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Public Utilities 2017/12/13CITY OF ANAHEIM PUBLIC UTILITIES BOARD MINUTES DECEMBER 13, 2017 The agenda having been posted on Friday, December 8, 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, December 13, 2017, in the l 1ch Floor Large Conference Room, Anaheim West Tower, 201 S. Anaheim Blvd., Anaheim, California. Board Members Present: Vice -Chairperson J. Seymour, A. Abdulrahman, V. Baroldi, R. Nelson, J. Showalter, V. Ramirez Board Members Absent: Chairperson E. Medrano Public Utilities Department Staff Present: D. Lee, L. Quiambao, M. Moore, J. Lonneker, R. Dowell, A. Kott, G. Bowen, J. Lehman, P. Oviedo, D. Ballin, P. Hayes, L. Nugent, C. Dalton, C. Guss, M. Brownrigg, A. Kanzler Guest(s) Present: Council Member Stephen Faessel, District 5; Policy Aide, Amanda Edinger AGENDA ITEM 1. 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 UTILITIES BOARD MEETING OF NOVEMBER 15, 2017. 3. PRESENTATION ON REVENUE PROTECTION. C. Dalton, Revenue Protection Coordinator, gave a presentation on the Public Utilities Department (Department) Revenue Protection division's efforts to identify and prevent theft of services or tampering with utility equipment. C. Dalton provided an overview, ACTION TAKEN 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 November 15, 2017. V. Baroldi seconded the motion. MOTION CARRIED: 6-0. ABSTAINED: 0. ABSENT: 1 (Chairperson E. Medrano). 2017-91 ITEM NO. 01 the financial impact of diversion to other customers, where diversion leads come from,, and the process for investigating those leads. In Fiscal Year 2016/17, over 5,600 inspections were conducted, and the resulting activities to prevent diversion is projected to save ratepayers over $4.2 million in lost revenue. C. Dalton presented the Board with examples of diversions that the Department discovered. The Board asked questions regarding the various investigative methods, processes, and procedures of an investigation and what steps the Department takes to recover revenue from those that divert power and water. The Board further asked about identification of staff members and vehicles in light of the potential for fraud, and staff responded that unmarked vehicles are necessary during investigations. 4. PRESENTATION AND APPROVAL OF A FIRST V. Baroldi moved approval of AMENDMENT TO MEMORANDUM OF UNDERSTANDING an amendment to WITH SANTA ANA WATERSHED PROJECT AUTHORITY Memorandum of TO PROVIDE ADDITIONAL TURF REMOVAL GRANTS TO Understanding with Santa INCOME -QUALIFIED CUSTOMERS. * Ana Watershed Project SOLAR LICENSE AGREEMENTS WITH ANAHEIM Authority for Turf Removal M. Moore, Assistant General Manager — Water Services, introduced Grants. A. Abdulrahman A. Kanzler, Resource Program Specialist II, who gave a presentation seconded the motion. on the Department's Turf Removal Program (Program) for income MOTION CARRIED: 6-0. qualified customers. He stated that this is the first water conservation ABSTAINED: 0. Program for income qualified customers in Orange County, and ABSENT: 1 (Chairperson provided examples of individuals who have benefitted from the turf E. Medrano). replacement into drought -tolerant landscaping. To date, 42 property owners have participated in the Program, resulting in 1.4 million gallons of potable water saved each year, and helping those residents to save $4,500 collectively on their water bills. The Board asked where the information for disadvantaged communities was acquired. A. Kanzler stated that the information was obtained primarily from the State of California's demographic research (CalEnviroscreen). A. Kanzler stated that there is an opportunity to expand the Program and seek an additional $60,000 in grants that would allow 26 more properties to participate. The Board asked what the Department's cost share is for this Program. A. Kanzler explained the Department's costs would be an additional $40,000 in match funds. M. Moore added that this Program also gives customers who otherwise could not afford to, the ability to participate in outdoor water conservation. 5. PRESENTATION AND APPROVAL OF (1) A DESIGN -BUILD V. Ramirez moved approval SERVICES AGREEMENT WITH REC SOLAR COMMERCIAL of the Design -Build Services CORPORATION FOR THE DESIGN AND CONSTRUCTION Agreement with REC Solar OF SHADE STRUCTURES WITH SOLAR ENERGY SYSTEMS Commercial Corporation for AT NINE SCHOOL SITES (PROJECT), AND (2) NINE (9) the Design and Construction SOLAR LICENSE AGREEMENTS WITH ANAHEIM of Shade Structures. V. ELEMENTARY SCHOOL DISTRICT, CENTRALIA SCHOOL Baroldi seconded the motion. DISTRICT, MAGNOLIA SCHOOL DISTRICT, PLACENTIA- MOTION CARRIED: 6-0. 