Public Utilities 2024/01/24CITY OF ANAHEIM
PUBLIC UTILITIES BOARD
MINUTES
January 24, 2024
The agenda having been posted on Thursday, January 18, 2024, the Regular Meeting of the
Public Utilities Board (Board) was called to order by Chairperson J. Seymour at 4:59 p.m. on
Wednesday, January 24, 2024, 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 A. Abdulrahman,
M. Lee, A. Pham, T. Bilezikjian, A. McMenamin, T. Ibrahim
Board Members Absent: None
City Staff Present: D. Lee, A. Kott, P. Starr, J. Lonneker, B. Beelner, J. Lehman,
C. Parker, M. Avelino -Walker, T. Castaneda, A. Lee, T. Chen,
B. Mendoza, J. Reyes, M. Brownrigg, M. Seifen, A. Nguyen,
Y. Ceniceros
Guest(s) Present: Mayor Pro Tem, N. Campos Kurtz, District 4; Council Member
S. Faessel, District 5; Dr. Vidal Valdez, Principal, Anaheim
Elementary School District; Belinda Gordillo, Communications
Coordinator, Anaheim Elementary School District; Savannah L.,
Student, Ponderosa Elementary School; Samuel Luis, Anaheim
Resident; Mariana Ruiz, Anaheim Resident
Recognition: D. Lee, Public Utilities General Manager, recognized A. Kott, Assistant City
Attorney, who is retiring in February after 24 years with the City of Anaheim (City). Council
Member S. Faessel shared his gratitude for A. Kott's work during her time with the City. The
Board wished A. Kott well in retirement.
AGENDA ITEM
ACTION TAKEN
1. RECOGNITION: THE MET•!,!DISTRICT
OF !CALIFORNIAi POSTER
CONTEST WINNER.
C. Parker, Assistant General Manager — Water Services, recognized
Savannah L., a student at Ponderosa Elementary School, for her
water -wise artwork that was selected by the Metropolitan Water
District of Southern California (MWD). The artwork is included in
the MWD 2024 Student Art Calendar for the month of January.
Mayor Pro Tem N. Campos Kurtz and Council Member S. Faessel,
MWD Director, congratulated Savannah L. for her artwork.
2024-1
2. PUBLIC COMMENTS.
3. APPROVE THE MINUTES OF THEREGULAR MEETING OF
DECEMBER 20,2023. *
4. PRESENTATION: PREPARING FOR TRANSPORTATION
ELECTRIFICATION.
D. Lee briefed the Board on Anaheim Public Utilities' (APU) plan to
prepare for transportation electrification. APU developed a task force
that meets periodically to discuss various initiatives. Three key
drivers moving this initiative forward are environmental policies,
market investments, and consumer and commercial adoption. APU's
Electric Vehicle (EV) Task Force is monitoring the industry and
implementing customer programs, grid enhancements, and
regulatory compliance.
'When preparing for electrification, APU staff considers grid
enhancements, which includes substation rehabilitation and
expansions, new circuits and line extensions, equipment upgrades, as
well as physical and cyber security improvements. APU is
transitioning its fleet and currently has 31 EVs; electric bucket trucks
and vans are on order.
Funding sources to prepare for electrification include State emissions
credits from the Low Carbon Fuel Standard (LCFS) program for the
majority of customer programs, APU electric funds to pay for system
upgrades, public benefit funds to be utilized asLCFS funds are
reduced over time, and grants.
The Board inquired about the impact electrification will have on the
electric system. D. Lee shared that parts of the City will have larger
load centers due to public charging depots, fleets, or other high
usage, and they will require more capacity in those areas. Overall,
the City will have offsetting load from energy conservation, solar,
and building code efficiencies.
The Board inquired where the LCFS funds come from; staff
responded that emissions credits are procured by entities, ,Such as
refineries, and. provided to clean fuel providers such as electric
utilities.
There being no electronic or
oral public comments,
Chairperson J. Seymour
closed the public comments
portion of the meeting.
M.Lee moved the Approval
of the Minutes of the Regular
Meeting of Dece-mber 20,
2023. A. McMenamin
seconded the motion.
MOTION CARRIED: 7-0.
ABSTAINEII. O.
ABSENT: 0.
AGREEMENT WITH BORREGO ENERGY, LLC FOR
SOLAR PHOTOVOLTAIC (PV) SYSTEMS OPERATED BY
ANAHEIM PUBLIC UTILITIES, IN AN ANNUAL AMOUNT
OF $125,000 PER YEAR WITH ROLLOVERS OF UNSPENT
FUNDS TO SUBSEQUENT YEARS AND AN ANNUAL
CONSUMER PRICE INDEX ESCALATOR, FOR A TERM OF
FIVE YEARS WITH UP TO FIVE ONE-YEAR, OPTIONAL
EXTENSIONS. *
B. Beelner, Assistant General Manager — Finance and Energy
Resources, explained the Monitoring and Maintenance Agreement
(Agreement) between the City and Borrego Energy, LLC (Borrego)
to provide monitoring and maintenance of ten locally owned solar
photovoltaic (PV) systems in Anaheim, totaling four (4) Megawatts
(MW), including the Anaheim Convention Center.
