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HomeMy WebLinkAboutMinutes - July 22, 2013 - UB > x R 4 � g °a.'''� � A H4""�' Y y .3/4" `4.1.= • AZUSA LIGHT A'RATER CITY OF AZUSA MINUTES OF THE REGULAR MEETING OF THE UTILITY BOARD/CITY COUNCIL MONDAY,JULY 22,2013—6:30 P.M. The Utility Board/City Council of the City of Azusa met in regular session, at the above date and time, at the Azusa Light and Water(AL&W) Conference Room, located at 729 N. Azusa Avenue, Azusa, California. Vice -Chairman Gonzales called the meeting to order. Call to Order Pledge to the flag was lead by Boardmember Edward Alvarez. Flag Salute ROLL CALL Roll Call PRESENT: BOARD MEMBERS: GONZALES, CARRILLO, ALVAREZ, ROCHA ABSENT: BOARD MEMBERS: MACIAS ALSO PRESENT Also Present City Attorney Ferre,City Manager Makshanoff, Director of Public Works/Assistant City Manager Haes, Utilities Director Morrow, Police Lieutenant Chavez, Assistant Director of Electric Operations Langit, Assistant Director of Water Operations Anderson, Assistant Director Customer Care & Solutions Kalscheuer, Assistant Director of Resource Management Lehr, Accounting Executive/Public Benefits Reid, City Clerk Cornejo, Assistant/Deputy City Clerk Hernandez. PUBLIC PARTICIPATION Pub Part None given UTILITIES DIRECTOR COMMENTS Director's Comments Utilities Director Morrow welcomed all to the meeting; he informed the Board that staff is preparing to send out Request For Proposals(RFP)for the Smart Grid Project. UTILITIES BOARD COMMENTS Board Members Board Member Rocha addressed the meeting thanking Utilities Director Morrow and his staff for the Comments information they provided at a recent concerts in the park event regarding the current water drought. Vice-Chairman Gonzales addressed the meeting requesting that the water sprinklers in the planters of Sierra Madre and San Gabriel be repaired as the sprinkler heads are damaged;City Manager responded that they will look into it and direct staff to follow same conservation rules as the rest of the public. The CONSENT CALENDAR consisting of Item D-1,was approved by motion of Board Member Carrillo, Consent seconded by Board Member Rocha, and *carried. Calendar 1.The minutes of the regular meeting of June 24, 2013 were approved as written. Min appvd SCHEDULED ITEMS Sched Items Annual Water Rights Leasing Transactions. Ratification of Annual Water Utilities Director Morrow addressed the item stating that staff has negotiated additional water right lease Rights Leasing transactions with California Domestic Water Company and Sunny Slope Water Company for FY2012-13 Transactions water year;an arrangement was also negotiated to obtain water rights from Miller Coors,under the current contract they provide water back to AL&W to offset what is sold to them during the year;the total income of all the leases is about$2 million for the year, which is consistent with the budget that supports capital programs for the Water Department;these are fast moving transactions that require the Board's ratification. Moved by Boardmember Carrillo,seconded by Boardmember Alvarez and*carried to ratify the execution of water rights lease agreements with California Domestic Water Company,Sunny Slope Water Company, and Miller Coors. Participation in the California Home Energy Renovation Opportunity(HERO) Program. Home Energy Renovation Utilities Director Morrow presented the HERO program explaining that state legislation signed two bills Opportunity into law, which created the funding of Property Assessed Clean Energy(PACE) Projects for the HERO (HERO) program; the program allows property owners of designated areas, who are willing to enter into an Program agreement, to do water/energy efficiency improvements and various installations of renewable energy sources including electric vehicle charging; the HERO program was established by Western Riverside Council of Governments; it has been a successful program that is now being extended to every City and County in California;a number of entities in Los Angeles County(L.A.Co.)that have expressed interest in participating; the program was launched in December 2011, for residential and December 2012, for commercial entities;there are 150,000 products and services that qualify;this program also creates social benefits i.e.creates and supports local jobs,increases property values,saves energy and reduces emissions and green house gasses; a loan is made from the available funds, and the property owner pays it with interest through the tax bill; he presented an eligibility list of the projects, stating that since the program launched in December 2011,they have assisted 6,419 homes and created 1,183 jobs;the public has been receptive of the program,and over 9,000 applications have been filed;L.A.Co. is currently going through judicial validation of the program, which should be finalized by December, 2013. Dustin Reilich,Director of Municipal Development for the California HERO Program,addressed the Board D. Re il ich, explaining that there is$181 million of approved financing,they currently fund $10 million on a monthly Director HERO basis and $260 million worth of projects have been