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Public Utilities 2018/07/25CITY OF ANAHEIM PUBLIC UTILITIES BOARD MINUTES JULY 25, 2018 The agenda having been posted on Thursday, July 19, 2018, the Regular Meeting of the Public Utilities Board (Board) was called to order by Chairperson E. Medrano at 5:00 p.m. on Wednesday, July 25, 2018, 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, R. Nelson, V. Baroldi, V. Ramirez Board Members Absent: J. Showalter City Staff Present: D. Lee, L. Quiambao, M. Moore, J. Lonneker, B. Beelner, A. Kott, G. Bowen, J. Lehman, P. Oviedo, M. Seifen, Y. Gaytan, L. Nugent, R. King, T. Cooke Guest(s) Present: Council Member Stephen Faessel, District 5; Angelica Loya and Helen Phan, Student Interns AGENDA ITEM 1. PUBLIC COMMENTS. Chairperson E. Medrano welcomed Council Member Stephen Faessel, District 5. M. Robledo, Integrated Resource Manager, was recognized for his years of service and commitment to the Public Utilities Department (Department). 2. ELECTIONS FOR PUBLIC UTILITIES BOARD CHAIRPERSON AND VICE -CHAIRPERSON. ** A. Kott, Assistant City Attorney, opened the floor for nominations for Chairperson. A. Abdulrahman nominated E. Medrano, who accepted the nomination. J. Seymour moved to close the nominations and V. Baroldi seconded the motion. By voice vote, the Public Utilities Board members unanimously voted to close the nominations. By voice vote, the Public Utilities Board members elected E. Medrano as the Chairperson of the Public Utilities Board. 2018-51 ACTION TAKEN There being no public comments, Chairperson E. Medrano closed the public comments portion of the meeting. By voice vote, the Board elected E. Medrano as Chairperson of the Public Utilities Board. MOTION CARRIED: 6-0. ABSTAINED: 0. ABSENT: 1 (J. Showalter). A. Kott then opened the floor for nominations for the Vice- By voice vote, the Board Chairperson. V. Baroldi and A. Abdulrahman nominated J. elected J. Seymour as Vice - Seymour who accepted the nomination. V. Baroldi moved to close Chairperson of the Public the nominations and A. Abdulrahman seconded the motion. By Utilities Board. voice vote, the Board members unanimously voted to close the MOTION CARRIED: 6-0. nominations. By voice vote, the Board members elected ABSTAINED: 0. J. Seymour to the position of Vice -Chairperson of the Public ABSENT: 1 (J. Showalter). Utilities Board. 3. APPOINTMENT OF THREE MEMBERS AND ONE ALTERNATE FOR THE PUBLIC UTILITIES HEARING BOARD AND THREE MEMBERS FOR THE AD HOC LEGISLATIVE WORKING GROUP. ** Chairperson E. Medrano indicated he was seeking three members and one alternate to volunteer to serve on the Public Utilities Hearing Board. J. Seymour, A. Abdulrahman, and R. Nelson volunteered. V. Baroldi indicated that J. Showalter had expressed interest in serving as the alternate. Subject to confirmation by J. Showalter of her interest in serving, Chairperson E. Medrano confirmed their appointment to the Public Utilities Hearing Board. Chairperson E. Medrano indicated he was seeking three volunteers to serve on the Ad Hoc Legislative Working Group. J. Seymour and V. Ramirez volunteered. Chairperson E. Medrano indicated he would serve and confirmed their appointments to the Ad Hoc Legislative Working Group. 4. APPROVE THE MINUTES OF THE PUBLIC UTILITIES A. Abdulrahman moved BOARD MEETING OF JUNE 27, 2018. * approval of the Minutes of the Public Utilities Board Meeting of June 27, 2018. J. Seymour seconded the motion. MOTION CARRIED: 5-0. ABSTAINED: 1 (V. Ramirez). ABSENT: 1 (J. Showalter). 5. PRESENTATION: STUDENT SUMMER INTERNSHIP EXPERIENCE. M. Seifen, Communications Supervisor, introduced student interns A. Loya and H. Phan to the Board. The students gave a presentation on their experience while interning with the Department. A. Loya and H. Phan discussed the opportunity they and the other two interns, E. Tan and P. Dhoot, had to give a presentation about water conservation to younger students from Anaheim elementary schools. In addition, A. Loya and H. Phan indicated the tours of the electric substations and the water treatment plant were very educational and helped them better understand how the Department functions and 2018-52 provides electric and water service to its customers. The Board commended the students for their efforts. 