Public Utilities 2020/09/23ITEM # 04
2. PRESENTATION: REVENUE PROTECTION.
C. Dalton, Interim Electric Field Superintendent, gave a
presentation on the Anaheim Public Utilities Department's (APU)
Revenue Protection efforts to identify and prevent theft of services
or tampering with utility equipment. C. Dalton provided an
overview on the financial impact of diversion to other customers,
where diversion leads come from, and the process for investigating
those leads. He indicated that in Fiscal Year 2019/20 over 5,000
inspections were conducted, and the resulting activities to prevent
diversion are projected to save ratepayers nearly $2 million in lost
revenue. C. Dalton presented the Board with examples of
diversions that APU discovered and discussed efforts to help Code
Enforcement and the Anaheim Police Department eliminate illegal
businesses in Anaheim —particularly marijuana dispensaries and
unpermitted short term rentals.
The Board asked how APU staff identify themselves when
approaching residences and businesses. C. Dalton explained that
staff first attempts to introduce themselves; however, there are
instances during the investigative process where they approach the
property unannounced to gather evidence once tampering is
suspected. C. Dalton explained that a high percentage of field
investigations result in either a malfunctioning meter, a vacant
structure, or water leak. The Board expressed concern that staff is
not adequately providing customers with identification, and
recommends staff identify their presence. J. Lonneker indicated
that she will review with staff to adjust practices for approaching
private property, especially during instances of low probability of
theft.
Lastly, the Board inquired about terminating services to un-
permitted short-term rentals as they related to "party houses" to
which staff clarified that these locations were AirBNB/VRBO-type
businesses and that due process was fully afforded to the operator
prior to the disconnection of any service.
3. PRESENTATION: POWER SUPPLY PORTFOLIO MIX.
J. Stambler, Integrated Resources Planner II, gave a presentation to
the Board about the APU Power Supply Portfolio Mix has evolved
from 2010 to 2020 and what the portfolio is projected to look like
by 2030. He gave an overview of Senate Bill (SB) 100 and APU's
compliance plans and efforts to reduce portfolio emissions through
coal divestiture and renewable purchases over time.
J. Stambler then described how the utility provides a Power
Content Label (PCL) to customers each year that provides a
nutrition -like label that reflects the resource mix of electricity used
to serve customers. He explained how the California Energy
Commission (CEC) modified the PCL calculation method at the
end of 2019 that appears to increase APU's 2019 PCL coal
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percentage even though energy delivered from coal resources did
not increase.
The Board requested a presentation at a future Board meeting that
projects the potential cost impacts of legislation on power
resources over the next 10 years.
4. PRESENTATION: EMERGENCY RESPONSE PLANNING.
D. Schmidt, NERC Compliance and Emergency Response
Planning Manager, provided an update and overview of APU's
emergency response planning activities for the year. D. Schmidt
discussed the activation of the City's Emergency Operation Center
(EOC) related to COVID, provided a description of some of the
resources created to support these EOC operations, and mentioned
the annual update of APU's Emergency Response Plan.
5. FY 19/20 ANNUAL REPORT FOR DEPARTMENT ORDER
310 — EXTRA WORK / CHANGE ORDERS.
J. Lonneker, Assistant General Manager — Electric Services,
explained to the Board the purpose of Department Order (DO) 310
to document the procedures APU follows for approval of extra
work scope and cost changes on construction projects and
professional services. J. Lonneker indicated that this report is
provided to the Board to summarize such changes for both electric
and water projects for the Fiscal Year 2019/20. The total contract
amount for 19 awards was $75.3M and total expenditures were
$74.5M, or a 1% differential.
J. Lonneker and M. Moore, Assistant General Manager — Water
Services, highlighted some of the larger change order amounts
explaining the added or removed work scope affecting the total
cost of the project and noted the change orders previously
approved by City Council, such as on Harbor Substation related to
unforeseen site conditions and design changes.
6. UPDATE ON ELECTRIC SYSTEM ISSUES.
J. Lonneker informed the Board on the high number of power
outages resulting from record temperatures that occurred on
September 5 and 6, 2020. J. Lonneker explained that heat -related
outages typically involve burned -out equipment and require
multiple crews, doing more repairs, even though fewer customers
are impacted. She noted that there were 29 outages over a 3-day
period, when the average is 15 outages over an entire month. J.
Lonneker indicated that 360 customers were affected. she
explained that in preparation for the heat wave, crews were
stationed at the APU yard both days but could not keep up with
the number of outages and therefore APU contractors and mutual
aid was requested from nearby utilities. J. Lonneker mentioned
that two contractors (Asplundh and Parkia) as well as Burbank
Staff will make a future
presentation on the projected
cost impacts of legislation
on power resources.
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Water and Power were able to assist. J. Lonneker and staff will
identify equipment in need of accelerated replacement and present
that replacement program to the Board at a future meeting.
The Board asked a series of questions regarding the lifespan of
transformers and average age of the equipment. They also
inquired about whether the ongoing pandemic added to the
outages because more people are at home using their equipment.
Staff provided brief responses and will incorporate additional
information into the future presentation on the replacement
program.
J. Lonneker shared with the Board a letter sent by the Orange
County Business Council (OCBC) addressed to F. Barvarz,
Transmission and Distribution Engineering Manager, in
appreciation for serving on the OCBC 5G wireless panel at their
2020 Economic Development Forum on August 4, 2020. J.
Lonneker indicated that F. Barvarz manages the APU fiber and
telecommunication units and is the subject matter expert on
developing standards and best practices for wireless carriers
deploying 5G throughout Anaheim. F. Barvarz shared lessons
learned with public agencies in the early stages of deployment. J.
Lonneker recognized F. Barvarz before the Board.
