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Public Utilities 2015/06/24CITY OF ANAHEIM PUBLIC UTILITIES BOARD MINUTES June 24, 2015 The agenda having been posted on Thursday, June 18, 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, June 24, 2015, in the 11 fl' Floor Large Conference Room, Anaheim West Tower, 201 S. Anaheim Blvd., Anaheim, California. Board Members Present: Chair J. Machiaverna, Vice Chair D. Singer, S.E. Faessel, B. Hernandez, D. Wain Board Members Absent: L. Cahill Staff Present: D. Lee, B. Beelner, J. Lonneker, M. Moore, G. Bowen, J. Lehman, D. Ballin, L. Quiambao, P. Oviedo, M. Seifen, F. Barvarz, M. Lopez, D. Cotton, C. Guss, C. Thompson, J. McBride, T. Bass Guest(s) Present- Steven Faessel, Anaheim Resident and Metropolitan Water District Director None MJJ I N 111 06'93oi1ffl tj 013 104 09 N 1 J U05 9WftAPAI F. Barvarz, Transmission and Distribution Manager, presented the Fiscal Year 2015/16 Underground Conversion Five -Year Plan (Plan) for the Public Utilities Board's (Board) consideration. The Plan includes updates on projects completed during FY 2014/15 and those in various stages of construction, design and planning. The Plan also included the addition of one new project on Orangewood, between Lewis and Harbor. 2015-32 " a 143-� There being no public comments, Chair J. Machiaverna closed the public comments portion of the meeting. D. Singer moved approval of the Proposed Underground Conversion Five -Year Plan for Fiscal Years 2015/16 to 2019/20. S.E. Faessel seconded the motion. MOTION CARRIED: 5-0. ABSTAINED: 0. ABSENT: 1 (L. Cahill). AGENDA ITEM 4. PRESENTATION AND APPROVAL OF THE UTILITY GREENHOUSE GAS REDUCTION PLAN. * G. Bowen, AGM of Power Supply, presented the Public Utilities Department's (Department) Greenhouse Gas Reduction Plan (Plan) to the Board. He discussed the Plan's key measures; including reducing emissions from the Department's coal fleet, increasing renewable investments, reducing emissions through water conservation, and energy efficiency measures. G. Bowen also informed the Board that the Plan incorporated student feedback from several high schools in Anaheim. 5. RECOMMEND DETERMINATION THAT SAN JUAN GENERATION STATION (SJGS) AGREEMENTS AND THE ACTIVITIES AND UNDERTAKINGS REFERENCED THEREIN ARE EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT UNDER SECTIONS 15060(c)(3) AND 15378(b)(4) OF TITLE 14 OF THE CALIFORNIA CODE OF REGULATIONS; APPROVAL OF AGREEMENTS AND ACTIONS TO FACILITATE THE CITY OF ANAHEIM'S (ANAHEIM) DIVESTURE OF ITS OWNERSHIP INTEREST IN THE SJGS INCLUDING THE SAN JUAN PROJECT RESTRUCTURING AGREEMENT, AMENDED AND RESTATED MINE RECLAMATION AND TRUST FUNDS AGREEMENT, AND THE SAN JUAN DECOMMISSIONING AND TRUST FUNDS AGREEMENT EACH OF WHICH IS AMONG THE PUBLIC SERVICE COMPANY OF NEW MEXICO (PNM), TUCSON ELECTRIC POWER COMPANY (TEP), SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY (SCPPA), TRI-STATE GENERATION AND TRANSMISSION ASSOCIATION, INC. (TRI-STATE), M -S -R PUBLIC POWER AGENCY (A JOINT POWER AUTHORITY AMONG THE CITIES OF MODESTO, SANTA CLARA AND REDDING), THE CITY OF FARMINGTON, NEW MEXICO (FARMINGTON), THE INCORPORATED COUNTY OF LOS ALAMOS, NEW MEXICO (LOS ALAMOS), UTAH ASSOCIATED MUNICIPAL POWER SYSTEMS (UAMPS), PNMR DEVELOPMENT AND MANAGEMENT CORPORATION (PNMR-D) AND ANAHEIM; AND AUTHORIZE AND DIRECT THE PUBLIC UTILITES GENERAL MANAGER OR DESIGNEES TO NEGOTIATE AND FINALIZE THE SAN JUAN POWER PURCHASE AGREEMENT RESTRUCTURING AMENDMENT, SAN JUAN POWER PURCHASE AGREEMENT EXIT AMENDMENT, AND A SAN JUAN DECOMMISSIONING TRUST FUND AGREEMENT. * G. Bowen, AGM of Power Supply, briefed the Board on the San Juan Restructuring Agreements for their recommendation. He informed the Board that there were three major agreements that the Department was seeking their recommendation on, to be forwarded to City Council. The first was the Restructuring Agreement, which would be the main source which is to re -assign ownership rights in the project. 