Public Utilities 2012/11/14CITY OF ANAHEIM
PUBLIC UTILITIES BOARD
MINUTES
November 14, 2012
The agenda having been posted on Thursday, November 8, 2012, the Regular Meeting of the Public Utilities
Board (Board) was called to order by Chairperson Jordan Brandman at 5:01 p.m. on Wednesday, November
14, 2012, in the 11' Floor Large Conference Room, Anaheim West Tower, 201 S. Anaheim Blvd., Anaheim,
California.
Board Members Present: J. Brandman, D. Morgan, P. Carroll, B. Hernandez, S.E. Faessel
Board Members Absent: J. Machiaverna, C. Peltzer
Staff Present: M. Edwards, D. Calkins, D. Lee, S. Sciortino, E. Zacherl, A. Kott
J. Lehman, G. Bowen, L. Quiambao, P. Oviedo
Guest(s) Present: D. Wain, Resident & Chairperson of the East District Neighborhood Council;
S. Faessel, Chairperson of the Undergrounding Subcommittee,
AGENDA ITEM
M. Edwards read the following Proclamation presented by the
Department into the record:
Anaheim Public Utilities Board recognizes and honors Jordan
Brandman for dedicated service to the Anaheim residents and
businesses as a Public Utilities Board member from July 2007 to
December 2012, having also served nearly two years as Chairperson
of the Board; for providing experienced guidance as how to best serve
the Anaheim community, resulting from many years of experience as
the President of the Anaheim Union High School District Board of
Trustees, the Director of Workforce Development for the Orange
County Business Council, the policy advisor for the Governor's
Office of the Secretary of Education, and as legislative support to
Assembly member Tom Umberg; for supporting investments in
rehabilitation and replacement of the water Utilities' infrastructure to
ensure a reliable water system, including the establishment of new
wells, the replacement of the Linda Vista Reservoir, the
refurbishment of the Walnut Canyon Reservoir, and the upgrade of
the Nohl Canyon Storage Tank; for tireless commitment to improving
the overall service reliability of the Electric Utility, as well as
enhancing the community aesthetically, through programs such as the
Underground Conversion, the construction of the Vermont and
Anaheim Substations, the upgrade of Lewis Substation, and the
development of Canyon Power Plant; for commitment to educating
the public on the benefits of solar energy to Anaheim schools by
ACTION TAKEN
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championing Solar Flag installations at eight elementary schools, and
enthusiastic support of the Solar Cup competition that has
encouraged our youth to embrace sustainable technologies; Therefore
on this 14' Day of November 2012, on behalf of all Anaheim Public
Utilities employees, the City of Anaheim, and the ratepayers of our
community, Anaheim Public Utilities proudly recognizes and honors
the counsel and accomplishments of Chairperson Jordan Brandman,
as he concludes his service on the Anaheim Public Utilities Board.
J. Brandman responded by sharing that it has been an honor and
privilege to serve with everyone. He shared that this was the first
community post to which he had been appointed to, and how much he
has learned about the City of Anaheim. He continued by stating that
good work on behalf of the community is not done, and expressed
that he looked forward to working with everyone in his new capacity.
1. PUBLIC COMMENTS. J. Brandman closed the
public comments portion of
D. Wain congratulated J. Brandman on his electoral success and looks the meeting.
forward to working closely with him.
S. Faessel acknowledged the achievement of J. Brandman and
provided words of encouragement.
2. APPROVAL OF THE MINUTES OF THE REGULAR PUBLIC S.E. Faessel moved approval
UTILITIES BOARD MEETING OF OCTOBER 24, 201.2. * of the October 24, 2012,
Public Utilities Board
Minutes. D. Morgan
seconded the motion.
MOTION CARRIED: 5 -0
ABSTAINED: 0
ABSENT: 2 (C. Peltzer, J.
Machiaverna)
3. ADOPTION OF THE PROPOSED 2013 PUBLIC UTILITIES D. Morgan moved approval
BOARD MEETING SCHEDULE. ** of the Adoption of the
Proposed 2013 Public
Utilities Board Meetings
Schedule. B. Hernandez
second the motion.
MOTION CARRIED: 5 -0
ABSTAINED: 0
ABSENT: 2 (C. Peltzer, J.
