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Public Utilities 2014/12/17CITY OF ANAHEIM PUBLIC UTILITIES BOARD MINUTES December 17, 2014 The agenda having been posted on Wednesday, December 10, 2014, the Regular Meeting of the Public Utilities Board (Board) was called to order by Chair J. Machiaverna at 5:00 p.m. on Wednesday, December 17, 2014, in the I 1`" 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, C. Monaco, L. Cahill Board Members Absent: None. Staff Present: D. Lee, B. Beelner, S. Sciortino, D. Calkins, J. Lonneker, J. Lehman, A. Kott, L. Quiambao, P. Oviedo, J. McBride, M. Moore, M. Seifen Guest(s) Present: Steven Faessel, Resident AGENDA ITEM ACTION TAKEN 1. PUBLIC COMMENTS. There being no public comments, Chair 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 NOVEMBER 19, 2014. * approval of the Minutes of the Regular Public Utilities Board Meeting of November 19, 2014. S.E. Faessel seconded the motion. MOTION CARRIED: 5-0. ABSTAINED:1 (L. Cahill). ABSENT: 1 (D. Singer — arrived at the meeting at 5:11 p.m.). D. Calkins, Assistant General Manager (AGM) of Water Services, introduced Michael Moore as Anaheim's new Water Engineering Manager. M. Moore started last week, and comes to Anaheim from MWH Consulting Engineers, where he served as the Orange County Manager responsible for their Irvine office. He has worked for water agencies and private consulting firms, and has over 20 years of experience in the water industry. M. Moore will work with R. Shintaku and D. Shen, and manage all of the Department's Water 2014-79 AGENDA ITEM Engineering work, staying abreast of key issues with Anaheim's water wholesalers to ensure supply reliability, and overseeing the Department's capital program to ensure continued progress with cost - effectively upgrading the water system's aging infrastructure. 3, WORKSHOP ON PUBLIC UTILITIES ELECTRIC AND WATER RATES. B. Beelner, AGM of Finance & Administrative Services, conducted a workshop discussing water and electric utility rate structures, rate change processes, and upcoming rate change requests with the Board. During the workshop, the Board and B. Beelner discussed, in specifics, the upcoming rate hearing, the process associated with the hearing, how increasing costs imposed by water wholesalers affect customer bills and how the need for continued investment in infrastructure affects customer bills. The combined effect of these cost increases will result in an approximate 10% increase to customer water bills over a two year period. The average residential customer consuming 15,000 gallons a month will see an approximately $4.80 increase to their bills over the next two years. B. Beelner also discussed Measure N's failure and how that action by the electorate reduced the proposed rate change from what would have been an approximate 14% increase to the proposed 10% increase. He discussed that, even with the proposed 10% increase, Anaheim's water customers have the 6th lowest water bills out of 30 Orange County water agencies. B. Beelner then moved the discussion to electric rates where topics in this discussion included: how electric rates are structured, what rates pay for what service, how the cost is relative to the service provided determines electric rates, why some businesses pay rates are different than other businesses, and why businesses pay rates are different than residences. He discussed how efficient commercial customers save the Department money and correspondingly save money on their electric bill. B. Beelner then discussed future electric rate proposals, which will include a re- structuring of electric rates with minimal to no impact to customers, extending a 10% electric discount to include low income qualified military veterans and phasing out the current discount to those residential customers with electric water heaters. The Board asked specific questions about the Department's infrastructure needs and how those needs translate to rates, drought response, impacts of Measure N not passing, and messaging these rate actions to the public and affected customers. At the request of the Board, staff will modify the scheduling of future public hearings to follow a Board discussion in which staff will provide information on potential rate modifications. 