HomeMy WebLinkAbout2018-02-01 Utilities Advisory Commission Agenda PacketNOTICE 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 Special Meeting held on January 11, 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 the City Action
Council Adopt a Resolution Establishing Pledged Sources of Revenue For Repayment of State
Revolving Fund Loans for Wastewater Enterprise Capital Improvement Projects at the Palo Alto
Regional Water Quality Control Plant, and Repealing Resolution 9631
2.Amendment to Utilities Rule and Regulation 27, Generating Facility Interconnections Discussion
3.Utilities Advisory Commission Recommendation That Council Approve the Update Action
on the City of Palo Alto’s Ten-Year Electric Energy Efficiency Goals (2018 to 2027)
4.Preliminary Financial Forecasts and Rate Changes for Electric, Gas, Wastewater Collection, Discussion
and Water Utilities
5.Property Assessed Clean Energy (PACE) Financing: Program History and Future Discussion
Considerations in Palo Alto
6.Utilities Strategic Plan Discussion
7.Selection of Potential Topic(s) for Discussion at Future UAC Meeting Action
NEXT SCHEDULED MEETING: March 1, 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)).
Public Letter(s) to the UAC
UTILITIES ADVISORY COMMISSION
WEDNESDAY, FEBRUARY 1, 2017 – 7:00 P.M.
COUNCIL CHAMGERS
Palo Alto City Hall – 250 Hamilton Avenue
REVISED
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
(Revised slides #29 and #36)
(Revised presentation)
Utilities Advisory Commission Minutes Approved on: Page 1 of 10
UTILITIES ADVISORY COMMISSION MEETING
MINUTES OF JANUARY 11, 2017 SPECIAL MEETING
CALL TO ORDER
Chair Cook called to order at 7:00 p.m. the meeting of the Utilities Advisory Commission (UAC).
Present: Chair Cook, Vice Chair Danaher, Commissioners Forssell, Johnston, Schwartz, and
Trumbull
Absent: Commissioner Ballantine
ORAL COMMUNICATIONS
Deputy City Clerk David Carnahan spoke regarding recruitment for three vacancies on the Historic
Resources Board, five on the Parks and Recreation Commission, and one on the Planning and
Transportation Commission. Applications would be due on January 27, 2017 at 4 pm. The City
Clerk’s Office asked Utilities Advisory Commissioners and other public listening to the meeting to
pass on the information to any potential candidates.
APPROVAL OF THE MINUTES
Commissioner Schwartz noted two corrections to the minutes. On page three, there was a
statement that the date for the joint study session with Council was being rescheduled for 2016,
and she assumed it was intended to state 2017, and on the same page, the phrase “totally about
2.5 megawatts” should be corrected to “totaling about 2.5 megawatts.” On page five, the re was a
statement that “Chair Cook agreed with the…” when “Commissioner Cook agreed that…” would
have been more accurate. There were also typos on that page.
Commissioner Trumbull moved to approve the minutes from the November 2, 2016 UAC meeting
and Commissioner Johnston seconded the motion. The motion carried unanimously (6-0) with
Chair Cook, Vice Chair Danaher, and Commissioners Forssell, Johnston, Schwartz, and Trumbull
voting yes and Commissioner Ballantine absent.
AGENDA REVIEW AND REVISIONS
Chair Cook asked that Item Three, Amendment to Utilities Rule and Regulation 27 be delayed until
the next meeting. He said Commissioner Ballantine would be at that meeting and would be able to
provide good feedback.
DRAFT
Utilities Advisory Commission Minutes Approved on: Page 2 of 10
REPORTS FROM COMMISSION MEETINGS/EVENTS
Commissioner Schwartz discussed the Western Energy Institute’s Women in Energy Symposium,
where she had recently given a keynote address. She said it was unusual that not only were the
symposium attendees nearly all women, they represented every functional group that could be
found in a utility. It was one of the most well-done conferences she had been to in a long time. She
found the symposium speakers to be really good. She highly recommended it to women in the City
of Palo Alto Utilities Department. She also discussed the Low Income Energy Issues Forum put on
by DEFG. She presented there on a new model she was working on related to low-income
customers and solvency. The model addresses customers who have trouble paying their bills. She
was not sure how relevant it was to Palo Alto, but if there were some customers having trouble
paying their bills it might provide relevant information. The way a program is designed affects its
uptake for different segments of the low-income population and there were a lot of people
working creatively on addressing this problem.
UTILITIES DIRECTOR REPORT
1. New Large-Scale Solar Projects: In December, the City added two new large-scale solar
projects to its renewable energy portfolio, increasing the City’s solar commitments in California
to more than 150 megawatts (MW). Of those total solar commitments, over 125 MW are now
operating. The 40 MW Elevation Solar C and 20 MW Western Antelope Blue Sky Ranch B solar
farms located in Lancaster, California are developed, owned and operated by sPower, a leading
independent renewable energy provider. Palo Alto is purchasing all 60 MW of solar energy
produced at these facilities under 25-year power purchase agreements (PPA). These projects
represent the last of five recent so lar PPA contracts that will enable the City to supply about
one-third of Palo Alto’s total annual electricity needs through solar energy. The City is now on
track to reach a Renewable Portfolio Standard (RPS) of up to 60% in 2017, helping us move
closer towards the goal of 100% carbon free electricity.
2. Recent Water Supply Changes: The San Francisco Public Utilities Commission (SFPUC) has
begun infrastructure improvement work on the Mountain Tunnel pipeline facility that delivers
water to its wholesale customers from the Hetch Hetchy Reservoir. In order to accommodate
this work, water supply from Hetch Hetchy is anticipated to be shut down until March of this
year. During this period, SFPUC will provide San Francisco Regional Water System customers,
including Palo Alto, with treated water from the Sunol Valley and Harry Tracy Water Treatment
Plants. City staff will work with SFPUC to deliver timely information about water source
changes through the webpage cityofpaloalto.org/WaterQuality and proactive commun ication
with customers via neighborhood groups, email list serves, social media, etc., as appropriate.
3. Water Supply Availability: The recent storms have made a significant contribution to the
water supply availability in the Regional Water System. As of January 5 Hetch Hetchy reservoir
is 93.9% full. Other storage is similarly situated. The State Water Resources Control Board is
holding a workshop next week to discuss the fate of the Emergency Conservation Regulation
beyond February 2017.
4. Bay Area Storm Response: Recent winter storms have energized Bay Area agencies including
the City’s Utilities, Office of Emergency Services, Public Works, other departments and regional
entities, to coordinate efforts for storm, flooding and emergency response. The City of Palo
Alto has not yet experienced major local creek flooding so far. We had a few power outages
Utilities Advisory Commission Minutes Approved on: Page 3 of 10
this past weekend due to rains, windy conditions and trees falling on power lines. Less than
1,000 out of a total of about 66,000 residential customers exper ienced a power outage of
some duration over the past weekend and early part of this week. The impact was relatively
small compared to the rest of the Bay Area. We are grateful to our staff who worked diligently
to ensure swift responsiveness and continuity of services to customers even during weekend
hours and through inclement weather conditions. The Palo Alto community responded in -kind
with messages of kudos and thanks to our crews!
5. Upcoming events: Save the date! The City is hosting an Earth Day festival on Saturday, April
22. This event invites all in the area to join in the festivities, including cities, non -profits,
environmental and community groups. Activities will include the Great Race for Saving Water
5K fun run and walk, electric vehicle test drives, nature walks, bike tours, zoo animals, zero
waste picnic, raffles, live music, arts and crafts, entertainment and more!
Commissioner Schwartz, in reference to the comments on storm response, noted that her friend
was within the outage area and was very impressed by the responsiveness of the staff, the CPAU
outage map, and the fact they beat the projected time.
COMMISSIONER COMMENTS
Commissioner Danaher requested a brief discussion on fundamental issues such as strategic
planning when the UAC has a light meeting agenda. Topics could be high level ones that require
little staff work to prepare for, but that would help to educate the Utilities Advisory Commission
and the public.
Chair Cook welcomed the new City Council liaison, Councilmember Eric Filseth.
Utilities General Manager Ed Shikada read a set of comments on heat pump water heating from
Commissioner Ballantine. Commissioner Ballantine had been doing some research on heat pump
water heating. He had previously believed that the coefficient of performance for state of the art
heat pumps was very low, and that the amount of energy required to pump the water would be
equivalent to the energy required to heat the water . Because of that, he had not believed using
solar thermal energy for heat pump water heating was not efficient , because if the energy was not
carefully stored as hot water the heat would have to come from the grid at night. His later
research had revealed that the coefficient of performance for heat pump water heating was much
higher than he had thought for climates like Palo Alto’s. The installed cost for a heat pump water
heater was also competitive with the installed cost of a solar thermal system. On that basis he
supported the program.
UNFINISHED BUSINESS
Chair Cook stated there was no unfinished business.
Utilities Advisory Commission Minutes Approved on: Page 4 of 10
NEW BUSINESS
ITEM 1: ACTION: Staff Recommendation that the Utilities Advisory Commission Recommend that
the City Council Adopt a Resolution Approving the Updated City of Palo Alto Utilities Legislative
Policy Guidelines
Acting Assistant Director of Engineering Debbie Lloyd said staff comes to the UAC annually to
update the legislative guidelines. These guidelines are used when staff meets with legislators. The
attachment to the report shows the redline changes.
Commissioner Trumbull asked if the guidelines covered regulatory items as well as legislative;
Lloyd responded that they did.
Senior Resource Planner Heather Dauler said staff also coordinated with the City’s guidelines as
well. There were no changes to the goals for all utilities. The first recommendation was to provide
policy guidance enabling staff to engage with key accounts when legislation comes up that would
affect them. The next recommendations were to strike redundant language related to ratemaking,
customer data security infrastructure, and cap and trade. The changes for the electric utility
included modifications to language related to Net Energy Metering (NEM) successor programs to
reflect the fact the City has already adopted a successor program. The only change for the gas
utility was to modify redundant language related to the cap and trade program. The only ch ange
for the wastewater collection utility was to add a basic guideline related to infrastructure security.
Commissioner Schwartz asked why infrastructure security wasn’t applicable to all utilities, not just
wastewater; Dauler said staff could consider that.
Dauler discussed the changes recommended for the water utility guidelines. The guideline related
to the CUWCC BMPs was recommended to be deleted because it was not currently applicable.
Staff also recommended adding language related to SFPUC. Staff also recommended streamlining
language related to Proposition 218. This was also in preparation for dealing with new upcoming
State conservation plans.
Schwartz said policies were changing at the Federal level, with California trying to maintain its
leadership role. Was there any specific language needed to give staff the ability to respond to
those issues?
Dauler believed existing language was sufficient.
Lloyd said it was also possible to return to the UAC and Council if a change was needed. She
agreed with Dauler that the existing language gave staff adequate flexibility.
Commissioner Johnston asked whether the guidelines were in priority order.
Lloyd said there was no priority order in the guidelines. The guidelines were meant to achieve the
three to four high level goals for each section.
Utilities Advisory Commission Minutes Approved on: Page 5 of 10
Utilities General Manager Shikada said the legislative guidelines were often effectively defensive,
particularly to deal with “gut and amend” bills at the end of the legislative section. He addressed
Commissioner Schwartz’s point about Federal action, saying he expected there to be lead time to
respond to those issues.
Danaher asked whether the guidelines addressed energy efficiency; Dauler said they did.
Dauler discussed potential issues that were going to arise in 2017. She said that regionalization
was potentially going to be delayed.
Lloyd said anticipated changes to environmental policy under the Trump administration could
affect the appetite for other states to join California in a regional energy market. T he City would be
involved in upcoming discussions related to these issues through the BAMX group.
Dauler discussed Western issues. There was some hope that progress would be made on the
Central Valley Project Improvement Act (CVPIA).
Chair Cook asked staff to state for the record why we were interested in Western issues.
Dauler said the Western Area Power Administration provided a large fraction of the City’s power.
The CVPIA was passed a long time ago to address environmental impacts of the CVP, but there was
some concern that the costs passed to power customers were too high.
Lloyd said staff was beginning working with Western on the next contract period ten years from
now.
Schwartz asked whether regionalization could affect the carbon content of the power we buy
Lloyd said regionalization could affect the carbon content of market power.
Shikada said staff expected major changes to these issues due to the Trump administration .
Dauler said changes to Federal policies were expected due to the 2016 presidential election and
the new appointees of the new administration. California was preparing to fight anticipated
actions. In 2016 water was a major issue due to drought. Currently the legislature was waiting to
see whether precipitation would obviate the need for a drought bill. There was also an energy bill
in 2016 that contained provisions that would help with dam relicensing, but it died. The bill
sponsor was interested in it, but it was not clear whether there would be appetite in the House to
move it forward.
Public speaker Jeff Hoel spoke regarding Fiber. He noted there was no discussion of Fiber Utility
issues in the staff presentation. He said there were differences between the redlined and final
draft. He noted there was no discussion of Dig Once. He asked whether the policy change would
take effect prior to Council action.
Dauler said there were no substantive changes to Fiber policies proposed. The Dig Once policy
language remained unchanged.
Utilities Advisory Commission Minutes Approved on: Page 6 of 10
Commissioner Trumbull verified that no changes to policy would occur until Council acted.
Shikada noted there were unintentional differences between the redline and final drafts in that
the proposed Dig Once language changes shown in the redline had not been made in the fi nal
version.
Dauler said it was the intention to keep Dig Once language in the policy. She would follow up to fix
the issue with Fiber guideline six.
ACTION: Commissioner Trumbull moved, seconded by Commissioner Danaher to recommend
approval of the guidelines with the correction of the Dig Once language. The motion carried
unanimously (6-0, with Chair Cook, Vice Chair Danaher, Commissioners Forssell, Johnston,
Schwartz, and Trumbull voting yes and Commissioner Ballantine absent).
ITEM 2. ACTION: Recommendation that Council Approve the 2017 Water Integrated Resource
Plan Guidelines
Senior Resource Planner Karla Dailey said this item had been discussed in November 2016. There
were minor changes based on that meeting. The discussion of threats to the Hetch Hetchy system
was expanded. She said there would be ample time to respond to these threats if they
materialized. Also, after the draft was taken to the UAC, it was taken to the UROCC, and they
recommended some clarifications to the fourth guideline regarding evaluating the technical and
economic feasibility of alternative water sources. The recommendation was that the UAC
recommend the Council approve the WIRP guidelines.
Johnston asked how this document was used on a day to day basis.
Dailey said staff is already pursuing cost effective DSM. She said staff will take steps to understand
customer preferences regarding water quality and cost and noted that the recent blend change to
water that had a taste and odor problem showcased that customers notice when there is a change
in their water. Dailey said a consultant will be hired to make sure customers are surveyed in a
scientifically sound way. She said the Recycled Water Strategic Plan is underway and that it is
important to understand how recycled water and potable water are closely related.
Johnston asked how long the recycled water strategic plan would take .
Dailey said that funding from the Santa Clara Valley Water District has been obtained and a
consultant hired. Work will take place over a couple of years. The recycled water expansion
evaluation will be completed more quickly, but the groundwater study will be more time intensive.
Johnston asked whether we would revisit the WIRP after the Recycled Water Strategic Plan is
complete.
Dailey confirmed that the WIRP will be revisited at that time.
Schwartz said get in front of communication related to blend changes and basement dewatering.
People were being asked to conserve and then they see apparent waste from dewat ering. She also
advocated for making advanced metering a priority.
Utilities Advisory Commission Minutes Approved on: Page 7 of 10
Danaher said his concern was that the outlook wasn’t dire en ough regarding water supplies.
Dailey said the report does include a discussion about more dire scenarios. She said that the most
immediate threat is the state’s proposal to double the unimpaired flow requirements on the
Tuolumne which would still leave enough water during normal years but would require deep
cutbacks in dry years. She said that reducing the need for potable wate r is one way to address the
dry year need and that the Recycled Water Strategic Plan will provide more insight to that
alternative. None of the other potable water supply alternatives are bullet proof in dry year
scenarios. Groundwater with an indirect potable reuse project could be a drought proof supply.
Utilities General Manager Shikada added that the cost associated with the recycled water
alternatives will be clearer over the next couple of years.
Dailey said there are a number of unfinished tasks th at will impact future water supply planning. It
has been a number of years since the potable water supply alternatives have been evaluated, and
the cost and availability of those resources have changed in that time, especially given the State’s
actions regarding mandatory reductions in 2015. This report updates the information about those
potable resources so that, when more information on recycled water is available, the resource
options can be more easily compared.
Danaher commented that 91 years of historical data is not sufficient to predict future water supply
conditions. He said he is concerned that the SFPUC should consider more dire future scenarios to
evaluate what actions should be taken now.
Dailey said the SFPUC is undertaking studies of climat e change and the impact on water supply
availability.
Schwartz said that experience from Australia and Israel may provide insight for actions that should
be taken in California.
Dailey agreed and said that water managers in California are already looking at those countries
and the lessons learned. She said that a lot of water issues are regional and that agencies are
working together.
Abendschein added that it is worth noting we have an ability to respond to shortages in the form
of demand reduction and groundwater. He said we have made great strides to reduce per capita
use. We are moving in the right direction to be able to respond to dire scenarios even if the
projections don’t reflect that.
Danaher reiterated the desire to see more explicit scenario s in the future.
Councilmember Filseth asked how big a problem we will have in a dry year and if we have
modeled how the alternatives will fill in for various deficiencies.
Dailey said the SFPUC system is currently designed for not more than a 20% cutbac k. Other
impacts, like the State’s proposal to increase unimpaired flows, would result in great cutbacks.
Utilities Advisory Commission Minutes Approved on: Page 8 of 10
There is an overarching sentiment, as reflected in the S/CAP, to reduce the reliance on impo rted
water and that is also driving the need to explore recycled water.
Councilmember Filseth said the economic benefit analysis needs to include the assurance that the
investment will provide the coverage we need.
Shikada said the Santa Clara Valley Water District may need to take the lead on some projects
because doing them at a regional level may provide economies of scale.
Schwartz said the Council should establish priorities for potential projects.
Forssell asked if high population or economic growth scenarios have been baked into this plan.
Dailey said the Planning Department’s projections are included and can be seen in the Urban
Water management Plan. She added that in Palo Alto we have seen water use go down as
population increases. This is due to two reasons: increased efficiency and single fami ly houses
replaced by multifamily units with little to no landscaping.
Danaher said he wants to make sure actions with long lead times are being considered now. He
used dual plumbing requirements as an example.
Dailey said dual plumbing is required in new commercial developments over a certain size and that
landscaping requirements have become quite strict.
Danaher suggested the City may be able to acquire other water rights. He asked about how the
Utilities Strategic Plan relates to the WIRP.
Shikada said the WIRP is between the shorter term look of a strategic plan and the longer term
look of the comprehensive plan. Projections of population and employment are based on
assumptions, but changes in those may warrant a change in the WIRP.
Danaher asked is this plan will be in place till 2030.
Dailey reminded him that the WIRP will be updated after the Recycled Water Strategic Plan is
complete in a couple of years.
ACTION: Commissioner Trumbull moved and Commissioner Schwartz seconded a motion to
recommend Council approve the 2017 Water Integrated Resources Plan Guidelines. The motion
carried unanimously (6-0, with Chair Cook, Vice Chair Danaher, Commissioners Forssell, Johnston,
Schwartz, and Trumbull voting yes and Commissioner Ballantine absent).
ITEM 3. DISCUSSION: Amendment to Utilities Rule and Regulation 27, Generating Facility
Interconnections
Item moved to the February 1, 2017 Utilities Advisory Commission Meeting.
Utilities Advisory Commission Minutes Approved on: Page 9 of 10
ITEM 4. ACTION: Selection of Potential Topic(s) for Discussion at Future UAC Meeting
Utilities General Manager Ed Shikada stated there were several items for future meetings he
wanted to bring to the Commission’s attention. On the February meeting agenda there was an
item related to State Revolving Fund loan repayments related to the Regional Water Quality
Control Plant. This was being brought to the Utilities Advisory Commission because it involved
pledging the revenues of the Wastewater Collection Utility as collateral.
Abendschein stated that the Energy Efficiency item on the February UAC agenda would only
involve Electric Energy Efficiency. Gas Efficiency goals would be put on a later meeting agenda.
This was due to some late guidance from the California Energy Commission (CEC), and to
incorporate that guidance staff had decided to focus solely on the electric efficiency goals in order
to meet CEC regulatory deadlines, which did not apply to the gas utility.
Commissioner Schwartz noted that she and Commissioner Ballantine were working on a
Commissioner’s memo on electrification, particularly building electrification. She asked which
meeting would be a good one for that memo, and how early she needed to refer it to staff.
Shikada said March would be a good meeting due to other related topics being on the agenda. He
said receiving the memo a couple of weeks before the meeting would be fine. He then noted that
staff was planning to provide a presentation in February on Property-Assessed Clean Energy
(PACE) programs at a future meeting, since staff and commissioners were r egularly contacted by
interested PACE providers. Staff would also provide a short overview of staff’s current thinking on
the Strategic Plan update. They would be seeking some guidance from the UAC on how the UAC
would like to interact with the Strategic P lanning effort, whether through the full Commission or
an ad hoc committee. In March, staff anticipated returning with an electrification analysis.
Commissioner Schwartz asked when future discussion of smart metering and grid modernization
efforts would occur.
Shikada said the discussion would take place through the Strategic Plan .
Vice Chair Danaher asked when the next discussion of the Fiber Utility would be brought to them.
Shikada said it was not scheduled yet, but staff understood it was a high prio rity.
Chair Cook noted that the rolling calendar for the latter half of the year was fairly empty.
Commissioner Schwartz said it would be worthwhile to have a discussion with the new City Council
before filling out the rest of the rolling calendar for the Commission for the year.
Shikada stated the Council was just starting to discuss its own priorities, and he expected that part
of that meeting would involve discussing how to interact with the City’s various Commissions.
Utilities Advisory Commission Minutes Approved on: Page 10 of 10
ACTION: None
Meeting adjourned at 8:34 p.m.
Respectfully Submitted,
Marites Ward
City of Palo Alto Utilities
Page 1 of 3
1
MEMORANDUM
TO: UTILITIES ADVISORY COMMISSION
FROM: PUBLIC WORKS DEPARTMENT
DATE: FEBRUARY 1, 2017
SUBJECT: Staff Recommendation that the Utilities Advisory Commission Recommend
that the City Council Adopt a Resolution Establishing Pledged Sources of
Revenue For Repayment of State Revolving Fund Loans for Wastewater
Enterprise Capital Improvement Projects at the Palo Alto Regional Water
Quality Control Plant, and Repealing Resolution 9631
REQUEST
Staff requests that the Utilities Advisory Commission recommend that the City Council Repeal
Resolution No. 9631 (Attachment 3) and replace it with a Resolution (Attachment 1) pledging
an additional source of revenue for the repayment of two State Revolving Fund loans from the
State Water Resources Control Board: one loan for design and construction of the Regional
Water Quality Control Plant sludge dewatering and load -out facility, and one for planning and
design of three additional projects: the laboratory/environmental services building, primary
sedimentation tank rehabilitation, and fixed film reactor rehabilitation projects.
EXECUTIVE SUMMARY
The State Water Resources Control Board requires the City to pledge revenues from both the
City’s Wastewater Collection and Treatment funds in order to be eligible for low interest loans
from the State for upcoming Wastewater Treatment projects. Staff therefore recommends that
Council repeal Resolution 9631, which pledged only Wastewater Treatment fund revenues, an d
adopt the attached replacement (Attachment A). The City’s acceptance of this SWRCB
requirement permits SRF loan eligibility and keeps the interest rate at half of what it would
otherwise be compared to typical water revenue bonds.
BACKGROUND
The State Water Resources Control Board (SWRCB) administers the State Revolving Fund (SRF)
program. The SRF program has a fixed amount of funds available each fiscal year and provides
loans to wastewater treatment agencies on a first -come-first-served basis. Under this program,
eligible projects can apply for loans with interest rates that are roughly half the rate of the State
General Obligation Bonds; the current SRF interest rate is 1.7%. These favorable terms help
lower total project costs, minimizing the financial impacts of projects on rate-payers.
Page 2 of 3
On October 17, 2016, Council adopted three resolutions authorizing the City Manager to file
applications for SRF loans for construction of the sludge dewatering and truck load out facility
(CWSRF Project No. 8190-110) and planning/design of the laboratory/environmental services
building, the primary sedimentation tank rehabilitation, and fixed film reactor rehabilitation
projects (CWSRF Project No. 8104-110), designating the amount of project expenditures to be
reimbursed by SRF proceeds, pledging repayment revenue for the SRF loans, and authorizing
amendments with RWQCP Partners to obligate their SRF loan repayment (SR#7144 /
Attachment B).
DISCUSSION
Section 603 of the Federal Clean Water Act Amendments requires each financing recipient to
establish one or more pledged sources of revenue for SRF assistance. Resolution No. 9631
pledged revenues of the City’s Wastewater Treatment enterprise fund for repayment of SRF
financing for CWSRF Project No. 8190-110 and CWSRF Project No. 8104-110. After Council’s
adoption of Resolution No. 9631, and the SWRCB’s review of the City’s SRF application, the
SWRCB determined that the City must also pledge Wastewater Collection revenues for
repayment of the SRF loans. The dual pledge of funds has been required on past debts,
including SWRCB SRF loans for a 2007 recycled water pipeline project and a 2009 ultraviolet
disinfection facility project as well as the City’s 1999 bond issuance for RWQCP and storm drain
improvements. Therefore, staff proposes that Council adopt a new resolution pledging both
funds, and repealing the earlier resolution.
Securing these SRF loans will also allow the City to retire its sludge incinerators, reducing
greenhouse gasses dramatically. All of the five Wastewater Treatment Plant’s Partner Agencies
have executed agreements in which they individually agree to repay the Palo Alto Wastewater
Treatment Fund their portion of the State loans, which will be paid annually by the Wastewater
Treatment Fund. Pledging of the Wastewater Collection Fund is consistent with the actions
taken by the Partner agencies.
NEXT STEPS
Construction Contract Bid Opening February 2017
SRF Installment Sales Agreement development February 2017
Palo Alto Council approval of SRF Installment Sales Agreement March 2017
RESOURCE IMPACT
No new additional funds are associated with the adoption of the substitute resolution. Pledging
the Wastewater Collection revenues in addition to Wastewater Treatment revenues is not
anticipated to negatively impact the viability of either fund. Loan expenses, which are directly
paid by the Wastewater Treatment Fund to the State, have been included in budget planning
for each fund. Each of the Wastewater Treatment Plant Partner Agencies has executed
agreements in which they agree to repay their portion of the State loans.
The construction loan for the sludge dewatering and truck loadout facility is estimated to be
$27.8 million with an annual debt service payment required for 30 years. Based on an
estimated 1.8% interest rate, the Palo Alto portion of the debt service is estimated .at $0.458
million per year (37.89% share) and the other five partner agencies portion is estimated at
$0.750 million per year (62.11% share). The estimated $6.75 million planning and design loan
for the primary sedimentation tank rehabilitation, fixed film reactor rehabilitation, and the
environmental services/laboratory building is a 10-year loan that can be refinanced into a 30-
year SRF construction loan. Based on an estimated 1.8% interest rate, the Palo Alto portion of
the ten-year debt service payment for the planning loan is estimated at $0.282 million per year
(37.89% share) and the other five partner agencies portion is estimated at $0.462 million per
year (62.11% share) for ten years.
POLICY IMPLICATIONS
Adoption of the resolution does not represent a change in existing policies.
ENVIRONMENTAL REVIEW
The Commission's recommendation that Council approve a revenue pledge resolution to repay
State Revolving Fund financing for the above-referenced Projects does not meet the definition
of a project for the purposes of the California Environmental Quality Act, under Public
Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5), because it is an
administrative governmental activity which will not cause a direct or indirect physical change in
the environment. Council approved an Initial Study/Mitigated Negative Declaration for the
sludge-dewatering and loadout facility project on March 28, 2016 (Staff Report ID# 6424).
ATTACHMENTS
A. Resolution 9631: Resolution of the Council of the City of Palo Alto Establishing One or
More Pledged Sources of Revenue For Repayment of Funding Pursuant to The Federal
Clean Water Act Amendments
B. Staff Report 7144 Partner Agreements and Resolutions for Sludge Dewatering &
Loadout Facility
C. Adoption of a Resolution Establishing Pledge Sources of Revenue for Repayment of
State Revolving Fund (SRF) Loans for Planning, Design and Construction of Wastewater
Treatment Enterprise Fund Facilities at the Palo Alto Regional Water Quality Control
Plant (RWQCP), and Re ealing Resolution No. 9631
PREPARED BY: MES ALLEN, Manager, Water Quality Control Plant
REVIEWED BY: HIL BOBEL, Assistant Director of Public Works
APPROVED BY:
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ED SHIKADA
Utilities General Manager
Page 3 of 3
Attachment A
NOT YET APPROVED
161220 jb 6053827 1
Resolution No. _____
Resolution of the Council of the City of Palo Alto Establishing Pledged
Sources of Revenue For Repayment of Funding Pursuant to the Federal
Clean Water Act Amendments and Repealing Resolution 9631
RECITALS
A. The CITY OF PALO ALTO (the “City”) desires to finance the costs of planning,
design, and/or construction of certain public facilities and improvements relating to its
wastewater system, including the planning/design of primary sedimentation tanks, fixed film
reactors, and the laboratory/environmental service building, and the construction of a sludge
treatment and load-out facility (the “Projects”) that were identified in the Regional Water
Quality Control Plant’s Long Range Facility Plan.
B. The City intends to finance the planning, design, and/or construction of the
Projects or portions of the Projects with moneys (“Project Funds”) provided by the State of
California, acting by and through the State Water Resources Control Board (the “Water Board”).
C. Section 603(d)(1)(C) of the Federal Clean Water Act Amendments require each
financing recipient to establish one or more pledged sources of revenue for Clean Water State
Revolving fund (CWSRF) financial assistance.
D. Revenue will be considered pledged when the City passes a resolution
committing a source of funds for repayment.
E. On October 17, 2016 the City Council adopted Resolution No. 9631, pledging
revenues of its Wastewater Treatment enterprise fund to repayment of Clean Water State
Revolving Fund financial assistance incurred for the planning, design, and/or construction of the
Projects, and, in response to additional direction from the Water Board, now wishes to repeal
Resolution No. 9631 and adopt this Resolution, in order to pledge revenue from both its
Wastewater Treatment and Wastewater Collection enterprise funds to repayment of Clean
Water State Revolving Fund financial assistance for the Projects.
NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES as follows:
SECTION 1. The City of Palo Alto hereby pledges Net Revenues of its Wastewater
Treatment enterprise fund and Wastewater Collection enterprise fund to repayment of any and
all Clean Water State Revolving Fund financing incurred for CWSRF Project No. 8104, including
the planning/design of primary sedimentation tanks, fixed film reactors, and
laboratory/environmental service building and CWSRF Project No. 8091-110, including the
design and construction of a sludge dewatering and load-out facility. Net Revenues of the City’s
Wastewater Treatment enterprise and Wastewater Collection enterprise are defined as follows:
Attachment A
NOT YET APPROVED
161220 jb 6053827 2
"Net Revenues" means, with respect to the Wastewater Treatment enterprise and
Wastewater Collection enterprise, for any period of computation, the amount of the
Gross Revenues received from the Wastewater Treatment enterprise and Wastewater
Collection enterprise during such period, less the amount of Maintenance and
Operation Costs of the Wastewater Treatment enterprise and Wastewater Collection
enterprise becoming payable during such period.
"Gross Revenues" means, for any period of computation, all gross charges received for,
and all other gross income and revenues derived by the City from, the ownership or
operation of the Wastewater Treatment enterprise and Wastewater Collection
enterprise or otherwise arising from the Wastewater Treatment enterprise and
Wastewater Collection enterprise during such period, including but not limited to (a) all
Charges received by the City for use of the Wastewater Treatment enterprise and
Wastewater Collection enterprise, (b) all receipts derived from the investment of funds,
(c) transfers from (but exclusive of any transfers to) any stabilization reserve funds, and
(d) all moneys received by the City from other public entities whose inhabitants are
served pursuant to contracts with the City.
"Maintenance and Operation Costs" means the reasonable and necessary costs spent or
incurred by the City for maintaining and operating the Wastewater Treatment
enterprise and Wastewater Collection enterprise, calculated in accordance with sound
accounting principles, including the cost of supply of water, gas and electric energy
under contracts or otherwise, the funding of reasonable reserves, and all reasonable
and necessary expenses of management and repair and other expenses to maintain and
preserve the Wastewater Treatment enterprise and Wastewater Collection enterprise in
good repair and working order, and including all reasonable and necessary
administrative costs of the City attributable to the Wastewater Treatment enterprise
and Wastewater Collection enterprise and, any financing instruments incurred to
finance improvements to the Wastewater Treatment enterprise and Wastewater
Collection enterprise, such as salaries and wages and the necessary contribution to
retirement of employees, overhead, insurance, taxes (if any), expenses, compensation
and indemnification of any bond trustee or other lender, and fees of auditors,
accountants, attorneys or engineers, and including all other reasonable and necessary
costs of the City or charges required to be paid by it to comply with the terms of any
financing instrument related to the Wastewater Treatment enterprise and Wastewater
Collection enterprise, but excluding depreciation, replacement and obsolescence
charges or reserves therefor and amortization of intangibles or other bookkeeping
entries of a similar nature.
