Public Utilities 2017/11/15CITY OF ANAHEIM
PUBLIC UTILITIES BOARD
MINUTES
NOVEMBER 15, 2017
The agenda having been posted on Thursday, November 9, 2017, the Regular Meeting of the Public
Utilities Board (Board) was called to order by Chairperson E. Medrano at 5:00 p.m. on Wednesday,
November 15, 2017, in the 11th Floor Large Conference Room, Anaheim West Tower, 201 S. Anaheim
Blvd., Anaheim, California.
Board Members Present: Chairperson E. Medrano, Vice -Chairperson J. Seymour, A. Abdulrahman,
V. Baroldi, R. Nelson, J. Showalter, V. Ramirez
Board Members Absent: None.
Public Utilities Department
Staff Present: D. Lee, L. Quiambao, M. Moore, J. Lonneker, B. Beelner, A. Kott,
G. Bowen, J. Lehman, P. Oviedo, D. Ballin, M. Seifen, J. Wei,
J. McBride, J. Sanks, Y. Gaytan
Guest(s) Present: None.
AGENDA ITEM ACTION TAKEN
1. PUBLIC COMMENTS.
None.
2. APPROVE THE MINUTES OF THE REGULAR PUBLIC
UTILITIES BOARD MEETING OF OCTOBER 25, 2017.
3. PUBLIC HEARING: PROPOSED MODIFICATIONS TO
RULE NO. 24 OF THE ELECTRICRULES, RATESAND
REGULATIONS TO SUPPORT CIVIC ENGAGEMENT
THROUGH THE INSTALLATION AND REMOVAL OF
TEMPORARY BANNERS ON STREET LIGHT POLES;
AND DETERMINATION THAT THE MODIFICATIONS
TO THIS RULE ARE EXEMPT FROM THE CALIFORNIA
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There being no public
comments, Chairperson E.
Medrano closed the public
comments portion of the
meeting.
A. Abdulrahman moved
approval of the Minutes of
the Regular Public Utilities
Board Meeting of October
25, 2017. J. Seymour
seconded the motion.
MOTION CARRIED: 6-0.
ABSTAINED: 0.
ABSENT: 1 (V. Ramirez).
J. Seymour moved approval
of the proposed
modifications to Rule No.
24 of the Electric Rules,
Rates, and Regulations and
the determination that these
modifications are exempt
ENVIRONMENTAL QUALITY ACT INACCORDANCE
WITH PUBLIC RE SOURCES CODE SECTION 21080(B)(8)
AND SECTIONS 15060(C)(3),15061(B)(3),15273(A), AND
15378(11)(2)(4)(5) OF TITLE 14 OF THE CALIFORNIA
CODE OF REGULATIONS. *
The publichenna ng was called to order by Chairperson E,
Medrano for the purpose of accepting and responding to public
comments on modifications to Rule No.. 24 of the Electric Rtes,
Rules and Regulationsfor the proposed adoption of the recovery
of labor, equipment, and material casts :fern the installation and
removal of temporary street light pole banners and the
administrative update to a provision related to a customer
courtesy credit.
J. Wei, Electric System Planning Manager, gave a presentation on
the modifications to Rule No. 24 as it relates to the display of
temporary banners on street light poles to support civic
engagement. Rule No. 24 would permit the installation and
removal of temporary banners on street light poles owned,
controlled, and maintained by the.public Utilities Department
(Department) in the public right of way. Staffrecommended that,
consistent with al.Vture amendment of the Anaheim Municipal
Code being developed by thy, Planning Department and the City
Attorney's Office, temporary banners be available :for public
messages and events hosted by the City or community events in
which the City provides support consistent with Countil Policy
1 .5. The modifications to Electric Rule No. 24 would allow the
Department to recover the costs of labor, equipment and materials
related to the installation and removal of temporary banners on
the Department's streetlight poles..
The Board inquired about the costs that the applicant would need
to pay if the applicant wanted to use temporary banners as a
marketing tool and inquired if there was a way for the Department
to wave or lower fees because non profits are unable to pay for
banners and their installation. D. Lee indicated that the use of
banners to create awareness of community events is not
mandatory. Instead, it is an additional option available to non
profits, asrequested by Mayor Pro Tem Vanderbilt, for promoting
civic engagement. The Board inquired about other sponsorships
provided by the Department, and D. Lee stated that the
sponsorship is for advertising on utility programs at the event, not
to promote the non...profit, which is the case with temporary
banners., He further stated that some agencies, such as the
Anaheim Union High School Districtjound -ways to print their
own banners, which reduced their costs. Chairperson Eo Medrano
closed the public hearing.
�from CEQA. V.Baroldi
seconded the motion.
MOTION CARRIED. '7-0®
ABSTAINED: 0.
