Loading...
Public Utilities 2012/12/19CITY OF ANAHEIM PUBLIC UTILITIES BOARD MINUTES December 19, 2012 The agenda having been posted on Thursday, December 13, 2012, the Regular Meeting of the Public Utilities Board (Board) was called to order by Vice - Chairperson Dave Morgan at 5:00 p.m. on Wednesday, December 19, 2012, in the 11` Floor Large Conference Room, Anaheim West Tower, 201 S. Anaheim Blvd., Anaheim, California. Board Members Present: D. Morgan, C. Peltzer, J. Machiaverna, B. Hernandez, S.E. Faessel Board Members Absent: P. Carroll Staff Present: D. Calkins, D. Lee, S. Sciortino, E. Zacherl, D. Bailin, J. Lehman, R. Shintaku, S. Sciortino, R. Dowell, M. Lopez, D. Cotton, B. Aviles, L. Quiambao, P. Oviedo Guest(s) Present: D. Wain, Resident & Chairperson of the East District Neighborhood Council; S. Faessel, Resident & Chairperson of the Undergrounding Subcommittee. AGENDA ITEM 1. PUBLIC COMMENTS. None. 2. APPROVAL OF THE MINUTES OF THE REGULAR PUBLIC UTILITIES BOARD MEETING OF NOVEMBER 14, 2012. * 3. ELECTION OF PUBLIC UTILITY BOARD CHAIRPERSON. ** D. Morgan indicated to the Board that as a result of Chairperson J. Brandman being elected as a City Council member, a vacancy became available, so the Board needed to elect a new Chairperson to the Public Utilities Board. Utilities Attorney, D. Bailin explained the nomination and election process to the Board. Thereafter, D. Morgan was nominated as Chairperson, and he subsequently accepted the nomination. No other nominations were made. ACTION TAKEN S.E. Faessel moved approval of the November 14, 2012, Public Utilities Board Minutes. C. Peltzer seconded the motion. MOTION CARRIED: 5 -0 ABSTAINED: 0 ABSENT: 1 (P. Carroll) B. Hernandez moved approval of the nomination of D. Morgan as Chairperson to the Public Utilities Board. S. Faessel seconded the motion. MOTION CARRIED: 5 -0 ABSTAINED: 0 ABSENT: 1 (P. Carroll) 66 ITEM NO. 01 4. APPROVAL OF PHASE If RENEWABLE DEVELOPMENT AGREEMENT BETWEEN SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY (SCPPA) AND THE CITY OF ANAHEIM. * The written, publicly available staff report detailing the item was verbally summarized by S. Sciortino. The Board asked a variety of clarifying questions which culminated in their decision to support bringing forward the amended agreement to be placed in front of the Anaheim City Council for their consideration. 5. APPROVAL OF AMENDMENTS TO RULE 3 OF THE ELECTRIC RATES, RULES AND REGULATIONS AND THE WATER RATES, RULES AND REGULATIONS. * The written, publicly available staff report detailing the item was verbally summarized by D. Calkins. The Board ultimately determined to support bringing forward this item to the Anaheim City Council with their recommendations to approve. D. Morgan requested a report from the staff on the Regulatory Relief Task Force, and how the utility fits into that overall effort. 6. UPDATE ON WATER SYSTEM ISSUES. R. Shintaku, Acting AGM of Water Services for this meeting, gave the Water System Issues update. Three items were discussed, including: (1) Water Supply Conditions; (2) San Diego Approval of Ocean Desalination Plant; and (3) Metropolitan Water District of Southern California (MWD) 2013 Calendar Awards Ceremony. R. Shintaku indicated that staff will provide formal water supply outlook staff reports to the Board, starting in January 2013. In general, Anaheim's water supply conditions look good at this point because of water that is now banked in regional storage. The Orange County groundwater basin storage is currently in good shape, at about 75% full. Furthermore, MWD put 300,000 Acre -Feet (AF) of water in their storage basins in 2012. As a result, MWD's total storage available for dry-year use is now at 2.7 million AF -- the highest level of storage in their history. In regards to rainfall, Orange County started the 2012113 year at an average pace; currently at 85% of normal. However, this winter started out very strong in northern California, which is currently at 170% of normal, mostly due to a strong storm in the week of Nov 28 to Dec 4. R. Shintaku also indicated that at the end of November, the San Diego County Water Authority voted 85% in favor of its commitment to purchase water from the Carlsbad Seawater Desalination Plant, meaning that construction of the plant will now move forward. The plant is a public - private partnership that