Public Utilities 2019/01/23CITY OF ANAHEIM
PUBLIC UTILITIES BOARD
MINUTES
JANUARY 23, 2019
The agenda having been posted on Thursday, January 17, 2019, the Regular Meeting of the Public
Utilities Board (Board) was called to order by Chairperson E. Medrano at 5:00 p.m. on Wednesday,
January 23,2019, in the 11 th Floor Large Conference Room, Anaheim West Tower, 201 S. Anaheim
Blvd., Anaheim, California.
Board Members Present: Chairperson E. Medrano, Vice-Chairperson J. Seymour, A. Abdu1rahman,
R. Nelson, J. Showalter
Board Members Absent: V. Ramirez, V. Baroldi
City Staff Present: D. Lee, L. Quiambao, M. Moore, B. Bee1ner, A. Kott, G. Bowen,
J. Lehman, P. Oviedo, J. Lonneker, M. Seifen, P. Bogdanoff,
J. McBride
Guest(s) Present: None
AGENDA ITEM
1. PUBLIC COMMENTS.
2. APPROVAL OF THE MINUTES OF THE PUBLIC
UTILITIES BOARD MEETING OF DECEMBER 19, 2018. *
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ACTION TAKEN
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 Public
Utilities Board Meeting of
December 19,2018. A.
Abdulrahman seconded the
motion.
MOTION CARRIED: 5-0.
ABSTAINED: O.
ABSENT: 2 [V. Ramirez,
V. Baroldi].
3. PRESENTATION: COLORADO RIVER DROUGHT
CONTINGENCY PLAN.
P. Bogdanoff, Engineering Manager, provided a presentation on
the Colorado River Drought Contingency Plan (DCP). P.
Bogdanoff discussed the history of the Lower Colorado River
Basin, current water supply conditions, and the impacts to storage
levels in Lake Mead. He provided an overview of the proposed
DCP, which is currently in development. In the short term, the
DCP is focused on avoiding shortages by implementing controlled
cutbacks and modifying storage programs. P. Bogdanoff
mentioned the Metropolitan Water District (MWD) has approved
their participation in the DCP. However, all states and agencies
need to approve the DCP for the Plan to move forward.
The Board inquired about how regional supplies, including the
Colorado River affects Anaheim. M. Moore responded that of the
25% that the Public Utilities Department (Department) imports
from MWD, approximately half comes from the State Water
Project, and the remaining half from the Colorado River, which is
different than southern Orange County agencies who rely almost
exclusively on imported water.
4. PRESENTATION: UTILITY RATE AND RULE
INITIATIVES.
J. McBride, Strategic Planning Manager, discussed the upcoming
rate and rule initiatives that would reduce reliance on debt,
equitably recover the Department's costs to serve customers in a
timely manner, and maintain modest reserves.
J. McBride discussed the Department's proposed Water
Commodity Adjustment (WCA) and Water System Reliability
Adjustment (WSRA) rate adjustments. He explained that the
proposed WCA adjustment would recover the increasing costs
billed by wholesale water suppliers who have increased their rates
that are billed to the Department and other water agencies in the
area. J. McBride explained that the proposed WSRA adjustment
would pay for capital improvements, including the replacement of
aged water main pipes. The WSRA increase will also help reduce
the amount of new debt by allowing the Department to pay for
more of its capital investments on a cash basis.
J. McBride explained that the Department is proposing to establish
a restricted water capital reserves account. The water capital
reserves account is intended to (1) provide a funding mechanism
which is independent of the debt market that will give the
Department more flexibility on how it funds large water capital
investments, (2) absorb uneven capital expenditures while
maintaining stable rates, and (3) provide a reliable source of
funding to help pay for system repairs in the event of major
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damage to the water distribution system. J. McBride explained
that funds in the capital reserves account would be used only for
capital improvements and will not be used for day-to-day operation
or labor costs.
J. McBride also explained that the Power Cost Adjustment (PCA)
component of electric rates would increase by $0.005 per kilowatt-
hour (kWh) effective February 1,2019. J. McBride explained that
the ~ cent per kWh increase would recover a portion of the
Department's operating costs for complying with evolving
regulatory requirements, integrating new technologies that enhance
operating performance and reliability, and keeping pace with the
cost of increasing renewable mandates. J. McBride explained that
the peA rate component would result in a $1.00 per month
increase for a residential customer who consumes 500 kWh of
energy per month. The amount could be more or less, depending
on an individual customer's level of energy consumption.
