Public Utilities 2010/08/25CITY OF ANAHEIM
PUBLIC UTILITIES BOARD
MINUTES
August 25, 2010
The agenda having been posted on Thursday, August 19, 2010, the Regular Meeting of the Public
Utilities Board was called to order by Chairperson Lon Cahill at 5:02 p.m. on Wednesday,
August 25, 2010, in the 11th Floor Conference Room, Anaheim West Tower, 201 S. Anaheim Blvd.,
Anaheim, California.
Board Members Present: L. Cahill, K. Murray, J. Brandman, J. Machiaverna, C. Peltzer, P. Carroll
Board Members Absent: D. Morgan
Staff Present: M. Edwards, A. Kott, M. Ward, D. Calkins, E. Zacherl, S. Sciortino, B.
Beelner, J. Wei, L. Quiambao, P. Oviedo, R. Dowell, S. Welch, L. Davis
Guest(s) Present: David Wain, East Neighborhood Council
AGENDA ITEM
1. PUBLIC COMMENTS.
None
2. APPROVAL OF THE MINUTES OF THE REGULAR
PUBLIC UTILITIES BOARD MEETING HELD ON
JULY 28,2010.*
There was no discussion regarding this item.
3. PRESENTATION ON CANYON POWER PLANT
CONSTRUCTION.
L. Davis, Project Manager responsible for construction at
Canyon Power Plant (Canyon), gave a presentation regarding
the status of the construction of Canyon. He interfaces between
the public and the contractors to ensure all is going according to
plan. His primary responsibilities include the safety of
employees on the site, insure the quality of the work is being
done to specifications, stay on schedule, and meet the budget.
The project is currently on schedule and on budget.
L. Davis indicated that Canyon will provide the peaking power
needed in the summer, a local resource in the event of a loss of
ACTION TAKEN
L. Cahill closed the general public
comments portion of the meeting.
L. Cahill moved approval of the
July 28, 2010, Public Utilities
Board minutes. P. Carroll
seconded the motion. MOTION
CARRIED: 6 -0. ABSTAINED:
0. ABSENT: 1(D. Morgan).
2010-56
AGENDA ITEM ACTION TAKEN
transmission lines outside of our service territory, allow
Anaheim to increase its renewable resources, and will also meet
the required 15% reserve requirement once the facility is
operational.
L. Davis indicated that about 60% of the construction work is
below ground for such things as the water chillers to cool the
units, gas lines, and an air line to each turbine. Additionally,
the generator transformer foundations associated with the four
turbines, including the oil containment, a firewall to protect the
turbine and all the equipment in the plant from the transformer
are below ground.
L. Davis answered a variety of questions from the Board such
as, how many people would be hired once facility is completed
and when will it be online. He responded there would be no
additional people needed as the facility can be remotely
dispatched if necessary, and is scheduled to be online in the Fall
of 2011.
4. APPROVAL OF THE POWER CONTENT LABEL AND
ANNUAL RETAIL ELECTRIC PROVIDERS REPORT
FOR THE CALIFORNIA ENERGY COMMISSION. *
M. Edwards indicated that Anaheim Public Utilities has been
providing this information for almost 10 years so it is not new
to the Public Utilities Board (Board). Thus the Board is being
asked to approve the Annual Retail Electric Providers Report
and Annual Power Content Label, and authorize the preparation
and submission of the 2010 quarterly projections of the Power
Content Label.
5. UPDATE ON WATER SYSTEM ISSUES.
Grant for Landscape Resort Area Water Use Efficiency
D. Calkins invited the Board's attention to the Informational
Memorandum in the agenda package. The City was selected as
a recipient for a $100,000 Grant to improve landscape water
efficiency in the Resort Area by installing new centralized
irrigation controllers and replacing 40,000 sprinkler heads with
more efficient ones, which will reduce water use and improve
staff efficiency (Project). Applying for and implementing the
Grant was a joint effort with the Public Works Department.