In 2023, APU staff issued a Request for Proposals (RFP) for a
vendor to monitor, operate, and maintain these solar PV systems.
APU only received one proposal. The timeframe was extended to
allow for other bidders; however, no other bids were received as
other vendors were too busy with other projects.
B. Beelner explained that the proposal was evaluated and met the
RFP requirements, and staff is therefore recommending an
Agreement with Borrego for a five-year term with five one-year
optional extensions. Borrego's annual base cost of $73,000 is for the
annual maintenance, monitoring, and washing of panels. The
contract allows up to $125,000 per year with funds rolling over to
cover unexpected repairs that arise.
The Board inquired how long Borrego has been in business. M.
Brownrigg, Product Development Specialist, responded that it was
about thirty years. The Board inquired if Borrego's costs are
reasonable and what others are paying. M. Brownrigg responded that
a recent National Renewable Energy Laboratory (NREL) report
states costs for monitoring and maintaining solar energy systems
range from $18-$28 per kilowatt (kW) of solar installed. The
proposed costs for this Agreement are currently at $18.5 per kW.
M. Brownrigg shared that due to the project's size and scope, there
are economies of scale keeping pricing on the lower end of the
NREL range. The Board further inquired if Borrego is currently
performing work in a satisfactory manner; staff responded that there
are no performance issues with Borrego.
T. BilezikJian moved the
Approval of the Agreement
for Monitoring and
Maintenance with Borrego
Energy, LLC. A.
Abdulrahman seconded the
motion.
MOTION CARRIED: 7-0.
ABSTAINED: 0.
ABSENT: 0.
2024-3
6. APPROVE AN AGREEMENT REGARDING THE
i / !
1 ! ! 1
i
C. Parker explained the Agreement regarding the Assignment of
Extraordinary Supply (Agreement) that will allow surplus water
during wet years to be stored in the Orange County Groundwater
Basin. The water will be considered Extraordinary Water, which
means that a credit will be given to receive additional imported water
during droughts from MWD to Anaheim.
The parties to the agreement are MWD, Orange County Water
District (OCWD) through the Municipal Water District of Orange
County (MWDOC), and the cities of Anaheim, Fullerton, and Santa
Ana. The Agreement will also benefit other producers (other water
agencies pumping groundwater) in the Orange County Groundwater
Basin.
The Board inquired if there are any downsides to the Agreement. C.
Parker shared that there are no downsides as the Agreement provides
additional resiliency during droughts. The Board also inquired about
the term of the Agreement. C. Parker stated that the term is 61 years.
7. APPROVE A CONSULTING SERVICES AGREEMENT WITH
NEWGEN STRATEGIES AND SOLUTIONS, LLC FOR
ELECTRIC UTILITY COST OF SERVICE STUDIES AND
RELATED CONSULTING SERVICES FOR A FOUR-YEAR
TERM WITH TWO OPTIONAL ONE-YEAR EXTENSIONS IN
AN ANNUAL NOT -TO -EXCEED AMOUNT OF $60,000. *
B. Beelner provided a brief overview of the cost -of -service study
process, describing an industry process where applicable costs are
assigned to a function and ultimately allocated based on causation
principles. APU staff issued a RFP, received three proposals, and
rated NewGen Strategies and Solutions, LLC the highest based on
several criteria, including cost, expertise, and experience. B. Beelner
shared how the recommended vendor had performed similar studies
for many electric utilities throughout California.
The Board inquired how frequently a cost -of -service study is needed
and how a completed study is utilized. B. Beelner described how
California law specifies a cost -of -service study every ten years, but
the requirement is more applicable for water utilities. APU typically
M. Lee moved the Approval
of the Agreement Regarding
the Assignment of
Extraordinary Supply from the
Santa Ana River Conservation
and Conjunctive Use Program
(SARCCUP) for a term of 61
years. A. Abdulrahman
seconded the motion.
MOTION CARRIED: 7-0.
ABSTAINED: 0.
T. Ibrahim moved the
Approval of the Agreement
with NewGen Strategies and
Solutions, LLC. A.
McMenamin seconded the
motion.
MOTION CARRIED: 7-0,
ABSTAINED: 0.
ABSENT: 0.
