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HomeMy WebLinkAbout2020-09-02 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 ****BY VIRTUAL TELECONFERENCE ONLY*** Join Zoom Webinar Here Meeting ID: 966 9129 7246 Phone: 1 (669) 900-6833 Pursuant to the provisions of California Governor’s Executive Order N-29-20, issued on March 17, 2020, to prevent the spread of COVID-19, this meeting will be held by virtual teleconference only, with no physical location. The meeting will be broadcast on Cable TV Channel 26, live on Midpen Media Center at https://midpenmedia.org. Members of the public who wish to participate by computer or phone can find the instructions at the end of this agenda. 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 August 5, 2020 IV.AGENDA REVIEW AND REVISIONS V.REPORTS FROM COMMISSIONER MEETINGS/EVENTS VI.UTILITIES DIRECTOR REPORT VII.COMMISSIONER COMMENTS VIII.UNFINISHED BUSINESS - None IX.NEW BUSINESS 1.Discussion and Presentation of Brown Act Discussion 2.Discussion and Update on Program for Emerging Technologies Discussion 3.Discussion on Scoping of Future Studies of the Potential Impacts of Building Electrification Discussion Efforts on the Electric and Gas Utilities 4.Selection of Potential Topic(s) for Discussion at Future UAC Meeting Action NEXT SCHEDULED MEETING: October 7, 2020 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 UTILITIES ADVISORY COMMISSION – SPECIAL MEETING WEDNESDAY, September 2, 2020 – 4:00 P.M. ZOOM Webinar Chairman: Lisa Forssell  Vice Chair: Lauren Segal  Commissioners: Michael Danaher, Donald Jackson, A.C. Johnston, Greg Scharff, and Loren Smith  Council Liaison: Alison Cormack Presentation AMERICANS 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. PUBLIC COMMENT INSTRUCTIONS Members of the Public may provide public comments to teleconference meetings via email, teleconference, or by phone. 1. Written public comments may be submitted by email to UACPublicMeetings@CityofPaloAlto.org. 2. Spoken public comments using a computer will be accepted through the teleconference meeting. To address the Commission, click on the link below for the appropriate meeting to access a Zoom- based meeting. Please read the following instructions carefully. A. You may download the Zoom client or connect to the meeting in-browser. If using your browser, make sure you are using a current, up-to-date browser: Chrome 30+, Firefox 27+, Microsoft Edge 12+, Safari 7+. Certain functionality may be disabled in older browsers including Internet Explorer. B. You will be asked to enter an email address and name. We request that you identify yourself by name as this will be visible online and will be used to notify you that it is your turn to speak. C. When you wish to speak on an agenda item, click on “raise hand.” The Attendant will activate and unmute speakers in turn. Speakers will be notified shortly before they are called to speak. D. When called, please limit your remarks to the time limit allotted. E. A timer will be shown on the computer to help keep track of your comments. 3. Spoken public comments using a smart phone use the telephone number listed below. When you wish to speak on an agenda item hit *9 on your phone so we know that you wish to speak. You will be asked to provide your first and last name before addressing the Council. You will be advised how long you have to speak. When called please limit your remarks to the agenda item and time limit allotted. Join Zoom Webinar Here Meeting ID: 966-9129-7246 Utilities Advisory Commission Minutes Approved on: Page 1 of 7 UTILITIES ADVISORY COMMISSION MEETING MINUTES OF AUGUST 5, 2020 SPECIAL MEETING CALL TO ORDER Chair Forssell called the meeting of the Utilities Advisory Commission (UAC) to order at 4:01 p.m. Present: Chair Forssell, Vice Chair Segal, Commissioners Danaher, Jackson, Johnston, Scharff and Smith Absent: ORAL COMMUNICATIONS None. APPROVAL OF THE MINUTES Commissioner Scharff moved to approve the minutes of the July 1, 2020 meeting as presented. Vice Chair Segal seconded the motion. The motion carried 7-0 with Chair Forssell, Vice Chair Segal, and Commissioners Danaher, Jackson, Johnston, Scharff, and Smith voting yes. AGENDA REVIEW AND REVISIONS None. REPORTS FROM COMMISSIONER MEETINGS/EVENTS None. UTILITIES DIRECTOR REPORT Dean Batchelor, Utilities Director, delivered the Director's Report. Utilities Staffing – Approximately half of the Utilities Department staff had returned to work and half of the staff continues to work remotely. Almost all Operations staff are physically reporting to work to carry out field maintenance and operations projects and respond to emergency service calls. Customer Support Service staff rotate in and out of the office. Staff in the Administration, Resource Management and Engineering divisions are mostly working remotely; although, some are choosing to return to in-person work. Utilities had suspended reading meters in backyards and behind locked facilities in accordance with the shelter in place requirements but resumed all meter reading at the beginning of June once some of the restrictions were lifted. Staff who report to work must perform a symptoms check each day, wear face coverings when around others, and adhere to social distancing protocols. All staff are provided with the sanitation tools, personal protective equipment, and training necessary to protect themselves, their coworkers and community members. Other Utilities Projects in Progress – In addition to Utilities carrying out regular field maintenance and operations projects, you may see our staff or contractors out in the community working on other special projects. Each year Utilities performs a routine inspection of the gas distribution system to check for leaks, DRAFT Utilities Advisory Commission Minutes Approved on: Page 2 of 7 and contractors are currently walking residential areas for this inspection. We are replacing utility poles in various areas of the city. Contractors or Utilities staff will contact residents if they need to enter properties to replace poles located in backyards. Our utilities meter audit project continues and is expected to wrap up in the fall. Utilities Rate Assistance and Payment Relief for Residential and Commercial Customers – When the City declared a local emergency in response to the coronavirus (COVID-19) shelter in place public health order, Utilities expanded payment relief and rate assistance programs for customers. The moratorium on disconnections for non-payment, late payment fees, and full-bill payment requirements remain in effect until the proclamation of a local emergency officially ends. Current delinquent balances past 60 days total around $500,000. This is higher than our baseline of $25,000 but much less than the $2,000,000 that we initially forecasted. As a reminder, residents may qualify for our Rate Assistance Program, which provides a 25% discount on gas and electricity charges and 20% discount on storm drain service fees. Residential and commercial customers can set up a bill payment plan for relief from late payments. The ProjectPLEDGE program allows commercial and residential Utilities customers in good standing with their own accounts to donate funding on a one-time or recurring basis to help another resident in Palo Alto. Residents who are struggling to pay their utility bills may apply to this program for one-time assistance. Saving Energy and Water While Sheltering in Place – Earlier this year, Utilities launched an outreach campaign about energy and water efficiency to help customers keep bills low while people are working and studying from home. Recently we began a new “Summer Sustainability for Kids” e-newsletter series to educate younger Palo Alto community members and provide family-friendly activities for children as they spend more time at home this summer. Modifications to Utilities Programs – All visits inside occupied residential dwellings remain temporarily on hold, so staff are modifying programs to offer online services. A virtual Home Efficiency Genie webinar on the topic of Indoor Air Quality will be held on Tuesday August 11. Annual Water Quality Report – Utilities provides an annual consumer confidence report on water quality conditions for the previous calendar year. The report on water quality conditions for 2019 is now available online at www.cityofpaloalto.org/waterqualityreport or in print by request. Please contact us at UtilitiesCommunications@cityofpaloalto.org or (650) 329-2479 to request a printed copy. This report is also available in Spanish and Chinese at www.cityofpaloalto.org/waterquality. Carbon Neutral Plan – Staff will present the Amended Carbon Neutral Plan and Electric Utility Reserves Management Practices to the Council for approval on August 17, 2020. In response to Chair Forssell's query regarding ProjectPLEDGE donations and applications, Batchelor reported contributions exceed payouts. Dave Yuan, Strategic Business Manager clarified that donations and requests are equal at approximately $10,000. The program has a balance of approximately $44,000. ProjectPLEDGE has been operational for several years. In reply to Vice Chair Segal's inquiry regarding the water quality report, Batchelor advised that there has been no major change in water quality. COMMISSIONER COMMENTS None. UNFINISHED BUSINESS None. Utilities Advisory Commission Minutes Approved on: Page 3 of 7 NEW BUSINESS ITEM 1: DISCUSSION: Discussion and Presentation by Professor Richard Luthy on "One Water" Resource Approach. Karla Dailey, Senior Resource Planner, reported Commissioner Johnston requested information about the One Water approach. Typically, water supply planning involves potable water, demand management measures, and some recycled water. With the pressure on water supplies, the industry is beginning to view water resources holistically. Richard Luthy, Stanford University Professor, advised that there is greater interest in potable reuse, non- potable reuse, and the capture of wastewater going to the ocean. Use of stormwater is possible, but there are some constraints around storage. Desalination of brackish water is growing, but seawater