ABSENT- 0.
4. PRESENTATION ON ELECTRIC AND WATER UTILITY
RATES.
B. Beelner, Assistant General Manager — Finance and
Administration, introduced J. McBride, Strategic Planning
Manager, who presented an overview of the Department's water
and electric rate strategies and structures, how the Department's
rates compare to other water and electric agencies, the process the
Department follows when rate revisions are necessary, and a
preview of rate modifications currently under evaluation. J.
McBride made the Board aware of rate action proceedings which
are anticipated in the first quarter of 2018 with an anticipated
public hearing date in March 2018 and, if recommended by the
Board, applicable proposals would be presented to the City
Council for their consideration in April 2018.
J. McBride discussed that various water and electric agencies
approach ratemaking differently. Some propose multi-year rate
changes, while others propose large rate changes and then hold
off for multiple years before proposing another large rate
adjustment. The Department proposes modest rate adjustments
on a frequent but less invasive basis to avoid rate shock to
customers and allow the Department to maintain a lower level of
financial reserves than would otherwise be necessary.
J. McBride explained that the Department's ratemaking approach
focuses on minimizing rate adjustments through operational
efficiency, low staffing levels, and effective financing strategies
augmented by optimal maintenance practices and targeted
infrastructure investments to maintain system reliability. J.
McBride highlighted that legislative and regulatory mandates
have the potential to increase the Department's costs but that
compliance with such requirements is critical. The Department
strives to maintain a competitive rate advantage as compared to
other local utilities.
J. McBride illustrated the components that make up the
Department's water rates. B. Beelner stated that all customers are
billed the same commodity rate and the Department does not
charge tiered water rates. J. McBride indicated that a typical
residential customer's monthly bill in Anaheim is approximately
$20 less than the Orange County average. Additionally, Anaheim
customers do not pay a water tax assessment on their property tax
bills like customers in some cities do.
J. McBride outlined the components that make up the
Department's electric rates. The Department has five (5) standard
rate classifications and nine (9) non-standard rate classifications
that are necessary to facilitate equitable recovery of costs from the
wide range of customers who use energy differently and thereby
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place different levels of demand on the electric system. J.
McBride illustrated that Anaheim residents save approximately
$420 annually on their combined water and electric bill compared
to customers in neighboring cities.
J. McBride explained that base rate modifications are generally
reserved for larger scale rate restructuring while cost recovery
adjustments are used periodically to adjust for increases or
decreases in costs. This approach helps to avoid large
fluctuations to customer bills while at the same time, allowing the
Department to recover costs in a timely manner and therefore
avoid the need to maintain high financial reserves. A third rate
approach is employed when new rates are implemented as
developmental rates. Developmental rates are optional for
customers and are generally used to encourage the adoption of
new technologies.
J. McBride explained that water rate adjustments are subject to
Proposition 218, which requires a public hearing, mailing of
notices of public hearings to all property owners, and a majority
protest process which means that proposed rates become effective
if a majority of customers do not protest. Electric rate
modifications are not subject to Proposition 218 but any base rate
or developmental rate modifications require a public hearing and
publishing of notices in the newspaper as well as City Council
approval for those base rate and developmental rate
modifications.
J. McBride highlighted several rate actions currently being
evaluated by the Department. J. McBride explained that
increasing water supply cost increases by water suppliers and the
need to reduce reliance on debt to fund necessary water
infrastructure investments are driving water rates. The
Department is developing a commercial electric vehicle (EV) rate
to help encourage EV charging in Anaheim as well as update
existing rate schedules to eliminate outdated incentives,
implement new incentives to meet current customer needs, and to
revise outdated formulas contained within the rate schedules.
The Board asked whether the Department would consider a
second tier water rate in order to discourage wasteful water use.
B. Beelner explained that some water agencies have budget -based
rates and are lobbying heavily to justify that their rates are cost -
of -service based.
The Board also asked whether other agencies are changing their
water rates. B. Beelner indicated that other agencies are changing
their rates because they are subject to the same water supply costs
as Anaheim. B. Beelner noted the City of Orange just sent out
notices for a multi-year rate change.
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The Board asked how much of the anticipated water rate increase
would go toward water supply costs and how much toward
capital. B. Beelner indicated that approximately 2/3 would be for
water supply and 1/3 would be for capital. The Board asked how
much the electric rate adjustment would be, and J. McBride
explained that it would be approximately $0.005 / kWh, which
offsets an electric rate reduction that took effect earlier this year.
Lastly, the Board inquired as to how many years over the past ten
years have the rates have been adjusted. B. Beelner indicated that
most years we have had a rate adjustment, consistent with the
Department's approach to gradually adjusting rates to mitigate
impacts to customers.