2024 - 4
performs an electric cost -of -service study every two years, largely to
validate the integrity of its rate structure and to possess an
independent assessment if Anaheim's rates were challenged in a
court of law. The Board inquired about the RFP process, and B.
Beelner confirmed that there were three proposals submitted and
evaluated.
8. QUARTERLY STATUS REPORT FOR PRE -QUALIFIED
PROFESSIONAL SERVICES, CONSTRUCTION, AND SPOT
BID ELECTRIC MATERIAL PURCHASES (OCTOBER —
DECEMBER 2023).
J. Lonneker, Assistant General Manager — Electric Services,
explained to the Board that there is a need to increase the number of
firms participating in the bidding process for Design -Build Master
Agreements (DBMA) to foster more competition amongst firms for
the electrical design and construction of projects up to $3 million.
APU will be working with the Public Works Department to advertise
and seek additional firms to be added to the prequalified list for
DBMA projects. J. Lonneker shared that the Quarterly Reports
reflect the first half of the fiscal year; additionally, revenue and
expenditures are on track to meet the approved budget.
C. Parker shared that the on -call agreements have been very useful to
efficiently complete work for Water Services. The General Services
Agreements have had some single proposals submitted for certain
projects. At least three firms reviewed the RFP on Planet Bids for
each project. Staff will be doing additional outreach in the future to
solicit more proposals.
The Water Capital Improvement Program is proceeding on schedule
to complete all planned projects for the fiscal year. The Groundwater
Treatment Program recently commissioned the Energy Field site.
The Board inquired when the other plants will come online. C.
Parker responded that the Boysen Park site will probably be
commissioned next month, with the remaining sites coming online
later in 2024.
9. UPDATE ON ELECTRIC SYSTEM ITEMS.
J. Lonneker discussed the APU Capital Improvements Dashboard
with the Board through the second quarter of Fiscal Year 2024. The
dashboard shows a more detailed update on the progress of priority
capital improvements such as undergrounding, direct -buried cable
replacement, and transformer and streetlight replacements.
2024-5
J. Lonneker shared with the Board that APU has completed the
deployment of automated electric metering infrastructure and will
provide an overview at the next Board meeting in February.
J. Lonneker updated the Board on the completion of various
streetlight installations and repairs, including new light fixtures
installed on existing wood poles along the water channel near La
Palma Avenue and Citron Street and streetlight repairs on Katella
Avenue near Interstate 5 Freeway and along Miraloma Avenue near
the State Route 57 overpass. J. Lonneker shared that several freeway
overpass lights and streetlights, owned by Caltrans, are not
operational across the City. The Public Works Department will
coordinate with Caltrans for these repairs. Also, streetlight wires at
Sunkist Street/Lincoln Avenue have been vandalized again, and
APU will re -design the routing of the power and install new conduits
and cable with tamper resistant hardware.
J. Lonneker indicated to the Board that APU submitted a concept
paper for consideration by the Department of Energy (DOE) to apply
for a Grid Resilience and Innovative Partnerships (GRIP) grant to
modernize the electrical infrastructure and underground the power
lines along Ball Road from Brookhurst Street to the west City limit.
J. Lonneker explained that this is the second concept paper submitted
for consideration of this grant. APU submitted the first paper in 2023
for GRIP grant funding for undergrounding along East Street, which
was not approved by the DOE. However, DOE encouraged APU to
resubmit in future funding rounds for consideration.
10. UPDATE ON WATER SYSTEM ITEMS.
C. Parker shared that the groundwater basin is in good condition.
The State Water Project is still at 10% allocation. Currently, rainfall
is slightly below average to date. C. Parker shared that the Colorado
River negotiations are continuing. The goal is to reduce water use on
the river to a level the river can reliably provide.
MWD currently has 3.4-million-acre feet in storage, enough for three
years of supply for their region. MWD is also working on their
Climate Adaption Master Plan (Plan), a plan determining how to
adapt to Climate Change. The Plan is looking for new sources of
water to make up for the projected shortage due to 'Warming
temperatures.
11. UPDATE ON FINANCE & ENERGY RESOURCES ITEMS.
B. Beelner discussed the monthly Electric Finance Dashboard and
Power Supply Dashboard with the Board for Year -To -Date Fiscal
Year 2023/24 through December 2023. B. Beelner discussed that
both electric revenue and costs continue to remain below budget for
2024-6
the Fiscal Year to date, 4.8% ($1 LOM) and 17.2% ($37.8M)
respectively.
B. Beelner shared with the Board that the revenue variance is due to
both lower energy available to sell on the wholesale market and
reduced retail sales due to the mild summer. B. Beelner then
discussed the below budget costs and how they were driven
primarily by reduced fuel costs due to lower natural gas prices and
the continued lack of available fuel for purchase to fuel the
Intermountain Power Project (IPP).