approved;the program has been extended to the San Program, Gabriel Valley,currently 20 cities have signed;the program goes through a validation process as security to Coments the bond investors to make sure everything has been vetted out properly; HERO has a contractor's sales team that reaches out to contractors that are licensed bonded and insured;contractors hired by residents and commercial properties can apply and be registered as an accepted contractor; currently 1,056 contractors registered. Discussion was held regarding the interest being tax deductible, interest rates are 5.95% to 8.25% Discussion depending on the life of the product, $19,000 is the average loan amount, 30%of the projects have been solar energy and 70% are all of the other energy efficiency programs, typical amortization is 20 years although some go to the use life of the product,Azusa residents can tentatively apply December 2013,or `-- early January 2014, after the validation process, there is no risk for the City as it is only opting into the program to make it available for residents and allow HERO to issue and be the bond conduit; HERO has a 07/22/2013 PAGE TWO Marketing department that will work with Cities to tailor their marketing needs; L.A. Co. is behind this program, they have their own PACE projects on the commercial side and are considering opting for the HERO program for the residential,residents can repay the loan sooner if they wish and/or the balance of the loan goes with the property;whoever takes advantage of those efficiencies would actually pay for that bill long term, unless mortgages that are under Fannie Mae and Freddie Mac that require to be paid off it will not transfer. Boardmember Carrillo offered a resolution entitled Reso Adopting HERO A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA, CALIFORNIA, Program CONSENTING TO THE INCLUSION OF PROPERTIES WITHIN THE CITY'S JURISDICTION IN THE CALIFORNIA HERO PROGRAM TO FINANCE DISTRIBUTED GENERATION RENEWABLE ENERGY SOURCES, ENERGY AND WATER EFFICIENCY IMPROVEMENTS AND ELECTRIC VEHICLE CHARGING INFRASTRUCTURE AND APPROVING THE AMENDMENT TO A CERTAIN JOINT POWERS AGREEMENT RELATED THERETO. Moved by Boardmember Carrillo,seconded by Boardmember Rocha and carried,to waive further reading and adopt Resolution No. 13-052 by the following vote of the Board/Council: AYES: BOARD/COUNCIL: GONZALES, CARRILLO, ALVAREZ,ROCHA NOES: BOARD/COUNCIL: NONE ABSENT: BOARD/COUNCIL: MACIAS "Ice Energy"Thermal Cooling for the Azusa City Library. Ice Energy Thermal Utilities Director Morrow addressed the item stating that staff has been working with Ice Thermal Storage Cooling for Technology since February 2010; installations have been made at various city facilities; the technology City Library freezes water at night and thaws it during the day to discharge the cooling in the storage medium area;this provides energy for the cooling system during the night,which is less expensive and readily available;the main A/C unit at the Library is a 30 ton 1950 equipment that has created various problems and needs to be replaced, this can be done with four Ice Bear units; these units are in stock; once the permits have been issued,they can be installed in two weeks;AL&W has a contract via SCPPA for the Ice Bear technology, the cost for the four units is $126,000 including installation; they will be strategically located; the replacement of the A/C unit was not previously considered since there were plans for a new Library building, if a new facility is built,the Ice Bears can be moved to the new location. Discussion was held regarding the Ice Bear technology being used since the 1990s, the Library already Discussion having this system in place for the office area; the need for better A/C as the Library is one of the designated cooling center for residents. Moved by Boardmember Alvarez, seconded by Boardmember Carrillo and *carried to Approve the installation of an Ice Thermal Energy Storage Cooling system for the Azusa City Library;and to amend the FY 2013-14 electric fund budget in amount not-to-exceed $150,000 to pay for this proposed capital improvement project. August 26, 2013 Utility Board Schedule Meeting. August Meeting It was consensus of the Board to cancel the Utility Board Regular Scheduled Meeting of August 26,2013. Canceled STAFF REPORTS/COMMUNICATIONS Solar Partnership �-- Solar Partnership Program Update. Program 07/22/2013 PAGE THREE Accounting Executive/Public Benefits Coordinator Reid gave an update on the Solar Partnership Program, explaining that the Governor approved the Million Senate Bill 1 (SB 1) in 2006, as the Solar Roofs Initiative;the bill was later expanded to the California Solar Initiative(CSI)and has since been modified to become the current Energy Commission's New Solar Homes Partnership(NSHP);Azusa's state wide share of the SB1 Solar budget for 2007-2017 is approximately $327,100/year; to date 453 KW solar has been installed throughout Azusa that has resulted in $1.3 million in rebates; due to the overwhelming success and the unprecedented response to the partnership program, the entire FY2013-14 budget has been committed and has a waiting