HomeMy WebLinkAboutAgenda Packet - January 23, 2012 - UBAGENDA
REGULAR MEETING OF
AZUSA UTILITY BOARD
AZUSA LIGHT & WATER
729 N. AZUSA AVENUE
AZUSA, CA 91702
AZUSA UTILITY BOARD
KEITH HANKS
CHAIRPERSON
ANGEL CARRILLO
VICE CHAIRPERSON
URIEL E. MACIAS
BOARD MEMBER
6:30 P.M. Convene to Regular Meeting of the Azusa Utility Board
• Call to Order
• Pledge to the Flag
• Roll Call
A. PUBLIC PARTICIPATION
A7 -USA
IIGXT R CATER
JANUARY 23, 2012
6:30 P.M.
JOSEPH R. ROCHA
BOARD MEMBER
ROBERT GONZALES
BOARD MEMBER
(Person/Group shall be allowed to speak without interruption up to five (5) minutes maximum time,
subject to compliance with applicable meeting rules. Questions to the speaker or responses to the
speaker's questions or comments shall be handled after the speaker has completed his/her comments.
Public Participation will be limited to sixty (60) minutes time.)
001
B. UTILITIES DIRECTOR COMMENTS
C. UTILITY BOARD MEMBER COMMENTS
D. CONSENT CALENDAR
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 individually, it will be considered under
SPECIAL CALL ITEMS.
Minutes. Recommendation: Approve minutes of regular meeting on November 28, 2011 as written.
Us Nov Minutes. pdf
2. Funding Request by California Resource Connections. Incorporated's (CRC) to Conduct a
Backyard Compost Workshop. Recommendation: Approve the funding request of CRC in amount of
$5,525 to conduct a backyard compost workshop on April 14, 2012.
tt 9
CRC Proposal.pdf CRCs Funding
Request. pdf
3. Modification of Rules and Regulations Schedule RL, Residential Services with Life Support
Devices. Recommendation: Approve the modification of Rules and Regulations Schedule RL,
Residential Services with Life Support Devices, to include apnea monitors, kidney dialysis machines, and
heart monitors, provided this equipment runs on electricity supplied by Azusa Light & Water.
Purchase of Electric Utility Flatbed Dump Truck. Recommendation: Approve the specification for a
replacement Electric Utility flatbed dump truck and approve its purchase using the City's alternative
purchasing procedure from Downtown Ford Sales in amount not -to -exceed $67,485.25 including delivery
and applicable taxes.
ul
Dunp Truck
Purchase.pdf
I 170
Life Support
Utilities
Devices.pdf
Coniparison.pdf
Purchase of Electric Utility Flatbed Dump Truck. Recommendation: Approve the specification for a
replacement Electric Utility flatbed dump truck and approve its purchase using the City's alternative
purchasing procedure from Downtown Ford Sales in amount not -to -exceed $67,485.25 including delivery
and applicable taxes.
ul
Dunp Truck
Purchase.pdf
I 170
5. Authorization to Register the City of Azusa with California Cap -and -Trade Program for
Greenhouse Gas (GHG) Compliance. Recommendation: Authorize the Director of Utilities, or his
designee, to register the City of Azusa with California GHG program for GHG compliance and holding
accounts and to administer such in accordance with AB 32 Regulations.
Cap -arid -Trade. pdf
6. Sterling Technologies, LLC Blanket Purchase Order Amendment. Recommendation: Approve the
amendment of Sterling Technologies, LLC blanket purchase order for purchase of chemicals for water
treatment plant in amount of $90,000.
1111M. -
Sterling PO. pdf
E. SCHEDULED ITEMS
Refunding of Water Utility Long Term Debt — 2003 Series A Certificates of Participation (COP).
Recommendation: It is recommended that the Utility Board approve the following items: 1) Authorize
staff to commence work to refinance outstanding debt associated with 2003 issuance of Series A COP in
amount of about $11.6 million; 2) approve scopes of work included in this report for two requests for
proposals: (a) bond and disclosure counsel; and (b) underwriter services; and 3) authorize staff to solicit
proposals for respective professional services necessary to prepare refinancing documents.
Wtr Util LT Debt. pdf Exhibit.pdf
2. Financial Advisory Services to Refund Electric Utility Debt — 2003 Series B Certificates of
Participation (COP). Recommendation: Approve a professional services agreement with Urban
Futures in amount not -to -exceed $19,550 to refinance outstanding debt associated with 2003 issuance of
Series B COP in amount of about $5.3 million.
Elec Udl LT Debt.pdf Exhibit. pdf OF Proposal.pdf
Request for Proposals (RFP) and Authorization to Solicit Engineering Services for Sludge Handling
Facility at the Hsu -Canyon Water Filtration Plant. Recommendation: Approve the scope of work in
attached RFP for engineering services to conduct a feasibility study of sludge handling alternatives for the
Hsu -Canyon Water Filtration Plant and authorize staff to solicit proposals.
Rpt SludgeRFP.pdf Draft RFP. pdf
003
F. STAFF REPORTS/COMMUNICATIONS
1. San Juan Update:
CEC Rulemaking Affecting Local Publicly —Owned Electric Utilities with Coal Plant
Participation
Rpt CEC
GM Hearing SCPPA NRDC-SC
Rulerraking.pdf
Connnents.pdf Comrnents. pdf Pettion.pdf
2. Report on Third Quarter Azusa Light & Water's Purchase of 15 MW of Power
Pwr Purchase Q3
Confirmadon.pdf
2012.pdf
3. Update
Services' Proposal on Automated Trash Collection
eoon`Athens
Rpt Athens
Athens' Proposal. pdf Athens Ltr
Proposal. pdf
Proposal. pdf
4. American Public Power Association (APPA) Annual Conference: June 16-20, 2012, Seattle, Washington
APPA Annual
Conference. pdf
G. ADJOURNMENT
Adjournment.
"In 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 or time when special services are needed will assist staff in assuring that reasonable arrangements
can be made to provide access to the meeting."
"In compliance with Government Code Section 54957.5, agenda materials are available for inspection by
members of the public at the following locations: Azusa City Clerk's Office - 213 E. Foothill Boulevard,
Azusa City Library - 729 N. Dalton Avenue, and Azusa Light & Water -729 N. Azusa Avenue, Azusa CA. "
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Utif ity = c•��.�fi tf T!,f-�ti���•�
January 23, 2012
Chair Keith Hanksy�
AZUSA
LIGHT a WATER
rE
°
�Ci��lti�`'llt A[���`'11C���•�
November 28, 2011 minutes
Funding for California Resource Connection's Backyard
Compost Workshop ($5,525)
Modification of Schedule RL, Discounts for Residential Life
Support Devices
Purchase of Replacement Flatbed Dump Truck ($67,486)
Registration with California GHG "Cap and Trade" Program
Amendment to Sterling Technologies' Blanket P.O. ($90,000)
K;
AZUSA
LIGHT 6 WATER
rm
Refinancing of
Water Utility's 2003A Cols
Azusa Utility Board
January 23, 2012
3 AZUSA
LIGHT 9 WATER
At its November 2011 meeting, the Utility Board
approved hiring of Urban Futures as financial advisor
° In order to move
forward,
it is
now necessary to hire
Bond/Disclosure
Counsel
and
to obtain
Underwriter
services
Given continued favorable municipal bond rates, the
refinancing target date is March/April 2012
0
AZUSA
LIGHT & WATER
�
5t�Jirm�•�ti Pr��j�=�t_:ti�•�r�
About 83% of Water Series A can be
refinanced
Average yield is presently 4.58%
Yield on refinanced bonds estimated at 1.83%
based on current market
o NPV savings estimated to be $1.3 million or
about $150K per year (11.5% savings)
}
5 AZUSA
L i G H* b W F 7 E N
R�-1t :t.� rl� r��f-1 r� �•� �.�t i �•� r 7
That the Utility Board:
— authorize Staff to proceed to refinance 2003
Series A debt,
— Approve scopes of work for bond/disclosure
counsel and underwriter services, and
— Authorize issuance of related RFFs and
award to successful bidders���
6 A USA
LI G H I & W AT E8
Refinancing of
Electric Utility's 2003B COP's
Lodi Energy Center
75% complete
Azusa Utility Board
January 23, 2012 <�
7 AZUSA
LIGHT 6 WAIER
�.3r:k�•�► r•��ll�ti
In 2003, the Electric utility issued -$12 million to
finance Kirkwall Substation and related facilities in two
series - one taxable and one tax free
The taxable Series C will be paid off in 2017
The $5.35M tax-exempt Series B, however, is
interest -only until 2017 and paid off in 2023.
A refinancing of the Series B issue is expected to
produce sufficient savings to justify moving forward
�*'XA
1
$ AZUSA
LIGHT & WATER
5�.��i��c•�� Pr a
o Current yield for Series B COP's is about 4.8%
° City's FA estimates that this series can be
refinanced through private placement at 3.2%
This would generate savings of 7.7% with a NPV
of 421 K; and annual savings of $85K
Staff also intends to look closer at a joint
refinancing with the Water Series A to confirm
private placement is best approach
9 AZUSA
LIG1i f A W AI EP
��-�c : c.��ll 111f-� I1 t•��.�t i c•71�
° That the Utility Board:
— approve issuance of a professional services
agreement with Urban Futures (not to exceed
$19,550),
— authorize evaluation of private placement and bond
refinancing options,
— direct Finance and Utility Directors to take
necessary steps to consummate the most beneficial
refinancing option
�A<,t
10
A Z U S A
L I G H T b W A l E N
Water Treatment Plant
Sludge Handling Study
Azusa Utility Board
January 23, 2012�'�
AZUSA
u G H 7 a WATER
Azusa's Water treatment Plant has been operating for 2 '/2
years
Experience has shown that the sludge produced by the
treatment process exceeds projections
Presently. three sludge drying beds dewater using
evaporation
Evaporation complicated by the drying bed location near
the foot of a mountain canyon.
There are a number of possible options to improved sludge
handing and the input of an expert is recommended.
ih
Ile
AZUSA
LIGHT & WATER
R�=�t.�•�rT� r1��-� r��•i�.�tit•�r7
That the Utility Board:
— approve Scope of Work for obtaining sludge
handling consulting services, and
— Authorize staff to issue associated RFP.
13
AZUSA
U G H i 6 W A T E N
San Juan Update m- CEc
Rulemaking Affecting Coal Plants
Azusa Utility Board
January 23, 2012,.w
14 AZUSA
Lt GN i h W At EP.
The Sierra Club and the Natural Resources Defense
Council (NRDC) filed a joint Petition with CEC related
to SB 1368.
SB 1368 forbids California utilities from contracting for
new coal energy for more than 5 years
It also forbids utilities from making investments in
existing coal power plants that would extend life by
more than 5 years
The Petitioners allege that publicly -owned utilities are
making non-compliant investments
15 vv
AZUSA
U G H i b W Al ER
CEC
On January 12, the CEC approved the
Petition and established a "Rulemaking"
related to SB1368 compliance
A variety of impacted entities testified at the
meeting including Azusa
° CEC Chairman Weisenmiller will head up the
process
16
A Z U S A
LIGHT 8 WATER
The Petitioners specifically reference San
Juan and the ~$750M EPA -ordered NOx
control investments
Meetings are scheduled this month with a
CEC commissioners and staff
o Likely a slow process to resolve this matter
The uncertainty of the Rulemaking adversely
impacts Azusa's planned sale of San Juan
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17
AZUSA
LIGHT 8 W A+ E R
N ,• p o rl • n 1 MW Firm rm fel • ,', e �
Purchase f1•� ��,I- -�.IF , X111.
Azusa Utility Board
January 23, 2012
18 AZUSA
LIGHT & WATER
M. FNi �•� f-1 a �-t �.� � � �
° On January 12, the utility purchased 15 MW
of firm power for the third quarter of 2012.
Extremely low price of $31.44 per MWH.
Basis was to enhance probability that Azusa
can cost effectively and reliably serve peak
summer electric loads.
Concerns are uncertain coal availability due to
mine fire and possible transfer of San Juan to
buyers on July 1.
19
AZUSA
L I G H T 6 W A i E F
• Counterparty is CitiGroup Energy
• Authority for purchase under Azusa's
Power Risk Management Program
° Comparable cost of San Juan energy is
~$65 per MWH (versus, $31.44)
20
AZUSA
LIGHT 6 WATER
Athens Services
Proposal
Azusa Utility Board
November 28, 2011
21
AZUSA
L I G H S L+ W Ai ER
[��llflt�1
Athens Services is current trash collection service
provider in Azusa
Recently, Staff solicited Athens interest in developing
a program for commercial organics recycling.
In response, Athens proposed automated collection of
mixed waste and yard waste in the community (2
barrels)
At its November meeting, the Utility Board directed
staff to continue discussions with Athens and bring
back the item to the Utility Board
22
or CC in January
AZUSA
L I G H i & W p 1 E R
Automated trash collection to residents using black &
green 90 gallon barrels
Mixed waste to Athens MRF and green waste to
Puente Hills until closure then to Athens' organics
facility in Victorville
• City to buy compost from Athens, if needed. Annual
free compost giveaway for residents.
• Athens indemnify City against AB 939 fines if City
does not reach 50% waste diversion requirement
• No additional cost except for extra barrels if needed
t,V
• Request for 4 year contract extension,.
23 'rv�
AZUSA
l� G H T d WATER
° Upon clarification, Athens indicated they wished to
extend "evergreen" by 4 years (8 years to 12 years)
This was not acceptable to L&W staff who prefer not
to extend 8 year evergreen as it limits future flexibility
Compromise scenario:
— Azusa will not exercise evergreen during next eight years and
would have the right to bid out waste processing services at
the end of this period. Athens would have the right to match.
Athens requested that street sweeping services be
added to the waste contract. (Staff is reviewing.)
24
AZUSA
LIGHT & VIAI EF
Athens original proposal left this item for future
discussion
Staff indicated a preference for a relatively low price
for first extra barrel of each color with a higher price
for second and subsequent barrels
Pricing of $4 for first barrel of each color and $10 for
subsequent barrels is under discussion.
25
�rA j
AZUSA
lf6Hi 6 A'AT EH
City
Monrovia
Covina
West Covina
Sierra Madre
San Gabriel
Additional
90 Gallon "Black"
$20.55
$16.99
Information provided by Athens.
$5.78
$8.37
$10.05
26
Additional
90 Gallon "Green"
$1.94
$5.44
$5.79
$3.19
$7.20
-50
�v4
A Z U S A
LIGHT 6 WATER
1 '-1.1 ti =5-)) 111
Staff is soliciting feedback from the
Utility Board regarding:
— the concept of automated waste
recycling, and
—whether preliminary terms and
conditions support development of a
detailed contract amendment
27
Zyr�iv
A Z U S A
LIGHT d WATER
APPA National
Conference
Azusa Utility Board
January 23, 2012
28 AZUSA
L I G H T 6 W 4 1 E N
CITY OF AZUSA
MINUTES OF THE REGULAR MEETING
OF THE AZUSA UTILITY BOARD/CITY COUNCIL
MONDAY, NOVEMBER 28, 2011 — 6:30 P.M.
The Utility Board/City Council of the City of Azusa met in regular session, at the above date and time, at the
Azusa Light and Water Conference Room, located at 729 N. Azusa Avenue, Azusa, California.
Chairman Hanks called the meeting to order. Call to Order
Assistant Director of Resource Management Lehr led in the Flag Salute. Flag Salute
ROLL CALL Roll Call
PRESENT: BOARD MEMBERS: GONZALES, CARRILLO, MACIAS, HANKS, ROCHA
ABSENT: BOARD MEMBERS: NONE
ALSO PRESENT: Also Present
City Attorney Ferre, City Manager Delach, Assistant City Manager Makshanoff, Director ofUtilities Morrow,
Assistant to the Director of Utilities Kalscheuer, Assistant Director of Water Operations Anderson, Assistant
Director of Resource Management Lehr, Public Works Director/Assistant City Manager Haes, Lieutenant
Bertleson, Business Development/Public Benefits Coordinator Reid, Director of Economic and Community
Development Christiansen, City Clerk Mendoza, Deputy City Clerk Toscano.
PUBLIC PARTICIPATION Pub Part
Mr. Jorge Rosales addressed the Board Members stating that regarding item D-2 he commended staff that did J. Rosales
the analysis for the RFP, in Item D-3, he noted that it did not reference potential change order to construction Comments
contract, and with regard to item D-4, he thinks it's a good idea to cancel the meeting for December.
Mr. Art Morales addressed the Board Members thanking them for the brighter lights at the Senior Center A. Morales
Recyclables, noted the lampposts on Azusa Avenue are too bright, there are trucks parked on Azusa Avenue Comments
with debris, medal and junk which doesn't look good for the City, graffiti should be removed immediately,
shopping carts from Target are being taken off the property, and the Veterans Monument on Dalton should be
placed at Azusa and Foothill.
UTILITIES DIRECTOR COMMENTS Dir Comment
Director of Utilities Morrow addressed the Board Members regarding the Drought Tolerant Landscape
Dir of Utilities
Showcase Plaque Dedication and introduced Mr. Dave De Pinto of the San Gabriel Valley Municipal Water
Comments
District who thanked Mr. Morrow and Business Development/Public Benefits Coordinator Reid for helping
Water
005
with Water Conservation Projects. He introduced Mr. Ing, Teacher at Azusa High School and H2O Owl Conservation
Mascot for Water Conservation. Director of Water Projects Mr. Raul Romero addressed the Board Members Projects
providing details about the Water Conservation Projects.
Director of Utilities Morrow provided an update on the feasibility of relocating drop box to Azusa Avenue; Dir of Util
Board Members agreed it was fine where it is located. Comments
UTILITY BOARD MEMBER COMMENTS Brd Mbr Com
Board Member Macias noted that the Christmas lights on the poles on Azusa Avenue look great. Macias Com
The CONSENT CALENDAR consisting of Items D-1 through D-4, were approved by motion of Board Consent Cal
Member Carrillo, seconded by Board Member Gonzales and unanimously with the exception of item D-2 Appvd D-2
which was considered under the Special Call portion of the Agenda. Spec Call
1. The minutes of the regular meeting of October 24, 2011, were approved as written. Board Member Minutes appvd
Macias abstained as he was absent from this meeting.
2. SPECIAL CALL ITEM. Spec Call
3. Approval was given for additional payment of $19,000 to SA Associates for additional time spent Add'I payment
in their contract for the inspection of Water Main Replacement Project W -266A. SA Associates
4. Approval was given to cancel the Utility board Meeting of December 27, 2011. 12/27/11 Cncl
SPECIAL CALL ITEM Spec Call Item
2. Selection of Financial Advisor for Debt Refinancing. Fin Advsr Debt
Refinancing
Director of Utilities Morrow addressed the item stating that there is a need to change the item RFP Scope of Dir of Util
Work to eliminate Phase 3, provide ongoing financial advisory services. This changes the low bidder to Urban Comments
Futures.
