Public Utilities 2017/02/22CITY OF ANAHEIM
PUBLIC UTILITIES BOARD
MINUTES
February 22, 2017
The agenda having been posted on Thursday, February 16, 2017, the Regular Meeting of the Public
Utilities Board (Board) was called to order by Chairperson J. Machiavema at 5:00 p.m. on Wednesday,
February 22, 2017, in the 11'h Floor Large Conference Room, Anaheim West Tower, 201 S. Anaheim
Blvd., Anaheim, California.
Board Members Present: Chairperson J. Machiavema, Vice Chair D. Wain, B. Hernandez,
L. Cahill, A. Abdulrahman
Board Members Absent: E. Medrano
Staff Present: D. Lee, M. Moore, B. Beelner, J. Lonneker, G. Bowen, J. Lehman,
A. Kott, A. Muniz, F. Barvarz, J. McBride, M. Seifen
Guest(s) Present: Sandy Scott -Roberts, Orange County Water District
AGENDA ITEM ACTION TAKEN
1. PUBLIC COMMENTS. There being no public
comments, Chairperson J.
Machiavema closed the
public comments portion of
the meeting.
2. APPROVAL OF THE MINUTES OF THE REGULAR Subject to correction of a
PUBLIC UTILITES BOARD MEETING OF JANUARY 25, grammatical error, B.
2017. * Hernandez moved approval
of the Minutes of the
Regular Public Utilities
Board Meeting of January
25, 2017. A. Abdulrahman
seconded the motion.
MOTION CARRIED: 5-0.
ABSTAINED: 0.
ABSENT: 1 (E. Medrano).
3. PRESENTATION ON THE ORANGE COUNTY WATER
DISTRICT (OCWD) GROUNDWATER REPLENISHMENT
SYSTEM (GWRS) EXPANSION.
S. Scott -Roberts, from Orange County Water District (OCWD),
gave a presentation on the Groundwater Replenishment System.
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S. Scott -Roberts indicated OCWD is starting the final expansion
of the system, which includes modifications at the existing
treatment plant and the Orange County Sanitation District
(OCSD) Treatment Plant 2 in Huntington Beach. The expansion
will improve groundwater reliability with an additional 30 million
gallons of water per day that is treated using advanced
technologies, tested to ensure that federal and state water quality
standards are met, and then eventually percolated into the
groundwater basin.
4. PRESENTATION ON WATER AND ELECTRIC RATES
J. McBride, Strategic Planning Manager, gave a presentation on
the proposed water rate increases, electric rate revisions, and two
regulatory relief initiatives that entail reducing water and electric
customer service fees. J. McBride discussed the Public Utilities
Department (Department) proposed increases for two water rate
components: the Water Commodity Adjustment (WCA) and
Water System Reliability Adjustment (WSRA). J. McBride
explained the proposed WCA increase will recover the rising
costs being billed to the Department by the wholesale water
suppliers. J. McBride explained the proposed WSRA increase
will provide funding for water distribution system improvements.
J. McBride also discussed electric rate modifications that will
reduce the electric portion of customer's bills. The electric rate
decrease will lower customers' energy charges by $0.0040 per
kilowatt hour (kWh) and will save the typical residential customer
approximately $2.00 per month. J. McBride indicated the
Department continues to offer customers competitive rates in
comparison to surrounding utility agencies.
Further, J. McBride explained that the proposed Regulatory Relief
Initiatives to the Department's service fees will provide billing
credits for customers enrolled in automatic bill payment, courtesy
credits for billing errors or missed appointments, and offer
customers the ability to receive after hour's service at an
additional cost.
The Board inquired as to how the proposed electric fee decrease
will impact the Department's revenues. B. Beelner, Assistant
General Manager — Finance & Administration, explained that fee
revenues make up a small portion of the Department's overall
revenues and the fee reductions will not have a material impact to
the Department's financial health. D. Lee, Public Utilities
General Manager, emphasized that this will benefit customers and
reflects the Department's goal to collect only what it costs to
serve customers.
