HomeMy WebLinkAbout4.5(a)--Approve Issuance of Request for Proposals for Electric Utility Line Construction Contract
CITY OF REDDING
REPORT TO THE CITY COUNCIL
Recommendation
Approve the issuance of Request for Proposals for electric utility line construction contractor
services to address Redding Electric Utility’s aging distribution system infrastructure.
Fiscal Impact
No fiscal impact is associated with the Request for Proposal (RFP) issuance. Upon selecting a
Line Construction Contractor, Redding Electric Utility (REU) will present all contracts, budget
resolution(s), and short-term and long-term fiscal impacts for the City Council’s (Council)
consideration. Ongoing funding will be requested as part of biennial budgeting processes.
Staff anticipates capital expenses related to this effort to begin in Fiscal Year 2024 - 25. This
estimate correlates with REU’s five-year financial plan presented to the Council on September
20, 2022, which estimated expenses related to the Five-Year Capital Plan beginning after July 1,
2023.
Alternative Action
The Council could choose not to approve the issuance of an RFP and provide alternative
direction to staff.
Background/Analysis
On August 17, 2021, the Council approved REU’s Five-Year Capital Improvement Plan and
REU’s 2026 Strategic Plan. Goal Two of the Strategic Plan, Replace Aging Distribution
System Infrastructure, states:
MEETING DATE: January 17, 2023
ITEM NO. 4.5(a)
FROM:
***APPROVED BY***
nzettel@cityofredding.org
btippin@cityofredding.org
SUBJECT: 4.5(a)--Approve Issuance of Request for Proposals for Electric Utility Line
Construction Contract
Nick Zettel, Director of
Redding Electric Utility
Report to Redding City Council January 10, 2023
Re: 4.5(a)--Approve Issuance of Request for Proposals for Electric Utility Line Construction
Contract Page 2
With a focus on reliability and completion of an internal aging infrastructure assessment,
we identified several distribution system elements that require replacement as part of
ongoing routine operations. The projects will center on underground, overhead, and
meter system replacement to ensure a solid platform is established for future
modernization efforts. Key performance indicators such as total customers and outage
minutes are used to gauge the effectiveness of aging asset replacement. Replacement of
at-risk elements will reduce outage events while providing customers with a higher
degree of reliable service.
REU typically performs all distribution system maintenance utilizing in-house staff. However,
based on the volume of work identified in the Five-Year Capital Improvement Plan coupled with
existing staffing levels, REU requires contractors over the next five years and possibly longer,
depending on the infrastructure replacement schedule. Current estimates indicate the need for
two additional line crews over a multi-year contract with provisions for yearly contract
extensions.
Typically, the City of Redding issues RFPs after the Council has authorized funds. Based on the
proposal and expenditure uncertainty for this particular effort, REU requests authorization to
issue an RFP before funding approval. The result would be a proposed solution, budget
resolution(s), and fiscal impacts presented as one item for the Council’s consideration at a future
meeting.
Environmental Review
This is not a project defined under California Environmental Quality Act, and no further action is
required.
Council Priority/City Manager Goals
• Government of the 21st Century – “Be relevant and proactive to the opportunities and
challenges of today’s residents and workforce. Anticipate the future to m ake better
decisions today.”
Attachments
Previous Staff Report - August 17, 2021, item no. 9.5(c)--Redding Electric Utility's Strategic
Plan
Previous Staff Report - August 17, 2021, item no. 9.5(d)--Redding Electric Utility's Five-Year
Capital Improvement Plan
CITY OF REDDING
REPORT TO THE CITY COUNCIL
Recommendation
Approve Redding Electric Utility’s 2026 Strategic Plan establishing new vision and mission
statements, identifying core organizational values; and setting goals.
Fiscal Impact
There is no fiscal impact associated with accepting Redding Electric Utility’s (REU) 2026
Strategic Plan.
Alternative Action
The City Council (Council) could choose to not accept REU’s 2026 Strategic Plan and provide
alternative direction to staff.
Background/Analysis
The previous REU 2020 Strategic Plan was approved by the Council in 2015. At that time, REU
embarked on a structural overhaul to better align the workforce with customer needs, and the
strategic plan helped staff focus on several critical areas, including technology, workforce and
culture, communications, and financial stability. To address today’s fast pace of change to the
utility industry, REU staff engaged in a new strategic planning effort.
With the assistance of Hometown Connections, Inc. (HCI), an advisory team of community
members, City of Redding staff, and members of the Council worked to develop the 2026
Strategic Plan (Plan). The strategic planning team examined REU’s strengths and limitations to
confirm the utility’s mission and priorities that will serve as guideposts for long-term project
development and planning.
MEETING DATE: August 17, 2021
ITEM NO. 9.5(c)
FROM:
APPROVED BY***
dbeans@cityofredding.org btippin@cityofredding.org
SUBJECT: 9.5(c)--Consider Redding Electric Utility's 2026 Strategic Plan.
Daniel Beans, Director of
Electric Utility
Report to Redding City Council August 10, 2021
Re: 9.5(c)--Redding Electric Utility's Strategic Plan Page 2
New vision and mission statements as well as six core organizational values were identified as
part of the strategic plan development process. Additionally, nine strategic goals were identified
to allow REU to successfully fulfill its vision and mission:
Complete Critical Wildfire Mitigation Projects
Replace Aging Distribution System Infrastructure
Initiate Distribution Modernization Program Element
Implement Distribution Risk Management Plan
Complete Energy Trading Modernization and Integrated Resource Plans
Minimize Compliance Failures and Penalties
Align Revenue Collection with Cost-of-Service
Enhance Communication with Customers and the Community
Enhance Employee Development, Attraction, and Retention
These goals were designed to aid REU staff in meeting the three strategic priorities identified
within the Plan: mitigate risk, maximize reliability, and meet regulations.
Council Priority/City Manager Goals
Government of the 21st Century – “Be relevant and proactive to the opportunities and
challenges of today’s residents and workforce. Anticipate the future to make better
decisions today.”
