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Home My WebLink AboutAgenda Packet - January 25, 2010 * AZUSA AGENDA REGULAR MEETING OF AZUSA UTILITY BOARD AZUSA LIGHT & WATER JANUARY 25, 2010 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 KEITH HANKS 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.) 1 001 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. 1. Minutes. Recommendation: Approve minutes of regular meeting on November 23, 2009 as written. Nov-09 UB Min.pdf 2. Research Participation and Confidentiality Agreement with Lindsey Manufacturing. Recommendation: Authorize staff to enter into Research Participation and Confidentiality Agreement with Lindsey Manufacturing; and authorize the Director of Utilities to sign said agreement, subject to final review and approval by City Attorney. Lindsey-Rpt.pdf Lindsey-AgnTt.pdf 3. Proposal for Electric Fund Financial Review. Recommendation: (1) Approve proposal by Utility Financial Services (UFS) to conduct financial review of electric fund; and (2) authorize City Manager to execute professional services agreement for not-to-exceed amount of$17,500 for phase one services. Elec Fin Rev Rpt.pdf UFS Proposal.pdf 4. Underground Electric Substructures Installation Project. Recommendation: Approve plans and specifications for Project LD2010-2 to furnish and install underground electric substructures on Lark Ellen south of Gladstone and authorize City Clerk to advertise for bids. UG Elec Project.pdf 2 002 5. Request for Proposals (RFP) for Electric Network Supervisory Control and Data Acquisition System (SCADA). Recommendation: Approve scope of work for an Electric SCADA System; and authorize staff to prepare, issue, and solicit RFP. 11;24,1- SCADA-RFP.pdf 6. One-Time Payment for Substation Metering Facilities Charges to Southern California Edison (SCE). Recommendation: (1) Approve a one-time payment in amount of $172,844.72 to SCE for the certified metering and communication facilities installed at the Azusa and Kirkwall Substations; and (2) adopt the following resolution: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA, CALIFORNIA, AMENDING THE FISCAL YEAR 2009-2010 OPERATING BUDGET FOR THE ELECTRIC UTILITY TO FUND A PAYMENT TO SOUTHERN CALIFORNIA EDISON FOR METERING SERVICES PROVIDED AT ELECTRIC SUBSTATIONS. SCE Pynt Rpt.pdf Budget Amendrrt Reso-.pdf 7. Extension of Civiltec Engineers' Contract. Recommendation: Approve extension of contract for Civiltec Engineers for South Reservoir Demolition and Design Services to March 31, 2010. y.W. 'YM1 Civiltec Contract CIVILTEC Req Ext.pdf Ltr.pdf E. SCHEDULED ITEMS 1. Request for Funding for Litter Clean-up and Smart Gardening Workshop. Recommendation: Approve a funding request from California Resources Connections, Incorporated (CRC) to conduct said environmental programs; and authorize payments to CRC in amount of $7,400 from Water Fund and $7,425 from AB 939 Fee Funds. CRC CRC Proposal.pdf Proposal-Rpt.pdf 3 003 2. Taxpayer's Right to Vote Act Legislative Position. Recommendation: Consider adopting an OPPOSE position on the "New Two-Thirds Requirement for Local Public Electricity Providers Act" scheduled for vote on the June 8, 2010 state-wide ballot. 91- 91- Taxpayers Right to Sac Bee Editorial SF Chronicle Article California Energy Initiative Text.pdf Vote Act.pdf 1-19-10.pdf 1-14-10.pdf Markets Article 1-15-: 3. EPA Endangerment Finding Related to Greenhouse Gases. Recommendation: Consider adopting an OPPOSE position on EPA Administrator's Finding that, pursuant to Clean Air Act section 202(a), six greenhouse gases endanger the public health and welfare. Rpt EPA EPA Endangerment EPA_FAQs.pdf APPA Comments EPA Fact Sheet.pdf APPA Comments Endangerment Findin' Finding.pdf Endangerment Findirr Proposed Rule.pdf F. STAFF REPORTS/COMMUNICATIONS 1. Monrovia Nursery Water Rights Update Update on Monrovia Monrovia Water Water Rights.pdf Rights Ltr.pdf 2. Customer Service Annual Statistics Update Cust Svc Rpt.pdf 3. Water Supply and Drought Update (Verbal) 4. Lodi Energy Center Update 119: 1011- Lodi Energy Center Lodi Energy Center Update.pdf Overview for Rating 5. Environmental Protection Agency (EPA) Declaration that Carbon Dioxide is Toxic and a Hazardous Waste (Verbal) 4 004 • 6. American Public Power Association(APPA)Annual Conference June 19-23,2010 Orlando,FL 19- APPA Annual 2010 APPA Annual Conference.pdf Conference Inforrretr G. ADJOURNMENT 1. 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." 5 005 at)-__ imp 3y,..z.r.[ ..a ',;a,. , `.__. g .',,•:: _. fd ; -:.'�'�ga. : '� �'qr'-:E�"..y'�ix.yc f4's'x .y a. �w:•-:�;' �- a6 F 'Y • x;a ; ys - , fac A7US. LIGHT & ATUA. CITY OF AZUSA MINUTES OF THE REGULAR MEETING OF THE AZUSA UTILITY BOARD MONDAY, NOVEMBER 23, 2009 — 6:30 P.M. The Utility Board 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 Macias called the meeting to order. Call to Order ROLL CALL Roll Call PRESENT: BOARD MEMBERS: GONZALES, CARRILLO, MACIAS, HANKS, ROCHA ABSENT: BOARD MEMBERS: NONE ALSO PRESENT: Also Present City Attorney Ferre, Assistant City Manager Makshanoff, Director of Utilities Morrow, Assistant to Utilities Director Kalscheuer, Economic and Community Development Director Christiansen, Director of Public Works/Assistant City Manager Haes, Administrative Services Director-Chief Financial Officer Kreimeier, Assistant Director of Water Operations Anderson, Business Development/Public Benefits Coordinator Reid, Police Lieutenant S. Hunt, City Clerk Mendoza, Deputy City Clerk Toscano. PUBLIC PARTICIPATION Pub Part Mr. Mike Lee expressed his sympathy regarding the passing of Vicky Philipson, a local resident who passed M. Lee away over the week end; she was 92 years old and an employee of Stater Bros in Azusa for the past 52 years. Comments He noted that another friend of his had passed away, Shirley Fisher. He stated that there are dimly lighted areas in the City, asked that the contract with IBEW be worked out and wished all a Happy Thanksgiving. UTILITIES DIRECTOR COMMENTS Dir Comments Director of Utilities Morrow announced and invited Board Members to attend the SCPPA Legislative Briefing Anncd SCPPA to be held on December 17th at the Hilton, stating that they could confirm with Liza Cawte of Light and Water, Meeting if they wish to attend. UTILITY BOARD MEMBER COMMENTS Brd Mbr Cmts Board Members wished all a Happy thanksgiving. Happy Thanksgiving 006 The CONSENT CALENDAR consisting of Items D-1 and D-2,was approved by motion of Board Member Consent Cal Carrillo, seconded by Board Member Hanks and unanimously carried. D-1 &2 1. The minutes of the regular meeting of October 26, 2009, were approved as written. Min appvd 2. Approval was given for a blanket purchase order to be issued to Superior Operating Solutions(SOS)for Blanket P.O. ongoing computer service for SCADA systems in amount of$32,000 and cancel current blanket purchase SOS order of Integrity Engineering, Incorporated. Special Call SPECIAL CALL ITEMS None None. SCHEDULED ITEMS Sched Items PROPOSED REGULATION OF COAL FLY ASH AS HAZARDOUS WASTE. Regs Fly Ash Director of Utilities Morrow presented the item stating that he wanted to make the Board aware that EPA is Dir of Util considering classifying coal fly ash as hazardous waste as a result of a failure of a coal pond retention wall last Comments year at a Tennessee Valley Authority power plant which dumped over 5 million yards of coal waste into surrounding areas. Now the EPA wishes to classify coal fly ash as a hazardous waste. He described the current uses and classification for coal ash and noted that other entities are against the classification as hazardous waste. Board Member Hanks agrees to the oppose position,noting that coal ash is not hazardous waste, and already Hanks offsetting cement and is useful. Discussion was held. Comments Moved by Board Member Carrillo, seconded by Board Member Hanks and unanimously carried to adopt an Adopt Oppose "Oppose" position to U.S. Environmental Protection Agency's effort to classify coal fly ash as "hazardous Coal Fly Ash waste" as part of its rulemaking and authorize staff to advocate such position. As HW PURCHASE AND DISTRIBUTION OF REFRIGERATOR MAGNETS FOR WATER DROUGHT Magnets Water REQUIREMENTS. Drought Director of Utilities Morrow presented the cost of$21,000 to purchase magnets and discussion was held Dir of Util regarding the possible distribution of refrigerator magnets to inform residents about day of the week customers And may water their yards given drought phase that is in effect. It was also discussed that staff could look into Discussion sources of funding such as grants, etc. Moved by Board Member Carrillo, seconded by Board Member Gonzales and unanimously carried not to Not to proceed proceed with the purchase at this time. At this time THE HOOVER POWER ALLOCATION ACT. Hoover Pwr Allocation Act Director of Utilities Morrow addressed the item stating that the allocation of power from the Hoover resource Dir of Util is made through federal Statute which is set to expire in 2017, various interested parties are proposing to Presentation advance a bill though congress to extend three decades, all existing participants will give up 5% of their scheduled power to a pool that would be distributed under a new schedule. He requested support from the Board Members in favor of the Hoover Power Allocation Act in the form of a letter signed by Mayor to senators to initiate the dialog. Moved by Board Member Hanks,seconded by Board Member Gonzales and unanimously carried to approve a Support "Support"position on The Hoover Power Allocation Act and authorize the Mayor and staff to advocate for Approved passage of the bill by the U.S. Congress. 11/23/09 PAGE TWO 007 07 STAFF REPORTS/COMMUNICATIONS Staff Rpts Assistant Director of Water Operation Anderson presented the Basin Water Supply Update stating that water Basin Water level has been dropping in the basin and it is two feet lower than it was at this time last year but that there is a Supply Update little water coming down the canyon and water will be coming from the Dam. The Wastermaster is negotiating with MWD to get full service untreated water which is not replenishment water to put into the main basin. He responded to questions posed and talked about going into phase III of the Drought and worse case scenarios. Director of Utilities Morrow presented the informational item 2009 Water Rate Adjustment and Consumption Water Rate Update,stating that everything that was projected is correct. Water rates were increased by 18%effective July Adjustment 1,2009 and the report shown is that water consumption for the first four month of FY 2009-2010 continued to Review lag behind by 19%. Assistant to Utilities Director Kalscheuer provided the Comprehensive State Water Legislation Update and State Wtr provided that five senate bills introduced and detailed them as follows: SB X7-1,Delta Protection,SB X7-2, Legislation Water Bond, SB X76,Groundwater Monitoring,SB X7-7,Water conservation,and SB X7-8,Water Diversion and Use Reporting. City Attorney Ferre responded to question regarding Delta protection. Director of Utilities Morrow presented an informational item on Assembly Bill 920 — requirement to buy Assembly Bill excess local solar/wind energy stating that the city will have to buy excess solar or wind energy from retail 920 excess customers within service area,and that there are three residential and one commercial customer which may be local eligible. The bill requires The Azusa Utility Board to adopt a surplus energy compensation valuation to solar/wind compensate a customer who might have excess solar/wind energy for the prior year, by January 1, 2011. Director of Utilities Morrow addressed the information item regarding Daylight Savings Time Change stating Daylight that the literature presented contains mixed conclusions with minor amounts of energy savings with cooler Savings Time areas saving more than warmer areas because of the use of air conditioning in the evenings. He stated that any state may be exempt from DST by passing a state law. Director of Utilities Morrow presented the informational item regarding types of customer payment Payment confirmations, i.e. online, pay-by-hone and electronic/recurring payment options. Board Member Rocha options thanked staff for not including the envelopes in payments that would be made automatic/electronically. Discussion was held regarding December Utility Board Meeting Schedule and it was consensus of Board Dis re: Members that the meeting of 12/29 be cancelled and that any items that should arise that need Council action Schedule of be taken to the City Council Meeting of December 21, 2009. Board Member Hanks requested that Board December mtg Members be kept informed of the water situation. It was consensus of the Board Members to recess at 7:35 p.m.,the meeting in order to conduct Closed Session Recess in conjunction with the City Council Special Meeting Closed Session. Reconvened CLOSED SESSION Closed Sess The Board Members reconvened jointly with the City Council at 7:56 p.m. to recess to Closed Session to Recess discuss the following: CONFERENCE WITH REAL PROPERTY NEGOTIATORS (Gov. Code Sec. 54956.8) Water Rights In Main SGB Property: Water Rights in the Main San Gabriel Basin, Agency negotiator: George F. Morrow Negotiating party: Monrovia Nursery Under negotiation: Price and terms of payment 11/23/09 PAGE THREE 008 CONFERENCE WITH LABOR NEGOTIATOR(Gov. Code Sec. 54957.6) Conf w/Labor Negotiator Agency Negotiators: City Manager Delach and Administrative Services Director-CFO Kreimeier IBEW Organization: IBEW The Board Members and the City Council Members reconvened at 8:25 p.m. There was no reportable action Reconvened taken. No Reports Adjourn It was consensus of Board Members to adjourn. TIME OF ADJOURNMENT: 8:26 P.M. SECRETARY 11/23/09 PAGE FOUR 009 i j 3z. AZ USA r.uT I J7 L(ri CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES DATE: JANUARY 25, 2010 SUBJECT: AUTHORIZATION TO ENTER INTO A RESEARCH PARTICIPATION & CONFIDENTIALITY AGREEMENT WITH AN ELECTRIC CUSTOMER — LINDSEY MANUFACTURING. RECOMMENDATION It is recommended that the Utility Board authorize staff to enter into a Research Participation & Confidentiality Agreement with an electric customer — Lindsey Manufacturing, and also authorize the Director of Utilities to sign the said Agreement, subject to final review and approval by City Attorney. BACKGROUND Lindsey Manufacturing is a long time business entity located at 760 N. Georgia Ave., in the City of Azusa. Lindsey is widely known in the electric industry as a leading manufacturer of electric insulators for transmission lines, including innovative power line products that help improve the monitoring of power transmission and distribution lines. The business owner, Dr. Keith E. Lindsey has been a good electric customer of Azusa Light & Water for many years. Lindsey Manufacturing is preparing to do research on and testing of one of their new products currently being developed for power lines, and have approached Azusa Light & Water (AL&W) for assistance. They are requesting a non-exclusive opportunity to attach experimental monitoring devices on the Azusa-owned portion of the power lines which currently serve electricity to their business premises. This would allow Lindsey to verify and test if their new innovative product would perform in actual conditions as designed, before marketing the new device. 010 Confidential Information shall not be disclosed to any employee or consultant unless they agree to execute and be bound by the terms of this Agreement. If the Recipient is requested or required by subpoena or other court order, or a Public Records Act Request, to disclose any Confidential Information, the Recipient shall provide immediate notice of such request to Discloser and shall use reasonable efforts to resist disclosure, until an appropriate protective order may be sought, or a waiver of compliance with the provisions of this Agreement is granted. Term. The length of this Agreement is one year from date of this Agreement and may be renewed if the Lindsey and Azusa mutually agree in writing. Termination. This Agreement shall be subject to termination by either party at any time upon written notice to the other party. Restoration. Upon the termination or expiration of this agreement, Lindsey shall, at its own cost and expense, restore the portion of the Azusa Power System that is subject to this Agreement, to the same condition in which it was in prior to Lindsey's entry. If Lindsey fails to restore the subject portion of the Azusa Power System to its prior condition within ten (10) business days after the effective date of the termination/expiration, Azusa may proceed with such work at the expense of Lindsey. Indemnification. Azusa and Lindsey shall indemnify and hold each other harmless and against all liability, loss, expense, or claims for injury arising out of the performance of this Agreement but only in proportion to and to the extent such liability loss expense or claims for injury are caused by or result from the negligent or intentional acts or omissions of either Lindsey or Azusa their officers, agents, or employees. Date: Signature: Signature: Print Name: Print Name: Lindsey Manufacturing Co. Azusa Light & Water Page 2 013 4k IP 3 AZ USA am .a Wprr'y CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE USA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES DATE: JANUARY 25, 2010 SUBJECT: PROPOSAL FOR ELECTRIC FUND FINANCIAL REVIEW RECOMMENDATION It is recommended that the Utility Board: (1) approve proposal by Utility Financial Services (UFS) to conduct financial review of electric fund; and (2) authorize City Manager to execute professional services agreement for not-to-exceed amount of$17,500 for phase one services. BACKGROUND On October 26, 2009, the Utility Board approved a 9.3% increase in electric rates effective December 1, 2009, and authorized staff to solicit proposals to conduct a more detailed financial review of the electric fund to determine if an additional rate adjustment is warranted for the purpose of maintaining an adequate reserve, compliance with bond financing agreements, and to generally meet the revenue requirements of the electric utility over a reasonable planning horizon. A Request for Proposals (RFP) was issued on October 29, 2009, to solicit proposals from consultants to conduct the financial review of the Electric Fund based on the scope of work approved by the Utility Board. Proposed services generally included a review of the electric utility's revenue requirements over a 5 year period as well as an analysis of how costs should be allocated to customers through any subsequent rate modifications, referred to generally as "cost of service". Four proposals were received in response to the RFP by the deadline of December 7, 2009, from the following firms: Burns & McDonnell, Navigant, Utility Financial Services (UFS), and ZE Power Group. All proposals were reviewed and compared using criteria included in the RFP. Each firm was considered to have the "demonstrated competence" and "professional qualifications" to conduct the financial review and cost of service study, however, Burns & McDonnell, Navigant and UFS, appeared to be better suited for the scope of work under consideration. 014 Electric Fund Financial Review January 25,2010 Page 2 In reviewing the "reasonableness of cost," Navigant's proposed not-to-exceed cost of$283.02/hr appeared significantly higher than Burns & McDonnell at $168.60/hr and USF at $161.99/hr. (For reference, ZE Power Group was $183.09/hr.) Following the initial review of all proposals and the work plans submitted, staff concluded that it would be in the best interest of the City to split the scope of work into two phases. Consequently, staff requested Burns & McDonnell and UFS to bifurcate their respective proposals as follows: • Phase 1 - To include a 5-year forecast of revenues and expenses to determine if rates are adequate to meet revenue and policy requirements, including debt-coverage and reserve policies. This phase will include a review of rate options to account for fluctuations in wholesale revenues and purchased power costs. • Phase 2 — Conduct cost of service study to meet future revenue requirements through rates that allocate costs equitably. This would include rate schedule or tariff design and modeling to assure that changes made would yield expected revenue. This phase is contingent upon findings of Phase 1. The not-to-exceed pricing submitted by the top two rated consultants is shown below: Consultant Phase 1 —Financial Review Phase 2—Cost of Service Total UFS $17,500 $22,800 $40,300 Burns&McDonnell $32,200 $26,500 $58,700 In reviewing the bifurcated work plans, professional qualifications, and reasonableness of price, staff believes that UFS's proposal is the most efficient and most suitable for the City to approve. If the results of Phase 1 indicate that a rate adjusted is necessary, staff will come back to the Utility Board for approval of a subsequent engagement with the consultant if that is deemed necessary. FISCAL IMPACT Phase 1 consulting services are not-to-exceed $17,500. Once this item is approved it will be funded with a budget amendment to account 31-40-702-921-6399 with funding from the Electric Fund. Prepared by: Cary Kalscheuer, Assistant to the Director of Utilities 015 Utility Financial Solutions,LLC January 6, 2010 Mr. Cary Kalscheuer Assistant to the Director of Utilities 729 N. Azusa Avenue Azusa, CA 91702 Dear Mr. Kalscheuer: We are pleased to learn that we are being considered for the Azusa Light & Water Electric Cost- of-Service study. Per your request we revised our scope of services into two phases and this letter would replace the original scope, project timing and pricing submitted in our original proposal. Each phase is detailed in this letter and includes a project schedule and a Not-to- Exceed-Cost. Our Phase One "Total-Not-to-Exceed" amount of $17,500 includes all out of pocket expenses for one on site meeting and the Fuel Cost Adjustment Model. The Phase Two "Total-Not-to- Exceed" amount of $22,800 includes all out of pocket expenses for one on site meeting to present results to the AL&W Management. We are open to discuss if an on-site final presentation would be required for Phase One or if a conference call would be appropriate with Management. Please reference the Project Pricing at the end of this letter for additional detail of expenses. We appreciate the opportunity to submit this addendum and look forward to discussing it with you. If you have questions or need additional information, please contact me at 616-393-9722. Sincerely, Utility Financial Solutions, LLC Mark Beauchamp CPA, MBA, CMA 185 Sun Meadow Ct Holland, MI 49424 (616)393-9722 mbeauchamp@ufsweb.com 016 Mr.Cary Kalscheuer Page Two PHASE ONE-FINANCIAL PROJECTION AND DEVELOPMENT OF LONG TERM RATE TRACK Development of Long-Term Financial Model and Rate Track Development of a long-term financial plan is critical to help ensure the utility remains financially stable. The financial plan includes development of a five-year projection to assist the utility with the following: • Identify long-term rate track and a plan,if necessary,to phase in rate adjustments • Project cash balances of utility over the planning period • Identify appropriate cash reserve requirements of the utility • Identify the utility's ability to meet bond covenants specified in the ordinances • Projected revenues and expenses over the five-year planning period • Project purchase power costs and perform,if requested,sensitivity analysis on changes in power costs UFS will work with staff in development of the long-term financial plan. To ensure the integrity of the model,we typically perform the following tasks: • Develop a forecasting model for system growth and sales • Adjust the model for known changes in sales,such as the addition of a large manufacturing company or recently closed facilities • Adjust operating costs based on historical expenses adjusted for inflation or changes in operations Cash Reserves A critical question for utilities is the amount of funds necessary to hold in reserve for emergencies and future capital improvements. We will identify an appropriate funding for repair and replacement and the amount of cash to hold in reserve to meet the current and future needs of the utilities to maintain the financial health of the Electric utility. The identification of minimum reserves requires a review of the following: • Historical investment in assets • Future capital improvement plan Fuel Cost Adjustment Fuel cost adjustments need to be developed considering the financial stability of the utility and the month to month impacts on customer classes that often leads to customer complaints. UFS has developed a number of alternative methods for fuel cost recovery that helps ensure the utility recovers its costs in a timely fashion but limits the month to month fluctuations in costs. We will assess the current power supply cost calculation, discuss alternatives and develop the most appropriate method. 