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Public Utilities 2018/10/24CITY OF ANAHEIM PUBLIC UTILITIES BOARD MINUTES OCTOBER 24, 2018 The agenda having been posted on Thursday, October 18, 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, October 24, 2018, in the 11t` 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, J. Showalter, V. Baroldi, V. Ramirez Board Members Absent: None City Staff Present: D. Lee, L. Quiambao, M. Moore, B. Beelner, A. Kott, G. Bowen, J. Lehman, P. Oviedo, J. Lonneker, D. Algarme, C. Guss, M. Seifen Guest(s) Present: None AGENDA ITEM 1. PUBLIC COMMENTS. 2. APPROVAL OF THE MINUTES OF THE PUBLIC UTILITIES BOARD MEETING OF SEPTEMBER 26, 2018. * 3. PRESENTATION: 2017 ELECTRIC SYSTEM RELIABILITY REPORT. D. Algarme, Electric Operations Manager, gave a presentation on the Anaheim Public Utilities Department (Department) 2017 Electric Reliability Report, which included the 2017 System 2018-73 ACTION TAKEN There being no public comments, Chairperson E. Medrano closed the public comments portion of the meeting. J. Seymour moved approval of the Minutes of the Public Utilities Board Meeting of September 26, 2018. A. Abdulrahman seconded the motion. MOTION CARRIED: 7-0. ABSTAINED: 0. ABSENT: 0. Average Interruption Frequency Index, the System Average Duration Index, and the Customer Average Interruption Index. D, Algarme reported on the Department's high reliability statistics as compared to local investor-owned utilities and publicly owned utilities in California and across the nation. D. Algarme made the Board aware of the four top causes of power outages, which include direct buried underground cable, metallic balloons, transformer failure, and animal contact. D. Algarme then discussed areas where the Department has improved, including automation, locating problems, situational awareness, and prediction. Finally, D. Algarme mentioned that starting with the 2018 Reliability Report, the Department will add wildfire mitigation metrics. 4. PRESENTATION: TRANSPORTATION ELECTRIFICATION STRATEGIC PLAN. C. Guss, Principal Integrated Resource Planner, gave a presentation on the Department's Transportation Electrification Strategic Plan, which included supporting information on California's greenhouse gas emissions inventory, California's electric vehicle policies, and electric vehicle (EV) trends that are consistent with state policies. C. Guss indicated the Department's strategic plan to support transportation electrification within Anaheim includes addressing policy, market and industry drivers, scaling EV infrastructure to meet future demand, supporting disadvantaged communities, mitigating the over generation of renewable energy, and leveraging external funding sources. C. Guss presented a forecast from the California Energy Commission for EVs registered in Anaheim through 2030, which is currently about 2,000 EVs and is expected to increase to nearly 33,000 by 2030. The Board inquired about why there is an emphasis on disadvantaged communities, and D. Lee explained that addressing such communities is consistent with state policies and provides assistance to those in Anaheim who may not otherwise have access to EVs due to a lack of charging infrastructure at multi -family dwellings. 5. RECOMMEND APPROVAL OF THE EXPANDED UTILIZATION OF LOW CARBON FUEL STANDARD (LCFS) PROGRAM CREDIT PROCEEDS TO ASSIST INCOME -QUALIFIED CUSTOMERS WITH EXPANDED ACCESS TO ELECTRIC VEHICLES (EV), PROMOTE EV EDUCATION AND ADOPTION OF CITY OF ANAHEIM AND SCHOOL FLEET EVS, AND TO SUPPLEMENT EXTERNAL FUNDING FOR EV PROLIFERATION AND EV DEMONSTRATION PROGRAMS; DETERMINE THAT THE AGREEMENTS, ACTIVITIES, AND UNDERTAKINGS ARE 2018-74 A. Abdulrahman moved approval of the expanded utilization of LCFS Program Credit Proceeds to assist Income -Qualified Customers with expanded access to Electric Vehicles (EV), promote EV education and adoption of City and School Fleet EVs, and to CATEGORICALLY EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT PURSUANT TO SECTIONS 15060(C)(3),15061(B)(3),15301(B), AND 15378(B)(4) OF TITLE 14 OF THE CALIFORNIA CODE OF REGULATIONS; AND AUTHORIZE THE GENERAL MANAGER (GM) TO UTILIZE LCFS PROGRAM CREDIT PROCEEDS (PROCEEDS), EACH FISCAL YEAR, IN AN AMOUNT THAT DOES NOT EXCEED ACTUAL PROCEEDS RECEIVED, FOR ANY AND ALL GM APPROVED USES THAT ENCOURAGE THE PROLIFERATION OF EVS CONSISTENT WITH STATE LAW INCLUDING, BUT NOT LIMITED TO, THE NEGOTIATION AND EXECUTION OF LEASE OR LEASE TO PURCHASE AGREEMENTS FOR FLEET EVS. * G. Bowen, Assistant General Manager — Power Supply, discussed the expansion of the Department's Low Carbon Fuel Standard (LCFS) Program with the Board as part of the overall strategy discussed in the previous item. G. Bowen indicated that in September 2016, the Board and City Council approved the Department's first LCFS Program, which authorized the Department to. receive and sell LCFS credits to fund the expansion of public access Electric Vehicle (EV) charging stations in Anaheim. G. Bowen explained the process of how LCFS credits are created and that the updated program would expand the use of LCFS Credits to three additional areas, which include EV education and demonstrations, income -qualified programs, City fleet and school bus EVs, and funding the expansion of the Department's public access charging stations. 