Public Utilities 2022/11/16CITY OF ANAHEIM
PUBLIC UTILITIES BOARD
MINUTES
NOVEMBER 16, 2022
The agenda having been posted on Thursday, November 10, 2022, the Regular Meeting of the Public
Utilities Board (Board) was called to order by Chairperson Seymour at 5:10 p.m. on Wednesday,
November 16, 2022, in the Gordon Hoyt Conference Center, 2nd floor, Anaheim West Tower, 201 S.
Anaheim Blvd., Anaheim, California.
Board Members Present: Chairperson J. Seymour, Vice -Chairperson V. Baroldi, A. Abdulrahman,
N. Campos Kurtz, M. Lee, A. Pham
Board Members Absent: At Large Board Member Vacancy
City Staff Present: D. Lee, P. Starr, A. Kott, A. Kott, B. Beelner, J. Lehman, M. Avelino -
Walker, C. Parker, F. Barvarz, A. Nguyen, Y. Saldivar, C. Pereyra, T. Chen,
L. Kwon, R. Trebizo
Guest(s) Present: None
AGENDA ITEM
1. PUBLIC COMMENTS.
2. APPROVAL OF THE MINUTES OF THE PUBLIC UTILITIES
BOARD MEETING OF OCTOBER 26, 2022. *
3. APPOINTMENT OF ALTERNATE MEMBERS FOR THE
PUBLIC UTILITIES BOARD.
This item was inadvertently placed in the agenda, duplicating Item #6
and was therefore requested by Staff to be pulled from the agenda.
ACTION TAKEN
There being no electronic or
oral public comments,
Chairperson J. Seymour
closed the public comments of
the meeting.
N. Campos Kurtz moved the
approval of the Minutes of the
Public Utilities Board Regular
Meeting of October 26, 2022.
M. Lee seconded the motion.
MOTION CARRIED: 4-0-1.
ABSTAINED: 1. [J.
SEYMOUR].
ABSENT: 1.
[VICE CHAIRPERSON V.
BAROLDI].
2022 - 87
6. APPOINTMENT OF ALTERNATE MEMBERS FOR THE
PUBLIC UTILITIES HEARING BOARD. **
Item #6 was moved up in the agenda. Chairperson J. Seymour
indicated he was seeking additional alternate members to serve on the
Public Utilities Hearing Board. Board Member N. Campos Kurtz and
Board Member M. Lee volunteered. Chairperson J. Seymour
confirmed their appointments as alternate members to the Public
Utilities Hearing Board.
4. PRESENTATION: WATER SYSTEM RELIABILITY.
C. Parker, Acting Assistant General Manager — Water Services,
provided a presentation on the Water System Reliability Performance
Indicators and Benchmarking standards. He mentioned that APU's
goal is that our indicators be in the top 25th percentile of all agencies.
C. Parker presented that APU is 98% available for the Lenain Water
Treatment Plant, the goal is 95%, and 28% available for groundwater
wells, and the goal is 75%. Once the Groundwater Treatment
Facilities are completed, well availability will be restored.
C. Parker also presented information indicating that APU has 3.7
main breaks per 100 miles, which is under the goal of 8 miles, and
average system outages are 2.3 hours, which is under the goal of 3
hours. C. Parker mentioned that continued pipeline and valve
replacements are keys to maintaining reliability, and continuing the
valve testing program is necessary to ensure valves work when
needed and to identify those in need of future replacement.
C. Parker discussed the water loss audit. APU had an infrastructure
leakage index (ILI) of 1.08 with a goal of 0.5 and will continue to
research the use of technology to reduce the ILI. The Board asked if
there is a limit on how much water APU can pump out of the
groundwater basin. C. Parker responded that there is no limit;
however, the Orange County Water District (OCWD) Replenishment
Assessment fee is cost prohibitive above a certain percentage of water
supply. Currently, APU can pump 77% of its water supply without
paying a cost prohibitive Replenishment Assessment fee. The Board
asked about the cost of water loss, and C. Parker responded that it is
roughly 5%, and that techniques to reduce losses are being reviewed
by staff.
The Board asked questions regarding calculation methods, digital
versus analog meters, new developments, supply chain issues, and
testing procedures, which C. Parker addressed.
5. PRESENTATION: FINANCIAL OVERVIEW AND UPDATE.
A. Nguyen, Utilities Financial Manager, provided a financial
overview presentation reviewing APU's key financial strategies and
2022 - 88
goals, underscoring how customers have the freedom to choose
alternative rate options instead of being forced to accept something
that may not meet their needs and having to opt -out later. He also
spoke about the importance of cost recovery to keeping financial
operations sustainable, and how modest, periodic rate adjustments are
preferred to minimize the risk of a larger rate increase.