Attachments
REU's 2026 Strategic Plan (available online)
Strategic Plan
2021-2026
Redding
Electric Utility
Executive Summary
Proud of our History, Preparing for the Future
Vision, Mission & Core Values
Strategic Priorites
Goals
Acknowledgements
03
05
07
09
10
13
Contents
In 2021, Redding Electric Utility (REU) celebrates 1 00 years o f service. REU take s
great pride in h elping to make the C ity of Redding a nd Shasta County a great place
to live, w ork a nd play. Today, w e continue to provide reliable and a ordable electric
service to the residents and busin esse s of Red ding, wh ile developing the exibility
and in novation to respond to the changing u tility m ar ketplace. We remain committed
to providing strong va lu e to the Redding community fa r into the fu ture.
03
Executive
Summary
Redding and Shasta County powered
on through the Carr Fire of 2018 and
Snowmaggedon in 2019. The year 2020
represented another challenge for the electric
utility industry. The COVID-19 pandemic
proved to be devastating to our community and
nation as citizens struggled to remain healthy
many parts of the nation as natural disasters
damaged equipment and disrupted lives.
Our employees worked together, as front-
line responders, to keep the power on while
keeping themselves and our customers safe
As we look ahead, we must continue to
think and act strategically, addressing
changes in technology, customer
expectations, regulations and the climate,
especially related to wildres. We must
continue to be proactive and adapt quickly
to the changes impacting the electric
utility industry to best serve the Redding
community for the next 100 years. Change
is a constant in the electric utility industry,
and we are determined to act in a way
that best serves our customers and the
community far into the future. As a local,
publicly-owned utility, we are invested in
the success of Redding.
REU completed its previous strategic plan
in 2015. At that time, the organization
embarked on a structural overhaul to
better align the workforce with our
customer needs, and the strategic plan
helped us focus on several critical areas,
including technology, workforce and
culture, communications and nancial
stability. To address today’s fast pace
of change to the utility industry, we
engaged in a new strategic planning
face when possible, and virtually when
COVID-19 restrictions reduced our ability
to meet in person. Several meetings were
conducted with City of Redding Council
stakeholders to update REU’s strategic
plan and chart a course for the future.
The strategic planning team examined
our strengths and limitations, conrming
the utility’s mission and priorities that will
serve as guideposts for long-term project
development and planning.
04
The 2021 Strategic Plan includes several
important updates to our vision, mission and
priorities. The vision statement, identifying
the value we seek to bring to the Redding
community states:
REU makes Redding better by connecting
with our customers and being their trusted
and reliable, community-owned utility
The mission statement, which describes
what we will do to achieve that vision reads:
REU, in partnership with the Redding
community, is committed to improving the
public’s safety and providing reliable, cost-
effective service
Our organizational values will play a key
role in how we fulfill our mission and vision.
We have an obligation to the community to
act in its best interests. As such, we have
identified six core values which will drive
our actions:
Safety
Integrity
Customer Focus
Teamwork
Communication
Stewardship
Looking ahead to the coming years, we
have identified three key areas in which
we must excel for the utility to serve the
Redding community. They are:
Mitigate Risk
Maximize Reliability
Meet Regulations
We believe attention to these three
areas will position us to deliver valuable
service to the community for many years
to come. When the utility was formed
100 years ago, city leaders recognized
the wisdom of allowing the community to
control its own destiny by building and
managing its electric service. Today, the
City continues to deliver value to the
community through the local control of
utility services, maintaining high reliability
at very competitive rates, while keeping
dollars and jobs in the community.
We invite you to review this strategic plan
and share your thoughts with us about the
direction of the utility. You, the customer and
citizen, are the owners of Redding Electric
Utility. The ownership partnership formed in
1921 has been – and will remain – a key to
our success in the years ahead.
Executive
Summary
05
Proud of Our History,
Preparing for
the Future
The world has changed greatly since REU began distributing electricity to the people of
Redding 100 years ago. The utility, too, has seen significant change from the days when
it purchased all of its wholesale power from area investor-owned utilities.
Over the decades, we established greater
control over our power supply, contracting
with the federal government for low cost
hydroelectric power, partnering with other
agencies to access significant economies
of scale and building our own generation
facilities. These forward-looking steps by
past city and utility leaders ensured greater
reliability, rate stability and predictability.
As a result, Redding’s lights remain on, bills
remain manageable and its owners’ best
interests are being supported.
And who are those owners? No, it is not Wall
Street investment firms, hedge funds and
other shareholders. It is you, the customers
of the utility and the citizens of Redding. As
a public power utility, rather than an investor-
owned utility, our owners are our customers.
This means decision-making on issues
important to you, such as rates, power supply,
reliability and customer service, are made
locally. The utility’s governing board is the
Redding City Council, which embraces the
critical role that the utility plays in serving the
community.
REU employs 193 people, who serve
44,905 residential and commercial
customers within the corporate boundries
of the City of Redding. Redding’s
population and economy have remained
remarkably stable for many years. Most of
this century has seen modest growth in
population, lagging behind both California
and the U.S. population growth rates. Yet,
interest in Shasta County’s vast natural
resources continues to drive strong tourism
as well as new residents, citing the area’s
natural beauty as a draw.
The regional economic outlook is good,
having recovered fairly quickly from the
pandemic-fueled downturn. The local
industry is diversified, with the largest
employment sectors being healthcare, retail,
education, food, lodging and government.
Redding is well-positioned to remain
economically vibrant in the years ahead.
The utility must continue to adapt to
changes in our natural environment, new
state and federal regulations, technology
advancements and evolving customer
expectations.
For example, the wildfire “season” is nearly
a year-round issue now. We recognize the
important role we must play in planning for and
responding to fires that may impact our service
territory. In 2021, technology and human
resources in the Redding Fire Department
and Parks Division have been provided
extraordinary tools to battle the wildfires
that continue to impact California. A state-
of-the-art emergency operations center was
established at our headquarters building
to allow first responders and leaders within
06
our community to work closely together
to prevent loss of life and property due
to catastrophic events. We work closely
with other Redding departments and rst
responders to ensure public safety.
