HomeMy WebLinkAbout2017-05-03 Utilities Advisory Commission Agenda Packet
NOTICE IS POSTED IN ACCORDANCE WITH GOVERNMENT CODE SECTION 54954.2(a) OR 54956
I. ROLL CALL
II. ORAL COMMUNICATIONS
Members of the public are invited to address the Commission on any subject not on the agenda. A reasonable
time restriction may be imposed at the discretion of the Chair. State law generally precludes the UAC from
discussing or acting upon any topic initially presented during oral communication.
III. APPROVAL OF THE MINUTES
Approval of the Minutes of the Utilities Advisory Commission Meeting held on April 5, 2017
IV. AGENDA REVIEW AND REVISIONS
V. REPORTS FROM COMMISSIONER MEETINGS/EVENTS
VI. DIRECTOR OF UTILITIES REPORT
VII. COMMISSIONER COMMENTS
VIII. UNFINISHED BUSINESS
None
IX. NEW BUSINESS
1. Staff Recommendation that the Utilities Advisory Commission Recommend that Action
the City Council Adopt the Proposed Operating and Capital Budgets for the
Utilities Department for Fiscal Year 2018
2. Staff Recommendation that the Utilities Advisory Commission Recommend that the City Action
Council Decline to Set an Energy Storage System Target Due to Lack of Cost-effective Options
3. Discussion of Smart Grid Assessment and Development of Utility Technology Road Discussion
Map and Implementation Plan
4. 2017 Utilities Strategic Plan Progress Report Discussion
5. Joint Study Session between the Council and the Utilities Advisory Commission Discussion
6. Selection of Potential Topic(s) for Discussion at Future UAC Meeting Action
NEXT SCHEDULED MEETING: June 7, 2017
ADDITIONAL INFORMATION
The materials below are provided for informational purposes, not for action or discussion during UAC Meetings (Govt.
Code Section 54954.2(a)(2)).
Informational Report Public Letters to the UAC
UTILITIES ADVISORY COMMISSION - SPECIAL MEETING
WEDNESDAY, MAY 3, 2017 – 12:00 P.M.
COUNCIL CHAMBERS
Palo Alto City Hall – 250 Hamilton Avenue
Chairman: James F. Cook Vice Chair: Michael Danaher Commissioners: Arne Ballantine, Lisa Forssell, A. C. Johnston, Judith Schwartz and Terry Trumbull Council Liaison: Eric Filseth
Utilities Advisory Commission Minutes Approved on: Page 1 of 16
UTILITIES ADVISORY COMMISSION MEETING
MINUTES OF APRIL 5, 2017 MEETING
CALL TO ORDER
Chair Cook called to order at 7:05 p.m. the meeting of the Utilities Advisory Commission (UAC).
Present: Vice Chair Danaher, Commissioners Ballantine, Johnston, Schwartz, and Councilmember
Filseth
Absent: Commissioners Forssell and Trumbull
ORAL COMMUNICATIONS
None.
APPROVAL OF THE MINUTES
Commissioner Schwartz noted three corrections. She said that on page five, she stated that heat
pump water heaters were “loud,” not “load.” On page seven, she clarified that while she had
suggested that the City look into the program Google was working on to have driverless cars
detect methane leaks, she had not made any assumptions about whether the program would be
good for the City to pursue or not. Lastly, on page ten, she had not stated there was a lot of
geothermal energy development potential to be developed, but rather that they needed off-takers
at the Salton Sea.
Commissioner Johnston moved to approve the minutes from the March 1, 2017 UAC meeting.
Commissioner Danaher seconded the motion. The motion carried unanimously (5-0, with
Chair Cook, Vice Chair Danaher and Commissioners Ballantine, Johnston, and Schwartz voting yes
and Commissioners Forssell and Trumbull absent).
AGENDA REVIEW AND REVISIONS
None.
REPORTS FROM COMMISSION MEETINGS/EVENTS
Commissioner Schwartz said she attended the Energy Times Renewables Rush conference in San
Francisco, which had great speakers. A few spoke about topics germane to the discussion
happening at this meeting. John Woolard, the former CEO of Bright Energy spoke about how
maximizing renewable energy will not necessarily reduce carbon if not considering how the source
generation matches to the load. Other speakers discussed a report from the California
Independent System Operator (CAISO) on how renewables were being significantly curtailed at
certain times of day due to excess generation.
DRAFT
Utilities Advisory Commission Minutes Approved on: Page 2 of 16
Commissioner Schwartz also discussed presenting at a meeting of the Utility Customer Research
Consortium (UCRC), a consortium of utilities. She had collected research done on different
customer metrics including net promoter score, CSAT (customer satisfaction), and customer effort
score, metrics used in different industries to determine how customers react to different kinds of
programs and what companies are doing. Her research project was to look at other industries. She
noticed that in the telecom industry, they have very low scores compared to other industries. It
was relevant to the night’s discussion regarding fiber. She said it was worth asking why that was.
The scores were likely low because something about that industry was hard. This was something
to take into consideration before doing anything with fiber . She was seeing that utilities doing the
most advanced market research were using these metrics.
UTILITIES GENERAL MANAGER REPORT
Assistant Director of Utilities Resource Management Jonathan Abendschein delivered the General
Manager’s Report:
Communications
Last week, President Trump signed an Executive Order calling for a revision of the Clean Power
Plan. This Executive Order introduces uncertainty into the markets for renewable energy and
electric vehicles, from the future of federal tax credits to Californ ia’s ability to maintain its own
higher emissions standards to opportunities for expanded energy markets. This could translate
to changes, either up or down, in our energy portfolio costs and energy sales. It’s important to
note that regulatory changes will take months – if not years – and will develop through a public
process. Utilities Department staff will continue to monitor federal activity, participating when
appropriate to further the City’s priorities.
At the March 6 City Council meeting, Mayor Greg Scharff recognized two businesses with the
Mayor’s Green Business Leader Award. Hudson Pacific Properties and Stanford Real Estate, the
latter of which is managed by Hines property management, oversee a total of eleven buildings
in Palo Alto. The businesses qualified for the award due to their leadership in energy efficient
building management, benchmarking their building energy use through the EPA’s Portfolio
Manager and receiving an ENERGY STAR certification.
CPAU has begun the process of updating the Utilities Strategic Plan, with next steps to bring on
consultant resources and compile an inventory of the major policy direction and regulations
that set our organizational priorities. The Request for Proposals submittal period closed last
week. Consultant interviews are scheduled for the week of April 17. We will agendize the item
for further Utilities Advisory Commission discussion next month and as a standing item
through completion, recognizing that input from the City Council, UAC, staff, and members of
the public, are all important factors as we evaluate the long-term vision and near-term
activities of our Utility.
Staff is developing a comprehensive communication strategy for the fiscal year 2018 rate
adjustment proposals. Commissioners and members of the public will have opportunities for
input to financial plans and rate adjustment proposals at regularly scheduled UAC, Finance and
Council meetings, as well as through outreach materials including handouts, bill inserts, and
website information. CPAU will use a variety of communication methods to reach all
stakeholders in the community.
On April 17, 2017, the Office of Sustainability will deliver the City of Palo Alto's s annual Earth
Day Report detailing efforts on sustainability over the past year . Highlights for the Utilities
Utilities Advisory Commission Minutes Approved on: Page 3 of 16
Department include energy efficiency that exceeded City goals, the fact that the City’s
contracted renewables came fully online, meaning the City’s Carbon Neutral Portfolio is now
being implemented using only carbon free hydroelectric power and RPS-eligible renewables,
excellent achievements in decreasing per-capita water consumption, and the approval of the
Carbon Neutral Gas Plan. This year’s report will also include a draft of the City’s Sustainability
and Climate Action Plan Implementation Plan, focusing on key actions in various areas of
sustainability. Some of these implementation plan sections will be discussed tonight, seeing ad
we will distribute the entire plan to the Commission when released with the council agenda. .
Resource Management
Staff continues its work identifying sites for a community solar program, which is a central
element of the Local Solar Plan approved by Council in April 2014. Of the sites reviewed by the
City, a carport PV project at the Palo Alto golf course parking lot appears to be the most
promising project for the first community solar pilot site. Because the golf course is dedicated
parkland, staff has begun getting feedback on site feasibility from the Parks and Recreation
Department and is meeting with the Parks & Recs Commission on April 25th before proceeding
too far with site evaluation. Preliminary Utilities staff review suggests that such a solar project
could be compatible with the existing park use and could be consistent with the Ba ylands
Master Plan, but Utilities staff is seeking wider feedback. Staff is planning to come to the UAC
in June with design principles for a Community Solar Program for consideration and approval,
including lessons learned the City’s prior attempt at start ing a community solar program.
Upcoming Events & Workshops
Please join us on Saturday, April 22 at the Baylands for the Great Race for Saving Water 5K fun
run and walk and family-friendly Earth Day Festival! The celebration will include musical
entertainment, bird walk and bike tours between the Baylands and Cooley Landing, electric
vehicle test drives, animals from the Palo Alto Junior Museum and Zoo, arts and crafts, games
and raffle prizes, Smokey the Bear, food and fun for the whole family! City repr esentatives,
environmental organizations, non-profits, businesses, school and community members are
coming together for an exciting day with activities that are sure to please everyone! Details
and registration are available at www.cityofpaloalto.org/EarthDay
Utilities is hosting a workshop about native plant gardening on Saturday, April 29. Attendees
will learn how to maintain a landscape with climate -appropriate and water-conserving
plants. Lecture topics include care and maintenance of native and drought -tolerant plants, soil
health, and irrigation devices. Details and registration are at
www.cityofpaloalto.org/workshops
COMMISSIONER COMMENTS
None.
UNFINISHED BUSINESS
None.
NEW BUSINESS
ITEM 1: DISCUSSION: Discussion of Three Utility-Related Sustainability/Climate Action Plan
Implementation Plan Components: Mobility, Efficiency and Electrification, and Water
Management
Utilities Advisory Commission Minutes Approved on: Page 4 of 16
Jonathan Abendschein, Assistant Director of Utilities Resource Management said staff was seeking
Utilities Advisory Commission (UAC) feedback on portions of the Sustainability and Climate Action
Plan (S/CAP) Implementation Plan (SIP) that contained sections relevant to the Utilities
Department (Mobility, Energy, and Water). The full S/CAP SIP would go to City Council on April 17.
The S/CAP was a plan adopted the previous year with a framework and high level long term goals,
including a goal to reduce carbon by 80% from 1990 levels by 2030. The SIP listed the key actions
to be implemented over the next three years to get started meeting those goals. Many of the
items in the SIP for the Utilities Department reflect existing policy direction from the City Council.
However, staff wanted to get feedback from the UAC on these SIP key actions as well as to hear
any feedback on what staff should consider while moving forward on the S/CAP.
Chief Sustainability Officer Gil Friend summarized the staff work and community outreach on the
S/CAP. On April 18, 2016 the Council had adopted the carbon goal previously described. By that
time, the City had already achieved significant reductions in carbon emissions. Staff returned in
November with a framework providing some high level sustainability goals, which was adopted
unanimously. Several departmental teams then began meeting to develop the SIP, a three year
implementation program. It was a cross-departmental effort involving many people across the
organization. It brought the City’s many sustainability efforts into one so the governing bodies
could see them in one place. There were some areas that would require more research. The two
major areas of carbon emissions were natural gas use in buildings and gasoline use in
transportation. Because of this, the Utilities Department was pivotal. The next step after the SIP
would be to implement these ideas and embed these goals into the daily operations of the City.
Abendschein stated that the Mobility section was focused on both transportation demand
management and electric vehicles, but only the electric vehicle key actions were included tonight
because the actions related to transportation demand management were primarily relevant to
planning and transportation policy rather than utility policy. The focus of the Energy section was
primarily building efficiency and electric vehicles. While building electrification was included, the
focus of the department in those areas over the next three years would be on voluntary programs,
reducing market barriers, and contractor education. This was in line with previous discuss ions with
the UAC. In the Water SIP, there were items related to both storm water (which were less relevant
to utility operations) and topics related to water supply and demand. Comments and discussion
from the UAC tonight would be transmitted to the City Council for its April 17, 2017 meeting. No
action was requested.
Commissioner Ballantine said that it was good that Palo Alto was introducing efficiencies into its
interconnection processes (Rule 27) by aligning it with Rule 21, used by investor-owned utilities
statewide. It provided the opportunity to look at resiliency benefits in addition to carbon reduction
benefits. This could be something worth highlighting.
Commissioner Schwartz asked whether the UAC’s colleague’s memo would be included as part of
the Council packet.
Abendschein said he was not sure he could get it included. He would follow up with the General
Manager on the possibility. He said an informational report to Council on the colleague’s memo
discussion was planned, but he was not sure he would be able to get it on the April 17, 2017
agenda. The minutes from the night’s meeting would be included.
Utilities Advisory Commission Minutes Approved on: Page 5 of 16
Commissioner Schwartz said it was important for Council to see the memo. There was no point to
the UAC having a discussion if it was not provided to the Council at the appropriate time. The
minutes would not adequately reflect the UAC’s concerns. She believed the Council was operating
under faulty assumptions about the City’s electric portfolio.
Commissioner Danaher asked whether there would be an opportunity to further review the topics
raised in the memo as a Commission.
Abendschein asked Commissioner Schwartz to confirm that the key concern of the UAC was that
discussion regarding the carbon content of the City’s electric portfolio was clearly understood by
the city council.
Commissioner Schwartz pointed out that the Council Colleague’s Memo from previous years had
been used as background in the staff report. She was concerned Council might rely on the Council
Colleague’s Memo, but not the UAC Colleague’s Memo.
Commissioner Danaher said he thought he recalled that heat pumps were not as effective at
reducing carbon.
Commissioner Schwartz said it was important to understan d that the load changes related to
electrification often came at times when renewables were not generating. That energy would
come from gas plants, increasing carbon emissions. Council would be making a decision based on a
premise that was not accurate. It was also important to reflect the memo’s assertion that electric
vehicles were a better place to focus the City’s efforts. There was high adoption in Palo Alto and
the benefit to the environment was very clear.
Abendschein said those concerns had been reflected in the implementation plan. The primary
focus in the SIP over the next three years was on building efficiency and vehicle electrification,
with voluntary building electrification efforts focused more on reducing barriers. The follow-up
discussion about the carbon content of the electric portfolio was planned to take place as part of
the integrated resource plan discussion later in the year with the UAC.
Commissioner Ballantine said that proper time of use was important, both for vehicle charging and
electric heating. There were “blind spots” in the City’s generating portfolio where there were not
renewable energy sources directly matched with load, and matching loads to times when
renewable energy sources were generating was important. This was an important part of the
March UAC discussion and an important element to share with Council.
Commissioner Schwartz said the issue of matching load and generation was something that was
talked about at a conference she attended. The City was not the only utility dealing with this issue.
Renewable energy credits (RECs) would not solve that long -term issue. It does not solve the
problem of carbon impact. The City of Palo Alto could do better . She had seen a memo from CPUC
Commissioner McAllister that had highlighted how incredibly challenging it was to achieve the
very low carbon levels envisioned by the State’s long-term goals.
Abendschein said it could be helpful to have a Commissioner speak at the upcoming S/CAP Council
meeting.
Utilities Advisory Commission Minutes Approved on: Page 6 of 16
Friend mentioned there was a joint Council and UAC study session coming up in the spring. It
might be an opportunity to discuss these issues. It might be difficult to get into these issues on
April 17, 2017.
Commissioner Danaher agreed. These were important topics and important to explore.
Friend said the City had been making regular progress on its carbon goals. In the coming years the
goal was to take that progress and improve on it. This was an emergent process. The SIP did not
have a complete road map laid out over the thirteen or fourteen year time span. It would require
revision and recalibration of the process over time.
Commissioner Danaher asked about the goal of completing a study of smart meters by 2019. It
didn’t seem very ambitious.
Abendschein said the goal was to complete an update on the costs and benefits of smart grid by
the end of this year. That was the first phase. At that point, staff would be looking for a decision
from Council on whether to proceed. The 2019 goal included a more detailed assessment
assuming direction to proceed from Council.
Commissioner Schwartz emphasized it should not take two years to complete a cost benefit
assessment.
Abendschein confirmed there were two phases to be completed by 2019. The first phase, the
cost/benefit assessment, would be completed by the end of the year. The next stage would be a
study of what would be required to actually implement a smart grid rollout. It would have to be
coordinated with other projects, such as the replacement of the Enterprise Resource Planning
(ERP) software and Customer Information System (CIS).
Commissioner Danaher said the Mobility section should include a discussion of electric bikes .
Friend said the Mobility section given to the UAC only had electric vehicle key actions. There were
a number of key actions related to bicycles in the full Mobility section. Electric bikes and scooters
were an important part of solving the “last mile” issue associated with transit.
Commissioner Danaher said he assumed e-bikes did not require changes to the electric system
since they used standard outlets. He also said high density had higher energy efficiency, and he
thought is worth questioning what role high density housing had in Palo Alto’s plans over the next
fifteen years. Lastly, he said it would be worthwhile to set up a way to crowd source ideas from
public on sustainability topics. Traffic management could be an important part of these efforts as
well. He thought the plan overall was a good one.
Commissioner Johnston was glad the time of use issue was being discussed. He asked about the
key action to consider a non-potable water reuse ordinance modeled on the San Francisco
ordinance. He understood it was only required for buildings over 250,000 square feet. That was a
very large building for Palo Alto.
Abendschein said this key action required a lot of exploration. There was work being done to
develop a model ordinance that would work for cities of different sizes.
Utilities Advisory Commission Minutes Approved on: Page 7 of 16
Commissioner Johnston said he encouraged this type of effort.
Friend said there was work being done at the County level to develop a model that cities can use.
San Francisco instituted regulations that worked for the size and type of building stock in their
area. Palo Alto would have to create regulations that worked for its own particular circumstances.
Chair Cook asked what the goal was for emissions reductions from buildings by 2030 in the S/CAP.
Friend said he did not have that information with him . He said the S/CAP had specific analysis, but
he would have to return with it.
Chair Cook said building energy use was a big part of the carbon emissions in the City.
Abendschein said transportation represented about two thirds of the emissions, building energy
use about one third. A lot of the reductions related to buildings came from efficiency.
Friend said the specific goals were listed in the S/CAP document. However, these goals and
emissions numbers were estimates. The goals were not precise targets, and the City could shift
direction as needed.
Chair Cook acknowledged building energy use was an important part of the goals and that the
goals could shift over time. He noted that time of use and the source of energy was important. He
asked what the difference in the SIP was between goals, strategies, and key actions.
Friend said they were hierarchical. Goals were very high level, strategies were approaches used to
achieve those goals, and key actions were more detailed efforts to be undertaken, so there was
increasing detail as one moved down the hierarchy.
Chair Cook said the goals had some specific language about reduction of natural gas use and the
use of offsets for some of the emissions. He thought that would be important, it was just a
question of when those efforts were undertaken, whether they wer e voluntary, and what the
most efficient approach was. He thought the issue of time of use and time of energy delivery was
important to address in the SIP.
Abendschein said he was hearing from the entire UAC that one of the most important thing to
reflect was that the time of use and time of delivery had to be addressed when looking at
electrification. It may be that something needed to be added related to looking at load matching
to renewables.
Commissioner Schwartz recommended using terminology other than “time of use” when referring
to the issue, since it was a term of art with a specific meaning. She asked if it was really that hard
to get the Colleague’s Memo to the Council on April 17, 2017 .
Abendschein said he would look into getting that done given the short timeline for the packet to
get everything out to the public.
ACTION: No Action.
Utilities Advisory Commission Minutes Approved on: Page 8 of 16
ITEM 2: ACTION: Utilities Advisory Commission Recommendation that Council Approve a
Recommendations Concerning: (1) Future Plans for Fiber and Broadband Expansion; and (2)
Expansion; and (2) Expand Wi-Fi to Unserved City Facilities; and Discontinue Consideration of City-
Provided Wi-Fi in Commercial Areas
Strategic Business Manager Dave Yuan gave an overview of past Fiber-to-the-Premises (FTTP)
efforts to build a municipally owned network including multiple studies and issuance of various
request for proposals (RFPs) and request for information (RFI). In the last couple years, under
advisement from Council, UAC, City Manager’s Office, and Citizen Advisory Committee (CAC),
we’ve pursed numerous FTTP initiatives such as the master plan, Google Fiber effort, co -build
discussions with Google and AT&T, and RFI issuance for a public -private partnership. We have
gathered a lot of valuable information through thes e endeavors. We’ve come to a point where
we’re asking UAC and Council to provide us direction on where we should focus our efforts
towards in the next year or so. We present you with three options and we would like the UAC to
recommend one of these options to Policy & Services Committee (P&S) and Council.
Option 1 – Explore funding models to finance a municipal FTTP network with an estimated cost of
$77.6M.
Option 2 – Pursue a design a fiber-to-the-node network with an estimated cost of $12M; in
addition, explore different funds models to finance the “last mile” build.
Option 3 – Discontinue pursuing FTTP thus pausing municipal FTTP efforts, redirect resources to
streamline 3rd party upgrades and allow the market to play out.
Chief Information Officer Jonathan Reichental spoke about the future of wireless services, stating
that most industries will be using wireless for most applications in the future. One of five U.S.
households are now mobile only access to internet. The number of households with mobi le only
access is increasing rapidly. It doubled in the last two years from one in ten households in 2013. He
discussed the coming Fifth generation (5G) standard, which is intended to be a connection fast
enough to replace fixed connections such as cable. 5G specifications is not complete but
anticipate it will move to mainstream around 2020. There’s a lot of experimentation happening
today with 5G. It will be far faster than 4G LTE, a minimum of 20 Gigabits for download and 10
Gigabits for upload, and is far faster than physical connections. 5G will be about 2000x faster than
4G and average U.S. broadband will be 400x faster. Google had stopped its fiber rollout to focus
on wireless broadband. Verizon currently has 5G fixed wireless technology testing underway in
“eleven geographies” and “different environments” including urban and suburban settings. AT&T
is piloting in Austin, TX with Intel and Ericsson using millimeter wave reaching 1GB speeds up and
down. Mobile World Congress 2017, the mobile industry’s biggest trade show, 5G was
everywhere. Big players Qualcomm, Ericsson, Intel, Nokia, and all chip and mobile leaders betting
the future on it.
Telecom Italia says Turin, Italy will become 100% 5G by 2020.
Senior Management Analyst Jim Fleming discussed three options being offered tonight for action
on Fiber to the Premises (FTTP). The first option was to implement municipal FTTP. The cost was
estimated at $78M for construction, $8M annual O&M, and would require a 72% take rate. If the
City used $20M from its fiber reserves, required take rate could decrease to 57%. A key
consideration for network implementation is how to fund both capital construction costs and
Utilities Advisory Commission Minutes Approved on: Page 9 of 16
ongoing operational expenses. Acknowledging that capital and operating costs associa ted with a
full-scale citywide build-out will be significant, the City will likely have to seek outside funding
and/or internal subsidies to support construction and the FTTP network’s startup costs. Certain
challenges inherent to FTTP deployment are especially pronounced in the Palo Alto. In particular,
high construction and labor costs in the Bay Area result in a higher necessary take rate to obtain
and maintain positive cash flow. As a comparison, other recent analyses performed by our
consultant for municipalities have shown a required take rate in the mid-40 percent range in order
to maintain positive cash flow.
The second option was to explore the design of a Fiber-to-the-Node Network, which may provide a
platform for Public Safety and Utilities wireless communication in the field, communications
support for Smart Grid and Smart City applications, and new dark fiber licensing opportunities.
This approach may also create a basis to explore alternative “last mile” models for Fiber-to-the-
Premises, including user-financing, creating Assessment Districts, Mello-Roos Community Facilities
Districts and/or public-private partnerships. Construction costs were estimated at $12M to $15M,
with unknown ongoing O&M cost and would be dependent on usage of the netwo rk. A FTTN
network would require construction of approximately 62 miles of fiber plant, compared to 230
miles for a citywide FTTP network deployment. This network would provide access points to
connect neighborhood-area backhaul communications links. The network could be a phased
approach for fiber expansion and it may lower the barriers for potential providers to build the so -
called “last mile” from neighborhood access nodes to the premises, and provide the City with an
economically viable deployment approach. Additionally, this approach may expand the
functionality and the choices of technology that can be implemented for Utilities and Public Safety
communications, and possibly support communication requirements to implement future Smart
City and Smart Grid applications. New opportunities to license dark fiber may also occur,
particularly for the wireless carriers who will be densifying their networks to improve coverage
and capacity with more wireless communication facilities such as small cell antenna s deployed
within residential neighborhoods and high traffic commercial areas such as University Ave. These
small cell antennas and other distributed antenna systems will need fiber for backhaul purposes to
connect to the wireless carriers’ macro cellular towers and other network hub sites. This potential
opportunity aligns with the existing commercial dark fiber enterprise. A FTTN network may
include an option for the City to build the “last mile” at a later date, or as a means of creating an
incentive for a private sector partner to build and operate the last mile. Another potential
approach is to direct new investment to neighborhoods that meet established subscription
requirements – in other words “take rates.” If a certain level of interest was met and property
owners were willing to pay for the connections between the neighborhood node and homes and
businesses, assessment districts could be created as an incentive to build FTTP
The third option was to stop evaluation of either FTTP or FTTN and foc us on streamlining the
ability for third parties to perform network upgrades in the City, where feasible. In light of the
anticipated upgrade plans by the cable and telco incumbents and challenge in obtaining sufficient
market share, another potential option is pausing any further municipal FTTP development efforts
at this time. In the interest of improving broadband in Palo Alto, another option is to identify
resources and improve coordination of City policies and processes to facilitate network upgrades
by the incumbents and other independent ISPs. To that end, the objective of this recommendation
is to enhance transparency and predictability for third party providers. Access by third -parties to
infrastructure data and assets such as poles, conduits and public rights-of-ways is essential to
Utilities Advisory Commission Minutes Approved on: Page 10 of 16
encouraging broadband improvements. Ensuring efficient and predictable processes that enhance
deployments is equally important, as with any public project.
Staff also has two wireless recommendations. The first recommendation is to expand Wi-Fi to
unserved City facilities at common areas in Cubberley, Lucie Stern, the Golf Course Pro Shop and
Cafe, and Lytton Plaza. A high-level cost estimate for the recommended sites is $165,000 for
installation and $6,200 for monthly recurring charges. The second wireless recommendation is to
discontinue consideration of City Wi-Fi in commercial areas since there have been no specific
requests from the business community or the general public for Wi -Fi services in high traffic
commercial areas. A significant number of Palo Alto businesses already offer free Wi -Fi service to
patrons as an amenity.
Citizen Jeff Hoel serves on the CAC, but expressed his personal views. Hoel referenced a lengthy
email that was sent to the UAC. There is $25M in fiber fund and the dark fiber has revenue stream
of $2.5M per year. User financed approach could be used for part of funding. If planning smart
meters in Palo Alto, City could use Electric Special Project fund for fiber. There seems to be
enough funding to do FTTP. A previous staff report couldn't find the necessary funds. We can still
afford to pay for a very large phase 1 of the project. Sandy, OR had a contest that showed many
neighborhoods were interested.
Citizen Herb Borock stated the FTTP project has been managed under multiple departments and
no decision has been made on whether it’s a project or not. The City just conducted another
lengthy study but now no one wants to give it the time of day. The CAC is not present tonight , the
sense I have is the CAC is simply responding to what staff says should be done. There have not
been substantive discussions, although staff promises stronger action in the future. The CAC can
help, but not in role they have today. Create a demand -driven dark fiber partnership, then lease
fiber to partner. PA is unique, we have bridge funding for the additional fiber. The main thing is
Council needs to make a choice. If we study for 2 more years, it will take too long.
Commissioner Ballantine said he did not think much about the options had changed since the
previous year’s discussion. He thought the best idea was some kind of citizen referendum about
whether it would be possible to raise funds for the rollout. He said tonight’s recommendation d id
not align with the Council’s guidance. He did not see any way to reasonably approve any of the
three options. It was not reasonable to abandon the effort given Council direction. He thought
FTTN might end up coming for free as a result of the smart grid buildout. He understood the issue
with financing.
Commissioner Johnston said a member of the public had e-mailed with questions about conflicts
of interest. He said he did not have a conflict, and that he did not own the stocks cited in the e -
mail. He asked what the revenue might be from an FTTN rollout.
Fleming said it was difficult to predict the revenue, but the business model was in line with the
City’s current business model. The City currently partnered with resellers of the City’s dark fiber
service. By contrast, competition in the area of FTTP was very difficult, a new service for the City,
with two existing incumbents to compete with.
Commissioner Schwartz asked staff to confirm that FTTN would support a 5G rollout.
Utilities Advisory Commission Minutes Approved on: Page 11 of 16
Reichental confirmed fiber was essential to support better wireless.
Commissioner Schwartz said it would be helpful to talk about applications that would be enabled
by 5G, rather than listing speeds. It helped people relate to the discussion effectively. She also
suggested something such as a “scholarship fund.” If there was a startup or nonprofit that
required fiber, she would like to see the City provide that service at a lower rate. She said she had
seen progress since the previous year’s discussion, particularly the inclusion of the FTTN option.
Lastly, she clarified that in her Commissioner comments, when she had mentioned Chattanooga
Electric Power Board, that organization was evaluated as a utility rather than a telecom.
Yuan spoke to the “scholarship fund” idea, saying staff could consider adding fiber under the
Emerging Technology program. He said regarding the comments on lack of progress, most of the
work over the last couple years have been focused on a potential partnership with Google Fiber,
which had not panned out.
Commissioner Danaher said option three was not that feasible. Staff had seen how difficult it was
to work with a third party when collaborating with Google Fiber, and he had seen AT&T make
excuses and delay, such as the color requirements for equipment cabinets, to delay rollouts. He
asked about FTTP, and whether the City would be the service provider or license to third parties.
He also said that option #1 will pass all homes, but there’s no data collection.
Fleming said in an FTTP rollout it was best for the City to be the provider, but pulling together
those services, such as providing cable services, was difficult. It was typically a money-losing
business for a small operator. The classic “triple-play” model is outdated. It was possible to partner
with an ISP, but that would be a revenue sharing situation, meaning it would be difficult to make
any return on investment. The breakeven take rate required to make FTTP work was very high,
making it difficult even without a revenue sharing arrangement.
Commissioner Danaher said it would be a matter of what the City was willing to subsidize.
Fleming said that was the case. He noted that Chattanooga, a commonly cited public provider, had
built their system using Federal grants, had built it out to roll out a sm art grid service, and had
been underserved by other telecom providers. One -third of the build costs came from federal
grants and they were able to allocate costs against their electric utility. Comcast answered by
performing upgrades in Chattanooga to maintain their market share.
Commissioner Danaher asked whether there would be just one provider on the City network. He
noted the challenges with that approach. He asked how the buildout of the last mile of an FTTN
network would work. How does FTTN get us to FTTP?
Fleming said there were few ISPs who would be interested in partnering and capable of providing
services to all homes in the community. Fleming said it's speculative, we might attract a partner.
The last mile is the most expensive part of the bu ild and the provider would probably want a
guaranteed take rate.
Commissioner Danaher asked about the alternative in which citizens signed up as a neighborhood
to fund the last mile.
Utilities Advisory Commission Minutes Approved on: Page 12 of 16
Fleming said user-financing has been considered but there wasn’t enough community interest
given the costs. Nowadays, connections to homes could be wireless, which costs much less. The
home owner could pay for the wireless connection.
Reichental noted that it was more likely that the last mile would be served wirelessly by 5G
providers.
Fleming said that was the likely future business model for Google Fiber.
Commissioner Danaher said it was important to distinguish between the business model and the
technology. The business model must be thought through. He said the Cit y could subsidize
connections and amortize them over twenty years. He agreed with the assessment on the
technology, but still had questions about the technology.
Councilmember Filseth asked whether future wireless technologies could replace the need for
fiber backhaul.
Reichental said it was hard to predict, but he did not see anything on the horizon. There was a
need for fiber backhaul for good wireless services.
Councilmember Filseth said two things have changed in the past one and a half years. First is
whether we get on the Google train? Second, there’s more clarity on 5G and it’s looking more
realistic where fiber to node and wireless to the home is more likely. The fundamental question
regularly raised was why the City would want to be in this business in the first place given there
are commercial providers and there are a lot of technology services the City does not provide such
as ISP, commercial cellular or citywide commercial Wi-Fi. He said he could not speak for the whole
Council, but for some the motivation related to a “bad scenario” was one in which laying fiber was
so expensive that the first provider in became the sole provider, and he was concerned that with a
natural monopoly the operator could end up being rapacious. The concern i s we don’t want to
operate the network but if the monopoly provider is not servicing our community, we wanted an
insurance policy against the “bad scenario” such as “dig once” with Google. It seems that 5G and
wireless are looking concrete enough at this point, that if we pursue the same path as the
incumbents, we would avoid the “bad scenario” because there will be multiple providers. Under
option 1, there's a risk that we could have a $50M - $100M boat anchor years down the road; if
the service provider could provide enough bandwidth through wireless and avoid the massive
investment in trenching and adding fiber. He would be cautious in making the investment now
under option 1 and would want to see what happens with wireless. The City would likely not l ose
by delaying a short time. FTTN is a much cheaper option; it could work if wireless is used for the
last mile. He also wondered whether FTTN might be obsolete eventually. Is this a logical thought
process?
Reichental agreed. This is similar to Clay Christensen’s “disruptive innovation” model where a
company goes along a path of innovation but an upstart enters the market and makes the
technology obsolete. This happens often.
Commissioner Ballantine suggests to prevent a “bad scenario” under option 2; can we implement
a neighborhood lottery? Build to the node and extend to premise in one neighborhood, gather
Utilities Advisory Commission Minutes Approved on: Page 13 of 16
data, and experiment partnership models. If a “bad scenario” materializes, we can stop and the
cost is marginal.
Chair Cook thanked staff for the presentation. He said option one was infeasible without a vote,
given the high costs and take rate required. His “bad scenario” was spending a lot of City money
and having it become worthless. Option 2 seemed promising on its face since the Fiber Fund h as
$20M - $25M in reserves, but wondered whether there was really enough value in that option to
move forward. Per Jeff Hoel, is this “fiber to the nothing” or “fiber to the node”? He said the
benefits for option 2 had to be quantified before the City move d forward. Is there really a tie-in
with smart grid and what’s the advantage of advanced meters and smart devices? He said some of
the possible benefits sounded interesting, but a clearer benefit had to be shown. He was skeptical
about 5G, and wanted a clearer explanation of the value. Will FTTN encourage something, not just
something speculative? He did not like option 3. He also did not think municipal Wi -Fi was a good
idea. He thought the golf course can pay for its own Wi -Fi.
Vice Chair Danaher said he agreed that more work needed to be done on the service provider
model associated with FTTN. Under option 2, need to explore design of FTTN, identify service
provider model and financing mechanisms. It should be technology independent.
Councilmember Filseth said in looking at option 2, it seems pretty likely that next generation
wireless will be much faster than now. If the incumbents are offering 20Mb -40Mb and citizens can
get these speeds directly from them without going through the city; we need to think about this
when researching. We need to assess the value of option 2. Some customers will pay more for
faster speed but most are probably content with their existing service.
Reichental said he was 100% confident various wireless providers would provide speeds above
what Filseth stated.
Councilmember Filseth said 3G had not rolled out anywhere near as quickly as had been expected.
2.5G carried people a long way.
Vice Chair Danaher said there were many virtual reality startups, and there were a variety of
applications even beyond entertainment such as work, medical, telepresence and other
applications that have not been invented. It would require very fast gigabit connection speeds.
Commissioner Schwartz said option 2 is a foundational technology. FTTN which would enable a
variety of new technological applications, such as smart grid, interval meters, supply and demand
applications and gas and water leak detection which already exists. She said it was hard to find any
businesses really using telepresence. But she said that if virtual reality became more prevalent, the
FTTN investment would not be a waste of money since it would enable technology for these types
of applications. She expected that the consultants hired for the strategic plan would a ddress these
issues. We need to build a strategic plan outlining phased application deployment.
Commissioner Ballantine said Palo Alto doesn't have underground wiring citywide. Earlier
underground wiring costs more to maintain but future undergroundin g was made better because
of lessons learned. Utilities has a plan to underground in a piecemeal fashion. For option 2, add
an element of option 1 as an experiment so we’re able to learn from it.
Utilities Advisory Commission Minutes Approved on: Page 14 of 16
ACTION: Commissioner Schwartz made a motion to recommend Council approval of Option Two,
taking into account UAC feedback on that option including the idea of a neighborhood beta.
Commissioner Danaher seconded the motion. The motion passed unanimously (5 -0, with Chair
Cook, Vice Chair Danaher and Commissioners Ballantine, Johnston, and Schwartz voting yes and
Commissioners Forssell and Trumbull absent)
Second motion – Commissioner Schwartz, second Ballantine, approve the recommendations on
wireless expansion, excluding extension of Wi-Fi to the golf course and discontinue consideration
of City Wi-Fi in commercial areas. (5-0, with Chair Cook, Vice Chair Danaher and Commissioners
Ballantine, Johnston, and Schwartz voting yes and Commissioners Forssell and Trumbull absent)
ITEM 3: ACTION: Staff Recommendation that the Utilities Advisory Commission Recommend that
the City Council Adopt a Resolution Approving the Fiscal Year 2018 Gas Utility Financial Plan With
no Changes to Gas Distribution Rates
Senior Resource Planner Eric Keniston gave an overview of the Gas Utility financial forecast. No gas
distribution rate change was proposed, but customers would see a bill increase as a result of the
Carbon Neutral Gas Plan approved by Council in November 2016. A charge of up to ten cents per
therm had been approved to buy offsets for all gas delivered within Palo Alto. Staff projected this
would cost $1.3 million dollars in FY 2017, resulting in a projected 4% increase. This had not been
highlighted in the projections presented at the March 2017 UAC meetin g. However, aside from
noting this impact, staff had no changes from the proposal presented at the March meeting.
ACTION: Vice Chair Danaher made a motion to recommend Council approval of the staff
recommendation. Commissioner Ballantine seconded the motion. The motion passed unanimously
(5-0, with Chair Cook, Vice Chair Danaher and Commissioners Ballantine, Johnston, and Schwartz
voting yes and Commissioners Forssell and Trumbull absent)
ITEM 4. ACTION: Staff Recommendation that the Utilities Advisory Commission Recommend that
the City Council Adopt 1) a Resolution Approving the Fiscal Year 2018 Electric Financial Plan, and 2)
a Resolution Increasing Electric Rates by Amending the E-1, E-2, E-2-G, E-4, E-4-G, E-4 TOU, E-7, E-
7-G, E-7 TOU and E-14 Rate Schedules
Senior Resource Planner Eric Keniston gave an overview of the proposed Financial Plan and rate
changes. The preliminary forecast had changed. Staff was now proposing a 14% overall rate
increase, but he noted the residential increase was only 12%. The proposal included various
reserves transfers to mitigate the overall rate increase and prevent having to increase rates
further this year. This included transfers from the hydro stabilization reserve and a loan from the
Electric Special Projects reserve. These would be used to keep the Supply and Distribution
Reserves within operating guidelines. The Electric Special Projects Reserve would normally not be
used for operational reasons, since it was set aside for special projects, but this plan involved
repaying the loan from that fund by 2020 . He gave an overview of the reasons for the rate
changes. Operations costs were increasing as a result of accumulated deferred maintenance
related to difficulty filling positions, and additional capital investment was required due to aging
infrastructure. In addition, new renewable projects were coming online and transmission costs
were increasing. Even with the increases, however, Palo Alto’s electric rates would be substantially
lower than PG&E’s.
Utilities Advisory Commission Minutes Approved on: Page 15 of 16
Commissioner Schwartz noted there may be increased customer sensitivity to changes on their
bills due to the recent error in gas billing. It would be worthwhile to run a report to identify people
who would see a substantial increase and reach out in advance to let them know that the bill
changes were not due to a billing error. Posting on Nextdoor and other online information sources
would be important.
ACTION: Commissioner Ballantine made a motion to recommend Council approve the staff
recommendation. Vice Chair Danaher seconded the motion. The motion passed unanimously (5-0,
with Chair Cook, Vice Chair Danaher and Commissioners Ballantine, Johnston, and Schwartz voting
yes and Commissioners Forssell and Trumbull absent.)
ITEM 5. ACTION: Appointment of Commissioners to an Ad Hoc Budget Committee for FY 2018
Budget
Chair Cook said this was a good way for Commissioners to learn the details of the way the utility’s
finances worked. He recommended that people who had not done it already participate. He noted
that Commissioner Forssell had expressed interest. He asked if anybody else was interested.
Commissioner Johnston said he was interested.
Vice Chair Danaher said he would participate as a third member if needed.
Chair Cook said he would appoint Commissioners Forssell and Johnston to the ad hoc committee.
Chair Cook asked whether the UAC needed to appoint subcommittee members for the Utilities
Strategic Plan.
Abendschein said he believed UAC would receive regular updates at each meeting on the Strategic
Plan as a full body.
ACTION: Chair Cook appointed Commissioners Forssell and Johnston to the UAC Budget
Subcommittee, with Vice Chair Danaher as an alternate.
ITEM 6. ACTION: Selection of Potential Topics(s) for Discussion at Future UAC Meeting
Abendschein noted that in May there would be a discussion of energy storage and microgrids. This
item had a regulatory deadline. There would be a discussion of community solar and the long term
electric procurement strategy in June. There were new additions to the twelve month rolling UAC
calendar, including a discussion of the electric utility’s hydr oelectric variability management
strategy, a discussion of electric rates as applicable to electric vehicles and all-electric homes, and
a gas utility cost of service study.
Vice Chair Danaher asked about the report on smart meters due out this year.
Abendschein said an informational report was scheduled for May.
Commissioner Schwartz asked that the June 7 UAC meeting be rescheduled because she would be
presenting a research report on community solar for low-income communities in Baltimore.
Utilities Advisory Commission Minutes Approved on: Page 16 of 16
Chair Cook asked that staff look into changing the meeting, and look at options other than
Wednesday if feasible.
Abendschein said he would have somebody reach out to the Commissioners to try to schedule
alternate dates.
Chair Cook asked staff to confirm that the May 3 UAC meeting was indeed on May 3, and not on
Friday, May 5 as was stated on the April 5 UAC agenda. He asked whether that was a day meeting.
Abendschein said the May meeting was a day meeting. The date listed on the agenda was a
misprint.
ACTION: No action.
Meeting adjourned at 9:42 p.m.
Respectfully Submitted,
Marites Ward
City of Palo Alto Utilities
MEMORANDUM
1
TO: UTILITIES ADVISORY COMMISSION
FROM: UTILITIES DEPARTMENT
DATE: MAY 3, 2017
SUBJECT: Staff Recommendation that the Utilities Advisory Commission Recommend
that the City Council Adopt the Proposed Operating and Capital Budgets for
the Utilities Department for Fiscal Year 2018
Attached are the FY 2018 Proposed Operating and Capital budgets for the Utilities Department.
Due to the size of the CIP budget, staff only printed the summary pages of each utility for
FY 2018-FY 2022.
The entire Utilities CIP budget for FY 2018 -FY 2022 with the individual project pages can be
downloaded and viewed in full from the link:
CIP budget for FY 2018 -FY 2022
ATTACHMENTS
A. FY 2018 Proposed Operating Budget for the Utilities Department
B. FY 2018 Proposed Capital Budget Summary for the Utiliti es Department
PREPARED BY: DAVE YUAN, Strategic Business Manager
DEPARTMENT HEAD:
EDSHIKADA
General Manager of Utilities
Page 1of1
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 1
UTILITIESMission Statement
The City of Palo Alto Utilities' mission is
to provide safe, reliable,
environmentally sustainable and cost-
effective services.
Purpose
The purpose of the City of Palo Alto Utili-
ties is to provide high quality, cost-effec-
tive electric, gas, fiber optics, water and
wastewater collection services;
promote effective energy and water effi-
ciency programs; proactively manage
infrastructure needs and replace deterio-
rated or aging facilities with new technolo-
gies to ensure safe and reliable delivery of
services; and ensure the City's utilities are
in sound financial condition.
ATTACHMENT A
UTILITIES
2 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
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UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 3
Description
Palo Alto is the only city in California that offers a full array of utility
services to its citizens and businesses. Because of this, the City has a
unique opportunity to partner with the Palo Alto community to enjoy the
benefits and achievements of reliable, home-grown, and
environmentally-focused utilities. Palo Alto has a tradition of over 100
years of successful public utility operations. It is a tradition that
continues to provide the Palo Alto community with safe and reliable
utilities service, local decision-making over policies, utility rate-making,
environmental programs, and customized services.
The City of Palo Alto Utilities (CPAU) continues to focus on customer
service, infrastructure reliability, regulatory compliance and cost
containment. Marketing of energy and water efficiency, increasing
renewable energy supplies and promoting technological development
for utility efficiency services continue to be focal points, especially in
light of the City Council's environmental sustainability priority and state
mandated efficiency goals.
ADMINISTRATION
Utilities Administration is responsible for the overall management of the CPAU including com-
munication, regulatory compliance, strategic planning, budget coordination, legislation and reg-
ulatory policy analysis, and personnel and administrative support to the entire Department.
CUSTOMER SUPPORT SERVICES
This group annually bills $250 million for the City's electric, natural gas, water, commercial fiber
optic, wastewater collection (operated by CPAU), storm drain and refuse (operated by Public
Works) services; operates the Customer Service Call Center with 75,000 annual customer inter-
actions; reads 90,000 utility meters per month; implements Credit and Collection policies and
financial assistance programs.
ENGINEERING
Engineering is responsible for managing all phases of CPAU's capital improvement projects
including providing new or upgrading existing service to customers, and replacing and rehabili-
tating the City's electric, fiber, water, gas, and wastewater distribution systems.
UTILITIES
4 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
OPERATIONS
Utilities Operations is responsible for the operations, maintenance, and emergency response for
the electric, fiber, water, gas and wastewater distribution systems.
RESOURCE MANAGEMENT
Resource Management is responsible for: the long-term resource acquisition plan, including
electricity, natural gas, and water; contract negotiations to acquire renewable resources; finan-
cial planning; rate development; energy efficiency and water conservation programs; and man-
agement of key accounts.
Accomplishments
Increased the City's Renewable Portfolio Standard (RPS) from 32% to 53% of retail
energy sales with the addition of 80 MW of solar to the City's portfolio. Remaining power
was carbon neutral, primarily using hydropower but with some purchases of Renewable
Energy Credits (RECs).
Achieved drought water savings of 24% compared to the first drought year in 2013, far
surpassing the 10% voluntary water reduction goal established by the State Water
Resources Control Board.
Added new electric service to new buildings and other major improvements in the Stanford
Hospital/Lucille Packard Hospital area.
Implemented a new interactive response system (IVR) phone system to enable automated
24x7 communication for Utility customers offering bill balance, payment acceptance and
customer service feedback.
Completed substation security measures at one of the nine electric substations, with two
remaining to be done.
Completed the design of water main replacement project WMR 26 to replace approximately
11,000 linear feet of water main pipelines, 200 service pipelines, and 40 fire hydrants.
Repaired and/or replaced over 202 laterals with structural damage.
Surveyed, inspected, and cleaned 3,397 out of 18,141 City-owned sewer laterals. On average,
the City surveys and inspects between 3,200 - 4,200 per year.
Received and responded to a total of 944 requests for service, including power outages,
street light outages, and low hanging wires for example. Of those 944 requests, 124 of them
were service disconnect & reconnect requests.
Replaced and reconfigured a large portion of the underground facilities in the downtown
area. The estimated completion date of this project is the fall of 2017.
Moody's upgraded the City's Water Enterprise bond rating from Aa2 to Aa1, a rare event for
water operations.
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 5
Initiatives
Capital Improvement Programs: Continue replacement of aging infrastructure on Electric,
Gas, Fiber, Wastewater Collection, and Water systems; develop a long range master
infrastructure plan for Gas and Water utilities.
Downtown improvement projects: Water Main Replacement 26 - begin construction; Gas
Main Replacement 22 - begin construction; and University Ave Improvement - complete
design, coordinate with other departments and provide community outreach to
general public and businesses.
Update Utilities Strategic Plan to engage stakeholders and align resources and
activities with City's priorities of civic engagement, innovation and sustainability.
Bring remaining solar projects online to bring RPS-eligible renewable energy share of
portfolio to 60% of retail sales from 2017 forward, with remaining energy supplied by
carbon-free hydroelectric power.
Implement the Carbon Neutral Gas plan to achieve a carbon neutral gas supply portfolio.
Launch Net Energy Metering (NEM) successor program to continue promoting installation
of solar photovoltaic systems while providing fair compensation for local solar generation.
Develop a ''Dig Once" policy or ordinance to support the expansion of broadband in Palo
Alto and to preserve City streets and other critical infrastructure.
Upgrade Utilities customer self-service website to allow for mobile optimized viewing, new
self-service functionalities, recurring payment and enhanced security.
Expand efforts to compete for the $5 million Georgetown University Energy Prize by
reducing energy consumption through innovation, education and community participation.
Enhance customer feedback mechanisms through variety of survey formats, feedback
forms, and different communication channels.
Complete smart grid assessment for advanced metering infrastructure (AMI); develop a
long term technology roadmap with an implementation plan.
Complete business requirements and issue request for proposal for new Utilities Customer
Information and Billing system.
Develop education programs/materials to raise customer awareness on Public Power,
Natural Gas, water and energy efficiency.
UTILITIES
6 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
Key Performance Measures
COMPARABLE AND COST-EFFECTIVE SERVICES
Goal Ensure fiscally sound and cost-effective services
Objective Reduce the cost of delivering services through best management practices.
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
FY 2017
Estimated
FY 2018
Proposed
Palo Alto's average residential
monthly utility bill above/below the
median of neighboring cities
(7.00)%(6.80)%(6.80)%(6.80)%(6.80)%
Description
This compares the average residential monthly utility bill which includes electricity,
gas, water, and wastewater services to the nearby communities (Santa Clara
$214.80, Hayward $255.52, Los Altos $264.04, Mountain View $273.31,
Redwood City $325.81, and Menlo Park $333.97).
Purpose
This measure compares the City's average utility rates charged to residents to
other comparable cities (e.g., similar size, similar commodity purchase options,
similar geography).
Status
Palo Alto's electric rates are significantly lower than PGE and slightly higher than
Santa Clara. Natural gas rates are lower than surrounding communities due to
PGE increasing its distribution rates for capital improvement and maintenance.
Water rates are higher than many neighboring communities primarily because of
differing system characteristics and levels of infrastructure investment, but also
because some communities have different sources of supply. Palo Alto's water
supply comes from the SFPUC who is in the middle of a $4.6 billion improvement
project, and Palo Alto is investing more than other areas in improving local
distribution pipelines and enhancing emergency water supply system. For 2018,
the monthly average for nearby communities is $277.91 and for Palo Alto the
average is $233.78.
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 7
Workload Measures
CUSTOMER SATISFACTION
Goal Provide excellent customer service
Objective
Maintain a high level of customer satisfaction, equal to or greater than 83 percent
of Palo Alto citizens rating satisfaction of utility services as "Excellent" or "Good" in
the National Citizen Survey.
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
FY 2017
Estimated
FY 2018
Proposed
Percent rating services (electric,
gas, wastewater, and water)
"Good" or Excellent"
84.00%83.25%85.00%85.00%85.00%
Description
The National Citizen Survey (NCS) is a collaborative effort between National
Research Center, Inc. (NRC) and the International City/County Management
Association (ICMA). The NCS was developed by NRC to provide a statistically
valid survey of opinions about community and services provided by local
governments. The survey results may be used by staff, elected officials and other
stakeholders for community planning and resource allocation, program
improvement and policy-making. There are ten California communities
participating in the survey.
Purpose
The best way to get feedback on whether our customers are satisfied with the
nature, extent and delivery of services we provide them is to ask outright, using
random-selection survey processes that include a good cross-section of our
customer base.
Status
Results are statistically weighted to reflect the proper demographic composition
of the entire community. A total of 744 completed surveys were obtained,
providing an overall response rate of 26 percent. Typically, response rates
obtained on citizen surveys range from 25 percent to 40 percent. From Fiscal Year
2012 to Fiscal Year 2016, Utilities has met its target of 83 percent.
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
FY 2017
Estimated
FY 2018
Proposed
Total cost of Capital Improvement
Program annually (Millions)$27.00 $22.20 $42.90 $24.40 $26.20
Budget Summary
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
Budget
FY 2018
Proposed
Budget
FY 2018
Change $
FY 2018
Change %
Dollars by Fund
Electric Fund - Operating 47,565,953 53,504,506 78,610,552 73,533,713 (5,076,839)(6.5)%
Electric Supply 91,302,629 85,918,737 101,478,975 107,008,026 5,529,051 5.4%
Fiber Optics 1,999,420 2,574,599 4,286,565 5,860,344 1,573,779 36.7%
Gas Fund - Operating 22,825,964 19,079,098 33,302,713 25,936,204 (7,366,509)(22.1)%
Gas Supply 11,543,034 9,061,954 14,363,841 17,157,234 2,793,394 19.4%
Wastewater Collection - Operating 16,387,816 19,271,590 25,485,987 20,878,800 (4,607,187)(18.1)%
UTILITIES
8 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
Water Fund - Operating 34,451,902 42,098,850 59,322,622 47,738,297 (11,584,325)(19.5)%
Total 226,076,718 231,509,334 316,851,255 298,112,618 (18,738,637)(5.9)%
Revenues
Charges for Services 529,927 438,985 270,000 270,000 ——%
Charges to Other Funds 592,102 985,530 682,265 518,662 (163,603)(24.0)%
From Other Agencies 534,328 636,666 576,632 576,632 ——%
Net Sales 196,794,497 197,161,475 228,776,506 234,641,567 5,865,061 2.6%
Operating Transfers-In 751,521 481,233 2,922,786 3,977,536 1,054,750 36.1%
Other Revenue 11,909,526 11,260,334 18,468,731 14,251,610 (4,217,121)(22.8)%
Other Taxes and Fines 112,392 420,867 ————%
Property Taxes —76 ————%
Return on Investments 4,442,020 3,969,933 4,442,200 4,442,200 ——%
Total Revenues 215,666,312 215,355,098 256,139,120 258,678,207 2,539,087 1.0%
Positions by Fund
Electric Fund 114.26 116.38 112.58 111.23 (1.35)(1.20)%
Fiber Optics Fund 7.24 6.76 6.82 7.60 0.78 11.50%
Gas Fund 52.80 52.16 52.70 53.11 0.41 0.78%
Utilities Administration Fund 19.52 18.12 18.22 19.21 0.99 5.43%
Wastewater Collection Fund 29.57 29.74 29.17 29.00 (0.16)(0.56)%
Water Fund 48.38 46.15 48.58 47.90 (0.68)(1.40)%
Total 271.77 269.31 268.06 268.05 (0.01)(0.00)%
Budget Summary
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
Budget
FY 2018
Proposed
Budget
FY 2018
Change $
FY 2018
Change %
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 9
ELECTRIC FUND
Description
On January 16, 1900, the City of Palo Alto began operation of its own
electric system. A steam engine was the initial source of the City's
electricity, and was replaced by a diesel engine in 1914. As demand for
electricity and the population continued to grow, the City of Palo Alto
Utilities (CPAU) connected to the Pacific Gas and Electric distribution
system and purchased power from additional sources.
The integrity of the infrastructure required for achieving a high level of
reliability and value for our customers is of paramount importance to
CPAU. The Electric Fund plans to enhance the customer service
connection experience, increase energy efficiency participation, and
increase the percentage of electric supply obtained from renewable
energy supplies. The City has entered into a number of contracts with
producers of wind, landfill gas, and solar energy for more than 15-year
terms.
Accomplishments
Increased renewable supply sources secured through competitive solicitation. The City's
qualifying supply for the State's Renewable Portfolio Standard (RPS) will rise from 32%
percent of retail sales in 2016 to an estimated 53% by the end of fiscal year 2017. The City's
RPS is projected to increase to 60% by the end of fiscal year 2018.
Continued to focus on local generation. Received five PaloAltoCLEAN program applications,
achieved full subscription of the PV Partners commercial and residential solar rebate
programs, and established a plan for local generation compensation after Palo Alto reaches
its net metering cap.
Continued evaluation of electrification programs, including promotion and implementation
of Heat Pump Water Heating and Space Heating pilots.
Palo Altans saved 4 million kWh as a result of utility energy efficiency programs. Increased
uptake for existing programs, particularly the Home Efficiency Genie for residents and the
Multi-Family Plus program, a direct-install program for multi-family structures.
UTILITIES
10 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
Completed the electric cost of service study which resulted in significant updates to electric
rate structures, effective July 1, 2016.
Completed substation security measures at one out of the nine electric substations, with
two remaining to be done in fiscal year 2019.
Updated the ten-year electric efficiency goals for 2018 to 2027 with a cumulative ten-
year electric efficiency savings of 5.7% or 54,900 MWh of the City's projected load.
Participated, with other electric utilities (SVP & PG&E), in negotiations with the Peninsula
Corridor Joint Powers Board (PCJPB) on development of guidelines for utility facilities that
cross the Caltrain right of way from San Francisco to San Jose that need to be moved to
facilitate electrification of railway trains. Successfully convinced PCJPB and the California
Public Utilities Commission that overhead facilities are allowed and undergrounding of
facilities is not required.
Updated Rule and Regulation 27, Generating Facility Interconnection to keep pace with
changing inverter technology.
Completed the planning of facilities at Hopkins and Colorado Substations that will improve
service reliability and meet future capacity needs brought on by growth in the Stanford
Hospital area.
Initiatives
Bring remaining solar projects online to bring RPS-eligible renewable energy share of
portfolio to 60% of retail sales from 2017 forward, with remaining energy supplied by
carbon-free hydroelectric power.
Establish new ten year energy efficiency goals. Establish new efficiency programs, including
new behavioral savings and facility management training programs. Increase uptake for
commercial efficiency programs.
Continue to reduce barriers to building electrification and electric vehicle adoption, build on
existing electrification programs, and evaluate new programs.
Expand effort to lower greenhouse gas emissions through electrification of the
transportation sector such as encouraging adoption of electric vehicles.
Develop new solar programs under the Local Solar Plan. Bring PaloAltoCLEAN projects
online, evaluate sites for the community solar program, and complete a smooth transition
from net metering to the replacement local generation compensation program once the net
metering cap is reached in 2017 or 2018.
Continue to offer electric safety education presentations to school and community groups.
Continue discussions on building a second transmission line to provide electric service to
Palo Alto.
Replace aging substation facilities and increase electric system capacity in the Colorado/
Hopkins/Quarry load areas to meet projected load growth.
Improve efficiency of Utility Electric System with installation of Power Factor correction
capacitor banks.
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 11
Add new facilities to meet the electric loads proposed by the VA Hospital for their site
upgrades.
Relocate/reconstruct City's electric and communication facilities as necessary to facilitate
the electrification of the Caltrain system.
Complete General Order 95, 128 and 174 Inspection and Maintenance related to electrical
overhead, underground and substation facilities.
Rebuild underground facilities in District 20 (near Channing, Center, Hamilton, Lincoln) and
underground District 46 (near Charleston and El Camino Real).
Complete the pole inspection and replacement program for each fiscal year.
Continue to plan and replace electric facilities before they reach the end of their useful life
to maintain high system reliability.
Goals and Objectives
GOAL 1
Provide safe and reliable delivery of electric services to our customers.
Objectives:
Develop a plan to complete a second electric transmission line source to improve service
reliability.
Provide exceptional system reliability.
Reduce the backlog of infrastructure assets whose ages are beyond their useful lives.
GOAL 2
Increase environmental sustainability and promote efficient use of resources.
Objectives:
Achieve the ten-year goal for electric energy efficiency of 5.7 percent of the electric load by
2027.
Measure actual electric energy efficiency achievement.
Increase the penetration of local solar installations so that 4% of the City's energy use is
generated by local solar systems by 2023.
UTILITIES
12 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
Key Performance Measures
ENVIRONMENTAL SUSTAINABILITY
Goal Support environmental sustainability and promote efficient use of resources
Objective Achieve Renewable Portfolio Standard (RPS) of at least 52% percent by 2017.
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
FY 2017
Estimated
FY 2018
Proposed
Percent of retail electric sales
volume provided by renewable
supply resources under long-term
PPAs
25.70%31.80%52.30%57.50%57.20%
Description This measures the fraction of the City's retail electric sales volume that is provided
by renewable supply resources that are under long-term agreement.
Purpose
The California Renewable Energy Resources Act (SBX1-2) requires that utilities
supply 33 percent of their total retail electric sales volume with eligible renewable
energy resources by 2020. The City's internal target, established by the Long-
term Electric Acquisition Plan (LEAP), was to meet at least 33 percent by 2015. In
March 2013, the City also adopted a 100 percent carbon neutral electric supply
portfolio target.
Status
The City established a target by 2015 to have a 33% renewable portfolio.
However, the City was unable to reach this 2015 target in fiscal year 2016 but
early estimates for fiscal year 2017 are that we will meet or exceed the target of
52.3%. This target will be reached through the execution of additional long-term
renewable energy supply agreements, and through the procurement of short-term
renewable energy certificates (RECs). The City's goal exceeds California's RPS
mandate of 33% by 2020 (California Renewable Energy Resources Act SBX1-2).
The City currently meets its 100% carbon neutral electric supply portfolio target
established in 2013, primarily through long-term renewable energy supply
agreements, supplemented by short-term REC purchases.
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 13
SYSTEM RELIABILITY
Goal Provide safe and efficient delivery of electric services to our customers.
Objective Provide exceptional system reliability.
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
FY 2017
Estimated
FY 2018
Proposed
Average duration of customer
outages in minutes as reported
using industry guidelines
46.85 39.48 60.00 39.48 60.00
Description
System Average Interruptible Duration Index (SAIDI) is a measure of outage
duration. It measures the number of minutes over the year that the average
customer is without power.
Purpose
Reliability indices were introduced in order to keep track of utility performance.
This information will help Utilities prioritize capital and operating spending so that
reliability can be improved without increasing costs.
Status
Despite continuous lineperson and system operator vacancies, The Electric Utility
continues to meet the goal of average customer outages being 60 minutes or less
in duration for the average customer by minimizing the number of outages and
customers directly affected. This can be attributed to the Department's ongoing
efforts for infrastructure replacement, outage isolation improvements, system
maintenance, and improved response times. The adopted fiscal year 2017
number of 29 minutes was an error and has been corrected to 60 minutes in this
document.
ENVIRONMENTAL SUSTAINABILITY - SOLAR
Goal Support environmental sustainability and promote efficient use of resources.
Objective Increase the penetration of local solar installations.
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
FY 2017
Estimated
FY 2018
Proposed
Cumulative installed capacity of
photovoltaic (PV) systems
measured in megawatts (MW)
6.00 7.70 8.50 10.00 13.50
Description
This represents the cumulatively installed capacity of PV systems in Palo Alto,
measured in MW. It includes PV systems installed prior to the passage of Senate
Bill 1 (SB1), which enacts the Million Solar Roofs Initiative and expands upon the
current California Solar Initiative (CSI) and the Energy Commission's New Solar
Homes Partnership (NSHP).
Purpose
The California Million Solar Roofs Bill (SB1) requires an expanded funding
commitment by all California electric utilities, with a Statewide goal to add 3,000
MW of new PV systems over ten years. In addition to complying with state law, PV
installations will benefit the environment and expand flexibility to Palo Alto's
electric generation portfolio. This measure also supports the City to achieve a 100
percent carbon neutral electric supply portfolio. This measure also supports the
City's goal to meet 4% of the City's electricity needs through solar by 2023.
