HomeMy WebLinkAbout2023-12-06 Utilities Advisory Commission Agenda PacketUTILITIES ADVISORY COMMISSION
Regular Meeting
Wednesday, December 06, 2023
Council Chambers & Hybrid
6:00 PM
Pursuant to AB 361 Palo Alto City Council meetings will be held as “hybrid” meetings with the
option to attend by teleconference/video conference 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. Information on how the public may observe and
participate in the meeting is located at the end of the agenda. Masks are strongly encouraged if
attending in person. The meeting will be broadcast on Cable TV Channel 26, live on
YouTube https://www.youtube.com/c/cityofpaloalto, and streamed to Midpen Media
Center https://midpenmedia.org.
VIRTUAL PARTICIPATION CLICK HERE TO JOIN (https://cityofpaloalto.zoom.us/j/96691297246)
Meeting ID: 966 9129 7246 Phone: 1(669)900‐6833
PUBLIC COMMENTS
Public comments will be accepted both in person and via Zoom for up to three minutes or an
amount of time determined by the Chair. All requests to speak will be taken until 5 minutes
after the staff’s presentation. Written public comments can be submitted in advance to
UACPublicMeetings@CityofPaloAlto.org and will be provided to the Council and available for
inspection on the City’s website. Please clearly indicate which agenda item you are referencing
in your subject line.
PowerPoints, videos, or other media to be presented during public comment are accepted only
by email to UACPublicMeetings@CityofPaloAlto.org at least 24 hours prior to the meeting. Once
received, the Clerk will have them shared at public comment for the specified item. To uphold
strong cybersecurity management practices, USB’s or other physical electronic storage devices
are not accepted.
TIME ESTIMATES
Listed times are estimates only and are subject to change at any time, including while the
meeting is in progress. The Commission reserves the right to use more or less time on any item,
to change the order of items and/or to continue items to another meeting. Particular items may
be heard before or after the time estimated on the agenda. This may occur in order to best
manage the time at a meeting or to adapt to the participation of the public.
CALL TO ORDER 6:00pm ‐ 6:05pm
AGENDA CHANGES, ADDITIONS AND DELETIONS 6:05pm ‐ 6:10pm
The Chair or Board majority may modify the agenda order to improve meeting management.
PUBLIC COMMENT 6:10pm ‐ 6:25pm
Members of the public may speak to any item NOT on the agenda.
APPROVAL OF MINUTES 6:25pm ‐ 6:30pm
1.Approval of the Minutes of the Utilities Advisory Commission Meeting Held on October
11, 2023
2.Approval of the Minutes of the Utilities Advisory Commission Meeting Held on November
1, 2023
UTILITIES DIRECTOR REPORT 6:30pm ‐ 6:45pm
NEW BUSINESS (a 10 minute break will be imposed during this section)
3.Staff Requests the Utilities Advisory Commission Recommend the City Council Approve
the Continuation of the Cross‐Bore Verification Program (ACTION 6:45pm – 7:45pm)
Staff: Aaron Perkins
4.Recommendation to Adopt a Resolution Approving an Amendment to the City’s 2009
California‐Oregon Transmission Project Long‐Term Layoff Agreement to Extend the City’s
Layoff of its Share of the California Oregon Transmission Project (COTP) until 2034 and
to Receive Annual Market Payments
5.S/CAP Strategic Plan on the Reliability and Resiliency for the Electric Distribution Utility
(ACTION 8:30pm – 9:30pm) Staff: Jonathan Abendschein
COMMISSIONER COMMENTS AND REPORTS FROM MEETINGS/EVENTS
FUTURE TOPICS FOR UPCOMMING MEETING: January 3, 2024
ADJOURNMENT
SUPPLEMENTAL INFORMATION
The materials below are provided for informational purposes, not for action or discussion during UAC Meetings (Govt. Code
Section 54954.2(a)(3)).
INFORMATIONAL REPORTS
12‐Month Rolling Calendar
Public Letter(s) to the UAC
PUBLIC COMMENT INSTRUCTIONS
Members of the Public may provide public comments to teleconference meetings via email,
teleconference, or by phone.
1. W r i t t e n p u b l i c c o m m e n t s m a y b e s u b m i t t e d b y e m a i l t o
UACPublicMeetings@cityofpaloalto.org.
2. Spoken public comments using a computer will be accepted through the
teleconference meeting. To address the Council, click on the link below 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 may 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 Clerk 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 will be accepted through the
teleconference meeting. To address the Council, download the Zoom application onto
your phone from the Apple App Store or Google Play Store and enter the Meeting ID
below. Please follow the instructions B‐E above.
4. Spoken public comments using a 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.
CLICK HERE TO JOIN Meeting ID: 966 9129 7246 Phone:1‐669‐900‐6833
Americans with Disability Act (ADA) It is the policy of the City of Palo Alto to offer its public
programs, services and meetings in a manner that is readily accessible to all. Persons with
disabilities who require materials in an appropriate alternative format or who require auxiliary
aids to access City meetings, programs, or services may contact the City’s ADA Coordinator at
(650) 329‐2550 (voice) or by emailing ada@cityofpaloalto.org. Requests for assistance or
accommodations must be submitted at least 24 hours in advance of the meeting, program, or
service.
1 Regular Meeting December 06, 2023
Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are
available for public inspection at www.CityofPaloAlto.org.
UTILITIES ADVISORY COMMISSIONRegular MeetingWednesday, December 06, 2023Council Chambers & Hybrid6:00 PMPursuant to AB 361 Palo Alto City Council meetings will be held as “hybrid” meetings with theoption to attend by teleconference/video conference or in person. To maximize public safetywhile still maintaining transparency and public access, members of the public can choose toparticipate from home or attend in person. Information on how the public may observe andparticipate in the meeting is located at the end of the agenda. Masks are strongly encouraged ifattending in person. The meeting will be broadcast on Cable TV Channel 26, live onYouTube https://www.youtube.com/c/cityofpaloalto, and streamed to Midpen MediaCenter https://midpenmedia.org.VIRTUAL PARTICIPATION CLICK HERE TO JOIN (https://cityofpaloalto.zoom.us/j/96691297246)Meeting ID: 966 9129 7246 Phone: 1(669)900‐6833PUBLIC COMMENTSPublic comments will be accepted both in person and via Zoom for up to three minutes or anamount of time determined by the Chair. All requests to speak will be taken until 5 minutesafter the staff’s presentation. Written public comments can be submitted in advance toUACPublicMeetings@CityofPaloAlto.org and will be provided to the Council and available forinspection on the City’s website. Please clearly indicate which agenda item you are referencingin your subject line.PowerPoints, videos, or other media to be presented during public comment are accepted onlyby email to UACPublicMeetings@CityofPaloAlto.org at least 24 hours prior to the meeting. Oncereceived, the Clerk will have them shared at public comment for the specified item. To upholdstrong cybersecurity management practices, USB’s or other physical electronic storage devicesare not accepted.TIME ESTIMATES
Listed times are estimates only and are subject to change at any time, including while the
meeting is in progress. The Commission reserves the right to use more or less time on any item,
to change the order of items and/or to continue items to another meeting. Particular items may
be heard before or after the time estimated on the agenda. This may occur in order to best
manage the time at a meeting or to adapt to the participation of the public.
CALL TO ORDER 6:00pm ‐ 6:05pm
AGENDA CHANGES, ADDITIONS AND DELETIONS 6:05pm ‐ 6:10pm
The Chair or Board majority may modify the agenda order to improve meeting management.
PUBLIC COMMENT 6:10pm ‐ 6:25pm
Members of the public may speak to any item NOT on the agenda.
APPROVAL OF MINUTES 6:25pm ‐ 6:30pm
1.Approval of the Minutes of the Utilities Advisory Commission Meeting Held on October
11, 2023
2.Approval of the Minutes of the Utilities Advisory Commission Meeting Held on November
1, 2023
UTILITIES DIRECTOR REPORT 6:30pm ‐ 6:45pm
NEW BUSINESS (a 10 minute break will be imposed during this section)
3.Staff Requests the Utilities Advisory Commission Recommend the City Council Approve
the Continuation of the Cross‐Bore Verification Program (ACTION 6:45pm – 7:45pm)
Staff: Aaron Perkins
4.Recommendation to Adopt a Resolution Approving an Amendment to the City’s 2009
California‐Oregon Transmission Project Long‐Term Layoff Agreement to Extend the City’s
Layoff of its Share of the California Oregon Transmission Project (COTP) until 2034 and
to Receive Annual Market Payments
5.S/CAP Strategic Plan on the Reliability and Resiliency for the Electric Distribution Utility
(ACTION 8:30pm – 9:30pm) Staff: Jonathan Abendschein
COMMISSIONER COMMENTS AND REPORTS FROM MEETINGS/EVENTS
FUTURE TOPICS FOR UPCOMMING MEETING: January 3, 2024
ADJOURNMENT
SUPPLEMENTAL INFORMATION
The materials below are provided for informational purposes, not for action or discussion during UAC Meetings (Govt. Code
Section 54954.2(a)(3)).
INFORMATIONAL REPORTS
12‐Month Rolling Calendar
Public Letter(s) to the UAC
PUBLIC COMMENT INSTRUCTIONS
Members of the Public may provide public comments to teleconference meetings via email,
teleconference, or by phone.
1. W r i t t e n p u b l i c c o m m e n t s m a y b e s u b m i t t e d b y e m a i l t o
UACPublicMeetings@cityofpaloalto.org.
2. Spoken public comments using a computer will be accepted through the
teleconference meeting. To address the Council, click on the link below 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 may 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 Clerk 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 will be accepted through the
teleconference meeting. To address the Council, download the Zoom application onto
your phone from the Apple App Store or Google Play Store and enter the Meeting ID
below. Please follow the instructions B‐E above.
4. Spoken public comments using a 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.
CLICK HERE TO JOIN Meeting ID: 966 9129 7246 Phone:1‐669‐900‐6833
Americans with Disability Act (ADA) It is the policy of the City of Palo Alto to offer its public
programs, services and meetings in a manner that is readily accessible to all. Persons with
disabilities who require materials in an appropriate alternative format or who require auxiliary
aids to access City meetings, programs, or services may contact the City’s ADA Coordinator at
(650) 329‐2550 (voice) or by emailing ada@cityofpaloalto.org. Requests for assistance or
accommodations must be submitted at least 24 hours in advance of the meeting, program, or
service.
2 Regular Meeting December 06, 2023
Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are
available for public inspection at www.CityofPaloAlto.org.
UTILITIES ADVISORY COMMISSIONRegular MeetingWednesday, December 06, 2023Council Chambers & Hybrid6:00 PMPursuant to AB 361 Palo Alto City Council meetings will be held as “hybrid” meetings with theoption to attend by teleconference/video conference or in person. To maximize public safetywhile still maintaining transparency and public access, members of the public can choose toparticipate from home or attend in person. Information on how the public may observe andparticipate in the meeting is located at the end of the agenda. Masks are strongly encouraged ifattending in person. The meeting will be broadcast on Cable TV Channel 26, live onYouTube https://www.youtube.com/c/cityofpaloalto, and streamed to Midpen MediaCenter https://midpenmedia.org.VIRTUAL PARTICIPATION CLICK HERE TO JOIN (https://cityofpaloalto.zoom.us/j/96691297246)Meeting ID: 966 9129 7246 Phone: 1(669)900‐6833PUBLIC COMMENTSPublic comments will be accepted both in person and via Zoom for up to three minutes or anamount of time determined by the Chair. All requests to speak will be taken until 5 minutesafter the staff’s presentation. Written public comments can be submitted in advance toUACPublicMeetings@CityofPaloAlto.org and will be provided to the Council and available forinspection on the City’s website. Please clearly indicate which agenda item you are referencingin your subject line.PowerPoints, videos, or other media to be presented during public comment are accepted onlyby email to UACPublicMeetings@CityofPaloAlto.org at least 24 hours prior to the meeting. Oncereceived, the Clerk will have them shared at public comment for the specified item. To upholdstrong cybersecurity management practices, USB’s or other physical electronic storage devicesare not accepted.TIME ESTIMATESListed times are estimates only and are subject to change at any time, including while themeeting is in progress. The Commission reserves the right to use more or less time on any item,to change the order of items and/or to continue items to another meeting. Particular items maybe heard before or after the time estimated on the agenda. This may occur in order to bestmanage the time at a meeting or to adapt to the participation of the public.CALL TO ORDER 6:00pm ‐ 6:05pmAGENDA CHANGES, ADDITIONS AND DELETIONS 6:05pm ‐ 6:10pmThe Chair or Board majority may modify the agenda order to improve meeting management.PUBLIC COMMENT 6:10pm ‐ 6:25pmMembers of the public may speak to any item NOT on the agenda.APPROVAL OF MINUTES 6:25pm ‐ 6:30pm1.Approval of the Minutes of the Utilities Advisory Commission Meeting Held on October11, 20232.Approval of the Minutes of the Utilities Advisory Commission Meeting Held on November1, 2023UTILITIES DIRECTOR REPORT 6:30pm ‐ 6:45pmNEW BUSINESS (a 10 minute break will be imposed during this section)3.Staff Requests the Utilities Advisory Commission Recommend the City Council Approvethe Continuation of the Cross‐Bore Verification Program (ACTION 6:45pm – 7:45pm)Staff: Aaron Perkins4.Recommendation to Adopt a Resolution Approving an Amendment to the City’s 2009California‐Oregon Transmission Project Long‐Term Layoff Agreement to Extend the City’sLayoff of its Share of the California Oregon Transmission Project (COTP) until 2034 andto Receive Annual Market Payments5.S/CAP Strategic Plan on the Reliability and Resiliency for the Electric Distribution Utility (ACTION 8:30pm – 9:30pm) Staff: Jonathan AbendscheinCOMMISSIONER COMMENTS AND REPORTS FROM MEETINGS/EVENTSFUTURE TOPICS FOR UPCOMMING MEETING: January 3, 2024ADJOURNMENT
SUPPLEMENTAL INFORMATION
The materials below are provided for informational purposes, not for action or discussion during UAC Meetings (Govt. Code
Section 54954.2(a)(3)).
INFORMATIONAL REPORTS
12‐Month Rolling Calendar
Public Letter(s) to the UAC
PUBLIC COMMENT INSTRUCTIONS
Members of the Public may provide public comments to teleconference meetings via email,
teleconference, or by phone.
1. W r i t t e n p u b l i c c o m m e n t s m a y b e s u b m i t t e d b y e m a i l t o
UACPublicMeetings@cityofpaloalto.org.
2. Spoken public comments using a computer will be accepted through the
teleconference meeting. To address the Council, click on the link below 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 may 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 Clerk 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 will be accepted through the
teleconference meeting. To address the Council, download the Zoom application onto
your phone from the Apple App Store or Google Play Store and enter the Meeting ID
below. Please follow the instructions B‐E above.
4. Spoken public comments using a 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.
CLICK HERE TO JOIN Meeting ID: 966 9129 7246 Phone:1‐669‐900‐6833
Americans with Disability Act (ADA) It is the policy of the City of Palo Alto to offer its public
programs, services and meetings in a manner that is readily accessible to all. Persons with
disabilities who require materials in an appropriate alternative format or who require auxiliary
aids to access City meetings, programs, or services may contact the City’s ADA Coordinator at
(650) 329‐2550 (voice) or by emailing ada@cityofpaloalto.org. Requests for assistance or
accommodations must be submitted at least 24 hours in advance of the meeting, program, or
service.
3 Regular Meeting December 06, 2023
Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are
available for public inspection at www.CityofPaloAlto.org.
UTILITIES ADVISORY COMMISSIONRegular MeetingWednesday, December 06, 2023Council Chambers & Hybrid6:00 PMPursuant to AB 361 Palo Alto City Council meetings will be held as “hybrid” meetings with theoption to attend by teleconference/video conference or in person. To maximize public safetywhile still maintaining transparency and public access, members of the public can choose toparticipate from home or attend in person. Information on how the public may observe andparticipate in the meeting is located at the end of the agenda. Masks are strongly encouraged ifattending in person. The meeting will be broadcast on Cable TV Channel 26, live onYouTube https://www.youtube.com/c/cityofpaloalto, and streamed to Midpen MediaCenter https://midpenmedia.org.VIRTUAL PARTICIPATION CLICK HERE TO JOIN (https://cityofpaloalto.zoom.us/j/96691297246)Meeting ID: 966 9129 7246 Phone: 1(669)900‐6833PUBLIC COMMENTSPublic comments will be accepted both in person and via Zoom for up to three minutes or anamount of time determined by the Chair. All requests to speak will be taken until 5 minutesafter the staff’s presentation. Written public comments can be submitted in advance toUACPublicMeetings@CityofPaloAlto.org and will be provided to the Council and available forinspection on the City’s website. Please clearly indicate which agenda item you are referencingin your subject line.PowerPoints, videos, or other media to be presented during public comment are accepted onlyby email to UACPublicMeetings@CityofPaloAlto.org at least 24 hours prior to the meeting. Oncereceived, the Clerk will have them shared at public comment for the specified item. To upholdstrong cybersecurity management practices, USB’s or other physical electronic storage devicesare not accepted.TIME ESTIMATESListed times are estimates only and are subject to change at any time, including while themeeting is in progress. The Commission reserves the right to use more or less time on any item,to change the order of items and/or to continue items to another meeting. Particular items maybe heard before or after the time estimated on the agenda. This may occur in order to bestmanage the time at a meeting or to adapt to the participation of the public.CALL TO ORDER 6:00pm ‐ 6:05pmAGENDA CHANGES, ADDITIONS AND DELETIONS 6:05pm ‐ 6:10pmThe Chair or Board majority may modify the agenda order to improve meeting management.PUBLIC COMMENT 6:10pm ‐ 6:25pmMembers of the public may speak to any item NOT on the agenda.APPROVAL OF MINUTES 6:25pm ‐ 6:30pm1.Approval of the Minutes of the Utilities Advisory Commission Meeting Held on October11, 20232.Approval of the Minutes of the Utilities Advisory Commission Meeting Held on November1, 2023UTILITIES DIRECTOR REPORT 6:30pm ‐ 6:45pmNEW BUSINESS (a 10 minute break will be imposed during this section)3.Staff Requests the Utilities Advisory Commission Recommend the City Council Approvethe Continuation of the Cross‐Bore Verification Program (ACTION 6:45pm – 7:45pm)Staff: Aaron Perkins4.Recommendation to Adopt a Resolution Approving an Amendment to the City’s 2009California‐Oregon Transmission Project Long‐Term Layoff Agreement to Extend the City’sLayoff of its Share of the California Oregon Transmission Project (COTP) until 2034 andto Receive Annual Market Payments5.S/CAP Strategic Plan on the Reliability and Resiliency for the Electric Distribution Utility (ACTION 8:30pm – 9:30pm) Staff: Jonathan AbendscheinCOMMISSIONER COMMENTS AND REPORTS FROM MEETINGS/EVENTSFUTURE TOPICS FOR UPCOMMING MEETING: January 3, 2024ADJOURNMENTSUPPLEMENTAL INFORMATIONThe materials below are provided for informational purposes, not for action or discussion during UAC Meetings (Govt. CodeSection 54954.2(a)(3)).
