Issuu

SUMMER2018

California

A P U B L I C AT I O N O F T H E C A L I F O R N I A M U N I C I PA L U T I L I T I E S A S S O C I AT I O N

Great Disconnect The

STATE ENERGY POLICY: HOW DO YOU GET ALL THE PLAYERS ON THE SAME PAGE?

PLUS

THE NEW WAY ON WATER 12 Q&A: JEFFREY KIGHTLINGER 18

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2 CALIFORNIA WATER & POWER SUMMER 2018

Contents POWER

Where’s the Connection?

California energy planning, while ambitious, is all over the map. Here are 5 steps to help the state create a more unified vision

WATER

Conservation Breakthrough

The new normal is conserving water, even in good times. How policymakers and the water community worked together on groundbreaking legislation

18 LEADERSHIP MATTERS

Ahead of the Curve

18 DEPARTMENTS:

A Q&A with Metropolitan Water District of Southern California CEO Jeffrey Kightlinger sheds light on what the nation’s largest municipal water provider is doing to keep a step ahead

California Municipal Utilities Association Executive Director Barry Moline Communications Manager Matt Williams Director for Water Danielle Blacet Legislative Director for Energy Patrick Welch Regulatory Advocate Jonathan Young Event & Membership Manager Christine Chapman Office Manager Teresa Rexrode COPYRIGHT All editorial and advertising contents are ©2018 by Ruralite Services,Inc. Reproduction or use in any form of editorial, news, photo or advertising content in whole or part without permission of Ruralite Services, Inc. is prohibited.

Ruralite Services, Inc. CEO Michael Shepard Editor Leon Espinoza Assistant Editors Jennifer Brown, Brandon Pomrenke Graphic Designer Duy Mai, Denise Clifton Communications and Marketing Director Kathi VanderZanden Display Advertising Inquiries American MainStreet Publications 611 S. Congress Ave., Suite 504 Austin, TX 78704 (800) 626-1181 or (512) 441-5200

CALIFORNIA WATER & POWER IS A PUBLICATION OF CMUA IN ASSOCIATION WITH RURALITE SERVICES, INC.

SUMMER 2018 CALIFORNIA WATER & POWER 3

FirstWord Golden Lessons from SCPPA’s Conference

NOTE FROM THE EXECUTIVE DIRECTOR BARRY MOLINE

YOU HAVE TO BE OPENMINDED, BECAUSE YOU NEVER KNOW WHERE YOU’RE GOING TO GET YOUR NEXT BIG IDEA.

4 CALIFORNIA WATER & POWER SUMMER 2018

(Left to right) Dukku Lee, general manager of Anaheim Public Utilities; Sue Kelly, CEO of the American Public Power Association; U.S. Olympics gold medalist Nikki Stone; and Southern California Public Power Authority Executive Director Mike Webster at the SCPPA conference.

Mike Babcock coaches the Toronto Maple Leafs—a big hockey team in Canada, for those of you into baseball, football, basketball or the theater. He’s had a lot of success as a coach, leading two Canadian teams to Olympic gold medals as well as the Detroit Red Wings to win the Stanley Cup. Sometimes, people at the top of their profession act as if they know it all, but not Babcock. He pays attention to the details, listening carefully to his veteran and rookie players, his fellow coaches, his administrative staff and just about everyone he comes in contact with. “You have to be open-minded, because you never know where you’re going to get your next big idea. It could be the waitress at lunch. That’s how you create change,” said Babcock in Behind the Bench, a book I’m reading about successful hockey coaches. I had those lessons in mind when I attended the Southern California Public Power Authority’s annual conference in May. I’ll mention a few of the great takeaways here, but the most important one is how valuable it is just to get together and know each other. Consider this: What’s the first question your boss or your governing board asks when they hear a new idea? “Who else is doing that?” Before deciding, they want to know if anyone else has experience with the issue. Knowing your colleagues is crucial to answering that question. Being able to quickly call on them is the key to rapidly learning the details of technologies and programs. The SCPPA annual conference provided plenty of opportunities to

network and expand those relationships. And there were other lessons as well. Here are highlights: APPA CEO Sue Kelly talked about the need for managers and governing boards to recalibrate their thinking. She emphasized the need to get out of your comfort zone by offering products and services beyond basic electric and water, such as designing new rates for renewable energy, helping customers reduce consumption, developing new loads such as electric vehicles, and expanding storage. She said only one in five customers knows they are served by a publicly owned utility. We need to do a better job letting customers know we are community owned and not-for-profit. Wayne Greenberg, CEO of E Source, emphasized “change as a constant.” He talked about the extremely fast pace of change and staying on top of it. He quoted inventor and futurist Ray Kurzweil, “We won’t experience 100 years of progress in the 21st century. It’ll be more like 20,000 years of progress.” Greenberg showed data that publicly owned utilities are more trusted by the public than IOUs, but not by much: 34 percent to 31 percent. He shared excellent information about what customers want, which focuses mostly on locally sourced green energy, home energy management systems, home battery storage systems for backup power, and wiring protection insurance. Overall, Greenberg said that compared to other industries, utilities are far down the list on customer satisfaction, with a mid-range score of 64 out of 100. Highranking industries are those customers

who interact frequently and have positive experiences, including supermarkets (78), fast food chains (76) and retailers (73). He recommended we listen carefully to customers and create products and services they ask for. David Wright, general manager of the Los Angeles Department of Water and Power, discussed the commitment the utility has to improve its customer experience. He recounted the strong desire to put customers first, and how LADWP is committed to measuring performance and making sure the utility’s impacts are spread equitably among customers to the extent possible. He showed data from several programs, including low-income energy and water-efficiency efforts, solar incentives and EV charging infrastructure, with a particular focus on the sale of used EVs to spread the technology more widely across the region. Kelly Nguyen, director of electric and gas for Vernon Public Utilities, presented interesting results from an extensive survey of large customers whose highest priority is low-cost power, followed closely by high reliability. Other considerations are customer service, environmental impacts and distributed energy. In collecting this data, the utility met with many customers, and held community events and training that proved invaluable to understanding their needs and improving relationships. Jorge Somoano, general manager of Burbank Water and Power, talked about the community’s environmental

awareness and expanding the utility’s solar-powered vehicle program. He showed a compelling case of how daytime electric charging matches solar output, and how BWP works with local employers to expand installation of charging infrastructure to promote daytime charging of electric vehicles, making them solar powered. BWP analysis shows it can grow its peak through workplace charging with minimum impact to future net demand (demand minus solar and wind). He made it clear BWP maintains the right to control the EV chargers during net demand ramp events to offset the loss of solar power. The highlight of the conference was the evening speaker, Nikki Stone, the first U.S. Olympic gold medalist in aerial skiing—the event with crazy high flips and spins, where most folks shake their heads and say, “Those people are crazy!” Nikki talked about her road to the gold medal and how setting detailed goals was key. Her takeaway message to participants was to be a turtle: soft on the inside (have feelings and compassion for others), hard on the outside (be tough and pick yourself up after setbacks) and stick your neck out (keep moving forward and lead). It was a great message and one we can all adopt. “The conference is important because it creates a dialogue within SCPPA’s membership and with our partners to share what we’ve learned, what worked and what didn’t work,” said SCPPA Executive Director Mike Webster. “Ultimately, it helps us be more innovative and effective in serving our customers.” CWP

SUMMER 2018 CALIFORNIA WATER & POWER 5

FirstWord Golden Lessons from SCPPA’s Conference

NOTE FROM THE EXECUTIVE DIRECTOR BARRY MOLINE

YOU HAVE TO BE OPENMINDED, BECAUSE YOU NEVER KNOW WHERE YOU’RE GOING TO GET YOUR NEXT BIG IDEA.

4 CALIFORNIA WATER & POWER SUMMER 2018

SUMMER 2018 CALIFORNIA WATER & POWER 5

Where’s Where’sthe theconnection? connection? California’s energy future lacks a unifying vision. These 5 steps could make all the difference.