6. RECOMMEND APPROVAL OF A CONSULTING SERVICES AGREEMENT WITH NEWGEN STRATEGIES AND SOLUTIONS, LLC, FOR ELECTRIC UTILITY COST OF SERVICE STUDIES FOR A THREE-YEAR TERM IN A NOT -TO -EXCEED AMOUNT OF $86,531, WITH TWO OPTIONAL ONE-YEAR EXTENSIONS NOT -TO -EXCEED $47,816. * B. Beelner, Assistant General Manager — Finance and Administration, explained that the Department's electric rates are based on the cost to serve its various classes of customers. B. Beelner discussed how the Department hires a consultant to conduct bi-annual Cost of Service (COS) studies to identify the proportional share of departmental costs attributable to each customer class. B. Beelner explained that the COS study functionalizes the costs based on the various cost drivers such as generation, distribution, transmission, or customer service activities, which are then allocated to the customer class receiving electric service. Furthermore, B. Beelner noted that residential customers, for example, tend to use energy less efficiently than commercial customers who use energy more consistently 2018-75 supplement external funding for EV proliferation and EV demonstration programs and authorize the GM to utilize LCFS Program Credit Proceeds, consistent with state law, to execute Lease or Lease to Purchase Agreements for Fleet EVs. R. Nelson seconded the motion. MOTION CARRIED: 7-0. ABSTAINED: 0. ABSENT: 0. J. Seymour moved approval of a Consulting Services Agreement with NewGen Strategies and Solutions, LLC for Electric Utility Cost of Service Studies. V. Baroldi seconded the motion. MOTION CARRIED: 7-0. ABSTAINED: 0. ABSENT: 0. throughout the day and therefore tend to cost less to serve on a per kilowatt hour basis, due to economies of scale. B. Beelner indicated that the proposal is for two separate COS studies with an optional extension for a third study. B. Beelner mentioned that multiple proposals were received and NewGen Strategies and Solutions, LLC (NewGen) ranked the highest. B. Beelner noted that NewGen conducted the last two electric COS studies for the Department and therefore has the institutional knowledge that will facilitate an efficient and thorough study. The Board inquired why the Department did not conduct the studies in-house. B. Beelner explained that while the Department has the expertise to conduct the studies, use of a qualified third - party consultant adds a level of independence and credibility to the studies. Additionally, utilizing consultants who perform these studies on a daily basis provides for greater efficiencies than the Department could achieve if doing the studies in-house. 7. RECOMMEND APPROVAL OF A RESOLUTION ADOPTING THE SMART CITY ROADMAP INITIATIVE; AND AUTHORIZE THE PUBLIC UTILITIES GENERAL MANAGER, OR DESIGNEES, TO COORDINATE FURTHER IMPLEMENTATION STRATEGIES FOR THE SMART CITY ROADMAP INITIATIVE, INCLUDING APPLYING FOR THE SOUTHERN CALIFORNIA ASSOCIATION OF GOVERNMENTS 2018 SUSTAINABLE COMMUNITIES PROGRAM FUNDING AND SEEK BLUE ZONES PROJECT DESIGNATION, SUBJECT TO CITY COUNCIL BUDGET AUTHORIZATION AND PROVIDE ANNUAL UPDATES ON THE PROGRESS TOWARDS SMART CITY GOALS. * D. Lee, Public Utilities General Manager, gave a presentation on the Smart City Roadmap Initiative (Initiative) that was developed in response to a request by Council Member Murray at the September 25, 2018 City Council meeting. The Initiative recognizes that the City of Anaheim is already utilizing technology to improve services, including mapping tools, a mobile app to request services, fiber optic communications, automated electric grid operations, traffic management, and City Information Technology solutions. Future initiatives were categorized in the areas of being a connected, safe, intelligent and sustainable city. D. Lee provided examples of potential programs being undertaken by various departments; however, individual projects are still subject to City Council approval. The Board sought clarification about the Department's role in the Initiative. After discussing the Initiative, the Board indicated it recognized the broad nature of the initiatives that encompasses other City departments, and therefore recommended the item with 2018-76 J. Seymour moved to recommend approval of the Resolution adopting the Smart City Roadmap Initiative subject to the condition that the City Manager's Office proceed with the coordination and prioritization of the proposed initiatives, with assignment of responsibilities to the appropriate departments. R. Nelson seconded the motion. MOTION CARRIED: 7-0. ABSTAINED: 0. ABSENT: 0. the condition that the City Manager's Office proceed with the coordination and prioritization of the proposed initiatives, with assignment of responsibilities to the appropriate departments. 