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Public Utilities 2023/05/24CITY OF ANAHEIM PUBLIC UTILITIES BOARD MINUTES May 24, 2023 The agenda having been posted on Thursday, May 18, 2023, the Regular Meeting of the Public Utilities Board (Board) was called to order by Chairperson Seymour at 5:00 p.m. on Wednesday, May 24, 2023, in the Gordon Hoyt Conference Center, 2nd floor, Anaheim West Tower, 201 S. Anaheim Blvd., Anaheim, California. Board Members Present: Chairperson J. Seymour, Vice -Chairperson A. Abdulrahman, M. Lee, A. Pham, A. McMenamin, T. Bilezikjian, T. Ibrahim Board Members Absent: None City Staff Present: D. Lee, A. Kott, P. Starr, J. Lehman, J. Lonneker, C. Parker, M. Seifen, B. Beelner, E. Krause, M. Avelino -Walker, C. Dalton, F. Barvarz, A. Nguyen, C. Pereyra, J. Martinez, T. Castaneda Guest(s) Present: J.C. Mathieson, NV5 Vice President of Distribution Operations, Samuel Giordano, NV5 Project Manager, Daniel Zaragoza, GridSME Independent Evaluator (IE) Team Lead AGENDA ITEM 1. PUBLIC COMMENTS. 2. APPROVAL OF THE MINUTES OF THE PUBLIC UTILITIES BOARD REGULAR MEETING OF APRIL 26, 2023. 3. APPROVE AND ADOPT THE ANAHEIM PUBLIC UTILITIES 2023 WILDFIRE MITIGATION PLAN; AUTHORIZE SUBMISSION TO THE CALIFORNIA WILDFIRE SAFETY ADVISORY BOARD; AND DETERMINE THAT THE PROGRAMS AND PROJECTS REFERENCED IN THE PROPOSED WILDFIRE MITIGATION PLAN ARE CATEGORICALLY EXEMPT UNDER ACTION TAKEN There being no electronic or oral public comments, Chairperson J. Seymour closed the public comments portion of the meeting. T. Ibrahim moved the approval of the Minutes of the Public Utilities Board Meeting Regular Meeting of April 26, 2023. A. Abdulrahman seconded the motion. MOTION CARRIED: 7-0. ABSTAINED: 0. ABSENT: 0. M. Lee moved the approval and adoption of the Anaheim Public Utilities 2023 Wildfire Mitigation Plan including the other associated actions. 2023 - 39 THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) PURSUANT SECTION 15301, SECTION 15302, SECTION 15303, AND/OR SECTION 15304 OF TITLE 14 OF THE CALIFORNIA CODE OF REGULATIONS. J. Lonneker, Assistant General Manager — Electric Services, provided an overview of the 2023 Wildfire Mitigation Plan (WMP) process. F. Barvarz, Transmission and Distribution Manager, presented the WMP objectives including the statutory requirement for the 2023 WMP as a comprehensive update, and APU's wildfire mitigation strategies. J. Mathieson, NV5 Vice President of Distribution Operations, and S. Giordano, NV5 Project Manager, are the consultants assisting APU with updating the 2023 WMP. They made the Board aware of the firm's expertise in the electric utility industry and wildfire mitigation, regulatory background, and the preparation and stakeholder review process. D. Zaragoza, Independent Evaluator (IE) Team Lead from GridSME, reviewed the 2023 WMP and confirmed its comprehensiveness adding a recommendation to use terminology for operating conditions that aligns with those suggested by the state appointed Wildfire Safety Advisory Board (WSAB). The Board inquired if APU's WMP involves adjacent cities. J. Lonneker explained that Southern California Edison (SCE) has overhead lines within APU service territory and adjacent cities. APU coordinates with SCE's wildfire activities, including SCE's Public Safety Power Shutoffs (PSPS). Due to the diversity of the SCE transmission lines delivering power to Anaheim, PSPS do not affect Anaheim. The Board inquired how often the WMP is updated. D. Lee, Public Utilities General Manager, responded that although a comprehensive update is statutorily required every three years, the WMP is a living document and is incrementally updated annually to reflect added developments and accomplishments. The Board inquired whether infrared technology is used for situational awareness. Wildfire cameras have that capability; however, it is difficult at night to ascertain between lighting and flames from a fire so infrared technology is not currently used for notification to fire dispatchers. The Board asked if an interactive version of the high fire threat zones map depicted in the WMP could be made available on APU's webpage. Staff will work with the City's Geographic Information System (GIS) team to develop the map, including adding the names of major streets on the map as a point of reference. The Board asked if consultants have inspected the field conditions to confirm the improvements cited in the 2023 WMP were installed. T. Bilezikjian seconded the motion. MOTION CARRIED: 7-0. ABSTAINED: 0. ABSENT: 0. 