Loading...
HomeMy WebLinkAbout2025-09-19 Climate Action and Sustainability Committee Summary MinutesCLIMATE ACTION & SUSTAINABILITY COMMITTEE SUMMARY MINUTES Page 1 of 13 Regular Meeting September 19, 2025 The Climate Action & Sustainability Committee of the City of Palo Alto met on this date in the Community Meeting Room and by virtual teleconference at 1:30 P.M. Present In-Person: Vice Mayor Veenker (Chair), Councilmember Burt, Councilmember Lu Present Remotely: None Absent: None Call to Order Vice Mayor Veenker called the meeting to order. Public Comment None Standing Verbal Reports A. Staff Comments Brad Eggleston, Director of Public Works, announced that the Palo Alto Horizontal Levee Pilot Project began construction last week. The levee will be about 500 feet long. This is the first nature-based horizontal levee to be built in San Francisco Bay that will beneficially reuse treated wastewater for irrigation. The levee will provide habitat enhancement, sea level rise adaptation, and additional wastewater treatment. The project is estimated to be completed in early 2026. More information can be found at www.paloalto.gov/horizontallevee. B. Committee Member Comments and Announcements Vice Mayor Veenker mentioned that next week is the annual Northern California Power Agency Conference, she will report back on that. The Governor signed the Cap-and-Invest legislation and the Pathways Initiative that extends energy markets throughout the western states so California solar- powered energy can be sent outside the state and take advantage of New Mexico wind, etc. Action Items 1. Recommendation to the Climate Action and Sustainability Committee to receive the City of Palo Alto One Water Plan and Associated Letter from the Utilities Advisory Commission for Future Water Supply and Conservation Planning Purposes, and Potential Direction to Staff SUMMARY MINUTES Page 2 of 13 Climate Action & Sustainability Committee Regular Meeting Summary Minutes: 9/19/2025 Karla Dailey, Assistant Director of Utilities, noticed the incorrect slide deck was in the agenda packet. The One Water Plan (OWP) completed a key action in the Sustainability and Climate Action Plan (S/CAP) to develop a plan for implementing a One Water portfolio, a water supply plan that will analyze the City’s potential water supply priorities and conservation opportunities. OWP is framework for Council to make decisions regarding future water supply and water conservation portfolio if reliability becomes a concern. The time horizon for this study was 20 years (2025-2045). Staff can use the study’s Excel-based tool for future analysis. Cost estimates were included. This study was not a detailed feasibility analysis. If the Council wanted to consider a City project or in partnership with other water agencies, a more detailed feasibility analysis would be needed before moving forward. The OWP’s project screening criteria were estimated yield, whether it increased supply reliability in drought years, and cost. The portfolio evaluation criteria included environmental and ecological benefits, ease of implementation and timeline, cost, reliability, operational complexity, public acceptance, wise use of water, and reliance on the Tuolumne. The criteria weights were suggested through stakeholder engagement meetings with the community, interdepartmental staff, and an online survey. The One Water Portfolios were: (A) Baseline, which is San Francisco Public Utilities Commission (SFPUC) Regional Water System Water Supply, (B) SFPUC + Enhanced Conservation Phases 1 and 2, (C) SFPUC + Enhanced Conservation + Bay water desalinization, (D) SFPUC + Enhanced Conservation + groundwater with treatment, (E) SFPUC + Enhanced Conservation + Palo Alto-owned direct potable reuse, (F) SFPUC + Enhanced Conservation + indirect potable reuse, and (G) SFPUC + Enhanced Conservation + regional direct potable reuse. A slide was shown of the measures planned for Conservation Phase 1 and Conservation Phase 2. The City was planning projects in the near to medium- term to use groundwater if needed in a drought. Currently, SFPUC used chloramine but Palo Alto does not have ammonia capabilities. Because of the difference in chemical treatment, the pipes had to be empty to use groundwater wells for drinking water. Groundwater wells need modification to blend groundwater with SFPUC water, which staff was interested in doing but it had not been budgeted. A slide was shown of the FY 2045 projected residential monthly bill impact of each OWP portfolio. Staff planned to implement ongoing/planned conservation, explore Enhanced Conservation measures, monitor funding opportunities, and participate in the Bay Area Water Supply & Conservation Agency (BAWSCA) Strategy 2050 Project. The installation of AMI meters enabled customers to view their usage and be alerted to water leaks. The following events may warrant revisiting the OWP: In 2027, the SFPUC will update their Alternative Water Supply Plan. Valley Water will make a decision regarding their option to transfer approximately half the effluent from the RWQCP for south Santa Clara County uses; the option expires at the end of 2032. The State will make a decision regarding Bay Delta Plan implementation. Other events or conditions could affect water supply reliability or cost. New water supply technologies or regional partnership opportunities may warrant revisiting the OWP. Staff worked closely with Public Works throughout this process on the plan scope, stormwater capture, and green stormwater infrastructure. The UAC’s letter was included in the Committee’s packet. The UAC felt that investment in a large infrastructure project was not warranted at this time, decisions should be made with full transparency regarding the attributes of alternative water supply projects and not just weighted scoring, regional partnerships were key to future water supply