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Public Utilities 2018/08/22CITY OF ANAHEIM PUBLIC UTILITIES BOARD MINUTES AUGUST 22, 2018 The agenda having been posted on Thursday, August 16, 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, August 22, 2018, in the I Ph 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, V. Ramirez, J. Showalter Board Members Absent: R. Nelson City Staff Present: D. Lee, L. Quiambao, P. Bogdanoff, B. Beelner, A. Kott, G. Bowen, J. Lehman, P. Oviedo, F. Barvarz, E. Krause, Y. Saldivar, C. Pereyra Guest(s) Present: None AGENDA ITEM ACTION TAKEN 1. PUBLIC COMMENTS. 2. ELECTION OF THREE UNDERGROUND CONVERSION SUBCOMMITTEE MEMBERS. A. Kott, Assistant City Attorney, opened the floor for nominations for three members of the Underground Conversion Subcommittee. E. Medrano nominated V. Baroldi, V. Baroldi nominated A. Abdulrahman, and A. Abdulrahman nominated J. Showalter. All accepted the nominations. J. Seymour moved to close the nominations and V. Ramirez seconded the motion. By voice vote, the Board members unanimously voted to close the nominations. By voice vote, the Public Utilities Board members elected V. Baroldi, A. Abdulrahman, and J. Showalter to serve on the Underground Conversion Subcommittee. J. Showalter confirmed her willingness to serve as an alternate on the Public Utilities Hearing Board. 2018-59 There being no public comments, Chairperson E. Medrano closed the public comments portion of the meeting. By voice vote, the Board elected V. Baroldi, A. Abdulrahman, and J. Showalter to serve on the Underground Conversion Subcommittee. MOTION CARRIED: 6-0. ABSTAINED: 0. ABSENT: 1(R. Nelson). ITEM NO. 01 3. APPROVAL OF THE MINUTES OF THE PUBLIC J. Seymour moved approval UTILITIES BOARD MEETING OF JULY 25, 2018. * of the Minutes of the Public Utilities Board Meeting of July 25, 2018. V. Baroldi seconded the motion. MOTION CARRIED: 6-0. ABSTAINED: 0. ABSENT: 1(R. Nelson). 4. PRESENTATION: TELECOMMUNICATION SYSTEM OVERVIEW. F. Barvarz, Transmission and Distribution Manager, presented the Public Utilities Department's (Department) Telecommunications Overview. F. Barvarz described the role of citywide fiber optics and wireless networks in the Department and municipal operations. F. Barvarz then explained the Department's program to help foster next -generation wireless service deployment for Anaheim's residents and businesses over the next 2-3 years. The Board inquired if the Department owned the fiber optic that provides the ability to speed up the network in the City. Staff indicated that the Department does own the fiber optic communications network, and offers access to its fiber system to third parties under lease agreements. 5. RECOMMEND AUTHORIZATION TO POST THE A. Abdulrahman moved UTILITIES SUCCESS INDICATORS FOR REPORTING authorization to post the PERIOD OF JANUARY 2018 THROUGH JUNE 2018 ON Utilities Success Indicators THE CITY OF ANAHEIM PUBLIC UTILITIES on the City of Anaheim DEPARTMENT WEBSITE. Public Utilities Department website. J. Seymour C. Pereyra, Utilities Analyst, provided an update on the Utilities seconded the motion. Success Indicators (USI) for the reporting period of January 1, MOTION CARRIED: 6-0. 2018 through June 30, 2018. C. Pereyra began with an overview ABSTAINED: 0. of the report, how metrics are set, and how the Department ABSENT: 1 (R. Nelson). performed overall during this reporting period. C. Pereyra highlighted call wait times, noting that performance was under the three minute target. The Board asked if priority was given to 311 calls; staff indicated that the Department has employees who are funded by the City's General Fund that are dedicated to handling 311 calls. C. Pereyra also discussed the Department's electric outage restoration time, noting that although performance was not in the top national quartile for the reporting period, the result still fared better than other comparable agencies in Southern California. C. Pereyra mentioned that the Department continues to invest in undergrounding and direct buried cable, and that a Mylar Balloon Safety and Recycling Program is currently being developed. 2018-60 C. Pereyra also highlighted the Department's strong credit ratings, remarking that both the electric and water utilities have strong ratings without needing to hold excessive amounts of cash. She also noted how customers have saved over $173,400 to -date since the Department reduced its reconnection and same-day service establishment fees. Lastly, C. Pereyra provided examples of Department initiatives that emphasize customer value, such as distribution of over 5,700 Welcome Kits since September 2017, installation of LED street lights throughout Anaheim, and numerous student engagement and education programs. 