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Public Utilities 2013/04/24CITY OF ANAHEIM PUBLIC UTILITIES BOARD MINUTES APRIL 24, 2013 The agenda having been posted on Thursday, April 18, 2013, the Regular Meeting of the Public Utilities Board (Board) was called to order by Chairperson David Morgan at 5:01 p.m. on Wednesday, April 24, 2013, in the I P Floor Large Conference Room, Anaheim West Tower, 201 S. Anaheim Blvd., Anaheim, California. Board Members Present: D. Morgan, J. Machiavema, P. Carroll, B. Hernandez, S.E. Faessel, D. Singer Board Members Absent: C. Peltzer Staff Present: M. Edwards, D. Calkins, D. Lee, E. Zacherl, S. Sciortino, J. Lehman, A. Kott, L. Quiambao, P. Oviedo, S. Welch, G. Turner, J. Coe, B. Beelner, J. Ross, B. Beelner, S. Welch, G. Turner, A. Nguyen, B. Moorhead Guest(s) Present: D. Wain, Resident & Chairperson of the East District Neighborhood Council AGENDA ITEM 1. PUBLIC COMMENTS. D. Wain commented that the Orange County Water District (OCWD) recently approved a Memorandum of Understanding with Anaheim to extend Anaheim Coves Park north of Lincoln Avenue to Frontera Street. He thanked M. Edwards and D. Calkins for helping to move this forward. 2. APPROVAL OF THE MINUTES OF THE REGULAR PUBLIC UTILITIES BOARD MEETING OF MARCH 27, 2013. 3. PRESENTATION ON FISCAL YEAR 2013/2014 UTILITIES BUDGET. M. Edwards gave a presentation of the Department's proposed budget for FY 201312014. This presentation was for information only. At next month's meeting, staff will seek the Board's support for the proposed budget. The Board asked a variety of questions about the proposed budget. In addition, the Board was invited to contact staff with any further questions prior to the next meeting. ACTION TAKEN P. Carroll moved approval of the March 27, 2013, Public Utilities Board Minutes. J. Machiavema seconded the motion. MOTION CARRIED: 6-0. ABSTAINED: 0. ABSENT: 1 (C. Peltzer). 2013- 19 AGENDA ITEM 4. APPROVE PROPOSED PUBLIC HEARING DATE AND TIME TO CONSIDER PROPOSED MODIFICATIONS TO THE WATER RATES, RULES AND REGULATIONS. ** The written publicly available information detailing this item was summarized by staff. The Board approved the public hearing date and time of Wednesday, May 22, at 5:00 p.m. 5. APPROVE PROPOSED PUBLIC HEARING DATE AND TIME TO CONSIDER PROPOSED MODIFICATIONS TO THE ELECTRIC RATES, RULES AND REGULATIONS. * The written publicly available information detailing this item was summarized by staff. The Board approved the public hearing date and time of Wednesday, May 22, at 5:00 p.m. 6. UPDATE ON WATER SYSTEM ISSUES. D. Calkins, AGM of Water Services, invited the Board's attention to the Water Supply Conditions Update in the agenda package. The weather remains very dry, but Anaheim's water supplies are still adequate as a result of water in storage. D. Calkins provided an update on construction of the Water Recycling Demonstration Plant and associated Water Sustainability Campus. An overview was provided of the objectives of the project and its various components. A dedication ceremony for this new facility will be held Tuesday, May 7, 2013 at 11:00 a.m.; all Board members have received invitations and are encouraged to attend. D. Calkins referred to the informational memorandum that identifies the Department's events and activities for Water Awareness Month in May. The goals of Water Awareness Month are to promote water conservation, educate our customers on water - saving measures, and help them lower their utility bills by reducing consumption. The planned events include the annual Solar Cup Boat Races the weekend of May 17' through 19 at Lake Skinner in Temecula, where teams from Anaheim, Savanna, and Canyon High Schools will compete. Also, the eighteen student winners of the Annual Water Awareness Poster Contest will be recognized at Angel Stadium on May 15 prior to the Angels game. D. Calkins thanked S.E. Faessel for working with staff to increase participation by Anaheim's public schools. D. Calkins provided information on Orange County's annual Water Summit, which will be held on Friday, May 17' at Disney's Grand Californian Hotel. As in past years, the Department has reserved a table for this event. ACTION TAKEN P. Carroll moved approval of the proposed public hearing date and time to consider proposed modifications to the Water Rates, Rules and Regulations. J. Machiavema seconded the motion. MOTION CARRIED: 6 -0. ABSTAINED: 0. ABSENT: 1 (C. Peltzer). D. Morgan moved approval of the proposed public hearing date and time to consider proposed modification to the Electric Rates, Rules and Regulations. J. Machiaverna seconded the motion. MOTION CARRIED: 6-0. ABSTAINED: 0. ABSENT: 1 (C. Peltzer). 