Public Utilities 2018/09/26CITY OF ANAHEIM
PUBLIC UTILITIES BOARD
IhD Q111 May
SEPTEMBER 26, 2018
The agenda having been posted on Thursday, September 20, 2018, the Regular Meeting of the Public
Utilities Board (Board) was called to order by Vice -Chairperson J. Seymour at 5:00 p.m. on Wednesday,
September 26, 2018, in the 11'h Floor Large Conference Room, Anaheim West Tower, 201 S. Anaheim
Blvd., Anaheim, California.
Board Members Present: Vice -Chairperson J. Seymour, A. Abdulrahman, R. Nelson, J. Showalter
Board Members Absent: Chairperson E. Medrano, V. Baroldi, V. Ramirez
City Staff Present: D. Lee, L. Quiambao, M. Moore, B. Beelner, A. Kott, G. Bowen,
J. Lehman, P. Oviedo, J. Lonneker, P. Garcia, J. Pueblos, M. Feliccia
Y. Gaytan, D. Shen, M. Seifen
Guest(s) Present: Judith Marquez, Innovare Environment; DJ Jansen, TIBCO
AGENDA ITEM ACTION TAKEN
1. PUBLIC COMMENTS.
D. Shen, Engineering Manager, was recognized on his upcoming
retirement for his years of service and commitment to the Public
Utilities Department (Department).
2. APPROVAL OF THE MINUTES OF THE PUBLIC
UTILITIES BOARD MEETING OF AUGUST 22, 2018.
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There being no public
comments, Vice -
Chairperson J. Seymour
closed the public comments
portion of the meeting.
A. Abdulrahman moved
approval of the Minutes of
the Public Utilities Board
Meeting of August 22, 2018.
J. Showalter seconded the
motion.
MOTION CARRIED: 4-0.
ABSTAINED: 0.
ABSENT: 3 (E. Medrano,
V. Baroldi, V. Ramirez).
ITEM NO. 01
3. PRESENTATION: WATER SYSTEM RELIABILITY.
P. Garcia, Water Construction Superintendent, gave a presentation
on the Department's Water System Reliability. P. Garcia
discussed the water supply diversity and distribution system
including the maintenance practices that allow the system to be
robust and reliable. P. Garcia explained different new technologies
utilized by staff to expedite restoring water service and to identify
potential failure before occurring. These technologies include
inserting an isolation valve (EZ Valve) in a water main without
shutting down the main and an Infrared Thermometer which is a
proven money -saving tool for diagnostic and predictive inspection
of electrical systems and equipment at pumping stations. P. Garcia
also showed how the number of main breaks per year has declined
over the last few years due to these preventative measures taken.
The Board inquired about the cost of a regular valve versus the EZ
valve. P. Garcia stated the approximate cost of various EZ valve
sizes. P. Garcia further explained that the Department will often
replace and reuse the EZ at a time when customers are not
impacted.
The Board further inquired about how to support water staff and
their need for equipment such as a vacuum tanker truck. Due to
the high cost of the vehicle, the Department re -purposed an older
unit which is no longer reliable and is looking to purchase a new
vehicle later this year.
4. PRESENTATION: 2018 LEGISLATIVE OVERVIEW AND
IMPACTS.
J. Pueblos, Utilities Analyst, gave a presentation on the 2018 State
Legislative Overview and Impacts. J. Pueblos provided an
overview of the State legislative process and the Department's
Legislative Program, and then discussed key bills and issues the
Department engaged in this past Legislative session including their
outcomes and potential impacts. J. Pueblos indicated that the
Department successfully advocated on recently chaptered laws,
such as Senate Bill (SB) 100on a 100% clean energy state policy
and Assembly Bill (AB) 1668 and SB 606 on long term water
efficiency, by securing language that provide flexibility during
implementation in order to help minimize potential cost increases
on customers. J. Pueblos made the Board aware that the
Department is still awaiting the final outcomes on many bills as the
Governor has until the September 30, 2018 to sign or veto bills. J.
Pueblos concluded the presentation by describing the Department's
overall success in this past Legislative Session, and the potential
legislative issues and preparation for 2019,
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The Board asked for clarifications on certain bills and terms. Staff
provided more detailed information on those bills and terms along
with additional examples and context.
