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Public Utilities 2012/08/22CITY OF ANAHEIM PUBLIC UTILITIES BOARD MINUTES August 22, 2012 The agenda having been posted on Wednesday, August 15, 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, August 22, 2012, in the 1 l' Floor Large Conference Room, Anaheim West Tower, 201 S. Anaheim Blvd., Anaheim, California. Board Members Present: J. Brandman, J. Machiaverna, P. Carroll, C. Peltzer, D. Morgan, B. Hernandez, S.E. Faessel Board Members Absent: None Staff Present: M. Edwards, D. Calkins, D. Lee, S. Sciortino, E. Zacherl, D. Shen, M. Lopez, J. Lehman, A. Kott, L. Quiambao, P. Oviedo, T. Sato, M. Samra, G. Bowen, B. Beelner Guest(s) Present: D. Wain, Resident; S. Faessel, Resident; B. Darling, CIS System and Software Project Manager AGENDA ITEM 1. PUBLIC COMMENTS. No Public Comments. 2. APPROVAL OF THE REGULAR PUBLIC UTILITIES BOARD MEETING OF JULY 25, 2012. * M. Edwards invited the Board's attention to corrections in the Energy Risk & Legislative / Regulatory Affairs section of the minutes. J. Lehman explained to the Board that the incident that resulted in a code violation occurred in 2011, not last quarter. 3. APPROVAL OF THE DECLARATION OF OFFICIAL INTENT TO REIMBURSE CERTAIN WATER EXPENDITURES FROM WATER UTILITY BONDS OR OTHER OBLIGATIONS. * The written, publicly available staff report detailing the item was verbally summarized by staff. ACTION TAKEN J. Brandman closed the public comments portion of the meeting. D. Morgan moved approval of the July 25, 2012, Public Utilities Board Minutes as amended. B. Hernandez seconded the motion. MOTION CARRIED: 7 -0. ABSTAINED: 0. ABSENT: 0. P. Carroll moved approval of the Declaration of Official Intent to Reimburse Certain 42 ITEM NO. 07 Water Expenditures from Water Utility Bonds or Other Obligations. D. Morgan seconded the motion. MOTION CARRIED: 7 -0. ABSTAINED: 0. ABSENT: 0. 4. APPROVAL OF CALIFORNIA ENERGY COMMISSION ANNUAL 1306A AND QUARTERLY 1305 REPORTS, AB 162 REPORT, ANNUAL POWER CONTENT LABEL, AND ATTESTATIONS. * The written, publicly available staff report detailing the item was verbally summarized by staff. The Board asked a variety of questions which culminated in their decision to support the approval of the California Energy Commission Annual 1306A and Quarterly 1305 Reports, AB 162 Report, Annual Power Content Label, and Attestations for Anaheim City Council's review and consideration. 5. APPROVAL OF CAP - AND -TRADE PROGRAM UPDATE AND AMENDMENTS REQUIRING ADDITIONAL DESIGNATED REPRESENTATIVES. * The written, publicly available staff report detailing the item was verbally summarized by staff. The Board asked a variety of questions which culminated in their decision to support the approval of Cap- and -Trade program update and amendments requiring additional designated representatives for Anaheim City Council's review and consideration. 6, UPDATE ON WATER SYSTEM ISSUES. D. Calkins, AGM of Water Services, gave a presentation to update the Board on construction progress of the Linda Vista Reservoir and Pump Station Replacement Project. Construction of the Project is currently on time, on budget, and is approximately half completed. Completion is scheduled for June of next year. D. Calkins mentioned to the Board that there is the possibility that Anaheim's Metropolitan Water District (MWD) Director, Kris Murray, will be co- hosting a Colorado River Aqueduct Inspection Trip in late October. About a month ago, Ms. Murray agreed with Fullerton's MWD Director, Jim Blake, to host a joint tour with the City of Fullerton on October 26 to 28, 2012. S.E. Faessel moved approval of the California Energy Commission Annual 1306A and Quarterly 1305 Reports, AB 162 Report, Annual Power Content Label, and Attestations. C. Peltzer seconded the motion. MOTION CARRIED: 7 -0. ABSTAINED: 0. ABSENT: 0. J. Machiaverna moved approval of the Cap- and -Trade program update and amendments requiring additional designated representatives. P. Carroll seconded the motion. MOTION CARRIED: 7 -0. ABSTAINED: 0. ABSENT: 0. 43 However, Fullerton is in the process of replacing their MWD Director. As soon as they do, we will confirm if they still want to do a joint tour with Anahcim, and if so, we will mail out invitations soon after that. The Board asked staff to send them an email with information on the tour, even though it is tentative at this time. D. Calkins referred to the hot weather the last few weeks, and indicated the water system demand has not been all that high the last week or so, Anaheim's daily demand has been about 75 million gallons per day (mgd). Three years ago, Anaheim's peak day demand was 87 mgd, and the all -time peak was back in 1996, at 107 mgd. This reduction in water demand is in line with other water utilities in the Southland and is due to conservation efforts and, in part, to the recession. 