Transcripts For SFGTV Government Access Programming 20240713

We closed out a fairly old audit from 2015 associated with irrigation district purchase of class one power. The reason we closed them out is because they are not buying power from us at the present time. Those are put on hold and we will revisit those if the irrigation districts come back to buy power. That older 2015 audit is closed out. In the center part of the slide we have one audit, this is our review that was concluded in june. There are six recommendations. We look forward to wrapping those up before the end of the calter year. With that i am happy to take any questions. Questions or comments . Any questions from the public . The next item is quarterly budget status report. Charles, you are up again. Hello again. Charles pearl. Deputy chief financial officer. Could i have the slides, please. Commissioners this is your next Quarterly Report. This one has to do with our budget variance information. In terms of the observations so far in the year, again, this is the current fiscal year First Quarter through the end of september. We have again early in the year we have positive news to share in terms of water sales for our water enterprise, wastewater and clean power. In terms of out going i will go into detail on these in a moment. We have lower revenues for power enterprise. Sewer and water Sales Revenues above budget, about 1 million each. Power Sales Revenues are just under 3 below plan. Right now we are projecting our Financial Results will exceed or meet our policy targets for coverage reserves for water and wastewater. Power we see it below policy min mims by owes minimums for year end. For water sales are slightly above budget. It has been a fairly dry season of course, over the summer and into the fall we are seeing water sales above the plan. Then in addition to that we see savings in terms of personnel costs due to vacancies. On the wastewater side, as wastewater sales track, our water sales we are similarly seeing higher revenues due to increased water sales and savings associated with vacancies. It is early in the year and we are making assumption based on where they ended last year. Of course, as hiring and recruitment happens, we will update these numbers for you throughout the fiscal year. Wasnt last year unusual . In terms of . In terms of water supply and so on and so forth. Maybe i misunderstood you. In terms of salary savings, we have a number of vacancies and we are assuming we will continue to have salary savings associated with those vacancies. If recruitments fill up we will update as the year goes on. Sorry if that wasnt clear. On the power side, we are seeing and you saw this at the end when i presented q4 for fiscal 2019 we see weakness on power sales side 3 lower power sales. Some of these were due to transfer customers that didnt occur. As a reminder when we set the budget for fiscal year 2020 we set it for two years fiscal 2019 and 2020. The budget was set more than a year ago. Any variance in 2019 you will also see in fiscal 2020 because the budget had been set. We will work on adjusting these as we work on the budget the next two years. We are seeing weakness on the power sales side. We will offset with savings. As i noted at the outset we are seeing a net revenue loss for the power enterprise. We will work with the team to close that loss to offset our revenue shortfall with cost savings as being the goal. Clean power is a great story. Aside from all of the awards you heard about, we have tremendous amount of revenues above plan. Revenues are about 20 million above our budget, just under 10 . Again, as with the other areas we see salary savings anticipated due to vacancies. Key ratios, i want to point out here we are within the policy reserves except for the 21 you see noted should not fall below 25 per our policy minimums for operating reserve. We will find Additional Savings or bump up revenues as we can in order to balance that out by the end of the current fiscal year. All of the metrics there in current basis are all above the minimums. That is a good thing. I will take any questions. When people do more selfgeneration of Solar Systems on roofs, is that going to be renegative in our power or less than revenues . We may see that in lower clean power revenues. If they are Generating Energy at their home or business, the ultimate sales running through clean power could be lower. Right now we are okay on the clean power side. In terms of this side it is more about transfer customers and other larger commercial customers planning to transfer that havent as of yet. That is what is happening there. The Fund Balance Reserve being 21 versus 25 to 68 goal. What is that in terms of dollars . It is a good question. One moment. I will look it up. It is about 3 million, 3. 