planning, direct potable reuse will require extensive regional outreach, and concern regarding SFPUC’s projected water supply shortage during droughts. Staff received an email today from 2 UAC commissioners stating their SUMMARY MINUTES Page 3 of 13 Climate Action & Sustainability Committee Regular Meeting Summary Minutes: 9/19/2025 concerns about a large infrastructure project as well as concerns with the weighting and scoring methodology. Item 1 Public Comment 1. Peter Drekmeier, Policy Director for the Tuolumne River Trust, stated that basing the One Water Plan on the premise of 50 percent rationing was a fatal flaw. That number came from the SFPUC’s design drought, which was aimed at justifying their opposition to the Bay-Delta Water Quality Control Plan. SFPUC’s long-term vulnerability assessment suggested the design drought might occur once in 8000 years. SFPUC’s demand projections tended to be about 20 percent higher than actuals. The City spent $559,000 on a report that will sit on a shelf. BAWSCA was embarking on their Long- Term Reliable Water Supply Strategy. Mr. Drekmeier advised Cities to calculate how much water they needed instead of repeating Palo Alto’s mistake of using SFPUC’s numbers. Valley Water’s Drought Water Supply Management Plan was based on a 6-year drought (’87-‘92). The SFPUC combined the 6-year drought with the driest 2-year period on record (’76-’77) to create a design drought 72 percent more severe than Valley Water’s. SFPUC’s Alternative Water Supply Strategy suggested we might need 92 million gallons/day of alternative water supply costing $17 billion, which would result in exorbitant rates for water we do not need. Using Valley Water’s drought plan and with the Bay-Delta Water Quality Control Plan in effect, Mr. Drekmeier said Palo Alto could make it through the 6-year drought without requiring rationing and without developing alternative water supplies; rationing could add a year. The Delta Reform Act of 2009 called for coequal goals of ensuring reliable water supply and restoring the Bay-Delta ecosystem and the rivers that feed it such as the Tuolumne. 2. Dave W. noted the One Water Plan was based on 50 percent rationing, which came from an extremely rare drought model and a substantial increase in demand. Councilmember Stone wrote a letter to SFPUC asking them to provide the probability analysis for their drought model and SFPUC responded that they were not going to provide the information. Dave W. had a financial background and thought it was basic information for a planner to know the risk. Dave W. asked the Committee to reject the One Water Plan to send a signal saying the City needed this data to make a rational determination on whether we have a water supply issue. SFPUC’s long-term vulnerability assessment alluded to the design drought occurring once in 70,000 years, once in 8000 years was at the low end. It also incorporated climate change. A study session with 9 climate scientists discussed that precipitation from climate change would turn snow into water sooner but there was no significant adverse impact. The SFPUC used a dam or storage-based system, so climate change would not have an effect. 3. Chris Tucher, UAC Member, expressed his personal comments. Mr. Tucher pointed out the gap between the report the Committee heard and the report in the packet and the UAC’s letter. The UAC spent hours reviewing the One Water Plan; however, the summary of the UAC’s work in the packet did not fully capture the UAC’s findings and recommendation. The summary omitted, softened, and misrepresented the UAC’s position on several key points spelled out in the UAC’s letter. The summary omitted the UAC’s most important recommendation that Council should vote against acceptance. The One Water Plan was based on a faulty foundation of 50 percent rationing, a premise based on a lack of data, scenarios, and proper modeling. There was a lack of transparency with SFPUC because SFPUC rejected our request for different scenarios. SFPUC gave only a worst case scenario in their drought plan, and the whole One Water Plan project was built upon that one scenario. The UAC unanimously voted to reject this One Water Plan report. The summary in the staff SUMMARY MINUTES Page 4 of 13 Climate Action & Sustainability Committee Regular Meeting Summary Minutes: 9/19/2025 report understated the UAC’s critique of the methodology. The UAC did not just have concerns with the methodology. The UAC’s letter called the methodology potentially misleading. The methodology violated analytical principles. Staff should not use this tool based on SFPUC’s overestimated demand. We need dialogue with SFPUC and different drought, storage, demand and supply scenarios. Vice Mayor Veenker asked for the rationale of staff’s recommendation for the Committee to receive the report and send it to Council as an informational item. Vice Mayor Veenker noted that public commenters had raised a question on the fatal flaw affecting the tool. Brad Eggleston, Director of Public Works, explained that typically Council was asked to either approve or accept studies. Acceptance connoted an agreement with the work product. Staff deliberately recommended that the Committee receive this report, which did not imply agreement or rejection of the work product. Staff did not intend to do additional work based on the feedback obtained. Director Eggleston viewed the UAC’s feedback and any other feedback as helpful and would be considered when staff used the Excel tool in the future or if more analysis was warranted in response to certain triggers. Alan Kurotori, Director of Utilities, stated the One Water Plan was helpful in looking at scenarios and sensitivities, it will feed into the City’s Urban Water Management Plan being done in 2026, and staff was able to use the Excel tool. The SFPUC will look at alternative water supply in their update. There were