HomeMy WebLinkAbout2021-04-07 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 ON THE UTILITIES ADVISORY COMMISSION WEBPAGE.
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 March 3, 2021
V.UNFINISHED BUSINESS - None
VI.UTILITIES DIRECTOR REPORT
VII.NEW BUSINESS
1.Discussion of City of Palo Alto Permitting Processes for Various Energy Technologies Discussion
2.Discussion and Update on the FY20 Demand Side Management Report Discussion
3.Staff Recommendation to Revise the Meeting Start Time for the Utilities Advisory Commission Action
Temporary Schedule
VIII.COMMISSIONER COMMENTS and REPORTS from MEETINGS/EVENTS
IX.NEXT MEETING: Special – April 21, 2021
FUTURE TOPICS FOR UPCOMING MEETINGS: May 05, 2021
UTILITIES ADVISORY COMMISSION – SPECIAL MEETING
WEDNESDAY, April 7, 2021 – 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: Eric Filseth
Presentation
MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE COMMISSION AFTER DISTRIBUTION OF THE AGENDA PACKET ARE
AVAILABLE FOR PUBLIC INSPECTION ON THE UTILITIES ADVISORY COMMISSION WEBPAGE.
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.
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 on the Status and Next Steps for Overhead Line Project (Project EL-21001) for the Palo
Alto Foothills Rebuild
MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE COMMISSION AFTER DISTRIBUTION OF THE AGENDA PACKET ARE
AVAILABLE FOR PUBLIC INSPECTION ON THE UTILITIES ADVISORY COMMISSION WEBPAGE.
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.
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turn to speak.
C. When you wish to speak on an agenda item, click on “raise hand.” The Attendant will
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Meeting ID: 966-9129-7246
Utilities Advisory Commission Minutes Approved on: Page 1 of 8
UTILITIES ADVISORY COMMISSION MEETING
MINUTES OF MARCH 3, 2021 - SPECIAL MEETING
CALL TO ORDER
Chair Forssell called the meeting of the Utilities Advisory Commission (UAC) to order at 4:00 p.m.
Present: Chair Forssell, Vice Chair Segal, Commissioners Danaher, Jackson, Johnston, and Smith
Absent: Commissioner Scharff
AGENDA REVIEW AND REVISIONS
None.
ORAL COMMUNICATIONS
None.
APPROVAL OF THE MINUTES
Vice Chari Segal mentioned that on Page 6, the first paragraph of Item 2 in the 3rd sentence, the year 2023
should be changed to year 2030. Also, on Page 3, the last paragraph in the 10th sentence, the word differ
should be deferred.
Commissioner Johnston moved to approve the minutes of the February 3, 2021 meeting as corrected.
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. Commissioner Scharff absent.
UNFINISHED BUSINESS
None.
UTILITIES DIRECTOR REPORT
Dean Batchelor, Utilities Director, delivered the Director's Report.
The Switch is On
The City of Palo Alto Utilities is a member of the Building Decarbonization Coalition and helping fund a new
Bay Area wide campaign about home electrification. The Switch Is On campaign offers extensive
information and resources to help residents who want to convert appliances and home energy use from
natural gas to electricity. Palo Alto residents can take advantage of rebates from CPAU for upgrading
appliances, such as heat pump water heaters. Visit cityofpaloalto.org/electrification for an overview about
electrification and switchison.org to check out the resources available to residents in all communities.
Transformer Upgrade Rebate Program for Multifamily and Non-Profit Properties
Installing electric vehicle (EV) charging infrastructure may require upgrading electric service capacity.
Therefore CPAU is offering a Transformer Upgrade Rebate to help cover the cost of Utility Service Capacity
DRAFT
Utilities Advisory Commission Minutes Approved on: Page 2 of 8
Fees for eligible customers. This program is available to owners or property managers of schools, non-profit
organizations, public entities, and multifamily properties. If a customer applies for an
EV charger permit and receives notice that the EV charger installation will trigger electric service capacity
fees over and above the electric connection fees, they may apply for rebates of up to $100,000. Rebates are
subject to availability. For more details, email utilityprograms@cityofpaloalto.org or call 650-329-2241.
Valley Water Conservation Program Updates
Palo Alto partners with Valley Water for water reuse and conservation. Since Santa Clara County has lifted
the Regional Stay at Home Order, Valley Water is modifying some of its water conservation programs.
Conservation programs that have a field component, such as landscape surveys, will resume with COVID-19
field safety protocols in place. Palo Alto residents and businesses can take advantage of these programs
available countywide. As a reminder, in Palo Alto, rebates for activities such as replacing high-water using
landscape – lawns and pools – are doubled since CPAU cost-shares with Valley Water. For the latest
information about each of Valley Water’s conservation programs, visit their website at watersavings.org
Events
CPAU is hosting a workshop on March 23 titled Landscape Design 101: How to Get Started. This event is a
partnership with the Bay Area Water Supply and Conservation Agency (BAWSCA) and Valley Water. Join us
at 7 pm on March 23 to learn how you can create a beautiful, sustainable, low water use garden and take
advantage of rebates for upgrading your landscape and irrigation system. Details and registration link are
posted at cityofpaloalto.org/workshops On February 9, Utilities staff joined a local journalist and
sustainability advocate for an educational workshop about converting Eichler homes to all-electric utility
consumption. CPAU’s Home Efficiency Genie participated to show how the Genie can assess homes for
electrification readiness. Approximately 40 people attended to learn how to improve efficiency and
electrify these popular historic homes which can be quite inefficient.
Website Update
The beta launch of the City’s new website was completed last week. The launch was communicated
through multiple City channels. Our social media posts received 34,647 impressions and our Coronavirus
Report received 46,430 opens during that time period. Ultimately, beta.cityofpaloalto.org received 8,214
pageviews. City staff received 90 responses to the online survey. Overall, most of the feedback was positive
and the design is what impressed most survey respondents. As for next steps, department- specific
feedback will be provided to each department and actionable items will be addressed. The website launch
is planned for end of March. Several actionable items in response to the survey feedback are being
prioritized. Specific areas of note are: improving search functionality through a new OC feature and through
content adjustments; finessing the website design to reduce white space in some areas; addressing
confusing navigation areas by department; enhancing/aligning all sustainability specific pages to one
landing page to improve user experience and search; and, further developing City project pages.
CPAU - Vaccine
In answer to Commissioner Johnston’s inquiry regarding water supply and cutbacks, Batchelor reported
that staff did not anticipate there being any cutbacks in the summer months.
NEW BUSINESS
ITEM 1: ACTION: Staff Recommendation That the Utilities Advisory Commission Recommend the City
Council Approve 10 Year Energy Efficiency Goals for 2022-2031
Dean Batchelor, Utilities Director, introduced Micah Babbitt who presented the item to the UAC.
Micah Babbitt, Resource Planner, disclosed that historically the Gas Efficiency Goals normally accompanied
the Electric Efficient Goals but staff felt that the Sustainability and Climate Action Plan (S/CAP) was the best
avenue to finalize those goals. The City is required to update the 10-year Energy Efficiency Goals every 4-
Utilities Advisory Commission Minutes Approved on: Page 3 of 8
years per state law, energy efficiency programs are funded by the state-mandated Public Benefit Surcharge,
the programs are required to be cost-effective, and the goals need to be adopted by March 15, 2021. They
are then submitted to the California Energy Commission (CEC). Historically, the City has met or exceeded its
prior goals for energy reduction. The model used to draft potential goals is developed by a consultant. The
model assesses technical, economic, and market potential. It accounted for the past energy efficiency
achievements, projected electric supply cost, retail rates, and energy efficient costs to calculate energy
efficiency cost-effectiveness. An economic recovery period has been built into the model to address COVID-
19 impacts. Non-residential customers amounted to 80 percent of electric use and that group is the largest
driver in terms of potential energy savings. Another area that was expected to achieve energy savings was
the Home Energy Report that will be sent out to residential customers as well as in the year 2026, staff
expects energy savings from the Conservation Voltage Reduction Program. Starting in the year 2022, the
goal was to reduce energy by .50 percent, for year 2024 a goal was set at .55 percent, and then for year
2026 the goal was .75 percent. Regarding cumulative saving potentials, the largest driver was long-lived
non-residential energy efficiency measures. Average customer bills are expected to decrease over the life of
the energy efficiency measures. Retail rates are estimated to increase by up to 3.5 percent by year 2031 but
increased load growth through electrical vehicle (EV) charging could mitigate those retail rate impacts.
In reply to Commissioner Johnston’s request for elaboration on conservation voltage reduction, Babbitt
explained that the main idea is to reduce the voltage at various feeders across the distribution system.
In answer to Commissioner Smith’s inquiries regarding cumulative saving potential, Babbitt disclosed that
the percentage was not sensitivity but a hard calculation based on what energy efficiency measures the City
installed in prior years and how long they lasted. In terms of incremental steps taken for years 2023, 2024,
and 2025, new energy efficiency measures were coming online every year which added to the cumulative
total. Commissioner Smith expressed concern regarding the underlying assumption that life will return to a
pre-COVID commercial office environments and he did not believe that will be the case.
In response to Commissioner Danaher’s prediction that replacing gas appliances with the electric appliance
is not included in energy efficiency, Babbitt reported that the goals focused on electrical devices being
replaced with more efficient electrical devices. Commissioner Danaher disclosed that looking at electric
efficiency and gas efficiency individually did not allow the City to choose the best approach on a cost basis.
He wanted to see a model that explored all carbon savings together on a cost basis and then present that to
the UAC and City Council. Jonathan Abendschein, Assistant Director of Utilities, shared that efficiency
measures by nature save money and they are almost universally the lowest cost measures to implement
before electrification.
In reply to Vice Chair Segal’s inquiry about what the Residential Home Energy Reports is, Abendschein
stated that the concept is to provide residents information regarding their consumption and tips on how to
reduce consumption. The program mimicked the OPower reports but included more customer groups. In
answer to Vice Chair Segal’s question if the program will be expanded to commercial customers,
Abendschein announced that staff is exploring options for commercial customers.
Commissioner Jackson agreed with Commissioner Danaher’s comment that as folks electrify, electric usage
will increase and that it is important to understand what is the best way to spend money to achieve the
most successful outcome. He supported the Home Energy Report Program and foresaw it to be a very
informative program.
In answer to Chair Forssell’s inquiries if the state specified an amount that needs to be spent from Public
Surcharges and if the parameters of the plan are at the City’s discretion, Babbitt disclosed the state does
not mandate a specific amount of spending. He concurred that the parameters of the plan is up to the City
to implement. In reply to Chair Forssell’s assumption that the cost of the saved energy is greater than the
cost of the program for cost-effectiveness, Babbitt shared that staff looks at cost-effectiveness in how much
does it cost the City to save the energy versus how much does it cost to go buy energy. In the electric
Utilities Advisory Commission Minutes Approved on: Page 4 of 8
portfolio, Staff makes sure that any energy efficiency that the City is creating is lower cost than buying new
supply. Chair Forssell believed that there was nothing in the goals that created a disincentive for customers
to electrify.
ACTION: Vice Chair Segal moved Staff Recommendation That the Utilities Advisory Commission
Recommend the City Council approve the proposed annual and cumulative Electric Efficiency Goals for the
period 2022 to 2031 as shown in the table below. Seconded by Commissioner Johnston. Motion carries 6-0
with Chair Forssell, Vice Chair Segal and Commissioner Danaher, Jackson, Johnston, and Smith voting yes.
Commissioner Scharff absent.
ITEM 2: ACTION: Staff Recommendation That the Utilities Advisory Commission Recommend the City
Council Adopt a Resolution Approving the Fiscal Year 2022 Gas Utility Financial Plan, Including Proposed
Transfers and an Amendment to the Gas Utility Reserve Management Practices, and Increasing Gas Rates
by Amending Rate Schedules G-1 (Residential Gas Service), G-2 (Residential Master-Metered and
Commercial Gas Service), G-3 (Large Commercial Gas Service), and G-10 (Compressed Natural Gas Service)
Eric Keniston, Senior Resource Planner, announced that staff recommends a 3 percent gas increase for
Fiscal Year (FY) 2022. A zero percent and a 2 percent proposal were available but both proposals resulted in
cost reductions. The proposals assumed a sales decline of 6 to 8 percent for FY 2022 but if sales decreased
by 10 percent, a $1 million expense reduction may be needed. The 3 percent increase assumed that there
would be no future rate increase above 5 percent for the next 3-years. About one-third of gas rates are
supply related with two-thirds related to distribution and the distribution rate is what Staff uses to
determine rate proposals. Staff assumed that supply-related charges will increase by 4 percent per year on
average with capital and distribution increases being at 2 to 3 percent per year. Gas supply cost drivers
included the volatility in gas market prices, Pacific Gas and Electric (PG&E) transmission rates increases,
increase cap and trade costs as well as the Carbon Neutral Gas Plan. Gas distribution cost drivers included
health, retirement, and overhead costs, an increase in underground construction costs, and the crossbore
project. Staff predicted that the Gas Utility will have a medium recovery for FY 2021-2022. With the 3
percent increase proposal, the Gas Operating Reserve is predicted to stay in the guideline ranges. The City
continued to be below PG&E when comparing residential rates, small commercial costumers continued to
be lower but larger commercial customers bills were 15 percent higher than PG&E. Staff was also
recommending an $8.4 million transfer from the Rate Stabilization Reserve to the Operations Reserve in FY
2022, a $4.454 million transfer from the Operations Reserve to the Cap and Trade Reserve in FY 2021 and
an amendment to the Gas Utility Reserves Management Practices.
In response to Commissioner Johnston’s assumptions that the cost reductions for the alternative rate
increases is to defer Capital Improvement Projects (CIP), Keniston confirmed that is correct. In reply to
Commissioner Johnston’s inquiry if the UAC should be considering a 4 to 4.5 percent increase in customer’s
bills based on the projections, Keniston explained that staff cannot accurately predict gas commodity prices
because they change daily. Commissioner Johnston understood that staff could not project supply cost but
he wanted to be realistic in that a customer will see an increase greater than 3 percent on their bill.
Jonathan Abendschein, Assistant Director of Utilities, agreed and disclosed that staff will explain that in
greater detail in future reports and presentations.
In answer to Chair Forssell’s inquiry regarding what will the Cap and Trade Reserve be spent on,
Abendschein shared that staff has ideas but the implementation plan for the S/CAP needed to take place
first. In response to Chair Forssell’s question of how many customers and what type of customers are on
the compressed natural gas rate schedule, and why the distribution rate is low, Keniston disclosed that
there is only one filling station in the City. Public Works operates the facility and those pumps are mainly
used by school buses and the City’s fleet. In terms of a lower distribution rate, there is very little to no
distribution infrastructure which keeps the rates low. In answer to Chair Forssell’s query of if the City is
setting itself up for future lawsuits by keeping the transfers to the General Fund in the budget, Abendschein
stated that the budget has been reviewed by the City Attorney’s Office and they felt comfortable with the
budget as it stood.
Utilities Advisory Commission Minutes Approved on: Page 5 of 8
Councilmember Filseth suspected that the litigation that the City was facing will be resolved and he foresaw
no issues of the transfer to the General Fund causing further litigation. In answer to Councilmember
Filseth’s assumption that what the City pays PG&E for distribution was actually in commodity cost, Keniston
confirmed that is correct.
Commissioner Danaher acknowledged that the City was very constrained last year in terms of increases and
he understood that the City has to budget for the community’s needs.
ACTION: Commissioner Danaher moved Staff Recommendation That the Utilities Advisory Commission
Recommend the City Council adopt a resolution (Attachment A):
a. Approving the fiscal year (FY) 2022 Gas Utility Financial Plan (Attachment B); and
b. Transferring up to $3.9 million from the Rate Stabilization Reserve (RSR) to the Operations Reserve at the
end of FY 2021; and
c. Transferring $4.542 million from the Rate Stabilization Reserve to the Cap-and-Trade Program Reserve at
the end of FY 2021; and
d. Amending the Gas Utility Reserve Management Practices relating to the Cap-and-Trade Program Reserve
(as set forth in the Financial Plan) (Attachment C); and
e. Increasing gas rates by amending Rate Schedules G-1 (Residential Gas Service), G-2 (Residential Master-
Metered and Commercial Gas Service), G-3 (Large Commercial Gas Service), and G-10 (Compressed Natural
Gas Service) (Attachment D).
Seconded by Commissioner Johnston. Motion carries 6-0 with Chair Forssell, Vice Chair Segal, and
Commissioner Danaher, Jackson, Johnston, and Smith voting yes. Commissioner Scharff absent
The UAC recessed at 5:17 p.m. and returned at 5:25 p.m.
ITEM 3: ACTION: Staff Recommendation That the Utilities Advisory Commission Recommend the City
Council Adopt a Resolution Approving the Fiscal Year 2022 Electric Financial Plan and Reserve Transfers,
and Amending Utility Rate Schedules E-EEC-1 (Export Electricity Compensation), E-NSE-1 (Net Surplus
Electricity Compensation), E-2-G (Residential Master-Metered and Small Non Residential Green Power
Electric Service), E-4-G (Medium Non Residential Green Power Electric Service), and E-7-G (Large Non-
Residential Electric Service)
Eric Keniston, Senior Resources Planner, announced that staff recommended a zero percent rate increase
to the Electric Utility for FY 2022. Staff did recommend increasing the Palo Alto Green Charges from 2/10th
of a penny to 6/10th of a penny, as well as increasing the paid upgrades for the Net Energy Metering
Program. The remaining Electrical Special Project Reserve loan repayment has been phased out to paying
$1 million per year instead of an upfront payment of $5 million. The Electric Utility cost is approximately 60
percent supply with 40 percent distribution costs. The supply cost has been increasing by 2 percent per
year, distribution costs are increasing by 3 percent per year and transmission costs are increasing by 10
percent per year. Supply cost drivers included transmission costs increasing dramatically and renewable
projects coming online, but overhead costs have decreased. The City’s residential electric bills continued to
be lower than PG&E by 37 percent. With the proposed 3 percent, subsequent years would see a 5 percent
increase. Operating Reserves were projected to drop to minimum levels in FY 2023 but would come back up
to the target level by FY 2026. The Distribution Reserve is projected to be near the minimum guild lines but
staff did not believe that to be a problem.
Vice Chair Segal commented that staffing is one of the barriers to completing a CIP project early and
pushing projects out to later years caused the cost to increase. In answer to her question if an analysis has
been done to see if it is cheaper for higher consultants to finish projects, Dave Yuan, Utilities Strategic
Business Manager, shared that engineering has been exploring hiring a consulting company. Dean
Batchelor, Director of Utilities, added that the department is recruiting another contractor to supplement
Utilities Advisory Commission Minutes Approved on: Page 6 of 8
the City’s current contractor. Vice Chair Segal wanted to see a separate line item regarding communication
about electrification to the Communication Plan.
In response to Chair Forssell’s inquiry regarding Palo Alto’s Green Rate schedule and if the rate covers the
hydro portion or if the utility purchases Renewable Energy Certificates (REC) for their entire energy usage,
and why not have RECs be a pass-through rate, Keniston shared that he would investigate the answer
regarding the Green Rate and bring it back to the Commission. In terms of a pass-through charge for RECs,
Keniston shared that there are not many customers on that particular rate schedule.
In reply to Councilmember Filseth’s query of why Santa Clara County is less expensive regarding customer
bills than the City, Keniston acknowledged that they have a different generation portfolio mix than the City.
Jonathan Abendschein, Assistant Utilities Director, added that Santa Clara County has a very small
residential load compared to their large industrial load. Councilmember Filseth noted that Santa Clara
County is close to reaching carbon neutral status.
ACTION: Commissioner Vice Chair Segal moved Staff Recommendation That the Utilities Advisory
Commission Recommend the City Council adopt a Resolution (Attachment A):
1. Approving the Fiscal Year (FY) 2022 Electric Financial Plan (Attachment B);
2. Approving a transfer of up to $5 million from the CIP Reserve to the Distribution Operations Reserve at
the end of FY 2021;
3. Approving a transfer of up to $1 million from the Supply Operations Reserve to the ESP reserve at the
end of FY 2021;
4. Approving an allocation of up to $1.189 million from the Cap and Trade Program Reserve at the end of FY
2021 to be spent on local decarbonization programs;
5. Updating the Export Electricity Compensation (E-EEC-1) rate to reflect current projections of avoided
cost, effective July 1, 2021;
6. Updating the Net Surplus Electricity Compensation (E-NSE-1) rate to reflect current projections of
avoided cost, effective July 1, 2021; and
7. Updating the Palo Alto Green program pass-through premium charge on the Residential Master-Metered
and Small Non-Residential Green Power Electric Service (E-2-G), the Medium Non-Residential Green Power
Electric Service (E-4-G), and the Large Non-Residential Green Power Electric Service (E-7-G) rate schedules
to reflect current costs, effective July 1, 2021.