Lastly, J. Lonneker updated the Board regarding the residential
pull -box replacement request made during public comments at the
August 24, 2020 Board meeting. The pull -box replacement was
completed in coordination with the customer.
7. UPDATE ON WATER SYSTEM ISSUES.
M. Moore provided the Board with an update on APU's water
supply. He indicated that the new water year starts in October and
will begin the year with good water storage levels. This is
primarily due to lower demands in the region, including Anaheim.
M. Moore then mentioned that September is the beginning of fire
season. He noted that the fires in the San Gabriel Mountains have
deposited ash in the Metropolitan Water District reservoir in
Riverside, which has changed the incoming water quality to the
Lenain Water Treatment Plant. M. Moore mentioned that APU
staff is treating water to ensure it is clean and safe to drink. In
addition, field staff inspected all the fire hydrants in the wildfire
area to make sure they are working properly.
8. UPDATE ON FINANCE ISSUES.
B. Beelner, Assistant General Manager -Finance and
Administration, discussed the monthly dashboard with the Board
indicating that the fiscal year-to-date electric revenue through
August 31, 2020 was 2.2% above budget ($1.7M) due to much
higher than anticipated wholesales to other utilities during the
Staff will develop an
equipment replacement
program and present the
program at a future Board
meeting.
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California Independent System Operator's (CAISO) stage 2 and
stage 3 emergencies. Operating expenditures fell below budget by
3.8% ($2.4M) due to savings from labor vacancies and cutbacks to
various other operating expenses causing a positive net budget
variance $4.1M. B. Beelner then mentioned that year-to-date
water revenue was 3.8% ($0.7M) below budget due to weaker than
anticipated commercial/industrial demand related to the shelter in
place orders. Costs were below budget as well by 8.4% ($1.2M)
causing a positive net budget variance of $0.5M.
Lastly, B. Beelner mentioned that Standard and Poor's recently
affirmed the Electric Utility's credit rating at AA
9. UPDATE ON POWER SUPPLY ISSUES.
G. Bowen, Assistant General Manager — Power Supply, provided
the Board with a summary of the power supply portfolio for
August. He explained that Canyon Power Plant supplied much of
its energy to California's electric grid during the heatwave. G.
Bowen noted that wholesale sales for the month of August
surpassed the power supply forecast and that this trend continued
into early September.
G. Bowen went on to discuss the September heatwave. He
indicated that the heatwave preparedness went smoother in
September than in August and the California Independent System
Operator (CAISO), despite the heatwave, did not call for a Stage 3
Emergency. He mentioned that APU did have Magnolia Power
Plant trip offline during the heatwave on the Saturday and into
Sunday, September 6. The cause was a bad gas supply valve,
which was repaired overnight. Magnolia Power Plant was brought
back online, and dispatched into the market after its repairs were
complete, to assist with the heatwave.
10. UPDATE ON ENTERPRISE RISK AND COMPLIANCE.
J. Lehman, Chief Risk Officer, shared that Governor Newsom had
issued an Executive Order stating that the goal of California to be
at 100% of in -state sales of new passenger and light trucks be zero
emission by 2035, and by 2045 for medium to heavy-duty vehicles,
where feasible. She shared according to the Governor's order, this
ban on sales of fossil fuel based cars is expected to cut future
greenhouse gas emissions overall by 35% and nitrogen oxide
emissions by 80%. J. Lehman indicated that this would likely
increase the shift to electricity as a transportation fuel and the
adoption of electric vehicle technology.
J. Lehman then provided a brief legislative update, and mentioned
that bills that had a chance of becoming law were with the
Governor and that he has until the end of September to either pass
or veto.
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In closing, J. Lehman shared that National Drug Take Back Day
will be Saturday, October 24, 2020. She noted that this event
provides an opportunity for the public to dispose of any unwanted
prescription drugs in a safe manner that helps to prevent the drugs
from entering into the environment and eventually into the water
supplies. The drop off locations will be at Kaiser medical facility
at 3440 E. La Palma, from 10 AM to 2 PM, and at all Walgreens
locations and that, more information is available on the APU
website.
11. ITEM(S) BY SECRETARY.
D. Lee shared with the Board the items scheduled for the following
Board meeting include:
• Line of Credit
• Participating Generator Agreement
D. Lee reported the City implemented an internet rebate program
for income qualified customers and that APU will be facilitating
with the rebate processing. Funding for the rebate program is from
the Coronavirus Aid, Relief, and Economic Security (CARES)
Act.
Lastly, D. Lee shared photos of a street lighting project that was
recently completed on Cypress Street near downtown Anaheim,
where the residents expressed their appreciation for the
improvements.
12. ITEM(S) BY BOARD MEMBERS.
R. Gaona thanked administration staff and field crews for their hard
work.
J. Showalter congratulated F. Barvarz for his recognition.
A. Abdulrahman thanked everyone and expressed his appreciation
for their hard work.
J. Seymour commented on the undergrounding project on Royal
Oak, and indicated that the contractors are doing a good job with
traffic flow considering the complexity of the project.
E. Medrano thanked APU field crews for their hard work during the
power outages, as well as Burbank for their assistance.
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13. ADJOURNMENT: (NEXT REGULAR MEETING ON
OCTOBER 28, 2020 AT 5:00 P.M. PLEASE BE ADVISED
THAT SOME BOARD MEMBERS WILL PARTICIPATE IN
THIS MEETING REMOTELY.)
Re ectfully mitted,
Dukku Lee
Public Utilities General Manager
Vice Chairperson J.
Seymour moved to adjourn
the Regular Meeting at 7:00
p.m. to the Board's Regular
Meeting date of October 28,
2020 at 5:00 p.m. A.
Abdulrahman seconded the
motion.
MOTION VIA ROLL
CALL VOTE 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.
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