list of approximately 30 applicants for FY2014-15; the program will be updated in the future to improve the value of the program to the utility of the existing electricity production efficiency of the equipment. Water Supply Update. Water Supply Update Utilities Director Morrow addressed the item stating that there has been no improvement in the water supply; Canyon Basin Levels continue to drop, no water flowing into the river; AL&W Department was able to get some water from the dams,but they are down to the minimum,just enough to keep the Filtration Plant running; the San Gabriel Valley Municipal Water District pipe line that comes to Azusa will be available until October 2013, it was originally planned to be out of service at the end of July 2013, for repairs; the Watermaster is trying to assess all the producers in the basin to gather funds to buy water, which could be costly;they want to start water procurement earlier this year,so they need to generate funds; this would benefit Azusa. Update on Azusa Renewable Portfolio Standard(RPS). Renewable Portfolio Assistant Director of Resource Management Lehr gave an update on RPS,stating that SBX1 2,a California Standards State Law,implemented requirements of various procurements resources by all California Utilities that are public and investor owned; in June 12, 2013, the California Energy Commissioner (CEC) adopted regulations for the Public Owned Utilities (POU) that were self regulated; as a result AL&W procured renewable contracts to be CEC certified; however the request to include Hoover as a RPS was rejected ; contracts that were implemented and signed before 2010, will not be counted as newly implemented contracts, they will be given some status as historic; the CEC recognized these contracts as "counted in full," meaning that they satisfy part of the requirements; AL&W can account for this energy, bring it forward, and partially satisfy compliance; this will be good for this compliance due to the historic carry over, and AL&W will be able to take some into the next compliance period; SBX1 2 states in part that "Renewable generation has to be purchased only in cases when there is a gap between demand otherwise energy coming from different resources contracted by utility,"AL&W currently does not have this gap;this gap may be created in 2014, and after 2017, as we divest out of San Juan and will have need for replacement energy;the new regulations will become effective October 2013,they have to go through the statue for processing, and there will be several steps before they take effect; the grandfathering and the carry over pertain to the current contracts, Garnet Wind, Solano County Wind,MWD Small Hydro, and SGVMWD Small Hydro,which are at least 20 year contracts,their performance has been satisfactory in serving and are good for several more years; AL&W was able to secure two renewable contracts through SCPPA for solar generation, deliveries will begin 2015; Cherry Valley Solar and Adelanto Solar, are currently under review through SCPPA and may be considered for the future; Azusa Hydro is under the exploratory phase. San Juan Update on San Juan Divestiture Project. Divestiture Project Update Utilities Director Morrow gave an update on San Juan Divestiture Project regarding a strategic objective to divest Azusa's interest from San Juan;the Memorandum ofUnderstanding(MOU)allows transferring from the San Juan power to Associated Municipal Power System from Utah;before the MOU was finalized,the project stalled due to the Environmental Protection Agency(EPA)requiring to upgrade the environmental �-- systems; during the recent coal mine fire at the plant there were no interested investors; as a result 07/22/2013 PAGE FOUR negotiations with EPA related to the environmental improvement,the shut down of units 2 and 3 is planned by the end of 2017, 1 and 4 will be kept running; Azusa's interest is invested in unit 3, hence there is nothing to sell and will be out at the end of 2017;only two agencies in California, including AL&W,were opting out of coal and were working on a deal;additional cities expressed interest and are currently negotiating to walk away by the end of 2017; it is a complex process that will require several environmental approvals in order to avoid future problems; opting out is a smart decision, but the cities are also looking at a fair price or fair terms;not having San Juan at the end of 2017,will be cost effective,as AL&W has already invested in Lodi Energy Center and renewable projects. Discussion was held regarding Lodi replacing a quarter of San Juan,Lodi is 7.8 mega watts;San Juan is 30, they are both base loads,about a quarter of San Juan will be replaced by renewable energy;a considerable amount of energy was marketed to Arizona and New Mexico,and not sent to California;AL&W will"walk away"from $14 million per year from San Juan, which is half of the power supply budget. Adjourn Moved by Boardmember Carrillo, seconded by Boardmember Rocha and *carried to adjourn. TIME OF ADJOURNMENT: 7:25 P.M. /•r/ 11W- r! c + :4' NEXT RESOLUTION NO. 13-053. * Indicates Chairman Macias was absent. limmr 07/22/2013 PAGE FIVE