M. Edwards indicated the Public Works Department is fully
supportive with reducing water use. For example, Public
Works is currently testing the use of artificial ivy at
approximately six sites including electric transformers and
traffic control boxes, which are frequently tagged with graffiti.
I. Machiaverna moved approval
of this item. C. Peltzer seconded
the motion. Motion carried 6 -0.
Abstained: 0. Absent: 1(D.
Morgan).
2010-57
AGENDA ITEM
Metropolitan Water District 2010 Integrated Resources Plan
D. Calkins indicated the Metropolitan Water District (MWD)
recently issued its draft 2010 Integrated Resources Plan (IRP or
Plan). The IRP reviews the water supply challenges facing
Southern California, and identifies a roadmap for ensuring
water supply reliability over the next 25 years. The Board
received the Plan's executive summary, but the entire report is
available on MWD's website. There is an MWD Board
workshop on September 14, 2010, and the MWD Board will
consider approval of the IRP at its October Board meeting.
Nohl Canyon Tank
In response to a question from the Board, D. Calkins stated the
contractor is wrapping up construction activities for the Nohl
Canyon Water Storage Tank, including final grading,
landscaping, and demobilizing of the staging area. This water
storage facility should be operational within 2 -3 months.
6. UPDATE ON ELECTRIC SYSTEM ISSUES.
System Electricity Use
M. Ward indicated that the Anaheim electric system has been
operating well, and today the electric demand went up to 530
megawatts which is the peak measured for this year. There
were about five outages over the past 2 -3 days during the mini -
heat wave. Anaheim Public Utilities has approximately
110,000 customers overall, and of that number, approximately
100 customers experienced outages due to transformer failures.
7. UPDATE ON FINANCE ISSUES
Budget Reduction Plan Summary
E. Zacherl indicated that budget reductions of approximately
$4.3 million have been identified in response to revenues that
were less than budget as a result of the sagging economy and
the cooler than normal weather conditions. The reductions
include approximately $3.1 million of operating expenses and
an additional $1.2 million of labor expenses. The labor saving
represents 25 vacant positions that will not be filled this fiscal
year.
M. Edwards sought to provide context to those present by
explaining that 75% — 80% of General Fund expenses
represents labor expenses, however only 12% of Anaheim
Public Utilities' budget expenses represents labor. As a result,
labor reductions can only provide a small portion of the expense
reductions needed to respond to the revenue shortfall of the
Department.
E. Zacherl indicated that discretionary expenses including
ACTION TAKEN
2010-58
AGENDA ITEM
travel, supplies, and advertising were minimized or eliminated
where possible. In addition, a line item review of all expenses
was performed to examine spending patterns in relation to prior
years, and reductions and eliminations were also implemented
while attempting to maintain desirable vs. acceptable service
levels, if further reductions have to be made, there is a strong
possibility that service levels will be impacted.
M. Edwards indicated that options to reduce even further are
becoming markedly limited. She indicated that the possibility
exists, that legislative and or regulatory mandates could affect
the way Anaheim Public Utilities does business thereby
impacting service levels.
E. ZacherI reported that Anaheim Public Utilities has begun the
process to issue bonds to fund a portion of the Water Division's
capital program. A Request for Proposal was issued to solicit
bids from investment banks seeking to become part of the
financing team. Ten banks responded and one will be chosen
after the bids have been reviewed. Market conditions are
favorable as interest rates continue to be historically low.
Resource Adequacy Plan for the Month of August
S. Sciortino reported that the forecast for September's peak is
535 megawatts. He added that forecasts are based on normal
weather conditions. By way of example, he explained this
week's weather was higher in temperature than what's been
experienced so far this summer but it was still near normal for
the month. S. Sciortino commented that there are sufficient
resources capable of covering next month's load requirement.