A. Nguyen analyzed impacts to electric and water sales, describing
how the current drought in California will impact water sales, and that
budget -based water rates are receiving more attention among State
policy makers. Additionally, he discussed the challenge of integrating
renewables for California due to the supply/demand imbalance
occurring in the late afternoon and evening hours, and how the
retirement of baseload resources makes the issue even more difficult.
Discussing APU's current financial situation, A. Nguyen described
how efforts to curtail operating expenses and defer capital
investments during the height of the pandemic -related shutdowns not
only helped APU get through that period, but it positioned APU to
better withstand inflation, rising interest rates, and supply chain
challenges. He also described a focus on cash -financing a greater
portion of capital investments, bond refinancing efforts that have
saved approximately $215 million for rate -payers over the last
decade, and applying such savings to future years for greater financial
and operating flexibility.
Before concluding, A. Nguyen described why Anaheim's electric
rates are lower than its peers, explaining that electric utilities in the
State have different risk profiles, and how the investor -owned utilities
are investing considerably in wildfire mitigation because they have
been exposed to billions of dollars in liabilities from wildfire -related
damages. He indicated that because Anaheim does not have the same
risk profile in this area as other agencies, APU has more flexibility in
balancing its capital needs with keeping rates affordable. He also
mentioned that while investor -owned utilities may provide a billion
dollars in annual dividends to its shareholders, APU passes any
savings generated to its customers -owners in the form of affordable
rates.
7. ADOPT THE PROPOSED PUBLIC UTILITIES BOARD
MEETING SCHEDULE FOR THE 2023 CALENDAR YEAR. **
M. Lee moved the approval of
the Proposed Public Utilities
Board Meetings Schedule for
the 2023 Calendar Year. A.
Abdulrahman seconded the
motion.
MOTION CARRIED: 6-0.
ABSTAINED: 0.
ABSENT: 0.
2022 - 89
8. UPDATE ON ELECTRIC SYSTEM ITEMS.
F. Barvarz, Electric Transmission & Distribution Manager, updated
the Board on the advisory guidance issued in October by the Wildfire
Safety Advisory Board (WSAB) regarding the 2022 wildfire
mitigation plans submitted by each Publicly Owned Electric Utility in
California. WSAB recognized APU's Wildfire Mitigation Plan (Plan)
as being well -written and comprehensive. The advisory guidance also
recognized APU's extensive program to reduce wildfire risks through
vegetation management, system inspection and hardening, and recent
addition of two new wildfire cameras overlooking Oak Canyon
Nature Center which is located in a high fire threat zone within a
residential area. WSAB's feedback also complimented APU's
customer programs that includes use of emergency generators when
warranted to reduce impact of outages, and rebates for attic insulation
and vents to harden homes against wildfire risks. F. Barvarz
mentioned WSAB's recommendations for the 2023 Plan was to more
easily find the APU's webpage for its wildfire mitigation measures,
and provide reference for the statement that 75% of fire ignitions in
California are caused by 10 tree species.
F. Barvarz then described APU's inspection of over 260 wooden
transmission poles as a result of pole failures during last
Thanksgiving's windstorm, and the planned complete system
inspection in 2023. He then described an incident where a wooden
streetlight pole failed in late October due to extensive termite
damage, causing no injuries but damaging a car parked nearby. The
Board asked how frequent pole inspections are performed. F. Barvarz
explained that the cycle is determined by following state guidelines,
and to inspect the entire system takes 18 months.
9. UPDATE ON WATER SYSTEM ITEMS.
C. Parker, Acting Assistant General Manager — Water Services,
shared with the Board the water supply conditions, indicating the
groundwater basin is in good condition but the imported water
sources are strained. The State Water Project is still at 5% allocation
and the Delta Conveyance Project (Project) is in the environmental
phase. The Project is to covey water under the delta it is more
environmentally friendly and will deliver water more reliably.
The Colorado River system is quite strained with all seven states
trying to find solutions to conserve more water. It is possible that the
imported water sources will be in allocation which means there may
be reduced water available to Anaheim if the storm season is weak
this year.
A new constituent of the PFAS family, Perfluorohexane Sulfonic
Acid (PFHxS), is now regulated by the State of California and has
been detected in very low levels in the groundwater basin. APU will
have to notify the City Council next spring that this constituent is in
2022 - 90
the Anaheim water supply. Once the Groundwater Treatment Plants
are completed, PFHxS will be removed from the water supply.
