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Public Utilities 2014/11/19CITY OF ANAHEIM PUBLIC UTILITIES BOARD MINUTES November 19, 2014 The agenda having been posted on Wednesday, November 12, 2014, the Regular Meeting of the Public Utilities Board (Board) was called to order by Chair J. Machiaverna at 5:00 p.m. on Wednesday, November 19, 2014, in the 11` Floor Large Conference Room, Anaheim West Tower, 201 S. Anaheim Blvd., Anaheim, California. Board Members Present: Chair J. Machiaverna, Vice Chair D. Singer, B. Hernandez, S.E. Faessel, D. Wain, C. Monaco Board Members Absent: L. Cahill Staff Present: D. Lee, B. Beelner, G. Bowen, D. Calkins, J. Lonneker, J. Lehman, A. Kott, L. Quiambao, P. Oviedo, M. Brownrigg, M. Lopez, C. Pereyra, A. Preciado, R. Watkins, J. McBride, D. Aguon, V. Santos, M. Wooden Guest(s) Present: J. Baca (IBEW LOCAL 47) AGENDA ITEM ACTION TAKEN 1. PUBLIC COMMENTS. None. Chair J. Machiaverna recognized the Public Utilities Department's (Department) Line Mechanics who participated in the International Linemen's Rodeo. D. Lee congratulated them on the work they do every day to maintain the electric system and represent the City of Anaheim in their interactions with customers. J. Lonneker introduced D. Aguon, M. Wooden, and V. Santos, the team members who placed first out of 35 teams in the Municipal division. They placed sixth overall, out of over 200 teams. J. Lonneker congratulated the team for their achievement. The team members described the events they competed in, and stated they were honored with the Board's recognition, and brought the trophy they won at the event. The team members were given letters of recognition from the Board. 2. APPROVAL OF THE MINUTES OF THE REGULAR PUBLIC UTILITIES BOARD MEETING OF OCTOBER 22, 2014. * There being no public comments, Chair J. Machiavema closed the public comments portion of the meeting. D. Singer moved approval of the Minutes of the Regular Public Utilities Board Meeting of October 22, 2014, S.E. Faessel seconded the motion. MOTION CARRIED: 6 -0. ABSTAINED: 0. ITEM NO. 01 AGENDA ITEM 3. ADOPTION OF THE PROPOSED 2015 PUBLIC UTILITES BOARD MEETING SCHEDULE. ** 4. PRESENTATION AND DEMONSTRATION ON CUSTOMER INFORMATION SYSTEM (CIS). M. Lopez, Business Information Systems Manager, presented the Board with a demonstration of the Customer Information System (CIS). The CIS is the Department's core business system supporting multiple departments, work areas, and functions. The system is used to generate almost one million bills each year that results in the collection of $400 million in payments for electric, water, sanitation, and paramedic services. Additionally, the system is used to convert data from meters into bills, manage the processing of bill payments, assist customers with their bills, and collect and manage account information. The new CIS went live on June 23, 2014, and the project was completed on budget. M. Lopez described the modern software architecture that creates efficiencies by reducing the number of screens that must be navigated to access information, reduces the training time for new employees from eight weeks to two weeks, simplifies business processes when serving customers, and significantly improves the ability to share information with other business systems within the city. The field mobile solution is an extension of the CIS and has completely automated field operations by replacing a paper based system with computer tablets designed for the remote use with the ability to quickly update customer account information. Due to the importance of customer data security, steps have been taken to ensure that customer information is protected. Staff is monitored by floor supervisors to ensure all policies and procedures are being followed when managing customer information during the course of their job. From a technology perspective, the system is physically located behind a firewall that blocks all internet facing traffic. The City maintains an intrusion detection system that identifies potential hack attempts and vulnerability scans are proactively ran to identify potential threats from viruses. Lastly, software has been installed on the field mobile computer tablets that would allow staff to delete all data on the device in the event it is lost or stolen. Next year, the Department plans to start offering customers some additional services. The Department will offer an option for monthly billing and level payment plans for customers who want help managing their payments. Additionally, a new mobile app will be available, making it easier to access account information and make payments ACTION TAKEN ABSENT: 1 (L. Cahill). C. Monaco moved approval of the Adoption of the Proposed 2015 Public Utilities Board Meeting Schedule. D. Wain seconded the motion. MOTION CARRIED: 6 -0. ABSTAINED: 0. ABSENT: 1 (L. Cahill). 