Machiaverna)
4. PRESENTATION ON OLINDA LANDFILL GAS TO G. Bowen will research and
RENEWABLE ENERGY FACILITY UPDATE. report to the Board: where
the closest hazardous landfill
G. Bowen, Integrated Resources Manager, presented an update on the site is to Anaheim; and what
Olinda Landfill Gas to Renewable Facility. the long term plan is after
this facility closes in 2021.
W
5. APPROVAL OF AMENDED AND RESTATED
TRANSMISSION CONTROL AGREEMENT AMONG THE
CALIFORNIA INDEPENDENT SYSTEM OPERATOR
CORPORATION AND TRANSMISSION OWNERS,
INCLUDING THE CITY OF ANAHEIM. *
The written, publicly available staff report detailing the item was
verbally summarized by M. Edwards.
One aspect of this item was the additional request by staff that M.
Edwards be granted limited City Council authority to sign later
versions of this Agreement without bringing it to City Council, only
when the changes were in Anaheim's overall best interests and with
the concurrence of the Utilities Attorney. A Board member asked
what checks and balances existed to manage this delegation of
authority. M. Edwards stated that when staff requests a delegation of
City Council authority, it is typically a narrow request. Further, that
the Utilities Attorney, A. Kott, ensures that everything is done
consistently with the parameters included in the request prior to
signing any subsequent amendments as approved as to form. Finally,
it should be noted that the request to delegate limited signature
authority is most typically used to limit bureaucratic paperwork, not
exercise greater control. The majority of requests for delegated
authority have wording that the delegation is requested for those
changes which the Utilities Attorney deems administrative or
ministerial.
A Board member referenced a previous discussion regarding
empowering staff to be nimble and able to make decisions in a timely
fashion, adding that this is an example of granting greater flexibility,
but that it must also be balanced with the Board's interest and ability
to verify information. This Board member agreed that it made sense
to give Anaheim Public Utilities (APU) authority, but more
information should be provided to the Board during the amendment
process. M. Edwards agreed and further described the inherent
checks and balances process that occurs within APU. A. Kott further
shared that, to narrow the parameters of M. Edwards authorization in
this instance, there is an analysis process through the Federal Energy
Regulatory Commission (FERC) for approval of this Agreement as
well. The process involves the California Independent System
Operator (CAISO), which consists of many different groups that are
involved in the Agreement, and then it goes to FERC, adding that at
any time along the way, people can intervene and object to the
Agreement. The Agreement is transparent and very well vetted.
Other Board members commented that it is an ongoing struggle to
avoid unneeded bureaucracy, yet insure items get an appropriate
review. Trying to balance common sense with getting things done,
along with having an adequate review process, makes it hard to
determine where to draw the line without knowing every detail of the
Agreement and of the surrounding market environment. However, it
seems that all the CAISO members are interested in not getting gamed
by a potential new member. Therefore, this Board member believed
that a good middle ground would be to report to the Board when a
change is made, but to allow the delegation of authority.
P. Carroll moved approval of
Amended and Restated
Transmission control
agreement among the
California independent
system operator's
corporation and
Transmission owners,
including the City of
Anaheim. S.E. Faessel
second the motion.
MOTION CARRIED: 5 -0
ABSTAINED: 0
ABSENT: 2 (C. Peltzer, J.
Machiaverna)
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Additionally, the Board was reminded that the Utilities Attorney, A.
Kott, works for the City Attorney, not the Utilities General Manager.
Ms. Kott's structure and orders are set through the City Attorney's
office and the City Council, as far as her oversight of the Utility
Department. Board members indicated that they were comfortable
with supporting approval in this instance, because of the added review
taking place by other agencies, as well as the City Attorney's Office.
One Board member shared that the City Manager has certain signing
authority and the amount of authority he held was an issue at one
point. He continued in sharing that wisdom maybe in the preference
to not have so much authority. Further sharing that the City Manager
kept a log of everything signed through the year, and presented it to
City Council once a year. This provides City Council the ability to
see what is being signed through the year and also stands as a public
document. Ms. Edwards will be happy to structure a review of
documents she signs at whatever frequency the Board would prefer.
The Board ultimately determined to support bringing forward this
item to Anaheim City Council with their recommendations to
approve.