desalination is a last resort. Water banking is efficient. In reply to Chair Forssell's question about water banking, Luthy indicated water is allowed to flow into the California aqua duct for storage, and jurisdictions have the right to pump water from the aqua duct. Luthy continued his presentation, stating in April 2019, Governor Newsom directed all state agencies to prepare a water resilience portfolio, which would prioritize multi-benefit approaches, embrace innovation and new technologies, and encourage regional approaches. These approaches include efficiency, non- potable reuse, potable reuse, water banking, stormwater harvesting, and desalination. Non-potable reuse was innovative in the 1970s. After three decades, non-potable reuse is expensive and can be energy intensive, and the water is too salty to be used for long-term irrigation. Decentralized non-potable reuse involves the reclamation of wastewater using new technology that does not require aeration. This process is energy efficient, does not require lengthy pipelines, and produces water suitable for irrigation. Potable reuse was first demonstrated in 1962 with tertiary-treated wastewater. Indirect potable water reuse projects operate in Orange and San Diego Counties. El Paso and Big Spring, Texas, are experimenting with processes for direct potable water reuse. The Bay Area One Water Network is a clearinghouse for stakeholders and water managers to share information, build collaborative capacity, and develop strategies for implementing resilient integrated water systems. The Bay Area One Water Network hosts workshops and shares synthesis reports. Stormwater reuse has multiple benefits, and large systems are cost-competitive with other sources of new water. Over the next 35 years, the public and elected officials will expect the Bay Area to recycle wastewater and to be less reliant on imported water. A regional network can help identify and foster partnerships, demonstrate and optimize new technologies, and engage the public and elected officials. In answer to Commissioner Johnston's question about separate systems to collect and treat stormwater and wastewater, Luthy indicated the systems do not necessarily need to be separate. Some stormwater can be diverted for reuse to a treatment plant with excess capacity. In response to Commissioner Jackson's inquiring regarding segregation of the water supply at the local level, Luthy suggested water reuse may not be worthwhile in existing developments because of the cost of purple pipe. In reply to Chair Forssell's request for the status of direct potable reuse projects in Texas, Luthy indicated the Big Spring project was discontinued when the drought ended. The El Paso project has been approved. In these projects, water was sent to the treatment plant rather than a natural buffer. In answer to Councilmember Cormack's query regarding The Dreamt Land by Mark Arax, Luthy related that he is not familiar with the book. Councilmember Cormack noted gray water reuse can be part of the Cubberley Community Center redevelopment. ACTION: None Utilities Advisory Commission Minutes Approved on: Page 4 of 7 ITEM 2: DISCUSSION: Discussion of the Fiber Network Expansion Project by the Vendor, Magellan Advisors. Daniel Dulitz, Palo Alto Hills Broadband Working Group, reported wired broadband is not available in Palo Alto Hills. Microwave service is expensive and often unreliable. He presented a petition requesting the City of Palo Alto Utilities (CPAU) provide or facilitate broadband service to Palo Alto Hills. Tim Parsey described internet service providers and service for residents of Palo Alto Hills and noted the current internet provider has lost its lease. Kathy Roskos emphasized the necessity of broadband service for residents to work and attend school from home. Mike Carlton indicated Palo Alto Hills residents have no option for DSL or high speed internet service. The wireless options for internet service are unreliable. He requested CPAU allow or facilitate usage of the existing fiber endpoint. Dean Batchelor, Utilities Director, introduced John Honker and Jory Wolf of Magellan Advisors, the City's consultant for the fiber network expansion project. John Honker, Magellan Advisors, reported the fiber network is a major City asset. Magellan provides turnkey services across the spectrum of planning and building fiber networks. Phase 1 of the project began on July 18, 2020 and will result in a high-level design and cost estimate for expanding the City's network to support automated metering infrastructure (AMI), Supervisory Control and Data Acquisition (SCADA), telemetry, and wireless applications for Public Safety and Public Works. Phase 1 should be complete by the end of the calendar year. Phase 2 will result in a detailed backbone engineering design for the expansion. The goal of Phase 3 is to understand the alternatives for building Fiber to the Premises (FTTP). Phase 4 is engineering design for FTTP. The Council will review and approve each phase. Jory Wolf, Magellan Advisors, indicated policy discussions will focus on dig once, joint build, one touch make- ready for utility poles, use of City assets, multiunit right of entry, and micro-trenching. In reply to Chair Forssell's query regarding inclusion of Palo Alto Hills, Honker advised that the assessment will cover the entire City. In response to Vice Chair Segal's inquiry about an estimated date to build the infrastructure for the City piece of the project, Honker explained that Phases 1 and 2 will take about a year. A Request for Proposals (RFP) could be released when the 90% or 100% design is ready. Construction could begin 18 months after the beginning of Phase 1 and extend for 12-18 months. Phases 2 and 3 could be consolidated so that the timeline is shorter. In answer to Commissioner Scharff's question regarding the Council's rationale for the phasing, Dave Yuan, Strategic Business Manager, understood the Council wanted to take an incremental approach. The Fiber Fund's balance is about $30 million. Previous studies estimated the cost of a complete buildout at $80 million. Commissioner Scharff proposed the UAC discuss a recommendation for the Council to combine Phases 2 and 3. Phase 3 should provide quite a bit of information for the Council. COVID has focused attention on the need for broadband service. Commissioner Smith agreed with Commissioner Scharff's comments. The City should take advantage of the opportunity to accelerate some of the programming. Phase 3 will provide significant background and detail for cost projections to build out the network. Utilities Advisory Commission Minutes Approved on: Page 5 of 7 Commissioner Johnston concurred with Commissioner Smith's and Commissioner Scharff's comments. In response to his question about timeframes for construction mobilization and construction for the City piece, Honker indicated mobilization could require 3 months, and construction could extend for 12-18 months. The number of miles the expansion will cover is unknown and could affect the length of construction. A reasonable estimate is 18-30 months for construction. If fully approved, the system could be ready for service in 2 ½ or more years. The length of Phase 4 construction is dependent on the number of homes and the size of the project. Honker further reported that Phase 3 will be evaluation of possible alternatives for FTTP. Magellan will explore lower-cost and lower-risk approaches to build out FTTP. Where the Phase 1 network is designed, FTTP could be provided to areas in close proximity to the backbone. Because these projects are capital- intensive, Magellan will explore integrating the expansion project with other capital projects. Magellan will also assess the use of wireless for last-mile access. Phase 4 will result in a low-level design for FTTP, final construction prints, permit packages, a construction bid package, and an RFP for a construction contractor. Commissioner Danaher concurred with accelerating the phases. In answer to Commissioner Smith's query about potential challenges for expanding the network for City departments and later for FTTP, Honker clarified that the fiber network was originally intended to serve City departments, and some areas of the network are quite congested. Magellan will assist the City with decisions around expanding the existing backbone and building new backbone segments. Flexibility in the backbone is important for supporting applications. Wolf added that physical conditions such as soil will also need to be evaluated. Chair Forssell agreed with the suggestion to combine Phases 2 and 3 and inquired about the methodology for developing a business case and recent changes that could make FTTP feasible now. Honker indicated the competitive environment has not changed significantly since the last business case was developed. Municipal services have competed well with commercial services because reliability, price, and availability are as important as speed. An incremental approach can be more tactical and provide the same value to the community. Magellan will look at a number of methods to achieve expansion and help the UAC identify the best methods. Each neighborhood will be analyzed to provide build-out costs, payback on capital, and potential take rates. Vice Chair Segal supported combining Phases 2 and 3 and expressed interest in the equity component of expanding the fiber network. In reply to Councilmember Cormack's inquiry regarding the funding source for Phases 2 and 3 and the projected fiscal years for implementation of Phases 2 and 3, Yuan explained that Phase 1 can be found in the fiber rebuild project in the Capital Improvement Program (CIP). Phase 2 has not been budgeted because Phase 1 is not complete. Batchelor added that extra conduit for fiber expansion is installed as part of any capital project for the Electric Utility that includes undergrounding or rebuilding. In answer to Commissioner Jackson's query regarding City ownership of fiber along Page Mill Road, Batchelor advised that City fiber stops at the water tower, which is about 2,000 feet short of homes. Staff will have to review the