Loading...
HomeMy WebLinkAbout2019-10-02 Utilities Advisory Commission Agenda PacketAMERICANS WITH DISABILITY ACT (ADA) Persons with disabilities who require auxiliary aids or services in using City facilities, services or programs or who would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact (650) 329-2550 (Voice) 24 hours in advance. NOTICE IS POSTED IN ACCORDANCE WITH GOVERNMENT CODE SECTION 54954.2(a) OR 54956 I.ROLL CALL II.ORAL COMMUNICATIONS Members of the public are invited to address the Commission on any subject not on the agenda. A reasonable time restriction may be imposed at the discretion of the Chair. State law generally precludes the UAC from discussing or acting upon any topic initially presented during oral communication. III.APPROVAL OF THE MINUTES Approval of the Minutes of the Utilities Advisory Commission Meeting held on September 4, 2019 IV.AGENDA REVIEW AND REVISIONS V.REPORTS FROM COMMISSIONER MEETINGS/EVENTS VI.GENERAL MANAGER OF UTILITIES REPORT VII.COMMISSIONER COMMENTS VIII.UNFINISHED BUSINESS - None IX.NEW BUSINESS 1.Discussion of Sea Level Rise Adaptation Strategy Discussion 2.Discussion of Proposed 2019 Energy Reach Code Discussion 3.Discussion of Utilities Customer Programs Discussion 4.Discussion of Utilities Strategic Plan Update Discussion 5.Selection of Potential Topic(s) for Discussion at Future UAC Meeting Action NEXT SCHEDULED MEETING: November 13, 2019 ADDITIONAL INFORMATION - The materials below are provided for informational purposes, not for action or discussion during UAC Meetings (Govt. Code Section 54954.2(a)(2)). Informational Reports 12-Month Rolling Calendar Public Letter(s) to the UAC Update on 2019 Utilities-Related Legislation UTILITIES ADVISORY COMMISSION – SPECIAL MEETING WEDNESDAY, October 2, 2019 – 7:00 P.M. COUNCIL CHAMBERS Palo Alto City Hall – 250 Hamilton Avenue Chairman: Michael Danaher  Vice Chair: Lisa Forssell  Commissioners: Donald Jackson, A.C. Johnston, Greg Scharff, Lauren Segal, and Loren Smith  Council Liaison: Tom DuBois At-Place Memo Utilities Advisory Commission Minutes Approved on: December 4, 2019 Page 1 of 8 UTILITIES ADVISORY COMMISSION MEETING MINUTES OF OCTOBER 2, 2019 REGULAR MEETING CALL TO ORDER Vice Chair Forssell called the meeting of the Utilities Advisory Commission (UAC) to order at 7:00 p.m. Present: Vice Chair Forssell, Commissioners Jackson, Johnston, Scharff, Segal, and Smith Absent: Chair Danaher ORAL COMMUNICATIONS None. APPROVAL OF THE MINUTES Vice Chair Forssell corrected her statement under Item 5 to "Vice Chair Forssell expressed interest in visiting CPAU facilities at some point and inquired regarding other Commissioners' interest. Dean Batchelor, Utilities Director, offered to notify Commissioners of opportunities to join existing tours." In reply to Commissioner Smith's inquiry about further UAC discussion of the agreement with Santa Clara Valley Water District, Dean Batchelor, Utilities Director, indicated staff agreed to continue the UAC discussion depending on the results of the Council's study session. The study session went well, and the Council will discuss the agreement in late November. Vice Chair Forssell moved to approve the minutes of the September 4, 2019 meeting as amended. Commissioner Johnston seconded the motion. The motion carried 6-0 with Vice Chair Forssell and Commissioners Jackson, Johnston, Scharff, Segal, and Smith voting yes, and Chair Danaher absent. AGENDA REVIEW AND REVISIONS None. REPORTS FROM COMMISSIONER MEETINGS/EVENTS Commissioner Scharff advised that he attended the Northern California Power Agency (NCPA) annual conference, where he learned the Legislature will not act on the inverse condemnation issue related to wildfire risk and electrical blackouts will occur during potential wildfire events. Two interesting discussions during the conference concerned intermittent risks that renewable solar and wind and growth of distributed generation combined with planned retirement of baseload facilities pose to the ability of the California Independent System Operation (CAISO) to run the grid and transparency and cost effectiveness in transmission. FINAL Utilities Advisory Commission Minutes Approved on: Page 2 of 8 GENERAL MANAGER OF UTILITIES REPORT Dean Batchelor, Utilities Director, delivered the General Manager’s Report. Recycled Water Council Study Session: On September 23, Council held a study session about water reuse expansion opportunities from the Regional Water Quality Control Plant and a potential regional treated wastewater transfer from the plant to Valley Water. Several members of the public spoke; some expressing a desire for environmental benefits to result from any contractual arrangements or water reuse projects. Council generally indicated support for the transfer agreement which includes Valley Water payments of $1 million per year and $16 million for a local salt removal facility to improve the recycled water quality, which will be used in Palo Alto and Mountain View for landscape irrigation and toilet flushing. The agreement is scheduled for Council consideration on November 18. The consultant report will return to the UAC in January 2020 and to Council for acceptance in February 2020. White Paper on Impact of Building Electrification on California Gas Systems Released: Over the summer, Utilities staff participated in a working group to talk through building electrification and impacts on California’s gas systems, including how to mitigate those impacts. Participants included representatives from key consumer, labor, equity, utility and environmental organizations. The group was hosted by Gridworks, a nonprofit that works to convene, educate and empower stakeholders to decarbonize electricity grids. Gridworks released a white paper to summarize the findings, which we will email to the Commission. The essential point of the paper is that if California does not carefully manage its transition toward delivering less gas, there will be unacceptable customer impacts; however, the paper lists strategies to mitigate those impacts. HP Solar Ribbon Cutting: The City and HP hosted a ribbon-cutting ceremony earlier this month to celebrate completion of a new solar array project on the company’s Palo Alto campus. The project combines rooftop and carport solar photovoltaic (PV) systems, which are projected to generate 2,355 megawatt hours of energy, or the equivalent to powering 263 average Palo Alto homes each year. HP is selling the electricity back to the City of Palo Alto Utilities (CPAU) through the Palo Alto CLEAN feed-in tariff program, and this project is now the largest of six solar projects participating in the CLEAN program. PG&E Public Safety Power Shutoff: Last week, as a safety precaution, PG&E issued notice of a potential public safety power shutoff for a large area of California due to gusty wind conditions and high temperatures. While this ultimately did not impact Palo Alto, City staff shared messaging with community members to help them prepare for a potential power outage. The City always recommends that people be prepared for unexpected emergencies and utilize resources at www.cityofpaloalto.org/preparedness. Utilities Events Utilities staff recently participated in or hosted the following events: •Midtown Ice Cream Social - September 15 •EV Technical Assistance Program Soft Launch Workshop - September 18 •SunShares Workshop - September 21 •Emergency Preparedness Event – September 22 •EV Ride and Drive with Acterra During National Drive Electric Week - September 22 Utilities is hosting the following upcoming events: •Bay Area Home Electrification Expo - Thursday, October 10, from 2-7 pm at the Mitchell Park Community Center. This is a first-of-its-kind, free, public event for homeowners, renters and building professionals. Attendees will hear from experts on the importance of switching from fossil fuels to help California reach its climate goals, and from manufacturer representatives on electric technologies that can add value and comfort. •Electric Cars Demystified Workshop - October 23, from 6-8:30 pm at the Palo Alto Art Center. Utilities Advisory Commission Minutes Approved on: Page 3 of 8 Utilities Undergrounding: On September 16, the City Council amended Rule 20 to allow underground districts to be self-funded. Other rule amendments will be presented to the Council in November. Staff incorporated the UAC's comments regarding timeframes for notification and collection into the proposed language for Rule 20. If the Council approves additional rule amendments in November, staff will begin working with Green Acres residents. In response to inquiries, Batchelor advised that the UAC will not review the proposed rule amendments again. During the Council meeting, Councilmember DuBois added language to Rule 3 to screen pad-mounted transformers. The threshold for residents' consent to funding underground utilities remains at 60%. COMMISSIONER COMMENTS In reply to Commissioner Jackson's query regarding the Request for Proposals (RFP) for Fiber to the Home, Dean Batchelor, Utilities Director, reported the RFP was issued on September 27. He will forward a copy of the RFP to Commissioners. UNFINISHED BUSINESS None. NEW BUSINESS ITEM 1: DISCUSSION: Discussion of Sea Level Rise Adaptation Strategy. Jeremey Lowe, San Francisco Estuary Institute, reported sea level rise (SLR) has been measured, and observations align with modeling. Data about the Bay shows a general trend of the Bay water level rising 7 inches per century. Adaptation has to be implemented with mitigations. The State provides guidance on interpreting scientific projects and incorporating them into planning and policy. SLR is expected to raise the level of waters around the world 1.92 feet by 2050 and 5-7 feet by 2100. With SLR, the size of king tide and storm events will increase, and they will occur more frequently. Creeks will flood more often because of SLR. Potential impacts of SLR include increased storminess, increased rainfall intensity, subsidence and erosion, rising groundwater, and surface flooding. A horizontal levee combines a built structure, a marsh, and a gentle slope between the marsh and the levee and improves flood risk management. The South Bay Salt Pond Project is doing a large amount of restoration work, which will act as a buffer between the Bay and the levees. The Shoreline Study is looking at a long-term levee approach to flood risk management. Adaptation pathways are interventions planned in phases over the long term. Julie Weiss, Policy and Public Education Manager, advised that climate protection is one of the Council's four priorities. The Council approved a Sea Level Rise Adaptation Policy (Policy) in 2019. Several projects and plans are underway, including the San Francisquito Creek flood control project and a horizontal levee at the east end of Embarcadero Road. The Community Services Department has completed a vulnerability assessment of the impacts of SLR on the Baylands habitat. At 12 inches of SLR, much of the Baylands habitat will be submerged. At 36 inches, Bay water could impact utilities, the airport, and recreational facilities. When repairs to the Palo Alto flood basin tide gate are complete, the gate will be adaptable to future levee improvements. Next fall, the City will begin construction of a secondary outfall pipe from the Regional Water Quality Control Plant (RWQCP) to accommodate higher amounts of water and to withstand 3 feet of SLR. The Council recently approved a Green Stormwater Infrastructure Plan. Green stormwater infrastructure mimics nature by slowing spread and sinking water to reduce fast runoff to the Bay. In the coming decades, groundwater levels will rise. The Policy seeks to coordinate work across City departments. Actions could include changing design standards for structures in the flood zone and the SLR inundation area. The Policy has been vetted by scientists and colleagues in other agencies. A public meeting in March was successful. Next steps are to contract with a consultant for an SLR vulnerability assessment and to return to Council with an update or draft SLR plan by the end of 2020. In reply to Commissioner Johnston's query regarding priorities for utilities, Weiss indicated staff needs to fill data gaps before they can determine priorities. Lowe suggested the City learn from other communities and Utilities Advisory Commission Minutes Approved on: Page 4 of 8 incorporate adaptation into capital improvement projects. Phil Bobel, Public Works Assistant Director, related that staff is thinking quantitatively about groundwater impacts. A preliminary conclusion is SLR will have a 1:1 correspondence with groundwater at the interface of the Bay and shore. The impact will likely be seen in the area between the Bay and the El Camino area. The RWQCP is protected by a levee, but the levee is inadequate, which raises a policy question about assumptions for existing and upgraded levees through the SAFER project. In response to Commissioner Smith's question about existing projects relating to a plan for protection, Weiss explained that existing projects will be a starting point, and the plan will identify additional projects. The vulnerability assessment will identify gaps in the strategic plan. In answer to Commissioner Segal's inquiry about using existing information when planning projects, Dean Batchelor, Utilities Director, advised that staff is looking at incorporating adaptation in the water, gas, and wastewater group. Weiss added that quarterly meetings for staff from all departments helps staff to communicate and coordinate information. Commissioner Scharff assumed it would be less expensive to improve levees than to harden infrastructure. Bobel remarked that the policy question is whether to rely only on the levee system or to harden infrastructure as well. In response to Commissioner Scharff's query regarding San Francisco Bay Restoration Authority funding for projects, Bobel reported sufficient funding has not been identified nationally or regionally for all the work needed. Weiss added that the City has received Measure A funding for part of the preliminary design of a horizontal levee and Proposition 1 funding for the next phase. Staff is engaging in regional discussions about projects and funding. In reply to Vice Chair Forssell's question about the need for a consultant, Bobel explained that staff cannot address SLR quickly or the vulnerability assessment in the detail required. The vulnerability assessment requires a consultant with experience and expertise. Vice Chair Forssell requested updates as the assessment progresses and more knowledge is gained. ACTION: None ITEM 2: DISCUSSION: Disc of Proposed 2019 Energy Reach Code. Tom Kabat encouraged the UAC to support staff in reducing greenhouse gas (GHG) emissions in ways that are rapid, far-reaching, and unprecedented. Contractors and installers want to continue using the same methods and materials. The Reach Code may need to remove the ability for contractors to make the same stranded-asset mistakes. Gas-free buildings are less expensive to build. Bret Andersen, Carbon Free Palo Alto, recommended a strong Reach Code and a prohibition of gas in homes. An all-electric home is more cost effective to build. Christine Tam, Senior Resource Planner, reported the building sector accounts for 43% of the expected GHG emissions by 2030. New buildings in the City each year account for less than 1% of the total building stock. Mandating all-electric new construction today will achieve a 5% reduction for the 80 by '30 goal. Short-term actions to reach the 80 by '30 goal include efficient water usage, reduction of single-occupancy vehicle travel, acceleration of electric vehicle (EV) penetration, and increased energy efficiency and electrification. The California Energy Commission (CEC) adopts California Building Energy Standards every three years, and the next cycle begins January 1, 2020. All California cities are required to meet building standards. Local jurisdictions can adopt Reach Codes that exceed the Building Energy Standards. The City adopted Energy Reach Codes in 2008, 2010, 2013, and 2016. The Green Building Advisory Group provides feedback regarding priorities for the Green Building Ordinance and the Energy Reach Code. The goal of the Green Building Ordinance is to design, build, and operate a new generation of efficient, environmentally responsible, and healthy buildings within the City. Under the 2016 Energy Reach Code, single-family residential buildings need to be either 10% or 20% more efficient than the base code. Multifamily residential and commercial buildings Utilities Advisory Commission Minutes Approved on: Page 5 of 8 need to be more efficient than the base code. All-electric buildings are exempt from the Reach Code. The goals of the 2019 Energy Reach Code are energy efficiency and zero emissions. Staff hosted a green building summit in February 2018 to identify priorities for the Green Building Ordinance and the Energy Reach Code. Staff has participated in a statewide cost-effectiveness study and held public engagement meetings in 2019. The proposed Reach Code will be presented to the Council in November. The City of Berkeley prohibits natural gas infrastructure in new buildings beginning in 2020, but the ordinance contains many exceptions. The City of Menlo Park requires all new residential buildings to be electrically heated with a few exceptions. The City of San Jose requires additional energy efficiency and solar installation with energy storage for mixed- fuel new construction projects; mixed-fuel projects also need to be all-electric ready. Staff is considering expanding rebate offerings for air source heat pumps, induction cooktops, efficient electric clothes dryers, and EV chargers with electric panel upgrades in existing residences; a CLEAN home rebate program for all- electric new residential buildings that are more efficient than the baseline requirements; and additional marketing and outreach to educate the community regarding the benefits of all-electric buildings and additional resources available at the City website. Staff proposes a $2,000 rebate for all-electric single-family new construction, a $1,000 rebate for all-electric multifamily construction, and a $6,000 rebate for converting a single-family residence to all-electric appliances. The estimated cost of all rebate programs over three years is $850,000. Staff also requests additional staffing of 0.75 full-time equivalent (FTE) and a marketing budget of $100,000 for the first year and $25,000 in the second and third years. Jonathan Abendschein, Assistant Director of Resource Management, added that staff will discuss these requests internally and with the City Manager. In answer to Vice Chair Forssell's request for an estimate of the total amount of carbon saved for the $1 million budget, Tam advised that staff expects to avoid GHG emissions of about 245 metric tonnes per year through the Reach Code and rebate programs. She would provide the carbon savings generated by rebates alone at a later time. In response to Commissioner Johnston's query regarding the source of funding, Abendschein explained that a portion of funding will come from Low Carbon Fuel Standard revenues. Staff is reviewing a variety of funding sources that do not result in rate increases. In reply to Commissioner Scharff's inquiry regarding the rationale for the $2,000 rebate amount for all-electric new construction, Tam indicated a cost-effectiveness study found the cost to increase efficiency by 12-15% is approximately $5,000. The rebate amount is approximately half the cost to increase efficiency. Commissioner Scharff asked if the goal of the rebate program is to incentivize electrification of existing homes. Tam clarified that GHG reduction is one objective. A second objective is to increase efficiency. Increasing efficiency creates more headroom for additional electrification and delays upgrades of grid infrastructure. Cost-effective efficiency saves the customer money over the long term and creates more capacity for the grid to handle additional load growth. Commissioner Scharff suggested the City should subsidize actions that will move the City towards its goals and include staffing cost in the cost of the programs. Expending $300,000 for marketing and staffing to achieve a total rebate amount of $168,000 may not be a good use of funds. Abendschein clarified that the third rebate program applies to existing buildings, and the vast majority of funding will be used for existing buildings. An all-electric home may have a lower construction cost, but the energy bill is higher. Increasing efficiency reduces the bill so that an all-electric home is less expensive over time. Commissioner Scharff did not believe a $2,000 rebate would be an incentive. Commissioner Smith noted mobility options at 15% and electrification of vehicles at 25% provide 40% of possibilities to reduce GHG emissions. Other incentives include an air-source heat pump, induction cooking, Energy Star electric clothes dryer, and EV charger installation and electric panel upgrades, all of which provide tremendous opportunities to reduce GHG emissions. Tam reported an existing program offers rebates for heat pump water heaters, and staff hopes to implement rebate programs for the others. The $6,000 rebate program will cover projects that utilize a heat pump water heater, air source heat pump, induction cooktop, clothes dryer, and panel upgrade. In reply to Commissioner Smith's query regarding applying low-carbon fuel refund credits appropriately, Abendschein related that staff has not made progress on trading California Utilities Advisory Commission Minutes Approved on: Page 6 of 8 renewable energy credits (REC) for out-of-state RECs. Trading those credits could generate funding for rebate programs without generating ratepayer impacts, but the public perception of trading credits could be negative. Commissioner Smith recalled that credits could be lost, which could reduce potential funding for rebate programs. In answer to Commissioner Segal's inquiry regarding heat pump systems for large commercial buildings, Tam elucidated that a building of more than 100,000 square feet needs a very large heat pump system, which could create a large electrical load. Large heat pump systems occupy a large space and are very heavy. Commercial buildings under 30,000 square feet can easily be constructed as all electric. The Reach Code could mandate commercial buildings of less than 30,000 square feet be built to all-electric standards. The Reach Code is designed to differentiate residential and nonresidential buildings, not to differentiate buildings based on square footage. Commissioner Segal noted customer satisfaction feedback indicates customers are cost sensitive and interested in reducing GHG emissions. Therefore, adopting a Reach Code that addresses those desires is logical, but some type of electrification Reach Code is needed. Tam reported Stanford Research Park sent a letter commenting on the difficulty of designing life science buildings and large commercial buildings to be all electric. Commissioner Segal expressed interest in the amount of GHG savings that could result from an exemption for large buildings and specific types of buildings. In response to Commissioner Jackson's question regarding Reach Code provisions for replacing gas appliances in existing buildings with electric appliances, Tam related that the Building Energy Standards do not address existing buildings. For cities, the Reach Code exceeds the Building Energy Standards required by the CEC. Local jurisdiction adoption of a Reach Code that addresses existing buildings is difficult. Commissioner Jackson supported a ban on the use of gas in new construction with some exceptions. Trading RECs could generate a large amount of revenue that could be used to incentivize conversion of existing homes. He suggested staff educate the public, including children, about the advantages of all-electric homes and the environmental impacts of natural gas. Commissioner Scharff supported an exception for an internal accessory dwelling unit (ADU) and questioned whether gas cooking, fireplaces, and grills have a material impact on GHG emissions. Abendschein indicated at some point gas utility infrastructure that serves only small uses is not sustainable. Allowing small uses of gas may be a good strategy to transition to all-electric appliances. Commissioner Scharff did not believe a significant number of existing buildings would convert to all electric. The City should allow gas for cooking, grills, and fireplaces in new construction unless the City plans to close the gas utility. Commissioner Johnston recommended staff not impose electrification requirements on buildings where technology is not available. If the City adopts these kinds of Reach Codes, marketing will be needed to reassure the public that they will have a reliable electric supply. Vice Chair Forssell expressed interest in a Reach Code that requires all-electric new buildings with few exemptions. She did not want to disincentivize construction of ADUs. For nonresidential buildings, the list of exemptions will be lengthy. The rebate programs require a fair amount of staff time and funding; yet, they provide a fairly low carbon impact. The effectiveness of a $2,000 rebate is unclear. Perhaps staff should use a similar amount of funds to educate contractors and increase their expertise. Tam advised that staff considered a one-time $6,000 rebate for disconnecting the gas meter, but most homeowners are more willing to convert each appliance as it needs to be replaced. Vice Chair Forssell suggested staff explore a different all-electric rate along with the Reach Code. ACTION: None ITEM 3: DISCUSSION: Discussion of Utilities Customer Programs. Lena Perkins, Acting Senior Resource Planner, reported for more than 30 years CPAU has been offering customer programs in the areas of efficiency, income qualifications, local renewables, and emerging technologies. Efficiency encompasses the water, gas, and electric utilities. Since 2015, CPAU has added Utilities Advisory Commission Minutes Approved on: Page 7 of 8 programs for low-carbon transportation, building decarbonization (fuel switching), and sustainability. Some required programs include efficiency and local renewables. Staff has some flexibility in designing and implementing programs. Staff has added CO2 as a prioritization criterion. Evaluation priorities include customer satisfaction, equity, emissions impact, efficiency savings, and cost effectiveness. Staff utilizes technology, analytics, customer and community engagement, and regional partnerships to implement programs. Efficiency savings goals or targets for the electric and gas utilities are adopted every four years. The fiscal year (FY) 2018 goal for natural gas was almost twice the goal for FY 2017, and the City almost reached the FY 2018 goal. The City exceeded the FY 2018 electric goal, which was approximately 20% higher than the FY 2017 goal. The City adopted higher goals because efficiency savings, especially in electricity and natural gas, save carbon. Electric efficiency programs avoided as much carbon as gas efficiency programs in FY 2018. Because natural gas is on the grid 97% of the time, saving electricity saves carbon 97% of the time. Programs 3, 4, 7, 8, and 10 address all five priorities of customer satisfaction, equity, emissions impact, efficiency savings, and cost effectiveness. Key things that will be different in FY 2020 are an efficiency concierge program for small and medium businesses, customer usage reports for commercial accounts, and an internal software tool to track programs and compare program results. Commissioner Segal commented that economics is a huge factor to prioritize. Commissioner Scharff believed maintaining low utility rates should be a priority. Perkins noted low rates are a component of cost effectiveness. Commissioner Smith requested the rationale for limiting the heat pump water heater rebate program to income-qualified multifamily residents. Perkins indicated the rebate program is funded with a special grant from the Bay Area Air Quality Management District (BAAQMD) to retrofit multifamily residences with heat pump space heaters. In reply to Commissioner Smith's inquiry regarding the income limit for income-qualified and the focus on multifamily residential, Perkins answered approximately $50,000 for a single person household. Smith noted an EV charger costs around $500, and a panel upgrade costs approximately $1,500- $2,500. If someone wants to convert to a heat pump and install an EV charger, the rebate program will not provide much of an incentive. Perkins reported new programs could address the issue. Single-family residents need incentives, but multifamily residents are difficult to reach and comprise 40% of Palo Alto's population. In addition, the majority of multifamily residents are renters. The landlord has minimal incentive to invest in infrastructure upgrades, especially since the demand for housing is high. Multiple programs target multifamily residents in order to help an underserved segment of the population. In answer to Commissioner Smith's query regarding the percentage of single-family homes that is all electric, Perkins indicated the percentage is in the single digits. Commissioner Smith suggested staff explore programs for single-family homes built between 1954 and 1958. Commissioner Johnston remarked that the cost data is helpful. Perkins clarified that all programs except the EV charger, multifamily concierge, and income-qualified programs are extremely cost effective. Commissioner Segal felt customer education should be a higher priority than customer satisfaction and customer service. In response to Vice Chair Forssell's inquiry regarding future opportunities for the UAC to review the details of rebate programs, Perkins indicated the UAC could review them at a future meeting. Vice Chair Forssell believed carbon reduction should be a priority. Programs should target segments of the population that can provide the most carbon savings for the cost of the program. ACTION: None ITEM 4: DISCUSSION: Discussion of Utilities Strategic Plan Update. Utilities Advisory Commission Minutes Approved on: December 02, 2019 Page 8 of 8 ACTION: Commissioner Scharff moved to continue Item Number 4 to a subsequent meeting. Commissioner Segal seconded the motion. The motion carried 6-0 with Vice Chair Forssell and Commissioners Jackson, Johnston, Scharff, Segal, and Smith voting yes, and Chair Danaher absent. ITEM 5: ACTION: Selection of Potential Topic(s) for Discussion at Future UAC Meeting. Commissioner Smith reiterated his request for a continued discussion of trading RECs. Jonathan Abendschein, Assistant Director of Resource Management, advised that staff hopes to schedule a discussion in December or January. Staff will be in a good position to take advantage of opportunities to trade RECs in 2020 if an effective discussion is held by June 2020. Abendschein explained the shrinking opportunity to trade California RECs for out-of-state RECs. ACTION: None NEXT SCHEDULED MEETING: November 13, 2019 Meeting adjourned at 9:54 p.m. Respectfully Submitted Tabatha Boatwright City of Palo Alto Utilities Utilities Advisory Commission Minutes Approved on: Page 1 of 9 UTILITIES ADVISORY COMMISSION MEETING MINUTES OF SEPTEMBER 4, 2019 REGULAR MEETING CALL TO ORDER Chair Danaher called the meeting of the Utilities Advisory Commission (UAC) to order at 7:00 p.m. Present: Chair Danaher, Vice Chair Forssell, Commissioners Jackson, Johnston, Segal, and Smith Absent: Commissioner Scharff ORAL COMMUNICATIONS None. APPROVAL OF THE MINUTES Commissioner Smith remarked that a follow-up discussion regarding the use of out-of-state Renewable Energy Certificates (REC) is needed. Commissioner Johnston moved to approve the minutes of the August 7, 2019 meeting as presented. Commissioner Segal seconded the motion. The motion carried 6-0 with Chair Danaher, Vice Chair Forssell, and Commissioners Jackson, Johnston, Segal, and Smith voting yes and Commissioner Scharff absent. AGENDA REVIEW AND REVISIONS None. REPORTS FROM COMMISSIONER MEETINGS/EVENTS None. GENERAL MANAGER OF UTILITIES REPORT Dean Batchelor, Utilities Director, delivered the General Manager’s Report. State Proposes $33M in New Funding for Electric Vehicle Charging Infrastructure – Tonight on your agenda is an update on the City’s electric vehicle programs. One of the items we highlight is a new potential funding source, announced just last month, from the California Energy Commission (CEC) for electric vehicle charging equipment. The CEC is partnering with local energy agencies in San Mateo and Santa Clara Counties, including the City of Palo Alto Utilities (CPAU), to help accelerate installation of workplace and public charging