2014-72 AGENDA ITEM using a mobile device, such as a smart phone or tablet. Beginning in January, customer service hours will be increased to handle phone calls on Monday through Thursday from lam to 7pm and Friday from lam to 5:30pm. 5. APPROVAL OF A PURCHASE ORDER WITH METROPOLITAN WATER DISTRICT (MWD) TO OBTAIN IMPORTED WATER. * D. Calkins, Assistant General Manager (AGM) of Water Services, shared an overview of staffs recommendation for the Board's approval to recommend to City Council that it approve of a Purchase Order with the Metropolitan Water District (MWD) for imported water over the next 10 years. This Purchase Order would replace a similar 12 -year purchase order that expires at the end of this calendar year. Entering into this Purchase Order is optional, but doing so will benefit Anaheim by reducing the cost of imported water by an estimated $9 million over the 10 -year period. More specifically, entering into the Purchase Order will allow Anaheim to purchase more water at MWD's lower Tier I rate; a savings of $140 per acre -foot (AF) over MWD's Tier 2 rate. Staff estimates that Anaheim will need to purchase approximately 200,000 AF of water over the next 10 years. The Purchase Order includes a provision that the minimum commitment to purchase imported water will be reduced if Anaheim invests in alternative local supplies to reduce dependence on imported water from MWD. The MWD Board of Directors approved this and other Purchase Orders at their Board meeting on November 18, 2014. The Board asked a number of questions about provisions of the Purchase Order, the estimated cost savings of imported water, and the 10 -year commitment to purchase imported water versus staff's projection of imported water demand over that time frame. 6. APPROVAL OF THE PROPOSED PUBLIC HEARING DATE AND TIME TO CONSIDER PROPOSED MODIFICATIONS TO THE WATER RATES, R ULES AND REGULATIONS. B. Beelner, AGM of Finance and Administration, shared information regarding the purpose for setting a public hearing date of January 28, 2015 at 5 p.m. for the Board to conduct a public hearing concerning the pass through increase to Water Commodity Adjustment (WCA) from $1.31/hundred cubic feet (hcf) to $1.40/hcf over two years and to increase the Water System Reliability Adjustment (WSRA) from $0.301hcf to $0.45/hcf over two years and to make administrative changes to the other water rates that would not have any cost impacts on ratepayers. B. Beelner went over the public hearing requirements in the California Constitution, specifically the fact that the Department is required to mail out notices to all property owners 45 days in advance of the hearing notifying them of the hearing. B. Beelner shared that if the Board approved the Public Hearing date and time, notices would be mailed to all customers and property owners on December 9, 2014. B. Beelner indicated that a water and electric rate workshop will be held at the December 2014 Board meeting at which time more information ACTION TAKEN C. Monaco moved approval of a Purchase Order with Metropolitan Water District (MWD) to obtain imported water. S.E. Faessel seconded the motion. MOTION CARRIED: 6 -0. ABSTAINED: 0. ABSENT: I (L. Cahill). S.E. Faessel moved approval of the Proposed Public Hearing Date and Time to Consider Proposed modifications to the Water Rates, Rules and Regulations. D. Singer seconded the motion. MOTION CARRIED: 5 -1. ABSTAINED: 0. OPPOSED: 1 (C. Monaco) ABSENT: 1 (L. Cahill). 2014-73 AGENDA ITEM including the drivers for the proposed rate change, the impacts of Measure N, and a more in depth, detailed discussion of the Department's rate structures and strategy will be held. The Board discussed the need for the hearing, the mandated process and requested that, in the future, more information be given prior to scheduling a hearing to better support any proposed rate changes. 7. UPDATE ON THE SOLAR REBATE PROGRAM. G. Bowen, Acting AGM for Joint Services, provided an update on the City's Senate Bill (SB) -1 Solar Rebate Program. G. Bowen discussed the goal of the program and the current status of the systems installed in Anaheim since Anaheim's program began at the beginning of 2008. He also discussed future projections for the number of installations and the projected total installed capacity by the end of 2016. G. Bowen also explained that now the investor owned utilities have met the majority of their program targets that, developers will be focusing more on municipal owned utilities service areas to install solar projects as the program draws to an end. 8. UPDATE ON WATER SYSTEM ISSUES. D. Calkins shared with the Board that the Utilities Department was honored by the Anaheim Arts Council at their annual "Art in Public Places" awards ceremony on November 6, 2014. The Department received an award for the Water Sustainability Campus, which was entitled "The Art of Recovery". The Arts Council recognized the facility by stating: "Recycled water cascades from a tower incorporated into a glass structure