. Jo interest rate matter with the investment comunity, Mr. Johnson stated that hWhen discuss by the investment bankers to do what was prudent and e had been told further discussion, Mr. Nelson pointed out that within two mon responsible.
Followin structured Executive Board would be assuming the responsioilit present Board of Directors and Executive Board.
would be drastically changing the Supply System's proapp Mr. Nelson stated that it
, the Board pointed out that one option whicn is available to the Boa d gram.
C. Stanford Olsen no action; however,
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if this option were chosen, of Directors was r
the Supply System would not 1060';071 g
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i BOARD OF DIRECTORS' MINUTES April 23, 1982 f
have sufficient funds to. operate for the next 60-day period after which time the restructured Executive Board would assume their responsibilities.
He stated that he felt it was necessary to make a decision at the present time due to the financial _ obligations facing the Supply System.
Robert Olsen stated that he felt construction should be continued on Project I due to the f act that. this project was closer to completion and therefore, its power 'would be more economical than Project 3.
He continued that by postponing the completion of WNP-1, the Supply System would also be postponing receiving revenue from the project. He continued that Plant No. I was welcomed in the Tri-C'.ty area but, by contrast, Plant No. 3 was disliked and unwanted by a majority of the residents in the Satsop, area.
Mr. Olsen urged that the nuclear plants be kept -in one location--the Tri-Cities--
i because this is where the nuclear plants were accepted, desired, understood and closely safeguarded.
If _this were the case, there would be no need to ship or. handle potentially hazardous material or ship nuclear waste material into Western Washington.
Mr. Olsen continued that no plant whicn had ever
'been curtailed or mothballed in the United States had ever been restarted.
Robert Olsen then discussed the subject of the ownership of the plants ano the fact. that WNP-1 was 100. percent publicly owned, while WNP-3 had a 30' percent ownership by the private utilities.
The f act that WNP_-3 was par-i tially owned by the private utilities had oeen one of the reasons expresseo for considering the extended construction delay for Project 1 due to the dif-(
ficulty in curtailing the construction on WNP-3.
Mr. Olsen asked why the pri-vate utilities couldn't be offered 30 percent ownersnip of WNP-1.
Mr. Olsen stated that he felt the matter of selling 30 percent of WNP 1 to the privates could be negotiated.
Following further comments, Mr. Olsen urged the Board to exercise their best independent and intelligent judgment in arriving at a decision at this meeting.
Regardless of tne decision which was made, the Board will have met their responsibilities.
Mr. Olsen concluded by stating that "the rest of it is then up to BPA".
Mr. Logston stated that he was totally opposed to a construction delay of WNP 1, inasmuch as there was a serious cuestion as to the validity of the BPA power forecast.
He stated that many puolic officials and others in private industry have openly criticized the BPA forecast as being extremely conserva-tive.
Mr. Logston stated that he felt the need for power was not decreasing, but increasing.
He stated that he would not be a party to any action that would recuire the State of Washington and the Pacific Northwest to turn away b
future industry because of a lack of power.
He continued that he would not be a party to creating economic chaos in the State by placing thousands of con.
struction workers out of work. He also stated that he woulo not be a party to supporting an unfounded and unwarranted political reconinendation from the Bonneville Power Administration.
Mr. Logston continued that WNP-1 was now over 60 percent con +.ete, coming in under budget and on schedule.
He stated that a delay which would result in major cost increases would do nothing more than increase electrical rates for the future and play into the hands of the h
106C7575
BOARD OF DIRECTORS' MINUTES April 23, 1982 antinuclear what they perceive to be cost overruns. advocates who are constantly criticizing for the Pacific Northwest needed the power which would be generated by W ratepayers of the Pacific Northwest needed the savings which would result if
, the WNP-1 was finished on schedule, and the citizens of the State of Washingt needed the economic staoility which would be lost if the project was delayed.
L Folicwing further remarks, Mr. Logston urgeo the Board not to vote as a result of political pressure.
Mr. Recchi asked for input from legal counsel r
Project 3 and the arrangements which would be necessary for the transfer which had oeen suggested by Robert Olsen.