Numerous other technological tools
are being implemented, including new
communication systems, IQ FireWatch
cameras, security cameras in and around
electric infrastructure and aerial imagery
for assessing the vegetation canopy. All of
these tools are congregated in the City of
Redding’s new emergency operations center.
Looking within the utility, REU’s infrastructure,
reliability, and operations are generally in
good shape. However, many years of
deferred maintenance are resulting in more
frequent outages of longer duration. We
are at a pivotal time regarding our aging
distribution system, and signicant capital
maintenance and upgrades are needed in
order for us to continue providing reliable
community.
but we contend with higher wages at
utilities in Northern California which draw
from our workforce.
Financially, the utility is in solid shape,
with strong city council leadership and
diversied revenue.
REU’s system reliability is among the highest
in the state. Yet maintaining system reliability
is a never-ending process, and REU must
continue to evaluate its infrastructure and
ensure upgrades and technology are
manner.
In concert with a robust power generation,
transmission and distribution system, REU’s
Customer Services Division provides
outstanding service, continually going
above and beyond to help our customers.
In response to the COVID-19 pandemic,
our Customer Services team developed an
extensive community outreach program,
the Comprehensive Community Assistance
Program to inform our customers about
available resources.
These technologies improve operations,
reliability, safety and customer service.
By providing funding for reghters and
vegetation management personnel, we
have been able to carefully identify and
mitigate potential re hazards that could
impact or be caused by our utility. In
addition, we have funded a large goat
program as part of vegetation management.
Through proactive measure and working
closely with other city departments, we will
continue to reduce the large risks wildres
pose to our beautiful area.
Proud of Our History,
Preparing for
the Future
07
Vision, Mission
Core Values
Vision
an ideal future for the utility as it serves the
community. It can be thought of as a destina-
tion; we hope an ambitious one. With this as
our responsibility, our vision statement reads:
REU makes Redding better by connecting
with our customers and being their trusted
and reliable, community-owned utility
High reliability, competitive rates, and excel-
lent customer service are the foundation of
our values proposition to the community. Yet
there is much more we can and will do as
we embrace this vision.
Mission
If a vision statement describes a destination,
the mission statement describes how an
organization will get there. What will we do
to attain that vision? Our mission reads:
REU, in partnership with the Redding
community, is committed to improving the
public’s safety and providing reliable,
We very much view our role in the commu-
nity as a partnership, whether this is with
other city departments or outside agencies
or organizations. For example, REU and the
Redding Fire Department and Parks Depart-
ment coordinate their wildre prevention
and business customers, REU must deliver
ally exploring ways to improve all aspects
of our operations.
its enduring mission, vision, and values.
Central to Redding Electric Utility’s planning for the future is ensuring all eorts align with
08
Core Values
The vision and mission describe what we do
in order to support the Redding community.
But how will the utility act as it fulfills these
priorities? Establishing our core values is a
key part of defining who we are, how we will
serve our customers and how we will treat
each other. These are expectations we have
of ourselves, and to which we will hold each
other accountable. Below are outlined six
core values with corresponding behaviors
and actions.
Safety
We promote ownership and accountability
for safety within the department
We have an uncompromising commitment
for the public and employees’ safety
Through our safety committee, programs,
activities and other initiatives, we promote
a culture of safety
We promote public safety through
ongoing education, training, awareness
and compliance
We support an environment in which the
public can be served safely
Integrity
We are accountable, ethical, honest, and
transparent in everything we do
We will protect and maintain the goodwill
and trust our community has placed in us
We are loyal to the public interest and
fairness to all ratepayers
Customer Focus
REU employees consider the customer
first in every decision we make so that we
consistently exceed customer expectations
We listen to, anticipate and proactively
serve customer wants and needs
We focus on delivering what is most
beneficial to our internal and external
customers
Customers and their safety and
satisfaction are our highest priority
Teamwork
Our team consists of employees of the
Electric Utility, the City, the Redding
community and Joint Powers Agencies
We demonstrate the principles of Hungry,
Humble and Smart as explained by the
best-selling author Patrick Lencioni in his
book The Ideal Team Player
We are a cohesive unit that exists solely
for the benefit of the community we serve
We believe Teamwork is vital for success
We feel, act and behave as one big team
Open Communication
By actively listening to the needs of the
community, we provide timely responses,
create understanding of other’s
perspectives and show we care
Through transparent communication,
we keep all stakeholders informed,
avoid unnecessary surprises and reduce
confusion
We are committed to action and follow up
when necessary, to help provide closure
for our stakeholders
Stewardship
We strive to represent and incorporate the
values and needs of the community in the
management of the utility
We focus on maximizing value for all
customers over the long term
We manage our physical assets to
maximize safety and reliability at the
lowest possible cost
We offer programs and education to help
our customers save money and/or reduce
their impacts on the environment
We continuously decrease our impacts on
the environment while striving to maintain
affordable electric rates for our customers
Vision, Mission
Core Values
09
Strategic
Priorities
Three strategic priorities have been identied as points of emphasis in our strategic
planning process. To take advantage of our organizational strengths and to address
opportunities for growth and improvement, the following strategic priorities serve as
the framework for our strategic plan.
01
Manage risk necessary to protect
our customers from physical and
nancial harm.
From wildres to pandemics, change is
the new normal. We continue to assess
the impacts, risks – and opportunities
that this change brings.
02
Provide best in class safety,
reliability and services to support
the needs of our community.
We will continue to take the steps
necessary to maintain and upgrade
our distribution system. Reliability
also means being a good corporate
citizen, acting in the best interests
of the community, being responsive
to customer needs, and continuing
to build trust among our many
stakeholders.