situation and City policies to determine if the fiber endpoint could be moved to street-side. Commissioner Jackson remarked that the City does not provide residential broadband to any resident. With a lot of hard work, a group of people may be able to obtain broadband service if they could get access the City's dark fiber ring. In response to Commissioner Smith's question regarding the potential to work on tasks concurrently and to reduce the timeline by combining Phases 2 and 3, Yuan advised that staff and the consultant will discuss Phases 2 and 3 to determine the most economical and efficient method to proceed and update the UAC. Utilities Advisory Commission Minutes Approved on: Page 6 of 7 Batchelor added that the Council would have to approve a proposal to combine Phases 2 and 3. Commissioner Smith suggested compressing the timeline for Phase 1 and a new combined Phase 2 and 3. ACTION: None The UAC recessed at 6:15 p.m. and returned at 6:25 p.m. ITEM 3: DISCUSSION: Discussion and Update on Activities to Facilitate Distributed Energy Resource Adoption and Integration. Shiva Swaminathan, Senior Resource Planner, defined a distributed energy resource (DER) as a resource, potentially behind a customer meter, that can significantly change the timing, duration, and magnitude of energy use in the distribution system. Staff across CPAU divisions and City departments coordinate the integration and facilitation of DERs. Staff is evaluating proposals for AMI implementation, has implemented Phase I of the MyCPAU customer portal, has launched the Technical Assistance Program regarding electric vehicle (EV) chargers, is facilitating VMware's community microgrid, and is analyzing the impact of DERs on the distribution transformer loading. Plans for fiscal years 2020-2022 include implementation of MyCPAU Phase II; enhancement of customer programs, particularly EV chargers for multifamily homes; enhancement of DER customer programs, particularly for income-qualified customers; a pilot program for retail rates that minimize barriers to electrification; and AMI implementation. Nicola Acutt, VMware Vice President for Sustainability, advised that VMware provides IT infrastructure and digital workspace technology. Acutt reviewed the vision and objectives for the microgrid project. The initial phase of the program is to determine whether the project is logical and the business capabilities add value. The microgrid is under construction at a customer briefing center and a gym that supports emergency services and critical infrastructure. The project includes demonstrating the capability of plugging the Mobile Emergency Operations Center (MEOC) into the microgrid in order to provide indefinite power. Potential use cases for the microgrid are full building resiliency, islanding critical loads, peak-shifting modes, demand response operating mode, grid services, and integration with VMware's building management system. Construction of the microgrid is anticipated to be substantially complete in November 2020. Next steps include continued collaboration between CPAU and VMware, capture and share learnings, and continued development of innovative microgrid control technology. In response to Commissioner Scharff's questions, Acutt indicated the project is comprised of two buildings with solar installations and batteries. The batteries and solar panels provide power for daily use. Tomi Belosevic, VMware, explained that the batteries are oversized to provide resiliency. Solar generation is limited and does not charge the batteries fully. Electric power is used to fully charge the batteries. The batteries are cycled daily in an attempt to align utility and VMware peaks. The system will use different inputs to dynamically dispatch the batteries in combination with solar power to determine when the batteries need to be charged from the solar panels or the utility. Acutt related that community involvement in the project relates to providing support for the MEOC. A key contribution of the project is knowledge. In reply to Commissioner Johnston's inquiry regarding full building resiliency, Belosevic clarified that the battery should be large enough to power the whole building with average occupancy for 4 hours if the utility grid goes down. The team is planning to test a blinkless transition from grid connection to island mode. On cloudy or sunny days, power can be directed to specific portions of the buildings. In answer to Vice Chair Segal's query about Stanford University's participation in the project, Acutt indicated Stanford University's participation is focused on research, innovation, and application. In response to Chair Forssell's inquiry regarding the battery technology, Belosevic advised that the batteries are LG Chem lithium ion with nickel/magnesium/cobalt chemistry. ACTION: None Utilities Advisory Commission Minutes Approved on: Page 7 of 7 ITEM 4: ACTION: Selection of Potential Topic(s) for Discussion at Future UAC Meeting. Commissioner Smith requested a future discussion with Magellan Advisors. ACTION: None NEXT SCHEDULED MEETING: September 2, 2020 Commissioner Scharff moved to adjourn. Commissioner Johnston seconded the motion. The motion carried 7-0 with Chair Forssell, Vice Chair Segal, and Commissioners Danaher, Jackson, Johnston, Scharff, and Smith voting yes. Meeting adjourned at 7:08 p.m. Respectfully Submitted Tabatha Boatwright City of Palo Alto Utilities Utilities Advisory Commission Minutes Approved on: October 7, 2020 Page 1 of 6 UTILITIES ADVISORY COMMISSION MEETING MINUTES OF SEPTEMBER 2, 2020 MEETING CALL TO ORDER Chair Forssell called the meeting of the Utilities Advisory Commission (UAC) to order at 4:01 p.m. Present: Chair Forssell, Vice Chair Segal, Commissioners Jackson, Johnston, Scharff, and Smith Absent: Commissioner Danaher ORAL COMMUNICATIONS None. APPROVAL OF THE MINUTES Commissioner Jackson moved to approve the minutes of the August 5, 2020 meeting as presented. Commissioner Scharff seconded the motion. The motion carried 5-0 with Chair Forssell, Vice Chair Segal, and Commissioners Jackson, Johnston, and Scharff voting yes, and Commissioners Danaher and Smith absent. AGENDA REVIEW AND REVISIONS None. REPORTS FROM COMMISSIONER MEETINGS/EVENTS Commissioner Scharff disclosed that he attended several Northern California Power Agency (NCPA) virtual meetings, which kicked off the 5-year Strategic Plan and would bring back reports to the Commission as the process moves forward. UTILITIES DIRECTOR REPORT Dean Batchelor, Utilities Director, delivered the Director's Report. American Public Gas Association Advocacy Concerns - Recently, the City has received a few inquiries through social media and comments to the UAC from advocates concerned about Palo Alto’s membership with the American Public Gas Association (APGA). In recent years, APGA has submitted comments to the California Energy Commission opposing building electrification mandates. Palo Alto has made its concerns about APGA’s advocacy known to APGA staff. City staff have communicated directly with executive management at APGA regarding legislation surrounding renewable energy, the fossil fuel industry, and electrification. In the past, APGA has extended us the courtesy of sharing their policy statements and comments to regulatory agencies on these matters. Through such correspondence, we have reiterated that Palo Alto is actively exploring electrification in our service territory and developing relevant policies and programs while carefully considering the operational implications for our gas utility operations. Specifically, we have communicated to APGA that Palo Alto’s position on this topic diverges from APGA, and we will continue to do so when corresponding about these issues. Utilities Advisory Commission Minutes Approved on: October 7, 2020 Page 2 of 6 We have debated internally whether we should continue our membership. At this time, we believe the safety and reliability of the gas system needs to continue to be our priority. APGA primarily exists to help small publicly owned gas utilities ensure the safety of their gas systems and comply with Department of Transportation (DOT) safety regulations. It provides a wide variety of resources to its members that we rely on heavily in managing our gas system. As a result, we continue to maintain our membership with APGA while expressing our dissatisfaction about their advocacy positions. SFPUC Water System Health – The City of Palo Alto’s water supplier, the San Francisco Public Utilities Commission (SFPUC), has not reported any damage to the regional water system, nor known water quality impacts, due to recent regional wildfires. CPAU staff will provide updates on critical information if the agency reports any news during subsequent evaluations. Council member Cormack shared an article with us that was included in a recent Bay Area Water Supply and Conservation Agency (BAWSCA) correspondence packet that she thought might be helpful in reminding us to check in on our codes and practices with respect to backflow prevention devices and fire resistant meter boxes. CPAU staff have been working diligently for many years to ensure that appropriate backflow prevention measures are in place to protect the city’s main potable water supply distribution system. Rolling Power Outages – Over the past month, California and the western United States have experienced record-breaking heatwaves. This has caused a strain on the electric grid, and high electricity demand continues to put pressure on the state’s energy infrastructure. The agency that manages the state’s electric grid, the California Independent System Operator (ISO), issued a statewide call for voluntary electricity conservation, known as a Flex Alert, in an attempt to avert rolling power outages. Palo Alto experienced a power outage for about 4,500 customers on the evening of Friday, August 14, but due to concerted efforts from state and city community members, we were able to avoid additional power outages. Thank you to all who heeded our call to power down or eliminate unnecessary appliance and lighting usage! View helpful tips at cityofpaloalto.org/efficiency