6. RECOMMEND APPROVAL OF THE 2018 ANAHEIM PUBLIC UTILITIES WILDFIRE MITIGATION PLAN. T. Cooke, Electric Operations Manager — Field Services, gave a presentation on the 2018 Anaheim Public Utilities Wildfire Mitigation Plan (Plan). T. Cooke discussed the main objectives of the Plan, which establish methods and procedures used to construct, maintain, and operate the Department electrical lines and equipment in a manner that will minimize the potential risk of catastrophic wildfire posed by electrical infrastructure within the highest fire threat areas. T. Cooke indicated that this Plan meets the requirements outlined in Senate Bill 1028. T. Cooke then discussed the Anaheim Fire Threat Map developed in coordination with the Anaheim Fire and Rescue Department identifying the 3 -Tiered levels called Fire Threat Zones throughout the Anaheim electric service territory, layered with the location of overhead electric lines. Additionally, T. Cooke explained how the Plan outlines the Department's mitigation strategies to minimize the risk of overhead lines causing a fire in the highest Tier 2 and Tier 3 fire threat zones, which include vegetation management, increased infrastructure resiliency, disabling automated reclosers, undergrounding where feasible, and de -energizing electric lines when necessary. The Board asked how the community and residents would be made aware of this Plan. Staff indicated that the Plan will be posted on the Department's website and that the Department would conduct outreach to those customers who would be impacted in the highest Fire Threat Zones. The Board asked about the potential to re-route the overhead power lines near the Oak Canyon Nature Center. Staff indicated the line is only used to connect circuits and does not directly serve customers. Undergrounding the line is not feasible due to the terrain, and re-routing the lines around Oak Canyon would be costly. Because the lines do not serve customers, they may be de - energized without disruption of service, and the lines were recently hardened with ductile iron poles to replace the wood poles. The Board also inquired about the costs associated with this Plan. Staff indicated that undergrounding lines would cost about $2 million and that there are no other operating costs for de - energizing lines. 2018-53 J. Seymour moved approval of the 2018 Anaheim Public Utilities Wildfire Mitigation Plan. V. Baroldi seconded the motion. MOTION CARRIED: 6-0. ABSTAINED: 0. ABSENT: 1 (J. Showalter). 7. RECOMMEND APPROVAL OF AN AGREEMENT WITH INFOSEND, INC. FOR UTILITY BILL PRINT AND MAILING SERVICES FOR THREE YEARS WITH SEVEN OPTIONAL ONE-YEAR EXTENSIONS IN A TOTAL NOT -TO -EXCEED AMOUNT OF $800,000 PER YEAR. L. Nugent, Customer Service Manager, requested the Board's approval for the Department to enter into an agreement with InfoSend, Inc. for bill print and mailing services. L. Nugent discussed how the Department sends approximately 1 million utility bills annually to customers as well as bill inserts, messages, and notices to customers, and that this particular function is too large for the Department to manage, and thus it is outsourced. L. Nugent explained that while the Department promotes paperless options for customers, the majority of customers still elect to receive a paper bill. L. Nugent discussed the selection criteria for InfoSend, which included past positive experience as the provider to the Department, the reduced risk of downtime because of existing integrations, similar services performed for other like agencies, and lowest costs. 