Photos by John Chacon, Florence Low, Paul Hames/California Dept. of Water Resources

While California is a leader in green energy and innovation, the lack of a coordinated approach looms as a giant threat to progress.

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By Matt Williams

alifornia leads the nation when it comes to decarbonizing its electric system and renewable energy procurement. It’s the leader in energy efficiency, energy storage and electric vehicles. Frankly, California is the leading place on Earth for all things green and sustainable. And in the current political climate, California’s leadership role is sure to continue. That’s the good news. The bad news is, we could be doing it a whole lot better. Now that the state is on pace to meet bold SB 350 renewable energy goals and aggressive greenhouse gas reduction, advancing further will get harder. The low-hanging fruit has been picked. If we’re going to reach these stretch goals and work toward decarbonizing while keeping the lights on and controlling consumers’ electricity cost increases, we must do things differently. We must work together. Policies of the past have created problems of the present. The duck curve—caused by a rush to install the quickest renewable resource, solar photovoltaics—has created resource adequacy concerns that could begin as early as this summer. Grid reliability challenges generally come from huge morning and evening ramps when solar comes on and off the grid in a short timeframe. These severe fluctuations stretch the limits of the state’s power system reliability, and the immediate solution is not evident.

Advocates for additional solar or other renewable resources with similar intermittent challenges advocate for battery storage. But that technology is not mature, is costly (but dropping), solves only a portion of the problem (operates for just a few hours and may not be charged by renewables), and has downstream environmental consequences (lead disposal). Some have suggested regionalizing the transmission grid is the way to better integrate intermittent renewable energy. They believe sharing renewables over a wider geographic footprint will lower costs faster than the growing and successful Energy Imbalance Market is already doing. The problem is, many states likely won’t buy into an expanded California Independent System Operator (CAISO), concerned about being overly influenced by the California’s energy policies and CAISO’s high transmission costs. A draft paper called the “Green

Book,” written by the California Public Utilities Commission and released in May, airs certain worries and concerns. It says that as fewer customers get power from traditional utilities, “the centralized decisionmaking that we use for keeping the grid reliable, safe and affordable is splintering, becoming the task of dozens of decision-makers.” “In the last deregulation, we had a plan, however flawed,” wrote CPUC President Michael Picker, referring to actions in the 1990s that preceded a serious energy crisis in California starting in 2000. “Now we are deregulating electric markets through dozens of different decisions and legislative actions, but we do not have a plan. If we are not careful, we can drift into another crisis.” Picker’s call for coordination— apparently centered at his agency— will be a challenging task and include dozens of authorities. The list is long: regulatory agencies, such as the Federal Energy

Regulatory Commission, California Energy Commission, CAISO and CPUC; load-serving entities, including publicly owned utilities, investorowned utilities and community choice aggregators; and numerous state legislators and locally accountable governing boards. Not many would be on board with statewide CPUC-led energy policy. There is some forward-looking planning happening. One is the biannual Integrated Energy Policy Report developed by CEC, which says it is the “state’s primary agency for energy policy and planning” as spelled out in legislation. There are also planning elements within integrated resource plans that POUs are required to submit beginning in early 2019, as well as blue-ribbon commissions that make recommendations on energy policy as needed. CEC and CPUC developed an energy action plan in 2008, but that paper hasn’t been updated since. “For the state leading the world on

SPRING 2018 CALIFORNIA SPRINGWATER 2018 CALIFORNIA & POWER 7WATER & POWER 7

Where’s Where’sthe theconnection? connection? California’s energy future lacks a unifying vision. These 5 steps could make all the difference.

Photos by John Chacon, Florence Low, Paul Hames/California Dept. of Water Resources

While California is a leader in green energy and innovation, the lack of a coordinated approach looms as a giant threat to progress.

6 CALIFORNIA WATER & POWER SUMMER 2018

By Matt Williams

SPRING 2018 CALIFORNIA SPRINGWATER 2018 CALIFORNIA & POWER 7WATER & POWER 7

"WHEN IT COMES TO CRITICAL EVENTS, WE HAVE A PROVEN TRACK RECORD OF WORKING WELL WITH OUR CALIFORNIA PARTNERS … WE ARE MOTIVATED BECAUSE IF WE FAIL AND ALLOW GREENHOUSE GAS EMISSIONS TO CONTINUE INCREASING, MORE DESTRUCTIVE IMPACTS ARE ANTICIPATED.” —CALIFORNIA ENERGY COMMISSION CHAIR ROBERT WEISENMILLER energy policy, we could do a lot better," said Barry Moline, executive director of the California Municipal Utilities Association. “With so much brain power, we’re extremely inefficient. We have some of the best minds in the world on these issues, yet we don’t tap into them. We don’t share what works well. We don’t communicate factually about new technologies, how they work and their cost. Our state’s experts don’t collaborate well. If we want to do better, we have to work better together.” What follows are five elements CMUA and others think could help California move toward a more cohesive plan and a coordinated vision for its energy future. 1. Fewer Bills in the Legislature The California State Legislature is a high-volume governing body. In each term, assembly members can introduce 50 bills, and senators can introduce 40. That means there could be a maximum of 5,600 bills considered during a two-year legislative cycle. Those numbers are arbitrary. In the 1990s, legislators were capped to 30 bills, although decades ago California lawmakers could file an unlimited number of bills. Several states have much lower caps. For example, North Carolina lawmakers are limited to 10, Floridians to six and Coloradans to five. Many bills—too many, some argue—try to dictate energy priorities and policy for California. At any point, CMUA tracks more than 150 bills on energy and the energy-water nexus, as well as dozens more that in some way affect utilities. Given that staggering volume of activity, it’s unrealistic to expect those bills to be well-coordinated. Some are 8 CALIFORNIA WATER & POWER SUMMER 2018

contradictory or even duplicative and unnecessary. Presumably, with fewer bills on the docket, legislators would be more invested in each and therefore more likely to talk with utilities and other affected stakeholders about a policy proposal before a bill is introduced. Too often, ideas begin with the introduction of a bill before a discussion with those who could help improve it. A glut of bills has led to the disperse enactment of a variety of requirements and mandates on electric utilities, leading to an uncoordinated approach to legislating the way power is delivered and energy is used. This has also resulted in duplicative and overlapping reporting regulations by utilities to multiple agencies. If the number of bills were limited, legislators might think twice before introducing one-off legislation for new or unproven energy technology, or to deal with a discrete issue. They may be more inclined to introduce more meaningful and holistic legislation that seeks to fit into the current regulatory regime. Additionally, there is pressure on legislators to quickly churn through the volume of bills to meet various legislative deadlines, leading many bills that are still works in progress or just in the discussion phase to be passed. As a result, this would allow policy committees to analyze fewer bills with a more discerning eye. Legislators and stakeholders would have more time to delve into policy details to resolve conflicts and simply get them right. One common strategy is for legislators to file a bill and say, “Let’s start the conversation.” Having a debate in the legislature is an inefficient way to make energy policy, however, frequently resulting in friction among stakeholders

affected by the bill, as well as opening up many questions about benefits. A better way would be to convene experts to discuss and brainstorm options. That happens too infrequently. 2. Create a Gatekeeper Function for Energy Bills California should consider how introduced energy legislation can lead to a process where energy policy specialists weigh an energy bill’s pros and cons. Traditionally, legislative committees have done this analysis, but as technology advances and the pace of change increases, it’s clear we need additional expert input. Furthermore, legislative staff, their time and resources are extremely limited. We need to call in experts—stakeholders, academicians and independent experts—more frequently. They are eager to participate with greater depth. The independent analysis could be similar to that of the Legislative Analyst’s Office when scrutinizing the budget or studying big policy issues that have far-reaching impacts. Specialists and stakeholders should be brought in to have thoughtful conversations together. Subsequently, these analysts could give numeric scores to each bill on technical feasibility, carbon impacts, cost and other factors—something like PolitiFact—to help lawmakers understand the veracity of claims and make informed decisions. The analysis might include the proposal’s pros and cons, and comparisons to similar or opposing proposals. Today, California makes energy policy first and asks questions later. That is backward. Independent analyses would lead to better, more informed decision-making from the beginning. 3. Name a State Energy Policy Leader There’s plenty of energy policy being made in California, but there is a noticeable lack of direction, aside from supporting the big goal of decarbonization. Our energy goals are so grand that California needs clear guideposts to get there affordably and reliably. Someone needs to take the lead in developing a new, overarching strategic plan for energy in California.