tips. • CEC – Enforcement Procedures for the Renewables Portfolio Standard for Local Publicly Owned Electric Utilities • CM Cormack – The article was included in the BAWSCA correspondence packet and she thought it would be a good idea to review the backflow devices and fire resistant meter boxes • Workforce COVID Update • Fiber Update – On August 5th the UAC discussed the importance of broadband service and FTTP given the shift to teleworking, telepresence and remote learning due to the pandemic. The UAC asked staff and Magellan to determine if it was feasible and effective to accelerate some FTTP analysis and tasks in Phase 3 to shorten the duration of the fiber network expansion plan and provide the UAC and Council more up to date information on cost protection and alternative approaches to build out the FTTP network In response to inquiries, Batchelor shared that email blasts and social media posts are sent out ahead of time to inform customers of potential blackouts and how they can help conserve energy. Most of the blackouts occur a night. Staff continues to explore more efficient ways to reach customers who may experience a blackout. Batchelor emphasized to ISO that they could not inform the department of last-minute load shedding and that advanced notification needed to happen. In reply to Council Member Cormack’s questions, Batchelor noted that the Utilities Department does keep track of areas that do have blackouts. Staff moves through the utility feeders to determine which areas may receive a blackout. Chair Forssell recommended that everyone download the CAISO Today App which sends out alerts if there is going to be a blackout. Utilities Advisory Commission Minutes Approved on: October 7, 2020 Page 3 of 6 COMMISSIONER COMMENTS None. UNFINISHED BUSINESS None. NEW BUSINESS ITEM 1: DISCUSSION: Discussion and Presentation of Brown Act. Dean Batchelor, Utilities Director, introduced Aylin Bilir, Assistant City Attorney from the City Attorney’s Office, who gave a refresher course to the Commission on the Brown Act. Aylin Bilir, Assistant City Attorney, announced that several rules have changed due to the COVID-19 pandemic and then gave a brief recap of how to avoid serial meetings. The purpose of the Brown Act is to engage the community and to ensure that all meetings are open and transparent. The Brown Act did not apply to meetings between one Commissioner and the public, Commissioner and staff communications, and temporary Ad Hoc Committees. Care needs to be taken when Commissioners post to social media and serial meetings are reviewed on a case by case basis. If majority of Commissioners use direct communication to discussion or deliberate on items, that is considered a serial meeting. Under Executive Order N-29-20, suspended Brown Act rules include no physical public location for a meeting, no physical notice needs to be posted at each location, a Commissioner can teleconference in a place outside of Palo Alto, and the agenda can be posted on online only. In response to Chair Forssell’s question regarding what UAC business means when it comes to posts made by an individual Commissioner on social media, Bilir referred to the UAC’s Formation Statement which stated a broad overview of the UAC’s jurisdiction. In reply to Commissioner Jackson’s inquiry about if a Commissioner could publicly announce their personal position on a general topic, Bilir predicted that it was not a violation, but a Commissioner should not pre- decide on an issue without having a conversation with the public and the Commission as a whole. In answer to Commissioner Scharff’s comment regarding copying all UAC Commissioners on an email that advocates for a position, Bilir confirmed that a Commissioner cannot copy all UAC Commissioners onto an email that is sent to staff. The UAC recessed at 5:04 p.m. and returned at 5:15 p.m. Bilir continued her presentation which stated that the Brown Act prohibits sharing opinions with other members outside of the public meeting forum, but technical questions can be sent to Staff who will then present them to the public. Articles or links can be sent to all UAC Commissioners if no Commissioners express their opinion regarding the article. No Commissioner can email another Commissioner to solicit input regarding an item that is on the agenda. Bilir concurred with Commissioner Jackson’s statement that if a Commissioner sends an article to another Commissioner and that other Commissioner replies with an opinion on the article. That Commissioner is in violation, not the original sender. In response to Commissioner Jackson’s question regarding the UAC’s designated City email, Tabatha Boatwright reported that any email received from the public from that email goes into the public letters to the UAC and is posted online with the UAC Packet. UAC Commission Members do not respond to those Utilities Advisory Commission Minutes Approved on: October 7, 2020 Page 4 of 6 emails personally. Commissioner Jackson disclosed that the notification process regarding the UAC’s City email is not clear to him and will follow up with the City’s Attorney’s Office. In response to Chair Forssell’s inquiry regarding the discussion that took place earlier around blackouts, Bilir did not believe that conversation was in violation because no action was taken. ACTION: None ITEM 2: DISCUSSION: Discussion and Update on Program for Emerging Technologies. Jonathan Abendschein, Assistant Director of Utilities Resource Management, introduced Lena Perkins, Senior Resource Planner, who managed the program for Emerging Technologies. Lena Perkins, Senior Resource Planner, disclosed that the program has been a success, it has helped several research grants and early-stage companies, and it has allowed collaboration with neighboring load-serving entities. One change that staff recommended is to move the program to an annual application cycle. Abendschein added that staff was not seeking any action from the Commission and the report is informational. Commissioner Jackson fully appreciated the change to move the program to an annual application cycle and he looked forward to reading more about staff’s academic collaboration to evaluate the impact of the switch to all-electric residents. In reply to Commissioner Johnston’s query regarding the decline in applications, Perkins explained that staff has not been actively soliciting the program due to other priorities in the past years. The program will be promoted more now that staff has been able to reorganize. Commissioner Johnston wished to see the program promoted more and he supported the change staff recommended. Commissioner Scharff did not believe the program should be prioritized and take up more of staff’s time. It is a good program and that it should be left up to staff on how it is managed. In response to Vice Chair Segal’s question regarding potential funding from other sources, Perkins explained that staff’s approach is to solicit applications that are more in line with the City’s interests and programs that would require minimal staff time. Abendschein added that finding long term funding sources is a challenge and existing funding sources were already allocated to other projects. Vice Chair Segal supported the annual switch. In reply to Commissioner Smith’s query, Perkins proclaimed that all prior pilot programs provided a benefit the City. Any programs that may become permanent have a layer of commitment to them and staff resources needed to be evaluated before anything can become permanent. In answer to Chair Forssell’s questions, Perkins concurred that on the Emerging Technologies’ Website has a list of prior pilot projects that were accepted and executed. A lighthouse customer is a customer that first deploys the product. She advised that in her opinion pilot programs should be restricted to the Series A, B space and staff can provide letters of support and consultation for very early-stage projects. ACTION: None ITEM 3: DISCUSSION: Discussion on Scoping of Future Studies of the Potential Impacts of Building Electrification Efforts on the Electric and Gas Utilities Utilities Advisory Commission Minutes Approved on: October 7, 2020 Page 5 of 6 Bret Andersen proclaimed that the project is very important and is impressed that the City is moving forward with it. It is important that the City publicly announce that it is doing investigations and that the City is planning a managed transition from gas to electricity. He emphasized that American Public Gas Association (APGA) should not be using utility funds to solicit negative messages that go against the effort. Tom Kabat, a resident of the City of Menlo Park, expressed excitement that Palo Alto is following bold climate action changes in terms of combining the gas and electric utility. Jonathan Abendschein, Assistant Director of Utilities Resource Management, said his goal was to take feedback from the Commission on what information related to the utility impacts of building electrification Commissioners were interested in so it could be incorporated into studies staff was currently working on. He noted the Sustainability and Climate Action Plan (S/CAP) goal is to reduce emissions within the City by 80 percent by 2030, which will have significant impacts on the gas and electric utility financial positions and physical operations. Staff was working to quantify these impacts. Key questions to be answered included whether achieving the 80 percent by 2030 goal would result in a non-viable gas utility and a description of the physical impacts it would have on the gas as well as the electric utility. Staff is aiming to complete the studies by the end of 2020. He shared some early insights from the studies. While there was a strong likelihood that the gas utility would be eliminated at some point in the eventual future, eliminating the gas utility was not necessary to achieve the 80 percent by 2030 goal. A key potential barrier to achieving the S/CAP goals would likely be electric utility Engineering and Operations staffing. Positions and contractors in these areas were challenging to recruit for and many more employees and/or contractors would