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Public Utilities 2014/02/26CITY OF ANAHEIM PUBLIC UTILITIES BOARD MINUTES FEBRUARY 26, ,2014 The agenda having been posted on Friday, February 21, 2014, the Regular Meeting of the Public Utilities Board (Board) was called to order by Chairperson John Machiaverna at 5:00 p.m. on Wednesday, February 26, 2014, in the I P Floor Large Conference Room, Anaheim West Tower, 201 S. Anaheim Blvd., Anaheim, California. Board Members Present: J. Machiaverna, B. Hernandez, S.E. Faessel, D.Wain, L. Cahill Board Members Absent: D. Singer, C. Monaco Staff Present: D. Lee, D. Calkins, B. Beelner, J. Lehman, G. Bowen, F. Barvarz, A. Kott, M. Brownrigg, L. Quiambao, P. Oviedo, P. Hayes, C. Guss, D. Shen, C. Thompson, R. Shintaku, M. Brownrigg, M. DeSollar, E. Murdock Guest(s) Present: Chris Davis, Vice President of Bowerman Power; Ryan Baron, County of Orange AGENDA ITEM 1. PUBLIC COMMENTS. J. Machiavema wished S.E. Faessel a Happy Birthday. 2. APPROVAL OF THE MINUTES OF THE REGULAR PUBLIC UTILITIES BOARD MEETING OF JANUARY 29, 2014. * 3, UPDATE ON THE LINDA VISTA RESERVOIR AND PUMP STATION IMPROVEMENT POJECT. D. Calkins, AGM of Water Services, introduced D. Shen, Manager of the Water Capital Projects division, who made a presentation on the Linda Vista Reservoir and Pump Station Improvement Project (Project). Construction of this Project, which is now complete, is part of the Utilities' ongoing program for rehabilitation and replacement of aging infrastructure. The Linda Vista facilities are centrally located, serving both the flatland and hill and canyon areas, and are capable of ACTION TAKEN There being no public comments, Chairman Machiaverna closed the public comments portion of the meeting. B. Hernandez moved approval of the Minutes of the Regular Public Utilities Board Meeting of January 29, 2014. S.E. Faessel seconded the motion. MOTION CARRIED: 5 -0. ABSTAINED: 0. ABSENT: 2 (D. Singer, C. Monaco). 2014-8 AGENDA ITEM supplying about one -third of the City's water demand. The new facilities include a 4- million - gallon concrete storage tank to replace the original 70- year -old reservoir, and a relocated and rehabilitated booster pump station. The second phase of the Project, which will include another storage tank and expansion of the pump station, is scheduled to begin in four to five years. The Board members were invited to a Project Open House, which is scheduled for Wednesday May 28th, from 2:30 to 4:30 p.m. 4. UPDATE ON ORANGE COUNTY TRANSPORTATION AUTHORITY (OCTA) GRADE SEPARATION PROJECTS. In response to a request by Board member B. Hernandez at the January 2014 meeting, F. Barvarz, Transmission & Distribution Manager, provided a status update on the Orange County Transit Authority's (OCTA) grade separation projects. F. Barvarz explained that these projects involve construction of bridges over or underpasses on City streets at railroad intersections along Orangethorpe Avenue to minimize traffic delays and improve safety. He further explained that of the seven such intersection improvements planned, four are in Anaheim at Kraemer, Crowther 1 Miller, Tustin, and Lakeview. The Public Utilities Department (Department) is working with OCTA, other agencies, Southern California Edison, telecommunication companies and other underground utilities to relocate its water and electric facilities so OCTA can proceed with construction. The Board discussed the funding of the projects, and F. Barvarz explained that OCTA is reimbursing the Department for the relocation costs. D. Lee stated that the Department of Public Works assisted in obtaining funds for both electric and water relocations. 5. PRESENTATION ON BUSINESS AND COMMUNITY PROGRAMS ANNUAL REPORT. P. Hayes, Residential Programs Manager, presented the annual report for the Business and Community Programs division, for fiscal year 2012 -13. He shared with the Board that the Division exceeded its energy efficiency legislative objective this year, to achieve energy savings in an amount equal to l % of the Department's retail sales. He highlighted the other goals of the Division, which included the water savings achieved, the large number of residents and businesses served through the programs, as well as the rebates and technical assistance provided. P. Hayes emphasized the amount of greenhouse gas emissions reduced through the programs, the variety and volume of community events held, and the income - qualified programs provided. He mentioned that the Division was also able to add 1 megawatt (MW) to the Department's renewable portfolio. P. Hayes shared an update on all of the programs specifically provided for the schools, including the Division's response to Proposition 39, legislation that allocates funds to make energy efficiency improvements at public school facilities. The California Energy Commission (CEC) has encouraged schools to partner with their local utility, and thus, the Department intends to act as the ACTION TAKEN 2014 - 9 AGENDA ITEM ACTION TAKEN schools' resident expert in energy management to offer expertise as they are selecting the most effective energy efficiency improvements, using the most appropriate technologies, and are eligible to leverage their funds by participating in the Department's incentive programs. He also noted that the Division is on track to meet its goals in the current fiscal year, FY2013 -14. 