WATER UPDATE

Water Quality

     �        Water quality during September met or exceeded State and Federal drinking water standards.

     �        The Valley Pumping Plant blend ratio for the month of September was 56% MWD to 44% BOU.

Financial and Operations Update

     �        Potable water sales for September were 961,842 billing units. This was 2% lower than the budgeted sales. Revenue for

          September was $1,488,318.94.

     �        Reclaimed water sales for September were 35,542 billing units. Revenue for September was $46,476.51, not including

           Power Plant sales.

     �        The Water Cost Adjustment Charge (WCAC) account had a balance of $1,168,189.83 as of September 30, 2003.

     �        Fiscal Year 2002-03 Year-To-Date preliminary Water Fund Financial Results as of September 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. Certification of completion was required by September 5^th.  All work proposed under the grant has been completed.

�        Modifications to the Liquid Phase Granulated Activated Carbon (LPGAC) units have been approved by the EPA and construction is underway. Construction is estimated to continue until December 2004. The Treatment Plant will experience reduced operating capacity during construction. The reduced production will result in the need for additional purchased water. 

�       

Capital Projects

     �        Replacement of interior joints at Reservoir No. 2 is complete. The reservoir has been cleaned and disinfected, and is

           currently being leak tested. The results of the leak testing requires additional work by the contractor. The work will begin the

           third week of September. The reservoir will be returned to service by late October 2003.

     �        The project to install 1,100 L.F. of 12-inch water main in Buena Vista St. from Alameda Ave. to Olive Ave. began the last

            week of August 2003. Completion is scheduled for mid October.

     �        Construction of a new 8-inch water main in Olive Ave. from Kenneth Rd. to Seventh St. is scheduled to begin in mid

           October.

Legislative Update

     �        Refer to the attached legislative reports.

ELECTRIC UPDATE

Electric Reliability

     �        During September 2003, there were two outages that affected 76 customers.  This represents a systemwide average of 0.0802 outages per year compared with an industry average of 1.2 outages per year. Since July 1, the average service availability is 99.9939%, exceeding the City goal of 99.99%. The average outage length was 99 minutes, compared with an industry average of 80 minutes.

The following table shows the systemwide reliability statistics for Fiscal Year 2003-04 through September 2003, compared to Fiscal Year 2002-03.

Financial and Operations Update

    �       MWh sales of 107,184 for September were above the budgeted amount of 99,132. Year-to-date MWh sales remain equivalent to budget.

    �        Wholesale gross margins were above budget for the month of September due to BWP�s ability to utilize its assets to increase sales in the wholesale market.

     �        Fiscal Year 2003-04 year-to-date preliminary Power Financial Results as of September 30, 2003:

Local Generation Operations Update

Unit Status

     �        Olive 1 is online and available for service.  Installation and programming of the plant air compressor sequencer panel was completed.

     �        Olive 2 is online for testing. It is restricted for service until the NOx retrofit is completed. The retrofit is behind schedule and expected to be completed by the first week of October. This unit is currently restricted to 30 MWh until the repair of the 2A boiler feed pump is completed. It is expected that this unit will be 100% available for service by mid December. Plant personnel are currently working on updating operational procedures for startup and shutdown.

    �        Olive 3 is unavailable for service and used for emergencies only.  It is out of service due to problems with fuel valve controller-wiring.

     �        Olive 4 is available for service.

     �        Magnolia 5 is available for service.

    �        Lake One is available for service.  Lake One continues to have problems with A3 transformer trips causing a loss of auxiliary power to the unit. A report of the breakdown due to this problem was filed on September 23 with AQMD. Loss of power caused the control panel for the ammonia vaporizer skid to not be available for a requested startup. The heater setpoint defaulted to a lower temperature that would not let ammonia flow begin when needed.

    �        Landfill microturbines have not been operated this month. The consultant is preparing a presentation for the microturbine upgrade project.

