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Public Utilities 2010/10/27CITY OF ANAHEW., PUBLIC UTILITrES BOARD rAr1UTET S OCTOBER 7, 2010 The agenda having been posted on Friday, October 22, 2010, the Public Heafing/Regular Meeting of the Public Utilities Board was called to order by Chairperson .Lon Cahill at 5:W p.m. on Wednesday, October 27, 201 in the Gordon Hoyt CenLerenct Centi--r, 2nd Floor Conference Room, Anaheim West Tower, 201 S, Anaheim Blvd., Anaheim, California, Board Members Present L. Cahill, J. Brandman, P. Carroll, 3. Machigaverna, D. Morgan, C. Pe Board Members A t K, Murray L PUBLIC HEARING: PROPOSED ADDITIONS AND MODIFICATIONS TO THE ELECTRIC RATES, RULES AND REGULATEONS CONCERNING 1 RATE SCHEDULES.* The Ptbfic, Hearing was c called to order by Chairperson L. Cahill at 5.0! p.m. A veebafim transcript of the prereding with all oral and prepared testimony, exhibiLq, and public cornmew that weTe a part of the public heanng was prepared by the Court, Reporter. The certified original tramscript is an file in the Public Utilities Depaft nt, 'I I Root Department Records, Anaheim West To en A certified copy of the transcript as on file in the City Clerk"s Office, 2"� Floor. City Hall. L5 Calnffl, in sari -nary, indicated to the public in attendance that thy: Public Utifidv8 Board has spent substantial fin - it reviewing the sil-iiation and u-nderstand. thc: stated concerns, tie further indicated that lhr~re have been worlitshops, that. addr—essed pointed questionm and this rate incmas� was riot being taken, into consideration lightly. During public cornments, a member offfie public, P andy Thompson, commented that he repres---nwd RS1 Home Products, which is a cabinet manufacturing company in Anaheim, 14e indicated that II Home Products occupies a buildin which is The Public Utilities Department presented one witness, as well as prepared an oral testimony in sup - port of its reqaest on the proposed additions and modifications to the Electric Rates, Rules and Regulations concerning various rate schedules. 2010-69 AGENDA I` ACTION TAKEN about 6W square feet irisize and employs about 600 people, I beQorne part of the record and He shared that they have a. concern with the proposed rate moved into evicip-nce- increase. He mentioned that there are three main areas ghat the City can look to for increases Residential, Cornmerejai, and Chairpersor, L, Cahii! granted Industrial, He felt that the Industrial Community actually gives A. Kott's motion. to the City by employing people. He continued indic,-Wng that his company also has manufacturing plants in locations outside California such as Texas, North Carolina, and Mexico and increases fike these force his company to took at the cost structure to :tee if it makes sense to stay in Anaheim or if it would be more cost effectiw- to move their company outside of California, He shared that. although he undfmitan& the cost increase and its structur it is still difficulffor is company as a manufacturer in the City to co to have these mr, increases. L. Cahill responded by sayin he understands Mr. Thompson's concerns and a mentioned that this rate increase was not being considered lightly by the Board and a large. amount of tirne and effort was put into the consideration of this decision, Upon agreeme-rit by the "Chair, M. Edwards also responded that the points Mr, Thompson made were. well taken, and she ageed that it is the Business Community that creates much of the ta base and Lhe andyaritages for the residents that live in the City. She further indicated that the Board, a number of years -ago, split apart the rate authority so that it had the ability to assign rate increases differently to Indus Lri al/Commerci al custorneri versus Residential cuitorners and the City has on a past occasion raised Residential rates while actually lowering Comm r and Industrial rates. She went on to mention that thv ohallengts ehe Department face. now are due to the decline in revenue, are therefom- causing increases to all customer classes. As the economicsituation stabifi7es, the Department plans to allocate the reductions in the cost back to the Industrial and CommErcial sectors first for exactly the reasons the member of the public shared earlier. It is the sharp downward slope of these economic changes that is causing the base rate increase across the entire service territory. The regular Public Utilities Board =ctirig was convened and called to order at 5:21 p.m. Z. PUBLIC COMMENTS Following public communts and discussion by the Nblic Utilities Board, P. Cahill rnad� a. - knoklon that the Public Utilities Board recommend to the City Councif the actions set forth in the Staff Report dated October 27, 201 which was previously submitmd as E3chibit 2 to the General Manager's prepared testimony. D Morgan seconded the motion. MOTION CARRIED: 6-0. ABSTAINED. 