HomeMy WebLinkAbout2022-11-02 Utilities Advisory Commission Agenda PacketMATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE COMMISSION AFTER DISTRIBUTION OF THE AGENDA
PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE UTILITIES DEPARTMENT AT PALO ALTO CITY HALL, 250 HAMILTON AVE.
DURING NORMAL BUSINESS HOURS.
AMERICANS WITH DISABILITY ACT (ADA)
Persons with disabilities who require auxiliary aids or services in using City facilities, services or programs or who would like information on the
City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact (650) 329-2550 (Voice) 24 hours in advance.
UTILITIES ADVISORY COMMISSION – SPECIAL MEETING
NOVEMBER 2, 2022 – 6:00 PM
Council Chambers / ZOOM Webinar
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.
Join Zoom Webinar Here Meeting ID: 966 9129 7246 Phone: 1 (669) 900-6833
Pursuant to AB 361 Utilities Advisory Commission meetings will be held as “hybrid” meetings with the
option to attend by teleconference or in person. To maximize public safety while still maintaining
transparency and public access, members of the public can choose to participate from home or attend in
person. Members of the public who wish to participate by computer or phone can find the instructions
at the end of this agenda. Masks are strongly encouraged if attending in person. The meeting will be
broadcast on Cable TV Channel 26, live on Midpen Media Center at https://midpenmedia.org, and live
on YouTube at https://www.youtube.com/c/cityofpaloalto. 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 6:00 pm - 6:05 pm
II. AGENDA REVIEW AND REVISIONS 6:05 pm – 6:10 pm
III. ORAL COMMUNICATIONS 6:10 pm – 6:25 pm
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 6:25 pm – 6:30 pm
Approval of the Minutes of the Utilities Advisory Commission Meeting Held on October 12,
2022
V. UNFINISHED BUSINESS
VI. UTILITIES DIRECTOR REPORT 6:30 pm – 6:45 pm
VII. NEW BUSINESS
1. Adoption of a Resolution Authorizing Use of Teleconferencing for Utilities Advisory
Commission Meetings During Covid-19 State of Emergency (Action 6:45 pm – 6:50 pm)
2. Staff Recommends the Utilities Advisory Commission Consider and Adopt an Attendance
Policy (Action 6:50 pm – 7:20 pm)
Chairman: Lauren Segal Vice Chair: A.C. Johnston Commissioners: John Bowie, Lisa Forssell, Phil Metz, Greg Scharff, and Loren Smith Council Liaison: Alison Cormack
MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE COMMISSION AFTER DISTRIBUTION OF THE AGENDA
PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE UTILITIES DEPARTMENT AT PALO ALTO CITY HALL, 250 HAMILTON AVE.
DURING NORMAL BUSINESS HOURS.
AMERICANS WITH DISABILITY ACT (ADA)
Persons with disabilities who require auxiliary aids or services in using City facilities, services or programs or who would like information on the
City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact (650) 329-2550 (Voice) 24 hours in advance.
3.Staff Recommendation That the Utilities Advisory Commission Review and Recommend the
City Council Affirm the Continuation of the REC Exchange Program (Action 7:20 pm – 7:50
pm)
4.Staff Recommends the Utility Advisory Commission Recommend the Finance Committee
Recommend That the City Council Adopt a Resolution Amending the E-HRA (Electric Hydro
Rate Adjuster) Rate Schedule, Increasing the Current E-HRA Rate to $0.026/kWh Effective
January 1, 2023 (Action 7:20 pm – 7:50 pm)
5.Changes to the Utilities Rules and Regulations and Rate Schedules for AMI implementation
(Action 7:50 pm – 8:20 pm)
6.Staff Recommends That the Utilities Advisory Commission (UAC) Approve a
Recommendation That Council Recommend Building the Fiber Backbone and Options for
Fiber-to-the-Premises (FTTP) (Action 8:20 pm – 8:50 pm)
VIII. COMMISSIONER COMMENTS and REPORTS from MEETINGS/EVENTS
INFORMATIONAL REPORTS
IX. FUTURE TOPICS FOR UPCOMING MEETING December 7, 2022
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)).
12-Month Rolling Calendar Public Letter(s) to the UAC
Presentation
Rule C-1
Rule C-4
Rule 10
MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE COMMISSION AFTER DISTRIBUTION OF THE AGENDA
PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE UTILITIES DEPARTMENT AT PALO ALTO CITY HALL, 250 HAMILTON AVE.
DURING NORMAL BUSINESS HOURS.
AMERICANS WITH DISABILITY ACT (ADA)
Persons with disabilities who require auxiliary aids or services in using City facilities, services or programs or who would like information on the
City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact (650) 329-2550 (Voice) 24 hours in advance.
PUBLIC COMMENT INSTRUCTIONS
Members of the Public may provide public comments to teleconference meetings via email,
teleconference, or by phone.
1. Written public comments may be submitted by email to
UACPublicMeetings@CityofPaloAlto.org.
2. Spoken public comments using a computer will be accepted through the
teleconference meeting. To address the Commission, click on the link below for the
appropriate meeting to access a Zoom-based meeting. Please read the following
instructions carefully.
• 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.
• 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.
• 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.
• When called, please limit your remarks to the time limit allotted.
• 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 # 14914)
Utilities Advisory Commission Staff Report
Meeting Date: 11/2/2022 Report Type: IV. APPROVAL OF THE MINUTES
City of Palo Alto Page 1
Title: Approval of the Minutes of the Utilities Advisory Commission Meeting
Held on October 12, 2022
From: Director of Utilities
Lead Department: Utilities
Recommended Motion
The Minutes Packet will be a late packet item.
Staff recommends that the UAC consider the following motion:
Commissioner ______ moved to approve the draft minutes of the October 12, 2022 meeting
as submitted/Amended.
Commissioner ______ seconded the motion.
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City of Palo Alto (ID # 14901)
Utilities Advisory Commission Staff Report
Meeting Date: 11/2/2022 Report Type: VII. NEW BUSINESS
City of Palo Alto Page 1
Title: Adoption of a Resolution Authorizing Use of Teleconferencing for
Utilities Advisory Commission Meetings During Covid-19 State of Emergency
From: Director of Utilities
Lead Department: Utilities
Recommendation
Adopt a Resolution (Attachment A) authorizing the use of teleconferencing under Government
Code Section 54953(e) for meetings of the Utilities Advisory Commission (UAC) and its
committees due to the Covid-19 declared state of emergency.
Background
In February and March 2020, the state and the County declared a state of emergency due to
the Covid-19 pandemic. Both emergency declarations remain in effect.
On September 16, 2021, the Governor signed AB 361, a bill that amends the Brown Act,
effective October 1, 2021, to allow local policy bodies to continue to meet by
teleconferencing during a state of emergency without complying with restrictions in State
law that would otherwise apply, provided that the policy bodies make certain findings at
least once every 30 days.
AB 361, codified at California Government Code Section 54953(e), empowers local policy bodies
to convene by teleconferencing technology during a proclaimed state of emergency under the
State Emergency Services Act in any of the following circumstances:
(A) The legislative body holds a meeting during a proclaimed state of emergency, and
state or local officials have imposed or recommended measures to promote social
distancing.
(B) The legislative body holds a meeting during a proclaimed state of emergency for the
purpose of determining, by majority vote, whether as a result of the emergency,
meeting in person would present imminent risks to the health or safety of
attendees.
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(C) The legislative body holds a meeting during a proclaimed state of emergency and has
determined, by majority vote, pursuant to subparagraph (B) (B), that, as a result of
the emergency, meeting in person would present imminent risks to the health or
safety of attendees. (Gov. Code § 54953(e)(1).)
In addition, Section 54953(e)(3) requires that policy bodies using teleconferencing reconsider
the state of emergency within 30 days of the first teleconferenced meeting after October 1,
2021, and at least every 30 days thereafter, and find that one of the following circumstances
exists:
1. The state of emergency continues to directly impact the ability of the
members to meet safely in person.
2. State or local officials continue to impose or recommend measures to
promote social distancing.
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Discussion
At this time, the circumstances in Section 54953(e)( 1)(A) exist. The Santa Clara County Health
Officer continues to recommend measures to promote outdoor activity, physical distancing and
other social distancing measures, such as masking, in certain contexts. (See August 2, 2021
Order.) In addition, the California Department of Industrial Relations Division of Occupational
Safety and Health (Cal/OSHA) has promulgated Section 3205 of Title 8 of the California Code of
Regulations, which requires most employers in California, including in the City, to train and
instruct employees about measures that can decrease the spread of COVID-19, including
physical distancing and other social distancing measures.
Accordingly, Section 54953(e)(1)(A) authorizes the City to continue using teleconferencing for
public meetings of its policy bodies, provided that any and all members of the public who wish
to address the body or its committees have an opportunity to do so, and that the statutory and
constitutional rights of parties and the members of the public attending the meeting via
teleconferencing are protected.
To comply with public health directives and promote public safety, Palo Alto policy bodies
have been meeting via teleconference since March 2020. On September 27, 2021, the City
Council considered the format for future Council, committee, and Board and Commission
meetings. Council determined that beginning November 1, 2021, Council meetings would be
conducted using a hybrid format that allows Council Members and the public to decide
whether to attend in person, following masking and distancing protocols, or participate via
teleconference. Council directed that Council standing and ad-hoc committees and Boards
and Commissions would continue meeting via teleconference through March 2022.
Adoption of the Resolution at Attachment A will make the findings required by Section
54953(e)(3) to allow the continued use of teleconferencing for meetings of the Utilities
Advisory Commission (UAC) and its committees.
Attachments:
• Attachment A: Resolution
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NOT YET APPROVED
Resolution No. ____
Resolution Making Findings to Allow Teleconferenced Meetings Under California Government
Code Section 54953(e)
R E C I T A L S
A. California Government Code Section 54953(e) empowers local policy bodies to convene
by teleconferencing technology during a proclaimed state of emergency under the State Emergency
Services Act so long as certain conditions are met; and
B. In March 2020, the Governor of the State of California proclaimed a state of emergency
in California in connection with the Coronavirus Disease 2019 (“COVID-19”) pandemic, and that state
of emergency remains in effect; and
C. In February 2020, the Santa Clara County Director of Emergency Services and the
Santa Clara County Health Officer declared a local emergency, which declarations were
subsequently ratified and extended by the Santa Clara County Board of Supervisors, and
those declarations also remain in effect; and
D. On September 16, 2021, the Governor signed AB 361, a bill that amends the Brown Act
to allow local policy bodies to continue to meet by teleconferencing during a state of emergency
without complying with restrictions in State law that would otherwise apply, provided that the
policy bodies make certain findings at least once every 30 days; and
E. While federal, State, and local health officials emphasize the critical importance of
vaccination and consistent mask-wearing to prevent the spread of COVID-19, the Santa Clara County
Health Officer has issued at least one recommendation, on September 21, 2021 (available online here),
that public bodies meet remotely to the extent possible, in addition to recommendations issued
February 28, 2022,1 to continue social distancing measures, such as masking, in certain contexts; and
F. The California Department of Industrial Relations Division of Occupational Safety and
Health (“Cal/OSHA”) has promulgated Section 3205 of Title 8 of the California Code of Regulations,
which requires most employers in California, including in the City, to train and instruct employees
about measures that can decrease the spread of COVID-19, including physical distancing and other
social distancing measures; and
G. The Utilities Advisory Commission has met remotely during the COVID-19 pandemic and
can continue to do so in a manner that allows public participation and transparency while
minimizing health risks to members, staff, and the public that would be present with in-person
meetings while this emergency continues; now, therefore,
The Utilities Advisory Commission RESOLVES as follows:
1 available online at https://covid19.sccgov.org/order-health-officer-02-28-2022-rescission-of-face-covering-order
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NOT YET APPROVED
1. As described above, the State of California remains in a state of emergency due to the
COVID-19 pandemic. At this meeting, the Utilities Advisory Commission has considered the
circumstances of the state of emergency.
2. As described above, State and County officials continue to recommend measures
to promote physical distancing and other social distancing measures, in some
settings.
AND BE IT FURTHER RESOLVED, That for at least the next 30 days, meetings of the Utilities Advisory
Commission and its committees will occur using teleconferencing technology. Such meetings of the
Utilities Advisory Commission and its committees that occur using teleconferencing technology will
provide an opportunity for any and all members of the public who wish to address the body its
committees and will otherwise occur in a manner that protects the statutory and constitutional
rights of parties and the members of the public attending the meeting via teleconferencing; and, be
it
FURTHER RESOLVED, That the Utilities Advisory Commission staff liaison is directed to place a
resolution substantially similar to this resolution on the agenda of a future meeting of the Utilities
Advisory Commission within the next 30 days. If the Utilities Advisory Commission does not meet
within the next 30 days, the staff liaison is directed to place a such resolution on the agenda of the
immediately following meeting of the Utilities Advisory Commission.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
Staff Liaison Chair of Utilities Advisory Commission
APPROVED AS TO FORM: APPROVED:
City Attorney or designee Department Head
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City of Palo Alto (ID # 14721)
Utilities Advisory Commission Staff Report
Meeting Date: 11/2/2022 Report Type: V. UNFINISHED BUSINESS
City of Palo Alto Page 1
Title: Staff Recommends the Utilities Advisory Commission Consider and
Adopt an Attendance Policy
From: Director of Utilities
Lead Department: Utilities
Recommended Action
Consider and adopt a remote attendance policy for the Utilities Advisory Commission.
Background
City Council Motion Encouraging UAC Remote Attendance Policy
During the City Council meeting on April 4, 2022, it was suggested the Utilities Advisory Commission
(UAC), as a City Commission, should establish a remote attendance policy.
The Council’s Final Motion was:
Council Member Tanaka motioned, seconded by Mayor Burt, to direct staff to continue to
present the findings for AB 361 for the Council, Commissions and Boards and
a) Council Members can participate remotely in Council Committee meetings up to 3
times per year;
b) Board Members and Commissioners can participate remotely, but are encouraged to
meet in person, and the Boards and Commissions should establish a remote attendance policy.
MOTION PASSED: 7-0
Section 8.4 of the UAC Bylaws provides that the UAC may, by a majority vote of its members, adopt or
amend any rules and procedures to be followed at UAC meetings and study sessions, to the extent such
rules and procedures are not in conflict with the UAC’s Bylaws or other applicable law. Staff has thus
brought forward a recommended attendance policy for the UAC’s consideration and adoption.
If the UAC adopts the proposed Attendance Policy, staff will, in accordance with Section 10.1 of the UAC
Bylaws, transmit a copy to each member of the Commission, to the Council, and to the City Clerk. Copies
of the Bylaws and any other rules and procedures shall be made available to the public, upon request,
and at each meeting of the Commission.
Brown Act Requirements
Public commissions, board and councils, and other public agencies exist to aid in the conduct of the
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people’s business. The Brown Act intends to ensure that all such bodies act and deliberate openly before
the people.1 With some limited exceptions, all meetings of legislative bodies of local agencies are
required to be open and public, and all persons shall be permitted to attend those meetings.2
The Brown Act regulates the meetings of legislative bodies in California, including advisory bodies like
the UAC.3 In general, a legislative body may meet by teleconference for the benefit of the public and the
legislative body, so long as the meeting meets additional requirements, such as:
• Each teleconference location must be identified in the notice and agenda of the meeting;
• Each teleconference location must be accessible to the public;
• At least a quorum of the members of the legislative body must participate from locations within
Palo Alto (with some exceptions); and
• The agenda must provide an opportunity for members of the public to address Commissioners
directly at each teleconference location.4
Recent revisions to the Brown Act have added situations in which members of legislative bodies are not
required to comply with the general teleconferencing rules above.
During a proclaimed state of emergency, if state or local officials have recommended social distancing,
the legislative body may determine by majority vote that, as a result of the emergency, meeting in
person would present imminent risks to the health or safety of attendees.5 That is, in a state of
emergency that directly impacts the ability of members to meet safely in person, the legislative body
can choose to be subject to different rules. The UAC met according to these rules during the COVID-19
State of Emergency. On October 17, 2022, Governor Newsom announced that the COVID-19 State of
Emergency would end on February 28, 2023.
Assembly Bill 2449 was signed into law in September 2022, creating new circumstances in which
members of legislative bodies could attend Brown Act meetings remotely, effective January 1, 2023.
Under AB 2449, when a quorum of the legislative body participates in person from a singular physical
location open to the public, the remaining members can teleconference in two situations, subject to
additional regulations.
A member can participate remotely at up to two meetings per calendar year if they have “just cause” or
if they are facing “emergency circumstances” pursuant to AB 2449.6
“Just cause” is defined by AB 2449 as:
1. A caregiving need of a child, parent, grandparent, grandchild, sibling, spouse, or domestic
partner that requires them to participate remotely;
1 Gov’t Code section 54950.
2 Gov’t Code section 54953 (a).
3 Gov’t Code section 54952 (b).
4 Gov’t Code section 54953 (b)(3).
5 Gov’t Code section 54953 (e)(1). This provision is currently set to expire on January 1, 2024.
6 AB 2449 allows members to attend meetings remotely under the “emergency circumstances” provisions at no
more than “20 percent of the regular meetings for the local agency within a calendar year,” or at no more than
two meetings per year if the legislative body meets fewer than 10 times per calendar year. The same restriction
applies to the “just cause” provision, but in addition to that, a member can only invoke the “just cause” provision
twice.
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2. A contagious illness preventing them from attending in person;
3. A need related to a physical or mental disability not otherwise resolved by a request for a
reasonable accommodation; or
4. Travel while on official business of a state or local agency.
To participate remotely under the “just cause” provisions, a member must notify the legislative body at
the earliest possible opportunity, which may be the start of the meeting, of their need to participate
remotely. The member must provide a general description of the circumstances related to one of the
four items above. A member may not use the “just cause” provision to justify remote appearances at
more than two meetings per calendar year.
A member can also participate remotely under AB 2449 in “emergency circumstances,” which means a
physical or family medical emergency that prevents the member from attending in person. The member
must make a request to attend remotely as soon as possible. The legislative body must take action to
approve or reject the request at the earliest opportunity, including at the beginning of the meeting. The
legislative body must also request a general description of the emergency circumstances relating to the
member’s need to appear remotely. The description does not need to be more than 20 words, and the
member does not have to disclose any personal medical information.
If any member participates remotely under AB 2449, then the following additional rules apply:
• The legislative body must provide a way for the public to remotely hear, visually observe, and
remotely address the legislative body, either by a two-way audiovisual platform or a two-way
telephonic service and a live webcasting of the meeting.
• The legislative body must provide notice of how the public can access the meeting and offer
comments.
• The agenda must identify and include an opportunity for the public to attend and directly
address the legislative body through a call-in option, an internet-based service option, and in-
person at the location of the meeting.
• The legislative body cannot require comments to be submitted before the start of the meeting.
The public must be allowed to offer comment in real time.
• At least a quorum of the members of the legislative body must participate in person from a
singular physical location clearly identified on the agenda.
• Members participating remotely must participate through both audio and visual technology.
• Members participating remotely pursuant to AB 2449 must publicly disclose at the meeting
before any action is taken whether any other individuals 18 years of age or older are present in
the room at the remote location with the member and the general nature of the member’s
relationship with the individual.
• A member may not use AB 2449 to participate in meetings solely by teleconference for more
than three consecutive months or 20% of the regular meetings of the legislative body within a
calendar year. If the legislative body regularly meets less than 10 times a year, a member may
not use AB 2449 to remotely attend more than two meetings.
Discussion
At the August 3, 2022 UAC meeting, several commissioners expressed interest in a remote attendance
policy that complies with the Brown Act and is minimally restrictive regarding remote attendance. At a
subsequent meeting, a commissioner requested that the discretionary aspects of the policy be
identified.
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There are only a few items that the UAC has discretion to change:
• Section 2(b). The policy statement in section 2(b) actively discouraging remote attendance is
copied from the City Council Procedures and Protocols Handbook. The UAC may make a
different policy statement.
• Section 2(c). The maximum number of meetings a Commissioner is allowed to attend remotely is
a suggestion based on the Council’s initially stated practice. The UAC may increase or decrease
the total maximum of three, but it may not increase the maximum of two that applies to section
4 remote attendance.
• Section 2(d). The “singular physical location” requirement applies to any meeting where a
member is making a remote appearance pursuant to AB 2449. If a Commissioner is attending
remotely under the standard remote appearance rules found in section 3, the UAC is only
required to have a quorum participating from locations within the boundaries of Palo Alto. The
language in section 2(d) is simpler, but the UAC could adopt a policy that reflects the different
requirements for different types of remote attendance.
• Section 4 (c)(i). This is the minimum notice Commissioners are required to provide when
appearing remotely under AB 2449. The UAC may subject such Commissioners to some
additional requirements, such as earlier notice.
• Section 4 (c)(iv). These scripts are recommended by staff to facilitate efficient and consistent AB
2449 notifications. The UAC may prefer a different script or no script at all.
Recommended Policy for Adoption
UAC Attendance Policy
1. Regular and Special UAC Meetings and Study Sessions – Attendance Required
a. Commission Members, and the Staff Liaison, along with any other City staff that have been
requested to be physically present, shall take their regular stations in the Council chamber
at 6:00 p.m. on the first Wednesday of each month, except during the established
Commission vacation. The Chair or other presiding officer will ensure that during each
regular or special meeting there will be one 10-minute break.
b. The Commission expects its members to attend regularly and notify the Commission Clerk of
any planned absences.
2. Remote Attendance of Commissioners at UAC Meetings – General Guidelines and Requirements
a. The remote attendance provisions in this UAC Attendance Policy shall apply to Commission
Members unless there exists a proclaimed state of emergency in accordance with
Government Code Section 54953(e), in which case only the provisions of that Section shall
govern remote attendance.
b. Requests by Commission Members to attend a Commission meeting via remote appearance
are actively discouraged.
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c. No Commission Member may attend a Commission meeting remotely more than three
times per calendar year. A Commission Member who has already attended two meetings
remotely in one calendar year may not attend another remotely under section 4.
d. At least a quorum of the Commission must participate from a singular physical location
within the City.
e. At any meeting where any Commission Member is appearing remotely, the Commission
Clerk shall ensure the agenda will identify and include an opportunity for the public to
attend and directly address the UAC through a call-in option, an internet-based service
option, and in-person at the location of the meeting.
f. If there is a disruption to the meeting broadcast or in the ability to take call-in or internet-
based public comment, no further action shall be taken on agenda items until the issue is
resolved.
3. Standard Remote Attendance Requirements
a. If the threshold requirements in section 2(c), (d) and (e) of this Policy are met, the
Commission Member who will be attending remotely must ensure that:
i. The UAC meeting agenda identifies the remote location and is posted at that location in
an area that is accessible and visible 24 hours a day for at least 72 hours prior to the
meeting.
ii. The remote location is open and fully accessible to the public, and fully accessible under
the Americans with Disabilities Act, throughout the entire meeting.
iii. The remote technology used must be open and fully accessible to all members of the
public, including those with disabilities.
iv. The accessibility requirements in subsections (i) – (iii), above, apply to private
residences, hotel rooms, and similar facilities, all of which must remain fully open and
accessible throughout the meeting, without requiring identification or registration.
v. Members of the public who attend the meeting at the remote location must have the
same opportunity to address the Commission from the remote location that they would
if they were present in Council Chambers.
vi. The remote location must not require an admission fee or any payment for attendance.
vii. If the meeting will include a closed session, the Commission Member must also ensure
that there is a private location available for that portion of the meeting.
b. Responsibilities of Commission Members Attending a Meeting Remotely under this Section:
i. The Commission Member must give the Commission Clerk five days’ written notice of
remote attendance in advance of the publication of the agenda.
ii. The notice must include the address at which the remote meeting will occur, the
address the Commission packet should be mailed to, and the phone number of the
remote location.
iii. Commission Members need to ensure all technology necessary for them to attend
remotely is functioning.
iv. The Commission Member is responsible for posting the Commission agenda in the
remote location, or having the agenda posted by someone else at the location and
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confirming that posting has occurred. The Commission Clerk will assist, if necessary, by
emailing, faxing or mailing the agenda to whatever address or fax number the
Commission Member requests; however, it is the Commission Member’s responsibility
to ensure that the agenda arrives and is posted. If the Commission Member will need
the assistance of the Commission Clerk in delivery of the agenda, the fax number or
address must be included in the five-day advance written notice above.
v. The Commission Member must ensure that the location will be publicly accessible while
the UAC meeting is in progress.
vi. The Commission Member must state at the beginning of the Commission meeting that
the agenda posting requirement was met at the location and that the location is publicly
accessible, and must describe the location.
c. If the Commission Member determines that any or all of the requirements in sections 3(a)
and 3(b) of this Policy cannot be met, they shall not participate in the meeting remotely.
