HomeMy WebLinkAboutAgenda Packet - April 22, 2013 -UB ..... i r
AZUS
LIGHT l WATER A
AGENDA
REGULAR MEETING OF
AZUSA UTILITY BOARD
AZUSA LIGHT & WATER APRIL 22,2013
729 N. AZUSA AVENUE 6:30 P.M.
AZUSA, CA 91702
AZUSA UTILITY BOARD
URIEL E. MACIAS
CHAIRPERSON
ROBERT GONZALES JOSEPH R.ROCHA
VICE CHAIRPERSON BOARD MEMBER
EDWARD J.ALVAREZ ANGEL CARRILLO
BOARD MEMBER 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
1. (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.)
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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.
1. Minutes. Recommendation: Approve minutes of regular meeting on March 25, 2013 as written.
2. Approval of Notice of Completion from J. De Sigio for Water Project W-265, Water Main
Replacement in Lark Ellen Avenue, Brookport Street, Bellbrook Street, Benwood Street, Benbow
Street, Cypress Frontage Street, Roxburgh Venue and Vogue Avenue in Los Angeles County near
Covina. Recommendation: Accept Project W-265, approve the Notice of Completion, and direct the
City Clerk's Office to execute the Notice of Completion, record and file at the Office of the Los Angeles
County Recorder.
3. Acceptance of Grant of Easements from William Lyon Homes Inc and Shea Homes LP.
Recommendation: Approve the following resolutions accepting Grants of Easements for the subject
locations, and authorize the City Clerk to file them in the Office of the Los Angeles County Recorder.
A RESOLUTION OF THE UTILITY BOARD/CITY COUNCIL OF THE CITY OF AZUSA ACCEPTING A
CERTAIN GRANT OF PERMANENT EASEMENT AND DIRECTING THE RECORDING THEREOF.
(William Lyon Homes Inc,Lots 13, 14, 15 Tract 66141 Gardenia).
A RESOLUTION OF THE UTILITY BOARD/CITY COUNCIL OF THE CITY OF AZUSA ACCEPTING A
CERTAIN GRANT OF PERMANENT EASEMENT AND DIRECTING THE RECORDING THEREOF.
(Shea Homes, Lot 1 through 6 Tract 66141 Parsons Place).
4. Rejection of Bids Received for Constructing a Concrete Block Perimeter Wall at the Electric Yard
Building-1020 W. 10th Street. Recommendation: 1) Reject all bids for constructing the conventional
concrete block wall at the south perimeter of the Electric Yard; and 2) authorize staff to rebid the project
at a later date, subject to finding a less costly alternate method of constructing a facility barrier or wall at
the Electric Yard.
5. Award of Professional Services Agreement to SAIC for a Hydroelectric Project Interconnection
Feasibility Study. Recommendation: 1) Award a Professional Services Agreement (PSA) to SAIC in an
amount not-to-exceed $12,100 for performing a Hydroelectric Project Interconnection Feasibility Study;
and 2) authorize the Director of Utilities to sign the PSA subject to review and approval by legal counsel.
6. Approval of Letter of Support for AB 1257 (Bocanegra), the Natural Gas Policy Act.
Recommendation: Join the California Municipal Utilities Association (CMUA) and the Southern
California Public Power Authority (SCPPA) by approving a letter of support for AB 1257 (Bocanegra)
titled "Natural Gas Policy Act" and authorizing the Mayor to sign the letter.
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7. Approval of $15,000 Additional Amendment to SC Fuels' Blanket Purchase Order.
Recommendation: Authorize an amendment in the amount of $15,000 to be added to the blanket
purchase order issued to SC Fuels for the fiscal year ending June 30, 2013.
8. Approval of $19,229 Additional Amendment to San Gabriel River Water Committee's Blanket
Purchase Order. Recommendation: Authorize an amendment in the amount of$19,229 to be added to
the blanket purchase order issued to San Gabriel River Water Committee for the fiscal year ending June
30, 2013.
E. SCHEDULED ITEMS
1. Declaration of Phase II Water Shortage Restrictions Effective June 1, 2013. Recommendation:
Pursuant to Azusa Municipal Code Section 78-505, and Rule No. 21 of Azusa Light & Water Rules &
Regulations, ratify the Director of Utilities' declaration that a Phase II Water Shortage exists which
means that conservation measures are to be followed by customers in Azusa Light & Water's water
service territory beginning on June 1, 2013.
2. Authorization to Schedule and Notify Property Owners of Public Hearing for Refuse Rate
Adjustment on June 17, 2013. Recommendation: Authorize staff to print and mail a 45-day advanced
notice of public hearing to be held June 17, 2013 to consider the annual refuse rate adjustment.
F. STAFF REPORTS/COMMUNICATIONS
1. Morgan Meguire LLC Monthly Legislative Update
G. CLOSED SESSION
1. CONFERENCE WITH LEGAL COUNSEL-ANTICIPATED LITIGATION
Pursuant to California Government Code Section 54956.9 (c)
One Potential Case: Successor Agency/City of Azusa/Azusa Utility v. State of California Department of
Finance, et. al.
H. ADJOURNMENT
1. Adjournment.
"In compliance with the Americans with Disabilities Act, ?f 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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APPROVED
Date y Ia a o i3b._
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AZUSA
(IGMT & WATER
CONSENT CALENDAR
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY
BOARD
FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIE
DATE: APRIL 22, 2013
SUBJECT: APPROVAL OF NOTICE OF COMPLETION FOR PROJECT W-265, WATER
MAIN REPLACEMENT IN LARK ELLEN AVENUE, BROOKPORT STREET,
BELLBROOK STREET, BENWOOD STREET, BENBOW STREET,
CYPRESS FRONTAGE STREET, ROXBURGH AVENUE, AND VOGUE
AVENUE IN LOS ANGELES COUNTY NEAR COVINA
RECOMMENDATION
It is recommended that the Utility Board accept Project W-265, approve the Notice of
Completion, and direct the City Clerk's Office to execute the Notice of Completion, record and
file at the Office of the Los Angeles County Recorder.
BACKGROUND
The Water Division has a program of replacing water mains that are experiencing problems with
leaks and/or that are, for various reasons, experiencing flow and pressure problems. Bids for this
project were received on June 7, 2012.
At the regular Utility Board meeting held on June 25, 2012, the City Council approved the award
of contract for water main replacement services for approximately 6,200 linear feet of pipeline to
J. De Sigio Construction, Inc. of Baldwin Park, California for a bid amount of $1,429,780.00.
Staff issued the Notice to Proceed on August 8, 2012, with an effective start date of August 20,
2012. The contract completion date for all work was January 20, 2013.
FISCAL IMPACT
Total cost of the project was $1,290,044.36. The retention payment in the amount of$64,502.22
will be released thirty (30) days after the recordation of the Notice of Completion with the Los
Angeles County Recorder's Office.
