WATER UPDATE

Water Quality

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

• The Valley Pumping Plant (VPP) blend ratio for the month of May was 55% MWD to 45% BOU. The average year-to-date VPP blend ratio is 54% MWD to 46% BOU.

Financial and Operations Update

• Potable water sales for May were 948,276 billing units. This was 29% above the budgeted sales. Revenue for May was $ 1,380,452. Year-to-date potable water sales is 8,807,563 billing units or about 2% above year-to-date budget.  

• Reclaimed water sales for May were 26,983 billing units. Revenue for May was $35,287, not including Power Plant sales. Year-to-date reclaimed water sales is 220,071 billing units or 21% above year-to-date budget. 

• The Water Cost Adjustment Charge (WCAC) account had a balance of $ 1,682,139 as of May 31, 2004. 

• Year-to-date purchased water is slightly higher than budget due to construction of the Liquid Phase Granulated Activated Carbon (LPGAC) units, therefore, reducing operating capacity to 62%, compare to the budgeted capacity of 70%. 

• Year-to-date direct expenses are lower than budget due to lower operating capacity and items budgeted but not expensed yet this fiscal year. To date, electricity, chemical, professional and private contractual service expenses are approximately $400,000 under budget.     

•  Year-to-date allocated operating expenses are lower than budget mostly because the overhead allocations in the Fleet and Warehouse section are recorded as contra expenses rather than revenues.    

• Year-to-date other income is higher than budget primarily due to water treatment and pumping income from Valhalla Memorial Park.   

• Fiscal Year 2003-04 Year-To-Date preliminary Water Fund Financial Results as of May 31, 2004:

( ) = Unfavorable

* Excluding Power Plant sales.

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

Environmental Protection Agency (EPA)

• Modifications to the Vapor Phase Granulated Activated Carbon (VPGAC) units are being designed by Calgon Corporation. The design work began in January. EPA approval of the design is the controlling feature in proceeding with the project. Fabrication of the new screens and construction will follow the EPA approval. Construction is projected to take three months once it is approved. The Treatment Plant will experience reduced operating capacity during construction, therefore, there will be an increasing need for purchased water from the Metropolitan Water District (MWD).

Capital Projects

• Construction of a new 12-inch main in South San Fernando Blvd. between Verdugo Ave. and Santa Anita Ave. began in April. This construction is related to the Senior Artist Colony project and was completed in May 2004. Tie-overs of existing services to the new main is in progress.  

• Construction of the 12-inch reclaimed water main between the Empire Center and Mariposa Street began in Griffith Park Drive. Completion is anticipated for the end of June.  

• Construction began to upgrade the Via Montana booster station at the intersection of Sunset Canyon Dr. and Via Montana. Completion is scheduled for the end of June.  

• Construction of a new reclaimed water supply line for the BWP Administration Building air conditioning system is underway. The existing line is being displaced by the MPP project. Work has been temporarily suspended because of a congested construction site. Completion is scheduled for late June or early July 2004.

Legislative Update

• Refer to the attached legislative reports.

ELECTRIC UPDATE

Electric Reliability

• There were fourteen outages during May 2004. Thirteen of these outages involved the loss of NBC and Alameda Stations on May 3 for 8 minutes. This was due to an inadvertent error that occurred while trying to reduce a serious overload elsewhere on the power system.  The remaining outage was for the loss of Alameda 4 kV Feeder A-9 for 1 hour and 22 minutes on May 16 due to a Mylar Balloon. As of May 31, 2004, the systemwide average is 0.3568 outages per year, compared with an industry average of 1.2 outages per year. As of May 2004, the average service availability is 99.9966%, exceeding the City goal of 99.99%. The average outage length is 45 minutes, compared with an industry average of 80 minutes.

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

Financial and Operations Update

• Year-to-date retail margins were higher than budget mainly due to cost savings from power contract negotiations and cost savings from the resale of coal related to the IPP.  

• Year-to-date wholesale gross margins were higher than budget due to BWP�s ability to utilize its assets to increase sales in the wholesale market. 

• Year-to-date other income was higher than budget mainly attributed to the FEMA grant due to the 1994 earthquake for the Sylmar retrofit project.

• Fiscal Year 2003-04 year-to-date preliminary Power Financial Results as of May 31, 2004:

 ( ) = Unfavorable

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

* Note: There is a payment of approximately $9 million for principal and interest on Fund 496 Bonds due on June 1, 2004.

Local Generation Operations Update

Unit Status

• Olive 1 is in hot-standby and available for service.  

• Olive 2 is unavailable due to the 69kV upgrade in the Olive switchyard. This unit will be available on June 14, 2004. 

• Lake One Selective Catalytic Reduction (SCR) modifications are complete. This unit is available for service.  

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

• Hydro Energy Production for May was 85,100 kWh compared to the goal of 58,000 kWh. Year-to-date kWh production of 798,500 was above the kWh goal of 642,000.

May 2004 Unit Data

Note: These units were retired on 12/31/03.