be needed to support the community in achieving the S/CAP goals. Commissioner Scharff wanted to know if the technologies existed to go fully electric for single-family homes (including large homes) without impacting quality of life? How much would the average homeowner’s bill go up, and what would be the range of cost to electrify different homes? Who would pay those costs? Would going fully electric cause more impacts to the City’s electric load during critical times and what is the cost of upgrading the grid so that it can handle the additional load? What would the impacts be to the broader electric grid and how would that factor into the potential for rolling blackouts? Finally, he said it was important that all questions and answers be transparent to the public and there was strong communication with the public about these goals. In reply to Commissioner Smith’s question about whether vehicle electrification was included in the study when evaluating electric distribution system impacts, Abendschein mentioned that a parallel study is taking place that explores the total electric vehicle (EV) charging infrastructure needed across the whole City to support the 80 percent by 2030 goal. All the studies will be combined and will represent the total impact of vehicle charging and electrification on the electric distribution system. In response to Commissioner Smith’s question about whether the City should be promoting solar as a carbon reduction strategy, Abendschein noted that solar does reduce carbon emissions on the wider CAISO grid, but the City calculates emissions differently when tracking S/CAP progress, and solar does not contribute reduction of emissions in that context. Staff continues to explore solar and storage solutions for its resiliency value. Commissioner Jackson asked how strategic the utility needed to be in withdrawing gas from specific areas in a specific order? Abendschein said staff was exploring those topics, and that there were definitely physical limitations on which gas lines had to be withdrawn first, Staff was not yet sure whether there were financial limitations. Commissioner Jackson said that people will be using copious amounts of electricity and that will have major impacts on the electric grid. He wanted to know what percentage of residential customers have 100-amp service, 200-amp service, or 400-amp service? What will the costs be for homeowners and utilities when the capacity of the electrical system must increase, and what potential financing options will the Utilities Department offer? He endorsed on-bill financing as a potential mechanism for facilitating electrification. Utilities Advisory Commission Minutes Approved on: October 7, 2020 Page 6 of 6 Vice Chair Segal recommended thinking through how peoples’ lifestyles may need to change due to building and vehicle electrification. Has staff considered the physical issues associated with building electrification? For example, how does a customer with tankless gas water heating in a small home find space for a heat pump water heater? When implementing electrification programs, will the City get involved with procurement? Lastly, she was glad to see staff would explore the question of whether it was legally required to serve gas to customers. Commissioner Johnston underlined the point that practical problems needed to be thought through and how to persuade people to electrify. Chair Forssell appreciated staff’s work so far and the questions raised by the other Commissioners. She emphasized that education and outreach needed to take place way in advance so that residents are not surprised. She highlighted the need to look at financing issues as well. Council Member Cormack acknowledged that there will be an impact to staff resources in terms of processing applications. She found it interesting to learn about the possibility of a gas utility transitional strategy addressing primarily multi-family / commercial to be interesting. She emphasized that customer education and outreach was critical. She advised staff to explore standardized ways to permit electrification projects, similar to the work being done to address Accessory Dwelling Units (ADU) permitting in Palo Alto and in other cities. Commissioner Scharff encouraged staff to look carefully at the requirements other City departments impose that can create additional costs to a project, and that are different from the requirements in other cities, and work with them to relieve those types of burdens. He gave an example related to ADUs – in Palo Alto the sewer main must be connected to the street instead of the line for the main house, unlike in some other jurisdictions. ACTION: None ITEM 4: ACTION: Selection of Potential Topic(s) for Discussion at Future UAC Meeting. Commissioner Jackson suggested a topic on undergrounding electricity and fiber. He had several questions regarding the topic and would email them to staff. Vice Chair Segal wanted more information regarding the rolling blackouts and notification for those blackouts. Commissioner Jackson supported that recommendation. ACTION: None NEXT SCHEDULED MEETING: October 7, 2020 Vice Chair Segal moved to adjourn. Commissioner Jackson seconded the motion. The motion carried 6-0 with Chair Forssell, Vice Chair Segal, and Commissioners Jackson, Johnston, Scharff and Smith voting yes, and Commissioner Danaher absent. Meeting adjourned at 6:43 p.m. Respectfully Submitted Tabatha Boatwright City of Palo Alto Utilities City of Palo Alto (ID # 11564) Utilities Advisory Commission Staff Report Report Type: Agenda Items Meeting Date: 9/2/2020 City of Palo Alto Page 1 Summary Title: Brown Act Review Title: Discussion and Presentation of the Brown Act From: City Manager Lead Department: Utilities Executive Summary The presentation will be a basic overview of what the Brown Act is, and some tips for how to follow it that are relevant to a Utilities Advisory Commission. Staff: Aylin BilirQ CITY OF PALO ALTO City of Palo Alto (ID # 11410) Utilities Advisory Commission Staff Report Report Type: Agenda Items Meeting Date: 9/2/2020 City of Palo Alto Page 1 Summary Title: Program for Emerging Technologies Update Title: Discussion and Update on City of Palo Alto Utilities Program for Emerging Technologies From: City Manager Lead Department: Utilities EXECUTIVE SUMMARY The Program for Emerging Technologies (PET), (www.cityofpaloalto.org/UTLInnovation) provides the opportunity for early-stage businesses and researchers to submit proposals for innovative pilot projects to City of Palo Alto Utilities (CPAU). The goal is to find and nurture creative products and services that will improve customer value, save natural resources, and/or reduce carbon emissions. The report includes updated evaluation criteria to help focus applications on CPAU’s core target areas and better align with the customer program priorities. Staff is also changing the pilot project application cycle to once annually, rather than being accepted on a rolling basis and evaluated quarterly. In addition to these updates, this report also includes a summary of the value of PET to the City, highlights from featured past projects, and a summary of applications from FY 2020 and the program overall. BACKGROUND The City’s Innovation and Emerging Technology Demonstration Program (now PET) was approved in January 2012 and launched in June 2012. The program focuses on promoting the testing, evaluation and deployment of new technologies related to the provision of utility service. Since the launch of the program it has received 94 applications, with 25 completed projects (completed projects include both letters of support and completed pilot projects). In FY 2020, eight proposals were received. Of these proposals five projects were acc epted and are either active or completed, two were declined, and one is still under consideration. In addition to the projects received through this program, the City is also proactively fostering innovation through many different avenues, including research collaborations, regional collaborations, and participating in events which highlight important issues going forward. CPAU sponsored and judged the GridShift Hackathon with PowerHouse Ventures and Silicon Staff: Lena PerkinsQ CITY OF PALO ALTO City of Palo Alto Page 2 Valley Clean Energy (SVCE) this January. Several promising early-stage companies reached out after the event, and staff is in the process of assessing them for the best fit, while also encouraging them to register for the City’s procurement platform to ensure that they receive future requests for proposals (RFPs). Staff also participated in evaluation panel for SVCE’s Spring 2020 Innovation Onramp, and is exploring several potential collaborations. DISCUSSION The program continues to be focused on fostering innovative and potentially transformative technologies in core target areas. This section is comprised of I) value of PET to the City, II) program changes and updates, III) highlights from featured project s, IV) summary of applications for FY 2020 and since program launch in 2012. I. VALUE OF PROGRAM FOR EMERGING TECHNOLOGIES TO THE CITY OF PALO ALTO PET brings four areas of key value to the City: 1) A mechanism to collect more and better market information on areas of emerging strategic importance; 2) An increase to the number, quality, and innovative respondents to City RFPs; 3) Ongoing education for staff for emerging market trends and cross-training; and 4) Improving and accelerating development in areas of strategic importance to the City and CPAU. 1. Improving quality and timeliness of information on emerging market trends This program saves customers money by keeping staff abreast of emerging technologies and market trends. Increased knowledge and understanding narrows uncertainties as markets evolve, and a clear understanding of market trends and key project and contract terms saves time and money. This concept is sometimes called the business of value of information and is one of the core values that PET brings to Palo Alto. More information means lower uncertainty, lower risk, and ultimately lower costs. The Value of Information (VoI) is fairly simple: how much additional information allows a decision-maker to improve their decision, and the associated value saved or earned. The better the information, the better the knowledge and ultimate decision making. Both by evaluating applications, engaging in academic collaborations, engaging in pilot projects, and sharing the results of pilot projects PET increases information and knowledge throughout City of Palo Alto Utilities, leading to better business decisions with lower costs and higher value to customers. City of Palo Alto Page 3 (a) (b) Figure 1. (a) Value of information in decision making. Source: http://www.provisdom.com/blog/value-of-information. (b) This figure helps show how additional data and information from timely and credible sources. Image Source: DIKW pyramid: data, information, knowledge, and wisdom / Source: Wikipedia 2. Increasing number, breadth, and quality of applicant pool for City of Palo Alto RFPs PET has routed several companies and technologies to register for the City’s procurement system, ensuring that they are notified when RFPs are issued by the City. By increasing the visibility of the open City solicitations, this program broadens the applicant pool and encourages higher quality and more innovative responses. 