03
To comply with all mandated
regulations in a manner
to maximize reliability and
As the state and federal regulatory
landscape continues to change, the
comply with these regulations while
ensuring customer needs for reliability
10
Below are our initial goals that will be critical in allowing REU to successfully fulfill its
vision to “make Redding better.” For most of these, related metrics will allow the utility
to keep staff, the City Council, our customers and our community updated on their
progress. We look forward to sharing that progress with you.
Goals
GOAL 1
Complete Critical Wildfire
Mitigation Projects
GOAL 2
Replace Aging Distribution
System Infrastructure
GOAL 3
Initiate Distribution
Modernization Program Element
STRATEGIC PRIORITIES
STRATEGIC PRIORITIES
STRATEGIC PRIORITIES
In order to continually manage wildfire risk and the threat to public safety, our Wildfire
Mitigation Plan identified several technology and distribution system improvements as
significant mitigating factors to the detection and prevention of future wildfires in our service
territory. Due to the long lead time for planning and construction, several critical projects
remain outstanding with targeted completion within the 5-year horizon. The majority of the
technology improvements have been deployed, with the remainder focusing on vegetation
inspection systems. Distribution system improvements range from circuit hardening and
strategic underground to developing a more coordinated vegetation management program.
With a focus on reliability and completion of an internal aging infrastructure assessment, we
identified several distribution system elements that require replacement as part of ongoing
routine operations. The projects will center on underground, overhead and meter system
replacement to ensure a solid platform is established for future modernization efforts. Key
performance indicators such as total customers and outage minutes are used to gauge the
effectiveness of aging asset replacement. Replacement of at-risk elements will reduce outage
events while providing customers with a higher degree of reliable service.
New technologies are available for deployment on our system to provide faster outage
detection, real-time situational awareness and modernized software solutions for system
operators. By modernizing our distribution system, we can ensure outage times are minimized
by faster detection and response by pinpointing the outage and focusing resources on
the needed repairs. Communication systems will be bolstered by the deployment of fiber
optic lines on our system with additional spare capacity for future use. Power quality will be
enhanced with projects aimed at line capacity upgrades and power factor improvement.
mitigate risk
mitigate risk
meet regulations
maximize reliability
maximize reliability
maximize reliability
11
GOAL 5
Complete Energy Trading
Modernization and Integrated
Resource Plans
GOAL 6
Minimize Compliance Failures
and Penalties
STRATEGIC PRIORITIES
STRATEGIC PRIORITIES
Our recent overhaul of the Energy Risk Management Policy requires detailed processes to
ensure all policy requirements are achieved. To align the policy with day-to-day staff duties,
a set of business rules will be developed to identify modeling and analytical methods used
to provide energy trading and hedging recommendations to the Energy Risk and Risk
Oversight Committees. Key performance indicators from this project will center on the ability
to keep our energy portfolio metrics in compliance with the Energy Risk Policy. Separately,
updated Integrated Resource Plans will be needed to address the future energy landscape
in California, with particular focus paid to electrification of transportation and buildings. In
addition to focusing on load growth from carbon reduction efforts, additional renewable
energy resources will be required to maintain compliance with the State’s Renewable Portfolio
Standard requirements.
As part of our North American Electric Reliability Corporation registration as a Transmission
Owner and Operator, we are continually striving to develop a culture of compliance with a
particular focus on regulatory best practices. To support a culture of compliance and the
development of best practices, a Regulatory Compliance Internal Controls project will be
completed to ensure any compliance failures are minimized. With the recent requirement to
provide enhanced system security by SB699, we will be focusing on bolstering the security at
our substations by adding additional layers of protection from sabotage or break-ins.
mitigate risk
mitigate risk
meet regulations
meet regulations
maximize reliability
GOAL 4
Implement Distribution Risk
Management Plan
STRATEGIC PRIORITIES
Upon completion of our internal Operational Risk Assessment, we discovered several
opportunities to improve our internal working systems to minimize risk from organization
structures, inventory and workflow management techniques. In tandem with replacing
aging equipment and installing new technologies to modernize the system, several projects
have been selected to ensure the support systems are intact to minimize system risk. This
includes a new inventory control system, workflow management systems and software, and
organizational structure and staffing changes to reflect a more streamlined operations team.
mitigate risk maximize reliability
Goals
12
Goals
GOAL 7
Align Revenue Collection with
Cost-Of-Service
GOAL 8
Enhance Communication with
Customers and the Community
GOAL 9
Enhance Employee Development,
Attraction and Retention
STRATEGIC PRIORITIES
STRATEGIC PRIORITIES
STRATEGIC PRIORITIES
Aligning revenues with the cost of providing electric service is imperative to mitigate risks.
REU will implement two projects to analyze and recommend a rate structure. The first
project will consist of a cost-of-service study that analyzes electric consumption patterns
of service. To garner support for the rate structure recommendation, a second project will
ensure significant outreach and community engagement to gather comments, provide
education and develop consensus.
Our Customer Focus Core Value is intended on meeting the needs of our customers and
fostering an ownership relationship with the community. To support this core value, we
must increase our communication channels, frequency of outreach and inclusion with our
customers as we move through this Strategic Plan cycle. Two projects have been developed
to meet this goal. A customer needs survey project will help us identify the areas requiring
more attention and communication, while an updated communications plan project will ensure
we are more effective at stakeholder processes and customer outreach. Future surveys will
be used to gauge the effectiveness of these projects.
Because we value our employees, REU identified several employee training and procedure
management projects to ensure our teams understand their roles and responsibilities in
serving our customers. Furthermore, in order to attract and retain quality and dedicated team
members, ongoing labor market analysis must occur to ensure the working environment of
REU is one that attracts and maintains employees. This will include studies of pay and benefits
and working conditions. These workforce initiatives are imperative to deliver the strategic
plan successfully.
mitigate risk
mitigate risk
meet regulations
maximize reliability
mitigate risk
meet regulations
maximize reliability
13
Acknowledgements
We wish to acknowledge the many contributions of Redding City Council Members and
members of the public. This is a better strategic plan because of extensive discussion,
debate and challenges that arose throughout this process. Our process relied heavily
on an advisory team of stakeholders from within the City and the community for their
perspectives. We thank all of you for your commitment and diligence.