Seconded by Commissioner Danaher. Motion carries 6-0 with Chair Forssell, Vice Chair Segal, and
Commissioners Danaher, Jackson, Johnston, and Smith voting yes. Commissioner Scharff absent.
ITEM 4: ACTION: Staff Recommendation That the Utilities Advisory Commission Recommend the City
Council Adopt a Resolution Approving the Fiscal Year 2022 Water Utility Financial Plan, With no Water Rate
Increase for Fiscal Year 2022
Lisa Bilir, Resource Planner, confirmed that staff recommends a zero rate increase for the Water Utility for
FY 2022 and 5 percent rate increases in each subsequent year from FY 2023 through FY 2026. The key driver
for rate increases in subsequent years is due to wholesale rate increases from the San Francisco Public
Utilities Commission. The FY 2020 year-end Operations Reserve was at the maximum guideline level with
additional funds considered unassigned. Last year, City Council approved a plan to make more active use of
the CIP Reserve and staff is recommending a transfer of up to $8 million into the CIP Reserve for funding
the CIP Budget as well as requesting to transfer up to $5 million to the CIP Reserve for one-time seismic
reservoir replacement costs. The Operations Reserve and CIP Reserves are projected to be within guideline
ranges for the duration of the 5 year forecast period.
In reply to Chair Forssell’s question of what rate schedule the City’s golf course is on, Jonathan
Abendschein, Assistant Director of Utilities, confirmed it is largely on the Irrigation Rate Schedule.
Utilities Advisory Commission Minutes Approved on: Page 7 of 8
In answer to Commissioner Johnston’s inquiry why the commodity rate for irrigation is higher, Bilir
disclosed that the amount of peak use across different time periods is used to calculate the rates as part of
the cost of service study.
Councilmember Filseth noticed that the operation cost is growing between 5 and 6 percent annually and
Consumer Price Index (CPI) is roughly 2 percent or less per year. If that continued, he announced that the
City has to budget for that as well as understand what the drivers are for that increase; this is quite a bit
higher than the City projects in the Long Range Financial Forecast. Abendschein understood that the
operation increase is averaged over several years. It included both inflation increases as well as a large one-
time increase related to leasing generators to place at pump stations. Bilir clarified that operation costs
were increasing by 3 percent but the wholesale cost was increasing by 5 to 6 percent. Councilmember
Filseth requested that staff check that information before it comes to the Finance Committee. In response
to Councilmember Filseth’s query that the City of Hayward is on San Francisco Public Utilities Commission
(SFPUC) water, Bilir confirmed that is correct. Councilmember Filseth pointed out that the City of Hayward
is lower than Palo Alto by 20 percent in terms of residential water rates. Bilir disclosed that the non-
residential usage has been increased by 10 percent for the City of Hayward and Palo Alto’s non-residential
usage has declined. Also, Palo Alto has a very prudent and consistent investment in CIP and the City of
Hayward does not have that type of investment.
In answer to Commissioner Danaher’s inquiry regarding the last drought and surcharges, Bilir confirmed
there were surcharges during the drought. Commissioner Danaher suggested that the City invest more in
emergency water reserves to protect the urban landscape. Dean Batchelor, Utilities Director, noted that
when the surcharge was implemented, Council had to approve that before it could be enacted. Also,
engineering has been exploring the possibility of building another reservoir located within the City.
Bilir corrected her statement and pointed out that the Palo Alto Golf Course primarily uses recycled water.
In answer to Chair Forssell’s question if there is a separate rate schedule for recycled water, Abendschein
confirmed it is free but announced that staff plans to form a utility and a rate schedule for recycled water in
the next couple of years.
In response to Councilmember Filseth’s inquiry if the lake at Foothills Park is connected to the City’s water
system, Bilir confirmed that the lake is filled with Hetch Hetchy water from the City. In reply to Chair
Forssell’s query if the lake functions as a reservoir, Batchelor answered that it is just for aesthetics and
wildlife.
Abendschein added that in terms of additional water supplies, he mentioned that SFPUC is also exploring
additional water supplies to be able to maintain the level of service goal to have no greater than 20%
cutbacks in a drought. The City is investigating ways to surpass that goal.
ACTION: Commissioner Smith moved Staff Recommendation That the Utilities Advisory Commission
Recommend the City Council Adopt a resolution (Attachment A) approving:
a. The Fiscal Year (FY) 2022 Water Utility Financial Plan (Attachment B); and
b. A transfer of up to $13.24 million from the Operations Reserve to the CIP Reserve in FY 2022.
Seconded by Commissioner Johnston. Motion carries 6-0 with Chair Forssell, Vice Chair Segal, and
Commissioner Danaher, Jackson, Johnston, and Smith voting yes. Commissioner Scharff absent.
COMMISSIONER COMMENTS and REPORTS from MEETINGS/EVENTS
Commissioner Danaher shared that there is more acceleration in vehicle-to-grid technologies. In terms of
distributed storage and resilience for the City, he predicted that electric vehicle (EV) penetration will
become a factor. He announced that there is a surge in investments in hydrogen technology to reduce the
Utilities Advisory Commission Minutes Approved on: Page 8 of 8
cost of hydrogen. Many of the technologies will be used for industrial applications but there is discussion on
how natural gas can be replaced with hydrogen in municipal systems. In answer to Dean Batchelor, Director
of Utilities, question of what the operating pressures is for hydrogen, Commissioner Danaher clarified that
the issue is being addressed and there may not be a need for high pressured pipes.
Commissioner Smith reported that in terms of the Renewable Energy Certificates (REC) Exchange Program,
he was surprised to see Bucket Three rates 28 percent higher than anticipated. He wanted to know if those
trends were forecasted to be continued in the future. Chair Forssell advised agendizing that discussion for
the next meeting.
FUTURE TOPICS FOR UPCOMING MEETINGS: April 07, 2021
Vice Chair Segal requested an update on sea-level rise as well as a discussion on recycled water.
In answer to Commissioner Jackson’s if the (DSC) permit process agenda item will be presented in April,
Dean Batchelor, Utilities Director, confirmed it will be in April.
Commissioner Danaher suggested that the UAC receive an update on electric vehicle (EV) chargers in the
last month of each quarter.
Commissioner Smith suggested that the UAC start their meetings at 7:00 pm to allow the public to attend
the meetings. Commissioner Danaher agreed with that suggestion. Vice Chair Segal shared that her
schedule is flexible and can accommodate a 4:00 pm start time. Commissioner Jackson stated that the
earlier time is better for him. Commissioner Johnston disclosed that he can do either time. Chair Forssell
stated that she is flexible as well but suggested that the item be agendized for further discussion.
Chair Forssell wanted an update from Magellan. Batchelor announced that in April 2021 there will be a fiber
update from Magellan. In that discussion, staff will seek action from the UAC on moving forward with Phase
Two and Phase Four of the plan. Chair Forssell commented that another topic was cybersecurity and what
processes the City has in place to protect against intruders. She suggested that come to the UAC as a
discussion item. Commissioner Jackson and Commissioner Smith agreed. Councilmember Filseth noted that
the City Auditor consulting firm the City contracted with will be investigating cybersecurity for Information
Technology (IT). He advised the UAC to receive a presentation from the City Auditors.
NEXT SCHEDULED MEETING: April 07, 2021
Commissioner Danaher moved to adjourn. 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. Commissioner Scharff absent. Meeting adjourned at 6:27 p.m.
Respectfully Submitted
Tabatha Boatwright
City of Palo Alto Utilities
City of Palo Alto (ID # 12032)
Utilities Advisory Commission Staff Report
Report Type: New Business Meeting Date: 4/7/2021
City of Palo Alto Page 1
Summary Title: Permit Processes for Various Energy Technologies
Title: Discussion of City of Palo Alto Permitting Processes for Various Energy
Technologies
From: City Manager
Lead Department: Utilities
Recommendation
This item is for Utilities Advisory Commission (UAC) information and discussion. No action is
requested.
Executive Summary
The City periodically receives feedback about issues wit h permitting processes. Feedback and
customer-reported challenges include issues such as delays in project approval, and procedures
or requirements that differ from neighboring jurisdictions. To address these issues and
improve the City’s processes, staff contracted with the consulting firm TRC Engineers (TRC) in
the fall of 2020 to assess the current permitting and inspection processes specifically for
residential electrification projects as well as for EV charging equipment at residential and
nonresidential sites. The TRC study also provided recommendations to streamline the
permitting process for these projects.
This report outlines the findings of the TRC study and recommendations for improvement
(Attachment A), and staff’s preliminary response and work plan (Attachment B).
Background
City of Palo Alto is committed to facilitating the adoption of technologies by residents and
businesses that align with the City’s sustainability and climate goals. Examples of such
technologies include photovoltaic (PV) rooftop solar systems, electric vehicle (EV) charging
equipment, energy storage systems, and efficient electric heat pump alternatives to replace gas
appliances for water and space heating. Building owners who are planning to install these types
of equipment need to obtain the requisite building permit to ensure the safe and reliable
operation of the equipment as well as compliance with relevant building codes. A customer-
friendly permitting and inspection experience is important in facilitating the adoption of these
energy technologies.
Staff: Jonathan Abendschein
City of Palo Alto Page 2
The permitting process begins and ends with the Development Services branch of the Planning
and Development Services Department. This branch coordinates with other departments that
may need to be part of the permit review process. These other departments and divisions
include the Utilities Department, Planning, Fire Department, and the Public Works Urban
Forestry Division. The type of project, plus other factors such as the size of the proposed
system, dictate the permit review process. If an error is found during the permit review process,
the customer will be asked to make the correction and resubmit the permit application prior to
resuming the review process.
The TRC study was conducted concurrently with a similar effort led by Silicon Valley Clean
Energy (SVCE) for its 13 member cities in Santa Clara County. The Palo Alto TRC study was
completed in February 2021, while the SVCE study, which is focused primarily on building
electrification permitting, is expected to be completed in March of 2021.
Discussion
Overview of Permitting Process
New construction, building alterations, and replacement of mechanical equipment or
permanently installed appliances in Palo Alto require a building permit and inspection to ensure
that the work is done safely and meets all relevant codes, ordinances, and standards. Licensed
contractors can apply online for “instant permits” for minor projects such as furnace and boiler
replacements, gas tank water heater replacements, re-roofing, and residential window retrofit.
All other types of projects require a permit application submitted to the Development Center.
Prior to the pandemic, these applications had to be submitted in person. The Online Permitting
Service portal was launched in April 2020 for customers to submit permit applications online.
Depending on the complexity of the project, it will be assigned as one of three permit types: (1)
over the counter, (2) express, and (3) regular. Once the submittal is determined to be complete,
the expected turnaround time for issuing the permit is same day for over-the-counter projects,
14 calendar days for express projects, and 30 calendar days for regular projects. This review
process may involve multiple departments for specific project types.
For example, a proposed residential photo voltaic (PV) system that exceeds 10 kW will require
review by Utilities and Fire, while a proposed commercial electric vehicle (EV) charging station
will require review by Utilities, Fire, and Planning. If the permit application is incomplete or
does not comply with the relevant regulations and standards, then the customer wi ll be
notified to make corrections and resubmit the application. After resubmittal, there will be a
further review period of 7 calendar days for express projects and 14 calendar days for regular
projects. Construction and installation work may commence only after the permit is issued.
Upon completing construction/installation work, the project applicant will need to schedule an
inspection to verify that the work is consistent with the documentation. Depending on the
City of Palo Alto Page 3
project, there may be separate inspections by a building inspector and Utilities staff. If the work
is not consistent with the documentation or does not comply with relevant codes and
standards, the customer will be asked to make corrections. Once all the necessary inspections
are passed, the project is considered complete.
Note that the utility interconnection process in Palo Alto differs from nearby jurisdictions. In
Palo Alto, the Utilities Department’s review of these technologies is done as part of the building
permit review process. In other jurisdictions, separate applications must be submitted to the
municipal Building Division and to Pacific Gas and Electric (PG&E).
Chapter 3 of the TRC Study provides a more detailed overview of the permit processes for
various energy technologies and a summary of how permit processes differ for each
technology. Chapter 4 goes into the details of the permit processes for different technologies.
TRC Study Results
TRC reviewed publicly available data and resources on Palo Alto’s permitting and inspection
processes, interviewed City staff in Development Services and Utilities departments, and
interviewed industry stakeholders working in Palo Alto.
Since it was simultaneously studying 13 other jurisdictions in Santa Clara County, TRC could
make comparisons between jurisdictions’ permit processes, albeit based on anecdotal evidence
gathered in interviews.1 Section 3.3 gives a comparison of Palo Alto’s consultant’s findings. TRC
found a number of Palo Alto-specific requirements. Palo Alto specific requirements include
requiring a dedicated AC disconnect for PV systems,) or grounding requirements for PV systems
that differ from neighboring jurisdictions. Also, TRC said that the inspection process for PV
systems, EV charging equipment, and Energy Storage System s (ESS) is more rigorous in Palo
Alto than neighboring jurisdictions (for example, in Palo Alto, torque tests are required for all
connections). Contractors surveyed by TRC reported PV inspections in the City often require
more than one visit, which is contrary to the state mandate of a single inspection for small
residential PV system. TRC also noted more stringent regulatory requirements in Palo Alto, such
as Urban Forestry requirements when trenching near protected trees.
TRC found that Palo Alto’s over the counter permitting timelines (which apply to virtually all
residential solar systems without batteries) were consistent with other agencies, but the City
generally has longer timelines than neighboring cities for permits requiring plan review. Permit
fees were comparable. Contractors interviewed reported that stated review timelines are often
not met. Given that many electrification projects require Utility review, the permit review
process for these projects will likely take longer than other cities. If the information required for
Utility review is not provided, then the review process is further delayed. On the other hand,
one interviewee said that for panel upgrades, the process was significantly better in Palo Alto
1 As noted in the TRC study, Section 3.3, “Note that distinctions reported by contractor interviewees were
not independently verified, and that even though contractors may not have encountered certain
requirements in other jurisdictions they may still be required by code.”
City of Palo Alto Page 4
than in PG&E territory due to the fact the building permit review and interconnection review
could take place within the same agency.
TRC noted that while the City provides extensive resources to customers on permit guidelines
and checklists on City websites, these information sources are not well organized or easily
accessible. As an example, information and requirements for PV applications are split between
Development Services and Utilities website, rather than being accessible from one location.
Development Services, Utilities, & Fire Next Steps
Chapter 5 of the TRC Study presents several findings based on TRCs study and Chapter 6
presents recommendations on how to improve Palo Alto’s electrification permitting and
inspection processes. Staff has written responses to TRC’s recommendations and listed action
items for further follow-up in Attachment B.
Near-term actions include developing review timelines that prioritize these projects above
others and coordinating inspections among partner departments. These two actions alone will
create faster turnaround time for applicants, and ultimately help the City achieve its climate
goals more quickly. Further, as in the case with the inspections, these steps ensure adherence
with state law. Other actions, as evidenced in Attachment B, will require more time to
implement.
Timeline
Attachment B includes actions to be taken in the short term, medium term, and long-term time
frames. Staff will return to the UAC in four months with an update.
Resource Impact
Work on some of the short-term recommendations has proceeded using only existing
resources, but some of the longer-term action items may require additional resources. Staff will
develop budget proposals if needed.
Policy Implications
Streamlining the permitting process for PV system, residen tial battery storage, home
electrification projects, supports the City’s S/CAP goals to electrify existing buildings, as well as
various Policies and Programs in the Comprehensive Plan, including:
• Natural Environment Goal N-7 (“A clean, efficiency energy supply that makes use of
cost-effective renewable resources”), particularly Policy N-7.2 (“Advance the
development of a “smart” energy grid, a diverse energy resource portfolio, and
technologically advanced public utilities as a key part of a smart and connected city.”)
and Program N7.2.1 (“Promote the adoption of cost-effective, renewable energy
technologies from diverse renewable fuel sources by all customers.”)
• Business and Economics Program B5.1.1 (“Improve coordination o f the City’s
environmental review, permitting, and inspection processes.”)
City of Palo Alto Page 5
Stakeholder Engagement
As part of data gathering for the TRC study, the consultant conducted interviews with
contractors with experience working in Palo Alto and the surround region. Collectively, these
contractors have installation experience with PV systems, EV charging equipment, battery
storage system, and heat pump equipment. Additional outreach to customers and contractors
will be needed as staff proceeds with its permit streamlining work plan.
Environmental Review
This informational report is not a project for the purposes of the California Environmental
Quality Act, as a government organizational or administrative activity that will not result in
direct or indirect physical changes in the environment (14 CCR Section 15378(b)(5)).
Attachments:
• Attachment A: TRC Study
• Attachment B: Staff Reponses and Work Plan
PALO ALTO
ELECTRIFICATION PERMIT
STREAMLINING STUDY
SUBMITTED BY:
TRC / DAVID DOUGLASS-JAIMES
436 14th Street, Suite 1020, Oakland, CA 94612
DDouglass-Jaimes@TRCcompanies.com / 510.368.4427
SUBMITTED TO:
CITY OF PALO ALTO / CHRISTINE TAM
285 Hamilton Ave, Palo Alto, CA 94303
Christine.Tam@CityofPaloAlto.org
February 12, 2021
Attachment A
Palo Alto Electrification Permit Streamlining Study | Baseline Assessment – Draft
i | TRC
Table of Contents
1 EXECUTIVE SUMMARY......................................................................................1
2 INTRODUCTION ...............................................................................................5
2.1 About Palo Alto ............................................................................................... 5
2.2 About the Electrification Permit Streamlining Study ............................................. 6
2.3 Data Collection and Analysis Process .................................................................. 6
2.4 Assessment Evaluation Criteria .......................................................................... 7
3 PERMIT AND INSPECTION PROCESS OVERVIEW ..................................................9
3.1 Permit Trends ................................................................................................ 13
3.2 Baseline Assessment Evaluation Rubric ............................................................ 14
3.3 Comparison to Neighboring Jurisdictions .......................................................... 15
3.3.1 Process .......................................................................................................................15
3.3.2 Timelines ....................................................................................................................16
3.3.3 Pricing ........................................................................................................................16
4 APPLICATION REVIEW AND INSPECTION PROCESS BY PROJECT TYPE ................... 17
4.1 Appliance and Equipment Retrofits .................................................................. 17
4.2 Solar Photovoltaic (PV) ................................................................................... 18
4.3 Energy Storage System (ESS) ........................................................................... 18
4.4 Combined PV and ESS ..................................................................................... 19
4.5 Electric Vehicle (EV) Charging .......................................................................... 19
4.6 Electrical Service Panel Upgrade ...................................................................... 20
5 ANALYSIS AND FINDINGS ................................................................................ 21
6 STREAMLINING RECOMMENDATIONS .............................................................. 23
6.1 Immediate Priorities ....................................................................................... 25
6.1.1 Adhere to stated plan review and corrections timelines ............................................25
6.1.2 Comply with state-mandated single inspection for PV, reduce burden of
electrical inspections ..................................................................................................25
6.1.3 Evaluate Palo Alto-specific requirements, and eliminate requirements that
exceed code or ordinance requirements ....................................................................26
6.1.4 Improve coordination between Development Services and Utilities ..........................26
6.1.5 Explore opportunities to customize and simplify online submittal and review
processes ....................................................................................................................26
6.1.6 Consider opportunities for appointment-based one-on-one phone or web
meetings for challenging projects ..............................................................................27
Palo Alto Electrification Permit Streamlining Study | Baseline Assessment – Draft
ii | TRC
6.1.7 Improve communications with customers and contractors .......................................27
6.2 Medium-term Priorities .................................................................................. 28
6.2.1 Develop written plan check procedures for electrification project types ...................28
6.2.2 Actively track all electrification project types ............................................................28
6.2.3 Track common application and inspection errors to support ....................................28
6.2.4 Develop dedicated electrification permit applications or application procedures .....29
6.2.5 Adopt all state-mandated expedited review requirements .......................................29
6.3 Long-term Priorities ....................................................................................... 29
6.3.1 Evaluate permit fee structures to provide fee-parity .................................................29
6.3.2 Pursue regional coordination of review and inspection procedures ..........................30
iii | TRC
Table of Figures
Figure 7: Streamlining Recommendations Summary .............................................................. 3
Figure 1: Technologies to be Investigated ............................................................................. 6
Figure 2: Assessment Criteria Description ............................................................................. 8
Figure 3: Palo Alto Permit and Inspection Process ............................................................... 11
Figure 4: Typical permit review process for electrification technologies and selected natural
gas incumbents ...................................................................................................... 12
Figure 5: Palo Alto Permit Trends ...................................................................................... 13
Figure 6: Palo Alto Baseline Assessment Rubric ...................... Error! Bookmark not defined.
