Public Utilities 2020/10/28ITEM # 03
2. PRESENTATION: POWER RESOURCE
TRANSFORMATION,1990 — 2020.
D. Lee, Public Utilities General Manager, gave a presentation
highlighting G. Bowen, Assistant General Manager — Power
Supply, accomplishments throughout his years of service for
Anaheim Public Utilities Department (APU).
D. Lee concluded by congratulating G. Bowen on his upcoming
retirement and presenting him with a plaque.
3. ADOPTION OF A RESOLUTION APPROVING A
REVOLVING CREDIT AGREEMENT WITH WELLS
FARGO BANK, NATIONAL ASSOCIATION, INCLUDING
THE EXECUTION, ISSUANCE, AND DELIVERY OF
ELECTRIC SYSTEM NOTES AND THE WATER SYSTEM
NOTES IN A MAXIMUM PRINCIPAL AMOUNT NOT TO
EXCEED $100 MILLION. *
B. Beelner, Assistant General Manager — Finance and
Administration, made a presentation regarding a three-year, $100
million Revolving Credit Agreement (Agreement) with Wells
Fargo Bank N.A. (Wells Fargo). B. Beelner discussed how APU
has used the current revolving agreement to bridge financing
options for capital investment, and how it has provided flexibility
for liquidity and cash reserves allowing APU to keep less cash on
hand with this Agreement providing the same functionality as
unrestricted reserves helping to support the AA- electric credit
rating.
The Agreement has an undrawn commitment fee of 0.30%, capped
at $300,000 annually, and the interest rate charged on amounts
drawn on the credit agreement will be 0.70% plus 80% of one
month the LIBOR benchmark that would equate to approximately
0.90%.
B. Beelner also informed the Board that although the pricing terms
of the Agreement are set and will not change, there could be minor
changes to the documents between the time of the Board's
recommendation and the City Council meeting where the
Agreement will be discussed; however, any such changes will be
with the concurrence of the City Attorney's Office.
4. QUARTERLY STATUS REPORTS ON CAPITAL
IMPROVEMENT PROJECTS, MASTER AGREEMENTS,
GENERAL SERVICES AGREEMENTS, AND SPOT BID
AWARDS.
D. Lee discussed the updates made to the Quarterly Status Reports
which show the new fiscal year, noting that spot bid purchases
have declined in recent years as standardized agreements are
V. Baroldi moved approval
of the Resolution approving
a Revolving Credit
Agreement with Wells
Fargo Bank, National
Association. R. Gaona
seconded the motion.
MOTION VIA ROLL
CALL VOTE CARRIED:
5-0.
ABSTAINED: 0.
ABSENT: 2 [J. Seymour &
J. Showalter].
2020 - 61
entered into through the City's Purchasing Division with approval
by City Council.
J. Lonneker, Assistant General Manager — Electric Services,
discussed the Quarterly Status Reports and Capital Improvement
Plan dashboard. J. Lonneker indicated that the expenditure levels
for Electric General Service Agreements and Construction
Agreements are approximately 25% of average annual levels as
expected. In addition, the actual expenditures for Capital
Improvement Projects in this fiscal year are also 25% of total
budgeted as expected in the first quarter.
M. Moore, Assistant General Manager — Water Services, made the
Board aware of the recent completion of the Lenain Water Project.
M. Moore then provided the Board with the status of several
projects including pipeline replacements and valve replacements.
5. UPDATE ON ELECTRIC SYSTEM ISSUES.
J. Lonneker displayed several pictures of the Blue Ridge and
Silverado fires captured from the wildfire cameras in Anaheim. J.
Lonneker reported to the Board that the fires did not affect the
electric system and that Anaheim Fire and Rescue along with
regional agencies utilized the cameras to monitor the fires. J.