stations. This project, which is expected to launch in spring 2020, is an initiative of the California Electric Vehicle Infrastructure Project (CALeVIP), which aims to develop and implement regional incentives to support statewide adoption of EVs. CEC is proposing $33M in matching funds to these local agencies, pending approval by their respective governing boards or city councils. By leveraging local investment, CALeVIP funds will further expand EV charging accessibility in the region. Special Nissan Leaf Rebates for Palo Alto Utilities Customers – The American Public Power Association (APPA) is partnering with Nissan and public power utilities to offer rebates on Nissan Leaf electric vehicles. DRAFT Utilities Advisory Commission Minutes Approved on: Page 2 of 9 For a limited time only, through September 30, public power utility customers and utility employees are eligible for rebates on the 2019 Nissan Leaf Standard and 2019 Nissan Leaf ePlus. This offer cannot be combined with the discounts on EVs offered through the Bay Area SunShares program. Try an Induction Cooktop For Free – CPAU is offering a new program in partnership with Acterra that allows customers to test out an induction cooktop. Customers can request a cooktop loaner kit for free by emailing greenathome@acterra.org or calling our Utilities team at (650) 329-2241. The 2018 Mayor’s Green Business Leader Awards - On August 19, the City and Mayor Filseth honored 13 companies with the Mayor’s Green Business Leader Award. This award honors the exceptional efforts of Palo Alto businesses that have earned a U.S. Environmental Protection Agency Energy Star Certification, a U.S. Green Building Council’s LEED Certification, or both in 2018. This year, we honored 13 companies with a total of 34 buildings, representing over two million square feet of very efficient commercial floor space in Palo Alto. Upcoming Events – please visit cityofpaloalto.org/workshops for details and registration on all our events. • Free SunShares Workshop – September 21, 10 am-noon at the Palo Alto Art Center - Attend a free workshop to learn about the benefits of the Bay Area SunShares program, which offers discounts on rooftop solar and electric vehicles. At the workshop, we will share tools and resources to help you install solar and/or start driving emissions free. • Bay Area Home Electrification Expo - Palo Alto is partnering with cities and energy agencies in Santa Clara and San Mateo Counties to host the first ever Bay Area Home Electrification Expo. The Expo will give residents and business in the area an opportunity to learn about switching from fossil fuels to clean electricity for transportation, cooking, water heating, space heating and clothes drying. There will be two events for attendees to choose from; one in the evening in Palo Alto at the Mitchell Park Community Center on October 10 or one during the day on October 12 at the Tech Interactive Museum in San Jose. Fiber to the Home Request for Proposals (RFP) – Commissioner Smith assisted staff with revising the RFP, which has been submitted to the City Attorney for review. Hopefully, the RFP will be released within the next two weeks. Underground Utilities in the Green Acres Neighborhood – Staff will present a report to the City Council on September 16. COMMISSIONER COMMENTS None. UNFINISHED BUSINESS None. NEW BUSINESS ITEM 1: DISCUSSION: Discussion of Proposed Upcoming Resiliency Workshop. Debra Lloyd, Acting Assistant Director of Utilities Engineering, reported the second workshop will focus on developing action items. The workshop will likely be scheduled for the UAC meeting in either November or December. Guest speakers could be local experts. Potential topics are microgrids, a second transmission line, public communications as part of emergency preparedness and during widespread outages. Commissioner Segal felt the use of small breakout groups was productive in the first workshop. Action items should be clearly defined and include tradeoffs if the goal of the workshop is to develop projects and priorities. Utilities Advisory Commission Minutes Approved on: Page 3 of 9 Vice Chair Forssell suggested staff from the appropriate departments would have the most relevant and specific knowledge to share with participants. The workshop should be weighted toward obtaining participants' feedback rather than speaker presentations. Commissioner Johnston concurred with using the workshop to develop a prioritized list of projects, and staff should prepare a finite list of projects that address the issues raised in the first workshop. Staff can provide more useful information than outside experts. Perhaps staff can share best practices or useful solutions learned through real-life disasters. Chair Danaher recommended materials clearly state whether the workshop will focus on acute, near-term disasters or mid and long-term issues. Following the workshop, staff may wish to share with the UAC the actionable and useful takeaways from the workshop. Commissioner Smith commented that preparations for an acute disaster often apply to long-term issues. A logical goal for the workshop is developing a list of five to ten key projects that would increase the resiliency of the City of Palo Alto. ACTION: None ITEM 2: DISCUSSION: Discussion of Utilities Wildfire Mitigation Plan. Tom Ting, Electric Engineering Manager, reported the risk factors for wildfire include rising temperatures, vegetation density, terrain, and drought conditions. The primary focus of the Wildfire Mitigation Plan (Plan) is to prevent overhead electric lines from causing wildfires. In 2012, the California Public Utilities Commission (CPUC) initiated development of a statewide Fire Threat Map. Publicly owned utilities received a copy of the draft map and assessed their service territories for accuracy. In 2018, the City's consultant classified all areas within the city limits west of Highway 280 as Tier 2-elevated risk. The classifications are Tier 1-moderate risk, Tier 2-elevated risk, and Tier 3-extreme risk. The CPUC updated General Order 95 with more stringent construction, inspection, and maintenance requirements for areas with a high fire threat. Staff presented the information to the Council, and the Council determined that the area within the City's jurisdiction had a high fire threat. Section (12) of Senate Bill (SB) 901 requires all utilities to prepare a Plan that must be reviewed by a qualified, independent evaluator and presented to utilities' governing bodies at public meetings. Staff has revised the Foothills Fire Mitigation Plan prepared by the Fire Department and Urban Forestry Division to address utility-related issues. Staff has informed the Urban Forestry Division of the more stringent requirements and increased the frequency of inspections and maintenance. Staff is exploring methods to de- energize the one electric circuit that extends into the Foothills and to communicate information to customers. Staff is reviewing construction practices to replace, rebuild, or reinforce the Foothills electric line, two-thirds of which is located overhead on wood poles. In addition, staff is drafting metrics to ensure the Plan is effective. In response to Commissioner Johnston's inquiries regarding a timeframe for developing processes and procedures, Ting advised that work on processes and procedures will follow completion of the Plan, which is scheduled for the end of the year. In reply to Chair Danaher's query about additional UAC review, Ting indicated staff will present the Plan to the Council without further review by the UAC. In answer to Vice Chair Forssell's question of whether a timeline for implementation of Plan processes is required, Ting related that the Plan must be completed and presented to governing bodies before January 2020. There is not a requirement to prepare a timeline, but the Plan contains a timeline for activities that staff wants to complete. ACTION: None Utilities Advisory Commission Minutes Approved on: Page 4 of 9 ITEM 3: DISCUSSION: Discussion of Updates to Customer Programs to Accelerate Electric Vehicle Adoption. Hiromi Kelty, Utility Marketing Program Administrator, reported the Low Carbon Fuel Standard (LCFS) Program is administered by the California Air Resources Board (CARB). LCFS was designed to reduce the carbon intensity of transportation fuels through a goal of reducing carbon emissions from transportation by 10 percent by 2020. Electric utilities that provide electricity to charge electric vehicles (EV), such as CPAU, are eligible for LCFS credits based on the number of EVs in the utility's territory. The utility is required to monetize the credits and use the funds to benefit current and future EV drivers in California. CARB approved CPAU's participation in LCFS in 2014 and has been allocating credits to CPAU since that time. In 2015, the value of credits was approximately $250,000. In 2018, the credits were valued at $1.5 million. After obtaining stakeholder feedback, staff launched the EV charger rebate program for schools, nonprofits, and multiunit dwellings in 2017. Funds are also utilized to host ride-and-drive events and workshops. CPAU has installed 14 Level 2 EV chargers and launched an online EVPV calculator and a residential transformer upgrade rebate program. Staff has spent approximately $150,000 of LCFS funds, and $3.5 million is available for future programs. Fifty-three public ports have been installed, and the City's fleet includes four all-electric vehicles. Customer surveys conducted over the past few years found 15 percent of Palo Alto households own or drive an EV; one in three new vehicles in Palo Alto was an EV in 2017; 73 percent of EV owners charge them at home; 26 percent of solar customers own an EV; seven out of ten current EV drivers indicated they were likely to obtain a second EV; and 82 percent of these customers said they drive an EV because it is better for the environment. Of the 85 percent of Palo Alto residents who do not own or drive an EV, 37 percent are considering an EV, but 35 percent of the 37 percent do not feel they will have access to charging at home. Seventy percent are very interested in their next vehicle being an EV if EV charging is readily available. Forty- five percent would be more likely to lease or purchase an EV if a rebate is available. Ten thousand Palo Alto households or 42 percent of households live in multiunit dwellings. The lack of home charging is a major barrier to residents who live in multiunit dwellings adopting EVs. Staff prefers to fund EV chargers that are shared and used by multiple people throughout the day. Based on customer feedback, staff will focus on programs for vehicle rebates and expansion of EV charging infrastructure in order to accelerate EV penetration. Proposed expenditures include $5.1 million in rebates for EV chargers installed at multiunit dwellings, low-income housing, nonprofits, and mixed-use properties; $1 million as matching funds for the CALeVIP grant; $1 million for point-of-purchase EV rebates; $1.3 million for single-family home utility connection fee rebates, all-electric home rebates, and education and outreach expenses; and $0.3 million to explore EV rebates for low-income households. The City Manager approved changes to the EV charger rebate program in August. Over the next three years, staff hopes to install at least 250 new ports, increase the number of EVs registered at multiunit dwellings, and reduce transportation-related emissions by 1,000 metric tons per year. The strategy for engaging stakeholders includes a meeting with community members on August 29; emails to residents regarding the UAC discussion; outreach through the Palo Alto Chamber of Commerce; commercial customer newsletters and meetings; and one-on-one contact through existing programs. In November, staff will present the CALeVIP grant to the Council. The update of the Sustainability and Climate Action Plan (S/CAP) in 2020 will provide an opportunity for evaluation and public discussion of additional programs. In response to Commissioner Segal's inquiry regarding the loss of parking spaces at multiunit dwellings when charging infrastructure is installed, Kelty explained that multiunit dwellings are not subject to ADA requirements; therefore, the loss of parking spaces is not a barrier to installation of charging infrastructure. Owners of multiunit dwellings did not participate in the August 29 meeting. Staff and the consultant will contact owners of multiunit dwellings about future workshops. Arthur Keller commented that the point-of-purchase rebate program will generate revenue for CPAU. Time- of-use metering should be considered a method for promoting EV charging. Vehicle-to-grid concepts will be the next phase. Staff should update EV infrastructure policies. Commissioner Segal suggested staff also focus on increasing daytime charging. Utilities Advisory Commission Minutes Approved on: Page 5 of 9 Vice Chair Forssell supported the focus on multiunit dwellings and public charging stations. In many cases, Level 1 chargers will be sufficient for multiunit dwellings. In reply to Vice Chair Forssell's question regarding the rationale for requiring approval of Level 1 chargers, Kelty explained that Level 1 chargers charge EVs too slowly to allow the turnover of vehicles. Vice Chair Forssell hoped staff would embrace a variety of charging options for multiunit dwellings. She expressed concern about funding the installation of DC fast chargers as they may not be broadly applicable to the community. Kelty advised that EVs coming onto the market typically have DC fast-charging capabilities as a standard feature. Vice Chair Forssell cautioned staff not to overestimate the need for DC fast chargers. The rebate for low-income purchasers could be utilized for used EVs, in which case DC fast chargers may not be applicable to them. Kelty related that the CALeVIP program will support shared Level 2 chargers and Level 3 chargers accessible to the public 24 hours per day. In answer to Commissioner Jackson's query regarding the likelihood of rebates incentivizing multiunit dwelling owners to install charging stations, Kelty related that property owners have reported increasing demand for charging stations and expressed interest in the rebate program. In response to Commissioner Jackson's inquiry about developing a rebate program for single-family rental homes, Jonathan Abendschein, Assistant Director of Resource Management, indicated the percentage of single-family rental homes is significantly lower than the overall percentage, perhaps 20-25 percent. Kelty added that staff is not planning a program for renters of single-family homes at the current time. Commissioner Johnston was delighted for the City of Palo Alto to be a leader and a model for EV adoption. The ability of residents in multiunit dwellings to charge EVs is critical. In many multiunit developments, parking spaces are assigned. Installing a charger for each unit can be prohibitively expensive. Shared chargers require shared parking spaces. He questioned whether there was a method to address these issues. Kelty explained that many owners of multiunit dwellings are willing to consider reconfiguring parking or removing some designated parking in exchange for rebates and once they realize the cost of installing one charger is not that much less than installing 20 chargers. Most owners are installing chargers in guest parking spaces. Commissioner Johnston wanted staff to place more emphasis on installing charger infrastructure at workplaces. Kelty stated commercial and industrial customers will be eligible for the CALeVIP grant. DC fast chargers placed in certain locations could be beneficial for commuters, residents of multiunit dwellings, and Uber and Lyft drivers. Abendschein added that facility owners are more concerned about the priority of improvements than funding. Staff will increase advocacy with key accounts and explore ways to reduce barriers to installing chargers. In addition, staff will review rate structures to encourage workplace charging. In response to Commissioner Smith's questions regarding LCFS funds, Kelty reported the balance of LCFS funds is currently $3.5 million. The $8 million balance is the total of all funding from 2015 to 2021. With funds from the point-of-purchase program, the grand total will be approximately $9 million. One of the challenges of spending LCFS funds is educating property owners about installation of EV chargers. Hopefully, the technical assistance program will increase the number of EV charger projects. Another challenge is the number of parking spaces required for each development. Staff is exploring rebates for panel upgrades at single-family homes and for all-electric homes that include EV chargers. Dean Batchelor, Utilities Director, advised that large vehicles in the City's fleet cannot be electric. Over time, cars and small pickup trucks in the City fleet will be replaced with EVs. As the number of City EVs increase, the number of chargers will have to increase. Alan suggested a program offer rebates for panel replacement that involves an intelligent feeder to the house. Kelty reported she has not seen an intelligent panel on the market and asked anyone with information about available smart panels to share it with her. In reply to Chair Danaher's request for information about the Genie program for commercial and multifamily buildings, Kelty clarified that the technical assistance program will be available to multiunit dwellings, nonprofits, mixed-use buildings and small to medium businesses. Chair Danaher suggested staff implement Utilities Advisory Commission Minutes Approved on: Page 6 of 9 a technical assistance program for large commercial buildings. Kelty indicated the installation of 10-20 chargers simultaneously could reduce the cost per port. Shiva Swaminathan, Senior Resource Planner, added that companies are blanketing parking lots with chargers and utilizing adaptive charging. Kelty explained the fees associated with network chargers. The high fees can discourage the adoption of EVs. Abendschein advised that the question about network chargers is whether the charger or the EV will respond to demand response signals. Swaminathan indicated network charging companies are no longer providing chargers at no cost to municipalities. Staff is not developing incentives for network charging companies but looking for grant programs that are accessible to private companies. Chair Danaher requested an update in three to four months ACTION: None ITEM 4: DISCUSSION: Discussion of Recycled Water Expansion Opportunities and Potential Regional Treated Wastewater Transfer. Herb Borock remarked that the agenda description should have indicated an action item. The executive summary in the staff report refers to future water shortages, but they were not mentioned when the City gave a portion of its water supply to the City of East Palo Alto. The Measure E site is not an appropriate location for a recharging facility. Selling the Regional Water Quality Control Plant (RWQCP)is not a good idea. Karla Dailey, Senior Resource Planner, recalled presenting the UAC with a Business Plan for the Phase III pipeline project, which is an extension of the existing non-potable water distribution system to Stanford Research Park. In November 2018, staff presented the Phase III project and other potential water reuse projects identified in the Northwest County Recycled Water Strategic Plan (Strategic Plan) to the Council. In April 2019, staff held a public meeting to provide more details and gather public input about the potential options. Palo Alto's potable water is supplied by the San Francisco Public Utilities Commission (SFPUC), approximately 85 percent of which is taken from the Tuolumne River. The City utilizes approximately 10 million gallons of water per day at a cost of approximately $2,000 an acre foot. Local water reuse from the RWQCP could provide about 50 percent of Palo Alto's water demand, but significant investment is needed for water treatment and conveyance. Purple pipe is a non-potable water distribution system, and the water can be used for landscape irrigation, industrial processes, and toilet flushing. Indirect potable reuse (IPR) involves injecting purified water into an aquifer and withdrawing it as groundwater and consuming it as potable water. Direct potable reuse (DPR) involves injecting purified water into a distribution system. The State has not developed regulations for DPR. Approximately 5 percent of wastewater is used to produce non- potable recycled water. Protecting the Bay is one of the Council's top priorities. The Bay benefits from water reuse. The Strategic Plan addresses the exploration of water reuse within the service territory. Water reuse can be categorized as non-potable reuse (NPR), satellite non-potable reuse, IPR, and DPR. Satellite non- potable reuse has been eliminated as a potential City project because it is cost prohibitive. However, private companies may consider satellite non-potable reuse projects. Staff estimates the cost of both SFPUC water and groundwater extraction at $3,000 per acre foot in 2030 Phil Bobel, Public Works Assistant Director, advised that the first part of a potential agreement with the Santa Clara Valley Water District (Valley Water) involves Valley Water funding a small salt removal plant at the RWQCP to enhance the quality of recycled water produced at the RWQCP. The second part of a potential agreement involves the transfer of approximately half of the RWQCP's effluent to Valley Water for reuse in the South County. Valley Water would likely utilize effluent for IPR first and DPR second. Under the potential agreement, the amount of water reuse would increase from 1,000 acre feet to 14,000 acre feet. The parties to the agreement would be the Cities of Palo Alto and Mountain View and Valley Water. The minimum flow delivery would be 9 million gallons of water per day (MGD) or 10,000 acre feet per year. The contract term would be 76 years. The salt removal plant would be owned and operated by Palo Alto and located on the RWQCP site. Valley Water would contribute $16 million of the $20 million projected capital cost. Valley Water would fund and own a purification facility. Utilities Advisory Commission Minutes Approved on: Page 7 of 9 In reply to Chair Danaher's question regarding the rationale for the water supply option, Bobel explained that the option would require Valley Water to make water available to Palo Alto or Mountain View at cost. In answer to Vice Chair Forssell's query regarding the amount of water provided and requested under the agreement, Bobel clarified that the 10,000 acre feet of effluent transferred to Valley Water would be provided by the RWQCP. Palo Alto's portion of the 10,000 acre feet of effluent is almost the same as the 3,500 acre feet Palo Alto could request under the water supply option. Staff will negotiate terms with the smaller RWQCP partners in 2020. The RWQCP would transfer effluent, while Palo Alto would receive potable water under the water supply option. In response to Chair Danaher's request for projections of water demand, Dailey indicated the projections indicate demand will decrease slightly. SFPUC has a contractual obligation to provide 184 MGD to all wholesale customers in perpetuity. If SFPUC cannot obtain sufficient supply from the Tuolumne River, it would have to purchase water and pass the cost to wholesale customers. The future cost of water and pressures on the source are unknown. Valley Water has not made plans for the use of the effluent; therefore, the effluent could possibly be returned to the RWQCP. Base water supply for drought years and normal years are different, and staff needs to analyze options for both. The potential agreement with Valley Water is unique in that Valley Water does not contract with individual agencies for water. The water supply option is a tool for Palo Alto to address the unknown future of water supply. Valley Water participates in many water supply projects, which could provide water to Palo Alto under the water supply option. If Valley Water constructs a purification plant in Palo Alto, it could provide water to Palo Alto under the water supply option. Bobel added that If Valley Water wheeled water supply through another entity, such as SFPUC, the wheeling costs would be part of the cost to Palo Alto. The water supply option allows Valley Water and Palo Alto to keep their options open. Bobel further reported a number of people at the public meeting wanted to ensure strong environmental benefits are associated with the potential agreement. The only real constraint to the potential agreement is the City relinquishing control of half of the RWQCP effluent for 76 years. The water supply option was negotiated in response to that constraint. Garth Hall, Valley Water, remarked that the concept of desalinating recycled water is compelling. Valley Water has operated a plant similar to the one contemplated under the agreement since 2014. Reducing the salinity of recycled water has contributed to the increased usage of recycled water. Effluent from the RWQCP will advance Valley Water toward its goal for water reuse, avoid Valley Water's use of imported water, and decrease the salinity of groundwater. Gary Kremen, Valley Water Board Member, commented that Palo Alto would receive $1 million per year and the opportunity to participate in Valley Water's diverse water supply. If the Bay Delta Plan is approved, the Tuolumne River water supply will be reduced. In reply to Chair Danaher's query regarding the contract terms, Mr. Kremen indicated Palo Alto would pay the same cost as other agencies in North County under the water supply option. Chair Danaher preferred Palo Alto's cost to be the average water cost of Valley Water projects. Mr. Kremen felt the assurance of future water supply is more important than cost. Dailey clarified that Palo Alto could purchase groundwater from Valley Water at the same rates other agencies pay for groundwater. The City would not utilize the water supply option as the first alternative supply. Valley Water manages the groundwater basin quite well. In preparing the Strategic Plan, staff identified sustainable yield numbers for groundwater that met approximately half of Palo Alto's needs without causing adverse effects. Arthur Keller, speaking as an individual, noted the cost for NPR could be $6-$85 million. IPR is not as feasible as NPR for Palo Alto because the closest recharge location is in Cupertino. Palo Alto residents may object to hard water obtained through IPR or DPR. The City does not need 3 MGD of non-potable water. The City should Utilities Advisory Commission Minutes Approved on: Page 8 of 9 clearly indicate its desire for 3 MGD of potable water. The City will need 3 MGD of potable water in the event of a major supply break from the SFPUC. Dave Warner did not understand how water reuse would reduce the amount of water taken from the Tuolumne River. Dailey explained that Palo Alto's and Mountain View's use of recycled water would increase if its salinity is reduced, which would reduce the use of Tuolumne River water. In addition, the amount of imported water would be reduced. Mr. Warner felt that reduction would be a small amount of water. From a reliability perspective, the benefit of transferring effluent to Valley Water is not immediately obvious. Chair Danaher suggested a discussion of the tentative agreement return to the UAC in October or early November and Commissioners identify areas of concern in the time remaining. Abendschein clarified that a Council study session on the agreement is scheduled for September 23. Dailey added that the staff presentation for the study session would be the same as that presented to the UAC. In January, the UAC will review the Strategic Plan and make a recommendation to the Council. The potential agreement is following a different track because staff wants to apply for State funding, and the deadline to apply is December 31. Depending on Council feedback during the study session, staff could present the potential agreement to the Council in November for approval. In answer to Chair Danaher's inquiry about the UAC providing input regarding the potential agreement, Councilmember DuBois expressed interest in having UAC feedback and the UAC providing feedback to individual Councilmembers. Dailey noted the Council packet is released two weeks prior to the date of the Council meeting, which would be around the time of the UAC's November meeting. In reply to Vice Chair Forssell's query regarding the Strategic Plan, Dailey advised that staff will not seek UAC input regarding specific concept options in the next three months. In response to Commissioner Johnston's question about the City's rights to water, Bobel reported the agreement will not affect the City's existing rights to obtain water from SFPUC or to pump groundwater. Commissioner Johnston felt some of the local water reuse projects are quite interesting, and DPR should be explored further. Bobel explained that the 50 percent of retained effluent will accommodate a pilot project for DPR. Large-scale DPR is not infeasible because the City can exercise the water supply option to get the same amount of water back from Valley Water. In answer to Chair Danaher's question of the amount of potable water obtained from the effluent transferred to Valley Water, Bobel indicated approximately 3 MGD. The City would transfer 3 MGD of effluent to Valley Water and in 16 years could request Valley Water provide 3 MGD of potable water. In reply to Commissioner Smith's queries of whether Strategic Plan concepts concern primarily piping and of whether the capital cost could exceed $20 million, Dailey clarified that it is development of the concept options, which include treatment and conveyance. Bobel indicated the $20 million was a best estimate and included a small amount for escalation of construction costs. Valley Water would pay Palo Alto $1 million per year for each year it receives the effluent. Under the agreement, Valley Water would not take the effluent for the first 13 years of the agreement. Dailey added that Valley Water would pay $200,000 a year until it takes the effluent. Valley Water will pay $16 million towards the local plant, which will reduce the salinity level of recycled water that is used in Palo Alto and Mountain View. Mountain View is currently using potable water for irrigation. With a decrease in the salinity of recycled water, Mountain View will increase its use of recycled water for irrigation. Under the water supply option, Valley Water would obtain the lowest cost water to provide to Palo Alto, and Palo Alto would pay the cost of the water. In answer to Chair Danaher's question of whether Valley Water's payment of $1 million is indexed, Bobel replied yes. Utilities Advisory Commission Minutes Approved on: Page 9 of 9 Vice Chair Forssell expressed support for the agreement. She inquired about energy use during water purification and the effect of sea level rise on groundwater. Mr. Hall reported Valley Water did not believe sea level rise would encroach into the groundwater basin in the 21st century. Dailey added that sea level rise could result in artesian wells. Bobel advised that some Bay experts are concerned that sea level rise could cause saltwater intrusion into the groundwater basin. The Strategic Plan states there will be an impact but did not quantify the impact well. The purification process is energy intensive, but energy usage could be adjusted to time of day. Batchelor advised that a continued discussion can be scheduled for the UAC's October meeting. Chair Danaher suggested Councilmember DuBois advise the UAC whether the Council wants input following the study session. Chair Danaher suspected the cost of water under the water supply option would be based on a particular project rather than a blended rate. Nina Hawk, Valley Water Chief Operating Officer, explained that Valley Water distributes its costs evenly. Valley Water does not provide an assured water supply to retailers. The water supply option is unique as is the partnership and the receipt of effluent. The water supply option provides a unique guaranty for Palo Alto. ACTION: None ITEM 5: ACTION: Selection of Potential Topic(s) for Discussion at Future UAC Meeting. Vice Chair Forssell requested staff schedule tours of facilities for Commissioners. ACTION: None NEXT SCHEDULED MEETING: October 2, 2019 Meeting adjourned at 10:17 p.m. Respectfully Submitted Tabatha Boatwright City of Palo Alto Utilities City of Palo Alto (ID # 10707) Utilities Advisory Commission Staff Report Report Type: Agenda Items Meeting Date: 10/2/2019 City of Palo Alto Page 1 Summary Title: Sea Level Rise Adaptation Strategy Title: Overview of City of Palo Alto Sea Level Rise Adaptation Policy From: City Manager Lead Department: Utilities The Utilities Advisory Commission requested a staff presentation on the City’s efforts to plan for sea level rise adaptation needs in coming decades, including impacts on utility infrastructure. The Palo Alto City Council approved staff’s proposed Sea Level Rise Adaptation Policy in March 2019. The October 2 Utilities Advisory Commission meeting will include a presentation on current sea level rise planning efforts and an overview of the Sea Level Adaptation Policy. The Sea Level Rise Adaptation Policy and staff presentation are attached. Attachments: •Attachment A: Sea Level Rise Adaptation Policy 03-18-19 •Attachment B: Presentation on Sea Level Rise Adaptation Policy Item 1 POLICY AND PROCEDURES 5-06/PWD Approved: March 18, 2019 Page 1 of 15 SEA LEVEL RISE ADAPTATION OVERVIEW The State of California anticipates that relative sea level rise (SLR) projections stemming from greenhouse gas emissions and related climate change pose significant economic, environmental and social risks to communities along the San Francisco Bay Shoreline, including the City of Palo Alto. Research shows that these projections may worsen if greenhouse gas emission trajectories continue unabated.1 Sea level rise in San Francisco Bay is anticipated to range between three feet to more than ten feet by 2100 with rising tides likely thereafter.2 In Palo Alto, many City services and infrastructure that are essential to the City’s public health, safety and economy are located within areas that are predicted to be inundated by Bay water if adaptation measures are not implemented.3 PURPOSE OF POLICY The purpose of this policy is to plan for rising tides that could impact Palo Alto’s neighborhoods, economy and the Baylands habitat, and to ensure consistency and integration with the range of City plans that call for SLR planning such as the City’s 2030 Comprehensive Plan (adopted November 2017), the Sustainability and Climate Action Plan (S/CAP) (November 2016) and related Sustainability Implementation Plans (SIPs), the Local Hazard Mitigation and Adaptation Plan (March 2017), the Baylands Master Plan (2008), Baylands Comprehensive Conservation Plan (in development), and the Urban Forest Master Plan (February 2019), and other key planning documents that are produced. This policy will serve as a blueprint for the development of a Sea Level Rise Adaptation Plan, and is not intended to establish requirements on new development for implementation prior to Plan adoption; however, projects may be encouraged in advance to consider sea level rise as part of the development process. Definitions and terminology relevant to this policy are listed in Appendix 1– Policy Definitions and Related Terminology. 