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That person doesn’t exist today because energy policy development is fragmented. The four main energy regulatory entities in the state—the CEC, CPUC, Air Resources Board and CAISO—each have their own leadership, individual boards and set of priorities. In the legislature, a handful of elected officials and staffers, regardless of experience, have significant responsibility and resulting impact on energy policy. One reasonable option is to establish a cabinet-level position dedicated to statewide energy planning, supported by annual funding and staff. This energy policy director could be similar in structure to the Governor’s Office of Planning and Research, which develops longrange land-use goals and policies, and researches growth and development, among other tasks. If given real authority, a similar energy policy office could evaluate the various agency decisions to ensure they align with the state energy plan. 4. Break Up the CPUC to Make It More Effective This idea isn’t new, but it makes sense. Some critics believe the California Public Utilities Commission regulates too many industries to be effective. It oversees electricity, natural gas and water, telecommunications, wireless and broadband. CPUC also oversees the safety of railroads, rail transit and rail crossings in California, and ridesharing. Breaking out some of CPUC’s portfolio and moving these responsibilities to other agencies would help put more emphasis on matters it does have expertise in, namely the rate and economic regulator for the entities subject to its jurisdiction. The role of CPUC on utility safety matters should be reconsidered, as the track record on a host of issues such as pipeline safety may not warrant continued commitment to CPUC’s preeminent role. Perhaps CPUC would only keep regulatory responsibility over rate regulation of its jurisdictional electric and natural gas utilities, and the rest could be moved to other agencies. Perhaps an ombudsman for consumer protection issues could be 10 CALIFORNIA WATER & POWER SUMMER 2018

"GOV. BROWN HAS REALLY DONE A GREAT JOB IN COALESCING THE REGULATORY AGENCIES AND THE CAISO TO WORK TOGETHER … THE ENERGY PRINCIPALS MEET ON A REGULAR BASIS TO ENSURE THEY ARE ALL HEADED IN THE SAME DIRECTION.” —ASSEMBLYMEMBER CHRIS HOLDEN housed with the attorney general. Many other states have separate consumer advocates, while California houses its main consumer advocate within the very agency—CPUC—from which it is supposed to be independent. These ideas have precedent. Lawmakers during the past few years have taken away CPUC’s oversight of moving companies and ferries, for example. In 2016, the former chair of the Assembly Utilities Committee proposed such a breakdown of the CPUC, but efforts to make widespread changes to its structure have been slow to gain traction. It’s time to revisit this idea—not centering on CPUC’s effectiveness in and of itself, but rather to help California adopt a much-needed energy strategy for decades to come. There would be great value in narrowing CPUC’s scope to only energy and its current jurisdictional utilities. The five CPUC commissioners could focus entirely on IOUs and energy. There’s enough work there alone. 5. Create a Data-Sharing Platform and Convene Facilitated Stakeholder Forums The goal here is to explore ideas and talk with one another about the state-of-the-art programs and technology in the energy industry. California generally does a subpar job of sharing what works and what doesn’t. Energy policy must be examined in a more integrated way, which is hard to do if we don’t share facts and have a mutual understanding of where we’ve been and where we’re going. Instead, we have a lot of selfinterested businesses promoting their particular energy solutions at the expense of California consumers. A new data-sharing platform would help bring together case studies, technical information and

other findings about emerging technologies. Meanwhile, a new series of quarterly stakeholder forums on single topics such as energy efficiency, renewables, end-use and building codes, water-energy nexus, utilities, resource adequacy, storage, transportation electrification, and transmission and generation would bring together users, vendors, local governments and service deliverers. There should be a facilitator and a staff for fact-finding, and the process should lead to recorded outcomes, such as ideas and recommendations for strategic direction. The aim is to encourage cross-pollination that would lead to better, more coordinated energy policy. How to pay for these initiatives? With more than $100 billion spent by Californians annually in the energy space—electric, natural gas and transportation—the savings in providing direction would far outweigh the modest costs of strategic planning and information sharing. The total cost of these efforts would be miniscule compared to the benefits. We need to be conscious of the old adage: If you fail to plan, you plan to fail. And then there’s the corollary: Teamwork makes the dream work. For California’s future, the choice is ours. “We have a lot of great opportunities to excel,” said CMUA’s Moline. “If we continue down our current path, we’ll all keep fighting the good fight, doing the best we can to decarbonize power supply while ensuring high reliability and controlling costs. But we could be developing energy policy much more thoughtfully if we choose to work together. California is the fifthlargest economy in the world, and we’re leaders in clean energy and decarbonization. I think we should raise our game.” CWP

team:

noun \ˈtēm\

a group of people working together toward a common objeccve

At TEA, our main objeccve is your success. Because we are owned by public power, we understand what makes you unique and can help you develop strategies to achieve your goals.

beeer together. SUMMER 2018 CALIFORNIA WATER & POWER 11

Conserving Water Even in Good Times By Karen Wilkinson

How California’s Legislature and water community worked together on groundbreaking water use efficiency legislation

12 CALIFORNIA WATER 12 CALIFORNIA & POWER SUMMER WATER & 2018 POWER SUMMER 2018

alifornia policymakers and the communities they serve are going to great lengths to stay a step ahead of the state’s growing population and changing climate, particularly when it comes to water management. In the future, California will be forced to adapt to dramatic swings between wet and dry years, along with extreme flooding and drought, in what researchers now call “precipitation whiplash” events. A highly variable water supply year to year—even month to month—is the new normal for California. Lawmakers, local water agencies and urban and agricultural communities across the state all have taken notice. Together, they are responding as never before.  As California recovers from a severe, multiyear drought that parched the West from 2012 to 2016, Gov. Jerry Brown is championing conservation as a way of life. Water agencies and their customers voluntarily achieved and exceeded the state’s ambitious conservation targets in recent years, but water consumption levels are again rising only a year since Brown declared the end of the drought in 2017. A permanent solution was needed. CMUA and many other stakeholders stepped forward to collaboratively support a legislative package of conservation bills that, for the first time, establish permanent water-efficiency goals

whetheror ornot notCalifornia Californiaisisinin whether aa drought droughtyear. year.The Thelegislation legislation was passed passedby bythe theCalifornia California was State Legislatureand andGov. Gov.Brown Brown State Legislature signed the bills bills in in late lateMay. May. signed the The bill package—AB 1668 The bill package—AB 1668 introduced byAssemblymember Assemblymember introduced by Laura Friedman(D-Glendale) (D-Glendale) Laura Friedman and SB 606 606 from from Sen. Sen.Robert Robert and SB Hertzberg (D-Van Nuys)— Nuys)— Hertzberg (D-Van establishes comprehensive establishes aacomprehensive framework forboth bothagricultural agricultural framework for and urbanwater waterconservation conservation and urban and water-useefficiency, efficiency, and water-use including individualized including individualized water-useobjectives objectivesfor forurban urban water-use wateragencies agenciesand andadditional additional water requirements forurban urbanwater water requirements for management plansand anddrought drought management plans planning. The package packagealso also planning. The establishes specifiedstandards standards establishes specified for per capita capitadaily dailyindoor indoor for per residential use. residential use. These bills direct directwater water These bills suppliers toset setlong-term long-termwater water suppliers to efficiency on local local efficiency goals goals based based on conditions, includingclimate, climate, conditions, including geography and andpopulation. population.They They geography also provide flexibility flexibility and and local local also provide control in determining determininghow howtoto control in meet water-efficiencygoals goalsand and meet water-efficiency allow for water watersuppliers suppliers allow aa bonus bonus for

