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Public Utilities 2010/07/28CITY OF ANAHEIM PUBLIC UTILITIES BOARD MINUTES July 28, 2010 The agenda having been posted on Thursday, July 22, 2010, the Regular Meeting of the Public Utilities Board was called to order by Chairperson Lon Cahill at 5:10 p.m. on Wednesday, July 28, 2010, in the 2 " Floor Gordon Hoyt Conference Room, Anaheim West Tower, 201 S. Anaheim Blvd., Anaheim, California. Board Members Present: L. Cahill, K. Murray, J. Brandman, J. Machiaverna, D. Morgan, C. Peltzer, P. Carroll Board Members Absent: None Staff Present: M. Edwards, A. Kott, M. Ward, D. Calkins, E. Zacherl, S. Sciortino, R. Shintaku, L. Quiambao, P. Oviedo, C. Gilbert, A. Layton, L. Guzman, M. Lopez, R. Dowell, J. Lehman Guest(s) Present: (List of additional attendees attached) AGENDA ITEM ACTION TAKEN 1. PUBLIC COMMENTS. A member of the public thanked everyone that was involved in the Metropolitan Water District (MWD) Inspection tour to the Delta. He indicated that he was fortunate to have been invited and that the tour was very informative and educational, and that he very much enjoyed it. Board members who were also on the trip concurred. 2. PRESENTATION BY ANAHEIM'S METROPOLITAN WATER DISTRICT BOARD MEMBER ON DELTA CONVEYANCE ALTERNATIVES. K. Murray provided a MWD perspective on the Delta Improvement Strategy and options being studied for conveyance. M. Edwards indicated that in response to challenges to our imported water supplies, Anaheim is continuing its active conservation campaign. Anaheim's conservation campaign is not based on the issuance of notices of violations and code enforcements, but rather on incentive programs, rebates, and customer education. Anaheim set a 5% conservation goal for the entire city last year, and that goal was surpassed by approximately one billion gallons. D. Calkins added that with the reduced water usage this past L. Cahill closed the general public comments portion of the meeting. 2010-49 AGENDA ITEM year, primarily due to appeals for voluntary conservation, Anaheim used less water during the year than it did 20 years ago. 3. APPROVAL OF THE MINUTES OF THE PUBLIC HEARING/REGULAR PUBLIC UTILITIES BOARD MEETING HELD ON JUNE 23,2010.* There was no discussion regarding this item. 4. APPROVAL OF THE WRITE -OFF OF FY 2009/2010 UNCOLLECTIBLE UTILITY ACCOUNTS.* M. Edwards indicated that the Utility reports to the PUB and City Council annually on the dollar amount reflecting uncollectible utility bills. The uncollectible amount is usually compared to the total sales of $378 million, and is reflected as a percentage which for this FY was about 0.29 %. By way of comparison, it was 0.26% last year. The 0.29% equates on a net basis to about $1.1 million in uncollectible funds. Steps are taken to collect the funds that are determined to be uncollectible, as well as proactive measures to evaluate customers to ensure that deposits are required from those higher risk customers and to work with credit agencies in an effort to collect a higher percentage of uncollectible funds than most public utilities. At the same time, Anaheim offers more programs and is more flexible in providing ways for customers to make payments than the majority of other utilities. Thus the level of uncollectibility is pretty much a reflection of the economy, unemployment, and continued foreclosures. M. Edwards added that she does not expect the bad debt write -off amount to improve for at least a couple of years. There were a variety of questions and comments by the Board Members regarding the low numbers for the delinquent accounts, the collecting on write -offs, and emergency services. M. Edwards encouraged the Board Members to keep the Staff Report and use it as reference to the types of programs that Anaheim offers to help customers increase their ability to pay their utility bills. ACTION TAKEN J. Brandman moved approval of the June 23, 2010, Public Utilities Board minutes. D. Morgan seconded the motion. MOTION CARRIED: 5-0. ABSTAINED: 2 (L. Cahill, P. Carroll). ABSENT: 0. P. Carroll moved approval of the Write -Off of FY 2009/2010 Uncollectible Utility Accounts. K. Murry seconded the motion. MOTION CARRIED 7 -0. ABSTAINED: 0. ABSENT: 0. 2010-49 AGENDA ITEM ACTION TAKEN 5. APPROVAL OF A MEMORANDUM OF UNDERSTANDING AMONG ORANGE COUNTY WATER DISTRICT, IRVINE RANCH WATER DISTRICT, YORBA LINDA WATER DISTRICT, AND THE CITY OF ANAHEIM REGARDING ANNEXATION REQUESTS AND CEQA DOCUMENT.* Indicating a potential conflict, J. Brandman excused himself and L. Cahill moved approval of the left the room at which point M. Edwards gave a brief Memorandum of Understanding introduction about this matter before D. Calkins began his among Orange County Water presentation. District, Irvine Ranch Water District, Yorba Linda Water D. Calkins reminded the Board that this item had been on the District, and the City of Anaheim agenda two months ago, but he had asked to defer Board's Regarding Annexation Requests action at that time due to the delay of the Orange County Water and CEQA Document. D. District (OCWD) Board in approving the Memorandum of Morgan seconded the motion. Understanding (MOU) due primarily to the concern as to how Motion carried 6 -0. Abstained: the annexations would affect the cost of groundwater. 