ADVISORY TEAM
Chuck Aukland
Public Works Director
Steve Bade
Deputy City Manager
Tim Danielson
Salvation Army Captain
Nate Fairchild
Director of Science and Charter
School Administration
Jake Mangas
President & CEO, Chamber
of Commerce
Mark Mezzano
City Council
Kristen Schreder
City Council
Chad Scott
CEO of the Builder’s
Exchange
Jerrod Vanlandingham
Fire Chief
For more information:
City of Redding Electric Utility
3611 Avtech Parkway
Redding, CA 96002
530.339.7300
www.reupower.com
9.5(c) 2026 Strategic Plan
Presented to the Redding City Council
August 17, 2021
Presented by: Electric Utility Director Dan Beans
100 Years of Redding Electric Utility
The City of Redding purchased the electric utility
from a predecessor of PG&E on December 21, 1921
for $57,356.18.
o In the first year of operations, the City made a
net gain of $29,820 and had a lower kWh rate
set than before being publicly owned
o Redding was the first city in Northern California
to acquire a public electric utility through
eminent domain proceedings
REU continues to create value and deliver
exceptional service through the challenges of
meeting an uncertain regulatory future.
Strategic Plan Development Process
Vision
REU makes Redding better by connecting
with our customers and being their trusted
and reliable, community-owned utility
Mission
REU, in partnership with the Redding
community, is committed to improving the
public’s safety and providing reliable, cost-
effective service.
Core Values
Establishing core values is a key part of
defining who we are, how we will serve our
customers and how we will treat each other.
o Safety
o Integrity
o Customer Focus
o Teamwork
o Communication
o Stewardship
These organizational values play a key role
in how we will fulfill our mission and values.
Priorities
Three strategic priorities have been
identified as points of emphasis in our
strategic planning process.
o Mitigate Risk
o Maximize Reliability
o Meet Regulations
These Strategic Priorities serve as the
framework for our Strategic Plan.
Risk
Reliability
Regulation
Strategic Plan Goals
o Complete Critical Wildfire Mitigation Projects
o Replace Aging Distribution System Infrastructure
o Initiate Distribution Modernization Program Element
o Implement Distribution Risk Management Plan
o Complete Energy Trading Modernization and Integrated
Resource Plans
o Minimize Compliance Failures and Penalties
o Align Revenue Collection with Cost-of-Service
o Enhance Communication with Customers and the
Community
o Enhance Employee Development, Attraction and Retention
Thank you to our Strategic Plan Advisory Team
for your commitment and contributions
o Council Member MarkMezzano
o Council Member KristenSchreder
o Chuck Aukland, Public Works Director
o Steve Bade, Deputy City Manager
o Tim Danielson, Salvation Army Captain
o Nate Fairchild, Director of Science and Charter School Administration,
Shasta County Office of Education
o Jake Mangas, President & CEO, Chamber of Commerce
o Chad Scott, CEO, Shasta Builders’ Exchange
o Jerrod Vanlandigham, Fire Chief
Approve Redding Electric Utility’s 2026 Strategic Plan establishing new
vision and mission statements, identifying core organizational values, and
setting goals.
Recommendation
CITY OF REDDING
REPORT TO THE CITY COUNCIL
Recommendation
Authorize the following actions relative to Redding Electric Utility (REU):
1) Accept the Five-Year Capital Improvement Plan; and
2) Adopt Resolution approving and adopting the 6th Amendment to the City Budget
Resolution No. 2021-078 authorizing the creation of four additional line personnel
positions for Redding Electric Utility.
Fiscal Impact
There is no fiscal impact associated with accepting the Five-Year Capital Improvement Plan.
Staff will return to the City Council (Council) with a contract for Engineering Services as
identified in the Five-Year Capital Improvement Plan along with the necessary budget
resolution. Additionally, Redding Electric Utility (REU) will return to the Council with project
specific budget resolutions as design services are completed.
The annual cost of the four additional Lineman positions is estimated at $800,000 per year
subject to change based on future labor agreements). Budgetary savings from current vacant
positions is anticipated to cover the cost of filling the new positions for the current budget cycle,
with the ongoing annual cost of the positions included as part of REU’s biennial budget requests.
For reference, in Fiscal Year 2020-21 REU realized personnel savings due to vacancies of
approximately $2.5 million, which resulted in personnel savings net of salary adjustments and
overtime of approximately $900,000. However, depending on actual savings, REU may be
seeking additional budget authorization at future mid-year or mid-cycle budget updates.
Alternative Action
The Council could choose to adopt any combination of the recommendations above, and/or
provide additional direction to staff.
MEETING DATE: August 17, 2021
ITEM NO. 9.5(d)
FROM:
APPROVED BY***
dbeans@cityofredding.org btippin@cityofredding.org
SUBJECT: 9.5(d)--Consider Redding Electric Utility's Five-Year Capital Improvement Plan;
and Resolution authorizing additional line personnel positions.
Daniel Beans, Director of
Electric Utility
Report to Redding City Council August 10, 2021
Re: 9.5(d)--Redding Electric Utility's Five-Year Capital Improvement Plan Page 2
Background/Analysis
The Five-year Capital Improvement Plan (CIP), created by Ulteig Engineers, Inc. (Ulteig),
provides an overview of the current state of REU ’s distribution system and provides a roadmap
that will assist REU in achieving its goal of providing safe and reliable power to its customers
while preparing the distribution system for future transportation and building electrification load
growth.
