Public Utilities 1996/08/01 Vz-
D
PUBLIC UTILITIES BOARD �EP T
MINUTES q 29 pm , v
OPF CE CF r ,
AUGUST 1, 1996 CITY OF rtih
The agenda having been posted on Friday, July 26, 1996, the Regular Meeting of the Public Utilities
Board was called to order by Chairperson Dale Stanton at 3:30 p.m., on Thursday, August 1, 1996, in
the City Hall West, 1 lth Floor Conference Room, 201 S. Anaheim Blvd., Anaheim, California.
Board Members Present: D. Stanton, W. Wiseman, T. Kirker, J. White, P. Lem, R. Lawson
Board Members Absent: D. McMillan
Staff Present: E. Aghjayan, M. Bell, D. Tarkington, H. Pepper, L. Moses,
P. Grimes, K. Thalman, J. Harmon, J. Lehman, L. Topaz,
D. Shackelford, J. Gonzalez, R. Howell, K. Welch, G. Wilbert
Guests Present: None
1. PUBLIC COMMENTS
Chairperson D. Stanton asked for public comments. There being none, the Public Comments
portion of the meeting was closed.
2. APPROVAL OF THE PUBLIC UTILITIES BOARD MINUTES OF MAY 2, 1996
P. Lem requested to add information to the minutes on the consolidation of the bankruptcy
accounts of the City; not to the water and electric balance sheets (page 337, line 17, first
paragraph).
E. Aghjayan explained that the purpose in reviewing the minutes is to correct mistakes in the
minutes and not to rewrite the minutes.
L. Moses stated that the minutes will stand as submitted unless an inaccuracy is stated.
P. Lem stated he was inaccurately quoted on the statement regarding the water and electric
utility billing sheets.
D. Stanton requested that staff re- listen to the tape for the May 2, 1996 meeting.
E. Aghjayan explained that the secretary would take P. Lem's request and compare it to the
minutes of May 2, 1996. He also requested to leave the minutes of May 2, 1996 unapproved
until the next meeting at which time a report will be given.
347
T. Kirker further clarified P. Lem's question (page 327, last paragraph) as to the reason some
underground circuit footage is $238 and other footage is $788. He explained that the savings are
due to more than one duct bank. He also clarified that Southern California Edison (SCE) may be
removed from Anaheim's generators if Anaheim experiences a catastrophe.
D. Stanton stated May 2, 1996 minutes will be reviewed and discussed at the next meeting.
3. APPROVAL OF THE PUBLIC UTILITIES BOARD MINUTES OF JUNE 6, 1996
P. Lem requested a correction from 4,000 meters to 4,488 meters (page 339, section 2,
paragraph 5, line 1). He also requested a correction from 3% to 17% in reference to Anaheim's
decrease (page 343, first paragraph, line 1). He further requested an insertion at end of the first
sentence, lines 1 & 2, page 343, to read, `P. Lem stated that four utilities of 13 (refer to FY
94/95 Write -off Comparison With Other Utilities (Exhibit 3)) had larger decreases -- greater- -
changes than Anaheim's 17 percent (16.9 %). Glendale had a 61.5% decrease from the previous
year, LADWP 30.1 %, Redding 29.7 %, and Pasadena 18.9 %."
D. Stanton reminded P. Lem that the Board doesn't add to the minutes and requested an
investigation be conducted on P. Lem's stated paragraph.
E. Aghjayan stated an objection to the rewriting of the minutes.
P. Lem requested to insert his statement at the end of the first sentence, lines 1 & 2, page 343.
E. Aghjayan stated his objection stands.
. Wiseman moved approval of the minutes as submitted. T. Kirker seconded. MOTION
CARRIED 4 -1. P. LEM OPPOSED. J. WHITE ABSTAINED. ONE ABSENT.
M. Bell introduced Jim Harmon, Anaheim's new Customer Services Manager, and briefly
discussed his background.
4. STATE AND FEDERAL LEGISLATIVE & REGULATORY UPDATE
(INFORMATION ONLY, NO ACTION REQUIRED)
E. Aghjayan stated there are three legislative reports: one from K. Thalman on Federal
Legislative, one from L. Moses on State Legislative and one to include agenda item #5 from the
Senate Conference Committee on Electric Restructuring.
