MATANUSKA ELECTRIC ASSOCIATION, INC. Palmer, Alaska

The regular monthly meeting of the Board of Directors of Matanuska Electric Association, Inc., held on Monday, May 11, 2015, was called to order by President Lester at 4:00p.m. in the Board Room of the Association at Palmer, Alaska.

Present were: Elsie E. "Lois" Lester, President; Janet Kincaid, Vice President; Peter Burchell, Secretary-Treasurer; Bob Doyle, Director; David Glines, Director; Catharine "Kir' Jones, Director; and Marvin Yoder, Director. Also present were: General Manager Joe Griffith; Chief Financial Officer Matt Reisterer; Director of Engineering Gary Kuhn; Director of Operations Eddie Taunton; In-House Counsel David Pease; Director of Power Supply Tony Zellers; Manager, Fuel Supply and Contracts Tony lzzo (telephonic); Director of Human Resources Heidi Kelley; Director of Public Relations Julie Estey; Chief Information Officer Stan Halfacre; and Recording Secretary Patricia Worrell.

President Lester invited Mr. Glines to lead the pledge of allegiance to the flag of the United States of America.

President Lester stated the first ijem of business on the agenda was Safety Moment. Safety Manager Steve Willis reported that the accident-free clock had to be re-started due to an EGS contract worker being injured. Fortunately, he stated, the injury wasn't critical.

Mrs. Lester then stated the next item of business on the agenda was Acceptance of the Agenda. Mrs. Kincaid moved, Mr. Yoder seconded, that the agenda be accepted as presented. There being no discussion, and hearing no objection, President Lester declared the motion CARRIED.

President Lester stated the next item of business on the agenda was Director Disclosures. There were none.

Mrs. Lester stated the next item of business on the agenda was 2015 Election Oath of Office - Newly Elected Directors - and called upon In-House Counsel David Pease to administer the Oaths. Their executed oaths of office are attached to and made a part of these minutes.

President Lester then stated the next item of business on the agenda was Election of Officers and stated nominations for the offices of President, Vice President, and Secretary-Treasurer were in order.

Mrs. Jones nominated Lois Lester for the office of President. Hearing no other nominations, Mrs. Kincaid moved to close nominations and cast a unanimous ballot for the office of President. President Lester called for a roll-call vote. Directors Yoder, Jones, Burchell, Doyle, and Kincaid voted YES; Director Glines voted NO; and President Lester declared Elsie E. "Lois" Lester President.

Mrs. Jones nominated Janet Kincaid for the office of Vice President. Hearing no other nominations, President Lester declared nominations closed and called for a roll-call vote. Directors Yoder, Jones, Burchell, Doyle, Kincaid, and Lester voted YES; Director Glines voted NO; and President Lester declared Janet Kincaid Vice-President.

Mrs. Jones nominated David Glines for the office of Secretary-Treasurer. Hearing no other nominations, President Lester declared nominations closed and called for a roll-call vote. Directors Yoder, Jones, Burchell, Doyle, Kincaid, and Lester voted YES; Director Glines voted NO; and President Lester declared David Glines Secretary-Treasurer.

Next on the agenda, President Lester stated, was Persons to be Heard. Eugene Haberman had signed the roster indicating he wished to speak at the meeting, but when called upon, declined to do so.

President Lester stated the next item of business on the agenda was Consent Agenda. Mr. Doyle requested that Item D "Proposed Resolution No. 2004 RCA Simplified Rate Filing" be pulled from the agenda. Mr. Glines requested that Item C "Calendar of Events" be pulled from the Consent Agenda. Hearing no other requests for items to be removed from the Consent Agenda, President Lester declared Consent Agenda Items A. Minutes for Acceptance, April 13 and April30, 2015, B. Membership Activity, and E. Expense Statements APPROVED.

She then called for discussion of Item C Calendar of Events. Mr. Glines requested that a Board Workshop be held in June to develop the criteria for MEA's next General Manager. President Lester added Board Workshop Discussion to New Business.

President Lester then called for discussion of Item D Proposed Resolution 2004 RCA Simplified Rate Filing. Mr. Doyle requested more information regarding refundable rates. Mr. Griffith stated MEA would be required to keep accurate records of member payments and would have to refund some portion or all dependent upon what final rates are approved. In answer to a second question from Mr. Doyle, Mr. Reisterer advised the Board that the proposed resolution on the table would be the second interim refundable base rate filing proposed by Matanuska Electric Association. Further, Mr. Reisterer stated the amount involved in Proposed Resolution 2004 was $1.5M (in annual revenues).

