MINUTES ORLANDO UTILITIES COMMISSION October 14, :00 P.M.

Transcription

1 10/14/14 59 MINUTES ORLANDO UTILITIES COMMISSION October 14, :00 P.M. Present: COMMISSIONERS: Dan Kirby, President Linda Ferrone, First Vice President Maylen Dominguez, Second Vice President Gregory D. Lee, Commissioner Buddy Dyer, Mayor Kenneth P. Ksionek, General Manager & Chief Executive Officer Jan Aspuru, Clint Bullock, Roseann Harrington, Byron Knibbs, Chip Merriam and Rob Teegarden, Vice Presidents Jerry Sullivan, Vice President & Chief Information Officer John H. Hearn, Vice President & Chief Financial Officer W. Christopher Browder, Vice President & General Counsel Nanci Schwartz, Recording Secretary President Kirby asked Debbie Bradshaw to give the invocation, followed by the Pledge of Allegiance to the Flag. The Commission Meeting was called to order at 2:04 P.M. On a motion by Commissioner Ferrone, seconded by Commissioner Dominguez and unanimously carried, the reading of the minutes of the August 26, 2014 Commission Meeting was waived and the minutes were approved. Chip Merriam presented a 30-year service award to Garfield Blair, Director, Environmental Affairs, Legislative, Regulatory and Compliance. Jan Aspuru presented a 30-year service award to Ed Mittan, Supervisor, Maintenance, Electric and Water Production. Chris Browder presented a 25-year service award to Rochell Hodge, Administrative Specialist III, Office of the General Counsel.

2 10/14/14 60 Clint Bullock presented a 25-year service award to George Satcher, Power Quality Technician, Electric and Water Delivery. Byron Knibbs presented a 25-year service award to Winston Hibbert, Master Technician I, Customer and Sustainable Services. Byron Knibbs presented a 20-year service award to Missy Stephenson, Manager, Commercial Customer Service, Customer and Sustainable Services. Mr. Ksionek asked Jerry Sullivan to provide a presentation on the Customer Information System (CIS), related to Affirmative Items A-19, A-20, A-21 and A- 22. These agenda items are requesting approval of the Customer Care & Billing (CC&B) Upgrade Project, Red Hat Linux hardware, Agile1 contractor labor and Oracle software maintenance. Mr. Sullivan explained the history of OUC s CIS, which encompasses such functions as customer registration, service order processing, payment posting, accounts receivable, collections, payment plans, meter asset assignment, billing and general ledger posting. OUC moved to the PeopleSoft Enterprise Management System (PS-ERM) in 2007 and will transition to the CC&B software in July Mr. Sullivan explained the budget and timeline for the CC&B Upgrade Project. The total project cost is $22,180,300. Oracle was chosen as the most responsive and responsible vendor to provide the CC&B implementation services. During the negotiations, OUC was able to lower Oracle s price by selfperforming some functions and utilizing other external labor sources as well as the project go-live date was reduced to 18 months. Mr. Sullivan discussed the Red Hat Linux Upgrade Project. The support, technology, architecture, responsiveness and resources of Red Hat Linux are an improvement over the current hardware system for Meter Data Management (MDM) for the same cost. Mr. Sullivan explained outside labor costs and maintenance costs for the current PS-ERM system and J.D. Edwards OneWorld as requested in Affirmative Items A-21 and A-22, respectively. Commissioner Ferrone asked for clarification regarding OUC s approach to regularly managing aspects such as scope, quality, budget, timeline and risk associated with these projects, as well as how major business process changes are managed and escalated. Mr. Sullivan responded that OUC has instituted a Project Management Office that handles cost, quality and scope issues. Additionally, the Quality Testing Department has increased their duties in support of new hardware and software. Major Project Delivery handles the day-to-day tasks, while the Electric and Water Delivery and Customer and Sustainable Services Business Units have been involved in developing and implementing these projects. Mr. Sullivan clarified that the Executive Staff has been involved