INFORMATIONAL REPORTS
12‐Month Rolling Calendar
Public Letter(s) to the UAC
PUBLIC COMMENT INSTRUCTIONS
Members of the Public may provide public comments to teleconference meetings via email,
teleconference, or by phone.
1. W r i t t e n p u b l i c c o m m e n t s m a y b e s u b m i t t e d b y e m a i l t o
UACPublicMeetings@cityofpaloalto.org.
2. Spoken public comments using a computer will be accepted through the
teleconference meeting. To address the Council, click on the link below 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 may 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 Clerk 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 will be accepted through the
teleconference meeting. To address the Council, download the Zoom application onto
your phone from the Apple App Store or Google Play Store and enter the Meeting ID
below. Please follow the instructions B‐E above.
4. Spoken public comments using a 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.
CLICK HERE TO JOIN Meeting ID: 966 9129 7246 Phone:1‐669‐900‐6833
Americans with Disability Act (ADA) It is the policy of the City of Palo Alto to offer its public
programs, services and meetings in a manner that is readily accessible to all. Persons with
disabilities who require materials in an appropriate alternative format or who require auxiliary
aids to access City meetings, programs, or services may contact the City’s ADA Coordinator at
(650) 329‐2550 (voice) or by emailing ada@cityofpaloalto.org. Requests for assistance or
accommodations must be submitted at least 24 hours in advance of the meeting, program, or
service.
4 Regular Meeting December 06, 2023
Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are
available for public inspection at www.CityofPaloAlto.org.
Item No. 1. Page 1 of 1
Utilities Advisory Commission
Staff Report
From: Dean Batchelor, Director Utilities
Lead Department: Utilities
Meeting Date: December 6, 2023
Staff Report: 2310-2143
TITLE
Approval of the Minutes of the Utilities Advisory Commission Meeting Held on October 11, 2023
RECOMMENDATION
Recommended Motion
Staff recommends that the UAC consider the following motion:
Commissioner ______ moved to approve the draft minutes of the October 11, 2023 meeting as
submitted/amended.
Commissioner ______ seconded the motion.
ATTACHMENTS
Attachment A: 10-11-2023 DRAFT UAC Minutes
AUTHOR/TITLE:
Jenelle Kamian, Program Assistant I
Item #1
Packet Pg. 5
Utilities Advisory Commission Minutes Approved on: Page 1 of 12
UTILITIES ADVISORY COMMISSION MEETING
MINUTES OF OCTOBER 11, 2023 SPECIAL MEETING
CALL TO ORDER
Chair Segal called the meeting of the Utilities Advisory Commission (UAC) to order at 6:02 P.M.
Present: Chair Segal, Vice Chair Scharff, Commissioners Croft, Forssell, Metz, and Phillips
Absent: Commissioner Mauter
AGENDA REVIEW AND REVISIONS
None
ORAL COMMUNICATIONS
Jerry Smith asked if the fiber project would be discussed in this meeting.
Dean Batchelor, Utilities Director, responded that the Finance Committee would discuss fiber and
the grid modernization projects together on November 7th.
Hamilton Hitchings was concerned about mitigating risk to the fiber hut and felt City Hall would
be unsafe in the case of a large earthquake. With an estimated 20% chance of a 7.5 earthquake
in the Bay Area in the next 30 years, placing the fiber hut inside City Hall creates a 20% chance
risk of losing half the fiber network indefinitely. He suggested other locations for the fiber hut
that would be accessible after a major earthquake.
APPROVAL OF THE MINUTES
ITEM 1: ACTION: Approval of the Minutes of the Utilities Advisory Commissioner Meeting Held
on September 6, 2023
Chair Segal invited comments on the September 6, 2023, UAC draft meeting minutes. There were
no changes.
ACTION: Commissioner Croft moved to approve the draft minutes of the September 6, 2023,
meeting as submitted.
Commissioner Phillips seconded the motion.
Item #1
Packet Pg. 6
Utilities Advisory Commission Minutes Approved on: Page 2 of 12
The motion carried 6-0 with Chair Segal, Vice Chair Scharff, Commissioners Croft, Forssell, Metz,
and Phillips voting yes.
Commissioner Mauter absent.
UNFINISHED BUSINESS
None
UTILITIES DIRECTOR REPORT
Dean Batchelor, Utilities Director, delivered the Director's Report.
Council Decision Regarding Winter 2023-2024 Gas Purchasing: City Council, at its regular
meeting on September 18, 2023, adopted a resolution which will modify the gas purchasing
strategy for this upcoming winter. Staff will implement the capped-price winter natural gas
purchasing strategy in October 2023 for the gas year November 2023-October 2024. The
amended rate schedules associated with this implementation will be effective November 1, 2023.
The impact on customers of what is, in essence, an insurance policy will be limited to 15 cents
per therm. The full Staff Report for is HERE.
Text Messaging for Enhanced Outage Communication: CPAU’s new power Outage Management
System now provides mobile texting with customers for outage alerts and status updates. We
encourage utility customers to log into their MyCPAU account or contact Customer Service
directly to ensure we have the best number to effectively communicate in the event of an
unplanned or planned utilities service disruption. Find information on outages and mobile
texting at cityofpaloalto.org/outages
Residential Electric and Water Customer Satisfaction Surveys: CPAU is participating as a
member of the California Municipal Utilities Association (CMUA) in customer satisfaction surveys
for residential electric and water customers. CMUA’s contractor, GreatBlue Research, completed
a statewide survey last month of municipal and investor-owned utilities customers so we can
benchmark trending results across the state. We are now about to begin what is called an
“oversample” survey of Palo Alto residents so we can gain greater insight into some specific areas
of interest in Palo Alto. We will also retain very similar questions to the statewide surveys for
comparison purposes. If you receive a survey from GreatBlue Research, we appreciate you taking
the time to answer the questions!
Advanced Metering Infrastructure (AMI) Update: By now every commissioner should have an
advanced meter (AMI) installed at their home. We invite you to share your feedback with us.
AMI is an important component of our customer service and technology offerings to provide
better and more timely information on energy and water usage. Learn more at
cityofpaloalto.org/AMI
Item #1
Packet Pg. 7
Utilities Advisory Commission Minutes Approved on: Page 3 of 12
Sanitary Sewer Replacement Project 31: Earlier this summer, CPAU began Sanitary Sewer
Replacement Project 31 which involves replacing sanitary sewer pipelines along sections of El
Camino Real and Page Mill Road. Work in these streets is governed by Caltrans and the County
who require daytime and nighttime work to minimize impacts to residents, businesses, and major
traffic corridors. The project is scheduled to be complete by summer of 2024. During October
through December, daytime work will be performed on El Camino and night work (8:30 P.M. to
5:00 A.M.) will be performed on Page Mill Road from El Camino Real to Ash Street. This will be a
major undertaking and we wish to thank the public in advance for their patience during the
nighttime work. The City set up a webpage with information about the project (visit
cityofpaloalto.org/utilityprojects), a weekly newsletter to share updates, dedicated email inbox
and phone number for community members to contact us with any questions or concerns.
Wooden Utility Pole Inspections: CPAU is inspecting, testing, and reinforcing utility poles in our
service area. We have contracted with company Osmose to perform this work on public streets
and private property over a three-year period. The inspections begin this month and are
expected to be complete by December 2026. Utility project information can be found at
cityofpaloalto.org/utilityprojects
Increasing Load with Tesla: City engineers are working with Tesla for additional load, expected
to come online sometime in 2024 at the Hanover Substation, which is in a design and install phase
right now. Staff is also working out the details of a public-private partnership with Tesla and will
bring it to Council in the coming months. It is mostly a data center, but they are also testing
different charging systems and bringing in large charging systems for large transportation trucks.
The partnership is inside the substation portion of the project, upgrading a transformer with
economy of scales.
Public Power and Natural Gas Week Campaigns: Last week we highlighted two national
campaigns to raise awareness about the benefits of public utilities. Staff promoted Public Power
and Public Natural Gas Week in our communication channels. Some customers may question
why we are highlighting natural gas, considering our sustainability goals to transition from fossil
fuels to clean electricity for buildings and transportation. We continue to talk about natural gas
and our natural gas utility employees as we still own, operate and maintain a gas system in Palo
Alto. It is imperative that we continue to safely operate and maintain this system if customers
are still connected to gas.
Recent and Upcoming Workshops and Events: Details and registration at
cityofpaloalto.org/workshops
• October 5: New Models and Inside Tips for Going EV
• October 11: e-Bike Essentials Workshop (e-Bike discount campaign is available through end
of 2023)
• October 12: SunShares Discount Solar and Battery Storage Program Webinar.
• October 14: EV Expo at the Electric Home Tour
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• October 22: Sustainability Faire at Congregation Beth Am
• October 25: Heat Pump Water Heater Day – a campaign the City will promote
• October 28: Succulent Gardening Workshop at Rinconada Library
• October 29: Frunk and Treat EV Expo at the California Ave. Farmers Market
NEW BUSINESS
ITEM 2: ACTION: Utilities Advisory Commission Recommendation that the City Council Adopt a
Resolution Approving the 2023 Integrated Resource Plan
PUBLIC COMMENT:
Hamilton Hitchings stated that he is in the process of electrifying his house and noted that his
utility bill said 50% of the power was retired unbundled RECs. He explained the problem with
RECs is that you are not burning less fossil fuels or generating more renewable, which is why they
are so cheap. He stated unbundled RECs are often considered "greenwashing," essentially not
really green. He recommended moving away from unbundled RECs to things like hydro.
Jim Stack, PhD, Senior Resource Planner, discussed the background of an Integrated Resource
Plan, a long-term plan forecasting electric demand and how to satisfy it with a portfolio of supply-
and demand-side resources. The key reason for an IRP is to demonstrate the City is on track to
help the State meet its greenhouse gas reduction and renewable procurement targets. Other
things accounted for in the plan are minimizing ratepayer bills, ensuring system and local
reliability, procuring energy efficiency and demand response, energy storage, and planning for
transportation electrification. He displayed a chart showing the resources the recommended
portfolio indicates should be added in the coming years, with solar added through the 2030s and
also battery capacity in the 2040s. The actual resources that will be contracted for in the future
will depend on market conditions, how existing resources change over time, as well as the
proposals received when the City decides to buy new resources.
Commissioner Phillips questioned what other types of resources were available to consider.
Dr. Stack responded that a wide variety of resources that are available now or expected to be
available during the planned period were considered, including geothermal, biomass, offshore
wind, and small modular nuclear reactors.
Vice Chair Scharff questioned if other public utility plans are the same.
Dr. Stack stated other public utilities' resource needs in the future look relatively close to this.
Some of their plans include adding storage a little earlier; some of them include different types
of resources.
Commissioner Phillips was surprised to see solar given there seems to be too much solar on the
system at certain times.
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Dr. Stack stated there is a greater move toward broader regional integration of the grid and the
ability to export solar out to other areas more rather than just curtailing it, which might mitigate
those trends.
Commissioner Croft questioned whether there was any thinking in the model about where the
energy purchased for the shoulder periods was coming from, preferring stored solar power to
power generated by natural gas.
Dr. Stack explained that when buying market power from the grid due to a deficit, the current
carbon neutral plan factors in that that power is "dirtier" than during surplus periods. The IRP
does not take that into account. It does a projection of the value of the generation in each hour
compared to its cost and the value of the resource adequacy from it.
Commissioner Croft asked if it was possible to do analysis to match the energy supply with the
load requirements in terms of price.
Dr. Stack noted there was also separate modeling being done to try to come up with a better
match between the load and the resources. That is still a work in progress.
Commissioner Forssell questioned how the different options were priced in the model and asked
about the availability of geothermal and landfill gas and extending those contracts when they
expire.
Dr. Stack showed a slide of the prices used in the model.
Lena Perkins, PhD, Senior Resource Planner, added that there is a lot of market projection in the
model, with assumptions in terms of battery growth and volatility of prices. She also noted there
are 6 GW of batteries in California compared to 200 MW 4 years ago. There are assumptions
that batteries are coming online, which will help in the evening ramp period. Collierville is also a
very dispatchable resource. Pumped hydro is currently seasonal storage because the pumps are
not cycled very often, but there are investigations on whether it may be worth upgrading the old
pumps so they can actually be cycled more frequently.
Chair Segal asked if power purchased on the open market was projected to get cleaner over time.
Dr. Perkins explained Palo Alto is actually net clean especially on the margins, close to 90% on an
hourly basis in average hydro years, which does not show up in the power content label because
of the arbitrage. There are valid concerns about out-of-state RECs, but in general, other states
are also taking on very aggressive RPS requirements. Ideally, those would converge.
Dr. Stack added that extending the existing contracts when they expire was a possibility that
would be discussed with the suppliers. He displayed a slide on the long-term energy balance for
the recommended portfolio. The load is projected to increase substantially in the coming years,
with some holes in the portfolio to fill. He also showed the projected long-term RPS compliance,
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leveling out around 60% in 2030 and exceeding the state’s requirement level. He presented a
slide of the monthly load resource balance for 2025 and 2045. The recommended portfolio
continues the seasonal pattern of surplus/deficit positions, which will be considered when doing
the procurement as there are advantages to better matching the load and resources.
Vice Chair Scharff asked why just buying more solar and more storage would not match it. He
asked what base resource would bring it up in the winter.
Dr. Stack explained that storage is charged and discharged within the day and would not do
anything seasonally to affect the summer and winter disparities. Dramatically over-procuring
and using storage to match it hourly could be done but would be expensive. He noted there were
complementary resources like out-of-state wind that produce more in the winter than summer.
Dr. Perkins noted wind at competitive prices was considered. The unpredictability of wind hurts
its value. The inflexibility of base load resources in the middle of the day would lose money;
whereas solar will create negative prices even in December and January.
Commissioner Croft questioned if this mirrored what was going on in California and what the
solution was if everyone wants the same resources.
Dr. Stack stated the State was pushing for offshore wind to be developed and more connections
between California and the rest of the West will help.
Dr. Perkins explained that interconnection is important, with a west-wide regional transmission
organization as a central planner to make use of existing transmission as efficiently as possible.
California is 20% hydro and Palo Alto 60% hydro with more base load, so not the same issues.
Commissioner Croft encouraged looking into pumped hydro. She asked if the analysis of the cost
of storage, last done in 2020, was being done this year and was part of this planning.
Dr. Perkins responded that that requirement was rolled into the IRP and was evaluated as part
of this. She explained that pumped hydro was extremely rare and expensive. The Western Area
Power Administration is looking into using the San Luis Reservoir in tandem with batteries for
seasonal storage and lowering the exposure to market volatility within the day as well.
Commissioner Phillips asked if hydrogen had been considered in non-battery storage.
Dr. Stack answered that hydrogen was not included in this mix but is being very actively pursued
by the Northern California Power Agency, and Staff will be looking into that with them.
Chair Segal asked how much cost was weighted when running the models and how much price
was the barrier in weighting more for some kind of clean energy for the half the year that solar
is not sufficient.
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Dr. Stack stated price was the factor that caused the model to choose more solar rather than
geothermal or offshore or out-of-state wind.
Dr. Perkins explained that it was always better to have flexible resources. Hydrogen is expensive,
and the projects being evaluated by the NCPA are 10% hydrogen and 90% natural gas by energy,
with a 50/50 split by volume. She stated she believes price is a signal of what the grid needs, and
helping the grid in what it needs and having a flexible portfolio means bringing everyone along
for electrifying everything.
Commissioner Phillips asked what demand response is and why it is not in the chart.
Dr. Stack explained that demand response was not selected under the base portfolio but it was
on another scenario. Demand response is essentially calling on larger commercial customers to reduce
usage during certain periods, but it is a minimal benefit compared to the overall needs. He explained the
scenarios look at different hydro outcomes as that is 50% to 60% of the portfolio and the biggest source
of uncertainty. The four scenarios were the base case (recommended portfolio), reduced hydro output
for regulatory reasons, dry year/high prices, wet year/low prices. The model showed similar
recommendations for both the dry and wet year scenarios. The second scenario suggested adding
renewable and new storage capacity earlier, as well as adding wind in one year. He felt it was unlikely
that the City would be able to react quickly enough to potential adverse changes to get a resource in place
by 2025.
Dr. Perkins explained that that scenario would be the outcome of extended relicensing or federal
action, long processes with 2 to 3 years of lead time.
Vice Chair Scharff asked whether the model assumed restriction now and what was put into the
model that led it to suggest 2025, as there is nothing like that on the horizon right now.
Dr. Perkins stated this was more of a worst-case scenario but was still useful to see the net cost
impacts of forcing the model into a capacity deficit.
Dr. Stack showed a chart of the average financial performance of each model. He noted the mark
to market, which represents the value of the overall portfolio compared to its cost. The base
case has slightly more value than its cost; the dry and wet year scenarios, the mark to market
actually increases; the reduced hydro scenario, which assumes the same hydro contracts even
with the regulatory risk, has a negative mark to market. He also explained the risk premium, with
the highest risk being the dry year scenario. He then reviewed the overall findings of the IRP.
Under the base case, Western looks competitive. The model picks low-cost resources (solar) and
also storage in later years. Solar is not the best fit for matching the load and increases market
exposure. Other resources will be considered during procurement. Demand-side resources are
also competitive. City loads are expected to increase and resource costs expected to decrease,
so there should be new procurement in the coming years. He explained the timeline going
forward.
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Commissioner Forssell asked what happens after this is submitted to the CEC.
Dr. Stack stated the CEC staff reviews each IRP when they receive it. They can request
adjustments or additional analysis or information if they find any shortfalls. The plan will be
updated every 5 years. There will be updated analysis any time a new resource needs to be
procured.
Commissioner Forssell noted a program at Green Mountain Power for utility customers to host a
Power Wall battery, regarding demand response. There was further discussion about this.