Figure 7: Streamlining Recommendations Summary ............................................................ 23
Palo Alto Electrification Permit Streamlining Study | Baseline Assessment – Draft
1 | TRC
1 Executive Summary
The City of Palo Alto (City) has contracted TRC to conduct the Electrification Permit Streamlining Study.
This study assesses and analyzes permitting and inspection process in Palo Alto for measures that
support building electrification, including electric appliances and equipment (in place of natural gas),
electric vehicle (EV) charging equipment, solar photovoltaic (PV), and ESS or “energy storage systems”
(ESS), to identify key opportunities and barriers with the permitting processes related to electrification
technology and inform permit process streamlining efforts. In addition, the study provides
recommendations for streamlining permitting and inspection processes for electrification measures in
Palo Alto.
To collect and compile the information presented in this Baseline Assessment report, TRC conducted
three primary data collection activities: review and collection of publicly available data and resources on
permitting and inspection processes, interviews with City staff in Planning & Development Services and
Utilities departments, and interviews with industry stakeholders working in Palo Alto.
Building on the results of these data collection efforts, TRC identified the following key findings of
successes and challenges in the permitting and inspection process for electrification technologies in Palo
Alto:
♦ The COVID-19 pandemic has disrupted typical Development Services workflows, resulting in
longer permit application timelines – As a result of the COVID-19 pandemic, Development
Services staff have transitioned to an entirely online system, working remotely, and handling an
increased permit activity workload with reduced staff resources. Removing face-to-face counter
hours inevitably slows the review process for some permit types, and limits opportunities for
collaboration and problem solving with customers, within the department, and with other
departments such as Utilities. Palo Alto’s stated plan review timelines in general are longer than
those for other jurisdictions in the region, and contractors reported that stated review timelines
are often not met.
♦ Online permit application process poses challenges for customers and City staff – Contractors
frequently noted that onerous file formatting requirements in the Online Permitting Services
portal (OPS) were an added burden and source of delay for permit applications. Although
Development Services no longer requires applicants to include bookmarking in their PDF plan
sets, Development Services staff are now reviewing online permit applications internally for
proper file formats and have launched a pilot program to make corrections internally without
involving the applicant, only adding to staff workload. Staff is monitoring the volume to see if
internal corrections are sustainable or if additional resources are needed. One Development
Services interviewee noted that because the OPS is provided by a third-party, it is not
customized to meet the City’s needs. This interviewee also noted that the department is
working with the system administrator to increase functionality and customization of the
system. While several contractor interviewees did note the onerous formatting requirements,
one contractor reported that Palo Alto’s online system was relatively user friendly compared to
other jurisdictions in the area.
♦ Development Services staff lack clear guidance on plan review for new electrification
technologies – One Development Services interviewee noted that there is a learning curve with
many electrification measures, with technologies that are advancing and changing quickly. They
noted that the department is working to ensure all processes are carried out consistently, and
Palo Alto Electrification Permit Streamlining Study | Baseline Assessment – Draft
2 | TRC
while the goal is to have documented processes for all application types, they have not had the
opportunity to develop fully standardized procedures yet.
♦ Permit applications frequently lack required information or documentation for Utility review –
Requirements for Utility review on permit applications can add complications in the plan review
process, and delay the overall process if documentation is incomplete, as noted by the Utilities
interviewees. Utilities interviewees also noted that they are not engaged early enough in the
permit application process, and that the Utility liaison in the Development Services office is
rarely utilized to review application materials at the pre-application stage. However, some
information required for Utility review may not always be available at the time of building
permit application, such as specification and details for PV systems (especially in the case of new
construction), resulting in incomplete submissions. One contractor interviewee also reported
that the panel upgrade process in Palo Alto is a significant improvement over the process in
jurisdictions within PG&E territory.
♦ Excessive inspection practices, and non-compliance with state PV inspection mandates –
Contractor interviewees consistently reported that inspections for residential PV, EV charging,
and ESS were excessively detailed and onerous compared to other jurisdictions, including
requirements such as torqueing all connections. Because of those detailed inspection
procedures, contractors also reported that the electrical inspector often splits inspections for PV
systems into two separate visits (not counting re-inspection for correcting errors), contrary to
the state mandates requiring a single inspection for small residential PV systems. One
Development Services interviewee acknowledged that the inspectors are very thorough in
enforcing the letter of the code, and reported that it was rarely possible for them to complete a
PV inspection in one visit. In addition, one contractor interviewee noted that the prescriptive
inspection checklists for PV or ESS systems may not adequately address the characteristics of
projects that are combining multiple systems, or are not adaptable to differing conditions on
site. For example, one contractor described a scenario with a combined PV and ESS system,
resulting in three power sources including the Utility source, but the inspection checklist
requires a label for a dual power source.
♦ Requirements unique to Palo Alto result in challenges and delays – Development Services,
Utilities, and contractor interviewees all mentioned that Palo Alto has unique requirements for
certain electrification projects that neighboring jurisdictions do not have. The example that
came up most often was the requirement for a dedicated power disconnect for residential PV
and ESS systems. Both Development Services and Utilities interviewees reported the AC
disconnect requirement is a common source of error in both permit applications and
installations.
♦ Customer-facing resources are not well organized or easily accessible – The City provides
extensive resources, guidelines, and checklists to support permit applications and inspections,
but some of the Utilities interviewees speculated that the extensive information may actually be
too much for customers to effectively take in. For example, the PV checklist outlines extensive
details on system requirements and installation guidelines in combination with permit
application requirements, which may make finding specific details more difficult. The
organization of these documents on the City website may make this information difficult to find.
One Utilities interview also noted that information and requirements for some processes, like
PV applications, are split between Development Services and Utilities websites, rather than
having everything in one unified location.
Palo Alto Electrification Permit Streamlining Study | Baseline Assessment – Draft
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Building on the findings outlined above, TRC has identified the streamlining recommendations outlined
below. These recommendations respond directly to the challenges identified in the previous section,
and present opportunities to further streamline processes for electrification technologies overall.
Figure 1 summarizes the recommendations in relation to the challenges identified in the previous
section, with section number references for detailed descriptions of each recommendation, below.
Figure 1: Streamlining Recommendations Summary
Challenge Identified (see section 5) Streamlining Recommendations
The COVID-19 pandemic has disrupted
typical Development Services
workflows, resulting in longer permit
application timelines
Immediate priorities:
(6.1.1) Adhere to stated plan review and corrections
timelines by identifying efficiencies in the process or
providing additional resources required to meet stated
timelines
(6.1.6) Consider opportunities for appointment-based one-
on-one phone or web meetings for challenging projects
Online permit application process
poses challenges for customers and
City staff
Immediate priorities:
(6.1.5) Explore opportunities to customize and simplify
online submittal and review processes such as limiting
formatting requirements and integrating submittal checklists
Development Services staff lack clear
guidance on plan review for new
electrification technologies
Medium-term priorities:
(6.2.1) Develop written plan review procedures for all
electrification project types, including strategies for common
combined project types (e.g. combined PV and ESS)
Permit applications frequently lack
required information or
documentation for Utility review
Immediate priorities:
(6.1.4) Improve coordination between Development Services
and Utilities, including fully engaging the Utility liaison to
ensure application materials are complete, and integrating
Utility checklists on Development Services website and OPS.
Excessive inspection practices, and
non-compliance with state PV
inspection mandates
Immediate priorities:
(6.1.2) Comply with state-mandated single inspection for PV
systems, and reduce the burden of electrical inspections by
limiting the scope of the inspection to what is accessible at
the time of inspection, and sampling
Medium-term priorities:
(6.2.5) Adopt all state-mandated expedited review
requirements
Palo Alto Electrification Permit Streamlining Study | Baseline Assessment – Draft
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Challenge Identified (see section 5) Streamlining Recommendations
Requirements unique to Palo Alto
result in challenges and delays
Immediate priorities:
(6.1.3) Evaluate Palo Alto-specific requirements (see section
3.2), and eliminate requirements that exceed code or
ordinance requirements
Long-term priorities:
(6.3.2) Pursue regional coordination of review and
inspection procedures to provide greater consistency for
customers, and reduce application errors.
Customer-facing resources are not
well organized or easily accessible
Immediate priorities:
(6.1.7) Improve communications with customers and
contractors by consolidating information documents in a
more accessible location and including all Utility
requirements with Development Services documentation
Palo Alto Electrification Permit Streamlining Study | Baseline Assessment – Draft
5 | TRC
2 Introduction
The City of Palo Alto (City) has contracted TRC to conduct the Electrification Permit Streamlining Study.
This study assesses and analyzes permitting and inspection process in Palo Alto for measures that
support building electrification, including electric appliances and equipment (in place of natural gas,
electric vehicle (EV) charging equipment, solar photovoltaic (PV), and ESS or “energy storage systems”
(ESS), to identify key opportunities and barriers with the permitting processes related to electrification
technology and inform permit process streamlining efforts. In addition, the study provides
recommendations for streamlining permitting and inspection processes for electrification measures in
Palo Alto.
2.1 About Palo Alto
The City is a charter city located in the San Francisco Bay Area of Northern California. The City provides
electricity, natural gas, water, wastewater collection, fiber optics and other utility services to customers
within its boundaries through its Utilities department (CPAU). CPAU is the only municipal utility in
California that operates publicly owned services in all of the above areas. CPAU serves over 29,000 utility
customers, with around 15,000 single family customers, 10,000 multifamily customers, and 4,000
nonresidential customers.
City of Palo Alto has long established its leadership in sustainability, with the adoption of the City’s first
climate action plan in 2007. In April 2016, City Council unanimously approved an ambitious goal of
reducing the community’s GHG emissions by 80% from the 1990 levels by 2030 (“80x30”) for the City’s
Sustainability and Climate Action Plan (S/CAP). This goal takes into account the head start provided by
the City’s Carbon Neutral Plan, that requires carbon neutrality for the electric supply portfolio since
2013. As of 2018, the community’s GHG emissions are 36% below 1990 levels. To meet the 80x30 goal,
the City will need to aggressively pursue GHG reductions in the transportation and building sectors, by:
(i) reducing total vehicle miles travelled by encouraging alternative modes of transport, (ii) increasing
the share of EV vehicles among residents, commuters and visitors, and (iii) reducing the direct use of
natural gas in buildings by electrifying gas appliances for space heating, water heating, cooking, clothes
drying, etc.
In December 2019, City Council approved a building reach code ordinance that mandates all-electric
design for all low-rise residential new construction projects, and electrification-ready requirements for
mixed-fuel design for non-residential projects.
To encourage the use of EVs, the City currently offers EV charger rebates to workplaces. CPAU also
provides technical assistance to multifamily sites and non-profit organizations to install EV chargers. The
California Clean Fuel Rewards Program, partially funded by CPAU and other agencies, launched in
November 2020 and provides a $1500 rebate for new EV purchases at participating dealerships.
To encourage building electrification, CPAU currently offers a rebate of up to $1500 for the replacement
of a gas water heater with a heat pump water heater. CPAU plans to expand rebate offers to support
building electrification among residential and nonresidential customers.
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2.2 About the Electrification Permit Streamlining Study
The Electrification Permit Streamlining Study analyzes current permitting and inspection processes for
all-electric technologies and appliances in Palo Alto. The study examines permitting processes related to
electric appliances and equipment (in place of natural gas), PV systems, and ESS at the residential level,
as well as EV charging at the residential and commercial levels. The results of the study outline Palo
Alto’s current permitting and inspection processes, and provide recommendations and best practices for
streamlining those processes.
At the outset of the study, the City and TRC identified the relevant technologies to be investigated
through this study, as outlined in Figure 2 below.
Figure 2: Technologies to be Investigated
♦ All-electric appliances:
♦ Electric heat pump water heaters
♦ Electric heating ventilation & air
conditioning
♦ Induction cooktops
♦ Electric dryers (resistance and heat
pump)
♦ Self-generation and energy storage:
♦ Solar + battery storage
♦ Solar only retrofit (residential +
commercial)
♦ Solar thermal (for domestic hot
water and pool heating)
♦ Whole-home battery storage
♦ Storage-only retrofit
♦ Electric vehicle charging infrastructure
♦ Level 1 and 2 charging at residences
♦ Level 1, 2, and 3 charging at
nonresidential
♦ Electric infrastructure
♦ Electrical panel upgrade, including
relocation of residential electric
panel (benchmark against other
electric utility providers in the region)
(200amp, 400amp)
♦ Interconnection process
(benchmark against other electric
utility providers in the region)
2.3 Data Collection and Analysis Process
To collect and compile the information presented in this report, TRC conducted three primary data
collection activities:
♦ Data collection of publicly available processes and documentation – TRC collected information
on permitting and inspection processes, as well as documentation and resources posted on the
City website. TRC also compiled information on permitting and inspection processes provided
directly from City staff.
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♦ Interviews with City staff – TRC conducted interviews with staff from the Planning &
Development Services department and the Utilities department, as follows:
• Planning & Development Services interviews – three interviews total: one Project
Coordinator, one Contract Building Plan Checker, one Building Inspector
• Utilities interviews – one group interview of four utility engineering staff
♦ Interviews with industry stakeholders – TRC interviewed a total of five industry stakeholders
with experience working in Palo Alto and the surrounding region, in three interviews. Industry
interviewees shared experiences with a variety of electrification technologies including
equipment and appliance retrofits, solar PV installation, EV charging, and battery storage (ESS).
In addition, where relevant, this report incorporates findings from a parallel study of electrification
permitting and inspection processes TRC is conducting on behalf of the Silicon Valley Clean Energy
Authority (SVCE).
2.4 Assessment Evaluation Criteria
The Baseline Assessment documents electrification permit trends, as well as permitting processes,
pricing, and timelines, and how those factors differ between electric technologies and relevant natural
gas counterparts.
To provide an additional level of evaluation of current permitting and inspection practices, TRC
established a set of four key assessment questions, as outlined in Figure 3, below.
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Figure 3: Assessment Criteria Description
Assessment Questions Why it’s important
Does the agency provide
expedited review or processing
for electrification measures?
Expedited review or processing is one way permitting agencies
can help to encourage adoption of new technologies. In
addition, state laws, as described later, already require
expedited processing for PV and EV charging projects,
establishing a model process for other electrification measures.
Does the agency provide
information, checklists,
guidelines, or other resources for
electrification permit processes?
Permitting resources, such as submittal guidelines or system
requirements can help ensure that customers submit all the
necessary documentation, in the appropriate formats, as part of
their permit application, thus reducing or eliminating the need
for revisions or corrections, and streamlining the overall process.
Does the agency have specialized
permit applications for
electrification measures, or an
indicator as part of standard
permit application forms?
Electrification measures require different plan check and
inspection processes than standard like-for-like replacements,
because of additional electrical requirements and/or different
performance characteristics. Having a method for clearly
indicating electrification measures (e.g. HPWH vs standard water
heater replacement) can help customers better understand
submittal requirements, and help Building Department staff
recognize the plan check and inspection processes required.
Does the agency track
electrification permit trends?
Tracking permit trends helps identify electrification adoption in
an agency’s jurisdiction, which in turn can help identify priority
areas for developing dedicated plan check or inspection process
and can help identify areas where additional support may be
needed to encourage greater adoption.
These assessment questions were evaluated against five key permitting categories that support the
most prevalent electrification measures: appliance electrification retrofits (e.g., heat pump water
heaters and heat pump HVAC), new receptacles or electrical circuits to support new electrical loads,
electric service panel upgrades, PV, ESS, and EV charging.
Results of these evaluation criteria for Palo Alto are shown below in section 3.3.
These criteria also guided the data collection and analysis and inform the assessment findings presented
in this document.
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3 Permit and Inspection Process Overview
New construction, building alterations, and replacement of mechanical equipment or permanently
installed appliances will require a building permit and inspection. For the purposes of this report, all of
the electrification processes outlined in Figure 2 will require some form of permit, unless it is a plug-in
appliance with an existing electrical connection available in the appropriate location. Cities and counties
issue permits and conduct inspections to ensure that construction work is done safely and meets all
relevant codes, ordinances and standards.
Palo Alto has four types of permit application and review processes. For certain minor project types,
including furnace replacements in the same location, natural gas tank water heater replacements,
residential window retrofits, and re-roofing, among others, licensed contractors can apply for Instant
(Online Web Based) permits, which they receive and print online without plan review . Prior to the
pandemic these were the only permits available online. None of the electrification measures subject to
this study are currently eligible for Instant permits.
All other projects types, including all of the electrification project types in this study, will require some
form of plan review. Due to the pandemic, all permit applications requiring plan review are processed
through City’s Online Permitting Services (OPS) portal. The first step in the permit application process is
the Pre-Application phase, where applicants upload all application and project documents and Project
Coordinators (see description below) review documents for completeness. Project Coordinators review
Pre-Application submittals within five business days and applicants will receive email requests to
provide any additional or missing information. If all application materials are complete, Project
Coordinators will inform applicants and route application materials to one of three plan check timelines:
♦ Over the counter: prior to the pandemic-related work-from-home conditions, these permit
types would be reviewed in-person at the counter at the Development Center, and if everything
in the application and documentation was correct, permits would be issued at that time. Today,
“over the counter” permits submitted through the OPS and are typically reviewed within two to
three days. Per state requirements, small residential PV systems (up to 10 kW), and residential
EV charging installations up to 40 amps receive over the counter review. If application materials
require corrections or revisions, applicants are notified via email. Resubmittal review for over
the counter applications are typically processed within one day.
♦ Express: projects that require more thorough plan check may be routed for “express” review,
for completion within 14 calendar days once the submittal is determined to be complete. Larger
residential PV systems (over 10 kW), residential EV charging installations over 40 amps, and
nonresidential EV charging installations and nonresidential PV systems typically receive express
review. If application materials require corrections or revisions, applicants are notified via email.
Once the applicant completes the resubmittal, the project is routed for a 7 calendar day review.
♦ Regular: larger or more complex projects will be routed for regular plan review, for completion
within 30 calendar days once the submittal is determined to be complete. These projects may
include large renovations or additions, projects combining multiple systems (such as large PV,
ESS, and EV charging), or projects that may require review from additional departments such as
Utilities, Planning, or Fire (see for review requirements by project type). If application materials
require corrections or revisions, applicants are notified via email. Once the applicant completes
the resubmittal, the project is routed for a 14 calendar day review.
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Palo Alto’s Planning & Development Services department has three key staff roles in the permit and
inspection process:
1. Project Coordinators take in permit applications, review documents in the Pre-Application
phase to assess the completeness of the submittal, determine the type of project and permit
application and the associated plan check schedule (per the options described above), and route
the application through the overall process. If applications are incomplete, Project Coordinators
will ask the customer to make corrections. When the project has been approved, the Project
Coordinators assess and collect the permit fees and issues the approved plans.
2. Plan Checkers and Plan Check Engineers review permit applications and project documents
once the Project Coordinators determine the submittals to be complete to confirm compliance
with relevant codes, ordinances, and standards. If the project, as described in the documents,
does not comply with the relevant regulations and standards, the Plan Checkers will ask the
customer to make corrections. If the project complies, the Plan Checker will approve the permit
for issuance.
3. Inspectors review the actual work after the permit is issued. Inspectors confirm that the work
was completed as stated in the permit applications and project documents, and that the work
complies with relevant codes, ordinances and standards. If the work is not consistent with the
documentation, or does not comply, the inspector will ask the customer to make corrections.
Once all the necessary inspections are passed, the project is considered complete.
Because Palo Alto has its own municipal utility, some electrification projects will also require utility
review as part of the plan check process, e.g. new solar PV systems, service panel upgrades, and large EV
charging or ESS installations. In jurisdictions that are part of investor-owned utility territories, such as
PG&E, the utility coordination is largely separate from building permit and inspection process.
Depending on the scope of the project, permit applications may also require review from other City
departments, such as Planning or Fire.
Figure 4, below, illustrates and overall journey map of permit and inspection process in Palo Alto.
