Public Utilities 2014/06/25CITY OF ANAHEIM
PUBLIC UTILITIES BOARD
MINUTES
June 2S, 2014
The agenda having been posted on Thursday, June 19, 2014, the Regular Meeting of the Public Utilities
Board (Board) was called to order by Chairperson John Machiaverna at 5:01 p.m. on Wednesday, June 25,
2014, in the I I th Floor Large Conference Room, Anaheim West Tower, 201 S. Anaheim Blvd., Anaheim,
California.
Board Members Present: Chair J. Machiaverna, Vice Chair D. Singer, B. Hernandez, S.E. Faessel,
D.Wain, L. Cahill
Board Members Absent: C. Monaco
Staff Present: D. Lee, B. Beelner, S. Sciortino, D. Calkins, J. Lonneker, R. Shintaku, A.
Kott, D. Wilson, L. Quiambao, P. Oviedo, M. DeSollar, F. Barvarz, J. Coe,
J. McBride, M. Brownrigg, C. Thompson, G. Bowen, P. Hayes, D. Payne
Guest(s) Present: Brett Schumm, Anaheim High School Team Advisor; Daisy Magana,
Anaheim High School Student; Anibal Ortuno, Anaheim High School Student
CIay Elliot, Savanna High School Team Advisor; Raymond Loera, Savanna
High School Student; Martin Morillon, Savanna High School Student; Martin
Nguyen, Savanna High School Student; Andy Gonzalez, Savanna High School
Student; Jim Donovan, Canyon High School Team Advisor; Tony Blakemore,
Canyon High School Staff; Nigel Smith, Canyon High School Student;
Maggie Donovan, Canyon High School Student; Grae Lessley, Canyon High
School Student; Ryan Majdali, Canyon High School Student
AGENDA ITEM ACTION TAKEN
1. PUBLIC COMMENTS. There being no public
comments, Chairman J.
None. Machiaverna closed the
public comments portion of
the meeting.
2. APPROVAL OF THE MINUTES OF THE REGULAR PUBLIC B. Hernandez moved
UTILITIES BOARD MEETING OF MAY 28, 2014. * approval of the Minutes of
the Regular Public Utilities
Board Meeting of May 28,
2014. D. Singer seconded
the motion.
MOTION CARRIED: 5 -0.
ABSTAINED: 1(L. Cahill),
ABSENT: 1 (C. Monaco).
3. PRESENTATION ON SOLAR CUP 2014 PARTICIPANTS.
Students from Anaheim High School, Canyon High School, and
Savanna High School were recognized for their accomplishments in
the 2014 Solar Cup event.
2014-35
AGENDA ITEM
4. PRESENTATION ON ELECTRIC SYSTEM SUMMER
READINESS.
C. Thompson, Principal Integrated Resource Planner, gave a
presentation on Anaheim Public Utilities (Department) Summer
Readiness. The presentation gave an overview of the State's and
Department's preparedness for handling extremely hot weather and
other factors that could threaten the reliability of the electric grid this
summer season.
Board members asked a variety of questions regarding conservation,
emergency generators, and fire impacts. Staff responded to these
questions and explained that water pumps are equipped with backup
generators should a fire or other event cause a power outage. These
generators could also be used to shed load during a grid event.
5. APPROVAL OF A RESOLUTION DETERMINING THAT
PERMITTING ELIGIBLE CUSTOMER - GENERATORS TO
AGGREGATE THEIR LOAD FROM MULTIPLE METERS
WILL RESULT IN AN INCREASE TO EXPECTED REVENUE
OBLIGATIONS OF CUSTOMERS THAT ARE NOT
ELIGIBLE CUSTOMER - GENERATORS. *
B. Beelner, AGM of Finance and Administration, presented
information seeking the Board's recommendation that the City
Council disallow net metering aggregation for customers with
multiple meters on adjacent, contiguous properties in accordance with
Senate Bill 594 (SB 594). SB 594 allows regulatory bodies to
disallow meter aggregation for net metering customers if there is a
disparate rate impact on customers that are not eligible for the benefit.
The staff report mentions the potential rate impacts that would occur
if customers were allowed to build solar capacity on the roof of one
building that was in excess of that building's needs in order to offset
the energy usage of nearby buildings owned and operated by the same
customer. In the example provided by staff, a customer with five
buildings could build a solar array large enough to cause the
Department's revenue obligation to increase by almost $100,000 per
year which would in turn cause rates to necessarily rise for the
customers that were not able to take advantage of the law.