4. “Just Cause” and “Emergency Circumstances” Remote Attendance Requirements
a. A Commission Member may attend a meeting remotely when they have just cause to do so
pursuant to AB 2449.
i. “Just cause” is defined as:
1. A childcare or caregiving need of a child, parent, grandparent, grandchild, sibling,
spouse, or domestic partner that requires a Commission Member to participate
remotely;
2. A contagious illness that prevents a Commission Member from attending in
person;
3. A need related to a physical or mental disability which cannot be resolved by a
request for reasonable accommodation; or
4. Travel while on business of the UAC or another state or local agency.
ii. Notification. A Commission Member attending remotely for just cause must notify the
UAC and the Commission Clerk at the earliest possible opportunity, including at the start
of a meeting, of their need to participate remotely and provide a general description of
the circumstances related to one of the four items above.
b. A Commission Member may attend a meeting remotely when emergency circumstances
justify remote attendance pursuant to AB 2449, and the Commission approves of their
remote attendance.
i. “Emergency circumstances” is defined as a physical or family medical emergency that
prevents a Commission Member from attending the UAC meeting in person.
ii. Notification and acceptance.
1. A Commission Member attending remotely due to emergency circumstances must
notify the UAC and the Commission Clerk at the earliest possible opportunity.
2. The UAC must request a general description of the circumstances relating to the
Commission member’s need to appear remotely. The description does not need
to have more than 20 words, and the Commission Member does not have to
disclose any personal medical information.
3. At the earliest opportunity available to it, the UAC may, by a majority vote of its
members, take action on the request to approve or disapprove it. If the request
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does not allow sufficient time to place it on the agenda for the meeting for which
the request is made, the legislative body may take action on the request at the
beginning of the meeting by majority vote.
c. Responsibilities of Commission Members Attending a Meeting Remotely under this Section:
i. Commission Members must notify the UAC and the Commission Clerk of their need to
attend remotely at the earliest possible opportunity.
ii. Commission Members must publicly disclose at the meeting before any action is taken
whether any other individuals 18 years of age or older are present in the room at the
remote location with the member and the general nature of the member’s relationship
with the individual.
iii. Commission Members must ensure all technology necessary for them to attend
remotely is functioning, which must include two-way, live audio and visual
communication at all times.
iv. At the start of the meeting, the Commission Member attending remotely may use the
following language to identify under which provision they are attending remotely:
1. “I have just cause to attend this meeting remotely under AB 2449. I have not
attended a meeting remotely more than once this calendar year. I must
attend remotely because…
a. “… I must provide caregiving to [RELATION].”
b. “… a contagious illness prevents me from attending in person.”
c. “… I have a need related to a disability which could not be
accommodated at this meeting.”
d. “… I am travelling while on official business of [STATE OR LOCAL
AGENCY].”
“In this room, I am accompanied by…
“…no one over the age of 18.”
“…one or more individuals over the age of 18. They are [RELATION
(e.g., my spouse, coworker, medical provider)].”
2. “Due to emergency circumstances, I request to attend this meeting remotely
under AB 2449. I have not attended a meeting remotely more than once this
calendar year. The [PHYSICAL OR FAMILY] medical emergency I am facing
requires my remote attendance because [BRIEF DESCRIPTION].”
“In this room, I am accompanied by…
“…no one over the age of 18.”
“…one or more individuals over the age of 18. They are [RELATION
(e.g., my spouse, coworker, medical provider)].”
d. If the Commission Member determines that any or all of the requirements in section 4 of
this Policy, as applicable, cannot be met, they shall not participate in the meeting remotely.
Environmental Review
The adoption of this policy does not meet the definition of a project under Public Resources Code
Section 21065, thus no environmental assessment under the California Environmental Quality Act is
required.
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City of Palo Alto (ID # 14733)
Utilities Advisory Commission Staff Report
Meeting Date: 11/2/2022 Report Type:
City of Palo Alto Page 1
Council Priority: Climate Change: Protection & Adaption
Title: Staff Recommendation That the Utilities Advisory Commission Review
and Recommend the City Council Affirm the Continuation of the REC
Exchange Program
From: Director of Utilities
Lead Department: Utilities
Recommendation
Staff recommends that the Utilities Advisory Commission (UAC) recommend that the City
Council:
1) affirm the continuation of the “REC Exchange Program,” whereby the City exchanges
bundled RECs from its long-term renewable resources (Bucket 1 RECs) for Renewable
Portfolio Standard (RPS) eligible, unbundled RECs (Bucket 3 RECs),1 to the maximum
extent possible, while maintaining compliance with the state’s RPS regulations, in order
to provide additional revenue for local decarbonization efforts; and
2) direct staff to return to the UAC and City Council in 2027 to provide another review of
the program’s impacts.
Executive Summary
In August 2020, the City Council approved amendments to the electric utility’s Carbon Neutral
Plan that clarified and modified policies regarding the sales and exchanges of renewable energy
credits (RECs) (Staff Report 11556). The amendments permitted the exchange of Bucket 1
(primarily in-state) RECs for Bucket 3 (primarily out-of-state) RECs, provided the City maintains
compliance with State Renewable Portfolio Standard (RPS) regulations. A portion of the
earnings from the program were directed to be used to offset electric operational costs and
mitigate the economic impacts of the coronavirus pandemic, and the remainder were reserved
for local decarbonization programs.
Since then, staff has purchased and sold RECs for Calendar Years (CYs) 2020 through 2022 in
accordance with the Carbon Neutral Plan amendments, resulting in net earnings of $6.73
million, or about $2.24 million per year. These actual earnings are slightly lower than the
1 See Attachment A for a more detailed description of the different types of RECs.
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amounts that staff projected at the time the program was approved (about $3 million per year)
due to a narrowing of the Bucket 1 vs Bucket 3 price spread.
If the REC Exchange Program authorization is continued, staff projects that it will yield net
earnings of about $1.9 million per year over the next five years (CYs 2023-2027). Over time, the
REC Exchange program net revenue is projected to gradually decline, due to: (a) the gradual
ramping up of RPS requirement levels, which reduces the volume of supplies the City is able to
sell, and (b) some of the City’s older renewable energy contracts expiring. To date, $3.38 million
of the Program’s net earnings have been allocated toward local decarbonization efforts (with
the balance being used to offset operational costs and provide for general customer rate
reduction; going forward, all of the Program’s net earnings are planned to be directed towards
local decarbonization initiatives.
Background
In order to achieve the aggressive greenhouse gas (GHG) emissions reduction goals it has set, in
March 2013, through Resolution No. 9322, the City adopted a Carbon Neutral Plan for the
electric supply portfolio, with a goal of achieving carbon neutrality by 2013. The City has
achieved its Carbon Neutral Plan objectives each year starting in 2013, and due to its pursuit of
these objectives, the City’s electric supply portfolio currently far exceeds the procurement
requirements of the state’s Renewable Portfolio Standard (RPS) mandate, and all of the City’s
current RPS resources are classified as Bucket 1 RECs.
In August 2020, the City Council adopted a resolution allowing for REC Exchanges2 to take
advantage of the significant cost difference between Bucket 1 and Bucket 3 RECs3 to generate
additional revenue for the City’s electric utility (Resolution 9913, Staff Report 11556) and for
local decarbonization. The Council also directed that for 2020 and 2021, the earnings from this
program would be split, with two-thirds of the proceeds going to electric operating cost
reductions and one-third toward local GHG emission reduction programs, and that thereafter
all of the earnings would be devoted to emission reduction programs.
The Council authorized these REC Exchanges without a specific end date; however, they
directed staff to return prior to the end of 2022 to provide a review of the policy. That program
review is the focus of this report.
Discussion
REC Exchange Program Results (2020-2022) and Projections (2023-2027)
Since approving the REC Exchange Program in August 2020, staff has sold a total of about
802,000 Bucket 1 RECs for CYs 2020-2022 and purchased an equal number of Bucket 3 RECs for
2 The exchange of bundled RECs from the City’s in-state, long-term renewable resources (Bucket 1 RECs) for RPS-
eligible, unbundled RECs (Bucket 3 RECs), which usually come from out of state sources.
3 Due to limitations on the use of Bucket 3 RECs for compliance with the state’s RPS mandate (only 10% of a
utility’s RPS procurement may consist of Bucket 3 RECs), a significant financial premium currently exists for in-state
bundled renewable energy resources (Bucket 1 RECs).
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that period, as summarized in Table 1 below.4 These REC Exchange transactions have yielded a
total of $6.73 million in net revenue, or about $2.24 million per year.
Table 1: Summary of REC Exchange Transactions and Revenue, CY 2020-2022
CY 2020 CY 2021 CY 2022 (est.)
Bucket 1 REC Sales Volume (MWh) 325,186 287,210 190,000
Bucket 3 REC Purchase Volume
(MWh)
325,186 287,210 190,000
Bucket 1 REC Sales Revenue ($M) $3.59 $4.01 $2.74
Bucket 3 REC Purchase Cost ($M) $1.10 $1.47 $1.03
Net Revenue ($M) $2.48 $2.54 $1.71
RPS Level (%) 20.8% 35.0% 38.5%
When presenting the REC Exchange Program to Council for approval in 2020, staff estimated
that it would generate roughly $3.0 million per year in net revenue for FY 2021-2025, with a
significant tapering off thereafter due to the steady increases in the statewide RPS requirement
level. Actual net revenues have thus far come in lower than this initial estimate due to a
tightening of the differential between Bucket 1 and Bucket 3 REC prices compared to the staff
estimate at the time.
Over the next five years, staff estimates that the Program will yield approximately $9.3 million
in total net revenue, or $1.9 million per year, as shown in Table 2 below. The REC Exchange
Program’s earnings are projected to gradually decline in future years, primarily due to the
ramping up of the state’s RPS requirement levels, which reduces the volume of Bucket 1
supplies the City is able to sell. In addition, some of the City’s older (and smaller) renewable
energy contracts are set to expire, starting in 2026, which further reduces the supply of Bucket
1 RECs the City has available to exchange.
Table 2: Projected REC Exchange Transactions and Revenue, CY 2023-2027
CY 2023 CY 2024 CY 2025 CY 2026 CY 2027
Bucket 1 REC Sales Volume (MWh) 224,000 188,000 174,000 138,000 124,000
Bucket 3 REC Purchase Volume
(MWh) 224,000 188,000 174,000 138,000 124,000
Bucket 1 REC Sales Revenue ($M) $3.81 $3.20 $2.96 $2.35 $2.11
Bucket 3 REC Purchase Cost ($M) $1.35 $1.13 $1.05 $0.83 $0.74
Net Revenue ($M) $2.47 $2.07 $1.92 $1.52 $1.36
4 Staff has purchased additional Bucket 3 RECs and sold additional Bucket 1 RECs during this time period (96,198
additional RECs purchased and 49,814 additional sold); however, these are RECs that would have been bought or
sold anyway—purchased in order to satisfy the City’s Carbon Neutral Plan goals during the ongoing drought (in
2021 and 2022), and sold because the City had a surplus of carbon neutral supplies (in 2020). The analysis in this
report includes only the REC transactions that were the direct result of the approval of the REC Exchange Program.
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RPS Level (%) 41.3% 44% 46% 50% 52%
Impact on Palo Alto’s Supply Portfolio
As discussed in Staff Report 11556, although exchanging in-state RECs for out-of-state RECs has
no real impact on the City’s total electricity-related carbon emissions (see Attachment A for
more discussion on this topic), the downside of this strategy is that it has a negative impact on
the City’s reported portfolio make-up and carbon emissions. California’s RPS law gives
preferential treatment to in-state renewable resources over out-of-state resources, and the
same is true of how such resources are reported to customers on the annual Power Content
Label (PCL). The California Energy Commission’s (CEC’s) PCL regulations require that utilities
report their out-of-state (Bucket 3) REC purchases as “unspecified sources of power” rather
than under the appropriate renewable energy technology category. Furthermore, utilities are
now required to report the annual average GHG emissions intensity of their electric supply on
their PCLs—and again, rather than being treated as carbon-free resources like other forms of
renewable energy, Bucket 3 RECs are treated as having an emissions intensity equivalent to
generic market power purchases (428 kilograms (kg) of CO2 per MWh, which is almost 20%
greater than the average emissions intensity of natural gas generation).
As a result, rather than reporting a supply mix that is over 60% renewable and nearly carbon-
free on average,5 under the REC Exchange Program the City must report a portfolio mix that is
less than 40% renewable and is responsible for a moderate amount of carbon emissions. Figure
1 below depicts the City’s projected electric supply portfolio mix in CY 2022, before and after
accounting for the REC Exchange Program transactions. Meanwhile, the estimated annual
average GHG emissions intensities that the City would report on its PCL for these two portfolios
are 114 and 209 kg CO2 per MWh, respectively.6
5 Although the City’s baseline portfolio mix is entirely comprised of renewables and hydroelectric resources, the
CEC’s PCL regulations assign a small emission intensity to all biomass generation such as landfill gas generation,
which currently accounts for about 10% of the City’s supply mix.
6 For reference, the statewide average GHG emissions intensity for CY 2021 was 207 kg CO2 per MWh. In CY 2021,
the City’s average GHG emissions intensity as reported on its PCL (and accounting for the REC Exchange Program
transactions) was 124 kg CO2 per MWh. The City’s emissions intensity is projected to be significantly higher for CY
2022 than for CY 2021 because of the significant decline in hydroelectric generation this year due to the ongoing
drought.
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Figure 1: Projected Electric Supplies in CY 2022, with and without REC Exchange Transactions
Use of REC Exchange Funds
Of the $6.73 million in net revenue that the REC Exchange Program has brought in since 2020,
$3.35 million of it has been directed towards general electric operating cost reductions (in
accordance with Council’s direction that two-thirds of the net proceeds should be used in this
way for 2020 and 2021, to offset the impacts of the pandemic) and $3.38 million has been (or
soon will be) used towards local decarbonization programs. If the recommendation to continue
the REC Exchange Program is approved, all of the net revenue from the program (whose
estimates are shown in Table 2) would be used for these decarbonization efforts. To date, the
programs that this funding has supported include the Advanced heat-pump water heater
(HPWH) pilot, the Home Efficiency Genie program, and multi-family building electrification
efforts.
Next Steps
Upon the approval of the Recommendation, staff will continue to execute transactions to sell
the City’s in-state renewable resources and purchase out-of-state renewables for 2023 and
beyond. In addition, staff will continue to report on the portfolio’s total GHG emissions under
both an hourly and an annual carbon accounting framework in the annual report to the City
Council on the City’s Renewable Procurement Plan, Renewable Portfolio Standard Compliance,
and Carbon Neutral Electric Supplies (usually presented in Q4 of each year).
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Resource Impact
Staff estimates that continuing the REC Exchange program will generate an average of
approximately $1.9 million in additional revenue per year for the next five fiscal years, which
will be used to support the City’s decarbonization efforts.
Policy Impact
This report supports the Sustainability and Climate Action Plan goals of continuing to lower the
carbon footprint of the community.
Environmental Review
The City Council’s review of the REC Exchange Program does not meet the definition of a
project because it is an administrative government activity that will not result in any direct or
indirect physical change to the environment (CEQA Guidelines section 15378(b)(5), therefore
California Environmental Quality Act (CEQA) review is not required.
Attachments:
• Attachment A: Renewable Energy Credit Background Information
• Attachment B: Presentation
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Attachment A
In-State vs. Out-of-State Renewable Energy Credits
In-state, Bundled Renewable Energy (Bucket 1 RECs) vs. Out-of-state, Unbundled Renewable
Energy (Bucket 3 RECs)
The fundamental difference between bundled renewables (or “Bucket 1 RECs”) and unbundled
(“Bucket 3”) RECs, as the diagram in Figure 1 illustrates, is that with bundled renewables both the
energy and the REC (which represents the environmental value of the energy) are sold together
to the same entity. With unbundled RECs, the energy and the REC are sold separately to different
entities. Practically speaking though, Bucket 1 RECs are almost always produced by in-state
renewable generators, while Bucket 3 RECs are produced by out-of-state renewable generators.
Also, because of limitations placed on the use of Bucket 3 RECs for compliance purposes in the
state’s RPS legislation, and because of strong demand for Bucket 1 resources as Community
Choice Aggregators (CCAs) ramp up their energy purchases, Bucket 1 RECs currently carry a
significant price premium relative to Bucket 3 RECs, in spite of the fact that these two resources
represent equivalent amounts of renewable energy.
Figure 1: Bundled (Bucket 1) vs. Unbundled (Bucket 3) RECs Diagram1
1 Source: Pinkel, D., and Weinrub, A., “What the Heck is a REC?” October 2013.
http://www.localcleanenergy.org/files/What%20the%20Heck%20is%20a%20REC.pdf
BundedRECs
I
Load Serving
Erffly
Electrlc
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Unbu died RECs
Enmgy REC.
\
L..oad Sining
Entity
Load SeM,g Entity
(for RPS compliance)
01'
REC Consumer
(for renew bragging
rights)
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November 2, 2022 www.cityofpaloalto.org
REC EXCHANGE PROGRAM: CYs 2020-2022 REVIEW & CYs 2023-2027 PROJECTIONS
•
CITY OF
PALO ALTO
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PART 1: REC Exchange Program Results (2020-2022)
November 2, 2022 www.cityofpaloalto.org
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REC EXCHANGE SUMMARY (CYs 2020-2022)
CY 2020 CY 2021 CY 2022 (est.)
Bucket 1 REC Sales Volume (MWh)325,186 287,210 190,000
Bucket 3 REC Purchase Volume (MWh)325,186 287,210 190,000
Bucket 1 REC Sales Revenue ($M)$3.59 $4.01 $2.74
Bucket 3 REC Purchase Cost ($M)$1.10 $1.47 $1.03
Net Revenue ($M)$2.48 $2.54 $1.71
Bucket 1 RPS Level 20.8%35.0%38.5%
Total Net Revenue: $6.73M
$3.35M for supply cost reduction
$3.38M for local decarbonization programs
~CITY OF
~PALO ALTO
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PART 2: REC Exchange Program Projections (2023-2027)
November 2, 2022 www.cityofpaloalto.org
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REC EXCHANGE PROJECTIONS (CYs 2023-2027)
CY 2023 CY 2024 CY 2025 CY 2026 CY 2027
Bucket 1 REC Sales Volume (MWh)224,000 188,000 174,000 138,000 124,000
Bucket 3 REC Purchase Volume (MWh)224,000 188,000 174,000 138,000 124,000
Bucket 1 REC Sales Revenue ($M)$3.81 $3.20 $2.96 $2.35 $2.11
Bucket 3 REC Purchase Cost ($M)$1.35 $1.13 $1.05 $0.83 $0.74
Net Revenue ($M)$2.47 $2.07 $1.92 $1.52 $1.36
Bucket 1 RPS Level 41.3%44%46%50%52%
Projected Net Revenue: $9.34M (all for local decarbonization programs)
~CITY OF
~PALO ALTO
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PART 3: Supply Portfolio Impact
November 2, 2022 www.cityofpaloalto.org
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ELECTRIC SUPPLY PORTFOLIO IMPACT (CY 2022)
Net CO2e Emissions:
114 kg/MWh (Baseline)
vs.
209 kg/MWh (REC Exchange)
• CITY OF
PALO
ALTO
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RECOMMENDATION
Staff recommends that the UAC recommend that the City Council:
1)affirm the continuation of the “REC Exchange Program,” whereby the City
exchanges bundled RECs from its long-term renewable resources (Bucket
1 RECs) for Renewable Portfolio Standard (RPS) eligible, unbundled RECs
(Bucket 3 RECs), to the maximum extent possible, while maintaining
compliance with the state’s RPS regulations, in order to provide additional revenue for local decarbonization efforts; and
2)direct staff to return to the UAC and City Council in 2027 to provide another review of the program’s impacts.
~CITY OF
~PALO ALTO
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Jim Stack, Ph.D.
Senior Resource Planner
james.stack@cityofpaloalto.org
(650) 329-2314
CITY OF
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City of Palo Alto (ID # 14837)
Utilities Advisory Commission Staff Report
Meeting Date: 11/2/2022 Report Type: VII. NEW BUSINESS
City of Palo Alto Page 1
Title: Staff Recommends the Utility Advisory Commission Recommend the
Finance Committee Recommend That the City Council Adopt a Resolution
Amending the E-HRA (Electric Hydro Rate Adjuster) Rate Schedule, Increasing
the Current E-HRA Rate to $0.026/kWh Effective January 1, 2023
From: Director of Utilities
Lead Department: Utilities
Recommended Motion
Staff recommends that the Utilities Advisory Commission (UAC) recommend the Finance
Committee recommend that Council adopt a resolution amending the Electric Hydro Rate
Adjuster (E-HRA), effective January 1, 2023, to reflect current hydrological conditions and
market purchase costs. This would double the existing E-HRA surcharges and discounts across
all levels, increasing the current E-HRA rate from $0.013/kwh to $0.026/kwh.
Executive Summary
Power available to the City of Palo Alto (City or Palo Alto) from hydroelectric resources
continues to be reduced due to the ongoing drought. Reduced hydro output has resulted in
increased demand for market power resources which is largely comprised of gas-fired
generation. The increase in demand combined with high fossil fuel prices caused by unstable
socio-political conditions has resulted in power prices that are nearly double the values used to
calculate the existing E-HRA surcharge. Hydro Stabilization (HS) Reserves have been exhausted,
and Operations Reserves are being negatively impacted by ongoing higher costs.
Staff recommends increasing the current E-HRA level from $0.013/kWh to $0.026/kWh in
response to increased market costs and continued drought conditions. This change will double
the existing E-HRA surcharges and discounts across all adjustment levels, and fund Operations
reserve levels above the minimum guidelines if market prices remain in the forecasted range
during the fiscal year.
Background
The City has access to a large amount of relatively low-cost, carbon free hydroelectric
generation to meet its electric supply needs. Whereas hydroelectric generation supplies about
10% of the overall electric supply for California, the City meets about 50% of its electric supply
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needs with hydro generation in an average year.
The drawback to maintaining such a heavy reliance on hydroelectric generation is that the
output of these resources is highly sensitive to weather conditions. Although the City receives
about 50% of its electric supplies from its hydroelectric resources in a “normal” weather year,
that amount can fall to as low as 20% in extremely dry years. And unlike many of the City’s
supply contracts, where the cost of the resource is proportional to the amount of generation
delivered, the City essentially pays a fixed amount every year for the output of its two
hydroelectric resources (the Federal Western Base Resource and the Calaveras project)
regardless of the amount of electricity they produce.
The City purchases additional supply resources (generic market power and, to comply with the
Carbon Neutral Plan, renewable energy certificates, or RECs) to make up for the reduced
hydroelectric output in these dry years. Market power prices are often higher in dry years,
when the City must purchase more, because the entire state is experiencing reduced hydro
supply conditions. Market prices are influenced by inflation, weather, alternative fuel costs, and
global supply and demand.
Figure 1 below illustrates this relationship between the City’s annual market purchase costs and
the amount of hydroelectric generation it receives.
Figure 1: Annual Hydro Generation vs. Market Purchase Costs (2012-2022)
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In 2005, when a new “Contract for Electric Service- Base Resource” with the Western Area
Power Administration (Wester or WAPA) increased the City’s exposure to hydro variability,
Council adopted a policy of maintaining reserves, combined with “laddered” market purchases,
to manage this variability1.
In 2018, Council adopted the E-HRA mechanism (CMR 89622) to manage the financial impacts
of the annual variability in production of the City’s hydroelectric resource. The E-HRA and the
HS Reserve are used to stabilize electric rates when hydrological conditions are either poor, as
is currently the case, or exceptionally good, and activation of the E-HRA is based on staff’s
evaluation of hydro generation availability and the HS Reserve level. When the HS Reserve falls
below 25% of its maximum ($11 million) and hydro generation is projected to be below normal
through the end of the current fiscal year, the E-HRA surcharge is applied. The resulting
revenues are used to fund the additional short-term costs of providing electric service. When
drought conditions subside and/or HS Reserves are within guideline ranges, the surcharge can
be de-activated and standard rates can resume.