5 million. So we will look for cost saving in other ways of bringing that into balance before the end of the year. What are th the things we lok into for cost savings. We can closeout fund balances. Project operating costs pushed to the next year, that sort of thing. Thank you. Any other comments or questions . Any Public Comments . Thank you very much. The next item is Water Enterprise Capital Improvement Program Quarterly Report. Good afternoon. Director of water Capital Projects and programs. The first item that i am going to present today is a quarterly update on the water tenure, Capital Improvement program from july 1 through september 30. Thank you for putting up the slide. So the highlights of this period are listed here. You can see the yard is essentially done and we had an Opening Celebration of that yard. We unveiled a plaque on september 27th hosted by the assistant general manager steve richy. That was a great celebration. I will show you that picture in a moment. We have seen a lot of progress on pipeline number 2 project with placement of 54inch pipeline in sanbruno. It is 90 years old. That is making good progress. We successfully completed the shutdown of the Water Treatment plan to address preventative maintenance. We inspected Bay Division Pipeline 3 which is important for the integrity programming. The west side recycled Water Treatment facility advanced to approximately 35 construction completion. For the s uno l yard had a move in celebration. They are using the facility. It is a remarkable facility compared to the facilities there. Didnt we say 130 years old the previous facility, steve . 1875. It was time to have a modern facility for the folks working out there. We unveiled the plaque and folks have moved in. The watershed center, which is the other part of the project to be constructed near the water temple is moving forward as well. We received bids and we expect that project to move forward with award of that contracted very soon. I mentioned the san andreas pipeline two replacement. This shows completion of segment two pipeline of the peninsula high school. This does go through some densely populated communities. That is a major challenge of this project. They are making good progress. In some areas where it is impossible to digup the old pipeline, we are slip lining the old line rather than replacing. It is slip lining and replace. We do plan to replace segment 3 next quarter. Can you hold on for a second. Slip lining define. That is when you put a material inside the old pipeline rather than dig it up to replace it. It reestablishes the integrity of the pipeline. The disadvantage is sometimes we use capacity of the pipeline so we have to look at the tradeoffs. Good question. Then the west side recycled Water Treatment facility in San Francisco. I mentioned 35 complete. This is one of four contracts that addresses the need to treat the recycled water and use that for irrigation purposes and so this shows point of the concrete walls for the columns of the recycling facility. That concludes my report. I would be happy to take any questions. Any Public Comments . Okay. Next item. Dan. Water system Improvement Program local and regional Quarterly Reports. Thank you. My next report is on the water system Improvement Program, again, covering the First Quarter of the new fiscal year. You have seen this many slides. Steve says this is my favorite slide. It is really not but it is important to note that we are making good progress. We are over 87 complete with the programming. We really only have a few projects that remain. I will talk about those in todays report. First, the replacement. You know that we did complete construction. It was officially the final completion happened this quarter. July 12. So we are in the midst of the administrative closeout of the construction contract that will continue through 2019. There is a lot of work going on. Susan is here, the regional project manager for the projects and she is still working hard with the team to get everything buttoned up. I did want to mention that susan has been busy out getting awards as well. She just got the tenth award for the project. I would like to give susan a big hand. [applause] the awards look a little different than the Climate Change awards. I dont think she has trouble getting them through airport security. She doesnt have enough arms to carry them all. It is nice the project is recognized. The team has been working hard for a long time. The diverse dam which is a subproject to the replacement is again also in the final closeout phase. We havent officially completed the construction contract because there is still testing going on and training and punch list items. We have a couple things to address. We think we might be able to address them through warranty but we felt it was better to keep the construction contract open until they are addressed. First, we need to have the contract to repair and make adjustments to the debris rake and rack system totadybry off the screens. They will have to go back after the rains next year to take care of that. We will keep the contract open to next fall so we can hold the contractor accountable for that. We need to depend on Mother Nature to give us water to complete the testing of those facilities. You will see the forecast beyond the approved date. Those are the reasons for that. One thing i havent talked a lot about, but they asked i just kind of highlight these more now that we are towards the end of the program. The regional closeout projects. We have one in each of the projects. These were up in 2016 to address items that are not associated with the large projects but things that need to get done that may be followup items on the large projects to meet the goals and objectives with the water improvement project. First is the san joaquin region. There is one item to upgrade solar pa panels to apply energyr valves and so forth in the san joaquin region. That is being done. They have been designed. Wwe are almost done with the design. Within the next quarter we will issue job order contracts for that work. In the valley there are a few items. One