will be built by Poseidon Resources of Connecticut. The Project will produce 50 million gallons per day — which is about 7% of the water needs of the San Diego region. B. Hernandez moved approval of Phase 11 Renewable Development Agreement between Southern California Public Power Authority (SCPPA) and the City of Anaheim. J. Machiaverna seconded the motion. MOTION CARRIED: 5 -0 ABSTAINED: 0 ABSENT: I (P. Carroll) B. Hernandez moved approval of Amendments to Rule 3 of the Electric Rates, Rules and Regulations and the Water Rates, Rules and Regulations. J. Machiavema seconded the motion. MOTION CARRIED: 5 -0 ABSTAINED: 0 ABSENT: 1 (P. Carroll) 67 The plant will be operational by 2016. This has some bearing on Anaheim, as Utilities staff have been meeting (along with other Orange County water utilities) with Poseidon about possibly building a seawater desalination plant in Huntington Beach. The Huntington Beach plant still needs Coastal Commission approval, which is expected by mid -2013. We're not sure at this point whether a seawater desalination plant makes sense for Orange County. The purpose of these meetings with Poseidon is to decide what a water purchase agreement would be like and whether that makes sense in our water supply portfolio. This process has been moving slowly. We should have something substantive to share with the Board late in 2013. Lastly, R. Shintaku updated the Board on the MWD Celebrate Student Artists of 2012 event held on December 13' at MWD Headquarters, where Anaheim students Bethany Torres and 5' grader Daryiush Khashayar were honored and featured in MWD's 2013 annual Water is Life calendar, which features 36 student posters selected from 162 entries that were submitted by many of MWD's 26 member and retail water agencies. Calendars were distributed to the Public Utilities Board members. 7. UPDATE ON ELECTRIC SYSTEM ISSUES. D. Lee, AGM of Electric Services, provided an update on the recent wind activity affecting power in Southern California. There were only two incidents from the wind in Anaheim, and in one case, many of the customers were restored within six minutes due to the ability to remotely perform field switching and isolate the outage. The inclusion of automation equipment will continue to support reducing outage durations. D. Lee also read a thank you card and showed several thank you posters drawn by elementary school children after they attended Public Power Week. The cards and posters reflected that the children enjoyed the bucket truck rides and learning about electric safety. 8. UPDATE ON FINANCE ISSUES. E. Zacherl, AGM of Finance and Administrative Services, directed the Board's attention to the Utilities Dashboard contained in their information packet. He reported to the Board that the year -to -date revenue through November was $185.2 million for the electric utility. This is $14.2 million or 8.3% over budget. The increased sales continue to be driven by warmer than normal weather. Year -to -date expenses through November for the electric utility were $153.4 million, which is $1.6 million less than budget as a result of reduced operating expenses. He also shared with the Board that year -to -date revenue through November for the water utility was $28.9 million, which is $2.8 million or 10.7% over budget. Weather is also the primary factor for the favorable variance. Year -to -date expenses through November for the water utility were $21.9 million, which is $400,000 or 1.8% less than budget. The favorable variance was a result of reduced operating and maintenance expenses, which were partially offset by an increase in water supply expense due to the increase in demand. 68 E. Zacherl also reported to the Board that the annual citywide audit had been formally completed and had been accepted by the City's Audit Committee on December 18, 2012. He concluded by stating that he will be bringing to the Board the final stand -alone financial statements and a summary of the audit process in January. 