Public Utilities 2012/01/25CITY OF ANAHEIM
PUBLIC UTILITIES BOARD
MINUTES
JANUARY 25, 2012
The agenda having been posted on Friday, January 20, 2012, the Regular Meeting of the Public Utilities
Board (Board) was called to order by Chairperson Jordan Brandman at 5:03 p.m. on Wednesday, January 25,
2012, in the 11' Floor Large Conference Room, Anaheim West Tower, 201 S. Anaheim Blvd., Anaheim,
California.
Board Members Present: J. Brandman, D. Morgan, B. Hernandez, S.E. Faessel, C. Peltzer,
J. Machiaverna, P. Carroll
Board Members Absent: None
Staff Present: M. Edwards, D. Calkins, D. Lee, E. Zacherl, S. Sciortino, J. Lehman,
A. Kott, B. Beelner, R. Dowell, M. Lopez, R. Watkins, D. Albaugh,
W. DeLeon, A. Preciado, R. Shintaku, L. Quiambao, P. Oviedo
Guest(s) Present: David Wain, Resident; Stephen Faessel, Resident; Steve Wenke and Rick
Cutter, AAC Utility Partners
AGENDA ITEM
1. PUBLIC COMMENTS.
ACTION TAKEN
D. Wain, Anaheim Resident, shared that last week at the East
There being no further public
District Neighborhood Council meeting, D. Lee and F. Barvarz
comments, J. Brandman closed
gave a very interesting presentation regarding undergrounding and
the public comments portion of
reliability; he appreciated staff answering residents' questions. He
the meeting.
also shared that D. Morgan and S.E. Faessel attended the meeting.
2. APPROVAL OF THE MINUTES OF THE REGULAR
PUBLIC UTILITIES BOARD MEETING HELD ON
DECEMBER 21, 2011. *
3. PRESENTATION ON AGREEMENTS FOR CUSTOMER
INFORMATION SYSTEM REPLACEMENT PROTECT.
M. Edwards began the presentation by explaining that the Public
Utilities Department has been talking about the Customer
D. Morgan moved approval of
the December 21, 2011, Public
Utilities Board Minutes. B.
Hernandez seconded the
motion. MOTION
CARRIED: 6 -0.
ABSTAINED: 0. ABSENT:
0. DELAYED: 1 (P. Carroll).
2012-1
AGENDA ITEM
Information System (CIS) project (Project) for some time now and
are very close to bringing to the Board a recommendation to move
forward with the Project. She further explained that the purpose of
the presentation is to continue to prepare the Board for that upcoming
recommendation.
M. Lopez, Business Information Systems Manager, began by
reminding the Board that in April a presentation was provided to the
Board regarding what the CIS is, why it is important to replace it, and
the benefits expected both operationally and from a customer's
perspective. He reminded the Board how important the CIS is and
how it is used by the Utilities, Fire, Police, Public Works, and Code
Enforcement Departments. He ended the introduction by explaining
that the purpose of this presentation was to explain the four
agreements that make up the Project.
M. Lopez began with the first and largest (in dollars) agreement with
Systems & Software (S &S). S &S will provide the CIS software and
implementation services that will replace the existing CIS. The total
cost for this agreement is $5.6 million. Once the system is live, the
ongoing annual maintenance cost will be $175,000, which is
approximately $50,000 per year more than the current CIS. He then
explained that the City of Riverside Public Utilities recently went
through the same rigorous CIS selection process as Anaheim and also
selected S &S. Additionally, he explained that Anaheim visited the
Electric Power Board of Chattanooga (EPB), an S &S CIS user since
1998, to learn about their experiences using the S &S CIS software.
A brief testimonial video from EPB about S &S was shown.
The second agreement M. Lopez reviewed was with AAC Utility
Partners for $2.5 million. AAC Utility Partners will provide project
management services, along with two other lead roles, training and
testing. They are also going to provide software that will assist with
managing the project. He reminded the Board that the Department
had previously contracted with AAC Utility Partners to assist with
writing the CIS request for proposals, the rigorous selection process,
and writing the statement of work. Because of this, they are very
familiar with Anaheim's operations, staff resources, limitations, and
challenges that will be faced.
