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Public Utilities 2018/02/28CITY OF ANAHEIM PUBLIC UTILITIES BOARD MINUTES FEBRUARY 28, 2018 The agenda having been posted on Thursday, February 22, 2018, the Regular Meeting of the Public Utilities Board (Board) was called to order by Chairperson E. Medrano at 5:00 p.m. on Wednesday, February 28, 2018, in the 11th Floor Large Conference Room, Anaheim West Tower, 201 S. Anaheim Blvd., Anaheim, California. Board Members Present: Chairperson E. Medrano, Vice -Chairperson J. Seymour, A. Abdulrahman, V. Baroldi, R. Nelson, J. Showalter, V. Ramirez Board Members Absent: None Public Utilities Department Staff Present: D. Lee, L. Quiambao, M. Moore, J. Lonneker, B. Beelner, A. Kott, G. Bowen, J. Lehman, P. Oviedo, P. Hayes, M. Robledo, Y. Gaytan, M. Seifen, P. Bogdanoff, E. Krause, J. McBride Guest(s) Present: None A ENDA ITEM, ACTION TAKEN 1. PUBLIC COMMENTS. None. 2. APPROVE THE MINUTES OF THE REGULAR PUBLIC UTILITIES BOARD MEETING OF JANUARY 24, 2018. * 2018-9 There being no public comments, Chairperson E. Medrano closed the public comments portion of the meeting. J. Seymour moved approval of the Minutes of the Regular Public Utilities Board Meeting of January 24, 2018. R. Nelson seconded the motion. MOTION CARRIED: 7-0. ABSTAINED: 0. ABSENT: 0. 3. PRESENTATION: TRANSMISSION SYSTEM RELIABILITY OVERVIEW. G. Bowen, Assistant General Manager — Power Supply, introduced E. Krause, Principal Integrated Resource Planner, who gave a presentation on Transmission System Reliability. E. Krause discussed how the transmission grid is interconnected throughout the United States as well as how the Public Utilities Department (Department) is connected to the regional transmission grid. E. Krause also discussed the risks associated with the transmission system and how the system is designed for resiliency should transformers or transmission lines fail as result of sabotage, natural disasters such as wildfires, or operational error. The Board asked if the Department makes the California Independent System Operator (CAISO) aware of blackouts and if there are any drills in place to prepare for such events. Staff indicated that the CAISO makes determinations on rotating outages to avoid larger -scale blackouts. Staff indicated that drills for weather, earthquakes, and summer preparedness are conducted periodically to prepare for such emergency events. 4. PRESENTATION: UPDATE ON NORTH BASIN GROUNDWATER CLEANUP PROGRAM. P. Bogdanoff, Water Planning and Resources Manager, provided the Board with an update on the North Basin Groundwater Cleanup Program (Program). P. Bogdanoff discussed the history of the North Basin area, contaminants of concern, and the potential impacts to Anaheim. P. Bogdanoff explained that the contamination is in the shallow aquifer, and that Anaheim proactively shut down a shallow well, and pumps from the principal aquifer, that is much deeper in order to meet federal and state water quality standards. P. Bogdanoff also provided a summary of efforts by the Environmental Protection Agency (EPA), as the lead organization, to analyze and mitigate the contamination in this portion of the groundwater basin. He also provided a brief overview of the EPA's Superfund Program and current outreach efforts which include analyzing and cleaning up land and waterways, and explained how the Orange County Water District (OCWD) is supporting the effort. The Board inquired as to how successful the EPA has been with getting businesses to pay the clean-up costs caused by contamination resulting from their business enterprises. Staff indicated that once a site is listed on the National Priorities List the EPA has relatively good success in getting potentially responsible 2018-10 parties to pay for remediation activities and additionally the EPA has access to Superfund funding to provide financial assistance for clean-up activities. The Board asked how quickly the plume is migrating from Fullerton towards Anaheim, and staff indicated that it has taken decades since manufacturing activities took place, and that this is a long-term remediation process. The full extent of the remediation and cost is still to be determined by the EPA. 5. PRESENTATION: OVERVIEW OF THE WATER AND ELECTRIC RATES AND RULES PROPOSAL. B. Beelner, Assistant General Manager — Finance and Administration, introduced J. McBride, Strategic Planning Manager, who discussed proposed water rate increases, modifications to electric rates, the addition of a new rate schedule, and a new program for income -qualified customers. J. McBride made the Board aware of the upcoming water and electric rate hearings which are scheduled for March 28, 2018 at 5:00 p.m. in the Anaheim