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Public Utilities 1996/11/07 H EC El VED ,f as 3 4 3 PM' ? PUBLIC UTILITIES BOARD Of F: MINUTES Crux or tivAtizim f,K NOVEMBER 7 1996 Board Members Present: R. McMillan, R. Lawson, D. Stanton, T. Kirker, J. White, P. Lem Board Member Absent: W. Wiseman Staff Present: M. Bell, D. Tarkington, E. Alario, L. Moses, C. Barnhart, R. Howell, G. Wilbert, J. Chavez, P. Grimes, G. Broeking, S. Albright, J. Taghavi, S. Stephens, A. Dubberly, C. Templeton, P. Wong Staff Absent: E. Aghjayan Guests Present: None 1. PUBLIC COMMENTS Chairperson D. Stanton asked for public comments. T. Kirker requested permission to speak. He emphasized that issues, such as the approval of the $302 million budget in June, underground conversion projects, maintenance plan, capital projects, rates for commercial customers and water wells should be the main concerns of the PUB and not the contents of Minutes or mail problems. He expressed his frustration on the amount of time spent at PUB Meetings discussing statements made in Minutes six months prior. He suggested PUB members talk to Staff for assistance, if needed. 2. RULES & PROCEDURES M. Bell commented this agenda item is carried over from the 10/3/96 PUB Meeting for further discussion. R. McMillan asked if there were any changes to the PUB Rules & Procedures other than the Brown Act. L. Moses commented that the Board's Rules of Practice & Procedures were adopted, 1/96, to bring them into compliance and to be consistent with the City Council's rules. They reflect the changes to the Brown Act and incorporate the procedural matters that would be in pages 3 through 9 of Robert's Rules of Order. The PUB is using the same Procedural Rules as the City Council. 362 J. White referred to page 7, under the Hearings section. The rate hearing was to be completed by a court stenographer. J. White suggested that Minutes have wording provided verbatim. He referred to page 7, paragraph 2 under the Hearings section, on the cost of transcripts. L. Moses and M. Bell commented that Board members receive copies of transcripts at no cost. J. White referred to page 7, paragraph 4, under the Hearings section. J. White is not aware of a Secretary of Energy with the City. L. Moses commented that under the Public Utilities Regulatory Policy Act, the Secretary of Energy has the right to intervene in a proceeding. Any customer or affected utility can intervene. J. White asked the reason for the detailed transcript. L. Moses commented that transcripts are for rate hearing purposes. D. Stanton questioned the required length and accuracy of Board Meeting Minutes. L. Moses commented that the Minutes must be a true and accurate record of actions taken. J. White asked if Council Minutes are being shortened. L. Moses replied that City Council Minutes are the format that the City Clerk's office follows. They are not the same level as the Public Utilities Board Minutes. They are action minutes and votes are collected. M. Bell commented that two sets of formats for Minutes are being prepared, one with an action - oriented format and the other with the existing format. This item is not on the agenda because the work is not completed. This topic will be placed on the agenda for the next PUB Meeting for review and discussion. 3. ' h. hA 4 1-4 1 4\ 1 :4 ':Ii D. Tarkington referred to the report provided in the PUB packet. This report covers cost, status and project descriptions. T. Kirker asked if the projects were part of the $63 million to which J. White referred. D. Tarkington answered yes. The projects were funded through SCPPA. J. White asked if $59 million was the amount invested in this project alone. D. Tarkington answered that with a savings of $7 million, the actual amount invested was $52 million. D. Stanton asked the distance between Phoenix and the distance traveled east before finding a power source. D. Tarkington answered that Phoenix is a marketplace and that other cities have transmission to Phoenix. J. White asked the amount of power that Anaheim receives on the transmission line. D. Tarkington 363 replied that the amount of power varies from month to month depending upon the economy interchange. sources available, amount of kilowatt hours that can be bought at one location and the cost per kilowatt hour. D. Stanton rephrased his previous question by asking the location (geographically) traveled east for power companies contributing to the Phoenix location. D. Tarkington replied that power can be received by Texas without any problems. El Paso is connected directly to Phoenix. M. Bell commented that he does not recollect Anaheim purchasing power east of El Paso. Responding