The Board inquired about the potential customer impacts, both pros
and cons to this recommendation. Staff explained that only customers
in limited instance with adjacent parcels would be able to participate,
but others would be excluded if SB 594were allowed. Several Board
members expressed that Anaheim is business friendly and wanted to
understand if this would limit their ability to take advantage of solar.
Staff responded that businesses would still be able to net meter
individual buildings, or could make the investment to combine their
infrastructure to receive a single point of service. Staff informed the
Board that there would likely be rate impacts to other customer as
result of SB 594, if allowed.
ACTION TAKEN
L. Cahill moved approval of
a Resolution determining that
permitting eligible
Customer- Generators to
aggregate their load from
multiple meters will result in
an increase to expected
revenue obligations of
customer's that are not
eligible Customer -
Generators. S.E. Faessel
seconded the motion.
MOTION CARRIED: 6 -0.
ABSTAINED: 0.
ABSENT: I (C. Monaco).
2014-36
AGENDA ITEM
6. APPROVAL OF THE ISSUANCE OF NOT TO EXCEED
$140,000,000 AGGREGATE PRINCIPAL AMOUNT OF
CALIFORNIA MUNICIPAL FINANCE AUTHORITY
REVENUE REFUNDING BONDS, SERIES 2014 -A, ELECTRIC
DISTRIBUTION SYSTEM REFUNDING. *
B. Beelner, AGM of Finance and Administration, shared information
about the benefits to refund the currently outstanding 2003A and 2004
bonds in order to take advantage of much lower interest rates and to
shorten the length of the debt. He discussed that this refinancing of
the existing debt will save rate payers approximately $42 million if
interest rates remain stable, and will shorten the length of the debt by
approximately eight years.
7. APPROVAL OF THE MAGNOLIA POWER PROJECT
GREENHOUSE GAS COMPLIANCE INSTRUMENT
AGREEMET AMONG SOUTHERN CALIFORNA PUBLIC
POWER AUTHORITY (SCPPA), AND THE CITIES OF
ANAHEIM, BURBANK, CERRITOS, COLTON, GLENDALE,
AND PASADENA. *
S. Sciortino, AGM of Joint Services, explained the purpose of the
agreement is to formalize a process to provide the City of Burbank
(Burbank) with Greenhouse Gas (GHG) allowances that cover the
emissions at Magnolia Power Plant as a result of each co- owner's
energy production from the Magnolia Facility. As the operating agent
of the Facility, Burbank is required to provide GHG emissions
compliance instruments as a result of the Facility's total output, which
is the sum of each of the co- owner's energy received from the
Facility. Since the existing Power Sale Agreement among the co-
owners was established eight years prior to Assembly Bill (AB) 32
regulations of GHG emissions, a new agreement is needed to set the
parameters for how the co- owners would assign their respective GHG
allowances to Burbank to cover their share of the compliance
instruments needed to operate the Facility. The agreement identifies
the timing of the GHG compliance instrument assignments as well as
a procedure to cover any late assignments or defaults.
8. DISCUSSION ON THE ORANGE COUNTY GRAND JURY
REPORT: "SUSTAINABLE AND RELIABLE ORANGE
COUNTY WATER SUPPLY: ANOTHER ENDANGERED
SPECIES?"
D. Calkins, AGM of Water Services, provided an overview of the
information in the agenda package on the recent Orange County
Grand Jury Report on the County's Water Supply. This Report is
directed at the Municipal Water District of Orange County
(MWDOC) and the Orange County Water District (OCWD), which
need to respond to the findings and recommendations. Anaheim does
not need to respond. Overall, the Report concludes that the County's
water supply is more reliable due to recent water agency efforts and
projects, such as greater capture and recharge of groundwater, and
water recycling. However, they also conclude that supplies remain
vulnerable due to the potential for earthquakes or flooding in the
Sacramento Bay Delta and prolonged drought. As a result, they
ACTION TAKEN
B. Hernandez moved
approval of the issuance of
not to exceed $140,000,000
Aggregate Principal Amount
of California Municipal
Finance Authority Revenue
Refunding Bonds, Series
2014 -A, Electric Distribution
System Refunding. S.E.
