WATER UPDATE

Water Quality

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

• The Valley Pumping Plant blend ratio for the month of January was 49% MWD to 51% BOU.

Financial and Operations Update

• Potable water sales for January were 729,073 billing units. This was 1% lower than the budgeted sales. Revenue for January was $1,235,274. 

• Reclaimed water sales for January were 12,941 billing units. Revenue for January was $16,905, not including Power Plant sales.

• The Water Cost Adjustment Charge (WCAC) account had a balance of $1,466,965 as of January 31, 2004. 

• Fiscal Year 2002-03 Year-To-Date preliminary Water Fund Financial Results as of January 31, 2004:

(  ) Unfavorable
(1) Purchased water expenses are higher due to reduced production from the treatment plant resulting in higher Metropolitan Water District (MWD) water purchases.

• Fiscal Year 2003-04 preliminary Water Fund Financial Reserve balances as of January 31, 2004 are summarized in the following table:

Environmental Protection Agency (EPA)

• Modifications to the Vapor Phase Granulated Activated Carbon (VPGAC) units are being negotiated with Calgon Corporation. The design began in January. Construction will follow in March through May 2004. The Treatment Plant will experience reduced operating capacity during construction, therefore, an increased need for purchased water.

Capital Projects

• Replacement of interior joints at Reservoir No. 2 is complete. The reservoir has been cleaned, disinfected, and is leak tested. As a result of the leak testing, additional work by the contractor is required. Localized problems with the bonding of the lining are being investigated and resolved. Additional leak testing took place in January. Resolution of the leakage is being pursued with the contractor. The reservoir will be placed back in service by March 2004.

• The project to install 1,100 L.F. of 12-inch water main in Buena Vista St. from Alameda Ave. to Olive Ave. was completed with the abandonment of the old main in January 2004.

• Construction of 140 L.F. of a new 8-inch main was completed on Palm Ave., west of 6^th St. The new main is now in service.

• Construction of a new 12-inch main on Verdugo Ave. between Third St. and South San Fernando Blvd. began in January. This construction is related to the Senior Artist Colony project and scheduled to be completed by February 2004.

Legislative Update

• Refer to the attached legislative reports.

ELECTRIC UPDATE 

Electric Reliability

• There were no outages during January 2004. As of January 2004, the systemwide average remains at 0.1965 outages per year, compared with an industry average of 1.2 outages per year. As of January 2004, the average service availability is 99.9955%, exceeding the City goal of 99.99%. The average outage length remains 68 minutes, compared with an industry average of 80 minutes.

The following table shows the systemwide reliability statistics through January 2004 for Fiscal Year 2003-04 as compared to Fiscal Year 2002-03:

Financial and Operations Update

• MWh sales of 86,874 for January were above the budgeted amount of 85,046. Year-to-date MWh sales remain above budget due to warmer average temperatures during the summer months and cooler average temperatures during the winter months.

• Wholesale gross margins were above budget for the month of January 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 January 31, 2004:

• Fiscal Year 2003-04 preliminary Power Fund Financial Reserve as of January 31, 2004 are summarized in the following table:

Local Generation Operations UPdate

Unit Status

• Olive 1 is down for its annual boiler inspection. This unit will be back in hot-standby on March 8. 

• Olive 2 is on-line for system tuning, boiler feed pump and the Relative Accuracy Test Audit (RATA) testing. The testing was completed on February 9^th and this unit is available for normal service.

• Olive 3 has been decommissioned as of December 31, 2003 per the SCAQMD permit requirements of January 31^st.

• Olive 4 has been decommissioned as of December 31, 2003 per the SCAQMD permit requirements. 

• Magnolia 5 has been decommissioned as of December 31, 2003 per the SCAQMD permit requirements. 

• Lake One is available for service.

• The Micro-Turbine Project has been awarded to SCS Energy. The project is now in the planning stage. The Micro-Turbines will not be running until the spring of 2004.

• Hydro Energy Production for January was 69,400 kWh compared to the 58,000 kWh goal. Year-to-date kWh production of 507,300 was above the kWh goal of 408,000.

