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HomeMy WebLinkAbout2008-05-07 Utilities Advisory Commission Summary Minutes Utilities Advisory Commission Minutes Approved on: June 4, 2008 Page 1 of 4 FINAL UTILITIES ADVISORY COMMISSION MINUTES OF MAY 7, 2008 CALL TO ORDER Chairman Rosenbaum called to order at 12:05 P.M. the scheduled meeting of the Utilities Advisory Commission (UAC). Present: Commissioners George Bechtel, Dexter Dawes, John Melton, Marilyn Keller, and Dick Rosenbaum Absent: Council Liaison Yiaway Yeh ORAL COMMUNICATIONS Resident, Bryan Long encouraged the Commission to accelerate efforts to move to carbon neutrality, indicating that this action is of higher priority than keeping utility rates low. He encouraged more action on renewables and suggested that programs such as REAP and energy efficiency programs can be used to help customers offset increases in energy bills resulting from the efforts to achieve carbon neutrality. APPROVAL OF THE MINUTES The minutes from the April 2, 2008, were unanimously approved. AGENDA REVIEW No changes to the agenda were requested. REPORT FROM COMMISSION MEETINGS/EVENTS There were no reports. UTILITIES DIRECTOR REPORT Utilities Director Valerie Fong gave the following updates California Oregon Transmission Project (COTP) The Commission conceptually approved a temporary lay-off of the City’s 51 MW share of the COTP in April. The transaction is expected to be for a 15 year duration with three existing owners of COTP – Modesto Irrigation District, Turlock Irrigation District, and Sacramento Municipal Utility District. The lay-off agreement is expected to be effective in August 2008 with an end date of July 2023. It is planned to go to the Council for approval on July 14, 2008. Budget Amendment Ordinance As a result of increasing commodities cost for our electric, gas and water funds, staff will be requesting a BAO for all resource supply budgets to cover the maximum expected costs through the end of this fiscal year. Staff is still working on the numbers for the request, but rising commodities costs are clearly having an impact on the budget. Hydro Condition Update Utilities Advisory Commission Minutes Approved on: June 4, 2008 Page 2 of 4 Northern Sierra precipitation is at 87% of average to date. The forecast of runoff is below average with expected below average hydro electric generation Hetch Hetchy Tour The Water Education Fund, in conjunction with BAWSCA and the SFPUC is planning a Hetch Hetchy 3-day tour from July 23 through July 25. A few of us attended last year’s tour, and we would say that it was well worth our time. PaloAltoGreenstock On May 17, Utilities will be hosting a PaloAltoGreen event, “PaloAltoGreenstock,” at Mitchell Park starting at 11 and ending at 3. The Mayor will be the emcee for the event which celebrates the PAGreen customers. NCPA Federal Policy Conference Jane Ratchye, Debbie Lloyd, Council Member Yeh and Fong attended the NCPA Policy Conference in Washington DC last month. The Palo Alto team met with various members of the Federal Energy Regulatory Commission, Congressional members and/or their staffs, and the Western Area Power Administration. The key messages conveyed were the need to cap costs paid by power and water customers for security and system operation and maintenance of the Central Valley Project, the need to carefully shape a cap-and trade emissions program that produces emissions reductions in the most cost- effective manner, and the benefits of extending tax credits and favorable bond financing for renewable projects. Subsequent to the completion of Fong’s report, Commissioner Dawes asked about the Fiber to the Home (FTTH) project and whether the UAC would have a chance to review. Fong answered that ASD has been involved in the project, and utilities has only had some limited technical input. Commissioner Bechtel asked who in ASD has been the main FTTH contact. Fong said that Joe Saccio, under Lalo Perez, has been the City’s contact person. UNFINISHED BUSINESS NONE NEW BUSINESS ITEM 1 and 2: ACTION ITEM: Review of 2008-09 Proposed Capital Budget and Review of 2008-09 Proposed Operating Budget Electric Fong gave an overview of the Fiscal Year 2008/09 budget request including highlighting changes in revenues and reserves. Fong also described major fund expenditures and capital improvement projects, all of which combined to result in a 14% proposed rate increase and an increase in sales revenues of $13.2 million. Commissioner Dawes inquired about the participation of AT&T in underground districts. Staff responded that they intended to send a letter to the CPUC regarding continuing AT&T participation in the underground districts. Staff also indicated the short-term future of the program was not in jeopardy because several districts had been identified that would likely be acceptable to AT&T. Utilities Advisory Commission Minutes Approved on: June 4, 2008 Page 3 of 4 Commissioner Rosenbaum asked whether the rebuilding of Underground District 17 and 22 was delaying the implementation of new underground districts. Staff indicated that the rebuilding of the old underground districts was expected due to the facilities reaching the end of their lives and noted that this would not impact the funding for new underground districts. Commissioner Rosenbaum also asked whether the Electric Utility was padmounting equipment when areas are being rebuilt. Staff responded that padmounted equipment was being used whenever possible. In congested areas such as downtown there is rarely room to install padmounted equipment but whenever possible it is being used. Commissioner Keller asked if utilities could help support the schools and other large customers by increasing