2017-12
5. UPDATE ON FINANCE ISSUES.
D. Lee requested that the update on finance issues be moved up in
the agenda to accommodate B. Beelner having to leave the Board
meeting early to make a presentation on the proposed rate
modifications to a neighborhood community meeting.
B. Beelner provided an update on the monthly dashboard. He
indicated the year to date electric revenue through January 31,
2017 was 4.1% higher than budget ($10.8M) with costs corning in
below budget by 6.3% ($15.2M) causing a year to date net budget
variance of $26M. B. Beelner discussed the fact that this net
positive budget variance is the primary driver for the upcoming
electric rate decrease. B. Beelner then mentioned that year-to-
date water revenue was 8.0% ($3.6M) below budget due to
continued conservation coupled with the recent rainfall, however
costs were 15.4% below budget ($6.2M) causing a positive net
$2.6M budget variance.
6. PRESENTATION ON LIGHT EMITTING DIODE (LED)
STREET LIGHT DEPLOYMENT.
F. Barvarz, Transmission and Distribution Manager, gave a
presentation on the LED Street Light Deployment efforts. F.
Barvarz provided the Board with background information about
street lighting throughout the City of Anaheim (City). F. Barvarz
mentioned the benefits of upgrading street lighting include energy
efficiency, improved street visibility, and better overhead lighting
coverage. In terms of deployment, F. Barvarz outlined the
strategy for (1) transitioning to lower temperature LEDs that have
a software illumination level, (2) utilizing products that meet
roadway standards, (3) prioritizing areas of safety concerns
expressed by residents and verified by Anaheim Police
Department as well as intersections with higher accident rates, (4)
integrating LEDs into capital and maintenance projects, and (5)
providing optionality for customers who express that they prefer
high pressure sodium lighting and do not want LEDs.
The Board inquired about the efficiency comparison between
LEDs and current technology. F. Barvarz indicated that LED
lighting is not only 30% more energy efficient, but also cost
effective because LED lights last longer than high pressure
sodium fixtures.
7. APPROVAL OF ANNUAL ENERGY EFFICIENCY GOALS
CONSISTENT WITH ASSEMBLY BILL (AB) 2021. *
G. Bowen, Assistant General Manager — Power Supply, provided
the Board with an overview of AB 2021 and discussed the
recommendation to approve an increase in the Department's
Annual Energy Efficiency and Demand Reduction Goal from I%
2017-13
L. Cahill moved approval of
Annual Energy Efficiency
Goals consistent with
Assembly Bill (AB) 2021.
B. Hernandez seconded
motion.
MOTION CARRIED: 5-0.
to 1.1%. G. Bowen explained that the Assembly Bill requires the ABSTAINED: 0.
Department to establish a rolling 10 -year energy efficiency and ABSENT: 1 (E. Medrano).
demand reduction goal, and provide regular reports every 4 -years
to the Board, City Council, and the California Energy
Commission (CEC) regarding the progress in meeting the goal.
G. Bowen also explained that compliance with AB 2021 takes
into consideration the likelihood of customers engaging in energy
efficiency activities and also takes into account the cost
effectiveness of the Energy Efficiency measures. To that end,
there are no financial penalties if the Department is unable to
meet its adopted goal.
Lastly, G. Bowen made the Board aware that the Department
expects that AB 2021 will at some point be superseded by Senate
Bill 350 where the target will be even more aggressive over the
next 13 years to 2030. For now, the Department anticipates no
significant increases in expenditures as a result of the new goal in
the near term.
8. APPROVAL OF A COOPERATIVE AGREEMENT WITH
THE ORANGE COUNTY SANITATION DISTRICT (OCSD)
FOR CONSTRUCTION OF WATER FACILITIES IN
CONDUCTION WITH THE STATE COLLEGE
BOULEVARD SEWER PROJECT. *
M. Moore, Assistant General Manager — Water Services, indicated
that OCSD is replacing their trunk sewer pipeline on State College
Boulevard starting from the 91 freeway to Orangewood Avenue.
The Department has planned several pipe replacement projects over
the next several years in the same area. This agreement will
provide a reimbursement agreement with OCSD to design and
construct the waterlines concurrent with their construction project.
