HomeMy WebLinkAboutMinutes - April 4, 2017 SMLODI CITY COUNCIL
SPECIAL CITY COUNCIL MEETING
CARNEGIE FORUM, 305 WEST PINE STREET
TUESDAY, APRIL 4, 2017
A. Call to Order / Roll Call
The Special City Council meeting of April 4, 2017, was called to order by Mayor Kuehne at
7:02 p.m.
Present: Council Member Chandler, Council Member Johnson, Mayor Pro Tempore Nakanishi,
and Mayor Kuehne
Absent: Council Member Mounce
Also Present: City Manager Schwabauer, City Attorney Magdich, and City Clerk Ferraiolo
B. Regular Calendar
B-1 Receive Update on Lodi Electric Utility Strategic Planning and Provide Direction (EU)
Electric Utility Director Elizabeth Kirkley introduced Phyllis Currie, Executive Consultant with
Hometown Connections; Tim Blodgett, President and CEO of Hometown Connections; and
Randy Howard, General Manager of the Northern California Power Agency (NCPA), each of
whom provided brief personal biographies of their backgrounds, careers, and organizational
responsibilities. Ms. Kirkley, Ms. Currie, and Mr. Blodgett provided a PowerPoint presentation
regarding Lodi Electric Utility Strategic Planning. Specific topics of discussion included strategic
planning timeline; why strategic planning is needed; national trends; local issues; benefits of
strategic planning; what a public power strategic plan is not; strategic planning process; Lodi
Electric Utility (LEU) mission and values; customer needs; strengths, weaknesses, opportunities,
and threats (SWOT); SWOT analysis - internal and external; strategic areas of focus; next steps;
and strategic planning into the future.
In response to Mayor Kuehne, Ms. Kirkley stated that the oldest piece of LEU infrastructure is
50 years old. Engineering & Operations Manager Jay Marchesseault further stated that the
system has wires and poles older than 50 years and some of the substation power transformers
date back to the 1960s. One of the transformers at Killelea Substation was replaced recently
with a life expectancy of 10 to 30 years; however, much of the City's infrastructure is lasting
longer than originally expected. Mr. Marchesseault stated that distribution transformers are
replaced when they fail, but core assets are replaced before failure because they have a bigger
impact on the system.
In response to Mayor Kuehne, Ms. Kirkley stated that Lodi customers are interested in phone
application technology that would display power usage and enable bill payment from phones.
Technology such as this would be a part of the capital improvement plan and is part of the
strategic planning process to develop a technology plan. In further response, Deputy City
Manager Andrew Keys stated he was uncertain whether the current utility billing system has the
ability to electronically notify customers of a late bill; however, staff is presently exploring options
on the technical side to help with customer service, including programs that offer greater
capabilities in the area of e -billing, and he stated staff can inquire about e -notices because
communication with customers is critical.
Council Member Johnson questioned what other communities and utilities do to generate
community support. Mr. Blodgett suggested keeping the pulse of customers by regularly
performing market research and proactively reaching out to the public, as well as providing
community information on issues well in advance of a final decision. Ms. Currie suggested
holding stakeholder meetings to discuss significant issues, such as rate increases, to explain
what is driving the action and what the impacts are. She found it useful to prepare projected bills
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to demonstrate the effect of a rate increase on customers and utilizing the website and
newsletters to communicate with the public. She strongly cautioned against waiting to bring forth
an issue until the matter is before the decision-making authority for action.
Mayor Pro Tempore Nakanishi suggested LEU's mission statement include a fact about
courteous customer service to strengthen the statement because, as it stands, it is too generic.
In response to Council Member Johnson, Ms. Kirkley stated that, for internal operations, there is
significant data collected by meters, but staff does not have adequate access to the data to make
it useful and customers have no access, but she stated there is available technology that would
allow staff and customers to tap into the data for planning purposes. Ms. Kirkley stated that
technology is constantly evolving and improving and it is not wise to always be the first to try new
advancements, but LEU's goal is to put forward a technology plan because it is too far behind the
curve in the electric utility industry.
In response to Mayor Kuehne, Ms. Kirkley responded that public access is listed as both a
strength and a weakness because, as a strength, LEU is publicly owned and that public access
for stakeholders is in Lodi via the Lodi City Council, and not Sacramento; however, the weakness
lies in the inaccessibility of data regarding customer usage.
In response to Mayor Pro Tempore Nakanishi, Ms. Kirkly stated that a centralized office is a
worthy idea to pursue, but it involves more than just LEU and would be an involved discussion
involving the City Manager and other departments. She added that, even though decentralized
offices is listed as a weakness, it may not be easily solved, but staff is researching options to see
if there is another way to deal with it. Mr. Keys added that offices can be centralized via
technology, versus moving staff into different buildings, by installing Skype monitors at
counters so each office can view customers. There are costs associated with that technology, but
it is likely less than shipping an entire office into another building and configuring a new office.
In response to Mayor Kuehne, Ms. Kirkley stated that developing programs for each area of focus
will come from the action plan once goals are established, but examples of a customer focus goal
would be providing real-time access to energy usage data and paying bills in a more efficient
manner.
Mr. Howard provided a PowerPoint presentation regarding NCPA update. Specific topics of
discussion included strong members through joint action; experienced management and
specialized staff; expansion of NCPA; power pool; State legislative issues; top legislative issues
for NCPA; California's path to 2050 goals; improved transmission coordination; energy efficiency
expenditures; competitive rate advantages; low emissions and green profile; and project updates.