is erosion repair. That is completed. We did relocate some Water Quality equipment. That is completed. At the Water Treatment plant, the Site Preparation for the mobile pilot plan is completed. The san antonio backup pipeline water modification phase one is completed. Next we will replace the equipment damaged b by overheating. We will build enclosed facilities to make sure that doesnt happen again. In the bay division region, there is just a couple of things. One is to install a v ditch for drainage control to prevent erosion at the site of the baydition pipeline. Also to do pipe coding to address corrosion inside the vault that is underground there. We want to make sure we address that soon so we dont get further corrosion. Temperature then in the peninsula region, the connecting channel is 50 complete to connect the stilling basin that takes the water over the spillway, connect with the stream channel downstream. Fish have gotten trapped there and we are making it doing modification of the channel so fish will not get trapped. We also replaced the equalization mixers. So there are two large projects that are relatively large regional projects that will in construction or design. That is the regional ground watery cover reproject. You know the phase one, which is construction of 12 well stations. That is certainl essentially coe except for startup and testing. We wrote a memo that you saw in august. We are continuing to work through those issues, including flow meters and Chemical Treatment during this quarter. Contract c is in the planning fazan 16 complete to complete the well station and to get the additional wells through the startup and testing phase as well. That memo was provided in august and we engage with operations to work through the issues on that project. I should say that the Quarterly Report does forecast that project going beyond the current approved date. We do anticipate you need to come back to ask for some additional time on that project. Current lighcurrently it is forr june of 2022 rather than december of 2021. For the Alameda Creek recapture project, we talked about this in the past. The recirculation was anticipated a few weeks from now. We look forward to getting that out. The project schedule needs to be reforecast. We know that will go beyond the date of worship. We have noted we will do that when we get that document recirculated and receive comments then we can be in a better position for that project. Lastly, before i take any questions, i want to mention we received the letter that was sent to the commission on october 18th. We will respond to the recommendations that were made. I will be happy to take any questions. Thank you. Any Public Comment on this item . All right. Next item the wildfire mitigation plan and implementation. We have margaret. Welcome to the low cut country. Good afternoon, commissioners. I am the Division Manager of water and power. I am here to talk about the sf p. U. C. s wildfire mitigation plan and our actions during the october 2019 Public Safety power shutoff event. We are a on you at thi a utilitn transmission lines. With passing of senate bill 901 we are required to maintain a plan per 8387. We provided you our first plan and it was approved by the commission on january 22, 2019. Under sections b1 we are required to update annually. I am happy to say the last exhibits just got finished today. We will bring you that completed plan on december 10th. These wildfire mitigation plans are required to have certain elements. One of those elements we have to identify for you where the San Francisco public utility overhead Commission Line assets are relative to the California Public Utilities Commissions high fire threat zones. I will show you a couple of those maps in a few minutes. It has to define roles and responsibilities of staff to provide expectations and accountability for our program. It covers wildfire risk. How are facilities designed . Do they create risk . What activities do we have on operations . Vegetation, maintenance to minimize the wildfire risk. It talks about the programs and strategies. I will talk about the deenergy plan today. We are required to have an independent evaluator review the plan. That will be after the first of next year and they will issue a report on the findings of the report. We have a map of the bay area over there. I know it is hard to see. Those yellow and red are tier two and three areas. As you can see, the San Francisco in the upper lefthand corner and the map continues to the middle of the san joaquin valley. Red is the highest fire threat telling us we have a lot of fuels there. As you can see on the left side of the map you will see the distribution lines, little green lines on the left are mere crystal spainings reservoir. They come from pg e and feed the cabins on the two properties. Our transmission lines are on the right side. They are blue. You can see them on the rim of the alameda county. They are on the rim of the area. Those areas in gray, not a high fire threat, not a lot of vegetation. This next map is the rest of our facilities. This is where i am from. This goes from the valley up to shauna. You can ski the green lines with the cherry compound, the o shauna see program. The blues are the transmission lines. They are mostly in yellow. That is moderate. It would probably be tier three. We had the fire in red that burned through a lot of the project in 2013. When we look at the number of miles we have. The