2023 - 40 J. Mathieson responded that their scope of work did not include field verification. The Board asked if APU performs emergency response planning. APU has an emergency response plan in place and performs annual simulated training exercises. 4. PRESENTATION: 2023 POWER SUPPLY SUMMER OUTLOOK. E. Krause, Integrated Resources Manager, presented the 2023 Power Supply Summer Outlook and defined the regional coordination between the California Independent System Operator (CAISO) and surrounding Balancing Authorities used to balance supply and demand. The Summer Outlook is an annual study performed by the CAISO providing details on expectations and resource availability for the summer season. With recent additions from solar and battery storage systems since the summer of 2022, the probability of needing to shed load (rotating outages) has reduced; however the grid remains vulnerable to widespread heat events late in summer. E. Krause provided an overview of the September 2022 heat event and the mitigation measures employed to prevent rotating outages, including load reductions by customers, electric vehicle charging reductions, and the use of emergency generation. B. Beelner, Assistant General Manager — Finance and Energy Resources, added that even though Anaheim is fully resourced, Anaheim must follow directions from the CAISO to help the state meet its overall demand. E. Krause continued with a review of the CAISO system's peak forecast compared to previous years, as well as resources available due to additions along with APU's peak demand forecast and resources available. E. Krause explained the summer weather forecast of a slow summer start with heat expected mid -to -late August/September and expected El Nino conditions in mid to late summer. He also explained the hydro power outlook increases due to the rain events from late 2022 and early 2023. Hydro power is expected to be above average and will continue to provide energy well into late summer from hydro resources within California. In addition, increases at Lake Mead are expected through October 2023, which will aid in generation from Hoover Dam. Due to the heavy rain and snowpack, the fire season is expected to be late this year and there is a higher likelihood of fires at lower elevations due to the snow remaining at higher elevations through mid -summer. In addition, the above normal fire potential areas have been reduced leaving California at a normal fire potential level and lowering the threat on transmission paths which are used to import energy into Northern California, as opposed to last year when much of California was at an elevated fire condition. E. Krause provided explanations of mitigation measures used by the CAISO and APU to prevent the need to shed load, and what would happen if APU must do so. This includes utilization of 15-minute rotating 2023 - 41 outages to lessen the impact on APU customers. E. Krause concluded the presentation explaining that while conditions look much better than last year due to increased resources and robust hydro, the transition to carbon free resources remains challenging, and APU must remain ready to follow CAISO orders and directives as required. The Board asked for a definition of the term "firm load shed". E. Krause explained that it would be an instruction from the CAISO to intentionally drop customer load to reduce electrical demand and avoid cascading outages. The Board questioned the difference in the CAISO forecast and APU's forecast, which was lower than previous years. E. Krause explained that the forecast shown included additional load reductions which are expected by summer. B. Beelner added that the addition of customer resources reduced load and reiterated that APU is fully resourced. The Board noted that actuals exceeded forecasts in prior years and suggested a more careful review of forecasting methods. The Board asked what the difference in resources is from 2020 to 2023. E. Krause explained that most new resource additions have been solar and battery storage. D. Lee added that during the same time, there have been conventional generation reductions, such as APU's Kraemer Power Plant that was retired and not available in 2020. The Board asked how APU determines if it is fully resourced. E. Krause explained that the resource value shown is from owned generation and signed power contracts within APU's portfolio. 