Public Utilities 2020/07/22ITEM # 06
2. ELECTIONS FOR PUBLIC UTILITIES BOARD
CHAIRPERSON AND VICE -CHAIRPERSON. **
A. Kott, Assistant City Attorney, opened the floor for nominations By voice vote, the Board
for Chairperson. J. Seymour nominated E. Medrano, who closed the nominations and
accepted the nomination. By voice vote, the Board members voted elected E. Medrano as
to close the nominations and elect E. Medrano to the position of Chairperson of the Public
Chairperson of the Public Utilities Board. Utilities Board.
MOTION VIA ROLL
CALL VOTE 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. E. Medrano nominated J. Seymour who accepted the
closed the nominations and
nomination. By voice vote, the Board members voted to close the
elected E. Medrano as
nominations and elect J. Seymour to the position of Vice-
Chairperson of the Public
Chairperson of the Public Utilities Board.
Utilities Board.
MOTION VIA ROLL
CALL VOTE CARRIED:
6-0.
ABSTAINED: 0.
ABSENT: 1 [J. Showalter].
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 and A. Abdulrahman volunteered.
Subject to confirmation by J. Showalter, she will continue to serve
as a Hearing Board member. R. Bhalla volunteered to be the
alternate. Chairperson E. Medrano confirmed their appointments
to the Public Utilities Hearing Board.
Chairperson E. Medrano indicated he was seeking three volunteers
to serve on the Ad Hoc Legislative Working Group. Chairperson
E. Medrano, A. Abdulrahman, and J. Seymour volunteered.
Chairperson E. Medrano indicated he would serve and confirmed
the others' appointments to the Ad Hoc Legislative Working
Group.
4. ELECTIONS FOR THREE UNDERGROUND CONVERSION By voice vote, the Board
SUBCOMMITTEE MEMBERS. ** closed the nominations and
elected V. Baroldi, R.
A. Kott opened the floor for nominations of three Underground Bhalla, and A. Abdulrahman
Conversion Subcommittee members. Vice -Chairperson J.
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Seymour nominated V. Baroldi, R. Bhalla, and A. Abdulrahman. to the Underground
The Board members accepted their nominations. By voice vote, Conversion Subcommittee.
the Board members voted to close the nominations and elect V. MOTION VIA ROLL
Baroldi, R. Bhalla, and A. Abdulrahman to the Underground CALL VOTE CARRIED:
Conversion Subcommittee. 6-0.
ABSTAINED: 0.
ABSENT: 1 [J. Showalter].
5. PRESENTATION: 2020 POWER SUPPLY SUMMER
OUTLOOK.
S. Smith, Integrated Resources Manager, provided the Board with an
annual update for the Anaheim Public Utilities Department's (APU)
Power Supply Summer Outlook. S. Smith discussed the California
Independent System Operator (CAISO) and APU's assessment of
summer peak loads in the state and in Anaheim. S. Smith also
provided an update on available resources, as well as COVID-19
impacts, wildfire risk, and mitigation planning should there be an
issue meeting electrical load in the area.
S. Smith indicated that overall, the summer assessment issued by the
CAISO indicated they have sufficient generation resources to meet
the forecasted peak electrical loads. APU is fully resourced to meet
its customers' needs, and should there be high electrical loads, APU is
prepared and has procedures in place for mitigation. Additionally, S.
Smith responded to a previous request from the Board to present
plans that are in place to reduce Greenhouse Gas Emissions (GHG)
extending out to 2045, consistent with state mandates. S. Smith
presented the GHG emitting generation resources that will no longer
be under contract and will potentially be replaced by non -emitting
resources after a technology assessment is done. Finally, the
increasing importance of Energy Efficiency and Transportation
Electrification were shown.
The Board asked about APU's residential load peaking in summer
with many people home due to COVID-19. S. Smith indicated that
APU's summer load projection accounted for COVID-19 and has
additional reserves in the event the actual peak exceeds the projected
peak.
6. APPROVAL OF A RESOLUTION ADOPTING AN ENERGY
Vice Chairperson J.
STORAGE PLAN AND DETERMINING THAT AN
Seymour moved approval of
ASSEMBLY BILL 2514 PROCUREMENT TARGET OF UP
a resolution adopting an
TO 50 MEGAWATTS OF ENERGY STORAGE SYSTEMS
Energy Storage Plan and
BY DECEMBER 31, 2026 IS APPROPRIATE SUBJECT TO
determining that an
CITY COUNCIL AUTHORIZATION FOR FUTURE
Assembly Bill 2514
CAPITAL EXPENDITURES AND AUTHORIZING THE
procurement target of up to
PUBLIC UTILITIES GENERAL MANAGER OR DESIGNEE
50 MW of energy storage
TO PREPARE, EXECUTE, AND SUBMIT DOCUMENTS
systems by the end of 2026
AND TAKE SUCH ACTIONS AS NECESSARY IN
is appropriate. V. Baroldi
CONNECTION WITH THE DETERMINATION MADE
seconded the motion.