1 (J. Brandman). Absent: 0. As a result, the OCWD staff developed a plan as to how they will work with the groundwater producers over the next year to complete a programmatic environmental impact report, analyze cost impacts and address their other questions and issues. With that plan now developed, the MOU was approved by the OCWD Board last week. Approval of the MOU will start the annexation process. It authorizes preparation of an Environmental Impact Report (EIR). In approximately a year following completion of the EIR, an annexation agreement will be prepared, which will be presented to the OCWD Board for approval. If approved, it would then be presented to Local Agency Formation Commission (LAFCO) for final approval. M. Edwards and D. Calkins answered a variety of questions from the Board covering such items as Anaheim's financial commitments as defined in the MOU, termination provisions, the process that will lead to an annexation decision, responsibility for paying for the EIR, status of The Irvine Company's plan for developing Mountain Park, water system improvements in and near that area, and the status of a new agreement with The Irvine Company to reimburse Anaheim for annexation- related costs. 6. UPDATE ON WATER SYSTEM ISSUES Water Conservation M. Edwards invited the Board's attention to the Water Conservation memorandum (Memorandum) and packet that was sent to the PUB, which included information on Anaheim's water conservation marketing campaign and new programs as 2010-50 AGENDA ITEM well as incentives for Anaheim residents and businesses. D. Calkins indicated that the Department will continue its outreach campaign to encourage voluntary water conversation. The Memorandum provided valuable information about water savings examples by customers, such as some homeowner associations that have done a great job improving water efficiency. 7. UPDATE ON ELECTRIC SYSTEM ISSUES System Electricity Use. a.k.a. System Load M. Ward indicated that Anaheim had a hot spell a couple of weeks ago so the system load went up to about 515 megawatts, which is still below the all time peak in 2007 of 595 megawatts. M. Ward then indicated that the system load is down due in large part to the cooler than usual summer weather. Canyon Power Project M. Ward invited the Board's attention to pictures demonstrating the construction progress and work being done at the Canyon Power Project. The site was excavated to about 15 feet that made a pile of dirt about 30 feet high. The dirt will be reused and compacted to create a good foundation. M. Ward indicated that about this time next year, the turbine units should be running. M. Edwards indicated that a tour of the project site can be arranged for Board Members. A Board member inquired about the reason for the power outage that lasted about five hours near Nohl Ranch Road and Scout Trail during the last hot spell. M. Edwards indicated that the power outage was caused by two underground circuits, so locating the cause was more time consuming than usual because the problem was underground. Anaheim Alert M. Edwards reminded Board Members that Anaheim residents can sign up for the Anaheim Alert System, which is an on -line system that allows customers to self select to be made aware of evacuations, power outages, or general news and information. 8. UPDATE ON FINANCE ISSUES Revenues and Expenses E. Zacherl indicated that given the time of year, the Department is starting to close its books so the information provided in the Board's packet reflects preliminary revenues and expenses ACTION TAKEN 2010 51 AGENDA ITEM through the end of June. Those numbers will change and only reflect operating revenues and expenses. E. Zacherl indicated that between conservation, weather, and the economy, the numbers are coming in softer than hoped. Overall, electric revenue retail sales are down approximately $10.8 million. As requested in the last meeting, the revenue numbers have been broken down by residential, commercial, and industrial sales. E. Zacherl indicated that water revenues are down roughly $3 million or 5 %. The revenue reduction has occurred in each of the classifications of single and multi - family residential, commercial, and industrial sales. There has been a 20% reduction in the other area of water sales, which primarily include temporary service connections and fire lines. Temporary service connections are typically associated with construction and since construction activity is down, this has impacted temporary service connection revenue. Overall, total revenues for the Department are down about $17 million or 4 %. E. Zacherl indicated that expenditures through June are also down, primarily because the Department has done a better job in minimizing expenses so they are down almost $20 million or about 5 %. E. Zacherl indicated that the Department has done a good job in the area of labor, which is due primarily to holding vacancies open. He also indicated that in the area of other operating expenses, a variety of measures were put in place during the first quarter of the fiscal year, and as a result, the Department was able to save about $15 million dollars. 