3. Staff training and cross-training PET is an effective way of routing emerging trends in technologies to relevant staff, thereby keeping staff abreast of emerging market and technology trends, improving program and project focus of RFPs, selecting vendors, and contracting with chosen parties. PET is also an important mechanism for cross-training staff in emerging areas which are of professional interest to high-performing staff looking for growth opportunities. 4. Improving and accelerating utility and sustainability company development Staff is helping to shape company development so early-stage companies are better informed of utility pain points and needs, as well as better address priorities for the City of Palo Alto Utilities. The goal is to find and nurture creative products and services that have strategic value to by improving customer value, saving natural resources, or reducing carb on emissions. By helping to better inform early-stage companies about utility pain points, business processes, and needs in these areas through PET, CPAU can strengthen the innovation ecosystem of companies focused on energy, water, carbon, safety, resiliency, and other utility needs. The PET pilot project with AutoGrid is a good example of how CPAU helped foster innovation throughout the flexible demand response space. II. PROGRAM CHANGES AND UPDATES The three updates and changes that staff is making to PET are 1) updating the program goals and evaluation criteria, 2) changing to an annual application cycle for pilot project proposal evaluation, 3) clarifying the goals and process for the academic collaboration process. The Business ...A... Intelligence ~ ~ City of Palo Alto Page 4 program continues to be focused on fostering innovative and potentially transformative technologies in core target areas. 1. Updated Goals & Evaluation Criteria Staff is revamping the program’s guidelines and evaluation criteria to highlight what makes a compelling project pitch for CPAU, to provide more clarity for applicants and better focus the applications on the City’s areas of greatest interest. The updated evaluation criteria shown in item (b.) align with the updated priorities for the utilities customer programs and mirror criteria from SVCE’s Innovation Onramp. Projects that focus on data and information sharing are key priority areas for CPAU, given the safety considerations and staff time constraints for physical pilot projects. After updating the priorities on the PET website, staff will work with local universities and accelerators to solicit high-quality applications closely aligned with CPAU’s highest priorities. What makes a successful application and pilot? a. Is it innovative and potentially transformative? • Is it new and innovative? • If it succeeds, will it matter? b. Does it significantly advance the utility’s priorities? • Added Customer & Community Value • Emissions Reduction & Environmental Benefits • Scalable & Transferable • Equitable • Core Role for City of Palo Alto Utilities c. Is the project the right fit for City of Palo Alto Utilities at the right time? • Staff resource impacts • Acceptance of the terms and conditions in the standardized partnership agreements • Availability of co-funding for project, such as in-kind labor or external grant funding City of Palo Alto Page 5 2. Changing to Annual Cycle for Pilot Project Proposals Staff will also be restructuring the program to review applications to accept proposals for pilot projects once a year. An annual solicitation cycle will: 1) allow all pilot projects app lications to be evaluated at the same time ensuring the best overall fit, 2) allow staff to fit best projects into the annual work planning process, 3) align applications with external funding opportunities, 4) provide more clarity to applicants on timelin e from application date. Applications for academic collaborations and letters of support will still be accepted on a rolling basis, with the expectation of evaluating applications within three weeks of application. 3. Academic Collaboration Structure City of Palo Alto Utilities is a forward-thinking, public utility serving an innovative and environmentally minded customer base. These attributes make it uniquely suited to participate in strategic academic collaborations to ensure that research is grounded in real-world challenges and targeted on areas of high potential value. The City can also greatly benefit from the skills and modeling capabilities of academic researchers as staff has several anonymized data sets which could help inform the City’s actions and improve overall understanding of emerging environmental and market trends. III. FEATURED HIGHLIGHTS FROM FY 2020 AND PAST PROJECTS City of Palo Alto Page 6 FY 2020 Project Highlights In January of 2020 the CPAU sponsored and judged the GridShift Hackathon focused on decarbonizing the energy sector with Powerhouse Ventures and Silicon Valley Clean Energy. Several of the participants work for early stage energy companies and have reached out about applying to the PET program. Staff has had several follow-up discussions with several relevant companies to determine whether the program is a good fit for their current needs, and if they are a good fit for CPAU’s goals for this program. Staff also participated in the evaluation panel for SVCE’s Spring 2020 Innovation Onramp and is exploring several collaborations. A particularly interesting academic collaboration is currently underway with a Stanford graduate student. She is evaluating the impact of the switch to all-electric residences and the implications for the distribution systems, transmission system, electricity generation, and carbon emissions from electricity in California. Highlights from some past projects Enabling High Penetrations of Renewables on the Electric Distr ibution System CPAU was a member of the Technical Advisory Group with SLAC National Accelerator Laboratory and Stanford University as a member of the Technical Advisory Group for PowerNET and VADER: Visualization and Analytics of Distributed Energy Resources. The proposed VADER program is to develop an open-source unified data analytics platform that will enable the integration of high penetrations of renewables on the electric distribution system. CPAU staff provided guidance to help maximize the value of the results of the 3-year research program to Palo Alto’s service territory and other similar small municipal utilities. Demand Response Program with AutoGrid CPAU staff validated a customer-side demand management product from AutoGrid and its potential to benefit CPAU customers. CPAU helped AutoGrid develop the product offering, which forecasts customers' monthly peak demand, giving them a chance to shave energy consumption during a few peak hours each month. AutoGrid credits CPAU with helping them understand utility challenges and helping them launch, and now AutoGrid is a leader in the space, now controlling 5,000 MW of optimized flexible energy resources, citing “7 out of 10 Largest Utilities Control Assets with AutoGrid”. CPAU ran its voluntary demand response program with AutoGrid for several years after completion of the PET project. IV. SUMMARY OF TYPES OF PROJECTS IN FY 2020 AND STATISTICS SINCE PROGRAM LAUNCH A high-level summary of the proposals received this year is shown below in Table 2. A summary of all the projects completed to date is shown in Table 3. City of Palo Alto Page 7 So far this year, none of the applications have reached the threshold of value, quality, and relevance to be a good fit for a pilot project. We are currently in discussions with some applicants about revising their projects and are also evaluating potential regional collaborations. FY 2020 Completed Projects In the first quarter of FY 2020 CPAU elected to close a one -year pilot with the start- up UrbanLeap-- a platform for streamlining intake, ranking, and tracking of innovative pilot projects within local governments. There is potential to use UrbanLeap or another platform for interdepartmental collaboration throughout the City, but the scale of the Program for Emerging Technologies does not warrant using dedicated software as a Utilities -only solution. So far in FY2020 staff has also submitted three letters of support for exceptionally promising very early-stage technologies to research organizations and accelerators. FY 2020 Academic Collaborations CPAU is currently involved in two active academic collaborations. One collaboration is with a Stanford researcher modeling hourly all-electric load shapes for single family homes and the implications for the distribution systems, transmission system and electricity generation in California. The other collaboration is with a San Jose State researcher modeling the impacts of utility scale battery systems on the emissions of the California electricity wholesale market. Table 1. Status and type of applications received in FY 2020. Application Date Technology Area Status Progress to date Desired Outcome End Date 1. 