2013-20 /[I'1 310 17_�(11�3T►'1 7. UPDATE ON ELECTRIC SYSTEM ISSUES. D. Lee, AGM of Electric Services, provided updates on two quarterly reports. The first is a report on capital projects for both electric and water. The maps included in the report shows where activities are taking place in the City of Anaheim. The second is a report on outsourcing activities, including contractors, consultants, and material purchases for the past quarter. All procurement activities are through the City's Purchasing Division's on -line system, in which bid details are posted. The second update was on the Department's Regulatory Relief efforts. The report includes highlights from the past six months on ongoing initiatives that exhibit kindness and promote freedom for residential and business customers related to their electric and water services. Added to the report is an appendix that summarizes the completed and proposed rule changes for reducing regulatory burden and simplifying processes. E. Zacherl, AGM of Finance and Administrative Services, invited the Board's attention to the Utilities Dashboard. He shared that the year - to -date revenues for both electric and water were over budget through the month of March, which is attributable to the warmer than normal weather last summer. Year -to -Date electric revenues of $325.3 million are $12.7 million or 4.1 % over budget. Electric expenses for that period of $293.6 million are $3.4 million over budget or 1.2 %. Power costs exceeded budget by $10.5 million but were partially offset by lower expenses in labor, operating and debt. Electric revenues for the month of March were $24.8 million which was $3.1 million or 11.2% under budget due to sluggish retail sales. E. Zacherl reported to the Board that the year -to -date water revenues through March of $44.7 million are $2.4 million or 5.6% over budget. Year -to -date water expenses through March of $38.7 million are $1.1 million or 2.8% below budget as a result of reduced operating expenses. The favorable variance was a result of reduced labor, operating, and maintenance. E. Zacherl shared with the Board that revenues for the remainder of the fiscal year are expected to be soft, which could eliminate the favorable variance. As a result, cost containment will continue to be monitored closely throughout the balance of the fiscal year. S. Sciortino, AGM of Joint Services, reminded the Board about the "Greenest City of the Year" award presented to the City of Anaheim by the US Green Building Coalition (USGBC) of Orange County late last year. The USGBC representing both Los Angeles and Orange County is to present an additional award to Anaheim Public Utilities in recognition of it receiving the Silver LEED certification for the ACTION TAKEN 2013- AGENDA ITEM Canyon Power Plant. The facility received the certification based on a variety of elements including the installation of 125 kW solar panels on the Control Building rooftop, having a portion of the Control Building cooled using thermal energy storage, landscaping that included a variety of fruit trees and drought tolerant vegetation, and utilizing recycled water from the Orange County Water District (OCWD) to help lower emission levels during operations. What is noteworthy about the award is the fact that it was the only award given for an entity in Orange County. In addition, S. Sciortino said the City also recently won the "Best of the Best" award for achievement in community development from the Orange County/Inland Empire Chapter of the Urban Land Institute for the City's implementation of policies and programs that support sustainable community development. The Utilities Department accepted the award, which was presented in April, on behalf of all the City Departments that contributed to the recognition. 