discussions through BAWSCA and through conversations with Councilmember Stone on water use projections. Staff was not asking for the Committee’s acceptance of this report but did want this work product acknowledged and be used as a tool. Water use projections will be updated in the Urban Water Management Plan as the City worked with SFPUC, and in looking at supplies and alternatives in relationship to Palo Alto’s priorities. Councilmember Lu voiced the following questions and comments. What are the timelines? How will the decision be made on what scenario or plan to adopt, or will decisions be made on what to prioritize from year to year? Will SFPUC’s 2027 Alternative Water Supply Plan include updated projections for different jurisdictions under various drought scenarios? Palo Alto could use the updated data to reconcile the Valley Water and SFPUC drought scenarios. Palo Alto had to make a judgment call on what alternative water supplies and scenarios to plan for. Was the City bound by BAWSCA or SFPUC to commit to hitting certain water supplies? How flexible is the Excel tool. Can a less severe drought scenario cutback be plugged into the tool and see how it impacted the scores? The OWP was not a wasted effort nor did it need to be rejected to make a statement. Accepting the SFPUC’s drought projections, conservation or the baseline scenarios seemed reasonable and viable, especially if cost was weighted higher. Assistant Director Dailey said we might want to embark on a more serious study on supplementing our current water supply in response to various triggers, such as BAWSCA’s and SFPUC’s planning efforts, the Bay-Delta Plan, if our reliability was impacted in the future from climate change, or other unknowns. The SFPUC had not recommended any large investments. SFPUC was expected to provide an update in a couple years. Palo Alto was working on demand forecasts as part of BAWSCA’s 2050 Strategy. San Francisco did not project Palo Alto’s demand. Palo Alto and all the other BAWSCA agencies provide projected demands to San Francisco, and San Francisco used the collective projected demands in their planning projections. Palo Alto did its own planning and made its own decisions for our system. Palo Alto had no control over how the SFPUC operated their system because SFPUC was the owner and operator of that system. Staff can change the inputs in the Excel tool. SUMMARY MINUTES Page 5 of 13 Climate Action & Sustainability Committee Regular Meeting Summary Minutes: 9/19/2025 The goal was for our conservation measures to achieve 30 percent reduction versus 1990 but Councilmember Burt recalled hearing a couple years ago that we achieved a 40 percent reduction, which was impressive. Councilmember Burt emphasized the importance of knowing the current reduction percentage versus 1990 in understanding how much reduction had been done and the implication of how much more reduction was possible. Given the progress achieved through conservation and the remaining conservation opportunities outlined in the report, Councilmember Burt questioned why staff thought we needed a 50 percent cutback scenario. Councilmember Burt sought clarification on Slide 18, Scenario B, if the red weighted score depicted in the bar chart for cost of conservation meant it was favorable. Councilmember Burt asked if the new State law was a de facto ban on commercial users retaining turf because they did not have access to non-potable water. The Research Park was the biggest commercial area with extensive landscaping because of low FARs. Changes adopted to the City’s architectural review standards 9 years ago mandated indigenous plants when redoing landscaping projects, and that transformation had been gradually seen in the Research Park. Councilmember Burt wondered if the study looked the percentage of ornamental turf that had been cut back over the decades that the City provided incentives and how much ornamental turf remained. Satellite imagery perhaps with the assistance of AI may be able to calculate the amount of ornamental turf. Assistant Director Dailey did not have a slide with her on the percent of reduction versus 1990 but the region had become much more efficient in its water use despite population growth. The new legislation Making Conservation a California Way of Life resulted in urban water use targets. The conservation goal will be updated in the next round of the S/CAP to align with those targets. The red weighted score was good for Scenario B on Slide 18. The new State law banned the use of potable water on commercial turf but trees were an exception. If a tree was in the middle of a large area of nonfunctional turf but the irrigation system could not be isolated to only water the tree, keeping the tree alive was more important than not watering the turf. For the most part, Palo Alto did not have recycled water available, so commercial users should not water their turf unless they had trees. The OWP study did not include the percent of reduction in ornamental tuft but Assistant Director Dailey will see if staff could get that number for Councilmember Burt. The State did a lot of surveying for Making Conservation a California Way of Life. Staff had aerial evaluations of its turf amount. The State gave Palo Alto an urban water use target based on how much land could be irrigated, how much land was covered by structures, and the area climate but Assistant Director Dailey did not have the data with her. Demand was different from the drought of record. Councilmember Burt inquired if San Francisco accepted and took into account the demand forecasts that BAWSCA agencies supplied, and what was Palo Alto’s demand forecast. Councilmember Burt assumed the demand forecast would be a major input to the OWP effort and its tool, and fundamental in driving the decisions on what actions we ought to do, so he asked why the OWP was done before the