HomeMy WebLinkAbout2021-07-07 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 May 12th and June 2nd 2021
V. UNFINISHED BUSINESS - None
VI. UTILITIES DIRECTOR REPORT
VII. NEW BUSINESS
1. Staff Recommends the Utilities Advisory Commission Discuss and Provide Feedback Discussion
on the One Water Plan Objectives, Scope and Community Engagement
2. Staff Recommendation That the Utilities Advisory Commission Recommend the City Action
Council Adopt a Resolution Approving the Verified Emission Reduction Agreement
with the Integrative Organization of Oaxaca Indigenous and Agricultural Communities
to Purchase 24,000 Tons CO2e for a Total Purchase Price of $228,000
3. Staff Recommend That the Utilities Advisory Commission Recommend the City Council Action
Approve the Use of the Electric Special Project Reserves in an amount Not-to-Exceed
$18.5M to Fund the Smart Grid Technology Installation Project (EL-11014) for Advanced
Metering Infrastructure (AMI) Implementation-Related Expenditures
UTILITIES ADVISORY COMMISSION – SPECIAL MEETING
WEDNESDAY, July 7, 2021 – 5:00 P.M.
ZOOM Webinar
Chairman: Lisa Forssell Vice Chair: Lauren Segal Commissioners: John Bowie, A.C. Johnston, Phil Metz, Greg Scharff, and Loren Smith Council Liaison: Eric Filseth
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.
4. Staff Recommends the Utilities Advisory Commission Review and Approve the Action
Utilities Advisory Commission's 2021-2022 Annual Work Plan, and Recommend
the City Council Review the Work Plan and Provide Feedback
VIII. COMMISSIONER COMMENTS and REPORTS from MEETINGS/EVENTS
IX. FUTURE TOPICS FOR UPCOMING MEETINGS: September 01, 2021
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
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.
A. You may download the Zoom client or connect to the meeting in-browser. If using your
browser, make sure you are using a current, up-to-date browser: Chrome 30+, Firefox 27+,
Microsoft Edge 12+, Safari 7+. Certain functionality may be disabled in older browsers
including Internet Explorer.
B. You will be asked to enter an email address and name. We request that you identify
yourself by name as this will be visible online and will be used to notify you that it is your
turn to speak.
C. When you wish to speak on an agenda item, click on “raise hand.” The Attendant will
activate and unmute speakers in turn. Speakers will be notified shortly before they are
called to speak.
D. When called, please limit your remarks to the time limit allotted.
E. A timer will be shown on the computer to help keep track of your comments.
3. Spoken public comments using a smart phone use the telephone number listed below. When you
wish to speak on an agenda item hit *9 on your phone so we know that you wish to speak. You will
be asked to provide your first and last name before addressing the Council. You will be advised how
long you have to speak. When called please limit your remarks to the agenda item and time limit
allotted.
Join Zoom Webinar Here
Meeting ID: 966-9129-7246
City of Palo Alto (ID # 12332)
Utilities Advisory Commission Staff Report
Report Type: New Business Meeting Date: 7/7/2021
City of Palo Alto Page 1
Summary Title: One Water Plan Scope
Title: Staff Recommends the Utilities Advisory Commission Discuss and
Provide Feedback on the One Water Plan Objectives, Scope and Community
Engagement
From: City Manager
Lead Department: Utilities
REQUEST
Staff requests the Utilities Advisory Commission (UAC) discuss and provide feedback on the One
Water objectives, scope, and community engagement.
EXECUTIVE SUMMARY
The City of Palo Alto (City or Palo Alto) receives 100% of its potable water from the San
Francisco Public Utilities Commission (SFPUC) through the Regional Water System (RWS). In
accordance with the Sustainability and Climate Action Plan (S/CAP) Update, the Utilities
Department will develop a plan for implementing a One Water portfolio. The One Water
approach to integrated water resource planning will take a broad, comprehensive look at water
supply options over a 20-year planning horizon including Green Stormwater Infrastructure
(GSI), recycled water and other non-potable water sources to supplement and preserve the
potable water supply. The One Water Plan will not replace capital planning work or other
planning efforts related to flood management, Sea Level Rise Adaptation, or GSI, but will
coordinate with those planning efforts, evaluate their effects on water supply planning, and
identify gaps or opportunities that provide water supply benefits. One Water will draw on the
analysis and findings of a number of critical pieces of a One Water portfolio that have been
completed or are ongoing including the Northwest County Recycled Water Strategic Plan and
Effluent Transfer Agreement with the Santa Clara Valley Water District (Valley Water) and the
City of Mountain View.
The One Water goal is Council adoption of a water supply plan that is a 20 -year roadmap for
implementation of prioritized water supply portfolios. To achieve this goal, the staff plans to
focus the One Water scope on the following:
Staff: Karla Dailey and Lisa Bilir
CITY OF
PALO
ALTO
City of Palo Alto Page 2
1) Objective: address how the City can increase its water portfolio’s resiliency to future
uncertain conditions such as changes in climate, regulations, economics, political
conditions and natural disasters;
2) Criteria for evaluating water supply portfolios: Planning level cost (capital and
operations and maintenance), normal year reliability, drought resiliency, contribution to
canopy health, quality, sustainability, equity, flexibility to adapt to changing conditions,
complexity and alignment with other City initiatives including S/CAP, green stormwater
program, sea level rise policy, and Comprehensive Plan;
3) Context: One Water should be consistent, avoid duplication, identify gaps and consider
opportunities that provide water supply benefits from other City initiatives and regional
planning efforts;
4) Reliability: include alternatives for consideration that provide Palo A lto with higher level
of reliability than the SFPUC’s Level of Service that SFPUC is obligated to provide (no
more than 20 percent system-wide rationing during drought);
Key tenets of this process include the following, and these are illustrated in Figure 1 below:
1. The plan will take a broad, comprehensive look at water supply options over a 20 -year
planning horizon including GSI, recycled water and other non-potable water sources to
supplement and preserve the potable water supply. The resulting roadmap for
implementation of prioritized water supply portfolios is shown at the bottom of Figure 1
below.
2. The One Water planning process will draw on the analysis and findings of a number of
critical pieces of a One Water Plan that have been completed or are ongoing, including
the Northwest County Recycled Water Strategic Plan and the Effluent Transfer
Agreement with Valley Water. Figure 1 illustrates these documents feeding into One
Water integrated water supply planning.
3. The plan will identify and prioritize future water supply portfolios for the City of Palo
Alto that serve the interests of Palo Alto residents and businesses and protect the tree
canopy.
4. This planning process must engage staff across relevant City departments, key
stakeholders, and the public.
City of Palo Alto Page 3
Figure 1: One Water Role in Palo Alto Planning
Staff is seeking feedback from the UAC on the project objectives, scope , and community
engagement plan prior to issuance of a Request for Proposals from qualified consulting firms.
The UAC may consider the following questions in order to facilitate the discussion and
feedback:
1. Is this the right goal for the One Water planning process: Council adoption of a water
supply plan that is a 20-year roadmap for implementation of prioritized water supply
portfolios?
2. Is this the right objective for the One Water Plan: Address how the City can increase its
water portfolio’s resiliency to future uncertain conditions such as changes in climate,
regulations, economics, political conditions, and natural disasters?
3. Does the UAC have feedback regarding the evaluation criteria under consideration and
described below?
4. Is this the right focus: Evaluate locally-controlled water supply and demand
management projects and identify potential collaboration and regional project
opportunities?
5. Should Palo Alto seek to identify portfolios that will result in increased reliability,
exceeding SFPUC’s level of service goal of no more than 20% system wide water supply
shortages during drought conditions?
Utilities
Capital Planning
City of Palo Alto Page 4
6. Is this the right approach: Consider stormwater as a potential water supply resource but
do not explicitly address broader watershed impacts of those projects in this plan?1
7. To what extent should the One Water Plan include City policies regarding green
buildings, including onsite blackwater systems at private businesses?
8. Does the UAC have specific feedback on the methods for soliciting public input?
BACKGROUND
Palo Alto’s Water Supply
The City receives 100% of its potable water from the SFPUC through the RWS. The City also uses
some recycled water produced at the Palo Alto-operated Regional Water Quality Control Plant
(RWQCP) for irrigation of the municipal golf course, a park, and some other minor applications.
A system of local groundwater wells and storage provide emergency water supply s ervice. The
City partners with Valley Water to offer a wide-range of water conservation programs to our
residential and commercial customers.
One Water
One Water is an approach that many communities have begun to utilize in integrated water
resource planning. One Water can be defined in many different ways. The US Water Alliance, a
national nonprofit organization whose mission is to drive One Water breakthroughs that
positively transform our environment, economy, and society, explains that a One Water
approach can take many forms, but all share some unifying characteristics:
• The mindset that all water has value—from the water resources in our ecosystems to
our drinking water, wastewater, and stormwater.
• A focus on achieving multiple benefits, meaning that our water-related investments
should provide economic, environmental, and societal returns.
• Approaching decisions with a systems mindset that encompasses the full water cycle
and larger infrastructure systems.
• Utilizing watershed-scale thinking and action that respects and responds to the
natural ecosystem, geology, and hydrology of an area.
• Relying heavily on partnerships and inclusion, recognizing that real progress will only
be made when all stakeholders have a seat at the table.2
The 2020 S/CAP update is underway, and a key action is to develop a plan for implementing a
One Water portfolio. One Water will replace the more traditional WIRP and take a broader,
more comprehensive look at water supply options including GSI, recycled water and other non-
potable water sources to supplement and preserve the potable water supply. One Water will
utilize the work from the completed Northwest County Recycled Water Strategic Plan and the
Effluent Transfer Agreement that are described in more detail below.
1 GSI planning considers broader watershed impacts such as reducing pollutants conveyed in stormwater to local
creeks and the Bay.
2 http://uswateralliance.org/sites/uswateralliance.org/files/publications/Roadmap%20Executive%20Summary.pdf
City of Palo Alto Page 5
The UAC heard a presentation in August 2020 on One Water approaches from Professor
Richard Luthy. Professor Luthy mentioned the Bay Area One Water Network 3 and described
decentralized non-potable water reuse, indirect and direct potable reuse, stormwater and
other alternative water source opportunities and new technologies that can be used to
supplement water supplies.
Water Supply Reliability and Climate Change
Since the City relies on the SFPUC’s RWS for its potable water supplies, the City’s current water
supply reliability mirrors that of the RWS. During a water supply shortage, contractually agreed
upon allocation methods apply in limited circumstances. The amount of water available to San
Francisco’s Retail Customers (the residential and commercial custo mers in the City of San
Francisco) and Wholesale Customers (the 26 agencies, including Palo Alto, that purchase water
from the SFPUC) will be impacted by the outcome of the Water Quality Control Plan for the San
Francisco Bay/Sacramento-San Joaquin Delta Estuary (Bay Delta Plan Amendment or Bay Delta
Plan). The SFPUC is contractually obligated to maintain a Level of Service (LOS) whereby water
supply shortage will be limited to 20% system-wide. SFPUC’s draft 2020 UWMP projects that if
the Bay Delta Plan is not implemented, SFPUC has sufficient supplies to meet projected
demands, however if the Bay Delta Plan is implemented, this would result in system -wide
shortages of up to 54% for Wholesale Customers during multiple years of drought. Alternative
water supply projects undertaken by the SFPUC to close this gap may take many years to
implement and may be costly.
Climate change will also impact Palo Alto’s water supply. The SFPUC’s climate change study, the
“Long Term Vulnerability Assessment and Adaptation Pl an for the SFPUC Water Enterprise”
completed in partnership with the Water Research Foundation, will be released in the summer
of 2021 and can be used to help frame the issue of climate change impacts on the water
supplies delivered via the RWS.
Northwest County Recycled Water Strategic Plan & Related
The City Council accepted the Northwest County Recycled Water Strategic Plan in 2020 (Council
Report #10913). The Northwest County Recycled Water Strategic Plan is a collaboration
between the City of Palo Alto and the Valley Water that presents the feasibility of various
potable and non-potable opportunities to reuse water from the RWQCP within the plant’s
service territory (Palo Alto, Mountain View, Los Altos, Los Altos Hills, Stanford University and
East Palo Alto Sanitary District). The report summarizes and ranks water reuse alternatives
based on cost and non-cost criteria; it does not recommend specific projects. The study also
includes a robust evaluation of the groundwater aquifer in Northwest Santa Clara County.
The Northwest County Recycled Water Strategic Plan evaluated a potential expansion of the
recycled water pipeline for non-potable reuse called “Phase 3 Pipeline.” Phase 3 would expand
3 Bay Area One Water Network is a collaborative effort of the Engineering Research Center for Re -Inventing the
Nation’s Urban Water Infrastructure (ReNUWIt), the Berkeley Water Center, the Environmental Protection Agency,
and numerous Bay Area water utilities, cities, and counties.
City of Palo Alto Page 6
the recycled water system to South Palo Alto to serve landscape irrigation demands and
potential dual-plumbed systems mainly within the Stanford Research Park area. An EIR,
business plan and preliminary design report for this pipeline are also complete for the Phase 3
Pipeline. For more information, see this website.
The Northwest County Recycled Water Strategic Plan also examined a variety of indirect and
direct potable reuse options, and the same work effort developed three technical
memorandums examining other possible water sources including:
1. The possible use of groundwater from temporary dewatering systems for irrigation.
2. The possible use of groundwater to irrigate city parks.
3. Increasing flow to RWQCP by redirecting existing permanent dewatering systems at
Oregon Expressway and City Hall to increase flows at the RWQCP for a future potable
reuse project.
More information about these technical memorandums and findings are available on the
website.
Effluent Transfer Agreement
In 2019, Council approved an Effluent Transfer Agreement with Valley Water and the City of
Mountain View (Council Report #10627). The 76-year agreement enables an effluent transfer
from the RWQCP to Valley Water to be reused in Santa Clara County. Under the agreement,
Valley Water has approximately 20 years to take delivery of the treated effluent which would
likely be used in the county south of Mountain View. The agreement also provides funding from
Valley Water for a salt removal facility in Palo Alto to improve the quality of recycled
water used in Palo Alto and the City of Mountain View and an at -cost water supply option for
Palo Alto. Palo Alto is now moving forward with the detailed design of this facility and
construction is expected to be completed in 2025.4
DISCUSSION
The plan for implementing a One Water portfolio is consistent with the following guiding
documents and actions:
Sustainability and Climate Action Plan
“Water” is one of seven chapters in the City’s S/CAP. In November 2016 Council adopted the
S/CAP Framework (Staff Report #7304) including four water-specific goals:
1. Utilize the right water supply for the right use;
2. Ensure sufficient water quantity and quality;
3. Protect the Bay, other surface waters, and groundwater; and
4. Lead in sustainable water management.
4 In March 2021, Council approved this project’s design services contract with Black & Veatch (Council Report
#11782).
City of Palo Alto Page 7
The 2020 S/CAP update is underway, and a key action is to develop a plan for implementing a
One Water portfolio.5 The One Water approach to integrated water resource planning will take
a broader, more comprehensive look at water supply options including green stormwater
infrastructure, recycled water and other non-potable water sources to supplement and
preserve the potable water supply. One Water will draw on the analysis and findings of a
number of critical pieces of a One Water portfolio that have been completed or are ongoing
including the Northwest County Recycled Water Strategic Plan and Effluent Transfer agreemen t
with Valley Water that are described in more detail below.
Utilities Strategic Plan
The Utilities Strategic Plan provides guidance in the area of water supply planning through
Priority 4 “Financial Efficiency and Resource Optimization,” Strategy 4 “Achi eve a sustainable
and resilient energy and water supply to meet community needs,” and Action 3 “Evaluate
recycled water, groundwater, and other non -potable water sources and integrate the results
and outcomes with water supply plans.” By pursuing One Water, staff aims to carry out this
strategic priority action.