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Figure 4: Palo Alto Permit and Inspection Process
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Figure 5, below, outlines the typical permit review process for the electrification technologies assessed in this study. Note that all PV projects, regardless of size, require a separate utility interconnection agreement.
Figure 5: Typical permit review process for electrification technologies and selected natural gas incumbents
Permit Type Plan Review Type Utility Review? Planning Review? Fire Review?
New electrical outlet or circuit (to support new electrical
appliance / equipment) Over the counter
Heat pump water heater Over the counter
Heat pump HVAC Express If exterior equipment
Residential PV <10 kW Over the counter Y
Residential PV >10 kW
Express
(If a supplemental review is required, it will take up to additional
20 days. Beyond the supplemental review, additional time and
fee will be required.)
Y Y
ESS Interior Express Y HazMat review req’d
ESS Exterior Express Y Y HazMat review req’d
Residential EV charging <40 amps (50 amps breaker) Over the counter Y
Residential EV charging >40 amps (50 amps breaker) Regular Y Y Y
Commercial EV charging Regular Y Y Y
ESS + PV <10 kW Express Y HazMat review req’d
Combined PV, ESS, and/or EV charging Regular Y
Electrical service panel upgrade – up to 200 amps, within 10
feet of original location Over the counter
Electrical service panel upgrade – over 200 amps, and/or
relocated more than 10 feet from original location Express Y
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3.1 Permit Trends
Figure 6 shows selected permit trends in Palo Alto for 2018, 2019, and 2020. With the exception of solar
PV and EV charging, Palo Alto is not actively tracking permit applications for electrification or
electrification-supporting (e.g., service panel upgrades or upgraded electrical circuits) technologies.
Note that with the exception of EV charging, all tracked categories in Figure 6 saw increases in permit
applications in 2020, despite the impacts of the COVID-19 pandemic.
Figure 6: Palo Alto Permit Trends
Permit Type 2018 2019 2020 Is this data tracked?
Solar PV 100 99 115 Yes
EV Charging 148 124 70 Yes
ESS No
Water Heater
Replacement (all types)
86 75 93 Yes
Heat Pump Water Heater No
Furnace Replacement (all
types)
24 33 51 Yes
Heat Pump Space Heating No
Electric Service Panel
Upgrade No
New electrical circuit(s) No
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3.2 Baseline Assessment Evaluation Rubric
Figure 7, below, illustrates the evaluation rubric for Palo Alto based on the criteria outlined above in section 2.4.
Figure 7: Palo Alto Baseline Assessment Rubric
Assessment Question
Appliance
Electrification
Retrofits
New Receptacle
/ Circuit
Service Panel
Upgrade Solar PV EV Charging ESS
Expedited review or
processing?
Checklists, guidelines, or
other resources?
Dedicated selection option
on permit application form?
Tracking electrification
permit trends?
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3.3 Comparison to Neighboring Jurisdictions
In addition to the overall assessment of Palo Alto permitting and inspection processes, TRC has collected
the summary details outlined below comparing Palo Alto processes to neighboring jurisdictions. This
comparison is based on findings from a parallel study for Silicon Valley Clean Energy’s (SVCE) thirteen
member agencies and their permitting and inspection processes, as well as feedback from contractor
interviewees working across jurisdictions in the Bay Area. Note that distinctions reported by contractor
interviewees were not independently verified, and that even though contractors may not have
encountered certain requirements in other jurisdictions they may still be required by code.
3.3.1 Process
Overall, typical processes are relatively consistent between jurisdictions, based on feedback from
building officials. However, because Palo Alto has its own utility, any coordination with utility review
happens within the building permit application process, as opposed to SVCE agencies where any
coordination with PG&E is separate from the building permit process.
Both contractors and City interviewees did report that Palo Alto has some specific requirements and
processes that go beyond typical practice in other jurisdictions. These Palo Alto-specific requirements
and practices are outlined as follows:
1. Project or system requirements above and beyond neighboring jurisdictions:
a. Dedicated AC disconnect for PV systems, not required in other jurisdictions
b. Dedicated disconnect for each powerwall/battery, whereas other jurisdictions may only require
one for the whole system
c. Separate shutoffs for PV and ESS in projects with both PV and ESS system
d. PV systems require second ground rod in the system, six feet apart, not required in other
jurisdictions
e. Commercial EVSE disconnects
2. Application or inspection procedures that differ from neighboring jurisdictions
a. Document formatting requirements for plan sets submitted through OPS
b. Utility applications for projects like PV required at the same time as the building permit, when
details of the PV system, such as size and specifications may not yet be finalized
c. PV, EV charging, and ESS inspections more rigorous than neighboring jurisdictions, including
torque testing all connections, per reports from contractor interviewees
d. Inspection checklists are longer than other jurisdictions, including requirements for a placard on
the main service panel diagraming where all the shutoffs are located (the interviewee noted
that this may be a requirement in the code, but has not encountered this issue elsewhere)
e. Structural requirements for EV charging equipment pads, not required in other jurisdictions, as
reported by one contractor interviewee
3. Other process differences:
a. Project Coordinator role and “pre-application” phase are unique to Palo Alto
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b. Planning review for mechanical equipment placement / noise ordinance (not entirely unique to
Palo Alto, but not required in all jurisdictions)
c. Urban Forestry requirements for any application requiring trenching near protected trees
3.3.2 Timelines
The online review process has delayed review timelines in almost all jurisdictions. Palo Alto’s “Over the
Counter” timelines are relatively consistent with neighboring agencies. However, full plan review
timelines (both “Express” and regular) are generally longer than neighboring jurisdictions (SVCE
jurisdictions quoted plan review timelines between one day and 20 days, depending on the jurisdiction
and project scope).
Given that Palo Alto operates its own utility, the permitting process for electrification projects that
involves utility interconnection (e.g. new PV system or service panel upgrade) will cover the
requirements for both the building permit and utility interconnection. In other SVCE jurisdictions, the
project applicant will need to separately coordinate with PG&E on the utility interconnection agreement
or panel upgrade while undergoing the building permit process. Depending on PG&E availability, the
jurisdiction, and the scope of the project, this additional coordination can add several weeks to the
overall process.
3.3.3 Pricing
Permit fee structures in Palo Alto are based on a cost recovery model, and fees are largely in line with
neighboring jurisdictions. Palo Alto complies with all state mandated caps on permit fees for PV systems.
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4 Application Review and Inspection Process by
Project Type
Palo Alto uses an online permit submittal system called the Online Permitting Services (OPS) through a
Citizen Access Portal for all permit applications. The OPS system has specific submittal guidelines and
formatting requirements for permit applications that customers must follow. The Development Services
website provides extensive resources in written and video form to guide customers through the
application submittal process.
The City also provides extensive resources such as submittal guidelines and application checklists to help
customers develop successful permit application submittals, especially for PV, EV charging, and ESS.
Because CPAU is part of the City, Utility review for electrification projects is integrated into the permit
application and inspection process.
Any time a permit application triggers Utility review (see details in the following sections), the
Development Services Project Coordinator will route the Utilities Service application, signed
Interconnection Agreement, and PV/ESS load sheet to Utility Engineering Review. A dedicated Utilities
staff is available to assist the Project Coordinator to ensure the completeness of the submittals. As with
the permit application process, Project Coordinators confirm the completeness of the submittals for
engineering review.
Though integrated Development Services and Utility review can provide a more seamless experience for
customers—as interviewees reported is the case with service panel upgrades—it can also cause
complication if the required Utility documentation is not complete or not included as part of the permit
application. Utility interviewees noted that although the City provides submittal guidelines and
checklists, applicants are not always submitting complete information (even when the customer
indicates that everything is complete on the checklist), and that Project Coordinators may not notice
when Utility submissions are incomplete. A Utility liaison is available in Development Services to review
applications at the pre-application phase to ensure submittals are complete, but that Project
Coordinators may not be fully utilizing the liaison when reviewing submittals.
Utility interviewees also reported that including Utility review as part of the permit application process
can create complication on larger projects where final details for electrification systems have not been
finalized, such as PV or ESS for new construction or large renovations.
The following sections provide additional details on the permit and inspection processes for typical
electrification measures.
4.1 Appliance and Equipment Retrofits
For appliance and equipment retrofits, such as heat pump water heating (HPWH) or electric HVAC
systems, there are additional permit review and inspection procedures when compared to a standard
like-for-like replacement. For example, whereas a typical gas water heater replacement would be
eligible for an instant online permit, a heat pump water heater installation requires a plan review to
confirm that the water heater location meets the operational specifications for the equipment,
minimum energy efficiency standards and to review any new electrical supply and venting to the
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location. Inspections for these types of installations will need to confirm that all gas lines are properly
capped, and that all the new electrical supply is properly installed and safe.
Similarly, any other type of new electrical equipment with an exterior condensing unit, such as a heat
pump HVAC system or HPWH, would require submitting a site plan indicating the location of the
condensing unit and may require Planning review for property setback and noise ordinance
requirements.
4.2 Solar Photovoltaic (PV)
New stand-alone residential rooftop solar PV systems up to 10 kW in size are reviewed “over the
counter”, in compliance with state mandates for expedited PV permitting under AB 2188 and AB 1414.
Systems larger than 10 kW, or any system combined with ESS and/or EV charging are scheduled for
longer plan review periods depending on the scope of the project. Large PV systems > 10 kW (including
existing and proposed), and PV systems in combination with storage, or EV charging > 40 amp also
require Utility review (see section 3), as well as Planning and Fire review.
Plan review for PV systems includes confirming proper electrical connections and disconnects, minimum
fire access setbacks from the edge of the roof, structural anchorage for wind and seismic loads,
waterproofing details, three-line electrical diagram of all the components sizes and types, dimensions,
equipment and electrode grounding systems, proper equipment labeling, means for rapid shutdown and
a review of load calculations to confirm adequate service panel capacity. Inspections will also confirm all
electrical connections and disconnects, confirm structural connections and adequate protection from
damage to the equipment. Submittal Guidelines for Photovoltaic Residential Standard Submittal are
available on building permit website in the Residential Forms section.1
PV systems regardless of size are required to submit the PV/ESS load sheet and an owner-signed
Interconnection Agreement form to the Utilities division if submitted on or after Jan 1, 2018.
Utility review for PV systems includes the signed interconnection agreement, which provides detailed
information about the proposed PV system and legal right for the City to disconnect that system in case
of emergency, interference or hazard. Utility review also includes confirming electrical system
requirements, such as the required AC disconnect. Utility interviewees indicated that this AC disconnect
requirement is a common error in applications, and they noted that most jurisdictions in PG&E territory
do not have the same requirements for dedicated disconnect for PV systems.
4.3 Energy Storage System (ESS)
Battery storage systems or Energy Storage Systems (ESS) require plan review and also require Utility
and Fire reviews in addition to building, depending on the type and size of the system. Plan reviews and
inspections review the electrical configuration and confirm the power disconnect, confirm proper
locations and clearances for equipment placement, ensure adequate protection from damage, especially
in garage locations, and confirm compatibility of all electrical components in the system. For larger or
1 https://www.cityofpaloalto.org/gov/depts/ds/building/building_permits.asp
https://cityofpaloalto.org/civicax/filebank/documents/63929
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multiple ESS units that exceed the certain threshold quantities depending on the type of battery, as
listed in the California Fire Code and in the City’s ESS Checklist, these are required to be reviewed and
inspected for hazardous materials requirements by the Fire Department. Indoor residential ESS shall
require minimum working clearances, proper ventilation, protection from physical damage if located in
a vulnerable location, such as a garage, and smoke alarms and fire sprinklers. ESS units cannot be
installed within habitable residential spaces.
Outdoor ESS installations require a minimum 5-ft separation from property lines, public ways, other
buildings, combustible materials and minimum working clearances.
Fire department requirements for ESS installations with capacities exceeding California Fire Code
thresholds in Table 608.1 require hazardous material review.
Utilities review requires a minimum of one AC disconnect for the PV/ESS that is within 10 feet and
visible from the main service panel in addition to a completed PV/ESS Load Sheet.
Submittal guidelines for Energy Storage Systems can be found on the Development Service website.2
4.4 Combined PV and ESS
When PV systems are combined with ESS system installations, all of the PV and ESS requirements apply
with additional requirements. These combined systems are reviewed by the building, utilities and fire
departments for compliance. The additional requirements include the method and location of rapid
shutdown for the ESS and a point of interconnection between the ESS and other power production
sources. Electrical load calculations for conductor sizing, overcurrent protection ratings, open circuit
voltage calculations and new service panel sizes are reviewed. A three-line electrical diagram showing
method of interconnection, grounding and bonding of the ESS and PV are required for review.
For existing PV systems with a new or retrofit ESS system requires that the conductor sizing, type and
interconnections must be reviewed for the revised configuration.
4.5 Electric Vehicle (EV) Charging
Stand-alone Residential Level 2 EV charging up to 40 amps is reviewed “over the counter”, in compliance
with state mandates for expedited permitting by AB 1236 (Gov. Code Section 65850.7). Residential EV
charging over 40 amps are scheduled for “express” plan check, including a Utility review. Plan reviews
and inspections review the electrical configuration, confirm proper locations and clearances for
equipment placement, ensure adequate protection from damage, and confirm compatibility of all
electrical components in the system and that the existing service panel is adequately sized. Submittal
Guidelines are available on building permit website in the Residential Forms section.3
Stand-alone Commercial Level 2 and Level 3 EV charging applications are also typically routed to
“express” plan check. Commercial installations over 40 amps continuous or 50 amps breaker require a
more thorough plan check process including Utility, Fire, and sometimes Planning review. Plan check for
commercial EV charging reviews applications for accessibility requirements for disabled access and
2 https://cityofpaloalto.org/civicax/filebank/documents/65944
3 https://www.cityofpaloalto.org/gov/depts/ds/building/building_permits.asp
https://www.cityofpaloalto.org/civicax/filebank/documents/37623
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building design criteria in addition to the standard electrical and safety requirements. The City’s Green
Building Ordinance also requires additional charging stations at nonresidential and hotel sites beyond
the minimum state requirements in the California Building Code for new construction, which has caused
some confusion with applicants.
Submittal Guidelines for Commercial EV charging are available on building permit website in the
Commercial Forms section.4
As noted above, utility review for EV charging is only required for systems over 40 amps or overcurrent
protection breaker is over 50 amps. Utility review includes electrical system configuration and
requirements, location, clearances, and protection from damage.
4.6 Electrical Service Panel Upgrade
In most cases, contractors are aware of whether a home has sufficient panel capacity for the planned
measures or if a panel upgrade is required. In some cases, the customer may request a service panel
upgrade to support current or future electrification measures described above.
The review process for panel upgrades depends on the panel size and location. Permits for 200 amp
panels within 10 feet of the original location are reviewed “over the counter” and typically issued the
same day. For these permits, Utilities works with applicant after permits have been issued to ensure
their compliance with CPAU’s rules and standards. Permits for 200 amp panels more than 10 feet from
the original location, and 400 amp panels require “express” review, and applicants must include a site
plan as part of the application.
Utility interviewees reported that utility service panel upgrades are required for about one-third of the
projects they review, including major renovations and new homes. They also reported that the process
for panel upgrade applications and meter release inspections is a very strong link between Utilities and
Development Services. The documentation and process are clear, consistent, and understood by all
parties involved.
As noted above, 200 amp panels more than 10 feet from the original location, and any 400 amp panels
require Utility review. Utility review for service panel upgrades includes both electrical system and load
calculation review, as well as any infrastructure support requirements such as providing upgraded
conduit or upgrading utility transformers. For 400 amp panels, Utilities also requires NEC load
calculation for approval.
Panel upgrade in the original location doesn’t necessary mean that it meets current Utilities standard.
Any electrical panels located directly above gas meters or too close to an openable window are required
to be relocated. Customers are responsible for the cost of any new or upgraded conduit to support the
increased panel size. Costs vary depending on whether supply is overhead or underground, as well as
the length of any buried cable required. Upgrades to 400 amp service panel require full load calculations
and engineering review to confirm utility transformer capacity. If the increased load from the upgraded
panel exceeds the transformer capacity, the customer is also responsible for the labor cost of upgrading
the utility transformer.
4 https://www.cityofpaloalto.org/gov/depts/ds/building/building_permits.asp
https://www.cityofpaloalto.org/civicax/filebank/documents/37622
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5 Analysis and Findings
Based on interviews with Development Services and Utilities staff, as well as contractors working in Palo
Alto, and a review of documentation on the City website, TRC has identified the following key findings of
successes and challenges in the permitting and inspection process for electrification technologies in Palo
Alto:
♦ The COVID-19 pandemic has disrupted typical Development Services workflows, resulting in
longer permit application timelines – As a result of the COVID-19 pandemic, Development
Services staff have transitioned to an entirely online system, working remotely, and handling an
increased permit activity workload with reduced staff resources. Removing face-to-face counter
hours inevitably slows the review process for some permit types, and limits opportunities for
collaboration and problem solving with customers, within the department, and with other
departments such as Utilities. Palo Alto’s stated plan review timelines in general are longer than
those for other jurisdictions in the region, and contractors reported that stated review timelines
are often not met.
♦ Online permit application process poses challenges for customers and City staff – Contractors
frequently noted that onerous file formatting requirements in the OPS were an added burden
and source of delay for permit applications. Although Development Services no longer requires
applicants to include bookmarking in their PDF plan sets, Development Services staff are now
reviewing online permit applications internally for proper file formats and have launched a
piloting program to make corrections internally without involving the applicant, only adding to
staff workload. Staff is monitoring the volume to see if internal corrections are sustainable or if
additional resources are needed. One Development Services interviewee noted that because the
OPS is provided by a third-party, it is not customized to meet the City’s needs. This interviewee
also noted that the department is working with the system administrator to increase
functionality and customization of the system. While several contractor interviewees did note
the onerous formatting requirements, one contractor reported that Palo Alto’s online system
was relatively user friendly compared to other jurisdictions in the area.
♦ Development Services staff lack clear guidance on plan review for new electrification
technologies – One Development Services interviewee noted that there is a learning curve with
many electrification measures, with technologies that are advancing and changing quickly. They
noted that the department is working to ensure all processes are carried out consistently, and
while the goal is to have documented processes for all application types, they have not had to
opportunity to develop fully standardized procedures yet.
♦ Permit applications frequently lack required information or documentation for Utility review –
Requirements for Utility review on permit applications can add complications in the plan review
process, and delay the overall process if documentation is incomplete, as noted by the Utilities
interviewees. Utilities interviewees also noted that they are not engaged early enough in the
permit application process, and that the Utility liaison in the Development Services office is
rarely utilized as they should be to review application materials at the pre-application stage.
However, some information required for Utility review may not always be available at the time
of building permit application, such as specific details of PV systems, resulting in incomplete
submissions. One contractor interviewee also reported that the panel upgrade process in Palo
Alto is a significant improvement over the process in jurisdictions within PG&E territory.
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♦ Excessive inspection practices, and non-compliance with state PV inspection mandates –
Contractor interviewees consistently reported that inspections for residential PV, EV charging,
and ESS were excessively detailed and onerous compared to other jurisdictions, including
requirements such as torqueing all connections. Because of those detailed inspection
procedures, contractors also reported that the electrical inspector often splits inspections for PV
systems into two separate visits (not counting re-inspection for correcting errors), contrary to
the state mandates requiring a single inspection for small residential PV systems. One
Development Services interviewee acknowledged that the inspectors are very thorough in
enforcing the letter of the code, and reported that it was rarely possible for them to complete a
PV inspection in one visit. In addition, one contractor interviewee noted that the prescriptive
inspection checklists for PV or ESS systems may not adequately address the characteristics of
projects that are combining multiple systems, or are not adaptable to differing conditions on
site. For example, one contractor described a scenario with a combined PV and ESS system,
resulting in three power sources including the Utility source, but the inspection checklist
requires a label for a dual power source.
♦ Requirements unique to Palo Alto result in challenges and delays – Development Services,
Utilities, and contractor interviewees all mentioned that Palo Alto has unique requirements for
certain electrification projects that neighboring jurisdictions do not have. The example that
came up most often was the requirement for a dedicated power disconnect for residential PV
and ESS systems. The current Commercial EVSE Submittal Guideline also requires the site plan to
show location of a EVSE disconnect; it is unclear this requirement is applicable for all commercial
EVSE. Both Development Services and Utilities interviewees reported the AC disconnect
requirement is a common source of error in both permit applications and installations.