city has about 215 miles of transmission and distribution line. Half is in tier to and three. We need to make sure we mitigate wildfire risk. So one of our strategies in our wildfire mitigation plan is to deenergize both lines when we have read flag warning days and high winds. How do we do that . We rely on the independent forecasts by noah. We have a process to monitor when the wind speeds exceed the thresholds. We use the same as pg e uses. Sustained winds 25 Miles Per Hour or gusts up to 45 Miles Per Hour. We used the information on how we will manage the lines. We monitor conditions in realtime. So the question is how did it go in october . Well, we had three red flag warning events coupled with high winds. I know you all know this. You may have had your power cut off. From october 9 through 12 the forecasts did not exceed thresholds so we did not energize our lines. October 26 through 28. Forecasted exceeded our thresholds. We will talk about that. For the last event on the 29th and 30 st. The forecast is not to exceed our threshold. The event was in october 26 to 28. On the 26th we knew pg and e wrote deenergize some lines. Our crews went down and isolated the lines that feed the watershed keepers houses on the peninsula. Wwe isolated from pg and e so when they turned off power our power would be off. We de energized the lines to cherry compound. On october 27th the winds were as high as we expected mostly where the distribution lines were where we de energized. We were looking that possibly we would have to deenergize lines 5 and 6, which are transmission lines from intake down to oakdale. They are at the substation. We monitored all day long, and the actual wind speeds never exceeded thresholds so we didnt de energize. On october 28th, we were within the red flag warning, however, we did not have the high wind conditions. We were able to restore power by 1308, which is 1 00 in the afternoon. We knew pg e still had power shut off in the peninsula. We did not restore that power until october 31st. We are monitors about 100 miles of lines in if high risk areas with a lot of vegetation and trees compared to pg e monitoring 3,000 miles. We have a total of 215 miles of line, not all is high risk, only 100 miles is. So in our plan this next year, you are going to see additional strategies. We are going to begin to mitigate that high fire risk. If you were to tour our rightofway where the transmission and distributions lie, you will see there arent many trees in the rightofway, pretty much none. What you are going to still see are high trees outside of the right away to hit the distribution or transmission lines. One strategy is to work with the Forest Service to mitigate some of those risks. There is some type of equipment that is risky. Copper wires, fuses, switches. We could update with lower risk equipment. We want to do that, too. I think coordination within the county is our top priority. We are in a continued partnership with the southwest Interface Team or swift. It involves cal fire, United States Forest Service. Bureau of land management. We Work Together cooperatively implements strategic fire fuel brake systems. Look on september 10th for the new plan and some budget modifications for consideration in the upcoming budget process. Do you have any questions . Thank you, margaret. Could you go back to slide 4. What captures your attention is that there is significant fire risk on the peninsula. Yes. A couple questions from that. Has that area ever burned within the history of our being in the project . I would have to check in on that. I can tell you right now the cal fire did not define any fires as red perimeters in that area that you can see there. You can see how they put the fires on for other areas. It just struck me in the way we are a victim of our own success set. The question goes to before i get do that. Are there other actors that have transmission lines through that area. There are distribution lines. Bg and e has distribution lines. Last year we did an inventory and one of that is we are going to i know the beach identified where pg es lines are in that and we are putting on our maps. They have transmission lines, also. You talked about how we responded to shutting down our facilities that use pg e feeds. Do we have any ability to cromwhat pg and e does or what other actors in the area might do. I would say no. If we can control it, no. For an example lines three and four running down to new work where we inter connect with pg e. We do not energize for any treatment. If pg and e were to deenergize at new work. We could still serve and el i have. The way it is deliver. If they shut off power we still continue to deliver to feed the treatment plan. As i will be interested as you come forward with an update or comments in how we are approaching risk in that high risk area. Some is not facility related. If a spark hits it for some reason, it may be overgrown and that is higher risk. What we are doing about that kind of thing and other actors in the area, whether they are homeowners or facilities with trucks or or crews in the area. What we can do to minimize risk not only with our action but by other people. We can talk on december 10 or another time on yo how we manag. Vegetation programs on the peninsula if you could address those. What we talked about is wildfire mitigation related to electrical facilities but you are right in identifying the watershed is at risk from fire of any kind whatever