08/2019 Energy Storage Active Committee for M.S. Thesis Proposal Academic Collaboration 08/2021 2. 01/2020 Carbon-free electricity Declined Exploratory consultations Pilot Project - 3. 01/2020 Use data to lower emissions Declined Exploratory consultations Pilot Project - 4. 04/2020 Carbon-free electricity Complete Letter of Support Pilot Project 05/2020 5. 05/2020 Transportation Decarbonization Complete Letter of Support Letter of Support 05/2020 6. 06/2020 Building Decarbonization Active Initial research review Academic Collaboration 10/2020 7. 06/2020 Emissions Mitigation Complete Letter of Support Letter of Support 06/2020 8. 06/2020 Transportation Decarbonization Under Review Initial consultations completed Pilot Project TBD City of Palo Alto Page 8 Table 2. Status to date of all applications to the Program for Emerging Technologies Deadline Total Received Under Review Declined/Closed Active Completed FY 2013 13 0 11 0 2 FY 2014 15 0 11 0 4 FY 2015 15 0 11 0 3 FY 2016 14 0 9 0 5 FY 2017 10 0 7 0 3 FY 2018 10 0 9 0 1 FY 2019 9 0 5 0 4 FY 2020 8 1 2 2 3 TOTAL 94 1 65 2 25 NEXT STEPS Staff will update the program priorities and evaluation criteria in the onlin e application and solicit applications for the annual proposal cycle by the end of 2020 or early in 2021. RESOURCE IMPACT Funding to cover staff time for one pilot project per year and ongoing academic collaborations continues as research, development and demonstration program expenses funded with electric public benefits funds. Depending on the pilot project the staff time is between $25,000 and $100,000. PET does not currently offer any direct funding to pilot projects, and the funds cover the staff time billed to the program. If very high-value projects were identified, Utilities could consider pursuing more than one pilot project a year additional dedicated staff time of approximately 0.3 FTE and funding of $25,000 to $100,000. Skilled staff time is the primary constraint, as additional funding could potentially be secured from electric public benefits funds or other sources such as research grants from the American Public Power Association, the Department of Energy, and others. Some of these sources of funds could also be used to cover the additional staff time, as well as provide funding to pilot projects. ENVIRONMENTAL REVIEW The Utilities Advisory Commission’s discussion of the Program for Emerging Technologies does not meet the definition of a project under Public Resources Code 21065 and therefore California Environmental Quality Act (CEQA) review is not required. City of Palo Alto (ID # 11512) Utilities Advisory Commission Staff Report Report Type: Agenda Items Meeting Date: 9/2/2020 City of Palo Alto Page 1 Summary Title: Overview of Utility Electrification Impacts Title: Discussion of Future Studies of the Potential Impacts of Building Electrification Efforts on the Electric and Gas Utilities From: City Manager Lead Department: Utilities Recommendation This report is submitted to the Utilities Advisory Commission (UAC) for informational and discussion purposes only, so no recommendation is requested. Executive Summary The City’s Sustainability and Climate Action Plan (S/CAP) contains some ambitious goals for reducing carbon emissions in Palo Alto through vehicle and building electrification. The building electrification goals would result in major reductions to natural gas use that would affect the physical infrastructure and financial position of the gas u tility. The increased electric loads associated with electrified buildings and electric vehicle charging equipment would affect the physical infrastructure of the electric system and require significant investment. The goals would also generate significant workload for Utilities Engineering and Operations staff that existing staffing levels could not accommodate. Utilities staff is currently working on impact analyses to evaluate these issues. This staff report summarizes those efforts and identifies some challenges such as hiring qualified staff in the electric utility and potential opportunities such as operating the gas system in a scaled back configuration. Background The following is a timeline of recent climate action in Palo Alto: •April 2016: City Council adopted the ambitious goal of reducing GHG emissions to 80 percent below 1990 levels by 20301 (80% by 2030 goal), 20 years ahead of the State of California 80% by 2050 target. •November 2016: Council adopted the S/CAP Framework,2 which has served as the road map for achieving Palo Alto’s sustainability goals. 1 https://www.cityofpaloalto.org/news/displaynews.asp?NewsID=3534&TargetID=268 2 https://www.cityofpaloalto.org/civicax/filebank/documents/60858 Staff: Jonathan Abendschein CITY OF PALO ALTO City of Palo Alto Page 2 • December 2017: Council accepted the 2018-2020 Sustainability Implementation Plan “Key Actions” as a summary of the City’s work program.3 • Early 2020: The City launched a 2020 S/CAP Update to determine the goals and key actions needed to meet its sustainability goals, including its 80% by 2030 goal. • March 31 – April 14, 2020: A virtual on-demand 2020 S/CAP Community Engagement Workshop was held to solicit feedback on draft 2020 S/CAP Potential Goals and Key Actions on the City of Palo Alto Sustainability website. • Staff presented the Goals and Key Actions the April 13, 2020 City Council Meeting, and at the May 20, 2020 UAC meeting. • Staff reviewed all feedback received and incorporated it into an updated 2020 S/CAP Proposed Goals and Key Actions presented to Council on June 16, 2020.4 The proposed goals and key actions include major efforts to electrify significant portions of the Palo Alto building and vehicle fleet. For example, to meet S/CAP goals, up to 100% of residential buildings may need to be electrified, as well as 80% to 90% of light vehicles and a significant fraction of non-residential heating equipment. This will require major investments in electric distribution infrastructure and careful attention to the physical and financial impacts to the gas utility. Workload impacts could be significant, depending on the pace of electrification. At various Council and UAC meetings individual Council members and Commissioners have advocated for further staff analysis of these issues. Discussion Staff is currently engaged in a number of analyses to assess the impacts of building and vehicle electrification on the gas and electric utilities. Other analyses have been scoped, but not yet started. This report is intended to give an overview of those efforts, to provide some basic information about the gas and electric utilities to guide future discussions, and to communicate some early insights from ongoing analyses. Key Elements of the 80% by 2030 Utility Electrification Impact Assessment Staff’s assessment is intended to address a few key questions: 1. Gas Utility Impacts: Will achieving the 80% by 2030 goals result in a non-viable gas utility? This question includes both operational and financial dimensions, and includes the impact on the bills of customers remaining with the gas utility in 2030. 2. Electric Utility Impacts: What will the impacts of achieving the 80% by 2030 goals be on the electric utility? This question includes both operational and financial dimensions and requires an assessment of new required capital investment. Questions not addressed in this assessment include: 3 https://www.cityofpaloalto.org/civicax/filebank/documents/63141 4 https://www.cityofpaloalto.org/civicax/filebank/documents/77028 City of Palo Alto Page 3 • The customer costs of building electrification. • Legal issues and authorities related to gas service removal; these will be addressed separately as staff updates the S/CAP. • The programs and mandates required to achieve the 80% by 2030 goals. These will be addressed through the S/CAP update process. • Financing of the private and public community costs of electrification. These issues will be addressed as part of (and subsequent to) the S/CAP update process. • Impacts to the General Fund revenue sources due to shifts in the quantity and type of utility services provided to customers. • CEQA review of the 80% by 2030 goals. This will be addressed as part of the S/CAP update process. Analytical Approach To answer the two key questions listed above, staff intends to complete a series of three analyses: 1. Utility cost to electrify: Staff will assume an “end state” for the gas and electric utilities based on the proposed 80% by 2030 S/CAP goals. This end state represents customer loads once the 80% by 2030 S/CAP goals have been achieved. Staff will then assess all operational activities and investment required to achieve that end state (e.g. gas system abandonment activities, new electric distribution system investment to accommodate electrified buildings and increased EV charging). Staff will calculate the cost of these activities to generate the utility’s cost to electrify. This work is being commenced this summer and an analysis of operational activities needed to electrify single-family homes is expected to be completed by fall of 2020. Additional work will be needed to assess multi-family and commercial building operational impacts and no timeline for this work has been determined yet. 2. Future annual utility costs: Staff will assess ongoing annual utility costs for the end state described above for both the electric and gas utilities. Staff will use this information to calculate sample “end state” customer bills for various sectors and consumption levels. 