017 Mr. Cary Kalscheuer Page Three Executive Summary Report An overview that identifies the objectives, processes and results of the financial plan and fuel cost adjustment in a clear and concise format, the report includes graphs, charts, tables and recommendations. Meetings and Presentations We anticipate one on-site meeting to complete the study. The following meetings are anticipated: • Initial meeting - Clarify scope of services, management expectations and preliminary fieldwork (Conference call) • Fieldwork— Fieldwork will be scheduled and take approximately one day (On-Site) • Review draft report with management (Conference call) Phase One Project Schedule Our experience with municipal electric cost of service studies, allows us to conduct a cost effective and efficient study. The following is the tentative project schedule for completion of the electric cost of service study. This schedule will be finalized during the initial project kick-off meeting with management. PHASE ONE-FINANCIAL PROJECTION AND LONG TERM RATE TRACK Initial Meeting—Preparation of Information Request Week One Completion of Information Request by Client Week Two Planning/Set-up Model Week Three Review and Development of Revenue Requirements Week Four Fieldwork Week Five Fuel Cost Adjustment Calculation Week Six Report, Recommendations& Presentation of Draft Week Seven Final Report Week Eight PROJECT COMPLETION ON THE PROPOSED SCHEDULE IS DEPENDENT ON COOPERATION OF VARIOUS DEPARTMENTS WITHIN AL&W TO COMPLETE THE INFORMATION REQUEST IN A TIMELY MANNER 018 Mr. Cary Kalscheuer Page Four PHASE Two-COST OF SERVICE, RATE DESIGN AND REVENUE TEST MODEL Development of Customer Class Demands and Allocation Factors Load Profile Information Load profile information identifies how customers use electricity at various times of the day and is critical to ensure the cost of service study is accurate and defensible. We will analyze information from the following sources: • Electronic meters installed on time of use and other customers • Load research information available from other sources • Analysis of substation feeders • Utilize our data base of existing load research obtained from other utilities Development of Allocators The load profile information will be used to allocate expenses based on cost-causation and each class's contribution to the electric department's system peak. The allocators will be developed on a seasonal and annual basis and used to determine the following costs for each customer class. • Power supply demand cost by time of day and season • Power supply energy cost by time of day and season • Distribution related costs for sub-transmission or transmission service • Distribution related costs for primary metered customers • Distribution related costs for secondary metered customers • Customer related costs for each class of customers Electric System Losses Losses can vary substantially depending on system loading and temperature. We will identify the system loss factor to use in the distribution rates.This will be done in one of two ways: • If completed, we will use an existing system loss analysis. • We will estimate the appropriate system loss factors during peak loss times through analysis of billing and usage data and applying engineering estimates to determine peak loss factors. 01. 9 Mr. Cary Kalscheuer Page Five Unbundling Scope of Services To obtain information for setting distribution rates for customers who elect customer choice, an electric unbundling study is required to isolate the revenue requirements into the various components to deliver electricity to customers. As part of the study we will unbundle the utility costs in the following manner. • Power supply cost broken down by billing parameters • Transmission-related costs for any transmission or sub transmission facilities owned • Distribution related costs for substation, distribution system, transformer, services, and meter operation and maintenance • Customer service costs for meter installation, meter reading, billing and collections, customer service and any direct cost for specific customer classes • Peak system losses estimated on a seasonal basis Prepare Cost of Service Analysis Customer classes are typically established based on differences in load and usage patterns and how customers use electricity. The cost of service portion of the model will determine the following: • Rate adjustment necessary to meet rate of return requirements of utility • Cost to serve each class compared with projected revenues • Rate adjustment necessary for class to meet cost of service requirements • Monthly customer charge by class • Energy charges for each customer class • Demand charge for demand metered customers • Each rate component is separated by season to identify if seasonal rates are appropriate for AL&W. • Operation and maintenance expenses • Debt service payments • Insurance requirements • Customer deposits RATE DESIGN FOR ELECTRIC DEPARTMENT Electric Rate Design Cost of service results are one factor in design of electric rates for customers. Other factors must be considered such as impact on customers, social and environmental issues and philosophy of the City Utility Commission and City Council. We will work with management and staff in the design of electric rates based on cost of service results, current rates, impact on customer classes and competition with area utilities. We will make recommendations on rates for each class; identify potential new rate classifications, and weaknesses in current rate designs. We will proof the 020 Mr. Cary Kalscheuer Page Six revenues based on projected billing parameters to help ensure the rates are sufficient to meet utility revenue requirements and identify the potential rate impact to utility customers at various usage levels. We will provide assistance on developing additional tiers for each customer class. A one year rate design is included in this proposal. Pricing Model AL&W will be provided a rate design pricing model to determine revenue generated using alternative rate designs and rate tiers and rate structures. The model will identify the impact in percent for each customer class and various usage levels and the percent and dollar impact for residential customers at various usage levels. The model develops a graph to show the percent impact on customers at various usage levels and well as impact on entire class of customers. PRESENTATION OF RESULTS Format of Reports UFS reports are separated into reports listed below: • Executive Summary Report—An overview that identifies the objectives, process and results of the rate study in a clear and concise format, the report includes graphs, charts, tables and recommendations. • Full Report— Includes all the detailed schedules developed to complete the study and includes the executive summary report • Rate Design Recommendation Report for one (1)test year—The rate design report is a separate module. To ensure efficiency and timeliness of the study the executive summary and the full detail report are provided to management for input into the rate design process. The rate design report includes the following: o Comparison of the current and proposed rates o Expected revenues generated from proposed rates o Impact on customer classes at various usage levels or load factors within each rate class Presentation of Cost of Service and Rate Design Study A critical aspect of the study is the clear and concise presentation to the City Utility Board. UFS professionals are skilled at explaining and working with advisory and governing bodies to ensure decisions are based on information they can understand and apply to the local environment. 021. Mr. Cary Kalscheuer Page Seven Meetings and Presentations We anticipate two on-site meetings to complete the study. The following meetings are anticipated: • Initial meeting - Clarify scope of services, management expectations and preliminary fieldwork (Conference call) • Fieldwork— Fieldwork will be scheduled and take approximately one day (Conference call) • Review draft reports with management (Conference call) • Conduct presentation to the AL&W Management (On-Site) PHASE TWO—COST OF SERVICE, RATE DESIGN AND REVENUE TEST MODEL Initial Meeting—Preparation of Information Request Week One Completion of Information Request by Client Week Two Planning/Set-up Models Week Three Review and Development of Revenue Requirements Week Four—Five Cost of Service Analysis Component/Functional Costs Week Six Cost based Rate Design and alternatives Week Seven Report, Recommendations & Presentation of Draft Week Eight Final Report Week Nine 022 Mr. Cary Kalscheuer Page Eight Project Pricing Prices, terms, and conditions are good for a period of 90 days from date of opening. Payment will be made through submission of invoice which itemizes the work performed. "Total not to exceed amount" includes all out of pocket expenses for two on site meetings. PHASE ONE - FINANCIAL PROJECTION, RATE TRACK AND FUEL COST ADJUSTMENT MODEL Project Rates Average Services Hours Manager, Manager, Analyst Hourly Rate Amount Initial Project Meeting 1 1 1 0 $ 390 $ 390 Data Request 2 1 1 0 195 390 Sales and Power Requirements 16 10 6 0 200 3,200 Financial Plan&Rate Track 16 2 2 12 120 1,920 Revenue Requirements 17 1 16 0 177 3,015 Fuel Cost Adjustment Calculation Model 12 4 8 0 188 2,260 Study Reports 16 4 5 7 150 2,400 On-Site Fieldwork&Travel 24 161 8 0 101 2,420 Totals 104 39 47 19 $ 1,522 $ 16,000 Total Out of Pocket Expenses: $ 1,500 Phase One: Total Not to Exceed $ 17,500 PHASE TWO—COST OF SERVICE, RATE DESIGN AND REVENUE TEST MODEL Project Rates Average Services Hours Manager, Manager, Analyst Hourly Rate Amount Initial Project Meeting 2 1 1 0 $ 195 $ 390 Data Request 2 1 -1 2 115 230 Udpate Rate Track 7 2 5 0 186 1,305 Revenue Requirements 0 - Customer Class Demands and Allocation 18 2 16 0 179 3,230 Class Cost of Service 40 10 27 3 179 7,160 Electric Rate Design 32 6 16 10 158 5,040 Study Reports 15 4 4 7 148 2,225 On-Site Fieldwork and Presentation 16 16 0 0 108 1,720 Totals 132 42 68 22 $ 1,268 $ 21,300 Total Out of Pocket Expenses: $ 1,500 Phase Two: Total Not to Exceed $ 22,8001 023 „„,- LI A.Z LJ S A rur .a warra CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF TH • USA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITI 1 DATE: JANUARY 25, 2010 SUBJECT: APPROVE PLAN AND SPECIFICATIONS FOR PROJECT LD2010-2 — FURNISH AND INSTALL UNDERGROUND ELECTRIC SUBSTRUCTURES ON LARK ELLEN SOUTH OF GLADSTONE AS PER PLAN # ED2010-2 RECOMMENDATION It is recommended that the Utility Board approve the plan and specifications for project LD2010- 2 and authorize City Clerk to advertise this project for bids. BACKGROUND Azusa Light & Water (AL&W) has an overhead 12KV power line that crosses Gladstone Street at the intersection of Gladstone and Lark Ellen Avenue. In the same vicinity, Southern California Edison also has high voltage overhead power lines traversing along Gladstone. At this intersection, AL&W's span of power line had been damaged and repaired on several occasions, typically during major lightning storm events. The damage caused by lightning has resulted in prolonged power outages because of the difficulty in repairing power lines in close proximity to another utility line at a busy intersection. Moreover, whenever SCE's power line mounted above AL&W's is damaged/downed, it can affect AL&W's line located underneath, taking it out of service. This section of power line serves approximately 250 residential customers and a convenience store. If the entire circuit is down, approximately 10% of total load (about 6 MW) is impacted during peak hours. Including BFI, the majority of customers on this circuit are manufacturers and light industrial. 024 Underground Electric Substructures on Lark Ellen January 25,2010 Page 2 Staff has prepared a plan to mitigate the existing congested condition of the overhead power line by converting this span of overhead power line to underground at the intersection of Gladstone and Lark Ellen Avenue. The plan and specifications are available for public review at the second floor of Azusa Light & Water office at 729 N. Azusa Avenue and at the Library at 729 N. Dalton Avenue. Undergrounding this section of power line will avoid potentially unsafe conditions when making repairs and facilitate rapid restoration of electricity to affected customers. FISCAL IMPACT The estimated the cost of this project is approximately $97,000 for installation of conduits and substructures, and $11,000 for underground cables and accessories. This Capital Improvement Project is budgeted this fiscal year and sufficient funds are available in Project# 73010B. Prepared by: Hien K. Vuong, Electrical Engineer 025 rte; AZUSA „ . , _ . ‘, . . r.ur a warry CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF T - USA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIE'91 DATE: JANUARY 25, 2010 SUBJECT: AUTHORIZATION TO REQUEST PROPOSALS FOR AN ELECTRIC NETWORK SUPERVISORY CONTROL AND DATA ACQUISITION SYSTEM (SCADA) RECOMMENDATION It is recommended that the Utility Board approve the scope of work for an Electric Network Supervisory Control and Data Acquisition System (SCADA), and then authorize staff to prepare, issue and solicit proposals (RFP). BACKGROUND In January 2005, Azusa Light & Water completed a 10 year Electric System Master Plan which identified electric distribution system improvements needed to ensure a safe, reliable and cost- effective delivery of electricity to existing and future customers in the City of Azusa. One of the recommended improvement projects was the installation of a SCADA system to provide remote control and monitoring of substation equipment, including fault indicating & remotely operated circuit switching devices to be placed at key locations in the distribution network. The value of SCADA is to provide operating personnel with the ability to rapidly locate and isolate faulted lines when disturbances occur, thereby reducing the extent and duration of power outages. By using a SCADA under normal operating conditions, Azusa Light & Water will be able to obtain a situational awareness of the electric system around-the-clock, thereby facilitating the collection of valuable historical data on system metrics and trends for future analysis. Most modern utility systems rely on their SCADA systems as a core business/operating tool to help achieve reliable and efficient operations. 026 SCADA RFP January 25,2010 Page 2 As you may recall, Azusa Light & Water sought to obtain Federal funding for SCADA and related electric system enhancements late last year under the US Department of Energy's (DOE) "Smart Grid" program. Regrettably, we were not successful due to the highly competitive nature of the program. Hence, staff is recommending the preparation, issuance and solicitation of proposals (RFP) for procurement and installation of a SCADA system (hardware and software), which would include the following key components and statement of work: • Provide a global view of the entire electric distribution system from one or more remote locations; • Remote control of substation circuit breakers to allow manual operation after a breaker trip and subsequent automatic re-closing; • Provide real-time circuit analysis of the distribution system to assist in situational awareness during disturbances or under normal operating conditions; • Incorporate the City's aerial map into an integrated circuit map showing the real-time circuit analysis and metered customer services; • Provide wireless or hard-wired communication systems between the SCADA remote terminal units and the utility's central operations center; and • Provide complete testing, final commissioning of the SCADA system after conducting a rigorous safety training on the use thereof. This SCADA project could take 24 months to complete from start to final commissioning and safety training. The estimated cost of the proposed work is about $250,000. Following completion of this project, the utility will consider implementation of a second phase which would involve expanding the project to monitor/control distribution line switches and fault indicating devices. FISCAL IMPACT The actual cost of this SCADA project will be reported to the Utility Board for consideration following receipt and evaluation of submitted proposals. A Capital Improvement Project budget revision may be submitted concurrently for approval. Prepared by: F. Langit, Jr., Senior Electrical Engineer 027 7). A7USA r.nr a warry CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES DATE: JANUARY 25, 2010 SUBJECT: APPROVE ONE TIME PAYMENT TO SOUTHERN CALIFORNIA EDISON (SCE) FOR SUBSTATION METERING FACILITIES CHARGES AS PER AGREEMENT FOR WHOLESALE DISTRIBUTION SERVICE. RECOMMENDATION It is recommended that the Utility Board: (1) approve a one-time payment to Southern California Edison (SCE) in the amount of $172,844.72, to pay for the certified metering and communication facilities installed by SCE at the Azusa and Kirkwall Substations; and (2) adopt attached resolution approving budget amendment in the amount of $172,844.72 to enable payment to SCE for referenced services. BACKGROUND In April 2004 and March 2005, SCE installed certified metering and communication facilities at the Kirkwall and Azusa Substations respectively, pursuant to metering requirements of the California Independent System Operator (CAISO). The installation was made pursuant to the provisions of the service agreement for wholesale distribution service between City of Azusa and SCE. Under this agreement, SCE provided the initial financing and had to design, engineer and construct the CAISO certified metering and communication facilities ("metering facilities"). After the metering facilities were placed in service, SCE was required to complete final accounting of the actual costs incurred and proceed to "true-up" the charge to Azusa. SCE has finally completed their accounting work on this project. The $172,844 charge by SCE to Azusa represents the deferred & accumulated monthly metering facilities charges at the two substations (Kirkwall and Azusa). This amount is consistent to with the provisions of the applicable distribution service agreement between the parties. 028 SCE Payment January 25,2010 Page 2 In deferring this one-time payment, Azusa Light & Water saved some taxes payable to SCE and benefitted by shifting the initial financial risk to SCE. Since the metering facilities were not financed upfront by Azusa Light & Water, however, the resulting monthly metering facilities charges are slightly higher. From hereon, unless otherwise revised by the service agreement, Azusa Light & Water will be paying SCE a recurring monthly Metering Facilities Charges at the two substations as follows: Substation Metering Facilities Charges/month Kirkwall Substation $ 1,211.44 Azusa Substation $ 1,671.51 FISCAL IMPACT The one-time payment of the $172,844 represents a deferred capital expense by Azusa Light & Water. Since this amount was not included in the Fiscal Year 2009-2010 operating budget and is in excess of $100,000, a resolution must be adopted to approve a budget amendment. The monthly metering charges will be effective prospectively and will amount to about $17,300 by fiscal year end and can be covered by existing approved budget amounts using account number 33-40-785-650-6493. Prepared by: F. Langit Jr., Senior Electrical Engineer 029 RESOLUTION NO. 10-C7 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA, CALIFORNIA, AMENDING THE FISCAL YEAR 2009-2010 OPERATING BUDGET FOR THE ELECTRIC UTILITY TO FUND A PAYMENT TO SOUTHERN CALIFORNIA EDISON FOR METERING SERVICES PROVIDED AT ELECTRIC SUBSTATIONS. WHEREAS, the City of Azusa owns and operates an electric utility that provides electricity to over 15,000 customers; and WHEREAS,the City of Azusa was required to install meters at its substations to communicate load data to the California Independent System Operator(CAISO); and WHEREAS, it was determined that the most cost effective means to install substation meters was through an existing agreement with the wholesale distribution service provider- Southern California Edison (SCE); and WHEREAS, SCE initially financed and installed said meters at Azusa Light&Water's two substations and has continued to service those meters at a monthly fee; and WHEREAS, the installation cost and monthly service fees were recently reconciled by SCE and it was recently determined that the City of Azusa would owe SCE $172,844.72; and WHEREAS,the amount owed to SCE for substation metering was not yet included in the FY 2009-2010 Operating budget, until the reconciled amount was determined WHEREAS,Azusa Municipal Code Section 2-450 requires that all budget amendments between$100,000 and $1 million be approved by resolution; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AZUSA, DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. That the City Council finds it necessary to pay SCE $172,844.72 for substation metering equipment installation and related services. SECTION 2. That the Electric Utility's Fiscal Year 2009-2010 Operating Budget account number 33-40-733-620-7140 is hereby amended in the amount of$172,844.72 for purpose of paying Southern California Edison for substation metering services. SECTION 3. The City Clerk shall certify to the adoption of this Resolution. PASSED,APPROVED AND ADOPTED THIS 25th day of January, 2010. oseph R. Rocha, Mayor ATTEST: dr Vera Mendoza, City Clerk STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF AZUSA ) I HEREBY CERTIFY that the foregoing Resolution No. 10-C7 was duly adopted by the Utility Board/City Council of the City of Azusa at a regular meeting of the Azusa Light &Water Utility Board on the 25th day of January, 2010,by the following vote of the Board: AYES: COUNCILMEMBERS: GONZALES, CARRILLO, ROCHA NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: HANKS, MACIAS Vera Mendoza, City Clerk 1) AZUS.A ,IG NT d. WATER CONSENT CALENDAR TO: HONORABLE CHAIRPERSON AND MEMBERS OF T USA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIE DATE: JANUARY 25, 2010 SUBJECT: EXTENSION OF TIME TO CIVILTEC ENGINEERS' CONTRACT FOR DESIGN OF PROJECT WF-221 SOUTH RESERVOIR DEMOLITION AND REPLACEMENT RECOMMENDATION It is recommended that the Utility Board approve the extension of Civiltec Engineers' contract for engineering design services for the South Reservoir Demolition and Replacement Project WF-221 from December 31, 2009 to March 31, 2010. BACKGROUND At its regular meeting held October 27, 2008, the Utility Board approved the award of a contract for consultant engineering design services for the South Reservoir Demolition and Replacement Project to Civiltec Engineers. Civiltec's contract originally terminated on June 30, 2009, and was extended to December 31, 2009 at the September 28, 2009 meeting of the Utility Board. Civiltec is in the final stages of its design work and has requested an extension of Project WF- 221 (see attached letter). Staff has reviewed the provision of a second time extension for Civiltec and finds it to be acceptable. Because this project will not be bid in FY 2009-2010, this is presently not a time sensitive project for ALW. FISCAL IMPACT There is no fiscal impact from the extension of time of this contract. Prepared by: Chet Anderson, Assistant Director- Water Operations 032 CrVILTEC engineering inc. General Civil, Municipal,Water and Wastewater Engineering, Planning, Construction Management and Surveying Monrovia Prescott Phoenix January 20, 2010 City of Azusa 213 East Foothill Boulevard Azusa California 91702-1295 Attention: Chet F. Anderson Subject: Design of South Reservoir Replacement Reservoir Project WF-221 Dear Mr. Anderson: Civiltec has been progressing on the construction documents for the South Reservoir Replacement Project. This project is nearing completion. A final review meeting was conducted on January 14, 2010 to discuss final reservoir design issues related to the updated design standards, water circulation piping, site improvements, and installation of corrosion protection equipment. Final plans and specifications incorporating the design review meeting comments will be submitted by January 22, 2010 for final review and approval. Depending on the review time and incorporation of any review comments we plan to complete the final plan and bid documents by mid February 2010. Civiltec requests that the term of the design agreement be extended thru February 26, 2010 to allow for City review and incorporation of final comments in the project documents. Very truly yours, CIVILTEC engineering, inc. David W Byrum, P.E.. 033 118 West Lime Avenue Monrovia, CA 91016 TEL: (626) 357-0588 FAX: (626) 303-7957 E mew �} �7r ` ,* _ .... .. AZ LJSA r,nr a orarry - - AGENDA ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES DATE: JANUARY 25, 2010 SUBJECT: FUNDING REQUEST BY CALIFORNIA RESOURCE CONNECTIONS, INCORPORATED RECOMMENDATION That the Azusa Utility Board approve a funding request from the California Resource Connections, Inc. (CRC) to conduct two environmental programs and authorize payments to CRC in amount of $7,400 from Water Fund and $7,425 from AB 939 Fee Funds for proposed program activities as outlined in funding request. BACKGROUND In August 2007, the City entered into a Memorandum of Understanding (MOU) with CRC which provided CRC with seed funding to make improvements to the Taylor House located off Highway 39, north of the Mountain Cove Development. As part of that MOU, the City agreed to provide funding to CRC to help them conduct a watershed education walk and litter clean up event called `Think River' and a Smart Gardening and Backyard Composting workshop. Both events were successfully implemented by CRC during 2008 and again in 2009. CRC is now requesting funding to implement the same two environmental programs this year. The first event would be the Smart Gardening and Backyard Composting workshop to be conducted on Saturday, April 10, 2010, at Memorial Park. CRC's proposal is attached and describes the program in some detail using format specified in the MOU. Funding request for the composting workshop is $7,425, which includes workshop planning, coordination, presentation stipend, reporting, and the cost to purchase 50 compost bins and 5 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 $3,900 of the total budget for this program. 