4. UPDATE ON REGULATORY RELIEF PLAN. M. Seifen, Utilities Communications Supervisor, shared an overview of the Department's Regulatory Relief (Phase 2) efforts from the last six months with the Board. The Mayor's Regulatory Relief Task Force ACTION TAKEN 2014-80 AGENDA ITEM ACTION TAKEN was established in 2011 to help streamline City processes and help foster more freedom for Anaheim's business community and is comprised of representatives from a number of Anaheim businesses as well as staff from the City and Anaheim Chamber of Commerce. An overview of improvements and rule modifications made from the Phase 1 recommendations were given, including: accelerated plan checks; making courtesy calls to our customers who normally pay on time to avoid disconnections; the development of the Department's Home Direct Buried Cable Replacement Program; and waiving fees as well as providing courtesy credits and deposit flexibility for extenuating circumstances. Phase 2 improvements include: assigning a Business Solution Specialist to assist developers with utility service establishment; working closely with Anaheim schools to determine optimal rebates for energy efficiency improvement projects; and streamlined energy efficiency assistance to businesses through our Small Business Energy Management Program. Staff provided an overview of rule modifications for the installation of temporary electric and water service (Rule No. 13) as well as quality of service improvements (Rule No. 14). These rule modifications are proposed to improve service reliability and to assist developers with assurance of temporary service during construction. 5. PUBLIC HEARING: DETERMINE THAT THE Vice Chair D. Singer MODIFICATIONS TO RULE NOS. 13 AND 14 CONTAINED IN opened the Public Hearing THE ELECTRIC AND WATER RATES, RULES AND for Item 5 concerning REGULATIONS ARE EXEMPT UNDER THE CALIFORNIA Modifications to Rule ENVIRONMENTAL QUALITY ACT, SECTION 15061 (b)(3) OF Numbers 13 and 14 of the TITLE 14 OF THE CALIFORNIA ADMINISTRATIVE CODE; Water and Electric Rates, AND APPROVAL OF MODIFICATIONS TO RULE NOS. 13 Rules and Regulations. (TEMPORARY SERVICE) AND 14 (CONTINUITY AND Following the presentation QUALITY OF SERVICE) OF THE ELECTRIC AND WATER by staff and comments by RATES, RULES AND REGULATIONS. the Board and Public, the Vice Chair closed the public D. Lee, Public Utilities General Manager, presented the information hearing. concerning this item and requested questions from the Board for staff as it pertains to this item. C. Monaco moved that the Board determine that the C. Monaco recognized the Department's efforts to better serve Modifications to Rule Nos. customers by proactively improving these rules. 13 and 14 Contained in the Electric and Water Rates, S. Faessel, member of the public, shared that during his time on the Rules and Regulations are Planning Commission, Regulatory Relief items were embraced fully Exempt Under the and be encouraged the Public Utilities Board to support this and similar California Environmental efforts. Quality Act, Section 15061 (b) (3) of Title 14 of the California Administrative Code; and Approval of Modifications to Rule Nos. 13 (Temporary Service) of the Electric and Water Rates, Rules and Regulations. * 2014-81 AGENDA ITEM 6. APPROVAL OF THE RENEWABLE PORTFOLIO STANDARD POLICY, 2015 UPDATE. * S. Sciortino, AGM of Joint Services, shared information about the 2015 update to the Renewable Portfolio Standard (RPS) Policy, which complies with state mandates to receive 33% of power supplies from renewable resources by 2020. He summarized the targets for the first Compliance Period established by legislation, which have been met, and indicated that future targets are expected to be met. He shared the updates to the RPS Policy, including the commercial operation dates set forth in the attachment to the staff report and outlined the approach to meeting future targets. C. Monaco shared that the 2015 Update to the Anaheim RPS Policy provides useful information of the Department's resource plans to meet the targeted goals. 7. UPDATE ON WATER SYSTEM ISSUES. D. Calkins, AGM of Water Services, updated the Board on the recent weather. Locally, there has been 4.8 inches of rain so far this winter, which is 176% of normal for this time of year. Northern California has received 20.1 inches of precipitation, which is 144% of normal year -to- date, but the State Water Project reservoirs are only at about 30% of capacity. The Colorado River basin has been drier, receiving only 77% of normal precipitation for this time of year. Colorado River reservoir levels are at about 50% of capacity. While this has been a good start to the winter, California's weather is difficult to predict. In order to end the current drought, it would probably take six to eight more storms like the