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2013-09-04 ERC MinutesMINUTES OF THE REGULAR AD HOC ADVISORY COMMITTEE ON ELECTRIC RATES MEETING HELD SEPTEMBER 4, 2013, IN THE COUNCIL CHAMBER OF CITY HALL LOCATED AT 4305 SANTA FE AVENUE, VERNON, CALIFORNIA ________________________________________________ MEMBERS PRESENT: Peter Corselli, Mark Whitworth, Stan Stosel and Robert Gutterman MEMBERS ABSENT: Greg N. Longstreet and Martin Perez City Council Members in attendance were asked to excuse themselves from the Council Chamber as there was not a quorum to convene the Regular Ad Hoc Advisory Committee on Electric Rates Meeting. After their departure, an informal discussion was held. At 8:55 a.m., sufficient members of the Ad Hoc Advisory Committee on Electric Rates were present; City Council Members reentered the meeting. Vice Chairperson Corselli called the meeting to order. The Interim City Clerk announced that there are no changes to the agenda. PUBLIC COMMENT Interim City Clerk Dana Reed announced that this was time allotted for public comment and inquired whether anyone in the audience wished to address the Committee. Bill Fraser of Pabco Paper expressed his concerns over the change in electrical rates. He opined that the increase in the electric rates was not communicated and consequently there was not an opportunity to plan for the additional cost. The invoicing was conducted after the fact. Member Gutterman requested that staff address Fraser’s concerns. His understanding is that electric rates were scheduled to increase July 1, 2013, and this increase is reflected in the August invoice. Director of Light and Power Carlos Fandino confirmed and further added that the Renewable Portfolio Standards (“RPS”) Pass- through is reflected in the August billing. Flyers were sent to Ad Hoc Advisory Committee on Electric Rates September 4, 2013 Regular Meeting Minutes Page 2 of 4 all customers. Notification was provided during the May 23, 2013, Committee meeting as well as several City Council meetings. MINUTES Minutes of the Special Ad Hoc Advisory Committee on Electric Rates Meeting held May 23, 2013, are received and filed. INFORMATIONAL ITEMS – NO ACTION REQUIRED 1. Renewable Portfolio Standard (“RPS”) updates. a. RPS Cost Limitation Plan: Light and Power Staff is currently developing a RPS cost limitation policy for the protection of the City’s ratepayers. b. Biomethane Deliveries: Update on the status of biomethane deliveries since RPS certification of the Malburg Generating Station (“MGS”). c. Historical Biomethane Cost: Update on the treatment of historical biomethane cost prior to MGS certification. Staff requested that biomethane deliverables and historical biomethane costs be tabled due to lack of information. 2. Tehachapi Project Update: Overview of the current issues and projects within the region. Director of Light and Power Carlos Fandino introduced Charles Vaughan of FloDesign Wind Turbine Corp, soon be Ogin, Inc. Vaughan reported on wind energy as a means to meet renewable energy requirement. He presented on deployment challenges for utility-scale wind turbines, and presented FloDesign Wind Turbine’s smaller scale design. Vaughan presented on the designs benefits and technology. In response to Vice Chairperson Corselli’s inquiry on inactive turbines, Vaughan reasoned that those turbines potentially have reached the end of their useful life and repair or removal costs might be too high. In response to Member Gutterman, Vaughan advised that the turbine is designed to produce less noise than conventional designs. Statistical data to support the argument is forthcoming. In further response to Member Gutterman, Vaughan Ad Hoc Advisory Committee on Electric Rates September 4, 2013 Regular Meeting Minutes Page 3 of 4 advised that generally wind turbines have an automatic shut down during high winds. It’s a design criterion for all wind turbines. He advised that the safety shut off is not normally seen in California, wind speeds are generally good. In response to Member Whitworth, Vaughan advised that the company’s goal is to site the turbines in urban locations and tap into a distribution network, but that the current focus is the California repowering market and the California green field projects. In further response to Member Whitworth, Vaughan advised that it takes approximately 5 days to install the first turbine; economies of scale would minimize the time as more are installed. In the future, the company anticipates that specialized truck will facilitate part of the installation. FloDesign Wind Turbines are currently in Massachusetts and California. The target is to have more than 500 units installed by 2015. Member Whitworth thanked Vaughan for sharing the information. Member Gutterman requested an update on the Tehachapi Project. Fandino advised that the wind speeds continue to be monitored and data is still being collected. Environmental reporting and permitting have ceased until the City decides on a project direction. Member Gutterman recalled that there was a parallel project that the City was going to piggyback of their process. Fandino advised that the North Sky River project was up and running and reported on the project. Fandino confirmed for Member Gutterman that a wind project is feasible. 3. Electric Rates Update: Updates on electric rate changes and other cost impacts proposed by surrounding utilities. Data comparing the electric cost from various utilities for commercial users was presented. In response to Vice Chairperson Corselli’s inquiry on Southern California Edison’s (“SCE”) rate increase, Finance Director William Fox advised that the data is collected by the Los Angeles Department of Water and Power (“LADWP”) for Southern Ad Hoc Advisory Committee on Electric Rates September 4, 2013 Regular Meeting Minutes Page 4 of 4 California Public Power Authority (“SCPPA”). He opined that the increase could be a result of a rate or seasonal change. In response to Member Stosel’s inquiry on the effects of the San Onofre Nuclear Generating Station (“SONGS”) shut down on SCE rates, Fox advised that the costs have not been passed down to the customers as yet. In response to Vice Chairperson Corselli, Fox advised that electric rates will fluctuate. It is important to continually track information on a monthly basis and to control costs in order to ensure Vernon’s cost remain competitive. The data presented is indicative of the electric cost at a specific point in time. New information will be presented so that the change over time can be reflected. Vernon’s concern is to remain within the same range. Interim City Clerk Dana Reed reopened for additional public comment. There was no response With no further business, at 9:32 a.m., it was moved by Whitworth and seconded by Gutterman, to adjourn the meeting. Motion carried, 4-0. ________________________ Greg Longstreet Chairperson ATTEST: ______________________________ Ana Barcia Deputy City Clerk