Pre-Meeting Q & A from the Board - August 7, 2018
The following questions have been posed by Commissioners prior to the scheduled Board Meeting on August 7, 2018. Staff responses are included below, and are sorted by Agenda topic.
Quarterly Strategic & Operational Report for Q2 2018
Financial Report (BARTON) - I note that Information Services has spent about 68% of budget, whereas all other groups are on track with spending roughly 50% or less of budget with 50% of the year having gone by. What is the root cause of that situation? Was it planned or unexpected? Does the Cayenta contract feed into that situation? Canceling the CIS replacement project resulted in shifting $400,000 of non-labor costs from Capital to Information Services (IS) Operations & Maintenance in June. Based upon changing priorities, CIO Barton is monitoring the IS budget closely and will determine in Q3 or Q4 if a contingency budget transfer is necessary.
June 2018 Generation YTD Report (ACKERMAN) - Please provide an acronym key for units and column headers on page 60. Definitions for the acronyms are as follows, this information will also appear in the Glossary of future Quarterly Reports.
AF: Availability Factor. Multiplied by 100, this factor indicates the percentage of time that the generating units were available for operation.
FOF: Forced Outage Factor. Multiplied by 100, this factor indicates the percentage of time that the generating units were forced offline due to an unplanned event.
GCF: Gross Capacity Factor. Multiplied by 100, this factor indicates the percentage of megawatt hours generated relative to the maximum number of megawatt hours that could have been generated if the generating unit had been operating continuously at full capacity.
GOF: Gross Output Factor. Multiplied by 100, this factor indicates the percentage of megawatt hours generated relative to the maximum number of megawatt hours that could have been generated if the generating unit had been operating at full capacity when available to generate.
The full names of the generating units are: Carmen-Smith unit 1 & 2; Trail Bridge; Leaburg unit 1 & 2; Walterville; Stone Creek, International Paper, Western Generation Agency (this is the name of the intergovernmental entity formed by EWEB and Clatskanie PUD); Harvest Wind and Foot Creek.
Electric Line Tree and Vegetation Management (PRICE) - What caused the maintenance to get behind in March? Was there an extra cost associated with the catch up in May? Varying terrain can cause different rates of trimming. In February and March we were trimming in heavy climb areas, which slows crews down as they cannot work from bucket trucks. Other months were truck-based trimming and in May we did the Carmen transmission line, which added 17 miles relatively quickly. While there are monthly ups and downs in line miles completed, we are on track per the averages miles completed and no extra costs are being incurred.
Source Protection, Water Quality and Public Safety (DAMEWOOD) - What was the cost to add the additional capability to test for cyanotoxins? I applaud the decision as global warming is likely to cause more and more of these harmful outbreaks and this measure cuts down on the time it takes to get valuable results! The cost of the ELISA (type of equipment being used) cyanotoxin testing equipment was about $10,000. Staff is currently undergoing equipment set up and training on how to properly run the tests. Once trained, we should be able to obtain same day results.
Customer Response Metrics (FAHEY) - What is Customer Service doing to improve call answer speed and reduce abandonment rates? In April, additional customer contact center employees were hired to assist with an anticipated increase in call volume due to customer experience changes such as advanced meter deployment and phone credit card transactions. New employees commenced taking calls independently in June, and currently the contact center staffing levels are four FTE higher than January. Management has also been implementing process improvements such as post-call surveys, utilizing staff from other Finance departments during high call volume periods, and extending hours to reduce peak volumes. Metrics for the month of June were well within target.
Credit & Collections (FAHEY) - Section notes that the 2017 write-offs were $157,000 compared to $221,000 for 2018. The explanation states that the difference is due to 2016 storm causing high bills and suspending write-offs. Did write-offs then increase dramatically in 2017 once the suspension was lifted? In addition to weather related issues, the write-off amount is dependent on credit & collections (C&C) staff workload and operational priorities. In March 2017, write-offs returned to anticipated volumes. Volumes decreased again in the fourth quarter when the new disconnect process was implemented, and C&C staff assisted with the changes. Implementing process improvements, such as enhanced reporting and an EWEB created automated courtesy call, have allowed C&C staff to concentrate on collections work and they are now current.