recent ones. Regarding the Ball Road Basin property, which is located next to the Anaheim Auto Center, and owned by the Orange County Water District (QCWD), D. Calkins advised the Board that the company that had planned to build a power plant there, Competitive Power Ventures (CPV), has not exercised their option with OCWD for a long -term property lease. OC WD has not yet decided if they will resume their previous effort to change its zoning from Open Space to Commercial. D. Calkins invited the Board's attention to a draft itinerary of a Metropolitan Water District (MWD) Inspection Trip of the Colorado River Aqueduct, which is scheduled for the last weekend in May, 2015. D. Calkins also invited the Board's attention to the new MWD "Water is Life" calendar for 2015. As in past years, the calendar features art ACTION TAKEN B. Hernandez seconded the motion. MOTION CARRIED: 6-0. ABSTAINED: 0. ABSENT: 1 (J. Machiaverna -- left meeting at 6 :18p.m.). C. Monaco moved approval of the Renewable Portfolio Standard Policy, 2015 Update. B. Hernandez seconded the motion. MOTION CARRIED: 6 -0. ABSTAINED: 0. ABSENT: 1 (J. Machiaverna). 2014 82 AGENDA ITEM posters about water conservation from students throughout MWD's six -county service area. The cover for the calendar and the month of October showcase artwork by an Anaheim student, Sarah Carvajal, who is a 4th Grader at Acaciawood School. 8. UPDATE ON ELECTRIC SYSTEM ISSUES. J. Lonneker, AGM of Electric Services, shared with the Board the overall performance of the electric system through the rain storms in December. The electric system performed well, with less than 0.1% of the electric system affected by outages. Compared to other utilities, Southern California Edison (SCE) experienced outages to 44,000 customers representing and Los Angeles Department of Water and Power (LADWP) had 12,000 customers out, which is about 1% of each of their respective systems. Customers provided appreciative feedback about electric stafPs efforts to quickly restore service through social media channels and the call center. J. Lonneker shared information on the City of Detroit's system -wide power outage that occurred in late November. This incidence provides an opportunity to assess the causes leading to the outage, and adapt those lessons learned to proactively improve reliability when warranted. The Detroit system -wide outage, which lasted six hours, was caused by multiple events, including a major cable fault and a non- operational substation circuit breaker. Deferred infrastructure maintenance and replacement as a result of the economic hardships of Detroit exposed the electric system to weakened reliability. J. Lonneker reiterated that Anaheim remains proactive with infrastructure upgrades, such as the replacement of the Lewis 220kV substation circuit breakers, which was completed this year to replace equipment that was nearing the end of their useful life. J. Lonneker shared with the Board that the Department will air a video regarding safe and proper handling of metallic balloons to increase awareness and provide a reminder throughout the community of the proper disposal when the balloons are no longer in use. The video will air on several cable channels, You Tube, and the Anaheim Public Utilities website. 9. UPDATE ON FINANCE ISSUES. No Updates, 10. UPDATE ON JOINT SERVICES ISSUES. S. Sciortino, AGM of Joint Services, shared that the San Onofre Nuclear Generating Station (SONGS) decommissioning agreement is expected to be completed in early 2015. He also shared his appreciation of the Public Utilities Board members' input and impact on agenda items that staff presents during the Board meetings. ACTION TAKEN 2014 83 AGENDA ITEM 11. UPDATE ON ENTERPRISE RISK, COMPLIANCE, AND LEGISLATIVE & REGULATORY AFFAIRS ISSUES. J. Lehman, Chief Risk Officer, provided an update on the Wholesale Energy Risk Management (ERM) Program's Quarterly Compliance report. The ERM sets criteria under which certain energy related transactions can be made, providing the framework for transactions to be made in an efficient manner while ensuring that the Department's interests are protected and risks are identified and appropriately managed. J. Lehman reported that all transactions were in compliance with the ERM program; there were no violations. In the area of regulatory compliance, she shared that during a recent inspection at the Kramer Power Plant by the South Coast Air Quality Management District (AQMD), it was noted that the ammonia storage tank on site did not have a permit. This