staff to provide more assistance on bills and energy efficiency. Fong pointed out that there are three key account staff people and a half-time marketing engineer who do work with the large customers to assist them in efficiency areas, but the customers must allocate resources internally to tell us what their needs are. Virginia Waik is dedicated to helping the schools. Commissioner Keller said more focus and staff would benefit everyone and be financially beneficial to the utility. Fong said that staff have had several requests for new positions turned down, as there is a balance between all activities of the utility and requirements to keep rates reasonable. Commissioner Rosenbaum asked about energy audits—if these are available to schools. Commissioner Keller pointed out that schools don’t have staff to even understand their bills. She mentioned that Stanford saved money by having an energy manager. Joyce Kinnear, Utility Marketing Services Manager, responded that energy audits are available and have been done for the schools. Commissioner Melton asked a question regarding the increases for the Worker’s Compensation that now show the actual expenditure for the Fund. He noted that Utility workers have more risk associated with their jobs, so the costs for Workers Compensation are higher that other departments. Commissioner Melton asked about utility site security enhancements listed under Infrastructure Reliability. Paul Dornell, Assistant Director-Operations responded that the enhancements were related to homeland security and that the department was looking into physical improvements at the substations such as lighting, fencing and motion detectors. Fiber Optics Fong gave an overview of the Fiber Optics Fund which will be established beginning the 0809 Fiscal Year. Fong noted that staff was planning to seek Council approval of guidelines for reserves for the Fiber Fund. Fong also reiterated the repayment by the Fiber Fund of the original loan of $1.9 million from the Electric Fund to establish the Fiber business. Commissioners Dawes and Melton asked where they could see the repayment to the Electric Fund in the budget document. Rosemary Ralston, Sr. Utilities Administrator, directed him to the page on reserve balances and described how the figure was calculated. That figure includes the repayment of the loan from the Electric Fund. Commissioner Dawes asked if it included interest. Ralston answered that it did not. Gas Fong gave an overview of the Fiscal Year 2008/09 budget request including highlighting changes in revenues and reserves. Fong also described major fund expenditures and capital improvement projects, all of which combined to result in a 7.1% proposed rate increase and an increase in sales revenues of $4.2 million. Utilities Advisory Commission Minutes Approved on: June 4, 2008 Page 4 of 4 Commissioner Melton asked about the PaloAltoGreen biogas program. He asked if the biogas would come from cows. Fong said that it would. Melton asked about the timeline to begin marketing the program. Kinnear responded that staff is developing the timeline and will have to get back to the UAC on when the program will be marketed to customers. Commissioner Bechtel asked if the GMR projects would be reduced to a lower level of replacement in the FY11-12 fiscal year. Roger Cwiak, Water-Gas-Wastewater Engineering Manager, stated the GMR project would be at a reduced project construction level starting in FY12-13. Wastewater Collection Fong gave an overview of the Fiscal Year 2008/09 budget request including highlighting changes in revenues and reserves. Fong also described major fund expenditures and capital improvement projects, and reminded the Commission that there was no proposed increase in rates for this fund. Water Fong gave an overview of the Fiscal Year 2008/09 budget request including highlighting changes in revenues and reserves. Fong also described major fund expenditures and capital improvement projects, all of which combined to result in a 8% proposed rate increase and an increase in sales revenues of $2 million. Commissioner Dawes asked a question regarding the 2002 Revenue Bonds for the Water and the Gas funds. Specifically, he wanted to know the remaining balances and it they were separated from the NCPA bonds. He asked where this information appeared in the budget document. Ralston stated that the budget document only shows the annual funding for the debt service. The Comprehensive Annual Financial Report (CAFR) shows the accounting for the bond financing. Ralston showed him the specific page called Proprietary Funds: Statement of Revenues, Expenses, and Changes in Net Assets. The commissioners were promised that more detailed information on Revenue Bonds (Note 7) and NCPA Bonds (Note 15) would be sent to them. Bechtel moved approval of the Proposed Operating Budget for FY 2008-09 and for the Proposed Capital Budget for FY-2008-09. Melton seconded the motion. Vote was 4-0 with Keller who had to depart shortly before the vote was taken, absent. Chair Rosenbaum reminded the Commission that one action to address at the next Commission meeting will be the topics for the joint Council/Commission meeting in July. Chair Rosenbaum also noted that he will miss the July joint meeting, however, he will pre-meet with the Mayor and Vice Mayor in preparation for the joint meeting. Chair Rosenbaum confirmed that there will be at least three members of the UAC at July’s joint meeting with the Council (Melton, Bechtel (if no successor has been appointed), and Dawes). Keller was not present for this tabulation. The next schedule meeting is set for June 4. Meeting adjourned at 1:45 P.M. Respectfully submitted, Marites Ward City of Palo Alto Utilities