Prepared by: Chet F. Anderson, P.E., Assistant Director, Water Operations
Attachment: Notice of Completion
Or,9
RECORDING REQUESTED BY
City of Azusa
AND WHEN RECORDED MAIL TO:
NAME Azusa City Clerk
STREET
ADDRESS 213 E.Foothill Blvd.
CITY,STATE& Azusa,CA 91702
ZIP CODE
NOTICE OF COMPLETION
Notice pursuant to Civil Code Section 3093,must be filed within 10 days after completion.(See reverse side for Complete requirements.)
Notice is hereby given that:
1. The undersigned is owner or corporate officer of the owner of the interest or estate stated below in the property hereinafter described:
2. The full name of the owner is The City of Azusa
3. The full address of the owner is 729 N.Azusa Avenue,Azusa,CA 91702
4. The nature of the interest or estate of the owner is:In fee.
(IF OTHER THAN FEE,STRIKE IN FEE AND INSERT,FOR EXAMPLE,PURCHASER UNDER CONTRACT OF PURCHASE,OR LESSEE)
5. The full names and full addresses of all persons,if any,who hold title with the undersigned as joint tenants or as tenants in common are:
NAMES ADDRESSES
None
6. The full names and full addresses of the predecessors in interest of the undersigned,if the property was transferred subsequent to the commencement of
the work or improvements herein referred to:
NAMES ADDRESSES
None
7. A work of improvement on the property hereinafter described was completed on February 28,2013 . The work done was:
Project W-265 -Watermain Replacement Lark Ellen Et.Al.-771 LF in Brookport Street; 1,443 LF Bellbrook Street 638 LF in Benwood Street;565 LF in
Benbow Street;660 LF in Cypress Frontage Street;46 LF in Roxburgh Avenue;960 LF in Lark Ellen Avenue; 1,177 LF in Vogue Avenue;in Los Angeles
County near Covina.
8. The name of the contractor,if any,for such work of improvement was
J.De Sigio Construction,Inc.,5055 Bleecker Street,Baldwin Park,CA 91706 June 26,2012
(IF NO CONTRACTOR FOR WORK OF IMPROVEMENT AS A WHOLE,INSERT NONE) (DATE OF CONTRACT)
9. The property on which said work of improvement was completed is in the City of Azusa,County of Los Angeles,and State of CA;and is described as
follows: Proiect W-265 -Watermain Replacement Lark Ellen Et.Al.-771 LF in Brookport Street 1,443 LF Bellbrook Street;638 LF in Benwood Street;
565 LF in Benbow Street;660 LF in Cypress Frontage Street;46 LF in Roxburgh Avenue;960 LF in Lark Ellen Avenue; L177 LF in Vogue Avenue;in Los
Angeles County near Covina..
10. The street address of said property is None
Joseph R. Rocha,Mayor
Dated:.
(SIGNATURE OF OWNER OR CORPORATE OFFICER OF OWNER NAMED IN PARAGRAPH 2 OR HIS AGENT)
VERIFICATION
I,the undersigned,say:I am the person who signed the foregoing notice. I have read said notice of completion and know its contents,and the facts stated
therein are true of my own knowledge.
I declare under penalty of perjury that the foregoing is true and correct.
Executed at Azusa,California,this day of February 28,2013.
Joseph R. Rocha, (SIGNATURE)
(p1.0
APPROVED
Date �aa-fa-ol 1,3
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AZUSA
CMT 6 WAYEE
CONSENT ITEM
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY
BOARD
FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES
DATE: APRIL 22, 2013
SUBJECT: LETTER OF SUPPORT - AB 1257 (BOCANEGRA)NATURAL GAS POLICY
ACT
RECOMMENDATION
It is recommended that the Azusa Utility Board/City Council join the California Municipal
Utilities Association (CMUA) and the Southern California Public Power Authority (SCPPA) by
approving a letter of support for AB 1257 (Bocanegra) titled "Natural Gas Policy Act" and
authorizing the Mayor to sign the letter.
BACKGROUND
The encouragement of a rational natural gas policy in California is important to Azusa with its
participation in the efficient and state-of-the-art Lodi Energy Center. This type of "fast start"
facility is critical to the future reliable operation of solar and wind energy in California.
AB 1257 would enact the Natural Gas Policy Act and would require the CEC, every 4 years, to
prepare and submit to the Legislature a report containing specified information identifying
strategies to maximize the benefits obtained from natural gas as an energy source, as specified.
The bill would further require the Governor to review that report by a specific date and to report
specific agreement or disagreement with, or modifications to, the report to the Legislature, and
would declare the modified version of the report the natural gas policy of the state. This bill
would also make legislative findings and declarations including, among other things, that it is the
policy of the state to reduce greenhouse gas emissions and that an efficient and effective strategy
for the use of natural gas has potential for helping to meet these objectives.
FISCAL IMPACT
None.
Prepared by: Paul Reid, Business Development/Public Benefit Programs Coordinator
Attachment: AB 1257 Support Letter
049
April 22, 2013
The Honorable Wes Chesbro
Chair, Assembly Natural Resources Committee
State Capitol, Room 2141
Sacramento, CA 95814
RE: AB 1257 (Bocanegra)Natural Gas Policy Act -- SUPPORT
Dear Assembly Member Chesbro:
On behalf of City of Azusa and Azusa Light & Water, we respectfully request your support for the
Natural Gas Policy Act (AB 1257).
In order to ensure a reliable and affordable supply of natural gas, there is a distinct need for a
balanced and responsible natural gas energy policy for California. AB 1257 balances all interests by
directing the CEC to thoughtfully evaluate and recommend the right natural gas strategies to further
reduce greenhouse gas emissions and cultivate a robust clean energy economy.
The encouragement of a rational natural gas policy in California is important to Azusa with its
participation in the efficient and state-of-the-art Lodi Energy Center. This type of"fast start" facility
is critical to the future reliable operation of solar and wind energy in California.
We applaud Assembly Member Bocanegra for authoring AB 1257 and helping to ensure the long-
term sustainability of California's clean energy future. The Azusa Light & Water Utility Board/City
of Azusa strongly supports AB 1257 and urges you to support its passage.
Sincerely,
Joseph R. Rocha
Mayor
cc: Members, Assembly Natural Resources Committee
The Honorable Raul Bocanegra
Mr. Israel Salas, Legislative Director, Office of Asm. Bocanegra
Mr. Lawrence Lingbloom, Chief Consultant, Asm. Natural Resources Committee
Ms. Elizabeth MacMillan, Principal Consultant, Asm. Natural Resources Committee
Mr. Daryl Thomas, Consultant, Asm. Republican Caucus
Ms. Gabrielle Zeps, Consultant, Assembly Speaker's Office
Mr. Arnie Sowell, Policy Director, Assembly Speaker's Office
Ms. Nancy McFadden, Executive Secretary, Office of Governor Jerry Brown
Mr. Gareth Elliott, Secretary, Legislative Affairs, Office of Governor Jerry Brown
050
APPROVED
Date a-a-1 a 1 a■►
•
AZUSA
r.nra .' ry
CONSENT CALENDAR
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY
BOARD
FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES
DATE: APRIL 22, 2013
SUBJECT: APPROVAL OF $19,229 AMENDMENT TO THE BLANKET PURCHASE
ORDER TO THE SAN GABRIEL RIVER WATER COMMITTEE
RECOMMENDATION
It is recommended that the Azusa Utility Board authorize an amendment in the amount of
$19,229 to the blanket purchase order issued to San Gabriel River Water Committee for the
fiscal year ending June 30, 2013.