West Tower, second floor Gordon Hoyt Conference Center. J. McBride discussed the Department's proposed increases to two water rate components: the Water Commodity Adjustment (WCA) and Water System Reliability Adjustment (WSRA). He explained that the proposed WCA increase will recover the rising costs billed to the Department by the wholesale water suppliers who have increased their rates to recover their costs. J. McBride indicated that approximately 60% of the proposed increase will pay for higher water supply costs while the remaining 40% will be used to fund water system improvements. J. McBride illustrated that nearly half of the water mains making up the Department's distribution system are 50 to 60 years old and emphasized the importance of strategically investing in the water system on a regular basis to help ensure a reliable system while minimizing the impact to customers' bills. J. McBride also discussed proposed modifications to electric rate schedules which will not materially increase revenues. He explained that modifications to formulas contained in the Feed -in - Tariff and Developmental Net Energy Metering rate schedules will appropriately compensate those who generate excess energy and provide it back to the grid by reflecting the value of the energy generated locally in Anaheim. The second item is to discontinue an outdated incentive for electric space heating that was originally implemented in the 1970's, 2018-11 noting that a subset of the Department's residential customers will see higher bills during the winter months but will be paying the same rates as the majority of residential customers pay. J. McBride indicated that customers with medical needs that require electricity, such as life support devices, will continue to receive an additional allowance of energy at the lowest rate for medical purposes. The third item is a proposed new rate for the purpose of charging commercial electric vehicles. The Department has received inquiries from customers, including school districts, who are integrating electric school buses into their fleets. The proposed rate will achieve shared savings for customers and the Department by encouraging electric vehicle charging during off-peak hours when there is excess system capacity or when the cost to generate or procure energy is lower. The fourth item is a proposal to replace the Green Power Program with a new Solar Power Program, noting that the Green Power Program was initiated approximately 15 years ago in order to allow customers the option of contributing towards the Department's adoption of renewables into its energy portfolio. Since the Department now has multiple renewable energy resources in its portfolio and will be procuring more as it works toward state mandates, the Green Power Program detailed in Electric Rule No. 29 is no longer necessary. J. McBride explained that the proposed Solar Power Program will allocate the energy generated by Department -owned solar facilities located on public school sites to income -qualified customers, on a rotational basis, who may not otherwise be able to participate in solar energy due to financial limitations. Lastly, J. McBride provided bill comparisons with surrounding cities and spoke about some of the ways the Department maintains comparatively low rates. He provided metrics that reflect the Department's operating efficiency, capital investment levels, and employee efficiency as compared to other water and electric utilities in the region. The Board asked whether the proposed increase to the WSRA was enough, given the aging water distribution system. Staff explained that the Department is trying to maintain a balance that will help ensure safe and reliable water for its customers but also mitigate large rate increases. The Board inquired whether the Department has considered tiered water rates. B. Beelner explained that the Department doesn't have a compelling reason to adopt tiered rates at this time. B. Beelner also indicated that some water agencies have budget -based 2018-12 rates which require information about the nurnber of people in each household, hindscape area, and other pr'sonal inforallation. Additionally, theDt�partrnent was able to i:neet its state mandated. coriservation goals withotit, tiered rates. The Board asked about flae irnp . act of the proposed water rate increases on low-incorne residents. Staff explained that many low- income residents live in apartment buildirigs and do notrecti ive a water bill because the building is served by a single imaster meter. however, for those who do receive an water hill, the Department offers several 1'.-n-ogran.-is designed to help customers conserve water and thereby lower their bills. 