034 CRC Proposal January 25,2010 Page 2 The Think River! Litter Clean up event is proposed this year for Saturday, April 17, 2010, and $7,400 has been requested to support this event. This event would begin at San Gabriel Canyon Gateway Center where information would be provided to participants on the watershed and natural setting, and from there participants would be led on a walk along the river to the south picking up litter along the way. An information station would be staged at southern point in Lario Park, a Los Angeles County Park located at the intersection of Foothill Blvd and the San Gabriel River, to refresh participants and provide them with further information provided by the Azusa Historical Society on the San Gabriel River. Participants would then return to the San Gabriel Canyon Gateway Center where trash bags would be collected, counted, weighed and disposed of. Last year, about 150 people participated in similar event and picked up about 700 lbs of trash along the river. Both events represent good examples of public-private partnerships that benefit the environment. During last year's events, CRC was able to get in-kind contributions from various organizations including Azusa Pacific University, Azusa High School Science Dept, Azusa USD, Costco, Cal- Trans, Priority One Medical Transport, U.S. Forest Service, Athens Services, Vulcan Materials, La Flor de Mexico, the California Conservation Corps, Watershed Conservation Authority, City of Hope, the San Gabriel Valley River Water Committee, San Gabriel Valley Mosquito and Vector Control District, and Los Angeles County Department of Public Works as well as other city departments, like Recreation and Family Services, Library, and the Police Department. Considering prior year participation and outcomes, including voluntary and in-kind contributions made, staff recommends support of CRC's proposed programs in amounts requested. It is understood that reports would be provided by CRC to the City following each event on how the funds were used and the level of public participation achieved at each event. FISCAL IMPACT Water program funds are recommended for the Litter Clean up and Watershed Education event in amount of$7,400 from account 32-40-721-791-6625, and AB 939 fee funds are recommended for the Composting event in the amount of $7,425 from account 28-40-750-065-6625. Both accounts currently have adequate budget balance to support the funding request and expenditures represent authorized uses of such funds. Note that CRC's funding request is consistent with prior year requests and proposed activities are also similar. In prior years, the Litter Clean up and Watershed Education event was funded using a State grant, however, the State reduced this grant 95% this year due to budget cuts and so the water fund is proposed as a changed funding source this year. Prepared by: Cary Kalscheuer, Assistant to the Director of Utilities 035 CALIFORNIA RESOURCE CONNECTIONS, INC . 1201 N. Azusa Avenue • Azusa, CA 91702 • 626.969.2491 • www.watershec1connections.ory RESEARCH • EDUCATION • ACTION • LAND To: Azusa Utility Board and Azusa City Council From: Suzanne Avila, Program Director California Resource Connections, Inc. Date: December 7, 2009 Re: Funding Request for Backyard Composting Workshop and Litter Clean-up Program California Resource Connections, Inc. (CRC), and partners Azusa Recreation and Family Services, USDA Forest Service/Angeles National Forest, and the California Conservation Corps (CCC), are proposing 2 community environmental education events to be conducted as part of the City of Azusa's April 2010 Clean and Green activities, specifically a Backyard Composting/Smart Gardening Workshop at Azusa's Memorial Park North Recreation Center and a Litter Clean-up along the San Gabriel River, beginning and ending at Azusa's San Gabriel Canyon Gateway Center. Both events exemplify environmentally-conscious programs that are community-based and have an educational activity as a main component. The goal of providing environmental education programs is to demonstrate sustainable practices, including water conservation/watershed health activities, and to educate residents on the inherent qualities of local natural resources to inspire future stewardship of those resources. CRC and its main partners will work with several City of Azusa departments to develop and produce these events and also outreach to various community organizations to build our partnership base. Program descriptions for each of the 2 proposed programs are listed below, followed by a detailed budget outlining associated costs. All 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. 036 2010 Environmental Program/Activity Application EVENT#1 COMMUNITY GARDENING AND COMPOSTING WORKSHOP Saturday,April 10,2010 9:00 am—11:30 am North Recreation Center—classroom and southern outdoor space Memorial Park 320 N.Orange Place Azusa,CA 91702 1. Description of program: The goal of this event is to educate residents on native plant gardening to promote water conservation practices and various methods of backyard composting, including vermiculture (worm composting). Outreach will be to Azusa families and the community at large. Free compost bin give-aways will be advertised prominently as a draw (proof of residency required/one per household). Morning check-in will begin with a sign in sheet where participant's names/addresses will be collected and checked against those that received a free bin in previous years. Brief welcoming remarks will introduce the certified Landscape Design Professional and/or Master Composter who will conduct the educational demonstrations, complete with a safety lesson. Composting bins will be given away to those in attendance. Additional educational materials regarding sustainable practices will be available for participants to take home (i.e. websites, book titles, journals, regional native plant sites,future watershed related events,etc.) The workshop will conclude with a brief discussion on the health benefits of gardening. This event is being planned for a total of 50 participants (estimate is based on attendance at 2009 composting workshop). 2. Dates when program or activities will be carried out: Saturday,April 10,2010,9:00 am—11:30 am 3. Description of how program helps the City comply with environmental regulations: 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. 2 037 4. Description of Target Audience: Teenagers to Adults 5. Description of How Program will be advertised and marketed: Azusa Herald Azusa Pacific University Azusa Unified School District Citrus Community College City of Azusa On-line calendar City Council meetings during public participation City hall marquee Friends of the Library newsletter Light & Water Clean and Green Campaign Rotating cable bulletin Woman's Club newsletter CREEC—LA (California Regional Environmental Education Community — Los Angeles) San Gabriel and Lower Los Angeles Rivers and Mountains Conservancy website San Gabriel Valley Tribune 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. 7. List of all costs associated with program or activities: See Program Budget outlined in chart on Page 7. 8. Description of funding from other agencies or in-kind labor/volunteers: IN-KIND LABOR / VOLUNTEERS SPONSOR INCOME RESOURCE Azusa City Library In-Kind Bottled water Azusa Light & Water In-Kind Bottled water Azusa Recreation and Family In-Kind Use of North Recreation Center, Services equipment (easy up tents, chairs, tables) Azusa Wellness Center In-Kind Presentation on health benefits 3 038 IN-KIND LABOR I VOLUNTEERS SPONSOR INCOME RESOURCE California Conservation Corps In-Kind Event preparation, set up, and tear down, Parking patrol 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, 2010 of all outcomes, including participant data, any survey information collected, and a final budget showing all expenditures. EVENT #2 THINK RIVER! LITTER CLEAN UP Saturday, April 17, 2010, 9:00 am — 11:30 am San Gabriel Canyon Gateway Center 1960 N. San Gabriel Canyon Road Azusa, CA 91702 1. Description of program: This litter clean up will be advertised as a San Gabriel River Clean Up and Watershed Education Walk as part of the City's April Clean and Green activities. Outreach will be made specifically to Azusa schools K-12, including the Jr. ROTC at both Azusa and Gladstone High Schools, and also to Citrus College and Azusa Pacific University emphasizing the fact that students can earn community service hours by participating. The day's activities will begin at the San Gabriel Canyon Gateway Center with morning snacks and brief welcoming remarks. After signing in, all those participating will be invited to visit three educational booths before the River Walk begins. The three booths will have experts on hand to disseminate information on the following topics: San Gabriel River Watershed in terms of water supply and water quality (i.e. how trash affects water quality), health benefits of an outdoor walk (pedometers are given to each participant), and safety along the river and its natural environment (geologic setting of river, including plants and wildlife). Gloves, trash bags, and safety aids will be distributed during the educational sessions. Participants will then be escorted safely across Highway 39 to the San Gabriel River Bike Trail and asked to walk south, picking up litter along the way while counting the number of steps taken to complete the walk, via their pedometers. CCC members will be walking continuously up and down the bike trail to ensure safety of participants and to disseminate event information as needed. One station will be staffed with volunteers and set-up strategically to serve as the turn-around point at Lario Park— L.A. County Park located at the intersection of Foothill Blvd and the San Gabriel River. This station will give participants a chance to drink water before 4 039 heading back north and an opportunity to visit an educational display hosted by The Azusa Historical Society that focuses on the history of the San Gabriel River. Conclusion of events is back at the San Gabriel Canyon Gateway Center where all trash bags will be collected,counted,weighed,and disposed of properly. This event is being planned for a total of 200 participants (estimate is based on attendance at 2009 river clean up). 2. Dates when program or activities will be carried out: Saturday April 17,2010,9:00 am—11:30 am 3. Description of how program helps the City comply with environmental regulations: 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 & Water Department. 4. Description of Target Audience: Students,families,the community at-large. 5. Description of How Program will be advertised and marketed Azusa Herald Azusa Pacific University Azusa Unified School District Citrus Community College City of Azusa On-line calendar City Council meetings during public participation City hall marquee Friends of the Library newsletter Light&Water Clean and Green Campaign Rotating cable bulletin Woman's Club newsletter CREEC—LA(California Regional Environmental Education Community—Los Angeles) San Gabriel and Lower Los Angeles Rivers and Mountains Conservancy website San Gabriel Valley Tribune 5 040 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. 7. List of all costs associated with program or activities: See Program Budget outlined in chart on Page 7. 8. Description of funding from other agencies or in-kind labor/volunteers IN-KIND LABOR / VOLUNTEERS SPONSOR INCOME RESOURCE Athens Services In-Kind One additional trash collection at Gateway prior to event. Azusa Historical Society In-Kind Historical displays of the San Gabriel River. Azusa Light & Water In-Kind Program funding, advertising events as part of City's Clean and Green Campaign. Azusa Police Department In-Kind One officer to escort participants from across Hwy 39. Use of message board to slow traffic on Hwy 39. Azusa Recreation and Family In-Kind Use of North Recreation Center. Use Services of equipment (easy up tents, chairs, tables). Azusa Wellness Center In-Kind Health experts disseminating information on benefits of outdoor walk. California Conservation Corps In-Kind Crew for event preparation, set up and removal, Event leaders with presence along the bike path to aid, escort, educate participants San Gabriel Valley Mosquito In-Kind Insect repellant for participants, and Vector Control District educational materials U.S. Forest Service In-Kind Use of Gateway Center facilities. Personnel on hand. 10. Description of how program results will be measured reported to the City: Data on participants and outcomes will be collected at each 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 6 041 July 31, 2010 of all outcomes, including participant data, any survey information collected, and a final budget showing all expenditures. 2010 Program Budget — 2 Events ESTIMATED EVENT / MATERIALS FUNDING PARTNER NEEDED REQUESTED CONTRIBUTION TOTAL 1 Community Gardening and Composting Workshop Program Planner(s)stipend for $3,225.00 $3,225.00 43.0 hours @ $75.00/hour 50 Composting Bins = $3,900.00 $3,900.00 5 Worm +44 Soil Savers ($90.00 each + $70.00 each; plus shipping) Creation, Translation, Duplication, $300.00 $300.00 and Distribution of Outreach Materials Master Gardener(s) $400.00 $400.00 (presentation stipend) Bottled Water $100.00 $100.00 Snacks $250.00 $250.00 (Fruit, Bread, Orange Juice) Azusa Recreation donation of $1,600.00 $1,600.00 NRC facility use and equipment (easy up tents, tables, chairs) CCC donation of Corps $1,200.00 $1,200.00 Members/Event Leaders (12 hours @ $28.00 hour), Use of equipment (trucks, vans, chairs, clean up) Event 1 Total $7,425.00 $3,550.00 $10,975.00 2 San Gabriel River Clean Up Program Planner(s) stipend for $5,700.00 $5,700.00 76.0 hours @ $75.00/hour Creation, Translation, Duplication, $300.00 $300.00 and Distribution of Outreach Materials Port-a-Potty(x2) $600.00 $600.00 Ambulance/Medic Service $800.00 . $800.00 (4 hours) Trash Bags $200.00 $200.00 Disposable Gloves, non Latex $100.00 $100.00 Trash Disposal Service $400.00 $400.00 Water $500.00 $500.00 Snacks (Fruit, Bread, Orange $350.00 $350.00 Juice) 7 042 ESTIMATED EVENT / MATERIALS FUNDING PARTNER NEEDED REQUESTED CONTRIBUTION TOTAL Azusa Recreation donation of $1,000.00 $1,000.00 use of equipment (easy up tents, tables, chairs) Azusa Police Department $2,500.00 $2,500.00 donation of one Officer(4 hours), Traffic Neon Sign CCC donation of Corps $1,120.00 $1,120.00 Members/Event Leaders 40 hours @ $28.00 hour San Gabriel River Water $400.00 $400.00 Committee and City of Hope donation of Safety Supplies (sunscreen, insect repellant, lip block) US Forest Service donation of $2,500.00 $2,500.00 Gateway Center facility; event supplies (Woodsy Owl, ice chests) Event 2 Total $7,400.00 $9,070.00 $16,470.00 TOTAL AMOUNT $14,825.00 $12,620.00 $27,445.00 REQUESTED Program Partners: The following organizations will be contacted for partnership opportunities Corporate Sponsor • Athens Services • CEMEX • COSTCO • El Nativo Growers • La Flor de Mexico • Miller Brewing Company • Naked Juice • Rain Bird Corporation • REI • U.S. Forest Service • Vulcan Materials Company Water Agencies • Azusa Light and Water • San Gabriel River Water Committee • San Gabriel Valley Municipal Water District 8 043 r_r_41-0r•"7", Eatto ALUSA . CHI 6 W4tE1. AGENDA ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE SA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES DATE: JANUARY 25, 2010 SUBJECT: NEW TWO-THIRDS REQUIREMENT FOR LOCAL PUBLIC ELECTRICITY PROVIDERS ACT RECOMMENDATION It is recommended that the Utility Board consider adopting an OPPOSE position on the California ballot initiative titled "New Two-Thirds Requirement for Local Public Electricity Providers Act" scheduled for a vote on the June 8, 2010-state-wide ballot. BACKGROUND On June 1, 2009, California State Ballot Petition 09-0015, the "Taxpayer Right to Vote Act", was filed with the California State Attorney General for inclusion on the June 2010 statewide ballot. The proposed initiative is being sponsored by PG&E, and if passed would impact the ability publicly-owned electric utilities expand electricity service beyond their current boundaries. The Initiative would also impact the ability of cities and counties to engage in community choice aggregation. On July 23, 2009, the California Attorney General authorized the proponents of the Initiative to gather the signatures to qualify it for the June 2010 ballot. The Initiative proponents needed to gather 694,354 verified signatures by December 21, 2009 to qualify for the June 2010 ballot. The initiative was certified by the Secretary of State after verification of a sampling of the 1,121,944 signatures submitted. The Attorney General did require a name change to the initiative in order to more accurately reflect the nature of the proposal. The initiative formerly named "The Taxpayer Right to Vote 044 New Two-Thirds Requirement for Local Public Electricity Providers Act January 25,2009 Page 2 Act" is now called "New Two-Thirds Requirement for Local Public Electricity Providers - Initiative Constitutional Amendment. " Prior to expanding electricity service into a newly annexed portion of the City or to any portion of the City where the City's utility is not the sole provider of electricity, the proposed Act would require that a public power provider obtain two-thirds voter approval of both the voters in the existing territory and the voters in its proposed expanded territory. (Under existing California law, annexations that include the expansion of electric service require approval of a majority of voters in the area to be annexed.) In addition, Cities or counties intending to pursue community choice aggregation (CCA) would be required to obtain two-thirds voter approval before proceeding with a CCA. CCA, authorized by the State legislature in 2007, allows a city or a county (or group of government agencies) to procure and provide electricity to residents and businesses within its jurisdictions. The investor owned utility that would continue to provide distribution and other electricity services within the area served by the CCA. The requirements of ACT would apply whenever there is an expenditure of public funds. The initiative would impact: 1. A City's expansion of its electric service territory by imposing the voting requirement; 2. A City's expansion of its boundaries if the City wants to provide electric service as part of its bundle of services associated with the expansion; and 3. A city's/county's ability to create a new publicly owned utility or community choice aggregation. The official ballot summary prepared by the Office of the Attorney General of the State of California says: "Requires local governments to obtain the approval of two-thirds of the voters before providing electricity to new customers or expanding such service to new territories if any public funds or bonds are involved. Requires same two-thirds vote to provide electricity through a community choice program if any public funds or bonds are involved. Requires the vote to be in the jurisdiction of the local government and any new territory to be served. Provides exceptions to the jurisdiction of the voting requirements for a limited number of identified projects." It is presently unclear if the Act would limit the ability of an existing municipal utility to serve new customers within its presently defined service boundaries without a public vote given the underlined language highlighted earlier herein. 045 New Two-Thirds Requirement for Local Public Electricity Providers Act January 25,2009 Page 3 FISCAL IMPACT According to the California Legislative Analyst's Office, the fiscal effects of this initiative are unknown. The net impact on state and local government costs and revenues are dependant on future voter decisions. In the long-run, the proposed Act would likely increase costs of the City to provide electric utility service and potentially reduce revenues if opportunities to serve new customers and/or to expand service are limited. Prepared by: G. Morrow, Director of Utilities 046 Editorial: PG&E makes a new power grab - Sacramento Opinion - Sacramento Editorial I ... Page 1 of 2 THE i i':SACRAMENTO BEE Editorial : PG&E makes a new power grab Published Tuesday, Jan. 19, 2010 Pacific Gas and Electric spent $3.5 million to collect more than a million signatures to qualify what it calls the Taxpayers Right to Vote Act for California's June ballot. The self-serving title makes it sound like motherhood and apple pie. It is neither; the opposite, in fact. If voters approve the measure, it will protect the investor-owned utility from dissatisfied customers angry about bad service and high costs. The initiative makes it virtually impossible for those customers to escape PG&E and create their own public power agency or to be annexed by a neighboring government-owned and operated utility. Under its provisions, a super majority, or two-thirds of the voters, in any jurisdiction would have to approve a proposal to switch from an investor-owned utility and move to public power. Stated another way, one-third of the electorate, a minority, would get to decide this vital issue for the majority. PG&E's motives in this effort are obvious. Northern California's largest investor-owned utility has among the highest electricity rates of any power provider in the country, and those rates will likely go a lot higher soon. Currently PG&E has some 10 rate hike requests worth more than $5 billion pending before the California Public Utilities Commission. Increasingly, customers straining to pay those high electric bills are turning to public power for relief. PG&E charges its average customers 15.2 cents per kilowatt-hour for electricity. Sacramento Municipal Utility District customers pay 11.4 cents per kilowatt-hour, 25 percent less. Roseville's rates are comparable to SMUD's. In recent years PG&E has spent tens of millions of dollars to fend off efforts by ratepayers in San Joaquin, San Francisco, Marin and Yolo counties who've tried to form their own public utilities or annex themselves to public power agencies. If its initiative passes, PG&E won't have to worry about fighting small battles all over the state. The constitutional amendment makes it virtually impossible for any jurisdiction to escape the PG&E monopoly. It also makes it difficult for cities that have public power agencies to extend that coverage to areas they annex in the future without going through onerous and expensive public votes. 