In 2018, staff developed the E-HRA mechanism utilizing a 20-year simulation model, estimating
reserve needs under periods of both above average hydro generation as well as periods of
extended drought. The model estimated high market prices during periods of drought using
generation prices that were high at the time, about $47/MWh. As market costs have increased
above this level, staff recommends amending the HRA structure to update energy prices to
reflect current conditions. The model’s generation levels remain valid.
The E-HRA rate structure in effect now can result in either a 4% rate increase (at the
$0.0065/kWh level) or an 8% increase (at the $0.013/kWh level)3. The proposed E-HRA
increase to $0.026/kWh is approximately a $6.37 increase for a median electric residential
customer, resulting in an electric rate that is 45% below a comparable PG&E customer.
In March 2022, in response to rapidly worsening drought conditions in California, Council
adopted changes to the E-HRA surcharge (CMR 139054), broadening the conditions under which
the rate could be utilized and activating the rate effective April 1, 2022. This was done to avoid
increasing longer-term average rates, as well as help maintain general reserve health.
Discussion
1 As described in Palo Alto’s current Long-term Electric Acquisition Plan (LEAP) Objectives and Strategies:
https://www.cityofpaloalto.org/files/assets/public/environment-in-palo-alto/energy-compost-facility-
consideration/leap-objectives-and-strategies-april-2012.pdf
2 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city-manager-reports-
cmrs/year-archive/2018/final-staff-report-id-8962_hydroelectric-rate-adjustment-mechanism-adoption.pdf
3 For the median Palo Alto household, which consumes approximately 490 kWh/month, rate adjustments of 0.65
¢/kWh, 1.3 ¢/kWh, and 1.8 ¢/kWh equate to monthly bill impacts of $3.19, $6.37, and $8.82, respectively.
4 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/city-council-
agendas-minutes/2022/20220314/20220314pccsm-amended-final-revised-ppt.pdf
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The City receives power from two hydroelectric projects, the Calaveras project and the Western
Base Resource contract for Federal hydropower from the Central Valley Project.5 The
watershed for Western hydropower is primarily in the northern end of California, while the
watershed for the Calaveras project is in the Central Sierras.
Power from these sources is reduced under continued drought conditions. For water year 2020-
2021 (October 2020 to September 2021), total precipitation was just below 50% of average in
both watersheds. For water year 2021-2022, total precipitation was about 80% of average in
Northern California and about 63% of average in the Central Sierras. As shown in Table 1, total
actual hydropower generation for FY 2021 was 295 GWh, which is 183 GWh (38%) below the
long-term average, and total actual hydropower for FY 2022 was 230 GWh, which is 250 GWh
(52%) below the long-term average.6
Table 1: Hydro Generation FY 2021-22 Actuals (GWh)
Hydro Generation FY 2021 FY 2022
Calaveras Actuals 49 61
Western Actuals 246 169
Total Hydro Generation 295 230
Long-term Average Total (%) 61% 48%
Long-term Average Total Hydro 481 481
Reservoir levels remain very low across Northern and Central California. Most reservoirs are 30-
50% below their average levels for this time of year. As a result, Palo Alto’s hydroelectric
projections are approximately 275 GWh for this fiscal year, which is about 57% of the long-term
average level of hydro output, and 377 GWh for FY 2024, which is 78% of the long-term average
level.
When Council activated the E-HRA at the $0.013/kwh level effective April 1, 2022, projected
hydro output was about 310 GWh/year and HS Reserve funds were projected to be drawn
below $11 million7 by the end of FY 2022.
5 The Calaveras project is a hydropower project located in Calaveras County that is maintained and operated by the
Northern California Power Agency on behalf of the City and other project participants. The City is also one of
several public entities with contracts with the Western Area Power Administration for “Base Resource” electricity,
which is the hydroelectric power available from the Federal Government’s Central Valley Project (operated by the
Bureau of Reclamation) after accounting for power used for Central Valley Project operations and power delivered
to certain “preference” customers.
6The long-term average forecast levels for both Western and Calaveras have been revised downward (about 10%
each) in recent years to reflect the impact of climate change. These values may need to be revisited again in the
coming years.
7 When the HS Reserve level falls below 25% of its maximum, or $11 million, the E-HRA can be activated if
projected hydro generation is also below 480 GWh/yr.
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Market prices are now around $93/MWh, or roughly double the price used to estimate the
existing E-HRA rates. Actual power supply costs for FY 2022 were about $16 million more than
the adopted budget, and FY 2023 costs are also higher than expected. As a result, in June 2022,
staff requested a $15 million transfer of HS Reserve funds to the Operations Reserve to offset
costs in FY 2022. Council’s activation of the E-HRA rate offset $1.5 million of higher costs that
remained after the $15 million HS Reserve transfer. $400,000 remains in the Hydro
Stabilization Reserve.
While the FY 2022 Annual Comprehensive Financial Report is still being reviewed by auditors,
the current ending balance for the Supply Operations Reserve is approximately $22.2 million.
This is about $3.3 million above the Council-adopted minimum guideline levels for FY 20238.
Current projections are that purchase costs will be $9 million higher than projected in the FY
2023 Financial Plan, which will bring the Operations Reserve well below minimum by the end of
FY 2023. Amending the E-HRA rate as proposed within is projected to generate an additional $5
million in E-HRA revenues and keep the Supply Operations Reserve above minimum, as shown
in Table 1 below:
Table 1: Projected FY 2023 Supply Operations Reserve Balances (Million $’s)
FY 2023 Financial Plan
($00)
Current Projections
($00)
Beginning Supply Operations Reserve Balance 33,046 22,197
Net Fund Revenues/(Expenses) 927 927
Additional Purchase Cost N/A (9,000)
Proposed Additional E-HRA Revenue N/A 5,000
Ending Supply Operations Reserve Balance 34,973 19,124
Supply Operations Reserve Minimum Guideline 18,843 18,843
Based on the current sales trends for FY 2023, staff estimates the existing $0.013/kwh adjuster
will generate $10.25 million in the Electric Fund in FY 2023, as projected in the FY 2023
Financial Plan. Doubling the E-HRA rate as shown in Table 3 is projected to bring the Electric
Fund approximately $5 million in additional revenues in FY 2023 assuming an effective date of
January 1, 2023. If purchase power costs increase further, however, Supply Operations
Reserves may still drop below minimum guideline levels.
Table 2: Current Hydro Rate Adjustments ($/kWh)
Hydro Stabilization
Reserve Level
Projected Hydro Generation vs. Average Hydro Generation
(GWh/year)
8 FY 2023 Electric Financial Plan, adopted June 13, 2022, CMR 13661:
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/city-council-
agendas-minutes/2022/20220613/20220613pccsm-final-amended-linked.pdf
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Less than 319 319 to 480 480 to 642 Over 642
Above Maximum
(>$35 million)
$- $(0.0065) $(0.0065) $(0.018)
75% to 100%
($27 to $35 million)
$- $- $(0.0065) $(0.013)
25% to 75%
($11 to $27 million)
$- $- $- $-
25% and below
(<$11 million)
$0.013 $0.0065 $- $-
Table 3: Proposed Hydro Rate Adjustments ($/kWh)
Hydro Stabilization
Reserve Level
Projected Hydro Generation vs. Average Hydro Generation
(GWh/year)
Less than 319 319 to 480 480 to 642 Over 642
Above Maximum
(>$35 million)
$- $(0.013) $(0.013) $(0.036)
75% to 100%
($27 to $35 million)
$- $- $(0.013) $(0.026)
25% to 75%
($11 to $27 million)
$- $- $- $-
25% and below
(<$11 million)
$0.026 $0.013 $- $-
The alternative to increasing the E-HRA surcharge is implementing a general electric rate
increase. Utilizing the E-HRA is a targeted way to mitigate the impacts of hydro generation and
supply cost fluctuations. When conditions stabilize, the E-HRA can be quickly be amended,
leaving the base rates intact. If higher market prices persist or appear to be a ‘new normal’, or
larger long-term reserves are needed, general rates can be increased at the next fiscal year and
the E-HRA brought to zero as additional revenue recovery is not needed.
Next Steps
The Finance Committee is tentatively scheduled to consider staff’s recommended amendments
to the E-HRA rate in late November 2022, with Council scheduled to consider those
amendments in December 2022.
Environmental Review
The UAC’s recommendation that Council amend the E-HRA rate does not meet the California
Environmental Quality Act’s definition of a project, pursuant to Public Resources Code Section
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21065 and CEQA Guidelines Section 15378(b)(4) and (5), because it is a governmental fiscal and
administrative activity which will not cause a direct or indirect physical change in the
environment.
Resource Impact
Based on the current sales trends for FY 2023, staff estimates the existing $0.013/kwh adjuster
will generate an additional $10.25 million in the Electric Fund in FY 2023. If Council adopts
staff’s recommendation, the annual revenues would double to $20.5 million, or an additional
$5.12 million for the latter half of FY 2023. The City is a utility customer so rate increases will
also result in City expense increases. Resource impacts to City departments and funds of the
recommended rate adjustments will be reflected in the midyear budget process.
Attachments:
• Attachment A: Resolution
• Attachment B: Proposed E-HRA
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Attachment A
6056681 1
Reference Document: Utility Rate Schedule E-HRA
Resolution No.___
Resolution of the Council of the City of Palo Alto Amending Electric
Rate Schedule E-HRA (Electric Hydro Rate Adjuster), Increasing the
Current E-HRA Rate to $0.026/kWh Effective January 1, 2023
R E C I T A L S
A. Hydroelectric Rate Adjustment mechanisms are designed to modify customer
rates, either up or down, such that overall sales revenue is aligned with supply costs for the
electric utility.
B. Hydroelectric Rate Adjustment mechanisms are intended to enable the electric
utility to maintain a reasonably stable level of financial reserves, and maintain base electric
rates at lower levels over the long term.
C. In 2018, staff developed the E-HRA rate mechanism utilizing a 20-year
simulation model, estimating reserve needs under periods of both above average hydro
generation as well as periods of extended drought. The model estimated high market prices
during periods of drought using generation prices that were high at the time, about $47/MWh.
Since then, multi-year drought conditions, rising inflation, increased market costs for
alternative fuels and uncertainty in natural gas markets have nearly doubled the market costs
for electricity. The existing E-HRA rate is no longer collecting enough revenue to adequately
offset required market purchases.
D. Section D(2)(a) of the Council-adopted E-HRA Rate Schedule directs staff to
calculate the Hydro Rate Adjustment annually in May. E-HRA activation may also occur at other
times throughout the year, such as when hydrologic conditions are poor and Hydroelectric
Stabilization Reserve levels are projected to fall below the 25% level within the current fiscal
year.
E. Therefore, staff recommends the Council modify the E-HRA rate schedule to
reflect updated market supply costs and hydrologic conditions, and mitigate Operations
Reserve impacts.
F. Pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the Council of
the City of Palo Alto may by resolution adopt rules and regulations governing utility services,
fees and charges.
The Council of the City of Palo Alto hereby RESOLVES as follows:
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Attachment A
6056681 2
Reference Document: Utility Rate Schedule E-HRA
SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule E-HRA (Electric Hydro Rate Adjuster) is added as attached and incorporated.
Utility Rate Schedule E-HRA, as amended, shall become effective January 1, 2023.
SECTION 2. As a result, on January 1, 2023 the $0.013/kWh E-HRA rate activated by
Council on March 14, 2022, and effective April 1, 2022, will increase to $0.026/kWh.
SECTION 3. The Council finds that the revenue derived from the adoption of this
resolution shall be used only for the purpose set forth in Article VII, Section 2, of the Charter of
the City of Palo Alto.
SECTION 4. The Council finds that the fees and charges adopted by this resolution are
charges imposed for a specific government service or product provided directly to the payor
that are not provided to those not charged, and do not exceed the reasonable costs to the City
of providing the service or product.
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Attachment A
6056681 3
Reference Document: Utility Rate Schedule E-HRA
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SECTION 5. The Council finds that the adoption of this resolution changing electric
rates to meet operating expenses and meet financial reserve needs is not subject to the
California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec.
21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a). After reviewing
the staff report and all attachments presented to Council, the Council incorporates these
documents herein and finds that sufficient evidence has been presented setting forth with
specificity the basis for this claim of CEQA exemption.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
___________________________ ___________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
___________________________ ___________________________
Assistant City Attorney City Manager
___________________________
Director of Utilities
___________________________
Director of Administrative Services
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ELECTRIC HYDRO RATE ADJUSTER
UTILITY RATE SCHEDULE E-HRA
CITY OF PALO ALTO UTILITIES Issued by the City Council
Supersedes Sheet No EHRA-1 Sheet No E-HRA-1
dated 47-1-20221 Effective 14-1-20232
A. APPLICABILITY: This schedule applies to all Customers receiving Electric Service from the City of Palo Alto Utilities.
B. TERRITORY: This schedule applies everywhere the City of Palo Alto provides Electric Service. C. RATES: Per kWh Hydro Rate Adjustment: ...............................................................................($0.03618) - $0.02613 D. SPECIAL NOTES: 1. Hydro Rate Adjustment a. The Hydro Rate Adjustment is a surcharge or discount applied to Electric rates based on the strength of the City’s hydrological generation portfolio, applied to manage
volatility in energy costs and generation and the impact of that volatility on customer rates. b. The Hydro Rate Adjustment is determined based on the level of funding in the Hydro Stabilization Reserve, including transfers or withdrawals projected to be made in the
current fiscal year according to the City’s Electric Utility Reserve Management
Practices, and on the forecasted amount of annual generation the City of Palo Alto Utilities will receive from its hydroelectric generation resources through the end of the current fiscal year.
2. Calculation of Hydro Rate Adjustment
a. Staff calculates the Hydro Rate Adjustment surcharge or discount annually in May, or whenever hydrologic conditions are poor and Hydro Stabilization Reserves are projected to fall below the 25% level within the current fiscal year.
b. The Hydro Rate Adjustment will be applied to all Customers’ Electric rate schedules
upon Council approval, and re-evaluated annually. c. The Hydro Rate Adjustment surcharge or discount will fall within the minimum/maximum range set forth in Section C, and will be applied as follows:
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ELECTRIC HYDRO RATE ADJUSTER
UTILITY RATE SCHEDULE E-HRA
CITY OF PALO ALTO UTILITIES Issued by the City Council
Supersedes Sheet No EHRA-2 Sheet No E-HRA-2
dated 47-1-20221 Effective 14-1-20232
Hydro Rate Adjustment ($/kWh)
Hydro Stabilization
Reserve Level
Projected Hydro Generation vs. Average Hydro Generation (GWh/year)
Less than 319 319 to 480 480 to 642 Over 642
Above Maximum $- $(0.013065) $(0.013065) $(0.03618)
75% to 100% $- $- $(0.013065) $(0.02613)
25% to 75% $- $- $- $-
25% and below $0.02613 $0.013065 $- $-
{End}
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City of Palo Alto (ID # 14794)
Utilities Advisory Commission Staff Report
Meeting Date: 11/2/2022 Report Type: VII. NEW BUSINESS
City of Palo Alto Page 1
Title: Changes to the Utilities Rules and Regulations and Rate Schedules for
AMI implementation
From: Director of Utilities
Lead Department: Utilities
Recommended Motion
Staff recommends that the UAC recommend Council adopt the attached Resolution
(Attachment A) amending Utilities Rules and Regulations 2, 8, 9, 10, 15, 18, 20, and Utilities
Rate Schedules C-1 and C-4, as attached.
Executive Summary
Utilities Rules and Regulations (Rules) are updated as needed to ensure current procedures are
in place to continue City of Palo Alto Utilities (CPAU) operations. The recommended changes to
the various Rules and Regulations add new provisions, remove outdated sections, update
language for clarity, and reflect changes to applicable regulations, business practices and
procedures, as the department implements the Advanced Metering Infrastructure (AMI)
program. Revisions to two rate schedules are required to reflect new fees for customers
seeking to opt out from the AMI program.
Background
The changes below include new Opt-Out and Electric Meter Remote Disconnect policies that
were discussed at the June UAC, Staff Report 14288 (Linked Document) meeting and are
proposed to be incorporated into Utilities Rules and Regulations 9 (“Discontinuance,
Termination and Restoration of Service”) and 10 (“Meter Reading”). Most of the changes do not
impact long range planning, policies, or programs. The changes mainly reflect daily operational
changes and procedures that are currently in place.
Discussion
Twenty-nine Utilities Rules and Regulations (Rules) set forth the conditions under which the
City provides utility services to customers from both the Utilities Department (electric, natural
gas, water, wastewater, fiber optic) and the Public Works Department (refuse, storm drain).
The Rules are updated on as-needed basis to reflect current standards and business practices,
and to streamline language to make the rules more user-friendly and provide for ease of
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administration. Each of the Rules below includes changes reflecting this approach; additional
specific edits are noted below, and redlined copies of each rule are available online with links
provided on the last page of this report. Rate schedules are updated as needed to reflect the
costs of providing utility service and meeting utility operating expenses, in this case, the cost of
manual meter reading and bill processing for customers who opt out of the AMI program
functionality.
Opt-Out Policy (Electric and Gas)
According to national statistics, CPAU anticipates approximately 0.5% of customers may want
to opt out of the AMI program (150 of 30,000 customers). Customers who opt out will not be
able to realize the benefits of an advanced meter. If a residential customer wishes to opt-out of
the AMI electric and/or gas program, they will be given the opportunity to opt out either before
or after their advanced meter upgrade. CPAU will not be providing a water meter opt-out
option since water meters are typically located in the public right of way and distant from the
home.
Electric Meter Remote Disconnect/Reconnect Policy
One major operational benefit of AMI is reducing the cost and number of utility service vehicles
being dispatched (truck roll) for customer disconnection and reconnection. By decreasing the
number of truck rolls, the City’s carbon footprint is also reduced, and utility resources can be
reassigned to other services. Remote disconnect meters have a breaker inside of them that can
be controlled remotely. This will be an effective solution for customers who are turned on and
off frequently as well as residences that have a high turnover such as rental properties or
apartment complexes.
Utilities Rules and Regulations (2, 8, 9, 10, 15, 18, 20)
Utilities Rule and Regulation 02 (Definitions and Abbreviations)
Rule and Regulation 2 describes commonly used industry acronyms and the definitions of
various terms used throughout Rules. The proposed changes include a minor update to the
Point of Service terminology to be consistent with the change in Utilities Rule and Regulation
20, “Special Electric Utility Regulations”, and clarifications around the definition of charges and
taxes.
Utilities Rule and Regulation 08 (Access to Premises)
The recommended amendments to Rule 8 clarify the customer’s responsibilities in keeping the
meter and meter facilities clear of obstruction, debris, and vegetation.
Utilities Rule and Regulation 09 (Discontinuance Restoration)
The recommended amendments to Rule 9 include adding a new section for remote disconnect
and reconnect services from the meter. CPAU will use the remote disconnect/reconnect feature
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enabled on the new AMI electric meters. The use of this feature allows for the disconnection
and/or reconnection of an electrical service to a service address without CPAU staff being
physically present at the meter location.
Utilities Rule and Regulation 10 (Meter Reading)
The recommended amendments to Rule 10 add a new section for customers who may choose
to opt out and temporarily keep their existing (legacy) meter by notifying CPAU before a new
AMI-enabled meter is installed. Opt-out customers will be assessed opt-out fees to recover
costs for Customer Service, Meter Reading and Billing for manual monthly billing, as reflected in
the updated rate schedules described below.
Utilities Rule and Regulation 15 (Metering)
The recommended amendments to Rule 15 extend provisions relating to meter installation to
also cover installing or updating related metering equipment as needed to maintain standards
and update outdated equipment that maintains or improves on the functionality of CPAU’s
utility services.
Utilities Rule and Regulation 18 (Utility Service Connections and Facilities on Customers'
Premises)
The recommended amendments to Rule 18 stipulate CPAU must have the flexibility and ability
to relocate or modify Utility Service Lines or Points of Service for the purpose of meeting quality
control standards, updating outdated equipment, or otherwise improving the functionality of
Utility Services.
Utilities Rule and Regulation 20 (Special Electric Utility Regulations)
The recommended amendments to Rule 20 are to be consistent with Utilities Rule and
Regulation 15, “Metering”, to reflect CPAU’s ability to install not only meters but any related
equipment needed to maintain standards and update outdated equipment in order to maintain
or improve on the functionality of CPAU’s utility services.
Utility Rate Schedules (C-1 and C-4)
The set-up charge is to recover costs of establishing a new meter reading route for opt-out
customers and verifying customer’s eligibility to participate in the program. The ongoing
monthly charge covers collecting the self reads, reviewing the historical reads for anomalies,
the annual meter audit of self reads, and a visual inspection of the meter.
Utility Rate Schedule C-1 (Utility Miscellaneous Charges)
The recommended amendments to Rate Schedule C-1 includes the Opt-Out fees for AMI. A
one-time non-refundable set up charge in the amount of $100 will be billed on the customer
residential account. In addition, a recurring monthly fee of $25 will be billed to the residential
account to cover the costs of utility billing and manual meter read verification.
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City of Palo Alto Page 4
Utility Rate Schedule C-4 (Residential Rate Assistance Program)
The recommended amendments to Rate Schedule C-4 includes the Opt-Out fees for AMI. For
low-income customers enrolled in the RAP program, a one-time set-up charge is $50 with a
recurring monthly fee of $10. Customers can opt into the AMI program at any time to
discontinue the opt-out fees for no charge
Timeline
Staff plans to bring the UAC recommended rules changes the rules to Policy and Services
Committee in December and to Council in January.
Resource Impact
Approval of changes to Utilities Rules and Regulation 2, 8, 9, 10, 15, 18, 20, Rate Schedules C-1
and C-4 will not result in a significant change in net operating revenues or expenses.
Policy Implications
These recommendations do not represent a change in current City policies.
Environmental Review
The UAC’s recommendation to Council that Council adopt the resolution amending specified
Utility Rules and Regulations and Rate Schedules does not meet the definition of a “project”
under Public Resources Code 21065 or CEQA Guidelines Section 15378(b)(5), since the
recommendation will not result in direct or indirect physical changes in the environment, thus
no CEQA review of this action is required.
Attachments:
• Attachment A: Resolution
• Rule 02 Definitions and Abbreviations - redlined
• Rule 08 Access to Premises - redlined
• Rule 09 Discontinuance Restoration - redlined
• Rule 15 Metering - redlined
• Rule 18 Utility Service Connections and Facilities on Customers' Premises - redlined
• Rule 20 Special Electric Utility Regulations - redlined
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*NOT YET APPROVED*
1
Resolution No. ______
RESOLUTION AMENDING UTILITY RATE SCHEDULE C-1 (UTILITY MISCELLANEOUS
CHARGES), UTILITY RATE SCHEDULE C-4 (RESIDENTIAL RATE ASSISTANCE
PROGRAM), UTILITIES RULE AND REGULATION 2 (DEFINITIONS AND
ABBREVIATIONS), UTILITIES RULE AND REGULATION 8 (ACCESS TO PREMISES),
UTILITIES RULE AND REGULATION 9 (DISCONNECTION, TERMINATION AND
RESTORATION OF SERVICE), UTILITIES RULE AND REGULATION 10 (METER
READING), UTILITIES RULE AND REGULATION 15 (METERING), UTILITIES RULE
AND REGULATION 18 (UTILITY SERVICE AND FACILITIES ON CUSTOMER
PREMISES), UTILITIES RULE AND REGULATION 20 (SPECIAL ELECTRIC UTILITY
REGULATIONS)
RECITALS
A. In October 2021, Council approved the Advanced Metering Infrastructure (AMI) project
to install 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.
B. Revisions to the Utilities Rules and Regulations are required to incorporate concepts
specific to the AMI equipment and services, as well as to two rate schedules to reflect
new fees for customers seeking to opt out from the AMI program.
The Council of the City of Palo Alto does Hereby RESOLVE, as follows:
SECTION 1. Pursuant to section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule C-1 (Utility Miscellaneous Charges) of the Palo Alto Utilities Rates and Charges is
hereby amended to read as attached and incorporated. The foregoing Utility Rate Schedule, as
amended, shall become effective Month, day 2023.
SECTION 2. Pursuant to section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule C-4 (Residential Rate Assistance Program) of the Palo Alto Utilities Rates and
Charges is hereby amended to read as attached and incorporated. The foregoing Utility Rate
Schedule, as amended, shall become effective Month, day 2023.
SECTION 3. Pursuant to section 12.20.010 of the Palo Alto Municipal Code, Utilities
Rule and Regulation 2 (Definitions and Abbreviations) is hereby amended as attached and
incorporated. Utility Rule and Regulation 2, as amended, shall become effective Month, day
2023.