Status
Rebate funds for residential solar have been fully reserved, and Staff expects the
commercial funds to be reserved well before the 2017 goal set by SB1. With the
costs of PV systems steadily going down, along with the added incentive of
available rebates, staff anticipates more residential and commercial construction
projects to include installation of these systems.
UTILITIES
14 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
Workload Measures
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
FY 2017
Estimated
FY 2018
Proposed
Number of Customer Accounts
(Electric)29,299 29,304 29,299 29,300 29,300
Number of momentary outages 1 26 0 0 0
Percent of residents surveyed who
rate the quality of the Electric Utility
as "Good" or "Excellent"
83 86 88 88 88
Total Number of Outages 19 26 20 19 19
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 15
Budget Summary
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
Budget
FY 2018
Proposed
Budget
FY 2018
Change $
FY 2018
Change %
Dollars by Division
CIP Electric Fund 11,727,427 14,087,807 31,534,580 25,559,149 (5,975,431)(18.9)%
Electric Administration 20,476,339 22,014,672 25,376,584 26,279,205 902,620 3.6%
Electric Customer Service 1,548,851 2,110,437 2,226,652 2,300,532 73,881 3.3%
Electric Demand Side Management 3,559,586 3,724,006 6,817,126 6,992,874 175,748 2.6%
Electric Engineering (Operating)1,405,600 1,592,025 1,841,173 1,980,111 138,938 7.5%
Electric Operations and
Maintenance 10,716,881 11,523,884 13,735,487 13,522,126 (213,361)(1.6)%
Electric Resource Management 89,457,201 84,370,412 98,557,925 103,907,742 5,349,817 5.4%
Total 138,891,885 139,423,243 180,089,527 180,541,739 452,212 0.3%
Dollars by Category
Salary & Benefits
Healthcare 1,858,579 1,767,659 2,211,278 2,270,685 59,408 2.7%
Other Benefits 294,915 325,666 257,033 323,575 66,542 25.9%
Overtime 803,397 978,506 492,003 492,003 ——%
Pension 1,851,677 2,674,415 3,238,683 3,529,404 290,721 9.0%
Retiree Medical 1,541,657 1,417,176 1,537,264 1,617,277 80,014 5.2%
Salary 10,260,259 10,639,784 12,245,028 12,696,026 450,998 3.7%
Workers' Compensation 241,886 254,447 157,312 405,828 248,516 158.0%
Total Salary & Benefits 16,852,370 18,057,652 20,138,601 21,334,799 1,196,198 5.9%
Allocated Charges 3,997,504 4,708,298 8,829,184 9,112,457 283,273 3.2%
Contract Services 3,083,615 3,670,436 7,017,914 6,849,914 (168,000)(2.4)%
Debt Service 8,940,084 8,889,294 8,957,186 8,782,300 (174,886)(2.0)%
Equity Transfer 11,412,000 11,659,000 12,035,000 12,754,000 719,000 6.0%
Facilities & Equipment —2,190 44,475 44,475 ——%
General Expense 2,153,071 1,826,521 3,930,817 3,380,080 (550,737)(14.0)%
Operating Transfers-Out 661,061 177,323 255,269 400,940 145,671 57.1%
Rents & Leases 4,136,105 5,301,644 5,439,572 5,603,447 163,875 3.0%
Supplies & Material 677,677 665,283 873,097 871,207 (1,890)(0.2)%
Transfer to Infrastructure —273,476 ————%
Utility Purchase 78,380,327 73,439,746 86,440,735 91,705,000 5,264,265 6.1%
UTILITIES
16 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
Capital Improvement Program 8,598,071 10,752,379 26,127,677 19,703,119 (6,424,557)(24.6)%
Total Dollars by Expense
Category 138,891,885 139,423,243 180,089,527 180,541,739 452,212 0.3%
Revenues
Charges for Services 421,977 320,308 230,000 230,000 ——%
Charges to Other Funds 305,151 290,667 289,096 308,565 19,469 6.7%
Net Sales 112,001,079 110,604,293 131,990,403 136,139,180 4,148,777 3.1%
Operating Transfers-In 547,139 259,400 2,678,768 3,465,100 786,332 29.4%
Other Revenue 7,865,325 8,808,047 15,514,731 11,029,000 (4,485,731)(28.9)%
Other Taxes and Fines 112,392 420,867 ————%
Property Taxes —76 ————%
Return on Investments 2,414,464 2,039,748 2,507,700 2,507,700 ——%
Total Revenues 123,667,527 122,743,405 153,210,698 153,679,545 468,847 0.3%
Positions by Division
CIP Electric Fund 32.57 32.14 32.14 31.90 (0.24)(0.75)%
Electric Customer Service 13.63 13.54 12.07 11.70 (0.37)(3.07)%
Electric Demand Side Management 6.57 6.61 6.85 6.17 (0.68)(9.87)%
Electric Engineering (Operating)4.50 5.73 4.98 4.98 ——%
Electric Operations and
Maintenance 48.84 48.36 48.36 48.10 (0.26)(0.54)%
Electric Resource Management 8.15 10.00 8.18 8.38 0.20 2.44%
Total 114.26 116.38 112.58 111.23 (1.35)(1.20)%
Staffing
Job Classification
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
Budget
FY 2018
Proposed
Budget
FY 2018
Change $
FY 2018
Salary
Account Specialist 0.24 0.26 0.33 0.31 (0.02)22,035
Administrative Associate II 4.10 4.10 4.00 3.90 (0.10)297,218
Assistant Director Administrative
Services 0.15 0.15 0.20 0.20 —40,227
Assistant Director Utilities
Customer Support Services 0.40 0.40 0.40 0.40 —67,949
Budget Summary
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
Budget
FY 2018
Proposed
Budget
FY 2018
Change $
FY 2018
Change %
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 17
Assistant Director Utilities
Engineering 0.40 0.40 0.40 0.40 —77,958
Assistant Director Utilities
Operations 0.60 0.60 0.60 0.60 —114,080
Assistant Director Utilities/Resource
Management 0.50 0.50 0.50 0.50 —86,986
Business Analyst 2.13 2.89 2.04 1.94 (0.10)290,495
Contracts Administrator 0.10 0.10 0.10 0.10 —11,367
Coordinator Utilities Projects 1.80 1.80 1.55 1.55 —172,299
Customer Service Representative 1.62 1.86 1.62 1.87 0.25 141,244
Customer Service Specialist 0.66 0.62 0.66 0.66 —54,820
Customer Service Specialist-Lead 0.58 0.62 0.58 0.58 —51,521
Electric Project Engineer 1.95 1.95 1.95 1.95 —282,859
Electric Underground Inspector 2.00 2.00 2.00 2.00 —202,925
Electric Underground Inspector-
Lead 1.00 1.00 1.00 1.00 —108,512
Electrical Equipment Technician ——1.00 1.00 —92,630
Electrician Assistant I 4.00 4.00 3.00 3.00 —241,484
Engineering Manager - Electric 0.55 0.55 0.55 0.55 —98,464
Engineering Technician III 2.40 2.40 2.40 1.40 (1.00)134,114
Heavy Equipment Operator 2.00 2.00 2.00 2.00 —192,644
Inspector, Field Services ——0.25 0.25 —25,844
Lineperson/Cable Specialist 11.00 11.00 11.00 11.00 —1,411,327
Lineperson/Cable Specialist-Lead 4.00 4.00 4.00 4.00 —549,228
Manager Customer Service —0.33 0.33 0.33 —43,367
Manager Customer Service and
Meter Reading 0.33 —————
Manager Electric Operations 1.00 1.00 1.00 1.00 —154,232
Manager Treasury, Debt &
Investments ——0.30 0.30 —41,496
Manager Utilities Compliance 0.15 0.15 0.15 0.15 —24,841
Manager Utilities Credit &
Collection 0.15 0.15 0.15 0.15 —19,906
Manager Utilities Marketing
Services 0.40 0.40 ————
Manager Utilities Program Services ——0.40 0.40 —52,424
Staffing
Job Classification
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
Budget
FY 2018
Proposed
Budget
FY 2018
Change $
FY 2018
Salary
UTILITIES
18 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
Marketing Engineer 1.00 1.00 ————
Meter Reader 1.99 2.41 1.99 1.99 —141,181
Meter Reader-Lead 0.33 0.40 0.33 0.33 —25,046
Metering Technician 3.00 3.00 3.00 3.00 —362,874
Metering Technician-Lead 1.00 1.00 1.00 1.00 —129,434
Offset Equipment Operator 0.48 0.48 0.48 0.48 —32,490
Overhead Underground
Troubleman 2.00 2.00 2.00 2.00 —269,584
Planner 0.15 —————
Power Engineer 2.30 2.30 2.30 2.30 —314,565
Principal Business Analyst —0.34 0.34 0.34 —48,394
Principal Management Analyst 0.34 —————
Project Manager 0.75 0.75 0.75 0.75 —83,803
Resource Planner 2.65 3.95 3.65 3.85 0.20 528,374
SCADA Technologist 1.00 1.00 1.00 1.00 —147,031
Senior Business Analyst 0.68 0.68 0.68 0.68 —86,703
Senior Electrical Engineer 3.95 3.95 3.95 3.95 —641,974
Senior Management Analyst 0.45 0.45 0.10 0.10 —12,819
Senior Resource Planner 3.69 4.08 3.06 3.06 —513,381
Senior Technologist 0.29 —————
Senior Utilities Field Service
Representative 0.10 0.10 0.10 0.10 —11,193
Street Light, Traffic Signal & Fiber
Technician 2.00 3.00 3.00 3.00 —347,103
Street Light, Traffic Signal & Fiber
Technician Apprentice 1.00 —————
Street Light, Traffic Signal & Fiber-
Lead 1.00 1.00 1.00 1.00 —123,800
Substation Electrician 5.50 5.50 5.50 5.50 —694,182
Substation Electrician-Lead 2.00 2.00 2.00 2.00 —270,137
Supervising Electric Project
Engineer 1.00 1.00 1.00 1.00 —137,072
Tree Maintenance Person 1.00 1.00 1.00 1.00 —85,689
Utilities Compliance Technician 2.00 2.00 2.00 2.00 —269,429
Utilities Compliance Technician-
Lead 1.00 1.00 1.00 1.00 —144,163
Staffing
Job Classification
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
Budget
FY 2018
Proposed
Budget
FY 2018
Change $
FY 2018
Salary
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 19
Utilities Credit/Collection Specialist 2.00 2.00 2.00 2.00 —183,003
Utilities Engineer Estimator 3.25 3.25 3.25 3.25 —391,329
Utilities Field Services
Representative 0.50 0.50 0.50 0.50 —52,318
Utilities Key Account
Representative 1.90 1.90 1.60 1.35 (0.25)157,647
Utilities Locator 1.95 1.95 1.95 1.95 —187,281
Utilities Marketing Program
Administrator 2.55 2.25 1.90 1.60 (0.30)177,486
Utilities Safety Officer 0.55 0.55 0.55 0.55 —61,604
Utilities Supervisor 5.00 5.00 5.00 5.00 —679,827
Utilities System Operator 5.00 5.00 5.00 5.00 —687,715
Utility Engineering Estimator - Lead ———1.00 1.00 128,892
Sub-total: Full-Time Equivalent
Positions 109.56 112.02 107.44 107.12 (0.32)13,232,020
Temporary/Hourly 4.70 4.37 5.15 4.11 (1.03)328,067
Total Positions 114.26 116.38 112.58 111.23 (1.35)13,560,086
Staffing
Job Classification
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
Budget
FY 2018
Proposed
Budget
FY 2018
Change $
FY 2018
Salary
UTILITIES
20 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
Budget Reconciliation
Positions Expenditures Revenues
Net
Electric Fund
Prior Year Budget 112.58 174,683,641 153,210,698 21,472,943
Base Adjustments
Adjustments to Costs of Ongoing Activities
Salaries and Benefits Adjustments — 1,069,452 — 1,069,452
Electric Commodity Purchases Expenditure
Adjustment — 5,264,265 2,727,727 2,536,538
Electric Sales Revenue Adjustment (14% rate
increase & changes in consumption levels)— — 1,421,050 (1,421,050)
Equity Transfer to General Fund Adjustment — 719,000 — 719,000
Central Valley Project (CVP) O&M Loan Repayment
Revenue Adjustment — — 104,269 (104,269)
Palo Alto Green Gas Program Sales Revenue
Adjustment — — 19,469 (19,469)
Staff Reallocations within Utility Program Services
and Resource Management Division (0.59) 114,406 — 114,406
ARC Document Solutions (Print & Mail Allocated
Charges Realignment)— (1,890) — (1,890)
Debt Service Expenditure Adjustment — (174,886) — (174,886)
Capital Improvement Funding Adjustments — (2,411,563) (3,990,000) 1,578,437
Transfer to Technology Fund (TE-10001 Utilities
Customer Billing Software Replacement and
TE-05000 Radio Infrastructure Replacement)
— 154,626 — 154,626
Transfer from the General Fund (for Traffic Signal
and Streetlight Electric Costs)— — 186,332 (186,332)
General Fund Cost Allocation Plan Adjustment — 117,990 — 117,990
Dispatch Service Allocated Charges Adjustment — 1,615 — 1,615
General Liability Insurance Allocated Charges
Adjustment — 105,624 — 105,624
Ground Maintenance Allocated Charges
Adjustment —410 —410
Print & Mail Allocated Charges Adjustment — 12,281 — 12,281
Rents & Leases Expenditure Alignment — 163,875 — 163,875
Refuse Allocated Charges Adjustment — 460 — 460
Storm Drain Allocated Charges Adjustment — 413 — 413
Street Cut Allocated Charges Adjustment — (12,680) — (12,680)
Utilities Administration Allocated Charges
Adjustment — 15,078 — 15,078
Utilities Allocated Charges Adjustment — 73,146 — 73,146
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 21
Vehicle Replacement & Maintenance Allocated
Charges Adjustment — (746) — (746)
Adjustments to Costs of Ongoing Activities (0.59)5,210,876 468,847 4,587,403
Total FY 2018 Base Budget 111.99 179,894,517 153,679,545 26,214,972
Budget Proposals
1 Supplemental Pension Trust Fund Contribution — 353,620 — 353,620
2 Electrification Research and Development
Projects — 150,000 — 150,000
3 Electric Consultant Services Contract — 132,000 — 132,000
4 Utilities Compliance Group Workload
Realignment — 54,320 — 54,320
5 Electric Engineering Staffing — 25,949 — 25,949
6 Utilities Customer Service and Part-Time
Staffing Reorganization (0.76) (68,667) — (68,667)
Budget Changes (0.76)647,222 —647,222
Total FY 2018 Proposed Budget 111.23 180,541,739 153,679,545 26,862,194
Budget Reconciliation
Positions Expenditures Revenues
Net
Electric Fund
UTILITIES
22 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
Budget Adjustments
Budget Adjustments Positions Expenditures Revenues
Net
Electric Fund
1 Supplemental Pension Trust Fund Contribution 0.00 353,620 0 353,620
This action establishes a transfer from the Electric Funds to the General Benefits Fund to contribute to the establishment
of a supplemental pension trust fund. Consistent with City Council approval of CMR 7553: Pension Trust Supplemental
Funds Public Agency Retirement Service (PARs), this action transfers $353,620 which represents approximately 10% of
the Electric Funds' annual pension contribution. Establishing this Pension Trust Fund will bolster the City's resilience to
variability associated with pension forecasting, including rate of return changes and increases associated with the
unfunded accrued liability. (Ongoing net costs: $0)
Performance Results
Proactively establishing a pension trust will allow the City to prefund pension costs and begin to address GASB 68 Net
Pension Liabilities (NPL).
2 Electrification Research and Development Projects 0.00 150,000 0 150,000
This action provides funding for electrification related research and development projects. The hot water space heating
program is currently funded at $50,000 per year. The department has been tasked to consider fuel-switching programs
or incentives for residential customers. Staff seeks to increase the rebate funding by $150,000 for water heating and
space heating appliances to pilot new programs and technologies, promote customer adoption, and lower the barriers
of electrification. (Ongoing net costs: $150,000)
Performance Results
Increased participation of this program will promote electrification efforts, contributing to the reduction of carbon
emissions.
3 Electric Consultant Services Contract 0.00 132,000 0 132,000
This action provides funding for the second year of a three-year contract for consultant services in the Electric fund. The
contract is used to augment staff resources and provide specialized knowledge and analysis in the areas of supply
analysis and planning. (Ongoing net costs: $132,000)
Performance Results
Continuing funding of the on-call consulting contracts ensures the use of expert and experienced consultants in a cost
effective manner to respond to electric legislative and regulatory changes, assist with transmission grid planning, and
achieve community’s energy efficiency initiatives such as renewable energy supply and greenhouse gas reductions.
4 Utilities Compliance Group Workload Realignment 0.00 54,320 0 54,320
This action updates the job descriptions and salary ranges for the Utilities Compliance Technician and Utilities
Compliance Technician-Lead classifications. Additional duties including inspection on contract work performed that
complies with General Orders 128 for underground inspection and General Orders 95 for overhead construction ensure
the business needs of the Electric Operations Division and job requirements to perform the work are met. These
changes are subject to the meet and confer process. (Ongoing net costs: $54,320)
Performance Results
The City’s electric distribution system includes 5,930 overhead poles and 2,698 underground locations. Updating the
job description will allow Electric Operations to manage the compliance of General Orders 128 and General Orders 95
through scheduled annual inspections for the entire distribution system, without having to contract out for services.
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 23
5 Electric Engineering Staffing 0.00 25,949 0 25,949
This action eliminates 1.0 Engineering Technician III and adds 1.0 Utility Engineering Estimator-Lead in the Electric
Engineering Division. In addition to providing CAD drawings and cost estimates for customer connection and capital
improvement projects, currently completed by Utility Engineering Estimators, the new lead position will be responsible
for providing training, updating the City's Engineering standards, distributing project assignments, reviewing drawings
and cost estimates, and verifying construction as-built plans. This increased responsibility will create additional capacity
at the Senior Electric Engineer level, allowing them to refocus on addressing the backlog of capital improvement
projects. This action is subject to the meet and confer process. (Ongoing net costs: $25,949)
Performance Results
This reclassification will allow the Electric Engineering Division to reduce the backlog of customer connection and
electric capital improvement projects (CIP) and create capacity at the Senior Engineer’s level to oversee essential CIP
projects, such as upgrading the distribution system, SCADA and communication network, and Smart Grid initiatives.
6 Utilities Customer Service and Part-Time Staffing
Reorganization -0.76 (68,667)0 (68,667)
This action reorganizes and reallocates various part-time employees’ funding department-wide to better align resources
based on workload. This reorganization will reduce the department's overall part-time staffing by a total of 1.76 FTE
and add one 1.0 full-time Customer Service Representative for a net reduction of 0.76 in total full-time equivalent staff
impacting 19 positions. Within this reorganization, impacts to the Electric Fund include: a net increase of 0.32 for two
Journey Level Laborers; an increase of 0.25 for one Customer Service Representative; a net decrease of 0.64 for four
Administrative Specialists I; a decrease of 0.48 for one Staff Specialist; a decrease of 0.24 for one Management
Specialist; and a decrease of 0.02 for one Administrative Specialist II. (Ongoing net savings: $68,667)
Performance Results
The additional Customer Service Representative will enable Utilities to fully staff the new Utilities Customer Service
counter in the Civic Center lobby to assist walk-in customers with Utilities-related services including billing, account
services, and programs. With this additional position, the Utilities Call Center will improve performance and customer
response time.
Budget Adjustments
Budget Adjustments Positions Expenditures Revenues
Net
Electric Fund
CITY OF
PALO
ALTO
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 25
FIBER OPTICS FUND
Description
In 1996, the City built a dark fiber ring around Palo Alto that would be
capable of supporting multiple network developers and service
providers with significant growth potential. The fiber backbone network
was routed to pass by and provide access to key City facilities and the
Palo Alto business community, including research centers and
commercial properties.
Dark fiber optics service consists of providing the fiber optics cabling,
splice points, service connections, and other infrastructure providing
high-capacity bandwidth needed to transport large quantities of data. It
does not include the transmitters, receivers, or data itself, which are
owned and operated by each customer.
Accomplishments
Staff completed initiatives related to the Fiber-to-the-Premises (FTTP) Master Plan and the
Wireless Network Plan with the issuance of request for information for a partnership to
deploy a citywide FTTP network and issuance of request for proposal to add a dedicated
wireless communication network for Public Safety and Utilities.
Initiated the fiber network upgrade project to install new aerial duct and substructure
(conduit and boxes), in addition to fiber backbone cable to increase capacity for sections of
the dark fiber ring that are at or near capacity. This project basically "overlays" new fiber
over existing fiber routes in the network.
Continuing upgrades to inter-departmental dark fiber databases (Engineering, Operations
and Business Development) to fully leverage the physical audit data.
Utilities staff worked closely with other City departments such as the City Attorney,
Development Center, Planning & Community Environment and Public Works on proposed
network upgrades by the wired and wireless telecommunication providers.
UTILITIES
26 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
Initiatives
Ongoing upgrade of City's dark fiber ring to improve network performance and enable
future expansion opportunities for licensing dark fiber to commercial firms and anchor
institutions.
Evaluate new opportunities to expand the existing commercial dark fiber customer base in
other business sectors (e.g. licensing dark fiber to the cellular industry for network backhaul
links for small cell deployments).
Develop a plan to ensure commercial dark fiber customer retention due to anticipated
changes in the market for business broadband services.
Develop a work plan with the Citizen Advisory Committee, Utilities Advisory Commission
and City Council to support next-generation, gigabit-speed broadband.
Develop a ''Dig Once" policy or ordinance to support the expansion of broadband in Palo
Alto and to preserve City streets and other critical infrastructure.
Support network upgrades by Internet service providers to deliver next-generation
broadband.
Goals and Objectives
GOAL 1
Increase the value of fiber utility services to customers.
Objectives:
Provide high-quality and competitively-priced fiber optic utility services to City
departments and commercial customers in the City of Palo Alto.
Manage costs and add new dark fiber license agreements with commercial customers.
GOAL 2
Improve capacity and reliability of the Dark Fiber system.
Objectives:
Ensure sufficient fiber optic cables are available to meet future customer needs.
Make system enhancements to prevent damage from outside sources and improve
reliability.
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 27
Key Performance Measures
Workload Measures
CUSTOMER SATISFACTION
Goal Provide excellent customer service.
Objective Provide high-quality and competitively-priced fiber optic utility services to City
Departments and commercial customers in the City of Palo Alto.
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
FY 2017
Estimated
FY 2018
Proposed
Number of commercial fiber
connections completed 228.00 219.00 240.00 221.00 223.00
Description
This measure shows the growth of the Fiber Enterprise based on customers and
connections. Some customers have multiple fiber connections at various
locations.
Purpose
The purpose of this measure is to add value to companies doing business in Palo
Alto by providing a cost-effective, world class telecommunications system. The
goal is to build out and fully leverage the fiber network to add value to the
business and other communities as needed.
Status
The Fiber Enterprise continues to build out its network to provide more service
options to our ever-expanding customer base. For example, a network was
completed for the Palo Alto Unified School District (PAUSD) that will not only serve
the schools, but provide fiber access to previously unserved areas.
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
FY 2017
Estimated
FY 2018
Proposed
Number of Wholesale re-sellers 11 10 14 12 13
UTILITIES
28 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
Budget Summary
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
Budget
FY 2018
Proposed
Budget
FY 2018
Change $
FY 2018
Change %
Dollars by Division
CIP Fiber Optics Fund 412,667 634,258 2,012,133 1,819,208 (192,925)(9.6)%
Fiber Optics Administration 62,472 177,369 737,271 788,092 50,821 6.9%
Fiber Optics Customer Service 420,523 402,806 1,017,098 1,128,287 111,189 10.9%
Fiber Optics Operations and
Maintenance 1,103,758 1,360,167 520,063 574,757 54,694 10.5%
Total 1,999,420 2,574,599 4,286,565 4,310,344 23,779 0.6%
Dollars by Category
Salary & Benefits
Healthcare 140,208 129,998 151,141 159,128 7,987 5.3%
Other Benefits 20,634 20,292 18,928 24,978 6,050 32.0%
Overtime 28,965 7,863 24,244 24,244 ——%
Pension 111,875 168,158 206,120 231,718 25,598 12.4%
Salary 579,884 805,524 798,838 893,674 94,836 11.9%
Workers' Compensation ——10,082 26,440 16,358 162.2%
Total Salary & Benefits 881,565 1,131,834 1,209,353 1,360,182 150,829 12.5%
Allocated Charges 590,379 475,985 559,303 616,273 56,970 10.2%
Contract Services 99,791 193,240 458,300 458,300 ——%
General Expense 2,999 3,982 14,000 14,000 ——%
Operating Transfers-Out 9,441 103,818 104,032 122,837 18,805 18.1%
Rents & Leases 53,692 71,650 74,577 76,914 2,337 3.1%
Supplies & Material 5,033 6,323 9,000 9,000 ——%
Transfer to Infrastructure —17,141 ————%
Capital Improvement Program 356,520 570,626 1,858,000 1,652,838 (205,162)(11.0)%
Total Dollars by Expense
Category 1,999,420 2,574,599 4,286,565 4,310,344 23,779 0.6%
Revenues
Charges for Services 20,026 25,702 ————%
Charges to Other Funds —5,300 ————%
Net Sales 4,606,321 4,474,071 4,886,920 4,890,810 3,890 0.1%
Operating Transfers-In 169 —————%
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 29
Other Revenue 2,752 1,417 —200,000 200,000 —%
Return on Investments 411,870 443,557 366,400 366,400 ——%
Total Revenues 5,041,137 4,950,048 5,253,320 5,457,210 203,890 3.9%
Positions by Division
CIP Fiber Optics Fund 0.79 0.79 0.79 0.79 ——%
Fiber Optics Customer Service 3.32 2.84 2.90 3.68 0.78 27.07%
Fiber Optics Operations and
Maintenance 3.13 3.13 3.13 3.13 ——%
Total 7.24 6.76 6.82 7.60 0.78 11.50%
Staffing
Job Classification
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
Budget
FY 2018
Proposed
Budget
FY 2018
Change $
FY 2018
Salary
Administrative Associate II ——0.10 0.20 0.10 15,242
Assistant Director Utilities
Customer Support Services 0.20 0.20 0.20 0.20 —33,975
Assistant Director Utilities
Engineering 0.05 0.05 0.05 0.05 —9,745
Business Analyst —0.10 0.20 0.30 0.10 44,922
Chief Sustainability Officer 0.10 —————
Electric Project Engineer 0.05 0.05 0.05 0.05 —7,253
Manager Utilities Compliance 0.10 0.10 0.10 0.10 —16,561
Manager Utilities Credit &
Collection 0.40 0.40 0.40 0.40 —53,082
Manager Utilities Marketing
Services 0.20 0.20 ————
Manager Utilities Program Services ——0.20 0.20 —26,212
Manager Utilities
Telecommunications 1.00 1.00 1.00 1.00 —130,062
Power Engineer 0.40 0.40 0.40 0.40 —54,707
Senior Electrical Engineer 0.05 0.05 0.05 0.05 —8,026
Street Light, Traffic Signal & Fiber
Technician 2.00 2.00 2.00 2.00 —231,402
Budget Summary
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
Budget
FY 2018
Proposed
Budget
FY 2018
Change $
FY 2018
Change %
UTILITIES
30 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
Street Light, Traffic Signal & Fiber-
Lead 1.00 1.00 1.00 1.00 —123,800
Utilities Key Account
Representative 0.60 0.60 0.70 0.80 0.10 93,420
Utilities Locator 0.03 0.03 0.03 0.03 —2,881
Utilities Marketing Program
Administrator 0.10 —————
Sub-total: Full-Time Equivalent
Positions 6.28 6.18 6.48 6.78 0.30 851,290
Temporary/Hourly 0.96 0.58 0.34 0.82 0.48 77,946
Total Positions 7.24 6.76 6.82 7.60 0.78 929,236
Staffing
Job Classification
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
Budget
FY 2018
Proposed
Budget
FY 2018
Change $
FY 2018
Salary
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 31
Budget Reconciliation
Positions Expenditures Revenues
Net
Fiber Optics
Fund
Prior Year Budget 6.82 4,132,432 5,253,320 (1,120,888)
Base Adjustments
Adjustments to Costs of Ongoing Activities
Salaries and Benefits Adjustment — 66,877 — 66,877
Fiber Revenue Adjustment (Rate Increase 3.5%
CPI)— — 131,062 (131,062)
Staff Reallocation within Utility Program Services
and Resource Management Divisions 0.30 45,726 — 45,726
Capital Improvement Funding Adjustments — (55,623) — (55,623)
Transfer to Technology Fund (TE-10001 Utilities
Customer Billing Software Replacement)—565 —565
IT Project Services Staffing (Management
Specialist)0.48 38,226 — 38,226
General Fund Cost Allocation Plan Adjustment — 19,549 — 19,549
General Liability Insurance Allocated Charges
Adjustment —6,881 —6,881
Rents and Leases Expenditure Alignment — 2,337 — 2,337
Utilities Administration Allocated Charges
Adjustment — 31,124 — 31,124
Adjustments to Costs of Ongoing Activities 0.78 155,662 131,062 24,600
Total FY 2018 Base Budget 7.60 4,288,094 5,384,382 (1,096,288)
Budget Proposals
1 Supplemental Pension Trust Fund Contribution — 22,250 — 22,250
2 Fiber Connection for Creek Monitors — — 72,828 (72,828)
Budget Changes —22,250 72,828 (50,578)
Total FY 2018 Proposed Budget 7.60 4,310,344 5,457,210 (1,146,866)
UTILITIES
32 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
Budget Adjustments
Budget Adjustments Positions Expenditures Revenues
Net
Fiber Optics
Fund
1 Supplemental Pension Trust Fund Contribution 0.00 22,250 0 22,250
This action establishes a transfer from the Fiber Optics Fund to the General Benefits Fund to contribute to the
establishment of a supplemental pension trust fund. Consistent with City Council approval of CMR 7553: Pension Trust
Supplemental Funds Public Agency Retirement Service (PARs), this action transfers $22,250 which represents
approximately 10% of the Fiber Optics Fund's annual pension contribution. Establishing this Pension Trust Fund will
bolster the City's resilience to variability associated with pension forecasting, including rate of return changes and
increases associated with the unfunded accrued liability. (Ongoing net costs: $0)
Performance Results
Proactively establishing a pension trust will allow the City to prefund pension costs and begin to address GASB 68 Net
Pension Liabilities (NPL).
2 Fiber Connection for Creek Monitors 0.00 0 72,828 (72,828)
This action recognizes the payment from Storm Drainage Fund for the ongoing costs associated with the fiber optic
connection between storm drain pump stations and creek monitors. The monitors will be installed during the 2017
summer season and funded as part of the Storm Drain System Replacement and Rehabilitation Capital Improvement
Program project. (Ongoing net savings: $72,828)
Performance Results
This action will connect storm drain pump stations and creek monitors to the City's fiber optic network to increase the
accuracy of sensor readings. In the future, real-time camera views during potential flash flood events will be enabled.
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 33
GAS FUND
Description
The municipal natural gas system began operations in 1917 when Palo
Alto acquired a privately-owned gas business. During the early years, gas
was manufactured from coal tar. This was replaced in the 1920s by
natural gas from Pacific Gas and Electric. Today, gas is purchased from
several sources. The Gas Utility services include Crossbore Safety, Gas
Main Replacements, and Home Energy Audits. The Gas utility
infrastructure and its crews maintains an excellent safety record. The gas
fund is responsible for planning, designing, budgeting, and constructing
major capital improvements to the City's gas distribution system.
Accomplishments
Adopted a Carbon Neutral Natural Gas Plan to achieve a carbon neutral gas supply portfolio
with a rate impact not to exceed ten cents per therm.
Completed the design of gas main replacement project GMR 22 to replace approximately
19,440 linear feet of gas main pipelines and 367 service pipelines near the downtown area.
Updated the ten-year gas efficiency goals for 2018 to 2027 with a cumulative ten-year gas
efficiency savings of 5.1% or 1,491,000 therms of the City's projected load.
Completed the development of a computer model to perform complex natural gas
distribution system analyses.
Reduced 286,000 therms of gas or one percent of the City's load in 2016 as a result of
gas energy efficiency programs.
Initiatives
Implement the Carbon Neutral Gas Plan to achieve a carbon neutral gas supply portfolio
and prioritize maximizing carbon reduction within the ten cents per therm impact cap.
Continue to enhance outreach for gas safety awareness to all customer groups, as well as
non-customers, living around a gas pipeline and/or working with utility services in Palo Alto.
Start construction of gas main replacement project GMR 22 to replace approximately 19,440
linear feet of gas main pipelines and 367 service pipelines near the downtown area.
UTILITIES
34 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
Complete the gas cost of service study; the previous gas cost of service study was
conducted in 2012.
Goals and Objectives
GOAL 1
Provide safe and efficient delivery of natural gas to our customers.
Objectives:
Continue repairing 100 percent of laterals damaged by crossbore within 24 hours.
Remove and replace the remaining acrylonitrile butadien styrene (ABS) pipe from the gas
system.
Complete a walking gas leak survey for 50 percent of the City, and a mobile gas leak survey
of services in business districts and 100 percent of the City's gas mains on an annual basis.
GOAL 2
Increase environmental sustainability and promote efficient use of natural gas resources.
Objectives:
Ten-year goal for natural gas efficiency is a reduction in expected gas use of 2.85 percent by
2023.
Reduce the carbon intensity of the gas portfolio in accordance with the Climate Protection
Plan.
Key Performance Measures
GAS LEAKS REPAIRED
Goal Provide safe and efficient delivery of natural gas to customers.
Objective Respond to and repair all Grade 1 gas leaks immediately.
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
FY 2017
Estimated
FY 2018
Proposed
Percentage of Grade 1 leaks
responded to within 24 hours 100.00%100.00%100.00%100.00%100.00%
Description
This measures the total response time to Grade 1 leaks found during the walking
and mobile (vehicle) surveys, and any reported leaks classified as Grade 1. The
City's policy is to respond and repair Grade 1 leaks within 24 hours. Grade 1 leaks
are hazardous leaks that pose an immediate hazard to persons or property and
require continuous action until conditions are no longer hazardous.
Purpose
Leaks are assigned priority gradings according to location, extent of migration,
gas concentration, potential for concentration, ignition sources, and potential
hazard to the public and property. These priority grades are intended only as
guidelines.
Status Utilities Operations responds immediately to Grade 1 leaks. The average repair
time can vary depending on the size and location of the gas leak.
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 35
GAS SAFETY
Goal Provide safe and efficient delivery of natural gas to our customers.
Objective
Complete a walking gas leak survey for 50 percent of the City, and a mobile gas
leak survey of services in business districts and 100 percent of the City's gas
mains on an annual basis.
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
FY 2017
Estimated
FY 2018
Proposed
Percentage of gas system surveyed
by walking 100.00%100.00%100.00%100.00%100.00%
Percentage of gas system surveyed
by mobile (vehicle)100.00%100.00%100.00%100.00%100.00%
Description
A walking survey is conducted to check for gas leaks on service/gas meters and
covers one-half of the City (approximately 105 miles of gas mains and 36 miles of
service lines) every year, so that the entire City's gas service system can be
reviewed in a two-year period. Department of Transportation (DOT) regulations
require a survey of the entire City once every five years. The City of Palo Alto gas
leak survey exceeds the DOT requirements. In addition to walking survey, a mobile
(vehicle) survey of all gas mains and some gas service lines (services in the
business district) are conducted annually.
Purpose To ensure the safety of all who live and work in Palo Alto and to comply with
Federal (Department of Transportation) requirements.
Status The department is meeting the requirements and repairing all discovered gas
leaks in a timely manner.
INCREASE ENVIRONMENTAL SUSTAINABILITY AND PROMOTE EFFICIENT
USE OF NATURAL GAS RESOURCES
Goal Support environmental sustainability and promote efficient use of natural gas
resources.
Objective Ten-year goals for natural gas are a reduction in expected gas use of 2.85 percent
by 2023 (2013 base year).
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
FY 2017
Estimated
FY 2018
Proposed
Natural gas savings achieved
annually through efficiency
programs
225,817.00 286,317.00 158,000.00 200,000.00 287,000.00
Description
The department measures specific savings achieved from the installation of
natural gas efficiency improvements, which we track through our energy efficiency
incentive programs. We can also track overall savings by customer class. Much of
the non-residential savings were achieved through our third party contractors who
help large customer give their buildings a tune-up known as retrocommissioning.
Purpose
The carbon intensity of the natural gas portfolio is a function of where and how the
gas is acquired and how much of it is burned in use. Improving gas efficiency
directly reduces the gas-related carbon footprint in Palo Alto.
Status
FY 2016 gas efficiency savings were more than double of the yearly goal. As the
cost of gas continued to decrease, we anticipate decline in large commercial gas
savings projects.
UTILITIES
36 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
Workload Measures
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
FY 2017
Estimated
FY 2018
Proposed
Number of Customer Accounts
(Gas)23,461 23,467 23,659 23,460 23,460
Number of gas leaks repaired 100 109 100 82 75
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 37
Budget Summary
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
Budget
FY 2018
Proposed
Budget
FY 2018
Change $
FY 2018
Change %
Dollars by Division
CIP Gas Fund 7,460,806 3,298,187 13,828,805 5,223,861 (8,604,944)(62.2)%
Gas Administration 9,245,419 9,729,505 12,213,114 12,279,959 66,845 0.5%
Gas Customer Service 1,195,633 1,364,272 1,583,952 1,693,417 109,465 6.9%
Gas Demand Side Management 631,749 565,553 1,471,467 1,593,290 121,823 8.3%
Gas Engineering (Operating)369,154 425,602 528,730 567,176 38,446 7.3%
Gas Operations and Maintenance 4,403,054 4,158,721 4,979,614 5,550,009 570,395 11.5%
Gas Resource Management 11,074,833 8,599,212 13,060,873 16,185,726 3,124,854 23.9%
Total 34,380,649 28,141,053 47,666,554 43,093,438 (4,573,116)(9.6)%
Dollars by Category
Salary & Benefits
Healthcare 898,497 819,155 985,191 1,053,572 68,381 6.9%
Other Benefits 131,774 136,962 120,560 149,353 28,794 23.9%
Overtime 316,690 325,581 188,249 188,249 ——%
Pension 837,860 1,116,780 1,389,351 1,511,446 122,095 8.8%
Retiree Medical 587,151 543,452 594,708 625,662 30,954 5.2%
Salary 4,268,909 3,603,977 5,238,544 5,406,444 167,900 3.2%
Workers' Compensation 45,111 64,978 62,988 173,330 110,342 175.2%
Total Salary & Benefits 7,085,992 6,610,886 8,579,590 9,108,056 528,466 6.2%
Allocated Charges 2,321,250 2,550,031 4,173,283 3,934,577 (238,707)(5.7)%
Contract Services 841,287 573,304 1,446,000 1,446,000 ——%
Debt Service 265,519 248,930 802,615 802,615 ——%
Equity Transfer 5,730,000 6,194,000 6,726,000 6,733,000 7,000 0.1%
Facilities & Equipment ——19,790 19,790 ——%
General Expense 522,091 348,019 780,361 780,274 (87)(0.0)%
Operating Transfers-Out 150,635 375,638 484,066 899,639 415,573 85.9%
Rents & Leases 512,509 688,649 709,958 728,615 18,657 2.6%
Supplies & Material 428,429 445,378 498,034 497,216 (818)(0.2)%
Transfer to Infrastructure —100,119 ————%
Utility Purchase 10,519,185 8,127,485 12,337,000 15,586,773 3,249,773 26.3%
UTILITIES
38 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
Capital Improvement Program 6,003,751 1,878,613 11,109,857 2,556,883 (8,552,974)(77.0)%
Total Dollars by Expense
Category 34,380,649 28,141,053 47,666,554 43,093,438 (4,573,116)(9.6)%
Revenues
Charges for Services 19,698 20,982 20,000 20,000 ——%
Charges to Other Funds 96,316 216,628 208,104 95,587 (112,517)(54.1)%
Net Sales 29,830,007 29,021,397 34,605,526 34,740,465 134,939 0.4%
Operating Transfers-In 8,221 —————%
Other Revenue 787,248 984,314 1,030,000 1,060,510 30,510 3.0%
Return on Investments 499,912 448,615 526,300 526,300 ——%
Total Revenues 31,241,401 30,691,936 36,389,930 36,442,862 52,932 0.1%
Positions by Division
CIP Gas Fund 17.10 17.10 17.10 15.80 (1.30)(7.63)%
Gas Customer Service 9.61 8.41 8.78 9.03 0.25 2.84%
Gas Demand Side Management 0.34 0.34 1.34 1.94 0.60 44.78%
Gas Engineering (Operating)1.40 1.15 1.40 1.40 ——%
Gas Operations and Maintenance 22.07 22.38 22.43 23.98 1.55 6.91%
Gas Resource Management 2.28 2.77 1.65 0.96 (0.69)(41.82)%
Total 52.80 52.16 52.70 53.11 0.41 0.78%
Staffing
Job Classification
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
Budget
FY 2018
Proposed
Budget
FY 2018
Change $
FY 2018
Salary
Account Specialist 0.26 0.26 0.23 0.23 0.01 16,349
Administrative Associate II 0.65 0.65 0.75 0.85 0.10 64,778
Assistant Director Administrative
Services 0.10 0.10 0.05 0.05 —10,057
Assistant Director Utilities
Customer Support Services 0.20 0.20 0.20 0.20 —33,975
Assistant Director Utilities
Engineering 0.20 0.20 0.20 0.20 —38,979
Budget Summary
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
Budget
FY 2018
Proposed
Budget
FY 2018
Change $
FY 2018
Change %
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 39
Assistant Director Utilities
Operations 0.15 0.15 0.15 0.15 —28,520
Assistant Director Utilities/Resource
Management 0.25 0.25 0.25 0.25 —43,493
Business Analyst 1.37 0.83 1.28 1.48 0.20 221,614
Cathodic Protection Technician
Assistant 1.00 1.00 1.00 1.00 —102,943
Cathodic Technician 1.00 1.00 1.00 1.00 —126,380
Cement Finisher 0.25 0.25 0.25 0.68 0.43 62,836
Contracts Administrator 0.10 0.10 0.10 0.10 —11,367
Coordinator Utilities Projects 1.51 1.51 1.26 1.26 —140,062
Customer Service Representative 1.62 1.50 1.62 1.87 0.25 141,244
Customer Service Specialist 0.68 0.50 0.68 0.68 —56,481
Customer Service Specialist-Lead 0.58 0.50 0.58 0.58 —51,521
Engineer 2.00 2.00 2.00 2.00 —256,225
Engineering Manager - Electric 0.15 0.15 0.15 0.15 —26,854
Engineering Manager - WGW 0.33 0.33 0.33 0.33 —51,885
Engineering Technician III 0.70 0.70 0.70 0.70 —67,057
Equipment Operator 0.43 0.43 0.43 —(0.43)—
Gas and Water Meter Measurement
and Control Technician ———3.20 3.20 328,817
Gas and Water Meter Measurement
and Control Technician - Lead ———0.80 0.80 87,963
Gas System Technician 2.00 2.00 ————
Gas System Technician II 0.90 0.90 2.90 —(2.90)—
Heavy Equipment Operator 2.57 2.57 2.52 2.52 —242,731
Heavy Equipment Operator -
Install/Repair ——0.65 0.65 —68,953
Inspector, Field Services 1.17 1.17 1.42 1.42 —146,794
Maintenance Mechanic-Welding 1.00 1.00 1.00 1.00 —102,838
Manager Customer Service —0.33 0.33 0.33 —43,367
Manager Customer Service and
Meter Reading 0.33 —————
Manager Treasury, Debt &
Investments ——0.10 0.10 —13,832
Manager Utilities Compliance 0.25 0.25 0.25 0.25 —41,402
Staffing
Job Classification
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
Budget
FY 2018
Proposed
Budget
FY 2018
Change $
FY 2018
Salary
UTILITIES
40 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
Manager Utilities Credit &
Collection 0.15 0.15 0.15 0.15 —19,906
Manager Utilities Marketing
Services 0.20 0.20 ————
Manager Utilities Operations WGW 0.20 0.20 0.20 0.20 —31,683
Manager Utilities Program Services ——0.20 0.20 —26,212
Meter Reader 1.98 1.92 1.98 1.98 —140,472
Meter Reader-Lead 0.33 0.32 0.33 0.33 —25,046
Principal Business Analyst —0.33 0.33 0.33 —46,970
Principal Management Analyst 0.33 —————
Program Assistant I 0.33 0.33 0.33 0.33 —25,516
Project Engineer 1.00 1.00 1.00 1.00 —137,889
Resource Planner 1.15 0.95 0.65 (0.05)(0.70)(6,862)
Restoration Lead 0.43 0.43 0.43 0.43 —43,199
SCADA Technologist 0.20 0.20 0.20 0.20 —29,406
Senior Business Analyst 0.66 0.66 0.66 0.66 —84,153
Senior Engineer 2.10 2.70 2.70 2.70 —377,017
Senior Management Analyst 0.05 0.05 ————
Senior Mechanic 0.33 0.33 0.33 0.33 —35,630
Senior Project Engineer 0.60 —————
Senior Resource Planner 0.46 0.77 0.45 0.46 0.01 68,255
Senior Technologist 0.29 —————
Senior Utilities Field Service
Representative 0.41 0.41 0.41 0.41 —45,890
Substation Electrician 0.10 0.10 0.10 0.10 —12,621
Supervisor Inspection Services 0.29 0.29 ————
Utilities Engineer Estimator 0.85 0.85 0.85 0.85 —102,347
Utilities Field Services
Representative 1.75 1.75 1.75 1.75 —183,112
Utilities Install Repair-Lead-Welding
Certified 1.30 1.30 1.30 1.30 —148,146
Utilities Install Repair-Welding
Certified 1.95 1.95 1.95 1.95 —206,832
Utilities Install/Repair 4.45 4.45 3.85 3.85 —392,820
Utilities Install/Repair Assistant 0.65 0.65 0.65 0.65 —56,249
Staffing
Job Classification
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
Budget
FY 2018
Proposed
Budget
FY 2018
Change $
FY 2018
Salary
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 41
Utilities Install/Repair-Lead 1.98 1.98 1.98 1.98 —220,481
Utilities Key Account
Representative 0.35 0.35 0.45 0.50 0.05 58,388
Utilities Locator 0.29 0.29 0.29 0.29 —27,852
Utilities Marketing Program
Administrator 0.35 0.35 0.70 1.00 0.30 110,929
Utilities Safety Officer 0.20 0.20 0.20 0.20 —22,402
Utilities Supervisor 2.08 2.08 2.37 2.37 —291,064
Water System Operator II 0.66 0.66 0.66 0.66 —63,547
Sub-total: Full-Time Equivalent
Positions 50.20 49.03 49.83 51.14 1.31 5,656,490
Temporary/Hourly 2.60 3.13 2.88 1.97 (0.91)115,208
Total Positions 52.80 52.16 52.70 53.11 0.41 5,771,697
Staffing
Job Classification
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
Budget
FY 2018
Proposed
Budget
FY 2018
Change $
FY 2018
Salary
UTILITIES
42 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
Budget Reconciliation
Positions Expenditures Revenues
Net
Gas Fund
Prior Year Budget 52.70 44,949,192 36,389,930 8,559,262
Base Adjustments
Adjustments to Costs of Ongoing Activities
Salaries and Benefits Adjustments — 429,099 — 429,099
Gas Commodity Purchases Expenditure
Adjustment — 3,249,773 — 3,249,773
Gas Sales Revenue Adjustment (Rate Increase,
Consumption Decrease, Commodity Cost
Decrease)
— — 374,939 (374,939)
Palo Alto Green Gas Program Sales to City
Revenue Adjustment — — (352,517) 352,517
Staff Reallocations within Utility Program Services
and Resource Management Division (0.04) 12,418 — 12,418
Equity Transfer to General Fund Expenditure
Adjustment —7,000 —7,000
IT Project Services Staffing (Management
Specialist)(0.48) (38,226) — (38,226)
Capital Improvement Funding Adjustments — (5,693,177) 30,510 (5,723,687)
Transfer to Technology Fund (TE-10001 Utilities
Customer Billing Software Replacement and
TE-05000 Radio Infrastructure Replacement)
— 109,303 — 109,303
ARC Document Solutions (Print & Mail Allocated
Charges Realignment)— (818) — (818)
General Fund Cost Allocation Plan Adjustment — (351,321) — (351,321)
Dispatch Service Allocated Charges Adjustment — 29,171 — 29,171
General Liability Insurance Allocated Charges
Adjustment — 45,112 — 45,112
Ground Maintenance Allocated Charges
Adjustment —77—77
Landfill Allocated Charges Adjustment — (23,400) — (23,400)
Print & Mail Allocated Charges Adjustment — 2,222 — 2,222
Rents & Leases Expenditure Alignment — 18,657 — 18,657
Storm Drain Allocated Charges Adjustment — 8 — 8
Street Cut Allocated Charges Adjustment — 28,928 — 28,928
Utilities Administration Allocated Charges
Adjustment — 80,301 — 80,301
Utilities Allocated Charges Adjustment — (1,422) — (1,422)
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 43
Vehicle Replacement & Maintenance Allocated
Charges Adjustment — (33,485) — (33,485)
Adjustments to Costs of Ongoing Activities (0.52)(2,129,780)52,932 (2,182,712)
Total FY 2018 Base Budget 52.18 42,819,412 36,442,862 6,376,550
Budget Proposals
1 Supplemental Pension Trust Fund Contribution — 148,937 — 148,937
2 Gas and Water Meter Shop Reorganization 1.10 109,117 — 109,117
3 Utilities Customer Service and Part-Time
Staffing Reorganization (0.17) 14,875 — 14,875
4 Pavement Restoration Staffing — 1,097 — 1,097
Budget Changes 0.93 274,026 —274,026
Total FY 2018 Proposed Budget 53.11 43,093,438 36,442,862 6,650,576
Budget Reconciliation
Positions Expenditures Revenues
Net
Gas Fund
UTILITIES
44 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
Budget Adjustments
Budget Adjustments Positions Expenditures Revenues
Net
Gas Fund
1 Supplemental Pension Trust Fund Contribution 0.00 148,937 0 148,937
This action establishes a transfer from the Gas Funds to the General Benefits Fund to contribute to the establishment of
a supplemental pension trust fund. Consistent with City Council approval of CMR 7553: Pension Trust Supplemental
Funds Public Agency Retirement Service (PARs), this action transfers $148,937 which represents approximately 10% of
the Gas Funds' annual pension contribution. Establishing this Pension Trust Fund will bolster the City's resilience to
variability associated with pension forecasting, including rate of return changes and increases associated with the
unfunded accrued liability. (Ongoing net costs: $0)
Performance Results
Proactively establishing a pension trust will allow the City to prefund pension costs and begin to address GASB 68 Net
Pension Liabilities (NPL).
2 Gas and Water Meter Shop Reorganization 1.10 109,117 0 109,117
This action realigns the structure of the existing Gas and Water Meter shops by consolidating into one shop. This action
eliminates the isolated job classifications and adds new job classifications to reflect the merged team. By combining
these two meter shops, the City will be better positioned to respond to customer needs and unforeseeable workload
changes. This will make the City's meter shop more agile and flexible in its continued service. The proposed
consolidation is outlined below:
- Eliminate 3.0 Gas Meter Technicians II and add 3.0 Gas and Water Measurement and Control Technicians;
- Eliminate 1.0 Water System Operator I and add 1.0 Gas and Water Measurement and Control Technician; and
- Eliminate 1.0 Engineering Technician III and add 1.0 Gas and Water Measurement and Control Technician - Lead.
This action is subject to the meet and confer process. (Ongoing net costs: $109,117)
Performance Results
With this reorganization, Utilities will be able to reduce the risk of injuries, expand career opportunities, and reduce
backlog of meter replacement and maintenance work for both the Gas and Water Meter Shops.
3 Utilities Customer Service and Part-Time Staffing
Reorganization -0.17 14,875 0 14,875
This action reorganizes and reallocates various part-time employees’ funding department-wide to better align resources
based on workload. This reorganization will reduce the department's overall part-time staffing by a total of 1.76 FTE
and add one 1.0 full-time Customer Service Representative for a net reduction of 0.76 in total full-time equivalent staff
impacting 19 positions. Within this reorganization, impacts to the Gas Fund include: a net increase of 0.48 for three
Journey Level Laborers; an increase of 0.25 for one Customer Service Representative; a net decrease of 0.64 for three
Maintenance Assistants; a net decrease of 0.24 for four Administrative Specialists - I; and a decrease of 0.02 for one
Administrative Specialist - II. (Ongoing net costs: $14,875)
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 45
Performance Results
The additional Customer Service Representative will enable Utilities to fully staff the new Utilities Customer Service
counter in the Civic Center lobby to assist walk-in customers with Utilities-related services including billing, account
services, and programs. With this additional position, the Utilities Call Center will improve performance and customer
response time.
4 Pavement Restoration Staffing 0.00 1,097 0 1,097
This action reclassifies 1.0 Equipment Operator to 1.0 Cement Finisher in the Water-Gas-Wastewater Division. The
division requires two Cement Finishers in its Restoration Crew to keep pace with new construction and capital
improvement projects which will continue at current levels for the foreseeable future. With the crew’s sole Cement
Finisher eligible for retirement, this reclassification ensures continuity of operations and succession planning. (Ongoing
net costs: $1,097)
Performance Results
This reclassification will allow Operations to restore pavement and concrete in a timely manner.
Budget Adjustments
Budget Adjustments Positions Expenditures Revenues
Net
Gas Fund
CITY OF
PALO
ALTO
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 47
WASTEWATER
COLLECTION FUND
Description
In 1898, Palo Alto approved $28,000 in bond money to fund construction
of the City's first sewer network, which was completed in 1899. Private
cesspools and privies were banned, and the City Health Officer had
residents connected to the sewer system within a few years.
Wastewater Collection's staff is responsible for design, construction,
operation, and maintenance of approximately 216 miles of sewer mains
and over 18,000 City-owned laterals. Staff continues overlapping the
design and construction elements of rehabilitation and augmentation
projects. Wastewater Collection's priorities are: maintaining
infrastructure reliability; identifying problems in mains and service
laterals through expanded use of video technology; complying with all
regulatory requirements; and maintaining its excellent safety record.
Accomplishments
Surveyed, inspected, and cleaned 3,397 out of 18,141 City-owned sewer laterals. On average,
the City surveys and inspects between 3,200 - 4,200 per year.
Repaired and/or replaced over 202 laterals with structural damage.
The construction of sanitary sewer replacement project SSR 24/25/26 will be completed by
March 2017. Approximately 42,000 linear feet of sanitary sewer mains, 780 sewer laterals,
and 120 manholes in University South, Professorville, and Old Palo Alto neighborhoods will
be replaced
The construction of sanitary sewer replacement project SSR 27 will be completed by April
2017. Approximately 15,753 linear feet of wastewater main pipelines, 259 lateral pipelines,
and 46 manholes in Downtown North, Crescent Park, Community Center, and Duveneck/St.
Francis neighborhoods will be replaced.
UTILITIES
48 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
Initiatives
Continue customer and plumber safety outreach about the importance of calling Utilities
prior to clearing a sewer lateral to confirm no risk of crossbore.
Reduce the total number of Sanitary Sewer Overflows (SSOs) by 5% annually per State
Water Resources Control Board's requirement.
Conduct a cost of service study for wastewater collection.
Request proposals and procure a contractor to do Phase II of the Crossbore program to
address high priority laterals.
Replace aging sewer combination cleaning units with new units.
Start the design of sanitary sewer replacement project SSR 28 to replace approximately
21,000 LF of wastewater main pipelines in Charleston Meadows and Leland Manor/Garland
neighborhoods.
Goals and Objectives
GOAL 1
Maintain and provide reliable wastewater services to customers.
Objectives:
Clean and maintain 100 percent of the sewer mains in commercial areas on a quarterly basis.
Clean and video a minimum of 17 percent of the City-owned laterals annually, to comply with
City's Sewer Overflow Reduction Plan.
Maintain a low level of inflow and infiltration of saltwater into the City's wastewater system.
Maintain the integrity of the City's wastewater collection system by replacing mains and
laterals as identified in the Wastewater Collection System Rehabilitation/Augmentation
Capital Improvement Project plan.
Minimize Sanitary Sewer Overflows and stoppages.
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 49
Key Performance Measures
Workload Measures
MAINTAIN AND PROVIDE RELIABLE SERVICES
Goal Maintain and provide a reliable wastewater system to customers.
Objective
Inspect and clean 100 percent of the sewer mains in commercial areas on a
quarterly basis. Clean and video a minimum of 17 percent of the City-owned
laterals annually to comply with the City's Sewer Overflow Reduction Plan.
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
FY 2017
Estimated
FY 2018
Proposed
Number of miles of sewer lines
cleaned/treated in a fiscal year 128.00 133.00 135.00 135.00 145.00
Percentage of sewer laterals
inspected annually 22.00%17.00%19.00%19.00%19.00%
Description
The purpose of the Sewer System Management Plan (SSMP) is to maintain and
improve the condition of the collection system infrastructure; control infiltration
and provide appropriate sewer capacity; and minimize the number and impact of
sanitary sewer overflows. The goal is to perform sewer main cleaning of the entire
collection system every 30 months (81.6 miles per year). This measures
inspections and maintenance of 17 percent of City-owned laterals annually using
closed-circuit television (CCTV) inspection data, including results of the on-going
crossbore lateral inspection program, to target sewer mains and lower laterals for
rehabilitation and replacement.
Purpose
To prevent blockage, sewer overflows, and to comply with the City's Sanitary
Sewer Management Plan (SSMP), all the City's sewer mains must be cleaned
within 30 months.
Status
The City is meeting the objectives of its Sanitary Sewer Management Plan, and
through the implementation of an aggressive sewer main cleaning, the number of
blockages and overflows have decreased. WGW Operations is on target to
complete inspection of 17% or 3,108 laterals of 18,141 in the City.