J. McBride explained how residential time-of-use (TOU) rates
work and discussed the Department's proposal to add a new
optional TOU rate for residential customers. J. McBride explained
that peak energy demand is shifting from early afternoon hours to
early evening hours due to the abundance of solar energy generated
that is not available during the early evening hours. The new
optional residential TOU rate will align peak rate TOU periods
with peak demand time periods.
The Department is proposing two rule modifications that improve
customer service. The first is to provide a bill credit to customers
who experience an unplanned electrical outage that lasts more than
eight hours and is due to Department-owned equipment. The bill
credit will be 50% of the non-time-related demand charge (for
customers who are billed a demand charge) or $50, whichever is
greater, and will be available to all affected customers. The second
is reduce the amount of time that the Department can back bill a
customer due to billing errors that resulted in an under charge for
electricity or water usage from 12 months to 4 months.
Additionally, the Department will propose rule modifications to
make the Solar for Schools Program available to more customers
and replace the complex credit calculation currently in place with a
flat $10 per month bill credit. A listing of income qualified
programs will be consolidated into a single rule.
J. McBride then discussed proposed water and electric rule
modifications that help public and private schools (grades K-12)
implement water and electric upgrades. The proposed rule
modifications will enable the Department to provide upfront
funding assistance for those upgrades and schools will reimburse
the cost of the upgrades over time as a line item component on
their utility bills that includes the nominal cost of borrowing.
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J. McBride concluded by stating that water and electric rate
hearings are scheduled for March 27, 2019 at 5:00 p.m. in the
Anaheim West Tower, Second Floor, Gordon Hoyt Conference
Center.
The Board asked how staff intends to infonn customers about the
new residential TOU rate option. Staff explained that in addition
to a mailer to all residents and property owners, the Department
plans to utilize bill inserts and the Anaheim Magazine to make
customers aware of the new rate option.
The Board asked who sets the maximum limit for WSRA rate
changes. Staff explained that the WSRA rate schedule establishes
a maximum 7~-cent increase per hundred cubic feet of water per
year. D. Lee noted that the 7~-cent increase limit is to help ensure
that customers are not subject to large WSRA rate increases.
5. APPROVE THE USE OF NECESSARY TRANSMISSION
SERVICE AGREEMENTS (TRANSMISSION
AGREEMENTS) WITH ARIZONA PUBLIC SERVICE
COMPANY, LOS ANGELES DEPARTMENT OF WATER
AND POWER, PUBLIC SERVICE COMPANY OF NEW
MEXICO, SALT RIVER PROJECT AGRICULTURAL
IMPROVEMENT AND POWER DISTRICT, TUCSON
ELECTRIC POWER COMPANY, WESTERN AREA POWER
ADMINISTRATION LOWER COLORADO, COLORADO
RIVER STORAGE PROJECT, IMPERIAL IRRIGATION
DISTRICT, NEVADA POWER COMPANY (AKA NV
ENERGY), PACIFICORP, PUBLIC SERVICE COLORADO,
ARIZONA ELECTRIC POWER COOPERATIVE, INC.
(FORMERLY KNOWN AS SOUTHWEST TRANSMISSION
COOPERATIVE AND SOUTHWEST TRANS CO), TRI-
STATE GENERATION & TRANSMISSION ASSOCIATION,
BONNEVILLE POWER ADMINISTRATION, AND IDAHO
POWER COMPANY, OR THEIR SUCCESSORS, WITH
FEDERAL ENERGY REGULATORY COMMISSION
(FERC) APPROVED OPEN ACCESS TRANSMISSION
TARIFFS (OATT) FOR NOT MORE THAN 300
MEGAWATTS (MW) FOR A CUMULATIVE PERIOD NOT
TO EXCEED TEN (10) YEARS PROVIDED, THE CITY OF
ANAHEIM (ANAHEIM) REQUIRES THESE AGREEMENTS
FOR OUTAGES, LOSS OF TRANSMISSION OR
OPERATIONAL NEEDS. *
G. Bowen, Assistant General Manager -Power Supply, shared that
the Department contracts with many resource providers throughout
the western United States to supply power to its customers and that
most of these contracts have transmission needs associated with
them, in order to bring the energy into Anaheim. However, there
are occasions where the existing transmission lines may be out of
service which requires the Department to find another source of
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A. Abdulrahman moved
approval of the use of
necessary Transmission
Service Agreements with
identified companies. R.