Moved by Board Member Carrillo, seconded by Board Member Macias and unanimously carried to approve Urban Future
Phase 1 and Phase 2 of the project at this time and approve the selection of Urban Futures as Financial Advisor Approved
to Azusa Light & Water in an amount of $21,750.
SCHEDULEDITEMS
San Juan Unit 3 Firming Agreement Between Azusa and Arizona Public Service
Sched Items
Fin Sec Agmts
Assistant Director of Resource Management Lehr presented the item stating the importance to continue with Asst Dir Res
this agreement. He noted the change premium, responded to questions posed by Board Member regarding Mngmt Lehr
firming. Comments
Moved by Board Member Rocha, seconded by Board Member Gonzales and unanimously carried to authorize Firming Agmt
Staff to renew firming agreement for San Juan Unit 3 with Arizona Public Service (APS) and authorize the w/APS
Director of Utilities to execute the final agreement with APS. Approved
Local Adoption of SBX 1 2 Mandated Renewable Portfolio Standard (RPS) Enforcement Program.RPS Efrcmnt
Prgm
Director of Utilities Morrow presented the RPS Enforcement Plan which establishes the Utility Board's
jurisdiction over the Azusa RPS program. It requires staff to update Azusa's present RPS to comply with
SBXI 2. He stated a 30 day notice was published in the paper as required and on the L&W website.
Discussion was held.
11/28/11 PAGE TWO
MM
Member Macias offered a Resolution entitled:
A RESOLUTION OF THE AZUSA UTILITY BOARD ADOPTING A RENEWABLE PORTFOLIO Res. 11-C86
STANDARD (RPS) ENFORCEMENT PROGRAM IN COMPLIANCE WITH STATE LAW (SBX 12). RPS Enforce -
Ment Program
Moved by Board Member Macias, seconded by Board Member Carrillo to waive further reading and adopt.
Resolution passed and adopted by the following vote of the Board:
AYES: BOARD MEMBERS: GONZALES, CARRILLO, MACIAS, HANKS, ROCHA
NOES: BOARD MEMBERS: NONE
ABSENT: BOARD MEMBERS: NONE
Recalculation of Azusa's Transmission Revenue Requirement and Updates and Revisions to Azusa Azusa
Transmission Tariff.
Transmission
Tariff
Assistant Director of Resource Management Lehr presented the recalculation of Azusa's Transmission
Y. Lehr
Revenue requirement and approval of updates and revisions to Azusa's Transmission Tariff. He noted that the
Comments
recalculation could recoup approximately $500K per year and the cost of the recalculation and filing with
FERC is about $50K.
Board Member Macias offered a Resolution entitled:
A RESOLUTION OF THE AZUSA UTILITY BOARD REVISING AND UPDATING THE AZUSA Res. I1 -C87
TRANSMISSION TARIFF AND TRANSMISSION REVENUE REQUIREMENT. Revising &
Updating
Moved by Board Member Macias, seconded by Board Member Carrillo to waive further reading and adopt. Tariff &
Resolution passed and adopted by the following vote of the Board: Transmission
Revenue
AYES: BOARD MEMBERS: GONZALES, CARRILLO, MACIAS, HANKS, ROCHA
NOES: BOARD MEMBERS: NONE
ABSENT: BOARD MEMBERS: NONE
Consideration of Athens Services' Proposal Athens Svs
Proposal
Assistant to the Director of Utilities Kalscheuer presented the proposal by Athens Services for automated Lengthy
residential trash collection services and commercial organic waste collection program. He detailed the Discussion
proposal, and lengthy discussion was held between Board Members, Staff and Mr. Dennis Chiappetta of Referred to
Athens Services. It was consensus of the Board Members that Staff should continue to meet with Athens and future City
schedule a presentation at future City Council meeting in order to receive additional feedback. Council mtg
STAFF REPORTS/COMMUNICATIONS Staff Reports
Director of Utilities Morrow provided an update on San Juan Power Plant Matters and detailed the following: San Juan
Coal Mine Fire, EPA "Bart" Order, Sierra Club Lawsuit, New Coal Contract Negotiations, and UAMPS Power
Agreement.
Moved by Board Member Carrillo, seconded by Board Member Gonzales and unanimously carried to adjourn. Adjourn
TIME OF ADJOURNMENT 8:10 P.M.
SECRETARY
NEXT RESOLUTION NO. 11-C88.
11/28/11 PAGE THREE
007
D Vak 01 9b
AZ.ISA
ani a SA
CONSENT CALENDAR
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY
BOARD
FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES
DATE: JANUARY 23, 2012
SUBJECT: FUNDING REQUEST BY CALIFORNIA RESOURCE CONNECTIONS,
INCORPORATED
RECOMMENDATION
That the Azusa Utility Board approve funding request by California Resource Connections, Inc.
(CRC) in amount of $5,525 to conduct a backyard compost workshop on April 14, 2012.
BACKGROUND
Attached proposal from CRC is to conduct a Smart Gardening and Composting Workshop on
Saturday, April 14, 2012, at Memorial Park North Recreation Center adjacent to the newly
constructed Azusa Community Garden.
CRC's proposal describes the program in some detail, including in-kind contributions and
resources. Funding request for the composting workshop is $5,525 which includes workshop
planning, coordination, presentation stipend, reporting, and the cost to purchase 20 compost bins
and 4 worm bins. Compost bins and worm bins would be given away at the event free to Azusa
residents. The budgeted cost of these bins makes up $1,850 of the total budget for this program.
Considering prior year participation and outcomes, including voluntary and in-kind contributions
made, staff recommends support of CRC's proposed program in the amount requested. It is
understood that reports would be provided by CRC to the City following the event on how the
funds were used and the level of public participation achieved at the event.
FISCAL IMPACT
Fiscal impact is $5,525 from account 39-40-750-065-6625, AB 939 Fee Fund.
Prepared by: Cary Kalscheuer, Assistant to the Director of Utilities
Liza Cawte, Sr. Administrative Technician
is
CALIFORNIA RESOURCE CONNECTIONS, INC,
1201 N. Azusa Avenue • Azusa, CA 91702 • 626.969.2491 • www.watershedconnections.org
RESEARCH • EDUCATION • ACTION • LAND
To: Azusa Utility Board
From: Suzanne Avila, Program Director
California Resource Connections, Inc.
Date: January 18, 2012
Re: Funding Request for 2012 Smart Gardening Composting Workshop
California Resource Connections, Inc. (CRC), along with partners Azusa Recreation
and Family Services, and California Conservation Corps (CCC), are proposing a Smart
Gardening Composting Workshop at Azusa's Memorial Park North Recreation Center
event to be conducted as part of the City of Azusa's 2012 Clean and Green activities.
This event exemplifies an environmentally -conscious program that is community-based
and has an educational activity as a main component. The goal of providing this
program is to demonstrate backyard composting, including worm composting, grass
recycling and water -wise gardening. CRC and its main partners will work with several
City of Azusa departments to develop and produce the event and will outreach to a
number of community organizations to build our partnership base.
Program description for the proposed event is listed below, followed by a detailed
budget outlining associated costs. Additional application questions are also addressed.
It is a pleasure working with the City of Azusa in creating and developing environmental
programs in the Canyon City. If awarded funding, this will be the fifth year that CRC has
hosted this event on behalf of the City. To date we have given away 150 composting
bins to Azusa Residents, complete with educational materials on how to use the bins
successfully.
009
2012 Environmental Program/Activity Application
EVENT #1 SMART GARDENING COMPOSTING WORKSHOP
Saturday, April 14, 2012 9:00 am —11:30 am
North Recreation Center/ Azusa Community Garden
Memorial Park
340 N. Orange Place
Azusa, CA 91702
1. Description of program:
The goal of this event is to educate residents on smart gardening techniques,
including backyard composting and water -wise gardening. Outreach is to Azusa
families and the community at large. Free compost bins for the first fifty (50) Azusa
residents in attendance will be advertised prominently as a draw (proof of residency
required/one per household). This funding request includes the purchase of only 24
composting bins as CRC has 26 bins in storage at the Azusa Community Garden
that were left over from the 2011 event.
Morning activities begin with a sign -in sheet where participant's names and
addresses are collected and checked against those that received a free bin in
previous years (2008 to the present). Brief welcoming remarks are made,
introducing the Master Gardener who conducts educational demonstrations on
backyard composting, vermiculture (worm composting), grass recycling, water -wise
gardening, and fire -wise gardening. The workshop will conclude with a brief
discussion on the health benefits of gardening presented by the Neighborhood
Wellness Center, followed by an invitation for those in attendance to visit the new
Azusa Community Garden where a live composting demonstration and seed
exchange is taking place. Composting bins are then distributed to those in
attendance with help from the California Conservation Corps. Additional educational
materials regarding sustainable practices will be available in the Community Garden
for participants to take home (i.e. websites, book titles, journals, regional native plant
sites, future watershed related events, etc.)
This event is being planned for a total of 50 participants (estimate is based on
average attendance at past composting workshops held 2008 to 2011).
2. Dates when program or activities will be carried out:
Saturday, April 14, 2012, 9:00 am —11:30 am
3. Description of how program helps the City comply with environmental
regulations:
I c
Composting is not only a healthy practice for building rich garden soil; it is an easily -
accomplished component of building a more sustainable home. By teaching
residents to compost appropriate green waste at home, material that would
otherwise be disposed of, this program helps the City comply with required landfill
waste reduction programs:
Communicating directly with Azusa Light and Water Representative (s) will be a
guiding component of planning the event. All data gathered from participants will be
solicited and compiled according to the requirements of Azusa Light and Water
Department.
4. Description of Target Audience:
Teenagers to Adults
5. Description of How Program will be advertised and marketed:
Assemblymember Roger Hernandez, 57th Assembly District, California Legislature
Azusa Beautiful Community Volunteers
Azusa Chamber of Commerce
Azusa Community Garden Network
Azusa Herald
Azusa Historical Society membership
Azusa Pacific University
Azusa Unified School District
Azusa Woman's Club Newsletter
Citrus Community College
City of Azusa
On-line calendar
City Council meetings during public participation
City hall marquee
Library community information area
Light & Water Clean and Green Campaign
Rotating cable bulletin
CREEC—LA (California Regional Environmental Education Community — Los
Angeles)
Friends of the Azusa City Library newsletter
Neighborhood Wellness Center, Azusa
Los Angeles County Dept of Public Works, Environmental Programs Division
Los Angeles County UC Cooperative Extension, Master Gardening Program
Rain Bird Corporation Employee Volunteers
San Gabriel and Lower Los Angeles Rivers and Mountains Conservancy website
San Gabriel Canyon Gateway Center community information area
San Gabriel Valley Examiner
San Gabriel Valley Municipal Water District
011
San Gabriel Valley Tribune
Senator Ed Hernandez, 24th Senate District, California Legislature
Vulcan Materials Company Employee Volunteers
6. Description of Materials to be used in conducting outreach or activities:
A descriptive flyer and press release will be created and translated into Spanish,
then distributed as described in #5 above. Composting workshops will utilize
presentation boards, demonstration bins for various forms of composting, compost
samples, and other handouts during the implementation of the workshop. Compost
bins will be given away as described above.
7. List of all costs associated with program or activities:
See Program Budget outlined in chart on Page 9.
8. Description of funding from other agencies or in-kind labor/volunteers:
IN-KIND LABOR / VOLUNTEERS
SPONSOR
INCOME
RESOURCE
Azusa Community Garden
In -Kind
Composting demonstration and seed
Network
exchange
Azusa Light & Water
In -Kind
City conservation calendars;
educational materials
Azusa Recreation and Family
In -Kind
Use of North Recreation Center,
Services
equipment (easy up tents, chairs,
tables
California Conservation Corps
In -Kind
Event preparation and tear down,
dissemination of composting bins,
parking control
Los Angeles County, Dept of
In -Kind
Smart Gardening Presentation by
Public Works, Environmental
Master Gardener
Programs Division
Los Angeles County, UC
In -Kind
Master Gardener Xilonin Crux -
Cooperative Extension Master
Gonzalez providing Smart
Gardener Program
Gardening information
Neighborhood Wellness
In -Kind
Presentation on health benefits
Center, Azusa
Rain Bird Corporation
In -Kind
Water -wise gardening public
information
San Gabriel Valley Municipal
In -Kind
Bottled water
Water District
rd
REA
9. Description of how program results will be measured and reported to the City:
Data on participants and outcomes will be collected at the event, along with
organizational information such as number of volunteer hours received, in kind
donations and amount of contributions. CRC shall provide the City with a report by
July 31, 2012 of all outcomes, including participant data, any survey information
collected, and a final budget showing all expenditures.
2012 Program Budget
013
ESTIMATED
EVENT 1 MATERIALS
FUNDING
PARTNER
NEEDED
REQUESTED
CONTRIBUTION
TOTAL
1 Smart Gardening Compo tinWorkshop
Program Planner(s) stipend for
$3,375.00
$3,375.00
45.0 hours $75.00/hour
24 Composting Bins =
$1,850.00
$1,850.00
20 Soil Savers+4 Worm
($70.00 each + $90.00 each;
including worm cards, tax, and
shipping)
Creation, Translation, Duplication,
$300.00
$300.00
and Distribution of Outreach
Materials
Azusa Community Garden
$350.00
$350.00
Network composting
demonstration and seed
exchange
Azusa Light and Water donation
$300.00
$300.00
of conservation calendars and
educational materials
Azusa Recreation and Family
$1,800.00
$1,800.00
Services donation of NRC facility,
Community Garden and
equipment (easy up tents, tables,
chairs
California Conservation Corps
$1,200.00
$1,200.00
donation of Corps Members/Event
Leaders (12 hours @ $28.00
hour), Use of equipment (trucks,
van, clean u
Los Angeles County, Dept of
$500.00
$500.00
Public Works, Environmental
Programs Division Smart
Gardening Presentation by Master
Gardener
Los Angeles County, UC
$250.00
$250.00
Cooperative Extension Master
Gardener Xilonin Crux -Gonzalez
providing Smart Gardening
information
013
Program Partners:
The following organizations will be contacted for partnership opportunities
Corporate Sponsor
■ Athens Services
• EI Nativo Growers
Rain Bird Corporation
Vulcan Materials Company
Waste Management
Wafer Agencies
■ Azusa Light and Water
■ San Gabriel River Water Committee
• San Gabriel Valley Municipal Water District
014
ESTIMATED
EVENT/ MATERIALS
FUNDING
PARTNER
NEEDED
REQUESTED
CONTRIBUTION
TOTAL
Neighborhood Wellness Center
$250.00
$250.00
presentation on health benefits of
gardening
Rain Bird Corporation donation of
$300.00
$300.00
water -wise gardening public
information
San Gabriel Valley Municipal
$100.00
$100.00
Water District donation of bottled
water
Event Total
$5,525.00
$5,050.00
$10,575.00
TOTAL AMOUNT
$5,525.00
REQUESTED FOR EVENT
Program Partners:
The following organizations will be contacted for partnership opportunities
Corporate Sponsor
■ Athens Services
• EI Nativo Growers
Rain Bird Corporation
Vulcan Materials Company
Waste Management
Wafer Agencies
■ Azusa Light and Water
■ San Gabriel River Water Committee
• San Gabriel Valley Municipal Water District
014
A7LSALIGNT
CONSENT CALENDAR
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY
BOARD
FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES
DATE: JANUARY 23, 2012 4�1� 7
SUBJECT: REQUEST FOR APPROVAL TO MODIFY RULES & REGULATIONS
SCHEDULE RL, RESIDENTIAL SERVICE WITH LIFE-SUPPORT DEVICES
RECOMMENDATION
It is recommended that the Utility Board approve of attached changes to Azusa Light & Water's
Rules & Regulations Schedule RL, Residential Service with Life -Support Devices, to include
apnea monitors, kidney dialysis machines, and heart monitors, provided this equipment runs on
electricity supplied by Azusa Light & Water.
BACKGROUND
Azusa Light & Water has a special rate to provide for a lifeline quantity of electricity for eligible
residential customers who have a full-time member of their household who requires the use of an
essential life-support device including heating and/or cooling as medically required for certain
serious illnesses. Customers complete an application that includes a doctor's certification of the
medical equipment needed. The equipment is then verified by a personal visit from a Customer
Service Field Service Representative. An annual recertification may also be required.
If all requirements are met the application is approved and the discount amount is calculated and
applied to customer bills. The amount of energy used by the life-support equipment is charged at
the first tier, currently a savings of $0.0327 per kWh. This is the same method used by Southern
California Edison and The Gas Company.
Patients requiring the use of life-support equipment are advised to consider providing and
maintaining their own power backup system, such as a portable gas -driven generator. While
Azusa Light & Water makes every effort to supply uninterrupted service, continuous service
015
Life Support Devices
January 23, 2012
Page 2
cannot be guaranteed. Power outages may be caused by circumstances beyond Azusa Light &
Water's control.
Recently a comparison was made of life-support devices with those of Southern California
Edison and the Southern California Gas Company. The addition of apnea monitors, kidney
dialysis machines, and heart monitors can benefit certain members of the Azusa community and
we are requesting these be added to our program.
FISCAL IMPACT
Estimated annual reduction in electric revenue should be less than $1,000.
Prepared by:
Karen Vanca, Assistant Director - Customer Care & Solutions
Attachments:
Proposed Changes to Azusa Light & Water Rules & Regulations
Medical Life Support Equipment/Medical Baseline Discount Comparison
HE
e
Exhibit A
ELECTRIC RULE CHANGES
Changes to take effect February 1, 2012, text to be deleted is highlighted in strikeout.
Changes to take effect February 1, 2012, text to be added is highlighted in underline.
Text that is not highlighted is current and is being provided for context and reference.