3 10/14/14 61 in decision-making for these projects and will be actively engaged and oversee changes and customization requests. Commissioner Ferrone emphasized the need for collaboration on projects of this scale. Commissioner Dominguez asked why the CC&B Upgrade Project was initially postponed and if there would have been a cost differential at the earlier date. Mr. Sullivan stated that the cost for implementing the project at an earlier date would have been equal the present costs. Also, OUC could not have gone forward with other major projects, such as the closing of the service centers, at the same time as the CC&B Upgrade Project. President Kirby asked if the maintenance costs for PS-ERM will remain constant, and how long the maintenance contract will be extended. Mr. Sullivan stated that the cost per month remains constant, and will be pro-rated once CC&B goes live. The PS-ERM maintenance contract will be extended through July 2016, which is the expected go live date of CC&B. Commissioner Dominguez asked if OUC has researched other utilities that have transitioned to CC&B. Mr. Sullivan stated that other utilities CC&B implementation progress was benchmarked in order to create a project timeline. Commissioner Ferrone inquired about the utilization of additional third-party vendors as mentioned in Affirmative Item A-19. Mr. Sullivan responded that those Purchase Orders will be requested at a later date, but the funds are already included in the overall project budget. President Kirby recognized Affirmative Item A-11 regarding the Rebate Automation and Computer Assisted Audit Program, and stated he was pleased to see the project moving forward. President Kirby presented the Affirmative Items for approval. On a motion by Commissioner Lee and seconded by Commissioner Ferrone, the Affirmative Items were approved as follows: 1. Ratification of the fuel procurements to the low bidders in June and July 2014 in the aggregate amount $48,568, as follows: NATURAL GAS PURCHASES: Jun BG Energy $1,898, Jun BP Energy $1,194, Jun ConocoPhillips $1,392, Jun EDF Trading (Formerly Eagle Energy) $1,271, Jun Enbridge Marketing, LP $ 515, Jun Energy America $ 113, Jun ENI USA Gas Marketing $ 112,059.50

4 10/14/14 62 Jun Infinite Energy $1,409, Jun Macquarie Cook Energy, LLC $2,670, Jun Shell Energy $1,779, Jun Southwestern Energy $ 866, Jun Tenaska Marketing Ventures $ 978, Jun Texla Energy Management, Inc $2,905, Jul BG Energy $1,864, Jul BP Energy $1,223, Jul ConocoPhillips $1,365, Jul EDF Trading (Formerly Eagle Energy) $1,751, Jul Enbridge Marketing, LP $ 744, Jul Florida Power & Light $ 273, Jul Infinite Energy $1,382, Jul Macquarie Cook Energy, LLC $2,418, Jul Shell Energy $1,622, Jul Southwestern Energy $ 794, Jul Tenaska Marketing Ventures $1,342, Jul Texla Energy Management, Inc $2,373, COAL PURCHASES: Jun Crimson Coal Corporation $ 532, Jun Eastern Coal & Coke Co. $1,672, Jun Foresight Coal Sales, LLC $ 532, Jun Mercuria Coal Marketing/ECC $3,390, Jun Tampa Electric Corporation $1,269, Jul Crimson Coal Corporation $2,095, Jul Foresight Coal Sales, LLC $ 532, Jul James River Coal, Inc. $1,456, Jul Mercuria Coal Marketing/ECC $ 687, Jul Trafigura AG $2,135, Ratification of the General Manager & CEO s execution of a three-year Coal Supply Agreement with Crimson Coal Corporation for coal deliveries in the amount of $78,916,750. Ratification of the General Manager & CEO s execution of a three-year Coal Supply Agreement with Foresight Coal Sales LLC for coal deliveries in the amount of $88,126,500; 3. Approval of SOQ # Contract awards to GAI Consultants, Inc. and T.M. Love & Associates, P.A., the most responsive and responsible vendors, to provide engineering services for OUCooling in the aggregate amount of $700,000. The contract terms are five years; 4. Ratification of a Substation Capital Expenditure Estimate for the Turkey Lake Substation A Unit Transformer Project in the amount of $3,500,000. Ratification of a Purchase Order to Black & Veatch to provide design engineering and construction management services in an amount not to exceed $450,000. Ratification of Purchase Orders to GE Prolec Transformers, Inc. for one 115/12.47kV transformer, field installation services and spare parts in the amount of $780,000; and Central Electric Manufacturing Company for one 15kV metal-clad