Nelson seconded the motion.
MOTION CARRIED: 5-0.
ABSTAINED: O.
ABSENT: 2 [V. Ramirez,
V. Baroldi).
transmission to bring in its resources. In those instances, the
Department utilizes standardized transmission contracts called
Open Access Transmission Tariffs (OATT) or transmission service
agreements.
G. Bowen indicated that the transmission service agreements
allows the Department to re-route energy in the event of a
transmission failure due to wildfires or mechanical failures such as
transformer failures. G. Bowen made the Board aware that by
entering into these transmission service agreements, the
Department is not committed to buying or selling energy or
transmission capacity; it simply allows the Department to purchase
transmission service on an as-needed basis.
6. DISCUSSION: QUARTERLY STATUS REPORTS ON
CAPITAL IMPROVEMENT PROJECTS, MASTER
AGREEMENTS, GENERAL SERVICES AGREEMENTS,
AND SPOT BID AWARDS.
D. Lee provided an overview of the two quarterly reports that
provide detailed information on locations of capital projects, and
individual transactions for master construction, general service
consulting, and spot bid material awards. J. Lonneker stated that
staff is developing a dashboard to help simplify the quarterly
reports.
7. UPDATE ON ELECTRIC SYSTEM ISSUES.
J. Lonneker, Assistant General Manger -Electric Services,
mentioned that the National Association of Music Merchants
(NAMM) Convention will be taking place at the Anaheim
Convention Center beginning Thursday, January 24th, through
Sunday, January 27 th • J. Lonneker made the Board aware of the
Department's electrical circuits, which provide service to the
Convention Center, have the capability to automatically transfer
energy to emergency circuits within seconds should there be a
power outage on a preferred circuit. She noted that the electrical
equipment serving the Convention Center was recently tested and
that the Department does not perform regular planned maintenance
work affecting the circuits feeding the Convention Center
throughout the duration of the NAMM convention.
J. Lonneker shared pictures of the new decorative vinyl wrapping
used on the Department's high voltage electrical cabinets which is
the preferred method for graffiti deterrence. J. Lonneker explained
that graffiti paint does not adhere well to the vinyl wrap material
and therefore is easier to clean with less ongoing maintenance as
compared to artificial ivy, the alternate method being used. J.
Lonneker described the different vinyl wrap designs, which
resemble landscape plants or block walls, and are picked to
camouflage the surrounding location of the high voltage
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equipment. Lastly, J. Lonneker indicated that the Department
would continue to maintain the existing artificial ivy installations,
and use the preferred vinyl wrap where multiple instances of
graffiti are reported, or as a replacement for damaged artificial ivy
going forward.
8. UPDATE ON WATER SYSTEM ISSUES.
M. Moore, Assistant General Manager -Water Services, discussed
the water supply dashboard with the Board. M. Moore noted local
rainfall is looking to be above average for the year and that much
oflast week's rainfall was captured behind Prado Dam. M. Moore
indicated that the water is being released slowly to recharge the
groundwater basin through the Anaheim Lakes. M. Moore
mentioned that water storage levels for imported water supplies
continue to decline in comparison with last year.
M. Moore mentioned that the Metropolitan Water District (MWD)
released their annual report, "Water Tomorrow", which describes
MWD's efforts to improve local water supplies and conservation.
The report describes changes to MWD's conservation program that
are reducing water demands through water efficient fixtures.
Lastly, M. Moore indicated that the Department regularly seeks
grants from the State of California to offset the cost of capital
improvement projects. He reported that the Department received a
grant for $581,366 for the recycled water extension project at
Pearson Park. M. Moore noted that the Department was awarded
the funds due to Proposition 1, which funds recycled water
projects.
9. UPDATE ON FINANCE ISSUES.
B. Beelner, Assistant General Manager -Finance and
Administration, discussed the monthly dashboards with the Board
that indicated that electric revenue for the Fiscal Year to Date
December 31,2018 was 7.0% above budget ($16.4M) with electric
costs coming in above budget as well by 3.3% ($6.5M) causing a
net positive budget variance of$9.9M. Electric revenue and costs
have both trended higher due to higher than expected wholesale
power revenue and wholesale power costs driven by higher natural
gas prices. B. Beelner then mentioned that the Year to Date
December 31, 2018 water revenue was 1.6% ($0.7M) below
budget, however since water costs were under budget by 7.7%
($2.8M) the Department experienced a net positive budget
variance of$2.1M.