2017 Water Integrated Resource Plan
In 2017, the WIRP provided Council with a comparison of potable water supply alternatives and
demand-side management measures as well as guidelines for the City’s water resource
planning activities (Staff Report #7634). The Council-adopted guidelines are listed below with a
commentary for each describing progress made:
1. Pursue all cost-effective water efficiency and conservation;
The City continues to partner with Valley Water to offer a wide-range of water
conservation programs to our residential and commercial customers.
2. Continue to investigate the technical feasibility and financial impact of increasing the
use of non-traditional, non-potable sources such as black water, storm water, and water
incidentally produced in an excavating project;
The following S/CAP update draft goals and actions support this guideline:
a. Goal: achieve 10% of total water demand met by water reuse (recycled or
stormwater capture);
b. Goal: increase pervious surfaces within the City 10% by 2030 compared to 2020
baseline, to manage stormwater by improving water quality to protect the SF
Bay and increase beneficial use of captured stormwater;
c. Action: Create streamlined design guidelines and permitting process with
minimal fees for onsite potable and non-potable water reuse on private
(residential and commercial) property.
5 https://www.cityofpaloalto.org/files/assets/public/sustainability/2020-sustainability-and-climate-action-plan-
updated-potential-goals-and-key-actions-draft.pdf
City of Palo Alto Page 8
3. Proceed with the Recycled Water Strategic Plan to determine how to reduce the
demand for imported water; and
The Recycled Water Strategic Plan was completed in 2020.
4. Survey potentially impacted customers about their preference for SFPUC water versus
blended water.
Staff has not yet conducted a survey since the adoption of this guideline in 2017. The
most recent survey was in 2004 when staff surveyed residential customers and found
that respondents generally preferred no groundwater or treated groundwater, however
blended groundwater was not soundly rejected (June 2004 UAC meeting). Since that
time, SFPUC changed its treatment of imported water to include chloramine treatm ent.
Investments would need to be approved by Council and then implemented in order to
address water quality issues associated with blending SFPUC imported water with
groundwater. Additionally, during a drought, there would likely be restrictions on
groundwater at the same time as any cutbacks from SFPUC water and it is unclear if any
groundwater would be available to Palo Alto. The survey is not currently in the work
plan but may be resurrected depending on the findings from the One Water planning
process.
At the time of the 2017 WIRP, staff planned to update these guidelines after the completion of
the Recycled Water Strategic Plan. The assumption now is that the One Water Plan will replace
the WIRP.
One Water Proposed Scope
The One Water goal is Council adoption of a water supply plan that is a 20 -year roadmap for
implementation of prioritized water supply portfolios. To achieve this goal, staff plans to focus
the One Water scope on the key areas of analysis discussed below. Staff seeks UAC input on all
areas of the proposed scope and approach for One Water.
The objective of One Water is to address how the City can increase its water portfolio’s
resiliency to future uncertain conditions such as changes in climate, regulations, economics,
political conditions and natural disasters. The One Water scope will be refined using input from
the UAC and public. Staff will then issue a request for proposals and negotiate a contract with a
selected consultant.
Palo Alto obtains all of its potable water from SFPUC wh ich is why the City’s water supply
reliability mirrors that of the RWS. SFPUC is obligated to provide a level of service of no more
than 20 percent system-wide rationing during drought. However, if the Bay Delta Plan is
implemented, this would result in system-wide shortages of up to 54% for Wholesale
Customers during multi-year droughts.
City of Palo Alto Page 9
The SFPUC is implementing an Alternative Water Supply Planning (AWSP) process that is
designed to investigate and plan for new water supplies to address future long -term water
supply reliability challenges and vulnerabilities on the RWS. The SFPUC has budgeted $264
million over the next ten years to fund alternative water supply projects (see Palo Alto’s 2020
UWMP for more discussion). Palo Alto water customers will pay Pa lo Alto’s portion of this work
through wholesale water rates. It is uncertain how much upward pressure this supply planning
will place on wholesale water rates in the long-term and how long AWSP will take to implement
new supplies.
Considering the uncertainty of state regulations and the SFPUC’s AWSP cost and
implementation, it is prudent for Palo Alto to plan for its water supply needs and local reliability
targets. On August 7, 2019 the UAC discussed Palo Alto’s water supply reliability. Some UAC
members encouraged staff to look for more local or other options for water supply reliability
and rank the cost-effectiveness of projects, and expressed a need to protect the tree canopy
and landscaping infrastructure. Water supply alternatives that yield reliabi lity in Palo Alto over
and above the SFPUC’s LOS target may be consistent with local values, such as protection of the
tree canopy, and may be attractive even at increased cost to the community.
In addition to examining potable and non-potable water sources at the utility scale, the One
Water planning process will examine demand side management measures including gray water
reuse and other water conserving measures that customers and the private sector can
implement. Palo Alto offers water rebates for a variety of water efficient and conserving
products through its partnership with Valley Water. Past planning efforts concluded that DSM is
the best, most cost-effective resource, but potable water supplies are still needed (2017 WIRP).
One Water will include distributed water reuse projects such as black water treatment as an
offset to water demand and will continue to investigate the technical feasibility, financial and
water supply impact of increasing the use of non-traditional, non-potable water sources.
Development of policies for on-site reuse at commercial facilities and expanded green building
requirements or mandates are not contemplated in the scope of work. Inclusion of such policies
would increase the time and cost of the One Water Plan. However, One Water results related
to water supply portfolio development may result in recommendations that would feed into
the development/refinement of these green building policies, requirements or mandates.
One Water will look for opportunities to utilize GSI to offset water demand in Palo Alto. GSI is
infrastructure built into our urban environment to collect, slow, and clean stormwater runoff
through the use of natural processes. Palo Alto’s Green Stormwater Infrastructure Plan outlines
how Palo Alto envisions gradually integrating GSI into its urban landscape while building on and
learning from existing installed measures. Palo Alto aims to transform its storm drain
infrastructure over time to slow the flow of stormwater runoff, increase infiltration into
pervious surfaces, recharge groundwater (where feasible), increase irrigation and other uses of
captured stormwater, and treat and remove pollutants. There are multiple benefits of GSI and
some of these can benefit Palo Alto’s water supply, groundwater , and surface water. The One
Water Plan will identify and prioritize GSI projects with water supply benefits. Including a
City of Palo Alto Page 10
comprehensive analysis of the co-benefits will overlap with GSI work underway at the City,
would require close coordination with Valley Water, and would expand the scope and cost of
the One Water Plan.
One Water will develop alternative water supply portfolios depending on future uncertain
conditions. One Water will focus on and include locally-controlled water supply projects while
identifying potential collaboration and regional project opportunities.
One Water will compare and prioritize the water supply portfolios based upon a series of
criteria including at a minimum:
• Planning level cost, capital, and O&M
• Normal year reliability
• Drought resiliency
• Contribution to canopy health
• Quality
• Sustainability
• Equity
• Flexibility to adapt to changing conditions including SFPUC activities, state
actions regarding environmental flows or water reuse regulations, Valley
Water activities, and climate change
• Complexity
• Alignment with other City initiatives including S/CAP, green stormwater
program, sea level rise policy, and Comprehensive Plan
• Other criteria
One Water plans differ greatly across communities. For example, some One Water plans are
used as the water capital improvement program, flood management master plans or stream
stewardship plans for their communities. Palo Alto’s One Water will examine options for
infrastructure in specific areas that may increase resiliency at an appropriate level of detail .
However, One Water will not replace ongoing capital planning work or existing capital master
plans for replacement or rehabilitation of aging infrastructure. One Water will not replace any
ongoing planning efforts such as flood management, Sea Level Rise and Green Stormwater
Infrastructure. One Water will coordinate with those planning efforts, seek to find any gaps that
could improve water supply planning and consider opportunities that provide water supply
benefits from these other planning efforts.
Community engagement will be critical to the success of the One Water planning effort. This
process must engage across relevant City departments, key stakeholders and the public. A
range of techniques are at our disposal to gather community input including public meetings
such as UAC and Council meetings, posting information on the City’s website, community
City of Palo Alto Page 11
meetings, surveys, bill inserts and social media. Thoughts from UAC commissioners regarding
community engagement are welcomed.
As the UAC considers feedback regarding the proposed One Water planning approach, the
following questions may be used as guidance:
1. Is this the right goal for the One Water planning process: Council adoption of a water
supply plan that is a 20-year roadmap for implementation of prioritized water supply
portfolios?
2. Is this the right objective for the One Water Plan: Address how the City can increase its
water portfolio’s resiliency to future uncertain conditions such as climate, regulations,
economic, political, and natural disasters?
3. Does the UAC have feedback on the evaluation criteria under consideration?
4. Is this the right focus: Evaluate locally-controlled water supply and demand
management projects and identify potential collaboration and regional project
opportunities?
5. Should Palo Alto seek to identify portfolios that will result in increased reliability,
exceeding SFPUC’s level of service goal of no more than 20% system wide water supply
shortages during drought conditions?
6. Is this the right approach: Consider stormwater as a potential water supply resource but
do not explicitly address broader watershed impacts of those projects in this plan?
7. To what extent should the One Water Plan include City policies regarding Green
Buildings including onsite blackwater systems at private businesses?
8. Does the UAC have specific feedback on the methods for soliciting public input?
COMMUNITY ENGAGEMENT
One Water must engage across relevant City departments, key stakeholders and the public.
Community engagement will be a key part of One Water development. This report offers the
UAC and the public the first opportunity to contribute to the discussion.
NEXT STEPS
Staff will incorporate feedback from UAC members and plans to draft and issue a request for
proposals to work with an outside consultant to develop the One Water Plan.
RESOURCE IMPACTS
The Utilities Department plans to issue a request for proposals which will require additional
staff time and consultant expenditure that will be absorbed within existing budgets.
POLICY IMPLICATIONS
This report is part of the implementation of a key action in the 2020 S/CAP Update to develop a
plan for implementing a One Water portfolio. Additionally, it is consistent with the Utilities
City of Palo Alto Page 12
Strategic Plan specifically, Priority 4 “Financial Efficiency and Resource Optimization,” Strategy 4
“Achieve a sustainable and resilient energy and water supply to meet community needs,” and
Action 3 “Evaluate recycled water, groundwater, and other non-potable water sources and
integrate the results and outcomes with water supply plans.”
ENVIRONMENTAL IMPACT
The UAC’s recommendation providing feedback on the One Water objectives, scope and
community engagement is not a project requiring California Environmental Quality Act review,
because it is an administrative governmental activity which will not cause a direct or indirect
physical change in the environment.
Attachments:
• Attachment A: Presentation
July 7, 2021 www.cityofpaloalto.org
One Water Plan Scope
Utilities Advisory Commission
•
CITY OF
PALO ALTO
TITLE 40 FONT BOLD
Subtitle 32 font
2 www.cityofpaloalto.org
Goal:
Council adoption of a water supply plan that is a 20-year roadmap
for implementation of prioritized water supply portfolios
Objective:
Address how the City can increase its water portfolio’s resiliency
to future uncertain conditions such as climate, regulations,
economic, political and natural disasters
•
CITY OF
PALO ALTO
TITLE 40 FONT BOLD
Subtitle 32 font
3 www.cityofpaloalto.org
One Water Role in Palo Alto Planning
One Water
Integrated
Water Supply
Planning
S/CAP Update
Northwest County Recycled
Water Strategic Plan and
Effluent Transfer Agreement
Community Engagement
Stakeholders, Residents,
Businesses, Tree Canopy
Planning and
Development
Green Building
Public Works
Green Stormwater
Infrastructure, Sea
Level Rise, Flood
Management
Utilities
Capital Planning
20 Year Roadmap
For
Implementation of
Prioritized Water
Supply Portfolios
•
CITY OF
PALO ALTO
TITLE 40 FONT BOLD
Subtitle 32 font
4 www.cityofpaloalto.org
•Planning level cost (capital and operations and maintenance)
•Normal year reliability
•Drought resiliency
•Contribution to canopy health
•Quality
•Sustainability
•Equity
•Flexibility to adapt to changing conditions
•Complexity
•Alignment with other City initiatives including S/CAP, green stormwater program, sea level rise policy, and
Comprehensive Plan
Criteria •
CITY OF
PALO ALTO
TITLE 40 FONT BOLD
Subtitle 32 font
5 www.cityofpaloalto.org
▪Goal, Objective, Criteria
▪Focus on locally-controlled water supply and DSM; identify potential collaboration and regional project
opportunities?
▪Identify projects that increase reliability in Palo Alto (Exceed SFPUC’s level of service goal of no more
than 20% system wide water supply shortages during drought conditions)
▪Stormwater as a potential resource (Do not include watershed management)
▪Consider but do not propose policies re: green buildings, onsite blackwater systems at private
businesses
▪Specific feedback on the methods for soliciting public input
Discussion •
CITY OF
PALO ALTO
City of Palo Alto (ID # 12335)
Utilities Advisory Commission Staff Report
Report Type: New Business Meeting Date: 7/7/2021
City of Palo Alto Page 1
Summary Title: Mexican Carbon Offsets Purchase Agreement
Title: Staff Recommendation That the Utilities Advisory Commission
Recommend the City Council Adopt a Resolution Approving the Verified
Emission Reduction Agreement With the Integrative Organization of Oaxaca
Indigenous and Agricultural Communities to Purchase 24,000 Tons CO2e for a
Total Purchase Price of $228,000
From: City Manager
Lead Department: Utilities
Recommendation
Staff recommends the Utility Advisory Commission (UAC) recommend that the City Council
(Council):
1.Adopt the attached resolution (Attachment A) approving the Verified Emission Reduction
Agreement (VER Agreement) with the Integrative Organization of Oaxaca Indigenous and
Agricultural Communities (ICICO), to purchase 24,000 tons CO2e at $9.50 per ton CO2e for
a total purchase price of $228,000; and
2.Delegate to the City Manager, or his designee, the authority to execute on behalf of the
City the VER Agreement and confirmation (Attachment B) with ICICO.
Executive Summary
To implement the Council-approved Carbon Neutral Natural Gas Plan (Resolution 9930), the
City must purchase an annual quantity of carbon offsets (a.k.a. VERs) equal to the greenhouse
gas emissions caused by natural gas use by City gas utility customers. The maximum Council -
approved price for VERs is $19 per ton CO2e. In August 2017 Council adopted a Standard
Form VER Master Agreement (Resolution 9703) to enable those transactions.
In December 2017 the City approved a purchase of 17,000 carbon offsets for $8.00 from
ICICO, a non-governmental organization (Resolution 9725). While the City had only
completed one purchase for carbon offsets prior to this purchase, $8.00 per carbon offset
was a small premium to the City’s first purchase. The protocols for the Mexican VERs are very
similar to those required in the Carbon Neutral Natural Gas Plan, and the agreement was
substantively the same as the City’s Standard Form VER Agreement with minor changes to
accommodate the international transaction. The revenue from the transaction afforded
Staff: Micah Babbitt
CITY OF
PALO
ALTO
City of Palo Alto Page 2
numerous co-benefits for the community near Oaxaca including salaries for the people who
maintain the forest and supplies for local schools. Bob Wenzlau, Palo Alto’s N eighbor’s
Abroad Representative, attended a thank you celebration and was able to witness the
positive impact of the transaction firsthand.
The proposed transaction is another one-time purchase, this time for 24,000 tons CO2e at
$9.50 per ton CO2e, for a total price of $228,000. The proposed quantity is about 15% of the
City’s annual carbon offset needs. The price of $9.50 per ton is premium to historical average
offset costs of $6.25 per ton; the net bill increase for an average residential customer is
estimated to be about $1/year. Furthermore, staff expects higher average offset costs in the
future based on price projections provided by brokers. The agreement is the same as the one
approved for the 2017 transaction with non-substantive edits.
