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Home My WebLink AboutAgenda Packet - December 17, 2007 - UBAGENDA REGULAR MEETING OF AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL AZUSA AUDITORIUM DECEMBER 17, 2007 213 EAST FOOTHILL BOULEVARD IMMEDIATELY FOLLOWING.CITY AZUSA, CA 91702 REGULAR COUNCIL MEETING AZUSA UTILITY BOARD KEITH HANKS CHAIRPERSON ANGEL A. CARRILLO VICE CHAIRPERSON URIEL E. MACIAS BOARD MEMBER IOSEPH R. ROCHA BOARD MEMBER ROBERT GONZALES BOARD MEMBER Immediately Following City Council Meeting: Convene to Regular Meeting of the Azusa Utility Board and Azusa City Council • Call to Order • Pledge to the Flag • Roll Call A. PUBLIC PARTICIPATION (Person/Group shall be allowed to speak without Interruption up to rive (5) minutes maximum time, subject to compliance with applicable meeting rules. Questions to the speaker" responses to the speaker's questions or comments shall be handled after the speaker has completed hl"er comments. Public Participation will be limited to sixty (60) minutes time.) The Consent Calendar adopting the printed recommended action will be enacted with one vote. If Staff or Councilmembers wish to address any item on the Consent Calendar individual/y, it will be considered under SPECIAL CALL ITEMS. B. CONSENT CALENDAR Minutes. Recommendation: Approve minutes of regular meeting on November 26, 2007 as written. Lai &1. UB Min Nov 26.doc 2. Minutes. Recommendation: Approve minutes of workshop meeting on November 26, 2007 as written. B-2. Wkshop Min.doc C. STAFF REPORTS/COMMUNICATIONS 1. Quarterly Report on San Juan Fuel Cost Adjustment C-1. San Juan FGA. DOC 2. Monthly Power Resources Update C-2. Moy Pwr Res Update. ppt 3. Monthly Update on Water Shortage Declaration (Verbal) D. ADIOURNMENT Adjournment. %n compliance with the Americans with Disabilities Act, If you need special assistance to participate in a city meeting, please contact the City Clerk at 626-812-5229. Notification three (3) working days prior to the meeting of time when special services are needed will assist staff In assuring that reasonable arrangements can be made to provide access to the meeting " 002 B -1 AZUSA LIGHT l A'AiF[ CITY OF AZUSA MINUTES OF THE REGULAR MEETING OF THE AZUSA UTILITY BOARD/CITY COUNCIL MONDAY, NOVEMBER 26, 2007 — 6:30 P.M. The Utility Board Members of the City of Azusa met in regular session, at the above date and time, at Azusa Light and Water Conference Room, located at 729 N. Azusa Avenue, Azusa, California. Chairman Hanks called the meeting to order. Call to Order Mr. Bob Donnelson led in the Pledge to the Flag. Flag Salute ROLL CALL Roll Call PRESENT: BOARD MEMBERS: GONZALES, CARRILO, MACIAS, HANKS, ROCHA ABSENT: BOARD MEMBERS: NONE ALSO PRESENT: Also Present City Attorney Ferre, City Manager Delach, Director of Utilities Hsu, Assistant to the Utilities Director Kalscheuer, Assistant Director of Resource Management Tang, Assistant Director of Water Operations Anderson, Business Development/Public Benefits Coordinator Reid, Azusa Police Captain Streets, Library Director Tovar, Finance Controller Aguilar, City Clerk Mendoza, Deputy City Clerk Toscano. Employee Finance Controller Aguilar introduced new employee Lisa Rogers, Account Specialist 11. Introductions Public Participation Pub Part Mr. Dale Kram addressed the. Board Members with concerns regarding compliance with drought D. Kram Phases, stating that he has been conserving water for years and it would be difficult to reduce Comments consumption by 10-20%; he asked how the formula was created. Director of Utilities Hsu responded stating that the formula came about through the Public Utilities Dir of Util entities and that the phases and regulations are put into place in order to recognize customers Response with excessive abuses of water and for commercial customers which sometimes have exceptionally high use. loos. Mr. Mike Lee addressed the Board Members questioning whether the process for measuring the M. Lee 10-20% reduction would be measured by water bills; asked if they would be receiving letters Comments before fines are imposed and provided tips on how to conserve water. Mr. Art Morales addressed the Board Members stating that traffic signals should be coordinated; A. Morales Slauson School basketball courts are being watered at night; and hoped for grant money for Comments people who want to replace grass with turf. Mr. Don Cook addressed the Board Members expressing concern regarding an issue he has had D. Cook since May with water/fire Flow testing at 1773 San Bernardino Road; he detailed the problems he Comments has been having and asked that someone go out and open up the availability of water for fire prevention. The CONSENT CALENDAR consisting of Items B -I through B-5, was approved by motion of Consent Cal Board Member Gonzales, seconded by Board Member Carrillo and unanimously carried with the Approved exception of item B-4, which was considered under the Special Call portion of the Agenda. 