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Public Utilities 2015/10/28CITY OF ANAHEIM PUBLIC UTILITIES BOARD MINUTES October 28, 2015 The agenda having been posted on Thursday, October 22, 2015, the Regular Meeting of the Public Utilities Board (Board) was called to order by Chair J. Machiaverna at 5:00 p.m. on Wednesday, October 28, 2015, in the 11"' Floor Large Conference Room, Anaheim West Tower, 201 S. Anaheim BIvd., Anaheim, California. Board Members Present: Chair J. Machiaverna, Vice Chair S.E. Faessel, B. Hernandez, D. Wain, L. Cahill, A. Abdulrahman, E. Medrano Board Members Absent: None Staff Present: D. Lee, B. Beelner, J. Lonneker, M. Moore, G. Bowen, J. Lehman, A. Kott, L. Quiambao, P. Oviedo, D. Schmidt, M. Seifen, M. Robledo, M. Jouhari, R. Acosta, D. Albaugh, L. Laski Guest(s) Present: None AGENDA ITEM ACTION TAKEN 1. PUBLIC COMMENTS. There being no further public comments, Chair J. L. Laski, Human Resources Development Specialist I, presented an Machiaverna closed the public award to the Public Utilities Department (Department) and D. comments portion of the Albaugh with an award for the most department donors to participate meeting. in the Citywide blood drive. No Other Public Comments. 2. APPROVAL OF THE M]NUTES OF THE REGULAR S.E. Faessel moved approval of MEETING OF THE PUBLIC UTILITIES BOARD MEETING the Minutes of the Public OF SEPTEMBER 23, 2015. * Utilities Board Regular Meeting of September 23, 2015. B. Hernandez seconded the motion. MOTION CARRIED: 7-0. ABSTAINED: 0. ABSENT: 0. 3. APPROVAL OF THE MINUTES OF THE REGULAR D. Wain moved approval of the MEETING OF THE PUBLIC UTILITIES BOARD — Minutes of the Public Utilities FACILITIES INSPECTION OF THE CALIFORNIA Board — Facilities Inspection of INDEPENDENT SYSTEM OPERATOR FOLSOM CONTROL the California Independent CENTER MEETING OF OCTOBER 15, 2015. * System Operator Folsom Control Center Regular Meeting of October 15, 2015, E. Medrano seconded the motion. MOTION CARRIED: 7-0. ABSTAINED: 0. ABSENT: 0. ITEM NO. 01 AGENDA ITEM 4. APPROVAL OF THE FIRST AMENDMENT TO THE SAN ONOFRE NUCLEAR GENERATING STATION (SONGS) DECOMMISSIONING TRUST FUND AGREEMENT BETWEEN THE CITY OF ANAHEIM AND U.S. BANK NATIONAL ASSOCIATION. * B. Beelner, AGM - Finance and Administration, shared that an amendment to the existing San Onofre Nuclear Generating Station (SONGS) Decommissioning Trust Agreement (Agreement) with U.S. Bank was submitted for consideration and approval. He discussed the changes in the Nuclear Regulatory Commission (NRC) rules related to nuclear plant decommissioning and how those rule changes have required the current 1990 trust agreement to be amended. The current trust account has a balance of approximately $130 million, with current estimates of Anaheim's share of decommissioning -related costs to be approximately $110 million. The $20 million difference is to be held as contingency. The amendment to the Agreement will allow the Department to begin withdrawing money from the trust to pay for decommissioning -related expenditures, which is the purpose the trust was set up to do, and without the amendment the Department would not be able to draw from the trust in order to be reimbursed for its share of SONGS decommissioning -related costs. The Board asked if the $130 million is withdrawn all at once, and B. Beelner clarified that withdrawals are based on invoices. 5. PRESENTATION AND UPDATE ON THE ENVIRONMENTAL PROTECTION AGENCY (EPA) ACTING AS LEAD AGENCY UNDER COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION, AND LIABILITY ACT (CERCLA) FOR THE NORTH ORANGE COUNTY GROUNDWATER BASIN (NORTH BASIN). M. Moore, AGM - Water, presented the Board with an update on the recent activities to clean up the North Orange County Groundwater Basin (North Basin). The North Basin is a part of the Orange County Groundwater Basin near the border of Fullerton and Anaheim, generally along the SR -91 freeway, where industrial manufacturing in the City of Fullerton during the 1950's and 1960's resulted in a release of contaminants. He clarified that the contamination is generally in the 100 foot depth level, where Anaheim draws water from up to 1,300 feet deep in the aquifer. He explained that Anaheim's drinking water continues to meet or exceed all federal and state water quality standards; however, long-term, it is necessary to mitigate the contamination. The Environmental Protection Agency (EPA) notified various stakeholders, including the Department, that it is now the lead agency with the responsibility to evaluate the North Basin and coordinate a cleanup program for the North Basin. Anaheim staff and Fullerton representatives met with the EPA project team to discuss the process and schedule for the planning process. M. Moore presented the Board with a flowchart and described the planning process being implemented by EPA. The Board discussed another site in Fullerton that required clean-up, which followed the same process, as have a number of other sites in California. 