Public Utilities 2017/07/26CITY OF ANAHEIM
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JULY 26, 2017
The agenda having been posted on Thursday, July 20, 2017, the Regular Meeting of the Public Utilities
Board (Board) was called to order by Vice -Chairperson J. Seymour at 5:00 p.m. on Wednesday, July 26,
2017, in the I Ph Floor Large Conference Room, Anaheim West Tower, 201 S. Anaheim Blvd., Anaheim,
California.
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Public Utilities Department (Department)
Staff Present: D. Lee, L. Quiambao, M. Moore, J. Lonneker, B. Beelner, A. Kott,
G. Bowen, J. Lehman, P. Oviedo, A. Kanzler, M. Seifen, M. Robledo,
R. Hoang, P. Hayes, L. Nugent, R. King
Guest(s) Present: Council Member Stephen Faessel, District 5
AGENDA ITEM
I. PUBLIC COMMENTS.
None.
The Board welcomed Council Member Stephen Faessel to the
meeting. He thanked staff and the Board for welcoming him to
the meeting.
2. APPROVE THE MINUTES OF THE REGULAR PUBLIC
UTILITES BOARD MEETING OF JUNE 28, 20x7. *
There being no public
comments, Vice -
Chairperson J. Seymour
closed the public comments
portion of the meeting.
A. Abdulrahman moved
approval of the Minutes of
the Regular Public Utilities
Board Meeting of June 28,
2017. V. Baroldi seconded
the motion.
MOTION CARRIED: 4-0.
ABSTAINED:0.
ABSENT: 3 (E. Medrano,
R. Nelson, V. Ramirez).
ITEM NO. 01
M. Moore, Assistant General Manager — Water Services, provided
a presentation on the Windy Ridge Water Storage project. The
presentation identified the transition in project objectives when
the Mountain Park Development was cancelled by the
developer. Although the project proceeded with a construction
bid award, the circumstances warranted a termination of
construction, which was approved by City Council. The reservoir
construction will be replaced with several other improvements to
provide reliability to the highest elevation area in Anaheim,
including redundant electrical service and physical improvements
to a pump station.
The Board asked about the nature of improvements to ensure that
reliability is achieved in the area, and M. Moore responded by
providing details on completed improvements, planned projects,
and estimated costs. M. Moore also stated that he provided a tour
to the resident that attended last month's Board meeting to show
the improvements to the pump station and describe planned
improvements.
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M. Robledo, Integrated Resources Manager, provided an
overview on how electricity supply and demand is managed in
California. M. Robledo discussed the make-up of the
Department's Power Supply Portfolio and addressed the recent
newspaper articles about Flex Alerts and oversupply conditions
where other states will take California power to manage electric
grid reliability. M. Robledo also discussed the elements of a
reliable power supply system, including interconnected
generators, reserve capacity, and the balancing of supply
resources and customer demand by the California Independent
System Operator (CAISO).
The Board asked about statewide Flex Alerts and their influence
on market prices. M. Robledo indicated that Flex Alerts are
called during periods when the CAISO forecast of customer
demand predicts a shortage of generating capacity, and customers
are asked to conserve energy. G. Bowen, Assistant General
Manager — Power Supply, added that sometimes the CAISO
forecast is off -target due to weather changes or customer demand
being less than predicted due to conservation. Subsequent to the
Energy Crisis, market controls were put in place to mitigate the
potential for market manipulation by entities such as Enron.