"Charges" means fees, tolls, assessments, rates and rentals prescribed under applicable
law by the City Council for the services and facilities of the Wastewater Treatment
enterprise and Wastewater Collection enterprise.
Attachment A
NOT YET APPROVED
161220 jb 6053827 3
This pledged source of revenue shall remain in effect until such financing is fully discharged
unless modification or change of such dedication is approved in writing by the State Water
Resources Control Board.
SECTION 2: The Council’s pledge of the revenues to repay State Revolving Fund
financing for the above-referenced Projects does not meet the definition of a project for the
purposes of the California Environmental Quality Act, under Public Resources Code Section
21065 and CEQA Guidelines Section 15378(b)(5), because it is an administrative governmental
activity which will not cause a direct or indirect physical change in the environment. Council
approved an Initial Study/Mitigated Negative Declaration for the sludge-dewatering and
loadout facility project on March 28, 2016 (Staff Report ID# 6424).
SECTION 3: Resolution No. 9631, adopted on October 17, 2016, is hereby repealed.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
_________________________ ______________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
__________________________ ______________________________
Senior Deputy City Attorney City Manager
______________________________
Director of Public Works
______________________________
Director of Administrative Services
City of Palo Alto (ID # 7144)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 10/17/2016
City of Palo Alto Page 1
Summary Title: Partner Agreements and Resolutions for Sludge Dewatering
& Loadout Facility
Title: Adoption of Three Resolutions to Execute State Revolving Fund (SRF)
Financial Assistance Applications, Designate the Amount of Project
Expenditures to be Reim bursed by SRF Proceeds, and Pledge Revenue for
Repayment of SRF Loans; Amend the 2009 SRF Assistance Agreement; and
Authorize Contract Amendments with RWQCP Partners Mountain View and
Los Altos, East Palo Alto Sanitary District, and the Board of Trustees o f the
Leland Stanford Junior University for the Funding of the Sludge Dewatering
and Load Out Facility, the Primary Sedimentation Tank Rehabilitation, the
Fixed Film Reactor Rehabilitation, and the Laboratory Environmental Services
Building for the Wastewa ter Treatment Enterprise Fund Facilities at the Palo
Alto Regional Water Quality Control Plant (RWQCP)
From: City Manager
Lead Department: Public Works
Recommendation
Staff recommends that Council
1.Adopt a Resolution (Attachment A) authorizing the City Manager or his
designee to execute State Revolving Fund Financial Assistance Applications
from the State Water Resources Control Board (SWRCB) on behalf of the
Palo Alto Regional Water Quality Control Plant (RWQCP) for the planning,
design, and construction of projects identified in the RWQCP’s Long Range
Facility Plan;
2.Adopt a Resolution (Attachment B) designating the amount of sludge
dewatering and loadout facility project expenditures to be reimbursed by
proceeds from the State Revolving Fund;
3.Adopt a Resolution (Attachment C) pledging a dedicated source of revenue
for the repayment of two State Revolving Fund loans from the SWRCB: one
ATTACHMENT B
City of Palo Alto Page 2
for the construction of the sludge treatment facility, and one for the
planning of three additional projects: the laboratory/environmental
services building, the primary sedimentation tank rehabilitation, and fixed
film reactor rehabilitation projects;
4. Amend the City’s existing 2009 State Revolving Fund Financial Assistance
Agreement to be Subordinate to 1995 and 1999 Utility Revenue Bonds, and
on parity with the City’s 2007 SRF loan (Attachment D); and
5. Authorize the City Manager or his designee to execute the following
contract amendments with the RWQCP partners for the construction of the
sludge dewatering facility:
a. Addendum No. 8 to the Basic Agreement with the cities of Mountain
View and Los Altos (Attachment E);
b. Amendment No. 6 to Agreement No. C237 with East Palo Alto Sanitary
District (Attachment F); and
c. Amendment No. 4 to Agreement No. C869 with the Board of Trustees of
the Leland Stanford Junior University (Attachment G).
Executive Summary
A facility to replace the sewage sludge (“biosolids”) incinerators at the Regional
Water Quality Control Plant (RWQCP) has been designed (Capital Improvement
Program (CIP) project WQ-14001) and Council is being asked to approve the
application for a low interest loan from the State Water Resources Control Board
for construction. The facility will dewater the biosolids and allow it to be loaded
onto trucks and taken offsite for further treatment, until further treatment units
can be built onsite. The type of further treatment has not been decided, and
could be anaerobic digestion, gasification, or another technology.
Council is also being asked to approve the application for a second low interest
loan from the state to conduct planning for the next three major projects,
collectively referred to as Projects, the laboratory/environmental services
building, the primary sedimentation tank rehabilitation, and fixed film reactor
rehabilitation (CIP projects WQ-14002, WQ-14003, and WQ-14004, respectively).
To finalize the applications, Council authorization of several resolutions is
required.
Background
The RWQCP, originally constructed in 1934, has undergone several expansions
City of Palo Alto Page 3
and upgrades. The RWQCP is now an advanced (tertiary treatment) facility that
provides treatment and disposal of wastewater for Palo Alto, Mountain View, Los
Altos, Los Altos Hills, East Palo Alto Sanitary District, and Stanford University. A
Long Range Facilities Plan (LRFP) was prepared in 2012 to provide a plan for
future capital projects. A Biosolids Facility Plan (BFP) was completed in 2014 to
map the management of biosolids when the sewage sludge incinerators are
decommissioned.
State Revolving Fund Program
The State Water Resources Control Board (SWRCB), Division of Financial
Assistance administers the Clean Water State Revolving Fund (SRF) program. The
SRF program has a fixed amount of funds available each year and provides loans
to agencies on a first-come-first-served basis primarily for construction of
wastewater treatment projects. The program’s low interest rates, roughly half of
the State General Obligation Rate and currently 1.7%, and other favorable terms
help lower total project costs, maximizing benefits to rate-payers and partner
agencies.
Previously the City obtained SRF loans for the Ultraviolet Disinfection Facility ($8.5
million, 20-year term) and Palo Alto/Mountain View recycled water pipeline
project ($9.0 million, 20-year term).
Sludge Dewatering and Truck Loadout Facility Project
Council directed staff in May 2014 to initiate the design of the sludge dewatering
and truck loadout facility (CMR ID# 4744). Council approved a contract with
CH2MHILL Engineers in January 2015 to provide design and environmental
consulting services for the sludge dewatering and truck loadout facility to be
located at the RWQCP (CMR ID# 5295). Component One of BFP is a new sludge
dewatering and truck loadout facility, which will allow the retirement of the City’s
two sewage sludge incinerators. The facility will be used to load trucks with
dewatered sludge to be hauled to a regional facility outside of Palo Alto for
further treatment, such as composting, gasification and/or anaerobic digestion.
Staff will return to Council for approval of the sludge hauling contract and
identification of final treatment/disposal location(s) after commencement of
facility construction, closer to the anticipated date of the sludge dewatering
facility startup in early 2020.
City of Palo Alto Page 4
In March 2016, Council approved the Mitigated Negative Declaration, the
Mitigation and Monitoring Program, and the Record of Land Use approving the
Site and Design Review and Architectural Review application for the new
dewatering facility at RWQCP (CMR ID# 6424).
Discussion
Staff has submitted two draft applications to the SWRCB for SRF financing
including an application for 1) construction of the sludge dewatering and truck
loadout facility (CIP project WQ-14001) and 2) planning/design of the primary
sedimentation tank rehabilitation, fixed film reactor rehabilitation, and the
laboratory/environmental services building (CIP projects WQ-14002, WQ-14003,
and WQ-14004), (all four collectively referred to as the Projects). Each of these
Projects is further described in the LRFP. To finalize the applications, Council
authorization of several resolutions is required.
Staff is pursuing two SRF loans: one for the planning, design, construction, and
construction management of the sludge dewatering and loadout facility,
estimated at $30 million, and one for the planning/design of the primary
sedimentation tank rehabilitation, fixed film reactor rehabilitation, and the
laboratory/environmental services building projects, estimated at $6.75 million.
The RWQCP partner agencies (Mountain View, Los Altos, East Palo Alto Sanitary
District, and Stanford University) have already approved the Projects, pursuit of
the SRF loans to fund the Projects, and agreed to repay their share of financial
obligations. City of Palo Alto has final approval of the Projects and loans as the
lead agency and SRF loan applicant. Staff will return to Council for approval of the
(a) final SRF loans, (b) sludge dewatering construction contract, and (c) sludge
dewatering construction management contract.
Several steps in the loan process will require Council action, including approval of
the final loan amounts, and staff will return to Council accordingly. The items
currently brought for Council approval are:
1. Adoption of Authorizing Resolution (Attachment A)
Authorizing the City Manager or his designee to apply for SRF loans for capital
improvement projects identified in the Long Range Facility Plan. While initially
staff plans to apply for two SRF loans, one to fund the sludge dewatering
construction project and one to fund planning of the sedimentation tank
City of Palo Alto Page 5
rehabilitation, fixed film reactor rehabilitation, and laboratory/environmental
sciences building, the resolution is drafted to authorize the City’s application
for any of the capital improvement projects listed in the LRFP. The resolution
also authorizes the City Manager or his designee, the Director of Public Works
or the Manager of the Water Quality Control Plant, to execute SRF financial
assistance agreements and any amendments with the SWRCB. SRF
applications will be submitted after Council approval of a funding strategy and
final construction contract for the relevant facilities.
2. Adoption of Reimbursement Resolution (Attachment B)
The SRF program requires the City to pay in advance for certain tasks such as
planning and design (eligible allowances) to be reimbursed by the SRF loan.
Through the Reimbursement Resolution, Council will designate a maximum of
$30 million in advance funding for expenditures for the sludge dewatering
project. Staff anticipates returning to Council at a later date with any
reimbursement resolutions required for the other three projects.
3. Adoption of Pledged Sources of Revenue Resolution (Attachment C)
Section 603 of the Federal Clean Water Act requires each financing recipient to
establish one or more pledged sources of revenue to be eligible for SRF
assistance. The City will pledge the Net Revenues of its Wastewater Treatment
enterprise fund for both SRF loans being sought this year. In compliance with
existing bond covenants and the requirements of Proposition 218, the revenue
pledge for both new SRF loans will be subordinate to the 1995 Storm Drain and
Water Enterprise Bonds, the 1999 Storm Drain, Wastewater Collection and
Treatment Bonds, the 2007 SRF loan for the Mountain View/Moffett Area
Reclaimed Water Pipeline Project and the 2009 SRF loan for the Ultraviolet
Disinfection Project.
4. Amend the 2009 SRF Financial Assistance Agreement (Attachment D)
The City’s bond counsel advised that the City’s existing 2009 SRF Financial
Assistance Agreement be amended so the City’s pledge of revenues as security
for its 2009 SRF repayment obligation is subordinate to the City’s 1995 and
1999 Utility Revenue Bonds, and on parity with the City’s 2007 SRF loan.
SWRCB agreed to this modification in concept. The City’s bond counsel has
drafted the attached Amendment No. 1 to the City’s 2009 SRF Financial
City of Palo Alto Page 6
Assistance Agreement and the City is awaiting feedback from SWRCB’s legal
department.
5. Approval of Changes to Partner Agencies’ Agreements (Attachments E, F & G)
Except for Los Altos Hills, partner agencies are required to approve the
Projects and promise to repay the SRF loans which will finance each Project’s
planning and construction. The City prepared amendments were made to each
of the partner agency’s relevant agreement, which each agency approved on
the dates listed below.
Mountain View City Council October 13, 2015
Stanford University January 25, 2016
Los Altos City Council February 23, 2016
Board of East Palo Alto Sanitary District Board September 22, 2016
The Addendum and Amendments document the partner agencies’ approval of
the Projects and establish the partner agencies’ acceptance of, and
responsibilities for, the terms and conditions of SRF Financial Assistance
Agreements and Project costs.
Timeline
Palo Alto Council approval of SRF Application
Submittal, Reimbursement and Revenue Pledge
Resolutions*
October 17, 2016
Palo Alto Council approval of Sludge Dewatering
Construction Contract and SRF Construction
Loan
January 2017
Construction Notice To Proceed February 2017
Sludge Dewatering Project completion February 2019
* If approved, staff anticipates bringing the SRF loan agreement for the three planning projects
to Council in 2017
Resource Impact
No financial impacts are associated with the adoption of the resolutions,
amendment of the 2009 SRF loan or approval of the Partner Agreement
addendum and amendments.
City of Palo Alto Page 7
Applying for SRF funds does not obligate the City to proceed with the Projects.
The resource impact of proceeding with Projects will be evaluated at the time
Council approval for each Project is requested.
Funding for the design and environmental consulting services for the dewatering
facility was in the Wastewater Treatment Fund CIP project WQ-80021 and the
fund reserve will be reimbursed with the SRF loan principal.
Repayment of the sludge dewatering 30-year SRF loan is expected to begin in
2020, a year after construction completion, and would be included as an expense
in the Fiscal Year 2020 Wastewater Treatment Fund operating budget.
Approximately 62% of the fund’s operating expenses are offset by revenue from
the RWQCP partner agencies.
Policy Implications
Adoption of the resolutions, amendment of the 2009 SRF loan and approval of the
addendum and amendments to the partner agencies’ agreements do not
represent a change in existing policies.
Environmental Review
The City of Palo Alto performed an environmental review for the sludge
dewatering and loadout facility under provisions of the California Environmental
Quality Act (CEQA). An Initial Study/Mitigated Negative Declaration was prepared
for the project and approved by Council on March 28, 2016 (CMR ID# 6424).
Adoption of the SRF application and funding resolutions, amendment of the 2009
SRF agreement and approval of the addendum and amendments to the partner
agencies’ agreements are not actions that require CEQA review. These actions do
not meet the definition of a project for the purposes of CEQA, under Public
Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5), because
they are administrative governmental activities which will not cause a direct or
indirect physical change in the environment.
Attachments:
Attachment A: Resolution Authorizing FINAL (PDF)
Attachment B: Resolution Reimbursement (PDF)
Attachment C: Resolution Pledged Revenue (PDF)
Attachment D: Amendment 1 2009 SRF Loan Agreemnt (DOCX)
City of Palo Alto Page 8
Attachment E: Amendment 8 Palo Alto--Mountain View--Los Altos (PDF)
Attachment F: Amendment 6 EPASD (PDF)
Attachment G: Amendment 4 Stanford University (DOCX)
NOT YET APPROVED
160928 jb 6053825 1
Resolution No. ______
Resolution of the Council of the City of Palo Alto Approving the
City’s Submittal of a Financial Assistance Application to the State Water
Resources Control Board for Capital Improvement Projects Applicable
to the Regional Water Quality Control Plant
R E C I T A L S
A. The State of California State Water Resources Control Board (the “Board”) has a
funding program entitled “Clean Water State Revolving Fund,” and pursuant to this program,
the Board makes funds available for various capital water-related projects.
B. The City of Palo Alto (the “City”) owns and operates the Regional Water Quality
Control Plant (the “Plant”), and engages in various capital improvement projects to improve
and maintain the Plant.
C. The City wishes to apply for State Revolving Fund funds to cover the cost of certain
capital improvement projects identified in the attached Long Range Facility Plan, Exhibit A.
D. The first State Revolving Fund application the City submits will cover the sludge
dewatering and load-out facility construction project. City staff anticipates seeking multiple
State Revolving Fund applications for other capital improvement projects identified in the Long
Range Facility Plan, under the authority granted by Council via this resolution.
The Council of the City of Palo Alto RESOLVES as follows:
SECTION 1. The Council hereby finds that it is in the City and the public’s interest in the
health, safety and welfare of the community to file Financial Assistance Application(s) with the
Board to seek funds made available under the State Revolving Fund for any of the CIP projects
listed in Exhibit A.
SECTION 2. The Council hereby authorizes and directs the City Manager or his designee,
the Director of Public Works or the Manager of the Plant, to:
(a) File and sign, for and on behalf of the City of Palo Alto, a Financial Assistance
Application for a financing agreement from the Board for the planning, design, and construction
of projects identified in the Plant’s Long Range Facility Plan, Exhibit A.
(b) Provide the assurances, certifications, and commitments required for the financial
assistance application, including executing a financial assistance agreement from the Board and
any amendments or changes thereto.
(c) Represent the City in carrying out the City’s responsibilities under the financing
agreement, including certifying disbursement requests on behalf of the city and compliance
with applicable state and federal laws.
NOT YET APPROVED
160928 jb 6053825 2
SECTION 3. The Council finds that the filing of a Financial Assistance Application with
the State Water Resources Control Board does not constitute a project requiring California
Environmental Quality Act (CEQA) review. This action does not meet the definition of a project
under Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5), because
it is an administrative governmental activity which will not cause a direct or indirect physical
change in the environment. An Initial Study/Mitigated Negative Declaration was prepared for
the sludge dewatering and loadout facility project and approved by Council on March 28, 2016
(Staff Report ID# 6424). Implementation of the primary sedimentation tanks, fixed film
reactors, and the laboratory/environmental service building projects is subject to future CEQA
analysis.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
__________________________ _____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
___________________________ _____________________________
Senior Deputy City Attorney City Manager
_____________________________
Director of Public Works
_____________________________
Director of Administrative Services
NOT YET APPROVED
160928 jb 6053826
Resolution No. _________
Resolution of the Council of the City of Palo Alto Authorizing the Reimbursement
of Funding for the Regional Water Quality Control Plant Sludge Dewatering and
Loadout Facility Project from the State Water Resource Control Board
R E C I T A L S
A. The City of Palo Alto (the “City”) desires to finance the costs of constructing and/or
reconstructing certain public facilities and improvements relating to its water and wastewater
system, including certain treatment facilities, pipelines and other infrastructure (the "Project").
B. The City intends to finance the construction and/or reconstruction of the Project or
portions of the Project with moneys ("Project Funds") provided by the State of California, acting
by and through the State Water Resources Control Board (State Water Board).
C. The State Water Board may fund the Project Funds with proceeds from the sale of
obligations the interest upon which is excluded from gross income for federal income tax
purposes (the "Obligations").
D. Prior to either the issuance of the Obligations or the approval by the State Water
Board of the Project Funds the City has incurred certain capital expenditures (the
"Expenditures") with respect to planning and design of the Project from available moneys of the
City.
E. The City has determined that those moneys to be advanced on and after the date
hereof to pay the Expenditures are available only for a temporary period and it is necessary for
the State Water Board to reimburse the City for the Expenditures from the proceeds of the
Obligations.
NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES as follows:
SECTION 1. The City hereby states its intention and reasonably expects to reimburse
Expenditures paid prior to the issuance of the Obligations or the approval by the State Water
Board of the Project Funds.
SECTION 2. The reasonably expected maximum principal amount of the Project Funds
is $30,000,000.
SECTION 3. This resolution is being adopted no later than 60 days after the date on
which the City will expend moneys for the construction portion of the Project costs to be
reimbursed with Project Funds.
SECTION 4. Each City expenditure will be of a type properly chargeable to a capital
account under general federal income tax principles.
NOT YET APPROVED
160928 jb 6053826
SECTION 5. To the best of our knowledge, the City is not aware of the previous
adoption of official intents by the City that have been made as a matter of course for the
purpose of reimbursing expenditures and for which tax-exempt obligations have not been
issued.
SECTION 6. This resolution is adopted as official intent of the City in order to comply
with Treasury Regulation §1.150-2 and any other regulations of the Internal Revenue Service
relating to the qualification for reimbursement of Project costs.
SECTION 7. All the recitals in this Resolution are true and correct and this City so finds,
determines and represents.
SECTION 8. The Council finds that its authorization of funding reimbursement does not
constitute a project requiring review under the California Environmental Quality Act (CEQA) or
CEQA Guidelines. This action does not meet the definition of a project under Public Resources
Code Section 21065 and CEQA Guidelines Section 15378(b)(5), because it is an administrative
governmental activity which will not cause a direct or indirect physical change in the
environment.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
_________________________ ______________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
__________________________ ______________________________
Senior Deputy City Attorney City Manager
______________________________
Director of Public Works
______________________________
Director of Administrative Services
NOT YET APPROVED
160928 jb 6053827 1
Resolution No. _____
Resolution of the Council of the City of Palo Alto Establishing One or
More Pledged Sources of Revenue For Repayment of Funding Pursuant
to The Federal Clean Water Act Amendments
R E C I T A L S
A. The City of Palo Alto (the “City”) desires to finance the costs of planning, design,
and/or construction of certain public facilities and improvements relating to its wastewater
system, including the planning/design of primary sedimentation tanks, fixed film reactors, and
the laboratory/environmental service building, and the construction of a sludge treatment and
load-out facility (the “Projects”) that were identified in the Regional Water Quality Control
Plant’s Long Range Facility Plan.
B. The City intends to finance the planning, design, and/or construction of the
Projects or portions of the Projects with moneys (“Project Funds”) provided by the State of
California, acting by and through the State Water Resources Control Board (the “Water Boards”).
C. Section 603(d)(1)(C) of the Federal Clean Water Act Amendments require each
financing recipient to establish one or more pledged sources of revenue for Clean Water State
Revolving fund (CWSRF) financial assistance.
D. Revenue will be considered pledged when the City adopts a resolution
committing a source of funds for repayment.
NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES as follows:
SECTION 1. The City of Palo Alto hereby pledges Net Revenues of its Wastewater
Treatment enterprise fund to repayment of any and all Clean Water State Revolving Fund
financing incurred for CWSRF Project No. 8104, including the planning/design of primary
sedimentation tanks, fixed film reactors, and a laboratory/environmental service building, and
CWSRF Project No. 8091-110, including the design and construction of a sludge dewatering and
load-out facility. Net Revenues of the City’s Wastewater Treatment enterprise, and other terms
relevant to this action, are defined as follows:
"Net Revenues" means, with respect to the Wastewater Treatment enterprise, for
any period of computation, the amount of the Gross Revenues received from the Wastewater
Treatment enterprise during such period, less the amount of Maintenance and Operation Costs
of the Wastewater Treatment enterprise becoming payable during such period.
"Gross Revenues" means, for any period of computation, all gross charges received
for, and all other gross income and revenues derived by the City from, the ownership or
operation of the Wastewater Treatment enterprise or otherwise arising from the Wastewater
Treatment enterprise during such period, including but not limited to (a) all Charges received by
NOT YET APPROVED
160928 jb 6053827 2
the City for use of the Wastewater Treatment enterprise, (b) all receipts derived from the
investment of funds, (c) transfers from (but exclusive of any transfers to) any stabilization
reserve funds, and (d) all moneys received by the City from other entities whose customers are
served pursuant to contracts between those entities and the City.
"Maintenance and Operation Costs" means the reasonable and necessary costs
spent or incurred by the City for maintaining and operating the Wastewater Treatment
enterprise, calculated in accordance with sound accounting principles, including the cost of
supply of water, gas and electric energy under contracts or otherwise, the funding of
reasonable reserves, and all reasonable and necessary expenses of management and repair and
other expenses to maintain and preserve the Wastewater Treatment enterprise in good repair
and working order, and including all reasonable and necessary administrative costs of the City
attributable to the Wastewater Treatment enterprise and any financing instruments incurred to
finance improvements to the Wastewater Treatment enterprise, such as salaries and wages and
the necessary contribution to retirement of employees, overhead, insurance, taxes (if any),
expenses, compensation and indemnification of any bond trustee or other lender, and fees of
auditors, accountants, attorneys or engineers, and including all other reasonable and necessary
costs of the City or charges required to be paid by it to comply with the terms of any financing
instrument related to the Wastewater Treatment enterprise, but excluding depreciation,
replacement and obsolescence charges or reserves therefor and amortization of intangibles or
other bookkeeping entries of a similar nature.
"Charges" means fees, tolls, assessments, rates and rentals prescribed under
applicable law by the City Council for the services and facilities of the Wastewater Treatment
enterprise.
This pledged source of revenue shall remain in effect until such financing is fully
discharged unless modification or change of such dedication is approved in writing by the State
Water Resources Control Board.
SECTION 2: The Council’s pledge of the revenues to repay State Revolving Fund
financing for the above-referenced projects does not meet the definition of a project for the
purposes of the California Environmental Quality Act, under Public Resources Code Section
21065 and CEQA Guidelines Section 15378(b)(5), because it is an administrative governmental
activity which will not cause a direct or indirect physical change in the environment. Council
approved an Initial Study/Mitigated Negative Declaration for the sludge-dewatering and
loadout facility project on March 28, 2016 (Staff Report ID# 6424).
/ /
/ /
/ /
/ /
NOT YET APPROVED
160928 jb 6053827 3
Implementation of the primary sedimentation tanks, fixed film reactors, and the
laboratory/environmental service building projects is subject to future CEQA analysis.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
_________________________ ______________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
__________________________ ______________________________
Senior Deputy City Attorney City Manager
______________________________
Director of Public Works
______________________________
Director of Administrative Services
Attachment D
AMENDMENT NO. 1 TO
PROJECT FINANCE AGREEMENT
STATE REVOLVING FUND PROJECT NO. C-06-5044-110
AGREEMENT NO. 09-814-550
This Amendment No. 1 to Project Finance Agreement (including all exhibits and attachments
hereto, this “Amendment No. 1”) is dated as of ____, 2016, and is by and between the State
Water Resources Control Board, an administrative and regulatory agency of the State of
California (the “State Water Board”), and the City of Palo Alto, a charter city duly organized and
existing under the laws of the State of California (the “Recipient”).
WITNESSETH
WHEREAS, the State Water Board and the Recipient previously entered into Project Finance
Agreement No. 09-814-550 (the “Original Agreement”) to provide financing for the Project
described therein;
WHEREAS, the Original Agreement provides that the Recipient’s Obligation under the Original
Agreement is secured by a lien on and pledge of Net Revenues in priority as specified in Exhibit
F to the Original Agreement;
WHEREAS, Exhibit D of the Original Agreement provides that that the Recipient’s obligations
under the Original Agreement shall be secured on a parity with the outstanding 1999 Series A
Revenue Bonds;
WHEREAS, the State Water Board and the Recipient wish to amend Exhibits D and F to correct
the priority relationship of the Obligation to other System Obligations;
NOW, THEREFORE, in consideration of the premises and of the mutual representations,
covenants and agreements herein set forth, the State Water Board and the Recipient, each
binding itself, its successor and assigns, do mutually promise, covenant and agree as follows:
ARTICLE I
DEFINITIONS
All capitalized terms used in this Amendment No. 1 and not defined in this Amendment No. 1
have the meaning given such terms in the Original Agreement.
ARTICLE II
AMENDMENT OF THE ORIGINAL AGREEMENT
2.1 Section D of the Original Agreement is hereby amended and restated in its entirety as
shown on Attachment 1.
2.2 Section F of the Original Agreement is hereby amended and restated in its entirety as
shown on Attachment 2.
ARTICLE III
MISCELLANEOUS
3.1 In the event of any conflict between the Original Ag reement and this Amendment No. 1,
the terms of this Amendment No. 1 shall govern. Otherwise, the Original Agreement shall
remain in full force and effect.
3.2 This contract is governed by and shall be interpreted in accordance with the laws of the
State of California.
3.3 The State Water Board and the Recipient hereby agree that any action arising out of this
Amendment No. 1 shall be filed and maintained in the Superior Court in and for the County of
Sacramento, California, or in the United States District Court in and for the Eastern District of
California.
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto.
CITY OF PALO ALTO
By:
Name:
Title:
Date:
STATE WATER RESOURCES CONTROL BOARD
By:
Name:
Title:
Date:
City of Palo Alto
Amendment No. 1 to
Agreement No.: 09-814-550
Project No.: C-06-5044-110
Attachment 1
AMENDMENT OF EXHIBIT D
Exhibit D of the Original Agreement is hereby amended and restated in its entirety as follows:
EXHIBIT D -- SPECIAL CONDITIONS
Special condition as follows:
D.1 The financing agreement shall be subordinate to the outstanding 1999 Series A
Revenue Bonds; and
D.2 The financing agreement shall be subordinate to the outstanding 1995 Series A
Revenue Bonds; and
D.3 The City of Palo Alto shall fund a reserve fund of one year’s debt service and maintain it
throughout the term of the financing agreement.
Attachment 2
AMENDMENT OF EXHIBIT F
Exhibit F of the Original Agreement is hereby amended and restated in its entirety as follows:
EXHIBIT F -- SCHEDULE OF SYSTEM OBLIGATIONS
Except for the following and the Obligation evidenced by this Agreement, the Recipient certifies
that it has no outstanding System Obligations:
The following outstanding debt is senior to the Obligation:
Title
Interest
Rate
Total
Amount
Amount
Remaining
End
Date
1995 Utility
Revenue Bonds
5-0-6.25% $8,640,000 $5,650,000 June 1, 2020
1999 Utility
Revenue Bonds
3.25-5.25% $17,735,000 $14,670,000 June 1, 2024
The following outstanding debt is on parity with the Obligation:
Title
Interest
Rate
Total
Amount
Amount
Remaining
End
Date
Mountain
View/Moffett
Area Reclaimed
Water Pipeline
Project SRF
Contract #07-
814-550-0
Project #C-06-
4132-110
0%* $9,000,000 $9,000,000 June 30, 2029
* Local Match Financing
The following outstanding debt is subordinate to the Obligation:
Title
Interest
Rate
Total
Amount
Amount
Remaining
End
Date
Not Applicable
ADDENDUM NO. EIGHT TO THE BASIC AGREEMENT
BETWEEN THE CITY OF PALO ALTO, THE CITY OF MOUNTAIN VIEW AND THE
CITY OF LOS ALTOS FOR THE ACQUISITION, CONSTRUCTION AND
MAINTENANCE OF A JOINT SEWER SYSTEM
This Addendum No. Eight (8) to the Basic Agreement for the Acquisition, Construction
and Maintenance of a Joint Sewer System is made and entered into on
_______________________, by and among the CITY OF PALO ALTO (“Palo Alto”), the CITY
OF MOUNTAIN VIEW (“Mountain View”), and the CITY OF LOS ALTOS (“Los Altos”)
(individually, a “Party”, collectively, the “Parties”), all municipal corporations under the laws of
the State of California.
R E C I T A L S:
A. The Parties have entered into that certain Basic Agreement Between the City of
Palo Alto, the City of Mountain View and the City of Los Altos for the Acquisition,
Construction, and Maintenance of a Joint Sewer System, executed on October 10, 1968, as
amended by the Addenda described below (collectively, the “Basic Agreement”). The Basic
Agreement has been amended seven times by addenda, as follows: Addendum No. One (1) to
Basic Agreement Between the Cities of Palo Alto, Mountain View, and Los Altos for
Acquisition, Construction and Maintenance of a Joint Sewer System, dated as of December 5,
1977; Addendum No. Two (2) to Basic Agreement Between the Cities of Palo Alto, Mountain
View, and Los Altos for Acquisition, Construction and Maintenance of a Joint Sewer System
dated as of January 14, 1980; Addendum No. Three (3) to an Agreement By and Between the
Cities of Palo Alto, Mountain View, and Los Altos for Acquisition, Construction and
Maintenance of a Joint Sewer System, dated as of April 9, 1985; Addendum No. Four (4) to the
Agreement By and Between the Cities of Mountain View, Los Altos, and Palo Alto as further
amended and dated May 30, 1991; Addendum No. Five (5) to Basic Agreement Between the
Cities of Palo Alto, Mountain View, and Los Altos for Acquisition, Construction and
Maintenance of a Joint Sewer System, dated as of July 31, 1992; Addendum No. Six (6) to Basic
Agreement Between the City of Palo Alto, the City of Mountain View, and the City of Los Altos
for Acquisition, Construction and Maintenance of a Joint Sewer System dated as of March 16,
1998; and Addendum No. Seven (7) to Basic Agreement Between the City of Palo Alto, the City
of Mountain View, and the City of Los Altos for Acquisition, Construction and Maintenance of a
Joint Sewer System dated as of April 15, 2009 (collectively, the “Addenda”).
