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Public Utilities 2014/09/24CITY OF ANAHEIM PUBLIC UTILITIES BOARD MINUTES September 24, 2014 The agenda having been posted on Thursday, September 18, 2014, the Regular Meeting of the Public Utilities Board (Board) was called to order by Chair J. Machiavema at 5:00 p.m. on Thursday, September 24, 2014, in the I I th Floor Large Conference Room, Anaheim West Tower, 201 S. Anaheim Blvd., Anaheim, California. Board Members Present: Chair J. Machiavema, B. Hernandez, S.E. Faessel, D. Wain, L. Cahill, C. Monaco Board Members Absent: Vice Chair D. Singer Staff Present: D. Lee, B. Beelner, S. Sciortino, D. Calkins, J. Lonneker, J. Lehman, A. Kott, L. Quiambao, P. Oviedo, J. Lehman, D. Shen, M. Seifen, E. Covarrubias, P. Hayes, D. Wilson, F. Barvarz Guest(s) Present: None AGENDA ITEM 1. PUBLIC COMMENTS. None. 2. APPROVAL OF THE MINUTES OF THE REGULAR PUBLIC UTILITIES BOARD MEETING OF AUGUST 27, 2014. * 3. UPDATE ON PUBLIC POWER WEEK. E. Covarrubias, Resource Efficiency Advisor, provided a summary on Public Power Week. The highlight will be Thursday, October 9, when a number of booths will be set up at the weekly Farmer's Market, with games and activities to inform the public of the services the Public Utilities Department (Department) provides for the residents and businesses in Anaheim. This will provide the public an opportunity to engage with employees who serve in varying functions. Local elementary school students will be visiting from 9:30 a.m. to noon, and will have access to games, prizes and bucket truck rides. All activities will be open for the general public from noon to 3:00 p.m., and they will be able to obtain a free emergency kit or flashlight when they ACTION TAKEN There being no public comments, Chair J. Machiavema closed the public comments portion of the meeting. B. Hernandez moved approval of the Minutes of the Regular Public Utilities Board Meeting of August 27, 2014. D. Wain seconded the motion. MOTION CARRIED: 6 -0. ABSTAINED: 0. ABSENT: 1 (D. Singer). 2014-57 AGENDA ITEM bring in the Public Power Week flyer. 4. PRESENTATION ON ELECTRIC SERVICE FOR THE ANAHEIM REGIONAL TRANSPORTATION INTERMODAL CENTER ( ARTIC). F. Barvarz, Electric Transmission & Distribution Manager, presented information about electric service to the Anaheim Regional Transportation Intermodal Center ( ARTIC). He provided an overview of the ARTIC project and explained the electric system's scope of work including new Preferred and Emergency Services to the facility, underground conversion of overhead lines on Douglass, provisions to meet future developments' electric service needs in the area, and new resort -style street lights on Douglass and Katella. F. Barvarz then discussed some of the challenges faced in coordinating the construction with the area venues, businesses and the railroad operations. He also discussed use of high quality recycled water for cooling, toilet flushing and landscape irrigation at ARTIC, which will save about three million gallons of potable water a year. 5. PRESENTATION ON THE INTERNAL COMPLIANCE PLAN. D. Wilson, Environmental Services Manager, provided a presentation on the Internal Compliance Plan (ICP) and how it helps to keep the Department in compliance with numerous regulations and statutes. The ICP tracks compliance for 70 programs and 25 regulatory agencies and is a useful communications tool as it keeps management informed of the status of many regulatory issues. J. Lehman added that the ICP was recently audited by the City's Audit Section, and they concluded that it fulfills its goals to track Department compliance. She mentioned that the auditor made a few suggestions for enhancement but there were no findings of any significant problems with the program. 6. APPROVAL OF REPLACEMENT AGREEMENTS WITH VENTYX, INC. TO UPDATE THE EXISTING CALIFORNIA INDEPENDENT SYSTEM OPERATOR ENERGY RELATED TRANSACTION SOFTWARE SYSTEM. * J. Lehman, Chief Risk Officer, shared that this item was basically a two part request. The first was to upgrade the existing California Independent System Operator ( CAISO) invoice validation system, described further in her report, and the second was to replace the existing contractual agreements with those that are substantially the same, but have been standardized to those of the vendor's new owner. J. Lehman provided background information about the Department's participation in the CAISO, and that each year transactions with the CAISO alone totals more than $75 million. The cost for each transaction is calculated down to the five minute interval where both price and quantity can vary. These are highly complex processes and systems which are needed to help validate the CAISO invoices with the Department's actual load, generation and transaction activities. The Department utilized an electronic settlement system from a ACTION TAKEN B. Hernandez moved approval of Replacement Agreements with Ventyx, Inc. to update the existing California Independent System Operator Energy Related Transaction software system. L. Cahill seconded the motion. MOTION CARRIED: 6 -0. ABSTAINED: 0. ABSENT: 1 (D. Singer). 