2015-33 ACTION TAKEN B. Hernandez moved approval of the Utility Greenhouse Gas Reduction Plan. D. Singer seconded the motion. MOTION CARRIED: 5-0. ABSTAINED: 0. ABSENT: I (L. Cahill). D. Wain moved approval of Recoinmend Determination that San Juan Generation Station (SJGS) agreements and the activities and undertakings referenced therein are exempt from the California Environmental Quality Act under Sections 15060(c)(3) and 15378 (b)(4) of Title 14 of the California Code of Regulations; and approval of the Restructuring Agreements, Decommissioning Agreement, and actions to facilitate the City's divesture of its ownership interest in SJGS as further set forth in the recommendation section of the staff report. D. Singer seconded that motion. MOTION CARRIED: 5-0. ABSTAINED: 0. ABSENT: 1 (L. Cahill). The second was the Mine Reclamation Agreement & Trust Funds Agreement, which set aside funds for the reclamation of the coal mines once they have been exhausted. The third was the Decommissioning Agreement, which assigns decommissioning costs to Anaheim on a sliding scale and also sets up a trust fund for those costs to be used in the future when the plant is decommissioned. The agreements and trusts facilitate Anaheim's divestiture in San Juan, which is a coal facility in New Mexico, and the Department would continue to evaluate renewable projects that re in-state for replacement power. 99.11417111 OKI] a 1:1 Daily IT.111 101 12W M41" 11T.110 I up 01 oil] IN M. Lopez, Business Information Systems Manager, provided an update on the Department's Program Procedures for Customer Information Security Program (CIS) to the Board. He briefly explained that the Fair and Accurate Credit Transactions Act (FACT Act), requires the Department to periodically review and report any changes in the FACT Act or the Program itself, as well as report any actual theft of customer credit information. M. Lopez also shared that there were a few changes to the Program that ultimately need approval by City Council. He explained that the Program has been updated to reflect the recent implementation of the new CIS, which features improved security enhancements. Additionally, he noted that the Program was updated to reflect a change in the reporting process. Specifically, that future routine program reports will now be submitted to the Board each year. M. Lopez continued by sharing that if there were a credible threat or actual theft of customer credit information, the Department will notify City Council, the Board, and the appropriate law enforcement agencies. He concluded by noting that there were no threats or actual theft to report. 7. PRESENTATION AND DISCUSSION OF THE JULY 2015 ELECTRIC RATE HEARING PROCESS AND PROPOSED MODIFICATIONS TO THE ELECTRIC RATES, RULES AN.V MEGLT_A_,TIONS. M B, Beelner, AGM of Finance and Administration, introduced J. McBride, Strategic Planning Manager, who shared a presentation with the Board providing an overview of the electric rate hearing process, an overview xf electric rnte changes to the Department's Electric Rates, Rules and Regulations (ERR&R). J, McBride shared that a rate hearing, related to the proposed rate changes, is scheduled for July 22, 2015 at 5:00 p.m. in the Anaheim West Tower, Eleventh Floor Large Conference Room, and a bearing notice will be published on four separate occasions yrior to the scheduled hearing date. He shared that documentation related to the hearing will be provided to the Board and made available to the general pub] ic on July 10, 2015. WITMEW I; w�17 t of the updated program Procedures for Customer Information Secu _I 9 0 with the FACT Act. S.E. Faessel seconded the motion. MOTION CARRIED: 5-0. ABSTAINED: 0. ABSENT: I (L. Cahill). AGENDAITEM M 7.mffmb�m_ rtr -. - - - 1) - I "I 1 0 1 ano presentea a rate restructure plan that will properly recover structural costs through decreases in the Power Cost Adjustment (PCA) and Environmental Mitigation Adjustment (EMA) and corresponding increases to the base rates. J. McBride also presented several other plans: the first plan is to increase the basic lifeline allowance for residential customers from 270 kWh per month to 300 kWh per month in order to provide a greater portion of residential customers' energy needs at the lowest rate; the second plan is to extend the energy discount program to income -qualified military veterans and the third plan will remove an outdated incentive for electric water heaters. Lastly, J. McBride proposed the consolidation of three street lighting rates and one outdoor lighting rate into a single rate in order to accommodate the adoption of newer lighting technologies. the new energy discount. Staff explained that qualifications for the program are included in Rule 26 of the ERR&R, which specifies an annual household income level of 80% or less of the Orange County median, according to the annual Housing and Urban Development Section 8 income guidelines. Specific income thresholds are dependent