K. Thalman addressed a handout on the Safe Drinking Water Act (SDWA), Tax Exempt
Financing, Telecommunications, Public Utility Holding Company Act (PUHCA), Public Utilities
Regulatory Policies Act (PURPA) Repeal, Electric Utility Restructuring and the Power
Marketing Administration (PMA) Sale.
D. Stanton asked if the Pringle Bill passes, and if Board Members must be elected, will this affect
the election of the Public Utilities Board Members.
348
K. Thalman replied that it would not affect the election of the Public Utilities Board Members, as
it only deals with the proposed Orange County Water District (OCWD) Wholesale Board.
T. Kirker asked for a definition of the Tax Exempt Financing item on the handout.
K. Thalman explained the potential elimination of Tax Exempt Financing would have a devasting
impact on Anaheim. M. Bell added that Anaheim would not be devasted if this change should
happen. It would make a difference in the ability to finance and also change the rate of
borrowing money. E. Aghjayan commented that future projects would have taxable financing.
The Administration, Congress and the I.R.S. continue to study this issue and future challenges to
it are expected.
D. Stanton asked if Pringle's desire to elect members of the board by the general population in
the general election is so that anyone could run and possibly be elected to the board, and the
advantage to the appointment process is that someone would normally have prior knowledge of
the water industry, for example.
K. Thalman responded yes that was correct.
E. Aghjayan commented that a big part of the election issue is that OCWD's appointed member,
Council Member Zemel, performs a leadership role for Anaheim's benefit and he was appointed
by Anaheim's City Council. The danger in an elected board is that the board may not have an
allegiance to the City of Anaheim. The concern would be that the board may consider the
betterment of the district and not Anaheim's and that Anaheim would not have a voice. The
other concerns to the Pringle Bill are for the prevention of the consolidation of many water
districts into larger districts and that should OCWD become considerably larger, Irvine Ranch
Water District (IRWD) may tap into the aquifers and reservoirs and ship it south where there is a
need for additional water. The aquifer is limited to the amount of water to be taken from it.
Anaheim receives 75% of its water from OCWD and if this percentage amount is lowered,
Anaheim would feel significant economic and water quality impacts and would be forced to buy
more MWD water.
H. Pepper commented that for every 5% of water purchased from the MWD cost to Anaheim is
$1 million, which equates to 3% of Anaheim's water retail rates.
E. Aghjayan commented that the controversial issue is that ambiguous language is being used
and Anaheim is trying to get clarifying language. Staff has not yet seen the actual language, and
until the bill its amended, Anaheim runs the risk of being annexed.
D. Stanton asked if the boundaries of the water districts, as they now exist, are based on political
consideration (city limits) or natural resources (geography, water basins).
E. Aghjayan responded that the boundaries are based on the water basin.
H. Pepper commented that for the OCWD, which manages the water basin, the boundaries are
based on the Santa Ana water basin and the water shed. For the other water districts, the
349
boundaries are based on political consideration. IRWD straddles OCWD, serving many cities.
D. Stanton asked if it was more sensible to unify water districts to a natural basin in order to
limit the stragglers.
H. Pepper responded that it is more sensible and further explained that Pringle is doing this but
IRWD is requesting the right to import water and also requesting less expensive groundwater.
D. Stanton asked if IRWD has its own private water sources.
H. Pepper responded yes that IRWD has a few wells.
J. White asked how the rebuilding of the Lenain Filtration Plant will affect the San Diego County
Water Authority (SDCWA).
H. Pepper answered that staff has anticipated changes in the SDCWA and changes in the mix of
water within a state between the State Water Project and the Colorado River. The Lenain
Filtration Plant is the second public plant in Orange County that has ozone.
L. Moses announced the success of the bill by Assembly member Katz to limit the general fund
transfer. This bill may come back next year, but staff is watching it closely. The Pringle Bill
should be seen. as a trend in cutting the cost in limiting the number of governmental agencies.