Lonneker indicated that due to high winds several outages were
reported; she noted that service was restored to all customers and
that tree branches and other debris were removed from power
lines. The Board asked about the outage on Santa Ana Canyon
Road and if undergrounding will help reduce such interruptions in
the future. J. Lonneker confirmed that undergrounding this area
will help minimize future outages related to weather.
J. Lonneker made the Board aware the undergrounding project
along Euclid Avenue is complete. J. Lonneker also mentioned that
street paving was completed and the poles will be removed once
the communications providers have completed their
undergrounding. J. Lonneker noted that noise and traffic issues
were mitigated to address concerns by residents and businesses in
the area and she displayed photos of the project to the Board. The
Board commented that traffic control on Euclid was managed well
in comparison to other projects in the City.
6. UPDATE ON WATER SYSTEM ISSUES.
M. Moore provided an update of the Water Supply Dashboard. M.
Moore indicated that the region is one month into the new water
supply year and there has been no precipitation in the region.
Although storage levels in the local groundwater basin are high,
this will not help Anaheim because most wells have been shutoff
due to water quality regulations. M. Moore noted that Anaheim
will be relying on imported water and the imported water storage
levels are lower than average for this time of year.
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M. Moore mentioned that the Water field staff have been preparing
for wildfire season. Field crews have been inspecting and testing
fire hydrants in the fire risk areas, and water reservoirs are being
kept full during the wildfires to assist firefighters. M. Moore
shared pictures and a video of firefighting helicopters utilizing
Walnut Canyon Reservoir to fight the nearby Blue Ridge fire. He
explained that each helicopter can carry about 2,000 gallons of
water which equates to approximately $10 worth of water.
7. UPDATE ON FINANCE ISSUES.
B. Beelner discussed the monthly dashboard, and indicated that the
fiscal year to date electric revenue through September 30, 2020
was 0.6% above budget ($0.7M) due to higher than anticipated
wholesales to other utilities during the California Independent
System Operator's (CAISO) Stage 2 and Stage 3 emergencies.
Operating expenditures fell below budget by 2.7% ($2.5M) due to
savings from labor vacancies and cutbacks to various other
operating expenses causing a positive net budget variance of
$3.2M. B. Beelner then mentioned that year to date water revenue
was 6.5% ($1.8M) below budget due to weaker than anticipated
commercial/industrial demand related to the shelter in place orders.
Costs were below budget as well by 6.2% ($1.3M) causing a
negative net budget variance of $0.5M.
B. Beelner then discussed the current state of the financial markets
as they respond to the upcoming presidential election and the
continuing impacts of the COVID-19 pandemic.
The Board inquired about how customers are doing regarding late
payments. B. Beelner explained that a significant number are
behind in payments; however, customers are still working with
staff to make payment arrangements and that assistance is being
offered.
8. UPDATE ON POWER SUPPLY ISSUES.
G. Bowen provided an update on the Power Supply Portfolio for
September. He indicated that there were two minor outages in
September and that wholesale sales exceeded forecasts due to the
warmer weather. G. Bowen also provided photographs and an
update on the Canyon Power Plant Unit 4 repairs. He noted that
the unit, which was removed from its enclosure and was sent to
Bakersfield for repairs on October 131h, and returned to service on
October 23ra
G. Bowen provided the Board with an update on APU's facemask
student art competition. G. Bowen indicated given the COVID-19
pandemic that wearing facemasks was becoming part of everyday
life, APU wanted to use this as an opportunity to bring positive
messages to the community. G. Bowen mentioned that students in
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grades 1st - 8th were invited to participate in an art contest and
choose from one of the following themes: Anaheim's Sustainable
Future, Every Drop Counts, and Be Sustainable. G. Bowen
showed the winning artwork to the Board from Frida L. (51h Grade)
from Orange Grove Elementary, Yoltzin Q. (4th Grade) from
Thomas Edison Elementary, and Mark W. (8th Grade) from Prince
of Peace Lutheran.