on the number of occupants in the household. PINA I the Board, the Department would seek City Council approval on August 18, 2015, with a September 1, 2015, effective date, if approved. C. Guss, Principal Integrated Resources Planner, shared the key findings of the California Independent System Operator (CAISO) 2015 assessment of resources and demand and Anaheim's local analysis and contingency planning to prepare for peak summer conditions. He shared that there are sufficient power supplies available, even with the reduction in hydro power due to drought, and Anaheim is fully resourced to meet local needs. For its summer assessment, the CAISO considers several factors: weather forecasts, available Sencrati-on-planned outa e f energy imports, load reduction programs, and projected customer demand. C. Guss shared that any regional emergencies would most likely be caused by a loss of generation or transmission, wildfire or natural disaster or a prolonged heat wave, The CAISO will be the agency responsible for determining if load shedding is required to prevent a wide curtail firrn load may result in severe penalties. He shared that the CAJSO will alert its participants to the severity of emergencies using staged notifications: Stage I — reserves fall below 7Stage 2 — reser-ves fall below 5% and Stage 3 — reserves fall below 3%. The latter would require rotating interruptions, as determined by the CAISO. 2015-35 9. PRESENTATION ON THE CITY OF ANAHEIM'S PROJECTS WITH SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY (SCPPA). C. e Thompson, Principal Integrated Resources Planner, presented th Board with an overview of the Southern California Public Power Authority (SCPPA) and the benefits associated with Department's participation in SCPPA. The major benefits include the economics scale for nower resource DrQ- iects and pm_grams where small and mi sized utilities are able to share in the costs of a resource or service. W1113 I I LONONT06) 03VII 14 IK4 0 KAN IMB IM Itilla" 917,V411 DKOZWAV.111 I M 111kil"i ITi.-ITI-00-r-e,-77CTI-ng-7KUfTf-OT I I -are-rYe-rvices, provided an up a ate on thE May water usage and conservation efforts. The May water usage was 25% less than the demand for May 2013. The reduction in demand is partly due to cooler weather and water conservation efforts, Department staff has implemented a diverse outreach plan that includes c mmunit mei . ,-w 1-nr�-A-Nrlpv, 9 1 to enforce the conservation messaae and mari water restrictio,-tis. The Walnut Canyon Reservoir slope drain started discharging larger than normal flows in early May, Underwater inspections identified the location of the area requiring maintenance, and the water level is being lowered to perform the repairs. The reservoir water level will the Board requested signs to be posted around the reservoir trail. J. Lonneker, AGM of Electric Services, shared with the Board the additional measures taken by both the Electric and Water Divisions holiday. She stated that additional field personnel are available and gatherings. B. Beelner, AGM of Finance and Administration, discussed the upcoming bond financing and how increasing interest rates were im actini th transaction. B. Beelner discusied h1w ic-Tvi - I i - A fil 181gly Islu'ls!LgRaiKill AGENDAITEM mvl�� due to the rising rates; however, he anticipated that the Department would refund approximately $75 million in it with projected savings of $8 million in future debt service payments. The Board asked how the situation in Greece could potentially affect the 14 cogiia buid tranoctiiii, wd �ie me.Ttioneg that a Ureek situation wouic maice fewer turopean investments in favor of the safer U.S. Bond market. B. Beelner then discussed the monthly dashboard, He specifically low r#=-*IMTP7 Wy 0 Amendatory Power Sales Contract for the Intermountain Power Project (IPP Agreement), indicating that California Environmental Quality Act (CEQA) evaluation was done to determine if there are any potential environmental impacts related to the activities authorized by the [PP. He informed the Board that the IPP Agreement would be presented to City Council in July 2015, for a CEQA deten-nination, and that the Depariment was still on track to exit the facility in 2027 as planned. G. Bowen also provided an update on the Department's Renewable Power Purchase Agreement with Anaheim Energy, sharing information on the two changes to the agreement - a site change and revised construction schedule, which required the