M. Lopez then moved on to explaining the third agreement with
Hewlett Packard for $2.35 million. Hewlett Packard is the IT
services provider for Anaheim. They manage desktops, servers, the
data center, and the network infrastructure. When there are large
projects and additional services are required, an agreement referred to
as a Service Enhancement Request is used. The CIS project will
require very specific technical skill sets that staff does not have in the
Department. This agreement will ensure enough of the right
resources are available to support the Project.
The final agreement is an amendment to the existing agreement with
eMeter for $200,000. M. Lopez first provided a quick refresher on
the eMeter Data Management System (MDMS). He then explained
that the amendment is necessary to pay eMeter for services related to
ACTION TAKEN
2012 -2
AGENDA ITEM
upgrading our MDMS, something that is necessary to support
integration with the new CIS.
M. Lopez then invited the Boards attention to a final slide outlining
the Project phases and timeline. The first initiate/design phase would
last approximately six months. That would be followed by a one
year build phase that would include installing software, converting
data from the old system to the new system, and configuring the
system for testing. The final phase would include a rigorous round of
testing for approximately six months.
In conclusion, M. Lopez explained that the next step would be to
seek a recommendation from the Board for approval of the four
agreements in February. With that approval, a recommendation
would be made to City Council in March. As with earlier
presentations, the Board asked and had answers provided to a variety
of questions, involving functionality of the system, funding, other
alternatives that were evaluated, and the status of similar systems in
other utilities. M. Lopez closed by introducing the Project team
members, including Rick Cutter and Steve Wenke from AAC Utility
Partners, Reid Watkins (Assistant Business Information Systems
Manager), and Augie Preciado (Business Information Systems
Analyst IIn.
4. APPROVAL OF OUT OF AREA SERVICE AGREEMENT
FOR WATER AND SEWER AMONG THE CITY OF
ANAHEIM, BUENA PARK HOUSING PARTNERS, LP AND
THE CITY OF BUENA PARK.*
M. Edwards shared with the Board that this is a three -way
agreement to enable Anaheim to provide water and sewer service to
an apartment development just outside Anaheim's city limits in
Buena Park. It is not unusual in the water and sewer industry to
have fringe agreements where a utility company will serve
customers in another utility's territory because the non -host utility
(Anaheim in this case) may have resources closer than the host
utility so there would not be a necessity to construct new pipelines.
She said this is different than the situation with the City of Stanton
because Stanton is served by a private water company and Anaheim
cannot serve within a private water company's service territory
without permission from that company. This situation is different
because Buena Park, which is the service provider, is requesting
that Anaheim serve this development and is a signatory to the
agreement as well as the developer that will be receiving service.
5. DISCUSSION OF UTILITIES SUCCESS INDICATORS.
M. Edwards shared with the Board that she would like to encourage
them to continue to review the document provided in their packets.
She is interested in knowing if these are the kind of parameters that
they believe would be appropriate for the overall agency. In the
interim, behind this high level document, the final document
containing the metrics is being fine- tuned. She asked the Board to
continue to look at these statements and share their thoughts as to
what should be included, if it is too detailed or if they want further
ACTION TAKEN
B. Hernandez moved approval
of the Out of Area Service
Agreement for Water and
Sewer Among the City of
Anaheim, Buena Park Housing
Partners, LP and the City of
Buena Park. C. Peitzer
seconded the motion.
MOTION CARRIED: 6 -0.
ABSTAINED: 0. ABSENT:
0. DELAYED: 1 (P. Carroll).
2012 -3
AGENDA ITEM
explanation of what has been included and why it is a valuable
parameter. She shared with the Board that this item will be on the
agenda for the February meeting.
6. DISCUSSION OF QUARTERLY UTILITIES CAPITAL
IMPROVEMENT PROJECTS REPORT.
M. Edwards reminded the Board that the quarterly report is another
tool used to track capital projects at a more macro level rather than
on a project by project basis.
D. Lee mentioned that the report is a snapshot of the Project
Viewfinder tool that is made available to residents so that they can
dynamically see what is going on near them. The report includes
projects that have been completed, those that are currently active,
and also photos of several projects.
7. DISCUSSION OF QUARTERLY UTILITIES SPOT BID AND
PRE - QUALIFIED CONTRACTS REPORT.
M. Edwards shared with the Board that this is a tool that was
developed at the Board's request to update them on activities in the
Department. City Council has approved pre - qualified lists that may
include 30 to 40 companies who then compete for individual
projects.