to a question from J. White, D. Tarkington stated that we get power from Adelanto to Lugo through Southern California Edison. J. White asked how the contract is progressing. He stated that Anaheim was thought to provide the installation of the transmission line. S. Stephens commented that the crews are contracted through LADWP for the transmission service in -lieu of construction of Adelanto and Lugo, approximately eighteen months ago. D. Stanton asked the distance between the two connection lines. D. Tarkington commented that the distance is sixteen miles. Anaheim signed onto the rights instead of buying into them. J. White asked if the contract was completed. S. Stephens commented that the contract was executed eighteen months ago. M. Bell commented that Anaheim did not construct the Adelanto -Lugo portion because Anaheim was able to obtain a long -term contract with Los Angeles. T. Kirker commented that the Adelanto line, through the Department of Water and Power, has two lines and Lugo, through Southern California Edison (SCE), has two lines. 4. UNDERFREQUENCY LOADSHEDDING (WESTERN STATES POWER OUTAGE) P. Wong gave a presentation on the Underfrequency Load Shedding Program (Program). The loadshedding operates by quickly and automatically blocking loads during an outage. Anaheim experienced a system outage on August 10, 1996, at the Pacific Northwest and California Intertie (due to sagging in the line caused by a tree. The Bonneville Power Agency (BPA) was responsible for the repair of this line). D. Stanton asked if assistance is required from SCE when Anaheim's frequency falls below 59.1Hz. P. Wong responded no. Anaheim's loadshedding procedure works by dropping 70% of its load and restoring it manually in conjunction with communication from SCE's load dispatcher. The underfrequency loadshedding priorities are determined by health and public safety, followed by preferred /emergency, consisting of Kaiser Hospital, City Hall West and East, Disneyland, Anaheim 364 Convention Center, Arrowhead Pond of Anaheim. Anaheim Stadium and TRW Redi. The libraries and police department are served by a backup generator. The fire department is served by a one -line service. The next steps to the Program are to install Underfrequency (UF) relays to four substations currently having no UF relays and to then rotate customers who experience a major outage to the bottom of the priority list of facilities to begin loadshedding. R. McMillan asked how the Kraemer generator assists in preferred /emergency responses. P. Wong commented that this generator serves as a peaker unit. This unit exists to support SCE's requests. D. Tarkington commented that City's agreement with SCE states that this generator cannot be called upon during preferred /emergency time slots. R. McMillan asked if this generator serves as a backup to hospitals during black -out situations. D. Tarkington commented that the City has a plan, the preferred /emergency list, to protect these customers from becoming interrupted during emergency situations. M. Bell commented that an advantage of having the Combustion Turbine located in Anaheim is that all of our other resources are located at great distances, in the event of an earthquake. P. Lem asked if customers complained about electricity causing damages, during the outage at the Pacific Northwest and California intertie (8/10/96). P. Wong commented that he is not aware of any reported damages. D. Tarkington commented that claims were made against the City. Except for one claim, all others were dropped when the cause of the situation was explained to be outside the City's purview. D. Stanton referred to the electrical outage on 8/10/96, and commented that absence of communication seemed to be apparent when the system experienced a failure. D. Tarkington commented that the BPA should have communicated several events in the Pacific Northwest before effects were observed in California. P. Lem asked for clarification of the Western State Coordinating Council (WSCC). He also asked if this is a voluntary organization. D. Tarkington commented that it is basically a voluntary organization. During the electric restructuring process, the State is looking at the possibility of making it a mandatory organization. The WSCC sets the standards and it is everyone's best interest to operate voluntarily because we are all inter - connected. If not, the system will not work. 5. HOTEL /MOTEL ULTRA- LOW -FLUSH (ULF) TOILET REBATE PROGRAM (PROGRAM) C. Templeton commented that this item will be forwarded to the City Council for action after presentation to the Public Utilities Board. C. Templeton gave a presentation on the ULF Program. 