1 Ocean Protection Council. (2018). State of California Sea-Level Rise Guidance 2018 Update. Retrieved from http://www.opc.ca.gov/webmaster/ftp/pdf/agenda_items/20180314/Item3_Exhibit-A_OPC_SLR_Guidance- rd3.pdf. Page 12. 2 Reference 1, page 18. 3 San Francisco Bay Conservation and Development Commission Adapting to Rising Tides Program (2018). Adapting to Rising Tides Bay Shoreline Flood Explorer online tool. Retrieved from https://explorer.adaptingtorisingtides.org/home. DocuSign Envelope ID: 172160B7-6EF2-4F7A-AD6B-927ECBF676BC Attachment A POLICY AND PROCEDURES 5-06/PWD Approved: March 18, 2019 Page 2 of 15 POLICY SUMMARY The City recognizes that the best way to avoid long-term impacts from the worst SLR predictions and to minimize adaption response costs is to reduce greenhouse gas (GHG) contributions locally and to support regional, state and national initiatives that reduce GHGs. Palo Alto will lead by example and coordinate on SLR studies and planning efforts with East Palo Alto, Mountain View, and other cities and public agencies, including counties, as well as utilities, and public-private partnerships, as needed. Palo Alto will establish interdepartmental SLR Planning responsibilities into City procedures and planning (see, e.g., Appendix 2– Departmental Responsibilities for Sea Level Rise Planning). Palo Alto will use the Ocean Protection Council (OPC) 2018 Probabilistic SLR Projections published by the State of California (Appendix 3) for proposed development projects, renovations and possible property acquisitions and other City planning unless a more suitable reference is identified and agreed upon by local agencies tasked with SLR preparedness. City of Palo Alto, business and residential investments in new property, development, and infrastructure should be designed based on OPC SLR projections for the useful life of the asset to avoid flooding or erosion. To that end, the forthcoming Sea Level Rise Adaptation Plan should consider the following best practices: 1. Upgrades to existing property or infrastructure that are considered less-critical (not essential to immediate public health and safety, e.g. trails or playing fields) should consider the impacts of SLR beyond 2050 using the Low Risk Aversion or Medium-high Risk Aversion Projection listed in Table 1; 2. For critical development and infrastructure (e.g., wastewater treatment facility or utilities that are essential to public health and safety), a risk assessment should be completed based on the SLR projections to 2100 and to include the lifetime of the building using the Medium-high or Extreme Risk Aversion Projections; 3. All designs and engineering strategies, where possible and financially feasible, should be adaptable to changing climate predictions. Each new development should be required to develop and maintain an individual “adaptation pathway plan” to prepare for changes in rising sea level, and related groundwater intrusion. In all sea level rise assessments, and where data are available, the City will consider Base Flood Elevations, storm surge, groundwater table changes due to rising sea levels, and wave runup, where appropriate. DocuSign Envelope ID: 172160B7-6EF2-4F7A-AD6B-927ECBF676BC POLICY AND PROCEDURES 5-06/PWD Approved: March 18, 2019 Page 3 of 15 BACKGROUND Greenhouse gases trap the earth’s heat which warms land and oceans. This causes both thermal expansion of the oceans and Antarctic and Greenland ice melt which together are the primary sources of SLR globally and in San Francisco Bay. SLR threatens the operational integrity of critical services and facilities, e.g., Palo Alto’s electrical, gas, water and wastewater utilities, the Municipal Service Center, the Palo Alto Airport, Highway 101 and surrounding roads. Business districts and residential neighborhoods within the projected SLR area are vulnerable to a rising Bay and potential future FEMA insurance zone requirements. SLR is also likely to affect the elevation and salinity of groundwater close to the Bay. Rising groundwater could have impacts on belowground infrastructure which may be subject to corrosion and buoyancy effects and could contribute to liquefaction. In the case of very low- lying areas, groundwater may result in surface flooding and long-term ponding. Under current SLR predictions, the Palo Alto Baylands may be submerged by mid-century which would eliminate their ability to buffer upstream or Bayside flooding sources, attenuate storm surge or sequester carbon. The encroachment of Bay water may alter or eliminate habitat for endangered species that reside in Palo Alto Baylands and the millions of birds that use the Palo Alto segment of the Pacific Flyway for seasonal migration. The recreational and inspirational services of the Palo Alto shoreline could change if Baylands trails, playing fields and golf course are surrendered to encroachment of San Francisco Bay. The decisions that Palo Alto makes in future years to adapt to rising tides extend beyond the City’s borders. Implications with built features such as levees will impact (help or imperil) adjacent communities and thus require close coordination with surrounding local and regional agencies. PROCEDURES FOR POLICY IMPLEMENTATION 1. The City will: a) conduct a SLR vulnerability assessment, which will: i. identify critical and less-critical City infrastructure and ecosystem assets to manage risks given predicted SLR scenarios through 2100 and beyond; DocuSign Envelope ID: 172160B7-6EF2-4F7A-AD6B-927ECBF676BC POLICY AND PROCEDURES 5-06/PWD Approved: March 18, 2019 Page 4 of 15 ii. Identify hazards and determine tolerable risks of the City and community members (risk = hazard x exposure x vulnerability; risk ($/year) = frequency (events/year) x consequences ($/event); iii. include an economic assessment of SLR vulnerability for public and private property and cost estimates for inaction; iv. engage community members in the process. b) develop a multi-year SLR Implementation Plan to coordinate internal and regional SLR planning, project funding and public outreach. The Plan will include a SLR adaptation plan and timeline which will: i. align with the intent and language of the City’s various plans, policies and documents that intersect with SLR Policy and Plan (e.g., the Comprehensive Plan, Sustainability and Climate Action Plan, Local Hazard Mitigation Plan, Baylands Comprehensive Conservation Plan, Baylands Master Plan, Regional Water Quality Control Plant Long Range Facility Plan, Urban Water Management Plan, Recycled Water Strategic Plan, Parks Master Plan, etc.); ii. include a table of prioritized adaptation pathways to manage risks to natural and built assets based on the SLR Vulnerability Assessment. Adaptation pathways provide a menu of recommendations and logically staged phases for adaptation over time based on triggers related to SLR levels. Adaptation pathways factor in cost/benefits, the lengthy time to plan, fund and build response strategies and potential additional benefits of carbon sequestration, GHG reduction, wildlife protection and social equity; iii. include a development plan for public and private property anticipated to be impacted by SLR which may include: a. changing the city zoning map and amending requirements, restrictions, or municipal codes to be stricter than state or federal requirements as necessary and when feasible to reduce risks; b. adding conditions of approval for project permits in areas where there is a SLR or groundwater intrusion risk; c. establishing geographic areas and/or triggers for requiring consideration of relocation; d. developing restrictions or additional criteria; and e. funding identification f. educate and engage community members in the process of SLR planning, including creating a SLR Task Force and meeting with DocuSign Envelope ID: 172160B7-6EF2-4F7A-AD6B-927ECBF676BC POLICY AND PROCEDURES 5-06/PWD Approved: March 18, 2019 Page 5 of 15 stakeholders (e.g., realtors, property owners, etc.) to educate them about SLR and the options, tradeoffs, and costs, for resilience; iv. address budget and funding considerations for additional or existing staff to perform SLR planning, adaptation and Capital Improvement Projects (CIPs); v. provide guidance on managing and enhancing Baylands, creek and open space ecosystem services to mitigate SLR impacts through carbon sequestration and absorption. Examples of this include the use of horizontal levees, expanding or improving Baylands habitat; this guidance should consider the use of the Baylands Comprehensive Conservation Plan, and the concept of “Operational Landscape Units” developed by San Francisco Estuary Institute which delineate Bay shoreline ecosystem functions and services within the natural and built environment and not by jurisdictional boundaries, and; vi. include the development of educational materials and technical assistance for staff and developers, including: a. a checklist and primer on SLR, risk and sharing risk, and planning guidance; b. technical and regulatory guidance to City engineers and public developers so that projects are designed based on accepted OPC SLR assumptions and which prompt design-standard revisions, and protect, adapt, retreat responses for threatened areas; c. a risk assessment process to be used during CIP site selection, planning and property purchases; d. a SLR and groundwater projection zone map which also shows the intersection of the FEMA flood zone and associated insurance requirements; 2. Recognize policy limits: This policy does not establish specific requirements for all projects because each site condition is unique, but instead provides expectations for developing guidance and tools to answer key building and infrastructure design and SLR response strategies. This policy also recognizes that not all codes and regulations that govern construction are yet synchronized with OPC SLR predictions, however Palo Alto will incorporate SLR guidance and planning into its own construction and planning process proactively for both public and private structures until regional standards are adopted for use. DocuSign Envelope ID: 172160B7-6EF2-4F7A-AD6B-927ECBF676BC POLICY AND PROCEDURES 5-06/PWD Approved: March 18, 2019 Page 6 of 15 Appendix 1: Policy Definitions and Related Terminology Adaptation Pathway: “Pathways” in relation to adaptation is an approach designed to schedule adaptation decision-making. It identifies the decisions that need to be taken now and those that may be taken in future. The approach supports strategic, flexible and structured decision-making. The pathways approach allows decision makers to plan for, prioritize and stagger investment in adaptation options. Trigger points and thresholds help them identify when to revisit decisions or actions. Examples of pathways approaches can be translated into visual aids such as “route maps” that support communication and consultation with stakeholders. The adaptation pathway approach has been successfully applied in adaptation planning for infrastructure and water management projects, and broader cross-sector adaptation planning4. Baylands: Lands which are located between the lines of mean high tide and mean low tide (California Coastal Commission Sea Level Rise Policy Guidance). Base Flood Elevation (1% annual chance flood): A flood that has a 1% probability of occurring in any given year. The 100-year floodplain is the extent of the area of a flood that has a 1% chance of occurring or being exceeded in any given year. This is indicated by the Special Flood Hazard Area (SFHA) on FEMA flood maps. Baylands Comprehensive Conservation Plan: A plan currently being prepared by the City of Palo Alto that provides specific programs and projects to achieve the goals and policies of the Baylands Master Plan. Baylands Master Plan: A plan prepared by the City of Palo Alto to provide a framework and guide for actions in the Baylands that seek to preserve the area’s unique natural, recreational and flood-prevention resources. Capital Improvement Program (CIP): The Capital Improvement Program (CIP) includes projects that help maintain or improve City assets, often called infrastructure. To be included in the City of Palo Alto Capital Budget, a project must meet the following criteria: • Must have a minimum cost of $50,000 for each stand-alone unit or combined project. • Must have a useful life of at least five to seven years (the purchase or project will still be functioning and not be obsolete at least five to seven years after implementation). • Must extend the life of an existing asset or provide a new functional use for an existing asset for at least five years. Examples include extensive roof rehabilitations. These improvements are distinguished from ongoing maintenance work that may extend the life of the asset but is done on a routine basis. 4 CoastAdapt. (2019). Retrieved from https://coastadapt.com.au/pathways-approach DocuSign Envelope ID: 172160B7-6EF2-4F7A-AD6B-927ECBF676BC POLICY AND PROCEDURES 5-06/PWD Approved: March 18, 2019 Page 7 of 15 Climate change: Any long-term change in climate conditions in a place or region, whether due to natural causes or as a result of human activity. Comprehensive Plan: The City of Palo Alto Comprehensive Plan (or Comp Plan) is the primary tool for guiding land use and development in Palo Alto. The Plan fulfills the State requirement that the City adopt a General Plan. The Plan provides a foundation for the City’s development regulations, capital improvements program, and day-to-day decisions. Critical infrastructure: City built assets with a long-projected life span (greater than 50 years) which if compromised by rising tides could potentially have catastrophic results on public health, safety or well-being, e.g., wastewater treatment facilities, stormwater infrastructure, levees or impoundments, bridges along major evacuation routes, airports, seaports, railroads, and major highways, EOC/Fire/Police/Healthcare, schools, homeless shelters, landfills and contaminated sites. Less-critical Infrastructure: City assets that have an expected lifetime of 10-20 years or is replaceable and adaptable, or has limited interdependencies and limited consequences should the system fail or be inundated by water. Examples include isolated parks, unpaved trails. Design life: The life expectancy of a project as determined during design. As opposed to useful life (see below). Erosion: The wearing away of land by natural forces; on a beach, the carrying away of beach material by wave action, currents, or the wind , the loss of marsh due to the erosion of the marsh edge by waves. Development and other non-natural forces (e.g., water leaking from pipes or scour caused by wave action against a seawall) may create or worse erosion problems (California Coastal Commission Sea Level Rise Policy Guidance). Facilities: All buildings, communications facilities, energy systems, industrial facilities, all transportation networks, water and wastewater systems, and parks. Flood (or Flooding): Refers to normally dry land becoming temporarily covered in water, either periodically (e.g., tidal flooding, king tides) or episodically (e.g., storm surge or tsunami flooding). Greenhouse gases (GHGs): Any gas that absorbs infrared radiation in the atmosphere. Greenhouse gases include, carbon dioxide, methane, nitrous oxide, ozone, chlorofluorocarbons, hydrochlorofluorocarbons, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride. DocuSign Envelope ID: 172160B7-6EF2-4F7A-AD6B-927ECBF676BC POLICY AND PROCEDURES 5-06/PWD Approved: March 18, 2019 Page 8 of 15 Green Stormwater Infrastructure (GSI): Infrastructure that uses vegetation, soils, and natural processes to manage stormwater runoff and reduce peak flows in flood control channels or creeks. Examples of GSI include landscape-based stormwater “biotreatment” using soil and plants ranging in size from grasses to trees; pervious paving systems (e.g., interlocking concrete pavers, porous asphalt, and pervious concrete); rainwater harvesting systems (e.g., cisterns and rain barrels); and other methods to capture and use stormwater as a resource. Groundwater: The water found below the surface of the land and contained in the pore spaces of saturated geologic media (sand, gravel). Groundwater is either rain water that has seeped through the soil surface and by means of gravity of soil conditions drained from high to lower elevation areas. Groundwater can also come from the bay transferred via bay mud under the existing levees. Groundwater can be source of water found in wells and springs. Hazard: A situation involving danger such as coastal flooding, earthquake rainfall and local flooding. Local Hazard Mitigation Plan: The Federal Disaster Mitigation Act of 2000 (DMA) requires all cities, counties, and special districts to adopt a Local Hazard Mitigation Plan (LHMP) to receive disaster mitigation funding from the Federal Emergency Management Agency (FEMA). Hazard mitigation planning is the process used by state, local and tribal leaders to understand risks from natural hazards and develop long-term strategies to reduce the impacts of disasters on people, property, and the environment. The Palo Alto Local Hazard Mitigation Plan is updated every three years. Mean Sea Level: The average relative sea level over a period, such as a month or a year, long enough to average out transients such as waves and tides. Ocean Protection Council (OPC): The Council was created pursuant to the California Ocean Protection Act (COPA), which was signed into law in 2004 by Governor Arnold Schwarzenegger. The mission of the OPC is to “…ensure that California maintains healthy, resilient, and productive ocean and coastal ecosystems for the benefit of current and future generations. The OPC is committed to basing its decisions and actions on the best available science, and to promoting the use of science among all entities involved in the management of ocean resources.” The OPC published the State of California Sea Level Rise Guidance Document and subsequent updates which provides an estimated range of predicted SLR and subsequent updates. Operational Landscape Units: A delineated area that effectively provides specific ecosystem functions and services within the natural and built environment. Pacific Flyway: A major north-south flyway for migratory birds in America, extending from Alaska to Patagonia. Every year, migratory birds travel some or all of this distance both in DocuSign Envelope ID: 172160B7-6EF2-4F7A-AD6B-927ECBF676BC POLICY AND PROCEDURES 5-06/PWD Approved: March 18, 2019 Page 9 of 15 spring and in fall, following food sources, heading to breeding grounds, or travelling to overwintering sites. Protect, adapt, retreat strategies: Responding to SLR generally involves three general concepts: • Protect: Implementing strategies that reduce the risk of SLR impacts to land e.g., levees, horizontal levies, floodwalls, flood gates, and wetlands; • Adapt: Adjusting to natural or human systems in response to actual or expected climatic stimuli or their effects, which minimizes harm or takes advantage of beneficial opportunities. This includes building any new or substantially-improved structures elevated above future flood levels or as structures that can be submerged without sustaining appreciable damage. • Retreat: Surrendering an area partially, seasonally or completely to rising sea level; Regional Water Quality Control Plant (RWQCP): Owned and operated by the Palo Alto, the Plant treats wastewater for the communities of Los Altos, Los Altos Hills, Mountain View, Palo Alto, Stanford University and the East Palo Alto Sanitary District. The mission of the RWQCP is to protect San Francisco Bay by cleaning and treating wastewater before it is discharged. Relative Sea Level: Sea level measured by a tide gauge with respect to the land upon which it is situated. Risk: Often expressed as “hazard x exposure x vulnerability;” in terms of costs per year it can be expressed as “frequency (events/year) x consequences ($/event). SAFER Bay Project Feasibility Report: SAFER (Strategy to Advance Flood protection, Ecosystem and Recreation along San Francisco Bay) has prepared a feasibility report that is in the review and comment phase. Once City staff comments are made and report revised as needed, the report will be available for public review and comment. Sea level: The height of the ocean relative to land; tides, wind, atmospheric pressure changes, heating, cooling, and other factors cause sea level changes. Sea level rise (SLR): Sea level can change, both globally and locally, due to (a) changes in the shape of the ocean basins, (b) changes in the total mass of water and (c) changes in water density. Factors leading to SLR under climate change include both increases in the total mass of water from melting land-based snow and ice, and changes in water density from an increase in ocean water temperatures and salinity changes. Relative SLR occurs where there DocuSign Envelope ID: 172160B7-6EF2-4F7A-AD6B-927ECBF676BC POLICY AND PROCEDURES 5-06/PWD Approved: March 18, 2019 Page 10 of 15 is a local increase in the level of the ocean relative to the land, which might be due to ocean rise and/or land level subsidence. Storm Surge: A rise above normal water level due to low atmospheric pressure associated with storms and the action of wind stress on the water surface. Sustainability and Climate Action Plan (S/CAP): Palo Alto’s plan to reduce the city and community’s greenhouse gas emissions to meet climate protection goals and also consider broader issues of sustainability, such as sea level rise, land use and biological resources. Sustainability Implementation Plans (SIPS): Specific actions needed to achieve S/CAP goals. Useful life: The period over which a project is expected to be available for use by an entity. This period of time typically exceeds the design life (see above). Threat and Hazard Identification and Risk Assessment (THIRA): A THIRA helps communities better understand the hazards from natural, technological, and human-caused threats that pose the greatest risk. The Palo Alto THIRA report is updated every two years. Vulnerability: The extent to which a species, habitat, ecosystem, or human system is susceptible to harm from climate change impacts. More specifically, the degree to which a system is exposed to, susceptible to, and unable to cope with, the adverse effects of climate change, including climate variability and extremes. Vulnerability is a function of the character, magnitude, and rate of climate variation to which a system is exposed, as well as of non-climatic characteristics of the system, including its sensitivity, and its coping and adaptive capacity. Vulnerability Assessment: A practice that identifies who and what is exposed and sensitive to change and how able a given system is to cope with extremes and change. It considers the factors that expose and make people or the environment susceptible to harm and access to natural and financial resources available to cope and adapt, including the ability to self-protect, external coping mechanisms, support networks, and so on. DocuSign Envelope ID: 172160B7-6EF2-4F7A-AD6B-927ECBF676BC POLICY AND PROCEDURES 5-06/PWD Approved: March 18, 2019 Page 11 of 15 Appendix 2: Departmental Responsibilities for Sea Level Rise Planning The following table is a menu of potential actions to be confirmed in the plan for each department. Lead Department Responsibility Administrative Services Department 1. Revise Purchasing Department construction solicitation templates and contract documents to include SLR and sustainability considerations. 2. Prioritize SLR planning and budget equal to other performance indicators for projects within projected SLR areas. City Manager’s Office 1. Implement the Sustainability and Climate Action Plan to reduce greenhouse gas emission contributions. 2. Include SLR update with annual Earth Day and Sustainability Implementation Plan reporting. 3. Consider development of key performance indicators to track if the City is meeting its SLR planning goals. 4. Provide outreach through City Manager Office communication channels about how the City is preparing for sea level rise in coordination with Public Works and Utilities Department outreach. 5. Prioritize SLR projects equal to other Council priorities. Community Services/Open Space Implement the recommendations of the 2019 Palo Alto Baylands Vulnerability Assessment for flood control, access, non-recreational features and facilities, habitats and wildlife where feasible, e.g.: 1. Seek funding to expand and enhance Baylands habitat to leverage wave attenuation, water absorption and other ecosystem services that mitigate SLR. 2. Develop climate-smart planting palettes that are projected to survive under changing climate conditions. Office of Emergency Services Continue to consider sea level rise in community risk assessments, such as Threat and Hazard Identification Risk Assessment and Local Hazard Mitigation Plan, with appropriate risk considerations and weighting. DocuSign Envelope ID: 172160B7-6EF2-4F7A-AD6B-927ECBF676BC POLICY AND PROCEDURES 5-06/PWD Approved: March 18, 2019 Page 12 of 15 Planning & Community Environment 1. Update zoning code and related requirements, such as design standards for public and private development based on OPC predictions. Public Works–Airport 1. Plan for SLR to reduce risk of impacts to Airport operations. 2. Seek funding opportunities with the Federal Aviation Administration and Caltrans Division of Aeronautics. Public Works– Interdepartmental 1. Coordinate groundwater management in recognition that SLR will push groundwater levels inland and closer to the surface. 2. Explore the interaction between groundwater, Sea Level Rise and Stormwater. Public Works– Engineering 1. Plan, design, identify funding, build and maintain resiliency features in City planning and CIP projects per the City’s Comprehensive Plan, e.g.: a) Manage the preparation of SAFER feasibility report and potential environmental review, funding, public outreach and construction of SAFER levees and related projects to mitigate SLR. b) Seek grants and other funding for design alternatives and structures that mitigate SLR. c) Build design alternatives and structures that mitigate SLR. 2. Manage the implementation of large-scale stormwater infrastructure rehabilitation projects to minimize flooding from upstream sources, e.g.: a) Construct the high priority projects identified through Storm Drain Master Plan and listed with the Stormwater Management Fee and consider integration of GSI Plan elements. b) Address FEMA regulations (flooding risks) and sea level rise associated with at least 100-year storm events for at least the design life of the structure. c) Manage stormwater rebate program and coordinate with development services, inspect project sites once completed and issue rebates to property owners for installed rainwater capture devices. DocuSign Envelope ID: 172160B7-6EF2-4F7A-AD6B-927ECBF676BC POLICY AND PROCEDURES 5-06/PWD Approved: March 18, 2019 Page 13 of 15 d) Work with Development Services to help developers of private projects comply with SLR policy and plans and FEMA regulations. e) Implement County Hazard Mitigation Plan (FEMA). f) Implement Green Stormwater Infrastructure Plan requirements. g) Design new infrastructure to be flexible so that it may be incrementally enhanced as sea level rise increases Public Works– Environmental Services 1. Coordinate internal discussions on SLR planning at a frequency that facilitates proactive planning, e.g., quarterly or as needed. 2. Manage SLR risks to allow for ongoing operations of the RWQCP and the sanitary landfill; 3. Seek opportunities and funding to enhance the Baylands ecosystem and build and nature-based features such as horizontal levees. 4. Maintain AB2516 Ocean Protection Council semi- annual report. 5. Conduct Public Outreach on SLR education and planning in coordination with the City Manager’s Office and Utilities. 6. Prepare Policy updates. 7. Lead Green Stormwater Infrastructure planning and implementation. Utilities 1. Execute energy portfolio-related actions in the SIPs Plan for Utilities-related asset protection from flooding, SLR and erosion. 