The Grand River Dam Authority's Board of Directors unanimously approved a $40,000 per-year raise for the state agency's CEO and president Daniel Sullivan during the board's monthly meeting on Wednesday.
The raise, which was voted on by the board after it was discussed in executive session, puts Sullivan's annual salary at $330,000, said outgoing board chairman Tom Kimball.
Sullivan, a former Tulsa lawyer and legislator who has headed GRDA for more than 7 years now, was already among the highest paid state employees and the highest paid state agency head outside of higher education prior to the raise on Wednesday.
The Grand River Dam Authority does not receive funds appropriated by the Legislature and is fully funded by the sale of electricity and water. It oversees three hydroelectric facilities in eastern Oklahoma, a power plant in Choteau, holds interests in other natural gas-powered facilities and wind farms, has its own police force and manages two lakes and the Illinois River.
Kimball said that a state salary survey done in 2013 by the Office of State Finance recommended a salary of $319,000 for the GRDA CEO, and the raise still puts his salary below the CEO salary guidelines of the Large Public Power Association.
"Our board is very happy with the job Dan is doing," Kimball said. "We think he's a leader in the industry. We're very happy with the financial results of GRDA and we gage a lot of our success by the attitude of our customers and they're all very happy at this point."
During the meeting, the board also unanimously voted to decommission the Grand River Energy Center's coal-burning Unit 1, built in 1978. GREC's Unit 2, which is also coal-fired and its new combined cycle natural gas Unit 3 will remain in operation.
The Environmental Protection Agency's 2011 Mercury and Air Toxics Standards requirements would have required substantial and expensive changes to GREC 1 for it to be compliant with the standards, so GRDA decided to mothball the unit and install Unit 3, a combined cycle natural gas unit.
GRDA originally planned to retire Unit 1 in April 2016, but construction delays on Unit 3 and a fire at the coal-fired Unit 2 caused EPA to issue an administrative order delaying the standards for GREC Unit 1 for a year.
Each year, the EPA provides allowances for how much nitrogen oxide (NOx) pollutants a power generating facility can emit, under the Cross State Air Pollution Rule, during "Ozone Season" from May to September, Robert Ladd, vice president of GREC Operations, told the board. GREC 1 is allowed to emit up to 629 tons of NOx during ozone season, but if it uses under that amount GRDA can sell the remaining allowance to other companies that go over their allotted amount, Ladd said. However, if an electricity-generating unit does not generate electricity to be sold to customers within a two year period, the allowances are discontinued and forfeited after three years, he said.
Unit 1 was last fired up in April 2018, but last generated electricity through the power grid for an hour on Sept. 19, 2017, he said.
"The reason we've been in this mode (with Unit 1)," Ladd said, "is because we've been hanging on to these allowances to maintain our optionality - should we convert Unit 1 to natural gas? Are we going to need that capacity, what are the dollars going to look like should we do that?"
In addition, GRDA could save on annual maintenance costs for the unit and sell some of the unit's parts, Ladd said.
The main concern about decommissioning Unit 1, Ladd said, is if the coal-fired Unit 2 had to operate at a higher capacity in a future Ozone Period and went over its allowance of 701 tons of NOx emissions, there would not be the "banked" allowance from Unit 1, forcing GRDA to pay a steep penalty or buy allowances from other power generators.
After Ladd's presentation, the board voted unanimously to proceed with decommissioning of GREC 1 and report the unit as being fully retired to state and federal regulatory agencies.
Also, during Wednesday's meeting the board voted unanimously to name Afton businessman Michael Lewandowski as board chairman.
Lewandowski, who was appointed by former Gov. Mary Fallin in August 2018, was the owner of four McDonalds franchises until 2017.
In other business, the board was also presented with a draft board policy that increased the amount in contracts and purchases the CEO could make without board approval from $50,000 to $150,000. That proposed policy will not be voted on until the board's next meeting 10 a.m. Sept. 11, 2019 at GRDA's Engineering and Technology Center in Tulsa.