8. ANNUAL EMERGENCY RESPONSE AND PLANNING REPORT. J. Lehman, Chief Risk Officer, provided the Annual Report on the Department's emergency response planning and preparedness activities. J. Lehman explained the Department's Emergency Response Planning Program provides staff vital information and guidance on actions to be taken before, during, and after major emergencies and it supplements City-wide efforts to prepare for, and respond to emergencies. J. Lehman indicated that the Department did not experience major outages on the electric or water utility systems that would have triggered the activation of the Emergency Response Plan. However, the Department participated in the activation of the City- wide Emergency Operations Center (EOC) due to the Canyon fires. J. Lehman mentioned that thanks to the meticulous documentation efforts of staff, the Department was able to recover close to $500,000 from insurance, and State and Federal agencies related to damages caused by rainstorms in 2017. J. Lehman discussed the training and drills, including the annual exercise that had taken place in August. Lastly, J. Lehman stated that the time, energy, and focus on emergency planning helps the Department by improving communication, providing a better understanding of other staff s duties, and identifying resources that need updating. 9. DISCUSSION: QUARTERLY STATUS REPORTS ON CAPITAL IMPROVEMENT PROJECTS, MASTER AGREEMENTS, GENERAL SERVICES AGREEMENTS, AND SPOT BID AWARDS. D. Lee provided an overview of the quarterly reports that highlight capital projects that have been completed, or are in various stages of planning and design. The quarterly report on pre -qualified vendors and spot bid purchases showed activity in the first quarter of FY2018-19 for the Department. These tools help to accelerate small scale engineering, repair, and construction projects in a timely manner that help improve service reliability to customers. 10. UPDATE ON ELECTRIC SYSTEM ISSUES. J. Lonneker, Assistant General Manager — Electric Services, updated the Board on the progress of construction of the Harbor Substation project and presented photos of the current status. J. Lonneker indicated that the substation is expected to be completed mid -2019. 2018-77 J. Lonneker also indicated to the Board that the Department, along with Anaheim Fire and Rescue, had representatives present at the Wildfire Mitigation Resident Outreach event, which was held on October 16, 2018 on Eucalyptus Drive. During the field meeting, the Department provided information on the steps that the Department will take prior to de -energizing a power line as well as the notification methods and updates provided to the residents when power is shut-off and restored. She emphasized to residents that shut -offs are the last option when other mitigation measures are exhausted or weather conditions are extreme. J. Lonneker indicated that staff shared with residents the long-term plan to underground the power and communication lines along Eucalyptus Drive. Approximately 20 residents visited the outreach booth and were able to sign up for Anaheim Alerts to receive notifications. Lastly, J. Lonneker discussed with the Board the recent field training that took place for the line crews called "Hurt Man Rescue" and explained that this is an annual training for rescuing an injured worker on a power pole, bucket truck, and an underground electric vault. 11. UPDATE ON WATER SYSTEM ISSUES. M. Moore, Assistant General Manager — Water Services, discussed the water supply dashboard indicating that storage levels across the water supply portfolio have decreased significantly over the past year. M. Moore mentioned that low levels in the Colorado River basin might trigger low-level action in the coming year and noted that the Board would be kept informed of any Metropolitan Water District (MWD) action on Lake Mead related to a drought contingency plan. M. Moore indicated that Assembly Bill 76 requires utilities to test drinking fountains for the presence of lead in all schools and to notify schools of elevated levels so that appropriate actions may be taken by the schools within their properties. M. Moore noted that the Department is halfway through the lead testing process for the schools in Anaheim. M. Moore mentioned a school had one drinking water fixture