AMI Update (FAHEY) - How much savings to customers does 94 million gallons represent roughly? The 94 million gallons is calculated from a conservation perspective and represents the annual savings if leaks are not detected and fixed. Accordingly, this number does not correlate to customer bill impact. Typically, customers notice an unusually high water bill and within a month contact EWEB for information and a bill credit. In the last year, over 360 customers received a total of $70,000 in leak adjustment billing credits. In the coming months staff will be refining early leak detection processes and related reporting based on lessons learned and best practices.
Electrification / Smart Load Growth / Carbon Reduction / Climate Change (GONZALEZ) - "EWEB launched a new marketing campaign and promotion aimed at encouraging customers to convert from fossil fuels. "A Fossil-free World Starts at Home." How is this being marketed? Who are we targeting? "A Fossil-free World Starts at Home" is EWEB's communications and marketing campaign for residential smart electrification and carbon reduction efforts and programs. Under this umbrella we have been focusing on the Clean Power Promotion and the Clean Ride Program.
The Clean Power Promotion was aimed at incentivizing residential customers for switching to electricity. EWEB provided an additional $350 for conversions to heat pump water heaters and ducted and ductless heat pumps. This promotion took place from January to March 31, 2018 and it was kicked off during the Good Earth Promotion. We had 21 projects completed through the promotion. This promotion will start again in the fall and it will be promoted at the BRING tour.
The Clean Ride Program is an ongoing effort around electric vehicles. Part of this campaign is the $300 incentive for the purchase of new and used battery electric vehicles and qualifying plug-in hybrids (leased vehicles qualify). The $250 rEV UP Eugene! incentive was also part of this effort. This took place in partnership with the University of Oregon and the City of Eugene. Nissan is also offering an MSRP discount of $3,000 (funded by Nissan) for EWEB customers purchasing a 2018 Nissan Leaf. These offerings are for residential and commercial customers. We have had 26 Clean Ride participants in 2018 so far.
The combined marketing for these efforts include social media, employee news, revamping of associated web pages, collateral, speaking events, home show, media releases, radio, lobby monitor and reaching out to contractors and dealerships.
All future smart electrification/carbon reduction programs will be under "A Fossil-free World Starts at [Home, Work, etc.]" campaigns. Currently we have increased our new construction incentives and a marketing campaign is being built around it. As we will have a greater budget for new efforts, we can increase our efforts and programs to expand more on the commercial and industrial side, as well as looking at more comprehensive EV programs.
Customer Solutions Field Services, Conservation & Energy/Water Efficiency (GONZALEZ) - What is the BPA Lighting Calculator? The BPA lighting calculator is an Excel-based tool developed by the Bonneville Power Administration to calculate energy savings, customer incentives and BPA reimbursement for non-residential lighting projects. Energy savings are based on regional standards and facility operating hours. BPA reimbursement is set by BPA, and customer incentives for each measure within the calculator are set by each utility who uses it. The tool is a good way for either utility personnel or contractors to develop proposals for customers.
Fleet Services (DAMEWOOD) - Where on the EWEB website is this information highlighted: "reduced 146.94 metric tons of CO2 emissions (15.0% over state mandated fuels)"? The information on Fleet use and CO2 has been tracked for about 9 years now, and the information can be found at our website in the GHG Inventory at http://www.eweb.org/community-and-environment/our-commitment-to-the-environment. Although we do discuss our fleet emissions program, we do not post on-going fleet fuel emissions on the web, as fleet fuel emissions are about 5% of EWEB's overall carbon footprint profile. We will continue to post our progress on fuel emissions within this annual report.
Compliance (PRICE) - "Three NERC potential non-compliance events were self-reported to WECC in May." What were they and why did they occur? EWEB retained a consulting group to perform an assessment of EWEB's NERC Compliance Program, in preparation for an upcoming Audit in December. That work yielded potential non-compliances that are validated by staff. Two potential non-compliances (PNCs) were submitted to the Regulator who has not yet commenced their review; one PNC reflected a single backup telephone that was not tested in 'one monthly functional test' since January 2015 (the start of the current Audit Period) due to human error; the 2nd PNC dealt with a redundant EMCS (Energy Management Control System) monitoring feature where implementation and testing was completed after the compliance enforcement date, due to technical and procedural issues; and the third is still being evaluated. The two PNC's were resolved in a timely fashion, and the results of the corrective actions communicated to the Regulator.