♦ Customer-facing resources are not well organized or easily accessible – The City provides
extensive resources, guidelines, and checklists to support permit applications and inspections,
but some of the Utilities interviewees speculated that the extensive information may actually be
too much for customers to effectively take in. For example, the PV checklist outlines extensive
details on system requirements and installation guidelines in combination with permit
application requirements, which may make finding specific details more difficult. The
organization of these documents on the City website may make this information difficult to find.
One Utilities interview also noted that information and requirements for some processes, like
PV applications, are split between Development Services and Utilities websites, rather than
having everything in one unified location.
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6 Streamlining Recommendations
Building on the findings outlined above, TRC has identified the streamlining recommendations outlined
below. These recommendations respond directly to the challenges identified in the previous section,
and present opportunities to further streamline processes for electrification technologies overall.
The recommendations outlined below emphasize clear and effective communication both with
customers and between City departments, and on setting legible and achievable expectations for the
City and permit applicants.
The opportunities presented here acknowledge the City’s mandate to enforce adopted codes,
regulations and ordinances and should not be construed as an effort to limit or reduce that
enforcement. Many of the recommendations will also require additional resources, whether in staff
time or funding, to achieve the desired outcome.
Finally, these recommendations also recognize the responsibility of permit applicants to provide
complete and accurate application materials, and to comply with all relevant codes and regulations. The
recommendations outlined here are not a reduction or limitation to the applicant’s responsibilities.
Recommendations below are organized into three categories:
♦ Immediate priorities that directly respond to the challenges outlined above, and present the
greatest potential for resolving those challenges
♦ Medium-term priorities focused on improving processes more broadly, and that require greater
investment of time and resources
♦ Long-term priorities addressing structural issues that require support from other City bodies or
regional coordination
Figure 8 summarizes the recommendations in relation to the challenges identified in the previous
section, with section number references for detailed descriptions of each recommendation, below.
Figure 8: Streamlining Recommendations Summary
Challenge Identified (see section 5) Streamlining Recommendations
The COVID-19 pandemic has disrupted
typical Development Services
workflows, resulting in longer permit
application timelines
Immediate priorities:
(6.1.1) Adhere to stated plan review and corrections
timelines by identifying efficiencies in the process or
providing additional resources required to meet stated
timelines
(6.1.6) Consider opportunities for appointment-based one-
on-one phone or web meetings for challenging projects
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24 | TRC
Challenge Identified (see section 5) Streamlining Recommendations
Online permit application process
poses challenges for customers and
City staff
Immediate priorities:
(6.1.5) Explore opportunities to customize and simplify
online submittal and review processes such as limiting
formatting requirements and integrating submittal checklists
Development Services staff lack clear
guidance on plan review for new
electrification technologies
Medium-term priorities:
(6.2.1) Develop written plan review procedures for all
electrification project types, including strategies for common
combined project types (e.g. combined PV and ESS)
Permit applications frequently lack
required information or
documentation for Utility review
Immediate priorities:
(6.1.4) Improve coordination between Development Services
and Utilities, including fully engaging the Utility liaison to
ensure application materials are complete, and integrating
Utility checklists on Development Services website and OPS.
Excessive inspection practices, and
non-compliance with state PV
inspection mandates
Immediate priorities:
(6.1.2) Comply with state-mandated single inspection for PV
systems, and reduce the burden of electrical inspections by
limiting the scope of the inspection to what is accessible at
the time of inspection, and sampling
Medium-term priorities:
(6.2.5) Adopt all state-mandated expedited review
requirements
Requirements unique to Palo Alto
result in challenges and delays
Immediate priorities:
(6.1.3) Evaluate Palo Alto-specific requirements (see section
3.2), and eliminate requirements that exceed code or
ordinance requirements
Long-term priorities:
(6.3.2) Pursue regional coordination of review and
inspection procedures to provide greater consistency for
customers, and reduce application errors.
Customer-facing resources are not
well organized or easily accessible
Immediate priorities:
(6.1.7) Improve communications with customers and
contractors by consolidating information documents in a
more accessible location and including all Utility
requirements with Development Services documentation
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6.1 Immediate Priorities
6.1.1 Adhere to stated plan review and corrections timelines
Perhaps the highest priority for Development Services should be adherence to stated plan review and
corrections review timelines in order to better meet customer expectations. Development Services
should evaluate current plan review procedures, especially for PV, EV charging, and ESS projects (and
combinations of those systems), to identify potential efficiencies or opportunities to reduce timeframes.
Other potential opportunities to address timeframe challenges include:
♦ Change stated review timelines to business days, rather than calendar days, so that deadlines do
not fall on non-working days.
♦ Set specific timeframes and deadlines for each reviewer or review department (e.g., Utilities,
Fire, etc.) for each application. This may be an improvement that can be supported with updates
to the OPS (see section 6.1.5).
♦ Explore opportunities for multiple parties to review applications concurrently, rather than
sequentially, especially on application types that require multiple departments to review. This is
another area that could be enable through improvements to the OPS (6.1.5).
Because corrections were also frequently cited as a source of permit application delay, Development
Services should work to provide all required corrections in a single notice whenever possible, and
adhere to stated corrections review timelines employing the strategies outlined above.
Even after implementing the strategies listed above, due to the increased workload from online review
process, staff shortages due to the pandemic, and increased permit activity during the pandemic,
Development Services may still require more staff resources to meet stated plan review timelines.
If more staff resources are not available, Development Services could consider extending review
timelines to set customer expectations more accurately.
(Note that the recommendation to accelerate or prioritize review for certain project types was
considered, but was determined not to be a viable strategy because prioritizing some permit types only
creates further delay for other non-priority project types, and does not address the root causes of the
delays.)
6.1.2 Comply with state-mandated single inspection for PV, reduce burden
of electrical inspections
As noted above, contractors consistently reported that inspections for residential PV, EV charging, and
ESS were excessively detailed and onerous, and that PV inspections often required more than one visit,
contrary to the state mandates requiring a single inspection. Development Services should work to
comply with state-mandated inspection requirements, and limit the overall burden of electrical
inspections, potentially including the following strategies:
♦ Provide clear instruction to inspection staff that PV-only inspections must be completed in one
visit. Work with those staff as needed to develop a one-time inspection process that still meets
the rigor that inspection staff feel requires a multiple inspection process.
♦ Limit scope of inspections to what is visible and/or accessible at the time of inspection,
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♦ Test a sample of connections, rather than every connection.
♦ Develop or modify inspection protocols that are adaptable to systems combining PV, EV
charging, and/or ESS, and avoid overly prescriptive requirements that may contradict actual
conditions (as in the scenario described in section 5, above, where the inspection checklist
required a label for “dual power sources” but the installed system had three power sources:
utility, PV, and battery).
Because some customers noted that scheduling inspections by phone is a time-consuming process,
Development Services should more actively encourage customers to use the online inspection
scheduling tool. Potential strategies include providing notifications or reminders in the OPS at the time
of application, or with a pre-recorded message about the online scheduling option that can play when
customers are waiting on hold on the phone scheduling line.
6.1.3 Evaluate Palo Alto-specific requirements, and eliminate requirements
that exceed code or ordinance requirements
Development Services, Utilities, and any other relevant City departments should evaluate any
application and installation requirements for electrification projects that are unique to Palo Alto (as
outlined in section 3.3), and especially requirements such as the dedicated AC disconnect and additional
ground rod for PV projects, to determine whether these requirements are necessary.
Any requirements that are not directly supported by the building code, electrical code, local ordinance,
or state law should be eliminated. Permit submittal checklists and inspection checklists should be
updated to reflect such changes.
6.1.4 Improve coordination between Development Services and Utilities
Development Services and Utilities should work closely to address challenges and communication issues
related to applications that require Utility review. Development Services Project Coordinators should
fully utilize the Utility liaison at the Pre-Application stage on all applications that require Utility review to
ensure that all necessary documentation is available, and/or to identify any additional documentation or
information applicants need to provide.
Utilities and Development Services should work together to develop a work flow that enables more
effective collaboration at the early stages of permit applications. This may be another opportunity to
leverage improvements to OPS, such as automatically routing relevant electrification projects to the
Utility liaison, in addition to the Project Coordinator, for review at the Pre-Application stage.
Development Services should also integrate any Utility checklists for permit applications into the
Development Services website, and into the OPS platform.
6.1.5 Explore opportunities to customize and simplify online submittal and
review processes
Development Services should work closely with the OPS vendor to implement updates and revisions to
the online system to increase ease of use, and to provide more actionable information for applicants to
avoid errors and missing information in applications. Potential strategies include:
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♦ Evaluate the usefulness of plan set formatting and bookmarking requirements. Although
Development Services no longer requires applicants to include bookmarking in their PDF plan
sets, Development Services staff are now reviewing online permit applications internally for
proper file formats and have launched a pilot program to make corrections internally without
involving the applicant, only adding to staff workload. Staff is monitoring the volume to see if
internal corrections are sustainable or if additional resources are needed. Development Services
should eliminate any document formatting or bookmarking requirements that do not
measurably increase the efficiency of the plan review process. If formatting requirements are
deemed necessary, Development Services will need additional staff resources to complete
formatting revisions without sacrificing overall plan review timelines.
♦ Integrate permit application forms within the OPS system so that applicants do not have to
complete and upload permit applications as a separate supporting document.
♦ Integrate submittal checklists or project guidelines within OPS portal. Explore the potential for
providing dynamic checklists that automatically update based on type of permit application.
Consider options to generate an error message or prevent applicants from submitting the
application until all checklist items are confirmed, or require separate specific document
uploads for each checklist item, where applicable. Include any relevant utility checklists in the
OPS to ensure all necessary utility information is provided.
♦ Wherever possible eliminate requirements for applicants to enter duplicate information.
Contractors reported that the current system requires users to input basic information such as
project address or contact information when resubmitting corrections or adding documents to
existing applications. Wherever possible, auto-populate any relevant and available project
information (project address, contact information, project details, etc.) for all subsequent user
interactions with OPS.
♦ Establish timeframes, deadlines, and/or automated reminders for each reviewer for each
application within OPS to help keep applications on schedule.
♦ Allow multiple reviewers or departments to review concurrently within OPS, rather than
sequentially, to help keep applications on schedule.
6.1.6 Consider opportunities for appointment-based one-on-one phone or
web meetings for challenging projects
The inability to meet face-to-face has significantly disrupted the typical relationship between plan
reviewers and permit applicants. To help improve communications beyond what is possible over e-mail,
Development Services should consider implementing an appointment-based one-on-one phone or web
meeting process for challenging projects so that plan reviewers and applicants can discuss challenges
and potential solutions directly and more quickly.
6.1.7 Improve communications with customers and contractors
To reduce application and installation errors, and to set customer expectations more appropriately,
build on existing documentation to provide additional reference documentation, and improve the
organization of existing guidelines and checklists. Potential strategies include:
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♦ Consolidate customer-facing documents in a more accessible location and format. Consider
organizing all project checklists or submittal guidelines under a dedicated “Application Checklists
and Guidelines” heading.
♦ Work with Utilities to ensure that all checklists and guidelines for Utility review requirements
are posted on the Development Services website, and accessible at the initial permit application
stage.
♦ Pursue opportunities to integrate checklists into the OPS system, as noted above.
♦ Consider opportunities to provide abbreviated or more topic-focused reference documents. For
example, a one-page PV application checklist detailing submittal requirements may be more
relevant to an experience PV installer than details on system requirements.
♦ Consider opportunities to provide homeowner-facing reference documentation, explaining
electrification processes and potential roadblocks, especially pertaining to the potential need for
service panel upgrades and the associated unexpected costs that can entail.
6.2 Medium-term Priorities
6.2.1 Develop written plan check procedures for electrification project types
To address unfamiliarity with newer technologies, and to ensure that all plan reviewers are evaluating
applications consistently, Development Services should develop written plan review procedures and
protocols for any electrification measures that do not already have established processes. This is
especially relevant for ESS applications, and applications that combine PV, EV charging, and/or ESS. In
addition, Development Services and Utilities should proactively collaborate in anticipation of emerging
electrification technologies to develop written plan review and inspection procedures and protocols for
technologies such as Vehicle-to-Home (V2H) and Vehicle-to-Grid (V2G), as well as other technologies as
they emerge.
6.2.2 Actively track all electrification project types
To help inform priorities and strategies for streamlining electrification permitting and inspection
processes, Development Services should begin actively tracking all common electrification permit
applications (see Figure 2). Having data on permit application trends will give the City insights into
technology adoption trend, as well as the knowledge needed to adapt permitting and inspection
processes to better meet customer needs and prioritize strategies on the highest demand measures.
6.2.3 Track common application and inspection errors to support
Understanding where customers are most commonly making mistakes in permit applications and during
installation inspections can help agencies develop guidance on how to avoid those errors in the future.
As with the permit tracking above, having data on common application and inspection errors will give
Development Services and Utilities the knowledge needed to prioritize efforts for developing support
documentation to address those errors and better meet customer needs.
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6.2.4 Develop dedicated electrification permit applications or application
procedures
Development Services should develop specific standardized application materials, or dedicated line
items on standard application forms, for common electrification measures, especially in cases such as
heat pump water heaters that combine previously unrelated permit processes (in this case, water heater
replacement, and new electrical receptacle/circuit). Developing these specific application processes will
help customers provide the necessary information in the permit application and will help staff
accelerate the plan review process by more clearly indicating what the permit application is for and how
the application should be routed for review. Having the ability to indicate specific electrification
measures on the application form will also support the recommendations above for actively tracking
electrification permit types and common errors.
6.2.5 Adopt all state-mandated expedited review requirements
The State of California has legislated specific mandates for expedited review and preferential pricing on
certain electrification measures. These include expedited permit and inspection processes for residential
PV systems less than 10 kW (AB 2188, Gov. Code 65850.5), limits on permit fees for residential PV
systems (AB 1414, Gov. Code Section 66015), and expedited permit and inspection processes for
residential EV charging (AB 1236, Gov. Code Section 65850.7).
Palo Alto has adopted standard practices that meet the spirit of these requirements, though there are
some areas where the city has not fully complied. Specifically:
♦ According to the analysis by the Governor’s Office of Business and Economic Development, Palo
Alto has an EV permit checklist, but has not yet met the other requirements of AB 1236,
including limiting plan review to administrative approval of health and safety requirements only,
ensuring that EV charging applications are not subject to any homeowner association review or
approval, and providing all corrections in one complete deficiency notice. Note that AB 1236
instructs local jurisdictions to pass an ordinance guaranteeing these provisions, which would
require coordination with City Council.
♦ As noted above, AB 2188 limits residential PV projects to a single inspection, though Palo Alto
often requires multiple inspection visits for PV projects.
The mandates for expedited processes for PV and EV charging allow for flexibility by requiring each
permitting agency to develop a submission requirement checklist, and only mandating expedited
processing for the applications that meet all items on the agency’s checklist. As such, agencies can
ensure that the expedited processing fits their internal processes and does not compromise their ability
to confirm compliance with building and safety standards.
6.3 Long-term Priorities
6.3.1 Evaluate permit fee structures to provide fee-parity
As a strategy to encourage broader adoption of electrification measures, Palo Alto could review permit
and inspection fees to identify opportunities to establish parity in fees between electrification and
natural gas incumbents, or even provide reduced fee structures for electrification measures. Additional
Palo Alto Electrification Permit Streamlining Study | Baseline Assessment – Draft
30 | TRC
fees related to electrical service and potential service panel upgrade costs result in higher permit fees
for electrification measures, especially appliance and equipment retrofits, compared to natural gas
incumbents. This effort could also be employed as part of the development of dedicated permit
application materials.
However, because Palo Alto bases permit fees on a cost recovery model, where fees are determined
based on the cost to the jurisdiction for reviewing applications or conducting inspections, any effort to
reduce existing permit fees would require some form of subsidy, either through other permit fees or
another source of funding. One potential option to address this would be through increased permit fees
for natural gas measures, justified based on the greenhouse gas impacts of natural gas appliances, and
the City’s emissions reductions goals.
Other examples of approaches for streamlining permit fees include the following:
♦ Santa Clara County’s combined mechanical-electrical-plumbing permit application charges a flat
rate for up to three items (for example, a water heater replacement and the supporting
electrical work in the case of a heat pump water heater).
♦ In Mountain View permit fees for PV systems are ostensibly based on a percentage of the
project value, but the city caps the assessed value of residential PV projects at $1,000 to keep
permit fees low and encourage adoption.
6.3.2 Pursue regional coordination of review and inspection procedures
The most common concern from permitting agency customers is the variation in application processes
and requirements for electrification technologies across jurisdictions. For the many contractors who
work across multiple jurisdictions, learning new application procedures for each agency is a time-
consuming and costly process. This is especially true for Palo Alto, where certain project requirements
differ from most other jurisdictions in the region. To address and minimize these variations, and in
addition to evaluating current Palo Alto-specific requirements (see section 6.1.3), Palo Alto could
explore opportunities to work with neighboring jurisdictions and/or collaborate on a regional scale to
align permit application processes and plan review and inspection procedures, where feasible and with
the understanding that each jurisdiction will have unique requirements for permit and inspection
processes.
However, this is not something individual jurisdictions could pursue on their own, and would require
extensive coordination with neighboring permitting agencies, as well as other entities. Due to the level
of collaboration and coordination required, agencies could look to third-party entities, such as
community choice energy agencies, utilities, regional government collaborations, or professional
organizations to support and coordinate this effort.
This attachment describes the City’s work plan for streamlining permitting related to various energy technologies. The table in Section 1, below,
lists recommendations from the Palo Alto Permit Streamlining Study by TRC, as well as staff’s response to the recommendations and planned
action items.
Section 1: Staff Response to TRC Recommendations and Work Plan
Item TRC Recommendation Staff Response Action Items
Immediate Priorities
6.1.1 Adhere to stated plan review and
corrections timelines by identifying
efficiencies in the process or providing
additional resources required to meet
stated timelines
Staff is taking steps to ensure given
timelines are met.
Staff has also begun to review processes
to explore ways to reduce wait times
and provide a better customer
experience.
•Consider adding additional plan review
staff.
•Explore direct appointments with
applicants.
•Set Residential PV, EVCS, ESS and other
electrification projects as priorities,
with shorter review timelines.
•Clearly identify and relay total response
timeline to the customers.
•Department managers to measure and
monitor all aspects of the review
process.
6.1.2 Comply with state-mandated single
inspection for PV, reduce burden of
electrical inspections
Building Inspection only allows one
inspection at the completion of
residential stand-alone PV roof
mounted systems under 10kW. If the
inspection does not pass then
reinspections are required. Staff is also
working to have one single inspection
that coordinates across building, fire,
and utility inspectors on this type of
project.
•Inspection managers from Building,
Utilities and Fire are working to
coordinate inspection requests to
reduce contractor wait time.
Attachment B
Item TRC Recommendation Staff Response Action Items
6.1.3 Evaluate Palo Alto-specific requirements,
and eliminate requirements that exceed
code or ordinance requirements
Various departments will work to clarify
requirements for AC disconnects and
identify ways multiple disconnects end
up being required. Staff will also review
for other inspection requirements that
may not be adopted.
• Establish inter-departmental team to
review requirements and compare to
ordinance and code requirements.
• Develop clear checklists that bring
requirements into one location for ease
of customer use.
6.1.4 Improve coordination between
Development Services and Utilities
Development Services has already
begun the process to collaborate more
closely with the Electric Utilities
Department representative at the
Development Center.
• Project Coordinators shall have Utilities
Representative check for completeness
of all PV/ESS and EVCS for Utilities.
6.1.5 Explore opportunities to customize and
simplify online submittal and review
processes
Staff plans to roll out a new online
appointment system to assist customers
with online submittal and review in real
time to improve service and reduce
delays.
• The Utilities Department is to explore
optionsto reduce the number of
required forms (for example, PV/ESS
load sheet)
• Staff will work on creating a submittal
checklist that can be utilized at
application intake for the PV/EVCS/ESS
projects.
6.1.6 Consider opportunities for appointment-
based one-on-one phone or web meetings
for challenging projects
Staff in the process of creating the
opportunity for customers to book
virtual appointments to assist with
submittal and over the counter review.
• Create messaging on website to direct
customers on how to book an
appointment
• Set up trial run appointment time slots
in Outlook to assist customers.
• Explore options for appointment
booking software.
6.1.7 Improve communications with customers
and contractors
Staff agrees and will work with
departments to improve
communication.