thatproduce producepotable potablewater. water.The The that bills require improveddrought drought bills require improved planning and andreporting reportingfrom from planning urbanand andagricultural agriculturalwater water urban suppliers, andrequire requirethe thestate state suppliers, and to to establish guidelinestotohelp helpsmall small establish guidelines and ruralcommunities communitiesprepare prepare and rural for droughts. for future future droughts. “This is what what you you want wantthe the “This is state todo—to do—toprovide provideguiding guiding state to principlesand andthen thenallow allow principles different regionsand andutilities utilities different regions to come come up up with withtheir theirown ownplan plan to to accomplish accomplish those thosegoals goalsand and to standards,” saidNewsha NewshaAjami, Ajami, standards,” said head of Urban Urban Water WaterPolicy Policyatat head of Stanford University.“The “Thebills bills Stanford University. are tryingtotoprovide provideguiding guiding are trying principlesaround aroundrecurring recurring principles droughts andwater wateruse, use,and andhow how droughts and utilities can canincrease increaseresiliency resiliencytoto utilities watershortages.” shortages.” water The bills set set per-capita per-capita The bills limits on indoor, indoor, residential residentialuse use limits on at 55 gallons gallons aa day day per perperson, person, at 55 gradually declining decliningto to50 50gallons gallons gradually by 2030. thereare are by 2030. Although Although there penaltiesfor fordistricts districtsthat that failtoto penalties fail meet thetargets, targets,they theydodonot nottake take meet the effect 2027. effect until until 2027. “For first time, time,we wehave have “For the the first the state stateworking workingcollaboratively collaboratively the

"THE NEXT "THE NEXTDROUGHT DROUGHT IS INEVITABLE, INEVITABLE, BUTWE IS BUT WE CAN CHANGETHE THEWAY WAY CAN CHANGE WE PREPARE ACROSS WE PREPAREACROSS CALIFORNIA. THESE CALIFORNIA. THESE BILLS FOCUS BILLS FOCUSON ON EFFICIENCY FIRST EFFICIENCY FIRST AND AND GIVE GIVE WATER WATER AGENCIES AGENCIES THE FLEXIBILITY TO THE FLEXIBILITYTO EMBRACE INNOVATION.” EMBRACE INNOVATION.” —ASSEMBLYMEMBER -ASSEMBLYMEMBER LAURA LAURAFRIEDMAN FRIEDMAN

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Hikers walk walkon onthe thedry drybed bedofofFolsom Folsom Hikers Lake in in January January2014. 2014.Drought Droughtisis Lake becoming of life becoming aa way way of life in in California. California.

SUMMER 2018 - SUMMER^018

CALIFORNIA WATER WATER&&POWER POWER 13 13

Conserving Water Even in Good Times By Karen Wilkinson

How California’s Legislature and water community worked together on groundbreaking water use efficiency legislation

12 CALIFORNIA WATER 12 CALIFORNIA & POWER SUMMER WATER & 2018 POWER SUMMER 2018

John Chacon / California Resources John Chacon / CaliforniaDepartment Department of of Water Water Resources

SUMMER 2018 - SUMMER^018

CALIFORNIA WATER WATER&&POWER POWER 13 13

HOW COMPROMISE WAS ACHIEVED The process to get water-use efficiency legislation across the finish line was long and complicated. The journey began in 2014, during the height of the most recent drought, with the release of Gov. Jerry Brown’s California Water Action Plan. The plan includes 10 broad actions to meet the goals of reliability, restoration and resilience. First on the list is making conservation a California way of life. Brown also declared a state of emergency in January 2014 due to unprecedented dry conditions. He issued numerous droughtrelated executive orders during the next two years. One signed in May 2016 directed state agencies to establish a long-term framework for water conservation and drought planning. Although the drought emergency was lifted in April 2017, the foundation was set to transform the way all Californians use water.   After state agencies released their plan with a proposal for legislation, the legislature took the lead. Several bills were introduced by Assemblymembers Blanca Rubio, Shirley Weber and Laura Friedman. Assemblymember Eduardo Garcia, chair of the Water, Parks and Wildlife Committee, convened a member-driven conservation workgroup to help develop language. Numerous hearings, workshops, meetings and negotiations led to the final two bills, SB 606 and AB 1668, authored by Sen. Robert Hertzberg and Assemblymember Laura Friedman.   The final package was possible only with the determined, focused leadership across the political spectrum. The bills took shape with immense engagement from the water community to help ensure the framework will be workable in communities across the state.  The legislature, the Brown Administration and water agencies made tough choices and compromises, passing a legislative package that will lead to greater resiliency and sustainability for all Californians far in the future.   — Danielle Blacet, CMUA Director for Water 14 CALIFORNIA WATER & POWER SPRING 2018

“INSTEAD OF TAKING A ONE-SIZE-FITS-ALL APPROACH, IT’S A MORE NUANCED APPROACH …" — KENDRA SCHULTZ, SVLG ASSOCIATE

with local governments and urban water suppliers to put in place water-efficiency standards that will help every community focus on sustainability,” Friedman said. “The next drought is inevitable, but we can change the way we prepare across California. These bills focus on efficiency first and give water agencies the flexibility to embrace innovation and tailor their approach to meet the unique needs of their community.” Who Supports, Opposes, and Why?  Like most policy proposals, this one has its fans and critics. Both SB 606 and AB 1668 failed to pass the Legislature in 2017. Amendments made to the bills this year won the approval of those who originally did not support these conservation measures, including the California Municipal Utilities Association, San Francisco Public Utilities Commission, Long Beach Water Department and Western Municipal Water District. “It’s important for us to be good stewards of water resources and to be as efficient as we reasonably can,” said Don Gilbert, a CMUA lobbyist who negotiated changes to SB 606 and AB 1668. "But we needed amendments to try and make it workable for water agencies. There were solid and reasonable improvements to the bill regarding potable reuse projects, costeffectiveness, enforcement and more.” Other major supporters include the Metropolitan Water District of Southern California, East Bay Municipal Water District, Santa Clara Valley Water District, the cities of Sacramento and Roseville, the Water Reuse Association of California, California Professional Firefighters, the Silicon Valley Leadership Group, Natural Resources Defense Council and The

Nature Conservancy. Tracy Quinn, policy analyst for the Natural Resources Defense Council, said AB 1668 and SB 606 build on the lessons learned through implementation of the Water Conservation Act of 2009, which requires California to reduce urban water consumption by 20 percent by 2020. The problem with such sweeping percentage reductions is they do not consider past investments in conservation and what’s reasonable locally, she said. “It’s a great metric if you’re tracking reductions over time, but it’s difficult to make comparisons per community,” Quinn said. “This framework [set by SB 606/AB 1668] moves us away from that model and sets standards for water suppliers to customize the water-use targets.” Not everyone is supportive. Dale Coco, an El Dorado Irrigation District board member and an outspoken opponent of the bills, said they are not conservation measures, but just another “water grab.” “This is all about water for Southern California,” Coco said. “That’s where the money is, that’s where the votes are. It’s desperation. They’ve got to have the water, and I’m OK with that, but they ought to pay for that.” Others are concerned the wateruse efficiency goals could impose unreasonable or overreaching wateruse restrictions on all Californians, and eventually make water more expensive or unaffordable in some communities. The Silicon Valley Leadership Group lobbied in early May for the bills’ passage. Kendra Schultz, an associate on SVLG’s energy and environment team, said the “feast or famine” drought cycle is increasingly the new normal in California. “Just because we’re not in a drought emergency right now doesn’t mean we’re not in a

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California is taking big steps to better manage water in the face of climate change and population growth. In this January 2017 view, water is released from Lake Natoma at Nimbus Dam in Rancho Cordova as a precaution against flooding, and to save room for coming storms and snowmelt. drought,” she said. “There are areas [of the state] that are experiencing drought at this moment, and it’s important to acknowledge that. We don’t have an infinite amount of water and shouldn’t treat it as though we do.” Rather than waiting for another drought to prompt action, these bills take a proactive approach to water conservation before entering emergency situations, Schultz said. “Instead of taking a one-size-fitsall approach, it’s a more nuanced approach that retains local control,” she said. “It allows local water agencies and districts to decide on their own terms how they want to meet the standards. It allows them to figure out what’s best for their resources and their needs.” The Amendments at a Glance All the amendments were intended to enable practical water management tools while still being efficient, Gilbert said. One important change clarified that the State Water Resources Control Board cannot compel a water agency to fine individual customers for violating an ordinance, such as exceeding daily water limits. 16 CALIFORNIA WATER & POWER SUMMER 2018