5. PRESENTATION: GREEN POWER PROGRAM. M. Avelino -Walker, General Services Manager, presented a brief overview of the Green Power Program in response to a request from the Board. The Green Power Program was developed to allow those customers who seek higher levels of renewable energy to voluntarily pay to increase the amount corresponding to their usage. Customers who elect to participate in the Green Power Program can select a 60% or 100% green energy option. For a typical resident using 500 kilowatt-hours (kWh) per month, this equates to $1.69 or $5.26 more per month. M. Avelino -Walker noted that a residential customer survey reflected that about 27% of customers feel that the pace of renewable power goals is too slow, and a similar percentage of customers are willing to pay under $10 more per month to accelerate their pace. This compares to a higher percentage (46%) of customers who are not willing to pay higher amounts. She referenced APU's Integrated Resources Plan which is important as APU moves towards 100% carbon -free by the year 2045, the Green Power Program will naturally sunset. M. Avelino -Walker indicated that since the program inception in 2022, there are 59 residential and 4 commercial customers who have elected to join the program. 2023 - 42 6. APPROVAL OF THE FY 2023/24 PROPOSED BUDGET. B. Beelner, Assistant General Manager — Finance and Energy Resources, requested the Board's recommendation to City Council for the approval of APU's Fiscal Year (FY) 2023/24 budget. B. Beelner mentioned that the proposed budget decreased by $5.6 million (0.9%) from the FY 2022/23 adopted budget, from $639 million to $633.5 million, mainly due to the drop in wholesale water costs because of the construction and implementation of APU's first phase of the Groundwater Treatment facilities. B. Beelner also discussed how the proposed budget ensures continued alignment with APU's goals of continuing to provide reliable, affordable, and sustainable electricity and water for its customers. 7. APPROVAL OF A DESIGN -BUILD AGREEMENT WITH OLTMANS CONSTRUCTION CO. FOR THE DESIGN AND CONSTRUCTION OF THE SUSTAINABILITY EDUCATION CENTER (PROJECT) IN THE AMOUNT OF $8,749,999 PLUS A 15% CONTINGENCY FOR A TOTAL NOT -TO -EXCEED AMOUNT OF $10,062,499; APPROVE AND AUTHORIZE THE RECORDING OF A LOT LINE ADJUSTMENT (LLA) NO. LLA2021-00830 AND CORRESPONDING GRANT DEED FOR THE PROJECT; DETERMINE THAT THE PROJECT IS CATEGORICALLY EXEMPT UNDER THE CEQA PURSUANT TO SECTIONS 15332 AND 15300.2 OF TITLE 14 OF THE CALIFORNIA CODE OF REGULATIONS; AND BY RESOLUTION, DEDICATE CERTAIN CITY -OWNED PROPERTY FOR THE PUBLIC STREET AND UTILITY PURPOSES IN CONJUNCTION WITH THE DEVELOPMENT OF THE PROJECT AND AUTHORIZE THE RECORDING THEREOF. C. Parker, Assistant General Manager — Water Services, introduced the design -build delivery method item that his staff is helping manage. T. Castaneda, Community & Sustainability Programs Manager, presented an overview of the Sustainability Education Center (SEC) and explained that the goal of the SEC is to serve as APU's flagship educational demonstration facility and incorporate energy and water technologies, sustainability exhibits, and workforce development programs. She displayed images of planned exhibits and indicated that a variety of events and educational activities will occur for students, residents, and businesses. APU, in collaboration with the Public Works Department, facilitated a design -build two-step procurement process. T. Castaneda showed conceptual renderings of the facility and highlighted features including Leadership in Energy and Environmental Design (LEED) Silver, EV charging stations, solar and battery storage systems, exhibit spaces, a classroom, and an outdoor courtyard. T. Castaneda explained the overall project budget is $13M including $IOM for the design and construction A. Abdulrahman moved the approval of the FY 2023/24 Proposed Budget. T. Bilezikjian seconded the motion. MOTION CARRIED: 7-0. ABSTAINED: 0. ABSENT: 0. A. Pham moved the approval of the Design - Build Agreement with Oltmans Construction Co. for the Design and Construction of the Sustainability Education Center and associated actions. M. Lee seconded the motion. MOTION CARRIED: 7-0. ABSTAINED: 0. ABSENT: 0. 