2017-53
5. APPROVAL OF AGREEMENTS AND INSTRUMENTS TO
COMPLETE DIVESTITURE AND THE TRANSFER OF
THE CITY OF ANAHEIM'S (ANAHEIM) OWNERSHIP
INTERESTS IN THE SAN JUAN (SJ) GENERATING
STATION, WHICH INCLUDE. INSTRUMENT OF SALE
AND CONVEYANCE; INSTRUMENT RELINQUISHING
EASEMENT AND LICENSE; EASEMENT AND RIGHT OF
ENTRY; ASSIGNMENT, ASSUMPTION, TERMINATION
AND RELEASE AGREEMENT; TERMINATION OF UNIT
4 PURCHASE AND PARTICIPATION AGREEMENT AND
INTERCONNECTION AGREEMENT; TERMINATION OF
ASSUMPTION AGREEMENT (POLLUTION CONTROL
BOND OPERATION, MAINTENANCE AND INSURANCE
COVENANTS); NEW EXIT DATE AMENDMENT
AMENDING AND RESTATING THE AMENDED AND
RESTATED SJ PROJECT PARTICIPATION
AGREEMENT; AMENDED AND RESTATED
DELEGATION AGREEMENT AND
ACKNOWLEDGEMENT AMONG PARTICIPANTS;
AMENDED AND RESTATED SJ DESIGNATED
REPRESENTATIVE AGREEMENT; TERNIINATION OF
LETTER AGREEMENT FOR THE EXCHANGE OF
ECONOMY ENERGY RELATING TO ANAHEIM'S SHARE
OF UNIT 4 MINIMUM NET GENERATION;
TERNIINATION OF CAPACITY OPTION AND FUNDING
AGREEMENT AND ASSOCIATED PARENTAL
GUARANTY; AND SJ GENERATING STATION
DECOMMISSIONING TRUST AGREEMENT
(SUBSTANTIALLY FINAL FORM), EACH OF WHICH IS
AMONG THE PUBLIC SERVICE COMPANY OF NEW
MEXICO; TUCSON ELECTRIC POWER COMPANY;
SOUTHERN CALIFORNIA PUBLIC POWER
AUTHORITY; TRI-STATE GENERATION AND
TRANSMISSION ASSOCIATION, INC.; M -S -R PUBLIC
POWER AGENCY; THE CITY OF FARMINGTON, NEW
MEXICO; THE INCORPORATED COUNTY OF LOS
ALAMOS, NEW MEXICO; UTAH ASSOCIATED
MUNICIPAL POWER SYSTEMS; PNMR DEVELOPMENT
AND MANAGEMENT CORPORATION; AND ANAHEIM. *
G. Bowen shared with the Board the various remaining
agreements that are required for the divestiture of San Juan
Generating Station at the end of 2017. The Department is
continuing to reduce its reliance on coal resources, and the set of
agreements facilitate exiting the project.
The Board asked about potential replacement supplies, and staff
responded that a recent landfill gas project at Bowerman Landfill
helps to meet compliance requirements, but that the Department is
2017-54
A. Abdulrahman moved
approval of the Remaining
San Juan Generating
Station Divestiture
Instruments and Agreements
Necessary to Finalize
Transfer of Anaheim's
Ownership Interests to the
Remaining Entities. V.
Baroldi seconded the
motion.
MOTION CARRIED: 4-0.
A13STAINED: 0.
SENT: 3 (E. Medrano,
R. Nelson, V. Ramirez).
relatively long in its portfolio and utilizes market purchases for
the balance of resource needs.
6. APPROVAL OF SECOND AMENDMENT WITH
A. Abdulrahman moved
SOUTBERN CALIFORNIA GAS COMPANY TO
approval of the Second
CONDUCT JOINT UTILITY WEATHERIZATION
Amendment with Southern
PROGRAMS FOR INCOME QUALIFIED RESIDENTS. *
California Gas Company to
conduct Joint Utility
G. Bowen presented the Second Amendment to the agreement to
Weatherization Programs for
increase program funding from $600,000 to $1.5 million for the
Income Qualified Residents.
Department's Weatherization Program to serve more income
J. Seymour seconded the
qualified customers in Anaheim in partnership with the Gas
motion.
Company. The expansion of the program is a result of a need for
MOTION CARRIED: 4-0.
such assistance programs that help reduce bills for customers
ABSTAINED: 0.
struggling financially. The partnership with the Gas Company is
ABSENT: 3 (E. Medrano,
a cost-effective method of delivering services and providing
R. Nelson, V. Ramirez).
convenience to participating customers.
FOR I ELECTRICAL
SERVICES. *
This item was pulled by staff in light of recent comments at a City
Council meeting related to similar types of agreements. Staff
requested a deferral to the Board's next regular meeting on
August 23, 2017.
8. APPROVAL OF FISCAL YEAR 2016117 TE -OFF OF V. Baroldi moved approval
UNCOLLECTIBLE UTILITY ACCOUNTS. of the write-off of
Uncollectible Utility
B. Beelner, AGM — Finance and Administration, presented the Accounts for Fiscal Year
Department's annual gross write-off amount, $1.149M, of which 2016117. A. Abdulrahman
the Utility portion of the write-off was $895.5K, to the Board for seconded the motion.
Fiscal Year 2016117. B. Beelner explained that the write-off MOTION CARRIED: 4-0.
amount had decreased —20% from last FY's write-off, and that at STAINED: 0.
0.21% of sales, the write-off was well below the industry standard SENT: 3 (E. Medrano,
of 0.37% .. Nelson, V. Ramirez).
D. Lee commented that the staff report includes many of the
activities, programs, and resources that the Department employs
to help customers that are having difficulty in paying their bills in
order to avoid potential write-offs, such as the Courtesy Call
Program, Monthly Billing option, and Income Qualified
Discounts.