Commissioner Metz felt the plan needed to be redone. He understood there were regulatory
constraints related to the RPS but wanted the published plan to be a real one if this was not what
would likely end up being procured. He stated the grid has to balance the amount of energy that
goes in and out and felt the plan did not work technically or economically in terms of generating
energy when it is convenient and taking energy out at other times. He was concerned about
being forced to load match over the long term. He felt central solar costs were likely to be much
higher than estimated because interest rates will stay up for a long time and the value of solar
would be lower, making it less favorable. He recommended grabbing all the hydro and
geothermal possible and not losing the existing contracts, as well as intensifying efforts on energy
conservation and demand management. He stated the approach of making short-term market
purchases to make up the gaps was the approach that caused trouble with gas this past winter.
Dr. Perkins explained that the California-Oregon Intertie was one of the strongest
interconnections and a natural hydrologic hedge. Regarding concerns of free riding, Palo Alto is
exporting solar and turning off other dirty resources more broadly, bringing cost down for
everyone. Now that the surrounding states have renewable portfolio standards, the imports are
also cleaner and cleaner. There was some discussion about this.
Vice Chair Scharff stated he supported the plan because he was confident in the deep knowledge
of Dr. Stack and Dr. Perkins and the work they have done on this plan.
Commissioner Croft asked if it would make sense to have a scenario showing what the portfolio
would look like if hourly matching was attempted.
Dr. Stack stated that hourly matching is a subset of the base case but optimized toward meeting
the load rather than around price and emissions reductions.
Dr. Perkins added that the existing portfolio is at 88% hourly matching already. She stated that
a discussion about hourly matching should be kept separate from the IRP.
Commissioner Phillips supported the plan with reservations. The consistent messaging is that we
are carbon neutral, which gets incorrectly interpreted by the public as saying any added
electricity is carbon neutral. He felt the communications were misleading.
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Dr. Perkins agreed it was a hard line to walk and that even renewable energy is not without cost
to the environment.
Chair Segal supported the plan. This is a government reporting obligation and does not commit
to a certain portfolio or process. There has been consistent feedback from commissioners on
what they would like to see going forward. Noting Commissioner Phillips' concern about
messaging, she felt it might be time for another conversation about how to keep customers
apprised.
Commissioner Croft stated the graph changes over time but always has months that are negative.
She asked why the graphs did not show what it would look like to spread the hydro in a way that
would accurately match.
Dr. Perkins explained that shaping hydro in a way that loses money and actually emits more
carbon on the margin to line up the hours was not something that had ever been considered.
Hydro keeps off natural gas plants, lowering emissions. Following the load with the hydro, the
natural gas plants would have to be on even more to serve the market load.
Commissioner Forssell added that she learned a lot this evening and has more comfort that what
the model is predicting could be the best for Palo Alto and the grid as well as removing carbon
emissions from the larger system.
ACTION: Commissioner Scharff move to approve Staff recommendation that the Utilities
Advisory Committee (UAC) recommend that the City Council adopt a resolution (Attachment A):
1. Approving the 2023 Electric Integrated Resource Plan (IRP) (Attachment B), which
includes the four standardized tables required under the California Energy Commission’s
(CEC) IRP Guidelines; and
2. Approving the IRP Objective and Strategies to guide future analysis and decisions
(Attachment C).
Commissioner Croft seconded the motion.
The motion carried 5-1 with Chair Segal, Vice Chair Scharff, Commissioners Croft, Forssell, and
Phillips, voting yes.
Commissioner Metz voting no.
Commissioner Mauter absent.
The UAC took a break at 8:12 pm and returned at 8:24 pm.
ITEM 3: DISCUSSION: Update and Discussion on Undergrounding of the Electrical Distribution
System and Electrification Goals
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PUBLIC COMMENT:
Hamilton Hitchings supported Staff's position on undergrounding. He agreed with the City's
current policy of undergrounding wires in selected areas and noted that insulating wires to
mitigate wildfire risk is many times less expensive than undergrounding. He felt it should be put
to a ballot if it is planned to incur $½B cost to underground.
Tomm Marshall, Assistant Director of Utilities Electric Engineering and Operations, reviewed the
current underground policy and reviewed some utility statistics related to undergrounding, with
about 18,000 housing units that would need to be undergrounded. He presented the rough costs
of undergrounding, $645M to $990M total, taking 18 years at 1000 homes per year. The City
Council's SCAP goal is to achieve wide-scale electrification by 2030; to underground at the same
time would delay electrification upgrades to 2041. He showed a map of the underground
conversion project. The green is on the map is what is in the plan; the gray areas were
undergrounded when they were installed.
Commissioner Phillips asked what the public communication on this has been. He stated some
people have an expectation that Palo Alto is going ahead with undergrounding while this suggests
most of it will not get undergrounded in our lifetime.
Mr. Marshall stated it was always expected to be 40-50 years and did not think the message had
changed but felt there was interest from the community. It would take a policy change to move
it a lot faster.
Commissioner Croft asked about the cross section of an undergrounded segment. She
questioned whether the conduit was accessed often on an ongoing basis. She asked if the
trenches would have to be dug up for the grid modernization project.
Mr. Marshall explained that in the street will be primary and secondary conduits, vaults they pass
through, and telephone and cable TV in their own conduits. Once installed, it is not touched very
often unless some major development happens. Existing conduits would be used where possible,
but there could be some trenching or the need to install a new vault or put a pad-mounted
transformer somewhere to add additional capacity in the neighborhoods.
Council Member Lauing questioned the phrase "property owners must construct the service
infrastructure." He felt the report was very informative in that it explains the priorities and the
much greater need of having to redo the grid and get the city electrified.
Mr. Marshall explained that the City only constructs the utility infrastructure in the street area. The
Customer would have to trench from their meter location out to the box in the street. The way the
program is set up today is that is paid by the customer. It can run between $4000 and $10,000.
Dean Batchelor, Utilities Director, added that the plan is to go to Council with discussion on
whether Council wants to change the policies and/or priorities.
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Commissioner Croft asked for clarification on the sentence, "In the long term the coordination of
undergrounding and electrification could result in savings of between $150M and 220M due to
elimination…" She asked where the savings comes from.
Mr. Marshall explained it was from avoiding having to upgrade the overhead system.
Chair Segal questioned the survey of poles noted in the report as there had been a recent survey
by Magellan. She noted a November 2011 Finance Committee report that talked about a public
opinion survey about undergrounding; she wondered what had happened with that.
Mr. Marshall explained the poles were tested to see if they were rotten or needed to be treated
in the field. About a tenth of the system is done each year, and the poles go onto a replacement
list if they are rotten. The recent survey with Magellan looked at the conductors on the poles.
He explained that when forming an underground district, a survey will be done in the
neighborhood to see if there is interest, with the information typically going back to Council at
the time of formation of the district. He thought that might be what was referred to.
Commissioner Croft asked why the green sections are scheduled for undergrounding.
Mr. Marshall explained the green areas are areas believed to qualify under the CPUC rules
requiring AT&T to pay a portion of the costs in the underground district, making it lower cost for
the City. He explained there are ways for them to go through an assessment district process to
form underground districts, but it is very rare.
ACTION: None
COMMISSIONER COMMENTS AND REPORTS FROM MEETINGS/EVENTS
None
FUTURE TOPICS FOR UPCOMING MEETINGS:
Commissioner Forssell suggested a discussion topic on 24/7 load following, which could be
agendized for a future meeting if there was interest in recommending a policy.
Commissioner Metz additionally wanted to address distributed energy resources, demand
management, storage, all the possibilities that flow from having to match load.
Commissioner Phillips suggested discussing gas hedging.
Dean Batchelor, Utilities Director, stated gas hedging would be added to either the November
meeting or the beginning of next year.
Commissioner Metz also suggested grid modernization connected with some of those topics,
including discussion of the $300M cost.
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Commissioner Croft stated it was mentioned at the last meeting talking to contractors that could
do that together with fiber. She asked if the plan comes before talking to the contractors or as a
result of that.
Mr. Batchelor believed the costs had been discussed, with that $300M for design, equipment,
labor, and upgrades to substations. The fiber and grid mod projects will be running parallel at
this point, and this could be discussed in December alongside the SCAP discussion.
Commissioner Croft stated there is a figure 2 in the DSM that talks about the composition of net
electric efficiency savings in fiscal year 2022 and the majority comes from nonresidential lighting.
She was interested in more about the segments using the electricity to determine efficiency
targets. She asked if there was a way the City could help people understand how to improve the
envelope of a house. The Genie did not address that part of it. She had suggestions on what to
do within her house but did not know how to take the next step and wondered if the City had
ways to make that easier.
Mr. Batchelor stated it could be a discussion item or a report to the entire Commission.
Commissioner Croft was happy to have a discussion with Staff and report back to the Commission
if she learned anything important to share.
NEXT SCHEDULED MEETING: November 1, 2023
Vice Chair Scharff moved to adjourn.
Commissioner Phillips seconded the motion.
Motion carries 6-0 with Vice Chair Scharff, Vice Chair Scharff, Commissioners Croft, Forssell, Metz
and Phillips voting yes.
Commissioner Mauter absent.
Meeting adjourned at 9:00 p.m.
Respectfully Submitted
Jenelle Kamian
City of Palo Alto Utilities
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Item No. 2. Page 1 of 1
Utilities Advisory Commission
Staff Report
From: Dean Batchelor, Director Utilities
Lead Department: Utilities
Meeting Date: December 6, 2023
Staff Report: 2311-2212
TITLE
Approval of the Minutes of the Utilities Advisory Commission Meeting Held on November 1,
2023
RECOMMENDATION
Staff recommends that the UAC consider the following motion:
Commissioner ______ moved to approve the draft minutes of the November 1, 2023 meeting
as submitted/amended.
Commissioner ______ seconded the motion.
ATTACHMENTS
Attachment A: 11-01-2023 DRAFT UAC Minutes
AUTHOR/TITLE:
Jenelle Kamian, Program Assistant I
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UTILITIES ADVISORY COMMISSION MEETING
MINUTES OF NOVEMBER 1, 2023 REGULAR MEETING
CALL TO ORDER
Chair Segal called the meeting of the Utilities Advisory Commission (UAC) to order at 6:02 p.m.
Present: Chair Segal, Commissioners Croft, Forssell, Mauter (joined virtually, arrived 6:05 pm),
Metz and Phillips
Absent: Vice Chair Scharff
AGENDA CHANGES, ADDITIONS AND DELETIONS
None
PUBLIC COMMENT
None
APPROVAL OF MINUTES
None
UTILITIES DIRECTOR REPORT
Dean Batchelor, Utilities Director, delivered the Director's Report.
Department of Energy Grant Applications for Electrification Infrastructure Upgrades: Earlier this year,
staff submitted two grant applications to the Department of Energy’s (DOE) Grid Resilience and
Innovation Partnerships (GRIP) program for electric grid modernization and Advanced Metering
Infrastructure (AMI). The City did not receive the $110M grant or the $400,000 Buildings Upgrade prize
for affordable housing electrification. This month, the City will receive a letter from DOE explaining why
they denied the grants. Staff will reapply for grants in 2024.
New Limited Time Price Adjustments for Heat Pump Water Heaters: The Heat Pump Water Heater
(HPWH) program has limited-time price adjustments thanks to additional funding through TECH Clean
California. TECH is a statewide initiative accelerating the adoption of clean water and space heating
technology to help California meet its goal of being carbon-neutral by 2045. For a limited time, residents
can receive higher rebates and discounts on HPWH installations. If you hire your own contractor, you
can receive $1,500 from the City and up to $3,800 from the State for a total rebate of $5,300. The full-
service program offers a standard 65-gallon HPWH installation for $1,900 and up to $1,500 in credit
toward site preparation costs (including permits). This discounted pricing is available for six months;
after that, the City will offer smaller discounts until State TECH funding runs out. To learn more, go to
www.cityofpaloalto.org/switch or call (650) 713-3411.
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Heat Pump Water Heater Day Campaign: October 25 was Heat Pump Water Heater Day, a day
dedicated to HPWH education and awareness. Residents were encouraged to take a picture with a
HPWH and share it on social media using hashtags #PaloAltoHPWHselfie and #HeatPumpItUp. There is a
display in the City Hall lobby.
Water Supply and Hydro Conditions: Scientists predict a strong El Nino this year, which may result in
wetter weather for the watersheds providing hydroelectric generation and water supply to Palo Alto.
October 1 was the start of the water year and staff will provide updates throughout the winter.
Energy Prices: Compared to this time last year, in-state gas storage is better. Forward gas prices have
decreased to about $2/MMBtu, so staff anticipated winter gas bills and wholesale electric costs to be in
the normal range. In accordance with Council direction, staff purchased insurance against higher prices
for December through February. Staff will provide more details under New Business.
Upcoming Events: Details and registration at cityofpaloalto.org/workshops
•November 2: Edible Gardening Online Workshop
•November 11: Multilingual EV Financial Incentives Clinic with EV Expo at Mitchell Park
•November 16: EV Charging Online Workshop
•December 2: EV 102 Online Workshop
NEW BUSINESS
ITEM 1: DISCUSSION: Discussion of Utilities Annual Report for FY2023
Telecom manager interviews took place today and should conclude tomorrow. The position was in the
budget for about six years. The fiber pilot is waiting for CEQA and coordination with grid modernization.
The last SEIU contract provided compensation for hard-to-fill positions. The City had four linemen last
year. Since January 2023, six linemen were hired. A system operator will start on 11/13/2023. There
were five full operators and one operator in training. CPAU will move to 24/7 operator coverage instead
of relying on PD’s assistance. CPAU was considering 24/7 on weekends and/or holidays. The new OMS
system was working well. The OMS provides operators with outage maps.
Dean Batchelor, Utilities Director, expressed his concern about two open senior engineer positions.
Approximately one year ago, CPAU hired three engineers from college who have been learning quickly.
A fully trained engineer left a couple months ago and staff wanted to fill that position with a senior
engineer. An electric manager with about 27 years of experience was recently hired.
Staff planned to analyze employee surveys and share the results with the UAC but they are behind in
that process. A little over 100 employees (about half of the 210 filled positions) took the survey.
Mr. Batchelor addressed the Commission’s questions regarding Capital Improvement Plans on Packet
Page 13. In the middle of October, CPAU contracted with VIP, a dock crew from Canada, for the East
Meadow Circuit 4 to 12 kV conversion project related to grid modernization. VIP will initially work on 50
poles. Magellan was bought by ENTRUST, an electric design house. CPAU is working with ENTRUST
because they have detailed information on our fiber design and can easily overlay it onto the electric
design. Related to grid modernization is the replacement of about 1300 wood poles from East Bayshore
to Alma due to age or not enough space to add fiber. The replacement of a 60 kV breaker was for an
update unrelated to grid modernization.
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About half of the 11 miles of Foothill undergrounding was completed and switched to the underground
system with fiber in the conduits. CPAU can switch power to the overhead line in an emergency. Staff
expected this project to be completed and the overhead de-energized by late spring or early summer
2024. The lowest bidder to design and build this project was $25M. To date, the City spent $1.3M
performing the work in-house and using a contractor for the dirt work of installing conduit. Staff
estimated the total cost for this project would be about $3M.
Regarding the electricity bill comparison in Figure 3 on Packet Page 14, Commissioner Phillips asked if
there were rates for average commercial use to compare CPAU’s rates with PG&E and Santa Clara. Eric
Wong, Resource Planner, explained it was difficult to find averages for commercial customers because
of variabilities in customer types and sizes. For gas, commercial customers generally paid more
compared to PG&E. For electricity, Mr. Wong was not sure but staff would try to include it in future
reports.
Karla Dailey, Acting, Assistant Director Resource Management, addressed Commissioner Phillips’s query
as to why Santa Clara was 30% to 50% less than CPAU. One reason was Santa Clara’s customer base
included many large commercial loads that are less expensive to serve and require fewer connections.
In response to the Commission’s questions about more outages occurring in 2022 than 2023, Mr.
Batchelor replied there were many outages in 2021 and 2022 partly due to less tree trimming. The
majority of last year’s outages were due to trees but also some electrical pieces failed. Staff took a
proactive approach in 2023 and trimmed as many trees as possible.
Commissioner Metz asked about problems with Heat Pump Water Heater (HPWH) installations. Ms.
Dailey explained that Palo Alto had many older and unique homes requiring nonstandard installations.
Commissioner Metz expressed his concern that electrification was expensive and energy intensive. Ms.
Dailey thought we as a community needed to address it. CPAU will apply lessons learned from the
HPWH program to design future programs for whole-home electrification.
Chair Segal read from the packet about some of the challenges of HPWH installations (long circuit runs,
electrical panels without additional capacity, complex condensate management and water heater
relocation requirements). Mr. Batchelor thought CPAU and the City of Palo Alto had ownership to meet
the goals they set. The S/CAP committee set a goal for 1000 HPWH and they spoke to Council about
some of the challenges. One area of improvement was increasing communication to customers, so a
consulting firm was hired that is more familiar with these types of installs as well as some of these
challenges. Staff discussed internally about using social media and bill inserts. One idea was to create a
flyer for field service representatives to give to customers when they visit homes to relight pilots and
check gas stoves, giving representatives the opportunity to talk about the program and answer
customers’ questions. At stakeholder meetings with the community on upgrading areas to the smart
grid and fiber, CPAU can mention incentives for customers to electrify.
Commissioner Croft noted that of the 440 HPWH interest forms, 147 site assessments were made but
only 16 installations were completed. Commissioner Croft and Chair Segal related their personal
experiences with this process. Mr. Batchelor thought the program needed more installers, although
some customers did not proceed with the installation process due to lack of resources or the
cumbersome process. Staff was considering changes to make the HPWH program more efficient to avoid
encountering the same problems with whole-home electrification or changing out furnaces. Chair Segal
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suggesting using a flow chart outlining the steps to solve problems with installations or using an installer
with experience in addressing these issues.
Commissioner Phillips queried if the comparison of gas rates in Figure 12 on Packet Page 23, Report
Page 20, included the winter rebate. In FY2023, Palo Alto’s median usage of 402 therms was $1064,
PG&E $930. Mr. Wong confirmed that Palo Alto’s estimated bill amount included the winter rebate.
Packet Page 17 referred to a letter Mayor Kou sent to Governor Newsom to support the request for a
federal investigation and Commissioner Forssell asked about the status. Ms. Dailey responded the
results of the federal investigation might take a couple years at least.
Commissioner Forssell wanted to know how to respond when asked about Palo Alto’s carbon offset.
Packet Page 21 listed the projects. Ms. Dailey replied some people do not like offsets. The program was
designed to ensure usage of the highest quality offsets possible. The program adopted California Air
Resources Board’s (CARB) criteria for compliance offsets but the City does not require CARB
certification. The City used offsets voluntarily, not for compliance reasons. It was a self-imposed
program by the City of Palo Alto Council. One example of CARB’s compliance requirements is project
types. The City uses three registries for third-party verification of offsets and only buys from CARB-
approved project types in the U.S.