Sacramento believes that if California cut the number of special districts, the cost of government
can also be cut. This would not impact Anaheim. Anaheim will be affected by a bill requiring
voter approval of all taxes or increased taxes. In response, the City Council has placed a
measure on the November ballot seeking voter approval of the most recent increase in the
Transit Occupancy Tax. The Costa Bill will provide funds for the Bay Delta Project. The
Beverly Bill (privatization of water utility) is a trend that is expected to come back in the future,
but it does not impact Anaheim. By the end of 1996, no one will be left in the Assembly with
more than four years experience, and this presents a challenge to educate new members. The
Constitutional Revision Commission, on the State level, proposed to relax term limits.
E. Aghjayan added that the Federal Government is inactive in restructuring, and the State
legislation has many bills that impact Anaheim. The State's major focus is to make sure that the
restructuring process happens and that the State receives the credit for the take over. Many
special interest bills are not likely to pass. Anaheim would like to have legislation dealing with
verifying the municipal utilities' right to collect CTCs, with no expiration date and also to ensure
that Anaheim will not receive bypass ability, e.g. SCE's refusal to underground, at their expense
as part of the undergrounding program, 60 miles of 12 kV and 69 kV lines in Anaheim. The
concern is that others could potentially serve customers and bypass distribution charges, CTCs
and underground charges. The City Ordinance and PUC Policy will not allow this to happen.
L. Topaz presented a handout on the California Senate /Assembly Conference Committee on
Electric Restructuring, which was held 7/26/96. Municipals want legislation to ensure that the
current customers of Anaheim remaining in the City cannot bypass Anaheim's distribution system
in order to avoid paying for investments made to meet Anaheim's obligation to serve them.
They also want reciprocity - customers will remain in Anaheim and no other utility may come in
350
and serve the City's customers. It seems favorable to have legislative ratification in order to
avoid lawsuits. A plan is in place to gather better information to the Legislature.
T. Kirker commented that due to a section of the 69 kV line which runs through the Stadium
area and also since Sportstown area was taken over by Disneyland, this would greatly impact
Anaheim.
P. Lem commented on the hearing and felt the Committee needed to keep the three utilities (San
Diego Gas & Electric (SDG &E), SCE and Pacific Gas & Electric (PG &E)) as entities in
California. He felt the Senator was getting information from municipal utilities and weighing it
against the effect on the investor owned utilities (IOUs).
T. Kirker said that during the hearing Senator Peace's only concern was to keep the three major
utilities solvent.
E. Aghjayan commented that the hearing consisted of political posturing to ensure a strong
program. He encouraged anyone who can play a role in this is welcomed and needed. K.
Thalman is working on meetings with the legislature statewide for Anaheim.
D. Stanton offered his support to Anaheim but expressed concerned as to the number of .
members attending the same meeting.
L. Moses said that Board members are permitted to attend publicly noticed meetings.
4. IMPERIAL IRRIGATION DISTRICT WATER TRANSFER PROJECT AND
CALIFORNIA WATER RIGHTS (INFORMATION ONLY, NO ACTION REQUIRED)
H. Pepper gave a presentation on San Diego County Water Authority's (SDCWA) Imperial
Irrigation District water transfer proposal. The presentation covered background of SDCWA
and MWD's association and SDCWA's proposal to acquire water from other sources, as well.
The impact on Anaheim is very minimal since Anaheim uses very little MWD water.
W. Wiseman asked if this was a repeat of the Owens Valley. H. Pepper answered yes, identical.
W. Wiseman asked where Los Angeles County receives its water. H. Pepper answered mostly
Owens Valley and some from MWD. W. Wiseman asked if Los Angeles is losing some of the
water it receives from Owens Valley. H. Pepper answered yes, and Los Angeles is using more
MWD water then before.
5. CONFERENCE COMMITTEE ON ELECTRIC RESTRUCTURING (INFORMATION
ONLY NO ACTION REQUIRED)
This item was covered by L. Topaz under agenda item #3, State and Federal Legislative &
Regulatory Update.