BACKGROUND
San Gabriel River Water Committee was established in 1889 as a court ordered compromise
between the various parties who claimed rights to the water in the San Gabriel River. The
Committee originally had nine members, but over the years the interests of the original nine
members evolved into a Committee consisting of Azusa Valley Water Company; the City of
Azusa; Covina Irrigating Co.; Cal American Water Company and the City of Glendora. The
work of the Committee is funded by assessments to the members. Azusa's assessment is
approximately 44% of the total assessment. For this fiscal year, a blanket purchase order of
$60,771 was approved for the San Gabriel River Water Committee. Due to an increase in
assessments and extra expense arising from Monrovia Nursery's departure from the Committee,
an additional amendment to the blanket purchase order is required for the remainder of the fiscal
year.
FISCAL IMPACT
The fiscal impact will be up to $19,229 for a total amended purchase order of$80,000. Funds
are available in the Water Division's Account 32-40-722-704-6493.
Prepared by: Chet F. Anderson, P.E., Assistant Director-Water Operations
052
APPROVED
Date 141 ea-1 ao i3 11111 s
01!
ALuSA
4Hr a 5+'.RTtk
SCHEDULED ITEM
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY
BOARD
FROM: GEORGE F. MORROW
DATE: APRIL 22, 2013
SUBJECT: DECLARATION OF PHASE II WATER SHORTAGE RESTRICTIONS
RECOMMENDATION
Pursuant to Azusa Municipal Code Section 78-505, and Rule No. 21 of Azusa Light & Water
Rules & Regulations, the Director of Utilities is declaring that a Phase II Water Shortage exists
and is communicating the basis for this declaration to the Utility Board. The Phase II Water
Shortage declaration means that conservation measures are to be followed by customers in Azusa
Light & Water's water service territory beginning on June 1, 2013. Utility Board ratification of
this declaration is requested.
BACKGROUND
As you are aware, this past winter turned out to be the one of the driest rainy seasons on record
in the San Gabriel Valley. The water held behind the dams along the San Gabriel River is close
to minimum pool levels and, as a result, little local water remains to be spread in the Canyon
Basin and the Main San Gabriel Basin. The Safe Yield for pumping has been lowered by the
Main San Gabriel Basin Watermaster, and it is expected to be lowered even further at the May
Watermaster Board meeting.
There may be additional water from Metropolitan Water District that will be discharged to the
River and which may be diverted to the Canyon Basin, but that supply is expected to be limited
and expensive. The San Gabriel Valley Municipal Water District, of which Azusa is a member
City, has a share of the State Water Project that is currently being spread in the Canyon Basin,
but this will end no later than August 31. SGMWD's share of the SWP is limited to only 40%
due to limited water supply conditions in northern California.
053
Phase II Water Shortage
April 22, 2013
•
Page 2
The snow pack in the Sierra Mountains, which usually provide the bulk of imported water to the
San Gabriel Basin through the State Water Project, has been very low both in quantity and in
moisture content, and it is rapidly melting due to higher than normal temperatures. Fortunately,
due to above average rainfalls last year (2011-2012), there is currently an average amount of
water stored behind the dams along the State Water Project.
A third source of water comes from the Colorado River, which has been reduced in recent years
due to reapportionment, as well as a drought, in the past several years in the Rocky Mountains'
watershed, and increased usage by the other States along the River.
With very limited local rainfall and curtailed imports, it is critical that mandatory water
conservation programs be implemented. The last time a Phase II water shortage was declared
water consumption decreased by about 20%. Water consumption has continued to be lower than
the 2005 through 2010 period, however, consumption has increased by 5%+ since the drought
restrictions were lifted two years ago.
Upon ratification, Staff must prepare a declaration of water shortage notice and publish it in a
local newspaper pursuant to Rule No. 21. Staff will also prepare and send a letter to all
residential and commercial water customers outlining the particular conservation practices and
measures as prescribed by Rule No. 21. A courtesy notification will also be sent to city
managers of those cities receiving water service from Azusa Light&Water.
FISCAL IMPACTS
Conservation reduces water sales and hence sales revenue will be reduced. It is difficult to
accurately estimate the financial impact of reduction conservation, but utility staff will monitor
closely.
Prepared by: Chet F. Anderson, P.E. Assistant Director, Water Operations
Attachment:
Phase I and Phase 2
Conservation.doc
054
Sec.78-504.-Phase I water shortage.
(a) A Phase I water shortage may be declared by the director of utilities if any combination of
events or factors threaten the adequacy of foreseeable water supply to consumers;
qualifying factors to be considered in making a water shortage declaration include,but are
not limited to, time of year, local rainfall, state water project allocations, safe yield as
determined by the San Gabriel Basin Watermaster,amount of runoff into the San Gabriel
and Morris dams,ground water level in different basins,especially the upper basin,and any
major operating emergencies or natural disasters that cause damage to the water supply or
water distribution system. Prior to making a public announcement of a Phase I water
shortage,the director of utilities shall document the basis for the water shortage declaration
and communicate this information to the city manager and city council.
Under a declared Phase I water shortage,conservation measures listed in this section shall
be implemented.No water user within the city and the service area of the city's water utility shall
knowingly make, cause, use or permit the use of water for residential, commercial, industrial,
agricultural or any other purpose in a manner contrary to this division or in any amount in excess
of that use permitted by the conservation phases designated in this division. Mandatory water
conservation measures shall be as follows:
(1) No water user shall cause or permit excess runoff to occur from any hose,pipe,valve,
faucet,sprinkler or irrigation device onto any sidewalk,street or gutter or to otherwise
escape from the property if such flow or runoff can reasonably be prevented.
(2) If a break or leak occurs within the water user's plumbing or private distribution system,
the leak shall be repaired within 48 hours after the water user discovers the leak or after
the water user is notified of the leak.
(3) Commercial and noncommercial watering of grass,lawns,ground cover,open ground,
shrubbery,crops,gardens and trees,including agricultural irrigation,in a manner or to
an extent which allows excess runoff from the area being watered shall not be
permitted. Runoff which is a natural consequence of conservative watering, either by
hand or mechanical sprinkling facilities, is permitted so long as such runoff is not
excess runoff as defined in section 78-501
(4) There shall be no lawn watering and landscape irrigation by residential water users
between the hours of 6:00 a.m.and 6:00 p.m.on any day of the week. If a hand-held
hose with a positive shutoff nozzle or drip irrigation system is used,watering may be
done at any time.
