Mark Walker From: Sent: To: Subject: Gabriel Bolas Friday, August 16, 2019 8:56 AM Mark Walker; Mike Bolin FW: Thank You - Partnership Proposal From: Wes Kelley Sent: Friday, August 16, 2019 8:53 AM To: Mark Iverson ; Keith Hayward ; gregfay@clintonub.com Cc: djenkins@nespower.com; Gabriel Bolas ; chris.jones@mtemc.com; rblevins@vec.org; kwest@ngemc.com; wadejd@epb.net; jferrell@jaxenergy.com; tkemp@starkvilleutilities.com; Williams, Greg ; Doug Peters Subject: RE: Thank You- Partnership Proposal Warning: External Sender-Please use caution when opening files, clicking links, or providing data. I'm glad we have this opportunity to share our perspectives on TVA's proposal. I do appreciate that TVA has moved from compartmentalizing issues toward a comprehensive approach. The boldness of the plan is its biggest strength, and that boldness is wedded to the rapid pace. I know I'm not the only one who recognizes that this is a union-busting strategy by TVA that forces each LPC to stand on its own rather than deferring to TVPPA committee deliberation. While I do think a committee approach could improve this proposal, it is very difficult to imagine such a proposal arising out of a committee-led process. However, I believe this is TVA's response to the Board Negotiating Team. All the issues addressed in the proposal were on the BNT's agenda, but TVA has chosen to respond on its timeline and in its fashion. Lyash's proposal strongly reasserts TVA as the owner of the process, and this defines a union-busting characteristic. As for the proposal itself, I support most, if not all, of its sections. While I would like to see stronger definitions on several items, I will wait for the contract language. Though honestly, I would also struggle with wording issues that are future-focused and require mutual collaboration. So, while I do support the substance of the agreement, I do not appreciate the evergreen term. I will admit this is largely psychological. Practically speaking, an LPC's negotiating position today is much the same as it would be after adopting this proposal. The option of leaving TVA is a fantasy for most, given TVA's transmission exemption. With either a five-year agreement or a twenty-year agreement, politics remains our strongest negotiating tool. The TVA Board is politically-appointed, and our venue to address grievances is the Board and ultimately the 1 Senators that confirm their appointment. While this makes us uncomfortable, I recognize that most of our retail customers share this position when negotiating with us. I did suggest removing the evergreen term and replacing it with a fixed twenty-year term incorporating a ten-year renewal. If an LPC did not renew the ((partnership" at the ten-year renewal, they would default to a ten-year evergreen, and the bill credits and other benefits would cease. Not surprisingly, TVA did not move forward with this suggestion. Instead, they agreed to declining credits upon notice of termination-which is superior to the original offering. I did share with Jeff that his proposal and his approach would make people uncomfortable, but he should not misinterrupt that as opposition. I believe the Valley is at its best when the Valley is unified. I sincerely hope we retain our unity of spirit and warm collegiality as we consider this proposal and move toward implementation. Wes Wes Kelley President/CEO Huntsville Utilities From: Mark Iverson Sent: Thursday, August 15, 2019 2:59 PM To: Keith Hayward ; gregfay@clintonub.com Cc: djenkins@nespower.com; Wes Kelley ; gabriel.bolas@kub.org; chris.jones@mtemc.com; rblevins@vec.org; kwest@ngemc.com; wadejd@epb.net; jferrell@jaxenergy.com; tkemp@starkvilleutilities.com; Williams, Greg ; Doug Peters Subject: RE: Thank You - Partnership Proposal Thank you Keith. Maybe I should have clarified what I meant by pace. I fully recognize and understand that the matters of equity/public power model protection and contract flexibility have been long conversations. And I appreciate the hard work and engagement of the BNT to get us to this place, and the TVA Board's directive to get resolution to these matters. The LTPP seems to address those points, and brings in TVA's issue of short-term contractual commitments, which I also understand. What I mean by pace is that the term sheet first became available for all LPCs on 8/6, and the contract language won't be available until tomorrow at the earliest. In the meantime, I suspect we are all summonsing our Boards in the next two weeks (prior to 9/1) for special meetings to discuss the LTPP and possibly to authorize the contract so that we can reap the program credits at their earliest availability. Sounds logical. Yet, we haven't had an opportunity to hear from each other about contract language, hard spots, etc. That's what I meant by pace. I just hope we don't get tripped up inside of the yet-to-be-seen contract because we didn't have a full, LPC community vetting. 2 As to the 20-year rolling contract provision, I guess I find myself thinking in "what if' scenarios. Won't be the first time. What if, 21 years from now, our successors find the business relationship has soured [I think we can all agree that there a cycle to our collective feelings how things are progressing with TVA....it ebbs and flows. Sometimes we feel good, and sometimes we're madder than a wet hen (insert your own metaphor here)]. Twenty one years from now, there will no longer be rate protection provisions. What leverage will our successors have in dealing with TVA? A twenty-year notification provision? I just wish there was a collective opportunity to discuss shorter notification provisions once an initial 20-year commitment had been made. I'll step off the soapbox. Thanks for listening. Mark From: Keith Hayward [mai1to:keith.hayward@nemepa.org1 Sent: Thursday, August 15, 2019 1:36 PM To: gregfay@clintonub.com Cc: Mark Iverson ; djenkins@nespower.com; wes.kelley@hsvutil.org; gabriel.bolas@kub.org; chris.jones@mtemc.com; rblevins@vec.org; kwest@ngemc.com; wadejd@epb.net; jferrell@jaxenergy.com; tkemp@starkvilleutilities.com; Williams, Greg ; Doug Peters Subject: Re: Thank You - Partnership Proposal Well said Greg and I agree with most of what you said. As you know, I am of the opinion 7SPC should be operated like the corporation