Municipalities shoulder 87 percent of the debt of the Grand River Dam Authority because they buy that percentage of GRDA‘s generated power, yet they have only one voice on its seven-member board of directors, Mannford town administrator Mike Nunneley said Monday.

“Anything that happens at GRDA is funded by my ratepayers,” Nunneley told the Joint Legislative Task Force on the GRDA.

As most board members have no ties with GRDA customers, he said, municipalities have little say in what the northeastern Oklahoma power authority does, such as approving a $250 million bond issue.

Nunneley said his town’s rates for wholesale electricity have been increased by 12 percent.

Rural electric cooperatives also have a seat on the board. The co-op and municipal power representatives serve as ex officio voting members.

Nunneley said that means the entities that pay the majority of GRDA’s hundreds of millions of dollars in debt have two seats out of seven on the board. He said at least two more are needed.

“We would be at the table,” he said.

Nunneley said municipalities and the co-ops would then be able to discuss whether the power authority actually needs two helicopters, a set of Sea-Doos or to undertake other questionable expenditures.

Local residents and ratepayers have no say about what happens at GRDA, he said.

“But all of the burden is on us,” Nunneley said.

The task force was discussing several pieces of legislation dealing with GRDA. They include HB 2502, by Rep. Weldon Watson, R-Tulsa, task force co-chairman. It would change the terms of office of GRDA board members to five years, allow them to be reappointed and delete current law that prohibits individuals from being named to the board if, during the three years preceding appointment, they have been employed by an investor-owned utility or held an elective or appointive federal, state or county office.

HB 2398, by Rep. Wade Rousselot, D-Wagoner, would require a task force panel to conduct a study of GRDA’s authority to control, store and sell water from Grand Lake and its tributaries. It would also prohibit the authority from raising rates on sales of raw water for a period of five years, as well s freezing rates at their July 2007 level.

‘I’m trying to help my rural water districts,” Rousselot said, adding that his main concern was water from Fort Gibson.

Chief Operating Officer Michael Kiefner said GRDA makes only about $200,000 per year from raw water sales, with rates set at a level sufficient to help pay the cost of service for all GRDA operations. He said a 2006 increase to 10 cents per 1,000 gallons met with considerable opposition, and was ultimately implemented over a three-year period.

“We’re willing to look at it,” he said of concerns about water rates.

Rousselot said the proposed increase “scared the daylights out of our rural water districts,” which he said were already struggling with funding issues and increased regulation. The lawmaker said the water districts took GRDA to court, but were unsuccessful in the litigation.

Kiefner did not say that what Rousselot proposed would result in increased charges elsewhere, but did say that taking money out of one area of its responsibility would affect others.

GRDA requested SB 1506, by Sen. Eddie Fields, R-Wynona. It would allow the agency, as a member of the Southwest Power Pool, to participate in an integrated marketplace, under which it could buy and sell electrical power, fuel commodities and financial instruments as deemed necessary and prudent by GRDA.

“We can either participate or really get left behind,” Kiefner said.

He said the integrated market concept will allow GRDA to mitigate risk when there is congestion on the power grid.

He told Rousselot that the financial instruments in question could include derivatives.

Kiefner said that GRDA is not out to make a profit, and that its own internal policy will outline how it participates.

“We’re not out there to take wild risk,” he said. “We’re not out there to speculate.”

Watson said his concern with any such arrangement is making sure the public is protected.

Shane Woolbright, executive director of Municipal Electric Systems of Oklahoma, which has a designee on the GRDA board, said rural electric co-ops have the authority to do what GRDA is seeking, and municipal power entities have some hedging ability as well. He said GRDA is the only such agency that must seek legislative permission to do so. He said that what GRDA is asking for authority to do is considered a safe method.

At the task force’s first meeting, CEO Daniel Sullivan said that by 2014 the Southwest Power Pool will become part of an integrated marketplace, in which all available power of regional transmission organizations such as the SPP will be essentially “put in one basket” to meet power demands. He said GRDA is making investments now in staffing and equipment to prepare for the change. Sullivan said that GRDA will lose some of its autonomy, but could save $100 million per year.

HB 2471, by Rep. Doug Cox, R-Grove, is a GRDA request that would exempt it from last session’s new law that consolidates most state information technology functions under a division of the Office of State Finance. Sullivan told the panel the agency is subject to federal mandates that would be difficult to meet under the state consolidation requirement.

“This bill would be a total exemption,” Kiefner said.

Under another Watson bill requested by GRDA, HB 2503, the board could delegate initial approval of certain expenses to the CEO.

Kiefner said it would be inefficient to require the board to handle approval of spending on travel and related matters, most of which are for relatively small amounts. He said the idea is for the agency’s policy to comply with state statutes.

Rousselot indicated that he would be more comfortable if the CEO’s approval authority was capped.

“I don’t see any dollar amount to limit it,” he said.

Kiefner said the GRDA board would get to look at the CEO’s actions on its consent agenda.

SB 1081, by Sen. Kim David, R-Porter, would do away with the director of investments position at the agency. It was created during the tenure of former GRDA CEO Kevin Easley, who also served as investment director at a higher salary for both jobs. Sullivan also serves in both capacities. David said there will also be legislation to address the CEO pay issue.

Under SB 1015 by Fields, GRDA would no longer be exempt from language in the Administrative Procedures Act regarding notice and hearing requirements for individual proceedings.

Fields also filed SB 1500, another GRDA request measure, which would allow the board to meet electronically. He said he wants to have a committee substitute drafted that would require the attendance of a majority of board members at each meeting where some members attend electronically. Fields said he also wants language making it probable cause for removal if a board member misses three meetings per year. A recent state audit was critical of the board’s poor attendance record, among numerous other issues.