047 Editorial:PG&E makes a new power grab-Sacramento Opinion-Sacramento Editorial I... Page 2 of 2 constitutional amendment.If it passes,it enshrines unfair protections against competition for PG&E,one of the richest,most powerful corporations in the state,into the California Constitution. It is unusual for The Bee to come out against a ballot measure before the campaign has really started.The PG&E initiative deserves special attention.It's that bad. 048 PG&E initiative on power suppliers on ballot Page 1 of 2 SFGate.c0f11 PG&E initiative on power suppliers on ballot David R. Baker, Chronicle Staff Writer Thursday, January 14, 2010 A ballot measure, backed by Pacific Gas and Electric Co., that would limit the ability of California cities to go into the public power business has qualified for the June election, according to the secretary of state. The measure would force local governments that want to compete with PG&E to win the approval of two-thirds of their voters first. The utility, California's largest, is fighting efforts by San Francisco and Marin County to start buying electricity on behalf of their residents, taking over a role long held by PG&E. The initiative needed 694,354 valid signatures in order to be placed on the June ballot. Secretary of State Debra Bowen certified the measure on Tuesday after her office verified a random sample of the 1,121,944 signatures submitted. "We're encouraged by the support this initiative received throughout the state," said PG&E spokesman Andrew Souvall. The company, based in San Francisco, has provided all of the initiative campaign's $3.5 million funding, according to the secretary of state's Web site. Public power has a long, contentious history in California, and the fight over the ballot measure promises to be fierce. Officials in San Francisco and Marin County already are sparring with PG&E over their efforts to enter the electricity business. Under a system called community choice aggregation, they would buy electricity for their residents and businesses, while PG&E would continue to own and operate the local electrical grid. Marin's effort includes the county and all of its cities, except for Corte Madera, Larkspur, Novato and Ross. Supporters say the system would allow San Francisco and Marin County to dramatically increase their use of renewable power and have more control over electricity rates. PG&E argues that residents would end up paying more for power. On Monday, San Francisco City Attorney Dennis Iierrera complained to state energy regulators that PG&E was violating California regulations that require utilities to cooperate with community choice aggregation projects. He cited a pamphlet, from a PG&E-backed group, that reads: "Tell the Politicians, San Francisco Should Opt Out of a Costly Energy Scheme." "We cannot let Californians be denied the benefits of cleaner, cost-effective energy alternatives - consumer choice is simply too important to ratepayers and the environment," said Herrera. He asked the California Public Utilities Commission to block PG&E marketing campaigns against the http://www.sfgate.com/egi-bin/article.cgi`?f=/c/a/2010/01/14/BUND1 BHQ7S.DTL&type=. .. 1/14/2010 04 9 PG&E initiative on power suppliers on ballot Page 2 of 2 community choice program. E-mail David R. Baker at dbaker@sfchronicle.com. http://sfgate.com/cgi-bin/a rticle.cgi?f=/c/a/2010/O1/14/BUND1BHQ7S.DTL This article appeared on page DC - 1 of the San Francisco Chronicle http://www.sfgate.com/cgi-bin/article.cgi?f=/c/x/2010/01/1 4/BUND1 BHQ7S.DTL&type=... 1/14/2010 050 CAUFORNIA ENERGY MARKETS♦ January 15,2010♦No. 1061 ♦ Page 4 IT Bottom Lines [11] Good Faith and Aggregation December,with a"foreboding"headline that read On Monday San Francisco City Attorney Dennis "Buyer Beware"and"Don't Be Left in the Dark." Herrera asked the CPUC to prohibit utilities from Herrera's petition contained copies of the brochure. toll- marketing to retail customers in areas aspiring to ditch Most recently,PG&E discontinued listing mens utility power suppliers and become community-choice free number on its CCA webpage where customers aggregators. could opt out of a CCA before the formal notification In a petition, Herrera asked that the CPUC restrict period for opt outs even begins(see story at[14.2]). utilities from engaging in conduct designed to thwart a San Francisco has tried to break from PG&E for over CCA program,such as deceptive advertising;prevent a decade and has never been successful. PG&E press spokesman Andrew Souvall said in them from soliciting requests to opt out of the aggre- response to the petition that the utility"believes it can gator;and allow a CCA to obtain an injunction against communicate with our customers." a utility that violates commission rules regarding It's hard to argue with such simple logic.If an aggregation. aggregator is allowed to present its own spin, why Herrera's petition comes after Pacific Gas&Elec in theory should PG&E be prohibited from doing the tric's marketing efforts against a number of aggrega- same?Put another way,should PG&E be muzzled if it tors—including the City and County of San Francisco believes that San Francisco does not have the expe- and the Marin Energy Authority—and as a PG&E rience and resources to buy its own power'? backed initiative regarding CCAs qualified for the What if an aggregator says PG&E will not meet November ballot.If approved,the initiative would man its renewables targets by 2010?Such a statement would date that any local government must approve an aggre surely be classified as spin,since everyone knows utilities gation plan by a two-thirds vote. have until 2013 to meet the RPS using flexible compli- I doubt voters will pass the initiative in California ance.Should PG&E be denied fair canment? marijuana legalization has a much better chance.And Once the mudslinging starts, it is hard to stop. it strikes me as a poor strategy.Given the high chance What's next here?Television commercials where some it won't pass,it just makes more people poor Marin official doesn't answer the aware they have the potential to aggre- phone at 3 a.m. while the county land- gate and that PG&E wants to stop Once the mudslinging scape resembles a lightless apocalypse? them from doing so. Does PG&E really starts,it is hard to step. The swift-boating of Peter Darbee? need to pay for that kind of bad PR? I'm all for stopping the slinging,but PG&E doesn't even need the initiative: that would mean the same commercial Not a single aggregation attempt has been successful speech restrictions would have to be placed on aggre- in its service territory,though some have tried.The gators as they would be on PG&E. In that light,I think San Joaquin Valley Power Authority near Fresno shelved there is a world of difference between advertising and its plans for aggregation after failing to get a contract with debate,between argument and agitprop. Showing up an energy supplier;the agency also complained of not at a meeting to state that a particular aggregation having the resources to engage in a full-scale market- attempt carries risks,and discussing potential rates and ing war with PG&E(see GEMNo. 1033 [16]). concentrations of green energy under different scenarios, Things aren't looking so rosily independent for the is in a different ballpark than printing flyers, providing latest potential CCA,the Marin Energy Authority. The toll-free opt-out numbers and funding ballot initiatives, City of Ross pulled out, following a grand jury report or painting PG&E as the cliched evil corporation that which found that aggregation would be a bad deal for doesn't care about green energy. Mann(see CEM No. 1057 [17] and story at[9.1]). Perhaps the concept that should guide the CPUC, The City of Novato never signed on with MEA; if it grants Herrera's petition and doesn't outright ban neither did Larkspur or Corte Madera. Herrera alleges marketing against CCAs which the original proposed that PG&E lobbied Novato with the promise of energy- decision on aggregation did before revision—is that efficiency funding(an allegation PG&E has denied) both aggregators and utilities must be bound by good and argued that PG&E representatives showed up at faith. Are advertisements misleading or untruthful? meetings in Marin and presented"inflammatory spm" Is a utility stating facts,or is it orchestrating a political about"hidden costs"of aggregation along with poten assault on a CCA in an attempt to kill it? tial liability. Consumers could also use some independent San Francisco's aggregation efforts are well analysis—paid for by neither the utility nor the under way. The city received responses to its request CCA—on what aggregation would mean for their for proposals for an energy supplier in December and communities. Otherwise they'll be forever caught in is now focused on negotiating contracts. According to a marketing war. Let good faith,truth and reasoned Herrera's petition,however,a coalition listing PG&E analysis guide the process[Chris Raphael]. as a member mailed a brochure to San Franciscans in Copyright Cr''2010,Energy NewsData Corp.Unauthorized reproduction is strictly prohibited 051 May 28, 2009 09 - 0015 VIA PERSONAL DELIVERY 9,,E.CEIVEO The Honorable Edmund G. Brown, Jr. JUN 0 1 2009 Attorney General 1300 I Street INITIATIVE COORDINATOR Sacramento, CA 95814 ATTORNEY GENERAL'S OFFICE Attention: Krystal Paris, Initiative Coordinator Re: Request for Title and Summary- Initiative Constitutional Amendment Dear Mr. Brown: Pursuant to Article II, Section 10(d) of the California Constitution and Section 9002 of the Elections Code, I hereby request that a title and summary be prepared for the attached initiative entitled "The Taxpayers Right to Vote Act" as provided by law. Included with this submission is the required proponent affidavit signed by myself as proponent of this measure pursuant to section 9608 of the California Elections Code. My address as a registered voter is provided and attached to this letter, along with a check for $200.00. All inquires or correspondence relative to this initiative should be directed to Nielsen, Merksamer, Parrinello, Mueller & Naylor, LLP, 1415 L Street, Suite 1200, Sacramento, CA 95814, (916) 446-6752, Attention: Steve Lucas (telephone: 415/389- 6800). Thank you for your assistance. Sincerely 4RobVrrt Lee Pence, iroronent Enclosure: Proposed Initiative 052 Section 1. FINDINGS AND DECLARATIONS 0 9 - 0 0 1 5 The People do find and declare: A. This initiative shall be known as"The Taxpayers Right to Vote Act." B. California law requires two-thirds voter approval for tax increases for specific purposes. C. The politicians in local governments should be held to the same standard before using public funds,borrowing,issuing bonds guaranteed by ratepayers or taxpayers,or obtaining other debt or financing to start or expand electric delivery service,or to implement a plan to become an aggregate electricity provider. D. Local governments often start or expand electric delivery service, or implement a plan to become an aggregate electricity provider,without approval by a vote of the people. E. Frequently the start-up,expansion,or implementation plan requires either construction or acquisition of facilities or other services necessary to deliver the electric service,to be paid for with public funds, borrowing,bonds guaranteed by ratepayers or taxpayers,or other debt or financing. F. The source of the public funds,borrowing,debt,and bond financing is generally the electricity rates charged to ratepayers as well as surcharges or taxes imposed on taxpayers. G. Such use of public funds and many forms of borrowing,debt or financing do not presently require approval by a vote of the people,and where a vote is required,only a majority vote may be required. Section 2. STATEMENT OF PURPOSE A. The purpose of this initiative is to guarantee to ratepayers and taxpayers the right to vote any time a local government seeks to use public funds,public debt,bonds or liability,or taxes or other financing to start or 053 expand electric delivery service to a new territory or new customers, or to implement a plan to become an aggregate electricity provider. B. If the start-up or expansion requires the construction or acquisition of facilities or services that will be paid for with public funds, or financed through bonds to be paid for or guaranteed by ratepayers or taxpayers, or to be paid for by other forms of public expenditure, borrowing, liability or debt, then two-thirds of the voters in the territory being served and two-thirds of the voters in the territory to be served, voting at an election, must approve the expenditure, borrowing, liability or debt. Also, if the implementation of a plan to become an aggregate electricity provider requires the use of public funds, or financing through bonds guaranteed by ratepayers or taxpayers, or other forms of public expenditure, borrowing, liability or debt, then two- thirds of the voters in the jurisdiction, voting at an election, must approve the expenditure, borrowing, liability or debt. Section 3. Section 9.5 is added to Article XI of the California Constitution to read: Sec. 9.5. (a) Except as provided in subdivision (h), no local government shall, at any time, incur any bonded or other indebtedness or liability in any manner or use any public funds for the construction or acquisition of facilities, works, goods, commodities, products or services to establish or expand electric delivery service, or to implement a plan to become an aggregate electricity provider, without the assent of two-thirds of the voters within the jurisdiction of the local government and two-thirds of the voters within the territory to be served, if any, voting at an election to be held for the purpose of approving the use of any public funds, or incurring any liability, or incurring any bonded or other borrowing or indebtedness. (b) "Local government"means a municipality or municipal corporation, a municipal utility district, a public utility district, an irrigation district, a city, including a charter city, a county, a city and county, a district, a special district, an agency, or a joint powers authority that includes one or more of these entities. 2 054 (c)"Electric delivery service" means (1)transmission of electric power directly to retail end-use customers, (2) distribution of electric power to customers for resale or directly to retail end-use customers, or (3) sale of electric power to retail end-use customers. (d) "Expand electric delivery service" does not include (1) electric delivery service within the existing jurisdictional boundaries of a local government that is the sole electric delivery service provider within those boundaries, or (2) continuing to provide electric delivery service to customers already receiving electric delivery service from the local government prior to the enactment of this section. (e)"A plan to become an aggregate electricity provider" means a plan by a local government to provide community choice aggregation services or to replace the authorized local public utility in whole or in part for electric delivery service to any retail electricity customers.within its jurisdiction. (f) "Public funds" means, without limitation, any taxes, funds, cash, income, equity, assets, proceeds of bonds or other fmancing or borrowing, or rates paid by ratepayers. "Public funds" do not include federal funds. (g)"Bonded or other indebtedness or liability" means, without limitation, any borrowing, bond, note, guarantee or other indebtedness, liability or obligation, direct or indirect, of any kind, contingent or otherwise, or use of any indebtedness, liability or obligation for reimbursement of any moneys expended from taxes, cash, income, equity, assets, contributions by ratepayers, the treasury of the local government or other sources. (h)This section shall not apply to any bonded or other indebtedness or liability or use of public funds that (1) has been approved by the voters within the jurisdiction of the local government and within the territory to be served, if any, prior to the enactment of this section; or (2) is solely for the purpose of purchasing, providing or supplying renewable electricity from biomass,solar thermal, photovoltaic, wind, geothermal, fuel cells using renewable fuels, small hydroelectric generation of 30 megawatts or less, digester gas, municipal solid waste conversion, landfill gas, ocean wave, ocean thermal, or tidal 3 055 current, or providing electric delivery service for the local government's own end use and not for electric delivery service to others. Section 4. 'Conflicting Measures A. This initiative is intended to be comprehensive. It is the intent of the People that in the event that this initiative and another initiative relating to the same subject appear on the same statewide election ballot, the provisions of the other initiative or initiatives are deemed to be in conflict with this initiative. In the event this initiative shall receive the greater number of affirmative votes, the provisions of this initiative shall prevail in their entirety, and all provisions of the other initiative or initiatives shall be null and void. B. If this initiative is approved by voters but superseded by law or by any other conflicting ballot initiative approved by the voters at the same election, and the conflicting law or ballot initiative is later held invalid, this initiative shall be self-executing and given full force of law. Section 5. Severability The provisions of this initiative are severable. If any provision of this initiative or its application is held to be invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application. 4 05n E , 3 • rf AL U Std .CMT d 0'41!1 AGENDA ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF T AZUSA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES DATE: JANUARY 25, 2010 SUBJECT: EPA ENDANGERMENT FINDING RELATED TO GREENHOUSE GASES (GHG) RECOMMENDATION It is recommended that the Utility Board consider adopting an OPPOSE position regarding EPA Administrator's Finding that, pursuant to Clean Air Act section 202(a), six greenhouse gases endanger the public health and welfare of the public. BACKGROUND In April 2007, the U. S. Supreme Court ruled that the Environmental Protection Agency (EPA) had the authority to regulate carbon dioxide and other greenhouse gases under the Clean Air Act, provided that EPA found that these emissions were in fact pollutants. The Supreme Court instructed EPA to determine whether GHG poses a danger to the public health and welfare. On April 24, 2009 the EPA Administrator published a proposed finding that GHG are an endangerment and opened a sixty day comment period. During the comment period, a total of 380,000 comments were received, 2/3 of which were supportive of an endangerment finding. A final rule confirming EPA's finding that GHG are indeed an endangerment was published on December 15, 2009. It went into effect 30 days later on January 14, 2010. (See attachments, Endangerment and Cause or Contribute Findings for Greenhouse Gases under the Clean Air Act and EPA's Endangerment Finding—Frequently Asked Questions.) On June 23, 2009, when the EPA's endangerment finding was under public review, American Public Power Association (APPA) filed comments challenging the EPA's finding. (See attached 057 EPA Endangerment Finding on GHG January 25,2009 Page 2 excerpt of Comments by APPA). Since the EPA's rule was published, others have continued to challenge the EPA's finding. Opposition includes an appeal by the National Cattlemen's Beef Association filed with the U.S. Court of Appeals for the District of Columbia circuit. The Southeastern Legal Foundation, along with nine members of Congress including Dana Rohrbacher (R) of California, filed a petition for reconsideration with EPA. For background, Congressman Rohrbacher has been an outspoken critic of EPA's actions in this matter. He represents California's 46th District which includes Huntington Beach, Costa Mesa, Fountain Valley, Seal Beach, Avalon, Rancho Palos Verdes, Rolling Hills, Palos Verdes Estates and Rolling Hills Estates as well as portions of Long Beach, Westminster, Santa Ana and San Pedro. In the near-term, it appears that the implications of EPA's GHG finding is that it is allowing EPA to proceed forward to propose a National Program to reduce GHG from new cars and trucks built in the United States. On September 15, 2009, the EPA and the National Highway Safety Administration proposed a GHG reduction effort that will affect passenger cars, light-duty trucks and medium-duty passenger vehicles for model years 2012 and 2016. Additionally, on September 30, 2009, EPA proposed a rule titled "Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule". If promulgated this Rule could require new, and certain existing, stationary sources of emissions (such as power plants, refineries and cement producers) to use best available control technologies to reduce GHG emissions. (See attached EPA Fact Sheet on this proposed rule.) The APPA provided detailed comments to EPA on the proposed rule that could affect the electric power industry. APPA stressed that the more appropriate vehicle for national GHG regulations should emanate from Congressional legislation not from the Clean Air Act. It also argued that if the CAA is to be the vehicle for GHG rules that such rules should be developed in a more reasonable and deliberative fashion. (See attached excerpt of APPA comments dated December 23, 2009.) FISCAL IMPACT The potential ramifications and fiscal effects of the EPA GHG finding are uncertain, but there could be significant regulatory requirements and costs that would affect the City's electric utility operation. Prepared by: G. Morrow, Director of Utilities 058 Endangerment and Cause or Contribute Findings for Greenhouse Gases under the Clean... Page 1 of 3 (ED EI�t http://www.epa.gov/climatechange/endangerment.html etto Last u dated on Friday,December 18th,2009. Climate Change - Regulatory Initiatives S *• Dr Ft t(�D<<d' You are here:EPA Home Climate Change Regulatory Initiatives Endangerment and Cause or Contribute Findings Endangerment and Cause or Contribute Findings for Greenhouse Gases under the Clean Air Act Action You will need Adobe Acrobat Reader,available as a free download,to view some of the On December 7,2009,the Administrator signed two distinct files on this page. See EPA's findings regarding greenhouse gases under section 202(a)of PDF pane to learn more about the Clean Air Act: PDF,and for a link to the free Acrobat Reader. Endangerment Finding:The Administrator finds Resources and Tools that the current and projected concentrations of the six key well-mixed greenhouse gases--carbon dioxide • Findings (CO2),methane(CHJ,nitrous oxide(N,0), • Technical Support hydrofluorocarbons )(HFCs), perfluorocarbons (PFCs), Document and sulfur hexafluoride(SF6)--in the atmosphere • Response to Comment threaten the public health and welfare of current and Documents future generations. • Press Release • Resources • Cause or Contribute Finding:The Administrator finds that the combined emissions of these well-mixed • Legal Basis(PDF)(1 p., 117 greenhouse gases from new motor vehicles and new Hea KB,About PDF) • motor vehicle engines contribute to the greenhouse Health Effects(PDF)(1 E95KB,AboutF) gas pollution which threatens public health and Environmental and welfare. Welfare Effects(PDF) (1 p.,45 KB,About PDF) • These findings do not themselves impose any requirements Climate Change Facts on industry or other entities. However,this action is a About PDF) p.,39 KB, prerequisite to finalizing the EPA's proposed greenhouse gas • Light Duty Vehicle emission standards for light-duty vehicles,which were jointly Program(PDF)(1 p., 39 KB,AboutPDF) proposed by EPA and the Department of Transportation's • Timeline(PDF) (1 p., National Highway Safety Administration on September 15, 30 KB,About PDF) 2009. Frequently Asked Questions(PDF)(3 pp.,38 KB,About PDF) Background • Contact Us On April 2,2007, in Massachusetts v.EPA, 549 U.S.497(2007),the Supreme Court found that greenhouse gases are air pollutants covered by the Clean Air Act. The Court held that the Administrator must determine whether or not emissions of greenhouse gases from new motor vehicles cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare,or whether the science is too uncertain to make a reasoned decision. In making these decisions,the Administrator is required to follow the language of section 202(a)of the Clean Air Act. The Supreme Court decision resulted from a petition for rulemaking under section 202(a)filed by more than a dozen environmental, renewable energy,and other organizations. On April 17, 2009,the Administrator signed proposed endangerment and cause or contribute 059 http://www.epa.gov/climatechange/endangerment.html 1/21/2010 Endangerment and Cause or Contribute Findings for Greenhouse Gases under the Clean ... Page 2 of 3 findings for greenhouse gases under Section 202(a) of the Clean Air Act. EPA held a 60-day public comment period, which ended June 23, 2009, and received over 380,000 public comments. These included both written comments as well as testimony at two public hearings in Arlington, Virginia and Seattle, Washington. EPA carefully reviewed, considered, and incorporated public comments and has now issued these final Findings. Findings These findings were signed by the Administrator on December 7, 2009. On December 15, 2009, the final findings were published in the Federal Register (www.requlations.gov) under Docket ID No. EPA-HQ-OAR-2009-0171. The final rule will be effective January 14, 2010. Endangerment and Cause or Contribute Findings for Greenhouse Gases under the Clean Air Act (52 pp., 308 KB, About PDF) Technical analyses developed in support of the Endangerment and Cause or Contribute Findings for Greenhouse Gases under the Clean Air Act may be found here: Technical Support Document for the Findings (210 pp., 2.5 MB, About PDF) Response to Comments EPA's response to public comments received on the Proposed Findings and accompanying Technical Support Document may be found here: Volume 1 : General Approach to the Science and Other Technical Issues (PDF) (146 pp., 13.9 MB, About PDF-) Volume 2: Validity of Observed and Measured Data (PDF) (104 pp., 704 KB, About • Volume 3: Attribution of Observed Climate Change (PDF) (59 pp., 372 KB, About PDF) Volume 4: Validity of Future Projections (PDF) (81 pp., 483 KB, About PDF) • Volume 5: Human Health and Air Quality (PDF) (95 pp., 704 KB, About PDF) • Volume 6: Agriculture and Forestry (PDF) (43 pp., 172 KB, About PDF) • Volume 7: Water Resources, Coastal Areas, Ecosystems and Wildlife (PDF) (65 pp., 311 KB, About PDF) • Volume 8: Other Sectors (PDF) (25 pp., 95 KB, About PDF) r Volume 9: Endangerment Finding (PDF), (37 pp., 137 KB, About PDF) • Volume 10: Cause or Contribute Finding (PDF) (18 pp., 76 KB, About PDF) • Volume 11 : Miscellaneous Legal, Procedural, and Other Comments (PDF) (40 pp., 167 KB, About PDF) Resources • Press Release Press Kit Legal Basis (PDF) (1 p., 117 KB, About PDF) Trasfondo legal (PDF) (2 pp., 32 KB, About PDF) • Health Effects (PDF) (1 p., 95 KB, About PDF) Efectos a la salud (PDF). (1 p., 79 KB, About PDF) Environmental and Welfare Effects (PDF) (1 p., 45 KB, About PDF) Efectos medioambientales (PDF1 (2 pp., 32 KB, About PDF) Climate Change Facts (PDF) (1 p., 39 KB, About PDF) Datos sobre el cambio climatico (PDF) (2 pp., 33 KB, About PDF) Light Duty Vehicle Program (PDF) (1 p., 39 KB, About PDF) Timeline (PDF) (1 p., 30 KB, About PDF ) • Frequently Asked Questions (PDF) (3 pp., 38 KB, About PDF) 060 hap://www.epa.goviclimatechange/endangerment.html 1/21/2010 Endangerment and Cause or Contribute Findings for Greenhouse Gases under the Clean ... Page 3 of 3 To access materials related to the proposed finding, please visit the Proposed Endangerment and Cause or Contribute Findings for Greenhouse Gases under the Clean Air Act archive. Contact Us Contact us at ghgendangermentPepa.gov with questions about this action. Disclaimer: The comment period for this action has ended; comments made during this time will not be entered into the docket. 061 http://www.epa.gov/climatechange/endangerment.html 1/21/2010 ".ate (411111650)w EPA's Endangerment Finding Frequently Asked Questions What has EPA determined in these Findings? The Administrator finds that under section 202(a)of the Clean Air Act greenhouse gases threaten both the public health and the public welfare, and that greenhouse gas emissions from motor vehicles contribute to that threat. This final action has two distinct"findings,"which are: 1)The"Endangerment Finding,"in which the Administrator finds that the mix of atmospheric concentrations of six key,well-mixed greenhouse gases threatens both the public health and the public welfare of current and future generations. These six greenhouse gases are: carbon dioxide(CO2),methane (CH4),nitrous oxide(N20),hydrofluorocarbons(HFCs),perfluorocarbons(PFCs),and sulfur hexafluoride(SF6).These greenhouse gases in the atmosphere constitute the"air pollution"that threatens both public health and welfare. 2)The"Cause or Contribute Finding,"in which the Administrator finds that the combined greenhouse gas emissions from new motor vehicles and motor vehicle engines contribute to the atmospheric concentrations of these key greenhouse gases and hence to the threat of climate change. Will these Final Findings impose any requirements under the Clean Air Act? The action does not itself impose any requirements on industry or other entities. It does,however,pave the way for EPA to finalize the proposed greenhouse gas emission standards for light-duty vehicles, which were proposed in conjunction with the Department of Transportation's Corporate Average Fuel Economy(CAFE)standards earlier this year. Why is EPA issuing these findings? By issuing this action,EPA is responding to the April 2007 Massachusetts v.EPA Supreme Court decision,in which the court found that greenhouse gases are air pollutants under the Clean Air Act.The Court held that EPA must determine whether or not emissions of greenhouse gases from new motor vehicles cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare,or whether the science is too uncertain to make a reasoned decision. (See http://epa.gov/climatechange/endangerment/downloads/timeline.pdf) What is EPA's rationale for making the finding that the elevated concentrations of greenhouse gases in the atmosphere endanger both public health and welfare of current and future generations? EPA considered both observed and projected effects of greenhouse gases in the atmosphere,their effect on climate, and the public health and public welfare risks and impacts associated with such climate change. The assessment focused on both public health and public welfare impacts within the United States,but noted that the current and expected impacts of climate change in other parts of the world can adversely affect the United States. How is EPA defining the "air pollution" caused by greenhouse gas emissions under the Clean Air Act? The word"air pollution"is defined as the six well-mixed and directly emitted greenhouse gases that together constitute the root of the air pollution problem that is causing climate change.These include 062 What requirements are imposed by this action? How do these findings relate to other proposed Clean Air Act rules for greenhouse gases? This action does not itself impose any requirements on industry or other entities. It does allow EPA to finalize the greenhouse gas emission standards for light-duty vehicles proposed jointly with the Department of Transportation's Corporate Average Fuel Economy(CAFE)standards on September 15, 2009. Are stationary source permits under the Prevention of Significant Deterioration (PSD) and Title V operating permit programs triggered by this action? No,this action does not trigger PSD or Title V permitting. Finalization of the GHG emission standards for motor vehicles,proposed on September 15,2009 would trigger these programs.EPA proposed a PSD and Title V GHG Tailoring Rule on September 30,2009 to address this issue. Did EPA rush to issue these finding? No.It has been over 2-1/2 years since the Supreme Court determined that greenhouse gases are pollutants under the Clean Air Act.It has been more than 14 months since EPA issued its Advance Notice of Proposed Rulemaking on this issue.Finally,it has been more than 10 years since the original petition for rulemaking that led to the Supreme Court's decision was filed. Since that time,EPA has been evaluating the entire body of scientific literature,which has become increasingly compelling that the root cause of global warming is greenhouse gas concentrations in the atmosphere and that the impacts of climate change threaten both public health and welfare. 064 American Ph:202.457.290() Public Power Fax:202.457 2910 Association www,APPAnel.org A perm 1875 GonnOCUcut Avenue.NVJ &Re 1200 Washington,DC 20009•5715 Comments Regarding the Proposed Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act From the American Public Power Association (APPA) Submitted to The U. S. Environmental Protection Agency (EPA) Docket ID No. EPA-HQ-OAR-2009-0171. June 23, 2009 065 EPA Docket Center(EPA/DC), Mailcode 6102T Attention Docket ID NO. EPA-HQ-OAR-2009-0171 U.S. EPA 1200 Pennsylvania Ave., NW Washington, DC 20460 Re: American Public Power Association's Comments on Proposed Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act, 74 Fed. Reg. 18886 (April 24, 2009); Docket No. EPA-HQ-OAR-2009-0171 Dear Sir/Madam: The American Public Power Association (APPA) appreciates the opportunity to provide comments on U.S. EPA's proposed endangerment and cause or contribute findings ("Proposed Endangerment Findings"), published in the Federal Register at 74FR18886, April 24, 2009. APPA previously commented on U.S. EPA's Advance Notice of Proposed Rulemaking (ANPR) on regulating greenhouse gases, published at 73FR44354, July 30, 2008. APPA has attached a copy of those comments to this submittal, for inclusion in the current rulemaking record. Public power is the term used to describe the more than 2,000 municipal and other state and local community-owned electric utilities that provide electricity for approximately 43 million Americans. These public power systems are among the most diverse of the electric utility sectors, representing utilities in small, medium and large communities in 49 states (all states except Hawaii). Seventy-five percent of public power systems are located in cities with populations of 10,000 or less. Overall, public power accounts for about 16 percent of all kilowatt-hour sales to consumers. APPA was created in 1940 as a non-profit, non-partisan organization. Its purpose is to advance the public policy interests of its members and their consumers, and provide member services to ensure adequate, reliable electricity at a reasonable price with the proper protection of the environment. More than 90 percent of APPA member utilities meet the definition and qualify under Small Business Regulatory Enforcement and Fairness Act of 1996 (SBREFA). One characteristic of public power municipal electric utilities that makes our perspective unique on the questions pertaining to geologic sequestration (often referred to as CCS) of CO2 as a control option is that more than 80 percent of the public power utilities also manage drinking water utilities that supply residential, industrial,commercial and industrial customers. While the Endangerment proposal is not calling for comments about CCS, APPA believes that both fuel switching to natural gas and geologic sequestration technical issues are worthy of discussion. Should the U.S. EPA propose any regulatory controls on CO2 for the electric utility sector in the short term, these comments offered here and under the proposed UIC rule must be considered. APPA appreciates the opportunity to file comments and remains willing to meet with the U.S. EPA staff or contractors. Thank you. 1 066 Table of Contents I. APPA believes the U.S. EPA has selected two gases for consideration for a Section 202(a) endangerment finding—U.S. EPA has selected two greenhouse gases not emitted by motor vehicles, and has omitted two gases that are emitted or are precursors to GHGs. Pg. 4 II. APPA believes that U.S. EPA has mistakenly categorized climate effects as "health" impacts,while the Clean Air Act and regulatory precedents are clear that such effects must be categorized as "welfare"impacts. Pg. 8 III. APPA's observations about welfare-based standards Pg. 11 IV. The proposed endangerment finding is in conflict with the larger structure of the Clean Air Act Pg. 11 V. U.S. EPA must consider the broad flexibility it has to make reasonable regulatory decisions following on Endangerment findings. Pg. 14 VI. U.S. EPA's regulatory options following an endangerment determination on human health basis would require considerable U.S. EPA's Science Advisory Board (SAB) review and analysis before the U.S. EPA could propose specific regulations. Pg. 16 VII. Any U.S. EPA action following an endangerment finding must consider all of the U.S. EPA's regulatory options. Pg. 17 VIII. The various regulatory options must consider energy policy and consequences from fuel switching to natural gas. Pg. 19 IX. APPA believes the U.S. EPA has considerable discretion in sequencing or phasing in regulatory controls under the existing Clean Air Act. Pg. 22 X. The U.S. EPA might want to address others first before addressing all industrial sectors. Pg. 23 XI. APPA believes the U.S. EPA must consider the status of commercially viable and fully demonstrated technology if it would regulate through NSPS, HAPS, or critical pollutants NAAQS/SIP process. Pg. 24 2 067 XII. Before making an endangerment determination that could lead to proposing and setting standards,the U.S.EPA must consider the ramifications of international GHG emission contributions to the background emissions. Pg.24 XIII. APPA believes the U.S.EPA must consider existing renewable requirements and other state or regional GHG reduction strategies,regulations and laws to give credit for early reduction of CO2. Pg.24 XIV. APPA believes that the U.S.EPA's actions under the Clean Air Act must consider both international energy forecasts,emissions,and growth in CO2 emissions resulting from circumstances beyond the utility's control before setting standards. Pg.25 3 068 Introduction U.S. EPA's proposed endangerment finding represents the first step toward a potentially irreversible course of greenhouse gas regulation under the Clean Air Act, a course of action even the U.S. EPA Administrator recently recognized as an undesirable outcome. APPA believes consistent with our comments filed on Nov. 26th, 2008 in response to the ANPR that the Clean Air Act is not a suitable method to reduce carbon dioxide (CO2) and other GHGs. A copy of the APPA comments on the ANPR is found in the Appendix (page 28).1 Importantly, for the reasons described below, APPA believes that U.S. EPA continues to retain discretion at this moment, and should exercise that discretion, to avoid triggering the otherwise unavoidable cascade of consequences that would result from a final endangerment determination. Given the uniform recognition of the unsuitability of the Clean Air Act to address GHGs—including a recent statements by U.S. EPA Administrator Lisa Jackson—and the ongoing developments on comprehensive legislation, EPA must exercise this discretion to defer a final endangerment determination at this time. APPA's views have not changed as to a preference that Congress pass an entirely new law to accommodate an economy wide approach to reduce GHGs and mitigate against climate change. APPA is not offering comments in this submittal regarding any views on any bills pending in Congress. However in the Appendix (page 28) the APPA policy views on climate change may be found. APPA's comments on the endangerment are specifically focused on the authorities under existing law and do not offer views on cap and trade, carbon taxes, or any other new legislative approaches being considered in Congress. I. APPA believes the U.S. EPA has selected two gases for consideration for a Section 202(a) endangerment finding – U.S. EPA has selected two greenhouse gases not emitted by motor vehicles, and has omitted two gases that are emitted or are precursors to GHGs. (a) Summary • U.S. EPA's proposed definition of"air pollution" for the endangerment finding is specified as the combined mix of the six "long-lived" greenhouse gases: CO2, CH4, Ngo, HFCs, PFCs, and SF6 (74 FR 18895). This definition is inappropriate because it neither fits the source category being addressed by the rulemaking (mobile sources) nor the immediate nature of multiple GHG effects. Enlarging this definition to include Black Carbon and tropospheric ozone should be considered, as these two substances or their precursors are emitted by mobile sources. • U.S. EPA has found no direct effects of greenhouse gases on human health (74 FR 18901). U.S. EPA has, however, concluded that these gases, acting through changes in the climate, can impact public health, both positively and negatively. As discussed in more detail below, APPA believes that there is substantial legislative and regulatory history that supports the view that such impacts are properly characterized as "welfare" impacts, and not health impacts. 1 APPA re-submits those comments in this submittal of comments on the proposed endangerment. 4 069 • A related and significant issue is the fact that the Clean Air Act provides greater flexibility for attaining secondary(welfare) standards than primary(health) standards. Hence,the issue of how best to address indirect health issues is one which materially affects a series of implementation issues, including the technical and economic reasonableness of mitigation measures, and mandatory sanctions for failure to attain a National Ambient Air Quality Standard (NAAQS). • The proposal states that one significant indirect impact of climate change on human health is the effect of temperature changes on mortality(74 FR 18901). The proposal further states that higher temperatures can increase mortality in the summer, and decrease mortality in the winter,but concludes that the net impact is ambiguous (74 FR 18901). Numerous studies point to the net benefit of a warmer climate with respect to this aspect of indirect health impacts. These issues are presented in greater detail below. (b) Definition of air pollution • U.S. EPA has proposed to define climate-related"air pollution"to be the six "long-lived" gases (or groups): CO2, CH4, N20, HFCs, PFCs, SF6. U.S. EPA has considered and rejected inclusion of both Black Carbon (BC), and tropospheric ozone as part of the mix of gases affecting climate change. • The radiative forcing of greenhouse gases is measured in watts per square meter(W/m2). According to the IPCC2, the contributions to radiative forcing(in 1998)by the six GHGs proposed by U.S. EPA in its definition of"air pollution" total about 2.1 W/m2, and individually are o CO2: 1.46 W/m2 o CH4: 0.48 o N20: 0.15 o HFCs, PFCs, SF6: 0.02 • According to Ramanathan & Carmichael3: o "Emissions of Black Carbon are the second strongest contribution to current global warming." o "Deposition of Black Carbon darkens snow and ice surfaces, which can contribute to melting, in particular of Arctic sea ice." 2 Climate Change 2001: The Scientific Basis,Intergovernmental Panel on Climate Change,2001. 3 Global and regional climate changes due to black carbon,V. Ramanathan and G. Carmichael(Scripps Institution of Oceanography and College of Engineering,University of Iowa), Funded by NSF,NOAA,and NASA, Nature Geoscience, 1: 221-227,March 2008. 5 070 http://www.epa.gov/nsr/fs20090930action.html • "ED 04,4 Last updated on Wednesday,September 30th,2009. I 9 'Ti New Source Review (NSR) You are here: EPA Home Air&Radiation New Source Review Regulations&Standards Fact rt Sheet Fact Sheet -- Proposed Rule: Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule ACTION • On September 30, 2009, EPA announced a proposal that is focused on large facilities emitting over 25,000 tons of greenhouse gases a year. These facilities would be required to obtain permits that would demonstrate they are using the best practices and technologies to minimize GHG emissions. • The rule proposes new thresholds for greenhouse gas emissions(GHG)that define when Clean Air Act(CAA) permits under the New Source Review (NSR) and title V operating permits programs would be required for new or existing industrial facilities. • The proposed thresholds would"tailor"the permit programs to limit which facilities would be required to obtain NSR and title V permits and would cover nearly 70 percent of the national GHG emissions that come from stationary sources, including those from the nation's largest emitters—including power plants, refineries, and cement production facilities. • Small farms, restaurants and many other types of small facilities would not be subject to these permitting programs. • This proposal addresses the emissions of the group of six greenhouse gases (GHGs)that may be covered by an EPA rule controlling or limiting their emissions: 1. Carbon dioxide (CO2) 2. Methane(CH4) 3. Nitrous oxide(N20) 4. Hydrofluorocarbons(HFCs) 5. Perfluorocarbons(PFCs) 6. Sulfur hexafluoride(SF6) • EPA is proposing carbon dioxide equivalent(CO2e) as the preferred metric for determining GHG emissions rates for any combination of these six GHGs, but we are requesting comment in this proposal on alternatives. Emissions of greenhouse gases are typically expressed in a common metric, so that their impacts can be directly compared, as some gases are more potent (have a higher global warming potential or GWP)than others. The international standard practice is to express GHGs in CO2e. Emissions of gases other than CO2 are translated into CO2 equivalents by using the gases'global warming potentials. • Under the Title V operating permits program, EPA is proposing a major source emissions applicability threshold of 25,000 tons per year(tpy)of carbon dioxide CO2e for existing industrial facilities. Facilities with GHG emissions below this threshold would not be required to obtain an operating permit. • Under the Prevention of Significant Deterioration (PSD) portion of NSR—which is a permit program designed to minimize emissions from new sources and existing sources making major modifications—EPA is proposing a: 1. Major stationary source threshold of 25,000 tpy CO2e. This threshold level would be used to determine if a new facility or a major modification at an existing facility would trigger PSD permitting requirements. 