Background
In December 2020, Council adopted Resolution 9930 maintaining the Carbon Neutral Natural
Gas Plan to achieve carbon neutrality for the gas supply portfolio using high-quality carbon
offsets with a cost cap of no greater than a $19 per ton CO 2e. Forestry projects are one of 6
projects types approved for use by the City’s program.
Implementation of the Carbon Neutral Gas Plan required executing contracts to enable the
City to purchase carbon offsets. In August 2017 Council adopted a Standard Form VER Master
Agreement (Master Agreement) (Resolution 9703). Five Master Agreements have been
approved (Resolution 9704, 9787, 9793, 9798) to enable transactions. Under those
agreements, the City has purchased 375,000 carbon offsets at an average price of $6.25 per
ton CO2e. Approximately 60% of these offsets have been U.S. forestry projects at an average
price of $5.60 per ton CO2e. In addition, the City previously purchased 17,000 carbon offsets
for $8.00 from ICICO in December 2017.
Discussion
Through Neighbors Abroad of Palo Alto, the City learned of a carbon offset program
implemented by ICICO, an NGO established in 2012 with the objective to commercialize
ecosystem services on behalf of 12 indigenous and agricultural communities near Oaxaca,
Mexico, one of Palo Alto’s sister cities. ICICO implements projects located in High Biological
Value Zones which contain flora and fauna listed in the Mexican Endangered Species List and
the International Union for Conservation of Nature Red List of Threatened Species. The
environmental projects have made local residents more aware of the health benefits of a
well-maintained ecosystem and have provided opportunities for all community members to
become involved including women and youth. Revenue from the sale of carbon offsets has
funded fire protection, tree care, freshwater spring recharge, and transportation and
equipment for local schools.
The City completed its first transaction with ICICO for 17,000 carbon offsets in October 2017.
Since this transaction, ICICO continues to develop additional forestry offset projects and
City of Palo Alto Page 3
communicates project updates to Neighbors Abroad of Palo Alto and City staff. In February
2021, ICICO informed the City they expect to generate 43,000 carbon offsets and wish to sell
24,000 to Palo Alto for a negotiated price of $9.50 per ton CO2e. In the last request for
proposals for carbon offsets, the City received proposals for forestry offsets ranging in price
from $6.90 to $13.75 per ton CO2e. Assuming future prices will be higher than historical, staff
still expects this proposed transaction to cost approximately $50,000 more than offset s
available in the U.S. This estimated incremental cost averages about one dollar more per year
for an average residential customer.
Like the 2017 transaction, the carbon offsets contemplated in the proposed agreement are
from a forestry project in San Juan Lachao, Oaxaca and comply with a Mexican Forestry
Protocol developed by the Climate Action Reserve (CAR), a carbon offset registry used by
CARB. The City’s Carbon Neutral Gas Plan includes U.S Forestry as one of 6 approved project
types. While the proposed Oaxaca transaction does not meet all of the elements of the
Carbon Neutral Gas Plan because the project is outside the U.S., the U.S. Forestry protocol
and the Mexican protocol are similar; the differences are outlined in Attachment C. Council
approval also included a preference (with no specified premium) for local projects.
ICICO has 24,000 offsets available for purchase, about 15% of Palo Alto’s annual need, that
have already been generated and certified by CAR. The proposed agreement is substan tively
the same as the Council-approved Standard Form VER Master Agreement and the 2017
agreement with ICICO. Minor modifications were made to the Master Agreement to
accommodate the international transaction.
City of Palo Alto Municipal Code Section 2.30.340 (c) requires that commodity contracts
include the following: (1) governing law shall be the laws of the state of California; (2) choice
of venue shall be the county of Santa Clara; and (3) a counterpart y shall obtain and
maintain during the term of the contract the minimum credit rating established as of the
date of award of contract of not less than a BBB- credit rating established by Standard &
Poor’s and a Baa3 credit rating established by Moody's Investors Services. The proposed
agreement, like the Standard Form VER Master Agreement, includes the first 2 provisions.
Since this agreement is for spot purchases (a purchase for immediate or near -term delivery)
and there is no credit risk associated with the transactions, the third provision regarding
credit worthiness is not included. Resolution 9703 waived the investment grade credit
requirement for VER agreement counterparties.
The City’s energy Risk Management Counterparty Contractual Guidelines require master
agreement counterparties to provide audited financial statements of the counterparty or its
parent and a contract termination provision that does not provide a defaulting party with any
termination payment or settlement amount for any product. Since, like the Standard Form
VER Master Agreement, this agreement is for a spot purchase and there is no credit risk
associated with this transaction, these two provisions are not included.
City of Palo Alto Page 4
Timeline, Resource Impact, Policy Implications
Funding for purchase of carbon offsets was included in the FY 2022 gas utility supply budget.
Approval of the recommendation will not impact rates in the FY 2022 budget.
Policy Implications
Adoption of the proposed resolutions conforms to the Council-approved Energy Risk
Management Policy and the Palo Alto Municipal Code. Further, the recommendation is
consistent with the objectives of the Council-approved Carbon Neutral Gas Plan,
and consistent with the Gas Utility Long-term Plan and the Utilities Strategic Plan objective
to manage supply cost by negotiating supply contracts to minimize financial risk.
Stakeholder Engagement
This purchase agreement is being presented to the Utility Advisory Commission and if the UAC
recommends this purchase, the purchase agreement will go to the Finance Committee in
August. Assuming both the UAC and Finance Committee recommend this purchase, it will
then go to Council.
Environmental Review
Council’s adoption of the attached resolution approving the VER Agreement with ICICO is
not subject to California Environmental Quality Act (CEQA) review as an administrative
governmental activity that will not result in any direct or indirect physical change to the
environment; in the alternative, Council’s approval of the VER Agreement is categorically
exempt from CEQA review under CEQA Guidelines sections 15307 and 15308, as an action
taken for the protection of natural resources and the environment .
Attachments:
• Attachment A: Resolution
• Attachment B: Oaxaca VER Agreement
• Attachment C: Climate Action Reserve
• Attachment D: Presentation
6055531
*NOT YET APPROVED*
Resolution No.____
Resolution of the Council of the City of Palo Alto Approving the Verified
Emission Reduction Agreement (VER Agreement) with the Integrative
Organization of Oaxaca Indigenous and Agricultural Communities
RECITALS
A. On December 5, 2016, the Council adopted Resolution 9649 approving a
Carbon Neutral Natural Gas Plan to achieve a carbon neutral gas portfolio by fiscal year
2018 with no greater than a 10¢/therm rate impact.
B. On December 7, 2020, the Council adopted Resolution 9930, approving
an updated Carbon Neutral Gas Plan to maintain a carbon neutral gas portfolio with rate
impacts of individual transactions limited to under $19 per ton CO2e, consistent with the
Council-approved maximum rate impact of 10₵/therm.
C. In accordance with the Carbon Neutral Plan, the quantity of offsets
purchased to meet the City’s Carbon Neutral Plan objectives will be matched to carbon
emissions associated with the City’s natural gas sales volume.
D. With Resolution 9703 approved August 21, 2017, Council approved
the standard form Verified Emissions Reduction Master Agreement.
E. Oaxaca, Mexico is a sister city of the City of Palo Alto.
F. The integrative organization of Oaxaca Indigenous and Agricultural
Communities (ICICO) sells environmental offsets from a forestry project in Oaxaca (the
Oaxaca Project).
G. The carbon offsets generated by ICICO’s Oaxaca Project comply with
a Mexican Forestry Protocol developed by the Climate Action Reserve, a carbon offset
registry used by CARB, and are substantially similar in type and protocol to those
contemplated by the City’s Carbon Neutral Gas Plan.
H. The proposed Verified Emission Reduction Agreement to be entered
into with ICICO to purchase $228,000 of carbon offsets generated by the Oaxaca Project
is substantively similar to the City’s Standard Form VER Agreement, with minor changes
to reflect the international transaction.
NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES as follows:
SECTION 1. The Council hereby approves the Verified Emission Reduction
Agreement (VER Agreement) with the ICICO to purchase 24,000 tons of CO2e at $9.50 per
ton from the Oaxaca Project, for a total purchase price of $228,000; and
6055531
SECTION 2. The Council finds that execution of the Oaxaca Project VER
Agreement meets the objective of the City’s Carbon Neutral Gas Plan, mitigating GHG
emissions from natural gas used in the City of Palo Alto, since the offsets purchased will
comply with the Mexican Forestry Protocol approved by the Climate Action Reserve, and
are substantially similar to the CARB-approved protocols included in the Carbon Neutral
Plan; and
SECTION 3. The Council hereby delegates to the City Manager, or his designee, the
authority to execute the Oaxaca VER Agreement, and confirmation letter, and any documents
necessary to administer the Oaxaca VER Agreement that are consistent with the Palo Alto
Municipal Code and City Council-approved policies and plans; and
SECTION 4. Adoption of this Resolution approving the VER Agreement with ICICO is
not subject to California Environmental Quality Act review as an administrative governmental
activity that will not result in any direct or indirect physical change in the environment as a
result (CEQA Guidelines section 15378(b)(5)). In the alternative, Council’s approval of the VER
Agreement with ICICO is categorically exempt from CEQA review under CEQA Guidelines
sections 15307 and 15308, as an action taken for the protection of natural resources and the
environment.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSTENTIONS:
ABSENT:
ATTEST:
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
Assistant City Attorney City Manager
Director of Administrative Services
Director of Utilities
1
AGREEMENT FOR THE PURCHASE AND SALE OF
VERIFIED EMISSION REDUCTIONS
This Agreement for the Purchase and Sale of Verified Emission Reductions (the
“Agreement”) is made as of this ___ day of ____ 2021 (“Effective Date”), by and between the
City of Palo Alto, California, a chartered California municipal corporation with its primary business
address at 250 Hamilton Avenue, Palo Alto California 94301 (“City” or “Buyer”) and Integrator of
Campesino and Indigenous Communities of Oaxaca (ICICO AC), a Non-Governmental
Organization formed in Oaxaca State, Mexico, with its primary business address at Eucaliptos 307
A, Colonia Reforma, Oaxaca de Juárez, Oaxaca, Postal Code 68050 (“Seller”). This Agreement,
together with any and all Confirmation Letters and other schedules and exhibits related to
Verified Emissions Reductions (as defined herein) shall be referred to as the “Agreement”.
RECITALS:
A.The Parties wish to buy and sell Verified Emission Reductions on the terms set forth in this
Agreement;
B.Buyer wishes to enter into this Agreement with Seller to facilitate Verified Emission
Reductions purchases to manage various customer programs administered by the Buyer;
and
C.Seller has access to Verified Emission Reductions and wishes to enter into this Agreement
with Buyer to participate in the Verified Emissions Reductions purchases that the City may
undertake from time to time.
NOW, THEREFORE, in consideration of the recitals and the covenants, terms and conditions
of this Agreement, the Parties agree:
AGREEMENT
1.Term and Termination. The term of this Agreement shall commence on the Effective
Date, as set forth above, and shall remain in effect until terminated by either Party upon thirty
(30) days’ prior written notice, subject to the provisions of Section 24, except that any such
termination shall not be effective until all payments, deliveries and other obligations of the
Parties under this Agreement, and any Confirmation Letters executed thereunder, have been
completed.
2.Definitions. As used in this Agreement, the following terms have the respective meanings
set forth below, unless the context otherwise clearly indicates. Other capitalized terms are
defined elsewhere in this Agreement.
“Applicable Law” means all legally binding constitutions, treaties, statutes, laws,
ordinances, rules, regulations, orders, interpretations, permits, judgments, decrees, injunctions,
writs and orders of any Governmental Authority or arbitrator that apply to the Verified Emission
Attachment B
2
Reductions or any one or both of the Parties or the terms hereof.
“ARB” means the California Environmental Protection Agency Air Resources Board, or
any successor agency thereto.
“Bankrupt” means with respect to any entity, such entity (i) files a petition or otherwise
commences, authorizes or acquiesces in the commencement of a proceeding or cause of action
under any bankruptcy, insolvency, reorganization or similar law, or has any such petition filed or
commenced against it, (ii) makes an assignment or any general arrangement for the benefit of
creditors, (iii) otherwise becomes bankrupt or insolvent (however evidenced), (iv) has a
liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect
to it or any substantial portion of its property or assets, or (v) is generally unable to pay its debts
as they fall due.
“Business Day" means any day, except a Saturday, Sunday, or any day observed as a legal
holiday by the City. A Business Day shall open at 8:00 a.m. and close at 5:00 p.m. Pacific Standard
Time or Pacific Daylight Time, as applicable.
"Confidential Information" is defined in Section 12.
“Confirmation Letter” or “Confirm” means a written confirmation materially in the form
of Exhibit A attached hereto. The Confirmation Letter constitutes part of, and is subject to, the
terms and provisions of this Agreement.
“Contract VERs” means the VERs specified in the Confirmation Letter and relating to the
GHG Reductions generated by the Project during the Vintage Year(s).
"Delivery" has the meaning specified in Section 3(b).
“Delivery Deadline” means three (3) Business Days after the Transaction Date specified
in an applicable Confirm.
“Effective Date” has the meaning given to such term in the opening paragraph of this
Agreement.
“Force Majeure” is defined in Section 21.
“Governmental Authority” means any national, federal, provincial, state, municipal,
county, regional or local government, administrative, judicial or regulatory entity operating
under any Applicable Law and includes any department, commission, bureau, board,
administrative agency or regulatory body of any government.
“GHGs” means one or more of the six greenhouse gases listed in Annex A to the Kyoto
Protocol of the UNFCCC, as amended from time to time.
“GHG Reduction” means the removal, limitation, reduction, avoidance, sequestration or
mitigation of anthropogenic GHG emissions.
“Party” or “Parties” means Buyer and Seller, individually or collectively, as applicable.
“Project” means an emission reduction project that is located in the United States or
3
Mexico, an “Offset Project” as defined by ARB, and a Project Type approved by ARB, as identified
in the applicable Confirmation Letter.
“Project Documentation” means documents, data or other information, whether in
written or electronic form, produced by Seller or to which Seller has access relating to the Project
or the Contract VERs.
“Project Type” means a Mexico Forest Protocol Project approved and registered by the
Climate Action Reserve.
“Registry” means the Climate Action Reserve or any successor registry thereto.
“Transaction” means a written agreement between the Parties in the form of an
applicable Confirmation Letter to undertake one or more Deliveries of Contract VERs, subject to
the terms of this Agreement.
“Transaction Date” means the date the Parties enter into a Transaction as specified on
the applicable Confirm.
“Unit Price” means the price in U.S. Dollars for Contract VERs set forth in the applicable
Confirmation Letter.
“VER Payment” means an amount equal to the product of the Unit Price multiplied by
the number of Contract VERs Delivered to Buyer in accordance with this Agreement.
“Verification”, “Verify” and “Verified” means the determination by a Verification
Provider that an emissions reduction meets the requirements of the Registry as evidenced by a
Verification Report and unique serial number.
“Verified Emission Reduction” or “VER” means one (1) metric tonne of CO2 Equivalent
(CO2e) of Verified GHG Reductions generated by the Project.
“Verification Provider” means an independent verification provider accredited by a
Registry (or such other verification provider proposed by Seller and accepted by Buyer in its sole
discretion).
“Verification Report” means any written report required by a Registry and prepared by a
Verification Provider reviewing and verifying that, in accordance with Project Documentation,
Registry Protocols and requirements in effect at the date of its production, the Contract VERs
have occurred during the Vintage Year and are eligible for registration in the Registry.