5. AUTHORIZATION FOR THE ISSUANCE OF NOT -TO-
A. Abdulrahman moved
EXCEED $275 MILLION AGGREGATE PRINCIPAL
approval of the issuance of
AMOUNT OF ANAHEIM HOUSING AND PUBLIC
not -to -exceed $275 million
IMPROVEMENTS AUTHORITY REVENUE REFUNDING
aggregate principal amount
BONDS, SERIES 2017-A AND SERIES 2017-B (ELECTRIC
of Anaheim Housing and
UTILITY DISTRIBUTION SYSTEM IMPROVEMENTS);
Public Improvements
AND AUTHORIZATION FOR THE APPROVAL AND
Authority Revenue
DELIVERY OF UPDATED DISCLOSURE DOCUMENTS
Refunding Bonds, Series
RELATED TO THE REMARKETING OF THE $50
2017-A and 2017-B and
MILLION ELECTRIC UTILITY FLOATING RATE NOTE
approval and delivery of
REVENUE BONDS, SERIES 2015-A. *
updated Disclosure
Documents related to the
B. Beelner, Assistant General Manager - Finance and
Remarketing of the $50
Administration, asked the Board's approval to recommend to City
Million Electric Utility
Council that the Department execute two separate bond
Floating Rate Note Revenue
transactions. The first transaction would refund an amount not -to-
Bonds, Series 2015-A. V.
exceed $275 million of the Electric Utility's currently outstanding
Baroldi seconded the
2011-A, 2012-A, 2016-A, and 2016-B bonds in order to save
motion.
approximately $28 million in future interest payments under
MOTION CARRIED: 7-0.
current market conditions.
ABSTAINED: 0.
ABSENT: 0.
B. Beelner also sought the Board's recommendation to City
Council that the Department remarket the current $50 million
2015-A Floating Rate Note Revenue Bonds. The 2015-A Notes
have a three year term and are due on April 1, 2017. This action
would renew the current notes until 2021 without any change to
the current terms. B. Beelner and the Board discussed the
structure of the two transactions, the appurtenant costs associated
with the transactions, and the proposed timeline.
6. AUTHORIZATION TO APPLY FOR AND ENTER INTO AN J. Seymour moved approval
AGREEMENT WITH THE UNITED STATES of the authorization to apply
DEPARTMENT OF THE INTERIOR BUREAU OF for and enter into an
RECLAMATION FOR GRANT FUNDING FROM TITLE agreement with the United
States Department of the
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XVI WATER RECLAMATION AND REUSE PROGRAM
TO EXPAND THE USE OF RECYCLED WATER. *
M. Moore, Assistant General Manager — Water Services, made
the Board aware of the new recycle water project in south
Anaheim that will provide recycle water to existing and new
customers in the Platinum Triangle and Resort District. The
project was included in a 2012 Feasibility Study funded by the
United States Bureau of Reclamation (Bureau). Since the study
has been completed, the project is eligible for grant funding from
the Bureau up to 25% of the total construction cost. The
Department is currently planning and designing the
project. Construction is anticipated for the summer of 2018. The
Department is seeking outside funding to help reduce the $16
million construction cost. Outside funding sources include a grant
from the State Water Board and funding for the portion of the
project within the Platinum Triangle Community Funding District
bond. If accepted by the Bureau, the grant will fund up to $4
million.
7. APPROVAL OF PUBLIC UTILITIES DEPARTMENT
ORDERS 500 (INTERNAL COMPLIANCE PLAN), 510
(HAZARDOUS MATERIALS SECURITY), AND 511 (SPILL
RESPONSE AND CLEANUP PROCEDURES).
J. Sanks, Environmental Services Manager, provided an overview
of three updated Department Orders (DO): (1) DO 500 — Internal
Compliance Plan, which establishes policies and procedures to
ensure the Department remains compliant with laws, rules, and
regulations by federal, regional, state, and local agencies; (2) DO
510 — Hazardous Materials Security, which establishes procedures
that address the appropriate handling and transportation, and
storage of chemicals used by the electric and water utilities; and
(3) DO 511 — Spill Response and Cleanup Procedures, which
establishes the Department's procedure for responding to
chemical spills and identifies reporting requirements and dispatch
procedures to protect public safety and property. The Board
concurred with the need for procedures to provide necessary
guidance for Department personnel and approved the revised
DOs.
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Interior Bureau of
Reclamation for grant
funding from Title XVI
Water Reclamation and
Reuse Program to expand
the use of Recycled Water.
A. Abdulrahman seconded
the motion.
MOTION CARRIED: 7-0.
ABSTAINED: 0.
ABSENT: 0.
V. Baroldi moved approval
of the adoption of the Public
Utilities Department Orders
500, 510, and 511. A.
Abdulrahman seconded the
motion.
MOTION CARRIED: 7-0.