Power Supply

• FERC Data Requests and Refund Calculation

To date, BWP has been working with FERC to get the $ 6 million owed by the California ISO. This trading was facilitated by Sempra Energy Trading on behalf of BWP with the California ISO. In May 2004, FERC has decided that it will no longer work directly with BWP on the $ 6 million refunding issues. Furthermore, BWP will have to work directly with Sempra because this refund is now under the Sempra refund umbrella. BWP is currently working on the appropriate legal strategy to recover this money that is owed to BWP.  

• Restructuring of the Gas Industry in Southern California

As previously reported, the California Public Utility Commission�s (CPUC) Commissioners voted out a Decision approving implementation of the Gas Industry Restructuring (GIR) Order D. 04-04-015 on the SoCalGas intrastate pipeline system last April. The decision directed SoCalGas to hold off implementation of the GIR on SoCalGas� intrastate pipeline system after an initial decision on Phase I, R. 04-01-025 is expected this summer.

On May 27, the CPUC unanonimously voted out a decision stating that GIR order, D. 04-04-015, will not automatically expire when the Phase 1 decision is issued in the long-term gas supply Order Instituting Rulemaking (OIR), R.04-01-025. An affirmative action of the CPUC is required for the implementation of the GIR.

Current pending SoCalGas and SDG&E Biannual Cost Allocation Proceeding (BCAP) applications were dismissed at the May 27^th meeting. Utilities will file new BCAP applications 120 days after an affirmative Commission action lifting the aforementioned stay or �as otherwise ordered by the Commission�.

• Sylmar Converter Station Replacement Project

The engineering and fabrication work associated with this project continues on budget with a scheduled date of 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.

Safety

Through May, Kvaerner has worked 237,792 man-hours with no lost time cases and three recordable cases.

Budget

Refer to the attachment for detailed information on actual expenditures for the period ending May 31, 2004.

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

The Magnolia Power Project Finance Committee reviewed refunding proposals on June 7 and it was decided by the committee that there will not be a Project A refunding at this time.

CEC Compliance

Excavation monitoring continues pursuant to 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 May 17, 2004.

Transmission

Facilities Agreement.  The Agreement was executed by Los Angeles and Burbank regarding upgrades required on the LADWP system as a result of the Project.

Transmission Study Project. The study work will begin in the near future.    

Scheduled Services. Glendale is ordering two, 2.5 ohm reactors at Western to fulfill its obligations for scheduled services.

Coordinating Committee Action at its Meeting on May 20

• Approved Resolution regarding Disposition of Test Energy by Project Manager

Project Manager�s  Actions Since Last Project Director�s Report of May 17  

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

• Authorized $60,000 to Calpine for training course and simulator training for Burbank operators. 

• Authorized $53,760 to Kvaerner to provide a sound wall divider in the Gas Compressor Building.

• Authorized $22,092 to Kvaerner to repair the stucco on the front of the Service/Control Building

• Authorized $50,033 to Kvaerner to make electrical changes in the scope in the Service/Control Building.

• Authorized $25,635 to Pacific Construction Consultants to provide additional auditing services and travel expenses to conduct the audit activities in Kvaerner�s offices in Washington, Pennsylvania.

Key Milestones and Anticipated Significant Activities For Next 30 Days

Power Supply Capital Projects

• SCADA/EMS

The old Scipar SCADA hardware was disconnected and prepared for salvage. New operating screens for the Dispatchers were developed to better operate the Capon 34.5 kV network.     Operating ratings of key equipment were updated on SCADA screens as necessary. Ratings of distribution feeders that needed updating/correcting on daily reports were identified and will be corrected as soon as possible.

The OPERA server that will provide Access database reporting capability to users was delivered by ASCE and installed for testing.

The OATI Scheduling and Transaction Management System (STMS) software acceptance testing continued during May. The work is continued on improving the responsiveness of the OATI software and its ability to provide net schedules on transmission lines. This project is scheduled to be completed in June.

• Telecom

Engineering provided a proposal to Universal Studios for fiber optic service connecting Universal Studios through Barham Blvd. to NBC studios 3000 W. Alameda Ave.

Engineering provided a proposal to SohoNet for fiber optic service connecting Warner Building 157 to West Olive Plaza 3601 W. Olive. Ave.

Engineering provided a proposal to Disney for fiber optic service connecting Disney CORE 914 Victory to Disney 640 Paula St. in Glendale.

Engineering provided a proposal to Disney for fiber optic service connecting Disney CORE 914 Victory to Disney team Disney Building 500 S. Buena Vista St.

Engineering provided a proposal to NBC Studios for fiber optic service connecting NBC Studios to LADWP Receiving Station �E� to connect to the HOY newsroom 207 S. Broadway in Los Angeles.

Engineering provided a proposal to Ascent Media for fiber optic service connecting Ascent Media 2130 Hollywood Way to 2801 W. Alameda Ave.

Engineering provided a proposal to DSW for fiber optic service connecting Burbank City Hall to LADWP Receiving Station �E� for network services.

Engineering provided a proposal to Media Net for fiber optic service connecting Lowry 2777 Ontario St. to LADWP Receiving Station �E�.