6. TELECOMMUNICATIONS UPDATE (INFORMATION ONLY NO ACTION
REQUIRED)
351
E Aghjayan stated that staff is finalizing negotiations with SpectraNet International (SNI). All
proposed deal points have been negotiated and the Memorandum of Understanding will be going
before Telecommunications Policy Advisory Committee (TPAC) on August 15 and then to City
Council. A Definitive Agreement should be following in approximately three months. It will be
privately financed with the City sharing in a percentage of gross and net revenues. This is a very
positive agreement for the City with very little risk. All Board members are welcome to attend
the TPAC meeting.
P. Lem asked about Pacific Bell's decision to drop their fiber optic efforts. E. Aghjayan said the
telecommunications superhighway should be public policy and Pacific Bell's decision to not build
is reflective of can what happen with private entities that make public policy decisions. It is
fortunate for Anaheim businesses and residences that they will have access to the information
superhighway with the City's system.
7. AGENDA ITEMS FOR NEXT MEETING (INFORMATION ONLY, NO ACTION
REQUIRED)
Staff plans to bring to the Board a presentation on the Electric Industry Restructuring Update,
and the Water System Replacement Program Presentation and Report.
8. ITEMS BY SECRETARY (INFORMATION ONLY, NO ACTION REQUIRED)
Staff has invited the Board members to tour the CTG Plant if they are interested in taking a tour.
Staff has revised the Board's Seminars and Training budget to reflect the increase in the budget
per the Board's request.
9. ITEMS BY BOARD MEMBERS (INFORMATION ONLY, NO ACTION REQUIRED)
P. Lem read the attached comment entitled `Regular Meetings of the Public Utilities Board:
Comments Prepared by Paul A. Lem, Member PUB" relating to the Board meeting of June 6,
1996.
J. White requested a presentation on the Resource Efficiency Activities Quarterly Update. E.
Aghjayan said staff can give this presentation at the next Board meeting and update the statistics
through August 31, 1996.
J. White asked when the unbundling of the underground charge will start appearing on utility
bills. M. Bell stated that this will occur once the new Customer Information System is up, and
currently staff is parallel testing the system and about two to three months away from the go -live
date. 'It has been much delayed due to problems with the vendor but staff is taking the
precautions to avoid any billing problems when the system goes on line.
P. Lem mentioned reading that the CIS system was to go live last fall. M. Bell said there has
been problems with the software vendor, HTE. Staff has been diligently working through these
and has stopped payments to that firm until the problems are solved. HTE is making every effort
to correct the problems. E. Aghjayan added that it is a high quality project but a very complex
system and the vendor has been unable to meet deadlines on time.
352
T. Kirker distributed a summary paper he prepared on three recent electric industry restructuring
meetings that he attended (copy attached). T. Kirker also mentioned in reference to P. Lem's
statement read before the Board, that as a Board member, he has been frustrated at times with P.
Lem's repeated questions that he has previously received answers on. Also, some of P. Lem's
budget questions, he feels, are repetitious, some have been answered by staff and some do not
concern the Board.
D. Stanton stated that he will not be at the September 5, 1996 Board Meeting. W. Wiseman will
chair this meeting.
E. Aghjayan stated that during the budget review session, P. Lem did have the opportunity to ask
his questions of staff and he chose to ask three questions, and P. Lem was not restricted to a
number of questions he could ask of staff. When P. Lem asked his three questions, staff did
provide the response to those questions.
10. ADJOURNMENT (NEXT REGULAR MEETING: SEPTEMBER 5, 1996)
J. White moved adjournment of the meeting at 5:40 p.m. W. Wiseman seconded the motion.
MOTION CARRIED 6 - 0. 1 ABSENT.
Respectfully Submitted,
C 2-44 L. 40° -
r. dward K. A. n
. �cretary, Pu • 1 t ilities Board
353
Regular Meetings of the Public Utilities Board:
Comments Prepared by Paul A. Lem, Member PUB
Mr. Chairperson:
I want to comment on the regular meeting of the Public Utilities Board
held on Thursday, June 6, 1996, at 3:30 p.m. in the 11th Floor Conference
Room, City Hall West, 201 South Anaheim Boulevard, Anaheim, California,
which meeting was called as an official meeting as specified in Chapter 9 of
the Government Code of the State of California and was conducted in
accordance with the Ralph M. Brown Act, which prohibit the City Council
and its commissions (or boards) from conducting business or taking action
except at a duly notified meeting at which the public and news media have a
right to be present. I am making my comments succinctly and carefully
because I want them to be entered accurately into the minutes of the
meeting, which is the official record of the activities of the City of Anaheim
Public Utilities Board.