The Board asked a series of questions about the third party
collections agency the Department uses in collection efforts,
specifically what commission rate is paid to the collection agency
(18%), and if they were paid once the debt was collected or if they
purchased the debt from the Department. L. Nugent indicated the
2017-55
collections agency gets paid the commission once the debt is
collected.
M. Moore discussed the benefits of partnering with MWDOC on
mutual programs. As a wholesale water provider, MWDOC
represents the majority of other water retailers in Orange County
and is therefore able to secure lower pricing on services such as
water education to students and consulting services. Another
benefit is that water studies required by the state have common
calculation methods for Orange County water agencies.
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Staff provided an overview of consulting, construction, and
purchases of electrical materials that are procured through
streamlined processes approved by Council. The Board asked
about the number of awards to individual contractors, and staff
indicated those questions would be addressed and brought back
with the General Services Agreements at the next Board meeting
for further discussion and consideration.
J. Lonneker, Assistant General Manager — Electric Services,
updated the Board on the recent outage affecting a large number
of customers in the Los Angeles area on July 10, 2017 due to a
substation transformer fire. The Board was updated on the
circumstances of the transformer fire and then reviewed
Anaheim's maintenance processes to monitor the condition of
Anaheim's substation transformers, contingency planning in the
event of a substation transformer failure, and the need to budget in
the coming fiscal year for a mobile substation transformer to
replace the aging transformer used for emergency events.
J. Lonneker made the Board aware that the City Council approved
the Underground Conversion Program's Five -Year Plan for Fiscal
Years 2017/18 to 2021/22 at the July 25, 2017 meeting. J.
Lonneker indicated to the Board that the public hearing for district
formation of two new underground conversion projects would be
brought forward at a later date.
2017-56
A. Abdulrahman moved
approval
MunicipalCollaboration Agreement
with
District of Orange County
for Water Conservation
Educatio ..
secondedand Mutual Aid Programs
and Services. J. Showalte
the motion.
MOTION CARRIED: I
ABSTAINED:L
ABSENT: nr
Nelson,R. V. Ramirez).
M. Moore indicated that a tour of the key water facilities was
provided for several members of the Board on July 21, 2017, and
a similar tour may be scheduled in the future to interested Board
members. M. Moore mentioned if any Board members are
interested in attending the upcoming Water Policy Dinner in
Garden Grove on Wednesday, August 30, 2017 they should
contact P. Oviedo.
B. Beelner, discussed the monthly dashboard with the Board. B.
Beelner indicated that revenue for Fiscal Year 2017 was 0.7%
higher than budget ($2.9M) with costs conning in below budget by
8.1% ($33.6M) largely due to the unexpected weakness in
wholesale energy prices allowing the Department to purchase
energy at lower than expected prices. He then mentioned that the
Fiscal Year 2017 water revenue was 3.9% ($2.8M) below budget
due to continued conservation coupled with the significant rainfall
received in this winter, however costs for the year were 13.9%
below budget ($9.5M) causing a positive net $6.7M budget
vanance.
G. Bowen discussed the Power Supply Dashboard with the Board.
G. Bowen explained that there was several planned outages in
June resulting in less generation and sales of energy into the
market. He also indicated that market prices continue to remain
relatively low with continued water runoff and low gas prices. G.
Bowen made the Board aware that as a result of the divestiture on
San Juan at the end of 2017, the use of coal in the Power Supply
Portfolio will drop by approximately 8%.
N
J. Lehman, Chief Risk Officer, shared with the Board that state
Legislature passed an extension of the State's Cap and Trade
Program and it was signed into law on Tuesday, July 25 2017.
The allocation of free allowances through the Cap and Trade
Program is financially beneficial for Anaheim customers. J.
Lehman also indicated that a bill, Senate Bill 100, to further
increase the Renewable Portfolio Standard (RPS) was under
consideration, and that staff would continue to focus attention on
it to better ensure that the Department's concerns are addressed.
J. Lehman made the Board aware of the Internal Compliance
Report at their place settings. She indicated that there were two
minor air emission exceedances at the Canyon Power Plant and
2017-57
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D. Lee informed the Board that a new bottled water label was
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V. Baroldi thanked J. Lonneker for the Electric to that was
given.
the different facilities, including the Hidden Canyon Pump
Station.
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meeting was informative.
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A. Abdulrahman moved
approval to adjourn the
Regular Meeting at 7:42
p.m., to the Board's Regular
Meeting date of August 23,
2017 at 5:00 p.m. J.
Showalter seconded the
motion.
MOTION CARRIED: 4-0.
ABSTAINED: 0.
ABSENT: 3 (E. Medrano,
R. Nelson, V. Ramirez).
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.
2017-59