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Public Utilities 2016/08/24CITY OF ANAHEIM PUBLIC UTILITIES BOARD MINUTES August 24, 2016 The agenda having been posted on Thursday, August 18, 2016, the Regular Meeting of the Public Utilities Board (Board) was called to order by Chairperson J. Machiavema at 5:00 p.m. on Wednesday, August 24, 2016, in the I 1"'Floor Large Conference Room, Anaheim West Tower, 201 S. Anaheim Blvd., Anaheim, California. Board Members Present: Chairperson J. Machiaverna, B. Hernandez, D. Wain, E. Medrano, A. Abdulrahman, L. Cahill Board Members Absent: Vice Chair S.E. Faessei Staff Present: D. Lee, J. Lonneker, M. Moore, G. Bowen, B. Beelner, J. Lehman, A. Kott, L. Quiambao, P. Oviedo, M. Robledo, A. Nguyen, C. Guss Guest(s) Present; Jennifer Vaughn, SoCal Gas AGENDA ITEM ACTION TAKEN 1. PUBLIC COMMENTS. There being no further public comments, Chair J. J. Vaughn, Public Affairs Manager for SoCal Gas, thanked staff for the Machiaverna closed the public partnership in promoting conservation efforts and provided an update comments portion of the on the Aliso Canyon storage facility. She extended an invitation to join meeting. the public hearing held in Diamond Bar, California on Friday, August 26, 2016. 2. APPROVAL OF THE MINUTES OF THE REGULAR PUBLIC E. Medrano moved approval of UTILITIES BOARD MEETING OF JULY 27, 2016. * the Minutes of the Regular Public Utilities Board Meeting of July 27, 2016. B. Hernandez seconded the motion. MOTION CARRIED: 6-0. ABSTAINED: 0. ABSENT: 1 (S.E. Faessel). 3. APPROVAL OF THE ISSUANCE OF NOT TO EXCEED E. Medrano moved approval of $383,000,000 AGGREGRATE PRINCIPAL AMOUNT OF the Issuance of Not to Exceed REVENUE BONDS, SERIES 2016-A (ELECTRIC UTILITY $383,000,000 Aggregate DISTRIBUTION SYSTEM IMPROVEMENTS), REVENUE Principal Amount of Revenue REFUNDING BONDS, SERIES 2016-B (ELECTRIC UTILITY Bonds, Series 2016-A (Electric DISTRIBUTION SYSTEM REFUNDING) AND REVENUE Utility Distribution System REFUNDING BONDS, SERIES 2016-C (ELECTRIC UTILITY Improvements), Revenue DISTRIBUTION SYSTEM REFUNDING) (TAXABLE) OF THE Refunding Bonds, Series 2016 - ANAHEIM HOUSING AND PUBLIC IMPROVEMENTS B (Electric Utility Distribution AUTHORITY. * System Refunding), and Revenue Refunding Bonds, B. Beelner, AGM — Finance and Administration, presented on Agenda Series 2016-C (Electric Utility 2016-50 AGENDA ITEM ACTION TAKEN items three and four regarding two separate fixed rate bond issuances. Distribution System The first issuance being not to exceed $383 million fixed rate bonds Refunding) (Taxable) of the used to fund $100 million in new electric system investments and to Anaheim Housing and Public refund existing debt at lower interest rates, and the second issuance Improvements Authority. L. being not to exceed $45 million fixed rate 30 year bonds to fund the Cahill seconded the motion. construction of necessary water capital investments. MOTION CARRIED: 6-0. ABSTAINED: 0. He discussed how the electric and water bonds ensure that each ABSENT: 1 (S.E. Faessel). generation of customers pays their equitable share of the asset, and motion. prevents rate spikes when large capital assets are constructed. He also MOTION CARRIED: 6-0. discussed how current bond rates continue to be extremely low, which ABSTAINED: 0. make the timing for new bond issuances advantageous for Anaheim ABSENT: 1 (S.E. Faessel). customers. B. Hernandez moved approval He discussed how refunding the existing 2007, 2009, and 2011 electric bonds would generate approximately $80 million in interest savings under proposed electric bond rates. Additionally, the proposed structure of the refinancing of these bonds would shorten the length of the debts by three years allowing the Public Utilities Department (Department) to pay these bonds off faster than would occur otherwise. The Board asked a series of questions related to the financial market, current bond rates, and impact to budget. B. Beelner stated that the bond issuances are included in the current budget. 