January 2004 Unit Data

Power Supply

• Restructuring of the Gas Industry in Southern California

BWP staff attended a public meeting with Commissioner Wood on January 16th regarding implementation of the SoCalGas Comprehensive Settlement Agreement (CSA). This will restructure the way gas transportation is handled on the SoCalGas systems. BWP staff has been working on a letter to the California Public Utility Commission urging them not to adopt the implementation of the settlement which is scheduled to be voted on at the February 11, 2004 meeting. Letters have been prepared by and sent out by Mayor Murphy and BWP�s General Manager to the Commissioners explaining how the proposed settlement would negatively impact the Magnolia Power Project. BWP�s Legislative Analyst is working with other Magnolia Power Project participants to encourage them to send similar supporting letters.

The February 11, 2004 vote did not take place.  With the outpouring of opposition to the CSA, Commissioner Kennedy asked that the CSA be held over until the next meeting on February 26, 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

Refer to the attachment for detailed information on actual expenditures.

Schedule

The project remains on schedule for a commercial operation date of May 25, 2005. Refer to the attachment for detailed information on Project milestones.

Finance

No Project A refinancing is planned at this time.

CEC Compliance

Excavation monitoring continues pursuant to the Conditions of Certification. Monthly reports are being made as required by the CEC. No violations of conditions have occurred.

Engineering, Procurement and Construction Activities since last Project Director�s Report of January 12, 2004

Transmission

It appears that LADWP has persuaded the City attorneys in Los Angeles to accept the Letter Agreement route rather than the route of obtaining approval from the Board of Water and Power Commissioners. LADWP staff raised the issue of whether the Facilities Agreement should reflect the impacts of other LADWP stations besides Receiving Station E. BWP staff has taken the position that �a deal�s a deal� and that the Facilities Agreement should continue to reflect only the impacts on Receiving Station E.

The management teams of Burbank and Glendale have reviewed the economic feasibility of scheduled service, and have concluded that they can offer significant savings to the ISO participants in comparison to the Open Access Transmission Tariff. The Magnolia ISO participants have been informed of the deal points and the proposed savings that could be offered.

Physical ties involving Edison continue to be actively pursued. BWP staff met informally with Don Allen and have reached a preliminary conclusion that the physical option, while likely to be contested, is legally feasible.

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 facilities agreement.

At the December 18 Coordinating Committee meeting, a presentation was made on the various transmission issues and there was preliminary agreement to take steps to form a separate study group to pursue physical transmission alternatives.

Coordinating Committee Action at its Meeting on January 15, 2004  

No action items were approved.

Project Manager�s (Project Director�s) Actions Since Last Project Director�s Report of January 12

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

• Authorized $130,050 for Kvaerner to provide the required Construction Mitigation Management (CMM) assistance services for the Project from December 2003 through December 2004.

• Authorized $53,411 for Kvaerner to provide custom paint colors for the balance of plant equipment, as required by the CEC license.

• Authorized $423,573 for Kvaerner to increase the size of the ductbank to accommodate additional conductors (changing from six, 1500 MCM conductors to nine, 1250 MCM conductors per transformer).

• Authorized $120,367 for Kvaerner to provide labor and materials to paint the Combustion Turbine Generator to comply with the California Energy Commission (CEC) license.

• Authorized $133,870 for ABB to increase their scope of work to include extending the power duct banks, extending the control cable trench, relocating the control enclosure to a new location, extending the control duct package, and providing engineering of these items.

• Authorized $31,988 for GE to modify the generator control panels to match the ABB synchronizing voltage transformers (VT) that are being provided for the high voltage switchyard.

• Authorized $138,244 deducted from Kvaerner to delete the electrical fire pump and jockey pump taking water from the reclaimed water storage tank, because the City water system contains adequate pressure and flow to satisfy code requirements.

• Authorized $70,905 for Kvaerner to add vibration sensors to protect the boiler feedwater pumps.

• Renewed Professional Service Agreement for on-going consulting services with Jennifer Wu.

