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HomeMy WebLinkAbout2020-11-04 Utilities Advisory Commission Agenda PacketMATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE COMMISSION AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE UTILITIES DEPARTMENT AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. 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. NOTICE IS POSTED IN ACCORDANCE WITH GOVERNMENT CODE SECTION 54954.2(a) OR 54956 Supporting materials are available online at https://www.cityofpaloalto.org/gov/boards/uac/default.asp on Thursday, 5 days preceding the meeting. ****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. AGENDA REVIEW AND REVISIONS III. 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. IV. APPROVAL OF THE MINUTES Approval of the Minutes of the Utilities Advisory Commission Meeting held on October 7, 2020 V. UNFINISHED BUSINESS - None VI. UTILITIES DIRECTOR REPORT VII. NEW BUSINESS 1. Staff Recommendation That the Utilities Advisory Commission Accept a Presentation Action on 2020 and 2021 State Legislation, and Recommend the City Council Affirm the Continuation of the Current Utilities Legislative Guidelines Through 2021 2. Staff Recommendation That the Utilities Advisory Commission Recommend the City Action Council Approve the 2025 Base Resource Power Supply Contract for the Central Valley Project With Western Area Power Administration, to Preserve the City's Options to Maintain, Terminate or Reduce its Allocation Until June 30, 2024 3. Discussion of Electrification Cost and Staffing Impacts on the City of Palo Alto's Discussion Electric and Gas Distribution Systems UTILITIES ADVISORY COMMISSION – SPECIAL MEETING WEDNESDAY, November 4, 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 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE COMMISSION AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE UTILITIES DEPARTMENT AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. 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. 4. Discussion of Electric Vehicle Charger Needs Assessment to Reach 80% Electric Vehicle Discussion Penetration by 2030 VIII. COMMISSIONER COMMENTS and REPORTS from MEETINGS/EVENTS IX. FUTURE TOPICS FOR UPCOMING MEETINGS: December 02, 2020 SUPPLEMENTAL INFORMATION - The materials below are provided for informational purposes, not for action or discussion during UAC Meetings (Govt. Code Section 54954.2(a)(3)). Informational Reports 12-Month Rolling Calendar Public Letter(s) to the UAC • Informational Update of the Advanced Metering Infrastructure (AMI) and Fiber Network Expansion Projects • Informational Update on REC Exchanges Completed in Accordance With the City's Amended Electric Supply Portfolio Carbon Neutral Plan MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE COMMISSION AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE UTILITIES DEPARTMENT AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. 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 6 UTILITIES ADVISORY COMMISSION MEETING MINUTES OF October 7, 2020 SPECIAL MEETING CALL TO ORDER Chair Forssell called the meeting of the Utilities Advisory Commission (UAC) to order at 4:02 p.m. Present: Chair Forssell, Vice Chair Segal, Commissioners Danaher, Jackson, Johnston, Scharff and Smith Absent: ORAL COMMUNICATIONS None. APPROVAL OF THE MINUTES Vice Chair Segal moved to approve the minutes of the September 2, 2020 meeting as presented. Commissioner Jackson seconded the motion. The motion carried 6-0 with Chair Forssell, Vice Chair Segal, and Commissioners Danaher, Jackson, Johnston, and Smith voting yes, and Commissioner Scharff absent. AGENDA REVIEW AND REVISIONS Chair Forssell reported that Commissioner Comments would be heard after New Business items. REPORTS FROM COMMISSIONER MEETINGS/EVENTS None. UTILITIES DIRECTOR REPORT Dean Batchelor, Utilities Director, delivered the Director's Report. SunShares 2020 Solar Group-Buy Program - For the fifth year in a row, the City of Palo Alto is participating in Bay Area SunShares, a solar group-buy program administered by the Business Council for Climate Change (BC3). Three solar installers -- Solar Technologies, SkyTech Solar, and Infinity Energy -- have been vetted and selected through an RFP process. This year the program also includes discounts on battery storage. The program runs for a limited time: registration opened on September 1 and closes on November 30. CPAU will hold a free educational workshop on Tuesday, October 27. Contracts for PV installations must be signed by December 31, 2020. This year, electric vehicles are not part of the program. Refrigerator Recycling Program: City of Palo Alto Utilities (CPAU) has reached its goal of picking up 300 refrigerators and freezers through a program started in 2019 and run in part with grant funds from the Bay Area Air Quality Management District (BAAQMD). Customers were offered a $50 rebate to have their up old refrigerators and freezers picked up. Because of our customers’ participation in this program, these older, low-efficiency refrigerators will not go into landfills or be refurbished and sold in the secondhand market. In addition, 95% of parts and materials are recycled, including refrigerants, which are potent greenhouse gases. DRAFT Utilities Advisory Commission Minutes Approved on: Page 2 of 6 Our customers have made a lasting, positive change that will benefit this community and the environment for many years to come. CALeVIP: We are encouraging commercial customers to prepare now to take advantage of financial incentives coming soon (December 16) for installing EV infrastructure. As you may recall, CPAU has partnered with the California Electric Vehicle Infrastructure Project (also known as CALeVIP) to provide rebates for EV charger purchases and installation costs. CPAU was awarded $1M from the California Energy Commission and we have contributed $1M in matching funds to this project. We expect that over the next 2 years the program will result in 100 to 200 new Level 2 chargers and 10 to 20 new DC fast chargers in Palo Alto. To put this in perspective, we currently have about 800 Level 2 publicly accessible chargers and 30 DC fast chargers in town. Details are available at the CALeVIP, Peninsula- Silicon Valley Incentive Project webpage at CALeVIP.org We are also taking this opportunity to extend our EV Charging technical assistance services to our small to medium businesses to get them to consider taking advantage of opportunities like CALeVIP. Home Efficiency Genie, 2nd Webinar: City of Palo Alto Utilities Home Efficiency Genie’s next webinar will be held on Tuesday October 6th from 6 – 7 PM. The webinar will highlight ideas to help customers prepare their homes for fall and beyond. Since many of us are spending more time than ever inside our homes, the webinar will provide useful tips and suggestions to help residents be more comfortable, healthier, and safer, plus ideas to save energy and water and therefore reduce bills. Topics that will be covered in the webinar include: furnace filter replacement; chimney concerns; carbon monoxide and smoke detection devices; indoor air quality; windows, and other seasonal messages. The presentation will be led by Tony Jung – our expert Genie building science professional – who has performed over 350 in-home assessments in Palo Alto. Also presenting will be Emily Yarsinske from Valley Water with ideas for saving water. The Genie webinar will provide valuable takeaways to use now and to get you ready for the colder winter weather ahead. UNFINISHED BUSINESS None. NEW BUSINESS ITEM 1: ACTION: Staff Recommendation That the Utilities Advisory Commission Recommend the City Council Adopt a Resolution Updating the City's Carbon Neutral Gas Plan to Continue to Achieve Carbon Neutrality for the City's Natural Gas Supply Portfolio. Jonathan Abendschein, Assistant Director of Utilities, introduced Karla Dailey, a Senior Resource Planner and Micah Babbitt, Resource Planner, who presented to the item to the Commission. Karla Dailey, Senior Resource Planner, acknowledged that the program has been in place for a few years and now is the time to review and refine the program. Micah Babbitt, Resource Planner, commented that the two main objectives of the presentation are to review the Carbon Neutral Gas Plan to date, review carbon offsets, and recommend revisions and clarifications to the Carbon Neutral Gas Plan. In December 2017 Council adopted the Sustainability and Climate Action Plan which includes a goal to reduce emissions by 80 percent of year-1990 levels by year-2030. A Council- approved key action is to purchase carbon offsets and evaluate local offsets as an option. Carbon offset means the reduction of carbon equivalent emissions created to compensate for emissions made elsewhere. There is a robust carbon offset market already in place. Carbon offsets are not a direct reduction or substitute for reducing local emissions. Carbon offset concerns included additionality, double counting, not a scalable solution, and enabling buyers to continue to create emissions. Carbon offsets are a component in California’s Cap & Trade program, and the California Air Resources Board (CARB) has developed protocols to help mitigate Utilities Advisory Commission Minutes Approved on: Page 3 of 6 carbon offset concerns. Those protocols do not address the concerns regarding scalability and buyers still creating emissions. There are six project types that CARB currently allows which included U.S. Forest Projects, Urban Forest Projects, Livestock Projects, Ozone Depleting Substances Projects, Mine Methane Capture Projects, and Rice Cultivation Projects. The City’s plan is a 100 percent carbon-neutral gas portfolio with a rate impact of less than $0.10 per therm. The plan also included purchasing high-quality offsets with a preference for local and California projects, and spot purchases trailing 6-12 months of gas sales. The City has five Master Agreements with brokers from whom the City purchases carbon offsets. Regarding local City projects, the Ozone-Depleting Substance for refrigerator recycling program may provide less than 1 percent of offsets for the City. Staff is collaborating to identify a possible Urban Forestry projects, but any offsets generated would not be available for 15-20-years and would be a small amount. Staff’s recommended plan revisions included no changes to spot purchases, no change to CARB approved projects, mirroring CARB’s vintage requirements, and authorizing up to a 10 percent premium for California projects, and limiting individual carbon offset transactions to a maximum of $19 per ton. Commissioner Scharff opined that he did not feel that the concern regarding offsets running out was a valid concern because when the quantity of offsets gets low, the price goes up, and buyers stop buying carbon offsets. He emphasized that the City should be proud of the fact that it has a bridging strategy in place to reduce emissions and that the preference for California offsets did not make sense. In answer to Commissioner Scharff’s questions, Babbitt explained that there is a lot of inherent uncertainty around measuring CO2 removal from projects. There is no concrete answer of if it’s a true one to one ratio in terms of buying carbon offsets. Abendschein expressed confidence that offsets do reduce greenhouse gas emissions, and it is an appropriate bridging strategy. Dailey reported that California projects may offer co- benefits such as jobs, lifting communities, and air quality improvement. In reply to Commissioner Jackson’s inquiry of if the 10 percent increase is authorized what is the likelihood that offsets would be purchased, Babbitt answered it was a low probability. In response to Commissioner Johnston’s statement that the only change to the plan is authorizing the 10 percent premium, Babbitt remarked that there is also no restriction on vintages. Commissioner Johnston reported that there has not been much push back from the community in terms of rate increases. Vice Chair Segal requested that the objective of the plan be restated to say something about the goal to reduce gas consumption with a bridging strategy that includes carbon offsets. In response to Vice Chair Segal’s question on if more reforestation projects will be available because of the recent fires, Dailey answered that it’s possible, but the City does not invest in projects that will produce offsets in the future and that California reforestation projects have not presented themselves. In reply to Chair Forssell requesting clarification on the Cap and Trade market as well as vintage projects, Babbitt explained that the difference between the offsets the City purchases versus offsets that get put into the Cap and Trade Compliance Pool is there is an additional certification that developers have to go through. Once that takes place, those offsets cannot be sold in the Voluntary Market. The Cap and Trade Compliance Offsets sell for 10 to 20 percent more than those in the Voluntary Market. U.S. Forestry projects are the vast majority of offset projects that are developed, and that is where the market is. In terms of vintages, CARB picked the year of 2006, and Staff did not know the justification for that date. Dailey added that the confidence that the CARB protocols provide is superb and buying offsets from CARB approved projects types and vintages removes those offsets from the market so other buyers cannot buy them for compliance. Chair Forssell agreed that the purchase of California offsets at a premium did not make sense. Utilities Advisory Commission Minutes Approved on: Page 4 of 6 In response to Council Member Cormack’s inquires about the $20 per resident cost, Babbitt answered that it is based on per residential account. Commissioner Smith emphasized that the Commission agreed to hold rates flat and now revenues are being raised for Bucket 1 Renewable Energy Certificates (RECs). He did not support a 10 percent premium for California offsets. Commissioner Danaher stated the UAC had made the policy suggestion for the Carbon Natural Gas Plan, not the City Council. Chair Forssell noted that the UAC did not suggest there be a preference for buying California offsets. Several Commissioners supported Staff rewriting the objective. In answer to Commissioner Smith’s request for clarification regarding vintage projects, Dailey reported that it is to align with CARB’s rules so that any offsets that are purchased are in alignment with the protocols that are set forth and that nobody else can buy those offsets and use them for compliance. ACTION: Commissioner Scharff moved, seconded by Commissioner Johnston that the Utilities Advisory Commission recommend the Council adopt a Resolution updating the City’s Carbon Neutral Gas Plan, which includes the following key elements: · Continue the Carbon Neutral Gas Plan · Continue to restrict purchases to carbon offset projects that are accepted project types of California Air Resources Board (CARB) including U.S. Forest, U.S. Urban Forest, U.S. Livestock, U.S. Sourced and Destroyed Ozone Depleting Substances, U.S Mine Methane Capture, and U.S. Rice Cultivation; or any other Project Type subsequently approved by CARB · Restrict purchases to CARB’s vintage requirements · Authorize up to a 10% premium to be paid for offset projects developed in California · Continue to have a preference for California projects as long as it does not result in a price premium · Limit individual transactions to under $19 per ton of CO2e or 10₵/therm · Continue to limit transactions to spot purchases and · Continue to purchase offsets in quantities that match gas sales volumes. The motion carries 7-0 with Chair Forssell, Vice Chair Segal and Commissioner Danaher, Jackson, Johnston, Scharff, and Smith voting yes. ITEM 2: DISCUSSION: Discussion and Update on the Adoption and Integration of Distributed Energy Resources in Palo Alto Chair Forssell summarized that the item has been brought back for additional discussion around the other pieces of Distributed Energy Resources within the City. Jonathan Abendschein, Assistant Director of Utilities introduced Shiva Swaminathan, Senior Resource Planner, who was available for questions, but who did not have a presentation. In reply to Commissioner Jackson’s inquiries regarding the value of shifting electric consumption outside of peak times, Swaminathan noted that the City does care about time-shifting usage outside of peak times because energy is, more costly in the peak time, it impacts the distribution system, it is imperative for renewable resource integration in the grid and there are decarbonization benefits. Regarding Time of Use Rates, Time of Use Rates were tested as part of a broader pilot project called Customer Connect Pilot Project. The Customer Connect Pilot Project had several objectives and one was to provide AMI meters and hourly data for customers. The outcome of the Time of Use portion of the pilot project showed the savings to customers was relatively small due to electric rates already being low and the cost differential between peak and off peak being small at the time, resulting in a correspondingly small rate difference in those periods. Utilities Advisory Commission Minutes Approved on: Page 5 of 6 The cost differential has grown substantially since then. In regards to whether a future Time of Use rate would be a static rate or a dynamic rate, the City did not want to be at the forefront of dynamic pricing, but would look to implement it when it matured. In regards to Energy Storage Systems (ESS), there are no plans to incentivize the installation of ESS Systems, but the City support it because there are resiliency benefits for ESS Systems and the enable greater self-consumption of solar energy. Commissioner Jackson concluded that the City is investing a lot of time and resources for a Static Time of Use Rate that will not have a big impact. Dynamic Time of Use Rate is a lot more effective in driving behavior and that should be the focus for the City. In response to Vice Chair Segal’s question on why there is a Greenhouse Gas reduction from solar and whether Time of Use Rates were offered to businesses, Swaminathan explained that the Greenhouse Gas reductions were related to reductions in gas generation on the statewide electric grid. The Time of Use Rate was available to all commercial customers but only one commercial customer has used it. Vice Chair Segal commented that she’d like to see the economics associated with each system. In response to Commissioner Johnston’s questions about time of use and cost of service and about the planned competitive assessment, Abendschein confirmed the assumption that there is no legal restriction on Time of Use Rates if they conform to cost of service. Regarding the work item to complete a competitive assessment, Abendschein stated that as storage costs and solar costs decline the City needs to stay aware of its competitiveness relative to grid disconnection. Dave Yuan, Strategic Business Manager, responded to Commissioner Johnston’s question regarding the timeline for the AMI project, reporting that Staff is in the final evaluation stage and is hopeful that the progress on the evaluation and the selection process for the Request for Proposal (RFP) for the AMI will be brought to the Commission by the end of 2020 or the beginning of 2021. Chair Forssell found it interesting that electric vehicles, Photovoltaic (PV) and energy efficiency are the dominant Distributed Energy Resources in the City. Also, adding a heat pump water heater or heat pump space heater per unit is comparable to half the CO2 reduction potential as getting an electric vehicle. In reply to Chair Forssell’s inquiries about the discontinued Commercial Demand Response Program, the new MyCPAU Portal, and what transactive markets meant, Swaminathan noted that because the Commercial Demand Response Program required a lot of resources, Staff decided to put the program on hold due to competing priorities. In response to Chair Forssell’s question about how the City had gotten commercial customers to reduce load during recent grid emergencies, Abendschein reported that the City had requested that several large customers during the summer run their backup generators to relax the load on the grid. The State had temporarily suspended its policy against running backup generation for demand response to enable that and Staff is trying to push the State to clarify what the policies will be in the long term regarding back up generations during tight grid situations. Yuan reported that the new MyCPAU Portal has about a 60 percent adoption rate and overall the feedback has been positive. Swaminathan reported that a transactive market meant enabling customers to trade energy among each other. Commissioner Jackson encouraged Staff to explore a machine to the machine communication mechanism that can inform a customer to reduce their load during peak hours. ACTION: None Utilities Advisory Commission Minutes Approved on: Page 6 of 6 COMMISSIONER COMMENTS Vice Chair Segal mentioned that it is great that Tesla stepped up and provided education for their customers when the state asked Californians to reduce usage to avoid Brown Outs or Black Outs. ITEM 3: ACTION: Selection of Potential Topic(s) for Discussion at Future UAC Meeting. Commissioner Danaher wanted an update on how the pandemic is affecting revenues, costs, and Staff. Also, he asked to invite the Development Center staff to provide a presentation on the permitting process for solar and electrification. Chair Forssell seconded that suggestion. Chair Forssell requested more information regarding the new customer portal and how it is being received and used. Commissioner Jackson said he wanted an update on the Bucket 1 REC sales program recently approved by Council. ACTION: None NEXT SCHEDULED MEETING: November 4, 2020 Commissioner Scharff moved to adjourn. Commissioner Jackson 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 5:52 p.m. Respectfully Submitted Tabatha Boatwright City of Palo Alto Utilities Utilities Advisory Commission Minutes Approved on: December 02, 2020 Page 1 of 9 UTILITIES ADVISORY COMMISSION MEETING MINUTES OF November 4, 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: AGENDA REVIEW AND REVISIONS None. ORAL COMMUNICATIONS Gary Lindgren asked what is a typical project for Carbon Offsets? He suggested that instead of sending money outside of the city and the state, that the money be used to replace gas fire equipment with heat pumps as well as start an incentive program that helps residents convert their appliances to more sustainable models. He concluded that the city’s electricity is not carbon neutral and that the city should not promote that it is. APPROVAL OF THE MINUTES Chair Forssell indicated that Commissioner Smith had made a request instead of Commissioner Jackson. Commissioner Danaher moved to approve the minutes of the October 7, 2020 meeting as presented with the change as noted on Item 3 where Commissioner Smith not Jackson requested an update on Bucket 1 REC sales. 