4. APPROVAL OF THE ISSUANCE OF NOT TO EXCEED D. Wain moved approval of the $45, 000,000 AGGREGRATE PRINCIPAL AMOUNT OF Issuance of Not to Exceed REVENUE BONDS, SERIES 2016-A (WATER SYSTEM $45,000,000 Aggregate PROJECT) OF THE ANAHEIM HOUSING AND PUBLIC Principal Amount of Revenue IMPROVEMENTS AUTHORITY. * Bonds, Series 2016-A (Water System Project) of the Anaheim Housing and Public Improvements Authority. B. Hernandez seconded the motion. MOTION CARRIED: 6-0. ABSTAINED: 0. ABSENT: 1 (S.E. Faessel). 5. PUBLIC ACCESS ELECTRIC VEHICLE CHARGING STATION B. Hernandez moved approval REBATE PROGRAM: APPROVAL OF THE PARTICIPATION of the Participation in the IN THE CALIFORNIA AIR RESOURCES BOARD LOW California Air Resources CARBON FUEL STANDARD PROGRAM; DETERN UNE THAT Board Low Carbon Fuel THE AGREEMENTS, ACTIVITIES, AND UNDERTAKINGS ARE Standard Program; CATEGORICALLY EXEMPT FROM THE CALIFORNIA Determination that the ENVIRONMENTAL QUALITY ACT (CEQA) PURSUANT TO agreements, activities, and SECTIONS 15060(C)(3),15061(B)(3), 15301(B), AND 15378(B)(4) undertakings are categorically OF TITLE 14 OF THE CALIFORNIA CODE OF REGULATIONS exempt from the California (CCR); AND APPROVE THE NON-EXCLUSIVE BROKERAGE Environmental Quality Act AGREEMENTS, ENVIRONMENTAL CREDIT TRANSACTION (CEQA) pursuant to Sections AGREEMENTS, THIRD -PARTY VERIFIER AGREEMENTS, 15060(c)(3), 1506I(b)(3), AND THE PUBLIC ACCESS ELECTRIC VEHICLE CHARGING 15301(b), and 15378(b)(4) of STATION REBATE PROGRAM AGREEMENT. * Title 14 of the California Code of Regulations; and Approval 2016-51 AGENDA ITEM ACTION TAKEN C. Guss, Principal Integrated Resource Planner, presented the Public of the Non -Exclusive Access Electric Vehicle Charging Station Rebate Program (Program) Brokerage Agreements, which aims to expand public access to Electric Vehicle (EV) charging Environmental Credit stations throughout Anaheim. Specifically, the Program seeks to place Transaction Agreements, third - charging stations in public, multi -family, and school locations to party verifier agreements, and remove barriers to electric vehicle ownership, and attract electric the Public Access Electric vehicle owners to Anaheim as a destination city. The majority of Vehicle Charging Station funding for the Program will be derived from the sale of credits the Rebate Program Agreement. Department receives from the State of California's Low Carbon Fuel A. Abdulrahman seconded the Standard (LCFS) Program. LCFS is one of many programs motion. implemented by the California Air Resources Board (GARB) to help MOTION CARRIED: 6-0. California meet its Greenhouse Gas (GHG) emission reductions goals ABSTAINED: 0. by reducing the carbon intensity of transportation fuels. The ABSENT: 1 (S.E. Faessel). Department anticipates that between 20 and 30 EV chargers will be Electric Service Contract No. funded each year through revenue received from sale of the LCFS 16 -DSR -12638 between United credits and that the initial annual funding from the sale of LCFS credits States Department of Energy, will be approximately $150,000. An additional $50,000 from Public Western Area Power Benefit funds will be used for schools and affordable housing locations Administration (Western) and serving income qualified residents. City of Anaheim (Anaheim), 6. PURCHASE OF HYDROELECTRIC POWER FROM THE L. Cahill moved approval of BOULDER CANYON PROJECT: DETERMINE THAT THE the determination that the AGREEMENTS, ACTIVITIES, AND UNDERTAKINGS ARE agreements, activities, and CATEGORICALLY EXEMPT FROM CEQA PURSUANT undertakings are categorically SECTIONS 15060(C)(3),15378(B)(4),15061(B)(3), AND 15301(B) exempt from CEQA pursuant OF TITLE 14 OF THE CCR; AND APPROVE THE ELECTRIC Sections 15060(c)(3), SERVICE CONTRACT NO. 16 -DSR -12638 BETWEEN UNITED 15378(b)(4), 