September 2003 Unit Data

Power Supply

     �        Restructuring of the Gas Industry in Southern California

Due to the number of complaints filed concerning the revised implementation plan for the Comprehensive Restructuring of Southern California Gas Company (�SoCalGas�), the California Public Utilities Commission (CPUC) told SoCalGas to resubmit a plan that is more consistent with the terms of the original settlement. The CPUC also asked SoCalGas, and other interested parties, to develop a list of changed circumstances and how they impacted the settlement, since the original settlement was signed. Despite submittal of the changed circumstances to the CPUC Commissioner in mid September, in late September the CPUC instructed SoCalGas to implement the original settlement. None of the changed circumstances submitted in mid September were taken into consideration. Many of the original signatories are withdrawing their support to the restructuring plan, predominantly due to the passage of time and changed circumstances. The restructuring proposal will result in an increase in costs and a decrease in reliability, therefore, BWP will continue to work with other utilities to have the proposal modified or dropped altogether.

     �        Sylmar Converter Station Replacement Project

BWP received a check in the amount of $570,000 from FEMA which was related to the draw down request initiated in June. BWP is expected to make a second request for the same amount shortly in addition to another draw down request to the State of California for $150,000.

The engineering and fabrication work associated with this project continues with a scheduled completion date in late 2004. LADWP held a meeting to update project progress with other project participants. This project remains on schedule and within budget.

     �        Magnolia Power Project (MPP)

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

Safety

The Project goal is zero recordable accidents. Through September, Kvaerner has worked 20,056 man-hours with no recordable accidents.

Budget

The process to develop a revised construction budget has begun.

Schedule

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

Finance

The participants are reviewing proposals for a project refinancing. All of the proceeds from any refinancing would be directed to the refunding of a portion of the existing Project A  bonds.

CEC Compliance

The CEC requested, and the Project submitted, additional environmental information on two offsite areas that will be used for storage and off loading heavy equipment. Monthly reports are being made as required by the CEC.  No violations of conditions have occurred.

Engineering, Procurement and Construction Activities since the last Project Director�s Report of September 15

Transmission

LADWP staff is reviewing the Letter Agreement that will serve as the Facilities Agreement between Burbank and LADWP for the Project�s share of the breaker upgrades at Receiving Station E. The Letter Agreement with Burbank is the quickest route to conclude this matter. (The Interconnect Agreement between Burbank and SCPPA will require some modifications to allow the Project to reimburse Burbank for the facilities cost.)

Studies for various regulatory, contractual and physical options for the transmission of Project output to the ISO are essentially complete, and Burbank and Glendale are starting to look at the economic feasibility.

Physical ties involving Edison continue to be actively pursued. The Electric Division�s Assistant General Manager and staff are developing a timeline for the physical options.

Staff is continuing to review LADWP�s proposal for operational arrangements with LADWP that would provide opportunities to deliver Project output to the ISO under an integrated facility agreement.

Coordinating Committee Actions at its Meeting on September 17

• Authorized award of contract to lowest evaluated bidder for generator step up and auxiliary transformers in compliance with SCPPA requirements

• Authorized award of contract for Gas Insulated Substation facility to ABB

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

With consultation and agreement from Project Participants, the following actions have been taken:

• Authorized ($7,165) deducted from Kvaerner for reduced performance bond cost associated with work removed from their scope.

• Authorized $120,357 to Kvaerner for condenser upgrades (L-317 Stainless Steel tubes and a larger hotwell).

• Authorized $10,000 to Navigant � half for transmission study services and half for transmission related licensing compliance assistance.

• Authorized $5,000 to Fulbright & Jaworski to expand their displacement study review work to include examination of the transmission system agreements of Colton, Glendale, and Pasadena.

• Authorized $511,247 to Kvaerner for pump and piping upgrades associated with higher capacity A-14 steam turbine.

• Authorized ($197,076) deducted from Kvaerner for deletion of 34.5 kV breakers and 72 kV class disconnect switches and termination structures.

• Authorized $355,000 for Alstom to furnish a two-piece stack in lieu of a 46-piece stack; this includes painting of the stack at the shop.