6. UPDATE ON WATER SYSTEM ISSUES.
D. Calkins, AGM of Water Services, shared that Councilmember Kris
Murray was today's featured speaker at the monthly Orange County
Water Association (OCWA) meeting, which is an association of
Water Professional from throughout Orange County. K. Murray was
asked to speak — as an Anaheim councilmember and the Metropolitan
Water District (MWD) Director. Her topic was Partnerships, both
Public / Private partnerships and Public / Public partnerships. She
spoke about the Canyon Power Plant, the Water Recycling
Demonstration Plant, and associated "Water Sustainability Campus ",
and our partnership with the Community Services Departments where
Public Utilities installed a centralized irrigation controller to reduce
water use and maintenance costs for the Parks, in exchange for five
well sites in selected Parks.
M. Edwards highlighted two recent events where one of the Public
Utility's Water Field troubleshooters, Ernie Escobedo, exhibited
excellent judgment under pressure and great customer service skills.
When a water main break occurred on Miller Street near Mira Loma
Avenue a few days ago. E. Escobedo was the first to arrive, at which
time he took the initiative to close this major street to traffic due to
uncertain conditions. His early action may very well have prevented
cars from entering a sinkhole, since the main break caused significant
undermining of the street asphalt. E. Escobedo didn't wait for
direction from management; he used good judgment by making the
decision and then advising management. E. Escobedo is the same
troubleshooter that was the subject of a recent commendation letter in
which the customer congratulated him, on his ability to turn an angry
customer to a utility supporter, due to his caring and personal
approach. The Department will congratulate and recognize E.
Escobedo on behalf of management and the Board.
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7. UPDATE ON ELECTRIC SYSTEM ISSUES.
D. Lee, AGM of Electric Services, provided an update on the crew
that was sent to assist Long Island Power Authority (LIPA), whose
customers experienced significant outages as a result of Superstorm
Sandy. At the time that contact was made with LIPA, approximately
600,000 of their 1.1 million customers still did not have power.
Anaheim's five person crew and vehicles were airlifted in a military
C5 transport into John F. Kennedy Airport, and spent nearly two
weeks installing poles and wires in mostly residential areas of Long
Island.
M. Edwards shared that the Department is in the process of reviewing
its own emergency planning, disaster response efforts, and customer
communications, based on lessons learned from Superstorm Sandy
and other regional events.
8. UPDATE ON FINANCE ISSUES.
E. Zacherl, AGM of Finance and Administrative Services, shared with
the Board that due to the timing of the City's monthly accounting
close process for the month of October, and its close proximity to the
date of the November Board meeting, a Financial Dashboard was not
currently available, but would be distributed to the members of the
Board as soon as it is. He was able to share with the Board some
preliminary retail sales information. Electric retail revenue for
October was $4.6 M or 16.3% over budget. Water retail revenue for
October was $724,000 or 15% over budget. E. Zacherl continued to
share that this was a continuation of the positive impact driven by
weather, but cautioned that although very positive for the month, the
results did not offset the revenue shortfalls, for the past four years.
Careful monitoring of expenses will continue with the goal of slowly
replenishing reserves.
E. Zacherl also reported to the Board that the annual citywide audit
was still in progress and to date had not identified any findings of
deficiencies. At the Board's request, he will provide access to the
final stand -alone audited financial statements for the Utility
Department a summary of the audit process in January, after the audit
is complete.
9. UPDATE ON JOINT SERVICES ISSUES.
S. Sciortino, AGM of Joint Services, shared with the Board that the
first auction under the Cap and Trade regulation of the California Air
Resources Board (CARB) took place on November 14th. He
recapped that the Department was not participating in the auction at
this time, and included that, the CARB allowed a delay in
participation by Anaheim and the other publicly -owned utilities who
are members of the California Independent System Operator ( CAISO)
Agency, pending language changes in the CAISO tariff, that would
exclude energy from POU's tax - exempt generating resources used to
meet load requirements from being deemed "sales" to the CAISO.
This exclusionary language would permit Anaheim and others to use
allocated Greenhouse Gas (GHG) allowances used for meeting retail
loads, to be placed in a compliance account, rather than being
At the Board's request, the
crew members that assisted
Long Island Power Authority
after Superstorm Sandy will
be invited to be recognized
by the Board at a PUB
meeting.
At the Board's request, E.
Zacherl will insure that the
Board member have access
to the audit report.
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required to submit those same allowances into the auction
process. While the Department has a variety of mechanisms in place
to mitigate any financial risks that may occur as a result of the auction
process, having Federal Energy Regulatory Commission (FERC)
accept the tariff change would reduce Anaheim's participation in the
auction process dramatically. S. Sciortino indicated that the FERC
may rule on the acceptance of the tariff change by the end of the year.
