Public Utilities 2019/11/20CITY OF ANAHEIM
PUBLIC UTILITIES BOARD
MINUTES
November 20, 2019
The agenda, including the Teleconference Notice, having been posted on Thursday, November 14, 2019,
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, November 20, 2019, in the I Ph Floor Large Conference Room,
Anaheim West Tower, 201 S. Anaheim Blvd., Anaheim, California.
Board Members Present: Vice -Chairperson J. Seymour, V. Baroldi, A. Abdulrahman, R. Bhalla,
R. Gaona, J. Showalter (Teleconference)
Board Members Absent: Chairperson E. Medrano
City Staff Present: D. Lee, B. Beelner, G. Bowen, M. Moore, J. Lonneker, J. Lehman,
A. Kott, L. Quiambao, P. Oviedo, M. Seifen, M. Friebert, E. Krause,
D. Castro, S. Noble, A. Markis, R. Hoffard, S. Smith, L. Estrada
Guest(s) Present: None.
AGENDA ITEM ACTION TAKEN
PUBLIC COMMENTS. There being no public
comments in both locations,
Vice -Chairperson J.
Seymour closed the public
comments portion of the
meeting.
1. APPROVAL OF THE MINUTES OF THE PUBLIC V. Baroldi moved approval
UTILITIES BOARD REGULAR MEETING OF OCTOBER of the Minutes of the Public
23, 2019. * Utilities Board Regular
Meeting of October 23,
2019. R. Bhalla seconded
the motion.
MOTION CARRIED: 6-0.
ABSTAINED: 0.
ABSENT: 1 [E. Medrano].
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2. ADOPT THE PROPOSED PUBLIC UTILITIES BOARD
REGULAR MEETING SCHEDULE FOR THE 2020
CALENDAR YEAR, * *
3. PRESENTATION: CROSS CONNECTION CONTROL
PROGRAM.
Marry Friebert, Cross Connection Control Specialist II, provided a
presentation on the water Cross Connection Control
Program. Anaheim Public Utilities (APU) ensures that over 10,000
customer backflow devices are tested each year and are in good
working condition. The backflow prevention devices isolate onsite
industrial water systems from potential contamination entering the
public water system.
Daisylyn Castro, Cross Connection Control Specialist II, and M.
Friebert were recognized for their upcoming retirements. D. Castro
will retire with 29 years of service and M. Friebert is retiring with
7 years of service and commitment to APU.
4. PRESENTATION: KRAEMER POWER PLANT UPDATE.
Elden Krause, Principal Integrated Resources Planner, provided
the Board with an update on the Kraemer Power Plant (Kraemer).
Previously, a 10 -year ramp down plan was discussed with the
Board; however, E. Krause indicated that new developments with
the gas turbine engine oil supply line to one of its bearings and the
only authorized repair facility ending support for the engine in
2022 resulted in a comprehensive review of alternative options for
Kraemer. Without authorized support for future repair work, there
would be financial risks associated with continuing operations and
investing in repair work and additional emissions equipment. The
updated plan is to have Kraemer cease operations permanently at
the end of 2019, and staff will evaluate other options including
energy storage at the site. Energy storage is expected to continue
to become more cost effective over time, and future plans will be
presented to the Board at a later date.
The Board asked about the potential resale of the equipment at
Kraemer, and staff responded that decommissioning would include
such aspects to maximize the value of the existing equipment.
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V. Baroldi moved approval
of the proposed Public
Utilities Board Regular
Meeting schedule for the
2020 calendar year. A.
Abdulrahman seconded the
motion.
MOTION CARRIED: 6-0.
ABSTAINED: 0.
ABSENT: 1 [E. Medrano].
