Utility's leaders discuss a budget - and the future

Utility's leaders discuss a budget - and the future

Michele Ellson

Managers at Alameda Municipal Power are set to engage in a massive planning effort to prepare the 125-year-old utility and its workforce for changes in the technology it will use to deliver electricity to homes and businesses.

Those issues will be wrapped into a Public Utilities Board workshop on the utility’s budget to be held at 4 p.m. Monday in the Regina K. Stafford room at the Alameda Free Library, 1550 Oak Street. The board will also hold its regular meeting at 7 p.m. Monday at City Hall, where it will consider the third of five annual rate increases.

The utility is anticipating a $4 million shortfall in its $57 million budget plan for 2013 due to a host of rising costs, including nearly $900,000 more for power. The rate increase being considered Monday is expected to bring in an additional $1.4 million, and the utility has about $24 million in reserves its managers expect to draw on to help close the shortfall.

Utility managers also expect to sell $4.9 million in green power to other utilities next fiscal year, though that money will be set aside to fund greenhouse gas-lowering projects, AMP General Manager Girish Balachandran said. The board will also discuss a five-year, $21.6 million capital improvement plan that includes a LED streetlight project and another electric cable to Coast Guard Island, which Balachandran said would enhance reliability.

Balachandran said he’s preparing to kick off a planning effort to determine what technology the utility needs to have in place when, and also how AMP will have enough properly trained workers in place to manage it. He also wants to make sure workers, customers and the utility’s governing board are ready to address the changes.

“When we look at the technology that is going to be changing our business, we want to make sure we have the skills in our utility so we can actually manage the technology,” he said.

Balachandran said the utility has meters that are 70 years old and substations that are approaching 30 years of age.

“In the long run, you’re not even going to be able to buy the equipment we have in the field today,” he said.

One major technological change the utility’s leaders may ultimately put in place is a digital smart grid system that can gauge a customer’s electricity usage, troubleshoot and solve problems and provide enhanced security. Balachandran said AMP, which is watching other early adopters of the technology like PG&E to learn more about it, is getting set to put a business plan in place that lays out what technology the utility should put in place over the next decade.

AMP’s managers also need to figure out how to train or replace workers, some of whom are nearing retirement age, at a time when utility workers are in short supply – and other utilities are offering higher salaries. Information technology skills, he said, will be more broadly incorporated into the utility business as technology changes.

The electric company has its smallest staff since at least 1998, the year before it embarked on a short-lived bid to offer cable and Internet services. The average age of its workers is 48, and 43 percent of the utility’s workers will be eligible to retire in five years, according to a study reviewed by the board in December.

“We hired someone recently with no utility experience. But that’s essentially who we got,” Balachandran said. “They’re a smart person, and capable. It’ll just take longer to train them.”

The budget plan to be discussed Monday includes $30.3 million to pay for power and $20.1 million in operational costs. The utility also expects to make $5.6 million in payments to the city.

The power cost increase is being driven by increased transmission costs and efforts to replace power purchased at lower prices through a contract with Morgan Stanley that expires in 2014.

If approved, the rate increase will raise the average residential customer’s bill by $2.50 a month, Balachandran said. But he said the utility’s rates are still much cheaper than PG&E’s, saving Alameda customers $10 million this year.