2 "0 Annual Green Home Expo
S. Sciortino indicated the 2 °d Annual Green Home Expo is
being sponsored by Filipino - American Chamber of Commerce
of Orange County. He will be attending in order to accept the
Emerald award on behalf of the City who was designated the
Greenest City in Orange County.
Harris Spice
S. Sciortino indicated Harris Spice (HS) is excited about their
solar panels, and is having a dedication ceremony next week.
HS is the second largest solar installation sponsored, in part, by
Anaheim as a recycling source.
ACTION TAKEN
2010 59
AGENDA ITEM
9. AGENDA ITEM(S) FOR THE NEXT PUBLIC UTILITIES
BOARD MEETING ON SEPTEMBER 22, 2010.
• Artic Stakeholder Outreach
• Electric Rate Workshop
• Nohl Canyon Water Storage Tank Update is being moved
to October
• Agreement with the Orange County Sanitation District for
the Water Recycling Demonstration Project
• Transmission Service Agreement with Los Angeles
Department of Water and Power
• Green Power Program
10. ITEM(S) BY SECRETARY
M. Edwards announced Margie Otto had a baby girl, Mikayla,
who weighed 6 lbs. and is 20 inches long.
M. Edwards indicated that in October, Don Calkins is being
inducted into the Academy of Distinguished Alumni of the
University of Missouri.
M. Edwards indicated that the monthly billing pilot program
has caused a series of problems so Customer Service will be
returning to bimonthly billing. For those customers that prefer
to remain on monthly billing, APU may be able to offer the
option of Smart Meter service.
M. Edwards spoke about the overall economic downward trend
that continues to impact the Electric Utility, which has been
exacerbated by the historically cool summer. The July sales
were down 10% or about three million dollars from 2009 levels
and 20% below July, 2008 levels with similar numbers expected
for August. Because of the continuing drop in sales and the
fixed nature of the Electric Utility's costs, Anaheim Public
Utilities will be proposing an electric base rate increase of 10%
spread over two years. This is in addition to further budget
cuts.
M. Edwards indicated that due to the mandatory public noticing
and hearing requirements, the earliest a rate action could be put
on the City Council agenda would be November 9, 2010 with
the rate change effective December 1, 2010. During the
workshop scheduled for September's Board meeting, staff will
go over the proposal in greater detail. M. Edwards also
indicated that APU is a not - for -profit agency and all
investments are solely for the benefit of the citizens or Anaheim
customers.
ACTION TAKEN
2010-60
AGENDA ITEM
11. ITEM(S) BY THE BOARD.
J. Machiaverna indicated that APU should not be uncomfortable
discussing increases in costs, noting that Disney raised its rates
and ticket sales as well as increasing package rates because it
was not selling products inside the park due to the economy so
it was increasing pricing in other areas.
C. Peltzer commented on how pleased he was with the
construction progress of the Canyon Power Plant.
K. Murray reminded the Board that the MWD Colorado River
Aqueduct Inspection Trip to be done in conjunction with the
City of Fullerton is coming up in October.
K. Murray added that the Fire Fighters have put together a team
called Rescuers for the Cure to support the Race for the Cure.
12. ADJOURNMENT: (TO THE REGULAR MEETING
DATE OF SEPTEMBER 22, 20]0 AT 5:00 P.M., IN THE
II" FLOOR LARGE CONFERENCE ROOM,
ANAHEIM WEST TOWER, 201 S. ANAHEIM BLVD.,
ANAHEIM, CALIFORNIA).
IR,e,spec¢ll'uIly submiute(],
Marcie L. Edwards
Secretary, Public Utilities Board
ACTION TAKEN
P. Carroll moved to adjourn the
Regular Meeting at 6:34 p.m. to
the Board's next Regular Meeting
date of September 22, 2010 at
5:00 p.m. C. Peltzer seconded the
motion. MOTION CARRIED:
6 -0. ABSTAINED. 0.
ABSENT: 1 (D. Morgan).
910MIN