it is and as such make its own way. I do not believe TVA should give 7SPC a seat at the table. Unfortunately, I am stepping down from the board due to a national board opportunity and the time requirements to stand up a FTTH business. With that said, We are ready to receive the final language and get some movement on issues we have been discussing for years! Keith Hayward North East MS EPA On Aug 15, 2019, at 12:49 PM, "gregfay@clintonub.com" wrote: Mark... Thanks for reaching out.... It appears to me; we have lost the "collective' ability to shape TVA's policy on these issues. Jeff received the directive from his board to "get long term contracts" .... He "surveyed" a few LPC's and laid out his term sheet. He promised me (several times) this would not be "Ground Hog Day" again.. He was telling the truth... After several face to face 'productive' meetings with Jeff and hours on the phone with his staff, I am in agreement (in principal) with the term sheet. I will of course wait to see and review the final contract language. I have also shared with all who called and communicated with me that I am satisfied we have real positive movement and I am optimistic we will reach agreement on the final language. As to the pace... progress has been glacially slow... My aim has been to remove the for-sale sign from TVA... and get flexibility in the contract to address new and developing technologies. ..with these protections and provisions written in the power contract it provides "some" flexibility 3 and is a substantial disincentive to prospective buyers. That's two big box's checked for me... We have literally "talked" for years and produced Nothing... talk... Nothing ... talk... From my perspective and as evidenced by the roll out... TVA is not waiting on ... or working with TVPPA, 7States or the Board Negotiating Team... He (or his staff) is going directly to EVERY LPC.. If he gets 60-70-% ... That will be a win for TVA... I believe our membership will give him that number... It is, however, unfortunate our organizations have lost the implied authority to speak with one voice for the membership. On the other hand... it is refreshing to advance to ball in weeks not years... As long as it's not at the crack of dawn, I am always happy to meet, talk, discuss, I think Doug did the right think by firing out an email Tuesday... If TVPPA doesn't keep its hand in the game... TVA will marginalize us... Forgive the typo's.... Your man in Clinton... Greg From: Mark Iverson Sent: Thursday, August 15, 2019 11:56 AM To: djenkins@nespower.com; wes.kelley@hsvutil.org; gabriel.bolas@kub.org; chris.jones@mtemc.com; rblevins@vec.org; kwest@ngemc.com; wadejd@epb.net; jferrell@jaxenergy.com; gregfay@clintonub.com; keith.hayward@nemepa.org; tkemp@starkvilleutilities.com; Williams, Greg Cc: Doug Peters Subject: RE: Thank You - Partnership Proposal Good morning all. I'm sending this email out to you as we all seem to be in the group of LPCs who TVA has selected for early and initial feedback on the long-term partnership proposal (LTPP). I'm understanding that a lot of LPCs are anxious to begin the program credits as soon as possible, and are ready to sign the LTPP contract next week. Yikes. I thought we might engage with each other (maybe you already have) about our reaction and concerns about the LTPP's provisions and the pace of this process. For me, here are the places of heartburn: • • Pace. I think the pace of this process is WAY TOO FAST for what we're being asked to commit to, especially as we haven't even seen contract language yet, and some concepts (flexibility; "engagement .... for strategic resource and financial planning decisions", etc.) are loosely defined. Twenty-year rolling contract. I understand the need for longer commitments from LPCs. I think I can wrap my head around a 20-year commitment today. Where I have grave problems is burdening a future BGMU board and my successor into that same 20-year commitment. The "rate adjustment protection" provisions cease at the end of the initial 20-year term, so there seems to be a mismatch in what's being committed to by both parties. 4 There are probably other things I have concern about, but these two rank pretty high. Thoughts? What positions are you and your staff and/or board taking on this? Can we, or should we have a deeper LPC-community conversation about the LTPP before managers and their boards go off and rush into this? Sincerely, Pondering in KY Mark From: Lyash, Jeffrey J fmailto:jefflyash@tva.gov] Sent: Monday, August 12, 2019 11:40 AM To: djenkins@nespower.com; wes.kelley@hsvutil.org; gabriel.bolas@kub.org; chris.jones@mtemc.com; rblevins@vec.org; kwest@ngemc.com; wadejd@epb.net; jferrell@jaxenergy.com; gregfay@clintonub.com; keith.hayward@nemepa.org; Mark Iverson ; tkemp@starkvilleutilities.com; Williams, Greg Subject: Thank You - Partnership Proposal All, Thank you for your valuable input during our discussions prior to the all-customer meeting and feedback since. Your input helped shape the partnership proposal term-sheet and ensure that the content is consistent with the intent and objectives. I am confident that this will better position us to serve the needs of the Valley together and take advantage of opportunities for years and decades to come. Since the all-customer meeting, the general sentiment towards the partnership proposal has been quite positive. Many local power companies have expressed interest in the proposal and are moving forward with discussions with their Boards. The TVA Board is also excited about our future partnership and collaboration. Which brings me to our next challenge and opportunity­ engagement with partners to develop a path forward for flexibility and engagement in TVA's long-term planning process. I would like your thoughts in both areas and have asked Dan Pratt to follow up with each of you to get your input. He will also be planning an initial partner engagement meeting where this can be discussed in more depth. I look forward to continuing our momentum and taking decisive action in both areas. Thank you again for your input and commitment to the Valley. Jeff 5 Confidentiality Notice: This message and any attachments are for the sole use of the intended recipient(s). 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