Amendment to Schedule RL RESIDENTIAL SERVICE WITH LIFE-SUPPORT DEVICES
Special Conditions:
Each eligible residential customer may be allowed an additional lifeline quantity of
electricity, upon application to the utility where such customer provides certification that
full-time resident of the household regularly requires the use of an essential life-support
device which is defined below, including heating and/or cooling as medically required for
listed serious illnesses:
Aerosol tents
Apnea monitors
Compressors
Compromising Immune
System illnesses
Heart monitors
Hemodialysis machines
Electrostatic nebulizers
IPPB machines
Iron lungs
Kidney dialysis machines
Life-threatening illnesses
Motorized wheelchairs
Multiple Sclerosis
Paraplegia
Pressure pads
Pressure pumps
Quadriplegia
Respirators (all types)
Scleroderma
Suction machines
Ultrasonic nebulizers
017
Azusa Light and Water
Medical Life Support Equipment/Medical Baseline Discount Comparison
HE
I Azusa
SCE Gas Co.*
Aerosol- tents-
X
I
X -F
Compressors
- X 1
X
Compromising immune system illnesses
! X
X
Hemodialysis machines
L X X
i X
- - --
Electrostatic Nebu- ---
lizers
- - -- — --
- - --
_ -X-
- -
X
X
X
Electric Nerve Stimulators
IPPB machines
X
Iron lungs
X
X
Life-threatening illnesses
X
Motorized wheelchairs
X
X
Multiple Sclerosis
X
X
Paraplegia X X
-
Pressure Pads - - X - X---- - - -
Pressure Pumps - X X
- - --
Quadmplegia X X
Respirators (incl. CPAP) X X
Scleroderma X X
Suction machines j X X
Ultrasonic Nebulizers X X
Apnea monitors "" �— X
Kidney dialysis machines
Heart monitor **
* Plus any device which uses mechanical or artificial means to sustain, restore, or
supplant a vital function and the device is run on natural gas supplied by So -Cal -as.
** Devices proposed to be added to program 1/21/2012
�
I
kv/1-3-12/medical device comparison
HE
AZUSA
. W1111
CONSENT CALENDAR
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY
BOARD
FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES
DATE: JANUARY 23, 2012
SUBJECT: APPROVE THE SPECIFICATIONS FOR A FLATBED DUMP TRUCK AND
PURCHASE OF THE TRUCK BY USING CITY'S ALTERNATIVE
PURCHASING PROCEDURE.
RECOMMENDATION
It is recommended that the Utility Board (i) approve the Specification for a replacement Electric
Division flatbed dump truck and (ii) approve the purchase of the flatbed dump truck from
Downtown Ford Sales in the amount not -to -exceed $67,485.25 including delivery & applicable
taxes.
BACKGROUND
The Electric Division has a 25 year old flatbed dump truck that is used in handling/delivery of
materials and other heavy electrical equipment during construction and routine maintenance
work on electric power lines. The aging flatbed dump truck has reached its useful economic life
due to its age and limited availability of repair parts. In view of future escalating repair &
maintenance expenses, including safety concerns related to its continued operation, the truck's
replacement was approved in this year's operating budget.
Pursuant to the City's Municipal Code under Alternative Purchasing Procedures, public bidding
for purchasing equipment can be waived if an existing competitive bid has already been solicited
for the purchase of similar equipment. Staff have determined that State of California's Contract
# 1-11-23-20, which specified the purchase of a flatbed dump truck, meets the Electric
Division's requirements and specifications. Therefore, staff confirmed the bid with Downtown
Ford Sales for a 2012 Ford Model F650 flatbed dump truck and is recommending award of the
purchase to same vendor pursuant to Azusa's alternative purchasing procedure.
019
Flatbed Dump Truck
January 23, 2012
Page 2 of 2
FISCAL IMPACT
This equipment purchase is budgeted this fiscal year in account 33-40-733-920-7135 and funds
are available for this purchase.
Prepared by: F. Langit Jr. — Assistant Director — Electric Operations
D. Crapo — Acting Electric Distribution Supervisor
020
CONSENT CALENDAR
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE USA
UTILITY BOARD
FROM: GEORGE MORROW, DIRECTOR OF UTILITIES
DATE: JANUARY 23, 2012
SUBJECT: AUTHORIZATION TO REGISTER AZUSA WITH CALIFORNIA
CAP -AND -TRADE PROGRAM FOR GHG COMPLIANCE AND
HOLDING ACCOUNTS IN ACCORDANCE WITH AB32
REGULATIONS
RECOMMENDATION
It is recommended that the Utility Board authorize the Director of Utilities or his
designee to register Azusa with California GHG program for GHG compliance and
holding accounts and to administer such in accordance with AB32 regulations.
BACKGROUND
In 2006, Assembly Bill 32 (AB32), the Global Warming Solutions Act of 2006, became
law. Key objective of the law is to limit emission of green house gases (GHG) in
California to 1990 levels by the year 2020.
AB32 directed the California Air Resources Board (CARB) to develop a plan on how to
best achieve the AB32 goals and create pertinent regulations and enforcement
mechanisms. In general, any California business/industry sector involved in processes
that lead to emission of greenhouse gases, electric utilities included, is subject to the law.
In case of California electric utilities, the law covers all state based generation as well as
all electricity imported into the state.
Through a lengthy public process, CARB developed regulations and market mechanisms
to reduce GHG emissions produced by electric utilities. The Cap -and -Trade program is
the cornerstone component of the CARB-developed GHG market mechanism. The Cap -
and -Trade program became effective on January 1, 2012 and covers the period through
December 31, 2020, however, enforcement of the program will begin on January 1, 2013.
021
Registration with CARB GHG Cap -and -Trade Program
January 23, 2012
Page 2
Under Cap -and -Trade, "covered entities" (i.e. entities subject to enforcement under the
program) are given the "right" to emit limited volumes of CO2 equivalent greenhouse
gases per year. The right to emit is conveyed by means of Allowances -- issued,
controlled and awarded to covered entities by the CARB. Based on a given entity's
historic CO2 emissions, covered entities are awarded a number of free annual Allowances
for the years 2013-2020. The volume of free Allowances decline linearly such that the
overall decline during the 2013 to 2020 period is about 15%. Covered entities whose
emissions exceed the free Allowance coverage need to buy Allowances (or carbon
Offsets) from the market or face steep CARB penalties.
In accordance with Cap -and Trade rules, a covered entity must register with CARB and
open two accounts for Allowances (and Offsets) — a Holding Account and Compliance
Account. The Holding Account is used for Allowance and Offset depositing, banking,
transacting, and transfers. The Compliance Account is used for Allowance and Offset
"retirement" as part of the compliance process.
In order to register with Cap -and -Trade, Azusa must submit to CARB the names of the
authorized primary and alternate representatives along with information on their
functions at the company. Once properly registered, the authorized representatives will be
empowered by CARB to receive, transfer, transact and surrender Allowances and/or
Offsets for the purpose of compliance with AB32 regulations. It is recommended the
Director of Utilities be authorized to undertake these actions on behalf of Azusa.
FISCAL IMPACT
There is no fiscal impact of making the designations recommended in this report.
Prepared by: Yarek Lehr, Assistant Director of Resource Management
022
Dw. (a,
TO: HONORABLE CHAIRPERSON AND MEMBERS C
BOARD
FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES
DATE: JANUARY 23, 2012
AZUSA
EIGHT A WATER
CONSENT CALENDAR
UTILITY
SUBJECT: ADDITION OF $90,000 TO THE BLANKET PURCHASE ORDER OF
STERLING WATER TECHNOLOGIES, LLC
RECOMMENDATION
I
It is recommended that the Utility Board approve the addition of $90,000 to the blanket purchase
order of Sterling Water Technologies, LLC.
BACKGROUND
Sterling Water Technologies, LLC is the Water Division's supplier of chemicals necessary for
the operation of the Membrane Filter Water Treatment Plant. The purchase of chemicals for the
Plant has been budgeted in the Operations and Maintenance Budget for FY 2011-12 in the
amount of $400,000. The original blanket purchase order for Sterling Water Technologies was
funded in the amount of $79,500. An increase of $90,000 is required due to the use of more
chemicals to supply 50% of water system demand from the Treatment Plant.
FISCAL IMPACT
The fiscal impact of this approval is $90,000. Adequate funds are available from approved FY
2011-12 Operations and Maintenance Budget Account 32-40-722-744-6563. This brings the
total approved amount of the Sterling Technologies blanket purchase order to $169,500.
Prepared by:
Chet F. Anderson, P.E., Assistant Director- Water Operations
023
4
AGENDA ITEM
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE SA
UTILITY BOARD
FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES
DATE: JANUARY 23, 2012
SUBJECT: REFUNDING OF WATER UTILITY LONG TERM DEBT — 2003
CERTIFICATES OF PARTICIPATION IN AMOUNT OF ABOUT $11.6
MILLION
RECOMMENDATION
It is recommended that the Utility Board approve the following items:
I . Authorize staff to commence work to refinance outstanding debt associated with
2003 issuance of Series A Certificates of Participation (COP) in amount of about
$11.6 million;
2. Approve scopes of work included in this report for two requests for proposals: (a)
bond and disclosurecounsel; and (b) underwriter services; and
3. Authorize staff to solicit proposals for respective professional services necessary
to prepare refinancing documents.
BACKGROUND
In November 2011, the Utility Board approved the selection of Urban Futures to evaluate
the savings that would result from refinancing outstanding long term debt associated with
the 2003 Series A Certificates of Participation (COP). The 2003 debt was issued to
refinance revenue bonds issued in 1993 to purchase the Azusa Valley Water Company.
On January 5, 2012, staff met a second time with Urban Futures, and they are
recommending that Azusa Light & Water proceed immediately with an advanced
refunding of the Series A COP debt in amount of about $11.6 million in order to take
advantage of the current favorable interest rate environment.
Although the existing outstanding debt has some restrictions on it in terms of what can be
refunded, Urban Futures believes that about 83% of the existing principal can be
024
Series A COP Refunding
January 23, 2012
Page 2
refinanced. While the average yield on existing COP is about 4.58%, the average yield
on refunded bonds would be about 1.83% based on current rates, and so significant
savings appear possible by refinancing now.
Urban Futures estimates that the Net Present Value (NPV) savings Azusa Light & Water
would realize from refinancing is 11.5% or about $1.3 million over the remaining term of
the debt through 2023. The annual cash flow savings would be about $150,000 during
most years. Based on this forecast, staff is recommending that we proceed with the
refinancing.
In order to move forward, Bond and Disclosure Counsel must be retained by Azusa Light
& Water, and an Underwriter needs to be selected. Since these are professional services
that will likely be in excess of $20,000, our purchasing policies require Utility Board or
City Council approval of the Scopes of Work for these services, and then approval of the
final proposals.
Below encompasses the draft scopes of work for the respective services:
Bond Counsel
• Prepare and review legal documentation necessary to refinance the 2003 Series A
Certificates of Participation;
• Provide legal opinion regarding the amount of outstanding debt that is eligible for
refunding based on 1993 Revenue Bond issuance, the 2003 refunding documents,
and any other pertinent documents;
• Prepare resolutions necessary for approval by the Utility Board / City Council;
• As required, attend meetings and/or conference calls to provide guidance and legal
advice to the finance team in connection with California and Federal Tax Law;
• As required, attend meetings of the Utility Board / City Council in which matters
concerning the proposed transaction will be considered;
• Provide necessary approving legal opinions, including but not limited to an opinion
indicating that the income paid to investors is exempt from State of California and
Federal income taxation; and
• Memorialize the proposed transaction.
Disclosure Counsel
• Review the documents approved in connection with the 2003 Series A Certificates
of Participation;
• Prepare appropriate disclosure documents describing the proposed transaction to
meet federal securities law;
• Review all resolutions necessary for approval by the governing body(s);
• Attend all meetings and/or conference calls to provide guidance advice to the
finance team in connection with federal securities law; -
025
a
Series A COP Refunding
January 23, 2012
Page 3
• If requested, attend meetings of the Utility Board / City Council in which matters
concerning the proposed transaction will be considered; and
• Provide a legal opinion to the effect that the disclosure documentation contains no
misstatements, or omissions of material facts in accordance with Section 10 (b) 5 of
Federal securities laws and the regulations promulgated thereunder.
Underwriter Services
• Underwrite revenue bonds or COP issuance during 2012 to refund 2003 Series A
COP outstanding balance of about $11.6 million;
• Assist in preparation, printing and dissemination of the preliminary and final official
statement and other necessary disclosure documents;
• Assist in the preparation of rating agency presentations to ensure that Water
Utility's credit standing is being presented accurately and completely;
• Assume primary responsibility for all activities associated with marketing of
securities including the development and execution of a suitable marketing plan;
• Assist in the preparation and evaluation of alternative financing scenarios; this
might include comparing and contrasting traditional tax exempt bonds and any other
alternatives in the market;
• Assist in the preparation and execution of closing documents associated with this
refinancing; and
• Work with financial team as required, including City Staff, Financial Advisor, Bond
Counsel, and the Trustee, to effect this refinancing.
Given favorable rates now in the municipal bond market, staff plans to send out RFPs as
soon as possible and propose approval of recommended service providers at next
meeting.
FISCAL IMPACT
All costs for professional services related to this refinancing will be paid out of the
refunding proceeds. The fiscal impact of professional service providers will be reported
at next meeting when staff recommends approval of firms responding to the RFPs.
Refunding, as noted in this report, is currently expected to save about $150,000 annually
during most years based on today's rates or render a net present value savings of about
$1.3 million through the year 2023.
Prepared by: Cary Kalscheuer, Assistant to the Director of Utilities
Attachment: Refunding Analysis by Urban Futures
026
Exhibit A: Current Cash Flows (2003A COPS Refinancing)
SOURCES AND USES OF FUNDS
Azusa Light & Water District
2012 Refunding Revenue Bonds (Series A)
Sources:
Bond Proceeds:
Par Amount
Premium
Other Sources of Funds:
9,990,000.00
1,171,518.95
11,161,518.95
Prior DSRF 1,299,000.00
12,460,518.95
Uses
Refunding Escrow Deposits:
PV cost of cach0ows 12,257,741.06
Delivery Date Expenses: .
Cost of Issuance 120,000.00
Underwriter's Discount 79,920.00
Other Uses of Funds:
199,920.00
Additional Proceeds 2,857.89
12,460,518.95
3
021
s
SAVINGS
Azusa Light & Water District
1,335,349.56
2012 Refunding Revenue Bonds (Series A)
2857,89
Present
Value to
03/012012
Prior Debt Prior Prior Net Refunding
Annual Q
Date Service Receipts Cob Flow Debt Service Savings
Savings 1.8308857%
7/12012 1,025,01443 4,330.00 1,020,684.43 111,966.67 908,717.76 908,717.76 903,213.87
1/12013 253,161.05 6,495.00 246,666.05 167,950.00 78,716.05 77,529.55
7/12013 1,038,985.05 6,495.00 1,032,490.05 957,950.00 74,540.05 153,256.10 72,750.50
1/12014 237,051.66 6,495.00 230,556.66 160,050.00 70,506.66 68,189.71
7/12014 1,056,137.66 6,495.00 1049,642.66 970,050.00 79,592.66 150,099.32 76,278.84
1/12015 219,646.08 6,495.00 213,151.08 151,950.00 61,201.08 58,120.92
7/12015 1,071,995.08 6,495.00 1,065,500.08 976,950.00 88,550.08 149,751.16 83,330.65
1/12016 200,894.41 6,495.00 194,399.41 143,700.00 50,699.41 47,278.22
7/12016 1090,663.41 6,49500 1,084,168.41 983,700.00 100,468.41 151,167.82 92838.92
1/12017 180,874.60 6,495.00 174,379.60 131,100.00 43,279.60 39,630.19
7112017 1,112,221.60 6,495.00 1,105,726.60 996,100.00 109,626.60 152906.20 99,472.09
1/12018 159,453.62 6,495.00 152958.62 118,12500 34,833.62 31,320.32
7/12018 1,132,378.62 6,495.00 1,125,883.62 1,008,125.00 117,758.62 152,592.24 104,921.07
1 /1 2019 136,346.65 6,495.00 129,851.65 104,77500 25,076.65 22,140.22
7/12019 1,155006.65 6,495.00 1,148,511.65 1024,775.00 123,736.65 148,813.30 108,256.28
1/12020 112,153.48 6,495.00 105,658.48 86,375.00 19,283.48 16,717.93
7/12020 1,180,707.48 6,495.00 1,174,212.48 1,041,375.00 132,837.48 152,120.96 114,119.57
1/12021 86,508.18 6,495.00 80,013.18 67,275.00 12,738.18 10,843.99
7/12021 1,200,798.18 6,495,00 1,194,303.18 1,057,275.00- 137,028.18 149,766.36 115,593.69
1/12022 59,347.36 6,495.00 52,852.36 47,475.00 5377.36 4,495.06
7/12022 1.23 1 ,846.36 6,495.00 1,225,351.36 1,077,475.00 147,876.36 153,253.72 122,492.00
1/12023 30,767.70 6,495.00 24,272.70 26,875.00 -2,602.30 -2,136.04
7/12023 1,261,475.70 1,305,495.00 -44019.30 1,101,875.00 -1,145,894.30 -1,148,496.60 -932,047.98
15,233,435.01 1,446,220.00 13,787,215.01 12,513,266.67 1,273 948.34 1,273 948.34 1,335,349.56
Savings Summary
PV of savings from cash flow
1,335,349.56
Plus: Refunding funds on hand
2857,89
Net PV Savings 1,338,207.45
4
028
BOND DEBT SERVICE
Azusa Light & Water District
2012 Refunding Revenue Bonds (Series A)
Period
Ending
Principal
Coupon
Interest
Debt Service
Annual Debt
Service
7/12012
111,966.67
111,966.67
111,966.67
1/12013
167,950.00
167,950.00
7/12013
790,000
2,000%
167,950.00
957,950.00
1,125,900.00
1/12014
160,050.00
160,050.00
7/12014
810,000
2.000%
160,050.00
970,050.00
1,130,100.00
1/12015
151,950.00
151,950.00
7/12015
825,000
2.000%
151,950.00
976,950.00
1,128,900.00
1/12016
143,700.00
143,700.00
1
7/12016
840,000
3.000%
143,700.00
983,700.00
1,127,400.00
1/1/2017
131,100.00
131,100.00
7/12017
865,000
3.000%
131,100.00
996,100.00
1,127,200.00
1/12018
118,125.00
118,125.00
7/12018
890,000
3.000%
118,125.00
1,008,125.00
1,126,250.00
I/l2019
104,775.00
104,775.00
7/12019
920,000
4.000%
104,775.00
1,024,775.00
1,129,550.00
1/12020
86,375.00
86,375.00
7/12020
955,000
4.000%
86,375.00
1,041,375.00
1,127,750.00
1/12021
67,275.00
67,275.00
7/12021
990,000
4.000%
67,275.00
1,057,275.00
1,124,550.00
1/12022
47,475.00
47,475.00
7/12022
1,030,000
4.000%
47,475.00
1,077,475.00
1,124,950.00
(/12023
26,875.00
26,875.00
7/12023
1,075,000
5.000%
26,875.00
1,101,875.00
1,128,750.00
9,990,000
2,523,266.67
12,513,266.67
12,513,266.67
5
029
C 041
AGENDA ITEM
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA
UTILITY BOARD
FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES
DATE: JANUARY 23, 2012
SUBJECT: FINANCIAL ADVISORY SERVICES TO REFUND ELECTRIC
UTILITY DEBT — 2003 CERTIFICATES OF PARTICIPATION
"SERIES B" IN AMOUNT OF ABOUT $5.3 MILLION
RECOMMENDATION
It is recommended that the Utility Board approve a professional services agreement with
Urban Futures in not -to -exceed amount of $19,550 to refinance outstanding debt
associated with 2003 issuance of Series B Certificates of Participation (COP) in amount
of about $5.3 million.