“Vintage Year” means, in respect of a Contract VER, the calendar year in which the
emissions reductions and removals represented thereby occurred as specified in the applicable
Confirmation Letter.
3. Purchase and Sale of Verification Emission Reductions.
a. Purchase and Sale. Subject to the terms and conditions of this Agreement, Seller
agrees to Deliver to Buyer the Contract VERs on the terms specified in an executed
4
Confirmation Letter, a form of which is attached hereto as Exhibit A. Buyer agrees
to purchase all such Contract VERs to the extent they are Delivered on or before
the specified Delivery Date for such Contract VERs.
b. Delivery. Seller shall deliver the Contract VERs to Buyer by the Delivery Deadline.
Seller will effect delivery by retiring the Contract VERS on behalf of Buyer in Seller’s
Registry account identified in the Confirmation Letter, along with the notation “on
behalf of the City of Palo Alto” or similar expression. The Contract VERs will be
deemed to be delivered upon Buyer’s receipt of an electronic confirmation from
such Registry that the relevant retirement has been completed (“Delivery”, and
variations of such term shall have their corresponding meanings.) Title to the
Contract VERs will pass from Seller to Buyer upon Delivery.
c. Project Documentation.
i. Verification Reports. Upon the written request of Buyer, Seller shall
deliver to Buyer copies of any Verification Report(s) for the Contract VERs
within ten (10) Business Days of such request.
ii. Other Project Documentation. Upon the reasonable written request of
Buyer, Seller shall provide to Buyer copies of Project Documentation (to
the extent that such Project Documentation is made available to Seller)
within ten (10) Business Days of such request. All project documentation
shall be provided in Spanish except for (a) the certificate of retirement for
the purchased VERs in the name of the City of Palo Alto, and (b) the
Verification Report, each of which shall be provided in English.
4. Price and Payment.
i. Price. Buyer agrees to buy the applicable Contract VERs from Seller at
the Unit Price specified in the applicable Confirm for each Contract VER
Delivered to Buyer. Seller agrees to pay all Registry fees associated with
the issuance and Delivery of the Contract VERs to Buyer. The Parties
agree that all prices and fees under this Agreement shall be in U.S.
Dollars, and that Seller shall be responsible for any fees associated with
conversion into U.S. Dollars.
ii. Billing and Terms of Payment.
a. Buyer will remit the VER Payment to Seller net thirty (30) days
after the date Buyer receives a properly prepared and accurate
invoice sent to Buyer’s address for Contract VERs that have been
Delivered. Buyer has no obligation to make payment for any
Contract VERs that have not been Delivered in accordance with
Section 3(b).
5
b. An invoice that is properly prepared shall include at a minimum:
i. Seller’s complete name and address where payment is to
be remitted;
ii. Buyer’s complete name and address where bill is to be
sent;
iii. The Unit Price;
iv. The VER Payment;
v. Invoice date;
vi. Terms of payment, including any applicable discount
calculations; and
vii. Tax amount/rate information, if applicable.
c. Payment may be made by wire transfer. Payment by check
shall be considered made when received by Seller.
Wiring instructions:
Bank Name: BANCO MERCANTIL DEL NORTE S.A.
(BANORTE)
Bank SWIFT: MENOMXMT
Account Name: INTEGRADORA DE COMUNIDADES
INDIGENAS Y CAMPESINAS DE OAXACA
Account Number: 0335990740
iii. Taxes and Fees.
a. Seller will pay all taxes and fees arising prior to Delivery.
b. Seller will pay all mandatory taxes and fees arising out of the
transactions contemplated by this Agreement levied by a
government or other competent public taxing authority on the
transfer of the Contract VERs to Buyer, including any sales tax (if
applicable).
c. Each Party will pay for its own income, property or ad valorem
taxes.
5. Events of Default.
A Party is in default hereunder if that Party does any of the following (each an “Event of
6
Default”):
a. the failure of any Party to make any payment when due if such failure is not
remedied within thirty (30) days after receipt of written notice of such failure,
provided that if the Buyer, in good faith, disputes all or any portion of the
payment, the Buyer shall pay only that portion of the payment that it does not
dispute;
b. in the case of Seller, if by the applicable Delivery Deadline, Seller fails to Deliver to
Buyer any Contract VERs specified on an executed Confirmation Letter and that
failure is not remedied within five (5) Business Days of Buyer giving notice of that
failure, and such failure is not due to Force Majeure or Buyer’s failure to accept
such Contract VERs following proper Delivery;
c. any representation or warranty provided by either Party herein that shall prove
to have been false or misleading in any material respect when made or repeated;
d. the failure by a Party to perform any covenant or agreement set forth in this
Agreement and applicable Confirmation Letters and incorporated exhibits (other
than its obligations to make any payment or obligations which are otherwise
specifically covered as a separate Event of Default), and such failure is not cured
within fifteen (15) Business Days after written notice thereof to the affected Party;
e. the Party becomes Bankrupt; or
f. the failure by either Party to comply with any of its material obligations under this
Agreement and that failure is not remedied within thirty (30) days of the other
Party giving notice of that failure.
6. Remedies for Default.
In the event of an Event of Default by either Party, the non-defaulting Party may
terminate this Agreement and all of the applicable Confirmation Letters
immediately upon written notice to the defaulting Party. Upon a valid termination
under this provision, Seller (if the non-defaulting Party) will have no further
obligation to Deliver additional Contract VERs to Buyer, and Buyer (if the non-
defaulting Party) will have no further obligation to purchase additional Contract
VERs under this Agreement, including with respect to any applicable Confirmation
Letters that have been entered between the Parties but not yet Delivered.
Termination of the Agreement under this provision will not limit in any way any
remedies available to the Parties under this Agreement.
7. Representations.
a. Representations by Both Parties. Each Party represents and warrants to the
other Party that:
7
i. it is a legal entity, duly formed and validly existing and in good standing
under the laws of the state of its formation;
ii. it has the power and authority to enter into and perform its obligations
under this Agreement;
iii. by entering into this Agreement, it will not breach the material terms of
any contract with a third party;
iv. it is not relying upon any representations of the other Party other than
those expressly set out in this Agreement;
v. it has entered into this Agreement after a full opportunity to review its
terms and conditions, has a full understanding of those terms and
conditions and or their risks, and is capable of assuming those risks; and
vi. this Agreement constitutes a legal, valid and binding obligation on it
enforceable in accordance with its terms by appropriate legal remedy.
b. Seller’s Representations to Buyer. Seller hereby represents and warrants to
Buyer that:
i. it has not sold, transferred, assigned, licensed, disposed of or encumbered
(nor become legally obligated to do the same) any right, title or interest in
the Contract VERs covered by an applicable Confirm to any person other
than Buyer and other than as contemplated in this Agreement;
ii. Seller conveys the Contract VERs to Buyer free and clear of any liens,
encumbrances, claims, security interests, or title defects;
iii. it has the right to transfer the Contract VERs covered by an applicable
Confirm to Buyer;
iv. it has good title to each Contract VER and it obtained and possessed, or
will obtain and possess at the time of transfer, the Contract VERs
lawfully;
v. any Project-related data provided to Buyer is true and correct to the best
of Seller’s knowledge, information and belief;
vi. each Project agreed to under applicable Confirmation Letters to this
Agreement is in substantial compliance with all applicable material laws
and regulations, including permit requirements for the operation of such a
Project;
vii. no authorization, consent, notice to or registration or filing with any
governmental authority is required for the execution, delivery and
performance by Seller;
viii. none of the execution, delivery and performance by Seller conflicts with
8
or will results in a breach or violation of any contract or instrument to
which such Seller is a party of is bound;
ix. there are no proceedings by or before any governmental authority, now
pending or (to the knowledge of Seller) threatened, that if adversely
determined could have a material adverse effect on Seller’s ability to
perform Seller’s obligations hereunder;
x. the Contract VERs covered by an applicable Confirmation Letter have not
been used by Seller or any third party to meet any international, federal,
state or local requirement, renewable energy procurement, renewable
portfolio standard or other mandate;
xi. Seller will not offer, sell, transfer, dispose, encumber or otherwise deal in
the GHG Reductions associated with the applicable Contract VERs other
than as provided herein;
xii. the Contract VERs are, and will be at the time of Delivery, validly issued
and in force in accordance with the protocols of the Registry specified in
the applicable Confirmation Letter;
xiii. the Contract VERs are, and will be immediately prior to Delivery, duly
registered to Seller in the Registry specified in the applicable Confirmation
Letter;
xiv. neither the Seller, nor any of its associated or parent organizations or
affiliates or its customers, has claimed (or will claim) directly or indirectly,
including on any voluntary or mandatory greenhouse gas registry program
(including EPA Climate Leaders), any of the Contract VERs to be Delivered
under this Agreement or any associated GHG Reductions, carbon
reductions, offsets, or benefits as part of its own carbon inventory,
footprint, or other carbon statement or declaration as anything other than
sold to Buyer. Any such reporting of emissions or emissions reductions
shall include as Seller's emissions an amount equal to the VER Quantity and
Vintages of the Contract VERs sold hereunder, and indicate their sale to
Buyer;
xv. the Contract VERs have been Verified by the Verification Provider in a
Verification Report for the Vintage Year(s);
xvi. no document or information supplied by Seller in connection with this
Agreement contains any untrue statement or omits to state a material fact
necessary in order to make such document not misleading; and
xvii. Delivery shall occur within the United States, and there are no federal,
state or local fees, taxes, levies or assessments related to the importation
of Contract VERs into the United States.
9
8. Obligations and Liabilities.
a. This Agreement sets out the full extent of the Parties’ obligations and liabilities
arising out of or in connection with this Agreement, and there are no conditions,
warranties, representations or terms, express or implied, that are binding on the
Parties except as specifically stated in this Agreement. Any condition, warranty,
representation or other term which might otherwise be implied into or
incorporated in this Agreement, whether by statute, common law or otherwise, is
hereby expressly excluded.
b. Save as expressly provided otherwise in this Agreement, neither Party will be liable
under or in connection with this Agreement for any loss of income, loss or profits
or loss of contracts, or for any consequential, incidental, punitive, exemplary, or
indirect losses or damages in tort (including negligence), contract, or otherwise
pursuant to this Section 8, except for any claims indemnified pursuant to Section
9.
9. Indemnification
a. Indemnification of Buyer: To the fullest extent permitted by Applicable Law, Seller
agrees to protect, defend, hold harmless and indemnify Buyer, its City Council,
commissioners, officers, employees, volunteers and agents from and against any
claim, injury, liability, loss, cost, and/or expense or damage, including all costs and
reasonable attorney’s fees in providing a defense to any claim arising therefrom,
for which Buyer shall become liable arising from Seller’s acts, errors, or omissions
with respect to or in any way pursuant to this Agreement and subsequent
transactions and related Confirmation Letters, except for claims, liabilities and
damages caused by the Buyer’s sole negligence or willful misconduct.
b. Indemnification of Seller: To the fullest extent permitted by Applicable Law, Buyer
agrees to protect, defend, hold harmless and indemnify Seller, its board of
directors, officers, employees, volunteers and agents from and against any claim,
injury, liability, loss, cost, and/or expense or damage, including all costs and
reasonable attorney’s fees in providing a defense to any claim arising therefrom,
for which Seller shall become liable arising from Buyer’s negligent, reckless or
wrongful acts, errors, or omissions with respect to or in any way connected with
the maintenance, assistance and services performed by Buyer pursuant to this
Agreement and subsequent and related Confirmation Letters, except for claims,
liabilities and damages caused by the Seller’s comparative negligence or willful
misconduct.
10
10. Relationship of the Parties.
The relationship of the Parties under this Agreement is that of independent
contractors. The Parties specifically state their intention that this Agreement is not
intended to create a partnership or any other co-owned enterprise unless specifically
agreed to by the Parties in a separate written instrument. Except as specifically
provided herein, each Party shall continue to have the right to contract independent
of the other Party with individuals and entities. Each Party shall be responsible for its
own operating expenses and personnel expenses.
11. Notices.
All notices required or permitted to be given hereunder in writing shall, unless
expressly provided otherwise, be in writing, properly addressed, postage pre-paid and
delivered by hand, facsimile, certified or registered mail, courier or electronic
messaging system to the appropriate address as either Party may designate from time
to time by providing notice thereof to the other Party.
If to Buyer: If to Seller:
250 Hamilton Ave. Eucaliptos 307-A__________
Palo Alto, CA 94301 Colonia Reforma______________
Attention: City Clerk Oaxaca de Juárez, Oaxaca
Phone: 650-329-2571 C.P 68050 ______________
Fax: 650-328-3631 TEL/FAX 9515743391
With a copy to:
250 Hamilton Ave.
Palo Alto, CA 94301
Attention: Director of Utilities
Phone: 650-329-2277
Fax: 650-329-2154
Notices delivered by facsimile or by an electronic messaging system shall require
confirmation through a reply facsimile or electronic message.
12. Confidential Information.
11
a. “Confidential Information” shall mean and include information consisting of
documents and materials of a disclosing Party and/or any other technical, financial
or business information of or about a disclosing Party which is not available to the
general public, as well as all information derived from such information, which is
furnished or made available to the other Party and is clearly labeled, marked or
otherwise identified as “confidential” or “proprietary information.”
b. The disclosing Party is the Party to whom the Confidential Information originally
belongs and who shall, after appropriate notice from the receiving Party, bear the
burden of pursuing any legal remedies to retain the confidential status of the
Confidential Information, as set forth in Section 12(e), below.
c. Confidential Information disclosed by either Party to the other shall be held by
the receiving Party in confidence, and shall not be:
i. used by the recipient to the detriment of the disclosing Party; or
ii. made available for third parties to use.
d. Each Party will direct its employees, contractors, consultants and representatives
who have access to any Confidential Information to comply with all the terms of
this Section. Information received by the receiving Party shall not be Confidential
Information if:
i. it is or becomes available to the public through no wrongful act of the
receiving Party;
ii. it is already in the possession of the receiving Party and not subject to
any confidentially agreement between the Parties;
iii. it is received from a third party without restriction for the benefit of the
disclosing Party and without breach of this Agreement;
iv. it is independently developed by the receiving Party; or
v. it is disclosed pursuant to a requirement of law or a duly empowered
government agency or a court of competent jurisdiction after due notice
and an adequate opportunity to intervene is given to the disclosing Party,
unless such notice is prohibited.
e. Seller acknowledges that City is a public agency and is subject to the requirements
of the California Public Records Act Cal. Gov. Code section 6250 et seq. Seller may
submit Confidential Information to the City pursuant to Section 12(a), above and
the City will maintain such identified documents as confidential to the fullest
extent allowed by law. However, upon request or demand from any third person
or entity not a party to this Agreement (“Requestor”) for production, inspection
12
and/or copying of information designated by a disclosing Party as Confidential
Information, the receiving Party shall notify the disclosing Party that such request
has been made in accordance with Section 12 of this Agreement. Upon receipt of
this notice, the disclosing Party shall be solely responsible for taking whatever
legal steps may be necessary to protect the information deemed by it to be
Confidential Information and to prevent release of information to the Requestor
by the receiving Party. If within ten (10) days after receiving the foregoing notice
from the receiving Party, the disclosing Party takes no such action, the receiving
Party shall be permitted to comply with the Requestor’s demand and is not
required to defend against it.
f. Upon termination or expiration of this Agreement, the receiving Party shall, at the
disclosing Party’s direction, either return or destroy all of the disclosing Party’s
Confidential Information and so certify in writing. The obligations of this provision
will survive for one (1) year after any termination or expiration of this Agreement.
