Public Utilities 2015/01/28CITY OF ANAHEIM
PUBLIC UTILITIES BOARD
MINUTES
JANUARY 28, 2015
The agenda having been posted on Thursday, January 22, 2015, the Public Hearing 1 Regular Meeting of the
Public Utilities Board (Board) was called to order by Chair J. Machiaverna at 5:00 p.m. on Wednesday,
January 28, 2015, in the 2 °1 Floor Gordon Hoyt Conference Room, Anaheim West Tower, 201 S. Anaheim
Blvd., Anaheim, California.
Board Members Present: Chair J. Machiaverna, L. Cahill, B. Hernandez, C. Monaco, S.E. Faessel,
D. Wain
Board Members Absent: D. Singer
Staff Present: D. Lee, B. Beelner, D. Calkins, J. Lonneker, G. Bowen, J. Lehman,
A. Kott, L. Quiambao, P. Oviedo, R. Shintaku, J. McBride, M. Moore,
T. Mardikian, M. Seifen, I. Macias, M. Jouhari, P. Hayes, D. Shen,
B. Moorhead, R. Hoang
Guest(s) Present: Brandon Wood, Business Owner; Jesus Dez Gadillo, Resident; Micaela V.
Lopez, Resident; Julia Campos, Resident; Helen Sepeda, Resident; Tu Cindy,
Resident; Maria Luz Galindo, Resident; Alex Yih, Resident; Maria Lopez,
Resident; Monica De La Torre, Resident; Gruoveya Torre, Resident; Rosalua
Torres, Resident; Juan Bermudez, Resident; Katherine Jones, Court Reporter
— CSR No. 10097; Sarah Carvajal, Student, Mr. & Mrs. Carvajal and
daughter, Residents
AGENDA ITEM
The Board welcomed Sarah Carvajal, who is a 4 t ' grader from
Acaciawood Preparatory Academy, and her family for a presentation
to Sarah on the selection of her poster as part of the Metropolitan
Water District (MWD) 2015 Water Conservation Poster Contest.
1. PUBLIC HEARING: PROPOSED INCREASES TO THE
WATER COMMODITY ADJUSTMENT AND WATER
SYSTEM RELIABILITY ADJUSTMENT RATES AND
CORRESPONDING REVISIONS TO SCHEDULES W -CA AND
W -SRA, AND OTHER RATE ELIMINATIONS AND
MODIFICATIONS TO THE WATER RATES, R ULES AND
REGULATIONS. *
The Public Hearing was called to order by Chairperson J.
Machiaverna at 5:00 p.m.
D. Lee, D. Calkins, B. Beelner, J. McBride, T. Mardikian, M. Moore
and R. Shintaku were sworn in by the court reporter, after which
Chair J. Machiavema outlined the procedures to be followed during
the hearing.
2015-1
ACTION TAKEN
The Public Utilities
Department presented prepared
and oral testimony by two
witnesses in support of its
request for proposed increases
to the Water Commodity
Adjustment and Water System
Reliability Adjustment rates
and corresponding revisions to
Schedules W -CA and W -SRA,
and for the elimination of six
rates, consolidation of several
rate customer classes into the
existing General Water Service
rate schedule (Schedule W -G),
and making updates to the
ITEM NO. 01
AGENDA ITEM
ACTION TAKEN
D. Lee, Public Utilities General Manager, explained that the
"Applicability" and "Special
Department purchases water from two wholesale water suppliers and
Conditions" sections of the
the cost of that water is passed through to Anaheim customers without
Schedule W -G and Schedule
any markup. D. Lee described the four components of customer
W -PFL (Private Fireline
water bills and explained that the customer charge and base charge
Service) of the WATER
will remain unchanged but that the Water Commodity Adjustment
RATES, RULESAND
(W -CA) and Water System Reliability Adjustment (W -SRA) rate
REGULATIONS.
components of the bill will increase by a total of $0.24 for every 748
gallons. This would translate into a bill increase of approximately
There being no further
$4.80 per month for a typical customer occupying a single family
testimony or public comments,
home over a two year period.