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
FY 2017
Estimated
FY 2018
Proposed
Number of Customer Accounts
(Wastewater)22,241 22,016 22,016 22,174 22,010
Number of sewage overflows in a
fiscal year 96 95 64 65 65
Percent of sewage spill and line
blockage responses within two
hours
97.00%100.00%100.00%100.00%100.00%
Percent of surveyed residents rating
the quality of the Sewer Service as
good/excellent
83.00%88.00%88.00%88.00%88.00%
Percent of miles of sewer lines
replaced 3.00%1.50%1.94%1.20%1.50%
UTILITIES
50 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
Budget Summary
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
Budget
FY 2018
Proposed
Budget
FY 2018
Change $
FY 2018
Change %
Dollars by Division
CIP Wastewater Collection Fund 3,090,810 5,300,945 8,720,205 3,895,185 (4,825,020)(55.3)%
Wastewater Collection
Administration 1,454,325 1,962,889 2,616,917 2,845,968 229,051 8.8%
Wastewater Collection Customer
Service 112,697 255,586 271,245 301,679 30,435 11.2%
Wastewater Collection Engineering
(Operating)318,560 347,062 447,371 480,976 33,605 7.5%
Wastewater Collection Operations
and Maintenance 11,423,074 11,405,108 13,430,249 13,354,992 (75,258)(0.6)%
Total 16,399,467 19,271,590 25,485,987 20,878,800 (4,607,187)(18.1)%
Dollars by Category
Salary & Benefits
Healthcare 539,838 519,724 633,919 667,936 34,018 5.4%
Other Benefits 70,690 67,991 60,712 76,568 15,857 26.1%
Overtime 354,859 271,686 147,159 147,159 ——%
Pension 469,096 606,146 777,626 838,155 60,529 7.8%
Retiree Medical 124,133 124,755 136,521 143,626 7,105 5.2%
Salary 2,457,005 2,332,607 2,887,948 2,968,946 80,997 2.8%
Workers' Compensation 18,019 22,645 35,739 95,475 59,737 167.1%
Total Salary & Benefits 4,033,641 3,945,556 4,679,624 4,937,866 258,243 5.5%
Allocated Charges 736,578 936,248 2,734,290 2,605,712 (128,578)(4.7)%
Contract Services 86,187 171,722 247,640 247,640 ——%
Debt Service 50,663 46,777 129,001 129,001 ——%
Facilities & Equipment ——3,000 3,000 ——%
General Expense 75,022 47,240 122,160 122,160 ——%
Operating Transfers-Out 119,173 338,264 285,689 393,160 107,471 37.6%
Rents & Leases 276,107 373,180 390,039 399,647 9,608 2.5%
Supplies & Material 314,451 320,224 386,120 385,618 (502)(0.1)%
Transfer to Infrastructure —57,499 ————%
Utility Purchase 8,776,795 8,769,780 9,855,026 9,915,579 60,553 0.6%
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 51
Capital Improvement Program 1,930,851 4,265,100 6,653,398 1,739,417 (4,913,981)(73.9)%
Total Dollars by Expense
Category 16,399,467 19,271,590 25,485,987 20,878,800 (4,607,187)(18.1)%
Revenues
Charges for Services 23,042 20,972 10,000 10,000 ——%
Charges to Other Funds 30,107 30,107 30,107 30,107 ——%
Net Sales 15,494,811 16,296,938 17,947,509 17,957,113 9,604 0.1%
Operating Transfers-In 4,467 —————%
Other Revenue 1,251,859 511,434 1,046,000 1,057,820 11,820 1.1%
Return on Investments 323,123 299,684 266,500 266,500 ——%
Total Revenues 17,127,410 17,159,136 19,300,116 19,321,540 21,424 0.1%
Positions by Division
CIP Wastewater Collection Fund 13.00 12.52 12.52 12.52 ——%
Wastewater Collection Customer
Service 2.47 3.06 2.19 2.22 0.04 1.60%
Wastewater Collection Engineering
(Operating)1.40 1.15 1.40 1.40 ——%
Wastewater Collection Operations
and Maintenance 12.70 13.02 13.06 12.86 (0.20)(1.53)%
Total 29.57 29.74 29.17 29.00 (0.16)(0.56)%
Staffing
Job Classification
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
Budget
FY 2018
Proposed
Budget
FY 2018
Change $
FY 2018
Salary
Account Specialist 0.25 0.25 0.23 0.23 0.01 16,349
Administrative Associate II 0.40 0.40 0.40 0.40 —30,484
Assistant Director Utilities
Engineering 0.15 0.15 0.15 0.15 —29,234
Assistant Director Utilities
Operations 0.10 0.10 0.10 0.10 —19,013
Associate Engineer 0.50 0.50 ————
Business Analyst 0.75 0.50 0.75 0.75 —112,305
Budget Summary
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
Budget
FY 2018
Proposed
Budget
FY 2018
Change $
FY 2018
Change %
UTILITIES
52 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
Cement Finisher 0.50 0.50 0.50 0.76 0.26 70,229
Contracts Administrator 0.05 0.05 0.05 0.05 —5,684
Coordinator Utilities Projects 1.35 1.35 1.10 1.10 —122,277
Customer Service Representative 1.20 1.38 1.20 1.45 0.25 109,521
Customer Service Specialist —0.46 ————
Customer Service Specialist-Lead 0.25 0.46 0.25 0.25 —22,207
Engineer 1.00 1.00 1.00 1.00 —128,113
Engineering Manager - Electric 0.15 0.15 0.15 0.15 —26,854
Engineering Manager - WGW 0.34 0.34 0.34 0.34 —53,457
Engineering Technician III 0.45 0.45 0.45 0.45 —43,108
Equipment Operator 0.26 0.26 0.26 —(0.26)—
Heavy Equipment Operator 2.13 2.13 0.23 0.23 —22,154
Heavy Equipment Operator -
Install/Repair ——3.15 3.15 —334,158
Industrial Waste Investigator ——0.50 0.50 —53,193
Inspector, Field Services 1.43 1.43 1.68 1.68 —173,672
Maintenance Mechanic-Welding 0.20 0.20 0.20 0.20 —20,568
Manager Utilities Credit &
Collection 0.15 0.15 0.15 0.15 —19,906
Manager Utilities Operations WGW 0.30 0.30 0.30 0.30 —47,524
Program Assistant I 0.34 0.34 0.34 0.34 —26,289
Project Engineer 2.00 2.00 2.00 2.00 —275,777
Restoration Lead 0.26 0.26 0.26 0.26 —26,120
Senior Engineer 1.15 1.30 1.30 1.30 —186,558
Senior Mechanic 0.33 0.33 0.33 0.33 —35,630
Senior Project Engineer 0.15 —————
Supervisor Inspection Services 0.42 0.42 ————
Utilities Engineer Estimator 0.47 0.47 0.47 0.47 —56,592
Utilities Field Services
Representative 1.25 1.25 1.25 1.25 —130,794
Utilities Install Repair-Lead-Welding
Certified 0.24 0.24 0.24 0.24 —27,350
Utilities Install Repair-Welding
Certified 0.36 0.36 0.36 0.36 —38,184
Utilities Install/Repair 5.50 5.50 4.25 4.25 —433,632
Staffing
Job Classification
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
Budget
FY 2018
Proposed
Budget
FY 2018
Change $
FY 2018
Salary
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 53
Utilities Install/Repair-Lead 2.00 2.00 2.00 2.00 —222,708
Utilities Locator 0.39 0.39 0.39 0.39 —37,456
Utilities Safety Officer 0.10 0.10 0.10 0.10 —11,201
Utilities Supervisor 1.30 1.30 1.72 1.72 —180,934
Sub-total: Full-Time Equivalent
Positions 28.17 28.77 28.15 28.40 0.26 3,149,235
Temporary/Hourly 1.40 0.98 1.02 0.60 (0.42)37,812
Total Positions 29.57 29.74 29.17 29.00 (0.16)3,187,047
Staffing
Job Classification
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
Budget
FY 2018
Proposed
Budget
FY 2018
Change $
FY 2018
Salary
UTILITIES
54 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
Budget Reconciliation
Positions Expenditures Revenues
Net
Wastewater
Collection
Fund
Prior Year Budget 29.17 23,434,612 19,300,115 4,134,497
Base Adjustments
Adjustments to Costs of Ongoing Activities
Salaries and Benefits Adjustments — 247,300 — 247,300
Wastewater Treatment Cost Adjustment — 60,553 — 60,553
Rents and Leases Expenditure Adjustment —9,608 —9,608
Wastewater Treatment Sales to City Revenue
Adjustment — — 9,604 (9,604)
Capital Improvement Funding Adjustments — (2,939,994) 11,821 (2,951,815)
Transfer to Technology Fund (TE-10001 Utilities
Customer Billing Software Replacement and
TE-05000 Radio Infrastructure Replacement)
— 90,425 — 990,425
ARC Document Solutions (Print & Mail Allocated
Charges Realignment)— (502) — (502)
General Fund Cost Allocation Plan Adjustment† — 162,517 — 162,517
Dispatch Service Allocated Charges Adjustment — 11,341 — 11,341
General Liability Insurance Allocated Charges
Adjustment — 24,849 — 24,849
Landfill Allocated Charges Adjustment — (1,840) — (1,840)
Print & Mail Allocated Charges Adjustment — 1,669 — 1,669
Refuse Allocated Charges Adjustment — 4,255 — 4,255
Street Cut Fee Allocated Charges Adjustment — (249,270) — (249,270)
Utilities Administration Allocated Charges
Adjustment — (791) — (791)
Utilities Allocated Charges Adjustment — 253 — 253
Vehicle Replacement & Maintenance Allocated
Charges Adjustment — (70,507) — (70,507)
Adjustments to Costs of Ongoing Activities —(2,650,134)21,425 (2,671,559)
Total FY 2018 Base Budget 29.17 20,784,478 19,321,540 1,462,938
Budget Proposals
1 Supplemental Pension Trust Fund Contribution — 83,380 — 83,380
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 55
2 Utilities Customer Service and Part-Time
Staffing Reorganization (0.17) 10,279 — 10,279
3 Pavement Restoration Staffing — 663 — 663
Budget Changes (0.17)94,322 —94,322
Total FY 2018 Proposed Budget 29.00 20,878,800 19,321,540 1,557,260
Budget Adjustments
Budget Adjustments Positions Expenditures Revenues
Net
Wastewater
Collection
Fund
1 Supplemental Pension Trust Fund Contribution 0.00 83,380 0 83,380
This action establishes a transfer from the Wastewater Collection Fund to the General Benefits Fund to contribute to the
establishment of a supplemental pension trust fund. Consistent with City Council approval of CMR 7553: Pension Trust
Supplemental Funds Public Agency Retirement Service (PARs), this action transfers $83,380 which represents
approximately 10% of the Wastewater Collection Fund's annual pension contribution. Establishing this Pension Trust
Fund will bolster the City's resilience to variability associated with pension forecasting, including rate of return changes
and increases associated with the unfunded accrued liability. (Ongoing net costs: $0)
Performance Results
Proactively establishing a pension trust will allow the City to prefund pension costs and begin to address GASB 68 Net
Pension Liabilities (NPL).
Budget Reconciliation
Positions Expenditures Revenues
Net
Wastewater
Collection
Fund
UTILITIES
56 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
2 Utilities Customer Service and Part-Time Staffing
Reorganization -0.17 10,279 0 10,279
This action reorganizes and reallocates various part-time employees’ funding department-wide to better align resources
based on workload. This reorganization will reduce the department's overall part-time staffing by a total of 1.76 FTE
and add one 1.0 full-time Customer Service Representative for a net reduction of 0.76 in total full-time equivalent staff
impacting 19 positions. Within this reorganization, impacts to the Wastewater Collection Fund include: an increase of
0.25 for one Customer Service Representative; an increase of 0.16 for one Journey Level Laborer - H; a net decrease of
0.48 for three Maintenance Assistants - H; a net decrease of 0.08 for three Administrative Specialists I; and a decrease
of 0.02 for one Administrative Specialist II - H. (Ongoing net costs: $10,279)
Performance Results
The additional Customer Service Representative will enable Utilities to fully staff the new Utilities Customer Service
counter in the Civic Center lobby to assist walk-in customers with Utilities-related services including billing, account
services, and programs. With this additional position, the Utilities Call Center will improve performance and customer
response time.
3 Pavement Restoration Staffing 0.00 663 0 663
This action reclassifies 1.0 Equipment Operator to 1.0 Cement Finisher in the Water-Gas-Wastewater Division. The
division requires two Cement Finishers in its Restoration Crew to keep pace with new construction and capital
improvement projects which will continue at current levels for the foreseeable future. With the crew’s sole Cement
Finisher eligible for retirement, this reclassification ensures continuity of operations and succession planning. (Ongoing
net costs: $663)
Performance Results
This reclassification will allow Operations to restore pavement and concrete in a timely manner.
Budget Adjustments
Budget Adjustments Positions Expenditures Revenues
Net
Wastewater
Collection
Fund
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 57
WATER FUND
Description
From 1895 until 1928, the City's water supply came from deep wells.
When the groundwater supply started to decline, water was purchased
from the San Francisco Regional Water System to supplement the local
water system. Since 1962, when Palo Alto's wells were discontinued as
the primary water system, 100 percent of the water has come from the
Regional Water System: 85 percent derived from snow melt flowing into
the Hetch Hetchy Reservoir and the balance from runoff stored in San
Francisco Bay Area reservoirs. The Water Fund focuses on increasing
infrastructure reliability and responsiveness to meet the City's water
supply needs during an emergency; maintaining high-quality and reliable
sources of water; updating water efficiency goals; and implementing
water efficiency programs and services. Additionally, Engineering is
implementing a seismic upgrade to the existing reservoirs, wells and
receiving stations to increase supply reliability during catastrophic
emergencies.
Accomplishments
Achieved drought water savings of 24% compared to the first drought year in 2013, far
surpassing the 10% voluntary water reduction goal established by the State Water
Resources Control Board.
Led citywide drought response initiative including water conservation education and water
use restriction enforcement.
The environmental impact report for phase III of the Recycled Water Pipeline Project was
approved to evaluate the potential expansion of the recycled water system through South
Palo Alto and Stanford Research Park.
Updated the 2017 Water Integrated Resources Plan guidelines.
Completed the design of water main replacement project WMR 26 to replace approximately
11,000 LF of water main pipelines, 200 service pipelines, and 40 fire hydrants.
UTILITIES
58 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
Completed the construction of Boronda Reservoir concrete water tank rehabilitation by
removing the old steel tension cable and rewrapping with new cable and shotcrete.
Completed the construction for seismic upgrade of Montebello water steel tank and 3
turnouts.
Successfully managed drought impacts. Exceeded State-mandated and voluntary usage
reduction goals, expanded and improved cost-effectiveness of water efficiency programs,
achieved 100% compliance with enforcement of water waste complaints without issuance of
fines, and protected utility financial viability with a drought surcharge.
Launched two pilot programs, developing Business Water Reports for restaurants and
hotels and installing real-time water meters for City facilities and selected commercial
properties, with grants from the Santa Clara Valley Water District (SCVWD).
Spearheaded the third Great Race for Saving Water 5K race and Earth Day Festival in
partnership with various non-profits, environmental organizations and an array of
community partners in support of water resources and conservation.
Initiatives
Collaborate with Public Works and Santa Clara Valley Water District to begin the Recycled
Water Strategic Plan, a comprehensive evaluation of all potential recycled water supply
options including nonpotable and potable reuse options.
Assess the structural integrity and general strategic plans of water reservoirs. Determine the
feasibility and cost effectiveness of alternatives to address the structural integrity issues. A
water hydraulic model will be developed to evaluate the current and future operational
needs of the water system.
Conduct the Geological study of Mayfield tank site to assess the stability of the reservoir.
Complete the construction of water main replacement project WMR 26 to replace
approximately 11,000 LF of water main pipelines, 200 service pipelines, and 40 fire hydrants.
In compliance with the California Water Boards, the City is working with Palo Alto Schools
on plans to test lead levels in any requested K-12 school site.
Goals and Objectives
GOAL 1
Provide safe and clean drinking water for customers.
Objectives:
Ensure drinking water meets all regulatory standards.
Maintain and update water infrastructure to ensure reliable service.
Educate customers about backflow prevention as part of the City's Cross Connection
Control Program.
Ensure adequate water supplies are available to meet existing and future water demands.
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 59
Complete seismic upgrades to water system (reservoirs, receiving stations and wells).
GOAL 2
Increase environmental sustainability of the water supply system.
Objective:
Increase water conservation and efficiency participation.
Develop updated long-term water efficiency goals as part of the 2015 Urban Water
Management Plan update.
Evaluate expanding the recycled water delivery system to help drought-proof the system,
reuse local water supplies, and reduce the City's dependence on the Tuolumne River.
Key Performance Measures
PROVIDE SAFE AND CLEAN DRINKING WATER FOR OUR CUSTOMERS
Goal Provide safe and clean drinking water for our customers.
Objective Ensure drinking water meets all regulatory standards.
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
FY 2017
Estimated
FY 2018
Proposed
Percentage of customer-owned
water backflow prevention devices
in compliance
94.00%90.00%94.00%94.00%94.00%
Description
Customer-owned and maintained backflow devices are an integral part of the
City's Cross Connection Control Program which began in early 2010. The devices
help to ensure that no contaminants of any kind (e.g., chemicals, debris,
reclaimed water) enter the potable water system.
Purpose
The California Department of Public Health Services provides regulations for the
City and our customers through California Code of Regulations, Title 17. These
regulations specify the types of hazards that require backflow devices.
Status
The City is achieving a compliance rate of up to 95-96 percent on an annual
basis. There are 3,330 backflow devices. This number is growing every year as
current codes require backflow installation for residences as well as Commercial
properties.
UTILITIES
60 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
WATER EFFICIENCY
Goal Increase environmental sustainability of the water supply system.
Objective Increase water conservation and efficiency participation.
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
FY 2017
Estimated
FY 2018
Proposed
Annual savings achieved through
water efficiency programs as a
percentage of total sales
0.91%1.96%0.91%0.91%0.91%
Description
The department measures specific savings achieved by the installation of water
efficiency improvements through the programs that the City offers through the
Santa Clara Valley Water District. The California Drought greatly affected the City's
water savings numbers this past year, with the largest amount of savings
attributed to the non-residential installation of drought tolerant landscapes and
water efficient irrigation hardware.
Purpose
Improving water efficiency for homes and businesses can result in water supply,
water operations and wastewater processing savings. This measure supports the
Water Fund's ten-year goals for water, to reduce expected water use by 20
percent by 2020.
Status
Water efficiency program savings were significantly higher in FY 2015 and FY
2016 compared to previous years due to the California drought and the
Governor's Executive Order mandating water conservation. Program marketing
and general drought awareness helped to achieve very levels of program
participation. Staff expects program participation to decrease after the current
rainy winter.
WATER QUALITY
Goal Ensure the provision of safe and clean drinking water for our customers.
Objective Safe testing of drinking water to meet all regulatory standards.
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
FY 2017
Estimated
FY 2018
Proposed
Percentage of samples passed
from all sampling stations 100.00%100.00%100.00%100.00%100.00%
Description
The City of Palo Alto (CPA) regularly collects and tests water samples from
connection points between the San Francisco Public Utilities Commission/City of
Palo Alto (SFPUC/CPA), storage reservoirs, emergency wells, residential, and
sample station locations within the distribution system to ensure that the water
quality meets all California Department of Public Health (CDPH) and U.S.
Environmental Protection Agency (EPA) prescribed regulations that limit the
amount of contaminants in the drinking water. The City has 18 sampling stations
and collects 84-105 samples monthly to test levels of chlorine residual, coliform
and pH levels are within regulatory guidelines. All sample results are reported to
CDPH on a monthly basis.
Purpose Complying with regulations guarantees the City maintains its high standards of
water quality and avoids fines.
Status Palo Alto drinking water continues to be in complete compliance with all existing
county, state, and federal standards for water quality.
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 61
Workload Measures
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
FY 2017
Estimated
FY 2018
Proposed
Percent of miles of water mains
replaced 0.00%0.70%0.90%0.40%0.70%
Number of Customer Accounts
(Water)22,421 19,994 19,638 20,000 20,000
Percent of surveyed rating the
quality of the Drinking Water (Water)
as "Good" or "Excellent"
83.00%87.00%88.00%88.00%88.00%
UTILITIES
62 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
Budget Summary
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
Budget
FY 2018
Proposed
Budget
FY 2018
Change $
FY 2018
Change %
Dollars by Division
CIP Water Fund 4,313,935 9,082,022 21,502,132 6,382,142 (15,119,990)(70.3)%
Water Administration 6,528,352 6,871,823 8,493,164 8,881,139 387,976 4.6%
Water Customer Service 1,821,447 2,082,194 2,095,208 2,201,670 106,461 5.1%
Water Engineering (Operating)358,128 409,183 504,489 538,106 33,618 6.7%
Water Operations and Maintenance 5,283,426 5,433,991 6,866,562 7,531,824 665,262 9.7%
Water Resource Management 16,158,265 18,219,637 19,861,067 22,203,416 2,342,349 11.8%
Total 34,463,553 42,098,850 59,322,622 47,738,297 (11,584,325)(19.5)%
Dollars by Category
Salary & Benefits
Healthcare 759,274 750,434 897,417 957,649 60,232 6.7%
Other Benefits 108,612 114,286 110,776 140,523 29,747 26.9%
Overtime 239,791 250,524 267,963 267,963 ——%
Pension 787,607 1,025,830 1,319,198 1,397,443 78,245 5.9%
Retiree Medical 270,265 260,618 285,198 300,042 14,845 5.2%
Salary 4,443,438 4,949,770 4,979,927 5,117,401 137,474 2.8%
Workers' Compensation 76,724 89,580 57,907 164,608 106,701 184.3%
Total Salary & Benefits 6,685,711 7,441,043 7,918,386 8,345,630 427,244 5.4%
Allocated Charges 2,697,240 2,867,207 4,028,173 4,406,735 378,562 9.4%
Contract Services 728,992 806,550 827,806 827,806 ——%
Debt Service 1,863,964 1,813,658 3,222,606 3,222,606 ——%
Facilities & Equipment 286 —2,000 2,000 ——%
General Expense 366,062 443,919 568,146 666,070 97,923 17.2%
Operating Transfers-Out 63,612 251,541 324,306 649,055 324,749 100.1%
Rents & Leases 2,329,829 1,803,087 2,876,500 2,931,563 55,063 1.9%
Supplies & Material 437,889 544,371 610,010 609,982 (28)(0.0)%
Transfer to Infrastructure —112,692 ————%
Utility Purchase 15,669,935 17,626,020 18,900,000 21,090,000 2,190,000 11.6%
Capital Improvement Program 3,620,032 8,388,762 20,044,688 4,986,850 (15,057,838)(75.1)%
Total Dollars by Expense
Category 34,463,553 42,098,850 59,322,622 47,738,297 (11,584,325)(19.5)%
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 63
Revenues
Charges for Services 45,184 51,021 10,000 10,000 ——%
Charges to Other Funds 160,528 442,829 154,958 84,403 (70,555)(45.5)%
From Other Agencies 534,328 636,666 576,632 576,632 ——%
Net Sales 34,862,279 36,764,774 39,346,148 40,913,999 1,567,851 4.0%
Operating Transfers-In 191,525 221,833 244,018 512,436 268,418 110.0%
Other Revenue 2,002,342 955,122 878,000 904,280 26,280 3.0%
Return on Investments 792,652 738,329 775,300 775,300 ——%
Total Revenues 38,588,838 39,810,575 41,985,056 43,777,050 1,791,994 4.3%
Positions by Division
CIP Water Fund 9.53 9.05 9.05 8.03 (1.02)(11.29)%
Water Customer Service 10.80 9.01 9.68 9.66 (0.02)(0.22)%
Water Engineering (Operating)1.37 1.12 1.37 1.35 (0.02)(1.46)%
Water Operations and Maintenance 24.97 25.44 25.44 25.34 (0.10)(0.41)%
Water Resource Management 1.71 1.53 3.03 3.52 1.49 16.17%
Total 48.38 46.15 48.53 47.90 (0.68)(1.40)%
Staffing
Job Classification
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
Budget
FY 2018
Proposed
Budget
FY 2018
Change $
FY 2018
Salary
Account Specialist 0.25 0.25 0.23 0.23 0.01 16,349
Administrative Associate II 0.85 0.85 0.75 0.65 (0.10)49,536
Assistant Director Utilities
Customer Support Services 0.20 0.20 0.20 0.20 —33,975
Assistant Director Utilities
Engineering 0.20 0.20 0.20 0.20 —38,979
Assistant Director Utilities
Operations 0.15 0.15 0.15 0.15 —28,520
Assistant Director Utilities/Resource
Management 0.25 0.25 0.25 0.25 —43,493
Business Analyst 1.62 1.68 1.73 1.53 (0.20)229,101
Cement Finisher 0.25 0.25 0.25 0.56 0.31 51,747
Contracts Administrator 0.10 0.10 0.10 0.10 —11,367
Budget Summary
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
Budget
FY 2018
Proposed
Budget
FY 2018
Change $
FY 2018
Change %
UTILITIES
64 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
Coordinator Utilities Projects 1.34 1.34 1.09 1.09 —121,165
Customer Service Representative 1.56 1.26 1.56 1.81 0.25 136,712
Customer Service Specialist 0.66 0.42 0.66 0.66 —54,820
Customer Service Specialist-Lead 0.59 0.42 0.59 0.59 —52,409
Engineer 1.00 1.00 1.00 1.00 —128,113
Engineering Manager - Electric 0.15 0.15 0.15 0.15 —26,854
Engineering Manager - WGW 0.33 0.33 0.33 0.33 —51,885
Engineering Technician III 0.45 0.45 1.45 0.45 (1.00)43,108
Equipment Operator 0.31 0.31 0.31 —(0.31)—
Gas and Water Meter Measurement
and Control Technician ———0.80 0.80 82,204
Gas and Water Meter Measurement
and Control Technician - Lead ———0.20 0.20 21,991
Gas System Technician II 0.10 0.10 0.10 —(0.10)—
Heavy Equipment Operator 2.00 2.00 1.95 1.95 —187,828
Heavy Equipment Operator -
Install/Repair ——0.20 0.20 —21,216
Inspector, Field Services 1.40 1.40 1.65 1.65 —170,571
Maintenance Mechanic-Welding 0.80 0.80 0.80 0.80 —82,271
Manager Customer Service —0.34 0.34 0.34 —44,681
Manager Customer Service and
Meter Reading 0.34 —————
Manager Utilities Compliance 0.50 0.50 0.50 0.50 —82,805
Manager Utilities Credit &
Collection 0.15 0.15 0.15 0.15 —19,906
Manager Utilities Marketing
Services 0.20 0.20 ————
Manager Utilities Operations WGW 0.50 0.50 0.50 0.50 —79,206
Manager Utilities Program Services ——0.20 0.20 —26,212
Meter Reader 2.03 1.67 2.03 2.03 —144,019
Meter Reader-Lead 0.34 0.28 0.34 0.34 —25,805
Planner 0.15 —————
Power Engineer 0.30 0.30 0.30 0.30 —41,030
Principal Business Analyst —0.33 0.33 0.33 —46,970
Principal Management Analyst 0.33 —————
Staffing
Job Classification
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
Budget
FY 2018
Proposed
Budget
FY 2018
Change $
FY 2018
Salary
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 65
Program Assistant I 0.33 0.33 0.33 0.33 —25,516
Project Engineer 2.00 2.00 2.00 2.00 —275,777
Resource Planner 0.20 0.10 0.70 1.20 0.50 164,688
Restoration Lead 0.31 0.31 0.31 0.31 —31,144
SCADA Technologist 0.80 0.80 0.80 0.80 —117,625
Senior Business Analyst 0.66 0.66 0.66 0.66 —84,153
Senior Engineer 0.75 1.00 1.00 1.00 —139,236
Senior Mechanic 0.34 0.34 0.34 0.34 —36,710
Senior Project Engineer 0.25 —————
Senior Resource Planner 1.05 0.55 1.69 1.68 (0.01)250,573
Senior Technologist 0.29 —————
Senior Utilities Field Service
Representative 0.49 0.49 0.49 0.49 —54,844
Senior Water Systems Operator 2.00 2.00 2.00 2.00 —218,401
Substation Electrician 0.40 0.40 0.40 0.40 —50,486
Supervisor Inspection Services 0.29 0.29 ————
Utilities Engineer Estimator 0.43 0.43 0.43 0.43 —51,776
Utilities Field Services
Representative 1.50 1.50 1.50 1.50 —156,953
Utilities Install Repair-Lead-Welding
Certified 0.46 0.46 0.46 0.46 —52,421
Utilities Install Repair-Welding
Certified 0.69 0.69 0.69 0.69 —73,187
Utilities Install/Repair 2.05 2.05 1.90 1.90 —193,859
Utilities Install/Repair Assistant 0.35 0.35 0.35 0.35 —30,288
Utilities Install/Repair-Lead 1.02 1.02 1.02 1.02 —113,581
Utilities Key Account
Representative 0.15 0.15 0.25 0.35 0.10 40,871
Utilities Locator 0.34 0.34 0.34 0.34 —32,654
Utilities Marketing Program
Administrator 1.00 0.40 0.40 0.40 —44,371
Utilities Safety Officer 0.15 0.15 0.15 0.15 —16,801
Utilities Supervisor 2.62 2.62 2.91 2.91 —367,685
Water Meter Cross Connection
Technician 2.00 2.00 ————
Water System Operator I ——1.00 —(1.00)—
Staffing
Job Classification
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
Budget
FY 2018
Proposed
Budget
FY 2018
Change $
FY 2018
Salary
UTILITIES
66 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
Water System Operator II 3.34 3.34 3.34 3.34 —321,589
Sub-total: Full-Time Equivalent
Positions 45.66 42.95 45.85 45.29 (0.56)5,140,038
Temporary/Hourly 2.72 3.21 2.73 2.61 (0.12)213,252
Total Positions 48.38 46.15 48.58 47.90 (0.68)5,353,290
Staffing
Job Classification
FY 2015
Actuals
FY 2016
Actuals
FY 2017
Adopted
Budget
FY 2018
Proposed
Budget
FY 2018
Change $
FY 2018
Salary
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 67
Budget Reconciliation
Positions Expenditures Revenues
Net
Water Fund
Prior Year Budget 48.58 57,864,803 41,985,056 15,879,747
Base Adjustments
Adjustments to Costs of Ongoing Activities
Salaries and Benefits Adjustments — 325,982 — 325,982
Capital Improvement Funding Adjustments — (13,521,701) 294,698 (13,816,399)
Water Commodity Purchases Expenditure
Adjustments — 2,190,000 — 2,190,000
Water Sales Revenue Adjustment — — 1,464,810 (1,464,810)
Water Utility Sales to the City Revenue Adjustment — — 115,286 (115,286)
Staff Reallocations within Utility Program Services
and Resource Management Division 0.27 57,099 — 57,099
State Water Resouce Control Board Fee
Adjustment — 50,000 — 50,000
Bay Area Water Supply & Conservation Agency
Fee Adjustment — 47,100 — 47,100
Transfer to Technology Fund (TE-10001 Utilities
Customer Billing Software Replacement and
TE-05000 Radio Infrastructure Replacement)
— 97,814 — 97,814
ARC Document Solutions (Print & Mail Allocated
Charges Realignment)—(28) —(28)
General Fund Cost Allocation Plan Adjustment — 113,408 — 113,408
Dispatch Service Allocated Charges Adjustment — 11,873 — 11,873
General Liability Insurance Allocated Charges
Adjustment — 42,842 — 42,842
Ground Maintenance Allocated Charges
Adjustment —95—95
Print & Mail Allocated Charges Adjustment — (5,380) — (5,380)
Rents and Leases Expenditure Alignment — 55,063 — 55,063
Storm Drain Allocated Charges Adjustment — 36 — 36
Street Cut Allocated Charges Adjustment — 28,928 — 28,928
Utilities Administration Allocated Charges
Adjustment —7,444 —7,444
Utilities Allocated Charges Adjustment — 144,349 — 144,349
Vehicle Replacement & Maintenance Allocated
Charges Adjustment — 43,199 — 43,199
Adjustments to Costs of Ongoing Activities 0.27 (10,311,877)1,874,794 (12,186,671)
Total FY 2018 Base Budget 48.85 47,552,926 43,859,850 3,693,076
UTILITIES
68 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
Budget Proposals
1 Supplemental Pension Trust Fund Contribution — 140,385 — 140,385
2 Fire Hydrant Maintenance Program — — (82,800) 82,800
3 Utilities Customer Service and Part-Time
Staffing Reorganization 0.15 49,174 — 49,174
4 Pavement Restoration Staffing — 791 — 791
5 Gas and Water Meter Shop Reorganization (1.10) (4,979) — (4,979)
Budget Changes (0.95)185,371 (82,800)268,171
Total FY 2018 Proposed Budget 47.90 47,738,297 43,777,050 3,961,247
Budget Adjustments
Budget Adjustments Positions Expenditures Revenues
Net
Water Fund
1 Supplemental Pension Trust Fund Contribution 0.00 140,385 0 140,385
This action establishes a transfer from the Water Fund to the General Benefits Fund to contribute to the establishment of
a supplemental pension trust fund. Consistent with City Council approval of CMR 7553: Pension Trust Supplemental
Funds Public Agency Retirement Service (PARs), this action transfers $140,385 which represents approximately 10% of
the Water Fund's annual pension contribution. Establishing this Pension Trust Fund will bolster the City's resilience to
variability associated with pension forecasting, including rate of return changes and increases associated with the
unfunded accrued liability. (Ongoing net costs: $0)
Performance Results
Proactively establishing a pension trust will allow the City to prefund pension costs and begin to address GASB 68 Net
Pension Liabilities (NPL).
Budget Reconciliation
Positions Expenditures Revenues
Net
Water Fund
UTILITIES
UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET 69
2 Fire Hydrant Maintenance Program 0.00 0 (82,800)82,800
Historically, Utilities maintained the City's fire hydrants, performing various tasks including clearing overgrowth, painting,
flow testing hydrants, and ensuring compliance with the National Fire Protection Agency (NFPA) standards. With the
growing list of backlog for this maintenance work, one-time additional funding will be provided in FY 2018 to the Fire
Department to clear this backlog. Going forward, ongoing maintenance of fire hydrants will be shared between the Fire
and Public Works Departments instead. Funding will be realigned in FY 2019 to reflect the realignment of
responsibilities. (Ongoing net costs: $82,800)
Performance Results
Bringing fire hydrants in compliance with standards set by the National Fire Protection Agency will increase safety of the
community, and assist in improving the department Insurance Service Office (ISO) rating.
3 Utilities Customer Service and Part-Time Staffing
Reorganization 0.15 49,174 0 49,174
This action reorganizes and reallocates various part-time employees’ funding department-wide to better align resources
based on workload. This reorganization will reduce the department's overall part-time staffing by a total of 1.76 FTE
and add one 1.0 full-time Customer Service Representative for a net reduction of 0.76 in total full-time equivalent staff
impacting 19 positions. Within this reorganization, impacts to the Water Fund include: a net increase of 0.96 for four
Journey Level Laborers; an increase of 0.25 for one Customer Service Representative; a net decrease of 0.8 for three
Maintenance Assistants and 0.24 for four Administrative Specialists I; and a decrease of 0.02 for one Administrative
Specialist - II. (Ongoing net costs: $49,174)
Performance Results
The additional Customer Service Representative will enable Utilities to fully staff the new Utilities Customer Service
counter in the Civic Center lobby to assist walk-in customers with Utilities-related services including billing, account
services, and programs. With this additional position, the Utilities Call Center will improve performance and customer
response time.
4 Gas and Water Meter Shop Reorganization -1.10 (4,979)0 (4,979)
This action realigns the structure of the existing Gas and Water Meter shops by consolidating into one shop. This action
eliminates the isolated job classifications and adds new job classifications to reflect the merged team. By combining
these two meter shops, the City will be better positioned to respond to customer needs and unforeseeable workload
changes. This will make the City's meter shop more agile and flexible in its continued service. The proposed
consolidation is outlined below:
- Eliminate 3.0 Gas Meter Technicians II and add 3.0 Gas and Water Measurement and Control Technicians;
- Eliminate 1.0 Water System Operator I and add 1.0 Gas and Water Measurement and Control Technician; and
- Eliminate 1.0 Engineering Technician III and add 1.0 Gas and Water Measurement and Control Technician - Lead.
This action is subject to the meet and confer process. (Ongoing net savings: $4,979)
Budget Adjustments
Budget Adjustments Positions Expenditures Revenues
Net
Water Fund
UTILITIES
70 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2018 PROPOSED BUDGET
Performance Results
With this reorganization, Utilities will be able to reduce the risk of injuries, expand career opportunities, and reduce
backlog of meter replacement and maintenance work for both the Gas and Water Meter Shops.
5 Pavement Restoration Staffing 0.00 791 0 791
This action reclassifies 1.0 Equipment Operator to 1.0 Cement Finisher in the Water-Gas-Wastewater Division. The
division requires two Cement Finishers in its Restoration Crew to keep pace with new construction and capital
improvement projects which will continue at current levels for the foreseeable future. With the crew’s sole Cement
Finisher eligible for retirement, this reclassification ensures continuity of operations and succession planning. (Ongoing
net costs: $791)
Performance Results
This reclassification will allow Operations to restore pavement and concrete in a timely manner.
Budget Adjustments
Budget Adjustments Positions Expenditures Revenues
Net
Water Fund
•CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 1
Fiscal Year 2018 Proposed
Capital Budget
City Council
Gregory Scharff, Mayor
Liz Kniss, Vice Mayor
Tom DuBois
Eric Filseth
Adrian Fine
Karen Holman
Lydia Kou
Greg Tanaka
Cory Wolbach
James Keene, City Manager
Ed Shikada, Assistant City Manager
Lalo Perez, Director of Administrative Services/Chief Financial Officer
Kiely Nose, Budget Director, Office of Management and Budget
David Ramberg, Assistant Director of Administrative Services
Paul Harper, Budget Manager, Office of Management and Budget
Eric Filseth, Finance Committee Chair
ATTACHMENT B
CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 69
ELECTRIC FUND
ELECTRIC FUND
70 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
ELECTRIC FUND Overview
The City of Palo Alto is the only municipality in California that operates a full suite of City-
owned utility services. The municipal electric power system began operation in 1900 and con-
tinues to provide safe, reliable, cost effective electric service to residents and customers of Palo
Alto. For the 2018-2022 Capital Improvement Program (CIP), approximately $82.08 million is
programmed, with $19.96 million budgeted in Fiscal Year 2018, of which $4.69 million is reap-
propriated funds from Fiscal Year 2017. Overall, a total of 38 projects are programmed over the
5-year CIP.
Major projects funded in the
2018-2022 CIP include Electric
Customer Connections ($17.19
million), Electric System
Improvements ($12.00 million),
Smart Grid Technology Installa-
tion ($21.94 million), VA Hospital
Load Addition ($2.98 million),
various Underground system
rebuild projects ($6.41 million),
4/12kV conversion projects
($2.37 million), and Overhead to
Underground Conversion ($6.35
million). The budget for the
Electric Fund CIP is broken into
three separate categories: Customer Connections, System Improvements, and Undergrounding
Projects.
Infrastructure Inventory
CLASSIFICATION QUANTITY
ines 18 miles
apacity)9
aintained 101
6,600
117 miles
on 187 miles
n 94 miles
ution 74 miles
$0
$4,000,000
$8,000,000
$12,000,000
$16,000,000
$20,000,000
$24,000,000
2014
Actuals
2016
Actuals
FY 2018
Projected
FY 2020
Projected
FY 2022
Projected
Electric Fund Capital Expenditures
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 71
Customer Connections
As customers continually change their electric power needs due to equipment additions, new
construction, building expansions, building remodels, teardowns and rebuilds, and new building
occupancy types, the electric system must evolve to meet these needs. The Electric Customer
Connections Project, which is the largest project within the Electric Fund ($3.22 million in Fiscal
Year 2018, $17.19 million over the 2018-2022 CIP), is accounted for within this category. Also in
this category is work for the VA Hospital load increase ($2.98 million) and the Stanford Univer-
sity load increase ($0.50 million). These projects allow for the completion of work required to
meet the needs of customers who have applied for new or upgraded electric service, need tem-
porary power for construction, or require other services. The Electric Fund pays for a portion of
this project, while remaining costs are supported by reimbursements from customers, tele-
phone, and cable television companies for project work performed by the City.
Recent Accomplishments
In Fiscal Year 2016 the Utilities Electric Division completed over 286 customer service
projects with a total cost of $2.46 million and revenue of $1.66 million.
2018-2022 Capital Improvement Program
Recurring Projects
The Electric Customer Connections project, described above, is the only recurring project in this
category.
Non-Recurring Projects
A total of $3.48 million is programmed for projects under this category, with the entire $3.48
million anticipated to be spent or encumbered in Fiscal Year 2018.
VA Hospital Load Expansion (Fiscal Year 2018: $2.98 million; 5-Year CIP: $2.98 million)
Stanford University Load Expansion (Fiscal Year 2018: $0.50 million; 5-Year CIP: $0.50
million)
System Improvements
Necessary elements in ensuring reliable electric service to City of Palo Alto residents and cus-
tomers include the replacement of electric system components before they reach their end of
life and the installation of protective equipment to minimize the impact of system problems.
Projects in the System Improvements category allow for a variety of improvements, including
the replacement/upgrade of old cables and equipment and bringing designs up to current stan-
dard, installation of protective equipment and switches, conversion of the electric system from
4,160 Volts (4kV) to 12,470 Volts (12kV), and installation of capacitors to improve efficiency.
The 2018-2022 CIP includes total funding of $54.46 million in this category, with $11.57 million
allocated in Fiscal Year 2018. Significant projects in this category include Electric Distribution
System Improvements ($12.00 million), Smart Grid Technology Installation ($22.52 million), and
various projects to rebuild underground districts and substation components.
ELECTRIC FUND
72 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Recent Accomplishments
Replaced batteries at all electric substations
Added security cameras at two electric substations
Completed reconfiguration of Quarry feeders to better distribute load at substation.
Completed assessment of substation physical security with consultant.
Completed other miscellaneous system improvement projects dealing with replacement of
deteriorated facilities or to improve system operation and reliability.
2018-2021 Capital Improvement Program
Recurring Projects
A total of $40.78 million is programmed for System Improvements recurring projects in the
2018-2022 CIP, with $5.47 million allocated in Fiscal Year 2018. Recurring projects in this cate-
gory include the following:
Communication System Improvements (Fiscal Year 2018: $0.36 million; 5-Year CIP: $0.76
million)
Electric Distribution System Improvements (Fiscal Year 2018: $2.40 million; 5-Year CIP:
$12.00 million)
Electric Utility Geographic Information System (Fiscal Year 2018: $0.23 million; 5-Year CIP:
$0.89 million)
SCADA System Upgrades (Fiscal Year 2018: $0.06 million; 5-Year CIP: $0.32 million)
Smart Grid Technology Installation (Fiscal Year 2018: $0.94 million; 5-Year CIP: $21.94
million)
Substation Facility Improvements (Fiscal Year 2018: $0.20 million; 5-Year CIP: $0.99 million)
Substation Protection Improvements (Fiscal Year 2018: $0.40 million; 5-Year CIP: $1.60
million)
Underground System Rebuild (Fiscal Year 2018: $0.35 million; 5-Year CIP: $1.75 million)
Non-Recurring Projects
A total of $11.57 million is allocated in the 2018-2022 CIP for non-recurring System Improvement
projects. All of the funds for the projects were approved by the City Council in prior years.
Undergrounding Projects
The City of Palo Alto began a program to underground overhead electric, telephone, and cable
TV facilities in 1965 with a project along Oregon Expressway. Since that time 45 Underground
Districts have been formed. The undergrounding of electrical lines is a joint process between
the City and AT&T, due to joint ownership of the poles, and Comcast which leases pole space
from AT&T. All three Utilities share in the cost of the installation of underground conduit and
boxes necessary to enclose and protect wires and equipment. The City typically takes the lead
in the design, bidding, and construction processes with AT&T and Comcast reimbursing the City
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 73
for construction and administrative costs. During the 2018-2022 CIP, $6.95 million is allocated
for Undergrounding Projects, with $1.7 million allocated in Fiscal Year 2018.
Recent Accomplishment
Underground District 47 – Completed the installation of underground substructures
(conduits and boxes) in the area bounded by Middlefield Road/Addison Avenue/Cowper
Street/Homer Avenue.
Underground District 46 - Completed preliminary designs for underground electric lines.
2018-2022 Capital Improvement Program
Recurring Projects
There are no recurring projects under this category.
Non-Recurring Projects
A total of $8.50 million is allocated in the 2018-2022 CIP for non-recurring Undergrounding
projects, with $3.25 million allocated in Fiscal Year 2018. All of the funds for the projects were
approved by the City Council in prior years. Significant projects in this category include the fol-
lowing:
Underground District 42 ($2.30 million), which will underground overhead utility facilities in
the area near Embarcadero Road/Emerson Street/Middlefield Road.
Underground District 43 ($2.65 million) which will underground overhead utility facilities in
the area along Alma Street and Embarcadero Road.
Summary of Capital Activity
ELECTRIC FUND
Project
Number Project Title
FY 2016
Actuals
FY 2017
Estimate
FY 2018
Proposed FY 2019 FY 2020 FY 2021 FY 2022
5-Year
Total
Source of Funds
Transfers from Other Funds
Gas Fund
EL-11014 Smart Grid Technology 0 100,000 300,000 300,000 1,666,000 1,666,000 1,666,000 5,598,000
Total Gas Tax Fund Transfers 0 100,000 300,000 300,000 1,666,000 1,666,000 1,666,000 5,598,000
Water Fund
EL-11014 Smart Grid Technology 0 100,000 300,000 300,000 1,666,000 1,666,000 1,666,000 5,598,000
Total Water Fund Transfers 0 100,000 300,000 300,000 1,666,000 1,666,000 1,666,000 5,598,000
Total Transfers from Other Funds 0 200,000 600,000 600,000 3,332,000 3,332,000 3,332,000 11,196,000
Reimbursement from Customers, Telephone, and Cable Television Companies
ELECTRIC FUND
74 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
EL-98003 Electric System Improvements 77,101 0 200,000 210,000 210,000 210,000 210,000 1,040,000
EL-89028 Electric Customer Connections 1,659,941 1,303,672 1,650,000 1,700,000 1,700,000 1,700,000 1,700,000 8,450,000
EL-17004 Stanford - Customer Load Requirements 0 0 400,000 0 0 0 0 400,000
EL-08001 Underground District 42 - Embarcadero Road,
Emerson, Middlefield 0 0 0 0 300,000 0 0 300,000
EL-11009 Underground District 43 - Alma/Embarcadero 0 0 0 0 0 300,000 0 300,000
EL-12001 Underground District 46 - Charleston/El Camino
Real 0 0 200,000 0 0 0 0 200,000
EL-11010 Underground District 47 - Middlefield, Homer,
Webster, Addison 1,105,162 0 0 0 0 0 0 0
EL-17003 VA Hospital - Customer Load Requirements 0 0 1,600,000 0 0 0 0 1,600,000
Reimbursement from Customers,
Telephone, and Cable Television
Companies Total
2,842,204 1,303,672 4,050,000 1,910,000 2,210,000 2,210,000 1,910,000 12,290,000
Total Sources 2,842,204 1,503,672 4,650,000 2,510,000 5,542,000 5,542,000 5,242,000 23,486,000
Use of Funds
Customer Connections
EL-89028 Electric Customer Connections 2,457,600 3,159,809 3,219,888 3,335,804 3,455,893 3,580,305 3,600,000 17,191,890
EL-17004 Stanford University Customer Load
Requirements 0 0 500,000 0 0 0 0 500,000
EL-17003 VA Hospital Customer Load Requirements 0 20,000 2,980,000 0 0 0 0 2,980,000
Customer Connections Total 2,457,600 3,179,809 6,699,888 3,335,804 3,455,893 3,580,305 3,600,000 20,671,890
System Improvements
EL-06001 230 Kv Electric Intertie 1,008 66,233 113,119 0 0 0 0 113,119
EL-10008 Advanced Metering Infrastructure (AMI) System 393 0 0 0 0 0 0 0
EL-16002 Capacitor Bank Installation 0 350,000 0 0 0 0 0 0
EL-14000 Coleridge/Cowper/Tennyson 4/12Kv
Conversion 0 0 0 680,000 400,000 0 0 1,080,000
EL-15000 Colorado/Hopkins System Improvement 0 50,000 1,525,000 0 0 0 0 1,525,000
EL-89031 Communications System Improvements 7,106 40,772 359,821 100,000 100,000 100,000 100,000 759,821
EL-17001 East Meadow Circles 4/12Kv Conversion 0 50,000 0 1,750,000 0 0 0 1,750,000
EL-13000 Edgewood/Wildwood 4Kv Tie 0 0 0 50,000 400,000 0 0 450,000
EL-15001 Electric Substation Battery Replacement 293,869 106,131 0 0 0 0 0 0
EL-98003 Electric System Improvements 2,064,744 2,977,231 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 12,000,000
EL-02011 Electric Utility Geographic Information System 68,923 165,000 228,663 165,000 165,000 165,000 165,000 888,663
EL-17007 Facility Relocation for Caltrain Modernization
Project 0 0 1,550,000 0 0 0 0 1,550,000
EL-17005 HCB Pilot Wire Relay Replacement 0 0 167,000 167,000 0 0 0 334,000
EL-14004 Maybell 1&2 4/12Kv Conversion 3,277 85,372 100,000 0 0 0 0 100,000
EL-09000 Middlefield Underground Rebuild 270,996 0 0 0 0 0 0 0
EL-11003 Rebuild Underground District 15 0 30,000 114,181 335,819 0 0 0 450,000
Project
Number Project Title
FY 2016
Actuals
FY 2017
Estimate
FY 2018
Proposed FY 2019 FY 2020 FY 2021 FY 2022
5-Year
Total
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 75
EL-11006 Rebuild Underground District 18 364,384 0 0 0 0 0 0 0
EL-11008 Rebuild Underground District 19 86,609 0 116,420 0 0 0 0 116,420
EL-14002 Rebuild Underground District 20 0 50,000 900,000 500,000 0 0 0 1,400,000
EL-17000 Rebuild Underground District 23 0 0 200,000 600,000 0 0 0 800,000
EL-10006 Rebuild Underground District 24 893,040 300,000 643,113 0 0 0 0 643,113
EL-19000 Rebuild Underground District 25 0 0 0 50,000 500,000 0 0 550,000
EL-16000 Rebuild Underground District 26 350 100,000 0 50,000 650,000 0 0 700,000
EL-14005 Reconfigure Quarry Feeders 162,311 0 0 0 0 0 0 0
EL-13002 Relocate Quarry/Hopkins Substation 60Kv Line
(A & B)0 0 100,000 750,000 0 0 0 850,000
EL-13006 Sand Hill/Quarry Road 12Kv Tie 1,023 0 0 0 0 0 0 0
EL-02010 SCADA System Upgrades 35,716 0 60,000 65,000 65,000 65,000 65,000 320,000
EL-11014 Smart Grid Technology Installation 34,742 300,000 1,521,766 1,000,000 10,000,000 5,000,000 5,000,000 22,521,766
EL-17002 Substation 60Kv Breaker Replacement 0 0 150,000 150,000 150,000 0 0 450,000
EL-89044 Substation Facility Improvements 122,904 300,000 195,000 195,000 200,000 200,000 200,000 990,000
EL-89038 Substation Protection Improvements 209,333 612,144 400,000 300,000 300,000 300,000 300,000 1,600,000
EL-16003 Substation Security 1,910 248,090 250,000 250,000 0 0 0 500,000
EL-16001 Underground System Rebuild 56,115 400,000 300,000 350,000 350,000 350,000 350,000 1,700,000
EL-13008 Upgrade Electric Estimating System 2,596 0 0 0 0 0 0 0
EL-17008 Utility Control Center Upgrades 0 400,000 100,000 0 0 0 0 100,000
EL-04012 Utility Site Security Improvements 361,394 49,120 70,960 50,000 50,000 50,000 0 220,960
System Improvements Total 5,042,741 6,680,093 11,565,043 9,957,819 15,730,000 8,630,000 8,580,000 54,462,862
Undergrounding Projects
EL-13007 Underground Distribution System Security 0 0 300,000 300,000 0 0 0 600,000
EL-08001 Underground District 42 - Embarcadero Road,
Emerson, Middlefield 0 0 0 50,000 2,000,000 250,000 0 2,300,000
EL-11009 Underground District 43 - Alma/Embarcadero 0 0 0 0 150,000 2,000,000 500,000 2,650,000
EL-12001 Underground District 46 - Charleston/El Camino
Real 73,545 113,787 1,397,480 0 0 0 0 1,397,480
EL-11010 Underground District 47 - Middlefield, Homer,
Webster, Addison 2,142,918 957,990 0 0 0 0 0 0
Undergrounding Projects Total 2,216,463 1,071,777 1,697,480 350,000 2,150,000 2,250,000 500,000 6,947,480
Total Uses 9,716,804 10,931,679 19,962,411 13,643,623 21,335,893 14,460,305 12,680,000 82,082,232
Project
Number Project Title
FY 2016
Actuals
FY 2017
Estimate
FY 2018
Proposed FY 2019 FY 2020 FY 2021 FY 2022
5-Year
Total
FIBER OPTICS FUND
70 FIBER OPTICS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
FIBER OPTIC Overview
The City of Palo Alto is the only municipality in California that operates a full suite of City-
owned utility services. The most recent addition to this list of services provided to City of Palo
Alto residents and customers is the leasing of “dark“ fiber on a fiber optic loop, built by the City
in 1996. For the 2018-2022 Capital Improvement Program, expenditures of $3.45 million are
programmed, with $1.65 million allocated in Fiscal Year 2018. Major projects funded in the 2018-
2022 CIP include the Fiber Optics Customer Connections ($1.25 million) and Fiber Optics Net-
work System Improvements ($1.00 million). The budget for the Fiber Optics Capital Improve-
ment Program is broken into two separate categories: Capacity Improvements and Customer
Connections.
Capacity
Improvements
With the advance in technology,
increase in online services, and
increase in data transmission
needs to meet consumer
demand, the capability afforded
by fiber optic cables is increas-
ingly in demand. To ensure reli-
able fiber optic service to City of
Palo Alto residents and custom-
ers, fiber optic system compo-
nents (fiber optic cable and splice cabinets) need to be upgraded or added to increase
capacity; replaced or protected from damage by animals; and rerouted away from hazardous
conditions.
Recent Accomplishments
Upgraded the downtown backbone between a number of splice points to improve fiber
infrastructure and efficiency for customer connections and free up fibers.
Upgraded AutoCAD fiber maps to include Advanced Modeling Extension module for the
Geographic Information System.
Infrastructure Inventory
CLASSIFICATION QUANTITY
Cable 42
able 25
c Cable 60
$0
$400,000
$800,000
$1,200,000
$1,600,000
$2,000,000
FY 2014
Actuals
FY 2016
Actuals
FY 2018
Proposed
FY 2020
Projected
FY 2022
Projected
Fiber Optics Fund Capital
Expenditures
FIBER OPTICS FUND
FIBER OPTICS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 71
Upgraded the dark fiber network from University Avenue to Lytton Avenue at Bryant Street
to add capacity and improve efficiency for downtown businesses
Completed upgrade of fiber maps to Utilities GIS system, enabling a single view of multiple
utility infrastructures
Conducted a physical audit of the dark fiber network to improve network performance and
add capacity
2018-2022 Capital Improvement Program
Recurring Projects
There is one recurring project in the Capacity Improvements Category: the Fiber Optics Net-
work System Improvements. This project extends the “dark“ fiber optic network around Palo
Alto through the development of fiber sub-rings and completion of general improvements to
the fiber system. The annual funding for this project remains at $0.20 million throughout the
CIP.
Non-Recurring Projects
As part of the 2018-2022 Capital Improvement Program, one project is included within this cat-
egory: Fiber Optic System Rebuild (Fiscal Year 2018: $1.20 million, total cost $1.25 million). This
project is expected to extend through Fiscal Year 2018 and will rebuild portions of the “dark“
fiber optics network. Certain sections of the system have reached capacity limiting the City’s
ability to provide fiber optics service to all potential customers. Rebuilding portions of the
“dark“ fiber optic network includes installation of additional fiber optic cables in the Stanford
Research Park area and replacement of several below ground splice closures with pad-mounted
pedestals.
Customer Connections
As customers continually change their fiber optic needs due to equipment additions, new con-
struction, building expansions, building remodels, teardowns and rebuilds, and new building
occupancy types, the fiber optics system must evolve to meet these needs. Projects in this cat-
egory include work required to meet the needs of customers who have applied for new or
upgraded fiber optic service. The connection costs associated with new or upgraded connec-
tions are offset by charges to the customer.
Recent Accomplishments
Several services installed for Stanford University offsite facilities and other customers in the
Stanford Research Park area.
2018-2022 Capital Improvement Program
Recurring Projects
In the Customer Connections category there is one recurring project: Fiber Optics Customer
Connections. In the 2018-2022 Capital Improvement Program, recurring funding in this project
FIBER OPTICS FUND
72 FIBER OPTICS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
remains at $0.25 million. This project provides funding for the installation of fiber optic infra-
structure for new service connections.
Non-Recurring Projects
There are no non-recurring projects in this category.
Summary of Capital Activity
FIBER OPTICS FUND
Project
Number Project Title
FY 2016
Actuals
FY 2017
Estimate
FY 2018
Proposed FY 2019 FY 2020 FY 2021 FY 2022
5-Year
Total
Source of Funds
Other Revenues
FO-10000 Fiber Optics Customer Connections:
Connection Charges 91,085 120,000 200,000 200,000 200,000 200,000 200,000 1,000,000
Other Revenues Total 91,085 120,000 200,000 200,000 200,000 200,000 200,000 1,000,000
Total Sources 91,085 120,000 200,000 200,000 200,000 200,000 200,000 1,000,000
Use of Funds
Capacity Improvements
FO-10001 Fiber Optics Network System Improvements 267,321 367,035 200,000 200,000 200,000 200,000 200,000 1,000,000
FO-16000 Fiber Optic System Rebuild 140,875 50,000 1,200,000 0 0 0 0 1,200,000
Capacity Improvements Total 408,196 417,035 1,400,000 200,000 200,000 200,000 200,000 2,200,000
Customer Connections
FO-10000 Fiber Optics Customer Connections 158,654 255,360 250,000 250,000 250,000 250,000 250,000 1,250,000
Customer Connections Total 158,654 255,360 250,000 250,000 250,000 250,000 250,000 1,250,000
Total Uses 566,850 672,395 1,650,000 450,000 450,000 450,000 450,000 3,450,000
CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 69
GAS FUND
GAS FUND
70 GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
GAS FUND Overview
The City of Palo Alto is the only municipality in California that operates a full suite of City-
owned utility services. The municipal gas distribution system began operation in 1917. It pro-
vides safe, reliable, and cost effective gas service to residents and customers of Palo Alto. For
the 2018-2022 Capital Improvement Program (CIP), approximately $29.19 million is pro-
grammed, with $2.49 million allocated in Fiscal Year 2018. Overall, a total of 11 projects are pro-
grammed for the 5-year CIP. Major projects funded in the 2018-2022 CIP include Gas Main
Replacements (cumulative total of $16.23 million), Gas System Customer Connections ($7.80
million), and Gas Meters and Regulators ($1.94 million). The budget for the Gas Fund CIP is bro-
ken into three separate categories: Customer Connections, Gas Main Replacements, and Sys-
tem Improvements.
Customer
Connections
As customers continually change
their gas needs due to equip-
ment additions, new construc-
tion, building expansions,
building remodels, tear-downs
and rebuilds, and new building
occupancy types, the gas system
must evolve to meet these
needs. The Gas System Cus-
tomer Connections project,
which is the largest project within the Gas Fund ($1.27 million in Fiscal Year 2018, $6.72 million
over the 2018-2022 CIP), is accounted for within this category. This project allows for the com-
pletion of work required to meet the needs of customers who have applied for new or upgraded
gas service. The Gas Fund pays for a portion of this project, while remaining costs are sup-
ported by reimbursements from customers for project work performed by the City.
Recent Accomplishments
In Fiscal Year 2016 the Utilities Gas Division completed approximately 168 customer service
projects, at a cost of $1.32 million.
Infrastructure Inventory
CLASSIFICATION QUANTITY
on system 210.31 miles
ion to residents and businesses 205.55 miles
s 4
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
FY 2014
Actuals
FY 2016
Actuals
FY 2018
Proposed
FY 2020
Projected
FY 2022
Projected
Gas Fund Capital Expendiures
GAS FUND
GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 71
2018-2022 Capital Improvement Program
Recurring Projects
A total of $7.80 million is programmed for Customer Connection recurring projects in the 2018-
2022 CIP, with $1.47 million allocated in Fiscal Year 2018. Recurring projects in this category
include the following:
Gas System Customer Connections (Fiscal Year 2018: $1.27 million; 5-Year CIP: $6.72 million)
System Extensions - Unreimbursed (Fiscal Year 2018: $0.20 million; 5-Year CIP: $1.09 million)
Non-Recurring Projects
There are no non-recurring projects under this category.
Gas Main Replacements
The Gas Main Replacements category accounts for the replacement of inadequately-sized and
structurally deficient gas mains that are subject to corrosion or reaching the end of their
expected life. The Utilities Department coordinates with the Public Works Department’s street
maintenance projects to minimize damage to the City’s pavement and maximize cost efficiency.
In the next five years, it is anticipated that 90,391 linear feet of gas mains, or 8 percent of the
entire system, will be replaced. The 2018-2022 Adopted CIP includes $17.73 million in funding
for projects within this category.
Recent Accomplishments
Completed the design and construction of approximately 69,700 linear feet of gas mains
and 996 gas service extensions from the City’s main distribution system with the recent CIP
project Gas Main Replacement (GMR) projects 19, 20, & 21.
Completed the design of gas main replacement project GMR 22 to replace approximately
19,440 linear feet of gas main pipelines and 367 service pipelines.
2018-2022 Capital Improvement Program
Recurring Projects
There are no recurring projects under this category.
Non-Recurring Projects
Five Gas Main Replacement (GMR) projects are included in the 2018-2022 CIP (Fiscal Year 2018:
$0.36 million; 5-Year CIP: $16.23 million). One new Gas ABS/Tenite Replacement project is
scheduled to start in Fiscal Year 2019 (Fiscal Year 2018: $0.00 million; 5-year CIP: $1.50 million).
System Improvements
To ensure reliable gas services for the City of Palo Alto residents and customers, gas infrastruc-
ture must be replaced upon reaching the end of its expected life. The System Improvements
GAS FUND
72 GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
category includes three projects during the 2018-2022 CIP at a total cost of $3.66 million, with
$0.65 million allocated in Fiscal Year 2018.
Recent Accomplishments
Completed building the gas distribution system model.
2018-2022 Capital Improvement Program
Recurring Projects
There are three funded recurring projects in the System Improvements category in the 2018-
2022 CIP: Gas Distribution System Improvements (Fiscal Year 2018: $0.24 million, 5-Year CIP:
$1.27 million), Gas Equipment and Tools (Fiscal Year 2018: $0.05 million, 5-Year CIP: $0.45 mil-
lion), and Gas Meters and Regulators (Fiscal Year 2018: $0.37 million, 5-Year CIP: $1.94 million).
Non-Recurring Projects
There are no non-recurring projects under this category in the 2018-2022 CIP.
Please refer to the City of Palo Alto Utilities webpage to confirm project details: http://
www.cityofpaloalto.org/gov/depts/utl/projects/default.asp
Summary of Capital Activity
GAS FUND
Project
Number Project Title
FY 2016
Actuals
FY 2017
Estimate
FY 2018
Proposed FY 2019 FY 2020 FY 2021 FY 2022
5-Year
Total
Source of Funds
Other Revenues
GS-80017 Gas System, Customer Connections 964,858 1,017,000 1,047,510 1,078,935 1,111,303 1,144,642 1,178,981 5,561,371
Other Revenue Total 964,858 1,017,000 1,047,510 1,078,935 1,111,303 1,144,642 1,178,981 5,561,371
Total Sources 964,858 1,017,000 1,047,510 1,078,935 1,111,303 1,144,642 1,178,981 5,561,371
Use of Funds
Customer Connections
GS-80017 Gas System, Customer Connections 1,252,556 1,247,236 1,265,355 1,303,315 1,342,415 1,382,688 1,424,169 6,717,942
GS-03009 System Extensions - Unreimbursed 72,200 75,000 204,455 210,590 216,908 223,415 230,117 1,085,485
Customer Connections Total 1,324,756 1,322,236 1,469,810 1,513,905 1,559,323 1,606,103 1,654,286 7,803,427
Gas Main Replacements
GS-18000 Gas ABS/Tenite Replacement Project 0 0 0 1,500,000 0 0 0 1,500,000
GS-09002 Gas Main Replacement - Project 19 68,899 0 0 0 0 0 0 0
GS-10001 Gas Main Replacement - Project 20 23,297 0 0 0 0 0 0 0
GAS FUND
GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 73
GS-11000 Gas Main Replacement - Project 21 678,845 0 0 0 0 0 0 0
GS-12001 Gas Main Replacement - Project 22 348,143 3,386,999 0 0 0 0 0 0
GS-13001 Gas Main Replacement - Project 23 0 0 363,000 3,588,510 0 0 0 3,951,510
GS-14003 Gas Main Replacement - Project 24 0 0 0 640,000 3,100,000 0 0 3,740,000
GS-15000 Gas Main Replacement - Project 25 0 0 0 0 659,000 3,200,000 0 3,859,000
GS-16000 Gas Main Replacement - Project 26 0 0 0 0 0 678,200 3,300,000 3,978,200
GS-20000 Gas Main Replacement - Project 27 0 0 0 0 0 700,000 700,000
Gas Main Replacements Total 1,119,183 3,386,999 363,000 5,728,510 3,759,000 3,878,200 4,000,000 17,728,710
System Improvements
GS-11002 Gas Distribution System Improvements 201,082 191,007 238,870 246,036 253,417 261,020 268,851 1,268,194
GS-14004 Gas Distribution System Model 33,981 0 0 0 0 0 0 0
GS-13002 Gas Equipment and Tools 47,763 30,000 50,000 100,000 100,000 100,000 100,000 450,000
GS-80019 Gas Meters and Regulators 42,872 659,957 365,681 376,652 387,952 399,591 411,579 1,941,455
GS-01019 GPS Global Positioning 641 0 0 0 0 0 0 0
GS-15001 Security at City Gas Receiving Stations 15,942 0 0 0 0 0 0 0
System Improvements Total 342,281 880,964 654,551 722,688 741,369 760,611 780,430 3,659,649
Total Uses 2,786,220 5,590,199 2,487,361 7,965,103 6,059,692 6,244,914 6,434,716 29,191,786
Project
Number Project Title
FY 2016
Actuals
FY 2017
Estimate
FY 2018
Proposed FY 2019 FY 2020 FY 2021 FY 2022
5-Year
Total
WASTEWATER COLLECTION FUND
70 WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
WASTEWATER COLLE Overview
The City of Palo Alto is the only municipality in California that operates a full suite of City-
owned utility services. The municipal wastewater collection system began operation in 1898
and continues to provide safe, reliable, and cost effective wastewater service to residents and
customers of Palo Alto. For the 2018-2022 Capital Improvement Program (CIP), approximately
$22.48 million is programmed, with $1.69 million allocated in Fiscal Year 2018. Overall, a total of
9 projects are programmed for the 5-year CIP. Major projects funded in the 2018-2022 CIP
include Wastewater Collection System Rehabilitation/Augmentation projects (cumulative total
of $15.39 million), Sewer Lateral/Manhole Rehabilitation and Replacement ($3.38 million), and
Sewer System Customer Connections ($2.15 million). The budget for the Wastewater Collection
Fund CIP is broken into two separate categories: Customer Connections and System Improve-
ments.
Customer
Connections
As customers continually change
their wastewater needs due to
equipment additions, new con-
struction, building expansions,
building remodels, teardowns
and rebuilds, and new building
occupancy types, the wastewa-
ter collection system must
evolve to meet these needs. The
Sewer System Customer Con-
nections project is the only project within this category and includes work required to meet the
needs of customers who have applied for new sewer laterals. The Wastewater Fund pays for a
portion of this project, while remaining costs are supported by reimbursements from customers
for project work performed by the City.
