Public Utility Commission

BOARD OF PUBLIC UTILITY COMMISSIONERS The regular meeting of the CITY OF FARMINGTON BOARD OF PUBLIC UTILITY COMMISSIONERS was held Wednesday, February 12,2014 at 3:00 p.m., in the Executive Conference Room at City Hall, 800 Municipal Dr., Farmington, New Mexico, in full conformity with the laws and ordinances of the Municipality. I. GENERAL 1. Commission members present: James Spence Jeff Parkes Carol Cloer Chris Hunter Tory Larsen Bill Standley Commission members absent: Amanda Weese Bill Hall Marty Johnson Vic Eicker Keith Johns Mayor and City Council: Mayor Tommy Roberts City personnel present: Water/Wastewater JeffSmaka CH2MHill OMI Monica Peterson PUC Secretary Amy McKinley Accounting Sheree Wilson Utility Business Operations Susan Nipper Customer Service Nicki Parks Electric Utility Director Michael Sims Electric Transmission & Distribution Rodney Romero Electric Generation Jim McNicol Electric Engineering John Armenta Legal Jay Burnham City Manager Rob Mayes Guests: Matt Dodson Kris Cope 2. Vice Chair Spence called the meeting to order at 3 :04 PM with a quorum present to conduct the business of the Commission. 3. A motion was made by Commissioner Standley to approve the Minutes of the January 8, 2014 meeting. PUC Secretary McKinley stated that while the body of the Minutes remained the same, Vice-Chair Spence's professional designation was added to the signature line of the Minutes after the Minutes were distributed. Commission Standley then made a motion to approve the Minutes with that addition of Vice-Chair's professional designation added. Commissioner Cloer seconded the motion and the motion carried. II. BUSINESS 1. Quarterly Financial Report: Ms. Wilson presented the Quarterly Financial Report. Ms. Wilson stated the Electric Utility's operating revenues was $3.7 million higher than last year. Ms. Wilson - 1­  reported electric sales increased by $3.6 million, majority of this increase was due to higher PCA revenues. Ms. Wilson stated surplus sales had small increase of $6 thousand. Ms. Wilson stated other revenues were $102 thousand due to increases in auction proceeds, joint-use billing and fiber optic Ms. Wilson stated operating expenses had a $2.1 million increase. Ms. Wilson reported purchase power was up $2.6 million. Ms. Wilson stated natural costs were down $2.4 million, while coal costs were higher by $717 thousand. Ms. Wilson salary and increased $683 thousand. Ms. Wilson reported other expenses and revenues increased previous Wilson pointed out that at the request of Commissioner Hunter, a column has added to the spreadsheet demonstrating the percentage in dollar change reflects the changes from FY13 to FY 14 for those individual Commissioner Hunter asked for next meeting that some detail added regarding the 13.8% increase in salary and fringe benefits. Mr. Sims responded that the salary and fringe benefit number is as high as it is due to the termination of employees. Mr. Sims stated when employees are terminated the City must payout salary and various benefits such as vacation. Commissioner Hunter asked if these types of things were factored out would the number be more in the range of 5 or 6 percent. Mr. Sims stated the number would be very likely be lower than that. Ms. Wilson reported on the Water Utility'S operating revenues decreased $648 thousand from FY20l3. Ms. Wilson stated water were down $653 thousand. Ms. Wilson stated the renewal/replacement fees increased $14 thousand, while the water rights acquisition fee had a slight decrease $5 thousand. Ms. Wilson reported operating expenses were up by $375 thousand. Ms. Wilson stated the OMI contract had an increase of$155 thousand. Ms. Wilson reported and benefits was lower by $4 thousand. Other operating also had a thousand. while depreciation expenses increased $254 $8 thousand. Ms. WIlson non-operatmg expenses Commissioner Parkes asked about the water revenues are down almost 10 percent and if this is unusual. Ms. Wilson stated there was less consumption compared to last year. Mr. Smaka stated that due to the rainfall that occurred in the late summer early fall, as well as some colder weather, consumption was less. Commissioner Cloer asked why the OMI contract had an increase of $155 thousand. Comissioner Hunter also asked this question and requested that a detailed explanation be brought to the next meeting. Ms. Wilson reported the Wastewater Utility's operating revenues was up $131 thousand from the prior year. Ms. Wilson stated wastewater sales increased $107 thousand. Ms. Wilson stated renewal/replacement and environmental taxes had slight increases. Ms. Wilson stated operating expenses were higher by $189 thousand. Ms. Wilson reported the OMI contract was up $131 thousand and other operating expenses was higher by $43 thousand. Ms. Wilson stated salaries and benefits along with depreciation had slight Ms. Wilson reported non-operating revenues increased $93 thousand, mainly due to capital contributions of $88 thousand from San for a lift station. Ms. Wilson reported non-operating expenses decreased 13 to FY2014. the net income Commissioner Hunter questioned the OMI contract increase and requested a detailed explanation be brought to the next meeting. 