that tested above the action level and the school officials were notified immediately. The fixture has since been replaced, the Department has re -tested the location, and is awaiting the test results. Furthermore, M. Moore indicated the Department has also tested the water at the nearest Department water distribution sample location, and the lead levels were below the action level. M. Moore made the Board aware of a public workshop on the North Basin Groundwater Cleanup Program that will be hosted by the Environmental Protection Agency (EPA) on November 14, 2018 at the Fullerton Public Library. M. Moore noted that the 2018-78 purpose of the workshop is for the public to ask questions of the EPA regulators about the process and health concerns. 12. UPDATE ON FINANCE ISSUES. B. Beelner discussed the monthly dashboard with the Board, he indicated that the electric revenue for the fiscal year to date September 30, 2018 was 5.6% above budget ($7.2M) with electric costs coming in above budget as well by 6.8% ($6.8M) causing a net positive budget variance of $0.4M. B. Beelner mentioned electric costs have trended higher due to higher than expected wholesale power costs driven by higher natural gas prices. B. Beelner then mentioned that the year to date September 30, 2018 water revenue was 4.5% ($1.1M) below budget due to cooler than expected temperatures driving lower outdoor water use. B. Beelner noted that water costs were below budget by 3.4% ($0.6M) causing a net negative budget variance of $0.5M. 13. UPDATE ON POWER SUPPLY ISSUES. G. Bowen provided an update on the Department's power supply portfolio; he indicated that September 2018 experienced the coolest temperatures in the last 20 -years. G. Bowen noted that as a result most of the conventional generation assets produced a little less than half their normal capacity for the month, which translated into a significant reduction in wholesale sales. G. Bowen highlighted two community events that the Department attended in October. The first event was the Magnolia School District 3rd Annual 5K Run and the second was the North Orange Continuing Education Vision Event. G. Bowen mentioned the Department signed up over 40 residents for a free home utility check-up from these events. 14. UPDATE ON ENTERPRISE RISK AND COMPLIANCE. J. Lehman discussed the internal compliance report with the Board. J. Lehman highlighted that there were minor exceedances of the air quality permit requirements at Canyon Power Plant due to operational issues and equipment failure, the incidents were self- reported, and the issues have been corrected. J. Lehman indicated that the staff works effectively to keep the Department in compliance with the myriad of rules and regulations. J. Lehman then provided the Board with the Legislative Report for 2018, which highlighted significant legislative outcomes from the past year. J. Lehman mentioned the bills that passed which were likely to have the most impact on operations, as well as discussed potential new bills likely to be introduced in the upcoming year. Furthermore, J. Lehman noted that the legislative session ended more favorably thanks to the efforts of staff working with the 2018-79 legislators and industry groups to make sure the Department's and Legislative Working Group's concerns were known and addressed to mitigate impacts to customers. 15. ITEM(S) BY SECRETARY. D. Lee shared with the Board the items scheduled for the following Board meeting include: • Safety Presentation • Financial Presentation • Efficiency Programs Agreement Consideration • Cybersecurity Presentation D. Lee informed the Board that students from two elementary schools (Horace Mann and Maxwell) attended Public Power Week. Students participated in bucket truck rides and learned about electric safety and how electricity is delivered to their homes. In addition, the general public was also able to participate in the activities. 16. ITEM(S) BY BOARD MEMBERS. V. Baroldi thanked the Department for the replacement of LED streetlights. A. Abdulrahman also thanked the Department for the replacement of LED streetlights on Ball Road. R. Nelson requested an update on how often motorized equipment Staff will provide a is replaced. presentation of motorized vehicles at a future Board meeting. 17. ADJOURNMENT: (NEXT REGULAR MEETING ON J. Seymour moved approval NOVEMBER 28, 2018, AT 5:00 P.M., IN THE 11TH FLOOR to adjourn the Regular LARGE CONFERENCE ROOM, ANAHEIM WEST TOWER, Meeting at 7:16 p.m., to the 201 S. ANAHEIM BOULEVARD, ANAHEIM, CALIFORNIA). Board's Regular Meeting date of November 28, 2018 at 5:00 p.m. A. Abdulrahman seconded the motion. MOTION CARRIED: 7-0. ABSTAINED: 0. ABSENT: 0. 2018-80 Dukku Lee Public Utilities General Manager * 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. 2018-81