Mr. Stanton, as chairperson, you preside over and conduct all Board
meetings, which, on June 6th, was to consider the proposed Utilities
Department FY 1996/97 budget. Any Board member wishing to speak must
first obtain the floor by being recognized by the chair. The chair must
recognize any Board member who seeks the floor. When you recognized me
that day, I brought up three of thirty -six questions that I had on the
projected and proposed budgets. I told you (the chair), other Board Members,
and persons in the conference room, that I had received courteous, gracious
answers from the Department's financial supervisor. Three of the responses -
- answers -- were not clear, however. I reminded you that all questions (all
concerns) about the budgets were according to the powers and duties of the
Board (Municipal Code 1.04.730, Section .050) and the Charter of the City of
Anaheim (Article XII and subsequent sections).
Mr. Stanton, you allegedly (apparently) took umbrage, dislike, or
offense; you became incensed; and you were infuriated at my remarks on the
Utilities budgets and the questions I asked about three line items. Your
internal turmoil was evident in the rising pitch of your voice; your wrath was
envisaged in your reddening countenance. But the hammering of your oaken
gavel cut me off (arrogantly, arbitrarily, and capriciously) from fully
expressing my viewpoints on the budget!
Mr. Stanton, the following are guidelines from the City of Anaheim
Boards and Commission Handbook: "Always respect the other individual's
Comments on Board Meetings, by Paul A. Lem, Member PUB (Page 2 of 2)
v 1ewpoint even though it may be the opposite of your own: Allow the other
individual to articulate his or her view and then attempt to make an
objective evaluation of those views; Evaluate fellow commission (board)
members' viewpoints based upon what is the best for the total community;
Commission (board) members must be open and honest at all times; and
Each member has a responsibility made welcome, and (board)
and become oriented and
members and to see that they
-mine d."
Mr. Stanton, the conduct of Board meetings is in your hands, as it
s hould be in accordance with the City Charter (adopted June 2, 1964), the
Municipal Code 1.04.700 (adopted July 6, 1976), and the Public Utilities
Board Rules of Practice and Procedure (adopted February 1, 1996).
Mr. Stanton, however, this meeting, above, is not the only occurrence ,
of your presiding (chairmanship) conduct or behavior. At the regular
meeting of the PUB on May oye identical a PUB member the
same) vituperative, abusive, behavior to me
officially appointed July 18, 1995, by the City Council of Anaheim. I believe
your conduct at both meetings constitutes willful misconduct. Your
misconduct was intentional, deliberate, heavy - handed, and malicious. It was
an effort or attempt to dep r to her
the City Council on amatte right,
power, and duty to advise of
o
importance (the Budget). Furthermore, your contumely -- your arrogance
and rudeness that showed Yin indicate
negligence on your part. failed to give proper attention to a chair's
responsibilities. You failed to ensure the care that a prudent chairperson
should exercise in the conduct of a meeting.
Mr. Stanton, I hope and request that you conduct future Board and in as prescribed manner that a
meetings in a evenhanded, a � o dec
person of your twenty years ades) experience ought to be capable of.
Respectfully yours,
Paul A. Lem, Member
City of Anaheim Public Utilities Board
(My term expires June 30, 1999)
cc: For minutes of the Board,
For Orange County news media,
For local or national TV media.
VIEWS FROM THE BOARD
THIS REPORT IS BASED UPON MEETINGS WHICH I HAVE
ATTENDED ON "ELECTRICITY RESTRUCTURING ".
THE CONCEPT OF ELECTRICITY RESTRUCTURING IS BASED UPON THE
GOAL OF REDUCING ELECTRICITY PRICES IN CALIFORNIA WHICH ARE
HIGHER THAN IN THE REST OF THE NATION.
