Public Utilities 2022/04/27ITEM # 01
ABSENT: 2 [R. Bhalla, M.
Lee].
4. APPOINTMENT OF UP TO THREE MEMBERS TO THE AD
HOC STUDENT SCHOLARSHIP SELECTION COMMITTEE.
Chairperson J. Seymour indicated that he was seeking three Board
members to serve on the ad hoc Student Scholarship Selection
Committee. N. Campos Kurtz, A. Pham, and V. Baroldi
volunteered. J. Seymour confirmed their appointments to the ad hoc
Student Scholarship Selection Committee.
5. PRESENTATION: CALIFORNIA INDEPENDENT SYSTEM
OPERATOR (CAISO) OVERVIEW.
E. Krause, Integrated Resources Manager, presented an overview of
the California Independent System Operator (CAISO). E. Krause
began with a timeline depicting the evolution of the power markets,
elaborating on the transition from regulated markets to the current
deregulated CAISO markets and separation of transmission access
and market pricing. Grid Operators across North America were
depicted showing the geographic regions in which they control and
monitor the transmission grid. Discussion continued regarding the
CAISO's role as a Balancing Authority, which manages generation
needs to serve load requirements across 80% of California.
E. Krause shared the review of the primary functions and
responsibilities of the CAISO. The function of grid reliability and
the need to have resources available to manage contingency events
was discussed elaborating on the past 2011 San Diego blackout and
causes. The discussion about grid reliability concluded with
information about Anaheim Public Utilities' (APU) role requiring
supply of sufficient resources to meet planning reserve margins
throughout the year along with following any CAISO orders or
instructions to dispatch resources and drop load if necessary to
avoid grid instability. The discussion of CAISO functions and
responsibilities continued with infrastructure planning, elaborating
on the process and needs for transmission planning and capacity
planning as the resource mix and load requirements change over
time. APU's role in providing access to its transmission portfolio
was discussed along with payment for use of transmission turned
over to CAISO operational control as well as rates of CAISO
transmission to supply resources to the grid, allowing access to
resources throughout the state. The final function of CAISO market
operations was presented, showing the balancing which must be
done throughout the day on interval bases to match supply and
demand. APU's participation in the energy markets was discussed
along with future use of the battery energy storage system to
balance increasing intermittent resources and supply ancillary
services to the grid. Market operations was demonstrated with a
chart depicting a vat of water and flows in and out to visualize how
balance is maintained on the grid.
E. Krause explained expansion of the energy markets into
surrounding balancing authorities and a discussion on the Energy
Imbalance Market (EIM) which supports clean energy goals
allowing neighboring balancing authorities to balance supply and
demand. Solar production was used as an example, high
penetrations in one balancing authority could be shifted to another
balancing authority that is in need of generation, balancing over a
wider footprint and minimizing the geographical impacts of
intermittent resources.
The presentation concluded with a reiteration of the grid
mechanisms to balance occurring minute by minute and automated
generation controls which occur every four seconds to maintain grid
reliability and flexibility in order to keep the lights on.
The Board inquired about generators being controlled by computers
to move the generation and balance the production; E. Krause
explained how generators are, in some cases, controlled by
computers through Automated Generation Control (AGC) and also
shared that there are other cases, as where Canyon Power Plant uses
APU technicians to dispatch the units.
The Board inquired why APU needs to follow CAISO direction to
reduce load in emergencies. D. Lee responded that APU must
follow the orders of the CAISO to avoid larger disruptions on the
grid, such as cascading blackouts. E. Krause shared this is a
requirement of the CAISO Tarriff and must be followed to avoid
penalties and maintain compliance.
6. PRESENTATION: FY 2023 STRATEGIC BUDGET PLAN.
C. Pereyra, Utilities Budget and Performance Administrator, began
her presentation with an overview of the Fiscal Year (FY) 23
Strategic Plan, vision and mission statement, the four -step budget
process, and strategic goals. C. Pereyra then discussed the FY 22
budget projections for both expenses and revenue, explaining that
the largest expense variance was related to multi -year capital
projects for which funds would be carried over into the proposed
fiscal year after budget adoption.