(5) There shall be no lawn watering and landscape irrigation by commercial and public
agency water users between 10:00 a.m.and 6:00 p.m.on any day of the week,except
that there shall be no restriction of watering utilizing a hand held hose with a positive
shutoff nozzle, drip irrigation system, or system which uses reclaimed or recycled
wastewater.
(6) There shall be no washing down of sidewalks,walkways,driveways,parking lots and all
other paved surfaces,except to alleviate immediate health,fire or sanitation hazards.
(7) Restaurants and food serving establishments shall only serve water to their customers
upon request of each customer,and shall not operate a water hose without a positive
shutoff nozzle. Restaurants and food serving establishments provided with public
information by the city's water utility about a water shortage shall post the information
so that it is made available to customers.
(8) It is unlawful to remove,replace,alter or damage any water meter or any components
thereof, including but not limited to the meter face, its dials or other water usage
indicators and any flow-restricting device installed.
05 5
•
(9) Water from fire hydrants shall not be used for any purpose other than to fight fires or for
other activities where such use is immediately necessary to maintain the health, safety
and welfare of the residents of the city and customers of the city water utility. Metered
water use for control of dust and at construction sites shall be considered necessary to
maintain health and safety and are eligible uses of water from fire hydrants.
(10) Schools, golf courses, governmental agencies, city parks and cemeteries, public or
private, are required to reduce the amount of water used for irrigation purposes to levels
sufficient to maintain plant life or public use thereof. Excessive use of irrigation systems
for long periods of time is prohibited and may be determined by the frequency and
duration of irrigation activity, water saturated or overly soft turfs, lawns, and soils, or
pooling of water on turfs, lawns, or soils. Water users under this section may be
required to submit a copy of a water conservation plan and landscape irrigation
schedules.
(11) Washing of motor vehicles, trailers, boats and other types of equipment shall be done
only with a hand-held bucket or a hose equipped with a positive shutoff nozzle for quick
rinse, except that washing may be done with reclaimed wastewater or by a commercial
car wash using recycled water. No excess runoff shall result from such activities as
defined in section 78-501
(12) No water shall be used to clean, fill or maintain levels in decorative fountains, ponds,
lakes or other similar aesthetic structures, unless such water is part of a recycling
system.
(13) The filling or replenishment of swimming pools shall be permitted, but the property
owner will be liable for possible charges in the event a Phase II, Ill or Phase IV drought
is declared.
(14) The owner and operator of every hotel, motel, inn, guest house and short-term
commercial lodging shall post a notice of water shortage and any necessary
compliance measures.
(b) Azusa Light and Water shall publish the declaration of a Phase I water shortage in a local
newspaper of general circulation.
(Ord. No. 08-06. § 2. 6-16-08)
Sec. 78-505. - Phase II water shortage.
(a) A Phase II water shortage may be declared by the director of utilities if any of the conditions
in section 78-504(a) for a Phase I water shortage are met, and it has been determined that
there is need to reduce water consumption by up to ten percent based on available water
supply and demand information. Prior to making a public announcement of a Phase II water
shortage, the director of utilities shall document the basis for the water shortage declaration
and communicate this information to the city manager and city council. Under a declared
Phase II water shortage the following conservation measures shall be implemented:
(1) Conservation measures listed in section 78-504 shall be in effect, except that the
restrictions on watering lawns, landscapes and other turf areas shall be modified to limit
watering by residential water users to 6:00 p.m. starting on Tuesdays, Thursdays and
Sundays until 6:00 a.m. the following day for customers with a street address number
ending in an even number (0, 2, 4, 6 or 8), and to 6:00 p.m. starting on Mondays,
Wednesdays and Saturdays until 6:00 a.m. of the following day for customers with a
street address number ending in an odd number (1, 3, 5, 7 or 9). If a hand-held hose
with a positive shutoff nozzle or drip irrigation system is used, watering may be done at
any time on the designated days.
05 E;
(2) Lawn watering and landscape irrigation by commercial and public agency water users
shall be limited to 6:00 p.m. starting on Mondays, Wednesdays and Fridays until 10:00
a.m. of the following day, except that there shall be no restriction of watering utilizing a
hand held hose with a positive shutoff nozzle, drip irrigation system, or system which
uses reclaimed or recycled wastewater.
(3) If a Phase II water shortage is declared, water users will be subject to the drought
charge pursuant to section 78-511 (b).
(b) Azusa Light and Water shall publish the declaration of a Phase II water shortage in a local
newspaper of general circulation, including the drought charge and implementation date of
the declaration.
(Card. No, 08-06, § 2, 6-16-08)
•
i57
Information Item
Presented 4/ a-9--/a-vi '
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_,. .
AZUSA
.IGHT d MATER
INFORMATION ITEM
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY
BOARD
FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES
01
DATE: APRIL 22, 2013
SUBJECT: FEDERAL LEGISLATIVE UPDATE BY MORGAN MEGUIRE LLC
Morgan Meguire LLC's April reports bring more update on numerous issues including the fiscal
year 2014 budget, energy policy, municipal finance, executive branch nominations, nuclear
waste, Dodd-Frank Act, and other issues that are of concern to Southern California Public Power
Authority(SCPPA)members.
Some topics covered by attached reports that might be of interest to the Utility Board include the
following:
• Budget Update, including the President's signing of the Continuing Resolution (CR) to
keep the government funded from April-September averting a government shutdown with
$85 billion sequestration cuts based on Budget Control Act.
• Energy Policy, including Senate Energy Panel's plan to hold forums on natural gas issues
scheduled on May 16, 21, & 23.
• Municipal Finance, highlighting the importance of municipal bonds, keeping muni bonds
tax-free, evaluating proposal on municipal bond restrictions, and American Public Power
Authority and other public power groups' joint testimony to tax reform and tax
provisions affecting state and local government.
• Update on Dodd-Frank Act, including support for HR 1038 (Public Power Risk
Management Act), Right to Hedge in End-User Bill of Rights, and exemption for swaps
between munis and coops.
• Cabinet Changes, including nomination of Sally Jewell for next Secretary of Interior and
Dr. Ernest Moniz to the Secretary of Energy post, Allison Macfarlane for full five-year
term as Chairman of National Regulatory Commission, and appointment of Mark Gabriel
as new Administrator of Western Area Power Administration.
• Other Federal Energy Regulatory Commission (FERC) developments.