B. Palo Alto owns and operates the sanitary sewerage treatment and disposal works
and system (the “Joint System”) pursuant to the Basic Agreement, and is responsible for making
capital additions to the Joint System. Under the Basic Agreement, any major capital additions
for the replacement of obsolete or worn-out units require an agreement by the Parties amending
the Basic Agreement. The Parties now desire to agree upon and implement projects to improve
the Joint System by planning and designing the rehabilitation of the primary sedimentation tanks,
the fixed film reactors, a new laboratory/Environmental Service building, and constructing and
implementing a sludge dewatering and load-out facility (individually, “Project”, collectively, the
“Projects”). The Parties also agree to provide for the sharing of costs associated with the
Projects. The Projects will become part of the regional water quality control plant (the “Plant”),
which is owned and operated by Palo Alto as part of the Joint System.
NOW, THEREFORE, in consideration of the terms, conditions and covenants set forth in this
Addendum No. Eight (8), the Basic Agreement is hereby amended, as follows:
Section 2. Paragraph 38 is hereby added to the Basic Agreement to read, as follows:
“38. IMPLEMENTATION OF THE PROJECTS. Palo Alto, Mountain View,
and Los Altos hereby approve the Projects for planning/design of the primary
sedimentation tanks, the fixed film reactors, a new laboratory/Environmental Service
building, and the design/construction of a sludge dewatering and load-out facility (the
“Projects”). Each Party shall pay its share of the Projects Costs, in proportion to the
capacity it owns in the Joint System or portion thereof as shown in Exhibit “H” to
Addendum No. Six (6) to the Basic Agreement. “Project Costs” means all costs
incurred in connection with the planning, design, construction and implementation of
the Projects. Without limiting the generality of the foregoing, Project Costs shall
include, but not be limited to: design, engineering, and other consultants’ fees and
costs, including fees incurred pursuant to agreements with engineers, contractors and
other consulting, design and construction professionals; environmental analysis and
approval costs, including cost of compliance with the California Environmental
Quality Act; deposits, applicable permit fees; all costs to apply for and secure
necessary permits from all required regional, state, and federal agencies; plan check
fees, and inspection fees; construction costs; initial maintenance; attorneys’ fees and
costs; insurance; interest from the date of payment on any contracts.
The Parties authorize Palo Alto to pursue State Revolving Fund (“SRF”) loans from
the State Water Resources Control Board (“SWRCB”) to fund the costs of the
Projects. The maximum amount of the SRF planning/design loan sought for the
planning/design of the primary sedimentation tanks, the fixed film reactors, and a new
laboratory/Environmental Service building will be $6.75 million. The maximum
amount of the SRF construction loan sought for the design/construction of a sludge
dewatering and load-out facility will be $28 million. The loan will have a thirty-year
repayment term. The repayments of the SRF loan shall be treated in the same manner
as debt services under the Basic Agreement and its Addenda, and repaid by the
Parties in the same proportionate shares as shown on Exhibit “H” to Addendum No.
Six (6) to the Basic Agreement. The Parties further agree that, if necessary, each
Party shall propose to raise their sewer use rates for the repayment of the SRF loan,
operations, and/or maintenance of the Projects, following any appropriate process
executed under California Constitution article XIII C and D (Proposition 218).
If the SWRCB terminates its loan commitment unexpectedly following execution of
the planning and/or construction contract(s) for the Projects or the Project, Palo Alto
shall notify the Parties promptly. Following notification of the termination of the
SRF, the Parties shall meet in a timely manner to discuss alternative funding sources
and strategies for completion of the Projects. If the Parties are unable to agree on
new funding sources in a timely manner, then Palo Alto shall have the right to
terminate the Project or the Projects.
The Parties shall remain responsible for Project costs and loans incurred, whether
before or after termination of the Project/Projects, in connection with the termination
of the Project planning/design/construction contract, in the same proportion to each
organization’s share of plant capacity, as stated in Exhibit “H” to Addendum No. Six
(6) of the Basic Agreement. Total project costs shall not exceed the authorized
maximum SRF loan approved by Parties without prior approval of each party’s
governing body. Unless earlier terminated, the obligations and responsibilities of the
Parties shall commence with the execution of this addendum No. Eight and be in
force for the term of the SRF loan.
Mountain View and Los Altos shall pay their respective shares of any Project Costs
within thirty (30) business days of receipt of the quarterly billing statement sent by
Palo Alto. Palo Alto shall not send more than one invoice in any thirty-day period. If
a Party disputes the correctness of an invoice, it shall pay the invoice in full and the
dispute shall be resolved after payment in accordance with Section 19 of the Basic
Agreement, and shall not offset against any payment due.
Section 1. Paragraph 27. TERM. is amended to read as follows:
The Basic Agreement shall commence upon execution and will terminate on
December 31, 2060, provided that any party hereto who wishes to withdraw from the
Basic Agreement shall tender written notice of withdrawal at least ten (10) years
preceding the date of withdrawal.
Section 3. Except as modified herein, the Basic Agreement shall remain unchanged, and is
hereby ratified and confirmed.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have by their duly authorized representatives
executed this Addendum as of the date first written above.
ATTEST:
__________________________________
City Clerk
APPROVED AS TO FORM:
__________________________________
Deputy City Attorney
APPROVED AS TO CONTENT:
__________________________________
City Manager
CITY OF PALO ALTO
By: __________________________________
Mayor
ATTEST:
__________________________________
City Clerk
APPROVED AS TO FORM:
__________________________________
City Attorney
APPROVED AS TO CONTENT:
__________________________________
FINANCIAL APPROVAL:
________________________________
Finance and Administrative Services Director
CITY OF MOUNTAIN VIEW
By: __________________________________
City Manager
ATTEST:
__________________________________
City Clerk
APPROVED AS TO FORM:
__________________________________
City Attorney
APPROVED AS TO CONTENT:
__________________________________
City Manager
CITY OF LOS ALTOS
By: __________________________________
Mayor
AMENDMENT NO. SIX TO
CONTRACT RESTATEMENT AND AMENDMENT NO. C237
BETWEEN THE CITY OF PALO ALTO AND
THE EAST PALO ALTO SANITARY DISTRICT
This Amendment No. Six (6) to the Contract Restatement and Amendment No. C237 is
made and entered into on _______________________, by and between the CITY OF PALO
ALTO, a chartered municipal corporation of the State of California (the “City”) and East Palo
Alto Sanitary District, a public corporation under the laws of the State of California (the
“District”) (individually, a “Party”, collectively, the “Parties”).
R E C I T A L S:
A. On March 11, 1940, the Parties entered into a contract, “Contract Restatement and
Amendment No. C237,” whereby the City agreed to provide treatment of the District’s
wastewater, which contract was subsequently amended by amendments dated September
10, 1963, June 25, 1964, and May 1971 (the “Original Agreement”);
B. On October 10, 1968, the City joined with the cities of Mountain View and Los Altos to
fund the construction, operation, and maintenance of a regional sewage treatment plant
(the “Treatment Plant”) that is part of a sewerage system (“System”), owned and operated
by the City;
C. In May 1971, the City and District agreed that the District’s share of the
primary/secondary design capacity of the Treatment Plant would be 2.25 mgd (ADWF).
The Treatment Plant was subsequently expanded to include tertiary treatment, and the
District’s share of tertiary capacity was established at 1.9 mgd (ADWF);
D. On March 16, 1989, the Parties restated and amended the Original Agreement (the “1989
Agreement”) to provide for the District’s participation in financing an expansion of the
Treatment Plant’s capacity from 35.0 primary/secondary capacity to 38.0 mgd (ADWF)
(40.0 AAF) and from a tertiary capacity of 30.6 mgd to 38.0 mgd ADWF (40.0 AAF);
E. On May 30, 1989, the Parties amended the 1989 Agreement to revise the billing and
payment provisions in Paragraph 6.b of the 1989 Agreement (“Amendment No. 1”);
F. On December 18, 1989, the Parties amended the 1989 Agreement to provide specific
measures and procedures for complying with federal and state laws and regulations
regarding wastewater collection, transmission, treatment and disposal in Paragraph 9 of
the 1989 Agreement (“Amendment No. 2”);
G. On December 7, 1998, the Parties amended the 1989 Agreement to add Paragraph 26 to
permit the rehabilitation of the City’s incinerators (“Amendment No. 3”);
H. On November 19, 2003, the Parties executed an agreement entitled “Settlement and
Release Agreement” and amended Paragraphs 6.a and 8 of the 1989 Agreement on June
2, 2005 to be consistent with the Settlement and Release Agreement (“Amendment No.
4”);
I. On March 19, 2009, the Parties amended the 1989 Agreement to add Paragraph 28,
which provided for the funding, design, and construction of an ultra violet treatment
system at the Treatment Plan (“Amendment No. 5”). The 1989 Agreement and
Amendment Nos. 1-5 are referred to collectively, herein as the “Contract.”
J. The City owns and operates the System pursuant to the Contract, is responsible for
making capital additions to the System, and intends to renovate the Treatment Plant. The
Parties desire to amend the Contract to clarify the indemnity provision applicable to the
Contract and to set forth the terms of their agreement for the sharing of costs associated
with the planning and design of the rehabilitation of the primary sedimentation tanks, the
fixed film reactors, a new laboratory/Environmental Service building, and the design and
construction of a sludge dewatering and load-out facility (individually, the “Project”,
collectively, the “Projects”). The Projects are set forth in more detail in Exhibit I,
attached to this Amendment No. Six. The Projects will become part of the Treatment
Plant, which is owned and operated by the City as part of the System.
NOW, THEREFORE, in consideration of the terms, conditions and covenants set forth in this
Amendment No. Six (6), the Contract is hereby amended as follows:
Section 1. Paragraph 29 is hereby added to the Contract to read, as follows:
“29. IMPLEMENTATION OF THE PROJECTS. City and District hereby
approve the Projects. Each Party shall pay its share of Project Costs for the Projects
in proportion as it owns capacity in the Joint System or portion thereof, as shown in
Exhibit “H” to Amendment No. Three (3) to the Contract. “Project Costs” means all
costs incurred in connection with the planning, design, construction and
implementation of the Projects. Without limiting the generality of the foregoing,
Project Costs shall include, but not be limited to: design, engineering, and other
consultants’ fees and costs, including fees incurred pursuant to agreements with
engineers, contractors and other consulting, design and construction professionals;
environmental analysis and approval costs, including cost of compliance with the
California Environmental Quality Act; deposits, applicable permit fees; all costs to
apply for and secure necessary permits from all required regional, state, and federal
agencies; plan check fees, and inspection fees; construction costs; initial maintenance;
attorneys’ fees and costs; insurance; interest from the date of payment on any
contracts.
The Parties authorize the City to pursue State Revolving Fund (“SRF”) loans from the
State Water Resources Control Board (“SWRCB”) to fund the costs of the Projects.
The maximum amount of the SRF planning/design loan sought for the
planning/design of the primary sedimentation tanks, the fixed film reactors, and a new
laboratory/Environmental Service building will be $6.75 million. The maximum
amount of the SRF construction loan sought for the design/construction of a sludge
dewatering and load-out facility will be $28 million. The loan will have a thirty year
repayment term. The SRF loan shall be repaid in the same proportionate share, as
shown on Exhibit “H” to Amendment No. Three (3) to the Contract. The Parties
further agree that, if necessary, each Party shall raise their sewer use rates for the
repayment of the SRF loan, operations, and/or maintenance of the Project, following
any appropriate process under California Constitution article XIII C and D
(Proposition 218).
If the SWRCB terminates its loan commitment unexpectedly following execution of
the planning and/or construction contract(s) for a Project or the Projects, Palo Alto
shall notify the Parties promptly. Following notification of the termination of the
SRF, the Parties shall meet in a timely manner to discuss alternative funding sources
and strategies for completion of the Projects. If the Parties are unable to agree on
new funding sources in a timely manner, then Palo Alto shall have the right to
terminate the Project or the Projects immediately.
The Parties shall remain responsible for Project Costs and loans incurred, whether
before or after termination of the Project, in connection with the termination of the
Project construction contract, in the same proportion to each organization’s share, as
shown on Exhibit “H” to Amendment No. Three (3) to the Contract. Unless earlier
terminated, the obligations and responsibilities of the Parties shall commence with the
execution of this amendment and be in force for the life of the SRF loan.
Pursuant to Paragraph 6.c of the Contract, the City will supply the District with all
information supporting the City’s determinations regarding the Project Costs,
including but not limited to, information relating to the computation of the relative
shares of each organization. The City will make available all such information
(historical and current) to the District’s auditors, on request.
District shall pay its share of any Project Costs within ten (10) business days of
receipt of the quarterly billing statement sent by the City. If District disputes the
correctness of an invoice, it shall pay the invoice in full and the dispute shall be
resolved after payment in accordance with the Contract, and shall not offset against
any payment due. The Parties shall undertake any dispute resolution in accordance
with Paragraph 10 of the Contract.
Section 2. Paragraph 19 of the Contract and Paragraph 7 of Amendment No. 2 are hereby
deleted and replaced with the following:
Indemnity. Each of the Parties shall defend, indemnify and hold the other party harmless
of and from all claims, liabilities, actions, causes of action, proceedings, damages, fines,
penalties, costs, expenses, attorneys’ fees or any other forms of pecuniary or non-
pecuniary relief which result from:
(i) That party's violation of laws and regulations governing the collection,
transmission, treatment and disposal of wastewater or wastewater byproducts,
including, without limitation, laws and regulations governing disruption of
treatment processes or operations, degradation of sludge quality, and NPDES
permit violations attributable to the conduct of that party or other persons,
including industrial waste dischargers for whom that party exercises regulatory
responsibility.
(ii) That party's failure to exercise reasonable care in the operation and
maintenance of its wastewater facilities.
Section 3. Except as modified herein, the Contract shall remain unchanged, and is hereby
ratified and confirmed.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have by their duly authorized representatives
executed this Amendment No. Six to the Contract Restatement and Amendment No. C237
Between the City of Palo Alto and The East Palo Alto Sanitary District as of the date first written
above.
ATTEST:
__________________________________
City Clerk
APPROVED AS TO FORM:
__________________________________
Deputy City Attorney
APPROVED AS TO CONTENT:
__________________________________
City Manager
CITY OF PALO ALTO
By: __________________________
Mayor
ATTEST:
__________________________________
APPROVED AS TO FORM:
__________________________________
Attorney
APPROVED AS TO CONTENT:
__________________________________
EAST PALO ALTO SANITARY DISTRICT
By: __________________________
Name: .
Title: .
EXHIBIT I
PROJECT DESCRIPTION / DEPICTION
ATTACHMENT G
AMENDMENT NO. FOUR TO CONTRACT NO. C869
BETWEEN THE CITY OF PALO ALTO AND THE BOARD OF
TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY
This Amendment No. Four (4) to the Contract is made and entered into on
_______________________, by and between the CITY OF PALO ALTO, a chartered city and a
chartered municipal corporation of the State of California (“City”) and the BOARD OF
TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY, a body having corporate
powers under the laws of the State of California (“Stanford”) (individually, a “Party”;
collectively, the “Parties”).
R E C I T A L S:
A. The Parties have entered into that certain Contract Between Palo Alto and
Stanford, executed on November 30, 1956, as amended by the Addendum and Amendments
described below (collectively, the “Contract”). The Contract has been amended three times as
follows: Addendum No. One (1) to the Contract Between the City of Palo Alto and Stanford,
dated as of June 11, 1971; Amendment No. Two (2) to the Contract Between the City of Palo
Alto and Stanford, dated as of November 2, 1998; and Amendment No. Three (3) to the
Contract Between the City of Palo Alto and Stanford, dated as of March 16, 2009.
B. Palo Alto owns and operates the sewerage system (the “System”) pursuant to the
Contract, and is responsible for making capital additions to the System. Under the Contract,
prior to commencement of construction of any capital additions or enlargements of the System,
City and Stanford shall agree upon the terms of payment by Stanford of its proportionate cost.
The Parties now desire to agree upon the sharing of costs associated with the planning and design
of the rehabilitation of the primary sedimentation tanks, the fixed film reactors, a new
laboratory/Environmental Service building, and the design and construction of a sludge
dewatering and load-out facility (individually, the “Project”, collectively, the “Projects”). The
Projects will become part of the regional water quality control plant (the “Plant”), which is
owned and operated by Palo Alto as part of the System.
NOW, THEREFORE, in consideration of the terms, conditions and covenants set forth in this
Amendment No. Four (4), the Contract is hereby amended as follows:
Section 1. Paragraph 24 is hereby added to the Contract to read, as follows:
“24. IMPLEMENTATION OF THE PROJECTS. Palo Alto and Stanford hereby
approve the planning/design of the rehabilitation of the primary sedimentation tanks,
the fixed film reactors, a new laboratory/Environmental Service building, and the
design/construction of a sludge dewatering and load-out facility (individually, the
“Project”, collectively, the “Projects”). Each Party shall pay its share of the Project
Costs for the Projects in proportion to the capacity it owns in the Joint System or
portion thereof as shown in Exhibit “H” to Amendment No. 2 to the Contract.
“Project Costs” means all costs incurred in connection with the planning, design,
construction and implementation of the Projects. Without limiting the generality of
the foregoing, Project Costs shall include, but not be limited to: design, engineering,
and other consultants’ fees and costs, including fees incurred pursuant to agreements
with engineers, contractors and other consulting, design and construction
professionals; environmental analysis and approval costs, including cost of
compliance with the California Environmental Quality Act; deposits, applicable
permit fees; all costs to apply for and secure necessary permits from all required
regional, state, and federal agencies; plan check fees, and inspection fees;
construction costs; initial maintenance; attorneys’ fees and costs; insurance; interest
from the date of payment on any contracts.
The Parties authorize Palo Alto to pursue State Revolving Fund (“SRF”) loans from
the State Water Resources Control Board (“SWRCB”) to fund the costs of the
Projects. The maximum amount of the SRF planning/design loan sought for the
planning/design of the primary sedimentation tanks, the fixed film reactors, and a new
laboratory/Environmental Service building will be $6.75 million. The maximum
amount of the SRF construction loan sought for the design/construction of a sludge
dewatering and load-out facility will be $28 million. The loan will have a thirty-year
repayment term. The SRF loan shall be repaid by the Parties in the same
proportionate shares as shown on Exhibit “H” to Amendment No. Two to the
Contract.
If the SWRCB terminates its loan commitment unexpectedly following execution of
the planning and/or construction contract(s) for the Project or the Projects, Palo Alto
shall notify the Parties promptly. Following notification of the termination of the
SRF, the Parties shall meet in a timely manner to discuss alternative funding sources
and strategies for completion of the Projects. If the Parties are unable to agree on
new funding sources in a timely manner, then Palo Alto shall have the right to
terminate the Project or Projects immediately.
The Parties shall remain responsible for Project Costs and loans incurred, whether
before or after termination of the Project/Projects, in connection with the termination
of the Project planning/design/construction contract(s), in the same proportion to each
organization’s share, as shown on Exhibit “H” to Amendment No. Two (2) to the
Contract. Unless earlier terminated, the obligations and responsibilities of the Parties
shall commence with the execution of this Amendment No. Four and be in force for
the term of the SRF loan.
Stanford shall pay its share of any Project Costs within ten (10) business days of
receipt of the annual billing statement sent by Palo Alto. If Stanford disputes the
correctness of an invoice, it shall pay the invoice in full and the dispute shall be
resolved after payment in accordance with the Contract, and shall not offset against
any payment due.
Section 2. Except as modified herein, the Contract shall remain unchanged, and is hereby
ratified and confirmed.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have by their duly authorized representatives
executed this Amendment as of the date first written above.
ATTEST:
__________________________________
City Clerk
APPROVED AS TO FORM:
Deputy City Attorney
APPROVED AS TO CONTENT:
__________________________________
City Manager
CITY OF PALO ALTO
By: __________________________________
Mayor
ATTEST:
__________________________________
APPROVED AS TO FORM:
__________________________________
Attorney
APPROVED AS TO CONTENT:
__________________________________
THE BOARD OF TRUSTEES OF THE LELAND
STANFORD JUNIOR UNIVERSITY
By: __________________________________
Name: __________________________________
Title: __________________________________
160928 jb 6053827 1
Resolution No. 9631
Resolution of the Council of the City of Palo Alto Establishing One or
More Pledged Sources of Revenue For Repayment of Funding Pursuant
to The Federal Clean Water Act Amendments
R E C I T A L S
A. The City of Palo Alto City
and/or construction of certain public facilities and improvements relating to its wastewater
system, including the planning/design of primary sedimentation tanks, fixed film reactors, and
the laboratory/environmental service building, and the construction of a sludge treatment and
loadout facility that were identified in the Regional Water Quality Control
Long Range Facility Plan.
B. The City intends to finance the planning, design, and/or construction of the
Projects or portions of the Projects
.
C. Section 603(d)(1)(C) of the Federal Clean Water Act Amendments require each
financing recipient to establish one or more pledged sources of revenue for Clean Water State
Revolving fund (CWSRF) financial assistance.
D. Revenue will be considered pledged when the City adopts a resolution
committing a source of funds for repayment.
NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES as follows:
SECTION 1. The City of Palo Alto hereby pledges Net Revenues of its Wastewater
Treatment enterprise fund to repayment of any and all Clean Water State Revolving Fund
financing incurred for CWSRF Project No. 8104, including the planning/design of primary
sedimentation tanks, fixed film reactors, and a laboratory/environmental service building, and
CWSRF Project No. 8091110, including the design and construction of a sludge dewatering and
loadout facility , and other terms
relevant to this action, are defined as follows:
"Net Revenues" means, with respect to the Wastewater Treatment enterprise, for
any period of computation, the amount of the Gross Revenues received from the Wastewater
Treatment enterprise during such period, less the amount of Maintenance and Operation Costs
of the Wastewater Treatment enterprise becoming payable during such period.
"Gross Revenues" means, for any period of computation, all gross charges received
for, and all other gross income and revenues derived by the City from, the ownership or
operation of the Wastewater Treatment enterprise or otherwise arising from the Wastewater
Treatment enterprise during such period, including but not limited to (a) all Charges received by
DocuSign Envelope ID: 20B08DF8-BEC8-4A2E-94C6-F71DD76B96EF
160928 jb 6053827 2
the City for use of the Wastewater Treatment enterprise, (b) all receipts derived from the
investment of funds, (c) transfers from (but exclusive of any transfers to) any stabilization
reserve funds, and (d) all moneys received by the City from other entities whose customers are
served pursuant to contracts between those entities and the City.
"Maintenance and Operation Costs" means the reasonable and necessary costs
spent or incurred by the City for maintaining and operating the Wastewater Treatment
enterprise, calculated in accordance with sound accounting principles, including the cost of
supply of water, gas and electric energy under contracts or otherwise, the funding of
reasonable reserves, and all reasonable and necessary expenses of management and repair and
other expenses to maintain and preserve the Wastewater Treatment enterprise in good repair
and working order, and including all reasonable and necessary administrative costs of the City
attributable to the Wastewater Treatment enterprise and any financing instruments incurred to
finance improvements to the Wastewater Treatment enterprise, such as salaries and wages and
the necessary contribution to retirement of employees, overhead, insurance, taxes (if any),
expenses, compensation and indemnification of any bond trustee or other lender, and fees of
auditors, accountants, attorneys or engineers, and including all other reasonable and necessary
costs of the City or charges required to be paid by it to comply with the terms of any financing
instrument related to the Wastewater Treatment enterprise, but excluding depreciation,
replacement and obsolescence charges or reserves therefor and amortization of intangibles or
other bookkeeping entries of a similar nature.
"Charges" means fees, tolls, assessments, rates and rentals prescribed under
applicable law by the City Council for the services and facilities of the Wastewater Treatment
enterprise.
This pledged source of revenue shall remain in effect until such financing is fully
discharged unless modification or change of such dedication is approved in writing by the State
Water Resources Control Board.
SECTION 2:
financing for the abovereferenced projects does not meet the definition of a project for the
purposes of the California Environmental Quality Act, under Public Resources Code Section
21065 and CEQA Guidelines Section 15378(b)(5), because it is an administrative governmental
activity which will not cause a direct or indirect physical change in the environment. Council
approved an Initial Study/Mitigated Negative Declaration for the sludgedewatering and
loadout facility project on March 28, 2016 (Staff Report ID# 6424).
/ /
/ /
/ /
/ /
DocuSign Envelope ID: 20B08DF8-BEC8-4A2E-94C6-F71DD76B96EF
160928 jb 6053827 3
Implementation of the primary sedimentation tanks, fixed film reactors, and the
laboratory/environmental service building projects is subject to future CEQA analysis.
INTRODUCED AND PASSED: October 17, 2016
AYES: BERMAN, BURT, DUBOIS, FILSETH, HOLMAN, KNISS, SCHARFF, SCHMID, WOLBACH
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
Senior Deputy City Attorney City Manager
Director of Public Works
Director of Administrative Services
DocuSign Envelope ID: 20B08DF8-BEC8-4A2E-94C6-F71DD76B96EF
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MEMORANDUM
2
TO: UTILITIES ADVISORY COMMISSION
FROM: UTILITIES DEPARTMENT
DATE:
SUBJECT:
FEBRUARY 1, 2017
Amendment to Utilities Rule and Regulation 27, Generating
Facility Interconnections
Attached is the staff report describing the amendment to Utilities Rule and Regulation 27,
Generating Facility Interconnections, including the resolution Council adopted on December 12,
2016.
The main changes to Rules and Regulation 27 include
• Restructuring of Section C, Application and Interconnection Process, to clarify the
interconnection review process and the time line requirements for the interconnection
of a generating facility.
• Addition of Section D.3, Technology Specific Requirements, to explain the requirements
for different generating technologies .
• Addition of Section D.5, Smart Inverter Generating Facility Design and Operating
Requirements, to keep pace with changing inverter technology.
• General modifications to several sections to ensure the Rule conforms to current
technology, helps staff meet customer expectations, and is clear and easy to
understand.
ATTACHMENT
A. Council Staff Report #7435 -Amendment to Utilities Rule and Regulation 27,
Generating Facility Interconnections
PREPARED BY: DEAN BAT~ties Chief Operating Officer
§1~b~ --
C~· DEPARTMENT HEAD:
ED SHIKADA
Utilities General Manager
Page 1of1
City of Palo Alto (ID # 7435)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 12/12/2016
City of Palo Alto Page 1
Summary Title: Amendment to Utilities Rule and Regulation 27, Generating
Facility Interconnection
Title: Adoption of a Resolution Amending Utilities Rule and Regulation 27,
Generating Facility Interconnections
From: City Manager
Lead Department: Utilities
Recommendation
Staff recommends that Council adopt a resolution amending City of Palo Alto Utilities
(“Utilities”) Rule and Regulation 27 Generating Facility Interconnections (Attachment B).
Executive Summary
Utilities’ Rules and Regulations govern utility services in the city and the fees charged for those
services. They are updated as needed to ensure Utilities’ procedures meet industry practices,
standards, and requirements. The recommended amendment adds practices and procedures
to Rule and Regulation 27 for the definition, installation, and interconnection of generating
facilities that are connected to Utilities’ electric distribution system.
Background
There are twenty-nine Utilities Rules and Regulations (Rules) which set forth the conditions
under which the City provides utility services from both the Utilities Department (electric,
natural gas, water, wastewater, fiber optic) and the Public Works Department (refuse, storm
drain). Rule and Regulation 27, Generating Facility Interconnections, describes the
Interconnection, operating and metering requirements for Generating Facilities connected to
the electric distribution system. It was last updated and issued by Council in April 2012.
Discussion
The proposed changes to Rule and Regulation 27 include:
Addition of a “Table of Contents”
Restructuring of Section C, Application and Interconnection Process, to clarify the
interconnection review process and the time line requirements for the interconnection
of a generating facility
ATTACHMENT A
City of Palo Alto Page 2
Addition of Section D.3, Technology Specific Requirements, to explain the requirements
for different generating technologies.
Addition of Section D.5, Smart Inverter Generating Facility Design and Operating
Requirements, to keep pace with changing inverter technology
General modifications to several sections to ensure the Rule conforms to current
technology, helps staff meet customer expectations, and is clear and easy to
understand.
Resource Impact
Approval of changes to Utilities Rule and Regulation 27 will not result in a significant change in
net operating revenues or expenses.
Policy Implications
This recommendation does not represent a change to current City policies.
Environmental Review
The adoption of a resolution amending Utility Rule and Regulation 27 does not constitute a
project requiring review under the California Environmental Quality Act (CEQA) under Public
Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5), because it is an
administrative governmental activity which will not cause a direct or indirect physical change in
the environment.
Attachments:
Attachment A: Resolution Amending Rule and Reg 27 (PDF)
Attachment B: Amended Rule 27 effective December 12, 2016 (PDF)
Attachment C: Rule 27 Redlines (PDF)
Attachment A
NOT YET APPROVED
161108 jb 6053873 1
Resolution No.
Resolution of the Council of the City of Palo Alto Amending Utilities Rule
and Regulation 27 (Generating Facility Interconnections)
R E C I T A L S
A. Pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the Council of the City of
Palo Alto may by resolution adopt rules and regulations governing utility services, fees and charges.
The Council of the City of Palo Alto hereby RESOLVES as follows:
SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utilities Rule and
Regulation 27 (Generating Facility Interconnections) is hereby amended as attached and
incorporated. Utility Rule and Regulation 27, as amended, shall become effective December 12,
2016.
SECTION 2. The adoption of this resolution amending Utilities Rule and Regulation 27 (Generating
Facility Interconnections) is not a project requiring California Environmental Quality Act (CEQA) review,
under California Public Resources Code Sec. 21065, 21080(b)(8), and CEQA Guidelines Section
15378(b)(5), because it is an administrative governmental activity which will not cause a direct or indirect
physical change in the environment.
INTRODUCED AND PASSED: AYES:
NOES: ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
Senior Deputy City Attorney City Manager
Director of Utilities
Director of Administrative Services
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 1
TABLE OF CONTENTS:
A. APPLICABILITY ......................................................................................................................................................... 2
B. GENERAL RULES, RIGHTS AND OBLIGATIONS ................................................................................................. 2
C. APPLICATION AND INTERCONNECTION PROCESS ........................................................................................... 5
1. APPLICATION PROCESS ............................................................................................................................ 5
2. OVERVIEW OF THE INTERCONNECTION REVIEW PROCESS............................................................ 5
3. COMMISSIONING TESTING AND PARALLEL OPERATION............................................................... 10
4. WITHDRAWAL / CANCELLATION ......................................................................................................... 11
D. GENERATING FACILITY DESIGN AND OPERATING REQUIREMENTS ........................................................ 11
1. GENERAL INTERCONNECTION AND PROTECTION FUNCTION REQUIREMENTS ...................... 12
2. PREVENTION OF INTERFERENCE ......................................................................................................... 14
3. TECHNOLOGY SPECIFIC REQUIREMENTS .......................................................................................... 19
4. SUPPLEMENTAL GENERATING FACILITY REQUIREMENTS ........................................................... 20
5. SMART INVERTER GENERATING FACILITY DESIGN AND OPERATING REQUIREMENTS ....... 21
E. INTERCONNECTION FACILITIES AND DISTRIBUTION SYSTEM MODIFICATIONS OWNERSHIP AND
COST ALLOCATION ................................................................................................................................................ 31
1. SCOPE AND OWNERSHIP OF INTERCONNECTION FACILITIES AND DISTRIBUTION SYSTEM
MODIFICATIONS ....................................................................................................................................... 31
2. RESPONSIBILITY OF COSTS OF INTERCONNECTING A GENERATING FACILITY...................... 32
3. INSTALLATION AND FINANCING OF INTERCONNECTION FACILITIES AND DISTRIBUTION
SYSTEM MODIFICATIONS ....................................................................................................................... 32
F. METERING, MONITORING AND TELEMETRY ................................................................................................... 33
1. GENERAL REQUIREMENTS..................................................................................................................... 33
2. METERING BY CPAU ................................................................................................................................ 33
3. NET GENERATION METERING ............................................................................................................... 34
4. POINT OF COMMON COUPLING METERING ....................................................................................... 34
5. TELEMETERING ........................................................................................................................................ 34
6. LOCATION .................................................................................................................................................. 35
7. COSTS OF METERING ............................................................................................................................... 35
ATTACHMENT B
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 2
A. APPLICABILITY
This Rule describes the Interconnection, Metering and operating requirements for Generating
Facilities to be connected to the City of Palo Alto Utilities (CPAU) Electric Distribution System.
In order to provide for uniformity and to encourage the Interconnection of renewable energy
generation, this Rule is intended to be generally consistent with the technical requirements of
California Public Utilities Commission Rule 21 and IEEE 1547, as amended.
Language from IEEE 1547 that has been adopted directly (as opposed to paraphrased) is followed by
a citation that lists the clause from which the language derived. For example, IEEE 1547-4.1.1 is a
reference to Clause 4.1.1.
In the event of any conflict between this Rule and any of the CPUC Rule 21 and IEEE 1547
standards listed herein, the requirements of this Rule shall take precedence.
