Public Utilities 2012/09/26CITY OF ANAHEIM
PUBLIC UTILITIES BOARD
MINUTES
September 26, 2012
The agenda having been posted on Wednesday, September 19, 2012, the Regular Meeting of the Public
Utilities Board (Board) was called to order by Chairperson Jordan Brandman at 5:01 p.m. on Wednesday,
September 26, 2012, in the 11 "' Floor Large Conference Room, Anaheim West Tower, 201 S. Anaheim Blvd.,
Anaheim, California.
Board Members Present: J. Brandman, J. Machiaverna, P. Carroll, C. Peltzer, D. Morgan,
B. Hernandez, S.E. Faessel
Board Members Absent: None
Staff Present: B. Wingenroth, M. Edwards, D. Calkins, D. Lee, S. Sciortino, E. Zacherl,
M. Lopez, J. Lehman, A. Kott, L. Quiambao, P. Oviedo, T. Sato, G. Bowen
Guest(s) Present: D. Wain, Resident; S. Faessel, Resident; M. Ward, Former Electric Services
Assistant General Manager
AGENDA ITEM ACTION TAKEN
1. PUBLIC COMMENTS.
No Public Comments. J. Brandman closed the
public comments portion of
the meeting.
2. APPROVAL OF THE REGULAR PUBLIC UTILITIES BOARD
MEETING OF AUGUST 22, 2012. *
B. Hernandez moved
approval of the August 22,
2012, Public Utilities Board
Minutes. C. Peltzer
seconded the motion.
MOTION CARRIED: 6 -0.
ABSTAINED: 0.
ABSENT: 1. (P. Carroll)
M. Edwards introduced B. Wingenroth, Anaheim's City Manager, to
the Board. B. Wingenroth addressed the Board, providing updates on
key city issues. He also shared his gratitude and pride regarding all
the great work by the Public Utilities Department, including the
completion of the Canyon Power Plant.
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3. UPDATE ON CAP - AND - TRADE. *
The written, publicly available staff report detailing the item was
verbally summarized by staff.
J. Brandman left at 5:40 P.M.
4. UPDATE ON WATER SYSTEM ISSUES.
D. Calkins, AGM of Water Services, referred to a fact sheet on the
Bay Delta Conservation Plan (BDCP), which was provided to the
Board. The BDCP is intended to remediate problems in the
Sacramento Bay Delta, which is the hub of California's water supply.
The Bay Delta provides water for two - thirds of the State's population
and 3 million acres of agriculture, and is critical for the health of the
State's $1.7 trillion economy. But the Bay Delta ecosystem has
deteriorated over the years, and a major earthquake in the area will
cripple California's water supply. The BDCP provides the framework
for fixing the Bay Delta. It would improve the Delta ecosystem
through habitat restoration, and removal of pollutants and other
"stressors" to the environment, and construct conveyance tunnels to
protect the State's water supply. After five years of study and a cost
of $150 million, the State is nearing completion of the environmental
process. The first public draft of the Environmental Impact Report
(EIR) is expected later this fall.
5. UPDATE ON ELECTRIC SYSTEM ISSUES.
D. Lee, AGM of Electric Services, updated the Board of an electrical
fault that occurred at Canyon Power Plant on August 29`', the same
day that an earthquake centered in Yorba Linda was experienced. He
showed photos and a brief video of the occurrence and reported that
three of the units tripped off and that the protection systems limited
the damage to the Iightning arresters at the auxiliary
transformer. Two generating units were returned to service the next
day and one unit had repairs made and was returned to service several
days later. Repairs on the auxiliary transformer were also completed
and placed back into service.
D. Lee provided an update on Public Power Week, stating that events
are planned for the Downtown Farmer's Market on October 11`
which will include bucket truck rides, educational exhibits for
students as well as an electric vehicle display.
D. Lee informed the Board that a service brochure was developed to
provide to developers and contractors with information and typical
fees on electric utility service requests. The brochures are placed at
counters and on -line for the public.
6. UPDATE ON FINANCE ISSUES.
E. Zacherl, AGM of Finance and Administration, invited the Board's
attention to the August Financial Dashboard and shared that year -to-
date through August, electric revenues of $66.7 million which were
$0.8 million over budget or approximately 1.3 %. Retail revenues
were over budget by $1.6 mullion or 5.3.
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Electric expenses, year to date through August, were $50.0 million,
and were $7.3 million under budget or approximately 12.7 %.
The primary reasons for the under - budget condition were a reduction
in power supply costs, as a result of Intermountain Power Project
(IPP) running at only 65% of capacity earlier in the summer, and a
continued delay in production start -up at the new Brea landfill gas
facility eliminating the need to pay for test energy, which had been
projected when the budget was prepared. E. Zacherl then invited the
Board's attention to the Water portion of the Dashboard, which
showed year to date revenues through August of $12.0 million which
were $1.0 million over budget or approximately 9.0 % due to warmer
temperatures during the period. Water expenses for the same period
of $9.1 million were $200,000 over budget or approximately 2.0% as
a result of having to purchase additional water supply for the
increased sales.