BACKGROUND
In 2003, the Electric Utility issued about $12 million in debt in the form of Certificates of
Participation (COP) to finance construction of the Kirkwall Substation and associated
facilities. The debt issuance was divided into two separate COP Series, a tax exempt
Series B and taxable Series C.
The Series C COP will be fully amortized by 2017, however, the Series B COP was a
$5.47 million interest only obligation up to 2017, with full amortization scheduled to
occur by 2023. The current principal on the Series B debt is about $5.35 million and the
average yield of COP is about 4.8%. Urban Futures believes that the Electric Utility can
refinance this debt at a lower rate, about 3.2% through loan placed with private bank.
Urban Futures analysis indicates that the Electric Utility could save about 7.7% by
refunding the Series B debt through a private placement. This savings is possible due to
the lower interest rates now available as cited above and by using a revised installment
payment schedule. This yields a net present value savings of about`$42.1;000)over the
remaining term of the loan, and an annual cash flow savings of about. $85;0
00
030
Series B COP Refunding
January 23, 2012
Page 2
Using private placement options to refinance debt usually reduces the cost of issuance
compared to issuing bonds, for example. For smaller issuances, such as the Series B
issuance, this can reduce our overall cost of borrowing. However, this depends on rates
in the bond market vs. private banks.
To effect the private placement of the Series B long term debt and payoff the existing
obligations, staff requested a proposal from Urban Futures since they were selected as the
Utility's Financial Advisor to refinance a portion of the Water Utility's outstanding debt.
Urban Future's proposal is attached and includes a not -to -exceed fee of $19,550. Staff is
recommending approval of this proposal through a professional services agreement with
funding to come from the Electric Fund, subject to the following understanding:
That Azusa Light & Water staff has the authority to have Urban Futures refinance the
Series B debt using a bond issuance if such option is deemed to save the electric utility
more money than a private placement. Urban Futures has consented verbally to allowing
the utility to exercise this option.
FISCAL IMPACT
Following approval of this item, staff will process a budget amendment in the amount of
$19,550 to provide funding for this professional service. The Utility will be billed for
hours worked, not -to -exceed total dollar amount of $19,550. Funds will come from
Electric Fund balance.
Prepared by:
Cary Kalscheuer, Assistant to the Director of Utilities
Attachments:
Urban Futures' Analysis of Series B COP
Urban Futures' Proposal for Private Placement
031
SOURCES AND USES OF FUNDS
Azusa Light & Water District
2012 Refunding Bonds (Series B)(Electric Utility)(Private Placement)
Sources:
Bond Proceeds
Par Amount 5,325,000.00
Other Sources of Funds:
Prior DSRF
547,000.00
5,872,000.00
Uses:
Refunding Escrow Deposits:
PV cost of cashilows
5,800,861.89
Delivery Date Expenses:
Cost of Issuance
70,000.00
Other Uses of Funds:
Additional Proceeds
1,138.11
5,872,000.00
6
032
SUMMARY OF REFUNDING RESULTS
Azusa Light & Water District
2012 Refunding Bonds (Series B)(Electric Utilily)(Private Placement)
Dated Date
- 3/1/2012
Delivery Date
3/12012
Arbitrage yield
3.200383%
Escrow yield
0.850000%
Bond Par Amount
5,325,000.00
True Interest Cost
3.200383%
Net Interest Cost
3.200000%
Average Coupon
3.200000%
Average Life
8.444
Par amount of refunded bonds 5,470,000.00
Average coupon of refunded bonds 4.842463%
Average life of refunded bonds 8.594
PV of prior debt to 03/012012 @ 3.200383%
6,178,467.49
Net PV Saving,
421,257.27
Percentage saving; of refunded bonds
7.701230%
Percentage savings of refunding bonds
7.910935%
7
033
SAVINGS
Azusa Light & Water District
2012 Refunding Bonds (Series B)(Electric Utility)(Private Placement)
Present
Value to
03/012012
Prior Debt Prior Prior Net Refunding Annual 3.2003832
Date Service Receipts Cash Flow Debt Service Savings Savings %
7/12012 131,718.75 1,823.33 129,895.42 101,800.00 28,09542 28,095.42 27,799.64
1/12013 131,718.75 2,735.00 128,983.75 84,480.00 44,503.75 43,341.68
7/12013 131,718.75 2,735.00 128,983.75- 89,480.00 39,503.75 84,007.50 37,866.30
1/12014 131,718.75 2,735.00 128,983.75 84,400.00 44,583.75 42,062.65
7/12014 131,718.75 2,735.00 128,983.75 89,400.00 39,583.75 84,167.50 36,757.20
1/12015 131,718.75 2,735.00 128,983.75 84,320.00 44,663.75 40,821.24
7/12015 131,718.75 2,735.00 128,983.75 89,320.00 39,663.75 84,327.50 35,680.44
1/12016 131,718.75 2,735.00 128,983.75 84,240.00 44,743.75 39,616.34
7/12016 131,718.75 2,735.00 128,983.75 89,240.00 39,743.75 84,487.50 34,635.09
1/12017 131,718.75 2,735.00 128,983.75 84,160.00 44,823.75 38,446.88
7/12017 696,718.75 2,735.00 693,983.75 654,160.00 39,823.75 84,647.50 33,620.22
1/12018 118,723.75 2,735.00 115,988.75 75,040.00 40,948.75 34,025.50
7/12018 843,723.75 2,735.00 840,988.75 795,040.00 45,948.75 86,897.50 37,578.81
1/12019 101,686.25 2,735.00 98,951.25 63,520.00 35,431.25 28,520.77
7/12019 861,686.25 2,735.00 858,951.25 808,520.00 50,431.25 85 862.50 39,955.82
1/12020 83,636.25 2,735.00 80,901.25 51,600.00 29,301.25 22,849.25
7/12020 878,636.25 2,735.00 875,901.25 821,600.00 54,301.25 83,602.50 41,677.44
1/12021 64,556.25 2,735.00 61,821.25 39,280.00 22,541.25 17,028.43
7/12021 899,556.25 2,735.00 896,821.25 834,280.00 62,541.25 85,082.50 46,501.69
1/12022 44,203.13 2,735.00 41,468.13 26,560.00 14,908.13 10,910.15
7/12022 919,203.13 2,735.00 916,468.13 846,560.00 69,908.13 84,816.26 50,354.79
1/12023 22,875.00 2,735.00 20,140.00 13,440.00 6,700.00 4,750.00
7/12023 937,875.00 549,735.00 388,140.00 853,440.00 465,300.00 -458,600.00 -324,681.17
7,790,267.51 608,993.33 7,181,274 18 6,763,880.00 417,394.18 417,394.18 420,119.16
Saving Summary
PV of saving from cash flow 420,119.16
Plus: Refunding funds on hand 1,138.11
Net PV Savings 421,257.27
8
n3I
VM URBAN FUTURES I I ncot-p orated
January 12, 2012
Mr. Cary Kalscheuer
Assistant to the Director of Utilities
City of Azusa
213 E. Foothill Blvd.
Azusa, CA 91702
Re: Scope of Work in Connection with a refunding Private Placement of the $5,470,000,
FARECAL Certificates of Participation, 2003 Series B (Electric System Capital
Improvements Program)
Dear Mr. Kalscheuer:
Pursuant to the proposed refinancing of the City of Azusa's FARECAL Certificates of
Participation, 2003 Series B (Electric System Capital Improvements Program) (the"2003B
Certificates") as a private placement issue, the following is an outline of the Scope of Work for
Financial Advisory Services provided by Urban Futures.
Evaluation of the FARECAL Certificates of Participation 2003 Series B debt structure
and credit quality to determine the feasibility of a refunding (completed)
2. Analysis of current market interest rates and modeling of financing scenarios to
determine the most cost- effective financing plan (traditional tax-exempt bonds vs.
private placement) (completed)
3. Preparation of necessary staff reports, staff and council presentations, and other
associated memoranda in connection with the financing.
4. Manage the bidding process for the selection of the private placement bank. This step
includes (but is not limited to): a) the structuring of refunding cash flows for solicitation of
bank bids, b) drafting of RFP documents and coordination with prospective bidders, c)
evaluation of bids and assistance to staff with the selection of the placement bank.
5. Manage the credit process on behalf of the City. The private placement bank will
internally evaluate the City's credit and that of the Electric Utility to determine the
feasibility of underwriting the transaction. This step will involve a conference call with the
bank, disclosure of certain pertinent financial information, preparation of information
packages, and the facilitation of ad-hoc data requests of the bank. Urban Futures will
work with the bank to answer questions and provide essential information to their credit
committee to ensure an expedient and successful approval.
3111 N. Tustin, Suve 230 Orange, CA 92865-1753 • (714) 283-9334 Business - (714) 283-5465 FAX
E -Mail financeadminga urbanfuturesinc.com
035
6. Coordinate the drafting and proofing of legal documents. UFI will work with the City's
preferred public finance attorney, or assist with the selection of new counsel if desired. In
general, the list of deliverables for a utility financing of this caliber would include an
Escrow Agreement, Installment Sale Agreement, Resolutions of the City Council and
Utility Board, Irrevocable Prepayment Instructions, and Arbitrage Certificate.
7. Prepare all council agenda items and present the financing to Utility Board and/or City
Council. This transaction has two milestones that require Board/Council Approval: 1)
approval of the financing, and 2) approval of documents. UFI's seasoned staff will
manage the approval process to ensure successful approval and execution of the
financing.
8. Coordinate the closing of the transaction. This step includes (but is not limited to) the
filing of necessary bond call notices by the Trustee, preparation of flow of funds memos,
coordination of the wire transfer process, and the finalization & signing of legal
documents.
9. As needed or unforseen work necessary for the successful completion of the financing.
It is our estimate the following hours will be needed to complete the above Scope
Engagement Staff
Rate
Hours
Fees
President.
$195.00
50
$9,750
Managing Principal
$160.00
30
$4,800
Associate
$125.00
40
$5,000
Not -To -Exceed Fee: $19,550
Thank you for the opportunity to continue our service to the City of Azusa. Should you have any
questions, please contact me at michaelb(a)urbanfuturesinc.com or (714) 335-2696.
Sincerely,
URBAN FUTURES INC.
Michael Busch
President and Chief Operating Officer
038
TO:
HONORABLE CHAIRPERSON AND MEMBERS Or
BOARD
FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES
DATE: JANUARY 23, 2012
A US.A
AGENDAITEM
UTILITY
SUBJECT: APPROVAL OF REQUEST FOR PROPOSALS TO PROVIDE ENGINEERING
SERVICES FOR SLUDGE HANDLING FACILITIES AT THE HSU-CANYON
MEMBRANE WATER FILTRATION PLANT AND AUTHORIZATION TO
SOLICIT PROPOSALS
RECOMMENDATION
It is recommended that the Utility Board approve the scope of work included in attached request
for proposals (RFP) for engineering services to conduct a feasibility study of sludge handling
alternatives for the Hsu -Canyon Membrane Water Filtration Plant (WFP) and authorize staff to
solicit proposals.
BACKGROUND
Azusa Light & Water has operated its low pressure membrane WFP for approximately two years
and has found that more sludge is produced by the treatment process than was anticipated during
the design of the WFP. Three sludge drying beds were constructed when the WFP was built
which are designed to dewater by evaporation, but the process of evaporation is complicated by
the location of the drying beds in the mouth of a canyon. The location of the -ponds subjects them
to low temperatures and rainfall during the winter months. Consequently, full evaporative effect
is difficult to achieve, particularly during the winter.
The purpose of this RFP is to sett an Engineering consultant to conduct afeasibility studyto
examine various types of sludge handling facilities to assist the drying ponds in dewatering the
waste sludge produced by the Water Filtration Plant.
FISCAL IMPACT.
The fiscal impact of this study will be reported following receipt of proposals.
Prepared by: Chet F. Anderson, P.E., Assistant Director- Water Operations
037
January ----, 2012
Consultant
Consultant
Consultant
City, CA Zip
Reference: Request for Proposals - Provide Engineering Services to Develop A
Feasibility Study For Sludge Handling Facilities At the Azusa Light & Water
Hsu -Canyon Membrane Treatment Filtration Plant
Gentlemen:
Azusa Light & Water (ALW) invites your proposal to perform the referenced engineering
services for a feasibility study of Sludge Handling Facilities for ALW's existing Hsu -Canyon
Membrane Treatment Filtration Plant (MFP)
General Description of the Project
Azusa Light & Water (ALW) currently owns and operates a nominal 16 MGD membrane
filtration plant near the mouth of San Gabriel Canyon in the City of Azusa. The plant is currently
equipped and permitted to produce 12 MGD.
The sources of water that are treated are delineated on page two of this RFP. Attached to this
RFP are analytic data for the MFP influent water from the various sources of water to the MFP.
Also attached to this RFP are test data of the MFP plant effluent that is discharged to the MFP
sludge drying beds.
ALW has operated its low pressure membrane MFP for approximately two years and has found
that more sludge is produced by the treatment process than was anticipated during the design of
the MFP. Three sludge drying beds were constructed when the MFP was built, each of which has
a surface area of 23,426 square feet, a volume of 726,000 gallons, and slopes to a depth of 5.5
feet at the overflow end of the bed. The drying beds are designed to dewater by evaporation, but
the process of evaporation is complicated by the location of the drying beds in the mouth of a
canyon. The location of the ponds subjects it to low temperatures and rainfall during the winter
months. Consequently, full evaporative effect is difficult to achieve, particularly during the
winter.
ALW formerly operated a 10 MGD Hardinge AB W filter plant located in two concrete and brick
buildings near the new MFP, which might be converted to house the new Sludge Handling
Facilities as determined by the Feasibility Study. Directly outside of the old filter plant buildings
are the sedimentation basins that formerly clarified the raw water being sent to the ABW filters.
The purpose of this project is to study alternative methods for handling the waste sludge
discharged from the MFP. In consultation with ALW staff, the consultant is to develop a
feasibility study to determine the best dewatering process and equipment available for handling
the solids produced by the MFP.
Sources of Water that are Treated
The Canyon Water Treatment Plant (MFP) currently receives water from three sources with the
possibility of a fourth source in the future:
1. Water that is impounded behind San Gabriel Dam is delivered to the MFP via the
Pasadena Conduit to the Committee of Nine (C9) Canal.
Water that is impounded behind Morris Dam is delivered to the MFP either via the
Pasadena Conduit to the C9 Canal or via the San Gabriel River through the Azusa Duarte
Tunnel to the C9 Canal.
3. Below Morris Dam, Metropolitan Water District of Southern California (MWD) has a
turnout, USG -3, which can deliver MWD raw water to the San Gabriel River for use
downstream.
4. San Gabriel Valley MWD (SGVMWD), of which ALW is a member agency, is a State
Water Project contract agency, and delivers water directly to the Canyon Basin spreading
grounds to the southwest of the MFP. There is a future connection planned from the MFP
directly to the SGVMWD line and piping State Project Water to the MFP for treatment.
Scope of Services
The consulting firm chosen to perform engineering services for a feasibility study for Sludge
Handling Facilities for ALW's existing MFP shall provide the following:
Establish the parameters under which the Sludge Handling Facilities feasibility study will
be accomplished. The Feasibility Study will consider particle characteristics of the water
being treated by the MFP; concentrations of solids produced in the MFP membrane
process; the character of the sludge to be dewatered; the anticipated amount of dewatered
sludge that will be produced by the concentration of solids in the dewatering process; and
disposition of the dewatering process filtrate.
The Feasibility Study shall consider the use of the buildings that once housed the ABW
sand filters and the existing sedimentation tanks.
Pie
039
3. The Feasibility Study shall consider retrofitting the existing concrete sludge drying beds
with a sludge bed underdrain system and overflow/decant boxes.
4. The consultant shall identify other potentially options to cost effectively address the
sludge handling issues identified.
Submittals required for this proposal
Consultants proposing on this project shall submit the following along with any other
information the consultant considers supportive:
1. A list of similar projects performed by the consulting firm with reference names.
2. Resumes of consultant and subconsultant personnel, including vendors, who may work
on this project.
3. A complete and current consultant fee schedule.
4. A Certificate of Insurance. Minimum insurance requirements for consultants are included
in Azusa's Standard Professional Services Agreement attached as RFP Attachment A.
5. A recitation of the scope of services proposed.
6. A schedule for the study services proposed including suggested progress meetings.
7. A fee estimate for the Feasibility Study shall be lump sum not to exceed.
Date and Time Due
The requested proposals shall be submitted to the Light & Water Department second floor desk
on or before 5:00 PM, Monday, March 5, 2012.
A pre -proposal meeting will be not be held, and interested Consultants may visit the Canyon
Filtration Plant (map enclosed) to allow the consultants to satisfy themselves as to the layout of
the existing treatment plant and the former plant buildings that may be reused for this project.
The submitted proposals will be reviewed in-house by Azusa Light & Water staff. Award of the
contract for the Sludge Handling Facilities Feasibility Study may be made at the March 26's
Meeting of the Azusa Light & Water Utility Board. The City may accept or reject all proposals,
or to negotiate the scope and price as it deems appropriate.
-3-
Cost shall be a consideration in determining the consultant chosen to perform the Feasibilty
Study.
Please contact Chet Anderson, at 626-812-5209 with questions.
Very truly yours,
Chet F. Anderson, P.E.
Assistant Director of Utilities- Water Operations
cc: George Morrow, Steve Seffer
M
041
AZUSA
INFORMATION ITEM
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE SA
UTILITY BOARD
FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES
DATE: JANUARY 23, 2012
SUBJECT: CEC RULEMAKING AFFECTING LOCAL PUBLICLY -OWNED
ELECTRIC UTILITIES WITH COAL PLANT PARTICIPATION
On January 12, 2012, the California Energy Commission met to rule on a Petition by the
Sierra Club and the Natural Resources Defense Council to establish a Rulemaking on
whether or not investments made by Publicly Owned Utilities (POU's) in coal-fired
power plants comply with the _mandates _of SB 1368. SB 1368, sometimes known as the
anti -coal bill" fofbids California electric utilities from making commitments longer than
5 years to purchase coal-fired energy (i.e. non -emissions compliant resources) or make
investments under grandfathered contracts that extend the life of a coal plant by more
than 5 years.