2. Increase climate and SLR messages in ongoing water conservation public awareness campaigns in coordination with the City Manager’s Office and Public Works–Watershed Protection. DocuSign Envelope ID: 172160B7-6EF2-4F7A-AD6B-927ECBF676BC POLICY AND PROCEDURES 5-06/PWD Approved: March 18, 2019 Page 14 of 15 Appendix 3: Ocean Protection Council 2018 Probabilistic Sea Level Rise Projections Rising Seas Report, State of California Sea Level Rise Guidance* Low Risk Aversion Likely Range (ft.) 66% Probability Medium-high Risk Aversion (ft.) 0.5% probability 1-in-200 chance Extreme Risk Aversion (ft.) (No probability yet available)** Use for less-critical infrastructure and services e.g., trails, playing fields, golf course that could potentially be surrendered to SLR. Use for critical infrastructure and services e.g., Regional Water Quality Control Plant, Municipal Service Center, Utilities infrastructure 2030 0.5 0.8 1.0 2040 0.8 1.3 1.8 2050 1.1 1.9 2.7 2060 1.5 2.6 3.9 2070 1.9 3.5 5.2 2080 2.4 4.5 6.6 2090 2.9 5.6 8.3 2100 3.4 6.9 10.2 SLR rates in this table show the upper-range predictions for how SLR may increase in future years and the SLR rate assumptions that should be used for different facilities and development. Probabilistic projections in the first two columns are with respect to a baseline of the year 2000, or more specifically the average relative sea level over 1991 - 2009. These numbers do not include impacts of El Niño, storms or other acute additions to sea-level rise.5 The time period referenced should be based on the useful life of the structure. The low and medium-risk projections listed in this table may underestimate the likelihood of extreme sea- level rise, particularly under high greenhouse gas emissions scenarios which as the writing of this policy are projected to continue to increase. Not all infrastructure and development need to be designed to withstand the most extreme SLR predictions. This table suggests the types of facilities that could be designed to withstand the low, medium or extreme risk scenarios. Buildings for which there is an extreme risk aversion (e.g. wastewater treatment facilities) require more extensive and thus more costly designs and retrofits. *The relative SLR heights above as it relates to Palo Alto’s shoreline can be viewed at Adapting to Rising Tides Bay Shoreline Flood Explorer online tool at https://explorer.adaptingtorisingtides.org/home. 5 Ocean Protection Council. (2018). State of California Sea-Level Rise Guidance 2018 Update. Retrieved from http://www.opc.ca.gov/webmaster/ftp/pdf/agenda_items/20180314/Item3_Exhibit-A_OPC_SLR_Guidance- rd3.pdf. Page 18. DocuSign Envelope ID: 172160B7-6EF2-4F7A-AD6B-927ECBF676BC POLICY AND PROCEDURES 5-06/PWD Approved: March 18, 2019 Page 15 of 15 ** OPC guidance also includes an Extreme Risk Aversion scenario (aka H++ Scenario (Sweet et al 2017 Single scenario)). The probability of this scenario is currently unknown, but its consideration is important, particularly for high stakes, long-term decisions for critical infrastructure and given the uncertainties of projected GHG emissions discussed above. Recommended: __________________________________ ________________ Public Works Director Date Approved: ___________________________________ _________________ City Manager Date ___________________________________ _________________ City Attorney or Designee Date DocuSign Envelope ID: 172160B7-6EF2-4F7A-AD6B-927ECBF676BC 4/11/2019 5/23/2019 5/23/2019 City of Palo Alto Sea Level Rise Adaptation Planning Palo Alto Utilities Advisory Commission October 2, 2019 9’7” King Tide on Palo Alto Baylands Trail, January 20, 2019. This approximates anticipated daily high tide levels in 2080. Attachment B Source: ESA Drivers of Sea Level Rise • • • • Vertical Land Motion I • I .... • I I I Vertical Land Motion I I • ... -20 -10 0 10 20 30 40 50 60 1890 1910 1930 1950 1970 1990 2010 2030 2050 2070 2090 Se a L e v e l R i s e R e l a t i v e t o 2 0 0 0 (I n c h e s ) YEAR Source: ESA Sea Level: Today and Tomorrow opc.ca.gov Information on Sea-Level Rise •Sea level in the Bay Area has risen over 0.6 feet in the last 100 years. •Projection of sea level rise up to 1.9 feet by 2050, and between 5.7 and 6.9 feet by 2100. •Extremely high sea level rise by 2100 (as high as 10.2 feet at San Francisco) is plausible but with very low probability. •At least 6 feet of sea level rise is inevitable over the next several centuries. California's Fourth Climate Change Assessment What is Protecting Us? Photo: ESA Photo: Mark Taylor Same Levee –New Year’s Eve 2005 1 Mth 2 Mth 1 Yr 10 Yr 50 Yr -20 0 20 40 60 80 100 120 140 1890 1910 1930 1950 1970 1990 2010 2030 2050 2070 2090 Recurence Intervals of Extreme Water Levels 1950 1950 2020 2045 20772060 Graphic developed from an idea of David Kriebel USNA Photo: Mike Lowery Creeks Backup due to High Bay Levels Marsh Accretion Groundwater Land Subsidence Rainfall Intensity Storminess River Discharge Development Level of Protection Sea Level Rise Drivers for future flood risksDrivers for Future Flood Risks Marsh Edge Erosion Source: Oro Loma Sanitary District Peter Baye Horizontal Levee SAFER Levee Project Oyster Reefs South Bay Salt Ponds Project and USACE Shoreline Study 0ft 1ft 2ft 3ft 4ft Existing Marsh Terraced leveesHorizontal Levee Beaches, Reefs, Sediment Placement Lead Time Effective Realign functionsRealign Threshold 5ft Decision Adaptation Pathways Why We Need a Policy and Plan •Climate Protection is one of Council’s top four priorities. Previous Council directed staff to provide a sea level rise adaption policy and plan in our Sustainability and Climate Action Plan •A policy bridges the City’s high-level SLR planning goals with an eventual nuts-and-bolts SLR Sustainability Implementation Plan •Protect our neighborhoods, economy and Baylands habitat •Plan and adapt to varying sea level rise predictions •Provide clear SLR planning goals and technical guidance across City departments •Align with and not hinder efforts with neighboring cities and regional planning •Communicate with the public Adaptation Projects and Plans Levees, repairs/adaptations and plans •Projects •San Francisquito Creek •SAFER levee alignment •Horizontal Levee Pilot Project •Palo Alto Flood Basin tide gate repairs •Regional Water Quality Control Plant Secondary Outfall Project •Plans •Baylands Comprehensive Conservation Plan (sea level rise chapter) •Green Stormwater Infrastructure Plan •Sea Level Rise Vulnerability Assessment and Plan IIOIUi'i>llT.\l.lfY:f" C,mwl S11.,m'l'S11111t-SJrder San Francisquito Creek Project Protects 1,000 homes from a 100 year flood event and 3’ Sea Level Rise December, 2018. SAFER Bay Project Protect 5,000 properties & major infrastructure, restore marshes, connect communities through trails Two counties and three cities. 11 miles of shoreline with 11 reaches that include 24 options. Each alternative includes all reaches and only one option per reach. 20 Preliminary Plan for Horizontal Levee 21 Key takeaways: 12” SLR may flood unprotected areas of marsh 36” SLR is tipping point where portions of levees and berms may be overtopped, impacting critical infrastructure Byxbee Park won’t be affected under current SLR scenarios because of its higher elevation Palo Alto Flood Basin Tide Gate Repairs Adaptable to SAFER Levee Alignments She$ l':1 Cofl1utian1 -:-l .IIIQl:;rf! CITY OF PALO, ALTO CITY OF PALO LTO • PUl:lLIC WORKS-WATERSHED PRO ECTlON 2.501 EMl3"1RCJIOERO Wf,Y PALO A.ITO CA ~c303 • C!fYOF'PAlOALTO.ORGIG.SI 6SIJ .m 122 Greenhouse Gas Emissions Accelerate Like a 'Speeding Freight Train' in .2 ·018 Daytime traffic amid smog in Beijing on Sunday . China produces 27 percent of global carbon emissions, the most of any c.oun try. Wu Hong IEP A. fa Shurterstock 2050 projection (Likely Range ~ 1.1 ft) Municipal Services Center Regional Water Quality Control Plant Animal Services Shelter Palo Alto (closed) Landfill Byxbee Park Palo Alto AirportPalo Alto Golf Course Elwell Court (COPA offices) Palo Alto Baylands US Post office Utility Corridors 2100 projection (Likely Range ~ 3.4 ft) ~ 3.4 ft SLR + King Tide = 4 ft Total Water Level Municipal Services Center Regional Water Quality Control Plant Animal Services Shelter Palo Alto (closed) Landfill Byxbee Park Palo Alto AirportPalo Alto Golf Course Elwell Court (COPA offices) Palo Alto Baylands US Post office Utility Corridors 2100 projection (Med-High Risk ~ 6.9 ft) ~ 6.9 ft SLR + King Tide = 7 ft Total Water Level Municipal Services Center Regional Water Quality Control Plant Animal Services Shelter Palo Alto (closed) Landfill Byxbee Park Palo Alto AirportPalo Alto Golf Course Elwell Court (COPA offices) Palo Alto Baylands US Post office Utility Corridors How Will Sea Level Rise Impact Ground Water? Current groundwater level modeling. Effects of Sea Level Rise on Shallow Groundwater in the San Francisco Bay Area, Ellen Plane presenter, Bay-Delta Science Conference, September 10, 2018)*More study needed for sea level rise impacts to Palo Alto groundwater. *Ellen Plane and Kristina Hill College of Environmental Design, University of California, Berkeley Kris May, Silvestrum Climate Associates This dataset shows estimated values for minimum depth to groundwater in the coastal Bay Area. The estimation is based on an interpolation that uses ground elevation data and minimum depth to water values measured at monitoring wells in the nine Bay Area counties over the past 20 years. More information at https://dash.berkeley.edu/stash/dataset/doi :10.6078/D1W01Q Municipal Services Center Regional Water Quality Control Plant Animal Services Shelter Palo Alto Landfill (closed) Byxbee Park Palo Alto AirportPalo Alto Golf Course Elwell Court (CPAU offices) Palo Alto Baylands US Post office Utility Corridors 2100 projection (Likely Range ~ 3.4 ft) ~ 3.4 ft SLR + King Tide = 4 ft Total Water Level Natural Gas Station Electric Substation Utility Control Center Electric Substation Key Utility Facilities –not including overhead and underground electric, water, gas, wastewater, and fiber optic transmission and distribution infrastructure How Will Sea Level Rise Impact Utilities? 1.Continue focusing on GHG reductions 2.Requires a Sea Level Rise Vulnerability Assessment 3.Requires a Sea Level Rise Adaption Plan 4.Sets roles for City departments 5.Use Ocean Protection Council Guidance for SLR projections 6.Lead by example and work with neighboring communities SLR Policy HighlightsPolicy Summary Governance •Incorporate sea level rise and groundwater intrusion into design standards •Incorporate SLR into emergency planning •Perform an economic analysis of critical assets to protect, relocate or surrender. Physical •Prioritized CIP projects with SLR triggers for action •Use restoration plantings with a wider climate tolerance zone. •Establish regular monitoring for SLR impacts and groundwater elevation. Informational •SLR projection zone map versus solely a flood zone map. •Public education about sea level rise and response planning (events, website, public meetings, Development Center outreach, interpretive signage around Baylands). SLR Plan Actions Could Include: •Commitments in Sustainability Climate Action Plan, Comprehensive Plan, Local Hazard Mitigation Plan and Threat and Hazard Identification Risk Assessment •Reviewed by: •UC Berkeley Climate Readiness Institute •San Francisco Estuary Institute •Peer Review (San Mateo County, Santa Clara County, Santa Clara Valley Water District, SFPUC) •Neighboring Cities •Interdepartmental staff •Palo Alto Community What Informed Palo Alto’s Draft Policy: Fall 2019 •Consultant RFP process for SLR Vulnerability Assessment and Plan •Establish regular interdepartmental SLR Coordination meetings •Integrate sea level rise, green stormwater infrastructure, Sustainability and Climate Action Plan considerations into Purchasing IFB/Staff Reports/similar processes Winter/Spring 2020 •Vulnerability assessment and menu of possible adaptation strategies (requires consultant RFP) •Determine public engagement plan Summer 2020 •Begin Sea Level Rise Plan Development •Public input Fall 2020 •CEQA review begins (via Sustainability Climate Action Plan CEQA) December 2020 •Council update on SLR vulnerability Assessment and Plan progress 2021 •Complete and implement plan •Goals that can be accomplished within five years will serve as the sea level rise chapter of the S/CAP •Fine tune long-term SLR Plan as needed and with five-year Ocean Protection Council Sea Level Rise Guidance revisions •Regular Council updates Next Steps For more information Cityofpaloalto.org/sealevelrise •Sign up to receive sea level rise planning updates •Staff reports and presentations •Regional resources Julie Weiss, Policy and Public Education Manager City of Palo Alto Public Works, Watershed Protection Julie.weiss@cityofpaloalto.org 650.329.2117 Jeremey Lowe, Senior Environmental Scientist Resilient Landscapes Program, San Francisco Estuary Institute jeremyl@sfei.org City of Palo Alto (ID # 10709) Utilities Advisory Commission Staff Report Report Type: Agenda Items Meeting Date: 10/2/2019 City of Palo Alto Page 1 Summary Title: Proposed 2019 Energy Reach Code Title: Proposed 2019 Energy Reach Code From: City Manager Lead Department: Utilities MEMORANDUM TO: UTILITIES ADVISORY COMMISSION FROM: UTILITIES DEPARTMENT DATE: OCTOBER 2, 2019 SUBJECT: Proposed 2019 Energy Reach Code Every three years, the State of California adopts new building standards that are codified in Title 24 of the California Code of Regulations, referred to as the California Building Standards Code. These standards establish energy and water efficiency requirements, green building requirements, as well as electrical, mechanical, plumbing and fire safety standards for new and existing buildings. The 2019 California Building Energy Standards will become effective on January 1, 2020; the new standards will include the requirement of solar photovoltaic systems for new homes, as well as a 7% efficiency improvement for residential new construction projects compared to the prior building standard. Local governments can adopt local energy reach codes that are more stringent than the state standards, provided that the local reach code requirements are cost effective and do not exceed federal appliance efficiency standards. Palo Alto has adopted local energy reach codes since 2008. For the upcoming code cycle that will take effect in 2020, City staff kicked off the stakeholder engagement process with a Green Building Summit held in February 2018. This was followed by a series of meetings with the Green Building Advisory Group (GBAG) that includes build ing City of Palo Alto Page 2 professionals such as architects and contractors, as well as community members. A strong directive from the GBAG for the upcoming reach code is to encourage all-electric new construction projects as a key strategy to meeting the City’s aggressive green house gas reduction goal. A multi-department team with staff from City Manager Office, Development Services, Planning and Utilities, developed a reach code proposal in July and held three public meetings in early August to solicit feedback from the GBAC as well as the community. Attachments: • Attachment A: Item 2 - ID# 10709 - Presentation 2019 Reach Code 1 Proposed 2019 Palo Alto Energy Reach Code October 2, 2019 2 Significance of Building Electrification What is an Energy Reach Code? History of Palo Alto Reach Code 2019 Reach Code Development Process Options for Reach Code Proposed Utility Incentive Programs and Marketing Initiatives Seek UAC Input on: Policy Options for Energy Reach Code Proposed Utility Incentives Programs and Marketing Initiatives Agenda 3 Palo Alto Sustainability and Climate Action Plan Achieve 80% reduction in Greenhouse Gas below 1990 levels by 2030 Zero Waste 4% Encourage all- electric new buildings 5% Electrify water heating, space heating & cooking in existing businesses 22% Electrify water heating & space heating in existing homes 16% Electrify Palo Alto-based & in-bound vehicles 25% Increase zero- impact housing 1% Create right financial incentives for mobility 12% Expand non- auto mobility options 15%Among the S/CAP emission reduction strategies, building electrification accounts for 43%of the GHG emissions by 2030. 4 Building Electrification as a key S/CAP strategy Sustainability Implementation Plan Focus Areas •Achieve cost effective energy efficiency savings through voluntary programs •Increase efficiency of new and existing building stock beyond state’s standards and support building electrification through Palo Alto’s energy reach code •Encourage voluntary electrification of natural gas appliances 5 What is the Energy Reach Code? 5 •The California Building Energy Standards are updated every three years. Next code will be effective 1/1/2020. •Local codes may voluntarily “reach” beyond baseline requirements •Reach Code Criteria •More stringent than state requirements (use less energy) •Cost effective (economically justified) •Must not preempt federal appliance efficiency standards 6 History of Palo Alto Energy Ordinances 6 •Palo Alto adopted its first Energy Reach Code in 2008 •Increased stringency over state requirements for the last 3 code cycles (2010, 2013, 2016) •Green Building Advisory Group provides directions on the development green building and energy reach code Green Building Professionals Energy Modelers Developers City StaffEngineers Architects Contractors Green Building Advisory Group 7 Geen B.JildingVisia, • A Geen, &stainable&lilt Ehvironrrent in PaloAlto lnnavat · 10J;n ----Ccnstruct · Q n. 'OJ UfBtivea to cieve1 l+r Q3ches Cfne-,t -I , -., I , 8lergy \ Cbnservat ion ~ \ ~t t~~·s neoosw it~hout Minimize GOrrprom1s1ng the neoos of . futuregenerafions 8rlissions-, 1, ' / Palo Alto Geen B.Jilding Qdinanc.e -· .... I ...... ~ / ' ~ / Q.Jality I A. Water / ~ Cbnservation \ Materials Cbnser vat ion -•~& UM llATIGJS •1-bw toenfcrce? •Cbst 1,..Rexibility • R.mct ionalit y ... BJildability ,,. Q:q::.erat ion with ut ilit iescanpanies -O CITYOF VPALOALTO Fall,20 15 8 2016 Energy Reach Code 8 ¹ “PV credit” may be applied to meeting the minimum T24 Energy Code. Therefore, a higher percentage reduction is required for single-family and multi-family with PV panels. 2 Less than 5 kW PV system is not considered New Single-Family Residential New Multi-family Residential New Commercial Mixed-Fuel Project Without PV Solar Panels 10% More efficient than Base Code 10% More efficient than Base Code 10% More efficient than Base Code Mixed-Fuel Project With PV Solar Panels 20% More efficient than Base Code¹ 12% More efficient than Base Code¹Comply with minimum Base Code + Install a 5 kW or larger PV system2 All-Electric Exempted from Reach Code Exempted from Reach Code Exempted from Reach Code 9 Policy Goals of 2019 Energy Reach Code 9 Energy Efficiency Zero Emissions 10 2019 Reach Code Development Process Green Bldg. Summit Feb 2018 May–Dec 2018 Jul–Sep 2019 Nov 2019 Nov-Dec 2019 Jan 2020 GB TAC Mtgs. Public Engagement Mtgs. Bring Reach Code to Council Target Effective Date Submit Reach Code for Approval by CEC Develop the Reach Code Ordinance Mar–Sep 2019 Statewide Cost Effectiveness Study Feb–Jul 2019 10 11 Policy Options for Reach Code 11 Prohibits natural gas infrastructure in new buildings (alternative legal basis) Building systems not currently modeled for all-electric design by CEC are exempted Internal ADUs are exempted Exemption allowed for cases where the use of natural gas to serve public interest is demonstrated Requires new residential buildings (3 stories or less) to be electrically heated or all-electric. Natural gas allowed for stoves, fireplaces, or other appliances. Requires new nonresidential buildings to be all-electric Exception #1: Life science building may use natural gas for space heating if electric heating is not cost effective and feasible Exception #2: Public agency owned and operated emergency operations centers may use natural gas if electric heating is not cost effective and feasible Exception #2: Nonresidential kitchens may appeal to use natural gas stoves No reach code requirements for all-electric new buildings. Mixed-fuel new buildings that use gas need to meet higher efficiency requirements, larger PV system, battery storage and be all-electric ready. 12 Utility Incentive Programs Being Considered 1. Clean Home Rebate Program to incentivize all-electric residential new construction projects to exceed base code efficiency standard 2. Expand rebate offering for electrification in existing homes Heat Pump Water Heater Air Source Heat Pump Induction Cooktop Energy Star Electric Clothes Dryer EV charger installation with electric panel upgrade 12 13 13 Utility Initiatives to support Building Electrification CPAU to offer Home Electrification Readiness Assessment service in Q4, 2019 Community outreach through workshops and social media campaign Online resources available through CPAU Electrification webpage www.cityofpaloalto.org/electrification 14 Budget Impact of Potential New Utility Programs 14 Projections of rebate uptake year 1 year 2 year 3 Rebate All-Electric SF new construction 35 45 50 $2,000 All-Electric MF new construction 8 8 8 $1,000 SF: mixed -fuel to all-electric conversion 15 30 50 $6,000 Total Rebate amount $168,000 $278,000 $408,000 $854,000 Staffing (FTE)0.75 0.75 0.75 Estimated Marketing Budget $100,000 $25,000 $25,000 $150,000 15 Seek UAC Input on: Policy Options for Energy Reach Code Proposed Utility Incentives Programs & Marketing Initiatives Questions & Feedback 16 Stakeholder Feedback 16 Could settle for Menlo Park approach that targets building components that have the largest environmental impact It’s unclear whether electric heat pump system can work with radiant heating Reach code places an unfair burden on new construction without addressing larger operational impacts of older homes Ideal is no new gas hook up and all electric Tiered rate structure disincentivizes electrification. An all- electric rate is a must City should stop new gas connections to avoid stranded assets City of Palo Alto (ID # 10596) Utilities Advisory Commission Staff Report Report Type: Agenda Items Meeting Date: 10/2/2019 City of Palo Alto Page 1 Summary Title: Utility Customer Programs Discussion Title: Utility Customer Programs Discussion From: City Manager Lead Department: Utilities RECOMMENDATION Staff is providing a briefing on Utilities customer program performance and upcoming programs work plan, and is seeking feedback on the mission, priorities, and key performance indicators (KPIs) described in this report, as well as any customer programs where the Utilities Advisory Commission sees a need for additional Utilities Department focus. No recommendation to Council is required at this time. EXECUTIVE SUMMARY In the last several years the Utilities Department’s goals for its customer programs have shifted. The focus on traditional energy efficiency and renewable energy has expanded to include sustainability and carbon reduction programs. With limited resources to devote to a broader range of priorities, staff is reviewing and revising criteria for evaluating customer programs and is soliciting feedback from the Utilities Advisory Commission (UAC) on these priorities and evaluation criteria. This report presents: •An outline of the areas of focus for Utilities customer programs •A set of criteria to use when deciding between programs •A set of key performance indicators to measure program portfolio results These key elements will be incorporated into a Utilities Customer Programs Work Plan which staff will bring to the UAC at a later date and will be updated periodically. BACKGROUND Utilities customer programs are designed and implemented by Utilities Program Services (UPS), as well as staff from Resource Planning, Communications, Customer Service, Administration, Engineering, and Operations. UPS has traditionally been focused on customer engagement as well as administration of state-mandated efficiency programs,1,2 local renewable programs,3,4 research development and 1 Staff report on most recently adopted electric efficiency goals for 2018 through 2027. 2 Staff report on most recently adopted natural gas efficiency goals for 2018 through 2027. 3 State requirement for upkeep of incentive payments for solar photovoltaic programs. 4 AB-1470 Solar energy: Solar Water Heating and Efficiency Act of 2007 and CPAU’s Solar Water Heating incentive program. Item 3 City of Palo Alto Page 2 NNeeww PPrrooggrraamm AArreeaass deployment programs, and low-income (also known as income-qualified) assistance programs. Since 2015 UPS has responded to Council, UAC and community interest by adding programs in low- carbon transportation, building decarbonization, and sustainability, as shown in Figure 1. These types of programs are less commonly implemented by publicly owned utilities, but UPS was a natural fit for these programs given its customer program experience and the ability to leverage a number of customer engagement touchpoints. These additional focus areas have led to the need for a more comprehensive planning process. Collectively utilities customer programs account for about $6M to $12M in expenditures every year. Every year these programs help Palo Alto customers save natural resources, reduce their carbon footprint, and lower their utility bill. Figure 1. Diagram of program areas covered by Utilities Program Services (UPS). DISCUSSION The purpose of this report is to solicit feedback from the UAC on utilities customer programs going forward and the criteria used to prioritize customer programs. This report includes: 1) how staff prioritizes utilities customer programs and request for feedback, 2) the addition of CO2 as a prioritization criterion wherever possible, 3) performance of programs in these priority areas in fiscal year 2018 (FY2018), and 4) a look forward over the next two years on programs that are launching and how these are expected to improve performance across these priority areas. Staff is seeking feedback on the prioritization criteria, as well as on which program areas the UAC would like to see emphasized. While there are mandatory programs and constraints, staff want the programs to reflect the community interests wherever possible. As shown in Figure 2, Utilities implements a wide range of customer programs and initiatives (“what do we do”). Shared priorities define how we choose and evaluate initiatives. To effectively achieve our goals, Utilities must make effective use of technology and metrics, stay focused on the customer and the community, and make efficient use of its resources by leveraging regional partnerships. All of these implementation strategies are consistent with the Utilities Strategic Plan. City of Palo Alto Page 3 Figure 2. Utilities customer program areas, priorities, and implementation via Utilities Strategic Plan areas. I. Current Utilities Customer Program Priorities Customer program design starts with City values, Utilities values and Utilities Strategic Plan priorities to create a program portfolio balanced between the priorities listed below. These priorities are also used to evaluate individual programs and measure overall progress on portfolio-level goals. Staff began tracking CO2 emissions avoided in 2018 and using avoided emissions as a program prioritization criterion wherever possible. Staff is seeking feedback on these priorities, as well as feedback on which priorities the UAC feels are well-covered or are not adequately reflected in program offerings or participation. Customer Satisfaction: Provide Great Customer Service a. Use every touchpoint to help Utilities Department become a trusted energy advisor. b. Design programs which enhance customer experience and satisfaction. Equity: Ensure Equitable Service a. Ensure UPS serves the efficiency & educational needs of all major customer segments. b. Target hard-to-reach customers Utilities Department is uniquely positioned to support. c. Support income-qualified customers. Reduce Carbon Emissions: Help our Customers Reduce their Carbon Emissions a. Maximize avoided carbon emissions, with a focus on deep decarbonization. b. Support City’s S/CAP goal of 80% reduction in emissions by 2030. Efficiency Savings: Help our Customers Save Natural Resources a. Deliver cost-effective efficiency savings which maximize CO2 avoided. b. Support City resource efficiency and carbon emission reduction goals. c. Set maximum feasible & cost-effective efficiency targets for building efficiency. City of Palo Alto Page 4 Cost-Effectiveness: Provide Maximum Value to Customers a. Maximize cost-effectiveness of all programs and initiatives. II. Key Performance Indicators This section provides an overview of performance across priorities in FY2018 as well as key customer survey takeaways and action items. More details can be found in Attachment C: Fiscal Year 2018 Demand-Side Management Report. Attachment A lists key performance indicators (KPIs) to indicate progress in the various priority areas, while Attachment B shows them in a “report card” format. Some of these KPIs are still in development, and several are not currently easy to track. Staff intends to improve its data management systems and surveys to begin tracking data to support these KPIs. For those KPIs currently tracked, some key results for FY2018 are shown below. Customer Satisfaction  Received a Net Promoter Score (NPS) 90 out of 100 for the home energy advisory program the Home Efficiency Genie.  62% of residential customers had either heard of or used efficiency product rebates (page 50 of Attachment D).  38% of residential customers believe that CPAU offers services that can help them meet their water and energy management goals (page 52 of Attachment D).  Key Actions: 1) Engage with UAC on community priorities for programs. 2) Launch online marketplace for efficient products, customer usage reports, and small to medium business efficiency concierge program. 3) Use new internal program tracking software to help with customer segmentation, targeted marketing, and improved survey methods. Equity  All major customer segments had access to efficiency incentive programs.  1.5% of residents participated in the Rate Assistance Program5 for income-qualified residents.  The Residential Energy Assistance Program which provides free weatherization and efficiency upgrades to income-qualified residents served 44 customers. CO2 Emissions Avoided  Programs saved 3,700 metric tons of CO2 in 2018. Over the lifetime of these investments they will keep approximately 60,0006 tons of CO2 from entering the atmosphere.  Key Actions: 1) Begin tracking CO2 avoided from all Utilities customer programs with new program tracking software. 2) Use CO2 avoided as prioritization criterion wherever possible. 3) Launch several new electric vehicle programs with Low Carbon Fuel Standard funds. Efficiency Savings 5 The Rate Assistance Program is not run by Utilities Program Services but is an offering to income-qualified residents administered by CPAU. 6 A given energy efficiency action or appliance has a specific lifetime during which it will deliver efficiency and or CO2 savings. The 60,000 tons of CO2 is over the lifetime of the measure, whereas Figure 4 shows the CO2 saved in the first year. City of Palo Alto Page 5  Exceeded new higher electricity efficiency savings goal by 14% and nearly reached historically high new gas savings goal for FY2018. This is especially impressive because many utilities lowered their efficiency goals for 2018 to 2027.  Exceeded the previous year’s electricity and gas efficiency savings by 10%, despite the delayed launching of several programs.  Key Actions: 1) Achieve efficiency goals for electricity and gas, and set new goal for water conservation as part of upcoming statewide water efficiency goal-setting exercise. 2) Launch customer usage reports and small to medium efficiency concierge which are both major contributors to efficiency goals. Cost-Effectiveness  Efficiency programs in electric, gas, and water were cost-effective alternatives to additional supply, at 59%, 14%, and 14% less expensive than supply cost respectively (Attachment C).  In 2018 only 31% of residential customers believed that CPAU was working hard to keep electric prices competitive, down from 38% in 2016. This is ten percentage points below the statewide average.  Key Actions: 1) Launch highly cost-effective efficiency programs with customer usage reports and small and medium business efficiency concierge program. These also lower customer bills. 2) Use customer program tracking software to improve accounting of very cost-effective efficiency savings being achieved by local Green Building Ordinance and programs co-led by Valley Water. City of Palo Alto Page 6 Figure 3. Energy & water efficiency savings achievements versus annual goals .7 Figure 4. CO2 avoided by Utilities Customer Programs since 2015. 7 Electricity efficiency savings achieved and goals are shown here on a “gross” basis, which includes the savings from “free-riders”. The “net” efficiency savings were 0.66% for FY2018. City of Palo Alto Page 7 III. Key 2018 Customer Survey Results Staff relied on a variety of customer surveys to help inform our near-term priorities. The high-level results of these surveys are in Attachments D for residential customers and in Attachment E for commercial customers. Some key takeaways are summarized below. Residential Customers: 1. Roughly 47% of residents rank keeping rates low as their top priority, while roughly 25% rank sustainability as their top priority. This was also consistent with the self-defined customer segments in pages 39 through 47 of Attachment D. Providing higher reliability as well as more resiliency in case of an emergency were each ranked as a top priority for 8% of residents respectively (page 47 of Attachment D). This was also consistent with the self-defined customer segments in pages 39 through 47 of Attachment D. 2. Overall residential satisfaction is 76%, 20 percentage points higher than statewide average for municipal utilities. 3. However, only 34% of residential customers feel that CPAU is staying ahead of their wants and needs (page 9 and 52 of Attachment D). This could be due to the lack of local incentives comparable to those that are available in PG&E territory such as for electric vehicle incentives, EV rates, all- electric rates, and smart meters, in addition to difficulties navigating the City’s website. 4. Residential customers who believe that CPAU keeps customers’ best interest at the forefront when establishing policies and making decisions has declined from 42% in 2016 to 30% in 2018 (page 9 and 24 of Attachment D). 