E. Zacherl completed the report to the Board by sharing that the
transaction to refund the 2002A Series of Electric Revenue Bonds, to
take advantage of current market low interest rates, was completed
during the first week of September. The transaction resulted in a net
present value savings of approximately $17.5 million or 18.5% and
will reduce the Department's debt service by approximately $900,000
a year for the next 20 years, and will not extend the maturity date of
the original issue. He also reported to the Board that Fitch Ratings
Agency completed their annual review of the outstanding water bonds
and affirmed the Water Utility's AAA rating with a stable outlook. In
conclusion, E. Zacherl shared that he is in the process of obtaining a
revolving line of credit or similar type of credit facility in the amount
of $100 million. The facility will provide the Department the ability
to draw upon it for multiple purposes, one of which may be the need
to post collateral for the Cap- and -Trade program, as well as other
opportunities. Unused portions of the line will provide a favorable
impact to the Department's liquidity or cash available as viewed by
the ratings agencies, and may also be viewed as a hedge against
unforeseen cash requirements.
7. UPDATE ON JOINT SERVICE ISSUES.
No updates by S. Sciortino, AGM Joint Services.
8. UPDATE ON ENERGY RISK & LEGISLATIVE /
REGULATORY AFFAIRS ISSUES.
J. Lehman, Chief Risk Officer, invited the Board's attention to a
briefing report on the status of the key legislation recently passed and
still pending. J. Lehman mentioned that the State legislative session
is ending at the end of this month on September 30' and two bills
(AB 1332 and SB 591) are still pending that deal with net metering
and Feed In Tariffs, which could provide subsidies to renewable
generators at the expense of rate payers. Both bills were significantly
amended, and do not have to be implemented if the local governing
body determines that subsidies are created.
J. Lehman, also mentioned that as previously discussed during the
Greenhouse Gas presentation, Anaheim Public Utilities escaped
having to divert funds into the newly created State Greenhouse Gas
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(GHG) Fund, so any potential revenues from the sale of GHG
Allowances that APU might be forced to auction can go back to
helping to offset the costs to purchase Allowances, thus allowing the
Utility to help keep the costs impacts to customers lower than they
otherwise would be if payments to the State were required. She also
added that the Wholesale Energy Risk Management Program is being
revised to address the recent Greenhouse Gas and Renewable
Portfolio Standard (RPS) regulations.
Further, J. Lehman explained to the Board that the Department's
Underground Storage Tanks (UGST) program may need to be
certified by the State based on recently passed law (AB 1701).
And in conclusion, J. Lehman stated that next month, the quarterly
status report on APU's compliance activities will be provided to the
Board.
9. AGENDA ITEM(S) FOR THE NEXT PUBLIC UTILITIES
BOARD MEETING ON OCTOBER 24, 2012.
• Electric Vehicle Readiness Update
• Regulatory Relief Measures *
• Production Cost Modeling Software Renewable
• Metropolitan Water District Purchase Order *
10. ITEM(S) BY SECRETARY.
None
11. ITEM(S) BY BOARD MEMBERS:
J. Machiaverna received his Home Energy Report and commented
that he found the information interesting. .
B. Hernandez shared his gratitude that the Board is fortunate enough
to have the business acumen among our staff that allows us to
navigate through complex regulatory and legislative issues. Hats off
to all the staff for all the efforts.
P. Carroll seconded B. Hernandez's comments on staff doing a great
job on the Cap- and - Trade.
C. Peltzer requested a break down on the cash Flow in relation to the
Canyon Power Plant with the warm weather.
S.E. Faessel thanked E. Zacherl for working with the numbers and
also thanked the Electric crews for taking care of the challenges this
month with the power outages and for the excellent response.
D. Morgan echoed the positive comments on staff, and thanked B.
Wingenroth for attending the Public Utilities Board meeting and for
his leadership over the past year.
S. Sciortino will provide a
report next month.
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12. ADJOURNMENT. (TO THE REGULAR MEETING ON
OCTOBER 24, 2012 AT 5:00 P.M., IN THE 11" FLOOR LARGE
CONFERENCE ROOM, ANAHEIM WEST TOWER, 201 S.
ANAHEIM BOULEVARD, ANAHEIM, CALIFORNIA).
B. Hernandez moved to
adjourn the Regular Meeting
at 6:14 p.m. to the Board's
next meeting date of October
24, 2012 at 5:00 p.m. C.
Peltzer seconded the motion.
MOTION CARRIED: 6 -0.
ABSTAINED: 0.
ABSENT: 1 (J. Brandman).
* 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.
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