President Lester then called for a motion on Item D Proposed Resolution No. 2004, Simplified Rate Filing. Mrs. Kincaid moved, Mr. Doyle seconded, that Resolution 2004 authorizing a 1.98% increase in rates for the third quarter of 2015 based on our Simplified Rate Filing for the test year ended March 31, 2015 be adopted. Following discussion, and hearing objection, President Lester called for a roll-call vote. Directors Glines, Kincaid, Jones, and Burchell voted YES; Directors Doyle and Yoder voted NO. President Lester voted YES and declared the motion CARRIED.

CALL TO ORDER

BOARD MEMBERS AND MANAGt:MENT

PRESENT

PLEDGE OF All.EGIANCE

SAFETY MOMENT (WIWS)

AGENDA ACCEPTED

DIRECTOR DISCLOSURES

OATHS OF OFFICE

N 0 M I

N A T I

0 N s

&

E L E c T I

0 N

PERSONS TO BE HEARD

CONSENT AGENDA

ITEMS A, B, & E APPROVED

ITEMC­CALENDAROF

EVENTS

ITEMD­PROPOSED

RESOLUTION NO. 2004- SRF

MOT/ONTO ADOPT RES 2004

SRF AUTHORIZING

1.98"A. INCREASE CARRIED

Board of Directors Meeting. Mav 11. 2015

President Lester stated the next item of business on the agenda was Reports - Election Committee Report - and called upon Committee Chair Dan Kennedy to present the report. Mr. Kennedy stated the Election Committee fulfilled the responsibilities assigned to them according to MEA's Bylaws, with one exception - meeting with the Board within three weeks of the Annual Membership Meeting. Despite the Committee's best efforts including e-mail correspondence, the Committee could not meet within the three-week timeframe. On behalf of the Committee, Mr. Kennedy then requested that they be allowed to meet at a later date to review the past year's election performance. In response to a question from Director Glines, Mr. Kennedy shared a committee member's concern that pros and cons be represented in future bylaw propositions. Several directors thanked Mr. Kennedy and the Election Committee for volunteering to serve on the committee.

President Lester stated the next item of business on the agenda was Reports - MEA Charitable Foundation Discussion - and called upon Linda Menard to present the report. Ms. Menard referred the Board to David Dahms' written report, advised the Board that Director Jones volunteered to attend the next year's Charitable Foundation meetings as a representative from MEA's Board, and presented Charitable Foundation checks to Set Free Alaska, a drug and alcohol outpatient treatment center serving adults and youth, and Radio Free Palmer, an all-volunteer community radio station. Ms. Menard concluded by thanking MEA's Board for meeting with the Charitable Foundation's Board to discuss a different form of business model.

President Lester then stated the next item of business on the agenda was Reports -ARCTEC - and called upon Mr. Griffith to present the report. Mr. Griffith stated ARCTEC's CEO was monitoring the legislative budget deadlock and that no ARCTEC meeting had been called since the last MEA Board meeting.

Next on the agenda, President Lester stated, was Reports - Review of March 31 Financial Results. CFO Matt Reisterer and Comptroller Deanna Hracha presented the report which included Year-to-Date Financial Results Through March and the 2015 Forecast.

President Lester stated the next item of business on the agenda was Monthly Reports. Monthly reports submitted by the General Manager and staff were reviewed.

In addition to his written report, Mr. Reisterer stated MEA's rate filings were approved by the Regulatory Commission for use commencing May 1 on an interim refundable basis, and that the Commission opened a docket to investigate MEA's use of Simplified Rate Filing procedures in MEA's transition to its first general rate case as a generation utility.

In addition to his written report, Mr. Kuhn reported that the Eklutna Hydro Plant is planning communications upgrades which include a microwave communications tower. As 16.6% owner, MEA will be responsible for approximately $86,000 of Phase I and II. Further, digital microwave radio equipment which would solely benefit MEA in serving its Hospital Substation would add $135,000 to MEA's cost.

In addition to her written report, Ms. Estey highlighted upcoming events: Wasilla Transmission Upgrade Open House (May 21} and Public Hearing (June 11}, and EGS events which include the Project Partner Lunch from 11 :30 to 1:00 followed by EGS's Ribbon-Cutting Event as part of the member event at 1 :00 p.m. (June 6).