Chairperson J. Machiaverna
received the following motion
D. Lee concluded by describing other proposed changes, including the
from A. Kott, who moved that
elimination of six rate schedules that would simplify the rate structure
all evidence, oral and written,
and make the fixed monthly customer charges and the base water
submitted by staff, including
commodity charge uniform for all customer classes, since residents
the Prepared Testimony with
and businesses pay the same commodity cost for water.
exhibits of D. Calkins the
Affidavits of Publication of the
D. Calkins, Assistant General Manager of Water Services, then
Notice of Public Hearing; the
explained that the W -CA increase is to recuperate rising water supply
Certificate of Mailing, and the
costs charged by wholesale water suppliers. D. Calkins explained that
written protests and the
the Department is at a point where it can no longer hold off on passing
returned notices filed with the
through the increased water supply costs without potentially risking
Secretary of the Board become
its credit rating. D. Calkins also discussed the need to increase the
part of the record and moved
WSRA in order to continue investing in Departments local water
into evidence. Chairperson J.
infrastructure and provided several examples of projects.
Machiaverna granted A. Kott's
motion.
D. Lee shared that five customer phone calls were received in
customer service with general inquiries and 20 written protests were
Chairperson J. Machiaverna
received (4 letters and 16 emails).
next entertained A. Kott's
request to close the record of
Solicitation for public comments was offered but there were no public
the public hearing because
comments with regard to the rate proposals during the rate hearing, so
there were no further witnesses
the Chair closed the public hearing. Thereafter, members of the
or evidence to be submitted by
Board commented that water issues have been fully vetted to validate
the Department for the Board's
the need for the rate action. He then summarized the previous
consideration. Since no
testimony of D. Lee as to the number of Notices of Public Hearing
objections to Staff's request
that were mailed to Anaheim property owners and Customers and the
were interposed, Chairperson J.
number of written protests received. In comparing the number of
Machiaverna closed the Water
written protests received to the number of Notices of Public Hearing
Rate Public Hearing.
that were mailed to Anaheim property owners and customers, he
concluded that the written protests do not equal 50% plus l of the
The Board provided comments.
tenants or property owners of record in the service territory. Thus, as
After which, Chairperson J.
guided by applicable state laws, he stated that there was no majority
Machiavema summarized the
protest to the proposed rate actions. The Chair next stated that the
prior testimony of D. Lee
increases to the Water Commodity Adjustment and corresponding
concluding that the number of
revisions to the Schedule W -CA as well as the Water System
protests received did not
Reliability Adjustment and corresponding revisions to the Schedule
constitute a majority protest
W -SRA of the Water Rates, Rules and Regulations are effective and
and the increases to the W -CA
will take place in two phases, February 1, 2015 and February 1, 2016.
and W -SRA are effective and
The Chair next indicated that an action item was required by the
will take place in two phases,
Board concerning the elimination of six rates and modifications of
February 1, 2015 and February
two other rates as more detailed by D. Calkins in his prepared and oral
1, 2016.
testimony.
2015-2
AGENDA ITEM ACTION TAKEN
A verbatim transcript of the entire presentation with all testimony,
exhibits and public comments that were a part of the public hearing,
was prepared by the Court Reporter. The certified original transcript
is on file in the 11` floor Department Records, Public Utilities
Department, Anaheim West Tower. A certified copy of the original
transcript is on file in the City Clerk's office, 2 " floor, City Hall.
B. Hernandez moved approval
on the Eliminations and
Modifications to the Water
Rates, Rules and Regulations.
S.E. Faessel seconded the
motion.
MOTION CARRIED: 6-0.
ABSTAINED: 0.
ABSENT: 1 (D. Singer).
Chairperson J. Machiaverna proposed a ten minute break. D. Wain moved approval of a
ten minute break. S.E. Faessel
seconded the motion.
MOTION CARRIED: 6 -0.
ABSTAINED: 0.
ABSENT: 1 (D. Singer).
The regular PUB meeting convened and was called to order at 5:49
p.m.
2. PUBLIC COMMENTS.
Brandon Wood, representing Puddles Carwash, asked the Board to There being no further public
keep in mind how increased water rates would affect his business, comments, J. Machiaverna
which would be a decrease in business, revenue and taxes to the City closed the general public
and possible layoffs at his business. comments portion of the
meeting.