2. Significance level between 10,000 and 25,000 tpy CO2e. Existing major sources making modifications that result in an increase of emissions above the significance level would be required to obtain a PSD permit. EPA is requesting comment on a range of 071 values in this proposal, with the intent of selecting a'single value for the GHG significance level. • Operating permits contain air emissions control requirements that apply to a facility, such as national emissions standards for hazardous air pollutants, new source performance standards, or best available control technologies required by a PSD permit. In general, since there are currently no such air emission control requirements, existing facilities with GHG emissions greater than 25,000 tons per year that already have operating permits would not need to immediately revise them. At the end of a 5-year period when the operating permit must be renewed, these facilities would be required to include estimates of their GHG emissions in their permit applications. Facilities may use the same data reported to EPA under the Mandatory Reporting Rule to fulfill this requirement. • New or modified facilities with GHG emissions that trigger PSD permitting requirements would need to apply for a revision to their operating permits to incorporate the best available control technologies and energy efficiency measures to minimize GHG emissions. These controls are determined on a case-by-case basis during the PSD process. • Under the proposed emissions thresholds, EPA estimates that 400 new sources and modifications would be subject to PSD review each year for GHG emissions. Less than 100 of these would be newly subject to PSD. In total, approximately 14,000 large sources would need to obtain operating permits for GHG emissions under the operating permits program. About 3,000 of these sources would be newly subject to CAA operating permit requirements as a result of this action. The majority of these sources are expected to be municipal solid waste landfills. • Municipal solid waste landfills are the second largest source of human-related methane emissions in the United States, accounting for approximately 23 percent of these emissions in 2007. Landfill methane, a powerful greenhouse gas, can be captured, converted, and used as an energy source, reducing emissions and providing an important renewable energy source. • The current thresholds for criteria pollutants such as lead, sulfur dioxide and nitrogen dioxide, are 100 and 250 tons per year (tpy). These thresholds are in effect now, and are appropriate for criteria pollutants. However, they are not feasible for GHGs. Without the tailoring rule, these lower thresholds would take effect automatically for GHGs with the adoption of any EPA rule that controls or limits GHG emissions. • The proposed thresholds would continue to preserve the ability of the NSR and title V operating permit programs to achieve and maintain public health and environmental protection goals while avoiding an administrative burden that would prevent state and local permitting authorities from processing CAA permits efficiently. • EPA will accept comment on this proposal for 60 days after publication in the Federal Register. NEXT STEPS • The final emissions thresholds for GHG emissions under the federal PSD and operating permits programs will take effect immediately upon promulgation of the final rule. At that time, EPA will put the new thresholds into effect in state, local and tribal agency programs that run PSD and Title V operating programs under EPA approval. Those agencies will continue to have the option to seek EPA approval for lower thresholds if they demonstrate that they can adequately implement the PSD program at the lower thresholds. • EPA intends to evaluate ways to streamline the process for identifying GHG emissions control requirements and issuing permits. This will reduce costs and increase efficiency for both sources and for state permitting agencies, which in most cases are responsible for issuing the permits. • Under the proposal, EPA must also re-evaluate the final GHG emissions thresholds after an initial phase, during which PSD and Title V permitting authorities will gain experience in issuing permits to GHG sources. By the end of the first phase, which is proposed to last five years, the Agency is proposing to complete a study to evaluate whether it is administratively feasible for PSD and Title V permitting authorities to adequately administer their programs at lower GHG thresholds. 072 • After reviewing the study results, EPA will complete a follow-on regulatory action, within one year (six years following promulgation of this rule). The follow-on rule will establish thresholds during the second phase, by either: 1. Confirming the need to retain the GHG permitting thresholds for PSD and/or Title V at the levels promulgated with this rulemaking; or 2. Establishing different GHG threshold levels that more accurately reflect the administrative capabilities of permitting authorities to address GHGs. • EPA believes that a five-year duration for the first phase is appropriate but the Agency requests comment on alternative time periods. • EPA also plans to develop supporting information to assist permitting authorities as they begin to address permitting actions for GHG emissions for the first time. The guidance would first cover source categories that typically emit GHGs at levels exceeding the thresholds established through this rulemaking. • Although EPA has not yet identified specific source categories, the Agency plans to develop sector- and source-specific guidance that would help permitting authorities and affected sources better understand GHG emissions for the selected source categories, methods for estimating those emissions, control strategies for GHG emissions, and available GHG measurement and monitoring techniques. • This guidance also will include approaches for making Best Available Control Technology determinations as required for a PSD permit. BACKGROUND • On April 2, 2007, the Supreme Court found that GHGs, including carbon dioxide, are air pollutants covered by the CAA. Massachusetts v. EPA, 549 U.S. 497 (2007). • The Supreme Court found that EPA was required to determine whether or not emissions of GHGs from new motor vehicles cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare, or whether the science is too uncertain to make a reasoned decision. In April 2009, EPA responded to the Court by proposing a finding that greenhouse gases contribute to air pollution that may endanger public health or welfare. • EPA expects soon to take final action on the finding. The agency also expects to issue regulations under the Clean Air Act to control GHG emissions from light duty vehicles (proposal signed 9/15/09). Such an action will trigger Clean Air Act permitting requirements under the Prevention of Significant Deterioration (PSD) and Operating Permit (title V) programs for GHG emissions. This will be the first time GHGs would be subject to either of these Clean Air Act permitting programs. • Congress established the NSR program as part of the 1977 Clean Air Act Amendments and modified it in the 1990 Amendments. NSR is a preconstruction permitting program that serves two important purposes: 1. Ensures the maintenance of air quality standards or, where there are not air quality standards, it ensures that air quality does not significantly worsen when factories, industrial boilers, and power plants are modified or added. In areas that do not meet the national ambient air quality standards, NSR assures that new emissions do not slow progress toward cleaner air. In areas that meet the standards, especially pristine areas like national parks, NSR assures that new emissions fall within air quality standards. 2. Ensures that state-of-the-art control technology is installed at new plants or at existing plants that are undergoing a major modification. • New major stationary sources and major modifications at existing major stationary sources that meet emissions applicability thresholds outlined in the Clean Air Act and in existing PSD regulations must obtain a PSD permit outlining how they will control emissions. The permit requires facilities to apply best available control technology (BACT), which is determined on a case-by-case basis taking into account, among other factors, the cost and effectiveness of the control. • The Clean Air Act Amendments of 1990 required that all states develop operating permit programs. Under these programs, known as Title V operating permits programs, every major 073 industrial source of air pollution (and some other sources) must obtain an operating permit. The permits, which are reviewed every five years, contain all air emission control requirements that apply to the facility, including the requirements established as part of the preconsturction permitting process. HOW TO COMMENT • EPA will accept comment on the proposal for 60 days after publication in the Federal Register. Comments, identified by Docket ID No. EPA-HQ-OAR-2009-0517, may be submitted by one of the following methods: • www.regulations.qov: Follow the online instructions for submitting comments. • E-mail: Comments may be sent by electronic mail (e-mail) to a-and-r-docket@epa.gov. • Fax: Fax your comments to: (202) 566-9744. • Mail: Send your comments to: EPA Docket Center, EPA West (Air Docket), Attention Docket ID No. EPA-HQ-OAR-2009-0517, U.S. Environmental Protection Agency, Mailcode: 2822T, 1200 Pennsylvania Avenue, NW, Washington, DC 20460. • Hand Delivery or Courier: Deliver your comments to: .S. Environmental Protection Agency, EPA West (Air Docket), 1301 Constitution Avenue, Northwest, Room 3334, Washington, DC 20004, Attention Docket ID No. EPA-HQ-OAR-2009-0517. Such deliveries are only accepted during the Docket's normal hours of operation, and special arrangements should be made for deliveries of boxed information FOR MORE INFORMATION • To download a copy of this notice, go to EPA's Web site at: http://www.epa.gov/nsr. • Today's proposed action and other background information are also available electronically at http:l/www.regulations.gov, EPA's electronic public docket and comment system. The docket number for this action is Docket ID No. EPA-HQ-OAR-2009-0517. • For more information on the final rule, contact Joseph Mangino at (919) 541-9778 or mangino joseph@epa.gov. 074 American Ph: 202.467,2900 Public Power Fax: 202.467.2910 Association wyy,':.APPAnet org 1111111041141 875 Connecticut Avenue, NW Shite '2(0 Wasn'npn, DC 24003-371 5 COMMENTS OF THE AMERICAN PUBLIC POWER ASSOCIATION (APPA) PREVENTION OF SIGNIFICANT DETERIORATION AND TITLE V GREEHOUSE GAS TAILORING RULE; PROPOSED RULE 74 Fed. Reg. 55292 (Oct. 27, 2009) Docket: EPA-HQ-OAR-2009-0517 December 23, 2009 1 075 Table of Contents INTRODUCTION AND BACKGROUND ON PUBLIC POWER 5 EXECUTIVE SUMMARY 6 I. THE CLEAN AIR ACT IS NOT SUITABLE FOR REGULATING GHGs,AS THIS RULEMAKING DEMONSTRATES 8 I.A. As EPA Details in this Rulemaking, Congress Never Intended the Clean Air Act's PSD and Title V Programs to Cover Pollutants Like GHGs. 8 I.B. APPA Prefers for GHGs to be Regulated Pursuant to New Climate Legislation. However, APPA Will Not Support"Any` Climate Legislation Just to Avoid PSD and Title V's Application to GHGs. 8 I.C. APPA Believes Strongly That the EPA has Considerable Authority Not Fully Exercised in the Proposed Rule to Delay the Applicability of PSD and Title V to Sources That Emit GHGs and to Reduce the Number of Sources That Would be Subject to PSD and Title V Permitting 9 II. APPA SUPPORTS EPA's USE OF AND THE DOCTRINES OF ABSURDITY AND ADMINISTRATIVE NECESSITY TO LIMIT THE EFFECT OF THE PSD AND TITLE V PROGRAM ON SMALL EMITTING SOURCES THAT EMIT LESS THAN 100,000 TONS OF GHGs. 10 II.A. APPA Agrees That Regulating Sources Under PSD Statutory Triggers Will Lead to Absurd Results. 10 II.A.1. APPA Submits that EPA has Underestimated the Effect of the Proposal on PSD- affected Sources 10 II.A.2. EPA has Significantly Underestimated the Number of PSD-affected Modifications are likely to Occur and Therefore the Definition of"Modification"Also Should be 100,000 during the First Phase of GHG PSD Permitting. 10 II.A.3. EPA Should Minimize the Effect on Small Public Power Utilities by Using a 100,000 ton Threshold to Avoid Impacts on Electric Utilities That are Almost Always alsoSmall Businesses 11 II.A.4. However, the U.S. EPA Should Exempt Emergency Generation From Determinations of PSD Applicability. 12 II.B. EPA Has Authority To Avoid Some of The Dire Consequences Discussed In The NPRM. 12 II.B.1. EPA Must Delay the Effect of PSD and Title Von Affected Sources as Long as Possible in Order to Meet the Criteria of the Legal Doctrines on Which This Rulemaking are Predicated. 12 II.B.2. EPA's Authority to Regulate GHGs Under PSD is Limited by the Requirements for a NAAQS to be Established for GHGs or for PSD to be Triggered by a Major new Source or a Major Modification of a NAAQS Pollutant. 12 II.B.3. Alternatively, as APPA Already has Submitted, PSD does not Apply to GHGs Unless an Increase in a NAAQS Pollutant Triggers PSD. 13 II.8.4. EPA also Should Base the Definition of Major Source and Major Modification of Actual Emissions Rather than Potential to Emit. 14 2 076 ILB.5. EPA Should use its Authority to Determine that Only Three, not six GHGs will be Regulated. Alternatively, APPA Submits That it Only Should Regulate CO2 During the First Phase of the Program 14 II.B.6. APPA Strongly Supports the Agency's Historic Synthetic Minor Policy that Presumed that Sources that Actually Emitted less than 50%of Major Source Thresholds are Minor Sources 15 II.B.7. EPA Must Reject its '`Major for One, Major for All" PSD Interpretation for new Major GHG Sources. 15 II.B.8. EPA Should Increase the Proposed Definition of Modification to the Same Definition of"Major Source." 15 II.C. APPA Supports Other Measures Like Those Discussed in the NPRM for Establishing Presumptive BACT, BACT Permits by Rule, Guidance on BACT For Specific Industries, and General Title V Operating GHG Permits 16 II.C.1 Most Important, EPA should issue BACT Guidance, Including Presumptive BACT, for Large Sources First. 16 II.C.2. BACT Guidance Should Include a List of Maintenance Measures That are Exempt From PSD. 16 III. APPA SUPPORTS EPA's LEGAL AUTHORITY TO PHASE IN THE PSD PROGRAM BY REGULATING LARGE SOURCES FIRST TO AVOID ABSURD RESULTS AND ADMINISTRATIVE IMPOSSIBILITY, PROVIDED THE AGENCY TAKES FURTHER STEPS WITHIN ITS CURRENT LEGAL AUTHORITY TO REDUCE THESE IMPACTS17 III.A. The Doctrines of Absurd Results and Administrative Necessity are independent Authorities That Justify Phasing in the PSD and Title V Rules for GHG Sources. 17 III.B. The Courts Have Recognized an Agency's Authority to Avoid an Absurd Reading of the Law That Would Pervert its Purposes 18 III.C. APPA Agrees That EPA Can Rely on the Doctrine of Administrative Necessity to Delay the Application of PSD and Title V to Smaller Sources. APPA believes that threshold should be 100,000 tons (PTE) 18 III.C.1. The Leading Case for Administrative Necessity, Alabama Power v. Costle (Alabama Power) , States That an Agency may be Allowed in Certain Circumscribed Instances to Deviate From the Plain Language of a law if Such Language Would Prevent an Agency From Carrying out its Mission Under the Law. 19 III.C.2. EPA has a Heavy Burden to Meet the Alabama Power Tests, but APPA Submits with Further Streamlining, it Can Meet That Burden 20 III.C.3. EPA Can Meet That Burden by Adopting Additional Streamlining Features in the First Phase of the Program 20 III.D. The de Minimis Doctrine May Also Support EPA's Proposed Action. 21 III.E. EPA Has Already Used the Doctrines of Administrative Necessity and de Minimis Effects to Carry Out the Legislative Purpose of the Clean Air Act. 22 II1.E.1. Transportation Conformity Rules and Related Interpretative Guidance Issued by EPA Since 1990 are Based on Similar Practical Tailoring Decisions by the Agency. 22 III.E.2. EPA's Tailoring Decisions in Administering Title III of the Act for Regulating Hazardous Air Pollutants 24 IV. BACT DECISIONS REQUIRE SPECIAL ATTENTION FOR GHGs 24 IV.A. Natural Gas is Not BACT for All Sources 24 IV.B. Carbon Capture and Sequestration(CCS)is Not BACT. 25 3 077 IV.C. Presumptive BACT Will be Administratively Necessary for PSD to Work 26 V. HISTORY OF THE CLEAN AIR ACT DEMONSTRATED A PHASING OF REGULATIONS BY POLLUTANTS AND BY INDUSTRY 27 V.A. There is Precedent for Phasing or Tailoring Regulatory Actions to Reduce Pollution Under the Clean Air Act 27 V.B. Precedent for Phasing/Staging Regulatory Steps for Industry or'`Tailoring" Greenhouse Gas Management/Controls at the U. S. EPA. 31 V.C. EPA's Proposed 25,000 tons (PTE) Does Not Adequately Help the Electric Utility Sector and EPA did an Inadequate SBREFA Analysis/Compliance. 32 VI. APPA REQUESTS CLARIFICATION OF ADDITIONAL EPA DISCRETION FOR DELAY OF OTHER REGULATORY IMPACTS ON THE ELECTRIC UTILITY SECTOR. 34 VII. APPA'S COMMENTS ON TITLE V PERMITTING. 34 VIII. APPA URGES EPA TO START REGULATIONS WITH WHAT WORKS: ENERGY EFFICIENCY. 35 APPENDIX 48 4 078 INTRODUCTION AND BACKGROUND ON PUBLIC POWER The American Public Power Association(APPA) appreciates the opportunity to file comments on the proposed PSD and Title V tailoring rule. All of our electric utility members and their residential, institutional, and business customers will be affected by any regulatory or legislative decisions involving Greenhouse Gases (GHG), including this rule if it is promulgated. APPA is the national service organization representing the interests of the more than 2,000 not-for-profit municipal and other state and local community-owned electric utilities that collectively provide electricity to approximately 45 million Americans. These utilities, or "public power"systems, are among the most diverse of the electric utility sectors, representing utilities in small, medium and large communities in 49 states(all but Hawaii), Puerto Rico, American Samoa and Guam. Seventy percent of public power systems are located in cities with populations of 10,000 or less. Created in 1940 as a non-profit non-partisan organization, APPA's purpose is to advance the public policy interests of its members and their consumers, and to provide member services to ensure adequate, reliable electricity at a reasonable price with the proper protection of the environment. Overall, public power accounts for about 15 percent of all kilowatt-hour sales to retail electricity consumers. Approximately 46% of the megawatt hours of electricity produced bv_ public power systems are generated using coal. In addition,the majority of communities operating public power utilities also manage water utilities that provide drinking water to residential, institutional, commercial and industrial customers. This is relevant in the context of APPA's analysis of CCS and the lack of currently deployable CCS technology and the U.S. EPA's question about BACT. Moreover, more than 90% of public power systems meet the definition and qualify as small businesses under the Small Business Act and the Small Business Regulatory Enforcement and Fairness Act of 1996 (SBREFA).' Yet, in spite of their qualification as "small businesses,"Approximately 88% of APPA's members with generation facilities have the potential to emit in excess of 25,000 tons of CO2 , and thus will be subject to the PSD during the first phase of the proposed PSD tailoring rule.2 In view of the significant resource burdens associated with both preconstruction permitting under PSD and the cost of Best Available Control Technology, required for new 'major sources" and "major modifications" under the PSD program, this Accordingly,APPA submitted comments to the EPA and SBA regarding the SBREFA issues related to this rulemaking December 1,2009.' Further,APPA asks that these comments be considered under Executive Order 12866 and under Unfunded Mandates Reduction Act(UMRA),since all of our electric utilities are not for profit utilities. All our additional regulatory permitting and control costs and Title V operating permit fees would be passed though to municipal government customers and the businesses in these territories.APPA believes the EPA failed to adequately study the proposed rules costs and operational impacts on unfunded mandates as required by the Unfunded Mandate Reduction Act.We believe our comments should be considered by the U. S.EPA and OMB in light of Unfunded Mandates Reduction Act. APPA believes that the EPA grossly underestimated the impacts to our electric utilities(owned/operated by local government)and also to state regulatory agencies.This type of poor regulatory cost and impact analysis is very disappointing to APPA given the mandate under the Unfunded Mandates Reduction Act(UMRA)for which the U. S.EPA is accountable. 2 As proposed,APPA believes that the 25,000 ton threshold would only positively affect about 13%of public power utilities with very small diesel(and perhaps gas)emergency generation.APPA cannot imagine how this proposed rule and higher PSD threshold would positively affect any baseload generation units 5 079 rulemaking is one of the most significant rulemakings on which APPA has filed comments for public power providers for any regulatory agency in the almost 70 year history. EXECUTIVE SUMMARY APPA offers conditional support for this U.S. EPA rulemaking because of EPA's attempt to provide relief from PSD and Title V permitting on certain commercial and residential customers by delaying the effect of PSD and Title V on these entities; however, APPA's support is conditioned on the Agency interpreting the PSD's programs relationship to the National Ambient Air Quality Standards (NAAQS)properly. However, the APPA support is conditional upon increased threshold of 100,000 tons rather than 25,000 tons(PTE) (more fully explained in Sec. II.A.3), and delays for PSD and Title V applicability for utility office buildings with no generation,T&D facilities with no generation and emergency or storm response generation. APPA submits that this rulemaking demonstrates why the existing Clean Air Act is almost uniquely unsuited to regulate ubiquitous air pollutants like CO2 and other GHGs. APPA's members prefer GHGs be regulated under new legislation; and not the Clean Air Act. APPA submits that the Agency has exaggerated the urgency and the extent of the application of PSD, in particular, in conjunction with the promulgating light duty vehicle (LDV) standards under Title II of the Act, as a means of"forcing Congressional action on GHGs,"4 a strategy that now is highly unlikely to succeed in the coming months. In view of the fact that Congress is unlikely to enact supportable legislation at this time, APPA believes that accepting the proposed Clean Air Act"tailoring regulatory approach" is imperfect but a responsible way to proceed, provided EPA make clear that PSD for GHGs is only available if EPA promulgates a NAAQS for GHGs or if a new major source or a modification of a NAAQS pollutant triggers PSD and a significant increase of GHGs will result. If the tactic of leverage is because the EPA is trying to push the public power sector toward supporting passage of an undesired new law, including most major pieces of legislation to control CO2 through cap and trade AND command and control then the tactic is ill-advised from both a legislative and judicial vantage point. As APPA's comments detail, EPA has significant authority under the Clean Air Act to regulate GHGs in a far more reasonable fashion,the time to make deliberative judgments on which pollutants to regulate first and from which industries in order to avoid the cascade of regulatory actions and permitting juggernauts at a federal , "state, local and APPA would prefer a new law to control CO2 and other GHGs outside the framework of the Clean Air Act or Endangered Species Act. 4 The media has widely reported that the EPA's proposed rule on PSD tailoring and Title V operating permits just prior to announcing an endangerment determination(on December 7,2009) or the implementation of the Section 202 controls is a regulatory or legislative dual track tactic to the legislative process. APPA cannot support the apparent regulatory process to leveraec the electric utility sector and other parties because of unwanted fears about the impending PSD,Title V operating permits--an anproachpopularly referred to as the Clean Air Act"train wreck"because APPA does not agree that EPA has taken all the steps necessary under the Clean Air Act to avoid this coming regulatory mess. 6 080 tribal or "S/L/T"" levels from its proposed rulemaking, and the obligation under the doctrine of administrative necessity to take these steps to avoid to the extent possible what has been popularly dubbed a "Clean Air Act train wreck." Consistent with the judicial doctrines the Notice of Proposed Rulemaking discusses as the basis for tailoring, it is now EPA's responsibility to use the authorities in the Clean Air Act to further streamline permitting for sources that it proposes are covered by the first phase of the PSD and Title V tailoring rules. APPA believes it is critical that the U.S. EPA recognize that the CAA imposes no fixed deadline within which EPA must respond to a petition for rulemaking, such as the petition from the International Center for Technology Assessment asking EPA to regulate GHG emissions from motor vehicles. Similarly, the CAA does not set a deadline for EPA to establish regulations under 202(a)(1) once it determines the pollution constitutes an endangerment to health or the environment and that given emissions contribute to that endangerment. Moreover,petitioners have tried,but failed,to convince the D.C. Circuit to put EPA on a legally binding schedule for responding to the remand in Massachusetts v. EPA. Given the absence of any legally enforceable deadlines and existence of parallel and more appropriate effort by DOT to revise its CAFE standards, EPA has ample justification to defer finalizing CAA GHG regulations at this time. If the Agency takes the time and utilizes its authority and discretion under the Clean Air Act, APPA submits that the judicial doctrine of administrative necessity will support EPA's PSD and Title V tailoring approach. Our comments include many examples of administrative necessity and practical judgments made by the U. S. EPA over the 20 years of implementation under the Clean Air Act of 1990 and the prior versions of the Act,which also may be helpful in evaluating the agency's authority. Now,when the nation has sustained more than 8 months of greater than 10% unemployment rates and sustained periods of industrial recession, EPA should use these authorities to avoid the risk that the economy could grow even more stagnant with a PSD permitting morasse. Creating permit confusion is synonymous with economic risk for industrial and commercial entities, including for apartment buildings, hospitals,nursing homes, and university buildings. EPA's deliberate actions not to avoid as much confusion as it can under the Act will undermine the successful incentives implemented by the Administration to stimulate the economy since January 2009. APPA offers these detailed comments as conditional support for the proposed tailoring rule with the caveat that the U.S. EPA raise the 25,000 tons(PTE)threshold to 100,000 tons and delay the implementation phase for emergency response, utility office buildings with no generation and the delay until phase II or III for non-CO2 GHGs such as methane, SF6, and nitric oxides. 