President Lester stated the next item of business on the agenda was New Business -Re-Appointment to Charitable Foundation Board. Ms. Estey explained that each Charitable Foundation Director is aligned with an MEA Director and his/her term; therefore appointments were in order. Mrs. Kincaid moved that Directors Peter Burchell, Kit Jones, and Janet Kincaid's nominees David Dahms, Kelly Sidebottom, and Sue Smith be re-appointed to the MEA Charitable foundation Board. There being no discussion, and hearing no objection, President Lester declared the motion CARRIED.

President Lester stated the next item of business on the agenda was New Business -Director Representing MEA Board at Quarterly Charitable Foundation Meetings. Mr. Burchell moved, Mrs. Kincaid seconded, that Director Jones attend quarterly Charitable Foundation meetings in the role of a non-voting observer from MEA's Board of Directors. Following discussion, and hearing no objection, President Lester declared the motion CARRIED.

The next item of business on the agenda was New Business - Election Committee Request. President Lester called for a motion regarding the Election Committee's request to meet early in the election cycle. In response to a question from Director Doyle, In-House Counsel David Pease stated the procedure for deviating from the bylaws would be amending the bylaws. However, he stated, the Election Committee had made a good-faith effort to comply with the requirement that they meet within three weeks of the Annual Meeting. Ms. Estey added that Chairman Kennedy offered to call a meeting within the next few weeks, which though outside the three-week window, would comply with the spirit of the bylaw requirement. No motion was made and no action was taken.

President Lester stated the next item of business on the agenda was Board Work Session. Mr. Glines stated Jennifer Bouman-Steagull, attorney and instructor at recent Director Training emphasized that Words Matter. Director Kincaid added that Ms. Bouman-Steagull suggested no more than 12 bullet points be included in a job description and that interviewers be familiar with the legal parameters of interviewing.

Mr. Glines then moved, Mr. Doyle seconded, that MEA invite Jennifer Bouman-Steagull to travel to Alaska to facilitate the Board of Directors in its search for a General Manager. In the course of discussion, Mrs. Kincaid moved, Mr. Glines seconded, that the motion be amended by adding "that the Board meet June 22 as a Committee of the Whole for the purpose of drafting a general manager's job description." In the course of discussion, the motion was amended by

Page 2

ELECTION COMMITTEE

REPORl-DANKENNEDY

CHARITABLE FOUNDATION

REPORT-LINDA MENARD

ARCTEC­GRIFFITH

YTD FINANCIAL RESULTS­

REISTERERI HRACHA

MONTHLY REPORTS

REISTERER

KUHN

ESTEY

MOTION TO REAPPOINT

CHARITABLE FOUNDATION

DIRECTORS CARRIED

MOT/ONTO

APPROVE DIRECTOR

JDNESASCF OBSERVER

CARRIED

ELECTION CQt.t.11TTEE

TOtJEET

IN NEXT

FEW WEEKS

DIRECTOR TRAINING

REPORT

MOTION TO

INVITE BOARD WORKSHOP

FACIUTATOR MOTION TO

Board of Directors Meeting. Mav 11. 2015

GENERAL CONSENT substituting "at four o'clock on June 1" for June 22. There being no further discussion, and hearing no objection, President Lester declared the motion to amend CARRIED.

Next, President Lester called for discussion on the motion to invite Jennifer Bouman­Steagull to facilitate a workshop of the Board of Directors in its search for a General Manager. In the course of discussion, the Board clarified its intent to hold a June 1 Committee of the Whole workshop for the purpose of drafting a general manager's job description, and to invite Ms. Bouman-Steagull to meet with the Board at a later date. There being no further discussion, and hearing no objection, President Lester declared the motion CARRIED.

President Lester called for a motion to approve the amended Calendar of Events. Mrs. Kincaid moved, Mrs. Jones seconded, that the amended Calendar of Events be approved. There being no discussion, and hearing no objection, President Lester declared the motion CARRIED.

The next item of business on the agenda was Board Remarks. In the course of their comments, the directors addressed a variety of matters.

In the course of his remarks, Mr. Griffith shared a Memorandum of Understanding proposed by ML&P entitled "Memorandum of Understanding Commencing a Centralized Power Pool and Central Economic Dispatch Services Levelizing Transmission Charges, Revising Reserve Allocations, and Confirming Operational Reliability Standards." The proposal supported ML&P developing a centralized dispatch service, with the option to terminate at any time and at no cost to participants during the first year. Mrs. Kincaid moved, Mrs. Jones seconded, that the General Manager be authorized to sign the Memo of Understanding as presented. There being no further discussion, and hearing no objection, President Lester declared the motion CARRIED.

