WATER UPDATE

Water Quality

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

• The Valley Pumping Plant (VPP) blend ratio for the month of September was 55% MWD to 45% BOU.

Financial and Operations Update

• The Water Cost Adjustment Charge (WCAC) account had a balance of $1,184,930 as of September 30, 2004.

• Fiscal Year 2004-05 Year-To-Date preliminary Water Fund Financial Results as of September 30, 2004:

( ) = Unfavorable

* Includes Power Plant Sales, Commercial and Industrial Reclaimed Sales

      ** Year-to-date actual: July-August actual and September budget

(A)       Staff is reviewing BWP�s accounting policy for WCAC. Presently, revenues are reduced by the amount of the WCAC over-collection of $219k.

(B)       Year-to-date WCAC expenses are lower due to lower spending on purchased water, chemicals and electricity.  

Fiscal Year 2004-05 preliminary Water Fund Financial Reserve balances as of September 30, 2004 are summarized in the following table:

Environmental Protection Agency (EPA)

• Calgon Corporation is working on the alternative design for the Vapor Phase Granulated Activated Carbon (VPGAC) as requested by the EPA. Construction and fabrication of the new screens will follow the EPA�s approval, which is critical in order to proceed with the project. Construction is projected to take three months once it is approved. EPA approval is anticipated at the beginning of November. Construction should begin in late November or early December. 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 the 12-inch reclaimed water main between the Empire Center and Chestnut St., along Mariposa St. and Griffith Park Dr. is completed. Costco has been connected to the reclaimed water system for irrigation. The remaining portion of the new main will be flushed and the Empire Center will receive reclaimed water in October. The tie-over has been delayed due to work on the reclaimed water pumping station at the Wastewater Reclamation Plant.

• Construction of a new reclaimed water supply line for BWP�s Administration Building air conditioning system was completed during the last week of September.

• Construction of the 12-inch water main replacement in Angeleno Ave. between San Fernando Blvd. and Third St. was completed. The main will be disinfected and put into service. This project is related to the Olson and Cusumano developments on the old Police block.  Disinfection will be finished the first week of October and the main will be put in service. 

• Construction of a 12-inch water main in Third St. between Olive Ave. and Angeleno Ave. is in progress. This project is related to the Olson and Cusumano developments on the old Police block. This project is scheduled for completion in October.

Water Improvement Project

• The Water Division is working on combining the pressure zones, which will result in reduced maintenance expenses for the Deer Canyon Tanks and the booster that fed them. In Fiscal Year 2005-06, the Water Division will remove the two Deer Canyon Tanks and make the lot available for sale. The lot should have a value over $100,000.   

Legislative Update

• Refer to the attached legislative reports.

ELECTRIC UPDATE

Electric Reliability

• There were two outages during September 2004 involving the McCambridge Distributing Station: 4 kV Feeders M-1 & M-2 were lost for 2 hours 23 minutes and 1 hour 37 minutes,  respectively.  This was due to a tree branch that fell on the lines and broke a phase conductor. As of September 30, 2004, the system wide average is 0.0706 outages per year, compared with an industry average of 1.2 outages per year. As of September 2004, the average service availability is 99.9960%, exceeding the City goal of 99.99%. The average outage length is 73.8 minutes, compared with an industry average of 80 minutes.

The following table shows the systemwide reliability statistics for Fiscal Year 2004-05 as compared to Fiscal Year 2003-04 through September 30, 2004:

Financial and Operations Update

• Fiscal Year 2004-05 year-to-date preliminary Power Financial Results as of September 30, 2004:

  ( ) = Unfavorable

 * Year-to-date: July-August actual and September budget

(A)       Lower spending in the areas of transmission and power supply divisions in addition to lower O&M expenses at IPP.

(B)       BWP received a $176k reimbursement from SCPPA for labor related to MPP. 

Local Generation Operations Update

Unit Status

• Olive 1 is in hot-standby.

• Olive 2 is in hot-standby.

• Olive 4 is available for emergency service.

• Lake One is available for service.

• The Micro-Turbine Project has been awarded to SCS Energy. The project is now in the construction phase. The micro-turbines will not be running until January 2005.

• Hydro energy production for September was 62,100 kWh compared to the goal of 81,000 kWh. The year-to-date actual hydro production is 214,100 kWh compared to the goal of 246,000 kWh.