5. RECOMMEND APPROVAL OF A SOFTWARE SERVICES
AGREEMENT WITH POWER MARKET CONSULTING,
INC. FOR HIGH VOLTAGE TRANSMISSION DATABASE,
SOFTWARE ANALYTICS AND RELATED SERVICES FOR
ONE-YEAR WITH FOUR OPTIONAL ONE-YEAR
EXTENSIONS IN AN AMOUNT NOT TO EXCEED $77,000
PER YEAR WITH ANNUAL ESCALATIONS. *
G. Bowen, Assistant General Manager — Power Supply, discussed
the Software Services Agreement for High Voltage Transmission
Database, Software Analytics and Related Services with the Board.
G. Bowen described how the Department's electrical load is served
from many different sources of energy in and around the western
United States and that those sources of energy require transmission
paths to get them to Anaheim. G. Bowen explained that in order to
offset the cost of congestion on some of these transmission paths,
the California Independent System Operator (CAISO) provides the
Department with the ability to hedge against these costs with a
product called Congestion Revenue Rights (CRRs). G. Bowen
explained that specialized software is required to use CRRs to
select the transmission paths and to provide the lowest cost to
deliver energy from power plants to Anaheim customers.
6. RECOMMEND APPROVAL OF A FIRST AMENDMENT TO
THE SOFTWARE LICENSE AND SERVICES AGREEMENT
AND ORDER FORM WITH TIBCO SOFTWARE INC. FOR
UTILITY SYSTEM INTEROPERABILITY SOFTWARE
AND RESOLUTION OF SOFTWARE LICENSE
ENTITLEMENT DISCREPANCIES IN THE AMOUNT OF
$2,710,330 THAT INCLUDES THE FIRST YEAR OF
MAINTENANCE OF $524,580 AND ANNUAL
MAINTENANCE RENEWALS WITH A THREE PERCENT
ESCALATOR *
G. Bowen discussed the interoperability software used to support
and facilitate secure encrypted communications between large sets
of data used by the Department. G. Bowen mentioned the systems
used among multiple City departments include the customer billing
system and the City's financial systems, as well as operational
applications. G. Bowen explained that the Department originally
implemented this software in 2010 and recently went through a
software license review that identified that the Department needed
an additional 162 software licenses for additional computers that
have been deployed since 2010. The basis for the added licenses
are new users and additional servers, many of which have multiple
processers that increased the number of required licenses.
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R. Nelson moved approval
of a Software Services
Agreement with Power
Market Consulting, Inc. for
High Voltage Transmission
Database, Software
Analytics and related
services. A. Abdulrahman
seconded the motion.
MOTION CARRIED: 4-0.
ABSTAINED: 0.
ABSENT: 3 (E. Medrano,
V. Baroldi, V. Ramirez).
A. Abdulrahman moved
approval of a First
Amendment to the Software
License and Services
Agreement and Order Form
with TIBCO Software Inc.
J. Showalter seconded the
motion.
MOTION CARRIED: 4-0.
ABSTAINED: 0.
ABSENT: 3 (E. Medrano,
V. Baroldi, V. Ramirez).
G. Bowen also explained that going forward, a software license
management system will be procured separately and used to track
software licenses so the Department can identify the number of
licenses needed.
7. APPROVAL OF PROPOSED REVISIONS TO
DEPARTMENT ORDER 310 (EXTRA WORK/CHANGE
ORDERS AND EXTRA SERVICES APPROVAL AND
REPORTING PROCEDURES) AND DEPARTMENT ORDER
509 (PROCEDURES FOR PUBLIC NOTIFICATION OF
UNSAFE WATER).
D. Lee, General Manager, provided an overview of two updated
Department Orders (DOs): (1) DO 310 — Extra Work/Change
Orders and Extra Services Approval and Reporting Procedures,
which establishes the Department's guidelines for initial and
signature approval protocol and reports for Capital Project's extra
work and change orders; and (2) DO 509 — Procedures for Public
Notification of Unsafe Water, which establishes the criteria,
responsibilities, and procedures to be followed to ensure
compliance with state and federal notification requirements for
community water systems. The Board concurred with the need for
procedures to provide necessary guidance for the Department.
