MINUTES OF REGULAR MEETING TUESDAY, SEPTEMBER 22, 2015

Transcription

1 IMPERIAL IRRIGATION DISTRICT MINUTES OF REGULAR MEETING TUESDAY, SEPTEMBER 22, 2015 BOARD OF DIRECTORS William R. Condit Auditorium Division 1 Matthew Dessert 1285 Broadway Ave. Division 2 Bruce Kuhn El Centro, CA Division 3 James C. Hanks Division 4 Stephen W. Benson, President Kevin E. Kelley, General Manager Division 5 Norma Sierra Galindo, Vice President MEETING CALLED TO ORDER 8:10 a.m. PUBLIC COMMENTS Rod Colwell, chief executive officer and managing director of Controlled Thermal Resources, spoke to the board about a 200-MW geothermal power plant at the Salton Sea that could be on line before 2020 and could produce royalties to the district of up to $7.5 million annually. The price would be $90/MWh, which is competitive in today s market. The company, which will be using a technology that has been designed specifically for the Salton Sea area, is ready to start drilling and testing. It looks forward to working with IID as partners. CONVENE CLOSED SESSION 8:20 a.m. 1. CONFERENCE WITH LEGAL COUNSEL ANTICIPATED LITIGATION (Cal. Gov. Code sec (d)(2) & (e)(1)): Water Dept. (2 cases). 2. CONFERENCE WITH LEGAL COUNSEL EXISTING LITIGATION (Cal. Gov. Code sec (d)(1)): In the matter of Imperial Irrigation District, etc., SWRCB Order CONFERENCE WITH LEGAL COUNSEL ANTICIPATED LITIGATION (Cal. Gov. Code sec (d)(2) & (e)(1)): Support Services (1 case). 4. CONFERENCE WITH LABOR NEGOTIATOR (Cal. Gov. Code sec ): IID Representative: D. DeVoy Employee Organization: International Brotherhood of Electrical Workers, Professional Salaried Association and Executive Management Association.

2 IID Board Minutes Page 2 of 12 September 22, CONFERENCE WITH REAL PROPERTY NEGOTIATOR (Cal. Gov. Code sec ): APN: IID Negotiator: R. Gray Negotiating Party: Morningside Apartment Home Rentals, LLC Under Negotiation: Sale 6. CONFERENCE WITH LEGAL COUNSEL EXISTING LITIGATION (Cal. Gov. Code sec (d)(1)): IID v. CAISO, Case No. 15CV1576 AJB RBB, United States District Court, Southern District of California. 7. CONFERENCE WITH LEGAL COUNSEL ANTICIPATED LITIGATION (Cal. Gov. Code sec (d)(2) & (e)(1)): Executive Dept. (1 case) PRESENTATIONS 12:30 p.m. The board recognized Jose Castillo, telecommunications technician, for successfully completing the state-approved apprenticeship program. Of the 60 employees who completed from years of faithful service to the Imperial Irrigation, the following were in attendance: Alma Caballero Information System Specialist II 10 Rito Fregoso Water Conservation Data Technician II 10 Elsy Catalioto Information System Specialist II 10 Carrie Cruz Operations Analyst Water I 10 Frank Cervantes Distribution System Operator 10 Claudia Velazquez Trader III Day Ahead 10 Andres Gil Electrician Journeyman 10 Maria Luisa Ramos Operations Analyst Water I 10 Valente Redondo Service Representative II 10 Juan F. Lopez Video/Graphic Technician 10 Wilfred Toczko, Jr. Electrician Journeyman 10 Veronica Hernandez Payroll & Accounts Payable Administration 10 Cergio Duran Construction Resources Worker 20 Mark Gappinger Supt., Customer Operations 25 James Gaxiola Telecommunication Technician 25 Mario Vasquez Mechanic AAC Equipment 25 Maritza Martinez GIS Analyst II 25 Pedro Torres Zanjero 30 John Rodrigues Water Division Coordinator 30 Jeffery Martin Heavy Equipment Operator II 30 Fernando Noriega Heavy Equipment Operator II 30

