HomeMy WebLinkAboutMinutes - February 26, 2018 - UBCITY OF AZUSA
MINUTES OF THE REGULAR MEETING
OF THE AZUSA UTILITY BOARD/CITY COUNCIL
MONDAY, FEBRUARY 26, 2018 – 6:30 P.M.
Chairman: Uriel E. Macias
Vice Chairman: Robert Gonzales
Board Member: Joseph R. Rocha
Board Member: Edward J. Alvarez
Board Member: Angel A. Carrillo
Secretary: Jeffrey Lawrence Cornejo, Jr.
The Utility Board/City Council of the City of Azusa met in regular session, at the above date and time, in the Azusa Light
and Water (ALW) Conference Room, located at 729 North Azusa Avenue, Azusa, California.
Vice Chair Gonzales called the meeting to order at 6:30 P.M.
Pledge to the flag was led by Board Member Carrillo.
ROLL CALL: Roll call was taken by Secretary Cornejo.
PRESENT: BOARD MEMBERS: GONZALES, ROCHA, CARRILLO
ABSENT: BOARD MEMBERS: MACIAS, ALVAREZ (arrived at 6:57 p.m.)
ALSO PRESENT
Elected Officials: Secretary Cornejo
City Attorney: Jeff Ferre
Staff Members: Interim Utilities Director Lehr, Assistant Director Customer Care Solutions Kalscheuer, Assistant
Director of Electric Operations Langit, Assistant Director of Water Operations Macias, Utilities Communications and
Environment Programs Specialist Sagun, Utility Programs Specialist Reid, Senior Management Analyst Lacasella,
Utilities Administrative and Financial Services Manager Tran, and Chief Deputy City Clerk Garcia.
A. PUBLIC PARTICIPATION
None
B. UTILITIES DIRECTOR COMMENTS
None
C. UTILITY BOARD MEMBER COMMENTS
In response to Board Member Carrillo's question about residents leasing solar panels and participating in Utilities
programs, Interim Utilities Director Lehr advised that generally Utilities staff does not recommend residents lease solar
panels because of the issue of whether the lease is conveyed with the property when ownership of the property changes.
He will review the issue and provide additional information to the Board in March and contact the resident as soon as
possible.
PAGE 2 – 02/26/2018
D. CONSENT CALENDAR
Moved by Board Member Carrillo, seconded by Board Member Rocha, to approve the Consent Calendar by the following
vote of the Board:
AYES: BOARD MEMBERS: GONZALES, ROCHA, CARRILLO
NOES: BOARD MEMBERS: NONE
ABSENT: BOARD MEMBERS: MACIAS, ALVAREZ
ABSTAIN: BOARD MEMBERS: NONE
1. The minutes of the regular meeting of January 22, 2018 were approved as written.
E. SCHEDULED ITEMS
None
F. STAFF REPORTS/COMMUNICATIONS
1. Fiscal Year 2017-2018 Second Quarter Budget Reports for Electric and Water Funds
Utilities Administrative and Financial Services Manager Tran reported the Water Fund is tracking with the budget. Retail
sales show an increase of 6.7% in comparison to the prior year. The debt coverage ratio is 1.32 with the minimum
requirement of 1.25. Staff will continue to monitor for compliance. The Water Fund has negative cash flow of $1.6
million due to construction encumbrances of $1.4 million, which is also reflected in a 5.8% decrease of cash reserves to
$26.2 million. The Electric Fund has positive cash flow of $1.8 million. Revenues are tracking at 54% of budget and
operating expenses at 52% of budget. Electric sales show an increase of 1.3% in comparison to the prior year. The debt
coverage ratio of 10.19 exceeds the 1.25 minimum.
2. Planned Procurement of Required System, Local, and Flexible Resource Adequacy Capacity for Calendar Year
2019
Interim Utilities Director Lehr reported that ALW will need to procure about 50 MW of capacity to meet ISO
requirements for calendar year 2019. ALW sources some capacity from resources it owns or contracts with; however,
these resources will cover only a portion of the required capacity. The remaining capacity has to be purchased from the
market. Staff expects to purchase 25 MW of system capacity, 25 MW of combined system and local capacity, and 20
MW of flexible capacity.
3. Notification of Potential Procurement of SP15 Energy Hedge for 3rd Quarter 2018
Interim Utilities Director Lehr advised that ALW is adequately resourced for both capacity and energy. For the summer
months of June through September, staff typically procures energy hedge to mitigate unexpected price changes resulting
from unexpected generation and/or transmission outages. Staff expects to procure no more than 15 MW for the summer
months and will provide a report to the Board of its purchase.
4. Water Supply Update
Interim Utilities Director Lehr reported mandatory statewide water restrictions may be reinstated by April if the lack of
precipitation continues. Rainfall is currently 2.88 inches, only 19% of the normal seasonal rainfall. The state snow pack
is extremely low at 20% of normal. The Main San Gabriel (water) Basin is approximately 11 feet above the all-time low,
and remains very low for operations. The three reservoirs on the San Gabriel River are at 24% capacity, which is working
volume rather than water intended for release. Water conservation measures are in effect for Azusa.
In reply to a Board Member's query, Assistant Director of Water Operations Macias explained that the reservoir working
volume is the minimum amount of water retained in the reservoirs to prevent debris from clogging valves and intakes.
PAGE 3 – 02/26/2018
G. VERBAL COMMUNICATIONS
1. General Policy and Regulatory Updates
Interim Utilities Director Lehr advised that SB 901 will require every electric utility to have detailed plans of preparation
for and spotting of wildfires and operation of power lines. Such plans may include proactive power line de-energization
and load shedding before the power lines are affected by fire. AB 813 pertains to the ISO attempting to expand into other
western states. There is some concern that rates for new RTO transmission lines will be billed to all loads within the
RTO, regardless of their usage, which could be costly to load serving entities such as ALW. Expansion of the RTO could
also affect utilities embedded and interconnected within the ISO in other ways. CATO's white paper recommends
privatization of four federal power marketing agencies and TVA. The transmission network and assets owned by Western
Area Power Administration (WAPA) would be privatized under this recommendation. Hoover Power Plant operated by
WAPA would not be privatized under the whitepaper proposed scenario (ALW contracted for share of capacity and
energy from Hoover). SB 1110 pertains to protection of potentially “stranded” conventional power plants should SB100
pass. ALW owns approximately 2.79% of Lodi, which could benefit from passage of SB 1110.
In reply to Board Members' questions, Interim Utilities Director Lehr indicated SCPPA's comments regarding AB 813
will likely be coordinated with the comments of NCPA and CMUA. The City Council may wish to monitor AB 813 and
provide a letter of support for SB 1110.
Board Member Alvarez joined the meeting at 6:57 p.m.
Interim City Manager Penman reported that Human Resources (HR) issued a Request for Proposals to recruit a new
Utilities Director and received one response in the amount of $49,000. HR will handle the recruitment and utilize external
agencies to identify candidates.
H. CLOSED SESSION
None
I. ADJOURNMENT
The meeting was adjourned by consensus of the Utility Board.
TIME OF ADJOURNMENT: 7:00 P.M.
__________________________________________
CITY CLERK/SECRETARY