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. UNFINISHED BUSINESS None. UTILITIES DIRECTOR REPORT Dean Batchelor, Utilities Director, delivered the Director's Report. Update on COVID-19 – In late August, Governor Newsom released a “Blueprint for a Safer Economy,” which created a tiered system of COVID-19 restrictions that all counties in California must follow. Santa Clara County is currently in the Orange Risk (Tier Three) and will stay there until the state moves the county forward into a lesser or more restrictive tier depending on the number of COVID-19 cases. The current tier three restrictions are different from what was previously in place in the following ways: • Certain indoor businesses and activities may resume with a limited capacity of 25%, including gyms, fitness centers, pools, movie theaters, worship services, restaurants, Utilities Advisory Commission Minutes Approved on: December 02, 2020 Page 2 of 9 and family entertainment centers that allow for naturally distanced activities such as bowling alleys and climbing walls. Retail businesses and libraries no longer have a capacity limitation. Indoor shopping malls no longer have a capacity limitation, but common areas must remain closed. Museums and zoos may increase their capacity limit to 50% of normal. Bars, brewpubs, and breweries may now operate outdoors. • All businesses must ensure that everyone visiting their facility is able to maintain at least a six foot distance from everyone outside of their household. • Palo Alto’s emergency proclamation remains in place, which means that the city continues its moratorium on tenant evictions and utilities service disconnections for bill non-payment. CPAU still offers expanded access to utilities rate assistance and payment relief programs. • A number of programs and services which previously involved in-person consultations or in-home visits have been converted to a virtual format. The Home Efficiency Genie is one example of this format change; we now offer virtual rather than in-home consultations, including a home electrification readiness assessment. Key Account and business utility representatives have been sharing recovery resources with the community to assist with a smooth transition. • The city is providing webinars and information online in place of in-person workshops to help customers understand how to maximize home energy and water efficiency, as well as comfort and safety, while learning about sustainability and climate action goals. The Switch is On Campaign – CPAU has been collaborating with the Building Decarbonization Coalition and other utilities on a consumer outreach campaign to promote home electrification. The campaign is aptly named “The Switch is On”. CPAU is planning to run a digital blitz of this campaign in November and early December, and will include running digital ads on popular online platforms as well as leveraging the city’s social media channels and e-newsletters. The digital ads will direct traffic to the website “switchison.org,” which provides information on how to make the switch from natural gas to electric appliances. Clean Fuel Rewards Program – Electric vehicle rebates will be coming soon to all CPAU customers. We will be participating in the Clean Fuel Rewards Program which is a statewide point-of-sale EV rebate. The program will launch by the end of the year. We expect the rebate to be about $1,000 for the purchase of EVs at participating dealerships. CPAU is contributing up to $1 million dollars in Low Carbon Fuel Standard funds towards this program. SunShares Solar Group-Buy Workshop – On October 27, CPAU hosted a webinar to inform residents about the Bay Area SunShares solar group-buy program. The event was well attended with 44 participants, as well as representatives from all three solar installation companies, for Q & A at the end of the presentation. Clean and Efficient Heating and Cooling with the Home Efficiency Genie – CPAU will be hosting its third educational webinar with the Home Efficiency Genie on November 10 at 6:30 PM. In this session, residents will learn about advances in heating and cooling technologies with an emphasis on efficient, all-electric heat pump systems. Find details and link to register at cityofpaloalto.org/workshops UNFINISHED BUSINESS None. Utilities Advisory Commission Minutes Approved on: December 02, 2020 Page 3 of 9 NEW BUSINESS ITEM 1: ACTION: Staff Recommendation That the Utilities Advisory Commission Accept a Presentation on 2020 and 2021 State Legislation, and Recommend the City Council Affirm the Continuation of the Current Utilities Legislative Guidelines Through 2021 Heather Dauler, Senior Resources Planner, noted that the 2020 Legislative session was very brief due to the Coronaviruses Pandemic (COVID-19). There was a fifth failed attempt at passing a bill regarding energy and long-duration storage. Several bills did past which included new subsurface installation mandates for construction which will start in 2023 as well as requirements for the state to stockpile Personal Protective Equipment (PPE) for essential workers. In terms of the 2021 Legislative session, it is predicted that there may be another attempt at mandating storage in terms of energy as well as a bill regarding Resource Adequacy due to recent blackouts, and regionalization. For water, predicted bills that may come forward are affordability in terms of COVID-19 and existing programs, and wildfire impacts on water supply. Due to the shorten 2020 Legislative session, staff believes that many of the bills that were dropped will reappear in 2021. In conclusion, Senator Hill is terming out with Josh Becker taking his place. Commissioner Danaher shared that Josh Becker supports clean energy. In response to Commissioner Jackson’s inquiries regarding electric vehicle usage and mandates, Dauler answered that an Executive Order regarding new sales of cars has been issued but she predicted that the Executive Order would not move to new legislation. Dauler continued to the Utilities Legislative Guidelines and she noted that the guidelines provide direction to staff so that staff does not have to come back to the Commission or Council when staff wants to move forward on a piece of legislation or regulations. She reported that the guidelines have worked well and staff is not suggesting any changes. Commissioner Danaher supported the staff recommendation. In response to Commissioner Smith’s queries regarding how COVID-19 may impact the 2021 Legislation and bill prioritization, Dauler explained that bills were passed in 2020 even under the current pandemic and she predicted that the Assembly will continue to meet in 2021. Regarding prioritization, the Speaker of the Assembly and the President of the Assembly have their own priorities as well as each Chairperson of each Committee and each Member. In response to Chair Forssell’s question regarding how often staff brings forward legislative items to the Commission or Council for guidance, Dauler indicated that with the fast pace of legislation, it is difficult for staff to meet the 5-week deadline that is required by the city. Staff does come forward to Council when there is a bill that does not fit into the guidelines or is very controversial. Cormack commented that it has been suggested several times that the city’s sustainability goals would be achieved more quickly if there is some standardization across the state. She advised the Commission to think about that for the future. Commissioner Scharff and Commissioner Danaher agreed. ACTION: Commissioner Danaher moved that the Utilities Advisory Commission accept the staff presentation regarding 2020 and 2021 state legislation, and recommend the City Council continue the 2020 Utilities Legislative Policy Guidelines into 2021. Commissioner Jackson seconded the motion. The motion carried 7-0 with Chair Forssell, Vice Chair Segal, and Commissioners Danaher, Jackson, Johnston, Scharff, and Smith voting yes. Utilities Advisory Commission Minutes Approved on: December 02, 2020 Page 4 of 9 ITEM 2: ACTION: Staff Recommendation That the Utilities Advisory Commission Recommend the City Council Approve the 2025 Base Resource Power Supply Contract for the Central Valley Project With Western Area Power Administration, to Preserve the City's Options to Maintain, Terminate or Reduce its Allocation Until June 30, 2024 Jonathan Abendschein, Assistant Director of Utilities Resource Management, indicated that the Western Base Resource Electric Supply Contract makes up the vast majority of the electric supply portfolio. Lena Perkins, Senior Resource Planner, reported that staff’s recommendation is to execute the full share of the 2025 Western Contract. The Western Electric Supply Contract is a large federal hydroelectric contract, it is currently 40 percent of the city’s electric supply, it has somewhat predictable costs but highly variable output, and holds significant risks and uncertainty in future costs as well as the future generation. It has the potential to be a competitively priced carbon-free electric resource. The city has the option to reduce or terminate the contract until June 30, 2024, and so staff will continue to evaluate alternatives until then. A new key provision is that the city has the option to reduce or terminate the new contract every 5-years and there is a new overall rate formula set every 5-years. The contract must be executed by March 16, 2021, and staff will make a final recommendation to maintain, reduce, or terminate the city’s share of the 2025 Western Base Resource Electric Supply contract by the June 2024 deadline. Abendschein added that the contract requires significant levels of coordination among the other publicly owned utilities when it comes to negotiating with the federal government. Northern Power Agency coordinates those negations on behalf of the publicly owned utilities and in the last couple of years there have been opportunities to improve the contract. The city continues to be involved in those negotiations in addition to considering all other options. Commissioner Scharff agreed that the contract has vastly improved and he supported approval of the contract. In response to Chair Forssell’s question of if the city negotiates with the bureau directly as a city or through the Northern California Power Agency (NCPA), Commissioner Scharff answered that it is through the NCPA, but the city is extremely involved in the negotiations. In reply to Commissioner Johnston’s inquiries regarding if the price of the contract is in alignment with the city’s other sources and what are the downsides to signing the contract, Perkins answered yes, historically it has been a cost base resource that is only available to public utilities and staff continues to monitor it. She reported that she could not see any downsides to signing the contract. Commissioner Johnston supported a recommendation to approve the contract. In answer to Commissioner Smith’s query regarding other risks, Perkins predicted that the two biggest risks are new costs regarding the implementation of the new federal biological opinions and the allocation of those costs. The other major risk is the amount and timing of the generation the city receives from this and the unimpaired water flow. In answer to Commissioner Smith’s question regarding viable alternatives, Perkins reported that New Mexico Wind could be an alternative because it has a high capacity factor and Northwest Wind because the city does own transmission up to Washington State. In reply to Commissioner Smith’s interest in how a customer’s water bill will be affected if it’s $35 per megawatt-hour versus $70 per megawatt-hour and what scenarios would make the contract be deemed uneconomical, Perkins reported that an additional 1/3 of a cent would be added to a customers bill if the rate is $35 per megawatt-hour. Regarding the contract being deemed uneconomical, she stated that in general the resource can be shaped to capture the highest value hours of the day but it cannot be shaped seasonally. In a low hydraulically year, electricity prices will be higher, but there is tremendous value in the flexible dispatchable capability. Utilities Advisory Commission Minutes Approved on: December 02, 2020 Page 5 of 9 Commissioner Smith advised staff to include in their evaluations a hedge in terms of Bucket exchange. He concluded that he supported the approval of the contract. In regard to Commissioner Danaher’s inquire, Perkins stated that between 2023 and 2024 staff could execute short-term contracts with existing projects and that the evaluation will include competitive bids. Abendschein added that the evaluation will be completed before 2023. In reply to Vice Chair Segal’s question regarding dispatchability and if there is a risk in terms of changing views about environmental impacts, Perkins announced that in general the projects can be operated with inter- daily flexibility and ramping, and the ability to dispatch within a day is fairly protected from environmental concerns. Abendschein confirmed that the factors affect seasonal dispatchability. In response to Vice Chair Segal’s query regarding an agreement with the other partners on when the resource is dispatched, Perkins answered that the schedulers from Western Area Power Administration provide maximums and minimums to staff and staff dispatches within those levels. In answer to Chair Forssell’s request for more clarity regarding favorable cost allocation in dry years and what kind of shape the infrastructure is in for the Central Valley Project, Perkins explained that the Court of Appeals ruled that the statute requires the proportional collection of environmental costs. The total environmental cost needs to have a fixed percentage for water and power. The Bureau of Reclamation has put forth proposals for proportionality. In terms of the Central Valley Project, Perkins answered that the generation and transmission of power and the dams are in good shape. The canals, pumps, and other water conveyance structures require a lot of maintenance and pose threats. Staff continues to follow the project. ACTION: Commissioner Scharff moved that the Utilities Advisory Commission (UAC) recommend the Council approve the execution of the extension of our current electricity supply contract, which is the 2025 base resource contract for the Central Valley Project (CVP) with the Western Area Power Administration (WAPA) titled “Contract 20-SNR- 02365 United States Department of Energy Western Area Power Administration Sierra Nevada region contract for electric service base resource with City of Palo Alto” for the full amount of generation available (12.06299% share), to preserve the city’s options to maintain, terminate, or reduce its allocation until June 30, 2024. Commissioner Danaher seconded the motion. The motion carried 7-0 with Chair Forssell, Vice Chair Segal, and Commissioners Danaher, Jackson, Johnston, Scharff, and Smith voting yes. ITEM 3: DISCUSSION: Discussion of Electrification Cost and Staffing Impacts on the City of Palo Alto's Electric and Gas Distribution Systems Bret Anderson saw the report as a starting point. He reported that the report focuses on single-family homes and advise staff to evaluate other components such as commercial and multi-family. He foresaw a potential for all-electric homes and devices that are on an interactive grid to address peeks, average needs, and startup costs after an outage. New or upcoming technologies are not addressed in the report, but the report does indicate that it is feasible and affordable for the City to move away from neutral gas. Tom Kabat agreed that the report is innovative and strongly agreed that the report explains to residents that is it feasible to move to all-electric. He mentioned that the report may be using outdated efficiencies regarding heat pumps. Jonathan Abendschein, Assistant Director of Utilities Resource Management, reported that the Utilities Department is engaging with the city’s Sustainability Department and running analyses for the Sustainability and Climate Action Plan (S/CAP) update for 2020. The Utilities Department is also working on parallel analyses that relate to the utility impacts of the S/CAP. Elizabeth Oliphant, Stanford Fellow, reported that the analysis focused on the total utility costs for electrifying all single-family residences located within the city. The main goal of electrifying single-family Utilities Advisory Commission Minutes Approved on: December 02, 2020 Page 6 of 9 homes is to reduce Green House Gas (GHG) emissions. Such a conversion would cause an increase in the peak electricity demand by almost three times. With a higher peak demand, around 95 percent of the city’s transformers will need to be upgraded. If the city chose to do all like for like replacements, the minimum cost is roughly $12.5 million to $33.9 million. For optimized upgrades, converting a pole-mounted transformer to a pad-mounted transformer, the cost is roughly $8.3 million to a maximum of $25.3 million. Also, other electrical upgrades such as replacing 20 percent of the secondary transmission lines as well as replacing 25 percent of the feeder lines will need to take place. The city can expect to pay between $21.4 million to $41.7 million for those other electrical upgrades. There is a cost associated with disconnecting the gas distribution system to a single-family residence and that system includes main lines, services lines, and meters and risers. All customers have to agree to disconnect before a gas main can be sealed and if the main is sealed, it automatically disconnects all service lines that are attached to it. It would cost roughly $11.4 million to a maximum of $53.7 million to disconnect the gas lines. If the mains are sealed, the city would save $26 million to $34 million by not having to pay for the Gas Main Replacement Program. In total it would cost between $41.1 million to $128.3 million if all single-family homes went electric. Additional staff time is needed to implement the upgrades and disconnections and that is estimated to range between 204,306 hours to 801, 116 hours. Abendschein summarized the high-level questions that the Commission has raised which is what are going to be the utility impacts, what is going to be the cost to deal with those utility impacts, what are the staffing impacts going to be, and what rates would customers pay if all the single-family homes were disconnected? Staff is in the process of answering those specific questions and plans to bring back the results to the Commission in January of 2021. He acknowledged that is it highly likely that there will be more electrification and eventually disconnection in terms of the multi-family and commercial sectors. He explained that it is very complicated to electrify multi-family and commercial facilities. He reminded the Commission that it is important to have a transitional strategy for the multi-family and commercial sectors so that staff can work with them to make substantial reductions in their natural gas use before they disconnect. Commissioner Smith agreed that having a transition plan for the multi-family and commercial sector is prudent and wise. He believed that repurposing the decommissioned gas piping for the fiber network would reduce the total cost. Dean Batchelor, Utilities Director, reported that the city’s vendor Magellan is currently exploring that option but he believed that the fiber network will be well established by the time the city is ready to turn off the gas utility. If there is a possibility to use decommissioned lines though then staff will consider doing that. In reply to Commissioner Danaher’s query regarding other offset cost savings, Oliphant reported that she did not look at what a transformer’s life span is but in terms of electric vehicles (EV), there will have to be some upgrades associated with EVs. When more flexible load technology comes online, the upgrades done for EVs will assist in the broader project of electrifying single-family homes. Abendschein added that other replacements will happen within the system that will overlap with the upgrades that need to be done for building electrification. Christine Tam, Senior Resource Planner, noted that if the city does not pursue electrification of single-family homes, to meet some of the S/CAP goals the city will have to upgrade the electric grid system anyways for EVs. In response to Commissioner Danaher’s questions regarding the large gap between the minimum cost and the maximum cost and how much carbon the city will save, Oliphant explained that the cost indicates that the transformers will need to be upgraded as well as more will need to be installed. The cost also reflects the cost difference between different types of transformers. Tam answered that if all single-family homes are electrified, the city will save 49,000 metric tons of carbon. Abendschein added that the goal is to receive an 80 percent reduction of carbon in all of the above approaches instead of comparing cost per ton between the different strategies. Commissioner Jackson predicted that many homes will require 200-amp service and if many single-family homes are already at 100-amp service, converting to 200-amp service would be a large impact. Tam expressed that less than 30 percent of homes still have a 100-amp panel. In response to Commissioner Jackson’s question regarding the expected lifetime of a transformer and feeder lines, Batchelor answered Utilities Advisory Commission Minutes Approved on: December 02, 2020 Page 7 of 9 that the lifespan for a transformers is between 50 and 60-years and it is roughly the same for feeder lines. Commissioner Jackson emphasized that regardless if single-family homes are electrified or not, a lot of the work will need to be done. He concluded that motivating residents to shift their loads more dramatically is within the city’s best interest even though financing that infrastructure upgrades will be costly. Commissioner Scharff expressed that the limiting factors are that many residents are not aware that the city is considering shutting off the gas distribution system, it is unclear how much it will cost a resident to electrify their home, and how well does the technology work. He urged staff to analyze how much it will cost a resident to electrify their homes, will the city pay for it, and to be granular in the analysis. He foresaw the process of electrification being long term and that staff needed to explore the best approach for implementation. Abendschein commented that staff is working on such an analysis and staff will be bringing that forward to Council soon. Vice Chair Segal disclosed that staffing requirements need to be evaluated and also fairness issues among residents. Abendschein agreed and added that the wide range comes from the desire to accommodate people’s desire to electrify at whatever point in the 10-year process. She wanted to see the city move quicker on upgrading transformers. Abendschein agreed that there are a lot of logistical issues that need to be ironed out. Commissioner Johnston agreed that the city needs to start upgrading now to reach its 10-year goal of electrification as well as start-up a robust, comprehensive public engagement and education program. Batchelor admitted that there has not been a lot of public outreach but staff plans to start campaigning heavily in the coming months. Chair Forssell concurred with Commissioner Scharff that the public is not aware of the city’s plans and that the communication and education challenge is more complicated than the usual. She suggested that any communication with the public needs to emphasize all benefits of an electrified city including safety, pollution, along with reducing the city’s carbon footprint. She suggested doing a pilot program consisting of one block within the city that is all-electric and promoting that block to the rest of the city. Commissioner Jackson agreed with the comments regarding public education but he predicted that it will be challenging. Batchelor commented that staff has been discussing innovative ways for public engagement as well as innovative incentives. In reply to Cormack’s question regarding the differences between like for like upgrades and optimized upgrades, Oliphant explained that the difference is the capacity of the different transformers. Cormack emphasized that this program is a campaign and she concurred that many residents are not aware of this. The UAC recessed at 6:24 p.m. and returned at 6:35 p.m. ACTION: None ITEM 4: DISCUSSION: Discussion of Electric Vehicle Charger Needs Assessment to Reach 80% Electric Vehicle Penetration by 2030 Shiva Swaminathan, Senior Resource Planner, announced that the idea behind this assessment was to form a framework that looked at the EV charger needs if 80 percent of penetration for EVs is achieved. Mo Sodwatana, Stanford Fellow, reported that the project’s objective is to understand how many chargers the city will need to support the S/CAP goal of 80 percent penetration as well as determine what types of chargers are needed. There are three types of EV chargers; AC Level One; AC Level Two; and DC Fast Charge. The framework that the analysis was conducted under included the current EV trends in Palo Alto, charging patterns, existing infrastructure, the forecast for EVs in the city by 2023, and estimation of the number and Utilities Advisory Commission Minutes Approved on: December 02, 2020 Page 8 of 9 types of charging ports needed. An in-depth analysis was also conducted for multi-family properties and both analyses estimated the cost for the utility as well as customers. For currently registered residential vehicles, 9 percent are EVs, for non-residential vehicles 6 to 10 percent are EVs and there are approximately 4,000 charging stations within the city currently. It is projected that there will be 42,000 residential EVs with 80 penetration by the year 2030 and to support that there would need to be between 18,000 to 26,000 charging ports. The report estimates more L2 chargers in the future due to more longer-range EVs. In terms of non- residential, it is estimated that there will be 54,700 EVs by the year 2023 which results in 6,200 to 12,300 charging ports. In summary, it would cost a single-family resident $-$300 per port for an L1 charger, for a single-family resident L2 charger it would cost $3,000-$10,000 per port, for a multi-family L2 charger it is roughly $12,400-49,999 per port, for a non-residential L2 charger it is roughly $5,400- $20,500 per port and for a DC Fast Charger it costs $62,000-$230,000 per port. The difference between the cost estimate for multi- family L2 chargers and single-family residential L2 chargers is that there are fewer ports per site for multi- family. In conclusion, the number of EVs will increase tenfold, and charging needs are expected to increase 6 to 8-fold. Energy consumption will increase by 1.5 percent of the total load to 15 percent of the total load while on the residential side it will increase by 6 percent to roughly 69 percent, and the number of EVs per household is projected to increase from .18 to 1.7. The cost per port is highly variable and is dependent upon many factors and due to economics of scale, greater ports per site are more cost-effective. In response to Vice Chair Segal’s inquiry on why there are more ports than there are single-family homes, Swaminathan commented that it is assumed that a single-family home has 2 EVs which resulted in there being more ports than homes. In reply to Commissioner Smith’s question of does the report assume