The Petitioners argue that the POU's are not complying with the SB 1368 since they have
made investments that they feel extend the life of the plant. Specifically, the Petitioners
reference the upcoming investments by the San Juan participants to install EPA -ordered
NOx controls at the plant as a violation of SB 1368 requirements.
At the meeting, a number of POU representatives and attorneys spoke including Azusa's
Director of Utilities. As expected, the CEC did_approve establishing a Rulemaking
process to review in more detail the claims of NRDC and the Sierra Club. I will keep you
informed if any major developments transpire in the case.
Prepared by: George F. Morrow, Director of Utilities
Attachments:
1. Morrow's Comments at CEC Hearing
2. SCPPA Testimony
3. NRDC l Sierra Club Petition
MEA
SB 1368 Hearing (& CEC
1/12/12
Good morning. I am George Morrow, Director of Azusa Light & Water. As
an electrical engineer, I have 33 years of electric utility experience including
17 as a General Manager of publicly owned utilities.
Azusa Light & Water is a community -owned electric and water utility which
has been providing utility services to its owner -residents for more than 100
years. For those here not familiar with Azusa, it is a city of 49,000 residents
located along the San Gabriel foothills in the Los Angeles Basin.
As a member of the Southern California Public Power Authority or SCPPA
for short, Azusa has a diverse power supply portfolio incorporating nuclear,
coal, hydroelectric, and wind resources. Azusa is also a participant in an
efficient natural gas fired plant under construction just south of here in Lodi,
California. Renewable resources make up over 20% of Azusa's resource mix
and the electric utility is evaluating additional renewable resources as it
moves forward to meet the goals identified with SBX1-2.
In 1993, Azusa acquired an interest.in San Juan Unit 3, a coal-fired baseload
power plant in northwest New Mexico, in conjunction with other SCPPA
members. San Juan provides a majority of Azusa's energy needs and
represents expenditure approximating 1/2 of the electric utility's budget. I
think it would be accurate to say that San Juan is a critical resource not just
to Azusa, but to each of the other project participants in California.
I am here today to express my concern with the proposal to modify the
current rules related to SB 1368 implementation. The legislative intent of SB
1368 is clear to those of us with interests in non -EPS compliant resources
and we have managed our involvement in the San Juan project accordingly.
Operating a modern electric power generating station is a major commitment
of time and resources. Literally hundreds of plant investments are made
annually to ensure that this important electric grid resource can operate
reliably, safely, efficiently and with environmental compliance. All four of
these objectives are intertwined and critical.
From my involvement with the management, maintenance and operation of
numerous power plants over the years, including joint participation plants, I
043
George Morrow
SB 1368 Hearing at CEC
January 12, 2012
Page 2 of 2
cannot understand how an enhanced reporting and vetting process of routine
maintenance, including reliability, safety or efficiency investments, as the
Petitioners in this matter have suggested, could administratively work. The
California participants in San Juan are minority owners and as Mr. Pedersen
noted, the Operating Agent for the station has broad authority to do those
things necessary to keep the plant operating safely and reliably, and to
comply with competent regulatory & environmental mandates. Such
prudent investments are also in the best interests of all San Juan owners
including the California residents that I represent.
From the Petition in this matter, it is apparent to me that the recent EPA
order to install Selective Catalytic Reduction devices for enhanced NOx
control at San Juan is a target of the Petitioners. Although we disagree with
EPA's recommendations that this expensive retrofit is the best approach to
accomplish the objectives of enhanced NOx control, the power plant does
have an obligation to comply with final regulatory orders .... and the
California participants have a contractual obligation to share in the costs and
the benefits of that investment.
With the recent adoption of a Green House Gas "cap and trade" program in
California, Azusa does not believe that the current rules related to non -EPS
compliant resources are needed any longer, or at least not needed in their
current form. To be honest, if the Commission believes that it is legally
possible and prudent for the California agencies involved in San Juan to not
comply with EPA's recent environmental order, perhaps this matter should
be the target of the CEC's attention, rather than the broader and
administratively unworkable idea of reviewing and vetting environmental,
reliability, safety and efficiency investments at San Juan and other non -EPS
compliant plants.
From Azusa's standpoint, and I am certain for most if not all of the involved
California entities, the premature loss of our investments in San Juan would
have a catastrophic affect on our mandate to provide reliable and affordable
electric service to the homes and businesses in our communities. And that
is why I am here today.
II
ME
STATE OF CALIFORNIA
ENERGY RESOURCES CONSERVATION
AND DEVELOPMENT COMMISSION
In the Matter of:
Docket 12-OIR-1
Rulemaking to Consider Modification of
Regulations Establishing a Greenhouse
Gases Emission Performance Standard
For Baseload Generation of Local Publicly
Owned Electric Utilities
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
COMMENT ON
ORDER INSTITUTING RULEMAKING
The Southern California Public Power Authority recommends that the draft Order
Instituting Rulemaking ("OIR") that the staff has prepared for the Commission's consideration
on January 12, 2012, be revised to sequence the rulemaking so that the issues in the proceeding
can be addressed in an orderly and administratively efficient manner.
As the Commission noted at its December 12, 2012 business meeting, Public Utilities
Code ("PUC") section 8341(0 requires that the Commission reevaluate the need for its
greenhouse gas ("GHG") Emission Performance Standard ("EPS") regulation when an
enforceable GHG emissions limit is established and in operation for local publicly owned
utilities ("POUs"). The California Air Resources Board ("CARB") cap -and -trade regulation
became effective on January 1, 2012, and will start to be enforced on January 1, 2013. Thus,
before the Commission devotes the time and treasure of itself as well as stakeholders to revising
the existing EPS regulation, the Commission should reevaluate the need for the regulation.
SCPPA is a joint powers authority. The members are Anaheim, Azusa, Banning, Burbank, Cerritos, Colton,
Glendale, Los Angeles Department of Water and Power, Imperial Irrigation District, Pasadena, Riverside, and
045
If the Commission determines that there continues to be a need for the EPS regulation in
spite of the establishment and enforcement of emissions limits by the CARB, then the
Commission should proceed to examine whether there is any need for a change in the existing
regulation. The Southern California Public Power Authority ("SCPPA") believes that an
objective assessment of how the existing regulation has been implemented will demonstrate that
there is no need for a change and that, even if there were a need, the changes proposed by the
Natural Resources Defense Council ("NRDC") and the Sierra Club ("SC") would fail to attain
their tacit objective of preventing the installation of federally mandated emission control
equipment at non -EPS compliant power plants.
If, after an objective assessment of whether there is any need for a change in the existing
regulation, the Commission determines there is a need for a change, the EPS regulation should
be revised in such a way as to be administratively workable, to be consistent with the legislative
intent underlying SB 1368, and not to impair reliable service to California electricity consumers.
I. THIS RULEMAKING SHOULD BE SEQUENCED SO THAT THE
REEVALUATION OF THE NEED TO CONTINUE THE EPS REGULATION IS
DONE FIRST.
The OIR should be revised to phase this rulemaking so that the reevaluation of the need
to continue the EPS regulation is considered first. The draft OIR properly recognizes that the
reevaluation of the need for the EPS regulation should be within the scope of the rulemaking
proceeding. The draft OIR says that the rulemaking shall consider: "Whether changes to the
regulations are necessary pursuant to Public Utilities Code section 8341(f)...:. PUC section
8341(f) mandates that this Commission shall reevaluate the need for its EPS regulation when an
enforceable GHG limit is established and in operation:
Vernon. This comment is sponsored by Anaheim, Azusa, Banning, Colton, Glendale, and the Imperial Irrigation
District, the SCPPA members which participate in the San Juan Project either directly or through SCPPA.
300226011 nap0I 111201.doe
04 t,
(f) The Energy Commission, in a duly noticed public hearing and
in consultation with the commission and the State Air Resources
Board, shall reevaluate and continue, modify, or replace the
greenhouse gases emission performance standard when an
enforceable greenhouse gases emissions limit is established and in
operation, that is applicable to local publicly owned electric
utilities.
The California Air Resources Board ("CARB") GHG cap -and -trade regulation became effective
on January 1, 2012 3 The CARB will start to impose compliance obligations on cap -and -trade
covered entities on January 1, 2013 4 Thus, the Commission is now required by statute to
reevaluate the need to continue, modify, or replace the EPS regulation.
Given that the Commission must reevaluate the need for the EPS regulation and has
included that reevaluation within the scope of the rulemaking, it would be administratively
efficient to conduct the reevaluation before doing anything more in the proceeding. It would not
be efficient for the staff, stakeholders, and the Commission to spend time trying to determine
whether there is any need for revising the regulation if the regulation is going to be terminated
when the cap -and -trade regulation starts to be enforced on January 1, 2013. The Commission
should revise the draft OIR as shown in the attached redline to direct the staff and involved
stakeholders to conduct the reevaluation of the need of the EPS regulation before doing more in
this proceeding.
'- 17 CCR §§ 95800-96023.
3 Office of Administrative Law ("OAL") File No. 2011-1027-06S (December 13, 2011).
4 17 CCR §§ 95840(a), 95851(a).
300226011nap01111201.doc
047
H. IF THE COMMISSION DETERMINES THAT THERE WILL CONTINUE TO
BE A NEED FOR THE EPS REGULATION AFTER THE CAP -AND -TRADE
LIMIT ON GHG EMISSIONS IS ENFORCED, THE COMMISSION SHOULD
DETERMINE WHETHER THERE IS ANY NEED FOR CHANGE IN THE
EXISTING REGULATION.
If, after conducting its reevaluation of the EPS regulation pursuant to PUC section
8341(f), the Commission determines that there will continue to be a need for the EPS regulation
after the cap -and -trade regulation starts to be enforced on January 1, 2013, the Commission
should determine whether there is any need for a change in the existing rules before attempting
to rewrite the rules. SCPPA strongly believes that an objective analysis will reveal there is no
need for change.
NRDC/ SC insinuate that POUs have failed to comply with the EPS and have
misinterpreted the EPS regulation. NRDC/ SC are incorrect.5 NRDC/SC point to two examples
of investments in the San Juan Generating Station that NRDC/SC claim did not meet the
standards set forth in the EPS regulation. One is an investment in a pollution upgrade project in
response to a 2005 consent decree that was completed by 2008. This investment was undertaken
before the EPS regulation took effect. The second example is the replacement of the turbine
rotor at San Juan which SCPPA specifically found through a public process to be routine
maintenance in SCPPA Resolution No. 2009-23 on February 19, 2009 6 Replacement of the San
Juan turbine rotor is a paradigm of routine maintenance that is not proscribed by SB 1368 or the
EPS regulation.
The apparent agenda of the NRDC/SC is to prevent California participants in the San
Juan Project from funding the installation of federally mandated Best Available Retrofit
s NRDC/SC Petition at 3.
6 The SCPPA members which were involved in the turbine replacement decision were Azusa, Banning,
Colton, Glendale, and the Imperial Irrigation District.
300226011 nap01111201.doc
Technology ("BART") pollution controls, specifically the insulation of selective catalytic
reduction ("SCR") equipment at San Juan in response to the August 4, 2011 EPA Federal
Implementation Plan ("FIP") for San Juan. NRDC/SC contend that under the San Juan
Participation Agreement the California public entities that have ownership interests in the San
Juan Project could block compliance with the EPA's August 4, 2011 FIP: "If the California
owners do not vote to approve the capital investments in SCR, which is prohibited under
California law, then the improvements should not go forward and California owners should not
have to pay the costs of those improvements."8
NRDC/SC are misinformed. Under section 28.3.8 of the San Juan Participation
Agreement, the Operating Agent for San Juan, the Public Service Company of New Mexico,
must: "Comply with any and all laws and regulations applicable to the performance of Operating
Work."9 "Operating Work" includes "environmental compliance activities.i10 If the San Juan
Coordination Project Committee fails to reach agreement on any matter, including Operating
Work, the Operating Agent is "authorized and obligated to take such reasonable and prudent
action, consistent with Prudent Utility Practice, as is necessary to the successful and proper
operation and maintenance of the San Juan Project, pending the resolution, by arbitration or
otherwise, of any such inability or failure to agree."11 Thus, the California San Juan participants
cannot block compliance with the federal FIP.
'Approval and Promulgation of Implementation Plans; New Mexico; Federal Implementation Plan for
Interstate Transport of Pollution Affecting Visibility and Best Available Retrofit Technology Delermination. EPA -
R06 -OAR -2010-0846 (August 4, 2011).
s NRDC/SC Petition at 9.
v San Juan Participation Agreement, section 28.3.8 (March 23, 2006).
10lbid, section 5.35.
I Ibid, section 18.6.
300226011 nap01111201 Am
049
III. IF, AFTER AN OBJECTIVE EVALUATION OF POU DETERMINATIONS
ABOUT INVESTMENTS IN NON -EPS COMPLIANT POWER PLANTS, THE
COMMISSION BELIEVES THERE IS A NEED TO REVISE THE EPS
REGULATION, THE REVISIONS SHOULD BE TAILORED RESPONSIBLY.
If the Commission determines, after an objective evaluation of POU performance under
the existing EPS regulation, that some revisions to the regulation are necessary, those revisions
should be tailored responsibly and specifically. NRDC/SC propose that each and every POU
investment in non -EPS compliant facilities, both past and future, be investigated by the
Commission after submission of "complete documentation by POUs."12 "Complete
documentation" is ambiguous, overbroad, and not reasonably calculated to achieve the goals of
SB 1368 or the EPS regulation. Requiring the submission of "complete documentation" for each
and every investment, no matter how small and no matter how obvious it is that the investment
constitutes routine maintenance, would create an administrative quagmire for both the
Commission and filing POUs.
The consequences of a regulation that is overly broad would go beyond imposing an
undue administrative burden on both the Commission and stakeholders. The reliability of
service to California electricity consumers could be jeopardized. Although SCPPA members
including the San Juan participants are making substantial strides in incorporating new
renewable resources to meet the demands of their consumers, non -EPS compliant power plants
are going to be required to meet consumer demand reliably until reliance upon the plants is
phased out in an orderly and responsible fashion. Power plants, like any machinery, require
maintenance in order to be operated prudently and responsibly. Requiring POUs to submit
"complete documentation" for each and every investment in routine maintenance at non -EPS
12 NRDC/SC Petition, Attachment I.
300226011 nap) III 1201.doc
050
compliant power plants could prevent timely maintenance at the power plants, jeopardizing the
operation of the power plants and potentially jeopardizing the reliability of service to consumers.
IV. CONCLUSION.
In order to move forward in an administratively efficient and responsible manner in this
rulemaking, the Commission should phase the proceeding. The Commission should conduct the
reevaluation mandated by PUC section 8341 (1) first before doing anything more in the
proceeding. The Commission should move to next steps only after completing the reevaluation
and determining that continuation of the EPS regulation is necessary in spite of the imposition of
cap -and -trade GHG emissions limits. If the Commission determines that continuation of the
regulation is necessary, the Commission should then determine whether any revisions are
necessary and, if so, what the revisions should be. A redline of the draft OIR is attached as
Attachment 1.
Respectfully submitted,
/s/Norman A. Pedersen
Norman A. Pedersen, Esq.
HANNA AND MORTON LLP
444 South Flower Street, Suite 1500
Los Angeles, California 90071-2916
Telephone: (213) 430-2510
Facsimile: (213) 623-3379
Email: npedersen(cilharernor.corn
Attorney for the SOUTHERN CALIFORNIA
PUBLIC POWER AUTHORITY
Dated: January 11, 2012
300226011 nap01111201.doc
051
Attachment I
052
STATE OF CALIFORNIA
ENERGV RESOURCES CONSERVATION
AND DEVELOPMENT COMMISSION
In the Matter of. )
Docket. 12-OIR-1
Order: 12-XXXX-XX
Rulemaking to Consider Modification of )
Regulations Establishing a Greenhouse )
ORDER INSTITUTING
Gases Emission Performance Standard )
RULEMAKING
For Baseload Generation of Local )
Publicly Owned Electric Utilities )
January 11, 2012
PURPOSE AND SCOPE OF THE PROCEEDING
Pursuant to Public Resources Code sections 25210, 25213, and 25218(e), and Title 20, California Code of
Regulations, section 1222(a), the California Energy Commission (Commission) hereby institutes a
proceeding to di-eii, acid -4+t reevaluate the need for the Energy
Commission's Emissions Performance Standard"ESP-_regulations, title 20, California Code of
Regulations, section 2900 et seq. to d ifwarrantcd. to im rlemcnt rxv,ible chane" to the rexdwion,.
Senate Bill No. 1368 (Stats. 2006, ch. 598) directed the Commission, in consultation with the California
Public Utilities Commission and the California Air Resources Board, to "establish a greenhouse gases
emission performance standard for all baseload generation of local publicly owned electric utilities at a rate of
emissions of greenhouse gases that is no higher than the rate of emissions of greenhouse gases for
combined -cycle natural gas baseload generation" (Stats. 2006, ch. 598, §2.) The Commission was also
directed to adopt regulations for the enforcement of the greenhouse gases emission performance standard with
respect to local publicly owned electric utilities (POUs). (Stats. 2006, ch. 598, §2.) On August 29, 2007 the
Energy Commission adopted regulations implementing SB 1368, which the Office of Administrative Law
053
approved on October 16, 2007.
On November 14, 2011, Sierra Club and NRDC submitted ajoint petition requesting the Energy
Commission to revisit the regulations, citing several recent investments made by POUs in non -EPS compliant
facilities and raising concern that these investments had not undergone any review by the Energy
Commission. Specifically, the petition recommended the Energy Commission open a rulemaking
proceeding to modify the regulations to require POUs to submit compliance filings for all non -EPS compliant
investments and to further define what constitutes a covered procurement as used in the regulations. On
December 14, 2011 the Energy Commission granted the petition and directed staff to draft this Order
Instituting Rulemaking to consider the issues raised in the petition as well as concerns raised by
representatives of the POUs that the Energy Commission is required to reevaluate the regulations in their
entirely now that an enforceable cap on greenhouse gas emissions has been established and is arguably in
operation. (Public Utilities Code §834l(f)J
Therefore, the Commission orders that a rulemaking proceeding be opened to consider whether to cunlinuc
and. if cunl inued. whrlhcr to modify title 20, California Code of Regulations, section 2900 et seq. , lii'l w.
wilt issuc> bcing addressed in the Ii9lowine seeuenec:
I 1 Whtlher. upon reevaluation pursuant to Public Utilities Code section 5341(1). there will continue to be u
need Ior the ITS re nulation alter the Gap on glecilhouse "as emissions is enfnrecd ursuant to 17 CCR se
95240 and 95851(a).
