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HomeMy WebLinkAboutAgenda Report - August 2, 2017 I-02TM CITY OF LODI COUNCIL COMMUNICATION AGENDA ITEM I-2 AGENDA TITLE: Receive Update on Lodi Electric Utility Strategic Planning and Provide Direction MEETING DATE: August 2, 2017 PREPARED BY: Electric Utility Director RECOMMENDED ACTION Receive update on Lodi Electric Utility strategic planning and provide direction. BACKGROUND INFORMATION: On April 4, 2017, a Special City Council Meeting was held to update the Council and Lodi Electric Utility's (LEU) customer -owners on LEU's strategic planning efforts. At that meeting, representatives from Hometown Connections, a public power consulting firm hired by the City to facilitate LEU's strategic planning, discussed national trends in the energy industry, current issues facing public power utilities in California, benefits of strategic planning, and the strategic planning process. In addition, Northern California Power Agency's (NCPA) General Manager, Randy Howard, provided the City Council with a presentation outlining the various services NCPA provides LEU. He also discussed how the agency's efforts in the federal and state legislative arenas have preserved local control. The NCPA members benefit by the "economy of scale" aspect of receiving services from a joint powers agency; this results in cost savings to NCPA members, including LEU. Staff presented local issues impacting the utility; LEU's proposed mission statement, values, and motto; customer needs by class; the strengths, weakness, opportunities, and threats (SWOT) analysis performed; and the strategic areas of focus identified. The Council provided input to the mission statement and confirmed consensus with the values, motto, and strategic areas of focus. Since that time, LEU's Strategic Planning Implementation Team (LEU Director and Division Heads) has been meeting with other City staff to determine the top goals associated with each strategic area of focus. The LEU Strategic Planning Advisory Team (City Council member, the City Manager, Deputy City Manager, and LEU Director) has also provided input to the goals that will be presented to the City Council and LEU's customer -owners for consideration. FISCAL IMPACT: Not applicable. FUNDING AVAILABLE: Not applicable. EAK/Ist Elizabeth f Kirkley Electric Utility Directo APPROVED: AIM Jab - n c w- - - City Manager STRATEGIC PLANNING UPDATE City Council Meeting August 2, 2017 Strategic Planning Update Timeline Review Goals Discussion & Direction Next Steps Strategic Planning Timeline December 2015 March -May 2016 June 2016 February 2017 April 2017 TODAY August 2017 October 2017 • LEU Strategic Plan - City Council Authorization • Customer Research (focus groups / phone surveys) • Customer Research Report to City Council • Strategic Plan Kickoff Meetings • Current Issues / Areas of Focus to City Council • Goal Setting Meetings • Goals to City Council • LEU Strategic Plan - City Council Approval • Updates to City Council 3 Review Strategic Planning Efforts Discovery Development Focus Goals Action Items Accountability Mission, Values, and Motto LEU is your customer -owned energy partner committed to the needs of the community; providing. courteous, professional service for safe, reliable, and competitively -priced power. • Anticipate and respond professionally to the needs and concerns of our customer - owners; • Provide valued services at competitive rates in a transparent and ethical manner; • Promote professional growth and development of our workforce; • Maintain a flexible organization which adapts to the changing utility industry; and • Contribute to the economic vitality of the community. Large enough to meet your needs small enough to care 5 Strategic Areas of Focus Financial Workforce LEU will develop and implement programs and provide services to meet the needs of our customer -owners. LEU will deploy cost effective technology to improve customer service, reliability, safety, and workforce efficiency. LEU will operate in a manner that ensures financial stability and customer value. LEU will design, operate, and maintain the distribution system to ensure reliable electric service. LEU is committed to recruiting qualified staff, providing necessary training, and an environment which promotes workforce loyalty. 6 Hometown Connections` strategic Planning Process DELIVERING VALUE TO PUALIC POWER 4 5 mrd Commissioning > Agrecnimr to mo►'e forward and how > Where do you x+arr r to be in the future Board's Initial Areas of Focus SWOT Analysis Internal sirerr thslweaknesses External coni eti#bra, opportwriflr threats Strategic Areas of Focus ) S prif ifo mission, values, SWOT moonier rrrerfs idi us arc the most critical Issues? Strategic Issues facing the organization 8 Action Items > Specific deliverables to accomplish goal Details including 5, priority, implementation 1 Visioa/irilssioriValu Reason far being ) Values or Guiding Principles Customers/Forget Motets s Afarket wnents 1 commie'. Needs GEES I%1:at do you intrad to accomplish? ) Specific, rtreasuralxle, realigic > Boards metrics/dashboard Tonight's Discussion Discovery Development Focus Goals Action Items Accountability Customer Goals LEU will develop and implement programs and provide services to meet the needs of our customers. LEU will develop a customer communications plan by Dec 31, 2017. LEU will strive to achieve and maintain a minimum 80% customer satisfaction rating as measured by biannual survey. LEU will develop two new customer incentive programs by Dec 31, 2018. 9 Reliability Goals L U will design, operate, and maintain a distribution system to ensure reliable electric service. Increase grid intertie reliability and capacity to serve existing customers and new developments by 2024. Perform a physical and cyber security assessment for critical assets and develop a plan to address findings by December 2018. Maintain monthly electric reliability metrics > the APPA western region top quartile. ■ 10 Technology Goals LEU will deploy cost effective technology to improve reliability, customer service, safety, and workforce efficiency. Modernize customer information and billing interface by Jun 30, 2018. Implement an outage management system by Dec 31, 2018. Develop an overall technology roadmap to meet the needs of customers and staff by Dec 31, 2018. 11 Financial Goals LEU will operate in a manner that ensures financial stability and customer value. Achieve AA credit rating by 2020. Maintain average electric rates at least 10% lower than PG&E, to be reviewed annually. Improve rate structure by collecting at least 50% of fixed costs through fixed charges by 2020. Maintain a cost effective power portfolio by ensuring power supply costs remain below 10 cents/kWh on an annual basis. 1 ■ 12 Workforce Goals LEU is committed to recruiting qualified staff and providing necessary training and an environment which promotes workforce loyalty. Maintain a culture of safety throughout the electric utility to achieve zero lost time incidents. Develop a succession plan by Dec 31, 2018 to attract and retain a., qualified workforce 1 ■ ■ Strategic Planning into the Future Make the plan simple enough to become a part of ongoing discussions that have strategic implications Keep the plan relevant by periodically revisiting the assumptions in the face of changes to the internal and external environments Make it a part of the culture Next Steps Finalize Strategic Plan for City Council approval. Develop and implement action items for each goal. Provide the City Council with regular updates. Re -visit Strategic Plan in 5 years, modify as needed.