9. UPDATE ON JOINT SERVICES ISSUES. S. Sciortino, AGM of Joint Services, began by informing the Board that the Public Utilities Department will be issuing a Request for Proposal (RFP) in early January for Design /Bui Id contract for the solar project on the Convention Center rooftop. The project will provide approximately 1.8 MW of solar capacity that the Department will own outright. S. Sciortino explained that the ownership route was more economic than having a third party build /own and providing the energy to the Department thru a power purchase agreement. Proposals to the RFP are expected in mid - February and final contract award for Board approval by the March meeting. S. Sciortino also provided a brief update to the Brea Landfili project. The project is still having metering/communication issues in relaying production information to the CAISO. There were also issues with the gas cleaning process after gas collection but before it's sent to the turbines for generation. S. Sciortino believes these issues will be settled by the next meeting and will continue to provide updates in the future. S. Sciortino informed the Board that he will provide the last six month's data on Canyon Power Plant (CPP) operations, costs, and contributions to our Wholesale Revenues, particularly in view of the hot summer we experienced, at the January meeting. In fact, the facility was in such demand during August that we almost ran out of air quality permit hours to operate. The facility continues to operate as expected and is still well "in the money" during the last few months. Finally, the Board was presented with the good news that the Federal Energy Regulatory Commission (FERC) had approved California Independent System Operator ( CAISO) Tariff changes to exclude energy provided through tax - exempt financed generation from the definition of being deemed sales for the benefit of the system at large. This was the concept sought by Anaheim and the other City members of the CAISO to change in order to avoid having to fully participate in the California Air Resources Board's (CARB's) cap and trade auction process. CARB's regulations required all market sales in the CAISO to reflect the cost of carbon adders in the price of electricity in order to provide an economic incentive to decrease Green House Gas (GHG) emissions. This `economic value' would be achieved by mandating all CAISO participants, including Anaheim, to put all their allocated allowances (which we received at no cost) into the auction process. However, the FERC approval of the CAISO tariff change allows Anaheim to legally avoid the cost/risk of having to sell all our allowances and then buy them back at auction. 69 S. Sciortino reminded the Board of the earlier presentations provided to them how there could be financial implications of having to participate in the auction as well as how vertically integrated utilities, such as Anaheim, would be put at a great disadvantage unless it could avoid having to fully participate in the auction process. S. Sciortino stated that the Department's staff, along with some of the other City staff members, made a huge effort to get the CAISO to make the tariff change and subsequently assist the CARB staff in accepting that this change would provide a method to exclude our full participation in the auction process. 10. UPDATE ON ENERGY RISK & LEGISLATIVE 1 REGULATORY AFFAIRS ISSUES. J. Lehman, Chief Risk Officer, reported on several items. The first was that the South Coast Air Quality Management District (AQMD) rescinded the Notice of Violation it issued related to the lack of monthly emission reports during the construction of Canyon Power Plant. This good news, while not unexpected, demonstrates the Department's continued positive interface with the AQMD. She stated that next month, the Department's Quarterly Internal Compliance Plan (ICP) will be given to the Board. The ICP provides the status on the Department's compliance activities. The second item was in regard to the upcoming new 2 -year legislative session. The session officially begins in January 2013, however 100s of new bills have already been introduced, though, to date, nothing unexpected has been introduced. J. Lehman reported that she will be going to Sacramento in January to meet with Anaheim's elected officials to share with them some of the Department's concerns, mainly that: • special tariffs for renewable generators are costly to customers, legislation to create additional special tariffs is not necessary; • additional proscriptive requirements on how to meet the renewable portfolio standard and greenhouse gas laws can be costly to customers, and should be avoided; • local water use fees to fund state programs can be costly to consumers, and are not the most effective way to fund programs. J. Lehman shared that the Legislative Working Group will meet next again in February 2013. Newly introduced legislation will be presented to the Working Group, and the guiding principles approved by the Board, which are used by the Department to develop legislative positions, will be reviewed. Lastly, there is a vacancy on the Legislative Working Group because of Jordan Brandman's departure, and that the plan was to fill this vacancy after the new PUB member was named. 