demand forecast. Councilmember Burt wanted to know what was the demand forecast used in the OWP so he could understand its major premise. The cost of our water was related to demand, and water use was on a downward trend as a result of various conservation methods. Councilmember Burt joked that we water our lawns with Crystal Geyser quality water. We use incredibly expensive water for all purposes and the price was scheduled to continue increasing above the pace of inflation, making the economics of conservation more favorable. When people see their water bill increase, they may decide to water their garden less, so Councilmember Burt wondered if that had been taken into consideration in the City’s, BAWSCA’s, and SFPUC’s projections. Another demand factor was AMI metering. Councilmember Burt asked if there were reference points from other agencies on how much impact AMI metering had on conservation. SUMMARY MINUTES Page 6 of 13 Climate Action & Sustainability Committee Regular Meeting Summary Minutes: 9/19/2025 Assistant Director Dailey addressed Councilmember Burt’s questions. BAWSCA was leading the effort on a demand study to project realistic demands over the next years. To be conservative, Palo Alto forecasted on the higher side to make sure we had enough water. We have run out of the cheap options and alternative water supply was expensive. San Francisco only forecasted for their retail customers. Palo Alto and the other 25 BAWSCA agencies provided demand forecasts that feed into San Francisco’s projections. Palo Alto was in the middle of a demand forecast study and staff anticipated bringing it to the UAC for review before the end of the year. The OWP started a few years ago as directed by the S/CAP. The OWP would have been done in 2027 if the demand forecast study was done first. Assistant Director Dailey did not have the numbers with her but the OWP report used Palo Alto’s Urban Water Management Plan’s 20-year projection, which was the most recent and best demand forecast available at the time. Staff can update the assumptions in the tool. Demand was an important input. San Francisco determined the potential cutback amount after looking at demand, supply, and how they operate the system. The OWP used the 50 percent cutback as a worst case scenario to prepare for what our supplier told us they potentially had to do in response to the Bay-Delta plan, climate change interrupting our water supply, and/or other factors. Assistant Director Dailey noted that Table ES.2 in the OWP showed the demand forecast starting in 2020. Our model did not include price sensitivities; however, the demand study that BAWSCA was facilitating had the ability to run sensitivities for future retail rate assumptions to see how it impacted demand. AMI was already planned, so AMI was not incorporated in the OWP study. AMI was anticipated to provide additional conservation impacts. BAWSCA’s study had a model that adjusted demand down according to the ongoing and planned conservation programs at each agency, including AMI. Director Kurotori added that work started on the OWP in late 2020 and was updated in mid-2021 when our Urban Water Management Plan was started. Palo Alto was required to do another Urban Water Management Plan. We should be very proud about having very high quality water supply in Palo Alto. Future projections of water rate increases from the wholesaler were in the low single-digit percentages in the outward years. SFPUC had a good credit rating. In comparison to Valley Water’s increased retail rates, the BAWSCA and SFPUC projections of wholesale water cost were lower. Councilmember Burt referred to the conservation scenarios on Slide 14. Incentives were expensive. Similar to electrification, at the earlier stage we want to alter behavior but eventually the good practices become the norm and it becomes more viable to consider mandates than incentives. There could be a mix of incentives and mandates. Councilmember Burt cautioned that we should not feel obligated to incentivize all conservation or be over-dependent on incentives after we reach a point that we should not allow certain things. Staff’s recommendation was for the Committee to receive the report but Councilmember Burt wanted clarification on what staff will do with the report including the premise of the worst case scenario. Councilmember Burt noted it was unusual to have a unanimous recommendation from the UAC against a staff recommendation, he did not want to dismiss the UAC’s recommendation, and receiving the report seemed to be a reflection of listening to the UAC. Councilmember Burt struggled with endorsing staff’s use of the tool when the UAC had concerns with some of the methodologies. Receiving the report was being construed by staff as accepting and authorizing the use of the tool going forward. Councilmember Burt did not know how staff could use the tool if it was not accepted. Councilmember Burt thought there were a lot of remaining opportunities for conservation, so we do not have to think so much about relying on recycled water even though there may be good opportunities. SUMMARY MINUTES Page 7 of 13 Climate Action & Sustainability Committee Regular Meeting Summary Minutes: 9/19/2025 Assistant Director Dailey stated that if and when the Council wanted to, or if staff felt the Council should make a decision around reliability of our water supply and consider an alternative or regional partnership opportunity, staff will modify the tool to the best of their ability to take into account the concerns expressed by the UAC and bring back a prudent staff recommendation to the Council. Director Kurotori said that receiving the report was the right way to go based on the UAC’s feedback. Staff was not asking for any action. We are not looking for any alternative water supply now. This was a tool. Things have changed since 2021. For example, the Santa