5. SET PUBLIC HEARING DATE, TIME AND LOCATION TO
V. Baroldi moved approval
CONSIDER PROPOSED MODIFICATIONS TO THE
of Setting the Public
WATER AND ELECTRIC RATES, RULESAND
Hearing date, time and
REGULATIONS. **
location to consider
ONE-YEAR EXTENSIONS IN AN ANNUAL AMOUNT OF
proposed modifications to
Brian Beelner, Assistant General Manager — Finance and
the Water and Electric
Administration, discussed the need for changes to various water
Rates, Rules and
and electric rates to recover costs of service as mandated by the
Regulations. R. Bhalla
Anaheim City Charter. The City Charter establishes that the
seconded the motion.
Public Utilities Board conducts all APU related public hearings
MOTION CARRIED: 6-0.
and, in order to comply with the California Constitution, APU
ABSTAINED: 0
must send out a notice to all property owners 45 days prior to the
ABSENT: 1 [E. Medrano].
hearing. B. Beelner discussed that water supply costs will increase
due to changes in APU's water supply mix. He also described
electric changes to the Net Energy Metering and Thermal Energy
Storage rate schedules to better align with current market pricing.
He also explained that a new water discount for income qualified
residents would be included as part of the proposal to help offset
the potential water rate adjustments.
The Board then asked questions regarding APU's water supply and
potential solutions to remedy the issue with emerging regulations.
Staff responded that their primary emphasis is to ensure that safe
drinking water continues to be provided to Anaheim customers.
The Board asked to improve the overall communications plan
regarding the justification for associated rate adjustments, and staff
stated that a more thorough presentation will be provided next
month.
6. APPROVAL OF AN AGREEMENT FOR APPLIANCE
R. Bhalla moved approval of
RECYCLING AND INCOME QUALIFIED APPLIANCE
the Agreement with ARCA
REPLACEMENT SERVICES WITH ARCA RECYCLING,
Recycling Inc. for appliance
INC. FOR A TERM OF FIVE YEARS WITH UP TO TWO
recycling and income
ONE-YEAR EXTENSIONS IN AN ANNUAL AMOUNT OF
qualified appliance
$100,000 AND A TEN PERCENT (10%) CONTINGENCY. *
replacement services. R.
Gaona seconded the motion.
Graham Bowen, Assistant General Manager — Power Supply,
MOTION CARRIED: 6-0.
provided the Board with an overview of the Agreement with
ABSTAINED: 0.
ARCA Recycling Inc. for appliance recycling for all Anaheim
ABSENT: 1 [E. Medrano].
residents and an appliance replacement program for income -
qualified residents.
G. Bowen explained that the Agreement would be a 5 -year term
with two one-year extensions in an amount not to exceed $100,000
annually. G. Bowen also indicated that residents would receive a
$50 Rebate for recycling their freezer or refrigerator and that APU
is expected to recycle approximately 500 refrigerators annually.
He explained that income -qualified residents may also eligible to
receive an appliance replacements to help lower their energy bills
as part of the APU's Weatherization Program with Southern
California Gas Company.
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7. APPROVAL OF AN AMENDMENT TO A SERVICES
AGREEMENT WITH ZGLOBAL, INC. DATED NOVEMBER
18, 2014 TO PROVIDE ADDITIONAL POWER
SCHEDULING SERVICES TO ANAHEIM PUBLIC
UTILITIES (APU) AND INCREASING THE CONTRACT
AMOUNT FROM $243,576 TO $318,756 PER YEAR *
G. Bowen provided some historical background on real-time
scheduling explaining that the California Independent System
Operator (CAISO) provides the majority of the power Anaheim
customers use today. He made the Board aware that the current
vendor, ZGlobal provides real-time power scheduling services for
APU on the weekends, weekday evenings, and on holidays and the
amendment would add the balance of weekday hours for an
additional $75,000 per year. Additionally, these changes would
provide the opportunity for APU to focus internal resources on
planning for the Day -Ahead market, where 98% of all energy
transactions take place versus approximately 2% in the real-time
market. Lastly, G. Bowen indicated that APU would seek to issue
a solicitation for power scheduling services and an energy trading
software solution within the next three years.