7. UPDATE ON ELECTRIC SYSTEM ISSUES. D. Lee, AGM of Electric Services, shared with the Board a summary of electric reliability for the month of August. Historically, over the past twenty years, the utility averaged about 16 outages per month, with a high of 130 outages during wind storms in 2003, and a low of 2 outages. In 2011, there were 24 outages in August, and this year, there have been 19 to date, which he indicated is within normal levels. Several steps were taken to address the warm weather, including keeping extra staff as needed for faster response and re- arranging a circuit to alleviate higher electric demand. D. Lee also shared with the Board that the Underground Conversion Five Year Plan was approved by City Council on August 21" with the modification that the Lincoln/Rio Vista project was accelerated in the schedule by two years, just after the Miraloma project. This was done because Lincoln is a major corridor and will underground Lincoln throughout the city, and there has been strong community interest in that area. 8. UPDATE ON FINANCE ISSUES. E. Zacherl, AGM of Finance and Administration, invited the Board's attention to the July Financial Dashboard and shared that the first month of the fiscal year's electric revenues of $29.7 million were $0.8 million under budget or approximately 2.7 %. Retail revenues were over budget by $800,000; however, they were offset by wholesale sales of approximately $40,000, which were under budget by $1.6 million. This unfavorable variance was the result of extremely low spot market prices that were less than the Department's cost to generate power at any of its facilities frequently during the month, resulting in minimal wholesale sales. Electric expenses for the month of $21.1 million were $6.4 million under budget or approximately 23.3 %. The primary reasons for the under - budget condition were the reduction in variable costs associated with the reduction in generation due to the lack of wholesale sales, and a delay in production start -up at the new Brea landfill gas facility eliminating the need to pay for test energy, which had been projected when the budget was prepared. 44 E. Zacherl then invited the Board's attention to the Water portion of the Dashboard, which showed July's water revenues of $6.2 million were $500,000 over budget or approximately 9.5% due to warmer temperatures during the month. Water expenses for the same period of $4.2 million were $100,000 over budget or approximately 1.9% as a result of having to purchase additional water supply for the increased sales. E. Zacherl completed the report to the Board by sharing that the transaction to refund the 2002A Series of Electric Revenue Bonds, to take advantage of current market low interest rates, is scheduled to take place during the first week of September. It is anticipated that new bonds will reduce the Department's debt service by approximately $800,000 a year for the next 20 years and will not extend the maturity date of the original issue. D. Morgan left at 6:13 p.m. 9. UPDATE ON JOINT SERVICE ISSUES. S. Sciortino, AGM of Joint Services, shared with the Board the status of the retail electric consumption to date for the month of August. Temperatures in the last few weeks have been several degrees above average and there have been six days where the peak load was over 500 Mega Watts (MW). The summer peak thus far is 524 MW and, for the time being, energy consumed at the retail level is about 13% ahead of the budget. S. Sciortino invited the Board's attention to a presentation on some of the high -level components of the new Customer Information System (CIS) program to be made by Bubba Darling, Vice President of Systems and Software (S &S). The S &S model provides all the characteristics of the current CIS program but with the latest technology that will provide a lot more flexibility in meeting tasks. Unlike the current software, which requires several screens to provide basic customer information, B. Darling demonstrated how the new program will allow Customer Service Representatives (CSRs) to have much more information on a customer without having to toggle back and forth to other screens, and the CSRs can utilize mouse controls to navigate with each screen and for different applications. There is a considerable amount of information available with a few clicks of the mouse, allowing for more efficiency and quicker access to data. B. Darling also presented several new applications that will be available with the new system, including the ability to have "instant chatting" with customers on -line as well as the ability to save those chats in similar fashion as storing notes when talking to individual customers. In addition, all activity in the system will be available in real -time so that information that would now require waiting overnight to be available can be accessed as soon as it's in the system. For example, if a customer with a late notice who's about to be disconnected comes in with payment, that information is immediately available to the Field Service Representative (FSR) who would be in route to do the disconnect. The system will delete that order and route the FSR to the next activity on his list. 45 Additional new features include scheduling and routing jobs for FSRs, and eliminating excess paper work associated