tank has been on site since the plant was built 20 years ago, however, permitting requirements have changed. She stated that staff is working with AQMD to obtain the permit, and no additional monitoring or equipment requirements for the tank are expected, though potentially a small penalty may be received related to this. J. Lehman briefly discussed several legislative issues, highlighting two Federal California drought related bills, one was introduced by Senator Feinstein (Democrat, CA) (S 2198) and the other by Representative Valado (Republican, Hanford CA) (HR 5781). She reported that the bills are very similar, though the Representative Valado's bill, which is supported by the Republican caucus, has more provisions for infrastructure and contains limits on certain Delta protections to allow water flows to meet agriculture needs. Support for these two bills is split down party lines, and will likely require extensive negotiations and discussion before a bill is passed, which assist with any type of federal drought response for California. She also reported that a number of state bills have already been introduced -- mostly related to the Greenhouse Gas Cap and Trade program. 12. AGENDA ITEM(S) FOR THE NEXT PUBLIC UTILITIES BOARD MEETING ON JANUARY 28, 2015. • Water Rate Hearing * • Quarterly Status Reports on CIP, MA, GSA, and Spot Bid Awards • Presentation on Windy Ridge Tank Project • Transmission Service Enabling Agreement 13. ITEM(S) BY SECRETARY. D. Lee explained the emergency contact forms were being requested of Board members, since the Board attends off -site meeting and tours on behalf of the City. D. Lee informed the Board that staff is evaluating electronic meeting agenda options. The Board requested that the system have the capability to take notes. A. Kott will provide additional information on ACTION TAKEN 2014-84 AGENDA ITEM records requirements at a future meeting. D. Lee informed the Board of the upcoming groundbreaking ceremony for the Bowerman Landfill project, and that staff would email details prior to the event. Lastly, D. Lee extended his thanks to S. Sciortino for his years of service to the City of Anaheim and the Public Utilities Department. His contributions were very significant considering the recommendations made to the City Council on SONGS, renewables, and Canyon Power Plant. A letter of appreciation was presented to S. Sciortino from the Board. 14. ITEM(S) BY BOARD MEMBERS. C. Monaco indicated he attended the Anaheim Regional Transportation Intermodal Center (ARTIC) opening ceremony and was pleased with the facility and the overall event. He thanked staff for the rates workshop, saying that the information was helpful. D. Wain also attended the ARTIC ceremony and believes it will be an asset for the City of Anaheim. He also shared that he called Customer Service and was pleased with the service he received. He thanked S. Sciortino for all his efforts and congratulated him on his retirement. S.E. Faessel thanked staff for the high level of communication provided to the residents and the Board. She thanked D. Calkins for the update on the Ball Road Basin Project. She congratulated S. Sciortino on his retirement. She also mentioned that she enjoyed the ARTIC ceremony as it was a good opportunity to educate the public on the different transportation services. L. Cahill wished S. Sciortino well in his retirement, sharing that he appreciated his efforts on the Canyon Power Plant. B. Hernandez wished S. Sciortino well on his retirement. He shared information on the passing of Mr. Rex Brunn's wife, sharing that she was a dedicated Anaheim resident who involved herself in the community. B. Hernandez inquired about the Department providing the Board with an analysis of comparative rates with Southern California Edison (SCE). Staff will provide additional information on rate comparisons at a future meeting. D. Singer wished S. Sciortino well in his retirement and thanked him for his service. ACTION TAKEN AGENDA ITEM 15. ADJOURNMENT: (TO THE PUBLIC HEARING AND REGULAR MEETING DATE ON JANUARY 28, 2015, AT 5:00 P.M., IN THE 2" FLOOR GORDON HOYT CONFERENCE ROOM, ANAHEIM WEST TOWER, 201 S. ANAHEIM BOULEVARD, ANAHEIM, CALIFORNIA). ACTION TAKEN S.E. Faessel moved to adjourn the Regular Meeting at 7:37 p.m. to the Public Hearing and Regular Meeting Date on January 28, 2015 at 5:00 p.m. in the Gordon Hoyt Conference Room. B. Hernandez seconded the motion. MOTION CARRIED: 6-0. ABSTAINED: 0. ABSENT: 1 (J. Machiaverna). * 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.