surrounded by a garden of drought - tolerant, California- native plants on the Anaheim Water Sustainability Campus. The building and surrounding plants, just north of City Hall, are beautiful, soothing and provide a pleasant experience." D. Calkins expressed thanks to the Arts Council for this award, and for all the Department staff that worked to make the Water Sustainability Campus such an attractive and educational facility for the public. D. Calkins invited the Board's attention to a handout of a recent newspaper article about San Diego's plans to recycle sewage into drinking water. The San Diego City Council recently approved a long term plan to recycle water in the same way Orange County has been doing since 2008 with the Orange County Water District's Groundwater Replenishment System (GWRS). The San Diego project — called Pure Water San Diego — will be done in concert with their sewage treatment plants to reduce discharges to the ocean. Many environmentalists have been encouraging San Diego to recycle water like this for a number of years in order to reduce sewage discharges to the ocean, and because they view it as more ecologically friendly than ocean desalination. San Diego will begin with a 15 million gallon per day (mgd) facility at their North City Reclamation Plant by 2023. Ultimately, they plan to recycle 83 mgd by 2035. To put this into perspective, Orange County's GWRS plant currently recycles 70 mgd, and its expansion to 100 mgd will go on -line in April 2015. ACTION TAKEN 2014-74 AGENDA ITEM 9. UPDATE ON ELECTRIC SYSTEM ISSUES. J. Lonneker, AGM of Electric Services, shared information regarding the temporary shutdown of Kraemer Power Plant to further investigate visible wear and tear on the turbine unit which was discovered during a routine inspection. She explained that the turbine unit will be disassembled in December 2014 to evaluate the source of the premature wearing, and then make recommendations for repairs along with cost estimates. Board members inquired whether previous work performed on the unit was under warranty; she responded that the turbine is outside of the warranty period of a previous repair and there isn't indication, at this time, that the source of the damage is related to previous workmanship. She also shared that the Department incurs financial penalties for the time that the Kramer Power Plant is not in- service, so timely evaluation of cost effective repairs and performing those repairs is a priority. 10. UPDATE ON FINANCE ISSUES. B. Beelner discussed the City's Convention Center Financing that closed the week of November 10, 2014. He mentioned that the City will be paying approximately 4.3% interest on the Convention Center, which is approximately 0.5% higher than they would have paid without the lawsuit. The Board discussed this rate in contrast with the 1.89% interest rate the Department recently received for the 2014 -A refunding bonds issued in September, and B. Beelner explained that because the term for the Department's refunding is 10 years, the interest rate was much more favorable. B. Beelner went over the monthly dashboard, which showed revenue for both water and electric continuing to trend above budget primarily due to the warm and dry winter coupled with lower than budgeted levels for controllable costs, such as labor and other operational costs. 11. UPDATE ON JOINT SERVICES ISSUES. G. Bowen discussed two renewable projects, Anaheim Energy and Westlands that would not be able to meet their commercial operation date under their current agreements due to circumstances beyond the control of the developer in each case. As such, both project agreements would be amended with modified schedules. The financial terms of the agreements remain unchanged. G. Bowen also mentioned that the Bowerman Landfill Gas project is still in the process of scheduling its ground breaking ceremony and that all Board members will be invited to attend the event once the date is finalized. Lastly, G. Bowen shared with the Board that Anaheim Student Sarah Carvajal, a fourth grader at Acaciawood Preparatory Academy whose poster won MWD Water Conservation Poster Contest, was also a winner at the MWD regional contest. MWD is hosting a celebration ACTION TAKEN 2014-75 AGENDA ITEM for the student artists at their headquarters on December 1, 2014, from 10:00 am to 1:00 pm and all Board members are welcome to attend. 