2. Customer Service Report: Ms. Nicki Parks stated that last year the APPA sent out to all of its members a survey about customer service policies. Parks stated that FEUS participated in this survey, -2­  along with 438 other utilities. Ms. Parks stated she and Ms. Nipper reviewed the survey results and selected items they felt demonstrated how the activities of the Farmington Electric Utility System Customer Service division compared with those of members. the typical residential deposit are determined bv a usage ,"-,al,"-,Ulalv a two-monm average. Parks stated customer does receive the deposit amount 12 months of good history. Commissioner Parkes asked if there is a preferred way for customers to pay their Ms. Parks stated there are many options available for the customer to pay their utility bill and the Customer Service division has no preference. Commissioner Parkes asked which option is the cheapest to process. Ms. Parks stated she would research that and report back to him. Ms. Nipper commented that bank drafts would most likely be the least expensive way to process utility bills because there is no charge to the customer and no charge to the utility and customer continues to receive a paper bill. is anything Parks stated she feels needs to 3. Project Status Report: Mr. Armenta referred back to discussions at the January 8, 2014 Commission meeting about the typical causes of power outages. Mr. Armenta stated a study was performed in 2011 and the data collected demonstrated animals, trees and weather were the biggest causes for power outages within the Farmington Electric Utility system. Mr. Armenta reported on ongoing Distribution, Transmission and Substation engineering proj ects. Commissioner Hunter asked what the BLM's view is to allowing the Utility to build out power lines and is there a sea change in terms them not allowing the Utility to access areas with power. and down as it is easier to due to BLM visual is encountering that rather than going up and back down, the around Simone Canyon. Mr. Armenta stated this does add more cost. Commissioner Hunter asked if the BLM is getting firmer on this standard. Mr. Armenta stated the BLM rules have always been difficult to work with. Commissioner Hunter requested a short briefing detailing in general terms the various regulatory agencies the utility with. Mr. Sims responded that a presentation the utility compliance division will be planned in the near future. budget process, it was discussed that the utility system. Mr. Sims are to A time, the utility is on budget for the first time stated that for many of the projects Mr. Armenta reported on emphasis to get these projects completed has been done in the last year to half. Mr. Sims stated Mr. Amenta's engineering group and the Transmission ,., - .J ­  Distribution (T &D) group, the personnel in the field who put the stuff together deserve some major credit ~ater/\\Tastewater Smaka briefly reviewed current water/wastewater projects. that for the Sewer Lift Station 5 improvements project staff is waiting for the equipment to arrive and the anticipate equipment delivery in late March. Mr. Smaka stated all the mechanical equipment has been replaced. Mr. Smaka reported that Station Two is presently in the design phase and construction is scheduled to begin in spring 2015. Mr. Smaka stated the water meter replacement project is estimated to begin in April 2014. 5. ~ater/~astewater Operations Report: Ms. Monica Peterson presented the ~ater/~astewater Operations Report for the month of January. Ms. Peterson stated that water line breaks were down considerably from December. 6. Electric Utility Report: V",",'U.V"," the HIVllllll to Report. Commissioner of the December revenue related to the rate increase. Ms. Nipper help with the increase in revenue for December. Commissioner Hunter commented on big swings in the numbers in the industrial customer sales usage for the past few months. Ms. Nipper stated this usage is very much driven by the price of natural gas. 7. Director's Report: Sims on~se:ntea Electric the IllVlllll Sims reported that upon the recommendation of the Commission, proceeded to Council regarding the implementation of a newsletter prepared an electronic format. Mr. Sims stated the City Council decided to use this idea a larger, citywide newsletter and this newsletter will include the utility. Mr. Sims stated a NMED air quality compliance audit was conduct at the Animas Power Plant. Mr. Sims stated these audits are very important and it is extremely important that the utility be in compliance and be prepared for these types of audits. Sims stated there were no adverse findings by the NMED audit and this is very good. Mr. Sims stated the utility's environmental scientist is to be congratulated for prepared Sims stated the Industrial Pre-treatment Inspection also took place. Mr. Sims this inspection is conducted by CH2MHill and the utility also inspection with no compliance issued noted. Mr. Sims reminded the Commission of the one of the goals of the department reorganization was to have a group within the department that would oversee contractors and consultants for T&D construction and testing. Mr. Sims stated these two new positions have been filled. Sims updated the Commission regarding the heater l'WlJl~1HC'l GE system at the Bluffview Power Plant. Mr. Sims stated the generation devised a temoorar -4­  Mr. Sims stated the Navajo Dam Hydro Plant Unit 2 is back on line at minimum flow. Mr. Sims stated that anytime this unit operates, it is good for the utilitv because power cost is so low. Vice-Chair IS Mr. Sims this project is complete and the is operating very well. Mr. Sims stated the engineer in charge of the project, Shawn Weiss, did an excellent iob In engineering and overseeing that project. III. ADJOURNMENT There being no further business to come before the Commission, upon motion duly made and seconded, the meeting was adjourned. IH'-''-'Llll~ was at 4:33 Approved this 12th day of March, 2014. (~Wap~ ~".u.u.~u. Weese, Chair -5­