• Reach out more frequently via phone
rather than relying solely on email
communication
Item TRC Recommendation Staff Response Action Items
Medium-Term Priorities
6.2.1 Develop written plan check procedures
for electrification project types
Staff sees benefits to creating a plan
review checklist for each type of review.
• Each department to develop a plan
review checklist for each type of
electrification project.
• Train staff to use checklist as a baseline
document to conduct the review.
6.2.2 Actively track all electrification project
types
Project Coordinators to take a more
active role on tracking the progress of
the electrification projects to make sure
we meet our establish review due dates.
• Strategize on an approach with
Development Services Permit Manager.
• Task project coordinators to track and
monitor projects.
6.2.3 Track common application and inspection
errors to support
Work with reviewing departments to
review typical plan review errors and
engage inspection staff to identify
comment in field inspection corrections.
• Publish on the City’s website common
plan check application corrections and
inspection corrections.
6.2.4 Develop dedicated electrification permit
applications or application procedures
Staff will take this recommendation
under consideration. The ideal
approach would be to integrate the
required information into the initial OPS
application intake screens.
• Staff to determine the requirements to
automate the OPS application in-take
platform.
• Management to determine if this
approach is feasible.
6.2.5 Adopt all state-mandated expedited
review requirements
Residential PV under 10KW Adopted by
City in 2015 under PAMC 16.63. Staff
will review other possible state-
mandated expedited requirements.
• Management to research all current
state mandates related to electrification
projects and identify any short falls.
• If short falls are identified, staff will
strategize a compliance path.
Long-Term Priorities
Item TRC Recommendation Staff Response Action Items
6.3.1 Evaluate permit fee structures to provide
fee-parity
Costs for permitting will be reviewed
during the current fee study. Fees will
not exceed state mandated limits.
Planning & Development services is
designed to be cost-recovery model.
• Identify lost revenue in current fee
study effort.
6.3.2 Pursue regional coordination of review
and inspection procedures
Staff will take this recommendation
under consideration, but it may require
additional resources.
• To be determined
City of Palo Alto (ID # 11788)
Utilities Advisory Commission Staff Report
Report Type: New Business Meeting Date: 4/7/2021
City of Palo Alto Page 1
Summary Title: FY20 Demand Side Management Report
Title: Discussion and Update on the FY20 Demand Side Management Report
From: City Manager
Lead Department: Utilities
Recommendation
This memo and the attached report present the achievements of Demand Side Management
(DSM) programs implemented by the City of Palo Alto Utilities (CPAU) during Fiscal Year (FY)
2020. This is for the Utility Advisory Commission’s information and no action is required.
Executive Summary
The FY 2020 DSM Annual Report provides updates on the achievements of CPAU’s electric,
natural gas, and water efficiency programs, as well as locally-sited solar photovoltaic (PV), solar
water heating program and sustainability-related programs.
CPAU fell short of its energy and water efficiency goals for FY 2020 given challenges launching
new programs and program impacts from shelter in place orders due to the Covid -19
pandemic. Despite achieving savings below targets, all three efficiency portfolios were cost -
effective. Staff is exploring ways to increase expenditures to increase savings, while still
maintaining cost-effective efficiency portfolios.
Background
As a municipal utility that delivers electric, gas and water services to customers in its service
territory, CPAU is subject to state laws that govern resource conservation and related
expenditures. Key legislation that affects CPAU includes:
Assembly Bill (AB) 1890 (1996) requires publicly owned electric utility (POUs) to establish a
public benefit charge of 2.85% of revenue to fund any or all of the following “public benefit”
programs:
•Cost-effective, DSM services to promote energy-efficiency and energy conservation.
•New investment in renewable energy resources and technologies consistent with
existing statutes and regulations that promote those resources and technologies.
Staff: Micah Babbitt
CITY OF
PALO
ALTO
City of Palo Alto Page 2
• Research, development, and demonstration programs in the public interest which
advance science, or a technology not being adequately provided for by competitive and
regulated markets.
• Services for low-income electricity customers such as targeted energy-efficiency
installations.
Senate Bill (SB) 1037 (2005) requires each POU, in procuring energy, to first acquire all available
energy efficiency and demand reduction resources that are cost -effective, reliable and feasible.
AB 2021 (2006), as amended by AB 2227 (2012), requires POUs to develop annual electric
efficiency targets over ten years based on all potentially achievable cost -effective energy
savings, update the goals every four years, and provide annual reports to their customers and
the California Energy Commission. City of Palo Alto adopted its first ten-year electric and gas
efficiency targets in 2007 and has since updated these goals in 2010, 2012, and 2017. Staff
presented the latest set of proposed electric efficiency goals to the Utilities Advisory
Commission on March 3 and will be bringing these goals to Council for adoption on May 3.
SB 1 (2006) requires all POUs to adopt, implement and finance a solar initiative program to
encourage the installation of residential and commercial solar energy systems.
AB 1470 (2007) requires each POU providing gas service to retail end -use gas customers to
adopt, implement and finance a solar water heating system incentive program.
SBx7-7 (2009) requires water suppliers to reduce the state average per capita daily water
consumption by 20% by December 31, 2020. This requirement is incorporated in the 2015
Urban Water Management Plan, adopted by California’s urban water suppliers including Palo
Alto.
SB 350 (2015) sets targets for utilities of 50% renewable electricity retail sales and double the
energy efficiency savings in electricity and natural gas, both by 2030. The law grants compliance
flexibility for publicly owned utilities that achieve 50% or more of retail sales from certain large
hydroelectric power.
Discussion
CPAU offers incentives and education programs for customers to encourage energy and water
efficiency, customer-owned renewable generation, and enrollment in voluntary renewable
energy programs. The table below summarizes the FY 2020 goals and achievements. As
shown, the achievements for energy and water efficiency fell short of the goals set for FY
2020 due to the pandemic.
City of Palo Alto Page 3
Table 1: Goals versus Achievements
Resource FY 2020 Savings
Goals (% of load)
FY 2020 Savings
Achieved (% of
load)
FY 2020 Savings Achieved
Electricity 0.80% 0.27% 2,305 MWh
Gas 1.10% 0.23% 61,203 therms
Water 0.91% 0.45% 21,144 CCF
Despite not meeting the efficiency savings goals, the portfolio of programs generated cost-
effective savings across all three utilities. More information on this can be found in the report.
CPAU developed a range of marketing campaigns in FY 2020 to promote gas, electric, and water
efficiency programs and increase public engagement. Promotional methods include community
outreach events, print ads in local publications, utility bill inserts, messaging on bills and
envelopes, website, email newsletters, videos for the web and local cable television channels,
and the use of social media (Twitter/Facebook/NextDoor/Videos).
The attached DSM Report provides details about CPAU’s FY 2020 DSM programs including costs
and resource savings by program and by end use, as well as information on sustainability
programs and customer satisfaction.
Stakeholder Engagement
CPAU receives input from different customer segments on its customer program offerings via
email, phone calls, public webinars, workshops, as well as customer surveys. Such customer
input plays an important role in shaping the composition and design of CPAU’s energy efficiency
and sustainability programs.
Environmental Review
The Demand Side Management Report is not subject to review under the California
Environmental Quality Act since receiving this report will have no foreseeabl e direct or indirect
physical change in the environment and therefore does not meet the definition of a Project
under Public Resources Code section 21065 and Title 14 Cal. Code Regs. section 15378(b)(5).
Attachments:
• Fiscal Year 2020 Demand Side Management Annual Report
• DSM FY20 UAC Presentation
Fiscal Year 2020 Demand Side Management Report
OVERVIEW:
The City of Palo Alto Utilities (CPAU) is the only city-owned utility in California that operates
its own utilities for electric, natural gas, water, fiber optic, storm drain, wastewater and refuse
services. We have been providing quality services to the citizens and businesses of Palo Alto
since 1896.
MISSION:
To provide safe, reliable, environmentally sustainable and cost-effective services.
STRATEGIC DIRECTION:
At CPAU, our people empower tomorrow’s ambitions while caring for today’s needs. We make
this possible with our outstanding professional workforce, leading through collaboration and
optimizing resources to ensure a sustainable and resilient Palo Alto.
PRIORITIES:
Workforce: We must create a vibrant and competitive environment that attracts, retains, and
invests in a skilled and engaged workforce.
Collaboration: We must collaborate with internal teams and external stakeholders to achieve
our shared objectives of enhanced communication, coordination, education, and delivery of
services.
Technology: We must invest in and utilize technology to enhance the customer experience
and maximize operational efficiency.
Financial Efficiency and Resource Optimization: We must manage our finances optimally and
use resources efficiently to meet our customers’ service priorities.
CITY OF
PALO ALTO
UTILITIES
Fiscal Year 2020 Demand Side Management Report
TABLE OF CONTENTS
EXECUTIVE SUMMARY ..................................................................................................................... 3
1 ELECTRIC EFFICIENCY ACHIEVEMENTS ..................................................................................... 5
2 GAS EFFICIENCY ACHIEVEMENTS ............................................................................................. 9
3 WATER EFFICIENCY PROGRAMS ............................................................................................. 13
4 SUSTAINABLE ENERGY PROGRAMS ....................................................................................... 16
5 CUSTOMER SATISFACTION .................................................................................................... 19
APPENDIX A: PROGRAM DESCRIPTIONS ......................................................................................... 22
APPENDIX B: FY 2020 ACHIEVEMENTS BY DSM PROGRAM ............................................................. 27
APPENDIX C: HISTORICAL DSM PROGRAM EXPENDITURES ............................................................. 30
APPENDIX D: CITY POLICIES/PLANS AND STATE MANDATES IMPACTING DSM PROGRAM GOALS AND
IMPLEMENTATION ........................................................................................................................ 31
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EXECUTIVE SUMMARY
This Demand Side Management (DSM) Report for Fiscal Year (FY) 2020 is a public document
summarizing the achievements of CPAU’s customer efficiency and sustainability programs. CPAU is
committed to supporting environmental sustainability through conservation of electric, gas and water
resources. Additionally, CPAU promotes distributed renewable generation, building electrification,
and electric vehicles using incentives and educational programs. CPAU accomplishes these goals by
delivering a wide range of customer programs and services as described in this report and strives to do
so while remaining in touch with customer needs.
ENERGY EFFICIENCY AND WATER CONSERVATION GOALS AND ACHIEVEMENTS
CPAU offers incentives and education programs for customers, to encourage energy and water
efficiency - Table ES.1 summarizes FY 2020 efficiency goals and achievements. The energy and water
efficiency savings achieved through the City’s energy reach code and green building ordinance are
included. FY 2020 represents the third year of increased energy savings targets1 established since SB
350 was enacted with the aim to double the energy efficiency savings in electricity and natural gas in
buildings by 2030. These goals will be replaced by new 10-year electric efficiency goals that will go into
effect in FY2022. CPAU fell short of its savings targets across electricity, gas, and water. There are many
factors that contributed to the decline in energy savings and below-target efficiency achievements,
including the suspension of many residential customer in-home services as well as programs such as
the Small Medium Business program as a result of Covid-19. In addition, there have been delays with
launching Home Energy and Water reports due to a combination of vendor challenges and internal
staffing constraints.
Table ES.1: Efficiency Goals versus Achievements
Resource FY 2020 Savings
Goals (% of load)
FY 2020 Savings
Achieved (% of
load)
FY 2020 Savings Achieved
Electricity 0.80% 0.27% 2,305 MWh
Gas 1.10% 0.23% 61,203 therms
Water 0.91% 0.45% 21,144 CCF
CPAU is committed by its own policies and State law to implementing all cost-effective energy and
water efficiency measures (i.e. those that are less expensive than supply-side resources). Table ES.2
summarizes the cost of efficiency over the last three years compared to the projected cost of supply
resources. The rolling 3-year average is a suitable metric to track the cost effectiveness of efficiency
portfolios, as it accounts for yearly variations in program engagement and funding. The current 3 -year
average cost for each efficiency portfolio is well below the cost of supply resources, demonstrating
the cost effectiveness of all efficiency portfolios. The gap between the portfolio-level cost of efficiency
1 Electric goals: https://www.cityofpaloalto.org/civicax/filebank/documents/56087; Gas goals:
https://www.cityofpaloalto.org/civicax/filebank/documents/56113
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and the cost of supply resources exists even while the portfolio supports high-touch programs such as
the Home Efficiency Genie, a customer service program that provides great educational value to Palo
Alto residents but delivers small energy efficiency savings. The gap also leaves room for increasing
customer incentives while maintaining overall portfolio cost effectiveness.
Table ES.2: Actual Levelized Efficiency Costs versus Projected Supply Costs
FY 2018
Efficiency
FY 2019
Efficiency
FY 2020
Efficiency
3-yr
average
Efficiency
Future
Supply
Electric $/kWh $0.03 $0.02 $0.06 $0.04 $0.10
Gas $/therm $0.56 $0.56 $0.45 $0.52 $0.61
Water $/CCF $4.71 $0.26 $2.67 $2.55 $6.02
CPAU is in the process of launching new programs and expects total program expenditures to increase
as a result.
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1 ELECTRIC EFFICIENCY ACHIEVEMENTS
1.1 Electric Efficiency Savings versus Goals
City Council approved CPAU’s first Ten-Year Energy Efficiency Portfolio Plan in April 2007,
which included a 10-year cumulative savings target of 3.5% of the forecasted energy use. As
mandated by California law, the electric efficiency targets have been periodically updated, with
the most recent 10-year cumulative savings goal set at 5.7% between 2018 and 2027. Statewide
building standards and appliance standards have become increasingly stringent, which shrinks
the efficiency savings potential that CPAU can pursue through customer incentive programs and
local reach code. With stricter codes and standards, higher efficiency goals and over 30 years of
running efficiency programs in Palo Alto (which has captured many of the easier opportunities,
such as lighting retrofits), staff needs to continue to innovate to maintain and increase efficiency
savings.
CPAU’s electric efficiency savings goals and achievements as a percentage of the City’s
electricity usage are shown in Table 1 below and cumulative net savings in Figure 1. In FY 2020,
on a net efficiency savings basis, CPAU delivered electric efficiency savings of 0.27% of its total
electricity sales through its customer efficiency programs.
Table 1: Electric Savings versus Goals
Year Annual Savings
Goal (% of load)
Savings Achieved
(% of load)
Savings Achieved
(MWh)
Goal Source
FY 2008 0.25% 0.44% 4,399 2007
FY 2009 0.28% 0.47% 4,668
FY 2010 0.31% 0.53% 5,270
FY 2011 0.60% 0.58% 5,497 2010
FY 2012 0.65% 1.31% 12,302
FY 2013 0.70% 0.85% 8,074
FY 2014 0.60% 0.86% 8,218 2012
FY 2015 0.60% 0.65% 6,063
FY 2016 0.60% 0.59% 5,530
FY 2017 0.60% 0.65% 5,986
FY 2018 0.75% 0.85% 7,6402 2017
FY 2019 0.75% 0.86% 7,633
FY 2020 0.80% 0.27% 2,305
2 Savings levels in FY 2018 and FY 2019 were previously stated using a lower net to gross ratio (NTGR) in the past two DSM
reports. Staff revisited the NTGR assumed in FY 2020 to align with the 10-Year EE Goals and has adjusted the prior years to
compare savings and goals on an apples to apples basis.
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Figure 1: Cumulative Net Electric Efficiency Savings ending FY 2020
This sharp decline in savings was attributed to approximately 25% less savings in the commercial
and industrial program year over year, roughly 50% less savings associated with the City’s
energy reach code due to increasing statewide building codes, delayed launch of the Small
Medium Business program and residential Home Energy reports, and significant portfolio-wide
impacts resulting from local shelter in place orders brought on by the Covid -19 pandemic. The
shelter in place orders stopped all on-site work in nearly all program areas for roughly one-third
of the fiscal year. These combined factors led to significantly fewer projects, fewer implemented
energy efficiency measures, and less overall energy savings in FY 2020 than CPAU has achieved
historically. The decline in savings from FY 2019 to FY 2020 is exacerbated by the completion of
a building new construction project that resulted in significant one -time savings.
1.2 FY 2020 Electric Efficiency Savings by End Use and Customer Segment
Non-residential customers account for approximately 80% of CPAU’s electric sales, and non-
residential efficiency program savings represent about 93% of CPAU’s total electric efficiency
savings, as shown in Figure 2. Non-residential HVAC and non-residential lighting accounted for
approximately 78% of the total electric portfolio savings.
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7 of 34
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Figure 2: Composition of Net Electric Efficiency Savings in FY 2020
The City of Palo Alto’s Energy Reach Code is a local requirement on building energy standards
that exceeds the state’s building energy standards (Title 24). In FY 2020, the Energy R each Code
accounted for 15% of the total electric efficiency savings. Effective April 1, 2020, Palo Alto
requires all low-rise residential new construction projects to be all-electric; commercial new
construction projects are encouraged to be all-electric. The adoption of this latest set of Energy
Reach Code is consistent with the City’s greenhouse gas (GHG) reduction goals.
Figure 3 shows the historical annual electric efficiency savings and annual electric
efficiency program expenditures.
Residential
Lighting
4%
Total Net Electric Savings by Sector and End Use
Residential All Other
■ Non Residential Local Reach Code
■ Non Residential HVAC
■ Non Residential Lighting
Residential Lighting
■ Residential All Other
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Figure 3: FY 2008 to FY 2020 Electric Efficiency Savings and Expenditures
Staff is developing and refining efficiency programs for the commercial and industrial (C&I)
customers and small and medium businesses (SMB). Staff is reviewing proposals from energy
efficiency service providers to continue and expand existing offerings under the C&I program.
In addition, staff is working with Gridpoint, an HVAC controls company to help small and
medium business in Palo Alto save energy and improve indoor air flow through smart control
systems. Finally, staff is working with a vendor to design and launch Home Energy Reports
that will be mailed to residential customers.
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FY 2020 Demand Side Management Annual Report
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2 GAS EFFICIENCY ACHIEVEMENTS
2.1 Gas Efficiency Savings versus Goals
In parallel with the development of ten-year electric goals, City Council adopted CPAU’s first
set of gas efficiency targets in 2007, which was a goal to reduce 10-year gas consumption by
3.5%. The most recent goal, set in 2017, was to achieve a 5.1% cumulative efficiency savings
between 2018 and 2027. Gas savings from heat-pump water heater rebate program are
included below.
CPAU’s gas efficiency savings goals and achievements as a percentage of sales are shown in
Table 2 and cumulative savings are shown in Figure 4. CPAU has continued to expand its gas
efficiency program portfolio in the past several years, with most gas savings delivered throu gh
third-party administered programs.
Table 2: Gas Savings versus Goals
Year Annual Savings
Goal (% of load)
Savings Achieved
(% of load)
Savings Achieved
(therms)
Goal Source
FY 2008 0.25% 0.11% 35,057 2007
FY 2009 0.28% 0.29% 146,028
FY 2010 0.32% 0.35% 107,993
FY 2011 0.40% 0.55% 164,640 2010
FY 2012 0.45% 0.74% 220,883
FY 2013 0.50% 1.13% 327,077
FY 2014 0.50% 1.20% 337,079 2012
FY 2015 0.50% 0.92% 229,373
FY 2016 0.55% 1.08% 289,442
FY 2017 0.55% 0.81% 228,707
FY 2018 1.00% 0.93% 264,960 2017
FY 2019 1.05% 0.57% 167,186
FY 2020 1.10% 0.23% 61,203
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Figure 4: Cumulative Natural Gas Efficiency Savings ending FY 2020
2.2 FY 2020 Gas Efficiency Savings by End Use and Customer Segment
Non-residential customers account for 51% of CPAU’s gas sales, and in FY 2020 non-residential
gas efficiency savings represented 68% of CPAU’s total gas savings, primarily from retro-
commissioning and upgrade of equipment such as boilers. Figure 5 shows the breakdown of gas
savings in FY 2020 by end use. The Home Efficiency Genie and the Multi Family Plus programs
educate customers on efficiency measures, such as improved insulation and duct sealing, which
further contribute to residential building envelope gas savings. Finally, the residential domestic
hot water savings are a result of the City’s heat pump water heater rebate program.
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Cumulative EE saving ending FY 2020 = 4.7%
Gas Sales
Gas Sales w/o EE
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Figure 5: Composition of Natural Gas Efficiency Savings in FY 2020
Figure 6 compares the historical annual gas efficiency savings and annual gas DSM
expenditures.