HEREUNDER.*
2020 - 38
S. Smith provided the Board with an Energy Storage (ES) Plan
Update as part of the Assembly Bill 2514 compliance requirement. S
Smith explained the future needs for APU due to increased
intermittent renewables in the state and battery -based ES systems and
being able to economically address the issues caused by the
renewables. APU determined a 50 Megawatt (MW) 2 hour duration
project is recommended by the year 2026, and that this
recommendation was confirmed by an external consultant. The
contract structure will be determined at the time of the request for
proposals to verify the pros and cons of contracting. Further, the
recommendation was to eliminate the 1MW pilot project by 2021,
because of the large ES price decline, economies of scale, and a
better -established market.
The Board asked about the size of the project and if APU could stack
ES containers. It was explained certain vendors could host up to a 50
MW 4-hour battery on about one acre of land. While stacking is
possible, staff is not planning to do it, because this will be APU's first
ES project and wants to mitigate potential safety issues.
7. APPROVAL AND AUTHORIZATION OF THE FISCAL
YEAR 2019/20 NET WRITE-OFF OF UNCOLLECTIBLE
UTILITY ACCOUNTS. *
B. Beelner, Assistant General Manager — Finance and
Administration, requested the Board to approve and authorize APU
to write-off $783,531 in net uncollectible accounts for the prior
fiscal year. The amount represents 0.15% of total revenue, which
is less than the industry average of 0.33%, and is 9.6% lower than
the previous year's write-off. B. Beelner explained that write-off
amount is relatively low even with the current economic situation
because the majority of the write-off occurred before the stay-at-
home order was issued. B. Beelner explained that the APU has
stopped all disconnections for non-payment as well as late fees and
penalties during this period. He indicated that APU is expecting a
larger write-off for the next fiscal year due to the current economic
situation. Lastly, B. Beelner provided an overview of the financial
assistance programs and outreach efforts that APU offers to help
customers with their bills or receive assistance.
8. QUARTERLY STATUS REPORTS ON CAPITAL
IMPROVEMENT PROJECTS, MASTER AGREEMENTS,
GENERAL SERVICES AGREEMENTS, AND SPOT BID
AWARDS FOR THE QUARTER ENDING JUNE 30, 2020.
J. Lonneker, Assistant General Manager — Electric Services, and
M. Moore, Assistant General Manager — Water Services, reviewed
the Quarterly Expenditure Reports and Capital Improvement
Project Dashboard for APU Electric and Water divisions. J.
Lonneker noted that the electric expenditures -to -date are less than
the adopted budget for the fiscal year 19/20 due to multi -year
reliability and underground conversion project costs encumbered
MOTION VIA ROLL
CALL VOTE CARRIED:
6-0.
ABSTAINED: 0.
ABSENT: 1 [J. Showalter].
A. Abdulrahman moved
approval and authorization
of the Fiscal Year 2019/20
net write-off of uncollectible
utility accounts. R. Bhalla
seconded the motion.
MOTION VIA ROLL
CALL VOTE CARRIED:
6-0.
ABSTAINED: 0.
ABSENT: 1 [J. Showalter].
2020 - 39
in the first year after Council has approved the construction award,
while the actual expenditures will be forthcoming in subsequent
years. M. Moore noted the same for water main replacements and
pumping station upgrades such as the Linda Vista Complex Phase
2 upgrade. M. Moore also mentioned the completion of the Lenain
Water Treatment Plant Upgrade and Expansion.
9. UPDATE ON ELECTRIC SYSTEM ISSUES.
J. Lonneker provided an update to the Board on the completion by
staff of the written procedures known as Directives for System
Operators specifically for the Operation of Distribution Circuits in
Anaheim Fire Threat Zones (FTZ). These written procedures were
a recommendation after review of the APU 2020 Wildfire
Mitigation Plan by the Independent Evaluator, GuideHouse, as a
best practice completed prior to the start of fire season. J.
Lonneker made the Board aware that APU operations provided the
training for these procedures and will be included in annual
training conducted for overall wildfire mitigation.
J. Lonneker shared with the Board that wildfire cameras were
recently installed at two additional locations in east Anaheim for a
total of four locations to date. The camera views are available on
Alert Wildfire.org and viewable from the Anaheim Fire and
Rescue (AF&R) Dispatch center and APU Operations center. J.
Lonneker noted that APU continues to work with AF&R and the
University of California - San Diego to identify additional sites in
the future.
10. UPDATE ON WATER SYSTEM ISSUES.
M. Moore reviewed the water supply dashboard with the Board.
M. Moore indicated that storage levels for the local Orange County
Groundwater basin are very good and Lake Mead water levels are
increasing. Dry conditions in northern California have greatly
reduced available storage in the State Water Project and
Metropolitan Water District (MWD) currently only allowed to
pump 20% of their allocation. The Board asked if APU is still
recharging imported water to the Orange County Groundwater
basin since many agencies can no longer pump due to
Polyfluoroalkyl Substances (PFAS) regulations. M. Moore
indicated that Orange County Water District is no longer
recharging imported water to the Anaheim Lake due to PFAS.