3 IID Board Minutes Page 3 of 12 September 22, 2015 Dennis Singh Hydrographic Technician 30 Alfonso Necochea Zanjero 35 Juan Ramirez Foreman, Construction Worker Water 40 Merlon Kidwell Watermaster 40 Jose Salazar Survey Party Chief 40 RECONVENE OPEN SESSION 1 p.m. The Pledge of Allegiance was recited. REPORT OF ACTION(S) TAKEN IN CLOSED SESSION None. However, Mr. Simmons indicated that closed session items Nos. 1-6 had been discussed, but No. 7 will be taken up after the regular meeting. APPROVAL OF AGENDA President Benson requested that item No. 3 be moved to action. Moved by Director Kuhn, seconded by Director Galindo, that the board approve the agenda as presented with the above change. Motion carried 5-0. PUBLIC COMMENTS None. COMMENTS BY BOARD MEMBERS Director Galindo reported that, on the issue of the Gold King Mine discharge that occurred in August 2015, she had sent a letter to the director of the Environmental Protection Agency requesting information on the ramifications the spill would have on the district, as a recipient of Colorado River water. There has been no reply to the letter, which she read into the record. There were recent allegations in the newspaper that there might be some cover-up by EPA in the investigation and the release of information on this issue. In any event, the people in Imperial Valley deserve an answer regardless of whether the impact is small or big. Director Kuhn said that if this spill had been caused by a private company, You would still be hearing about it. He expects this to be swept under the carpet. President Benson: (1) Reported on his attendance at the Water Education Foundation conference in New Mexico last week. One thing that was made clear was that there will be shortages on the Colorado River. Based on temperatures alone, there was a 4 percent loss of flow in the river for every change in degree. (2) Attended the Colorado River Board meeting two weeks ago. (3) Noted that one can see a lot of sprinklers being used for germination purposes.

4 IID Board Minutes Page 4 of 12 September 22, 2015 COMMENTS BY GENERAL MANAGER None. CONSENT No. 1 Directors expenses No. 2 Claims board acknowledge receipt of the directors travel expense reports for the period ending August 25, Motion carried 5-0. board reject in their entirety the following claims for damages and instruct the secretary to notify claimants via letter recommended by legal counsel: Michael Charles Geico on behalf of Jasmine Chavez (No CE) (No CE) Motion carried 5-0. No. 3 Cash/wires report No. 4 Local Entity President Benson asked that this item be added to the action agenda. Director Galindo asked if there were any grantees that had not received at least one installment and the answer was that there were at least two such cases. board authorize the following disbursements from the Local Entity 2012 competitive mitigation program: Graphix Sign Company $74,250 3 rd disbursement Raspalandia $ 9,562 4 th disbursement Motion carried 5-0. No. 5 Weed spray program board approve Amendment No. 4 to Service Agreement No , with Eynon Management, Inc., extending the current agreement for a period of three months (through December 31, 2015) to allow Water Department staff time to finalize plans on whether to contract out the weed spray program or perform it inhouse. Motion carried 5-0.

5 IID Board Minutes Page 5 of 12 September 22, 2015 No. 6 Public Power Week No. 7 TW/TE relays No. 8 CI transmission upgrade No. 9 Amendment No. 1 Hassayampa board adopt Resolution No , proclaiming October 4-10, 2015, as Public Power Week. Motion carried 5-0. board approve Major Work Authorization Nos and in the amount of $842,900 to replace the modular digital automation relay and pilot wire relay on the TW and TE lines (from the El Centro Switching Station to the Terminal Substation). Motion carried 5-0. board approve Major Work Authorization No in the amount of $4,586,300 for upgrades to the 92-kV CI transmission line, specifically the portion from the Coachella Switching Station to Van Buren and then to Shadow Hills Substation. Motion carried 5-0. board approve Amendment No. 1 to the Hassayampa-North Gila 500-kV transmission project participation agreement that captures several modifications to the original agreement. Motion carried 5-0. CONSENT ITEMS ADDED TO ACTION AGENDA No. 3 President Benson questioned whether a payment of $3,000 to the Cash/wires Desert Valleys Builders Association as dues was consistent with report the revised community involvement policy. Mr. Simmons indicated that this request was not run through the Legal Department, but he will check into it. President Benson also questioned a check for $100,000 listed as a customer refund. The CFO stated that this was a deposit return on a commercial account. Moved by Director Benson, seconded by Director Hanks, that the board acknowledge receipt of the accounts payable checks and wires report for August 2015, as presented by the chief financial officer. Motion carried 5-0. ACTION No. 10 Arizona forbearance Chuck Cullom, Central Arizona Project Colorado River programs manager, was before the board on July 28, 2015, and spoke, under the information agenda, on a proposal by Arizona to use its intentionally created surplus conservation to increase surface elevation in Lake Mead and help avoid lower basin shortages. The two activities it proposes for extraordinary conservation