13. Publicity and Disclosure.
Seller shall not use the name, tradename, trademarks, service marks of or owned by
Buyer, or logos of Buyer, or share Confidential Information in any publicity releases,
news releases, annual reports, product packaging, signage, stationery, print literature,
advertising, websites or other media without securing the prior written approval of
Buyer. Seller shall not, without the prior written consent of Buyer, represent, directly
or indirectly, that any product or service offered by Seller has been approved or
endorsed by Buyer. Seller agrees that Buyer may make oral and written reports and
other communications regarding this Agreement and subsequent Contract VER
Transactions to the Palo Alto City Manager, City Council and other public officials as
required by law, which reports and communications will be public reports and
communications.
14. Nondiscrimination.
As set forth in Palo Alto Municipal Code section 2.30.510, Seller agrees that in the
performance of this Agreement, it shall not discriminate in the employment of any
person because of the race, skin color, gender, age, religion, disability, national origin,
ancestry, sexual orientation, housing status, marital status, familial status, weight or
height of such person. Seller acknowledges that it has read and understands the
provisions of Chapter 2.30 of the Palo Alto Municipal Code relating to
Nondiscrimination Requirements and the penalties for violation thereof, and agrees
to meet all requirements of Chapter 2.30 pertaining to nondiscrimination in
employment, including completing the form furnished by Buyer and set forth in
Exhibit B.
15. Choice of Law.
13
The laws of the State of California shall be applied and be controlling for all purposes
and all matters relating to this Agreement. In the event that an action is brought, the
Parties agree that trial of such action will be vested exclusively in the United States
District Court for the Northern District of California in the County of Santa Clara, State
of California.
16. Entire Agreement.
This Agreement constitutes the entire agreement between the Parties relating to
the subject matter hereof and supersedes all prior agreements, understandings,
negotiations, whether oral or written, of the Parties.
17. Amendments.
Except to the extent herein provided, no amendment, supplement, modification,
termination or waiver of this Agreement shall be enforceable unless executed in
writing by the Party to be bound thereby.
18. Assignment.
This Agreement is binding on any successors and assigns of the Parties. Neither Party
may otherwise transfer or assign this Agreement, in whole or in part, without the
other Party’s written consent. Such consent shall not be unreasonably withheld,
conditioned or delayed.
19. Non-Waiver; No third Party Beneficiaries.
No waiver by any Party of any of its rights with respect to the other Party or with
respect to this Agreement or any matter or default arising in connection with this
Agreement, shall be construed as a waiver of any other right, matter or default. Any
waiver shall be in writing signed by the waiving Party. No payment, partial payment,
acceptance or partial acceptance by Buyer will operate as a waiver on the part of the
Buyer of any of its rights under the Agreement. This Agreement and subsequent
Confirmation Letters are made and entered into for the sole benefit of the Parties,
and their permitted successors and assigns, and no other Person shall be a direct or
indirect legal beneficiary of, have any rights under, or have any direct or indirect cause
of action or claim in connection with this Agreement.
20. Severability.
In the event that any provision of the Agreement is found to be void or unenforceable,
14
such findings shall not be construed to render any other provision of the Agreement
either void or unenforceable, and all other provisions shall remain in full force and
effect unless the provisions which are void or unenforceable shall substantially affect
the rights or obligations granted to or undertaken by either Party.
21. Force Majeure.
Neither Seller shall be liable in any respect for failure to Deliver the Contract VERs to
Buyer, nor Buyer shall be liable in any respect for failure to accept the Contract VERs
from Seller, if such performance is hindered or prevented, directly or indirectly, by an
event beyond the reasonable control of either Party, including, without limitation,
war, public emergency or calamity, fire, earthquake, Acts of God, strikes, labor
disturbance or actions, civil disturbances or riots, litigation brought by third parties
against the Parties, or any act of a superior Governmental Authority or court order.
Force Majeure may not be based on (i) Seller’s ability to sell the Contract VERs to
another at a price greater than the Unit Price specified in the Confirmation Letter, (ii)
Buyer’s inability economically to use the Contract VERs, or (iii) Buyer’s ability to
purchase Contract VERs at a price less than the Unit Price specified in the Confirmation
Letter.
22. Exhibits.
The exhibits attached hereto are incorporated into this Agreement by reference. The
exhibits may only be revised upon mutual written agreement between the Parties
unless otherwise specified in the exhibits.
23. Compliance with the Law.
Each Party will comply with all lawful federal, state and local law, ordinances,
resolutions, rate schedules, rules and regulations that may affect its rights and
obligations under the Agreement.
24. Fiscal Provisions.
The Transactions under this Agreement are subject to the fiscal provisions of the
Charter of the City of Palo Alto and the Palo Alto Municipal Code. The Agreement and
all related Confirmation Letters and Agreements will terminate without penalty (i) at
the end of any fiscal year in the event that funds are not appropriated for the following
fiscal year, or (ii) at any time within a fiscal year in the event that funds are only
appropriated for a portion of the fiscal years and funds for the City’s obligations are
no longer made available. This provision will take precedence in the event of a conflict
with any other term or condition of the Agreement or a Confirm.
15
25. Interpretation.
In this Agreement, unless the context requires another meaning, a reference:
a. to any document (including this Agreement) is to that document as varied,
amended, novated, ratified or replaced from time to time;
b. to any Party includes that Party’s executors, administrators, successors and
permitted assigns, including any person taking by way of novation and, in the
case of a trustee, includes any substituted or additional trustee;
c. to the singular includes the plural and vice versa, and to a gender includes all
genders;
d. to the Sections are inserted for convenience of reference only and do not affect
the interpretation of this Agreement;
e. to a Confirmation Letter is to the active Confirmation Letter; and
f. tf there is any conflict between the provisions of an applicable Confirmation
Letter and any other provisions of this Agreement, if it has been signed by both
Parties, the terms of that Confirmation Letter will prevail.
IN WITNESS WHEREOF, each of the Parties hereto acknowledge that they have read the terms
and conditions contained herein, understand and agree to the same and agree to be bound
thereby and have caused this Agreement to be executed in duplicate originals by its duly
authorized representative on the respective dates entered below.
CITY OF PALO ALTO
(“BUYER”)
__________________________
City Manager
APPROVED AS TO FORM:
Integrator of Campesino and Indigenous
Communities of Oaxaca (ICICO AC)
(“SELLER”)
By: __________________________
Name: C. Netzar Arreortúa Martínez
16
__________________________
Assistant City Attorney
APPROVED:
__________________________
Director of Administrative
Services
__________________________
Director of Utilities
Title: Administration Council President
Taxpayer Identification No. ICI120626GB3
17
EXHIBIT A
VERIFIED EMISSION REDUCTIONS CONFIRMATION LETTER
PRO FORMA
The following describes a Transaction between Buyer and Seller for the sale, purchase and
delivery of Contract VERs pursuant to the terms and conditions of the Verified Emission
Reductions Purchase and Sale Agreement (“Agreement”) between the City of Palo Alto and
Integrator of indigenous and peasant communities of Oaxaca (ICICO AC) dated May 27th 2021.
Initially capitalized terms used and not otherwise defined herein are defined in the
Agreement.
Basic Commercial Terms:
Transaction Date:
Seller: Integrator of indigenous and peasant
communities of Oaxaca (ICICO AC)
Buyer: City of Palo Alto
Product: VERs
Registry: Climate Action Reserve
Project Name and Registry ID: CAR 1399; CAR 1411; CAR 1443
Project Location: La Trinidad, Ixtlán (CAR1399); Santiago Xiacuí
(CAR1411); San Miguel Maninaltepec (CAR1443)
Vintage Year(s): 2019, 2020
Quantity of Contract VERs: 24,000
Unit Price ($/VER): $9.50
VER Payment ($): $228,000
This Confirmation Letter is executed pursuant to and in accordance with the Agreement, and
constitutes part of and is subject to the terms and provisions of the Agreement.
The Parties agree to the Transaction set forth herein.
City of Palo Alto (“Buyer”) Integrator of indigenous and peasant
communities of Oaxaca (ICICO AC) (“Seller”)
Signature
Signature
Name Name C. Netzar Arreortúa Martínez
18
Title Title Administration Council President
Date Date
19
EXHIBIT B
CERTIFICATION OF NONDISCRIMINATION
As suppliers of goods or services to the City of Palo Alto, the firm and individuals listed below
certify that they do not and will not during the course of this Agreement discriminate in the
employment of any person because of the race, skin color, gender, gender identity, age, religion,
disability, national origin, ancestry, sexual orientation, pregnancy, genetic information or
condition, housing status, marital status, familial status, weight or height of such person and that
they are in compliance with all Federal, State and local directives and executive orders regarding
nondiscrimination in employment.
THE INFORMATION HEREIN IS CERTIFIED CORRECT BY SIGNATURE(S) BELOW.
Authorized Signature:____________________________________________________
Date: _____________________
September 27, 2017
Climate Action Reserve Mexico Forest Protocol
Comparison to ARB Compliance Offset Protocol
The Climate Action Reserve (Reserve) adopted Version 1.5 of the Mexico Forest Protocol (MFP)
in September 2017. The Reserve initially envisioned that the MFP would be a simple adaption of
the Reserve’s Forest Project Protocol, which was adapted in 2011 by the California Air Resources
Board (ARB) to be the Compliance Offset Protocol for U.S. Forest Projects. However, due to
differences in laws and conditions in Mexico, more than a simple adaptation was required. The
Reserve thus modified certain methodologies for Mexico forest projects, while still ensuring that
the MFP complies with the Reserve’s rigorous standards for greenhouse gas quantification that
ensure that all offsets generated are real, additional, permanent, quantifiable and verifiable. The
primary modifications made to the MFP, as compared to the Reserve’s Forest Project Protocol
or the ARB’s compliance protocol, are detailed below.
•Permanence: Permanence is defined as a period of 100 years in both ARB’s compliance protocol
and the MFP. In order to comply with this principle, the compliance protocol requires that each
forest owner sign a contract for 100 years. In Mexico, however, the Agrarian law does not
permit communities and ejidos to sign a contract for longer than 30 years. In order to comply
with the permanence period of 100 years, the Reserve employed tonne-year accounting, which
proportions credits by the amount of time each tonne of carbon is secured by contract
proportionate to 100 years and the radiative forcing coefficient for maintaining that tonne out
of the atmosphere for each year.
•Permitted activities: The ARB compliance protocol permits crediting for improved forest
management, reforestation or avoided emissions. Each project under ARB’s compliance protocol
must submit the project under one defined activity type. However, the Mexican Norm 173
states that avoided emissions may only be credited under a jurisdictional accounting framework
such as REDD or REDD+. For this reason, the MFP only permits crediting for enhanced carbon
sequestration, such as improved forest management or reforestation. The MFP further permits
each project to implement various carbon enhancing activities under one project.
•Baseline: The ARB compliance protocol has different methodologies for establishing the
baseline based on the different project types. The improved forest management projects
require the use of a common practice, which establishes the average carbon stock for any given
region and forest type based on FIA data. A project’s baseline is then established by developing
a project-specific 100-year average for forest carbon stocks (taking into account legal and
financial feasibility) and comparing this average to common practice. In Mexico, since avoided
emissions are not credited at a project level accounting, there was no need to develop the long-
term trend for carbon stocks, nor the more complicated common practice values and
comparison. Instead, the baseline must pass a risk analysis demonstrating that the forest is at
risk of landcover conversion, and if a forest passes this analysis, the baseline for the crediting
period is calculated as the initial carbon stocks at the time of project initiation. In the MFP,
Attachment C
September 27, 2017
under no scenario can a project receive credits for carbon that was stored prior to the project’s
start date.
• Social safeguards: The Reserve developed social safeguards for communities and ejidos that
implement a forest carbon project. These safeguards ensure free, prior and informed consent,
transparency, notification and documentation, and a communal governance structure for the
project. The ARB compliance protocol does not have such social safeguards.
• GHG Sources, Sinks and Reservoirs: The ARB compliance protocol allows for crediting for carbon
stored in in-use forest products; however, the MFP does not allow for any crediting for carbon
stored in in-use forest products, maintaining a conservative quantification.
• Standardized methodology: The MFP has a standardized inventory methodology designed to
reduce costs for project implementation as well as support local employment by promoting the
use of local forest technicians to develop and maintain the carbon inventory. The MFP further
has a companion access database tool, developed by the Reserve, that project operators must
use to manage inventory data, calculate forest carbon based on approved biomass equations,
develop project baselines, and grow inventory data with the use of approved growth equations
and updated plot data. The use of the approved database tool helps to ensure quality control of
project data management as well as reduce costs for project development and verification. The
ARB compliance protocol does not have a standardized inventory methodology, nor an
approved database tool.
The Mexico Forest Protocol maintains rigorous standards for forest management and native species
protection through the development of environmental safeguards, which are similar to the
Sustainable Harvesting and Natural Forest Management criteria included in the ARB compliance
protocol. The MFP further employs similar methodologies for dealing with secondary effects,
confidence deductions, and regular monitoring and verification requirements.
All of the Reserve’s protocols, including the MFP, are based on the principles of ensuring a complete,
consistent, precise, transparent, and conservative accounting.
Oaxacan Carbon Offsets Transaction
July 7, 2021 www.cityofpaloalto.org
Attachment D
2
Background
The City has worked with its sister city Oaxaca, Mexico on
sustainability issues, and, through that process learned about a
forestry project that has produced high-quality carbon offsets
managed Integrative Organization of Oaxaca Indigenous and
Agricultural Communities (ICICO),a non-governmental
organization
In October 2017, the city purchased 17,000 carbon offsets from
ICICO.
ICICO has presented the City with a new offer to purchase
24,000 offsets
3
Transaction Opportunity
Purchase 24,000 carbon offset (15% of annual requirement) at
a price of $9.50 per ton CO2e
Since implementing the Carbon Neutral Gas Plan, CPAU has
purchased 375,000 carbon offsets at average price of $6.25 per
ton CO2e
Last RFP in January 2021 generated forestry offsets ranging in
price from $6.90 to $13.75 per ton CO2e
Staff estimates transaction to add $50,000 in cost relative to
offsets available through brokers, resulting in one dollar per
year increase for an average residential customer
4
Co-Benefits of Opportunity
The environmental projects have made local residents more
aware of the health benefits of a well-maintained ecosystem
and have provided opportunities for all community members
to become involved including women and youth.
Revenue from the sale of carbon offsets funded fire
protection, tree care, fresh water spring recharge, and
transportation and equipment for local schools.
5
Recommendation
Staff recommends the Utility Advisory Commission and
Finance Committee recommend that the City Council
(Council):
1.Adopt the attached resolution (Attachment A) approving the
Verified Emission Reduction Agreement (VER Agreement)
with the Integrative Organization of Oaxaca Indigenous and
Agricultural Communities (ICICO); and
2.Delegate to the City Manager, or his designee, the authority
to execute on behalf of the City the VER Agreement
(Attachment B) with ICICO.