365 The goals of the Program for FY 1996/97 and FY 1997/98 are to issue 3,000 and 4,000 ULF toilet rebates, respectively. The cost of the Program for FY 1996/97 through FY 1997/98 to Anaheim is approximately $28,000, which covers recycling the old toilets. MWD's cost is approximately $420.000, with a total cost of the Program of approximately $448,000. The Utilities Department's benefits of the Program would include achieving a water conservation goal of 15% reduction in total water demand, increase business customer relations and the ability to pump more water from the groundwater basin at a lower cost. The customers benefits of the Program are anticipated to receive a $60 rebate per toilet replacement and the reduction of water bills by $1.4 million, over a ten -year period. T. Kirker asked if the Building Department will require new hotels to install ULF toilets. C. Templeton responded that the ULF toilets are the only type of toilet sold in California. P. Lem asked, with respect to the Federal Americans with Disabilities Act (Act), if access to the new toilets would be in compliance with the Act. C. Templeton responded that nothing is stated in City's funding Agreement that addresses this issue. Hotels should be responsible for complying with the Act. P. Lem referred to page 5, paragraph 22. He asked if anything in the Agreement is being asked of the PUB to recommend to the City Council that mentions the laws of California. The Agreement does not mention Federal laws, with respect to the Act. C. Templeton responded that compliance with the Act is the hotel's responsibility. D. Stanton commented that it is a Federal law. E. Alario responded to P. Lem that the City's interest is in water conservation. Hotels have laws in which they must abide. The City expects hotels to follow the laws but does not enforce the expectations. The City's goal is to reduce water usage. D. Stanton asked for motion to approve. Moved by R. McMillan and seconded by R. Lawson. MOTION CARRIED 5 -1. 1 ABSENT. 6. STATUS OF THE ELECTRIC SYSTEM MAINTENANCE PLAN (JULY. 1996 THROUGH OCTOBER, 19961 D. Tarkington commented that the Underground Subcommittee Quarterly Update Report (Report) summarizes the activities in process in the electric system, since FY 1996/97. A few Projects had started prior to the end of the last fiscal year. The consultant, who was approved by the PUB, will review the data and compile a report due to us within the next several weeks. T. Kirker suggested that an update be given to the PUB in six months. D. Tarkington commented that targets for performance are in the process of being established. 366 D. Stanton asked if the control for underground direct buried cable will be on the list for replacement. D. Tarkington responded yes and that other items will be listed, such as maintenance on the system. R. McMillan asked if the plan addresses the type of customer. D. Tarkington responded yes but the industry uses it for the indices (the average number and duration of outages a customer receives). One reason for the Key Accounts Program is to focus on the customers that would be affected the most by electrical outages. D. Stanton asked if all persons on respirators and life supporting devices have been located. D. Tarkington answered yes, it is an ongoing process. D. Stanton asked how this function was affected by the 8/10/96 outage. D. Tarkington replied that the City does not guarantee service to a single customer. The City gives priority in restoring service to those customers identified with severe health problems. Anaheim aids in providing assistance to customers in developing an emergency plan for a back -up system. T. Kirker asked if designers are sent out to job sites to identify and correct the deficiencies in the pro- active inspection of the overhead and underground systems prior to having jobs designed and work completed. D. Tarkington responded that the crews are conducting as much pro- active inspection as possible. The corrective action consists of identifying hazards, deficiencies, maintenance problems and reliability problems. T. Kirker asked who is identifying the problems. S. Albright responded that the inspection is being conducted through the infrared scanning process and the visual inspections are being conducted by troubleshooters. T. Kirker asked if work orders to detect and complete jobs at one time rather than several times are being designed for crews. S. Albright responded that City crews are currently doing this. P. Lem asked for an explanation of what is being done at the customer's substation, in reference to the inspection of oil analysis testing. S. Albright responded that an infrared scan is conducted to identify potential hot spots of exposed connections on the transformer. Visual inspections are conducted to identify potential oil leaks and indications of a potential failure. P. Lem asked for an explanation of the oil sample analysis. S. Albright responded that the samples of oil are taken and evaluated for potential combustible gases and contaminants, which are indications of failure developing within the transformer. 