12. UPDATE ON ENTERPRISE RISK, COMPLIANCE, AND LEGISLATIVE & REGULATORY AFFAIRS ISSUES. J. Lehman, Chief Risk Officer, shared that the California Independent System Operator ( CAISO) implemented the new Energy Imbalance Market this month that included, for the first time, another balancing authority, PacifiCorp. PacifiCorp covers parts of Utah, Wyoming, Washington, Idaho, Oregon, and Nevada. The goal of this new energy market is to provide a broader market for energy transactions and a market for California's forecasted future excess of renewable energy during certain hours of the day rather than having to institute other measures, such as curtailing these renewables. Because it is a new process, the CAISO is working through some minor issues, and staff will review the final settlement results. On the legislative arena, she shared that now that the water bond has been passed by the voters in California, water will likely be a major focus of the legislature next year as attempts are made to fine tune the ways the funds may be spent. Additionally, there will be a Senate hearing to explore ways to facilitate the resolution of groundwater right disputes in order to help facilitate the implementation of the newly passed groundwater management legislation (AB 1739 and SB 1168). She shared that the first annual update to the Emergency Response Plan (ERP) will include a revision to the definition of a Major Outage for water as it has been confirmed that the criteria was set to low. Currently, it is defined as an outage of 100 customers, or more. In October there was a water main break, where over a hundred customers were out for several hours and it was not the type of incident that would cause the ERP to be employed, as water staff handled it as part of its routine operations. 13. AGENDA ITEM(S) FOR THE NEXT PUBLIC UTILITIES BOARD MEETING ON DECEMBER 17, 2014. • Utility Water and Electric Rates Workshop. • Update on Windy Ridge Tank Project. • Regulatory Relief items to Amend Rules 13 and 14. • Update on Renewable Portfolio Standards. * 14. ITEM(S) BY SECRETARY. D. Lee, Public Utilities General Manager, shared that S. Sciortino's retirement gathering is scheduled for Tuesday, December 10. He also shared results of Southern California Edison's (SCE) offers for new resources opportunities. SCE has contracted for about 2200 Megawatts (MW) of resources that include conventional, energy storage, energy efficiency, demand response, and renewables. ACTION TAKEN 2014-76 AGENDA ITEM ACTION TAKEN Lastly, D. Lee shared information on solar powered roadways, which utilizes hardened tempered glass and have embedded lighting and electronics to communicate status. The idea is to use solar powered roadways for sidewalks, bike trails, neighborhood streets and parking lots. They generate electricity that may be used for street lighting and other applications. The product is still in research and development and therefore cost estimates are still unavailable. 15. ITEM(S) BY BOARD MEMBERS. C. Monaco stated that he would like to better understand the impacts of Measure N on any potential water rate actions, and since this would be his first time in a rate hearing, he requested information on the process. He also stated that he had a number of interactions with utility employees, and they have all been very professional. D. Wain asked about information he received by mail regarding the condition of power poles throughout the City. D. Lee explained that the information was sent anonymously, and therefore staff is unable to explain the pole inspection program to the sender. He further explained that the Department follows best industry practices for inspection cycles, and that during the windstorm earlier in 2014, utility poles in Anaheim performed well and that there were no poles that were compromised from the wind event. S.E. Faessel thanked staff for the tour at Republic Services; she said it was informative. She also congratulated the Linemen team on their accomplishments at the rodeo competition. She also congratulated the Department on the Arts Council recognition Award. She stated that she appreciates the Department's willingness to find collaborative solutions, similar to how businesses operate. B. Hernandez requested a presentation on storage tanks in the City. Staff will provide an update at the next Board meeting. D. Singer said that she would like to use events, such as the Linemen's Rodeo, to share with students how they can pursue careers in the utility field. She encouraged staff to find ways to demonstrate to students that they can have fun at work and develop their skills, and represent their community. J. Machiaverna acknowledged the discussion regarding water rates, and looked forward to additional information on the justifications associated with the proposed water actions. He thanked Republic Services for the tour, and congratulated the Linemen for their achievement. 16. ADJOURNMENT: (TO THE REGULAR MEETING ON D. Wain moved to adjourn DECEMBER 17, 2014, AT 5:00 P.M., IN THE 11" FLOOR the Regular Meeting at 7:02 LARGE CONFERENCE ROOM, ANAHEIM WEST TOWER, p.m. to the Board's next 201 S. ANAHEIM BOULEVARD, ANAHEIM, CALIFORNIA). Regular Meeting date of December 17, 2014 at 5:00 p.m. S.E. Faessel seconded the motion. 2014 77 AGENDA ITEM Respectfully tted, Dukku Lee Secretary, Public Utilities Board ACTION TAKEN MOTION CARRIED: 6 -0. ABSTAINED: 0. ABSENT: 1 (L. Cahill). 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.