the others. That is a high priority for us for fire breaks and working with california fire. We did a couple controlled burns. We are in active conversation about it. They are quite concerned what might happen. We can make a presentation that is separate and above what we are doing on the electrical side. Withault of the focus on wildfires caused by failures in electric transmission focus at the moment. The risk is higher than that. We need to get up to speed to make sure we are dressing those on power. We wont de energize the lines to the Treatment Plant area. We do have backup power as well because other things happen in nature where electricity is interrupted. I have a question. Are we able to deenergize, lomareas, unlike pg e the vast areas. Are we able to. Smaller areas that is my question. Yes. We have cut offs on our system to isolate certain sections. You are familiar with kirkwood powerhouse is. We can ice late and cut up from mather. When we look at how to deenergize that all comes into play. What are the wind conditions . Where are they high . Are we able to isolate. That is transmission . No that is distribution. How about Trans Mission . Transmission is different because we are connected to if grid. If we have to for some reason cut off ourselves at warnerville or we can cut ourselves off and just serve modesto if it is coming from kirkwood or only. We can isolate that way. If they disconnected south. Just serve them up in irrigation district. Onlines 3 and 4 we would just serve the Water Treatment. We can ice late certain sections. Thank you. What is the benefit of us de energizing before pg e . How does that help . Usually our thought was they are going to already de energize. We want to control our destiny and not have them shut off. Some people have generators. We dont want to be connected when they turn it on. We want to ice late from the pg and e system. It was a safety issue so they could cook with their small generators. Thank you. When we talk about the sensitive areas. Why dont we underground . Couldnt we do it bit by bit in small pieces . You are taking all the excitement out of my wildfire mitigation plan. In some things we are looking at does it make sensory moving the trees is going to be cost prohibitive. Is it better to under ground in certain sections with risk. There is a whole paragraph in there. Does that paragraph have numbers attached to it . We tried to get those numbers. I am still working on those numbers. We hope to have those by december 10th. Did i read 3 million . I heard less than that. It is going to defend where it is. Along the road through additional we are good. So this city has a history of that debate. There was an incredible debate between the powers that be and utilities and the Transportation Companies then there happened to be a disaster called the earthquake of 1906 so that debate went out the window. That consumed this 100 years ago. I dont expect that to ever stop being a topic of discussion when it comes to utilities. Can we have numbers of the cost when something happens . Yes theryes, there is a cost to underground. What are the costs if we dont. That will take longer. We will look into that and come back to you. We would have the data from the rim fire. We didnt start that fire. It might be different if you start the fire. Is there any Public Comment . Thank you very much. Come see us again, margaret. The next item. Excuse me. I want to thank commissioner moran. He suggested we bring this forward to the commission today. Sorry i didnt think of it, but it was very, very important. I thank you for that. Mr. Wellly. All right. The next eye tell is update on pg e bank rut see and the citys acquisition offer. Barbara hail. Good afternoon. Assistant general manager for power. I want to followthrough on a request we had from the commission to provide more routine updates on how our efforts are going with in the bankruptcy case to pursue the Energy Independence that we described as an option in our preliminary options report from may of 2016. What i propose to do is talk about what is latest is going on in the Bankruptcy Court, give any highlight on the criminal Court Activities and claims hearings, if there are any, address some of the activities others are pursuing, and then highlight our activities. So first off, on the bankruptcy Court Activities, as you are aware, there are two different plans every organization before the federal Bankruptcy Court. Pg e preferred plan and bond holder plan. Neither of those plans include the citys proposal for acquisition of the distribution and transmission assets serving San Francisco. In terms every send activities, the judge did designate a mediator to help advance the schedule. You may recall that through ab1054, a law passed last legislative session, the pg e faces a deadline of june 30, 2020 to have a confirmed bankruptcy plan, and to be able to access the wildfire funds that were also established in that legislation. The wildfire funds will help pg e meet its financial obligations specific to the claims that fire victims have. Pg e and the bankrupt see committee are quite motivated to reach confirmation from bankruptcy by june 30, 2020. We have been engaging within the bankruptcy community through our city experts jeffreys to make sure that parties are aware of our offer and its value to helping pg e emerge from bankruptcy. That 2. 