7 081 i•F A.LUSA .CH1 b 44tt1. INFORMATIONAL ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF TH USA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIE DATE: JANUARY 25, 2010 SUBJECT: UPDATE ON MONROVIA WATER RIGHTS At its November 23, 2009 meeting, the Utility Board met in closed session to discuss direction to staff regarding the possibility of procuring excess water rights from the Monrovia Nursery. As an update, Monrovia decided to not sell its water rights to one or more outside entities and to instead "sell" such rights to its stockholders. See attached letter for more information. Prepared by: G. Morrow, Director of Utilities 082 MoNRoVIA' HORTICULTURAL CRAFTSMEN` SINCE 1926 A Z U s A , C A December 24, 2009 827 E. Monrovia Place P.O. Box 1385 Azusa, CA 91702-1385 Francis Delach t9 q-3 j: Tel: 800-999-9321 213 E. Foothill Blvd. Azusa, CA 91702 CAIRO, G A 1579 GA Highway III South P.O. Box 390 Dear Fran, Cairo, GA 39828-0390 Thank you for your interest in purchasing water rights of Monrovia Growers. Our Tel: 800-342-6012 Board of Directors has met twice to review all offers. At yesterday's meeting they decided not to offer the water rights for sale to the public at this time. This DAYTON , o R decision was reached only after careful consideration of all the offers. 13455 S.E. Lafayette Highway Dayton, OR 97114-8416 If our plans change and we again consider sale to the public we will contact you. Tel: 800-666-9321 Thank you again for your interest. LA GRANGE , N C If there are any questions please contact me. 4588 Brothers Road P.O. Box 478 you, La Grange, NC 28551 Tel: 800-790-9194 / SPRINGFIELD, OH Miles R. Rosedale 4001 Moorefield Road Chief Executive Officer Springfield, OH 4.5502 Tel: 800-995-4.001 V I S A L I A , C A 32643 Road 196 P.O. Box 489 Woodlake, CA 93286-0489 Tel: 800-449-9321 • MAIN OFFICE : 827 E. Monrovia Place • P.O. Box 1385 •Azusa, CA 91702-1385 • Tel: 800-999-9321 • www.monrovia.com 083 F dir0 402 rtrAiif � Z .R r7x-4 S '}' S A 2'q ..�, 1 ` f EX Fk N d '�k 31'l 'W f "S„L fey °' }_ z 3 ,,,. s ',qia -�v'"Y'r g , ' 3 ".� 2 .,..._ ..". '. AZUSA TIGHT R 'h'ATER INFORMATIONAL ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD FROM: GEORGE MORROW, DIRECTOR OF UTILITIES DATE: JANUARY 25, 2010 SUBJECT: UPDATE ON CUSTOMER SERVICE—ANNUAL STATISTICS Azusa Light & Water Customer Service staff performs many tasks on a daily and/or weekly basis to provide seamless, consistent service to meet the needs of our community and city. Daily work must be completed each day with no work leftover since this work is typically in response to customer calls and office visits for new service or to ask questions about bills. Attached is a list of well-recognized daily processes and the quantities handled during the 2008-09 fiscal year. Key to our success is each employee's dedication and desire to provide the best service they can for all of our customers. Prepared by: Karen Vanca, Assistant Director-Customer Care & Solutions 084 LIGHT & WATER— Customer Service Fiscal Year 2008 - 2009 Annual Statistics: 31,403 Ultimate customers 429,830 Meters read Meters in service 4,365 Shut offs for non payment 16,551 Electric 48%pay same day reconnection 7,458 City water 36%pay next day reconnection 11,810 outside City water 16%moved out or foreclosed 35,819 Total 13,042 Total field visits (ons,offs, check reads,customer requests) 288,740 Bills mailed,excludes municipal bills and closing bills with credits 59,200 Online bills 95,140 Reminder notices mailed 24,910 Final notices mailed 48,830 Customer calls answered —9% Spanish-speaking, 91% English 9,292 Lobby customers assisted Payments received: 113,433, or 56 % Mailed-in and processed by a lockbox vendor 33,328, or 16 % Walk-in (check payments only) 25,800, or 13 % Manually process - drop box,multiples(several stubs, 1 check)and home banking 10,720, or 5 % Credit and Debit Card (Paymentus) 4,490, or 2% Web 6,230, or 3% IVR (automated over the phone) 10,487, or 5 % Online payments (online billing and payment) 9,055, or 5 % ACH (direct debit) 202,823 Total, excluding walk-in cash payments Automated phone system (IVR): 14,927 Calls handled during business hours; avoided over 80/day for CSRs 1,441 Calls handled after hours 3,394 Calls handled on weekend 19,762 Calls handled by automated system 4,933, or 16% Customers enrolled in online billing 595 Customers have signed up for new service online at 2TurnitOn 085 WATER SUPPLY STATUS UPDATE 1. Spreading grounds- The spreading grounds are currently gaining water at a rate of 3 feet per week. Prior to the current heavy rainfall the past week, the Spreading ground levels were dropping at .5 feet per. In December, the Spreading round water levels had been dropping at a rate of 4 feet per week before the rainfall of Dec 7 to 13. 2. Current rainfall.- at Pasadena Powerhouse December rainfall—4.73 inches January rainfall—7.80 to January 25 Overall the year to date rainfall is 14.41"vs. average of 9.97"— 145 % of avg. The past week, from January 17 to 21, heavy rainfalls occurred in Southern California and locally and are predicted for Tuesday night (12/26). 3. The precipitation of last week brought the statewide snowpack water content to 115%of average (18.30 inches) as opposed to 63% of average (9.70 inches) at this time last year. 4. Statewide some important reservoirs have markedly increased their accumulated storage percentages: • Lake Oroville now at 60% of 15 yr average vs. 45% last year • Shasta Reservoir is now at 78% of 15 yr average vs. 57% last year • Trinity Lake is now at 60% of 15 yr average vs. 57% last year • New Melones is now at 72% of 15 yr average vs. 69% last year 5. San Gabriel River inflow has increased as has local snow pack— Inflow: December ranged from 31 cfs to 1192 cfs to 48 cfs at end of Dec January following the heavy rains inflow increased to 833 cfs. 6. Comm. of Nine diverting 50 cfs to treatment plant and spreading. 7. Water Treatment Plant treated 5 MGD most days. 8. The average daily demand for December was 14.6 MG; January to date 14.5 MG Things are looking good, however the drought is far from over. January 25, 2010 IF do. AZ LI SA . CNT 6 ORiki INFORMATIONAL ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES DATE: JANUARY 25, 2010 SUBJECT: UPDATE ON LODI ENERGY CENTER (LEC) Work is continuing at a feverish pace to develop the contractual and financial documents necessary to move the project from the development phase to actual commitment/construction. The project is still awaiting issuance of a license to construct the Lodi Energy Center from the California Energy Commission (CEC). A significant milestone was reached on November 30, 2009 when the CEC published its Preliminary Staff Assessment. It is hoped that the CEC will formally approve the LEC license in late March or early April 2010. Participants will be required to execute two agreements: a Power Sales Agreement and a Project Management and Operating Agreement. The project manager is hoping to obtain approval of these documents by participants over the next 60 days in order to facilitate the issuance of bonds at the earliest possible time following receipt of CEC approvals. The primary objective of Azusa's involvement in the planned Lodi Energy Center is to facilitate the utility's eventual divestiture of all, or a portion, of its interest in the San Juan project. Black & Veatch is performing an evaluation of Azusa's planned participation in the project. They hope to have their report complete prior to the February Utility Board meeting. The project manager, Northern California Power Agency, has been meeting with the financial rating agencies to obtain a rating of the planned bonds for the project. Attached is a copy of a presentation given to the rating agencies. Prepared by: G. Morrow, Director of Utilities 086 `NC PA NO91.EON CA:1 11%1A POWER AZENCY Northern California Power Agency Financing the Lodi Energy Center 11111100. 11111410PIlie*° ..„:' - -1--,-11160 ttittiv.,. 44,,,_ 010PI 'fr*r. ---.1 il ‘0 to. , ', : -.'.:: -. Via` ':.r" Indenture Group A Credit Assessment Presentation December 2009 0 00 Presentation Participants /q,'NCPA Northern California Power Agency Jim Pope—General Manager Donna Stevener—CFO/Asst.Gen.Mgr.,Administrative Services Ken Speer—Asst.Gen.Mgr.,Generation Services Ed Warner—Project Manager,Lodi Energy Center* Silicon Valley Power Mike Pretto—Division Manager,Marketing,Analysis and Pricing City of Lodi Ken Weisel—Interim Director,Lodi Electric Utility* Blair King—City Manager* Jordan Ayers—Deputy City Manager and CFO* Public Financial Management Daniel Hartman—Financial Advisor,Managing Director Michael Berwanger—Financial Advisor,Senior Managing Consultant Goldman Sachs Jill Toporek—Underwriter,Managing Director Christopher Higgins—Underwriter, Vice President •-Participating Via Phone 00 CO Table of Contents NC PA NO1 TWERN CACI PNIA I MLR ASENCV I. Overview II. Lodi Energy Center Ill. LEC Competitiveness in Northern California IV. LEC Contract / Legal Framework V. Plan of Finance VI. LEC Indenture Group A is Well Positioned for an "A" Rating C) 00 cs l a) C, 0 41, 11 Z= 090 NC PA LEC will be a Valuable, Efficient Resource for the Region NOM ERN CALI'CR'IA PO'WLR ASENC'' LEC Strengths • LEC will be a critical base-load resource, providing reliable, cost-effective power to address long-term participant needs Value of ■ Size and technology will allow it to be the most efficient plant, that will be LEC Project economically dispatched before other gas-fired plants in the region • Net carbon reducing • Location of the facility has minimal transmission issues • Participants are highly rated essential service providers, most of which have Strong full rate setting ability Participant ■ O&M level expense of Participants Credit Quality ■ Strong "A" category or better ratings for majority of participants • 30% debt service step up provision • Liquidity in place to ensure payment Strong Legal — O&M reserve, 6 month debt service reserve, O&M step-up Security and Protections ■ Sum-sufficient rate covenant • Take-or-pay contracts • Seasoned and experienced management team ■ Experience undertaking multiple projects .4000100064.000010, ■ Project management team has combined 120 years of experience with other generation projects Overview 1 c.) i--s ,�!� Northern California Power Agency (NCPA) i'NCPA Developer/Owner I Operator A011-11.CA,.4.POWLR A5tINC Summary NCPA Members and Project Locations • Established in 1968 • Members • Associate Members IN Builds and operates jointly owned power projects: Geothermal Project — H droelectric Project#1 248.5 M A Hydroelectric Project Hy ( Redding * Combustion Turbine Project No.1 — Geothermal Project(220 MW) PlumasSierra • Combustion Turbine Project No.2 — Combustion Turbine Project#1 (125 MW) Biggs ruckee Donner Ukiah Gridley — Steam Injected Gas Turbine Project(49.9 MW) Roseville — Transmission Line ProjectsHealdsburg s, Lodi • Assists with gas,power,and water purchases: — Gas:Procuring services to schedule,balance, BART "Alameda Port of Oakland and supply up to 78,136 MMBtu/day and manage Palo Alto Turlock 5,409 MMBtu/day of pipeline capacity Santa Clara o sir tion — Power Purchases:Negotiating seasonal exchanges and arranging power pools — Water Purchases:Negotiates purchase of water Lompoc for additional hydroelectric generation • Represents members and communities interests before legislative regulatory bodies at local,county, state,and federal levels • Value of Joint Action:Best way to complete project Members and associate members serve a and navigate licensing and regulatory process population over 750,000 In aggregate,NCPA members managed 10,347 GWh of electricity in 2008. Overview 2 CD 1V NCPA Draws on the Expertise of Seasoned Utility Industry NCPA Professionals A N CAJF:P'.IA POWER A;:ENCV' Management Organization and Experience LEC Management • Jim Pope Serves as General Manager — Has been at NCPA over 6 years James Pope General Manager — Brings over 30 years of valuable industry experience • Organized under four business units: Ken Speer — Finance/Administrative Services Generation Service — Power Management — Legislative and Regulatory Donna Stevener Finance I Admin. Svcs. — Generation Services • Divisions are headed by professionals with many experience in the utilityindustryJane Cirrincione years of ex p Legislative & Regulatory — Ken Speer — 29 years — Donna Stevener — 27 years Don Dame — Jane Cirrincione — 22 years Business Development — Don Dame — 31 years — Dave Dockham — 27 years Dave Dockham Power Managment C) cms co Overview 3 Lodi Energy Center (LEC) . NCPA NOR1•-ERN CA,I,;'.PNIA POWER EiENC, Heat rate efficiency Project Statistics LEC Rendering results in $7/MWh Capacity: 280 MW net cost reductionEMIL _ versus Roseville ,,,t Energy Park natural Expected Heat Rate: 6,824 Btu/kWh " . " ` gas plant ' . 11°101:14 : ' : Expected Capacity Factor: 80% Expected Energy Cost: $67 per MW' +✓, `' " �!;: •• - ' Reductions in GHG: 20-50% for some Participants 1. • t..t.,• t'}- ' Rationale • NCPA's long term planning for members — Demonstrated need for 250 MW over 20 years — Replaces contracts for some NCPA members that were lost in Calpine bankruptcy • Participants need additional sources of economical and reliable energy • Project must be on line in 2012-2013 timeframe • Project will support base load and peaking demand • Efficiency in heat rate with marginal additional cost through upsizing Project and adding MID / CDWR O 'Assuming gas @$7/MMBtu botOverview 4 LEC Consists of 14 Different Participants Representing A4C Diverse Geographies and Sectors 1,011•+ERN C4.1%�RNIA POWER UENC, - LEC Project Participants Rating Generation Participant Project Participant (M / S / F) Entitlement Share Capacity Share Sector Indenture Group A Santa Clara Al/A/A 19.6% 54.9 MW Energy Lodi NR/A-/BBB+ 11.8 32.9 Energy Bay Area Rapid Transit District Aa3/AA+/AA 5.9 16.5 Transportation Ukiah NR/NR/NR 3.1 8.8 Energy Azusa' A2/A/NR 2.8 7.7 Energy Gridley NR/NR/NR 2.0 5.5 Energy Lompoc NR/NR/NR 2.0 5.5 Energy Power and Water Resources Pooling Authority' NR/NR/NR 2.0 5.5 Joint Energy Healdsburg NR/NR/NR 1.6 4.4 Energy Port of Oakland A1/A+/A+ 1.2 3.3 Transportation Plumas Sierra NR/NR/NR 0.8 2.2 Energy Biggs NR/NR/NR 0.4 1.1 Energy Indenture Group B California Department of Water Resources' Aa2/AAA/NR 23.5 65.9 Water Indenture Group C 100.0% 280.0 MW Not NCPA Members C5 co Overview 5 LEC is a Key Resource within Silicon Valley Power's ANC PA Generation Portfolio NOIR-ERN LA.t30tilA POWER 0.LENLY Importance of LEC to SVP Projected SVP Resources • Integral part of diversified resource portfolio 3,500 - - Improves resource certainty • Extremely competitive ownership option compared to reliance on 3,000 - Market/Undetermined future"market" purchases • Prepay gas through MSR creates systematic discount to market t? 2,500 Non -JPA • LEC operating plan integrates well with SVP's load shape 2 2,000 • Projected to represent over 10% of SVP's total system energy by 2013 1,500 JPA(Excluding LEC) SVP is a Strong Credit Behind LEC o 1,000 a • Lowest municipal rates in California • Strong cash reserves 500 City Owned • Demonstrated council commitment to required rate increases 0 — SVP's City Council approved a rate increase on Dec. 8, 2009 2010 2011 2012 2013 2014 2015 - 7%for each of the next 2 fiscal years(January 2010 and Average Rate Comparison (cents / kWh) — 2010 Est. January 2011) Residential Commercial Industrial • Well-positioned to meet RPS and CO2 regulations SVP 9.5 14.4 7.8 PG&E 18.7 19.0 13.0 SVP lower 49.0% 24.0% 28.0% Overview 6 CD CI LEC is an Important Project for the City of Lodi , NC PA NOM ERN CAJZAM.IA I'UW R 40ENC, Importance of LEC to City of Lodi Lodi Electric Utility's Resource Stack • City of Lodi involved in multiple aspects of the project 140 — City is owner of land •asking IReserv= — White Slough Water Pollution Control Facility is source of 120 eakiny I ReseryNCPACT, = water supply—LEC is a revenue source for wastewater utility NCPACT, Intermediate — Source of'obs i�e NCPASTic nmth� i 100 c A5fie MIMI • For Electric Utility, LEC is an important power source — Replacing 25 MW base load power contracts rolling off inIntermediate spring of 2012 2 80 Intermediate NCPA Hydro NCPA Hydro — Represents lowest cost gas generation—its high efficiency makes it competitive even if gas prices rise 60 Intermediate Intermediate Seattle Exchange Lodi Electric Utility is a Strong Credit Behind LEC 40 Seattle Exchange • Competitive rates, with proven willingness to increase as ime.L.Oad Base Load LEC necessary 20 Term Contracts • Strong political support : . Iden 1 L,at1 • Automatic energy cost adjustment mechanism 0 , ,'1''°"of • Strong liquidity MW Thru Spring 2012 MW As of Summer 2013 — Cash reserves 40% above target Average Rate Comparison (cents / kWh) — Targeting 30%further reserves increase by 2012 Residential Commercial Industrial System • Diverse customer base Lodi Electric Utility 18.0 17.1 9.6 15.6 — Top 10 customers account for less than 25% of revenue PG&E 18.7 17.9 13.6 17.4 — No single customer as much as 5% of revenue — 34% residential, 37% commercial and 29% industrial % Lodi lower 3.7% 4.5% 29.4% 10.3% • 55% of energy is"green." Over 20% is CEC-eligible" 0 Overview 7 CO V 0) C) C w O J aoi 098. LEC's Location, Technology and Infrastructure Make it the NCPA Ideal Combined Cycle Facility in Northern California 8097•FRN CALI,2P"ilA P W1F A,FAC' Overview Project Location ■ Capacity: ,. \_.,,— 280 MW(net) gas-fired, combined-cycle power plant » _____________. • Efficiency I Expected Heat Rate: 1 6,824 Btu/kWh (most efficient system available) • Location: „/? -. .,111 — 4.4 acre site adjacent to NCPA Combustion Turbine Project#2 (CTP#2), minimizing environmental impact ,'., i •-1 , 4 — Land owned by City of Lodi (Member) and leased to NCPA //0 lolk i,. . . / , Pflposed Plant Ste , . % 'intro — Adjacent to Lodi's White Slough Water Pollution Control r cl - 6' loot Facility (WPCF) "-,� • 9, • • Project Characteristics: \,' y i — Turbine: Siemens STG6-5000F " si • Incorporates fast start-up technology ' � i "'A:#.7,- Adopts the latest pollution mitigation technology `/yam✓ ..• • Infrastructure: �-•..00livi,.r*l. �J�7 ire-/9//4. � ,,,I, ez� — Gas Supply: New 2.7 mile pipeline parallel to existing w "`,`"' ''LL„, "" "' PG&E owned pipeline for CTP#2 1.11111101111111.11111111111.111111 II 4' — Water: From neighboring WPCF - -am mom - ,,.. — Transmission: -"peNN NIP c - Interconnect agreement with PG&E and CAISO ' - Will link to power grid through existing switchyard l • Commercial Operation Date: June 1, 2012 LEGEND I • NCPA will serve as owner and operator ® p dP�S�db•Pa*^�wweac }. xr` Co W co Lodi Energy Center 8 LEC's Efficient Technology is Based on Siemen's SGT6 ANCPA Proven Track Record /NM,-ERN C0.,I,.PYIA POWER AC EAU Technology Flex-PlantTM Rendering • Siemens design combined-cycle generating plant — Designed for intermediate to continuous operation — Capable of efficiencies exceeding 57% .�. — Extended Life Combustion Section Components •: ► " 4a — Requires relatively small plant footprint — Fast startup times fir_ — Low emissions — Greater Turndown Capability Use of SGT6 Turbines Fast Start-Up Technology • 198 units in service Features for Fast Start-up SIEMENS — 51 simple cycle r pe�.P — 147 combined cycle sY1media .,fcLi - .... . ,. _ - _Steam — Klamath Cogeneration (Oregon) -- - Turbine Gas Turbine Generator f� BENSON.Heat Recovery /Generatormo_ — Langley Gulch (Idaho) SGenerator : �. _P .r- - Elk River (Minnesota) ,,,� „ — a i eaaai a=' cenanrnts peMag tient nn Inlegedon of Existing Technologies Pa.If U..s. .„w 14.11 Pow Ne inn IE.wpKWm LEC will utilize fast start-up technology, allowing it to reach 100 MW operating capacity in 25 minutes and making it more versatile than traditional combined cycle plants. Q Lodi Energy Center 9 LEC Benefits from an Experienced Project Management NCPA Team NO414 ERN C4;1%7R%1A POWER A7ENt' Key Personnel Consultants • Ken Speer-Assistant General Manager Generation • Experience-combined over 30 projects in the state of CA Services, PE — CH2MHill — 29 years of experience - Managed 2 major power plants and Power Plant — Galati & Blek Construction Group for PG&E — Grenier and Associates - Managed -$500 million of plant upgrades for Duke Energy • Ed Warner- Project Manager Lodi Energy Center — 28 years of experience CI-112M H I LL - General Manager Calpine - Construction and Operations Ai" - Sutter Energy Center, Delta Energy Center, Los Medanos Energy Center • Mike DeBortoli - Project Engineer, PE GRENIER & ASSOCIATES, INC. — 14 years of experience ENVIRONMENTAL PLANNING.LICENSING&PERMITTING.REGULATORY COMPLIANCE - Project Engineer Sutter Projects for Calpine - O&M Manager for King City Power Plant • Joe Bittner- Project Superintendant Lodi Energy Center VA LAT 1 I B L E K L L P — 35 years of experience - Direct of Operations (Mirant)-3,500 MW of Power Plants • Vinnie Venethongkham - Environmental Manager — 15 years of experience - Plant Engineer Sutter Projects for Calpine - Environmental Manager for Sutter Projects Lodi Energy Center 10 0 r Summary of LEC Construction Costs L.czAc. Approximately 50% Costs of LEC costs have already been spent, Component Cost($mm) or locked-in through aterials contract provisions. Power Island(Cost Fixed) $148.5 Major Purchases(-10%Cost Fixed) 34.8 By time of financing, Bulk Materials-General Contractor 29.6 approximately 65% Spare Parts 2.5 of LEC costs will Labor and Services have been spent or Labor-General Contractor 59.4 locked-in. Professional Services 6.9 NCPA Labor 6.0 Construction Mgmt.