2015-66 ACTION TAKEN L. Cahill moved approval of the First Amendment to the SONGS Decommissioning Trust Fund Agreement between the City and U.S. Bank. A. Abdulrahman seconded the motion. MOTION CARRIED: 7-0. ABSTAINED: 0. ABSENT: 0. AGENDA ITEM ACTION TAKEN 6. PRESENTATION ON 2014 ELECTRIC SYSTEM RELIABILITY REPORT. M. Robledo, Electric Operations Manager, presented the Board with a summary of the 2014 Electric System Reliability Report, including the benchmark metrics commonly used within the electric utility industry to track system performance during power outages, and impact of outages on customers. Anaheim's reliability metrics compared favorably to its neighboring utilities and all utilities nationwide, and he reviewed the inspection, maintenance, infrastructure replacement, automation, and workforce training programs contributing to high reliability in Anaheim. The Board inquired about the apprentice program, and M. Robledo explained the various apprentice position in the Electric Division. The Board asked about the use of drones, and D. Lee informed the Board that they are being evaluated by larger utilities primarily for transmission lines. The Department will monitor their use in the industry. 7. PRESENTATION ON EMERGENCY RESPONSE PLAN ACTIVITIES. J. Lehman, Chief Risk Officer, shared that the Emergency Response Plan (Plan) was an important part of the Department's planning efforts, and that the PIan had been updated this year. D. Schmidt, North American Electric Reliability Corporation (NERC) Compliance and Emergency Response Manager, provided the Board with the annual presentation on emergency response planning and preparedness. This briefing described the elements of the Department's Emergency Response program, including the most recent revisions to the Plan, and the programs that are in place to ensure that timely and accurate information is available to members of the public, key stakeholders and other agencies. He also provided information regarding the Department's mutual aid resources and a summary of the 2015 Department -wide training exercise. Additionally, D, Schmidt reviewed the emergency preparedness activities planned for the coming year, including continued collaboration with other City departments, future training and planned exercises. The Board asked about the mandatory nature of the exercise, and D. Schmidt explained that the focus of this year's exercise was to get second and third level employees involved with training. 8. DISCUSSION ON THE QUARTERLY STATUS REPORTS ON CAPITAL IMPROVEMENT PROJECTS, MASTER AGREEMENTS, GENERAL SERVICE AGREEMENTS AND SPOT BID AWARDS. D. Lee, Public Utilities General Manager, shared the quarterly status reports for both the Electric and Water divisions summarizing the master agreements, general service agreements, and spot bids. The reports include formatting changes previously requested by the Board. 2015-67 AGENDA ITEM 9. UPDATE ON WATER SYSTEM ISSUES. ACTION TAKEN M. Moore reported that customers have conserved 26% of their water usage compared to 2013 as part of the ongoing drought response. He also updated the Board on the Walnut Canyon Reservoir repairs. The reservoir level is at 18% of capacity while repairs are being made, and work is expected to take several more weeks, after which it will be refilled. Finally, notices for the water rate adjustment were mailed this week, so all customers and property owners should receive them over the next few days. 10. UPDATE ON ELECTRIC SYSTEM ISSUES. J. Lonneker, AGM — Electric Services, shared with the Board that the Anaheim lineman team won third place overall in the Municipal Division at the 2015 International Lineman's Rodeo held October 17" in Kansas City, Missouri. The Board extended their congratulations to the team for their performance. 11. UPDATE ON FINANCE ISSUES. B. Beelner shared information reflected on the monthly dashboard with the Board. He discussed how both electric and water revenues were below budget for the fiscal year and expenses were also below budget. However, he did caution that the positive budget variance in the Water Utility will not continue as the Department's costs fall in the winter months so there will not be as much room to cut costs, and the Water Utility will begin to experience a budget deficit which necessitates the proposed upcoming rate action. 