3. APPROVAL OF THE MINUTES OF THE REGULAR PUBLIC L. Cahill moved approval of
UTILITIES BOARD MEETING OF DECEMBER 17, 2014. *
the minutes of the Public
Hearings / Regular Public
Utilities Board Meeting of
December 17, 2014. B.
Hernandez seconded the
motion.
MOTION CARRIED: 6 -0.
ABSTAINED: 0.
ABSENT: 1 (D. Singer).
4. APPROVAL OF TRANSMISSION SERVICE AGREEMENTS
OF FEDERAL ENERGY REGULATORY COMMISSION
APPROVED OPEN ACCESS TRANSMISSION TARIFFS.
G. Bowen, Acting AGM of Joint Services, presented the Board with
C. Monaco moved approval of
information regarding the approval of the Department's Transmission
the Transmission Service
Service Agreements. He shared that these Agreements are necessary
Agreements of Federal Energy
in order to move the energy from the Department's resources as a
Regulatory Commission
result of the transmission outage or for other operational needs, and
Approved Open Access
the Agreements provide an alternate way to transmit the energy to
Transmission Tariffs. D. Wain
Anaheim. The Agreements are based on federally - approved rates.
seconded the motion.
MOTION CARRIED: 6 -0.
ABSTAINED: 0.
ABSENT: 1 (D. Singer).
2015-3
AGENDA ITEM
5. PRESENTATION ON THE WINDY RIDGE WATER STORAGE
TANK PROJECT.
M. Moore, Water Engineering Manager, presented information on the
Windy Ridge Water Storage Tank Project, to the Board. He shared
that the City operates 13 reservoirs /tanks with a total storage of 38.75
MG of potable water, and one raw water reservoir with a capacity of
920 MG. Additionally, the City utilizes the groundwater basin
beneath the City as a reservoir. The City varies in elevation and is
divided into 18 pressure zones to keep pressures between 40 -100 psi.
The central and western sides of the City are mainly served by
groundwater wells.
The easterly side of the system does not have a groundwater basin,
therefore, above ground storage tanks and pumps supply water.
Because there is a possibility that pumps would not be operational
during an emergency, the Windy Ridge Tank has been proposed to
supply the 1320 Pressure Zone with a storage reservoir.
The proposed Windy Ridge Tank will be at the extreme eastern
portion of the City, just west of the 241 Toll Road, and south of the 91
Freeway, and will provide gravity storage to the highest elevation
area. The benefit of this tank is that it will provide water supply by
gravity, and will enhance the water system's redundancy and
reliability, especially for fire protection, during high summer
demands, and during Metropolitan Water District (MWD) shutdowns.
During design, efforts went into minimizing environmental impact
and maintaining aesthetics of the hillside. The tank will be notched
behind a hill and not visible from residences. Construction of the
tank, the access road and transmission main will be done using an
existing dirt road in the open space area. This will alleviate potential
inconveniences, such as noise and traffic on existing streets.
A community outreach program has been implemented. City staff has
met with local Home Owners Associations. The environmental
document for the project is available for review for 30 days by the
public. The City's website has been updated for the public to stay
informed. And a community meeting is being planned for mid -
February.
The Board asked several questions about the project relating to the
environmental permits, costs and construction impacts. The Board
thanked staff for the presentation on this important project.
6. UPDATED QUARTERLY STATUS REPORTS ON CAPITAL
IMPROVEMENT PROJECTS, MASTER AGREEMENTS,
GENERAL SERVICE AGREEMENTS, AND SPOT BID
AWARDS.
D. Lee, Public Utilities General Manager, introduced the purpose and
summary of the contents of these two reports to the Board. The
reports include the summary of completed and active Capital
Improvement Projects for both Electric and Water divisions in the
various stages of design and construction, an updated summary of
ACTION TAKEN
2015-4
AGENDA ITEM ACTION TAKEN
Master Agreements and General Service Agreement contracts
awarded to pre - qualified Electric and Water firms for construction
and consulting services, and electric equipment purchases made
through the end December 2014.
J. Lonneker provided a narrative for the Board regarding the
Esperanza High School reliability improvement project included in
the Capital Improvement quarterly report, representing an example of
the work the Department performs for purposes of reliability
improvements using capital funds. Located in an area near the
northern fringe of the City bordering Yorba Linda, the power lines are
attached to poles located along a heavily traveled street, and the poles
are owned by Southern California Edison (SCE), making it very
unlikely to be placed underground in the future. The Department
completed a circuit extension of a nearby circuit, which will provide
an alternate source of power to this residential area and Esperanza
High School. This was a creative way to improve the reliability for
the area given the constraints.