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SECTION 4. Pursuant to section 12.20.010 of the Palo Alto Municipal Code, Utilities
Rule and Regulation 8 (Meter Reading) is hereby amended as attached and incorporated. Utility
Rule and Regulation 8, as amended, shall become effective Month, Day 2023.
SECTION 5. Pursuant to section 12.20.010 of the Palo Alto Municipal Code, Utilities
Rule and Regulation 9 (Disconnection, Termination and Restoration of Service) is hereby
amended as attached and incorporated. Utility Rule and Regulation 9, as amended, shall
become effective Month, Day 2023.
SECTION 6. Pursuant to section 12.20.010 of the Palo Alto Municipal Code, Utilities
Rule and Regulation 10 (Meter Reading) is hereby amended as attached and incorporated.
Utility Rule and Regulation 10, as amended, shall become effective Month, Day 2023.
SECTION 7. Pursuant to section 12.20.010 of the Palo Alto Municipal Code, Utilities
Rule and Regulation 15 (Metering) is hereby amended as attached and incorporated. Utility
Rule and Regulation 15, as amended, shall become effective Month, Day 2023.
SECTION 8. Pursuant to section 12.20.010 of the Palo Alto Municipal Code, Utilities
Rule and Regulation 18 (Utility Service and Facilities on Customer Premises) is hereby amended
as attached and incorporated. Utility Rule and Regulation 18, as amended, shall become
effective Month, Day 2023.
SECTION 9. Pursuant to section 12.20.010 of the Palo Alto Municipal Code, Utilities
Rule and Regulation 20 (Special Electric Utility Regulations) is hereby amended as attached and
incorporated. Utility Rule and Regulation 20, as amended, shall become effective Month, Day
2023.
SECTION 10. The Council finds that the fees and charges adopted by this resolution are
charges imposed for a specific government service or product provided directly to the payor
that are not provided to those not charged, and do not exceed the reasonable costs to the City
of providing the service or product.
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*NOT YET APPROVED*
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SECTION 11. Council finds that the adoption of revised rate schedules in this Resolution
is statutorily exempt from the California Environmental Quality Act (CEQA), pursuant to CEQA
Guidelines Section 15273(a), because the fees and charges proposed are necessary to recover
the cost of providing utility service and meet operating expenses. After reviewing the reports
presented, the Council incorporates these documents herein and finds that sufficient evidence
has been presented setting forth with specificity the basis for this claim of CEQA exemption.
Council finds that the adoption of revised Utility Rules and Regulations does not meet the
definition of a “project” under Public Resources Code Section 21065 or CEQA Guidelines Section
15378(b)(2).
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST: APPROVED:
________________________________ ________________________________
City Clerk Mayor
________________________________ ________________________________
Assistant City Attorney City Manager
________________________________
Director of Utilities
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DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No 1
A. ABBREVIATIONS
AMI - Advanced Metering Infrastructure
AMR - Automated Meter Reading AER - Advance Engineering Request APGA - American Public Gas Association ARB - Air Resources Board (California)
AWWA - American Water Works Association
Btu - British Thermal Unit ccf - Hundred Cubic Feet (water) CEC - California Energy Commission CNG - Compressed Natural Gas
CPAU - City of Palo Alto Utilities
CPI - Consumer Price Index CPUC - California Public Utilities Commission DOE - Department of Energy (Federal) DOT - Department of Transportation (Federal)
DSM - Demand-side Management
EVSE - Electric Vehicle Supply Equipment ERT - “Encode, Receive, Transmit” ERU - Equivalent Residential Unit FERC - Federal Energy Regulatory Commission
GPM - Gallons Per Minute
kVar - Kilovar kVarh - Kilovar-hours kW - Kilowatt kWh - Kilowatt-hour
LCFS - Low Carbon Fuel Standard
MW - Megawatt MMBtu - One million Btu. NCPA - Northern California Power Agency NEC - National Electric Code, Latest Version
NEM - Net Energy Metering
NEM 1 - Net Energy Metering Program NEM 2 - Net Energy Metering Successor Program NEMA - Net Energy Metering Aggregation NEMIA - Net Energy Metering Interconnection Agreement
NRTL - Nationally Recognized Testing Laboratory
PAMC - Palo Alto Municipal Code
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DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No 2
PSIG - Per square inch gauge RAP - Rate Assistance Program
PPA - Power Purchase Agreement
PST - Pacific Standard Time RTP - Real-time Pricing RWQCP - Regional Water Quality Control Plant TOU - Time of Use
WAPA - Western Area Power Administration
UUT - Utilities Users Tax B. GENERAL DEFINITIONS
Account The identification number in CPAU’s billing system for Utility Services. Advance Engineering Fee
A non-refundable fee paid at the start of an engineering review process. The Advance Engineering Fees
will be credited against the estimated job cost prior to collection of construction fees. Advanced Metering Infrastructure A technology system using radio and cell signal telecommunication channels to detect and transmit data
from “smart” utility Meters, enabling Customers to view near-real time consumption data through the
Customer web portal. Agency Any local, county, state or federal governmental body or quasi-governmental body, including, without
limitation, the CPUC, the FERC and any joint powers agency, but excluding the City and any board,
commission or council of the City. Aggregation Customer A Customer with a Renewable Electrical Generation Facility wishing to install an eligible Renewable
Electrical Generation Facility that is sized to offset separately metered electric loads on adjacent or
contiguous properties that are solely owned, leased, or rented by that Customer, and who has signed the Net Energy Metering Interconnection Agreement for NEM Aggregation. Affected System
An Electric system, other than CPAU’s Distribution or Transmission System, that may be affected by a
Customer’s proposed Interconnection of a Generating Facility.
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DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No 3
Affected System Operator
The entity that operates an Affected System.
Applicant An individual, corporation, partnership, Agency, or other legal entity or authorized agent of same, requesting CPAU to supply any or all of the following:
1. Electric Service 2. Water Service 3. Gas Service 4. Wastewater Collection
5. Refuse Service
6. Storm and Surface Water Drainage Service 7. Fiber Optics Service Or, an entity submitting an Application for Interconnection pursuant to Utilities Rule and Regulation 27.
Application (for Interconnection of Generating Facilities) An approved standard form (Load Sheet) submitted to CPAU for Interconnection of a Generating Facility. Backflow Prevention Assembly
Approved device to prevent water from Customer plumbing from flowing into the City’s Water
Distribution System. Beneficiary Account The Electric Service Meter(s) serviced by an Aggregation Customer’s Generating Facility, as listed on the
Aggregation Customer’s NEM Aggregation Interconnection Agreement.
Bidweek Price Index The price reported in Natural Gas Intelligence “NGI’s Bidweek Survey”, California “PG&E Citygate” under the column “avg.” for the calendar month.
Billing Period Also “service period” or “billing cycle”. The normal Billing Period for CPAU Customers is 27 to 33 days with variations occurring due to staff availability, holiday scheduling, field verification of Meter readings, or any other billing-related issues requiring additional investigation prior to issuance of the bill.
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DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No 4
British Thermal Unit Also “Btu”. The standard sub-unit of measurement comprising a Therm of natural Gas. One (1) Therm
equals 100,000 Btu.
Business Day Any day, except a Saturday, Sunday, or any day observed as a legal holiday by the City.
Business Partner
A Utilities customer having multiple service locations in the City of Palo Alto. ccf (lower case) One hundred cubic feet of water (748 gallons).
Certification Test A test pursuant to Utilities Rule and Regulation 27 that verifies conformance of certain equipment with approved performance standards in order to be classified as Certified Equipment. Certification Tests are performed by NRTLs.
Certification; Certified; Certificate The documented results of a successful Certification Test. Certified Equipment
Equipment that has passed all required Certification Tests. Charge Any assessment, cost, fee, surcharge or levy for Utility Service other than a Tax, including metered and unmetered Utility Service, capacity, connections, construction, penalties, and mandated or required
Customer financial obligations for Service.
Charter The Charter of the City of Palo Alto.
City Attorney
The individual designated as the City Attorney of the City under Section 2.08.120 of the Palo Alto Municipal Code, and any Person who is designated the representative of the City Attorney.
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DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No 5
City’s Collector The Person(s) authorized under Section 5.20.040 of the Palo Alto Municipal Code to provide collection,
processing and disposal of Refuse including Solid Waste, Compostable Materials and Recyclable
Materials pursuant to one or more written contracts with the City. City Lateral A City Lateral (also known as a Lower Sewer Lateral) is the portion of the Sewer Lateral that is owned
and maintained by the City. A City Lateral typically is the lower portion of a Sewer Lateral downstream
from the City Sewer Cleanout. City Manager The individual designated as the City Manager of the City under Section 2.08.140 of the Palo Alto
Municipal Code, and any Person who is designated the representative of the City Manager.
City of Palo Alto, or City The government of the City of Palo Alto, a chartered City and a municipal corporation duly organized and validly existing under the Laws of the State of California, with a principal place of business located at 250
Hamilton Avenue, Palo Alto, County of Santa Clara. For the purposes of these Rules and Regulations,
the term “City” may include services provided by both the City of Palo Alto Utilities Department and the City of Palo Alto Public Works Department. City of Palo Alto Public Works Department (Public Works)
The City Department responsible for providing Refuse Service, Wastewater Treatment and Storm and
Surface Water Drainage Services. Other Utility Services such as Water, Gas, Electric, Wastewater Collection, and Fiber Optics are provided by the City of Palo Alto Utilities Department. City of Palo Alto Utilities Department (CPAU)
The City Department responsible for providing Water, Gas, Electric, Wastewater Collection and Fiber
Optic Utility Services. Other Utility Services such as Refuse Service, Wastewater Treatment and Storm and Surface Water Drainage are provided by the City of Palo Alto Public Works Department. City Sewer Cleanout
A sewer cleanout is a point of access where the Sewer Lateral can be serviced. The City Sewer Cleanout
typically marks the transition point between the City Lateral (Lower Sewer Lateral) and the Customer’s Upper Lateral, as further described in Utilities Rule and Regulation 23. . CNG Vehicle
A vehicle powered by compressed natural gas.
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DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No 6
Code The words "the Code" or "this Code" shall mean the Palo Alto Municipal Code.
Commercial Service
Commercial Utility Service is provided to businesses, non-profit organizations, public institutions, and industrial Customers. The term also applies to Utility Services through Master Meters serving multi-family Residential dwellings and common areas of multi-family facilities.
Compostable Materials
Organic materials designated by the City as acceptable for collection and processing, including, without limitation, yard trimmings, food scraps, soiled paper and compostable plastics, but excluding animal manure, sewage sludge, and human biological infectious wastes.
Container
Any bin, box, cart, compactor, drop box, roll-off box, or receptacle used for storage of Solid Waste, Recyclable Materials, Compostable Materials or other materials designated by the City to be collected by the City’s Collector.
Cooling Degree Days
The number of the degrees per day that the daily average temperature is above 65 degrees Fahrenheit. The daily average temperature is the mean of the maximum and minimum temperatures for a 24-hour period. Cross Bore
A Cross Bore is the unintended conflict between one utility line and a portion of another utility line. This
situation can happen during construction using “horizontal directional drilling” or underground pneumatic boring. Cross Bore Inspection Program
The Cross Bore Inspection Program inspects City Laterals and Private Laterals to find and repair Gas
pipes that pass through existing Sewer Laterals. Cross Connection Cross Connections are any actual or potential unapproved unprotected connections between a potable
water system and any source or system containing unapproved water or a substance which may not be
safe. Cross Connection Control and Backflow Prevention Program This program protects the quality of drinking Water by preventing contaminants in private Service pipes
from entering the Water Distribution system.
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DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No 7
Cubic Foot of Gas (cf) The quantity of Gas that, at a temperature of sixty (60) degrees Fahrenheit and a pressure of 14.73 pounds
per square inch absolute, occupies one cubic foot.
Curtailment The act of reducing or interrupting the delivery of natural Gas.
Customer The Person, corporation, Agency, or entity that receives or is entitled to receive Utility Service(s) from the City of Palo Alto, or in whose name Service is rendered for a particular Account as evidenced by the signature on the Application, contract, or agreement for Service. In the absence of a signed instrument, a
Customer shall be identified by the receipt of any payment of bills regularly issued in the name of the
Person, corporation, or Agency regardless of the identity of the actual user of the Utility Service(s).
Customer-Generator A Customer who is an “eligible customer-generator,” as that term is defined by the California Public Utilities Code section 2827, as the same may be amended from time to time.
Dark Fiber (Optic) A Fiber Optic cable provided to end-users or resellers by CPAU without any of the light transmitters, receivers, or electronics required for telecommunications over the Fiber. Transmission equipment for Fiber Optic activation service is provided by the reseller or end-user.
Dark Fiber (Optic) Infrastructure The components of the CPAU Fiber Optic Distribution System required to provide Service to Customers (licensees), that are attached, owned, controlled or used by the City, located overhead or underground within the Public Right-of-Way, the Public Utility Easements and Leased Service Properties.
Dark Fiber (Optic) Licensing Agreement The mandatory contractual agreement between the City and the Customer specifying the terms, conditions and pricing to access the City of Palo Alto’s Dark Fiber (Optic) Ring.
Dedicated Distribution Transformer
A distribution transformer that is dedicated to serving a single premise.
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DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No 8
Demand The highest rate of metered delivery of Electric energy, measured in Kilowatts (kW) or kilovolt amperes
(kVA) occurring instantaneously or registered within a specified time interval (normally fifteen minutes
within a monthly billing cycle, unless otherwise specified). Demand Charge An electrical Charge or rate that is applied to a metered Demand reading, within a specified interval,
expressed in Kilowatts (kW) to compute the Demand Charge component of a Customer’s Electric bill. Demand-side Management The planning, implementation, and monitoring of Utility activities designed to encourage commercial, residential, agricultural, and institutional Customers to modify patterns of electricity, natural gas, and
water usage, including the timing and level of demand. Demand-side management also covers the
complete range of electric load-shape objectives, including strategic conservation, load management, and strategic load growth. Demarcation Point
The Demarcation Point for a project shall be the Customer side of the panel onto which the CPAU Fiber
terminates within the Customer Premises, unless otherwise specified in the Proposal for Dark Fiber Services. Deposit
A fixed amount (for residential customers), or an estimated amount based upon usage (for commercial
customers, except Fiber Optic), to be paid to the Utilities Department upon submission of an Application for Service. See Utilities Rule and Regulation 7, “Deposits.” Detailed Study
An engineering study consisting of an Interconnection System Impact Study and an Interconnection
Facilities Study for the purpose of identifying Interconnection Facilities, Distribution Upgrades, and Reliability Network Upgrades. Disconnection Notice
A final written notice from CPAU to the Customer indicating the date that all Utilities Services will be
disconnected for non-payment unless payment is tendered to mitigate an outstanding balance, or until a Payment Arrangement is completed with CPAU for repayment over time. See Utilities Rule and Regulation 9, “Disconnection, Termination, and Restoration of Service.”
5.b
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DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No 9
Distribution Services This includes, but is not limited to, Utility Service provided by the City’s Distribution System and other
Services such as billing, Meter reading, administration, marketing, and Customer Services. Distribution
Services do not include Services directly related to the Interconnection of a Generating Facility, as per Utilities Rule and Regulation 27. Distribution System
The infrastructure owned and operated by CPAU which is capable of transmitting electrical power, other
than Interconnection Facilities, or transporting Water, Wastewater, or Gas within the City of Palo Alto. The Electric Distribution System transmits power from the City’s Interconnection with PG&E to CPAU’s Meter located on the Customer’s Premises. The Gas Distribution System transports Gas from PG&E receiving stations to CPAU’s Meter located on the Customer Premises. The Water Distribution System
transports Water from the San Francisco Water Department receiving stations and CPAU wells to the
meter located on the Customer Premises. The Wastewater Collection System transports sewage from the Customer’s Premises to the Water Quality Control Plant. Duct
A single, enclosed thoroughfare for conductors, cables, or wires.
Easement See Public Utility Easement.
Efficiency
The ratio of water or energy input to useful output, measured at either a single point in time, or measured change in ratio over time. Effluent
Treated or untreated Wastewater flowing out of a Wastewater treatment facility, sewer, or industrial
outfall. Elasticity of Demand The ratio of the percentage change in consumer demand to the percentage change in price. If the ratio is
more than one, demand is elastic (sensitive to price).
Electric Distribution The process of delivering electric energy to customers on a utility’s distribution system. Transmission lines carry electricity at high voltage to substations which reduce the voltage and distribute the electricity
over primary distribution lines that extend throughout the service territory.
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DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No 10
Electric, Electric Service A Utility Service provided to residents and business owners in the City of Palo Alto consisting of the
generation, transmission, and distribution of electrical power for retail use. Electric Service is provided
by the City of Palo Alto Utilities Department. Electric Vehicle A vehicle powered by an electric motor that draws current from rechargeable storage batteries, fuel cells,
photovoltaic arrays, residential or commercial charging kiosks, or other sources of electric current. Electric Vehicle Supply Equipment (EVSE) The conductors, including the ungrounded, grounded, and equipment grounding conductors and the electric vehicle connectors, attachment plugs, and all other fittings, devices, power outlets, or apparatus
installed specifically for the purpose of transferring energy between the premises wiring and the electric
vehicle. EVSE is as defined in the California Electrical Code, California Code of Regulations (CCR), Title 24, Part 3, Chapter 6, Article 625 (Electric Vehicle Charging System), as amended. Enterprise Funds, Enterprise Services
A budgetary identification for individual Utilities services. Each individual Utility (electric, natural gas,
water, wastewater, storm drain, fiber optic, refuse) has its own operating and capital budgets, staffing, contracts, financial obligations, cash reserves, etc. combined into specific Enterprise Funds. Emergency
An actual or imminent condition or situation, which jeopardizes CPAU’s Distribution System Integrity.
Emergency Service The Electric Service supplied to, or made available to, Load devices which are operated only in Emergency situations or in testing for same.
Energy Services
The Energy commodity and any applicable ancillary Services used to generate and transport such commodity from its origin to the City’s Point of Receipt. May also mean the sale of value-added Services associated with or related to the Provision and/or usage of the energy commodity.
Energy Storage Facility, Energy Storage System
A facility or storage system that is an “energy storage system,” as that term is defined by the California Public Utilities Code section 2835, as the same may be amended from time to time. End Points
The respective start and termination of a Fiber Optic cable.
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DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No 11
Equivalent Residential Unit (ERU)
The basic unit for computing storm and surface water drainage fees. All single-family Residential
properties are billed the number of ERU’s specified in the table contained in Utility Rate Schedule D-1, according to parcel size. All other properties have ERU's computed to the nearest 1/10 ERU using this formula: No. Of ERU = Impervious Area (sq. ft.) / 2,500 sq. ft.
ERT (“Encode, Receive, Transmit”)
A battery-powered module attached to an Electric, natural Gas, or Water Meter that permits the remote reading by CPAU of secure, or encrypted, meter data from a centralized location for the purposes of billing, outage management, or data analysis.
Final Bill
The last bill that is issued upon permanent termination of Service. This bill will combine ending financial debits and credits, close the Account, and terminate all further Customer and Utility financial obligations, unless additional Services are requested by the Customer prior to the receipt of the final bill.
Fiber Optic (Optical Fiber), Fiber Optic Service
A solid core of optical transmission material. Fiber Optic Service that is provided by the City of Palo Alto Utilities Department is referred to as Dark Fiber. Fiber Optic Backbone
The high-density portion of the Dark Fiber Infrastructure installed and owned by the City.
Force Majeure The occurrence of any event that has, had, or may have an adverse effect on the design, construction, installation, management, operation, testing, use or enjoyment of the City’s Utility Services, which is
beyond the reasonable control of the City or Customer and which event includes, but is not limited to, an
Act of God, an irresistible superhuman cause, an act of a superior governmental authority, an act of a public enemy, a labor dispute or strike or a boycott which could not be reasonably contemplated by the City or Customer affected thereby, a defect in manufactured equipment (including, but not limited to, the Dark Fibers), fire, floods, earthquakes, or any other similar cause.
Gas, Gas Service Gas refers to the Utility Service provided to residents and business owners in the City of Palo Alto. Gas Service consists of procurement, transmission, and distribution of any combustible gas or vapor, or combustible mixture of gaseous constituents used to produce heat by burning for retail use. It includes,
but is not limited to, natural gas, gas manufactured from coal or oil, gas obtained from biomass or from
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DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No 12
landfill, or a mixture of any or all of the above. Gas Service is provided by the City of Palo Alto Utilities Department.
Generating Facility All Generators, electrical wires, equipment, and other facilities owned or provided by the Producer for the purpose of producing Electric power, including energy storage facilities and solar or wind turbine-powered Renewable Electrical Generation
Generator A device converting mechanical, chemical or solar energy into electrical energy, including any required protection and control functions, features and structural appurtenances. One or more Generators may comprise a Generating Facility
Gross Nameplate Rating; Gross Nameplate Capacity The total gross generating capacity of a Generator or Generating Facility as designated by the manufacturer(s) of the Generator(s).
Heating Degree Days (HDD)
The number of the degrees per day that the daily average temperature is below 65 degrees Fahrenheit. The daily average temperature is the mean of the maximum and minimum temperatures for a 24-hour period. Initial Interconnection Capacity
The maximum rated generating capacity of a Renewable Electrical Generation Facility eligible for Net
Energy Metering prior to the Total Rated Generating Capacity exceeding the NEM Cap. Initial Review The review by CPAU, following receipt of an Application for Interconnection, to determine the following:
(a) whether the Generating Facility qualifies for Simplified Interconnection; or (b) if the Generating
Facility can be made to qualify for Interconnection with a Supplemental Review determining any additional requirements. Inspector
The authorized inspector, agent, or representative of CPAU. Interconnection; Interconnected The physical connection of a Generating Facility in accordance with the requirements of the City’s Utilities Rules and Regulations allowing Parallel Operation with CPAU’s Distribution System to occur.
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DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No 13
Interconnection Agreement An agreement between CPAU and the Producer providing for the Interconnection of a Generating Facility
that gives certain rights and obligations to effect or end Interconnection. For the purposes of the City’s
Utilities Rules and Regulations, the Net Energy Metering and Interconnection Agreements , and the Power Purchase Agreements authorized by the City Council may be considered Interconnection Agreements. Interconnection Facilities
The electrical wires, switches and related equipment that are required in addition to the facilities required
to provide Electric Distribution Service to a Customer to allow Interconnection. Interconnection Facilities may be located on either side of the Point of Common Coupling as appropriate to their purpose and design. Interconnection Facilities may be integral to a Generating Facility or provided separately.
Interconnection Facilities Study
A study conducted by CPAU for an Interconnection Customer under the Detailed Study process to determine a list of facilities (including CPAU’s Interconnection Facilities, Distribution Upgrades, and Reliability Network Upgrades as identified in the Interconnection System Impact Study), the cost of those facilities, and the time required to interconnect the Generating Facility with CPAU’s Distribution or
Transmission System.
Interconnection Request An Applicant’s request for the Interconnect of a new Generating Facility, or to increase the capacity of, or make a material modification to the operating characteristics of, an existing Generating Facility that is
Interconnected with CPAU’s Distribution or Transmission System.
Interconnection Study A study to establish the requirements for Interconnection of a Generating Facility with CPAU’s Distribution System.
Interconnection System Impact Study An engineering study conducted by CPAU for an Interconnection Customer under the Independent Study Process that evaluates the impact of the proposed interconnection on the safety and reliability of CPAU’s Distribution and/or Transmission system and, if applicable, an Affected System.
Internet Exchange Any Internet data center for telecommunications equipment and computer equipment for the purposes of enabling traffic exchange and providing commercial-grade data center services.
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DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No 14
Island; Islanding A condition on CPAU’s Electric Distribution System in which one or more Generating Facilities deliver
power to Customers using a portion of CPAU’s Distribution System that is electrically isolated from the
remainder of CPAU’s Distribution System. Junction, Junction Site A location on the Dark Fiber Infrastructure where equipment is installed for the purpose of connecting
communication cables. The Junction Site refers to the area within the Transmission Pathway at which a
Junction is located. Kilovar (kVar) A unit of reactive power equal to 1,000 reactive volt-amperes.
Kilovar-hours (kVarh)
The amount of reactive flow in one hour, at a constant rate of Kilovar. Kilowatt (kW) A unit of power equal to 1,000 watts.