8. UPDATE ON WATER SYSTEM ISSUES.
Monthly Water Supply Conditions Update
D. Calkins invited the Board's attention to the Monthly Water
Supply Conditions Update provided in their packets, which is the
first report for this winter. He indicated the weather conditions
have been dry so far; however, overall the supplies for Anaheim
and the Southland are in good shape due to heavy precipitation last
winter allowing water to be moved into both surface and
groundwater storage. He pointed out that the water level in Orange
County's groundwater basin has increased nearly 200,000 acre feet
in the last two years, which should help sustain pumping levels
even if it stays dry this year. A modest increase is expected in the
quantity of groundwater Anaheim will be able to pump next fiscal
year; currently, Anaheim pumps 65% of its total water supply, and
it is expected to increase to approximately 68 % to 70 %.
He responded to a question by the Board about the forecast for the
next couple of months by referring to the 90 day outlook figure in
the updated memorandum, which shows the National Weather
Service is forecasting dryer than normal weather conditions along
the southern portion of the U.S.
Diemer Plant Shutdown Update
D. Calkins provided an update to the Board regarding the
Metropolitan Water District (MWD) shut down of its Diemer
Treatment Plant in Yorba Linda. This Plant, which serves all of
Orange County, was shut down for two weeks in January. He
shared that no Anaheim customers were impacted by the shut down,
ACTION TAKEN
2012-4
AGENDA ITEM
and service was maintained throughout this period by using
groundwater wells and the Lenain Water Treatment Plant ( Lenain)
for water supply. MWD scheduled this shutdown during the winter
time when water demands are low. It is quite common to take a
water facility out of service during the winter for maintenance.
Similarly, Lenain will be taken out of service at the end of January
for a few weeks for maintenance work within the treated water
storage tank.
9. UPDATE ON ELECTRIC SYSTEM ISSUES.
D. Lee invited the Board's attention to some photos of the Canyon
Power Plant and the development and updates of the facility as a
preview to the dedication, which is March 6, 2012 at 11:00 a.m.
He also shared a series of photos from the new Kaiser Hospital. He
mentioned that this new hospital complex will be about 8
megawatts of load at full capacity. For perspective, he indicated the
Lakeview Kaiser Hospital is about 2 megawatts.
10. UPDATE ON FINANCE ISSUES.
E. Zacherl invited the Board's attention to the December Financial
Dashboard. Electric sales year to date were $195 million. This was
below forecast by $4.7 million or 2.3 %. Of that amount, 60% of
the variance occurred during December due to relatively mild
weather conditions. Industrial sales were also down. Fortunately,
expenses were less than budget at $184.4 million creating a
favorable variance of $3.1 million.
He responded to a question by the Board regarding the
Department's projections for revenue growth. E. Zacherl stated the
assumption currently in use is that revenues will be relatively flat
for next year with no significant growth being projected.
E. Zacherl continued by sharing that water sales of $31 million
through December were slightly under budget by approximately
$300,000 or 1 %. Expenses through December of $24 million were
also under budget by $1.5 million or 5.9 %.
11. UPDATE ON JOINT SERVICES ISSUES.
M. Edwards invited the Board's attention to the memo provided at
their place setting regarding the Intermountain Power Plant Unit 1
outage. She shared that, near the end of December, an
Intermountain Power Plant unit experienced significant damage.
The unit is not expected to return to service until possibly July
2012. Further, there is some concern about Unit 2, which will be
coming down for a planned outage on January 26' to be inspected
for similar vulnerabilities. Ultimately, staff has performed a
preliminary analysis of the potential financial impact of losing Unit
1, and the gross impact is roughly $12 million due to an increase in
purchased power cost and the reduction in wholesale revenue as a
result of less surplus energy available. However, there is a
reduction in coal usage at the facility as a result of the outage that
would produce an operating savings of about $7 million. The net
ACTION TAKEN
2012-5
AGENDA ITEM
impact of the outage makes it closer to $6 million. The Board will
be kept advised as this situation continues to mature.
S. Sciortino then shared with the Board that the Cap- and -Trade staff
report will be presented to them at the next meeting for their review
and consideration and reminded them of some of the elements that
are being sought is the authority to participate in the GEC's Cap -
and -Trade auction.