C. Pereyra showed a short video highlighting how APU's current
year programs and projects align with the four strategic goals
identified during the budget process. She also described FY 23
proposed expenditures, indicating that power supply costs would be
increasing due to increased natural gas and debt service costs
associated with the Magnolia Power Plant, and that water supply
costs would be decreasing because less treated water purchases
were expected.
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C. Pereyra reviewed key strategies that are included in the proposed
budget and aligned with APU's strategic goals. The Board inquired
about the cost of the proposed Sustainability Education Center and
whether it was a worthwhile investment. D. Lee described current
efforts to receive federal grant funds for the project that is currently
estimated at $8M, and M. Avelino -Walker briefly described the
positive feedback she has received from the community regarding
the proposed project and how it would supplement local community
students' education with hands-on, STEM -based experience and
exposure to careers in the water and energy fields.
C. Pereyra closed the presentation sharing how APU continues to
monitor performance through the Utilities Success Indicators,
highlighted upcoming events including City Council workshops and
budget adoption, and invited Board members to submit any
questions before next month's meeting.
7. BY RESOLUTION, RECOMMEND DECLARING A WATER
SUPPLY SHORTAGE AND ORDER THE
IMPLEMENTATION OF WATER REDUCTION PLAN II IN
ACCORDANCE WITH CHAPTER 10.18 OF THE ANAHEIM
MUNICIPAL CODE IN RESPONSE TO PROLONGED
DROUGHT CONDITIONS. *
C. Parker, Water Engineering Manager, briefed the Board on the
current drought, California's response, and APU's response. C.
Parker indicated that this is the third year of the drought, so more
action is now needed to mitigate the impacts of the drought.
The Governor issued an Executive Order in March ordering water
agencies to move to Level 2 of their water shortage contingency
plans, allowing three days of watering per week for irrigation, as
well as other mandated actions, such as no runoff of irrigation
outside landscaping, no washing of sidewalks or hardscape, and no
watering for two days after rain. C. Parker shared that APU will be
launching an education campaign to assist customers in meeting the
mandate, as well as offering rebate programs to reduce water use.
The Board requested that staff contact Home Owners Associations
(HOAs) and their landscape maintenance companies to provide
additional education and outreach regarding Anaheim's
implementation of its Water Reduction Plan II. C. Parker indicated
that staff will contact those groups. The Board inquired about the
respective percentage reduction in each level of the Water Shortage
Contingency Plan. C. Parker shared that Level 1 is voluntary at
about 15%, Level 2 is mandatory at about 11% to 20%, Level 3 is
mandatory at about 35%, Level 4 is mandatory greater than 35%,
and Level 5 is a much higher threshold. There was a question about
the percentage of residential and commercial customers. B. Beelner,
Assistant General Manager — Finance and Energy Resources,
indicated that the customer make-up is about 60% residential and
40% commercial.
Staff will contact Home
Owners Associations and
landscape companies.
N. Campos Kurtz moved
recommendation, by
resolution, that the City
declare a water supply
shortage and order the
implementation of the Water
Reduction Plan II in
accordance with Chapter
10.18 of the Anaheim
Municipal Code in response
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8. APPROVAL OF POSTING THE 2022 WATER QUALITY
REPORT ON THE ANAHEIM PUBLIC UTILITIES
DEPARTMENT WEBSITE AND PROVIDING
CERTIFICATION OF COMPLETION OF POSTING TO THE
STATE WATER RESOURCES CONTROL BOARD
DIVISION OF DRINKING WATER AS REQUIRED BY THE
CALIFORNIA CODE OF REGULATION.
J. Lehman, Assistant General Manager - Administration and Risk
Services, invited the Board's attention to the 2022 Annual Water
Quality Report (Report) detailing that APU either met or exceeded
all federal and state water quality requirements. J. Lehman noted
that the state Division of Drinking Water issued a violation due to
APU missing one test of untreated water; this was self -reported and
the test was promptly collected.
J. Lehman requested the Board's approval to post the Report on the
Department's website and certify to the State Water Resource
Control Board when the posting was completed.
9. QUARTERLY STATUS REPORTS ON CAPITAL
IMPROVEMENT PROJECTS, MASTER AGREEMENTS,
GENERAL SERVICES AGREEMENTS, AND SPOT BID
AWARDS.