ABSTAINED: 0.
ABSENT: 0.
8. ADOPT THE PROPOSED PUBLIC UTILITIES BOARD
REGULAR MEETING SCHEDULE FOR THE 2018
CALENDAR YEAR. * *
9. UPDATE ON ELECTRIC SYSTEM ISSUES.
J. Lonneker, Assistant General Manager — Electric Services,
discussed with the Board that the Department hosted a utility
forum this month with Sue Kelly, President and CEO of the
American Public Power Association (APPA), as guest speaker.
J. Lonneker indicated that APPA is a service organization
representing public owned utilities nationwide. The discussion
included topics on utility operations and best practices including
Customer Engagement, Cybersecurity, New Technologies and
Opportunities, and Workforce Development. Department staff
also provided a tour of several electric facilities.
10. UPDATE ON WATER SYSTEM ISSUES.
M. Moore provided an update on Water Services, indicating that
the Lenain Water Treatment plant has been offline due to
equipment repairs. During the shutdown, the maintenance staff
cleaned the filters and tanks; this included removing quagga
mussels from the intake structures of the treatment plant. The
quagga mussels come in through raw water which is from the
Colorado River and are removed in the reservoir and intake
facilities before reaching the water treatment plant filters. Lastly,
M. Moore provided an update about the news media coverage
concerning the Legionella outbreak in Anaheim.
11. UPDATE ON FINANCE ISSUES.
B. Beelner discussed the current plan to expand customer service
hours beginning December 16, 2017. Under this plan, the
Department will increase customer service availability by opening
both the call center and front counter on Saturday mornings from
8:00 AM until 12:00 PM. This plan is projected to reduce call
volume, call wait times, and front counter wait times during the
week by allowing customers to conduct their utility specific
business over these additional Saturday hours.
2017-88
J. Seymour moved approval
of the adoption of the Public
Utilities Board Regular
Meeting schedule for 2018.
A. Abdulrahman seconded
the motion.
MOTION CARRIED: 7-0.
ABSTAINED: 0.
ABSENT: 0.
1 , UPDATE ONPOWER SUPPLY ISSUES.
G. Bowen, Assistant General Manager .....- Power Supply, provided
an update on the Department's power supply portfolio for
October, indicating that the portfolio performance had been
slightly less than the forecast dor October, but performed well
overall for the year to date. G. Bowen noted that Can. yarn Power
]Plant had two minor outages, one for a gas compressor trip
associated with Unit 3 and an arnmonnia valve control problem
with Unit 4. G. Bowen indicated that both had been rectified and
were common issues associated with poorer plants such as this.
Lastly, G. Bowen stated that renewable power was up from last
month with wind from California facilities leading the way while
wind from the'Wyoming facility was lower for the month.
nth.
13. UPDATE ON ENTERPRISE RISK MANAGEMENT.
,l" Lehman, Chief Risk Officer, provided several updates to the
Board, including that the annual railroad safety training provided
for all employees ployees that work on or near railroad right ,..of -ways was
wrapping Dnp and that approximately 80 employees will have
completed the training.
Additionally, J. Lehman mentioned that staff was working to
complete welland restoration work near the Walnut Canyon
Reservoir this week. The work involved removing non native
species near a sensitive wetland area.
14.ITEM(S) BY SECRETARY-
D.
EC TA Ym
D" Lee stated that planned.presentations :loser the following ung Bo d
meeting include revenue protection, and power purchase
agreements dor renewable energy.
He stated that American Public Power Association will be
providing educational training in January, and he would provide
the Board with additional information about an electric system
overview training.
He stated that the Department participated in the City's Veteran's
Day ceremony by providing green LED light bulbs to honor
veterans in Anaheim.
1 v :llT E (S) BY BOARD MEM13ERS:
V. l aroldi stated that he attended the Grange County Family
Justice Center event"
A. Abdulrahnian. requested a future update on the San Onofre
Nuclear Generating Station (SONGS) decommissioning.
Staff" will. prepare a future
presentation on SONGS at a
future hoard meeting.
16. ADJOURNMENT: (REGULAR MEETING ON DECEMBER
13, 2017, AT 5:00 P.M., IN THE 11TH FLOOR LARGE
CONFERENCE ROOM, ANAHEIM WEST TOWER, 201 S.
ANAHEIM BOULEVARD, ANAHEIM, CALIFORNIA).
Respectfully subm tted,
Dukku Lee
Public Utilities General Manager
J. Seymour moved approval
to adjourn the Regular
Meeting at 6:57 p.m., to the
Board's Regular Meeting
date of December 13, 2017
at 5:00 p.m. R. Nelson
seconded the motion.
MOTION CARRIED: 7-0.
ABSTAINED: 0.
ABSENT: 0.
* 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.
2017-90