B. GENERAL RULES, RIGHTS AND OBLIGATIONS
1. Prior Authorization Required to Interconnect and Operate. An executed Interconnection
Agreement or Net Energy Metering and Interconnection Agreement, as applicable, is
required in addition to receiving CPAU’s express written permission before Parallel
Operation of a Generating Facility with CPAU’s Distribution System. CPAU shall apply this
Rule in a non-discriminatory manner and shall not unreasonably withhold its permission for
Parallel Operation of Generating Facilities with CPAU’s Distribution System.
2. Separate Agreements Required for Other Services. Separate Agreements are required for the
provision of other Electric Services from CPAU including, but not limited to, Distribution
Service provided by CPAU during periods of Curtailment or interruption of a Generating
Facility, in accordance with CPAU’s Rules & Regulations.
3. Service Not Provided With Interconnection. Interconnection with CPAU's Distribution
System under this Rule provides no rights to utilize CPAU's Distribution System for the
transmission, distribution, or wheeling of electric power.
4. Compliance with Laws, Rules & Regulations and Utility Rates. Applicants shall ascertain
and comply with applicable CPAU Rules & Regulations and Utility Rates; applicable Federal
Energy Regulatory Commission (FERC) approved rules, tariffs and regulations; and any
local, state or federal Law, statute or regulation which applies to the design, siting,
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 3
construction, installation, operation, or any other aspect of the Applicant’s Generating
Facility and Interconnection Facilities.
5. Design Reviews and Inspections. CPAU has the right to review the design of an Applicant’s
Generating Facility and Interconnection Facilities and to inspect the Generating Facility
and/or Interconnection Facilities prior to the commencement of Parallel Operation with
CPAU’s Distribution System. CPAU may require Applicants to make modifications as
necessary to comply with the requirements of CPAU Rules and Regulations or other
reasonable requirements. CPAU’s review and authorization for Parallel Operation shall not
be construed as confirming or endorsing the Applicant’s design or as warranting the
Generating Facility and/or Interconnection Facilities’ safety, durability or reliability. CPAU
is not responsible for the adequacy or capacity of such Facilities.
6. Right to Access. Customer Generating and Interconnection Facilities shall be accessible to
CPAU personnel whenever necessary for CPAU to perform its duties and exercise its rights
under its Rules and Regulations and any Interconnection Agreement, including the Net
Energy Metering and Interconnection Agreement.
7. Prudent Operation and Maintenance Required. The Customer shall operate and maintain its
Generating Facility and Interconnection Facilities in accordance with Prudent Electrical
Practices and shall maintain compliance with CPAU Rules and Regulations.
8. Curtailment and Disconnection. CPAU may limit the operation, disconnect or require the
disconnection of a Customer’s Generating Facility from CPAU’s Distribution System at any
time, with or without notice, in the event of an Emergency, or to correct Unsafe Operating
Conditions. CPAU may also limit the operation, disconnect or require the disconnection of a
Customer’s Generating Facility from CPAU’s Distribution System with reasonable written
notice: (1) to allow for routine maintenance, repairs or modifications to CPAU’s
Distribution System; (2) upon CPAU’s determination that a Customer’s Generating Facility
is not in compliance with any CPAU Rules and Regulations; or (3) upon termination of the
applicable Interconnection Agreement or Net Energy Metering and Interconnection
Agreement. Within a reasonable period after the Customer’s written request, CPAU will
provide a written explanation of the reason for such Curtailment or disconnection.
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 4
9. Coordination with Affected Systems. CPAU will notify the Affected System Operators that
are potentially affected by an Applicant’s Interconnection Request(s). CPAU will coordinate
the conduct of any studies required to determine the impact of the Interconnection Request
on Affected Systems with Affected System Operators and, if possible, include those results
in its Interconnection Study. CPAU will invite such Affected System Operators to all
meetings held with Applicant as required by this Rule. Applicants and transmission providers
which may be an Affected System shall cooperate with CPAU in all matters related to the
conduct of relevant studies and the determination of modifications to Affected Systems.
Applicant shall enter into an agreement with the owner of the Affected System, as applicable
and upon request by CPAU. The agreement will specify the terms governing payments to be
made by Applicant to the owner of the Affected System as well as the repayment, if
applicable, by the owner of the Affected System.
10. Transferability of Interconnection Request. An Applicant may transfer its Interconnection
Request to another entity only if such entity acquires the proposed Generating Facility
identified in the Interconnection Request and the Point of Interconnection and operating
parameters do not change. CPAU at its discretion may deny such requests if CPAU
determines applicable requirements will not be met as a result of the transfer.
11. Special Provisions Applicable to Net Energy Metering Applicants (NEM). Notwithstanding
any other provision in this Rule:
a. For Generating Facilities qualifying for service under PUC Sections 2827, 2827.8
and 2827.10, as amended, the Applicant is not responsible for payment of study
costs.
b. For Generating Facilities qualifying for service under PUC Sections 2827 and
2827.8, as amended, CPAU’s approval for Interconnection will normally be
processed not later than thirty (30) Business Days following CPAU’s receipt of:
i. a completed Net Energy Metering Interconnection Request including all
supporting documents and required payments;
ii. a completed signed Net Energy Metering Generator Interconnection
Agreement; and
iii. evidence of Applicant’s final electric inspection clearance from the Palo Alto
Building Department.
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 5
If the 30-day period cannot be met, CPAU will notify Applicant of the reason for the
inability to process the Interconnection Request and the expected completion date.
Applicants with PUC Section 2827 Generating Facilities that include non-inverter
based Generators and/or Generators with non-Certified Equipment should submit a
completed Net Energy Metering Interconnection Request, including all supporting
documents sufficient for CPAU to start the review process, without waiting for the
final inspection clearance. Applicants with such Generating Facilities are advised to
submit their Interconnection Request at least six (6) months in advance of their
planned Commercial Operation Date. Depending on the size and location of these
Generating Facilities, additional time for review and study may be required.
C. APPLICATION AND INTERCONNECTION PROCESS
1. APPLICATION PROCESS
a. Utility Service Application (Application). All Applicants must complete and submit
the Application and three (3) sets of plan drawings at the Development Center
located at 285 Hamilton Avenue.
2. OVERVIEW OF THE INTERCONNECTION REVIEW PROCESS
a. Valid Interconnection Request. After an Application is received and deemed
complete and valid, CPAU will start the interconnection review process. See Section
B.11 for special provisions related to the timeframe and costs applicable to NEM
Applicants.
b. Initial Review. Upon receipt of a complete and valid Application and plans, CPAU
shall perform an Initial Review. The Initial Review determines if (i) the Generating
Facility qualifies for a Simplified Interconnection, or (ii) the Generating Facility
requires a Supplemental Review. Absent extraordinary circumstances, CPAU shall
notify Applicant in writing of the results of Initial Review within ten (10) Business
Days following validation of an Interconnection Request.
i. Passage of Initial Review. For Interconnection Requests that pass the Initial
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 6
Review and do not require Interconnection Facilities or Distribution
Upgrades, CPAU will provide the Applicant with a Generator
Interconnection Agreement or Generator Interconnection Agreement and Net
Energy Metering Agreement, if applicable, within fifteen (15) Business Days
of providing notice of Initial Review results. For Interconnection Requests
that pass the Initial Review but also require Interconnection Facilities or
Distribution upgrades, CPAU will provide Applicant with a non-binding cost
estimate of the Interconnection Facilities or Distribution upgrades within
thirty (30) Business Days of providing notice of Initial Review results. These
facilities may be treated as Special Facilities (depending on circumstance) for
the purpose of determining Applicant costs. The applicant can then proceed
with executing an Interconnection Agreement in accordance with Section
C.1.e below.
ii. Failure of Initial Review. For Interconnection Requests that fail Initial
Review, CPAU will provide the technical reason, data and analysis
supporting the Initial Review results in writing and provide Applicant the
option to proceed directly to a Supplemental Review. The Applicant shall
notify CPAU within ten (10) Business Days following such notification
whether to (i) proceed to a Supplemental Review, or (ii) withdraw the
Interconnection Request. Applicants that elect to proceed to a Supplemental
Review shall provide a nonrefundable Advance Engineering Fee set forth in
Rate Schedule E-15 with their response. CPAU will proceed with the
Supplemental Review once payment of the required Advance Engineering
Fee has been received. If Applicant fails to notify CPAU within ten (10)
Business Days of such notification, the Interconnection Request will be
deemed withdrawn.
iii. Additional Initial Review Information. No changes may be made to the
planned Point of Interconnection or Generating Facility size included in the
Interconnection Request during the review process, unless such changes are
agreed to by CPAU. Where agreement has not been reached, Applicants
choosing to change the Point of Interconnection or Generating Facility size
must reapply and submit a new Interconnection Request.
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 7
c. Supplemental Review.
If Applicant requests a Supplemental Review and submits an Advance
Engineering Fee as described in Rate Schedule E-15, if required, CPAU will
perform the Supplemental Review using the review process in Section H.2., and
complete the Supplemental Review within twenty (20) Business Days, absent
extraordinary circumstances, following authorization and receipt of the fee. The
Supplemental Review will determine if (i) the Generating Facility qualifies for
interconnection, or interconnection with additional requirements, or (ii) the
Generating Facility requires a Detailed Study.
The Applicant must provide the following data to CPAU when requesting a
Supplemental Review:
Generator:
1. MVA Rating
2. kV Rating
3. Base MVA
4. Base kV
5. Xd" (direct axis subtransient reactance)
6. Xd' (direct axis transient reactance)
7. Xd (Synchronous reactance)
8. X2 (Negative Sequence reactance)
9. X0 (Zero Sequence reactance)
Generating Facility Transformer Data:
1. Winding configuration (delta-Wye gnd or Wye gnd-Delta)
2. MVA Rating
3. KV Rating
4. Base MVA
5. Base KV
6. Z1 HV-LV
7. Z0 HV-LV
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 8
Line Data:
1. Impedance data for line from Transformer to POI (if applicable)
2. Z1
3. Z0
4. Point of Interconnection (POI) Location
i. Passage of Supplemental Review. For Interconnection Requests that pass a
Supplemental Review and do not require Interconnection Facilities or
Distribution Upgrades, CPAU will provide Applicant with a Generator
Interconnection Agreement within fifteen (15) Business Days of providing
notice of the Supplemental Review results. For Interconnection Requests
that pass a Supplemental Review but also require Interconnection
Facilities or Distribution upgrades, CPAU will provide Applicant with a
non-binding cost estimate of the Interconnection Facilities or Distribution
upgrades within thirty (30) Business Days of providing notice of the
Supplemental Review results. These facilities may be treated as Special
Facilities (depending on circumstance) for the purpose of determining
Applicant costs. The Applicant can then proceed with executing an
Interconnection Agreement in accordance with Section C.1.e below.
ii. Failure of Supplemental Review. For Interconnection Requests that fail a
Supplemental Review, CPAU will provide the technical reason, data and
analysis supporting the Supplemental Review results in writing and
provide Applicant the option to proceed directly to a cost estimate and
schedule for a Detailed Study. The Applicant shall notify CPAU within
fifteen (15) Business Days following such notification whether to (i)
proceed to a cost estimate and schedule for a Detailed Study, or (ii)
withdraw the Interconnection Request. If the Applicant elects to proceed
with the cost estimate and schedule for a Detailed Study, CPAU shall
provide Applicant with a non-binding cost estimate and schedule within
thirty (30) Business Days of the Applicant providing notice to proceed. If
Applicant fails to notify CPAU within fifteen (15) Business Days of such
notification, the Interconnection Request shall be deemed withdrawn.
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 9
d. Detailed Study.
If the Applicant requests to proceed with the cost estimate and schedule for a
Detailed Study as provided by CPAU in Section C.1.c.ii above, CPAU and the
Applicant may enter into a Detailed Study agreement that provides for CPAU to
perform additional studies, facility design and engineering, and to provide an
estimate for the actual cost of CPAU provided Interconnection Facilities or
Distribution Upgrades as required to allow for the interconnection of the
generating facility at the Applicant’s expense. The Detailed Study agreement shall
set forth CPAU’s estimated time schedule and charges for completing such work.
Note: the Detailed Study fee shall be waived for NEM applicants meeting the
requirements of Section B.11. Following payment of the cost estimate by the
Applicant, CPAU will proceed with the Detail Study in accordance with the
agreed upon time schedule, and upon completion of the Detailed Study, CPAU
will provide the results in writing to the Applicant along with the final cost
estimate of any required Interconnection or Distribution Facilities. These facilities
may be treated as Special Facilities (depending on circumstance) for the purpose
of determining Applicant costs. The applicant can then proceed with executing an
Interconnection Agreement in accordance with Section C.1.e below.
e. Execution of the Generator Interconnection Agreement.
i. Following the receipt of a cost estimate for any Distribution Upgrades
and/or Interconnection Facilities that have been identified (Applicants that
did not require a cost estimate may proceed to Section C.1.e.ii below),
Applicant shall notify CPAU within fifteen (15) Business Days whether
Applicant: (i) requests a Generator Interconnection Agreement, or (ii)
withdraws its Interconnection Request. If Applicant fails to notify CPAU
within fifteen (15) Business Days, the Interconnection Request shall be
deemed withdrawn. If Applicant elects to proceed to a Generator
Interconnection Agreement, CPAU will provide Applicant with a
Generator Interconnection Agreement for Applicant’s signature within
fifteen (15) Business Days of Applicant’s request.
ii. Upon receipt of a draft Generator Interconnection Agreement, Applicant
has ninety (90) Calendar Days to sign and return the Generator
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 10
Interconnection Agreement. Applicant shall provide to CPAU written
comments, or notification of a lack of any comments, on the draft
Generator Interconnection Agreement and appendices within thirty (30)
Calendar Days. At the request of Applicant, CPAU shall begin
negotiations with Applicant at any time after CPAU provides Applicant
with the draft Generator Interconnection Agreement, which contains in its
appendices the cost estimate for any Distribution Upgrades and/or
Interconnection Facilities that have been identified by CPAU. If Applicant
fails to execute the Generator Interconnection Agreement within the ninety
(90) Calendar Days described in this section, the Interconnection Request
shall be deemed withdrawn.
iii. After Applicant has executed the Generator Interconnection Agreement
and paid the final invoice for estimated cost of Distribution Upgrades
and/or Interconnection Facilities, CPAU will commence with the design,
procurement, construction and installation of required facilities identified
in the Generator Interconnection Agreement. (Note: once the Applicant
executes the agreement, the Applicant is thereafter referred to as a
Producer) CPAU and Producer will use good faith efforts to meet
schedules and estimated costs in accordance with the requirements of the
Generator Interconnection Agreement. Producer is responsible for all costs
associated with Parallel Operation to support the safe and reliable
operation of the Distribution System and Transmission System.
3. COMMISSIONING TESTING AND PARALLEL OPERATION
a. Commissioning Testing. Producer is responsible for commissioning and testing
new Generating Facilities and associated Interconnection Facilities to ensure
compliance with the safety and reliability provisions of this Rule prior to being
operated in parallel with CPAU’s Distribution or Transmission System. For non-
Certified Equipment, Producer shall develop a written testing plan to be submitted
to CPAU for its review and acceptance. Where applicable, the testing plan shall
include the installation test procedures published by the manufacturer of the
Generating Facility or Interconnection Facilities. Facility testing shall be
conducted at a mutually agreeable time, and CPAU shall be given the opportunity
to witness the tests.
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 11
b. Parallel Operation or Momentary Parallel Operation. Producer shall not
commence Parallel Operation of its Generating Facility with CPAU’s system
unless it has received CPAU’s express written permission to do so. CPAU will
authorize Producer’s Generating Facility for Parallel Operation or momentary
Parallel Operation with CPAU’s Distribution or Transmission System, in writing,
within five (5) Calendar Days of satisfactory compliance with the terms of all
applicable agreements.
4. WITHDRAWAL / CANCELLATION
Applicant may withdraw its Interconnection Request at any time by written notice of such
withdrawal to CPAU. In addition, after receipt of the Interconnection Request, if
Applicant fails to adhere to the requirements and timelines of this rule, CPAU shall deem
the Interconnection Request to be withdrawn and shall provide written notice to
Applicant of the deemed withdrawal within five (5) Business Days and an explanation of
the reasons for such deemed withdrawal. Upon receipt of such written notice, Applicant
shall have five (5) Business Days in which to either respond with information or action
that either cures the deficiency or supports its position that the deemed withdrawal was
erroneous.
Applications that are over one year old (from the date of CPAU’s receipt) without resulting
in a signed Interconnection Agreement or Net Energy Metering and Interconnection
Agreement, or approval for Parallel Operation of a Generating Facility within one year of
completion of all applicable review and/or studies, are subject to cancellation by CPAU.
D. GENERATING FACILITY DESIGN AND OPERATING REQUIREMENTS
This section D. has been revised to be consistent with the requirements of ANSI/IEEE 1547-2003
Standard for Interconnecting Distributed Resources with Electric Power Systems (IEEE 1547).
Exceptions are taken to IEEE 1547 Clauses 4.1.4.2 Distribution Secondary Spot Networks and
Clauses 4.1.8.1 or 5.1.3.1, which address Protection from Electromagnetic Interference. Note
that this Rule and Regulation 27 does not adopt the Generating Facility power limitation of 10
MW incorporated in IEEE 1547.
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 12
1. GENERAL INTERCONNECTION AND PROTECTION FUNCTION
REQUIREMENTS
The Protective Functions and requirements of this Rule are designed to protect CPAU’s
Distribution System and not the Generating Facility. Customer shall be solely responsible
for providing adequate protection for its Generating Facility and Interconnection Facilities.
The Customer’s Protective Functions shall not impact the operation of other Protective
Functions utilized on CPAU’s Distribution System in a manner that would affect CPAU’s
capability of providing reliable service to its Customers.
a. Protective Functions Required. A Generating Facility operating in parallel with
CPAU’s Distribution System shall be equipped with the following Protective
Functions to sense abnormal conditions on CPAU’s Distribution System and cause
the Generating Facility to be automatically disconnected from CPAU’s Distribution
System or to prevent the Generating Facility from being connected to CPAU’s
Distribution System inappropriately:
i. Over and under voltage trip functions and over and under frequency trip
functions;
ii. A voltage and frequency sensing and time-delay Function to prevent the
Generating Facility from energizing a de-energized Distribution System
circuit and to prevent the Generating Facility from reconnecting with CPAU’s
Distribution System unless CPAU’s Distribution System service voltage and
frequency is within the ANSI C84.1-1995 Table 1 Range B Voltage Range of
106V to 127V on a 120V basis, inclusive, and a frequency range of 59.3 Hz
to 60.5 Hz, inclusive, and are stable for at least 60 seconds, and;
iii. A Function to prevent the Generating Facility from contributing to the
formation of an Unintended Island, and cease to energize the CPAU system
within two seconds of the formation of an Unintended Island.
The Generating Facility shall cease to energize CPAU’s Distribution System
for faults on CPAU’s Distribution System circuit to which it is connected
(IEEE1547-4.2.1). The Generating Facility shall cease to energize CPAU’s
Distribution circuit prior to re-closure by CPAU’s Distribution System
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 13
equipment (IEEE1547-4.2.2).
b. Momentary Paralleling Generating Facilities. With CPAU’s approval, the transfer
switch or scheme used to transfer the Producer’s Loads from CPAU’s Distribution
System to Producer’s Generating Facility may be used in lieu of the Protective
Functions required for Parallel Operation.
c. Suitable Equipment Required. Circuit breakers or other interrupting devices located
at the Point of Common Coupling must be Certified or "Listed" (as defined in
Article 100, the Definitions Section of the National Electrical Code) as suitable for
their intended application. This includes being capable of interrupting the maximum
available fault current expected at their location. Producer’s Generating Facility and
Interconnection Facilities shall be designed so that the failure of any one device shall
not potentially compromise the safety and reliability of CPAU’s Distribution System.
The Generating Facility’s paralleling-device shall be capable of withstanding 220%
of the Interconnection Facilities’ rated voltage (IEEE 1547-4.1.8.3). The
Interconnection Facilities shall have the capability to withstand voltage and current
surges in accordance with the environments defined in IEEE Std C62.41.2-2002 or
IEEE Std C37.90.1-2002 as applicable and as described in IEEE 1547-4.1.8.2.
d. Visible Disconnect Required: The Producer shall furnish and install a ganged,
manually-operated isolating switch (or a comparable device mutually agreed upon by
CPAU and the Producer) near the Point of Interconnection to isolate the Generating
Facility from CPAU’s Distribution System. The device does not have to provide
overcurrent protection.
The device must:
i. Allow visible verification that separation has been accomplished. (This
requirement may be met by opening the enclosure to observe contact
separation.) Molded case circuit breakers do not meet the visible contact
requirement and are not acceptable as a Visible Disconnect device.
ii. Include markings or signage that clearly indicates open and closed positions.
iii. Be capable of being reached quickly and conveniently 24 hours a day by
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 14
CPAU personnel for construction, maintenance, inspection, testing or
reading, without obstacles or requiring those seeking access to obtain keys,
special permission, or security clearances.
iv. Be capable of being locked in the open position.
v. Be clearly marked on the submitted Single Line Diagram and its type and
location approved by CPAU prior to installation. If the device is not adjacent
to the Point of Common Coupling (PCC), permanent signage must be
installed at a CPAU-approved location providing a clear description of the
location of the device. Generating Facilities with Non-Islanding inverters
totaling one (1) kilovolt-ampere (kVA) or less are exempt from this
requirement.
e. Drawings Required. Prior to Parallel Operation or Momentary Parallel Operation of
the Generating Facility, CPAU shall approve the Producer's Protective Function and
control diagrams. A Generating Facility equipped with a Protective Function and
control scheme previously approved by CPAU for system-wide application or only
Certified Equipment may satisfy this requirement by reference to previously
approved drawings and diagrams.
f. Generating Facility Conditions Not Identified. In the event this Rule does not
address the Interconnection conditions for a particular Generating Facility, CPAU
and Producer may agree upon other arrangements, to be approved by CPAU.
2. PREVENTION OF INTERFERENCE
The Producer shall not operate a Generating Facility or Interconnection Facilities that
superimpose a voltage or current upon CPAU’s Distribution System that interferes with
CPAU operations, service to CPAU Customers, or communication facilities. If such
interference occurs, the Producer must diligently pursue and take corrective action at its
own expense after being given notice and reasonable time to do so by CPAU. If the
Producer does not take corrective action in a timely manner, or continues to operate the
facilities causing interference without restriction or limit, CPAU may, without liability,
disconnect the Producer's facilities from CPAU’s Distribution System, in accordance with
Section B.8 of this Rule. To eliminate undesirable interference caused by its operation,
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 15
each Generating Facility shall meet the following criteria:
a. Voltage Regulation. The Generating Facility shall not actively regulate the voltage at
the PCC while in parallel with CPAU’s Distribution System. The Generating Facility
shall not cause the service voltage at other Customers to go outside the requirements
of ANSI C84.1-1995, Range A (IEEE 1547-4.1.1).
b. Operating Voltage Range. The voltage ranges in Table D.1 define protective trip
limits for the Protective Function and are not intended to define or imply a voltage
regulation Function. A Generating Facility shall cease to energize CPAU’s
Distribution System within the prescribed trip time whenever the voltage at the PCC
deviates from the allowable voltage operating range. The Protective Function shall
detect and respond to voltage on all phases to which the Generating Facility is
connected.
i. Generating Facilities. Generating Facilities shall be capable of operating
within the voltage range normally experienced on CPAU’s Distribution
System from plus to minus 5% of the nominal voltage (e.g. 114 volts to 126
volts on a 120 volt base), at the service panel or PCC. The trip settings at the
generator terminals shall be selected in a manner that minimizes nuisance
tripping between 106 volts and 132 volts on a 120-volt base (88-110% of
nominal voltage) to compensate for voltage drop between the generator
terminals and the PCC. Voltage shall be detected at either the PCC or the
Point of Interconnection. However, the voltage range at the PCC with the
generator on-line shall stay within +/-5% of nominal.
ii. Voltage Disturbances. Whenever CPAU’s Distribution System voltage at the
PCC varies from and remains outside normal (nominally 120 volts) by the
predetermined amounts set forth in Table D.1, the Generating Facility’s
Protective Functions shall cause the Generator(s) to become isolated from
CPAU’s Distribution System.
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 16
TABLE D.1: Voltage Trip Settings
Voltage at Point of Common Coupling Maximum Trip Time(1)
Assuming 120 V Base % of Nominal Voltage
# of Cycles
(Assuming 60 Hz
Nominal)
Seconds
Less than 60 Volts Less than 50% 10 Cycles 0.16 Seconds
Greater than or equal to
60 Volts but less than
106 Volts
Greater than or equal to
50% but less than 88% 120 Cycles 2 Seconds
Greater than or equal to
106 Volts but less than or
equal to 132 Volts
Greater than or equal to
88% but less than or
equal to 110%
Normal Operation
Greater than 132 Volts
but less than or
equal to 144 Volts
Greater than 110% but
less than or equal to
120%
60 Cycles 1 Second
Greater than 144 Volts Greater than 120% 10 Cycles 0.16 Seconds
(1) “Maximum Trip time” refers to the time between the onset of the abnormal condition and the
Generating Facility ceasing to energize CPAU’s Distribution System. Protective Function sensing
equipment and circuits may remain connected to CPAU’s Distribution S ystem to allow sensing of
electrical conditions for use by the “reconnect” feature. The purpose of the allowed time delay is to
allow a Generating Facility to “ride through” short-term disturbances to avoid nuisance tripping. Set
points shall not be user adjustable (though they may be field adjustable by qualified personnel).
c. Paralleling. The Generating Facility shall parallel with CPAU’s Distribution System
without causing a voltage fluctuation at the PCC greater than ±5% of the prevailing
voltage level of CPAU’s Distribution System at the PCC, and meet the flicker
requirements of D.2.d.
d. Flicker. The Generating Facility shall not create objectionable flicker for other
Customers on CPAU’s Distribution System. To minimize the adverse voltage effects
experienced by other Customers (IEEE 1547-4.3.2), flicker at the PCC caused by the
Generating Facility should not exceed the limits defined by the “Maximum
Borderline of Irritation Curve” identified in IEEE 519-1992 (IEEE Recommended
Practices and Requirements for Harmonic Control in Electric Power Systems, IEEE
STD 519-1992). This requirement is necessary to minimize the adverse voltage
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 17
affects experienced by others Customers on CPAU’s Distribution System.
Generators may be connected and brought up to synchronous speed (as an induction
motor) provided these flicker limits are not exceeded.
e. Integration with CPAU’s Distribution System Grounding. The grounding scheme of
the Generating Facility shall not cause over-voltages that exceed the rating of the
equipment connected to CPAU’s Distribution System and shall not disrupt the
coordination of the ground fault protection on CPAU’s Distribution System (IEEE
1547-4.1.2).
f. Frequency. The Generating Facility shall operate in synchronism with CPAU’s
Distribution System. Whenever CPAU’s Distribution System Frequency at the PCC
varies from and remains outside normal (nominally 60 Hz) by the predetermined
amounts set forth in Table D.2, the Generating Facility’s Protective Functions shall
cease to energize CPAU’s Distribution System within the stated maximum trip time.
TABLE D.2: Frequency Trip Settings
Generating Facility Rating Frequency Range
(Assuming 60 Hz Nominal)
Maximum Trip Time (1)
(Assuming 60 Cycles per
Second
Less or equal to 30 kW
Less than 59.3 Hz 10 Cycles
Greater than 60.5 Hz 10 Cycles
Greater than 30 kW
Less than 57 Hz 10 Cycles
Less than an adjustable value
between 59.8 Hz and 57 Hz
but greater than 57 Hz (2)
Adjustable between 10 and
18,000 Cycles (2),(3)
Greater than 60.5 Hz 10 Cycles
1) “Maximum Trip time” refers to the time between the onset of the abnormal condition and the
Generating Facility ceasing to energize CPAU’s Distribution System. Protective Function sensing
equipment and circuits may remain connected to CPAU’s Distribution System to allow sensing of
electrical conditions for use by the “reconnect” feature. The purpose of the allowed time delay is
to allow a Generating Facility to “ride through” short-term disturbances to avoid nuisance tripping.
Set points shall not be user adjustable (though they may be field adjustable by qualified
personnel).
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 18
(2) Unless otherwise required by CPAU, a trip frequency of 59.3 Hz and a maximum trip time of 10
cycles shall be used.
(3) When a 10-cycle maximum trip time is used, a second under frequency trip setting is not required.
g. Harmonics. When the Generating Facility is serving balanced linear Loads, harmonic
current injection into CPAU’s Distribution System at the PCC shall not exceed the
limits stated below in Table D.3. The harmonic current injections shall be exclusive
of any harmonic currents due to harmonic voltage distortion present in CPAU’s
Distribution System without the Generating Facility connected (IEEE 1547-4.3.3).
The harmonic distortion of a Generating Facility located at a Customer’s site shall be
evaluated using the same criteria as for the Host Loads.
Table D.3 Maximum Harmonic Current Distortion in Percent of Current (I)(1,2)
Individual
Harmonic Order h,
(odd harmonics) (3)
h<11 11 ≤ h < 17 17 ≤ h < 23 23 ≤ h < 35 35 ≤ h
Total
Demand
distortion
(TDD)
Max Distortion (%) 4.0 2.0 1.5 0.6 0.3 5.0
(1) IEEE 1547-4.3.3
(2) I = the greater of the maximum Host Load current average Demand over 15 or 30 minutes without the GF, or the GF rated current capacity (transformed to the PCC when a transformer exists between the GF and the PCC).
(3) Even harmonics are limited to 25% of the odd harmonic limits above.
h. Direct Current Injection. Generating Facilities should not inject direct current greater
than 0.5% of rated output current into CPAU’s Distribution System.
i. Power Factor. Each Generator in a Generating Facility shall be capable of operating
at some point within a Power Factor range from 0.9 leading to 0.9 lagging. Operation
outside this range is acceptable provided the reactive power of the Generating
Facility is used to meet the reactive power needs of the Host Loads or that reactive
power is otherwise provided under tariff by CPAU. The Producer shall notify CPAU
if it is using the Generating Facility for Power Factor correction. Unless otherwise
agreed upon by the Producer and CPAU, Generating Facilities shall automatically
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 19
regulate Power Factor, not voltage, while operating in parallel with CPAU’s
Distribution System.
3. TECHNOLOGY SPECIFIC REQUIREMENTS
a. Three-Phase Synchronous Generators. For three-phase Generators, the Generating
Facility circuit breakers shall be three-phase devices with electronic or
electromechanical control. The Producer shall be responsible for properly
synchronizing its Generating Facility with CPAU’s Distribution System by means of
either manual or automatic synchronizing equipment. Automatic synchronizing is
required for all synchronous Generators that have a Short Circuit Contribution Ratio
(SCCR) exceeding 0.05. Loss of synchronism protection is not required except as
may be necessary to meet D.2.d (Flicker) (IEEE 1547-4.2.5). Unless otherwise
agreed upon by the Producer and CPAU, synchronous Generators shall automatically
regulate Power Factor, not voltage, while operating in parallel with CPAU’s
Distribution System. A power system stabilization function is specifically not
required for Generating Facilities under 10 MW Net Nameplate Rating. Ground Fault
Protection is required for generators > 40 kW. Voltage Restraint Overcurrent or
Voltage Controlled Overcurrent relays are required for generators or a group of
generators > 400 kW.
b. Induction Generators. Induction Generators (except self-excited Induction
Generators) do not require a synchronizing Function. Starting or rapid Load
fluctuations on induction Generators can adversely impact CPAU’s Distribution
System's voltage. Corrective step-switched capacitors or other techniques may be
necessary and may cause undesirable ferroresonance. When these counter measures
(e.g. additional capacitors) are installed on the Producer's side of the Point of
Common Coupling, CPAU must review these measures. Additional equipment may
be required as determined in a Supplemental Review or a Detailed Study.
Ground Fault Protection is required for generators > 40 kW. Voltage Restraint
Overcurrent or Voltage Controlled Overcurrent relays are required for generators or a
group of generators > 400 kW.
c. Inverters. Only Certified inverters are approved for interconnection. Utility-
interactive inverters do not require separate synchronizing equipment. Non-utility-
interactive or “stand-alone” inverters shall not be used for Parallel Operation with
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 20
CPAU’s Distribution System. Inverters or a group of inverters > 400 kW require
Ground Fault Protection.
Inverter based systems not classified as “Smart Inverters” may continue to be
installed per Section D.3.c until September 8, 2017, which is twelve (12) months
after the date the Supplement SA of UL-1741 (with California requirements) was
approved. Section D.5 may be used in all or in part, for inverter based technologies
by mutual agreement of CPAU and the Applicant.