Recent Accomplishments
In Fiscal Year 2016 the Utilities Wastewater Division completed over 79 customer service
projects with a total cost of $0.36 million.
Infrastructure Inventory
CLASSIFICATION QUANTITY
es 217 miles
18,141
$0
$4,000,000
$8,000,000
$12,000,000
FY 2014
Actuals
FY 2016
Actuals
FY 2018
Proposed
FY 2020
Projected
FY 2022
Projected
Wastewater Collection Fund
Capital Expenditures
WASTEWATER COLLECTION FUND
WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 71
2018-2022 Capital Improvement Program
Recurring Projects
There is only one project within this category, the Sewer System Customer Connections project
with funding of $2.15 million over the 5-year CIP. This project funds customer connections and
offset by reimbursements from customers requesting the service.
Non-Recurring Projects
There are no non-recurring projects in this category.
System Improvement
To ensure reliable wastewater services for the City of Palo Alto residents and customers, infra-
structure must be replaced upon reaching the end of its useful life. The infrastructure replace-
ment program includes projects that will rehabilitate or replace deteriorated pipelines. In the
next five years, it is estimated that approximately 92,341 linear feet of wastewater mains will be
replaced.
Recent Accomplishments
Began construction of multi-year CIP projects for Wastewater Collection System
Rehabilitation/Augmentation Projects 24, 25, 26, and 27 which include replacement of 58,151
linear feet of wastewater mains and 1,038 sewer laterals.
2018-2022 Capital Improvement Program
Recurring Projects
A total of $4.93 million is programmed for System Improvement recurring projects in the 2018-
2022 CIP, with $1.28 million allocated in Fiscal Year 2018. Recurring projects in this category
include the following:
Wastewater System Improvements (Fiscal Year 2018: $0.25 million; 5-Year CIP: $1.30 million)
Wastewater General Equipment and Tools (Fiscal Year 2018: $0.05 million; 5-Year CIP: $0.25
million)
Sewer Lateral/Manhole Rehabilitation and Replacement (Fiscal Year 2018: $0.64 million; 5-
Year CIP: $3.38 million)
Non-Recurring Projects
The majority of funding within this category is allocated towards Wastewater Collection System
Rehabilitation/Augmentation Projects (cumulative total of $15.39 million). These projects imple-
ment high priority rehabilitation, augmentation, and lateral replacement work which reduces
inflow of rainfall and ground water into the collection system. The Utilities Department coordi-
nates with the Public Works Department’s street maintenance projects to minimize damage to
the City’s pavement and maximize cost efficiencies.
WASTEWATER COLLECTION FUND
72 WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Linear footage and locations are subject to change, please refer to the City of Palo Alto Utilities
webpage to confirm project details: http://www.cityofpaloalto.org/gov/depts/utl/projects/
default.asp.
Summary of Capital Activity
WASTEWATER COLLECTION FUND
Project
Number Project Title
FY 2016
Actuals
FY 2017
Estimate
FY 2018
Proposed FY 2019 FY 2020 FY 2021 FY 2022
5-Year
Total
Source of Funds
Other Revenues
WC-80020 Sewer System, Customer Connections 790,033 264,425 405,820 417,995 430,534 443,450 456,754 2,154,553
Other Revenue Total 790,033 264,425 405,820 417,995 430,534 443,450 456,754 2,154,553
Total Sources 790,033 264,425 405,820 417,995 430,534 443,450 456,754 2,154,553
Use of Funds
Customer Connections
WC-80020 Sewer System, Customer Connections 357,560 415,792 405,820 417,995 430,534 443,450 456,754 2,154,553
Customer Connections Total 357,560 415,792 405,820 417,995 430,534 443,450 456,754 2,154,553
System Improvements
WC-99013 Sewer Lateral/Manhole Rehabilitation and
Replacement 220,455 1,564,957 636,540 655,636 675,305 695,564 716,431 3,379,476
WC-09001 Wastewater Collection System Rehabilitation/
Augmentation Project 22 176 0 0 0 0 0 0 0
WC-10002 Wastewater Collection System Rehabilitation/
Augmentation Project 23 0 324,253 0 0 0 0 0 0
WC-11000 Wastewater Collection System Rehabilitation/
Augmentation Project 24 835,311 1,352,119 0 0 0 0 0 0
WC-12001 Wastewater Collection System Rehabilitation/
Augmentation Project 25 834,017 1,687,670 0 0 0 0 0 0
WC-13001 Wastewater Collection System Rehabilitation/
Augmentation Project 26 1,063,095 1,881,236 0 0 0 0 0 0
WC-14001 Wastewater Collection System Rehabilitation/
Augmentation Project 27 203,558 3,802,859 0 0 0 0 0 0
WC-15001 Wastewater Collection System Rehabilitation/
Augmentation Project 28 0 0 351,300 3,513,000 0 0 0 3,864,300
WC-16001 Wastewater Collection System Rehabilitation/
Augmentation Project 29 0 0 0 327,849 3,278,490 0 0 3,606,339
WC-17001 Wastewater Collection System Rehabilitation/
Augmentation Project 30 0 0 0 0 337,684 3,367,845 0 3,705,529
WC-19001 Wastewater Collection System Rehabilitation/
Augmentation Project 31 0 0 0 0 0 372,185 3,478,150 3,850,335
WC-20000 Wastewater Collection System Rehabilitation/
Augmentation Project 32 0 0 0 0 0 0 358,249 358,249
WASTEWATER COLLECTION FUND
WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 73
WC-13002 Wastewater General Equipment and Tools 0 50,000 50,000 50,000 50,000 50,000 50,000 250,000
WC-15002 Wastewater System Improvements 11,266 292,567 246,000 253,000 260,000 269,000 276,875 1,304,875
System Improvements Total 3,167,878 10,955,661 1,283,840 4,799,485 4,601,479 4,754,594 4,879,705 20,319,103
Total Uses 3,525,438 11,371,453 1,689,660 5,217,480 5,032,013 5,198,044 5,336,459 22,473,656
Project
Number Project Title
FY 2016
Actuals
FY 2017
Estimate
FY 2018
Proposed FY 2019 FY 2020 FY 2021 FY 2022
5-Year
Total
CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 69
WATER FUND
WATER FUND
70 WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
WATER FUND Overview
The City of Palo Alto is the only municipality in California that operates a full suite of City-
owned utility services. The municipal water distribution system began operation in 1896 and
continues to provide safe, reliable, and cost effective water service to residents and customers
of Palo Alto. For the 2018-2022 Capital Improvement Program (CIP), approximately $42.81 mil-
lion is programmed, with $4.95 million allocated in Fiscal Year 2018. Overall, a total of 15 proj-
ects are programmed for the 5-year CIP. Major projects funded in the 2018-2022 CIP include
Water Main Replacements (cumulative total of $27.34 million), Water System Customer Connec-
tions ($3.77 million), Water Meters ($2.66 million) and Water, Gas, and Wastewater Utility GIS
Data ($2.26 million). The Budget for the Water Fund is broken into three separate categories:
Customer Connections, System Improvements, and Water Main Replacements.
Customer
Connections
As customers continually change
their water needs due to equip-
ment additions, new construc-
tion, building expansions,
building remodels, teardowns
and rebuilds, and new building
occupancy types, the water sys-
tem must evolve to meet these
needs. Projects in this category
include work required to meet
the needs of customers who have applied for new or upgraded water service. The Water Fund
pays for a portion of this project, while remaining costs are supported by reimbursements from
customers for project work performed by the City.
Recent Accomplishments
In Fiscal Year 2016 the Utilities Water Utility completed over 180 customer service projects
with a total cost of $1.94 million.
Infrastructure Inventory
CLASSIFICATION QUANTITY
235.58 miles
1 active standby and 7 emergency standby
4 steel and 3 reinforced concrete
0
6,000,000
12,000,000
18,000,000
24,000,000
FY 2014
Actuals
FY 2016
Actuals
FY 2018
Proposed
FY 2020
Projected
FY 2022
Projected
Water Fund Capital
Expenditures
WATER FUND
WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 71
2018-2022 Capital Improvement Program
Recurring Projects
The Water System Customer Connections project is the only project within this category. Over
the course of the 2018-2022 CIP, $3.77 million is programmed, with $0.71 million allocated in Fis-
cal Year 2018.
Non-Recurring Projects
There are no non-recurring projects in this category.
System Improvements
To ensure reliable water services for the City of Palo Alto residents and customers, infrastruc-
ture must be replaced upon reaching the end of its expected life. The System Improvements
category includes 6 projects during the 2018-2022 CIP at a total cost of $11.69 million, with
$3.65 million allocated in Fiscal Year 2018.
Recent Accomplishments
Completed the water distribution system seismic evaluation and condition assessment
master study to determine the reliability of water system and seismic stability of water
pipelines in the Foothills. Pipeline improvements recommended from this study will be
included in future capital improvement projects.
Completed 90% construction of concrete water tank rehabilitation work at Boronda
Reservoir.
2018-2022 Capital Improvement Program
Recurring Projects
A total of $9.97 million is programmed for System Improvement recurring projects during the
2018-2022 CIP, with $1.92 million allocated in Fiscal Year 2018. Recurring projects in this cate-
gory include the following:
Water Distribution System Improvements (Fiscal Year 2018: $0.25 million; 5-Year CIP: $1.31
million)
Water Fusion and General Equipment/Tools (Fiscal Year 2018: $0.50 million; 5-Year CIP:
$0.25 million)
Water Meters (Fiscal Year 2018: $0.57 million; 5-Year CIP: $2.67 million)
Water Service Hydrant Replacement (Fiscal Year 2018: $0.41 million; 5-Year CIP: $2.19
million)
Water System Supply Improvements (Fiscal Year 2018: $0.25 million; 5-Year CIP: $1.31
million)
Water, Gas, Wastewater Utility GIS Data (Fiscal Year 2018: $0.40 million; 5-Year CIP: $2.26
million)
WATER FUND
72 WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Non-Recurring Projects
A total of $1.72 million is programmed for non-recurring projects during the 2018-2022 CIP, with
the entire $1.72 million allocated in Fiscal Year 2018. Non-recurring projects in this category
include the following:
Seismic Water System Upgrades (Fiscal Year 2018: $1.13 million; 5-Year CIP: $1.13 million)
Water Recycling Facilities (Fiscal Year 2018: $0.40 million; 5-Year CIP: $0.40 million)
Water Regulation System Improvements (Fiscal Year 2018: $0.20 million; 5-Year CIP: $0.20
million)
Water Main Replacements
The Water Main Replacements category accounts for the replacement of inadequately-sized
and structurally deficient water mains. In the next five years, it is estimated that approximately
54,700 linear feet of water mains will be replaced.
Recent Accomplishments
Completed the design and construction of water main replacement project WMR 26 to
replace approximately 10,600 LF water main pipelines, 170 service pipelines, and 40 fire
hydrants.
2018-2022 Capital Improvement Program
Recurring Projects
There are no recurring projects in this category.
Non-Recurring Projects
The 2018-2022 CIP includes $27.34 million in funding for five non-recurring projects within this
category, with $0.60 million approved for Fiscal Year 2018. The Utilities Department coordi-
nates with the Public Works Department’s street maintenance projects to minimize damage to
the City’s pavement and maximize cost efficiencies.
Summary of Capital Activity
WATER FUND
Project
Number Project Title
FY 2016
Actuals
FY 2017
Estimate
FY 2018
Proposed FY 2019 FY 2020 FY 2021 FY 2022
5-Year
Total
Source of Funds
Transfer from Other Funds
Gas Fund
WS-02014 Water Gas Wastewater GIS Data 116,666 134,209 147,630 152,059 156,621 161,320 751,839
Total Gas Fund Transfers 0 116,666 134,209 147,630 152,059 156,621 161,320 751,839
WATER FUND
WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 73
Wastewater Collection Fund
WS-02014 Water Gas Wastewater GIS Data 0 116,666 134,209 147,630 152,059 156,621 161,320 751,839
Total Wastewater Collection Fund 0 116,666 134,209 147,630 152,059 156,621 161,320 751,839
Total Transfer from Other Funds 0 233,332 268,418 295,260 304,118 313,242 322,640 1,503,678
Other Revenues
WS-07001 Water Recycling Facilities 111,014 0 0 0 0 0 0 0
WS-08002 Emergency Water Supply Project 278,618 0 0 0 0 0 0 0
WS-80014 Water Service Hydrant Replacement 6,830 0 0 0 0 0 0 0
WS-80013 Water System, Customer Connections 1,544,597 900,000 902,280 929,348 957,228 985,946 1,015,524 4,790,326
Other Revenue Total 1,941,059 900,000 902,280 929,348 957,228 985,946 1,015,524 4,790,326
Total Sources 1,941,059 1,133,332 1,170,698 1,224,608 1,261,346 1,299,188 1,338,164 6,294,004
Use of Funds
Customer Connections
WS-80013 Water System, Customer Connections 816,983 708,000 710,700 732,021 753,981 776,601 799,899 3,773,202
Customer Connections Total 816,983 708,000 710,700 732,021 753,981 776,601 799,899 3,773,202
System Improvements
WS-13004 Asset Management Mobile Deployment 641 0 0 0 0 0 0 0
WS-08002 Emergency Water Supply Project 124,730 0 0 0 0 0 0 0
WS-09000 Seismic Water System Upgrades 643,014 3,004,300 1,130,877 0 0 0 0 1,130,877
WS-11003 Water Distribution System Improvements 79,700 200,000 247,000 254,000 261,620 269,469 277,553 1,309,642
WS-13002 Water Fusion and General Equipment/Tools 9,315 10,000 50,000 50,000 50,000 50,000 50,000 250,000
WS-02014 Water, Gas, Wastewater Utility GIS Data 206,770 350,000 402,628 442,890 456,177 469,862 483,958 2,255,515
WS-80015 Water Meters 315,258 100,000 565,000 500,000 515,000 530,450 546,364 2,656,814
WS-07001 Water Recycling Facilities 48,067 0 395,649 0 0 0 0 395,649
WS-07000 Water Regulation System Improvements 953,585 760,825 196,054 0 0 0 0 196,054
WS-08001 Water Reservior Coating Improvements 75,285 0 0 0 0 0 0 0
WS-80014 Water Service Hydrant Replacement 355,048 400,000 412,000 424,360 437,091 450,204 463,710 2,187,365
WS-15004 Water System Master Plan 106,005 0 0 0 0 0 0 0
WS-11004 Water System Supply Improvements 62,382 334,694 247,000 254,000 261,620 269,469 277,553 1,309,642
System Improvements Total 2,979,799 5,159,819 3,646,208 1,925,250 1,981,508 2,039,454 2,099,138 11,691,558
Water Main Replacements
WS-11000 Water Main Replacement - Project 25 4,555,303 0 0 0 0 0 0 0
WS-12001 Water Main Replacement - Project 26 68,497 0 0 0 0 0 0 0
Project
Number Project Title
FY 2016
Actuals
FY 2017
Estimate
FY 2018
Proposed FY 2019 FY 2020 FY 2021 FY 2022
5-Year
Total
WATER FUND
74 WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
WS-13001 Water Main Replacement - Project 27 0 50,000 595,000 6,216,841 0 0 0 6,811,841
WS-14001 Water Main Replacement - Project 28 0 0 0 585,107 5,851,070 0 0 6,436,177
WS-15002 Water Main Replacement - Project 29 0 0 0 0 602,660 6,026,602 0 6,629,262
WS-16001 Water Main Replacement - Project 30 0 0 0 0 0 620,740 6,207,400 6,828,140
WS-19001 Water Main Replacement - Project 31 0 0 0 0 0 0 639,362 639,362
Water Main Replacements Total 4,623,800 50,000 595,000 6,801,948 6,453,730 6,647,342 6,846,762 27,344,782
Total Uses 8,420,582 5,917,819 4,951,908 9,459,219 9,189,219 9,463,397 9,745,799 42,809,542
Project
Number Project Title
FY 2016
Actuals
FY 2017
Estimate
FY 2018
Proposed FY 2019 FY 2020 FY 2021 FY 2022
5-Year
Total
2
MEMORANDUM
TO: UTILITIES ADVISORY COMMISSION
FROM: UTILITIES DEPARTMENT
DATE: MAY 3, 2017
SUBJECT: Staff Recommendation that the Utilities Advisory Commission Recommend
that the City Council Decline to Set an Energy Storage System Target Due to
Lack of Cost-effective Options
RECOMMENDATION
Staff recommends that the Utility Advisory Commission (UAC) recommend that the City Council
decline to set a procurement target for energy storage systems at this time due to the lack of
cost-effective options.
DISCUSSION
California legislation Assembly Bill 2514 (AB 2514) requires the governing board of each
publicly-owned utility (POU) to “determine appropriate targets, if any, for the utility to procure
viable and cost-effective energy storage systems...” In addition to requiring that POUs evaluate
the feasibility of energy storage targets every three years, starting in October 2014, AB 2514
also requires that all procurement of energy storage systems by POUs be cost-effective. In
February 2014, at the recommendation of staff and the UAC, City Council made a
determination not to set energy storage targets for CPAU.
In October 2016, staff presented the UAC an updated analysis on microgrid and energy storage
applications (Attachment A). This updated analysis found that energy storage applications in
CPAU are still not cost effective. However, staff recommended exploring the feasibility of
undertaking a Research Development & Deployment pilot program in order to learn and be
ready for the anticipated widespread adoption of customer-sited energy storage systems.
Based on the staff analysis results and UAC feedback at the October 5, 2016 meeting, staff
recommends that UAC recommend that Council make a determination that setting a
procurement target for energy storage systems is not appropriate for CPAU at this time due to
the lack of cost-effective options. Within the next three years, staff will bring the UAC a
recommendation regarding a potential energy storage pilot program 1.
1 A pilot program with a total budget approx. $250,000 is being evaluated by staff. This will enable CPAU to fund a
50% cost matching rebate of up to $500/kWh for storage cited at residential and customer premises, and made
available to the CPAU to dispatch during ‘Demand Response’ periods. Staff believes that this is a reasonable
investment to support the integration of this nascent technology in the Palo Alto community at five to ten
customer sites. Design of such a pilot program, including legal and regulatory review, will have to be undertaken by
staff before bringing a recommendation to the UAC and Council.
SUMMARY OF OCTOBER 5, 2016 UAC DISCUSSION
Commissioners were supportive of staff's findings that energy storage systems were ·not cost-
effective for Palo Alto. They also wanted to learn the rati o nale for undertaking an energy
storage pilot. Commissioners were open to considering approval of such a pilot program after
staff develops the program more fully. Full text of the meeting minutes is provided in
Attachment B.
NEXT STEPS
Following UAC consideration of staff's recommendation, if UAC recommends approval of that
recommendation, staff plans to seek Council approval of the staff recommendation in June or
July, and file with the California Energy Commission by August 2017.
RESOURCE IMPACTS
Not setting an energy storage goal will not have any resource impacts. If an energy storage pilot
program is recommended at a later time, it could cost $250,000 in customer rebates and take-
up approximately 0.2 FTE to administer the program and leverage the storage system for utility
applications.
POLICY IMPLICATIONS
Energy storage is a key technology to enable increased penetration of renewable energy in
California and, when installed i n customer premises, reduce their utility use. These two aspects
conform to Utilities Strategic Plan objectives and Council policy on environmentally sustainable
utility and customer programs. Any use of storage systems to benefit from energy market price
differentials will be done in conformance with City's energy risk management policies.
ENVIRONMENTAL REVIEW
Council decision not to set energy storage goals is not a Project requiring California
Environmental Quality Act review.
ATIACHMENTS
A. Discussion of Energy Storage and Microgrid Applications in Palo Alto -analysis report
provided to the UAC on Oct 5, 2016
B. UAC Meeting minutes (excerpts) related to energy storage discussion of 10/5/2016
PREPARED BY: LENA PERKINS, Resource Planner
~H I VA SWAMINATHAN, Senior Resource Planner
~rCHEI N, Assistant Director, Resource Management REVIEWED BY:
APPROVED BY:
EDSHIKADA
General Manager of Utilities
1
3
MEMORANDUM
TO: UTILITIES ADVISORY COMMISSION
FROM: UTILITIES DEPARTMENT
DATE: OCTOBER 5, 2016
SUBJECT: Discussion of Energy Storage and Microgrid Applications in Palo Alto
This report is provided for background to elicit input from the Commission on staff’s
preliminary findings to not set energy storage goals and to explore pilot scale storage programs.
A final recommendation on whether to establish a goal for storage will be brought back to the
Commission in early 2017. No action is required at this time.
EXECUTIVE SUMMARY
Currently, storage systems are most commonly installed by customers either seeking a higher
level of electricity supply reliability or those interested in storing their generated solar
electricity onsite. Energy storage systems coupled with solar photovoltaic (PV) systems are
becoming increasingly viable technologically and economically. These integrated PV and battery
systems sometimes have the capability to maintain electric supply at customer homes or
businesses in the event of a power outage,1 or increasing the self-consumption of solar
generated onsite. Combined PV and storage systems that can island from the electric grid and
function alone are sometimes called microgrids2 or nanogrids3. Storage systems alone, without
PV, can also be configured to reduce customer electric utility bills by storing electricity when
prices are low and using stored electricity when prices are high. In addition to the small
customer-sited storage systems, large utility-scale storage systems are also becoming more
prevalent in California as a result of regulatory mandates and market changes.
1 PV systems that are not appropriately coupled with energy storage systems cannot produce energy in the event
of an electric grid outage, except in very limited circumstances. Hence such systems cannot enhance customers’
electric reliability.
2 A microgrid is defined as, “a group of interconnected electrical (customer) loads and distributed energy resources
within clearly defined electrical boundaries that acts as a single controllable entity with respect to the grid. A
microgrid can connect and disconnect from the grid to enable it to operate in both grid-connected or island-
mode.”
3 A microgrid which can island from the electrical grid and operates at an individual building or individual customer
level is commonly called a “nanogrid”. Because of its simplicity, a nanogrid can be developed without the need for
active facilitation by an electric utility.
ATTACHMENT A
2
While battery systems and solar PV costs have declined considerably the past three years, cost-
effective storage systems are still some years away, particularly in Palo Alto. The primary
challenges to cost effectiveness in Palo Alto are the relatively low electric retail rates, the small
retail rate differential between on-peak and off-peak periods, and a robust distribution grid
providing highly reliable electricity service. Transmission grid-level storage applications are also
not currently cost effective for the City of Palo Alto Utilities (CPAU). However, CPAU has
incorporated the option into the City’s recent purchase power agreements to site storage
systems at the PV project sites in case the economics for storage at the transmission grid level
become favorable in the future.
In accordance with State law, the City must evaluate storage options and determine whether or
not to establish a goal for energy storage every three years. When last evaluated in 2014, the
City declined to establish such a goal since there were no cost-effective opportunities. There
still appears to be no cost-effective storage options, but staff is evaluating a pilot-scale utility
rebate program for energy storage systems installed at customer premises4. A small storage
pilot program would enable CPAU to gain first-hand experience with storage technologies and
to position itself for widespread adoption if and when they become economically favorable in
the future.
Staff will return to the UAC and Council in early 2017 with a recommendation on whether to
establish a goal for energy storage and whether to undertake any pilot programs related to
storage. This report is meant to provide a background for discussion prior to staff’s
development of these recommendations.
BACKGROUND
In February 2014, after examining a detailed analysis from staff, the City Council found a lack of
cost-effective energy storage applications in Palo Alto (Staff Report 4384). This analysis and
determination was prompted by State law under AB 2514 that required the governing board of
each publicly-owned utility (POU) such as CPAU to “determine appropriate targets, if any, for
the utility to procure viable and cost-effective energy storage systems.” The law also required
“reevaluation of energy storage target determinations not less than every three years.”
The findings and recommendations from the 2014 analysis by Palo Alto were:
A. Do not establish an energy storage systems procurement target for Palo Alto.
This recommendation was made because storage systems were not cost effective from a
societal and utility perspective in Palo Alto.
4 A pilot program with a total budget approx. $250,000 is being evaluated. This will enable CPAU to fund a 50% cost
matching rebate of up to $500/kWh for storage cited at customer premises, and made available to the CPAU to
dispatch during ‘Demand Response’ periods. Staff believes that this is a reasonable investment to support the
integration of this nascent technology in the Palo Alto community. Design of such a pilot program, including legal
and regulatory review, will be undertaken by staff in the coming months before bringing a recommendation to the
UAC.
3
B. Utility incentives for energy storage not recommended.
The analysis found that Thermal Energy Storage (TES) and Battery Energy Storage (BES)
systems were the most relevant for applications in Palo Alto. However, customer incentives
were not recommended since at the time neither of these systems was found to be cost
effective from a societal perspective.
C. Encourage commercial customers to consider energy storage where cost effective.
The analysis found that TES and BES could make load shifting strategies cost effective for
Palo Alto commercial electric ratepayers, and recommended that CPAU encourage its
customers to evaluate installing such systems at their premises.
Energy Storage Systems: Definition and Need
The fundamental purpose of energy storage systems is to absorb energy, store it for a period of
time with minimal losses, and then release it. When deployed in the electric power system,
energy storage provides flexibility that facilitates the real-time balance between electricity
supply and demand. Maintaining this balance on an instantaneous basis becomes more
challenging as the share of electricity coming from intermittent renewable energy sources
grows.
Typically this supply-demand balance is achieved by keeping some generating capacity in
reserve (to ensure sufficient supply at all times) and by adjusting the output of fast-responding
resources like hydropower. As the need for fast-responding energy supplies increases, energy
storage systems are expected to play a greater role. Rechargeable batteries are perhaps the
most familiar energy storage technology. Large battery systems can be connected to the
transmission grid to take up excess wind or solar power when demand for electricity is low, and
release it when demand is high. Such transmission grid-tied battery installations also provide
valuable frequency regulation more effectively than a typical thermal electricity generation
facility.
At the other end of the electric grid, customer-sited energy storage can reduce customer costs
and increase system reliability while also benefiting the utility by reducing peak demands on
the distribution system. Both BES and TES systems can reduce peak demands on the electricity
distribution system. TES systems are typically used to shift electricity use of commercial space
cooling units from peak to off-peak periods of the day. Alternatively, a common household
example of a TES storage device is a networked dispatchable electric hot water heater.
Clearly a variety of technologies can be used for energy storage in a wide range of applications
throughout the electric grid. The type, performance and location of an energy storage system
determine the benefits it can provide.
Storage Systems in California
In 2014, among the 37 POUs in California, 7 POUs set storage goals under the AB 2514
requirement. The remaining 30, including Palo Alto, declined to set goals, finding storage to not
be cost effective for their systems at the time. The storage systems planned by POUs were
4
primarily pumped hydro storage, thermal energy storage, and battery energy storage systems
designed for grid service and customer load management service applications. Table 1 lists
these goals and highlights that several of the smaller POUs have set very small goals.
Table 1. Publicly-Owned Utility Energy Storage Goals Set in 2014
Source: CEC, IEPR 2015
While the goals set for POUs were relatively small (~30MW in 2016 and 160 MW in 2020), the
California Public Utilities Commission (CPUC) set a 2,485 MW goal for the investor owned
utilities (IOUs), with procurement commitments to be made by 2020 and systems operational
by 2024. The large volume of storage procurement by IOUs in 2014-15 and current and future
plans for procurements have spurred the storage industry to bring several innovative storage
products to the marketplace, including better product warranties and long-term financing
options.
Microgrid and Nanogrid Applications in Palo Alto
A microgrid is defined as, “a group of interconnected electrical (customer) loads and distributed
energy resources within clearly defined electrical boundaries that acts as a single controllable
entity with respect to the grid. A microgrid can connect and disconnect from the grid to enable
it to operate in both grid-connected or island-mode.”5 A nanogrid is very similar to a microgrid,
except it operates at an individual building or individual customer level. Because of its simplicity
a nanogrid can be developed without the need for active facilitation by an electric utility like
CPAU.
5 https://building-microgrid.lbl.gov/microgrid-definitions
5
There are no microgrid applications in Palo Alto currently nor anticipated in the near future6.
Nanogrids, on the other hand, are common at buildings that are required to have back-up
diesel generation for public health and safety reasons. Examples of nanogrids include hospitals,
emergency operations centers such as police and fire stations, and data centers. As PV and
energy storage costs decline rapidly, integrated PV and battery systems could provide higher
reliability nanogrid services for an expanded group of customers, including residential
applications7.
DISCUSSION
Since 2014, the cost of BES systems has declined and there are a greater number of
commercially available storage products in the market place. While small scale TES systems
have improved, the application of TES in a mild climate like Palo Alto remains limited. The
report analyzes new developments since the 2014 storage assessment and outlines elements of
a distributed energy resource plan, including storage systems, for Palo Alto through 2020. This
analysis reviews these market changes and outlines a course for storage at CPAU within the
broader context of optimizing the value of all distributed energy resources in Palo Alto.
There are a wide variety of energy storage technologies available in the marketplace, and a
number of these are discussed in Attachment A. Among these technologies BES is the most
applicable for Palo Alto and is also the most commercialized with multiple established vendors.
TES systems have only few commercial vendors and such systems have relatively low value in
Palo Alto due to our mild climate (Attachment D).
Application of Energy Storage Systems
Figure 1 illustrates that storage systems can serve 13 applications and benefit three broad
stakeholder groups: Customers, Utilities, and Transmission operators (Independent System
Operators, or ISOs)8. Any of these three stakeholder groups could fund and or derive value
from energy storage systems. The concentric circles in the figure also illustrate that storage can
provide the broadest range of services if located behind the customer meter and the least
number of services if located more centrally on the transmission grid. It is important to keep in
mind for CPAU that the different available value streams depend on the physical location of the
storage system.
6 Microgrids are most common in military bases in the U.S, where the entire base must often have the capability to
function independent of the larger electrical grid. Microgrid applications are also common in large educational
campuses that have onsite generation. In early 2000’s Palo Alto considered siting a 50MW natural gas fueled
electric generator within Palo Alto. Part of the rationale was to explore the feasibility that that such a large scale
generator may enable the City to operate as a microgrid, at a 25% load level, in the event of a natural disaster. The
initiative was discontinued due to the lack of available site, cost/complexity, and the pursuit of the carbon neutral
electric supply strategy by the community.
7New generation of PV system inverters are capable of providing very limited amount of back-up supply to isolated
home circuits in the event of a grid outage when PV system is producing energy. The electrical appliances for such
application should not need stable power supply (i.e. medical device) because of the inherent variability of solar
power. http://www.sma-america.com/products/solarinverters/sunny-boy-3000tl-us-3800tl-us-4000tl-us-5000tl-
us-6000tl-us-7000tl-us-7700tl-us.html#Downloads-137455
8 The Economics of Battery Energy Storage, Rocky Mountain Institute, October 2015
6
Figure 1. Value streams of Energy Storage Systems in Customer, Utility and Transmission
Services
Customer Service Applications
Historically providing backup power (e.g. uninterrupted power supply, or UPS, systems) – has
been the primary application of storage systems for customers. Storage could also assist
customers in reducing their utility bills as both electricity demand charges to customers
increase and the electricity price differential between day time and night time use increases.
In addition, as utility incentives for solar PV systems are phased out, there may be greater
incentives to store excess solar energy in batteries at customer sites for use during non-solar
production periods. Due to the relatively high cost of storage, the storage projects are currently
not cost effective with the benefit-cost ratio from 15% to 20%, i.e. not cost effective. Hence,
supply reliability is likely to be the main driving factor for home installations of storage systems.
For commercial customers, given CPAU electricity demand charges, electricity retail rates, and
the cost of storage systems, the annualized benefit-cost ratio for this application appears to be
in the range of 30% to 35%, well below the break-even point.
7
Storage systems located at customer sites to provide service to customers directly also have the
potential to provide utility distribution and transmission system services. The value streams
associated with such services to CPAU or to the California Independent System Operator
(CAISO) are relatively small, except under very specific conditions such as when distribution or
transmission systems constraints prevail. Distribution systems constraints are not common in
CPAU currently9. However, as the electricity load increases with greater electric vehicles (EV)
adoption and electrification of natural gas appliances, constraints may arise which may make
storage applications more valuable.
Utility Services to CPAU
As the operator of the electric distribution system, CPAU can utilize storage systems to reduce
distribution systems constraints or defer distribution system expansion investments. As
outlined above, the value stream associated with such applications in Palo Alto is currently low.
Siting of storage to meet CPAU’s resource adequacy requirements imposed by the CAISO, could
annually save CPAU approximately $5 to $10 per kWh of energy storage system installed and
dispatched during peak load hours10. However, the annualized cost of a storage system is
currently about $100 to $150/kWh.
The value of transmission congestion relief for Palo Alto load is currently small 11. The
congestion costs experienced by CPAU’s central solar resources are expected to increase in the
future; however, the value of alleviating congestion costs can only captured by siting storage
physically adjacent to the large utility scale solar projects (often located in the Central Valley).
This increased congestion cost scenario was contemplated and has been incorporated into
CPAU’s solar contracts by incorporating an option for CPAU to site storage onsite at the large
solar arrays in the future.
Transmission Grid Services to the CAISO
CAISO procures many ancillary services to operate the electric transmission grid. These include
frequency regulation, spinning and non-spinning reserves, and voltage support. Among these
services, regulation service is the highest value service and storage systems have the ‘fast-
9 Palo Alto has nine distribution system substations with a total of 28 substation transformers serving 68
distribution feeders. While overall the substation transformers and feeders have sufficient capacity to handle Palo
Alto’s loads (which are currently 10-20% below peak loading levels seen in year 2000), there may be areas of
significant load growth (e.g. area around Stanford Medical Center) that will require load transfers to adjacent
substations to maintain operating flexibility or increases in electric system capacity at certain substations. The role
storage systems could play in deferring such investments are evaluated when designing such projects. Currently
storage is not anticipated to be an economical solution in such projects.
10 CPAU’s cost of resource adequacy capacity procurement could be reduced by $20 to $40/year for every kW of
storage system that has the ability to discharge over a four-hour duration (i.e. a 4 kWh storage system is needed to
meet one kW of resource adequacy capacity requirement). Therefore, the annual value of storage systems is
estimated at $5 to $10/kWh.
11 Internal analysis of CY 2015 CAISO nodal and aggregation point prices shows that on-off peak congestion and
marginal loss differential to be 0.05 cents/kWh for loads and up to 0.5 cents/kWh for central resources.
8
acting’ capability to provide this service; however, the compensation for these services is
currently too low to justify storage systems. Alternatively, CPAU will be exploring the feasibility
of aggregating smaller customer sited systems to bid into the CAISO market to capture both
customer service and grid service value streams.
Taking advantage of potential transmission level energy price differences is another value
stream that storage systems can capture. This application is similar to time-of-use bill
management in the customer-sited storage application, but it should be noted that both of
these value streams cannot be harvested simultaneously.
Figure 2 below illustrates the annual value of each 13 storage value streams as a percentage of
its annualized cost. This means that over the life of the energy storage system, it will recoup
some percentage of its cost. Since all of the systems have value of less than 100% of their
annualized cost, the revenues generated are all well below the breakeven point. However, the
relative economics of each application are informative for the future as storage costs continue
to decline.
As shown in the figure customer-sited storage for demand charge reduction and backup power
for commercial customers have the greatest value. The next most valuable uses of storage are
for PV self-consumption, frequency regulation, and resource adequacy which all recoup 15% of
the current cost. Transmission congestion relief, spinning and non-spinning reserves, and
energy price differences currently provide relatively low values currently. It should be noted
that it is difficult to generalize the value of backup power and distribution deferral because
each application is very case specific and analyzed on a case-by-case basis by both the customer
and CPAU.
9
Figure 2: Illustration of the Relative Value of Energy Storage Applications (% of Annualized Cost)12
Energy Storage Systems Case Studies for Palo Alto
Staff analyzed the three storage applications most relevant to Palo Alto: residential customer-
sited storage with PV, commercial customer-sited storage, and transmission grid-tied storage. A
description and summary of results for these applications are outlined below. The first two
applications are potential nanogrid applications if the systems were designed with sensors and
controllers to operate independent of the electric grid. A detailed description of the full analysis
is provided in Attachment C.
I. Residential customer-sited storage with PV: The scenario analyzed storage installed with
solar PV panels with the intention of maximizing PV self-consumption and minimizing
exports to the electric grid under the net energy metering (NEM) successor program. These
systems are small—in the 5 to 10 kWh scale. With an energy cost differential of about 9.5
cents/kWh (difference between the tier 2 rate of 16.901 cents/kWh versus the NEM
successor buyback rate of 7.485 cents/kWh) the value of energy storage for this application
is about 15% of the annual cost of ownership 13. If the customer values the enhanced
12 While each application individually is not currently cost effective, a combination of applications may be cost
effective. For Palo Alto, such combinations of opportunities are also very limited at this time.
13 Assumed that PV directly feeds the storage system and the configuration enables the storage system to qualify
for the 30% investment tax credit. The annual cost of ownership, net of investment tax credits, was estimated at
$42/kWh-year.
Energy arbitrage
Spin/non-Spin reserve
Frequency regulation
Voltage support
Black start
Resource adequacy
Transmission congestion reliefTransmission deferral
Distribution deferral
TOU bill management
Demand charge reduction
Increased PV self
consumption
Backup power
20%
40%
60%
80%
100% CUSTOMER SERVICES
UTILITIES SERVICES
ISO SERVICES
10
reliability provided by such a combined system, this application will become viable solution
in the residential market segment.
Figure 3 below illustrates how excess solar PV energy could be used to charge the storage
system during the day and use the stored energy to meet the electricity needs of the home at
night, reducing energy purchases at the retail rate.
Figure 3. Illustration of Residential Customer Application: Storage + PV under NEM Successor
This configuration enables customer to store excess solar energy for use at night.
II. Commercial customer sited storage: This application is to use storage to lower the utility
demand charge for the commercial customers. At the current demand charge rate for
commercial customers in Palo Alto 14, the value of this application is estimated at about 40%
of annualized cost of ownership. If CPAU also can harness the storage system to meet CAISO
resource adequacy needs, the combined value stream has the potential to break even at
the current cost of storage system. If configured appropriately, this storage system in this
application can also provide the customer back-up power in the event of an electric grid
outage.
14 Medium and Large Commercial customers pay a demand charge in the range of $14 to $19.70/kW-month
depending on the season. Assumes these storage systems do not enjoy tax credits.
11
Figure 4 illustrates how medium and large commercial customers, who are subject to a utility
demand charge based on the peak load consumption for the month, could use energy storage
to lower their monthly utility peak demand.
Figure 4. Commercial Customer Application to Lower Utility Electricity Demand Charge
III. Transmission grid-tied storage: This scenario assumes storage to be located at one of Palo
Alto’s large PV projects in the Central Valley. Such large systems cannot be located within
Palo Alto. Storage at such sites could provide CAISO services such as frequency regulation
and flexible resource adequacy capacity; could benefit from CAISO energy price differentials
when feasible; and could charge the battery with PV output during times when the systems
would otherwise be curtailed.
The market value of such systems is estimated at about 30% of current cost of ownership 15. The
analysis found that costs had to decline by about 33% and market value of ancillary services
must increase by three fold 16 for such systems to economically viable.
15 Annualized cost of ownership is estimated at 80/kWh-year – estimates based on purchase power agreement
quotes from potential developers. This assumes the projects do not qualify for investment tax credits.
16 Increase from the current low $9/MW-h levels, back to the $25-30/MW-h levels seen previously.
12
Figure 5 illustrates how transmission grid-tied storage could be used to keep loads and
resources in balance at the transmission grid level—by absorbing excess energy (when supplies
exceed demands) to charge the battery and providing energy (when demands exceed supplies)
by discharging the battery.
Figure 5. Transmission Grid-Tied Storage Application for Frequency Regulation & Load Following
Demand Response, Energy Storage, and Distributed Energy Resources in Palo Alto
Demand Response Program
Customer Demand Response (DR) programs are designed to provide an incentive to customers
to change their electricity consumption based on signals provided by CPAU or the CAISO.
Customers capable of providing DR services can meet many of the applications identified for
storage systems without the need for additional storage hardware investments. Over the past 5
years Palo Alto has implemented a DR program that achieved 500 to 900 kW of demand
reduction when CPAU requests load reductions from the large customers participating in the
program during hot summer days. The cost of administering and compensating participating
customers is about $10,000 per year, with similar value to CPAU17.
Much of the DR has been achieved by participating customers controlling their air conditioning
and lighting loads. To achieve a similar level of load reduction, approximately 2 to 3 MWh of
17 Details of this program and planned next steps are outlined in the UAC Report from March 2016
13
storage systems would be needed, requiring a capital expenditure in excess of $2 million. Due
to the relatively favorable economics of DR programs compared to storage, CPAU anticipates
continuing its focus on expanding the DR program to other large customers and investigating
residential applications.
Initiative to Leverage Distributed Energy Resources and Meeting Distribution System Needs
Energy storage systems and DR programs are considered distributed energy resources (DER)
along with EVs, EV charging equipment, PVs, controllable thermostats and electric water
heaters, etc. In February 2016, staff issued a request for proposal to solicit proposals from
communicating and controllable DER vendors who already have such systems installed at
customer premises in Palo Alto.
Examples of services that can be provided by networked and controllable DER devices include
the following:
• Reduced charging of EVs when the value of energy is high. This application is similar to
discharging a battery when the value of electricity is high.
• Injecting capacitive energy into the distribution grid from existing PV systems by
controlling the inverter operation when CPAU’s distribution power factor is low. Smart
inverters in BES can also provide this service18.
• Pre-cooling homes in the morning on hot summer days using thermostat controls in
order to reduce electricity consumption during afternoon peak load periods. This is
equivalent to charging the batteries in the morning and discharging them at night.
Staff is in the process of evaluating proposals and anticipates making pilot scale commitments
to leverage such resources for the benefit of CPAU operations in conjunction with the services
customers are already receiving for such DERs. While these commitments will be for services,
staff is evaluating the merits of providing incentives for the installation of related hardware
such as storage systems.
A comprehensive DER strategy to meet CPAU’s needs in the long term, including potential pilot
scale storage system incentives at customer locations, will be brought to the UAC and Council
for consideration and approval in 2017, along with a recommendation on whether or not to set
energy storage goals for the next 3 years.
Role of Distributed Energy Resources in Meeting Palo Alto’s Sustainability Goals
To the extent they become cost effective and feasible, DERs such as combined PV and storage
systems located at customer premises can enhance customer’s electricity reliability, lower
customer utility bills, improve community resiliency, and lower electricity transmission losses.
18 Inverters are becoming more versatile and new inverter standards will enable distributed energy resources such
as PV and storage systems to provide fast-acting local grid support services such as responding to changes in
system voltage and frequency. CPAU is in the process of testing these features in one of the larger PV systems in
town to improve customer and CPAU distribution system power factor during peak load periods.
14
As initiatives such as Community Solar or Ecodistricts19 help leverage the value of DERs, CPAU
will be well-positioned to facilitate the adoption of these systems where they benefit the
community.
Since CPAU’s electric supply is already carbon neutral, wide adoption of DERs in Palo Alto will
not reduce the community’s carbon footprint, but could help the statewide goal of increasing
the penetration of intermittent renewable electricity. In addition, Palo Alto’s initiative to
electrify water heating with efficient heat pump water heaters has the potential to add value as
energy storage mechanism in the long run by heating water during the times of day when
electricity prices are low20.
NEXT STEPS
Staff will return to the UAC and Council in early 2017 with a recommendation on whether to set
a goal for energy storage and an overall DER strategy. A pilot program may be recommended to
site energy storage systems at customer premises, for both residential and commercial
applications. Incentives for such a program would be identified as a Resource Impact.
RESOURCE IMPACTS
If an energy storage pilot program is recommended and approved, it could cost $250,000 in
customer rebates. Such a program would be administered along with City’s existing Demand
Response program. The staff resources needed for an expanded Demand Response and
Distributed Energy Resource program is anticipated to be 0.2 FTE, and would be managed with
existing resources.
POLICY IMPLICATIONS
Energy storage is a key technology to enable increased penetration of renewable energy in
California and, when installed in customer premises, reduce their utility use. These two aspects
conform to Utilities Strategic Plan objectives and Council policy on environmentally sustainable
utility and customer programs. Any use of storage systems to benefit from energy market price
differentials will be done in conformance with City’s energy risk management policies.
ENVIRONMENTAL REVIEW
The UAC’s discussion of energy storage and microgrid technologies is not a Project requiring
California Environmental Quality Act review.
19 Ecodistrict is a community level project to achieve various sustainability goals. One such goal could be self-
sufficiency in energy by a collective subscription to a larger scale community owned PV system.
20 CPAU’s electrification plan incorporates this possible application of using heat-pump water heaters as energy
storage devices in the long term.
ATTACHMENTS
A. Description of Energy Storage and Microgrid Technologies
B. Value of Electricity Storage in Providing Services to the City of Palo Alto
C. Case Studies of Battery Energy Storage Applications in Palo Alto
D. Thermal Energy Storage in Palo Alto
E. Outline of Energy Storage Regulations, Policies and Incentives
PREPARED BY:
REVIEWED BY:
APPROVED BY:
ANNE-LAURE CUVILLIEZ, Management Specia list
;fl.ENA PERKINS, Resource Planner y;1vA SWAMINATHAN, Senior Resource Planner
'UjN,J RATC~YE, Assistant Director, R"'es.ource Management
/7d11-Vd c£~ J!!' v~
__,ED SHIKADA
4
Interim Director of Utilities
15
Attachment A
A-1
Description of Energy Storage Technologies and Microgrid Technologies
1. Energy Storage technologies
Please refer to Staff Report 4384 for a review of energy storage technologies. The vast majority
of current grid connected energy storage systems 1 (90%) are pumped hydro projects, with 28
GW installed in the U.S. Thermal storage is the second most installed storage technology with
855 MW of storage in the US (~3%). 740 MW of Compressed Air energy Storage facilities exist in
the U.S, which represents 2.4% of the US capacity. Li-ion batteries (1.4%), lead acid batteries
(0.5%), flywheels (0.3%) and flow battery 0.1% follow. The fastest growing residential and
commercial applications of storage in California use battery energy storage systems (BES), much
of the report outlines applications of such systems. Thermal energy storage (TES) system
applications were also reviewed.
2. Microgrids
a. Microgrids value
The value of microgrids concentrates around four main areas (see Figure A1):
- Security: by offering an uninterruptible power supply for critical loads.
- Reliability: contiguous quality power supply 24/7 with local generation
- Sustainability: allows the integration of local renewable generation
- Cost efficiency: opportunities to do peak shaving, demand-response, and hedge against
high grid prices
Figure A1: Graphical representation of microgrid values
1 http://www.energystorageexchange.org/
Security
Reliability
Sustainability
Cost
efficiency
UPS for critical
loads
Islanding
Lower CO2 footprint
On-site generation
Peak shaving
Grid independence
Hedging
Effective energy
management
Attachment A
A-2
Microgrids can provide several services to the main grid:
- Ancillary services
- Demand/response, Curtailment
- Ramping, flexible capacity
b. Key components and functions of a microgrid
The microgrid needs to be able to operate the loads and energy sources in grid connected or
islanded mode and transition smoothly between the two modes. Hence, the microgrid has the
following needs:
- Islanding detection: During islanding mode the microgrids is responsible of voltage and
frequency regulation. The microgrid controller provides these regulation services.
Detection can be done locally, by measuring local variables (voltage, frequency) or
remotely by communicating with the main grid.
- Fault current protection: The microgrids require detection and protection against fault
current flows, i.e. short circuits.
- Power quality: Harmonic contents and voltage unbalance. This can also provide
ancillary services to the main grid.
- Black start: when islanded
Other desirable functionalities of the microgrids include:
- Energy optimization: this includes power curtailment, peak shaving, storage
management
Those functions are performed by the microgrid master controller (see Figure A2), supported by
a strong communication and sensor network. The main function of the master controller is to
match loads and generation (See A2 and A3) and to provide monitoring of the microgrid.
Figure A2: Master Controller functions within the microgrid
Attachment A
A-3
Figure A3: example of microgrid block diagram, Experimental Power Grid Centre (EPGC)
microgrid test facility2
The main applications of the commercial microgrids are for community-sized systems and
campuses that have critical loads to protect (i.e. fire station, police station, and
communications) and want to integrate local renewables in the grid.
c. Nanogrids
Nanogrids are microgrids for a single-load or single-building microgrid. Nanogrids can also
island from the main grid. The main commercial applications of nanogrids are residential homes
and single commercial buildings with solar panels and back-up battery storage.
2 Thangavelu et al., Integrated Electrical and Thermal Grid Facility - Testing of Future Microgrid Technologies, Energies 2015,
8(9), 10082-10105, http://www.mdpi.com/1996-1073/8/9/10082/htm
Attachment A
A-4
Figure A4: Illustration of a nanogrid in a residential house
The PV panels and battery bank are connected to the inverter. The main breaker is the point at
which the house can be islanded from the grid. The battery, PV, critical loads and inverter
interaction is managed at the subpanel interface (See Figures A4 and A5). The utility meter is
located between the main grid and the main breaker.
Figure A5: Main elements of a nanogrid
Attachment A
A-5
Two different design philosophies can be adopted for nanogrids. Those grids can operate in
Direct current (DC) or alternating current (AC) current. The two different strategies and the
corresponding systems depicted on Figure A6 depend on how many inverters are used in the
system. PV panels produce energy in DC current, and most houses loads requires AC current.
Batteries take DC current as well.
In the AC strategy, the DC current from the PV panels in converted to AC through an inverter
and can serve house loads or be exported to the grid. When charging the battery, the current is
converted back to DC through a second inverter. This type of installation is usually chosen when
the storage is added after the PV panels were already installed.
In the DC strategy, the DC current from the PV panels can be used to charge the battery directly
or be converted to AC through an inverter to be used for the house or exporter to the grid. Only
one inverter is required. Energy from the grid cannot be used to charge the batteries.
Figure A6: Schematic representation of AC (left) and DC (right) energy storage
The advantages and differences of both systems are outlined in Table A1.
Table A1: Comparison of AC and DC storage system
Attachment B
B-1
Value of Electricity Storage in Providing Services to the City of Palo Alto
This section describes in detail the 13 services that storage systems could provide to the three
stakeholder classes—customers, utility and the California Independent System Operator
(CAISO)—as outlined in the report.
Table B1: Summary table of 13 services provided by storage
Service Percentage of
cost
Evolution
A.
SO
/
R
T
O
S
e
r
v
i
c
e
s
1. Frequency regulation 15%
Possible at medium term. Revenue
streams in CAISO are not beneficial
at the moment.
2. Spin/Non-Spin Reserve 7%
Unlikely to become financially viable
in the years to come. Regulation is
the service generating the most
revenue at the moment
3. Voltage support N/A at the time
Unlikely since the burden is on the
generators.
4. Energy Price
Differentials
8%
Not beneficial for this purpose only,
but can provide additional value
streams for other usage. Could
evolve if gas prices go up.
B.
U
t
i
l
i
t
y
Se
r
v
i
c
e
s
5. Resource Adequacy 15%
Not beneficial for this purpose only,
but can provide additional value
streams for other usage.
6. Transmission Deferral 0%
Not beneficial in the case of Palo
Alto since transmission is billed by
unit of energy.
7. Transmission
Congestion Relief
10%
Could become necessary if
congestion becomes a big problem
Attachment B
B-2
8. Distribution Deferral 50% ( case by
case) – but N/A at
the moment in PA
On a case by case basis. Expensive
upgrades unlikely because of current
state of transformers.
9. Distribution loss savings <1%
Not beneficial for this purpose only,
but can provide additional value
streams for other usage.
C.
C
u
s
t
o
m
e
r
S
e
r
v
i
c
e
s
10a. Backup power -
residential
<1%
Not beneficial, especially with high
reliability and unlikely to go up
enough to justify an investment.
10b. Backup power -
commercial
case by case
Can be 100%
Already financially viable if the
industry is highly dependent on
electricity and critical loads are low
(i.e. server vs full building). Likely to
become a package with other
services to the grid, although those
services might be conflicting.
11. Time-of-Use Bill
Management
<1%
Highly dependent on TOU rates.
Unlikely to go up because peak
consumption is not an issue in Palo
Alto.
12. Demand Charge
Reduction
40%
Getting closer to competitive. Likely
to become more competitive as
more offerings become available.
13. Increased-PV Self-
Consumption
18%
Unlikely to go up with CPAU low
electricity tariffs.
Attachment B
B-3
A. ISO/RTO Services
Ancillary services provide the CAISO the resources to reliably maintain the balance between
generation and load. The different types of ancillary services are described in Table B2.
Table B2: Ancillary services description1
Storage technologies like batteries and flywheels are most qualified for fast response times,
which cheaper gas peakers struggle to achieve at low standby cost. Gas peakers need to be
running continuously at low power and burn fuel in order to be online within minutes, a
requirement which is easily achieved by a battery.
The City of Palo Alto’s 56 MW share of the Calaveras Hydroelectric Project satisfies the ancillary
services needs of the city. This study evaluated the possible value that could come from owning
new storage technologies for ancillary services.
1 http://web.ornl.gov/~webworks/cppr/y2001/rpt/122302.pdf
Attachment B
B-4
1. Frequency regulation
Most US electric equipment relies on a grid operating at a frequency of 60 Hz with very low
tolerance for variation. When the demand and supply are not exactly matching, the grid
frequency varies. Storage, by absorbing or releasing power, can provide regulation to increase
or decrease the frequency of the grid.
CAISO monthly market performance reports2 contain average ancillary services prices for
regulation in the Day Ahead market for 2015. The average payment for regulation in 2015 was
$8.77 per MW and per hour.
It is noteworthy that ancillary services prices have been trending upward in January 2016.
Projected average prices for 2020 are about 15$/MW, but should reach at least 35$/MW for
several hours per day.3 FERC Order 755 has stipulated that ISOs implement “a payment for
performance that reflects the quantity of frequency regulation service provided by a resource
when the resource is accurately following the dispatch signal.”4 However, in the current CAISO
market the mileage payment5 that act as payment for performance is too low to be relevant
with $0.01-$0.03/MWh in the Real Time market and 0.09$/MWh in the Day-Ahead market.
Hence this study did not consider a mileage payment.
Data from the model prepared by StrateGen for the California Energy Storage Alliance (CESA)6
was used to assess the cost and revenue of battery for regulation.
At the assumed price of $600/kWh, batteries for regulations systems only do not make sense
financially. An installed price of under $50/kWh would make battery systems for regulation
break even under current pricing. Three strategies were considered: 1) several cycling per day;
2) only bid for the highest hour of the day (~15$/MWh); and 3) only bid for the highest ten
hours of the month (~50$/MWh).
The optimum is to bid for 5-7 hours a day (see Figure B1) and reserve the use of battery for
other services for the rest of the day, which could complement the revenue of the system. The
marginal benefice of bidding additional hours on a 20-year system did not map out to a
significant increase in revenue because of the replacement cost of the battery. The
replacement cost of the battery was assumed equal to the initial installation cost.
The ancillary services payment per MW per hour has been lower in the past years due to the
low prices of gas. In 2010 prices were around $30/MW. Prices in 2020 should reach at least
2 https://www.caiso.com/market/Pages/ReportsBulletins/Default.aspx
3http://energy.gov/sites/prod/files/2015/12/f27/Ancillary%20Service%20Revenue%20Potential%20for%20Geothermal%20Gen
erators%20in%20California.pdf
4 https://www.ferc.gov/whats-new/comm-meet/2011/102011/E-28.pdf
5 https://www.caiso.com/Documents/Pay-PerformanceRegulationFERC_Order755Presentation.pdf
6 http://www.strategen.com/storagealliance/sites/default/files/White%20Papers/CESA_FR_White_Paper_2011-
02-16.pdf
Attachment B
B-5
35$/MW for 5 hours per day. In this case the breakeven price would be around $150/kWh
installed.
Note: The utility would be unlikely to own the system as considered in this study, and would
have to contract through a third party to own and manage the storage system. This will likely
increase the prices of storage and delay the timeline at which regulation could become
profitable.
Figure B1: Maximum battery system investment cost per kWh needed for a null 20-year NPV
regulation in function of cycles per day
2. Spin / Non-Spin Reserve
Storage can bid as spinning, non-spinning or supplemental reserve. However, the value of those
services is lower than frequency regulation by at least 50%. The return on investment of those
services would be lower than for regulations. Hence, this study did not consider the economics
of those markets.
3. Voltage support
Reactive power is the non-usable part of power (see Figure B2). The power factor is defined as:
𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑝𝑝𝑝𝑝= 𝑃𝑃,𝑝𝑝𝑝𝑝𝑓𝑓𝑟𝑟 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑆𝑆,𝑓𝑓𝑝𝑝𝑝𝑝𝑓𝑓𝑝𝑝𝑝𝑝𝑎𝑎𝑓𝑓 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
$50.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24Ma
x
i
n
v
e
s
t
m
e
n
t
c
o
s
t
i
n
$
/
k
W
h
Number of cycles per day
Attachment B
B-6
Figure B2: Real, Apparent and reactive power, By Wikieditor4321 - Own work, CC BY-SA 4.0,
https://commons.wikimedia.org/w/index.php?curid=45518503
In order to supply a load, the real power must be equal to the load. A high reactive power
increases the ratings necessary in the lines, but decreases the efficiency since only “real power”
is usable. For example, if the power factor is 0.6, then apparent power is 1.67 times the load,
which increases transmission losses. In order to carry this extra power, all the transmission and
distribution system would need to be oversized. This is why grid-tied systems are required to
supply power above a defined power factor.
However, there might be times where the independent system operator wishes to increase or
decrease the apparent power in order to keep the grid operating within the voltage range that
it can tolerate. In that case, reactive power is the main source of control of the apparent power
experienced by the transmission lines. In order to keep the transmission lines within
operational range of voltage, injection or withdrawal of reactive power is necessary.
CAISO “maintains acceptable voltage levels and VAR flow on the CAISO Controlled Grid”
through participating generators that are required to operate within a specified power factor
band. Participating load at interface points are not compensated, only generators.7
Payment to generators is in form of lost opportunity cost to the Locational Marginal Price (LMP)
when operating outside of normal conditions. CAISO has also procured voltage control through
Reliability-Must-Run facilities at the rate of $50,000/MVAr or $50/kVAr.8
Capacitors are best suited to solve reactive power issues, and increase power factor.9 However,
this will need to be procured by power producers. Batteries have been proven effective at
controlling power drops from local distributed generation, which would be useful in the case of
microgrids.10 Palo Alto would only be concerned if the local generation power factor became
problematic.
7 https://www.caiso.com/Documents/3320.pdf
8https://www.caiso.com/Documents/CalPeakandMalagaCommentsReactivePowerRequirementsandFinancialCompensationRevi
sedStrawProposal.pdf
9 http://www.hv-eng.com/2011CEDCapacitors.pdf
10 J. Yi, P. Wang, P. C. Taylor, P. J. Davison, P. F. Lyons, D. Liang, S. Brown and D. Roberts, “ Distribution Network Voltage Control
Using Energy Storage and Demand Side Response”, 2012 3rd IEEE PES, ISGT Europe, Berlin
Attachment B
B-7
4. Energy Price Differentials
A storage system enables buying electricity when prices are low and use the electricity when
prices are high. For Palo Alto, the average price difference between peak and off-peak pricing is
0.00717 $/kWh (expected to rise to $0.011/kWh by 2025). At this revenue, over 10,000 cycles
and with 80% round trip efficiency, a battery would only generate $57 per kWh of installed
capacity, which does not financially justify such a system.
B. System/Utility Benefits
5. Resource Adequacy
CAISO mandates that each Load Serving Entity (LSE) must submit a resource adequacy plan “to
satisfy its forecasted monthly Peak Demand and Reserve Margin for the relevant reporting
period.”11 Palo Alto currently procures capacity at the rate of $28/kW-yr. The offers that the
utility received from remote storage have been at least double this value. A current flexible
resource adequacy policy is being considered12, but the City’s ownership share of the Calaveras
Hydroelectric Project would satisfy those requirements.
6. Transmission Deferral
A higher load can trigger a transmission line upgrade to accommodate a higher power rating.
However, if the upgrade is triggered by a peak load that happens only a couple hours of the
day, months or year, it might be advantageous to procure storage to displace the peak
consumption to a later hour of the day instead of upgrading the lines.
CPAU is currently paying for transmission charges per unit of energy (kWh) and does not
experience demand charges. Therefore peak shifting for avoiding transmission charges does not
offer any financial incentive for CPAU. The demand is satisfied by the resource adequacy
described in the previous paragraph and procured at a price that do not justify considering
storage.
7. Transmission congestion relief
CPAU has Power Purchase Agreements (PPAs) with generators in California. CPAU then sells this
energy at the Locational Marginal Price (LMP) at the node where generation interconnects.
Nodes that experience a higher load than the transmission line can accommodate are called
congested node and experience a lower price for energy because of congestion charges. In
some cases the energy price can be negative and force the curtailment of the generation. This
study analyzed one year of LMP data at the interconnection node for the Hayworth solar farm
with which the City has a PPA13 and considered two strategies:
11 https://www.caiso.com/Documents/CIRAResourceAdequacyToolUserGuideforMarketParticipants.pdf
12 https://www.caiso.com/Documents/StrawProposal-FlexibleResourceAdequacyCriteria-
MustOfferObligationPhase2.pdf
13 City of Palo Alto Solar PV PPA Projects -
https://www.google.com/maps/d/viewer?mid=zm8TOActUeOA.k1KfA2u9T8u4&hl=en_US&usp=sharing
Attachment B
B-8
1. Store the production of the four most congested hours of the day (between 11AM and
3PM) and sell the storage during the highest three hours of the evening peak; and
2. Store the production of the most congested hour of the day (at 12PM) and sell the
storage during the highest priced hour of the evening peak.
The power plant’s daily production was estimated using PV watts14, and assumed roundtrip
efficiency around 70%. In each case the storage did not make economic sense. For a high
efficiency (93%) battery with one discharge per day, the value per kWh displaced increased to 2
cents, which is still below the required value to break even.
However, if the trend of negative pricing during peak hours keeps increasing and battery prices
keeps falling then there would be scenarios in which batteries would be cost effective. For
example, if the amount per kWh displaced reached $0.04/kWh on average and the batteries
reached $200/kWh then the storage would be cost effective.
8. Distribution Deferral
Distribution deferral uses storage to absorb a growing load on a transformer. The growing load
would trigger a transformer upgrade, but with storage peak shaving, the transformer upgrade
can be deferred to a later time. This allows for a longer utilization of the infrastructure and
lowers the investment risk of the utility.
According to the Sandia study “Electric Utility Transmission and Distribution Upgrade Deferral
Benefits from Modular Electricity Storage” by Jim Eyer 15, the distribution deferral is more
profitable in its first year, so the study makes a case for reusable and transportable storage that
will defer upgrades up to the point that the upgrade is necessary and then be installed on
another transformer. In this case, they find that with an average cost of transformer upgrade
around $75/kW, the value of reusing the storage system in 5 different locations would reach a
cumulative value of $1,700/kW after 10 years. For three hours battery storage, this represents
$566/kWh which could be cost effective in the future.
