Title
Receive a Report from the Public Utilities Board on Alameda Municipal Power’s (AMP’s) Five-Year Strategic Plan, Capital Improvements and Financial Status. (AMP)
Body
To: Honorable Mayor and Members of the City Council
From: Elizabeth D. Warmerdam, Interim City Manager
Date: July 16, 2015
Re: Receive a Report from the Public Utilities Board on Alameda Municipal Power’s Five-Year Strategic Plan, Capital Improvements and Financial Status
BACKGROUND
This is an information only report. No action by the City Council is required. The purpose of this report is to inform the City Council, through Exhibits 1 and 2, of the process and results of the formalization of the Public Utilities Board’s (Board) direction to Alameda Municipal Power’s (AMP) staff in the implementation of the Strategic Plan (Plan) recommendations (approved by the Board on April 20, 2015), which covers all aspects of AMP’s operations. In addition, Exhibit 3 describes the current financial payments from AMP to the City’s General Fund. Also, specific issues are outlined associated with distributed generation and are highlighted in “Current Issues” (Exhibit 2).
DISCUSSION
The Board has determined that AMP should focus on strengthening various aspects of its operations generally on a year-to-year and prioritized basis. A foundation has been created utilizing various strategies and initiatives. This positions the Utility for the future by preparing for technology advances, strengthening its workforce and assuring customer satisfaction through reliability, financial stability and efficient energy usage. These strategies and initiatives have been analyzed, structured and prioritized to create a five-year dimensional and fiscally prudent Plan.
In this regard, AMP management retained the services of the Lewis Group in September 2014 for the purpose of developing this comprehensive Plan.
The Design Team (General Manager and four Assistant General Managers) was tasked with the following:
• Creating an environmental scan;
• Identifying gaps with current initiatives and findings from the scan;
• Developing AMP’s Key Result Areas (KRAs) for the next 5-year period;
• Building a five-year plan that will include specific initiatives, work plans and completion schedules;
• Integrating existing AMP Initiatives and Strategies into the Plan where appropriate; and
• Creating an ongoing and measurable reporting mechanism.
The Plan process began in October 2014. The approach used by the Lewis Group consisted of several steps that led to a final Plan. These steps included discovery of the issues associated with the environmental scan, analysis, cross-functional sessions, building blocks, and creation of the final plan. Over 70 employees representing all divisions were engaged during the process of developing the Plan. The involvement of the majority of AMP’s employees was crucial in assuring concurrence and ultimate ownership of the Plan. The entire process included:
• 8 full-day analysis sessions with the Design Team
• 4 employee workshops
• 2 Board workshops
• 3 interviews with the Mayor and Council members
• 15 interviews with large and/or influential customers
The Plan was formally presented for review to the Board at its January 2015 meeting. Comments were solicited from both the Board and the public at-large. All comments were reviewed and discussed with those that submitted them. The final version of the Plan, as presented in this report, incorporates all relevant comments.
The Plan includes the findings from the process as previously described along with strategies that will enable AMP to meet its obligations as Alameda’s municipal electric provider. The process produced a number of critical elements that, together, will determine AMP’s future direction. They include:
• Global issues
• Issues within Alameda
• Critical stakeholders
• Priorities
• Mission
• Vision
• Values
• Key Result Areas (KRA)
• Goals
• Initiatives
The 5-year Plan (Road Map) is based on six Key Result Areas (KRAs) and their associated goals:
1) Customer Programs & Experience
§ Ensure that customers have a positive experience
§ Increase customer energy efficiency
§ Provide programs that support green Alameda
§ Provide programs that increase revenues
§ Increase community engagement and good will
2) Workforce
§ Achieve low OSHA incident rate
§ Maintain zero preventable vehicle accidents
§ Maintain low position vacancy rate
§ Develop workforce skills for AMP opportunities
§ Achieve high employee satisfaction
3) System Resiliency
§ Maintain low customer outage frequency and duration
§ Replace AMP infrastructure
§ Improve infrastructure project management workflow
§ Complete infrastructure for Alameda Point
4) Technology
§ Achieve total deployment or Advanced Meter Integration (AMI), also known as smart meters
§ Implement automated distribution system
§ Establish systems inter-operability
§ Maintain sufficient level of cybersecurity
5) Energy Resources
§ Develop alternative energy opportunities
§ Define power procurement plan for 2025
§ Achieve maximum utilization of Renewable Energy Credit funds
§ Achieve sustainable level of carbon neutral
6) Financial and Organizational Stability
§ Meet all bond covenants
§ Ensure AMP’s average rates are competitive
§ Ensure mutually-agreeable transfer to City
§ Ensure balanced budget
§ Ensure effective organizational management
Each goal includes a number of Initiatives and Work Plans which have also been developed and are included in the final Plan document.
The plan as presented in this report provides an operational roadmap for AMP through 2020. Focus will be placed on recommendation activities in years one through three, with periodic plan reviews and revisions as utility and industry conditions are constantly changing. The five-year Plan, as presented, has commenced with implementation of recommendations in the fourth quarter of Fiscal Year (FY) 2015 as indicated in the individual initiatives.
FINANCIAL IMPACT
There is no financial information provided at this time. Financial considerations have been presented to, and approved by the Board at its June 15 meeting for specific projects related to FY 2016 initiatives.
ENVIRONMENTAL REVIEW
This action is exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15061(b)(3).
RECOMMENDATION
Receive a report from the Public Utilities Board on Alameda Municipal Power’s five-year Strategic Plan, capital improvements and financial status.
Respectfully submitted,
Glenn O. Steiger
General Manager
Alameda Municipal Power
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibits:
1. AMP Five-Year, 2015-2020 Strategic Plan
2. Current Issues Presentation
cc: Public Utilities Board