5. Customer perception of CPAU’s sustainability has declined to 61% from 69% in 2016 (page 22 of Attachment D). This could be due to the discontinuation of the programs messaging conservation (former behavioral programs) and discontinuation of the PaloAltoGREEN Electric Program for 100% renewable electricity to residents, as well as customer confusion around carbon neutral electricity and gas. The customer usage reports will hopefully help to address this. Small & Medium Business Commercial Customers:8 1. Customers rank CPAU 4% below the benchmarking utility average for customer satisfaction. 2. Customers rank CPAU 2% below the utility benchmarking average for value. Large Commercial & Industrial Customers: 1. Key Account Customers rank CPAU 3% above the benchmarking average for customer satisfaction and 4% above average for value. 2. Key Account Customers rank Key Account Representatives 3% benchmarking average for customer satisfaction and 1% above the benchmarking average for value. IV. New Programs Launching in FY2020 and FY2021 To improve performance across key success metrics, UPS began work on five new programs in FY2019 which will launch in FY2020. These programs include in a) electric vehicles for multifamily residences, b) achieving efficiency savings goals by informing customers about their usage patterns and giving them tools to save energy and water, c) launching a new small and medium business efficiency concierge to recommend efficiency measures and contractors, d) streamlining customer segmentation efforts with a 8 CPAU is in the process of launching a small and medium business efficiency concierge service to help serve this underserved segment. City of Palo Alto Page 8 new software tool for program tracking, and e) improving customer experience with an online marketplace for eligible efficient or sustainable products. With these programs we hope to improve customer experience, improve customer perception of value provided by the utility, improve customer perception of sustainability, and improve customer satisfaction in the small and medium business community. Other major initiatives rolling out in FY2020 and FY2021 are the CALeVIP program with incentives for electric vehicle chargers as well as an RFP for a concierge service for the large commercial and industrial customers. The RFP will include building efficiency concierge service for large commercial and industrial customers, as well as support for building decarbonization and electric vehicle charging. These new programs that are launching are designed to improve our performance across our priorities of customer satisfaction, equity, avoided CO2 emissions, natural resource efficiency, and cost- effectiveness. In addition to increasing efforts to promote electric vehicles (EVs) by ramping up several new initiatives and increasing spending in that area by $8.7M over the next three years,9 staff is increasing our program integration with Office of Sustainability via the S/CAP implementation planning process, streamlining internal processes with a new software system interface, and including carbon emissions avoided as a prioritization criterion. Anticipated expenditures in the different program areas are shown below in Figure 5. Note that all of the expenditures are funded from either designated funds such as the public benefits surcharge or Low-Carbon Fuel Standard funds, or are efficiency measures that are cost-effective alternatives to additional supply. Figure 5. Actual and estimated expenditures 2016-2021 on Utilities Customer Programs. Staff will show a more detailed overview of the Utilities customer program portfolio at a future UAC meeting as part of the Customer Programs Work Plan. 9 The detailed plan for Low-Carbon Fuel Standard funding went to the UAC in September 2019. City of Palo Alto Page 9 RESOURCE IMPACT As discussed above, the planned programs will be budgeted for out of either funds designated by the state for public benefits programs per § 385(a) of the Public Utilities Code, carbon mitigation, or a cost- effective alternatives to additional supply resources. Staff estimates the annual budget for Utilities Customer Programs will grow from $6M in 2019 to $8.5M in FY2020. Although this report contains preliminary estimates of the costs of customer programs, the detailed budget plan and staffing needs to meet these key metrics will be part of the annual City budgeting process. POLICY IMPLICATIONS These programs are consistent with the Utilities Strategic Plan, the Sustainability Implementation Plans, and the City’s Sustainability and Climate Action Plan (S/CAP). ENVIRONMENTAL REVIEW This briefing and solicitation of feedback does not require California Environmental Quality 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)(5), as an administrative governmental activity which will not cause a direct or indirect physical change in the environment. PREPARED BY: LENA PERKINS, Senior Resource Planner (Acting), Resource Management BRUCE LESCH, Manager, Utilities Program Services, Resource Management REVIEWED BY: JONATHAN ABENDSCHEIN, Assistant Director, Resource Management DEPARTMENT HEAD: __________________________________ DEAN BATCHELOR, Director of Utilities Attachments: • Attachment A: Proposed KPIs • Attachment B: Snapshot of KPIs and Key Actions • Attachment C: Fiscal Year 2018 Demand Side Management Annual Report • Attachment D: Residential Survey Results 2018 • Attachment E: Commercial Survey Results 2018 • Attachment F: Presentation for Utility Customer Program Discussion Attachment A: Proposed Key Performance Indicators Key metrics for measuring success are shown below. Some metrics are currently being revisited and some benchmarking goals are being set. A new utility program tracking software will simplify tracking and reporting progress on these metrics. A. Customer Satisfaction Metric 2018 Goal Achieved  Utility Programs Average Net Promoter Score ** 14  Utility Overall Net Promoter Score ** **  Customer Participation in Programs ** **  Customer Awareness of Programs 50% 15-62% B. Equity Metric 2018 Goal Achieved  Equitable Program Offerings Across Customer Segments 100% 100%  Participation of Eligible Income-Qualified Customers ** 1.5% of total  Assistance Received by Income-Qualified Customers N/A $300,000  Net Promoter Score from Income-Qualified Customers ** **  Awareness of Income-Qualified Programs ** ** C. Carbon Emissions Metric 2018 Goal Achieved  CO2 Avoided from our initiatives. * 3,700 tCO2  Fraction of S/CAP goal of 80% reduction by 2030 * ** D. Efficiency Savings* Metric 2018 Cumulative 2015-2018 Goal Achieved Goal Achieved  Electric Savings, % of load 0.88% 1.0% ** 2.6%  Gas Savings, % of load 1.0% 0.93% ** **  Water Savings, % of load 0.91% 0.47% ** ** E. Cost-Effectiveness* Metric 2018 Cumulative 2015-2018 Goal Achieved Goal Achieved  Electric Savings Cost, $/kWh < $0.083 $0.034 ** **  Gas Savings Cost, $/Therm < $0.65 $0.56 ** **  Water Savings, $/CCF < $5.49 $4.71 ** **  Avoided Emissions, $/tCO2 ** ** ** **  $/Customer Reached ** ** ** **  $/Participant ** ** ** ** *All efficiency savings are shown on a gross basis, with cumulative savings starting in 2015. ** These metrics need to be either defined or tracking methods need to be set up to measure them more accurately. Attachment B: Snapshot of KPIs and Key Actions 9/24/2019 1 CUSTOMER SATISFACTION GOALS Use every touchpoint to help Utilities Department become a trusted energy advisor. Design programs which enhance customer experience and satisfaction. KPIs 2018 Highlights Achieved NPS of 90 for Home Efficiency Genie residential advisory service. Revamped all solar webpages. Developed new UPS benchmark survey questions. 2019 Key Actions Launching for online marketplace for energy efficiency devices. Support rollout of online portal for customers. Streamline processes for solar & electric vehicle permitting. Tracking Net Promoter Score for all initiatives. EQUITY GOALS Ensure UPS serves the efficiency & educational needs of all major customer segments. Support hard-to-reach & income-qualified customers utility is uniquely positioned to help. KPIs 2018 Highlights Contracted for new Small/Medium Business efficiency program (program ended Jun 2018). Continued efficiency and EV programs targeting hard-to-reach multifamily segments. 44 Income-qualified received direct installation from energy efficiency program. 2019 Key Actions Launching heat-pump space heating pilot project for income-qualified multifamily furnace retrofit. Begin benchmarking update for income-qualified customer programs. Evaluate income-qualified program update. CARBON EMISSIONS GOALS Maximize avoided carbon emissions, with a focus on deep decarbonization. Support City’s S/CAP goal of 80% reduction in emissions by 2030. KPIs 2018 Highlights Installed 27 residential heat-pump water heaters. Rebated 5 EV chargers and hosted more than 500 customers at 2 EV ride and drives. Began tracking marginal and average hourly avoided emissions from efficiency programs. 2019 Key Actions Launching new EV charger installation program and designing new EV programs. Launching heat-pump space heating pilot project for low-income multifamily. Climate Corp Fellow dedicated to building decarbonization via heat-pump water heaters. EFFICIENCY GOALS Achieve cost-effective efficiency savings targets which maximize CO2 avoided. Set maximum feasible & cost-effective efficiency targets. KPIs 2018 Highlights Exceeded ambitious new efficiency goal for electricity savings! Large energy savings Independent consultant verified for Building Operator Certification course. Worked with Development Center to verify energy savings & identify potential improvements. 2019 Key Actions Launching for program for Customer Usage Monthly Reports Rolling out of internal customer program tracking & analytics software to streamline processes. Began contracting for new large commercial & industrial efficiency programs. Metric 2018 Goal 2018 Achieved Utility Programs Average Net Promoter Score - 14 Utility Overall Net Promoter Score - - Customer Participation in Programs - - Customer Awareness of Programs 50% 62%* Metric 2018 Goal 2018 Achieved Program Offering For All Major Customer Segments 100% 100% Income-Qualified Customer Participation % - 1.6% Assistance Received by Income-Qualified Customers N/A $300,000 Net Promoter Score from Income-Qualified Customers - - Awareness of Income-Qualified Programs - 11% Metric 2018 Goal 2018 Achieved CO2 Avoided from our initiatives. - 3,700 mTCO2 % S/CAP goal of 80% reduction by 2030 - * Metric 2018 Goal 2018 Achieved Annual Cumulative Annual Cumulative Electric Savings % 0.88% * 1.0% 2.6% Gas Savings % 1.0% * 0.93% * Water Savings % 0.90% * 0.47% * Attachment C: Fiscal Year 2018 Demand Side Management Report OVERVIEW: The City of Palo Alto Utilities (CPAU) is the only city-owned utility in California that operates its own utilities for electric, natural gas, water, fiber optic, storm drain, wastewater and refuse services. We have been providing quality services to the citizens and businesses of Palo Alto since 1896. MISSION: To provide safe, reliable, environmentally sustainable and cost-effective services. STRATEGIC DIRECTION: At CPAU, our people empower tomorrow’s ambitions while caring for today’s needs! We make this possible with our outstanding professional workforce, leading through collaboration and optimizing resources to ensure a sustainable and resilient Palo Alto. PRIORITIES: Workforce: We must create a vibrant and competitive environment that attracts, retains, and invests in a skilled and engaged workforce. Collaboration: We must collaborate with internal teams and external stakeholders to achieve our shared objectives of enhanced communication, coordination, education, and delivery of services. Technology: We must invest in and utilize technology to enhance the customer experience and maximize operational efficiency. Financial Efficiency and Resource Optimization: We must manage our finances optimally and use resources efficiently to meet our customers’ service priorities. Attachment C: Fiscal Year 2018 Demand Side Management Report TABLE OF CONTENTS EXECUTIVE SUMMARY ..................................................................................................................... 3 1 ELECTRIC EFFICIENCY ACHIEVEMENTS ..................................................................................... 7 2 GAS EFFICIENCY ACHIEVEMENTS ........................................................................................... 10 3 WATER EFFICIENCY PROGRAMS ............................................................................................. 13 4 SUSTAINABLE ENERGY PROGRAMS ....................................................................................... 16 APPENDIX A: PROGRAM DESCRIPTION ........................................................................................... 19 APPENDIX B: FY 2018 ACHIEVEMENTS BY DSM PROGRAM ............................................................. 24 APPENDIX C: HISTORICAL DSM PROGRAM EXPENDITURES ............................................................. 26 APPENDIX D: CITY POLICIES/PLANS AND STATE MANDATES IMPACTING DSM PROGRAM GOALS AND IMPLEMENTATION ........................................................................................................................ 27 3 of 29 FY 2018 Demand Side Management Annual Report Attachment C: Fiscal Year 2018 Demand Side Management Report EXECUTIVE SUMMARY The City of Palo Alto Utilities (CPAU) is pleased to issue the Demand Side Management (DSM) Report for Fiscal Year (FY) 2018. This report is several months late due to a year-long delay in the new electricity reporting tool used by all publicly-owned utilities; however, it is a useful public document showing the efficiency achievements and customer programs. CPAU is committed to supporting environmental sustainability through conservation of electric, gas and water resources. Additionally, CPAU promotes distributed renewable generation, building electrification, electric vehicles, and modifies consumer demand through incentives and education. CPAU accomplishes these goals by delivering a wide range of customer programs and services as described in this report, and strives to do so while remaining personable, effective, and in-touch with customer needs. This annual report provides updates on:  Electric and natural gas energy efficiency (EE) programs  Water conservation programs  Sustainability and carbon-reduction programs  Customer engagement and satisfaction programs  Achievements and expenditures ENERGY EFFICIENCY AND WATER CONSERVATION GOALS AND ACHIEVEMENTS CPAU offers incentives and education programs for customers to encourage energy and water efficiency - Table ES.1 summarizes the FY 2018 efficiency goals and achievements. FY 2018 represents the first year of increased energy savings targets set after SB 350, which aimed to double the energy efficiency savings in electricity and natural gas in buildings by 2030. Electric efficiency goals increased by 25% (on a net basis) and natural gas goals increased by 82%. As shown, CPAU exceeded the higher new electricity efficiency savings goal for 2018, while nearly reaching the goal for natural gas efficiency savings. Water efficiency savings fell in 2018, largely due to some staff refocusing on their respective areas in energy efficiency and carbon reduction after being temporarily working on water issues during the drought. Table ES.1: Efficiency Goals versus Achievements Resource FY 2018 Savings Goals (% of load) FY 2018 Savings Achieved (% of load) FY 2018 Savings Achieved Electricity 0.88%1 1.00% 8,988 MWh Gas 1.00% 0.93% 264,960 therms Water 0.91% 0.47% 23,209 CCF 1 Savings goals and savings achieved are given in Table ES.1 as gross values. As a percentage of load, the net electricity savings goal was 0.75% and the net savings achieved was 0.66% or 5,957 MWh. Net values account for the impact of “free ridership” or customers who would have upgraded to more efficient measures without the program or incentive. Gas and water goals and achievements are only tracked on a gross basis, and therefore electricity efficiency savings are shown on a gross basis in Table ES.1 above for consistency. 4 of 29 FY 2018 Demand Side Management Annual Report Attachment C: Fiscal Year 2018 Demand Side Management Report CPAU is committed to achieving all cost-effective energy and water efficiency measures (i.e. those that are less expensive than supply-side resources). Table ES.2 summarizes the cost of efficiency over the last three years compared to the projected cost of supply resources .2 Electric, natural gas, and water efficiency portfolios were cost-effective compared to additional supply-side resources in FY 2018. The rolling 3-year average provides longest view for interpreting the cost effectiveness of efficiency portfolios, as it accounts for yearly variations in program engagement and funding. The rolling 3-year average shows that the electric and water efficiency portfolio have been cost-effective. On the other hand, the 3-year average cost of gas efficiency savings is higher than the future supply. This was driven by very high program costs in FY 2017 as well as inexpensive future supply. The FY 2018 gas efficiency portfolio was 14% less expensive than the future supply cost of gas, and staff is examining ways to improve the cost-effectiveness of the gas portfolio going forward. The cost of both the electricity and natural gas efficiency portfolios are also negatively impacted by the Home Efficiency Genie program. The Home Efficiency Genie program is mainly a customer service program that has great educational value to Palo Alto residents but delivers minimal claimable energy efficiency savings. Staff is currently re-examining how the Home Efficiency Genie program is structured, and how customer education program costs are tracked. Table ES.2: Actual Levelized Efficiency Costs versus Projected Supply Costs FY 2016 Efficiency FY 2017 Efficiency FY 2018 Efficiency 3-yr average Efficiency Future Supply Electric $/kWh $0.065 $0.056 $0.034 $0.051 $0.083 Gas $/therm $0.76 $1.86 $0.56 $1.06 $0.65 Water $/CCF $2.27 $4.62 $4.71 $3.87 $5.49 SUSTAINABILITY GOALS AND ACHIEVEMENTS FY 2018 saw a large ramp-up in efforts around building electrification and electric vehicle charger rebates. Staff also continued working with a marketing consultant to upgrade the marketing materials for all programs-- including a full website migration. In addition, CPAU claimed savings for the second year achieved by Palo Alto’s building energy reach code. Staff is still working on improving internal processes to verify and include a higher percentage of actual savings. CPAU also implemented a new requirement for commercial retrocommissioning projects to follow additional persistence procedures. This new requirement ensures that the efficiency savings persist for these projects for three years instead of diminishing. A Building Operator Certification program was offered to our Key Accounts’ facilities staff to teach them ways to run their buildings most efficiently. This was a great customer touchpoint and the energy efficiency savings were rigorously verified by our EM&V contractor. CPAU also supports a variety of programs designed to promote sustainability and reduce carbon 3 This goal is from the 2018 City of Palo Alto Utilities Strategic Plan in the priority area of Collaboration. 5 of 29 FY 2018 Demand Side Management Annual Report Attachment C: Fiscal Year 2018 Demand Side Management Report emissions in Palo Alto. The Electric Vehicle Supply Equipment (EVSE) rebate was designed to focus on “hard-to-reach” market segments for EV chargers by targeting multifamily dwellings, nonprofits and schools. The Clean Local Energy Accessible Now (CLEAN) solar photovoltaic (PV) program is on track to meet its goal. Since the state-mandated solar water heating program is not cost-effective, CPAU offers the program but does not actively promote it. Given the lack of promotion and the low natural gas prices, installed solar water heating systems continue to fall short of the goal. Table ES.3: Sustainability Programs and Goals Sustainability Program Program Goal FY 2018 Achievement Cumulative Achievement Through FY 2018 Heat-Pump Water Heater (HPWH) Rebate 110 installed by July 2019 27 30 EV Charger Rebate (EVSE) 200-400 new charging ports by 2021 2 10 Solar PV CLEAN Program 3 MW in CLEAN Program 1.5 MW 1.5 MW** Solar Water Heating 30 systems/year 4 systems 68 systems since 2008 *Although only 1.498 MW of CLEAN projects were installed by the end of FY 2018, 2.84 MW ac had been reserved. This represents 95% of the 3 MW of capacity with the highest compensation rate for the CLEAN program . ** Since 2000, the cumulative behind the meter installed capacity through FY 2018 is 10.11 MW ac. CUSTOMER SATISFACTION GOALS AND ACHIEVEMENTS Supporting the community is at the heart of CPAU’s mission. CPAU offers some programs that are not intended to achieve efficiency savings but are offered for educational value or as a customer service program to increase customer satisfaction. Palo Alto once again hosted two educational workshops for the SunShares program, which is a bulk buy program of PV systems for the nine counties comprising the Bay Area. Once again Palo Alto was the number one outreach partner in number of systems installed and kWs installed. Table ES.4: DSM Program Areas Community Engagement Program Program Goal FY 2018 Achievement Cumulative Achievement through FY 2018 Residential Satisfaction >50%3 76%4 - SunShares PV GroupBuy Installed PV capacity 157 kW 421 kW Home Efficiency Genie 120 audits year 50 246 3 This goal is from the 2018 City of Palo Alto Utilities Strategic Plan in the priority area of Collaboration. 4 This residential satisfaction is from the 2018 RKS residential survey in Attachment D of the October 2, 2019 UAC report. 6 of 29 FY 2018 Demand Side Management Annual Report Attachment C: Fiscal Year 2018 Demand Side Management Report DSM PROGRAM EXPENDITURES Table ES.5 summarizes the total DSM program expenditures over the last three fiscal years. Table ES.5: DSM Program Areas Program Area FY 2016 FY 2017 FY 2018 Electric Efficiency 5 6 10 Gas Efficiency 6 5 11 Water Efficiency 9 12 11 Sustainability 5 7 2 Customer Satisfaction 2 3 2 PROGRAMS IN PORTFOLIO 27 33 35 TOTAL PROGRAM EXPENDITURES $4.8 million $5.8 million $4.0 million The detailed breakdown of expenditures by program can be found in Appendix C, which also shows how each program fits into the larger CPAU portfolio of efficiency, sustainability, and customer satisfaction. HIGHLIGHTS OF FISCAL YEAR 2018 The Commercial and Industrial Energy Efficiency Program is the flagship of CPAU’s commercial portfolio. With three engineering firms working closely with CPAU Key Account Representatives, this program is where Palo Alto sees the bulk of its energy savings. The engineering firms assist customers with audits, engineering studies, vendor selection, rebate processing and post -installation inspection. They make the process as easy as possible for the customer. Seventy percent of the gross energy savings came from this program, with fifty percent of the gross savings coming from one very large customer. CPAU mirrored this program design into the residential market with the Home Efficiency Genie as “Your Trusted Energy Advisor” and have begun seeing increased engagement with residents. CPAU added an EV Charger Rebate Program in late FY 2017, using funds from the Low Carbon Fuel Standard, and in 2018 directed more staff time towards promoting this program. CPAU also focused more staff time on promoting the Heat Pump Water Heater rebate program in FY 2018 and saw an increase in successful installations. Both EV charging rebates and the Heat Pump Water Program expanded in FY 2018, reflecting the community priority of reducing CO2 emissions. Palo Alto participated once again the SunShares program, which is a bulk buy program of PV systems for the nine counties comprising the Bay Area, and once again Palo Alto was the number one outreach partner in number of systems installed and kWs installed. Finally, CPAU started buying carbon offsets to offset the emissions of the entire natural gas portfolio. 7 of 29 FY 2018 Demand Side Management Annual Report Attachment C: Fiscal Year 2018 Demand Side Management Report 1 ELECTRIC EFFICIENCY ACHIEVEMENTS 1.1 Electric Efficiency Savings versus Goals City Council approved CPAU’s first Ten-Year Energy Efficiency Portfolio Plan in April 2007, which included a 10-year cumulative savings target of 3.5% of the forecasted energy use. As mandated by California law, the electric efficiency targets have been repeatedly updated, with the most recent 10-year cumulative savings goal set at 5.7% between 2018 and 2027. The goal has been impacted by increasingly stringent statewide building codes and appliance standards. The substantial energy savings from these “codes and standards” are no longer counted towards meeting CPAU’s EE program goals displayed below. With stricter codes and standards, higher efficiency goals and over 30 years of running programs in Palo Alto, staff needs to continue to innovate to maintain and increase efficiency savings. CPAU’s electric efficiency savings goals and achievements as a percentage of the City’s electricity usage are shown in Table 1 below. In FY 2018, on a gross efficiency savings basis, CPAU achieved electric efficiency savings of 1% of its total electricity sales through its customer efficiency programs. This exceeded the 2018 CPAU electric efficiency goal by 14%. Table 1: Electric Savings versus Goals Year Annual Savings Goal (% of load) Savings Achieved (% of load) Savings Achieved (MWh) Goal Source FY 2008 0.25% 0.44% 4,399 2007 FY 2009 0.28% 0.47% 4,668 FY 2010 0.31% 0.53% 5,270 FY 2011 0.60% 0.58% 5,497 2010 FY 2012 0.65% 1.31% 12,302 FY 2013 0.70% 0.85% 8,074 FY 2014 0.60% 0.86% 8,218 2012 FY 2015 0.60% 0.65% 6,063 FY 2016 0.60% 0.59% 5,530 FY 2017 0.60% 0.65% 5,986 FY 2018 0.88%5 (0.75%) 1.00%5 (0.66%) 8,9885 (5,957) 2017 When accounting for the metric of “free-ridership” the net electric efficiency savings achieved dropped to 0.66% of load, and experts have suggested a Palo Alto specific study to examine free-ridership levels on incentive programs. Staff is currently weighing the relative impact of 5 Electricity efficiency savings goal and achievements are presented here on a gross basis, and the net numbers are added in parenthesis for FY 2018. CPAU will be reporting both net and gross electricity efficiency savings going forward, due to discrepancies between anticipated net to gross ratios during the 2017 goal setting and actual net-to-gross ratios for electric efficiency measures implemented. Staff is will be revising goals in 2020-2021 and is also considering a study specific to Palo Alto to develop a local net-to-gross ratio for programs and measures. 8 of 29 FY 2018 Demand Side Management Annual Report Attachment C: Fiscal Year 2018 Demand Side Management Report such a study compared to investing in more innovative types of programs. Since there is so much uncertainty in the levels of free-ridership, the goals and achievements of the electric efficiency savings will be presented on both a net and gross basis going forward. For context, gas and water efficiency measures are both reported on a gross basis. 1.2 FY 2018 Electric Efficiency Savings by End Use and Customer Segment Non-residential customers account for approximately 80% of CPAU’s electric sales, and non- residential efficiency program savings represent about 83% of CPAU’s total electric efficiency savings, as shown in Figure 1. Non-residential behavior, retrocommissioning and operational (BROs) savings, representing 29% of the total electric efficiency savings, are from the process of identifying less-than-optimal equipment, work practices and usage, and then making the adjustments to optimize them. Figure 1: Composition of Net Electric Efficiency Savings in FY 2018 (Total saving of 8,988 MWh, 1.00% of annual load) Non-Res Lighting 38% Non-Res Behavorial, Retrocommissioning, & Operational 29% Non-Res Green Building Ordinance 16% Res Home Energy Report 9%Home Efficiency Genie 1% Multifamily Lighting 4% Low-Income 1% Other 2% 9 of 29 FY 2018 Demand Side Management Annual Report Attachment C: Fiscal Year 2018 Demand Side Management Report Figure 2 shows the historical annual electric efficiency savings and annual electric efficiency program expenditures. Figure 2: FY 2008 to FY 2018 Electric Efficiency Savings and Expenditures - 1,000 2,000 3,000 4,000 5,000 0.0% 0.4% 0.8% 1.2% 1.6% 2.0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 $ Th o u s a n d s Ac h i e v e d N e t E E s a v i n g s a s % o f l o a d Electric Efficiency Program Expenditures Net Savings Achieved as % of Load Completion of a significant EE project at a large commercial customer site 10 of 29 FY 2018 Demand Side Management Annual Report Attachment C: Fiscal Year 2018 Demand Side Management Report 2 GAS EFFICIENCY ACHIEVEMENTS 2.1 Gas Efficiency Savings versus Goals In parallel with the development of ten-year electric goals, City Council adopted CPAU’s first set of gas efficiency targets in 2007 to reduce 10-year gas consumption by 3.5%. The most recent goal, set in 2017, is a 5.1% cumulative efficiency savings between 2018 and 2027. Gas savings from heat-pump water heater rebate program are included below. CPAU’s gas efficiency savings goals and achievements as a percentage of sales are shown in Table 3. CPAU has continued to expand its gas efficiency program portfolio in the past several years, with most gas savings delivered through third-party administered programs. Table 3: Gas Savings versus Goals Year Annual Savings Goal (% of load) Savings Achieved (% of load) Savings Achieved (therms) Goal Source FY 2008 0.25% 0.11% 35,057 2007 FY 2009 0.28% 0.29% 146,028 FY 2010 0.32% 0.35% 107,993 FY 2011 0.40% 0.55% 164,640 2010 FY 2012 0.45% 0.74% 220,883 FY 2013 0.50% 1.13% 327,077 FY 2014 0.50% 1.20% 337,079 2012 FY 2015 0.50% 0.92% 229,373 FY 2016 0.55% 1.08% 289,442 FY 2017 0.55% 0.81% 228,707 FY 2018 1.00% 0.93% 264,960 2017 2.2 FY 2018 Gas Efficiency Savings by End Use and Customer Segment Non-residential customers account for 52% of CPAU’s gas sales, and in FY 2018 gas efficiency savings in non-residential represented about 57% of CPAU’s total gas savings. Non-residential behavior, retrocommissioning and operational (BROs) savings are from the process of identifying less-than-optimal equipment, work practices and usage, and then making the adjustments to optimize them. Home Energy Reports (HERs), which compare customers’ electricity and gas usage to that of similar homes, were discontinued in FY 2015 but provided savings based on assumed persistence of the program’s effects6. In FY 2018, the HER program accounted for 28% of total gas savings. Figure 3 shows the breakdown of gas savings in FY 2018 by end use. 6 Savings from a behavioral program can be claimed at a declining level for five years after it closes (Cadmus 2015 report). 11 of 29 FY 2018 Demand Side Management Annual Report Attachment C: Fiscal Year 2018 Demand Side Management Report Figure 3: Composition of Natural Gas Efficiency Savings in FY 2018 (Total saving of 264,960 therms, 0.93% of annual load) Figure 4 compares the historical annual gas efficiency savings and annual gas DSM expenditures. Non-Res Behavorial, Retrocommissioning, & Operational 57% Non-Res Green Building Ordinance 4% Res Home Energy Report 28% Home Efficiency Genie 3% Low Income 1% Heat Pump Water Heater 1% Other 6% 12 of 29 FY 2018 Demand Side Management Annual Report Attachment C: Fiscal Year 2018 Demand Side Management Report Figure 4: FY 2008 to FY 2018 Gas Efficiency Savings and Expenditures - 300 600 900 1,200 1,500 0.0% 0.3% 0.6% 0.9% 1.2% 1.5% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 $ Th o u s a n d s Ac h i e v e d E E s a v i n g s a s % o f L o a d Gas Efficiency Program Expenditures Actual Savings Achieved as % of Load 13 of 29 FY 2018 Demand Side Management Annual Report Attachment C: Fiscal Year 2018 Demand Side Management Report 3 WATER EFFICIENCY PROGRAMS 3.1 Water Efficiency Savings versus Goals CPAU’s water savings goals and achievements as a percentage of sales are shown in Table 5. Table 5: Water Savings versus Goals Year Annual Savings Goal (% of load) Savings Achieved (% of load) Savings Achieved (CCF) FY 2008 0.34% 0.72% 39,323 FY 2009 0.34% 0.98% 52,983 FY 2010 0.34% 1.35% 68,948 FY 2011 0.90% 0.47% 23,409 FY 2012 0.91% 1.09% 55,067 FY 2013 0.91% 0.53% 26,513 FY 2014 0.91% 0.64% 32,325 FY 2015 0.91% 1.54% 68,227 FY 2016 0.91% 1.96% 74,484 FY 2017 0.91% 1.40% 57,154 FY 2018 0.91% 0.47% 23,209 The City partners with the Santa Clara Valley Water District (SCVWD) to provide water conservation programs. SCVWD offers the programs to Palo Alto customers, and CPAU markets and promotes the programs. FY 2018 marked the end of the driest four-year period on record in California. After years of an intense focus on water savings, CPAU chose to focus our limited resources on programs related to carbon mitigation. 