The waterline design and construction will be in accordance with
the Department's standards. The Department inspectors will
verify the pipelines are constructed in accordance with State
regulations for drinking water. Constructing the waterlines with
OCSD's project is estimated to save the City approximately
$360,000.
9. DISCUSSION ON SOUTHERN CALIFORNIA PUBLIC
POWER AUTHORITY (SCPPA) EXPENDITURES BI-
ANNUAL REPORT FISCAL YEAR 2016117.
G. Bowen, Assistant General Manager — Power Supply, provided
the Board with a semi-annual update of the Department's
expenditures through Southern California Public Power Authority
(SCPPA). He explained that SCPPA is a joint powers agency
comprised of twelve not-for-profit public power agencies,
including the City of Anaheim that serves approximately two
million customers in Southern California. G. Bowen made the
2017-14
B. Hernandez moved
approval of a cooperative
agreement with OCSD for
construction of water
facilities in conjunction with
the State College Boulevard
Sewer Project. L. Cahill
seconded motion.
MOTION CARRIED: 5-0.
ABSTAINED: 0.
ABSENT: 1 (E. Medrano).
Board aware that the foremost benefit of participating in SCPPA
is the ability to spread projects among multiple agencies in order
to achieve economies of scale to deliver lower costs to customers.
G. Bowen reviewed the expenditures with the Board explaining Staff will include three -
that most of the large expenditures were related to generation, years of expenditures in the
transmission, natural gas, and renewable projects. He also stated next bi-annual update.
that the expenditures were in line with the budgeted amounts
halfway through the fiscal year. D. Lee recommended that staff
include the prior three -years of expenditures so the Board would
be able to see trends associated with SCPPA expenditures.
10. UPDATE ON WATER SYSTEM ISSUES.
M. Moore, Assistant General Manager — Water Services,
indicated that all areas of California have exceeded their annual
precipitation levels and more rainfall is anticipated. M. Moore
mentioned the surface reservoirs throughout the State are filling
up and will be reaching capacity. The local groundwater basin is
still relatively Iow and increased by 5% in the past month due to
substantial rainfall since it does take time for water to percolate
into the groundwater basin.
Lastly, M. Moore further discussed the recent news regarding the
large amount of water being released by the Oroville Dam. M.
Moore indicated the State identified issues with both the main
spillway and emergency spillway. The water releases were within
normal operating ranges, and no flooding is expected from the
dam. The Board asked about local water storage and the potential
for similar issues in Southern California. M. Moore explained
that local dams in southern California are newer and have been
renovated within the past decade.
Staff will provide an update
The Board requested an update on Proposition 1 funding status at on Proposition 1 funding.
a future meeting.
11. UPDATE ON ELECTRIC SYSTEM ISSUES.
J. Lonneker, AGM — Electric Services, provided the Board with a
summary of the performance of the Department's electric system
during the February 17, 2017 storm. J. Lonneker indicated
approximately twelve outages occurred over the course of the
three hour storm period, affecting close to 1,000 customers; most
residents were restored quickly while approximately two hundred
customers experienced a longer duration power outage and were
restored within that three hour period.
J. Lonneker shared that the Department began preparing for this
storm days prior to the event thereby enabling Utility Operations
to staff appropriately so that crews and troubleshooters were on-
site and ready to respond. Additionally, testing and inspections at
2017-15
the electric substations and in the field were performed prior to
the event. The pre -storm preparation enabled fast outage response
and relatively few customers affected as compared to surrounding
cities.
12. UPDATE ON POWER SUPPLY ISSUES,
G. Bowen, provided the Board with an update on the Solar for
Schools Program (Program) stating that five of the seven school
districts have expressed interest in participating in the Program
and that two school districts, Anahiem Union High School
District and Orange Unified School District, have declined to
participate at this time. G. Bowen indicated that school board
approvals are expected to be completed in March with award
recommendations coming to the Board in August.
Furthermore, G. Bowen made the Board aware that Orange
County Department of Eductation and the Department sponsored
a home energy and water survey event as part of Public Power
Week last October which ran until January 2017. Students and
teachers were encouraged to participate in the event and were
entered into a raffle to win an iPad. G. Bowen indicated there
were a total of 1,657 surveys received and the raffle winner was
student M. Baran from Ponderosa Elementary School and the
winning teacher was Ms. Knopes from Loara Elementary School.