As a case study, data from the 2009 PNNL study “Avoiding Distribution System Upgrade Costs
Using Distributed Generation”16 was used. The cost data of different transformer upgrade
projects was compared to the cost to defer the entire upgrade capacity with a battery system:
1. Four-hour Li-ion battery system at $600/kWh
2. Three-hour Li-ion battery system at $600/kWh
3. Three-hour 2020 horizon for Li-ion batteries at $300/kWh
The results show that most transformer upgrades would be more cost effective than a full
upgrade with a battery. Certain projects which are especially costly can beneficiate from a
battery system compared to an upgrade, as long as the peak is narrow enough that the battery
14 http://pvwatts.nrel.gov/
15 http://prod.sandia.gov/techlib/access-control.cgi/2009/094070.pdf
16 http://www.sandia.gov/ess/publications/SAND2010-0815.pdf
Attachment B
B-9
has sufficient capacity. By 2020, if battery costs are halved, more battery systems could become
more cost effective than an upgrade. These results are also confirmed in the Sandia report,
mentioning the E3/EPRI study17 which reported values of T&D deferral for PG&E ranging from
$230/kW and $1,173/kW, in which the upper range would make batteries close to cost
effective.
CPAU’s current distribution transformer upgrade costs range from $40 to $220/kW. The best
candidates for deferral are transformers where the projected load growth is slow and the peak
band is narrow. The smaller the storage needed for the one-year deferral, the more cost
effective it is, since the investment is smaller. Smaller upgrades tend to be pretty expensive per
kW, but the storage power required is generally too high to make sense for a deferral (>10%). In
2016, the only systems that could be cost effective for a one-year deferral have a slow load
growth (under 2%) and high T&D cost (over $100/kW) which is experienced by small
distribution overhead transformer upgrades in Palo Alto. However, the storage power required
for the distribution overhead transformers is generally above 20%, which makes the deferral
not cost effective. In the future, with an average cost of $300/kWh installed for batteries,
projects with high cost and moderate growth, or low growth and average cost could benefit
from a one-year deferral through battery storage. So far CPAU transformers all have above 20%
remaining capacity and the load has been stable, which means that no upgrade will be required
in the next years. In the event that several transformers reach capacity in the long-term, mobile
battery storage could be beneficial to defer several upgrades.
9. Distribution loss savings
The system experiences on average 3% losses to distribute electricity. However, the losses are
higher during peak hours (4%) than off-peak (2%). By storing electricity locally during off-peak
hours and distributing it during peak hours, CPAU can avoid 2% distribution losses.
𝐸𝐸𝑟𝑟𝑝𝑝𝑓𝑓𝑓𝑓𝑝𝑝𝐸𝐸𝑓𝑓𝐸𝐸𝑓𝑓𝐸𝐸 𝑠𝑠𝑓𝑓𝑠𝑠𝑝𝑝𝑠𝑠(𝑘𝑘𝑘𝑘ℎ)=𝐸𝐸𝑟𝑟𝑝𝑝𝑓𝑓𝑓𝑓𝑝𝑝𝐸𝐸𝑓𝑓𝐸𝐸𝑓𝑓𝐸𝐸 𝑝𝑝𝑝𝑝𝑝𝑝𝑓𝑓ℎ𝑓𝑓𝑠𝑠𝑝𝑝𝑠𝑠 (𝑘𝑘𝑘𝑘ℎ)× �10.98 −10.96� 𝐸𝐸𝑟𝑟𝑝𝑝𝑓𝑓𝑓𝑓𝑝𝑝𝐸𝐸𝑓𝑓𝐸𝐸𝑓𝑓𝐸𝐸 𝑠𝑠𝑓𝑓𝑠𝑠𝑝𝑝𝑠𝑠(𝑘𝑘𝑘𝑘ℎ)=𝐸𝐸𝑟𝑟𝑝𝑝𝑓𝑓𝑓𝑓𝑝𝑝𝐸𝐸𝑓𝑓𝐸𝐸𝑓𝑓𝐸𝐸 𝑝𝑝𝑝𝑝𝑝𝑝𝑓𝑓ℎ𝑓𝑓𝑠𝑠𝑝𝑝𝑠𝑠 (𝑘𝑘𝑘𝑘ℎ)× 2.13%
For peak prices around $30/MWh, that’s $0.64/MWh shifted (0.064 cents per kWh). With this
revenue, over 10,000 cycles and with 80% round trip efficiency, a battery would only generate
$5.10 per kWh of capacity in addition to the $57 per kWh of benefits, which does not justify
financially such a system.
17 http://connection.ebscohost.com/c/articles/9508071617/marginal-capacity-costs-electricity-distribution-
demand-distributed-generation
Attachment B
B-10
C. Customer benefits
10. Backup power
In order to estimate the cost of customer outage for the different classes of customers given
CPAU’s reliability data, the Interruption Cost of Energy tool funded by DOE18 was used using
most default parameters with an adjustment for Palo Alto median income to $123,495 from
2013 data19 adjusted to 2016 dollar value (see Table B3).
Table B3: Estimation of 2012-2015 average yearly cost of power interruption in Palo Alto for
each customer class
The average yearly cost of outages shows that residential customers would derive very little
economic value in having a backup power given that their annual losses are relatively low.
However, for certain commercial customers, investing in storage as a backup power for critical
loads can be justified to mitigate losses in case of power interruption, especially if the critical
loads are small.
Diesel generators cost about $200/kW. However, a 5kW generator will consume about 18
gal/day, which costs about $40-50 per day to run. A larger commercial-scale generator sized at
300 kW will consume 20 gal/hr. A battery system has no running cost. Given the reliability of
CPAU, a battery storage system will never be cheaper than a diesel generator for residential or
18 http://www.icecalculator.com/
19 http://www.city-data.com/income/income-Palo-Alto-California.html
Residential customer
Small commercial
customer (<50,000
kWh)
Medium and large
commercial customers (
>50,000 kWh)
Average yearly cost of power
interruption $26.96 $852.86 $65,413.18
$-
$10,000.00
$20,000.00
$30,000.00
$40,000.00
$50,000.00
$60,000.00
$70,000.00
Average yearly cost of power interruption per customer class
Attachment B
B-11
commercial applications. The exception to this rule would be in case of an extended period of
time without power (i.e. earthquake related) and with the inability to supply enough diesel to
run a generator, a commercial customer could then beneficiate from a PV+storage system that
would allow the critical operations to keep running without a diesel supply.
11. Time-of-Use Bill Management
When a customer is on a time-of-use (TOU) rate schedule, electricity is more expensive during
peak hours. Instead of consuming electricity during peak time, it might be more economical to
use the energy stored, and recharge using the grid during off-peak hours. The storage system
allows customers to optimize when they buy, store or export power. Peak shaving contributes
to lowering the demand on the grid during peak hours.
A study carried by Stanford student Tha Zin looked at the net present value (NPV) of peak
shaving with current CPAU rates. The dataset used in her analysis was the hourly electricity
consumption (load profile) data of 1,923 households in Bakersfield, California from August 1,
2010 to July 31, 2011. To evaluate the NPV of storage, the study varied the following
parameters: TOU rates 20, roundtrip system efficiency, and system costs as well as different
amount of peak shifted. For the last parameter, the battery was sized to shift at the peak load
for only a certain percentages of the days per year (5-100%). If the percentage of the days is
5%, then it means that the battery was sized to shift the highest 5% peaks of the year.
For each household, the NPV of a storage system was calculated. Results show that given the
current values in TOU, efficiency and cost only one customer out of the pool would have a
positive NPV with a storage system.
12. Demand Charge Reduction Commercial customers
See case study II in Attachment C.
13. Increased-PV Self-Consumption
See case study I in Attachment C.
20 http://www.cityofpaloalto.org/civicax/filebank/documents/32678
Attachment C
C-1
Three Case Studies of BES Storage Applications in Palo Alto
Outlined below is the analysis of three most relevant storage applications for Palo Alto:
I. Residential customer application. Storage is installed after solar PV panels with the
intent to do time-of-use bill management under the successor net energy metering
program to increase PV-self consumption.
II. A commercial customer application within Palo Alto (Palo Alto City Hall). The size is in
the tens or hundreds of kW/kWh range and designed to provide electric customer
demand charges reduction and meet CPAU resource adequacy needs.
III. A transmission grid-tied storage unit, either close to Palo Alto or located at one of Palo
Alto’s central PV plants. Due to the relatively large size, in the MW/MWh scale, it is
assumed that the system cannot be located within Palo Alto due to the lack of suitable
land. The application would be to provide CAISO services such as frequency regulation
and flexible resource adequacy capacity.
I. Residential customer PV+ storage
a) Description of the Storage System & Cost: Residential customer installing battery
storage to store the energy produced by the solar panels during the day and to use later
during the evening and night. The consumer scenario was identical to the one defined in
Attachment C of the NEM Successor Program Staff Report 1. The three options are: 1) no
storage; 2) a 3.3 kW/7 kWh system 2; and 3) a 6 kW/12 kWh storage system.3
b) Application: Increased PV Self-Consumption
c) Value: energy exported to the grid is paid the NEM successor program export rate of
$0.07485/kWh; current electric retail rates are $0.11029/kWh for Tier 1 (up to
11kWh/day) usage and $0.16901/kWh for Tier 2 (over 11 kWh/day) usage.
d) Results and Conclusion: Calculations can be found in Table C1 below. Figure C1 shows
how the energy delivery is reduced by the battery storage. When taking into account
the round trip losses and current energy prices, the 7 kWh system saved $169/year and
the 12 kWh system saved $194/year. When taking into account the annualized cost of
installation of storage ($130/kWh-yr for a ten-year warrantied system), the benefits are
not sufficient to justify the installation of the system, as the payment for solar + storage
is higher than solar only (see Figure C2). At a price of $280/kWh installed and a delta
between on-peak and off-peak electricity price of $0.10/kWh, storage systems will break
even.
e) Assumptions:
• Round trip efficiency was assumed to be 92%.
• In both battery scenarios, the customer stores as much power as possible during the
day to use it later at night.
1 https://www.cityofpaloalto.org/civicax/filebank/documents/51848
2 With the 7 kWh system, the customer might not be able to capture fully the excess energy during the summer days. Installed
cost was assumed to $9,500.
3 With the 12 kWh system, the customer do not export any energy to the grid year round.
Attachment C
C-2
• Solar installed cost was assumed to be $3.50/W-DC ( group-buy price)
• Investment Task Credit (ITC) was applied toward solar panels but not storage, since
the installation of storage was assumed to happen after the customer installed PV.
Figure C1: Representation of energy delivered, exported to the grid, consumed out of
storage, netted on site and lost in the three storage cases
Figure C2: Energy annual cost for no solar and the three storage cases considered, to be
compared with no solar case.
-4000
-2000
0
2000
4000
6000
8000
10000
12000
14000
Solar only Solar + 3.3 kW/ 7
kWh system
Solar + 6 kW/12
kWh system
kWh
annual
Losses
Energy delivered
Energy exported to the grid
Stored energy consumed
Solar energy netted
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
No solar Solar only Solar + 3.3 kW/ 7
kWh system
Solar + 6 kW/12
kWh system
An
n
u
a
l
i
z
e
d
c
o
s
t
Energy bill
Battery cost
Solar system cost
Attachment C
C-3
II. Commercial Customer Storage Application, Located at Customer Premises
a) Description of the Storage System & Cost: Commercial customer installing batteries with
the goal to reduce demand charges and provide resource adequacy value to CPAU.
Using the Palo Alto City Hall’s load, the recommended size for a leased system for the
building was about 18 kW/36 kWh (i.e. 18 kW capacity with 2 hours of charge) for an
annual cost of about $5,000.
b) Application: Demand charges reduction for commercial building customer and (flexible)
resource adequacy value to the utility.
c) Value: The customer’s cost for demand charges can be reduced (current demand rates
on the E-4 Rate Schedule are $14.04/kW-month during the winter and $19.68/kW-
month during the summer). In addition, if CPAU is able to dispatch these systems to
meet resource adequacy needs, these systems can harness higher value stream
currently valued at $28/kW-yr. Since most of these storage systems also come with
telemetry and dashboards profiling entire building loads in real time, building operators
are able to garner greater insights to more optimally operate the building. However, this
value was not considered in this analysis since it is not directly derived from storage.
d) Results and Conclusion: The annual cost of the system is compared to the annual
revenue stream as shown in Figure C3. Because of the flatter load profile shape, the
required capacity to shave off the peak is higher than if the peak was narrow and tall.
Resource adequacy related values are also relatively small. Thus, such commercial
systems are not cost effective in Palo Alto.
e) Assumptions:
• System life: 10 years
• O&M cost are considered negligible for the self-operated system
• Winter peak is 3-hour long and summer peak is 5-hour long.
Figure C3: Comparison of yearly revenue to cost of commercial battery storage for Palo Alto
City Hall
Notes: The commercial systems considered do not offer the ability to island, which would
harness additional value, although at a potentially higher cost.
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
Third party operated 18 kW/36 kWh system
An
n
u
a
l
r
e
v
e
n
u
e
Demand charges reduction
Resource Adequacy
Cost
Attachment C
C-4
III. Transmission Grid-Tied Storage Located Outside Palo Alto
a) Description of the Storage System & Cost: Battery Energy Storage (BES) located outside
Palo Alto and tied to the CAISO grid at 115 kV and sized at 20 MW/80 MWh (i.e. 20MW
capacity with 4 hours of charge). Annual capital cost was assumed to be around
$190/kW-yr, and O&M cost around $20/MWh with a maximum number of discharge
cycles allowed per year (about once per day).
b) Application: provision of CAISO ancillary services of frequency regulation and flexible
resource adequacy capacity
c) Value: Regulation services valued at $9/MW-hour 4 (now) and $25/MW-hr (after 2020);
capacity is currently valued at $28/kW-yr, flexible capacity valued at $50/kW-year (after
2020)
d) Results and Conclusion: The annual cost for the system is compared to the projected
revenue stream on Figure C4. While the potential maximal revenue through regulation
is high, the charges for battery discharge and the limitation of one discharge per day do
not provide an incentive for use for regulation services. The revenue from resource
adequacy only would be too low to justify the investment. Currently, additional revenue
of $2 million per year would be necessary to break even with being paid twice a day for
only one discharge. Being paid four times per day with only one charge-discharge cycle,
the revenue could break even by 2020. However, a better understanding of the amount
of energy dispatched per period called by the CAISO would be critical to improve the
understanding of the revenue stream from the provision of regulation services, since the
bidding strategy is essential in deriving value from this investment.
e) Assumptions:
• Current prices for round-trip regulation are around $8-9/MW-h but prices are
expected to rise to $20-30/MW-hr within the next years.
• Arbitraging the CAISO energy price differential and relieving economic
curtailment could not be considered because they would compete with
frequency regulation, as the high frequency regulation prices would happen at
the time of curtailment and high energy prices.
• Capacity for regulation can be rated from a 320 MW for a 15-minute discharge to
20 MW for a four-hour discharge. However, the payment occurs per MW-hr, so
all combinations are equivalent in our calculations.
• Capacity for flexible capacity was rated for four0-hour discharge period (20 MW).
• The analysis considered the following two cases for regulation dispatching:
1. Paid twice a day: the analysis assumed that the system gets dispatched on
average half of the hours that were bid and awarded. In that case the system
can bid twice the capacity of regulation-up and regulation-down
2. Paid four times a day: the analysis assumed that the system gets dispatched
on average a quarter of the hours that were bid and awarded. In that case
the system can bid four times the capacity of regulation-up and regulation-
down.
4 Regulation and other ancillary services procured by CAISO is in the form of a capacity payment for every hour.
Attachment C
C-5
Figure C4: Comparison of economics of grid-tied batteries based on utilization of batteries in
CAISO market
20 MW / 80 MWh
Attachment C
C-6
Table C1: Bill Illustration of a Residential Customer with a Solar PV System only, Solar + 7 kWh system and Solar + 12 kWh battery
system under the NEM Successor Rate
1.
T
o
t
a
l
E
n
e
r
g
y
C
o
n
s
u
m
p
t
i
o
n
(
k
W
h
)
2.
S
o
l
a
r
E
n
e
r
g
y
P
r
o
d
u
c
t
i
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n
(
k
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)
3.
E
n
e
r
g
y
N
e
t
t
e
d
O
n
-si
t
e
(
k
W
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)
4.
S
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a
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n
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G
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(
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)
5.
E
n
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D
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C
u
s
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(
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6.
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t
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u
s
t
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m
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r
-
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+
7
k
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m
(k
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)
7.
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n
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D
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t
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l
a
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+
1
2
k
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m
(
k
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)
8.
B
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l
C
h
a
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e
s
f
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y
D
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y
9.
B
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C
h
a
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g
e
s
f
o
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n
e
r
g
y
D
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d
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l
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+
7
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m
(k
W
h
)
10
.
B
i
l
l
C
h
a
r
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e
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f
o
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g
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D
e
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e
d
- So
l
a
r
+
1
2
k
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h
s
y
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t
e
m
(
k
W
h
)
11
.
B
i
l
l
C
r
e
d
i
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f
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r
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y
S
e
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i
d
- So
l
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12
.
B
i
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l
C
r
e
d
i
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f
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e
n
t
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i
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- So
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r
+
7
k
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s
y
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t
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m
13
.
M
o
n
t
h
l
y
B
i
l
l
w
i
t
h
S
o
l
a
r
o
n
l
y
14
.
Mo
n
t
h
l
y
b
i
l
l
w
i
t
h
S
o
l
a
r
+
7
k
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sy
s
t
e
m
15
.
Mo
n
t
h
l
y
b
i
l
l
w
i
t
h
S
o
l
a
r
+
1
2
k
W
h
sy
s
t
e
m
Jan 1,400 327 244 84 1,156 1,079 1,079 $175 $162 $162 ($6) $0 $169 $162 $162
Feb 1,204 314 250 64 954 895 895 $143 $133 $133 ($5) $0 $138 $133 $133
Mar 1,061 519 309 210 752 559 559 $107 $74 $74 ($16) $0 $91 $74 $74
Apr 918 610 311 299 607 414 332 $83 $51 $37 ($22) ($7) $61 $44 $37
May 885 704 341 363 543 343 209 $72 $38 $23 ($27) ($11) $45 $27 $23
Jun 882 659 352 307 530 337 248 $70 $38 $27 ($23) ($7) $47 $30 $27
July 929 711 377 334 552 352 245 $73 $40 $27 ($25) ($9) $48 $31 $27
Aug 894 582 312 270 582 382 334 $78 $45 $37 ($20) ($4) $58 $41 $37
Sep 930 551 301 250 629 436 399 $87 $54 $48 ($19) ($3) $68 $51 $48
Oct. 943 467 266 201 677 492 492 $94 $63 $63 ($15) $0 $79 $63 $63
Nov 954 348 191 157 764 620 620 $110 $85 $85 ($12) $0 $98 $85 $85
Dec 1,184 299 198 101 985 892 892 $147 $131 $131 ($8) $0 $139 $131 $131
Tot: 12,184 6092 3452 2640 8732 6,801 6,302 $1,240 $914 $848 ($198) ($41) $1042 $873 $848
Attachment D
D-1
Thermal Energy Storage Costs in Palo Alto
Thermal Energy Storage
Thermal energy storage (TES) is a “technology that stocks thermal energy by heating or cooling
a storage medium so that the stored energy can be used at a later time for heating and cooling
applications and power generation. TES systems are used particularly in buildings and industrial
processes.”1 This study focuses on the use of ice for deferring electric consumption for cooling
purposes in HVAC systems. In this process, cheaper night-time electricity is used to freeze a
fluid, which then reduces the electricity needed to provide air conditioning when electricity is
more expensive during the day.
History of TES in Palo Alto
In the late 1980s and early 1990s the City of Palo Alto Utilities (CPAU) had a generous incentive
program for TES through for commercial customers. These incentives were motivated by steep
and ratcheted demand charges imposed on Palo Alto by PG&E. Most of the systems installed
under this program have been dismantled or decommissioned due to failures, need for space,
or a lack of engaged operation and maintenance staff.
A TES study was carried out in 2013 an provided in the 2014 Energy Storage Procurement
report (see Attachment E (Thermal Energy Storage in Palo Alto) of Staff Report 4384.2)
TES benefits
The goal of the incremental addition of a TES system to existing chiller-based cooling systems’ is
to be able to turn off (completely or partially) the chiller during peak hours. This results in the
following benefits:
- Reduction of demand charges for commercial customers
- For customers on Palo Alto’s large commercial TOU rate, a TES system also delivers
energy charge savings by shifting energy consumption from high-price periods to low-
price periods
- Increased reliability of the cooling system
- Potential participation in Demand-response program
However, the need for large spaces for the TES system can be a challenge.
Utility-Owned and Operated Thermal Energy Storage
Another model for deploying TES which has become more popular is based on utility-ownership
and control. The utility-ownership model has been developed by Ice Energy, which makes the
“Ice Bear”, a packaged roof-top ice storage units that integrate with refrigerant-based (direct
exchange, or DX) roof top units (RTUs) commonly found in commercial cooling applications.
When called on by the utility, the Ice Bear will shut down the RTU compressor and condenser
1 https://www.irena.org/DocumentDownloads/Publications/IRENA-
ETSAP%20Tech%20Brief%20E17%20Thermal%20Energy%20Storage.pdf
2 https://www.cityofpaloalto.org/civicax/filebank/documents/38915
Attachment D
D-2
fans and provide cooling by sending ice-cooled refrigerant through a new evaporator coil
placed in series with the RTU’s existing coil.
Potential benefits of utility-controlled TES are:
- Resource adequacy cost reduction for the utility
- On-peak/off-peak energy purchase differentials
- Transmission and distribution deferral
- Control of additional Demand-Response assets
- Energy efficiency upgrade with TES installation
The value of TES is substantially lower in Palo Alto due to the milder climate and rather flat load
profile during the summer.
Update of 2013 study
Staff updated the 2013 model with the most current data of the system and utility cost and
confirmed that none of the TES systems considered makes economic sense currently. The
benefit-cost ratio is 0.39 for a full TES system and 0.7 for a partial TES system. A utility-
controlled Ice Bear program had a benefit cost ratio of 0.46.
Other TES systems
Heat pump or electric resistance water heaters for homes can also be used as TES. Water is
heated during off-peaks hours (either at night or with PV during the day) and then stored in a
tank for a later usage (see Figure D-1). As CPAU embarks on electrifying natural gas appliances,
it may want to evaluate the merits of encouraging customers to install controllable water
heaters that can be called upon by the electric utility to meet electric grid optimization needs.
Figure D-1: Load profile of traditional water heater vs. use during discounted rate periods
Water heated during discounted rate period
Attachment E
E-1
Energy Storage Regulation, Policies and Incentives
Energy Storage Regulations and Policies
California’s AB 2514 1 and the associated regulations are among many state policies designed to
encourage energy storage. In October 2013 the California Public Utilities Commission (CPUC)
established an energy storage target of 1,325 megawatts for Pacific Gas and Electric Company
(PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E) by 2020, with
installations required by the end of 2024. The CPUC decision also establishes a target for
Community Choice Aggregators and electric service providers to procure energy storage equal
to 1% of their annual 2020 peak load by 2020 with installation no later than 2024, consistent
with the requirements for the Investor Owned Utilities (IOUs)2. On February 28, 2015, the three
IOUs (PG&E, SCE and SDG&E), filed their Energy Storage (ES) Application containing a proposal
for the first ES procurement period (2014-2016).3
In 2015, Oregon became the second state to approve energy storage targets. According to
House Bill 2193 4, electric companies with more than 25,000 customers will have to put 5 MWh
of energy storage in service by January 1, 2020, but it may not exceed 1% of the company peak
load (as of 2014). Laws promoting energy storage in New York and Texas have also been
passed, although these do not specifically require energy storage targets. Arizona, Connecticut,
Minnesota and Vermont added legislation that will clarify and promote storage.5 Washington
State gave $14.3 million in matching grants for utilities’ energy storage projects, and their 2015
budget included additional grants. Con Edison in NY offered $2,600/kW for thermal energy
storage (TES) and $2,100/kW for battery storage for projects completed by June 2016.6 New
Jersey offers $300 per kWh of storage capacity up to $300,000 or 30% of the project cost.7
Several states including Florida, New Jersey and Massachusetts offers loan and grants for the
development of resilient solar + storage systems.8 Other legislation indirectly supports the use
of storage systems in the case of rooftop solar installation. For example, Docket No. 2014-0192 9
in the state of Hawaii will support self-supply and benefit from temporal or locational energy
price differences with the use of batteries for rooftop solar owners. Hawaiian Electric Company
(HECO) issued an RFP for 0 to 200 MW of Energy Storage for Oahu in 2014.10
At the federal level, the Storage Act provide a 20% investment tax credit for grid-connected
energy storage systems and a 30% credit for behind-the-meter systems.11 The Federal Energy
Regulatory Commission (FERC) is also seeking to level the playing field for energy storage to
participate in energy markets. In 2007 and 2008, FERC issued Orders 890 and 719, which
1http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=200920100AB2514 2http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M079/K171/79171502.PDF
3 http://www.cpuc.ca.gov/General.aspx?id=3462 4https://olis.leg.state.or.us/liz/2015R1/Downloads/MeasureDocument/HB2193 5http://www.renewableenergyworld.com/ugc/blogs/2016/01/state_energy_storage.html 6http://www.coned.com/energyefficiency/demand_management_incentives.asp 7 https://njcepelectricstorage.programprocessing.com/content/home
8 http://solaroutreach.org/wp-content/uploads/2015/09/SLStorage.pdf
9 http://puc.hawaii.gov/wp-content/uploads/2015/10/DER-Phase-1-DO-Summary.pdf
10 https://www.hawaiianelectric.com/clean-energy-hawaii/request-for-proposals---energy-storage-system
11http://www.energy.senate.gov/public/index.cfm/files/serve?File_id=FEDB4A77-7073-422D-B259-C8AF7F59E627
Attachment E
E-2
opened the door for non-generation resources such as energy storage to participate in ancillary
services markets. In response, CAISO made changes to its ancillary services operating and
technical requirements to enable these non-traditional resources to participate, such as
reducing the minimum size and output duration capability for eligible resources.12
In 2011, FERC enacted Order 755 specifically addressing frequency regulation services. As
described in Attachment A, some energy storage technologies are able to provide frequency
regulation services more quickly and accurately than conventional generating facilities;
however, markets for frequency regulation services typically do not differentiate between more
effective regulation providers. Order 755 attempts to rectify this by requiring appropriate “pay
for performance” in organized ancillary services markets. FERC notice proposes rules to reduce
other barriers that prevent energy storage facilities from participating in markets for ancillary
services as well as imposing similar “pay for performance” requirements on transmission
providers in traditionally regulated states. In July 2013, FERC issued Order 784 which eased the
market entry for third-part Ancillary Services providers and improved market transparency.
In response to FERC Order 755, CAISO modified the regulation up and regulation down product
in May 2013 with a market based mileage payment with accuracy adjustment.
Energy Storage Incentives and procurement activities in California
In 2009, the CPUC ruled that California’s IOUs must develop a Permanent Load Shift (PLS)
program to encourage TES directly. A statewide pilot PLS program from 2008-2011 provided
$500/kW of peak demand reduction. The current incentive for IOUs is $875 per kW of electric
load shift on the highest on-peak cooling load day of a customer’s annual cooling load profile.
The incentive is capped at 50% of project cost and $1.5 million per customer.
Customers of California’s IOUs are also eligible for the Self Generation Incentive Program
(SGIP), which includes a $1.31/Watt incentive to advanced energy storage systems.
California’s IOUs are also actively involved in energy storage project development to satisfy the
targets mandated by the CPUC. The first round of procurement RFOs was released in 2014 and
the next round of procurement will happen in 2016. The current progress of PG&E, SCE and
SDG&E has been summarized in Tables E1 and E2.
Most publicly owned utilities (POUs) declined to procure storage in 2014 for lack of cost
effective options. Seven POUs did set some procurement targets (see Table E3). Most POUs set
smaller goals, except the Los Angeles Department of Water and Power (LADWP). LADWP relied
mostly on a 21 MW pumped hydro upgrade to set its 2016 target, in addition to 3 MW of TES
systems. 2020 target includes 60 MW of TES at the generation level and 40 MW of TES at the
customer level, in addition to 50 MW of transmission level and 4 MW of distribution-level
batteries. Redding electric utility and Glendale Water and Power procured Ice Bear TES.
12 2020 Strategic Analysis of Energy Storage in California, 2011. Public Interest Energy Research for the CEC. CEC-
500-2011-047
Attachment E
E-3
Table E1: IOUs current projects and projects in development by storage technology
MW Li-Ion Zinc Sodium-
Sulfur
Flywheel PHS Thermal Other TOTAL
PG&E 42 13 6 20 10 91
SCE 246 16 26 69 357
SDG&E 20 40 19 79
Table E2: Storage location of current and in-progress projects and comparison to 2020 target
Current-in progress
(MW)/2020 target
(MW)
Transmission Distribution Customer Total
PG&E 50MW/310MW 33.5 MW/185 MW 8.2MW/85 MW 91 MW/580 MW
SCE 100 MW/310 MW 32.3 MW/185 MW 224.4 MW/85 MW 356.7MW/580 MW
SDG&E 60 MW/80MW 6.2MW/55MW 13MW/30MW 79 MW/165 MW
Table E3: 2016 and 2020 storage procurement target of the seven POUs who elected to
procure cost-effective storage
Utilities Advisory Commission Minutes Approved on: November 2, 2016 Page 1 of 3
UTILITIES ADVISORY COMMISSION MEETING
FINAL MINUTES OF OCTOBER 5, 2016 (EXCERPTS RELATED TO ENERGY STORAGE DISCUSSION)
CALL TO ORDER
Vice Chair Danaher called to order at 7:05 p.m. the meeting of the Utilities Advisory
Commission (UAC).
Present: Vice Chair Danaher, Commissioners Forssell, Johnston, and Trumbull
Absent: Chair Cook, Commissioners Ballantine, Schwartz, and Council Liaison Scharff
ITEM 3. DISCUSSION: Discussion of Energy Storage and Microgrid Applications in Palo Alto
Senior Resource Planner Shiva Swaminathan presented the study results on the application of
microgrid and energy storage systems in Palo Alto. He outlined that the study did not find any
cost-effective application for such system at present, but anticipated the proliferation of energy
storage in the coming years as cost decline and value for such services increase. He also
outlined elements of a potential storage pilot project for 125kW/500 kWh at a cost of
$250,000.
Commissioner Trumbull noted the Commission’s recent discussion of potentially encouraging
customers to switch from natural gas to electricity, and asked about reliability if a customer
used only electricity. Swaminathan acknowledged that, having two fuel sources coming to your
home—electricity and natural gas—will have diversification value in the event of an emergency
like an earthquake. However, there may be other customers who want to eliminate the smoke
coming out of their smoke stacks at home by burning gas; for them, electrification may be the
solution. Swaminathan said that it is a trade-off each person has to make.
Vice Chair Danaher asked staff to explain the State’s establishment of storage mandates.
Swaminathan explained that the State is interested in storage to manage intermittent
renewables like solar and wind. Since storage is a fast-acting resource and can respond to the
vagaries of intermittent resources, storage is expected to take on a larger role in the coming
years.
Commissioner Forssell noted that backup power is one value stream shown in the analysis, but
there are other values too such as frequency regulation. Swaminathan concurred.
Commissioner Forssell asked which customers value backup generation. Swaminathan
indicated that many customers such as hospitals and location with computer servers need
higher reliability service. He said that if a customer is totally reliant on electricity and does not
use natural gas, they may wish to have energy storage systems to improve reliability.
ATTACHMENT B
Utilities Advisory Commission Minutes Approved on: November 2, 2016 Page 2 of 3
Vice Chair Danaher noted to the visiting students in the audience that the City has large utility-
scale solar resources and other renewable supplies, but that the City relies on others to manage
the transmission grid to deliver this power to Palo Alto.
Vice Chair Danaher mentioned that the energy price arbitrage is a low value. Swaminathan
concurred.
Commissioner Forssell asked whether the pilot project proposal was to partner with a customer
to install storage at their site and learn from the operations. Swaminathan agreed, but
mentioned that the objective is to have more than one customer participate in the pilot.
Commissioner Johnston asked if staff had identified any customers to participate in the pilot.
Swaminathan said no, but that there have been inquiries.
Vice Chair Danaher agreed with the analysis finding that there was low value proposition at this
time and asked for the rationale for spending $250,000 for a pilot project. Swaminathan said
the objective was to learn about the technology, the permitting rules, how to optimally operate
the system, and the impact on such systems on the retail rate-making process. Vice Chair
Danaher asked if there was a way to reduce the cost. Swaminathan said that the project could
be scaled down, but the minimum size to bid ancillary services into the CAISO is 100 kilowatts
(kW), the size of the proposed pilot. Vice Chair Danaher mentioned the value is to determine
how to bid these resources into the CAISO system.
Vice Chair Danaher asked if we have control of Calaveras hydro project operation.
Swaminathan replied in the affirmative.
Vice Chair Danaher asked about the objective of a pilot. Swaminathan responded that this
technology is coming and the idea is to learn about how we could have a win-win solution in
conjunction with our customers; the question of whether we can afford such a pilot is part of
this discussion. Swaminathan indicated that staff believes that spending $50k/per year for 5
years in R&D funds may be a good use of funds to better prepare for the future.
Vice Chair Danaher asked for an explanation of the value chart. Swaminathan outlined the
multiple value chains shown in the “spider-chart” in the report.
Commissioner Trumbull again asked what storage techniques could be used to protect
customers from electrical outages if the City adopted an electrification strategy. Assistant
Director Jane Ratchye mentioned that the current reliability level is very high. She also pointed
out that no decision has been made about electrification and we are not walking down the road
of wholesale electrification yet. Commissioner Forssell added that the purpose of this
discussion today is to meet a legislative requirement under AB 25142 and not the topic of
electrification at the Commission’s prior meeting.
Vice Chair Danaher asked how Demand Response (DR) differs from storage. Swaminathan
mentioned that DR resources tend to be less expensive, but storage is faster acting and more
reliable.
Utilities Advisory Commission Minutes Approved on: November 2, 2016 Page 3 of 3
Vice Chair Danaher asked if there are other DR programs that would be more productive than
storage, such as EV batteries. Swaminathan mentioned that staff is working on a program with
EVs and expect to come to the Commission in the spring along with the storage
recommendation.
Vice Chair Danaher asked if staff could describe the City’s new technology program.
Swaminathan explained the elements of the Program for Emerging Technology (PET), which is
designed to provide an opportunity to demonstrate new technologies on City facilities or using
willing Utilities customers, at no cost to the City. Technologies tested under PET include PV on
streetlights with a grid monitoring sensor and motion sensing LED lights installed in City Hall’s
parking garage.
Commissioner Forssell said she supported the R&D pilot like Commissioner Danaher and that
she was looking forward to seeing a fleshed out pilot project proposal from staff.
Respectfully submitted,
Marites Ward
City of Palo Alto Utilities
3
MEMORANDUM
TO: UTILITIES ADVISORY COMMISSION
FROM: UTILITIES DEPARTMENT
DATE: MAY 3, 2017
SUBJECT: Discussion of Smart Grid Assessment and Development of Utility Technology
Road Map and Implementation Plan
______________________________________________________________________________
RECOMMENDATION
This report is provided for discussion by the Utilities Advisory Commission (UAC). No action is
required from the UAC at this time, but feedback is requested on staff’s plans for a smart grid
assessment and development of a Utility Technology Road Map and Implementation Plan.
EXECUTIVE SUMMARY
In 2012, the City of Palo Alto Utilities (CPAU) conducted a smart grid assessment (the “2012
Assessment”) and found that the benefits of such applications in Palo Alto did not justify the
estimated $15 million to $20 million capital investment at that time. The 2012 Assessment
recommended that CPAU undertake pilot scale smart grid projects and defer major investments
due to uncertainties in the technology market and high costs. For the past several years, staff
has initiated a number of small scale pilot projects to evaluate the merits of various smart grid
technology applications, seek customer feedback, and gain operational experience that could
be utilized by staff when the technology is eventually implemented.
In 2017, staff, with consulting assistance, plans to evaluate CPAU’s smart grid pilot projects
implemented to-date, document lessons learned, and to update the cost-benefit assessment
for advanced metering infrastructure (AMI) smart grid investments. The results of this analysis
will inform the City’s decision about whether to recommend to Council to proceed with these
types of investments. Separately, staff envisions working with its consultant to also develop a
recommendation to chart a long term technology roadmap and implementation plan for CPAU.
Any implementation of AMI-based smart grid systems and leveraging such investments post-
implementation will likely require some re-alignment of staffing resources and expertise. Staff
plans to coordinate this assignment with the broader CPAU Strategic Plan expected to be
undertaken in 2017, and to conform the effort with the City’s overall technology objectives and
goals.
Staff is targeting providing evaluation results to the UAC in the fall/winter of 2017 for input and
feedback, followed by final recommendation for UAC and Council consideration and approval in
the winter/spring of 2018.
BACKGROUND
The 2012 Assessment found that the large scale investment required for AMI-based smart grid
systems in Palo Alto was not cost-justifiable at that time (see Staff Report #3330). Based on the
findings, the consultant that performed the 2012 Assessment recommended the following:
• Rather than investing $15 million to $20 million in a full-scale smart grid system, CPAU
should implement small-scale pilot projects over the next several years; and
• Implement smaller pilot scale projects that will allow CPAU to gauge customer interests
and to develop a better understanding of the value proposition for implementing such
systems in Palo Alto at a future date as costs decline and the technologies become more
mature.
Based on this recommendation, staff undertook a number of pilot scale projects. Outlined
below are a list of pilot projects and a brief description of the scope of those projects to test
various technology “use-cases”.
1. The CustomerConnect pilot provided 300 residential customers with advanced electric,
natural gas, and water meters, which provided the customers with more granular utility
consumption information. Through this pilot program, customers were able to view
their utility consumption on an hourly basis in a web-based portal to better understand
the drivers for their consumption, and to detect and fix water leakages if and when they
arise.
2. The CustomerConnect pilot also implemented a pilot time-of-use (TOU) electric rate
that provides lower rates for residential customers who were able to shift their energy
consumption during off-peak hours. About 50 Electric Vehicle (EV) owners are currently
participating in the TOU pilot. The program was closed to new applicants in 2014. Since
then, a few hundred customers have expressed interest in joining the program and have
been added to a waitlist.
3. Staff evaluated ways to optimally operate the electric distribution system based on
voltage information gathered from advanced customer meters. Leveraging a fully
implemented AMI system via a Conservation Voltage Reduction (CVR) program could
lower total electricity use in Palo Alto by 0.5% to 1.0%.
4. Staff enabled some customers in the CustomerConnect pilot to view their consumption
information in real-time using in-home-display units that the customers can purchase
and connect wirelessly to their utility electric meter. This allowed customers to remotely
monitor usage information in real-time.
5. Staff developed pilot programs that enabled customers to optimally operate their
distributed energy resources to benefit both the customer and the utility. Examples of
such pilot programs include large commercial customer demand response pilot
programs and investigating leveraging smart invertors at a commercial customer sited
solar photovoltaic systems to inject capacitive energy into the distribution system when
needed. Remotely controlling City operated electric vehicle charging equipment was
also tested.
These pilot programs have enabled CPAU staff to test the value of many smart grid “use-cases”
and learn as the technology landscape evolved in the past four-years.
In addition to smart grid pilot projects, CPAU also undertook a Utility Technology Systems
Review and Future’s Needs Assessment in 2014, and identified 40 projects that could enhance
customer service and improve operational efficiencies in the coming years.1
DISCUSSION
Based on results of the pilot projects, customer feedback, and technological advancements,
staff believes it is time to re-evaluate the timing and approach of smart grid investments and
issued a Request for Proposal (RFP) to retain consultants.
In November 2016, a RFP titled “Consulting Assistance for Smart Grid/IT Strategic Plan and
Implementation Services for over five years.” was issued. Based on experience, qualifications,
and methodology, staff has recommended that Council approve a contract with Utiliworks
Consultants Inc. (UWC) at its May 8, 2017 Council meeting to assist with the evaluation
assignment and to develop a technology roadmap for technology projects implementation over
a five to ten year period.
The proposed agreement recommended for City Council approval envisions the consultant
reviewing past work done, evaluating lessons learned from the pilot projects, and helping CPAU
develop a Technology Road Map and Implementation Plan. Phase I of the consulting
assignment would help CPAU prioritize these projects and estimate resources needed for
implementation. In addition to the evaluation of AMI based smart grid systems, UWC would
revisit the 2014 Utility Technology Systems Review and Future’s Needs Assessment. While a
number of these projects are either completed or underway, other projects need to be
prioritized and implemented in a methodical manner in the coming years. The deliverables
under this agreement with UWC that staff has recommended for Council approval are as
follows:
1. Assessment of smart grid pilot projects, validate lessons learned, and evaluation of costs
and benefits of AMI based smart grid investments
2. Development of a Strategic Technology Roadmap and Implementation Plan that will
include:
a. Project sequencing, timelines, resources needed for implementation of
technology roadmap
b. Organizational capacity and structure required to for implementation and for
system maintenance post-implementation
3. Presentation of Smart Grid Assessment and Strategic Technology Road Map and
Implementation Plans to UAC and Council
Depending on the outcome of Phase I results, staff may explore recommending enlistment of
additional consulting help, including from UWC (consistent with all conflict of interest
1 These projects were catalogued under the following eight categories: People/Process, Customer Facing,
Distribution System, Utility Business Systems, Employee tools, Security, ERP/Reporting, and AMI enabled
systems. Palo Alto IT Systems Review & Findings - 2014.
requirements), to assist with implementing some of the technology projects in subsequent
phases of the assignment. Council authorization will be sought for subsequent consulting
phases at a later time, based on Phase I findings, consultant performance, and availability of
resources.
In addition to the Smart Grid assessment, there are other major technology initiatives
underway. The City will be upgrading or replacing the City’s Enterprise Resource Planning (ERP)
system and Utilities Billing system or Customer Information System (CIS) in the next few years.
The careful sequencing of these projects is critical because of system interdependencies and
reliance upon the same pool of resources to manage and execute. Also, the length of each
project to implement will range from a year to several years, which is a significant investment in
time and expense. The Utility Technology Road Map and Implementation Plan will be essential
to guide the City by tactically phasing each project to minimize risk and ensure the optimal
utilization of City resources.
By implementing an AMI smart grid pilot program over the past four years, staff has developed
a good appreciation of issues related to AMI systems implementation, and ways to leverage
such investments for the benefit of customers and utility operations. Lessons learned include:
• The expertise needed to manage the implementation phase of the project; in addition,
meter installation services needed for mass roll-out of meters.
• The implication of implementing AMI systems across all three utilities.
• The need to re-align internal staffing resources for successful implementation of the project
and to maximize the value of such investments, post-implementation.
• New staff skills required to embark on the project include:
o troubleshoot and manage metering communication network
o analyze large datasets and apply business intelligence gained
o manage vendor web-hosting services and related information security needs
o develop more complex retail rate designs and implementation
o Meet greater customer informational needs and their expectations related to
distributed energy resources such as photovoltaics, electric vehicles, etc.
o Optimize distribution systems feeder network operation
o Coordinate across different divisions of CPAU to leverage smart grid investments
capabilities
• Smart grid and AMI increase the amount of data collected, the level of detail in the data,
and the number of systems through which a cyberattack can be attempted. These factors
raise additional customer privacy concerns and an increased need for cyber-security
evaluation, monitoring, and response capability.
If the agreement with UWC is approved by Council, Staff anticipates working with UWC to
evaluate these preliminary lessons learned/insights and incorporate them into their
recommendation in consultation with CPAU staff. In addition, staff envisions UWC would
incorporate insights from other smart grid rollout efforts at other utilities to raise other issues
CPAU may need to address, such as customer concerns that have arisen in other areas about
smart meter radio wave impact on human health. Under the proposed agreement terms, UWC
would coordinate its efforts with CPAU’s initiative to develop Utilities Strategic Plan (USP) and
other on-going technology projects. Any smart grid rollout would require a strong
communications plan and would have to be attentive to the eventual customer experience of
the services provided.
RESOURCE IMPACT
Funds of $174,735 for Phase I of this contract are included in the FY 2017 Capital Improvement
Program (CIP) budget. Staffing resources to manage the consultant and to finalize the work
product have also been identified within existing staff. Phases II and Ill of the contract are
subject to consultant performance and the findings and recommendations of Phase I. Funding
for phases II and Ill are subject to Council approval in subsequent years .
POLICY IMPLICATIONS
This recommendation sets no new Council policy and is consistent with the Council-approved
Utilities Strategic Plan.
ENVIRONMENTAL REVIEW
Discussion of Smart Grid Assessment and Development of Utility Technology Road Map and
Implementation Plan does not meet the definition of a project, pursuant to Section 21065 of
the California Environmental Quality Act, thus no environmental review is required.
ATTACHMENTS
A. Statement of Work of the Contract with Utiliworks Consulting LLC recommended for
Council Approval on May 8, 2017
B. Illustration of Coordinated Implementation Utility and City Technology Projects
PREPARED BY: ~HIVA SWAMINATHAN, Senior Resource Planner
REVIEWED BY: DAVE YUAN, Utilities Strategic Business Manager
~NATHAN ABENDSCHEIN, Assistant Director, Resource Management
DEPARTMENT HEAD: c~
ED SHIKADA
General Manager of Utilities
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ATTACHMENT A:
Scope of Work for Consulting Agreement with Utiliworks Consulting LLC to Undertake Smart
Grid Assessment & to Develop Strategic Technology Roadmap and Implementation Plan
Purpose
This Statement of Work (SOW) specifies in detail services UtiliWorks Consulting, LLC. (“Consultant” or
“UtiliWorks”) will provide the City of Palo Alto Utilities (“City” or “Palo Alto”) related to Assessing the
Merits of Smart Grid Investments and Developing a Strategic Technology Roadmap and Implementation
Plan (Phase I Assessment). The services described in this Exhibit “A” are considered “Basic Services”
under the Agreement.
In conducting its work on Phase I, Consultant will demonstrate an understanding of the City’s
organization, processes, personnel and IT systems is essential when embarking on evaluating the merits
of Smart Grid investments. Consultant will review the Prior City Assessments listed below, including the
City’s 2014 IT Systems Review and Future Needs Assessment (2014 Technology Assessment) in
particular, which outlines various Information Technology (IT) and Operating Technology (OT) projects in
process or contemplated as City priorities.
Prior City Assessments Include:
• Smart Grid Applications In Palo Alto: Findings and Recommendations – 2012
• Palo Alto Utilities IT System Review & Findings – 2014
• Palo Alto ERP and Utility Billing System Evaluation Findings and Recommendations- 2015
• Developing System Specifications for ERP/CIS systems and Systems Selection– in
progress
• City's Overall IT Strategic Plan and Vision from the CIO's Office
• Palo Alto GIS System Assessment Findings – 2017 (Draft)
• Procurement My Utilities Account Customer Engagement Tool & Mobile Platform –
Status Update
Relying both on the Prior City Assessments and Consultant’s expertise and industry knowledge, to
perform an updated assessment, the UtiliWorks team will determine which technologies are best suited
for the City’s unique environment and identify the associated business process changes that must occur
to maximize the benefits of such technologies, including Advanced Metering Infrastructure (AMI) and
Meter Data Management (MDM). Described below are additional details related to the specific tasks
Consultant must undertake as part of Phase I. Phase I will inform the City on the decision to proceed (or
not) with a Smart Grid implementation, and help chart the course for implementing other IT and OT
projects in the next 5 to 10 years.
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PHASE I SUMMARY
FINAL PROJECT DELIVERABLES - Consultant will prepare for City:
(1) Final Report - includes (a) Assessment Report; (b) Strategic Technology Roadmap; and (c) Implementation Plan;
(2) AMI/MDM Business Case Model; and
(3) Presentation of Final Report and AMI/MDM Business Case Information to Utilities Advisory Commission and
Council with associated materials, as requested by City
Consultant also agrees to up to three (3) on-site workshops (which may be combined in City discretion) for Phase I,
and to conduct all necessary interviews and discussions to facilitate the development of Final Project Deliverables.
Two (2) Executive Briefings with associated presentations for City Staff and Two (2) Interim Written Memoranda
are also anticipated at the project progresses. The interim written memoranda will be incorporated into the Final
Report.
Specific Tasks related to the Final Deliverables associated with Phase I are outlined in more detail below:
Activity Deliverable Lead Participants
Task 1.0 - Initial
Preparation Remote Kickoff – 2 hours Detailed Project
Schedule Consultant
City project team,
Consultant project
team
Activity Deliverable Lead Participants
Task 1.1 – State of
the Industry&
Technology
Maturity of Palo
Alto
Onsite workshop for Current
State and State of the Industry
- 3 days (combined at City
discretion with workshop for
Task 1.2)
Materials for Workshop,
Post-workshop
summaries
Consultant
City project team,
Consultant project
team
Executive briefing on project
status following workshop #1
Internal City
presentation and
associated materials
Consultant
City project team,
Consultant project
team
Consultant will demonstrate a comprehensive understanding of both the engineering and economic
aspects of AMI and other operating technologies identified in the City’s 2014 Technology Assessment.
Consultant’s team will detail key concepts underlying the current state of the AMI and other OT industry
and important design considerations when embarking on a new technology project. Consultant experts
will also lead a discussion that will be informed by projects already undertaken or in the process of being
implemented by the City.
To establish a future vision for the strategic roadmap, UtiliWorks will consider external and internal
drivers and utility industry trends. External drivers are the policies and regulations intended to protect
the environment, including water and energy conservation, efficient use of resources, and reduction of
the greenhouse gas emissions. Internal drivers include ensuring the reliability and security of our utility
systems, maintaining low costs, managing aging infrastructure and increasing operational efficiency.
Industry trends include advanced distribution automation, proliferation of distributed energy resources
(photovoltaics, electric vehicles, energy storage, networked and controllable customer appliances, etc.),
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need to provide time-of-use based customer retail rates, and increased informational and online service
needs of utility customers.
Consultant will align and facilitate workshop(s) that explore alignment of the City’s IT/OT systems and
current state operations. Note, this task (including the workshop) may be performed in conjunction with
the Discovery work in Task 1.2 at City’s discretion.
Consultant will develop a readiness score in each technology area that is used to determine the
educational content depth to be provided during the State of the Industry Executive Briefing.
Consultant will also delve into the success stories of other utilities and outline how the City can avoid
the pitfalls to methodically deploy a range of utility operating technologies. Consultant will provide the
City with a comprehensive vendor overview along with explanations of how their products and system
characteristics could impact the City’s operations and customer base.
Additional Notes RE: Deliverables & Task 1.1:
• State of the Industry and Technology Maturity of Palo Alto Executive Briefing (including
presentation (onsite) and supporting materials) should cover all technologies identified in in the
2014 assessment and new technologies.
Activity Deliverable Lead Participants
Task 1.2 –
Discovery Phase
Discovery – business case and
current state data request
from Consultant
Response to Consultant
questions City City project team
Discovery – review CPAU
documents, reports and data
request input
Written Memorandum –
to be incorporated into
Final Report
Consultant Consultant project
team
Onsite workshop for discovery
– 3 days (combined, at City
discretion with workshop for
Task 1.1)
Materials for Workshop,
Post-workshop
summaries
Consultant
Consultant exec.
team, City exec.
Team
Consultant will complete a comprehensive discovery phase. This discovery phase will reveal the critical
success factors and identify the gaps and shortcomings for the City and Consultant to address. The
Consultant team will perform a deep dive into the details of the City’s organization to develop the
foundation for change and identify the underlying business reasons that are driving the effort.
Consultant will review existing documentation and through a series of pre-set questions, interviews, and
workshops using the following approach:
• Goals and Objectives – The Consultant team will conduct workshops with executives,
stakeholders and key personnel in order to establish a common understanding of the City’s
project goals, drivers, success factors, and risks. The Consultant will stimulate discussion around
City goals and objectives that otherwise may have not been considered. Consultant will also
work to identify potential project risks early on in the process so that these risks can be
addresses and mitigated.
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• Data Collection/Current State – Consultant will provide the City with a comprehensive list of
data and information requests that will feed into the cost/benefit analysis underlying the
business case to be completed in Task 1.3. The Consultant team will examine the City’s current
business and operations processes, practices, and personnel to identify gaps and establish a
baseline for assessing AMI readiness. The Consultant team will be equipped with a customized
set of questions Consultant can use to collect this information through a series of onsite
workshops with the City’s respective subject matter experts.
• IT System Gap Analysis and Planning – Consultant will assess the “as-is” systems/applications
inventory across the City with a focus on those systems and applications that may/will be
impacted by potential Smart Grid projects. In looking to the future, UtiliWorks will identify a
number of technology drivers that are relevant to the City and their strategic roadmap.
Consultant’s evaluation will consider aspects of the utility that will be impacted by these drivers,
including: Enterprise Service Bus, Data Communications (for metering and secured systems,
such as SCADA), Application platforms, and Social Media.
As part of this effort, UtiliWorks will review and assess the following aspects of each piece of technology
set forth below:
• Hardware/Software
• Backup and Disaster Recovery
• Security
• Data Network Physical Diagram
• Application and network monitoring capabilities
• IT Support (skills/capabilities)
• System interdependencies
• Cost (one-time and recurring)
As part of analyzing the technology being used at the City and looking to develop a 10-year roadmap,
Consultant will perform the following tasks:
• Complete a thorough assessment of the City’s current IT systems, Smart Grid pilot projects and
the input from the 2014 Utilities IT strategic initiatives report
• Identify potential future requirements and needs
• Identify technology recommendations based on market maturity and technology trends
• Identify business process, staffing and skill needs to meet the City’s objectives
• Develop a high level roadmap for technology implementation, including prioritization of
recommended technology projects and timeline
As noted above, the City may in its discretion, work with Consultant to combine elements of Task 1.1
and Task 1.2.
Additional Notes RE: Deliverables & Task 1.2:
• Discovery workshops (onsite)
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• Consultant’s written memorandum should identify key goals and objectives, and document
Technology priorities that will go into Technology Strategic Roadmap and Implementation Plan
(.pdf format)
Activity Deliverable Lead Participants
Task 1.3 –
AMI/MDM
Business Case
Build AMI/MDM Business Case
model
(iterative with next step)
Model – minimum of 3
scenarios with sensitivity
analysis for each (Excel,
MS Project, etc.)
Consultant Consultant project
team
Review AMI/MDM Business
Case results City Comments City
City project team,
Consultant project
team
Incorporate feedback from
City into Business Case Model Final version of Model Consultant Consultant Project
Team
Consultant will develop a business case for AMI/MDM. The cornerstone of the business case is the
cost/benefit analysis of implementing AMI technology/system(s). Consultant’s methodology will include
detailed financial consideration, determination of the Net Present Value (NPV) of the project, payback
period and operational impacts. Consultant’s team will work with the City to identify the estimated costs
and potential benefits of an AMI/MDM implementation, including impact of uncertainties in input
assumption of results/recommendations. Consultant’s analysis will leverage information provided by the
City, as well as information and data gathered via UtiliWorks industry experience.
In order to develop a reliable cost estimate for an AMI/MDM implementation, Consultant will leverage
its comprehensive vendor technology pricing database and tailor the information for the City’s potential
deployment in the 2019-2020 timeline.
• Costs: Consultant will assess costs including: capital costs (e.g. system infrastructure including
equipment, hardware, software, communications; installation; professional services, etc.) and
ongoing operation & maintenance cost (e.g. system operator cost, licensing, internal staffing,
public awareness campaign, etc.). The assessment will be undertaken from a societal and utility
perspective, and based on an incremental cost/benefit basis.
• Benefits: Consultant’s benefits analysis will identify and quantify the value propositions that can
be realized with the successful deployment of an AMI system. Consultant’s evaluation will
consider hard, quantitative benefits, including areas of potential operational savings, revenue
enhancement, and recovery of product losses. Consultant’s Model will put a numerical value to
a given decision, but the Consultant analytics team will remain concerned with more than just
the financial outcome in development of the model.
Consultant will also examine how the financial projections and outcomes of the business case affect the
day-to-day operations of the City and the impact on rates, fees, and charges. The Consultant team will
analyze the interaction of people, processes, and procedures with finances and data to help the City
maximize overall benefits. Consultant will work with the City to utilize systems and strategies previously
identified in Tasks 1.1 and 1.2 in order to fully leverage AMI technology in the business case.
Consultant’s assessment will also identify additional technology investments the City may need to
Professional Services
Rev. April 27, 2016
6
leverage the base AMI infrastructure. Consultant will utilize its System Matter Experts (SMEs) to further
develop various deployment scenarios.
The results of the business case should help inform City and Consultant recommendations on whether
the City should proceed with the deployment of AMI and other related OT identified in the assessment.
Additional Notes RE: Deliverables & Task 1.3:
• Palo Alto AMI/MDM Model should include assumptions and results of up to 3 scenarios for
comparison, including sensitivity analysis to identify uncertainties and timeline for each scenario
Activity Deliverable Lead Participants
Task 1.4 –
Operational
Impacts
Operational Impacts and
Implementation Strategy
Onsite workshop - 2-3 days
onsite
Materials for Workshop,
Post-workshop
summaries
Consultant
City project team,
Consultant project
team
Executive briefing on project
status following workshop #2
& Business Case
Internal City
Presentation and
associated Materials
Consultant
Consultant exec.
team, City exec.
team
Through the information gleaned from interviews and workshops in Task 1.1, 1.2 and development of
the business case in 1.3, Consultant will work with the City to identify and analyze the key operational
areas/functions that may be impacted by Smart Grid projects to minimize risks and eliminate any
surprises in later stages of projects identified. These areas include, without limitation:
• Human Resources – What staffing changes, if any, are necessary to support your project and
ongoing operations? What are the skills and training needs?
• Organizational Structure – Is the organization optimally structured to implement and then
operationalize the technology for optimal use?
• Policies – What, if any, policy changes are necessary to accommodate AMI implementation?
• Business Process Re-Design – Which business processes will require change?
• Information Processing – What new data or reports will require your attention?
• Information Security – Will the new technology introduce new security risks or threats?
Additional Notes RE: Deliverables & Task 1.4:
• Operational impacts workshop with key stakeholders
• A written memorandum identifying operational impact findings from stakeholder workshops
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Activity Deliverable Lead Participants
Task 1.5 – Final
Report
Draft Initial Version of Final
Report – to include (1)
Assessment Report, (2)
Strategic Technology
Roadmap, and (3)
Implementation Plan
(iterative with next step)
Draft Final Report Consultant Consultant project
team
Review Draft Initial
Assessment Report and Smart
Grid and Strategic Technology
Roadmap & Implementation
Plan and provide feedback and
input
City Comments City City project team
Incorporate input from City
and complete Final Report Final Report Consultant Consultant Project
Team
Presentation of Final Report to
the UAC
Presentation and
Associated Materials
City Team
&
Consultant
UAC, City project
team, Consultant
exec. team
Provide input after UAC
presentation City Comments City City PM
Incorporate any feedback, as
necessary from UAC, Finalize
recommendation and update
final report for Council
Updated Final Report Consultant Consultant project
team
City to review and provide
Final sign-off on Updated Final
Report
Comments re: Updated
Final Report City City PM
Presentation of Updated Final
Report to Council
Presentation and
Associated Materials City Team
&
Consultant
Council, UAC, City
project team,
Consultant exec.
team
In accordance with the Schedule from Task 1.0, Consultant will compile output from Task 1.1 – 1.4 into a
Final Report for City. The Final Report, in addition to the specific details identified later in this section
will include the following:
(a) Assessment Report;
(b) Strategic Technology Roadmap (big picture timelines and estimated budgets); and
(c) Implementation Plan (additional details related to the Strategic Technology Roadmap);
Consultant will collaborate with the City to develop the recommended Final Report as noted in this
Exhibit “A”. Key implementation planning for the Strategic Technology Roadmap will involve developing
a high-level schedule, budget and sequencing. Overall, Consultant’s technology implementation
methodology should include stage gates that divide the project work into specific phases, with
measurable outcomes that build from the previous phase.
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8
As part of this task, Consultant will develop the proposed project schedule based on the
results/conclusions of the resulting business cases and affiliated recommendations. This schedule will
outline the major milestones underlying the procurement and implementation phases. Consultant will
also advise on how best to structure the City’s project team to support the procurement and
implementation phases along with ongoing support once the projects are completed, including
AMI/smart grid projects.
Additional Notes RE: Deliverables and Task 1.5:
• The Final Report should incorporate outputs form Tasks 1.1 – 1.4 (.pdf format). The Final Report
would include the following sections at a minimum:
o Executive Summary
o Technology Overview
o Organizational Goals and Objectives
o Assessment Report
o Strategic Technology Roadmap (higher level discussion of timelines and estimated
budgets)
o Additional details related to Sequencing, Timelines, Resources needed as part of the
Implementation Plan
o Organizational capacity and structure required to operationalize implementation plans
o Summary/Recommendations
o Note: the document form/outline will be subject to review and comments by the City.
• A final version of the AMI/MDM Business Case Models, Including Assumptions for business case
and Implementation Timelines is a Final Deliverable in addition to the Final Report (MS Excel, MS
Project, etc.)
• City also contemplates Consultant delivering Presentations on Final Report and Business Case to
UAC and Council as part of this Task (onsite, PowerPoint)
Activity Deliverable Lead Participants
Task 1.6 – Project
Management
Project Management
Project Budget and
Schedule Tracking as
Requested by City;
Meeting Facilitation and
Notes
Consultant
PM
Consultant PM,
City PM
Consultant will provide structured project management to ensure that all project components are
executed in a timely, organized fashion and completed to the project definition and expectations. As
communication is a critical success factor, the Consultant Project Manager will work to make sure that
all designated team members are aware of project status and issues. During Phase I, project
management activities will include:
• Develop and maintain the overall project schedule
• Work with all project participants to monitor progress and adjust the work plan as needed to
stay on schedule
• Facilitate regular project progress and other meetings
• Track project budgets
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PHASE I – OVERALL PROJECT SUMMARY
FINAL PROJECT DELIVERABLES - Consultant will prepare for City:
(1) Final Report - includes (a) Assessment Report; (b) Strategic Technology Roadmap; and (c) Implementation Plan;
(2) AMI/MDM Business Case Model; and
(3) Presentation of Final Report and AMI/MDM Business Case Information to Utilities Advisory Commission and Council with associated
materials, as requested by City
Consultant also agrees to up to three (3) on-site workshops (which may be combined in City discretion) for Phase I, and to conduct all
necessary interviews and discussions to facilitate the development of Final Project Deliverables. Two (2) Executive Briefings with associated
presentations for City Staff and Two (2) Interim Written Memoranda are also anticipated at the project progresses. The interim written
memoranda will be incorporated into the Final Report.
Activity Deliverable Lead Participants
Initial Preparation Remote Kickoff – 2 hours Detailed Project Schedule Consultant
City project team,
Consultant project
team
Activity Deliverable Lead Participants
Task 1.1 – State of the
Industry& Technology
Maturity of Palo Alto
Onsite workshop for Current State
and State of the Industry - 3 days
(combined at City discretion with
workshop for Task 1.2)
Materials for Workshop, Post-
workshop summaries Consultant
City project team,
Consultant project
team
Executive briefing on project status
following workshop #1
Internal City presentation and
associated materials Consultant
City project team,
Consultant project
team
Activity Deliverable Lead Participants
Task 1.2 – Discovery
Phase
Discovery – business case and current
state data request from Consultant
Response to Consultant
questions City City project team
Discovery – review CPAU documents,
reports and data request input
Written Memorandum – to be
incorporated into Final Report Consultant Consultant project
team
Onsite workshop for discovery – 3
days (combined, at City discretion
with workshop for Task 1.1)
Materials for Workshop, Post-
workshop summaries Consultant Consultant exec.
team, City exec. team
Activity Deliverable Lead Participants
Task 1.3 – AMI/MDM
Business Case
Build AMI/MDM Business Case model
(iterative with next step)
Model – minimum of 3
scenarios with sensitivity
analysis for each (Excel, MS
Project, etc.)