that two EVs will be charged at one L2 charger, Sodwatana mentioned that there are uncertainties. Commissioner Danaher disclosed that the main cost driver is the cost of permits and he suggested that staff explore ways to decrease the cost for upgrading an electrical panel. He emphasized that he wanted a presentation about permits and fees. He wanted to see a cost breakdown of how much of the cost is caused by the city when commercial and single-family homes wish to upgrade their existing infrastructure to accommodate an EV and EV charger. Chair Forssell disclosed that she is concerned when it comes to the make-ready costs for multi-family and for non-residential. She did not see what the benefits are for multi-family facilities to accommodate EV chargers but she saw an opportunity for new multi-family developments to have more EV capacity. Also, there is a trend among commercial facilities to provide an employee perk to charge their car at work. In response to Chair Forssell’s query about how did staff arrive at the number of existing DC Fast Chargers, Sodwatana restated that the estimates came from CalETC’s White Paper which notes that more longer-range EVs are expected to hit the market as well as ride-sharing vehicles that need to quickly charge. In answer to Cormack’s question regarding the estimated 300 charging ports currently existing, Sodwatana commented that the estimates came from the city’s registered L2 permits. Swaminathan clarified that the city has issued 600 to 800 permits, but half of those are commercial permits. Hiromi Kelty, Sustainability Program Manager, adds that the majority of residents are not pulling permits to install L2 chargers in their homes. In response to Chair Forssell’s inquiry regarding unpermitted L2 chargers, Swaminathan reported there is a risk because there is no inspection to make sure the installation of the charge and the electrical panel is done correctly. Dean Batchelor, Director of Utilities, added that a transformer could become overloaded if the capacity to a home is maxed out. In reply to Chair Forssell’s question about how the load is measured for a transformer, Batchelor shared that it is estimated based on the homes on the block when that block was established. Shiva added that it is also based on the monthly energy consumption for that block. ACTION: None. Utilities Advisory Commission Minutes Approved on: December 02, 2020 Page 9 of 9 COMMISSIONER COMMENTS and REPORTS from MEETING/EVENTS Commissioner Scharff announced that the NCPA has decided to decrease the State of Emergency Power from the General Manager to help decrease the amount of money that can be spent without guidance from the Commission. Another topic is the Unfunded Pension Liability and there is strong support to copy Palo Alto’s model. The American Public Power Association (APPA), which the city is a partner in, lost the lawsuit regarding small cell towers. Going forward the city has to follow the Federal Communication Commission (FCC) rule which is there is a shorter period to review the applications as well as decreased grounds to deny them. FUTURE TOPICS FOR UPCOMING MEETINGS: December 02, 2020 Chair Forssell requested when future topics are raised, that there be an indication if the item should be received as a discussion at the full Commission, or if it can come as an informational document. Commissioner Danaher wanted an informational report regarding measures that promote the installation of EV chargers. He wanted to have a presentation from Public Works to discuss the permitting process for the installation of solar panels and electrification. Commissioner Johnston requested a discussion regarding the second transmission line. He acknowledged that the informational reports in the Packet were very helpful and informative. Commissioner Smith and Chair Forssell agreed. In response to Chair Forssell’s query regarding the death of a lineman in November 2019, Dean Batchelor, Director of Utilities, reported that the investigation is still ongoing but changes have been made including updating the Safety Manual and a new process for onboarding new employees. Vice Chair Segal asked for an informational report or an update in the Director’s Report on staffing challenges that have been impacted by COVID-19. NEXT SCHEDULED MEETING: December 2, 2020 Vice Chair Segal moved to adjourn. Commissioner Jackson 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 7:24 p.m. Respectfully Submitted Tabatha Boatwright City of Palo Alto Utilities City of Palo Alto (ID # 11590) Utilities Advisory Commission Staff Report Report Type: Agenda Items Meeting Date: 11/4/2020 City of Palo Alto Page 1 Summary Title: Annual UAC legislative update Title: Staff Recommendation That the Utilities Advisory Commission Accept a Presentation on 2020 and 2021 State Legislation, and Recommend the City Council Affirm the Continuation of the Current Utilities Legi slative Guidelines Through 2021 From: City Manager Lead Department: Utilities Recommendation Staff recommends that the Utilities Advisory Commission (1) accept the staff presentation regarding 2020 and 2021 state legislation, and (2) after possible discu ssion and a motion, recommend the City Council continue the 2020 Utilities Legislative Policy Guidelines into 2021. Background The utility industry is a high-profile and heavily regulated industry subject to continuous legislative action at both the state and federal levels. At the state level, over two thousand bills are usually introduced each year, many of which require review to determine if they relate to utilities. The pace at which bills change during the legislative process, and the speed at whi ch bills may receive a legislative vote requires staff to respond quickly if the City is to have any influence on the resulting legislation. Often, a response to an amended bill is required in a matter of a day or two. These timing constraints preclude a return to the Utilities Advisory Commission (UAC) and/or Council for approval each time a response is required. Therefore, staff annually develops a document identifying guidelines to be applied when evaluating and responding to legislation. While the guidelines are used by staff for evaluating legislation, any advocacy positions taken in alignment with these guidelines are subject to the approval of the Utilities Director or the Director’s designee. Although it is impractical to return to the UAC for appro val each time staff wishes to act in a timely, sometimes, very quick manner, the issues under debate are known to the UAC and Council through written reports and verbal updates from the City Manager, the Utilities Director, or staff. Q CITY OF PALO ALTO Staff: Heather Dauler City of Palo Alto Page 2 Discussion 2021 legislative guidelines The legislative guidelines before the UAC today (Attachment A) were first adopted on November 1, 2017 with further UAC approval on December 5, 2018. On December 4, 2019, the UAC approved the guidelines again, with only a few non-substantive changes. Likewise, the City Council approved the guidelines each year, with the last approval occurring on January 13, 2020. Today, staff requests no changes to the guidelines that have serve d us well, and recommends the UAC approve the 2020 guidelines for 2021. If so approved, the guidelines will become the 2021 guidelines, and will be subject to review and approval again in late 2021 for 2022. Presentation In addition to approving the guidelines, staff requests the UAC receive a presentation regarding legislative highlights from 2020 and possible 2021 legislation. The presentation is Attachment B. Resource Impact There is no direct resource impact associated with adoption of the legislative guidelines. However, actions taken that support the efficient use of the City’s assets and resources will help control costs, implement the Council’s policies and goals, and protect the interests of utility customers. Environmental Review The UAC’s consideration of the legislative guidelines does not meet the California Environmental Quality Act’s definition of a “project” under Public Resources Code Section 21065. Attachments: • Attachment A: Guidelines • Attachment B: Presentation Attachment A Approved by the Utilities Advisory Commission on November 4, 2020 Approved by City Council on XX, 2021 Utilities Legislative Policy Guidelines: 2021 Update City of Palo Alto Utilities Department (CPAU) staff will use the below guidelines as well as the City’s guidelines to help determine any advocacy position or action on Utilities-related issues. Formal advocacy, such as submitting written letters or comments and meeting with policymakers and/or staff, requires the approval of the Utilities Director or his designee. 1. Seek to preserve local government flexibility, discretion, accountability, and oversight of matters impacting utility programs, services, activities, and rates. Oppose action that could hamper or minimize this flexibility or discretion. 2. Where possible, seek funding and program incentives. 3. Advocate for reasonable government action with minimal customer impact that allows for flexibility and implementation feasibility. 4. Advocate for locally-designed conservation or efficiency programs. Support reasonable State conservation or efficiency requirements that consider local populations, environment, and resources. 5. Inform state and federal policymakers about CPAU’s current programs, services, goals, and reporting requirements. 6. Oppose unnecessary, unreasonable, impractical, or costly rates or mandates. 7. Collaborate with and support the efforts of regional agencies and associations whose goals align with ours. 8. Advocate for fair cost allocation and support the principle of beneficiary pays. 9. Support efforts to maintain or improve the security and reliability of our infrastructure. 10. Support government action that cost effectively reduces greenhouse gas emissions. 11. Promote locally-designed residential and commercial electrification programs. 12. Support government action allowing CPAU to maintain customer confidentiality. 2020 State Legislative Update November 04, 2020 www.cityofpaloalto.org Attachment B • CITY OF PALO ALTO 2 Agenda 2020/2021 legislation Affirm guidelines A c1Tv OF .PALO ALTO 2020/2021 Legislation November 04, 2020 www.cityofpaloalto.org 4 2020 Legislative session OVERVIEW •State legislature postponed session multiple times •Current events took focus from the “usual” bills ENERGY •Another attempt at long duration storage CONSTRUCTION •New subsurface installations mandates WORKER SAFETY •Requirement for the state to stockpile PPE for essential wo r kers A c1Tv OF ~PALO ALTO 5 2021 Legislative session ENERGY •Possibly more attempts to mandate storage •Resource Adequacy has been raised as an issue •The Governor was asked about regionalization OTHER ISSUES Police reform, housing, and bills that were shelved this year will appear in 2021. WATER •Affordability, related to COIVD and existing programs •Wildfire impacts on water supply A c1Tv OF ~PALO ALTO 6 2021 Legislative session, cont.021 legislative session Senator Hill termed out after over a decade in the Legislature. Alex Glew of Los Altos and Josh Becker of Menlo Park are running to replace Mr. Hill. CPAU staff, CMUA and NCPA lobbyists will reach out to the new Senator A c1Tv OF ~PALO ALTO Guidelines November 04, 2020 www.cityofpaloalto.org 8 Motion Staff and the Utilities Advisory Commission recommend the City Council approve the 2021 Utilities Legislative Policy Guidelines A c1Tv OF ~PALO ALTO City of Palo Alto (ID # 11128) Utilities Advisory Commission Staff Report Report Type: Agenda Items Meeting Date: 11/4/2020 City of Palo Alto Page 1 Summary Title: Recommendation for Approval of Western 2025 Base Resource Power Supply Contract Title: Staff Recommendation That the Utilities Advisory Commission Recommend the City Council Approve the 2025 Base Resource Power Supply Contract for the Centra l Valley Project With Western Area Power Administration, to Preserve the City's Options to Maintain, Terminate or Reduce its Allocation Until June 30, 2024 From: City Manager Lead Department: Utilities RECOMMENDATION Staff recommends that the Utilities Advisory Commission (UAC) recommend that the Council approve the execution of the extension of the City’s current electricity supply contract, which is the 2025 Base Resource Contract for the Central Valley Project (CVP) with the Western Area Power Administration (WAPA) titled “Contract 20-SNR-02365 United States Department of Energy Western Area Power Administration Sierra Nevada Region contract for electric service base resource with City of Palo Alto” for the full amount of generation available (12.06299% share), to preserve the City’s options to maintain, terminate, or reduce its allocation until June 30, 2024. EXECUTIVE SUMMARY Staff recommends that the UAC recommend Council approve execution of the 2025 Base Resource power supply contract with WAPA, which will begin in 2025 and run through 2054, for the maximum allocation available (12.06299% of the total Base Resource generation) to the City. The City’s electric utility contracts with the Federal Government through WAPA for electricity from the CVP, a series of large dams and hydroelectric generation projects in California. Electricity from these projects has been a major electricity source for Palo Alto since 1977 when the City first contracted with WAPA. The current WAPA Base Resource contract began in 2005 and will expire at the end of 2024. The City’s current contract allocation is 12.30917% of the WAPA Base Resource, which represents about 40% of the City’s electricity needs in an average hydrological year. The impact of this change in allocation is that the City will only receive 98% of the current contract resources from WAPA starting in 2025. Beginning in 2023 staff will be evaluating what power supply resources if any are required to fill the gap left by the lower contract allowance, which amounts to a loss of 1% of the City’s electricity supply portfolio. CITY OF PALO ALTO Staff: Lena Perkins City of Palo Alto Page 2 By executing this contract extension (Contract 20-SNR-023651) by March of 20212 Palo Alto preserves all of its available options. The contract provides the City with the option to maintain, terminate or reduce the allocation amount of this new 2025 Base Resource contract up until June 30, 2024. However, if Palo Alto does not execute the WAPA 2025 Base Resource contract by March 2021, it will not be eligible for any power supplied by WAPA after the end of 2024. Given large uncertainties around the cost, value, and amount of output of this resource, staff recommends executing the contract for the maximum allocation available, while also thoroughly exploring alternative power supply sources in the 2023 timeframe. This will allow the City to make a more informed final decision on the contract in 2024, as staff expects there to be more clarity on outstanding uncertainties around costs, value, and amount of generation from the project before June 30, 2024, the final date to terminate the contract or reduce the City’s contract allocation. The CVP Base Resource has historically been an important low-cost, carbon-free electricity resource for Palo Alto, but there are many external factors which could make this resource less economically competitive in the future. While Palo Alto is committed to helping WAPA maintain the value of this resource for all customers, the City will ultimately make a decision in 2024 about what resources to include in its supply portfolio based on its assessment of which resources provide the greatest value to Palo Alto’s electric utility customers. BACKGROUND Palo Alto’s existing 20-year power supply contract with WAPA expires on December 31, 2024. After an extensive public process, WAPA’s 2025 Marketing Plan was published in the Federal Register in August 2017.3 The 2025 Marketing Plan allows for existing CVP Base Resource customers, such as Palo Alto, to extend 98% of their existing power allocations after 2024 for an additional 30 years. By executing this contract extension (Contract 20-SNR-02365) by March 2021 Palo Alto is not making a final decision on whether to extend its Base Resource commitment for 30 more years; rather, the City simply preserves all of its options and can choose to maintain, terminate or reduce this new 2025 Base Resource contract allocation amount up until June 30, 2024. If Palo Alto does not execute the WAPA 2025 Base Resource contract by March 2021 Palo Alto will not be eligible for power supplied by WAPA after the end of 2024. The City of Palo Alto Utilities’ (CPAU) current CVP Base Resource Contract with WAPA is an important resource providing cost-based electricity from a share of the CVP net generation. Council approved the current WAPA Base Resource Contract in 2000 for the years 2005 to 2024 to provide Palo Alto with an initial 11.62% share of CVP Base Resource (Western Base Resource Contract on October 16, 2000 [CMR 378:00, Resolution 80074]). In 2009, Council approved an additional share of Base Resource generation that became available starting in 2015, bringing the current contract to 12.30917% of the Base Resource generation, which represents about 40% of the City’s annual electricity needs. CPAU’s future maximum 1 http://cityofpaloalto.org/civicax/filebank/blobdload.aspx?BlobID=78711 2 Customers have six months to execute the contract from the receipt of the final 2025 Base Resource contract on September 16, 2020. 3 https://www.govinfo.gov/content/pkg/FR-2017-08-15/pdf/2017-17210.pdf 4 https://www.cityofpaloalto.org/civicax/filebank/documents/22409 City of Palo Alto Page 3 share of the WAPA 2025 CVP Base Resource Contract is 12.06299%5 for a 30-year contract which will span from 2025 through 2054. WAPA has set a deadline for customers to execute the WAPA 2025 Base Resource Contract by March 2021, six months from receipt of the final contract. The final contract 2025 contract extension from WAPA is Contract 20-SNR-023656. The current WAPA Base Resource contract is provided here in the 2005 Base Resource Contract 00-SNR-00336.7 A Council resolution to approve execution of the renewed contract is provided in Attachment A. DISCUSSION The CVP Base Resource generation has historically8 been a valuable electricity resource for Palo Alto, with staff working collaboratively with WAPA alongside Northern California Power Agency (NCPA) and many other power customers to maintain the value and resiliency of the product; however, there are multiple external uncertainties which could make the project less competitive in the future. Due to changing energy markets and regulations, staff recommends carrying out a robust analysis of alternatives to this resource in the 2022 to 2023 timeframe. After selecting the most compelling alternatives, staff will undertake further detailed modeling using most recent market and regulatory trends to make a final recommendation to Council on whether to maintain the City’s maximum allocation of Base Resource output for an additional 30-year term or pursue other alternative resources by June 30, 2024. It should also be noted that the 2025 CVP Base Resource Contract is one option for maintaining a carbon-neutral electric supply portfolio. Base Resource Description The WAPA Base Resource product is a percentage of the available hydroelectricity generated by the CVP, after meeting the electricity needs for Project Use (water pumps for the CVP) and First Preference Customers (customers from the counties of origin, where the CVP’s Trinity and New Melones dams are located), in addition to other adjustments needed by WAPA. This is a non-firm product (meaning the amount of energy provided may vary based on the amount of energy available from the generators combined with a few other factors), and it also comes with seasonal and hourly restrictions. The average annual output of the generation of the CVP is about 2,950 gigawatt hours (GWh)9 after Project Use and First Preference electricity needs are met, and for this 2025 contract Palo Alto’s share is roughly 356 GWh (approximately 40% of the City’s electric load). Base Resource Contract Allocation and Cost WAPA Base Resource will be a cost-based resource which is expected to have a total cost (for all customers) of about $106 million per year, regardless of the amount of electricity provided. Every year the costs of providing WAPA Base Resource power are passed through to customers, and WAPA formally updates its Base Resource rates every five years. Palo Alto’s 12.06% allocation of the base resource is estimated to cost about $13 million per year. The latest WAPA projections and U.S. Bureau of Reclamation (USBR) estimates indicate total costs escalating by about 3% a year from 2020 to 2024. 5 CPAU’s maximum portion is 98% of its current allocation, as 2% of the allocations from existing customers were allocated to both new and existing customers beginning in 2025. 6 http://cityofpaloalto.org/civicax/filebank/blobdload.aspx?BlobID=78711 7 http://cityofpaloalto.org/civicax/filebank/documents/75692 8 The City of Palo Alto executed the current 2005 Base Resource Contract in 2000, which was for a 20-year contract term from 2005 to 2024; the staff report can be found in CMR 378:00 October 16, 2000. 9 A gigawatt hour (GWh) is 1,000 megawatt hours (MWh). A MWh is 1,000-kilowatt hours (kWh). City of Palo Alto Page 4 In very dry periods generation could be as low as in 2015, when generation was about 40% below average, and in wet periods generation could be as high as in 2017, which provided about 50% above average generation for Palo Alto. Since the cost of the contract does not vary but the electricity provided does, it means that the effective price per megawatt-hour (MWh) for the Base Resource generation is higher in dry years (e.g. it was about $60/MWh in 2015) and lower in wet years (e.g. it was about $24/MWh in 2017). Depending on the year, the average cost of the Base Resource is expected to be between $35/MWh and $70/MWh. This cost is estimated to be in the range of other carbon-neutral resources. This resource carries many intrinsic and extrinsic uncertainties; therefore, the long-term cost will need to reflect this uncertainty for this to continue to be an attractive resource for Palo Alto in the future. CPAU is committed to working with WAPA and the USBR to try to make this resource economically viable for all customers. Base Resource Contract Extension Elements 1. Contract Term: The term will be 30 years, from January 1, 2025 to December 31, 2054, with new contract language clarifying that customers such as Palo Alto have the opportunity to terminate or reduce their contract allocation upon new rates becoming effective, which is currently mandated by the Federal Energy Regulatory Commission (FERC) to occur every five years. The inclusion of this termination provision is a key mechanism or off-ramp the City can use to minimize its long-term risks associated with this contract, in the event that it ultimately becomes uneconomic. 2. Customer Communication: WAPA commits to providing its customers both a 12-month rolling forecast on a monthly basis and a five-year forecast on an annual basis. 3. Daily Scheduling: Customers will be able to submit daily preferred schedules subject to hourly minimum and maximum constraints designated by WAPA. This allows the City to schedule its electricity deliveries at the most economically optimal time of day possible, subject to some operational constraints imposed by the U.S. Bureau of Reclamation. 4. Exchange Program: Annual and seasonal exchange program to allow exchanges with other customers to maximize economic value. The City and other customers currently use this provision to exchange energy to modestly improve the economics of the project for all involved. 5. Rates: Customers are obligated to pay their percentage share of WAPA’s costs based on their allocation, regardless of Base Resource generation amount. Risks and Uncertainties of the Base Resource Contract Since Base Resource allocations are take-or-pay and subject to water supply conditions, water needs, and other costs to maintain the projects and the environment, this contract has several risks and uncertainties around it. Staff has undertaken significant analysis regarding what if any portion of the WAPA Base Resource Contract should be renewed in 2025, in the Electric Integrated Resource Plan10 and successive studies. While the WAPA Base Resource Contract could continue to be competitive from 2025 and beyond, the magnitude of the remaining uncertainties is large enough to potentially make other resources more attractive for Palo Alto. Given these unique external uncertainties, staff recommends generating and assessing real alternative options which could replace the WAPA Base Resource Contract and come 10 https://www.cityofpaloalto.org/civicax/filebank/documents/67114 City of Palo Alto Page 5 online by the beginning of 2025. Staff also engaged extensively with US Bureau of Reclamation Commissioner Burman’s CVP Power Initiative11, which identified several areas for ongoing work. There are several factors which could make this WAPA 2025 CVP Base Resource Contract a less competitive resource in the future. Some of the most important sources of uncertainty are listed below. 