'_) ll'lhere N III contlnne It) he a need fir the FPS rc_ulaiion after the cur) on ereenhouxe eas emissions is
enlittced pursuant to 17 CCR �� 95240 and 95851(a W. Nhclher there is apo need t0 chance dn• FPS
rceu lm imt.
054
4_3) If [herr is am nead to change the )-.,PS regulation, whe[hcr [he regulation should be changed by
establishing a filing requirement for all POU investments in non -EPS compliant facilities regardless of
whether the investment could be considered a covered procurement;
24) If there. is ane need to change the EPS regulation. whether the regulation should be chaneed 431y
establishing criteria for, or further defining, the term "c-9vrr2d-PreeexeH+erx new oo'neishio inve;trnent,"
including specifying what is meant by "designed and intended to extend the life of one or more generating
units by five years or more," and "routine maintenance;"
�"' ;-c ..; . rt�}— .4.wo pl
35) Any other changes to the regulations considered necessary to carry out the requirements of SB 1368,
11. DELEGATION OF AUTHORITY TO COMMITTEE
A committee consisting of Commissioner Peterman as presiding member and Commissioner Douglas as
associate member, or a successor committee appointed by the Commission with comparable powers and
duties pursuant to Public Resources Code section 25211, shall preside over this rulemaking proceeding. The
Committee may hold workshops and hearings as it deems appropriate and has the authority to take, and shall
take on behalf of the Commission, all actions necessary and appropriate to comply with all applicable legal
requirements of the Public Resources Code, the Administrative Procedure Act (Govt. Code § 11340 et seq.),
and implementing regulations, including submission, after a Commission hearing, of all necessary documents
to the Office of Administrative Law, and issuance of notices for all hearings and workshops.
111. PUBLIC PARTICIPATION
The Commission encourages full and free public participation in this proceeding. Any person present at any
hearing or workshop shall be afforded a reasonable opportunity to make oral comments on the subject matter
of the proceeding. Petitions to intervene are not necessary. Any person may file written comments
addressed to:
05:;
Docket No. 12-OIR- I
Docket Unit, MS -4
California Energy Commission
1516 Ninth Street
Sacramento, California 95814-5512
Alternatively, a person may provide one electronic copy under 5 megabytes to dockct:ii cnerev.sieteca.us.
The Docket Unit will accept Word documents, but please send PDF if possible. Identify all comments with
"Docket Number: 12-OIR-1". The Commission will set forth a deadline for the receipt of written comments
in a Notice of Proposed Action, which will be published later in the proceeding if it is determined that
changes to the regulations are necessary.
The Executive Director, in conjunction with the Public Adviser, shall ensure that this order and notices of
hearings and workshops are distributed to all interested persons and that drafts of the regulations are made
available sufficiently in advance of workshops, interim hearings, and final adoption by the Commission to
allow timely participation.
The Commission's Public Adviser is available to help any person who wants to participate in this
proceeding. Please call (916) 654-4489 or toll-free in California at (800) 822-6288, or contact
pao o energy.state.ca.us.
CERTIFICATION
The undersigned Secretariat to the Commission does hereby certify that the foregoing is a full, true, and
correct copy of an order duly and regularly adopted at a meeting of the California Energy Commission held
on November 30, 2011. -
AYE:
NAY:
ABSENT:
ABSTAIN:
Dated: January 11, 2012, at Sacramento, California
05V,
Harriet Kallemeyn
Secretariat
California Energy Commission
057
JOINT PETITION OF THE NATURAL RESOURCES DEFENSE COUNCIL AND THE
SIERRA CLUB
FOR INITIATION OF A RULEMAKING REGARDING
CALIFORNIA'S EMISSIONS PERFORMANCE STANDARD
I. INTRODUCTION
Pursuant to Title 20, Section 1221 of the California Code of Regulation,] the
Natural Resources Defense Council (NRDC) and Sierra Club jointly file this petition to
request the California Energy Commission (CEC) initiate a rulemaking proceeding to
ensure that current practices of California publicly -owned utilities (POUs) meet the
requirements of Senate Bill 1368 (Perata, Chapter 598, Statutes of 2006) and California's
Emissions Performance Standard (EPS). Specifically, NRDC and Sierra Club request the
following actions:
(1) modify Section 2907 to require mandatory reporting requirements when
POUs make investments in existing coal plants; and .
(2) clarify that under current law, POU investments in existing coal plants are
subject to the filing requirements of Sections 2908 and 2909.
A review of past and planned expenditures at existing coal power plants owned or
contracted to California POUs shows that POUs have made and plan to make substantial
capital investments in plants that do not meet the EPS. In light of these past and planned
expenditures, we request that the CEC initiate a rulemaking to amend its existing
regulations implementing the EPS in order to ensure ongoing transparency and
monitoring of any investment at POU -owned and contracted coal plants. As part of this
rulemaking, we request that the CEC clearly articulate a set of criteria for POUs to
consider in determining whether a particular investment is subject to the requirements of
SB 1368 and the EPS.
At this time, NRDC and Sierra Club do not seek to initiate an enforcement action
for any particular violation of the EPS. Rather, we request a prospective rulemaking to
clarify that POUs fully understand the requirements imposed by the EPS and to ensure
that future investments by POUs do not violate existing law. Nothing in this petition
constitutes a waiver by NRDC or Sierra Club of their right to request at a later date an
enforcement action pursuant to Section 2911 for past or future violations of the EPS.
II. BACKGROUND
Unless otherwise stated, all further references to code sections refer to the Energy Commission's
regulations under Title 20 of the California Code of Regulations.
NRDC and Sierra Club Joint Petition
November 14, 2011
W
SB 1368 was signed into law on September 29, 2006. The law requires the
California Public Utilities Commission (CPUC) and the CEC to establish a greenhouse
gas emissions performance standard and to implement regulations for all long-term
financial commitments in baseload generation made by load serving entities (LSEs) and
POUs, respectively. The CPUC adopted its. regulations for the investor-owned utilities
(IOUs) and other LSEs in January, 2007. The CEC adopted EPS regulations for POUs in
October 2007.2
The regulations implemented by the CPUC and CEC under SB 1368 are expected
to result in significant GHG emissions reductions. The greenhouse gas emissions
performance standard is not to exceed the rate of greenhouse gases emitted per megawatt -
hour associated with combined -cycle, gas turbine baseload generation. The CEC's
regulations establish an emissions performance standard of 1,100 pounds (0.5 metric
tons) of carbon dioxide per megawatt hour of electricity. This standard was established in
consultation with the CPUC and the California Air Resources Board and is the same
standard adopted by the CPUC.
The objectives of the EPS regulations are to avoid new long-term investments in
highly polluting power generation to minimize the significant and under -recognized cost
of greenhouse gas emissions, and to reduce potential financial risk to California
consumers for future pollution -control costs. The law has two effects: (1) to close off the
possibility of California utilities or energy service providers(ESPs) developing or signing
new contracts with baseload power plants that do not meet the EPS; and (2) to require
California utilities and ESPs to refrain from making any new ownership investments in
their existing non-compliant coal plants, unless they can bring those plants into
compliance with the EPS.
Since the passage of the California EPS, no California utility has proposed
investment in the development or purchase of new coal plants. Utilities appear to clearly
understand that the EPS prohibits investments in new coal plants without carbon capture
and sequestration because they would not meet the standard. However, past and planned
expenditures at existing coal plants suggest that utilities do not properly understand the
requirements of the EPS with respect to existing plants.
III.Tim iNG
Recent and upcoming EPA regulations will require owners of existing coal-fired
power plants to decide whether to make significant capital investments in environmental
compliance retrofits, or whether to pursue a different strategy that could lead to
retirement or natural gas re -powering of coal plants. As discussed in more detail below,
all existing coal plants are "non -deemed compliant" facilities under the EPS because their
greenhouse gas emissions exceed the standard. Yet California faces the prospect that
several POUs will commit hundreds of millions of dollars toward compliance retrofit
costs to these facilities. Such investments could significantly extend the effective lives of
these plants, contrary to the intent of SB 1368. The CEC's oversight is therefore
z 20 CCR 1 I § 2900 et seq.
NRDC and Sierra Club Joint Petition
November 14, 2011
059
necessary to provide a clear and transparent criteria and review of all POU long-term
capital investments in coal-fired power plants.
IV. IDENTIFICATION OF PETITIONERS (§ 1221(A)(1))
NRDC is a non-profit membership organization with over 250,000 members and
online activists in California and a longstanding interest in minimizing the societal costs
of the reliable energy services that Californians demand. Sierra Club is a national, non-
profit membership organization with over 600,000 members nationwide, and over
150,000 members in California. Sierra Club's most important priority is to help speed the
country's transition from an energy economy dependent on fossil fuels to a robust clean
energy economy based on renewable energy.
Noah Long Travis Ritchie
Natural Resources Defense Council Sierra Club Environmental Law
111 Sutter St. 20th Floor Program
San Francisco, CA 94104-4540 85 Second Street, 2nd Floor
Phone: (415) 875-6100 San Francisco, CA 94105
nlong@nrdc.org Phone: 415-977-5727
travis.ritchie@sierraclub.org
V. NATURE OF EXISTING EPS REQUIREMENTS FOR INVESTMENTS IN EXISTING
FACILITIES (§ 1221(A)(2))
The CPUC monitors proposed investments in non-compliant facilities by
California's IOUs. Last year the CPUC ruled on a petition for modification from
Southern California Edison (SCE) regarding SB 1368's applicability to proposed retrofit
investments at the Four Comers coal plant in New Mexico. The CPUC's ruling
explicitly limited new long term investments by SCE in the plant. The ruling provided a
clear signal to SCE and other IOUs that California law does not allow further investments
in non-compliant facilities
Similar to the IOUs, various California POUs have significant contractual or
ownership stakes in out-of-state coal plants that do not meet the EPS. (See Attachment 2.)
However, unlike the CPUC, the CEC does not yet require a transparent review of
proposed investments at these coal plants. As a result, it is unclear whether POUs have
consistently complied with the EPS, or whether POUs have misinterpreted the
applicability of the CEC regulations with respect to investments in existing facilities.
' D.10-10-016 October 14, 2010 (R. 06-04-009).
"Id.
NRDC and Sierra Club Joint Petition
November 14, 2011
060
The prohibition in SB 1368 against further capital investment in coal-fired power
plants is clear, providing that:
No load -serving entity or local publicly owned electric utility may
enter into a long-term financial commitment unless any baseload
generation supplied under the long-term financial commitment
complies with the greenhouse gases emission performance
standard established by the commission, pursuant to subdivision
(d), for a load -serving entity, or by the CEC, pursuant to
subdivision (e), for a local publicly owned electric Utility.5
Thus far, the CEC has not monitored investments in existing coal-fired power
plants that are currently under contract to California POUs, none of which meet the EPS.
To this point, not a single POU has submitted compliance filings for covered
procurements at existing power plants. This lack of transparency is likely the result of
a potentially incorrect and non-uniform interpretation by POUs of the compliance
requirements established by the CEC.
The CEC's EPS regulation, at 20 CCR I 1 § 2907, allows a POU to request CEC
review of proposed investments or "prospective procurements."6 POUs must also make
compliance filings under 20 CCR I 1 § 2908 and 2909 for "covered procurements,"'
which the regulations define to include "new ownership investments." 8 Notwithstanding
these provisions, not a single POU has filed a request for review or a compliance filing
for investments in existing coal plants.9 These omissions presumably stem from unilateral
determinations made by POUs that such investments are not "prospective procurements"
or "covered procurements" and therefore are not subject to the CEC's regulations. This
interpretation by POUs has potentially led to incorrect and non-uniform interpretations of
the definitions of "covered procurement" and "new ownership investment":
"Covered procurement" means:10
(1) A new ownership investment in a baseload generation
powerplant, or
(2) A new or renewed contract commitment, including a lease,
for the procurement of electricity with a term of five years or
greater by a local publicly owned electric utility with:
(A) a baseload generation powerplant, unless the
powerplant is deemed compliant, or
' Cal. PU Code 8341 (a)
6 20 CCR 11 § 2907
' 20 CCR 11 §2901 (d)
s 20 CCR 11 §29010)
' CITE (make at least some mention of how we know that)
10 20 CCR 11 §2901 (d) (emphasis added)
NRDC and Sierra Club Joint Petition
November 14, 2011
061
(B) any generating units added to a deemed -compliant
baseload generation powerplant that combined result in an
increase of 50 MW or more to the powerplant's rated
capacity.
"New ownership investment" means:I I
(1) Any investments in construction of new powerplant;
(2) The acquisition of a new or additional ownership interest in
an existing non -deemed compliant powerplant previously
owned by others;
(3) Any investment in generating units added to a deemed -
compliant powerplant, if such generating units result in an
increase of 50 MW or more to the powerplant's rated capacity;
or
(4) Any investment in an existing, non -deemed compliant
powerplant owned in whole or part by a local publicly owned
electric utility that.
(A) is designed and intended to extend the life of one or
more generating units by five years or more, not
including routine maintenance,
(B) results in an increase in the rated capacity of the
powerplant, not including routine maintenance, or
(C) is designed and intended to convert a non -baseload
generation powerplant to a baseload generation
powerplant.
The CEC's EPS compliance requirements apply to "covered procurements,"
which in turn incorporates the term "new ownership investments." While "new
ownership investments" clearly include construction of new powerplants, POUs appear to
have interpreted the term to exclude various types of investments in existing coal
facilities. For example, the Southern California Public Power Authority (SCPPA) issued
a resolution in 2009 finding that a proposed investment in the San Juan Generating
Station "constitutes routine maintenance and is not a `Covered Procurement' pursuant to
the regulations promulgated by the California CEC... pursuant to SB 1368."12 While we
make no judgment at this time on SCPPA's determination regarding the applicability of
SB 1368 to that particular investment, it is an example of the type of non-uniform and ad
hoc interpretation that raises concern.
As discussed further below, NRDC and Sierra Club found ample reason to believe
that California POUs have made investments and are considering further significant
investments in existing coal plants that do not meet the EPS. Although the POUs may
have reason to believe that making, or considering, investments in coal plants are not
" 20 CCR 11 §29010)
z SCPPA Resolution No. 2009-23, February 19, 2009 (Attachment 3).
NRDC and Sierra Club Joint Petition
November 14, 2011
"new ownership investments" subject to the EPS, under current practices those
determinations are not independent or subject to public scrutiny.
We request that the CEC develop clear criteria for POUs to guide them in
determining whether a particular investment in an existing plant is subject to the filing
requirements of 20 CCR 11 §§ 2908 and 2909.
We further urge the CEC to amend its reporting and compliance regulations to
require the POUs to submit compliance filings for all past 13 and planned investments in
plants not meeting the EPS. Such a filing would allow the CEC to publicly, transparently,
and consistently review past and planned investments to independently determine
compliance with SB 1368 in a manner that individual review by POUs cannot achieve.
VI. A REVIEW OF PAST AND PLANNED INVESTMENTS DEMONSTRATES A NEED FOR
CEC RULEMAKING (§ 1221(A)(3))
A. Existing Ownership Interests
The table included at Attachment 2 identifies the California POUs that have
significant interests in out-of-state coal power plants, which do not meet the EPS. During
the period after the passage of SB 1368, POUs continued to make substantial capital
investments in several coal plants. The following are a few examples of such
investments.
1. San Juan Generating Station
The San Juan Generating Station provides a troubling example of continued long-
term investments by California POUs in an old and dirty facility that does not meet the
EPS.
In response to a 2005 consent decree, the owners of the San Juan Generating
Station began a four-year $340 million pollution upgrade project to bring the
plant into compliance with air quality laws for particulate matter, NOx, and
S02emissions.14 SCPPA alone paid approximately $80 million in capital
costs. 15
On February 19, 2009, SCCPA authorized the replacement of a high
pressure/intermediate pressure turbine for San Juan Generating Station unit
3.16 At the time SCPPA made its decision to undertake this upgrade, PNM
" Commencing with the passage of SB 1368 in September, 2006.
14 Rebuttal Testimony in Support of Stipulation of Patrick J. Themig, In the Matter of the Application of
Public Service Company of New Mexico for Revision to its Retail Electric Rates, etc., April 25, 2011, New
Mexico Public Regulation Commission Case No. 10 -00086 -UT, p.7.
is SCPPA San Juan Unit 3 Status Report, July 2008 (Attachment 4).
16 SCPPA Resolution No. 2009-23, February 19, 2009 (Attachment 3).
NRDC and Sierra Club Joint Petition
November 14, 2011
063
estimated the total cost for the turbine at approximately $14.3 million. 17
SCPPA's resolution approving the expenditure concluded that for purposes of
SB 1368, the turbine replacement constituted "routine maintenance" and
therefore did not violate the emission performance standard. However, there is
no CEC guidance or history of enforcement that indicates whether SCPPA's
own interpretation of the turbine expense as "routine maintenance" is valid.
• In 2009, SCPPA reported a $7 million advance payment of O&M in the San
Juan Project. 18
2. Intermountain Power Project (IPP)
Over the past several years, the owners of the IPP coal-fired units in Utah made
several substantial modifications, including cooling tower additions, high pressure
turbine replacements, boiler capacity additions, distributed control system replacement,
scrubber outlet modifications and rebuilds, and induced draft fan drive replacement.
These modifications have decreased emissions and increased plant efficiency.
Importantly for this context, they have also increased the plant's capacity by 140 MW,
resulting in a 68 MW increase in available capacity for LADWP.19
3. Navaio Generating Station
The Navajo Generating Station completed the installation of scrubbers to remove
SOx in all three units of the plant and began to install low-NOx burners to reduce NOx
emissions starting with Unit 3 in 2009. Stringent NOx emissions control requirement by
the federal government may require Navajo Generating Station to install Selective
Catalytic Reduction, which could cost a total of $600 million, or $127 million for
LADWP.20
The investments described above are just a few examples of ongoing capital
investments in non -deemed compliant facilities that California POUs have made after the
implementation of SB 1368 and the CEC's EPS regulations. New ownership investments
are expressly prohibited by the CEC's regulations, but there is little if any information
available to review these procurements. As POUs continue to face significant capital
investments at coal-fired generation units due to the aging of the coal fleet as well as new
and upcoming regulations, a lack of CEC oversight and enforcement could result in
multiple violations of the EPS.
