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Public Utilities 2015/04/22CITY OF ANAHEIM PUBLIC UTILITIES BOARD MINUTES April 22, 2015 The agenda having been posted on Friday, April 17, 2015, the Regular Meeting of the Public Utilities Board (Board) was called to order by Chair J. Machiaverna at 5:00 p.m. on Wednesday, April 20, 2015, in the 1 P h Floor Large Conference Room, Anaheim West Tower, 201 S. Anaheim Blvd., Anaheim, California. Board Members Present: Chair J. Machiavema, S.E. Faessel, B. Hernandez, D. Wain, C. Monaco, L. Cahill Board Members Absent: Vice Chair D. Singer Staff Present: D. Lee, B. Beelner, J. Lonneker, M. Jouhari, J. Lehman, A. Kott, M. Lopez, L. Quiambao, P. Oviedo, M. Moore Guest(s) Present: None AGENDA ITEM I. PUBLIC COMMENTS. None. 2. APPROVAL OF THE AI[NUTES OF THE REGULAR PUBLIC UTILITIES BOARD MEETING OF MARCH 25, 2015. * 3. PRESENTATION ON THE REAL PROPERTY EXCHANGE BETWEEN ANAHEIM PUBLIC UTILITIES AND THE ANAHEIM FIRE DEPARTMENT. 4. WITHDRAW THE RECOMMENDATION TO THE CITY COUNCIL RELATING TO MODIFICATION AND IMPLEMENTING OF THE OF THE WATER REDUCTION PLAN OF CHAPTER 10.18 OF THE ANAHEIM MUNCIPAL CODE; AND RECOMMENDATION AN UPDATED WATER REDUCTION PLAN III FOR THE CITY COUNCILS CONSIDERATION TO RESPOND TO EXECUTIVE ORDER B- 29 AND MANDATORY EMERGENCY DROUGHT REGULATIONS OF THE STATE WATER RESOUCES 2015-17 ACTION TAKEN There being no public comments, Chair J. Machiaverna closed the public comments portion of the meeting. B. Hernandez moved approval of the minutes of the Regular Public Utilities Board Meeting of March 25, 2015. L. Cahill seconded the motion. MOTION CARRIED: 6 -0. ABSTAINED: 0. ABSENT: 1 (D. Singer). AGENDA ITEM CONTROL BOARD. * M. Moore, Water Engineering Manager, presented a staff report to the Board concerning the request that the Board recommend to City Council that the Council declare a water shortage emergency and to Modifying and Ordering the Implementation of the Water Reduction Plan. He shared that the region is entering the fourth year of a historic drought that affects Anaheim's water supply. The State of California has adopted additional regulations that require water suppliers to restrict the number of days customers can irrigate turf and ornamental landscaping. Staff is proposing City Council approve a resolution to restrict customers to 3 days per week irrigation unless they have a centralized weather based control system or areas that use drip irrigation. 5. PRESENTATION ON WATER SYSTEM RELIABILITY. M. Jouhari, Acting AGM for Water Services, presented the Board with a presentation on Water System Reliability. He described the elements of a reliable water system including the water supply, infrastructure, emergency response, and system rehabilitation and replacement. M. Jouhari explained that causes of water interruptions and for main breaks, causes include corrosion, stress, and tree roots damaging pipes. M. Jouhari also explained that the Department is currently below the top quartile in main break metrics according to an American Water Works Association benchmarking survey. 6. PRESENTATION ON FY 13114 ADVANTAGE SERVICES ANNUAL UPDATE. P. Hayes, Business and Community Programs Manager, presented the Board with an annual update on the FY13 /14 Business and Community Programs Division's Advantage Services programs. He highlighted that there was a total energy savings of over 32 million kilowatt hours (kWh), equating to the annual energy use of 4,972 homes; water savings equal to the annual water consumption of 450 homes; and greenhouse gas emission reductions equal to removing 3,032 vehicles from the road. P. Hayes shared that the FY 14/15 enhancements will include the expansion of the existing School's Programs, an Enhanced Drought Response effort and the rolling out of new programs, including inter - utility Weatherization Agreement with the Gas Company and expansion of the Small Business Direct Install Program to include water conservation measures. The Division will also undertake a Research Design and Development (RD &D) project research to evaluate the feasibility of light- emitting diode (LED) lighting at the local sports venues as well as the electric vehicle charging impacts on the Department's electric infrastructure. ACTION TAKEN B. Hernandez moved approval of the Recommendation to City Council to declare a water shortage emergency and modifying and ordering the implementation of the water reduction plan of Chapter 10.18 of the Anaheim Municipal Code in compliance with recently adopted mandatory emergency drought regulations of the State Water Resources Control Board and the Water Code. D. Wain seconded the motion. MOTION CARRIED: 6-0. ABSTAINED: 0. ABSENT: 1 (D. Singer). 