2017-92 YORBA LINDA UNIFIED SCHOOL DISTRICT AND ABSTAINED: 0. SAVANNA SCHOOL DISTRICT, AND DETERMINE THAT ABSENT: 1 (Chairperson THE PROJECT IS CATEGORICALLY EXEMPT UNDER E. Medrano). SECTIONS 15303(E), 15304, AND 15311 OF TITLE 14 OF THE CALIFORNIA CODE OF REGULATIONS. * C. Guss, Principal Integrated Resource Planner, presented the Solar for Schools Pilot Program (Program), which would site nine City - owned solar energy shade structures at local Anaheim public schools. Under this Program, the Department would construct, own, and operate the solar projects and pay the participating school districts a license fee for the use of their property. As the solar panels are mounted on shade structures, the districts will continue to use the space underneath the structures. To proceed with the Program, the Department requested a recommendation for approval of nine license agreements with five local school districts, and a design -build services agreement with REC Solar for the construction of the solar shade structures for $6,122,344. The schools participating in the Program include: • Esperanza High School • Franklin Elementary • Betsy Ross Elementary • Dr. Jonas Salk Elementary • Lord Baden Powell Elementary • Centralia Elementary • Danbrook Elementary • Hansen Elementary • Cerritos Elementary The Board asked why private schools are not included in the pilot. Staff responded that private schools received 73% of the funding for the previous rebate and solar flag programs and this revised Program is designed to encourage broader participation from public schools. The Board asked about the cost for the solar structures and staff responded that the structures on multiple schools are not as efficient as larger.systems, but the educational component is an important aspect of the revised Program. 6. PRESENTATION AND APPROVAL OF AN ARP-LOYALTON A. Abdulrahman moved BIOMASS PROJECT POWER SALES AGREEMENT WITH approval of an ARP-Loyalton THE SOUTHERN CALIFORNIA PUBLIC POWER Biomass Project Power Sales AUTHORITY. * Agreement with the Southern California Public Power C. Guss discussed the Biomass Renewable Power Sales Agreement Authority. R. Nelson (Sales Agreement) with the Southern California Public Power seconded the motion. Authority (SCPPA) for the purchase of renewable energy generated MOTION CARRIED: 6-0. by trees removed from high fire hazard areas. C. Guss indicated that ABSTAINED: 0. Senate Bill (SB) 859 mandates all California utilities with 100,000 or ABSENT: 1 (Chairperson more customers to procure their proportionate share of 125 E. Medrano). 2017-93 Megawatts (MW) of energy for five years. C. Guss mentioned the Department's share is 1.3 MW and that under the proposed Sales Agreement, the Department would purchase 0.81 MW over five years, which would satisfy 63% of the Department's obligation with additional projects under review. This Sales Agreement would cost $638,000 annually over five years. In addition, C. Guss made the Board aware of other SCPPA members involved in the project such as the Los Angeles Department of Water and Power, City of Riverside, and the Imperial Irrigation District. 7. APPROVAL OF A BIOMETHANE PURCHASE AND SALE AGREEMENT WITH SOCAL BIOMETHANE, LLC. * C. Guss introduced the Renewable Gas Sale and Purchase Agreement (Purchase Agreement) with SoCal Biomethane, a subsidiary of Anaergia, Inc. C. Guss indicated that under this Purchase Agreement, the Department would receive renewable gas derived from the anaerobic digestion of food waste, which would be delivered to the Department's Magnolia or Canyon Power Plants through the Southern California Gas Company's pipelines for the generation of renewable electricity. The anaerobic digestion of food waste would occur at one of two possible locations outside of Anaheim which is not near homes or schools. This Purchase Agreement provides biogas which is used to generate renewable energy at a 45% reduction in costs and better positions the Department since the amended Renewable Power Purchase Agreement with Anaheim Energy, LLC, which was approved by City Council on July 21, 2015, was terminated by Anaheim Energy on August 31, 2017. C. Guss explained the amended agreement was terminated by Anaheim Energy due to public concerns about the proximity to neighborhoods and a school. Lastly, C. Guss indicated that the electricity produced by the renewable gas would serve approximately 5,000 homes, offset fossil fuel use, and extend the life of landfills. 8. UPDATE ON ELECTRIC SYSTEM ISSUES. J. Lonneker, Assistant General Manager — Electric Services, discussed a power outage that occurred on Thanksgiving Day, affecting 18 residents in east Anaheim. J. Lonneker mentioned there was significant damage to [overhead wires] which was estimated to extend the outage to more than 24 hours. The Department sent crews out with two generators to restore power to the residents temporarily. J. Lonneker explained that the Department does not typically provide generators for outages, but under circumstances such as major holidays, extreme cold or hot weather, schools in session, and outages expected to extend past 24 hours, the crews will call for these provisions to bridge the time until power can be restored. J. Lonneker informed the Board that existing street lighting was converted to Light Emitting Diode (LED) lighting on La Palma near 2017-94 V. Baroldi moved approval of a Biomethane Purchase and Sale Agreement with SoCal Biomethane, LLC. J. Showalter seconded the motion. MOTION CARRIED: 6-0. ABSTAINED: 0. ABSENT: 1 (Chairperson E. Medrano). Sunkist Street following concerns from Anaheim Police and area residents that pedestrians crossing the road without use of the intersection crossings were difficult to see so additional lighting was needed. The existing fixtures were replaced with LED lighting which showed improved visibility. Additional lighting will be installed before the end of the month. 