Clara Valley Water District stopped focusing on doing advanced water treatment at our treatment plant and diverted resources to looking at the option of a larger wastewater treatment plant in the South Bay. Staff can look at costs, benefits, acceptance, and energy use, so it was a tool for staff to use to inform our decisions and potentially find other partnerships as the SFPUC looked at potential supplies. Director Eggleston reiterated the distinction that receiving the report versus accepting it was acknowledging there were a lot of concerns expressed about it. Staff will review those concerns and try to respond as best they could before using the tool. Vice Mayor Veenker noted staff’s recommendation was to receive the OWP in addition to receipt of the associated letter from the UAC, which implied to her a request to keep both in mind and the UAC letter will inform any future use of the tool in the plan. Assistant Director Dailey agreed. Vice Mayor Veenker said it was important to her and made her feel more comfortable knowing the UAC letter will continue to be evaluated when decisions were made about using the tool. Vice Mayor Veenker asked if a sensitivity analysis could be generated from changing inputs in the tool, and Assistant Director Dailey answered yes. Vice Mayor Veenker wondered if changing the weighting of cost or reliability would change the portfolio preferences. Vice Mayor Veenker was struggling with the 50 percent premise in question with SFPUC’s design drought and wanted to know if staff thought that changing some inputs could address it or was it a fatal flaw throughout the structure of the tool. In Assistant Director Dailey’s view, it was not a fatal flaw of the structure of the tool. Staff can make different assumptions about the reliability of our existing supply. Referring to Slide 15, Vice Mayor Veenker was not aware the City had a planned project to enable use of groundwater during drought. Allocating capital budget to a groundwater project could make a huge impact and affect the selection of alternatives and conservation measures we would choose during a drought. Slide 20 showed the illustrative bill impacts. Vice Mayor Veenker wanted to see similar quantitative financial modeling of the bill impact when the plans become more specific. Vice Mayor Veenker asked if would be helpful to have the information that Councilmember Stone requested in his letter to SFPUC, should we continue to encourage obtaining that information or invite them here to talk to us. We need to make sure we have all the information we need to make the best possible decisions, so Vice Mayor Veenker wanted to know if staff felt like we were getting an adequate response and generally what we needed from SFPUC as their customer. Concerns were raised that SFPUC was not being as forthcoming with BAWSCA as they might have hoped, so we should either allay those concerns or refute them. If conversations between BAWSCA and SFPUC were not ongoing, Vice Mayor Veenker wanted the Council to hear from them or weigh in. Vice Mayor Veenker invited staff to use Council to get what we need as a City to serve our customers. Assistant Director Dailey said the groundwater project was not in the CIP. Assistant Director Dailey said that project would make it easier to use groundwater on a more regular basis if the Council chose to do so but there were many complications with using groundwater, it was not the most reliable supply, so SUMMARY MINUTES Page 8 of 13 Climate Action & Sustainability Committee Regular Meeting Summary Minutes: 9/19/2025 she thought groundwater supply had minor attractiveness. Valley Water often requested more severe cutbacks than SFPUC. Valley Water relied on the State Water Project, which often did not yield a lot of water to them in drought situations. It was expensive to pay for groundwater pumping. The BAWSCA General Manager sent a letter to the SFPUC, and SFPUC was working with BAWSCA on those issues. The SFPUC’s position was that they work through BAWSCA instead of with individual agencies. Director Kurotori explained that Palo Alto disinfected with free chlorine. Several years ago, SFPUC and all the other water retailers switched to chloramines for water quality reasons, which was basically chlorine and ammonia. Palo Alto would have to change to that type of disinfection to blend groundwater and not have water quality issues in the system. Director Kurotori stated that staff will bring forward a project to retrofit those wells to enable blending. Valley Water managed the groundwater basin and got state, federal, and local recharge. There was not a lot of groundwater pumping in the Palo Alto area. In a drought, potentially more folks use groundwater. Palo Alto will look at using groundwater as an alternative during drought; however, water conservation historically proved to be the best action. Councilmember Stone wrote a letter to SFPUC. BAWSCA, as the representative for all the member agencies, followed up on obtaining additional information. In June, there was dialogue between BAWSCA and SFPUC confirming they were modeling different supply regimes, looking at drought savings, and getting some scenarios and worksheets. BAWSCA was involved and there was good coordination, and there will be further coordination as we move forward. Councilmember Burt noted staff alluded to Valley Water’s high recharge fees as a result of pumping and wondered if the recharge fee was based on cost. A dozen years ago, Peter Drekmeier was involved in a multijurisdictional initiative that that led to geotechnical studies on our groundwater, which we had assumed was connected with the groundwater system south of us in the valley. Councilmember Burt recalled the conclusion from those studies was that Palo Alto’s groundwater being in the far north of the county was much more isolated than we had assumed and therefore the depletion