1. Uncertainties Around Costs: • Costs of Central Valley Project Improvement Act (CVPIA)12 Restoration Fund o Cost allocation proceedings and development of business practice guidelines are underway o Implementation of proportionality in cost allocation method as a result of the NCPA vs. U.S. litigation (CVPIA) • Costs of CVP13 o Aid to Irrigation accumulated costs subject to repayment14 o Upcoming unbudgeted capital improvements 2. Uncertainties in Quantity of Generation: • Impacts of Biological Opinion for Initiation of Reconsultation on the Long-Term Operation of the Central Valley Project and the State Water Project15 • Impacts of the updated Water Quality Control Plan for the San Francisco Bay/Sacramento– San Joaquin Delta Estuary (Bay-Delta Plan)16 • Impacts of climate change 3. Uncertainties in Value of Generation: • Impacts of Biological Opinion for Initiation of Reconsultation on the Long-Term Operation of the Central Valley Project and the State Water Project17 • Impacts of the updated Water Quality Control Plan for the San Francisco Bay/Sacramento– San Joaquin Delta Estuary (Bay-Delta Plan)18 • Impacts of climate change • Impacts of the Western Energy Imbalance Market19 (which the Sierra Nevada Region of WAPA will join in 2021) and the Extended Day Ahead Market20 • Value of avoided carbon emissions The magnitude of the market and regulatory uncertainties should lessen in the 2023 to 2024 timeframe, and staff will evaluate what percentage of the WAPA contract to take by considering: cost certainty, 11 https://www.usbr.gov/mp/docs/hydro-memo.pdf 12 https://www.usbr.gov/mp/cvpia/index.html 13 https://www.usbr.gov/mp/cvp/cvp-cost-allocation.html 14 https://www.wapa.gov/regions/SN/rates/Documents/aid-to-irrigation-03192018.pdf 15 https://www.fisheries.noaa.gov/resource/document/biological-opinion-reinitiation-consultation-long-term- operation-central-valley 16 https://www.waterboards.ca.gov/waterrights/water_issues/programs/bay_delta/ 17 https://www.fisheries.noaa.gov/resource/document/biological-opinion-reinitiation-consultation-long-term- operation-central-valley 18 https://www.waterboards.ca.gov/waterrights/water_issues/programs/bay_delta/ 19 https://www.westerneim.com/pages/default.aspx 20 http://www.caiso.com/StakeholderProcesses/Extended-day-ahead-market City of Palo Alto Page 6 term flexibility, portfolio diversification, portfolio fit, additionality of carbon-free energy, and environmental impacts or benefits. Staff is soliciting input from the UAC on whether to include any additional evaluation criteria, or if the UAC does not believe that one or more of these factors should be considered. After using these criteria to select the most promising alternative resources to replace some or all of the WAPA Base Resource contract, staff will undertake further detailed modeling of these options using the most recent market and regulatory trends to make a final recommendation to Council on this contract and other power supply contract options by June 30, 2024. RESOURCE IMPACT This contract extension is for 98% of the City’s current power supply contract with WAPA, so if costs were to stay the same the City would be responsible for 98% of those costs starting in 2025. Staff will continue to work with WAPA to preserve value and control costs, while also evaluating alternative supply options. The alternative resource analysis is expected to be completed using existing staff resources; any additional resource needs will be requested during the annual City budgeting process. This 2025 WAPA Base Resource contract extension will take effect in January 2025 and will be budgeted for using forecasts for generation and costs at that time, unless the City terminates at any point before June 30, 2024. 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 The UAC’s recommendation regarding execution of this contract extension does not require California Environmental Quality Act review, because it 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. WAPA’s 2025 Power Marketing Plan authorizing the contract has a Categorical Exclusion from National Environmental Policy Act (NEPA) review since WAPA is reallocating its existing resources and is not planning to increase its generation or transmission. Attachments: • Attachment A: Resolution WAPA 2025 Agreement • Attachment B: Presentation Attachment A * NOT YET APPROVED * AB10202020 1 Resolution No. _______ Resolution of the Council of the City of Palo Alto Approving the Execution of Contract 20-SNR-02365 United States Department Of Energy Western Area Power Administration, Sierra Nevada Region, Contract For Electric Service Base Resource With City Of Palo Alto to Preserve the City’s Options to Maintain, Terminate, or Reduce its Allocation Until June 30, 2024 R E C I T A L S A. The City of Palo Alto (“City”), a municipal utility and a chartered city, is a “Preference Customer” of the Western Area Power Administration (“WAPA”) of the United States Department of Energy; and B. The City’s existing 20-year power supply contract with WAPA expires on December 31, 2024; and C. The WAPA 2025 Power Marketing Plan gave the City the right to negotiate post- 2024 contract(s) in accordance with the WAPA 2025 Power Marketing Plan; and D. The City, other WAPA customers, and WAPA have been working together to formulate the new Electric Service Base Resource Contract in accordance with the 2025 Power Marketing Plan; and E. Contract 20-SNR-02365 for Electric Service Base Resource expressly preserves the City’s option to maintain, terminate or reduce the base resource percentage up to the full generation available, a 12.06299% share, before June 30, 2024. F. NOW, THEREFORE, the Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION 1. The Council hereby authorizes the City Manager on behalf of the City to execute the attached Contract 20-SNR-02365 for Electric Service Base Resource between the United States Department of Energy, Western Area Power Administration, Sierra Nevada Region, and the City of Palo Alto (Attachment B). // // // // Attachment A * NOT YET APPROVED * AB10202020 2 // // SECTION 2. The Council finds that the adoption of this resolution regarding execution of this contract extension does not require California Environmental Quality Act review, because it 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. WAPA’s 2025 Power Marketing Plan authorizing the contract has a Categorical Exclusion from National Environmental Policy Act (NEPA) review since WAPA is reallocating its existing resources and is not planning to increase its generation or transmission. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ___________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ___________________________ Deputy City Attorney City Manager ___________________________ Utilities General Manager ___________________________ Director of Administrative Services 2025-2054 WESTERN ELECTRIC SUPPLY CONTRACT Lena Perkins, PhD Senior Resource Planner November 4, 2020: Utilities Advisory Commission www.cityofpaloalto.org Attachment B 2 Outline: 2025 Western Electric Supply Contract 1.Rec. to execute full share of 2025-2054 Western contract 2.Background on Western electric supply product & contract 3.Next steps & timeline 4.Recommended motion 3 Recommend executing 2025 Western Contract 1.Western is a large federal hydroelectric project and currently ~40% of City’s electric supply •Potentially competitive carbon-free* electric resource 2.City has option to reduce or terminate until June 30, 2024 •Staff will be evaluating alternatives in 2023 3.Contract runs from 2025 to 2054 •But City has option to reduce or terminate every 5 years 4.Product carries significant risks & uncertainty •Risks will be priced into analysis & final 2024 decision *California Energy Commission considers large hydroelectric generation to by a zero carbon resource. https://www.energy.ca.gov/data-reports/energy-almanac/california-electricity-data/2019-total-system-electric-generation/2018 4 Background on Resource and Contract Resource: Western Base Resource Electric Product 1.Roughly 40% of City’s electric supply (≈100% of 1984 electric supply) 2.Federal hydropower & transmission from mostly Central Valley Project 3.Somewhat predictable costs, but highly variable output 4.Significant risks & uncertainty in future costs as well as future generation •Climate change, environmental costs, environmental regulations Contract: 2025-2054 Western Base Resource Electric Supply 1.City has free option to reduce share or terminate until June 30, 2024 2.From 2025 to 2054 City can reduce share or terminate every 5 years 3.New overall rate formula set every 5 years 5 Next Steps & Timeline 1.Contract must be executed by City by March 16, 2021 2.Given magnitude of uncertainties & exposure City will solicit and evaluate alternatives by 2023 3.Staff will make final recommendation to maintain, reduce, or terminate share of 2025 Western Base Resource Electric Supply contract by June 30, 2024 deadline 4.Staff will reexamine exposure & alternatives every 5 years 2025-2054 and will maintain, reduce, or terminate share of contract during successive offramp windows 6 Recommended Motion Staff recommends that the Utilities Advisory Commission (UAC) recommend that the Council approve the execution of the extension of our current electricity supply contract, which is the 2025 Base Resource Contract for the Central Valley Project (CVP) with the Western Area Power Administration (WAPA) titled “Contract 20-SNR- 02365 UNITED STATES DEPARTMENT OF ENERGY WESTERN AREA POWER ADMINISTRATION SIERRA NEVADA REGION CONTRACT FOR ELECTRIC SERVICE BASE RESOURCE WITH CITY OF PALO ALTO” for the full amount of generation available (12.06299% share), to preserve the City’s options to maintain, terminate, or reduce its allocation until June 30, 2024. End of Presentation Supplemental slides may follow Questions: Lena.Perkins@CityOfPaloAlto.org www.cityofpaloalto.orgNovember 4, 2020: Utilities Advisory Commission City of Palo Alto (ID # 11639) Utilities Advisory Commission Staff Report Report Type: Agenda Changes Meeting Date: 11/4/2020 City of Palo Alto Page 1 Summary Title: Electrification Impact Study Title: Discussion of Electrification Cost and Staffing Impacts on the City of Palo Alto's Electric and Gas Distribution Systems From: City Manager Lead Department: Utilities Recommendation This report is submitted to the Utilities Advisory Commission (UAC) for informational and discussion purposes only. No action is required. Executive Summary The City is the process of updating its Sustainability and Climate Action Plan (S/CAP) to achieve the goal of reducing the community’s greenhouse gas emissions by 80% from 1990 levels by 2030. To meet this aggressive goal, one of the proposed key actions is to target electrification of all single-family residences. During the summer of 2020, the Utilities Department conducted a study to provide a preliminary cost estimate to upgrade the electrical distribution grid and decommission the gas infrastructure to all single-family residences. This report presents the electric grid upgrade and gas infrastructure decommissioning cost estimates, including cost savings from avoiding gas PVC main replacement to residential neighborhoods, and staffing impacts to Development Services and Utilities to achieve 100% electrification of single-family residences. These are preliminary cost estimates only; further studies will be needed to update and refine cost estimates as projects evolve and move forward. The direct “behind the meter” costs to customers to electrify their homes will be presented later as part of the City’s S/CAP update. Background In April 2016, City Council adopted the ambitious goal to reduce the community’s greenhouse gas emissions by 80% from 1990 levels by 2030 (“80x30”). The S/CAP Framework approved by City Council in November 2016 assumed 100% of new buildings will be all-electric, as well as mass conversion of gas appliances to electric alternatives in existing buildings, covering 95% of residential water heating, 70% of residential space heating, and 85% of commercial water and space heating. Staff: Christine Tam CITY OF PALO ALTO City of Palo Alto Page 2 As of 2018, the City has achieved GHG emission reduction by around 36% below the 1990 levels, equivalent to 273,400 MT. Over the next ten years, the City will need to reduce its GHG emission by an additional 328,300 MT in order to meet the 80x30 goal. Staff is currently in the process of updating the S/CAP with key actions over the next 10 years to achieve the 80x30 goal. One proposed key action is to target electrification of all single -family residences (SFRs), which will achieve around 49,000 MT of GHG emissions reduction, or 15% of the remaining reductions to meet the 80x30 goal. Compared to other types of existing buildings, electrification of SFRs has the lowest marginal abatement cost of GHG emissions. Technologies for electrifying residential gas appliances are readily available and have been widely deployed in other states and countries.1 There are many questions related to the electrification of all SFRs, including the system capacity impact to the electric distribution grid, the cost to upgrade the electric grid, the cost to decommission the gas infrastructure and financial impact to the gas utility. The City is also exploring legal issues and requirements related to these long term planning scenarios, which may bear on the feasibility and costs of these proposals. The 2020-2021 Building Electrification Work Plan2 proposed several impact analyses, including the impacts of electrification on the electric distribution system, utility and municipal workforce, as well as the financial health of both the electric and gas utilities. During the summer of 2020, staff provided guidance to an intern to conduct a preliminary study and estimate of electrification impacts. The study scope covered the cost to upgrade the electric distribution grid to meet the increased electric l oad of around 15,000 all-electric homes in Palo Alto, the cost to decommission the gas infrastructure serving these homes, and also behind-the-meter costs to convert gas appliances to electric alternatives. This report covers only the estimated utility costs, which would be recouped from customers via rates; customer costs will be presented along with the S/CAP Impact Analysis results for various proposed key actions in early 2021. The study report is provided as Attachment A. At its September 2020 meeting, the UAC provided feedback on questions it hoped would be answered as part of the study. Many of the topics the UAC hoped to hear more about are addressed in the attached study, including: • The impact of vehicle charging in combination with building el ectrification on the electric distribution system • The need to remove gas lines in a specific physical order, which could impact electrification plans • The impacts to the electric grid of changing residential load shapes and panel upgrades 1 Between 2000 and 2015, 58% of new homes were built with electric space heating, 56% of new homes were built with electric water heating, and 73% of new homes were built with electric cooking equipment. (source: EIA 2015 Residential Energy Consumption Survey). 2 UAC Staff Report “Building Electrification 2020-2021 Work Plan”, March 5, 2020. City of Palo Alto Page 3 A full list of UAC questions and how they will be addressed is included as Attachment B. Discussion City of Palo Alto Utilities (CPAU) provides gas services to around 15,000 SFRs, representing around 64% of the total gas services. In FY 2019, gas consumption from reside ntial single-family customers was around 9.2 million therms, representing 32% of the City’s total gas consumption. On the electric side, CPAU provides electric services to around 15,200 SFRs, representing around 52% of the total electric services. In FY 2019, average annual electric consumption from residential single-family customers was around 7,400 kWh; total electric consumption from single family customers makes up around 13% of the City’s total electric consumption. Staff prepared the electrification impact study scope to estimate cost impacts to CPAU under a scenario of electrifying all SFRs in Palo Alto. The cost estimates are based on current engineering project costs; while construction costs can fluctuate up and down, these costs are projected to increase over time. To evaluate the impact on the electric distribution grid, the increase of electric load due to electrification is calculated at the distribution transformer and the feeder level. Upgrades to the distribution grid are estimated based on two scenarios: a flexible load shifting scenario that assumes EV charging will not increase the peak demand of each home, and a conservative scenario with no EV load shifting allowed. The costs to decommission the gas infrastructure serving SFRs are assessed based on two scenarios. The lower cost scenario assumes gas service to SFR neighborhoods would be shut off by sealing the valves to gas mains serving these neighborhoods. Under this scenario, gas service to the entire block served by the gas main would be halted at the same time. The higher cost scenario assumes that the gas service lateral to each home would be disconnected individually. A skeletal gas system is assumed to remain in place to serve multifamily and non -residential buildings. The physical layout of this scaled-back gas system was developed in collaboration with the Utilities Engineering Division and could fully serve all remaining multifamily and non - residential loads without modification. Highlights of Study Results: Impact to the Electric Utility The study shows that electricity demand for all-electric homes peaks on winter mornings due to heating, and averages around 3.62 kW per home, or 264% of a mixed -fuel home’s peak demand.3 EV charging can add an additional 1.216 kW to the average peak demand of an all- electric home. Assuming each distribution transformer serves 8 houses, the load on each transformer under the all-electric SFRs scenario is calculated at 2.64 times the current 3 CPAU currently has a summer system peak of around 170 MW and a winter system peak of around 135 MW. The electrification of all SFRs will create an additional 8 -10% load to the summer system peak which occurs between 4pm to 6pm. City of Palo Alto Page 4 transformer load plus 9.74 kW for EV charging. As shown in Table 1 below, the additional load will trigger the need to upgrade some of the distribution transformers, secondary distribution lines (which connect the distribution transformer to the homes served by the transformer), and feeder lines (which connects the substation to the distribution points). Table 1: Estimate of overcapacity equipment in the electric distribution grid under the all - electric SFRs scenario Number of over-capacity distribution transformers 759 - 773 (95+%) Number of over-capacity secondary distribution lines 162 – 155 (20%) Number of over-capacity feeders 17 (25%) The total cost to upgrade the distribution system grid is estimated to range between $30 million and $75 million. Around 40% of this cost is equipment cost, and 60% is labor cost. This covers the cost to upgrade 95% of the distribution transformers, 20% of the secondary distribution lines, and 25% of the feeder lines. The cost estimate does not include additional undergrounding of feeder lines or secondary distribution lines. If financed over 30 years at an interest rate of 3.2%, this would be approximately $1.6 million to $3.9 million per year. For comparison, the Electric Utility Capital Improvement Program (CIP) spending between FY 2021 and FY 2025 ranges between $11 million and $26 million per year. Impact to the Gas Utility The total cost to decommission the gas infrastructure to all SFRs is estimated to range between $11 million to $54 million. If this spending takes place over ten years, this would be approximately $1.1 million to $5.4 million per year. For comparison, the gas utility’s current capital investment budget is approximately $8 million to $10 million per year. This cost estimate covers the costs to seal the valves to the gas mains, disconnect the gas service lateral to individual homes, and remove the gas meter and gas riser at each property. This wide range reflects the cost discrepancy of disconnecting the entire block from gas service at the same time, versus disconnecting one home at a time. The cost estimates are based on work completed by CPAU crew. The actual cost would be different if CPAU hires outside contractors to perform the work. The gas system decommissioning cost can be offset by the savings of not having to replace the gas PVC mains in residential neighborhoods. CPAU has an ongoing Gas Main Replacement program to replace PVC gas mains with High Density Polyethylene (HDPE) gas mains, at a rate of 2 to 4 miles per year. There are currently around 23 miles of PVC gas mains in SFR zon es, plus additional PVC service lines between the gas mains and the homes. The estimated cost savings by not having to replace the PVC gas mains and service lines is between $26 million and $34 million total over the ten year study period. The total distance of gas mains in a skeletal system to serve only multifamily and nonresidential buildings is around 86 miles, down 60% from the current 210 miles of gas mains. City of Palo Alto Page 5 Estimated Combined Rate Impact Based on the combined total utility cost between $41 million and $128 million, and a 30-year bond financing rate of 3.2%, the annual utility cost is estimated to range between $2.2 million and $6.7 million. Using the FY 2020 electric and gas revenue of $177 million, this cost is estimated to be equivalent to roughly a 1.2% to 3.8% one-time increase to the combined electric and gas bill, though exact rate impacts are highly uncertain and would vary by customer. A cost of service analysis would need to be performed to determine actual customer rate impacts if the City moved forward with such a project. Next Steps Staff is currently working with the city’s S/CAP consultant to assess the cost effectiveness and GHG reductions of various proposed key actions in the energy and transportation sector. The cost impacts to the electric and gas utility will complement the S/CAP analyses to meet the City’s 80x30 goal. In addition, staff will assess the financial impact of electrifying all SFRs on both the gas utility and electricity; this analysis will estimate the bill impact to the remaining gas customers. Staff will also explore different financing mechanisms to upgrade the electric distribution system, as well as ways to align with other utility efforts such as like undergrounding and adding resiliency. Resource Impact The cost impact to achieve electrification of all SFRs in Palo Alto to both the electric and gas utilities over the next 10 years are significant. For the electric utility, the estimated cost for electric grid upgrade ranges between $30 million and $75 million. For comparison, the Electric Utility Capital Improvement Program (CIP) spending between FY 2021 and FY 2025 ranges between $11 million and $26 million per year. On the gas utility side, the estimated cost to decommission the gas infrastructure serving SFRs ranges between $11 million to $54 million, although there will be cost savings of between $26 million and $34 million by avoiding the replacement PVC mains and service lines. In the FY 2021 Gas Utility Financial Plan, the Gas Utility has a staggered gas main replacement schedule with a budgeted CIP of $2 million in one year and $7 million the following year. As for staffing impact, the two work groups that are estimated to be most impacted are Development Services and Utilities Operations. For Development Services, staff estimates the workload to process permit applications and conduct site inspections for home electrification projects and panel upgrades is around 44 FTE-year (which would translate into about four additional full-time staff if SFR electrification took place over ten years). For Utilities, staff estimates the workload to upgrade the electric distribution grid is between 83 to 210 FTE -year (approximately three to five additional four-person full-time field crews), and the workload to decommission the gas system serving SFRs is between 45 FTE-year and 229 FTE-year (anywhere from one to six four person full-time field crews working over ten years). These estimates do not include the engineering time to design the system upgrade and the detail s of gas mains City of Palo Alto Page 6 disconnection, nor the customer service time to help customers with the transition. The workload impact has two implications under the 100% single family home electrification scenario: the electrification planning needs to start early, and t he electrification process needs to be spread over many years as it takes time to recruit and train staff. Hiring outside contractors for the construction work is one alternative that would need to be considered and may or may not be feasible for certain types of activities. Policy Implications These analyses support the City Council’s priority for sustainability and the ongoing analyses as part of the 2020 Sustainability and Climate Action Plan Update. Stakeholder Engagement The analysis was primarily an internal effort. The results of this analysis will be part of the S/CAP community outreach efforts. Environmental Review The UAC’s discussion of this informational report does not meet the definition of a project, under section 21065 of the California Environmental Quality Act (CEQA), thus environmental review is not required. Attachments: • Attachment A: Electrification Impact Study • Attachment B: Responses to UAC Feedback from September 2020 • Attachment C: Presentation Electrification Impact Assessment A Preliminary Analysis of the Utility Costs & Staffing Impact to Electrify All Single-Family Residences in Palo Alto September 2020 City of Palo Alto Utilities Summer Intern: Elizabeth Oliphant City of Palo Alto Utilities Advisors: Jimmy Pachikara Aaron Perkins Sylvia Santos Christine Tam Attachment A Contents 1. Background ............................................................................................................................ 