HomeMy WebLinkAbout _ 9.5(b)--Update REU's 2026 Strategic PlanC IT Y OF
REMDINO�"
AN CITY OF REDDING
REPORT TO THE CITY COUNCIL
MEETING DATE: December 19, 2023
FROM: Nick Zettel, Director of
ITEM NO. 9.5(b)
Redding Electric Utility
***APPROVED
BY***
v ,
6,pp4in,
c , ctc, hecto of c iris tricUtility.....: iZ,'(i;'?(���
7i pan i'"
nzettel@cityofredding.org
btippin@cityofredding.org
SUBJECT: 9.5(b) --Oral Report on Redding Electric Utility's 2026 Strategic Plan.
Recommendation
Accept the Electric Director's oral presentation providing a progress update on the City of
Redding Electric Utility's 2026 Strategic Plan.
Background/Analysis
On August 17, 2021, the Council approved City of Redding Electric Utility's (REU) 2021-2026
Strategic Plan. Since its adoption, REU staff has made significant progress on many strategic
goals. This update provides a progress report on the strategic goals, identifies the strategic
planning focus for 2024, and provides updated key performance indicators measuring the success
of our strategic priorities.
Attachments
Previous Staff Report - Item No. 9.5(c) --Consider Redding Electric Utility's 2026 Strategic Plan
I TY O
' F 0 R N ' AVCITY OF REDDING
REPORT TO THE CITY COUNCIL
MEETING DATE: August 17, 2021
FROM: Daniel Beans, Director of
ITEM NO. 9.5(c)
Electric Utility
***APPROVED
BY***
D x recti r til Electric Lily �8,4/�2r
spin, Ci n c810/2,i?21
dbeans@cityofredding.org 11
btippin@cityofredding.org
SUBJECT: 9.5(c) --Consider Redding Electric Utility's 2026 Strategic Plan.
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.
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)
In 2021, Redding BeC[[ic Utility /RE[1\ celebrates 10() years of service. RE[] takes
g[f,8f pride in helping to make the City (]fRedding and Shasta County great place
to live, VVO[k and play. Today, we CODfiDUe[O provide reliable and affordable electric
set -vice to the [BBideOfS arid bU8�OesseS Of Redding, while d(--�-VelOpiOg the flexibility
and innovation fOrespond fDthe changing utility marketplace. Weremain committed
to providing 8[FOO(J ValUe to the Red{JiDg CCJ[OOlUUifVfB[ into the fUfU[e.
Redding and Shasta County powered
onthrough the Carr Fire of2018and
5nowmaggedonm2019.The year 2020
represented another challenge for the electric
utility industry. The COV|D49pandemic
proved tobedevastating unour community and
nation ascitizens struggled toremain healthy
and employed. Electric reliability suffered |n
many parts ofthe nation asnatural disasters
damaged equipment and disrupted lives.
Our employees worked together, asfront-
line respondeo.tokeopthepoweronwh||e
keeping themselves and our customers safe
through our public safety efforts.
Aswelook ahead, wemust continue m
think and act strategically, addressing
changes |ntechnology, customer
expectations, regulations and the climate,
especially related towildfires. We must
continue mbeproactive and adapt quickly
mthe changes impacting the electric
utility industry tobest serve the Redding
community for the next 100years. Change
|saconstant mthe electric utility industry,
and weare determined mact maway
that best serves our customers and the
community far into the future. Asalocal,
pub||dyownedutU|ty, weare invested m
the success ofRedding.
REUcompleted its previous strategic plan
mzM5.Atthat time, the organization
embarked onastructural overhaul to
better align the workforce with our
customer needs, and the strategic plan
helped usfocus nn several critical aeas,
including technology, workforce and
culture, communications and financial
$abUuy. Toaddress today's fast pace
o|change tothe utility industry, we
engaged manew strategic planning
effort. Staff worked closely, fec*-to-
facewhen possible, and virtually when
CDv|D19restrictions reduced our ability
»omeet mperson, Several meetings were
conducted with City ofRedding Council
members, city staff and community
stakeholders toupdate REU'sstrategic
plan and chart ocourse for the future,
The strategic planning team examined
our strengths and Um|tot|ons, confirming
the utility's mission and priorities that will
serve asguideposts for long-term project
development and planning.
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:
PEU rr,okes Reg ding bett(}r by c ren,+nn, ting
with ourcosmroe,is E7P3d being t(`tnH trusted
o;,a r !C J, r', con rt,mctrn;tly-nvvnn<; t.rtll?ty
The mission statement, which describes
what we will do to achieve that vision reads:
Rt LI,, iii portnr ,t,sr` .ip with Vm) he G/df'/g
Polito nitty, is {.`e+'rmmtted tt'',' 3111J Fo-vil? CQ the
publics s ate ty Ci'f7C:, rrt t. idi nC( pli 7ble cost -
e fec:t,ive 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.