0. ABSENT. I (Ko Mu_rray). The Chair indicated that at this is see lie wa: I -oing to take L, Cahill closed the general public A.a-lnda Item Number 3 ahead of Agenda Itern Number 2. comment portion of the meeting, There-'. were no public comments, �11 A 3. APPROVAL OF THE MODIFICATIONS TO RULE NOSv 1, 7 AND 9 OFTHE ELECTRIC RATES, RULES AND REGULATIONS AND MODIFICATIONS TO RULE NO, 9 OF THE WATER RATES, RULES AND REGULATIONS.* The Board the asked for elaboration or examples about how this additional flexibility would be utilized, asking if this added flexibility or granted greater authority to the General Manager than wn previously approved, M. 6wards and other staff offered sevcrad exampl es as to her the variaus situations would be handled. 4- APPROVAL OF THE MINUTES OF THE REGULAR PIUBLIC UTILITIES BOARD MEETING HELD ON SEPTEMBER 22,2010.* 5. APPROVAL OF THE MASTER INT E T ION AGREEMENT FOR NET METE IUNG.* S. Sciorfino in his pmsentation indicated the existing program for Net Metering has been slightly modified as a result of th requirements imposed by AB 920. Prior to the legislation, ilfa customer has solar panels installed on their property, there would be times when the solar panel - a - reduction exceeded the customer's electric usagp- so the cast mer was gwen a �:redit on their bill. The state law now requires the City to give the customer the option such that, over the course of the year, thc, total production is tracked and the customer can then elect to con roue receiving a month3y credit or, at the and of the year's period, choose to get a cash payout. The cash payout would the he based on what the avoided costs for what the Department would pay for renewable e n e rgy f rom th markei, AgTION TAKEN mmmw AGENDA IT ACTION TAKEN S. Sciortino responded to various questions by the Board regarding further explanation of the avoided costs and if rates would increase for customers that. do not lave solar power. M. Edwards infoiTned the Board that the Assistant General Manager D.C" 'al ns was currently at the Orange County Sanitafion District where she was hopeful that the vote on the agreement to provide wastewater to the Departmunt'S Water Recyclin Demonstration 'Project would l be positive, She indicated that Anaheirn still needs to adjust its ow,7 rules to ensure that it can use and sell the recycled water provided by this prqject which was the reason, for thy; ordinance' amerialng the Anaheim Municipal Code, The Rules to be added and amended will allow the Water Recycling Demonstration Project to provide recycled water to the Anaheim West Tower for toilet flushing use and for irrigation at City Hall. She also noted that Anaheim was the, first city to get a contract to use water from Orange County Water District's Groundwater Replenishment System for industrial purposes in the Canyon Power Project. 7. APPROVAL OF THE WATER RECYCLING DEMONSTRATION PROJECT AGREEMENT WITH THE ORANGE COUNTT SANITATION DISTRICT.* R Car moved approval of the Ordinance, amending various sections of Chapter I0. 16 of Title 10 of the Anaheim Municipal Code as well as adopti ng and modifying various water mje& of the Water Rates, Rules and Regulations, J. Braridman seconded the motion. MOTION CARRIED, 6-0. ABSTAINED: fl ABSENT: 1 (K. Murray), M. Edwards coRphmented D. Calkins and his staff for their C. Peltzer moved approval of the 8. UPDATE ON WATER SYSTEMS ISSUES, 201 G-72 AGrNDA ITEM Water R - 'cl ing �Demon�stratjon �Groqndhmak� Lin g Certmop y Invitations will be mailed for the Water Recycling Demonstration Project Groundbreaking Ceremony to be held on Tuesday, November 16, 201 . LawsuiLag guest hjetro calls n at�r istrict There was a brief discussion regardi Z� ng the ernait that was sent to the Board regarding the lawsuit against Metropolitar Water District (MWD) from Sap Diego County Water Authority. 9. UPDATE ON ELECTRIC SYSTEMS ISSULS. Can on Power Pro�cctU date M., Ward indicated that with the qrna-fl amount of rain, there was htfle.Qow down in the, construction activities at the Proiecisite, The contractor was given a few rain days, but the Substation equipment is in place and the Prqjec is still on target for a timely COTTRplefi0n. M. Ward reminded the Board Members that there would be an Underground Conversion Subcommittee meeting next month, November 1 201 During the discussion, the Board requested that they receiv(; a list of projects that are being held back due to changes in site budget, for both water and electric M, FAwards respon&d that Elie capital rjrq ect funds normally have to come out of the capital budget, which is largely bond funded, or out of the ;2 ridor ng fund which is also separate that can only b-- spent on undergrounding projects, 10. UPDA.TEON FINANCE MUM ElectriclWater SurnMgly Update E, Zached presented the financial update through the month of Septernben He made note that the significant variances for revenues and expenses were identified in the schedules provided. Electric carne- in 4 million dollars �inder projected revenueti for the month, with 2.8 miffion of the unfavorable variance in retail sales and the remaining 1.2 rniflion in non- retail or who esale sales, He also indicated to the Board that a number of budget cuts totaling over $6 Million in the elect division have been instituted, however it takes approximately 12 months to mafize the effects of that $6 million. It was also explained that due, to the seasonal nature, of revenues, a largef percentage, of the annual revenue budget is allocated to thesurnmer months. July, August and September are typi-cally heavy revenue months; therefore, larger variances to btidget have resulted, due, ro cool ACTION TAKEN 20 i 0-73 AGE NDAITEM weather, a weak economy, and comervation efforts. After tile surnmer season, the influence of weather on revenues should be negligible, The budget cuts instituted should hopefully rnitigate the negative variance by the end of the fiscal year, 11. UPDATE OF JOINT SERVICES ISSUES, 0 POWEL Pro ram Z S. Sciortino spoke brie v abOut tho- OPower rograrn that allows Customers to view their usage patterns reiafive to neighboring or simiiar homes and to help determine where and what types of energy efficiency programs could be implemented, Currently, the program is setup so that the information can be mailed out and that custorners could get on- fine to get more information by customizyng the application to further define characteristics of home usage, ,such Q the numbeg° of people in the horne, how u rge the house was and appi i ance inventory, h4ontMy Resource Ade S. Sciortino indicated that Anaheim is fbfiy resourced for the month and spoke briefly about the STS which is "he Southern Transmission System indicating ffie Upgrade to the System was rearing completion, The construction coincided with the Intermountain Power Projev (IIPP) Unit I ouiage, Th� Upgrade will be completed by the end of November and wiF provide a;) additional 95 MW of transmission capability to our current leve[ of 336 MW. - ACTION TAKEN 2010•.74 AGENDATTEM fpm the contra,,t as each turbine from Canyon was completed. M. Edwards visa discussed the penalty fee teat the ISO charged N=use Anaheim duesn't have local resources and that this arrangemen� with NRG was going to be a great deal because it allowed us to be, able to take literailly immediate advantage of being able to count the Canyon units as they come on, thereby decreasing our financial obligation to NRG, saving as much as $900,000 per month when all four units from Canyon are completed, Annuai Resource Ads ac Flan: 2OLD S. Sciortino reported at the for=ast fOT Anaheim's peak 3oad projection for November is 4W MW apd that forecasts are hased on norrnal weather conditions. The, IPP Unit 1 4 maintenance outage continues through the month with a scheduled end date of NovembeT 29, 2010. To cover the IPP outage, a 43 M-W power exchange. arrangement was transacted with Sempra Energy Trading Corporation (SETC). 11 AGENDA ITEM(S) FOR NEXT MEETING ON NOVEMBER T7, 200. * Long Range Plan Workshop * Nohl Canyon Tank Update * Feed-in-Tariff Purchase Power and Interconnection Agreements 13. ITEM(S) BY SECRETARY Im 14. ITS (S) BY BOARD MEMBERS. C. peltzer offered. his congratulations on the Canyon Power Plant. He also discussed his concerns about the rates and Lhe effects Lhey will' have because, of politics, P, Carroll shared that he a�eed with J. Machiaverna's comments on the rates oreseraatioa and thanked M. Edwards and staff for keeping an eye on the future. D, Morgan commented that the Wes presentation was very well done. He, also mi entioned that there will soon be new City Council member's, and the Department should work with M— Edwards and staff on iongtx terra phin strategies: to gp-E there, strategies AKEN 2010-75 AGENDA ITEM updated sooner rather than later as to what issues there, are and find a way to get the word out to the citizens. L. Cahill agreed that those are very tough financial titres; however, Anaheim has very knowledgeable staff, It may take a few years for the economy to impruve, but the Department and the City will coma out okay, IS. ADJOURNMENT. (TO THE REGULAR MEEK.TING DATE OF NOV FEMBER 17, 2010 AT 5:00 P.K, IN THE jIT" FLOOR CONFERENCE ROGM,ANAHEIM WEST TOWER, 201 S. ANAHEIM BLVD., ANAHEIM., CALIFORNIA.) Respectfufly submitted, A Marcie L Edwards Secretary, Public Utilities Board TI TAKEN