7. AGENDA ITEMS FOR NEXT MEETING (12/5/961 1. PUB Minutes Formats Review and Determination 2. Regulatory and Legislative Issues Updates 3. City Park Irrigation Project Results 4. Final Project Agreement (FPA) for Project XLC 367 P. Lem asked if the FPA for Project XLC is with the South Coast Air Quality Management District. M. Bell responded yes. This is the Agreement for the trade -off of the Combustion Turbine Emissions and the Groundwater Protection with the EPA. 5. Electric Industry Restructuring topics a. Interim Expenditure Decisions (materials will be provided to the Board for review and discussion) b. Customer Communications Plan (how we intend to talk with customers on Deregulation) 6. Telecommunications Feasibility Study 8. ITEMS BY SECRETARY M. Bell commented that Standard and Poors rated other municipal utilities in Southern California approximately two weeks ago and the results were sent to the Board members on 10/25/96. Rating changes were as Anaheim expected. Most of the other utilities had their ratings lowered. There is not a municipal or investor -owned electric utility in Southern California with a rating above A +. Referencing the IPP (IPA), R. McMillan asked what was the negative report. M. Bell responded the negative outlook for municipal utilities in Southern California is due to their plans for working through the Deregulation environment, with the amount of debt outstanding and the questionable ability to be competitive and to continue along as the market deregulates. The reason for the negative outlook for the IPA was mainly due to Los Angeles Department of Water and Power's (the largest participant in that project) outlook being lowered to a negative rating. The rating agencies were concerned with the City Council's willingness to make difficult decisions that needed to be made during the process. LADWP's City Council studied their electric rate structure for nine months before action was taken. This may be the reason Anaheim was able to receive a stable outlook. The City Council has been positive in reacting to issues and we have a "credible plan" (Standard & Poors' term) for reducing our stranded costs. Anaheim anticipates doing well in the rating process as long as we continue to show progress. M. Bell distributed a memorandum, dated 11/6/96, from the Public Utilities General Manager to the City Manager /City Council /Public Utilities Board, on the Implementation of the new Customer Information System - POWER. P. Lem referred to a previous copy of a Standard & Poors' rating. He asked how the stable outlook for Anaheim and the negative outlook for other municipalities are given in Standard & Poors' press release. M. Bell responded that a numerical rating was given, along with a description projecting their outlook. The wording used by Standard & Poors is stable, negative or positive. One of these terms will be used when rating utilities. 9. ITEMS BY BOARD MEMBERS D. Stanton asked for items by Board Members. P. Lem asked if the PUB packets could be sent out one week prior to the next PUB Meeting, 12/5/96, due to the number of items on the agenda. M. Bell responded that due to the Thanksgiving holiday, 368 packets may not be able to be sent in advance. but Staff will mail it as soon as possible. J. White referred to the memorandum dated 11/6/96, Implementation of the new Customer Information Systems - POWER, and asked the type of response customers will receive when they call 254 -4125. M. Bell responded that the stated telephone number is the direct line to the Customer Services Manager. Customers will be in contact with the person in charge. J. White questioned the level of playing field. M. Bell responded that additional restructuring details will be explained in greater detail, as they become available. Additional restructuring information is expected to become available within the next few months. Referring to an item from October's meeting, R. McMillan asked the reason for Anaheim's higher water rates than those of neighboring cities with the same comparable water services. He also asked if part of it is being underwritten by other items within the cities. E. Alario responded yes, if they are water districts, it is due to taxing ability. Anaheim does