Standards for indoor residential water use are measured on a per gallon, per customer, per day basis. The indoor standard is combined with a handful of other standards that are aggregated into a total urban water use objective for a given agency. The State Water Resources Control Board can issue a conservation order to a water agency that doesn’t meet its urban water use objective, which can include a fine on the water agency, Gilbert said. There’s also a bonus incentive, which gives existing potable reuse projects a 15 percent bonus incentive toward the urban water use objective. Future potable reuse projects get a 10 percent bonus incentive. For example, if the objective for a given water agency is, when aggregated, 100 acrefeet, if that agency has an existing potable reuse project, its urban water use objective is bumped up to as much as 115 acre-feet. During ongoing negotiations on the bills, a discussion ensued about what constitutes an existing potable reuse project that would earn the 15 percent incentive. “What ultimately happened was

that the authors agreed to grandfather in existing projects at 15 percent credit, and future projects would receive 10 percent credit,” Gilbert said. “But the bottom line is, the determination is based on when the CEQA permit is complete and when the project will be delivering water.” NRDC’s Quinn anticipates waterguzzling toilets and other appliances will be replaced with efficient ones, which may incentivize more innovation in the water-efficiency industry. The bill sets long-term “efficiency” goals, a word she prefers to “conservation.” “The passing of these bills will be the first step in helping California achieve water security in the face of an increasingly variable climate,” Quinn said. “There’s a lot of hard work ahead of us in the implementation of this legislation.” CWP Karen Wilkinson is a freelance writer based in Sacramento, Calif.

Power Player: State Sen. Robert Hertzberg brings big ideas to water policy. See page 22

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effrey Kightlinger has been general manager and CEO of Metropolitan Water District of Southern California for the past 12 years. Metropolitan, a regional wholesaler, delivers water to 26 member public agencies serving 19 million people living in Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura counties. It’s a big job with mind-boggling scale. Metropolitan delivers an average of 1.7 billion gallons of water each day to a 5,200-square-mile service area. It owns and operates the Colorado River Aqueduct, 16 hydroelectric facilities, nine reservoirs, nearly 1,000 miles of large-scale pipes and five water treatment plants. Metropolitan is the largest distributor of treated drinking water in the United States. California Water & Power recently spoke with Kightlinger about the ins and outs of his responsibilities and what Metropolitan is doing to keep in front of California’s ever-changing water picture. CW&P: The Metropolitan Water District Board of Directors recently voted to make a substantial financial commitment to fund the California WaterFix, a $17 billion project to re-plumb the Delta and California’s water-delivery system. How have you managed your time between regularly talking about the

18 CALIFORNIA WATER & POWER SUMMER 2018

The nation’s largest municipal water provider is thinking big for California’s future. project while still focusing on Met’s regular operations? Jeffrey Kightlinger: Something this political and large does require a fair amount of time investment from the CEO/general manager. You still have to run your day-to-day business, so the most I can really eek out is about a quarter of my time for this project. There are some peak periods where there will be three or four days of negotiations in Sacramento, but then I come back and work with the rest of my team on day-to-day management, budget and personnel and all the other things that are part of the business of running a large organization. We had hoped to be at the stage we are now about three to four years ago. We have hit the targets that we wanted—in completing all the environmental documents, formation of joint powers authorities to manage the design and construction, and approvals of our board to finance this—but we are several years later than we’d hoped. We are getting there and we’re making significant progress. So that part’s rewarding. The frustrating part is the time it takes to get there. CW&P: You said recently that for

the first time, in 2017 Metropolitan achieved 1 million acre-feet conserved annually. How did it happen? JK: We made a conscious decision in the early 1990s, coming out of a bad drought, that we had to focus on conservation. Prior to that, as the regional wholesaler, Metropolitan left conservation programs, by and large, in the hands of our local cities. You had very scattered programs throughout the Southwest. And we made a conscious effort to regionalize conservation so that people, whether you live in Pasadena or Burbank or Orange County or Riverside County, all have access to similar programs. About 20 percent of that million acre-feet has come from active conservation—actual products we’ve funded and put into place. That’s the low-flow shower heads and the lowflush toilets and the high-intensity washing machines. The other 80 percent is what we call passive conservation, because as soon as we establish that a low-flow toilet meets all market standards, then we work with the state and get it plugged into the uniform building codes. The governor had a goal of

removing 50 million square feet of lawn across the state in 2015, and our service area did 170 million square feet. We did the program on steroids. It was huge! It was one of those rapid drought responses where we teed up quickly and we put a lot of money into it, nearly half a billion dollars in a twoyear period. CW&P: In light of climate change and the annual variability of rainfall, what are you thinking about surface and groundwater storage? JK: We already have the most volatile weather in the U.S. in Southern California, and it looks to become even more volatile with climate change—meaning longer dry periods of perhaps three to five years followed by incredibly intense wet years. The other side is a shift from snow to rain as temperatures warm. The models are showing that you may get roughly the same precipitation. Now it’s going to be rain, not snow. To get through what appears to be longer dry periods, we need robust storage. If we’re going to have those mega-wet years periodically, we’re going to have to capture it, move it fast and get it into storage. Then we’re going to have to live off that storage for longer periods of time. We got the go-ahead in the mid-’90s to start spending money. The major investment we made was the $2.1 billion reservoir Diamond Valley Lake in Riverside [completed in 2000]. Then we added to it a $1 billion connecting pipeline that tripled capacity to move water into it from our existing system. The idea being, in the wet years, this pipeline may be empty eight out of 10 years. But in those two [other very wet] years, it’s going to move huge volumes of water into our reservoir, which we then can distribute over time. The strategy has worked exceedingly well. During the worst drought in recorded history in California (20122016), we pulled our reservoir down more than half and our other sources as well. Then 2017 was a record-shattering wet year again. Because we had this massive pipe and large infrastructure, we filled the reservoir completely again in a shorter period—less than four months. Southern California could have

easily been in an Australia or Cape Town, South Africa, circumstance [running completely out of water] but for those investments we made in the ’90s. In fact, we got through relatively unscathed. If this is indication of the future, so far our system has worked well. CW&P: What type of investments is Metropolitan making to protect and harden its infrastructure in the event of an earthquake? JK: In the last 20 years, we’ve invested a quarter of a billion dollars in seismic strengthening of our existing structures. We’re going to spend, over the next five years, another $200 million on seismic upgrades throughout our system. We have a two-prong strategy. One is, where we have critical infrastructure, we want a pre-event strategy—hardening it as much as you can so that, to the best of our ability, it will survive as intact as is possible and need minimal repairs to get back on line [in places] where we have something that’s critical to service a large area. The second strategy is a very robust post-event strategy. Metropolitan has stockpiled a lot of material spare parts for when things break. We maintain a state-of-the-art machine shop where we can manufacture essentially anything in our system. If you have some of our 1930s equipment destroyed in an earthquake and you’re trying to find a

replacement part, many people don’t even build it anymore, and many of the complicated pieces of steel pipe and pumping equipment are only manufactured now a few places in the world, in Germany and Japan. The backlog can be months. The Colorado River Aqueduct, the L.A. Aqueduct and the California State Aqueduct all traverse the San Andreas Fault in relatively close proximity. If they all are disrupted, it might take six months for crews to replace them. We always have a supply of water we don’t even touch during droughts. That’s our earthquake reserve. On average, it’s a little over 600,000 acre-feet. CW&P: With the general direction of decarbonization of energy production, what do you see as the role for water agencies in moving toward a greener energy future? JK: Metropolitan has been very heavily involved. Over a decade ago, we were an early signatory to the California Climate Registry. We report annually on our energy use and our GHG emissions, and we’ve logged a steady decrease over that entire period. We’ve developed a lot of clean power because water is heavy and it takes power to move it around. We have 16 hydroelectric plants in our system. We can do a little over 130 megawatts of hydro generation. We’ve developed up to 5 megawatts of solar power at our treatment plants. We have converted half our fleet to hybrid SUMMER 2018 CALIFORNIA WATER & POWER 19

