Loading...
Public Utilities 2013/12/18CITY OF ANAHEIM PUBLIC UTILITIES BOARD MINUTES DECEMBER 18, 2013 The agenda having been posted on Friday, December 12, 2013, the Regular Meeting of the Public Utilities Board (Board) was called to order by Chairperson John Machiavema at 5:00 p.m. on Wednesday, December 18, 2013, in the I P 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, C. Monaco Board Members Absent: None. Staff Present: D. Lee, D. Calkins, S. Sciortino, E. Zacherl, M. Robledo, B. Beelner, J. Lehman, G. Bowen, A. Kott, J. Wei, L. Quiambao, M. DeSollar, P. Oviedo, T. Cooke, J. Coe, E. Murdock Guest(s) Present: AGENDA ITEM 1. PUBLIC COMMENTS. D. Lee recognized E. Zacherl and his upcoming retirement, and thanked him for his 23 years of service with the City of Anaheim. E. Zacherl instrumental in overseeing the financial health of Anaheim Public Utilities (APU) as the Assistant General Manager, Finance and Administration. The Board also recognized and extended their thanks to E. Zacherl for his service. 2. APPROVAL OF THE MINUTES OF THE REGULAR PUBLIC UTILITIES BOARD MEETING OF NOVEMBER 20, 2013. * 3. PRESENTATION ON ENERGY FIELD. M. Brownrigg, Resource Efficiency Advisor, shared a power point presentation on Energy Field. Information about the purpose, project location, cost, energy and water saving technologies, and project results was provided regarding the pilot project that tested a number ACTION TAKEN S.E. Faessel moved approval of the Minutes of the Regular Public Utilities Board Meeting of November 20, 2013, L. Cahill seconded the motion. MOTION CARRIED: 6-0. ABSTAINED: 1 (C. Monaco). ABSENT: 0. 2013-72 AGENDA ITEM ACTION TAKEN of new technologies. The project has been well received by the community by providing much needed open space for nearby residents. 4. PRESENTATION ON THE LEWIS SUBSTATION 220KV CIRCUIT BREAKER REPLACEMENT PROJECT. T. Cooke, Electric Field Superintendent - Substations, shared an update on the Lewis Substation 220kV Circuit Breaker Replacement Project with the Board. He provided project background, description, logistics and schedule, and highlighted the project benefits of improved reliability, increased capacity, reduced maintenance and lower volume of internal gas. Board members asked a variety of questions about the project, including the safety aspects of the work being performed. T. Cooke explained that the substation crew supervisors are also responsible for the safety aspects of each project for their work crews, and closely coordinate with other project team members including operators, technicians and engineering staff. 5. DISCUSSION ON THE AMERICAN PUBLIC POWER AUTHORITY'S PUBLICATION ENTITLED DISTRIBUTED GENERATION — AN OVERVIEW OF RECENT POLICY AND MARKE DEVELOPEMENTS. B. Beelner, AGM of Finance and Administration, led a discussion on the American Public Power Association's (APPA) publication entitled "Distributed Generation — An Overview of Recent Policy and Market Developments." In this discussion, he highlighted several issues and challenges that many utilities across the country are facing, and that Anaheim will similarly face with increasing distributed generation within its service territory. The Board, D. Lee, and B. Beelner discussed potential impacts to Utility revenue, potential customer rate impacts, and potential electric distribution impacts. Since less than 1% of all current Anaheim load is served through distributed generation, the current impact to Anaheim are minimal; however, the risks still exist, which is why these discussions are being brought forward at this time. Board members expressed that this issue is significant and needs to be closely monitored, and D. Lee explained that because there are many different strategies being employed by utilities, it would be worthwhile to see the impacts on other utilities. B. Beelner confirmed that staff would continue to monitor the situation and periodically report back to the Board with updates. 6. FIND THAT MODIFICATIONS TO RULE NOS. 1, 9,11, 17 C. Monaco Moved Approval: AND 19 OF ELECTRIC RATES, RULES AND REGULATIONS 1) to Find that Modifications AND RULE NOS. 1, 9, 11, 17, AND 24 OF THE WATER RATES, to Rules Nos. 1, 9, 11, 17, RULES AND REGULATIONS ARE EXEMPT UNDER THE and 19 of Electric Rates, CALIFORNIA ENVIRONMENTAL QUALITY ACT, SECTION Rules, and Regulations and 15061 (B)(3) OF TITLE 14 OF THE CALIFORNIA Rule Nos. 1, 9, 11, 17, and ADMINISTRATIVE CODE; APPROVAL OF 24 of the Water Rates, Rules MODIFICATIONS TO ELECTRICRATES, RULES, AND and Regulations are exempt REGULATIONS 1, 9,11, 17 AND 19 AND WATER RATES, under the California RULESAND REGULATIONS 1, 9, 11,17 AND 24. * Environmental Quality Act, 2013-73 AGENDA ITEM D. Lee, General Manager, shared the basic elements of this item, explaining it is part of the Department's continuing efforts to provide regulatory relief to utility customers under specific circumstances and to clarify and update rule language. The Board asked a variety of questions which resulted in their decision to support the California Environmental Quality Act (CEQA) finding and approval of the modifications to the Electric and Water Rates, Rules and Regulations. 