3.2 FY 2018 Water Efficiency Savings by End Use and Customer Segment Home water reports were stopped in early FY 2016, but savings could still be claimed due to persistence7 from FY 2015 and account for 82% of the total water savings. 7 Savings from a behavioral program can be claimed at a declining level for five years after it closes (Cadmus 2015 report). 14 of 29 FY 2018 Demand Side Management Annual Report Attachment C: Fiscal Year 2018 Demand Side Management Report Figure 5: Composition of Water Efficiency Savings in FY 2018 (Total saving of 23,209 CCF, 0.47% of annual load) Res Home Water Report 82% Non-Res Comprehensive 3% Res Comprehensive 15% 15 of 29 FY 2018 Demand Side Management Annual Report Attachment C: Fiscal Year 2018 Demand Side Management Report Figure 6 compares the historical annual water efficiency savings and annual water DSM expenditures. Figure 6: FY 2008 to FY 2018 Water Efficiency Savings and Expenditures - 200 400 600 800 1,000 0.0% 0.4% 0.8% 1.2% 1.6% 2.0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 $ Th o u s a n d s Ac h i e v e d w a t e r s a v i n g s a s % o f L o a d Water efficiency program expenditures ($)Actual water savings as % of load 16 of 29 FY 2018 Demand Side Management Annual Report Attachment C: Fiscal Year 2018 Demand Side Management Report 4 SUSTAINABLE ENERGY PROGRAMS 4.1 Overview of Sustainable Energy Programs CPAU offers a variety of programs to encourage residents and non-residents to improve the environmental impacts associated with their gas and electric consumption. Customer -side renewable generation programs are available to support the installation of both solar photovoltaic (PV) and solar water heating (SWH) systems. 4.2 PV System Installation Achievements versus Goals As of the end of FY 2018, there have been a total of 1,086 PV installations (1,013 residential, 73 non-residential) since CPAU began supporting local solar PV installations in 1999. These customer-side generation systems are not included in CPAU’s Renewable Portfolio Standard (RPS) supply requirements. In FY 2018, the first PV system went live for the Clean Local Energy Accessible Now (CLEAN) program, which purchases electricity from renewable energy generation systems in CPAU’s service territory. The CLEAN program provides a Feed-In-Tariff rate of $0.165/kwh for the first 3 MW of installed capacity. Nearly half of the capacity was reserved in FY 2018. In 1999 CPAU began offering incentives for PV system installations through the PV Partners Program. In FY 2008 the PV rebate budget was increased as mandated by Senate Bill 1 and Palo Alto’s share of the state-wide goal established by SB1 was 6.5 MW by 2017. Palo Alto exceeded June 30, 2017, its share of the state-wide goal with a total capacity of all Palo Alto PV systems was 8.6 MW, generating about 1.5% of the City’s annual electric energy needs. The PV rebate funds were fully reserved in August 2014 for residential projects and in April 2016 for commercial projects, but rebate payments are expected to continue through FY2023 due to the five-year performance-based incentive schedule. Residents and commercial customers continue to install solar without a rebate largely due to the continued decrease in solar installation costs, net metering and the 30% Federal Tax Credit. 17 of 29 FY 2018 Demand Side Management Annual Report Attachment C: Fiscal Year 2018 Demand Side Management Report Figure 7: Photovoltaic (PV) Installations by Fiscal Year Figure 8: PV System Capacity (kW) added by Fiscal Year8 4.3 Solar Water Heating System Installation Achievements versus Goals A total of 68 solar water heating (SWH) systems have been installed since CPAU began offering SWH rebates to residential and commercial customers in 2008. The SWH rebate program was mandated by AB 1470 (CY 2007) and was recently extended for two additional years by AB 797 (CY 2017). It is administered by the Center for Sustainable Energy (CSE), which also administers SWH rebate programs in the San Diego area. As shown in Figure 9, the number of SWH systems installed has been consistently below target, primarily due to low gas prices which reduce the 8 These solar totals do not include PV installed as part of the CLEAN program. FY00- 07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Res 176 112 43 52 44 49 49 103 93 131 84 77 Non-Res 9 5 9 2 2 4 3 10 9 5 7 8 0 50 100 150 200 In s t a l l a t i o n C o u n t FY00- 07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Res 542 328 152 205 187 195 214 543 474 633 409 449 Non-Res 123 227 1,037 15 295 249 49 1,383 378 465 508 1,049 0 500 1,000 1,500 2,000 Ca p a c i t y A d d e d ( k W -AC ) 18 of 29 FY 2018 Demand Side Management Annual Report Attachment C: Fiscal Year 2018 Demand Side Management Report cost-effectiveness of SWH systems. Unlike PV systems, the cost for SWH systems has not decreased over time. Figure 9: Customer-Side Solar Water Heating Systems—Program Achievements versus Goals 7 17 10 1 1 11 15 1 1 4 0% 25% 50% 75% 100% FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Installed by Fiscal Year Installation Goal 19 of 29 FY 2018 Demand Side Management Annual Report Attachment C: Fiscal Year 2018 Demand Side Management Report APPENDIX A: PROGRAM DESCRIPTION The programs offered by CPAU are designed to assist all customer groups achieve efficiency savings in electricity, natural gas and water in a cost-effective manner. Please see Appendix B for the savings totals associated with each program. RESIDENTIAL PROGRAMS • Home Efficiency Genie The Home Efficiency Genie (HEG) has become CPAU’s flagship residential program. Launched in June 2015, the program enables our residents to call the ‘Genie’ to get free utility bill reviews and phone consultations. For a fee, residents also have the option to receive an in-depth home efficiency assessment which includes air leakage testing, duct inspections, insulation analysis, energy modeling and a one-on-one review of assessment reports with an energy expert. This package is also followed up with guidance and support throughout home improvement projects. The HEG program has a high educational component for Palo Alto residents, which likely leads to additional savings that staff cannot track and include in this program’s savings totals . The Genie also tables at various events throughout the year. In FY 2018, the Genie continued to be the gateway to all of CPAU’s residential programs. • Smart Energy Program Smart Energy is a comprehensive energy efficiency incentive program for residential customers. The City rebates residents who install efficiency measures and equipment in their homes. Among these are attic insulation, heat pump water heaters, pool pumps, smart power strips and whole-house fans. • Educational Programs and Workshops A variety of educational programs and workshops are held throughout the year. Typically, residential workshops on water and energy programs occur in the spring near Earth Day and in the “Summer Workshop Series.” Many workshops focus on water efficiency, landscaping, energy efficiency, solar, home comfort and green building. CPAU is also invited to table at various events throughout the year to educate residents about the various programs we offer. Customers also receive timely E-newsletters on a variety of efficiency matters. • Home Energy and Water Reports CPAU stopped providing residents with individualized reports comparing their home energy and water use with neighbors in similarly sized homes in FY 2015. There were two reports: one for water and one for electricity and gas. The program was ended due to customer complaints about being compared to neighbors, as well as disputes over the basis of the comparison. Staff began focusing on developing a portal that could replace both reports, but the portal vendor later discontinued their product. Studies have shown that savings persist after the program has ended but decrease at a rate of 20% per year, so some reduced savings are still claimed (Cadmus 2015 report). 20 of 29 FY 2018 Demand Side Management Annual Report Attachment C: Fiscal Year 2018 Demand Side Management Report • MultiFamily Residence Plus+ Program This first-ever CPAU program focusing on multifamily buildings provides free, direct installation of EE measures to multifamily residences with 4 or more units including hospices, care centers, rehab facilities and select small and medium commercial properties. In its first year the program focused on energy-efficient lighting and insulation upgrades. In the summer of 2016, the program was revamped to include more LED lighting upgrades as the price of LEDs had decreased and the quality of the lights improved greatly. The addition of LEDs drew excitement from many property managers and building owners who were initially not interested in participating in the program. As a result, CPAU will continue to re-evaluate the program to accommodate this underserved market. Staff expects energy savings to remain high for this program, with a focus on upgrading below-market-rate apartment complexes. • Residential Energy Assistance Program (REAP) REAP provides weatherization and equipment replacement services at no cost to low-income residents and those with certain medical conditions. This program has equal focus on efficiency and comfort, and therefore it is not included in the cost effectiveness calculation used in reporting. The program provides LED lighting, heating system upgrades, insulation for walls and roofs and weather-stripping for doors and windows. • Do-It-Yourself Water-Wise Indoor Survey Palo Alto residents can request a free indoor wate r survey kit that can help conserve water and save money on utility bills. Residents also become educated on opportunities for conservation in their homes, and they can request free tools to improve efficiency. The program is offered in partnership with the Santa Clara Valley Water District. • Free Water-Wise Outdoor Survey Palo Alto residents can schedule a free outdoor survey with a trained irrigation professional. The trained specialist will provide an on-site evaluation of the resident’s irrigation system and provide recommended upgrades and repairs. The program is offered in partnership with the Santa Clara Valley Water District. • Landscape Rebate Program (LRP) The Landscape Rebate Program provides rebates for various irrigation hardware upgrades, including rain sensors, high-efficiency nozzles, dedicated landscape meters, and weather-based irrigation controllers, as well as landscape conversion rebates that encourage residential and commercial customers to replace high-water-use landscaping with low-water-use landscaping. During FY 2016 residents were eligible to receive rebates of $3.00/square foot ($2.00 from SCVWD and $1.00 from CPAU). A new agreement with the SCVWD was signed in early 2017, continuing our partnership in the LRP. Residents are now eligible to receive rebates of $2/square foot of replaced landscaping ($1.00 from SCVWD and $1.00 from CPAU). 21 of 29 FY 2018 Demand Side Management Annual Report Attachment C: Fiscal Year 2018 Demand Side Management Report BUSINESS PROGRAMS • Commercial Advantage Program Business customers are offered rebates for investments in a catalog of energy efficiency products including lighting, motors, HVAC and custom projects that target peak demand and energy reductions. • Commercial and Industrial Energy Efficiency Program (CIEEP) This is the third year that CPAU expanded this program to offer Key Accounts (the largest commercial energy users in Palo Alto) the option of picking one of three engineering consulting firms to assist in helping them evaluate and implement energy efficiency projects. Designed for the large commercial customer, CIEEP offered highly effective building commissioning services using third-party contractors Enovity, Ecology Action and BASE. The contracts will be ending in June 2018, but staff intends to extend them for two additional years. This assistance included reviewing lighting and heating/cooling systems and their operating specif ications. Customers then obtained rebates for replacing chillers, building control systems, linear fluorescent lighting, occupancy sensors, boilers and insulation. • Empower SMB Empower is an ongoing program focusing on energy efficiency savings from retrofits in the small and medium commercial sector, primarily lighting. The program is provided by the third-party administrator Ecology Action which offers a turnkey solution for the implementation of energy efficiency measures. Small and medium business customers can request onsite audits and efficiency rebates on a variety of measures including interior and exterior lighting, lighting controls, vent-hood controls, garage CO2 fan motor controls, and commercial kitchen refrigeration upgrades, as well as customized projects. • Commercial and Industrial Water Efficiency Program CPAU partners with the SCVWD to provide non -residential customers with free landscape irrigation audits, and direct installation of high-efficiency toilets and urinals. Rebates are available for facility process improvements, landscape conversions, irrigation hardware upgrades and weather-based irrigation controllers. • Landscape Survey and Water Budget Program Through SCVWD, the City provides landscape irrigation surveys, water budgets and customized consumption reports for customers with large landscape sites. The service is provided by Waterfluence. The water budget for each landscape site is derived based on the amount of irrigated area, type of plants, type of irrigation syst em and real-time weather monitoring. Monthly reports documenting a site’s irrigation performance are distributed to site managers, landscapers, HOA board members and other relevant parties, as approved by utility account holders. Through a web portal, customers can access site-specific recommendations, verify water budget assumptions and request a free landscape field survey from an irrigation expert. This program has been in place since 2012 and to date there are 1 18 large landscape sites covered under this program. 22 of 29 FY 2018 Demand Side Management Annual Report Attachment C: Fiscal Year 2018 Demand Side Management Report • PaloAltoGreen This highly successful program enabled residents and businesses to pay a small premium for 100% renewable energy. In June 2014, Council terminated PaloAltoGreen for residential customers since the City’s electric supplies are 100% carbon neutral. Commercial customers can still participate in this program by enrolling in the PaloAltoGreen 100% option or by purchasing blocks in 1,000 kWh increments. Participation enables commercial customers to be recognized under the U.S. EPA Green Power Leadership program or to earn Leadership in Energy and Environmental Design (LEED) Green Power credits. • Palo Alto Clean Local Energy Accessible Now (CLEAN) Program Through the CLEAN (Clean Local Energy Accessible Now) program CPAU offers a feed-in tariff, wherein developers of renewable energy generation projects in Palo Alto can receive a long-term purchase agreement for the output of their projects. All the generated electricity is procured to contribute towards fulfilling Palo Alto’s Renewable Portfolio Standard (RPS) requirement. For fiscal year 2018, the prices are 16.5 ¢/kWh fixed for 15, 20 or 25 years for solar renewable energy resources, up to a capacity limit of 3 MW (and 8.8 ¢/kWh for a 15-year contract term, 8.9 ¢/kWh for a 20-year contract term or 9.1 ¢/kWh for a 25-year contract term beyond that limit), and 8.3 ¢/kWh for a 15-year contract term, 8.4 ¢/kWh for a 20-year contract term and 8.5 ¢/kWh for a 25-year contract term for non-solar eligible renewable energy resources. At the end of FY 2018, 2.84MW were reserved of the program’s 3 MW limit. • EV Charger Rebate Program The California Air Resources Board (CARB) developed the Low Carbon Fuel Standard (LCFS) program in compliance with AB 32 (the Global Warming Solutions Act of 2006) to reduce the carbon intensity of transportation fuels used in California 10% by 2020. Elect ric utilities that provide electricity to charge electric vehicles (EVs) are eligible to receive LCFS credits. The City began participating in the program in April 2014 and CARB has been allocating LCFS credits to the City since then. Using these LCFS funds, CPAU launched an EV charger rebate program in FY 2017 to help build out EV infrastructure in anticipation of an increase in the number of EVs in Palo Alto from its current level of 2,500 to between 4,000 and 6,000 EVs by 2020. Staff determined that providing EVSE rebates for underserved segments of the market would be valuable which would include multi-family and mixed-use buildings, schools and non-profits. The LCFS funds are also used for EV education and outreach efforts. PROGRAMS FOR ALL CUSTOMER SEGMENTS • PV Partners CPAU has offered incentives for local solar photovoltaic (PV) installations since 1999, and the City increased the PV rebate budget in 2007 as mandated by CA SB1. Residential rebates were fully reserved in August 2014, and funds for non-residential PV systems were reserved in April 2016. This program is for systems interconnected behind the customer’s electric meter , and customers receive net metering billing as required by SB1. • Solar Water Heating CPAU began to offer rebates to residential and commercial customers that install solar water 23 of 29 FY 2018 Demand Side Management Annual Report Attachment C: Fiscal Year 2018 Demand Side Management Report heating (SWH) systems in 2008. The SWH rebate program was mandated by CA AB 1470 and is administered by the Center for Sustainable Energy, which also administers SWH rebate programs in the San Diego area. AB 797 recently extended the SWH mandate for two additional years. Incentives are limited to solar water heating for domestic use; solar water heating systems for pools, spas, or space heat are not eligible. • Green Building Ordinance In April 2015, City Council approved revisions to the City’s Green Building Ordinance (GBO), which includes the Local Energy Efficiency Reach Code requiring new construction projects to exceed California’s building energy efficiency standards (“2013 Title 24 Standards”) by 15%, i.e. a building’s energy consumption must be 15% more efficient than current building code. The Energy Efficiency Reach Code took effect in September 2015. The new 2016 Title 24 Standards went into effect in January 2017 and the GBO mandates that new buildings be 10% more efficient than the new stricter code. CPAU is coordinating with Development Services to report the energy savings attributed to the Green Building Ordinance. CPAU is currently investigating ways to educate, assist and encourage customers to adopt green building principles and energy efficient systems when planning remodeling or new construction projects. 24 of 29 FY 2018 Demand Side Management Annual Report Attachment C: Fiscal Year 2018 Demand Side Management Report APPENDIX B: FY 2018 ACHIEVEMENTS BY DSM PROGRAM Table B.1: FY 2018 Achievements by Efficiency Program9 Program Electric savings Gas savings Water savings kWh/yr % Therms/yr % CCF/yr % COM-Base 3,477,251 39% 37,538 14% 0 0% COM-Business New Construction 21,169 0% 47 0% 0 0% COM-Com. Advantage 207,043 2% 1,964 1% 0 0% COM-Ecology Action 966,220 11% 60,352 23% 0 0% COM-Enovity 915,222 10% 47,750 18% 0 0% COM-Green Building Ordinance 900,000 10% 2,800 1% 0 0% COM-SCVWD 0 0% 0 0% 0 0% COM-Empower SMB 469,443 5% 1,407 1% 0 0% COM-Building Operator Certification 500,000 6% 7,565 3% 0 0% RES-Green Building Ordinance 200,000 2% 700 0% 0 0% RES-Home Efficiency Genie 52,502 1% 8,674 3% 65 0% RES-Home Energy Report 821,387 9% 74,832 28% 0 0% RES-Home Water Report 0 0% 0 0% 19,091 82% RES-MultiFamilyPlus 329,707 4% 808 0% 0 0% RES-REAP Low Inc 121,162 1% 2,708 1% 0 0% RES-SCVWD 0 0% 4,940 2% 4,053 17% RES-SWH 0 0% 4,960 2% 0 0% RES-HPWH 0 0% 3,342 1% 0 0% RES-Smart Energy 6,941 0% 4,573 2% 0 0% Efficiency Total 8,988,047 100% 264,960 100% 23,209 100% 9 All savings reported in this table are gross amounts. Net savings can be found here: http://ncpasharepointservice20161117100057.azurewebsites.net/api/document?uri=https://ncpapwr.sharepoint.com/site s/publicdocs/Compliance/2019%20EE%20Report_final.pdf 25 of 29 FY 2018 Demand Side Management Annual Report Attachment C: Fiscal Year 2018 Demand Side Management Report Table B.2: FY 2018 Achievements by CPAU’s Solar Programs Program Number of Installations Electricity Gas kW Saved kWh/yr % Saved Therms/yr % PV - Residential 77 449 718,400 30% - - PV - Commercial 8 1,049 1,678,400 70% - - Solar Water Heating - Single Family Residential 0 - - - 0 0% Solar Water Heating - Multi- Family Residential Low-Income 4 - - - 4,960 100% Solar Water Heating - Commercial 0 - - - 0 0% Solar Programs Total 89 1,498 2,396,800 100% 4,960 100% 26 of 29 FY 2018 Demand Side Management Annual Report Attachment C: Fiscal Year 2018 Demand Side Management Report APPENDIX C: HISTORICAL DSM PROGRAM EXPENDITURES The chart below shows expenditures by type from FY 2012 through FY 2018. The Solar Renewables category is the sum of expenditures for solar water heating and PV Partners programs. Figure C.1 DSM Expenditures for Electricity, Gas and Water by Year and Function $0 $2 $4 $6 2012 2013 2014 2015 2016 2017 2018 Millions Fi s c a l Y e a r Electric Efficiency Gas Efficiency Water Efficiency Solar Renewables 27 of 29 FY 2018 Demand Side Management Annual Report Attachment C: Fiscal Year 2018 Demand Side Management Report APPENDIX D: CITY POLICIES/PLANS AND STATE MANDATES IMPACTING DSM PROGRAM GOALS AND IMPLEMENTATION CITY POLICIES/PLANS Title Description Resolution No. 9241 LEAP, the Long-term Electric Acquisition Plan (April 2012) Resolution No. 9322 Carbon Neutral Plan for Electric Supply (March 2013) Resolution No. 9402 Local Solar Plan (April 2014) Staff Report 3706 Program for Emerging Technology (April 2013) Staff Report 2552 GULP, the Gas Utility Long-term Plan (April 2012) Staff Report 6851 2015 Urban Water Management Plan (May 2016) Staff Report 7304 Sustainability and Climate Action Plan (November 2016) Staff Report 7718 Update of Ten-Year Energy Efficiency Goals for 2018 to 2027 (March 2017) FULL LIST OF STAFF REPORTS • CY 2015: cityofpaloalto.org/gov/agendas/city_managers_reports/2015.asp • CY 2016: cityofpaloalto.org/gov/agendas/city_managers_reports/2016.asp • CY 2017: cityofpaloalto.org/gov/agendas/city_managers_reports/2017.asp • CY 2018: cityofpaloalto.org/gov/agendas/city_managers_reports/2018.asp STATE MANDATES AB 797 (2017) Extends existing Solar Water Heating Programs and changes the terminology of “water heating” to “solar thermal.” AB 802 (2015) Requires utilities to maintain records of the energy usage data of all buildings to which they provide service for at least the most recent 12-month period and, upon the request and authorization of the owner (or owner's agent), provide aggregated energy usage data to the owner in the ENERGY STAR Portfolio Manager. AB 1164 (2015) Prohibits cities and counties from enacting or enforcing any ordinance or regulation prohibiting the installation of drought tolerant landscaping, synthetic grass, or artificial turf on residential property. AB 1236 (2015) Obliges cities and counties to adopt an ordinance, with certain specific elements, creating an expedited permitting process for electric vehicle charging stations. For a city the size of Palo Alto, the ordinance must be passed by September 30, 2017. SB 350 (2015) The Clean Energy and Pollution Reduction Act of 2015 sets targets for utilities of 50% renewable electricity retail sales and double the energy efficiency savings in 28 of 29 FY 2018 Demand Side Management Annual Report Attachment C: Fiscal Year 2018 Demand Side Management Report electricity and natural gas, both by 2030. The law grants compliance flexibility for POUs that achieve 50% or more of retail sales from certain large hydroelectric power. AB 2188 (2014) Requires a city and/or county to adopt an ordinance creating an expedited, streamlined permitting process for small residential rooftop solar energy systems. Executive Order Due to continued water shortages, on January 17, 2014, the Governor proclaimed a State of Emergency and directed state officials to take all necessary actions to make water immediately available. Part of the proclamation included a 20 percent water reduction goal. On April 1, 2015, the Governor issued an Executive Order (B-36-15) mandating the State Water Resource Control Board impose restrictions leading to a 25 percent reduction in potable water use through February 28, 2016. SB 1420 (2014) Added a requirement to report on distribution system water loss to the UWMP. SB 73 (2013) The California Clean Energy Jobs Act, an initiative approved by the voters as Proposition 39 at the November 2012 statewide general election, establishes a Job Creation Fund with an annual budget of $550M to create clean energy jobs, including funding energy efficiency projects and renewable energy installations in public schools, universities, and other public facilities. The Job Creation Fund will be funded for four years, beginning in the 2013-2014 fiscal year. AB 2227 (2012) AB 2227 changed the triennial energy efficiency target-setting schedule to a quadrennial schedule, beginning March 15, 2013 and every fourth year thereafter. The last EE goals update was due to be submitted to the California Energy Commission by March 15, 2017. The next EE goals update will need to be submitted by March 15, 2021. AB 2514 (2010) Mandates a local publicly owned electric utility to determine appropriate targets, if any, for the utility to procure viable and cost-effective energy storage systems and to adopt an energy storage system procurement target, if appropriate, to be achieved by the utility by December 31, 2016, and a second target to be achieved by December 31, 2021. SBx7-7 (2009) The Water Conservation Bill of 2009 requires water suppliers to reduce the statewide average per capita daily water consumption by 20% by December 31, 2020. To monitor the progress toward achieving the 20% by 2020 target, the bill also requires urban retail water providers to reduce per capita water consumption 10% by the year 2015. AB 1103 (2007) Requires electric and gas utilities maintain records of the energy consumption data of all nonresidential buildings to which they provide service and that by January 1, 2009, upon authorization of a nonresidential building owner or operator, an electric or gas utility shall upload all of the energy consumption data for the specified building to the EPA Energy Star Portfolio Manager in a manner that preserves the 29 of 29 FY 2018 Demand Side Management Annual Report Attachment C: Fiscal Year 2018 Demand Side Management Report confidentiality of the customer. This statute further requires a nonresidential building owner or operator disclose Energy Star Portfolio Manager benchmarking data and ratings, for the most recent 12-month period, to a prospective buyer, lessee, or lender. Enforcement of the latter requirement began on January 1, 2014. AB 1470 (2007) Solar Water Heating and Efficiency Act of 2007. Requires the governing body of each publicly owned utility providing gas service to retail end-use gas customers, to adopt, implement, and finance a solar water heating system incentive program. SB 1 (2006) The California State Legislature enacted SB 1 to encourage the installation of 3,000 megawatts (MW) of photovoltaic (PV) solar energy by the year 2017. SB 1 requires all publicly owned utilities to adopt, finance and implement a solar initiative program for the purpose of investing in and encourage the increased installation of residential and commercial solar energy systems. CPAU’s share of the state goal is 6.5 MW. In 2007, CPAU increased the PV Partners program funding to meet SB1 requirements. CPAU has fully reserved all rebate funds as of April 2016. AB 2021 (2006) Requires the CEC on or before November 1, 2007, and every 3 years thereafter, in consultation with the commission and local publicly owned electric utilities, to develop a statewide estimate of all potentially achievable cost-effective electricity and natural gas efficiency savings and establish statewide annual targets for energy efficiency savings and demand reduction over 10 years. AB 1881 (2006) Requires cities and counties to implement a Water Efficient Landscape Ordinance which is “at least as effective as” the Department of Water Resources (DWR) Model Ordinance in reducing landscape water use. Requirements include enforcing water budgets, planting and irrigation system specifications to meet efficiency criteria. SB 1037 (2005) Requires each local publicly owned electric utility, in procuring energy, to first acquire all available energy efficiency and demand reduction resources that are cost- effective, reliable, and feasible. Also requires each local publicly owned electric utility to report annually to its customers and to the (CEC) its investment on energy efficiency and demand reduction programs. AB 1890 (1996) Requires electric utilities to fund low-income ratepayer assistance programs, public purpose programs for public goods research, development and demonstration, demand- side management and renewable electric generation technologies AB 797 (1983) The Urban Water Management Planning Act (AB 797) requires all California urban water retailers supplying more than 3,000 acre feet per year or providing water to more than 3,000 customers to develop an UWMP. The plan is required to be updated every five years and submitted to the Department of Water Resources before December 31 on years ending in 5 and 0. Year-end 2018 Palo Alto Residential Customer Oversample March, 2019 1 Attachment D Topic Page Objectives & Methodology 3 Summary and Key Takeaways 8 Overall Satisfaction and Image 19 Price Satisfaction 26 Customer Service 30 Communication 35 Customer Segments 39 Customer Priorities & Programs 46 Genie Program 53 The Work-at-Home’s 61 Sample Demographics and Classification 66 2 Table of Contents 3 OBJECTIVES & METHODOLOGY Study Objectives ✓Update performance metrics: overall satisfaction and individual elements including trust, price, image, customer service and communication effectiveness. ✓Trend CPAU Autumn 2018 ratings against most recent previous CPAU oversample reading done Autumn 2016. ✓Track CPAU 2018 performance against statewide Muni and IOU scores. ✓Gauge CPAU residential customers’ opinions about emerging subject-areas of interest: •Targeted energy and water management services •Genie program ✓Begin to develop CPAU customer segments to understand if and how they can be used to explain opinions and offer insights in dry-running prospective program acceptance. 4 0 CITY OF PALO ALTO UTILITIES Methodology CPAU ‘18 Residential Oversample •Total of 472 interviews conducted: •422 online interviews between Oct. 5 –25, 2018 •50 telephone interviews conducted September 27-28, 2018 •48 Genie Home Efficiency Program participants, done online •CPAU identified as the sponsor; respondents promised confidentiality and anonymity •Average length = 10 minutes online and 15 minutes on the telephone Most Recent Previous CPAU survey •November,2016 •242 online interviews completed CMUA ‘18 Statewide Residential Survey •1702 online interviews •Conducted May/June, 2018 •Represented Muni and IOU customers throughout California 5 Methodology and Sampling Notes Online and Phone Survey Sampling •Two survey methodologies –online and phone –were utilized in this research project to obtain the most accurate representation of CPAU customers possible. •A key difference in conducting surveys over the phone vs. online is that responses to a phone survey are likely to be more positive than those to an email survey. This has been attributed to an underlying desire of respondents to please interviewers –a condition that is not present when responding to an online survey. •Additionally, in today’s environment, it has become increasingly difficult to conduct market research via phone due to a lack of home phone and/or the likelihood that the phone goes unanswered simply due to the spike in unwanted calls. 6 Methodology and Sampling Notes Sample Representativeness •Market Researchers continually make efforts to ensure that the final sample accurately represents the population under study. •A key component of “representativeness” can be impacted by varying response rates among different groups of respondents. In survey research typical response biases that may occur include lower response rates from males, lower income, younger people or those with lower education levels. •Reviewing “known and accepted” population characteristics from an authoritative source, such as the Census, in comparison with the characteristics generated from the sample generated from the survey, can help to ensure the sample is representative of the broader population. •In this study, the type of comparison described above found renters were underrepresented. To adjust for this, statistical weighting was applied based on census data.