Consultant Consultant project
team
Review AMI/MDM Business Case
results City Comments City
City project team,
Consultant project
team
Incorporate feedback from City into
Business Case Model Final version of Model Consultant Consultant Project
Team
Activity Deliverable Lead Participants
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10
Task 1.4 – Operational
Impacts
Operational Impacts and
Implementation Strategy Onsite
workshop - 2-3 days onsite
Materials for Workshop, Post-
workshop summaries Consultant
City project team,
Consultant project
team
Executive briefing on project status
following workshop #2 & Business
Case
Internal City Presentation and
associated Materials Consultant Consultant exec.
team, City exec. team
Activity Deliverable Lead Participants
Task 1.5 – Final Report
Draft Initial Version of Final Report –
to include (1) Assessment Report, (2)
Strategic Technology Roadmap, and
(3) Implementation Plan
(iterative with next step)
Draft Final Report Consultant Consultant project
team
Review Draft Initial Assessment
Report and Smart Grid and Strategic
Technology Roadmap &
Implementation Plan and provide
feedback and input
City Comments City City project team
Incorporate input from City and
complete Final Report Final Report Consultant Consultant Project
Team
Presentation of Final Report to the
UAC
Presentation and Associated
Materials
City team &
Consultant
UAC, City project
team, Consultant
exec. team
Provide input after UAC presentation City Comments City City PM
Incorporate any feedback, as
necessary from UAC, Finalize
recommendation and update final
report for Council
Updated Final Report Consultant Consultant project
team
City to review and provide Final sign-
off on Updated Final Report
Comments re: Updated Final
Report City City PM
Presentation of Updated Final Report
to Council
Presentation and Associated
Materials City team &
Consultant
Council, UAC, City
project team,
Consultant exec. team
Activity Deliverable Lead Participants
Task 1.6 – Project
Management
Project Management
Project Budget and Schedule
Tracking as Requested by
City;
Meeting Facilitation and
Notes
Consultant
PM
Consultant PM, City
PM
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Rev. April 27, 2016
11
EXHIBIT “B”
SCHEDULE OF PERFORMANCE
CONSULTANT shall perform the Services so as to complete each milestone within the number
of days/weeks specified below. The time to complete each milestone may be increased or
decreased by mutual written agreement of the project managers for CONSULTANT and CITY
so long as all work is completed within the term of the Agreement. CONSULTANT shall
provide a detailed schedule of work consistent with the schedule below within 2 weeks of receipt
of the notice to proceed.
Phase I - Timeline – In Calendar Days after Palo Alto Issues Notice to Proceed
NTP – Mid May (T)
Activity Deliverable Schedule
Initial Preparation Remote Kickoff – 2 hours Detailed Project
Schedule T+5 days
Activity Deliverable Schedule
Task 1.1 – State of
the Industry&
Technology
Maturity of Palo
Alto
Onsite workshop for Current
State and State of the Industry
- 3 days (combined at City
discretion with workshop for
Task 1.2)
Materials for Workshop,
Post-workshop
summaries
T+75
Executive briefing on project
status following workshop #1
Internal City
presentation and
associated materials
T+75
Activity Deliverable Schedule
Task 1.2 –
Discovery Phase
Discovery – business case and
current state data request
from Consultant
Response to Consultant
questions T+60
Discovery – review CPAU
documents, reports and data
request input
Written Memorandum –
to be incorporated into
Final Report
T+75
Onsite workshop for discovery
– 3 days (combined, at City
discretion with workshop for
Task 1.1)
Materials for Workshop,
Post-workshop
summaries
T+75
Activity Deliverable Schedule
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12
Task 1.3 –
AMI/MDM
Business Case
Build AMI/MDM Business Case
model
(iterative with next step)
Model – minimum of 3
scenarios with sensitivity
analysis for each (Excel,
MS Project, etc.)
T+100
Review AMI/MDM Business
Case results City Comments T+130
Incorporate feedback from
City into Business Case Model Final version of Model T+150
Activity Deliverable Schedule
Task 1.4 –
Operational
Impacts
Operational Impacts and
Implementation Strategy
Onsite workshop - 2-3 days
onsite
Materials for Workshop,
Post-workshop
summaries
T+180
Executive briefing on project
status following workshop #2
& Business Case
Internal City
Presentation and
associated Materials
T+180
Activity Deliverable Schedule
Task 1.5 – Final
Report
Draft Initial Version of Final
Report – to include (1)
Assessment Report, (2)
Strategic Technology
Roadmap, and (3)
Implementation Plan
(iterative with next step)
Draft Final Report T + 200
Review Draft Initial
Assessment Report and Smart
Grid and Strategic Technology
Roadmap & Implementation
Plan and provide feedback and
input
City Comments
T + 230
(initial)
T + 260
Incorporate input from City
and complete Final Report Final Report T + 280
Presentation of Final Report to
the UAC
Presentation and
Associated Materials T + 300
Provide input after UAC
presentation City Comments T+310
Incorporate any feedback, as
necessary from UAC, Finalize
recommendation and update
final report for Council
Updated Final Report T+320
City to review and provide
Final sign-off on Updated Final
Report
Comments re: Updated
Final Report T+330
Presentation of Updated Final Presentation and T + 350
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13
Report to Council Associated Materials
Activity Deliverable Schedule
Task 1.6 – Project
Management
Project Management
Project Budget and
Schedule Tracking as
Requested by City;
Meeting Facilitation and
Notes
Ongoing
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Rev. April 27, 2016
14
EXHIBIT “C”
COMPENSATION
The CITY agrees to compensate the CONSULTANT for professional services performed
in accordance with the terms and conditions of this Agreement, and as set forth in the
budget schedule below. Compensation shall be calculated based on the hourly rate
schedule attached as exhibit C-1 up to the not to exceed the amounts for each task set forth
below.
CONSULTANT shall perform the tasks and categories of work as outlined and budgeted
below. The CITY’s Project Manager may approve in writing the transfer of budget
amounts between any of the tasks or categories listed below provided the total
compensation for Basic Services, including reimbursable expenses, and the total
compensation for Additional Services do not exceed the amounts set forth in Section 4 of
this Agreement.
Schedule of Cost and Payments
CONSULTANT will invoice the City monthly for the services in this SOW based on
percent complete of the deliverables assigned to each task, in no less 25% increments.
Such invoices should also identify any eligible Reimbursable Expenses, at cost.
BUDGET SCHEDULE NOT TO EXCEED AMOUNT
PHASE I – Smart Grid Assessment & Strategic Technology
Roadmap and Implementation Plan
Total Cost Not-to-
Exceed (NTE)
Task 1.1 – State of the Industry & Technology Maturity of Palo Alto $15,152
Task 1.2 – Discovery Phase $23,602
Task 1.3 - AMI/MDM Business Case $22,635
Task 1.4 - Operational Impacts $6,984
Task 1.5 – Draft of Final Report $23,984
Task 1.5 – Present Final Report to UAC $7,576
Task 1.5 - Update Final Report Following UAC $7,576
Task 1.5 – Present Updated Final Report to Council $7,576
Task 1.6 - Project Management $17,765
Travel Phase 1 NTE $26,000
Phase I Total NTE $158,850
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Rev. April 27, 2016
15
Sub-total Basic Services $158,850.00
Total Basic Services and Reimbursable expenses $158,850.00
Additional Services (Not to Exceed) $15,885.00
Maximum Total Compensation $174,735.00
REIMBURSABLE EXPENSES
The administrative, overhead, secretarial time or secretarial overtime, word processing,
photocopying, in-house printing, insurance and other ordinary business expenses are
included within the scope of payment for services and are not reimbursable expenses.
CITY shall reimburse CONSULTANT for the following reimbursable expenses at cost.
Expenses for which CONSULTANT shall be reimbursed are:
A. Travel outside the San Francisco Bay area, including transportation and meals, will be
reimbursed at actual cost subject to the City of Palo Alto’s policy for reimbursement of
travel and meal expenses for City of Palo Alto employees.
B. Long distance telephone service charges, cellular phone service charges, facsimile
transmission and postage charges are reimbursable at actual cost.
All requests for payment of expenses shall be accompanied by appropriate backup
information. Any expense anticipated to be more than $100.00 shall be approved in
advance by the CITY’s project manager.
ADDITIONAL SERVICES
The CONSULTANT shall provide additional services only by advanced, written
authorization from the CITY. The CONSULTANT, at the CITY’s project manager’s
request, shall submit a detailed written proposal including a description of the scope of
services, schedule, level of effort, and CONSULTANT’s proposed maximum
compensation, including reimbursable expense, for such services based on the rates set
forth in Exhibit C-1. The additional services scope, schedule and maximum
compensation shall be negotiated and agreed to in writing by the CITY’s project manager
and CONSULTANT prior to commencement of the services. Payment for additional
services is subject to all requirements and restrictions in this Agreement
Issue ERP RFP & Retain Vendor
Coordinated Implementation of ERP , CIS/MUA, and AMI/MDM Technology Projects
Jan’17 Jul’17 Jan’18 Jul’18 Jan’19 Jul’19 Jan’20 Jul’20 2021-23
Retain Consultants for
Smart Grid/IT Strategic
Roadmap
AMI/MDM System Spec &
Procurement (Phase II )
ERP/CIS Systems
Requirement Gathering
Updated April 2017
Develop Roadmap
(PhaseI)
Early Selection of AMI Vendor
Provides for meter replacement to
resume as planned, ahead of mass
installation of AMI meters
Council
Approvals
Issue CIS RFP & Retain Vendor
ERP ImplementationERP
CIS/MUA
Council
Approvals
Council
Approvals
AMI & MDM
MDM System Implementation
& Alpha phase of AMI
(Phase III)
Jan’21
AMI Meter Installation
(Phase III)
Integrated
Operation of new
ERP & CIS
Integrated
operation of
CIS/AMI
L
e
v
e
r
a
g
e
A
M
I
300 Home Customer Connect/TOU Rate Pilot Program – Maintenance Phase
P
i
l
o
t
E
n
d
s
AMI:Automated Meter Reading Infrastructure
CIS: Customer Inform System
ERP:Enterprise Resource Planning System
MDM:Meter Data Management System
MUA:My Utility Account Customer Portal
Attachment B
• CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 1
Fiscal Year 2018 Proposed
Capital Budget
City Council
Gregory Scharff, Mayor
Liz Kniss, Vice Mayor
Tom DuBois
Eric Filseth
Adrian Fine
Karen Holman
Lydia Kou
Greg Tanaka
Cory Wolbach
James Keene, City Manager
Ed Shikada, Assistant City Manager
Lalo Perez, Director of Administrative Services/Chief Financial Officer
Kiely Nose, Budget Director, Office of Management and Budget
David Ramberg, Assistant Director of Administrative Services
Paul Harper, Budget Manager, Office of Management and Budget
Eric Filseth, Finance Committee Chair
CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 69
ELECTRIC FUND
ELECTRIC FUND
70 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
ELECTRIC FUND Overview
The City of Palo Alto is the only municipality in California that operates a full suite of City-
owned utility services. The municipal electric power system began operation in 1900 and con-
tinues to provide safe, reliable, cost effective electric service to residents and customers of Palo
Alto. For the 2018-2022 Capital Improvement Program (CIP), approximately $82.08 million is
programmed, with $19.96 million budgeted in Fiscal Year 2018, of which $4.69 million is reap-
propriated funds from Fiscal Year 2017. Overall, a total of 38 projects are programmed over the
5-year CIP.
Major projects funded in the
2018-2022 CIP include Electric
Customer Connections ($17.19
million), Electric System
Improvements ($12.00 million),
Smart Grid Technology Installa-
tion ($21.94 million), VA Hospital
Load Addition ($2.98 million),
various Underground system
rebuild projects ($6.41 million),
4/12kV conversion projects
($2.37 million), and Overhead to
Underground Conversion ($6.35
million). The budget for the
Electric Fund CIP is broken into
three separate categories: Customer Connections, System Improvements, and Undergrounding
Projects.
Infrastructure Inventory
CLASSIFICATION QUANTITY
ines 18 miles
apacity)9
aintained 101
6,600
117 miles
on 187 miles
n 94 miles
ution 74 miles
$0
$4,000,000
$8,000,000
$12,000,000
$16,000,000
$20,000,000
$24,000,000
2014
Actuals
2016
Actuals
FY 2018
Projected
FY 2020
Projected
FY 2022
Projected
Electric Fund Capital Expenditures
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 71
Customer Connections
As customers continually change their electric power needs due to equipment additions, new
construction, building expansions, building remodels, teardowns and rebuilds, and new building
occupancy types, the electric system must evolve to meet these needs. The Electric Customer
Connections Project, which is the largest project within the Electric Fund ($3.22 million in Fiscal
Year 2018, $17.19 million over the 2018-2022 CIP), is accounted for within this category. Also in
this category is work for the VA Hospital load increase ($2.98 million) and the Stanford Univer-
sity load increase ($0.50 million). These projects allow for the completion of work required to
meet the needs of customers who have applied for new or upgraded electric service, need tem-
porary power for construction, or require other services. The Electric Fund pays for a portion of
this project, while remaining costs are supported by reimbursements from customers, tele-
phone, and cable television companies for project work performed by the City.
Recent Accomplishments
In Fiscal Year 2016 the Utilities Electric Division completed over 286 customer service
projects with a total cost of $2.46 million and revenue of $1.66 million.
2018-2022 Capital Improvement Program
Recurring Projects
The Electric Customer Connections project, described above, is the only recurring project in this
category.
Non-Recurring Projects
A total of $3.48 million is programmed for projects under this category, with the entire $3.48
million anticipated to be spent or encumbered in Fiscal Year 2018.
VA Hospital Load Expansion (Fiscal Year 2018: $2.98 million; 5-Year CIP: $2.98 million)
Stanford University Load Expansion (Fiscal Year 2018: $0.50 million; 5-Year CIP: $0.50
million)
System Improvements
Necessary elements in ensuring reliable electric service to City of Palo Alto residents and cus-
tomers include the replacement of electric system components before they reach their end of
life and the installation of protective equipment to minimize the impact of system problems.
Projects in the System Improvements category allow for a variety of improvements, including
the replacement/upgrade of old cables and equipment and bringing designs up to current stan-
dard, installation of protective equipment and switches, conversion of the electric system from
4,160 Volts (4kV) to 12,470 Volts (12kV), and installation of capacitors to improve efficiency.
The 2018-2022 CIP includes total funding of $54.46 million in this category, with $11.57 million
allocated in Fiscal Year 2018. Significant projects in this category include Electric Distribution
System Improvements ($12.00 million), Smart Grid Technology Installation ($22.52 million), and
various projects to rebuild underground districts and substation components.
ELECTRIC FUND
72 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Recent Accomplishments
Replaced batteries at all electric substations
Added security cameras at two electric substations
Completed reconfiguration of Quarry feeders to better distribute load at substation.
Completed assessment of substation physical security with consultant.
Completed other miscellaneous system improvement projects dealing with replacement of
deteriorated facilities or to improve system operation and reliability.
2018-2021 Capital Improvement Program
Recurring Projects
A total of $40.78 million is programmed for System Improvements recurring projects in the
2018-2022 CIP, with $5.47 million allocated in Fiscal Year 2018. Recurring projects in this cate-
gory include the following:
Communication System Improvements (Fiscal Year 2018: $0.36 million; 5-Year CIP: $0.76
million)
Electric Distribution System Improvements (Fiscal Year 2018: $2.40 million; 5-Year CIP:
$12.00 million)
Electric Utility Geographic Information System (Fiscal Year 2018: $0.23 million; 5-Year CIP:
$0.89 million)
SCADA System Upgrades (Fiscal Year 2018: $0.06 million; 5-Year CIP: $0.32 million)
Smart Grid Technology Installation (Fiscal Year 2018: $0.94 million; 5-Year CIP: $21.94
million)
Substation Facility Improvements (Fiscal Year 2018: $0.20 million; 5-Year CIP: $0.99 million)
Substation Protection Improvements (Fiscal Year 2018: $0.40 million; 5-Year CIP: $1.60
million)
Underground System Rebuild (Fiscal Year 2018: $0.35 million; 5-Year CIP: $1.75 million)
Non-Recurring Projects
A total of $11.57 million is allocated in the 2018-2022 CIP for non-recurring System Improvement
projects. All of the funds for the projects were approved by the City Council in prior years.
Undergrounding Projects
The City of Palo Alto began a program to underground overhead electric, telephone, and cable
TV facilities in 1965 with a project along Oregon Expressway. Since that time 45 Underground
Districts have been formed. The undergrounding of electrical lines is a joint process between
the City and AT&T, due to joint ownership of the poles, and Comcast which leases pole space
from AT&T. All three Utilities share in the cost of the installation of underground conduit and
boxes necessary to enclose and protect wires and equipment. The City typically takes the lead
in the design, bidding, and construction processes with AT&T and Comcast reimbursing the City
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 73
for construction and administrative costs. During the 2018-2022 CIP, $6.95 million is allocated
for Undergrounding Projects, with $1.7 million allocated in Fiscal Year 2018.
Recent Accomplishment
Underground District 47 – Completed the installation of underground substructures
(conduits and boxes) in the area bounded by Middlefield Road/Addison Avenue/Cowper
Street/Homer Avenue.
Underground District 46 - Completed preliminary designs for underground electric lines.
2018-2022 Capital Improvement Program
Recurring Projects
There are no recurring projects under this category.
Non-Recurring Projects
A total of $8.50 million is allocated in the 2018-2022 CIP for non-recurring Undergrounding
projects, with $3.25 million allocated in Fiscal Year 2018. All of the funds for the projects were
approved by the City Council in prior years. Significant projects in this category include the fol-
lowing:
Underground District 42 ($2.30 million), which will underground overhead utility facilities in
the area near Embarcadero Road/Emerson Street/Middlefield Road.
Underground District 43 ($2.65 million) which will underground overhead utility facilities in
the area along Alma Street and Embarcadero Road.
Summary of Capital Activity
ELECTRIC FUND
Project
Number Project Title
FY 2016
Actuals
FY 2017
Estimate
FY 2018
Proposed FY 2019 FY 2020 FY 2021 FY 2022
5-Year
Total
Source of Funds
Transfers from Other Funds
Gas Fund
EL-11014 Smart Grid Technology 0 100,000 300,000 300,000 1,666,000 1,666,000 1,666,000 5,598,000
Total Gas Tax Fund Transfers 0 100,000 300,000 300,000 1,666,000 1,666,000 1,666,000 5,598,000
Water Fund
EL-11014 Smart Grid Technology 0 100,000 300,000 300,000 1,666,000 1,666,000 1,666,000 5,598,000
Total Water Fund Transfers 0 100,000 300,000 300,000 1,666,000 1,666,000 1,666,000 5,598,000
Total Transfers from Other Funds 0 200,000 600,000 600,000 3,332,000 3,332,000 3,332,000 11,196,000
Reimbursement from Customers, Telephone, and Cable Television Companies
ELECTRIC FUND
74 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
EL-98003 Electric System Improvements 77,101 0 200,000 210,000 210,000 210,000 210,000 1,040,000
EL-89028 Electric Customer Connections 1,659,941 1,303,672 1,650,000 1,700,000 1,700,000 1,700,000 1,700,000 8,450,000
EL-17004 Stanford - Customer Load Requirements 0 0 400,000 0 0 0 0 400,000
EL-08001 Underground District 42 - Embarcadero Road,
Emerson, Middlefield 0 0 0 0 300,000 0 0 300,000
EL-11009 Underground District 43 - Alma/Embarcadero 0 0 0 0 0 300,000 0 300,000
EL-12001 Underground District 46 - Charleston/El Camino
Real 0 0 200,000 0 0 0 0 200,000
EL-11010 Underground District 47 - Middlefield, Homer,
Webster, Addison 1,105,162 0 0 0 0 0 0 0
EL-17003 VA Hospital - Customer Load Requirements 0 0 1,600,000 0 0 0 0 1,600,000
Reimbursement from Customers,
Telephone, and Cable Television
Companies Total
2,842,204 1,303,672 4,050,000 1,910,000 2,210,000 2,210,000 1,910,000 12,290,000
Total Sources 2,842,204 1,503,672 4,650,000 2,510,000 5,542,000 5,542,000 5,242,000 23,486,000
Use of Funds
Customer Connections
EL-89028 Electric Customer Connections 2,457,600 3,159,809 3,219,888 3,335,804 3,455,893 3,580,305 3,600,000 17,191,890
EL-17004 Stanford University Customer Load
Requirements 0 0 500,000 0 0 0 0 500,000
EL-17003 VA Hospital Customer Load Requirements 0 20,000 2,980,000 0 0 0 0 2,980,000
Customer Connections Total 2,457,600 3,179,809 6,699,888 3,335,804 3,455,893 3,580,305 3,600,000 20,671,890
System Improvements
EL-06001 230 Kv Electric Intertie 1,008 66,233 113,119 0 0 0 0 113,119
EL-10008 Advanced Metering Infrastructure (AMI) System 393 0 0 0 0 0 0 0
EL-16002 Capacitor Bank Installation 0 350,000 0 0 0 0 0 0
EL-14000 Coleridge/Cowper/Tennyson 4/12Kv
Conversion 0 0 0 680,000 400,000 0 0 1,080,000
EL-15000 Colorado/Hopkins System Improvement 0 50,000 1,525,000 0 0 0 0 1,525,000
EL-89031 Communications System Improvements 7,106 40,772 359,821 100,000 100,000 100,000 100,000 759,821
EL-17001 East Meadow Circles 4/12Kv Conversion 0 50,000 0 1,750,000 0 0 0 1,750,000
EL-13000 Edgewood/Wildwood 4Kv Tie 0 0 0 50,000 400,000 0 0 450,000
EL-15001 Electric Substation Battery Replacement 293,869 106,131 0 0 0 0 0 0
EL-98003 Electric System Improvements 2,064,744 2,977,231 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 12,000,000
EL-02011 Electric Utility Geographic Information System 68,923 165,000 228,663 165,000 165,000 165,000 165,000 888,663
EL-17007 Facility Relocation for Caltrain Modernization
Project 0 0 1,550,000 0 0 0 0 1,550,000
EL-17005 HCB Pilot Wire Relay Replacement 0 0 167,000 167,000 0 0 0 334,000
EL-14004 Maybell 1&2 4/12Kv Conversion 3,277 85,372 100,000 0 0 0 0 100,000
EL-09000 Middlefield Underground Rebuild 270,996 0 0 0 0 0 0 0
EL-11003 Rebuild Underground District 15 0 30,000 114,181 335,819 0 0 0 450,000
Project
Number Project Title
FY 2016
Actuals
FY 2017
Estimate
FY 2018
Proposed FY 2019 FY 2020 FY 2021 FY 2022
5-Year
Total
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 75
EL-11006 Rebuild Underground District 18 364,384 0 0 0 0 0 0 0
EL-11008 Rebuild Underground District 19 86,609 0 116,420 0 0 0 0 116,420
EL-14002 Rebuild Underground District 20 0 50,000 900,000 500,000 0 0 0 1,400,000
EL-17000 Rebuild Underground District 23 0 0 200,000 600,000 0 0 0 800,000
EL-10006 Rebuild Underground District 24 893,040 300,000 643,113 0 0 0 0 643,113
EL-19000 Rebuild Underground District 25 0 0 0 50,000 500,000 0 0 550,000
EL-16000 Rebuild Underground District 26 350 100,000 0 50,000 650,000 0 0 700,000
EL-14005 Reconfigure Quarry Feeders 162,311 0 0 0 0 0 0 0
EL-13002 Relocate Quarry/Hopkins Substation 60Kv Line
(A & B)0 0 100,000 750,000 0 0 0 850,000
EL-13006 Sand Hill/Quarry Road 12Kv Tie 1,023 0 0 0 0 0 0 0
EL-02010 SCADA System Upgrades 35,716 0 60,000 65,000 65,000 65,000 65,000 320,000
EL-11014 Smart Grid Technology Installation 34,742 300,000 1,521,766 1,000,000 10,000,000 5,000,000 5,000,000 22,521,766
EL-17002 Substation 60Kv Breaker Replacement 0 0 150,000 150,000 150,000 0 0 450,000
EL-89044 Substation Facility Improvements 122,904 300,000 195,000 195,000 200,000 200,000 200,000 990,000
EL-89038 Substation Protection Improvements 209,333 612,144 400,000 300,000 300,000 300,000 300,000 1,600,000
EL-16003 Substation Security 1,910 248,090 250,000 250,000 0 0 0 500,000
EL-16001 Underground System Rebuild 56,115 400,000 300,000 350,000 350,000 350,000 350,000 1,700,000
EL-13008 Upgrade Electric Estimating System 2,596 0 0 0 0 0 0 0
EL-17008 Utility Control Center Upgrades 0 400,000 100,000 0 0 0 0 100,000
EL-04012 Utility Site Security Improvements 361,394 49,120 70,960 50,000 50,000 50,000 0 220,960
System Improvements Total 5,042,741 6,680,093 11,565,043 9,957,819 15,730,000 8,630,000 8,580,000 54,462,862
Undergrounding Projects
EL-13007 Underground Distribution System Security 0 0 300,000 300,000 0 0 0 600,000
EL-08001 Underground District 42 - Embarcadero Road,
Emerson, Middlefield 0 0 0 50,000 2,000,000 250,000 0 2,300,000
EL-11009 Underground District 43 - Alma/Embarcadero 0 0 0 0 150,000 2,000,000 500,000 2,650,000
EL-12001 Underground District 46 - Charleston/El Camino
Real 73,545 113,787 1,397,480 0 0 0 0 1,397,480
EL-11010 Underground District 47 - Middlefield, Homer,
Webster, Addison 2,142,918 957,990 0 0 0 0 0 0
Undergrounding Projects Total 2,216,463 1,071,777 1,697,480 350,000 2,150,000 2,250,000 500,000 6,947,480
Total Uses 9,716,804 10,931,679 19,962,411 13,643,623 21,335,893 14,460,305 12,680,000 82,082,232
Project
Number Project Title
FY 2016
Actuals
FY 2017
Estimate
FY 2018
Proposed FY 2019 FY 2020 FY 2021 FY 2022
5-Year
Total
ELECTRIC FUND
76 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 77
Insert Map Here
ELECTRIC FUND
78 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 79
Customer Connections
ELECTRIC FUND
80 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Electric Customer Connections
Electric Customer Connections
Description
This project allows for the installation of services, transformers, meters for new customers,
upgrades of existing services, temporary service connections, and overhead/underground
extensions for new/existing customers.
Justification
The project provides funding for the connection of new customers and the upgrading of exist-
ing services. These are critical functions for providing electrical service to the City's customers.
During a typical year, over 200 electric services are installed or upgraded in the City.
Supplemental Information
Budget amounts requested for work covered by this project are based on historical expendi-
tures and growth projections. The Electric Fund pays for a portion of this project while remain-
ing costs are supported by reimbursements from customers, telephone, and cable television
companies for project work performed by the City.
Fund: Electric Fund - Operating
Category: Customer Connections
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Recurring
Initial Project Completion: Recurring
Project Number: EL-89028
Electric Troubleman installing an electric meter to provide service to a customer
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund N/A 2,400,688 1,856,137 1,569,888 1,635,804 1,755,893 1,880,305 1,900,000 8,741,890 0 N/A
Other N/A 1,650,000 1,303,672 1,650,000 1,700,000 1,700,000 1,700,000 1,700,000 8,450,000 0 N/A
Total N/A 4,050,688 3,159,809 3,219,888 3,335,804 3,455,893 3,580,305 3,600,000 17,191,890 0 N/A
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 81
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction N/A 4,050,688 3,159,809 3,219,888 3,335,804 3,455,893 3,580,305 3,600,000 17,191,890 0 N/A
Design N/A 0 0 0 0 0 0 0 0 0 N/A
Total N/A 4,050,688 3,159,809 3,219,888 3,335,804 3,455,893 3,580,305 3,600,000 17,191,890 0 N/A
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Relationship to Comprehensive
Plan
Secondary Connection
Element: Land Use and Community
Design
Section: Public Ways
Goal: L-9
Policy: L-79
Program: L-81
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
ELECTRIC FUND
82 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Stanford - Customer Load Requirements
Stanford - Customer Load
Requirements
Description
This project allows for the installation of new primary conduits, vaults, cables and equipment to
serve new customer demands in the Quarry Road/Welch Road/Sand Hill Road area.
Justification
The recent expansion of the Stanford Medical facilities and the Stanford Shopping Center has
exhausted the existing facilities of Quarry Road Substation to serve any new customers in the
Quarry Road/Welch Road/ Sand Hill Road area. This project will provide for new primary
feeder outlets which will provide ample capability to serve both existing and new customers for
the next 5 years.
Significant Changes
2017-2021 CIP: Project established.
Fund: Electric Fund - Operating
Category: Customer Connections
Project Location: Stanford Medical facilities and the
Stanford Shopping Center
Managing Department: Utilities
Initial Project Start: Summer 2017
Initial Project Completion: Winter 2017
Revised Project Start:
Revised Project Completion:
Project Number: EL-17004
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund 0 100,000 0 100,000 0 0 0 0 100,000 0 100,000
Revenue from Other
Agencies 0 400,000 0 0 0 0 0 0 0 0 0
Revenue from the
State of California 0 0 0 400,000 0 0 0 0 400,000 0 400,000
Total 0 500,000 0 500,000 0 0 0 0 500,000 0 500,000
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 83
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 500,000 0 500,000 0 0 0 0 500,000 0 500,000
Total 0 500,000 0 500,000 0 0 0 0 500,000 0 500,000
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Program: N-63
Relationship to Comprehensive
Plan
Secondary Connection
Element: Community Services &
Facilities
Section: Customer Service
Goal: C-2
Policy: C-9
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
ELECTRIC FUND
84 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
VA Hospital - Customer Load Requirements
VA Hospital - Customer Load
Requirements
Description
The VA Hospital is outgrowing the capability of the electric infrastructure the City has tradition-
ally provided. Hanover and Maybell Substations currently serve the VA Hospital campus with 2
electric lines, as the federal guidelines require full redundancy of electric power in case one line
goes down. The VA Hospital is reaching the full capacity of a single line this year in 2016. Addi-
tional capacity is required and will be met using mostly existing underground conduits in the
short term. VA Hospital and CPAU staff are reviewing options to meet long term needs.
Justification
The interim, short term solution will be implemented in one year by using existing underground
pathways to upsize the existing 12kV wires and to bring additional 12kV wires to the VA from
Hanover and Maybell Substations to meet the rapid load growth needs since the local 12kV sys-
tem cannot support the full VA Hospital load projections by 2022. The long term solution for a
60kV customer-owned substation addition will take a minimum of 2.5 years from now to build
and energize and is one alternative to meet both the VA Hospital's power needs and the needs
of other 12kV power users in the neighborhood. The 60kV substation can take its power from a
higher level in the electric system that has adequate capacity. Without this improvement, once
the VA Hospital is at full load, in the event of an outage in the Hanover/Maybell area a majority
of customers would experience sustained time frames until the power can be restored.
Significant Changes
2017-2021 CIP: Project established.
Fund: Electric Fund - Operating
Category: Customer Connections
Project Location: VA Hospital
Managing Department: Utilities
Initial Project Start: Summer 2017
Initial Project Completion: Summer 2018
Revised Project Start:
Revised Project Completion:
Project Number: EL-17003
Picture of Veteran Affairs Hospital
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 85
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund 0 600,000 20,000 1,380,000 0 0 0 0 1,380,000 0 1,400,000
Revenue from Other
Agencies 0 2,400,000 0 1,600,000 0 0 0 0 1,600,000 0 1,600,000
Total 0 3,000,000 20,000 2,980,000 0 0 0 0 2,980,000 0 3,000,000
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 3,000,000 20,000 2,980,000 0 0 0 0 2,980,000 0 3,000,000
Total 0 3,000,000 20,000 2,980,000 0 0 0 0 2,980,000 0 3,000,000
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Program: N-65
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
ELECTRIC FUND
86 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 87
System Improvements
ELECTRIC FUND
88 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
230 kV Electric Intertie
230 kV Electric Intertie
Description
Funding for this project is used to perform technical feasibility studies to determine the general
project requirements to establish a 230 kV electric intertie line and construct a 230/60 kV sub-
station to connect the City's electric system directly to the 230kV transmission line. The City is
in discussions with Stanford and Stanford Linear Accelerator Laboratory (SLAC), one of ten
Department of Energy (DOE) Office of Science laboratories, on the shared interest and benefits
in the new intertie. If this project comes to fruition, the estimated total project cost for a sec-
ondary transmission line is $40 - $50 million and could be shared with both Stanford and
SLAC/DOE. If this project is cancelled, staff will seek funding for an alternative solution to pro-
vide a second transmission source to Palo Alto.
Justification
This new electric line will allow the City to bypass the local transmission fees charged by PG&E.
This transmission line will provide the City with an alternate source of power that can serve it
during emergencies, such as the plane crash in 2010 that impacted electric power to the entire
city.
Significant Changes
2017-2021 CIP: Project completion has been moved out as discussions with Stanford and
SLAC/DOE are ongoing and no agreement has been finalized. Cooperation of these two entities
is necessary for this project to move forward.
Fund: Electric Fund - Operating
Category: System Improvements
Project Location: National Accelerator Laboratory
Substation
Managing Department: Utilities
Initial Project Start: Spring 2013
Initial Project Completion: Fall 2015
Revised Project Start:
Revised Project Completion: Spring 2021
Project Number: EL-06001
Possible electric substation connection point to existing 60 kV system
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 89
Operating Impact
Projected net annual savings resulting from the interconnection fee reduction will be approxi-
mately $2,000,000 based on projected energy purchases and the price difference between 115
kV and 230 kV service. Lower voltage services are more expensive than higher voltage ser-
vices.
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund 261,311 179,351 66,233 113,119 0 0 0 0 113,119 0 440,663
Total 261,311 179,351 66,233 113,119 0 0 0 0 113,119 0 440,663
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 209,049 179,351 0 0 0 0 0 0 0 0 209,049
Design 52,261 0 66,233 113,119 0 0 0 0 113,119 0 231,613
Total 261,310 179,351 66,233 113,119 0 0 0 0 113,119 0 440,662
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Relationship to Comprehensive
Plan
Secondary Connection
Element: Land Use and Community
Design
Section: Public Ways
Goal: L-9
Policy: L-79
Program: L-80,L-81
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15301.
ELECTRIC FUND
90 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Coleridge/Cowper/Tennyson 4/12kV Conversion
Coleridge/Cowper/Tennyson 4/12kV
Conversion
Description
The project will convert the primary electric distribution system in the Coleridge/Cowper/Ten-
nyson area from 4 kV to 12 kV.
Justification
Because of the difference in voltage, the 4kV and 12kV systems cannot be directly connected
and used to back up one another. Due to prior 4kV to 12 kV conversions in adjacent areas, this
area, now at 4kV, needs to be converted to 12kV so that adequate circuit connections can be
restored to allow customers to be switched from one circuit to another during normal or emer-
gency conditions. This will improve operating flexibility of the system and service reliability to
customers in this area. In addition, there is equipment in the area that has reached the end of its
useful life and needs to be replaced. Converting to 12 kV will eliminate the need to replace this
equipment as it is not needed at that voltage level.
Fund: Electric Fund - Operating
Category: System Improvements
Project Location: Coleridge/Cowper/Tennyson area
Managing Department: Utilities
Initial Project Start: Spring 2016
Initial Project Completion: Spring 2017
Revised Project Start: Spring 2019
Revised Project Completion: Spring 2020
Project Number: EL-14000
Overhead crews working on overhead lines
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund 0 0 0 240,000 680,000 400,000 0 0 1,320,000 0 1,320,000
Total 0 0 0 240,000 680,000 400,000 0 0 1,320,000 0 1,320,000
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 91
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 0 0 0 0 400,000 0 0 400,000 0 400,000
Design 0 0 0 240,000 680,000 0 0 0 920,000 0 920,000
Total 0 0 0 240,000 680,000 400,000 0 0 1,320,000 0 1,320,000
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
ELECTRIC FUND
92 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Colorado/Hopkins System Improvement
Colorado/Hopkins System
Improvement
Description
This project will replace deteriorating equipment which will increase system capacity and
improve service reliability for the areas served by Hopkins and Colorado substations and adja-
cent substations.
Justification
Transformers at both Hopkins and Colorado Substations are near the end of their useful life,
along with much of the other equipment at Hopkins. Hopkins is a 4kV substation and has no
ties to other substations, so there is no backup to serve customers should there be a cata-
strophic problem at Hopkins.
Supplemental Information
To accommodate the replacement of this equipment, the ability to serve projected future elec-
trical load projections, and provide back up service to Hopkins, this project will evaluate solu-
tions to best solve the multitude of issues. Funding for Fiscal Year 2016 is for engineering only.
Budget requests for future years is an estimate based currently available information.
Significant Changes
Revised load projections associated with new loads in the Stanford Hospital area has required
an adjustment to the project plans.
Fund: Electric Fund - Operating
Category: System Improvements
Project Location: Hopkins and Colorodo Substations
Managing Department: Utilities
Initial Project Start: Spring 2015
Initial Project Completion: Spring 2018
Revised Project Start:
Revised Project Completion: Spring 2019
Project Number: EL-15000
Electric Substation obscured by trees
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 93
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund 0 825,000 50,000 1,525,000 0 0 0 0 1,525,000 0 1,575,000
Total 0 825,000 50,000 1,525,000 0 0 0 0 1,525,000 0 1,575,000
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 825,000 50,000 1,525,000 0 0 0 0 1,525,000 0 1,575,000
Total 0 825,000 50,000 1,525,000 0 0 0 0 1,525,000 0 1,575,000
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
ELECTRIC FUND
94 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Communications System Improvements
Communications System
Improvements
Description
This project installs copper wire cable systems, high frequency coaxial cable, fiber optic cable,
and related equipment to provide communications services for traffic signal coordination, tele-
phone links, computer data transmission, and the Electric Supervisory Control and Data Acqui-
sition (SCADA) system.
Justification
Installation of communication lines is essential for the provision of City services. The broadband
system provides communication between the Utility Control Center to Substations and field
equipment; and between substation protection equipment. This annual project funds, as neces-
sary, expansion of the system and replacement of deteriorating facilities.
Fund: Electric Fund - Operating
Category: System Improvements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Recurring
Initial Project Completion: Recurring
Project Number: EL-89031
Traffic/Fiber technicians repairing the city fiber optic cables
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction N/A 0 0 0 0 0 0 0 0 0 N/A
Electric Fund N/A 300,593 40,772 359,821 100,000 100,000 100,000 100,000 759,821 0 N/A
Total N/A 300,593 40,772 359,821 100,000 100,000 100,000 100,000 759,821 0 N/A
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 95
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction N/A 300,593 40,772 359,821 100,000 100,000 100,000 100,000 759,821 100,000 N/A
Design N/A 0 0 0 0 0 0 0 0 0 N/A
Electric Fund N/A 0 0 0 0 0 0 0 0 0 N/A
Total N/A 300,593 40,772 359,821 100,000 100,000 100,000 100,000 759,821 100,000 N/A
Relationship to Comprehensive
Plan
Primary Connection
Element: Land Use and Community
Design
Section: Public Ways
Goal: L-9
Policy: L-79
Program: L-81
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302
ELECTRIC FUND
96 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
East Meadow Circles 4/12kV Conversion
East Meadow Circles 4/12kV
Conversion
Description
The project will convert the primary electric distribution system in the East Charleston/Alma
Street/East Meadow Drive/Middlefield Road area from 4 kV to 12 kV.
Justification
Because of the difference in voltage, the 4kV and 12kV systems cannot be directly connected
and used to back up one another. Due to prior 4kV to 12 kV conversions in adjacent areas, this
area, now at 4kV, needs to be converted to 12kV so that adequate circuit connections can be
restored to allow customers to be switched from one circuit to another during normal or emer-
gency conditions. This will improve operating flexibility of the system and service reliability to
customers in this area. In addition, there is equipment in the area that has reached the end of its
useful life and needs to be replaced. Converting to 12 kV will eliminate the need to replace this
equipment as it is not needed at that voltage level.
Significant Changes
2017-2021 CIP: Project established.
Fund: Electric Fund - Operating
Category: System Improvements
Project Location: East Charleston/Alma Street/East
Meadow Drive/Middlefield Road area
Managing Department: Utilities
Initial Project Start: Summer 2017
Initial Project Completion: Spring 2018
Revised Project Start:
Revised Project Completion: Spring 2020
Project Number: EL-17001
Electric Linemen working on utility pole
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund 0 50,000 50,000 0 1,750,000 0 0 0 1,750,000 0 1,800,000
Total 0 50,000 50,000 0 1,750,000 0 0 0 1,750,000 0 1,800,000
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 97
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 50,000 50,000 0 1,750,000 0 0 0 1,750,000 0 1,800,000
Total 0 50,000 50,000 0 1,750,000 0 0 0 1,750,000 0 1,800,000
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Goal: N-9
Policy: N-44
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
ELECTRIC FUND
98 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Edgewood/Wildwood 4 kV Tie
Edgewood/Wildwood 4 kV Tie
Description
This project will install new overhead wire to connect the HO-3 and HO-7 electric feeders in the
Edgewood/Wildwood area.
Justification
Because of the voltage difference, the 4kV and 12kV systems cannot be directly connected and
provide redundancy. When the East Meadow 4 kV feeders are converted to 12 kV, the 4 kV
back-up connections from East Meadow to Hopkins substations will be eliminated. In order to
maintain reliable service in the event of a feeder outage at Hopkins substation, this project will
construct a tie between the HO-3 and HO-7 feeders.
Fund: Electric Fund - Operating
Category: System Improvements
Project Location: Edgewood/Wildwood area
Managing Department: Utilities
Initial Project Start: Spring 2016
Initial Project Completion: Spring 2017
Revised Project Start: Spring 2019
Revised Project Completion: Spring 2020
Project Number: EL-13000
Electric linemen working on overhead electric connection
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund 0 0 0 0 50,000 400,000 0 0 450,000 0 450,000
Total 0 0 0 0 50,000 400,000 0 0 450,000 0 450,000
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 0 0 0 0 400,000 0 0 400,000 0 400,000
Design 0 0 0 0 50,000 0 0 0 50,000 0 50,000
Total 0 0 0 0 50,000 400,000 0 0 450,000 0 450,000
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 99
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
ELECTRIC FUND
100 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Electric System Improvements
Electric System Improvements
Description
This project provides funding as needed to improve the Electric Distribution System. Typical
activities include: increasing system capacity for load growth, replacing deteriorated capital
facilities, reconfiguring/adding to the system to improve service reliability, repairing and replac-
ing storm damaged equipment, and making general improvements to the system.
Justification
Electric system service reliability and adequate system capacity are critical to providing a high
level of service to customers in Palo Alto. When service interruptions occur, customers may
experience significant economic losses. The City must continuously evaluate service reliability
needs and make improvements to the system to maintain top-level service to City customers.
Supplemental Information
Other Revenues includes reimbursements from the telephone company for work performed on
their behalf by City.
Fund: Electric Fund - Operating
Category: System Improvements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Recurring
Initial Project Completion: Recurring
Project Number: EL-98003
Electric crews working in an underground vault terminating cables
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund N/A 3,710,413 2,977,231 2,200,000 2,190,000 2,190,000 2,190,000 2,190,000 10,960,000 2,400,000 N/A
Other N/A 190,000 0 200,000 210,000 210,000 210,000 210,000 1,040,000 (400,000)N/A
Total N/A 3,900,413 2,977,231 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 12,000,000 2,000,000 N/A
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 101
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction N/A 3,900,413 2,977,231 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 12,000,000 2,000,000 N/A
Design N/A 0 0 0 0 0 0 0 0 0 N/A
Total N/A 3,900,413 2,977,231 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 12,000,000 2,000,000 N/A
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Relationship to Comprehensive
Plan
Secondary Connection
Element: Land Use and Community
Design
Section: Public Ways
Goal: L-9
Policy: L-79
Program: L-81
Potential Board/Commission
Review:
Architectural Review Board
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
ELECTRIC FUND
102 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Electric Utility Geographic Information System
Electric Utility Geographic Information
System
Description
This project will enhance the citywide Geographical Information System (GIS). The primary
emphasis will be to provide a compatible user interface and estimating software, to edit and
update data which will reside in the citywide GIS. The project includes the migration of the
existing electric and fiber networks to a unified mapping solution compatible with the citywide
GIS.
Justification
GIS has grown from being a set of special purpose computer applications to being an informa-
tion tool that serves all segments of the City. Applications have been developed which make
GIS information accessible to hundreds of users, which has greatly increased the value of the
system. Funding in the CIP is for ongoing mapping system modifications to facilitate technical
requirements, external contractor system support, and anticipated system upgrades, and to
meet future needs and facilitate integration to the new citywide GIS. This could include recom-
mendations for upgrade or replacement of existing systems.
Fund: Electric Fund - Operating
Category: System Improvements
Project Location: Software maintenance & update
Managing Department: Utilities
Initial Project Start: Recurring
Initial Project Completion: Recurring
Project Number: EL-02011
View of City of Palo Alto GIS System
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund N/A 392,605 165,000 228,663 165,000 165,000 165,000 165,000 888,663 0 N/A
Total N/A 392,605 165,000 228,663 165,000 165,000 165,000 165,000 888,663 0 N/A
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 103
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction N/A 392,605 165,000 228,663 165,000 165,000 165,000 165,000 888,663 0 N/A
Design N/A 0 0 0 0 0 0 0 0 0 N/A
Total N/A 392,605 165,000 228,663 165,000 165,000 165,000 165,000 888,663 0 N/A
Relationship to Comprehensive
Plan
Primary Connection
Element: Governance
Section: Public Participation
Goal: G-1
Policy: G-3
Relationship to Comprehensive
Plan
Secondary Connection
Element: Transportation
Section: Reducing Auto Use
Goal: T-1
Policy: T-3
Program: T-10
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15301.
ELECTRIC FUND
104 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Facility Relocation for Caltrain Modernization Project
Facility Relocation for Caltrain
Modernization Project
Description
This project allows for the relocation of overhead Utility Electric and Fiber Optic lines to provide
adequate clearance from new electric lines being installed by the Peninsula Corridor Joint Pow-
ers Board (Caltrain) to convert their diesel powered commuter trains to electric power.
Justification
The Caltrain Modernization Program consists of converting Caltrain from diesel-hauled to Elec-
tric Multiple Unit trains. The installation of the Overhead Catenary System above the rails to
power the trains will cause conflicts with the Cityís overhead electric and communication lines,
as well as those owned by others, e.g. AT&T, Comcast, which cross the railroad tracks. Caltrain is
looking to have the overhead lines relocated/removed by August 2018 for an anticipated project
completion in 2020. In order to meet Caltrainís timeline, Utilities must obtain funding and start
the design process in FY 2017. If lines are placed underground, Utilities will look for opportuni-
ties to share the costs with AT&T and Comcast as part of the joint construction agreement
between the three entities for installation of underground facilities.
Supplemental Information
Though Electric power for the trains will be provide by PG&E from outside of Palo Altoís city
limits, the timely relocation/removal of overhead electric lines will facilitate the conversion of
the commuter train system from diesel fuel to electricity, reducing greenhouse gas emissions,
noise, and pollution in Palo Alto. Caltrain is receiving funding for the project from several differ-
ent sources. If Caltrain does not obtain full funding to complete the project, construction fund-
Fund: Electric Fund - Operating
Category: System Improvements
Project Location: Various locations along railroad
Managing Department: Utilities
Initial Project Start: Fall 2017
Initial Project Completion: Winter 2018
Revised Project Start:
Revised Project Completion:
Project Number: EL-17007
Intersection of Alma and East Meadow
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 105
ing approved by Council for the relocation of facilities will be returned to reserves. Revenue
projections are based on shared installation overhead facilities with AT&T and Comcast.
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund 0 150,000 0 1,550,000 0 0 0 0 1,550,000 0 1,550,000
Total 0 150,000 0 1,550,000 0 0 0 0 1,550,000 0 1,550,000
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 0 0 1,500,000 0 0 0 0 1,500,000 0 1,500,000
Design 0 150,000 0 50,000 0 0 0 0 50,000 0 50,000
Total 0 150,000 0 1,550,000 0 0 0 0 1,550,000 0 1,550,000
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Potential Board/Commission
Review:
Utilities Advisory Commission
ELECTRIC FUND
106 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
HCB Pilot Wire Relay Replacement
HCB Pilot Wire Relay Replacement
Description
This project funds the replacement of existing HCB pilot wire relays with new microprocessor
based line differential protective relays to protect the city’s 60kV sub-transmission line sections
and equipment from damage due to faults (i.e. short circuits) on the 60kV line sections.
Justification
The existing electro-mechanical HCB pilot wire differential relays are approaching the end of
their useful life and rely on a copper pilot wire cable system running between each substation to
maintain communication between the relay pairs located at the ends of each 60kV line section.
These pilot wire cables have aged significantly and are the source of repeated failures due to
corrosion in connections and splices which cause open circuits, particularly during the winter
rainy season. During these periods of interrupted pilot wire communication, the existing pilot
wire relays do not provide adequate back-up protection putting the city at risk of an outage
should a fault occur on the 60kV line section.
Significant Changes
2017-2021 CIP: Project established.
Fund: Electric Fund - Operating
Category: System Improvements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Summer 2017
Initial Project Completion: Spring 2019
Revised Project Start:
Revised Project Completion:
Project Number: EL-17005
Picture of aging electric equipment
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund 0 167,000 0 167,000 167,000 0 0 0 334,000 0 334,000
Total 0 167,000 0 167,000 167,000 0 0 0 334,000 0 334,000
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 107
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 167,000 0 167,000 167,000 0 0 0 334,000 0 334,000
Total 0 167,000 0 167,000 167,000 0 0 0 334,000 0 334,000
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Goal: N-9
Policy: N-44
Program: N-63
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
ELECTRIC FUND
108 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Maybell 1&2 4/12kV Conversion
Maybell 1&2 4/12kV Conversion
Description
This project will convert the Maybell substation circuit 1 & 2 from 4kV to 12kV and remove the
remaining 4kV equipment at Maybell. This covers the remaining area to be converted at May-
bell Substation including the areas around Maybell Avenue and El Camino Real between El
Camino Way and Arastradero.
Justification
The existing 4kV distribution system at Maybell has been converted to 12kV as the distribution
facilities in areas have been rebuilt. This remaining area needs to be converted to 12kV so that
adequate circuit ties are maintained to ensure high levels of service reliability to customers. This
will also allow for the removal of deteriorating facilities at Maybell Substation reducing mainte-
nance and operating requirements.
Fund: Electric Fund - Operating
Category: System Improvements
Project Location: Maybell Avenue and El Camino
Real between El Camino Way and Arastradero
Managing Department: Utilities
Initial Project Start: Spring 2014
Initial Project Completion:
Revised Project Start:
Revised Project Completion: Summer 2018
Project Number: EL-14004
El Camino Way at James
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund 264,626 185,372 85,372 100,000 0 0 0 0 100,000 0 449,998
Total 264,626 185,372 85,372 100,000 0 0 0 0 100,000 0 449,998
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 109
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 211,701 185,372 85,372 100,000 0 0 0 0 100,000 0 397,073
Design 52,925 0 0 0 0 0 0 0 0 0 52,925
Total 264,626 185,372 85,372 100,000 0 0 0 0 100,000 0 449,998
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Potential Board/Commission
Review:
Utilities Advisory Commission
ELECTRIC FUND
110 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Rebuild Underground District 15
Rebuild Underground District 15
Description
This project will rebuild and replace the underground electric system in Underground District 15.
The area is bounded by Los Palos, Glenbrook, Pomona, and Arastradero. Work will include the
replacement of deteriorated electrical cable, transformers and enclosures. Installation of new
equipment will bring the electrical system up to current construction standards.
Justification
The underground system serving Underground District 15 was installed in 1973. The cables and
equipment in the area have exceeded their expected life of 30 years. In addition, most of the
equipment and cables were installed in subsurface enclosures that have standing water in win-
ter. The water reduces the life of the equipment and electrical connections and requires that
rebuilding be performed on the facilities.
Significant Changes
2017-2021 CIP: Shifting project priorities and the loss of Engineering staff have caused the
delay for the completion of this project.
Fund: Electric Fund - Operating
Category: System Improvements
Project Location: Area bounded by Los Palos,
Glenbrook, Pomona, and Arastradero
Managing Department: Utilities
Initial Project Start: Spring 2010
Initial Project Completion: Summer 2012
Revised Project Start: Spring 2018
Revised Project Completion: Summer 2019
Project Number: EL-11003
Underground transformer and cable after years of service
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund 29,463 144,181 30,000 114,181 335,819 0 0 0 450,000 0 509,463
Total 29,463 144,181 30,000 114,181 335,819 0 0 0 450,000 0 509,463
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 111
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 23,570 144,181 30,000 114,181 335,819 0 0 0 450,000 0 503,570
Design 5,892 0 0 0 0 0 0 0 0 0 5,892
Total 29,462 144,181 30,000 114,181 335,819 0 0 0 450,000 0 509,462
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Relationship to Comprehensive
Plan
Secondary Connection
Element: Land Use and Community
Design
Section: Public Ways
Goal: L-9
Policy: L-79
Program: L-80,L-81
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15301.
ELECTRIC FUND
112 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Rebuild Underground District 19
Rebuild Underground District 19
Description
This project will rebuild and replace the underground electric system in Underground District 19.
Work will include the replacement of deteriorated electrical cable, transformers, switches and
enclosures. Installation of new equipment will bring the electrical system up to current con-
struction standards.
Justification
The Underground District 19 is bounded by Forest, Waverley, Addison, and Alma in downtown
Palo Alto and underground electric distribution system was installed in 1979. Although typical
cable and equipment expected life is 30 years when conditions are ideal, most of the equipment
and cables operate in standing water during winter. Standing water reduces the life of the
equipment and connections and requires that the system be rebuilt before failures begin to
occur prematurely.
Fund: Electric Fund - Operating
Category: System Improvements
Project Location: Forest, Waverley, Addison, and
Alma in downtown Palo Alto
Managing Department: Utilities
Initial Project Start: Fall 2009
Initial Project Completion: Summer 2010
Revised Project Start: Spring 2014
Revised Project Completion: Winter 2018
Project Number: EL-11008
Electric crews installing new underground cables
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund 149,023 12,262 0 116,420 0 0 0 0 116,420 0 265,443
Total 149,023 12,262 0 116,420 0 0 0 0 116,420 0 265,443
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 113
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 119,217 12,262 0 116,420 0 0 0 0 116,420 0 235,637
Design 29,804 0 0 0 0 0 0 0 0 0 29,804
Total 149,021 12,262 0 116,420 0 0 0 0 116,420 0 265,441
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Relationship to Comprehensive
Plan
Secondary Connection
Element: Land Use and Community
Design
Section: Public Ways
Goal: L-9
Policy: L-79
Program: L-80,L-81
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15301.
ELECTRIC FUND
114 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Rebuild Underground District 20
Rebuild Underground District 20
Description
This project will rebuild and replace the underground electric system in Underground District
20. Work will include the replacement of deteriorated electrical cable, transformers, and enclo-
sures. Installation of new equipment will bring the electrical system up to current construction
standards.
Justification
The underground system serving Underground District 20 was installed in 1979, and cables and
equipment in the area have exceeded their expected life of 30 years. In addition, most of the
equipment and cables were installed in subsurface enclosures that have standing water during
winter. The water reduces the life of the equipment and electrical connections and requires that
rebuilding be performed on the facilities.
Fund: Electric Fund - Operating
Category: System Improvements
Project Location: Channing Avenue; Center Street;
Hamilton Avenue; and Lincoln Avenue
Managing Department: Utilities
Initial Project Start: Winter 2017
Initial Project Completion: Spring 2018
Revised Project Start:
Revised Project Completion:
Project Number: EL-14002
Utility Engineer planning out the next underground rebuild project
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund 0 950,000 50,000 900,000 500,000 0 0 0 1,400,000 0 1,450,000
Total 0 950,000 50,000 900,000 500,000 0 0 0 1,400,000 0 1,450,000
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 950,000 50,000 900,000 500,000 0 0 0 1,400,000 0 1,450,000
Total 0 950,000 50,000 900,000 500,000 0 0 0 1,400,000 0 1,450,000
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 115
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Relationship to Comprehensive
Plan
Secondary Connection
Element: Land Use and Community
Design
Section: Public Ways
Goal: L-9
Policy: L-79
Program: L-81
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
ELECTRIC FUND
116 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Rebuild Underground District 23
Rebuild Underground District 23
Description
This project will rebuild and replace the underground electric system in the area of the city
bounded by Hamilton Avenue, San Francisquito Creek, Southwood Drive and Chaucer Street.
Work will include the replacement of deteriorated electrical cable, transformers, switches and
enclosures.
Justification
The underground electric distribution system in the area bounded by Hamilton Avenue, San
Francisquito Creek, Southwood Drive and Chaucer Street was installed in 1983. Typical under-
ground cable and equipment expected life is approximately 30 years in ideal conditions. Instal-
lation of new equipment will bring the electrical system up to current construction standards.
Significant Changes
2017-2021 CIP: Project established.
Fund: Electric Fund - Operating
Category: System Improvements
Project Location: Hamilton Avenue, San Francisquito
Creek, Southwood Drive and Chaucer Street
Managing Department: Utilities
Initial Project Start: Fall 2016
Initial Project Completion: Summer 2019
Revised Project Start:
Revised Project Completion:
Project Number: EL-17000
Electric underground cable vault
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund 0 0 0 200,000 600,000 0 0 0 800,000 0 800,000
Total 0 0 0 200,000 600,000 0 0 0 800,000 0 800,000
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 117
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 0 0 200,000 600,000 0 0 0 800,000 0 800,000
Total 0 0 0 200,000 600,000 0 0 0 800,000 0 800,000
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Relationship to Comprehensive
Plan
Secondary Connection
Element: Land Use and Community
Design
Section: Public Ways
Goal: L-9
Policy: L-79
Program: L-80, L-81
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
ELECTRIC FUND
118 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Rebuild Underground District 24
Rebuild Underground District 24
Description
This project will rebuild and replace the underground electric system in Underground District
24. Work will include the replacement of deteriorated electrical cable, transformers, switches,
and enclosures. Installation of new equipment will bring the electrical system up to current con-
struction standards.
Justification
The underground electric distribution system in the Underground District 24 was installed in
1983 and cables and equipment in the area have exceeded their useful life of 30 years. In addi-
tion, most of the equipment and cables were installed in subsurface enclosures that have stand-
ing water during winter. The water reduces the life of the equipment and electrical connections
and requires that rebuilding be performed on the facilities. Underground District 24 covers a
major portion of the University Avenue downtown area and reliable electric power is critical to
the businesses in the area.
Fund: Electric Fund - Operating
Category: System Improvements
Project Location: Lytton Avenue; Bryant Street;
Forest Avenue; and Alma Street
Managing Department: Utilities
Initial Project Start: Spring 2009
Initial Project Completion: Spring 2016
Revised Project Start:
Revised Project Completion: Spring 2018
Project Number: EL-10006
University Avenue (part of Underground District 24 where underground electric facilities will be replaced)
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund 1,758,087 943,113 300,000 643,113 0 0 0 0 643,113 0 2,701,200
Total 1,758,087 943,113 300,000 643,113 0 0 0 0 643,113 0 2,701,200
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 119
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 1,406,460 943,113 300,000 643,113 0 0 0 0 643,113 0 2,349,573
Design 351,610 0 0 0 0 0 0 0 0 0 351,610
Total 1,758,070 943,113 300,000 643,113 0 0 0 0 643,113 0 2,701,183
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Relationship to Comprehensive
Plan
Secondary Connection
Element: Land Use and Community
Design
Section: Public Ways
Goal: L-9
Policy: L-79
Program: L-80,L-81
Potential Board/Commission
Review:
Architectural Review Board
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
ELECTRIC FUND
120 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Rebuild Underground District 25
Rebuild Underground District 25
Description
This project will rebuild and replace the underground electric system in Underground District
25. Work will include the replacement of deteriorated electrical cables, transformers, switches,
and enclosures. Installation of new equipment will bring the electrical system up to current con-
struction standards.
Justification
The electric system included in the scope of work of Underground District 25 was installed in
1983. Underground District 25 includes Orme Street between Los Robles Avenue and Juana Bri-
ones School. The cables are at the end of their expected life of 30 years and need to be
replaced. In addition, most of the other equipment (transformers, junctions, etc.) were installed
in subsurface enclosures that have standing water, garden chemicals, oil, or other corrosive
materials that impact equipment life.
Fund: Electric Fund - Operating
Category: System Improvements
Project Location: Orme Street between Los Robles
Avenue and Juana Briones School
Managing Department: Utilities
Initial Project Start: Winter 2018
Initial Project Completion: Spring 2020
Revised Project Start:
Revised Project Completion:
Project Number: EL-19000
Orme Street (part of Underground District 25)
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund 0 0 0 0 50,000 500,000 0 0 550,000 0 550,000
Total 0 0 0 0 50,000 500,000 0 0 550,000 0 550,000
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 121
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 0 0 0 0 500,000 0 0 500,000 0 500,000
Design 0 0 0 0 50,000 0 0 0 50,000 0 50,000
Total 0 0 0 0 50,000 500,000 0 0 550,000 0 550,000
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15301.
ELECTRIC FUND
122 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Rebuild Underground District 26
Rebuild Underground District 26
Description
This project will rebuild and replace the underground electric system in Underground District
26. Work will include the replacement of deteriorated electrical cables, transformers, switches,
and enclosures. Installation of new equipment will bring the electrical system up to current con-
struction standards.
Justification
The electric system included in the scope of work of Underground District 26 was installed in
1984. Underground District 26 includes Arastradero Road between El Camino Real and Hillview
Avenue. The cables are nearing the end of their expected life of 30 years and the fused switches
that were installed at that time have issues with operation and need to be replaced. In addition,
most of the other equipment (transfomers, junctions, ect.) were installed in subsurface enclo-
sures that have standing water, garden chemicals, oil, or other corrosive materials that impact
equipment life.
Significant Changes
2017-2021 CIP: Shifting project priorities and turnover of engineering staff have caused the
delay for the completion of this project.
Fund: Electric Fund - Operating
Category: System Improvements
Project Location: Arastradero Road between El
Camino Real and Hillview Avenue
Managing Department: Utilities
Initial Project Start: Spring 2016
Initial Project Completion: Spring 2016
Revised Project Start: Spring 2019
Revised Project Completion: Spring 2020
Project Number: EL-16000
Arastradero Road (part of Underground District 26)
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund 350 100,000 100,000 0 50,000 650,000 0 0 700,000 0 800,350
Total 350 100,000 100,000 0 50,000 650,000 0 0 700,000 0 800,350
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 123
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 279 100,000 100,000 0 0 650,000 0 0 650,000 0 750,279
Design 69 0 0 0 50,000 0 0 0 50,000 0 50,069
Total 348 100,000 100,000 0 50,000 650,000 0 0 700,000 0 800,348
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15301.