7. APPOINTMENT OF MEMBER OF THE LEGISLATIVE WORKING GROUP. Chairperson J. Machiaverna appointed Board Member C. Monaco to the Public Utility Board Legislative Working Group. He indicated that J. Lehman, Chief Risk Officer, is the liaison and provides meeting information for the group which now consists of D. Singer, C. Monaco, and himself. S. UPDATE ON WATER SYSTEM ISSUES. D. Calkins, AGM of Water Services, explained to the Board that the presentation on the Bay Delta Conservation Plan (BDCP) by the Metropolitan Water District (MWD) tentatively scheduled for this meeting date had to be postponed to the January meeting due to conflicts with executive MWD staff. The draft BDCP and associated Environmental Impact Report (EIR) were released last week, and water agencies and the public have until April 2014 to provide written comments. D. Calkins invited the Board's attention to MWD's 2014 calendar featuring student posters on water conservation. The artwork is selected from the winners of the local poster contests that were conducted in May as part of Water Awareness Month. The month of January includes artwork by an Anaheim student; Courtney Bui who is a 2nd grader at Fairmont School. D. Calkins exhibited an award recently received for the Anaheim Public Utilities Water Recycling Demonstration Project (Project). The Project won an award from the Engineering News Record (EN R) at their "Best Projects of 2013" award event in Long Beach. This year, over 100 applications were submitted for projects located throughout California and Hawaii. The Project won the Merit Award in the Water /Environment category. D. Calkins thanked A. Shaikh, B. Moorhead, and all of the Engineering staff who worked so hard on this Project. ACTION TAKEN Section 15061 (b) (3) of Title 14 of the California Administrative Code, and 2) of Modifications to Electric Rates, Rules and Regulations 1, 9, 11, 17, and 24 and Rule Nos. 1,9,11,17, and 24 of the Water Rates, Rules and Regulations. D. Singer seconded the motion. MOTION CARRIED: 7 -0. ABSTAINED: 0. ABSENT: 0. 2013 74 AGENDA ITEM D. Calkins updated the Board on Poseidon's proposed Seawater Desalination Plant (Plant) in Huntington Beach. As mentioned last month, the Coastal Commission postponed a decision on the final permit for the project so the final decision is now likely to be made later next year. The Orange County Water District (OCWD) is looking further at the feasibility of purchasing all of the output of the Plant and are preparing a white paper on this alternative, which will be released to the MWD board the first week or so of January. OCWD is looking at the option of purchasing the entire Plant output and spreading the cost to all agencies that pump groundwater. With that option, the preliminary estimate is that the cost to pump groundwater could go up $4 to $5 million per year, or about 40 %. Anaheim Public Utilities staff is reviewing alternative approaches to such that each city or retail district in Orange County would have more direct control over quantities from the project. As soon as OCWD's white paper is released, staff will work with the other Groundwater Producing agencies to analyze it to see if there would be a benefit to those communities for OCWD to take a lead role in purchasing output from the Plant. 9. UPDATE ON ELECTRIC SYSTEM ISSUES. M. Robledo, Acting AGM of Electric Services, reported that the electric system was functioning very well, and he provided a summary of Canyon Power Plant (CPP) activities. CPP has produced approximately 200 Gigawatt-hours of energy over the last two years, and it is a vital part of Anaheim's power resource portfolio. In addition to the energy, CPP also provides reserve capacity and flexibility to quickly respond to weather fluctuations affecting the output of renewable resources. M. Robledo also reported that there is an expectancy that the California Independent System Operator (CAISO) will call on CPP more in 2015 so Anaheim is applying for a modification to its air emissions permit to allow up to 320 hours per month of operation in response to this likely increased demand. 10. UPDATE ON FINANCE ISSUES. E. Zacherl, AGM of Finance and Administrative Services, 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 November, and continue to both be attributable to the warmer than normal weather for much of that period. Year -to -Date electric revenues of $184.5 million were $8.6 million or 4.9% over budget. Electric expenses for that period of $172.6 million were $4.7 million over budget or 2.8 %. Power costs exceeded budget by $4.7 million due to increased demand and were partially offset by lower expenses in labor, operating and debt. Electric retail revenues for the month of November of $21.6 million were under budget by $3.4 million or 13.7 %. In addition, combined transmission, gas and wholesale revenues were $14.5 million. E. Zacherl also reported to the Board that the Year -to -Date water revenues through November were $30.7 million, $1.8 million or 6.2% ACTION TAKEN 2013-75 AGENDA ITEM over budget. Year -to -Date water expenses through November of $22.7 million were $1.4 million or 5.9% under budget primarily due to a greater portion of the water supply being supplied by pumped ground water. This favorable variance will decline in the future as the mix of pumped to purchased water is adjusted to conform to APU's Basin Pumping Percentage of 70 %. Water revenues for the month of November of $5.2 million were over budget by 10.9% due to continued dry weather conditions. C. Monaco requested that financial reserve information be included in the future. Finally, E. Zacherl reported that the City Audit Committee met on December 17th and formally accepted the completed annual audit of the City's financial statements as well as the stand -alone financial statements for the Water and Electric Utilities. The auditors issued a non - qualified opinion with no significant findings. The reports will be distributed to the Board at the January 2014 meeting and will be posted on the City's website. 