6. RECOMMEND APPROVAL AND ADOPTION OF KRAEMER POWER PLANT RAMP DOWN PLAN (PLAN) AND AUTHORIZE THE PUBLIC UTILITIES GENERAL MANAGER OR DESIGNEES) TO TAKE ANY AND ALL ACTIONS AS ARE NECESSARY TO IMPLEMENT THE PLAN. E. Krause, Principal Integrated Resources Planner, discussed the Department's Kraemer Power Plant Ramp Down Plan (Plan). E. Krause explained the history, financial drivers, alternatives, and the Plan for the next 10 -years in order to achieve $24 million in cost benefits for Anaheim customers. The plant is operated as a peaking unit and is called upon by the state grid operator to help integrate intermittent renewable resources. E. Krause explained that the plan had three major components, purchasing a refurbished gas turbine engine, replacement of parts on the heat recover steam generator to increase efficiency, and lastly the replacement of air emissions equipment as the existing equipment had reached its end of life. Lastly, E. Krause explained that after the 10 -years, the Department would decommission the plant and consider another option for the site including energy storage in the future. Other options were evaluated, including shutting down the plant sooner; however, costs would be incurred for capacity requirements and the Department would then have to pay to acquire such capacity in the market. The Board and staff discussed various aspects of the Plan and the alternative options to better understand how it contributes to the overall resource mix and cost mitigation strategies that contribute to maintaining lower electric rates. 7. UPDATE ON ELECTRIC SYSTEM ISSUES. F. Barvarz, Acting AGM — Electric Services, had no additional updates to provide. 2018-61 A. Abdulrahman moved approval of the adoption of the Kraemer Power Plant Ramp Down Plan. V. Baroldi seconded the motion. MOTION CARRIED: 6-0. ABSTAINED: 0. ABSENT: 1(R. Nelson). 8. UPDATE ON WATER SYSTEM ISSUES. P. Bogdanoff, Acting AGM — Water Services, provided an update on the Department's water supply. P. Bogdanoff indicated that California experienced lower than normal precipitation this year; however, the water storage reservoirs are still within acceptable levels. P. Bogdanoff informed the Board that staff is reviewing the water supply dashboard for the correct precipitation level in the Colorado River Basin. P. Bogdanoff also provided a brief update on the Better Way Anaheim (BWA) program operated by Love Anaheim, which offers community service projects for those who are homeless that, provides basic work experience as well as access to additional services to help end homelessness. P. Bogdanoff mentioned that Anaheim has partnered with BWA to have participants complete community improvements, including the painting of fire hydrants around Twila Reid Park. P. Bogdanoff also provided an update on the status of the Walnut Canyon Reservoir (WCR). The Department is lowering the water level in WCR in preparation for a capital improvement project. P. Bogdanoff indicated that notices have been posted around the reservoir informing residents of the activities and timeline. In addition, staff is updating social media to help spread awareness of the lower level, and that there would still be sufficient water for potential firefighting purposes. 9. UPDATE ON FINANCE ISSUES. B. Beelner, Assistant General Manager — Finance and Administration, discussed the monthly dashboard with the Board. B. Beelner indicated that electric revenue for July 2018 was 2.8% higher than budget ($1.1 M) largely due to higher than expected wholesale power revenue on the wholesale power market caused by a prolonged heatwave coupled with higher than expected natural gas prices. However, electric costs for the Department came in above budget by 11.0% ($3.7M) also due to the much higher than expected wholesale power prices coupled with the unavailability of the Kraemer Power Plant. B. Beelner mentioned that the Department will continue to monitor the budgetary situation, but does not expect July's negative budget variance to adversely impact the Department's financial position at this time. B. Beelner then mentioned that the July 2018 water revenue was 13.1% ($1.1 M) below budget, but should rebound in subsequent months as the Department bills its customers in August and September for their usage for the month of July. B. Beelner noted that water costs also came in below budget by 10.3% ($0.6M). Lastly, B. Beelner mentioned that the Southern California Public Power Authority (SCPPA) is in the process of refunding bonds 2018-62 associated with the Southern Transmission System (STS). B. Beelner explained that the Department is one of the participants of this transmission project and that the refunding should save the Department approximately $800k over the next five years. 