with their tasks, allowing the dispatcher to see where each FSR is located in the field and the capability to easily reroute an FSR, when required. FSRs will also have GPS available to make it easier to get to each task. In conclusion, B. Darling demonstrated the tools customers will have at their disposal by logging into their respective accounts. Customers can evaluate a lot of their historic consumption as well as determine the billing impact of changing their rate structure and/or pattern of electricity use during the day. The Presentation was concluded by showing how customers can use smart phones to access their accounts, review their information and pay their bills 10. UPDATE ON ENERGY RISK & LEGISLATIVE 1 REGULATORY AFFAIRS ISSUES. J. Lehman, Chief Risk Officer, invited the Board's attention to Department's Enterprise Risk Management Program Report, referring to the presentation given on the Program, as well as the discussion on the Utilities Success Indicators. The Program assists the Department in identifying, managing and monitoring risks throughout the organization. The Utility Success Indicators offer measures for how the Department's Enterprise Risk Management Program is performing. The performance indictors cover the key elements of utility operators. The Department performed well, customer response time is quick and customers expressed satisfaction, rates are lower than nearby competitors, and work place safety is high. The Department, however, did not meet two of its goals. Revenues were under budget, however so were corresponding expenses. Also, due to the notice of violation received, because of insufficient air emission credits during the early startup of the Canyon Power Plant, the Department did not meet its goal of being in compliance with all applicable laws and regulations. The Department staff is optimistic that all goals will be met for the next reporting period. J. Lehman also referred to the Department's quarterly Wholesale Energy Risk Management (ERM) Report. Sharing that the Department was in full compliance with the ERM program for the Quarter and despite a decrease in the average credit of the counterparty credit portfolio rating, credit quality is good and the Department's credit exposure is minimal with the Moody's average rating moving from Aa3 to A I in late June. The Standard and Poor's average rating remained the same at A +. This decline resulted because several counterparties have credit guarantees from large global banks that had their credit ratings downgraded in late June by Moody's, amid worries that the European economic market turmoil could slow their profit and growth. These banks remain investment grade and the Department's credit exposure is minimal. J. Lehman concluded with a quick update on legislative affairs, sharing that this is the season of amendments and deal cutting, 46 and there are still many bills to be closely watched. Two in particular would create special rates for certain renewable resources, and Anaheim Public Utilities (APU) is working with other utilities to actively oppose these bills. Though the authors are working to cut deals, the bills still expand programs that could create rate subsidies. The investor owned utilities oppose these bills, as well. Also, the Greenhouse Gas (GHG) fund usage bills are being monitored. The APU Department's website has been updated to include a separate legislative section. It's quite easy to access, from the Department's webpage you click on the icon of the state capitol and you are taken directly to the legislative webpage: i 1 1 011` 1 430 LI ' I No items. 12. IT (S) BY SECRETA No items by Secretary. FKMV42If► 1 1 17- IVO u 1 01' �� P. Carroll complimented the meeting highlighting the goals set forth, the presentations namely upcoming CIS implementations, and the refinancing to save Utilities $800,000 a year, for the next 20 years. S.E. Faessel commented on her gratefulness to be a resident in Anaheim and the many services, which was confirmed within the past month that verified that Anaheim is on top of services. B. Hernandez shared his gratitude for the progress of the Underground Utility Conversion and expressed that he is always impressed with the meetings and the smart thinking that goes into the planning. J. Machiaverna agreed with P. Carroll believing that with the progress in the future there will be a level of success to measure against, and keep members motivated. He also commented that no matter what the Department comes against, it keeps moving forward. J. Brandman complimented staff on another great meeting, and recognized D. Lee for the approval of the Five -Year Underground Project during last night City Council meeting, which impressed Members, as usual. 47 14. ADJOURNMENT: (REGULAR MEETING ON SEPTEMBER 26, 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 7:00 p.m. to the Board's next meeting date of September 26, 2012 at 5:00 p.m. P. Carroll seconded the motion. MOTION CARRIED: 6 -0. ABSTAINED: 0. ABSENT: 1 (D. Morgan). Respectfull b iced, 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. M