CC/RDA/CUA SPE MIN 2010 JUL 28 - Laserfiche WebLink

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✓ Infrastructure development and maintenance functions Methodology Conducted in accordance with Government Auditing Standards, by the Comptroller General of the United States, U.S. Government Accountability Office. Key audit steps: — Interviewed Electric Utility and other City department management personnel and staff. — Reviewed key Utility organization, staffing and workload documentation. —Examined detailed financial and rate -setting records. — Reviewed key service contracts. — Collected and analyzed comparative rate and operational data from other municipal utilities. — Submitted draft report to Colton Electric management for review. — Held exit conference with management to ensure factual accuracy and to discuss findings, conclusions and recommendations. Department Overview • Second oldest municipal utility in California; only one in San Bernardino County • Customers: • Annual Power Requirements: 380,529 Megawatt -hours purchased FY 2008-09 • 54,404 megawatt -hours from Agua Mansa Power Plant (14.3% total) • FY 2009-10 Budget: • $67.7 million budgeted revenue; $63.6 million budgeted expenditures (actual will both be less, with the Utility likely to run a deficit) • Approximately 97% budgeted revenue ($65.7 million) from customer sales FY 2009-10 • 49.5 budgeted full-time equivalent positions FY 2009-10 1. Utility Planning Documentation and management planning lacking in recent years. • Integrated resource plan not in place to address: changes in load; production planning; role of Agua Mansa; renewable energy goals. • Little formal planning for maintenance, system safety, system reliability; Critical system maps and operating diagrams outdated. • Only informal plans for complying with North American Electric Reliability Corporation (NERC) system reliability standards. • Capital projects: 10 Year Distribution Master Plan prepared 2007, not approved by City Council or used as guide, with budgets and timelines, for managing and ensuring management accountability for project priorities. • Formal succession plan not in place; many managers/superintendents near retirement. Recommendations Prepare integrated resource plan: balance demand side management and production planning; present to City Council for review and approval. • Strategic plan to direct and support achievement of the City's renewable energy goals (20% by 12/31/10). • Routine preventive maintenance plan. • Adopt reliability indices, take regular measurement of these reliability measures, benchmark against other public utilities. • Enhance safety monitoring efforts, compliance with NERC system reliability standards • Engineering standards 2010 JUL 28 SPC CC/RDA/CUA MEETING - 2 -