Prepared by:
Liza Cawte, Senior Administrative Technician
Attachment: Morgan Meguire LLC April Report
071
Morgan. Meguire LLC
Memorandum
TO: Bill Carnahan, Executive Director
FROM: Lori J. Pickford, Executive Vice President
DATE: April 9, 2013
RE: April Monthly Legislative Report
I. Budget Update
This week,Congress returned after the two week Easter recess to address numerous issues
including gun control, immigration policy, executive branch nominations, and fiscal issues,
including the FY 2014 Budget. Though the delivery of the President's budget on April 10 will
keep the budget in the news, other issues appear to be dominating the news cycle, at least for the
short term.
On March 26,the President signed a six-month Continuing Resolution (CR) to keep the
government funded from April through the end of the fiscal year(Sept. 30), averting a
government shutdown. The bill maintains the $85 billion in FY13 sequestration cuts which went
into effect on March 1, based on the previously enacted Budget Control Act.
Appropriations activity will continue in earnest once the President's Budget is released, with
hearings by agency personnel on policy priorities. Simultaneously,the tax writing committees
continue to publicly state their intention to move tax reform, which could lead to a larger fiscal
dialogue in the fall. The White House is showing willingness to discuss entitlement changes,but
it is unclear if the House Republicans will engage, as the"price" for entitlement reform appears
to be increasing revenue through some type of tax changes.
II. Energy Policy
Senate Energy Panel to Hold Forums on Natural Gas Issues
Senate Energy and Natural Resources Committee Chair Ron Wyden(D-OR) and Ranking
Member Lisa Murkowski (R-AK) announced that they will hold three forums on natural gas
issues this May. The forums will be in a roundtable format,open to the public, and will include
input from Members and a variety of stakeholders.
"Natural gas has the potential to be a great American success story,"Wyden said. "Congress
needs to be sure U.S. policies are up to the task of maximizing the economic benefits of this
resource, and doing it in an environmentally responsible way."
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Sen. Murkowski underscored the role natural gas plays in achieving energy security and
economic growth and warned that"Heavy-handed government regulation could easily disrupt
the efficient workings of the market."
Witnesses will be announced later, but the schedule is as follows:
1. May 16: Infrastructure, Transportation, Research and Innovation: Applications for
natural gas and how this new demand will be met; pipeline infrastructure and increased
use of natural gas in the transportation sector.
2. May 21: Domestic Supply and Exports: Estimates of domestic supply and the potential
benefits or unintended consequences caused by expansion of natural gas exports.
3. May 23: Shale Development--- Best Practices and Environmental Concerns: Extraction of
gas from shale, including best industry practices and environmental concerns,
Ill. Municipal Finance
Bipartisan House Resolution Highlights the Importance of Municipal Bonds
On March 14, Reps. Lee Terry(R-NE) and Richard Neal(D-MA)introduced a House Resolution
(H. Res. 112)"celebrating the history of municipal bonds, the 100-year precedent of the federal
tax exemption for municipal bond interest, and the important contribution municipal bonds have
made to economic growth and well being in each State and municipality in our great Nation."
Reps. Terry and Neal are encouraging additional House co-sponsors to further solidify the
bipartisan support for tax-exempt municipal bonds.
SCPPA members are encouraged to follow up with their House members to solicit their co-
sponsorship on the Terry-Neal Resolution.
GOP Leader Cantor Supports Keeping Bonds Tax-Free
In a significant boost to proponents of municipal bonds,Bloomberg reported that House Majority
Leader Eric Cantor (R-VA)told the National Association of State Treasurers on March 20 that
curbing the tax exemption for municipal bonds may undermine the ability of state and local
governments to finance public works projects. Cantor said that he understands the need for the
Congress to keep the tax exclusion in place.
Referring to the ongoing state and local government lobbying effort,Cantor said"The message
was received, at least in my office, about the importance of that benefit to states. We can't be
pulling back on that right now given the current state of our existing infrastructure."
Senate Democrats Weigh in with the White House Against Muni Bond Restrictions
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On April 2, a group of 14 Senate Democrats wrote to President Obama expressing opposition to
proposals that alter the tax treatment of municipal bonds, calling them "inappropriate and
shortsighted,"and told the White House the proposals would"radically shift the burden of our
national fiscal challenges to states and cities."
Sen. Mark Begich(D-AK)circulated the letter after being visited by the U.S. Conference of
Mayors,who highlighted the proposal to cap municipal bond interest that has been advanced by
the Administration in recent deficit reduction talks and in its FY 13 Budget. A similar proposal
to cap municipal bond interest at 28%is expected to be included in the President's FY 14 budget
request, slated to be released on April 10.
The 14 Senators said, "At risk are important services provided by local governments, including
utilities like power and water and public safety like police and fire protection... as well as key
infrastructure projects such as road, airport, port, housing and hospital construction and
maintenance. While we recognize the challenges our nation faces as we work to bring order to
our fiscal house, we believe strongly that balancing the federal deficit by shifting the burden to
local governments would have, ironically, a substantial negative impact on our federal budget
outlook through decreased federal tax receipts as a result of diminished economic activity. We
respectfully encourage you to consider other options as you work with Congress to find the
savings that we all acknowledge we must find."
The letter was signed by Sens. Begich, Barbara Boxer(D-CA),Tammy Baldwin(D-WI), Maria
Cantwell (D-WA), William Cowen(D-MA), Al Franken(D-MN), Kirsten Gillibrand (D-NY),
Torn Harkin(D-IA), Heidi Heitkamp (D-ND), Tim Johnson(D-SD), Mary Landrieu(D-LA),
Bernie Sanders (D-VT),Torn Udall (D-NM)and Elizabeth Warren(D-MA). SCPPA
encouraged their Senators to sign onto the Begich letter.
Public Power Groups Provide Testimony to House Tax Panel
APPA, LPPC, and the Transmission Access Policy Study group submitted joint testimony for the
March 19 House Ways and Means Committee hearing on"Tax Reform and Tax Provisions
Affecting State and Local Governments" (See summary of hearing in SCPPA Monthly report
3/19/13). The joint public power testimony aimed to underscore for the committee members
that, as Congress debates tax reform, it should pay careful attention to state and local
governments' ability to finance critical infrastructure investments needed for economic growth.
The testimony pointed to municipal bonds as the largest source of financing for core
infrastructure in the U.S., and the single most important financing tool for public power, given
the capital-intensive and long-lived nature of assets needed by the electric industry. "Each year,
on average,public power utilities make $15 billion in new investments financed with municipal
bonds,"the groups said. "Over the last 10 years,power-related projects have totaled $147
billion, roughly 9%of all municipal issuances."
The groups outlined a number of financing alternatives to municipal bonds,like taxable bonds,
direct payment bonds,tax credit bonds, and private activity bonds. However, "each has its own
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inefficiencies and none, alone, would be a viable replacement for municipal bonds,"the groups
said.
As to who would pay the price if Congress were to upend the 100-year precedent of exclusion to
tax municipal bond interest with, for example, a surtax on municipal bond interest, "It will not be
borne by the investor, who will be compensated with higher rates for any taxes they pay, but
rather by state and local residents forced to pay billions more every year in additional financing
costs,"the testimony said.