September 2004 Unit Data

Power Supply

• FERC Data Requests and Refund Calculation

In September there was a significant development regarding this refunding matter. While FERC was making little progress on completing its refund calculations, the Ninth Circuit Court of Appeals issue a ruling into the proceeding. FERC had been taking the position that its refund authority did not reach prior to October 2000 (nearly six months after the high prices of the power crisis began). In its ruling in September, the Ninth Circuit Court of Appeals ruled that FERC was in error and that FERC needed to look again at refund obligations without being limited to the dates when it could order refunds. This ruling has the potential of exposing a lot more trading activity to refund liability. FERC is reviewing the decision to determine what its next course of action will be. At this time, the impact of this decision on BWP is unknown.

• SCPPA Natural Gas Reserve Procurement

BWP has initially committed to acquiring 1,000 Decatherms per day (Dth/day) through the natural gas reserves program, which represents approximately 5% of its future expected annual requirements. The viability to proceed is expected this fall.

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 September, Kvaerner has worked 459,689 man-hours with zero lost time cases and three recordable  cases. 

Budget

Refer to the attachment for detailed information on actual expenditures for the period ending September 30, 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 continues to review refunding proposals and has taken no action regarding the refunding of Project A bonds.

California Energy Commission (CEC) Compliance

Monthly reports are being submitted to the CEC as required. No violations of conditions have occurred.

Engineering, Procurement and Construction Activities since last Project Director�s Report of September 13

Transmission

• Southern California Edison (SCE) Tax Issues on Facilities Agreement. Discussions are continuing with SCE management to determine how SCE routinely handles tax issues on facilities improvements with municipal entities.

• Transmission Legal and Regulatory Study. Legal counsel and Black and Veatch have identified an initial set of issues to be addressed. The list of issues has been refined for further discussion among the participants.

• Scheduled Services. Several drafts of the agreement have been presented and discussed among the parties.

Coordinating Committee Actions at its meeting on September 16

• Approved selection of Gas Marketer

• Approved contract with General Electric for spare parts

• Approved sales price of property at 461 N. Varney Street

Project Manager�s  Actions Since Last Project Director�s Report of September 13

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

• Authorized  $60,000 to Alstom to extend the on-site Field Technical Advisor�s time

• Authorized $22,704 to Kvaerner to provide modification and/or repair to Alstom supplied materials for the heat recovery steam generator 

• Authorized $493,076 to Alstom for spare parts for the heat recovery steam generator.

Key Milestones and Anticipated Significant Activities For Next 30 Days

Power Supply Capital Projects

• SCADA/EMS

Work continues to make the advanced software applications operational on the Telvent SCADA/EMS.

The SCADA web-server from Telvent was placed into service and the effort to provide BWP staff intranet access to key SCADA screens on the City/BWP PC network has begun. Access was provided to several key BWP managers and staff. By mid-October, access to key SCADA screens for all remaining selected users on BWP�s PC network will be completed.

After discussions between OATI and BWP management, it was decided to continue with the effort to implement and use the OATI Scheduling and Transaction Management System (STMS) software.  During October, key BWP management personnel will visit at least one utility that is using the OATI WebTrader to observe their energy scheduling and trading process. At that time, a recommendation whether to continue using the OATI Web Trader software will be made.

The initial implementation plan for the Siemens New Energy Scheduling software for MPP was prepared and reviewed.

Telecom

Engineering developed a proposal for Ascent Media to connect FotoKem at 2801 W.Alameda Ave. to Ascent at 2901 W. Alameda Ave.

Engineering developed a proposal for The Skills Actors Group to connect West Olive Plaza at 3601 W. Alameda Ave. to the Qwest Cyber Center at 3015 Winona Ave.

Engineering developed a proposal for Ascent Media to connect Ascent at 2130 Hollywood Way to the Qwest Cyber Center at 3015 Winona Ave.

Engineering developed a proposal for Ascent Media to connect Ascent at 2901 W. Alameda Ave. to FotoKem 2801 W. Alameda Ave.

Engineering personnel released, and BWP field personnel completed, a fiber optic job for Warner Bros. to provide an additional fiber connection between Warner Building 157 and the Warner Ranch.

Engineering released a fiber optic job to install a new 144-strand fiber backbone cable from Olive & Lake to the MPP Service and Control Building.

Engineering released a fiber optic job to connect the Olive Switching Station GIS control room to the Lincoln Station 69 kV relays, and to the SONET ring.

Engineering released a fiber optic job to disconnect the Warner W3 link from Warner Building 157 to Warner 3500 W. Olive Ave.