2014 ..... 58 AGENDA ITEM company called Ventyx to validate the invoices. When the settlement system was purchased in 2007, it was through a very rigorous RFP process. The settlement system is now used by many of the market participants and because of the many users it remains an efficient and cost effective solution. The CAISO has been making many changes to its market so the settlement system is being upgraded by the vendor. These upgrades will allow settlement staff to more easily validate invoices and to provide other reporting data. Additionally, the request to upgrade the settlement system was a request to replace the existing contractual agreements to reflect that the vendor was purchased by ABB who wanted to standardize all of their agreements. The Department, along with the City attorney's office, extensively reviewed the agreements and determined that the terms and conditions in the replacement agreements are essentially the same so there are no issues with accepting the standardized agreement. The Board asked a number of questions on the cost related to purchasing a new system, and staff replied that the cost would be significantly higher and required additional time to implement, test and train employees on a new platform, which would impact the settlement process. 7. UPDATE ON WATER SYSTEM ISSUES. D. Lee informed the Board that Mayor Pro Tem Kris Murray recently resigned as Anaheim's representative on the Metropolitan Water District (MWD) Board of Directors. He expressed appreciation and thanks for the five years she served on the Board, and the hard work and dedication she showed in ensuring reliable water supplies for Anaheim and the region. Anaheim customers and the region are much better off during the current historic drought due to many actions taken by the MWD Board during her tenure, including enhanced conservation, storage, and water transfer programs. D. Lee shared with the Board that at the September 9th meeting, City Council appointed D. Calkins, AGM of Water Services, as Anaheim's new MWD Director. D. Calkins indicated to the Board that he will be inquiring about upcoming MWD Inspection Trips, such as those conducted in the past for the Colorado River Aqueduct and the State Water Project. Available trips will likely be next year. D. Calkins informed the Board that the State Water Resources Control Board recently conducted their annual inspection of Anaheim's water system to ensure effective operations and compliance with drinking water regulations. The inspection, which took place in late August, consisted of a review of all wells, pump stations, reservoirs, the Lenain Treatment Plant, and cross connection control and water quality records. Based on their inspection, not a single deficiency was noted. D. Calkins thanked D. Wilson, M. Jouhari, and their staff who do an excellent job of operating and maintaining Anaheim's facilities to ensure high quality water and compliance with the regulations. ACTION TAKEN 2014-59 AGENDA ITEM D. Calkins invited the Board's attention to a recent article, which was handed out, about MWD that helps clarify the Southland's water supply situation. Over the last three years, MWD has gone through two- thirds of their water in storage. At this rate, MWD's water storage reserves will be depleted in about 18 months. If this winter is drier than normal, MWD will consider rationing of imported supplies to its member agencies next year. At this time, staff' is continuing to monitor the water supply conditions of both the groundwater and imported resources, and will report back to Board if additional conservation measures are recommended. D. Calkins mentioned that since July 1, Anaheim's residential water use per person is down about 4% from last year. Overall water use is down about 2% — commercial /industrial use is up slightly. While this may seem like a modest reduction, this year is on track to be the hottest year on record in California. Anaheim's current water demand is down 15% compared to the average over the last ten years. 8. UPDATE ON ELECTRIC SYSTEM ISSUES. J. Lonneker, AGM of Electric Services, shared the status of the electric system performance during the week long elevated temperatures which began September 8, 2014. J. Lonneker shared that the system peaked during that time reaching 580 MW, which is close to the system all - time peak, which occurred in July 2006. The system performed well with several equipment - related outages resulting from high demands. The system performance is attributed to proactive system planning efforts and re- affirms the utility's underground conversion, direct- buried cable replacement and equipment replacement efforts that are part of the capital improvement plan. All power plant units were on -line and one unit experienced a shut -down, unrelated to the elevated temperatures. 