6 IID Board Minutes Page 6 of 12 September 22, 2015 No. 10 contd consideration are: agricultural pool demand reduction and longterm contract supply replacement. To this end, a forbearance agreement has been provided to IID for its consideration. Mr. Cullom indicated that CAP proposes to create 96,000 acre-feet of ICS water in 2015 and in 2016, with the commitment to keep CAP s ICS water in Lake Mead through Mr. Cullom appeared before the board at this meeting to reiterate the proposal and ask for action by the board. He indicated that IID staff had raised the importance of indexing ICS water and CAP is working with the Bureau of Reclamation to provide that documentation. He made it clear that, from CAP s perspective, this is the next evolution of storing water in Lake Mead and is working with all the partners to remove some of the barriers to put water in the lake temporarily to avoid shortages. This would be the first ICS project that has been developed since the 2007 guidelines. He was told that IID was the only agency that can directly impact elevation of Lake Mead and whenever it proposed anything its plans were rejected. There s flexibility if both sides are willing to negotiate past the 4.4 MAF allotment in time of need. Mr.Cullom indicated that the Nevada proposal was viewed as elevation-neutral to which IID responded that its proposal would have been neutral as well because it pledged to pay back water as retrieved. However, IID was not given the same flexibility. Linsey Dale stated that the Imperial County Farm Bureau has not taken an official position on this issue, but it wants to protect what rightfully belongs to the water users. Mr. Cullom indicated that only IID and the city of Needles have not taken action on this request. Director Hanks stated that when both agencies come to the finish line together then it would be time to consider forbearance. IID is constantly kicked in the teeth. The issues that would benefit us and, we re possibly the only agency that can make the big difference, but we are rejected constantly and now we have an issue. It is not just an issue with Arizona, but within California itself. There seems to be a higher standard for senior holders and we are in the position in the priority system where we cannot seem to get cooperation to meet our needs to make sure our water users are served and consider collaboration on other issues because we are a trust and

7 IID Board Minutes Page 7 of 12 September 22, 2015 No. 10 contd are held responsible to make sure that water users have that water available to them. Water users are willing to look at some of these items but that higher standard will have to be removed so we can indeed cross the finish line together. For example, he indicated that the overrun cost IID $20 million to pay back. At the same time, IID had a cumulative underrun of 800,000 AF without credit given. Director Kuhn agreed that IID is not given credit for an underrun but gets penalized during an overrun. Agencies are being treated differently. Moved by Director Hanks, seconded by Director Galindo, that the board deny the request of the Central Arizona Project Water Conservation District proposal to amend the 2007 Lower Colorado River Intentionally Created Surplus Forbearance Agreement for it to develop two activities for extraordinary conservation ICS to increase surface elevation in Lake Mead and help avert lower basin shortages. Motion carried 5-0. No. 11 MWD ICS amendment This was an informational item before the board on September 1, 2015, and is being presented today for action. As a result of discussions with MWD to expand its off-river storage capacity authorized by the 2007 California Agreement for the Creation and Delivery of Extraordinary Conservation Intentionally Created Surplus, MWD has provided a draft amendment to the California ICS Agreement that documents the proposed changes: Increase IID s annual storage capacity within MWD s system by 75,000 AF (from 25,000 AFY to 100,000 AFY) during the timeframe. Increase IID s total storage capacity within MWD s system by 150,000 AF to 200,000 AF. Authorize on-farm and system conservation measures subject to MWD consultation and verification. Reduce the 10-percent system loss to 5 percent, but add an annual 3-percent evaporative loss after 2020, for conservation in excess of the original 50,000 AF of storage. The annual reductions will be waived in any year that MWD is implementing a shortage allocation to its member agencies. Requires the delivery of at least 50 percent of conservation stored under the amendment, subject to the existing 50,000 AFY cap, at IID s request even if MWD is implementing a shortage allocation to its member agencies. IID agrees to defend and indemnify MWD from claims or liability for actual injury arising from this amendment.