The world has changed greatly since RE[1began distributing electricity tothe people of
Redding 1[){}years ago. The Utility, too, has seen significant change frC)O0fhe days when
it pUrchased all of its wholesale power from area investor-owned utilities.
Over the decades, weestablished greater
control over our power supply, contracting
with the federal government for low cost
hydroelectric power, partnering with other
agencies toaccess significant economies
nfscale and building our own generation
facilities. These forward-looking steps by
past city and utility leaders ensured greater
reliability, rate stability and pred|ctab||uy
fsaresult, Redd|ng'slights remain on, bills
remain manageable and its owners' best
interests are being supported.
And who are those owners? No, nisnot Wall
Street investment firms, hedge funds and
other shareholders. K|syou, the customers
nfthe utility and the citizens ofRedding. As
apublic power utility, rather than aninvestor-
owned ut||u8ourowneoaeourcuuomen.
This means decision-making onissues
important toyou, such mrates, power supply,
reliability and customer service, are made
locally. The utility's governing board |sthe
Redding City Council, which embraces the
critical role that the utility plays mserving the
REUemploys 1g3people, who serve
v4.905residential and commercial
customers within the corporate boundnes
of the City ofRedding. Reddmg's
population and economy have remained
remarkably stable for many years. Most of
this century has seen modest growth m
population, lagging behind both California
and the U.S.population growth rates. Yet,
interest mShasta County's vast natural
resources continues todrive strong tourism
aswell asnew residents, citing the area's
natural beauty asa draw.
The regional economic outlook isgood,
having recovered fairly quickly from the
pandemic -fueled downturn. The local
industry |sdiversified, with the largest
employment sectors being healthcare, retail,
education, food, lodging and government.
Redding |swell-positioned toremain
economically vibrant |nthe years ahead.
The utility must continue toadapt to
changes mour natural environment, new
state and federal regulations, technology
advancements and evolving customer
For example, the wildfire "seamm^isnearly
uyeammnd issue now. We recognize the
important role wemust play mplanning for and
responding tofires that may impact our service
territory. |n2021.technology and human
resources |nthe Redding Fire Department
and Parks Division have been provided
extraordinary tools tobattle the wildfires
that continue toimpact California. Astate-
ofthe*ueme»A*ncyopeoVnnsoemerwas
established atour headquarters building
toallow first responders and leaders within
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 first
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.
These technologies improve operations,
reliability, safety and customer service.
By providing funding for firefighters and
vegetation management personnel, we
have been able to carefully identify and
mitigate potential fire 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 wildfires
pose to our beautiful area.
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 significant capital
maintenance and upgrades are needed in
order for us to continue providing reliable
and cost-effective power to the Redding
community.
• We employ skilled and professional staff,
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
diversified 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
completed in a timely and cost-effective
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.
Central to Redding Electric Utility's planning for the future is enSUring all effol,ts sign with
its endUring lmssion, vision, acid ValU s,
Our vision statement is an effort to describe
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:
r;LU muko s ,rye fklinq betterby c n norc,if.cr
with ou "tu` tom'p rs uno'beinc thnir thJvted
frnd r0iobhe, rear mlrrr,it�r <9w�ts., ._rtii,�ty
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.
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:
,, in pfrtfmrs!rip nth the xer,lE. inn
!cC?ii7rlrunit%, :s c or"7mnod to hnp rvinP
public's sofety>> of Id c>ro iding rr fluble,
cusl Fr clhvt C r1 ico.
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 wildfire prevention
and response efforts. For our residential
and business customers, REU must deliver
cost-effective utility services, while continu-
ally exploring ways to improve all aspects
of our operations.
The vision and mission describe what we do
morder msupport the Redding community.
But how will the utility act msxfulfills these
priorities? Establishing our core values |so
key part nrdefining who weare, how wewill
serve our customers and how wewill treat
each other. These are expectations we have
nfourselves, and towhich wewill hold each
other accountable. Below are outlined six
core values with corresponding behaviors
and actions.