from groundwater pumping in Palo Alto would not require Valley Water to have the expense of replenishing nor would Palo Alto benefit from Valley Water’s replenishment. Palo Alto may want to advocate a revisiting of Valley Water’s recharging fee and require it be based on cost. Valley Water charged our ratepayers for water conveyance for potable water that we do not use in Palo Alto. We now have an interconnection, so in an emergency we would get potable water but it was a reciprocal benefit. Councilmember Burt was interested in seeing the basis for Valley Water’s pump fees being the same for Palo Alto as elsewhere in the county where they clearly benefit, and what Stanford had determined. Assistant Director Dailey stated that Valley Water levied a pumping charge when groundwater was pumped in the county, based on Valley Water’s water supply cost. The Northwest County Recycled Water Strategic Plan did some work on groundwater. Valley Water completed a Zone of Benefit Study 1 or 2 years ago to determine which areas in the county benefitted from their recharge, and the study concluded this part of the county benefitted. Stanford pumped a lot of groundwater and had been at the forefront of this debate. Assistant Director Dailey did not know the status of Stanford’s argument with Valley Water. Assistant Director Dailey said it might be worth reengaging and she thanked Councilmember Burt for bringing it up. Valley Water charged a rate conveyance to property owners on their property tax. Motion: Vice Mayor Veenker moved, seconded by Councilmember Lu, that the Climate Action and Sustainability Committee receive the City of Palo Alto One Water Plan and associated letter from the Utilities Advisory Commission. SUMMARY MINUTES Page 9 of 13 Climate Action & Sustainability Committee Regular Meeting Summary Minutes: 9/19/2025 MOTION PASSED: 3-0 2. Review and Discussion of Design Guidelines for Successor to Current Multifamily Electric Vehicle Charger Program; CEQA Status: Under CEQA Guidelines Section 15183, projects consistent with an existing general or comprehensive plan do not require additional CEQA review Rachel DiFranco, Utilities Program Services Manager in the Resource Management Division, delivered a presentation. The proposed program was in alignment with the vision under the S/CAP to promote and enhance our efforts around electric mobility and EV charging infrastructure. The current EV rebate program (or EV 1.0) had been operating since 2017. It cost CPAU $1.5 million to provide incentives for the 325 EV chargers installed at 26 multifamily properties (1324 residential units). Palo Alto had almost 11,000 multifamily units. Under EV 1.0, it could cost CPAU $25 million to $34 million to provide incentives for the 577 multifamily residential properties of 3 units or more, which we do not have the funding to do. Therefore, a new financial model was needed to scale the rebate program. Staff spoke with 9 companies, including EV service providers and electrical contractors working in the EV space. About 2/3 of their EV project costs were covered by incentives. The following feedback and recommendations were expressed by those 9 companies: Currently, EV chargers at multifamily properties were primarily installed using a house meter. Sometimes chargers can connect to the individual unit’s meter but was typically a lot more difficult and expensive. In PG&E’s territory, installation of chargers attached to a separate EV meter was found to be a good method for larger projects. The recommendation was to allow a separate service for EV charging. Installing commercial panels were more difficult to come by and more expensive. Allowing residential-type panels for EV circuits would cut costs and move projects forward more quickly. Change Palo Alto’s requirement to install emergency power shutoff switches for EV charging installations at multifamily and nonresidential properties. Use managed charging to avoid transformer upgrades. Typically, Utility Engineering considered the total potential load of EV charging when an installation was proposed without factoring in that software could manage the load, and a breaker between the chargers and the main panel would prevent a max load from occurring. Enable prewiring of future installations without impacting transformer load calculations. To help with the permitting process, have standard preapproved equipment setups and over-the-counter permitting. Financing with on-bill repayment as an alternative to incentives could be compelling with the right terms. The EV 2.0 program vision was to meet current EV charging demands, anticipate market- and policy- driven charging trends, and inspire future electric charging demand specifically for the multifamily customer segment. The EV 2.0 program goals were to enable convenient, affordable, and accessible multifamily residential EV charging; pilot financial designs that can be deployed communitywide with little additional City funding; enable participation by a wide range of EV charging providers; and pilot options for participation by all feasible multifamily residential property sizes and ownership structures with varying levels of EV adoption. The following was proposed to make the EV 2.0 program cost effective and scalable: Use financing rather than upfront incentives, called Charging-as-a-Service. If needed, incentives could help pay financing but the City should eventually be repaid, except continuing to subsidize EV projects for affordable housing. EV charging had been installed at 2 affordable housing properties, and 3 more were expected to be completed by the end of the year. Repayment should come from the beneficiaries of the EV infrastructure, meaning EV drivers and landlords providing this amenity to retain or attract tenants. Charging rates should remain attractive. Only build EV charging if demand will support it. SUMMARY MINUTES