2015-18 AGENDA ITEM The Board asked a series of questions about electric vehicles types, their range, and their projected impact on the grid. Staff explained that there are approximately 500 electric vehicles in Anaheim but they are spread throughout the City and the research project would be to see how charging impacts in a more concentrated setting would affect the utility's electric system. The Board suggested that staff consider a school competition on energy savings as a way to encourage and teach students about conservation. ACTION TAKEN The Board requested staff to evaluate information on a development project on Clementine and the efforts to include energy efficiency measures, and the language in the corresponding development agreement. Staff will evaluate a school 7. DISCUSSION ON THE CAPACITY OPTION AND FUNDING AGREEMENT AMONG PUBLIC SERVICE NEW MEXICO, PNM RESOURCES INC., PNMR DEVELOPMENT AND MANAGEMENT CORPORATION, M -S-R (A JOINT POWER AUTHORITY AMONG MODESTO, SANTA CLARA AND REDDING), AND THE CITY OF ANAHEIM. G. Bowen, Integrated Resources Manager, shared information about the San Juan Capacity Option and Funding Agreement ( "new Agreement "). He shared with the Board that the City of Farmington made a decision not to be a party to the San Juan Generating Station Fuel and Capital Funding Agreement, which resulted in that agreement becoming non - binding and unenforceable. This action left 65 Megawatts (MW) of unassigned capacity, including 50 MW for Anaheim and 15MW for M -S -R. The resulting risk facing the Department was potentially becoming responsible for paying for a large portion of the San Juan Capital Costs (approximately $4 million). Consequently, it was not possible to bring the new Agreement to the Board for their recommendation to the City Council without missing the March deadline. G. Bowen shared that — PNMR- D will assume the unassigned capacity. He explained that the new Agreement assigns the capacity, operating costs, and capital costs to the new off -taker PNMR -D. Lastly, G. Bowen explained that there will be three other agreements in conjunction with the San Juan divestiture that will be brought before the Board for their approval in the next six to nine months. Those agreements are an ownership restructuring agreement, mine reclamation funding agreement, and a decommissioning agreement. 8. UPDATE ON WATER SYSTEM ISSUES. M. Jouhari, Acting AGM of Water Services, shared an update with the Board on the Department's recent water supply conditions. He shared that the data for March reflects that the precipitation conditions have worsened since the February 2015 report. On March 2, 2015, energy conservation program for Board consideration. Staff will follow up with the Planning Department regarding the development project. 2015-19 AGENDA ITEM the Department of Water Resources (DWR) increased the initial 2015 State Water Project allocation to 20% from the 15% previously announced on January 15, 2015. Metropolitan Water District (MWD) would receive 3 82, 000 acre -feet under this 20% allocation. M Jouhari shared with the Board that Orange County Water District (OCWD) has negotiated a draft term sheet with Poseidon that describes the pricing for the water at the treatment plant. The OCWD Board approved this term sheet for review by its new Citizen Advisory Committee. The term sheet and meeting invites has been sent to the City's two committee members and alternate from OCWD. Lastly, M Jouhari invited the Board members to the Colorado River Inspection Trip, Friday, May 29, 2015, through Sunday, May 31, 2015 and asked the Board to contact P. Oviedo if they are interested in attending. The Board asked about other types of water supplies, such as what Irvine Ranch Water District (IRWD) is doing, and M. Moore explained the background on IRWD's efforts and that the Department is reviewing alternative approaches, especially in light of the drought. 9. UPDATE ON ELECTRIC SYSTEM ISSUES. J. Lonneker, AGM of Electric Services, shared an update with the Board on the performance of the electric system for the month of March, 2015 after experiencing unusually high temperatures for the season. On Saturday, March 14, 2015, Anaheim was recorded as the hottest location in the country. The electric system peak for the month of March was 398 MW, well short of the all -tune system peak of 596 MW, which would typically occur in the summer. J. Lonneker shared with the Board that the Department co- hosted the 65th Annual 2015 Western Underground Conference in the City of Anaheim, where attendees came from the western region of the nation representing utilities, vendors, manufacturers, and contractors to share new technologies, techniques and processes used for underground electric system infrastructure that can provide cost savings and /or reduce construction time, or improve safety. J. Rivas, Electric Field Superintendent, coordinated the event along with Southern California Edison. J. Lonneker shared the effects resulting from the total solar eclipse, with the Board, which occurred on March 20, 2015, in the European nations which have the highest penetration of solar power production in the world. Regions like Germany and Italy planned far in advance for the expected drop in generation on the scale of 9 Gigawatts (GW) within 1.5 hours (nine gigawatts is the equivalent of 45 Canyon Power Plants (CPP)). Italy's grid operators, which has the world's highest level of solar power penetration, pre - planned to reduce its risks by turning off all of its large -scale solar plants for the day. Germany, on the other hand, planned months ahead to manage the 9 GW swing of power by doubling their reserve capacity of the peaker power plants like Canyon Power Plant (CPP), turning on the plants to manage the 9 GW drop in solar generation, and then shut -off quickly enough to ACTION TAKEN 2015-20 AGENDA ITEM stabilize the grid when