LEADERSHIP MATTERS

Curve

Ahead of the

18 CALIFORNIA WATER & POWER SUMMER 2018

LEADERSHIP MATTERS

vehicles, and a lot of our trucks are natural gas. Here’s an interesting stat: 19 percent of all of California’s electrical power is engaged in water. However, of that 19 percent, less than six percent of it is for the treatment of delivery of water. A big chunk of it—two-thirds—is involved in heating of water at the end use. Heating water is very energy intensive, and we need hot water for showers, clothes washers and dishwashers. So we have done partnerships with Southern California Gas and Southern California Edison to put money toward more efficient water-heating devices that then cause people to use less water because it gets hotter faster. CW&P: You have worked in the water industry for more than 20 years. As a leader, what do you think about most, whether it’s in your own organization at Metropolitan or for the future of California as a whole?

WE’RE GOING TO SPEND, OVER THE NEXT FIVE YEARS, ANOTHER $200 MILLION ON SEISMIC UPGRADES THROUGHOUT OUR SYSTEM. JK: In the short term, I always think about natural disaster. We live in a place with fires, mudslides, earthquakes, horrific drought and flooding. We need the ability to run a smooth, efficient response, so we drill and we train on this constantly. We do dozens of tabletop exercises and coordinate with emergency response services. When the system’s broken, the public deserves a rapid response that’s not fumbled. In the long term, I do worry California has fallen into a trend of wanting to debate and talk, but not spend and develop programs to deal with the future. In the past, we’ve built large-scale infrastructure

and it served us well, but it’s aging. Oroville had a big, broken spillway— it’s 50 years old. Our facilities need to be maintained and upgraded, and the time it’s taking us to add new projects is too long. We’ve become very lax at thinking in the long term, and that’s the part that worries me the most. Our political system is not tackling the longterm issues like climate change and resilient infrastructure, and they put everything on hold because it’s easier to study it further than to make decisions. But people understand we need action, and I’m confident that with that backdrop, we are going to start getting some things done. CWP

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POWER PLAYER

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State Sen. Robert Hertzberg reflects on decades of engagement in California water and energy policy.

22 CALIFORNIA WATER & POWER SUMMER 2018

By Matt Williams

tate Sen. Robert Hertzberg has witnessed or participated in many moments that have shaped California’s energy and water policy. He was speaker of the state Assembly in 2000 and 2001 when California suffered a major electricity crisis, and this year played an integral role passing legislation that creates long-term water use efficiency standards for the state. In one way or another, in the public arena or the private sector, Hertzberg has worked in the water and energy world for the past four decades. He wrote a major paper on water in 1976 and started his first solar company in 1984. Hertzberg left the Assembly in 2002 because of term limits, but returned to the Senate in 2014, representing constituents in the eastern San Fernando Valley. During the intervening years, he was an entrepreneur of clean energy technology. Hertzberg’s latest accomplishment is water conservation legislation that establishes a comprehensive framework for both agricultural and urban water conservation and water use efficiency. He said it was challenging to balance the needs of hundreds of water districts in California in a way that’s acceptable for everyone, from the North Coast and Central Valley to Southern California. “We saw the governor’s [drought] emergency order, which asked everybody to cut back, but you can’t run a government based upon emergency orders,” Hertzberg said. “It’s hard to pull people together. There’s a tension between state control and local control, and so it took a great deal of attention. We think this is a really important step in moving toward a process that balances local control with realistic systems and a glide path to get there.” Hertzberg says conservation is one part of a comprehensive approach to water policy he is trying to develop. Other elements include cost, stormwater capture and water recycling.

In 2017, Hertzberg introduced a state constitutional amendment that would help address drinking water affordability by enabling charges based on tiered rates. Last year, he also passed a bill signed by the governor enabling local governments to charge fees to finance projects capturing stormwater, similar to how they finance projects for sewer water, trash collection and water delivery. “Legislation is not always about the mere incremental,” Hertzberg said. “Sometimes it’s a larger policy statement.” Hertzberg has seen that firsthand as chair of the Senate Committee on Natural Resources and Water and as a member of the Senate Standing Committee on Energy, Utilities and Communications. Before rejoining the Legislature, he traveled extensively abroad—particularly from 2006 to 2012—in support of several renewable energy ventures, including his startup that offered thin and flexible solar panels. It’s unsurprising, then, that he is more knowledgeable than most legislators about California’s energy marketplace.

“It’s exciting. But it also requires extraordinary attention to detail to figure out the unexciting part of this policy.” One of the lesser-known, behindthe-scenes issues Hertzberg is engaged

California Public Utilities Commission President Michael Picker, who have recently said California needs a cohesive plan that accounts for the rise of distributed generation and renewables. “Cal ISO is doing a stellar job, but they’ve got unbelievable challenges, so this is the homework time in the energy space,” Hertzberg said. “If we get it right, we’ll —ROBERT HERTZBERG dramatically reduce imports, we’ll dramatically increase jobs and we’ll dramatically reduce with is updating rules for resource GHGs. It will be brilliant. That’s one of adequacy. He introduced legislation this the reasons I came back to government, year that would require load-serving to be able to participate as one small entities to account for their clean voice in creating that brilliance.” CWP energy, air pollution and GHG reduction goals when meeting RA requirements. Hertzberg called resource adequacy a smart idea that has not been updated in At a Glance the past 15 years because a significant XX State Senator, 18th District (2014 – number of policy changes have present) occurred. X X California’s 64th Speaker of the Assembly “What’s the impact of [energy] (2000-2002) storage, or what’s the impact of all X X Member, Think Long Committee of these new devices and technologies on California resource adequacy, and how do they get X X Former Chair, California Forward included in order to determine what is XX Former Chair, Los Angeles Economic resource adequacy?” Hertzberg asked. Development Corp. Given those types of complexities, Hertzberg agreed with some, such as

“IF WE GET IT RIGHT, WE’LL DRAMATICALLY REDUCE IMPORTS, WE’LL DRAMATICALLY INCREASE JOBS AND WE’LL DRAMATICALLY REDUCE GHGS.” Hertzberg continues to think about and work on big-picture issues that have been front and center for more than 15 years, such as proposals that would regionalize California’s electricity grid and how to properly integrate community choice aggregators so the system continues to operate reliably. He says the state’s renewable portfolio standard is fantastic at setting goals, but there’s still a lot of detail that needs to be sorted out so it all works. “We have an ability today, through the integration of technologies, to fundamentally change the game, to dramatically reduce GHGs on the one hand, and on the other hand create jobs in California from all this new technology,” Hertzberg said.

SUMMER 2018 CALIFORNIA WATER & POWER 23

POWER PLAYER

Bringing

the theBig BigIdeas Ideas

State Sen. Robert Hertzberg reflects on decades of engagement in California water and energy policy.

22 CALIFORNIA WATER & POWER SUMMER 2018

By Matt Williams

“It’s exciting. But it also requires extraordinary attention to detail to figure out the unexciting part of this policy.” One of the lesser-known, behindthe-scenes issues Hertzberg is engaged

SUMMER 2018 CALIFORNIA WATER & POWER 23

BrightBites REPORTS FROM THE FIELD INVESTOR-OWNED UTILITY PLANS TO TURN OFF POWER DURING EXTREME FIRE DANGER PG&E says it will start switching off power when and where there is extreme fire danger to reduce the risk of sparks. The groundbreaking move comes as the investor-owned utility faces liability for destructive wildfires that devastated Northern California communities in 2017. PG&E reportedly will create a 24/7 wildfire prediction and response center in San Francisco. It also will hire firefighters on retainer as part of its plan to prevent or contain wildfires.