Engineering released a fiber optic job to connect a redundant link to LADWP RSE station. BWP personnel will terminate fiber couplers at the LADWP RSE Station.

BWP Administration Building Remodel, Phase III Interior Remodel

The material, finishes and color board is being developed by RTKL Architects based on the final approvals received from BWP management. Final interviews were conducted with Electrical Engineering and Finance personnel for the requirements needed to complete the individual office space diagrams. Perkowitz + Ruth and Associates submitted proposals for the structural, electrical, mechanical and plumbing requirements needed to complete the construction documents.  

Electrical Distribution

Construction work for extending the ducts and manholes along Oak St. from California St. to Buena Vista, and along Buena Vista to Edison Rd. is complete. Underground cable has been delivered and installation is approximately 90% complete. One out of two lines is completed and energized.

Since July 2004, 51 power poles have been replaced, with 3 poles replaced in September. BWP Electrical Engineering continues to design a pole line rebuild in the area between Clybourn and Pass Aves. north of Verdugo Ave.  In September, 30 pole replacements were engineered, with a total of 62 engineered and 53 issued since September.

Since July 2004, 4 pad mounted customer stations were engineered and issued to the field and 3 pad mounted transformers have been energized.

Construction is in progress for the second phase of the streetlight system undergrounding on Magnolia Blvd. between Pass Ave. and Buena Vista St. The private contractor, Steiny and Company, Inc., has completed the installation of streetlight conduits. The streetlight crew is installing underground conductors and adapters, which will serve as power sources for the Magnolia Park street decorations.

Since July 2004, 14 additional streetlights (including 6 pole-mounted lights) have been engineered in response to requests from residents, with 12 lights installed.

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

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. Construction started at the end of March as scheduled. The GIS equipment is manufactured, tested, and ready to be shipped. The GIS equipment, control building, and all protection and controls arrived on site in June 2004. All GIS and control/protection equipment was set on the pad and assembly work is almost complete. Testing and commissioning of this project has already started.   

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 kV cable for the Olive-Lincoln lines was delivered by the end of August and the Olive-Lincoln #1 and #2 cable has been pulled. BWP crews are working to complete the splicing and termination of lines.

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 transformers (GSU) and other related power transformers were manufactured, tested, and shipped from Turkey in early June 2004. These transformers arrived on site and were set on the pads. The 69 kV cable delivery was shipped on August 28, 2004 and arrived on site before September 3. Eighteen runs from the MPP GSU to the GIS were pulled.   

BWP staff is working on the Olive Switching Station retrofit by upgrading circuit breakers, busses and other equipment. This upgrade is needed for MPP. Approximately 40% of the work is complete. The Olive-Lincoln #2 breaker was replaced and is currently being tested. The B-3 bank breaker position initialized on September 9 is complete.

BWP Electrical Engineering has completed the design for the new underground ducts installation along Verdugo Ave. from Kenwood to California St. The underground duct work at Verdugo Ave., from Frederick to Buena Vista and along Buena Vista, was started on October 6 and will be completed by December 7, 2004.

A total of 140 remote meters were installed in August; 43 were requested by the Customer Service Division, and 68 were meter change-outs performed by the Line Crews or Test Shop.

Customer Service

Effective October 1^st, 2004, BWP introduced the ability to communicate with customers in up to 150 languages. The service, provided by Language Line Services, is accessed through a toll-free number where our Customer Service Representative, our customer, and a professional interpreter can converse on a three-way call. The service will be utilized by all aspects of the division including the Call Center, Cashiers, Credit and Collections, Billing and Conservation. This enhancement offer is a way to improve efficiency while continuing to provide the best customer service possible.

BWP Customer Service �Wins Utility Award for CIS�.  BWP Customer Service competed with seven other municipal entrants for the 2004-2005 Utility Award for CIS/CRM Exceptional Performance. The award recognizes utilities for exceptional customer care and related information technology initiatives. The judging panelists for this year�s award were professionals representing utilities worldwide including Portland General Electric, Electricite de France (EDF), and Entergy.  The judges scored the applicants in four key areas of achievement and excellence: 

• Project Mission Statement & Description

• Justification & Goals

• Overall Project Timeline Description

• Detailed Project Accomplishments & Benefits

The winners will be honored at a small event in the spring where they can share their experiences and lessons learned with others.

Legislative Update:

Refer to the attached legislative reports.

RED:RAC:FCF:JWL:GLS:JLF

H:OCTOBER W&E OPERATIONS REPORT

Attachments

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