Commissioner Forssell asked for further explanation about cap and trade mentioned on Packet Pages 21
and 22 and funds from CPAU auctioning gas utility allowances. Ms. Dailey explained that CPAU had an
obligation as a gas utility to cover greenhouse gas emissions with allowances, although a tiny percentage
can be offsets. CPAU received yearly free allowances but the amount decreases every year. A
percentage of free allowances covered our compliance obligation but the percentage decreases over
time. CPAU must sell the balance of allowances into the auction. Utilities can use the revenue for
sustainability projects or distribute it evenly to customers but cannot base it on volumetric usage. PG&E
customers receive a climate credit every year. CPAU does not distribute its revenue to customers. CPAU
uses the money in accordance with guidelines approved by Council.
CPAU buys on the allowance market to cover gas usage within the boundaries of Palo Alto, which the
program has designed to become increasingly more expensive. The electric portfolio can choose more or
less carbon intensive sources, resulting in increased or decreased need for allowances. Efficiency and
electrification also decrease gas usage.
The City works with large customers’ sustainability goals. The City is building relationships with not only
facility managers but also sustainability managers and CFOs because they are the people making
decisions about changes at their facilities.
Commissioner Croft asked about commercial gas uses and targets. Ms. Dailey answered gas was mostly
for space heating. Some of Palo Alto’s hotels have large boilers that would require a large, expensive
project to change. Mr. Wong commented gas usage was about 55% commercial and 45% residential.
Commissioner Mauter pointed out that Palo Alto’s water consumption was below estimates. Revenue
shortfall this year was around $6M. Per Packet Page 30, FY23 had 11.3% lower revenues than budgeted
because of water conservation. Commissioner Mauter wondered if there was rebound data on water in
Palo Alto and if staff expected a rebound. Ms. Dailey replied that staff was working on next fiscal year’s
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financial plans as well as evaluating rebound over the past few months and assessing its effect on
projections in our financial plans.
Commissioner Mauter opined the drought as well as incentive programs and mandates to curtail water
usage would result in very slow rebound, so she urged staff to be conscious of that when making
projections. Commissioner Mauter asked if CPAU would close the gap through increased rates or
delayed maintenance. Mr. Batchelor responded that staff had internal conversations a few days ago
about saving money. Staff may seek bond financing for rehabbing two reservoirs in 2026 and 2027.
Otherwise, water needed much larger increases. Staff does not want to cut back on system maintenance
but may spread out the size of the CIP.
Commissioner Mauter thought seismic resilience upgrades were important and recommended including
seismic resilience in the water utility’s goals.
Commissioner Mauter noted that backflow prevention was listed as an area needing improvement and
was curious what fraction of customers had backflow prevention devices in the system. Mr. Batchelor
replied there were close to 6000 backflow devices tracked in the system, of which 400 to 500 were City-
owned, so about 5500 customers had backflow devices. Yearly, around 90% of customers do
inspections. Inspections, repairs and replacements were the customer’s responsibility. Some
neighboring cities do things differently than Palo Alto. Staff was thinking about charging customers for
testing, repairs and replacement of backflows. Currently, CPAU does not perform repairs or
replacements. About a quarter of customers have backflow prevention but legislation may change to
require 100% of customers to have backflow on their home.
Commissioner Mauter thought it was advantageous to make immediate use of any AMI data to improve
leak detection especially because water has a budgetary shortfall and asked if there had been any
progress in visualization or analysis of AMI metering data. Ms. Dailey responded that staff was working
with WaterSmart and the AMI vendor to ensure the systems were communicating with each other and
to deploy WaterSmart’s leak detection features as soon as possible. Mr. Batchelor remarked there were
two meter read routes receiving data from electric, water and gas devices over the collectors. CPAU
read the routes manually to confirm AMI meters were reading properly. About 800 meters were fully
deployed and tracked for electric, water and gas. There were a few more water and gas meters than
electric because of supply chain issues. AMI would be fully launched by October next year, unless
electric meters arrive sooner.
Dave Yuan, Strategic Business Manager, addressed Commissioner Croft’s questions regarding the AMI
vendor and software. The AMI network used Sensus. Badger Meter endpoints make it AMI capable. The
MDM system is SmartWorks Compass and it can track leak alerts. In the first quarter of 2024, customers
with AMI meters should have the ability to view their interval consumption by hour in the WaterSmart
portal, download data and can subscribe to WaterSmart leak alerts. All AMI data (including electricity)
will be available on a one-day delay but leak alerts should be the same day.
Packet Page 62 mentioned City wells were rehabilitated in 2013 but needed maintenance. The City was
evaluating adding generators for wells. Commissioner Metz thought emergency wells had generators.
Mr. Batchelor clarified some of the wells had generators but there was not on-site generation for every
emergency well. Staff was evaluating the size of the pumps compared to necessary generation. The
pumps for the water system had large diesel generation onsite. In an emergency, those larger
generations would move on trailers to emergency wells.
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Commissioner Croft asked if residents could view their data real-time instead of a one-day delay. Mr.
Yuan replied that customers could purchase a ZigBee radio and have it installed onto their meter. There
is a shortage of ZigBee radios. There is a waiting list for interested customers. CPAU had one test unit
but planned to purchase 500 devices.
In response to Commissioner Croft’s questions regarding costs for wastewater facility improvement, Ms.
Dailey responded that Public Works would study the allocation of costs among partners.
Commissioner Mauter was excited to note the water purification facility was at 90% design and
wondered when staff would brief the UAC on Carollo’s progress. Mr. Batchelor explained that Public
Works was running the project, he did not know when it would be finished but he would get the answer
by the UAC’s next meeting.
Mr. Yuan addressed Chair Segal’s inquiries about fiber rates and revenue. Revenue was $2.8M and
expenses $2.7M. Before COVID, revenue was $1M over expenses. Since COVID, many companies left the
city or consolidated connection services. Last year, there were a couple disconnections that CPAU did
not have the records of, resulting in a credit back to the date they disconnected. Going forward, staff
forecasted close to $0.75M profit yearly if there were no new disconnections and should return to pre-
COVID level by 2025. Mr. Yuan thought the rates were appropriate given the amount of reserves but
there had not been a recent cost-of-service study. Staff’s focus was on fiber-to-the-premise (FTTP);
therefore, they had not spent much time on dark fiber rates. Expenses increased recently from the
Magellan contract for the FTTP project. Expenses were about $0.5M to $0.75M higher than the run rate.
Dark fiber rates (EDF-3) were set around 2006 or 2009 per Mr. Yuan’s recollection. Fees were a fixed
unit amount based on mileage footage to connection points.
Commissioner Croft asked if the WaterSmart portal had any effect on control residences’ usage. Ms.
Dailey replied she had not seen results from Palo Alto’s experiment but she could follow up with
Commissioner Croft on when to expect that information.
Commissioner Croft inquired about usage changes from employers remaining hybrid or remote and was
interested in the efficiencies they might experience. Ms. Dailey was unaware of data on the hybrid work
environment or identifying those customers.
In reply to Commissioner Croft’s query if CPAU included smart building technology in its efficiency
programs, Mr. Batchelor did not think so but staff would follow up with a definite answer. Mr. Batchelor
thought electrical and water usage lessened when commercial and industrial customers were hybrid but
staff would have to look at each customer individually to provide a comparison.
Commissioner Croft read there were substantial efficiency savings achieved with smart buildings and
daylight savings. Commercial comprised 80% of the electricity load, so Commissioner Croft was
interested in including smart buildings within CPAU’s programs. Ms. Dailey remarked CPAU had a
program for a contractor to perform energy assessments for large customers. There was rebate money
available for energy efficiency and electrification projects.
Commissioner Phillips found the lack of commercial data concerning, given the size of its electric usage,
and asked about increasing visibility. Ms. Dailey remarked that a second Utilities Program Services
Manager position was added last fall to focus more on programs and outreach to commercial
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customers. There had been a Key Account Program for many years with two Key Account
Representatives who know CPAU’s largest customers well (VA Hospital, Tesla and Stanford Hospital).
That has allowed a lot of visibility into their business operations and strong relationships.
Commissioner Phillips requested a presentation on the commercial electricity strategy for different
commercial segments (large office, retail, data center). Ms. Dailey commented on the combination
packs for electric cooling and gas heating on rooftops. Staff was evaluating ways to reach those
customers before they replace their units with another gas unit and incentivize them to switch to heat
pumps. There is a ceremony tomorrow at 11 a.m. at the Peninsula Conservation Center on East
Bayshore for replacing their unit to a heat pump.
Commissioner Forssell wondered if fiber was priced to value or cost. Chair Segal pointed out the City
recently spent a lot of money in the downtown upgrade dark fiber expansion. Commissioner Forssell
asked if the UAC could see a comparison of our fiber rates with competitors within Palo Alto or
neighboring communities. Mr. Yuan replied that staff looked for data but it was very difficult because it
was a unique business. AT&T and Comcast offer managed service, not dark fiber service. Our fiber utility
provides conduit and fiber strands but the customer provides equipment and manages it themselves.
Staff could contact Santa Monica and other municipalities with the same business model as ours.
Commissioner Croft wanted more initiatives to have EV charging readily available to the public in Palo
Alto. She expressed her frustration with charging her EV when traveling. The City encouraged EVs and
she believed EV capability should match our residents’ high interest in EVs. The Technical Assistance
Program’s goal was 180 to 360 ports but only 15 ports have gone in. She urged staff to move faster.
ACTION: None
The UAC took a break at 7:42 p.m. and resumed at 7:50 p.m.
ITEM 2: DISCUSSION: Winter 2023-24 Natural Gas Price Uncertainty Management Council Decision
Implementation
Karla Dailey, Acting Assistant Director Resource Management, stated that gas commodity prices change
monthly for Palo Alto ratepayers because price tied to a published market index. City Council is the only
body that can legally approve rates. In the past, Council set the rate schedule maximum at $2/therm.
From 2012 until January 2023, market price remained below $2/therm. In December 2022, Council
increased the maximum commodity charge to $4/therm but the monthly price index for January 2023
was almost $5/therm. Almost $2M was taken from the operating reserve to cover the difference.
Jason Huang, Resource Planner, presented this winter’s Capped-Price Winter Gas Purchasing Strategy.
The CPUC investigation and Federal Energy Regulatory Commission investigation would take about 36
months. Investigation findings may be available in spring 2026. For December 2023, January 2024 and
February 2024, the Capped-Price Winter Gas Purchasing Strategy was to purchase gas baseload volumes
tied to a published monthly index with a $2/therm cap. If the monthly index was below $2/therm, our
purchase price was the monthly index. If the monthly index was above $2/therm, the City’s purchase
price was $2/therm. The strategy applied to December 2023, January 2024 and February 2024 because
they were typically the coldest and most expensive months for gas in California with the most risk for
dramatic gas price volatility due to winter supply and market fundamentals. Last winter from December
through February, indexes were at the highest levels from $1.25/therm to almost $5/therm compared
to usually below $1.00/therm. Staff recommended to Council to buy caps for our baseload volumes for
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December through February and continue to purchase gas without price caps for the remaining months
of the year. Council approved the strategy in September.
CPAU buys gas supply from November through October. On November 1, customers’ bills will include
price cap insurance. Staff was able to purchase 50% of the gas baseload volumes for December, January,
and February with the $2/therm cap in place, resulting in $1.5M cost for the caps. The $1.5M total cost
for buying caps for December, January and February would be divided on customers’ bills over 12
months, resulting in a monthly increase of about $1.81 in the median monthly residential bill. This
insurance policy protects reserves and customers from price spikes, although the policy adds cost if
market prices are below $2/therm. Up to $4/therm can be passed onto customers. Staff contacted our
major gas suppliers to request a cap and received this offer from one of our largest gas suppliers. In
response to Commissioner Phillips querying why the City did not use a financial institution, Ms. Dailey
replied that the City’s energy risk management policy forbids us from engaging in financial transactions
and Council approved the policy.
Commissioner Phillips urged staff to consider long-term alternatives. This $1.5M policy would have
saved the City $2M if it were in place for January 2023. Commissioner Phillips suggested the City could
self-insure by saving $1.5M, cut out the middleman and use the money to reduce customers’ bills if high
gas prices occurred in the future. Mr. Huang remarked that staff considered that option. Ms. Dailey
commented that staff wanted to implement something quickly in response to the community’s and
Council’s needs. Self-insuring was a possibility. A separate reserve could be created for this purpose
after exploring how much money we wanted to keep but it would take time to accumulate money.
Fixed price gas purchases could be added to our portfolio but rates needed to change because buying
fixed price and tying our commodity rate to the monthly market was a mismatch. A full-laddering
strategy was another option. Owning our gas production can control costs but does not fit with the
City’s risk profile or expertise. Gas storage can arbitrage winter price spikes but was very expensive
because of costs for injection, holding and withdrawal. It was not cost effective when staff evaluated gas
storage a number of years ago but it could be a useful tool for reliability and staff can reevaluate it. One
of Council’s ideas was purchasing costless collars, a cap and floor on the price that offset each other
such that you do not pay any insurance but the downside is if prices fall then you hit the floor price and
customers cannot take advantage of falling prices. Staff will return to the UAC with alternatives moving
forward or continue passing through market price and taking the chance of high winter gas prices.
Mr. Huang explained that gas was procured by the full year or season, depending on volatility at the
time. The past two or three years, CPAU bought seasonally for winter (November through April) and
summer (May through October) based on the monthly price set before the month started. Ms. Dailey
remarked that the transaction was to buy this much gas based on this published index and CPAU
obtained quotes for gas at index plus an add-on but we do not know how the price until the month
starts. Mr. Huang mentioned there was a daily published index to buy gas on a daily basis. Ms. Dailey
stated we buy and sell on the daily market because our baseload was never exactly the amount used.
Commissioner Phillips asked when staff would provide a long-term recommendation to the UAC. Ms.
Dailey replied that was not on the calendar and they needed to hire a resource planner. Mr. Huang was
providing analysis for gas and electric. On the self-insurance strategy, it would take years to build up
reserves, so there needed to be an interim strategy.
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Council approved the Capped-Price Winter Gas Purchasing Strategy for one year. Customers will not see
it on their bills as a separate line item. The cost was embedded in the commodity charge and the $1.5M
cost commitment would be recouped by October 31. Our website will have more details. Ms. Dailey
pointed out that the $2M taken from reserves last year also needed to be paid back.
CPAU sent communications to advise customers their gas bills were likely to be very high last winter.
Commissioner Mauter asked if customers responded by reducing their gas use. Mr. Huang responded no
and he thought the reason was December was a lot colder so there was more than average
consumption. Ms. Dailey replied no and she thought it was because most people did not pay attention
until they saw their bill. Mr. Batchelor thought the cold weather caused higher use, even though CPAU
sent messages to advise customers to cut back.
Commissioner Mauter saw this as a warning to the UAC around the challenges we would see in
transitioning off gas if rising prices, interventions such as heat pump water heater programs and other
incentive programs to help customers get off gas did not encourage transition.
Chair Segal was troubled by the mixed signals. We are trying to discourage gas use while saying do not
worry about winter gas prices, it is going to be expensive but we are going to take care of you. Chair
Segal did not want that language in our long-term plan. Having a gas reserve to protect against future
prices was problematic because current customers pay for future customers. Rates are per therm, so
you receive more of a discount if you use more therms, which Chair Segal thought should be inverted.
Council Member Lauing commented that staff should plan now for next year so the UAC can be involved
in the process. He urged staff to get it on the timeline. Council approved the Capped-Price Winter Gas
Purchasing Strategy in spite of costs. Council determined the risk was too high this year because we did
not know what caused high gas prices last winter and to avoid the risk of residents paying high gas prices
two years in a row, particularly because reserves were down.
Commissioner Croft thought customers would remember last winter’s price spike and may cut back gas
usage this year and perform insulation improvements. She saw a Nextdoor conversation about heat
pump water heaters. It would be helpful to see a price comparison of energy from electricity versus gas.
If electricity was more attractive than gas, we need to make that financial argument.
ACTION: None
COMMISSIONER COMMENTS and REPORTS from MEETINGS/EVENTS
Commissioner Metz stated there was an S/CAP meeting scheduled next week on the heat pump water
heater strategy.
Chair Segal thanked Dean Batchelor, Utilities Director, for participating in the League of Women Voters
conversation about S/CAP.
FUTURE TOPICS FOR UPCOMING MEETING
Commissioner Metz urged staff to have a 12-month rolling calendar as required by our bylaws. He
wanted to include the topic of grid modernization. A Reliability and Resiliency Strategic Plan Update was
scheduled for December. Commissioner Metz requested staff to address if the plan included resiliency
when the grid was operating or if it also addressed what to do in a major grid failure.
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Commissioner Forssell requested a dark fiber utility rate comparison to understand the financials better.
Commissioner Phillips wanted a presentation on commercial electricity segmentation and plans specific
to the commercial sector.
Chair Segal noted it was time for a security meeting on physical and digital security, as either an
additional meeting or closed-door session.
NEXT SCHEDULED MEETING: December 6, 2023
ADJOURNMENT
Commissioner Phillips moved to adjourn.
Commissioner Forssell seconded the motion.
Motion carried 6-0 with Chair Segal and Commissioners Croft, Forssell, Mauter, Metz and Phillips voting
yes.
Vice Chair Scharff absent.
Meeting adjourned at 8:36 p.m.
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Utilities Advisory Commission
Staff Report
From: Dean Batchelor, Director Utilities
Lead Department: Utilities
Meeting Date: December 6, 2023
Staff Report: 2310-2173
TITLE
Staff Requests the Utilities Advisory Commission Recommend the City Council Approve the
Continuation of the Cross-Bore Verification Program
RECOMMENDATION
Staff recommends the Utilities Advisory Commission recommend the City Council approve the
continuation of the Cross-Bore Verification Program to complete the remaining 966 sewer
laterals over the next two years for an estimated $1,352,400
BACKGROUND
A “cross-bore” occurs when a pipe is installed by trenchless technology and inadvertently
penetrates a pre-existing pipe in its path. Cross-bores create an intersection of infrastructure
that compromises the integrity of one or both pipes involved, with potentially severe
consequences. In rare cases, if cross-bores have occurred between sewer laterals and gas lines,
a potentially hazardous situation can be created during sewer lateral cleaning or plumbing work
whereby the sewer cleaning breaks the gas line resulting in the unrestricted release of gas into
the sewer and home. Proactive investigation and prompt repair reduce risk of potentially
hazardous cross-bores.