ELECTRICITY RESTRUCTURING WOULD ONLY IMPACT THE RELATIONSHIP
BETWEEN THE GENERATOR AND THE BUYER OF ELECTRICITY: THE
EXISTING TRANSMISSION AND DISTRIBUTION SYSTEM WOULD REMAIN
THE SAME.
THE TWO KEY MODELS UNDER CONSIDERATION IS THE "POOLCO" AND
"DIRECT ACCESS ".
POOLCO:
UNDER POOLCO, ALL GENERATORS OR SUPPLIERS OF ELECTRICITY
WOULD SELL THEIR POWER TO A SPOT POOL (OR MARKET), IN WHICH
THE BUY AND SELL PRICES ARE ADJUSTED HOURLY.
DIRECT ACCESS:
UNDER DIRECT ACCESS, ALL USERS AND SELLERS WOULD NEGOTIATE
BILATERAL AGREEMENTS FOR THE PURCHASE AND SUPPLY OF
ELECTRICITY.
ANOTHER OPTION ENVISIONS THE INDIVIDUAL OR ORGANIZATION,
SUCH AS CITIES, ACTING AS "AGGREGATORS" OR BROKERS WHO WOULD
BUY ELECTRICITY ON BEHALF OF A GROUP OF USERS. THE CITY OF
ANAHEIM COULD BE AN AGGREGATOR ON BEHALF OF ALL OR PART OF
ITS CITIZENS.
MEETINGS:
JUNE 13, 1996:
A MEETING WAS HELD AT THE "DISNEYLAND HOTEL ".
THE TOPIC CHOSEN WAS CALLED, "RESTRUCTURING OF THE ELECTRIC
SERVICES AND INDUSTRY AND ITS IMPACTS ON THE WATER RESOURCES
AND WASTEWATER INDUSTRY ".
PRIVATE FIRMS:
MANY PRIVATE FIRMS WERE IN ATTENDANCE TO REMIND UTILITIES:
1. THEY PROVIDE SERVICES IN ALL ASPECTS OF THE WATER, WASTEWATER,
AND WATER UTILITY OPERATIONS
2. THEY PROVIDE SERVICES THROUGHOUT THE ELECTRIC INDUSTRY
TO HUNDREDS OF CLIENTS
3. THEY ARE CONSULTANTS TO GOVERNMENT IN THE ELECTRIC
UTILITY RESTRUCTURING INTERNATIONALLY
4. OUR KNOWLEDGE OF YOUR BUSINESS AND OUR ACTIVE ROLE IN
ELECTRIC RESTRUCTURING ENABLES US TO HELP PREPARE YOU FOR
THE FUTURE
5. THEY CAN SHARE LESSONS LEARNED BY OTHER CLIENTS WHO HAVE
EMBARKED ON A PROACTIVE COURSE OF ACTION
METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA CONCERNS
WERE EXPRESSED AS FOLLOWS:
1. RESTRUCTURING IS INEVITABLE.
2. INVESTOR OWNED UTILITIES (IOUs) WHO ARE REGULATED BY THE
CPUC, ARE REQUIRED TO DEVELOPE COMPREHENSIVE PLANS TO
PROVIDE FOR CUSTOMER CHOICE AND COMPETITION IN THE
CALIFORNIA ELECTRIC POWER INDUSTRY.
3. METROPOLITAN WATER DISTRICT IS CONCERNED OF POTENTIAL
INCREASES IN THE COST OF POWER PRESENTLY SUPPLIED UNDER
EXISTING WHOLESALE CONTRACTS, AND DIRECT OR INDIRECT
ASSSIGNMENT OF "STRANDED" GENERATION TO METROPOLITAN
4. POTENTIAL INCREASES IN THE COST OF TRANSMISSION SERVICE
REQUIRED TO ASSURE A RELIABLE, LOW COST POWER SUPPLY TO
METROPOLIAN'S COLORADO RIVER AQUEDUCT PUMPING LOADS
5. POTENTIAL IMPACTS ON THE COST OF POWER AND TRANSMISSION
SERVICE REQUIRED BY DWR TO MEET THE PUMPING ENERGY
REQUIREMENTS OF THE STATE WATER PROJECT
6. POTENTIAL LOSS OF REVENUE IF CONTRACTS FOR THE SALE OF
METROPOLITAN'S SMALL HYDROELECTRIC FACILITIES ON ITS
DISTRIBUTION SYSTEM ARE TERMINATED
7. POSSIBLE STATE LEGISLATION TO REGULATE METROPOLITAN
OTHERWISE LIMITS METROPOLITAN'S OPTIONS
8. METROPOLITAN WISHES TO PROTECT ITS ENTITLEMENT TO THE
HOOVER AND PARKER POWERPLANT
I FOUND THIS MEETING TO BE BENEFICIAL BECAUSE IT ENABLED ME
TO GET THE OPINION OF THE VENDORS, HUNGRY FOR ANYONE'S
BUSINESS AND THE WATER DISTRICTS, WHO IS TAKING A VERY
GUARDED APPROACH.