Page 10 of 13 Climate Action & Sustainability Committee Regular Meeting Summary Minutes: 9/19/2025 To ensure the EV 2.0 Program was accessible to a wide range of providers serving multifamily residential needs: Accommodate the installation of new EV meters or service as well as the ability to utilize existing house meters or unit meters. Support additional future EV chargers by putting in make-ready spaces. Avoid service upgrades through load management and shared infrastructure. Size appropriate to site needs by installing in assigned parking spaces when adoption levels were high, installing in shared parking spaces when adoption levels were lower; and if on-site adoption levels were too low or installations were infeasible, deploy on-street chargers to serve multifamily residential or have nearby public charging hubs (for example at a City community center or a church parking lot). To support alternative transportation options, community engagement, project implementation, and grid reliability and resiliency, the EV 2.0 Program should do the following: Include e-micromobility charging, secure bike parking facilities, and electric car-share/bike-share deployments where appropriate. Offer outreach, education, and customer-facing services such as EV advising, landlord/HOA workshops, e-mobility events and showcases, and income-qualified offerings. Foster updates to EV policies and processes in the building code and zoning code, and streamline the permitting process. Incorporate low-power charging options, load management strategies, and demand response technologies. Alta Housing’s EV charging installation included L1 outlets for people to plug in e-bikes. The Fire Department expressed concerns about e-bike batteries being charged inside units, so there will be further thought about how to make sure e-bikes were in safe and secure locations. Jonathan Abendschein, Assistant Director of Sustainability and Climate Action, mentioned there was a working group composed of 2 members (including 1 UAC commissioner). The working group felt that financing was a positive approach, and an interest rate buy-down could be considered. The working group discussed available products to schedule shared EV chargers, the need for fast charging versus slow charging, and expressed surprise about e-bike batteries being plugged in inside units. Assistant Director Abendschein stated this project was included in the FY 2026 budget. After Council approved the design guidelines, staff will move forward with implementation, unless other aspects of the program need Council approvals, such as contract approvals. Item 2 Public Comment: None. Some small multifamily may not have an opportunity to install chargers. People living in single-family homes without driveways cannot get an EV because they have no way to charge it. Councilmember Burt asked how curbside charging would change with bike lanes. Councilmember Burt wanted to know the status of curbside charging, and he wanted Palo Alto to do a curbside charging pilot as soon as possible. Technology for curbside charging was available elsewhere in the U.S. and in Europe, so lessons could be learned from them. Norway was at the forefront of full-scale adoption with 90 percent EV sales. Nordic Innovation House represented Norway, Sweden and Finland; and they were willing to share technologies they have developed and their learning experiences. We have had collaborations with Nordic Innovation House through our Sustainability Program. With the conversion of our light poles to LED, fewer watts were pulled for lighting, so Councilmember Burt believed there was capacity in a lot of our light poles to accommodate a Level 2 charger and he was interested in finding more about that offline. Councilmember Burt sought clarification on the statement made during the presentation that 4.5 percent of our multifamily was being served. Councilmember Burt wondered if staff thought of having different approaches for smaller versus larger properties. SUMMARY MINUTES Page 11 of 13 Climate Action & Sustainability Committee Regular Meeting Summary Minutes: 9/19/2025 In Councilmember Burt’s discussions with multifamily developers such as Summerhill Homes, they have sustainability programs and much of it is on EV charging, and they were willing to share their experiences. There was market demand for EV charging capability for new units, with tenants viewing it as a necessity, so the City did not have to incentivize EV chargers. Councilmember Burt suggested providing flyers to property managers and contractors that outlined best practices, available and emerging products, and what the City was doing to facilitate EV charging. Councilmember Burt wanted to know the proposed dates to implement major initiatives (e.g., not requiring transformer upgrades if it was a managed load and a breaker was put in) and what were the projected impacts, in order to tie performance metrics to a plan and a schedule for that plan. Councilmember Burt asked which initiatives required funding from Utility funds versus the General Fund, and which were a rule or policy change. Ms. DiFranco, Utilities Program Services Manager, stated that Utilities Engineering was willing to factor in load management as a hard-wired solution. To understand the challenges, best practices, and opportunities of curbside charging, staff was looking at a pilot in the City of Alameda Municipal Utility territory and the program that the SFMTA was running in the SFPUC territory. Ms. DiFranco, Utilities Program Services Manager, was keeping an eye on concerns around the right-of-way if we put curbside chargers in areas where bikes come through on a bicycle boulevard, concerns around the cords dropping off existing overhead lines creating tripping hazards, and the risk of vandalism. In the 26 properties that installed EV charging through our incentive program, the total