9. UPDATE ON FINANCE ISSUES. B. Beelner, AGM of Finance and Administration, shared the monthly financial dashboard which showed that the Department performed very well in relation to the adopted budget. For the first two months of the fiscal year, water revenue was approximately 7.7% above budget and electric revenue was 8.2% above budget. These positive revenue variances were coupled with positive variances for both water and electric expenditures. 10, UPDATE ON JOINT SERVICES ISSUES. S. Sciortino, AGM of Joint Services, reported that staff provided a presentation to the Home Owner's Association (HOA) regarding water conservation efforts that the Department is promoting. The residents were very much engaged in the discussion on water conservation, and staff will continue to work with the residents to follow up on rebate programs. ACTION TAKEN 2014-60 AGENDA ITEM ACTION TAKEN S. Sciortino also reminded the Board of the Convention Center Solar Project dedication that will take place on October 7. In addition to the ceremony, there will also be the opportunity to tour the Convention Center as a whole as well as the Solar Project. 11. UPDATE ON ENTERPRISE RISK, COMPLIANCE, AND LEGISLATIVE & REGULATORY AFFAIRS ISSUES. J. Lehman, Chief Risk Officer, reported that the Public Utilities Board Legislative working group will be meeting next month, just prior to the regular Board meeting, to go over the final outcome of the legislative session and to start planning for the next session — which is the beginning of a new two year session. Regarding the current legislative year, she reported that some of the bills of concern failed, including SB 1139, the bill which would have mandated the investor owned utilities to purchase a certain amount of geothermal energy potentially above and beyond their existing renewable portfolio standard (RPS) requirements fail. A concern was that this bill could have caused increases to all CAISO transmission users, including the Department, and set a precedent for boutique RPS requirements. 12. AGENDA ITEM(S) FOR THE NEXT PUBLIC UTILITIES BOARD MEETING ON OCTOBER 22, 2414. • Quarterly Status Reports on CIP, MA, GSA, and Spot Bid Awards • OCWD North Groundwater Basin Cleanup Project Presentation • Electric System Reliability Report • Emergency Response Plan and Associated Activities Update • Power Scheduling Services Agreement with Z- Global * 13. ITEM(S) BY SECRETARY. D. Lee, Public Utilities General Manager, shared that the photos of the Board at various functions and events are available on the city website. D. Lee also expressed his appreciation to Mayor Pro Tern Kris Murray for serving on the Metropolitan Water District (MWD) Board, for the previous five years, which will now be served by D. Calkins. D. Lee also thanked D. Wain and J. Machiaverna for attending the Latino Utilities Coalition meeting, sharing that attendance and feedback received was very good. 14. ITEM(S) BY BOARD MEMBERS. L. Cahill expressed his concern regarding cyber security. D. Lee shared that the Department is working with the Orange County Intelligence Assessment Center (OCIAC) group and Department of Homeland Security, conducting facility assessments and testing cyber security to ensure precautionary measures are taken. B. Hernandez discussed and had questions on a recent article regarding Staff will research the wind a turbine wind project in Nevada. turbine project and report 2014-61 AGENDA ITEM S.E. Faessel said that it is important to be proactive on educating the public about conservation. She also congratulated D. Calkins on his appointment and thanked K. Murray for her service on the MWD Board of Directors. D. Wain mentioned that I. Macias did a great job on the turf replacement presentation at a recent HOA meeting. He said there was a lot of interest in the turf replacement; however, not everyone was able to get their questions answered and suggested the Department hold a workshop on turf replacement, solar panels, and conservation measures. He also congratulated D. Calkins on his new appointment. J. Machiaverna requested a Customer Information System (CIS) update, and D. Lee stated that a presentation is forthcoming. J. Machiaverna also congratulated D. Calkins on his new appointment and thanked K. Murray for her service. He also thanked staff for the Latino Utility Coalition meeting. 15. ADJOURNMENT: (TO THE REGULAR MEETING ON OCTOBER 22, 2014, AT 5:00 P.M., IN THE 11" FLOOR LARGE CONFERENCE ROOM, ANAHEIM WEST TOWER, 201 S. ANAHEIM BOULEVARD, ANAHEIM, CALIFORNIA). Res fully su e , Dukku Lee Secretary, Public Utilities Board ACTION TAKEN back to the Board. Staff will review holding another workshop on turf replacement. D. Wain moved to adjourn the Regular Meeting at 6:27 p.m. to the Board's next Regular Meeting date of October 22, 2014 at 5:00 p.m. S.E. Faessel seconded the motion. MOTION CARRIED: 6 -0. ABSTAINED: 0. ABSENT: 1 (D. Singer). * 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. f ,