15061(b)(3), and STATES DEPARTMENT OF ENERGY, WESTERN AREA 15301(b) of Title 14 of the POWER ADMINISTRATION (WESTERN) AND CITY OF CCR; and approval of the ANAHEIM (ANAHEIM), WITH CONCURRENCE OF UNITED Electric Service Contract No. STATES DEPARTMENT OF INTERIOR, BUREAU OF 16 -DSR -12638 between United RECLAMATION AND THE AMENDED AND RESTATED States Department of Energy, IMPLEMENTATION AGREEMENT NO.95-PAO-10616 Western Area Power BETWEEN AND AMONG WESTERN, BUREAU OF Administration (Western) and RECLAMATION, AND ALL BOULDER CANYON PROJECT City of Anaheim (Anaheim), ELECTRIC SERVICE CONTRACTORS, INCLUDING with concurrence of United ANAHEIM. States Department of Interior, Bureau of Reclamation and the G. Bowen, AGM — Power Supply, provided an overview of the Amended Amended and Restated and Restated Implementation Agreement and the Electric Service Implementation Agreement Contract for the Boulder Canyon/Hoover Dam Project (Hoover). He No. 95-PAO-10616 between indicated that the agreements renew Anaheim's interest in Hoover for an and among Western, Bureau of additional 50 years to provide energy to existing participants and new Reclamation, and all Boulder participants. Canyon Project electric service contractors, including G. Bowen shared that the Electric Service Contract allocates shares of the Anaheim. E. Medrano Hoover to all participants, defines billing, payment, and rate schedules seconded the motion. and also allows for the energy to move from Hoover Dam to Anaheim. MOTION CARRIED: 6-0. The second was the Implementation Agreement which defines roles and ABSTAINED: 0. responsibilities for the Project budget, committee representation, financial ABSENT: 1 (S.E. Faessel). obligations, and related matters such as management of the Visitors Center that support public access as well as the Multi -Species Conservation Program. 2016-52 AGENDA ITEM The Board commented on the relative low cost of Hoover, and G. Bowen explained that it is based on the cost of service. Hoover also has other advantages including flexible operations and zero emissions. 7. APPROVAL OF THE MEMORANDUM OF UNDERSTANDING BETWEEN THE SANTA ANA WATERSHED PROJECT AUTHORITY AND THE CITY OF ANAHEIM TO PROVIDE INCOME QUALIFIED RESIDENTS WITH TURF REPLACEMENT GRANTS.* M. Moore, AGM - Water Services, shared that the Department is applying for a State grant to allocate funds which allows up to 42 income -qualified Anaheim homeowners to replace their front yard turf with new drought tolerant landscaping at no cost to the homeowners. The grant program is funded by the California Department of Water Resources and will be administered by contractors through the Santa Ana Watershed Protection Authority, and was made possible due in part to the Orange County Water District. The Department would provide up to $65,000 as match funds to the $97,000 grant, and assist in the outreach and selection of qualifying projects. The Board asked a series of questions regarding homeowner eligibility, possibility of expansion of the grant program, and types of qualifying projects. Staff will continue to look for similar grant opportunities in the future. 8. DISCUSSION ON THE UTILITIES SUCCESS INDICATORS. D. Lee, Public Utilities General Manager, provided an update on the Department's Success Indicators. The document is updated semi- annually and posted on the Internet after review by the Board. It highlights key metrics that relate to customer feedback, reliability of service, and other indicators of the Department's operational performance. It also includes metrics related to the financial health of the organization including days of cash available, credit ratings, and effective budgeting. 