The Five-Year CIP is a subset of REU’s Distribution Modernization Program. The Distribution
Modernization Program is a ten-year integrated outlook factoring in wildfire mitigation and
system hardening, replacement of aging distribution assets (both overhead and underground),
efforts to increase system reliability by reducing system outage events and durations, and greater
situational awareness to increase visibility of outages providing reduced response time and
repair. These critical system improvements have been prioritized based on the strategic priorities
outlined in REU’s Five-Year Strategic Plan: maximize reliability, mitigate risk, and meet
regulations.
The entire Distribution Modernization Program, including cost estimates, workforce
assessments, schedule projections, available resources, and description of improvements, is
available for review by contacting REU.
Based upon Ulteig’s and REU staff’s workforce assessment, the current REU staffing level is
insufficient to complete the necessary improvements in the required timeline. However, REU
does not recommend filling this need solely from hiring new full-time staff to supplement a large
scale, short-term project uplift. Alternatively, REU is recommending four additional Line
personnel and the use of third-party contractor support to supplement existing REU crew
capabilities. Contracting the work will require coordination and cooperation with IBEW-
Electric.
As the resources needed to implement the Five-Year CIP and other Strategic Plan items,
including meeting increased regulations and mitigating risk, are addressed, REU will embark on
a process to review rates for future recommendations to the Council. This process will include
public outreach, a cost-of-service study, and a communication plan. REU will work with the City
of Redding Equity Officer to ensure outreach and communication is available and
understandable to all REU customers. This process will be targeted to begin in September and be
completed by the end of 2021.
Council Priority/City Manager Goals
Government of the 21st Century – “Be relevant and proactive to the opportunities and
challenges of today’s residents and workforce. Anticipate the future to make better
decisions today.”
Attachments
Resolution
REU's Five-Year Capital Improvement Plan (available online)
RESOLUTION NO. 2021-____
A RESOLUTION OF THE CITY OF REDDING APPROVING AND ADOPTING THE
6TH AMENDMENT TO CITY BUDGET RESOLUTION NO. 2021-078 APPROPRIATING
0 FOR THE CREATION OF FOUR ADDITIONAL LINE PERSONNEL POSITIONS
FOR REDDING ELECTRIC UTILITY FOR FISCAL YEAR 2021-22
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF REDDING
THAT Budget Resolution No. 2021-078 be and is hereby amended as follows:
FUND DIVISION DESCRIPTION INCREASE DECREASE
142 853 ELECTRIC $0
THAT account titles and numbers requiring adjustments by this Resolution are as follows:
PERSONNEL FY 2020-21
Lineman (Certification Rate) 4 FTE
THAT the purpose is to appropriate $0 for the creation of four additional line personnel positions for
Redding Electric Utility for fiscal year 2021-22.
I HEREBY CERTIFY that the foregoing resolution was introduced at a regular meeting of the
City Council of the City of Redding on the 17th day of August, 2021, and was duly adopted at
said meeting by the following vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
ERIN D. RESNER, Mayor
ATTEST: FORM APPROVAL:
PAMELA MIZE, City Clerk BARRY E. DeWALT, City Attorney
Confidential
5-Year Capital Improvement Plan
Last printed 8/4/2021
5-Year Capital Improvement Plan
Project Name: 5-Year Capital Improvement Plan
Ulteig Project Number: 20.02208
Department: Technical Services – Transmission and Distribution
Prepared For:
Document Owner(s) Project/Organization Role
Redding Electric Utility Municipal Utility
Ulteig Engineers, Inc.
3350 38th Avenue South
Fargo, North Dakota
701.280.8500
www.ulteig.com
Revision History
Revision Date Description
1 8/3/2021 100% Submittal
5-Year Capital Improvement Plan Redding Electric Utility
Confidential 2
TABLE OF CONTENTS
1 5-Year Capital Improvement Plan (CIP) ........................................................................... 3
1.1 Overview ............................................................................................................................... 3
1.2 5-Year CIP Results ................................................................................................................. 5
LIST OF TABLES
Table 1: 5-Year CIP - Project Cost and Duration Estimates ......................................................................... 5
Table 2: 5-Year CIP - Estimated Spend per Year ......................................................................................... 6
Table 3: 5-Year CIP - Estimated Project Execution Timeline ...................................................................... 7
Table 4: 5-Year CIP - Estimated Total Labor Hour Breakout ...................................................................... 8
Table 5: 5-Year CIP - Estimated Labor Breakout per Year .......................................................................... 9
Table 6: 5-Year CIP - Estimated Total Engineering Hour Breakout .......................................................... 10
Table 7: 5-Year CIP - Estimated Labor Breakout per Year ........................................................................ 11
5-Year Capital Improvement Plan Redding Electric Utility
Confidential 3
1 5-Year Capital Improvement Plan (CIP)
1.1 Overview
REU’s 5-year Strategic Plan sets the goals and the expectation of an electric grid which is
more reliable, resilient to natural disasters, and more flexible for the increased installation of
Distributed Energy Resources (DERs) and transportation and building electrification load
growth. However, through years of deferred maintenance, REU’s extensive infrastructure
continues to age and decreasing reliability statistics confirm this. This Capital Improvement
Plan outlines the necessary improvements over the next five years to address the highest
priority items identified. It is imperative that REU acts quickly to make these significant
infrastructure improvements outlined herein while working towards the goal of a more
modern grid and to meet the needs of continued electrification. With the immense workload
that will be required to accomplish this objective, ensuring these efforts commence promptly
will be vital to ensuring that our manpower is best utilized performing proactive
improvements rather than emergency repairs and power restorations.
The 5-Year Capital Improvement Plan was formed from an in-depth look at the first 5 years
of the Distribution Modernization Program (DMP), a separate document. Each project was
analyzed against the goals outlined in REU’s Strategic Plan using analytical scoring
techniques and priority projects were determined which could best be accomplished within
this 5-year period. This involved evaluating capital vs engineering only projects, assessing
the total number of hours anticipated to complete the work, determining the existing backlog
of existing work and projecting cost and labor that would be required for any new
construction projects. These construction labor hours were then evaluated against the historic
available construction labor hours within REU.