8. APPROVAL OF A THIRD AMENDMENT TO A LICENSE
AGREEMENT DATED DECEMBER 14, 2004 WITH
ANAHEIM PALMS TELECOM CENTER, LLC AND LIVING
STREAM, INC. TO PROVIDE THE CITY OF ANAHEIM
WITH FIBER OPTIC ACCESS FOR AN ADDITIONAL
FIFTEEN (15) YEARS AND AN ANNUAL LICENSE FEE OF
$4,016.00 WITH AN ESCALATION OF 3% PER YEAR *
Janet Lonneker, Assistant General Manager — Electric Services,
provided the Board with information concerning the third
amendment to the License Agreement between the City of
Anaheim and the Anaheim Palms Telecom Center, LLC and
Living Stream, Inc. collectively referred to as APTC, for continued
access to host APU fiber optic network equipment and provide
backhaul high speed broadband connectivity to the APU fiber optic
system which APU owns and maintains. This fiber optic network
provides broadband service for APU operations, other municipal
facilities, and APU leases excess fiber capacity to businesses in
Anaheim. This Third Amendment will extend the original License
Agreement approved by Council in 2004, for up to an additional 15
years, at an annual license fee of $4,016.00 with an escalation of
3% per year. The license fee is offset by APU's anticipated
revenue from leasing excess capacity, which is estimated at
$180,000 for the 2019-2020 fiscal year.
9. UPDATE ON ELECTRIC SYSTEM ISSUES.
J. Lonneker, updated the Board regarding the Harbor Substation
dedication. Students from the Ponderosa Elementary School led
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A. Abdulrahman moved
approval of an Amendment
to a Services Agreement
with ZGlobal Inc. to provide
additional scheduling
services. R. Gaona
seconded the motion.
MOTION CARRIED: 6-0.
ABSTAINED: 0.
ABSENT: 1 [E. Medrano].
R. Gaona moved approval of
a Third Amendment to a
License Agreement dated
December 14, 2004 with
Anaheim Palms Telecom
Center, LLC and Living
Stream, Inc. to provide fiber
optic access. V. Baroldi
seconded the motion.
MOTION CARRIED: 6-0.
ABSTAINED: 0.
ABSENT: 1 [E. Medrano].
the pledge of allegiance and presented their writing on electric
safety and the purpose of a substation. After the guest speakers,
there was a ribbon cutting ceremony with an electric light switch
symbolizing the energizing of the substation flipped on by the
students. The neighboring businesses attended and were thanked
for their support of the project during construction.
10. UPDATE ON WATER SYSTEM ISSUES.
M. Moore reviewed the monthly water supply dashboard. There
has been minimal rain so far this year. Water reservoir levels are
still in good shape and rain is anticipated later in November.
The OCWD Board is considering a policy to reimburse Anaheim
and other Producers for a portion of the capital cost to build a
treatment plant to remove PFOS. APU has begun planning to
construct treatment plants to restore groundwater production.
MWD has selected two Anaheim student's artwork in their "Water
is Life" contest. The students will be recognized in a ceremony at
MWD on December 11, 2019. PUB members should contact
Peggi Oviedo if they are interested in attending.
A workshop was held for Anaheim customers that have industrial
water uses to learn how to maintain good water quality and reduce
the risk of Legionella in their equipment. Approximately 35
attendees participated in the workshop.
11. UPDATE ON FINANCE ISSUES.
B. Beelner, discussed the monthly dashboard with the Board. The
year to date electric revenue through October 31, 2019 was 5.0%
below budget ($8.5M) due primarily to a temperate summer
causing low retail demand coupled with lower than expected
wholesale revenue driven by lower than expected wholesale prices.
Costs for the fiscal year fell below budget by 5.2% ($7.OM) also
due to lower than expected demand lower than expected wholesale
power prices causing a negative net budget variance of $1.5M. B.