M. Moore shared with the Board the bee removal operations from
meter boxes and electrical equipment. He also indicated to the
Board that the Lenain Water Treatment Plant Rehabilitation project
is almost complete, and that new landscaping was installed on the
south side of the reservoir -walking trail, which provides a sitting
area for pedestrians. The dedication ceremony is being delayed;
Board members interested in
touring the Lenain Water
Treatment Plant may contact
P. Oviedo.
2020 - 40
however, Board members may request a tour by contacting Peggi
Oviedo.
11. UPDATE ON FINANCE ISSUES.
B. Beelner, Assistant General Manager — Finance and
Administration, discussed the monthly dashboard with the Board.
He indicated that the fiscal year to date, electric revenue through
June 30, 2020 was 5.6% below budget ($24.OM) due primarily to a
temperate summer causing low retail demand coupled with lower
commercial and industrial demand due to stay at home orders.
Operating expenditures fell below budget by 9.4% ($36.6M) also
due to lower than expected demand along with lower than expected
wholesale power prices causing a positive net budget variance of
$12.6M. B. Beelner then mentioned that year to date, water
revenue was 4.5% ($4.OM) below budget due to weaker than
anticipated customer demand due to a temperate summer and
lower commercial/industrial demand related to stay at home
orders. Costs were below budget as well by 1.4% ($1.OM) causing
a negative net budget variance of $3.OM.
12. UPDATE ON POWER SUPPLY ISSUES.
G. Bowen, Assistant General Manager — Power Supply, provided
the Board with a summary of APU's Power Supply portfolio and
performance for the fiscal year ending June 2020. G. Bowen
indicated that overall performance was mixed for the year, with
good performance in the first half of the year, but under
performing in the last half. G. Bowen mentioned this was due to
the cooler weather as the main driver and to the Governor's stay at
home order for Coronavirus in April. G. Bowen indicated the
renewable portfolio performed well for the year with only a 3%
deviation from forecasted. However, that conventional generation
performance suffered as a result of the Kraemer Power Plant being
decommissioned in December of 2019.
13. UPDATE ON ENTERPRISE RISK AND COMPLIANCE.
J. Lehman, Chief Risk Officer, provided the Board with an update
on the Energy Risk Management report (ERM) and confirmed that
all wholesale energy transactions for the first quarter of this year
were within the program requirements and that there had been no
violations. J. Lehman indicated that during this period, the ERM
was revised to address changing market conditions and that APU
was selected by the California Independent System Operator
(CAISO) for a random audit of the new program. The audit went
well and there were no findings.
J. Lehman also provided a briefing on the Internal Compliance
Plan report and indicated that APU was in compliance with
requirements and there were no violations during this period.
2020 - 41
J. Lehman then provided an update on the current legislative
activities. She mentioned that the legislative session focused on
COVID-19 and social justice related issues. She also reported that
there were still several utility bills working though the processes
that were being watched closely, and that reports had been
provided to the PUB Legislative Working Group on the remaining
bills. J. Lehman also highlighted that the May 1, 2020 Presidential
Order on Securing the US Bulk Power System had generated
efforts throughout the utility industry, including APU, to ensure
utility systems were secure from foreign adversary supply chain
risks.
14. ITEM(S) BY SECRETARY.
D. Lee stated that limited in -person Board meetings are
recommended, to continue with the use of facial coverings and
reduced meeting participants.
D. Lee shared with the Board the items scheduled for the following
Board meeting include:
• Update on Groundwater Treatment project
• Utilities Success Indicators Update
• General Services Agreements for Electric Projects
• Amendment for an Agreement with Orange County
Sanitation District
D. Lee reported that the first floor Customer Service lobby is open
to the public, with proper safety precautions having been
implemented, and between 30-50 residents are coming to Anaheim
West Tower daily. D. Lee reported three APU employees have
contracted Coronavirus, and are in different stages of recovery.
Additionally, postcards related to ongoing litigation regarding the
General Fund Transfer will be sent out this month, and any
questions should be directed to A. Kott, Assistant City Attorney.
D. Lee discussed APU's business newsletter that provides utility
updates, tips, and efficiency program information.
15. ITEM(S) BY BOARD MEMBERS.
A. Abdulrahman thanked APU staff for the information that was
provided at the meeting.
V. Baroldi said he was pleased to see APU staff in person.
E. Medrano expressed his gratitude for the condolences card from
APU staff for the recent passing of his father.
P. Oviedo will forward
newsletter to the Board.
2020 - 42
16. ADJOURNMENT: (NEXT REGULAR MEETING ON Vice Chairperson J.
AUGUST 26, 2020 AT 5:00 P.M. PLEASE BE ADVISED Seymour moved to adjourn
THAT BOARD MEMBERS WILL PARTICIPATE IN THIS the Regular Meeting at 6:48
MEETING TELEPHONICALLY.) p.m. to the Board's Regular
Meeting date of August 26,
2020 at 5:00 p.m. in the 11th
Floor Large Conference
Room of Anaheim West
Tower. V. Baroldi seconded
the motion.
MOTION VIA ROLL
CALL VOTE CARRIED:
6-0.
ABSTAINED: 0.
ABSENT: 1 [J. Showalter].
Respectfull submitted,
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.
2020 - 43