7. UPDATE ON WATER SYSTEM ISSUES.
D. Calkins, AGM of Water Services, gave an update on the Water
Supply Conditions. Locally, the to -date precipitation is now 95% of
normal; down from 121 % at the end of December. In Norther
California the to -date precipitation is now 92% of normal; down from
130% at the end of December. Key State Water Project reservoirs are
at about 40% of capacity. In the Colorado River basin, the to -date
precipitation has dropped to 82% of normal. The Colorado River
reservoirs are at 50% of capacity. While January has been very dry,
the 3 -month outlook continues to show wetter than normal weather
for the Southwestern U.S. and Southern California. Precipitation
levels over the next two months will determine if imported water
supplies this summer will be rationed by MWD or not.
The Board's agenda package included an informational memo on a
proposed Huntington Beach Ocean Desalination Project. This project
would produce a new supply of 56,000 Acre -Feet per Year (AFY) for
Orange County, which is about 50 Million Gallons per Day (MGD).
Earlier this month, the Orange County Water District Board voted to
begin negotiation of a term sheet with Poseidon to purchase the entire
plant output and establish a Citizens Advisory Committee, with each
Orange County Water District (OCWD) Director appointing two
members.
D. Calkins mentioned the email invitation that was sent to the Board
inviting them to the Municipal Water District of Orange County's
Water Policy Forum & Dinner, which will be held on Thursday,
February 5�'. The speaker will be Lucy Jones of the U.S. Geological
Survey.
8. UPDATE ON ELECTRIC SYSTEM ISSUES.
J. Lonneker, AGM of Electric Services, reported that the Department
has requested that the City of Anaheim's Audit Services conduct an
audit of the Department's Underground Conversion Program (UGC)
Board Member B. Hernandez
requested information on
previous actions taken by the
Board. Staff will provide a
summary of information
provided at the following
meeting.
2015-5
AGENDA ITEM
and the Home Underground Program (HUG) as a prudent measure to
ensure the programs comply with the Department's Electric Rates,
Rules and Regulations and any other pertinent policies, procedures or
regulations. Also, the audit will confirm that adequate internal
controls are in place to ensure transactions are properly authorized,
and aligned with good business practices. The audit will take place
over the next 3 -4 months. After reviewing the results of the audit and
the City's recommended actions, the Department will include a
summary to the Board as part of the UGC 5 -Year Plan.
9. UPDATE ON FINANCE ISSUES.
B. Beelner, AGM of Finance and Administrative Services, provided a
market conditions update, sharing that interest rates for 30 year bonds
had recently dropped to 2.84% for the water utility and 2.99% for the
electric utility. B. Beelner then mentioned that this was a good time
to issue new and refinance existing debt, so the Department will bring
bond proposals to the Board in February.
B. Beelner invited the Board's attention to the Dashboard, which
showed that both electric and water revenues were still trending above
budget due to the warm summer and winter this fiscal year.
10. UPDATE ON JOINT SERVICES ISSUES.
G. Bowen, Acting AGM of Joint Services, shared that the
groundbreaking ceremony for the Bowerman Landfill Gas project
took place in January. He explained that an important milestone is the
delivery of the reciprocating engines from Germany and that they
would be received via the Panama Canal in May 2015. The
Commercial Operation Date for the facility is anticipated to be in
January 2016.
G. Bowen discussed the status of the Waste to Biogas Project that will
be located in Anaheim at the Republic Waste Management site. He
shared that the project took a major step forward with the approval of
a feedstock agreement with Republic. The Project developer still
needs to sign a property lease agreement prior to commencing
construction.
A Board member asked what the current Renewable Portfolio
Standard (RPS) percentage was and if the Department was on target
to reach its RPS goals for the current and next compliance period. G.
Bowen responded that the current RPS percentage was over 20% and
that the Department is on track to meet the 2017 target of 25% and
also to meet the 33% target by 2020.
