(b) Transmission and telecom sales

• MWh sales of 84,593 for January were below the budgeted amount of 91,106. Temperatures were warmer than average with heating degree days of 95 versus a 30 year average of 315. Year-to-date MWh sales remain below budget due to conservation efforts and cooler than average temperatures in the summer as well as warmer than average in the winter.
• Wholesale gross margins were above budget for the month of January, but remain down from the summer ($1.2M to $.5M). Winter months generally produce less wholesale sales due to decrease demand in energy. Year-to-date wholesale gross margin continues to be higher due to BWP�s ability to efficiently use utility assets in the wholesale market.

• Magnolia 2, 3 and 4 have been retired.
• Magnolia 5 is available for service.
• Olive 1 is unavailable for service until the NOx retrofit is complete.
• Olive 2 is unavailable for service until the NOx retrofit is complete.
• Olive 3 is available for service.
• Olive 4 is available for service.
• Lake One is available for emergency use only.
• Work is ongoing on the Magnolia Cooling Towers 1 and 2 basins. Magnolia Cooling Towers 3 and 4 areas have been paved. A fence has been installed on the southern boundary of the Magnolia Power Project. Deliveries have started on the equipment for the Olive Retrofit Project.
• Olive One�s boiler superheater was repaired after hydrostatic testing showed leaks. Overhaul of the pumps and motors continues during this shutdown period. Olive Cooling Tower #2 sustained damage during the windstorm of January 5^th. The 2A cooling tower fan shroud is completely destroyed, and stairs and handrails required repair.
• The Lake One cooling water heat exchangers were chemically cleaned. Cooling water pumps were moved to the Olive 2 cooling tower basin. A new catalyst was installed in the Selective Catalytic Reduction (SCR). Staff tested the unit to gather preliminary data and make adjustments. The unit appears to meet NOx and ammonia slip limits. Staff is preparing for the new emissions testing method in February 2003.
• Power Plant staff has been examining the Burbank Landfill microturbines. BWP staff met with Bonnie Teaford of Public Works regarding increasing compressor reliability. Excess moisture in the landfill gas appears to be causing problems with the gas compressors. Methods to improve the drying are under consideration.
• Power plant management met with the Pasadena and Glendale maintenance and operations staff for a tour of Lake One as the two neighboring utilities are starting their respective efforts to build the same G.E. LM6000 power plants in their cities.

• NOx Retrofit Project

BWP has received the "Permit To Construct" for the Olive 1 NOx retrofit from the South Coast Air Quality Management District (SCAQMD). AUS has mobilized to begin construction on the project. They are in the process of selecting their subcontractors. The asbestos abatement on the ductwork and lead paint removal from the structural steel is complete. The new Continuous Emission Monitoring System (CEMS) equipment for the project has arrived.

• Transmission and Regional Transmission Organizations (RTOs)

Burbank filed its comments on the Federal Energy Regulatory Commissions (FERC�s) Notice of Proposed Rulemaking (NOPR) which deals with Standard Market Design (SMD) for RTOs. FERC�s SMD proposal continues to be controversial. Persistent rumors circulated during the month that Congress would cut funding for FERC if it persisted with the implementation of SMD. As well, rumors circulated that the Senate was considering legislation that would prohibit implementation of SMD. Consequently, it remains unknown what the final form and schedule for SMD implementation.

• FERC Data Requests and Refund Calculation

As reported earlier, FERC has launched a 100-day investigation into the events that led to the price run-ups in the natural gas and electricity markets in 2000 and 2001. Burbank has now received six data requests from California parties representing the Attorney General and various state agencies asking over 130 questions related to our marketing efforts from January 2000 through June 2001. Considerable staff time was spent during January preparing responses.

• Restructuring of Gas Industry in California

Implementation of the Comprehensive Settlement by Southern California Gas Company (SoCalGas) is still under suspension. The California Public Utilities Commission (CPUC) delayed its anticipated mid-January decision regarding whether and how it would be implemented. A decision by the CPUC is now late in the first quarter of this year.

The Remote Terminal Unit (RTU) installation at Victory Distributing Station has been completed, as well as the annunciator change out at the Naomi Distributing Station. The new RTU installation for McCambridge Station has been released for testing, and the RTUs for the Winona and Naomi Stations will be released for testing in early February. Installation of the RTUs at Town Station and the SCADA Center will begin mid-February. Work continued on the link from SCADA to the Distributed Control System (DCS) at the Olive Power Plant and Lake One. Work continued on the system database and several applications, as well as on the specification for the energy scheduling and trading software.

• Telecom

BWP received consent to proceed with fiber optic service for Ascent Media (formerly Liberty Livewire) connecting 2901 W. Alameda Avenue to 2130 N. Hollywood Way.

BWP received consent to proceed with fiber optic service for Modern VideoFilm connecting 4411 W. Olive Avenue in Burbank to 1733 Flower Street in Glendale.

BWP provided an estimate and proposal to TVN Entertainment to connect their facilities at 4111 W. Alameda Avenue and 2901 W. Alameda Avenue.

• BWP Administration Building Remodel

Phase II - Window Replacement

All of the windows and doors have been replaced and a job walk was conducted. The resulting punch item list was given to the contractor for correction.

Phase III - Interior Building Remodel

BWP is conducting a final review of the bid package for Phase III of the Building Remodel. The architect, Fong Kutner and Associates, submitted construction drawings for the City�s review and consideration.

• Electrical Distribution

Engineering for the Media District underground project has been completed for extending the ducts and manholes along Hollywood Way from the Warner Ranch Gate to Oak Street, along Oak Street to California Street, along California Street from Oak Street to Alameda Avenue, and also along Avon Street from Oak Street to the alley north of Alameda. At its January 16, 2003 meeting, the BWP Board awarded the bid to J. Fletcher Creamer & Son Inc.

Construction of the new offramp (to allow construction of a new Hollywood Way Distributing Station) has begun.

Work is underway to replace 1,200 residential electric meters with meters that can be read remotely; 597 meters have been installed through February 2.

• Customer Service

SCT was on-site during January to install the new CIS application and begin preliminary discussion about how data from the current system will be converted to the new system. Approximately 13 months of customer information will be moved to the new system. During this month, SCT also met with staff to conduct the business needs analysis which compares BWP's business requirements with the new system's capabilities. Areas of deficiency will be addressed with acceptance of new business practices or modifications, if necessary. The project is on-schedule and all tasks have been completed as planned.

• Refer to the attached reports from SCPPA�s Government Affair�s Manager and Morgan Mequire LLC.

RED:RAC:FCF:JWL:GLS:ph

Attachments

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