Key Milestones and Anticipated Significant Activities For Next 30 Days

Power Supply Capital Projects

• SCADA/EMS

One Remote Terminal Unit (RTU) remains to be installed and tested for the new Hollywood Way Station. This RTU is being designed and installed by ABB, Inc and is expected to be completed by early March.  Development of the new Hollywood Way Station displays, annunciator display, and RTU data base has been completed.

Because of the need to transfer feeders from the old Hollywood Way Distributing Station to the new one, the Scipar SCADA must be kept operational until June 30.

Delivery of the Emergency Back-up Server has been set for early March. Finalization of advanced application software and network communications with selected users will then begin.   

The Scheduling and Transaction Management System (STMS) software is being implemented. The web-based OATI software, and integration with the Telvent SCADA system is progressing on schedule and estimated to be completed by March 2004. On-site testing has begun and software acceptance testing has started with completion expected at the end of February.

• Telecom

Engineering provided a proposal to MediaNet for fiber optic service connecting Modern Video Film at 4411 W. Olive Avenue to the City of Los Angeles, LADWP Receiving Station �E� in North Hollywood.

Engineering released a job order to the Operations Section to install fiber cable and provide a second backbone through the Media District. This is in preparation for the relocation of the fiber hub from the old Hollywood Way control room to the new Telecom Room at the Hollywood Way Substation.  This will allow minimum impact on existing fiber customers.

Engineering released, and field operations personnel completed a fiber optic job for �The Switch TV�, to connect an additional two (2) fiber strands from NBC Studios to the City of Los Angeles� LADWP Receiving Station �E� in North Hollywood. This is a test connection between LADWP and BWP fiber networks to market a new service. The link provides a direct connection cross-country between NBC Burbank and NBC New York for both the Tonight Show with Jay Leno and Access Hollywood.

Field personnel completed a fiber optic job for Ascent Media to connect their facility at 2901 W. Alameda Avenue to the Qwest Cyber Center 3015 Winona Avenue.

Field personnel completed a fiber job to disconnect two (2) Warner fiber links:

1. WEA 111 N. Hollywood Way to West Olive Plaza 3601 W. Olive Avenue

2.  Warner Building 157 to Warner Empire 1935 Buena Vista Street.

• BWP Administration Building Remodel

The status of Burbank Water and Power�s Administration Building remodel remains on hold pending design changes, plan revisions and final approval.

• Electrical Distribution

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

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 complete. Perry C. Thomas, the private contractor for Phase-2 underground ductwork, started construction on October 27 and completed the installation of all manholes. They are currently working on the installation of a duct system on Oak Street near Catalina Street towards Buena Vista and California Street. This work is approximately thirty percent completed.

Since July 1, 2003, a total of one hundred two pole replacements/installations have been issued to the field, with nine replacements issued in January. Sixty poles have been replaced in this fiscal year. Construction of a 22-pole line rebuild was started in January in the area between Lincoln and Keystone Streets north of Kenneth Road.

Since July 1, 2003, twelve pad mounted customer stations have been engineered, one of which was engineered in January. Since July, there have been seven pad mounted customer stations issued to the field and eight pad mounted customer stations have been energized.

Primary service with two pad mounted switches for Senior Aerospace were energized in January.

Underground work to provide the new St. Joseph Providence Hospital building and the Burbank Medical Plaza with service availability from two different 12 kV feeders each coming from a different distributing station has been completed.

Since July 1, 2003, three series circuit conversions to low voltage have been completed and twenty new streetlights have been installed. Three streetlight improvement and undergrounding projects have been issued and one has been completed. 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 sixty percent complete. Construction of the new off-ramp was completed on June 30, 2003. BWP staff expects the new Hollywood Way Station to be completed by April 2004. By June 30, 2004 most of the 34,500 volt system will be reconfigured to connect four or five lines from the Capon Switching Station.

SCPPA awarded a contract to ABB Inc. to design/build the Gas Insulated Switchgear (GIS) expansion at the Olive Switching Station. This will connect the Magnolia Power Plant to the Olive Switching Station. The preliminary design is in process and construction is expected to be completed by November 2004.