Engineering provided a proposal to Disney for fiber optic service connecting Dream Works 1000 Flower St. in Glendale to LADWP Receiving Station �E�.

Engineering released a job order to the Operations Section to provide fiber optic service connecting Warner Building 157 to West Olive Plaza 3601 W. Olive. Ave. for new customer SohoNet.

Field personnel completed a fiber optic job to provide an alternate link for Capon Station to the New Hollywood Way Station Communication Room.

Field personnel completed a fiber optic job to provide an alternate link for Modern VideoFilm to connect 4411 W. Olive to 1733 Flower St.

Field personnel completed a fiber optic job to provide an alternate link for Warner Building 157 to Warner Ranch.

Field personnel completed a fiber optic job to provide an alternate link for Warner Building 157 to RSE.

Field personnel completed a fiber optic job to provide an alternate link for Media Net to connect Warner Ranch to RSE.  This job is related to the Hollywood Way relocation project.

Engineering released a job order to the Operations Section to provide an alternate link for NBC Studios to RSE. 

Field personnel completed a fiber optic job to provide an alternate link for Capon Station to Olive Station relays. 

Field personnel completed the fiber optic job to relocate all fiber cables from old Hollywood Way Station to new Communication Room in the new Hollywood Way Station.

• BWP Administration Building Remodel

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

Painting of BWP�s Administration Building was completed.

Landscaping improvements along the Olive Avenue frontage from Lake Street to the LA County Flood Control Channel were completed.

• Electrical Distribution

Construction work for extending the ducts and manholes along Hollywood Way from the Warner Ranch Gate to Oak St., along Oak St. to California St., along California St. from Oak St. to Alameda Ave., and along Avon St. from Oak St. to the alley north of Alameda is complete. Perry C. Thomas, the private contractor for the Phase-2 has completed construction of the underground ductwork. Underground cable has been delivered and field crew has started installation of cables.

Since July 1, 2003, a total of 161 pole replacements/installations have been issued to the field. A total of 121 poles have been replaced in this fiscal year. Replacement of 30-pole line is under construction in the Media District area. In addition to pole replacements, a large area in the Media District is being rebuilt to 12 kV standards in preparation for future transfer of some Alameda feeder loads to the new Hollywood Way Station.

Since July 1, 2003, 18 pad mounted customer stations have been engineered, one of which was engineered in May. Since July, there have been 11 pad mounted customer stations issued to the field and 15 pad mounted customer stations have been energized.

Since July 1, 2003, four series circuit conversions to low voltage have been completed and twenty-five new streetlights have been installed. Three streetlight improvement and undergrounding projects have been issued and two have been completed. The design for the second phase of the Magnolia Boulevard Project between Pass Ave. and Buena Vista St. has been completed. The BWP Board awarded the bid for the substructure work to Steiny and Company, Inc. on April 1, 2004. The purchasing process was completed in May and construction is scheduled to start in June.

Replacement of the remaining oil switches with pole mounted airbreak switches has been issued to the field with the exception of the last one, Pacific-16 distributing switch, which will be removed during unloading of this feeder scheduled for November 2004.

Construction of the new Hollywood Way Substation, and transfer of load from the old Hollywood Way Station, is 100% complete. Construction of the new off-ramp was completed on June 30, 2003. The new Hollywood Way Station was completed and energized on March 1, and the remaining testing was completed by March 8. The dedication ceremony took place on March 30 and the load transfers were completed by April 30. By May 12 2004, five lines are reconfigured to connect from the Capon Switching Station, which completes the work scheduled for this fiscal year. The old Hollywood Way Substation is completely de-energized and the equipment is still on the pads ready to be removed when needed. The Community Development Department (CDD) Transportation and BWP are working on interim landscaping plan in front of old/new Hollywood Way and Alameda Substations due to delay in the construction of SR-134 on ramp project by Caltrans.

The Southern California Public Power Authority (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. ABB had two design review meetings with staff and submitted the design for Chief Building Officer (CBO) approval in the first week of February 2004. The construction started at the end of March as scheduled. The GIS equipment is manufactured tested and ready to be shipped. GIS equipment, control building and all protection and controls are expected to arrive on site in June 2004.

Bock Co. has completed the installation of 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. Both riser poles north of the Magnolia Bridge are completed along with cables to the first manholes at the northeast corner of the BWP Yard. Cable and all other related materials are ordered . This work is expected to be completed before MPP goes on-line.

The 69,000 volt underground cable and devices were ordered for making the connections from MPP to the Olive Switching station. The generator step-up (GSU) and other related power transformers are manufactured and tested and getting ready to be shipped from Turkey in early June 2004.

BWP staff is working on the Olive Switching Station retrofit by upgrading circuit breakers, busses and other equipment. This upgrade is needed for the Magnolia Power Project and approximately thirty-five percent of the work is completed.

A total of 1,536 remote meters have been installed; 802 were requested by the Customer Service Division, and 734 were meter change outs performed by the Line Crews or Test Shop.

Legislative Update:

Refer to the attached legislative reports.

RED:RAC:FCF:JWL:GLS:JLF

H:MAY W&E OPERATIONS REPORT

Attachments

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