6. SOUTWERN CALIFORNIA PUBI..JC POWER AUT1.1011ITY (SCPPA)EXPENDIFURES, ANNUAL UPDATE. G.Bowe n, Assistant General. Manager - Power Supply, discussed the Southern Califomia Public Power Authority (SCPPA) expenditures, annual update with the Board. G. Bowen noted that the Department, as well as other raernber municipa l. agencies, throughS( ?PAj(,-)i.nt1y finailce major energy related projects to achieve economies of scale. G. Bowen explaine(.1 how through leveraging, the collective 1purchasing power of SCPPA member ,agencies, the Department is able to provide ftiaancial savings for its customers. G. Bowen explained the five -key areas eneration, transmission, fael, renewables, andjoint utility programs Where the Department participates in SCPPA, explaining that these areas represent about 25% w,-)fthe power supply budget. 7.APPROVA.I., OF A RESOIXTION AUTTIORIZ INGTHE VUBLICITTILITIES GENERAL MANAGER OR DESIGNEE TO SUBMIT A CCI STSHARING GRAN'TAPPLICAL".110N ON' BEIIA1Y 0,1111? THE crry OFAN AREIM (ANAHEIM) TO THE UNITED STATES DEPARTMENTOF THE INTERIOR, BUREAU OF RECI,ALMATION FOR A. CALFEID WATER USEEFFICIT�','NCY GRANT OF UPTO $1.25,000 FOR WATER EFFICIENTI)VICE S ATSMAI.,L BUSINESSES AND TORI PLACETTJRF AND PROVIDE WATER EFFICIENT DEVICES FOR INCOM_E' QUA11FIED RESIDENTS, T'0 ACCEP,r StJC1 I GRANTFUNDING AS AWARDED AND ENTER INTO A FINANCING .AGREEMENT WITH RECI,AMATION, AND TO "FAKE SUCH ACTIONS AS Allf., NECESSARY IN FURTHERANCE OF THE GRANT; AND DETERMINING THAT THIS RE' S01,19.11ON IS EXE NIlel TFRO.M.''FlIE CALIFORNIA ENVIRONMENTAL QUALITY A.C`17 (('.,EQA) PURSUANT' TO PUBIJC RESOURCES CODE SECTION 21-080(11)(1.) AND RAM J, Seymour moved approval of a Resolution authorizing the Public, Utilities Dep artrinent to apply for a cost sharing � !rant and., if awarded, enter into a financing agreement with the (Inited States Department of theInterior Bureau of Reelzanation for three types of water efficiency devif,.I.es. A.. Abdulrahman secorided the motion. MOTION CARRIED: 7 0. A.BsTAINED: 0. ABSENT: 0. SECTION 15268,15301(A) AND (B), 15302(C) AND 15304(B) OF TITLE 14 OF THE CALIFORNIA CODE OF REGULATIONS. * M. Moore, Assistant General Manager — Water Services, explained that this cost sharing grant would assist the Department with funding water conservation programs for Anaheim's income - qualified residents and small business owners. The supplemental grant funding, if awarded, would allow more turf replacements, high efficiency toilet installations, and direct installation of water saving measures at small businesses. 8. APPROVAL OF PUBLIC UTILITIES DEPARTMENT ORDERS 171 (RECORDS AND INFORMATION MANAGEMENT), 172 (RELEASE OF CRITICAL INFRASTRUCTURE INFORMATION), AND 191 (COMMUNICATIONS/MEDIA RELATIONS POLICY) Y. Gaytan, Interim Administrative Services Manager, provided a general overview of three updated Department Order's (DOs): (1) DO 171 — Records and Information Management, which establishes the Department's policies and procedures for the creation, management, retention, storage, and destruction of records; (2) DO 172 — Release of Critical Infrastructure Information, which establishes the Department's policies and procedures for the authorized release and protection of critical electric and water infrastructure information; and (3) DO 191 — Communications/Media Relations Policy, which establishes the Department's procedures to ensure timely, accurate, consistent and appropriate information is released to the public. The Board concurred with the need for procedures to provide necessary guidance for Department personnel and approved the revised DOs. 9. UPDATE ON ELECTRIC SYSTEM ISSUES. J. Lonneker, Assistant General Manager — Electric Services, made the Board aware of the Department's restoration efforts of an outage that occurred in mid-February after a vehicle hit a power pole near Magnolia Avenue and Stonybrook Drive, causing significant damage to overhead power lines and poles, as well as damaging the block wall on a private property. J. Lonneker indicated the restoration effort took four crews about five hours to repair. J. Lonneker mentioned the line mechanic apprentices had the opportunity to make repairs on de -energized equipment which was an excellent training opportunity. 2018-14 A. Abdulrahman moved approval of Public Utilities Department Orders 171 (Records and Information Management), 172 (Release of Critical Infrastructure Information), and 191 (Communications/Media Relations Policy). V. Baroldi seconded the motion. MOTION CARRIED: 7-0. ABSTAINED: 0. ABSENT: 0. J. Lonneker discussed with the Board that the Department has A tour of the Harbor broken ground on the Harbor Substation project. This is a two Substation will be scheduled year project and site grading is underway. J. Lonneker will plan a for a future date. site tour at a future time for the Board as the project progresses. 