• Authorized ($310,206) deducted from Kvaerner to delete stack assembly work required to weld and assemble a 46-piece stack furnished under the HRSG contract and replace it with a two-piece stack furnished under the HRSG contract.

• Renewed Professional Service Agreements for on-going consulting services with Bibb and Associates, Gary Rose, Bruce Blowey, Tom McGuinness, Eldon Cotton, and Beth Neaman. 

• Authorized $439,409 to Kvaerner to add a tank and two pumps to accept RO permeate from the Puretec water treatment plant and send it to the demineralizer.

• Authorized entering into an agreement with the Gas Company to furnish and install equipment to interconnect the Project with Gas Company facilities for an estimated cost of $368,709.

Key Milestones and Anticipated Significant Activities For the Next 30 Days

Coordinating Committee Meeting

The next meeting of the Coordinating Committee will be on November 20. 

Power Supply Capital Projects

     �        SCADA/EMS

All drawings for the RTU upgrades have been issued.

Installation and testing of the San Jose Distributing Station RTU is complete. Installation of the Golden State RTU is 50% complete.  Work will begin on the Pacific RTU in October. By the end of October, all RTUs will be installed and tested, except for the RTU at the new Hollywood Station, which is under construction. Conversion of the map board is now complete for all stations on which RTU�s have been converted to date. Conversion of the map board is 50% complete and will display the breaker status for all stations by the end of October, except for the new Hollywood Way Station.

Staff has developed screens and configured 15 new station annunciators into the SCADA database. These new displays mimic the annunciator panels at the various stations and therefore, tell dispatchers the specific reason for an alarm, allowing them to operate more efficiently and avoid making unnecessary trips to stations.

Change Orders No. 2 and No.3, approved by the BWP Board in August, are delayed over insurance issues with Telvent. These change orders allow delivery of the back-up server and provide funding for completion of Stage 1 advanced applications, networking and security features, and the daily operating database for Opera.

Evaluation of the proposals for a Scheduling and Transaction Management System (STMS) from nine vendors is completed. At the September Board meeting, approval was given for staff to enter into a contract with OATI, Inc.  

     �        Telecom

BWP Engineering provided a proposal to Ascent Media for fiber optic service to connect 2901 W. Alameda Ave. to Digital Symphony 1011 W. Alameda Ave.

BWP Engineering provided a proposal to Warner Brothers for fiber optic service to connect Warner Building 157 to the Dalts Building at 3500 W. Olive Ave.

BWP Engineering provided a proposal to FotoKem for fiber optic service to connect 2801 W. Alameda Ave. to 2801 W. Olive Ave.

BWP's formal proposal was accepted by FotoKem to have BWP provide a fiber optic connection between FotoKem at 2801 W. Alameda Ave. to the Fairmont Building at 4111 W. Alameda Ave. A job order was generated and released to the Operations Section in order to complete this request.

     �        BWP Administration Building Remodel

RTKL Associates submitted three renditions showing various designs and floor space options for Phase III of the Administration Building Remodel Project. The three submittals were reviewed and a single option will be selected. RTKL will generate a final/preliminary space allocation drawing/design along with a report for BWP's review and approval. This project has been on hold pending this review of the final set of construction drawings and specifications by RTKL Associates Inc.

     �        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.

Since July 1, 2003, a total of twenty-eight pole replacements/ installations have been issued to the field, with eleven replacements occurring in September. Fourteen poles have been replaced in this fiscal year, nine of which were replaced in September.

Since July 1, 2003, eight pad mounted customer stations have been engineered, two of which were engineered in September. Since July there have been two pad mounted customer stations issued to the field.

Construction is underway for the relocation of the BWP facilities located at the main Warner Bros. site. Per Warner Bros. request and at their cost, this work is scheduled to be completed by the end of October.

Three oil switches were replaced in September and three were issued to the field. The remaining nine oil switches will be replaced with air break switches in this fiscal year.

Three street light improvement and undergrounding projects, and two series circuit conversions to low voltage have been engineered (Glenoaks Blvd. between Orchard and Tulare and Olive Ave. between Kenneth and Fifth Ave.).