11. AGENDA ITEM(S) FOR THE NEXT PUBLIC UTILITIES BOARD MEETING ON JANUARY 23,2013: • Water Supply Conditions Update • Discussion of the Replacement of a Member of the PUB Legislative Working Group 70 • Election of the PUB Vice -Chair ** • Request for Approving New Energy Savings Goals • Reimbursement Agreement with Irvine Company for Annexation of Mountain Park into Orange County Water District * • Renewables Portfolio Standard Annual Procurement Plan (SBX 12) * • Firm & Non Firm Point to Point Transmission Service Agreement with Various Transmission Service Providers * 12. ITEM(S) BY SECRETARY. D. Calkins, Acting Secretary for this meeting, informed the Board of a lawsuit that was recently filed against the City relating to the City Charter's 4% transfer of water revenue to the General Fund. The lawsuit claims this transfer does not comply with Proposition 218, which was passed in 1996 and requires local governments to have a vote of affected property owners for any proposed new or increased property- related assessment. Similar lawsuits have been filed lately against a number of other cities, including Santa Ana and Fullerton. The Department is working with the City Attorney's office, which will be hiring a law firm that is experienced in these types of lawsuits, to prepare a defense. City Council was briefed on this issue in Closed Session at its December i 8` meeting. D. Calkins suggested the Board notice the Christmas tree in the first floor lobby of Anaheim West Tower, which was purchased from Peltzer Pines as so many trees in Orange County are this time of year. 13. ITEM(S) BY BOARD MEMBERS. D. Morgan requested to agendize a discussion of a Board team Staff to develop a draft building workshop for the next meeting with a draft agenda to include agenda for workshop. discussion of the general high level goals for the Utilities Department for the coming year. Staff can refresh the Board what the Board's charter is, where we are established, what our authority is and what isn't. D. Morgan also thanked staff, he is looking forward to working with staff and the board members. J. Machiaverna congratulated D. Morgan on his new position as Chair of the Public Utilities Board. He also agrees with D. Morgan in regards to having a workshop, as it will benefit the Board. J. Machiaverna added that it's nice to see the Utility having stronger financial results as compared to previous years. He wished everyone a great holiday season and to carry the momentum through next year. B. Hernandez also congratulated D. Morgan on his position as Chair of the Public Utilities Board. He added that he is looking forward to progressive and positive outcomes of this Board for the upcoming year. He added that Anaheim should start a dialogue with the regulatory agencies so they understand and appreciate what the Utility is trying to do. There has to be some kind of understanding and we need to involve the legislators and the politicians. C. Peltzer congratulated D. Morgan on his position as Chair of the Public Utilities Board. He wished everyone a Happy New Year, and was very appreciative of staff. 71 S.E. Faessel agreed that the Department is headed in the right direction and wished fellow board members and staff Happy Holidays and a Merry Christmas. 14. ADJOURNMENT: (TO THE REGULAR MEETING ON JANUARY 23, 2013 AT 5:00 P.M., IN THE 11 FLOOR LARGE CONFERENCE ROOM, ANAHEIM WEST TOWER, 201 S. ANAHEIM BOULEVARD, ANAHEIM, CALIFORNIA). Respectfully sub fitted, I Yr ���� - Marcie L. Edwards Secretary, Public Utilities Board B. Hernandez moved to adjourn the Regular Meeting at 6:24 p.m. to the Board's next meeting date of January 23, 2013 at 5:00 p.m. J. Machiaverna seconded the motion. MOTION CARRIED: 5 -0 ABSTAINED: 0 ABSENT: 1 (P. Carroll) * 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. 72