12. UPDATE ON POWER SUPPLY ISSUES. G. Bowen, AGM - Power Supply, shared information on the Metropolitan Water District's (MWD) Life Poster Contest (Contest), with the Board. He explained that every year the Department sponsors the Contest and the winning pictures are submitted to a regional competition for judging and are then featured in MWD's calendar for the following year. One of this year's selected pictures was drawn by Courtnie Bui, a 4th grader at Fairmont Private School. On November 18, 2015, from 10 a.m. to 1 p.m., MWD will be hosting a celebration for all students that submitted pictures for the Contest. G. Bowen thanked the Board for their participation in the California Independent System Operator (CAISO) facilities tour on October 15, 2015. He also shared two upcoming community events that will take place on November l e: the Alzheimer's Association Walk at Angel Stadium; and the South District, a "Neighborhood Cleanup Event" on the corner of Haster and Orangewood, where residents can bring their hazardous and bulky items for disposal. Staff will be at both events providing information on ways to save water and energy. 2015-68 AGENDA ITEM ACTION TAKEN 13. UPDATE ON ENTERPRISE RISK, COMPLIANCE, AND LEGISLATIVE & REGULATORY AFFAIRS ISSUES. J. Lehman, Chief Risk Officer, invited the Board's attention to the Internal Compliance Report. She highlighted that the Department had an inspection of the drinking water system by the State Water Resources Control Board's Division of Drinking Water, and that the inspection went smoothly, though the inspection report has not yet been received. J. Lehman then provided the Board with the Legislative Wrap -Up Report for 2015, which provides the final outcome of the 2015 legislative year. She explained that Senate Bill (SB) 350 (DeLeon) was the vehicle used to implement the Governor's climate change goals, and was passed into law. J. Lehman also highlighted that potential legislation in 2016 could include a water user surcharge proposal, and likely more emphasis on water related issues. She mentioned that the next Legislative Working Group Meeting will be in February 2016, after the deadline for introducing new bills. 14. AGENDA ITEM(S) FOR THE NEXT PUBLIC UTILITIES BOARD MEETING ON NOVEMBER 18, 2015. D. Lee mentioned the following upcoming agenda items: • Cap and Trade Compliance Update • Update on the Solar Rebate Program • Update on the Street Light Program • Presentation on the Five -Year Electric Substation Improvement Plan • New Revolving Credit Agreement 15. ITEM(S) BY SECRETARY. D. Lee shared photographs from Public Power Week on October 80, at the Downtown Farmer's Market, where the Department hosted 0-0 grade students from Maxwell Elementary School. He also showed photos of staff who responded quickly to customer concerns during the heat wave of high utility bills by providing rebates on air conditioning tune-ups, ceiling fans, and whole house fans at local Home Depot and Lowe's stores. Finally, he shared that the Department is participating in a P21 mentoring program and has partnered with Loara High School. The Department hosted 18 students and will have four sessions with them. The program is available to other high schools, and the Department will reach out to other school districts. 2015-69 AGENDA ITEM 16. ITEM(S) BY BOARD MEMBERS. A. Abdulrahman thanked staff for the presentations and information provided during the meeting and for the CAISO facilities inspection on October 15`h. D. Wain thanked staff for the informative meeting and CAISO meeting. E. Medrano stated that there was a lot of information provided during the meeting and he appreciated how staff makes the items understandable. He also appreciated the CAISO facilities inspection and all he learned during the Board's visit. L. Cahill thanked staff for CAISO facilities meeting and said it was interesting to see the facility after having heard so much about it. B. Hernandez expressed his appreciation for the way information is presented and distributed to the Board. S. E. Faessel thanked staff for the CAISO facilities inspection, as well as the presentations and information provided during the meeting. She congratulated the Iinemen for their placement in the Linemen's Rodeo. Lastly, she thanked staff for the new water cling stickers, which she plans to pass out to help encourage conservation. J. Machiaverna echoed all the Board members' comments regarding the CAISO facilities inspection, and complimented the outreach efforts to the community to assist in conservation. 17. ADJOURNMENT: (REGULAR MEETING ON NOVEMBER 18, 2015, AT 5:00 P.M., IN THE 11TH FLOOR LARGE CONFERENCE ROOM, ANAHEIM WEST TOWER, 201 S. ANAHEIM BOULEVARD, ANAHEIM, CALIFORNIA). R ctfu u fitted, Dukku Lee Public Utilities General Manager ACTION TAKEN A. Abdulrahman moved approval to adjourn the Regular Meeting at 6:56 p.m., to the Board's Regular Meeting date of November 18, 2015 at 5:00 p.m. D. Wain seconded 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 CIerk and City Council for informational purposes.