Quarterly Contracts Awarded Report (FAHEY) - I would like to see a look back at contracts completed and the final costs and metrics around how each contractor did on a few metrics including cost, time estimated, ease to work with. Is that something that could be developed and included for contractors over a certain threshold? EWEB's purchasing policy states that the Board has the sole authority to approve all change orders to Board awarded contracts that exceed 25% of the last Board approved amount or cause the contract to exceed approval thresholds. This provides an outside limit of potential change-order impact. Operationally, there are many reasons for change orders. A large number of EWEB's contracts are for construction-related services and often the extent of the work is not known until the project starts. Management weighs each potential change order based on EWEB's core values. Changes that exceed management's delegated authority are brought to the board for approval and include the reason for the increase, such as additional time or contractor/subcontractor issues.
Friendly Area Neighbors Picnic (GONZALEZ) - I am curious if there are plans to participate in other neighborhood picnic-type events to spread awareness about emergency preparedness, carbon reduction, and EV's? Presently, the General Manager's office is reaching out to the nineteen (19) neighborhood associations requesting time at upcoming meetings. As these are developed, Commissioners will be invited and encouraged to participate.
Historically, EWEB has routinely participated in neighborhood events upon invitation from the Neighborhood Associations (NA's). Some NAs are more active than others, and some more actively reach out to EWEB than others. So far this year, we have participated in two Friendly Area Neighbor meetings (April and July). Both had a focus on emergency preparedness, but we took the opportunity to provide additional information on EWEB conservation programs, and others such as EV rebates. In April, staff gave a Resiliency and Emergency Preparedness presentation to around 80 Friendly Area Neighbors, highlighting both personal preparedness as well as EWEB water & electric system resiliency efforts. The two FAN meetings have been the only requests from NAs so far this year, and attendance was very low in the last one. In February, EWEB spoke to Westside Neighbors about EV's. In addition to NA meetings, EWEB has promoted carbon reduction, energy efficiency, smart electrification and emergency preparedness at the Good Earth Home & Garden Show and the Eugene Marathon (water trailer). In September, EWEB is participating in the BRING Home & Garden Tour and EV Ride & Drive, during which we will once again promote our Clean Power Promotion (additional incentives for upgrading from fossil fuels to electric home and hot water heating) and EV incentives.
Consent Calendar
CONTRACTS
Halvorson Contracting - for ROC consolidation project (PRICE) - Does EWEB have any previous experience with this company? If yes, how did the bid price compare to final total including change fees? EWEB has contracted with Halvorson Contracting on two other occasions, both times with excellent results.
- ITB 052-2014 (Headquarters Lobby Remodel):
Original bid: $49,985
Change orders: $6,885Total to completion: $56,870
- ITB 013-2015 (Electric Operations Remodel):
Original bid: $130,985
Change orders: $19,752Total to completion: $150,737
Michels Power - for construction at Leaburg Substation (PRICE) - The winning bid comes from an out of state company. When bids are awarded points, are extra points allowed for in-state/local companies? How do we fully vet and do due diligence on companies during this bidding process and do you find it more challenging to get a good sense of the work quality and track record with out of state companies that are not as likely to be known to local utilities? Oregon Statutes, like those in many other states, require local preference reciprocity where points are calculated based on how the bidder's state of residence would handle an Oregon vendor's response. In the case of this contract, the state of the low bidder does not make local preference adjustments for this type of work. Accordingly, no adjustments were made to the points awarded this contractor. Typically contractors complete a questionnaire regarding the invitation to bid minimum requirements and provide information on similar projects. If purchasing or operations staff have concerns, additional research will be performed. EWEB has recent experience with this bidder as Michels Power performed work on the Holden Creek Substation.
Mythics Inc. for Oracle software and services (BARTON) - How does this work fit into the CIS replacement that went on hold with Cayenta notice? At the July Board Meeting we discussed advancements with our existing (Banner) CIS that make an upgrade to our existing environment potentially feasible. This upgrade comes at a substantially lower cost, and a one-year implementation. Upgrading our Oracle environment to the latest version is a pre-requisite to the CIS upgrade.
The benefits of an Oracle upgrade are not limited to CIS. This upgrade will give us the ability to install Oracle on highly available hardware (today we have a single server), advanced security enhancements, a new license model and additional performance tuning abilities. There is a minimal cost difference in changing licensing models due to Staff's negotiation of a discount rate 10% higher than standard.