Micah Babbitt & Karla Dailey
Resource Planner and Senior Resource Planner
Micah.babbitt@cityofpaloalto.org, karla.dailey@cityofpaloalto.org
City of Palo Alto (ID # 12285)
Utilities Advisory Commission Staff Report
Report Type: New Business Meeting Date: 7/7/2021
City of Palo Alto Page 1
Summary Title: Advanced Metering Infrastructure Project
Title: Staff Recommend That the Utilities Advisory Commission Recommend
the City Council Approve the Use of the Electric Special Project Reserves in an
amount Not-to-Exceed $18.5M to Fund the Smart Gr id Technology
Installation Project (EL -11014) for Advanced Metering Infrastructure (AMI)
Implementation-Related Expenditures
From: City Manager
Lead Department: Utilities
Recommendation
Staff recommend that the Utilities Advisory Commission Recommend that City Council Approve the use
of the Electric Special Project reserves to fund the Smart Grid Technology Installation Project (EL -
11014) in an amount not to exceed $18.5M, as follows:
1.Transfer up to $7.6M from the Electric Special Project (ESP) reserves to the Smart Grid
Technology Installation Project (EL-11014) for Electric Advanced Metering Infrastructure (AMI)
and smart grid-related expenditures;
2.Transfer up to $7M from the ESP reserves to the Smart Grid Technology Installation Project (EL-
11014) for Water AMI and smart grid-related expenditures as an inter-fund loan with a
repayment term of 5-years with prevailing interest, upon completion of the project; and
3.Transfer up to $3.9M from the ESP reserves to the Smart Grid Technology Installation Project
(EL-11014) for Gas AMI and smart grid-related expenditures as an inter-fund loan with a
repayment term of 5-years with prevailing interest, upon completion of the project.
Executive Summary
In 2018, the Utilities Advisory Commission (UAC) and City Council approved the Smart Grid Assessment
and Technology Implementation Plan and supported implementation of the Advanced Metering
Infrastructure (AMI) project. AMI is a foundational technology that is becoming a standard in the
utilities industry to implement smart grid systems designed to improve customer experience,
strengthen system reliability, enable City of Palo Alto Utilities (CPAU) to operate more effectively, and
enable the community to meet its environmental sustainability and resiliency goals.
To implement AMI, staff identified detailed business requirements and issued a request for proposal to
Staff: Shiva Swaminathan
and Dave Yuan
City of Palo Alto Page 2
potential AMI systems and installation vendors. After evaluating 13 proposals, staff recommends
Sensus USA Inc, for their AMI system and equipment installa tion services, and N. Harris Computer
Corporation for their SmartWorks Meter Data Management Software (MDMS). Staff also recommends
a contract amendment with E Source Companies to assist CPAU with project management, change
management, system integration, support for testing and training, and field oversight throughout the
project from 2021 through 2025. The combined initial (capital) costs of these three contracts are
estimated at between $16.5 and $18.5 million, depending on the use of $2M in contingency funds. An
additional $2 million in expenditures is projected over the 5 to 10-year term of the contracts for on-
going annual software and hosting services, bringing the total contact amount to $20.5 million over the
life of the contracts.
The Electric Special Projects (ESP) reserve fund is in place to fund major one -time electric utility
expenditures, including the AMI project. Hence staff recommend using up to $7.6 million from ESP
reserves to cover the electric share of the AMI project, and for the ESP lend up to $10.9 million to
cover the gas and water share of the project, with a plan to repay the loan with interest at the
prevailing interest rate (currently 2.15%) within 5 years after project completion. The use of ESP for
this project is within the ESP reserve guidelines approved by UAC and Council in 2015 (Staff Report
#5716).
Background
In November 2018, the City Council approved the Utilities Smart Grid Assessment and Technology
Implementation Plan (Staff Report # 9780). The assessment recommended the implementation of
Advanced Metering Infrastructure (AMI) based smart grid systems for the benefit of electric, natural
gas and water utility customers.
AMI is a foundational technology that is becoming a standard in the utilities industry and will improve
customer experience while enabling CPAU to operate more effectively. An AMI-based smart grid
system will empower customers to more efficiently utilize utility supplies, facilitate customer adoption
of distributed energy resources (DER) such as solar photovoltaics, energy storage, and electric vehicles,
and enable the timely detection of water leaks. AMI will also enable CPAU to optimize operations and
improve reliability by reducing restoration time for outages. AMI will be a critical system to meet the
community’s greenhouse gas reductions goals by enabling time-of-use (TOU) electricity rates and to
encourage the use of electrical appliances and charging EVs during periods of the day when el ectricity
cost is low.
Given the large investment required to implement an AMI system, a cost -benefit analysis was
undertaken in 2018 period to determine financial viability of AMI, assess staffing requirements, and
consider technological dependencies, project risks, and CPAU’s operational readiness. The analysis
found that the overall net-present-value (NPV) of the investment over the 18- year life of the system
was close to break-even, considering only the costs and benefits that can be quantified. This effectively
means that there will be little or no impact on utility cost to customers over the 18-year life of the
project. Upon including non-quantifiable benefits such as enhanced customer experience, improved
system reliability, and better distribution asset utilization, the analysis suggests that this strategic
City of Palo Alto Page 3
investment would be a net benefit to all utility customers, particularly for the electricity and water
utility customers. The estimated capital cost related to the AMI system installation was ap proximately
$16 to $19 million with an investment life of 18 years. The evaluation also analyzed the operational
impact and found that the investment will require a few staffing changes to implement and maintain
the AMI infrastructure to maximize the value of the investment. The annual operating cost of the AMI
system is estimated to be $1.9 million, which would be offset by $3.3 million in benefits estimated to
accrue from electricity and water use conservation, and current staffing related savings. The re sult is
projected to be a net monetary benefit to of $1.4 million per year on an ongoing basis.
The UAC and Council acceptance in 2018 of staff’s recommendation to invest $16 to $19 million in AMI
technology was based on a financial and economic analysis undertaken by expert consultants and the
experience gained by CPAU after implementing the CustomerConnect AMI pilot in 2013-18
Discussion
I. RFP Issuance, Vendors Selection, and Contract Negotiations to Implement AMI Project
Following Council’s acceptance of staff’s recommendation to invest in AMI technology in November
2018, staff retained consultants to assist with soliciting AMI systems vendor proposals. On March 31,
2020, a Request for Proposal (RFP) Number 177782 for ‘Equipment, Software, and Services for an
Advanced Metering Infrastructure Project’ was issued. Staff received 13 proposals ranging from one to
five components identified in the RFP: AMI network, water metering, gas metering, installation
services, and meter data management system. The proposers were asked to submit a proposal on a
single project component, multiple project components, or all five components. Proposers were also
permitted to submit a joint proposal for one or more project components, to provide a proposal that
best meets the City’s stated needs.
Component Number Component Name Component Description
1 AMI Field Area Network
(“FAN”)
Equipment, software, and services capable of delivering billing
and interval reads from customer meters, including
networking infrastructure components and the installation
thereof, AMI-integrated electric meters, water and gas
endpoints/modules, and other ancillary equipment (batteries,
water meter pit lids, etc.) necessary to attain functionality;
additionally, integration services to tie the AMI headend to
other business-critical systems
2 Water Metering Water meters, registers, and lids
3 Gas Metering Gas meters and indices
4 Installation Services Installation services for electric meters, AMI
endpoints/modules, and other ancillary metering equipment
(water and gas meters, water meter registers, gas meter
indices, lids, boxes, etc.) related to the AMI Project;
additionally, procurement of ancillary equipment, such as
water meter boxes, as-needed upon request
5 Meter Data Management
System (“MDMS”)
Software and services for the long-term retention, validation,
estimation, and editing of meter reads, as well as advanced
analytic tools for the data; additionally, integration services to
tie the MDMS to other business-critical systems
City of Palo Alto Page 4
Staff and the consultant assembled a cross-functional AMI project team consisting of members from
Adminstration, Customer Service, Engineering, IT, Operations and Resource Management. The team
met for eight months reviewing each proposal, interviewing vendors, participating in vendor
demonstrations and presentations, and conducting customer reference calls.
The proposals were evaluated based on the following criteria. It was also specified that the weights
associated with the criteria would be different for the five components of the RFP.
1. Quality and completeness of Proposal
2. Quality, performance and effectiveness of the solution
3. Proposer’s experience
4. Cost to the City
5. Proposer’s financial condition and stability
6. Proposer’s ability to perform the requirements within the time specified
7. Proposer’s prior record of performance with City or other agencies
8. Proposer’s ability to provide future maintenance, repairs, parts and/or services
9. Proposer’s compliance with applicable laws, regulations, policies
10. Whether or not the Proposal is Turnkey; existence of synergies with existing
City systems
The selected vendors have a proven history of AMI experience in the municipal sector with electric,
gas, and water meters in California. The solutions and services they offered were the best fit for the
City in the near term and for future business requirements.
II. AMI Technology
AMI system provided by Sensus USA Inc. was selected. This system consists of five elements:
1. A 900 MHz point-to-multipoint network over FCC licensed radio band.
o Five network poles will be erected at Hale Well Station, Peers Park Pump Station, Maybell
Substation, Montebello Reservoir, and East Meadow Substation to receive wirelessly
transmitted meter data from ~74,900 electric, gas and water meters.
o There will be a total of 10 collector radios, ranging from one to three collectors per site,
powered at 8 Watts, and are expected to collect meter data continuously and transmit every
fifteen minutes.
o Network and meter communication is secured via fiber backhaul and AES-256 encryption and the
system meets all relevant NIST standards.
2. Approximately 27,100 Sensus residential/small commercial electric meters and ~2,900 Aclara kV2C
commercial electric meters, both with Sensus radios, will replace all ~30,000 of the existing
electric meters.
o The 2 Watt-powered radio embedded in a meter is expected to transmit data (15 -minute
energy consumption and voltage data) on a hourly basis, but ~0.1 second each time. The
customer consumption information will be made available to customers the day-after, on a
hourly interval basis for electricity consumption and daily intervals for water/gas consumption.
City of Palo Alto Page 5
o On an optional basis the electric meters can have an embedded Zigbee radio, which when
turned on by CPAU at customers request, will be able to communicate meter reading data
within the home via a in-home-display (IHD) or wi-fi enabled gateway to a customer selected
IHD/gateway service provider.
o Some electric meters will also have a remote disconnect switch. This feature could be used to
turn off or limit the current flow to a delinquent customer. This feature will lower CPAU
operating costs of travelling to customer site for customer turn -off or move outs.
o Replacement of the electric meter will result in a momentary outage for the customer.
Customers will be notified in advanced of the electric meter replacement.
3. Approximately 20,798 water meters will be retrofitted with Sensus water meter end-point radios.
o Water meter radios are powered by batteries that are warrantied for 15-20 years and transmit
to the collector at 2 Watts, 6 times a day, with transmission lasting ~ 0.1 seconds each time.
o Approximately 9,000 water meters are older than 20 years and are due for replacement with
CPAU’s preferred Badger meters. To achieve operational efficiencies and economies related to
installation, these older water meters will be replaced when AMI radios are installed at those
locations. CPAU will directly purchase the Badger water meters from the manufactuer and
provide them to Sensus for installation along with Sensus water end-point radio.
o Since the water meters will be procured by CPAU, outside the Sensus contract and are not
directly related to the AMI project, these cost are not included in this report nor included as
part of the AMI capital budget. Instead, these water meter replacements will be charged
against the Water Meter Replacement CIP (WS-80015). Due to staffing constraints in previous
years, CPAU has accumulated a large backlog of aged water meters in need of re placement.
Water meter box lids will also be replaced or retrofitted to accommodate a mushroom shaped
radio attenna that is mounted flush with the lid to provide a clear path for communication.
4. Approximately 24,208 of existing gas meters will be retrofitted with Sensus gas meter end-point
radios.
o Gas meter radios are powered by batteries that are warrantied for 20 years and transmit to the
collector at 2 Watts, 6 times a day, with transmission lasting ~ 0.2 seconds each time.
o The dials of the existing gas meters will be removed and be retrofitted with dials which can be
connected to the gas meter radio/antennas.
5. A cloud-based meter Head End System (HES) will store all the data collected and transmitted by the
meters. Sensus will be proving hosted HES solution for a initial 10 year period, extendable up to 20
years.
o Data centers hosting the HES are located in the U.S and communication is secured through a
VPN connection. Data is encrypted at rest including backups. All datacenters comply with SOC2
for physical security. No Personally Identifiable Information (PII) will be stored in the system.
o Sensus maintains a set of security policies that are aligned with industry standards and has
been certified by GE under the Achilles Practices Certification (APC) and Achilles
Communication Certification (ACC) programs.
o Senus is in the process of obtaining ISO 27001 certification and expects to be certified by the
City of Palo Alto Page 6
end of CY 2021.
Illustrations of these five AMI system components from Senus are provided in Attachment A.
The total capital cost associated with procuring this system is estimated at $10.4 to $11.7 million, with
an additional $90,000/year for hosting and software services .
III. Installation Services
Customer metering equipment installation services would a lso be provided by Sensus USA, under a
subcontract with Utility Partners of America (UPA). UPA is one of the leaders in providing large -scale
meter installation services. UPA served as the installation contractor for other municipal utilities in
California such as Sacramento Municipal Utility District, Eastern Municipal Water District, the City of
Long Beach Energy Services and the City of Santa Rosa. The Work Order Management System (WOMS)
to aid the management and quality control will be based on Ensight+ software.
• Ensight+ software services are hosted by Rackspace, which is SOC 1, SOC 2, SOC 3, and ISO
27001 certified; and the data is stored with AES-256 bit encryption.
• Ensight+ as a organization is in the process of being SOC2 certified by early 2022.
Installation services include replacement of electric meters, retrofitting existing water meters with AMI
radios, replacing water meter box/lids, replacement of aging water meters, retrofitting existing gas
meters with AMI radios, removal and disposal of old equipment in accordance with City’s disposal and
recycling policies.
Installation of electric meters will cause a momentary outage for the customer. Installing water and gas
radio end-point will not cause service disruptions for the customer. Replaceme nt of aging water
meters will cause a 30 to 45-minute service disruption. Timely notices, including knocking on the doors,
would be provided to customers during the mass installation phase of the project, anticipated to occur
in the 2023-24 period.
New electric meters will be tested on a sample basis. Due to the volume of meter replacement and
associated logistics, meters removed will not be tested. If customers perceive their meter to be
inaccurate, tests will be performed on the new meters.
The installation services by UPA are expected to begin in mid-2023 and projected to cost $4.3 to $4.7
million. Illustrations of the installation services that will be provided by UPA are provided in
Attachment B.
III. Meter Data Management System (MDMS)
The MDM software system will be provided by SmartWorks (a division of N. Harris Computer
Corporation) based in Ontario, Canada. They are the industry’s leading MDM provider for medium size
utilities like CPAU. The system would include the following application and s ecurity features:
• Validate, edit and estimate (VEE) metering information received from the Sensus HES and store
information as the system of meter reading records.
City of Palo Alto Page 7
• Process and provide required information to produce customer bills in the SAP CIS system; fe ed
hourly/daily consumption information to the SEW customer portal (MyCPAU) for viewing by the
customer.
• Provide information for various system analytics tasks such as outage notification, transformer
loading analysis, voltage analysis, conservation voltage program, etc.
• The software and hosting services are provided on servers operated by IBM. The hosted
software meets industry security standards:
o AES-256 encryption, FIPS (140-2), FISMA and California SB1386 compliant.
o In the process of obtaining SOC2 certification by early 2022.
o No Personally Identifiable Information (PII) will be stored in the system.
The MDMS will act as the system of record for all meter readings and customer consumption,
integrating with various other system and feeding billing, customer service, and engineering
operations. It will offer dashboards, visualizations, and analytics to view individual meters or
aggregated meters. The MDMS also provides analysis tools for water leak detection, outage map, and
transformer health. Under phase 1, the City will receive water leak detection and outage maps. The
transformer module for identification and resolution of overloaded and underloaded transformers
within the system will also be implemented. Additional features such as conservation vo ltage reduction
program are expected to be implemented in phase 2 of the AMI project in the 2026 period.
An illustration of the MDM system is provided in Attachment C.
The total capital cost associated with procuring and configuring/integrating this syst em is estimated at
$0.7 to $0.8 million, with an additional $270,000 per year for hosting and software services.