Faessel seconded the motion.
MOTION CARRIED: 6-0.
ABSTAINED: 0.
ABSENT: 1 (C. Monaco).
B. Hernandez moved
approval of the Magnolia
Power Project Greenhouse
Gas Compliance Instrument
Agreement among Sothem
California Public Power
Authority (SCPPA), and the
cities of Anaheim, Burbank,
Cerritos, Colton, Glendale,
and Pasadena. D. Wain
seconded the motion.
MOTION CARRIED: 6 -0.
ABSTAINED: 0.
ABSENT: 1 (C. Monaco).
2014-37
AGENDA ITEM
recommend developing new water sources for the County, such as
proposed seawater desalination projects in Huntington Beach and
Dana Point. For the proposed Huntington Beach plant, Poseidon is
currently working with the Coastal Commission to analyze a sub-
surface alternative for the intake and outfall. They expect to return to
the Coastal Commission for the final project permit late this year or
early 2015. Staff will continue to monitor developments and update
the Board as appropriate.
Board members asked questions about the article and the associated
water agencies. Staff responded to the Board's questions.
9. UPDATE ON WATER SYSTEM ISSUES.
D. Calkins, AGM of Water Services, reviewed a recent City Council
staff report and resolution of support for the Bay Delta Conservation
Plan (BDCP), which was approved at the June 17` Council meeting.
Normally, staff would bring an item like this to the Board for
consideration before taking it to City Council, but it was requested the
prior week for City Council consideration at the June 17` meeting.
The Department recommended support of the BDCP and the State's
preferred alternative because the proposed tunnel conveyance system
would isolate and protect drinking water supplies and help restore
natural flow patterns in the Delta, and the project includes
significantly improvement to habitat to restore fisheries and wildlife
throughout the Delta.
D. Calkins shared with the Board that Water Utility staff has been
doing research to find an anti - graffiti coating that would be suitable
for metal fire hydrants because they are often targets for graffiti. Staff
found a transparent anti - graffiti coating that was recently piloted on
fire hydrants along the west side of Anaheim Boulevard, from Ball
Road to Lincoln Avenue. Given the success of piloting this product,
staff is now working with Superior (the City's graffiti abatement
contractor) to expand the program to other hydrants where prone to
graffiti. Also, Electric will be trying this product on electric cabinets
where artificial ivy may not be suitable.
10. UPDATE ON ELECTRIC SYSTEM ISSUES.
J. Lonneker, AGM of Electric Services, shared that the Department
routinely performs visual inspections and maintenance of the electric
system including 17,000+ poles and 16,000+ transformers and
switches and 13 substations. Visual inspection of 100% of the electric
system is performed on a three year cycle by the Utility. A more
detailed core testing of the wood poles is performed every 20 years,
which the Department completed 10 years ago. The findings are
classified into three levels with Level 1 corrections requiring repair
and Levels 2 and 3 being monitored.
Although the California Public Utilities Commission (CPUC) does
not have jurisdiction over Anaheim, the Department allows their
auditor to perform an audit of the electric system because the
Department references CPUC guidelines as best industry practices.
The last CPUC audit occurred in August, 2012, where 26 minor
ACTION TAKEN
2014-38
AGENDA ITEM
violations were identified and all corrections were made by the end of
that year. In the later part of 2014, the Department plans to start a
new cycle of system -wide inspections.
J. Lonneker shared information concerning a lineman who was
injured while performing work in a bucket truck. His injuries were
not the result of an electrocution, and the other crew member was not
injured. He was released from the hospital the next day.
11. UPDATE ON FINANCE ISSUES.
B. Beelner, AGM of Finance and Administration, discussed Southern
California Edison's (SCE) recent rate increase of 9.6% and the impact
that it will have on average residential customers in SCE's service
territory.
B. Beelner went over the monthly dashboard which showed revenue
for both water and electric continuing to trend above budget primarily
due to a the warm and dry winter coupled with lower than budgeted
levels for controllable costs, such as labor and other operational costs.
12. UPDATE ON JOINT SERVICES ISSUES.
S. Sciortino, AGM of Joint Services, provided a brief status of the San
Onofre Nuclear Generating Station (SONGS) Decommissioning
Agreement. Negotiations concerning the contract terms among the
four participants are expected to conclude in the next several months.