" SCPPA San Juan Unit 3 Status Report, December 2008 (Attachment 5)
" SCPPA, "Independent Auditor's Report and Combined Financial Statements," 2009, at p.4 available at:
htto:kiwww.scona.ore/Downloads/Annual9b20Report/scnpa2008 FINAL FS.pd
19 LADWP, "2010 Power Integrated Resource Plan: Final," p.F-5 (Dec. 15 2010) available at:
httnawww.ladwn.comi Iadwn cros!Iadwn014239.odf
20 Id. at p. F-5-6
NRDC and Sierra Club Joint Petition
November 14, 2011
B. Planned Investments at Existing Coal Plants Constitute "New Ownership
Investments"
The CEC must act quickly to provide guidance to POUs and prevent further
investments in coal-fired generating units that may violate California law. POW face
substantial capital investment decisions in the very near term. Based on limited publicly
available information, the non -EPS compliant plants have already undergone or are
considering significant alterations, expansions and investments involving potential long-
term investments from California POUs.
For example, proposed regulations may change the way coal combustion residues
are handled and stored at IPP and Navajo generating station.21 If implemented, the rules
would require the phase-out of wet handling systems and surface impoundments of
bottom ash and the subsequent permitting and installation of lining under fly ash landfills.
The facilities would have to conduct additional groundwater monitoring, and provide
closure and post -closure care of the surface impoundments and landfills. California POUs
account for 75% of the purchased generation of the Intermountain Power Project in Utah,
and LAD WP has a contract to receive 21.2% of the Navajo Generating Station output
through 201922 These coal plants have faced and will continue to face ongoing capital
investment requirements for environmental compliance measures that go far beyond
routine maintenance expenditures. Continuing to invest in these plants exposes California
consumers to financial risks associated with future compliance costs as well as future
reliability risks in electricity supplies. SB 1368 expressly identified the reduction of these
risks as a goal of the greenhouse gas EPS.23
The San Juan Generating Station provides perhaps the most substantial example
of major capital investments that will be required in the near term. On August 5, 2011,
EPA announced its final decision to require the installation of Best Available Retrofit
Technology (BART) pollution controls on the San Juan Generating Station coal-fired
powerplant near Farmington, New Mexico that would include installation of selective
catalytic reduction (SCR) technology, 24 EPA estimated that the cost of compliance could
reach $345 million, 25 and Public Service Company of New Mexico (PNM), which owns
approximately half the plant, estimated the cost of compliance at over $750 million. 26 In
either case, the retrofit costs to continue to operate the San Juan Generating Station
would be substantial.
21 Id. at p.0-23.
22 POU contract/ownership status from California Energy Commission, "An Assessment of Resources
Adequacy and Resource Plans of Publicly Owned Utilities in California," staff report (Nov. 2009),
available at httn:!," Www.enerev.ca.xov/2009oublications4.EC--200-2009-019/CEC-200-2009-019.PDI-
" SB 1368 (2006), Sections I(i)-0).
21 EPA Final BART Rule, 40 CFR Part 52, EPA -R06 -OAR -2010-0846
25Id.
26 PNM Press Release, August 5, 2011, available at
www.pnm.com/news/2011/0805_epa decision—bart.htm.
NRDC and Sierra Club Joint Petition
November 14, 2011
065
Several California POUs have ownership stakes in the San Juan Generating
Station. SCPPA holds a 41.8% ownership interest in Unit 3 on behalf of five of its
members: the City of Azusa; the City of Banning; the City of Colton; the City of
Glendale; and the Imperial Irrigation District. 27 The MSR joint powers agency28 owns a
28.7% interest in Unit 4, and the City of Anaheim has a separate 10% ownership interest
in Unit 4. Together, these California public entities represent 24.51%of the common
ownership interest in the San Juan Generating Station. 29 By contract, capital
improvements at the San Juan Generating Station that exceed $5 million require an 82%
majority vote of the co-owners.30 Large capital investments such as the SCR controls
therefore require at least one California owner to approve the expenditure. If the
California owners do not vote to approve the capital investments in SCR, which is
prohibited under California law, then the improvements should not go forward and
California owners should not have to pay the costs of those improvements. 31
Given the ownership structure of the San Juan Generating Station, it is within the
discretion of the California owners to decide whether to invest hundreds of millions of
dollars in the SCR controls required by EPA's BART determination, or whether to refrain
from making new capital investments in the plant. The BART compliance costs are not
routine maintenance expenses; the SCR controls are substantial investments designed to
extend the legal and functional life of the San Juan Generating Station by bringing its old
and dirty coal units into environmental compliance under current law. In accordance with
SB 1368, the CEC's greenhouse gas EPS expressly prohibits this type of new ownership
investment. 32
The SCR costs described above are not the extent of future capital investments at
San Juan. Other costs include controls to contain coal ash and scrubber waste,
compliance with upcoming greenhouse gas cap -and -trade regulations, and potential
remediation liability for groundwater contamination. These mounting environmental
compliance costs will continue to accrue if California's POUs do not abide by the EPS
and cease new ownership investments in these plants.
27 POU contract/ownership status. from California Energy Commission, "An Assessment of Resources
Adequacy and Resource Plans of Publicly Owned Utilities in California," staff report (Nov. 2009), -
available at: htto:/hvw%v.enerev.ca.gov!2009oublications/CEC-200-2009-019.'CEC 200-2009-019.PDI'.
" MSR is ajoint powers agency consisting of the City of Santa Clara, the City of Redding, and the
Modesto Irrigation District.
" Amended and Restated San Juan Project Participation Agreement, § 6.2.6, March 23, 2006 (Attachment
6).
10 Amended and Restated San Juan Project Participation Agreement, § 18.4.2, March 23, 2006
(Attachment 6).
" To the extent that California POUs believe they would be forced by contract obligations to participate in
SCR or other major investments even after voting against such investments, § 20 CCR 11 2913 requires
those POUs to file a petition with the CEC requesting an exemption.
" Title 20, Cal. Code of Regs. §§ 29010) and 2902(b).
NRDC and Sierra Club Joint Petition
November 14, 2011
066
VII. BASIS OF CEC AUTHORITY (§ 1221(A)(4))
Public Utilities Code section 8341(c) requires the CEC to adopt regulations for
the enforcement of SB 1368 with respect to a POU to establish a greenhouse gas
emissions performance standard and to implement regulations for all long-term financial
commitments in baseload generation made by POUs. The CEC adopted EPS regulations
for POUs in October 2007.33 Public Resources Code section 25213 provides that the
CEC shall adopt rules and regulations as necessary. The CEC has the authority to initiate
a rulemaking to amend its current regulations as requested by this petition because such
amendment is necessary to clarify that existing law prohibits POUs from making capital
investments in existing coal plants.
VIII. PETITION REQUEST 1: THE CEC SHOULD DEVELOP CRITERIA TO DETERMINE
WHETHER A PARTICULAR INVESTMENT IN AN EXISTING COAL PLANT CONSTITUTES A
COVERED PROCUREMENT
CEC action is necessary to provide guidance to the California POUs that retain an
interest in coal plants to ensure their investment decisions comply with California law.
The POUs have interpreted current regulations in a manner that allows them to
effectively "self -regulate" by making unilateral determinations on the applicability of the
EPS to any given investment. In order to ensure a more consistent and transparent
process for evaluating potential investments at POU -owned coal plants, the CEC must
develop clear criteria to evaluate whether an investment constitutes a covered
procurement under the EPS. These criteria should be added to the existing
implementation regulations and should supersede the existing structure for determining
"covered procurements." It is incumbent upon the CEC to monitor and enforce
compliance with the EPS if any POU makes unlawful capital investments in non -deemed
compliant facilities.
IX. PETITION REQUEST 2: THE CEC SHOULD AMEND THE EPS REGULATION TO.
REQUIRE MONITORING AND APPROVAL OF ALL PAST AND PROPOSED INVESTMENTS
The various investments that some POUs have made in coal plants since passage
of the EPS, as well as the various investments being considered in light of EPA's pending
regulations, lead us to conclude that the goal of SB 1368 -to phase out California
investments in coal- will be undermined unless there is a more clear and transparent
process to evaluate proposed investments. The CEC should amend its rule to require
POUs to disclose and file information on any proposed investment in a non -EPS
compliant facility. We have provided recommended language for such a reporting
requirement in Attachment 1.
" 20 CCR I I § 2900 et seq.
NRDC and Sierra Club Joint Petition
November 14, 2011
061
X. CONCLUSION
For the forgoing reasons, we request the CEC:
1) Amend 20 CCR 11 §2907 as recommended in Appendix 1, below.
2) Develop clear criteria for the evaluation of investments at existing coal plants
for compliance with the EPS.
NRDC and Sierra Club Joint Petition
November 14, 2011
M/ w
Attachment 1
12
NRDC and Sierra Club Joint Petition
November 14, 2011
069
Reporting requirement recommended language:
(Criteria for evaluation of covered procurements should be added as a new section
and is not included here.)
§2907 Request feF Commission Evaluation of a Prespeeth, Procurement and
Investments
(a) A local publicly owned electric utility w.Te must, at least 90 days prior to any
planned investment or procurement, or by January 1, 2012 for past investments, provide
complete documentation for that the Commission to evaluate a prespeetive procurements
or investment at any facility emitting more than 1100 lbs/MWhr Or e :)'Gfthe'z„
(2) a determination s to he4he a FFOspe„ti. PFOGUFMO.,t . 1.1 eenstitute
RIAMA e.
Or
vv pl.anee�with the EPS.
(b) A-Fequest-oriEvaluation of proposed and past investments under this section
shall be treated by the Commission as a request for investigation under Chapter 2, Article
4 of the Commission's regulations.
13
NRDC and Sierra Club Joint Petition
November 14, 2011
070
Attachment 2
14
NRDC and Sierra Club Joint Petition
November 14, 2011
071
Table: Out -of -State Coal Plants Owned by California POUs
Generating
Nameplate
Unit
CA
CA
Owner's
Dependable
Expected
Station
Location
Capacity
#
Owner
Share
Capacity
End of
�MN�;
zll
(MW)
Ownership
p
Boardman
SDG&E
15.0%
89
12/31/2013"'
Boardman
OR
601
1
Turlock
8.5%
56
12/31/2018
LADWP
48.6%"
875
6/15/2027"
Glendale
1.7%"'
38
6/15/2027
Pasadena
4.4%""
108
6/15/2027"'
Intermountain
Delta, UT
1640
1,2
Burbank
3AW
60
6/15/2027
Riverside
7.6%
37
6/15/2027
Anaheim
13.2%
236
6/15/2027
Navajo
Page, AZ
2406
1,2,3
LADWP
21.2%"
477
12/31/2019
Reid Gardner
Moapa, NV
295
4
CADWR
67.8%"'
200
2013
555
3
SCCPA"
41.8%
232
10/31/2030
San Juan
San Juan,
MSR"'
28.7%
160
10/31/2030
City of
NM
555
4
Anaheim
10.0%
50
10/31/2030
' All capacity data from ETA's "Existing Electrical Generating Units by Energy Source, 2008" (preliminary
data); available at: htto:/'www.eia.doe.eov/cneaf.%electricity/pace,,capacily!existineunilsbs2008.x1s.
" POU contract/ownership status from California Energy Commission, "An Assessment of Resources
Adequacy and Resource Plans of Publicly Owned Utilities in California," staff report (Nov. 2009),
available at: htto:/!www.ever12v.ca.Lovl2009oublications/CEC ?00-2009-019!CEC-''00-2009-019.PDF.
"' Contract term from SDG&E SEC lOk filing for FY09
" LADWP is entitled to receive 44.617% of the plant's capacity rating. LADWP has also purchased a 4%
entitlement of the plant from Utah Power and Light. Both of these entitlements are valid until the 2027
contract termination date. In addition, LADWP can receive up to an additional 18.168% entitlement under
the Excess Power Sales Agreement, however this percentage, or portions of this percentage, can be recalled
from LADWP by other IPP participants, given certain defined advanced notices. The Intermountain Power
Agency, which operates the plant, budgeted that LADWP would use 8.8% of this entitlement in 2009 for a
total share of 53.5°/x. Over the last several years, some of the Utah municipal participants of the IPP have
exercised their recall rights for IPP power. LADWP has been receiving approximately 300 MW from the
Utah municipalities under an Excess Power Sales Contract since the start up of the project. In addition, the
Utah municipalities have indicated an interest to construct a third IPP unit. LADWP has stated that it will
not participate in the ownership of a new IPP unit 3.
httri!ww+vsaostate.ut.us!ler.'s.eciaL'201011Odbipa tdf.
" LADWP's agreement began on February 1, 1983 and ends on June 15, 2027. There is an extension clause
providing for continuation of entitlement shares of project output. The CEC reports the contract will expire
earlier (12/31/2024), but all other sources — IPA reports; LADWP IRPs — note that all Intermountain
contracts with CA POUs expire June 15, 2027. See, e.g, IPA 2009 annual report, available at:
15
NRDC and Sierra Club Joint Petition
November 14, 2011
072
f
htip''�www iyautalt contldatatupfileslpdfs'2008-2009"l2OAnnual%2OReport%20 final%20version I pdf;
LADWP 2007 IRP, available at: ham•: --www ladwn conyladwo.'cros%Iadwp010273.pdI
Glendale may obtain additional capacity under an Excess Power Sales Agreement and is estimated to
have used an additional 0.2% in 2009, for a total share of 1.9%. See note 13, supra.
'' Pasadena may obtain additional capacity under an Excess Power Sales Agreement and is estimated to
have used an additional 0.8% in 2009, for a total share of 5.2%. See note 13, supra.
""Pasadena Water & Power (PWP) committed to reducing its purchases from Intermountain 35MW by
2016 in its 2009 IRP, available at: http7/,ww' cityoff)asadena net/watet'andpower'IRP'exiiibitsiand21df
PWP claims this reflects the amount of Intermountain capacity that may be feasible to sell under the
existing contract arrangements.
" Burbank may obtain an additional 0.8% under an Excess Power Sales Agreement and is estimated to have
used an additional 0.4% in 2009, for a total share of 3.8%. See note 13, supra.
" On March 23, 1976, LADWP, Arizona Public Service Company (APS), Nevada Power Company (NPC),
SRP, Tucson Electric Power Company (TEP) and U.S. Department of Interior executed the Navajo Project
Co -Tenancy Agreement effecting the participation as co-owners, operation and maintenance of the Navajo
Project until December 31, 2019. LADWP's entitlement of the Navajo Generating Station capability is
21.2%. The Navajo Operating Agent is SRP
" Ownership data from "Management of the California State Water Project" Bulletin 132-05, Chapter 1,
page 8, available at: http'%!www swpao water ca eov/publications/bulletinl05/Bulletin 132-05. df.
SCPPA utilities with ownership interests: Azusa (14.70/6), Banning (9.8%), Calton (14.7%), Glendale
(9.8%), and Imperial Irrigation District (51%).
Contract term from SCPPA "Independent Auditor's Report and Combined Financial Statements," 2009,
available at: li"://�vww scpp3 or,,/DownloadsiAnnu-,11 2ORepott'scppa2OO8 FINAL FS.pd
""' MSR is a joint powers agency consisting of the City of Santa Clara, the City of Redding, and the
Modesto Irrigation District.
NRDC and Sierra Club Joint Petition
November 14, 2011
16
073
AZUSA
INFORMATION ITEM
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA
UTILITY BOARD
FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIE
DATE: JANUARY 23, 2012
SUBJECT: AZUSA LIGHT & WATER'S PURCHASE OF 15 MW OF POWER
FOR THIRD QUARTER OF 2012
On January 12, 2012 Azusa purchased 15 MW of energy and capacity for Third Quarter
(Q3) of CY 2012. The price was $31.44 per megawatt -hour.
Due to the September 2011 coal mine fire at San Juan, most mining operations at the
plant have been suspended by the federal mine safety agency. As a result, there is a finite
possibility that there may not be enough coal to operate the plant at full capacity in Q3.
For Azusa, Q3 is consistently the highest average demand period of a year. In light of the
above, staff deemed it prudent to procure 15 MW of energy and capacity for Q3 2012 as
an "insurance" in case San Juan mining operation was to continue to be suspended. In
addition, there is a possibility that Azusa's share of the San Juan Project may be provided
to the Utah Association of Municipal Power Systems during all or a part of Q3.
The Q3 transaction was made under the WSPP enabling agreement and calls for delivery
of 15 MW of energy and capacity (WSPP Schedule C) during all hours of Q3 2012. All
transacted energy & capacity will be delivered at Palo Verde hub. The deal counterparty
is CitiGroup Energy, Inc., an entity with which Azusa transacted successfully on many
prior occasions. Authority for this transaction is granted to the Director of Utilities under
Azusa's Power Supply Risk Management Program.
Prepared by: Yarek Lehr, Assistant Director of Resource Management
Attachments:
Copy of Purchase Confirmation
074
Cifigroup Energy Inc.
2800 Post Oak Blvd.
Suite 500
Houston, TX 77056
AMENDED POWER CONFIRMATION
Date: January 17, 2012
To:
City of Azusa
Attn:
Tim Voung
Email:
tvuong@ci.azusa.ca.us
Tel:
1-626-812-5015
Fax:
1-626-334-3163
From:
Citigroup Energy Inc.
Attn:
Dana Nesmith
Email:
CEiconfirms®citigroup.com
Tel:
713-693-6640
Fax:
1-646-291-3383
Re: Physical Power Transaction
Transaction Reference Number: 10671956
This Confirmation amends, restates and supersedes any prior written confirmation for this transaction.
The purpose of this letter agreement is to confirm the terms and conditions of the Transaction entered into between
us on the Trade Date referred to below. This letter constitutes a "Confirmation" as referred to in the WSPP
Agreement specified below
U.S. Federal law requires Citi to obtain, verify and record customer identification information.
1. This Confirmation supplements, forms part of, and is subject to the WSPP Agreement effective as of June 3,
2011 (the "Agreement"), All provisions contained in the Agreement govern this Confirmation except as
expressly modified below in 3.
2. Terms used but not defined herein shall have the meaning ascribed to them in the Agreement.
3. The terms of the particular Transaction to which this Confirmation relates are as follows:
Trade Date: January 12, 2012
Buyer: City of Azusa
Seller: Citigroup Energy Inc.
Quantity: 15 MW per hour
Total Quantity: 33,120 MWH
Term: July 01, 2012 to and including September 30, 2012
Trade Date: January 12, 2012
Reference: 10671956 - 1
Page 1 of 2
F
075
Citigroup Energy Inc.
2800 Post Oak Blvd,
Suite 500
Houston, TX 77056
Delivery Period: All deliveries are made during Hour Ending (HE) 0100 through (HE) 2400 (24 hours
each day), Monday through Sunday, Pacific Prevailing Time (PPT).
Contract Price: USD 31.44 per MWH
Delivery Point: Palo Verde
Service Type: Service Schedule C
Scheduling: All scheduling will be completed on or before the time specified by either rule or
convention applicable to the market at the delivery point.
