WATER UPDATE

Water Quality

• Water quality during June met or exceeded State and Federal drinking water standards. 

• The Valley Pumping Plant blend ratio for the month of June was 48% MWD to 52% BOU.

Financial and Operations Update

• Potable water sales for June were 855,882 units. This was 2% lower than the budgeted sales.  Revenue for June was $1,301,991. 

• Reclaimed water sales for June was 19,422 billing units. Revenue for June was $25,023, not including Power Plant sales. 

• The Water Cost Adjustment Charge (WCAC) account had a balance of $1,337,024 as of June 30, 2003. 

• Fiscal Year 2002-03 Year-To-Date preliminary Water Fund Financial Results as of June 30, 2003:

Environmental Protection Agency (EPA)

• BWP received a grant from the EPA to perform a Vulnerability Assessment. The Report has been filed with the EPA and the Emergency Operations Plan is being updated.  

• The design work for the modifications to the Liquid Phase Granulated Activated Carbon  (LPGAC) units has been completed. The EPA provided approval to fabricate the necessary materials. Approval for construction by the EPA has also been obtained. We expect project construction to start in late July 2003.

Capital Projects 

• Replacement of interior joints at Reservoir No. 2 is complete. The reservoir is being cleaned, disinfected, and leak tested. The reservoir will return to service in late July 2003. 

• The Water Division continues to support the Magnolia Power Project (MPP) by abandoning and relocating the water facilities on BWP�s proposed construction site. Work to relocate this 20-inch reclaimed line will be completed before the middle of July 2003. 

• The work on the 8-inch reclaimed main on Empire Ave. from Robert Gross Park to the airport was suspended during the last week of June because work has been concentrated on meeting MPP deadlines. This work is projected to be completed by the end of July 2003.   

• The painting contractor completed the interior recoating of the Brace and Haven tanks. Both tanks were back in service in June.

Legislative Update

• Refer to the attached legislative reports.

ELECTRIC UPDATE 

Electric Reliability

• There was one customer outage in June 2003. During Fiscal Year 2002-03, there were 23 outages that affected 8,991 customers. This is equal to a systemwide average of 0.1664 outages per year compared with an industry average of 1.2 outages per year. The average service availability is 99.9968%, exceeding the City goal of 99.99%. The average outage length was 91 minutes, compared with an industry average of 80 minutes.

The following table shows the systemwide reliability statistics for Fiscal Year 2001-02 compared to Fiscal Year 2002-03.

FINANCIAL AND OPERATIONS UPDATE

• MWh sales of 87,061 for June were below the budgeted amount of 97,235. Year-to-date MWh sales remain below budget due to conservation efforts and a cooler than normal summer. 

• Wholesale gross margins were above budget for the month of June. Year-to-date wholesale gross margins continue to be higher due to BWP�s ability to utilize its assets to increase sales in the wholesale market. 

• Fiscal Year 2002-03 year-to-date preliminary Power Financial Results as of June 30, 2003:

Local Generation Operations Update

Unit Status

• Olive 1 is online and available for service. 

• Olive 2 is unavailable for service until the NOx retrofit is completed which should be by the end of July 2003 at the earliest. 

• Olive 3 is available for service. 

• Olive 4 is unavailable for service and used for emergencies only.

• Magnolia 5 is available for service. 

• Lake One is available for service.

The new Olive 1 boiler fuel control and burner management system were tested and available for full load testing. Ammonia leak detectors were installed and tested at the main ammonia tank and at every Olive SCR ammonia skid. Installation of new air compressor sequencers for the Olive plant has begun.

The unscheduled outage on June 12 was due to a power failure to the Delta V controllers causing a loss of configuration control. A temporary UPS system was installed to prevent a reoccurrence and installation of an adequate permanent system remains a high priority. A data recorder installed by the Test Shop has shown 110VAC voltage drops as low as 80VAC at times. The unscheduled outage on June 22 was due to a poor connection in the generator exciter control circuit board cable pins. GE will provide upgrades on the ribbon cable replacements.

The Olive 2 retrofit progresses on schedule. The Olive 2 boiler inspections, hydrostatic testing of feedwater piping, water wash, and overhaul of equipment by Power Plant maintenance personnel was completed along with all other major electrical and maintenance procedures. BWP received replacement of the cooling tower stacks from Marley Cooling Tower Technologies and repairs are expected to be completed by the second week of July.

Lake One is available for power generation. Plant personnel continue to work on the final wiring of an emergency diesel generator while waiting on contract personnel for on-site commissioning. Staff has installed temporary baffle plates over the NOx and CO catalyst beds to redistribute exhaust gas flows. The Continuous Emissions Monitoring System (CEMS) data shows high levels of CO and NOx emissions, which are above expected performance guarantee. Power Plant personnel are investigating remedial measures to get through third quarter operations. Equipment breakdowns were reported to the Air Quality Management District (AQMD) on June 6 (high NOx), June 11 (high NOx), June 25 (high NOx) and June 27 (high CO) according to BWP permit requirements. The unscheduled outage on June 30 at approximately 16:50 - Lake 1 was shutdown due to a loss of power to the auxiliaries and was back to normal service at 23:00.