During 2011, the City of Palo Alto Utilities (CPAU) Department launched a cross-bore verification
program for all active sanitary sewer laterals in the City. The main purpose of the cross-bore
verification program was to help ensure natural gas pipelines or other utilities were not
unintentionally installed through sewer laterals. The first phase of the program (Phase I Cross-
Bore Verification Program) concluded in 2013. During Phase I, the City’s contractor successfully
inspected a total of 7,192 City and private sewer laterals. A total of 26 natural gas cross-bores
were identified during Phase I of the program and CPAU Operations promptly repaired all
identified cross-bores.
During August 2019, the City started the second phase of the cross-bore verification program
(Phase II Cross-Bore Verification Program). Initially, 2,500 sewer laterals were scheduled for
inspection, but the parties terminated the contract during the COVID-19 pandemic because the
original bid price did not include the additional expenses to meet Santa Clara County’s COVID-
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19 safety requirements and the contractor would not execute a contract change order for the
additional expenses. As a result, the City’s contractor inspected 408 of the highest priority City
and private sewer laterals, and no natural gas cross-bores were identified during Phase II of the
program.
The Phase III Cross-Bore Verification Program began during April 2021. Phase III of the program
was completed during September 2022 and the City’s contractor inspected a total of 1,480 City
and private sewer laterals. Only one natural gas cross-bore was observed during Phase III and
CPAU Operations repaired the cross-bore on the same day it was identified.
ANALYSIS
The CPAU cross-bore verification program has been prioritized based on factors that contribute
to greater risk of a cross-bore occurring. For example, gas services installed close to sewer
laterals pose a greater cross-bore risk than those with a greater separation. CPAU staff reviewed
the existing utility asset database to create a list of sewer laterals that could potentially contain
a natural gas cross-bore. The criteria created are as follows.
•The property has a natural gas service that is 1” in diameter and the pipeline material is
polyethylene (PE). The presence of PE pipe is a risk factor because this type of pipe is
typically bored underground whereas other pipe materials were installed using open-
trench construction methods, which do not pose a cross-bore risk.
•The 1” PE gas service was installed by a trenchless operation or identified as “unknown”
installation method. If the PE gas service was installed by open-trench construction, it
does not pose a cross-bore risk.
•The installation date was prior to 2001, if it was installed by a city contractor, or prior to
2011, if it was installed by a city crew, as after these dates CPAU had a cross-bore
inspection program in place.
The above criteria will result in a total of 10,046 out of 17,830 sewer laterals (56%) that were
included in the CPAU cross-bore verification program (Phase I through Phase IV). The cross-bore
inspection was further prioritized to address the type of property served. Other evaluating
factors include the following.
•Whether the property is in a densely populated or “high-consequence” area.
•Whether the gas service has an emergency safety shut-off valve that automatically stops
the uncontrolled release of gas.
•Location of the gas meter: A gas meter at the house poses a greater risk as the gas service
was drilled onto private property and the potential to damage a private sewer lateral is
greater. A curb meter location poses a reduced risk as the gas service is not installed on
private property.
•The proximity of the gas service to the sewer lateral.
As CPAU continues to complete the higher-priority locations, staff expects the number of natural
gas cross-bores to continue to decrease. There are 966 remaining sewer laterals to be inspected
on Phase IV Cross-Bore Verification Program. CPAU has estimated it will take 2 years to complete
these inspections for a total of $1,352,400. The final Phase IV Cross-Bore Verification project has
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not yet been budgeted and staff is seeking concurrence from UAC to continue with the program
despite the reduction in identified natural gas cross-bores observed during Phase II and Phase III.
Although cross-bore inspections in Phases I through III has greatly reduced the likelihood of
discovering a cross-bore within the remaining unverified sewer laterals, the risk has not been
eliminated. A single natural gas cross-bore could have a devastating effect if damaged by a
plumber while clearing a sewer blockage or cleaning a sewer pipe. While inspecting all 10,046
sewer laterals does not guarantee a natural gas cross-bore is not present within a sewer lateral,
the cross-bore verification program will capture and document the inspection of approximately
56% of the sewer laterals in the collection system that meet the criteria for the potential presence
of a natural gas cross-bore.
Staff will continue to assess the number of sewer laterals that meet the criteria for cross-bore
inspection and remove addresses of laterals being inspected internally as some of the gas services
may be replaced through Operations maintenance programs. Historical data, yearly inflation, and
COLA (cost-of-living adjustment) are used to prepare the engineering estimate for the multi-year
contract of the Phase IV Cross-Bore Verification Program. Staff will complete all remaining
inspections of sewer laterals identified as meeting the criteria for potential natural gas cross-
bores within this multi-year contract. Staff estimates there are 966 remaining laterals requiring
inspection.
FISCAL/RESOURCE IMPACT
Currently Phase IV of the cross-bore verification program is not budgeted. Staff estimates it will
require a total of $1,352,400 to complete the remaining higher-priority lateral inspections for all
gas services installed prior to the Department implementing a cross-bore lateral inspection
program. The estimated cost of inspection has increased by 40% due to the estimated cost
aggregated over a two year period and inflation and labor increases over a 4 year span between
bids from Phase III to Phase IV.
Phase
Contract
Duration
(months)
Total Final
Contract
Expenditure
Laterals
Inspected
Gas
Cross-bore
Discovered
Other
Cross-bore
Discovered
Inspections
Performed
per Cross-
bore Found
Cost per
Cross-bore
Avg. Cost
per
Inspection
I 29 $2,946,297 7,192 26 31 126 (0.8%)$51,689 $410
II 9 $245,743 408 0 1 408 (0.2%)$245,743 $512
III 18 $1,251,200 1,480 1 0 1480 (0.07%)$1,251,200 $845
Historical 56 $4,443,240 9,080 27 32 154 $75,309 $485
IV 24 $1,352,400 966 ----$1,400
With 966 sewer laterals to be inspected to complete all legacy gas service installations prior to
the in-line sewer inspection practice and the inherent risk of cross-bores and the devastating
affect a damaged gas pipeline in a sewer pipe can have, staff recommends the UAC recommend
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the City Council approve the continuation of the Cross-Bore Verification Program to complete
the remaining sewer laterals over the next two years, with a contractor, and to include the work
in the operating budget.
For discussion purposes, staff provided three options for completing the cross-bore program,
which are as follows:
•Option 1 – Continue the Cross-Bore Inspection Program and complete the remaining
966 higher-priority sewer laterals over the next 2 years.
•Option 2 – Scale back the Cross-Bore Inspection Program and complete the remaining
966 higher-priority sewer laterals over the next 10 years.
•Option 3 – Discontinue the 3rd-party Cross-Bore Inspection Program based on the
remaining expense and risk reduction achieved to date.
ATTACHMENTS
Attachment A: Presentation
APPROVED By:
Dean Batchelor, Director of Utilities
Staff: Aaron Perkins – Principal Engineer, Utilities
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1111111
CROSS-BORE UPDATE
December 06, 2023
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Cross-bore Background
Cross-bore
The unintentional drilling of a new pipeline through an existing
underground pipeline using trenchless drilling method. Cross-bore
between sewer laterals and gas lines are rare but could happen. This
poses a potential hazard during sewer line cleaning or plumbing work.
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3333333
Crossbore Intersection
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4444444
Crossbore Inspection
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Grouping of Laterals and Proximity
Group
Proximity Range Between Gas Service and Sewer Lateral
0 ≤ 5'6' ≤ 10'11' ≤ 15'16' ≤ 20'21' ≤Total
1 15 6 9 6 76 112
2 2 1 5 1 40 49
3 59 52 39 40 87 277
4 94 52 54 53 220 473
5 3 0 1 2 13 19
6 9 9 3 2 13 36
Phase IV Inspections
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Phase IV Inspection Data
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Staff Summary
•Staff recommends the UAC recommend the City Council approve the continuation of
the Cross-Bore Verification Program to complete the remaining 966 sewer laterals
over the next two years for an estimated $1,352,400
•Questions?
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Slide Title
8
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Utilities Advisory Commission
Staff Report
From: Dean Batchelor, Director Utilities
Lead Department: Utilities
Meeting Date: December 6, 2023
Staff Report: 2310-2161
TITLE
Recommendation to Adopt a Resolution Approving an Amendment to the City’s 2009 California-
Oregon Transmission Project Long-Term Layoff Agreement to Extend the City’s Layoff of its Share
of the California Oregon Transmission Project (COTP) until 2034 and to Receive Annual Market
Payments
RECOMMENDATION
Staff recommends the UAC recommend the City Council adopt a Resolution approving
Amendment No. 3 to the City’s 2009 California-Oregon Transmission Project Long-Term Layoff
Agreement to extend the term for 10 years until 2034 and to receive annual market payments,
as shown in Exhibit A to the attached Resolution.
EXECUTIVE SUMMARY
In 1984 the City of Palo Alto was a founding member of the Transmission Agency of Northern
California (TANC), a joint powers agency formed in 1984 to facilitate the construction and joint
ownership of transmission projects. TANC invested in construction of a high-voltage transmission
line from just north of the California Oregon border to Tracy in the Central Valley called the
California Oregon Transmission Project. The purpose of this line was to ensure publicly owned
utilities had sufficient transmission capacity outside of the PG&E-owned transmission system.
With the formation of the California Integrated System Operator (ISO), the City of Palo Alto
Utilities and several other publicly owned utilities joined the ISO. However, there were other
publicly owned electric utilities, along with the federal hydroelectric project the Western Area
Power Authority, which elected to not join the ISO and instead jointly decided to keep the COTP
outside of the ISO market and transmission planning process. This decision stranded Palo Alto’s
share of the COTP in a different balancing authority and limited the value of the asset to Palo
Alto.
Since the value streams from the COTP were preserved for those utilities not in the ISO, in 2009
Palo Alto entered into a 15-year temporary ownership agreement (or “layoff”) of its share of
COTP to three of these utilities who had not joined the ISO: Turlock Irrigation District (TID),
Modesto Irrigation District (MID), and the Sacramento Municipal Utilities District (SMUD). The
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2009 layoff term ends February 1, 2024 unless extended or replaced. Upon expiration in 2024
the City of Palo Alto Utilities Electric Portfolio would have been required to pay the TID, MID, and
SMUD approximately $1M (which is the value of the remaining useful life of existing capital
replacements). Staff briefed the UAC on the history and options for Palo Alto’s share of the COTP
in May 2023 (Staff Report: 2301-07951). The current 2009 Long-Term Layoff Agreement (2009
LTLA) and both of its amendments are included as Attachments B, C, and D.
Staff negotiated with current layoff recipients TID, MID and SMUD to extend the 2009 LTLA for
ten years until February 1, 2034 and add an annual market payment to the City of $550k in years
2024-2028 and $800k in 2029-2033. Amendment No. 3, approved by the TANC Commission on
November 15, 2023, is included for review as Attachment A. Following approval by TID, MID and
SMUD’s governing boards, Amendment No. 3 will be considered by Palo Alto’s City Council on
January 16, 2024. Staff recommends that the Utilities Advisory Commission recommend the
Council adopt a resolution authorizing the City Manager to execute Amendment No. 3.
1Staff Report 2301-0795 https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-
reports/agendas-minutes/utilities-advisory-commission/archived-agenda-and-minutes/agendas-and-minutes-
2023/05-may-2023/05-03-2023-2301-0795-info.pdf
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BACKGROUND
The COTP is a 340-mile, 500-kV AC transmission line between Southern Oregon and Central
California. The COTP became operational in March 1993, and has a total rated capacity of 1,600
MW.
From its northern end at the Bonneville Power Administration's Captain Jack Substation in
Southern Oregon, the COTP continues south to the Western Area Power Administration's Tracy
Substation and on towards the Tesla Substation (owned and operated by PG&E) in the CAISO
balancing area.
The Transmission Agency of Northern California (TANC) is a California Joint Powers Agency,
formed in 1984 to facilitate the construction and joint ownership of transmission projects. Palo
Alto was a founding member of TANC. Other members include MID, TID, SMUD and the Cities of
Alameda, Biggs, Gridley, Healdsburg, Lodi, Lompoc, Redding, Roseville, Santa Clara, and Ukiah.
TANC currently owns and operates approximately 87 percent of the COTP. Palo Alto is a signatory
to TANC’s 1990 Project Agreement No. 3 (PA3) (Resolution No. 6877, adopted March 26, 1990),
which provides the City a 3.6815%, or approximately 50 MW, share of TANC’s current entitlement
to transfer capability on the COTP. That line is expected to be increased in rating in 2025,
increasing Palo Alto’s share to 54 MW for north to south transmission.
Palo Alto decided to lay off its share of the line in 2009 to MID, SMUD, and TID, and that layoff
will come to end February 1, 2024 if not extended.
Figure 1. Map of COTP as part of the California-Oregon
Intertie.
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DISCUSSION
Analysis
In 2009 laying off the COTP at cost to non-ISO public utilities was a reasonable choice; however,
several fundamental policy and market changes have occurred in the last 15 years. These market
changes have made transmission both more expensive and more valuable.
Some of the market changes include high renewable electricity mandates, large increases in
transmission costs to deliver renewable electricity, greater electricity market integration with
neighboring states, and the California ISO’s 2020 creation of a revenue stream for ISO utilities
who make their portion of the COTP available to the ISO. Overall these changes increased the
value of the COTP to both Palo Alto and the utilities who currently operate Palo Alto’s share of
the COTP under the 2009 layoff agreement.
There are also substantial upcoming capital and operating expenses planned for the COTP to
which Palo Alto would need to contribute if it took back its share, and uncertainties around future
value streams which could make value of the City’s share of the COTP lower than the City’s cost
of ownership, as shown in Table 1.
Changes to the Current Layoff in the Amendment
Staff from Utilities and the City Attorney’s office negotiated the terms of a 10-year amendment
and extension of the 2009 layoff agreement with MID, TID and SMUD. Specifically, besides
extending the layoff term until 2034, the amendment includes an annual market payment of
$550k in years 2024-2028 and $800k in 2029-2033 from MID, TID and SMUD to Palo Alto. In
addition, extending the layoff term would ensure that all the operating costs and a large
percentage of the capital costs for the next 10 years would continue to be allocated to MID, TID
and SMUD.
Over the course of the current 15-year layoff PA3 participants have approved many required
capital projects to the COTP, which have mostly been replacements to existing facilities. As
detailed in the 2009 LTLA (Attachment B), the portion of the useful life of the capital
replacements that extend beyond the duration of the current layoff will be the responsibility of
the layoff entities, including Palo Alto. To date, approximately $1M of these capital obligations
would be payable by the City at the end of the layoff term in February 2024. Again, this $1M
represents the City’s share of the capital replacements whose life exceeds the duration of the
layoff, were the City to end the current layoff in 2024. If the City amends the layoff agreement
in accord with the terms in Amendment No. 3, then these previously accrued capital obligations
would be reduced substantially and be due in 2034 instead. This is reduction is shown in Table 1.
The annual payments to the City from the Districts receiving the layoff of $550k will start in 2024,
changing to $800k in 2029 through 2033.
Comparison of Amended Layoff Agreement and Bringing COTP Back
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A summary table with approximation of the annual costs and value streams is below, for the 10-
year layoff agreement, from February 1, 2024 to January 31, 2034. This table compares the
different costs and values of bringing the COTP back to Palo Alto’s electric portfolio versus
amending and extending the layoff agreement. The terms of the current layoff are shown as a
comparison, although an extension of the current layoff without the annual payments to Palo
Alto is not being considered.
Table 1. Financial comparison of current estimates of value for bringing COTP Back versus the proposed terms for the Amended
Layoff. The “Current Layoff Terms” are shown for comparison only, if the current layoff were extended, which is not under
consideration, but simply shown for comparison purposes. All numbers are presented on an annual basis for the ten-year term
covered by the proposed Amendment.
Annual Cost or Revenue
Bring COTP Back
to Portfolio
(2024-2034)
RECOMMENDED
Layoff Extension
(2024-2034)
Current Layoff
Terms
(2009-2024)
O&M Obligations -$1,400,000 --
New Capital Obligations -$600,000 -$350,000 -$350,000
Prior Capital Obligations -$100,000 -$40,000 -$40,000
CRR Options Revenue $920,000 --
Energy Transfer System Resources
Revenue $480,000 --
Average Layoff Payment -$675,000 -
Low Cost Renewables Value unclear --
Total Cost (-) or Value (+) per year -$700,000 $285,000 -$390,000
Detailed Estimates of Costs and Values
The prior capital obligation for repayment of about $1M (accrued from 2009 to 2024) is shown
on an annual basis for different options for the duration. If the City were to bring the resource
back rather than amend and extend the current layoff agreement, the City would be required to
pay roughly $1M in prior capital obligations (shown in the table above as $100k per year over 10
years), effective February 1, 2024.
The City is exempt from all operation and maintenance obligations related to PA3 during the
current layoff, and that will continue with this layoff extension. Under the current 2009 LTLA
Section 3.g. which remains unchanged via the potential extension, the City will be responsible for
paying the Districts back at the end of the layoff for the percentage of the useful life of that capital
replacement that extends beyond the term of the layoff agreement (in other words, when the
COTP share returns to the City).
There are substantial capital replacements planned for the next ten years, which TANC has
preliminarily decided to finance. Staff projects that the expected capital costs to the City without
a layoff extension will be approximately $600k per year for the 10 years covered by the proposed
extension. Approximately $1M of that total of $6M over ten years is anticipated to be funded by
TID, MID, and SMUD under a long-term layoff. Of the remaining $5M in capital expenditures from
2024-2034, Utilities staff, TANC staff, and NCPA staff are estimating approximately 70% of the
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capital replacements will need to be paid back to Districts in 2034, which is roughly $3.5M. This
is estimated from the anticipated expenditures based on the timing of the expenditures and the
lifetime of the actual equipment. These capital expenditures are shown in Table 1. These are for
planned capital expenditures, and actual capital expenditures could potentially be higher.
Under the 2009 layoff agreement, Palo Alto relinquishes “all of Palo Alto’s use of its interests,
rights, and obligations under TANC Project Agreement No. 3” unless TID, MID, and SMUD default,
and this would remain so under the amendment extending the current agreement.
Two revenue streams which are both volatile and uncertain are Congestion Revenue Rights (CRR)
Options, and Energy Transfer System Resources (ETSRs). The ISO made CRR options available to
Palo Alto in 20202;they are available to COTP owners so that entities can turn over their
percentage of the COTP on a monthly or annual basis to the ISO and collect both CRR value for
north to south and south to north throughout the year. This is essentially allowing the ISO to
optimize that portion of the COTP within the ISO full network model to minimize costs for all, and
then pass the value of the cost minimization to the respective COTP rights-holders.