1. The Minutes of the regular meeting of October 22, 2007, were approved as written. Min Appvd 2. Approval was given for the extension of term of professional services agreement with Wren & Wren & Associates for water and electric facilities inspection services at the Rosedale Development Assoc. until June 30, 2008. Rosedale 3. Approval was given to award landscape and irrigation maintenance contract for Azusa Light &E&L Water facilities to E 8- L Landscape Services in amount of $2,940 per month. Landscape 4. SPECIAL CALL ITEM. Spec Call 5. Notice of Completion for BnB Engineering was accepted for Project ED2007-7, installation of NOC Under - underground electric substructures along Fifth Street between Rockvale and Foothill Center Ground and the City Clerk's Office was directed to execute the Notice of Completion, and have same Structures recorded in the Office of the Los Angeles County Recorder. BnB Engr. Special Call Items Spec Call Board Member Gonzales requested clarification on Change Order No. 9 regarding Project WVF- WTR Change 207; why the City is paying for the 5% markup. Mr. Ashutosh (Ashu) Shirolkar of Black and Veatch Order #9 responded stating that the contract language allows for a 5% markup for extra work done by the Comments sub -contractor. Moved by Board Member Gonzales, seconded by Board Member Rocha and unanimously carried Change Order to approve Change Order No. 9 for the addition of $57, 261.33 and additional four calendar days #9 appvd time extension to the SSC Construction contract for the construction of Project WVF-207, Canyon Filtration Plant Membrane Treatment Upgrade and Expansion. Scheduled Items Sched Items Director of Utilities Hsu presented item regarding hiring of temporary part time employees to Dir of Util enforce water use restrictions stating that at this time there is only one Meter Reader who has Response to been performing this function. He responded to questions stating temporary employees will be Part Time used as long as the drought conditions are in effect. He also responded that the employees will Water Patrol service all areas where Azusa water is utilized. Mr. Hsu also responded stating that warning will be given first, and then a citation for second offense; they will also be given nozzles to use. 11/26/07 PAGE TWO 1 1 i Assistant Director of Resource Management Tang responded to question regarding emergency B. Tang numbers to report abusers stating that it is 812-5225; during business hours staff will contact a Response Water Patrol person and at off hours an answering service will contact a Water Patrol person. Moved by Board Member Rocha, seconded by Board Member Gonzales and unanimously carried Hire Water to authorize staff to recruit and hire three part-time employees to enforce water use restrictions; Patrol and to amend Customer Service Field Service Operations budget in amount of $47,500 to Employees compensate the new part-time employees. Director of Utilities Hsu presented item increase in the Replacement Water Cost Adjustment Dir of Util Factor, detailing that the cost of purchasing water from MWD has been rising during the last RWCAF months and there is a need to increase so they won't have to use reserves. In Lodi Proj Moved by Board Member Carrillo, seconded by Board Member Macias and unanimously carried Increase in to authorize staff to increase the Replacement Water Cost Adjustment Factor by $0.0458 per RWCAF hundred cubic feet of water effective December 1, 2007, to recover the increased cost of Approved purchasing water from the Metropolitan Water District for September and October. Director of Utilities Hsu presented the Implementation of Distributed Solar Program stating that it is to comply with Senate Bill 1; he stated that it would result in an obligation for Azusa to provide $3 million in funding over 10 years for solar