Total Gas Savings by Sector and End Use
Residential
Domestic Hot ----=,
Water
13%
Resldenti
ilding Env
■ Non Residential HVAC ■ Residential Building Envelope Residential Domestic Hot Water
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Figure 6: FY 2008 to FY 2020 Gas Efficiency Savings and Expenditures
Staff efforts to revamp the program offerings for C&I and SMB customers will also contribute to
gas efficiency savings. CPAU intends to contract with an energy efficiency vendor to continue
offering performance-based incentives for gas efficiency projects. In addition, staff is
establishing building electrification goals through the Sustainability and Climate Action Plan
(S/CAP) update and plans to increase new residential and commercial electrification rebates as
these goals are finalized. Staff expects Home Energy reports will generate significant gas
efficiency savings and is focused on launching these reports for residential customers.
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FY 2020 Demand Side Management Annual Report
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3 WATER EFFICIENCY PROGRAMS
3.1 Water Efficiency Savings versus Goals
CPAU’s water savings goals and achievements as a percentage of sales are shown in Table 3.
Table 3: Water Savings versus Goals
Year Annual Savings Goal
(% of load)
Savings Achieved
(% of load)
Savings Achieved
(CCF)
FY 2008 0.34% 0.72% 39,323
FY 2009 0.34% 0.98% 52,983
FY 2010 0.34% 1.35% 68,948
FY 2011 0.90% 0.47% 23,409
FY 2012 0.91% 1.09% 55,067
FY 2013 0.91% 0.53% 26,513
FY 2014 0.91% 0.64% 32,325
FY 2015 0.91% 1.54% 68,227
FY 2016 0.91% 1.96% 74,484
FY 2017 0.91% 1.40% 57,154
FY 2018 0.91% 0.47% 23,209
FY 2019 0.91% 3.04% 134,242
FY 2020 0.91% 0.45% 21,144
The City partners with the Santa Clara Valley Water District (Valley Water) to provide water
conservation programs. Valley Water administers the programs for Palo Alto customers, and
CPAU markets and promotes the programs. FY 2020 is the second year the City has claimed
savings associated with the City of Palo Alto’s Green Building Ordinance. Historically,
participants were not required to submit water savings data, but the City began collecting that
information at the end of FY 2018. While the City of Palo Alto’s Green Building Ordinance
contributed a significant amount of savings in FY2019 water efficiency due to some large
commercial projects, the FY 2020 savings levels have fallen dramatically.
3.2 FY 2020 Water Efficiency Savings by End Use and Customer Segment
The Green Building Ordinance accounted for nearly 71% of all water savings with the remaining
majority, 25% coming from the water programs administered by Valley Water. The Multi Family
Plus and Home Efficiency Genie programs also contribute very small amounts of water savings
from faucet and shower aerator measures. The bulk of the residential irrigation savings are a
result of landscape conversion projects administered by Valley Water. CPAU is looking for ways
to increase water savings by including water efficiency incentives in its commercial and
industrial energy efficiency program.
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Figure 7: Composition of Water Efficiency Savings in FY 2020
Residential
Total Water Savings by Sector and End Use
Res i dential Valley
Water Programs
25 %
Domestic H ot,===---.c -----::::ii-~ ..
Water '
3%
■ Non Residential Green Building Ordinance
■ Residential Domestic Hot Water
■ Residential Valley Water Programs
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Figure 8 compares the historical annual water efficiency savings and annual water DSM
expenditures.
Figure 8: FY 2008 to FY 2020 Water Efficiency Savings and Expenditures3
Water expenditures began rising in FY 2020 as staff is in the process of starting a Home Water
Reports program that will provide customers information on their water usage. This program is
expected to launch in 2021. In addition, staff has expanded the scope of the C&I energy
efficiency program to incorporate and expand incentives for water savings measures. CPAU
hopes this will further increase water savings from commercial and industrial customers in Palo
Alto.
3 Water savings increased substantially in FY2019 as a result of one large commercial retrofit project that implemented
many water savings measures as a result of the green building ordinance.
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4 SUSTAINABLE ENERGY PROGRAMS
4.1 Overview of Sustainable Energy Programs
CPAU offers a variety of programs to encourage residents and non-residents to improve the
environmental impacts associated with their gas and electric consumption. Customer -side
renewable generation programs are available to support the installation of both solar
photovoltaic (PV) and solar water heating (SWH) systems.
4.2 PV System Installation Achievements versus Goals
As of the end of FY 2020, there were a total of 1,168 PV installations (1,128 residential, 88 non-
residential, 6 CLEAN) since CPAU began supporting local solar PV installations in 1999. These
customer-side generation systems are not included in CPAU’s Renewable Portfolio Standard
(RPS) supply requirements. In FY 2018, the first PV system went live for the Clean Local Energy
Accessible Now (CLEAN) program, which purchases electricity from renewable energy
generation systems in CPAU’s service territory. The CLEAN program provides a Feed-In-Tariff
rate of $0.165/kwh for the first 3 MW of installed capacity. Nearly half of the capacity was
reserved in FY 2018 with the remaining capacity reserved in FY 2019.
In 1999 CPAU began offering incentives for PV system installations through the PV Partners
Program. In FY 2008 the PV rebate budget was increased as mandated by Senate Bill 1, and Palo
Alto’s share of the state-wide goal established by SB1 was 6.5 MW by 2017. On June 30, 2017
Palo Alto exceeded its share of the state-wide goal, with a total capacity of 8.6 MW, generating
about 1.5% of the City’s annual electric energy needs. The PV rebate funds were fully reserved
in August 2014 for residential projects and in April 2016 for commercial projects, but rebate
payments are expected to continue through FY2023 due to the five-year performance-based
incentive (PBI) schedule. Residents and commercial customers continue to install solar without
a rebate largely due to the continued decrease in solar installation costs, net metering and the
30% Federal Tax Credit.
Palo Alto also continues to participate in the SunShares program, which is a bulk buy program
of PV systems for the nine counties in the Bay Area.
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Figure 9: Photovoltaic (PV) Installations by Fiscal Year
Figure 10: PV System Capacity (kW) added by Fiscal Year
FY00
-07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
CLEAN 3 3 0
Res 176 112 43 52 44 49 49 103 93 131 84 77 64 51
Non-Res 9 5 9 2 2 4 3 10 9 5 7 8 12 3
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4.3 Solar Water Heating System Installation Achievements versus Goals
A total of 68 solar water heating (SWH) systems have been installed since CPAU began offering
SWH rebates to residential and commercial customers in 2008. The SWH rebate program was
mandated by AB 1470 (CY 2007) and was recently extended for two additional years by AB 797
(CY 2017). It is administered by the Center for Sustainable Energy (CSE), which also administers
SWH rebate programs in the San Diego area. As shown in Figure 9, the number of SWH systems
installed has been consistently below target, primarily due to low gas prices which reduce the
cost-effectiveness of SWH systems. Unlike PV systems, the cost for SWH systems has not
decreased over time. The SWH program was ended at the end of July 2020 as AB1470 was not
extended by any new legislation.
Figure 11: Customer-Side Solar Water Heating Systems—Program Achievements versus Goals
4.4 Additional Sustainability Programs
CPAU supports a variety of programs designed to promote sustainability and reduce carbon emissions
in Palo Alto. CPAU claimed energy and water savings achieved by Palo Alto’s building ener gy reach
code and green building ordinance. Staff launched the refrigerator recycling program using grant
funding from the Bay Area Air Quality Management District.
The Electric Vehicle Supply Equipment (EVSE) rebate focuses on “hard-to-reach” market segments for
EV chargers by targeting multifamily dwellings, nonprofits and schools. The program was launched in
late FY 2017 using funds from the Low Carbon Fuel Standard credit sales. In 2019, the City invested
additional staff time to expand the program by contracting with a third-party vendor to provide
prospective customers with technical assistance. The EV Technical Assistance Program launched in FY
2020. While no projects were completed, these projects take time to develop customer leads,
7 17 10 1 1 11 15 1 1 4 0 0
0%
25%
50%
75%
100%
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
Installed by Fiscal Year Installation Goal• □
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educate customers on their options, and ultimately design, permit, and install projects. Staff expects
to convert leads and projects started in FY 2020 into completed projects in FY 2021.
In addition to the self-administered EV Charging rebate program, CPAU partnered with the California
Energy Commission’s California Electric Vehicle Infrastructure Project (CALeVIP) to provide substantial
financial incentives to help cover the cost of installing new EV chargers. Other partners in this project
are Silicon Valley Clean Energy, Peninsula Clean Energy, San Jose Clean Energy, and Silicon Valley
Power. All Palo Alto commercial customers are eligible to participate in this opportunity which
launched in winter 2020.
In FY 2020 CPAU maintained its efforts to support building e lectrification and make progress towards
achieving the City’s S/CAP goals by promoting the Heat Pump Water Heater rebate program, however
the program continues to have relatively low participation . Both EV charging rebates and the Heat
Pump Water Program remained a high priority for staff in FY 2020, reflecting the ongoing community
priority of reducing CO2 emissions.
During FY 2020, the City set up a Local Decarbonization Reserve with an allocation of up to $1 million
per year of funding from revenues generated by sales of the electric utility’s Cap and Trade
allowances. This funding will be used to expand local building decarbonization programs. In the
meantime, CPAU continued purchasing carbon offsets to offset the emissions of the entire natural gas
portfolio.
The state-mandated solar water heating program is not cost-effective; CPAU offers the program but
does not actively promote it. Given the lack of promotion and the low natural gas prices, installed
solar water heating systems continue to fall short of the goal. This program closed at the end of July
2020, as the state mandate ended.
5 CUSTOMER SATISFACTION
Supporting the community is at the heart of CPAU’s mission. In addition to customer incentives to
promote efficiency measures, CPAU offers programs and services that are intended to educate
customers or to increase customer satisfaction. In FY 2020, Palo Alto hosted an educational workshop
for the SunShares program – a solar group-buy program for the nine counties comprising the Bay
Area. Once again Palo Alto was the number one outreach partner with the highest number of
systems and solar capacity (kWs) installed.
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Table ES.3: Customer Engagement Programs
Community Engagement Program # of Attendees
Net Promoter Score /
Avg. Survey
Response4
Water Workshops 135 workshop
attendees Excellent
SunShares Solar GroupBuy Workshop 36 workshop attendees Excellent
Home Efficiency Genie 36 in-home
assessments 9.64 / 10
Electrification Expo 263 expo attendees Excellent
The Commercial and Industrial Energy Efficiency Program is the flagship of CPAU’s commercial
portfolio. With three engineering firms working closely with CPAU Key Account Representatives, this
program provides the bulk of Palo Alto’s energy savings. The engineering firms assist customers with
audits, engineering studies, vendor selection, rebate processing and post-installation inspection
making the process as easy as possible for the customer. Approximately 65% of the gross energy
savings resulted from this program. CPAU mirrored this program design into the residential market
with the Home Efficiency Genie as “Your Trusted Energy Advisor” and has maintained strong
engagement and satisfaction with residents.
4 Qualitative survey options consist of Excellent, Good, Fair, and Poor, while Net Promoter Score is out of 10.
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APPENDIX A: PROGRAM DESCRIPTIONS
The programs offered by CPAU are designed to assist all customer groups achieve efficiency savings in
electricity, natural gas and water in a cost-effective manner. Please see Appendix B for the savings totals
associated with each program.
RESIDENTIAL PROGRAMS
• Home Efficiency Genie
The Home Efficiency Genie (HEG) has become CPAU’s flagship residential program. Launched in
June 2015, the program enables our residents to call the ‘Genie’ to get free utility bill reviews
and phone consultations. For a fee, residents also have the option to receive an in-depth home
efficiency assessment which includes air leakage testing, duct inspections, insulation analysis,
energy modeling and a one-on-one review of assessment reports with an energy expert. This
package is also followed up with guidance and support throughout home improvement projects.
The HEG program has a high educational component for Palo Alto residents, which likely leads to
additional savings that staff cannot track and include in this program’s savings totals . The Genie
also tables at various events throughout the year. In FY 2020, the Genie continued to be the
gateway to all of CPAU’s residential programs.
• Educational Programs and Workshops
A variety of educational programs and workshops are held throughout the year. Typically,
residential workshops on water and energy programs occur in the spring near E arth Day and in
the “Summer Workshop Series.” Many workshops focus on water efficiency, landscaping, energy
efficiency, solar, home comfort and green building. CPAU is also invited to table at various events
throughout the year to educate residents about the various programs we offer. Customers also
receive timely E-newsletters on a variety of efficiency matters.
• MultiFamily Residence Plus+ Program
This first-ever CPAU program focusing on multifamily buildings provides free, direct installation
of energy efficiency measures to multifamily residences with 4 or more units including hospices,
care centers, rehab facilities and select small and medium commercial properties. In its first year
the program focused on energy-efficient lighting and insulation upgrades. In the summer of 2016,
the program was revamped to include more LED lighting upgrades as the price of LEDs had
decreased and the quality of the lights improved greatly. The addition of LEDs drew excitement
from many property managers and building owners who were initially not interested in
participating in the program. As a result, CPAU will continue to re-evaluate the program to
accommodate this underserved market. Staff expects energy savings to remain high for this
program, with a focus on upgrading below-market-rate apartment complexes.
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• Residential Energy Assistance Program (REAP)
REAP provides weatherization and equipment replacement services at no cost to low-income
residents and those with certain medical conditions. This program has equal focus on efficiency
and comfort, and therefore it is not included in the cost effectiveness calculation used in
reporting. The program provides LED lighting, heating system upgrades, insulation for walls and
roofs and weather-stripping for doors and windows.
• Do-It-Yourself Water-Wise Indoor Survey
Palo Alto residents can request a free indoor wate r survey kit that can help conserve water and
save money on utility bills. Residents also become educated on opportunities for conservation in
their homes, and they can request free tools to improve efficiency. The program is offered in
partnership with the Valley Water.
• Free Water-Wise Outdoor Survey
Palo Alto residents can schedule a free outdoor survey with a trained irrigation professional. The
trained specialist will provide an on-site evaluation of the resident’s irrigation system and provide
recommended upgrades and repairs. The program is offered in partnership with the Valley
Water.
• Landscape Rebate Program (LRP)
The Landscape Rebate Program provides rebates for various irrigation hardware upgrades,
including rain sensors, high-efficiency nozzles, dedicated landscape meters, and weather-based
irrigation controllers, as well as landscape conversion rebates that encourage residential and
commercial customers to replace high-water-use landscaping with low-water-use landscaping.
During FY 2016 residents were eligible to receive rebates of $3.00/square foot ($2.00 from Valley
Water and $1.00 from CPAU). A new agreement with Valley Water was signed in early 2017,
continuing our partnership in the LRP. Residents are now eligible to receive rebates of $2/square
foot of replaced landscaping ($1.00 from Valley Water and $1.00 from CPAU).
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BUSINESS PROGRAMS
• Commercial Advantage Program
Business customers are offered rebates for investments in a catalog of energy efficiency products
including lighting, motors, HVAC, and custom projects that target peak demand and energy
reductions.
• Commercial and Industrial Energy Efficiency Program (CIEEP)
This is the fourth year that CPAU expanded this program to offer Key Accounts (the largest
commercial energy users in Palo Alto) the option of picking one of three engineering consulting
firms to assist in helping them evaluate and implement energy efficiency projects. Designed for
the large commercial customer, CIEEP offered highly effective building commissioning services
using third-party contractors Enovity, Ecology Action and BASE. The contracts were extended in
June 2018 for two additional years. This assistance included reviewing lighting and
heating/cooling systems and their operating specifications. Customers then obtained rebates for
replacing chillers, building control systems, linear fluorescent lighting, occupancy sensors, boiler s
and insulation.
• Empower SMB
This program ended in FY2018 and was being revamped to launch in FY2020. However, due to
the pandemic, Lime Energy, CPAU’s third party implementer for this program, has withdrawn key
staff and resources from Palo Alto’s service territory. As such, staff has been looking for creative
ways to restart this program.
• Commercial and Industrial Water Efficienc y Program
CPAU partners with the Valley Water to provide non-residential customers with free landscape
irrigation audits, and direct installation of high-efficiency toilets and urinals. Rebates are available
for facility process improvements, landscape conversions, irrigation hardware upgrades and
weather-based irrigation controllers.
• Landscape Survey and Water Budget Program
Through Valley Water, the City provides landscape irrigation surveys, water budgets and
customized consumption reports for customers with large landscape sites. The service is
provided by Waterfluence. The water budget for each landscape site is derived based on the
amount of irrigated area, type of plants, type of irrigation system and real-time weather
monitoring. Monthly reports documenting a site’s irrigation performance are distributed to site
managers, landscapers, HOA board members and other relevant parties, as approved by utility
account holders. Through a web portal, customers can access site-specific recommendations,
verify water budget assumptions and request a free landscape field survey from an irrigation
expert. This program has been in place since 2012 and to date there are 118 large landscape sites
covered under this program.
• PaloAltoGreen
This highly successful program enabled residents and businesses to pay a small premium for
100% renewable energy. In June 2014, Council terminated PaloAltoGreen for residential
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customers since the City’s electric supplies are 100% carbon neutral. Commercial customers can
still participate in this program by enrolling in the PaloAltoGreen 100% option or by purchasing
blocks in 1,000 kWh increments. Participation enables commercial customers to be recognized
under the U.S. EPA Green Power Leadership program or to earn Leadership in Energy and
Environmental Design (LEED) Green Power credits.
• Palo Alto Clean Local Energy Accessible Now (CLEAN) Program
Through the CLEAN (Clean Local Energy Accessible Now) program CPAU offers a feed-in tariff,
wherein developers of renewable energy generation projects in Palo Alto can receive a long-term
purchase agreement for the output of their projects. All the generated electricity is procured to
contribute towards fulfilling Palo Alto’s Renewable Portfolio Standard (RPS) requirement. For
fiscal year 2018, the prices are 16.5 ¢/kWh fixed for 15, 20 or 25 years for solar renewable energy
resources, up to a capacity limit of 3 MW (and 8.8 ¢/kWh for a 15-year contract term, 8.9 ¢/kWh
for a 20-year contract term or 9.1 ¢/kWh for a 25-year contract term beyond that limit), and 8.3
¢/kWh for a 15-year contract term, 8.4 ¢/kWh for a 20-year contract term and 8.5 ¢/kWh for a
25-year contract term for non-solar eligible renewable energy resources. At the end of FY 2019,
3MW were reserved of the program’s 3 MW limit.
• EV Charger Rebate Program
The California Air Resources Board (CARB) developed the Low Carbon Fuel Standard (LCFS)
program in compliance with AB 32 (the Global Warming Solutions Act of 2006) to reduce the
carbon intensity of transportation fuels used in California 10% by 2020. Elect ric utilities that
provide electricity to charge electric vehicles (EVs) are eligible to receive LCFS credits. The City
began participating in the program in April 2014 and CARB has been allocating LCFS credits to the
City since then. Using funds from the sale of LCFS credits, CPAU launched an EV charger rebate
program in FY 2017 to help build out EV infrastructure in anticipation of an increase in the
number of EVs in Palo Alto from its current level of 2,500 to between 4,000 and 6,000 EVs by
2020. Staff determined that providing EVSE rebates for underserved segments of the market
would be valuable, which would include multi-family and mixed-use buildings, schools and non-
profits. The LCFS funds are also used for EV education and outreach efforts.
PROGRAMS FOR ALL CUSTOMER SEGMENTS
• PV Partners
CPAU has offered incentives for local solar photovoltaic (PV) installations since 1999, and the
City increased the PV rebate budget in 2007 as mandated by CA SB1. Residential rebates were
fully reserved in August 2014, and funds for non-residential PV systems were reserved in April
2016. This program is for systems interconnected behind the customer’s electric meter , and
customers receive net metering billing as required by SB1.
• Solar Water Heating
CPAU began to offer rebates to residential and commercial customers that install solar water
heating (SWH) systems in 2008. The SWH rebate program was mandated by CA AB 1470 and is
administered by the Center for Sustainable Energy, which also administers SWH rebate programs
in the San Diego area. Incentives are limited to solar water heating for domestic use; solar water
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heating systems for pools, spas, or space heat are not eligible. AB 797 (2017) extended the SWH
mandate for two additional years, but the program expired by its own terms on January 1, 2021.