Table 1 shows that to initiate construction, a great deal of engineering design efforts will
need to take place. The total spending in the first year is lower than the remaining years for
this reason. As designs are prepared and construction ramps up, the capital spend is expected
to significantly increase in year 2 and beyond as can be seen in Table 2. Through multiple
prioritization discussions, the overall 5-year CIP schedule, Table 3, was developed to layout
the required timeline for the 5-Year CIP to accomplish the goals set forth in the DMP.
Historic records show that REU Line staff can only commit approximately 12,480 hours/year
to new Capital Improvement Projects over and above any day-to-day activities such as new
construction & emergency repairs. This approximation includes 2,080 hours for overtime
associated with these projects. When evaluating the total number of construction labor hours
required to complete the effort proposed within this plan, it is apparent that contract labor is
required to supplement REU staffing in order to meet the goals of this plan. Tables 4 & 5
below show a breakdown of the total projected hours required per year and the amount of
estimated internal labor hours. Additionally, this table illustrates the effect of REU hiring an
additional 4-person line crew within the first year of this plan.
Prior to initiating many of these improvement projects, an engineering evaluation of the
distribution system model as described in the DMP must be performed. This necessary
engineering effort will better identify system weaknesses, determine critical construction
project phasing, and develop improved construction standards. These estimated prerequisite
5-Year Capital Improvement Plan Redding Electric Utility
Confidential 4
engineering hours and dollars were then rolled into the associated capital projects as part of
their overall scope. The estimated values are listed in the tables below and the tables in the
DMP. In addition to the system evaluation, engineering design and construction services will
also be required prior to and during execution of each construction project. This engineering
services effort was estimated at 15% of the cost for each project. One exception to this
estimate is the Aging Asset – Underground Cable Replacements project where this service
was calculated at 7.5%. Current availability of REU engineering staff is limited to an
estimated 2,200 hours per year to work on these projects over and above day-to-day base
workload. As can be seen in Tables 6 & 7 below, the estimated engineering labor required to
complete this work is significantly greater than the hours available through current REU
staff.
5-Year Capital Improvement Plan Redding Electric Utility
Confidential 5
1.2 5-Year CIP Results
TASK NAME Total Cost 2022 2023 2024 2025 2026
Circuit Hardening $2,167,951 $694,500 $722,280 $751,171 - -
Install reclosers at T1 boundary $477,360 Design Only $234,000 $243,360 - -
Install switches at T1 boundary/Feeder
Reconfiguration to T1 only $226,481 Design Only $111,020 $115,461 - -
Transmission Hardening $844,081 Design Only Design Only $270,400 $281,216 $292,465
1-Phase Recloser Deployment $332,735 - - Design Only $163,105 $169,629
Aging Asset - Pole Replacements $10,332,645 $1,500,000 $2,080,000 $2,163,200 $2,249,728 $2,339,717
Switch Replacement Program $742,036 $137,000 $142,480 $148,179 $154,106 $160,271
Aging Asset - Underground Cable Replacements $29,497,935 $3,000,000 $6,240,000 $6,489,600 $6,749,184 $7,019,151
Strategic Undergrounding $3,610,896 Design Only $850,330 $884,343 $919,717 $956,506
Fiber Optic Backbone $4,773,600 Design Only $2,340,000 $2,433,600 - -
Substation Security $938,469 Design Only $221,000 $229,840 $239,034 $248,595
Faulted Circuit Indicator and Line Sensor
Deployment $402,558 $150,000 $104,000 $47,590 $49,494 $51,474
Line Capacity Upgrades/VVO $1,463,073 Design Only - $468,693 $487,441 $506,939
New Construction/Backlog (Labor Only) $7,670,022 $1,416,094 $1,472,738 $1,531,647 $1,592,913 $1,656,630
Facilities Field Verification $575,000 $575,000 - - - -
Engineering Design and Construction Services $7,395,881 $2,690,649 $854,839 $939,921 $1,426,702 $1,483,770
Total $71,450,723 $10,163,243 $15,372,686 $16,717,007 $14,312,640 $14,885,146
Table 1: 5-Year CIP - Project Cost and Duration Estimates
LEGEND
Fire Mitigation
Overhead
Underground
Substation
Operational Efficiency/Reliability
Other
5-Year Capital Improvement Plan Redding Electric Utility
Confidential 6
Table 2: 5-Year CIP - Estimated Spend per Year
10,163,243
15,372,686
16,717,007
14,312,640 $
14,885,146
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
2022 2023 2024 20252026SPENDING ($)
YEAR
Spending Per Year
5-Year Capital Improvement Plan Redding Electric Utility
Confidential 7
Table 3: 5-Year CIP - Estimated Project Execution Timeline
LEGEND
Fire Mitigation
Overhead
Underground
Substation
Operational Efficiency/Reliability
Other
5-Year Capital Improvement Plan Redding Electric Utility
Confidential 8
TASK NAME
Total
Individual
Labor Hours
2022 2023 2024 2025 2026
Circuit Hardening 5,840 1,947 1,947 1,947 - -
Install reclosers at T1 boundary 234 - 117 117 - -
Install switches at T1 boundary/Feeder
Reconfiguration to T1 only 540 - 270 270 - -
Transmission Hardening 4,750 - - 1,583 1,583 1,583
1-Phase Recloser Deployment 150 - - - 75 75
Aging Asset - Pole Replacements 30,750 4,855 6,474 6,474 6,474 6,474
Switch Replacement Program 4,275 855 855 855 855 855
Aging Asset - Underground Cable
Replacements 37,100 4,122 8,244 8,244 8,244 8,244
Strategic Undergrounding 12,600 - 3,150 3,150 3,150 3,150
Fiber Optic Backbone 10,800 - 5,400 5,400 - -