10. UPDATE ON ENERGY RISK & LEGISLATIVE REGULATORY AFFAIRS ISSUES, J. Lehman, Chief Risk Officer, reported that the Public Utilities Board Legislative Working Group met prior to the Board meeting. She extended thanks to the members, and added that the efforts of this group are important because legislation has the potential to significantly shape the future of Anaheim Public Utilities and the utility industry. J. Lehman then invited the Board's attention to the quarterly internal compliance report in their packets which covered the Department's compliance activities on key regulations for the first quarter of 2013. She pointed out that while there were several minor issues at the Kraemer Power Plant, all were fixed in short order, and none were expected to result in violations. J. Lehman highlighted other compliance activities including steps that have been taken to certify the Department's Underground Storage Tank (UST) program in order to comply with new state laws passed last year. She stated that this effort is expected to go well, and that the Department is likely to continue administering the program for at least one more year, at which time APU will re- evaluate the continuation, or whether the program should be turned back over to the state to administer. The number of UST clean -up sites has significantly dwindled and no new cases have been received in years because of the strict construction standards implemented by the State. The Department expects to have less than 15 remaining cases by next year. In conclusion, J. Lehman reported that compliance is an on -going effort that is taken seriously by the Department. ACTION TAKEN 2013-22 AGENDA ITEM 11. AGENDA ITEM(S) FOR THE NEXT PUBLIC UTILITIES BOARD MEETING ON MAY 22, 2013. • Conduct Public Hearings for modifications to the Water and Electric Rates, Rules and Regulations * • Approval of the Fiscal Year 2013/14 Budget Recommendation • Discussion regarding the use of Line of Credit proceeds to Retire the Electric Revenue Bonds, Series 2002B • Set a Public Hearing Date for the Department's Public Health Goal Report • Construction Status Update on the Linda Vista Reservoir & Pump Station Project 12. ITEM(S) BY SECRETARY. M. Edwards shared that an email was sent out to the Board with a draft City Council staff report regarding the use of the proceeds from a Line of Credit to be used as collateral for Cap and Trade Auctions. Unfortunately, due to the short timeframe prior to the auction dates, there was inadequate time to bring this item to the Board prior to taking it to City Council. M. Edwards stated the amount of funds to be utilized for the auctions will not exceed $20 million annually, and that the funds drawn on the Line of Credit will be returned the same year. M. Edwards mentioned the Water Public Hearing Q &A sheet located in the Board's packet was provided to Customer Service staff and will also be available on the website until the Public Hearing next month. B. Beelner shared that the hearing documents will be sent via FedEx to the Board prior to the hearing and will also be available on the website. 13. ITEM(S) BY BOARD MEMBERS. P. Carroll indicated that he will attend the Water Sustainability Campus Dedication. He also congratulated S. Sciortino and staff on the awards that were achieved. He commended staff on the budget presentation and the management of the budget through the years. S. E. Faessel shared that she was impressed by the Regulatory Relief implementation plan, particularly the customer communication and commitment to the community, and continuity of operations. D. Singer shared that she was impressed with the world class items the Department is involved in. B. Hernandez complimented the Water field crew on a great job with correcting a recent water service interruption in his neighborhood. He also inquired about complimentary tickets for the upcoming Taste of Anaheim event. Staff will inquire through the City Manager's office and get back to the Board. ACTION TAKEN 2013-23 AGENDA ITEM Machiaverna complimented staff for their achievements and accomplishments. D. Morgan thanked staff for the good work and said that he is proud to be a part of Anaheim. 14. ADJOURNMENT: (TO THE PUBLIC HEARING /REGULAR MEETING ON MAY 22, 2013, AT 5:00 P.M., IN THE 2ND FLOOR GORDON HOYT CONFERENCE ROOM, ANAHEIM WEST TOWER, 201 S. ANAHEIM BOULEVARD, ANAHEIM, CALIFORNIA). Respectfully submitted, Donald C. Calkins Acting Public Utilities General Manager ACTION TAKEN B. Hernandez moved to adjourn the Regular Meeting at 7:02 p.m. to the Board's Public Hearing/Regular meeting date of May 22, 2013 at 5:00 p.m. S.E. Faessel seconded the motion. MOTION CARRIED: 6 -0. ABSTAINED: 0. ABSENT: 1 (C. Peltzer). * 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.