1 1.1 California and the City of Palo Alto’s Sustainability Goals ................................................. 1 1.2 Benefits of Building Electrification and Gas Disconnection ............................................... 2 1.3 Building Electrification in Palo Alto .................................................................................... 2 1.4 Project Scope ................................................................................................................... 3 2. Electric System Upgrades ...................................................................................................... 4 2.1 Load predictions ............................................................................................................... 4 2.2 Electric Vehicle Additional Loads and Scenarios .............................................................. 5 2.3 Electricity System Overview.............................................................................................. 6 2.4 Distribution Transformers ................................................................................................. 7 2.5 Costs of Transformer Upgrades ........................................................................................ 7 2.6 Strategies for Transformer Upgrades ................................................................................ 7 2.7 Secondary Distribution Line Upgrades .............................................................................. 9 2.8 Feeder Upgrades .............................................................................................................. 9 2.9 Grand Totals, Electrical Upgrades ...................................................................................10 3. Gas Disconnection ................................................................................................................11 3.1 Skeleton Gas System ......................................................................................................11 3.2 Gas Disconnection Costs ................................................................................................11 3.3 Gas Disconnection Scenarios ..........................................................................................12 3.4 Meter disconnection costs ...............................................................................................13 3.5 Grand Totals Gas Disconnection .....................................................................................13 4. CPAU Staffing Impact ...........................................................................................................14 4.1 Hours for Electrical Upgrade ............................................................................................14 4.2 Hours for Gas Disconnection ...........................................................................................15 4.3 Total Staff Hours ..............................................................................................................15 5. Summary ..............................................................................................................................16 Appendix 1: Length of Disconnected Gas Mains .......................................................................17 Bibliography ..............................................................................................................................18 1 1. Background 1.1 California and the City of Palo Alto’s Sustainability Goals In 2005, Governor Arnold Schwarzenegger gave an executive order to reduce carbon emissions to 1990 levels by 2020 and to 80% below 1990 emissions by 20501. The City of Palo Alto has a more aggressive greenhouse gas (GHG) emissions target of reducing carbon emission 80% below 1990 levels by 2030. As of 2018, Palo Alto has reduced GHG emissions by approximately 36% below the 1990 baseline. Figure 1: Palo Alto Municipal Operations and Community GHG emissions sources, from CPAU’s 2018 Earth Day Report 2. 1 Executive Order. No. S-3-05, California Gov. Arnold Schwarzenegger, 2005. 2 City Manager. Earth Day Report 2018. City Council Staff Report (ID # 8979), 16 Apr. 2018. 2 Multiple strategies are being considered to achieve this 2030 goal, one of which is building electrification. Electrification is the process of replacing natural gas appliances with efficient all electric alternatives. This study focuses on the total community cost to electrify all single-family residences (SFRs) in Palo Alto, which is one of the key actions being considered in the city’s 2020 Sustainability/Climate Action Plan update. 1.2 Benefits of Building Electrification There are numerous environmental benefits associated with building electrification. Direct combustion of natural gas accounts for almost one third of the GHG emissions in Palo Alto. Additionally, over 2% of all distributed natural gas in the United States leaks out of pipelines into the atmosphere 3. This natural gas contains methane, a potent greenhouse gas with a warming effect 25 times as powerful as carbon dioxide on a 100 year timescale and 84 times as powerful as carbon dioxide on a 20-year timescale4. By replacing natural gas appliances with electric appliances, California homes are estimated to be able to reduce their annual GHG emissions by 33-56% in 20205. Given Palo Alto’s carbon neutral electric supply, electrification of all SFRs will achieve around 49,000 MT of GHG emissions reduction. Besides lowering GHG emissions, all-electric buildings have reduced fire risk, and also avoid the risks of gas leaks or backdrafting of carbon monoxide. 1.3 Building Electrification in Palo Alto The City of Palo Alto Utilities (CPAU) electricity mix in 2018 was: 35% hydroelectricity, 39% Solar, 12% Wind, and 12% Biomass and Biowaste6. In addition to this electricity, CPAU also provides customers with natural gas and buys carbon offsets to maintain a carbon neutral gas portfolio. With residential electrification, the city’s gas consumption will be dramatically reduced, and thus the city would no longer purchase offsets. Despite the opportunity for emissions reduction, few houses in Palo Alto are electrified largely due to customer appliance preferences and the upfront costs associated with retrofitted existing systems. 3 Alvarez, Ramón A., et al. “Assessment of Methane Emissions from the U.S. Oil and Gas Supply Chain.” Science Magazine, vol. 361, no. 6398, July 2018, pp. 186–188. 4 “Methane: The Other Important Greenhouse Gas.” Environmental Defense Fund, www.edf.org/climate/methane-other-important-greenhouse-gas. 5 Mahone, Amber, et al. Residential Building Electrification in California: Consumer Economics, Greenhouse Gases and Grid Impacts. Energy Environmental Economics (E3), Apr. 2019. 6 Power Content Label. City of Palo Alto Utilities, 2018. 3 1.4 Project Scope Figure 2: Map of the different land uses in the City of Palo Alto sourced from GIST. The yellow represents SFR zones, which is the focus of this building electrification analysis. This analysis was performed to provide a preliminary estimate of the cost impacts of electrifying all SFRs within Palo Alto. The estimates are based on current engineering project costs that cover both labor and material costs. While these costs may fluctuate up and down, construction costs will likely increase over time. Further studies will be needed to update and refine cost estimates as projects evolve and move forward. Based on county assessor data and gas disconnection records, the City of Palo Alto is estimated to have 15,176 SFRs of which approximately 168 have already been disconnected from the gas system. This analysis is to determine the utility costs associated with electrifying the remaining 15,008 homes, which include the cost of electrical distribution upgrades and gas disconnection. Note that utility costs are recouped via retail rates. An additional analysis of the customer costs (appliances, panel upgrades, etc.) was also performed and the results will be presented at a later date as part of the City’s Sustainability and Climate Action Plan update. 4 2. Electric System Upgrades The electrification of all single-family home appliances will increase peak demand and the overall load on the electrical system. To accommodate for this increased load, CPAU will need to upgrade the electrical distribution system serving the single-family home neighborhoods. 2.1 Load predictions Figure 3 & 4: Hourly loadshape predictions for mixed Fuel and all electric houses in Palo Alto (CZ4) Type of System Winter Peak Demand (kW) January energy use (kWh) July energy Use (kWh) Yearly Energy Use (kWh) Mixed Fuel 1.37 777 560 7500 All Electric 3.62 1750 1053 11,872 Table 1: Estimated Peak Demand and Energy Use for Mixed Fuel and All Electric Homes in Palo Alto The addition of electric appliances in SFRs will increase the overall electricity demand, peak electricity demand, and individual residents’ yearly energy consumption as shown by the Table 1. These demand and usage predictions do not include the load from electric vehicle charging, which is addressed in the following section. Electricity demand for all-electric homes peaks on winter mornings largely due to heating. In January, the peak load for an all-electric home is on average 2.64x the peak load for a mixed fuel home. This increase in peak load will exceed the capacity of some components of the distribution grid on winter mornings and will require CPAU to upgrade these components. 5 2.2 Electric Vehicle Additional Loads and Scenarios In 2016, 22% of new vehicles registered in Palo Alto were electric vehicles (EVs)7. By 2030, 80% of all vehicles need to be EVs to meet Palo Alto’s S/CAP goals. The impacts of this level of EV penetration was estimated in this study. For this assessment, two scenarios (optimistic flexible load and conservative) were considered in regard to the additional load due to EVs. Optimistic Flexible Load Scenario In this scenario, flexible charging or energy management technology is assumed to be available by 2030 to shift EV charging to non-peak times. Thus, the peak electricity demand will not increase with the addition of EVs. Conservative Scenario In the conservative scenario, limited flexible charging technology is assumed to be available for shifting the EV load. The peak demand is estimated to increase by 9.74 kW per transformer. This estimate comes from several assumptions based on current Palo Alto residents’ driving habits and efficiency of EVs. For the purpose of this assessment, the average Palo Alto resident is assumed to drive 10,000 miles per year, slightly lower than the national average of 13,500 due to Palo Alto’s walkability and cycling friendly streets 8. Current EVs get approximately 3.5 miles per kWh 9, but EV efficiency is expected to increase in the coming years. Therefore, we assumed EV efficiency will be 4 mile per kWh by 2030. 80% of charging is assumed to be at home with the other 20% of charging being done in office spaces or public charging stations. With these assumptions, the average EV is expected to use 2,000 kWh of charging every year at home. EV owners typically charge their cars at night so charging is assumed to take place between 9pm and 6 am. This charging pattern would mean each EV car uses on average 0.608 (rounded) kW per hour. The average Palo Alto house has 2 cars, so each house has an average consumption of 1.217 additional kW. With 8 houses per transformer that equals approximately 9.74 kW of additional load. In this conservative scenario, this load is added to the peak load for each transformer. Outage scenario An additional scenario was considered for a several hour power outage. At the end of a several hour power outage, appliances such as the HVAC system and the water heater are expected to power on at max capacity. The maximum demand for a heat pump water heater operating in heat pump mode is assumed to be 0.5 kW, and the maximum demand of a HVAC system is relative to the vintage of the house. The percent of houses of each vintage was determined from county assessor data, and the outage max demand was determined by prorating the max demand per vintage by percent of houses 7 City of Palo Alto Utilities Department. Assessment of CPAU’s Distribution System to Integrate Distributed Energy Resources. 12 Apr. 2018. 8 Average Annual Miles per Driver by Age Group. Department of Transportation, Federal Highway Administration, 2020, www.fhwa.dot.gov/ohim/onh00/bar8.htm. 9 “EVs With The Best MPGe Ratings For 2019.” MYEV.com, www.myev.com/research/comparisons/evs-with-the-best-mpge-ratings-for-2019. 6 of each vintage as shown by Table 2. The outage peak demand for Heat Pump Space Heating was determined to be 7 kW per house. Max kW for Heat Pump Space Heating by House Vintage 1978 1992 2001 Percent of Homes 71% 13% 16% Max Demand* 7.73 5.94 4.59 *Assuming 2100 sq ft home with ceiling insulation R19, 3 ton HVAC with HSPF 12 Table 2: Max demand of a heat pump HVAC system by house vintage from simulations using the CEC Title 24 energy compliance model. The heat pump’s maximum demand of 7 kW was added to the water heater’s 0.5 kW demand and a base demand of 1 kW to get a peak demand of 8.5 kW per house in this outage scenario. This peak demand is dramatically higher than the 1.4 kW peak demand for a mixed fuel home. 2.3 Electricity System Overview Figure 5: Diagram of an electrical distribution system from electricity generation to distribution. The City of Palo Alto Utilities is responsible for providing electricity to all residential and commercial customers. As of 2020, CPAU had approximately 25,500 residential (single-family and multifamily) and 4,000 commercial customers. To support these customers, the city maintains substations, main-line circuits, distribution transformers, and secondary distribution lines. The city distributes electricity from 9 substations, and PG&E is largely responsible for long range transmission to the city. To accommodate for the increased load due to electrification, CPAU will have to upgrade parts of its distribution network. 7 2.4 Distribution Transformers With the increased load due to electrification many of CPAU’s distribution transformers will be overcapacity and additional transformers will need to be built. Distribution transformers come in 3 forms: pole top, pad-mounted, and vault mounted. Currently CPAU has approximately 3,150 distribution transformers. Of these transformers, 797 are estimated to serve single-family houses. This estimate was determined from assumptions about transformer type and location of the transformers in GIST. Transformers that are 3 phase, had higher capacity than 75 kVA , or had a voltage rating higher than 120/240 were assumed to serve commercial customers instead of residential customers. In all scenarios, over 95% of the distribution transformers serving SFR are predicted to be over-capacity with electrification. In the optimistic flexible load scenario, 759 distribution transformers are expected to be overcapacity. In the conservative scenario, 773 distribution transformers are expected to be over-capacity. Finally, in the outage scenario, 785 of the 797 distribution transformers serving SFRs are expected to be over-capacity. A detailed breakdown of over-capacity transformers can be found in Table 3. Total Amount of Over-capacity Transformers by Scenario Total Over-capacity Transformers Optimistic Flexible Load Conservative Outage 759 773 785 Breakdown by Type Overhead 563 570 577 Pad Mounted 266 271 111 Vault 102 106 97 Table 3: Estimates for expected number of over-capacity transformers due to SFR electrification 2.5 Costs of Transformer Upgrades Costs per transformer upgrades were estimated by CPAU’s Engineering division and can be found in the Table 4. The labor costs are based on the cost of Utility Crew, and would be different if the CPAU hires outside contractors to perform the work Cost Estimates of Additional Transformers Type of Transformer Equipment Cost Labor Costs Total Cost Min Max Min Max Min Max Overhead $1,000 $3,000 $3,225 $7,525 $4,225 $10,525 Pad-Mounted (Up to75kVa) $7,000 $12,000 $7,525 $12,900 $14,525 $24,900 Vault Mounted $4,000 $12,000 $11,825 $17,200 $15,825 $29,200 Table 4: Estimates for CPAU staff to upgrade distribution transformers 2.6 Strategies for Transformer Upgrades Two strategies for transformer upgrades were considered for both the optimistic flexible load and the conservative scenarios. The number of upgrades was determined by comparing expected peak 8 demand with maximum capacity for each transformer. Each transformer’s over-capacity percentage determined how many and what type of new transformer will be added to accommodate for the increased load due to electrification. Like for Like Upgrade In the like for like upgrade strategy, over-capacity transformers are assumed to be upgraded with additions of the same type of transformer except for vault mounted transformers, which CPAU no longer installs due to safety issues. These vault mounted transformers will be upgraded with additional pad mounted transformers. For this scenario, the estimated number of transformers needed and costs can be found in Table 5. Transformer Upgrades Like for Like Conservative Optimistic Flexible Load # Transformers Min Cost Max Cost # Transformers Min Cost Max Cost Breakdown by Type Overhead 1997 $8,437,325 $21,018,425 1649 $6,967,381 $17,356,613 Pad Mounted 477 $6,928,425 $11,877,300 386 $4,878,851 $9,609,952 Total 2474 $15,365,75 0 $32,895,725 2035 $12,573,187 $26,966,565 15,008 SFR Per Household $1,024 $2,192 Per Household $838 $1,797 Table 5: Cost analysis for like for like upgrading of distribution transformers to support SFR electrification Optimized Upgrade In this scenario, upgrades are based on how overcapacity a transformer is and what would be the most suitable type of additional transformer to add. All over-capacity vault and pad mounted transformers will be upgraded with additional pad mounted transformers. Overhead transformers that are expected to be higher than 3 times over capacity will be upgraded with additional pad mount transformers. Additionally, transformers that are 200-300% over capacity and have a maximum capacity over 25 kVA are expected to be upgraded with additional pad mounted transformers. Transformers that are 200-300% times over capacity, but under 25 kVA are expected to need an additional 2 overhead transformers. All overhead transformers that are under 200% over capacity are expected to need 1 additional overhead transformer. The estimated costs and number of additional transformers needed using this optimized upgrade strategy can be found in Table 6. Total Upgrades Optimization Conservative Case Optimization Optimistic Flexible Load # Transformers Min Cost Max Cost # Transformers Min Cost Max Cost Breakdown by Type Overhead 125 $528,125 $1,315,625 256 $1,081,600 $2,694,400 Pad Mounted 75 kVA 969 $14,069,481 $24,119,111 497 $7,217,692 $12,373,187 Total 1094 $14,597,606 $25,434,736 753 $8,299,292 $15,067,587 15008 SFR Per Household $973 $1,695 Per Household $553 $1,004 Table 6: Cost analysis for optimized upgrading of distribution transformers to support SFR electrification 9 2.7 Secondary Distribution Line Upgrades In addition to upgrading distribution transformers, CPAU will need to upgrade or install new secondary transmission lines which connect multiple houses to transformers. It is estimated that 20% of overcapacity transformers will need their secondary distribution line upgraded as well. The estimated cost of these upgrades can be found in Table 7. Secondary Distribution Line Upgrades Optimistic Conservative Chance of triggering upgrade Min Cost Max Cost # of Transformers 759 773 20% $30,000 $50,000 Total Cost Optimistic Total Cost Conservative Min Max Min Max $4,554,000 $7,590,000 $4,638,000 $7,730,000 Table 7: Estimated Costs to upgrade CPAU’s secondary distribution lines for SFR electrification 2.8 Feeder Upgrades There are 68 medium feeder lines in the City of Palo Alto and with the increase in load due to electrification 17 of these feeders are expected to be over-capacity in both the optimistic flexible load and the conservative scenarios. To determine if a feeder was over-capacity, the total new load on the feeder was calculated, and then this load was compared to the feeder capacity which can be seen in Figure 6. CPAU’s engineering staff provided an estimate of $1-2 million for upgrading each overcapacity feeder for a total of $17-34 million to upgrade all of the feeders which are expected to be overcapacity with increased electrification. Figure 6: Feeders capacity (MVA) vs Maximum Observed Loading (MW) in CY 2016 (source: CPAU Staff report to the Utilities Advisory Commission on Assessment of CPAU’s Distribution System to Integrate Distributed Energy Resources, April 12, 2018) 10 2.9 Grand Totals, Electrical Upgrades The estimated grand total for upgrading the electrical distribution system to support the increased load due to electrification can be found in Table 8. Electrical Upgrades Grand Total Conservative Optimistic Flexible Load Min Max Min Max Transformers Like For Like $15,365,750 $32,895,725 $12,573,187 $26,966,565 Optimization $14,597,606 $25,434,736 $8,299,292 $15,067,587 Secondary Distribution $4,638,000 $7,730,000 $4,434,000 $7,390,000 Feeders $17,000,000 $34,000,000 $17,000,000 $34,000,000 Total (assuming Optimized Upgrade costs for transformers) $36,235,606 $74,625,725 $29,733,292 $68,356,565 Per SFR $2,414 $4,972 $1,981 $4,555 Table 8: Estimated Cost to upgrade electric distribution system under two difference scenarios. 11 3. Gas Disconnection To complete electrification, all SFRs will need to be disconnected from the gas system, but a skeleton gas system will remain in the city to serve commercial and multifamily customers. 3.1 Skeleton Gas System A skeleton gas system is necessary to transport natural gas around the city and connect commercial areas to the gas system. For the purpose of this study, all pipes that were 6 inches or larger were assumed to be part of this skeleton gas system and stay in active use even if they are located in single-family zones. 3.2 Gas Disconnection Costs There are three gas distribution components that will need to be disconnected: mains, service lines, and risers. The disconnection and sealing of natural gas mains and service lines has 3 stages: excavation, demolition, and backfill. After sealing, the mains and service lines will remain in the ground. The hourly cost of labor is the primary cost for these projects, and the number of hours for each project is dependent on the type of the gas pipe (service pipes or mains) and material. Steel pipes take longer to seal because of the necessary welding. CPAU’s Engineering division gave the following estimates for the time it takes to complete sealing of gas service lines and mains. Labor hours for gas disconnection task Service Line Mains Excavation 1.5 2 Sealing PE or PVC pipe 0.5 1.5 Sealing Steel Pipe 1 3 Backfill 0.5 1 Range in Total Time (hours) 2.5-3 4.5-6 Table 9: Estimates by Engineering Division on the time needed to seal up natural gas pipelines at their valves For both the optimistic and conservative disconnection scenarios, a maximum and minimum cost were calculated. The minimum cost is based on the time above and an estimate of $350 per hour for a City Utility Crew consisting of a Lead, Heavy Equipment Operator and two Installer Repair personnel; when including vehicle and facilities overhead, the hourly cost is $640. The actual cost per hour would be different if the work was done by outside contractors. To account for work day variations, a maximum cost scenario was also calculated by multiplying the time estimates in Table 9 by 1.5. 