G. Bowen shared the Water Saving Public Service Announcement
that the Department was airing on major TV channels throughout the
month of January and mentioned that the service announcement is
also available on Facebook and the City's website.
ACTION TAKEN
2015-6
AGENDA ITEM
11. UPDATE ON ENERGY RISK & LEGISLATIVE
REGULATORY AFFAIRS ISSUES.
J. Lehman, Chief Risk Officer, provided an update on the Internal
Compliance Report. She mentioned that she had reported last month
that as part of a routine inspection, the South Coast Air Quality
Management District (AQMD) determined that the anhydrous
ammonia tank on site at the Kraemer power plant now needed a
permit. During the reporting period, the AQMD issued a Notice to
Comply, and the permit application was promptly completed and
submitted to the AQMD.
Also, she reported that it was discovered in October that during
routine testing the emergency generator at Kraemer operated longer
than the permit allowed. This was reported to the AQMD and a
Notice of Violation may result in a small financial penalty.
Additional training on the permit requirements has been conducted at
the facility, as well as process improvements to ensure that this does
not occur again.
She also reported that both the State and Federal legislatures were
back in session. There are water bills introduced that address clean-
up items related to the historic sustainable groundwater management
bills, and at this time there doesn't appear to be any significant issues
with these bills. There is another bill promoting public access to well
reports — this type of bill has been introduced in the past, and while
public utilities are subject to the freedom of information act, well
security needs to be addressed in the bill.
She shared that the state - mandated emergency drought regulations are
set to expire on April 25 and that the regulations will likely be
extended. The Department, as it did last year, will closely monitor
and participate in any efforts to extend or amend the emergency
drought regulations to ensure that local concerns are addressed.
On the electric side, J. Lehman mentioned that there were already a
number of bills introduced to address the Governor's call in his
inaugural address for further Greenhouse Gas (GHG) reductions and
increases in renewable energy usages. She mentioned that the State's
large utilities have met with the Governor's office and California Air
Resources Board to offer an alternative approach that incorporates
local considerations, rather than a one - size -fits -all approach.
12. AGENDA ITEM(S) FOR THE NEXT PUBLIC UTILITIES
BOARD MEETING ON FEBRUARY 25, 2015.
• Electric and Water Bonds
• Utility Success Indicators
• Student Engagement Presentation
• Agreement with Muzeo *
13. ITEM(S) BY SECRETARY.
D. Lee informed the Board that annual filing of Form 700 is coming
due, and that more information will be provided by the City Clerk.
ACTION TAKEN
2015-7
AGENDA ITEM
14. ITEM(S) BY BOARD MEMBERS.
C. Monaco reported that he attended the Bowerman Landfill
groundbreaking. He stated that the project is innovative, and he
appreciates its many benefits.
D. Wain reported that he also attended the Bowerman Landfill
groundbreaking event and asked if the Department will have an
opportunity to become involved with similar projects at other
landfills. D. Lee responded that the Department continues to look at a
variety of renewable projects, including additional landfill projects.
S.E. Faessel thanked Barbara Gonzalez for the Anaheim Historical
Home's calendars that she provided to the Board. She also reported
that she attended the Bowerman Landfill and complimented staff on
its sustainability programs. She also stated she appreciates the
Department's efforts to keep reliability a high priority.
L. Cahill stated that the actions taken by the Board today are
significant and important to the overall health of the water system.
He shared that these incremental steps help to avoid major issues in
the future.
B. Hernandez stated that he concurs with the approach to
incrementally take rate actions that consider the cost of water and the
need to make system improvements. He further stated the importance
of taking such actions slowly will minimize impacts to residents and
businesses.
J. Machiaverna thanked the Board members for their insights and
actions. He added that the Department has demonstrated sensitivity
towards customers' concerns.
15. ADJOURNMENT: (REGULAR MEETING ON FEBRUARY 25,
2015, AT 5:00 P.M., IN THE 11 FLOOR LARGE
CONFERENCE ROOM, ANAHEIM WEST TOWER, 201 S.
ANAHEIM BOULEVARD, ANAHEIM, CALIFORNIA).
ACTION TAKEN
B. Hernandez moved to
adjourn the Regular Meeting at
6:55 p.m. to the Board's
Regular Meeting date of
February 25, 2015 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.
2015-8