Bock Co. is installing a new underground duct system in the BWP Yard to underground two 69,000 volt overhead lines as a part of BWP�s overall plan to improve and modernize the BWP generating site.

BWP staff has started work on the Olive Switching Station retrofit by upgrading circuit breakers, busses and other equipment. This upgrade is needed for the Magnolia Power Project.

A total of 1,013 remote meters have been installed; 609 were requested by the Customer Service Division, and 404 were meter change outs by the Line Crews or Test Shop.

• Customer Service

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

Project Overview:

• 78 Deliverables, 62 completed, 79% complete.

• Indus implementation budget, $2,261,012, expended $1,525,416,or 67%

• Total project budget, $4,678,300, expended $3,296,806, or 70%.

• Supplemental technical implementation budget, $1,000,000, expended $128,544, or 13%.

• On target for go-live by June 2004.

System Testing:

• All eighty-five issues discovered during system tests have been resolved and closed.

• User Acceptance Testing (UAT) began January 7, 2004, with a kick-off meeting to introduce the concept and process of UAT to the core team and an expanded group of thirty-two testers from various departments and work groups who participated in the UAT process.

• UAT is a disciplined comprehensive process of testing and verifying our business processes to ensure that the Banner application, set up, and production environment work together correctly and that the system�s accessibility and functionality meet functionality.  The UAT plan is attached for your information.

• Using both the core team and the expanded group of testers in the UAT was very successful. Not only did the core team need the extra hands, but it allowed the testers and high-level system users to get exposure to the new system, and gain familiarity prior to go-live.

• During the UAT, actual legacy transactions were captured on three separate dates during the month of January. These transactions were then duplicated in Banner, processed in Banner, and then the output verified and balanced against Legacy outputs.

• To date, UAT testing has resulted in ninety issues. Forty-nine are now closed.

End User Training:

• All Departments were asked to submit names of those staff members who will need to access the Banner system. A total of ninety-five names were submitted. Thirty-two testers have already been trained through the UAT process. The remaining sixty-three will be trained in small groups by their representative on the core team.

• Training began in February and will continue through go-live as needed.

Conversion:

• A full data conversion was completed in January in preparation for the UAT. 

• Conversion issues continue to arise as expected. Most are solved by the Indus conversion specialists, but some problems are better solved by continuing to clean the Legacy data.

• Another full conversion was completed during the first week of February to incorporate fixes performed during January.

• One piece of good news is that the financials balanced within pennies.

Mock Go-Live Weekends:

• Staff has decided to conduct two mock go-live weekends to identify any bugs or holes in the go-live plan, to refine our timing estimates for go-live activities, and to ensure everyone is familiar with the process and their role.

• Mock go-lives are scheduled for February 28-29 and March 20-21.

• A detailed go-live plan is being prepared.

Bill Print:

• Staff has printed residential bills successfully, although several fields of information were not accurate.

• Group 1, our bill print vendor, has dropped code to fix several of the identified bill print problems. Staff is waiting for the second fix. 

• Large customer bills have not been produced yet.

• The format for totalized bills has not been finalized.

• With the legacy system, our OCE printer was programmed to handle the bill formatting.  With the Banner system, Group 1 can handle bill formatting. Banner does not produce collection notices as part of the batch bill run but they�re really not a bill, per se, merely a reminder or notice to the customer about a bill already produced. The only problem this creates for us is that OCE may still have to do some formatting for the notices, meaning programming and unexpected expense. The Indus project manager is working on this problem. 

Technical Issues:

• The last two interfaces have been delivered, Itron and GL. All modifications and interfaces are now being tested.

• The BillGen database, complex billing engine for the Banner application, has been updated again, to version 8.7.88. This version solves several problems discovered during system testing.

• Oracle databases have been upgraded to Oracle 9i.

• IT has loaded updated Oracle drivers on the Integrated Voice Response (IVR) server to allow our IVR vendor to remotely install and test their portion of programming required to interface with Banner.