12 3.3 Gas Disconnection Scenarios An optimistic and a conservative scenario were considered for gas disconnection. In the optimistic scenario CPAU is able to disconnect most SFRs by sealing up mains, but in the conservative scenario all SFRs will need their service lines individually sealed. In both scenarios, each single-family home will need their gas riser and meter disconnected by a professional meter technician. Optimistic Disconnection Scenario Costs In the optimistic scenario, all mains in SFR zones that are not part of the skeleton gas system will be sealed at their valves. Typically mains have 1-2 valves per block. When these mains are sealed, all service lines connected to them will cease to operate. In this scenario, the only service lines that will need to be disconnected will be the service lines connected to the skeleton gas system. Table 10 shows the estimated total cost for disconnecting all mains and service lines for this optimistic scenario. Optimistic Scenario: Disconnection Cost for Mains and Service Lines Type Number of disconnects Minimum Time per unit Maximum Time per unit Minimum Cost Maximum Cost Main valves PE 1259 4.5 6.75 $3,625,920 $5,438,880 PVC 107 4.5 6.75 $308,160 $462,240 Steel 274 6 9 $1,052,160 $1,578,240 Service Lines BWP 105 3 4.5 $201,600 $302,400 PE 2450 2.5 3.75 $3,920,000 $5,880,000 PVC 24 2.5 3.75 $38,400 $57,600 Cost Per Hour $640 Total Costs $9,146,240 $13,719,360 Table 10: Optimistic cost estimate for sealing gas pipelines as part of SFR electrification Conservative Disconnection Scenario Costs In the conservative scenario, all SFRs will need their service lines disconnected individually, and all mains not in the skeleton gas system will have to be sealed at their valves. This scenario was considered because it is unlikely that every main in SFR areas will be able to be disconnected. Table 11 shows the estimated cost for this conservative scenario. Conservative Scenario: Disconnection Cost for Mains and Service Lines Type Number of disconnects Minimum Time per unit Maximum Time per unit Minimum Cost Maximum Cost Main valves PE 1259 4.5 6.75 $3,625,920 $5,438,880 PVC 107 4.5 6.75 $308,160 $462,240 Steel 274 6 9 $1,052,160 $1,578,240 Service Lines 15,008 2.5 4.5 $24,012,800 $43,223,040 Total Costs $28,999,040 $50,702,400 Table 11: Conservative cost estimate for sealing gas pipelines as part of SFR electrification 13 3.4 Meter disconnection costs In both scenarios, all SFRs will need to have their gas meters and risers disconnected individually. CPAU’s Engineering division estimates the cost to disconnect these meters and risers is between $150-200 per house. The estimated cost to disconnect the meters and risers of all 15,008 SFRs ranges between $2,251,200 and $3,001,600. 3.5 Grand Totals Gas Disconnection The grand totals and average prices per house for disconnecting all 15,008 SFRs in the city of Palo Alto can be found in the Table 12. The actual cost for disconnection will likely fall in between the optimistic and conservative estimates. These estimates are based on work completed by CPAU crew. The actual cost would be different if CPAU hires outside contractors to perform the work. Grand Totals Gas Disconnection Type of Disconnection Optimistic Conservative Min Max Min Max Mains $4,986,240 $7,479,360 $4,986,240 $7,479,360 Service Lines $4,160,000 $6,240,000 $24,012,800 $43,223,040 Meters and Risers $2,251,200 $3,001,600 $2,251,200 $3,001,600 Total $11,397,440 $16,720,960 $31,250,240 $53,704,000 Per SFR $759 $1,114 $2,082 $3,578 Table 12: Grand Totals for sealing up gas pipelines as part of SFR electrification 3.6 Cost Savings Associated with Gas Disconnection Disconnecting mains and services in SFRs as part of electrification will lead to long term maintenance savings. In particular, CPAU has an ongoing Gas Main Replacement program, which aims to replace 2-4 miles of PVC piping every year. Engineering staff estimates the cost of replacing PVC piping with PE piping ranges from $128-171 per foot depending on pipe size. The length of PVC mains to be sealed was calculated (around 23 miles). Table 13 shows the cost savings associated with avoiding main replacement by sealing these PVC mains pipes, at between $26 million to $34 million. The estimated lengths of different types of gas mains that will be disconnected under the SFR electrification scenario can be found in Appendix 1. Cost Savings from Sealing PVC Mains Diameter of Main Feet Sealed Cost Per Foot Savings Total <4" 105,253 $128 $13,509,223 4" 18,376 $171 $3,135,864 Cost savings from avoided PVC gas service lateral replacement $4,400,000 Cost savings from engineering design & project management at 25%-50% of construction costs $5.3 - 12.6 million Total Cost Savings $26 – 34 million Table 13: Maintenance Cost Savings Associated with Sealing PVC gas mains as part of SFR electrification 14 4. CPAU Staffing Impact To determine the staffing impact for this project, CPAU staff hours required to install electrical upgrades, and disconnect the gas system were estimated. 4.1 Hours for Electrical Upgrade Hours for Transformer Upgrades Utilities Operations staff hours needed for transformer upgrades were determined based on labor costs provided for different transformer types and an assumed price per hour of $152. Overhead transformers are estimated to require 21-50 work hours for installation, while pad mounted transformers require 50-85 work hours for installation. The hours needed for distribution transformer upgrades were determined for both the conservative and optimistic loadshape scenarios. Additionally, both the like for like upgrade strategy and the optimized upgrade strategy were analyzed and the total hours necessary can be seen in Tables 14 and 15. Like for Like Minimum Hours Needed Maximum Hours Needed Transformer Upgrade Conservative Optimistic Transformer Upgrade Conservative Optimistic Overhead 42,371 34,987 Overhead 98,865 81,636 Pad Mounted 23,615 19,110 Pad Mounted 40,482 32,759 Total (hours) 65,985 54,097 Total (hours) 139,347 114,396 Table 14: Estimates for work hours needed to upgrade distribution transformers in SFR areas using a like for like addition Optimized Hours Needed Minimum Hours Needed Maximum Transformer Upgrade Conservative Optimistic Transformer Upgrade Conservative Optimistic Overhead 2,652 5,432 Overhead 6,188 12,674 Pad Mounted 47,972 2,4605 Pad Mounted 82,238 42,180 Total (hours) 50,624 30,036 Total (hours) 88,426 54,853 Table 15: Estimates for work hours needed to upgrade distribution transformers in SFR areas using a like for like upgrade Hours for Secondary Feeder Upgrades Utilities Operations staff hours required for secondary feeder upgrades was determined using an estimates of $152 per work hour and an assumption that 72% of the costs of upgrading secondary distribution lines is due to labor. The total hours can be seen in Table 16. Number of Secondary Distributions Requiring Upgrades Hours Per Secondary Distribution Line Conservative Optimistic Minimum Maximum 155 152 142 237 Total Hours for Secondary Distribution Lines 15 Minimum Maximum Conservative Optimistic Conservative Optimistic 21,969 21,572 36,616 35,953 Table 16: Estimates for work hours needed to upgrade overcapacity secondary feeders in SFR Hours for Feeder Line Upgrades Operations staff hours needed to upgrade feeders lines were also estimated using the same assumptions ($152 per hour and 72% of costs due to labor) as used for secondary line upgrades. The total hours required to upgrade 17 feeders can be seen in Table 17. Hours Per Feeder Line Total Hours For 17 Feeders Minimum Maximum Minimum Maximum 4,737 9,474 80,526 161,053 Table 17: Estimates for the staff hours required to reconductor and upgrade feeder lines that are overcapacity due to electrification. 4.2 Hours for Gas Disconnection An estimate of the Utilities Operations staff hours needed to disconnect the service lines and mains for SFRs was calculated from the hourly Utility Crew estimates in Table 18 and the assumption that all crew hours will be performed by a 4 person City Utility crew consisting of a Lead, Heavy Equipment Operator and two Installer Repair personnel. Each meter and riser were also assumed to take 1 hour to be disconnected. The total staff hours needed for gas disconnection can be found in Table 18. Hours Required for Gas Disconnection Minimum Hours Maximum Hours Mains and Service Lines Optimistic 57,164 85,746 Conservative 206,972 351,194 Meters 15,008 Total (hours) 72,172 366,202 Table 18: Estimates for the total staff hours needed to disconnect SFR from the gas system. 4.3 Total Staff Hours Total staff hours needed for electrification of all 15,008 SFR in the City of Palo Alto were estimated using the values and assumptions in the tables above. To support this increased staff work load, both Utilities and Development Services departments will need to recruit new staff. Category of Work Staff Hours Needed Minimum Maximum Electrical 132,134 337,016 Gas Disconnection 72,172 366,202 Grand Total (hours) 204,306 801,166 Table 19: Estimates of total staff hours needed for SFR electrification in Palo Alto. 16 5. Summary The total utility costs to electrify all 15,008 SFRs in Palo Alto was estimated to range between $54 million to $154 million, or $3,600 to $10,200 per SFR, as shown in Table 20. There are also additional costs for engineering design and planning that were not factored in this cost. Total Utility Cost Upgrade Category Min Max Conservative Optimistic Conservative Optimistic Electrical Upgrade $36,235,606 $29,733,292 $74,625,725 $68,356,565 Gas Disconnection $31,250,240 $11,397,440 $53,704,000 $16,720,960 Total $41,130,732 $128,329,725 Per SFR $2,741 $8,551 Table 20: Estimates of the total utility cost to electrify all SFRs in the City of Palo Alto 17 Appendix 1: Length of Disconnected Gas Mains Length of disconnected gas mains due to SFR electrification was calculated to determine future maintenance cost savings. Length of Mains Sealed Type Miles BWP 46 PE 55 PVC 23 Total 124 18 Bibliography 2018 Power Content Label. City of Palo Alto Utilities, 2018. Alvarez, Ramón A., et al. “Assessment of Methane Emissions from the U.S. Oil and Gas Supply Chain.” Science Magazine, vol. 361, no. 6398, July 2018, pp. 186–188. Average Annual Miles per Driver by Age Group. Department of Transportation, Federal Highway Administration, 2020, www.fhwa.dot.gov/ohim/onh00/bar8.htm. City Manager. Earth Day Report 2018. City Council Staff Report (ID # 8979), 16 Apr. 2018. City of Palo Alto Utilities Department. Assessment of CPAU’s Distribution System to Integrate Distributed Energy Resources. 12 Apr. 2018. “Duct Sealing.” ENERGY STAR, www.energystar.gov/campaign/heating_cooling/duct_sealing. “EVs With The Best MPGe Ratings For 2019.” MYEV.com, www.myev.com/research/comparisons/evs-with-the-best-mpge-ratings-for-2019. Executive Order. No. S-3-05, California Gov. Arnold Schwarzenegger, 2005. Mahone, Amber, et al. Residential Building Electrification in California: Consumer Economics, Greenhouse Gases and Grid Impacts. Energy Environmental Economics (E3), Apr. 2019. “Methane: The Other Important Greenhouse Gas.” Environmental Defense Fund, www.edf.org/climate/methane-other-important-greenhouse-gas. Responses to Utilities Advisory Commission Feedback from September 2020 Meeting Throughout the summer and fall of 2020 the City’s Utilities Department undertook a study to evaluate both the customer and utility costs of building electrification. The results of the utility cost component of the study is being presented in this report, while the customer cost component will be presented as part of the 2020 Sustainability and Climate Action Plan (S/CAP) update. At its September 2020 meeting the UAC was presented with the scope of this study and provided its feedback on topics of interest. Below is a summary of how each piece of feedback was addressed: Questions addressed in the analysis and presented in this report: •Are there physical limitations on the order in which sections of the gas system are shut down? •What are the utility impacts of upgrades to customer electrical panels? •What are the utility impacts of changes in residential load shapes due to building electrification in combination with vehicle charging? •How will residential electrification affect City staffing needs? Questions addressed in the analysis that will be presented at a later date in the context of the full Sustainability and Climate Action Plan: •What is the average customer (not utility) cost to electrify a single-family residence? This analysis is complete and will be presented as part of the Sustainability and Climate Action Plan update. •What is the customer costs to upgrade electric panels? This analysis is complete and will be presented as part of the Sustainability and Climate Action Plan update. Questions to be answered in a future analysis: •How would utility bills change as a result of mass electrification of single-family residences? This analysis is in progress and will be presented at a later date. Questions that could not be addressed in this analysis: •What is the range of costs individuals might experience when they electrify their homes? To answer this question staff would need to have a more complete survey of appliances in homes. While staff has made estimates of the market penetration of individual appliance types in homes throughout Palo Alto and rough costs to upgrade each appliance type, it does not have data on the combinations of appliance types present in individual homes, which would be needed to provide a range of costs individuals might experience. The analysis only provided estimates of the average cost to electrify a single-family home in Palo Alto. Topics that will be addressed as part of City’s S/CAP update: •Financing options for both the customer and utility costs of building electrification (including consideration of on-bill financing) Attachment B • Plans for public outreach and engagement • The City is also exploring legal issues and requirements related to these long term electrification scenarios, which may bear on the feasibility and costs of the proposals. These questions may be addressed as part of the update itself, or later during the implementation of the S/CAP. To be answered during S/CAP implementation: • Will the City be involved in procurement of appliances or installation services for customers seeking to electrify their buildings? • How will the City provide guidance to customers in managing physical space, noise, and related design issues for residential electrification? • How will the City help customers adjust to the lifestyle changes that might be needed to accommodate vehicle and building electrification (e.g. giving up gas cooking, having to change driving habits or vehicle class in order to use an electric vehicle)? • How can the City simplify permitting to reduce the cost of electrification for customers? Other questions raised: • Are technologies available to fully electrify all sizes of homes? Gas uses in homes include space and water heating, cooking, clothes drying, fireplace, outdoor grill, and pool and hot tub heating. Electric heat pump technologies to meet the needs of residential space and water heating are widely available and are at least three times more efficient than standard electric appliances. Electric clothes dryers represent 75% of the market share in U.S. households and are available in both vented and ventless models. Electric heat pump clothes dryers use up to 50% less energy than conventional electric clothes dryer and are slowly gaining market share. Induction cooktops are excellent alternatives to gas cooktops. Electric fireplaces that plug into 120V wall outlets are available from multiple manufacturers. For pool heating, heat pump pool heaters are also available and have lower operating costs than gas pool heaters because of their higher efficiencies. • Will electrification create additional potential for rolling blackouts and contribute adversely to electrical grid issues similar to those experienced in the summer of 2020? The California Independent System Operator (CAISO) engages in long-term planning processes to ensure adequate generating capacity is built to support electric loads in all hours of the day. Building electrification at a large scale has the potential to shift electric loads and require the construction of a different mix of electric generation. If the CAISO properly anticipates these shifts and ensures adequate generating capacity is constructed, electrification will not create conditions for rolling blackouts or other electrical grid issues. Note that building electrification in Palo Alto alone will not create issues for the electric system, since Palo Alto only makes a small contribution to overall electric demand. If large-scale building electrification takes place across the entire state of California, the trends will be included in CAISO demand forecasts. • What resiliency issues might affect electrified homes? The conversion of gas appliances and vehicles to electricity points to the need for a highly reliable and resilient electric system. Ensuring electric system reliability and resiliency was a focus of the Utilities Strategic Plan. Staffing of critical positions to ensure proper maintenance and replacement of the system will need to be a priority. In addition, this report details ways in which the electric system may need to be upgraded to provide adequate capacity for electrified loads. Reliability and resiliency can also be enhanced through the City’s efforts to add a second transmission pathway into Palo Alto to prevent incidents such as happened in 2009 when a plane crash severed the City’s single transmission pathway. Battery storage combined with rooftop solar can provide some resiliency, while backup generation will continue to be important for critical loads. Building more generating capacity in town has also been considered, but opportunities are limited due to land use constraints. The size of a generator needed to provide even limited power to the City during a widespread outage would require a prohibitively large amount of land and would be in conflict with City land use plans. • Should the City promote solar with storage for both carbon reduction purposes and resiliency? When compared with utility-scale renewable generation, rooftop solar is an expensive form of energy supply, and so the City no longer provides incentives for new installations. Solar is not expected to play a major role in the City’s carbon reduction goals, since new solar installations in Palo Alto simply replace existing City renewable generation when included in the City’s GHG emission inventory. New rooftop solar installations do reduce statewide GHG emissions, since they replace gas generation on the statewide electric grid in most hours of the year, currently. But as more solar generation is added to the statewide electric system, the statewide GHG reduction benefit of new rooftop solar systems will diminish. However, the City does support customers interested in installing rooftop solar by providing education, promoting solar homes via its group buy program, and seeking to reduce barriers to installation. The City supports local solar due to customer preferences and because solar systems can play an important role in improving resilience for individual customers when paired with batteries, or when paired with special inverters that allow for limited use of the panels during daylight hours for purposes such as charging mobile devices even when the electric grid is offline. Lastly, the City continues to explore partnerships with major customers for large scale microgrids within Palo Alto that could demonstrate community benefits. November 4, 2020 www.cityofpaloalto.org Electrification Impact Study An Analysis of the Total Utility Costs for Electrifying Single Family Homes in Palo Alto Attachment C 2 Motivation and Project Scope GHG Reduction○Palo Alto Sustainability and Climate Action Plan Electrification of PA Single-Family Homes○15,008 Single Family Residences (SFR)○Utility costs includes upgrading electrical system and disconnecting gas lines 3 Electrification Replacing residential gas appliances with all electric appliances Electrical Upgrades A Utility Cost November 4, 2020 4 5 Increased Electrical Loads Electrification of gas appliances will increase peak electricity demand by almost 3x Type of System​Winter peak demand (kW)​ January energy use (kWh) July energy use (kWh)​ Annual energy use (kWh)​ Mixed Fuel​1.37​777​560​7,500​ All Electric​3.62​1,750​1,053​11,872 Winter Peaking due to heating load 6 Electrical Overview and Upgrades Needed 7 Transformer Upgrades Appliance load increases considered + a potential EV load Two Scenarios Considered for EV loads○Optimistic Flexible Load = No peak demand increase○Conservative =9.74 kW added per transformer 797 transformers serving SFR zones○In both scenarios, 95%+ will be overcapacity Overcapacity transformers can be replaced with○Like for Like upgrade○Optimized upgrade = Pole --> Pad mounted○Number of additional transformers needed determined from increased load 8 Costs Transformer Upgrades Like for Like Upgrades Conservative Case Optimistic Flexible Load Min Cost Max Cost Min Cost Max Cost $15,365,750 $32,895,725 $12,573,187 $26,966,565 Optimized Upgrades Conservative Case Optimistic Flexible Load Min Cost Max Cost Min Cost Max Cost $14,597,606 $25,434,736 $8,299,292 $15,067,587 Like for Like Upgrades Optimized Upgrades 9 Other Electrical Upgrades 20% of secondary transmission lines will also need to be upgraded 25%feeder lines expected to be overcapacity and will need to be upgraded System Component to be Upgraded Cost per Upgrade Number of Upgrades Min Cost Max Cost Conservative Optimistic Secondary Transmission Lines $30,000 $50,000 155 152 Feeders $1,000,000 $2,000,000 17 Total Costs Other Upgrades Scenario Min Max Optimistic $21,554,000 $21,638,000 Conservative $24,590,000 $24,730,000 Gas Disconnection A Utility Cost November 4, 2020 10 11 Gas Disconnection All 15,008 SFR will be disconnected from the gas system A Skeleton Gas System remains throughout the city Types of disconnection○Mains○Service Lines○Meters and Riser Sealing Cost Estimate of $640 per hour cover 4 person CPAU crew and overhead expenses. Cost per hour would be higher with outside contractors 12 Gas Disconnection Mains= larger pipes that serve several customers Mains are sealed at valves○Per block 1-2 valves for each main Sealing at the valve disconnects all service lines connected to the main if all customers agree to disconnection Service Lines connect to individual houses Two scenarios considered for Service Lines All SFR meters and risers will need to be disconnected by a professional meter technician 13 Gas Disconnection: Costs Two Scenarios Considered Both Scenarios sealing:○1640 mains○15,008 Meters and Risers Optimistic Scenario○Only houses on the skeleton gas system need their service line individually disconnected Conservative Scenario○Service lines for all houses need to be individually disconnected Number of Disconnections Needed Type ​Optimistic Conservative Main Valves ​ PE ​1,259 ​1,259 ​ PVC ​107 ​107 ​ Steel​274 ​274 ​ Service Lines ​2,579 15,008 ​ Meters and Risers 15,008 14 Gas Disconnection: Total Costs Grand Totals Gas Disconnection Type of Disconnection Optimistic Conservative Min Max Min Max Mains $4,986,240 $7,479,360 $4,986,240 $7,479,360 Service Lines $4,160,000 $6,240,000 $24,012,800 $43,223,040 Meters and Risers $2,251,200 $3,001,600 $2,251,200 $3,001,600 Total $11,397,440 $16,720,960 $31,250,240 $53,704,000 15 Cost Savings Sealing some gas mains will lead to long term maintenance savings CPAU has a Gas Main Replacement program,which aims to replace 2-4 miles of PVC piping every year Cost savings from avoiding the replacement of 23 miles of gas PVC mains and service lines estimated at between $26 million to $34 million Grand Totals November 4, 2020 16 17 Grand Total Total Utility costs if all SFR are electrified Total Utility Cost Upgrade Category Min Max Conservative Optimistic Conservative Optimistic Electrical Upgrade $36,235,606 $29,733,292 $74,625,725 $68,356,565 Gas Disconnection*$31,250,240 $11,397,440 $53,704,000 $16,720,960 Total $41,130,732 $128,329,725 * excludes cost savings from avoided PVC gas line replacement Using a 30-year 3.2% bond financing rate, annual utility cost ranges between $2.2 to $6.7 million Staff Hours November 4, 2020 18 19 Staff Hours Required Staffing impact on Electric Operations determined based on breakdown of cost (labor +parts) and a rate of $152 per hour Staffing impact on Gas Operations determined based on per hour estimates provided by Engineering More staff hours expected for engineering design and processing permits Category of Work Staff Hours Needed Minimum Maximum Electrical Upgrade 132,134 337,016 Gas Disconnection 72,172 366,202 Grand Total 204,306 801,166 Questions? Thank you November 4, 2020 www.cityofpaloalto.org City of Palo Alto (ID # 11600) Utilities Advisory Commission Staff Report Report Type: Agenda Items Meeting Date: 11/4/2020 City of Palo Alto Page 1 Summary Title: Electric Vehicle Charger Needs Assessment Title: Discussion of Electric Vehicle Charger Needs Assessment to Reach 80% Electric Vehicle Penetration by 2030 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 To achieve the Palo Alto community’s Sustainability and Climate Action Plan (S/CAP) goal of reducing greenhouse gas (GHG) emission to 80% below 1990 levels by 2030, Palo Alto needs to achieve an electric vehicle (EV) adoption rate of close to 80%, up from the currently estimated adoption rate of 9%. During the summer an intern undertook the task of developing estimates of EV charging needs to support an 80% EV penetration level and associated costs. The analysis found the need for 24,200 to 38,300 EV charging ports, up from the estimated 4,300 charging ports currently estimated to be in place. The cost of installing these chargers at different types of sites was also evaluated on a preliminary basis. The analysis findings are outlined in the attached report (Attachment A) and summarized in the form of a presentation (Attachment B). These estimates are preliminary in nature, to inform the community and city staff in its efforts to further accelerate the adoption of EVs in Palo Alto in the coming years. The cost estimates are highly variable depending on the site and flexibility will be important in the City’s EV infrastructure planning in coming years. Timeline The analysis was undertaken this summer and the broad estimates developed in this study will inform the S/CAP policy discussions in 2021, but as noted, actual costs will depend on a variety of factors. CITY OF PALO ALTO Staff: Shiva Swaminathan City of Palo Alto Page 2 Resource Impact A summer intern undertook this analysis over a 10-week period this summer. No additional resources are anticipated to expended on this analysis at this time Policy Implications As Council considers S/CAP policy options to accelerate electric vehicle use, the study can inform the discussion. Planning ahead for the potential electrical consumption increases due to the wide-scale adoption of EVs will assist the City’s electric utility to continue to provide safe, reliable and cost-effective utility services. Stakeholder Engagement The analysis was primarily an internal effort with input from industry stakeholders. The results of this analysis will be part of the S/CAP community outreach efforts. Environmental Review The UAC’s review of this analysis does not meet the definition of a project under section 21065 of Public Resources Code, thus, environmental analysis is not required at this time. Attachments: • Attachment A: Evaluation of Palo Alto Electric Charger Needs • Attachment B: Presentation 1 Evaluation of Palo Alto Electric Vehicle Charger Needs to Achieve 80% Electric Vehicle Penetration by 2030 Mo Sodwatana Stanford University August 28, 2020 Attachment A 2 Table of Contents I. Executive Summary ...................................................................................................................................... 