3. Workload assessment: Staff will calculate the City efforts needed to support the community in achieving the end state described above. This includes both municipal and utility workload, including development review by various departments, field work required to support customer conversions, and staffing and funding required to support capital investment and other operational activities required to achieve the 80% by 2030 goals. Staff is approaching these analyses in stages. Staff’s current efforts include: • An analysis of the cost and staffing required to fully electrify all single-family homes in Palo Alto. The analysis will address both gas utility and electric utility operational costs and investments. This simplified analysis will act as the basis for a future, more comprehensive analysis that includes the multi-family and commercial sectors. • An assessment of the vehicle charging network required to support the City’s 80% City of Palo Alto Page 4 by 2030 vehicle electrification goals. This assessment is a necessary part of determining the overall electric utility operational costs and investments required to achieve the 80% by 2030 goals. These two analyses are expected to be completed by the end of September 2020 and will be presented to the UAC in the fall. Staff will then extend these analyses by: • Assessing any additional operational costs and capital investment associated with building electrification in the multi-family and commercial sectors. • Assessing the annual costs for the electric and gas utilities once the 80% by 2030 goals have been achieved and calculating sample customer bills under this scenario. • Assessing the City’s workload (both utility and other municipal) to achieve the 80% by 2030 goals. These later analyses would ideally be completed in late 2020, but may not be completed until 2021 due to staffing constraints. Opportunities to Explore Staff’s effort to scope these analyses and complete initial work has revealed some potential opportunities. For example, staff is exploring the viability of running a scaled down gas system. A couple of key insights hint at this being a real possibility: 1. It is likely operationally possible to run a gas system that serves only commercial and some multi-family customers. If all single-family residential customers and some multi-family customers electrified their homes (as one key -action in the S/CAP states), the gas system is designed in such a way that it could likely reliably and resiliently serve only Palo Alto commercial areas. Some existing gas infrastructure in predominantly single-family areas might need to remain to serve neighborhood commercial centers, schools, and other civic buildings, depending on how easy it would be to electrify those uses. 2. Most gas utility costs decrease with declining customer count, customer loads and miles of gas main in service. About 35 to 40% of the gas utility’s costs are volumetric, meaning that they decrease with decreasing gas consumption. About 30% are allocated to the gas utility based on the number of customers. For example, staff time devoted to customer service activities are allocated based on the number of customers for each utility. As the number of gas customers decreases, the customer service staff full-time equivalents (FTEs) allocated to the gas utility will decrease as well. Similar dynamics apply to maintenance and engineering activities. Of the remaining costs, 10 to 15% relate to capital investment, and the remaining 20% are fixed, regardless of the size of the gas utility. The insights above indicate a potential future in which the City can achieve its sustainability goals while preserving a significantly scaled back gas utility. More analysis is needed to determine feasibility. It also points to a potential need for the City to be City of Palo Alto Page 5 intentional about the way it electrifies. For example, if widespread partial electrification of single-family homes takes place, meaning that the same gas infrastructure is needed to serve homes using significantly less gas, t his could lead to an unsustainable financial situation for the gas utility and for remaining gas customers. If, on the other hand, customers steadily electrify block by block, and gas infrastructure is removed, the viability of the gas utility could be maintained. Maintaining the viability of a business-serving gas utility while achieving the City’s sustainability goals is an important potential option to consider. The City may want to do so to minimize financial impacts of sustainability efforts on the business community and avoid the loss of business in Palo Alto. It also may be very expensive to electrify certain larger-scale commercial end uses while still reducing carbon emissions, meaning other emissions reduction measures would be more cost effectiv e. Multi-family customers may also have central heating that is technically infeasible or very expensive to convert. Potential Barriers Electric Utility Operations and Engineering staffing is likely a critical barrier to achieving the S/CAP goals. Electric Engineering staff time is required for reviewing building electrification projects or installation of new charging infrastructure. The volume of project review applications will be quite high if the City is to achieve its sustainability goals, necessitating the hiring of additional staff or professional contractors. While some efficiencies could likely be achieved by doing system-wide studies of new infrastructure needed, some level of project by project analysis would be needed. To provide some perspective, to process the 30 project applications currently in queue with the City’s multi-family EV charger program requires anywhere from 0.25 to 0.5 FTE of staff time. Supporting dozens of commercial and multi-family EV charger applications each year combined with hundreds or even thousands of residential panel upgrades would require significant additions to staff, perhaps even doubling existing staff. This estimate does not take into account the additional engineering design and inspection work that must be done to oversee construction work needed to increase distribution capacity to accommodate additional electric loads on the system. Over the past 10 years, the Electric Engineering Division has had challenges hiring and retaining experienced engineers. The Division has been hiring entry-level staff and training them. The Division is also working with Human Resources to expand and improve the candidacy pool for vacant positions by posting positions on external websites and hiring professional recruiters. This is a significant organizational barrier to achieving the City’s sustainability goals. Staffing issues for Electric Operations are potentially even more significant. The Division has had difficulty filling existing vacancies. While contractors can fill some of the gap, it has been challenging to hire contractors due to a shortage of line workers throughout the industry and the high level of infrastructure investment being done by PG&E. Line City of Palo Alto Page 6 workers are needed to complete service upgrades and smaller capacity upgrades to assets such as line transformers. City staff is needed to oversee contracts and complete inspections. Lastly, these limitations take place in the context of a growing backlog of infrastructure investment. The Utilities Department estimates the need for additional engineers and the filling of line worker vacancies in order to increase regular infrastructure investment to maintain current levels of electric system reliability. This will be even more critical if the community intends to rely even more on electricity in the future. Staff is working to quantify these issues further as it completes its analysis. Timeline Staff’s tentative timeline for completing this entire analytical effort is June of 2021, but staff will endeavor to complete the analysis earlier as staff time permits. Resource Impact These analyses will require approximately 1.25 FTE of staff time over the next year, which will be absorbed using existing staff and consulting resources. Policy Implications These analyses are intended to support the City’s sustainability goals as embodied in the S/CAP and, additionally, to ensure the City’s safety, reliability, and cost- effectiveness goals for its utilities continue to be achieved. Stakeholder Engagement This is currently primarily an internal analysis effort, but once some initial results are completed, outreach and education will be needed. Most likely this would be undertaken as part of the S/CAP outreach effort rather than as part of a separate engagement effort solely on this topic. Environmental Review The UAC’s review of these analytical efforts does not constitute a project under section 21065 of Public Resources Code and section 15378(b)(5) of CEQA Guidelines, as an administrative governmental activity which will not cause a direct or indirect physical change in the environment. Attachments: • Attachment A: Utility Electrification Impacts September 2, 2020 www.cityofpaloalto.org STUDIES OF THE IMPACTS OF ELECTRIFICATION ON THE CITY’S GAS AND ELECTRIC UTILITIES Staff: Jonathan Abendschein 2 Goal of the Studies •The Sustainability and Climate Action Plan (S/CAP) has ambitious goals for reducing carbon through electrification of transportation and buildings •These will impact both the gas and electric utilities. •Key questions to answer: •Gas Utility Impacts: Will achieving the 80% by 2030 goals result in a non-viable gas utility? •Electric Utility Impacts: What will the impacts of achieving the 80% by 2030 goals be on the electric utility? •Studies will involve multiple analyses of different issues to answer these questions. •Goal is to complete studies by the end of 2020, actual completion will depend on staff availability. 3 Opportunities and Barriers Could the City operate a scaled-back gas utility? •Partial electrification of multi-family and commercial uses may be preferable for technical and economic reasons •Single-family electrification could enable “pruned” gas system serving concentrated multi-family/commercial areas. •Gas utility cost structure may allow for reasonable rates for a scaled back system. Electric Utility staffing will be a key challenge •The workload associated with electrification would require scaling up Engineering and Operations teams. •Filling vacancies for these teams at existing staffing levels has been a challenge. •Finding and keeping contractors has also been difficult. Jonathan Abendschein Assistant Director, Utilities Resource Management Jon.abendschein@cityofpaloalto.org (650) 329-2309