11. UPDATE ON JOINT SERVICES ISSUES. S. Sciortino, AGM of Joint Services, provided a brief summary of the activities surrounding the San Onofre Nuclear Generation Station decommissioning requirements among the co- participants, Southern California Edison (SCE), San Diego Gas & Electric (SDG &E) and the City of Riverside. While Anaheim exited its ownership share at the end of 2006, it retained its decommissioning liability during the years it received output from the facility. S. Sciortino described the ongoing activities concerning the proposed decommissioning agreement, which is intended to provide governance for actions required for the actual decommissioning work and costs to be prorated to the co- participants including Anaheim. The co- participants have been actively negotiating the terms and conditions of the proposed agreement, which should be brought to the Board sometime in the spring. In the meantime, SCE has begun some of the preliminary work to develop the decommissioning cost estimate and overall plan to submit to the Nuclear Regulatory Commission (NRC) around the same time frame. S. Sciortino stated that APU is still fully funded so it is not anticipated that additional funds will need to be added to the Escrow Trust account for decommissioning activities. A Board member asked how much money has been saved since exiting the facility, and S. Sciortino estimated that APU has saved $24 million in the steam generator replacement costs, an additional $120 million in operating expenses since 2006, plus the previously estimated reduction in decommissioning costs. 12. UPDATE ON ENERGY RISK & LEGISLATIVE / REGULATORY AFFAIRS ISSUES. J. Lehman, Chief Risk Officer, provided a brief update this month, reporting that the Public Utilities Board Legislative Working Group had met just prior to the Board meeting and reviewed the preparations for the 2014 legislative year including the issues that are likely to arise during the session. ACTION TAKEN Staff will provide financial reserve information. 2013 76 AGENDA ITEM In addition, she indicated the compliance and risk areas were going well, and that she would provide the fourth quarter Compliance Report next month. 13. AGENDA ITEM(S) FOR THE NEXT PUBLIC UTILITIES BOARD MEETING ON JANUARY 29, 2014. • Bay Delta Conservation Plan Presentation • Cyber Security Presentation • Construction Status Update on Linda Vista Reservoir & Pump Station Project • Second Amendatory Intermountain Power Authority Power Sale Agreement* 14. ITEM(S) BY SECRETARY. D. Lee invited the Board to the State of the City luncheon that will be held on January 28, 2014, at the City National Grove of Anaheim. 15. ITEM(S) BY BOARD MEMBERS. D. Singer thanked E. Zacherl for his service to Anaheim Public Utilities and the Board and welcomed all new staff. D. Wain thanked staff for their efforts through the years, sharing that it's reassuring that the City is in such great hands. He wished staff a Happy Holidays and thanked E. Zacherl for his work and congratulated him on his retirement. C. Monaco echoed D. Wain's comments and wished staff a Happy Holidays. S. E. Faessel shared that she appreciates the expertise and experience that staff has as well as the forethought put into problem solving. She wished staff a Happy Holidays. B. Hernandez shared a story of working with E. Zacherl for the first time in 1993 during the Santiago landslide; he shared that E. Zacherl made it easy to understand all the financial forms needed in their work. He thanked E. Zacherl for his partnership and shared that he will be missed. J. Machiaverna told E. Zacherl he will be missed, but he will continue to see him at the Boys and Girls Club. He welcomed B. Beelner as the new AGM of Finance and Administration Services. He also shared that B. Hernandez's story shows the people in the community care, continuing that he is proud to be a member of the Board, and he knows that staff take their jobs seriously and work hard for the betterment of the community. ACTION TAKEN 2013-77 AGENDA ITEM 16. ADJOURNMENT: (TO THE REGULAR MEETING ON JANUARY 29, 2014, AT 5:00 P.M., IN THE 11 FLOOR LARGE CONFERENCE ROOM, ANAHEIM WEST TOWER, 201 S. ANAHEIM BOULEVARD, ANAHEIM, CALIFORNIA). Respectfully sub itted, Dukku Lee Secretary, Public Utilities Board ACTION TAKEN B. Hernandez moved to adjourn the Regular Meeting at 6:25 p.m. to the Board's next Regular Meeting date of January 29, 2014 at 5:00 p.m. S.E. Faessel seconded the motion. MOTION CARRIED: 7 -0. ABSTAINED: 0. ABSENT: 0. * 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.