The replacement of an existing inverter to an inverter that is of equal or greater
ability than the original is allowed per Section D.3.c. Section D.5 may be used in all
or in part, for replacement inverter based technologies by mutual agreement of CPAU
and the Applicant.
d. Single-Phase Generators. For single-phase Generators connected to a shared
single-phase secondary system, the maximum Net Nameplate Rating of the
Generating Facilities shall be 20 kVA. Generators connected to a center-tapped
service neutral must be installed such that no more than 6 kVA of unbalanced power
is applied to the two “legs” of the service. The current in the most heavily loaded leg
must not exceed twice that of the other leg. For Dedicated Distribution Transformer
Services, the maximum Net Nameplate Rating of a single-phase Generating Facility
shall be the transformer nameplate rating.
4. SUPPLEMENTAL GENERATING FACILITY REQUIREMENTS
a. Fault Detection. A Generating Facility with an SCCR exceeding 0.1 or one that does
not cease to energize CPAU’s Distribution System within two seconds of the
formation of an Unintended Island shall be equipped with Protective Functions
designed to detect Distribution System faults, both line-to-line and line-to-ground,
and shall cease to energize CPAU’s Distribution System within two seconds of the
initiation of a fault.
b. Transfer Trip. For a Generating Facility that cannot detect Distribution System faults
(both line-to-line and line-to-ground) or the formation of an Unintended Island, and
cease to energize CPAU’s Distribution System within two seconds, CPAU may
require a Transfer Trip system or an equivalent Protective Function. For net metered
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 21
or non-net metered Generating Facilities, the Facility will be considered capable of
supporting an Unintended Island if the aggregate distributed generation output is 80%
or more of the Distribution System real-time load kW seen at CPAU’s source-side
Distribution Protection Device.
c. Reclose Blocking. Where the aggregate Generating Facility capacity exceeds 15% of
the peak Load on any automatic reclosing device, CPAU may require additional
Protective Functions, including, but not limited to reclose-blocking on some of the
automatic reclosing devices.
5. SMART INVERTER GENERATING FACILITY DESIGN AND OPERATING
REQUIREMENTS
Section D.3.c shall continue to be used for interconnection of inverter based technologies
until September 8, 2017, twelve (12) months after the date the Supplement SA of UL-1741
(with CA requirements) was approved by the full UL-1741 Standards Technical Panel (STP).
Following such date, Section D.5 shall apply for interconnection of inverter based
technologies. Until such date, Section D.5 may be used in all or in part, for inverter based
technologies by mutual agreement of the CPAU and the Applicant.
The inverter requirements are intended to be consistent with ANSI/IEEE 1547- 2003 and
1547a Standard for Interconnecting Distributed Resources with Electric Power Systems
(IEEE 1547 including amendment 1547a). In the event of conflict between this Rule and
IEEE 1547-2003, this Rule shall take precedence. Exceptions are taken to IEEE 1547
Clauses 4.1.4.2 Distribution Secondary Spot Networks and Clauses 4.1.8.1 or 5.1.3.1, which
address Protection from Electromagnetic Interference. Rule 27 does not adopt the Generating
Facility power limitation of 10 MW incorporated in IEEE1547.
a. Protective Functions Required. Smart Inverters operating in parallel with CPAU’s
Distribution System shall be equipped with the following Protective Functions to
sense abnormal conditions on CPAU’s Distribution System and cause the Smart
Inverter to be automatically disconnected from CPAU’s Distribution System or to
prevent the Smart Inverter from being connected to CPAU’s Distribution System
inappropriately:
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 22
i. Over and under voltage trip functions and over and under frequency trip
functions;
ii. A voltage and frequency sensing and time-delay function to prevent the Smart
Inverter from energizing a de-energized Distribution System circuit and to
prevent the Smart Inverter from reconnecting with CPAU’s System unless
CPAU’s Distribution System service voltage and frequency is within the
ANSI C84.1-1995 Table 1 Range B voltage Range of 106 volts to 127 volts
(on a 120 volt basis), inclusive, and a frequency range of 59.3 Hz to 60.5 Hz,
inclusive, and are stable for at least 15 seconds; and
iii. A function to prevent the Smart Inverter from contributing to the formation of
an Unintended Island, and cease to energize CPAU’s Distribution System
within two seconds of the formation of an Unintended Island.
iv. Only Certified Smart Inverters are approved for interconnection. Smart
Inverters or a group of Smart Inverters > 400 kW require Ground Fault
Protection.
The Smart Inverter shall cease to energize CPAU’s Distribution System for
faults on CPAU’s Distribution System circuit to which it is connected (IEEE
1547-4.2.1). The Smart Inverter shall cease to energize CPAU’s Distribution
circuit prior to reclosing by CPAU’s Distribution System equipment (IEEE
1547-4.2.2).
b. Momentary Paralleling Generating Facilities. With CPAU’s approval, the transfer
switch or scheme used to transfer Producer’s loads from CPAU’s Distribution
System to Producer’s Generating Facility may be used in lieu of the Protective
Functions required for Parallel Operation.
c. Suitable Equipment Required. Circuit breakers or other interrupting equipment
located at the PCC must be Certified or “Listed” (as defined in Article 100, the
Definitions Section of the National Electrical Code) as suitable for their intended
application. This includes being capable of interrupting the maximum available fault
current expected at their location. Producer’s Smart Inverter and Interconnection
Facilities shall be designed so that the failure of any single device or component shall
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 23
not potentially compromise the safety and reliability of CPAU’s Distribution System.
The Smart Inverter paralleling-device shall be capable of withstanding 220% of the
Interconnection Facility rated voltage (IEEE 1547- 4.1.8.3). The Interconnection
Facility shall have the capability to withstand voltage and current surges in
accordance with the environments defined in IEEE Std. C62.41.2-2002 or IEEE Std.
C37.90.1-2002 as applicable and as described in L.3.e (IEEE 1547- 4.1.8.2).
d. Visible Disconnect Required. Producer shall furnish and install a ganged, manually-
operated isolating switch (or a comparable device mutually agreed upon by CPAU
and Producer) near the Point of Common Coupling to isolate the Smart Inverter from
CPAU’s Distribution System. The device does not have to provide over-current
protection.
The device must:
i. Allow visible verification that separation has been accomplished. (This
requirement may be met by opening the enclosure to observe contact
separation.) Molded case circuit breakers do not meet the visible contact
requirement and are not acceptable as a Visible Disconnect device.
ii. Include markings or signage that clearly indicates open and closed positions.
iii. Be capable of being reached quickly and conveniently 24 hours a day by
CPAU personnel for construction, maintenance, inspection, testing or
reading, without obstacles or requiring those seeking access to obtain keys,
special permission, or security clearances.
iv. Be capable of being locked in the open position.
v. Be clearly marked on the submitted single line diagram and its type and
location approved by CPAU prior to installation. If the device is not adjacent
to the PCC, permanent signage must be installed at a CPAU approved
location providing a clear description of the location of the device. If the
switch is not accessible outside the locked premises, signage with contact
information and a CPAU approved locking device for the premises shall be
installed. Generating Facilities with Non-Islanding inverters totaling one (1)
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RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 24
kilovolt-ampere (kVA) or less are exempt from this requirement.
e. Drawings Required. Prior to Parallel Operation or Momentary Parallel Operation of
the Smart Inverter, CPAU shall approve Producer’s Protective Function and control
diagrams. Generating Facilities equipped with Protective Functions and a control
scheme previously approved by CPAU for system-wide application or only
Certified Equipment may satisfy this requirement by reference to previously
approved drawings and diagrams.
f. Generating Facility Conditions Not Identified. In the event this Rule does not address
the Interconnection conditions for a particular Smart Inverter, CPAU and Producer
may agree upon other arrangements, to be approved by CPAU.
g. Prevention of Interference. Producer shall not operate Smart Inverters that
superimpose a voltage or current upon CPAU’s Distribution System that interferes
with CPAU operations, service to CPAU Customers or communication facilities. If
such interference occurs, Producer must diligently pursue and take corrective action
at its own expense after being given notice and reasonable time to do so by CPAU. If
Producer does not take corrective action in a timely manner, or continues to operate
the facilities causing interference without restriction or limit, CPAU may, without
liability, disconnect Producer's facilities from CPAU’s Distribution System, in
accordance with Section B.8 of this Rule.
h. Voltage Regulation. If approved by CPAU, the Smart Inverter may actively regulate
the voltage at the Point of Common Coupling (PCC) while in parallel with CPAU’s
Distribution System. The Smart Inverter shall not cause the service voltage at other
customers to go outside the requirements of ANSI C84.1-1995, Range A (IEEE
1547-4.1.1).
i. Voltage Trip and Ride-Through Settings. The voltage ranges in Table D.4 define
protective trip limits for the Protective Function and are not intended to define or
imply a voltage regulation Function. Generating Facilities shall cease to energize
CPAU’s Distribution System within the prescribed trip time whenever the voltage at
the PCC deviates from the allowable voltage operating range. The Protection
Function shall detect and respond to voltage on all phases to which the Generating
Facility is connected.
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RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 25
j. Smart Inverters. Smart Inverters shall be capable of operating within the voltage
range normally experienced on CPAU’s Distribution System from plus to minus 5%
of the nominal voltage (e.g. 114 volts to 126 volts, on a 120 volt base), at the service
panel or PCC. The trip settings at the generator terminals may be selected in a
manner that minimizes nuisance tripping in accordance with Table D.4 to
compensate for voltage drop between the generator terminals and the PCC. Voltage
may be detected at either the PCC or the Point of Interconnection. However, the
voltage range at the PCC, with the generator on-line, shall stay within +/-5% of
nominal.
k. Voltage Disturbances. Whenever CPAU’s Distribution System voltage at the PCC
varies from and remains outside Near Nominal voltage for the predetermined
parameters set forth in Table D.4, the Smart Inverter’s Protective Functions shall
cause the Smart Inverter(s) to become isolated from CPAU’s Distribution System:
i. The Smart Inverter shall stay connected to CPAU’s Distribution System
while the grid remains within the “Ride-Through Until” voltage-time range
and must stay connected in the corresponding “Operating Mode”.
ii. For voltage excursions beyond the near Nominal (NN) magnitude range and
within the range of the HV1 or LV3 regions, the Smart Inverter shall
momentarily cease to energize within 0.16 seconds.
iii. In the HV1 region, the Smart Inverter is permitted to reduce power output as
a function of voltage under mutual agreement between the Producer and
CPAU.
iv. If the distribution system voltage does not exit the ride-through region and
recovers to normal system voltage, the Smart Inverter shall restore continuous
operation within 2 seconds.
v. If the CPAU’s Distribution System voltage does not exit the ride-through
region and returns from the LV3 region to the LV2 or LV1 region, the Smart
Inverter shall restore available current within 2 seconds.
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RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 26
vi. Different voltage-time settings could be permitted by CPAU.
Table D.4: Voltage Ride-Through Table
Region Voltage at Point
of Common
Coupling (%
Nominal Volts)
Ride-Through
Until
Operating Mode Maximum Trip
Time
High Voltage 2
(HV2)
V > 120 0.16 seconds
High Voltage 1
(HV1)
110 < V < 120 12 seconds Momentary
Cessation
13 seconds
Near Nominal
(NN)
88 < V < 110 Indefinite Continuous
Operation
Not Applicable
Low Voltage 1
(LV1)
70 < V < 88 20 seconds Mandatory
Operation
21 seconds
Low Voltage 2
(LV2)
50 < V < 70 10 seconds Mandatory
Operation
11 seconds
Low Voltage 3
(LV3)
V < 50 1 second Momentary
Cessation
1.5 seconds
l. Paralleling. The Generating Facility shall parallel with CPAU’s Distribution System
without causing a voltage fluctuation at the PCC greater than plus/minus 5% of the
prevailing voltage level of CPAU’s Distribution System at the PCC, and meet the
flicker requirements of Section D.5.m below.
m. Flicker. The Generating Facility shall not create objectionable flicker for other
customers on CPAU’s Distribution System. To minimize the adverse voltage effects
experienced by other customers (IEEE 1547-4.3.2), flicker at the PCC caused by the
Generating Facility should not exceed the limits defined by the "Maximum
Borderline of Irritation Curve" identified in IEEE 519-1992 (IEEE Recommended
Practices and Requirements for Harmonic Control in Electric Power Systems, IEEE
STD 519-1992). This requirement is necessary to minimize the adverse voltage
affects experienced by other Customers on CPAU’s Distribution System. Generators
may be connected and brought up to synchronous speed (as an induction motor)
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RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 27
provided these flicker limits are not exceeded.
n. Integration with CPAU’s Distribution System Grounding. The grounding scheme of
the Generating Facility shall not cause over-voltages that exceed the rating of the
equipment connected to CPAU’s Distribution System and shall not disrupt the
coordination of the ground fault protection on CPAU’s Distribution System (IEEE
1547-4.1.2).
o. Frequency. CPAU controls system frequency, and the Generating Facility shall
operate in synchronism with CPAU’s Distribution System. Whenever CPAU’s
Distribution System frequency at the PCC varies from and remains outside normal
(nominally 60 Hz) by the predetermined amounts set forth in Table D.2, the
Generating Facility’s Protective Functions shall cease to energize CPAU’s
Distribution System within the stated maximum trip time.
p. Frequency Ride-Through Requirements. Smart Inverter based systems shall remain
connected to CPAU’s Distribution System while the grid is within the frequency-time
range indicated in Table D.5, and shall disconnect from the electric grid during a high
or low frequency event that is outside that frequency-time range. The frequency
values are shown in Table D.5. These values provide default interconnection system
response to abnormal frequencies. The inverter shall disconnect by the default
clearing times. In the high frequency range between 60.2 Hz and 61.5 Hz, or some
other mutually agreed range, the Smart Inverter is permitted to reduce real power
output until it ceases to export power by 61.5 Hz, or other frequency value mutually
agreed between the generating facility operator and CPAU. Islands and microgrids
may need different default frequency settings.
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 28
Table D.5: Frequency Ride-Through and Trip Settings Table
System
Frequency
Default Settings
(Hz)
Minimum Range
of Adjustability
(Hz)
Ride-Through
Until
Ride –Through
Operational
Mode
Maximum Trip
Time
f > 62 62 – 64 No Ride Through Not Applicable 0.16 seconds
60.5 < f < 62 60.1 – 62 299 seconds Mandatory
Operation
300 seconds
58.5 < f < 60.5 Not Applicable Indefinite Continuous
Operation
Not Applicable
57.0 < f < 58.5 57 – 59.9 299 seconds Mandatory
Operation
300 seconds
f < 57.0 53 – 57 No Ride Through Not Applicable 0.16 seconds
q. Harmonics. When the Smart Inverter is serving balanced linear loads, harmonic
current injection into CPAU’s Distribution System at the PCC shall not exceed the
limits stated in Table D.3. The harmonic current injections shall be exclusive of any
harmonic currents due to harmonic voltage distortion present in
CPAU’s Distribution System without the Smart Inverter connected (IEEE 1547-
4.3.3.). The harmonic distortion of a Smart Inverter shall be evaluated using the same
criteria as for the Host Loads.
r. Direct Current Injection. Smart Inverter should not inject direct current greater than
0.5% of rated output current into CPAU’s Distribution System.
s. Power Factor. Producer shall provide adequate reactive power compensation on site
to maintain the Smart Inverter power factor near unity at rated output or a CPAU
specified power factor in accordance with the following requirements:
i. Default Power Factor setting: 1.0 +/- 0.01 (0.99 Lagging to 0.99 Leading).
ii. Aggregate generating facility is greater than 15 kW: 1.0 +/- 0.15 (0.85
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CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 29
Lagging to 0.85 Leading) down to 20% rated power based on available
reactive power.
iii. Aggregate generating facility is less than or equal to 15 kW: 1.0 +/- 0.10
(0.90 Lagging to 0.90 Leading) down to 20% rated power based on available
reactive power.
t. Dynamic Volt/VAR Operations. The Smart Inverter shall be capable of operating
dynamically within a power factor range of +/- 0.85 PF for larger (>15 kW) systems,
down to 20% of rated power, and +/- 0.9 PF for smaller systems (≤15 kW), down to
20% of rated power, based on available reactive power. This dynamic Volt/VAR
capability shall be able to be activated or deactivated in accordance with CPAU
requirements.
CPAU may permit or require the Smart Inverter systems to operate in larger power
factor ranges, including in 4-quadrant operations for storage systems with the
implementation of additional anti-islanding protection as determined by CPAU.
The Smart Inverter shall be capable of providing dynamic reactive power
compensation (dynamic Volt/VAR operation) within the following constraints:
The Smart Inverter shall not cause the line voltage at the point of common
coupling to go outside the requirements of the latest version of ANSI C84.1,
Range A.
The Smart Inverter shall be able to consume reactive power in response to an
increase in line voltage, and produce reactive power in response to a decrease
in line voltage.
The reactive power provided shall be based on available reactive power, but
the maximum reactive power provided to the system shall be as directed by
CPAU.
u. Ramp Rate Requirements. The Smart Inverter is required to have the following ramp
controls for at least the following two conditions. These functions can be established
by multiple control functions or by one general ramp rate control function. Ramp
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RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 30
rates are contingent upon sufficient energy available from the Smart Inverter.
Normal ramp-up rate: For transitions between energy output levels over the
normal course of operation. The default value is 100% of maximum current
output per second with a range of adjustment between 1% to 100%, with
specific settings as mutually agreed by the CPAU and the Producer.
Connect/Reconnect Ramp-up rate: Upon starting to inject power into the grid,
following a period of inactivity or a disconnection, the inverter shall be able
to control its rate of increase of power from 1 to 100% maximum current per
second, with specific settings as mutually agreed upon by CPAU and the
Producer.
v. Default Activation States for Phase 1 Functions. Unless otherwise provided by
CPAU, the default settings will be as follows:
Anti-islanding – activated
Low/High Voltage Ride-Through – activated
Low/High Frequency Ride-Through – activated
Dynamic Volt/VAR operations – deactivated
Ramp rates – activated
Fixed power factor – activated
Reconnect by “soft-start” methods – activated
These default activation states may be modified by mutual agreement between CPAU
and Producer.
w. Automatic Transfer (Load Shedding or Transfer). The voltage and frequency ride-
through requirements of D.5.i and D.5.m shall not apply if either: a) The real power
across the Point of Common Coupling is continuously maintained at a value less than
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RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 31
10% of the aggregate rating of the Smart Inverters connected to the Generation
Facility prior to any voltage disturbance, and the Generation Facility disconnects
from CPAU’s distribution system, along with Generation Facility load, such that the
net change in real power flow from or to CPAU is less than 10% of the aggregate
Smart Inverter capacity; or b) Generation Facility load real power demand equal to
90% to 120% of the pre-disturbance aggregate Smart Inverter real power output is
shed within 0.1 seconds of Smart Inverter disconnection.
x. Fault Detection. A Smart Inverter with an SCCR exceeding 0.1 or one that does not
cease to energize CPAU’s Distribution System within two seconds of the formation
of an Unintended Island shall be equipped with Protective Functions designed to
detect Distribution System faults, both line-to-line and line-to-ground, and cease to
energize CPAU’s Distribution System within two seconds of the initiation of a fault.
y. Transfer Trip. For a Generating Facility that cannot detect Distribution System faults
(both line-to-line and line-to-ground) or the formation of an Unintended Island, and
cease to energize CPAU’s Distribution System within two seconds, CPAU may
require a Transfer Trip system or an equivalent Protective Function.
z. Reclose Blocking. Where the aggregate Generating Facility capacity exceeds 15% of
the peak load on any automatic reclosing device, CPAU may require additional
Protective Functions, including, but not limited to reclose-blocking on some of the
automatic reclosing devices.
E. INTERCONNECTION FACILITIES AND DISTRIBUTION SYSTEM
MODIFICATIONS OWNERSHIP AND COST ALLOCATION
1. SCOPE AND OWNERSHIP OF INTERCONNECTION FACILITIES AND
DISTRIBUTION SYSTEM MODIFICATIONS
a. Scope. Parallel Operation of Generating Facilities may require Interconnection
Facilities or modifications to CPAU’s Distribution System (“Distribution System
modifications”). The type, extent and costs of Interconnection Facilities and
Distribution System modifications shall be consistent with this Rule and determined
through the Supplemental Review and/or Interconnection Studies described in
Section C.
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RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 32
b. Ownership. Interconnection Facilities installed on Producer’s side of the PCC may
be owned, operated and maintained by the Producer or CPAU. Interconnection
Facilities installed on CPAU’s side of the PCC and Distribution System
modifications shall be owned, operated and maintained only by CPAU.
2. RESPONSIBILITY OF COSTS OF INTERCONNECTING A GENERATING
FACILITY
a. Study and Review Costs. A Producer shall be responsible for the reasonably incurred
costs of the reviews and studies conducted pursuant to Section C.1 of this Rule.
b. Facility Costs. A Producer shall be responsible for all costs associated with
Interconnection Facilities owned by the Producer. The Producer shall also be
responsible for any costs reasonably incurred by CPAU in providing, operating, or
maintaining the Interconnection Facilities and Distribution System modifications
required for the Interconnection of the Producer’s Generating Facility with CPAU’s
Distribution System.
c. Separation of Costs. Should CPAU combine the installation of Interconnection
Facilities or Distribution System modifications required for the Interconnection of a
Generating Facility with modifications to CPAU’s Distribution System to serve other
Customers or Producers, CPAU shall not include the costs of such separate or
incremental facilities in the amounts billed to the Producer.
d. Payments. The Producer must pay applicable costs prior to the scheduling of any
engineering reviews and studies; construction of distribution system modifications; or
interconnection of generating facilities to CPAU’s Distribution System.
3. INSTALLATION AND FINANCING OF INTERCONNECTION FACILITIES AND
DISTRIBUTION SYSTEM MODIFICATIONS
a. Agreement Required. The costs for Interconnection Facilities and Distribution
System modifications shall be paid by the Producer pursuant to the Provisions
contained in the Special Facilities Agreement. Where the type and extent of the
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 33
Interconnection Facilities or Distribution System modifications warrant additional
detail, Producer and CPAU shall execute separate agreement(s) to more fully
describe and allocate the parties’ responsibilities for installing, owning, operating and
maintaining the Interconnection Facilities and Distribution System modifications.
b. Interconnection Facilities and Distribution System Modifications. Interconnection
Facilities connected to CPAU’s side of the Point of Common Coupling and
Distribution System modifications shall be provided, installed, owned and
maintained by CPAU at Producer’s expense.
c. Reservation of Unused Facilities. When a Producer wishes to reserve CPAU-owned
Interconnection Facilities or Distribution System modifications installed and operated
as Special Facilities for the Producer at Producer’s expense, but idled by a change in
the operation of the Producer's Generating Facility or otherwise, Producer may elect
to abandon or reserve such facilities consistent with the terms of its agreement with
CPAU. If Producer elects to reserve idle Interconnection Facilities or Distribution
System modifications, CPAU shall be entitled to continue to Charge Producer for the
costs related to the ongoing operation and maintenance of the Special Facilities.
d. Refund of Salvage Value. When a Producer elects to abandon the Special Facilities
for which it has either advanced the installed costs or constructed and transferred to
CPAU, the Producer shall not receive a credit for the net salvage value of the Special
Facilities.
F. METERING, MONITORING AND TELEMETRY
1. GENERAL REQUIREMENTS
All Generating Facilities shall be metered in accordance with this Section F and shall
meet all applicable standards of CPAU contained in CPAU’s applicable rules and
published CPAU manuals dealing with Metering specifications. For general metering
requirements, see CPAU Rule and Regulation 15. For net metering requirements, see
CPAU Rule and Regulation 29.
2. METERING BY CPAU
The ownership, installation, operation, reading and testing of revenue Metering Equipment
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 34
for Generating Facilities shall be by CPAU only.
3. NET GENERATION METERING
For purposes of monitoring Generating Facility operation to determine standby Charges and
applicable non-bypassable Charges as defined in CPAU’s tariffs, and for Distribution System
planning and operations, consistent with Section B.4 of this Rule, CPAU shall have the right
to specify the type, and require the installation of Net Generation Metering equipment.
CPAU shall only require Net Generation Metering to the extent that less intrusive and/or
more cost effective options for providing the necessary Generating Facility output data are
not available. In exercising its discretion to require Net Generation Metering, CPAU shall
consider all relevant factors, including but not limited to:
a. Data requirements in proportion to need for information;
b. Producer’s election to install equipment that adequately addresses CPAU’s
operational requirements;
c. Accuracy and type of required Metering consistent with purposes of collecting data;
d. Cost of Metering relative to the need for and accuracy of the data;
e. The Generating Facility’s size relative to the cost of the Metering/monitoring;
f. Other means of obtaining the data (e.g., Generating Facility logs, proxy data etc.);
and
g. Requirements under any Interconnection Agreement with the Producer.
4. POINT OF COMMON COUPLING METERING
For purposes of assessing CPAU Charges for retail service, the Producer’s PCC Metering
shall be reviewed by CPAU, and if required, replaced to ensure that it will appropriately
measure Electric power according to the Provisions of the Customer’s Electric Service tariff.
Where required, the Customer’s existing Meter may be replaced with a bi-directional meter
so that power deliveries to and from the Producer’s site can be separately recorded.
Alternately, the Producer may, at its sole option and cost, require CPAU to install Multi-
Metering Equipment to separately record power deliveries to CPAU’s Distribution System
and retail purchases from CPAU. Where necessary, such PCC Metering shall be designed to
prevent reverse registration.
5. TELEMETERING
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 12-12-2016
Sheet No. 35
If the nameplate rating of the Generating Facility is 1 MW or greater, telemetering equipment
at the Net Generator Metering location may be required at the Producer's expense. If the
Generating Facility is interconnected to a portion of CPAU’s Distribution System operating
at a voltage below 10 kV, then Telemetering equipment may be required on Generating
Facilities 250 kW or greater. CPAU shall only require Telemetering to the extent that less
intrusive and/or more cost effective options for providing the necessary data in real time are
not available
6. LOCATION
Where CPAU-owned Metering is located on the Producer’s Premises, Producer shall
provide, at no expense to CPAU, a suitable location for all such Metering Equipment as set
forth in CPAU Rule and Regulation 15.
7. COSTS OF METERING
The Producer will bear all costs of the Metering required by this Rule, including the
incremental costs of operating and maintaining the Metering Equipment.
(END)
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 12
TABLE OF CONTENTS:
A. APPLICABILITY ......................................................................................................................................................... 2
B. GENERAL RULES, RIGHTS AND OBLIGATIONS ................................................................................................. 2
C. APPLICATION AND INTERCONNECTION PROCESS......................................................................................... 65
1. APPLICATION PROCESS .......................................................................................................................... 65
2. OVERVIEW OF THE INTERCONNECTION REVIEW PROCESS.......................................................... 75
3. COMMISSIONING TESTING AND PARALLEL OPERATION .......................................................... 1510
4. WITHDRAWAL / CANCELLATION ..................................................................................................... 1711
D. GENERATING FACILITY DESIGN AND OPERATING REQUIREMENTS .................................................... 1811
1. GENERAL INTERCONNECTION AND PROTECTION FUNCTION REQUIREMENTS .............. 181112
2. PREVENTION OF INTERFERENCE ..................................................................................................... 2114
3. TECHNOLOGY SPECIFIC REQUIREMENTS ...................................................................................... 2819
4. SUPPLEMENTAL GENERATING FACILITY REQUIREMENTS ...................................................... 3020
5. SMART INVERTER GENERATING FACILITY DESIGN AND OPERATING REQUIREMENTS .. 3221
E. INTERCONNECTION FACILITIES AND DISTRIBUTION SYSTEM MODIFICATIONS OWNERSHIP AND
COST ALLOCATION ............................................................................................................................................ 4231
1. SCOPE AND OWNERSHIP OF INTERCONNECTION FACILITIES AND DISTRIBUTION SYSTEM
MODIFICATIONS ................................................................................................................................... 4231
2. RESPONSIBILITY OF COSTS OF INTERCONNECTING A GENERATING FACILITY ............. 423132
3. INSTALLATION AND FINANCING OF INTERCONNECTION FACILITIES AND DISTRIBUTION
SYSTEM MODIFICATIONS ............................................................................................................... 443233
F. METERING, MONITORING AND TELEMETRY ............................................................................................... 4533
1. GENERAL REQUIREMENTS ................................................................................................................ 4533
2. METERING BY CPAU ........................................................................................................................ 453334
3. NET GENERATION METERING ....................................................................................................... 453334
4. POINT OF COMMON COUPLING METERING ................................................................................... 4634
5. TELEMETERING ................................................................................................................................ 463435
6. LOCATION .............................................................................................................................................. 4635
7. COSTS OF METERING ........................................................................................................................... 4735
ATTACHMENT C
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 22
A. APPLICABILITY
This Rule describes the Interconnection, Operating and Metering and operating requirements for
Generating Facilities to be connected to the City of Palo Alto Utilities (CPAU) Electric
Distribution System. Subject to the requirements of this Rule, CPAU will allow the
Interconnection of Generating Facilities with its Distribution System.
In order to provide for uniformity and to encourage the Interconnection of renewable energy
generation, this Rule has been writtenis intended to be generally consistent with the technical
requirements of CPUCCalifornia Public Utilities Commission Rule 21 and IEEE 1547, as
amended.
Language from IEEE 1547 that has been adopted directly (as opposed to paraphrased language
or previous language that was determined to be consistent with IEEE 1547) is followed by a
citation that lists the clause from which the language derived. For example, IEEE 1547-4.1.1 is a
reference to Clause 4.1.1.
In the event of any conflict between this Rule and any of the CPUC Rule 21 and IEEE 1547
standards listed herein, the requirements of this Rule shall take precedence.
B. GENERAL RULES, RIGHTS AND OBLIGATIONS
1. Prior Authorization Required to Interconnect and Operate. A Producer must comply with
this Rule, execute anAn executed Interconnection Agreement or, if a Producer is a
customer-generator, as that term is used in Rule and Regulation 29, a Net Energy
Metering and Interconnection Agreement with CPAU, and receive, as applicable, is
required in addition to receiving CPAU’s express written permission before Parallel
Operation of itsa Generating Facility with CPAU’s Distribution System. CPAU shall
apply this Rule in a non-discriminatory manner and shall not unreasonably withhold its
permission for Parallel Operation of Producer’s Generating FacilityFacilities with
CPAU’s Distribution System.
2. Separate Agreements Required for Other Services. A Producer requiringSeparate
Agreements are required for the provision of other Electric Services from CPAU
including, but not limited to, Distribution Service provided by CPAU during periods of
Curtailment or interruption of the Producer’sa Generating Facility, will enter into
agreements with CPAU for such Services in accordance with CPAU’s Rules &
Regulations and Utility Rates.
3. Service Not Provided With Interconnection. Interconnection with CPAU's Distribution
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 32
System under this Rule does not provide a Producer anyprovides no rights to utilize
CPAU's Distribution System for the transmission, distribution, or wheeling of
Electricelectric power.
4. Compliance Withwith Laws, Rules & Regulations and Utility Rates. A
ProducerApplicants shall ascertain and comply with applicable CPAU Rules &
Regulations and Utility Rates; applicable Federal Energy Regulatory Commission
(FERC) approved rules, tariffs and regulations; and any local, state or federal Law,
statute or regulation which applies to the design, siting, construction, installation,
operation, or any other aspect of the Producer’sApplicant’s Generating Facility and
Interconnection Facilities.
5. Design Reviews and Inspections. CPAU shall havehas the right to review the design of a
Producer’san Applicant’s Generating Facility and Interconnection Facilities and to
inspect a Producer’sthe Generating Facility and/or Interconnection Facilities prior to the
commencement of Parallel Operation with CPAU’s Distribution System. CPAU may
require a ProducerApplicants to make modifications as necessary to comply with the
requirements of this RuleCPAU Rules and Regulations or other reasonable requirements.
CPAU’s review and authorization for Parallel Operation shall not be construed as
confirming or endorsing the Producer’sApplicant’s design or as warranting the
Generating Facility and/or Interconnection Facilities’ safety, durability or reliability.
CPAU shallis not, by reason of such review or lack of review, be responsible for the
adequacy or capacity of such equipmentFacilities.
6. Right to Access. A Producer’sCustomer Generating Facility and Interconnection
Facilities shall be accessible to CPAU personnel whenever necessary for CPAU to
perform its duties and exercise its rights under its Rules &and Regulations and Utility
Rates and any Interconnection Agreement, including the Net Energy Metering and
Interconnection Agreement, between CPAU and the Producer.
7. Confidentiality of Information. Any information pertaining to Generating Facility and/or
Interconnection Facilities provided to CPAU by a Producer shall be treated by CPAU in a
confidential manner. CPAU shall not use information contained in the Application to
propose discounted rates to the Customer unless authorized to do so by the Customer or
the information is provided to CPAU by the Customer through other means.