6. PRESENTATION AND APPROVAL OF THE RENEWABLE B. Hernandez moved PORTFOLIO STANDARDS POLICY. * Approval of the Renewable C. Thompson, Principal Integrated Resource Planner, made a Portfolio Standards Policy. D. Wain seconded the presentation about the Renewable Portfolio Standards (RPS) Policy motion. sharing that each year the Department provides an update to the MOTION CARRIED: 5 -0. previous year's RPS Policy which includes an updated renewable ABSTAINED: 0. resources procurement plan and enforcement program. The Board ABSENT: 2 (D. Singer, C. was provided with a status update on the Department's progress Monaco). toward meeting the State's RPS targets, cost estimates, and activities D. Wain seconded the motion. undertaken in the past year to meet the Department's RPS compliance MOTION CARRIED: 5 -0. obligations. C. Thompson explained that the Department has been ABSTAINED: 0. successful in procuring reasonably priced renewable projects that help ABSENT: 2 (D. Singer, C. to maintain a rate advantage in Orange County. Monaco). Staff answered questions from the Board prior to seeking its recommendation that Council approve and adopt the updated RPS Policy. L. Cahill moved approval of the Renewable Power 7. PRESENTATION AND APPROVAL OF THE RENEWABLE Purchase and Sale POWER PURCHASE AND SALE AGREEMENT BETWEEN Agreement between BOWERMAN POWER LFC, LLC AND THE CITY OF Bowerman Power LFC, LLC ANAHEIM. * and the City of Anaheim. C. Guss, Principal Integrated Resources Planner, shared a presentation D. Wain seconded the motion. about the Renewable Power Purchase and Sale Agreement between MOTION CARRIED: 5 -0. Bowerman Power LFG, LLC and the City of Anaheim for energy ABSTAINED: 0. from landfill gas project located at the Frank R. Bowerman Landfill in ABSENT: 2 (D. Singer, C. Irvine, CA. He explained that the Bowerman Landfill opened in 1990 Monaco). and is scheduled to close in 2053, only accepts non - hazardous, municipal solid waste, and is one of the largest landfills in California and the 9th largest in the United States. C. Guss emphasized that this project will produce approximately 20 megawatts of renewable energy (enough to power about 23,000 homes annually). He explained that the project utilizes methane gas created from decomposition of municipal solid waste, and instead of flaring the gas, uses it as fuel for electric generation. C. Guss discussed that landfill gas is not a fossil fuel and is recognized and counted as a renewable resource. Lastly, he shared that it will provide an estimated 6% reduction of the Department's annual greenhouse gas emissions and will contribute 6% towards our renewable portfolio. Staff answered questions from the Board prior to seeking its recommendation that Council approve the Renewable Power Purchase and Sale Agreement. 2014-10 AGENDA ITEM 8. UPDATE ON WATER SYSTEM ISSUES. D. Calkins, AGM of Water Services, discussed the Water Supply Conditions Update, which was handed out at the meeting. Even though there has been some rain, the drought continues. A few weeks ago, the Department of Water Resources reduced the allocation on the State Water Project (SWP) to zero, which is unprecedented. With some rain and snow forecasted for northern California, this allocation could be increased slightly before the end of the winter, but supplies from the SWP will be very low. As mentioned last month, the Metropolitan Water District (MWD) has adequate supplies to meet demands this year. They estimate a worse -case scenario of having to pull 1.0 million acre -feet (MAF) of water out of storage, which is about 50% of the region's demand for imported water. They currently have 2.4 MAF in storage. Nonetheless, MWD is taking this drought seriously, and their Board recently declared a Water Supply Alert to support the Governor's call for a 20% reduction in water use. MWD also doubled their conservation budget to $40 million. Consistent with these actions, the Department is increasing efforts to encourage customers to voluntarily conserve as much water as possible and to remind them of the various conservation programs and incentives we offer. 9. UPDATE ON ELECTRIC SYSTEM ISSUES. F. Barvarz, Acting AGM of Electric Services, shared that the American Public Power Association (APPA) annually assesses municipalities for their utility -wide commitment to safe and reliable delivery of electricity with demonstration of proficiency in four key disciplines: reliability, safety, work force development and system improvement. Following the assessment, those municipalities that meet the criteria are designed as a Reliable Public Power Provider (RP3), providing consumers with the highest degree of reliable and safe electric service. The RP3 designation was previously given for two years, and beginning in 2014 will be for four years. Anaheim has consistently received the two -year award ever since the RP3 program was originated in 2006 and was notified that it should expect to receive this recognition again in April 2014. Of the nation's more than 2,000 public power utilities, less than 10% achieve the RP3 designation. 