* RKS believes this weighting resulted in more accurately representing the City of Palo Alto Utilities customer base. •RKS believes that weighting across multiple demographic dimensions was not necessary in this case since weighting on the rent/own dimension worked very well to match demographics to census. •Introducing additional weighting could more likely introduce more bias than it was correcting. 7* See Sample Demographics and Classification for all demographics before and after weighting as well as census data that was utilized. 8 SUMMARY & KEY TAKEAWAYS Summary •CPAU maintains strong satisfaction and reliability scores from 2016; but CPAU’s image related to putting the customer first shows declines. •As a positive, overall satisfaction with CPAU in 2018 maintains the high levels recorded earlier, at 76%* -20 percent points higher than Munis statewide. •Reliability is also strong with excellent ratings nearly universal (92%**) –again well above statewide Munis. •Six in ten acknowledge that CPAU has major concern for the environment –a slight decline from 2016. CPAU does not perform as well on other image dimensions: –Just 34%*** believe that CPAU stays ahead of customer wants and needs –And, there is a major decline recorded--from 43% to 30%--of those who believe that CPAU keeps customers’ best interest at the forefront when establishing policies and making decisions. •Just under half of CPAU customers believe the community realizes a great benefit from having its own municipal utility. •Addressing the strongly held perception that CPAU does not keep customers’ best interests in view when making decisions and establishing policies is a new wrinkle, but one to watch. 9 Customer Satisfaction * This is the corrected number for CPAU, raw number for CPAU is 77%. ** This is the corrected number for CPAU, raw number for CPAU is 91% ***This is the corrected number for CPAU, raw number for CPAU is 36% Summary (Cont’d) •Price satisfaction and with other price dimensions have declined. •Currently, just 36%* report high satisfaction with price –comparable to Muni’s statewide but a decline from CPAU’s 2016 reading. •Further, just 31%** believe CPAU is working hard to keep prices competitive; this is under the 41% rating of Muni’s statewide. •CPAU does somewhat better on providing money saving energy conservation recommendations. Half agree that CPAU is doing an excellent job of this. •Homeowners are more likely than renters to believe that CPAU is working hard to keep prices competitive and provide them with money saving energy recommendations. Obtaining price satisfaction among CPAU customers is extremely challenging in light of the fact that many customers likely forget that their bill covers six services. Still, this is a weakness found in CPAU’s 2018 Customer Satisfaction Survey. 10 Price Satisfaction * This is the corrected number for CPAU, raw number for CPAU is 38%. ** This is the corrected number for CPAU, raw number for CPAU is 34% Summary (Cont’d) •For those customers contacting CPAU customer service, the experience is a positive touchpoint. •Contact with customer service is fairly consistent with about half contacting customer service. Customers continue to call on the phone as their main means of contact. •Satisfaction with their most recent contact shows slow, steady improvement and in 2018 is strong--standing at 77%* reporting excellent customer service. •CPAU also performs well in comparison to “top notch” customer service providers. 38% say CPAU is better than other top notch service providers, and 32% say it is the same adding to 70%** calling CPAU better or the same. •Customer service never gets easier, and with an audience as demanding as Palo Alto residents, the continued strength of these scores is noteworthy. CPAU’s performance in customer service is apparently following a successful formula. 11 Customer Service * This is the corrected number for CPAU, raw number for CPAU is 377. ** This is the corrected number for CPAU, raw number for CPAU is 70% Summary (Cont’d) Although information from CPAU is rated clear and understandable, it is not always relevant or useful to customers. •While most customers agree that information received from CPAU is clear and easy to understand just half find it relevant or useful. –Communications appear to be geared toward homeowners as this group is more likely than renters to call the information relevant and useful. This also means that renters—about four in ten of the CPAU customer base —seem “left out” of CPAU communications. •Most preferred formats for customers include: –CPAU website –Email newsletters –Bill insert •Secondary formats some customers would like include: –Local newspapers –Next Door app –Workshops in neighborhood –Direct mailing Continue to provide customers with relevant, useful information via the format they prefer. Also, delve into content renters want to see, and how they want to see it.12 Communication Summary (Cont’d) •Self-Identified segments provide a tool to understand important groups within the customer base and how to communicate effectively to customers on the topics and via the media they prefer. •Cost Conscious customers (26%) are a lower income group. They are more likely to feel CPAU should focus on decreasing rates. •Environmentally Focused customers (25%) are a positive group. They have high price satisfaction, see a benefit to CPAU being a municipal utility, and like CPAU environmental efforts and programs. •Technology Focused customers (19%) are not overly positive toward CPAU but do not downgrade on price. Their priority is reliability. •Convenience Focused customers (16%) are a satisfied group that regards CPAU communication as easy to understand. •Quality Focused customers (11%) do not view CPAU positively on price dimensions but do report that CPAU keeps customers’ best interest in mind. Utilize statistical techniques to refine customer segments to target communications to ensure relevance and usefulness to customers. 13 Customer Segments Summary (Cont’d) Utility prices is top customer priority and EE programs are valued as well. •Customers’ top priority for CPAU is to maintain lower rates. Secondarily customers mention maintaining a greener electricity supply. •There is substantial interest in CPAU-controlled Smart Energy Systems –4 in 10 report being open to the idea of this program. •Awareness of EE Rebates and Home Audits are highest of the EE programs. Customers are least aware of more specialized programs such as the free retrofit programs. –Experience with EE programs is positive and many are likely to recommend them. •Nearly four in ten are likely to agree that the city's utility department offers services that can help them meet their water and energy management goals. –Items customers volunteer that could provide additional help to them include real time meter reading or smart meters, improvements to website and payment process and an openness to gray water programs. •Homeowners appear to gain more benefit from EE programs and believe that the city is helping them meet their water and energy management goals. CPAU does not perform well on customers’ top priority, maintain lower rates. In fact, CPAU’s performance has declined since the most recent reading on this dimension. 14 Customer Programs Summary (Cont’d) The Genie program is well received among those who participate in the House Call Program. The program is generating a very loyal group of supporters. •Among those who participated in the House Call, nearly all report being completely satisfied. All participants report it is very easy to participate in the program. •The program is generating promoters --an NPS of 90. –These participants are likely older home owners and are very positive toward CPAU and its programs. Continue to expand awareness of the Genie program to grow this loyal customer group. 15 Home Efficiency Genie Summary (Cont’d) Working from home in some form is fairly widespread. •Two-thirds of customers do some type of work from home or have set aside space in their home for personal business. •One-third of customers work from home for an employer and do so about 11 days in a month. •Although just 13% of customers run a home-based business, this group has some positive impressions of CPAU. –They are more likely to believe CPAU keeps customers’ best interests at the forefront when making decisions, and provides energy saving recommendations. Further, they are likely to recommend EE programs. Given the widespread nature of the work-at-home’s, CPAU should dig deeper to understand their unique needs which are likely to be different from other residential customers. 16 Work-at-Home’s Key Takeaways 1.CPAU enjoys continued high satisfaction overall as well as on the important dimensions of reliability and customer service. 2.Measures of price satisfaction have declined;results suggest this drop reflects Palo Alto residential customers’ expressed concerns about CPAU’s commitment to customers: Only minorities of customers give CPAU high marks on •“Staying ahead of customers’ wants and needs”, and •“Keeping customers’ best interests at the forefront when CPAU makes decisions and establishes policies.” 3.The Genie program is a winner.RKS suggests CPAU learn the lessons underlying the Genie program’s success and build them in to other programs. 17 Key Takeaways (Cont’d) 4.The effort to develop customer segments is off to a good start. However to maximize the effectiveness of these efforts, RKS strongly recommends that CPAU commission a more rigorous, statistically-based “segmentation” project. 5. Address the consistent Owner-Renter divide. Virtually every question in the survey finds owners offering higher ratings of CPAU than renters. 18 19 OVERALL SATISFACTION AND IMAGE •About three-quarters of residential customers are very satisfied with CPAU –a strong showing that has remained consistent over time. •CPAU outscores statewide averages by a wide margin. “Top 3 Box” = 8, 9, 10 on 0 = Very Dissatisfied to 10 = Very Satisfied scale. Base is all customers. (CS-1) Raw CPAU 2018=77%, 2016=77%. Overall Satisfaction–Strong and Stable 20 76%77% CPAU 2018 2016 “Very Satisfied” with CPAU on Overall Basis 57%61% Muni IOU ‘18 Statewide Averages CPAU Reliability—Almost All Customers Express “Excellent” Ratings Percentages are top 3-box ratings on the 0 = Poor to 10 = Excellent scale. Base is all customers. (PD-1) Raw CPAU 2018=91%, 2016=89%. •Nine in ten rate CPAU reliability as excellent, about the same showing as 2016. •CPAU 2018 reliability scores are 20 points above the statewide muni average. 21 Rate CPAU “Excellent” on Providing Reliable Service 92%90% CPAU 2018 2016 71%77% Muni IOU ‘18 Statewide Averages •CPAU customers’ rating of their utility’s concern for the environment is high but slightly lower than 2016. •CPAU’s score is 20 points higher than the muni statewide average. “Top 3 Box” = 8, 9, 10 on 0 = Poor to 10 = Excellent scale. Base is all customers. (IM-1a) Raw CPAU 2018=66%, 2016=71%. CPAU’s Concern for the Environment : 6 in 10 Rate it Excellent 22 61% 69% CPAU 2018 2016 Rating CPAU “Excellent” on Concern for the Environment 42%44% Muni IOU ‘18 Statewide Averages Homeowners (71% “excellent”)are much more likely than renters (49%) to award CPAU high scores on concern for the environment. •CPAU levels on this dimension are just below that of statewide averages at 34% vs. 42% for Munis statewide. “Top 3 Box” = 8, 9, 10 on 0 = Poor to 10 = Excellent scale. Base is all customers. (IM-1d) Raw CPAU 2018=36%. A Third Rate CPAU Excellent on Staying Ahead of Customer Needs 23 34% CPAU 2018 CPAU Stays Ahead of Customers’ Wants and Needs 42%43% Muni IOU ‘18 Statewide Averages •Under a third (30%) of CPAU customers rate their utility excellent on keeping customers in mind when making decisions and policies. •These results represent an 12 point decline from 2016. “Top 3 Box” = 8, 9, 10 on 0 = Poor to 10 = Excellent scale. Base is all customers. (IM-1e) Raw CPAU 2018=32%, 2016=43%. Low Level of Customer Ratings on “Keeps Customers’ Interest at Forefront” 24 30% 42% CPAU 2018 2016 Keeps Customers’ Best Interest at the Forefront When Palo Alto Utilities Makes Decisions and Establishes Policies Homeowners (34% “excellent”) award slightly higher scores than renters (26%) The Muni Advantage –Fewer Than Half Believe There is Great Benefit Percentages are top 3-box ratings on the 0 = No Benefit to 10 = Great Benefit scale. Base is all customers. (M-1) Raw CPAU 2018=50%, 2016 56%. •44% of CPAU customers believe there is great benefit from having a municipally owned utility. This represents a decline from past waves; and, CPAU customers beliefs are 8 points higher than Muni’s statewide. 25 Benefit of CPAU as a Municipally Owned Utility 44% 53% CPAU 2018 2016 36%39% 2018 2016 ‘18 Statewide Muni Average Homeowners (56%) are much more likely than renters (31%) to see a great benefit from having a municipal utility. 22% Not Sure 21% Not Sure 34% Not Sure 31% Not Sure 26 PRICE SATISFACTION Satisfaction with Price CPAU Charges Declines Percentages are top 3-box ratings on the 0 = Poor to 10 = Excellent scale. Base is all customers. (PV-1) Raw CPAU 2018=38%, 2016=44%. •Satisfaction with price paid for electricity declined in 2018 among CPAU residential customers --from 42% to 36%. CPAU’s 2018 score is in line with statewide levels. •But it should be emphasized that viewing CPAU price satisfaction against statewide is really not comparable: CPAU’s bill covers six services; the statewide muni average covers one or in some cases two services. •Even so, the decline in CPAU scores is noteworthy, and as will be shown below, likely points to a larger challenge. 27 Very Satisfied with Price Paid for Electricity 36% 42% CPAU 2018 2016 37%39% Muni IOU ‘18 Statewide Averages •Just below one-third (31%) report that CPAU is working hard to keep electric prices competitive --down from 38% in 2016. •CPAU’s score on this dimension is a notable ten points below the statewide average. “Top 3 Box” = 8, 9, 10 on 0 = Poor to 10 = Excellent scale. Base is all customers. (IM-1c) Raw CPAU 2018=34%, 2016= 40%. Perceptions That CPAU is Keeping Prices Competitive is Declining 28 31% 38% CPAU 2018 2016 CPAU Works Hard to Keep Your Electric Prices Competitive 41%40% Muni IOU ‘18 Statewide Averages Homeowners (38% excellent) give higher marks to CPAU for keeping prices competitive than renters (22% excellent). •CPAU 2018 scores are similar to 2016 and statewide averages. “Top 3 Box” = 8, 9, 10 on 0 = Poor d to 10 = Excellent scale. Base is all customers. (IM-1b) Raw CPAU 2018=50%, 2016= 51%. Half Award CPAU High Marks on Providing Practical Energy Conservation Recommendations 29 48%49% CPAU 2018 2016 CPAU Saves You Money with Practical Energy Conservation Recommendations 45%49% Muni IOU ‘18 Statewide Averages Homeowners’ score (53% excellent) rate CPAU higher on this dimension than renters (42% excellent). CUSTOMER SERVICE 30 Base is all customers. (C-1) Raw CPAU 2018 Yes=49%, 2016 Yes=56%. Half of Customers Report Contacting CPAU Customer Service 31 •A similar number of customers contacted CPAU customer service in 2018 than in 2016. 50% 50% No/Not Sure Yes Have Contacted Utility Customer Service in Past Year 2018 46% 54% 2016 50% 50% ‘18 Statewide Average 40% 60% No Yes IOU Muni Base is all customers. (C-1) Multiple responses permitted. Most Contact With CPAU Customer Service Continues to be via Phone 32 44% 5% 14% 50% 46% 5% 16% 8% 46% Called Visited Emailed Written Did not contact 2018 2016 •This has remained fairly consistent over time. Methods Contacted in Past Year Homeowners (40%) are less likely to have called CPAU compared to renters ( 48%). Homeowners are more likely to contact CPAU via email (17%) than renters (11%) Satisfaction with Customer Service is Steadily Growing Percentages are top 3-box ratings on the 0 = Poor to 10 = Excellent scale. Base is all customers. (C-2a) Raw CPAU 2018=77%, 2016=72%. •Satisfaction with CPAU customer service has grown over time so that in 2018, three fourths are “very satisfied”. •2018’s ratings find satisfaction with CPAU customer service standing at more than 20 points above the statewide muni average. 33 Very Satisfied with Customer Service at Most Recent Contact 77%72% CPAU 2018 2016 53% 60% Muni IOU ‘18 Statewide Averages Home- owners and renters offer similar ratings •38% of customers who contacted CPAU customer service, say the service provided is “better” than customer service received from other “top notch” customer service providers. •Among the statewide average, the comparable number is 28%. Base customers who contacted customer service in the past year. (C-2b) Raw CPAU 2018 Better/Same = 70%. CPAU Customer Service Compares Very Favorably With Other Top notch Providers 34 38% 28%28%32% 39%40% 9%9%6% CPAU 2018 Muni 2018 IOU 2018 Better Same Worse CPAU Performance Compared to “Top Notch” Service Providers -Among Those Contacted Customer Service in Past Year - 67%68% 24% Not sure/Depends 26% Not sure/Depends 70% 21% Not sure/ Depends Customer Service is: 35 COMMUNICATION Rating Information from CPAU Percentages are top 3-box ratings on the 0 = Poor to 10 = Excellent scale Base is customers. (COM-1) CPAU Raw Clear and Easy to Understand 2018 = 70%, 2016 = 69% Covering Subjects You are Interested In 2018 = 53%, 2016=52% Usefulness 2018 =54%.36 Ratings of CPAU Communication 69% 69% 50% 58% 2018 2016 2018 Muni 2018 IOU •Seven in ten report the information received from CPAU is clear and easy to understand; half call the information received of interest and useful. CPAU 51% 50% 43% 43% 51% 49% 52% Clear and Easy to Understand Covering Subjects You are Interested In Usefulness Homeowners award higher marks on interesting (56%) and usefulness (57%) than renters (43% and 43% respectively) •79% of CPAU customers report the frequency is just right; just 13% report the frequency is too frequent. •There is virtually no complaint that the communications are not frequent enough. Base is all customers. (COM-2) Raw CPAU 2018 Too frequent=13% About right = 80% Not frequent enough=2%. High Majorities Say CPAU Communicates at the Right Frequency 37 13%17%16% 79% 71% 78% 2% 10%5% CPAU 2018 Muni 2018 IOU 2018 Too Frequent About Right Not Frequent Enough CPAU Communications Frequency Communications is: Greatest Interest in Information in Website, Email, Bill Insert Base is customers (COM-3) •About three quarters want to go to the CPAU website or receive information in an email newsletter or an insert in their bill. Some customers are also open to information in newspapers, NextDoor, workshops or direct mailing. 38 Preference in Format of Communications 76% 70% 69% 42% 42% 38% 32% 19% 17% 14% 13% 22% 26% 29% 55% 53% 57% 66% 79% 80% 82% 84% CPAU website Email newsletter Insert in bill Local newspapers NextDoor app Workshop in your neighborhood Direct mailing separate from your bill Social media Regional newspapers In-person visit Phone call Very/Somewhat Interested Not Interested Homeowners’ preferences: local or regional newspapers (52%,23%), bill inserts (76%), Next Door app (50%), and neighborhood workshops (48%). 39 SELF-DEFINED CUSTOMER SEGMENTS Base is all customers. (CSG-1) Data for CA from ESource. Biggest Self-Defined Customer Segments: Cost Conscious, Environmentally Focused 40 26% 25% 19% 16% 11% Cost Conscious Environmentally Focused Technology Focused Convenience Focused Quality Focused •Half of CPAU customers report they describe their household as Cost Conscious or Environmentally Focused. •This self-assignment is substantially different than that of California overall where more describe their household as Cost Conscious. Household Descriptor A very positive group –Sees benefit of Muni and satisfied with price. Strong imagery for CPAU. This lower income group feels CPAU should focus on maintaining lower rates. Not a particularly positive group but not critical on price. Priority is reliability and open to smart energy devices. This higher income group feels information from CPAU is easy to understand. Although less satisfied with price, they do feel CPAU keeps customer best interest in mind. 42% 15% 9% 20% 15% Segment Profiles –Satisfaction and Image 41 Technology Focused Environmentally Focused Convenience Focused Quality Focused Cost Focused Lower Satisfaction CPAU has less concern for environment CPAU has more concern for environment CPAU has less concern for environment CPAU less likely to save money with energy saving recommendations CPAU is working to keep price competitive CPAU not working to keep price competitive CPAU not staying ahead of customer wants/needs CPAU is keeping customer best interests in mind CPAU not keeping customer best interests in mind Higher price satisfaction Higher price satisfaction Lower price satisfaction Lower price satisfaction Segment Profiles -Communication 42 Technology Focused Environmentally Focused Convenience Focused Quality Focused Cost Focused See greater benefit to community with Municipal Utility See less benefit to community with Municipal Utility CPAU provides information of interest CPAU provides useful information Information is clear and easy to understand Information is not clear and easy to understand Do not want info in bill insert or Next Door Want information in local newspapers Do not want info in Next Door Do not want information in in- person visit or workshops Interested in In- person visit or workshop in neighborhood Do not want information in in- person visit or workshops Interested in workshop in neighborhood Segment Profiles -Priorities 43 Technology Focused Environmentally Focused Convenience Focused Quality Focused Cost Focused CPAU Priorities Maintain greener electricity supply Lower priority to maintain greener electricity supply Lower priority to maintain greener electricity supply Lower priority to maintain greener electricity supply Maintain lower rates Provide higher reliability Provide higher reliability Provide higher reliability More innovative programs More innovative programs Open to Smart Energy Device for Credit Segment Profiles –EE Programs 44 Technology Focused Environmentally Focused Convenience Focused Quality Focused Cost Focused Programs Interested In Home Audit Energy Efficiency Rebate Water Conservation Rebate Utility Workshop Likely to Recommend EE Programs Likely to Recommend EE Programs Agree that City can help them to meet their water and energy management goals Participated in Genie Home Efficiency Advisor Segment Profiles -Demographics 45 Technology Focused Environmentally Focused Convenience Focused Quality Focused Cost Focused Younger (Average age: 45) Older (Average age: 56) Own their home Single family home Larger households (Average 3 members) Higher incomes (Average: $240,780) Higher incomes (Average:$195,530) Higher incomes (Average: $202,310) Lower incomes (Average: $157,850) Work from home for an employer 46 CUSTOMER PRIORITIES & PROGRAMS CPAU Customers’ Self-Described First Priority: Maintain Lower Rates Base is customers (CSG-2) •Second in importance is maintaining green electricity supply. Of lower importance to customers are ensuring resiliency in case of emergency and increasing reliability. 47 Customers Express Their Utility Priorities for CPAU 47% 25% 8% 8% 4% 4% 3% 2% 21% 21% 17% 15% 8% 7% 5% 6% 12% 17% 19% 17% 11% 10% 8% 7% Maintain lower rates Maintain greener electricity supply Provide higher reliability Be more resilient in case of an emergency Provide more innovative programs Be more locally accountable Be safer Have better low income programs 1st Most Important 2nd Most Important 3rd Most Important Renters (52%) are more likely to express “maintaining lower rates” as first priority than homeowners (43%). Owner and renter opinions are very similar on “maintaining a greener electricity supply”. Utility Controlled Smart Energy System –About Four in Ten Express Interest Base is all customers. (CSG-3) •But about half need to know more before they indicate their interest. 48 Openness to Smart Energy Systems 39% 49% 12% Would not be interested I'd need to know more Open if fully automated •More satisfied with their last customer service contact •CPAU priority should be greener electricity supply •Feel city does offer services that help meet home energy efficiency and water management goals •Want communications through: •CPAU website •Email newsletter •Next Door app •Utility workshops •Slightly younger (49), in single family homes, higher incomes ($215,100) •Have a home office, work from home or have a home- based business •Information comes too frequently •But would like it as an bill insert •Regard their family as Convenience Focused •Less likely to feel city helps meet water and energy management goals •Older (58), lower incomes ($166,300) Group Profiles 24% 29% 32% 15%Don't trust utility/would not participate I'd need to know more Open if utility let me decide when to participate Open if fully automated Palo Alto residents more open to fully automated demand response than other Californians Base is all customers. (CSG-3) California data from ESource. ESource asked among those with or interested in battery storage and different response choices . •39% of Palo Alto residents are open if fully automated , which is 62% higher than the 24% of Californians as a whole. 49 Palo Alto Residents’ Openness to Smart Energy Systems 39% 49% 12% Would not be interested I'd need to know more Open if fully automated Californian’s State- wide Average Most Popular Programs: EE Rebates and Home Audits Base is customers (CP-1) •Slightly fewer aware or used Water Conservation Rebates. 50 Usage and Awareness of Customer Programs 15% 14% 10% 5% 2% 2% 1% 1% 0% 47% 42% 37% 39% 36% 29% 34% 10% 8% 33% 38% 46% 48% 55% 62% 57% 78% 81% Energy Efficiency Product Rebates Consulting Home Audits Water Conservation Rebates or Audits Utility Workshops Solar PV Group Buy Heat Pump Water Heater Rebate Solar Hot Water Heater Rebate Free Low Income Retrofits Free Multifamily Building Retrofits Used Heard of Never heard of Homeowners generally more likely aware and have used any program compared to renters. Among Users, Many Likely to Recommend CPAU EE and Water Management Services Percentage is top 3-box ratings on the 0 = Not Likely to 10 = Very Likely scale. Base is customers who have used one or more energy efficiency and water management services (CP-2) •Experience with services is positive and encourages customers to recommend the services. 51 Likelihood to Recommend Energy and Efficiency and Water Management Services -Among Those Using Any Service - 39%24%25% Promoter (9,10)Passive (8,7)Detractor (6-0) Net Promoter Score = 14 12% Not Sure Just Less Than 4 in 10 Believe CPAU Services Meet Their Goals Percentages are top 3-box ratings on the 0 = Strongly Disagree to 10 = Strongly Agree scale. Base is all customers. (CP-3, CP-4) •There are a wide variety of suggestions from customers to help meet their energy efficiency and water management goals. 52 Agreement with Statement: “The City’s Utility Department offers Services that can help me meet my home energy efficiency and water management goals.” 38% Most of the programs seem to assume home ownership… It'd be nice to see more programs aimed at renters and people who don't have a lot of disposable income. Online real time meter reading for electrical, gas and water. You can only manage what you measure: once a month is not sufficient! I would like the power lines and utility lines overhead to be put underground. Better website. 1) Start accepting Amex. 2) Allow me to store my credit card, it's inconvenient to re-enter the info every month. There are plenty of services I had no idea about promoting and executing the existing programs would be a great start Be open to gray water recycling systems, which are currently forbidden by the city. (Volunteered) Ways CPAU Can Help Homeowners (44%) are more likely to agree than renters (31%). 53 GENIE PROGRAM Base is all customers. (PO-1) Nearly 3 in 10 Recall Participating in the Genie Program 54 76% 24% No Yes Recall Participation in Home Efficiency Genie Program CPAU Customers All customers (100%) from the Genie participant list recalled participating in the Genie program. There did appear to be some confusion among customers in the General Population sample who said they participated in the Genie program. Customers who indicated confusion were eliminated from this separate analysis of the Genie program. Genie House Call Participants are Overwhelmingly Satisfied Percentages are top 3-box ratings on the 0 = Very Dissatisfied to 10 = Very Satisfied scale. Base is those who recall Genie Participation. (PO-2) . 