V. Project Management and Organizational Change Management Consulting Services
Staff recommend to continue utilizing the services of E Source (previously UtiliWorks Consulting) to
assist CPAU staff in managing this large specialized project. With their wide-ranging and in-depth AMI
experience, E Source had previously assisted CPAU with analyzing the cost -benefits of the AMI
investement and also assisted in soliciting vendor proposals, evaluation, and during the vendor
contract negotiations.
E Source has a proven history of working with CPAU in developing a strategic technology roadmap,
completing the AMI business case and cost-benefit analysis, and supporting procurement of advanced
metering infrastructure (AMI) and meter data management (MDM) solutions.
E Source services under the agreement will include project management, organizational change
management, system integration, testing and training support, and field services oversight. The
expenditure under this contract is projected to be $1.1 to $1.3 million.
VI. System Integration Services with Existing CPAU Technology Systems
In addition to equipment and services procured through these three contracts (four services),
additional resources will also be needed to implement this project:
City of Palo Alto Page 8
• Augmenting SAP Consultants services to integrate MDMS with the CIS/Billing system .
• Augmenting consulting services with SEW, the MyCPAU customer account manag ement portal
provider to integrate AMI data into the portal.
• Re-assigning existing staff to new roles to implement and maintain AMI systems .
• Hire temporary staff to back-fill for existing staff who will be assigned to the AMI project during
implementation phase.
The cost of these additional resources is estimated at between $1.0 and 1.5 million.
An overview of the AMI and MDM systems selected and their communications and interfaces with
CPAU’s existing technology systems are illustrated in Figure 1.
VI. Components of Project Cost & Projected Budgets
A description of the of the three contracts (for four services) that will be taken to the Council for
consideration and approval in August 2021 is provided in the table below .
City of Palo Alto Page 9
Table 1: Description of AMI Systems Hardware, Installation, Software and Consulting Services
Contracting Entity Sensus USA, Inc.
Sensus USA, Inc. &
Subcontractor
(Utility Partner of
America)
N. Harris Computer
Corporation E Source Total
Contract Description
Type of Service
AMI equipment,
software and hosting
services, integration
services, and professional
services
Meter, radio, and lid
installation services
MDMS
software through Smart
Works, integration
services, and professional
services
Consulting services
related to project
management, change
management, system
integration and field
services
Contracting Term
10 years
(additional two, 5-year
renewal option)
N/A (subcontractor to
Sensus
5 years
(additional 5-year
renewal option)
4 years
(additional 2-
year renewal option)
Costs
Implementation Cost $ 10.4 $ 4.3 $ 0.7 $ 1.1 $ 16.5
Contingency $ 1.4 $ 0.4 $ 0.1 $ 0.2 $ 2.0
Total Implementation
Cost $ 11.7 $ 4.7 $ 0.8 $ 1.3 $ 18.5
Annual Recurring Cost $ 0.1 $ - $ 0.3 $ - $ 0.4
Total NTE Amount for
Contract Term(s) $ 12.7 $ 4.7 $ 1.9 $ 1.3 $ 20.5
The total value of the approval sought from Council is $20.5 million, of which $16.5 million is related to
initial implementation, with the remaining funds accounting for annual recurring costs for the duration
of the contracts ($2.0 million) and contingency funds ($2.0 million). Of the initial implementation cost,
$12.4 million could be directly attributable to one of the three utility services, while $4.1 million are
indirect and cannot be directly attributable to any given utility service. Onging total software/hosting
charges are estimated at $360,000 per year.
Through negotiations with vendors, a savings of $345,000 was realized on vendor professional services
for implementation, as well as an additional $300,000 (over 5 years) on the annual recurring cost for
MDMS, as compared with the initial proposals submitted.
VII. Project Funding & Allocation of Costs to the Electric, Water and Gas Funds
The total implementation cost of the project is estimated at between $17.5 and $20.0 million
(including CPAU internal costs related to integration with existing systems), as outlined in the table
below. This is above the $16.7 million costs estimated by staff in 2018.
Table 2: Estimated Total Contract Cost of AMI Systems Implementation (M$)
Cost Category Cost
(Low)
Cost
(High) 2018 Estimate
Sensus – Equipment and
Software $ 10.4 $ 11.7 $ 10.8
City of Palo Alto Page 10
Sensus – UPA Installation
Services $ 4.3 $ 4.7 $ 3.0
Smart Works – MDMS $ 0.7 $ 0.8 $ 0.7
E Source – PM Services $ 1.1 $ 1.3 $ 1.2
Subtotal $ 16.5 $ 18.5 $ 15.6
Integration Services – SAP,
SEW, Backfill, etc. $ 1.0 $ 1.5 $ 1.1
Total $ 17.5 $ 20.0 $ 16.7
Installation costs increased substantially over the 2018 estimate for two primary reasons: the current
contract estimate now includes the installation cost to replace ~8,000 aging water meters, compared
with previous estimates that included water register and endpoint retrofits only. Additionally, labor
rates are dependent on determinations from California Department of Industrial Relat ions (DIR), which
have increased since the time of the estimate in 2017-18 period.
The Electric Special Projects (ESP) reserve will be used to fund the electric portion of the AMI
investment. As a result, there will be no rate impact to the electric rate payers. The gas and water funds
will cover direct cost associated with their own equipment and installation costs. Project costs that
cannot be directly allocated to one of the three utilities (indirect costs, such as project management
services, installation service mobilization cost, warehouse rental, etc. totaling $4.1 million) are
proposed to be allocated based on the ratio of each of the three utility annual revenues during FY
2020. This results in an apportionment ratio for indirect project cost of 65 % (electric), 18.5% (water)
and 16.5% (gas). With these allocations, the total baseline capital cost of the vendor contracts of $16.5
million (without contingency funds) is estimated to be allocated as follows: $6.4 million (electric), $6.4
million (water) and $3.6 million (gas). The allocation of cost, including contingency, are as follows: $7.6
million (electric), $7 million (water) and $3.9 million (gas).
To reduce the short term cashflow impacts on the gas or water funds it is also proposed that the E SP
reserve initially cover water and natural gas utility funding needs related to the AMI project, with a
repayment plan to the ESP reserve at prevailing interest rate (currently 2.15%) over a 5 -year period
upon project completion. The proposed AMI capital improvement project (CIP) budget from ESP
reserve and repayment schedule from the water and gas funds are illustrated in Table 3. The table
below illustrates the expenses of $18.5 million during the 2021-24 period and repayment in the 2025-
2029 period.
City of Palo Alto Page 11
Table 3: Illustration of Baseline AMI Funding Needs: ESP Funding and Repayment by Gas and Water
Funds (M$)
2021 2022 2023 2024 2025 2026 2027 2028 2029 Total
ESP Funding of
Expenses &
Repayment
$ 0.0 $ 3.7 $ 4.8 $ 9.9 $ (2.1) $ (2.2) $ (2.2) $ (2.2) $ (2.2) $ 7.6
Gas Fund
Repayment $ 0.8 $ 0.8 $ 0.8 $ 0.8 $ 0.8 $ 3.9
Water Fund
Repayment $ 1.4 $ 1.4 $ 1.4 $ 1.4 $ 1.4 $ 7.0
Total $ 18.5
Costs that are to be repaid to the ESP Reserve by the gas and water funds have been straight -line
amortized across a five-year period after implementation is completed.
VI. Overall Project Organizational Structure
The project will be implemented under the direction of the Stategic Business Manager and the AMI
Project Core Team headed by the AMI Project Manager. Nine AMI implementation workgroup s, with
assigned leads, will be formed to implement workstream associated with the project. These groups will
be working collaboratively with the AMI core team and the relevent external vendors throughout the
project. See Attachment D for project implementation organizational structure.
Next Steps:
Upon UAC consideration and approval of the use of ESP reserve to fund this AMI/Smart Grid project,
staff expects to take a resolution to Council for formal approval for the use of up to $18.5 million ESP
reserve funds, and the approval of the three contracts.
Timeline
UAC and Council Approval July and September 2021
Notice to Proceed Issued to Vendors September 2021 – April 2022
Installation of AMI network, initial meters Jan 2022 – June
2023
Availability of AMI System to Limited
Number of Customers
Soft Launch mid 2023
Mass Deployment of Meters June 2023 – December 2024
AMI Implementation Project Completion (Phase I) CY Q1 2025
Phase II: Begin Initiatives to Optimize AMI Investment
(e.g., conservation voltage reduction program)
CY Q3 2025
Resource Impact
In addition to the projected initial capital cost of $16.5 million to $18.5 million, the on -going annual
City of Palo Alto Page 12
operating cost for the AMI and MDMS vendor systems is estimated at $0 .36 million/year for software
licensing and SaaS support. Most of the capital costs have been included the current and projected CIP
budgets, but these may need some adjustments based on project cashflow needs over the next 3
years.
New permanent roles of AMI Manager (Utilities Supervisor), AMI Systems Technician (Business Analyst)
and MDMS Data Analyst (Business Analyst) are also anticipated to be created, from existing vacant
positions, to implement, support and manage AMI related systems. These new role s are anticipated to
be filled during the project implementation phase and the roles will take on the operation,
maintenance, and enhancement roles post Phase I implementation. Furthermore, best efforts will be
made to train and potentially reassign seven meter-reading staff to new roles since the meter reader
position will be impacted after the implementation of this technology project.
Policy Implications (If Applicable)
The recommendation conforms with the 2018 Utilities Strategic Plan (USP) that has id entified
implementation of AMI system as a key strategy under USP Priority #2 to “Invest in and utilize
technology to enhance customer experience and maximize operational efficiency.”
A number of policies to implement and operate an AMI system must be con sidered and approved as
the project implementation progresses. Such policies and procedures and related Utilities Rules and
Regulations will include: ways to accommodate customers who elect to opt out of advanced meters at
their homes, a backup customer billing process in the event AMI meters cannot be read remotely due
to a cyber-attack or a communication network interruption, etc.
Stakeholder Engagement
The need for an AMI system has been discussed with the UAC and Council since 2013, including the
implementation of a pilot AMI system in the 2013-2018.
As part of the 2018 Utilities Strategic Plan development, staff actively engaged with internal and
external stakeholders to identify priorities to be carried out by staff over the next three to five year s.
AMI was a recurring theme and identified as a strategic initiative under the “Technology” priority to
increase system reliability, enhance customer experience, improve response time and meet the
community’s sustainability goals.
Upon UAC approval and prior to Council consideration and approval staff recommendations to proceed
with implementing the AMI project, staff will undertake a concerted effort to communicate the many
facets of this project, including: customer and organization benefits and costs, project timeline and
what can customers and employees expect during different stages of the project, how will this project
impact individual staff members, staff training needs, etc. Appropriate channels will be used to
effectively communicate and engage with stakeholders.
An AMI project webpage will be set up to inform the residents and businesses about the project and its
benefits to the community. As project progresses and mass meter deployment begins in mid-2023,
City of Palo Alto Page 13
additional meter installation related communications will also be undertaken with the community.
Environmental Review
The UAC recommendation to Council of approval of the AMI project, including associated vendor
contracts and funding sources, does not meet the definition of a project under CEQA Guidelines
section 15378(b)(5) as an administrative activity of government; therefore, the California
Environmental Quality Act (CEQA) review is not required at this stage.
Attachments:
• Attachment A: Illustrative Pictures of AMI Components from Senus
• Attachment B: Illustrative Pictures from Installation Contractor UPA
• Attachment C: Illustrative Pictures of MDMS Software Features from SmartWorks
• Attachment D: AMI Project Implementation Organizational Structure
• Attachment E: AMI Presentation
City of Palo Alto Page 1
ATTACHMENT A
Illustrative Pictures of the AMI Sensus Components
Sample pictures of M400 Base Station Equipment (10 such boxes will be installed
at 5 locations in Palo Alto). The equipment will be mounted at eye-level on a 40 to
50 foot pole that will have a antenna mounted.
City of Palo Alto Page 2
The Five Base Station Locations Planned
City of Palo Alto Page 3
Maybell Substation Rendering
PROPOSED
AFTER
PROPOSED
AFTER
City of Palo Alto Page 4
METER COMPONENTS
EL
E
C
T
R
I
C
• Replace approximately 30,326 Electric Meters
GA
S
• Retrofit approximately 24,208 Gas Meters with SmartPoints
WA
T
E
R
• Replace approximately 8,369 Water Meters
• Retrofit approximately 12,429 Water Meters with SmartPoints
City of Palo Alto Page 1
ATTACHMENT B
Illustrative Pictures from Installation Contractor UPA– Subcontractor to Sensus
Beginning in mid-2023, mass replacement of electric meters is planned, along with retrofitting
existing water and gas meters with AMI radios. Approximately 40% of aging water meters will
also be replaced simultaneously. Advanced noticing, including knocking on the doors, would be
provided to customers during the mass installation phase.
Attachment C: Illustrative Pictures of MDMS Software Features from SmartWorks
The MDMS will act as the system of record for all meter readings and customer consumption
data. MDMS will be integrated with various other existing systems: customer billing, customer
service call center, outage reporting, rates analysis, and analysis to aid engineering/operations
decision making.
The system will provide hourly/daily customer consumption data to the customer via MyCPAU
portal, for customers to view their consumption the day after, to make informed and timely
decisions about their consumption of utility services.
The MDMS will offer dashboards, visualizations, and analytics to view individual meters or
aggregated meters to aid CPAU Operations.
The transformer analysis tools will support identification and resolution of overloaded and
underloaded transformers within the system to optimally upgrade transformers.
Acting as a secondary monitoring tool (after the AMI HES), the MDMS will also provide health
assurance and performance checking on the AMI network.
Water leak detection and notification feature of the MDMS will provide analysis of continuous
consumption or sudden spikes in usage.
Attachment D: AMI Project Implementation Organizational Structure
Approval of Funding from Electric
Special Projects Reserve for the
Advanced Metering Infrastructure
(AMI) & Smart Grid Project
Utilities Advisory Commission
July 07, 2021
1
Staff: Shiva Swaminathan and Dave Yuan
OF
ALTO
Discussion Outline
Project Background
Vendor Proposal Summary
AMI Systems Selected
Illustration AMI System Elements
AMI Project Implementation Timeline
Project Team and Organization Structure
Resource Needs and Funding
Request today
Next Steps
2~CITY OF
~PALO ALTO
~
l.!)
30,326 Electric Meters
• Retro it a roximatel 24,208 Gas Meters with SmartPoints
• Replace approximately 8,369 Water Meters
• Retrofit approximately 12,429 Water Meters with Smart Points
AMI Project Background
Based on economic analysis of AMI investment, Council defers AMI based smart grid projects;
approves small scale pilot projects –October 2012
AMI pilot project, CustomerConnect, implemented in 300 homes; additional smart grid pilot
projects undertaken –2013-17
Based on pilot projects results and updated economic analysis, Council approves AMI
investment plan, capital costs estimated at $16 to $19 million –November 2018
Staff retain AMI consultants, develop detailed AMI business requirements/specification, and
issues RFP –March 2020
After detailed review and analysis of 13 proposals, winning proposals chosen; in the process of
finalizing scopes of work and contracting term for 3 vendors –today
Seeking UAC approval to fund AMI Project with Electric Special Projects (ESP) reserve -today
3~CITY OF
~PALO ALTO
Vendor Proposal Summary –All Proposals
Proposer AMI Installation Meter Data Management
System (MDMS)
Aclara ✓✓✓
Anixter ✓✓✓
Hometown Connections ✓✓✓
Honeywell ✓✓✓
Landis+Gyr ✓✓
Sensus ✓✓✓
Tantalus ✓
PMI ✓
UPA ✓
ACS ✓
SmartWorks ✓
Siemens ✓
Utilismart ✓
13 proposals received for 3 types of services, of which 5 were turnkey proposals
4~CITY OF
~PALO ALTO
AMI Systems Selected: Recommended Contract Amount ~$20.5M
5
Contracting Entity Sensus USA, Inc.