power installations. He responded to question posed regarding renewable proposal. Assistant Director of Resource Management Tang responded to questions regarding the benefits of solar systems and stated that the incentive of the rebate is necessary. Moved by Board Member Rocha, seconded by Board Member Gonzales and unanimously carried to adopt a program funding commitment of $300,000 per year for 10 years in compliance with SB I funding mandate; direct staff to prepare revisions to the existing solar partnership program consistent with SB 1 mandate; and direct staff to explore innovative and cost effective distributed solar projects. Director of Utilities Hsu addressed Item regarding New Lodi Power Project stating that the Project is a 255 MW combined cycle natural gas fueled generation project being developed by the Northern California Power Agency (NCPA) at a site in the City of Lodi located about 50 miles southeast of Sacramento. The proposed City's participation in the planning and development phase is for 7 MW of electric power or about 2.8% of the total project. He explained what the requirements of the City is and requested the City's participation and appropriation of $450,000, of that; $110,000 is for planning activities and $340,000 is for the potential purchase of Emission Reduction Credits (ERCs), depending on whether the purchase is needed. Dir of Util Assist Dir Res Mngmt SB 1 program Solar Partnership Program Dir of Util New Lodi Power Pro) Moved by Board Member Gonzales, seconded by Board Member Macias and unanimously carried City's to approve the City's participation in Phase 2A planning and development activities of Lodi #2 participation Project; authorize the Mayor to execute planning and development agreement upon preparation In Lodi Proj of final execution copies; and authorize a budget amendment of up to $450,000 for the City's approved participation in this project. Staff Reports/Communications Staff Rpts Director of Utilities Hsu presented the Monthly Update on the Water Treatment Plant Project Monthly stating that it is 37% complete, and of the $35.9 million dollar budget, 13.5 million has been paid WTP out. He stated that he would arrange a tour of the site if Board Members wished to visit it. Update 11/26/07 PAGE THREE 005 Director of Utilities Hsu presented an update on the Water Shortage Declaration. He talked about Dir of Util Azusa's water resources, the lack of rainfall in the Sierras, and the problems with the reduced Water water export from Delta due to endangered species of fish. He also talked about reasons for the Shortage stabilization of the aquifer due to the large Azusa customers using water from their own wells, and Declaration the County releasing water from Morris Dam, to name a few, but that the City's groundwater level Update is still about 60 feet below for this time of year. After January 1't, the City will get water from the pipeline that ALP will replace on Sierra Madre, which will be done by third week of December, from the State Water Project. He noted that they would be going to Phase 111 of the Drought as of December 1, 2007, which was approved at an earlier meeting. Board Member Rocha reminded them that there is a need to take each water issue on a case by case basis with regard to customer over use and talked about the medians which Mr. Hsu responded that the timers will need to be adjusted and he has spoken to Director of Recreation and Family Services Jacobs about that. Lastly, it was reiterated that the number to call for service is 812-5225 and it will go to a standby person on the weekends. Photos of New Uniforms for Customer Service Staff were presented via power point presentation; New Uniform there was no discussion. Cust Svs Director of Utilities Hsu provided information regarding California Municipal Utilities Association CMUA Capitol Day stating that event will be on January 14, 2008 in Sacramento; he noted that it is open Capitol Day to Elected Officials and if they planned to attend they could let him know. Director of Utilities Hsu provided information regarding the American Public Power Association APPA Legislative Rally to be held from February 25 — 27, 2008 at the Renaissance Mayflower Hotel in Legislative Washington, D.C.; he added that if Board Members wished to attend to let him know so he could Rally make the arrangements; he talked about the benefits of attending the conferences. The