3 II. Introduction ................................................................................................................................................. 5 The Sustainability and Climate Action Plan .............................................................................................................. 5 Within the Context of California’s Goals .............................................................................................................. 5 Project Objective ....................................................................................................................................................... 5 III. Framework for Analysis ................................................................................................................................ 6 IV. Current EV Charging Scene ........................................................................................................................... 6 Palo Alto Community Statistics ................................................................................................................................. 6 EV Charging Patterns ................................................................................................................................................ 7 Existing Charging Infrastructure Estimate ................................................................................................................ 8 V. EV Charger Needs in Palo Alto by 2030 ......................................................................................................... 8 Residential EV Charging Ports Need ......................................................................................................................... 8 Multi-Family EV Charging Needs .......................................................................................................................... 9 Non-Residential EV Charging Ports Need .................................................................................................................. 9 VI. Cost Estimate .............................................................................................................................................. 10 VII. Incorporating Community Feedback ...................................................................................................... 11 VIII. Key Takeaways .............................................................................................. Error! Bookmark not defined. Appendix A: EV Charging Stations and Estimating Current Charging Ports in Palo Alto ........................................ 12 Types of EV Charging Stations ................................................................................................................................ 12 Estimating Current Charging Ports in Palo Alto ...................................................................................................... 13 Appendix B: Projection of EVs and Forecasting Charger Needs ............................................................................ 14 Projecting EVs in Palo Alto by 2030 ........................................................................................................................ 14 Forecast of EV Charging Ports Needed ................................................................................................................... 16 Appendix C: Multi-Family Property Survey and Findings ...................................................................................... 18 Appendix D: Cost Estimation Approach ............................................................................................................... 22 Charging Port to Site Conversion ............................................................................................................................ 22 Utility-Side Cost Estimate ........................................................................................................................................ 23 Customer-Side Cost Estimate .................................................................................................................................. 24 3 I. Executive Summary In order to reduce greenhouse gas (GHG) emissions to 80% below 1990 level by 2030, the City of Palo Alto needs to undergo aggressive electrification of vehicles. To achieve this goal, the city needs to increase the adoption rate of electric vehicles (EVs) in Palo Alto and ensure adequate EV charging infrastructure. This study analyzes an 80% penetration scenario of EVs in Palo Alto by 2030, from the current 9%, and determines the quantities of various types of charging infrastructure required to support that level of penetration. The assessment considers various components, such as charging patterns of residential and commuting EV drivers and current EV trends in Palo Alto. The study also gives an estimate of the costs associated with equipment, installation and upgrade. This study also explores the specific needs of charging infrastructure in multi-family properties. The results of the study are categorized into residential and non-residential categories. Residential includes EVs registered in Palo Alto. The charger types needed to support these EVs are 1) single-family residential (SFR) Level 1 (L1) chargers,1 2) single-family residential Level 2 (L2) chargers 2 and 3) multi-family L2 chargers.3 Non-residential includes EVs commuting to Palo Alto and commercial and governmental EVs registered in Palo Alto. The charger types needed to support these EVs are non-residential L2 and Direct Current Fast Chargers (DCFC). Due to the highly variable and dependent factors that influence the cost of EV infrastructure, it can be challenging to come up with an exact cost estimate. Examples of such factors include the need to upgrade the electrical service panel, the potential need for trenching across hardscape and the charging ports per site. Due to this high uncertainty, a range of costs are presented. Table 1. Breakdown of total estimated cost per port. Charger Type Number of ports Number of sites Cost per port SFR residential L1 5,000 – 8,000 4,200 – 6,700 $0 – $300 SFR residential L2 10,000 – 12,000 10,000 – 12,000 $3,000 – $10,000 Multi-family L2 3,000 – 6,000 450 – 890 $12,400 – $49,900 Non-residential L2 6,000 – 12,000 240 – 480 $5,400 – $20,500 DCFC 200 – 300 45 – 65 $62,000 – $230,000 Total 24,200 – 38,300 14,935 – 20,135 1 A Level 1 charger is defined as a charger using a 120-Volt alternating current plug. 2 A Level 2 charger is defined as a charger using 208 or240 Volt electrical service. 3 Multi-family and single-family L2 chargers are considered separately due to the fact that installation process and costs for L2 chargers in multi-family buildings are significantly different. 4 The key takeaways from this analysis are: • If the 80% EV penetration goal is met: o The number of EVs will increase tenfold and charging needs are expected to increase 6- to 8-fold – with the assumption that utilization rate per port will be higher than current levels. o Energy consumption will increase from the current 1.5% of total load to 15% of total load. On the residential side, it is expected to increase from 6% to 69% of total residential electrical load. o The number of EVs per household is projected to increase from 0.18 to 1.7 EVs per household. • The cost per port is highly variable and is dependent on the need for an electrical service panel upgrade, the potential need for trenching, and the number of ports installed per site. • Due to economies of scale, greater ports per site is more cost effective. For non- residential L2 ports, the installation cost per port at commercial campuses is projected to be lower than at multi-family properties. Planning for and financing a project at this scale will be challenging. However, the variability in cost indicates that with strategic planning, it is possible to achieve the low-end cost and avoid the high-end cost. The cost estimates are preliminary in nature and are highly dependent on the site. 5 II. Introduction The Sustainability and Climate Action Plan The City of Palo Alto has ambitious goals to reduce the community’s carbon impacts, greenhouse gas (GHG) emissions and resource consumption. One such goal is the Sustainability and Climate Action Plan (S/CAP) launched 2014. In early 2020 the City updated its S/CAP to ensure the sustainability goals are being met, including their “80 x 30” goal which aims to reduce GHG emissions to 80% below 1990 levels by 2030.4 While there are seven identified key areas, shown in Figure 1, this paper will primarily focus on EVs. Electrifying transport is essential to Palo Alto’s plans to address climate change and air quality as more than half of the city’s emissions come from the transportation sector. Within the 2020 S/CAP goal, Palo Alto plans to reduce transportation-related GHG emissions 80% by 2030, from 300,000 MT CO2e to 60,000 MT CO2e by increasing EVs registered in and commuting to the city 80% and ensuring adequate charging network to support the high level of penetration. Within the Context of California’s Goals Within the context of California’s goals, Palo Alto’s transport electrification goals go beyond those set by the state. As of 2019, there are 25 million cars registered in California, of which around 2% or 568,000 are EVs.5 With the state aiming for 5 million EVs by 2030 6, the EV penetration could reach 20% by 2030. This goal will help cut the state’s GHG emissions to 40% below 1990 levels by 2030.7 Project Objective Expanding access to charging infrastructure is a necessary complement to EV adoption, and with the Palo Alto’s goal to electrify 80% of vehicles registered in and commuting to Palo Alto by 2030, it becomes essential to assess EV charging infrastructure needs in Palo Alto. 4 City of Palo Alto. 2020. Sustainability and Climate Action Plan. June 6. Accessed August 21, 2020. https://www.cityofpaloalto.org/services/sustainability/sustainability_and_climate_action_plan/default.asp. 5 Statista. 2019. US Automobile Registration in 2018, by State. December. https://www.energy.ca.gov/data- reports/energy-insights/zero-emission-vehicle-and-charger-statistics and https://www.statista.com/statistics/196010/total-number-of-registered-automobiles-in-the-us-by-state/. 6 https://ww2.arb.ca.gov/zev-collaboration 7 California Public Utilities Commission. n.d. Zero-Emission Vehicles. https://www.cpuc.ca.gov/zev/. Figure 1. Seven proposed key priorities for S/CAP. 6 This study will answer the question of what charging infrastructure Palo Alto will need to support 80% EV penetration and what type of chargers will be needed. The study will also provide a high- level cost estimate associated with installation, equipment and upgrade. III. Framework for Analysis The framework for analyzing EV charger needs in Palo Alto to accommodate 80% EV penetration is shown in Figure 2. Figure 2. EV charging infrastructure assessment analysis process. It is important to note that the assessment is based on current understandings of EVs and their charging needs and that improvements such as in battery technology and charging efficiencies can alter these results. In addition, the cost estimates do not include site specific detailed engineering design and are to be considered directional or order of magnitude estimates for planning purposes. While the focus is on achieving 80% penetration of EVs by 2030, three other scenarios were also explored. These scenarios were of 25%, 30% and 50% penetration. The 25% penetration case represents the base case, which is aligned closely with the state’s current goal of reaching 5 million EVs by 2030. IV. Current State of EV Charging in Palo Alto Palo Alto Community Statistics The City of Palo Alto is located in the San Francisco Bay Area in the heart of Silicon Valley. The city has a population of 65,000 residents living in 25,000 households. Of these households, 15,000 are single family residences (SFR) and 10,000 are multi-family units.8 8 Bay Area Census. n.d. Bay Area Census: City of Palo Alto. Understand current EV trends, charging patterns and existing infrastructure Forecast scenario for 80% penetration of EVs by 2030 Estimate the number and type of charging ports needed In-depth analysis for multi-family properties Cost estimate on the utility and customer side 7 In 2019, there were 52,000 vehicles registered in Palo Alto with EVs accounting for 9%, or 4,500, of the total registered.9 Figure 3 is the distribution of these vehicles and the breakdown of EVs. Figure 3. Distribution of vehicles registered in Palo Alto in 2019. As seen in Figure 3, EVs registered in Palo Alto include both commercial and residential. This is an important distinction because commercial EVs and residential EVs have different charging needs, which will be discussed in the next section. In addition to the vehicles registered in Palo Alto, it is estimated that 50,000 vehicles drive into the city daily. Looking at the current percent penetration of EVs in the Bay Area, around 6% to10% of these vehicles are assumed to be EVs. EV Charging Patterns Observed charging patterns suggest that most EV drivers choose to charge at home, as seen in Figure 4.10 As such, residential and non-residential EV drivers will require different quantities and types of charging. The charger type assessed for residential EVs are SFR residential L1, SFR residential L2 and multi-family L2 11, while the type of chargers assessed for commuting and commercial EVs are non-residential L2 and DCFC.12 9 Department of Motor Vehicles information provided to Palo Alto in 2018, extrapolated with 2019 estimates. 10 Melaina, Marc, and Michael Helwig. 2014. California Statewide Plug-in Electric Vehicle Infrastructure Assessment. National Renewable Energy Laboratory. 11 In this study multi-family properties are considered to have only L2 charging ports. L1 charging ports in MF units can replace L2 for a 2:1 or 4:1 ratio. 12 An explanation of the different charging stations can be found in Appendix A. Non-EVs 91.3%Commercial EVs 0.8% SFR EVs 6.7% Multi-family EVs 1.2% EVs 8.7% Home 77% Work 17% Public 6% Figure 4. Distribution of total electricity provided to EVs based on location. 8 Existing Charging Infrastructure Estimate The current estimate for the number of charger ports in Palo Alto is summarized in Table 2.13 Table 2. Estimate of charging ports in Palo Alto in 2019. Charger Type Charging Ports SFR residential L1 3,100 SFR residential L2 300 – 350 Multi-family L2 50 – 100 Non-residential L2 800 DCFC 30 Total 4,280 – 4,380 V. EV Charger Needs in Palo Alto by 2030 Residential EV Charging Ports Need In 2019, there are 52,000 vehicles registered in Palo Alto, of which 9% are residential EVs. By 2030, it is projected that 56,000 vehicles will be registered in the city. An 80% penetration means 42,000 residential vehicles will be EVs. Table 5 summarizes the current EVs and charging ports in Palo Alto, as well as the projected number to reach 80% penetration by 2030.14 Table 3. Current and projected residential EVs and charging ports. EVs As of 2019 2030 Residents in single family homes 3,500 30,000 Residents in multi-family units 600 12,000 Total 4,100 42,000 Charger Type Charging Ports As of 2019 2030 SFR L1 3,100 5,000 – 8,000 SFR L2 300 – 350 10,000 – 12,000 Multi-family L2 50 – 100 3,000 – 6,000 Total 3,450 – 3,550 18,000 – 26,000 13 The approach to estimating current charging ports in Palo Alto can be found in Appendix A. 14 Detailed steps to EV projections and charger needs forecasting can be found in Appendix B. 9 Multi-Family EV Charging Needs Incentivizing EV charger installations in multi-family properties can be very challenging and complex as there are many obstacles to overcome. Such obstacles include the lack of electrical capacity, lack of parking space and uncertainty about equipment ownership and electricity bill. In order to help overcome these obstacles, staff conducted a survey15 to get a general sense of the type of parking and the number of parking spaces available per unit at various multi-family properties. Table 6 shows the EV charging port needs by property category using results from the survey. Table 4. Breakdown of a high need scenario for charging ports needs in multi-family property for 80% penetration. Property Category Characteristics of Existing MF Property: EV Infrastructure Needs: Total # of Units Total # of Properties Approx. # Cars in MF Charging Ports Needed16 Estimated Ports/ Property Apartment Duplex 483 243 725 290 1.2 3 - 4 926 260 1,389 556 2.1 5 - 10 1,253 185 1,754 702 3.8 11 - 20 693 45 970 388 8.6 21 - 50 1,082 36 1,407 563 15.6 51 - 100 1,104 21 1,435 574 27.3 Over 100 2,217 15 2,882 1,153 76.9 Other 375 15 488 195 13.0 Townhomes 336 504 202 Condos 2,522 3,279 1,311 Other 141 183 73 Total 11,132 15,015 6,006 Non-Residential EV Charging Ports Need On the commuting side, there are around 50,000 vehicles driving into the city daily, with 6% to 10% being EVs17. By 2030, the number of vehicles commuting to the city is expected to increase to 65,000. An 80% penetration would be 52,000 EVs. Note that the potential for an increased 15 Survey methodology can be found in Appendix C. 16 This is a high end estimate, assuming 2 EVs share a charging port. The low end estimate is that 4 EVs share a port. These assumption gives a range of 3,000 – 6,000 ports for MF units for 80% penetration. 17 Current vehicle count is based on best estimates by staff based on current available data. Efforts are underway to improve this estimate as part of the S/CAP update using traffic counts and modeling. 10 level of post-COVID telecommuting was not factored into this estimate. The extent to which expanded telecommuting will occur and its effects on commuting and the use of real estate will require several years of monitoring before it can be fully taken into account in forecasts. Additionally, 4,500 vehicles registered in Palo Alto are EVs, with 9% being commercial or governmental. A 60% penetration of EVs is expected on the commercial side by 2030.18 Table 7 summarizes the EV projection and charger needs on the non-residential side.19 Table 5. Current and projected EVs and charging ports on the non-residential side. EV As of 2019 2030 Commuters to Palo Alto 4,400 52,000 Commercial and government 400 2,700 Total 4,800 54,700 Charger Type Charging Ports As of 2019 2030 Non-residential L2 800 6,000 – 12,000 DCFC 30 200 – 300 Total 830 6,200 – 12,300 VI. Cost Estimate The infrastructure segments assessed for cost estimate are broken up into 4 parts circled in orange in Figure 5. 18 The reason commercial vehicles are expected to experience a slower adoption rate is due to the difficulty of electrifying heavy duty vehicles, which are a part of the commercial fleet. 19 A detailed explanation of the steps to forecasting charger needs can be found in Appendix B. 11 Figure 5. EV charging infrastructure electrical segments, considered in cost estimation circled in orange.20 21 The cost estimates of the infrastructure segments were assessed following these steps: 1. Determining the number of charging ports per site 2. Calculating the power level at each site 3. Assessing the probability of an upgrade 4. Multiplying by the low and high cost estimate if an upgrade is needed Table 6 is a breakdown of the total incurred cost per port by charger type.22 Table 6. Breakdown of cost per port. Charger Type Cost per port Low High SFR residential L1 - $300 SFR residential L2 $3,000 $10,000 Non-residential L2 $5,400 $20,500 Multi-family L2 $12,400 $49,900 DCFC $62,000 $230,000 VII. Incorporating Community Feedback The findings of this study were presented to a group of EV advocates from the Palo Alto community and the following feedback was incorporated. 20 Make-ready includes electrical work and permit. 21 Per port cost is the cost of hardware. 22 An in-depth explanation of the approach as well as the range of costs of equipment and upgrades used can be found in Appendix D. 9 10 12 • A clarification was made on the definition of “make-ready” and “per port” cost. The low and high cost estimates for the make-ready and per port were also adjusted from the CalETC report 23 per comment that Palo Alto permitting costs are higher than average of California. • The possibility of adding L1 chargers in multi-family properties was also discussed in the report per comment that L1 chargers should not be neglected at these properties due to their generally lower cost and favorability to the grid. • In order to reach 80% penetration, it is important to note the importance of education and outreach to inform potential car buyers of EV options and available rebates. • The slower adoption rate of commercial vehicles registered to Palo Alto does not curtail the importance of electrifying that sector. A 60% penetration is for 2030 but the aim is much higher for 2045. Appendix A: EV Charging Stations and Estimating Current Charging Ports in Palo Alto Types of EV Charging Stations An infographic of the three types of EV charging stations is shown in Figure A-1. 24 Figure A- 1. Infographic of EV charging stations. 23 CalETC. 2020. Infrastructure needs assessment for 5M light-duty vehicles in California by 2030. (https://caletc.com/just-released-infrastructure-needs-assessment-for-5m-light-duty-vehicles-in-california-by- 2030/) 24 Carolina County. 2017. Find Charging Option for Your Electric Vehicle. July. Accessed August 21, 2020. https://www.carolinacountry.com/your-energy/energytech/know-charging-options-to-keep-your-ev-rolling 13 Estimating Current Charging Ports in Palo Alto This section will explain how the current charging port estimate in Palo Alto was obtained. Table A-1 summarizes the estimated charging port in 2019. Table A- 1. Estimate of charging ports in Palo Alto in 2019. Charger Type Charging Ports SFR residential L1 3,100 SFR residential L2 300 – 350 Multi-family L2 50 – 100 Non-residential L2 800 DCFC 30 Total 4,280 – 4,380 Since there are 3,500 EVs registered to residents in SFR and most drivers choose to charge their EVs at home, it is assumed that each resident has either an L1 or L2 charger at home. So, the total SFR chargers adds up to around 3,500. The number of DCFC in Palo Alto is known to be around 30 chargers,25 while the number of L2 chargers are estimated from the number of permits given by the Engineering Division of CPAU. The number of “Engineering Division defined L2 and L3”26 permits combined is 833. Since around 30 are DCFC, that leaves 800 to be chargers considered L2 in this study. Of those 800 L2 chargers, 400 were permitted to unique addresses, assumed to be SFR because it is unlikely that more than one charger will be installed in a SFR. Given there are currently more EVs registered to SFR than to multi-family, the estimate for charging ports for SFR L2 is 300-350 and for multi-family L2 is 50-100. The remaining 400 L2 chargers were permitted to repeated addresses, assumed to be non-residential locations because commercial properties typically have more than one charger. Additionally, assuming 2 ports per charger at these site, the estimate for non-residential L2 charging ports is 800. 