S. Sciortino indicated that the North American Energy Standards
Board Wholesale Gas Enabling Agreement (NAESB) will be
deferred another month. He also mentioned that the announcement
of the Eco City Award for Orange County will be tomorrow
evening.
12. UPDATE ON RISK & LEGISLATIVE/REGULATORY
AFFAIRS ISSUES.
J. Lehman shared that the 2011 Legislative Wrap Up Report
summarizing the impacts from the state legislature last year was
provided to the Board. While discussions with the Board have been
on- going, a goal of the report was to let the City Council know the
impacts of legislation passed last year on utility operations.
J. Lehman reported that the 2012 Legislative session is starting off
slowly, and there hasn't been any movement to date on the public
goods water charge, which could have the ability to significantly
increase water costs. What has been introduced of interest, so far,
are two Renewable Portfolio Standards (RPS) bills that would make
it somewhat easier to implement RPS because the provisions of the
bills would change the State's requirements for how the 33 % RPS
is calculated. Instead of being based on 33% of total retail sales, it
would be based from a net sale calculation that subtracted Ioad met
by hydro generation facilities.
She then provided an update on the Internal Compliance Plan. The
Canyon Power Plant has experienced two events related to start up
conditions causing carbon monoxide levels for very short periods of
time to exceed permit conditions. Canyon staff met with the
AQMD (Air Quality Management District) this week, and a notice
of violation may be issued for these two events. The fines would be
approximately $1,000.00 each. Asa result of extensive research, in
addition to the use of a consultant, it seems that the permit
conditions for carbon monoxide have been set too low for the
facility, and it appears a permit modification may be obtainable for
the plant. An update will be provided to the Board regarding this at
the next meeting.
She answered a question by the Board, would these permit
modifications alleviate these incidents by explaining it would,
however it would not take them off the record.
ACTION TAKEN
2012 -6
AGENDA ITEM ACTION TAKEN
13. POTENTIAL AGENDA ITEM(S) FOR THE NEXT PUBLIC
UTILITIES BOARD MEETING ON FEBRUARY 22, 2012.
• Presentation on Water Capital Projects
• San Onofre Nuclear Generating Station (SONGS) Amended
and Restated Second Amended Operating Agreement *
• Carbon Offsets & California Carbon Allowances Transaction
• Agreements for Customer Information System (CIS)
Replacement Project *
• Master Agreement to offer Assistance to Customers on
Backflow Devices Installation *
14. ITEMS BY SECRETARY.
None.
15. ITEM (S) BY THE BOARD
J. Machiaverna thanked M. Lopez for the presentation on the
Customer Information System Project. He also shared that he and
neighboring businesses experienced a power outage yesterday.
B. Hernandez asked who replaced Iry Pickier on the Orange County
Water District Board of Directors and was informed that
Councilmember Sidhu was appointed by City Council.
D. Morgan indicated that he felt that this should be a good year.
S.E. Faessel expressed her congratulations and best wishes to Iry
Pickier for his dedication, time, and accomplishments for the
Orange County Water District Board as well as his community.
C. Peltzer said he was curious about and would like to receive more
information on the coal litigation from three or four years ago.
J. Brandman thanked D. Lee for the tour of the Canyon Power
Plant. He is also looking forward to the dedication on March 6'
He thanked all staff and those who attended the reception for Iry
Pickier.
16. ADJOURNMENT: (TO THE REGULAR MEETING ON
FEBRUARY 22, 2012, AT 5:00 P.M., IN THE 11" FLOOR
LARGE CONFERENCE ROOM, ANAHEIM WEST TOWER,
201 S. ANAHEIM BOULEVARD, ANAHEIM,
CALIFORNIA).
S.E. Faessel moved to adjourn
the Regular Meeting at 7:02
p.m. in honor of Iry Pickier to
the Board's next Regular
Meeting date of February 22,
2012 at 5:00 p.m. C. Peltzer
seconded the motion.
MOTION CARRIED: 7 -0.
ABSTAINED: 0. ABSENT:
0.
2012-7
AGENDA ITEM ACTION TAKEN
Respectfully submitted,
Marcie L. Edwards
Secretary, Public Utilities Board
* Indicates item(s) that will be forwarded to City Council for action upon recommendation by the Board.
** Indicates item(s) that will be forwarded to City Clerk and City Council for informational purposes.
2012-8