ELECTRIC FUND
124 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Relocate Quarry/Hopkins Substation 60 kV Line (A & B)
Relocate Quarry/Hopkins Substation
60 kV Line (A & B)
Description
This project relocates the Quarry-Hopkins (QR/HO) 60kV sub-transmission line and associated
facilities in Lanes A & B, and the nearby Alma Street area to a more physically accessible route
for electric crews and equipment. When the Alma substation was removed, the current trans-
mission line route was no longer required. This project will investigate relocating this line to a
more acceptable location that meets technical and aesthetic requirements.
Justification
The old 60 kV overhead lines are located in a congested area of downtown and are difficult to
access and maintain. The existing configuration is awkward and space consuming.
Fund: Electric Fund - Operating
Category: System Improvements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Spring 2018
Initial Project Completion: Spring 2020
Revised Project Start: Spring 2019
Revised Project Completion: Fall 2020
Project Number: EL-13002
Electric linemen working on 60 kV overhead lines
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund 0 0 0 100,000 750,000 0 0 0 850,000 0 850,000
Total 0 0 0 100,000 750,000 0 0 0 850,000 0 850,000
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 125
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 0 0 0 750,000 0 0 0 750,000 0 750,000
Design 0 0 0 100,000 0 0 0 0 100,000 0 100,000
Total 0 0 0 100,000 750,000 0 0 0 850,000 0 850,000
Relationship to Comprehensive
Plan
Primary Connection
Element: Land Use and Community
Design
Section: Public Ways
Goal: L-9
Policy: L-79
Program: L-81
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
ELECTRIC FUND
126 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
SCADA System Upgrades
SCADA System Upgrades
Description
This project will upgrade the Supervisory Control and Data Acquisition (SCADA) system hard-
ware. The SCADA system is used to monitor and control critical assets of the City's electric, gas,
and water utility systems from the Utility Control Center.
Justification
An upgrade to peripheral equipment is necessary each year to keep the hardware and software
current, to handle the ever-increasing demands on the system and maintain manufacturer/
industry support. In addition, the Water-Gas-Wastewater SCADA that was newly integrated into
the Electric SCADA system has placed additional burden on the system.
Supplemental Information
Annual budget amounts are for minor system upgrades/replacements. Full system upgrades
are on a 3 to 4 year cycle.
Fund: Electric Fund - Operating
Category: System Improvements
Project Location: SCADA System at Utility Control
Center
Managing Department: Utilities
Initial Project Start: Recurring
Initial Project Completion: Recurring
Project Number: EL-02010
SCADA Technologist configuring SCADA software
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund N/A 300,001 0 60,000 65,000 65,000 65,000 65,000 320,000 0 N/A
Total N/A 300,001 0 60,000 65,000 65,000 65,000 65,000 320,000 0 N/A
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 127
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction N/A 300,001 0 60,000 65,000 65,000 65,000 65,000 320,000 0 N/A
Design N/A 0 0 0 0 0 0 0 0 0 N/A
Total N/A 300,001 0 60,000 65,000 65,000 65,000 65,000 320,000 0 N/A
Relationship to Comprehensive
Plan
Primary Connection
Element: Community Services &
Facilities
Section: Parks and Public Facilities
Goal: C-4
Policy: C-24
Program: C-19
Relationship to Comprehensive
Plan
Secondary Connection
Element: Transportation
Section: Reducing Auto Use
Goal: T-1
Policy: T-3
Program: T-10
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15301.
ELECTRIC FUND
128 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Smart Grid Technology Installation
Smart Grid Technology Installation
Description
This project will implement portions of the Smart Grid Road Map that can be cost effectively
applied to the City's electric, gas, and water utility systems, resulting in operating cost savings,
environmental benefits, plus an increased quality of life and productivity for the residents and
businesses of Palo Alto.
Justification
The Smart Grid will help the City of Palo Alto achieve its goals in: energy conservation, carbon
emission reduction, efficient utilization of aging infrastructure, improved system reliability, inte-
gration of distributed energy resources, accommodation of battery charging demands, cost-
effective commodity purchases, and meeting customer demands for information.
Supplemental Information
This project could include aspects dealing with: data management system, smart metering, fiber
optic infrastructure improvement, distribution system automation, outage management system,
load management system, demand-side management system, leak and revenue protection, cus-
tomer interface to energy usage, and customer equipment control.
Fund: Electric Fund - Operating
Category: System Improvements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Recurring
Initial Project Completion: Recurring
Project Number: EL-11014
Sample of energy use information that could be available to customers
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 129
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund N/A 549,096 100,000 921,766 400,000 6,668,000 1,668,000 1,668,000 11,325,766 0 N/A
Transfer from Gas
Fund N/A 136,335 100,000 300,000 300,000 1,666,000 1,666,000 1,666,000 5,598,000 0 N/A
Transfer from Water
Fund N/A 136,335 100,000 300,000 300,000 1,666,000 1,666,000 1,666,000 5,598,000 0 N/A
Total N/A 821,766 300,000 1,521,766 1,000,000 10,000,000 5,000,000 5,000,000 22,521,766 0 N/A
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction N/A 821,766 300,000 1,521,766 1,000,000 10,000,000 5,000,000 5,000,000 22,521,766 0 N/A
Design N/A 0 0 0 0 0 0 0 0 0 N/A
Total N/A 821,766 300,000 1,521,766 1,000,000 10,000,000 5,000,000 5,000,000 22,521,766 0 N/A
Relationship to Comprehensive
Plan
Primary Connection
Element: Transportation
Section: Reducing Auto Use
Goal: T-1
Policy: T-3
Program: T-10
Relationship to Comprehensive
Plan
Secondary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15301.
ELECTRIC FUND
130 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Substation 60kV Breaker Replacement
Substation 60kV Breaker
Replacement
Description
This project funds the purchase and replacement of high voltage circuit breakers that intercon-
nect the nine electric substations and two power switching stations. The circuit breakers that
are reaching the end of their recommended reliable useful life expectancy and/or are now
underrated for the use.
Justification
A recent 60kV circuit breaker study performed for the City of Palo Alto found that the inter-
rupting current rating of two of these circuit breakers on the system is not high enough to han-
dle the expected maximum fault current level. Three other circuit breakers are marginal with
respect to their interrupting current rating. Six additional older oil circuit breakers are obsolete
and have reached or are reaching the ends of their operable lives. One oil circuit breaker has
experienced a non-catastrophic failure. Should there be a fault, it could result in a failure of any
one of these twelve circuit breakers to operate properly, damage to the breaker, and a pro-
longed electric outage. These circuit breakers are integral and critical components of the elec-
tric utility transmission system. The project will be a 10 year program replacing 1-2 breakers per
year.
Significant Changes
2017-2021 CIP: Project established.
Fund: Electric Fund - Operating
Category: System Improvements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Summer 2017
Initial Project Completion: Summer 2020
Revised Project Start:
Revised Project Completion:
Project Number: EL-17002
High voltage circuit breakers
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 131
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund 0 150,000 0 150,000 150,000 150,000 0 0 450,000 0 450,000
Total 0 150,000 0 150,000 150,000 150,000 0 0 450,000 0 450,000
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 150,000 0 150,000 150,000 150,000 0 0 450,000 0 450,000
Total 0 150,000 0 150,000 150,000 150,000 0 0 450,000 0 450,000
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Goal: N-9
Policy: N-44
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
ELECTRIC FUND
132 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Substation Facility Improvements
Substation Facility Improvements
Description
This project involves several improvements to each of the 9 substation facilities in Palo Alto,
including installation and replacement of capacitors, replacement of various substation equip-
ment, renovation of security fences and entry gates, paving of driveways and parking areas in
substations, upgrading of substation drainage systems, replacement of Remote Terminal Unit
(RTU) equipment, bus voltage monitoring and local area network (LAN) connections, as well as
other improvements.
Justification
The electric substations are the link between the transmission and distribution systems. At the
substations, voltage levels are converted and distribution circuits branch out to provide power
throughout the City. They are a key element to providing reliable electric service to residents
and customers in Palo Alto. Work completed under this project help to ensure reliable operation
and electric service.
Fund: Electric Fund - Operating
Category: System Improvements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Recurring
Initial Project Completion: Recurring
Project Number: EL-89044
Electric Substation transformer and bus structure
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund N/A 433,301 300,000 195,000 195,000 200,000 200,000 200,000 990,000 200,000 N/A
Total N/A 433,301 300,000 195,000 195,000 200,000 200,000 200,000 990,000 200,000 N/A
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 133
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction N/A 433,301 300,000 195,000 195,000 200,000 200,000 200,000 990,000 200,000 N/A
Design N/A 0 0 0 0 0 0 0 0 0 N/A
Total N/A 433,301 300,000 195,000 195,000 200,000 200,000 200,000 990,000 200,000 N/A
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Potential Board/Commission
Review:
Architectural Review Board
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
ELECTRIC FUND
134 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Substation Protection Improvements
Substation Protection Improvements
Description
This project funds the purchase of protective overcurrent relays, circuit breakers, high voltage
fuses, and other equipment used at electric substations to protect the substation equipment
and circuits emanating from the substation from damage due to faults (i.e. short circuits) on the
electric system.
Justification
The electric substations are the link between the transmission and distribution systems. At the
substations, voltage levels are converted and distribution circuits branch out to provide power
throughout the City. They are a key element to providing reliable electric service to residents
and customers in Palo Alto. Protective equipment is used to stop power flow when there are
problems on the electric system. As the electric distribution system becomes more complex
and reliability more critical, maintenance of these systems is imperative.
This project includes replacement of old protective devices and controls that no longer provide
the level of functionality now required for more sophisticated and sensitive devices. Properly
designed and operating protective systems are required to ensure public safety, reduce equip-
ment damage, and minimize the impact of faults (reduction in outage durations).
Fund: Electric Fund - Operating
Category: System Improvements
Project Location: Electric Substations
Managing Department: Utilities
Initial Project Start: Recurring
Initial Project Completion: Recurring
Project Number: EL-89038
Electric Substation used to distribute power to City of Palo Alto customers
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund N/A 860,187 612,144 400,000 300,000 300,000 300,000 300,000 1,600,000 300,000 N/A
Total N/A 860,187 612,144 400,000 300,000 300,000 300,000 300,000 1,600,000 300,000 N/A
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 135
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction N/A 860,187 612,144 400,000 300,000 300,000 300,000 300,000 1,600,000 300,000 N/A
Design N/A 0 0 0 0 0 0 0 0 0 N/A
Total N/A 860,187 612,144 400,000 300,000 300,000 300,000 300,000 1,600,000 300,000 N/A
Relationship to Comprehensive
Plan
Primary Connection
Element: Land Use and Community
Design
Section: Public Ways
Goal: L-9
Policy: L-79
Program: L-81
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15301.
ELECTRIC FUND
136 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Substation Security
Substation Security
Description
The electric substations are a key element of the Electric Distribution System used to provide
electricity to residents and customers of Palo Alto. This project will evaluate options for protect-
ing electric substations from outside vandalism and intrusion. If necessary, fences and other
protections will be repaired. Staff will issue a Professional Services request for proposal with
construction, if warranted and approved, to follow.
Justification
The recent incident involving PG&E's Metcalf Substation in South San Jose has brought about
increased security concerns regarding utility sites and systems. A severe disruption to one of
Palo Alto's substations could result in outages of an extended period. The Utility Site Security
Improvements project (EL-04012) is addressing the aspects of visual security such as digital
cameras, while this project will address the need for physical protection.
Significant Changes
2017-2021 CIP: Shifting project priorities have caused the delay for the completion of this proj-
ect. A consultant assessed and recommended security measures in 2017. Staff will review rec-
ommendations and issue bids for selected improvements.
Fund: Electric Fund - Operating
Category: System Improvements
Project Location: Colorado Substation
Managing Department: Utilities
Initial Project Start: Fall 2015
Initial Project Completion: Spring 2017
Revised Project Start: Fall 2018
Revised Project Completion: Winter 2019
Project Number: EL-16003
Substation perimeter wall providing security for the enclosed equipment
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund 1,909 248,090 248,090 250,000 250,000 0 0 0 500,000 0 749,999
Total 1,909 248,090 248,090 250,000 250,000 0 0 0 500,000 0 749,999
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 137
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 1,526 248,090 248,090 250,000 250,000 0 0 0 500,000 0 749,616
Design 381 0 0 0 0 0 0 0 0 0 381
Total 1,907 248,090 248,090 250,000 250,000 0 0 0 500,000 0 749,997
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15301.
ELECTRIC FUND
138 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Underground System Rebuild
Underground System Rebuild
Description
Underground primary electric cables and equipment have a limited life span and need to be
replaced before they fail and cause outages. This project will replace underground electric
equipment in areas that were originally installed underground instead of as a part of an Under-
ground District. Work will include the replacement of deteriorated electrical cable, transformers,
switches and enclosures. Installation of new equipment will bring the electrical system up to
current construction standards.
Justification
The underground system cables and equipment installed prior to 1990 have an expected life of
30 years. In addition, most of the equipment and cables were installed in subsurface enclosures
that have standing water in them in the winter. The water reduces the life of the equipment and
electrical connections and requires that rebuilding be performed on the facilities. Utilities has
specific projects to address rebuilding Underground Districts. This project will address replacing
underground equipment that was installed originally as underground and not part of an Under-
ground District.
Significant Changes
Shifting project priorities and staffing shortages have delayed identification and development
of projects to replace underground facilities that fall under this CIP.
Fund: Electric Fund - Operating
Category: System Improvements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Recurring
Initial Project Completion: Recurring
Project Number: EL-16001
Electric crews working preparing to enter underground vault
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 139
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund N/A 400,000 400,000 300,000 350,000 350,000 350,000 350,000 1,700,000 350,000 N/A
Total N/A 400,000 400,000 300,000 350,000 350,000 350,000 350,000 1,700,000 350,000 N/A
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction N/A 400,000 400,000 300,000 350,000 350,000 350,000 350,000 1,700,000 350,000 N/A
Design N/A 0 0 0 0 0 0 0 0 0 N/A
Total N/A 400,000 400,000 300,000 350,000 350,000 350,000 350,000 1,700,000 350,000 N/A
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15301.
ELECTRIC FUND
140 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Utility Control Center Upgrades
Utility Control Center Upgrades
Description
This project will make the following improvements to the Utility Control Center: upgrade the
existing lighting system, improve the operation map display by installing large video display
panels, and improve the system-wide security monitoring facilities.
Justification
The Utilities Control Center is used to coordinate the activities of the City's Electric Utility.
Within the facility there are large maps for monitoring the control of the system, video surveil-
lance feeds from other utility facilities and the Supervisory Control and Data Acquisition
(SCADA) system. This project will improve efficiency and operation of the room by updating
map displays and the surveillance facilities to newer technologies.
Supplemental Information
This project reflects expenditures in prior years for unrelated improvements in the Utility Con-
trol Center. Funding is added to this project on an as-needed basis.
Significant Changes
2017-2021 CIP: Shifting project priorities have caused the delay for the completion of this proj-
ect. As part of the FY 2017 Proposed CIP Budget, this was inadvertently reported as project EL-
06003, this adopted document corrects this.
2018-2022 CIP:Staff has gone out to bid for the UCC upgrades.
Fund: Electric Fund - Operating
Category: System Improvements
Project Location: Utility Control Center
Managing Department: Utilities
Initial Project Start: Fall 2017
Initial Project Completion: Spring 2018
Revised Project Start:
Revised Project Completion:
Project Number: EL-17008
System Operator overseeing electric distribution system operations
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 141
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund 0 400,000 400,000 100,000 0 0 0 0 100,000 0 500,000
Total 0 400,000 400,000 100,000 0 0 0 0 100,000 0 500,000
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 400,000 400,000 100,000 0 0 0 0 100,000 0 500,000
Total 0 400,000 400,000 100,000 0 0 0 0 100,000 0 500,000
Relationship to Comprehensive
Plan
Primary Connection
Element: Community Services &
Facilities
Section: Parks and Public Facilities
Goal: C-3
Policy: C-24
Program: C-19
Potential Board/Commission
Review:
Architectural Review Board
Utilities Advisory Commission
Environmental Impact Analysis:
Possible exemption.
ELECTRIC FUND
142 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Utility Site Security Improvements
Utility Site Security Improvements
Description
The Utilities Water and Gas Distribution Systems provide services to residents and businesses
that are fundamental necessities of living and working in Palo Alto. This project will add elec-
tronic security systems at utility sites to protect equipment at electric substations, water pump-
ing plants, reservoirs, and gas stations from intrusion and vandalism.
Justification
This project addresses security risks and methods of mitigation for City utility facilities identi-
fied in a utility site assessment that was completed in 2003. Recent incidents have heightened
security concerns regarding utility sites and systems. This CIP implements the recommenda-
tions in the site assessment report and installs equipment at two to three facilities per year.
Through March 2016, 7 of 9 electric utility sites were completed.
Significant Changes
2017-2021 CIP: Shifting project priorities have caused the delay for the completion of this proj-
ect.
Fund: Electric Fund - Operating
Category: System Improvements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Spring 2004
Initial Project Completion: Spring 2016
Revised Project Start:
Revised Project Completion: Summer 2019
Project Number: EL-04012
Security cameras for system security and monitoring
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund 1,375,529 69,119 49,120 70,960 50,000 50,000 50,000 0 220,960 0 1,645,609
Total 1,375,529 69,119 49,120 70,960 50,000 50,000 50,000 0 220,960 0 1,645,609
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 143
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 1,100,419 69,119 49,120 70,960 50,000 50,000 50,000 0 220,960 0 1,370,499
Design 275,101 0 0 0 0 0 0 0 0 0 275,101
Total 1,375,520 69,119 49,120 70,960 50,000 50,000 50,000 0 220,960 0 1,645,600
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Air Quality
Goal: N-5
Policy: N-26
Program: N-40
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
ELECTRIC FUND
144 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 145
Undergrounding Projects
ELECTRIC FUND
146 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Underground Distribution System Security
Underground Distribution System
Security
Description
This project funds the purchase and installation of equipment to secure underground electric
distribution facilities from vandalism, tampering, and theft to facilitate a safe, secure, and reli-
able electric system used to provide electricity to utility customers in the City of Palo Alto.
Justification
In recent years, the theft of metals for scrap has escalated due to increased demand overseas
and shortages of raw materials. This has included the theft of electrical wire and cast iron man-
hole covers. The electric system, and to a lesser extent the dark fiber system, fuels the economy
of the City as technology has become more reliant on electricity and communications systems.
Significant Changes
2017-2021 CIP: Engineering evaluation design is in progress. Additional time was requested to
complete evaluation of samples.
Fund: Electric Fund - Operating
Category: Undergrounding Projects
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Spring 2015
Initial Project Completion: Spring 2017
Revised Project Start:
Revised Project Completion: Spring 2019
Project Number: EL-13007
The damage done by copper/metal thieves can far exceed the value to the thief and cost of protection
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund 828 290,534 0 300,000 300,000 0 0 0 600,000 0 600,828
Total 828 290,534 0 300,000 300,000 0 0 0 600,000 0 600,828
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 147
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 662 290,534 0 300,000 300,000 0 0 0 600,000 0 600,662
Design 166 0 0 0 0 0 0 0 0 0 166
Total 828 290,534 0 300,000 300,000 0 0 0 600,000 0 600,828
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Relationship to Comprehensive
Plan
Secondary Connection
Element: Community Services &
Facilities
Section: Parks and Public Facilities
Goal: C-4
Policy: C-24
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
ELECTRIC FUND
148 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Underground District 42 - Embarcadero Rd Emerson/Middlefield
Underground District 42 -
Embarcadero Rd Emerson/Middlefield
Description
This project will replace the existing overhead distribution system with an underground system
along Embarcadero between Emerson and Middlefield. This project involves creating an Under-
ground Utilities District and performing the work on a general benefit basis under the provisions
of Utility Rule 17. This rule requires the Utility to bear the cost of the distribution system and the
property owners to bear the cost of undergrounding their services.
Justification
Benefits of undergrounding include system improvement, higher reliability, reduced tree trim-
ming, and improved aesthetics. Undergrounding has been approved to continue the ongoing
underground conversion program and also because the area meets the California Public Utilities
Commission rules dictating the areas where a telephone company can underground their lines.
Fund: Electric Fund - Operating
Category: Undergrounding Projects
Project Location: Along Embarcadero between
Emerson and Middlefield
Managing Department: Utilities
Initial Project Start: Spring 2017
Initial Project Completion: Spring 2019
Revised Project Start: Spring 2020
Revised Project Completion: Spring 2021
Project Number: EL-08001
Intersection of Embarcadero Road and Waverley Street (part of Underground District 42)
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund 0 0 0 0 50,000 1,700,000 250,000 0 2,000,000 0 2,000,000
Revenue from the
State of California 0 0 0 0 0 300,000 0 0 300,000 0 300,000
Total 0 0 0 0 50,000 2,000,000 250,000 0 2,300,000 0 2,300,000
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 149
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 0 0 0 0 2,000,000 250,000 0 2,250,000 0 2,250,000
Design 0 0 0 0 50,000 0 0 0 50,000 0 50,000
Total 0 0 0 0 50,000 2,000,000 250,000 0 2,300,000 0 2,300,000
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is categorically exempt from CEQA under Section 15302.
ELECTRIC FUND
150 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Underground District 43 - Alma/Embarcadero
Underground District 43 - Alma/
Embarcadero
Description
This project will replace the existing overhead distribution system with an underground system
in the area bounded by Alma, Addison, Bryant, and Melville. This project involves creating an
Underground Utilities District and performing the work on a general benefit basis under the
provisions of Utility Rule 17. This rule requires the Utility to bear the cost of the distribution sys-
tem and the property owners to bear the cost of undergrounding their services. The under-
grounding project will start in Fiscal Year 2018.
Justification
Benefits of undergrounding include system improvement, higher reliability, reduced tree trim-
ming and improved aesthetics. Undergrounding has been approved to continue the ongoing
underground conversion program and also because the area meets California Public Utilities
Commission rules dictating the areas where a telephone company can underground their lines.
Fund: Electric Fund - Operating
Category: Undergrounding Projects
Project Location: Alma, Addison, Bryant, and
Melville
Managing Department: Utilities
Initial Project Start: Spring 2018
Initial Project Completion: Spring 2019
Revised Project Start: Spring 2021
Revised Project Completion: Spring 2022
Project Number: EL-11009
Alma Street at Embarcadero Road (part of Underground District 43)
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund 0 0 0 0 0 150,000 1,700,000 500,000 2,350,000 0 2,350,000
Revenue from the
State of California 0 0 0 0 0 0 300,000 0 300,000 0 300,000
Total 0 0 0 0 0 150,000 2,000,000 500,000 2,650,000 0 2,650,000
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 151
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 0 0 0 0 0 2,000,000 500,000 2,500,000 0 2,500,000
Design 0 0 0 0 0 150,000 0 0 150,000 0 150,000
Total 0 0 0 0 0 150,000 2,000,000 500,000 2,650,000 0 2,650,000
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-10
Policy: N-44
Relationship to Comprehensive
Plan
Secondary Connection
Element: Land Use and Community
Design
Section: Public Ways
Goal: L-9
Policy: L-79
Program: L-80,L-81
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15301.
ELECTRIC FUND
152 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Underground District 46 - Charleston/El Camino Real
Underground District 46 - Charleston/
El Camino Real
Description
This project includes the costs to underground the existing overhead distribution system in the
area along the 400 block of West Charleston and El Camino Real. Undergrounding will be com-
pleted by Fiscal Year 2020, and the overhead system will be removed.
Justification
Benefits of undergrounding include system improvement, higher reliability, reduced tree trim-
ming, and improved aesthetics of this busy intersection. Funding has been approved to con-
tinue the ongoing underground conversion program and also because the area meets California
Public Utilities Commission rules dictating the areas where a telephone company can under-
ground their lines.
Significant Changes
2017-2021 CIP: Due to safety concerns this project has been re-prioritized and moved up by
one year.
Fund: Electric Fund - Operating
Category: Undergrounding Projects
Project Location: 400 block of West Charleston and
El Camino Real
Managing Department: Utilities
Initial Project Start: Spring 2015
Initial Project Completion: Spring 2017
Revised Project Start: Spring 2019
Revised Project Completion: Winter 2020
Project Number: EL-12001
Overhead facilities at the intersection of Arastradero Road and El Camino Real (part of Underground District 46)
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Electric Fund 142,687 611,267 113,787 1,197,480 0 0 0 0 1,197,480 0 1,453,954
Revenue from the
State of California 0 0 0 200,000 0 0 0 0 200,000 0 200,000
Total 142,687 611,267 113,787 1,397,480 0 0 0 0 1,397,480 0 1,653,954
ELECTRIC FUND
ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 153
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 114,148 611,267 113,787 1,397,480 0 0 0 0 1,397,480 0 1,625,415
Design 28,536 0 0 0 0 0 0 0 0 0 28,536
Total 142,684 611,267 113,787 1,397,480 0 0 0 0 1,397,480 0 1,653,951
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Relationship to Comprehensive
Plan
Secondary Connection
Element: Land Use and Community
Design
Section: Public Ways
Goal: L-9
Policy: L-79
Program: L-80,L-81
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15301.
ELECTRIC FUND
154 ELECTRIC FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 69
FIBER OPTICS FUND
FIBER OPTICS FUND
70 FIBER OPTICS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
FIBER OPTIC Overview
The City of Palo Alto is the only municipality in California that operates a full suite of City-
owned utility services. The most recent addition to this list of services provided to City of Palo
Alto residents and customers is the leasing of “dark“ fiber on a fiber optic loop, built by the City
in 1996. For the 2018-2022 Capital Improvement Program, expenditures of $3.45 million are
programmed, with $1.65 million allocated in Fiscal Year 2018. Major projects funded in the 2018-
2022 CIP include the Fiber Optics Customer Connections ($1.25 million) and Fiber Optics Net-
work System Improvements ($1.00 million). The budget for the Fiber Optics Capital Improve-
ment Program is broken into two separate categories: Capacity Improvements and Customer
Connections.
Capacity
Improvements
With the advance in technology,
increase in online services, and
increase in data transmission
needs to meet consumer
demand, the capability afforded
by fiber optic cables is increas-
ingly in demand. To ensure reli-
able fiber optic service to City of
Palo Alto residents and custom-
ers, fiber optic system compo-
nents (fiber optic cable and splice cabinets) need to be upgraded or added to increase
capacity; replaced or protected from damage by animals; and rerouted away from hazardous
conditions.
Recent Accomplishments
Upgraded the downtown backbone between a number of splice points to improve fiber
infrastructure and efficiency for customer connections and free up fibers.
Upgraded AutoCAD fiber maps to include Advanced Modeling Extension module for the
Geographic Information System.
Infrastructure Inventory
CLASSIFICATION QUANTITY
Cable 42
able 25
c Cable 60
$0
$400,000
$800,000
$1,200,000
$1,600,000
$2,000,000
FY 2014
Actuals
FY 2016
Actuals
FY 2018
Proposed
FY 2020
Projected
FY 2022
Projected
Fiber Optics Fund Capital
Expenditures
FIBER OPTICS FUND
FIBER OPTICS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 71
Upgraded the dark fiber network from University Avenue to Lytton Avenue at Bryant Street
to add capacity and improve efficiency for downtown businesses
Completed upgrade of fiber maps to Utilities GIS system, enabling a single view of multiple
utility infrastructures
Conducted a physical audit of the dark fiber network to improve network performance and
add capacity
2018-2022 Capital Improvement Program
Recurring Projects
There is one recurring project in the Capacity Improvements Category: the Fiber Optics Net-
work System Improvements. This project extends the “dark“ fiber optic network around Palo
Alto through the development of fiber sub-rings and completion of general improvements to
the fiber system. The annual funding for this project remains at $0.20 million throughout the
CIP.
Non-Recurring Projects
As part of the 2018-2022 Capital Improvement Program, one project is included within this cat-
egory: Fiber Optic System Rebuild (Fiscal Year 2018: $1.20 million, total cost $1.25 million). This
project is expected to extend through Fiscal Year 2018 and will rebuild portions of the “dark“
fiber optics network. Certain sections of the system have reached capacity limiting the City’s
ability to provide fiber optics service to all potential customers. Rebuilding portions of the
“dark“ fiber optic network includes installation of additional fiber optic cables in the Stanford
Research Park area and replacement of several below ground splice closures with pad-mounted
pedestals.
Customer Connections
As customers continually change their fiber optic needs due to equipment additions, new con-
struction, building expansions, building remodels, teardowns and rebuilds, and new building
occupancy types, the fiber optics system must evolve to meet these needs. Projects in this cat-
egory include work required to meet the needs of customers who have applied for new or
upgraded fiber optic service. The connection costs associated with new or upgraded connec-
tions are offset by charges to the customer.
Recent Accomplishments
Several services installed for Stanford University offsite facilities and other customers in the
Stanford Research Park area.
2018-2022 Capital Improvement Program
Recurring Projects
In the Customer Connections category there is one recurring project: Fiber Optics Customer
Connections. In the 2018-2022 Capital Improvement Program, recurring funding in this project
FIBER OPTICS FUND
72 FIBER OPTICS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
remains at $0.25 million. This project provides funding for the installation of fiber optic infra-
structure for new service connections.
Non-Recurring Projects
There are no non-recurring projects in this category.
Summary of Capital Activity
FIBER OPTICS FUND
Project
Number Project Title
FY 2016
Actuals
FY 2017
Estimate
FY 2018
Proposed FY 2019 FY 2020 FY 2021 FY 2022
5-Year
Total
Source of Funds
Other Revenues
FO-10000 Fiber Optics Customer Connections:
Connection Charges 91,085 120,000 200,000 200,000 200,000 200,000 200,000 1,000,000
Other Revenues Total 91,085 120,000 200,000 200,000 200,000 200,000 200,000 1,000,000
Total Sources 91,085 120,000 200,000 200,000 200,000 200,000 200,000 1,000,000
Use of Funds
Capacity Improvements
FO-10001 Fiber Optics Network System Improvements 267,321 367,035 200,000 200,000 200,000 200,000 200,000 1,000,000
FO-16000 Fiber Optic System Rebuild 140,875 50,000 1,200,000 0 0 0 0 1,200,000
Capacity Improvements Total 408,196 417,035 1,400,000 200,000 200,000 200,000 200,000 2,200,000
Customer Connections
FO-10000 Fiber Optics Customer Connections 158,654 255,360 250,000 250,000 250,000 250,000 250,000 1,250,000
Customer Connections Total 158,654 255,360 250,000 250,000 250,000 250,000 250,000 1,250,000
Total Uses 566,850 672,395 1,650,000 450,000 450,000 450,000 450,000 3,450,000
FIBER OPTICS FUND
FIBER OPTICS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 73
Insert Map Here
FIBER OPTICS FUND
74 FIBER OPTICS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
FIBER OPTICS FUND
FIBER OPTICS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 75
Capacity Improvements
FIBER OPTICS FUND
76 FIBER OPTICS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Fiber Optics Network System Improvements
Fiber Optics Network System
Improvements
Description
This project provides funding to improve reliability within the fiber optic network system. Typi-
cal activities in this project include: purchasing, upgrading, and installing fiber optic cables, con-
duits, and splice enclosures.
Justification
This project promotes the formation of a competitive market for telecommunications in Palo
Alto, accelerating the pace at which high-quality, low-cost, advanced telecommunications ser-
vices are delivered to the residents and businesses of Palo Alto. It does so while limiting the
negative impacts on Palo Alto's environment by using pre-existing conduit and poles. Finally, it
enables the Fiber Optics Fund to generate additional revenues through the enhanced use of its
conduit and poles.
Supplemental Information
The Fiber Optics Utility continues to add capital improvements in the form of additional fiber in
congested areas as well as areas of predicted growth.
Fund: Fiber Optics
Category: Capacity Improvements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Recurring
Initial Project Completion: Recurring
Project Number: FO-10001
Fiber optic crew installing new fiber optic cables
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Fiber Optics Fund N/A 367,035 367,365 200,000 200,000 200,000 200,000 200,000 1,000,000 0 N/A
Total N/A 367,035 367,365 200,000 200,000 200,000 200,000 200,000 1,000,000 0 N/A
FIBER OPTICS FUND
FIBER OPTICS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 77
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction N/A 367,035 367,365 200,000 200,000 200,000 200,000 200,000 1,000,000 0 N/A
Design N/A 0 0 0 0 0 0 0 0 0 N/A
Total N/A 367,035 367,365 200,000 200,000 200,000 200,000 200,000 1,000,000 0 N/A
Relationship to Comprehensive
Plan
Primary Connection
Element: Business & Economics
Section: Growth
Goal: B-3
Policy: B-13
Program: B-4
Potential Board/Commission
Review:
Architectural Review Board
Utilities Advisory Commission
Environmental Impact Analysis:
This project is categorically exempt form CEQA under section 15302.
FIBER OPTICS FUND
78 FIBER OPTICS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Fiber Optics System Rebuild
Fiber Optics System Rebuild
Description
This system capacity improvement project rebuilds portions of the "dark" fiber optic network
around Palo Alto which, in turn, is leased to parties providing telecommunication services to cit-
izens and businesses in Palo Alto. The rebuild projects will install new aerial duct or substruc-
tures (conduit and boxes), and additional fiber backbone cable to increase capacity for sections
of the dark fiber ring that are at or near capacity, and allow the Utilities Department to meet
customer requests for service. The rebuild project areas are mainly comprised of the Stanford
Research Park, Palo Alto Internet Exchange, and Downtown areas.
Justification
The Dark Fiber system was constructed in the early 1990s and started leasing fibers to custom-
ers in 1996. Since that time several sections of the dark fiber system have reached capacity and
limited the City's ability to serve its customers. This project improves the ability to maintain a
competitive market for telecommunications in Palo Alto, accelerating the pace at which
high quality, low cost, advanced telecommunications services are delivered to the residents
and businesses of Palo Alto. Work included in the project is intended to increase system capac-
ity and improve system reliability.
Significant Changes
Expenditures in Fiscal Year 2017 were lower than those in the past as staff worked on analysis of
system audit data to plan future improvements. Expenditures in Fiscal Year 2018 are expected
to be back to historical levels.
Fund: Fiber Optics
Category: Capacity Improvements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Spring 2016
Initial Project Completion: Spring 2018
Revised Project Start:
Revised Project Completion:
Project Number: FO-16000
Fiber optic splice closer ready for inspection and work
FIBER OPTICS FUND
FIBER OPTICS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 79
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Fiber Optics Fund 0 1,250,000 50,000 1,200,000 0 0 0 0 1,200,000 0 1,250,000
Total 0 1,250,000 50,000 1,200,000 0 0 0 0 1,200,000 0 1,250,000
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 1,250,000 50,000 1,200,000 0 0 0 0 1,200,000 0 1,250,000
Total 0 1,250,000 50,000 1,200,000 0 0 0 0 1,200,000 0 1,250,000
Relationship to Comprehensive
Plan
Primary Connection
Element: Business & Economics
Section: Growth
Goal: B-3
Policy: B-13
Program: B-4
Potential Board/Commission
Review:
Architectural Review Board
Utilities Advisory Commission
Environmental Impact Analysis:
This project is categorically exempt form CEQA under section 15302.
FIBER OPTICS FUND
80 FIBER OPTICS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
FIBER OPTICS FUND
FIBER OPTICS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 81
Customer Connections
FIBER OPTICS FUND
82 FIBER OPTICS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Fiber Optics Customer Connections
Fiber Optics Customer Connections
Description
This project provides funding for the installation of fiber optic infrastructure for new service
connections. Typical activities in this project include: purchasing, upgrading, and installing fiber
optic cables, conduits, and splice enclosures at customer sites.
Justification
This project promotes the formation of a competitive market for telecommunications in Palo
Alto, accelerating the pace at which high-quality, low-cost, advanced telecommunications ser-
vices are delivered to businesses while limiting the negative impacts on Palo Alto's environment
by using existing conduits and poles rather than adding additional infrastructure to the system.
Finally, it enables the Fibers Optic Fund to generate additional revenues through the enhanced
use of its conduits and poles.
Supplemental Information
The cost to the Fiber Optics Fund associated with new service connections and the City's cost
of ownership are billed to the requesting parties.
Fund: Fiber Optics
Category: Customer Connections
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Recurring
Initial Project Completion: Recurring
Project Number: FO-10000
Technician installing new fiber optic cables
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Fiber Optics Fund N/A 55,360 135,360 50,000 50,000 50,000 50,000 50,000 250,000 0 N/A
Other N/A 200,000 120,000 200,000 200,000 200,000 200,000 200,000 1,000,000 0 N/A
Total N/A 255,360 255,360 250,000 250,000 250,000 250,000 250,000 1,250,000 0 N/A
FIBER OPTICS FUND
FIBER OPTICS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 83
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction N/A 255,360 255,360 250,000 250,000 250,000 250,000 250,000 1,250,000 0 N/A
Design N/A 0 0 0 0 0 0 0 0 0 N/A
Total N/A 255,360 255,360 250,000 250,000 250,000 250,000 250,000 1,250,000 0 N/A
Relationship to Comprehensive
Plan
Primary Connection
Element: Business & Economics
Section: Growth
Goal: B-3
Policy: B-13
Program: B-4
Potential Board/Commission
Review:
Architectural Review Board
Utilities Advisory Commission
Environmental Impact Analysis:
This project is categorically exempt form CEQA under section 15302.
FIBER OPTICS FUND
84 FIBER OPTICS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 69
GAS FUND
GAS FUND
70 GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
GAS FUND Overview
The City of Palo Alto is the only municipality in California that operates a full suite of City-
owned utility services. The municipal gas distribution system began operation in 1917. It pro-
vides safe, reliable, and cost effective gas service to residents and customers of Palo Alto. For
the 2018-2022 Capital Improvement Program (CIP), approximately $29.19 million is pro-
grammed, with $2.49 million allocated in Fiscal Year 2018. Overall, a total of 11 projects are pro-
grammed for the 5-year CIP. Major projects funded in the 2018-2022 CIP include Gas Main
Replacements (cumulative total of $16.23 million), Gas System Customer Connections ($7.80
million), and Gas Meters and Regulators ($1.94 million). The budget for the Gas Fund CIP is bro-
ken into three separate categories: Customer Connections, Gas Main Replacements, and Sys-
tem Improvements.
Customer
Connections
As customers continually change
their gas needs due to equip-
ment additions, new construc-
tion, building expansions,
building remodels, tear-downs
and rebuilds, and new building
occupancy types, the gas system
must evolve to meet these
needs. The Gas System Cus-
tomer Connections project,
which is the largest project within the Gas Fund ($1.27 million in Fiscal Year 2018, $6.72 million
over the 2018-2022 CIP), is accounted for within this category. This project allows for the com-
pletion of work required to meet the needs of customers who have applied for new or upgraded
gas service. The Gas Fund pays for a portion of this project, while remaining costs are sup-
ported by reimbursements from customers for project work performed by the City.
Recent Accomplishments
In Fiscal Year 2016 the Utilities Gas Division completed approximately 168 customer service
projects, at a cost of $1.32 million.
Infrastructure Inventory
CLASSIFICATION QUANTITY
on system 210.31 miles
ion to residents and businesses 205.55 miles
s 4
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
FY 2014
Actuals
FY 2016
Actuals
FY 2018
Proposed
FY 2020
Projected
FY 2022
Projected
Gas Fund Capital Expendiures
GAS FUND
GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 71
2018-2022 Capital Improvement Program
Recurring Projects
A total of $7.80 million is programmed for Customer Connection recurring projects in the 2018-
2022 CIP, with $1.47 million allocated in Fiscal Year 2018. Recurring projects in this category
include the following:
Gas System Customer Connections (Fiscal Year 2018: $1.27 million; 5-Year CIP: $6.72 million)
System Extensions - Unreimbursed (Fiscal Year 2018: $0.20 million; 5-Year CIP: $1.09 million)
Non-Recurring Projects
There are no non-recurring projects under this category.
Gas Main Replacements
The Gas Main Replacements category accounts for the replacement of inadequately-sized and
structurally deficient gas mains that are subject to corrosion or reaching the end of their
expected life. The Utilities Department coordinates with the Public Works Department’s street
maintenance projects to minimize damage to the City’s pavement and maximize cost efficiency.
In the next five years, it is anticipated that 90,391 linear feet of gas mains, or 8 percent of the
entire system, will be replaced. The 2018-2022 Adopted CIP includes $17.73 million in funding
for projects within this category.
Recent Accomplishments
Completed the design and construction of approximately 69,700 linear feet of gas mains
and 996 gas service extensions from the City’s main distribution system with the recent CIP
project Gas Main Replacement (GMR) projects 19, 20, & 21.
Completed the design of gas main replacement project GMR 22 to replace approximately
19,440 linear feet of gas main pipelines and 367 service pipelines.
2018-2022 Capital Improvement Program
Recurring Projects
There are no recurring projects under this category.
Non-Recurring Projects
Five Gas Main Replacement (GMR) projects are included in the 2018-2022 CIP (Fiscal Year 2018:
$0.36 million; 5-Year CIP: $16.23 million). One new Gas ABS/Tenite Replacement project is
scheduled to start in Fiscal Year 2019 (Fiscal Year 2018: $0.00 million; 5-year CIP: $1.50 million).
System Improvements
To ensure reliable gas services for the City of Palo Alto residents and customers, gas infrastruc-
ture must be replaced upon reaching the end of its expected life. The System Improvements
GAS FUND
72 GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
category includes three projects during the 2018-2022 CIP at a total cost of $3.66 million, with
$0.65 million allocated in Fiscal Year 2018.
Recent Accomplishments
Completed building the gas distribution system model.
2018-2022 Capital Improvement Program
Recurring Projects
There are three funded recurring projects in the System Improvements category in the 2018-
2022 CIP: Gas Distribution System Improvements (Fiscal Year 2018: $0.24 million, 5-Year CIP:
$1.27 million), Gas Equipment and Tools (Fiscal Year 2018: $0.05 million, 5-Year CIP: $0.45 mil-
lion), and Gas Meters and Regulators (Fiscal Year 2018: $0.37 million, 5-Year CIP: $1.94 million).
Non-Recurring Projects
There are no non-recurring projects under this category in the 2018-2022 CIP.
Please refer to the City of Palo Alto Utilities webpage to confirm project details: http://
www.cityofpaloalto.org/gov/depts/utl/projects/default.asp
Summary of Capital Activity
GAS FUND
Project
Number Project Title
FY 2016
Actuals
FY 2017
Estimate
FY 2018
Proposed FY 2019 FY 2020 FY 2021 FY 2022
5-Year
Total
Source of Funds
Other Revenues
GS-80017 Gas System, Customer Connections 964,858 1,017,000 1,047,510 1,078,935 1,111,303 1,144,642 1,178,981 5,561,371
Other Revenue Total 964,858 1,017,000 1,047,510 1,078,935 1,111,303 1,144,642 1,178,981 5,561,371
Total Sources 964,858 1,017,000 1,047,510 1,078,935 1,111,303 1,144,642 1,178,981 5,561,371
Use of Funds
Customer Connections
GS-80017 Gas System, Customer Connections 1,252,556 1,247,236 1,265,355 1,303,315 1,342,415 1,382,688 1,424,169 6,717,942
GS-03009 System Extensions - Unreimbursed 72,200 75,000 204,455 210,590 216,908 223,415 230,117 1,085,485
Customer Connections Total 1,324,756 1,322,236 1,469,810 1,513,905 1,559,323 1,606,103 1,654,286 7,803,427
Gas Main Replacements
GS-18000 Gas ABS/Tenite Replacement Project 0 0 0 1,500,000 0 0 0 1,500,000
GS-09002 Gas Main Replacement - Project 19 68,899 0 0 0 0 0 0 0
GS-10001 Gas Main Replacement - Project 20 23,297 0 0 0 0 0 0 0
GAS FUND
GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 73
GS-11000 Gas Main Replacement - Project 21 678,845 0 0 0 0 0 0 0
GS-12001 Gas Main Replacement - Project 22 348,143 3,386,999 0 0 0 0 0 0
GS-13001 Gas Main Replacement - Project 23 0 0 363,000 3,588,510 0 0 0 3,951,510
GS-14003 Gas Main Replacement - Project 24 0 0 0 640,000 3,100,000 0 0 3,740,000
GS-15000 Gas Main Replacement - Project 25 0 0 0 0 659,000 3,200,000 0 3,859,000
GS-16000 Gas Main Replacement - Project 26 0 0 0 0 0 678,200 3,300,000 3,978,200
GS-20000 Gas Main Replacement - Project 27 0 0 0 0 0 700,000 700,000
Gas Main Replacements Total 1,119,183 3,386,999 363,000 5,728,510 3,759,000 3,878,200 4,000,000 17,728,710
System Improvements
GS-11002 Gas Distribution System Improvements 201,082 191,007 238,870 246,036 253,417 261,020 268,851 1,268,194
GS-14004 Gas Distribution System Model 33,981 0 0 0 0 0 0 0
GS-13002 Gas Equipment and Tools 47,763 30,000 50,000 100,000 100,000 100,000 100,000 450,000
GS-80019 Gas Meters and Regulators 42,872 659,957 365,681 376,652 387,952 399,591 411,579 1,941,455
GS-01019 GPS Global Positioning 641 0 0 0 0 0 0 0
GS-15001 Security at City Gas Receiving Stations 15,942 0 0 0 0 0 0 0
System Improvements Total 342,281 880,964 654,551 722,688 741,369 760,611 780,430 3,659,649
Total Uses 2,786,220 5,590,199 2,487,361 7,965,103 6,059,692 6,244,914 6,434,716 29,191,786
Project
Number Project Title
FY 2016
Actuals
FY 2017
Estimate
FY 2018
Proposed FY 2019 FY 2020 FY 2021 FY 2022
5-Year
Total
GAS FUND
74 GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
GAS FUND
GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 75
Insert Map Here
GAS FUND
76 GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
GAS FUND
GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 77
Customer Connections
GAS FUND
78 GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Gas System, Customer Connections
Gas System, Customer Connections
Description
This funding allows for the Gas Distribution System to be extended in order to provide gas ser-
vice to new customers and augment service to customers with increased natural gas demands.
Improvements include new mains, services, valves, regulators, meters, and accessories.
Justification
This project upgrades infrastructure to provide gas service connections to new customers, meet
changes in existing customer service demands, and respond to changes in gas service require-
ments due to new development or redevelopment. This project is funded partially from reim-
bursements by customers.
Significant Changes
2015-2019 CIP: Project was retitled from "Gas Systems Extensions".
Fund: Gas Fund - Operating
Category: Customer Connections
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Recurring
Initial Project Completion: Recurring
Project Number: GS-80017
Gas System Customer Connections
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Gas Fund N/A 230,236 230,236 217,845 224,380 231,112 238,046 245,188 1,156,571 1,200,000 N/A
Other N/A 1,017,000 1,017,000 1,047,510 1,078,935 1,111,303 1,144,642 1,178,981 5,561,371 266,894 N/A
Total N/A 1,247,236 1,247,236 1,265,355 1,303,315 1,342,415 1,382,688 1,424,169 6,717,942 1,466,894 N/A
GAS FUND
GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 79
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
N/A 0 0 0 0 0 0 0 0 0 N/A
Construction N/A 1,247,236 1,247,236 1,265,355 1,303,315 1,342,415 1,382,688 1,424,169 6,717,942 1,466,894 N/A
Design N/A 0 0 0 0 0 0 0 0 0 N/A
Total N/A 1,247,236 1,247,236 1,265,355 1,303,315 1,342,415 1,382,688 1,424,169 6,717,942 1,466,894 N/A
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
GAS FUND
80 GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
System Extensions - Unreimbursed
System Extensions - Unreimbursed
Description
This funding allows for the replacement of existing sections of the Gas Distribution System. This
project will ensure continuous gas service to existing customers. Improvements include replace-
ment of existing main sections, services, valves, regulators, meters, and accessories.
Justification
This project replaces gas distribution and existing customer service infrastructure. Existing gas
service connections are replaced by the Gas Utility to maintain customer service. This project
will capture non-reimbursed capital assets installed by staff.
Fund: Gas Fund - Operating
Category: Customer Connections
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Recurring
Initial Project Completion: Recurring
Project Number: GS-03009
New gas main being installed by horizontal direction drill (HDD) method
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Gas Fund N/A 319,701 75,000 204,455 210,590 216,908 223,415 230,117 1,085,485 237,021 N/A
Total N/A 319,701 75,000 204,455 210,590 216,908 223,415 230,117 1,085,485 237,021 N/A
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction N/A 319,701 75,000 204,455 210,590 216,908 223,415 230,117 1,085,485 237,021 N/A
Design
Total
N/A
N/A
0
319,701
0
75,000
0
204,455
0
210,590
0
216,908
0
223,415
0
230,117
0
1,085,485
0
237,021
N/A
N/A
GAS FUND
GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 81
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
GAS FUND
82 GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
GAS FUND
GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 83
Gas Main Replacements
GAS FUND
84 GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Gas ABS/Tenite Replacement Project
Gas ABS/Tenite Replacement Project
Description
This project replaces approximately 250 gas services using Acrylonitrile-butadiene-styrene
(ABS) or tenite gas pipes. These gas services are located in various neighborhoods throughout
the City. The Distribution Integrity Management Plan (DIMP) has identified ABS/tenite gas
pipes as a priority to be replaced.
Justification
Over time Acrylonitrile-butadiene-styrene (ABS) pipes develop an elliptical shape with brittle
sidewalls and have become vulnerable to rapid crack propagation failure. In addition, these ser-
vices do not have tracer wires and are hard to locate. This project is needed to reduce the Cityís
liability exposure due to material failure or damage caused by construction dig-ins.
Supplemental Information
The City of Palo Alto Distribution Integrity Management Plan's mathematical model is used to
evaluate risks presented by ABS and tenite material with high probability and consequences
scores. The number of gas services is subject to change upon further validation.
Significant Changes
New project
Fund: Gas Fund - Operating
Category: Gas Main Replacements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Winter 2017
Initial Project Completion: Summer 2018
Revised Project Start:
Revised Project Completion:
Project Number: GS-18000
Installed PE gas service pipe
GAS FUND
GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 85
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Gas Fund 0 0 0 0 1,500,000 0 0 0 1,500,000 0 1,500,000
Total 0 0 0 0 1,500,000 0 0 0 1,500,000 0 1,500,000
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 0 0 0 1,500,000 0 0 0 1,500,000 0 1,500,000
Total 0 0 0 0 1,500,000 0 0 0 1,500,000 0 1,500,000
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Program: N-63
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
GAS FUND
86 GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Gas Main Replacement - Project 23
Gas Main Replacement - Project 23
Description
This project replaces approximately 15,612 linear feet (which represents 1.4% of the City's Gas
distribution system) of gas mains and services that are leaking, inadequately-sized, and struc-
turally deficient. These replacements are located on various streets in Evergreen Park, College
Terrace, Ventura, Green Acres, and Midtown neighborhoods. Staff identifies problematic mains/
services by researching maintenance and leak histories, analyzing performance of the entire gas
distribution system, and considering risks ratings of the Distribution Integrity Management Plan.
Justification
The project will target replacing PVC mains and services located in business districts, and steel
mains and services with ineffective corrosion protection (aka cathodic protection). This project
is mandatory due to the need to replace aging infrastructure and to reduce the City's liability
exposure due to PVC and steel gas facilities with ineffective cathodic protection.
Supplemental Information
The City of Palo Alto Distribution Integrity Management Plan's mathematical model is used to
evaluate risks presented by PVC facilities, located within business districts, assigned the highest
probability and consequences scores. Targeted streets will be coordinated with the Public
Works Street Maintenance Program to complete replacement before streets are paved. Linear
footage and locations are subject to change. Please refer to the City of Palo Alto Utilities web-
page for the most recent project details.
Significant Changes
The construction is postponed to start in FY2019 due to GMR 22 being delayed.
Fund: Gas Fund - Operating
Category: Gas Main Replacements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Summer 2016
Initial Project Completion: Winter 2018
Revised Project Start: Summer 2018
Revised Project Completion: Winter 2020
Project Number: GS-13001
Installation of new HDP gas service main
GAS FUND
GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 87
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Gas Fund 0 3,630,650 42,500 363,000 3,588,510 0 0 0 3,951,510 0 3,994,010
Total 0 3,630,650 42,500 363,000 3,588,510 0 0 0 3,951,510 0 3,994,010
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 3,630,650 0 0 3,588,510 0 0 0 3,588,510 0 3,588,510
Design 0 0 42,500 363,000 0 0 0 0 363,000 0 405,500
Total 0 3,630,650 42,500 363,000 3,588,510 0 0 0 3,951,510 0 3,994,010
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
GAS FUND
88 GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Gas Main Replacement - Project 24
Gas Main Replacement - Project 24
Description
This project replaces approximately 24,030 linear feet (which represents 2.1% of the City's Gas
distribution system) of leaking, inadequately-sized, and structurally deficient gas mains and ser-
vices located on various streets in neighborhoods of Research Park, Green Acres, Charleston
Terrace and the Stanford Industrial business districts. Staff identifies problematic mains/services
by researching maintenance and leak histories, analyzing performance of the entire gas distri-
bution system, and considering risks ratings of the Distribution Integrity Management Plan.
Justification
The project will target replacing PVC mains and services located in business districts, and steel
mains and services with ineffective corrosion protection (aka cathodic protection). This project
is mandatory due to the need to replace aging infrastructure and to reduce the City's liability
exposure due to PVC and steel gas facilities with ineffective cathodic protection.
Supplemental Information
The City of Palo Alto Distribution Integrity Management Plan's mathematical model is used to
evaluate risks presented by PVC facilities, located within business districts, assigned the highest
probability and consequences scores. Targeted streets will be coordinated with the Public
Works Street Maintenance Program to complete replacement before streets are paved. Linear
footage and locations are subject to change. Please refer to the City of Palo Alto Utilities web-
page for the most recent project details.
Significant Changes
Due to delays of GMR 22 and GMR 23, GMR 24 is being postponed FY 2020.
Fund: Gas Fund - Operating
Category: Gas Main Replacements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Summer 2017
Initial Project Completion: Winter 2020
Revised Project Start: Summer 2019
Revised Project Completion: Winter 2021
Project Number: GS-14003
Installation of new HDP gas service main
GAS FUND
GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 89
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Gas Fund 0 640,000 0 0 640,000 3,100,000 0 0 3,740,000 0 3,740,000
Total 0 640,000 0 0 640,000 3,100,000 0 0 3,740,000 0 3,740,000
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 0 0 0 640,000 3,100,000 0 0 3,740,000 0 3,740,000
Design 0 640,000 0 0 0 0 0 0 0 0 0
Total 0 640,000 0 0 640,000 3,100,000 0 0 3,740,000 0 3,740,000
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15301.
GAS FUND
90 GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Gas Main Replacement - Project 25
Gas Main Replacement - Project 25
Description
This project replaces approximately 21,623 linear feet (which represents 1.9% of the City's Gas
distribution system) of leaking, inadequately-sized, and structurally deficient gas mains and ser-
vices located on various streets in the neighborhoods of Palo Verde, Midtown, Evergreen, and
Ventura. Staff identifies problematic mains/services by researching maintenance and leak histo-
ries, analyzing performance of the entire gas distribution system, and considering risks ratings
of the Distribution Integrity Management Plan.
Justification
The project will target replacing PVC mains and services, located in business districts, and steel
mains and services with ineffective corrosion protection, also known in the industry as cathodic
protection. This project is mandatory due to the need to replace aging infrastructure and to
reduce the City's liability exposure due to PVC and steel gas facilities with ineffective cathodic
protection.
Supplemental Information
The City of Palo Alto Distribution Integrity Management Plan's mathematical model is used to
evaluate risks presented by PVC facilities, located within business districts, assigned the highest
probability and consequences scores. Targeted streets will be coordinated with the Public
Works Street Maintenance Program to complete replacement before streets are paved. Linear
footage and locations are subject to change. Please refer to the City of Palo Alto Utilities web-
page for the most recent project details.
Fund: Gas Fund - Operating
Category: Gas Main Replacements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Summer 2018
Initial Project Completion: Winter 2020
Revised Project Start: Summer 2020
Revised Project Completion: Winter 2022
Project Number: GS-15000
New gas service meter and regulating equipment
GAS FUND
GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 91
Significant Changes
Project postponed to begin in FY2021 due to GMR22 being delayed.
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Gas Fund 0 0 0 0 0 659,000 3,200,000 0 3,859,000 0 3,859,000
Total 0 0 0 0 0 659,000 3,200,000 0 3,859,000 0 3,859,000
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 0 0 0 0 0 3,200,000 0 3,200,000 0 3,200,000
Design
Total
0
0
0
0
0
0
0
0
0
0
659,000
659,000
0
3,200,000
0
0
659,000
3,859,000
0
0
659,000
3,859,000
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
GAS FUND
92 GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Gas Main Replacement - Project 26
Gas Main Replacement - Project 26
Description
This project replaces approximately 13,471 linear feet (which represents 1.2% of the City's Gas
distribution system) of leaking, inadequately-sized, and structurally deficient gas mains and ser-
vices located on various streets in the University Park and Crescent Park neighborhoods. Staff
identifies problematic mains/services by researching maintenance and leak histories, analyzing
performance of the entire gas distribution system, and considering risks ratings of the Distribu-
tion Integrity Management Plan.
Justification
The project will target replacing PVC mains and services, located in business districts, and steel
mains and services with ineffective corrosion protection, also known in the industry as cathodic
protection. This project is mandatory due to the need to replace aging infrastructure and to
reduce the City's liability exposure due to PVC and steel gas facilities with ineffective cathodic
protection.
Supplemental Information
The City of Palo Alto Distribution Integrity Management Plan's mathematical model is used to
evaluate risks presented by PVC facilities, located within business districts, assigned the highest
probability and consequences scores. Targeted streets will be coordinated with the Public
Works Street Maintenance Program to complete replacement before streets are paved. Linear
footage and locations are subject to change. Please refer to the City of Palo Alto Utilities web-
page for the most recent project details.
Fund: Gas Fund - Operating
Category: Gas Main Replacements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Summer 2019
Initial Project Completion: Winter 2021
Revised Project Start: Summer 2021
Revised Project Completion: Winter 2023
Project Number: GS-16000
Gas Main Replacement - Project 26
GAS FUND
GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 93
Significant Changes
Due to delays of GMR 22 and GMR 23, this project is postponed to FY 2022.
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Gas Fund 0 0 0 0 0 0 678,200 3,300,000 3,978,200 0 3,978,200
Total 0 0 0 0 0 0 678,200 3,300,000 3,978,200 0 3,978,200
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 0 0 0 0 0 0 3,300,000 3,300,000 0 3,300,000
Design 0 0 0 0 0 0 678,200 0 678,200 0 678,200
Total 0 0 0 0 0 0 678,200 3,300,000 3,978,200 0 3,978,200
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
GAS FUND
94 GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Gas Main Replacement - Project 27
Gas Main Replacement - Project 27
Description
This project replaces approximately 15,655 linear feet (which represents 1.4 percent of the City's
gas distribution system) of leaking, inadequately-sized, and structurally deficient gas mains and
services located on various streets in the Crescent Park and University South neighborhoods.
Staff identifies problematic mains/services by researching maintenance and leak histories, ana-
lyzing performance of the entire gas distribution system, and considering risks ratings of the
Distribution Integrity Management Plan.
Justification
The project will target replacing PVC mains and services, located in business districts, and steel
mains and services with ineffective corrosion protection, also known in the industry as cathodic
protection. This project is mandatory due to the need to replace aging infrastructure and to
reduce the City's liability exposure due to PVC and steel gas facilities with ineffective cathodic
protection.
Supplemental Information
The City of Palo Alto Distribution Integrity Management Plan's mathematical model is used to
evaluate risks presented by PVC facilities, located within business districts, assigned the highest
probability and consequences scores. Targeted streets will be coordinated with the Public
Works Street Maintenance Program to complete replacement before streets are paved. Linear
footage and locations are subject to change. Please refer to the City of Palo Alto Utilities web-
page for the most recent project details.
Fund: Gas Fund - Operating
Category: Gas Main Replacements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Summer 2020
Initial Project Completion: Winter 2022
Revised Project Start: Summer 2022
Revised Project Completion: Winter 2024
Project Number: GS-20000
New gas service meter and regulating equipment
GAS FUND
GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 95
Significant Changes
2016-2010 CIP: Project established.
2018-2023 CIP:Due to delays of GMR 22 and GMR 23, this project is postponed to FY 2023.
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Gas Fund 0 0 0 0 0 0 0 700,000 700,000 3,400,000 4,100,000
Total 0 0 0 0 0 0 0 700,000 700,000 3,400,000 4,100,000
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 0 0 0 0 0 0 0 0 3,400,000 3,400,000
Design 0 0 0 0 0 0 0 700,000 700,000 0 700,000
Total 0 0 0 0 0 0 0 700,000 700,000 3,400,000 4,100,000
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15301.
GAS FUND
96 GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
GAS FUND
GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 97
System Improvements
GAS FUND
98 GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Gas Distribution System Improvements
Gas Distribution System
Improvements
Description
This project provides funding as needed to improve the Gas Distribution System. Typical activi-
ties include: increasing distribution system capacity for load growth, replacing deteriorated cap-
ital facilities, re-configuring/adding to the system to improve service reliability, conducting
research related to performance of the gas distribution system or its various components, and
making general improvements to the system.
Justification
Gas Distribution System reliability and adequate capacity are critical to providing a high level of
service to customers. When service interruptions occur, customers may experience significant
economic losses. The City must continuously evaluate service reliability needs and make
improvements to the system to maintain top level service to City customers.
Fund: Gas Fund - Operating
Category: System Improvements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Recurring
Initial Project Completion: Recurring
Project Number: GS-11002
Gas System Improvements
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Gas Fund N/A 408,124 191,007 238,870 246,036 253,417 261,020 268,851 1,268,194 276,916 N/A
Total N/A 408,124 191,007 238,870 246,036 253,417 261,020 268,851 1,268,194 276,916 N/A
GAS FUND
GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 99
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction N/A 408,124 191,007 238,870 246,036 253,417 261,020 268,851 1,268,194 276,916 N/A
Design N/A 0 0 0 0 0 0 0 0 0 N/A
Total N/A 408,124 191,007 238,870 246,036 253,417 261,020 268,851 1,268,194 276,916 N/A
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
GAS FUND
100 GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Gas Equipment and Tools
Gas Equipment and Tools
Description
This project funds the purchase of polyethylene (PE) fusion equipment and tools, directional
boring/locating equipment and tools, and general shop equipment and tools.
Justification
In order to safely operate and maintain a natural gas distribution system, and support operating
personnel safety and productivity, directional boring/locating and fusion equipment and tools
need to be upgraded on an annual basis.
Significant Changes
2015-2019 CIP: Project was retitled from "General Shop Equipment and Tools".
Fund: Gas Fund - Operating
Category: System Improvements
Project Location: Municipal Service Center
Managing Department: Utilities
Initial Project Start: Recurring
Initial Project Completion: Recurring
Project Number: GS-13002
New HDPE gas pipe being fused prior to installation
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Gas Fund N/A 170,106 30,000 50,000 100,000 100,000 100,000 100,000 450,000 0 N/A
Total N/A 170,106 30,000 50,000 100,000 100,000 100,000 100,000 450,000 0 N/A
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction N/A 0 30,000 50,000 100,000 100,000 100,000 100,000 450,000 0 N/A
Design N/A 0 0 0 0 0 0 0 0 0 N/A
Other N/A 170,106 0 0 0 0 0 0 0 0 N/A
Total N/A 170,106 30,000 50,000 100,000 100,000 100,000 100,000 450,000 0 N/A
GAS FUND
GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 101
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15301.