10. UPDATE ON WATER SYSTEM ISSUES. M. Moore, Assistant General Manager — Water Services, indicated to the Board that local and statewide rainfall to -date is below normal; however, water storage accounts are in better shape due to previous winter storms. 11. UPDATE ON FINANCE ISSSUES. B. Beelner, discussed the monthly financial dashboard. B. Beelner indicated that the budgeted electric revenues were slightly higher than anticipated due to higher than expected energy prices resulting in higher wholesale sales through January, 2017 while water revenues were also at slightly higher than expected levels due to a continued warm, dry winter. B. Beelner mentioned expenses for both the water and electric utilities were on target through the first six months of the Fiscal Year. B. Beelner then discussed the budget process with the Board Budget meetings with members and offered one-on-one meetings with them to discuss individual Board members specific details, policy initiatives, and projects that will be included will be offered. in the Department's Fiscal Year 2018/19 budget proposal. 12. UPDATE ON POWER SUPPLY ISSUES. G. Bowen provided an update on the Department's power supply A tour of the Kraemer dashboard and provided an update on the status of repairs at the Power Plant will be Kraemer Power Plant. G. Bowen also extended an invitation to the scheduled for mid-March. Board to visit the Kraemer Power Plant when the gas turbine engine is removed from its enclosure for repairs in mid-March. 13. UPDATE ON ENTERPRISE RISK MANAGEMENT. J. Lehman, Chief Risk Officer, updated the Board regarding legislative affairs. She shared that the PUB Legislative Working Group had met prior to the Board meeting and reviewed a number of the bills with the potential to impact operations and increase costs to customers. Additionally, the Working Group reviewed and approved the 2018 Legislative Guiding Principles which are used to assist the Department in developing positions on legislation. J. Lehman provided a brief highlight of a meter training program that had been developed jointly with staff from Safety Administration, Electric Services, and Customer Services. J. 2018-15 Lehman noted that it was a proactive and creative program to better ensure the continued safety of staff. J. Lehman gave an overview of the 2"d annual Safety Fair that was held on February 22, 2018 and attended by over 200 employees, and in conclusion shared the safety statistics for 2017 that showed a marked improvement over 2016, as well as highlighted areas for future focus in 2018. 14. ITEM(S) BY SECRETARY. D. Lee mentioned that items planned for the following month include: Electric and Water Rate Hearings Water Supply Portfolio Update Small Business Efficiency Program D. Lee informed the Board that a SCPPA overview brochure and a Spring Greening customer outreach event flyer were distributed at their place settings. He provided an update on hosting 20 Advanced Placement students from Magnolia High School as part of Career Technical Education Month. The MESA (math, engineering, science, and achievement) students participated in tours of utility facilities and interacted with staff members. The Department also participated with the MUZEO on a fire hydrant painting program that included community members and the Anaheim Arts Council, Miss Anaheim Fall Festival, Girl Scouts of Orange County, OC Family Justice Center Foundation, and the Boys and Girls Club of Anaheim. D. Lee requested that the meeting be closed in the memory of Mr. Paul Rich, a former Board member who recently passed away. 15. ITEM(S) BY BOARD MEMBERS. V. Ramirez thanked staff for inviting students from Magnolia High School to attend the Engineering Career Pathways tour. E. Medrano recognized Mr. Paul Rich for his service to the community as a former electrician and member of International Brotherhood of Electrical Workers (IBEW) Local 441, 16. ADJOURNMENT IN MEMORY OF PAUL RICH, TO THE A. Abdulrahman moved (PUBLIC HEARINGS/REGULAR MEETING ON MARCH approval to adjourn the 2018-16 28, 2018, AT 5:00 P.M., IN THE GORDON HOYT CONFERENCE CENTER, 2ND FLOOR, ANAHEIM WEST TOWER, 201 S. ANAHEIM BOULEVARD, ANAHEIM, CALIFORNIA). E. Medrano called for a moment of silence, followed by a call for a motion to adj ourn in memory of Mr. Rich. Reectfully ubmitted, Dukku Lee Public Utilities General Manager Regular Meeting in Memory of Paul Rich at 7:27 p.m., to the Board's Public Hearings/Regular Meeting date of March 28, 2018 at 5:00 p.m. J. Seymour 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. 2018-17