ETSRs are the difference between the energy component of the locational marginal price at
different locations between Balancing Authorities beyond ISO, but within the Western Energy
Imbalance Market (WEIM) and the Extended Day Ahead Market (EDAM). EDAM is under
development and is expected to launch with PacifiCorp in 2025, and SMUD in approximately
2026. ETSRs essentially pass on the energy value to transmission owners who are connecting
lower cost resources to higher cost generation areas.
The COTP CRR options for public utilities like Palo Alto have averaged about $17k/MW per year.
Palo Alto’s current 51MW share will likely increase to 54MW by 2025, which staff estimates will
generate approximately $920k/yr in CRR Options revenue. The revenue from ETSRs is harder to
estimate and requires both that Palo Alto put its share of the COTP in the EDAM and that
transmission owners to the north do the same with their transmission. The City’s consultants
have also advised that there are additional nuances regarding how ETSRs are collected and
distributed that may impact these estimates. CAISO has not yet finalized the EDAM rules.
The potential value from lower cost renewable resources comes from the fact that there might
be high-quality wind resources able to directly connect on the COTP, which would be of value to
Palo Alto if the City opted to bring the asset back. However, securing transmission rights from
the COTP’s northern end at Captain Jack further north to where the resources are located is very
difficult. In addition, the COTP process for direct interconnection is only now being developed
and is likely to take years and require expensive power flow studies.
Alternatives
2 Explanation of the CRR Options developed for the COTP in 2020
https://www.youtube.com/watch?v=Io2ig60i9wo&t=146s
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Staff explored bringing the COTP share back and issued an RFP for renewables with preference
for interconnection at Captain Jack intertie. The City did not receive any offers, although there
was some potential for projects which would take several years to develop.
Staff also considered an outright sale of the City’s share of the COTP, but the regulatory
uncertainty with EDAM and other issues greatly diminished the value. There is also long-term
interest in maintaining the City’s share of the COTP to maintain flexibility of resources into the
future given the uncertain regulatory environment and the difficulty in siting and constructing
new transmission lines.
FISCAL/RESOURCE IMPACT
The recommended action to amend and extend the 2009 Layoff will not require payments from
Palo Alto until 2034, and Palo Alto will receive annual payments May 1st of $550k each year from
2024 to 2028 and then $800k from 2029 to 2033. The terms are the same as current cost
obligations meaning that PA3-related operations and maintenance costs during the layoff will
not be Palo Alto’s responsibility, while capital replacements made during the layoff will continue
to be allocated as described in Section 3.g. of the 2009 LTLA (Attachment B). In 2034 Palo Alto
will need to pay its share of capital investments covering the time after the layoff expires (2034
and onward) as well the City’s portion of capital costs and obligations that were prefunded by
the Districts during the layoff, if applicable. As shown in Table 1 these capital costs which are
being prefunded by the Districts from 2024-2034 can be tracked annually and funds can be set
aside for that repayment.
POLICY IMPLICATIONS
This proposed layoff amendment is consistent with the Utilities Strategic Plan, the Utilities
Electric Integrated Resources Plan, Sustainability Implementation Plans, and the City’s
Sustainability and Climate Action Plan (S/CAP).
ENVIRONMENTAL REVIEW
Staff’s recommendation does not require California Environmental Quality Act review, because
it does not meet the definition of a project under Public Resources Code Section 21065 and CEQA
Guidelines Section 15378(b)(5), as an administrative governmental activity which will not cause
a direct or indirect physical change in the environment. TANC certified the Final Environmental
Impact Report for the COTP in 1988.
NEXT STEPS
Staff will present Staff recommendation and UAC recommendation to City Council January 16,
2024.
ATTACHMENTS
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Attachment A: Resolution
Attachment B: Current 2009 Long-Term Layoff Agreement
Attachment C: Amendment No. 1 to the 2009 Long-Term Layoff Agreement
Attachment D: Amendment No. 2. to the 2009 Long-Term Layoff Agreement
AUTHOR/TITLE:
Dean Batchelor, Director of Utilities
Staff: Lena Perkins, PhD, Senior Resource Planner
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*NOT YET APPROVED*
6056795 UAC
Resolution No.
Resolution of the Council of the City of Palo Alto Approving
Amendment No. 3 to the 2009 California-Oregon Transmission
Project Long-Term Layoff Agreement with Certain Other Members of
the Transmission Agency of Northern California to Extend the Term
for 10 Years Until 2034 and to Receive Annual Market Payments
R E C I T A L S
A. The City of Palo Alto (“City”), a municipal utility and a chartered city, became a
founding member of the Transmission Agency of Northern California (“TANC”) in 1984, to
facilitate construction and joint ownership of transmission projects.
B. The City of Palo Alto, the California cities of Alameda, Biggs, Gridley, Healdsburg,
Lodi, Lompoc, Redding, Roseville, Santa Clara, and Ukiah; the Modesto Irrigation District
(“MID”); the Turlock Irrigation District (“TID”); and the Sacramento Municipal Utility District
(“SMUD”) are also members of TANC.
C. TANC currently owns approximately 87 percent of the California-Oregon
Transmission Project (“COTP”), a 500-kV transmission line that interconnects with the
Bonneville Power Administration at the Captain Jack Substation in Southern Oregon and with
Pacific Gas & Electric Company in California at the Tesla Substation.
D. The City became a participant in the COTP in 1990, by executing Project
Agreement No. 3 (PA3) and has a 3.6815%, or approximately 50 MW, share of TANC’s current
entitlement to transfer capability on the COTP.
E. Due to changes in the value of the COTP to the City’s electric portfolio in 2009
the City, along with the City of Roseville, executed the Long-Term Lay-off Agreement (“2009
LTLA”) to transfer each party’s full COTP entitlement and obligations to MID, TID and SMUD for
fifteen years (Resolution No. 8900).
F. Amendment No. 1 to the 2009 LTLA returned Roseville’s COTP interests, rights,
and obligations from MID, TID, and SMUD back to Roseville, and clarified the City’s voting rights
under TANC PA 3.
G. At TANC’s January 27, 2016 meeting, TANC approved a resolution authorizing the
issuance of California-Oregon Transmission Project Revenue Refunding Bonds, 2016 Series,
(“the 2016 COTP Bonds”). On March 9, 2016 TANC issued and sold its $173,920,000 California-
Oregon Transmission Project Revenue Refunding Bonds, 2016 Series A (the “2016A Bonds”),
which have a maturity date of May 1, 2039.
H. Amendment No. 2 to the 2009 LTLA provided that in the absence of a default by
MIDTID, and SMUD, Debt Service for the 2016A Bonds and any extension thereof associated
with City’s 3.6815 Participation Percentage in TANC’s entitlement to Transfer Capability on the
COTP would be paid by MID, TID, and SMUD.
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*NOT YET APPROVED*
6056795 UAC
I. The Parties have agreed to execute this Amendment No. 3 to the 2009 LTLA,
attached as Exhibit A, to extend the 2009 LTLA for approximately an additional ten years to
January 31, 2034 to ensure that all of City’s interests, rights, and obligations associated with its
Participation Percentage under TANC PA 3 continue to be laid off to MID, TID, and SMUD for
the extended term of the 2009 LTLA in the absence of a default by MID, TID, and SMUD, and to
add an annual market payment to City from MID, TID, and SMUD. This Amendment No. 3, by
modifying the term of the 2009 LTLA, will also extend the term of ROSEVILLE’s layoff of its
South of Tesla (“SOT”) allocation, originally described in Section 4 of the 2009 LTLA.
The Council of the City of Palo Alto RESOLVES as follows:
SECTION 1. The Council approves Amendment No. 3 to the 2009 Long Term Layoff
Agreement by and Among the Transmission Agency of Northern California and Certain of its
Members, attached as Exhibit A to this resolution.
SECTION 2. As permitted by Section 2.30.290 of the City’s Municipal Code, the Council
delegates authority to the City Manager, or his designee, to execute further amendments to the
2009 Long Term Layoff Agreement as needed to maintain the value of the City’s laid-off COTP
share through the remaining term of the 2009 Long Term Layoff Agreement. Any further
amendments shall be in writing, accomplished in accordance with the terms of the 2009 Long
Term Layoff Agreement, as amended, and shall not exceed the limits of the authority granted
by the Council. Further amendments shall also require approval by the City Attorney’s Office,
TANC and the other 2009 Long Term Layoff Agreement participants.
//
//
//
//
//
//
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*NOT YET APPROVED*
6056795 UAC
SECTION 3. The Council finds that the adoption of this resolution does not constitute
a project under Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5),
as an administrative governmental activity which will not cause a direct or indirect physical
change in the environment. TANC certified the Final Environmental Impact Report for the COTP
in 1988.
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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83112.00002\41775073.2
Exhibit A
6056786
Amendment No. 3
Long-Term Layoff Agreement
By and Among
the
Transmission Agency of Northern California
and certain
of its Members
namely
The City of Palo Alto
The City of Roseville
The Modesto Irrigation District
The Turlock Irrigation District
and
The Sacramento Municipal Utility District
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83112.00002\41775073.2
Exhibit A
6056786
TABLE OF CONTENTS
RECITALS ....................................................................................................................................................... 2
AGREEMENT .................................................................................................................................................. 3
Section 1. Effective Date ........................................................................................................................... 3
Section 2. Modification of Section 2, “Term” ........................................................................................... 3
Section 3. Addition of Section 3.k, “Annual Market Payment” ............................................................... 4
Section 4. Integration ................................................................................................................................ 4
SIGNATURES .................................................................................................................................................. 4
This Amendment No. 3 of the February 1, 2009 Long Term Layoff Agreement By and Among the
Transmission Agency of Northern California and certain of its members (“LTLA”), is entered into
as of the Effective Date defined in Section 1 of this Amendment No. 3, by and among the
Transmission Agency of Northern California (“TANC”) and certain of its members, namely the
City of Palo Alto, referred to as “PALO ALTO”, and, the City of Roseville (“ROSEVILLE”), the
Modesto Irrigation District (“MODESTO”), the Turlock Irrigation District (“TURLOCK”), and the
Sacramento Municipal Utility District (“SMUD”), with references to each entity individually and
collectively as “Party” or “Parties”. Capitalized terms used in this Amendment No. 3 are defined
in TANC Project Agreement No. 3, unless otherwise specifically defined in this Amendment No.
3.
RECITALS:
A. PALO ALTO, MODESTO, ROSEVILLE, TURLOCK, and SMUD are each Participants in and
parties to TANC Project Agreement No. 3 (“TANC PA 3”), entered into March 1, 1990.
B. In the LTLA, PALO ALTO and ROSEVILLE laid off their entitlement to TANC’s Transfer
Capability on the California-Oregon Transmission Project (“COTP”) associated with their
Participation Percentages under TANC PA 3 to MODESTO, TURLOCK, and SMUD for the
fifteen-year term of the LTLA.
C. In the LTLA, MODESTO, ROSEVILLE, TURLOCK, and SMUD accepted and assumed all of
PALO ALTO and ROSEVILLE’s Participation Percentages under TANC PA 3 for the term of
the LTLA.
D. Amendment No. 1 to the LTLA returned ROSEVILLE’s COTP interests, rights, and
obligations from MODESTO, TURLOCK, and SMUD back to ROSEVILLE, and clarified PALO
ALTO’s voting rights under TANC PA 3.
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83112.00002\41775073.2
Exhibit A
6056786
E. At TANC’s January 27, 2016 meeting, TANC approved a resolution authorizing the
issuance of California-Oregon Transmission Project Revenue Refunding Bonds, 2016
Series, (“the 2016 COTP Bonds”). On March 9, 2016 TANC issued and sold its
$173,920,000 California-Oregon Transmission Project Revenue Refunding Bonds, 2016
Series A (the “2016A Bonds”), which have a maturity date of May 1, 2039.
F. Amendment No. 2 to the LTLA provided that in the absence of a default by MODESTO,
TURLOCK, and SMUD, Debt Service for the 2016A Bonds and any extension thereof
associated with PALO ALTO’s 3.6815 Participation Percentage in TANC’s entitlement to
Transfer Capability on the COTP would be paid by MODESTO, TURLOCK, and SMUD.
G. The Parties have agreed to execute this Amendment No. 3 to the LTLA to extend the
LTLA for approximately an additional ten years to January 31, 2034 to ensure that all of
PALO ALTO’s interests, rights, and obligations associated with its Participation
Percentage under TANC PA 3 continue to be laid off to MODESTO, TURLOCK, and SMUD
for the extended term of the LTLA in the absence of a default by MODESTO, TURLOCK,
and SMUD, and to add an annual market payment to PALO ALTO from MODESTO,
TURLOCK, and SMUD. This Amendment No. 3, by modifying the term of the LTLA, will
also extend the term of ROSEVILLE’s layoff of its South of Tesla (“SOT”) allocation,
originally described in Section 4 of the LTLA.
H. The Parties agree that except as amended and modified by Amendment No. 1 and
Amendment No. 2, which remain in effect, and this Amendment No. 3, the LTLA remains
in full force and effect, without any other changes to any of its provisions.
NOW THEREFORE, in consideration of the premises described in the Recitals, and
in consideration of the terms, covenants, and conditions that are set out below, the
Parties have entered into this Amendment No. 3 to the LTLA.
AGREEMENT:
Section 1. Effective Date.
This Amendment No. 3 shall become effective and enforceable on January 30, 2024 at
0001 hours Pacific Prevailing Time following the due execution and delivery of this Amendment
No. 3 to TANC, or the date on which this Amendment No. 3 is duly executed by all of the
Parties and delivered to TANC, if January 30, 2024 passes without such execution and delivery
(hereinafter “Effective Date”).
Section 2. Modification of Section 2, “Term”.
Section 2 of the LTLA, entitled “Term”, is hereby modified as follows:
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83112.00002\41775073.2
Exhibit A
6056786
“The term of this Agreement shall be approximately twenty five (25) years commencing on the
Effective Date and terminating at 0000 hours Pacific Prevailing Time on January 31, 2034, unless
the Parties mutually agree in writing to extend the term of the Agreement for another five (5)
years (hereinafter “Term”).
Section 3. Addition of Section 3.k, “Annual Market Payment”.
Section 3.k., “Annual Market Payment.” is hereby added:
“Starting May 1, 2024, and on each May 1 thereafter for the term of the LTLA, MODESTO,
TURLOCK, and SMUD, in aggregate, will pay PALO ALTO an annual fixed payment of $550,000
per year to PALO ALTO for the 5 years from 2024 through 2028 ($61,820 from MODESTO or
11.24%%, $244,090 from TURLOCK or 44.38%, and $244,090 from SMUD or 44.38%), and
$800,000 per year for the 5 years from 2029 through 2033 ($89,920 from MODESTO or 11.24%,
$355,040 from TURLOCK or 44.38%, and $355,040 from SMUD or 44.38%). While this payment
will be administered by TANC in accordance with section 3.f of the LTLA, MODESTO, TURLOCK
and SMUD shall be jointly and severally liable to make the payment annually.”
Section 4. Integration.
Except as amended and modified by Amendment No. 1 and Amendment No. 2, which
remain in effect, and this Amendment No. 3, the LTLA remains in full force and effect, without
change to any of its provisions other than the text expressly altered by this Amendment No.3.
On the Effective Date this Amendment No. 3 and the LTLA shall be one, integrated Agreement.
The Parties have duly executed and delivered this Amendment via their authorized
representatives set forth below.
SIGNATURES:
TRANSMISSION AGENCY OF
NORTHERN CALIFORNIA
By:
Its:
Dated:
CITY OF PALO ALTO
By:
Its:
Dated:
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Exhibit A
6056786
TURLOCK IRRIGATION DISTRICT
By:
Its:
Dated:
SACRAMENTO MUNICIPAL
UTLITY DISTRICT
By:
Its:
Dated:
MODESTO IRRIGATION DISTRICT
By:
Its:
Dated:
CITY OF ROSEVILLE
By:
Its:
Dated:
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RESOLUTION 2016-XX
A RESOLUTION OF THE
TRANSMISSION AGENCY OF NORTHERN CALIFORNIA
APPROVING AMENDMENT NO. 2
TO THE 2009 LONG-TERM LAYOFF AGREEMENT
WHEREAS, the Transmission Agency of Northern California (TANC) is a joint exercise
of powers agency organized under the laws of the State of California; and
WHEREAS, the TANC Procedures for Long-Term Layoffs of Transmission Capacity govern
TANC Member layoffs of their California-Oregon Transmission Project (COTP) entitlements;
and
WHEREAS, pursuant to Resolution 2009-01, the Cities of Palo Alto and Roseville entered
into a Long-Term Layoff Agreement By and Among the Transmission Agency of Northern California
and certain of its Members (2009 LTLA) to lay off their COTP Entitlements; and
WHEREAS, pursuant to Resolution 2014-04, the City of Roseville’s COTP Entitlement
rights were restored and the affected cost sharing percentages associated with TANC Project
Agreements No. 3 (PA-3) and No. 5 (PA-5) were modified by Amendment No. 1 to the Long-Term
Layoff Agreement By and Among the Transmission Agency of Northern California and certain of its
Members; and
WHEREAS, the City of Palo Alto’s COTP Entitlement associated with PA-3 remains laid
off to certain TANC Members; and
WHEREAS, parties to the 2009 LTLA as amended seek certainty regarding the
remaining cost sharing obligations associated with COTP; and
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Resolution 2016-__
2
WHEREAS, TANC’s General Counsel has drafted Amendment No. 2 to the Long-Term
Layoff Agreement By and Among TANC and certain of its Members (Amendment No. 2) to affirm the
duration of the existing cost sharing obligations; and
WHEREAS, draft Amendment No. 2 will not result in any changes to the cost sharing
percentages associated with PA-3 or PA-5; and
WHEREAS, the draft Amendment No. 2 to the Long-Term Layoff Agreement By and Among
TANC and certain of its Members (Amendment No. 2), has been reviewed and approved by the
Parties of the 2009 LTLA.
NOW, THEREFORE, BE IT HEREBY RESOLVED by the Commission of the
Transmission Agency of Northern California that the proposed Amendment No. 2 Long-Term
Layoff Agreement By and Among TANC and certain TANC Members is approved in the form
presented today, with such additional changes in form as the General Manager and General
Counsel agree and subsequently present to this Commission.
PASSED AND ADOPTED this 20h day of July, 2016 on a motion by _______________,
seconded by _______________.
