HomeMy WebLinkAboutMin 11-29-94MINUTES OF THE REGUI.~d~ ADJOU~ED HEETING OF THE CITY
COUNCIL OF THE CITY OF UKIAH - NOVEMBER 29, 1994
The City Council convened in a Regular Adjourned Meeting, of which
the agenda was legally noticed and posted, at 4:00 p.m., in the
Council Chambers of the Civic Center, 300 Seminary Avenue. Roll
was taken and the following Councilmembers were present: Mastin
(arrived at 4:19 p.m.), Malone, Wattenburger, Shoemaker, and Mayor
Schneiter. Absent: None. Staff present: Public Utilities
Director Barnes, Electrical Supervisor Bartolomei, Finance Director
Elton, Assistant to the City Manager Harris, City Attorney Rapport,
City Manager Rough, Electrical Distribution Engineer Wobig, and
Recording Secretary Yoast.
AUDIENCE COHNENTS ON NON-AGENDA ITEMS
None.
NEW BUSINESS
3a. Workshop with Discussion Concerning Electric Utility
Operations and Issues
i ·
Northern California Power Agency Orientation Regarding
Direct Process and Risk Assessment Study (Retail
Wheeling)
City Manager explained benefits City can derive from hearing from
guests from NCPA.
Mayor Schneiter introduced Mike McDonald who talked about what is
going on with electric, government deregulation, understand the
initiatives and prepare for the coming competition. Competition
has been increasing in the last couple years.
Proposal of the PUC and what it might mean to the City of Ukiah and
how they can prepare for the competition.
Ken Malore, Consultant of R.W. Beck, presented slides illustrating
history of the electrical industry to this date. He explained the
retail wheeling that the PUC is proposing will be similar to what
the telephone industry has implemented due to de-regulation. He
explained the current and upcoming technology in power generation.
He explained the operation of where retail wheeling already exists.
He explained the California PUC Proposal which will be available to
larger industrial uses by January 1, 1996, and to all other
customers by January 1, 2002. The use of subsidies in retail
wheeling was discussed. He explained Performance Based Pricing
Stranded investment is another issue that needs to be addressed.
He explained models from California Public Utilities: POOLCO - SCE
& SDG&E; OPCO - Enron; Efficient Direct Access - Professor Hogan;
Bilateral Contracts - PG&E.
Discussion ensued relative to the pooling concept and the many ways
it could work, and who would be the winners.
Mr. Malore explained if this legislation is passed, it will no
doubt end up in court which will delay implementation.
Environmentalists and small interest groups are not in favor of
retail wheeling. It was noted the individual consumer may benefit
because of the competition, but the stockholders will be hurt.
Energy services will be very competitive because even the small
producers guy can provide service.
Discussion ensued regarding Competitive Utility Structure:
Generation - Wholesale competition, Transmission - Regulated,,
Distribution Wires - Regulated, Commodity - Retail competition,
Energy Services - Commercial competition.
163
Discussion ensued regarding preparing for competition; as to
customers, finances, pricing structure, resources, strategies,
technology, integrated resource planning, political and economic
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164
demand side management and review of projects for future
competition.
Mr. Malore conducted a slide presentation regarding sound business
practices, efficient operations, public power advantages, public
power disadvantages, preparing for the future, and survival.
Mike McDonald, NCPA General Manager, explained what they are doing
at NCPA to help Ukiah prepare for competition, regarding reduction
of costs, marketing, debt restructuring and management, addressing
WAPA concerns, and conducting information workshops for members. He
explained a study for Ukiah will be finished soon and will be
presented by John Springer.
Mayor Schneiter stated that NCPA has gone a long way and made
excellent progress in the last year looking after NCPA and member
City's investment.
Gary Green, District Manager, PG&E. explained how his company is
going through similar processes.
Recess: 5:27 p.m.
Reconvened: 5:46 p.m.
3aii. Undergrounding of Utilities - Review and Recommendations
Electric Utility Director Barnes showed slides which illustrated
status of electrical undergrounding projects and their costs. He
reported positive and negatives of the undergrounding process.
A copy of the January 1988 underground project schedule was
distributed and discussion ensued relative to various current
costs involved.
It was noted that it is City policy that all new development is
required to underground utilities.
Discussion ensued regarding undergrounding procedures and
practices.
Gary Green, PG&E, reported PG&E switched two years ago to
padmounted transformers aboveground which are cheaper and easier
to operate. He explained PG&E only goes underground when they
physically don't have room.
3aiv. Electric Distribution Operation - Review and Recommendations
The Public Utility Director presented slides on the Electric
Distribution Operation.
PCB's were discussed, and the process to comply with regulations
was discussed.
Discussion followed relative to using reserve funds to accelerate
this project, in-house construction versus contracted labor, and
transformer replacement and the use of reclosers. It was noted that
Ukiah has changed from a small community to a medium sized
community in terms of an electrical utility.
The vault at the Gobbi Substation which needs work done to it was
discussed. Various vault and pole locations around town were shown
and the Electric Utility Supervisor described what areas were being
served as well as any inherent problems with each area.
The Public Utility Director noted his appreciation for the
opportunity to be able to explain the electric plant system as well
as the goals they are trying to reach in the system.
3aiii. Lake Mendocino Hydroelectric Plant Operations
The Public Utility Director conducted a slide presentation
pertaining to the hydro plant and operations.
The Public Utility Director explained Table 1-1, Cost of Service,
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November 29, 1994
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and Table 1-2, Percent Contribution, Table 1-3, and Annual Revenue
Requirements.
Mayor Schneiter addressed the issue of depreciation and discussion
ensued regarding the City's forthcoming fixed asset valuation and
inventory, which would better define depreciation, and the amount
of inventory which has been fully depreciated.
Discussion ensued regarding fund balances and detailed
depreciation, debt service and fixed cost of the hydro plant.
The Finance Director indicated we will have the results of fixed
asset study by the time the next budget is considered.
3av. Revenues Requirements and Generation
The City Manager explained Table 5-1. He reported on the potential
of cost reductions. He noted the General Government reimbursable
credit needs to be addressed, as to a more precise formula, after
a three month study is conducted.
Discussion ensued concerning
reimbursement issues.
various general government
Recess - 8:12 p.m.
Reconvened - 8:18 p.m.
Mayor Schneiter requested that after tonight's meeting if the
Council has any questions or suggestions, to please write them down
and turn into the City Manager for a future report.
The City Attorney explained customer payment policies are
contained in many various resolutions and other documents and noted
they could be cleaned up and consolidated into one document.
3avi. Customer Rate Paying Policies - Review and Recommendations
The Public Utility Director reported on the Alternate 1 schedule
listed on Page 33 of the agenda packet.
Councilmember Shoemaker noted in the past we have set our citizens
up for a small increase annually rather than one large rate at a
time. He suggested we go for just the increase this year and look
at future rate adjustments when future studies are completed.
The City Manager noted it would be prudent to address unresolved
issues such as the NCPA risk assessment study, before setting long
term goals. He noted the date proposed for a public hearing to
consider a rate increase will be January 18, 1995.
3b. Possible City Council Direction Regarding Issues Reviewed and
Discussed During Workshop
It was noted this will be addressed at a future time.
There being no further business, the meeting was adjourned at 8:51
p.m.
CCMIN.182
en Yoast, R~ording Secretary
Approved by CatChy McKay, City Clerk
165
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November 29, 1994
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