Kilowatt-hour (kWh) The amount of energy delivered in one hour, when delivery is at a constant rate of one Kilowatt; a standard unit of billing for electrical energy.
Leased Service Properties
Any equipment or utility infrastructure which is not owned by CPAU, but leased from another provider in order to deliver service. Law
Any administrative or judicial act, decision, bill, Certificate, Charter, Code, constitution, opinion, order,
ordinance, policy, procedure, Rate, Regulation, resolution, Rule, Schedule, specification, statute, tariff, or other requirement of any district, local, municipal, county, joint powers, state, or federal Agency, or any other Agency having joint or several jurisdiction over the City of Palo Alto or City of Palo Alto Utilities or Public Works Customers, including, without limitation, any regulation or order of an official or quasi-
official entity or body. Licensed Fiber(s) One or more fibers comprising a part of the Dark Fiber Infrastructure that is dedicated to the exclusive use of the Customer under the Provisions of the Dark Fiber License Agreement, a Proposal to the Dark Fiber
Services Agreement, and the Utilities Rules and Regulations.
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DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No 15
Licensed Fibers Route A defined path of Licensed Fibers that is identified by specific end points.
Load(s) The Electric power Demand (kW) of the Customer at its Service Address within a measured period of time, normally 15 minutes, or the quantity of Gas required by a Customer at its Service Address, measured in MMBtu per Day.
Low Carbon Fuel Standard (LCFS) A program developed and administered by the California Air Resources Board to lower the carbon intensity of transportation fuel under the Global Warming Solutions Act of 2006 (AB 32). Through the LCFS program, the City, through its Electric Utility, receives credits for providing electricity to charge
electric vehicles. These credits are sold and the funds are utilized to benefit current or future electric
vehicle customers, educate the public on the benefits of electric vehicle transportation, and accelerate the adoption of electric vehicles. Lower Sewer Lateral
See City Lateral.
Master-metering Where CPAU installs one Service and Meter to supply more than one residence, apartment dwelling unit, mobile home space, store, or office.
Maximum Generation For a Customer with a non-utility generator located on the Customer’s side of the Point of Common Coupling, the Maximum Generation for that non-utility generator during any billing period is the maximum average generation in kilowatts taken during any 15-minute interval in that billing period,
provided that in case the generator output is intermittent or subject to violent fluctuations, the City may
use a 5-minute interval. Meter The instrument owned and maintained by CPAU that is used for measuring the quantity of the Electric,
Gas or Water Service delivered to the Customer. Metering The measurement of electrical power flow in kW and/or energy in kWh, and, if necessary, reactive power in kVar at a point, and its display to CPAU.
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DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No 16
Metering Equipment All equipment, hardware, software including Meter cabinets, conduit, etc., that are necessary for Metering.
Meter Read The recording of Customer usage data from Metering Equipment. Minimum Charge
The least amount to be billed to a Customer for rendering Service, in accordance with the applicable Rate
Schedule. Momentary Parallel Operation The Interconnection of a Generating Facility to the Distribution System for one second (60 cycles) or less.
Nationally Recognized Testing Laboratory (NRTL) A laboratory accredited to perform the Certification Testing requirements under Utilities Rule and Regulation 27.
Natural Gas Distribution
The process of delivering natural gas to customers on a utility’s distribution system. Transmission lines carry natural gas at high pressures to receiving stations in Palo Alto, which reduce the pressure and distribute the natural gas over the City’s Gas Distribution System.
Net Electricity Consumer
A Customer-Generator or Producer whose Generating Facility produces less electricity than is supplied by CPAU during a particular period; may also be referred to as a Net Electricity Importer. Net Electricity Exporter
A Customer-Generator whose Generating Facility produces more electricity than is supplied by CPAU
during a particular period; may also be referred to as a Net Surplus Customer-Generator. Net Energy Metering (NEM) A means of measuring Customer-generated renewable electricity exported to the CPAU grid.
Net Energy Metering 1 (NEM 1)
CPAU’s original Net Energy Metering (NEM) Program and Net Energy Metering Aggregation (NEMA) Program, either individually or collectively, which were developed in accordance with Senate Bill 656 (1995).
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DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No 17
Net Energy Metering Cap (NEM Cap) The MW value reached when the Total Rated Generating Capacity used by eligible NEM 1 Customer-
Generators exceeded 5 percent of CPAU’s aggregate Customer peak Demand, at which point NEM 1
became closed to new Customer-Generators. CPAU reached its NEM Cap on December 31, 2017. Net Energy Metering 2 (NEM 2); Net Energy Metering Successor Program CPAU’s NEM Program offering compensation for Customer-Generators whose Generating Facilities are
Interconnected after the NEM Cap was reached, including Customers-Generators who are eligible for
NEM 1 but elect to take Service under the Net Energy Metering Successor Program. NEM 2 Customers take Service under Utilities Rate Schedule E-EEC-1 (Export Electricity Compensation), in conjunction with their otherwise applicable Rate Schedule.
Net Energy Metering Aggregation
The process by which an eligible Customer-Generator with multiple Meters participating in CPAU’s NEM 1 Program may elect to combine the electrical Load of the Meters located on the property where the Renewable Electrical Generation Facility is located and on property adjacent or contiguous, if those properties are solely owned, leased, or rented by the eligible Customer-Generator.
Net Generation Metering Metering of the net electrical power of energy output in kW or energy in kWh, from a given Generating Facility. This may also be the measurement of the difference between the total electrical energy produced by a Generator and the electrical energy consumed by the auxiliary equipment necessary to operate the
Generator.
Net Nameplate Rating The Gross Nameplate Rating minus the consumption of electrical power of a Generator or Generating Facility as designated by the manufacturer(s) of the Generator(s).
Net Surplus Customer-Generator See Net Electricity Exporter. Net Surplus Electricity Compensation
A per kilowatt-hour rate offered to NEM 1 Net Surplus Customer-Generators (excluding NEM
Aggregation Customers) for net surplus electricity, as such definition may otherwise be modified or supplemented by any definition in California Public Utilities Code section 2827(b)(8), as the same may be amended from time to time.
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DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No 18
Non-Islanding A method designed to detect and disconnect from an Unintended Island with matched Load and
generation. Reliance solely on under/over voltage and frequency trip is not considered sufficient to qualify
as Non-Islanding. Occupied Domestic Dwelling Any house, cottage, flat, or apartment unit having a kitchen, bath, and sleeping facilities, which is occupied
by a Person or Persons.
Parallel Operation The simultaneous operation of a Generator with power delivered or received by CPAU while Interconnected. For the purpose of Utilities Rules and Regulations, Parallel Operation includes only those
Generating Facilities that are Interconnected with CPAU’s Distribution System for more than 60 cycles
(one second). Performance Test, Performance Tested After the completion of any Fiber Interconnection work, the City will conduct a Performance Test of each
Fiber constituting a part of the proposed leased fibers to determine its compliance with the Performance
Specifications. Performance Specifications These specifications will include, but not be limited to, criteria relating to end-to-end optical time domain
reflectometer data plots that identify the light optical transmission losses in each direction along the
licensed Fibers whenever the testing is possible, measured in decibels at a wavelength of 1310 or 1550 nanometers for single-mode Fiber, as a function of distance, measured in kilometers. Person
Any individual, for profit corporation, nonprofit corporation, limited liability company, partnership,
limited liability partnership, joint venture, business, family or testamentary trust, sole proprietorship, or other form of business association. PG&E Citygate
The PG&E Citygate is the point at which PG&E’s backbone natural Gas transmission system connects to
the CPAU local natural Gas Distribution System. Point of Common Coupling (PCC) The transfer point for electricity between the electrical conductors of CPAU and the electrical conductors of the Producer.
Point of Common Coupling Metering
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DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No 19
Metering located at the Point of Common Coupling. This is the same Metering as Net Generation Metering for Generating Facilities with no host Load.
Point of Delivery (POD) Unless otherwise specified, the following definitions apply: For Electric, that location where the Service lateral conductors connect to the Customer’s Service entrance equipment; for overhead Services, the POD is at the weather-head connection; for underground Services, the POD is located at the terminals ahead of
or at the Meter; for multiple Meter arrangements with connections in a gutter, the POD is at the Meter
terminals (supply-side); for multiple Meter arrangements in a switchboard, the POD is typically at the connectors in the utility entrance section; for Natural Gas, the POD is the point(s) on the Distribution System where the City delivers natural Gas that it has transported to the Customer.
Point of Interconnection
The electrical transfer point between a Generating Facility and the Distribution System. This may or may not be coincident with the Point of Common Coupling. Point of Service (POS)
Where CPAU connects the Customer’s Electric Service lateral to its Distribution System. For Fiber Optics
Service, this is where CPAU connects the Customer’s Fiber Service to the backbone. This point is usually a box located in or near the street or sidewalk and can be in the Public Right-of-Way. This point is at a mutually agreed upon location established at the time of installation.
Pole Line
Overhead wires and overhead structures, including poles, towers, support wires, conductors, guys, studs, platforms, cross arms braces, transformers, insulators, cutouts, switches, communication circuits, appliances attachments, and appurtenances, located above ground and used or useful in supplying Electric, communication, or similar or associated Service.
Power Factor The percent of total power delivery (kVA) which does useful work. For billing purposes, average Power Factor is calculated from a trigonometric function of the ratio of reactive kilovolt-ampere-hours to the kilowatt-hours consumed during the billing month. Power Factor is a ratio that reflects the reactive power
used by a Customer. CPAU maintains an overall system Power Factor above 95% to reduce distribution
system losses caused by low Power Factor. Power Factor Adjustment An adjustment to Customer’s bill that CPAU may make when necessary due to Customer maintaining low
Power Factor. . CPAU may make a Power Factor Adjustment to a Customer’s bill to account for those
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DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No 20
costs to install additional equipment to correct for Customers that maintain a low Power Factor and the additional energy costs and losses incurred by CPAU due to the Customer’s low Power Factor.
Premise(s) All structures, apparatus, or portion thereof occupied or operated by an individual(s), a family, or a business enterprise, and situated on an integral parcel of land undivided by a public street, highway, or railway.
Primary Service The Electric Distribution Service CPAU provides to a Customer’s Premises at a voltage level equal to or greater than 1000 volts.
Private Lateral
A Private Lateral (also known as the Upper Sewer Lateral) is the portion of the Sewer Lateral that is owned and maintained by the Customer. A Private Lateral typically is the upper portion of a Sewer Lateral upstream from the City Sewer Cleanout. A Private Lateral may include the entire Sewer Lateral if a City Sewer Cleanout is not present or if the Sewer Main is in a Public Utility Easement.
Producer The entity that executes an Interconnection Agreement with CPAU. The Producer may or may not own or operate the Generating Facility, but is responsible for the rights and obligations related to the Interconnection Agreement.
Proposal for Dark Fiber Services A project-specific Service agreement that acts as a supplemental document for the Dark Fiber License Agreement. This Service agreement shall include the proposed Interconnection fees, applicable Fiber licensing fees, term of the Service, and summary of licensed Fiber elements.
Protective Function(s) The equipment, hardware and/or software in a Generating Facility (whether discrete or integrated with other Functions) whose purpose is to protect against Unsafe Operating Conditions.
Provision
Any agreement, circumstance, clause, condition, covenant, fact, objective, qualification, restriction, recital, reservation, representation, term, warranty, or other stipulation in a contract or in Law that defines or otherwise controls, establishes, or limits the performance required or permitted by any party.
Prudent Utility Practices
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DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No 21
The methods, protocols, and procedures that are currently used or employed by utilities to design, engineer, select, construct, operate and maintain facilities in a dependable, reliable, safe, efficient and
economic manner.
Public Right-of-Way The areas owned, occupied or used by the City for the purposes of furnishing retail and/or wholesale Electricity, Gas, Water, Wastewater, Storm and Surface Water Drainage, Refuse Service or
communications commodity and/or distribution Service, and the means of public transportation, to the
general public, including but not limited to, the public alleys, avenues, boulevards, courts, curbs, gutters, lanes, places, roads, sidewalks, sidewalk planter areas, streets, and ways. Public Utility Easements; Easement
The areas occupied or used by the City for the purpose of providing Utility Service and all related Services
offered by the City to the general public, the rights of which were acquired by easements appurtenant or in gross, or other interests or estates in real property, or the highest use permitted to be granted by the nature of the City’s interest in and to the affected real property. This term incorporates all public Service Easements for Utility Services that have been recorded by the City with the Recorder of the County of
Santa Clara, California.
Public Works Department See City of Palo Alto Public Works Department.
Rate Schedule
One or more Council-adopted documents setting forth the Charges and conditions for a particular class or type of Utility Service. A Rate Schedule includes wording such as Schedule number, title, class of Service, applicability, territory, rates, conditions, and references to Rules.
Recyclable Materials
Materials designated by the City as suitable for collection and transport to a material recovery facility for processing into a recycled content product, including, but not limited to newspaper, paper, cans, corrugated cardboard, glass and certain types of plastic, and metals.
Refuse Service
Refuse Service includes weekly collection, processing and disposal of Solid Waste, weekly collection and processing of Recyclable Materials, weekly collection and processing of Compostable Materials and construction and demolition waste, street sweeping service, the household hazardous waste program, and the annual Clean Up Day.
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DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No 22
Reliability Network Upgrades The transmission facilities at or beyond the point where CPAU’s Distribution System interconnects to the
CAISO controlled grid that are necessary for the Interconnection of one or more Generating Facility(ies)
safely and reliably to the CAISO-controlled grid, . Renewable Electrical Generation Facility A Generation Facility eligible for NEM 1 under California Public Utilities Code section 2827 et seq. as
the same may be amended from time to time.
Reserved Capacity For a Customer with one or more non-utility generators located on the Customer’s side of the Point of Common Coupling, the Reserved Capacity for each billing period is the lesser of 1) the sum of the
Maximum Generation for that period for all non-utility generation sources; or 2) the maximum average
Customer Demand in kilowatts taken during any 15-minute interval in the billing period, provided that in case the Load is intermittent or subject to violent fluctuations, the City may use a 5-minute interval. Residential Service
Utility Service provided to separately metered single family or multi-family domestic dwelling. Restoration of Service The reactivation of a Utilities Account after: a) payment is received after Disconnection for non-payment, or b) the operating condition of a Customer’s facility is brought into compliance with CPAU requirements.
See Utilities Rule and Regulation 9, “Disconnection, Termination, and Restoration of Service.”
Rules and Regulations See Utilities Rules and Regulations
Scheduling Coordinator
An entity providing the coordination of power schedules and nominations to effect transportation and distribution of Gas, Electric power and energy. Secondary Service
CPAU Electric distribution Service provided to a Customer’s Premises at a voltage level less than 1000
volts. Service(s) Utility Services offered by the City of Palo Alto include Electric, Fiber Optics, Gas, Water, Wastewater
Collection services provided by the Utilities Department (CPAU); and Refuse Service, Wastewater
Treatment, and Storm and Surface Water Drainage Services provided by the Public Works Department.
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DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No 23
Service Address
The official physical address of the building or facility assigned by CPAU’s Planning Department, at
which Customer receives Utility Services. Service Charge A fixed monthly Charge applicable on certain Rate Schedules that does not vary with consumption. The
Charge is intended to recover a portion of certain fixed costs. Service Drop The overhead Electric Service conductors from the last pole or other aerial support to and including the splices, if any, connecting to the service entrance conductors at the building or other structure. Or, in the
case of Fiber Optic Drops, the overhead Fiber Optics cable from the last pole or other aerial support to the
building or other structure to and including the termination box. Services or Service Lines The Facilities of CPAU, excluding transformers and Meters, between CPAU’s infrastructure and the Point
of Delivery to the Customer.
Service Territory The geographic area within the boundaries establishing the city limits of Palo Alto and served by CPAU’s physical Distribution System.
Sewer Lateral The Sewer Lateral is a pipe that takes an individual building’s Wastewater to the Wastewater Main in the Public Right-of-Way or in a Public Utility Easement.
Short Circuit (Current) Contribution Ratio (SCCR)
The ratio of the Generating Facility’s short circuit contribution to the short circuit contribution provided through CPAU’s Distribution System for a three-phase fault at the high voltage side of the distribution transformer connecting the Generating Facility to CPAU’s Distribution System.
Simplified Interconnection
An Interconnection conforming to the minimum requirements as determined under Utilities Rule and Regulation 27. Single Line Diagram; Single Line Drawing
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DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No 24
A schematic drawing, showing the major Electric switchgear, Protective Function devices, wires, Generators, transformers and other devices, providing sufficient detail to communicate to a qualified
engineer the essential design and safety of the system being considered.
Smart Inverter A Generating Facility’s inverter that performs functions that, when activated, can autonomously contribute to grid support during excursions from normal operating voltage and frequency system
conditions by providing: dynamic reactive/real power support, voltage and frequency ride-through, ramp
rate controls, communication systems with ability to accept external commands and other functions. Solid Waste Solid Waste means solid and semisolid wastes, generated in or upon, related to the occupancy of,
remaining in or emanating from residential premises or commercial premises, including garbage, trash,
rubbish, ashes, industrial wastes, manure, animal carcasses, solid or semisolid wastes, and other solid and semisolid wastes. Solid Waste shall not include liquid wastes or sewage, abandoned vehicles, hazardous waste, recyclable materials or compostable materials.
Special Facilities
Special Facilities are facilities requested by an Applicant in addition to or in substitution for standard facilities which CPAU would normally provide. Splice
A point where two separate sections of Fiber are physically connected.
Standby Service The back-up Energy Services provided by CPAU.
State Energy Surcharge
The California State Board of Equalization administers the Energy Resources Surcharge Law, as authorized under the Revenue and Taxation Code (section 40016). The surcharge is imposed upon the consumption in California of electrical energy purchased from an electric utility on and after January 1, 1975. Every electric utility in California making energy sales to consumers must collect and remit to the
state the amount of surcharge applicable to its consumers. Information on the surcharge and current
surcharge rate can be found at the California Board of Equalization’s web site. Storm and Surface Water Drainage A Utility Service provided to residents and business owners in the City of Palo Alto. Storm and Surface
Water Drainage Service is provided by the City of Palo Alto Public Works Department.
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DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No 25
Submetering Utility submetering is the implementation of a system that allows a landlord, property management firm,
condominium association, homeowners association, or other multi-tenant property to bill Master-Metered
tenants for Utility usage. See Utilities Rule and Regulation 11, “Billing, Adjustment, and Payment of Bills.” Supplemental Review
A process wherein CPAU further reviews an Application that fails one or more of the Initial Review
Process screens. The Supplemental Review may result in one of the following: (a) approval of Interconnection; (b) approval of Interconnection with additional requirements; or (c) cost and schedule for an Interconnection Study.
System Integrity
The condition under which a Distribution System is deemed safe and can reliably perform its intended functions in accordance with the safety and reliability rules of CPAU. Tax
Any assessment, Charge, imposition, license, or levy (including any Utility Users Tax) and imposed on
Charges by any Agency, including the City. Telemetering The electrical or electronic transmittal of Metering data in real-time to CPAU.
Temporary Service When Service is requested for limited period of time or of indeterminate duration, such as, but not limited to, Service to provide power for construction, seasonal sales lots (Christmas trees), carnivals, rock crushers or paving plants. Temporary Service does not include Emergency, breakdown, or Standby Service.
Termination of Service When one or more Utilities services are interrupted until a Customer’s operating condition is brought into compliance with CPAU regulations and requirements. This is assumed to be a temporary situation unless service is permanently terminated and the Account is closed. See Utilities Rule and Regulation 9,
“Disconnection, Termination, and Restoration of Service.” Therm A Therm is a unit of heat energy equal to 100,000 British Thermal Units (Btu). It is approximately the energy equivalent of burning 100 cubic feet (often referred to as 1 ccf) of natural Gas. Since Meters
measure volume and not energy content, a Therm factor is used to convert the volume of Gas used to its
heat equivalent, and thus calculate the actual energy use. The Therm factor is usually in the units
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DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No 26
therms/ccf. It will vary with the mix of hydrocarbons in the natural Gas. Natural Gas with a higher than average concentration of ethane, propane or butane will have a higher Therm factor. Impurities, such as
carbon dioxide or nitrogen lower the Therm factor. Total Rated Generating Capacity Total Rated Generating Capacity will be calculated as the sum of the rated generating capacity of all installed Renewable Electrical Generation Facilities participating in NEM 1 or NEM 2. The rated
generating capacity for each individual Renewable Electrical Generation Facility participating in NEM 1
or NEM 2 will be calculated as follows: 1. For Solar: For each Renewable Electrical Generation Facility that is a solar photovoltaic generating facility, CPAU will use the CEC’s Alternating Current (AC) rating; or where the
CEC AC rating is not available, CPAU will multiply the inverter AC nameplate rating by 0.86;
and 2. For Non-Solar: For all other Renewable Electrical Generation Facilities, CPAU will use the AC nameplate rating of the generating facility.
Transfer Trip A Protective Function that trips a Generating Facility remotely by means of an automated communications link controlled by CPAU.
Transmission Pathway
Those areas of the Public Right-of-Way, the Public Utility Easements and the Leased Service Properties in which the Dark Fiber Infrastructure is located. Transmission System
Transmission facilities owned by CPAU that have been placed under the CAISO’s operation control and
are part of the CAISO-controlled grid. Trap Any approved equipment or appliance for sealing an outlet from a house-connection sewer to prevent the
escape of sewer Gas from a main line through a building connection (service) sewer.
Underground Utility District An area in the City within which poles, overhead electric or telecommunication wires, and associated overhead structures are prohibited or as otherwise defined in Section 12.04.050 of the PAMC.
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DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No 27
Unintended Island The creation of an Island, usually following a loss of a portion of CPAU’s Distribution System, without
the approval of CPAU.
Unsafe Operating Conditions Conditions that, if left uncorrected, could result in harm to personnel, damage to equipment, loss of System Integrity, or operation outside pre-established parameters required by the Interconnection Agreement.
Upper Sewer Lateral See Private Lateral. Utilities Department
See City of Palo Alto Utilities Department. Utilities Director The individual designated as the Director of Utilities Department under Section 2.08.200 of the Palo Alto Municipal Code, and any Person who is designated the representative of the director of utilities.
Utility(ies) Rules and Regulations, Rules and Regulations The compendium of Utilities Rules and Regulations prepared by the City’s Utilities and Public Works Departments and adopted by ordinance or resolution of the Council pursuant to Chapter 12.20 of the Palo Alto Municipal Code, as amended from time to time.
Utility(ies) Service(s), Service(s) Electric, Fiber optics, Water, Gas, Wastewater collection services provided by the City of Palo Alto Utilities Department (CPAU), and Refuse Service, Wastewater Treatment and Storm and Surface Water Drainage services provided by the CityPublic Works Department.
Utility Service Application (Application) A general CPAU Application form documenting an Applicant’s request for Electric, Water, Gas and Wastewater Service. The Application documents the Applicant’s contact information, billing information and basic electric, water, gas and wastewater loading data necessary to approve, design and install
sufficient facilities based on Load and usage information provided by the Applicant. Utility Users Tax (UUT) A City of Palo Alto Tax imposed on Utility Charges to a Water, Gas, and/or Electric Service Customer. This Such Charges subject to Tax may include Charges made for Electricity, Gas, and Water and Charges
for Service including Customer Charges, Service Charges, Standby Charges, Charges for Temporary
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DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No 28
Services, Demand Charges, and annual and monthly Charges, as described in Chapter 2.35 of the Palo Alto Municipal Code.
Wastewater Utility Service provided to residents and business owners in the City of Palo Alto. Wastewater Utility Services include collection and treatment of wastewater. Wastewater Collection Service is provided by the City of Palo Alto Utilities Department, and Wastewater Treatment Service is provided by the City of
Palo Alto Public Works Department. Wastewater Main The collector pipes for numerous Sewer Laterals from an area or neighborhood. Wastewater Mains convey the wastewater to larger trunk sewer lines or to a water quality treatment plant.
Water A Utility Service provided to residents and business owners in the City of Palo Alto for retail use. Water Service is provided by the City of Palo Alto Utilities Department.
Water Distribution
The process of delivering potable water to customers on a utility’s distribution system. Transmission lines carry potable water from the San Francisco Public Utility Commission’s Hetch Hetchy System to receiving stations in Palo Alto, which then distribute the water over distribution lines that extend throughout the Service Territory. In cases of reduced water supply from Hetch Hetchy, local wells in Palo
Alto can also withdraw potable water from local aquifers and inject it into the Water Distribution System. Water Column (WC) A pressure unit based on the difference in inches between the heights of water columns as measured in a manometer. 6” WC = 0.217 psi; 7” WC = 0.25 psi.