JULY 18, 1996:
I ATTENDED A MEETING HELD AT THE "HYATT REGENCY HOTEL" IN IRVINE.
THIS WAS FOR THE CONCERNED SHAREHOLDERS OF CALIFORNIA.
400 SHAREHOLDERS WERE IN ATTENDANCE TO PROTECT THEIR STOCK
IN SOUTHERN CALIFORNIA EDISON. ASSEMBLYMAN MICKEY CONROY,
CHAIR OF THE ASSEMBLY UTILITIES AND COMMERCE COMMITTEE,
ALONG WITH CHARLIE McDANIEL, RETIRED SOUTHERN CALIFORNIA
EDISON EMPLOYEE WHO IS SPEARHEADING THIS GROUP.
BOB FOSTER, VICE PRESIDENT FROM SOUTHERN CALIFORNIA EDISON
TOOK OVER THE MEETING AND DISCUSSED WHAT AND HOW AND WHERE
SOUTHERN CALIFORNIA EDISON WAS HEADED.
COMMENTS FROM BOB FOSTER, V.P. OF GOVERNMENT AFFAIRS, SCE.
1. TO HONOR FINANCIAL COMMITMENTS MADE TO ITS SHAREHOLDERS.
2. TO MAKE SURE ALL ELECTRICTY CONSUMERS (SMALL AND LARGE
BUSINESSES AND RESIDENTIAL CUSTOMERS) RECEIVED THE LOWER
PRICE BENEFITS OF THE NEW COMPETITIVE MARKET
3. EDISON,S PROPOSAL FOR WHOLESALE POWER POOL -OR POWER
EXCHANGE WAS DESIGNED TO ACCOMPLISH BOTH OF THESE
OBJECTIVES. ALL POWER PRODUCERS WOULD BID TO OFFER
POWER, AND ONLY THE LOWEST COST ELECTRICITY WOULD BE
SOLD. IN ADDITION, WHENEVER POWER WAS PURCHASED FROM THE
EXCHANGE, ALL ELECTRICITY CONSUMERS WOULD PAY AN ADDITIONAL
COST FOR THE USE OF TRANSMISSION LINES AND TO REIMBURSE
UTILITY COMPANIES FOR PAST INVESTMENTS THEY WERE
REQUIRED TO MAKE TO CREATE AND MAINTAIN THE STATE'S
ELECTRIC SYSTEM AND RELIABLE SERVICE.
4. EDISON HAS CONCERNS WITH "RETAIL WHEELING" OR "DIRECT
ACCESS ".
THE FIRST CONCERN IS THAT BIG BUSINESS WOULD HAVE THE
ABILITY TO NEGOTIATE WITH POWER PRODUCERS FOR THE LEAST
EXPENSIVE POWER, LEAVING ONLY MORE EXPENSIVE POWER FOR
SMALL BUSINESS AND RESIDENTIAL CUSTOMERS.
THE SECOND CONCERN BY EDISON WAS THAT SOME OF THE DIRECT
ACCESS WOULD HAVE ALLOWED BIG BUSINESS TO BUY DIRECTLY
FROM POWER PRODUCERS WITHOUT FAIRLY REIMBURSING
SHAREHOLDERS AND COMPANIES LIKE EDISON. BECAUSE OF THIS
RESIDENTIAL AND SMALL BUSINESS WOULD PAY HIGHER COSTS.