President Lester stated the next item of business on the agenda was Executive Session. Mrs. Kincaid moved, Mr. Glines seconded, that the Board go into Executive Session to discuss matters the immediate disclosure of which could have an adverse effect on the finances of the Association, specifically an EGS Update. Further, the Board, General Manager, and senior staff were to attend. There being no discussion, and hearing no objection, President Lester declared the motion CARRIED and the Board went into Executive Session at 6:00 p.m.

Mrs. Lester reconvened the meeting at 6:20 p.m. and called for a motion to adjourn.

Page 3

MEET JUNE 1

CARRIED

MAIN MOTION

TO INVITE FACILITATOR

CARRIED

CONSENT AGENDA ITEM C

APPROVED

REMARKS

MOTION TO AUTHGMTO

SIGNMOU

PROPOSED BY ML&P

CARRIED

EXECUTIVE

SESSION

Mr. Burchell moved, Mrs. Kincaid seconded, that the meeting be adjourned and ADJOURN~NT President Lester declared the meeting adjourned at 6:21 p.m.

The next regular meeting of the Board of Directors will be held on Monday, June 8, 2015, at4:00 p.m.

(SEAL)

APPROVED:

·-~ ~t:?Ji;C;=:> ELSIE E. "LOIS" LESTER PRESIDENT

Oath of Office Affidavit of Catharine W. Jones

State of Alaska ) ) ss.

Third Judicial District )

I, ~--=C=a=th=a::.:.:rin=e...,J=o=n=es=-----• being first duly sworn upon oath, swear or affirm as follows:

1. That I am not employed by or financially interested in an enterprise competing or doing business with MEA;

2. That I am not a member, officer, director or employee of any union local currently acting as a bargaining agent for any group of MEA employees, and am not financially interdependent with such a person;

3. That I agree to abide by and uphold the Bylaws of Matanuska Electric Association, Inc.;

4. That I shall not divulge to any unauthorized person any confidential information of MEA's; and

5. That I accept the responsibility, as a Board member, to serve as a fiduciary of MEA, and that, in the performance of my duties, I shall act in the best interest of MEA.

Further your afftant sayeth naught.

DATED: ~ l i- t 5 ~ (C) 'f-r-

» 0 (jJ. h.ct: --l OWL> Catharine W. "Kir Jones

SUBSCRIBED AND SWORN to before me this 11th day of May, 2015.

~A~~ Notary Public In and for the State of Alaska My Commission Expires: I 2 ~ $l' - I 4o

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Oath of Office Affidavit of Janet Kincaid

State of Alaska ) ) ss.

Third Judicial Distrid )

I, Janet Kincaid , being first duly sworn upon oath, swear or affirm as follows:

1. That I am not employed by or financially interested in an enterprise competing or doing business with MEA;

2. That I am not a member, officer, diredor or employee of any union local currently acting as a bargaining agent for any group of MEA employees, and am not financially interdependent with such a person;

3. That I agree to abide by and uphold the Bylaws of Matanuska Electric Association, Inc.;

4. That I shall not divulge to any unauthorized person any confidential information of MEA's; and

5. That I accept the responsibility, as a Board member, to serve as a fiduciary of MEA, and that, in the performance of my duties, I shall act in the best Interest of MEA.

Further your affiant sayeth naught.

DATED: 5"- Il-l~ ...

SUBSCRIBED AND SWORN to before me this 11th day of May, 2015.

Notary Public in and for thz te of Alaska / My Commission Expires: /~ - ~ -I CCJ

1

S:\GenWII Manlgei'\BoaRMNNUAL MEETING\2015\0di-Kincald.docx

Oath of Office Affidavit of Peter Burchell

State of Alaska ) ) ss.

Third Judicial District )

I, Peter Burchell , being first duly sworn upon oath, swear or affirm as follows:

1. That I am not employed by or financially interested in an enterprise competing or doing business with MEA;

2. That I am not a member, officer, director or employee of any union local currently acting as a bargaining agent for .any group of MEA employees, and am not financially interdependent with such a person;

3. That I agree to abide by and uphold the Bylaws of Matanuska Electric Association, Inc.;

4. That I shall not divulge to any unauthorized person any confidential information of MEA's; and

5. That I accept the responsibility, as a Board member, to serve as a fiduciary of MEA, and that, in the performance of my duties, I shall act in the best interest of MEA.

Further your affiant sayeth naught.

DATED: S'. li , ~0 I b .. Peter Burchell

~/.(Le~ Notary Public in and for the State of Alaska My Commission Expires: 1 ~- 8 -l C::,

S:~ Managar'Bol.ni\NUAL MEETlNG\2015'10at11- Burchel.docx