Monthly Power Resources Update was presented but not discussed. Monthly Pwr Res. Update Directors Comments Dir Cmts Director of Utilities Hsu advised that the Covina Irrigating Company easement requires a Public Dir of Util Hearing that may come the second meeting of December; if any Board would like to see where Comment the easement is located or proposed to be located he would show them. Easement Covina Irrig. Moved by Board Member Gonzales, seconded by Board Member Rocha and unanimously carried Adjourn to adjourn. TIME OF ADJOURNMENT: 7:32P.M. SECRETARY NEXT RESOLUTION NO. 07-C106 11/26/07 PAGE FOUR iii B-2 AUSA tIONT t'd'�TIR CITY OF AZUSA MINUTES OF THE WORKSHOP UTILITY BOARD/CITY COUNCIL MONDAY, NOVEMBER 26, 2007 — 7:33 P.M. The Utility Board Members of the City of Azusa met for a Workshop, at the above date and time, at Azusa Light and Water Conference Room, located at 729 N. Azusa Avenue, Azusa, California. Chairman Hanks called the meeting to order. Call to Order ROLL CALL Roll Call PRESENT: BOARD MEMBERS: GONZALES, CARRILO, MACIAS, HANKS, ROCHA ABSENT: BOARD MEMBERS: NONE ALSO PRESENT: Also Present Director of Utilities Hsu, Assistant to the Utilities Director Kalscheuer, Assistant Director of Resource Management Tang, Assistant Director of Water Operations Anderson, Business Development/Public Benefits Coordinator Reid, Azusa Police Captain Streets, Library Director Tovar, Finance Controller Aguilar, City Clerk Mendoza, Deputy City Clerk Toscano. POWER RESOURCE PLANNING IN UNCERTAIN TIMES Pwr Wrkshp Director of Utilities Hsu addressed the issue presenting and detailing the following: Current state Dir of Util of electricity markets, Regulatory mandates, Challenges, and Concluding observation. He responded to question from a resident regarding recycling of plastics. Moved by Board Member Gonzales, seconded by Board Member Rocha and unanimously carried Adjourn to adjourn. TIME OF ADJOURNMENT: 7:58.M. SECRETARY 007 C I,. J. INFORMATIONAL ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD AND AZUSA CITY COUNCIL FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES, DATE: DECEMBER 17, 2007 �' SUBJECT: QUARTERLY FUEL COST ADJUSTMENT (FCA) FOR SAN JUAN RESOURCE On July 26, 2004, the Utility Board approved a fuel cost adjustment mechanism for San Juan power plant. This mechanism is intended to credit customers with cost savings that are realized when our power plant operates reliably and replacement power costs are avoided, and conversely, allow the Utility to increase revenues to recover a portion of our replacement power costs when the San Juan resource experiences outages. This report encompasses replacement power costs incurred for the San Juan resource during the period of September 16, 2007 through December 10, 2007. For reasons stated below, staff recommends that NO Fuel Cost Adjustment be assessed on customer electric billings for the period of January 1, 2008 through March 31, 2008. The availability of the San Juan unit #3 during the period of September 16, 2007 through December 10, 2007 was 89%, higher than the budgeted availability of 85%. The average cost of replacement power was $49.18/MWh as compared to the budgeted cost of $40/MWh, resulting in a net credit of $50,101 for Fuel Cost Adjustment for the quarter, and when combined with the carry over from the previous quarter of $296,458 it resulted in a total FCA credit of $346,558. Normally, when FCA credits exceed $150,000 the amount would be credited back to customers on their electric bills in the immediately following quarter. However, given the anticipated large San Juan replacement power costs in the first quarter of 2008 due to planned San Juan unit 3 major maintenance outage, staff continues to recommend the FCA credits be carried over to offset the foreseeable large San Juan FCA charges that will become due in the second quarter of 2008. Prepared by: Bob Tang, Assistant Director of Resource Management Attachment SJ FCA Q1-08.x1s M. San Juan Fuel Cost Adjustment Calculation for Q1 2008 (*) Through December 10th, 2007 $49.18 10.55% W Sept 16 -October November December (*) Actual SJ Output 32,865 15,532 6,988 Actual SJ Replac Energy Cost $14,889 $296,542 $9,989 Maximum Output 33,120 21,600 7,200 Unavailable SJ Output 255 6,068 212 % Outage Rate 0.77% 28.09% 2.94% Base SJ Output @ 85% 28,152 18,360 6,120 Unavailable SJ Output 4,968 3,240 1,080 % Outage Rate 15.00% 