Rather than eliminate the tax exclusion for municipal bond interest,the groups recommended
certain improvements to municipal bonds. For example, state and local governments may issue
qualified private activity bonds, the interest on which is exempt from federal gross income tax.
The groups also asked the committee to consider the impact of taxing capital contributions made
by public power utilities to investor-owned utilities for construction and suggested"re-
examining these restrictions could increase public-prig ate partnerships in critical infrastructure
investments."
The testimony endorsed the National Governors Association's all-of-the above approach to
municipal finance. "For example,"the letter said, "while direct payments bonds could not
replace municipal bonds, in the case of New Clean Renewable Energy Bonds(New CREBs) and
Build America Bonds, they have served as a helpful supplement to traditional municipal bond
financing."
IV. Dodd-Frank
Public Power Sub-Threshold Fix Advances
On March 20, the House Agriculture Committee reported the"Public Power Risk Management
Act"(H.R. 1038)without amendment by voice vote,clearing it for consideration by the House in
the next few weeks. Chairman Frank Lucas(R-OK) and lead bill sponsors spoke in strong
support of H.R. 1038, indicating that the legislation was important to their constituents.
H.R. 1038, introduced by Rep. Doug LaMalfa (R-CA), clarifies that operations-related swaps
with municipal utilities do not count towards the threshold that determines the volume of swaps
an entity can enter into without triggering Swap Dealer registration. Entities that must register as
Swap Dealers have a heavier regulatory burden than do end-users.
The lower$25 million sub-threshold has caused many energy companies to forego transactions
with municipal utilities for fear of being subject to complex and costly Swap Dealer regulations.
On March 14, the House Agriculture Committee held a hearing on the bill and other"technical
fixes"to the Dodd-Frank Act. Terrance Naulty of Owensboro Municipal Utilities(KY) testified
on behalf of APPA, describing the lack of available counterparties and the failure of the
Commodity Futures Trading Commission's (CFTC's)no-action letter to bring those
counterparties back to the table.
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The bill has 19 cosponsors, including Reps., Jeff Denham(R-CA)
John Garamendi (D-CA), , Michael Honda (D-CA),Jerry McNerney(D-CA) and Juan Vargas
(D-CA).
SCPPA Members should contact their House members to encourage their cosponsorship of H.R.
1038. Morgan Meguire is working with APPA and others to garner similar support for an
identical bill in the Senate.
CFTC Commissioner Includes Right to Hedge in "End-User Bill of Rights"
On April 3,CFTC Bart Chilton released a document entitled the"End-User Bill of Rights"to
highlight his positions on several end-user issues in conjunction with the April 10 compliance
deadline for end-user reporting under the Dodd-Frank Act. Chilton is one of five
Commissioners' on the CFTC.
Chilton's document includes a nod to ongoing efforts to provide relief from the$25 million sub-
threshold. Under right#8, the right to hedge, Chilton says,"Public power end-users using swaps
to hedge commercial risk should have the same access to risk management markets as privately
owned utilities."
Chilton's document also adds that he prefers relief be achieved through regulatory means.
During the APPA Rally, several public power end-users met with Chilton's staff and learned that
he would be amenable to additional relief or exemptions to sole the sub-threshold problem.
However, his staff noted, that Chairman Gensler sets the agenda. Chairman Gary Gensler has
been less sympathetic to public power's concerns.
CFTC Finalizes 2010 Exemption,for Swaps between Munis and Coops
On March 28, CFTC finalized a temporary order exempting transactions between and among
municipal and cooperative utilities from Dodd-Frank rules.
The Final Order largely grants the petition from APPA,NRECA and others to exempt certain
non-financial transactions that occur between entities described in Section 201(f) of the Federal
Power Act—namely, municipal and cooperative utilities. The CFTC identified six categories of
Exempt Non-Financial Energy Transactions that would qualify: electric energy delivered,
generation capacity, transmission services, fuel delivered, cross-commodity pricing, and other
goods and services.
The exemption was allowed under Section 6(c) in the Dodd-Frank Act, which gave the CFTC
authority to waive the rules in cases where it was deemed to be in the public interest. Swaps
between 201(f) entities were specifically named in the law as being candidates for such a public
interest exemption.
The exemption is a welcome move,but the 201(f) rule would not provide the same relief as H.R.
1038,the sub-threshold relief bill recently passed by the House Agriculture Committee. The two
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issues are separate and different; thus efforts to secure additional cosponsors and move a bill in
the Senate continue.
V. Nuclear Waste
Dueling Court Filings Over Yucca Mountain
In a March 27 filing with the D.C. Circuit Court of Appeals,the Nuclear Regulatory Commission
(NRC) argued that the recently-passed appropriations bill to fund the federal government through
the end of FY13 amounts to a "preservation of the status quo [that] means that DOE continues to
lack the funds necessary to support the application to construct the Yucca Mountain repository
and NRC continues to lack the funds necessary to complete the proceedings necessary to review
the application."
It also repeated its position that the holdover money it might be forced to spend would not be
enough to finish the licensing process.
"By its funding decisions, Congress has demonstrated its intent that the federal government
should not complete the Yucca Mountain project at this time. And any further expenditure of the
remaining, limited Waste Fund money on this project would still not yield a completed review
and adjudication of the Yucca Mountain application,"the filing said.
Later the same day, Yucca Mountain supporters— including from the State of Washington, State
of South Carolina, and NARUC said in a separate filing that Congress has still not changed the
law designating Yucca Mountain as the authorized waste repository and asked the panel to force
the NRC to restart its review of the project immediately.
It is unclear how the court will respond. Last year the panel indicated they may force the NRC to
spend its$10.4 million in remaining funds allocated for Yucca Mountain construction before it
can suspend its consideration of the project because of lack of funds.
VI. Cyber Security
Electric Sector Comments on House Cyber Bill;Mark up Soon
On April 9, the electric sector cyber coalition sent a letter of support to the House Permanent
Select Committee on Intelligence Chair Mike Rogers(R-MI) and Ranking Member Dutch
Ruppersberger(D-MD), authors of the"Cyber Intelligence Sharing and Protection Act"(H.R.
624). The bipartisan legislation, known as"CISPA,"is designed to allow private-sector
companies to voluntarily share information with the government and one another on a classified
basis. It would also provide liability protection to companies that share information and includes
provisions protecting civil liberties and privacy. The bill is scheduled to be marked up April 10.
The energy sector letter expresses support for the bill,while reminding the authors that the
electric sector is currently subject to mandatory cyber security standards. However, "the need
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for government and the private sector to freely share actionable information in a timely,
confidential manner remains,"the letter says.
The letter goes on to point out that the recent Executive order could not provide liability
protection, which is still needed to ensure private entities are not subject to citizen suits for
information sharing.
