Pre-Meeting Q & A from the Board - March 6, 2018

The following questions have been posed by Commissioners prior to the scheduled Board Meeting on March 6, 2018.  Staff responses are included below, and are sorted by Agenda topic.

Customer Policy Revisions (FAHEY)

Regarding proposed policy revisions provided by Commissioner(s).  Thank you for your review and feedback. Suggestions will be incorporated into the draft to be discussed at the April 3rd Board meeting.

Consent Calendar

CONTRACTS

WESCO Distribution (PRICE)

Why does EWEB need submersible transformers? Does this mean underwater applications? Please cite a typical application in which a transformer of this rating and type would be used. These transformers are used in underground applications. They are usually placed in sidewalk vaults with grating over them. In most cases, pad-mount transformers are placed on/near the property edges unless there is no room on the property (zero-lot line). We have approximately 2220 single ph and 50 three phase submersible transforms installed.

WorleyParsons (PRICE)

How much of this microgrid asset will be allocated to the water division? This contract is for the Electric portion only, thus the equipment will be classified as an Electric asset. Output from the battery will be able to power the emergency water system in a system loss of power.

Correspondence

2018 Power Market, Budget Hedging and Generation Update (ACKERMAN)

Please provide more specificity with regard to the statement "Natural gas prices saw a modest improvement in 2017." Please define RMC.  This is a good point. Generally, an "improvement" in natural gas prices refers to higher prices, which is industry standard. Commissioner Simpson is correct that an improvement can mean different things to different stakeholders, but the reference here to higher prices as an "improvement" is because higher gas prices are generally associated with higher market power prices. As EWEB is long in the market, we benefit from the higher power prices.

The acronym RMC refers to the Risk Management Committee. The power Risk Management Committee (RMC), as established by Board Policy SD8..."established to protect the organization from financial instability and unacceptable risk relating to market price volatility and counterparty performance, and to provide reasonable assurance that contribution margin, as established in the Long Term Financial Plan, required to support Board strategic financial direction and policies, is achieved."

EL-1 Capital Report for Q4, 2017 (DAMEWOOD)

Please provide more information regarding how the complexities associated with communication and control projects were allowed to affect the ability to complete Water capital projects. Will taking a step back in 2018 result in more incomplete work?  The comment on the EL-1 Report was related to our Type 1 Pump Station Work. Over the last several years, EWEB has ramped up efforts to upgrade its water pump stations serving the upper level pressure zones in the South Hills. Each of these pump stations (there are over 30) need to communicate with another pump station, a reservoir, and/or Headquarters for the water system to function. These pump stations were built as discrete projects over time as development occurred. As a result, numerous different control and communication methods were used and each pump station has unique attributes.

Staff initially created a simple upgrade plan focused on modernizing the control systems to allow for a new SCADA system to be installed, but once construction on the first stations started, it became apparent that the piece meal nature and antiquated equipment made upgrading the stations challenging. It was found that many of the stations had electrical systems that were not in compliance with current applicable codes, mechanical systems that were not operating in an efficient manner, and communication systems that were no longer serviceable. In 2017, this led to significant scope creep which in turn led to a need to reduce the work that the group was able to complete.

Due to the complexity of work, it is apparent that a more in depth long term plan that includes a comprehensive look at how the system should operate to meet the objectives of the 2015 Water Master Plan, and make the stations safe for staff to perform maintenance and operations tasks is necessary. Along with this plan will be the creation of new and modern design standards for the pump stations. Both of these documents will allow operations and engineering to more efficiently implement projects with a common goal and will allow work to happen through streamlined processes. The goal in 2018 is to complete the long term plan, standards and program design. While taking a step back in 2018 will delay some work, in the long term EWEB will be able to complete more work with a solid plan and standards to follow.

Electric System Outage Reduction Opportunities (PRICE)

What is the "neutral program"? Aside from reduced damage from fallen tree limbs, how will elimination of the crossarms substantially reduce outages? What benefit(s) does EWEB loose by reconfiguration to a single phase topology? The neutral program was a 5 year program driven by a PUC requirement to add neutrals to distribution lines that did not have them, which brings the lines up to current code. We completed the program last year. Single Phase reconfiguration of the lines means the change from two energized phases laying horizontally to a configuration with one energized phase in vertical alignment with the neutral. This will cut the exposure of energized conductors to trees/animals in half.

Replacement of EWEB Open Access Transmission Tariff (OATT) (ACKERMAN)

How many transmission customers does EWEB currently have? Does the number of transmission customers vary over time? If so, please characterize the volatility in customer count. How much annual revenue is collected from this wholesale customer class? EWEB has three transmission customers: SUB, UofO, and PGE. These transmission customers have been stable over time. They provided EWEB with about $300,000 in 2017, and this amount is included in our contribution margin.