2023 - 43 of the facility. She further explained that the funding sources include public benefit funding that aligns with the goals of the SEC, as well as electric vehicle (EV) emissions credits that will be used for EV charging infrastructure, and a three -million -dollar allocation awarded through the Office of Congressman Lou Correa. T. Castaneda explained that in addition to the design -build award, the recommendation includes a CEQA categorical exemption, a lot line adjustment, and a property line dedication to meet current right-of-way standards. The Board inquired about the operation and staffing of the SEC. Staff explained that it is not intended to be fully staffed for walk-in service, but event based. The operational cost is still to be determined since the project has not been designed yet. 8. UPDATE ON ELECTRIC SYSTEM ITEMS. J. Lonneker, Assistant General Manager — Electric Services, provided an update on the undergrounding project on Santa Ana Canyon Road in response to an inquiry made at the previous Board meeting. J. Lonneker shared pictures of the status of the project including the remaining telecommunication lines on "topped" poles with all electrical conversion complete, and streetlights in place. J. Lonneker indicated to the Board that there is a delay with the telecommunications companies' conversion because of an omission of a substructure crossing which has been resolved over the last two weeks. When the telecommunication companies complete their conversion, the poles will be removed, and paving is scheduled to commence after the Fourth of July holiday barring any unforeseen events. 9. UPDATE ON WATER SYSTEM ITEMS. C. Parker, Assistant General Manager — Water Services, provided an update on the water supply dashboard indicating that the groundwater basin is in good condition and will not need to be replenished with imported water this year. The State Water Project is in good condition and will be selling surplus water this spring, and the Colorado River Basin condition has improved. The Lower Basin States (California, Nevada, and Arizona) recently completed negotiations on a short-term plan to reduce water use by three million acre-feet over three years. The effect of this plan in Anaheim will be minimal. The Groundwater Treatment Project at the Linda Vista site will be online soon with the rest of the treatment plants completed between this summer/fall and next spring. C. Parker concluded by making the Board aware of a recent break-in at the Parkview Pump Station. The suspects have been apprehended and the Orange County District Attorney's Office is investigating. There was 2023 - 44 no significant damage to the facility, and APU staff are currently improving security at all facilities to minimize the risk of future break- ins. The Board inquired about what the next steps are following the groundwater treatment project. Staff explained that there are other well sites to be considered for treatment, and that regulations are being monitored. 10. UPDATE ON FINANCE & ENERGY RESOURCES ITEMS. B. Beelner, Assistant General Manager — Finance and Energy Resources, discussed the monthly finance dashboard with the Board through February 2023. B. Beelner mentioned that year-to-date electric revenue was 11.7% ($38.8M) above budget due to higher than projected wholesale energy and retail earlier in the fiscal year. Electric operating costs were above budget by 10% ($33.1M), causing a net positive budget variance of $5.7M. B. Beelner made the Board aware that the June dashboard will reflect the $48M budget amendment approved in March. The year-to-date water revenue was 4.9% below budget ($4.1M) due to the drop in water consumption by APU's customers in response to drought conservation, coupled with the reduced outdoor water use due to the recent significant rainfall. Water costs for the fiscal year were below budget by 5.5% ($3.7M) net negative budget variance $0.4M. B. Beelner then discussed with the Board the power supply dashboard and the recent drop in natural gas prices from a high of approximately $30 per Million British Thermal Units (MMBTU) in December to a low of approximately $2/1\4MBTU in the current market. These lower than typical natural gas prices could mean that APU's wholesale electric revenue for the balance of the fiscal year might fall below expectations. B. Beelner explained the current financial markets and how the potential for a debt limit stalemate between Congress and the President could impact APU. If a debt limit increase does not pass by the early part of June, the country could see significant spikes in interest rates. The Board asked if the current debt owed by APU is fixed thereby mitigating such risk. B. Beelner explained that all APU debt is fixed. B. Beelner discussed the recent bank failures and shared with the Board that APU has no exposure due to these failures as it does not have any agreements, nor does it do business with the failed or imperiled banks. 