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Public Utilities 2013/11/20CITY OF ANAHEIM PUBLIC UTILITIES BOARD MINUTES NOVEMBER 20, 2013 The agenda having been posted on Thursday, November 14, 2013, the Regular Meeting of the Public Utilities Board (Board) was called to order by Chairperson John Machiaverna at 5:00 p.m. on Wednesday, November 20, 2013, in the l l Floor Large Conference Room, Anaheim West Tower, 201 S. Anaheim Blvd., Anaheim, California. Board Members Present: J. Machiaverna, D. Singer, B. Hernandez, S.E. Faessel, D.Wain, L. Cahill Board Members Absent: C. Monaco Staff Present: D. Lee, D. Calkins, J. Lehman, G. Bowen, E. Zacherl, A. Kott, J. Wei, L. Quiambao, M. DeSollar, B. Beelner, T. Nelson, M. Robledo, F. Barvarz Guest(s) Present: Jennifer Vaughn, Southern California Gas; Ed Fernandez, Southern California Gas; Ron Pickett, Public Works Analyst AGENDA ITEM 1. PUBLIC COMMENTS. 2. APPROVAL OF THE MINUTES OF THE REGULAR PUBLIC UTILITIES BOARD MEETING OF OCTOBER 23, 2013. * 3. ADOPTION OF THE PROPOSED 2014 PUBLIC UTILITIES BOARD MEETING SCHEDULE. ** 4. PRESENTATION ON UTILITY RATES. B. Beelner, Financial Planning Manager, gave a presentation to the Board conceming the City of Anaheim's electric and water rates. This presentation covered how Anaheim Public Utilities assesses its rates to its various customer classes, how those rates are developed, a detailed discussion on the purpose and creation of demand charges, ACTION TAKEN B. Hernandez moved approval of the Minutes of the Regular Public Utilities Board Meeting of October 23, 2013. S.E. FaesseI seconded the motion. MOTION CARRIED: 6-0. ABSTAINED: 0. ABSENT: 1 (C. Monaco). D. Singer moved approval of the Adoption of the Proposed 2014 Public Utilities Board Meeting Schedule. D. Wain seconded the motion. MOTION CARRIED: 6-0. ABSTAINED: 0. ABSENT: 1 (C. Monaco). 2013-68 AGENDA ITEM ACTION TAKEN and the approval process required for new rates. The presentation covered rate options for customers and the rate flexibility customers have with the Anaheim Public Utilities that they would not have in other areas of Orange County. This flexibility includes: optional Time of Use rates for commercial/industrial customers, economic development rates, optional electric vehicle rates to encourage customers to charge their vehicle at night, and the recently adopted rate for very efficient industrial and commercial customers. B. Beelner then provided a comparison between what typical customers in Anaheim pay for water and electric service as compared to what the same customer would pay in another area of Orange County. Anaheim has the 5th lowest water rates out of 30 water agencies in Orange County, and is typically 10 -20% below other areas of Orange County for residential electric service. The Board and staff discussed several issues: including the efficacy of electric vehicle rates, challenges facing the utility in terms of distributed generation and its impact on revenue, and the distribution of recycled water once its availability is more wide spread. 5. PRESENTATION ON PARK SUBSTATION. J. Wei, Electric Systems Planning Manager, shared a presentation on the Park Substation Project. He provided project background, project description, and described the Anaheim Public Utilities Department's (Department) involvement with the surrounding community before and during the construction. He highlighted the project as the first subterranean Electric Substation in the United States, with a park on top. The Park Substation has been visited by utilities worldwide and featured in many trade magazines and publications. 6. APPROVAL OF MASTER UTILITY POLE LEASE D. Wain moved Approval of AGREEMENT. * Master Utility Pole Lease Agreement, F. Barvarz, Transmission and Distribution Manager provided a B. Hernandez seconded the presentation on pole attachments. The pole lease agreement comports motion. to Assembly Bill 1027, and allows the Department to recover its MOTION CARRIED: 6-0. operations and maintenance costs associated with utility poles from ABSTAINED: 0, telecommunication companies who seek to attach their facilities. The ABSENT: 1 (C. Monaco). written, publicly available staff report detailing the item was verbally summarized by staff. The Board asked a variety of questions which culminated in their decision to support the approval of the Master Utility Pole Lease Agreement for Anaheim City Council's review and consideration. 7. APPROVAL OF STREET LIGHT POLE LICENSE D. Wain moved Approval of AGREEMENT WITH THE SOUTHERN CALIFORNIA GAS Street Light Pole License COMPANY. * Agreement with the Southern California Gas Company. F. Barvarz, Transmission and Distribution Manager, provided a L. Cahill seconded the motion. presentation on street light attachments and the Gas Company's MOTION CARRIED: 6-0. initiative to provide advanced metering in their service territory. City ABSTAINED: 0. staff, including Public Works and Utilities, worked with the Gas ABSENT: 1 (C. Monaco). 2013 69 AGENDA ITEM Company to address any resident's concerns that may arise from their project. Additionally, the use of City street lights mitigates the installation of new stand -alone poles in the public right of way. The written, publicly available staff report detailing the item was verbally summarized by staff. The Board asked a variety of questions which culminated in their decision to support the approval of the Street Light Pole License Agreement with Southern California Gas Company for Anaheim City Council's review and consideration. 