25 PlugShare. https://www.plugshare.com/ 26 CPAU Engineering Division charger level definition: Level 1 – Any charger that can plug into standard 120VAC outlet. Typically limited by a standard 15A breaker Level 2 – Any 240VAC charger that is <40 amps (breaker size 50A). Level 3 – Any 240VAC charger that is >40 amps. 14 Appendix B: Projection of EVs and Forecasting Charger Needs Projecting EVs in Palo Alto by 2030 The forecast for the number of EVs is done by extrapolating the number of residential and commuting autos in Palo Alto linearly from 2019 to 2030, while the number of EVs are extrapolated exponentially to meet the 80% penetration.27 The impact of telecommuting in the post-COVID period was not considered in this projection. Additionally, this forecast also distinguishes between plug-in hybrid vehicles (PHEVs) and battery electric vehicles (BEVs). This is an important distinction because BEVs and PHEVs have different needs for charging infrastructure. However, while changes in trends will affect this ratio, this ratio is kept constant at 2018 Palo Alto ratio of 1 PHEV to 2.5 BEV.28 Figures B-1 and B-2 shows the exponential adoption rate of EVs to reach 80% penetration by 2030 for residential and non-residential sectors, respectively. Figure B- 1. Forecast of residential EV adoption rate to reach 80% by 2030. 27 The underlying assumption is that auto purchases grow at a constant rate, as a reflection of constant population growth. Whereas, EV purchases experience a higher adoption rate due to increasing incentives and industry trends. 28 Department of Motor Vehicles data provided to Palo Alto in 2018. - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Nu m b e r o f E V s Single Family Homes Multi-Family Units 15 Figure B- 2. Forecast of EV commuting and commercial & government EV adoption rate to reach 80% by 2030. The forecasted number of residential and non-residential EVs Palo Alto by 2030 for all four cases is summarized in Table B-1. The table also shows the anticipated electrical demand expected to result from the growth of EVs. 29 Table B- 1. Projected EVs and electrical demand for the four cases of penetration. Current (2019) Case 1: 25% Penetration Case 2: 30% Penetration Case 3: 50% Penetration Case 4: 80% Penetration # of residential EVs 4,100 14,600 16,900 28,100 42,000 # of non-residential EVs 4,800 17,100 19,700 32,900 54,700 Total EVs 8,900 31,700 36,600 61,000 96,700 Res EVs energy 9,324 33,800 39,000 65,100 104,200 % of total res energy 6% 23% 26% 43% 69% Comm EVs use 2,242 8,700 10,000 16,700 26,700 % total non-res energy 0% 1% 1% 2% 4% Total EVs energy use 11,566 42,500 49,100 81,800 130,900 % total energy 1% 5% 5% 9% 15% 29 The total electricity consumption in Palo Alto is 900,000 MWh per year, with residential using 150,000 MWh and the remaining non-residential using 750,000 MWh. The electrical consumption from PEVs is determined from the observed charging pattern of PEV owners, where 77.5% charge at home, 17.0% at work and 5.5% in public places. It also considers that the average electricity use per BEV per year is 3,399 kWh/vehicle-year while for PHEV the average electricity use is 1,924 kWh/vehicle-year. - 10,000 20,000 30,000 40,000 50,000 60,000 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Nu m b e r o f E V s Commuting Commercial & Government 16 Forecast of EV Charging Ports Needed The estimate number of charging ports needed for SFRs was based on DMV’s data that there are on average 2.1 cars per household. In the absence of exact data, for this analysis staff assumed 2.5 cars per SFR and 1.5 cars per multi-family unit. An 80% penetration means that 2 cars per SFR would be EV while the remaining “0.5” car would not be EV. With every SFR owning 2 EVs, the assumption is that they all have either an L1 or L2 charger so the total charging ports for SFR L1 and SFR L2 would be 15,000. The estimate for multi-family is discussed in Appendix C. The base estimate number of EV charging ports needed for the non-residential side is from the whitepaper published on infrastructure needs and costs in California by the California Electric Transportation Coalition (CalETC).30 The CalETC estimate is done by dividing the forecasted number of PEVs by 1,000 and multiplying by the values under each charger type. The detailed table from CalETC on infrastructure needs per 1,000 PEVs by scenario, vehicle type, and charging type is shown in Table B-2.31 Table B- 2. CalETC infrastructure needs per 1,000 EVs by vehicle and charging type. Charging Port Needs per 1,000 Vehicle Vehicle Type Level 1 Res Level 1 Non-Res Level 2 Res Level 2 Non-Res Level 2 MUD DCFC BEV 300 50 500 75 120 4 PHEV 850 100 25 25 25 0 The estimates were then adjusted accordingly to Palo Alto’s specific charging scenario after talking to charging infrastructure experts, Palo Alto residents and EV drivers. A summary of the charging ports is shown here in Table B-3. 30 CalETC. 2020. Infrastructure needs assessment for 5M light-duty vehicles in California by 2030. (https://caletc.com/just-released-infrastructure-needs-assessment-for-5m-light-duty-vehicles-in-california-by- 2030/) 31 Each vehicle type have different needs for each type of infrastructure. However, other than distinguishing between PHEVs and BEVs, the specific breakdown of the PEVs types, such as mile range and rideshareship, in Palo Alto are unknown. Therefore, the estimate using CalETC’s approach assumes that all PHEVs are 30+ mi type and all BEVs are 100-200 mi type. 17 Table B- 3. Summary of charging ports needed for 80% penetration. Charger Type Charging Ports As of 2019 2030 SFR residential L1 3,100 5,000 – 8,000 SFR residential L2 300 – 350 10,000 – 12,000 Multi-family L2 50 – 100 3,000 – 6,000 Non-residential L2 800 6,000 – 12,000 DCFC 30 200 – 300 Total 4,280 – 4,380 24,200 – 38,300 18 Appendix C: Multi-Family Property Survey and Findings Figure C-1 shows the spread of multi-family properties across Palo Alto. Figure C- 1. Locations of multi-family properties classified as apartments in Palo Alto. 32 32 Santa Clara County. Parcel Data. https://services6.arcgis.com/evmyRZRrsopdeog7/arcgis/rest/services/AssessorsParcels/FeatureServer/0 19 Staff did a survey of several multi-family properties of different unit categories to gain insight on parking space and EV charger installation barriers. Questions asked included: • Parking space-related questions: How much parking is available to each unit? What type of parking (underground, covered, uncovered)? Do units have street parking? • EV charger-related questions: How many residents currently own an EV? Does the property have any EV chargers installed? Are the property owners interested in installing chargers? Are they aware of the existing rebates the City has to offer? From the survey responses, shown in Table C-1, staff concluded that the multi-family properties had at least 1 parking space per unit. If the resident in a unit has more than 1 car, he or she would be parking on the street. The type of parking is typically a mix. 20 Table C- 1. Survey response from select multi-family properties in Palo Alto. Property Number Units Category # Units # Parking Spots Parking Type (#) # residents driving EV EV chargers installed? (#) Additional notes 1 Over 100 107 N/A Street parking N/A No Respondent reports they have been told they can’t have EV chargers. Limited parking space. 2 Over 100 118 120 Underground, covered 10 Yes (2) They wanted chargers to be assigned to individual tenants and not at shared parking. 3 51-100 61 67 Covered (61), uncovered (6) 5 No Use EV charger from property across the street (first come first serve) 4 51-100 63 105 Underground (63), uncovered (42) 5 No EV charger installation pending 5 21-50 36 40 Covered About 1/3 No Looked into program couple years ago, not affordable 6 21-50 45 47 Underground, covered, uncovered N/A Yes (2) 7 21-50 33 33 Covered, uncovered, street parking A couple No A couple residents have asked about EV chargers; company policy is that resident pay for installation, electricity billed to resident; aware of rebate but show no interest 8 21-50 26 29 Underground, street parking N/A 9 11-20 17 17 Covered N/A 10 11-20 19 20 Covered, uncovered (5) A couple No Company policy is that residents pay for installation, electricity billed to resident 21 Using the conclusions from the survey, and information on the number of existing multi-family properties and total number of units from Santa Clara County data, a breakdown of the charging ports needed for 80% penetration was determined, shown in Table C-2. Table C- 2. Breakdown of the high-end estimate of the charging ports needs in multi-family properties for 80% penetration. Property Category Total # of Units Total # of Properties Estimate # Units/ Property Estimate # Cars/ Unit Estimate # Parking Spots33 Estimate # Street Parking Total # Cars in MF EV Chargers Chargers per site Apartment Duplex 483 243 2.0 1.5 483 242 725 290 1.2 3 - 4 926 260 3.6 1.5 926 463 1,389 556 2.1 5 - 10 1,253 185 6.8 1.4 1,253 501 1,754 702 3.8 11 - 20 693 45 15.4 1.4 693 277 970 388 8.6 21 - 50 1,082 36 30.1 1.3 1,082 325 1,407 563 15.6 51 - 100 1,104 21 52.6 1.3 1,104 331 1,435 574 27.3 Over 100 2,217 15 147.8 1.3 2,217 665 2,882 1,153 76.9 Other 375 15 25.0 1.3 375 113 488 195 13.0 Townhomes 336 - 1.5 336 168 504 202 Condos 2,522 - 1.3 2,522 757 3,279 1,311 Other 141 - 1.3 141 42 183 73 Total 11,132 820 11,132 3,883 15,015 6,006 33 Assuming a 1 to 1 ratio between number of units and available parking space. 22 Appendix D: Cost Estimation Approach Charging Port to Site Conversion Table D-1 is the conversion table from the number of ports to the number of sites. The sites vary in size, small, medium and large, and these site sizes differ in the number of ports and power level. Additionally, the share of site size varies with different site type. Table D- 1. Number of port to site size conversion from CalETC (highlighted in blue are modified numbers 34). 34 Level 2, residential share of site type was changed from 75% small and 20% medium to 95% small and 0% medium. This change due to the fact that CalETC classifies a medium site size with two Level 2 chargers in the “Low” column. Because it is unlikely for SFR to own more than one Level 2 charger, the percent share was reduced from 20% to 0%. The “Low” column of the large site size initially contained one 7.2 kW port. This was removed for the same reason that it is unlikely for SFR to own more than one Level 2 charger, in this case, given that the SFR already owns a 19 kW Level 2 charger. Level 2, multi-family percent share of site type and number of ports were altered to reflect Palo Alto specific need, determined from the survey and housing data. 23 Utility-Side Cost Estimate The power level at each site is used to determine the probability of upgrades on the utility-side, as seen in Table D-2. The higher the power level, the more likely the site triggers a primary medium voltage and secondary low voltage distribution system upgrade. Table D- 2. Probability of utility-side upgrades by infrastructure segment and power level. Power Level Primary Distribution Secondary Distribution <7.2 kW 0% 0% 7.2 kW - 15 kW 0% 2-8% 15 kW - 50 kW 0% 70% 50 kW - 100 kW 0% 96% 100 kW - 5 MW 5-90% 100% >5 MW 100% 100% Table D-3 shows the low and high estimate of the cost if a primary or secondary distribution upgrade is triggered. Table D- 3. Utility-side cost estimate by infrastructure segment. Infrastructure Segment Upgrade Cost Palo Alto Estimate Low Palo Alto Estimate High Primary distribution $ 1,000,000 $ 2,000,000 Secondary distribution $ 30,000 $ 50,000 The primary distribution upgrade costs are recouped from all customers through rates. Certain portions of the secondary distribution upgrade costs could be directly charged to the customer triggering the upgrade. 24 Customer-Side Cost Estimate Similarly on the customer-side, each site type has a probability of requiring a “make-ready” and port summarized here in Table D-4. Table D- 4. Probability of site requiring “make-ready” and port. Site Type Make-Ready Ports SFR residential L1 12.5% 50% SFR residential L2 75% 100% Multi-family L2 100% 100% Non-residential L2 100% 100% DCFC 100% 100% The cost of “make-ready,” per site and port is shown below in Table D-5. The cost of make-ready includes the cost of electrical work and permitting. The per port cost is the cost of hardware. Table D- 5. Customer-side infrastructure cost ranges by site type and infrastructure segment. Site Type Make-ready, per site Per port Low High Low High SFR residential L1 $ 0 $ 500 $ 0 $ 500 SFR residential L2 $ 0 $ 5,000 $ 500 $ 2,500 Multi-family L2 $ 50,000 $ 250,000 $ 500 $ 5,000 Non-residential L2 $ 50,000 $ 250,000 $ 500 $ 5,000 DCFC $ 50,000 $ 320,000 $ 20,000 $ 100,000 November 4, 2020 www.cityofpaloalto.org EV Charger Needs Assessment to Reach 80% EV Penetration by 2030 Mo Sodwatana Attachment B 2 Overview Project Objective Framework for Analysis Results Charger Needs Cost Estimate Key Takeaways 3 Project Objective The Sustainability and Climate Action Plan (S/CAP) Goal to reach 80% penetration of EVs registered in and commuting to Palo Alto by 2030 Expanding access to charging infrastructure is a necessary complement to EV adoption Project objective 1.How many chargers will Palo Alto need to support 80% penetration? And what type of chargers are needed? 2.What is the cost estimate of installations, equipment, upgrades? Figure 1. Seven proposed priorities for S/CAP. 4 Types of EV Chargers Figure 2. EV charging stations. [1] 5 Framework for Analysis Understand current EV trends, charging pattern and existing infrastructure Forecast EVs in Palo Alto by 2030 Estimate the number and type of charging ports needed In-depth analysis for multi-family properties Cost estimate on the utility and customer side 6 Palo Alto Community Statistics Residential Population 65,000 residents 25,000 households 15,000 single family residence (SFR) 10,000 multi-family residence 52,000 vehicles registered in Palo Alto Of which 9% or 4,500 are EVs Non-residential (commuting to Palo Alto) Palo Alto supports ~70,000 jobs Estimate 50,000 vehicles drive in daily Of which, ~6-10% are EVs Non-EVs 91.3%Commercial EVs 0.8% SFR EVs 6.7% Multi-family EVs 1.2% EVs 8.7% Figure 3. Distribution of vehicles registered in Palo Alto in 2019. 7 Single family residence L1 internal estimate SFR have 3,500 EVs Multi-family L2 internal estimate Multi-family have 600 EVs Permits for L2 Chargers = 800 chargers* Existing Charging Infrastructure Estimate Charger Type Charging Ports SFR residential L1 3,100 SFR residential L2 300 –350 Multi-family L2 50 –100 Non-residential L2 800 DCFC 30 Total 4,280 –4,380 Table 1: Estimate of charging ports in Palo Alto in 2019. *Unique address = SFR residential L2/Multi-family L2 (1 ports per charger) Repeated address = Non-residential L2 (2 ports per charger) 8 Residential EV Charging Ports Estimate Residential Average in Palo Alto 2.1 cars per household 2.5 cars per single family residence 1.5 cars per multi-family residence Estimated the need for more L2 chargers than L1 chargers in SFR by 2030 L1 chargers not applicable to longer ran g e EVs On average 1.7 EVs per household EV As of 2019 2030 EVs in single family residence 3,500 30,000 EVs in multi-family residence 600 12,000 Total 4,100 42,000 Charger Type Charging Ports As of 2019 2030 SFR residential L1 3,100 5,000 –8,000 SFR residential L2 300 –350 10,000 –12,000 Multi-family L2 50 –100 3,000 –6,000 Total 3,450 –3,550 18,000 –26,000 Table 2: Current and projected residential EVs and charging ports. 9 Non-Residential EV Charging Ports Estimate Non-residential (commuting to Palo Alto) Base estimate following CalETC whitepaper, Infrastructure needs assessment for 5M light-duty vehicles in California by 2030 2 and NREL, CEC EV Infrastructure Projection Tool 3 Currently, 4,500 vehicles registered in Palo Alto are commercial and governmental ~ 9% are EVs are commercial Estimate 60% penetration by 2030 = 2,700 are EVs EV As of 2019 2030 Commuters to Palo Alto 4,400 52,000 Commercial & Government 400 2,700 Total 4,800 54,700 Charger Type Charging Ports As of 2019 2030 Non-residential L2 800 6,000 –12,000 DCFC 30 200 –300 Total 830 6,200 –12,300 Table 3. Current and projected commuting EVs and charging ports. 10 Utility-Side Overview of Cost Estimate Approach Customer-Side Substation Primary distribution Secondary distribution Make-ready Charging port Expected cost of each infrastructure segment assessed by: 1.Number of charging ports per site 2.Power level at each site 3.Probability of an upgrade 4.Low and high cost of upgrade scenario to represent variability in site condition Figure 4. Electrical infrastructure segments for EV chargers. [2]*Make-ready includes electrical work and permits ** Charging port is the cost of hardware 11 Summary of Per Port Costs by Charger Type Charger Type Number of port Number of site Port per site Cost per port SFR residential L1 5,000 –8,000 4,200 –6,700 1.2 $0 –$300 SFR residential L2 10,000 –12,000 10,000 –12,000 1.0 $3,000 –$10,000 Multi-family L2 3,000 –6,000 450 –890 6.7 $12,400 –$49,900 Non-residential L2 6,000 –12,000 240 –480 25.0 $5,400 –$20,500 DCFC 200 –300 45 –65 4.5 $62,000 –$230,000 Total 24,200 –38,300 14,935 –20,135 Table 4. Summary of per port cost by charger types. 12 Key Takeaways If the 80% EV penetration goal is met: The number of EVs is likely to increase tenfold and charging needs are estimated to increase 6-to 8-fo ld –with the assumption that utilization rate per port will be higher than current levels. At these penetration levels, energy consumption is estimated increase from 1.5% of total load to 15% of total load. On the residential side, it is estimated to increase from 6% to 69% of total residential electrical load. In this scenario, the number of EVs per household would increase from 0.18 to 1.7 EVs per household. The cost per port is highly variable and is dependent on the need for electrical service panel upgrade, the potential need for trenching, and number of ports installed per site. Due to economies of scale, greater ports per site is more cost effective. For non-residential L2 ports, the installation cost per port at commercial campuses is projected to be lower than at multi-family properties. 13 Key Takeaways Mo Sodwatana Stanford Fellow Jarupa.Sodwatana@CityOfPaloAlto.org (678) 860-5746 City of Palo Alto (ID # 11692) Utilities Advisory Commission Staff Report Report Type: New Business Meeting Date: 11/4/2020 City of Palo Alto Page 1 Summary Title: Presentation AMI Fiber Update Title: Informational Update on the Advanced Metering Infrastructure (AMI) and Fiber Network Expansion Projects From: City Manager Lead Department: Utilities Attached for UAC information is a PowerPoint presentation summarizing the recent highlights and tentative timeline of the advanced metering infrastructure (AMI) and fiber network expansion projects. Attachments: •Attachment A: Presentation Staff: Dave YuanQ CITY OF PALO ALTO 1 Discussion and Update of AMI and Fiber Network Expansion Projects Utilities Advisory Commission November 4, 2020 Attachment A F.. ~,1, I~ ~,/4.1 /If, ~ I ,. P'/1, , ~ ~ ,,w ~ ., ~ '• f ·~ 'fl1 " :-.• / ► #~ s -;'!/IT~~ ~ r~ ·,'' ~~ 9~ .. .4 ~~~ ~•s ~~) ' ,. . -=:::: ~ ,, .:::::,.1 1,. ~ ":;3::::::~1, ·~9!f."' ~I ::: \, ' I . ~\UI -~ # '~ .. ~ J .... '-~ ~ "' .... ~ • CITY OF PALO ALTO 2 Component 1: AMI Network, electric meters, gas/water meter radios Component 2: Water Meters: Up to 8,600 replacements > 20 years old Component 3: Gas Meters: Up to 11,900 replacements > 30 years old Component 4: Installation Services (Electric, Gas and Water) Component 5: MDM software and interfaces to CIS, GIS, MyCPAU AMI RFP Outline F.. ~,1, I~ ~,/4.1 /If, ~ ~ ~ ·~ ~ ,,m ~ ' ~ '• ,,.~ ~ ls' _,, l ~~ ~ r~ , ~~ 9~ .. .4 ~~~ ~•s ~~ ' ,. ' -=:::: ~ ,, .:::::,.1 1,. ~ "::3=:::::~1, ~~_; ~I ::: '~ ~ I . ~'\UI -~ # ,~\ ... ~ -:.,;(If J .... '-~ ~ "' .... ~ • CITY OF PALO ALTO 3 Evaluated 13 proposals 5 Turnkey (AMI network, MDMS, Installation services) 2 AMI only 4 MDMS only 2 Installation services only Interviewed 9 vendors 3 Turnkey 1 AMI 3 MDMS 2 Installation services Scheduled 3 AMI demonstrations Conducted 4 customer reference Q&A sessions AMI RFP Evaluation F.. ~,1, I~ ~,/4.1 /If, ~ ~ ~ ·~ ~ ,,m ~ ' ~ '• ,,.~ ~ ls' _,, l ~~ ~ r~ , ~~ 9~ .. .4 ~~~ ~•s ~~ ' ,. ' -=:::: ~ ,, .:::::,.1 1,. ~ "::3=:::::~1, ~~_; ~I ::: '~ ~ I . ~'\UI -~ # ,~\ ... ~ -:.,;(If J .... '-~ ~ "' .... ~ • CITY OF PALO ALTO 4 Proposal Deadline: June 2020 Vendor Evaluations: July -Oct 2020 Contract Negotiations: Nov 2020 –Feb 2021 UAC Update –Mar/Apr 2021 Council Approval: Q2 2021 o 2-4 contracts; staffing for implementation Initial Installation and Software Interface Testing: 2021 - 2022 Full Deployment: 2022 – 2024 AMI Tentative Timeline F.. ~,1, I~ ~,/4.1 /If, ~ ~ ~ ·~ ~ ,,m ~ ' ~ '• ,,.~ ~ ls' _,, l ~~ ~ r~ , ~~ 9~ .. .4 ~~~ ~•s ~~ ' ,. ' -=:::: ~ ,, .:::::,.1 1,. ~ "::3=:::::~1, ~~_; ~I ::: '~ ~ I . ~'\UI -~ # ,~\ ... ~ -:.,;(If J .... '-~ ~ "' .... ~ • CITY OF PALO ALTO 5 Fiber Network Expansion Scope of Work Phase 1: Planning and High-Level Design for AMI, SCADA and internal Wireless Network Phase 1A: Fiber-to-the-Premise (FTTP) Business Case; Market and Needs Assessment; Financial Planning; Partnership Opportunities; High Level FTTP Design Phase 2: Detailed Aerial and Underground Design for AMI, SCADA and internal Wireless Network; Construction Standards and Bid Package Phase 3: Detailed Aerial and Underground Design for FTTP; Construction Standards and Bid Package F.. ~,1, I~ ,.1 '' .. /If, ~ I,. II ' 4 ~~ ✓, /1/ •• ' ~ '• f ·~ 11" 1 ~~. ► #~ s -;'!/IT~~ ~ r~ ·,' ~~ .,J ~✓..s ♦ ~· ~ s ~~) I ,. -::::: ~ , .:::::,.11,. ~ ".::3=:::::~'' ~9!f."' ~,:::: \, ' I . ,.\ --◄ -~;ff ~~, ~ ~ I •• ' ::,4 ~ "' .... ~ • CITY OF PALO ALTO 6 Fiber Expansion Tentative Timeline.. ..,.;''. ~' / ~ I., /I ~ ,4 ~ ~ I ;// • '~ ,,.~ ~ , •✓ ·-4111""':;;; / ~~ ►~ ~ s~ Ii: ~~ ~ r~ ·,' ~~ 9~ .. .4 ~~~ ~•s ~~) \, ' I ~ . , -~ , ~ '''• ~ ".::3=:::::~'' ~9!f."' ~,:::: I . ~1u1 •• J ,~\~ ~ -~;ff .. ~ J rlr!,11/ .. ~ I -. ~ "' .... ~ • CITY OF PALO ALTO · 2nm Q,:z.m:11 0121121 Q],20<:i! 1 (;14 , 202, Q1 2022 Q2. 2022 iQ.321122. So!!p. Olli il'I! .LYt Mar i'.pr "7J Ju · Stp Oct l'b' D« J,m lffil Mar ,lip!" ~ I Mo.I: t!04--tn 1l~M~ ft . -,rr::isk 1 H Fl1fl -ooin.ss. Dn ll1151ilt:s.s Ca2 011 -,(T:isi-l Hi] Pramni:itll:in m . IL, OF)' GaLn"ICII . mal 8u51nm.s: C.n11~ n.ll'lCJM; ORIGINAL• D:i\ !I . +1 City of Palo Alto (ID # 11693) Utilities Advisory Commission Staff Report Report Type: New Business Meeting Date: 11/4/2020 City of Palo Alto Page 1 Summary Title: Presentation on Bucket 1 REC Sales Title: Informational Update on REC Exchanges Completed in Accordance With the City's Amended Electric Supply Portfolio Carbon Neutral Plan From: City Manager Lead Department: Utilities Executive Summary On August 24, 2020 the Council approved amendments to the electric utility’s Carbon Neutral Plan that clarified and modified policies regarding the sales and exchanges of renewable energy credits (RECs).1 The amendments permitted the exchange of Bucket 1 (primarily in-state) RECs for Bucket 3 (primarily out of state) RECs, provided the City maintains compliance with State Renewable Portfolio Standard (RPS) regulations. A portion of the earnings from the program would be used to mitigate the economic impacts of the coronavirus pandemic, and the remainder would be reserved for local decarbonization programs. The amendments also adopted an hourly accounting methodology for managing the City’s electric portfolio and permitted the use of Bucket 3 RECs for managing any emissions impacts identified by the use of the hourly accounting methodology. Since then, staff has been purchasing and selling RECs in accordance with the Carbon Neutral Plan amendments. The attached presentation summarizes the earnings for 2020 from the program and its impacts on the City’s Power Content Label. This is an informationalitem and no Utilities Advisory Commission action is requested. Attachments: •Attachment A: Presentation 1 Staff Report ID#11556, https://www.cityofpaloalto.org/civicax/filebank/documents/78046 Staff: Jonathan Abendschein November 4, 2020 www.cityofpaloalto.org REC EXCHANGE UPDATE: CY 2020 Attachment A • CITY OF PALO ALTO 2 REC SALES SUMMARY FOR CY 2020 Baseline (No Sales) REC Exchange Program Total REC Sales Volume (MWh)--324,400 Total REC Sales Revenue ($M)--$3.70 Bucket 3 REC Purchase Cost ($M)--$0.73 Net Revenue ($M)--$2.97 RPS Level 67%26% A c1Tv OF ~PALO ALTO 3 ELECTRIC SUPPLY PORTFOLIO IMPACT (CY 2020) • . CI TY OF PALO ALTO .s::. 3: :E > Q. C. :J V) u 'i: .... u (IJ w 1,000,000 900,000 800,000 Solar 700,000 600,000 Wind 500,000 400,000 300,000 200,000 100,000 CY 2020 CY 2020 w/ REC Exchanges 4 POWER CONTENT LABEL IMPACT (CY 2020) Current Portfolio REC Exchanges RPS Level: 67% Emissions Intensity: 7 kg CO2/MWh RPS Level: 26% Emissions Intensity: 115 kg CO2/MWh • . CI TY OF PALO ALTO 37% 3 8" 46" ■ Large Hydro ■ Landfill Gas ■ Wind ■ Solar ~ Unspecified Power 5 POWER CONTENT LABEL IMPACT (CY 2020) Baseline Projections After REC Sales Eligible Renewable 67%26% Biomass 13%9% Geothermal 0%0% Small Hydro 1%1% Solar 40%10% Wind 13%5% Coal 0%0% Large Hydro 33%48% Natural Gas 0%0% Nuclear 0%0% Unspecified Sources 0%26% Emissions Intensity (kg CO2/MWh)7.0 115.3 • . CI TY OF PALO ALTO Jim Stack, Ph.D. Senior Resource Planner james.stack@cityofpaloalto.org (650) 329-2314 CITY OF PALO ALTO