10. UPDATE ON FINANCE & ENERGY RESOURCES ITEMS.
B. Beelner, Assistant General Manager of Finance and Energy
Resources, discussed the monthly Finance Dashboard with the
Board. The year to date electric revenue through October, 2022 was
17.5% above budget ($27.OM) due to warmer temperatures driving
up higher than expected wholesale, retail, and transmission revenue.
Electric costs for the fiscal year were also above budget by 8.8%
($12.1 M) due to higher than expected fuel and energy costs causing
a net positive budget variance of $14.9M. B. Beelner then mentioned
that year to date water revenue was 1.0% ($0.4M) above budget and
water operating costs fell below budget by 5.5% ($1.6M) causing a
net positive budget variance of $2.OM.
B. Beelner then discussed with the Board the Power Supply
Dashboard and discussed the continued positive trend in wholesale
revenue. B. Beelner mentioned that APU capitalized on
Intermountain Power Project (IPP) operating at full capacity for the
summer coupled with much higher than normal energy prices and
pointed out that average wholesale energy prices for the summer of
2022 were almost double the prices during the same period in 2021.
11. UPDATE ON ADMINISTRATION & RISK SERVICES ITEMS.
J. Lehman, Assistant General Manager — Administration and Risk
Services, invited the Board's attention to the 2022 Legislative Wrap -
Up Report which covers the second year of the two-year 2021-22
legislative session and mentioned that it had been an overall
successful year. She reviewed several bills, and also highlighted
legislation that she expects to see next year.
J. Lehman then provided an update on the Safety Program's October
metrics.
12. ITEMS BY SECRETARY.
D. Lee, Public Utilities General Manager, shared agenda items planned
for next month:
• Presentation on Organizational Development
• Electric Industry Survey
D. Lee provided an update regarding the Public Utilities Hearing Board
meeting. The Hearing Board met earlier at 4:00 PM to review a
customer's complaint regarding his water bill, and has 15 days to
provide a written determination to the customer. An update will be
provided to the Board at the December meeting regarding the
determination.
2022 - 91
D. Lee presented photos from several neighborhood meetings. One
meeting was in the Clifton Neighborhood where APU partnered with
Community Services in providing outreach to customers. The other one
was in the Edison Park Neighborhood where the residents were
concerned about safety. APU upgraded the street lights to a higher
wattage level of LED lights.
Melinda Avelino -Walker, General Services Manager, shared photos
from several student engagement efforts. One was of a high school
student resident who reached out to Council Member Faessel in regards
to sustainable resources; staff provided her and her father with a tour
and information about sustainability initiatives. Higher Ground reached
out to APU to participate in their Trades Day where students met with
Electric Substation staff. Lastly, Katella High School students were
provided a tour of Lenain Treatment Plant and Walnut Canyon
Reservoir.
13. ITEMS BY BOARD MEMBERS.
Board Member A. Pham shared that he had an opportunity to attend a
community meeting and thanked APU for attending the event. He
added that environmental factors, such as lighting, are very important.
A. Pham also mentioned that UC Irvine has a PFAS Health Study
going on in Orange County which is part of a national health study
with the Centers for Disease Control (CDC). Residents of Anaheim
qualify to participate in the Study. If interested, they can go to UCI
PFAS Health Study on the internet to obtain more information.
Board Member M. Lee thanked C. Parker for educating the Board
about Perfluoroalkyl and Polyfluoroalkyl (PFAS) and encouraged
APU to provide outreach to Anaheim residents to further educate
them on PFAS. He added that APU's outreach programs are well
done.
Board Member N. Campos Kurtz shared that she attended the
Veteran's Day Ceremony and appreciated that APU handed out green
light bulbs in support of our Veterans and thanked APU for
consistently taking part in community events.
Board Member A. Abdulrahman wished everyone a Happy
Thanksgiving.
Chairperson J. Seymour mentioned that there are three Board
Members that term out at the end of the year, plus one open vacancy
and requested that A. Kott, Assistant City Attorney, reach out to the
members that are terming out to share if they are eligible for an
additional term and ensure they know the dates by which they need to
apply to their Council Member to seek reappointment.
2022 - 92
14. ADJOURNMENT: (NEXT REGULAR MEETING ON
DECEMBER 21, 2022 AT 5:00 P.M.)
Respectfully su mitted,
Dukku Lee
Public Utilities General Manager
N. Campos Kurtz moved to
adjourn the Regular Meeting
in the Gordon Hoyt
Conference Center at 6:45
p.m. to the Board's Regular
Meeting date of December 21,
2022 at 5:00 p.m. A. Pham
seconded the motion.
MOTION CARRIED: 6-0.
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.
2022 - 93