7. 8. Prudent Operation and Maintenance Required. A ProducerThe Customer shall
operate and maintain its Generating Facility and Interconnection Facilities in accordance
with Prudent Electrical Practices and shall maintain compliance with this RuleCPAU
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 42
Rules and Regulations.
9. Curtailment and Disconnection. CPAU may limit the operation or, disconnect or require
the disconnection of a Producer’sCustomer’s Generating Facility from CPAU’s
Distribution System at any time, with or without notice, in the event of an Emergency, or
to correct Unsafe Operating Conditions. CPAU may also limit the operation or,
disconnect or require the disconnection of
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 5
8. a Producer’sCustomer’s Generating Facility from CPAU’s Distribution System upon the
Provision ofwith reasonable written notice: (1) to allow for routine maintenance, repairs
or modifications to CPAU’s Distribution System; (2) upon CPAU’s determination that a
Producer’sCustomer’s Generating Facility is not in compliance with this Ruleany CPAU
Rules and Regulations; or (3) upon termination of the applicable Interconnection
Agreement or the Net Energy Metering and Interconnection Agreement. Upon the
Producer’sWithin a reasonable period after the Customer’s written request, CPAU
shallwill provide a written explanation of the reason for such Curtailment or
disconnection.
9. Coordination with Affected Systems. CPAU will notify the Affected System Operators
that are potentially affected by an Applicant’s Interconnection Request(s). CPAU will
coordinate the conduct of any studies required to determine the impact of the
Interconnection Request on Affected Systems with Affected System Operators and, if
possible, include those results in its Interconnection Study. CPAU will invite such
Affected System Operators to all meetings held with Applicant as required by this Rule.
Applicants and transmission providers which may be an Affected System shall cooperate
with CPAU in all matters related to the conduct of relevant studies and the determination
of modifications to Affected Systems. Applicant shall enter into an agreement with the
owner of the Affected System, as applicable and upon request by CPAU. The agreement
will specify the terms governing payments to be made by Applicant to the owner of the
Affected System as well as the repayment, if applicable, by the owner of the Affected
System.
10. Transferability of Interconnection Request. An Applicant may transfer its Interconnection
Request to another entity only if such entity acquires the proposed Generating Facility
identified in the Interconnection Request and the Point of Interconnection and operating
parameters do not change. CPAU at its discretion may deny such requests if CPAU
determines applicable requirements will not be met as a result of the transfer.
11. Special Provisions Applicable to Net Energy Metering Applicants (NEM).
Notwithstanding any other provision in this Rule:
a. For Generating Facilities qualifying for service under PUC Sections 2827, 2827.8
and 2827.10, as amended, the Applicant is not responsible for payment of study
costs.
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 6
b. For Generating Facilities qualifying for service under PUC Sections 2827 and
2827.8, as amended, CPAU’s approval for Interconnection will normally be
processed not later than thirty (30) Business Days following CPAU’s receipt of:
i. a completed Net Energy Metering Interconnection Request including all
supporting documents and required payments;
ii. a completed signed Net Energy Metering Generator Interconnection
Agreement; and
iii. evidence of Applicant’s final electric inspection clearance from the Palo
Alto Building Department.
If the 30-day period cannot be met, CPAU will notify Applicant of the reason for
the inability to process the Interconnection Request and the expected completion
date.
Applicants with PUC Section 2827 Generating Facilities that include non-inverter
based Generators and/or Generators with non-Certified Equipment should submit
a completed Net Energy Metering Interconnection Request, including all
supporting documents sufficient for CPAU to start the review process, without
waiting for the final inspection clearance. Applicants with such Generating
Facilities are advised to submit their Interconnection Request at least six (6)
months in advance of their planned Commercial Operation Date. Depending on
the size and location of these Generating Facilities, additional time for review and
study may be required.
C. APPLICATION AND INTERCONNECTION PROCESS
1. APPLICATION PROCESS
a. a. Applicant initiates contact with CPAU. Upon request, CPAU will provide
information and documents (such as sample agreements, Load Sheets, technical
information, listing of Certified Equipment, applicable Rate Schedules and
Metering requirements) to a potential Applicant. Unless otherwise agreed upon,
all such information shall normally be sent to the Applicant within three
(3) Business Days following the initial request from the Applicant.a. Utility
Service Application (Application).
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 7
b. Applicant Completes a Load Sheet. All Applicants shallmust complete and
submit a Load Sheetthe Application and three (3) sets of plan drawings for
review. Load Sheets and plans may be dropped off at the Development Center
located at 285 Hamilton Avenue, or Utilities Engineering at 1007 Elwell Court..
1. CPAU shall complete the Initial Review, absent any extraordinary
circumstances, within 10 Business Days of receiving the Load Sheet and
plans. If defects are noted, CPAU and Applicant shall cooperate to
establish a satisfactory Application.
2. Applications that are over one year old (from the date of CPAU’s
acknowledgement) without a signed Interconnection Agreement or Net
Energy Metering and Interconnection Agreement, or a Generating Facility
that has not been approved for Parallel Operation within one year of
completion of all applicable review and/or studies are subject to
cancellation by CPAU; however, CPAU may not cancel an Application if
the Producer provides reasonable evidence that the project is still active.
c. CPAU Performs an Initial and Supplemental Review and Develops Preliminary
Cost Estimates and Interconnection Requirements.
2. 1. UPON RECEIPT OF A SATISFACTORILY COMPLETED
APPLICATION AND ANY ADDITIONAL INFORMATION NECESSARY TO
EVALUATE THE INTERCONNECTION OF A GENERATING
FACILITYOVERVIEW OF THE INTERCONNECTION REVIEW PROCESS
a. Valid Interconnection Request. After an Application is received and deemed
complete and valid, CPAU will start the interconnection review process. See
Section B.11 for special provisions related to the timeframe and costs applicable
to NEM Applicants.
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 8
a.b. Initial Review. Upon receipt of a complete and valid Application and plans,
CPAU shall perform an Initial Review using the process defined in Section G. .
The Initial Review determines if: (a) (i) the Generating Facility qualifies for a
Simplified Interconnection;, or (bii) the Generating Facility requires a
Supplemental Review. Absent extraordinary circumstances, CPAU shall notify
Applicant in writing of the results of Initial Review within ten (10) Business Days
following validation of an Interconnection Request.
2. CPAU shall complete its Passage of Initial Review, absent any
extraordinary circumstances, within 10 Business Days after receipt of a
completed Application including Load Sheet and plan drawings. If the
Initial Review determines the proposed Generating Facility can be
Interconnected by means of a Simplified. For Interconnection, CPAU will
provide the Applicant with an Interconnection Agreement for Applicant’s
signature.
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 9
3. If the Generating Facility does not Requests that pass the Initial Review
for Simplifiedand do not require Interconnection as proposedFacilities or
Distribution Upgrades, CPAU will notifyprovide the Applicant and performwith a
Supplemental Review. Applicant shall pay the applicable Advance Engineering
Fee described in Rate Schedule E-15 unless the Application is withdrawn. The
Supplemental Review will result in CPAU providing either: (a)Generator
Interconnection requirements beyond those for a Simplified Interconnection, and
anAgreement or Generator Interconnection Agreement or theand Net Energy
Metering and Interconnection Agreement for Applicant’s signature; or (b) a cost
estimate and schedule for an Interconnection Study. The Supplemental Review
shall be completed, absent any extraordinary circumstances, within 20 Business
Days of receipt of a completed Application and fees. The Interconnection Study
may require additional fees and more time to complete, depending on the
complexity of the project to be studied. If the Supplemental Review determines
that new or modified Utility-owned distribution and/or protection facilities are
required, the Applicant will be charged the estimated cost of any Utility-owned
facilities determined to be required by the Review. These facilities will be treated
as Special Facilities for the purpose of determining Applicant costs. , if
applicable, within fifteen (15) Business Days of providing notice of Initial Review
results. For Interconnection Requests
d. When Required, Applicant and CPAU Commit to Additional Interconnection
Study Steps.
When a Supplemental Review reveals that the proposed Generating Facility
cannot be Interconnected to CPAU’s Distribution System by means of a
Simplified Interconnection, or that significantpass the Initial Review but also
require Interconnection Facilities installed on CPAU’s system or Distribution
System modifications will be needed to accommodate an Applicant’s Generating
Facility, CPAU and Applicant shall enter into an agreement that provides for
CPAU to perform additional studies, facility design and engineering, and to
provide an estimate for actual cost billing to the Applicant, at the Applicant’s
expense (the Advanced Engineering Fee). The Interconnection Study agreement
shall set forth CPAU’s estimated schedule and Charges for completing such work.
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 10
2. INTERCONNECTION PROCESS
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 11
i. a. Applicant and CPAU enter into an Interconnection Agreement or a
New Energy Metering and Interconnection Agreement and, where
required, a Special Facilities Agreement forupgrades, CPAU will provide
Applicant with a non-binding cost estimate of the Interconnection
Facilities or Distribution System Modifications. upgrades within thirty
(30) Business Days of providing notice of Initial Review results. These
facilities may be treated as Special Facilities (depending on circumstance)
for the purpose of determining Applicant costs. The applicant can then
proceed with executing an Interconnection Agreement in accordance with
Section C.1.e below.
ii. Failure of Initial Review. For Interconnection Requests that fail Initial
Review, CPAU shallwill provide the technical reason, data and analysis
supporting the Initial Review results in writing and provide Applicant the
option to proceed directly to a Supplemental Review. The Applicant shall
notify CPAU within ten (10) Business Days following such notification
whether to (i) proceed to a Supplemental Review, or (ii) withdraw the
Interconnection Request. Applicants that elect to proceed to a
Supplemental Review shall provide a nonrefundable Advance Engineering
Fee set forth in Rate Schedule E-15 with their response. CPAU will
proceed with the Supplemental Review once payment of the required
Advance Engineering Fee has been received. If Applicant fails to notify
CPAU within ten (10) Business Days of such notification, the
Interconnection Request will be deemed withdrawn.
iii. Additional Initial Review Information. No changes may be made to the
planned Point of Interconnection or Generating Facility size included in
the Interconnection Request during the review process, unless such
changes are agreed to by CPAU. Where agreement has not been reached,
Applicants choosing to change the Point of Interconnection or Generating
Facility size must reapply and submit a new Interconnection Request.
c. Supplemental Review.
If Applicant requests a Supplemental Review and submits an Advance
Engineering Fee as described in Rate Schedule E-15, if required, CPAU will
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 12
perform the Supplemental Review using the review process in Section H.2., and
complete the Supplemental Review within twenty (20) Business Days, absent
extraordinary circumstances, following authorization and receipt of the fee. The
Supplemental Review will determine if (i) the Generating Facility qualifies for
interconnection, or interconnection with additional requirements, or (ii) the
Generating Facility requires a Detailed Study.
Theexecutable version of the Applicant must provide the following data to CPAU
when requesting a Supplemental Review:
Generator:
1. MVA Rating
2. kV Rating
3. Base MVA
4. Base kV
5. Xd" (direct axis subtransient reactance)
6. Xd' (direct axis transient reactance)
7. Xd (Synchronous reactance)
8. X2 (Negative Sequence reactance)
9. X0 (Zero Sequence reactance)
Generating Facility Transformer Data:
1. Winding configuration (delta-Wye gnd or Wye gnd-Delta)
2. MVA Rating
3. KV Rating
4. Base MVA
5. Base KV
6. Z1 HV-LV
7. Z0 HV-LV
Line Data:
1. Impedance data for line from Transformer to POI (if applicable)
2. Z1
3. Z0
4. Point of Interconnection (POI) Location
i. Passage of Supplemental Review. For Interconnection Requests that pass a
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 13
Supplemental Review and do not require Interconnection Facilities or
Distribution Upgrades, CPAU will provide Applicant with a Generator
Interconnection Agreement or the Net Energy Metering and within fifteen
(15) Business Days of providing notice of the Supplemental Review
results. For Interconnection Requests that pass a Supplemental Review but
also require Interconnection Facilities or Distribution upgrades, CPAU
will provide Applicant with a non-binding cost estimate of the
Interconnection Facilities or Distribution upgrades within thirty (30)
Business Days of providing notice of the Supplemental Review results.
These facilities may be treated as Special Facilities (depending on
circumstance) for the purpose of determining Applicant costs. The
Applicant can then proceed with executing an Interconnection Agreement
in accordance with Section C.1.e below.
ii. Failure of Supplemental Review. For Interconnection Requests that fail a
Supplemental Review, CPAU will provide the technical reason, data and
analysis supporting the Supplemental Review results in writing and
provide Applicant the option to proceed directly to a cost estimate and
schedule for a Detailed Study. The Applicant shall notify CPAU within
fifteen (15) Business Days following such notification whether to (i)
proceed to a cost estimate and schedule for a Detailed Study, or (ii)
withdraw the Interconnection Request. If the Applicant elects to proceed
with the cost estimate and schedule for a Detailed Study, CPAU shall
provide Applicant with a non-binding cost estimate and schedule within
thirty (30) Business Days of the Applicant providing notice to proceed. If
Applicant fails to notify CPAU within fifteen (15) Business Days of such
notification, the Interconnection Request shall be deemed withdrawn.
d.as appropriate, for Detailed Study.
If the Applicant requests to proceed with the cost estimate and schedule for a
Detailed Study as provided by CPAU in Section C.1.c.ii above, CPAU and the
Applicant may enter into a Detailed Study agreement that provides for CPAU to
perform additional studies, facility design and engineering, and to provide an
estimate for the actual cost of CPAU provided Interconnection Facilities or
Distribution Upgrades as required to allow for the interconnection of the
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 14
generating facility at the Applicant’s Generating Facility and desired mode of
operation. Where the Supplemental Review or Interconnection Study performed
by CPAU has determined that modifications or additions to expense. The Detailed
Study agreement shall set forth CPAU’s estimated time schedule and charges for
completing such work. Note: the Detailed Study fee shall be waived for NEM
applicants meeting the requirements of Section B.11. Following payment of the
cost estimate by the Applicant, CPAU will proceed with the Detail Study in
accordance with the agreed upon time schedule, and upon completion of the
Detailed Study, CPAU will provide the results in writing to the Applicant along
with the final cost estimate of any required Interconnection or Distribution
Facilities. These facilities may be treated as Special Facilities (depending on
circumstance) for the purpose of determining Applicant costs. The applicant can
then proceed with executing an Interconnection Agreement in accordance with
Section C.1.e below.
e. Execution of the Generator Interconnection Agreement.
i. Following the receipt of a cost estimate for any Distribution Upgrades
and/or Interconnection Facilities that have been identified (Applicants that
did not require a cost estimate may proceed to Section C.1.e.ii below),
Applicant shall notify CPAU within fifteen (15) Business Days whether
Applicant: (i) requests a Generator Interconnection Agreement, or (ii)
withdraws its Distribution System are required, or that additional
Interconnection Facilities will be necessary to accommodate an
Interconnection Request. If Applicant fails to notify CPAU within fifteen
(15) Business Days, the Interconnection Request shall be deemed
withdrawn. If Applicant elects to proceed to a Generator Interconnection
Agreement, CPAU will provide Applicant with a Generator
Interconnection Agreement for Applicant’s Generating Facility, CPAU
may also provide the Applicant with a Special Facilities Agreement. This
agreement shall set forth CPAU and the signature within fifteen (15)
Business Days of Applicant’s responsibilities, completion schedules, and
estimated costs for the required workrequest.
b. Where applicable, CPAU installs required Interconnection Facilities or modifies
CPAU’s Distribution System.
ii. After executing the applicable agreementsUpon receipt of a draft
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 15
Generator Interconnection Agreement, Applicant has ninety (90) Calendar
Days to sign and return the Generator Interconnection Agreement.
Applicant shall provide to CPAU written comments, or notification of a
lack of any comments, on the draft Generator Interconnection Agreement
and appendices within thirty (30) Calendar Days. At the request of
Applicant, CPAU shall begin negotiations with Applicant at any time after
CPAU provides Applicant with the draft Generator Interconnection
Agreement, which contains in its appendices the cost estimate for any
Distribution Upgrades and/or Interconnection Facilities that have been
identified by CPAU. If Applicant fails to execute the Generator
Interconnection Agreement within the ninety (90) Calendar Days
described in this section, the Interconnection Request shall be deemed
withdrawn.
ii.iii. After Applicant has executed the Generator Interconnection Agreement
and paid the final invoice for estimated cost of Distribution Upgrades
and/or Interconnection Facilities, CPAU will commence with the design,
procurement, construction/ and installation of CPAU’s Distribution
System modifications or Interconnection Facilities which have been
identified in the agreements. The parties required facilities identified in
the Generator Interconnection Agreement. (Note: once the Applicant
executes the agreement, the Applicant is thereafter referred to as a
Producer) CPAU and Producer will use good faith efforts to meet
schedules and estimated costs as appropriatein accordance with the
requirements of the Generator Interconnection Agreement. Producer is
responsible for all costs associated with Parallel Operation to support the
safe and reliable operation of the Distribution System and Transmission
System.
3. C. PRODUCER ARRANGES FOR AND COMPLETES PRE-
PARALLELCOMMISSIONING TESTING AND PARALLEL OPERATION
a. Commissioning Testing of Generating Facility and Producer’s Interconnection
Facilities.
.
The Producer is responsible for commissioning and testing new Generating Facilities and
associated Interconnection Facilities to ensure compliance with the safety and
reliability Provisionsprovisions of this Rule prior to being operated in parallel
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 16
with CPAU’s Distribution or Transmission System. For non-Certified
Equipment, Producer shall develop a written testing plan to be submitted to
CPAU for its review and acceptance. Where applicable, the testing plan shall
include the installation test procedures published by the manufacturer of the
Generating Facility or Interconnection Facilities. Facility testing shall be
conducted at a mutually agreeable time, and CPAU shall be given the opportunity
to witness the tests.
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 17
Where applicable, the test plan shall include the installation test procedures
published by the manufacturer of the generation or Interconnection equipment.
Facility testing shall be conducted at a mutually agreeable time, and CPAU and
Producer shall be given the opportunity to witness the tests.
d. CPAU Authorizes
b. Parallel Operation or Momentary Parallel Operation.
CPAU shall authorize the Producer’s Generating Facility for Parallel Operation or
Momentary Parallel Operation with CPAU’s Distribution System, in writing,
within 5 days of satisfactory compliance with the terms of all applicable
agreements. Compliance may include, but not be limited to, Provision of any
required documentation and satisfactorily completing any required inspections or
tests as described herein or in the agreements formed between the Producer and
CPAU. A Producer shall not commence Parallel Operation of its Generating
Facility with CPAU’s system unless it has received CPAU’s express written
permission to do so. CPAU will authorize Producer’s Generating Facility for
Parallel Operation or momentary Parallel Operation with CPAU’s Distribution or
Transmission System, in writing, within five (5) Calendar Days of satisfactory
compliance with the terms of all applicable agreements.
4. D. WITHDRAWAL / CANCELLATION
Applicant may withdraw its Interconnection Request at any time by written notice of
such withdrawal to CPAU. In addition, after receipt of the Interconnection Request, if
Applicant fails to adhere to the requirements and timelines of this rule, CPAU shall deem
the Interconnection Request to be withdrawn and shall provide written notice to
Applicant of the deemed withdrawal within five (5) Business Days and an explanation of
the reasons for such deemed withdrawal. Upon receipt of such written notice, Applicant
shall have five (5) Business Days in which to either respond with information or action
that either cures the deficiency or supports its position that the deemed withdrawal was
erroneous.
Applications that are over one year old (from the date of CPAU’s receipt) without
resulting in a signed Interconnection Agreement or Net Energy Metering and
Interconnection Agreement, or approval for Parallel Operation of a Generating Facility
within one year of completion of all applicable review and/or studies, are subject to
cancellation by CPAU.
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 18
D. GENERATING FACILITY DESIGN AND OPERATING REQUIREMENTS
This section D. has been revised to be consistent with the requirements of ANSI/IEEE 1547-
2003 Standard for Interconnecting Distributed Resources with Electric Power Systems (IEEE
1547). Exceptions are taken to IEEE 1547 Clauses 4.1.4.2 Distribution Secondary Spot
Networks and Clauses 4.1.8.1 or 5.1.3.1, which address Protection from Electromagnetic
Interference. Also, RULE AND REGULATIONNote that this Rule and Regulation 27 does not
adopt the Generating Facility power limitation of 10 MW incorporated in IEEE 1547.
1.
1. GENERAL INTERCONNECTION AND PROTECTION FUNCTION
REQUIREMENTS
The Protective Functions and requirements of this Rule are designed to protect CPAU’s
Distribution System and not the Generating Facility. A ProducerCustomer shall be solely
responsible for providing adequate protection for its Generating Facility and
Interconnection Facilities. The Producer’sCustomer’s Protective Functions shall not
impact the operation of other Protective Functions utilized on CPAU’s Distribution
System in a manner that would affect CPAU’s capability of providing reliable service to
its Customers.
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 19
a. Protective Functions Required. A Generating Facility operating in parallel with
CPAU’s Distribution System shall be equipped with the following Protective
Functions to sense abnormal conditions on CPAU’s Distribution System and
cause the Generating Facility to be automatically disconnected from CPAU’s
Distribution System or to prevent the Generating Facility from being connected to
CPAU’s Distribution System inappropriately:
1i. Over and under voltage trip functions and over and under frequency trip
functions;
2ii. A voltage and frequency sensing and time-delay Function to prevent the
Generating Facility from energizing a de-energized Distribution System
circuit and to prevent the Generating Facility from reconnecting with
CPAU’s Distribution System unless CPAU’s Distribution System service
voltage and frequency is within the ANSI C84.1-1995 Table 1 Range B
Voltage Range of 106V to 127V on a 120V basis, inclusive, and a
frequency range of 59.3 Hz to 60.5 Hz, inclusive, and are stable for at least
60 seconds, and;
3iii. A Function to prevent the Generating Facility from contributing to the
formation of an Unintended Island, and cease to energize the CPAU
system within two seconds of the formation of an Unintended Island.
The Generating Facility shall cease to energize CPAU’s Distribution
System for faults on CPAU’s Distribution System circuit to which it is
connected (IEEE1547-4.2.1). The Generating Facility shall cease to
energize CPAU’s Distribution circuit prior to re-closure by CPAU’s
Distribution System equipment (IEEE1547-4.2.2).
b. Momentary Paralleling Generating Facilities. With CPAU’s approval, the
transfer switch or scheme used to transfer the Producer’s Loads from CPAU’s
Distribution System to Producer’s Generating Facility may be used in lieu of the
Protective Functions required for Parallel Operation.
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 20
c. Suitable Equipment Required. Circuit breakers or other interrupting devices
located at the Point of Common Coupling must be Certified or "Listed" (as
defined in Article 100, the Definitions Section of the National Electrical Code) as
suitable for their intended application. This includes being capable of interrupting
the maximum available fault current expected at their location. Producer’s
Generating Facility and Interconnection Facilities shall be designed so that the
failure of any one device shall not potentially compromise the safety and
reliability of CPAU’s Distribution System.
The Generating Facility’s paralleling-device shall be capable of withstanding
220% of the Interconnection Facilities’ rated voltage (IEEE 1547-4.1.8.3). The
Interconnection Facilities shall have the capability to withstand voltage and
current surges in accordance with the environments defined in IEEE Std
C62.41.2-2002 or IEEE Std C37.90.1-2002 as applicable and as described in
IEEE 1547-4.1.8.2.
d. Visible Disconnect Required: The Producer shall furnish and install a ganged,
manually-operated isolating switch (or a comparable device mutually agreed upon
by CPAU and the Producer) near the Point of Interconnection to isolate the
Generating Facility from CPAU’s Distribution System. The device does not have
to be rated for Load break nor provide over-currentovercurrent protection.
The device must:
1i. Allow visible verification that separation has been accomplished. (This
requirement may be met by opening the enclosure to observe contact
separation.) Molded case circuit breakers do not meet the visible contact
requirement and are not acceptable as a Visible Disconnect device.
2ii. Include markings or signage that clearly indicates open and closed
positions.
3iii. Be capable of being reached quickly and conveniently 24 hours a day by
CPAU personnel for construction, maintenance, inspection, testing or
reading, without obstacles or requiring those seeking access to obtain
keys, special permission, or security clearances.
4iv. Be capable of being locked in the open position.
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 21
5v. Be clearly marked on the submitted Single Line Diagram and its type and
location approved by the CPAU prior to installation. If the device is not
adjacent to the Point of Common Coupling (PCC,), permanent signage
must be installed at a CPAU-approved location providing a clear
description of the location of the device.
Generating Facilities with Non-Islanding inverters totaling one (1) kilovolt-
ampere (kVA) or less are exempt from this requirement.
e. Drawings Required. Prior to Parallel Operation or Momentary Parallel Operation
of the Generating Facility, CPAU shall approve the Producer's Protective
Function and control diagrams. A Generating Facility equipped with a Protective
Function and control scheme previously approved by CPAU for system-wide
application or only Certified Equipment may satisfy this requirement by reference
to previously approved drawings and diagrams.
f. Generating Facility Conditions Not Identified. In the event this Rule does not
address the Interconnection conditions for a particular Generating Facility, CPAU
and Producer may agree upon other arrangements, to be approved by CPAU.
2. 2. PREVENTION OF INTERFERENCE
The Producer shall not operate a Generating Facility or Interconnection Facilities that
superimpose a voltage or current upon CPAU’s Distribution System that interferes with
CPAU operations, service to CPAU Customers, or communication facilities. If such
interference occurs, the Producer must diligently pursue and take corrective action at its
own expense after being given notice and reasonable time to do so by CPAU. If the
Producer does not take corrective action in a timely manner, or continues to operate the
facilities causing interference without restriction or limit, CPAU may, without liability,
disconnect the Producer's facilities from CPAU’s Distribution System, in accordance
with Section B.98 of this Rule. To eliminate undesirable interference caused by its
operation, each Generating Facility shall meet the following criteria:
a. Voltage Regulation. The Generating Facility shall not actively regulate the
voltage at the PCC while in parallel with CPAU’s Distribution System. The
Generating Facility shall not cause the service voltage at other Customers to go
outside the requirements of ANSI C84.1-1995, Range A (IEEE 1547-4.1.1).
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 22
b.
b. Operating Voltage Range. The voltage ranges in Table D.1 define protective trip
limits for the Protective Function and are not intended to define or imply a voltage
regulation Function. A Generating Facility shall cease to energize CPAU’s
Distribution System within the prescribed trip time whenever the voltage at the
PCC deviates from the allowable voltage operating range. The Protective
Function shall detect and respond to voltage on all phases to which the Generating
Facility is connected.
1i. Generating Facilities (30 kVA or less).. Generating Facilities with a Gross
Nameplate Rating of 30 kVA or less shall be capable of operating within
the voltage range normally experienced on CPAU’s Distribution System.
The operating range from plus to minus 5% of the nominal voltage (e.g.
114 volts to 126 volts on a 120 volt base), at the service panel or PCC.
The trip settings at the generator terminals shall be selected in a manner
that minimizes nuisance tripping between 106 volts and 132 volts on a
120-volt base (88-110% of nominal voltage). ) to compensate for voltage
drop between the generator terminals and the PCC. Voltage shall be
detected at either the PCC or the Point of Interconnection. However, the
voltage range at the PCC with the generator on-line shall stay within +/-
5% of nominal.
2. Generating Facilities (greater than 30 kVA). CPAU may have specific
operating voltage ranges for a Generating Facility with a Gross Nameplate
Rating greater than 30 kVA, and may require adjustable operating voltage
settings. In the absence of such requirements, the Generating Facility
shall operate at a range between 88% and 110% of the applicable
Interconnection voltage. Voltage shall be detected at either the PCC or the
Point of Interconnection, with settings compensated to account for the
voltage at the PCC. Generating Facilities that are Certified Non-Islanding
or that meet one of the options of the Export Screen (Section l.3.b) may
detect voltage at the Point of Interconnection without compensation.
3
ii. Voltage Disturbances. Whenever CPAU’s Distribution System voltage at
the PCC varies from and remains outside normal (nominally 120 volts) by
the predetermined amounts set forth in Table D-.1, the Generating
Facility’s Protective Functions shall cause the Generator(s) to become
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 23
isolated from CPAU’s Distribution System:.
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 24
TABLE D.1: Voltage Trip Settings
Voltage at Point of Common Coupling Maximum Trip Time(1)
Assuming 120 V Base % of Nominal Voltage
# of Cycles
(Assuming 60 Hz
Nominal)
Seconds
Less than 60 Volts Less than 50% 10 Cycles 0.16 Seconds
Greater than or equal to
60 Volts but less than
106 Volts
Greater than or equal to
50% but less than 88% 120 Cycles 2 Seconds
Greater than or equal to
106 Volts but less than or
equal to 132 Volts
Greater than or equal to
88% but less than or
equal to 110%
Normal Operation
Greater than 132 Volts
but less than or
equal to 144 Volts
Greater than 110% but
less than or equal to
120%
60 Cycles 1 Second
Greater than 144 Volts Greater than 120% 10 Cycles 0.16 Seconds
(1) “Maximum Trip time” refers to the time between the onset of the abnormal condition and the
Generating Facility ceasing to energize CPAU’s Distribution System. Protective Function
sensing equipment and circuits may remain connected to CPAU’s Distribution System to allow
sensing of electrical conditions for use by the “reconnect” feature. The purpose of the allowed
time delay is to allow a Generating Facility to “ride through” short-term disturbances to avoid
nuisance tripping. Set points shall not be user adjustable (though they may be field adjustable by
qualified personnel). For Generating Facilities with a Gross Nameplate Rating greater than 30
kVA, set points shall be field adjustable and different voltage set points and trip times from those
in Table D.1 may be negotiated with CPAU.
c. Paralleling. The Generating Facility shall parallel with CPAU’s Distribution
System without causing a voltage fluctuation at the PCC greater than ±5% of the
prevailing voltage level of CPAU’s Distribution System at the PCC, and meet the
flicker requirements of D.2.d.
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 25
d. Flicker. The Generating Facility shall not create objectionable flicker for other
Customers on CPAU’s Distribution System. To minimize the adverse voltage
effects experienced by other Customers (IEEE 1547-4.3.2), flicker at the PCC
caused by the Generating Facility should not exceed the limits defined by the
“Maximum Borderline of Irritation Curve” identified in IEEE 519-1992 (IEEE
Recommended Practices and Requirements for Harmonic Control in Electric
Power Systems, IEEE STD 519-1992, Institute of Electrical and Electronic
Engineers, Piscataway, NJ). ). This requirement is necessary to minimize the
adverse voltage affects experienced by others Customers on CPAU’s Distribution
System. Generators may be connected and brought up to synchronous speed (as
an induction motor) provided these flicker limits are not exceeded.
e. Integration with CPAU’s Distribution System Grounding. The grounding scheme
of the Generating Facility Interconnection shall not cause over-voltages that
exceed the rating of the equipment connected to CPAUCPAU’s Distribution
System and shall not disrupt the coordination of the ground fault protection on
CPAU’s Distribution System (IEEE 1547-4.1.2). Also see Section F.
f. Frequency. CPAU’s controls system frequency, and theThe Generating Facility
shall operate in synchronism with CPAU’s Distribution System. Whenever
CPAU’s Distribution System Frequency at the PCC varies from and remains
outside normal (nominally 60 Hz) by the predetermined amounts set forth in
Table D.2, the Generating Facility’s Protective Functions shall cease to energize
CPAU’s Distribution System within the stated maximum trip time.
TABLE D.2: Frequency Trip Settings
Generating Facility Rating Frequency Range
(Assuming 60 Hz Nominal)
Maximum Trip Time (1)
(Assuming 60 Cycles per
Second
Less or equal to 30 kW
Less than 59.3 Hz 10 Cycles
Greater than 60.5 Hz 10 Cycles
Greater than 30 kW
Less than 57 Hz 10 Cycles
Less than an adjustable value
between 59.8 Hz and 57 Hz
but greater than 57 Hz (2)
Adjustable between 10 and
18,000 Cycles (2),(3)
Greater than 60.5 Hz 10 Cycles
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 26
(
1) “Maximum Trip time” refers to the time between the onset of the abnormal condition and the
Generating Facility ceasing to energize CPAU’s Distribution System. Protective Function
sensing equipment and circuits may remain connected to CPAU’s Distribution System to allow
sensing of electrical conditions for use by the “reconnect” feature. The purpose of the allowed
time delay is to allow a Generating Facility to “ride through” short-term disturbances to avoid
nuisance tripping. Set points shall not be user adjustable (though they may be field adjustable by
qualified personnel). For Generating Facilities with a Gross Nameplate Rating greater than
30 kVA, set points shall be field adjustable and different voltage set points and trip times from
those in Table D.2 may be negotiated with CPAU.
(2) Unless otherwise required by CPAU, a trip frequency of 59.3 Hz and a maximum trip time of 10
cycles shall be used.