10. UPDATE ON FINANCE ISSUES. B. Beelner, AGM of Finance and Administrative Services, invited the Board's attention to the monthly dashboard at their place settings. B. Beelner shared that the revenue for both water and electric continue to trend above budget, primarily due to the warm and dry winter. He also discussed the potential refunding of the Department's 2003A and 2004 electric revenue bonds. This refunding would potentially be completed this summer, upon approval by the Board and the City Council, and could save the Department between $17 and $20 million over the remaining 20 year life of those bonds based on current rates. ACTION TAKEN 2014-11 AGENDA ITEM 11. UPDATE ON JOINT SERVICES ISSUES. G. Bowen, Acting AGM of Joint Services, shared a brief update on the Senate Bill (SB) 1 Solar Rebate program. He outlined this year's application period and discussed the total number of applications received this year versus the previous year. He mentioned that the overall cost of the program was $35 million and that the application process used a total of $4.1 million of the overall program fund. G. Bowen also highlighted a few of the larger projects including Servite High School and Target, sharing that most of the applications are for purchases of rooftop solar versus leases. Lastly, he shared that as a result of not all of the funds being reserved in the application period, the Department will have a second application period in June of 2014 to allocate the remaining funds for the 2014 year. 12. UPDATE ON ENERGY RISK & LEGISLATIVE / REGULATORY AFFAIRS ISSUES. J. Lehman, Chief Risk Officer, invited the Board's attention to the Wholesale Energy Risk Management (ERM) Program's Quarterly Compliance report at their place settings. This program sets criteria under which certain energy related transactions can be made providing the framework for transactions to be made in an efficient manner while ensuring that the Department's interests are protected and risks are minimized. J. Lehman reported that all transactions were in compliance with the ERM program; there were no violations. In regard to legislative issues, J. Lehman reported that over 2000 bills were introduced on February 21 st, with many having potential implications to utility operations. At this point, most of the newly introduced bills are spot bills, meaning there is not much content yet. Staff is reviewing the proposed legislation to determine potential impacts and responses. Additionally, she shared that she and D. Lee went to Sacramento earlier in the month to meet with Anaheim's State Legislators. She provided a handout that was given to the Legislative Offices to express key messages to not rush into more renewable mandates until the impacts are better understood, that legislation should not dictate specific technologies, and to consider the impacts of separate legislation on the entire system and to the customer. J. Lehman also reported that in February, the Department's electric reliability program underwent a federal audit for compliance with mandated electric reliability standards. She explained that these reliability standards were instituted as a means to protect the nation's bulk electric system from occurrences that could bring down the regional transmission system and cause significant civil disturbances and financial impacts. The auditors were very positive about the Department's efforts and had no audit findings as well as no audit recommendations. She credited the results of the audit to the ongoing efforts and dedication of staff in the Risk division, who orchestrated the response to the audit, as well as staff from Electrical Operations, ACTION TAKEN 2014 - I2 AGENDA ITEM ACTION TAKEN Electric System Planning, Integrated Resources, and Substation and Maintenance Test for their day -to -day efforts to ensure the reliability of the electric system. 13. AGENDA ITEM(S) FOR THE NEXT PUBLIC UTILITIES BOARD MEETING ON MARCH 26, 2014. • Power Resource Portfolio Update • Water Conservation Master Plan • Reimbursement Resolution — Electric Utility Fund. • Extending Rule 15C Agreements.* 14. ITEM(S) BY SECRETARY. D. Lee shared with the Board that their Form 700 is due April I" and mentioned that if there were any questions, the City Clerk's office or A. Kott can assist them. D. Lee also shared that P. Emery will be the Interim City Manager, beginning March 4th as M. Edwards' last day is March 3rd. He also said that he looks forward to seeing everyone at the celebration for M. Edwards. 15. ITEM(S) BY BOARD MEMBERS. D. Wain thanked staff for the informative presentations. He shared Staff will follow up with that some homeowners approached him with questions regarding the Orange Unified regarding proposed State Water Bonds, so he referred them to D. Calkins, who potential projects and provided information they were happy to hear. D. Wain also program participation. requested that staff follow up with Orange Unified regarding school bonds for facility improvements. S. E. Faessel concurred with D.Wain and added that all the presentations were interesting and provided important details. L. Cahill said it was a great meeting and mentioned that there are a lot of positive things going on not only in the Department but the City as well. B. Hernandez commended staff on the recent NERC audit and shared Staff' will review types of his appreciation and gratitude for everything staff does and how it is rebates that are offered by done. He also asked if the Department offers rebates for solar other utilities for solar landscape Ighting. landscape fighting. J. Machiavema. said the staff continues to get through obstacles and turn them into positive outcomes, as in the case with the renewable projects. AGENDA ITEM 16. ADJOURNMENT: (TO THE REGULAR MEETING ON MARCH 26, 2014, AT 5:00 P.M., IN THE 11 FLOOR LARGE CONFERENCE ROOM, ANAHEIM WEST TOWER, 201 S. ANAHEIM BOULEVARD, ANAHEIM, CALIFORNIA). ACTION TAKEN L. Cahill moved to adjourn the Regular Meeting at 6:29 p.m. to the Board's next Regular Meeting date of March 26, 2014 at 5:00 p.m. S.E. Faessel seconded the motion. MOTION CARRIED: 5-0. ABSTAINED: 0. ABSENT: 2 (D. Singer, C. Monaco). * 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. 0