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HomeMy WebLinkAboutMinutes 04/07/1997L Call to Order: UTILITY ADVISORY COMMITTEE Port Angeles, Washington April 7, 1997 Chairman Braun called the meeting to order at 3:00 p.m. Roll Call: Members Present: Members Absent: Staff Present: Others Present: Councilmen Braun, Campbell, and Doyle, Joe Michalczik, and Bill Myers. None. C. Knutson, B. Titus, J. Pittis, C. Hagar, K. Ridout, S. McLain, S. Hursh, and B. Jones. Bill McCrorie, Ted Simpson, Hugh Haffner, Fred Mitchell, and Mike Mclnnes. IlL Approval of Minutes: Councilman Doyle moved to approve the minutes of the March 10, 1997, meeting. Bill Myers seconded the motion, which carried unanimously. IV. Discussion Items: Discussion with PUD Commissioners - One Utility Planning Concept Discussion with PUD Commissioners - Wholesale Water Agreement At Councilman Braun's request, everyone introduced themselves. Ted Simpson, PUD Commissioner, stated that typically the City provides the infrastructure to all its residents. The area east of the City is designed as the Urban Growth Area (UGA) of Port Angeles; however, the PUD provides both power and water to that area. A majority of the water distributed by the PUD is purchased from the City. Currently, the PUD has power lines that run through the City to serve customers outside the city limits and the UGA. He stated that the PUD Commissioners and staff are present to attempt to put aside the differences of the City and the PUD and discuss customer service and how the UGA customers might best be served. He did not expect any action or conclusions to be reached today but wanted an opportunity to discuss thoughts on how infrastructures might most economically be provided to PUD customers. -1- Utility Advisory Committee April 7, 1997 Mr. Simpson then distributed a handout describing some of the PUD's thoughts and ideas on the One Utility Planning Concept. He described how the water system is tied into the PUD's various systems and felt that, if a single utility could serve these customers, it would mean greater efficiency and economic savings for the customer. Referring to Mr. Simpson's handout, Councilman Doyle asked if the first five points listed referred to both the electric and water utility equally. Mr. Simpson felt it should be for both; however, he stressed the points covered in his paper were only to stimulate discussion. He stated that realistically sewers had to be considered as part of the planning process for the UGA and reminded the Committee that through the annexation process these customers could well be Port Angeles citizens in the future. Councilman Braun asked Bob Titus, Deputy Director of Utility Services, to comment on the Planning section of the PUD's handout. Deputy Director Titus felt all utilities will have to find ways to be more efficient in their operations and find utility or private sector parmers. No one can assume the status quo will be a viable option in the future. Director of Public Works Pittis commented that the urban growth areas are complicated because they were developed geographically without consideration of utility placement. Brief discussion followed regarding whether the UGA boundaries could be modified within the next ten years. Commissioner McCrorie stated that if the City expands, the PUD does not want a duplication of facilities as this would be costly to all customers. There should be one utility that would cover everyone. He was also concerned over water, especially in Gale's Addition. He felt there should be a joint effort to obtain a larger water capacity for the summer months and suggested the City take over this water system. He felt the PUD could do the billing and the City could perform operation and maintenance. Attorney Knutson stated that the City had an agreement with the PUD for electric service areas that addresses these types of concerns and that a similar agreement for water facilities was currently being negotiated with the PUD. Mr. McCrorie agreed this was so and stated three local utility district (LUD) water systems are a real problem, because of the costs from the City to get the water to the PUD. He would like to see a combined effort go into a reservoir, as this would be of advantage to both parties. Commissioner Haffner gave an analogy comparing the coal and coke manufacturing business with owning, operating, and maintaining a utility. He felt there is a duplication of service, and integrating the utilities would eliminate this and provide lower prices for power and water. He then listed several ideas he had for integration, again stressed that savings could be achieved to benefit all customers if staff from both organizations worked together, and stated integration will make the local utility competitive. Councilman Campbell asked if a merging of some functions could be brought about without a total merger of the utilities, and he received an affirmative answer. Lengthy discussion ensued, and Councilman Campbell suggested a memorandum of understanding between the City and the PUD. -2- Utility Advisory Committee April 7, 1997 Commissioner Haffner thought it was a good idea, and Councilman Doyle stated a memorandum of understanding would help everyone focus on the real issues. Attorney Knutson suggested the PUD staff prepare an initial draft of a memorandum of understanding consistent with the PUD's handout and present it to City staff for review and revision. Councilman Braun explained that due to time constraints, this issue must now be closed. However, he reminded the PUD that a water agreement must still be reached as the current agreement expires in August 1997. He asked that PUD and City staff move ahead on an interim water agreement, as the concept of one utility will take quite some time to explore. Commissioner McCrorie thanked the Committee for its time and looked forward to future discussions. C. Status Report on Morse Creek Hydro Referring to the spreadsheet in the packet, Steve Hursh, Light Engineering Manager, reviewed and explained the Morse Creek cost analysis. It is expected that the City will lose about $13,000 annually on the Morse Creek Hydro Project even if you only take into account the operation and maintenance costs. The City is responsible for repair of pipeline breaks and erosion control. Since 1987, there have been five leaks in the pipeline. Repairs to the pipeline and erosion control costs would be over and above the annual losses already projected and "revenues" are tied to our wholesale power rates which have been fixed for the next five years. Should the City stop operating the project, its operating license must be surrendered and the site must be returned to a stable condition. Mr. Hursh stated he has sent a letter to the Federal Energy Regulatory Commission (FERC) asking for permission to "mothball" the project for five years rather than surrender the operating license, and for FERC to specify the requirements of returning the site to a stable condition. Mr. Hursh explained that water rights would still be maintained by the City, only the generation of electricity would be affected. Brief discussion followed, with Mr. Hursh offering further clarification and explanation. This was an information only item. No action was taken. D. Deregulation Update Deputy Director of Utility Services Titus stated legislation regarding the method of accounting for utilities may be passed this year. This legislation will not necessarily require a major change in how the City accounts for its costs but would require a change in rates and bills. If the City must pay for new software, the cost will be recoverable. Also of interest, Puget Sound Energy is now affiliated with Duke/Louis Dreyfus, and Louisville -3- Utility Advisory Committee April 7, 1997 Gas and Electric (LG&E), with whom the City has an agreement, has just affiliated with New Energy Ventures. It is felt that if deregulation legislation passes, many new agreements will go into effect. This is an information only item. No action was taken. V. Late Items A. Residential Garbage Collection Survey Director Pittis distributed copies of a Residential Garbage Collection Survey which will be distributed to all residents via utility bills. This survey will help staff decide if there is enough interest in going to all 90 gallon containers and allowing residents the choice of biweekly garbage pick up. Staff will keep the Committee updated on the survey results. There was no action needed or taken. VIII. Next Meeting: The next meeting of the Utility Advisory Committee will be held Monday, May 12, 1997, at 3:00 VIII. Adjournment: The meeting adjourned at 5:15 p.m. Chai~'man ~ ~ D~puty City Clerk -4-