Safety
^wepromote ownership and accountability
for safety within the department
^ Wehave onuncompromising commitment
for the public and employees' safety
^
Through our safety committee, programs,
activities and other initiatives, wopromote
aculture ofsafety
^ Wepromote public safety through
ongoing education, training, awareness
and compliance
^ Wesupport anenvironment |nwhich the
public can beserved safely
Integrity
^ Weare accountable, ethical, honest, and
transparent in everything wedo
^ Wewill protect and maintain the goodwill
and trust our community has placed mun
^ Weare loyal ,othe public interest and
fairness tnall ratepayers
Custorner Focus
~ REUemployees consider the customer
first mevery decision wemake sothat we
consistently exceed customer expectations
^ welisten to, anticipate and proactively
serve customer wants and needs
~ We focus ondelivering what |»most
beneficial toour internal and external
customers
~
Customers and their safety and
satisfaction are our highest priority
Teamwork
^ Our team consists ofemployees n[the
Electric Utility, the City, the Redding
community and Joint Powers Agencies
` Wedemonstrate the principles ofHungry,
Humble and Smart asexplained bythe
best-selling author Patrick L*nc|on||n his
book The Ideal Team Player
^ Weare acohesive unit that exists solely
for the benefit n[the community weserve
^ Webelieve Teamwork /nvital for success
^ Wefeel, act and behave moone big team
Open Communication
^ 8yactively listening unthe needs o[the
community, weprovide timely responses,
create understanding ofother's
perspectives and show w*care
~
Through transparent communication,
wekeep all stakeholders informed,
avoid unnecessary surprises and reduce
confusion
~ Weare committed tnaction and follow up
when necessary, tohelp provide closure
for our stakeholders
Stewardship
` Westrive ,nrepresent and incorporate the
values and needs o[the community mthe
management of the utility
^Wefocus onmaximizing value for all
customers over the long term
~ Wemanage our physical assets to
maximize safety and reliability atthe
lowest possible cost
~ Weoffer programs and education tohelp
our customers save money and/or reduce
their impacts onthe environment
~ Wecontinuously decrease our impacts on
the environment while striving /omaintain
Three strategic priorities have been identified as points of emphasis in out, strategic
planning process."'Ib take advantage Of OLK organizational strengths and to address
opportunities for growth and improve Tient, the following strategic priorities serve as
the framework for OUr strategic plan.
Below are OUr initial goals that will be criti
GOAL 4
Implement Distribution Risk Upon completion of our moema| Operational n|sx Assessment we discovered several
Management Plan opportunities to improve our internal working systems to minimize risk from organization
stmctures, inventory and workflow management techniques. In tandem with replacing
Taging equipment and installing new technologies to modernize the system, several projectsprojects5��TsG|CpmO�mB
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 gaffing changes to reflect more streamlined operations team.
GOAL 5
Complete Energy Trading
Our recent overhaul of the Energy Risk Management Policy requires detailed processes to
Modernization and Integrated
ensure all policy requirements are achieved. To align the policy with day-to-day staff duties,
Resource Plans
a set orbusiness rules will be developed /o identify modeling and analytical methods used
to provide energy trading and hedging recommendations to the Energy Risk and Risk
ew|Ucenter
d|cau/�omth|spr��
Oversight Committees. performance �
5r��Ts�|CpmO�ms3
to keep our energy portfolio metrics in compliance with the Energy Risk Po||o/ Separately,
updated Integrated Resource Plans will be needed u`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 effons, additional renewable
energy resources will be required to maintain compliance with the State's Renewable Portfolio
Standard requirements.
GOAL 6
Minimize Compliance Failures As part of our woux American Electric Reliability Corporation registration as a Transmission
and Penalties Owner and Operator, we are continually striving to develop a culture of compliance with a
particular focus on regulatory best practices. To supporta culture of compliance and the
n/_1TsG|CPmOmTdeve|opmemofbe�pm�|ces. a Regulatory Compliance Internal Controls project will be
5�|sS
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 uyadding additional layers mprotection from sabotage o,ureamns.
AE T
Align Revenue Collection with Aligning revenues with the cost of providing electric service is imperative to mitigate risks.
Cost -Of -Service 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
ST" /ATFUiC'i�;of service. To garner support for the rate structure recommendation, a second project will
i-� `
ensure significant outreach and community engagement to gather comments, provide
education and develop consensus.
AL,
Enhance Communication with
Our Customer Focus Core Value is intended on meeting the needs of our customers and
Customers and the Community
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.
GOAT.
Enhance Employee Development, Because we value our employees, REU identified several employee training and procedure
Attraction and etenti n 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
MEMEMEMEMEM plan successfully.
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
Ori an advisory tears of stakeholders from within the ity and the C OnnnnUnity for their
perspectives. We thank all Of YOU for your commitment and diligence.
Chuck Aukland Nate Fairchild Kristen Schreder
Public Works Director Director of Science and Charter City Council
School Administration
Steve Bade Jake Mangas Chad Scott
Deputy City Manager President & CEO, Chamber CEO of the Builder's
of Commerce Exchange
Tim Danielson Mark Mezzano Jerrod Vala ndingham
Salvation Army Captain City Council Fire Chief