5. THE MOU PROTECTS SHAREHOLDERS INVESTMENTS BY REQUIRING
THAT ALL ELECTRICITY CONSUMERS SHARE IN THE COSTS OF
TRANSITION COSTS REIMBURSE UTILITIES FOR PAST INVESTMENTS
REQUIRED BY THE REGULATORS.
6. RESTRUCTURING HAS THREE BASIC FUNCTIONS:
A. GENERATION
B. TRANSMISSION
C. DISTRIBUTION
7. DEREGULATION ONLY DEALS WITH GENERATION
8. CUSTOMER HAS CHOICE WHERE THEY BUY POWER FROM
9. REGULATION HAS WEAKENED UTILITIES
10. POWER PLANTS WERE BUILT TO SUPPLY CUSTOMERS
11. EDISON WILL SELL 50% OF ITS GENERATION PLANTS
12. SCE WILL KEEP HYDRO AND NUCLEAR PLANTS
13. SCE WILL REDUCE RATES BY 25% BY YEAR 2000
14. SCE RATES HIGHER NOW BECAUSE OF LOOSES IN WIND MACHINES
15. SCE IS NOW IN THE WORLD MARKET
ASSEMBLYMAN MICKEY CONROY, CHAIR OF THE ASSEMBLY UTILITIES
AND COMMERCE COMMITTEE TOLD THE SCE SHAREHOLDERS THAT THE
STATE LEGISLATURE UNDERSTANDS THE CONCERNS OF THE
SHAREHOLDERS AND THE COMMITTEE ALSO HAS THESE SAME CONCERNS.
RESTRUCTURING IS BEING PUSHED AHEAD, BUT I'M NOT SURE THAT IT
SHOULD BE PUSHED THAT FAST.
JULY 26, 1996
MEETING WAS HELD IN THE ANAHEIM CITY COUNCIL CHAMBERS.
MEETING WAS THE "ELECTRIC INDUSTRY RESTRUCTURING CONFERENCE
COMMITTEE HEARING ". MEETING WAS ATTENDED BY SENATORS AND
ASSEMBLYMAN, MEMBERS OF THE CONFERENCE COMMITTEE.
MEMBERS OF THE LEAGUE OF CALIFORNIA CITIES SPOKE TO THE
CALIFORNIA LEGISLATURE EXPRESSING THEIR COLLECTIVE VIEWS ON
RESTRUCTURING
1. LEAGUE OF CALIFORNIA CITIES SUPPORT THE CONCEPT OF
RESTRUCTING
2. ALL RATE PAYERS DIRECTLY SHARING IN BENEFITS EQUITABLY
3. ANY RESTRUCTURING SHOULD MAINTAIN THE CONCEPT OF
MUNICIPAL UTILITIES
4. CITIES SHOULD HAVE THE AUTHORITY TO ISSUE FRANCHISES
5. CITIES SHOULD HAVE THE OPPORTUNITY TO BECOME AGGREGATORS
6. AS AN AGGREGATOR, THE CITY WOULD ABLE TO COMBINE THE
ELECTRICAL LOADS OF VARIOUS USERS AND NEGOTIATE THE
PURCHASE OF POWER FOR THOSE USERS.
7. STRANDED INVESTMENTS SHOULD BE RESOLVED IN A WAY THAT
KEEPS INVESTORS, RATE PAYERS FINANCIALLY WHOLE
8. CALIF SHOULD NOT ABANDON ITS ENERGY PROGRAMS THAT PROVIDE
SOCIAL AND ENVIRONMENTAL BENEFITS
SENATOR STEVE PEACE, CHAIRMAN OF THE CALIFORNIA LEGISLATURE
WAS VERY ADAMANT ABOUT HIS POSITION AND THE REST OF THE
COMMITTEE BY CONTINUING TO PLAY AN ADVERSARY ROLE.
THE LAST COMMENT MADE BY SENATOR STEVE PRICE WAS:
WE WILL DO EVERYTHING IN OUR POWER TO SAVE THE THREE LARGE
UTILITIES IN OUR STATE..
SUBMITTED BY: TOM KIRKER
JULY 25, 1996