Mr. Rob Marritz, Culp, Dwyer, Guterson &
Grader, replied that such an arrangement would be very difficult
- plish, inasmuch as the net billing agreements require that in order to assign to accom-an interest in any of the plants, the consent of the participants would have to be secured.
agree to the assignment.Therefore, all of the parties to the project would have to ments for such a transfer of ownership would be very complex.Even if
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Mr. Welch delivered a number of letters which he had received viduals in the Grays Harbor area.
from tne City Councils of He continued that two of the letters were the Cities of Elma and Montesano.
The letters continuation of construction of Project 3. represented the citizens of thos h*=
Considerable discussion followed concerning the adoption of Executive Board Resolution 71 which directed Projects 1, 2 and 3 and an extended construction delay for Project 1a fina i
mary of this discussion is included in the Executive Board Minutes of April 29 A sum-1982.
Board of Directors' Resolution 1221 entitled FINANCING AND CONSTRUCTION PROGRAM FOR PROJECTS 1, 2 AND 3 AND CONSTRUCTION DELAY FOR PROJECT 1" was presented for consideration.
EXTENDED Olsen moved that the resolution be adopted, C. Stanford which had been made to Executive Board Resolution 71 reflecting the same amendment the resolution to read:
This amendment caused delayed for a period of up"The construction completion schedule of Project i be to five years."
Mr. Welch seconded the motion.
Frank Lambert, Clark County PUD, stated that he felt the Executive Board should not have voted for the slowdown of construction of Project 1 tinued that the Board's responsibility was to operate within the standard of He con.
prudent utility practice.
violated.
He stated tnat he believeo this standard had been cost effectiveness of slowing down the construction of this proje the opportunity of voting onthat by taking this action, the Executive Board ha He stated i
the issue under Initiative 394 He continued that he did not believe all of the alternatives had been considered.
that it appeared that every time the Board took action, it was done at the He stated i t,G L* R 7 G V
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BOARD OF DIRECTORS' MINUTES - April 23, 1982
-h urging of someone.
Mr. Lambert stated that he believed this was deliberate and planned 50 that.the Board would not have an opportunity to make the proper deliberations oefore arriving at a decision.
Mr. Lambert stated that he felt it would be more cost effective to slow down the construction on WNP-3 than it would be to slow down construction on WNP-1.
Mr. Lambert stated that the I
Board of Directors' responsibility was to make the decision that was best for
- 1. _
their ratepayers, not the decision which was best for BPA, Initiative 394 or the private utilities.
Mr. Welch stated that he felt adoption of this resolution was in the best interests of the ratepayers of the region.
Mr. Welch pointed out that before 4 -decision was made in this matter, the Finance Comittee had contacteo the private owners. of WNP-3 to secure their reaction to the possible construction slowdown at Project 3..The owners replied that they would not accept such a decision and that they would exercise their rights under the Project Agree-ments.
This action would result in an approximate delay of up to 100 days.
Such a celay would jeopardize further financing of all three projects and could tnerefore result in closing down all three of the projects, rather than cnly kNP-1.
Such an action would certainly not be in the best interests of the ratepayers, because it would add more cost to the projects.
Mr. Nelson stated that the issue before the full Board of Directors con-cerned the future financing of WNP-3, as well as the construction schedule for
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WNP-1. He stateo that with this in mind, he felt the Board should Concur with
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the action taken by the Executive Board.
j Mr. Cochrane stated that he believed all five of the projects should be completed, inasmuch as all indications pointed to the need for power.
Mr. Myers stated that Wahkiakum County PUD was opposed to slowing down construction on WNP-1, because they wer* not convinced that such action would be cost effective in the long run for their retail customers.
He continued that it was suspected that the BPA recommendation was made on other grounos, such as investor-owned utility or direct service industry politics or BPA budget considerations.
Mr. Myers reiterated Wahkiakum's protest regarding tne timing of BPA's recommendation, inasmuch as this timing effectively destroyed the utilities' policy options.