5 10/14/14 63 switchgear unit and bus duct, field installation services and spare parts in the amount of $720,000; 5. Approval of Change Request No. 1 to the Transmission Capital Expenditure Estimate in the amount of $1,355,000 for engineering, procurement and construction support necessary to complete the Pine Hills to Turkey Lake Transmission Line Upgrade Phase 1, increasing the project cost to $1,450,000. Approval of OUC initiated scope change and conforming Change Order No.1 to Leidos Engineering LLC in the amount $217,000 to provide design engineering, surveying, soil boring, permitting and construction management services, increasing the total Purchase Order amount to $312,000. Approval of the Electric Distribution Construction Estimate to relocate the electric distribution facilities in the total amount of $400, and of a Lighting Construction Estimate in the total amount of $297,804.17, with a customer contribution in the amount of $297,804.17; 6. Approval of RFP # Contract award to Terry s Electric, Inc., the lowest, most responsive and responsible vendor, to perform substation construction services required for the Airport Industrial Park Substation C Unit Addition Project in the amount of $1,255,000; 7. Approval of RFP # Contract award to Trinity Meyer Utility Structures, LLC, the lowest, most responsive and responsible vendor, for steel transmission monopoles and anchor bolts required for the Southwood to Metrowest Transmission Line Upgrade Project and St. Cloud Central to KUA Carl Wall Transmission Line Upgrade Project in the aggregate amount of $1,260,000; 8. Approval of RFP # Contract award to MD Henry Co., Inc., the lowest, most responsive and responsible vendor, for substation structures and equipment required for the Taft Substation Line Reconfiguration Project in the amount of $580,000; 9. Approval of single source Purchase Orders to Mansfield Oil Company of Gainesville, Inc. for biodiesel fuel in the amount of $1,000,000 and Petroleum Traders Corporation for unleaded gasoline and low sulfur diesel fuel in the amount of $2,000,000, for an aggregate amount of $3,000,000. The contract terms are one year with two one-year renewal options; 10. Approval of an OUC initiated scope change and conforming Change Order No. 1 to CSG Systems, Inc. in the amount of $800,000 to continue providing bill presentation services through September 10, 2015, increasing the total Purchase Order amount to $2,400,000;

6 10/14/ Approval of a Capital Expenditure Estimate for Rebate Automation and Computer Assisted Audit Program in the amount of $514,730. Approval of RFP # Contract award to Nexant, Inc., the most responsive and responsible vendor, for rebate and audit automation software in the amount of $594,000, pending final contract negotiations and OUC legal review. The contract term is three years with two oneyear options; 12. Approval of RFP # Contract awards to The FGS Group, Petrotech Southeast Inc. and SWS Environmental Services, the most responsive and responsible vendors, to provide emergency and routine environmental services in the aggregate amount of $1,200,000, pending final contract negotiations and OUC legal review. The contract terms are three years with two one-year renewal options; 13. Approval of an OUC initiated scope change and conforming Change Order No. 2 to Universal Protection Services, LLC in the amount of $1,451,000 to continue providing security officer services through October 1, 2015, increasing the total Purchase Order amount to $7,805,065.25; 14. Approval of a Purchase Order to Aetna Life Insurance Company for a total estimated medical program cost of $25,600,403 for benefit rates effective January 1, 2015; 15. Approval of a Purchase Order to de la Parte & Gilbert, P.A. to provide legal services related to various water resource issues during Fiscal Year 2015 in the amount of $220,000; 16. Approval of the reappointment of Fred Haddad, retiree, to the Board of Trustees of the OUC Pension Plan, effective January 1, 2015 for a term ending on December 31, 2019; 17. Authorization for the General Manager & CEO to execute the Distribution Easement on a portion of the well site for OUC Skylake Water Treatment Plant property located north of the Beachline Expressway, State Road 528, and east of Horizon Park Drive; 18. Authorization for the General Manager & CEO to execute the Subordination of Encumbrance to Property Rights to Orange County for Parcel , located east of Rio Grande Avenue and south of Holden Avenue;

7 10/14/ Approval of Change Request No. 1 to the Capital Expenditure Estimate for the Customer Care & Billing Upgrade Project in the amount of $19,642,641 for implementation services, internal and external labor, integration services, hardware and software, increasing the total project cost to $20,137,746. Approval of RFP # Contract award to Oracle America, Inc., the most responsive and responsible vendor, in the aggregate amount of $8,855,866, which includes $8,712,371 for Systems Integration upgrade services; $63,495 for MV90 licenses and support services; and $80,000 for training materials and services, pending final legal review of the contract; 20. Approval of a Capital Expenditure Estimate for the Red Hat Linux Migration Project in the amount of $885, Approval of a sole source Purchase Order to Oracle America, Inc. for software licenses and support to share a common platform between the Meter Data Management and Customer Care & Billing systems in the amount of $573, This contract includes one year of maintenance and support; 21. Approval of an OUC initiated scope change and conforming Change Order No. 4 to Agile1 in the amount of $4,588,720 to provide temporary staffing support and management services for the Customer Care & Billing Upgrade, Red Hat Linux Migration, Rebate Automation & Computer Assisted Audit Program and Internet Protocol Telephony Upgrade Projects, increasing the total Purchase Order amount to $19,483,720; 22. Approval of a sole source Purchase Order to Oracle America, Inc. for annual software maintenance and support through November 2015 for J.D. Edwards OneWorld in the amount of $106, Approval of a sole source Purchase Order to Oracle America, Inc. for annual software maintenance and support through December 2015 for PeopleSoft Enterprise Revenue Manager in the amount of $319,023.92; 23. Approval of an OUC initiated scope change with conforming Change Order No. 3 to Persistent Systems, Inc. in the amount of $198,372 to continue providing support for Secure Account Management through December 2015, increasing the total Purchase Order amount to $661,744; and 24. Approval of an OUC initiated scope change and conforming Change Order No. 2 to Gartner, Inc. in the amount of $91, to continue providing utilities industry advisory services through September 30, 2015, increasing the total Purchase Order amount to $187,