8 IID Board Minutes Page 8 of 12 September 22, 2015 No. 11 contd Modification to the 2007 agreement requires the approval of IID, Palo Verde Irrigation District, Coachella Valley Water District and the city of Needles. IID is not obligated to store any amount of ICS water in the MWD system; it is an option. The caveat is that if IID conserves more than anticipated or uses less water than normal operations level, such conserved/underuse water automatically becomes water available to MWD for use under the Law of the River. Staff s recommendation is to authorize the general manager to execute the amendment. The board was told that MWD had approved the document at its August 18, 2015 board meeting. Director Kuhn reported that he had received a letter from Imperial Valley H 2 0 not opposing the proposal per se but asking IID to look at other options. Linsey Dale with the Imperial County Farm Bureau indicated that her members could facilitate a meeting, along with the water group, to look at other options and opportunities. Director Dessert mentioned that Metropolitan Water District and San Diego County Water Authority do not get along and no one is working with IID on a collaborative basis. Moved by Director Kuhn, seconded by Director Galindo, that the board table action on the Amendment to the California Agreement for the Creation and Delivery of Extraordinary Conservation Intentionally Created Surplus which will allow Imperial Irrigation District to store conserved water in the Metropolitan Water District s system. Motion carried 3-2, with Directors Hanks and Dessert voting no. No. 12 Customer web portal No. 13 Pole attachment fee Moved by Director Kuhn, seconded by Director Benson, that the board approve Major Work Authorization No in the amount of $697,300 to replace the existing customer care web portal with new technology to provide better self-service to Imperial Irrigation District customers. Motion carried 5-0. The board was told that Energy Department is currently doing an audit to determine how many attachments are on each district pole. Assistant Legal Counsel Robert Laurie indicated that the stakeholders have indicated support for the new fee.

9 IID Board Minutes Page 9 of 12 September 22, 2015 No. 13 contd No. 14 Quarterly financial update No. 15 EDP take-orpay relief INFORMATION No. 16 Preliminary 2016 budget Moved by Director Dessert, seconded by Director Kuhn, that the board, adopt Resolution No , approving the revised proposed pole attachment fee of $14.17 per attachment and the proposed pole attachment agreement to be effective January 1, Motion carried 5-0. The report format has been revised to provide more of a financial report and metrics update than just budget financials. Moved by Director Hanks, seconded by Director Dessert, that the board acknowledge receipt of the quarterly financial report through July 31, 2015, as presented by the chief financial officer. Motion carried 5-0. Moved by Director Kuhn, seconded by Director Hanks, that the board authorize a 15-day, take-or-pay relief period from October 6-20, 2015, consistent with Section 6.1 of the equitable distribution program during which time the district will accept up to 7 percent of any farm-unit s accepted apportionment into the agricultural water clearinghouse to fill requests by other users. Motion carried 5-0. The chief financial officer presented an overview of the proposed 2016 budget. The increase for the resource budgets is due to labor negotiations. A complete budget packet will be provided during a scheduled presentation in October. Of a total 27 positions being sought for 2016, only nine are being requested. President Benson indicated that he had asked for a GIS employee for the Water Department but this was not included. Regarding the use of IID vehicles, Director Galindo stated that the policy on paying mileage should be revisited. Oftentimes, employees use their personal cars when district vehicles are available. In that case, mileage should not be paid to them. Brawley resident John Hernandez asked if anyone is looking at facilities and was told that staff is doing so. No. 17 Net metering The chief financial officer summarized an analysis performed by Utility Financial Solution, LLC, on the issue of developing a rate to recover revenues from those customers who opt to install renewable systems in their homes. This activity has an impact on the district and its other customers, as the utility has to provide