the solar production came back online. The lessons from this event show the importance of having diverse generation sources, like natural gas plants, such as CPP, to manage the variability of renewable resources. J. Lonneker shared updates on the Kraemer Combustion Turbine Generator repairs, with the Board. The unit has been off -line since November 2014 and is currently in New Zealand to repair damage discovered during routine inspection. At the facility with the unit disassembled, further damage to the generator shaft was discovered which can be repaired. The return of the unit will be delayed approximately 30 days and expected to be back on -line in May 2015. She then recapped staff's plan to proceed with a generator master agreement, which will expedite the process of competitively bidding for inspection, repair and maintenance of turbine generators by pre - qualified contractors, much like the utility currently has in place for construction and consulting services. A summary of all work and associated costs on the generators would then be included as part of the General Services, Master Agreements and Spot Bid reports provided to the Board. 10. UPDATE ON FINANCE ISSUES. B. Beelner, AGM of Finance and Administrative Services, shared that the Utility recently had their AAA water credit rating and AA- electric credit rating affirmed by both Standard and Poor's and Fitch. He also shared information on the monthly dashboard and mentioned that both electric and water revenue were still trending above budget due to the warm summer and winter weather this fiscal year. 11. UPDATE ON JOINT SERVICES ISSUES. M. Lopez, Acting AGM of Joint Services, shared that the Department was in compliance with the Resource Adequacy Program for April 2015. 12. UPDATE ON ENTERPRISE RISK, COMPLIANCE, AND LEGISLATIVE / REGULATORY AFFAIRS ISSUES. J. Lehman, Chief Risk Officer, stated that all energy related transactions were in compliance with the Wholesale Energy Risk Management (ERM) Program's Quarterly Compliance report, and there were no violations. J. Lehman then briefly discussed several legislative issues, highlighting that the Public Utilities Board (PUB) Legislative Working Group met just prior to the regular PUB meeting, and briefly discussed a set of drought relief bills that accelerate funding from the recently passed Proposition 1, in order to provide funding for certain drought relief related projects, including low interest financing programs for customer water efficiency upgrades and leak repairs, as well as recycled water projects. On the energy side, the Governor's efforts are to further reduce ACTION TAKEN 2015-21 AGENDA ITEM greenhouse gas emissions through increasing the use of renewable energy and energy efficiency measures and by the reduction of fossil fuel usage by the transportation sector. There are ongoing efforts to reach out to authors of these bills to incorporate some of the concepts of the Big 5 utilities' Clean Energy Standard (CES). The CES provides a more cost effective and flexible approach to reach the Governor's goals from what is currently written in the existing bills. It would also provide utilities the flexibility to implement measures which work best for customers rather than be forced to adhere to prescriptive one - size - fits -all requirements on technologies and implementation percentages. 13. AGENDA ITEM(S) FOR THE NEXT PUBLIC UTILITIES BOARD MEETING ON APRIL 22, 2015. • Budget Presentation • Power Generation Update • Drought Contingency Plan • Land Exchange Presentation • Quarterly Status Reports 14. ITEM(S) BY SECRETARY. D. Lee provided the department's organizational chart as requested by the Board. D. Lee stated that electronic tablets have been ordered for those expressing interest in them. D. Lee stated that Councilmember J. Brandman requested at the previous Council meeting, Anaheim's version of a sustainability initiative that identifies goals to reduce greenhouse gases and promote sustainable efforts related to electric and water use. He requested that the Board review and vet the plan and include student feedback prior to bringing forth a recommendation to Council. The Board suggested reviewing what the Association of California Cities — Orange County has compiled on sustainability plans by other municipalities. 15. ITEM(S) BY BOARD MEMBERS. L. Cahill shared that he and S. E. Faessel will be attending the Orange County Water District (OCWD) Citizens Advisory Committee meeting. C. Monaco thanked staff for the information shared at the meeting. D. Wain thanked staff for the various presentations provided during the meeting. S. E. Faessel said that Anaheim Advantage Programs take Anaheim resident's best interests into consideration. ACTION TAKEN 2015-22 AGENDA ITEM J. Machiaverna complimented the work that staff accomplishes with the number of people employed. He further stated that the Department is positioned well for the future. 16. ADJOURNMENT: (REGULAR MEETING ON APRIL 22, 2015, AT 5:00 P.M., IN THE 11 FLOOR LARGE CONFERENCE ROOM, ANAHEIM WEST TOWER, 201 S. ANAHEIM BOULEVARD, ANAHEIM, CALIFORNIA). ACTION TAKEN D. Wain moved to adjourn the Regular Meeting at 7:14 p.m. to the Board's Regular Meeting date of April 22, 2015 at 5:00 p.m. B. Hernandez 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. 43