D. Lee, Public Utilities General Manager, commented that the
Quarterly Status Reports are available for Board review and noted
that use of the contract agreements have been a useful tool for staff
in completing a high volume of both water and electrical reliability
projects and larger design -build water projects in a timely manner.
J. Lonneker, Assistant General Manager — Electric Services, briefed
the Board members on the Electric Capital Improvement Program
summarizing that project completing is on track and within budget
for the third quarter of FY 21-22. J. Lonneker highlighted several
capital projects including LED streetlight conversion and cable and
transformer replacement projects.
C. Parker, Water Engineering Manager, briefed the Board members
on the Water Capital Improvement Program (CIP). He noted that
the CIP is on track to complete the majority of the projects. He
mentioned that the Indiana St. Pipeline is now completed, other
than final paving. The drilling of Wells 60 and 61 will be completed
in June 2022. The Board asked about the issue of PFAS
to the prolonged drought
conditions. V. Baroldi
seconded the motion.
MOTION CARRIED: 5-0.
ABSTAINED: 0.
ABSENT: 2. [R. Bhalla, M.
Lee].
A. Abdulrahman moved the
approval of the posting of
the 2022 Water Quality
Report on the Anaheim
Public Utilities Department
website and providing
certification of completion
of posting to the State Water
Resources Control Board
Division of Drinking Water
as required by the California
Code of Regulation. A.
Pham seconded the motion.
MOTION CARRIED: 5-0.
ABSTAINED: 0.
ABSENT: 2. [R. Bhalla, M.
Lee].
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(polyfluoroalkyl) affecting the new wells. C. Parker indicated that
treatment facilities will be co -located at the well site to treat the
groundwater. C. Parker also provided an update on the Groundwater
Treatment Program.
10. UPDATE ON ELECTRIC SYSTEM ITEMS.
J. Lonneker, Assistant General Manager — Electric Services, made
the Board aware of recent power outages requiring extensive repairs
over the past month. These outages included a canopy entangled in
the power lines during elevated winds; a vehicle hit pole on East
Street requiring replacement, which impacted approximately 400
customers; and a power outage along Harbor Boulevard impacting
nearby hotels for an extended period of time due to equipment
damage. J. Lonneker shared with the Board that a public service
announcement will be posted as a reminder to tie down objects and
customers with extended outage duration will receive a bill credit.
11. UPDATE ON WATER SYSTEM ITEMS.
C. Parker, Water Engineering Manager, briefed the Board on the
water supply condition, the annual Water Poster Contest recognition
event at the Honda Center on April 19th, and the pipe tapping
contest by the American Water Works Association (AWWA)
California/Nevada section (CA/NV) Conference on April 12t' in
which APU water field staff participated. In addition, he announced
that on Saturday, April 30'', from 9:00 am to 11:00 am there will be
an open house at Boysen Park to share information with the public
about the groundwater treatment project at the park.
12. UPDATE ON FINANCE & ENERGY RESOURCES ITEMS.
B. Beelner, Assistant General Manager — Finance & Energy
Resources, shared with the Board that the Intermountain Power
Authority (IPA) approved a new operational rule allowing
participants, such as APU, to pre -determine the amount of energy
they will need from the Intermountain Power Project (Project) this
summer. Because the Project still has fuel supply constraints,
allowing participants to determine how much fuel they need to burn
during the summer and how much they should save for the fall will
allow for greater operational flexibility.
B. Beelner then discussed the recent Electric and Water bond sales.
B. Beelner mentioned that due to a downturn in the bond market,
APU did not sell as many bonds as it had intended to because the
refunding (refinancing) savings were not optimal for some of the
earlier refunding candidates due to rising interest rates. APU was
still able to sell approximately $500 million of bonds, with $175
million as new money to invest in the system, and $325 million of
refunding bonds with an average interest rate of 3.68% for the
electric bonds and 3.97% for the water bonds. B. Beelner noted that
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the refunding's will save APU customers approximately $18
million in future interest costs.
13. UPDATE ON ADMINISTRATION & RISK SERVICES
ITEMS.