Olive 4 is unavailable for normal service due to the lack of local metering indication at the Olive Control House.

Landfill microturbines have not operated this month.

June 2003 Unit Data

Power Supply

• FERC Data Requests and Refund Calculation

On June 25, FERC released three orders related to their investigation in California�s dysfunctional market including a refund decision on the California ISO and PX. Fortunately, BWP has weathered the storm of at least two of the three Commissions. The FERC has also accepted BWP defense against the California Parties proposal of "guilt by market participation". This proposal will allow the FERC to reset the Market Clearing Price back 10 months, from October 2, 2000 to January 1, 2000, in addition to require all sellers to pay a refund on sales to the ISO or PX during the same period. This translates into a saving in excess of $1,000,000 to Burbank. If the FERC adopts our proposals, BWP can expect to receive the bulk of the $6 million owed to us by the ISO. The third commission order is for BWP to provide the FERC with additional information on any power sales over $250/MWh. Consequently, the FERC could potentially direct parties to exclude any profits from manipulative transactions.

• Restructuring of the Gas Industry in Southern California

On June 30^th, the Southern California Gas Company (�SoCalGas�) submitted a revised implementation plan for the Comprehensive Restructuring of their pipeline tariffs and operating protocols market based approach, where users would bid for rights to use their system.

• Sylmar Converter Station Replacement Project 

BWP submitted a request to the California Office of Emergency Services (OES) on June 30 for a draw down of $634,000 on the total of $2.4 million FEMA has given to OES for this project on behalf of BWP. The engineering and fabrication work associated with this project continues with a scheduled completion date in late 2004.

• Magnolia Power Project (MPP)

The items in this report are provided as a general overview of the status of the Project. These items are discussed in considerable detail among the Project Participants at the Project Coordination meeting each Friday, and at Coordinating Committee meetings.

Budget

Forecasted final costs are within budget.

Schedule

The project remains on schedule for a commercial operation date of May 25, 2005.

Finance

Project participants have been reimbursed their Planning Work and Pre-Construction costs.  A small amount of disputed costs are being retained and discussions are being held among the participants to resolve these costs.

CEC Compliance

The Conditions of Certification include 47 conditions that must be completed before start of construction. Most submittals require review and approval by the CEC Compliance Project Manager (CPM) before they are considered complete. Submittals have been made for all 47 and the CPM has indicated that only one remains to be approved before the CEC can provide a release to start construction. On July 10th, the CEC made a site visit to review the remaining issue.

Engineering, Procurement and Construction Activities since last Project Director�s Report of May 12

The following major activities were completed:

Transmission

Numerous options for the transmission of Project output to the ISO have been studied and estimated for construction.  The options that remain under consideration and being further developed include:

1. Operational arrangements with LADWP that would provide opportunities to deliver Project output to the ISO under an integrated facilities agreement. LADWP has offered a detailed proposal to the Magnolia participants, which Burbank staff is reviewing. 

2. Use of SCE�s existing 66 kV system to deliver Project output to the ISO at Eagle Rock by connecting the Burbank system to SCE�s MacNeil substation. On April 24, a letter was sent to SCE, informing SCE that Burbank will execute an agreement to authorize and fund studies on this option. Sufficient funds have since been approved to pay the application fee and to handle the system impact study. Burbank staff is preparing the formal application. Fred Fletcher and Greg Simay will meet with Lawren Minor, of SCE, to better assure a system impact study that will result in a viable alternative. 

3. Use of SCE�s existing right-of-way from MacNeil to Sylmar to deliver Project output to the ISO at Sylmar by overbuilding with either 230 kV or 69 kV lines. The letter sent to SCE on April 24 also indicated Burbank�s interest in this option.

4. Displacement of Magnolia output with eastern generation resources of Burbank and Glendale. Initial review of this option holds promise as a system sale at an ISO interconnection point such as Marketplace. A detailed review is underway.

Coordinating Committee Actions

There was no meeting held in June 2003 due to a conflict with the American Public Power Association Annual Meeting.

Project Manager's (Project Director's) Actions Since Last Coordinating Committee Meeting

There were no actions taken by the Project Manager since the last Project Director�s Report of June 16, 2003 that changed contract expenditures. Listed below are two clarifications in actions reported in the last Project Director�s Report:

• Authorization of $58,900 for Entrix to provide emissions performance consulting services [in   addition to the $22,000 pollution credit services reported in the last Project Director�s Report].