(END)
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ACCESS TO PREMISES
RULE AND REGULATION 8
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 10-21-2019TBD
Sheet No. 1
A. RIGHT OF ACCESS 1. Customers must provide CPAU with immediate and unhindered access to and from
Customer Premises for any purpose connected with providing Utility Service,
including, but not limited to, inspection, Meter reading, testing, maintenance, removal, and replacement of facilities and equipment. This access includes keeping Customer ensuring all facilities located on Customer Premises that are associated with CPAU’s provision of Utility Service are clear of vegetation, debris, shields, construction or any
other obstruction. Such access is a condition of taking Service from CPAU, and applies
to all facilities and equipment associated with CPAU’s provision of Utility Service that are located on Customer Premises, including facilities within locked or enclosed areas. If the Customer is not the owner of the Premises, the Customer must obtain all required permissions for CPAU access from the Premises owner. 2.1.
1. The Customer is responsible for keeping the Meter, vault or box, and any gas valve or anode test boxes, if those are located on Customer Premises, clear of vegetation, debris, shields, construction or any other obstruction, so that the facilities are accessible for reading and maintenance
3.2.When access to Customer’s Premises is not immediate and unhindered, CPAU may take any enforcement actions permitted by Law, including, but not limited to, requiring Customer to provide a new and approved location for facilities or equipment at the Customer’s expense, or discontinuing or terminating Service.
B. SPECIAL ACCESS REQUIREMENTS FOR METERS 1. The requirements of this Section B apply in addition to those outlined in Rule and Regulation 15 (Metering Equipment).
1.2.Meters must be installed on the exterior of the building at ground level, unless otherwise authorized in writing by the Utilities Director or his/her designee. 2.3.If CPAU is unable to read the Customer’s Water, Electric, and/or Gas Meter due to physical
or security conditions imposed by the Customer or created on the Premises, CPAU may, at its option, estimate the Customer’s Meter Read for up to three months. 3.4.If Meter access has not been possible for the three consecutive months CPAU will notify the Customer by registered mail. If the Customer does not acknowledge receipt of the
registered mail within two weeks of receipt of such notice, indicating how and when Meter
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ACCESS TO PREMISES
RULE AND REGULATION 8
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 10-21-2019TBD
Sheet No. 2
access will be provided, CPAU will initiate discontinuance or termination of Service. Such acknowledgment by the Customer must be made in writing or by calling the CPAU telephone number provided to the Customer in the registered notice.
4.5.If CPAU, its agents, and employees are denied access to its Meter(s) for greater than three consecutive months within a twelve-month period, CPAU may require the Customer to move the Meter(s) to a location on the Premises that shall be accessible to CPAU personnel for purposes of furnishing or maintaining Utility Service. The cost to relocate the Meter(s)
shall be borne by the Customer.
5.6.Failure to relocate such Meters within 90 days of receipt of notice from CPAU of the requirement to relocate the Meter(s) will result in termination of Service. Service terminated under this provision will not be restored until the Meter relocation has been completed and has successfully passed such inspections as may be required by both CPAU
and City’s Planning and Community Environment Department.
(END)
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DISCONNECTION, TERMINATION AND RESTORATION OF SERVICE
RULE AND REGULATION 9
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 10-21-2019 TBD
Sheet No 1
A. CUSTOMER-INITIATED TERMINATION OF UTILITY SERVICE
1. A Customer requesting termination of Utility Service(s) must notify the CPAU Customer
Service Office at least three business days before the Service termination effective date.
Upon receipt of such notice, CPAU has no obligation to render Service after the effective
date of such change, and CPAU will discontinue the Customer’s responsibility for bills
for Service supplied to the Premises after that date.
2. A Customer vacating a Premise to move to another Premise served by CPAU, but
wishing Service to continue beyond the date vacated, must provide an effective date of
termination to the CPAU Office or Call Center at the time of the request for
establishment of Service for the new Premise. The Customer is financially responsible for
all Service supplied prior to the Service end date, and Customer must provide a
forwarding address for final billing purposes.
B. CPAU-INITIATED TERMINATION OR DISCONNECTION OF SERVICE CPAU may terminate or disconnect Utility Service when an existing Customer, through action or
inaction, has not complied with Utility Service requirements as stated in these Rules and
Regulations, or other applicable laws. CPAU will terminate or disconnect Utility Service as a last
resort. Actions that warrant termination or disconnection of Service include, but are not limited
to, the following:
1. Use of Utility Services without having first complied with the requirements for Service.
Customers will be responsible for all associated Charges from the date of initial Service
as determined by CPAU, up to the maximum period allowed by law.
2. Vacating Premises without notification to CPAU.
3. Tampering, damaging, interfering with or destroying CPAU equipment, facilities or
property. Customers will be liable for all damage to CPAU arising from negligence, lack
of proper care, or wrongful act of the Customer or Customer’s tenants, agents, employees
or contractors.
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DISCONNECTION, TERMINATION AND RESTORATION OF SERVICE
RULE AND REGULATION 9
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 10-21-2019 TBD
Sheet No 2
4. Nonpayment of bills or any proper Charges from special fees, licensing agreements, loans
or returned check(s) due to insufficient funds in Customer’s bank account; failure to
establish credit, failure to provide adequate credit information, or failure to provide
required deposits.
C. PROCEDURES FOR CPAU-INITIATED DISCONNECTION OF SERVICE
1. Prior to disconnection for non-payment, CPAU will provide two written notices to the
Customer, and/or the third party the Customer has designated to receive such notices, as
applicable:
a. 10-Day Late Notice: The first “Late Notice” is issued 5 days after the bill due date
and informs Customer that a late fee has been charged, and Customer must pay
the overdue amount by the date specified to avoid disconnection of Service.
b. 48-Hour Disconnect Notice: If payment is not received by the date specified in
the 10-day notice, a Disconnect Notice will be delivered to the Customer’s
Premises, notifying the Customer that payment must be received within 48 hours
or Utilities Services will be disconnected for non-payment. If payment is not
received within the 48-hour period, Utilities Services may be disconnected
without further notice.
The 48-hour Disconnect Notice will include:
(1) The name and address of the Customer whose Account is delinquent.
(2) The amount of the delinquency and late fee.
(3) The date by which payment or arrangements for payment is required to avoid
disconnection of Service.
(4) The procedure by which the Customer may initiate a complaint or request an
investigation concerning Service or Charges; except that, if the bill for Service
contains a description of that procedure, the notice is not required to contain
that information.
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DISCONNECTION, TERMINATION AND RESTORATION OF SERVICE
RULE AND REGULATION 9
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 10-21-2019 TBD
Sheet No 3
(5) The procedure by which the Customer may request amortization of the unpaid
Charges.
(6) The procedure for the Customer to obtain information on the availability of
financial assistance, including private, local, state, or federal sources, if
applicable.
(7) The telephone number of a representative of CPAU who can provide
additional information or institute arrangements for payment.
2. Customers may contact CPAU Customer Service Center to discuss options for averting
disconnection of Service for non-payment: IN PERSON City of Palo Alto Utilities
Customer Service Center, Ground Floor
250 Hamilton Avenue Palo Alto, CA 94301 PHONE: 650-329-2161
BY MAIL
City of Palo Alto Utilities Customer Service Center PO Box 10250 Palo Alto, CA 94303
BY E-MAIL UtilitiesCustomerService@cityofpaloalto.org
3. Deferred or Reduced Payments Policy: Customers may contact CPAU Customer Service
Center to request deferred or reduced payments based on Customer’s demonstrated
financial need. CPAU will notify the Customer in writing of the terms of deferred or
reduced payment.
4. Alternative Payment Schedule Policy: Customers may contact CPAU Customer Service
Center to request an alternative payment schedule based on Customer’s demonstrated
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DISCONNECTION, TERMINATION AND RESTORATION OF SERVICE
RULE AND REGULATION 9
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 10-21-2019 TBD
Sheet No 4
financial need. An example of a possible alternative payment schedule is the Budget
Billing Payment Plan (BBPP) found in Rule and Regulation 11, “Billing, Adjustment and
Payment of Bills.” CPAU will notify the Customer in writing of the terms of the
alternative payment schedule.
5. To avoid disconnection of Utility Service, a Customer’s outstanding Account balance
may be transferred to another Account in the same class of Service in that Customer’s
name at another location served by CPAU.
6. To avoid disconnection of Utility Service, CPAU may extend payment arrangements for
the unpaid Account balance to accommodate a Customer’s financial situation. If the
Customer fails to meet the terms of the payment arrangement, the outstanding balance
will become immediately due and payable, and the Account Service(s) will be subject to
disconnection after expiration of a 48-hour Disconnect Notice.
7. Customers whose Utility Service has been disconnected for non-payment will have their
Accounts referred to a collection agency when past-due balances exceed 180 calendar
days.
8. Residential metered Utility Services will not be disconnected for non-payment of a bill
on any Friday, Saturday, Sunday, legal holiday or at any time during which the Utilities
Customer Service Office or Call Center is closed. Online payments may take up to 24
hours to be received by CPAU.
9. Utility Service will not be disconnected for non-payment of an incorrect bill until the
corrected bill becomes past due.
10. CPAU’s Disputed Bills Policy can be found in Rule and Regulation 11, “Billing,
Adjustment, and Payment of Bills.”
11. Utility Service will not be disconnected for non-payment of a disputed bill during
investigation or review by CPAU. The non-disputed portion of the Utility bill will remain
due and payable. CPAU findings and resolution of a disputed bill will be communicated
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DISCONNECTION, TERMINATION AND RESTORATION OF SERVICE
RULE AND REGULATION 9
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 10-21-2019 TBD
Sheet No 5
to the Customer within thirty calendar days of the Customer’s notification to CPAU of
the bill dispute.
12. Customers in need of assistance with bill payment for their Utility Service, due to a
reduction in household income resulting from a member of the household being called to
active duty status in the military, may apply for shut-off and payment protections for a
period of 180 days, pursuant to the California Military and Veterans Code, Section 827,
as amended. CPAU, at its option, may extend these protections for an additional 180
days.
D. PRIOR NOTICE EXCUSED IN CERTAIN SITUATIONS
CPAU may immediately terminate Utility Services, without notice, for an unauthorized action of
a Customer, including, but not limited to:
1. Theft of Utility Service.
2. Willful waste of Water.
3. Unsafe wiring or equipment on Customer Premises or wiring or equipment that fails to
meet CPAU standards or applicable law. CPAU reserves the right to inspect if CPAU
staff reasonably believes that unsafe conditions exist. If the Customer discovers any
defect in their Utility Service, the Customer must notify CPAU immediately.
4. Use of Customer equipment that imposes an electrical Load adversely affecting CPAU’s
Distribution System operation, Service capacity, or Service to its other Customers. Any
Customer that operates Electric equipment including, but not limited to, pumps, welders,
furnaces, compressors or other equipment where the use of Electricity is intermittent, and
causes significant voltage fluctuations or electromagnetic interference to other
Customers, must reasonably limit such impacts or interference upon request by CPAU.
The Customer may be required to permanently mitigate any ongoing disruption to the
Electric Distribution System to an acceptable level established by CPAU, or avoid the use
of such equipment. Failure to comply with such mitigation and/or limitation requests may
result in immediate termination of Utility Service.
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DISCONNECTION, TERMINATION AND RESTORATION OF SERVICE
RULE AND REGULATION 9
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 10-21-2019 TBD
Sheet No 6
5. Placement, construction, or maintenance of any structure, vegetation, debris, or other
object upon the Customer’s Premises that, in CPAU’s judgment, endangers the safe and
reliable operation or maintenance of CPAU overhead or underground Electrical, Fiber
Optic, Water, Gas and Wastewater facilities.
E. REMOTE DISCONNECT/RECONNECT
CPAU will use the remote disconnect reconnect enabled electric meter function for Customer
Electric Meters on Customer Electric Services. The use of remote disconnect reconnect Electric
Meters allows for the disconnection and/or reconnection of an Electrical Service to a Service
address without CPAU staff being physically present where the electric Meter is located.
I. INSTALLATION:
Remote disconnect reconnect enabled Electric Meters may be installed at any location
identified by CPAU using the following guidelines:
• A service address that has a high rate of move-in and move-out events where multiple
Accounts are opened and closed within a 36-month span.
• Any service address that has been physically disconnected for non-payment more
than one time in the previous 12 months.
• A Meter site location is deemed inaccessible or hazardous for CPAU personnel to
access.
II. DISCONNECT:
CPAU reserves the right to remotely disconnect the Electric Meter if an Account has
been closed for move out, if there is an outstanding bill that has no agreed upon
resolution, or if a hazardous condition has been identified. Customer is fully responsible
for any impacts resulting from the disconnection at the Service address.
III. RECONNECTION:
Upon Customer resolving a customer service department-related issue such as
establishing a new Account or making an overdue payment, CPAU will remotely
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DISCONNECTION, TERMINATION AND RESTORATION OF SERVICE
RULE AND REGULATION 9
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 10-21-2019 TBD
Sheet No 7
reconnect the Electric Services by initializing the reconnection switch in the Meter for the
service address within one full business day. CPAU reserves the right to remotely
reconnect the Electric Meter and it is the Customer’s full responsibility to ensure that all
equipment and appliances at the service address pose no potential hazard if and when the
Electric Meter is reconnected and the Electric Service is restored.
E.F. RESTORATION OF SERVICE
1. CPAU will restore Service to a disconnected Account when the financial cause for
disconnection has been rectified and Customer has paid all proper Charges due, including
any additional deposits or reconnection Charges.
2. CPAU will restore Service to a terminated Account when it determines that the physical
cause for termination has been rectified, safe operating conditions have been restored,
and the engineering and operations requirements for Service have been met, including
compliance with CPAU Rules and Regulations.
(END)
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METERINGMETERING EQUIPMENT
RULE AND REGULATION 15
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No. 1
A. OWNERSHIP OF AND RESPONSIBILITY FOR METERING EQUIPMENT CPAU will furnish, own and maintain all Gas Regulators and all Meters for measuring Electric, Water, and Gas usage by the Customer. In addition, CPAU will furnish, own and maintain all
Meter-related equipment including: instrument transformers, phase shifting transformers, test
switches, and connecting circuitry necessary for measuring Electricity used by the Customer. B. METER INSTALLATIONS
1. LOCATION a. All Meters will be installed by CPAU upon the Customer’s Premises, and located to be at all times accessible by CPAU or its authorized representatives for maintenance, inspection, reading, and testing. Meter location must be approved by CPAU; placement of Meters above the ground-floor level is not permitted. b. When required in order to comply with current CPAU Rules and Regulations and Utility Standards, the Customer must, at the Customer’s own expense, relocate the Meter or Meters to a CPAU-approved location. 2. MULTIPLE-OCCUPANCY BUILDINGS In buildings in which separate Meters are required for each unit to measure separately the Electric Service, Gas or Water supplied to individual Customers, Meters for each Service will be located at one central point, per the CPAU standards or as otherwise specified by
CPAU. The building owner must clearly mark each Meter position to indicate the particular location supplied by the Meter. Each Water and Gas houseline must be tagged with a brass identification plate showing the final and legal address served by each Meter. If more than one Gas or Water Meter is required to serve a multiple-occupancy building,
such as a condominium or townhome, a Public Utility Easement will be required for the Water and Gas Service Lines and Meters. 3. SEALING OF METERS
All CPAU Meters will be sealed by CPAU and no such seal may be tampered with or broken except by an authorized representative of CPAU. If a Meter is tampered with, bypassed or otherwise compromised by the Customer, CPAU
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METERINGMETERING EQUIPMENT
RULE AND REGULATION 15
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No. 2
may discontinue and remove the Service in addition to charging for the estimated amount of Utilities used, and pursue all available civil and criminal remedies. If Service is removed, Customer will be responsible for the expense of removal and installation of new Service before the new Service is re-installed and activated.
4. ELECTRIC DEMAND METERS Generally, Demand Meters will not be installed on Loads with an estimated maximum Demand less than six (6) or eight (8) kW or eight (8) horsepower (hp). Demands of such
lesser loads will be determined by a Load check. 5. ADDITIONAL METERING EQUIPMENT CPAU may, at its discretion and at its cost, install additional Metering Equipment for the purpose of system meeting quality control purposesstandards, updating outdated
equipment, or otherwise improving the the functionality of its Utility Services. 6. CAPACITY OF METERS a. CPAU will set Water and Gas Meters to match the Customer’s Demand as stated on
the Customers Utility Application/load sheet. CPAU may install Meters with a capacity greater than needed to supply the stated demand if the Customer pays all applicable fees associated with the larger Meter. It is the Customer’s responsibility to submit an accurate Utility application/load sheet for Meter and Service capacity sizing.
b. CPAU may, at its option, meter delivery to Primary Service Customers at Secondary Service voltage, and apply an adjustment factor to compensate. C. METER TESTS 1. Any Customer may secure a test of the accuracy of the Meter serving the Customer’s Premises. Prior to the test, the Customer will be required to make a deposit with CPAU as specified in CPAU Rate Schedule C-1. The deposit will be returned to the Customer if, under conditions of normal operation, the Electric, Gas, or Water Meter is found by test to
register more than two percent (2%) faster. Otherwise, the deposit will be retained by CPAU to offset a portion of the cost of making such test. Deposits made for Meter accuracy testing will be returned or waived if CPAU determines that the Meter’s current condition requires testing or replacement in advance of the Meter’s scheduled replacement date.
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METERINGMETERING EQUIPMENT
RULE AND REGULATION 15
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No. 3
2. The Customer has the right to require that the test be made in their presence, or a representative’s presence at the Meter shop. A written report giving the result of the test will be supplied to the Customer upon request within ten (10) days of the test.
3. Meters will be tested before their installation, except that in the case of newly purchased single phase Electric Meters, the manufacturer’s test may be used as the installation test when CPAU’s random test indicates satisfactory test conditions for a particular manufacturer and a particular shipment. No Electric, Gas or Water Meter will be placed
in Service or allowed to remain in Service if it is found to have an error in registration in
excess of two percent (2%) under condition of normal operation. D. MASTER METERING Separate Premises, even though owned by the same Customer, will not be supplied Water, Gas,
and/or Electric through the same Meter (i.e. master Meter), except as provided herein. 1. RESIDENTIAL Customers for whom Water, Gas, and Electric Master-metering was installed prior to
December 31, 1982, may continue to obtain Service at a single Point of Delivery through a single Metering installation for two or more single-family dwelling units in the same building or for two or more multi-family dwelling buildings, provided such buildings are adjacent to each other on an integral parcel of land undivided by a public highway, street, or railway. Requests for Master-metered multi-family Residential Service subsequent to
December 31, 1982, will be evaluated and approved if central space conditioning is acceptable to CPAU. Developments with such central systems may continue to qualify for Master-metering. 2. NONRESIDENTIAL CPAU need not serve Premises directly, but will provide Master-metered Gas Service, where any of the following conditions are met: a. The building will contain central heating, air conditioning, or central domestic hot
Water and can be shown (using methods of calculation acceptable to CPAU) to be more energy efficient and at a more favorable cost-benefit ratio than would be the case if individual Metering were installed.
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METERINGMETERING EQUIPMENT
RULE AND REGULATION 15
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective 10-21-2019TBD
Sheet No. 4
b. The building is designed to be subdivided or modified after construction to meet changing space needs of multiple tenants. 3. MULTI-UNIT STRUCTURES CONSTRUCTED AFTER JANUARY 1, 2018
New multiunit residential structures or mixed-use residential and commercial structures constructed after January 1, 2018 must include a submeter for each dwelling unit, so that tenants can be billed accordingly for their Water use. Requests for Master-metered multi-family Residential Service are subject to review and approval by CPAU.
4. SEPARATE METERING IMPRACTICAL Where, in the sole opinion of CPAU, it is impractical for CPAU to meter individually each Premise or unit, CPAU may meter only those Premises or units that it is practical to meter, if any. E. TOTALIZING METERING CPAU may permit totalizing though a single Electric Meter of the Electricity delivered by two or more separate Services if a Customer is served at primary voltage, has an estimated or actual Load
greater than 3,000 kVa, and all Services serve a contiguous site. Any exception to CPAU’s standard Metering requirements must be explicitly addressed by a Rate Schedule or Customer Contract (Rule 5).
(END)
5.e
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UTILITY SERVICE AND FACILITIES ON CUSTOMER PREMISES
RULE AND REGULATION 18
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No. 1
A. GENERAL Rule and Regulation 18 outlines the general requirements governing Utility Services and
Facilities on Customer Premises in the City of Palo Alto. In addition, for information and
Rules specific to each type of Utility Service, please refer to the following Special Utility Regulations: Rule and Regulation 20 – Special Electric Utility Regulations
Rule and Regulation 21 – Special Water Utility Regulations
Rule and Regulation 22 – Special Gas Utility Regulations Rule and Regulation 23 – Special Wastewater Utility Regulations Rule and Regulation 24 – Special Refuse and Recycling Utility Regulations Rule and Regulation 25 – Special Storm and Surface Water Drainage Utility Regulations
Rule and Regulation 26 – Special Fiber Optics Utility Regulation B. SERVICE CONNECTION REQUIREMENTS CPAU will connect Utility Service Lines of suitable capacity to CPAU infrastructure at a
Point of Service designated by CPAU, provided that: 1. The property to be connected or upgraded fronts on a public street, highway, alley, lane, or right-of-way along which CPAU has or will install the appropriate infrastructure; or the property has a contiguous Easement or right-of-way along
which CPAU has or will install Utility infrastructure. 2. CPAU has approved, as applicable, the Customer’s Utility Service Application and plans, Meter locations, Electric switchboard design and location, Water backflow prevention device and Sewer backwater valve type and location, and any other plan
deemed necessary by CPAU to complete the connection and/or upgrade. 3. The Applicant has complied with CPAU and Building Department permit and inspection requirements for the project and completed all installations of required Service equipment and/or facilities in accordance with CPAU-approved plans
submitted by the Applicant, the Special Utility Regulations listed in section A above, and any applicable Utility standards. 4. The Applicant has paid in full all required connection Charges and fees.
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UTILITY SERVICE AND FACILITIES ON CUSTOMER PREMISES
RULE AND REGULATION 18
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No. 2
5. The City’s Building Inspector has approved the installation authorizing Service to be activated and has issued Meter release tags.
C. OWNERSHIP AND RESPONSIBILITY FOR SERVICE LINES, FACILITIES, AND EQUIPMENT 1. General
a. Unless otherwise noted in other City of Palo Alto Utilities Rules and
Regulations or CPAU Standards, all materials, facilities, and equipment installed or used by CPAU, its agents, and employees on Customer Premises will at all times be and remain the sole property of CPAU. Customers must provide CPAU may with immediate and unhindered access to Customer Premises for any purpose connected with providing Utility
Service, including, but not limited to be access, repair, replacement, modification or removale of such Utility facilities, equipment or material, at any time. CPAU will attempt to notify and coordinate material and equipment modifications with Customers when possible and in non-emergency situations.
b. Customers must exercise reasonable care to prevent CPAU equipment on Customer Premises from being damaged or destroyed and must refrain from interfering with same. Customers must immediately notify CPAU upon the discovery of any defect in CPAU equipment. c. No rent or other Charge whatsoever is permitted to be charged by the Customer against CPAU for placing, maintaining or accessing any Meters, equipment, substations or other facilities on the Customer’s Premises that are required to install, maintain, upgrade or otherwise provide Utility
Service. D. INSTALLATION OF SERVICE CONNECTION: 1. Only authorized employees or agents of CPAU are allowed to connect Customers’
Electric, Gas, or Fiber Optic Service to, or disconnect those Services from, CPAU’s infrastructure. 2. If the City allows Customers to connect or disconnect the Customer’s Water or Wastewater Service from the City’s distribution/collection system, then the work
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UTILITY SERVICE AND FACILITIES ON CUSTOMER PREMISES
RULE AND REGULATION 18
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council
Effective 10-21-2019TBD
Sheet No. 3
shall be observed by and the installation must be approved by a CPAU Water, Gas, and Wastewater Utilities Inspector.