DeDartment to tak of this nature are to be expected as this was one of the first faciliti es of its type in the North America. Mrsam I LED lighting and controls throughout their warehouses, reducing lighting energy consumption by over 401. . G. Bowen extended an invitation to the Board to visit the CAISO site in October to see how the regional grid is managed. More information will be provided to the Board. X" NI WILIV I UA DFA 1114 DIVi NJ WIN K.0i [ VoWl"1111 11,141.12 J. Lehman, Chief &isk *fficer, provided the Board with an update on the status of State legislative activities and the quarterly status of the energy risk management program. She reported that the Legislative M ills remaining for this legislative session. She thanked D, Wain, B. Hernandez, and J. Machiavema for their participation and input on Legislative Working Group matters. 9491WA budget, a number of budget "trailer" bills were signed by the Governor, including one that will help address the drought, State Bill 88 (SB 88). This bill includes provisions that streamline certain CEQA requirements, make water diversions more difficult, create a separate fund for state fines called the "Water Rights Fund" that can be appropriated by the legislature for conservation activities, and $ 1 '000 to $10,000. On the electric side, efforts are still on-going to address the Governor's 3x5O plan (Big 5). The efforts by the Big 5 utilities basically failed, and on-going meetings have been occur -ring to craft a back-up strategy. She stated that the Department has played an integral role in the new process; however, it was likely the Department will need to take an "Oppose unless Amended" position on the bills next week, depending ikynrvn_h_rw6�'�, I.W,,wkgrs are to amend language, in order to get the authors to work with the Department. J. Lehman shared that on June 3rd, the Department was notified by the CAISO that it had been selected for a random "verification" of its Energy Risk Management Program and Policies to verify that the program meets the Federal Energy Regulatory Commission (FERC) and CAISO tariff requirements. These requirements cover all aspects of energy risk management including capitalization, training, risk practices, and reporting. She reported that after their review, the CATSO confirmed that the Energy Risk Management Program and Policies met all the requirements. their packet, and shared that 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 identified and appropriately managed. She reported that all transactions were in compliance with the ERM program and there were no violp4mmc. �INIMYII Ili NMI I Olaf I lawsloffill) • Quarterly Status Reports and Spot Bid Awards • Electric Rate Hearing * • School Energy and Water Education Program • FY 2014/15 Write -Off of Uncollectible Utility Accounts • Bowerman Landfill Gas Facility SB 1368 Filing * FM 16. ITEM(S) BY SECRETARY. - 177t — Wl"Jyil int - .• Department's efforts to distribute water conservation information, residents are expressing concern about the lawns turning brown throughout their neighborhoods. S. E. Faessel thanked staff for the Save Water Expo and the informative presentations. She also shared that her neighbor asked I � about ,positive recounition ftorn thtfdt-=_(r.ardinfy her efforts in water conservation. Staff indicated that there is an on-line Water Pledge available for customers who wish to share their conservation efforts and receive a free water savings kit. 11 PX" Department's injured employee. He also inquired about the 1•ereentage of water reduction that has been conserved. 17SM TMnareo concerns on ine arou—gM—,—an—U inalcatea-Mat aff 77y ­ employees should be familiar with the City's actions, Staff indicated that they will continue to work with other departments on providing drought information. 111!1, Water Expo. Verw,,r wri-miumm7n AT 5:00 P.M., IN THE 11TH FLOOR LARGE CONFERENCE ROOM, ANAHEIM WEST TOWER, 201 S. ANAHEIM BOULEVARD, ANAHEIM, CALIFORNIA). Dukku Lee Public Utilities General Manager ET -410 10►z Staff will review outreach efforts in order to disserninavo drought infon-nation. Information on the Water ers an card to the employee on the Board's behalf. B. Hernandez moved approval at 8: 13 p.m. to the Board's Regular Meeting date of July 22, 2015 at 5:00 p.m. D. Singer seconded the motion, MOTION CARRIED: 5-0. ABSTAINED: 0. ABSENT: 1 (L. Cahifl). Indicates item(s) that wilt 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 inforTnational purposes.