City of Azusa hereby agrees to check this Confirmation carefully and immediately upon receipt so that errors or
discrepancies can be promptly identified and rectified. If this Confirmation correctly sets forth the terms of our
agreement, please confirm such agreement by executing this Confirmation in the space provided below and returning it
to Citigroup Energy Inc. at 1-646-291-3383. In the absence of the receipt by Citigroup Energy Inc. of an executed
Confirmation or an objection to the terms hereof delivered to Citigroup Energy Inc. in accordance with the terms of the
Agreement, the acceptance of the provisions of this Confirmation by City of Azusa shall be governed by the applicable
terms and conditions of the Agreement, which, for this particular purpose, shall be deemed to control over any
conflicting terms in this Confirmation.
Accepted and confirmed as of the date first written:
City of Azusa
By: H.�.
Name.i
Title: (I+�os
Citigroup Energy Inc.
By:
Name: Stephanie Sever
Title: Vice President
Trade Date: January 12, 2012
Reference: 10671956 - 1
Page 2 of 2
076
F-3
AZUSA
INFORMATION ITEM
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE
UTILITY BOARD /
FROM: GEORGE F. MORROW, DIRECTOR OF
DATE: JANUARY 23, 2012
SUBJECT: PROPOSAL BY ATHENS SERVICES FOR RESIDENTIAL
AUTOMATED TRASH COLLECTION AND RECYCLING SERVICES
In September 2011, Athens Services submitted a proposal to Azusa Light & Water to
automate residential trash collection services and provide other recycling programs such
as organic waste recycling.
Staff provided a report to the Utility Board at its meeting on November 28, 2011,
outlining key aspects of the proposal and identifying Pros and Cons (see attached
proposal and report). The Utility Board provided staff with input on the proposal and
indicated that staff should continue to meet with Athens to gather additional information.
Athens' basic automation proposal would be accomplished at no additional monthly cost
to refuse customers and two new barrels would be provided to each customer at no
charge. Additional barrels would have a cost "TBD". Athens' proposal sought to extend
the term of the current "rolling" contract by 4 years, which was a concern to staff. This
would increase theevergreen notice period from 8 to_12 years.
To address this issue, staff explored a scenario whereby the City would not issue an
evergreen termination for the next 8 years, in exchange for the right to bid out waste
processing services at the end of that period. Under this scenario, the City would be able
to verify that Athens was the most cost effective waste processing solution for ratepayers.
Athens would have the right to match the low bid.
The parties appear fairly close to agreeing on the above point; however, Athens also
requested that the Street Sweeping Services contract be incorporated into the trash
collection contract. Staff is exploring the feasibility/desirability of doing this, and has no
position at this time.
On the question of pricing for additional barrels, staff suggested a relatively low price for
the first green or black barrel (i.e. $4.00/month) with a higher price for subsequent barrels
077
Athens Services Proposal
January 23, 2012
Page 2
(i.e. $10.00/month). Athens is agreeable to this pricing concept/level. At first blush, this
pricing level seems reasonable based on comparison data provided by Athens. Staff is
seeking additional comparables.
Since the last Utility Board meeting, Athens surveyed City streets and alleyways to
ensure that they could be serviced with an automated system. They feel comfortable that
all areas of the City can be efficiently serviced with the exception of a few areas, which
can be serviced with a smaller vehicle.
Direction from the Utility Board on this matter is requested.
Prepared by:
Cary Kalscheuer, Assistant to the Director of Utilities
Attachments:
November 28, 2011, Staff Report
Athens Services Proposal dated September 29, 2011
MI
AGENDA ITEM
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA
UTILITY BOARD
FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES
DATE: NOVEMBER 28, 2011
SUBJECT: PROPOSAL BY ATHENS SERVICES FOR AUTOMATED
RESIDENTIAL TRASH COLLECTION SERVICES AND
COMMERCIAL ORGANIC WASTE COLLECTION PROGRAM
RECOMMENDATION
It is recommended that the Utility Board review attached proposal by Athens Services
and provide guidance to staff on this matter.
BACKGROUND
Last year, the Utility Board approved a program to provide technical assistance to
businesses on how to set up source separated recycling programs. In carrying out this
program, it was discovered that many businesses were generating organic waste which
could be recycled.
However, the City's contract with Athens Services does not allow third party independent
recyclers to charge for recycling service, and so staff contacted Athens Services and
asked them to provide a proposal on commercial organics recycling. Athens Services in
turn asked City staff if we were interested in receiving a more comprehensive proposal
that would involve automated collection of yard waste from residential customers, with
the eventual addition of other organic waste to the yard waste stream.
City staff indicated interest in receiving such a proposal and on September 29, 2011,
Dennis Chiappetta of Athens Services delivered the attached proposal to City staff. Since
the proposal involves automated collection of mixed waste and yard waste from
residential customers, some background is provided in this report regarding the City's
manual collection system,. and feedback staff has received from residents over the years
079
Athens Services' Proposal
November 28, 2011
Page 2
about manual waste collection in the City of Azusa. Information is also provided about
the closure of the Puente Hills landfill as it relates to Athens' proposal. This report then
summarizes Athens' proposal, presents some `Pros'- and `Cons' about automated
collection, and requests the Board's input as to whether it has interest in pursuing
automated collection service.
Athens' Contract and Manual Waste Collection
The City entered into an exclusive franchise agreement with Athens Services for refuse
collection and recycling in October 2000. Under the current agreement, Athens Services
is required to collect residential waste and separated yard waste using manual labor. This
arrangement requires residents to purchase their own trash barrels and set them out at
curbside.
One' benefit of the current service is that it allows residents to set out an unlimited
number of barrels or bags of waste for collection each week. However, periodically, City
staff receive complaints from seniors living alone who only set out one or two barrels and
pay the same amount as a large family that sets out six or seven barrels. The main
concern of some seniors is that they are paying too much for service.
Also, new residents that move into Azusa who come from cities with automated trash
collection systems, sometimes call and complain about our manual collection system and
how the streets look on trash service day. Some new residents also get confused about
what size barrels to purchase. For newer customers accustomed to using 96 gallon
automated barrels, a 60 gallon barrel is sometimes perceived to be small. However,
Athens' contract limits barrel sizes to 33 gallons or smaller.
Another issue with the manual collection system is that it is not resulting in a very high
diversion rate for yard waste. This is likely due to the limited capacity at curbside for
yard waste and the lack of distinct barrels for yard waste. Contamination is also a factor.
Pending Landfill Closure and Loss of Waste Diversion Credit
Another issue the City faces is the pending closure of the Puente Hills landfill, which is
scheduled to close in October 2013. Presently, yard waste collected from residential
customers is delivered to the Puente Hills landfill where it is used as an alternate daily
cover material. This allows the City to take recycling credit pursuant to the State's
recycling mandate, AB 939. Once the Puente Hills landfill closes, the City will lose
recycling credit for its yard waste collection program, which has, in recent years, diverted
about 3,000 tons of materials per year.
Another effect of the Puente Hills landfill closure is that waste will have to be hauled
further distances for disposal once the landfill closes, and the more distant disposal
facilities will cost more per ton. Transportation costs and higher landfill fees are
expected to spike rates in 2014, and so diverting waste will help control refuse rates.
M
Athens Services' Proposal
November 28, 2011
Page 3
Athens' Proposal
In response to the above issues, City staff requested Athens Services to propose some
program ideas to the City on how Azusa could continue to divert yard waste, possibly
increase waste diversion, and help businesses divert more waste, especially organic
waste. Athens' proposal is attached for your reference, consideration and input.
Following summarize the main points of the proposal:
• Provide automated trash collection service to residents using one black 90 gallon
container, and one green 90 gallon container for yard waste.
• Service would be provided using new trucks powered with compressed natural
gas (CNG).
• The contents of the black container would be taken to Athens' material recovery
facility (MRF) and the yard waste would be taken to Puente Hills until the landfill
closes in 2013.
• When the Puente Hills landfill closes, the yard waste program would be expanded
to allow residents to place acceptable organic waste (like food waste) into the
green barrel.
• The contents of the green barrel, after the program is expanded to include other
organics, would be delivered by Athens to their American Organics facility, an
open air compost facility located in Victorville, CA.
• After Puente Hills landfill closes, the organics service will be offered to
multifamily complexes, and the same trucks used to service single family
customers will be used.
• It is proposed that an organics collection program be offered right now to
commercial customers. Proposed program includes a 90 gallon barrel serviced
two times per week.
• When the City buys compost for use in landscaping, Athens requests that the City
buy compost from Athens or American Organics. Athens is also offering a free
compost giveaway event annually in the City.
• Athens proposes to indemnify the City against AB 939 fines if the City doesn't
reach the 50% waste diversion requirement.
• All proposed services outlined in this proposal are included "at no additional cost
to the rate payers." However, residents who order extra barrels would pay more —
amount to be determined.
• In exchange for above program offerings, Athens requests a 4 year extension to
the current rolling contract.
Athens Services' Proposal
November 28, 2011
Page 4
Pros and Cons
Athens' proposal has several merits worthy of further consideration and it is presented to
the Utility Board at this time to get its input. Some `Pros' and `Cons' are set forth below
for consideration. These are not exhaustive, just some preliminary observations by staff.
I PROS I CONS I
• Automated collection system would
improve the appearance of the City
• Per barrel pricing for extra barrels is
more equitable to ratepayers
• Residents would not have to buy their
own trash barrels or bags to contain
waste
• City would divert larger amount of yard
waste and organic waste using larger
barrels
• Provides long term disposal/recycling
option for yard waste—even after
Puente Hills closes
• Added waste diversion from multiple
sectors, residential, multifamily and
commercial, is likely necessary to help
the City comply with new 75% waste
reduction goal of AB 341
• Diversion of organic waste from
multifamily and commercial sectors can
help control long term cost increases if
pass-through agreement terms stay in
effect
• CNG powered trucks would be cleaner
and quieter than current fleet
• Automated collection will reduce noise
levels and perform the trash pickup
function faster
• Some residents will resist the use of
automated barrels at first (but most will
like them much better)
• Residents that need additional black or
green barrels will pay more
• Other program options could be
offered, i.e., 3 automated barrels, with 1
for commingled recyclables –
environmentally conscious people
would feel they are doing their part
• There may be other less expensive
compost facilities that could be built
within the contract term – so City
should maintain right to direct yard
waste flow
• Proposal extends City's obligation to
continue processing mixed waste at
Athens' MRF by 4 years; this may be a
cost issue after Puente Hills closes as
Waste -By -Rail costs or Truck Transfer
costs will add significantly to MRF gate
fee
• There may be lower cost MRFs
developed within proposed contract
term or other types of diversion
facilities; City may want to secure right
to use these facilities by end of current
contract term
Athens has done a good job serving the City of Azusa since 2000 and is fully capable of
implementing the proposed programs. Implementation would necessitate development of
a contract amendment, which would set forth an implementation schedule, costs/rates for
extra barrels, how rates would be adjusted and billed, the contract term, and the City's
right to continue to direct yard waste flow. Other items would also have to be reviewed
and negotiated, including liability issues regarding the Victorville compost facility.
Athens Services' Proposal
November 28, 2011
Page 5
Staff requests input from the Utility Board on what level of interest there is in moving
toward a residential automated collection system, and any other comments the Board may
have about other aspects related to the content of this report or attached proposal. Staff
would like to note that it has no preference as to whether a 2 barrel system or 3 barrel
system is preferable and would defer such a recommendation to a consultant or the Utility
Board.
FISCAL IMPACT
Cost impacts cannot be fully analyzed at this point due to the lack of some information
regarding the cost for extra barrels, cost to transport waste to the compost facility, and the
per ton cost at the compost facility; these costs could be compared to the estimated cost
of disposing waste following closure of the Puente Hills landfill, and alternately, to the
cost of disposing organic waste at any other locally available compost facility.
Consultant assistance may be helpful to identify competitive facilities or negotiate with
Athens contract changes.
Prepared by:
Cary Kalscheuer, Assistant to the Director of Utilities
�0
September 29, 2011
Cary Kalseheuer
City of Azusa
213 E. Foothill Blvd.
Azusa, CA 91702
Dear Cary:
14048 Valley Blvd.
P.O. Box 60009
City of Industry, CA 91716-0009
fax (646) 330-4686
(646) 3363636
Athens Services is pleased to respond to your request for organic processing. The last time the
City required diversion services, Athens was in a position to assist with compliance through
MRF processing. This program had indeed paid dividends as the City became compliant and
now the City will be in compliance with AB 32 and AB 341 without implementing costly source
separated programs that increase carbon footprint. Other cities are wrestling with ideas to
comply and will pay high costs to do so.
Once again Athens is in a unique position to assist as the result of our forward planning and
acquisition of an organics processing facility.
As we discussed by phone, the following is a comprehensive proposal to maximize organic
recovery that includes single family, multi -family and commercial sectors.
Residential
We propose automating the residential collection using a two container model as soon as
possible. All residents would receive a 90 gallon black container for refuse and the content will
continue to be processed at our MRF for maximum recovery of recyclables.
Residents will also receive a 90 gallon green container for yard waste. The automation of yard
waste has netted up to two times that of a manual collection system in our past experience thus
reducing landfill costs going forward and we will continue to use the alternate daily cover
program until the Puente Hills landfill closure in 2013.
Post closure of Puente Hills, the automated yard waste collection will be expanded to include all
acceptable organics (list attached). This will be a pilot program and will be tested to determine
acceptable levels of contamination.
The yard waste/organics will be transferred to our American Organics facility, composted and
used as a soil amendment. The addition of organics will also reduce landfill dependency.
�'On ¢,
WE
There will be additional costs for extra containers
Multi -Family
We currently service over 250 complexes that total 6,100 units. All locations will be offered the
same organic service as single family homes in 2013 post Puente Hills Landfill closure. The 90
gallon green containers will be collected curbside by route day utilizing the same automated
trucks used for residential collection.
Properly educated, the multi -family could achieve organic diversion equal to single family
homes as the number of units in the City is very high. It is an opportune time to take advantage
of the City's consultant to do the outreach needed for success. Athens will also dedicate our
field representatives to educate the multi -family sector.
Commercial
We service 650 accounts and will offer any interested participants an organic diversion program
now. We will use 90 gallon containers collected twice per week for this program.
Again, education will be the key to our success.
Compost
The key to any successful compost operation is to have markets for the certified organic compost
created from the facility. To this end, we request that the City purchase our compost created
from Azusa's own waste in place of any current procurements.
Athens will also offer free compost giveaways each year whereby residents can avail themselves
to the rich compost at a location to be determined. This is a very popular concept well received
by residents.
AB 939 Indemnity
As we discussed, Athens currently has to divert 13,000 tons per year from landfill. We believe
the programs outlined above will allow us to indemnify the City against fines and penalties for
non-compliance with the 50% diversion goal. Important to note that the City has made the 50%
mark easily during recessionary times. The advantage of indemnity will be obvious in
inflationary times when disposal increases or as the City continues to grow in population and
with new businesses.
Financial Imnact
Athens values our long term relationship with the City of Azusa. As such, we desire to keep it
simple and pain free to residents and businesses.
kel,�Tprop.lu
085
We propose providing all of the commercial and multi -family services outlined in this letter at no
additional cost to the rate payers. The residential automation including containers and new truck
costs will be implemented now at no additional cost to rate payers. Upon the closure of Puente
Hills, Athens will guarantee capacity for the yard waste and organics at our American Organics
compost facility at a most favored nation rate. This will act as future cost control for Azusa
residents and businesses and will be one of the most progressive organic programs in the state.
In an effort to enhance our relationship through value added services, we respectfully request a
four year extension to our rolling term agreement, not cancellable for four years, in exchange for
these services. We have limited daily capacity at American Organics and will guarantee capacity
for the Azusa organics. We do not believe this value can be matched. All this plus new trucks
and container purchases, millions invested in enhancing our Industry MRF, our American
Organics investments as well as our ongoing quest to develop an anaerobic digester facility in
their region. A true win, win proposition.
Extending the agreement will considerably assist our ability to continue to finance progressive
solutions as alternatives to landfill and will save Azusa rate payers millions of dollars over the
life of the Agreement.
Please consider this proposal and call me to set up a meeting to discuss in detail. I can be
reached on my direct line at (626).855-7205, our general office number (626) 336-3636 or in the
evenings and weekends in my home a
Sincerely,
444P7-— ----
ennis M. Chiappetta
Executive Vice President
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cc: Fran Delach
George Morrow
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RGANLECTIGN PROGRAM
All Food
fruits, vegetables,
meat, poultry,
seafood, shellfish,
bones, rice, beans,
pasta, bread, cheese
and eggshells. _ ,
Food -soiled
Paper
waxed cardboard,
napkins, paper towels,
paper plates, paper milk
cartons, paper cups,
pizza boxes, too bags,
Cottee hhors, rawooden®
crates, sawdust. a
Plants
floral trimmings, tree
trimmings, leaves, grass
brush, weeds. A
Please Call
(8*88) 336-6100
Athens Services
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Toda Comida
frutas, verduras,
carnes, madscos, .
poscados, huesos,
arroz, frijoles, pastas,
pan, cluosos, c6scaras
de huevo.
Papel Manchado
por Comida
carton encerado,
servilletas, plates y
toalias de papal, filtros
y residues de ole, vases
de papel, ojas de pizza,
recipientes de carton
para lathe, bolsas de to,
rajas de madera,
aserrin A -4y
Plantas
recortes de flores y
V " drboles, hojas,cesped
cortado, malezas,
hierbas. VJ
087
r
Toda Comida
frutas, verduras,
carnes, madscos, .
poscados, huesos,
arroz, frijoles, pastas,
pan, cluosos, c6scaras
de huevo.
Papel Manchado
por Comida
carton encerado,
servilletas, plates y
toalias de papal, filtros
y residues de ole, vases
de papel, ojas de pizza,
recipientes de carton
para lathe, bolsas de to,
rajas de madera,
aserrin A -4y
Plantas
recortes de flores y
V " drboles, hojas,cesped
cortado, malezas,
hierbas. VJ
087
P00*4&
INFORMATIONAL ITEM
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY
BOARD
FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIE
DATE: JANUARY 23, 2012
SUBJECT: APPA ANNUAL CONFERENCE
The American Public Power Association's (APPA) Annual Conference is scheduled for June 16-
20, 2012 in Seattle, WA.
Information about the conference may be accessed at
hnp://www.publicpower.orp,NationalConference.
If any Utility Board member is interested in attending, please contact Liza Cawte, at 812-5109.
Prepared by:
Cary Kalscheuer, Assistant to the Director of Utilities
1..