5 billion offer is available to help offset the obligations that pg and e faces in the bankruptcy case. With respect to the criminal court. The judge, you may have read in the newspaper, saturday of the kincaid fire, which pg e has not been the equipment has not been found to have caused that fire. However they did submit an incident report at the California Public Utilities Commission stating that their equipment they did have an equipment fire approximate to the location where the fire started. The judge took that opportunity to question pg and. And asked them to report on inspections and the circumstances around the kincaid fire. That report is due from pg e november 29th. The claims hearings efforts really wont see much public activity, as i understand it, until january. Meanwhile there are a number of our activities other parties are engaged in. We have seen various legislative ideas come forward. You have probably seen in the newspaper various reports from statements by Governor Newsom and others about reimagining pg e to ensure that the types of circumstances we are experiencing today dont continue after pg and e emerges from bankruptcy or have it emerge with some different structure. Its an effort that would provide, you know, perhaps another avenue rather than just the two plans of reorganization that are before the Bankruptcy Court today. Those really focus on paying pg es debts and not what happens after the bankruptcy in terms of are we going to be better off in terms of fire mitigation and such . A coop or a customerrun utility could provide a model thats run by customers only that could lead to a Better Service much like under our offer. However, under current state law, the coop model is a provide Public Benefit private Public Benefit corporation with limited information, so wed be interested i think in making sure that the governance of the coop is responsive to customers. For example, theres nothing in the current construct of a coop that would require transparency like the brown act does of activities of a of a public, you know, government entity. Theres some assumptions about how a coop could finance this large a transaction, that in working with our experts, were questioning how feasible that is. We havent seen a coop this size operate in the u. S. So there are lots of questions around that creative idea that were talking about folks about. And then, there are other publicly owned utilities that have filed or presented offers to pg e or that may present offers to pg e. So south san joaquin district, yolo county, the Community Choice aggregate program that operates in yolo county. So those are some activities that were aware of and engaged with. How about our activities . Well, we are continuing to engage with all of these folks and their ideas. Were also preparing an update on our may report that will capture further information subsequent to you know, leading up to and subsequent to the offer that the city made to pg e. And were participating in activities to support the publics understanding of our efforts. For example, today, there was a panel a Lunchtime Panel at spur, where this was our the topic was, you know, defining San Franciscos Energy Future and defining San Franciscos Energy Future, and we talked together with supervisor peskin and barry moline, the director of the California Public Utilities Association to spur about what this opportunity presents to San Francisco. So with that general update, im happy to take any questions you may have. Thank you, barbara. Thank you. You covered a lot of territory, and i appreciate you doing that. And you hit most of the things on my list. Great. So i can appreciate that. Couple things. In the plans that are currently out there, the two major plan, one feature, as i understand it, the bond holder proposal that you couldnt sell or pg e could not sell assets at least under that proposal. Thats correct, for a period of five years. Is there any other poison pill like that in the pg e preferred version, what i think of as the equity proposal . Yeah. I wouldnt say there are any other poison pills for our proposal, our proposal to acquire assets. I think one of the challenging issues that pg e faces is that the plans do put a reopener, if you will, on the committed equity. In the event pg e experiences a fire in their Service Territory that destroys more than 500 structures. So they do have a reopener, if you will, in these plans, in the event that they do have additional fires like the kincade. Which leads to an additional question. The kincade fire was after the fire liability fund. Is it clear if this is a fire, it if there is a fire, it would come out of that fund or where would it go . Its my understanding that the Legislation Commission understood that to be a source to address future as well as current wildfire liabilities and there would be a refunding. However, having said that, they certainly didnt anticipate when thanticipate when they created the fund, they didnt anticipate it could be exhausted by one utility in one year. So i take it theres still some uncertainty. Yes, i think theres still some uncertainty as to the sufficiency of the funds there. And on the part of that Wildlife Fund legislation, that had a i think of it as a poison pill, that any distribution of public assets would be reviewed by the cpuc, is that right . Yes. Any sale separate and apart from that, any sale of a public asset would be subject to review by the cpuc. That added some additional requirements to the existing requirements in Public Utilities code. And on the