Several industry groups signed the letter,including APPA,LPPC,Edison Electric Institute,the
National Rural Electric Cooperative Association,the Transmission Access Policy Study group,
National Association of Regulatory Utility Commissioners,the Electric Power Supply
Association,Nuclear Energy Institute,GridWise Alliance,the Electricity Consumers Resource
Council,and the Canadian Electricity Association.
In a call with Press today, NEWSMAX reported,"The two lawmakers discussed several
amendments that will be offered on Wednesday in an attempt to build more support for the bill
and to calm concerns about the measure among privacy advocates. The amendments include a
measure to ensure that shared information is only used to fight cyber threats and not for
marketing purposes. Another amendment would also remove some national security language to
narrow the scope of shared information.
"This is not a surveillance bill,"Rogers stressed in his call to reporters. "It does not allow the
[National Security Agency] or any other government agency to plug into private networks.
Nothing in this bill does anything to sacrifice your privacy or civil liberties."
NIST Holds Cybersecurity Framework Workshop
As outlined in the White House Executive order 13636 on Cybersecurity,the National Institute
of Standards and Technology(NIST)held an April 3 workshop to focus on developing a cyber
security framework.
Under the Order,NIST was given the responsibility for developing a framework to reduce
cybersecurity risks for critical infrastructure. NIST is directed to engage in a collaborative
process to develop a set of voluntary standards, and is interested in collecting information about
current risk management practices; use of frameworks, standards,guidelines and best practices;
and specific industry practices.
Acting Secretary of Commerce Rebecca Blank opened the day-long discussion by encouraging
those assembled from the industry to contribute their views on these standards. "You are the
ones who can help empower owners and operators of critical infrastructure make the best
possible decisions with respect to cyber security," she said to the industry participants,noting
that the first draft of the framework NIST was tasked with creating under the President's
Executive order is due in just 8 months.
Speakers included White House Cyber Coordinator Michael Daniel,NIST Director Patrick
Gallagher, and Homeland Security Deputy Secretary Jane Holl Lute,as well as panelists
representing a cross-section of critical industries, including NERC's Chief Cyber Officer Tim
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Roxey,representing the ES-ISAC, and Scott Saunders of the Sacramento Municipal Utility
District.
NIST has posted the video of the Cybersecurity Framework Roundtable online here. The next
workshop will be at Carnegie Mellon University in Pittsburgh from May 29-31, and additional
sessions are tentatively scheduled for the weeks of July 15 and Sept. 9.
V. Cabinet Changes
Senate Energy Panel Advances Jewell for Secretary of Interior
On March 21, the Senate ENR Committee advanced the nomination of Sally Jewell, the former
CEO of REI,to become the next Secretary of the Interior,by a vote of 19-3. The nomination
now moves on to the full Senate for final approval.
The business meeting was well attended by members of both parties. Chairman Wyden praised
for the nominee, saying her history at REI makes her particularly suited to maximize recreation,
revenue, and jobs on public lands. Ranking Member Murkowski was more measured and
brought up her concerns that "nearly all of us—especially in Western states...are all aware of
instances where misguided federal restrictions are making it harder for local people to live, be
safe, and to prosper."
Chairman Ron Wyden told POLITICO today(4/9)that he's"very encouraged" about a potential
time agreement for debating her nomination on the Senate floor.
Murkowski likewise said Republican and Democratic senators are working on an agreement to
hold the floor vote perhaps as early as this week, though she added that"some people are still
waiting for answers on things."
Moniz Sails Through DOE Nomination hearing; Vote Expected Soon
On Tuesday April 9, the Senate Energy and Natural.Resources(ENR) Committee held a hearing
to consider the nomination of Dr. Ernest Moniz, a Clinton Department of Energy(DOE)
Undersecretary and nuclear physicist,to the Secretary of Energy post. Moniz was introduced by
former ENR Chair Sen. Bingaman(D-NM) and retired general Brent Scowcroft, who was
national security adviser to Presidents Ford and George I-I.W. Bush. Bingaman praised Moniz's
outstanding attributes, including his scientific knowledge, managerial ability and his expertise on
DOE as well as his interaction with Congress on energy policy, while Scowcroft praised his
work as a member of the bipartisan Blue Ribbon Commission on nuclear waste(BRC), and the
report he worked on that was submitted to the Energy Secretary in January 2012.
Moniz withstood three hours of intense questioning, covering a wide range of topics including
the Administration's commitment to a "low carbon economy,"natural gas pricing and exports,
federal policy regarding spent nuclear waste, renewable energy integration,energy storage
policy, the DOE loan guarantee program,power marketing administrations(PMA), and cyber
security.
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The hearing was well attended with Senators from both parties engaging in the dialog. They
included Chairman Ron Wyden(D-OR),Ranking Member Lisa Murkowski (R-AK), and Sens.
Debbie Stabenow (D-MI),Al Franken(D-MN), Mike Lee(R-UT), Jeff Flake(R-AZ),Martin
Heinrich(D-NM),Tim Scott(R-SC), Dean Heller(R-NV),John Barrasso(R-WY), Brian Schatz
(D-HI),Joe Manchin(D-WV), Lamar Alexander(R-TN), Mark Udall (D-CO),Chris Coons (D-
DE), Maria Cantwell (D-WA),Rob Portman(R-OH), John Hoeven (R-ND).
Below is a short highlight on key issues of interest.
a. Power Marketing Administrations
Regarding PMAs specifically, Sen. Lee mentioned some concerns raised by municipal and
cooperative customers about the impact certain policies in the Chu memo would ha\e on
increasing customer's costs. Asked whether he recognized the core mission of the PMAs, Moniz
said he fully understood that the PMAs' mission is to provide low cost power to their customers.
He also said the PMAs' cost structure is the I"priority. However,he said he was also
committed to sound management and the need for reliability and modernization as well.
With regard to the Chu Memo, Moniz said that he understood the recommendations were
submitted to WAPA and they were carefully reviewing them. We need to be sensitive to the
PMA cost structure and it's important for the PMAs to work with the customers, Moniz said.
Sen. Lee then pushed him and said, "Well, if WAPA advanced a proposal that increased costs to
the customers would you support that?" Moniz replied that"It's more important to know if the
customers would support them, and if they did not,therefore,we would not."
b. Hydropower& Energy Storage
In Chairman Wyden's opening statement he characterized hydropower as the"forgotten
renewable,"while Ranking member Murkowski asked Moniz whether he considered
hydropower to be a renewable resource. Moniz responded that "yes"he did to general laughter in
the room and an enthusiastic"Good answer!" from Wyden.
Wyden expressed disappointment with DOE and the fact that they have not—after 3 1/2 years --
put forth a serious plan on energy storage. Wyden believes that making progress on storage
could be a spark in driving cost down for renewables. He asked Moniz, who was resistant, if he
would commit within 30 days to get the Committee a plan on energy storage. While Moniz said
he shared his view that large scale storage is a key enabler and we should push it, he did not want
to commit to a set time frame. Instead he said he would prefer to"convene appropriate
individuals from universities, laboratories, and industry and that may take a few months." In
closing,Wyden asked him to get back to him in 30 days,on when he anticipates having a plan.