B. Beelner discussed the Water Finance Dashboard and shared that
water revenue through December 2023 is below budget by 4.4%
($2.4 million), and that costs also were below budget by 6.1 % ($2.7
million) causing a net positive budget variance of $300,000.
B. Beelner then discussed the Power Supply Dashboard and
specifically pointed out the lower -than -expected natural gas prices,
especially when compared to the same period in the prior fiscal year.
These lower natural gas prices led to lower -than -expected wholesale
energy prices, which APU relied on to replace energy not delivered
by IPP.
B. Beelner moved on to inform the board that APU and the other
participants of IPP came to an agreement to ensure continued fuel
deliveries to the power plant. This new contract will cost APU
approximately $7 million more than the previous budget. However,
B. Beelner did point out to the Board that due to the budget savings
so far in Fiscal Year 2024, he foresaw no impact to the budget.
B. Beelner reminded the Board about the rate hearing scheduled for
February and updated the Board on the proposed water bond
issuance, sharing that the period for banks to make proposals closed.
The matter should come to the Board for its consideration in mid to
late spring.
12. UPDATE ON ADMINISTRATION & RISK SERVICES ITEMS.
J. Lehman, Assistant General Manager — Administration and Risk
Services, invited the Board's attention to the Administration and
Risk Services Dashboard. J. Lehman shared that the Legislative
Working Group met prior to the Board meeting and discussed how
the second year of this two-year legislative session was starting off.
J. Lehman discussed that APU is currently tracking approximately
160 bills and that February 161h is the last day for legislators to
introduce new bills outside of the gut -and -amend process.
J. Lehman shared that since the last update twenty-one bills have
died, and nine new bills had been introduced — six of which
2024 - 7
concerned Artificial Intelligence, which will initially be tracked as
they have the potential for broad applications.
J. Lehman then discussed the safety metrics and highlighted that, for
the reporting period, there were two reportable injuries. One was a
twisted knee, which occurred when an employee stepped out of a
truck, and the other was a twisted ankle from tripping over a
highway bat dot, yellow raised marker. APU continues to train and
emphasize safety in all our processes.
13. ITEMS BY SECRETARY.
D. Lee shared that the public hearings will begin at 5:30 pm to allow
time for residents to attend; however, the meeting will begin at the
normal time of 5 pm; the agenda items planned for next month
include:
Electric and Water Public Hearings to Consider
Modifications to the Electric & Water Rates, Rules and
Regulations;
WorkAbility I Program Recognition;
Community & Sustainability Programs Update Presentation;
Additional agreements are anticipated and still in
development regarding an energy trading system and an
internship program.-
D. Lee shared other updates:
• J.D. Powers evaluation of the top -ranked midsize electric
utilities in the West Region of the United States, in which
APU was ranked second;
• A tour of the Groundwater Treatment system that is under
construction off of Santa Cruz Street near Orangewood
Avenue and Interstate 5 Freeway was provided;
• Staff attended a toy distribution to a multi -family area off of
Sumac;
• Staff attended the Downtown Holiday Brunch on Christmas
Eve;
• M. Avelino -Walker, General Services Officer, discussed
student engagement opportunities and Anaheim Union High
School District's Teacher Externship Program.
Lastly, D. Lee requested that the Board meeting be closed in
memory of Ken Heffernan, a former APU Electrical Utility Inspector
from 2001 to 2021.
Board Member A. McMenamin discussed concerns about water
being used by a contractor that he witnessed; staff welcomed any
reporting of situations for further investigation.
2024 - 8
Board Member T. Bilezikjian thanked the APU's leadership team
and congratulated A. Kott on her retirement.
Board Member M. Lee wished A. Kott well in retirement, and
thanked staff for their assistance on various matters.
Board Member A. Abdulrahman congratulated A. Kott on her
retirement, noting it was a pleasure to work with her.
Chairperson J. Seymour wished A. Kott all the best.
A. Kott thanked the Board and shared that it has been a pleasure
working with a dedicated group that is committed to providing
support to Anaheim's customers.
15. ADJOURNMENT: (NEXT PUBLIC HEARINGS/REGULAR
MEETING ON FEBRUARY 28,2024, AT 5:00 P.M.)
Chairperson J. Seymour asked for a moment of silence in memory of
Ken Heffernan.
ReLl tfully 4sbmitted,
Dukku Lee
Public Utilities General Manager
T. Bilezikjian moved to
adjourn the Regular Meeting
in the Gordon Hoyt
Conference Center at 6:59
p.m. to the Board's Public
Hearings/Regular Meeting
date of February 28, 2024, at
5:00 p.m. A. Pham seconded
the motion.
MOTION 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 the City Clerk and City Council for informational purposes.
2024-9