The new license model allows us to consolidate our entire Oracle ecosystem down to this single environment where all systems including WAM and AMI can take advantage of the new features and reliability.
Pacific Excavation - for on-site hypochlorite generation system improvements (DAMEWOOD) - Does EWEB have any previous experience with this Pacific Excavation? If yes, how did the bid price compare to final total including change fees? Yes, Pacific Excavation has conducted several jobs for EWEB over several years. The following is a list of the more recent jobs they conducted for us. They have performed well with Change Orders within 10% on construction projects, with some of those Change Orders initiated by EWEB.
- ITB 013-2018 (Larkspur Loop Water Main Replacement Project):
Contract Amount: $226,800
Current Project Cost: $244,156.80
- ITB 068-2017 (Golden Gardens Water Main Replacement Project):
Contract Amount: $265,880
Current Project Cost: $265,880
- ITB 038-2015 (Shasta 1150 Pump Station Replacement Project):
Contract Amount: $661,308
Final Project Cost: $721,356.14
INTERGOVERNMENTAL AGREEMENTS - (This item has been deferred until September.)
Lane Council of Governments (ACKERMAN) - I would like to see the last couple of contracts with LCOG that we issued for similar services. I recall the last one we approved was for several hundred thousand dollars, it was indicated that this was a "one-time expense" to get our inventory of real property in order. I'm curious as to why another $200,000 and why the last contract did not complete the inventory. How does this work relate to our strategic priorities? Will it help provide better customer service? What will it allow us to do better? The ability to effectively identify property rights is directly related to providing consistently reliable electric and water service.
Most of EWEB's Electric and Water systems cross land that is not owned by EWEB; it is either in private ownership or publicly owned through another agency. In order to both install and maintain our systems, we need to obtain property rights to legally conduct work. These rights are usually in the form of easements. Throughout EWEB's over 100-year history, we have executed an enormous number of easements, most of which were granted as perpetual rights.
Prior to our previous contract with LCOG, all easements were in paper format. The lack of an easily searchable and georeferenced database made it extremely difficult to easily ascertain our property rights. Engineering and Operations staff require this information to effectively do their day to day work of maintaining service.The original scope of work for LCOG was to create a property management database and digitize both legacy and new easements so that our property rights can be more easily identified. We anticipated the legacy easement work would be complete in summer of 2018 (basically, now). We are close to completing that work and estimate we are over 90% complete. However, there are a number of easements that have needed more research and effort to digitize. For example, this can happen when legal descriptions don't match, documents are missing or contradict each other, or some other complication is found.
The scope of the new contract is the following:
- Finalize the legacy easement work; we expect the historical property records digitization will be complete by the end of 2018, to the tune of approximately $60,000.
- The remaining funds of approximately $140,000 are intended to be divided over the duration of the five year contract for emerging maintenance and support work including digitization of new easements (of which EWEB executes many each year), as well as mapping of encroachments and other property rights issues - in essence, it is maintenance of the database. Actual amounts are unknown and the total spend will depend on property disposal and acquisition.
With regard to the last 2 contracts with LCOG for Property Management Technical Assistance; in 2015, the contract was initially for $50,000, the 2015 contract was amended increasing it to $90,000. In 2016, the contract started at $90,000. The contract was brought to the Board for approval in October 2016 when the work was accelerated and the expected spend increased to $398,000. Amendment 3 was issued after Board approval, but the total change remained under the 25% increase that would require additional Board Approval.
RESOLUTIONS
Resolution No. 1823, Revisions to Board Policy GP15, New Commissioner Orientation (LAWSON) - Is it the intention to expand the amount of communication and information available to all nominees or just ones that are uncontested going into the general election? The proposed policy states "In the event that a Commissioner Nominee will run uncontested, the orientation may begin prior to the general election, at the discretion of the Board President, General Manager and the Nominee." As written, the proposed policy does not provide flexibility to begin the orientation before the general election if more than one candidate's name will appear on the ballot.
Phase 2 references "after the election" which election is this referring to? Primary or General election? Could the ambiguity cause unintended consequences? The proposed policy has been simplified by removing the phased approach which defined when activities may occur. We agree, the title of Phase 2 was ambiguous and it no longer appears in the new proposed policy. Because the term nominee was included, staff interprets the statement to have included both the primary and general elections.