(3) When a 10-cycle maximum trip time is used, a second under frequency trip setting is not
required.
g. Harmonics. When the Generating Facility is serving balanced linear Loads,
harmonic current injection into CPAU’s Distribution System at the PCC shall not
exceed the limits stated below in Table D.3. The harmonic current injections
shall be exclusive of any harmonic currents due to harmonic voltage distortion
present in CPAU’s Distribution System without the Generating Facility connected
(IEEE 1547-4.3.3). The harmonic distortion of a Generating Facility located at a
Customer’s site shall be evaluated using the same criteria as for the Host Loads.
Table D.3 Maximum Harmonic Current Distortion in Percent of Current (I)(1,2)
Individual
Harmonic Order h,
(odd harmonics) (3)
h<11 11 ≤ h < 17 17 ≤ h < 23 23 ≤ h < 35 35 ≤ h
Total
Demand
distortion
(TDD)
Max Distortion (%) 4.0 2.0 1.5 0.6 0.3 5.0
(1) IEEE 1547-4.3.3
(2) I = the greater of the maximum Host Load current average Demand over 15 or 30 minutes without the GF, or the GF rated current capacity (transformed to the PCC when a transformer exists between the GF and the PCC).
(3) Even harmonics are limited to 25% of the odd harmonic limits above.
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 27
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 28
h. Direct Current Injection. Generating Facilities should not inject direct current
greater than 0.5% of rated output current into CPAU’s Distribution System.
i. Power Factor. Each Generator in a Generating Facility shall be capable of
operating at some point within a Power Factor range from 0.9 leading to
0.9 lagging. Operation outside this range is acceptable provided the reactive
power of the Generating Facility is used to meet the reactive power needs of the
Host Loads or that reactive power is otherwise provided under tariff by CPAU.
The Producer shall notify CPAU if it is using the Generating Facility for Power
Factor correction. Unless otherwise agreed upon by the Producer and CPAU,
Generating Facilities shall automatically regulate Power Factor, not voltage, while
operating in parallel with CPAU’s Distribution System.
3. 3. TECHNOLOGY SPECIFIC REQUIREMENTS
a. Three-Phase Synchronous Generators. For three-phase Generators, the
Generating Facility circuit breakers shall be three-phase devices with electronic or
electromechanical control. The Producer shall be responsible for properly
synchronizing its Generating Facility with CPAU’s Distribution System by means
of either manual or automatic synchronizing equipment. Automatic
synchronizing is required for all synchronous Generators that have a Short Circuit
Contribution Ratio (SCCR) exceeding 0.05. Loss of synchronism protection is
not required except as may be necessary to meet D.2.d (Flicker) (IEEE 1547 -
4.2.5). Unless otherwise agreed upon by the Producer and CPAU, synchronous
Generators shall automatically regulate Power Factor, not voltage, while
operating in parallel with CPAU’s Distribution System. A power system
stabilization function is specifically not required for Generating Facilities under
10 MW Net Nameplate Rating. Ground Fault Protection is required for generators
> 40 kW. Voltage Restraint Overcurrent or Voltage Controlled Overcurrent relays
are required for generators or a group of generators > 400 kW.
b. Induction Generators. Induction Generators (except self-excited Induction
Generators) do not require a synchronizing Function. Starting or rapid Load
fluctuations on induction Generators can adversely impact CPAU’s Distribution
System's voltage. Corrective step-switched capacitors or other techniques may be
necessary and may cause undesirable ferro-resonance.ferroresonance. When
these counter measures (e.g.,. additional capacitors) are installed on the Producer's
side of the Point of Common Coupling, CPAU must review these measures.
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 29
Additional equipment may be required as determined in a Supplemental Review
or an Interconnectiona Detailed Study.
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 30
Ground Fault Protection is required for generators > 40 kW. Voltage Restraint
Overcurrent or Voltage Controlled Overcurrent relays are required for generators
or a group of generators > 400 kW.
c. Inverters. Only Certified inverters are approved for interconnection. Utility-
interactive inverters do not require separate synchronizing equipment. Non-
utility-interactive or “stand-alone” inverters shall not be used for Parallel
Operation with CPAU’s Distribution System. Inverters or a group of inverters >
400 kW require Ground Fault Protection.
Inverter based systems not classified as “Smart Inverters” may continue to be
installed per Section D.3.c until the later of either (1) December 31, 2015 or (2)
September 8, 2017, which is twelve (12) months after the date the Supplement SA
of UL-1741 (with California requirements) is approved. Section D.5 may be used
in all or in part, for inverter based technologies by mutual agreement of CPAU
and the Applicant.
The replacement of an existing inverter to an inverter that is of equal or greater
ability than the original is allowed per Section D.3.c. Section D.5 may be used in
all or in part, for replacement inverter based technologies by mutual agreement of
CPAU and the Applicant.
d. Single-Phase Generators. For single-phase Generators connected to a shared
single-phase secondary system, the maximum Net Nameplate Rating of the
Generating Facilities shall be 20 kVA. Generators connected to a center-tapped
service neutral 240-volt service must be installed such that no more than 6 kVA of
unbalanced power is applied to the two “legs” of the 240-volt service.service. The
current in the most heavily loaded leg must not exceed twice that of the other leg.
For Dedicated Distribution Transformer Services, the maximum Net Nameplate
Rating of a single-phase Generating Facility shall be the transformer nameplate
rating.
4. 4. SUPPLEMENTAL GENERATING FACILITY REQUIREMENTS
a. Fault Detection. A Generating Facility with an SCCR exceeding 0.1 or one that
does not cease to energize CPAU’s Distribution System within two seconds of the
formation of an Unintended Island shall be equipped with Protective Functions
designed to detect Distribution System faults, both line-to-line and line-to-ground,
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 31
and shall cease to energize CPAU’s Distribution System within two seconds of
the initiation of a fault.
b. Transfer Trip. For a Generating Facility that cannot detect Distribution System
faults (both line-to-line and line-to-ground) or the formation of an Unintended
Island, and cease to energize CPAU’s Distribution System within two seconds,
CPAU may require a Transfer Trip system or an equivalent Protective Function.
For net metered or non-net metered Generating Facilities, the Facility will be
considered capable of supporting an Unintended Island if the aggregate
distributed generation output is 80% or more of the Distribution System real -time
load kW seen at CPAU’s source-side Distribution Protection Device.
c. Reclose Blocking. Where the aggregate Generating Facility capacity exceeds
15% of the peak Load on any automatic reclosing device, CPAU may require
additional Protective Functions, including, but not limited to reclose-blocking on
some of the automatic reclosing devices.
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 32
E.
5. SMART INVERTER GENERATING FACILITY DESIGN AND OPERATING
REQUIREMENTS
Section D.3.c shall continue to be used for interconnection of inverter based technologies
until September 8, 2017, twelve (12) months after the date the Supplement SA of UL-
1741 (with CA requirements) is approved by the full UL-1741 Standards Technical Panel
(STP). Following such date, Section D.5 shall apply for interconnection of inverter based
technologies. Until such date, Section D.5 may be used in all or in part, for inverter based
technologies by mutual agreement of the CPAU and the Applicant.
The inverter requirements are intended to be consistent with ANSI/IEEE 1547- 2003 and
1547a Standard for Interconnecting Distributed Resources with Electric Power Systems
(IEEE 1547 including amendment 1547a). In the event of conflict between this Rule and
IEEE 1547-2003, this Rule shall take precedence. Exceptions are taken to IEEE 1547
Clauses 4.1.4.2 Distribution Secondary Spot Networks and Clauses 4.1.8.1 or 5.1.3.1,
which address Protection from Electromagnetic Interference. Rule 27 does not adopt the
Generating Facility power limitation of 10 MW incorporated in IEEE1547.
a. Protective Functions Required. Smart Inverters operating in parallel with CPAU’s
Distribution System shall be equipped with the following Protective Functions to
sense abnormal conditions on CPAU’s Distribution System and cause the Smart
Inverter to be automatically disconnected from CPAU’s Distribution System or to
prevent the Smart Inverter from being connected to CPAU’s Distribution System
inappropriately:
i. Over and under voltage trip functions and over and under frequency trip
functions;
ii. A voltage and frequency sensing and time-delay function to prevent the
Smart Inverter from energizing a de-energized Distribution System circuit
and to prevent the Smart Inverter from reconnecting with CPAU’s System
unless CPAU’s Distribution System service voltage and frequency is
within the ANSI C84.1-1995 Table 1 Range B voltage Range of 106 volts
to 127 volts (on a 120 volt basis), inclusive, and a frequency range of 59.3
Hz to 60.5 Hz, inclusive, and are stable for at least 15 seconds; and
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 33
iii. A function to prevent the Smart Inverter from contributing to the
formation of an Unintended Island, and cease to energize CPAU’s
Distribution System within two seconds of the formation of an Unintended
Island.
iv. Only Certified Smart Inverters are approved for interconnection. Smart
Inverters or a group of Smart Inverters > 400 kW require Ground Fault
Protection.
The Smart Inverter shall cease to energize CPAU’s Distribution System
for faults on CPAU’s Distribution System circuit to which it is connected
(IEEE 1547-4.2.1). The Smart Inverter shall cease to energize CPAU’s
Distribution circuit prior to reclosing by CPAU’s Distribution System
equipment (IEEE 1547-4.2.2).
b. Momentary Paralleling Generating Facilities. With CPAU’s approval, the transfer
switch or scheme used to transfer Producer’s loads from CPAU’s Distribution
System to Producer’s Generating Facility may be used in lieu of the Protective
Functions required for Parallel Operation.
c. Suitable Equipment Required. Circuit breakers or other interrupting equipment
located at the PCC must be Certified or “Listed” (as defined in Article 100, the
Definitions Section of the National Electrical Code) as suitable for their intended
application. This includes being capable of interrupting the maximum available
fault current expected at their location. Producer’s Smart Inverter and
Interconnection Facilities shall be designed so that the failure of any single device
or component shall not potentially compromise the safety and reliability of
CPAU’s Distribution System. The Smart Inverter paralleling-device shall be
capable of withstanding 220% of the Interconnection Facility rated voltage (IEEE
1547- 4.1.8.3). The Interconnection Facility shall have the capability to withstand
voltage and current surges in accordance with the environments defined in IEEE
Std. C62.41.2-2002 or IEEE Std. C37.90.1-2002 as applicable and as described in
L.3.e (IEEE 1547- 4.1.8.2).
d. Visible Disconnect Required. Producer shall furnish and install a ganged,
manually-operated isolating switch (or a comparable device mutually agreed upon
by CPAU and Producer) near the Point of Common Coupling to isolate the Smart
Inverter from CPAU’s Distribution System. The device does not have to provide
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 34
over-current protection.
The device must:
i. Allow visible verification that separation has been accomplished. (This
requirement may be met by opening the enclosure to observe contact
separation.) Molded case circuit breakers do not meet the visible contact
requirement and are not acceptable as a Visible Disconnect device.
ii. Include markings or signage that clearly indicates open and closed
positions.
iii. Be capable of being reached quickly and conveniently 24 hours a day by
CPAU personnel for construction, maintenance, inspection, testing or
reading, without obstacles or requiring those seeking access to obtain
keys, special permission, or security clearances.
iv. Be capable of being locked in the open position.
v. Be clearly marked on the submitted single line diagram and its type and
location approved by CPAU prior to installation. If the device is not
adjacent to the PCC, permanent signage must be installed at a CPAU
approved location providing a clear description of the location of the
device. If the switch is not accessible outside the locked premises, signage
with contact information and a CPAU approved locking device for the
premises shall be installed. Generating Facilities with Non-Islanding
inverters totaling one (1) kilovolt-ampere (kVA) or less are exempt from
this requirement.
e. Drawings Required. Prior to Parallel Operation or Momentary Parallel Operation
of the Smart Inverter, CPAU shall approve Producer’s Protective Function and
control diagrams. Generating Facilities equipped with Protective Functions and a
control scheme previously approved by CPAU for system-wide application or
only
Certified Equipment may satisfy this requirement by reference to previously
approved drawings and diagrams.
f. Generating Facility Conditions Not Identified. In the event this Rule does not
GENERATING FACILITY INTERCONNECTIONS
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CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 35
address the Interconnection conditions for a particular Smart Inverter, CPAU and
Producer may agree upon other arrangements, to be approved by CPAU.
g. Prevention of Interference. Producer shall not operate Smart Inverters that
superimpose a voltage or current upon CPAU’s Distribution System that
interferes with CPAU operations, service to CPAU Customers or communication
facilities. If such interference occurs, Producer must diligently pursue and take
corrective action at its own expense after being given notice and reasonable time
to do so by CPAU. If Producer does not take corrective action in a timely manner,
or continues to operate the facilities causing interference without restriction or
limit, CPAU may, without liability, disconnect Producer's facilities from CPAU’s
Distribution System, in accordance with Section B.8 of this Rule.
h. Voltage Regulation. If approved by CPAU, the Smart Inverter may actively
regulate the voltage at the Point of Common Coupling (PCC) while in parallel
with CPAU’s Distribution System. The Smart Inverter shall not cause the service
voltage at other customers to go outside the requirements of ANSI C84.1-1995,
Range A (IEEE 1547-4.1.1).
i. Voltage Trip and Ride-Through Settings. The voltage ranges in Table D.4 define
protective trip limits for the Protective Function and are not intended to define or
imply a voltage regulation Function. Generating Facilities shall cease to energize
CPAU’s Distribution System within the prescribed trip time whenever the voltage
at the PCC deviates from the allowable voltage operating range. The Protection
Function shall detect and respond to voltage on all phases to which the Generating
Facility is connected.
j. Smart Inverters. Smart Inverters shall be capable of operating within the voltage
range normally experienced on CPAU’s Distribution System from plus to minus
5% of the nominal voltage (e.g. 114 volts to 126 volts, on a 120 volt base), at the
service panel or PCC. The trip settings at the generator terminals may be selected
in a manner that minimizes nuisance tripping in accordance with Table D.4 to
compensate for voltage drop between the generator terminals and the PCC.
Voltage may be detected at either the PCC or the Point of Interconnection.
However, the voltage range at the PCC, with the generator on-line, shall stay
within +/-5% of nominal.
k. Voltage Disturbances. Whenever CPAU’s Distribution System voltage at the PCC
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 36
varies from and remains outside Near Nominal voltage for the predetermined
parameters set forth in Table D.4, the Smart Inverter’s Protective Functions shall
cause the Smart Inverter(s) to become isolated from CPAU’s Distribution System:
i. The Smart Inverter shall stay connected to CPAU’s Distribution System
while the grid remains within the “Ride-Through Until” voltage-time
range and must stay connected in the corresponding “Operating Mode”.
ii. For voltage excursions beyond the near Nominal (NN) magnitude range
and within the range of the HV1 or LV3 regions, the Smart Inverter shall
momentarily cease to energize within 0.16 seconds.
iii. In the HV1 region, the Smart Inverter is permitted to reduce power output
as a function of voltage under mutual agreement between the Producer and
CPAU.
iv. If the distribution system voltage does not exit the ride-through region and
recovers to normal system voltage, the Smart Inverter shall restore
continuous operation within 2 seconds.
v. If the CPAU’s Distribution System voltage does not exit the ride-through
region and returns from the LV3 region to the LV2 or LV1 region, the
Smart Inverter shall restore available current within 2 seconds.
vi. Different voltage-time settings could be permitted by CPAU.
Table D.4: Voltage Ride-Through Table
Region Voltage at Point
of Common
Coupling (%
Nominal Volts)
Ride-Through
Until
Operating Mode Maximum Trip
Time
High Voltage 2
(HV2)
V > 120 0.16 seconds
High Voltage 1
(HV1)
110 < V < 120 12 seconds Momentary
Cessation
13 seconds
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RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 37
Near Nominal
(NN)
88 < V < 110 Indefinite Continuous
Operation
Not Applicable
Low Voltage 1
(LV1)
70 < V < 88 20 seconds Mandatory
Operation
21 seconds
Low Voltage 2
(LV2)
50 < V < 70 10 seconds Mandatory
Operation
11 seconds
Low Voltage 3
(LV3)
V < 50 1 second Momentary
Cessation
1.5 seconds
l. Paralleling. The Generating Facility shall parallel with CPAU’s Distribution
System without causing a voltage fluctuation at the PCC greater than plus/minus
5% of the prevailing voltage level of CPAU’s Distribution System at the PCC,
and meet the flicker requirements of Section D.5.m below.
m. Flicker. The Generating Facility shall not create objectionable flicker for other
customers on CPAU’s Distribution System. To minimize the adverse voltage
effects experienced by other customers (IEEE 1547-4.3.2), flicker at the PCC
caused by the Generating Facility should not exceed the limits defined by the
"Maximum Borderline of Irritation Curve" identified in IEEE 519-1992 (IEEE
Recommended Practices and Requirements for Harmonic Control in Electric
Power Systems, IEEE STD 519-1992). This requirement is necessary to minimize
the adverse voltage affects experienced by other Customers on CPAU’s
Distribution System. Generators may be connected and brought up to
synchronous speed (as an induction motor) provided these flicker limits are not
exceeded.
n. Integration with CPAU’s Distribution System Grounding. The grounding scheme
of the Generating Facility shall not cause over-voltages that exceed the rating of
the equipment connected to CPAU’s Distribution System and shall not disrupt the
coordination of the ground fault protection on CPAU’s Distribution System (IEEE
1547-4.1.2).
o. Frequency. CPAU controls system frequency, and the Generating Facility shall
operate in synchronism with CPAU’s Distribution System. Whenever CPAU’s
Distribution System frequency at the PCC varies from and remains outside
normal (nominally 60 Hz) by the predetermined amounts set forth in Table D.2,
the Generating Facility’s Protective Functions shall cease to energize CPAU’s
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 38
Distribution System within the stated maximum trip time.
p. Frequency Ride-Through Requirements. Smart Inverter based systems shall
remain connected to CPAU’s Distribution System while the grid is within the
frequency-time range indicated in Table D.5, and shall disconnect from the
electric grid during a high or low frequency event that is outside that frequency-
time range. The frequency values are shown in Table D.5. These values provide
default interconnection system response to abnormal frequencies. The inverter
shall disconnect by the default clearing times. In the high frequency range
between 60.2 Hz and 61.5 Hz, or some other mutually agreed range, the Smart
Inverter is permitted to reduce real power output until it ceases to export power by
61.5 Hz, or other frequency value mutually agreed between the generating facility
operator and CPAU. Islands and microgrids may need different default frequency
settings.
Table D.5: Frequency Ride-Through and Trip Settings Table
System
Frequency
Default Settings
(Hz)
Minimum Range
of Adjustability
(Hz)
Ride-Through
Until
Ride –Through
Operational
Mode
Maximum Trip
Time
f > 62 62 – 64 No Ride Through Not Applicable 0.16 seconds
60.5 < f < 62 60.1 – 62 299 seconds Mandatory
Operation
300 seconds
58.5 < f < 60.5 Not Applicable Indefinite Continuous
Operation
Not Applicable
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 39
57.0 < f < 58.5 57 – 59.9 299 seconds Mandatory
Operation
300 seconds
f < 57.0 53 – 57 No Ride Through Not Applicable 0.16 seconds
q. Harmonics. When the Smart Inverter is serving balanced linear loads, harmonic
current injection into CPAU’s Distribution System at the PCC shall not exceed
the limits stated in Table D.3. The harmonic current injections shall be exclusive
of any harmonic currents due to harmonic voltage distortion present in
CPAU’s Distribution System without the Smart Inverter connected (IEEE 1547-
4.3.3.). The harmonic distortion of a Smart Inverter shall be evaluated using the
same criteria as for the Host Loads.
r. Direct Current Injection. Smart Inverter should not inject direct current greater
than 0.5% of rated output current into CPAU’s Distribution System.
s. Power Factor. Producer shall provide adequate reactive power compensation on
site to maintain the Smart Inverter power factor near unity at rated output or a
CPAU specified power factor in accordance with the following requirements:
i. Default Power Factor setting: 1.0 +/- 0.01 (0.99 Lagging to 0.99 Leading).
ii. Aggregate generating facility is greater than 15 kW: 1.0 +/- 0.15 (0.85
Lagging to 0.85 Leading) down to 20% rated power based on available
reactive power.
iii. Aggregate generating facility is less than or equal to 15 kW: 1.0 +/- 0.10
(0.90 Lagging to 0.90 Leading) down to 20% rated power based on
available reactive power.
t. Dynamic Volt/VAR Operations. The Smart Inverter shall be capable of operating
dynamically within a power factor range of +/- 0.85 PF for larger (>15 kW)
systems, down to 20% of rated power, and +/- 0.9 PF for smaller systems (≤15
kW), down to 20% of rated power, based on available reactive power. This
dynamic Volt/VAR capability shall be able to be activated or deactivated in
accordance with CPAU requirements.
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 40
CPAU may permit or require the Smart Inverter systems to operate in larger
power factor ranges, including in 4-quadrant operations for storage systems with
the implementation of additional anti-islanding protection as determined by
CPAU.
The Smart Inverter shall be capable of providing dynamic reactive power
compensation (dynamic Volt/VAR operation) within the following constraints:
The Smart Inverter shall not cause the line voltage at the point of common
coupling to go outside the requirements of the latest version of ANSI
C84.1, Range A.
The Smart Inverter shall be able to consume reactive power in response to
an increase in line voltage, and produce reactive power in response to a
decrease in line voltage.
The reactive power provided shall be based on available reactive power,
but the maximum reactive power provided to the system shall be as
directed by CPAU.
u. Ramp Rate Requirements. The Smart Inverter is required to have the following
ramp controls for at least the following two conditions. These functions can be
established by multiple control functions or by one general ramp rate control
function. Ramp rates are contingent upon sufficient energy available from the
Smart Inverter.
Normal ramp-up rate: For transitions between energy output levels over
the normal course of operation. The default value is 100% of maximum
current output per second with a range of adjustment between 1% to
100%, with specific settings as mutually agreed by the CPAU and the
Producer.
Connect/Reconnect Ramp-up rate: Upon starting to inject power into the
grid, following a period of inactivity or a disconnection, the inverter shall
be able to control its rate of increase of power from 1 to 100% maximum
current per second, with specific settings as mutually agreed upon by
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 41
CPAU and the Producer.
v. Default Activation States for Phase 1 Functions. Unless otherwise provided by
CPAU, the default settings will be as follows:
Anti-islanding – activated
Low/High Voltage Ride-Through – activated
Low/High Frequency Ride-Through – activated
Dynamic Volt/VAR operations – deactivated
Ramp rates – activated
Fixed power factor – activated
Reconnect by “soft-start” methods – activated
These default activation states may be modified by mutual agreement between
CPAU and Producer.
w. Automatic Transfer (Load Shedding or Transfer). The voltage and frequency ride-
through requirements of D.5.i and D.5.m shall not apply if either: a) The real
power across the Point of Common Coupling is continuously maintained at a
value less than 10% of the aggregate rating of the Smart Inverters connected to
the Generation Facility prior to any voltage disturbance, and the Generation
Facility disconnects from CPAU’s distribution system, along with Generation
Facility load, such that the net change in real power flow from or to CPAU is less
than 10% of the aggregate Smart Inverter capacity; or b) Generation Facility load
real power demand equal to 90% to 120% of the pre-disturbance aggregate Smart
Inverter real power output is shed within 0.1 seconds of Smart Inverter
disconnection.
x. Fault Detection. A Smart Inverter with an SCCR exceeding 0.1 or one that does
not cease to energize CPAU’s Distribution System within two seconds of the
formation of an Unintended Island shall be equipped with Protective Functions
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 42
designed to detect Distribution System faults, both line-to-line and line-to-ground,
and cease to energize CPAU’s Distribution System within two seconds of the
initiation of a fault.
y. Transfer Trip. For a Generating Facility that cannot detect Distribution System
faults (both line-to-line and line-to-ground) or the formation of an Unintended
Island, and cease to energize CPAU’s Distribution System within two seconds,
CPAU may require a Transfer Trip system or an equivalent Protective Function.
z. Reclose Blocking. Where the aggregate Generating Facility capacity exceeds 15%
of the peak load on any automatic reclosing device, CPAU may require additional
Protective Functions, including, but not limited to reclose-blocking on some of
the automatic reclosing devices.
E. INTERCONNECTION FACILITIES AND DISTRIBUTION SYSTEM
MODIFICATIONS OWNERSHIP AND FINANCING COST ALLOCATION
1.
1. SCOPE AND OWNERSHIP OF INTERCONNECTION FACILITIES AND
DISTRIBUTION SYSTEM MODIFICATIONS
a. Scope. Parallel Operation of Generating Facilities may require Interconnection
Facilities or modifications to CPAU’s Distribution System (“Distribution System
modifications”). The type, extent and costs of Interconnection Facilities and
Distribution System modifications shall be consistent with this Rule and
determined through the Supplemental Review and/or Interconnection Studies
described in Section C.
b. Ownership. Interconnection Facilities installed on Producer’s side of the Point of
Common Coupling (PCC) may be owned, operated and maintained by the
Producer or CPAU. Interconnection Facilities installed on CPAU’s side of the
PCC and Distribution System modifications shall be owned, operated and
maintained only by CPAU.
2. 2. RESPONSIBILITY OF COSTS OF
INTERCONNECTING A GENERATING FACILITY
a. Study and Review Costs. A Producer shall be responsible for the reasonably
incurred costs of the reviews and studies conducted pursuant to Section C.1 of this
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RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-2012
Sheet No. 43
Rule.
b. Facility Costs. A Producer shall be responsible for all costs associated with
Interconnection Facilities owned by the Producer. The Producer shall also be
responsible for any costs reasonably incurred by CPAU in providing, operating,
or maintaining the Interconnection Facilities and Distribution System
modifications required solely for the Interconnection of the Producer’s Generating
Facility with CPAU’s Distribution System.
c. Separation of Costs. Should CPAU combine the installation of Interconnection
Facilities or Distribution System modifications required for the Interconnection of
a Generating Facility with modifications to CPAU’s Distribution System to serve
other Customers or Producers, CPAU shall not include the costs of such separate
or incremental facilities in the amounts billed to the Producer.
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-201212-12-2016
Sheet No. 2044
d.
b.d. Reconciliation of Costs and Payments. The Producer must pay applicable costs
prior to the scheduling of any engineering reviews and studies; construction of
distribution system modifications; or interconnection of generating facilities to
CPAU’s Distribution SystemIf the Producer selected a fixed price billing for the
Interconnection Facilities or Distribution System modifications, no reconciliation
will be necessary. If the Producer selected actual cost billing, a true-up will be
required. Within a reasonable time after the Interconnection of a Producer’s
Generating Facility, CPAU will reconcile its actual costs related to the Generating
Facility against any advance payments made by the Producer. The Producer wi ll
receive either a bill for any balance due or a reimbursement for overpayment as
determined by CPAU’s reconciliation. The Producer shall be entitled to a
reasonably detailed and understandable accounting for the payments.
3.
3. INSTALLATION AND FINANCING OF INTERCONNECTION FACILITIES
AND DISTRIBUTION SYSTEM MODIFICATIONS
a. a. Agreement Required. The costs for Interconnection Facilities and
Distribution System modifications shall be paid by the Producer pursuant to the
Provisions contained in the Special Facilities Agreement. Where the type and
extent of the Interconnection Facilities or Distribution System modifications
warrant additional detail, Producer and CPAU shall execute separate agreement(s)
to more fully describe and allocate the parties’ responsibilities for installing,
owning, operating and maintaining the Interconnection Facilities and Distribution
System modifications.
b. b. Interconnection Facilities and Distribution System Modifications.
Interconnection Facilities connected to CPAU’s side of the Point of Common
Coupling and Distribution System modifications shall be provided, installed,
owned and maintained by CPAU at Producer’s expense.
c. c. Reservation of Unused Facilities. When a Producer wishes to reserve
CPAU-owned Interconnection Facilities or Distribution System modifications
installed and operated as Special Facilities for the Producer at Producer’s expense,
but idled by a change in the operation of the Producer's Generating Facility or
otherwise, Producer may elect to abandon or reserve such facilities consistent
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-201212-12-2016
Sheet No. 2045
with the terms of its agreement with CPAU. If Producer elects to reserve idle
Interconnection Facilities or Distribution System modifications, CPAU shall be
entitled to continue to Charge Producer for the costs related to the ongoing
operation and maintenance of the Special Facilities.
d. Refund of Salvage Value. When a Producer elects to abandon the Special
Facilities for which it has either advanced the installed costs or constructed and
transferred to CPAU, the Producer shall, at a minimum, not receive from CPAU a
credit for the net salvage value of the Special Facilities.
F. METERING, MONITORING AND TELEMETRY
1. GENERAL REQUIREMENTS
All Generating Facilities shall be metered in accordance with this Section F and shall
meet all applicable standards of CPAU contained in CPAU’s applicable rules and
published CPAU manuals dealing with Metering specifications. For general metering
requirements, see CPAU Rule and Regulation 15. For net metering requirements, see
CPAU Rule and Regulation 29.
2. METERING BY CPAU
The ownership, installation, operation, reading and testing of revenue Metering
Equipment for Generating Facilities shall be by CPAU only.
3. NET GENERATION METERING
For purposes of monitoring Generating Facility operation to determine standby Charges
and applicable non-bypassable Charges as defined in CPAU’s tariffs, and for Distribution
System planning and operations, consistent with Section B.4 of this Rule, CPAU shall
have the right to specify the type, and require the installation of Net Generation Metering
equipment. CPAU shall only require Net Generation Metering to the extent that less
intrusive and/or more cost effective options for providing the necessary Gen erating
Facility output data are not available. In exercising its discretion to require Net
Generation Metering, CPAU shall consider all relevant factors, including but not limited
to:
a. Data requirements in proportion to need for information;
b. Producer’s election to install equipment that adequately addresses CPAU’s
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-201212-12-2016
Sheet No. 2046
operational requirements;
c. Accuracy and type of required Metering consistent with purposes of collecting
data;
d. Cost of Metering relative to the need for and accuracy of the data;
e. The Generating Facility’s size relative to the cost of the Metering/monitoring;
f. Other means of obtaining the data (e.g., Generating Facility logs, proxy data etc.);
and
g. Requirements under any Interconnection Agreement with the Producer.
4. POINT OF COMMON COUPLING METERING
For purposes of assessing CPAU Charges for retail service, the Producer’s PCC Metering
shall be reviewed by CPAU, and if required, replaced to ensure that it will appropriately
measure Electric power according to the Provisions of the Customer’s Electric Service
tariff. Where required, the Customer’s existing Meter may be replaced with a bi-
directional meter so that power deliveries to and from the Producer’s site can be
separately recorded. Alternately, the Producer may, at its sole option and cost, require
CPAU to install Multi-Metering Equipment to separately record power deliveries to
CPAU’s Distribution System and retail purchases from CPAU. Where necessary, such
PCC Metering shall be designed to prevent reverse registration.
5. TELEMETERING
If the nameplate rating of the Generating Facility is 1 MW or greater,
Telemeteringtelemetering equipment at the Net Generator Metering location may be
required at the Producer's expense. If the Generating Facility is
Interconnectedinterconnected to a portion of CPAU’s Distribution System operating at a
voltage below 10 kV, then Telemetering equipment may be required on Generating
Facilities 250 kW or greater. CPAU shall only require Telemetering to the extent that
less intrusive and/or more cost effective options for providing the necessary data in real
time are not available
6. LOCATION
Where CPAU-owned Metering is located on the Producer’s Premises, Producer shall
provide, at no expense to CPAU, a suitable location for all such Metering Equipment as
set forth in CPAU Rule and Regulation 15.
GENERATING FACILITY INTERCONNECTIONS
RULE AND REGULATION 27
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 4-2-201212-12-2016
Sheet No. 2047
7. COSTS OF METERING
The Producer will bear all costs of the Metering required by this Rule, including the
incremental costs of operating and maintaining the Metering Equipment.
G. SUPPLEMENTAL REVIEW
If the Generating Facility meets any of the following criteria, the Facility does not qualify for
Simplified Interconnection Review and must undergo a Supplemental Review:
1. Output from the Generating Facility at any time will be equal to or greater than 15% of
the load on the distribution line section.
2. The aggregate distributed generation on the distribution line section exceeds 80% of the
real-time peak load kW.
3. Startup, shutdown or other operating characteristics of the Generating Facility cause
voltage drop or flicker to exceed CPAU’s allowable limits as specified in Section D.
4. The Generating Facility is connected to a 4kV distribution feeder which has line-to –
neutral connected load and the Generating Facility nameplate rating exceeds 10% of the
line section peak load.