8. RECOMMEND APPROVAL AND AUTHORIZATION OF THE FISCAL YEAR 2017/2018 NET WRITE-OFF OF UNCOLLECTIBLE UTILITY ACCOUNTS. * B. Beelner, Assistant General Manager - Finance and Administration, requested the Board approve and authorize the Department to write off $665,314 in net uncollectible accounts. B. Beelner discussed the work done by the Department to reduce the write-off amount by 39% from the prior year, the types of delinquent or bankrupt accounts that require the Department to write them off, how the Department partners with customers to provide many payment options and assistance programs, and the impact writing customer accounts off has on the balance of customers. B. Beelner then discussed how debts deemed uncollectible and written off are still pursued by an outside collection agency, and how, in FY 2018, the Department still recovered $137,834 in customer debts that were written off in previous years. B. Beelner also mentioned that the net write-off represented only 0.13% of Departmental revenues which far exceeds the industry average of 0.38%. 2018-54 A. Abdulrahman moved approval of an agreement with Infosend, Inc. for utility bill print and mailing services. R. Nelson seconded the motion. MOTION CARRIED: 6-0. ABSTAINED: 0. ABSENT: 1(J. Showalter). V. Baroldi moved approval and authorization of the Fiscal Year 2017/2018 New Write -Off of uncollectible utility accounts. J. Seymour seconded the motion. MOTION CARRIED: 6-0. ABSTAINED: 0. ABSENT: 1 (J. Showalter). 9. DISCUSSION ON THE QUARTERLY STATUS REPORTS ON CAPITAL IMPROVEMENT PROJECTS, MASTER AGREEMENTS, GENERAL SERVICES AGREEMENTS, AND SPOT BID AWARDS. D. Lee provided a summary of the quarterly reports for capital improvement projects and purchase of materials and contract services. The capital report includes detailed information on the location of projects and their schedule. The report on master agreements for construction, general services for consulting services, and spot bid awards for materials were updated with the latest information showing the level of expenditures in the past quarter. The pre -approved agreements for contractors and consultants significantly reduce the procurement cycle since terms and conditions are already agreed upon, which enables staff to quickly implement projects. 10. UPDATE ON ELECTRIC SYSTEM ISSUES. J. Lonneker, Assistant General Manager — Electric Services, updated the Board on the progress of Underground Conversion projects that are currently in construction. J. Lonneker indicated that they include: (1) Orangewood from Eugene to Lewis St., where substructure work is nearly complete and underground cable installation will begin next month; (2) Lincoln/Rio Vista on Lincoln Blvd. from the 57 Freeway to Rio Vista Street, and on Rio Vista Street from Lincoln Blvd. to La Palma Avenue, currently splicing and testing the high voltage cable, with completion of the electric portion planned later this year; and (3) Euclid, from Broadway to the south City Limit where installation of the underground vaults near Cerritos Avenue began this week. J. Lonneker invited the Board to view the installation of vaults if interested. Lastly, J. Lonneker mentioned that the Department's electric crews participated and provided bucket truck rides at the annual 41' of July celebration at Peralta Park. 11. UPDATE ON WATER SYSTEM ISSUES. M. Moore, Assistant General Manager — Water Services, discussed the North Basin contamination and the remediation that will be occurring in conjunction with other Federal and State agencies to conduct outreach programs. The State agencies started reaching out to local governments ahead of the U.S. Environmental Protection Agency (EPA) by sending letters to key stakeholders. Anaheim staff setup coordination meetings with all the parties involved in the North Basin to make sure there is only one public outreach effort that will be led by EPA. The first outreach meeting will be held in the winter at the Fullerton Library. 2018-55 Lastly, M. Moore mentioned the completion of the La Palma Water Complex and reminded the Board of the upcoming dedication event scheduled for Tuesday, July 31, 2018. 12. UPDATE ON FINANCE ISSUES. B. Beelner, discussed the monthly dashboard with the Board. He indicated that electric revenue for the FY 2018 was 3.2% higher than budget ($13.7M) largely due to higher than expected wholesale power prices driving wholesale revenue much higher than expected. Additionally, costs came in below budget by 7.4% ($29AM) as a result of approximately $12 million in additional cap and trade allowance sales used to offset renewable power costs causing a net positive budget variance of $43.1 million. B. Beelner then mentioned that the FY 2018 water revenue was 3.9% ($3.OM) above budget due to economic growth leading to higher than expected commercial and industrial water sales, and costs for the year were 3.5% below budget ($2.4M) causing a positive net $5.4M budget variance. B. Beelner mentioned that the Department would schedule a financial planning workshop/presentation for the fall to discuss the strategies for the best use of water and electric funds. 