-CBO&Environmental Compliance 10.0 (-3.3M Cost Fixed) PG&E Gas-Based on PG&E Estimate 8/2008 6.8 CAISO(Cost Fixed) 0.4 Sales Tax 15.6 Legal Cost 1.5 Siemens Long Term Service Agreement 1.5 Misc Fees 0.1 • ointment Cost Phase I and Phase II Cost(Cost Fixed) 18.2 Detailed Engineering(Cost Fixed) 7.0 General 26.5 Total Construction Cost $375.3 F"a Lodi Energy Center 11 Major Materials are Covered by the Contract with Siemens 4NCPA Which Includes Timing and Performance Guarantees NOi1-ERN POWER 4CENC'' Component Delivery Date Gas Turbine April 2011 Steam Turbine November 2011 Guaranteed HRSG April 2011 Delivery Dates Condenser July 2011 Distributed Control System November 2011 • If Siemens misses delivery dates, there are significant Liquidated Damages • 1 year after commercial operation date performance guarantees for: — Noise Level — Heat Rate Performance — Emissions Levels Including Start-Up Guarantees — Start-Up Time • 100% performance and payment bond t–+ Lodi Energy Center 12 CA) Infrastructure Agreements `,NCPA NUM ERN CA,I-CPNIA POMP.A;;EN'C'' • Agreement executed in August 2009 Interconnection ■ Allows for the interconnection to the CAISO/PG&E Systems • Total interconnection cost of$335,000 • Preliminary Application for gas supply submitted to PG&E in April 2008 Gas ■ Response to Preliminary Application for Gas Supply received in July 2008 Interconnection — 240 psi option at an estimated cost of$6.8 million • City of Lodi to supply 1,600 acre feet of water for$600 per acre foot on a take-or-pay agreement Water • MOU executed October 2009 • Gas supply up to the 50,000 MMBtu/day which is sufficient for LEC to operate at full load Fuel Supply ■ Gas Supplier will provide nomination (i.e. scheduling)and fuel balancing services Agreement ■ NCPA's preferred NAESB Base Contract plus Special Provisions was provided to prospective gas supplier/mgrs on December 11; responses are due back for consideration on January 11 • Lease agreement executed in 1996 for NCPA CT-2 Project-10 acres for 50 years — CT-2 lease payment$21,000 per/yr, LEC lease payment$40,000 per/yr, 10 year market adjustment • WorleyParsons is performing the detailed engineering — Expected 30% complete at time of bid (Bids typically go out at 8-10% complete) • NCPA is performing the major equipment procurement • TBD General Contract to perform construction — Perform and complete all of the work, and furnish all necessary labor, equipment, and materials in compliance with industry standards and applicable laws — 12 month warranty, maintenance bond, 100% performance and payment bonds Lodi Energy Center 13 Permitting Requirements and Status .NCPA I O311-:ERN CALI%=R'IA ROWER 4-MD' Permit Status San Joaquin Valley Air Pollution Control District • Available on San Joaquin Air District website Final Determination of Compliance (FDOC) ■ Letter received from US Fish and Wildlife Service (October Biology Habitat Conservation 22, 2009) Plan/Incidental Take Permit ■ Allows for complete mitigation of endangered species with all regulatory agencies • Underground Injection Well Permit ■ Final permit issued from EPA (October 16, 2009) Completed • _- Prevention of Significant Deterioration (PSD) Project can meet operating goals and stay under the 100 ton /year threshold Land Use Applicability for Gas Line II Airport Land Use Commission identifies gas line as an allowable use (July 2009) Department of Toxic Substances ■ DTSC No Further Action provided to the City of Lodi and Control (DTSC) No Further Action NCPA (November 2009) • Staff Assessment provided (November 30, 2009) • Hearings (January 2010) California Energy Commission (CEC) License ■ Proposed Decision provided to NPCA (February - in Progress March 2010) ■ Final decision (March -April 2010) NCPA anticipates a final CEC permit by March -April 2010 The Project has all permits in place except the CEC Final Decision and has no interveners at this point. E-` Lodi Energy Center 14 0 to Estimated Timeline for LEC Completion NCPA h011-ERN CALICP%IA POWER AGEACv' Project Timeline Milestone Date Detailed Engineering Contract Executed December 2008 Power Island Purchase Contract May 2009 CEC Staff Assessment Issued November 2009 CEC Final Decision April 2010 Financing Complete April 2010 Construction Commences May 2010 Combustion Turbine & HRSG On Site April 2011 Steam Turbine On Site November 2011 Plant Back Feed of 230 KV Power October 2011 Natural Gas Available January 2012 First Fire March 2012 Steam Blows April 2012 Commercial Operation Date June 1, 2012 N Lodi Energy Center 15 NC PA NORI AERN C4LI='_RYIA POWER AGENC Ill. LEC Competitiveness in Northern California 0 LEC will be the Most Efficient Gas-Fired Plant in Northern RIr' CPA California NOERN CAJ,7R4IA POWER AUUENC' Comparison of Local California Heat Rates1 Heat Rate 2008 Energy Plant Owner COD (Btu/kWh)2 Output(GWh) Walnut Energy Center TID 2005 7,822 1,578 Panoche Energy Center Energy Investors Fund 2009 7,815 N/A Marsh Landing Gen Station Mirant 2012 7,720 N/A Sutter Energy Center Calpine 2001 7,100 2,898 Willow Pass Generating Station Mirant 2012 7,053 N/A Cosumnes SMUD FA 2006 7,047 3,817 Los Medanos Energy Center Calpine 2001 7,025 3,064 Metcalf Calpine 2005 7,000 3.152 Delta Energy Center Calpine 2002 7,000 4,825 Colusa Generating Station PG&E 2010 6,950 N/A Gateway Generating Station PG&E 2009 6,940 N/A Proposed Lodi Energy Center NCPA 2012 6,824 2,5933 LEC's efficiency will make it among the Participants' most economic generating sources. 'Source:California Energy Commission staff 2 Based on Higher Heating Value or HHV of the fuel P.i 7 Maximum estimate co LEC Competitiveness in Northern California 16 Over the Past Five Years, LEC would be Dispatchable at or Nin CPA Below Peak Market Rates Over 90% of the Time NORI-ERN C4_I PNIA POWER ACEAC`' NP15 Peak Pricing versus LEC Marginal Cost ($/MWh)1 $160/MWh - NP15 Peak Pricing LEC Marginal Prices(Hypothetical) $140/MWh - $120/MWh - $100/MWh - 1\111411111\ko $80/MWh - $60/MWh 1�i rI $40/MWh - ' d � $20/MWh - $0/MWh ly Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Assumes 6,824 Btu/kWh heat rate for LEC marginal prices LEC Competitiveness in Northern California 17 LEC is Projected to Provide NPV Savings of $236 Million ,4CPA Over the Life of the Project Versus Market Power LEC fixed cost are LEC All-in Cost Versus Projected Market Value($/MWh)1 projected to average$18 per $140 - MWh. LEC Projected Carbon Costs --,LEC Fuel and Variable Costs $120 - smom LEC Fixed Costs i — —Projected Market Value i i t $100 - f w -- -- -- _-- e.- — e $80 0 `o 0 $60 0 U c Q $40 $20 $0 N 2012 2015 2018 2021 2024 2027 2030 2033 2036 2039 2042 Fes+ C, 'Included carbon tax assumptions for both LEC costs and market purchases LEC Competitiveness in Northern California 18 In Addition , LEC 's GHG Profile is Substantially Below Regional Peers / t1CPA ERN CALIFORNIA POWLR A..INCV • Most environmentally efficient gas-fired plant in region • Reduces Participant exposure to potential carbon taxes and CA regulatory action Potentially adding further economic advantage to the Project • Reduces overall emissions / carbon in California by replacing high GHG-emitting resources Comparison of Local California GHG Performance' GHG Performance Plant Owner (MtCO2/MWh) Marsh Landing Gen Station Mirant 0.409 Sutter Energy Center Calpine 0.377 Cosumnes SMUD FA 0.374 Willow Pass Generating Station Mirant 0.374 Metcalf Calpine 0.371 Delta Energy Center Calpine 0.371 Gateway Generating Station PG&E 0.369 Colusa Generating Station PG&E 0.369 Proposed Lodi Energy Center NCPA 0.361 ' Source: California Energy Commission staff LEC Competitiveness in Northern California 19 A1(ICPA NOR1''1RN CA:I-CRYIA FMK A'u1NCV' IV. LEC Contract / Legal Framework LEC Uses Well Proven Legal Structure with Strong flNCPCounterparties A AiI'..�P:IA POWER AENty Diagram of LEC Contractual Framework Engineering Contract Agreement for (WorleyParsons) Water Supply General Contractor Site Lease (Decided May/June) Agreement SIEMENS Gas Interconnection Power Island Contract A4CPA Agreement •.nx.xxx eauwamn rmvrx nrenn PI Facility Fuel Interconnection Agreement Agreement Power Sales Project Mgmt.and Agreement Operations Agreement LEC Contract / Legal Framework 20 1-4w NCPA has Established Three Separate Indenture Groups, NCPA lO9l"+LBNCA.I°2PYIAPOWL)FCLlC• Each Consisting of Different Project Participants NCPA Ownership Structure Indenture Group A Group A NCPA Proceeds Bonds Indenture Group B Proceeds NCPA LEC Project Group B NCPA Bonds NORTHERN CALIFORNIA POWER AGENCY Group C Capital MID Bonds Contribution Y I. E Ci fA a 2 .2 8 8 a ci H m o 0 0 0 • Cashflows are segregated by Indenture Group e O. o a § a —Only exception is common operating reserve for entire project • O&M step-up across Indenture Groups Group A Group B Group C • Debt service step-up only within Indenture A Participants' O&M Cal DWR O&M MID Group A Step Step D/S Step Up Up Up Group A Participants include:Santa Clara,Lodi,Bay Area Rapid Transit District,Ukiah,Azusa,Gridley,Lompoc,Power and Water Resources Pooling Authority,Healdsburg,Port of Oakland,Plumes Sierra,and Biggs 1"IL F-+ LEC Contract / Legal Framework 21 ►s)• Power Sales Agreement (PSA) Adheres to Traditional Form . NCPA and Structure Power Sales Agreement Summary Development/ Enforceability/ Operation and Governance Cashflows Maintenance Legal Provisions ■ Authorizes NCPA to ■ Creates 3 Indenture ■ Take-or-pay,hell-or- • Establishes flow of finance,construct, Groups high water contract funds for Project and operate,and maintain • Establishes Project ■ O&M level expense for each Indenture Group project Participant Committee Participants ■ Open-ended step-up • Authorizes NCPA as (PPC)and authorizes • Establishes Participant for O&M across project manager subcommittees rate covenant Indenture groups in • All output to ■ Participant voting event of Participant Participants rights commensurate failure to pay with Generation ■ Group A debt service Entitlement Shares step-up in event of a Group A Participant failure to pay Fr CJ' LEC Contract/Legal Framework 22 The PSA Provides Multiple Protections to Bondholders in / NCPA the Event of Participant O111LRN CACI �PNIA POWER A;ERC�' ■ Bondholder Protections Default Provisions • O&M step-up across Indenture Groups ■ Payment Default • 60 day O&M reserve across Indenture Groups — Default effective 30 days after notice of non- payment is issued and payment not received • 30% debt service step-up among Indenture Group A • Cure Period • 6 month maximum debt service reserve fund for — Failure to cure Payment Default within 30 days Indenture Group A results in reallocation of defaulting Participants power - Generation Entitlement Share lay-off - Indenture Group A - Indenture Group B & C - Default mitigation sale - Indenture Group A - Automatic allocation of remaining generation entitlement share in a step-up 1-a LEC Contract / Legal Framework 23 E-+ C) A 6 Month DSRF Provides Ample Coverage of Debt Service .NCPA in the Event of Non-Payment N031,EPN CA_I, P•.IA POMP.AZENCV Default Timing r Day 0 Day 30 Days 6 • NCPA sends is Payment Due ■ GES Lay-off Efforts Begin Billing for Current i • GES Default Mitigation Sales(If Needed) Statement for Month's Next Month's Expenses Expenses ■ NCPA Provides I a • Payment Due Written Notice of Within 30 Days Non-Payment Prior Month Beginning of Day 60 Day 121 Month ■ Payment Default • GES Step-up • Energy ■ O&M Exposure Begins for Delivered Step-up Indenture Group A 90 Days Between Non-Payment to Indenture Group A Step-Up I I LEC Contract / Legal Framework 24 , 4 With 30% Step-up, 5 Participants Account for 100% of the CPA Indenture Group A Generation Entitlement Share Application of 30%Step-Up Indenture Group A Share Applying 30%Step-Up Participant Rating Capacity Percentage Capacity Percentage Cumulative BART Aa3/AA+/AA 16.5 11% 21.5 14% 14% Port of Oakland A1/A+/A+ 3.3 2% 4.3 3% 17% Santa Clara Al/A/A 54.9 37% 71.4 48% 65% Azusa A2/A/NR 7.7 5% 10.0 7% 72% Lodi NR/A-/BBB+ 32.9 22% 42.8 29% 101% Lompoc NR/NR/NR 5.5 4% Healdsburg NR/NR/NR 4.4 3% Ukiah NR/NR/NR 8.8 6% Gridley NR/NR/NR 5.5 4% PWRPA NR/NR/NR 5.5 4% Plumas Sierra NR/NR/NR 2.2 1% Biggs NR/NR/NR 1.1 1% Total 148.3 100.0% 149.9 101.1% I—► I-1 00 LEC Contract/Legal Framework 25 NCPA will Operate LEC in Line with the Project /TNCPA 9fEflN = �: ,AlManagement and Operations Agreement Project Management and Operations Agreement PMOA Dictates Key Operational Compliance with Operating Approach Responsibilities Regulatory Oversight • NCPA responsible for • NCPA (an experienced power ■ Compliance with CEC licensing management, operation and plant operator) to operate plant, conditions maintenance of the Project including: • Compliance with air permits and • Directed by Participant Power dispatch other regulatory requirements Committee - Fuel procurement • Responsible for reporting on ■ Follow Prudent Utility Practice - Maintenance non-compliance and corrective measures - Budgeting and cost reporting — Billing and accounting M LEC Contract / Legal Framework 26 /44ICPA RII+ERN CAI ft":IA POWER ACENC' V. Plan of Finance 1 NI 0 LEC will be Financed from Three Separate Transactions NCPA ORNIA POWER WAND NCPA NCPA M Group A Bonds Group B /CaIDWR Group C Capital -$199 mm Bonds Contribution Proceeds -$88 mm -$88 mm Proceeds Proceeds ►/ LEC Construction Cost All three transactions are targeting financial close by week of April 26, 2010. Plan of Finance 27 1-+ N Indenture Group A Intends to Issue -$246 Million of Bonds *CPA to Finance its Share of LEC NONI,ERN \IA POWER AGENCY' Indenture Group A Sources and Uses Financing Timetable Sources Amount($mm) Event Date Par Amount $245.9 Development of PSA Summer 2009 Premium 4.5 Review of PSA by Participants Fall 2009 Total Proceeds $250.4 Credit Assessment Received Week of Jan. 4th Approval of PSA by NCPA Commission Jan. 14, 2010 Uses Participant Approval pproval Process Jan. - Mar. 2010 Project Fund $199.7 Deadline for Participant Approvals Week of Mar. 29th Debt Service Reserve Fund (6 Months) 7.9 CEC Final Decision Early Apr. 2010 O&M Fund 8.0 Post POS for Indenture Group A& B Week of Apr. 5th Capitalized Interest 32.3 Price Indenture Group A & B Bonds Week of April 19th Cost of Issuance 2.5 Close Indenture Group A & B Financing Week of April 26th Total Uses $250.4 Receive Contribution in Aid of Capital from MID Summary Statistics Week of April 26th • Maximum Annual Debt Service: $15.8 mm • Average Annual Debt Service: $15.3 mm • Average Life: 20.4 years • All-in TIC: 4.52% NCPA may consider issuing optimizing with Build America Bonds (BABs) depending on market conditions. Optimizing with BABs currently provides -$15 million PV savings to Indenture Group A. ►�` Plan of Finance 28 Y ' NCPA h Oil^EON CALI-_PNIA f'O'N!ft A_Lh C`' VI. LEC Indenture Group A is Well Positioned for an "A" Rating N . . / LEC's Project Value, Solid Legal Structure, and Participants NCPA Strong Credit Quality Warrant a High A Rating NO11 EPN CA,If;P',IA POWER 43LRC'' Indenture Group A Strengths • LEC will be a critical base-load resource, providing reliable, cost-effective power to address long-term Participant needs Value of ■ Size and technology will allow it to be the most efficient plant, thus LEC Project economically dispatched before other gas-fired plants in the region • Net carbon reducing • Location of the facility has minimal transmission issues • Participants are highly rated essential service providers, most of which have Strong full rate setting ability Participant • O&M level expense of Participants Credit Quality ■ With step-up, participants rated A category or better • 30% debt service step up provision Strong Legal • Liquidity in place to ensure payment Security and — O&M reserve, debt service reserve, O&M step-up Protections ■ Sum-sufficient rate covenant • Take-or-pay contracts • Seasoned and experienced management team • Experience undertaking multiple projects • Project management team has combined 120 years of experience with other generation projects F�+ LEC Indenture Group A is Well Positioned for an "A" Rating 29 General Statement of Distribution Principles & Disclaimer . 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MORROW, DIRECTOR OF UTILITIES DATE: JANUARY 25, 2010 SUBJECT: APPA ANNUAL CONFERENCE The American Public Power Association's Annual Conference is scheduled for June 19-23, 2010 in Orlando, FL. Attached is some information on the conference for Utility Board members who might desire attending. Prepared by: G. Morrow, Director of Utilities 126 American Public Power Association - Events -2010 National Conference Page 1 of 4 PuR>:�C Power 41) TooicS A-Z Contact Us Site MBD i�AA A350ciAhOn Aestarnmsuirr 1. ) LOGIN: PASSWORD: Pronmot:rig energy 0 �' Forest Password efJkktent v and ' *I _. ca, Public Power Directory Vendor Directory C on se rvat ion L..,,J3l,.e/I util,ty Edusdt un r C!our,„ Hewcroom ; Carear_it Ps.nch c. N<-„ui<tterc'. •1 $p,,,,,,,,11,1,,,, L.-.i ton' I Op tIitprd+ I feP)RS I1 Slio Pormer Deaeiopmeri(DCCD) ' t,iseron_s Programs Homs'Events a Fern l®Snare In This Section Thanks to our 2010 Conference Sponsors! . Events Calendar , , • EventsArchiv� `` ” DIAMOND (Presentationshotos) i Bondi SPONSORS Photos) ▪ Sponsor f " rice Advetise Bank ofAmerica''ry ▪ International 4 ,* , ` A, Merrill _-_,_•_-•__-- Lynch Reaistrgilena of -i4'+1 t)tinc til. awn eet nt os J U N E 19-23, 2010 1 eintxerg, initiative Genzer ORLANDO. FLORIDA & .# Pembroke, PC. dSew%ow Pwn ro.e, APPA National Conference&Public Power Expo carrmuieys.rceIan June 19-23,2010 More about the APPA National Orlando World Center Marriott Conference Orlando,FL Reoister Online 4. About the APPA National Conference ReoislrationForm[pdfj ENERGY' Day of Giving&Volunteer The National Conference is APPA's premier annual event,attracting mayors,city council members,elected and appointed utility board Hotel Bt' I}1E[K members,general managers and senior utility executives.Over1,500 individuals active in the public power industry aend ChisPublic Power ExoExec? up event held each year in June. General Sessions A-• sAic C:,-pa,:) The conference features sessions on the topics facing the electric utility industry and public power,covering all facets of utility Breakout Sessions. governance and operations.It's a great tool for those in the e Trusted in industry to learn about trends,changes,and new ideas,as well as SP1FGhi. & vegetation ways to develop practical programs to benefit customers. Guest Activities&Tours MC DIARMII) management APPA's National Conference is also the Association's annual major $oecial Events since 1933 J policy-setting meeting,where the APPA Board of Directors and Legislative and Resolutions Committee convene to approve policy Sponsorship Opportunities PLATINUM 1 objectives for the coming year. Visit Orlando f SPONSORS �`0Public Power Day of Giving Contact Us . Friday,June 18, 2010 MIISOFT ).--:WRIGHT Utility Solutions 'i -,;Ayet.rwt,,, - The 2010 National Conference will also mark the 3rd annual Public Power Day Q(Ari,Ty of Giving,a community service opportunity for conference attendees and giving their guests to give back to the local community. el os, 1.800.882.3218 Volunteers at this year's Day of Giving will help needy families and individuals wrighttree.com In central Florida by working with The Russell Home; Helping Others Make the 127 http://www.appanet.org/events/annualeventdetail.cfm?ItemNumber=26074&sn.ItemNumb... 1/20/2010 American Public Power Association - Events - 2010 National Conference Page 2 of 4 Effort;Quest; and A Brush with Kindness. Learn more about the Public-Power Qe_yQf Giving,the projects we will be working with,and sign up to volunteer, STANDARD Find out how your organization can help support the Public Power Day of Giving by becoming a &I'OOR'S Day of Giving Partner, GOLD Conference Agenda SPONSORS Friday,3une 18 7:30 a.m. •4:30 p.m.Public Power Day of Giving Details \( (ti POWER Saturday,June 19 8:30 a.m. -4:30 p.m. Pre-Conference Seminars Details coming soon! Alantic • Running a Small Utility: Key Management and Financial Considerations for Managers and Boards lirIHincr'rlr)l Groiip • Effective Strategic Planning for Utility Boards(a.m.) BLACK8VEATCH r .+p:dd ,. • Fostering Effective Board/Management Relations(p.m.) • Understanding the Economic Advantages of a Utility Energy Burns& Efficiency Program(a.m.) McDonnell siw i +e98 • Selling Energy Efficiency to Your Community and Your Customers (P.m.) Sunday,June 20 CUSTOMIZED 8:30 a.m.-4:30 p.m.Pre-Conference Seminars Details coining soon! ENERGY SOLUTIONS • Introduction to Enterprise Risk Management for Public Power Managers and Board Members 4101"."'N NISC �,�,.•.�.oma,>,�. • Smart Grid 101: What Utility Boards and Managers Need to Know (a.m.) • Smart Grid and Customer Rates: New Rate Designs for Our High PNC Tech Future(p.m.) • Economic Development: Positioning Your Community for �� „ Post- Recession Economic Growth 2-4 p.m. Legislative&Resolutions Committee Meeting 6- 7:30 p.m. Welcoming Reception atails '�•"' •, nwtwoak. r Monday,June 21 7-8:15 a.m. PowerPAC Breakfast Details 8- 10 a.m. Opening General Session Details J� Public Power: Energy and Environmental Leadership in the Next Inc ErrerjyAvllrenfy' Decade U ki U, Mark Crisson, President&CEO,APPA ENERGY Behind the Headlines:The Challenges Facing Our Nation and Our Energy Efficiency S. World Renewable Energy Claire Shipman, Senior National Correspondent,ABC News "— 11 a.m. -Noon Breakout Sessions petal's SILVER SPONSORS • Smart Grid 101: What Could it Mean to Your Community? • Public Power is Good for Business:Your Utility's Role in the Future of Main Street • Energy Efficiency Solutions to Help Customers in Difficult Economic iD"1b""` Times • New Cyber Security Regulations(And How They Will Impact Your "• c04.i.,,,c^M Utility) • Lighting Efficiency: Your Best ROI Opportunities • Load Forecasting In Uncertain Times 128 http://www,appanet.org/events/annualeventdetail.cfm?ItemNumber=26074&sn.ItemNumb... 1/20/2010 American Public Power Association - Events- 2010 National Conference Page 3 of 4 • Reality Check:The Impact of Technology,Permitting, Financing and Regulations on the Future of Geologic Sequestration(CCS)of CO2 from Power Plants MEDIA • Federal Legislative Agenda:Climate,Energy,Tax and Other i SPONSORS Initiatives 1:30-2:30 p.m. Breakout Sessions Details • Smart Grid Case Studies:An Update Electric Energy • A New View on Energy Efficiency:What Utility Boards Need to Know ONL INE.com About the Economics of Saving Energy • Are Energy Efficiency Building Codes in Your Future? • RP3: Maximizing Your Investment in Your Consumer-Owned Utility • How AMI and Smart Grid Technologies Will Impact Delivery of Utility Customer Services • Renewable Energy Technologies: Public Power Case Studies • Fuel Crisis:The Impacts on Public Power as Our Industry Turns to Natural Gas as the Fuel of the Future • The Rating Agencies Highlight Credit Concerns 2:45-4 p.m. General Session Details Bulk Power Reliability: A New Strategic Direction for NERC and What It Means for Public Power Gerry Cauley,CEO,North American Electric Reliability Corporation Concurrent General Session Details Have You Tweeted Today?Using Social Media Tools to Advance Your Utility's Goals Matthew Burks,Manager of Mass-Markets,E Source Chris Gent,Vice President,Communications,Kissimmee Utility Authority 4- 6 p.m. Public Power Expo Opening Reception Details Tuesday,June 22 8- 10 a.m. Presentation of Awards and General Session Details What America is Really Thinking: Understanding and Communicating with Your Customers and Constituents Frank Luntz,political strategist and pollster,ABC News,NBC News, PBS,the BBC,Newsweek,U.S. News and World Report,and The Wall Street Journal 10- 11 a.m. Public Power Expo Coffee Break Detail 11 a.m. -Noon Breakout Sessions Details • Smart Grid,Dumb Grid or Electric Grid?:The Truth Behind the Hype • Understanding New Approaches to Retail Rate Design:A Primer for Boards and Council Members • Explaining Climate Change and Energy Efficiency Issues to Customers • How to Use APPA's DEED Program to Benefit Your Utility • EMRI Progress Report&Outlook • Customer-Owned Generation: Blessing,Curse or just Business as Usual? • Understanding the EPA's Regulations for Controlling&Permitting CO2 for the Power Sector • Community Development: Preparing for the Coming Recovery 129 http://www.appanet.org/events/annualeventdetail.cfin?ltemNumber=26074&sn.ItemN um b... 1/20/2010