• Authorization of $307,000 for URS to provide pre-construction and post-licensing compliance services. [This is a correction to prior month�s report showing $314,000].

Key Milestones and Anticipated Significant Activities For the Next 30 Days

• July 15:             Award Zero Liquid Discharge system

• July 15:             Issue limited notice to proceed for cooling tower engineering 

• July 18:             Award contract for boiler feed pumps

• July 21:             Begin construction

• July 21:             Begin construction on 69 kV ductbanks

• July 22:             Approval of heat recovery steam generator (HRSG) foundation design by
                            Chief Building Officer  

• July 28:             Begin excavation of HRSG foundation

• Aug 1:              Award contract for oil/water separator

• Aug 3:              Award contract for air compressors and dryers

Coordinating Committee Meeting

The next meeting of the Coordinating Committee will be on August 21.

Power Supply Capital Projects

• SCADA/EMS

During June, a remote terminal unit (RTU) was installed at the Clybourn Distributing Station. Installation of the RTU at the Alameda Distributing Station is 90% complete, and installation of the RTU at the Burbank Distributing Station is 10% complete. The change out of the annunciator at the Flower Distributing Station was also completed. Drawings for San Jose�s RTU replacement were issued.

EDG Power has completed the interface of Lake 1 with the SCADA system. The work to establish Automatic Generation Control (AGC) for Lake 1 was also completed. Remote manual power output control of Lake 1 via the SCADA system was accomplished and tested. The AGC still needs to be finalized and tested. Improvement on the SCADA system database and several applications continue to progress. The application development documents for the Rotating Load Shedding and Automated Volt/VAR Switching of station capacitors were approved for final implementation.

SCADA Change Order #2 and #3 were finalized and waiting for approval from the BWP Advisory Board before they can be issued. These change orders were needed to customize application software to BWP's needs and address some networking requirements necessary to communicate remotely with BWP�s Power Plant Digital Control Systems and back-up the SCADA remote master station.

Proposals for a Scheduling and Transaction Management System (STMS) were received from nine vendors and evaluations of these proposals have been initiated.

• Telecom

A formal proposal for fiber optic service was drafted and sent to Walt Disney to connect Team Disney Building at 500 S. Buena Vista St. to RSE Station, and to connect to ABC Prospect through the LADWP fiber connection.

BWP Engineering provided a formal proposal for fiber optic service to OnFiber to connect Walt Disney at 500 S. Buena Vista St. to 500 Circle 7 Drive in Glendale.

BWP Engineering provided a formal proposal for fiber optic service to MatchFrame Video to connect MatchFrame Video at 610 N. Hollywood Way to Qwest 3015 Winona Ave.

BWP Engineering issued a job order to the Operations Section to install a fiber connection between Team Disney and CORE at 914 N Victory Boulevard.

• BWP Administration Building Remodel

Phase III of the Administration Building Remodel Project is on hold pending further review of the final set of construction drawings and specifications by RTKL Associates. An introductory meeting between the RTKL representative and BWP Building Committee was held on June 4, 2003. A detailed, organizational chart was provided to assist RTKL.

• Electrical Distribution

Rerouting of the 34.5 kV Burbank-San Jose line is completed.

Construction work 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 is completed.

Underground ductwork has been completed near Hollywood Way and San Fernando, allowing an overhead line to be rerouted along with a less visible path.

Substructure work for Phase I of the DCSB has been completed, including primary underground service to the old Wells Fargo building.

In FY 2002-03, 130 poles were replaced. Line crews are rebuilding pole lines in the Rancho area and converting the remaining portion of Feeder N-15 to 12,470 volts.

In FY 2002-03, 18 overhead oil switches were replaced, out of which 9 were issued last fiscal year. Engineering drawings were issued to enable 12 additional oil switches to be replaced with air break switches.

Seven street light improvement and undergrounding projects have been issued to the field. This includes a project to convert a series circuit at the intersection of Olive and Alameda.

Conduit work for the final phase of the Ben Mar Hills Project is completed, and conduit work for the Magnolia Boulevard Project is 50% complete.

Staff completed the AMC related work to convert and reroute the overhead services from the pole platform to the frontage on San Fernando Road.

BWP staff is participating in a Caltrans meeting to lengthen the Alameda, Hollywood Way and Pass Ave. bridges over SR-134, and developing cost estimates for Phase-2 of this project. Phase-1, which includes construction of the new Hollywood Way Substation and a transfer of load, is 30% complete. Construction of the new off-ramp was completed on June 30, 2003. BWP staff continues to expect the new Hollywood Way Station to be completed by April 2004.

Legislative Update

Refer to the attached legislative reports.

RED:RAC:FCF:JWL:GLS

H:JULY W&E OPERATIONS REPORT

Attachments

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