10. UPDATE ON ENERGY RISK & LEGISLATIVE /
At the Board's request, J.
REGULATORY AFFAIRS ISSUES.
Lehman will provide the
Board with an update
J. Lehman, Chief Risk Officer, shared a short update on the
regarding financial
Department's compliance, risk and legislative /regulatory related
certification, liabilities, and
activities.
exemptions according to the
Dodd Frank Act.
She invited the Board's attention to the quarterly report on the
Wholesale Energy Risk Management (ERM) Program at their place
settings, and shared that all transactions were within the ERM
Program requirements, and the Department was in full compliance
with all aspects of the ERM Program.
J. Lehman reported that as the Chair of the Southern California Public
Power Authority's (SCPPA) Risk Managers' Committee, she
arranged a well- attended joint meeting with all interested SCPPA
members on the implementation requirements of the Dodd -Frank
Wall Street Reform and Consumer Protection Act. The purpose of
this effort was to provide an information sharing forum, ensure all
interested members have a common understanding of the fundamental
requirements known to date (the regulations are still under
development though implementation dates are in effect), and to
identify areas where resource sharing may be effective.
Lastly, she shared information regarding the power plants stating,
there had been no further issues relating to the South Coast Air
Quality Management District permits.
11. AGENDA ITEM(S) FOR THE NEXT PUBLIC UTILITIES
BOARD MEETING ON DECEMBER 19,2012:
• Renewable Portfolio Standard Annual Procurement Plan
• Utility Related Regulatory Relief Measures *
• Firm and Non -Firm Point -to -Point Transmission Service
Agreement with Various Transmission Service Providers
• Reimbursement Agreement with Irvine Company for Annexation
of Mountain Park into Orange County Water District *
12. ITEM(S) BY SECRETARY.
In response to the Board's request to be briefed on the Anaheim Rapid
Connection (ARC) alternatives, Public Work's staff plan to attend the
February 20, 2013 Board meeting to make a presentation.
M. Edwards shared that the City Council approved the hiring of Paul
Emery as the Assistant City Manager. Hi experience includes 12
years in Santa Ana as the Public Works Director; he should begin the
second week in December.
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M. Edwards also shared that John Woodhead is now the permanent
Community Development Director and Greg Garcia, who was the
Deputy City Manager Administration, is now the Deputy City
Manager.
13. ITEM(S) BY BOARD MEMBERS.
P. Carroll congratulated J. Brandman on his appointment on the City
Council, indicating that it's been a pleasure working with him on the
Board. He further indicated that he has done a great job as Chair and
is confident he'll lead Anaheim forward as a Councilmember. He
also thanked G. Bowen for updating the Board on the opening of the
Olinda Landfill Gas site.
S.E. Faessel extended her congratulations to J. Brandman on his new
elected position. She also thanked the General Manager and staff for
the joint effort in keeping the best interest of Anaheim, and for
keeping the balance and counterbalance in making day to day
decisions. She complimented Ernie Escobedo and the crew in going
the next step and taking a risk to do what needs to be done.
D. Morgan congratulated J. Brandman and gave him words of
encouragement on being an elected official. He also commented on
watching J. Brandman as he became involved in the community and
working his way up, and said that it is appreciated how J. Brandman
paid his dues and earned his position.
B. Hernandez congratulated J. Brandman and wished him luck and
expressed that he will be missed on the Board.
J. Brandman thanked everyone for their well wishes and indicated that
he looks forward to working with everyone in his new capacity. He
also expressed his gratitude about the relationships he has built with
everyone.
14. ADJOURNMENT: (TO THE REGULAR MEETING ON
DECEMBER 19, 2012 AT 5:00 P.M., IN THE 11` FLOOR
LARGE CONFERENCE ROOM, ANAHEIM WEST TOWER,
201 S. ANAHEIM BOULEVARD, ANAHEIM, CALIFORNIA).
Respectfully submitted,
r
Marcie L. Edwards
Secretary, Public Utilities Board
D. Morgan moved to adjourn
the Regular Meeting at 6:50
p.m. to the Board's next
meeting date of December
19, 2012 at 5:00 p.m. B.
Hernandez seconded the
motion.
MOTION CARRIED: 5 -0
ABSTAINED: 0
ABSENT: 2 (C. Peltzer, J.
Machiaverna)
* 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.
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