9. UPDATE ON JOINT SERVICES ISSUES Conservation Efforts S. Sciortino addressed the Department's energy conservation efforts for the last three months, indicating that the double rebate program on appliance rebates combined with the State's rebate program allowed for quite a bit of success. S. Sciortino did not have the final numbers for the year, but believed them to be close to 26 gigawatt hours of energy saved, which is 1.2 % of Anaheim's total retail sales for the year. M. Edwards added that those savings go back into the Anaheim community. Resource Adequacy Plan for the Month of August S. Sciortino reported that the forecast for August's peak is 527 megawatts. He added that forecasts are based on normal weather conditions, but pointed out that the month of July was well below normal temperature condition so retail consumption for the month would be lower than expectations. S. Sciortino ACTION TAKEN 2010-52 AGENDA ITEM commented that typically the average for July is about 460 megawatts but we are struggling to get to 400 megawatts, which represents a huge difference in terms of what the Department is seeing in actual load. The Department is more than adequately resourced with the good news being that whatever energy isn't sold retail is sold wholesale. S. Sciortino indicated to the Board that included in the agenda packet is a summary of the deferral of the Senate Bill (SB) 1 Solar Program, which is the initiative whereby Anaheim Public Utilities (APU) provides rebates to customers who invest in solar panels. APU's Program has been tremendously successful in that APU has received over two million dollars worth of solar rebate applications for this year and 4.5 million dollars for next year. The applications that have already been processed will be honored; new applications will not be approved until January 2012. PUB Members had a few questions on the need and timing of program deferral that were answered by Staff. M. Edwards explained that the rebates are for the customers that install solar systems, but generally the financing or leasing companies get the federal tax subsidy. Additionally, the Solar Flag Program installs small solar systems at schools which cost about $20,000 each, but have the added benefit of educating students. Currently, there is funding available for another two schools and another one is in the works. M. Edwards commented that APU is doing their best to keep this program viable in this difficult economic time. PUB members commented that the Solar Flag Program is phenomenal on many levels. Thermal Energy Storage (TES) Projects S. Sciortino commented that there are TES projects at Disney, the Marriott Hotel, and Extron. Combining the three projects will allow for about a 3.5 megawatt load shift during the system peak. Energy Field S. Sciortino indicated that APU just received a State Grant check today for $350,000 to help fund the Energy Field Project, which is a pilot program that combines solar panels with battery storage allowing solar energy to recharge batteries that can be dispatched to meet retail load requirements. ACTION TAKEN 2010 - - -53 AGENDA ITEM 10. AGENDA ITEMS(S) FOR THE NEXT PUBLIC UTILITIES BOARD MEETING ON AUGUST 25, 2010. • Agreement with the Orange County Sanitation District for Water Recycling • Transmission Service Agreement with LADWP 11. ITEMS(S) BY SECRETARY M. Edwards reminded the Board that a copy of the Board Members' bios were provided to them and posted on the APU website. M. Edwards provided a handout of the major City -wide projects and the proposed construction of the water and sewer projects. M. Edwards provided an independent analysis of the propositions on the State Ballot since the Board expressed interest in them. 12. ITEM(S) BY THE BOARD J. Machiaverna thanked K. Murray and staff for the excellent Inspection tour of the Delta, and added that the speakers were very informative. He indicated that the Delta condition is a critical problem facing the State and water reliability issues are only going to get more critical. He further indicated that if the State doesn't address these issues now, probably we won't be able to afford doing it in the future. C. Peltzer commented that the Sacramento Delta Inspection tour was excellent and very informative. D. Morgan commented that the Sacramento Delta Inspection tour was great. He also mentioned that he was very impressed with Bernie Stillions, the MWD tour coordinator. D. Morgan also reported that he will not be able to attend the next PUB meeting as he will be out of town. P. Carroll indicated that he was sorry he was not able to make the Inspection tour of the Sacramento Delta. He also commented that he looked through all the material on the Landscape Water Efficiency Guidelines and was impressed and pleased with staff as well as M. Edwards for doing such a good job of taking the Board's comments and working them into something that he felt will work a lot better for Anaheim's customers. K. Murray thanked everyone for participating in the Sacramento Delta Inspection tour and reminded everyone about the ACTION TAKEN 2010-54 AGENDA ITEM Colorado River Aqueduct tour in October and that invitations will be sent out soon. L. Cahill commented about how much he appreciated the type of information provided during the Sacramento Delta Inspection tour. 13. ADJOURNMENT: (TO THE REGULAR MEETING DATE OF AUGUST 25, 2010 AT 5:00 P.M., IN THE 11 FLOOR LARGE CONFERENCE ROOM, ANAHEIM WEST TOWER, 201 S. ANAHEIM BLVD., ANAHEIM, CALIFORNIA.) Respectfully submitted, - - --------- - --- Marcie L. Edwards Secretary, Public Utilities Board ACTION TAKEN P. Carroll moved to adjourn the Regular Meeting at 6:43 p.m. to the Board's next Regular Meeting date of August 25, 2010 at 5:00 p.m. K. Murray seconded the motion. MOTION CARRIED: 7 -0. ABSTAINED: 0. ABSENT: 0. PUBLIC UTILITIES BOARD MEETING JULY 28, 2010 ADDITIONAL ATTENDEES Name: Affiliation: Paul Beckman East Anaheim District Chair Pete Bos Resident Steven & Susan Faessel Community Services/PIanning Commission /UG Committee David Helland Anaheim Colony Resident Gabriella Hill OC Division, League of CA Cities Robert Nelson Resident John & Frances Noteboom Patrick Pepper Dave Ross Robert Schwenk Doug Shively David Wain Cynthia Ward S.D. Neighborhood Council Chair Budget Advisory Commission OC TAX Retired Anaheim Citizen -CPA East Anaheim District Council Resident