10. UPDATE ON POWER SUPPLY ISSUES. G. Bowen, Assistant General Manager — Power Supply, provided the Board with an update on the Department's power supply resources performed in the month of July. G. Bowen noted that July was an extremely hot month with peak temperatures reaching 106 degrees Fahrenheit and that there were four days in which temperatures exceeded 100 degrees. G. Bowen explained that there were a confluence of issues that occurred that led to increased power supply costs in July including major natural gas pipeline repairs which resulted in higher than normal gas prices, the ongoing Kraemer Power Plant outage, and the Department's Intermountain Power Project facility which was down for five days. 11. UPDATE ON ENTERPRISE RISK MANAGEMENT. J. Lehman, Chief Risk Officer, mentioned that as part of the Department's Energy Risk Management measures, employees involved in all areas of energy transactions from planning to the trade desk and finance must take federal anti -market manipulation training annually. J. Lehman explained that this training, which reviews the types of transactions that are allowed and reminds staff of the type of information that can and cannot be discussed with other companies, was recently completed. J. Lehman then mentioned that each year the Department conducts an exercise of its Emergency Response Plan, which gives responders an opportunity to reevaluate and refresh preparations for an emergency. J. Lehman indicated that emergency drills have been conducted in past years to address rainstorms, floods, fires, and the threat of mudslides. She invited the Board to observe the upcoming exercise on Wednesday, August 29. Finally, J. Lehman indicated that the PUB Legislative Working Group had met prior to the Board meeting and had reviewed legislation with the potential to impact the Department. J. Lehman noted that while a proposed bill for a tax on drinking water was not moving forward, that a different bill was amended that would mandate water utilities to place a voluntary donation on customer's bills that would be sent to a state fund. As well, there are bills that would mandate purchases of certain renewable technologies and place energy storage requirements on the California Independent System Operator (CAISO) — all of which could increase costs to customers. J. Lehman then thanked the PUB Legislative Working Group for their time on these important issues. 2018-63 12. ITEM(S) BY SECRETARY. D. Lee informed the Board that items scheduled for the following Board meeting include: • Water Reliability Presentation • Legislative Wrap Up • Department Orders on Change Order Processing and Boil Water Notices D. Lee showed photographs of a meeting held with Glen Norman, who is a street light historian. Mr. Norman educated staff and Council member Faessel that some Anaheim historic streetlights are installed at the Los Angeles Los Angeles County Museum of Art, while others were relocated to the City of Dinuba. 13. ITEM(S) BY BOARD MEMBERS. J. Showalter indicated she attended the La Palma Water Complex Dedication. J. Seymour reported he will be attending the Metropolitan Water District (MWD) inspection trip of the State Water Project in the month of September. E. Medrano also reported that he will be attending the MWD inspection trip of the State Water Project. 14. ADJOURNMENT: (REGULAR MEETING ON SEPTEMBER 26, 2018, AT 5:00 P.M., IN THE 11TH FLOOR LARGE CONFERENCE ROOM, ANAHEIM WEST TOWER, 201 S. ANAHEIM BOULEVARD, ANAHEIM, CALIFORNIA). R s )ectfully su mitted, Dukku Lee Public Utilities General Manager J. Seymour moved approval to adjourn the Regular Meeting at 6:34 p.m., to the Board's Regular Meeting date of September 26, 2018 at 5:00 p.m. A. Abdulrahman seconded the motion. MOTION CARRIED: 6-0. ABSTAINED: 0. ABSENT: 1 (R. Nelson). * 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. 2018-64