8. UPDATE REGARDING CHARTER REVIEW COMMITTEE CONSIDERATION OF CHARTER AMENDMENT PROPOSALS. D. Lee, Public Utilities General Manager, provided an overview of the information provided in the Board agenda package on the proposed Charter Amendments from the Public Utilities Department. The Charter Review Committee (Committee) unanimously approved the proposed recommendations at its meeting on October 17, 2013. Proposed red -lined changes to the Charter language are now being prepared by the City Attorney's office, which will be presented to the Committee at its next meeting on December 3, 2013. 9. DETERMINE THAT THE ADDITIONS AND MODIFICATIONS TO THE CITY OF ANAHEIM, CALIFORNIA TRANSMISSION OWNER TARIFF FERC (FEDERAL ENERGY REGULATORY COMMISSION) ELECTRIC TARIFF (TO TARIFF) ARE EXEMPT UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT, SECTION 21080 (B)(8) OF THE PUBLIC RESOURCES CODE OF THE STATE OF CALIFORNIA AND TITLE 14 OF THE CALIFORNIA ADMINISTRATIVE CODE, SECTION 15273(a); AND APPROVAL OF ADOPTION OF THE TO TARIFF. * G. Bowen, Integrated Resources Manager, provided a brief overview of the tariff, which relates to use of Department -owned transmission assets outside of the City. There are no impacts to retail rates as a result of this tariff. The written, publicly available staff report detailing the item was verbally summarized by staff. The Board asked a variety of questions which culminated in their decision to determine that the additions and modifications to the City of Anaheim, California Transmission Owner Tariff FERC (Federal Energy Regulatory Commission) Electric Tariff (TO Tariff) are exempt under the California Environmental Quality Act (CEQA), Section 21080 (b)(8) of the Public Resources code of the State of California Administrative code, section 15273(a); and approve of adoption of the TO Tariff for Anaheim City Council's review and consideration. ACTION TAKEN D. Singer moved approval of the adoption of the City of Anaheim, California FERC Electric Tariff (TO Tariff) following a determination that the additions and modifications to the TO Tariff are exempt from CEQA. L. Cahill seconded the motion. MOTION CARRIED: 6-0. ABSTAINED: 0. ABSENT: 1 (C. Monaco). 2013-70 AGENDA ITEM 10. APPROVAL OF SECOND AMENDMENT TO AGREEMENT WITH KUBRA AMERICA WEST, INC. * E. Zacherl, AGM of Finance and Administration, provided a brief overview of the agreement which extends popular on -line bill payment services to customers. These bill payment services are being routinely utilized by about a third of the Department's customers. The written, publicly available staff report detailing the item was verbally summarized by staff. The Board asked a variety of questions which culminated in their decision to support the approval of the Second Amendment to Agreement with Kubra America West, Inc. for Anaheim City Council's review and consideration. 11. DISCUSSION OF DODD -FRANK ACT FINAL RULES CONCERNING MUNICIPAL ADVISORS. E. Zacherl, AGM of Finance and Administration, summarized the adjustments to Dodd -Frank Act final rules concerning municipal advisors. Staff and Board discussed these changes to clarify the guidelines. 12. UPDATE ON WATER SYSTEM ISSUES. D. Calkins, AGM of Water Services, updated the Board on the water main break that occurred on La Palma Avenue in front of the new Kaiser Hospital on Friday evening, November 15. Even though this was a significant break that received media attention, no customers were out of water. Water Field staff responded immediately and worked all night and most of Saturday to repair the break and restore the pipeline to service. Staff from multiple departments — including Police, Fire, Public Works and Public Information Office — worked very effectively with Utilities staff to shut down the flow of water, direct traffic, respond to media inquiries, and repair the street. D. Calkins updated the Board on Poseidon's proposed Seawater Desalination Plant in Huntington Beach. Last week, the California Coastal Commission postponed a decision on the final permit for the proposed project. Coastal Commission staff had recommended approval of the permit but with some unexpected conditions, including a sub - surface ocean intake. Poseidon will now put together additional information about ocean intake alternatives and will re -file their application next year. This latest development will likely delay the Coastal Commission decision on the project permit by approximately one year, and will delay the timing for when Anaheim will need to make a decision about whether to purchase a portion of the Plant output into next year. In response to a question from the Board about Orange County Water District's (OCWD) Ball Road Basin property, D. Calkins stated that Friday, November 15, 2013, at a Special Board meeting, the OCWD Board voted in Closed Session to hire Voit Real Estate Services to negotiate a long -term lease with Competitive Power Ventures (CPV) ACTION TAKEN S.E. Faessel moved approval of the Second Amendment to Agreement with Kubra America West, Inc. D. Singer seconded the motion. MOTION CARRIED: 6-0. ABSTAINED: 0. ABSENT: 1 (C. Monaco). 