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Resolution 2016-__
3
AYES NOES ABSTAIN ABSENT
City of Alameda
City of Biggs
City of Gridley
City of Healdsburg
City of Lodi
City of Lompoc
Modesto Irrigation District
City of Palo Alto
Plumas-Sierra Rural Electric Cooperative
City of Redding
City of Roseville
Sacramento Municipal Utility District
City of Santa Clara
Turlock Irrigation District
City of Ukiah
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Amendment No. 2
Long-Term Layoff Agreement
By and Among
the
Transmission Agency of Northern California
and certain
of its Members
namely
The City of Palo Alto
The City of Roseville
The Modesto Irrigation District
The Turlock Irrigation District
and
The Sacramento Municipal Utility District
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i
TABLE OF CONTENTS
RECITALS............................................................................................................1
AGREEMENT.......................................................................................................3
Section 1. Effective Date......................................................................................3
Section 2. Addition of Section 3.j, “Treatment of Project Agreement No.3
Debt”....................................................................................................3
Section 3. Integration...........................................................................................4
SIGNATURES.......................................................................................................4
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1
This Amendment No. 2 of the January 28, 2009 Long Term Layoff Agreement
(“LTLA”), is entered into by and among the Transmission Agency of Northern
California (“TANC”) and certain of its members, namely the City of Palo Alto (“PALO
ALTO”), the City of Roseville (“ROSEVILLE”), the Modesto Irrigation District
(“MODESTO”), the Turlock Irrigation District (“TURLOCK”), and the Sacramento
Municipal Utility District (“SMUD”), referred to as “Party” or “Parties,” as of the
Effective Date defined in Section 1 of this Amendment No. 2, with regard to the
following:
RECITALS:
A. In the LTLA, PALO ALTO laid off its interests, rights, and obligations to
TANC’s Transfer Capability on the California-Oregon Transmission
Project (“COTP”), associated with PALO ALTO’s Participation
Percentage, for the fifteen year term of the LTLA, which terminates on
January 28, 2024.
B. In the LTLA, MODESTO, TURLOCK, and SMUD accepted and assumed all
of the use of PALO ALTO’s interests, rights, and obligations transferred to
TANC, and by TANC to MODESTO, TURLOCK, and SMUD, for the term of
the LTLA.
C. Amendment No. 1 to the LTLA returned Roseville’s COTP interests, rights,
and obligations from MODESTO, TURLOCK, and SMUD back to Roseville,
and clarified PALO ALTO’s voting rights under Project Agreement No. 3.
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2
D. At TANC’s January 27, 2016 meeting, TANC approved a resolution
authorizing the issuance of California-Oregon Transmission Project Revenue
Refunding Bonds, 2016 Series, (“the 2016 COTP Bonds”). On March 9, 2016
TANC issued and sold its $173,920,000 California-Oregon Transmission
Project Revenue Refunding Bonds, 2016 Series A (the “2016A Bonds”).
E. The Parties have agreed to execute this Amendment No. 2 to the LTLA, to
provide that in the absence of a default by MODESTO, TURLOCK, or SMUD,
the Debt Service for the 2016A Bonds associated with PALO ALTO’s 3.6815
Participation Percentage in TANC’s entitlement to Transfer Capability on the
COTP will be paid by MODESTO, TURLOCK, and SMUD, as provided in this
Amendment No. 2.
NOW THEREFORE, in consideration of the premises described in the Recitals, and
in consideration of the terms, covenants, and conditions that are set out below, the
Parties have entered into this Amendment No. 2 to the LTLA.
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3
AGREEMENT:
Section 1. Effective Date.
This Amendment No. 2 shall become effective and enforceable on May 26,
2016 at 0001 hours Pacific Prevailing Time following the due execution and delivery
of this Amendment No. 2 to TANC, or the date on which this Amendment No. 2 is
duly executed and delivered to TANC, if May 26, 2016 passes without such
execution and delivery (hereinafter “Effective Date”).
Section 2. Addition of Section 3.j, “Treatment of Project Agreement No.3 Debt”.
Section 3.j, “Treatment of Project Agreement No.3 Debt”, is hereby added:
MODESTO, TURLOCK, and SMUD accept and assume the obligation to pay
PALO ALTO’s 3.6815 Participation Percentage of the Debt Service on the 2016A
Bonds in accordance with their respective Participation Percentages of the layoff
shares transferred in section 3.c of the LTLA from and after the end of the Term
of the LTLA until the last maturity date of the 2016A Bonds, currently May 1,
2039, and any extension thereof. Nothing in this Amendment No. 2 shall affect
or limit the underlying obligations of PALO ALTO under TANC Project Agreement
No. 3, such as, by way of example and not as a limitation, the obligation of PALO
ALTO, in the event of a default by MODESTO, TURLOCK, or SMUD, to pay to
TANC an amount equal to its Participation Percentage of all Debt Service on the
TANC Project Indebtedness and to pay to TANC an amount equal to PALO
ALTO’s Participation Percentage of TANC Project Costs, TANC Project O&M
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4
Costs, and TANC Capital Improvement Costs, as provided in section 4.1.3.2 of
TANC Project Agreement No. 3. Nothing in this Amendment No. 2 shall affect or
limit the other obligations of PALO ALTO under TANC Project Agreement No. 3,
such as, by way of example and not as a limitation, the obligations of PALO
ALTO to pay to TANC an amount equal to PALO ALTO’s Participation
Percentage of TANC Project Indebtedness issued and sold for certain future
Additions under section 3.1.2.2.2, and Replacements under section 3.1.2.2.3 of
TANC Project Agreement No. 3.
Section 3. Integration.
Except as amended and modified by Amendment No. 1 and this Amendment
No. 2, the LTLA remains in full force and effect, without change to any of its
provisions other than the text expressly altered by this Amendment No. 2. On the
Effective Date this Amendment No. 2 and the LTLA shall be one, integrated
agreement.
The Parties have duly executed and delivered this Amendment via their
authorized representatives set forth below.
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5
TRANSMISSION AGENCY OF TURLOCK IRRIGATION DISTRICT
NORTHERN CALIFORNIA
By: By:
Its: Its:
Dated: Dated:
CITY OF PALO ALTO SACRAMENTO MUNICIPAL
UTLITY DISTRICT
By: By:
Its: Its:
Dated: Dated:
MODESTO IRRIGATION DISTRICT CITY OF ROSEVILLE
By: By:
Its: Its:
Dated: Dated:
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Utilities Advisory Commission
Staff Report
From: Dean Batchelor, Director Utilities
Lead Department: Utilities
Meeting Date: December 6, 2023
Staff Report: 2311-2263
TITLE
S/CAP Strategic Plan on the Reliability and Resiliency for the Electric Distribution Utility
RECOMMENDATION
Staff Recommends the Utilities Advisory Commission (UAC) Recommend the City Council
Approve the Reliability and Resiliency Strategic Plan1 for the Electric Distribution Utility
EXECUTIVE SUMMARY
At the September 6, 2023 UAC meeting staff and the UAC discussed a work plan for development
of a Reliability and Resiliency Strategic Plan (RRSP). The RRSP is a work item in the 2023-2025
Sustainability and Climate Action Plan (S/CAP) Work Plan. This work item was intended to address
the need for a reliable, well maintained electric system with enhanced reliability to support an
electrified community and a desire among some community members for ways to maintain some
level of electric supply during outages, particularly with an electrified home. Staff has developed
a Draft RRSP1 and has begun implementation of some items. This report provides an overview of
the RRSP and a progress update from December 20232. Staff is requesting the UAC recommend
the Council approve the RRSP.
The six strategies of the RRSP are described in depth in the report, but are as follows:
•Strategy 1: Replace and modernize electric distribution infrastructure
•Strategy 2: Implement operational practices to improve reliability and manage outages
effectively
1 Draft Strategic Plan for Reliability and Resiliency https://www.cityofpaloalto.org/files/assets/public/v/2/agendas-
minutes-reports/agendas-minutes/utilities-advisory-commission/archived-agenda-and-minutes/agendas-and-
minutes-2023/12-dec-2023/new-folder/12-06-23-id-2307-1780-attachment-a-rrsp-draft-for-discussion-and-
approval.pdf
2 RRSP Progress Update from December 2023 https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-
minutes-reports/agendas-minutes/utilities-advisory-commission/archived-agenda-and-minutes/agendas-and-
minutes-2023/12-dec-2023/new-folder/12-06-23-id-2307-1780-attachment-b-rrsp-progress-update.pdf
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•Strategy 3: Integrate and ease adoption of flexible and efficient technologies and
strategies
•Strategy 4: Evaluate the benefits of flexible and efficient technologies and strategies to
the utility and community
•Strategy 5: Evaluate utility-driven programs to promote adoption of flexible and efficient
technologies and strategies
•Strategy 6: Implement any utility-driven programs identified in Strategy 5 that are chosen
by the community
BACKGROUND
A core part of City of Palo Alto Utilities Department (CPAU) mission is to provide safe and reliable
electric supply and distribution services. On-going activities to support this mission include
proactive maintenance of the electric distribution system, replacement of aging distribution
system components, procuring and delivering sufficient electric supplies to meet Palo Alto
electric demands, and advocating for the upgrade and maintenance of a reliable bulk
transmission grid in California. The focus of the RRSP is the electric distribution system reliability
and resiliency. An overview of the distribution system description and topology3 is provided for
context for the RRSP.
CPAU along with Emergency Services has engaged with the community regularly to seek feedback
on the role of the City to enhance the levels of resiliency service. Two public meetings were held
in August 20184, and November 20195 to seek community input on a utility resiliency framework.
The engagement resulted in the development of a vision, set of goals to enhance utility resiliency
– these aspects were discussed with the UAC in March 20206, and has since been incorporated
into the CPAU’s on-going work plans.
Based on this public engagement, CPAU’s resiliency objective to advance the Utility to become a
“Smart” Utility, able to assist the City prepare, respond, support, and rebound from manmade
and natural disasters. Smart in this context was defined by the community to mean advanced
3 Description of Electric Distribution System Topology
https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/agendas-minutes/utilities-
advisory-commission/archived-agenda-and-minutes/agendas-and-minutes-2023/12-dec-2023/new-folder/12-06-
23-id-2307-1780-attachment-c-description-of-electric-distribution-system-topology.pdf
4 UAC August 2018 Agenda https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-
reports/agendas-minutes/utilities-advisory-commission/archived-agenda-and-minutes/agendas-and-minutes-
2018/final-uac-agenda-8-22-18-special-resiliency-workshop-agenda.pdf
5 Resiliency workshop#2: https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-
reports/agendas-minutes/utilities-advisory-commission/archived-agenda-and-minutes/agendas-and-minutes-
2019/11-06-19-meeting/final-uac-agenda-november-13-2019.pdf
6 Discussion of Resiliency Workshops: Follow-up and Next Steps
https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/agendas-minutes/utilities-
advisory-commission/archived-agenda-and-minutes/agendas-and-minutes-2020/03-05-2020-special/item-no.-1-
mini-packet-id-11074.pdf
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grid technologies such as advanced meters, but also includes non-tech solutions (coordinate with
neighborhood group and via other communication channels) and backup generation.
On June 6, 2023 Council adopted the Sustainability and Climate Action Plan (S/CAP) and the 2023-
2025 S/CAP Work Plan, which included a work item to complete a Reliability and Resiliency
Strategic Plan (RRSP) and policy guidelines to guide its development. This work item was intended
to address the need for a reliable, modernized electric system with enhanced reliability to
support an electrified community and a desire among some community members for ways to
maintain some level of electric supply during outages, particularly with an electrified home. On
September 6, 2023 staff presented the Utilities Advisory Commission staff’s approach for
developing the RRSP7.
This report presents the RRSP for the UAC’s consideration and recommendation for approval by
the City Council. The RRSP lays out six strategies to address the issues noted above, several of
which are being implemented on an on-going basis while others require further analysis and
resources for implementation of projects.
DISCUSSION
The RRSP encompasses actions related to maintaining and upgrading many of the electric
distribution system elements as described in the RRSP Electric Distribution System Topology8, to
meet higher electrical energy demands, enable customer deployment of new technologies to
lower cost and increase resiliency, and to efficiently utilize electrical service and the distribution
grid.
The six strategies for the RRSP are:
•Strategy 1: Replace and modernize electric distribution infrastructure
•Strategy 2: Implement operational practices to improve reliability and manage outages
effectively
•Strategy 3: Integrate and ease adoption of flexible and efficient technologies and
strategies
•Strategy 4: Evaluate the benefits of flexible and efficient technologies and strategies to
the utility and community
•Strategy 5: Evaluate utility-driven programs to promote adoption of flexible and efficient
technologies and strategies
•Strategy 6: Implement any utility-driven programs identified in Strategy 5 that are chosen
by the community
7 Staff Report: https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/agendas-
minutes/utilities-advisory-commission/linking-documents/09062023-id-208-1934-uac.pdf
8 RRSP Electric Distribution System Topology https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-
minutes-reports/agendas-minutes/utilities-advisory-commission/archived-agenda-and-minutes/agendas-and-
minutes-2023/12-dec-2023/new-folder/12-06-23-id-2307-1780-attachment-c-description-of-electric-distribution-
system-topology.pdf
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These strategies are outlined below and describe the steps CPAU is currently taking and plans to
take to maintain and enhance the electric distribution system reliability and resiliency.
Strategy 1: Replace and modernize electric distribution infrastructure
To avoid outages the utility must replace aging infrastructure, upgrade the electric system’s
capacity to ensure it can accommodate new technologies and electrification measures into the
distribution system, and increase the interconnectedness of the system, both internally and with
the PG&E transmission system. Infrastructure investment to reduce wildfire risk will also reduce
outages. Actions in this area would be coordinated with the Fiber to the Premises project and
wildfire mitigation plan.
The RRSP actions for this strategy are as follows:
1.1 Replace aging infrastructure
1.2 Upgrade capacity to accommodate new loads
1.3 Improve switching to improve system flexibility, efficiency, and reliability
1.4 Identify and construct second transmission connection
1.5 Underground distribution system in Foothills area
The electric utility’s grid modernization effort, expected to be completed by 2030, will accomplish
actions 1.1, ,1.2, and 1.3. The utility will replace much of this infrastructure over a seven-year
grid modernization effort while simultaneously addressing the need to increase capacity to meet
new and increasing customer loads. A coordinated, planned investment to address new capacity
is needed to avoid operational issues caused by new load installed without permits, and to ensure
the utility can keep up with utility service upgrade applications for new load additions. The grid
modernization project will also include additional distribution feeder circuit ties and switches so
that in the event of a fault or an overload of substation transformer, a neighborhood could be
served by switching to a second feeder. This will also allow flexibility in configuring the
distribution system for efficiency, reducing system losses, and enable improved integration of
new solar and storage on the system. An additional benefit is that planned upgrades to 12 kV
distribution voltages (from 4 kV, currently) in several neighborhoods will reduce energy losses on
the distribution system.
CPAU continues to work with the CAISO and PG&E to connect to the transmission grid via a
second transmission line to eliminate potential service disruptions made more likely by the fact
that the City is currently served via a single transmission corridor. In addition, wildfire risk in the
foothills creates the potential for outages during windy high fire risk days if the utility needs to
shut off service to avoid the risk of electric lines being blown into trees and starting wildfires. The
utility is undergrounding lines in the Foothills to minimize this risk.
Strategy 1 Progress To-Date and Next Steps
The City’s grid modernization project is underway, based on an electric engineering study which
identified upgrades throughout the distribution system, including line transformer capacity,
feeder capacity, increasing the number of switches and connections on the system between
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feeders and substations, and upgrading substation equipment. The program has the following
timeline:
•Upgrade transformer and feeder capacity in the overhead sections of the system (which
represent over 90% of single-family neighborhoods) by the end of 2027.
•Upgrade underground sections by 2030.
•Add switches, connections, and upgrade substations by 2030.
Construction on the first modernization project is starting in Q1 2024 in a 1200-home
neighborhood bounded by Louis, Amarillo, 101, and Embarcadero, followed by additional
neighborhoods. The modernization projects will be coordinated with fiber to the premise
construction.
Staff, with assistance from a consultant, continues to work with the CAISO and PG&E to build a
second transmission line to the Adobe Creek Substation, from Moffett field, but no definitive
progress has been made to date.
A key wildfire mitigation activity is undergrounding eleven miles of electric lines in the Foothills
area. This project involves installing substructure work, including boxes for electric and fiber
lines; removing electric lines and fiber lines from poles; and installing pad-mount equipment
where possible. This iterative project consists of multiple phases and is expected to be
complete in 2025. CPAU already installed two of four required substructures and is designing
the next two. The first two phases were completed in September of 2023.
Strategy 2: Implement operational practices to improve reliability and manage outages
effectively
This strategy involves minimizing the number of outages by reducing operational risks that lead
to outages. If key staff positions are not filled it becomes difficult to keep up with investment and
maintenance, to operate the system, or to recover from outages. Without active and effective
tree trimming, the risk of outages related to wildfires increases. Communication during outages
is also critical to help residents understand what is happening and take what steps are needed
for their health, safety, and comfort.
The RRSP actions for this strategy are as follows:
2.1 Strengthen the workforce
2.2 Employ best maintenance practices for wildfire protection
2.3 Communicate effectively during outages
Strategy 2 Progress To-Date and Next Steps
Concerted efforts are currently underway to recruit, train, and retain line-workers, system
operators, engineers, inspectors to maintain system and respond to outages effectively. Staff
have also contracted with third-party contractors to supplement staff to undertake emergency
response, maintenance, and capital improvement projects. Staff regularly updates its Wildfire
Mitigation Protection Plan to protect power lines in the Foothills, and staff is exploring innovative
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software to make vegetation management more efficient. In September 2023 CPAU
implemented and operationalize a new Outage Management System (OMS). The new OMS will
also allow CPAU to more quickly detect and respond to power outages and provide customers
with timely notifications and updates.
Strategy 3: Integrate and ease adoption of flexible and efficient technologies and strategies
Many technologies being added to the electric system are capable of charging and discharging,
generating electricity, or flexing their electric use by time of day. Technologies include rooftop
solar, home batteries, vehicle to home and vehicle to grid systems, grid-responsive home
equipment and smart EV charging, and smart electrical panels and circuit sharing devices at
home, etc. These technologies can also create challenges for the distribution system at high
penetrations, resulting in voltage issue, reverse current flows resulting in failures in system
protection, or other issues because the system is not designed for them. But they can also create
benefits when used well, reducing the cost of electricity, reducing emissions, reducing strain on
the local distribution system, reduce the need for electrical panel upgrades by customers, and
creating home resiliency. Effective integration will make the system operate more efficiently,
especially when paired with best practices for installing and operating them. And these
technologies can be even more effective when paired with efficient electrification practices like
circuit sharing, installing lower-voltage EV chargers and heat pumps, and improving building
efficiency to enable heat pumps to be sized smaller.