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c. Cybersecurity
Sen. Flake mentioned the President's recently-issued Executive Order on cybersecurity, and
highlighted the fact that FERC and others have mandatory and enforceable standards. Sen. Flake
inguired,"What do you see the role of DOE in this regard to ensure the grid is protected?"
"I think cybersecurity really is one of the greatest threats that we face in multiple contexts,"
Moniz replied. "First of all, we need to bring together the assets across the department- we have
a lot of assets, also in our national security labs. On the grid, we also need to work on the
technologies, the sensors, controls, integrations systems, so that the electric grid is both resilient
and robust."
Sen. Schatz asked what DOE is doing to protect the grid against cyber challenges, and Moniz
mentioned their internal agency analysis back in 1998 and 1999, where they realized DOE had
no office on the electric grid and reliability. He noted the creation of the DOE Energy Office of
Electricity Delivery& Energy Reliability, and the work they have done with stimulus money to
help with smart grid implementation. He said what is needed now is a system evaluation so we
can ensure more resilience and a more robust electric system.
d. Nuclear Waste Policy
Sen. Barrasso asked Moniz if the Energy Daily article from last week, which reported that
Senator Reid may be trying to place former Nuclear Regulatory Commission(NRC) Chairman
Jaczko as an advisor at DOE was true. Moniz said he had no knowledge on this subject.
In Chairman Wyden' opening statement,he expressed support for a"low carbon economy,"
including nuclear energy, which he said brings up the question of how to deal with nuclear
waste. He mentioned his efforts with Sens. Murkowski, Alexander and Dianne Feinstein(D-CA)
on a bill to find a "long-term answer to a decades old problem." He then said he hoped Moniz
would build on his work on the BRC report and also take responsibility for contaminated waste
sites.
Sen. Heller expressed concern about Yucca Mountain being"shoved down Nevada's throat" and
said he discourages this type of policymaking. He acknowledged the need to address the
problem of spent fuel, and encouraged it"be resolved through careful considerations rather than
by politicians in Washington, DC". Heller asked whether Moniz believes "we should look past
Yucca to consent-based sites for long-term storage of nuclear fuel,to which Moniz said"There is
no question that I will enter the role of Secretary, if confirmed, with the idea of advancing the
[BRCJ agenda, first and foremost, consent-based siting is a part of that."
Sen. Heinrich also inquired about spent nuclear fuel and plans for short term consolidated
storage and for the development of a permanent repository. "What are your thoughts on
maintaining a linkage between interim storage and final disposal facilities?"He asked. Moniz
said he supported it fully. "Storage is not disposal, it is storage on the way to disposal and the
linkage is important,"he said.
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In addition, Sen. Udall expressed support for Small Modular Reactors (SMR), which Moniz
agreed was a promising direction worth pursuing. "It's where the most innovation is going on in
nuclear energy," Moniz said.
At the close of the hearing Wyden said that senators on both sides of the aisle support Moniz and
he hopes to hold a committee vote soon,but did not offer a specific timeframe. "Given the
breadth of support, I hope it can be soon," Wyden said.
Obama Nominates Macfarlane to Full 'Perm
On March 21, President Obama nominated Allison Macfarlane to a full five-year term as
Chairman of the NRC. She has been serving as interim chairman since June 2012, following the
resignation of Gregory Jaczko over his mismanagement of the agency, and her current term
expires June 30, 2013.
Although some Republican Senators may want to question her over new nuclear safety
regulations, it is unlikely that she will face much opposition as she has been commended for
mending fences after Jaczko's tenure.
New WAPA Administrator Selected
On April 3,the DOE announced it has chosen Mark A. Gabriel to be the new Administrator of
the Western Area Power Administration(WAPA).
Gabriel has more than two decades of leadership experience in the electric sector and is currently
the CEO and President of Power Pundits, LLC in Colorado, a management consulting firm
specializing in the energy industry.
Previously, Gabriel was the senior vice president for Black and Veatch Management Consulting,
involved in the areas of electricity, water,oil and gas, and cyber security. He also served as
senior vice president for energy with R.W.Beck, a national engineering-based consulting firm.
He was CEO of Positive Energy Directions, and he was the Electric Power Research Institute's
(EPRI) Acting President and Client Relations and Global Marketing Officer, among other
industry positions.
While at EPRI,Gabriel led a nationwide collaborative effort which became known as the
Electricity Sector Framework for the Future.
VII. FERC Developments
FERC: WestConnect Members Partially Compliant with Order 1000
On March 21, all five members of the Federal Energy Regulatory Commission(FERC) found
that an Oct. 11, 2012 joint filing by ten WestConnect investor-owned utilities and non-
jurisdictional electric coops partially complied with the requirements of Order 1000.
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Of particular concern to public power entities, FERC found that to fully comply with Order
1000, WestConnect's proposed cost allocation determinations for transmission projects selected
in the regional plan must be binding upon all identified beneficiaries— not just jurisdictional
utilities -that participate in the regional planning process. FERC directed the parties to file
further compliance filings to address this and other issues identified.
This decision presents a difficult choice for non jurisdictional entities, such as public power and
cooperatives,who must decide whether to participate in the regional planning process or not,
knowing that if they choose to participate they could be subject to cost allocations with which
they do not agree.
This order creates a conflict between FERC and Senate ENR Chairman Wyden,who sent a
March 5 letter urging Commission Chairman Jon Wellinghoff to support regional flexibility
when implementing the Order. The letter is a caution to FERC not to go too far in trying to
mandate a cost allocation methodology for the Bonneville Power Administration and other non-
jurisdictional utilities in the Northwest.
VIII. Other Issues of Interest to SCPPA
PTC Value to Increase
On April 3,the IRS issued a Federal Register Notice announcing CY 2013 inflation adjustment
factors for calculating the Production Tax Credit(PTC)for eligible renewables. The value of the
PTC will increase for wind,closed-loop biomass, geothermal, and solar energy to 2.3 cents per
kilowatt-hour, up from 2.2 cents last year.
However, the FTC value will remain at 1.1 cents per kilowatt-hour for open-loop biomass
facilities, small irrigation power facilities, landfill gas facilities,trash combustion facilities,
qualified hydropower facilities, and marine and hydrokinetic renewable energy facilities. These
renewable resources receive half the PTC value for wind and other resources noted above.
The IRS periodically adjusts the value of tax credits to account for inflation.
Industry is anxiously awaiting more detailed guidance from the IRS and the Treasury
Department on how the government will interpret the new"start construction"language for a
project to be eligible for those credits. Before the change adopted at the beginning of this year,
projects had to be placed-in-service to be eligible.
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