11. UPDATE ON ADMINISTRATION & RISK SERVICES ITEMS. J. Lehman, Assistant General Manager — Administration and Risk Services, provided the Board with an update on the Internal Compliance Plan. There had been two air emission reports to the Southern Coast Air Quality Management District (SCAQMD) during this period, and one may potentially result in a violation as it was the result of operator error during the plant shutdown. The operators received additional training on 2023 - 45 the shutdown procedures. The water lab passed its annual accreditation, and all other programs were in compliance. J. Lehman also provided an update on the Administration and Risk Services dashboard; she reviewed the safety metrics and noted that there had been no reportable injuries, including COVID cases, during the reporting period and that APU was meeting its safety metrics. 12. ITEMS BY SECRETARY. D. Lee, Public Utilities General Manager, shared agenda items planned for next month: • 2023 High School Scholarship recognitions • Water Shortage Contingency Plan Level Reduction • Professional Services Agreements for security services, city - owned solar maintenance, and water quality testing D. Lee thanked the members of the Board who attended the May 161h City Council meeting in which an overview of APU was provided. APU staff and Board members attended the State of the City event hosted by Mayor Aitken, where she commented on the direction of the City and key initiatives being pursued. APU staff provided a tour for Board Member T. Ibrahim of the Boysen Park Facility where extensive construction work is being done. The tour also included a visit to the Harbor Substation in District 4, and the Canyon Power Plant. APU participated in multiple community engagement events at various locations to provide program information to residents. APU staff attended the Children's Day Fair held by Council Member Leon at Barton Park. Over four hundred residents attended with their children. APU held an event at the site of the new Sustainability Education Center to receive a check from Congressmember Lou Correa. A class from Olive Elementary School who attended the check ceremony wrote a letter to express their appreciation. Lastly, D. Lee reminded the Board of the upcoming annual OC Green Expo on June loth. 13. ITEMS BY BOARD MEMBERS. Board Member T. Ibrahim thanked APU staff for coordinating tours of multiple APU facilities. Board Member A. McMenamin inquired about the status of the baseball field located at Boysen Park that is currently not being used. D. Lee 2023 - 46 responded that there is ongoing remediation being conducted by the Community Services Department. C. Parker added that there is a protective seal that goes 50 feet into the ground in that area to protect residents from contamination. There is a $15 million grant from the State to renovate the entire park, and completing rernediation is the first step towards these improvements. Board Member T. Bilezikjian asked about the current issues surrounding the OC Power Authority, D. Lee explained that the issues currently facing the OC Power Authority relate to their staffing and contracting procedures. There is no impact to APU. Board Member A. Pham. thanked APU staff for organizing the Student Scholarship committee. Board Member M. Lee expressed appreciation and anticipation for the Sustainability.Education Center as a model for urban planning. Board Member A. Abdulrahman asked if APU would benefit from becoming its own balancing authority or should continue being operated by the California Independent System Operator (CAISO).D.Lee explained that the City has already turned over operational control of its transmission assets to CAI SO and it would be a difficult process to transition back to being independently operated. APU is not currently staffed to perform such balancing itself and new power regulations are very complex. Additionally, there are increasing calls for regionalization of the power grid across the Western United States. APU is therefore not currently looking at becoming its own balancing authority. 14. ADJOURNMENT: (FACILITIES INSPECTION,ROBERT B. DIEMER WATER TREATMENT FLANT - METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA, 3972 VALLEY VIEW AVENUE, YORBA THIN A, CALIFORNIA 92886 IN BUILDING 1 DEMO. ROOM ON JUNE 23,2023 AT 9:00 A.M.) Respectfully s mfitted, Dukku Lee Public Utilities General Manager A.McMenamin moved to adjourn the Regular Meeting in the Gordon Hoyt Conference Center at 7:33 p.m. to the Facilities Inspection, Robert .B. Diemer Water Treatment Plant Tour on June 23, 2023, at 9:00 a.m. M. Lee seconded the motion. MOTION CARRIED: 7-0. ABSTAINED: 0. ABSENT: 0. Indicates itern(s) that will befarwarded to City Council for action upon recommendation by the Boards Indicates item(s) that will be forwarded to the City Clerk and City Council for informational purposes.