J. Lehman, Assistant General Manager - Administration and Risk
Services, mentioned that the application for participation in the Low
Income Home Water Assistance program (Program) that had been
recommended for approval by the Board last month was filed. The
State expects the Program to go live in June. At that time, similar to
the State's low income assistance program for electricity, APU will
be able to provide qualifying customers with assistance in paying
their water bill.
J. Lehman then invited the Board's attention to the Administration
and Risk Services Dashboard. She highlighted three bills of interest,
and reported that the PUB Legislative Working Group had met
prior to the PUB meeting to discuss legislative matters in more
detail. J. Lehman then reviewed the safety metrics, noting that there
were no significant injuries.
14. ITEMS BY SECRETARY.
D. Lee, Public Utilities General Manager, shared the following
plans for next month:
• Annual Summer Readiness Presentation
• Update to the Wildfire Mitigation Plan
• Request for Public Hearing Date for the Public Health Goals
Report
• FY 23 Proposed Budget Consideration
D. Lee mentioned that APU received an award from the
Community Services Department for raising $20,000 for the
Anaheim Community Foundation (ACF) through the Helping
Hands program where residents receive a bill insert twice a year to
donate; this helps support the senior and youth programs.
D. Lee shared mentioned the Anaheim facilities tour that Board
Member A. Pham participated in. The tour consisted of visiting the
groundwater treatment facilities, Canyon Power Plant, substations,
and the Downtown Water Recycling Plant. D. Lee added that this
facilities tour is available to all Board members.
D. Lee shared pictures of the Beach Boulevard Sustainability Fair.
The Fair featured test drives of five electric vehicles. There were 55
participants that test drove the vehicles and there were a total of 150
attendees. D. Lee explained how this type of event is a great way
for residents to experience driving electric vehicles in a low
pressure environment. D. Lee also shared that the educational non-
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profit, Inside The Outdoors, was there and brought snakes and small
animals, which allowed the kids in attendance to play with and
really enjoy the experience.
D. Lee mentioned the Earth Day Tree Planting ceremony that took
place at James Madison Elementary and hosted by the Anaheim
Elementary School District. Third and fourth grade students who
created an earth wall of sustainability with notes posted to show
ways to be sustainable. The students also performed a song and
played instruments at the event.
D. Lee mentioned that APU participated in the Anaheim Union
High School Districts "STEAM-a-palooza" event which was also
their open house. APU sponsored electric vehicle solar car kits for a
race activity. The students were challenged to create a sustainable
body for their vehicle using the kit provided. Both junior high and
high school students took place in the race, and D. Lee
congratulated Sycamore Jr. High students for being the winning
team.
D. Lee mentioned that APU participated in a number of
neighborhood meetings including at Water Street and Dickel Street
as well as the Rose -Vine- Bush neighborhood. The neighborhood
meetings are conducted with Community Services, Police and Code
Enforcement. APU staff is available to discuss a variety of
programs including the Dusk -to -Dawn and home efficiency
programs.
15. ITEMS BY BOARD MEMBERS
A. Pham thanked APU for hosting two great events this past month
and shared that he attended both the Beach Boulevard Sustainability
Fair and the Water Poster Contest recognition event. A. Pham
requested a presentation on the Sustainability Education Center and
D. Lee responded that APU is still in the design phase and will have
more information to share soon in the coming months.
N. Campos Kurtz shared that in regards to the Sustainability
Education Center she knows a couple of Board Members were not
part of the Board when this first was discussed so she is looking
forward to more information about it.
V. Baroldi thanked staff for taking care of the matters raised by a
concerned citizen regarding billing issues.
16. ADJOURNMENT: (NEXT REGULAR MEETING ON MAY
25, 2022 AT 5:00 P.M.)
Staff will provide a
presentation on the
Sustainability Education
Center at a future PUB
meeting.
N. Campos Kurtz moved to
adjourn the Regular Meeting
in Gordon Hoyt Conference
Center at 7:36 p.m. to the
Board's Regular Meeting
date of May 25, 2022 at 5:00
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p.m. V. Baroldi seconded
the motion.
MOTION CARRIED: 5-0.
ABSTAINED: 0.
ABSENT: 1. [R. Bhalla, M.
Lee].
Respectfully s mitted,
l
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.
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