RETAIL ELECTRIC BUYOUT IS WORTH THE EFFORT, SAYS SOUTH SAN JOAQUIN IRRIGATION DISTRICT The South San Joaquin Irrigation District will continue its attempt to become the local retail electric power provider within its service area, including the cities of Escalon, Manteca and Ripon. The project would provide local customers with cost-effective retail electric power at rates significantly lower than PG&E. It also would provide a level of transparency, accountability and local control that can only be provided by a local public agency governed by a locally elected board. “The bottom line is, it's worth it. We'll continue to pursue every avenue possible to succeed with this retail electric project,” SSJID explained in an op-ed on its website.

24 CALIFORNIA WATER & POWER SUMMER 2018

PLAN PUTS FLOATING SOLAR ON L.A. RESERVOIRS A Los Angeles city councilmember announced legislation calling for the Los Angeles Department of Water & Power to establish floating solar panels on Los Angeles reservoirs. Councilmember Mitchell Englander said co-locating solar panels on city-owned reservoirs would eliminate the land-use cost and impacts of traditional solar panels. LADWP estimates Los Angeles reservoirs have an achievable potential of 53 MW, which translates to the electrical use of 21,000 homes annually. “We want to thank Councilman Englander for introducing this motion that will help get the ball rolling here in the city on the innovative idea of floating solar,” said Martin Adams, LADWP’s chief operating officer.

SAN DIEGO COUNTY WATER AUTHORITY TESTS DRONES The San Diego County Water Authority is testing the potential use of drones to help monitor aqueduct rights-of-way not easily accessible on foot or by vehicle. In one test, a consultant shot video using a drone over the Second Aqueduct in an area of steep terrain west of Interstate 15, just south of the San Luis Rey River. In addition to providing a bird's-eye view, the test flight showed that the photographic resolution from the drone was 10 times higher than stock aerial imagery.

AT PEAK, LARGE-SCALE SOLAR PROVIDES HALF OF CALIFORNIA’S ENERGY

Solar energy continues to reach new heights in California, with no end in sight. On a day in early March, large-scale solar met 49.95 percent of bulk electricity needs in the California Independent System Operator’s service area. Officials said it was the result of a cool, sunny weekend day when demand was relatively low. The near-50 percent mark does not include electricity generated by residential rooftop solar.

SUMMER 2018 CALIFORNIA WATER & POWER 25

BRIGHT BITES

NORTHERN CALIFORNIA POU'S PLACE HIGH IN NATIONAL PUBLIC POWER LINEWORKERS RODEO In late April, lineworkers from Roseville Electric Utility, Sacramento Municipal Utility District and Turlock Irrigation District placed in the top five in several events at the national Public Power Lineworkers Rodeo in North Carolina. The competition— which drew participants from utilities in Florida, Colorado, Tennessee, South Carolina and other states— demonstrated lineworkers’ skills and safe work practices. Events were judged on safety, professional work practices, neatness, ability, equipment handling and timely event completion. NEW REPORT LOOKS AT GROUNDWATER REPLENISHMENT POTENTIAL STATEWIDE The California Department of Water Resources estimates there is an annual average of 1.5 million acre-feet of water available statewide to replenish groundwater basins, according to the Water Available for Replenishment final report (April 2018). New projects would be necessary to divert and convey the total amount of water. “Local jurisdictions must take an all-of-the-above approach and develop a diverse water portfolio of conservation, recycling, desalination, additional storage and conveyance,

The number of Tesla batteries delivered in March (shown at right) to the Michelson Water Recycling Plant, where they will be installed as part of Irvine Ranch Water District’s moneysaving energy storage program. The 7 MW/34 MWh system will store energy when rates are lowest, making it available at peak hours when rates are highest.

26 CALIFORNIA WATER & POWER SUMMER 2018

stormwater capture and transfers,” DWR explained.

1 GW

The total projected energy load from residential and nonresidential electric vehicle chargers in California by 2025. Source: California PlugIn Electric Vehicle Infrastructure Projections: 2017-2025 (March 2018)

$2.7 BILLION The amount the California Water Commission plans to award to kick-start as many as eight major water storage projects, including the new Sites Reservoir project, and the expansion of Los Vaqueros and Pacheco reservoirs.

InnovativeCommunities A ROUNDUP OF RECENT CALIFORNIA UTILITY ACCOMPLISHMENTS

Alameda Municipal Power earned a credit rating upgrade from Fitch Ratings based on the utility’s strong financial performance. The upgrade moves AMP’s rating from A+ to AA-. Fitch Ratings noted AMP’s financial performance has been consistently strong. This year, Eastern Municipal Water District led the creation of a regional effort called the San Jacinto Coalition, which will help more than 40 agricultural customers meet requirements in a conditional waiver designed to reduce or prevent runoff from local agricultural operations. More income-qualifying senior citizens can take advantage of Imperial Irrigation District's energy-assistance programs after the IID Board of Directors unanimously approved lowering the qualifying age from 65 to 62. Approximately 700 IID electrical customer accounts will benefit from the change. Lassen Municipal Utility District has launched its Plug Into Savings 2.0 program, which offers customers a free energy audit, free LEDs, high-performance showerheads, advanced power strips and PC devices. Merced Irrigation District has again received top national recognition for exceeding the principles of financial reporting and transparency as a public agency. The district received a certificate of achievement for excellence in financial reporting through the Government Finance Officers Association. Metropolitan Water District’s Board of Directors voted to approve a three-year, $14.7 million contract extending the agency’s culturally diverse, multimedia advertising and public outreach campaign for water conservation across Southern California. The campaign will introduce new marketing strategies to promote water conservation rebate programs. Northern California Power Agency will provide wholesale energy service—including scheduling coordination and portfolio management and optimizing services—to San Jose Clean Energy under a new contract approved by the San Jose City Council. A City of Palo Alto open house in May took interested visitors from the community behind the scenes to see how the utility operates. The Placer County Water Agency Board of Directors approved a memorandum with South Sutter Water District allowing for continued operation of conveyance facilities that deliver water to PCWA agriculture customers in western Placer County. Under the agreement, PCWA assumes more responsibility of day-to-day operations of the canals. Riverside Public Utilities continues to embrace sustainable practices with the addition of 24 state-of-the-art electric vehicle chargers in downtown Riverside. In spring 2018, Santa Clara Valley Water District rolled out a new water truck called “H2O to Go.” Standing 11 feet tall, the water dispenser on wheels holds approximately 500 gallons of chilled tap water. Residents can fill up at any of the vehicle’s 14 dispensers. Sacramento Municipal Utility District has removed the state-mandated SB-1 solar surcharge from all customer bills. Funds from the surcharge initiated in 2008 were used to help develop residential and commercial solar capacity throughout SMUD’s territory, including 125 megawatts of solar generation during the past 10 years. In spring 2018, the City of Glendale invited artists to paint murals on more than a dozen utility boxes. Murals have been painted on more than 100 boxes so far as part of the Beyond the Box program. Redding Electric Utility has expanded and simplified its electricity discount program for income-qualified customers. The program grandfathers in existing subscribers, expands and simplifies eligibility, reduces recertification burden, nearly doubles the percentage of subscribers receiving the maximum benefit and allows for a 50 percent increase in subscribers. Silicon Valley Power now provides carbon-free electricity to all residential customers as the standard default power supply. Carbon-free electricity from SVP consists of 50 percent large hydroelectric power and 50 percent renewable energy sources. The San Francisco Public Utilities Commission is gearing up to provide cleaner energy to more than 100,000 San Francisco residents and businesses this summer. PUC commissioners voted to give the city utility the authority to enter into long-term supply agreements with renewable and shaped energy providers. The City of Victorville earned awards from the High Desert Regional Energy Leader Partnership for the municipality's energy-saving measures, including completion of a greenhouse gas inventory and participating in outreach events. Western Municipal Water District again received the District Transparency Certificate of Excellence from the Special District Leadership Foundation. The award recognizes outstanding efforts to promote transparency and open governance. In April, the Sacramento Section of the American Society of Civil Engineers named the Yuba Goldfields 100-year Interim Flood Control Project the winner of the 2017 outstanding small project of the year award. SUMMER 2018 CALIFORNIA WATER & POWER 27