• IT spent significant time testing the backup/failover mechanism between the production servers to the development servers to ensure there is no single point of failure for the Banner systems.

• The first batch process has been developed and was run in January. The batch process is the nightly process that calculates and prints bills, posts payments, updates files, and creates reports. 

• Indus and IT are working on a technical cut-over plan to transition support of the system from Indus to IT. 

• IT has created most of the forty custom reports requested by system users, which will be included in the nightly batch process and produced for user review, testing, and verification.

• IT is working to ensure that all appropriate workstations are configured properly and Banner icons are installed for all system users.

Customer Issues

• To make the conversion and go-live weekend cleaner and less complicated, staff has decided to true up all level pay customers in February, before going-live, instead of the regular true up month, October. Level pay customers will receive a letter with their February bill informing them that either a credit or debit will be displayed on the bill, which closes out their level pay status for the time being. Customers will be placed back on the program automatically in April. In addition, customers were informed that Banner has a different true up mechanism than Legacy. Rather than a lump sum credit or debit in October, Banner will assess the customer�s situation after one year and will automatically spread any lump sum, positive or negative, over the following twelve months.

• Staff is preparing to accept credit cards over the phone and internet at go-live. Bank fees for credit cards can be a huge liability if larger customers elect to pay their bill with a credit card. Billers are not allowed to charge a convenience fee to cover the costs, however, a third-party provider can. To minimize costs and place the cost of a service firmly with the one that benefits from the service, the City has elected to use a third-party provider rather than pay the bank fees as a cost of doing business. The City Treasurer is working on an agreement with Official Payments to be our third-party provider of this service and expects to request City Council approval in early March. Official Payments uses an escalating fee schedule to charge customers a convenience fee based on the amount of their bill.

• BillGen was recently added to the Banner suite of products. As such, it is not fully integrated into the Banner application. One of the key issues is that BillGen calculates the complex rates and sends them to Banner for handling and bill print along with the rest of the Banner accounts. However, BillGen can not pass the rate algorithms to Banner and therefore, those bills will only display consumption data and amount due. Currently, the bills display the actual formula used to calculate the amount due so the customer can double check the figures. Indus does have a solution, Enerlink.net, which allows BillGen customers access to detailed account information over the internet. Although internet account access was originally planned for Phase II of the CIS implementation, this glitch necessitates making the Enerlink.net application available at go-live. Staff is currently working on where the application will reside 

• Staff is still planning to implement the application, which will allow the balance of customers to access their account information over the internet before the end of the calendar year. This requires the purchase of a server, which is being requested in the Fiscal Year 2004-05 budget.

Project Issues:

• The decision has been made to minimize printing paper reports. Banner reports, E-Dash reports (high level, summary information), and custom reports developed by IT can all be accessed on line. Ideally, all reports will be accessible from one portal. Indus and IT are working on the best solution, either through E-Dash or Banner�s electronic work queue.

• Staff is considering two options for handling intra-City accounts. The first option requires setting up master accounts for each department and then determining appropriate accounts and cost centers to be linked to the master account. Each month, staff would get a report of the charges and manually post payments to the accounts. The second option requires Indus to program these transactions so that when the accounts are billed, the payments are posted and the A/R is cleared. This would eliminate the need to manually enter payments each month. Both options would be set up so the cash, expenses, and A/R would automatically transfer to the appropriate funds when the payment posts. The preliminary estimate for this work is thirty-two hours, or $5,728. 

• BillGen testing has been slow and still remains a concern. Staff may request an additional week of on-site time for the BillGen programmer.

 Financial Issues:

• Indus has agreed that water and electric demand were, in fact, within the original scope of work to be performed by Indus. This means that the charges for those modifications will be paid by Indus. This equates to 439 hours, or $78,000.

• The following change orders impacting the budget have been agreed to:

Legislative Update:

Refer to the attached legislative reports.

RED:RAC:FCF:JWL:GLS:JLF

H:FEBRUARY W&E OPERATIONS REPORT

Attachments

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