All work for the final phase of the Ben Mar Hills Project is completed and the Magnolia Boulevard Project is still under construction. The second phase of the Magnolia Boulevard Project between Pass Avenue and Buena Vista Street is being engineered. 

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.

There are 324 installations of remote-read meters as of September 26, 2003.

    �        Customer Service

The Customer Service Division is implementing the Indus Banner billing system to enhance accuracy and timely customer bills. The system is expected to go live in June 2004.

Project Overview:

    �        78 deliverables, 47 completed, 60% complete.

    �        Indus implementation budget $2,261,012, expended $772,547, or 34%.

    �        Total project budget $4,678,300, expended $2,512,906, or 54%.

Phased Implementation

    �        Phase I (Go-live) - produce, process, and record accurate and timely paper bills; accept, process, and record all current payment methods.

    �        Phase II - implement web-based system features to allow customers to view account information and pay over the Internet.

    �        Phase III - implement interfaces to meter inventory systems, GIS, and other systems.

Conversion and Testing

    �        Phases II and III of the conversion-mapping document have been signed off.  

   �        Phase II data has been converted and delivered for review. Phase II data contains all information related to services and meters.

    �        Phase III data, the financial data, will be delivered on October 20.

    �        The core team has written test and are currently testing the scripts for over 20 key functional areas such as: creating a new customer; creating a new premise; creating a service order; budget billing; creating letters; and diversion tracking. These are only a representative sample of functional areas and there are still many more yet to be created to test rates and billing. For each functional area, there are typically 10-20 subtasks, which describe discrete processes within that area.

   �        Staff from BWP and Public Works (PW), not the core team, are assisting with the testing. The core team gets some additional help with the tedious and time consuming testing task. The other purpose is to have more staff expose to the new system, increasing their familiarity and therefore their comfort.

Data Clean Up

    �        The majority of data clean-up activities have been completed. Clean-up will be an on-going process since the process of conversion and testing will undoubtedly identify problems and quirks that haven�t been addressed.    

    �        During the clean-up process, BWP and PW staff cleaned-up and consolidated the NAICS codes, formerly known as SIC to make classifying businesses easier in the future.

   �        Staff is still working on consolidating Charter and Caltrans accounts. They are also working on getting appropriate addresses for some City and school accounts.

End User Training

    �        End user training will begin in November. The purpose of this training is to educate all high level users on basic system navigation during the month of November. These users will then be able to assist the core team during User Acceptance Testing, which begins in January 2004.

    �        More targeted training will be scheduled for the following months with significant training conducted before the go-live to refresh memories and provide an overview for the less intensive users.

     �        An invitation has already been issued to inquire the name of staff members who will need training on the system.

    �        A comprehensive training schedule will be issued as soon as the Customer Service Division receives responses back from all the departments/divisions regarding who to include in the training.

System Testing

    �        System testing will be conducted during November and December.

    �        System testing is the first full test of the system and focuses on the modifications and interfaces.

    �        Real data from the legacy system will be captured during the first week of October and November for system testing

Information Technology (IT)

 �        All Oracle databases are being upgraded from 8i to 9i.

    �        It was agreed that IT doesn�t have the necessary skills to independently perform the tasks required to successfully complete this implementation. Staff has received approval from the City Council to proceed with an amendment to the Indus agreement to provide supplemental implementation support services and knowledge transfer to IT staff. The amendment, in addition to total project budget, is for an amount not to exceed $1 million.

     �        An IT project manager is being hired to further support the implementation effort.

Miscellaneous

    �        It has been decided that we will not go forward with FERC accounts at this time. The existing chart of accounts will be used to set up the new system. 

    �        BWP and Building Division staff met to discuss new processes for handling building inspections and electric service turn-on. The new system will allow BWP to create electronic service orders which can be sent between Building and BWP and we can eliminate the current procedure which involves phone calls, faxing, and snail mail.

Legislative Update

Refer to the attached legislative reports.

RED:RAC:FCF:JWL:GLS

H:OCTOBER W&E OPERATIONS REPORT

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