Powering Powering culture culture change change How Redding Electric Utility looked inward to better serve its community By Matt Williams

t’s no secret California’s electric industry has been radically transformed the past decade through the rise of distributed energy resources, California’s renewable energy mandates, net metering requirements, increased customer expectations and a swath of other factors. Simply put, many local utilities— understandably—have been challenged to keep up with the times. At the northernmost end of the Central Valley, Redding Electric Utility, like some other publicly owned utilities, came to realize its old model of doing business—where individual business divisions such as customer service, energy resources, and transmission and distribution worked separately and mostly independently—wasn’t well suited 28 CALIFORNIA WATER & POWER SUMMER 2018

to an increasingly complex and interconnected industry. When Barry Tippin become REU’s director in 2011, he soon realized bold changes were needed. Staff were clamoring for a structural reorganization. But how to do it? SITUATION

In 2017, Tippin was promoted to the position of Redding city manager. When he arrived at REU seven years ago, he quickly discovered the utility had grown up in a piecemeal fashion over decades. When there were emerging needs, the utility tended to create an entirely new branch. REU became an odd mix of nine direct reports below the utility director, and created a managerial hierarchy that Tippin thought didn’t make sense. Organizational silos put in place long ago were entrenched. There was limited connection between what energy services was doing and what distribution was doing, and both were

disconnected from customer service and power resources. Generally, people from different divisions were not communicating. Tippin saw a benefit in moving away from a directordriven organization and toward a collaborative, executive team. “We didn’t reorganize because it was necessarily broken or put together in a poor fashion,” Tippin said. “As everybody in the electric industry knows, the changes that took place between 2007 and 2015 were immense. We all need to be rowing in the same direction.” Dan Beans, who succeeded Tippin as REU’s utility director in 2017, said at times the organization was built around politics, avoiding personality conflicts, and a path of least resistance to reduce internal friction. It wasn’t always the most efficient, collaborative or logical structure. SOLUTION About four years ago, under Tippin’s

CaseStudy REU’S REORGANIZATION TIMELINE Courtesy Redding Electric Utility

Dan Beans and Assistant Director Mark Haddad (left) talk with local radio show hosts at the REU open house event.

leadership, REU started a strategic planning project and enlisted help from experts at an outside consultancy, Leidos. Eventually, REU’s 2020 strategic plan identified five overarching issues: 1. Our financial and business model must be enhanced to build a sustainable utility organization. 2. We must have an effective and healthy organization. 3. We must improve our technology to deliver increased value to our customers. 4. We must improve our communications. 5. We must attract, develop and retain a qualified workforce. Tippin knew the second strategic issue would be the foundational element from which all other success would flow. He directed Leidos to do an in-depth organizational review. The result was a top-to-bottom restructuring that reduced headcount at the top of the leadership ranks and moved day-to-day operational work back down to REU’s managers and rank-and-file staff. REU created an executive team consisting of the director and four immediate reports at the assistant director level. Those four were assigned roles and responsibilities across the entire organization to create

an easier pathway for decisionmaking. Beans, for example, became assistant director for transmission and distribution. Bernie Fargen was promoted to assistant director of a suite of centralized customer-focused initiatives—what is now called Enterprise Services. Beans credited Tippin for “basically turning us upsidedown.” Fargen said Tippin was the driving force, the one willing to take the risks associated with change. Tippin moved a few of his direct reports a few rungs down the decision ladder. He gave promotions when merited, but was careful not to label reassignments as demotions. Beyond restructuring the organizational chart, Tippin also asked his new team to participate in training exercises. “We had to look each other in the eye, be honest and yet be professional, about things we saw in each other, what was impacting our ability to function as a team,” Beans said. “This forced us to look in the mirror and at each other.” They clarified managerial roles, which prompted tough conversations. Through it all, work processes also were completely overhauled. Nearly all decision-making

2014-2015 ◊◊ Kicked off strategic plan. ◊◊ Had a third party, Leidos, conduct a comprehensive organizational review as part of strategic issue No. 2. 2015 ◊◊ Direct reports to the director reduced from nine to four, and created an executive team. ◊◊ Increased number of assistant directors from three to four. ◊◊ Reassigned staff based on effectiveness and ability. ◊◊ Began the transformation into a training organization instead of relying on outside or private-sector competition for journeylevel utility personnel. 2016 ◊◊ Provided leadership training for the executive team. 2017 ◊◊ Reduced executive team by one member. ◊◊ Created a leadership team comprised of functional area managers. ◊◊ Provided leadership training for the leadership team. 2018 ◊◊ Continue to evaluate the organization to ensure right-sizing and functional effectiveness as retirements provide opportunity. Source: Redding Electric Utility

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Powering Powering culture culture change change How Redding Electric Utility looked inward to better serve its community By Matt Williams

CaseStudy REU’S REORGANIZATION TIMELINE Courtesy Redding Electric Utility

Dan Beans and Assistant Director Mark Haddad (left) talk with local radio show hosts at the REU open house event.

SUMMER 2018 CALIFORNIA WATER & POWER 29

has been moved lower into the organization, empowering managers at all levels. This never would have happened in the hierarchical, director-driven structure REU had before—and one that many utilities still lean on today. “It begins to change the culture of the organization in a lot of ways,” Fargen said. “One obvious one is we now have managers and supervisors who know they’re making decisions that lead to the success of our organization. It creates an entirely different approach to their jobs.” OUTCOME AND LESSONS LEARNED

Today, there is greater community focus. As REU employees become accustomed to working within a team structure, those involved say it’s helping the utility become a service-oriented organization. REU’s operational managers have aligned goals, a common mission and shared solutions that are of value

to customers. The structure has enabled REU to improve everything from energy-efficiency rebate programs to community outreach and education. The guiding principle along the way has been serving REU’s local community. HAPPIER EMPLOYEES

While progress has been difficult at times, Beans said a recent employee survey shows REU’s workplace satisfaction has improved. Nevertheless, he and Tippin know work remains to continue the upswing. The reorganization is also helping REU transform into a training-based organization where the focus is developing and retaining existing staff. Headcount has decreased as the reorganization continues forward, Beans said. It takes time, trust and some courage. Tippin said change management of the sort REU is implementing can take as long as

seven years to fully take root, given there will always be a few holdouts who cling to the old way of doing business. REU is still a few years away from that milestone. Even then, Beans said further adjustments will be made as needed, all in the name of continual improvement. Beans and Fargen said trust is a key element, and leadership must extend it to their managers and staff. If you don’t have that trust, your restructuring may not be successful. “Trust is huge,” Beans said. “You have to get that. You’re dead without it.” Perhaps the biggest challenge is having the conviction and patience to try such a project in the first place. “There’s no barrier there except yourself,” Tippin said. “You have to have a willingness to move forward and believe what you’re doing is in the best interest of the utility and the community.” CWP

Accounting and consulting services for the utility industry aldrichadvisors.com 877-620-4489 30 CALIFORNIA WATER & POWER SUMMER 2018

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Drone Puts Eye On Lineworkers Electrical line mechanics from Glendale Water & Power replace aging power poles in the Adams Hill neighborhood as part of GWPâ€™s 4kV/12kV conversion program. The higher voltage increases capacity and efficiency by allowing more power to flow through the system, helping GWP meet customer demand. The photo was taken with a drone. Clockwise from the bottom are Harry Robertson, electrical line mechanic apprentice; Kurtis Wasko, electrical line mechanic apprentice; and Chris Sanchez, electrical line mechanic journeyman.

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Photo Credit: Clockwise from the bottom are Harry Robertson, electrical line mechanic apprentice; Kurtis Wasko, electrical line mechanic apprentice; and Chris Sanchez, electrical line mechanic journeyman.

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