not have taxing ability. Other water districts take many of their capital projects and their debt service is retired by a tax rate. It does not show in the rate. Anaheim's system is one of the better systems but may have a slightly higher debt. Depending on how the rate was viewed, Anaheim previously had a high fixed cost. The rates should decrease since the fixed cost was dropped. R. McMillan commented that reasons for neighboring cities' lower rates could be due to less maintenance, less structure, less debt or subsidized in other areas. E. Alario responded that the debt part, if they are other districts, is a reason for the difference. Anaheim cannot retire our debt from property tax, unlike other cities. R. McMillan asked the outcome of the water placement from the Jet Jam `96 event. E. Alario responded that the water was pumped to the sewer because it could not meet the quality standards due to evidence of gas and oil in the water. R. McMillan asked the reason for conducting the event, if this information was previously know. E. Alario stated that the Agreement between Anaheim and the Orange County Water District (OCWD) stated that if the water met certain criteria, the Arrowhead Arena would buy it from OCWD at a reduced rate and Anaheim would percolate it. The level of contaminants could not be met and water had to be pumped to the sewer. The cost for pumping the water to the sewer was approximately $22,500, rather than receiving $7,000. The profit received was approximately $29,000. The event is anticipated to take place next year. T. Kirker requested an update on training the electrical line crews on 69kv splicing. He expressed his concerns about the underground system areas for liquefaction and the portion of overhead fiber - optic cable, in the event of an earthquake. He asked if a plan is in process for placing this cable underground, in order to prevent potential destruction to fiber -optic cable, prevent outages and protect the City's image. He requested these items be placed on the agenda for a future PUB Meeting. 369 o k D. Stanton that that he has been requested to submit a letter, dated 10/17/96, to the City Council. from Mr. Aghjayan, sent to the Chairman of the PUB, on the subject of the Public Utilities Board Meeting on 10/3/96. R. McMillan recommended that the letter be sent to the Council because Council should be made aware of the happenings of the Board Meetings. He shares the displeasure of the item talked about earlier. This item should not be placed under the table. T. Kirker seconded the recommendation. D. Stanton commented that it was moved and seconded. J. White commented that he is not in favor of sending the letter, without conducting an open hearing or listening to the tape. R. Lawson asked J. White to explain his comment of conducting a hearing and asked if it will include members of the PUB. J. White responded yes, a hearing should be conducted before a decision is made. He is not aware, except for the letter, of the issues that would justify sending a letter to the City Council. R. Lawson agreed that a discussion should take place among the Board members before the next step is taken. T. Kirker commented that he is frustrated with trying to get points across and would like to have cohesion among Board members and talk about the items of importance. R. Lawson agreed that reasons are apparent as T. Kirker pointed out, but is not convinced that something cannot be salvaged through discussions with P. Lem and making recommendations about his position on the Board. P. Lem should be given that courtesy. D. Stanton commented that P. Lem had been asked to rectify the problem, on 10/3/96. The reason this item is being mentioned at this time is due to he (D. Stanton) being the last person on the agenda had hoped P. Lem would have taken care of the problem. He (P. Lem) did not apologize to the staff, as requested. The letter will be sent to the City Council, at the Board's request. He asked for suggestions. Motion moved and seconded. MOTION TIED 3 -3. 1 ABSENT. J. White requested that if the letter is sent to the City Council, it state that he voted against sending it. D. Stanton commented that his request has been established. J. White asked since the vote was tied, does it pass or go down. 370 D. Stanton responded that it does not pass. The item can be tabled. L. Moses commented that the item can be brought back to a full Board. D. Stanton asked for a motion to adjourn to the next scheduled PUB Meeting, 12/5/96, at 3:30 p.m. Motion moved by T. Kirker and seconded by R. McMillan. MOTION CARRIED 6 -0. 1- ABSENT. RESPECTFULLY SUBMITTED, ■ Edward K. Aghjaj n Public Utilities eral Manager 371