10 IID Board Minutes Page 10 of 12 September 22, 2015 No. 17 contd backup service to maintain a reliable electric system. She indicated that IID is at about 33 MW of an approximate 50 MW net metering cap. Other utilities have proposed fees for net metering customers and those actions have been denied or there has been political backlash for imposing a surcharge. There are several strategies that the board needs to review and provide guidance to staff. The CFO was asked to review this issue with the Energy Consumers Advisory Committee. No. 18 WCAB update Al Kalin, chairman of the Water Conservation Advisory Board, provided an update on issues discussed during its meeting of September 10, There is no interest to bid on the district s pest control applicator positions. The two-year term was too short. The next WCAB meeting is on October 8. President Benson asked if the group had any recommendations on the weed spray program. Mr. Kalin said that staff needs to come up with a different contract whereby real weed control is done instead of performing shotgun applications. No. 19 Water gen. matters Tina Shields and Mike Pacheco, reported the following: (1) As of September 9, 2015, IID has received approximately 1,000 proposals for the current on-farm conservation program and nearly 500 proposals for the next application period. Staff continues to work on baseline development and has almost 550 field applications ready for contracting once the board authorizes the contract template. Staff continues to work with growers to develop enhancements to the current baseline methodology as well as crop-specific baseline averages and other program options for board consideration. (2) IID s use to date through September 14, 2015, is 1,846,988 AF; USBR s estimate of IID s underrun is at -157,417 AF, which does not include a 2,820 AF anticipated decrease in IID s consumptive use due to a one-time adjustment to the 1988 IID/MWD conservation agreement that has yet to be submitted to Reclamation. (3) Division Updates/12-Hour Usage (a) Divisions are reporting an average of hour water orders for 400 cfs.

11 IID Board Minutes Page 11 of 12 September 22, 2015 No. 19 contd (b) The East Highline Canal is running 1,500 cfs, Central Main Canal running 600 cfs, and Westside Main Canal running 700 cfs. (c) No canal outages will occur due to germination season. President Benson asked staff for a copy of the bill referenced at the Water Education Foundation conference in Santa Fe regarding temperature and climate factors affecting Colorado River changes. No. 20 Energy gen. matters Carl Stills, energy manager, provided the following report: 1. El Centro Generation Station Unit 3-1 continues to trip intermittently due to high exhaust temperature. The cause still appears to be the erratic operation of variable inlet guide vanes at lower loads and seems to be control-oriented and not mechanical. Staff is working with Siemens Energy, to resolve the issue and prevent additional episodes. 2. SB 350 passed the Legislature and is expected to be signed by Gov. Brown. This bill will cause IID to look at its renewable program and seek the best way to satisfy the 50-percent renewable portfolio standard requirement and the doubling of energy efficiency within buildings by the year The RPS requirement will create operational issues for IID by driving the need for must-take contracts. These contracts will cause IID to be long in energy supplies in the winter times, when IID s load drops from 1000 MW to 350 MW, making the district subject to market pricing and probable losses when it sells the excess energy. Three of the most significant provisions are: (a) (b) (c) It requires energy companies, including public utilities, to report their renewable portfolio standard compliance to the California Energy Commission and be subject to possible penalties for non-compliance. It also requires that all public utilities file an integrated resource plan with the CEC. It requires the Independent System Operator to prepare governance modifications to facilitate the transformation of the ISO into a regional organization, study specified issues and for the CPUC, CEC and CARB to hold a joint workshop to review the CAISO's proposed modifications, and stipulates that the proposed governance modifications do not take effect unless the Legislature enacts a statute implementing them.

12 IID Board Minutes Page 12 of 12 September 22, 2015 No. 21 L Line No. 22 Battery Energy storage Angela Evans, manager, Distribution Services and Maintenance Operations, gave an update on the repairs to the district electrical system due to a major system disturbance on August 6, A temporary wood pole line has been constructed; the permanent line consists of 26 steel poles on the 161-kV Line. The temporary line will be removed once the permanent structures are in place. Staff estimates the financial impact to the IID is between $6.2 to $8 million. David Escobar, senior project manager, provided a brief progress update on the battery energy storage project. It is currently in the design phase, with a construction start date of October 15, 2015, and completion date of August 31, The board awarded the project to Coachella Energy Storage Partners, LLC, and approved a total major work authorization in the amount of $38.6 million. ADJOURNMENT 4:08 p.m. RECONVENE CLOSED SESSION 4:09 p.m. CONFERENCE WITH LEGAL COUNSEL ANTICIPATED LITIGATION (Cal. Gov. Code sec (d)(2) & (e)(1)): Executive Dept. (1 case) RECONVENE OPEN SESSION 4:50 p.m. REPORTABLE ACTION(S) TAKEN IN CLOSED SESSION None. ADJOURNMENT 4:52 p.m.