8 10/14/14 66 Commissioner Dominguez reported that the Audit Committee conducted its regular meeting on September 9, Internal Audit activities were presented to the Audit Committee, including an overview of two recently completed Internal Audit reports. The results of the July 2014 financial statement were presented. Income before contributions for the ten months ended July 31, 2014 was $69.5 million, $7.2 million higher than budget, and total assets were $3.2 billion. In addition, the Committee reviewed the Fiscal Year 2014 Proforma. Income before contributions is expected to be $86.4 million or $5.3 million higher than the original budget. Commissioner Ferrone reported that the Finance Committee held its regular meeting on September 18, The Committee reviewed the most recent Treasury and Energy Risk Management Reports. The Committee also reviewed recommendations for bond and disclosure counsel. Staff reviewed the process including the selection team, criteria used, and next steps. OUC solicited competitive proposals from 26 firms. Seven responses were received and evaluated. Five firms responded for both bond and disclosure counsel services and two firms responded for disclosure counsel services only. The Finance Committee recommends Bryant Miller Olive P.A. for bond counsel and Greenberg Traurig LLP for disclosure counsel. The engagement term will be for three years with two one-year renewal options. On a motion by Commissioner Dominguez and seconded by Mayor Dyer, PRES- 2a was approved as follows: PRES-2a Approval for Bryant Miller Olive P.A. to serve as bond counsel and Greenberg Traurig LLP to serve as disclosure counsel. The contract terms are three years with two one-year renewal options. John Hearn stated that net income for the months ended August 31, 2014 is approximately $8.7 million ahead of budget, which was mostly driven by resale revenue. The end of year numbers will be presented at the November 11, 2014 Commission Meeting.

9 10/14/14 67 Shira Meng, an OUC customer, addressed the Board regarding the turn-on service charge, and requested that this fee be re-evaluated. Mr. Ksionek announced that the December 9, 2014 Commission Meeting has been moved to December 2, Commissioner Lee stated that he enjoyed the Service Awards and congratulated the employees. He remarked that it is a sign of a great organization when people are willing to work so many years for the same company. He thanked Mr. Sullivan for his presentation and congratulated him on the negotiations with Oracle. He was pleased with the choices for bond and disclosure counsel. He thanked Ms. Meng for her comments regarding the turn-on service charge. Commissioner Ferrone congratulated the Service Award recipients. She commended Mr. Sullivan and his team on a well thought-out approach to various IT projects. She reiterated her desire for the Executive Staff to have a regular forum in which they can review and make tough decisions. She also thanked Ms. Meng for speaking. Mayor Dyer announced that the groundbreaking for the new Major League Soccer stadium will be held on October 16. The Dr. Phillips Performing Arts Center will have a ribbon-cutting ceremony on November 6, and the reconstructed Citrus Bowl will open on November 19. Commissioner Dominguez stated that she was glad to hear OUC received unexpected resale revenue. She is excited to work with OUC on increasing sustainability efforts and becoming sustainability leaders in the community. She congratulated the Service Award recipients as well as the achievements of their children. President Kirby asked that he and the other Commissioners be briefed on waterrelated issues and regional water strategies. He is excited about the opening of the Dr. Phillips Performing Arts Center and the Citrus Bowl and groundbreaking of the soccer stadium. He noted that the annual Board photograph was taken prior to the meeting, and commented on the history of the Board and the responsibility of Commissioners to be good stewards for OUC, its ratepayers and the community at large.

10 10/14/14 68 President Kirby adjourned the meeting at 3:21 P.M. President Secretary