8. UPDATE ON ELECTRIC SYSTEM ISSUES.
J. Lonneker, Assistant General Manager — Electric, made the
Board aware of a momentary outage that occurred on September
23, 2018 due to a faulted cable impacting a circuit that serves a
portion of Angel Stadium. The Stadium was automatically
transferred to an alternate emergency circuit within 5 seconds, as
expected. Facilities personnel at the Stadium were informed by the
Utility's operator of the cause of the momentary outage and the
circuit was restored within minutes, with the Stadium load being
transferred back to the preferred circuit. J. Lonneker indicated to
the Board that planned work on this circuit was performed at night
and scheduled for non -game days.
J. Lonneker informed the Board that the Utility is hosting events
on Thursday, Oct. 11t` at the Downtown Farmer's Market in
celebration of Public Power Week. Approximately 160 students
will be hosted to learn about how electricity is delivered to their
house and about safety around power lines. The students will
participate in a scavenger hunt and enjoy bucket truck rides. The
public is invited that day from 12 noon to 3pm where there will be
information booths about the many rebates and programs available
to help save energy and save money. Free emergency kits will be
available while supplies last.
J. Lonneker shared with the Board a video of the 1'� 2nd, and 3rd
place winners who this past summer developed a public service
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J. Showalter moved
approval of Department
Orders 310 and 509. R.
Nelson seconded the motion.
MOTION CARRIED: 4-0.
ABSTAINED: 0.
ABSENT: 3 (E. Medrano,
V. Baroldi, V. Ramirez).
announcement promoting Mylar balloon safety and associated
risks of improper handling. Anaheim Public Utilities (Utilities)
had an opportunity to collaborate with Anaheim Union School
District who offer a Summer Film Academy at Katella High
School and asked students to develop real-world experience video
content. Utilities sponsored the contest and, of the 15 videos
submitted, four received an award.
9. UPDATE ON WATER SYSTEM ISSUES.
M. Moore, Assistant General Manager — Water, provided an
update on the water supply dashboard. During the summer
months, the Department has drawn down stored water in both the
groundwater basin and imported water reservoirs. Lake Mead is
the region's largest imported water reservoir and is nearing a low
level trigger that may impact Anaheim's water supply in
2020. Staff is carefully watching these levels and is coordinating
with regional agencies to develop mitigation strategies.
A group of Anaheim customers, Board members, and employees
participated in the Metropolitan Water District (MWD) tour of the
State Water Project on September '7 t' - 9h. The tour included a
visit of the dam repairs at the Oroville Reservoir and San Luis
Reservoir, an MWD water treatment plant.
The Walnut Canyon Reservoir levels are near the target low level
to begin the replacement of the intake valves. This project is part
of the Lenain Water Treatment Plant upgrade project. The
treatment plant will be taken out of service for about six months as
part of the two year upgrade project. Four groundwater wells
recently went offline due to mechanical and well casing
failures. Water staff have been working to get the wells online
prior to the Lenain shutdown. Staff anticipates two of the wells
will be placed online by mid-October.
10. UPDATE ON FINANCE ISSUES.
B. Beelner, Assistant General Manager — Finance and
Administration, discussed the monthly dashboard with the Board.
He indicated that the electric revenue for the Fiscal Year to Date
August 31, 2018 was 8.2% above budget ($6.9M) with electric
costs coming in above budget as well by 11.3% ($7.6M) causing a
net negative budget variance of $0.7M. Electric costs have trended
higher due to higher than expected wholesale power costs driven
by higher natural gas prices. He then mentioned that the Year to
Date August 31, 2018 water revenue was 2.4% ($0.4M) below
budget, however costs for the year were 5.1% below budget
($0.6M) causing a positive net budget variance of $0.2M budget.
B. Beelner then discussed the higher than anticipated call volumes
to the Call Center. Due to the extreme heat waves in July and
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August, customer bills are higher than normal causing more
customers to call in to discuss options for bill payments and
extensions. The Department will rearrange staffing levels so more
Call Center representatives will be on the available during the peak
call times.