Substation Security 1,080 - 270 270 270 270
Faulted Circuit Indicator and Line Sensor
Deployment 750 295 196 86 86 86
Line Capacity Upgrades/VVO 4,388 - - 1,463 1,463 1,463
New Construction/Backlog (Labor Only) 51,902 10,380 10,380 10,380 10,380 10,380
Facilities Field Verification 2,475 2,475 - - - -
Engineering Design and Construction
Services - - - - - -
AVG per year 167,634 24,929 37,303 40,239 32,580 32,580
Table 4: 5-Year CIP - Estimated Total Labor Hour Breakout
5-Year Capital Improvement Plan Redding Electric Utility
Confidential 9
Table 5: 5-Year CIP - Estimated Labor Breakout per Year
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2022 2023 2024 2025 2026
Construction Labor Hour Breakout
REU Hours Available Additional Crew Hire Total Hours Req
5-Year Capital Improvement Plan Redding Electric Utility
Confidential 10
TASK NAME
Total
Engineering
Hours
2022 2023 2024 2025 2026
Circuit Hardening 450 225 225 - - -
Install reclosers at T1 boundary 160 80 80 - - -
Install switches at T1 boundary/Feeder
Reconfiguration to T1 only 420 210 210 - - -
Transmission Hardening 0 - - - - -
1-Phase Recloser Deployment 500 - - 500 - -
Aging Asset - Pole Replacements 0 - - - - -
Switch Replacement Program 0 - - - - -
Aging Asset - Underground Cable
Replacements 0 - - - - -
Strategic Undergrounding 0 - - - - -
Fiber Optic Backbone 0 - - - - -
Substation Security 225 100 125 - - -
Faulted Circuit Indicator and Line Sensor
Deployment 0 - - - - -
Line Capacity Upgrades/VVO 0 - - - - -
New Construction/Backlog (Labor Only) 0 - - - - -
Facilities Field Verification 0 - - - - -
Engineering Design and Construction
Services 36,979 13,453 4,274 4,700 7,134 7,419
Total 38,734 14,068 4,914 5,200 7,134 7,419
Table 6: 5-Year CIP - Estimated Total Engineering Hour Breakout
5-Year Capital Improvement Plan Redding Electric Utility
Confidential 11
Table 7: 5-Year CIP - Estimated Labor Breakout per Year
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2022 2023 2024 2025 2026
Engineering Hour Breakout
REU Eng Available Total Eng Hours Req
9.5(d) Five-Year Capital
Improvement Plan
Strategic Priorities
Risk
Reliability
Regulation
Customers Impacted by Outages
5,652 5,161 4,842 3,311 2,592 3,046
11,641
4,203
6,543
8,645
8,119 8,347 8,853 10,162
18,864
6,626
11,626
13,229
23,486 20,087
5,000
10,000
15,000
20,000
25,000
30,000
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
Customer
Count
Underground
Overhead
Total Customer Outage Minutes
488,559 552,440 676,921
411,425 332,211 506,776
1,427,111
379,065
994,762
766,621
578,203
768,391
1,029,456
811,560
1,613,489
660,337
1,002,635
823,580
1,890,865
1,740,887
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
Minutes
FY 19 excludes Carr Fire and Snow Storm outage minutes
Underground
Overhead
Reliability Trend –Number of Sustained Events
8
16
10
7
16
99
18
9
0
2
4
6
8
10
12
14
16
18
20
Equipment - Overhead Equipment - Underground Tree-Related
5 Year Average 3 Year Average 2020
Project Cost Estimates
Engineering hours included with other
Task Name
Total
Engineering
Hours
Total Labor
Hours Total Cost
Fire Mitigation 1030 11,364 $ 3,715,873
Overhead 500 35,175 $ 11,407,416
Underground 0*49,700 $ 33,108,831
Substation 225 11,880 $ 5,712,069
Operational Efficiency/Reliability 0*5,138 $ 1,865,631
Other 36,979 54,377 $ 15,640,903
Total 38,734 167,634 $ 71,450,723
Construction Labor Hours Breakout
Historic records show that
REU Line staff can only
commit approximately
12,480 hours/year
to new Capital
Improvement Projects
over and above any day-
to -day activities such as
new construction &
emergency repairs.
12,480 12,480 12,480 12,480 12,480
6,240 6,240 6,240 6,240 6,240
6,209
18,583
21,519
13,860 13,860
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2022 2023 2024 2025 2026
REU Hours Available Four Additional Line Personnel Contract Hours Required
23 23
20
22
20 19
17
6
4 4
3 1 3 4
0
5
10
15
20
25
30
6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020
Available Inspector Vacant
Decreasein Line Positions
Engineering Hours Breakout
Current availability of REU
engineering staff is limited
to an estimated 2,200
hours per year to work on
these projects over and
above day-to -day base
workload.
The estimated engineering
labor required to complete
this work is significantly
greater than the hours
available through current
REU staff.
1,100 1,100
2,200 2,200 2,200
12,353
3,814
3,000
4,934 5,219
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2022 2023 2024 2025 2026
REU Hours Available Total Engineering Hours Required
Rate Process
Revenue assumptions required to support the Plan were largely accounted
for in the 5-Year Financial Plan included in REU’s biennial budget adopted
by the Council on June 15, 2021.
Rates currently being designed for Council’s consideration this winter will
be:
o Based on an updated cost-of-service study
o Reviewed by a Director’s Committee
o Shared at public workshops
o Communicated to all customers via public outreach and education
including diversity, equity, and inclusion efforts)
Recommendations
Authorize the following relative to Redding Electric Utility:
1) Accept the Five-Year Capital Improvement Plan; and
2) Adopt Resolution approving and adopting the6thAmendment to the City
Budget Resolution No. 2021-078 authorizing the creation of four additional line
personnel positions for Redding Electric Utility.
Public Power Week –October 3 -9
Join us on Friday, October 8th
for REU’s 100 Years of Public
Power Celebration in Downtown
Redding from 4-7PM!
o Raffle prizes
o Demos
o High voltage safety trailer
o Free ice cream & drinks
o Bucket truck rides & more!
Thank You!