In response to Mayor Pro Tempore Nakanishi, Mr. Howard stated that energy storage is mostly
by battery because there are very few other choices available locally without pump storage, which
is expensive, or air storage, which is rapidly evolving.
In response to Council Member Chandler, Mr. Howard stated that transmission costs are
roughly 12 percent and NCPA is working to represent member cities, including Lodi, to keep
those costs from increasing.
In response to Council Member Johnson, Mr. Howard stated there is tension between State and
federal attitudes with multiple bills, goals, and objectives, but the State is allowed to initiate
regulations as long as it is the minimum, and not a greater, requirement. Regardless, NCPA tries
to stay on top of all of the issues; it has working committees to address issues collectively; and it
assists with grant writing.
Council Member Chandler pointed out that, over the broad geographical area of the Western
Interconnection, some power generators are based on coal, which is contrary to California.
Mr. Howard stated the purpose is to determine how to track and pay for generation and to
recognize whether bringing in coal can help with an offsetting requirement. Much of the effort is
the West Coast states and hydroelectric areas, such as Washington and Oregon, and whether
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they would be a better fit for Northern California or in Southern California to provide a balance.
With solar coming on line, less hydroelectricity is used from the Pacific Northwest.
Mayor Kuehne stated Lodi is 25 percent below PG&E's rates, but there are some public power
agencies that have better rates than Lodi, some worse, and there are various reasons as to
why: some have infrastructure built to lower the load profile; some coastal cities have less energy
to carry due to less extreme summer weather; and some have legacy assets they own without
debt. He stated that legacy assets are obtained through NCPA because Lodi, on its own, could
not build its own dam or gas treatment plant without the help of partners.
In response to Mayor Pro Tempore Nakanishi, Mr. Howard stated that, also behind PG&E's high
rates are high salaries for its top management positions and the dividends it pays its
shareholders. In addition, PG&E is regulated by the California Public Utilities Commission and is
forced to implement a greater number of social programs than are required for public utilities,
which increases its costs. Mr. Howard observed that investor-owned utilities do not carry the
same concerns for their ratepayers because their employees do not live in the effected
communities.
Council Member Chandler thanked NCPA for its efforts to contain members' costs and for
expanding the relationship with Southern California Public Power Agency and thanked
Mr. Howard for his innovative ideas, such as changing over to in-house NCPA counsel, which will
provide greater attention to utility -related issues and lower costs.
Ms. Kirkley stated she was looking for direction from Council on the suggested areas of focus and
stated that the plan is to return in May 2017 to complete the process.
Mayor Pro Tempore Nakanishi stated he supports the areas of focus.
In response to Council Member Chandler, Ms. Kirkley stated that the focus areas are not ranked
and will be addressed equally.
Council Member Johnson stated the areas of focus touch the most important aspects of what
LEU handles daily and they are focused, succinct, and on point. He stated he looks forward to the
next step on how to put these areas to work and congratulated those involved on their hard work
and efforts.
Mayor Pro Tempore Nakanishi stated that, as a Council Member, he looks for reliability and
customer service, which should be a high priority, and that he also would like to see ratepayers
given some freedom from rate increases for a period of time because the public has been vocal
about Lodi's rates.
Council Member Johnson responded to Mayor Pro Tempore Nakanishi, stating that he does not
wish to diminish the public's concerns, however, out of a population of 65,000 people, only a
small number complain regularly. He agreed there are issues that must be addressed, this plan
will begin to correct some of the weaknesses, and it is time to put it into action.
In response to Mayor Pro Tempore Nakanishi, Ms. Currie stated that, when she worked for the
City of Pasadena, staff spent a significant amount of time in the community at the outset about
the need for a rate increase and held 8 to 10 community meetings. Staff met with each of the
customer groups, i.e. residential, commercial, and industrial, to address their particular
perspectives and provide specifics on how the rate increase would effect their bill. In
Los Angeles, the city went through an involved rate increase proposal with 80 neighborhood
councils and staff met with each council, along with business groups, to thoroughly explain the
rate increase and the reasons behind it. Ms. Currie stated the last thing communities should do is
wait to talk to the community for the first time when the matter is before Council for a vote.
Ms. Kirkley stated that, prior to the last increase, staff addressed the Chamber of Commerce
industrial group to explain the rate increase and conducted some outreach.
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Mayor Kuehne expressed concern that NCPA is not represented on the list of areas of focus, to
which Mr. Howard responded that NCPA is in all parts of the list. He stated he looks forward to
Lodi working through the specifics of its strategic plan to fit the community and that NCPA will
assist with each of the categories and support Lodi's needs.
Council Member Johnson stated he was on Council when LEU's issues, shortcomings, options,
and opportunities were discussed at length and NCPA stepped up to the plate by providing
advice, guidance, counseling, and personnel to get Lodi through the difficult time. He stated that
NCPA is a beneficial partner and he hopes the relationship continues.
Mayor Pro Tempore Nakanishi suggested Lodi move slowly on its plan and technological
advances until it can see what other cities are doing.
Ms. Kirkley summarized that the next step is to establish goals and action items associated with
each of the goals.
Doug Chaney stated he is not unhappy with his bill because he tends to be in the middle bracket;
however, he stated that he believes customer service is terrible and that the relationship with
NCPA is without value. He stated the City should research other resources and that rates are too
high, yet the City constantly compares itself to cities with a high cost of living. Mr. Chaney stated
he believes it should be an apples -to -apples comparison instead.
C. Ad'lournment
There being no further business to come before the City Council, the meeting was adjourned at
8:45 p.m.
ATTEST:
Jennifer M. Ferraiolo
City Clerk
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