9. UPDATE ON WATER SYSTEM ISSUES. M. Moore shared that an email was sent on August 11, 2016 to the Board members to make them aware of local media reports of blue- green algae in regional water reservoirs. M. Moore explained that the City's reservoirs have no sign of the algae and staff is ready with a mitigation plan in case the algae reaches the Walnut Canyon Reservoir. He reminded the Board that the treatment plant would mitigate any algae before any water entered the water distribution system. The City is replacing an old groundwater well on Ninth Street south of Ball Road. The well has been drilled and the contractor is installing pipe 1200 -feet below the surface for the new well. The deeper well will draw water from a cleaner part of the aquifer and provide higher water production capacity. Some of the work is 24 hours a day; sound curtains help reduce light and noise impacts to the local community. 2016-53 ACTION TAKEN E. Medrano moved approval of the Memorandum of Understanding between the Santa. Ana Watershed Project Authority and the City of Anaheim to provide income qualified residents with turf replacement grants. B. Hernandez seconded the motion. MOTION CARRIED: 6-0. ABSTAINED: 0. ABSENT: 1 (S.E. Faessel). AGENDA ITEM ACTION TAKEN The water supply outlook this summer continues to improve from last year. The local groundwater basin is recharging more water this summer and groundwater levels are improving. Metropolitan Water District continues to import a large amount of water from northern California and the Colorado River. The excess water is being stored in Diamond Valley Lake, which is now about 2/3 full. The Huntington Beach Desalination Project is being delayed due to the requirement to obtain a second permit prior to construction. An update on the project was scheduled for Fall 2016; however, the presentation will be re -scheduled until there are new developments in the project. 10. UPDATE ON ELECTRIC SYSTEM ISSUES. J. Lonneker, AGM — Electric Services, made the Board aware that the power outage on the evening of August 3, 2016 that affected customers in the Anaheim Resort was due to an animal contacting an energized part at a substation. Electric Operations is evaluating methods to reduce this type of exposure in the future. 11. UPDATE ON FINANCE ISSUES. B. Beelner discussed the monthly dashboard and mentioned that due to the continued warm weather for month of July, electric revenue was approximately 2.6% ($ LI M) with costs also below budget by 11.6% ($4.4M). He then mentioned that he expected an uptick in August revenue due to a lag in the bi-monthly billing cycles from the warm June. He then mentioned that water revenue was 12.7% ($800k) below budget due to continued conservation, however costs were 27.3% below budget ($1.5M) causing a positive net budget variance. 12. UPDATE ON POWER SUPPLY ISSUES. G. Bowen shared the Department's power supply chart requested by the Board at the previous meeting. G. Bowen walked the Board through each resource in the Department's portfolio highlighting the average cost for renewable versus conventional energy. G. Bowen provided an update on the annual Power Content Label that will be mailed out to all Anaheim customers in September. He highlighted that the energy being supplied to customers contained an increase in renewable energy from 27% in 2014 to 33% in 2015 and that coal decreased from 41% in 2014 to 37% in 2015. Lastly, G. Bowen is planning a tour of the San Gorgonio Wind Farm during the Fall and Spring time frame. He will provide dates to the Board once plans are further along. 