B. Beelner then made the Board aware of the upcoming location
move for the Department's Call Center, which is currently located
on the first floor of Anaheim West Tower and will be moving to
the ninth floor on March 14th. B. Beelner mentioned that this
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move would give the Department greater use of first floor space
for customer engagement with a "one-stop shop" approach
allowing the Department to serve most customer and constituent
needs in a single location as opposed to having customer counters
on multiple floors of Anaheim West Tower. B. Beelner then
shared with the Board that the installation of the new customer
service phone system would take place on March 21 st, one week
after the Call Center's move to the ninth floor.
10. UPDATE ON POWER SUPPLY ISSUES.
G. Bowen provided the Board with an update on the Department's
power resources highlighting that generation was well above the
forecasted levels for the month of December allowing the
Department to recover most of the wholesale energy losses from
the previous summer months. G. Bowen indicated that Southern
California Gas Company's major gas pipelines have undergone
maintenance resulting in four pipelines being back at full capacity,
two of the pipelines have been de-rated while testing is being
conducted, and the last line is still undergoing maintenance with no
estimated time of repair being provided. G. Bowen noted that in
the following months the Department would continue to see higher
levels of generation as a result of the gas line outages in the area
pushing energy prices up.
11. UPDATE ON ENTERPRISE RISK AND COMPLIANCE.
J. Lehman, Chief Risk Officer, first !iiscussed the Department's
Internal Compliance Report. She highlighted that there were
minor exceedances of the air quality permit requirements at the
Power Plants due to equipment failures. The incidents were self-
reported and the issues corrected, and no violations are expected.
J. Lehman then provided the Board with a brieflegislative update,
highlighting that there would likely be another attempt at a water
tax very similar to the one last year as the Governor has a
placeholder fund for it in his budget. She stated that a major focus
of the legislature this year would likely be issues related to the
recent wildfires.
12. ITEM(S) BY SECRETARY.
D. Lee shared with the Board the items scheduled for the following
Board meeting include:
• Recognition of IBEW Volunteers
• Presentation on Solid Dielectric Switches
• Annual SCPP A Expenditures Update
• Consulting Agreement for Energy Storage
• Internship Program with CSU Fullerton
2019 -7
D. Lee reported that board and commission appointments were
discussed at the January 15 th City Council meeting. The process
was amended to require an appointment by a Council member,
which needs to be approved by a majority ofthe Council. The
Ordinance was introduced and is up for adoption on January 29th •
D. Lee reported that he and J. Lehman will be meeting with state
representatives on February 4th as part of a contingent of utilities to
discuss potential legislation and impacts on utility bills.
D. Lee requested that the meeting be closed in the memory of Mr.
Rick Gomez, Utilities Field Services Supervisor, who passed away
due to an illness. R. Gomez was a 24+ year employee who
supervised 30 meter readers, field service representatives, and
revenue protection staff.
13. ITEM(S) BY BOARD MEMBERS.
The Board did not have any items to report.
14. ADJOURNMENT IN MEMORY OF RICK GOMEZ, TO THE
REGULAR MEETING ON FEBRUARY 27, 2019, AT 5:00
P.M., IN THE 11TH FLOOR LARGE CONFERENCE ROOM,
ANAHEIM WEST TOWER, 201 S. ANAHEIM BOULEVARD,
ANAHEIM, CALIFORNIA.
E. Medrano called for a minute of silence, followed by a call for a
motion to adjourn in Memory of Rick Gomez.
Dukku Lee
Public Utilities General Manager
J. Seymour moved approval
to adjourn the Regular
Meeting in Memory of Rick
Gomez at 6:50 p.m., to the
Board's Regular Meeting
date February 27,2019 at
5:00 p.m. A. Abdulrahman
seconded the motion.
MOTION CARRIED: 5-0.
ABSTAINED: O.
ABSENT: 2 [V. Ramirez,
V. Baroldi].
* Indicates item(s) that will be forwarded to City Council for action upon recommendation by the
Board.
** Indicates itern(s) that will be forwarded to City Clerk and City Council for informational purposes.
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