Lastly, G. Bowen noted that, in recognition of National Drive
Electric Week (Sep 26 - Oct 4, 2020), APU wanted to help raise
awareness of the many benefits that Electric Vehicles (EV) have in
reducing greenhouse gas at the local level. EV owners were
invited to participate in APU's very first annual We Drive EVs
Video Contest. There were a total of 18 submissions with the top
three being selected for their message and overall creativity. G.
Bowen showed the winning videos to the Board from Anh Pham
(1st Place), Shane Pase (2nd Place), and David Hobday (3`d Place).
9. UPDATE ON ENTERPRISE RISK AND COMPLIANCE.
J. Lehman, Chief Risk Officer, provided an update on the
Wholesale Energy Risk Management (ERM) Program's Quarterly
Compliance report for the last quarter of FY 20. J. Lehman noted
that all wholesale energy transactions met the Program's
requirements and that there were no violations of the ERM during
this period. She then discussed the Internal Compliance Report
and highlighted that the annual water loss audit was submitted to
the California Department of Water Resources, and all appropriate
staff who interact with wholesale energy related transactions had
completed the annual anti -market manipulation training.
J. Lehman mentioned that the Board will be provided with the
annual Legislative wrap up report, which will also highlight
projections for the upcoming Legislative session based on the
national elections results.
Lastly, J. Lehman shared that the Electric Services Division had
received the National Safety Council's Industry Leader Safety
Award for excellent safety performance within their industry. This
year this recognition was awarded to 36 other companies across the
nation.
10. ITEM(S) BY SECRETARY.
D. Lee shared with the Board the items scheduled for the following
Board meeting include:
• Water Reliability Annual Report
• Underground Inspection Project
• Schedule Public Hearing Date
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D. Lee made the Board aware of three awards received from the
American Public Power Association (APPA) 2020 Excellence in
Public Power Communications Awards. They include (1) Award
of Excellence in Web & Social Media for the Clean Green
Community Webpage, (2) Award of Merit in Print & Digital for
the 2020 Greenhouse Gas Reduction Plan, and (3) Award of Merit
in Video for the Fraud Awareness Public Service Announcement.
Lastly, D. Lee informed the Board of a communication received by
Nor -Cal Beverage regarding APU's supply of water quality
information in a timely manner needed to secure a large contract.
APU staff worked closely with Nor-Cal's Environmental, Health
& Safety team and they were thankful for APU's responsiveness
and thoroughness.
11. ITEM(S) BY BOARD MEMBERS.
A. Abdulrahman thanked G. Bowen for all his hard work and for
making a difference in Anaheim and congratulated him on his
upcoming retirement.
R. Bhalla thanked G. Bowen for everything he has done for
Anaheim and wished him well on his retirement.
V. Baroldi thanked G. Bowen for his many years of service and
wished him well on his future endeavors.
R. Gaona congratulated G. Bowen on his upcoming retirement and
thanked him for his leadership. He also thanked P. Oviedo for
coordinating a quick response to a safety concern related to a
banner.
E. Medrano wished G. Bowen well on his upcoming retirement and
thanked him for his years of service, noting that he was helpful in
coordinating tours and supporting community events.
12. ADJOURNMENT: (NEXT REGULAR MEETING ON
NOVEMBER 18, 2020 AT 5:00 P.M. PLEASE BE ADVISED
THAT SOME BOARD MEMBERS WILL PARTICIPATE IN
THIS MEETING REMOTELY.)
V. Baroldi moved to adjourn
the Regular Meeting at 6:25
p.m. to the Board's Regular
Meeting date of November
18, 2020 at 5:00 p.m. R.
Gaona seconded the
motion.
MOTION VIA ROLL
CALL VOTE CARRIED:
5-0.
ABSTAINED: 0.
ABSENT: 2 [J. Seymour &
J. Showalter].
2020 - 65
Respectfully bmitted,
Dukku Lee
Public Utilities General Manager
* 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.
2020 - 66