13. UPDATE ON ENTERPRISE RISK, COMPLIANCE, AND LEGISLATIVE & REGULATORY AFFAIRS ISSUES. J. Lehman, Chief Risk Officer, provided an update on the transmission grid regionalization effort to expand the footprint of the California Independent System Operator (CAISO) which was mandated as part of 2016-54 AGENDA ITEM ACTION TAKEN SB 350 that passed last year. She stated that these efforts have been ongoing and have been on the fast track, as the law mandates that by the end of 2017 the Governor will provide the legislature with studies to support the effort along with the new bylaws of the regional organization. However, because of the complexity of the issues remaining, the Legislature decided that there would be no legislation this session, but that efforts to develop legislation would continue in the Fall with legislation expected in early 2016. She mentioned to the Board that the PUB Legislative Working Group had met prior to the Board meeting and reviewed the remaining bills with the potential to impact utility operations. Specifically, she spoke regarding two bills that would continue the greenhouse gas emission reduction efforts that were significantly amended last Friday and were moving quickly through the legislature without the authors accepting any amendments despite many parties' efforts. She pointed out that the bills were barely passing on a majority votes, and didn't have the super majority required to quell the current and future Proposition 26 related issues being raised that certain components of the State's Cap and Trade program may be an illegal tax. She invited the Board to the Department's emergency response planning training drill. The format for the drill will be different in that it would be a classroom style format to help reinforce the fundamentals of notifications and communication during an emergency, documentation requirements, and staffing considerations. 14. AGENDA ITEM(S) FOR THE PUBLIC UTILITIES BOARD MEETING ON SEPTEMBER 28, 2016. D. Lee indicated the following items are planned for the next Board meeting: • Cap and Trade Program Update • Rule Modifications to Electric and Water Rules • School Education & Water Resource Programs Presentation • Property Assessed Clean Energy Program Agreement 15. ITEM(S) BY SECRETARY. D. Lee stated that the City Manager would be recommending Rudy Emami as the new Public Works Director. He also stated that David Wright was named as the new General Manager of Los Angeles Department of Water and Power. In response to a request for training on power resources, the Department will prepare a training and overview early next year for the Board. Finally, he showed photographs of new water conservation gardens at Lenain Treatment Plant developed by Life Scout Carl Joseph (CJ) Writer from Anaheim Hills Troop 538. Several Board members were on hand to recognize CJ Writer's efforts during a dedication event. 2016-55 ADEN DAITE M ACTION TAKEN A. Abdulrahman thanked staff for the presentations given at the meeting. D. Wain shared that the presentations provided at the meeting were informative. He attended the dedication event at Lenain and was impressed with the program. E. Medrano stated that he appreciated the Utilities Success Indicators being publicly available, and commended staff on the performance shown. He then mentioned that the new water conservation program for income qualified customers will add value to the City and makes a small part of Anaheim more beautiful. 611ocommilaM- meeting. B. Hernandez stated that he was impressed by CJ Writer's achievement and by the turnout at the new water conservation garden at Lenain Treatment Plant; he encouraged staff and the Board to visit the beautiful garden. J. Machiaverna thanked staff for the informative meeting and reiterated his appreciation for the customer service he received in regards to researching how electric and water services are metered at Boys and Girls Club. 17. ADJOURNMENT: (REGULAR MEETING ON SEPTEMBER 28, B. Hernandez moved approval 2016, AT 5:00 P.M., IN THE 11' FLOOR LARGE CONFERENCE to adjourn the Regular Meeting ROOM, ANAHEIM WEST TOWER, 201 S. ANAHEIM at 6:48 p.m., to the Board's BOULEVARD, ANAHEIM, CALIFORNIA). Regular Meeting date of September 28, 2016 at 5:00 p.m. E. Medrano seconded motion. MOTION CARRIED: 6-0. ABSTAINED: 0. ABSENT: I (S.E. Faessel). misted, Dukku Lee Public Utilities General Manager 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.