• Green Building Ordinance
In December 2019, City Council adopted an Energy Reach Code which requires additional energy
efficiency savings beyond California’s Title 24 building energy standards for non -residential
mixed-fuel new construction projects. The City’s Energy Reach Code has been in place since 2008
and has continued to evolve with California’s building standards (Title 24 ). As a reach code
specific to only the City of Palo Alto, energy savings from this code are savings that may be
counted towards energy efficiency. CPAU is coordinating with Development Services to report
the energy savings attributed to the Green Building Ordinance. CPAU is currently investigating
ways to educate, assist and encourage customers to adopt green building principles and energy
efficient systems when planning remodeling or new construction projects.
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APPENDIX B: FY 2020 ACHIEVEMENTS BY DSM PROGRAM
Table B.1: FY 2020 Achievements by Efficiency Program
Sector / Program
Gross
Annual
Savings
(kWh)
Net Annual
Savings
(kWh)
Annual
Savings
(Therms)
Water
Savings
(CCF)
Non Residential
2,522,609
2,144,218
41,656
15,135
Commercial Advantage Program
346,453
294,485
Commercial and Industrial Energy
Efficiency Program
1,769,019
1,503,666
41,656
Energy Reach Code/Green Building
Ordinance
407,137
346,066
-
15,135
Small and Medium Business
-
-
Residential
175,883
150,902
19,547
6,009
Energy Reach Code/Green Building
Ordinance
208
177
97
166
Home Efficiency Genie
29,132
24,762
10,307
575
Home Energy Reports
-
-
Home Water Reports
-
-
Heat Pump Water Heater
(11,193)
(9,514)
1,833
Multi Family Plus
114,151
97,028
6,454
Residential Energy Assistance Program
9,342
9,342
856
Refrigerator Recycling
34,243
29,107
-
Water Programs
-
5,268
Water Waste
Grand Total
2,698,492
2,295,119
61,203
21,144
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Table B.2: FY 2020 Achievements by CPAU’s Solar Programs
Program Number of
Installations
Electricity
kW Saved
kWh/yr %
PV - Residential 51 293 468,000 18%
PV – Commercial (w/ CLEAN) 3 1,330 2,128,000 82%
Solar Water Heating - Single
Family Residential 0 - - -
Solar Water Heating - Multi-
Family Residential Low-Income 0 - - -
Solar Water Heating -
Commercial 0 - - -
Solar Programs Total 54 1,623 2,596,800 100%
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Table B.3: FY 2020 Expenditures by Program and Utility
Sector/Program
Electric Program
Costs
Gas Program
Costs
Water Program
Costs
All $ 288,318 $ 96,744 $ 26,543
Portfolio Admin $ 288,318 $ 95,870 $ 26,543
Solar Water Heating $ - $ 873 $ -
Non Residential $ 1,066,222 $ 163,253 $ 7,931
Commercial Advantage Program $ 48,449 $ 4,644 $ -
Commercial and Industrial
Energy Efficiency Program $ 502,000 $ 128,320 $ -
Commercial Admin $ 44,505 $ 22,637 $ 5,852
Green Building Ordinance $ 16,638 $ 2,080 $ 2,080
Small and Medium Business $ 22,289 $ 5,572 $ -
Solar Performance Based Incentive $ 432,341 $ - $ -
Residential $ 623,304 $ 258,050 $ 216,406
Green Building Ordinance $ - $ - $ -
Home Efficiency Genie $ 88,429 $ 105,776 $ -
Home Energy Reports $ 51,381 $ 40,358 $ -
Home Water Reports $ - $ - $ 63,242
Heat Pump Water Heater $ 61,925 $ - $ -
Multi Family Plus $ 94,935 $ 34,945 $ -
Residential Energy Assistance
Program $ 43,043 $ 31,031 $ -
Refrigerator Recycling $ 49,653 $ - $ -
Residential Admin $ 99,540 $ 45,941 $ 13,905
Solar PV $ 134,399 $ - $ -
Water Programs $ - $ - $ 110,963
Water Waste $ - $ - $ 28,296
Grand Total $ 1,977,844 $ 518,046 $ 250,880
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APPENDIX C: HISTORICAL DSM PROGRAM EXPENDITURES
The chart below shows expenditures by type from FY 2012 through FY 2020. The Solar Renewables
category is the sum of expenditures for solar water heating and PV Partners programs.
Figure C.1 DSM Expenditures for Electricity, Gas and Water by Year and Function
$0 $1 $2 $3 $4 $5 $6 $7
2012
2013
2014
2015
2016
2017
2018
2019
2020
Millions
Fi
s
c
a
l
Y
e
a
r
Electric Efficiency Gas Efficiency
Water Efficiency Solar Renewables
■
■
I I
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APPENDIX D: CITY POLICIES/PLANS AND STATE MANDATES
IMPACTING DSM PROGRAM GOALS AND IMPLEMENTATION
CITY POLICIES/PLANS
Title Description
Resolution No. 9241 LEAP, the Long-term Electric Acquisition Plan (April 2012)
Resolution No. 9322 Carbon Neutral Plan for Electric Supply (March 2013)
Resolution No. 9402 Local Solar Plan (April 2014)
Staff Report 3706 Program for Emerging Technology (April 2013)
Staff Report 2552 GULP, the Gas Utility Long-term Plan (April 2012)
Staff Report 6851 2015 Urban Water Management Plan (May 2016)
Staff Report 7304 Sustainability and Climate Action Plan (November 2016)
Staff Report 7718 Update of Ten-Year Energy Efficiency Goals for 2018 to 2027 (March
2017)
Staff Report 9761 2018 Electric Integrated Resource Plan (EIRP)
Staff Report 11789 Updated 10 Year Energy Efficiency Goals for 2022 to 2031
FULL LIST OF STAFF REPORTS
• CY 2015: cityofpaloalto.org/gov/agendas/city_managers_reports/2015.asp
• CY 2016: cityofpaloalto.org/gov/agendas/city_managers_reports/2016.asp
• CY 2017: cityofpaloalto.org/gov/agendas/city_managers_reports/2017.asp
• CY 2018: cityofpaloalto.org/gov/agendas/city_managers_reports/2018.asp
• CY 2019: cityofpaloalto.org/gov/agendas/city_managers_reports/2019.asp
STATE MANDATES
AB 797 (2017) Extends existing Solar Water Heating Programs and changes the terminology of
“water heating” to “solar thermal.”
AB 802 (2015) Requires utilities to maintain records of the energy usage data of all buildings to
which they provide service for at least the most recent 12-month period and, upon
the request and authorization of the owner (or owner's agent), provide aggregated
energy usage data to the owner in the ENERGY STAR Portfolio Manager.
AB 1164 (2015) Prohibits cities and counties from enacting or enforcing any ordinance or regulation
prohibiting the installation of drought tolerant landscaping, synthetic grass, or
artificial turf on residential property.
AB 1236 (2015) Obliges cities and counties to adopt an ordinance, with certain specific elements,
creating an expedited permitting process for electric vehicle charging stations. For a
city the size of Palo Alto, the ordinance must be passed by September 30, 2017 . The
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adopted ordinance passed 9-0 on June 27th, 2017:
http://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?BlobID=59416
SB 350 (2015) The Clean Energy and Pollution Reduction Act of 2015 sets targets for utilities of 50%
renewable electricity retail sales and double the energy efficiency savings in
electricity and natural gas, both by 2030. The law grants compliance flexibility for
POUs that achieve 50% or more of retail sales from certain large hydroelectric power.
AB 2188 (2014) Requires a city and/or county to adopt an ordinance creating an expedited,
streamlined permitting process for small residential rooftop solar energy systems.
Executive Order Due to continued water shortages, on January 17, 2014, the Governor proclaimed a
State of Emergency and directed state officials to take all necessary actions to make
water immediately available. Part of the proclamation included a 20 perc ent water
reduction goal. On April 1, 2015, the Governor issued an Executive Order (B-36-15)
mandating the State Water Resource Control Board impose restrictions leading to a
25 percent reduction in potable water use through February 28, 2016.
SB 1420 (2014) Added a requirement to report on distribution system water loss to the UWMP.
AB 2227 (2012) AB 2227 changed the triennial energy efficiency target-setting schedule to a
quadrennial schedule, beginning March 15, 2013 and every fourth year thereafter.
The last EE goals update was due to be submitted to the California Energy
Commission by March 15, 2017. The next EE goals update will need to be submitted
by March 15, 2021.
AB 2514 (2010) Mandates a local publicly owned electric utility to determine appropriate targets, if
any, for the utility to procure viable and cost-effective energy storage systems and
to adopt an energy storage system procurement target, if appropriate, to be
achieved by the utility by December 31, 2016, and a second target to be achieved by
December 31, 2021.
SBx7-7 (2009)
Senate Bill x7-7 (SBx7-7), adopted in November 2009, mandates a statewide per
capita potable water use reduction of 20% by the year 2020. Urban water suppliers
are required to identify a baseline usage (expressed in gallons per capita per day, or
GPCD) for their service area, calculate a target to meet the 20% reduction, and report
on compliance in the 2020 UWMP. The City’s 2020 UWMP confirms the City met the
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conservation target by more than 20%.
"Making Conservation a California Way of Life" is the new generation legislation for
water conservation. The targets under SBx7-7 were pretty easy to meet especially
given the drought and the water use reductions that resulted. The new targets will
include and indoor residential per capita use, outdoor residential use, water loss,
and some C&I audit requirements. That is all currently under development.
AB 1103 (2007) Requires electric and gas utilities maintain records of the energy consumption data
of all nonresidential buildings to which they provide service and that by January 1,
2009, upon authorization of a nonresidential building owner or operator, an electric
or gas utility shall upload all of the energy consumption data for the specified
building to the EPA Energy Star Portfolio Manager in a manner that preserves the
confidentiality of the customer. This statute further requires a nonresidential
building owner or operator disclose Energy Star Portfolio Manager benchmarking
data and ratings, for the most recent 12-month period, to a prospective buyer,
lessee, or lender. Enforcement of the latter requirement began on January 1, 2014.
AB 1470 (2007) Solar Water Heating and Efficiency Act of 2007. Requires the governing body of
each publicly owned utility providing gas service to retail end-use gas customers,
to adopt, implement, and finance a solar water heating system incentive program.
SB 1 (2006) The California State Legislature enacted SB 1 to encourage the installation of 3,000
megawatts (MW) of photovoltaic (PV) solar energy by the year 2017. SB 1
requires all publicly owned utilities to adopt, finance and implement a solar initiative
2500 ..---------------------------------...-7,500,000
2400
230 O 7,000,000
220 0 6,500,000
2100
200 0 6,000,000
1900 1800 _____________________ ....., _____ ....... _____ ""'5.500,000
170 0 5 000,000
160.0
150 0 4.500,000 ~
•400 ~
810.0 4,000,000 ';;
n. !00 !S
C., 10.0 3,500,000 it;
1,i
100.0 3,000,000 3:
~ ~ ~ ~OOOf
70 .0
60 .0
50 .0
4-00
30 0
20 0
10 0
2,00 0,000
1.500,000
1 000,000
500,000
00 +--~--~------~---------~---------~-+ 0
~~"'\°',ft,.#'" .I'" .#'.!'._ii> ~,s, #'#'-I'#' .f' .f/1 .f #' ,,f ~~~, .... ,f>.(l,,&,,.,,l),~-l',&~,I)~ ,f),$,,1)~ -&-&
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FY 2020 Demand Side Management Annual Report
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program for the purpose of investing in and encourage the increased installation of
residential and commercial solar energy systems. CPAU’s share of the state goal is
6.5 MW. In 2007, CPAU increased the PV Partners program funding to meet SB1
requirements. CPAU has fully reserved all rebate funds as of April 2016.
AB 2021 (2006) Requires the CEC on or before November 1, 2007, and every 3 years thereafter, in
consultation with the commission and local publicly owned electric utilities, to
develop a statewide estimate of all potentially achievable cost-effective electricity
and natural gas efficiency savings and establish statewide annual targets for energy
efficiency savings and demand reduction over 10 years.
AB 1881 (2006) Requires cities and counties to implement a Water Efficient Landscape Ordinance
which is “at least as effective as” the Department of Water Resources (DWR) Model
Ordinance in reducing landscape water use. Requirements include enforcing water
budgets, planting and irrigation system specifications to meet efficiency criteria.
SB 1037 (2005) Requires each local publicly owned electric utility, in procuring energy, to first
acquire all available energy efficiency and demand reduction resources that are cost-
effective, reliable, and feasible. Also requires each local publicly owned electric
utility to report annually to its customers and to the (CEC) its investment on energy
efficiency and demand reduction programs.
AB 1890 (1996) Requires electric utilities to fund low-income ratepayer assistance programs, public
purpose programs for public goods research, development and demonstration,
demand- side management and renewable electric generation technologies
AB 797 (1983) The Urban Water Management Planning Act (AB 797) requires all California urban
water retailers supplying more than 3,000 acre feet per year or providing water
to more than 3,000 customers to develop an UWMP. The plan is required to be
updated every five years and submitted to the Department of Water Resources
before December 31 on years ending in 5 and 0.
Demand Side Management FY2020 Results
July 1 2019 –June 30 2020
April 7, 2021 www.cityofpaloalto.org
~--. ;~-~
~·\h .· ~: -
CITY OF
PALO ALTO
TITLE 40 FONT BOLD
Subtitle 32 font
www.cityofpaloalto.org
Agenda
•Portfolio Goals vs. Achievements
•Actual Levelized Cost of Efficiency vs. Projected Supply Costs
•Historical Electric, Gas, Water Goals, Savings, and Expenditures
•Customer Satisfaction and Sustainability Program Results
•Historical Demand Side Management Expenditures
/~~ CITY OF l·~ PALO ALTO -
3
Ef ficiency Goals vs. Achievements
Resource FY 2020 Savings
Goals (% of load)
FY 2020 Savings
Achieved (% of
load)
FY 2020 Savings Achieved
Electricity 0.80%0.27%2,305 MWh
Gas 1.10%0.23%61,203 therms
Water 0.91%0.45%21,144 CCF
(• CITY OF
1')PALO ALTO
FY2020 Highlights
•Commercial & Industrial Energy Efficiency provided 65% of
electric savings
•Maintained cost-effective portfolios despite decreasing energy
and water savings
4
Levelized Efficiency Costs vs. Project Supply Costs
FY 2018
Efficiency
FY 2019
Efficiency
FY 2020
Efficiency
3-yr average
Efficiency Future Supply
Electric $/kWh $0.03 $0.02 $0.06 $0.04 $0.10
Gas $/therm $0.56 $0.56 $0.45 $0.52 $0.61
Water $/CCF $4.71 $0.26 $2.67 $2.55 $6.02
(• CITY OF
1')PALO ALTO
5
Electric Goals, Savings, and Expenditures
(• CITY OF
~)PALO ALTO
,,
.2
0
?t.
II)
IU
II)
~ ·s
IU
II)
IJ.J
IJ.J
t z ,,
~ -~ .c u ct
2.0%
Completed a significant EE project fo r a
commercia l customer
5,000
1 .6% ···-··································· .................................... ············-··············· ....................................................................................................................... 4,000
............................................. .......................................................... 3,000
0 .8"/o ....................................... . 2,000
0 .4% .... 1,000
0.0%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
-Electric Effi ci ency Program Expend itu res
Electric Savings Goal as % of Load
.,_Net Savings Ach ieved as % of Load
II) ,,
C
IU
II)
6 .c
I-
6
Electric Savings by End Use and Sector
(• CITY OF
~)PALO ALTO
Re side ntial
Light in g
4%
Total Net Electric Savings by Sector and End Use
Reside ntial All Othe r
Non Residential
HVAC
41%
■ Non Residential Local Reach Code
I Non Residential HVAC
■ Non Residential Lighting
Residential Lighting
■ Residential All Other
Gas Goals, Savings, and Expenditures
7
1.5%
"C re,
0
-'
0
* 1.2%
"' re,
"' !ID
C: ·s: 0 .9% re,
"' UJ
UJ
"C
QI :>
.S! 0.6% .c:
V
c(
0.3%
0 .0"/o
(• CITY OF
~)PALO ALTO
1,500
1,200
900
600
300
2008 2009 2010 201 1 20 12 2013 2014 2015 2016 2017 2018 2019 2020
-Gas Efficiency Program Expenditures
Gas Savin gs Go al as % o f Lo ad
~Ac t u al Savings Achieved as % of Loa d
1/l-
"' "C
C:
re,
"' :::i
0 .c:
I-
8
Gas Savings by End Use and Sector
(• CITY OF
~)PALO ALTO
Total Gas Savings by Sector and End Use
Residential
Non Residential
HVAC
68%
■ Non Residential HVAC ■ Residential Building Envelope ■ Residential Domestic Hot Water
9
Wa ter Goals, Savings, and Expenditures
(• CITY OF
~)PALO ALTO
3.2%
2.8% .......................................................................................................................................................................................................... .
~ 2.4% ....................................................... , ......................................................................... .
"' QI)
C:
-~ 2 .0% ................................................................................................................................ ..
"' ...
QI ... ra
3::
1.6% ................................................................................................................................ ..
"C
QI
> .!!! 1.2%
..c: u
ct
0 .0%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
-Water efficiency program expenditures($)
,._Actual water savings as % of load
1,000
800
1/).
"' 600 "C
C: ra
"' :::,
0 ..c:
I-
400
200
10
Wa ter Savings by End Use and Sector
(• CITY OF
~)PALO ALTO
Total Water Savings by Sector and End Use
Residential
Domestic Hot , .
Water '-
3%
■ Non Residential Green Building Ordinance
■ Residential Domestic Hot Water
Residential Valley Water Programs
11
Customer Satisfaction
Community Engagement Program # of Attendees Net Promoter Score / Avg.
Survey Response
Water Workshops 135 workshop attendees Excellent
SunShares Solar GroupBuy Workshop 36 workshop attendees Excellent
Home Efficiency Genie 36 in-home assessments 9.64 / 10
Electrification Expo 263 expo attendees Excellent
(• CITY OF
1')PALO ALTO
12
Solar PV in Palo Alto
FY00
-07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
CLEAN 1,500 1,500 0
Res 542 328 152 205 187 195 214 543 474 633 409 449 375 293
Non-Res 123 227 1,037 15 295 249 49 1,383 378 465 508 1,049 591 1,330
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FY00
-07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
CLEAN 3 3 0
Res 176 112 43 52 44 49 49 103 93 131 84 77 64 51
Non-Res 9 5 9 2 2 4 3 10 9 5 7 8 12 3
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(• CITY OF
~)PALO ALTO
13
Historical DSM Program Expenditures
2012
2013
._ 2014
ns ~ 2015
7a 2016
~ 2017
LL 2018
2019
2020
(• C I TY OF
~)PALO ALTO
-
-
-
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$0
■ Electric Efficiency ~ Gas Efficiency
■ Water Efficiency :: Solar Renewables
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Millions
Lisa Benatar, Christine Tam & Micah Babbitt
Utility Program Services Manager, Senior Resource Planner, Resource Planner
lisa.benatar@cityofpaloalto.org, christine.tam@cityofpaloalto.org,
micah.babbitt@cityofpaloalto.org
CI TY OF
PALO
ALTO
City of Palo Alto (ID # 12102)
Utilities Advisory Commission Staff Report
Report Type: New Business Meeting Date: 4/7/2021
City of Palo Alto Page 1
Summary Title: UAC Start Time
Title: Staff Recommendation to Revise the Meeting Start Time for the
Utilities Advisory Commission Temporary Schedule
From: City Manager
Lead Department: Utilities
Recommendation
Staff recommends that the Utilities Advisory Commission approve revising the current
temporary special meeting start time from 4:00 pm to 5:00 pm through the remainder of the
Covid-19 pandemic.
Background
At the start of the pandemic, in March 2020, the Utilities Advisory Commission (UAC)
transitioned to a virtual meeting platform to comply with public health orders and as
authorized by the Governor’s Executive Order N-29-20 of March 17, 2020. Additionally, the
start time of the virtual UAC meetings was changed to 9:00 am. In August of 2020 the start time
was changed to 4:00 pm and has since remained in effect.
Discussion
During the last few UAC meetings there has been dialogue from the Commissioners requesting
a future agenda item to discuss changing the start time of the meetings to a later hour. Staff is
recommending a 5:00 pm start time for the remainder of the pandemic while the meetings
continue to be on the virtual platform.
Staff intends to revisit the matter with the UAC prior to returning to in-person meetings once
those are allowed under state and local pandemic orders, to recommend a permanent time
change of regular UAC meetings to 6:00 pm. This would require a City Council approval of a
change to the UAC bylaws. No action on revising the regular meeting time or UAC bylaws is
requested at this time.
Staff: Dean Batchelor
CITY OF
PALO
ALTO