Sensus USA, Inc. &
Subcontractor
(Utility Partner of
Ame rica)
N. Harris Computer
Corporation E Source Total
Contract Description
Type of Service
AMI equipment,
software and hosting
services, integration
services, and professional
services
Meter, radio, and lid
installation services
MDMS
software through Smart
Works, integration
services, and professional
services
Consulting services
related to project
management, change
management, system
integration and field
services
Contracting Term
10 years
(additional two , 5-year
renewal option)
N/A (subcontractor to
Sensus
5 years
(additional 5-year
renewal option)
4 years
(additional 2-
ye ar renewal option)
Costs
Implementation Cost $ 10.4 $ 4.3 $ 0.7 $ 1.1 $ 16.5
Contingency $ 1.4 $ 0.4 $ 0.1 $ 0.2 $ 2.0
Total Implementation
Cost $ 11.7 $ 4.7 $ 0.8 $ 1.3 $ 18.5
Annual Recurring Cost $ 0.1 $ - $ 0.3 $ - $ 0.4
Total NTE Amount for
Contract Term(s) $ 12.7 $ 4.7 $ 1.9 $ 1.3 $ 20.5
~CITY OF
~PALO ALTO
Illustration of AMI System Elements: Utility Meters, Radios, Network, Meter Headend Software,
MDMS, Utility Applications
6
V)
0
0
~
V) a:: w
I-w
:ii: } a:: w
I-
~
0 z
<(
V)
<(
~
u
ii:
I-u w
....J w
0 w u z
<(
> 0
<(
,.,. ,.,. ,, / ,.,. /
..... /
/ ,.,.
/
............ ,,...,,,,,. //
>< / ,.,. ..... / ,,,,."" ........... ./
,.,. ✓-....
/
,, / ..... .,,,,.,,... / ...............
/ ..... ------/ .............. -;-/---------......
/
/
/
/
/
,.,. ,,.
/
/
/
/
/
/
/
/
/
/
/
/
'..._/
/ ....
/
/
/
/
/
,.,. ,.,.
/
/
/
,.,. ,,.
.... / /
.,,,,......,,... ..... ...., /
,,,,."' .......... //
/
/
/
/
/
7..._
/
/
/
/
/
/
/
,.,. ,,.,.,. /
/
/
/
/
/
......... .....
~CITY OF
~PALO ALTO
1 1
\
\
en
I I ~
11
II
,a..
z
0
en
0
,0
;~
,a::
0
II-
0
IW
....J
....J
0
0
~ ,a::
0
~
II-
IW z
\
\
\
\
\
' ' '
\
\
\
' '
\
\
\
/ ,.,. ,, ,.,.
I
I
I
I
I
I
\
\
\
\
\
BACKHAUL
NETWORK
(e.g. Fi be r ,
Wire less)
METIER
HIE ADEND
SOFTWARE
(S E NSUS)
I 0
-, -
0
I
I
I METER
I
I
I
I
I
CIS I B I LLING
DATA /
OUTAGE
MANAGEMENT
MANAGIEMENT /
SYSTEM / /
SOFTWARE 1 /
(SMART WORKS)/ / / en -1[::____ G I S i
' ' -en , ', VOLTAGE & W
, '-TRANSFORMER i=
' ', LOAD I NG . ....J
\ ', ANALYSIS -~
\
\
\.
\
\
\
\
\.
\
' \
\
CUSTOMER
PORTAL
AMI Base Station Location & Communication with Meters
7
•Five Base Radio
Stations at City
Facilities Planned
•Base stations can
will communicate
with all 74,000
meters via 900 MHz
FCC licensed radio
band
Atherton
El
West
Menlo Park
@l
✓q El
ARON
GHTS Stanford / ~
" $
Jtll)J. ....
~roS@
'rf'ji,c-it,,-
,fffe
I Pearson-Arasrradero I Preserve
l... ,fffe ,_.,
• Los Altos Hill s 1,
• )
• •
Foorhilfs Park "'\,,.
Foothills , .. Preserve
Go g le
~CITY OF
~PALO ALTO
• \
l"
@:I
(§3
Shoreline Lake Park f
Rancho San
Antonio
·Pfe~erve
Googleplex •
"""
"
01
V
CUE
Loyola
Maybell Substation Rendering
AMI Components: Base Station, Electric Meters, G/W Meter Radio
8~CITY OF
~PALO ALTO
30,326 Electric Meters
• Retro it a roximatel 24,208 Gas Meters with SmartPoints
• Replace approximately 8,369 Water Meters
• Retrofit approximately 12,429 Water Meters with Smart Points
AMI Benefits
9
•Reduction in Meter Reading Cost & Meter Reader Injuries
•Reduction Field Checks & Meter Connection Cost
•Improved Meter Reading Accuracy and Reduction High Bill Complaints
•Energy & Water Conservation
•Reduced Water Leaks
•Conservation through Voltage Reduction
•Improved Outage Response Time
~CITY OF
~PALO ALTO
AMI Benefits
10
•Improved Customer Experience
•Maintain and Improve Reliability
•Gas Leak Detection
•Improved System Planning Capabilities
•Improved Asset Utilization
•Improved Water Resource Management
•Remote and timely Meter Reading
•Implementing advanced retail rates
•Unauthorized Use Detection
•Improved Safety/Reduced Workman’s
Compensation
•Compliance with Future Legislative
Requirements
~CITY OF
~PALO ALTO
AMI Project Implementation Timeline
11
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Contract
Negotiations,
Approvals /
Planning
UAC &
Council
Approval /
Planning
Planning /
Communication
Full Deployment
(18 months)
(By Route ~ 71,000 meters)
Final
Acceptance /
System
Stabilization
Integrate MDMS to CIS, GIS,
MyCPAU, AMI Head End System
(HES)
Year 6+
New EE and DR Programs
Customer Time-of-Use
Distribution System
Optimization, CVR Impl.
New OMS Integration
Advanced Metering
Infrastructure (AMI)
& Meter Data
Management
System (MDMS)
($16.5 to $20.5)
Project
Year 1 - 2021 Year 2 - 2022 Year 3 - 2023 Year 4 - 2024 Year 5 - 2025
Alpha Phase
(6 months)
AMI/MDMS
(City Facilities &
CPAU Employees
~ 100 meters )
Beta Phase AMI/MDMS
(12 months)
(Two Routes ~ 3,000 meters)
~CITY OF
~PALO ALTO
AMI Project Implementation Team & Structure
12
F ie ld l n stal laticm
Tearn
UP.A
Serisus
E Source
AD
Ope rations
Ml[)M Integration
Srna r t Works
SAP Oonsul mn1.
Communi cations
Marm,ger
Cust. Portal
l nteqr a ·on
SEW
Smart Wm1t s
~CITY OF
~PALO ALTO
UT IU T IES DIR E CTOR
7
AD
Custom e r Service
S trategi c Busiiness
Manager
AD
Resource Managem en
AD
Erigj neeri[l!J
AMII H ES
l nteqra ·on
Se111:sus
E:So u r ce
SAP Oonsul mm
AMI Proi ec'I'. Corn T eam
1 .. A I Manager
2 .. A I Sysleim T ech
3 .. A I Data Antl'lyst
4 .. Dave.'(
5 .. R u i. S
6 .. Shi va. S
E lectric Mtr Featu res.I
Opti m izatio n I MDM
Dam Aoatysi,s
Sensus
Smart W ,orks
E Sou rc e
·-------
·---· • • • • • • • • •
E Souroe Team
1. P roj ect Management
2 . Change Manage m en t
3 . Sysl.em llIntegrnt ions
4 . F ie ld Support
r---------------------------,
: lhree pe r manent u ll-t i me AM II sta : :
: " AMI Manager :
: " AM I Systems ledh :
I I
: .. AMI Da t a Ana lyst :
-----·------------------y------------------·-----------------~ . . . '
: t : I
WIG Mltr Features/ Org Ohan ge Custom er E:xtemal
Optim iza i on /MOM Management& Ca I Center / Oommunica i ons
Se111:sus
Smart 'Work.:s
l ruema l
Commu nicat ion
CPAIJ
E Sou rc e
conections
CPAU
IUPA
E:Sour ce
CPAIJ
E Sour c e
Resource Needs & Funding
Three Vendor Contract Cost for Council approval
•Initial capital cost –$16.5M (baseline); $18.5M (with contingency funds)
•On-going annual software and hosting costs, total over contact term $2M
•Total contract cost, not-to-exceed amount -$20.5M
Allocation of baseline contract cost of $18.5M based on direct and shared costs
•Electric ($7.6M), Water ($7.0M), Gas ($3.9M)
Funding from ESP Reserves -$18.5M
•Up to $7.6 M for electric fund related cost
•Loan funds to cover water and gas related expenditure for up to $7M and $3.9M respectively;
with a repayment term of 5-years with prevailing interest, upon completion of the project.
13~CITY OF
~PALO ALTO
Required Changes to Utilities Rules & Regulation
•Rules related to customer choosing to opt-out:duration, fees, etc.
•Exception to new electric meter testing during full AMI deployment
•Disposal of old meters without testing
•Estimated billing protocols in the event of a cyber attack
•Water leak notification related protocols
14~CITY OF
~PA ILO ALTO
Request Today
15
Staff recommend that the UAC Recommend that City Council Approve the Use of the
Electric Special Project Reserves to Fund the Smart Grid Technology Installation Project
(EL-11014) for a Not to Exceed Amount of $18.5M, and consisting of the following:
•Transfer up to a not to exceed amount of $7.6M from the Electric Special Project (ESP) reserves to the
Smart Grid Technology Installation Project (EL-11014) for Electric advanced metering infrastructure (AMI)
and smart grid-related expenditures;
•Transfer up to a not to exceed amount of $7.0M from the ESP reserves to the Smart Grid Technology
Installation Project (EL-11014) for Water AMI and smart grid-related expenditures as an inter-fund loan
with a repayment term of 5-years with prevailing interest, upon completion of the project; and
•Transfer up to a not to exceed amount of $3.9M from the ESP reserves to the Smart Grid Technology
Installation Project (EL-11014) for Gas AMI smart grid-related expenditures as an inter-fund loan with a
repayment term of 5-years with prevailing interest, upon completion of the project.
~CITY OF
~PALO ALTO
Next Steps
16
On August 30th, Seek City Council Approval of:
•UAC recommended ESP reserve transfers to fund the AMI/Smart Grid Project
•The contracts with Sensus, SmartWorks and E-Source
~CITY OF
~PALO ALTO
17
A Smart Home-Enabled by Advanced Utility Meters (AMI)
Solar
Photovolta ie
System
• •
•
• •
•
• • •
Cus omer Por al
C oud Based Utirty Usage
and Engagemen Tool
----G--G.
•
••
•• I
• I • • : .
• • • • • • • • • •• • • • • • • I • • •• • • • • • • • • • •• • • • •
18
Questions?
Feedback?
~CITY OF
~PALO ALTO
City of Palo Alto (ID # 12369)
Utilities Advisory Commission Staff Report
Report Type: New Business Meeting Date: 7/7/2021
City of Palo Alto Page 1
Summary Title: UAC Annual Work Plan 2021-2021
Title: Staff Recommends the Utilities Advisory Commission Review and
Approve the Utilities Advisory Commission's 2021-2022 Annual Work Plan,
and Recommend the City Council Review the Work Plan and Provide
Feedback
From: City Manager
Lead Department: Utilities
Recommendation
Staff Recommends the Utilities Advisory Commission Review and Approve the Utilities Advisory
Commission's 2021-2022 Annual Work Plan, and Recommend the City Council Review the
Work Plan and Provide Feedback
Background
ANNUAL WORKPLAN AND PERFORMANCE MEASURES
In accordance with the 2020 City Boards, Commissions, and Committees Handbook, each Board
and Commission should prepare an annual work plan for proposal to the City Council by the
second quarter of the calendar year. The Council will review the work plan and provide
feedback annually at a dedicated City Council meeting. The annual report should include the
results of the prior year’s plan. When applicable, the City Council would like to see metrics of
community involvement and participation in meetings and activities included in the work plan.
Council expects Boards and Commissions to work on items in the approved workplan. In
addition, Council may refer additional items to the Boards and Commissions in response to new
developments. Boards and Commissions should refrain from expending their time and that of
the staff liaison on items that have not been approved by the City Council. If the Board or
Commission would like to add an issue for review after an annual workplan has been approved
by the City Council, a prompt request by the Board or Commission Chair to the City Council is
required and the item will then be addressed by the City Council as a whole.
Attachments:
•Attachment A: Work Plan 2021 - 2022
Staff: Dean Batchelor
CITY OF
PALO
ALTO
Board or Commission Name: Utilities Advisory Commission (UAC)
Staff Liaison Name and Contact Information: Dean Batchelor – 650.496. 6981
Lead Department: Utilities
General Purpose and/or Purview of Board/Commission:
The Utilities Advisory Commission (UAC) is charged with providing advice on acquisition and development
of electric, gas and water resources; joint action projects with other public or private entities which involve
electric, gas or water resources; environmental implications of electric, gas or water utility projects,
conservation and demand management. Additionally, the UAC is charged with providing advice on the
fiber and wastewater collection utilities. As a highly regulated industry, there may be matters not listed
below that will be presented to the UAC in accordance with current or future (local, state or federal)
legislative requirements.
Anticipated Item/Topic Description and/or Info Quarter (July 2021 –
June 2022)
Electrification of the City Meet the S/CAP goals to reduce natural gas
consumption by 2030. This includes possible
code modifications, potential full or partial
retirement of the gas distribution system,
replacement of space and water heating
systems, cooking and cleaning appliances. It also
includes permitting and inspection processes for
customers wishing to install solar PV, energy
storage, and/or EV charging systems.
These projects are
ongoing and will be
discussed by the
Commission
periodically
Utilities CIPs Rebuild/repair reservoirs; Foothills water piping;
ongoing maintenance of electric, gas, water and
wastewater infrastructure.
These projects are
ongoing and will be
discussed by the
Commission
periodically.
Fiber to the Home Build an infrastructure within the City to supply
fiber to the community.
These projects are
ongoing and will be
discussed by the
Commission
periodically.
Advanced Metering
Infrastructure Project
Upgrade the antiquated meter system by
replacing the citywide meters
(gas/electric/water) with digital meters that can
be read through a software program, enable
time of use billing, and provide more detailed
usage data to customers.
These projects are
ongoing and will be
discussed by the
Commission
periodically.
Commodities Rate Increases: Water, Gas, Electric, and
Wastewater collection.
These projects are
ongoing and will be
discussed by the
Commission annually
Greenhouse Gas
Emission Reduction
Meet the S/CAP goals to reduce GHG emissions
80% below 1990 levels by 2030. This includes
modifying the energy supply portfolio,
purchasing RECs and/or other carbon offset
instruments, as well as EV charging
infrastructure, allocation of LCFS funds, solar PV
adoption, and distributed energy resources.
These projects are
ongoing and will be
discussed by the
Commission
periodically
Water Supply Consider potential future sources of water
supply.
These projects are
ongoing and will be
discussed by the
Commission
periodically.
Workforce Attract and retain workers for key Utility
positions that are chronically unfilled, including
line workers, engineers, and system operators.
These issues are
ongoing and will be
discussed by the
Commission
periodically.
Other legislative or
customer-driven
initiatives
The Utility tracks many state and federal bills
that touch on utilities. Should any bills become
law during the year, the UAC may need to
address the matter. Likewise, should a
customer-driven initiative impact Utilities (such
as reach codes or ADUs/JDUs) the commission
may want to address the matter.
These issues are
ongoing and may be
discussed by the
Commission
periodically.