5. The Generating Facility, in aggregate with other generation, shall not contribute more
than 10% to the circuit’s maximum fault current
(END)
Page 1
3
MEMORANDUM
TO: UTILITIES ADVISORY COMMISSION
FROM: UTILTIES DEPARTMENT
DATE: February 1, 2017
SUBJECT: Utilities Advisory Commission Recommendation That Council Approve the
Update on the City of Palo Alto’s Ten-Year Electric Energy Efficiency Goals
(2018 to 2027)
______________________________________________________________________________
RECOMMENDATION
Staff recommends that the Utilities Advisory Commission (UAC) recommend that the Council
approve the proposed annual and cumulative Electric Efficiency Goals for the period 2018 to
2027 as shown in the table below.
Summary Table: Annual Electric Energy Efficiency Goals
(% of total City customer usage)
Electric
(%)
Electric
MWh
2018 0.75% 7,300
2019 0.75% 7,300
2020 0.80% 7,800
2021 0.80% 7,800
2022 0.85% 8,300
2023 0.85% 8,300
2024 0.90% 8,600
2025 0.90% 8,600
2026 0.95% 9,100
2027 0.95% 9,200
Cumulative1
10-year EE Goal
5.7% 54,900
EXECUTIVE SUMMARY
Palo Alto has long recognized cost-effective energy efficiency (EE) as the highest priority energy
resource, given that EE typically displaces relatively expensive electricity generation, lowers
energy bills for customers, and contributes to economic development and job creation. As
1 Cumulative EE savings are not equal to the sum of the annual incremental goals due to the differences in how long
the electricity savings persist for different measures and different types of EE savings. For example, new hardware
upgrades contribute savings over their expected lifetimes, perhaps 15 years, whereas electricity savings from
changing thermostat set-points are assumed to contribute savings over a much shorter period of time.
Page 2
required by state legislation, the City adopted its first set of 10 -year energy efficiency goals in
April 2007, and updated these goals in 2010 and 2012.
For the EE savings targets the City is required to establish under state law (AB 2227), EE savings
that can be counted towards these goals are restricted to those savings directly attributable to
utility programs which are funded by a mandated public benefits charge (2.85% of electric retail
revenue). EE upgrades that customers undertake without participating in utility programs as
well as EE savings achieved through federal and state appliance and building standards
currently cannot be counted towards the City’s EE goals. Therefore the savings reported here
and targeted by these goals represent a narrow subset of the actual energy efficiency upgrades
taking place in Palo Alto. Over the past five years, building and appliance efficiency standards
have become increasingly stringent. As federal and state efficiency standards increase, the
energy savings attributable to utility programs decline.
For this current EE goals update, staff proposes annual EE savings targets of 0.75% in 2018,
increasing to 0.95% in 2027, with a cumulative 10-year EE savings of 5.7% of the City’s
projected electric load. These are aggressive targets for Palo Alto, and are roughly 30% more
ambitious than the previous goals adopted in 2012. Staff will explore various program
strategies as well as innovative EE technologies to achieve these goals over the next decade.
BACKGROUND
Council adopted the City’s first 10-year electric EE goals in April 2007, which were to reduce the
City’s electric usage cumulatively by 3.5% by FY 2017. These goals met the state legislative
requirements established by AB 2021 (2006) requiring publicly owned electric utilities to adopt
annual electric efficiency savings goals over a 10-year period, with the first set of goals due by
June 1, 2007 and every three years thereafter. These EE goals were used for the City of Palo
Alto Utilities’ (CPAU’s) resource planning as well as for EE program budget planning. In May
2010 City Council updated the 10-year EE goals to reduce cumulative electric load by 7.2%
between 2011 and 2020. The most recent set of 10-year EE goals was adopted by City Council in
December 2012, with cumulative 10-year electric savings of 4.8%2 between 2014 and 2023. AB
2227 (2012) changed the triennial energy efficiency target -setting schedule to a quadrennial
schedule, beginning March 15, 2013 and every fourth year thereafter. The next EE goals update
is due to be submitted to the California Energy Commission by March 15, 2017.
Figure 1 provides a summary of the annual EE goals and achievements since Fiscal Year (FY)
2008. The figure shows that actual CPAU EE achievements have exceed goals for most years.
2 The 2012 EE goals were lower than the 2010 EE goals because the 2010 EE Potential model did not exclude
savings attributed to appliance codes and building standards from CPAU’s EE savings potential. Many federal and
state mandated codes and standards took effect between 20013 and 2018, including comprehensive lighting
standards from AB1109 (2007).
Page 3
Figure 1. Electric Efficiency Goals and Achievements for 2011-2016.
In 2015 California passed a landmark piece of energy legislation called Senate Bill 350 (SB-350)
the “Clean Energy and Pollution Reduction Act of 2015”. SB 350 reinforces California’s position
as a leader in clean energy and greenhouse gas reduction, and codifies Governor Brown’s
ambitious “50/50/50” plan to procure 50% of electricity from renewable resources, reduce
petroleum use by 50%, and double building efficiency in both electric and natural gas end uses
by 2030. The statute lists a variety of programs to achieve the doubling of efficiency savings,
including: 1) appliance and building standards; 2) utility programs that offer financial incentives,
rebates, technical assistance and support to customers to increase EE; 3) programs that achieve
EE savings through operational, behavioral and retrocommissioning activities; and 4) programs
that save energy in final end uses through reducing distribution feeder voltage (i.e.
conservation voltage reduction). In the spirit of SB 350’s goal to double building energy
efficiency, staff proposes an ambitious set of 10-year EE goals for 2018 to 2027. It should be
noted that since Palo Alto’s electric supply has been carbon-neutral since 2012 and that electric
efficiency does not contribute additional greenhouse gas (GHG) reductions.
DISCUSSION
Overview of Palo Alto’s Past Energy Efficiency Activities
CPAU has offered energy efficiency programs since the 1970s. Its Long-term Electric Acquisition
Plan (LEAP), approved by City Council in March 2007 and last updated in 2012, affirmed cost-
effective energy efficiency as the highest priority resource, with the goal of reducing average
customer bills. The portfolio of EE programs has evolved over time. Originally the programs
focused on rebates for customers administered by CPAU staff, but now include programs
administered by third parties that provide EE audit and turnkey EE services to customers. Some
of the notable programs in recent years include a turnkey lighting and refrigeration upgrade
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
2008 2009 2010 2011 2012 2013 2014 2015 2016
Actual Savings
2012 Goals
2010 Goals
2007 Goals
Percentages represent EE
savings relative to load
Page 4
program for small businesses (Right Lights+), a comprehensive home efficiency audit and
retrofit program that targets low income residences, a direct install program that implements
sensors to power down beverage and snack vending machines at no charge to businesses, a
new construction assistance program for commercial customers to increase building efficiency,
a program that offers building commissioning services to large businesses, and a Home Energy
Report program that provides individualized reports comparing residents’ home energy usage
with their neighbors in similarly sized homes.
Palo Alto was one of the first cities to pilot LED street light technology in 2009, in collaboratio n
with the Pacific Northwest National Laboratory. Since 2014, the City has converted 85% of it s
streetlights to LED streetlights (the remaining are decorative streetlights.) CPAU also has an
ongoing Program for Emerging Technologies to evaluate, test and implement innovative
emerging technologies that could help customers manage or reduce energy and water use.
Besides utility programs, Palo Alto is also pursuing energy savings through its local green
building code. In June 2015, City Council adopted an energy reach code within the Green
Building Ordinance that requires 15% energy efficiency savings beyond California’s 2013 Title 24
building energy standards for single family, multifamily and non -residential new construction
projects. This energy reach code was effective for the period from September 201 5 to
December 2016. Beginning January 2017 through December 2019, the energy reach code
requires 10% energy efficiency savings beyond the state’s 2016 Title 24 building energy
standards for single family, multifamily and non-residential new construction projects. As a
reach code specific to only the City of Palo Alto, energy savings from this code are savings which
may be counted towards these EE goals.
From a supply resource planning perspective, CPAU has incorporated both historic EE savings as
well as forecast EE savings (from Council-approved EE goals) when forecasting the aggregate
customer loads for a 10-year planning period. Energy efficiency related savings impacted
directly by utility programs over the past 10 years is estimated at 6.8% of 2016 loads, i.e.
without such programs, Palo Alto’s electrical loads would have been 6.8% (60,300 MWh) higher
in 2016.
Proposed Electric Efficiency Goals
Staff proposes new annual electric EE targets at 0.75% of forecast electric load beginning in FY
2018, increasing 0.05% every two years, and eventually reaching 0.95% in FY 2026 and FY 2027.
These proposed goals are approximately 30% more ambitious than the annual electric EE
targets adopted in 2012 (see Figure 2). Figure 3 shows the actual historical EE savings and the
proposed 2018 to 2027 EE goals.
While the proposed EE goals may not initially appear aggressive relative to past goals and the
historical savings, the proposed goals are quite ambitious considering that a) the computational
model built by Navigant Consulting for Palo Alto3 suggests a market potential lower than the
3 Navigant Consulting was contracted by the Northern California Power Agency (NCPA) to build specific
computational models for each of the NCPA member utilitie s. This model incorporates CPAU’s avoided costs,
Page 5
adopted 2012 goals for a business-as-usual approach, and b) the diminishing market potential
due to more stringent codes and standards4. Staff believes these goals are ambitious but
achievable given Palo Alto has consistently exceeded predicted EE market potential and that
Staff has a number of new program strategies in preliminary stages. These proposed goals are
also projected to be cost-effective based on both the model projections and past EE program
costs. Lastly, they are also consistent with the principles expressed in Palo Alto’s Sustainability
and Climate Action Plan (S/CAP). If adopted, these EE goals will be included in the Efficiency
implementation plan currently being developed for the S/CAP.
Savings from EE can be reported on a net basis, meaning they exclude energy impacts from
free-riders (program participants who would have installed EE even without incentives), or on a
gross basis, meaning they include impacts from program participants that are free-riders. The
goals in Figure 4 are based on “net” EE savings rather than “gross” EE savings. 5 This means they
do not include the energy savings that would have occurred in the absence of utility incentives,
and therefore most accurately reflect the EE savings attributable to CPAU’s programs. CPAU
also excludes savings attributable to building and appliance codes and standards. In order to
allow comparison with other utilities which set goals on a gross basis, the propos ed annual
goals in Figure 2 are shown as proposed (on a net basis without including codes and standards),
as well as on a gross basis. In addition, if energy savings from codes and standards were
included, CPAU’s goals would be approximately 1.1% per year as illustrated in Figure 2.
These distinctions are important, as California IOUs and a few large POUs actively participate in
the development of these codes and standards and subsequently claim savings attributed to
these codes and standards. For context, in 2015 nearly 45% of PG&E’s claimed savings came
from these codes and standards so one would expect California IOUs to have substantially
higher EE goals than CPAU for claimed savings.
retail rates, and building stock data. Additional explanation of the Navigant Consulting EE potential model and
Staff goal development is in Attachment A.
4 EE savings attributed to state mandated codes & standards are excluded from the EE potential for CPAU, and
therefore also cannot count toward meeting its EE goals.
5 The 2016 EE Potential model assumes free-ridership at the measure level using a net-to-gross (NTG) ratio. The
NTG ratios are based on California statewide evaluation studies and are documented in Database of Energy
Efficiency Results (DEER). Generally, mature, low-cost technologies tend to have higher free-ridership.
Page 6
Figure 2. Comparison of Proposed 2017 Electric EE goals and 2012 Electric EE Goals.
Figure 3 shows the reported EE savings as well as the proposed annual electric EE goals
expressed in MWh. The big jump in 2012’s reported savings was due to the completion of a
significant EE project at a large commercial site, which is unlikely to be replicable.
Figure 3. Historic EE Savings and Proposed Annual Electric EE Goals on an Energy Basis.
Page 7
On a cumulative basis, the total EE savings from the proposed 2018 to 2027 targets represent
5.7% of the forecasted electric load in 2027, a 19% increase over the goals adopted in 2012. If
the EE savings from codes and standards are included, the cumulative EE savings in 2027 is 8.5%
of the forecasted electric load. The cumulative impact of the annual targets for this 10-year
period is shown in Figure 4. It is important to note that some EE savings have a longer-lasting
effect than others, as different EE measures have different useful lifetimes. Measure life for
Light Emitting Diode (LED) bulbs can be up to 12 years, whereas behavioral savings last only last
a few years. Due to the differences in EE savings persistence, the cumulative EE impact over
the 10-year period is not equal to the sum of the annual EE goals for the 10 years.
Figure 4. Proposed 2018-2027 Cumulative Electric EE Goals.
Strategies for Achieving the Proposed EE Goals
Achieving these ambitious EE goals will require the deployment of new innovative programs
structures, increasing awareness of existing programs, and developing other program
approaches to reach previously stranded sections of the energy efficiency market potential.
One example of an innovative program structure that research suggests is highly effective is the
idea of gamification6 for behavioral residential energy savings. The Energy Lottery pilot
program currently being developed by staff could provide extremely cost-effective residential
behavioral savings through gamification.
Another example of a new pilot program currently underway is a training seminar for facilities
managers called Building Operator Certification. This training could help tap into potential
6 Gamification is the concept of applying of game-design elements and game principles to other areas in order to
improve user engagement and other metrics.
Page 8
energy efficiency savings for large commercial and industrial customers. Also, as discussed in
an earlier section, Palo Alto has adopted Green Building Ordinance that requires additional
energy savings beyond the state’s building energy standards. Staff is currently investigating how
to track and verify the energy savings attributed to the Green Building Ordinance.
In addition, if the City chooses to implement an Advanced Metering Infrastructure (AMI)
backbone of a smart-grid system staff will investigate a conservation voltage reduction program
using the AMI infrastructure on its 68 primary feeders. Potential savings from this program a re
estimated to be up to 1% of the City’s annual electricity load, and could be realized by 2025 or
2026. All these plans are subject to Council consideration and approval. Staff is also
investigating a distributed energy resources pilot, which could potentially contribute EE savings
from smart thermostats and other emerging technologies. There are also potentially large EE
savings from many City facilities, particularly if EE measures do not impact other operating
constraints.
This evolution of our EE portfolio is consistent with the general consensus among utilities that
new approaches are needed to reach increasingly aggressive EE targets as traditional EE
programs approach market saturation limitations.
Projected Electric EE Program Costs
Funding for EE programs comes from a mandated Public Benefit (PB)7 surcharge of 2.85% of the
electric utility bill for all customers. Since all EE portfolios must be cost-effective, they can also
be funded by supply resource funds.
To meet the proposed EE goals, staff estimates that the annual EE budget will grow from about
$3.4 million in FY 2018 to about $4.2 million in FY 2027. This projected EE program budget is
anticipated to be roughly 85% of the annual PB collections.
Figure 5 shows the actual electric EE program expenditures for FY 2008 through FY 2016 and
the estimated annual EE budget between 2018 and 2027.
7 Public Benefits funds are required to be collected by legislative statute and can only be used on cost -effective
energy efficiency, low income programs, renewable electricity, and research and development.
Page 9
Figure 5. Actual and Projected Electric EE Program Costs.
Retail Rate & Average Customer Bill Impact of the Proposed Electric EE Goals
EE programs impact retail rates in two ways. First, a lower electric load means that fixed costs
(capital investments and fixed operating costs to run the electric utility) must be distributed
over a lower electric sales volume, thereby increasing the average electric retail rate. Second ,
the use of funds to support EE programs increases the revenue requirements for the electric
utility.
Overall, these proposed goals are estimated to amount to a cumulative increase in the retail
rate of approximately 5% by the year 2027. The majority of this retail rate increase is due to
the cumulative load reduction from the proposed 10-year EE goals. Increased charging of
electric vehicles, electrification of natural gas appliances, and other electric load growth could
mitigate the retail rate impact of the EE programs. The total bill impact of the proposed goals is
estimated to be neutral over the lifetime of the EE savings.
RESOURCE IMPACT
As discussed above, staff estimates that the annual EE budget will grow from about $3.4 million
in FY 2018 to about $4.2 million in FY 2027, and these goals will have other rate and bill
impacts. Although this report contains preliminary estimates of the costs of achieving the
proposed electric and gas EE goals, the detailed budget plan and staffing needs to meet the
annual EE goals will be part of the annual City budgeting process. The annual budget will
present the costs for both internally administered, as well as contractor supported, efficiency
programs.
POLICY IMPLICATIONS
Adoption of the proposed electric 10-year EE goals will replace the 2012 10-year electric EE
goals and will inform the EE program planning and load forecasting for the next four years.
These goals will also be included in the LEAP, the Electric Utility Integrated Resource Plan, and
the City's Sustainability Implementation Plan. The proposed 2017 electric EE goals are
consistent with the Utilities Strategic Plan and the City's S/CAP.
ENVIRONMENTAL REVIEW
The UAC's recommendation that Council approve the 2017 10-year electric EE goals does not
require California Environmental Qua lity Act review, because the plan does not meet the
definition of a project under Public Resources Code Section 21065 and CEQA Guidelines Section
15378(b)(S), as an administrative governmental activity which will not cause a direct or indirect
physical change in the environment.
ATTACHMENTS
A. Energy Efficiency Potential Modeling
B. Cost-Effectiveness Tests for Energy Efficiency Programs
C. Top 20 Electric Efficiency Measures in 2018
PREPARED BY: £LENA PERKINS, Resource Planner
CHRISTINE TAM, Senior Resource Planner
REVIEWED BY: a,9$SWAMINATHAN, Senior Resource Planner
a%58&(LESCH, Manager, Utilities Program Services
-
L Oa$1a1'a+(,1Assistant Director, Resource Management
DEPARTMENT HEAD: a
ED SHIKADA, Utilities General Manager
Page 10
Page A-1
ATTACHMENT A: ENERGY EFFICIENCY POTENTIAL MODELING
Energy Efficiency Potential Model Overview
The first step in establishing EE goals is to model the potential for energy savings within the
City. This step was completed using an EE potential model developed by Navigant Consulting.
The 2016 EE potential model is similar to the one used by CPAU and other California publicly
owned utilities (POUs) in 2012 as well as the model most recently used by the California Public
Utilities Commission to determine the EE potential for investor-owned utilities (IOUs). The
model estimates the technical, economic and market potential for energy efficiency measures
for residential and non-residential customers, defined as follows:
• Technical potential is the energy savings that would result from installation of the most
energy efficient measures that are commercially available, regardless of cost-
effectiveness.
• Economic potential includes only savings from the installation of cost-effective EE
measures.
• Maximum Market potential is a subset of the economic potential which is scaled by
customers’ awareness and willingness to adopt energy efficient equipment.
• Market potential is the achievable portion of the maximum market potential calculated
by the model, given: 1) the calibration of the model based on actual EE savings for a
specific utility, and 2) the programs the utility chooses to include.
The model is calibrated based on the achieved EE savings by end use, and uses a 3-year average
from 2013 to 2015 is used as the base year. The model also takes into account past EE program
achievements as well as user-specified input such as projected avoided energy costs, retail
rates of electricity, discount rate, building stock, and assumptions regarding appliance and
equipment penetration. Efficiency measures included in the analysis cover over 170 current
and emerging electric efficiency measures. For each year starting in 2015, the model steps
through the calculation of the technical potential, then filters out the uneconomic measures to
determine the economic potential, then estimates the maximum market potential based on
customers’ awareness and willingness to adopt and, finally, computes the market potential by
applying a diffusion curve function to the maximum market potential for the portfolio of EE
programs. The calculated market potential forms the basis of the proposed EE goals for 2018 to
2027. Figure A-1 shows the model’s sequential narrowing from technical potential to market
potential.
Page A-2
Figure A-1. 2016 Navigant EE Potential Model Steps for Modeling CPAU Market Potential.
Limitations of the EE Potential Model
The 2016 EE Potential model has some intrinsic limitations. One source of uncertainty is the
values for “willingness and awareness” used within the model, which attempt to approximate
customer awareness of energy efficiency measures and their willingness to install the
measures. The projected market potential is extremely sensitive to these values, as the
maximum market potential is essentially the product of the economic potential and the
willingness and awareness values. The 2016 EE potential model applies generic values adopted
from the IOUs’ EE potential model. Given the unique demographics of Palo Alto, the
“willingness and awareness” numbers for Palo Alto will likely be different from the IOUs’.
Cost projections from the model should also be treated as estimates, as the model’s measure
costs are based on Navigant’s measure database, rather than actual CPAU measure costs. Also,
the model does not readily accommodate analysis using different avoided costs.
More broadly, this model cannot predict future disruptive technologies, or calculate savings
from programs with completely new and different structures. One such example is the energy
savings attributed to Palo Alto’s Green Building Code.
Model Results
For Palo Alto, this 2016 EE potential model estimates an annual incremental market potential of
0.6% of the forecasted load for 2018-2027 if Palo relies solely on a business as usual approach.
This 10% decline in market potential from the 2012 EE goals is due to both the model
limitations as well the effects of market saturation for mature EE programs like Palo Alto’s.
However, given Palo Alto’s reputation as a leader in energy efficiency and the statewide vision
for doubling energy efficiency, Staff has used the model to estimate the types of programs
needed and funds required to achieve ambitious but still cost-effective EE savings goals.
Page A-3
The 2016 EE Potential model also breaks down future market potential by end use. Figure A-2
shows that the majority of the 2018 energy savings are expected from the non-residential
sector (74%) while only 26% of the savings are from the residential sector. Of the residential
savings, over 80% is projected to come from behavioral programs, such as the Home Energy
Reports. Savings from lighting make up another 27% of the total energy savings in 2018.
However, it is important to note that with increasing lighting efficiency standards, lighting
savings are predicted to only account for 12% of the incremental market potential by 2027.
Non-residential comprehensive savings (14% of the incremental market share in 2018) are
primarily energy savings from retrocommissioning activities such as resetting temperature and
schedule of the building HVAC control system, recalibrating sensors and variable frequency
drives. A list of the top twenty electric efficiency measures in 2018 is provided in Appendix B.
Figure A-2. Composition of Electric EE Market Potential in 2018.
Page B-1
ATTACHMENT B: COST-EFFECTIVENESS TESTS FOR ENERGY EFFICIENCY PROGRAMS
The primary aim of cost-effective energy efficiency programs is to reduce utility cost and hence
customer bills while improving the environment. Cost-effectiveness can be measured in many
ways. The four perspectives most commonly used in efficiency program cost-effectiveness
testing are:
1. Participant: An energy efficiency measure that provides net savings to a customer is
cost-effective for them as a “participant.” If a customer’s initial
investment, after accounting for utility rebates and tax incentives, can be
recouped with lower operating cost over the life of the measure, the
measure is considered cost-effective from a participant’s perspective.
2. Utility: A measure that lowers overall cost for the utility is cost-effective for the
utility (also referred to as “Program Administrator”). For CPAU, this could
also be considered the “all ratepayers test” or “average utility bill test,”
as it reflects the change in the utility bill to the average customer. To be
cost-effective from the utility perspective, the cost of the program
(administrative and rebate costs) must be less than the savings from not
purchasing the energy supply.
3. Total Resource: If the combination of the utility and all customers together save money, it
is cost-effective from a “Total Resource Cost (TRC)” or societal viewpoint.
4. Non-Participant: Even if the bill for the average customer shrinks significantly, retail rates
could increase slightly, so that customers who do not reduce
consumption could see a slight increase in rates and therefore bills. This
effect is due to the portion of retail revenue that must be collected to pay
for fixed costs. For this reason it is important to design diverse programs
to be widely available in order to facilitate efficiency implementation in
as broad a manner as possible. The Non-Participant perspective is also
called the Rate Impact perspective.
The Total Resource Cost reflects the financial perspective of the Palo Alto community as a
whole. The Utility Cost, Participant and Rate Impact perspectives should also be considered to
ensure lower average bills and sufficient incentives to achieve participation
The costs and benefits that are used to calculate the benefit-cost ratios for each of these
different perspectives are illustrated below:
Page B-2
Table B-1: Cost-Effectiveness Perspectives and Associated Costs and Benefits
Cost Effectiveness Test Costs Benefits
Participant Cost Test (PCT)
Does the participant save money? Measure Cost
Incentive to
customer
Bill Savings
Tax Savings
Program Administrator Cost (PAC)-
Average Bill
Are utility revenue requirements
lowered?
Incentive to customer
Program Delivery Cost
Avoided Supply
Costs
Total Resource Cost Test (TRC)
Sum of Participant + Non-participant
Are total community expenditures
lowered?
Measure Cost
Program Delivery Cost
Avoided Supply
Costs
Tax Savings
Rate Impact Measure (RIM)
Also known as non-participant test
Are utility rates lowered?
Incentives to customer
Lost Revenues (=Bill
Savings)
Program Delivery Cost
Avoided Supply
Costs
The Electric EE potential analysis assumes the cost of renewable energy as the avoided supply
cost.
Page C-1
ATTACHMENT C: TOP 20 ELECTRIC EFFICIENCY MEASURES IN 2018
The following table lists the top twenty electric efficiency measures in 2018. This list does not
included behavioral programs. The combined energy savings from these 20 measures
represents around 50% of the total market potential.
Rank Top Fifty Measures – 2018 2018 - Energy
Savings (MWh)
Energy %
of Total
1 Com-Office - Retro-commissioning (a) 565 12.3%
2 Com-ALL - Pump and Fan Variable Frequency Drive Controls (VFDs) 262 5.7%
3 Com-Office - Thermostat Replacement 172 3.7%
4 Res-SF New - T24 15% Stretch Goal Compliant Home 114 2.5%
5 Com-Office - Comprehensive Rooftop Unit Quality Maintenance (AC Tune-
up) 112 2.4%
6 Electronics - Efficient Lighting Equipment 106 2.3%
7 Com-Retail - LED fixture: 33W, 3500 lumens 91 2.0%
8 Com-Retail - LED downlight, screw-in lamp, 1-3W, interior Average 2 Watts
(a) 91 2.0%
9 Com-Office - Retro-commissioning (b) 86 1.9%
10 Com-Retail - LED downlight, screw-in lamp, 1-3W, interior Average 2 Watts
(b) 74 1.6%
11 Other Industrial - Efficient Lighting Equipment 73 1.6%
12 Com-Office - Centrifugal Chiller - Average kW/Ton = 0.56 67 1.5%
13 Com-Office - Demand Controlled Ventilation 67 1.4%
14 Com-Lodging - LED fixture: 33W, 3500 lumens 59 1.3%
15 Com-Office - Bi-Level Lighting Fixture – Stairwells, Hallways, and Garages 58 1.3%
16 Com-Retail - Electronically Commutated (EC) Motor w/Fan Cycling Controls
for Cold Storage Evaporator Fans 58 1.3%
17 Com-Office - Reciprocating Chiller - Average kW/Ton = 0.84 56 1.2%
18 Com-Office - Electronically Commutated (EC) Motor w/Fan Cycling Controls
for Cold Storage Evaporator Fans 55 1.2%
19 Com-Office - Screw Chiller - Average kW/Ton = 0.68 52 1.1%
20 Com-Retail - LED fixture: 33W, 3500 lumens 49 1.1%
Top 20 Total 2,267 49.2%
TO:
FROM:
DATE:
SUBJECT:
MEMORANDUM
UTILITIES ADVISORY COMMISSION
UTILITIES DEPARTMENT 5
February 1, 2017
Property Assessed Clean Energy (PACE) Financing: Program History and Future
Considerations in Palo Alto
This presentation provides background information on Property Assessed Clean Energy (PACE)
financing, including the program's history and future considerations in Palo Alto. In particular,
staff has provided the Commission with details associated with the Program to enable a
discussion of PACE's performance in the context of Palo. Alto demographics and climate, as well
as potential considerations for the future of the program in Palo Alto.
ATTACHMENT
Presentation: Property Assessed Clean Energy (PACE) Financing: Program History and Future
Considerations in Palo Alto
PREPARED BY:
REVIEWED BY:
REVIEWED BY:
Lisa Benatar, Staff Specialist
~ Bruce Lesch, Manager -Utility Program Services JA Jonathan Abendschein, Assistant Director, Resource Management
C/~ APPROVED BY:
ED SHIKADA, Utilities General Manager
Page 1of1
1
Discussion Item
Property Assessed Clean Energy
(PACE) Financing: Program History
and Future Considerations
in Palo Alto
Utilities Advisory Commission
February 1, 2017
2
Elements of PACE
PO Property Owner
. . Contractor
3
Also have…
JPA Joint Powers Authority
PP PACE Provider
4
How it Works
PO
. . Work
PP
$
PP
PO
JPA
Approval/Contract Process
. .
5
Additional Players
Lenders L
County C
6
how much $ is needed PP tells JPA
JPA issues bonds
bonds
PP L
$
7
Revenue Stream to Lenders
PO
$
PP
Tax assessment $ C
L $
8
Timeline
2006-07
Cisco DeVries
comes up with
idea for PACE
2008
CA passes AB 811,
authorizing CA cities and
counties to designate areas
within which willing
property owners can enter
into contractual
assessments to finance RE
and EE
2009
Palo Alto passes
resolution
authorizing
CaliforniaFIRST as
PACE provider in
Palo Alto
9
Main barriers that PACE is meant to overcome:
•Upfront costs
•Payback period
UPFRONT
COSTS PAYBACK
PERIOD
PACE
10
Pros with PACE
Easy to qualify for PACE more projects
PACE provider (PP) does hand-holding
PP vets contractors
Assurance from PP that project cost is
reasonable
No penalties for early repayment
Helps City meet GHG reduction goals and
create green jobs
Competition: perhaps lowers costs
11
Cons with PACE
Interest rates are high ~ 8%
In our climate, and given low CPAU rates,
savings typically don’t offset payments
PACE liens are in senior position
–Mortgage lenders don’t like this
–May be difficult for Property Owner (PO) to get
second mortgage
–May pose problems for PO selling property
12
2010: PACE is Dealt a Blow
2010: Federal Housing Finance Agency (FHFA)
calls for pause in PACE programs
13
Timeline 2010
Fannie Mae and
Freddie Mac say
they won’t back
mortgages for
properties with
PACE liens
2014
Gov. Jerry Brown creates
$10M mortgage loss reserve
fund to ease federal
concerns over insuring
mortgages for PACE
properties
2016
FHA initiative +
AB 2693 – both
provide
consumer
protections
14
32 States are “PACE Enabled”
15
Back in Palo Alto…
December 2009: Council passed resolution
authorizing CaliforniaFIRST to operate as
PACE provider in Palo Alto
In 18-month period from summer 2014
through end of 2015:
–23 applications
–21 approved
–7 projects funded
No commercial projects (all residential)
16
PACE Activity Nationwide
> 100K projects
> $3B financed
Source: PACENation, January 2017
17
Palo Alto Demographics
Median household income in Palo Alto:
$151,370
–US Census Bureau
2014 American Community Survey (ACS)
www.census.gov/programs-surveys/acs
18
Palo Alto Demographics
20%
18% 62%
Income Distribution
in Palo Alto
US Census Bureau, 2014
American Community Survey (ACS)
www.census.gov/programs-surveys/acs
19
Highest-Level Income Often
Eligible for Home Equity Loan
20
Lowest-Level Income Often
Eligible for REAP
People in
Household
Annual
Income
1 $37,150
2 $42,450
3 $47,750
4 $53,050
… …
8 $70,050
21
Residential Energy Assistance
Program (REAP)
Eligible projects, no cost to property owner
(examples):
–Attic insulation
–Seal and insulate ductwork
–Weather stripping
–Furnace replacement
–Attic venting
–LED lighting
–Refrigerator replacement
–Repair walls
22
Palo Alto Demographics
20%
18% 62%
Income Distribution
in Palo Alto
US Census Bureau, 2014
American Community Survey (ACS)
www.census.gov/programs-surveys/acs
23
Mid-Level Incomes
Relatively small portion of population
42% of Palo Altans are renters
per US Census Bureau
2014 American Community Survey (ACS) data
May qualify for personal loans
24
Analytics for Neighboring City
Menlo Park, July 2014 to Dec 2016
–11 homes
–8 solar projects
25
Financing Options for Solar
5kW system, $4/W $20K cost (pre tax credit)
26
PV Calculator Assumes 5%
Interest Rate
27
PACE loan rate for solar ~ 8%
Total cost over 20 years for 5kW PV system
($14K after 30% tax credit):
–@ 5% $22,174
–@ 8% $28,104 + 4.99% admin fee of $699
= $28,803
Δ = $6,629
30% higher
PACE Comparison
28
PACE Comparison to PPA
20-year cost, PACE: $28,803
20-year cost, PPA: $22,343
PACE 29% higher than PPA over 20 years
PPA cost breakdown from PV calculator:
29
Conclusions
Benefits of PACE financing may be less
applicable in Palo Alto than in other
communities
–Many property owners have better financing
options
–Temperate climate means savings are typically
below PACE payments
–Possible re-fi or home sale issues
–Small, engaged community with municipal utility
means less need for outside EE/RE marketing
30
Discussion Item
Property Assessed Clean Energy
(PACE) Financing: Program History
and Future Considerations
in Palo Alto
Utilities Advisory Commission
February 1, 2017