Finally, B. Beelner discussed the recent action taken by the Federal
Reserve Board to increase short term interest rates by 0.25%. He
discussed the de minimis impact this move will have on the
Department's debt portfolio as over 90% of the Department's
bonds have fixed interest rates. However, the increase in short
term interest rates will increase the Department's interest income it
receives from its cash reserves, which means that the action taken
is a net positive to the Department.
11. UPDATE ON POWER SUPPLY ISSUES.
G. Bowen informed the Board that temperatures remained high in
August, and that the load this past month was the highest observed
since August 2012. G. Bowen also explained that warmer
temperatures coupled with higher gas prices due to gas pipeline
outages contributed to lower than forecasted wholesale sales.
Lastly, G. Bowen updated the Board about the Kraemer Power
Plant facility, making them aware that the facility was placed back
in service on September 10, 2018 and has since been dispatched
every day by the California Independent System Operator
(CAISO).
12. UPDATE ON ENTERPRISE RISK AND COMPLIANCE.
J. Lehman, Chief Risk Officer, discussed an accident that occurred
in October 2016 in which two employees were injured by an arc
flash. J. Lehman mentioned that CalOSHA investigated and issued
violations related to the accident. She made the Board aware that
the employees are back to work and a CalOSHA pre-trial
settlement offer was accepted this month. J. Lehman indicated that
the settlement reduced the penalties by a little over 40%, from
approximately $45,000 to just over $26,000, and added that the
Department's safety staff will continue to review the incident and
share the lessons learned with all employees in an effort to increase
safety awareness.
J. Lehman then invited the Board's attention to the Wholesale
Energy Risk Management (ERM) Program's Quarterly
Compliance report. J. Lehman indicated that all transactions were
within the Authorized Transaction Limits during this period, and
went on to add that in June the Department received a total of
$2,500 in penalties from CAISO related to late submissions of
forecasts for five generation units, which were discussed with the
Board at a previous meeting. J. Lehman mentioned that the
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processes for these submittals had been revised to prevent this
from reoccurring. J. Lehman then shared that the ERM Program
provides an efficient framework to allow staff to conduct timely
transactions while ensuring that the Department's interests are
protected and risks are minimized.
13. ITEM(S) BY SECRETARY.
D. Lee requested that A. Kott, Assistant City Attorney, explain a
recent determination by the California Supreme Court related to
the City of Redding's general fund transfer.
D. Lee provided an update on small.business customer who
addressed City Council about a number of issues at her business
and requested assistance in mitigate safety concerns. Department
staff met with her and provided both exterior light upgrades as well
as interior lighting installations as part of the small business
efficiency program.
D. Lee also updated the Board that Department staff is hosting
students from Katella High School as part of a partnership with the
Anaheim Union High School District's mentoring program. This
is the fourth year the Department is participating, and the students
toured several facilities in their first session.
D. Lee informed the Board that items scheduled for the following
Board meeting include:
• Electric Reliability Presentation
• Transportation Electrification Plan
• Electric Cost of Service Study
14. ITEM(S) BY BOARD MEMBERS.
J. Showalter thanked staff for showing their support for the grand
opening of an appliance store in Anaheim, and providing
information on appliance rebates.
R. Nelson requested that the Department look into lighting issues
on Broadway between Manchester and Citron that were brought to
his attention by the promotor of the Anaheim Fall Festival.
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15. ADJOURNMENT: (REGULAR MEETING ON OCTOBER
24, 2018, AT 5:00 P.M., IN THE Ill FLOOR LARGE
CONFERENCE ROOM, ANAHEIM WEST TOWER, 201 S.
ANAHEIM BOULEVARD, ANAHEIM, CALIFORNIA).
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Dukku Lee
Public Utilities General Manager
J. Seymour moved approval
to adjourn the Regular
Meeting at 7:07 p.m., to the
Board's Regular Meeting
date of October 24, 2018 at
5:00 p.m. J. Showalter
seconded the motion.
MOTION CARRIED: 4-0.
ABSTAINED: 0.
ABSENT: 3 (E. Medrano,
V. Baroldi, V. Ramirez).
* 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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