Southern California Edison (SCE) has also estimated the
Decommissioning Cost Estimate to be at $4.2 billion with Anaheim's
share to be approximately $105 million. S. Sciortino reminded the
Board that the Department has approximately $130 million in the
SONGS Decommissioning Trust to pay for decommissioning costs of
the project.
S. Sciortino stated that staff would bring forward one of several
contractual pieces to facilitate Anaheim's divestiture from its
participation in the San Juan facility next month.
S. Sciortino announced that the solar panel installation project on the
Convention Center roof is nearing completion. The 2.3 megawatt
(MW) project will be in operation in August. There will be a ribbon
cutting ceremony planned.
Finally, S. Sciortino reported on the conversion from the old to the
new Customer Information System (CIS) that went live on Monday,
June 23` This is the culmination of 3 years of planning, installation,
testing, and training. S. Sciortino recognized the Customer Service
staff who have been instrumental in achieving this milestone. A
billing issue did occur, as the on -line vendor posted a double payment
on over 700 customers. Staff worked to notify customers of this issue
and provided a $10 courtesy credit to those affected. Also, the on -line
vendor agreed to reimburse the Department for any insufficient fund
fees applied by customers' banks.
ACTION TAKEN
2014 - 39
AGENDA ITEM
13. UPDATE ON ENTERPRISE RISK & LEGISLATIVE
REGULATORY AFFAIRS ISSUES.
D. Wilson, Acting Chief Risk Officer, reported that Compliance
Report will be provided at July's PUB meeting, and that the PUB
Legislative Working Group will meet in July.
14. AGENDA ITEM(S) FOR THE NEXT PUBLIC UTILITIES
BOARD MEETING ON JULY 23, 2014.
• Election of New PUB Officers *
• Energy Storage *
• Electrical Capital Letter of Credit (LOC) Draw
• Annual Write off of Uncollectible Utility Accounts
• San Juan fuel and capital Agreement *
• CEC Retail Provider's Report (AB 162)
15. ITEMS) BY SECRETARY.
D. Lee, Public Utilities General Manager, shared the Department's
budget was approved by the City Council on June 17, 2014.
D. Lee mentioned the Department's electrical staff would provide free
bucket truck rides to the community at the July 4' event at Peralta
Park.
Lastly he mentioned that M. DeSollar who had been splitting her time
between Public Utilities and the Fire Department will move full time
to the Fire Department in July. He presented her with a gift of
appreciation for her work with the Department.
M. DeSollar thanked the Board and staff for the opportunity to work
for the Public Utilities Department.
16. ITEM(S) BY BOARD MEMBERS.
D. Wain shared that he attended the Anaheim Beautiful awards
ceremony honoring S.E. Faessel and that she gave a nice acceptance
speech. He also congratulated staff on the successful launch of the
CIS project.
S.E. Faessel thanked staff for continuing to develop programs and
recommendations for the benefit of Anaheim residents and
businesses. She also thanked M. DeSollar for her contribution to the
Department.
L. Cahill shared that he enjoyed the meeting and complimented B.
Beelner on saving the Department $40 M in bond funds.
B. Hernandez announced he was re- appointed by City Council and
will serve another 4 years. He commented on the SB 594 discussion,
and looks forward to it passing when presented to City Council. He
also congratulated M. DeSollar.
ACTION TAKEN
2014-40
AGENDA ITEM ACTION TAKEN
D. Singer said that she is impressed with the Department's innovation
and progressiveness.
J. Machiaverna commented that the net metering aggregation is a
sensitive issue to the business community and will be in front of the
Board for some time, and commented that the Department will have
to look out for the customers first. He congratulated L. Cahill and B.
Hernandez on their reappointment and congratulated M. DeSollar on
her new position. He also thanked staff for doing a great job in
serving the Anaheim community.
17. ADJOURNMENT: (TO THE REGULAR MEETING ON JULY
S.E. FaesseI moved to
23, 2014, AT 5:00 P.M., IN THE 11 FLOOR LARGE
adjourn the Regular Meeting
CONFERENCE ROOM, ANAHEIM WEST TOWER, 201 S.
at 7:06 p.m. to the Board's
ANAHEIM BOULEVARD, ANAHEIM, CALIFORNIA).
next Regular Meeting date of
July 23, 2014 at 5:00 p.m.
D. Singer seconded the
motion.
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.
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