E. RELOCATION OR MODIFICATION OF SERVICE CONNECTIONS 1. The Customer is responsible for all costs associated with relocation or modification of Utility facilities or equipment initiated at the Customer’s request, or to provide Utility Service to new load. Under the City’s Low Carbon Fuel Standard Program, a credit
may be available towards costs for Utility equipment modifications required by the
installation of Electric Vehicle Supply Equipment at single family or multi-family residential sites, as described in Rate Schedule E-15. 1.2.CPAU may, at its discretion, relocate or modify Utility Service Lines or Points of Service for the purpose of meeting quality control standards, updating outdated
equipment, or otherwise improving the functionality of Utility Services.
(END)
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SPECIAL ELECTRIC UTILITY REGULATIONS
RULE AND REGULATION 20
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective TBD10-21-2019
Sheet No. 1
GENERAL In addition to the general requirements outlined in Rule and Regulation 18 for Utility Services and
Facilities on Customers’ Premises, the following is required:
B. ELECTRIC SERVICE CONNECTION REQUIREMENTS 1. FACILITIES ON CUSTOMER PREMISES
a. The Customer is responsible for the installation of all equipment from the facility to the designated Point-of-Service. For underground systems, this includes conduit and conductors. For overhead systems, because the Point-of-Service is the weatherhead or point of attachment to the facility, this includes the mast or riser and all conductors therein. b. The Customer is responsible for installing and maintaining all substructures (including, but not limited to, conduits, underground vaults or boxes, and covers) on the Customer’s Premises that are reasonably required for CPAU to provide Electric Service, at the Customer’s expense and in accordance with CPAU
requirements, standards, and specifications. Substructures are owned and maintained by the Customer, for CPAU’s exclusive use. The Customer is responsible for repairing or replacing the substructure for any reason deemed necessary by CPAU, including deterioration to the extent that the existing conductors/cables cannot be removed.
c. The Customer is required to provide all substructure between the Customer’s Service entrance equipment and the nearest available Point of Service connection, as determined by CPAU. This Point of Service is typically a splice box located near the street and may be in the Public Right-of-Way. In the case of rear easements,
this point is typically at a splice box or at the base of a pole riser. d. Upon approval by CPAU of the substructure installed on the Customer’s Premises, CPAU will install Primary Electric Service conductors and a transformer, if needed. The Applicant/Customer is responsible for the full cost of installation in accordance
with the applicable sections of CPAU’s Electric Service Connection Charges (Rate Schedule E-15), and/or any applicable Special Facilities Charges. CPAU will determine the type and size of the conductors required. e. CPAU will assume ownership and responsibility for maintenance of Customer-
installed underground Electric Service lateral conductors, as defined in the National
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SPECIAL ELECTRIC UTILITY REGULATIONS
RULE AND REGULATION 20
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective TBD10-21-2019
Sheet No. 2
Electric Code Article 100, only if the Service meets CPAU specifications and it has been approved and accepted by the CPAU Electrical Engineering Manager or his or her designee. Where bus duct or extra flexible cable is required and used,
CPAU’s maintenance responsibility for conductors ends at the transformer
secondary terminals. The bus duct or extra flexible cable is considered to be the Service entrance conductor for which CPAU assumes no responsibility. f. All Service switches, fuses, Meter sockets, Meter and instrument transformer
housing and similar devices, irrespective of voltage, required in connection with
Service and Meter installation on the Customer’s Premises, will be furnished, installed, owned and maintained by the Customer in accordance with CPAU requirements. g. The Customer must provide a suitable means for CPAU to place its seal on covers
of Service enclosures/troughs and instrument transformer enclosures which protect un-metered live circuits installed by the Customer. Such seals may be broken only by CPAU or its authorized agents. h. CPAU will furnish and install necessary instrument transformers, test facilities and
Metering Equipments. i. Notwithstanding the above subsections (a) through (h), CPAU may, at its discretion , furnish and install additional equipment for the purpose of meeting quality control standards, updating outdated equipment, or otherwise improving the functionality
of its Utility Services. C. SERVICE CONFIGURATIONS 1. OVERHEAD OR UNDERGROUND a. The standard Service to single family Residential homes in existing overhead areas is overhead. The Director of Utilities or his/her designee can require an underground Service for single family Residential Service in areas where system design requires underground Service or would otherwise require the addition of poles to the system.
b. All new Electric Utility Services to Commercial/ Industrial Customers and new subdivisions will be provided by underground facilities on the Customer’s Premises. The on-site underground Electric Utility lines will be provided by the Customer at the Customer’s expense and must meet CPAU specifications.
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SPECIAL ELECTRIC UTILITY REGULATIONS
RULE AND REGULATION 20
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective TBD10-21-2019
Sheet No. 3
2. NUMBER OF SERVICES PER BUILDING
Only one Electric Service line is allowed for a building or other Premises, except for
commercial properties, under the following conditions: a. Two or more Electric Service Drops or laterals may be extended to a single building provided all wiring supplied for each Service, other than Metering conductors, has
no common raceway, connection, or service area with wiring supplied by any other
such Service. Approval by the Director of Utilities, or his/her designee, is required, and Special Facilities Charges may apply. b. Two or more sets of Electric Service entrance conductors may be extended to a single switch gear for the purpose of providing additional capacity or for backup
protection. Special Facilities and/or reserve capacity Charges may apply. 3. SERVICES FOR TWO OR MORE COMMERCIAL BUILDINGS ON ONE PARCEL Only one Electric Service line is allowed on a parcel with multiple commercial buildings
except when the Applicant requests, and CPAU agrees, to install multiple Service Lines. The additional costs, as estimated by CPAU, will be borne by the Customer, including such continuing ownership costs as may be applicable. See Special Facilities (Section J) below. 4. NUMBER OF ELECTRIC SERVICE PERISCOPES PER SERVICE DROP Not more than two service periscopes may be served from a single overhead Service Drop. Overhead Service connections will not be installed where the Customer’s main switchboard is larger than 400 amps. D. PROTECTIVE DEVICES 1. The Customer is responsible for furnishing, installing, inspecting and keeping in good and safe condition at Customer’s own risk and expense, all appropriate protective devices of any kind or character, which may be required to properly protect the Customer’s facility. CPAU is not responsible for any loss or damage occasioned or caused by the negligence or wrongful act of the Customer, or any of the agents, employees or licensees of the property owner, in omitting, installing, maintaining, using, operating or interfering with any such protective devices.
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SPECIAL ELECTRIC UTILITY REGULATIONS
RULE AND REGULATION 20
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective TBD10-21-2019
Sheet No. 4
2. The Customer is responsible for locating, installing, and maintaining approved protective devices as may be necessary to coordinate properly with CPAU’s protective devices to avoid exposing other Customers to unnecessary Service interruptions.
3. Applicants or Customers who request Primary voltage Service must install, at a minimum, circuit breakers with over-current and ground fault relays. Applicants must submit their planned protection scheme to the City’s Building and Utilities Departments for approval prior to installing any equipment.
4. The Customer is responsible for equipping three-phase motor installations with appropriate protective devices, or for using motors with inherent protective features, to completely disconnect each motor from its power supply. Appropriate protective devices must include the following: a. Protection in each set of phase conductors to prevent damage due to overheating in the event of overload. b. Protection to prevent automatic restarting of motors or motor-driven machinery which has been subject to a Service interruption and, because of the nature of the
machinery itself or the product it handles, cannot safely resume operation automatically. c. Open-phase protection to prevent damage in the event of loss of voltage on one phase.
d. Reverse-phase protection to prevent uncontrolled reversal of motor rotation in the event of accidental phase reversal. Appropriate installations include, but are not limited to, motors driving elevators, hoists, tramways, cranes, pumps, and conveyors.
5. The Applicant is responsible for installing and maintaining Service equipment rated for the available short-circuit current at the Point-of-Delivery. This value varies from one location to another, and can change over time. The Applicant must consult CPAU for the short-circuit current at each Point-of-Delivery.
6. Any non-CPAU-owned Emergency standby generation equipment must be installed by the Applicant with suitable protective devices to prevent parallel operation with CPAU’s system. The design must be fail-safe, such as with the use of a double-throw switch to disconnect all conductors. Any exception must include a written agreement or Service
contract with CPAU permitting such parallel operation.
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SPECIAL ELECTRIC UTILITY REGULATIONS
RULE AND REGULATION 20
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective TBD10-21-2019
Sheet No. 5
7. Unprotected Service entrance conductors within a building must terminate at a disconnect switch immediately after entering the building. Installation must comply with the National
Electrical Code section 230-70, concerning the location of the disconnect switch, and
section 230-6, defining conductors considered outside a building. E. INTERFERENCE WITH SERVICE
1. GENERAL
CPAU reserves the right to refuse to serve new Loads or refuse to continue to supply existing Loads of a size or character that may be detrimental to CPAU’s operation or to the Service of its Customers. Any Customer who operates or plans to operate any equipment such as, but not limited to pumps, welders, saw mill apparatus, furnaces, compressors or
other equipment where the use of Electricity is intermittent, causes intolerable voltage fluctuations, or may otherwise cause intolerable Service interference, must reasonably limit such interference or restrict the use of such equipment upon request by CPAU. The Customer is required to provide and pay for whatever corrective measures are necessary to limit the interference to a level established by CPAU as reasonable, or avoid the use of
such equipment, whether or not the equipment has previously caused interference. 2. HARMFUL WAVEFORM Customers may not operate equipment that superimposes a current of any frequency or
waveform onto CPAU’s system or draws current from CPAU’s system of a harmful waveform, which causes interference with CPAU’s operations, Service to other Customers, or inductive interference to communication facilities. Examples of harmful waveform include, but are not limited to: a. Current drawn with high harmonic currents causing transformer or conductor overheating, even if root-mean-square (RMS) loading is within normal limits. b. Current drawn causing voltage distortion adversely affecting CPAU or other CPAU Customers.
c. Harmonic currents which exceed the harmonic current distortion limits set in the most recent IEEE Standard 519. In most cases, this equates to a maximum limit of 4% harmonic current on any individual odd harmonic or 5% total harmonic current. 3. CUSTOMER’S RESPONSIBILITY
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SPECIAL ELECTRIC UTILITY REGULATIONS
RULE AND REGULATION 20
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective TBD10-21-2019
Sheet No. 6
Any Customer causing Service interference to others must take timely corrective action. Otherwise, CPAU, without liability and after giving five (5) days written notice to
Customer, will take corrective action. Corrective action could include discontinuing
Electric Service until a CPAU-approved permanent and operational solution is provided by the Customer, at Customer’s expense. 4. MOTOR STARTING CURRENT LIMITATIONS a. The starting of motors must be controlled by the Customer as necessary to avoid
causing voltage fluctuations that will be detrimental to the operation of CPAU’s Distribution or Transmission System, or to the Service of any of CPAU Customers. b. If motor starting causes or is expected to cause detrimental Service to others, a suitable means must be employed, at the Customer’s expense, to limit voltage fluctuations to a tolerable level. F. PHASE BALANCING It is the Customer’s responsibility to maintain a balanced Load, as nearly as practical, between supplied circuit phases. In no case can the Load on one side of a three-wire single-phase service be greater than twice that on the other. In no case can the Load on any one phase of a polyphase
service be greater than twice that of any other.
G. POWER FACTOR CORRECTION
The Customer is required to provide, at Customer’s own expense, Power Factor correction
equipment. This equipment must be sized to improve the average Power Factor to at least the level set forth in the applicable Rate Schedule with respect to avoiding a Power Factor penalty. H. SERVICE DISCONNECT AND METER TEST DEVICES
1. All Service disconnects and similar devices, irrespective of voltage, required by Law in connection with a Service and Meter installation on Customer’s Premises, must be furnished, installed and maintained by the Customer. A “Service-disconnecting means”, as defined in the National Electrical Code (NEC), must be installed adjacent to the CPAU Electric Meter(s). Metering equipment must be located on the exterior of the building,
unless approved by the CPAU Electric Engineering Manager. 2. When instrument transformers are required by CPAU as part of the Meter installation,
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SPECIAL ELECTRIC UTILITY REGULATIONS
RULE AND REGULATION 20
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective TBD10-21-2019
Sheet No. 7
CPAU will install a Meter test bypass block on a mounting plate that must be furnished by the Customer. When instrument transformers are not required by CPAU, the Customer is responsible for providing the Meter test bypass block. Meter test bypass blocks furnished
by the Customer must be approved by CPAU in conjunction with Applicant’s plan
submittal. I. SPECIAL POWER SERVICE REQUIREMENTS
1. GENERAL
Where a Customer requests voltage control with less variance than what is specified in Rule and Regulation 3 (Description of Utility Services), the Customer must reimburse CPAU for its cost to provide, at CPAU’s sole option and discretion, any special or additional equipment to meet the Customer’s special needs.
2. NONSTANDARD OR EXCESSIVE CUSTOMER REQUIREMENTS a. In order to prevent damage to CPAU’s equipment and impairment of its Service, the Customer must give CPAU notice before making any additions to the connected
Load so that CPAU, at its option, may provide such facilities as may be necessary for furnishing the increased Service. b. If a Customer’s Load is of sufficient magnitude that it exceeds the capacity of CPAU’s Distribution System, the Customer may be required by CPAU to shift peak
loading to off-peak periods and/or receive service from CPAU’s 60 kilovolt sub-Transmission System. J. SPECIAL FACILITIES 1. Special Facilities are facilities requested by an Applicant in addition to or in substitution for standard facilities which CPAU would normally provide. Standard facilities are for delivery of Service at one point, through one Meter, at one voltage class under CPAU Rate Schedules. 2. CPAU normally installs only those standard facilities which it deems are necessary to provide regular Service in accordance with applicable CPAU Rules and Utility Standards. Where the Applicant requests that CPAU install Special Facilities and CPAU agrees to make such an installation, the additional costs thereof, as estimated by CPAU, will be borne by the Applicant, including such continuing ownership costs as may be applicable. These
costs will be calculated by CPAU based on the net present value, and must be paid by the
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SPECIAL ELECTRIC UTILITY REGULATIONS
RULE AND REGULATION 20
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective TBD10-21-2019
Sheet No. 8
Applicant in advance of installation unless alternative payment arrangements are approved by the Director of Utilities.
3. Unless otherwise provided by CPAU’s applicable Rules and Utility Standards, Special
Facilities will be installed, owned and maintained by CPAU as an accommodation to the Applicant only if acceptable for operation by CPAU and if the reliability of Service to CPAU’s other Customers is not impaired.
4. Installation of Special Facilities will require a contract between the Applicant and the City
of Palo Alto. K. NEIGHBORHOOD FUNDING OF SUBSURFACE EQUIPMENT 1. REPLACEMENT OF SUBSURFACE EQUIPMENT a. Notwithstanding the provisions of Rule and Regulation 3(B)(3), in Underground Utility Districts in which the existing equipment required to provide Electric Service to Customers is subsurface, the Utilities Director, or his/her designee, may, at the end of the service life of such equipment vaults or equipment, authorize their replacement with new subsurface
equipment if the following conditions are met:
(i) The Utilities Director, or his/her designee, determines that the installation of subsurface equipment is practicable; and
(ii) Such installation has been requested by property owners in the manner set forth in this subdivision K; and
(iii) The City receives funding for the subsurface installation as set forth in this subdivision K.
b. For purposes of this subdivision K, “Neighborhood-Funded Subsurface Installation” means all vaults and equipment the installation of which has been funded pursuant to this subdivision K.
c. CPAU operates its utilities in accordance with Prudent Utility Practice. As is always the case with CPAU’s Electric Distribution System and any CPAU-operated equipment, CPAU reserves the right to operate, maintain, rehabilitate, and replace equipment at such time and in such manner as it determines is necessary or useful for the safe and effective operation of the Electric Distribution System. Consequently, nothing in this subdivision K should be
interpreted to:
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SPECIAL ELECTRIC UTILITY REGULATIONS
RULE AND REGULATION 20
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective TBD10-21-2019
Sheet No. 9
(i) Require that CPAU, at the end of the useful life of a Neighborhood-Funded Subsurface Installation, replace that equipment with a subsurface installation; or (ii) Prohibit CPAU, subsequent to the installation of a Neighborhood-Funded Subsurface
Installation, from installing pad-mounted equipment in the territory served by that
Neighborhood-Funded Subsurface Installation if the Utilities Director determines that such installation is necessary or prudent; or (iii) At any time prohibit CPAU from replacing all or part of a Neighborhood-Funded Subsurface Installation with pad-mounted equipment if CPAU is required to do so by
Law or if the Utilities Director determines that the continued operation of all or part
of the Neighborhood-Funded Subsurface Installation presents an unacceptable hazard to public safety, employee safety, or system reliability, or is contrary to Prudent Utility Practice. 2. REQUEST FOR PETITION FORM
a. Upon receiving a timely written request signed by owners of at least five parcels of real property in an area served by a subsurface installation, CPAU will prepare the petition form described in subdivision (3)(c) of this subdivision (K).
b. A request will be considered timely only if (i) it is submitted to the Utilities Director, or his/her designee no later than 30 days following the distribution of the first courtesy notice regarding the planned replacement of a subsurface installation or (ii) the Utilities Director determines that the work schedule for such replacement will permit the time necessary for the process described in subdivisions (3) and (4) of this subdivision (K).
c. Nothing in this subdivision (K) will be interpreted to require the preparation of a petition form or the provision of time for circulation of a petition if the Utilities Director determines that either the work schedule for a project or operational requirements will not make it practicable to allow time for preparation and circulation of the petition and collection of
funding by proponents. 3. REQUEST FOR SUBSURFACE EQUIPMENT a. The owners of real property located in a Underground Utility District may request the
replacement of existing vaults and equipment with new subsurface equipment by submitting a petition to the Utilities Director, or his/her designee. b. The petition must be signed by the owners of not less than 60% of the parcels in the Underground Utility District.
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SPECIAL ELECTRIC UTILITY REGULATIONS
RULE AND REGULATION 20
CITY OF PALO ALTO UTILITIES RULES AND REGULATIONS Issued by the City Council Effective TBD10-21-2019
Sheet No. 10
c. The petition must be on the form prepared by CPAU pursuant to subdivision (2) of this subdivision (K). The form must include a map or description of the area to be served by the Neighborhood-Funded Subsurface Installation; a summary of this procedure for
Neighborhood Funding of Subsurface Equipment; as well as any additional information
deemed necessary or useful by the Utilities Director, or his/her designee. d. The form must indicate the name and contact information of one property owner who will serve as proponent for the project and must indicate the date on which the form was issued
to that proponent and the amount of the payment required by subdivision (f) of this
subdivision (3). e. To be valid, the signed petition must be returned to the Utilities Director, or his/her designee, no later than 45 days after the form is issued to the proponent.
f. The signed petition must be accompanied by a payment to cover the cost of developing a cost-estimate for the proposed subsurface replacement. The amount of this payment, as determined by the Utilities Director or his/her designee, will be indicated on the form. 4. FUNDING OF SUBSURFACE EQUIPMENT a. Upon receipt of a valid petition, the Utilities Director, or his/her designee, will provide the proponent with either (i) a written estimate of the cost of a subsurface installation (including the net present value of any unusual continuing ownership costs associated with such installation) or (ii) a finding that such installation is not practicable. The proponent will also
be provided with an estimate of the cost of a standard installation. b. The City will proceed with the subsurface installation if and only if within 90 days of the date upon which the Utilities Director, or his/her designee, provides a written estimate pursuant to subdivision (a) of this subdivision (4), the City receives payment in full for the
estimated cost difference between the subsurface and the standard installation. c. It is the responsibility of the proponent to raise the funding required by this Section and the entire cost must be paid to the City at one time. The City will not collect funds from property owners or community members nor will it require any person or property owner to pay any
portion of the costs. d. The Utilities Director, or his/her designee, may extend the payment deadline set forth in this subdivision.
(END)
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City of Palo Alto (ID # 14845)
Utilities Advisory Commission Staff Report
Meeting Date: 11/2/2022 Report Type: VII. NEW BUSINESS
City of Palo Alto Page 1
Title: Staff Recommends That the Utilities Advisory Commission (UAC)
Approve a Recommendation That Council Recommend Building the Fiber
Backbone and Options for Fiber-to-the-Premises (FTTP)
From: Director of Utilities
Lead Department: Utilities
Recommendation
Staff recommends that the Utilities Advisory Commission (UAC) approve a recommendation
that Council recommend building the fiber backbone and the following options for Fiber-to-the-
Premises (FTTP):
Option 1. Build fiber backbone and FTTP within five years with $98M Revenue Bond.
The business models developed anticipate construction costs of $127.9
million to build the fiber backbone and FTTP distribution network, and $15
million to provide City-owned ISP services totaling $142.9 million for the
entire project. The fiber fund has a balance of $34 million, leaving a funding
gap of $98 million which may be covered with a revenue bond.
Option 2. Build fiber backbone and FTTP under a phased approach without new bond
financing. Use $34M from the Fiber fund and $13M from the Electric fund to
build the fiber backbone and build phase 1 of the FTTP distribution network
in a phased approach based on areas with lowest construction cost, highest
demand, or least competition.
Option 3. Build fiber backbone, pause City-owned ISP plans, and collaborate with
private ISPs. Build the fiber backbone to increase reliability and capacity for
dark fiber licensing and support “smart city” initiatives. Collaborate with ISP
providers to improve broadband in Palo Alto. Pause FTTP efforts and
redistribute some fiber surplus to support other City initiatives such as grid
modernization or electrification.
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Executive Summary
This report is a culmination of recent research and findings on building fiber backbone and
citywide FTTP, including follow-up information from the joint session held on September 19,
2022 (Staff Report #13956). This meeting will provide UAC an opportunity to review the
findings and information accumulated so far, consider the options to recommend for moving
forward, and provide staff with feedback on any remaining outstanding information needed for
UAC recommendation to Council. Included in this report are follow-up information requested
from the joint session and recommended options to provide for Council recommendation:
1. Comparisons to other California municipalities providing fiber service
2. Use of Micro-trenching to reduce construction costs and accelerate FTTP buildout
3. Use of Fiber Fund surplus for FTTP and other City services
4. Options to build FTTP and enhance broadband in Palo Alto
Background
On September 19, 2022 the Council and UAC held a joint session to discuss the City’s fiber
backbone network plan and findings from research into providing citywide FTTP. During the
joint session, the Council and UAC reviewed plans to build the fiber backbone and evaluated
the feasibility of expanding the City’s current licensing of dark fiber to end users by building out
the network to connect to homes and businesses with a citywide FTTP distribution network to
offer broadband services. Building out the network to connect to homes and businesses is
commonly known as building out the “last mile” in a network.
There have been multiple discussions regarding the tradeoffs for offering FTTP to the
community as a service, investments needed to build out and support City-owned broadband,
the benefits and risks of becoming a new internet service provider (ISP), and various financial
models and organizational structure. The City’s consultant, Magellan, presented information
demonstrating how building the last mile in the City’s fiber network infrastructure supports the
City’s initiatives, provides the community with more choice among broadband providers, and
becomes a valuable telecommunication investment for the future.
Additionally, it was acknowledged that while the City operates its own utilities, and the fiber
network has a successful dark fiber business model, the competitive landscape for FTTP would
be very different from managing other City-owned utilities and dark fiber licensing. The City
would not only have to build a reliable FTTP distribution network capable of delivering ultra-
high-speed Internet options, but also capture market share, provide responsive customer
service and support, implement and install FTTP, and respond to competitors’ efforts.
Given the information presented so far for consideration, the tradeoffs and resources needed
to implement and support FTTP, several options for building FTTP have come into focus and are
summarized below for further discussion.
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Discussion
The following discussion topics include some follow-up information requested from the joint
session in addition to exploring the options for building FTTP.
Comparisons to other Municipalities with Fiber
According to the Institute for Local Self-Reliance Community Broadband Map, in the United
States there are 83 municipal networks serving 148 communities with a publicly owned FTTP
citywide network. More broadly, there are 260 communities with some form of publicly owned
fiber service limited to parts of the community, usually in business districts and approximately
150 communities with publicly owned dark fiber available.1 Staff searched for comparable
municipalities in the State of California and found instead of providing citywide FTTP resembling
what the City of Palo Alto is exploring, most municipalities are either:
1. Developing a City-owned fiber optic network master plan to serve government facilities,
commercial corridors, and/or residents
a. Developing master plans: Fremont, Glendale
b. Completed master plans: Vallejo, San Leandro,
2. Only providing dark fiber and commercial ISP; not offering residential ISP
a. Burbank, Los Angeles, Santa Monica
3. Providing limited instead of citywide FTTP services to select areas/communities
a. Loma Linda provides FTTP to homes built after 2004
b. Rancho Cucamonga provides FTTP in greenfield developments
c. Santa Monica provides FTTP in select multi-family developments
4. Providing FTTP through a city-funded and owned asset model where private companies
access the public right-of-way (PROW) through a franchise agreement or public-private
partnership
a. Brentwood licenses conduit to Sonic in select areas
b. Culver City, Ontario, and Vallejo partnered with CLEC Onward to provide FTTP
c. Santa Cruz partnered with Cruzio Internet to provide FTTP
d. Fullerton partnered with SiFi Networks, GigabitNow and Ting to build a citywide
network. The network has only been operational for 1-2 years.