The RRSP actions for this strategy are as follows:
3.1 Configure the distribution system to accommodate high penetrations of solar, batteries, and
other technologies
3.2 Review, communicate, and streamline permitting and other regulatory rules for efficient
electrification strategies9
3.3 Communicate how to electrify efficiently
3.4 Communicate how to use technologies in a grid-friendly way
These actions remove barriers to installation of these types of technologies and electrification
strategies. The study and design of the grid modification project includes accommodation of high
penetration of solar, storage, vehicle to grid, and other technologies and enabling of these
systems to be installed more easily, with fewer utility engineering studies needed. Ensuring they
are accommodated easily and routinely by the City’s permitting system is also important. In
parallel with these barrier reduction efforts staff will develop communications and outreach to
promote these technologies and explain how to use them in a grid-friendly way (e.g. setting EV
chargers, batteries, and other flexible loads to charge or operate outside evening hours,
especially mid-day, and to discharge in the evenings). As advanced metering infrastructure (AMI)
is installed and time of use rates become viable, these rates will enhance this communication.
9 RRPS Efficient Electrification Strategies https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-
reports/agendas-minutes/utilities-advisory-commission/archived-agenda-and-minutes/agendas-and-minutes-
2023/12-dec-2023/new-folder/12-06-23-id-2307-1780-attachment-d-efficient-electrification-strategies.pdf
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Strategy 3 Progress To-Date and Next Steps
Staff has completed two studies on high penetration of solar and storage. These studies identified
the risk of feeder and transformer capacity issues, voltage problems, and system protection
issues that could result from high penetrations of solar and storage, particularly under “reverse
flow” conditions (when power is flowing in the opposite direction than the system is designed
for). Solutions involve upgrading the distribution system to operate under reverse flow
conditions, including:
•upgrading up to 15 feeders and 10 substation transformers,
•installing equipment capable of maintaining voltage and under reverse flow,
•installing system protection (breakers, relays) capable of operating under reverse flow,
•changing system operating practices where needed
•transferring loads among feeders to balance loads on the substation transformers
•Exploring “smart” (microprocessor-based) controls for voltage regulation, protection,
and automatic switching
Staff believes that these upgrades will also enable higher penetrations of vehicle to grid
technologies and other flexible loads, but is currently studying this to confirm.
As noted above, staff is continuing its studies on integrating flexible technologies with the
distribution system. Staff has begun cross-department discussions with City permitting
departments to ensure there is clarity on how these technologies are treated under the City’s
permit processes. There has already been a fair amount of attention on solar and storage
permitting to-date, but staff is expanding the discussion to include technologies like smart vehicle
charging, smart panels, and efficient electrification strategies involving circuit pausers and lower-
voltage equipment. When this step is completed staff will develop resources and outreach to
help and encourage residents to employ these strategies and install this equipment, including
instructions on how to best use the equipment to reduce emissions, costs, and minimize
distribution system impacts. Staff is aiming to complete these steps by March 2024, but
competing priorities and staff constraints may slow progress. Development of time of use rates
is in progress through the City’s electric cost of service study, which staff is aiming to complete
for Council adoption in June 2024. The transition to time of use rates is dependent in part on the
rollout of the City’s AMI system.
Strategy 4: Evaluate the benefits of flexible and efficient technologies and strategies to the
utility and community
These resiliency-enhancing and utility demand responsive new technologies are in different
stages of adoption and commercialization. Operationalizing these distributed technologies for
the benefit of the grid also takes considerable resources for a small utility like CPAU, and having
a framework for valuing the benefits to the utility and community is important. This strategy will
examine various benefits of adopting these technologies to the utility, the individual customer,
and the community. Based on this analysis, Strategy 5 will develop different program options for
community/Council consideration.
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The RRSP actions for this strategy are as follows:
4.1 Determine the utility value of new technologies and impact to electric supply costs
4.2 Explore the utility value of new technologies on electric distribution costs and capacity
4.3 Explore estimating the value of resiliency for the community
4.4 Estimate the cost of individual customer community resiliency approaches
Staff already has some experience valuing the benefits of solar, storage, and other flexible
technologies to the electric utility’s supply costs and plans to hire a consultant to complete this
evaluation. These technologies could also potentially yield benefits to the distribution system.
The utility may be able to reduce the amount of new capacity needed to accommodate electrified
buildings and vehicles or use existing capacity more efficiently to allow for more electrification in
areas of the distribution system even before they are upgraded via the grid modernization
project. Valuing these benefits is far more complex than valuing the benefits to the utility’s supply
costs. Lastly, staff will explore how to quantify the value of having backup power to various
segments of the community. This analysis is also complex since different individuals, businesses,
nonprofits, and government agencies will value resiliency differently. One way to approach this
analysis is to assess the average cost of the most common technologies available to these
customers right now to provide resiliency.
Strategy 4 Progress To-Date and Next Steps
Staff has done several analyses of the value of energy storage to the community over the last
decade, with the most recent being in 2020. These analyses have primarily focused on the value
to the electric utility’s supply costs, though some analyses have included customer benefits as
well, including resiliency benefits. Staff is developing a Request for Proposals (RFP) to hire a
consultant to update these analyses. This consultant will likely focus on valuing the electric supply
costs, the resiliency benefits, and the cost to customers of achieving resiliency during outages
through commonly available strategies and technologies such as:
1.Emergency preparation
2.Generators (diesel, propane, natural gas)
3.Solar with backup power inverter
4.Battery storage system without solar
5.Solar + storage
6.Vehicle to load
7. Vehicle to home (with / without solar)
Valuing the benefits to the distribution system is more complex and will likely require a different
approach since it requires much more in-depth modeling of the electric distribution system. This
will be an intensive exercise, not something that can be achieved in-house with existing staffing
without impacting the grid modernization project. Staff is in discussion with its electric
engineering consultants on how to approach the analysis and is also exploring academic
partnerships on the topic.
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Cost for implementing these resiliency solutions at various locations will also be explored.
Locations include single-family homes, multiple family homes, homes of vulnerable residents,
partnerships with major commercial facilities (e.g. VMware), community centers (e.g. libraries,
fire stations), neighborhood and substation level, etc.
Strategy 5: Evaluate utility-driven programs to promote adoption of flexible and efficient
technologies and strategies
Based on the cost and value of various demand reduction and resiliency solutions investigated in
Strategy 4, staff and its consultants will develop outlines of potential CPAU programs for the
community and associated resources needs for such programs. The goal of this strategy is to
characterize and estimate resource needs for the potential program approaches described below
and to provide policy options for Council’s consideration and for the allocation of appropriate
resources.
The RRSP actions for this strategy are as follows:
5.1 Evaluate utility-driven programs to enhance resiliency and lower the demand on the grid
5.2 Evaluate equity-based and need-based versions of the programs
5.3 Evaluate community-based versions of the programs
5.4 Evaluate other resiliency approaches
These four actions involve doing a high-level review of potential strategies for utility-driven
programs that could enhance resiliency and reduce grid impacts in a variety of contexts.
Implementing any of these programs would be an expansion of the utility’s role in providing
resiliency. To-date, utility customers with the need for a higher level of reliability and resiliency
than the utility provides have made their own arrangement for generators or other backup
systems. Pursuing any of the programs listed below would involve expanding the utility’s role,
which would require resources. The resource need would depend on how time-intensive and
costly the program is. Outreach, education, and providing resources would be the least time-
intensive and costly, while utility programs to facilitate installation of flexible technologies, direct
utility control of these technologies, or neighborhood microgrids would require the most effort
and cost.
Under these four actions staff would evaluate possible utility programs to help community
members install grid-responsive equipment, solar, storage, and vehicle to home or vehicle to grid
solutions. This could involve strategies like incentives, technical assistance, expansion of the
current Clean Energy Accessible Now (CLEAN) program tariff, direct installation through a utility
program, or a public-private partnership with a flexible load aggregator. Types of locations to
investigate would include single-family homes, multi-family buildings, and partnerships with
major facility owners. These programs would then be reviewed to determine what features might
be needed to enable them to serve lower-income customers or customers with medical needs.
Versions of the programs specifically focused on providing community benefits, such as through
installations at community centers or partnerships with major facilities that could provide both
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private and community benefits. And lastly, other strategies like mobile battery storage and
neighborhood microgrids would be evaluated.
To be clear, these evaluations would not result in actionable programs that could be adopted.
They would only do a high-level preliminary review of the pros and cons of specific strategies and
identify the resources needed to do a more complete evaluation. This would support Council
policy discussions on which of the strategies to devote resources to investigating further. New
staff and budget resources would almost certainly be required.
Strategy 5 Progress To-Date and Next Steps
As noted under strategy 4, staff is currently preparing a request for proposals (RFP) for a
consultant to help with implementation of RRSP strategies 4 and 5. The consultant would perform
the valuation analyses outlined in Strategy 4 and review a City-provided list of potential utility-
driven approaches to expand the use of flexible technologies in Palo Alto to decrease supply
costs, carbon emissions, and distribution system costs while enhancing community resiliency. A
draft list of program features, technologies, and locations is in RRSP Strategy 5, Action 1:
Evaluate possible utility programs to help community members install grid-responsive
equipment, solar, storage, and/or vehicle to home or vehicle to grid solutions. Program
approaches could include, but are not limited to, incentives, technical assistance, power
purchase agreements or feed-in tariffs, direct installation and possibly ownership of
equipment, or public-private partnerships with an aggregator. Types of locations to
investigate include single-family homes, multi-family buildings, at small and medium
businesses, or in larger commercial facilities in Palo Alto.
In addition, Strategy 5, Actions 2 and 3 are to evaluate how the program ideas developed under
Action 1 need to be adjusted to address the needs of low-income residents, residents with
medical needs, or how they could be tailored to provide community-wide benefits via installation
at community facilities or via public-private partnerships. Lastly, staff intends to address mobile
battery storage and neighborhood or substation level microgrids as noted in Action 4.
Staff is seeking UAC feedback on whether the technologies, program approaches, and locations
that are listed in Actions 1-4 address the range of potential utility programs the community
expects to see in this analysis. This list will form part of the basis for the RFP and consultant
contract scope.
Automated demand response programs to reduce electric utility supply costs may be easier to
implement than other utility programs, since they are more commercialized. For example, staff
is currently evaluating an electric vehicle telematics-based smart charging demand response
program that may be able to lower the impact of EV charging on statewide peak demands and
reduce utility supply costs. Staff has determined the cost and resources required to implement
such a program in Palo Alto outweighs the value of such a customer program at this time. Staff
is monitoring the implementation of such programs at other utilities and may revisit merits of
this program in the 2025-26 timeline, after the implementation of advanced electric meters.
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Strategy 6: Implement any utility-driven programs identified in Strategy 5 that are chosen by
the community
Specific actions under this strategy would depend on the outcomes of the policy discussions
following the studies completed for Strategies 4 and 5. Implementation of any programs would
likely require additional staffing and budget resources.
FISCAL/RESOURCE IMPACT
Strategy 1: Replace and modernize electric distribution infrastructure: Implementation of this
strategy has already been budgeted as CIP for Grid Modernization. Cost is estimated at $200 to
$300 million and would require 5 to 8 FTE staff over the seven-year period. This estimate includes
replacement of aging infrastructure and to increase capacity of the system to accommodate
additional loads projected as a result of electrification. The cost of the second transmission line
has not been estimated.
Strategy 2: Implement operational practices to improve reliability and manage outages
effectively: The new utility outage management system became operational in September 2023
and the system costed $630,000, including five years of annual maintenance. Ongoing 0.25 FTE
of staffing effort would be required to maintain the system. Other activities under this strategy
are operationalized and would not require any additional resources.
Strategy 3: Integrate and ease adoption of flexible and efficient technologies and strategies: This
effort is estimated to cost $30,000 to $50,000 for consulting assistance and 0.25 FTE of staff
effort. This amount would solely cover analysis and not any subsequent implementation.
Strategy 4 & 5: Evaluate the benefits of flexible and efficient technologies and strategies to the
utility and community and Evaluate utility-driven programs to promote adoption of flexible and
efficient technologies and strategies: The plan to retain a consultant to assist with this analysis
effort and is estimated to cost $70,000 to $120,000, and will require 0.25 FTE of existing staff
effort to complete the analysis and bring forth potential customer programs for community
consideration. In addition, more consulting work or academic partnerships may be needed at
additional cost and staff time to value the distribution benefits of flexible and efficient
technologies and strategies (Task 4.2).
Strategy 6: Implement any utility-driven programs identified in Strategy 5 that are chosen by the
community for implementation: The effort and cost associated with this strategy is unknown at
this time.
STAKEHOLDER ENGAGEMENT
Extensive public engagement on this topic was undertaken to-date as outlined below:
•Two public meetings in August 2018 and November 2019 to seek community input on utility
resiliency framework. The engagement resulted in the development of a vision, set of goals
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and nine projects to enhance utility resiliency – these aspects were discussed with the UAC
in March 2020, and has since been incorporated into the CPAU’s on-going work plans.
•Discussion of these topics with the S/CAP Working Group 2022-23
•Addition of topic to 2023-2025 S/CAP Work Plan, which was discussed with S/CAP Working
Group and S/CAP Committee, then adopted by Council June 6, 2023 (Report #:2303-1158)10
•Discussions with the UAC on a variety of reliability and resiliency topics over the past three
years, 2021-23: OMS updates, Wildfire Mitigation Plan, Workforce, etc.
•Analysis of the Impact of Decarbonization on the Resiliency of Single Family Homes in Palo
Alto11 was presented to the UAC November 2021
•Analysis of Costs and Reliability of Different Back-up Electricity Technologies12 presented to
the UAC in December 2022.
•Strategic Plan discussions w/ UAC (which include resiliency topics)
•Electric Distribution Infrastructure Modernization Update13 provided to the UAC in June
2023
•Discussion of Reliability and Resiliency Strategic Plan Policy Guidelines14 with the UAC in
September 2023
Progress in implementing the RRSP will be reported to the UAC periodically as progress is made
in implementing projects contemplated under the plan.
ENVIRONMENTAL REVIEW
Development of a Reliability and Resiliency Strategic Plan is exempt from the California
Environmental Quality Act (CEQA) because it can be seen with certainty that completing a study
will not result in any environmental impacts. Implementation of individual programs/installations
chosen by the community in Strategy 6 that may need CEQA evaluation.
ATTACHMENTS
10 Staff Report2303-1158: https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-
reports/agendas-minutes/utilities-advisory-commission/reference-files/060523-id-2303-1158.pdf
11 Impact of Decarbonization on the Resiliency of Single Family Homes in Palo Alto:
https://www.cityofpaloalto.org/files/assets/public/v/2/agendas-minutes-reports/agendas-minutes/utilities-
advisory-commission/archived-agenda-and-minutes/agendas-and-minutes-2021/11-03-2021-regular/id-13608.pdf
12 Costs and Reliability of Different Back-up Electricity Technologies:
https://www.cityofpaloalto.org/files/assets/public/v/2/agendas-minutes-reports/agendas-minutes/utilities-
advisory-commission/archived-agenda-and-minutes/agendas-and-minutes-2022/12-07-2022/12-07-2022-agenda-
and-packet.pdf
13 Electric Distribution Infrastructure Modernization Update:
https://www.cityofpaloalto.org/files/assets/public/v/2/agendas-minutes-reports/agendas-minutes/utilities-
advisory-commission/reference-files/electrification-modernrization-plan-6-7-2023.pdf
14 Discussion of Reliability and Resiliency Strategic Plan Policy Guidelines:
https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/agendas-minutes/utilities-
advisory-commission/archived-agenda-and-minutes/agendas-and-minutes-2023/09-sep-2023/09-06-2023-uac-
packet.pdf
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Attachment A: Presentation
AUTHOR/TITLE:
Dean Batchelor, Director of Utilities
Staff: Jonathan Abendschein, Assistant Director of Utilities/Resource Management
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December 6, 2023 www.cityofpaloalto.org
Reliability and Resiliency Strategic Plan Adoption
Utilities Advisory
Commission
.CITY OF
. PALO ALTO
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1
Background
•2022 Discussions w/ S/CAP Committee and Working Group
•Highlighted need for modernizing grid, enhancing capacity, reliability
•Council Adoption of 2023-2025 S/CAP Work Plan (June 6, 2023)
•Adopted with S/CAP on June 6, 2023
•Included Reliability and Resiliency Strategic Plan
•Guidelines for plan development included in Appendix D
•September 6, 2023 UAC Discussion
•General support for the approach
•Feedback on how to improve task framing
•Feedback on how to incorporate resiliency in the plan
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1
Proposed Reliability & Resiliency Strategic Plan
•Strategy 1: Replace and modernize electric distribution infrastructure
•Strategy 2: Implement operational practices to improve reliability and
manage outages effectively
•Strategy 3: Integrate and ease adoption of flexible and efficient
technologies and strategies
•Strategy 4: Evaluate the benefits of flexible and efficient technologies
and strategies to the utility and community
•Strategy 5: Evaluate the resource needs for various demand reduction
and resiliency programs
•Strategy 6: Implement any utility-driven programs identified in Strategy
5 that are chosen by the community
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Achievements To-Date
•Grid modernization construction starting Q1 2024 (Task 1)
•Increase capacity, reliability, efficiency
•Replace aging infrastructure
•Developed plan for solar and storage integration (Task 1)
•Made progress on recruitment and retention (Task 2)
•Developed/implemented Foothills wildfire strategies (Task 2)
•Installed new outage management system (Task 2)
~CITY OF
~PALO ALTO
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1
Implementation Activities In Progress
•Ongoing efforts related to Tasks 1 and 2 –grid modernization,
recruitment and retention, wildfire management, etc.
•Reviewing efficient electrification and flexible technologies
against permit / interconnection processes (Task 3)
•Developing efficient electrification outreach program and
exploring efficient electrification technical assistance (Task 3)
•Getting partnerships in place to analyze the impact of flexible
load management on grid capacity (Task 4.2)
•Establishing consulting contract to evaluate cost/benefit and
resource needs of potential resiliency programs (Tasks 4 and 5)
~CITY OF
~PALO ALTO
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1
Recommendation
Staff Recommends the Utilities Advisory Commission
Recommend the City Council Approve the Reliability and
Resiliency Strategic Plan for the Electric Distribution Utility
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Item #5
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Jonathan Abendschein
Assistant Director of Utilities/ Resource Management
jon.abendschein@cityofpaloalto.org
(650) 329-2309
CI TY OF
PALO
ALTO
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