G. Bowen explained that the surveys were useful tools which
provided information about efficency of homes in the City and
allowed the Department to identify households that were
interested in a free home utility check-up.
Lastly, G. Bowen discussed the planned Magnolia Power Plant
outage and showed pictures of the power plant gas turbine being
disassembled. G. Bowen explained the outage was routine in
nature and so far there were no major issues for a unit that had
been in operation for nearly 9 -years since its commissioning. G.
Bowen indicated the plant will be back in service towards the end
of March.
13. UPDATE ON ENTERPRISE RISK, COMPLIANCE, AND
LEGISLATIVE & REGULATORY AFFAIRS ISSUES.
J. Lehman, Chief Risk Officer, made the Board aware that the
PUB Legislative Working Group (Group) reviewed and
recommended the 2017 Legislative Guiding Principles
(Principles). These Principles are used to evaluate legislation and
establish the Department's legislative positions. She also
indicated that the Principles will be included in the City's
Legislative Platforms for City Council consideration in March.
J. Lehman then shared with the Board that the Group also
reviewed bills with the potential to impact the Department. J.
2017-16
Lehman indicated that Friday, February 17 was the last day to
formally introduce new State bills, and that over 2,000 were
introduced. Of these, there were several bills to note, including
one that would establish a 100% Renewable Portfolio Standard
(RPS) by 2045 which would likely increase costs if not developed
and regulated in a thoughtful manner, as well as several apparent
place holders for a potential water use surcharge to support State
determined activities.
14. AGENDA ITEM(S) FOR THE PUBLIC UTILITIES BOARD
MEETING ON MARCH 22, 2017.
D. Lee stated the following items are planned for the following
Board meeting:
• Public Hearings — Water and Electric
• Electric Infrastructure Inspection Update
• Valve Maintenance Update
• Utilities Success Indicators
15. ITEMS(S) BY SECRETARY.
D. Lee informed the Board that City Council will transition
towards district -based appointments, with the remaining seats
appointed by a majority of the full City Council members. The
ordinance will likely be introduced in March, with an effective
date 30 days subsequent to the second reading of the ordinance.
D. Lee encouraged current Board members to re -submit their
applications for consideration.
D. Lee informed the Board that a shade tree planting ceremony in
recognition of Earth Day is being scheduled for April, and the
Board would be provided further information prior to the event.
D. Lee provided an update that the Los Angeles Candidate City
for the Olympic Games in 2024 (LA2024) committee is preparing
technical information to be submitted for consideration that will
include the Honda Center, which may host indoor volleyball.
16. ITEM(S) BY BOARD MEMBERS;
A. Abdulrahman said the LED lighting presentation was very
informative, and he thanked staff for the meeting.
L. Cahill thanked staff for the meeting. He appreciated the
presentation regarding the water rate increase and electric rate and
rule modifications and commended staff for putting the customers
first.
B. Hernandez thanked staff for keeping the Board informed and
was pleased with the presentations and the information that was
2017-17
provided.
D. Wain thanked staff for the meeting and highlighted their hard
work and efforts of field crews during the storm.
J. Machiaverna thanked staff for keeping the Board informed of
important issues and events.
17. ADJOURNMENT TO THE (PUBLIC
HEARINGS/REGULAR MEETING ON MARCH 22, 2017,
AT 5:00 P.M., IN THE GORDON HOYT CONFERENCE
CENTER, 2' FLOOR, ANAHEIM WEST TOWER, 201 S.
ANAHEIM BOULEVARD, ANAHEIM, CALIFORNIA).
tf mitted,
U
Dukku Lee
Public Utilities General Manager
B. Hernandez moved
approval to adjourn the
Regular Meeting at 7:41
p.m., to the Board's Public
Hearings/Regular Meeting
date of March 22, 2017 at
5:00 p.m. A. Abdulrahman
seconded motion.
MOTION CARRIED: 5-0.
ABSTAINED: 0.
ABSENT: 1 (E. Medrano).
* 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.
2017- 18