Staff compiled a list of municipalities in California (Attachment A) with short descriptors for
how they’re utilizing their fiber optic assets. While there are other California municipalities
offering dark fiber service, city-operated commercial ISP, and municipal FTTP in select areas,
there is currently no city providing a city-owned and citywide FTTP internet service comparable
to what Palo Alto is exploring.
1 Institute for Local Self-Reliance Community Broadband map: https://muninetworks.org/communitymap
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Micro-trenching as an Alternative Construction Method
In response to Council’s question on micro-trenching as a method to reduce construction costs,
Utilities, Public Works and Magellan evaluated the benefits and disadvantages of applying
micro-trenching in Palo Alto’s FTTP buildout.
In recent years, “micro-trenching” has emerged as a new construction method for deploying
fiber infrastructure. Whereas traditional standards call for fiber to be buried at least 24-36
inches below grade either with directional boring or trenching, micro-trenching uses thinner,
shallower cuts averaging 8-16 inches in depth. Typically, these cuts are made either in the
pavement, sidewalk or the joint between the pavement and guttering. Proponents of micro-
trenching note the shallower placement reduces construction cost by 40%-50% and can
accelerate construction schedules by three to four times of the typical timeline. Street closures
can also be reduced. The challenge of implementing micro-trenching at a much shallower depth
than other methods of fiber construction results in vulnerability to dig-ups of fiber conduit,
higher number of outages, and may contribute to deteriorating road conditions. Thus far, only a
few cities (e.g., Austin, Texas) have successfully allowed fiber network builders to use micro-
trenching as the preferred construction methodology to deploy broadband and other
telecommunication services.
Effective January 2022, state law requires the City to allow micro-trenching for the installation
of underground fiber if the installation in the micro-trench is limited to fiber, unless the City
makes a written finding that allowing micro-trenching for a fiber installation would have a
specific, adverse impact on the public health or safety. The law also requires the City to adopt
or amend its existing policies, ordinances, codes, or construction rules to allow for micro-
trenching for fiber. The Public Works Department in collaboration with the City Attorney’s
Office, Utilities and Urban Forestry, is developing a micro-trenching standard for the City. As of
the writing of this report, the City has not received any inquiries from the incumbent ISPs
(wired and wireless) to use micro-trenching to deploy fiber.
As a part of ongoing efforts to explore potential cost savings for building FTTP, staff evaluated
micro-trenching and found although there may be construction cost savings of $10 – $20
million (high level estimate) in the undergrounded “last mile” portions of a FTTP network, these
savings are unlikely to be fully realized due to cost factors which would offset a significant
portion of potential savings. These cost factors include but are not limited to future outages,
tree root protection, and impacts to street conditions. For a more thorough calculation of cost
savings applying micro-trench, Magellan may need up to four months to conduct a field survey
in the underground areas and redesign the architecture of the FTTP network.
Although micro-trenching has the potential to result in reduced construction costs and faster
implementation time in high density and rural areas, staff’s research suggests there are long-
term risks in Palo Alto such as network reliability, impact to the City’s street pavement
condition index score, and the effect on tree canopies – all of which may significantly outweigh
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the construction benefits. Based on these concerns, staff does not recommend using micro-
trenching to build the FTTP network in underground districts.
Use of Fiber surplus for FTTP and other City services
To date, the City has accumulated a surplus of approximately $34 million through its dark fiber
licensing revenues. The existing surplus may be used for capital expenditures related to the
fiber network, including the FTTP buildout. However, the potential uses for future surpluses are
less certain because the legal landscape regarding local government revenues is complex and
frequently subject to litigation and ballot initiatives. Staff will continue to monitor legal
developments that potentially affect the Fiber utility.
Options to build FTTP and enhance broadband service in Palo Alto
Upon review of the findings from the joint session and follow-up information incorporated into
this report, options for providing FTTP and enhancing broadband service were narrowed down
to the following three:
Option 1. Build backbone and citywide FTTP within five years with $98M of Revenue Bond
financing
Based on the current business models and anticipated construction costs for the fiber backbone
and FTTP distribution network, the project team estimates a funding gap of approximately $98
million to be allocated in both the Fiber Fund and Electric Fund. The allocation for the
construction costs and the bond financing structure would still need to be finalized based on
actual plans.
Costs Current Estimates 2022
Fiber Backbone $25.6 M
Fiber-to-the-Premise $102.3 M
Working Capital Set Aside $15.0 M
Total Costs $142.9 M
Funding Current Estimates 2022
Cost Savings if Built Jointly ($10.9 M)
Existing Fiber Fund ($34.0 M)
Total New Funding Required $98.0 M
New Funding Allocation* Fiber $80 M - $85 M
Electric $13 M - $18 M
Utility Revenue Bonds are a cost-effective option for long-term capital improvement projects
with a large funding gap such as the $98M in this project. There are various revenue bonds
structures and potential bond rating assumptions which could be applied for the fiber backbone
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and FTTP distribution network. The bonds are anticipated to be issued by both the Fiber Optics
Fund for the FTTP construction, and the Electric Fund for the building the fiber backbone. Given
the financial strength of the reserves, assets, and lack of current debt by the Electric utility, the
new revenue bonds for the backbone and FTTP has little to no impact on potential future
Electric bond issuance(s). The Electric utility is the City’s financially strongest utility, and the
other City utilities with outstanding bonds have a triple A credit ratings from Standard and
Poor’s therefore, staff anticipates the Electric utility will also receive the highest credit rating as
well. The credit rating for the Fiber utility is less certain, as is the credit rating for a combined
(Fiber and Electric) bonds issuance. The allocation of construction costs between the two funds
and the bond financing structure is still being finalized, and the potential bond rating will be
determined after a rating presentation (usually occurs a month prior to the bond issuance). The
table below shows the preliminary potential bond structures estimated on a 30-year $98 million
(par) bond issuance needed to fund the project gap for the following scenarios:
Scenari
o Rating Capitalize
d Interest
All-In True
Interest
Cost
Annual
Average Debt
Service
Total Debt
Service
(net of
Capl)
1* AA+ 18 months 4.42% $6.47 M $186.82 M
2** AA+ None 4.42% $5.96 M $179.45 M
3* AA 18 months 4.49% $6.52 M $188.34 M
4** AA None 4.49% $6.01 M $180.80 M
*Scenarios 1 and 3: 18 months Capitalized Interest. First three (interest only) semi-annual debt
service payments during project construction are paid by bond funds. This amount is added to
the principal bond issuance.
**Scenarios 2 and 4: No capitalized interest. First debt service would be due six months after the
bond issuance.
One of the primary advantages of option 1 is that it provides every resident and business in
Palo Alto with equal access to Palo Alto Fiber within five years. Construction bid prices will be
more favorable and competitive than option 2 and 3 because of larger construction project and
economies of scale, and the customer take rates would be higher due to speed to market,
marketing campaign, and favorable momentum for Palo Alto Fiber. In addition to providing
fast, reliable and cost-competitive internet access to all residents and businesses, the new FTTP
network will provide more dark fiber licensing opportunities, support “smart city” initiatives for
all departments, and serve as future telecommunication infrastructure for City or third-party
needs.
The disadvantages of option 1 is uncertainty of the customer take rate percentage and how
existing ISP incumbents will respond. The take rate is key to making Palo Alto Fiber financially
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sustainable, and existing ISP incumbents may respond in an adversarial manner to further
impact take rtes. If the Palo Alto Fiber cannot attain a minimum take rate of 25% after the build
out, the City will have to identify other sources of funding to repay the outstanding debt
amount.
Option 2. Build fiber backbone and FTTP with existing fiber reserves under a phased
approach.
Phasing the deployment approach reduces the need for bond financing which reduces the City’s
financial risk. It also allows the City to begin construction in areas with higher potential take
rates, slowly ramping up instead of committing to a full deployment. The phased approach
allows the City to build revenues from deployments which could then be reinvested each year
to build out more of the fiber network in subsequent areas on an incremental basis instead of
taking on more debt. If successful, this model would eventually cover 100% of the City. Staff will
provide key financial information (i.e. number of subscribers, revenue, expenses) on a regular
basis to inform Council of the new FTTP business. With this information, Council can decide
whether the City should 1) continue the phased approach; 2) seek revenue bond financing to
accelerate the buildout; 3) pause FTTP expansion.
Under the phased approach and assuming a $20 million capital investment from the Fiber Fund,
the City can provide access to 20% - 30% of homes and businesses in phase 1. Magellan
developed three potential phase 1 deployment models for FTTP with the following initial build
out scenarios:
1. Areas with the lowest construction cost and highest density
2. Areas with the highest demand based on deposits
3. Areas without AT&T Fiber, with the goal of increasing take rates
Areas of Lowest
Cost, Highest
Density
Areas of Highest
Demand
Areas without
AT&T Fiber
Total Cost $20 M $20 M $20 M
Single-Family with Access 4,231 3,540 3,186
Multi-Family with Access 6,213 4,712 4,594
Total Homes with Access 10,444 8,252 7,780
Total Businesses with
Access 1,064 879 912
Total Homes and
Businesses with Access 11,508 9,131 8,692
Option 2 provides the advantage of requiring no initial bond financing. With $34M of Fiber
Reserves and $13 - $18M contributions from the Electric Fund, the City can build a dedicated
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fiber backbone for the Electric utility to enhance reliability, security, redundancy, and future
electric-related initiatives such as automated SCADA sensors. The City will also be able to
provide internet access to approximately 20% - 30% of homes and residents who prefer to
switch to City-owned ISP. Council can decide whether to accelerate or decelerate the FTTP
expansion plan in one or two years based on how the deployment of Phase 1 goes. Under
Option 2, the City will evaluate the feasibility of integrating FTTP expansion into future capital
improvement projects such as electric grid modernization, electrification and undergrounding.
The disadvantages of Option 2 are primarily its longer implementation time, which would likely
impact take rates and weaken the City’s competitive position. Additionally, the phased
approach could impact equity as not all parts of the community would be built out at the same
time.
Option 3. Build fiber backbone, Pause City-owned ISP plans, and Collaborate with private
ISPs
The City’s fiber optic backbone network was planned, designed and constructed in the mid to
late 1990s. The estimated useful life of fiber plant is typically 30 to 40 years. The Utilities
Department began to license dark fiber service connections for commercial purposes in the late
1990s. Since then, several sections of the fiber network have reached capacity, which limits the
City's ability to effectively serve its existing customers and acquire new customers. Building the
fiber backbone is essential to maintaining and improving network reliability, increasing network
coverage and capacity for commercial dark fiber customers, and supporting various “smart city”
initiatives for City departments such as Information Technology, Office of Emergency Services,
Public Safety, Public Works, Transportation and Utilities.
In light of future network and service upgrade plans by the incumbent ISPs and the
development of emerging technologies such as mobile and fixed 5G wireless, instead of
building out the last mile the same time, the City may postpone its FTTP development. The City
could, instead, identify resources to improve coordination of City policies, processes, and access
to communication infrastructure in the PROW to facilitate network upgrades. These efforts
could enhance transparency and predictability for ISPs planning network upgrades and/or
building new networks. In general, municipal strategies for advancing broadband deployment
without building their own FTTP are typically to:
1. Facilitate access to key assets such as fiber, communication conduit and utility poles in
the PROW in addition to access to City-owned real property;
2. Provide frequently used information such as construction standards and pole
requirements to potential broadband service providers; and
3. Streamline and publicize local construction, PROW and permitting processes.
The Option 3 benefits of proceeding with building the fiber backbone provides a more robust
network and increases capacity to possibly create new opportunities for dark fiber licensing and
enable “smart city” initiatives such as sensor infrastructure, traffic management, and smart
parking. Rather than allocate the dark fiber reserve fund to a multi-year FTTP construction
project, these funds could be redistributed to support other City initiatives such as grid
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modernization or electrification. Instead of building FTTP, the City could focus on working with
existing ISPs to enhance broadband service throughout the City with substantially less financial
investment and risk for the City as delivery of broadband services would be completely
controlled by the existing providers.
The downside of Option 3 is if postponing FTTP resumed at a future date, labor and materials
costs may be higher, other providers may be further entrenched, and the City’s share of the
market would be limited or more difficult to compete, dwindling chances for the community to
invest in a community-owned asset. New technologies such as wireless could evolve and
become widely available to residents and businesses, further reducing market share. The net
result to the community for postponing FTTP is a loss in the opportunity for the City to maintain
local control of how broadband is delivered in Palo Alto citizens and businesses, in terms of
pricing, internet speeds, net neutrality, and privacy.
Resource Impact
Option 1 Option 2 Option 3
Description
Fiber Backbone +
FTTP in 5 Years
Fiber Backbone +
$20M FTTP Phase 1
Fiber Backbone +
Pause City FTTP
Expenses:
Fiber Backbone $25.6 M $25.6 M $25.6 M
Fiber-to-the-Premises $102.3 M $20.0 M $ 0.0
Working Capital $15.0 M $3.0M $ 0.0
Total Costs $142.9 M $48.6 M $25.6 M
Funding:
Cost Savings if Built
Jointly ($10.9 M) ($1.7 M) -
Fiber Fund ($34.0 M) ($34.0 M) ($12.8 M)
Electric Fund $0.00 ($12.9 M) ($12.8 M)
Total Funding/Savings ($57.9M) ($48.6 M) ($25.6 M)
New Funding Required $98.0M* $ 0.0 $ 0.0
* Allocation of revenue bond between Electric and Fiber will be determined based on actual
construction costs.
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Stakeholder Engagement
On September 19, 2022, City Council and Utilities Advisory Commission held a public joint
session to discuss the City’s fiber expansion plan and specifically FTTP. The joint session
included information for Council and UAC as they consider next steps for FTTP. The information
included FTTP engineering design details, construction cost estimates, market analysis results,
financial models, and organizational structure options.
Environmental Review
This report is not a project for the purpose of the California Environmental Quality Act (CEQA).
Attachments:
• Attachment A: Comparison Chart
• Attachment B: Presentation
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Attachment A. Comparison to Other Muncipalities with Fiber
Examples of Municipal Broadband in California
City Type Utilities Offered
Incumbent Telecom
Providers City-owned FTTP Additional comments/notes
Alameda Electric AT&T; Xfinity No Hybrid Fiber Coax network sold to Comcast in 2008.
Anaheim Dark Fiber, Electric, Water AT&T; Spectrum No
Atherton, Town of None AT&T; Xfinity No Atherton Fiber is not a municipally-owned enterprise. City allowed PROW access.
Beverly Hills Solid Waste, Storm Water, Waste Water, Water AT&T; Spectrum Yes Citywide FTTP project halted and resumed, currently the project is under evaluation.
Brentwood Garbage, Sewer, Water AT&T; Xfinity No City leases conduit to Sonic in select areas of the city where the city installed empty communication
conduit for new housing developments.
Burbank Dark Fiber1, Electric, Water AT&T; Spectrum No Commercial Dark Fiber and Business Internet Services.
Culver City Dark Fiber, Electric, Water AT&T; Spectrum No Partnership with CLEC Onward - Business Internet.
Glendale Dark Fiber, Electric, Water AT&T; Spectrum No Curently working with Magellan on Fiber Optic Business Plan for network expansion
Huntington Beach Dark Fiber1, Sewer, Trash, Water Spectrum; Frontier No
Loma Linda Refuse, Sewer, Water AT&T; Spectrum Yes1 City FTTP is limited to select areas and provided to homes built after 2004.
Los Angeles Dark Fiber1, Electric, Water AT&T; Spectrum No Commercial Dark Fiber and Business Internet Services.
Ontario Dark Fiber, Wastewater, Water Spectrum; Frontier No Partnership with CLEC Onward - Residential and Business Internet.
Palo Alto Dark Fiber, Electric, Gas, Wastewater, Water AT&T; Xfinity TBD
Pasadena Electric, Water AT&T; Spectrum No Commercial Dark Fiber and Business Internet Services.
Rancho Cucamonga Broadband, Electric, Water AT&T; Spectrum No City Muni Broadband partners with CLEC Onward - Residential & Business Internet. City funded the
fiber.
Riverside Dark Fiber, Electric, Water AT&T; Spectrum No Council recently approved agreement with SiFi to build FTTP ($300M) - Open Access Model.
San Bruno Fiber, Solid Waste, Waste Water, Water AT&T; San Bruno CityNet Yes2 City-owned San Bruno CityNet Services is the incumbent cable franchise operator. Former name San
Bruno Cable.
San Leandro None AT&T; Xfinity No City provides conduit while rivate partner provides the fiber and services to businesses for "Lit San
Leandro".
Santa Clara Dark Fiber, Garbage, Sewer, Water AT&T; Xfinity No Santa Clara electric utility is called Silicon Valley Power.
Santa Cruz Water AT&T; Xfinity No
2016: Drop efforts for City and local ISP Curzio Internet to build FTTP under a public-private
partnership agreement branded Santa Cruz Fiber. City is not involved with the limited self-funded
builds.
Santa Monica Dark Fiber, Resource Recovery, Sewer, Water Spectrum; Frontier No Commerical dark fiber and Business Internet Services.
San Francisco Dark Fiber, Wastewater, Water AT&T; Xfinity No
Shafter Fiber, Sewer, Trash, Water Optimum; AT&T Yes Business and residential FTTP - ISPs include Level 3 and Vast Networks.
Vallejo Water AT&T; Xfinity No Partnership with CLEC Onward - Residential and Business Internet.
1. Limited to regions/market segments
2. Hybrid Fiber Coax instead of just Fiber
3. Public-Private Partnership (P3)
6.a
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Building the Fiber
Backbone and Options for
Fiber-to-the-Premises
November 2, 2022
PALO
ALTO
llill
6.b
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- 2
AGENDA
•Informational update from Joint Session on Sept. 19, 2022
•Comparisons to California Municipalities with Fiber
•Benefits and Risks of Micro-trenching
•Use of Fiber Fund Surplus
•Fiber-to-the-Premises (FTTP) Deployment Options
•Option 1: Build FTTP within five years with revenue bond
•Option 2: Phased buildout of FTTP without bond financing
•Option 3: Pause FTTP efforts
6.b
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- 3
Comparison to Other California Municipalities
Citywide fiber optic network master plan
Dark fiber licensing and commercial lit internet service
Limited FTTP in selected areas
Public-private partnership or franchise agreements
No city in California is providing city-owned and citywide FTTP
6.b
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- 4
Micro-trenching for Fiber
Thinner, shallower cuts with average depth of 8-16
inches versus traditional fiber depth of 24-36
inches.
Advantages: reduce construction costs by 40%-
50% and accelerate timeline by 3-4 times
Disadvantages: vulnerable to dig ups of fiber,
outages, deteriorating road conditions, and tree
root intrusion
Staff does not recommend micro-trenching in Palo
Alto currently. City is developing a micro-trench
standard to comply with state law.
Image from https://certusview.com/microtrenching/
Street Surface
Asphalt Sealer
Street Sub-Surface
Flowable
Non-Shrinking
Backfill
6.b
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- 5
Use of Fiber Fund Surplus
•$34 million of fiber surplus accumulated between 2000 - 2022
•Dark fiber surplus –capital expenditures related to the fiber
network, including the FTTP buildout
•FTTP fiber surplus –potential uses are less certain due to legal
landscape regarding local government revenues
Staff will continue to monitor legal developments that potentially
affect the Fiber utility.
6.b
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- 6
FIBER BACKBONE EXPANSION
•Fiber backbone is recommended under all 3 options
•Estimated construction cost -$25.6M
•Funded by electric and fiber funds; cost and fiber strand allocation will
depend on selected option
•Supports the City’s fiber licensing service and internal needs:
•Existing backbone is reaching end of life 30 –40 years
•Improves fiber and electric system reliability
•Enables more connectivity for City departments
•Provides new capacity for dark fiber licensing
6.b
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- 7
OPTION 1-FULL DEPLOYMENT (ADVANTAGES)
Advantages to build FTTP within five years with revenue bond
•All residents and businesses have equal access to fiber and provides
another ISP choice
•Higher internet speed and more reliability
•Local control including pricing, net neutrality, privacy and data caps
•Infrastructure to support for smart city applications to manage traffic, climate,
public safety, emergency operations and other civic functions
•Reduction in internet spending and improved internet services for entire
community
6.b
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- 8
OPTION 1-FULL DEPLOYMENT (DISADVANTAGES)
Disadvantages of building FTTP within five years with revenue bond
•Risk in competition with existing providers
•Risk in executing the construction project
•Learning curve in operating a competitive business
•Take rates of less than 25% would require City to slow down
construction and/or subsidize
6.b
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- 9
OPTION 2 –PHASED DEPLOYMENT
•$20M of capital from fiber fund for Phase 1 of FTTP
•Enables the City to start deployment debt-free
•Deployment options:
•Areas with lowest construction cost, highest density
•Areas with highest demand (based on deposits)
•Areas with least competition
6.b
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-10
OPTION 2-PHASED DEPLOYMENT -ADVANTAGES
•No new bonding required
•Less financial risk and no debt service
•Provide access to 20% -30% of homes and businesses in first phase
•Allows the City to build expertise before committing to a full
deployment
•Allows City to pivot if take rate is below minimum requirement
6.b
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-11
OPTION 2-PHASED DEPLOYMENT -DISADVANTAGES
•No economies of scale if buildout is limited
•Uncertainty of when residents or businesses have access
•Competition is likely to be first to market in other areas, inhibiting the
City’s “first mover” advantage if it chooses to continue buildout
•Limited benefit of the communications infrastructure to support the
City’s needs
•Utilities
•City departments
•Smart and wireless applications
6.b
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-12
OPTION 2 –PHASED DEPLOYMENT SCENARIOS
Areas of Lowest Cost,
Highest Density
Areas of Highest
Demand
Areas with Least
Competition
Total Cost $20M $20M $20M
Single-Family with Access 4,231 3,540 3,186
Multi-Family with Access 6,213 4,712 4,594
Total Homes with Access 10,444 8,252 7,780
Total Business Access 1,064 879 912
6.b
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-13
OPTION 3-PAUSE FTTP -ADVANTAGES
•No capital is invested in FTTP by the City, no risk is taken
•City does not compete with existing providers
•Incremental benefits to the community by collaborating with existing
providers
•Fiber surplus can be reinvested
6.b
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-14
OPTION 3-PAUSE FTTP -DISADVANTAGES
•City has limited influence over internet services that residents and
businesses receive
•Speeds
•Quality
•Pricing
•Customer service
•No benefit from the FTTP network to support the City’s needs
•Utilities
•City departments
•Smart city applications
6.b
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-15
COST COMPARISONS (In Millions)
Option 1 Option 2 Option 3
Description Fiber Backbone + FTTP
in 5 Years
Fiber Backbone + $20M
FTTP Phase 1
Fiber Backbone + Pause
City FTTP
Expenses:
Fiber Backbone $25.6 M $25.6 M $25.6 M
Fiber-to-the-Premises $102.3 M $20.0 M $ 0.0
Working Capital $15.0 M $3.0M $ 0.0
Total Costs $142.9 M $48.6 M $25.6 M
Funding:
Cost Savings if Built Jointly ($10.9 M)($1.7 M)-
Fiber Fund ($34.0 M)($34.0 M)($12.8 M)
Electric Fund $0.00 ($12.9 M)($12.8 M)
Total Funding/Savings ($44.9M)($48.6 M)($25.6 M)
New Funding Required $98.0M*$ 0.0 $ 0.0
* Allocation of revenue bond between Electric and Fiber will be determined based on actual construction costs.
6.b
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-16
UAC RECOMMENDATION
Staff recommends the UAC select one of the three options to
recommend for Council approval:
•Option 1. Build Fiber Backbone and FTTP within 5 years
with revenue bond of up to $98M
•Option 2. Build Fiber Backbone and Phase FTTP buildout
without bond financing
•Option 3. Build Fiber Backbone, Pause FTTP efforts, and
Collaborate with private ISPs
6.b
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