15.00% 15.00% Base SJ Replac Energy Cost C$40/MWh $198,720 $129,600 $43,200 Actual - Base SJ Replac Energy Cost -$183,831 $166,942 -$33,211 San Juan Insurance Premium Recovery $0 $0 $0 San Juan Insurance Payout $0 $0 $0 Cumulative Quarterly Difference (CCD) -$50,101 Q2 2007 Carry -Over -$296,458 If I(CQD)I<$100,000, then adjustment=0 If j(CQD)I>$750,000, then adjustment=+ -$750,000 or else adjustment = CQD -$346,558 January February March Forecast Retail Sales (MWh) 20,915 18,356 20,850 SJ FCA for Q1 2008 (cents/KWh) -0.58 (*) Through December 10th, 2007 $49.18 10.55% W c-2 Power Resources Division Monthly Report ■ Power Resource Update ■ . Power Consumption Comparison ■ Wholesale Market Trend ■ Power Resource Budget Update 010 Power Resource Update 1. Finalized replacement power planning for San Juan maintenance outage in the first quarter of 2008. The cost of replacement power is expected to be less than the budget by $450,000 due to declining spot market prices. 2.. Significantly ramping up the preparatory activities in anticipation of the start up of California Independent System Operator's (CAISO) new markets in early spring 2008 3. Completed year-end regulatory and financial disclosure filings with WAPA, FERC, SCPPA and bond agencies. 4. Continuing active participation in the SCPPA and municipal utility community's regulatory efforts on greenhouse gas issues. 5. Conducted preliminary discussions with Municipal Energy Agency of Nebraska regarding long term power sales of .City's share of San Juan Project. Additional details will be briefed to the Utility Board in the near future. 011 CITY OF AZUSA ENERGY CONSUMPTION COMPARISON ENERGY CONSUMPTION IN MWN _ PERCENT JUL 29287 26MA -10.66% AUG 25,912 28,014 8.11% SEP 24,379 23,760 -2.54% OCT 21,700 21,890 - 0.88% NOV 20,456 19,708 -3.65% DEC 20,510 41.1 -100.OD% JAN 20,984. '.. _ . -100.00% FEB 18,414 -....- .__. - .. -100.00% MAR 20,916 - - -100.00% APR 19,719 . ....... -100.00% MAY 21,064 _ -100.00% JUN 21,949 -. .._ -100.OD% TOTAL . _ _ _ 265291 119,536 _ _ _ -157% CITY OF AZUSA PEAK DEMAND COMPARISON MONTH FY 06-07 FY 07-08 PERCENT CHANGE JUL 60.8 55.5 -8.65% _ AUG 552 _' 64;9_ 17.39% SEP 63.9 027% OCT _63.7 43.9 46.7 6.34% NOV 46.0 41.1 -10.49% DEC 36.6 -100.00% _ JAN-.-..._ 36.6_..__ .. -....- .__. - .. -100.00% FEB. __... ....- 37.4 - - -100.00% .. MAR..._. 428 ... .. . ....... 400.00% APR_ :_ ..__ 40.7. _ .. -1 D0.0D% _ MAY _ .. 48-3_..._. -. .._ ___:100.00% JUN _ 475 -_______..___ -100.00% PEAK DEMAND N MW 012 013 WHOLESALE ELECTRICITY SPOT MARKET PRICES IN CALIFORNIA AVERAGE - AVERAGE MONTH ON PEAK PRICE OFF PEAK PRICE OCT 06 $47.68 $35.03 NOV 06 $53.55 $41.34 DEC 06 $53.75 $44.63 JAN 07 $53.46 $44.36 FEB 07. $58.45 $47.79 MAR 07 $49.82 $36.44 APR 07 $57.29 -$43.12 MAY 07 $63.55 $41.24 JUN 07 $67.77 $42.39 JUL 07 $75.35 $41.26 AUG 07 $66.95 $36.94 SEP 07 $52.66 $36.40 OCT 07 $59.42 $44.90 NOV 07 - $50.79 $40.43 ALL PRICES M $lMWH .... - - 013 n Power Resource Cost Accounting FY '07-08' 13) 1 H) i. Isl ... 161 ,.... .. 1)) Iel .. ... i... ` LONGTERM I 6MO_R_T_TER_M .._i_T_RMSMISSDN fI _ A_C6LPA__SCHEDULING j �- TOTAL - 1,350252)1 ijulI 2,"32n.7523 26318A4 II 3.f0• 981y _p8as 1850 1 1,11n9 61)0018)1' P.,..1.../.4718.._1 Sepn6 _ 1,33608295 202.822/t1122 12.13>rS 4u2246<79261g-0 o.mA)241 59.68 OV-06 1286/)903 105920167; 232306.66 20A0000 74,09949 r 6)2A8685� (967.65078) 1]DI/36.0) No 06 11239561.66 1,333840fi3� 13.135451_ 20AUD.DO, 62A9949y 2,)68.657231 .. -(862b)2SOI 1905]84]3? - -.. OJarw7 _ 1. ,�. OAOI DW .1._ - .. ..... OAO. DM"1,0).. _;_.._ 1 _.L. _. A. - .. .. .. +. ..._._I OAOj .... _ .... I- - DAO' Ma 07 Apr -07 ii .... f I OAO i- 000 I. ... D AO _t. __ 1 _I-... I AOy _ ... TOTAL ,4! 1 56.659A33D7� 99210580 J2� 61 189}29.5 $10955941 ... _. _ ._ 523954555x_517.408048291 .. (57,8.56.306.4])' — 39.651]41.82; ... {_ _ _ ..... _. {...__._. .._.. L. .._ (1) INDLUDES SCPPALONG iERMCONTRAC)S , INCLUDES ALL SHORTTERM PURCHASES FOR HEDGING, LOAD BILPNCING PURPOSE6. RIli CPPACIfV TgrW5MS510NCONTRACT CO575 131 .. p) ,INCLUDESA SHCRTTERNIMOLONG .i.-_ , COSTS CHPAGED BV CILIF_DRNIA INDEPENDENT SVSI£MOPERATDR FOR SYSTEM RELU,BILRY FUNCTIONS I _. .: _ _ I 15) ELECTCRY � )INCLUDES COSTS FOR CMEDULING MID DISPATCHING OF RI S j I61 'SUMOF(I)THROUGHP) L71 _ _ 1NMQESPLE REVENUES DERNED FROMSPLES OF E%CE55 POWER+PFOBENEFRS ... _... .._ ..... _. _ (e) DIFFERENCE OFI6� AND(7) .. _ 1_.. ___ ....__._-_ —1-1 ___. 014