GAS FUND
102 GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Gas Meters and Regulators
Gas Meters and Regulators
Description
This project provides replacement of the existing meters and regulators for approximately
2,000 meter sets per year.
Justification
The meter replacement program ensures accuracy of gas consumption measurement, reduces
possible revenue loss due to under-registering gas, and provides customers with accurate
monthly bills. The program exchanges large meters (630 cubic feet per hour and larger) every
10 years and smaller meters every 17 to 20 years.
Fund: Gas Fund - Operating
Category: System Improvements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Recurring
Initial Project Completion: Recurring
Project Number: GS-80019
Gas Meters and Regulators
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Gas Fund N/A 659,957 659,957 365,681 376,652 387,952 399,591 411,579 1,941,455 423,926 N/A
Total N/A 659,957 659,957 365,681 376,652 387,952 399,591 411,579 1,941,455 423,926 N/A
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction N/A 659,957 659,957 365,681 376,652 387,952 399,591 411,579 1,941,455 423,926 N/A
Design N/A 0 0 0 0 0 0 0 0 0 N/A
Total N/A 659,957 659,957 365,681 376,652 387,952 399,591 411,579 1,941,455 423,926 N/A
GAS FUND
GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 103
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Energy
Goal: N-9
Policy: N-44
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
GAS FUND
104 GAS FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 69
WASTEWATER
COLLECTION FUND
WASTEWATER COLLECTION FUND
70 WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
WASTEWATER COLLE Overview
The City of Palo Alto is the only municipality in California that operates a full suite of City-
owned utility services. The municipal wastewater collection system began operation in 1898
and continues to provide safe, reliable, and cost effective wastewater service to residents and
customers of Palo Alto. For the 2018-2022 Capital Improvement Program (CIP), approximately
$22.48 million is programmed, with $1.69 million allocated in Fiscal Year 2018. Overall, a total of
9 projects are programmed for the 5-year CIP. Major projects funded in the 2018-2022 CIP
include Wastewater Collection System Rehabilitation/Augmentation projects (cumulative total
of $15.39 million), Sewer Lateral/Manhole Rehabilitation and Replacement ($3.38 million), and
Sewer System Customer Connections ($2.15 million). The budget for the Wastewater Collection
Fund CIP is broken into two separate categories: Customer Connections and System Improve-
ments.
Customer
Connections
As customers continually change
their wastewater needs due to
equipment additions, new con-
struction, building expansions,
building remodels, teardowns
and rebuilds, and new building
occupancy types, the wastewa-
ter collection system must
evolve to meet these needs. The
Sewer System Customer Con-
nections project is the only project within this category and includes work required to meet the
needs of customers who have applied for new sewer laterals. The Wastewater Fund pays for a
portion of this project, while remaining costs are supported by reimbursements from customers
for project work performed by the City.
Recent Accomplishments
In Fiscal Year 2016 the Utilities Wastewater Division completed over 79 customer service
projects with a total cost of $0.36 million.
Infrastructure Inventory
CLASSIFICATION QUANTITY
es 217 miles
18,141
$0
$4,000,000
$8,000,000
$12,000,000
FY 2014
Actuals
FY 2016
Actuals
FY 2018
Proposed
FY 2020
Projected
FY 2022
Projected
Wastewater Collection Fund
Capital Expenditures
WASTEWATER COLLECTION FUND
WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 71
2018-2022 Capital Improvement Program
Recurring Projects
There is only one project within this category, the Sewer System Customer Connections project
with funding of $2.15 million over the 5-year CIP. This project funds customer connections and
offset by reimbursements from customers requesting the service.
Non-Recurring Projects
There are no non-recurring projects in this category.
System Improvement
To ensure reliable wastewater services for the City of Palo Alto residents and customers, infra-
structure must be replaced upon reaching the end of its useful life. The infrastructure replace-
ment program includes projects that will rehabilitate or replace deteriorated pipelines. In the
next five years, it is estimated that approximately 92,341 linear feet of wastewater mains will be
replaced.
Recent Accomplishments
Began construction of multi-year CIP projects for Wastewater Collection System
Rehabilitation/Augmentation Projects 24, 25, 26, and 27 which include replacement of 58,151
linear feet of wastewater mains and 1,038 sewer laterals.
2018-2022 Capital Improvement Program
Recurring Projects
A total of $4.93 million is programmed for System Improvement recurring projects in the 2018-
2022 CIP, with $1.28 million allocated in Fiscal Year 2018. Recurring projects in this category
include the following:
Wastewater System Improvements (Fiscal Year 2018: $0.25 million; 5-Year CIP: $1.30 million)
Wastewater General Equipment and Tools (Fiscal Year 2018: $0.05 million; 5-Year CIP: $0.25
million)
Sewer Lateral/Manhole Rehabilitation and Replacement (Fiscal Year 2018: $0.64 million; 5-
Year CIP: $3.38 million)
Non-Recurring Projects
The majority of funding within this category is allocated towards Wastewater Collection System
Rehabilitation/Augmentation Projects (cumulative total of $15.39 million). These projects imple-
ment high priority rehabilitation, augmentation, and lateral replacement work which reduces
inflow of rainfall and ground water into the collection system. The Utilities Department coordi-
nates with the Public Works Department’s street maintenance projects to minimize damage to
the City’s pavement and maximize cost efficiencies.
WASTEWATER COLLECTION FUND
72 WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Linear footage and locations are subject to change, please refer to the City of Palo Alto Utilities
webpage to confirm project details: http://www.cityofpaloalto.org/gov/depts/utl/projects/
default.asp.
Summary of Capital Activity
WASTEWATER COLLECTION FUND
Project
Number Project Title
FY 2016
Actuals
FY 2017
Estimate
FY 2018
Proposed FY 2019 FY 2020 FY 2021 FY 2022
5-Year
Total
Source of Funds
Other Revenues
WC-80020 Sewer System, Customer Connections 790,033 264,425 405,820 417,995 430,534 443,450 456,754 2,154,553
Other Revenue Total 790,033 264,425 405,820 417,995 430,534 443,450 456,754 2,154,553
Total Sources 790,033 264,425 405,820 417,995 430,534 443,450 456,754 2,154,553
Use of Funds
Customer Connections
WC-80020 Sewer System, Customer Connections 357,560 415,792 405,820 417,995 430,534 443,450 456,754 2,154,553
Customer Connections Total 357,560 415,792 405,820 417,995 430,534 443,450 456,754 2,154,553
System Improvements
WC-99013 Sewer Lateral/Manhole Rehabilitation and
Replacement 220,455 1,564,957 636,540 655,636 675,305 695,564 716,431 3,379,476
WC-09001 Wastewater Collection System Rehabilitation/
Augmentation Project 22 176 0 0 0 0 0 0 0
WC-10002 Wastewater Collection System Rehabilitation/
Augmentation Project 23 0 324,253 0 0 0 0 0 0
WC-11000 Wastewater Collection System Rehabilitation/
Augmentation Project 24 835,311 1,352,119 0 0 0 0 0 0
WC-12001 Wastewater Collection System Rehabilitation/
Augmentation Project 25 834,017 1,687,670 0 0 0 0 0 0
WC-13001 Wastewater Collection System Rehabilitation/
Augmentation Project 26 1,063,095 1,881,236 0 0 0 0 0 0
WC-14001 Wastewater Collection System Rehabilitation/
Augmentation Project 27 203,558 3,802,859 0 0 0 0 0 0
WC-15001 Wastewater Collection System Rehabilitation/
Augmentation Project 28 0 0 351,300 3,513,000 0 0 0 3,864,300
WC-16001 Wastewater Collection System Rehabilitation/
Augmentation Project 29 0 0 0 327,849 3,278,490 0 0 3,606,339
WC-17001 Wastewater Collection System Rehabilitation/
Augmentation Project 30 0 0 0 0 337,684 3,367,845 0 3,705,529
WC-19001 Wastewater Collection System Rehabilitation/
Augmentation Project 31 0 0 0 0 0 372,185 3,478,150 3,850,335
WC-20000 Wastewater Collection System Rehabilitation/
Augmentation Project 32 0 0 0 0 0 0 358,249 358,249
WASTEWATER COLLECTION FUND
WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 73
WC-13002 Wastewater General Equipment and Tools 0 50,000 50,000 50,000 50,000 50,000 50,000 250,000
WC-15002 Wastewater System Improvements 11,266 292,567 246,000 253,000 260,000 269,000 276,875 1,304,875
System Improvements Total 3,167,878 10,955,661 1,283,840 4,799,485 4,601,479 4,754,594 4,879,705 20,319,103
Total Uses 3,525,438 11,371,453 1,689,660 5,217,480 5,032,013 5,198,044 5,336,459 22,473,656
Project
Number Project Title
FY 2016
Actuals
FY 2017
Estimate
FY 2018
Proposed FY 2019 FY 2020 FY 2021 FY 2022
5-Year
Total
WASTEWATER COLLECTION FUND
74 WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
WASTEWATER COLLECTION FUND
WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 75
Insert Map Here
WASTEWATER COLLECTION FUND
76 WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
WASTEWATER COLLECTION FUND
WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 77
Customer Connections
WASTEWATER COLLECTION FUND
78 WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Sewer System, Customer Connections
Sewer System, Customer Connections
Description
This project provides for the installation of sewer lateral connections, additions of existing
mains, and extensions of mains for new or existing customers.
Justification
It is necessary to provide sewer connections to serve new customers and to respond to changes
in sewer requirements due to redevelopment. Old existing non-plastic sewer service laterals
become cracked and broken by tree root intrusion, ground movement, and third party excava-
tion damages requiring the laterals to be replaced.
Supplemental Information
Other Revenues includes customer connection and capacity fees for connecting to the waste-
water collection system. Capacity fees are collected through connection charges to cover the
proportionate cost of system improvements required to serve new customers.
Significant Changes
This project was previously titled "Sewer System Extension". As part of the Fiscal Year 2015
budget it has been retitled "Sewer System, Customer Connections" to more accurately reflect
the work done with this funding.
Fund: Wastewater Collection - Operating
Category: Customer Connections
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Recurring
Initial Project Completion: Recurring
Project Number: WC-80020
Sewer System, Customer Connections
WASTEWATER COLLECTION FUND
WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 79
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Other N/A 601,439 264,425 405,820 417,995 430,534 443,450 456,754 2,154,553 0 N/A
Wastewater
Collection Fund N/A (185,647)151,367 0 0 0 0 0 0 0 N/A
Total N/A 415,792 415,792 405,820 417,995 430,534 443,450 456,754 2,154,553 0 N/A
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction N/A 415,792 415,792 405,820 417,995 430,534 443,450 456,754 2,154,553 0 N/A
Design N/A 0 0 0 0 0 0 0 0 0 N/A
Total N/A 415,792 415,792 405,820 417,995 430,534 443,450 456,754 2,154,553 0 N/A
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-18
Relationship to Comprehensive
Plan
Secondary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-25
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
WASTEWATER COLLECTION FUND
80 WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
WASTEWATER COLLECTION FUND
WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 81
System Improvements
WASTEWATER COLLECTION FUND
82 WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Sewer Lateral/Manhole Rehabilitation and Replacement
Sewer Lateral/Manhole Rehabilitation
and Replacement
Description
This project will replace defective sewer laterals, cleanouts, manholes, install backwater devices,
and purchase equipment to support these activities in order to maintain the Wastewater Collec-
tion System. Information collected during routine annual maintenance activities is used to prior-
itize work. Defective laterals, for example, will be replaced to re-establish existing services,
reduce maintenance expenses, and eliminate ground water intrusion. Backwater devices will be
installed to reduce backflows of sewage. New manholes will be installed or rehabilitated to
improve structural integrity.
Justification
The work will help reduce both the backflow of sewage onto private property and the City's
treatment expenses. This project also cleans and videotapes sewer collection mains and laterals
as necessary.
Fund: Wastewater Collection - Operating
Category: System Improvements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Recurring
Initial Project Completion: Recurring
Project Number: WC-99013
Sewer manhole base
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Wastewater
Collection Fund N/A 1,564,956 1,564,957 636,540 655,636 675,305 695,564 716,431 3,379,476 0 N/A
Total N/A 1,564,956 1,564,957 636,540 655,636 675,305 695,564 716,431 3,379,476 0 N/A
WASTEWATER COLLECTION FUND
WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 83
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction N/A 1,564,956 1,564,957 636,540 655,636 675,305 695,564 716,431 3,379,476 0 N/A
Design N/A 0 0 0 0 0 0 0 0 0 N/A
Total N/A 1,564,956 1,564,957 636,540 655,636 675,305 695,564 716,431 3,379,476 0 N/A
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-18
Relationship to Comprehensive
Plan
Secondary Connection
Element: Natural Environment
Section: Water Resources
Goal: L-1
Policy: N-25
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
WASTEWATER COLLECTION FUND
84 WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Wastewater Collection System Rehabilitation/Augmentation Project 28
Wastewater Collection System
Rehabilitation/Augmentation Project
28
Description
The project will fund the design and construction of high priority main and lateral replacement
work, which reduces inflow of rainfall and ground water into the collection system. The project
replaces 21,889 linear feet (which represents 1.5% of the City's Wastewater Collection system)
for various streets in the City, including large sections in the Charleston Meadows and Leland
Manor/Garland neighborhoods. The project will be comprised of laterals identified in video
inspection work or through maintenance records identified as deficient and in need of replace-
ment. Priority will be given to areas identified by Public Works as targeted work zones ensuring
infrastructure coordination among different City departments.
Justification
The 2004 Collection System Master Plan (Master Plan Study) update indicated certain facilities
are in need of enlargement to handle growth and peak flows. The mains selected for replace-
ment and/or rehabilitation are determined by the recommendations for the Master Plan Study;
research and analysis of sewer main maintenance records; cleaning and videotaping of sanitary
sewer mains; condition assessment; real time flow monitoring of existing sewers; and hydraulic
computer modeling.
Fund: Wastewater Collection - Operating
Category: System Improvements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Summer 2016
Initial Project Completion: Winter 2018
Revised Project Start: Summer 2018
Revised Project Completion: Winter 2020
Project Number: WC-15001
Trenching for installation of HDPE sewer main by open trench method
WASTEWATER COLLECTION FUND
WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 85
Supplemental Information
Linear footage and locations are subject to change, please refer to the City of Palo Alto Utilities
webpage to confirm project details.
Significant Changes
Due to delays in SSR 24, 25, 26, and 27, the construction for this project is postponed to FY
2019.
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Wastewater
Collection Fund 0 3,513,000 0 351,300 3,513,000 0 0 0 3,864,300 0 3,864,300
Total 0 3,513,000 0 351,300 3,513,000 0 0 0 3,864,300 0 3,864,300
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 3,183,000 0 351,300 3,513,000 0 0 0 3,864,300 0 3,864,300
Design 0 330,000 0 0 0 0 0 0 0 0 0
Total 0 3,513,000 0 351,300 3,513,000 0 0 0 3,864,300 0 3,864,300
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-18
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
WASTEWATER COLLECTION FUND
86 WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Wastewater Collection System Rehabilitation/Augmentation Project 29
Wastewater Collection System
Rehabilitation/Augmentation Project
29
Description
This project funds the design and construction of high priority main and lateral replacement
work, which reduces inflow of rainfall and ground water into the collection system. The project
replaces 14,352 linear feet (which represents 1.3% of the City's Wastewater Collection system)
for large sections in the Ventura neighborhood and along several streets on El Camino Real. The
project will be comprised of laterals identified in video inspection work or through maintenance
records as deficient and in need of replacement. Priority will be given to areas identified by Pub-
lic Works as targeted work zones ensuring infrastructure coordination among different City
departments.
Justification
The 2004 Collection System Master Plan (Master Plan Study) update indicated certain facilities
are in need of enlargement to handle growth and peak flows. The mains selected for replace-
ment and/or rehabilitation are determined by the recommendations for the Master Plan Study;
research and analysis of sewer main maintenance records; cleaning and videotaping of sanitary
sewer mains; condition assessment; real time flow monitoring of existing sewers; and hydraulic
computer modeling.
Fund: Wastewater Collection - Operating
Category: System Improvements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Summer 2017
Initial Project Completion: Winter 2019
Revised Project Start: Summer 2019
Revised Project Completion: Winter 2021
Project Number: WC-16001
Rehabilitation Equipment
WASTEWATER COLLECTION FUND
WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 87
Supplemental Information
Linear footage and locations are subject to change, please refer to the City of Palo Alto Utilities
webpage to confirm project details.
Significant Changes
Due to delays in SSR 24, 25, 26, and 27, the construction for this project is postponed to FY
2020.
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Wastewater
Collection Fund 0 327,849 0 0 327,849 3,278,490 0 0 3,606,339 0 3,606,339
Total 0 327,849 0 0 327,849 3,278,490 0 0 3,606,339 0 3,606,339
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 0 0 0 0 3,278,490 0 0 3,278,490 0 3,278,490
Design 0 327,849 0 0 327,849 0 0 0 327,849 0 327,849
Total 0 327,849 0 0 327,849 3,278,490 0 0 3,606,339 0 3,606,339
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-18
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
WASTEWATER COLLECTION FUND
88 WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Wastewater Collection System Rehabilitation/Augmentation Project 30
Wastewater Collection System
Rehabilitation/Augmentation Project
30
Description
For fiscal years 2018 and 2019, this project funds the design and construction of high priority
main and lateral replacement work, which reduces inflow of rainfall and ground water into the
collection system. The project replaces 15,680 linear feet (which represents 1.4% of the City's
Wastewater Collection system) for various streets in the City, including large sections in the
Green Acres, Ventura and Barron Park neighborhoods. The project will be comprised of laterals
identified in video inspection work or through maintenance records as deficient and in need of
replacement. Priority will be given to areas identified by Public Works as targeted work zones
ensuring infrastructure coordination among different City departments.
Justification
The 2004 Collection System Master Plan (Master Plan Study) update indicated certain facilities
are in need of enlargement to handle growth and peak flows. The mains selected for replace-
ment and/or rehabilitation are determined by the recommendations for the Master Plan Study;
research and analysis of sewer main maintenance records; cleaning and videotaping of sanitary
sewer mains; condition assessment; real time flow monitoring of existing sewers; and hydraulic
computer modeling.
Fund: Wastewater Collection - Operating
Category: System Improvements
Project Location:
Managing Department: Utilities
Initial Project Start: Summer 2018
Initial Project Completion: Winter 2020
Revised Project Start: Summer 2020
Revised Project Completion: Winter 2022
Project Number: WC-17001
Trenching for installation of HDPE sewer main by open trench method
WASTEWATER COLLECTION FUND
WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 89
Supplemental Information
Linear footage and locations are subject to change, please refer to the City of Palo Alto Utilities
webpage to confirm project details.
Significant Changes
Due to delays in SSR 24, 25, 26, and 27, the construction for this project is postponed to FY
2021.
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Wastewater
Collection Fund 0 0 0 0 0 337,684 3,367,845 0 3,705,529 0 3,705,529
Total 0 0 0 0 0 337,684 3,367,845 0 3,705,529 0 3,705,529
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 0 0 0 0 0 3,367,845 0 3,367,845 0 3,367,845
Design 0 0 0 0 0 337,684 0 0 337,684 0 337,684
Total 0 0 0 0 0 337,684 3,367,845 0 3,705,529 0 3,705,529
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-18
Relationship to Comprehensive
Plan
Secondary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-25
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
WASTEWATER COLLECTION FUND
90 WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Wastewater Collection System Rehabilitation/Augmentation Project 31
Wastewater Collection System
Rehabilitation/Augmentation Project
31
Description
This project funds the design and construction of high priority lateral replacement work, which
reduces inflow of rainfall and ground water into the collection system. The project replaces
24,983 linear feet (which represents 2.2% of the City's Wastewater Collection system) for vari-
ous streets in the City, including large sections in the Southgate and University Park neighbor-
hoods. The project will be comprised of laterals identified in video inspection work or through
maintenance records as deficient and in need of replacement. Priority will be given to areas
identified by Public Works as targeted work zones ensuring infrastructure coordination among
different City departments.
Justification
The 2004 Collection System Master Plan (Master Plan Study) update indicated certain facilities
are in need of enlargement to handle growth and peak flows. The mains selected for replace-
ment and/or rehabilitation are determined by the recommendations for the Master Plan Study;
research and analysis of sewer main maintenance records; cleaning and videotaping of sanitary
sewer mains; condition assessment; real time flow monitoring of existing sewers; and hydraulic
computer modeling.
Fund: Wastewater Collection - Operating
Category: System Improvements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Summer 2019
Initial Project Completion: Winter 2021
Revised Project Start: Summer 2021
Revised Project Completion: Winter 2023
Project Number: WC-19001
Sewer Trench Line
WASTEWATER COLLECTION FUND
WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 91
Supplemental Information
Linear footage and locations are subject to change, please refer to the City of Palo Alto Utilities
webpage to confirm project details.
Significant Changes
Due to delays in SSR 24, 25, 26, and 27, the construction for this project is postponed to FY
2022.
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Wastewater
Collection Fund 0 0 0 0 0 0 372,185 3,478,150 3,850,335 0 3,850,335
Total 0 0 0 0 0 0 372,185 3,478,150 3,850,335 0 3,850,335
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 0 0 0 0 0 0 3,478,150 3,478,150 0 3,478,150
Design 0 0 0 0 0 0 372,185 0 372,185 0 372,185
Total 0 0 0 0 0 0 372,185 3,478,150 3,850,335 0 3,850,335
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-18
Relationship to Comprehensive
Plan
Secondary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-25
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
WASTEWATER COLLECTION FUND
92 WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Wastewater Collection System Rehabilitation/Augmentation Project 32
Wastewater Collection System
Rehabilitation/Augmentation Project
32
Description
This project funds the design and construction of high priority main and lateral replacement
work, which reduces inflow of rainfall and ground water into the collection system. The project
replaces approximately 15,437 linear feet (which represents 1% of the Cit's Wastewater Collec-
tion system) for various streets in the City, including sections in the Midtown/Midtown West and
Palo Verde neighborhoods and a portion of the University Avenue in the Crescent Park neigh-
borhood. The project will be comprised of laterals identified in video inspection work or through
maintenance records as deficient and in need of replacement. Priority will be given to areas
identified by Public Works as targeted work zones ensuring infrastructure coordination among
different City departments.
Justification
The 2004 Collection System Master Plan (Master Plan Study) update indicated certain facilities
are in need of enlargement to handle growth and peak flows. The mains selected for replace-
ment and/or rehabilitation are determined by the recommendations for the Master Plan Study;
research and analysis of sewer main maintenance records; cleaning and videotaping of sanitary
sewer mains; condition assessment; real time flow monitoring of existing sewers; and hydraulic
computer modeling.
Fund: Wastewater Collection - Operating
Category: System Improvements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Summer 2020
Initial Project Completion: Winter 2022
Revised Project Start: Summer 2022
Revised Project Completion: Winter 2024
Project Number: WC-20000
A bursing head attached with 8' HDPE, for a sewer main replacement project by pipe bursting method
WASTEWATER COLLECTION FUND
WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 93
Supplemental Information
Linear footage and locations are subject to change, please refer to the City of Palo Alto Utilities
webpage to confirm project details.
Significant Changes
Due to delays in SSR 24, 25, 26, and 27, the construction for this project is postponed to FY
2023.
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Wastewater
Collection Fund 0 0 0 0 0 0 0 358,249 358,249 3,582,495 3,940,744
Total 0 0 0 0 0 0 0 358,249 358,249 3,582,495 3,940,744
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 0 0 0 0 0 0 0 0 3,582,495 3,582,495
Design 0 0 0 0 0 0 0 358,249 358,249 0 358,249
Total 0 0 0 0 0 0 0 358,249 358,249 3,582,495 3,940,744
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-18
Relationship to Comprehensive
Plan
Secondary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-25
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
WASTEWATER COLLECTION FUND
94 WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Wastewater General Equipment and Tools
Wastewater General Equipment and
Tools
Description
This funding allows for the acquisition of new fusion equipment and other associated tools. This
equipment is used to fuse together pipe joints in the City's wastewater collection system.
Justification
As the equipment ages, the quality of the fusion joints begins to decline, and the operators
must spend more time scraping, aligning, and fusing construction joints. In order to maintain
high quality standards for the installation of City's wastewater collection mains, along with the
associated service standards and worker safety and productivity measures, equipment and
tools require continuous upgrades.
Significant Changes
2015-2019 CIP: Project was retitled from "Wastewater Fusion and General Equipment/Tools".
Fund: Wastewater Collection - Operating
Category: System Improvements
Project Location: Municipal Service Center
Managing Department: Utilities
Initial Project Start: Recurring
Initial Project Completion: Recurring
Project Number: WC-13002
Equipment used to install fuse HDPE pipe
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Wastewater
Collection Fund N/A 50,000 50,000 50,000 50,000 50,000 50,000 50,000 250,000 0 N/A
Total N/A 50,000 50,000 50,000 50,000 50,000 50,000 50,000 250,000 0 N/A
WASTEWATER COLLECTION FUND
WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 95
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction N/A 50,000 50,000 50,000 50,000 50,000 50,000 50,000 250,000 0 N/A
Total N/A 50,000 50,000 50,000 50,000 50,000 50,000 50,000 250,000 0 N/A
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-14
Program: N-18
Relationship to Comprehensive
Plan
Secondary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-20
Program: N-25
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15301.
WASTEWATER COLLECTION FUND
96 WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Wastewater System Improvements
Wastewater System Improvements
Description
This project provides funding as needed to improve the Wastewater Collection System. Typical
activities include: increasing system capacity for growth, flow monitoring, hydraulic modeling
and system analysis, load simulations, asset management analysis and assessment, system
inflow/infiltration analysis, and sanitary sewer overflow monitoring and reduction.
Justification
Wastewater Collection System reliability and adequate capacity are critical to providing a high
level of service to customers. Mainline sewer backups and overflows into homes and businesses
are costly and a health risk. Reducing the losses associated with these backup claims requires a
continuous evaluation of system needs and making improvements to maintain a high level of
service.
Fund: Wastewater Collection - Operating
Category: System Improvements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Recurring
Initial Project Completion: Recurring
Project Number: WC-15002
Trenching for installation of HDPE sewer main by directional drilling method
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Wastewater
Collection Fund N/A 426,945 292,567 246,000 253,000 260,000 269,000 276,875 1,304,875 0 N/A
Total N/A 426,945 292,567 246,000 253,000 260,000 269,000 276,875 1,304,875 0 N/A
WASTEWATER COLLECTION FUND
WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 97
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction N/A 426,945 292,567 246,000 253,000 260,000 269,000 276,875 1,304,875 0 N/A
Design N/A 0 0 0 0 0 0 0 0 0 N/A
Wastewater
Collection Fund N/A 0 0 0 0 0 0 0 0 0 N/A
Total N/A 426,945 292,567 246,000 253,000 260,000 269,000 276,875 1,304,875 0 N/A
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-14
Program: N-18
Relationship to Comprehensive
Plan
Secondary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-20
Program: N-25
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
WASTEWATER COLLECTION FUND
98 WASTEWATER COLLECTION FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 69
WATER FUND
WATER FUND
70 WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
WATER FUND Overview
The City of Palo Alto is the only municipality in California that operates a full suite of City-
owned utility services. The municipal water distribution system began operation in 1896 and
continues to provide safe, reliable, and cost effective water service to residents and customers
of Palo Alto. For the 2018-2022 Capital Improvement Program (CIP), approximately $42.81 mil-
lion is programmed, with $4.95 million allocated in Fiscal Year 2018. Overall, a total of 15 proj-
ects are programmed for the 5-year CIP. Major projects funded in the 2018-2022 CIP include
Water Main Replacements (cumulative total of $27.34 million), Water System Customer Connec-
tions ($3.77 million), Water Meters ($2.66 million) and Water, Gas, and Wastewater Utility GIS
Data ($2.26 million). The Budget for the Water Fund is broken into three separate categories:
Customer Connections, System Improvements, and Water Main Replacements.
Customer
Connections
As customers continually change
their water needs due to equip-
ment additions, new construc-
tion, building expansions,
building remodels, teardowns
and rebuilds, and new building
occupancy types, the water sys-
tem must evolve to meet these
needs. Projects in this category
include work required to meet
the needs of customers who have applied for new or upgraded water service. The Water Fund
pays for a portion of this project, while remaining costs are supported by reimbursements from
customers for project work performed by the City.
Recent Accomplishments
In Fiscal Year 2016 the Utilities Water Utility completed over 180 customer service projects
with a total cost of $1.94 million.
Infrastructure Inventory
CLASSIFICATION QUANTITY
235.58 miles
1 active standby and 7 emergency standby
4 steel and 3 reinforced concrete
0
6,000,000
12,000,000
18,000,000
24,000,000
FY 2014
Actuals
FY 2016
Actuals
FY 2018
Proposed
FY 2020
Projected
FY 2022
Projected
Water Fund Capital
Expenditures
WATER FUND
WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 71
2018-2022 Capital Improvement Program
Recurring Projects
The Water System Customer Connections project is the only project within this category. Over
the course of the 2018-2022 CIP, $3.77 million is programmed, with $0.71 million allocated in Fis-
cal Year 2018.
Non-Recurring Projects
There are no non-recurring projects in this category.
System Improvements
To ensure reliable water services for the City of Palo Alto residents and customers, infrastruc-
ture must be replaced upon reaching the end of its expected life. The System Improvements
category includes 6 projects during the 2018-2022 CIP at a total cost of $11.69 million, with
$3.65 million allocated in Fiscal Year 2018.
Recent Accomplishments
Completed the water distribution system seismic evaluation and condition assessment
master study to determine the reliability of water system and seismic stability of water
pipelines in the Foothills. Pipeline improvements recommended from this study will be
included in future capital improvement projects.
Completed 90% construction of concrete water tank rehabilitation work at Boronda
Reservoir.
2018-2022 Capital Improvement Program
Recurring Projects
A total of $9.97 million is programmed for System Improvement recurring projects during the
2018-2022 CIP, with $1.92 million allocated in Fiscal Year 2018. Recurring projects in this cate-
gory include the following:
Water Distribution System Improvements (Fiscal Year 2018: $0.25 million; 5-Year CIP: $1.31
million)
Water Fusion and General Equipment/Tools (Fiscal Year 2018: $0.50 million; 5-Year CIP:
$0.25 million)
Water Meters (Fiscal Year 2018: $0.57 million; 5-Year CIP: $2.67 million)
Water Service Hydrant Replacement (Fiscal Year 2018: $0.41 million; 5-Year CIP: $2.19
million)
Water System Supply Improvements (Fiscal Year 2018: $0.25 million; 5-Year CIP: $1.31
million)
Water, Gas, Wastewater Utility GIS Data (Fiscal Year 2018: $0.40 million; 5-Year CIP: $2.26
million)
WATER FUND
72 WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Non-Recurring Projects
A total of $1.72 million is programmed for non-recurring projects during the 2018-2022 CIP, with
the entire $1.72 million allocated in Fiscal Year 2018. Non-recurring projects in this category
include the following:
Seismic Water System Upgrades (Fiscal Year 2018: $1.13 million; 5-Year CIP: $1.13 million)
Water Recycling Facilities (Fiscal Year 2018: $0.40 million; 5-Year CIP: $0.40 million)
Water Regulation System Improvements (Fiscal Year 2018: $0.20 million; 5-Year CIP: $0.20
million)
Water Main Replacements
The Water Main Replacements category accounts for the replacement of inadequately-sized
and structurally deficient water mains. In the next five years, it is estimated that approximately
54,700 linear feet of water mains will be replaced.
Recent Accomplishments
Completed the design and construction of water main replacement project WMR 26 to
replace approximately 10,600 LF water main pipelines, 170 service pipelines, and 40 fire
hydrants.
2018-2022 Capital Improvement Program
Recurring Projects
There are no recurring projects in this category.
Non-Recurring Projects
The 2018-2022 CIP includes $27.34 million in funding for five non-recurring projects within this
category, with $0.60 million approved for Fiscal Year 2018. The Utilities Department coordi-
nates with the Public Works Department’s street maintenance projects to minimize damage to
the City’s pavement and maximize cost efficiencies.
Summary of Capital Activity
WATER FUND
Project
Number Project Title
FY 2016
Actuals
FY 2017
Estimate
FY 2018
Proposed FY 2019 FY 2020 FY 2021 FY 2022
5-Year
Total
Source of Funds
Transfer from Other Funds
Gas Fund
WS-02014 Water Gas Wastewater GIS Data 116,666 134,209 147,630 152,059 156,621 161,320 751,839
Total Gas Fund Transfers 0 116,666 134,209 147,630 152,059 156,621 161,320 751,839
WATER FUND
WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 73
Wastewater Collection Fund
WS-02014 Water Gas Wastewater GIS Data 0 116,666 134,209 147,630 152,059 156,621 161,320 751,839
Total Wastewater Collection Fund 0 116,666 134,209 147,630 152,059 156,621 161,320 751,839
Total Transfer from Other Funds 0 233,332 268,418 295,260 304,118 313,242 322,640 1,503,678
Other Revenues
WS-07001 Water Recycling Facilities 111,014 0 0 0 0 0 0 0
WS-08002 Emergency Water Supply Project 278,618 0 0 0 0 0 0 0
WS-80014 Water Service Hydrant Replacement 6,830 0 0 0 0 0 0 0
WS-80013 Water System, Customer Connections 1,544,597 900,000 902,280 929,348 957,228 985,946 1,015,524 4,790,326
Other Revenue Total 1,941,059 900,000 902,280 929,348 957,228 985,946 1,015,524 4,790,326
Total Sources 1,941,059 1,133,332 1,170,698 1,224,608 1,261,346 1,299,188 1,338,164 6,294,004
Use of Funds
Customer Connections
WS-80013 Water System, Customer Connections 816,983 708,000 710,700 732,021 753,981 776,601 799,899 3,773,202
Customer Connections Total 816,983 708,000 710,700 732,021 753,981 776,601 799,899 3,773,202
System Improvements
WS-13004 Asset Management Mobile Deployment 641 0 0 0 0 0 0 0
WS-08002 Emergency Water Supply Project 124,730 0 0 0 0 0 0 0
WS-09000 Seismic Water System Upgrades 643,014 3,004,300 1,130,877 0 0 0 0 1,130,877
WS-11003 Water Distribution System Improvements 79,700 200,000 247,000 254,000 261,620 269,469 277,553 1,309,642
WS-13002 Water Fusion and General Equipment/Tools 9,315 10,000 50,000 50,000 50,000 50,000 50,000 250,000
WS-02014 Water, Gas, Wastewater Utility GIS Data 206,770 350,000 402,628 442,890 456,177 469,862 483,958 2,255,515
WS-80015 Water Meters 315,258 100,000 565,000 500,000 515,000 530,450 546,364 2,656,814
WS-07001 Water Recycling Facilities 48,067 0 395,649 0 0 0 0 395,649
WS-07000 Water Regulation System Improvements 953,585 760,825 196,054 0 0 0 0 196,054
WS-08001 Water Reservior Coating Improvements 75,285 0 0 0 0 0 0 0
WS-80014 Water Service Hydrant Replacement 355,048 400,000 412,000 424,360 437,091 450,204 463,710 2,187,365
WS-15004 Water System Master Plan 106,005 0 0 0 0 0 0 0
WS-11004 Water System Supply Improvements 62,382 334,694 247,000 254,000 261,620 269,469 277,553 1,309,642
System Improvements Total 2,979,799 5,159,819 3,646,208 1,925,250 1,981,508 2,039,454 2,099,138 11,691,558
Water Main Replacements
WS-11000 Water Main Replacement - Project 25 4,555,303 0 0 0 0 0 0 0
WS-12001 Water Main Replacement - Project 26 68,497 0 0 0 0 0 0 0
Project
Number Project Title
FY 2016
Actuals
FY 2017
Estimate
FY 2018
Proposed FY 2019 FY 2020 FY 2021 FY 2022
5-Year
Total
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74 WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
WS-13001 Water Main Replacement - Project 27 0 50,000 595,000 6,216,841 0 0 0 6,811,841
WS-14001 Water Main Replacement - Project 28 0 0 0 585,107 5,851,070 0 0 6,436,177
WS-15002 Water Main Replacement - Project 29 0 0 0 0 602,660 6,026,602 0 6,629,262
WS-16001 Water Main Replacement - Project 30 0 0 0 0 0 620,740 6,207,400 6,828,140
WS-19001 Water Main Replacement - Project 31 0 0 0 0 0 0 639,362 639,362
Water Main Replacements Total 4,623,800 50,000 595,000 6,801,948 6,453,730 6,647,342 6,846,762 27,344,782
Total Uses 8,420,582 5,917,819 4,951,908 9,459,219 9,189,219 9,463,397 9,745,799 42,809,542
Project
Number Project Title
FY 2016
Actuals
FY 2017
Estimate
FY 2018
Proposed FY 2019 FY 2020 FY 2021 FY 2022
5-Year
Total
WATER FUND
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Insert Map Here
WATER FUND
76 WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
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Customer Connections
WATER FUND
78 WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Water System Customer Connections
Water System Customer Connections
Description
This project allows for improvements that include new main extensions, valves, domestic ser-
vices, meters on upgraded services, backflow devices, fire services, and fire hydrants.
Justification
System extensions are required to provide service to new customers and to serve existing cus-
tomers requesting expanded service.
Significant Changes
This project was previously titled "Water System Extensions". As part of the Fiscal Year 2015
budget, this project has been re-titled to "Water System, Customer Connections" to more accu-
rately reflect the work done with this funding.
Fund: Water Fund - Operating
Category: Customer Connections
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Recurring
Initial Project Completion: Recurring
Project Number: WS-80013
Installation of 8" HDPE pipe by directional drilling method
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Other N/A 690,000 900,000 902,280 929,348 957,228 985,946 1,015,524 4,790,326 0 N/A
Water Fund N/A 18,736 (192,000)(191,580)(197,327)(203,247)(209,345)(215,625)(1,017,124)0 N/A
Total N/A 708,736 708,000 710,700 732,021 753,981 776,601 799,899 3,773,202 0 N/A
WATER FUND
WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 79
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
N/A 0 0 0 0 0 0 0 0 0 N/A
Construction N/A 708,736 708,000 710,700 732,021 753,981 776,601 799,899 3,773,202 0 N/A
Design N/A 0 0 0 0 0 0 0 0 0 N/A
Total N/A 708,736 708,000 710,700 732,021 753,981 776,601 799,899 3,773,202 0 N/A
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-19
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
WATER FUND
80 WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
WATER FUND
WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 81
System Improvements
WATER FUND
82 WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Seismic Water System Upgrades
Seismic Water System Upgrades
Description
This project will provide structural reinforcement for the Corte Madera, Park, Boronda, and Dahl
reservoirs to improve earthquake resistance in compliance with the American Society of Civil
Engineers (ASCE 7) seismic codes. Work at the reservoir sites will also include the installation
of: seismic shut off valves, flexible joints at the inlet/outlet piping connections, backup power
supplies, the relocation of overflow pipes, and reinforcement of interior pipe columns.
Justification
Palo Alto's water tanks have no protection from water loss in a seismic event. If an earthquake
causes a significant water leak, various impacts such as loss of water for fire fighting purposes,
loss of water storage for drinking, property damage from flooding, environmental damages, and
possible mudslides causing significant property damage could occur. The seismic protection
systems will preserve potable water after a seismic event.
Fund: Water Fund - Operating
Category: System Improvements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Spring 2014
Initial Project Completion: Winter 2017
Revised Project Start:
Revised Project Completion:
Project Number: WS-09000
Seismic Upgrade, Boronda Reservoir, December 2014
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Water Fund 1,357,152 4,135,177 3,004,300 1,130,877 0 0 0 0 1,130,877 0 5,492,329
Total 1,357,152 4,135,177 3,004,300 1,130,877 0 0 0 0 1,130,877 0 5,492,329
WATER FUND
WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 83
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 1,085,720 4,135,177 3,004,300 1,130,877 0 0 0 0 1,130,877 0 5,220,897
Design 271,426 0 0 0 0 0 0 0 0 0 271,426
Total 1,357,146 4,135,177 3,004,300 1,130,877 0 0 0 0 1,130,877 0 5,492,323
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-19
Relationship to Comprehensive
Plan
Secondary Connection
Section: Local Landuse and Growth
Management
Goal: L-1
Potential Board/Commission
Review:
Planning and Transportation
Commission
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
WATER FUND
84 WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Water Distribution System Improvements
Water Distribution System
Improvements
Description
This project provides funds as needed to improve water distribution system deliverability and
reliability. Typical activities include: installing restraining joints at critical pipelines and bridge
crossings, increasing the size of inadequate facilities, system leakage surveys, network model-
ing, and fire flow studies or other system improvements as required.
Justification
Water distribution system reliability and adequate capacity are critical to providing a high level
of service to customers in Palo Alto. Continuous evaluation of system needs and making
required improvements is necessary to maintain adequate quantities of quality water, meeting
local, state, and federal safe drinking water standards.
Fund: Water Fund - Operating
Category: System Improvements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Recurring
Initial Project Completion: Recurring
Project Number: WS-11003
Installation of a new fire hydrant with FlowGuard fire hydrant check valve
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Water Fund N/A 869,905 200,000 247,000 254,000 261,620 269,469 277,553 1,309,642 0 N/A
Total N/A 869,905 200,000 247,000 254,000 261,620 269,469 277,553 1,309,642 0 N/A
WATER FUND
WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 85
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction N/A 869,905 200,000 247,000 254,000 261,620 269,469 277,553 1,309,642 0 N/A
Design N/A 0 0 0 0 0 0 0 0 0 N/A
Total N/A 869,905 200,000 247,000 254,000 261,620 269,469 277,553 1,309,642 0 N/A
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-19
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
WATER FUND
86 WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Water General Equipment/Tools
Water General Equipment/Tools
Description
This funding allows for the acquisition of new equipment and tools, the replacement of existing
fusion equipment, and other associated tools, annually. The fusion equipment is used to fuse
together pipe joints in the City's water distribution system.
Justification
As the equipment ages, the quality of the fusion joints begins to decline, and the operators
must spend more time scraping, aligning, and fusing construction joints. In order to maintain
high quality standards for the installation of the City's water distribution mains, along with the
associated service standards and worker safety and productivity measures, equipment and
tools are required to be upgraded on an annual basis.
Significant Changes
2015-2019 CIP: Project was retitled from "Water Fusion and General Equipment/Tools".
Fund: Water Fund - Operating
Category: System Improvements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Recurring
Initial Project Completion: Recurring
Project Number: WS-13002
16" HDPE pipe being fused prior to installation
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Water Fund N/A 70,685 10,000 50,000 50,000 50,000 50,000 50,000 250,000 0 N/A
Total N/A 70,685 10,000 50,000 50,000 50,000 50,000 50,000 250,000 0 N/A
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WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 87
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction N/A 0 10,000 50,000 50,000 50,000 50,000 50,000 250,000 0 N/A
Design N/A 0 0 0 0 0 0 0 0 0 N/A
Other N/A 70,685 0 0 0 0 0 0 0 0 N/A
Total N/A 70,685 10,000 50,000 50,000 50,000 50,000 50,000 250,000 0 N/A
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-18
Relationship to Comprehensive
Plan
Secondary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-25
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
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88 WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Water Meters
Water Meters
Description
This funding allows for the purchase of meters for new customers, upgrading meters for current
customers, installing meter bypasses, and replacing obsolete meters that are no longer repair-
able. This funding also allows for annual testing and calibration of select meters each year.
Justification
This project will maintain meter accuracy, reliability, and stock meter equipment and replace-
ment parts. Meter replacements enhance information on system water volume; align the Utility's
ten-year meter testing and replacement cycle in accordance with industry-standard best man-
agement practices; and provide accurate data for the Water Utility billing system.
Fund: Water Fund - Operating
Category: System Improvements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Recurring
Initial Project Completion: Recurring
Project Number: WS-80015
5/8" Badger water meter
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Water Fund N/A 817,092 100,000 565,000 500,000 515,000 530,450 546,364 2,656,814 0 N/A
Total N/A 817,092 100,000 565,000 500,000 515,000 530,450 546,364 2,656,814 0 N/A
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction N/A 817,092 100,000 565,000 500,000 515,000 530,450 546,364 2,656,814 0 N/A
Total N/A 817,092 100,000 565,000 500,000 515,000 530,450 546,364 2,656,814 0 N/A
WATER FUND
WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 89
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-19
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
WATER FUND
90 WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Water Recycling Facilities
Water Recycling Facilities
Description
This funding allows the City of Palo Alto to fund a consultant to prepare a business plan, pre-
pare a preliminary design, and secure funding options for an expansion of the existing recycled
water delivery system in the City. The pipeline will serve primarily the Stanford Research Park
and provide an alternative supply source of 1,000 acre feet or 435,600 CCF per year. For con-
text this represents roughly 10% of Palo Alto’s total water consumption in 2015. A key part of the
proposed business plan will be evaluating potential alternative uses of the new pipeline to serve
future needs in Direct Potable Reuse, and Indirect Potable Reuse. This new more detailed plan
follows the successful completion and certification of the project’s environmental impact report
in September 2015. The next phase of the project is to evaluate the results of this business plan
and other deliverables, and pending a satisfactory assessment, move forward with the full
design work of the proposed expansion of the recycled water delivery system.
Justification
Palo Alto is aggressively pursuing all options to meet future water supply needs. Recycled
water provides a stable, drought-proof supply of water that replaces the need to use Hetch Het-
chy potable supplies for irrigation purposes and other non-potable uses. In anticipation of
extended periods of drought and mandatory potable water reduction imposed by the State, the
City is evaluating a wide range of alternative water supplies. Recycled water and groundwater
are two such resources that are interrelated in their development and potential. Therefore, the
City is taking an integrated approach to evaluating non-potable recycled water, shallow aquifer
groundwater, deep aquifer groundwater, and Direct Potable Reuse and Indirect Potable Reuse.
Fund: Water Fund - Operating
Category: System Improvements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Spring 2011
Initial Project Completion: Spring 2015
Revised Project Start:
Revised Project Completion: Fall 2017
Project Number: WS-07001
Recycled water piping
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WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 91
The end product will be a recycled water strategic plan for the most flexible and robust use of
these resources.
Significant Changes
While staff has addressed many issues regarding a future recycled water project including the
completion and certification by the Council of the projectís environmental impact report (EIR),
the replacement of high quality potable water with recycled water remains a concern for the
landscape community among others. Completion of the environmental document was essential
for securing Federal or State grant or loan funding for the construction of the project, and now
the City of Palo Alto needs to reassess a more exhaustive number of potential end uses, assess
customer demand, prepare a business plan, finish a preliminary design, and secure funding.
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Revenue from the
Federal Government 111,013 0 0 0 0 0 0 0 0 0 111,013
Water Fund 346,037 395,649 0 395,649 0 0 0 0 395,649 0 741,686
Total 457,050 395,649 0 395,649 0 0 0 0 395,649 0 852,699
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 365,639 395,649 0 395,649 0 0 0 0 395,649 0 761,288
Design 91,409 0 0 0 0 0 0 0 0 0 91,409
Total 457,048 395,649 0 395,649 0 0 0 0 395,649 0 852,697
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-20
Program: N-26
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15301.
WATER FUND
92 WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Water Regulation Station Improvements
Water Regulation Station
Improvements
Description
This project will improve fourteen underground vaults and two above-ground water regulation
facility locations. The improvements include: supervisory control and data acquisition (SCADA)
chloramine monitors, pipe coating, wall sealing/painting, vault door replacement, lighting, valve
replacement, and electrical upgrades.
Justification
These critical components in the water system require various improvements to increase reli-
ability, safety and to prolong their service life. The San Francisco Public Utility Commission
(SFPUC) turnouts are the main source of water supply to Palo Alto residents and need mainte-
nance improvements. The pressure regulating stations protect pipelines from over-pressuriza-
tion, which prevents water main breaks and customer outages. The electrical systems for these
facilities need to be improved for staff safety.
Supplemental Information
The work locations of this project include Page Mill, Arastradero, California, Charleston, Mayfield,
Hillview, Hewlett, Foothill 6, Foothill 7, Corte Madera, Boronda, Park, Dahl, Montebello vaults,
Dahl booster and Lytton pump station.
Fund: Water Fund - Operating
Category: System Improvements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Fall 2006
Initial Project Completion: Summer 2008
Revised Project Start: Summer 2014
Revised Project Completion: Winter 2017
Project Number: WS-07000
Siesmic Upgrade, Arastradero Turnout, June 2010
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WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 93
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Water Fund 994,000 956,889 760,825 196,054 0 0 0 0 196,054 0 1,950,879
Total 994,000 956,889 760,825 196,054 0 0 0 0 196,054 0 1,950,879
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 795,199 956,889 760,825 196,054 0 0 0 0 196,054 0 1,752,078
Design 198,798 0 0 0 0 0 0 0 0 0 198,798
Total 993,997 956,889 760,825 196,054 0 0 0 0 196,054 0 1,950,876
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-20
Program: N-24
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15301.
WATER FUND
94 WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Water Service Hydrant Replacement
Water Service Hydrant Replacement
Description
This project replaces system control valves, deteriorated galvanized service lines, lead goose-
necks, and fire hydrant valves and assemblies as a result of Fire Department flow testing;
upgrades fire hydrants in main replacement project areas; and replaces existing undersized or
deteriorated copper water services. Upgrading hydrants and system control valves is consistent
with fire protection policies.
Justification
In order to maintain a high water quality standard for Palo Alto's water supplies, it is necessary
to replace old, lead, galvanized, and corroded copper water service lines when found.
Fund: Water Fund - Operating
Category: System Improvements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Recurring
Initial Project Completion: Recurring
Project Number: WS-80014
Newly installed fire hydrant service line and assembly on Greenwood Avenue
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Other N/A 0 0 0 0 0 0 0 0 0 N/A
Water Fund N/A 400,000 400,000 412,000 424,360 437,091 450,204 463,710 2,187,365 0 N/A
Total N/A 400,000 400,000 412,000 424,360 437,091 450,204 463,710 2,187,365 0 N/A
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction N/A 400,000 400,000 412,000 424,360 437,091 450,204 463,710 2,187,365 0 N/A
Design N/A 0 0 0 0 0 0 0 0 0 N/A
Total N/A 400,000 400,000 412,000 424,360 437,091 450,204 463,710 2,187,365 0 N/A
WATER FUND
WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 95
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-19
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
WATER FUND
96 WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Water System Supply Improvements
Water System Supply Improvements
Description
This project provides funding, as needed, to improve the City’s water distribution system. This
system includes: connection facilities between the City’s and the San Francisco Public Utility
Commission’s pipelines, emergency water wells within the City, pumping stations, water reser-
voirs, and pipelines.
Justification
It is critical that the City has an adequate supply of water that meets federal and state drinking
water requirements. To meet these objectives, the City must continually evaluate the system
and make improvements when they are required.
Supplemental Information
Typical activities performed under this project include: piping modifications, equipment
replacements associated with water delivery, Supervisory Control software upgrades, system
modifications for water system quality compliance, implementation of an asset management
system, conditional assessment of the reliability of transmission mains, and security system
installations.
Fund: Water Fund - Operating
Category: System Improvements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Recurring
Initial Project Completion: Recurring
Project Number: WS-11004
Installation of 8" HDPE pipe and valve between two main connection points on El Camino Real at El Camino Way
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Water Fund N/A 334,694 334,694 247,000 254,000 261,620 269,469 277,553 1,309,642 0 N/A
Total N/A 334,694 334,694 247,000 254,000 261,620 269,469 277,553 1,309,642 0 N/A
WATER FUND
WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 97
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction N/A 334,694 334,694 247,000 254,000 261,620 269,469 277,553 1,309,642 0 N/A
Design N/A 0 0 0 0 0 0 0 0 0 N/A
Total N/A 334,694 334,694 247,000 254,000 261,620 269,469 277,553 1,309,642 0 N/A
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-19
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
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98 WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Water, Gas, Wastewater Utility GIS Data
Water, Gas, Wastewater Utility GIS
Data
Description
This funding covers the annual maintenance and support contract to improve the ability of Util-
ities Department staff to use the Geographic Information System (GIS). As with other GIS activ-
ities, continuing the completion of data-related tasks is the primary emphasis. Because field
personnel still need accurate paper maps in the field, standard map books will be produced that
meet their specific needs. Funding is also included to improve the GIS user interface to better
serve the unique requirements of Utility Department users.
Justification
The GIS program is used for interfacing with modeling software to perform engineering analysis
and master planning; developing and prioritizing cost-effective capital improvement designs;
and asset management of the City's utility enterprise system; thereby enhancing the level of
service to utility customers.
Fund: Water Fund - Operating
Category: System Improvements
Project Location: Software maintenance & update
Managing Department: Utilities
Initial Project Start: Recurring
Initial Project Completion: Recurring
Project Number: WS-02014
Staff collecting data for GIS system
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WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 99
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Transfer from Gas
Fund N/A 122,009 116,666 134,209 147,630 152,059 156,621 161,320 751,839 0 N/A
Transfer from
Wastewater
Treatment Fund
N/A 122,009 116,666 134,209 147,630 152,059 156,621 161,320 751,839 0 N/A
Water Fund N/A 204,824 116,668 134,210 147,630 152,059 156,620 161,318 751,837 0 N/A
Total N/A 448,842 350,000 402,628 442,890 456,177 469,862 483,958 2,255,515 0 N/A
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction N/A 448,842 350,000 402,628 442,890 456,177 469,862 483,958 2,255,515 0 N/A
Design N/A 0 0 0 0 0 0 0 0 0 N/A
Total N/A 448,842 350,000 402,628 442,890 456,177 469,862 483,958 2,255,515 0 N/A
Relationship to Comprehensive
Plan
Primary Connection
Element: Transportation
Section: Reducing Auto Use
Goal: T-1
Policy: T-2
Program: T-10
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15301.
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100 WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
WATER FUND
WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 101
Water Main Replacements
WATER FUND
102 WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Water Main Replacement - Project 27
Water Main Replacement - Project 27
Description
This project will fund the design and replacement of structurally deficient water mains and
appurtenances in Fiscal Years 2018 and 2019. Mains are selected by researching the mainte-
nance history of the system and identifying those that are undersized, corroded, and subject to
breaks. The project scope includes approximately 9,735 linear feet (which represents 0.8% of
the City's Water distribution system) of mains and services on various streets within the City,
including areas in Oak Creek and University Avenue neighborhoods.
Justification
Some mains are inadequate in size to supply required flows and pressures for fire protection,
and others are subject to recurring breaks.
Supplemental Information
Each year the projects are re-evaluated and the highest priority is given to the most deterio-
rated portions of the system. Linear footage and locations are subject to change, please refer to
the City of Palo Alto Utilities webpage to confirm project details.
Significant Changes
The construction is postponed to start in the later part of FY 2019 due to delays of WMR 26.
Project design and construction funding will be reappropriated to FY 2018 and FY 2019.
Fund: Water Fund - Operating
Category: Water Main Replacements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Summer 2016
Initial Project Completion: Winter 2018
Revised Project Start: Summer 2018
Revised Project Completion: Winter 2020
Project Number: WS-13001
Installed 16" HDPE pipe waiting to be backfilled
WATER FUND
WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 103
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Water Fund 0 6,248,716 50,000 595,000 6,216,841 0 0 0 6,811,841 0 6,861,841
Total 0 6,248,716 50,000 595,000 6,216,841 0 0 0 6,811,841 0 6,861,841
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 5,680,651 0 0 6,216,841 0 0 0 6,216,841 0 6,216,841
Design 0 568,065 50,000 595,000 0 0 0 0 595,000 0 645,000
Total 0 6,248,716 50,000 595,000 6,216,841 0 0 0 6,811,841 0 6,861,841
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-20
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
WATER FUND
104 WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Water Main Replacement - Project 28
Water Main Replacement - Project 28
Description
This project will fund the design and replacement of structurally deficient water mains and
appurtenances in Fiscal Years 2018 and 2020. Mains are selected by researching the mainte-
nance history of the system and identifying those that are undersized, corroded, and subject to
breaks. The project scope includes approximately 13,352 linear feet (which represents 1.2% of
the City's Water distribution system) of mains and services on various streets within the City,
including areas in Duveneck/St. Francis, Barron Park and Charleston Meadows neighborhoods.
Justification
Some mains are inadequate in size to supply required flows and pressures for fire protection,
and others are subject to recurring breaks.
Supplemental Information
Each year the projects are re-evaluated and the highest priority is given to the most deterio-
rated portions of the system. Linear footage and locations are subject to change, please refer to
the City of Palo Alto Utilities webpage to confirm project details.
Significant Changes
Due to delays of WMR 26 and WMR 27, project design and construction funding will be reap-
propriated to FY 2019 and FY 2020.
Fund: Water Fund - Operating
Category: Water Main Replacements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Summer 2017
Initial Project Completion: Winter 2019
Revised Project Start: Summer 2019
Revised Project Completion: Winter 2021
Project Number: WS-14001
New HDPE main connecting to side street with new valve
WATER FUND
WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 105
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Water Fund 0 585,107 0 0 585,107 5,851,070 0 0 6,436,177 0 6,436,177
Total 0 585,107 0 0 585,107 5,851,070 0 0 6,436,177 0 6,436,177
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 0 0 0 0 5,851,070 0 0 5,851,070 0 5,851,070
Design 0 585,107 0 0 585,107 0 0 0 585,107 0 585,107
Total 0 585,107 0 0 585,107 5,851,070 0 0 6,436,177 0 6,436,177
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-20
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
WATER FUND
106 WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Water Main Replacement - Project 29
Water Main Replacement - Project 29
Description
This project will fund the design and replacement of structurally deficient water mains and
appurtenances in Fiscal Years 2020 and 2021. Mains are selected by researching the mainte-
nance history of the system and identifying those that are undersized, corroded, and subject to
breaks. The project scope includes approximately 11,723 linear feet (which represents 0.9% of
the City's Water distribution system) of mains and services on various streets within the City,
including areas in Evergreen Park and Ventura neighborhoods.
Justification
Some mains are inadequate in size to supply required flows and pressures for fire protection,
and others are subject to recurring breaks.
Supplemental Information
Each year the projects are re-evaluated and the highest priority is given to the most deterio-
rated portions of the system. Linear footage and locations are subject to change, please refer to
the City of Palo Alto Utilities webpage to confirm project details.
Significant Changes
Due to delays of WMR 26, WMR 27 and WMR 28, the project design and construction funding
will be postponed to FY 2020 and FY 2021.
Fund: Water Fund - Operating
Category: Water Main Replacements
Project Location: Various locations
Managing Department: Utilities
Initial Project Start: Summer 2018
Initial Project Completion: Winter 2020
Revised Project Start: Summer 2020
Revised Project Completion: Winter 2022
Project Number: WS-15002
16" HDPE pipe ready to be installed by open trench method
WATER FUND
WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 107
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Water Fund 0 0 0 0 0 602,660 6,026,602 0 6,629,262 0 6,629,262
Total 0 0 0 0 0 602,660 6,026,602 0 6,629,262 0 6,629,262
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 0 0 0 0 0 6,026,602 0 6,026,602 0 6,026,602
Design 0 0 0 0 0 602,660 0 0 602,660 0 602,660
Total 0 0 0 0 0 602,660 6,026,602 0 6,629,262 0 6,629,262
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-18
Relationship to Comprehensive
Plan
Secondary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-25
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
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108 WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Water Main Replacement - Project 30
Water Main Replacement - Project 30
Description
This project will fund the design and replacement of structurally deficient water mains and
appurtenances in Fiscal Years 2021 and 2022. Mains are selected by researching the mainte-
nance history of the system and identifying those that are undersized, corroded, and subject to
breaks. The project scope includes approximately 14,494 linear feet (which represents 1.0% of
the City's Water distribution system) of mains and services on various streets within the City,
including areas in Midtown/Midtown West and Palo Verde and Greenmeadow neighborhoods.
Justification
Some mains are inadequate in size to supply required flows and pressures for fire protection,
and others are subject to recurring breaks.
Supplemental Information
Each year the projects are re-evaluated and the highest priority is given to the most deterio-
rated portions of the system. Linear footage and locations are subject to change, please refer to
the City of Palo Alto Utilities webpage to confirm project details.
Significant Changes
Due to delays of WMR 26 - 29, project design and construction is postponed to FY 2021 and FY
2022.
Fund: Water Fund - Operating
Category: Water Main Replacements
Project Location:
Managing Department: Utilities
Initial Project Start: Summer 2019
Initial Project Completion: Winter 2021
Revised Project Start: Summer 2021
Revised Project Completion: Winter 2022
Project Number: WS-16001
HDPE pipe waiting to be fused
WATER FUND
WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 109
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Water Fund 0 0 0 0 0 0 620,740 6,207,400 6,828,140 0 6,828,140
Total 0 0 0 0 0 0 620,740 6,207,400 6,828,140 0 6,828,140
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 0 0 0 0 0 0 6,207,400 6,207,400 0 6,207,400
Design 0 0 0 0 0 0 620,740 0 620,740 0 620,740
Total 0 0 0 0 0 0 620,740 6,207,400 6,828,140 0 6,828,140
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-20
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
WATER FUND
110 WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET
Water Main Replacement - Project 31
Water Main Replacement - Project 31
Description
Funding for this project is a placeholder that will allow for the design and replacement of struc-
turally deficient water mains and appurtenances in Fiscal Years 2022 and 2023. Mains are
selected by researching the maintenance history of the system and identifying those that are
undersized, corroded, and subject to breaks. The project scope includes 9,553 linear feet
(which represents 0.8% of the City's Water distribution system) of mains and services on vari-
ous streets within the City.
Justification
Some mains are inadequate in size to supply required flows and pressures for fire protection,
and others are subject to recurring breaks.
Supplemental Information
Each year the projects are re-evaluated and the highest priority is given to the most deterio-
rated portions of the system. Linear footage and locations are subject to change, please refer to
the City of Palo Alto Utilities webpage to confirm project details.
Significant Changes
Due to delays of WMR 26-30, project design and construction funding is postponed to FY 2022
and FY 2023.
Fund: Water Fund - Operating
Category: Water Main Replacements
Project Location: Various Locations
Managing Department: Utilities
Initial Project Start: Summer 2020
Initial Project Completion: Winter 2022
Revised Project Start: Summer 2022
Revised Project Completion: Spring 2023
Project Number: WS-19001
Installed 16" HDPE pipe waiting to be backfilled
WATER FUND
WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET 111
Funding Sources Schedule
Funding Source
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Water Fund 0 0 0 0 0 0 0 639,362 639,362 6,396,320 7,035,682
Total 0 0 0 0 0 0 0 639,362 639,362 6,396,320 7,035,682
Expenditure Schedule
Project Phase
Prior
Years
FY 2017
Budget
FY2017
Est.FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
5 Year CIP
Total
Beyond 5
Year CIP Total
Construction 0 0 0 0 0 0 0 0 0 6,396,320 6,396,320
Design 0 0 0 0 0 0 0 639,362 639,362 0 639,362
Total 0 0 0 0 0 0 0 639,362 639,362 6,396,320 7,035,682
Relationship to Comprehensive
Plan
Primary Connection
Element: Natural Environment
Section: Water Resources
Goal: N-4
Policy: N-20
Potential Board/Commission
Review:
Utilities Advisory Commission
Environmental Impact Analysis:
This project is expected to have a possible exemption from CEQA under Section 15302.
WATER FUND
112 WATER FUND • CITY OF PALO ALTO FISCAL YEAR 2018 CAPITAL BUDGET