Item A: Joint Meeting with EWEB Board

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ATTACHMENT A M E M O R A N D U M EUGENE WATER & ELECTRIC BOARD TO: Mayor Piercy and City Council EWEB Board of Commissioners FROM: Randy Berggren, General Manager Eugene Water & Electric Board DATE: November 12, 2008 Background Memorandum for November 19 Meeting SUBJECT: This memorandum provides information on a number of strategic issues that EWEB staff are actively involved with, some in coordination with city staff, in advance of the upcoming joint meeting. While the issues discussed herein may be of mutual interest to both policy bodies, they are not the focus of the two staff presentation topics planned for the meeting. However, following the staff presentations, there will be an opportunity for open discussion. I invite questions regarding the topics below at that time. I have included electronic links and/or staff contact numbers for more detailed information on these issues following our discussion. Carmen-Smith Relicensing Agreement On Oct. 21, EWEB signed an agreement with 16 federal and state natural resource agencies, Indian Tribes, environmental groups and other parties outlining the environmental, recreational and other improvements EWEB will undertake for relicensing the Carmen-Smith Hydroelectric Project on the upper McKenzie River. Carmen-Smith is the most important generating facility owned by the utility. It produces the equivalent of about 9 percent of Eugene’s electricity needs, generates power at a very low cost, and is a critical source of power during “peak” periods of demand. The agreement is the culmination of nearly two years of negotiations with various stakeholder groups and regulatory agencies. It was submitted to the Federal Energy Regulatory Commission (FERC), which is the agency responsible for issuing the project’s operating license. The agreement is particularly significant in that the signing agencies developed a united recommendation to FERC about the kinds of measures to be undertaken. In all, EWEB has committed to making an estimated $135 million in enhancements related to the hydroelectric project. The improvements may result in electric rate increases between 5 percent and 7 percent, to be enacted no earlier than 2012. Among other improvements, the agreement calls for EWEB to construct an upstream fish ladder and a downstream fish passage system at Trail Bridge Dam, increase year-round stream flows in