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Minutes
October 16, 2000

Location: Queen Anne's County Board Office Centreville, MD

Time: 10:00 a.m. to 12:00 noon

Date: October 16, 2000

Present: R. Allan Gorsuch, David Downes, Chip MacLeod, John Pfister, Gary McCabe, Mark Miller, Charles Connolly, Frances Miller, and Brian Spiering

  1. Dr. Gorsuch opened the meeting with introductions and a brief review of decisions made by Eastern Shore superintendents regarding group purchasing of electric and the establishment of the ESMEC Energy Trust.
  2. Consultant David Downes reviewed the regulatory history of electric deregulation and its current status in Maryland.

    The options regarding bidding electric supply were explained, including the risk associated with each option. Only the power generation (supply) section of current billing is subject to deregulation. Electrical energy delivery and maintenance of electric transmission lines, transformers, etc. would remain with current providers. From the information provided, it is prudent to go forward with an R.F.P. process now to avoid paying default market rates after the 2003 deadline for making a decision on a supply provider.

  3. Attorney Chip MacLeod shared his recommendations on the legal structure of the ESMEC Energy Trust. Since the Trust will serve as the conduit or agent as opposed to a purchaser of electric supply, then the Trust will be a consolidator of electric supply needs. Accounts will be consolidated for on R.F.P., but the Trust will not purchase and own the electric.
  4. Next steps:
    1. P.S.C. Application will be prepared by mid-November.
    2. Trust Agreement draft will be available for review by superintendents by mid-November and available for Board review at December or January Board Meetings.
    3. Data collection by Downes Association will begin immediately to prepare for an R.F.P. At least 12 months of load data will be collected in a format that is usable by suppliers. A single format for data collection will be provided for return to Downes Associates. An electronic format is required which includes all the information needed. Each account (school) may be priced separately due to energy supply demands that may suggest different decisions among suppliers and between default supply rates and consolidated supply rates. These data will be collected by the end of January 2001. It will be necessary for school systems to affirmatively pre-approve the purchase of electric supply so that the suppliers will respond in a timely fashion with the best pricing. Electric purchase as a result of the RFP process will have to begin immediately or the supplier will assume an inordinate amount of risk, which will increase costs.
  5. Dr. Gorsuch reviewed the interim services provided by ESMEC to administer the ESMEC Energy Trust until a more formal arrangement for administrative support is approved by the superintendents.
  6. A question and answer session resolved several issues, especially with reference to the R.F.P. process, which will not be a formal bid process. It was agreed that proceeding together through a trust agreement provides evidence of due diligence and has the possibility of significant savings. There was consensus that during the initial development period for the Trust that both facilities and finance representatives from each county attend the meetings.

Meeting Schedule:

November 28: 10:00 - 12:00 noon, Queen Anne's County Board of Education
December: No meeting
January - May: Third Wednesday of each month, 10:00 - 12:00 noon, Queen Anne's County Board of Education