Beelner then mentioned that year to date water revenue was 3.9%
($1.3M) below budget due to weaker than anticipated customer
demand as a result of the temperate summer costs were below
budget as well by 2.5% (0.7M) causing a positive negative net
$0.6M budget variance.
12. UPDATE ON POWER SUPPLY ISSUES.
G. Bowen, indicated that there have been several outages in
October causing a reduction in availability for Intermountain
Power Plant due to a steam tube leak and Magnolia Power Plant
due to a transmission derate. G. Bowen also mentioned that
renewable production from the Ridgewood landfill gas facility had
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been lower than anticipated as a result of turbine blade fouling that
caused low quality biogas being ingested through the engine
resulting in a loss of 3 -gigawatts of energy. He also stated that
overall for the month of October, the power supply portfolio
performed similarly to the previous month of September.
13. UPDATE ON ENTERPRISE RISK AND COMPLIANCE.
Janis Lehman, Chief Risk Officer, invited the Board's attention to
the 2019 Legislative Wrap Up Report which covers the first year
of the current two year legislative session. She indicated that it
had been an overall successful year as an alternative to the water
tax was passed saving Anaheim customers from funding other
water systems, and major wildfire legislation was passed that did
not force participation in a statewide recovery fund supported by
an on-going customer surcharge.
However, J. Lehman indicated that there were new laws enacted
that will place additional requirements on APU including
additional water quality monitoring and reporting in regard to the
per- and polyfluroalkls substances, and that APU's Wildfire
Mitigation Plan must be submitted to the state's new Wildfire
Advisory Board.
J. Lehman thanked the Board's Legislative Working Group for
their time and efforts in helping better ensure that our customers'
needs are identified and addressed as part of APU's advocacy
efforts.
14. ITEM(S) BY SECRETARY.
D. Lee shared with the Board the items scheduled for the following
Board meeting include:
• Presentation on Water and Electric Rate and Rule Proposals
• Transportation Electrification Annual Update
• Electric and Water Utility Bond Issuances
• Authorization to Participate in the Statewide Clean Fuel
Reward (CFR) Program
• Agreement with the Metropolitan Water District of
Southern California and Municipal Water District of
Orange County for In -Lieu Treated Water Deliveries
• Biomass Agreement to comply with Senate Bill 859
• Substation Transformer Engineering Services and Test
Equipment Lease
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15. ITEM(S) BY BOARD MEMBERS.
R. Gaona thanked APU for their presence at the Veteran's Day
ceremony. R. Gaona would like the opportunity to represent the
Board at future Veteran events.
R. Bhalla asked about the small fires on the 91 freeway and
inquired if the cameras captured the images. J. Lonneker
explained how the wild fire cameras helped locate the fires and
were utilized by the Anaheim Fire & Rescue Department when
extinguishing them.
J. Showalter shared that, as a resident of Anaheim for over 30
years, she attended the Halloween Parade for the first time. She
suggested that APU have a presence in the future. D. Lee
mentioned that the parade route is now lit by LED street lights.
J. Seymour and V. Baroldi thanked staff for the binders provided
to the Board Members for the meeting.
16. ADJOURNMENT: (NEXT REGULAR MEETING ON
DECEMBER 18, 2019, AT 5:00 P.M., IN THE 111 FLOOR
LARGE CONFERENCE ROOM, ANAHEIM WEST TOWER,
201 S. ANAHEIM BOULEVARD, ANAHEIM, CALIFORNIA).
Dukku Lee
Public Utilities General Manager
V. Baroldi moved to adjourn
the Regular Meeting at 6:59
p.m., to the Board's Regular
Meeting date of December
18, 2019 at 5:00 p.m. R.
Bhalla seconded the motion.
MOTION CARRIED: 5-0.
ABSTAINED: 0.
ABSENT: 1 [E. Medrano].
* 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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