9. UPDATE ON WATER SYSTEM ISSUES. M. Moore made the Board aware of a press release from the Environmental Protection Agency (EPA) on December 11, 2017 that identified the North Basin in Orange County an EPA priority for cleanup. M. Moore indicated that the North Basin is the groundwater basin that lies underneath the cities of Fullerton, Placentia, and a portion of Anaheim. M. Moore explained that industrial manufacturing in the 1950's and 1960's caused contaminants in the Fullerton area to work their way into the groundwater basin. Those businesses have been shut down for many years and the soil has been cleaned up, but the contaminants have worked their way into the shallow levels of the groundwater basin. M. Moore indicated that the Department wells pump from deep in the aquifer so have not been affected by the contamination. M. Moore mentioned several years ago the Department shut down a shallow well that could have been affected and continues to monitor water quality in the groundwater. M. Moore indicated that the EPA is working on a remediation plan and will be proposing a ranking of the North Basin on the National Priority List in 2018. The EPA is planning public workshops in Anaheim and Fullerton on the proposed listing of the remediation plan. The Department will keep the Board informed of public workshops and may provide a presentation in the future on the North Basin remediation plan. 10. UPDATE ON FINANCE ISSUES. R. Dowell, Acting Assistant General Manager — Finance & Administration, provided the Board with an update on the utilities' dashboard and identified that the Electric utility results were in line with expectations through October. Also, the Water utility revenues were down through October due to the continuing effects of conservation. Lastly, R. Dowell made the Board aware that the annual audit was almost complete, and that no issues have been identified by the auditors. 11. UPDATE ON POWER SUPPLY ISSUES. G. Bowen, Assistant General Manager — Power Supply, provided an update on the Department's power supply portfolio for November 2017. He indicated that landfill gas and wind renewable generation had underperformed for the month of November. However, conventional generation made up the short fall with Canyon and Kraemer units being dispatched more than forecasted due to warm weather conditions. 2017-95 G. Bowen also provided an update on the Kraemer outage for the beginning of December, indicating that Kraemer suffered a boiler tube leak requiring the cutting out and replacement of several boiler tubes and that Kraemer will be returned to service in the upcoming week. G. Bowen also provided an update on the Canyon outage, indicating that Units 1 and 2 had a routine borescope inspection that revealed that the units were in good condition and would be returned to service shortly. 12. UPDATE ON ENTERPRISE RISK MANAGEMENT. J. Lehman, Chief Risk Officer, invited the Board's attention to the Wholesale Energy Risk Management (ERM) Program's Quarterly Compliance report. J. Lehman highlighted that the Department has a robust ERM program that provides direction and limits on wholesale energy transactions. She indicated that the program is closely monitored, and is audited. J. Lehman then made the Board aware of two violations of the ERM during the reporting period related to a transmission purchase in August for the wrong hour at a cost of $130, and a capacity purchase in September from a counter -party that was not on the approved list. She shared the mitigation actions and training that were instituted to help prevent a reoccurrence. Lastly, J. Lehman mentioned that the Department had received a mutual aid request inquiry from Southern California Edison (SCE) related to the on-going fires in the SCE service area, but to date, SCE had not formally requested mutual aid assistance. 13. ITEM(S) BY SECRETARY. D. Lee mentioned that the planned items for the following Board meeting include an annual report on Business & Community Programs, an update on the decommissioning of the San Onofre Nuclear Generating Station, and a large scale solar agreement. D. Lee shared photos from the mentoring program with high school students from Oxford Academy. Twenty students participated and were mentored by utility staff on applying for jobs, resume building, and conducting mock interviews. Students made final presentations at the last meeting and received certificates for their accomplishments. Finally, D. Lee informed the Board that he would be out of the office between December 22 through December 31, and that Brian Beelner will be Acting General Manager. 14. ITEM(S) BY BOARD MEMBERS. J. Showalter indicated she enjoyed touring the Bowerman Facilities and learning about landfill gas. V. Baroldi thanked staff for their quick response to street lights being out on his street. 2017-96 15. ADJOURNMENT: (REGULAR MEETING ON JANUARY 24, 2018, AT 5:00 P.M., IN THE 11TH FLOOR LARGE CONFERENCE ROOM, ANAHEIM WEST TOWER, 201 S. ANAHEIM BOULEVARD, ANAHEIM, CALIFORNIA). Respectfully sub fitted, Dukku Lee Public Utilities General Manager A. Abdulrahman moved approval to adjourn the Regular Meeting at 7:09 p.m., to the Board's Regular Meeting date of January 24, 2018 at 5:00 p.m. J. Showalter seconded the motion. MOTION CARRIED: 6-0. ABSTAINED: 0. ABSENT: 1 (Chairperson 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. 2017-97