2013 71 AGENDA ITEM to use the property for a power plant. 13. UPDATE ON ELECTRIC SYSTEM ISSUES. D. Lee provided an update on the vacant Assistant General Manager, Electric Services position, stating that managers in the division would rotate in an acting capacity until the recruitment is conducted. 14. UPDATE ON FINANCE ISSUES. E. Zacherl, AGM of Finance and Administration, invited the Board's attention to the Utilities Dashboard. He shared that year -to -date revenues for both electric and water remain over budget through the month of October, and continue to both be attributable to the warmer than normal weather for much of that period. 15. UPDATE ON JOINT SERVICES ISSUES. G. Bowen, Integrated Resources Manager, gave a brief update on the status of the City's Renewable Portfolio Standards target for the first Compliance Period ending in 2013. He indicated that the Department was on track to reach its 20% goal at the end of the year and that the final numbers will be verified in February 2014. G. Bowen also provided the Board with a brief update on the Customer Information System (CIS). The CIS is on track and on budget and that training for the new system would begin in January, 20I4. 16. UPDATE ON ENERGY RISK & LEGISLATIVE 1 REGULATORY AFFAIRS ISSUES. J. Lehman, Chief Risk Officer, provided an update on several programs: first on the Wholesale Energy Risk Management Program (ERM) and report for the first quarter of the 2014 fiscal year which covers July, August, and September 2013. She shared that there were no issues during the quarter, and that this included energy transactions as well as those involving environmental attributes such as Greenhouse Gas allowances and Renewable Energy Credits, and overall counterparty credit ratings remained stable with several counterparties actually improving. J. Lehman also provided the legislative wrap up report for 2013, and as reported last month, 2013 was a fairly calm legislative year with many issues being tabled until January 2014. However, there are several bills that could have indirect impacts on the Department, including Assembly Bill (AB 327) — which impacts investor owned utilities' (IOUs') rates, net metering programs, and provides the California Energy Commission with the authority to increase Renewable Portfolio Standards (RPS) for IOUs, and AB 43 — which is a shared renewables program. J. Lehman also provided a brief update on the Department's electric reliability compliance program, explaining that because the ACTION TAKEN 2013-72 AGENDA ITEM ACTION TAKEN Department is a distribution provider, sells power, and plans for and serves load, it is under the jurisdiction of the North American Reliability Corporation (NERC) and must meet mandatory federal standards to ensure the reliability of the high voltage transmission system. Currently, there are over 40 standards the Department must comply with that cover critical infrastructure protection, emergency preparedness and planning, system protection and controls, voltage and reactive controls, and transmission operation. She explained that as part of the federal requirements, compliance audits are conducted every five years; the last one was conducted in 2008 and that staff is preparing for the next one in February 2014. 17. AGENDA ITEM(S) FOR THE NEXT PUBLIC UTILITIES BOARD MEETING ON DECEMBER 18, 2013. Bay Delta Conservation Plan Presentation Energy Field Presentation Lewis Substation Project Presentation 18. ITEMS) BY SECRETARY. D. Lee shared information pertaining to customer fraud that some customers have been experiencing and the steps taken by the Department to alert customers through social media, automated phone calls, text alerts, and flyers at public counters. He also shared that Kristine Ridge, Human Resources Director, was confirmed as the new Deputy City Manager, and will serve in both positions. D. Lee also announced E. Zacherl's retirement at the end of December. 19. ITEM(S) BY BOARD MEMBERS. B. Hernandez thanked staff regarding the information on the possible fraud, and also shared a utility solicitation that he recently received. D. Wain congratulated D. Lee on his appointment as Public Utilities General Manager and looks forward to working with him as head of the Department. S. E. Faessel echoed congratulatory comments to D. Lee, adding that the Board has full trust knowing that he will provide a stable leadership for the Department. She also referred to the presentation on Utility Rates, commenting that Anaheim residents and businesses benefit from rates that are under local control. J. Machiaverna congratulated D. Lee and thanked staff for an informative and progressive meeting. 20. ADJOURNMENT: (TO THE REGULAR MEETING ON B. Hernandez moved to DECEMBER 18, 2013, AT 5:00 P.M., IN THE 11" FLOOR adjourn the Regular Meeting at LARGE CONFERENCE ROOM, ANAHEIM WEST TOWER, 7:20 p.m. to the Board's next 201 S. ANAHEIM BOULEVARD, ANAHEIM, CALIFORNIA). Regular Meeting date of December 18, 2013 at 5:00 p.m. D. Singer seconded the motion. 2013-73 AGENDA ITEM S lly sub fitted, Dukku Lee Secretary, Public Utilities Board ACTION TAKEN MOTION CARRIED: 6-0. ABSTAINED: 0. ABSENT: 1 (C. Monaco). * 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.