13. UPDATE ON POWER SUPPLY ISSUES. G. Bowen, Assistant General Manager — Power Supply, provided the Board with an update on the power supply portfolio for FY 2018, which ended in June. G. Bowen indicated to the Board that generation production had met the forecasted annual generation target despite the ongoing Kraemer facility outage. G. Bowen provided the Board with an update on the Solar for Schools program stating that the developer, REC Solar, was on track to complete the major construction work at all nine schools before the new school year begins in mid-August. Additionally, G. Bowen mentioned to the Board that the Stanton Energy Resource Center generating facility's approval under consideration by the California Energy Commission. G. Bowen indicated that the facility located in Stanton, California would be under contract with Southern California Edison, providing capacity and energy in lieu of the San Onofre Generating Station, which ceased operations in 2012. While there is no direct impact on the Department, G. Bowen provided the update due to the proximity of the project to Anaheim. Lastly, G. Bowen discussed the recent article published in the Wall Street Journal — Report on Cyber Security Attack against US Electric Utilities. G. Bowen indicated that the Department was monitoring the information being released in regards to the cyber 2018-56 security attacks against the targeted utilities and that there was no threat to the broader electric system. There were no impacts to Anaheim. 14. UPDATE ON ENTERPRISE RISK MANAGEMENT. J. Lehman, Chief Risk Officer, discussed the Internal Compliance Report and indicated that there were minor exceedances of the air quality permit requirements at both the Kraemer and Canyon Power Plants due to equipment failure, and that both incidents were self-reported. She indicated that due to the nature of these incidents, they are not expected to result in violations. J. Lehman then provided an update on legislative and regulatory efforts, including mentioning that there is significant interest in wildfire legislation and that the legislature had convened a special conference committee, which is meeting over the summer recess to address this issue. J. Lehman concluded with a reminder that the Department's annual emergency response planning exercise would be conducted on Wednesday, August 29th at 9:00 a.m. and that the Board was invited to observe. 15. ITEMS) BY SECRETARY. D. Lee informed the Board that the City Council appointed a new City Manager, Chris Zapata, who will start on August 6ffi. A new police chief, Jorge Cisneros, also recently joined the City. He informed the Board that a tour was provided to officials from Guaynabo, Puerto Rico, who experienced significant damage to properties and infrastructure from hurricanes. Items scheduled for the following Board meeting include: System Overview of Telecommunications Bi -annual Utility Success Indicators Emergency Exercise 16. ITEM(S) BY BOARD MEMBERS. V. Baroldi thanked staff for handling outages well during the most recent heatwave. A. Abdulrahman thanked staff for keeping the Board informed and being responsive. E. Medrano thanked Council Member S. Faessel for attending the meeting. 2018-57 17. ADJOURNMENT: (REGULAR MEETING ON AUGUST 22, 2018, AT 5:00 P.M., IN THE 111 FLOOR LARGE CONFERENCE ROOM, ANAHEIM WEST TOWER, 201 S. ANAHEIM BOULEVARD, ANAHEIM, CALIFORNIA). Res ectfully su mitted, Dukku Lee Public Utilities General Manager A. Abdulrahman moved approval to adjourn the Regular Meeting at 6:52 p.m., to the Board's Regular Meeting date of August 22, 2018 at 5:00 p.m. J. Seymour seconded the motion. MOTION CARRIED: 6-0. ABSTAINED: 0. ABSENT: 1(J. Showalter). * 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. 2018-58