He concluoed by stating that considering the forcefulness of BPA's rejection of the alternatives, as well as their control over the net billed plant finances and the need to reach a decision immediately to avoid jeopardizing the bond sale, Wahkiakum reluctantly acceced to the Bonneville Power Administration recommendation.
Mr. Fletcher stated that he Considered the Bonneville Power Administra-tion recomendation to be a directive. He considered that in consideration of the impacts which would result from a contrary decision by the Board of Direc-tors, he, too, supported the resolution.
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10607577
BOARD OF'0! RECTORS' MINUTES April 23, 1982 1
Mr. Knight stated that.due to the reasons previously stated i
Skamania County PUD had no alternative but to support' the BP
, he felt that
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Mr. Sparks stated that the major points to consider in this decis (1) the unemployment'which would result in the Richland area were Washington; (2 construction on) the project when desired the ability to preserve. the assets of WNP-1 and a e of to restart rapid construction and its impact upon ;ra(tepayers; and3) the ability to f this decision may nave (4) the effect that on the election to be held under Initiative 3h.
Mr.' Sparks state making process, c tnat the need for power had not been a part of his decisio so equal that no clear economic choice could be made.becau 1
+
ment which would' be _ caused by the construction slowdown However, the unemploy-upon him until it was pointed out to him that the workers themselv economic fallout of thatstopped construction on tne plants for approx stoppa The facing its present difficulties.ge was, in part, wny the Supply System was He ' stated that sonal questioning of BPA reprasentatives had satisfied him that t
' tion of WNP-1 assets and subsequent future startup was possible He continued that the Supply System is perceive i
Thereafter, ecision.
tion builoing plants at any cost.
n organiza-inforce this viewthe face of the Bonneville Power AdministrationAny dec in defeated at the November election. increase the likelihoodrec and would of a bond issue being In adoition to be subjecteo to severe rate increases as a, result of the tethe ratepay
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Projects 4 ano 5 and the cost of interest payments on the net oilled rmination of In view of these facts, Mr.- Sparks stated that his decision was to plants.
the BPA recommendation.
He stated that he concluded the Projects 2 and 3 with remained necessary in terms of the need for power.
remained cost remained prudent in terms of the legal commitment to ties.
He stated that WNP-1 would be his choice to continu
- wned utili-the fact that the Supply System was contractually obligated to the investor or owned utilities on Project 3.
should be completed on schedule.Mr. Runyan stated that Clark Count
, 2 ano 3 be placed back on schedule very shortly.He stated that it was his hope WNP-1 wou Following these comments, the cuestion was called for.
BOARD OF OIRECTORS' RESOLUTION 1221, AS PREVIOUSLY AMENDED 16 "YES" V0TES; 5 "N0" VOTES; 1 ABSTENTION.
1 COMMENTS FROM MEMBERS OF THE PUBLIC WNP-1.Following a review of his background and financ
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item on the agenda was considered.
, the next 1 6eE78 l'
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- t BOARD OF. DIRECTORS' M'INUTES April 23, 1982 (b.
MEETINGS President Cain announced that a Joint Meeting of the Board of Directors and Executive Board would be held on May 6,1982 at 1:30 p.m. in the Sea-Tac Office, Seattle, Wasnington.
ADJOURNMENT Hearing no objection, President Cain adjourned the Regular Board of Directors' meeting at 4:45 p.m.
Respectfully submitted, k
k Shirley A.
eese Administrative Assistant - Legal Attachments Q.
19607579
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Washington Public Power Supply System P.O. Box 968 3000 George Washington Way Richland. Washington 99352 (509)372 5000
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NOTICE OF. ADJOURNMENT OF E
REGULAR MEETING OF BOARD OF DIRECTORS 0F e
WASHINGTON PUBLIC POWER SUPPLY SYSTEM Notice is hereby given that the Regular Meeting of the Board of Directors of Washington Public Power Supply System scheduled for t
9:00 a.m. on April 23, 1982 is adjourned to 2:00 p.m. on April 28, 1982 in the Lopez Room, Seattle Center, Seattle, Washington.
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Dated this 23rd day of April, 1982.
1
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Secretar)
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s E
E:
1C6C75S0 r
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