55 Very Satisfied with Genie Home Efficiency Program 94% Genie House Call Participants Genie participants from the list CPAU provided –are labelled here as “house call participants” and are overwhelmingly satisfied. Genie participants that turned up in the general population sample—labelled “Genie call in”--expressed less satisfaction (42% very satisfied). All Participating in the House Call Agree it Was Very Easy Percentages are top 3-box ratings on the 0 = Very Difficult to 10 = Very Easy scale. Base is those who recall Genie Participation. (PO-3) 56 Very Easy to Participate Genie Home Efficiency Program 100% Genie House Call Participants While Genie House Call participants unanimously agree that participation is very easy, among Genie Call In participants, 63% call participation “very easy”. Genie House Call Participants are Strong Promoters of the Program Percentage is top 3-box ratings on the 0 = Not Likely to 10 = Very Likely scale. Base is all customers. (PO-4) 57 Likelihood to Recommend Home Efficiency Genie Program 90%10% 0% Genie House Call Participants Promoter (9,10)Passive (8,7)Detractor (6-0) Net Promoter Score 90 Genie Call In participants show an NPS of-4: 31% promoter and 35% detractor. Those Receiving a Genie House Call Say it is Easy to Follow-Through on the Recommendations Percentages are top 3-box ratings on the 0 = Very Hard to Act Upon to 10 = Very Easy to Act Upon scale. Base is those who recall Genie Participation. (PO-5) 58 Very Easy to Act Upon Genie Home Efficiency Program Recommendations 84% Genie House Call Participants Among Genie Call In participants, 26% say it is very easy to act upon Genie recommendations Genie House Call Participants’ Profile –Carries Over into Other CPAU Ratings 59 Genie House Call Participants •Higher Overall Satisfaction with CPAU •Higher ratings on all image dimensions •High satisfaction with price •See greater benefit to community from Muni •Information is topics interested in and useful •See their household as Environmentally Conscious •CPAU priority should be maintaining greener energy supply •Have used Energy Efficiency Product Rebates, Water Conservation Rebates, Utility Workshops and more likely aware of EE programs •Would recommend energy efficiency programs •Give high marks to city ability to help them meet water and energy management goals •Have personal office space or home- based business •Although, Genie House Call participants rate CPAU as equally reliable as customers overall. Genie House Call Participants •Local papers •Regional papers •Insert in bill •Next Door app •In-person visit •Workshop in neighborhood •Genie House Call participants are interested in receiving communications by a variety of means. Profile made by a comparison to Total CPAU Customers. CPAU 2018 Genie House Call %% Type of Home Single Family 67 98 Duplex/Triplex 7 0 Condo/Townhouse 7 2 Apartment 16 0 # People in Home One 18 8 Two 36 58 Three to Four 34 21 Five or more 7 10 Age 18-34 16 0 35-54 35 12 55-64 19 25 65 and Over 26 58 Mean 51 64 Demographic Profile – Genie House-Call Participants 60 CPAU 2018 Genie House Call %% Home Ownership Own 53 97 Rent 43 0 Income Under $60,000 7 6 $60,000 -$100,000 11 6 $100,001 -$150,000 11 8 $150,001 -$250,000 16 27 More than $250,000 28 12 Mean $195,060 $182,410 Education High school graduate or less 1 0 Some college 5 6 Four-year college graduate 31 25 Graduate school or more 59 66 Higher vs. other groups. Lower vs. other groups. •Genie House Call Participants are likely older couples who own their home. 61 THE WORK-AT -HOME’S Base is all customers. (F-7a -F7d) The Work-At -Home’s 62 •Other statewide research has suggested that “Work-at-Home’s” use electricity differently than other residential customers. •This research finds that a net of 66% of CPAU residential customers fall-in to the “work-at-home” definition by doing one or more of the following: •Have space set aside for a home office that is used for personal business such as paying bills, keeping records, paying taxes and the like. •One or more members of the household work at home one or more days a week for an employer headquartered outside of the home. •Run a home based business from the home. Base is all customers. (F7d) Two-thirds of CPAU Customers Fall In to One or More of the “Work-at - Home” Group 63 34% 66% No Yes Do Some Type of Work or Have Space for Work at Home •66% are Work-at-Home’s. Base is all customers. (F-7a -F7d) The Home is found to be a Site for Personal Work and/or for an external Job 64 •Palo Alto residents work from home for an external employer, an average of 11 days a month 45% 55% No Yes Have Space Set Aside for Home Office for Personal Business Someone Works From Home One or More Days A Week Headquartered Elsewhere 67% 33% Average # Days Per Month Work at Home -11 Likely to be younger, renters and have larger households. Skew older and homeowners. Base is all customers. (F-7a -F7d) Having a Home-Based Business is Another Manifestation of the Work-at-Home’s 65 87% 13% No Yes Have a Home Based Business Those with a home based business view CPAU positively on several dimensions: •Trying to save money with energy saving recommendations •Keeps customer best interest at forefront •Information is clear and easy to understand and covers subject they are interested in •Would recommend EE programs •Skew older. •Although just 13% of the total, these customers are actually earning their livings from businesses located in their homes Sample Demographics & Classification 66 Demographics -2018 67 CPAU 2018 Weighted 2018 Census* % Home Ownership Own 74 53 55 Rent 23 43 45 Income Mean $199,670 Mean $195,060 Mean $207,423 Under $60,000 6 7 Under $50,000 19 $60,000 -$100,000 10 11 $50,000 -$100,000 18 $100,001 -$150,000 10 11 $100,001 -$200,000 25 More than $150,000 44 44 Over $200,000 38 Education High school graduate or less 1 1 Age 25+7 Some college 5 5 8 Four-year college graduate 28 31 33 Graduate school or more 63 60 52 *5 year census average (2013-2017) CPAU 2018 Weighted 2018 Census* % Type of Home Single Family 78 67 63 Duplex/Triplex 4 7 Condo/Townhouse 7 7 Apartment 8 16 Multi-unit 19 30 37 # People in Home 2.7 2.7 2.5 One 15 18 Two 38 36 Three to Four 36 34 Five or more 7 7 Age 18-34 9 16 20-34 22 35-54 32 35 35-54 39 55-64 21 19 55-64 15 65 and Over 33 26 65+25 Mean 55 51 Median 45 42 Demographics -2018 68 *5 year census average (2013-2017) Demographics -2016 69 CPAU 2016 Weighted 2016 Census* % Home Ownership Own 67 54 55 Rent 31 44 45 Income Not Asked Mean $207,423 Under $60,000 Under $50,000 19 $60,000 -$100,000 $50,000 -$100,000 18 $100,001 -$150,000 $100,001 -$200,000 25 More than $150,000 Over $200,000 38 Education High school graduate or less 1 1 Age 25+7 Some college 7 7 8 Four-year college graduate 24 25 33 Graduate school or more 67 64 52 *5 year census average (2013-2017) CPAU 2016 Weighted 2016 Census* % Type of Home Single Family 70 62 63 Duplex/Triplex 4 5 Condo/Townhouse 9 9 Apartment 16 23 Multi-unit 29 37 37 # People in Home Not Asked 2.5 One Two Three to Four Five or more Age 18-34 14 19 20-34 22 35-54 33 34 35-54 39 55-64 19 16 55-64 15 65 and Over 31 27 65+25 Mean 50 Median 45 42 Demographics -2016 70 *5 year census average (2013-2017) Attachment E: 2018 Commercial Customer Satisfaction Survey Results- City of Palo Alto Utilities 2018 Small & Medium Business Survey Results Utility Benchmark Rating Satisfaction Rating Value Rating Utility 1 8.57 8.67 8.46 Utility 2 8.55 8.86 8.39 Utility 3 8.14 8.34 8.20 Utility 4 8.12 8.24 8.05 Utility 5 8.00 8.14 7.89 Utility 6 7.96 8.22 7.85 Utility 7 7.74 7.99 7.63 Benchmark Average 7.73 7.94 7.65 Utility 8 7.56 7.82 7.48 City of Palo Alto Utilities 7.49 7.60 7.47 Utility 10 7.35 7.52 7.16 Utility 11 7.08 7.19 7.03 Utility 12 7.07 7.19 7.16 Utility 13 7.01 7.30 6.97 2018 Large Commercial & Industrial Customers Survey Results Utility Account Representative Benchmark Rating Satisfaction Rating Value Rating Satisfaction Rating Value Rating Utility 1 9.26 9.20 8.84 9.59 9.41 Utility 2 9.16 8.96 8.89 9.47 9.32 Utility 3 9.15 8.96 8.76 9.50 9.37 City of Palo Alto Utilities 9.01 8.94 8.83 9.33 8.92 Utility 5 8.95 8.82 8.56 9.33 9.08 Benchmark Average 8.79 8.70 8.53 9.08 8.85 Utility 6 8.79 8.52 8.41 9.30 8.91 Utility 7 8.73 8.77 8.48 8.96 8.73 Utility 8 8.68 8.79 8.54 8.81 8.58 Utility 9 8.58 8.57 8.31 8.80 8.63 Utility 10 8.57 8.87 8.57 8.52 8.33 Utility 11 8.48 8.78 8.59 8.53 8.02 Utility 12 8.39 8.31 8.35 8.57 8.32 Utility 13 8.06 7.65 7.74 8.58 8.27 Utility 14 7.93 7.63 7.42 8.46 8.22 1 Discussion of Utilities Customer Programs Lena Perkins, PhD Utilities Advisory Commission Meeting October 2, 2019 1 Attachment F 22 Outline: Utility Customer Programs Discussion Outline: 1.Purpose is to provide update & solicit UAC feedback on priorities 2.Overview of Utilities customer programs 3.Request UAC feedback on priorities 4.Progress update on priorities 5.Upcoming programs & how new programs align with priorities 6.Next steps: Return early 2020 with Customer Prog. Work Plan 6 9 % a v e a d V o y i d 33 Overview: Utility Customer Programs Discussion 1.Restricted-use funds for programs 2.Required programs include efficiency & local renewables 3.Added 3 areas since 2015: -Low-Carbon Transportation -Building Decarbonization -Sustainability 4.Some flexibility in how we design & implement these programs 5.We have added CO2 as a prioritization criteria 6.Would like UAC input on prioritization criteria 6 9 % a v e a d V o y i d Customer Programs & Outreach for: Local Renewables Emerging Technologies Community Engagement Efficiency Income-Qualified Assistance Sustainability Building Decarbonization Low-Carbon Transportation What do we do? How do we choose? How are we getting there? Customer Programs & Initiatives Cost - EffectivenessEfficiency Savings Shared Priorities Emissions Impact Income-Qualified Assistance Low-Carbon TransportationInnovationEfficiencyLocal Renewables Community Engagement SustainabilityBuilding Decarbonization Customer Satisfaction Equity Customer & Community Engagement [Strategic Plan #2] Regional Partnerships [Strategic Plan #2] Overview: Work Areas, Evaluation Priorities, and Implementation Approach Leveraging Technology & Analytics [Strategic Plan #3] Request for UAC feedback on priorities below Customer Satisfaction: Provide Great Customer Service a. Use every touchpoint to help Utilities Department become a trusted energy advisor. b. Design programs which enhance customer experience and satisfaction. Equity: Ensure Equitable Service a. Ensure UPS serves the efficiency & educational needs of all major customer segments. b. Target hard-to-reach customers Utilities Department is uniquely positioned to support. c. Support income-qualified customers. Reduce Carbon Emissions: Help our Customers Reduce their Carbon Emissions a. Maximize avoided carbon emissions, with a focus on deep decarbonization. b. Support City’s S/CAP goal of 80% reduction in emissions by 2030. Efficiency Savings: Help our Customers Save Natural Resources a. Deliver cost-effective efficiency savings which maximize CO2 avoided. b. Support City resource efficiency and carbon emission reduction goals. c. Set maximum feasible & cost-effective efficiency targets for building efficiency. Cost-Effectiveness: Provide Maximum Value to Customers a. Maximize cost-effectiveness of all programs and initiatives. 0.9%1.0% 0.8% 0.9% 0.0% 0.5% 1.0% 1.5% 2.0% FY15 FY16 FY17 FY18 % o f A n n u a l R e t a i l S a l e s Electric Savings Achieved Gas Savings Achieved Water Savings Achieved Electric Savings Goal Gas Savings Goal Water Savings Goal •Exceeded new electric efficiency savings goal. •Almost reached new higher natural gas efficiency goal. 2018 Measures will save ~60,000 tCO2 over lifetime of equipment (annual savings below) Progress Update: FY 2018 Efficiency & CO2 Achievements Energy & Water Efficiency Savings: Achievements vs. Goals Annual CO2 Avoided by Programs Since 2015 0 5,000 10,000 15,000 FY15 FY16 FY17 FY18 t C O 2 Av o i d e d CO2 Avoided by Programs Since 2015 Electricity Efficiency Gas Efficiency Heat-Pump Water Heater Rebate PaloAltoGREEN (Commercial Only) Local Solar Progress Update: New programs & how they align with our priorities 1.Income-Qualified Multifamily Furnace Retrofit Using Heat-pumps (Jun‘19) 2.Building Decarbonization Outreach with Climate Corps Fellow (Sep‘19) 3.Internal Customer Management Software (Sep‘19) 4.Refrigerator Recycling Program (Sep‘19) 5.EV Charger Multifamily Concierge (Oct’19) 6.Building Decarbonization Expo (Oct’19) 7.Small & Medium Business Efficiency Concierge (Jan’20) 8.Customer Usage Reports (Jan’20) 9.Online Marketplace (Jan‘20) 10.Support of MyCPAU User Account Launching Cost- Effectiveness Efficiency Savings Emissions Impact Customer Satisfaction Equity New Programs and Tentative Launch Dates Progress Update: Analytics, carbon, transportation, & building decarbonization $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 $8.0 $9.0 $10.0 FY16 FY17 FY18 FY19 FY20 FY21 Annual Expenditures Millions 2016-2021 Actual & Estimated Expenditures Community Engagement Efficiency Income Qualified Local Renewables Low-Carbon Transportation Building Decarbonization Other Sustainability Innovation Soliciting UAC input on priorities below Customer Satisfaction: Provide Great Customer Service a. Use every touchpoint to help Utilities Department become a trusted energy advisor. b. Design programs which enhance customer experience and satisfaction. Equity: Ensure Equitable Service a. Ensure UPS serves the efficiency & educational needs of all major customer segments. b. Target hard-to-reach customers Utilities Department is uniquely positioned to support. c. Support income-qualified customers. Reduce Carbon Emissions: Help our Customers Reduce their Carbon Emissions a. Maximize avoided carbon emissions, with a focus on deep decarbonization. b. Support City’s S/CAP goal of 80% reduction in emissions by 2030. Efficiency Savings: Help our Customers Save Natural Resources a. Deliver cost-effective efficiency savings which maximize CO2 avoided. b. Support City resource efficiency and carbon emission reduction goals. c. Set maximum feasible & cost-effective efficiency targets for building efficiency. Cost-Effectiveness: Provide Maximum Value to Customers a. Maximize cost-effectiveness of all programs and initiatives. 1.Integrate UAC input from this discussion, and 2.Return to UAC early 2020 with final Customer Programs Work Plan Thank you. Questions? Next steps ©RKS Research & Consulting. All rights reserved, 2018. CPAU ‘18 Res Oversample Approval Draft (Online)9-14-18. 4512 CITY OF PALO ALTO UTILITIES 2018 RESIDENTIAL CUSTOMER OVERSAMPLE QUESTIONNAIRE ONLINE VERSION Approval Draft (online) 9-14-18 Quota = 400 (350 online/50 telephone) Study No. 4512 September 2018 We are conducting a customer satisfaction survey for City of PALO ALTO UTILITIES to help them improve their operations and service. This survey takes about 10-15 minutes to complete and is totally confidential and off the record. S-1. Are you the person in your household responsible for utility decisions? o Yes, respondent responsible (CONTINUE) o Joint responsibility (CONTINUE) o No, another person is responsible (TERMINATE) o Not sure/Depends (TERMINATE) o Prefer not to answer (TERMINATE) S-2. Just to verify, what is the name of the utility that delivers electricity to your household and sends you a bill? o City of PALO ALTO UTILITIES (CONTINUE) o Other (Specify) (TERMINATE) o Included in rent (TERMINATE) o Not sure/Refused (TERMINATE) CUSTOMER SATISFACTION CS-1. Thinking about all of the services that PALO ALTO UTILITIES provides to your household [ELECTRICITY, NATURAL GAS, WATER, SEWER], please rate your overall satisfaction at present: Very Dissatisfied Very Satisfied 0 1 2 3 4 5 6 7 8 9 10 Not Sure POWER DELIVERY PD-1. (EVERYONE) Please rate PALO ALTO UTILITIES on providing reliable electric service: Poor Excellent 0 1 2 3 4 5 6 7 8 9 10 Not Sure RKS RESEARCH & CONSULTING 2 4512 ©RKS Research & Consulting. All rights reserved, 2018 Res Oversample Online Approval DRAFT 9-14-18. 4512 QU UTILTY IMAGE IM-1. (EVERYONE) Please rate your utility, PALO ALTO UTILITIES on: Poor Excellent 0 1 2 3 4 5 6 7 8 9 10 Not sure a. Their concern for the environment b. Trying to save you money with practical energy conservation recommendations c. Working hard to keep your electric prices competitive d. Staying ahead of customers’ wants and need e. Keeps customers’ best interests at the forefront when Palo Alto Utilities makes decisions and establishes policies CONTACT AND CUSTOMER SERVICE C-1. Over the past year, by which of the following methods, if any, have you contacted PALO ALTO UTILITIES: (SELECT ALL THAT APPLY) □ Called □ Visited □ Sent e-mail □ Did not contact utility □ Not sure/don’t remember C-2a. (IF “CALLED”, “VISITED”, “SENT EMAIL” IN C-1 – ALL OTHERS SKIP TO PV-1) How satisfied were you with your most recent contact with PALO ALTO UTILITIES? Dissatisfied Very Satisfied 0 1 2 3 4 5 6 7 8 9 10 Not Sure C-2b. Thinking of companies that have provided you with top-notch customer service, how does PALO ALTO UTILITIES’ customer service compare? □ PALO ALTO UTILITIES customer service is better □ PALO ALTO UTILITIES customer service is about the same □ PALO ALTO UTILITIES customer service is worse □ It depends on the reason for contact □ Not sure RKS RESEARCH & CONSULTING 3 4512 ©RKS Research & Consulting. All rights reserved, 2018 Res Oversample Online Approval DRAFT 9-14-18. 4512 QU PRICE/VALUE PV-1. (EVERYONE) How satisfied are you with the price you pay PALO ALTO UTILITIES for all of the utility services they provide: Not satisfied Very satisfied 0 1 2 3 4 5 6 7 8 9 10 Not Sure THE MUNI ADVANTAGE M-1. As you may know, PALO ALTO UTILITIES is a community owned municipal utility. How much benefit does your local area realize by having its own utility? No benefit Great Benefit 0 1 2 3 4 5 6 7 8 9 10 Not Sure COMMUNICATION COM-1. Please rate your satisfaction with PALO ALTO UTILITIES’s communications on: Poor Excellent 0 1 2 3 4 5 6 7 8 9 10 Not sure a . Clear and easy to understand b. Covering subjects you are interested in c. Usefulness COM-2. Please assess whether PALO ALTO UTILITIES communicates too frequently, not frequently enough, or about the right amount: Not frequently enough About right Too frequently 0 1 2 3 4 5 6 7 8 9 10 Not Sure RKS RESEARCH & CONSULTING 4 4512 ©RKS Research & Consulting. All rights reserved, 2018 Res Oversample Online Approval DRAFT 9-14-18. 4512 QU COM-3. Below is a list of ways PALO ALTO UTILITIES may communicate with you. Please indicate for each how interested you would be in receiving communications in that way. Very Interested Somewhat Interested Not Interested Direct mailings separate from your bill Social media such as Facebook, Twitter, or YouTube Local newspapers (e.g. The Palo Alto Weekly) Regional newspapers (e.g. the San Jose Mercury News) The City of Palo Alto Utilities website Email newsletter for those who have enrolled for it An insert in your utility bill NextDoor app Phone call In -person visit Workshop in your neighborhood CUSTOMER SEGMENTATION CSG-1. Which one of the following best describes your household?) (Select only one) o Technology focused o Environmentally focused o Convenience focused o Quality focused o Cost conscious CSG-2a. Palo Alto Utilities strives to provide superior service to customers. One way to do this is to compare itself against other utility providers, even though Palo Alto Utilities does not compete directly. From the list below, please select what you think should be the first most important priority for Palo Alto Utilities. The second most important priority. And the third most important priority. 1st Most Important Priority 2nd Most Important Priority 3rd Most Important Priority Maintain lower rates Maintain greener electricity supply Provide higher reliability Be more resilient in case of an emergency Have better low-income programs Be more locally accountable Be safer Provide more innovative programs RKS RESEARCH & CONSULTING 5 4512 ©RKS Research & Consulting. All rights reserved, 2018 Res Oversample Online Approval DRAFT 9-14-18. 4512 QU CSG-3. From the following technologies, please indicate whether you or someone in your household: currently has it, are planning to acquire in the next year, are planning to acquire within the next three years, or you have no plans to acquire it: Already have it Yes, in the next year Yes, in the next 3 years No plans/ Not sure Rooftop solar photovoltaic (PV) Home battery storage system Electric vehicle or plug-in hybrid vehicle Heat-pump electric water heater Wi-Fi enabled heat-pump electric water heater Space heating and cooling electric heat pump Smart thermostat (remotely controllable) such as a Nest Virtual assistant with a connected home energy management system Smart lighting e.g. Wemo Smart plug or powerstrip Natural gas, diesel, or gasoline backup generator CSG-4. Many utilities are considering offering financial incentives (such as a monthly bill credit) to customers that have smart energy devices systems. These incentive are offered in exchange for allowing the utility to control the smart devices within set parameters to help reduce costs for the entire power system and all customers. As owner of the device, you could override or opt-out this program in real time. If Palo Alto Utilities were to offer this type of program, which one of the following describes your most likely action? (SELECT ONE RESPONSE) o I’d be open to this option if it were fully automated (happened without requiring me to decide if I want to participate each time) and I didn’t have to change the way I use electricity on a daily basis. o I’d need to know more to make a decision. o I would not be interested RKS RESEARCH & CONSULTING 6 4512 ©RKS Research & Consulting. All rights reserved, 2018 Res Oversample Online Approval DRAFT 9-14-18. 4512 QU CUSTOMER PROGRAMS CP-1. The City’s Utilities Department provides energy and water management services to its customers. For each program or service, please tell me whether you have used it, heard of it, or never heard of it. . Used it Heard of it Never heard of it Solar PV Group Buy (SunShares) Solar Hot Water Heater Rebate Consulting or Home Audits (Home Efficiency Genie) Energy Efficiency product rebates (Smart Energy) Water Conservation Rebates or Audits Heat Pump Water Heater Rebate Utility Workshops Free Multifamily Building Retrofits (Multifamily Plus) Free Low Income Retrofits (REAP) CP-2. (IF “USED IT” IN CP-1 FOR ANY PROGRAM – ALL OTHERS SKIP TO CP-3) How likely is it that you would recommend the City’s energy efficiency and water management services to a friend or colleague? Not likely Very likely 0 1 2 3 4 5 6 7 8 9 10 Not Sure CP-3. (EVERYONE) How much you agree or disagree with the statement: “The City’s utility department offers services that can help me meet my home energy efficiency and water management goals.” Strongly disagree Strongly agree 0 1 2 3 4 5 6 7 8 9 10 Not Sure CP-4. What additional services, if any, would you like PALO ALTO UTILITES to provide to help you meet your home energy and water management goals? RKS RESEARCH & CONSULTING 7 4512 ©RKS Research & Consulting. All rights reserved, 2018 Res Oversample Online Approval DRAFT 9-14-18. 4512 QU PROGRAM OVERSAMPLE You were selected to answer a few additional questions because our records show that your address recently participated in the Home Efficiency Genie program. PO-1. Do you remember this recent participation in the Home Efficiency Genie program? o Yes o No IF “NO” IN PO-1, SKIP TO FACTUAL. IF “YES” IN PO-1, CONTINUE BELOW PO-2. Please rate your satisfaction with the Home Efficiency Genie program.. Very dissatisfied Very satisfied 0 1 2 3 4 5 6 7 8 9 10 Not Sure PO-3. Please rate how easy it was to participate in the Home Efficiency Genie program. Very difficult Very easy 0 1 2 3 4 5 6 7 8 9 10 Not Sure PO-4. How likely is it that you would recommend the Home Efficiency Genie program to a friend or colleague? Not likely Very likely 0 1 2 3 4 5 6 7 8 9 10 Not Sure PO-5. How helpful and actionable were the efficiency recommendations and information you received from your participation in the Home Efficiency Genie program: Very hard to act upon Very easy to act upon 0 1 2 3 4 5 6 7 8 9 10 Not applicable RKS RESEARCH & CONSULTING 8 4512 ©RKS Research & Consulting. All rights reserved, 2018 Res Oversample Online Approval DRAFT 9-14-18. 4512 QU FACTUALS I have a few questions for classification purposes and then we are done. F-1. What is your age? o 18-34 o 35-54 o 55-64 o 65 and over o Prefer not to answer F-2. How many people currently live in your household, including yourself? o One o Two o Three to four o Five or more o Prefer not to answer F-3. What was the last grade or level of education that you completed? o High school graduate or less o Some college o Four-year college graduate o Graduate school or more o Prefer not to answer F-4. Do you own or rent your home? o Own o Rent o Not sure o Prefer not to answer F-5. Please describe the type of dwelling where you live: o Single family home o Duplex/triplex o Condo complex o Apartment o Other (SPECIFY) o Prefer not to answer F-6. Which category best describes what your total combined household income was for the full year 2017, before taxes? o Under $60,000 o $60,001 - $100,000 o $100,001 - $150,000 o $150,001 - $250,000 o More than $250,000 o Prefer not to answer RKS RESEARCH & CONSULTING 9 4512 ©RKS Research & Consulting. All rights reserved, 2018 Res Oversample Online Approval DRAFT 9-14-18. 4512 QU F-7a. At present do you have space set aside for a home office that you use for personal business such as paying bills, keeping records, paying taxes and the like?, o Yes o No o Prefer not to answer F-7b. Do you or someone else in your household work at home one or more days a week for an employer? o Yes o No o Prefer not to answer F-7c (IF “YES” IN F-7b—ALL OTHERS SKIP TO F-7d) About how many days in a typical month do you or someone else in your household work at home for an employer? _______________ It varies F-7d (EVERYONE) Do you or someone else in your household run a home- based business from your home? o Yes o No o Prefer not to answer Thank you for your time and participation. City of Palo Alto (ID # 10681) Utilities Advisory Commission Staff Report Report Type: Agenda Items Meeting Date: 10/2/2019 City of Palo Alto Page 1 Summary Title: Utilities Strategic Plan Update Title: Utilities Strategic Plan Update - October 2019 From: City Manager Lead Department: Utilities MEMORANDUM TO: UTILITIES ADVISORY COMMISSION FROM: UTILITIES DEPARTMENT DATE: OCTOBER 2, 2019 SUBJECT: Utilities Strategic Plan Update – October 2019 Over the past year and a half, staff has been actively engaged in implementing the Utilities 2018 Strategic Plan (Staff Report #9022). The four high priority focus areas identified were related to workforce, internal and external stakeholder collaboration, technology, and management of finances and resources. These four priorities reflect the needs of the organization and customers and transformation of the utilities industry. Multiple strategies and tactical actions were developed to effectively meet each priority. Key performance indicators (KPIs) were also developed in the 2018 Utilities Strategic Plan. Utilities is not able to report on the KPIs at this time because the KPIs identified are dependent on new strategic initiatives in the future. They may require refinement, updates or removal as strategic initiatives are changed or completed. Attached is a list of accomplishments and initiatives in progress for each priority. Attachments: •Attachment A: Presentation Strategic Plan Update Item 4 UTILITIES STRATEGIC PLAN UPDATE – October 2019 Utilities Advisory Commission October 2, 2019 Attachment A Implementation •Strategic Plan internal and external websites •Recurring meetings for leadership and priority teams •Semi-annual reporting •Created posters and awards of CPAU’s priorities and values •Referencing strategic priorities in Council reports •Employee recognition at All Hands meeting ft CITY OF WPALO ALTO Priority 1: Workforce We must create a vibrant and competitive environment that attracts, retains, and invests in a skilled and engaged workforce. Strategies and First Year Actions: S1: Establish CPAU as an organization where employees are proud to work and recruit other strong performers. A1: Develop individual development plans (IDP) A2: Review and expand training/education and certificate programs S2: Improve retention and recruitment efforts A1: Finalize bargaining agreements A2: Reduce hiring/processing time S3: Pursue alternative work and workforce solutions A1: Promote work-life balance solutions ft CITY OF W PALO ALTO Priority: Workforce Accomplishments: •Rolled out the Individual Development Plan •Developed new Employee Recognition Program •Contributed to new SEIU and UMPAPA contracts •Participated in 11 Career Job Fairs at local colleges, trade schools and high schools Initiatives in Progress: •Developing new Training Programs •Conducting Employee Satisfaction Survey •Adding HR staff for Utilities Recruitments Key Performance Indicator Goals: •Employee turnover rate < 10% by 2020 (3-yr average) •90% of all positions filled annually; 100% of critical positions filled within 90 days •100% of employees implementing individual development plans ft CITY OF ~PALO ALTO Workforce Statistics Administration Customer Support Engineering Electric Operations WGW Operations Resource Management Feb 2019 3 4 7 18 8 2.5 Sep 2019 1 1 4 17 6 2 0 2 4 6 8 10 12 14 16 18 20 Vacancies by Division Administration Customer Support Engineering Electric Operations WGW Operations Resource Management Eligible 2 6 11 6 9 5 Not Eligible 13 17 28 44 58 17 0 10 20 30 40 50 60 70 80 Retirement Eligibility by Division Past 12 Months of Recruitments 19 New Hires 19 Promotions 2 Hourly Conversions 2 Re-hires Priority: Collaboration We must collaborate with internal teams and external stakeholders to achieve our shared objectives of enhanced communication, coordination, education and delivery of services. Strategies and First Year Actions: S1: Enhance community communication A3: Targeted engagement/communication for distributed energy resources S2: Strengthen coordination and interaction within City A2: Improve City processing time to facilitate DER implementation S3: Foster cooperative culture within the department A2: Communicate Strategic Plan and key initiatives to all employees A3: Coordinate AMI outreach plan S4: Collaborate with outside agencies ft CITY OF W PALO ALTO Priority: Collaboration Accomplishments: •Co-sponsored community Electric Vehicle Ride and Drive event •Received 2019 National Energy Innovator Award from American Public Power Association for the Home Efficiency Genie Program •Conducted a residential Distributed Energy Resource (DER) survey •Organized a community appreciation event for University Downtown Initiatives in Progress: •Partnering with departments and community to develop Green Building Energy REACH codes for new construction and alterations •Partnering with VMware to develop a community Microgrid proof-of-concept •Expanding participation in interdepartmental construction projects •Partnering with other agencies to host the Bay Area Electrification Expo Key Performance Indicator Goals: •85% or higher “excellent/good” rating in annual customer satisfaction survey •50% or higher customer awareness for customers affected by CPAU’s key programs/initiatives •60% or higher employees agree they contributed/involved with decisions directly affecting their work ft CITY OF W PALO ALTO Priority: Technology We must invest in and utilize technology to enhance the customer experience and maximize operational efficiency. Strategies and First Year Actions: S1: Complete technology roadmap A1: Engage customers and establish priorities A2: Begin implementation of technology roadmap S2: Deploy advanced metering infrastructure (AMI) A1: Finalize business case S3: Enhance customer engagement tools A1: Upgrade My Utilities Account (MUA 2.0) S4: Improve system operational efficiency A1: Deploy mobile/field technologies A3: Supervisory Control and Data Acquisition (SCADA) system S5: Empower employees with technology A1: Streamline priority business processes ft CITY OF W PALO ALTO Priority: Technology Accomplishments: •Developed a five year Technology Roadmap •Completed the Business Case for Advanced Metering Infrastructure (AMI) •Deployed Smart Mobile Workforce application for field staff •Partnered with I.T. in RFP issuance and selection for ERP, CIS and GIS systems Initiatives in Progress: •Launching new customer engagement website (MyCPAU) •Commencing Phase 2 of the AMI Project to identify system requirements •Conducting a citywide meter field survey •Upgrading ERP and GIS systems Key Performance Indicator Goals: •Increase My Utilities Account (MUA) users 10% utilization by 5% each year •Paperless tools for field support staff: 50% by December 2018 / 90% by December 2019 •100% of staff trained on applicable new or upgraded technology ft CITY OF W PALO ALTO Technology Roadmap CIS,GIS OMS Customer Information System Geographical Information System Outage Management System 2023 -2025 AMI, ERP Advanced Metering Infrastructure Enterprise Resource Planning System 2020 -2023 MyCPAU 2019 New Utilities Customer Portal Priority: Finances and Resources We must manage our finances optimally and use resources efficiently to meet our customers’ service priorities. Strategies and First Year Actions: S1 (updated): Review and update (as needed) Water/Gas/Wastewater infrastructure maintenance and replacement program A1: Review maintenance and replacement plans for water utility (priority) S2: Stabilize CIP funding A1: Pilot an infrastructure budget development process for one utility for FY 19. S3 (updated): Review and update (as needed) Electric infrastructure maintenance and replacement program A1-A3: Review and update replacement plans for electric assets, establish reporting, establish staffing, tracking, and other resources needed for capital plan A4: Develop and monitor proactive maintenance programs and identify any data gaps. S4: Achieve sustainable and resilient energy and water supplies A1: Assist with achieving the City’s carbon reduction and water management goals A2: Establish and implement a Distributed Energy Resources plan A3: Evaluate recycled water, groundwater, and other non-potable water sources S5: Build community resiliency A1: Assess community’s resiliency needs and develop resiliency work plan ft CITY OF ~PALO ALTO Priority: Finances and Resources Accomplishments: •Developed a Distributed Energy Resources work plan •Reviewed and Updated the Water, Gas and Wastewater Collection CIP replacement schedule •Hosted a Community Resilience Workshop •Established Capital Reserves for individual utility funds Initiatives in Progress: •Developing an inventory for poles, transformers and underground cables •Improving internal management reporting for infrastructure maintenance and replacement •Evaluating recycled water expansion opportunities •Implementing the Sustainability and Climate Action Plan •Conducting a new water benchmark study •Establishing management practices for capital reserves to reduce year to year rate variability Key Performance Indicator Goals: •90% of critical assets in asset management system by 2022 •80% of critical component replacement; 90% maintenance annually (KPI under review) •Median or below residential/commercial bills vs. surrounding communities ft CITY OF WPALO ALTO 13 Mission: To provide safe, reliable, environmentally sustainable and cost effective services Strategic Direction: At CPAU, our people empower tomorrow's ambitions wh ile caring for today 's needs! We make this possible with our outstanding professional workforce, leading through collaboration and optimizing resources to ensure a sustainable and resilien t Palo Alto. S3.1 . Execute technology roadmap . S2.1 . Enhance communication S3.2. Deploy Advanced Metering with the community . Infrastructure. S1 .1. Establish CPAU as S2.2. Foster a culture of S3 .3. Invest in customer technology cooperative work. infrastructure . an employee-oriented organization . S2.3. Strengthen coordination S3.4 . Implement uti lity operat ions S1 .2. Attract and retain skilled and integration across City technolog ies . employees. departments. S3.5 . Empower employees with S4 .1 . Promote a replacement before failure policy. S4.2 . Balance customer rates and service with infrastructure improve- ments and maintenance . S4.3. Enhance utility-wide planned maintenance. S4.4 . Create a sustainable and resilient energy and water supply. S4 .5. Support commun ity's resiliency goa ls. S1 .3. EvalualB and a.-p S2.4. lnaease parlne, rum,nttechoolog"'5. ~ ~-a-lt-em~at-iv_e_w_orkf~~-ce~~-1-ut-io-ns __ ~~~~-co~lla_b_o_ra_tion~-~~~~~~~~~~~~~~~~~~~~~-~ CITY OF PALO ALTO UTILITIES