number of units represented 12 percent of total residents in multifamily properties; 26 properties was 4.5 percent of multifamily properties in Palo Alto. Onsite engagement was not being done previously. Now, EV workshops and EV showcases were being offered at properties where charging had been installed or was about to installed to educate the residents about the benefits of EV ownership and highlighting cost saving opportunities. There had been ongoing conversations and improvements with Utilities Engineering and Development Services to streamline the permitting process. We have a permit checklist for contractors to know what Palo Alto requires. Ms. DiFranco said that Assistant Director Abendschein had been modeling the potential costs of on-bill financing. Some of the budget could be utilized to work with a financing partner to run a pilot. Assistant Director Abendschein explained that staff was tracking where bike lanes were planned to avoid making an expensive EV charger investment and have it interfere with other operations. Assistant Director Abendschein thought light poles were looked at a couple years ago but they were found to not have adequate capacity. Los Angeles was able to because but they had a bizarrely high amount of capacity assigned to their light poles. The timeline was being built now. Capital had to be provided from the City budget. Depending on the number of EV drivers and interest, the tools included a mobility hub nearby, an on-street charging pilot, on-site charger installation, and full Charging-as-a-Service space-by- space installation. Assistant Director Abendschein did not want to lay out metrics for each tool but will lay out general metrics for the program once staff determined what was possible within the budget and after negotiations with a financing partner. The FY 2026 budget was $3.1 million from the Low Carbon Fuel Standard Fund. The Utility generated power for EV chargers. It was held in the Utility funds but was special revenue dedicated for EVs. Councilmember Lu concurred with Councilmember Burt’s points. Councilmember Lu lived in a building on Sheridan that was about to get EV chargers installed in their guest spots and was grateful for the City’s work. With the EV 2.0 pilot in FY 2026, Councilmember Lu asked when EV 1.0 will ramp down. Maybe there was a marketing opportunity to provide a deadline, for example telling properties that were more suited to EV 1.0 that within the next 3 months it was their last chance to get in the queue, or could we afford to process a significant influx of rebate applications in a reasonable amount of time with the budget allocation. Councilmember Lu inquired if we could learn from other Cities who tried similar SUMMARY MINUTES Page 12 of 13 Climate Action & Sustainability Committee Regular Meeting Summary Minutes: 9/19/2025 financing programs. Councilmember Lu wanted to know if staff was going to revisit the emergency shutoff requirement that was unique to Palo Alto, and what was the background for having that requirement. Councilmember Lu asked about potentially spreading out transformer upgrade costs instead of 1 applicant incurring the cost. Ms. DiFranco, Utilities Program Services Manager, said EV 1.0 provided an $8000 incentive per L2 charger up to 10 chargers. EV 1.0 served 26 multifamily properties, and about the same number of properties was in the queue in various stages of planning. Some of those properties may be more interested in the Charging-as-a-Service model, whereas others wanted to continue with their rebate application. Staff anticipated serving the properties in the queue, tapering off incentives over time, and getting more properties interested in the Charging-as-a-Service pilot. After working through the pilot’s challenges and improving best practices, the program will fully transition to Charging-as-a-Service. The timing will be dependent on when the financing pilot rolled out. Rolling out Charging-as-a-Service financing was in the S/CAP 2026-2027 work plan. The budget allocation will support EV 1.0 at its current pace. Over the last couple years, the number of projects had increased and was burning through LCFS funds. The revenues from LCFS sales had been replenishing what was spent annually, which was why it was crucial to look at a new financial model as the LCFS fund decreased. Having an application deadline for EV 1.0 may be a future approach but, ideally, staff wanted a smooth transition. Palo Alto was working on a Charging Smart national designation effort, which was a best practice analysis of programming, permitting, building codes, and the ways we handle things in Utilities from a planning perspective, and will identify what aligned with or went beyond best practices and our opportunities to improve services. Ms. DiFranco, Utilities Program Services Manager, said staff was working on setting up a conversation with PG&E. PG&E has run an on-bill financing program for a long time. PG&E allowed EV charging to be incorporated into on-bill financing. CPAU offered on-bill repayment options for our residential heat pump program with GoGreen financing, and we were looking at utilizing GoGreen financing for commercial electrification. If desired, the City could utilize GoGreen financing for EV charging and buy down the interest rate of those loans. Assistant Director Abendschein pointed out staff had not yet talked to our Planning and Development Services or Utilities teams about the feedback provided by the group of contractors, so it was unknown what may be feasible. Assistant Director Abendschein explained that Charging-as-a-Service took a few different financing mechanisms and applied them to a novel situation. The concept of recovering some of the costs of capital through charges to EV drivers was a business model established for public charging. Alan Kurotori, Director of Utilities, mentioned that staff had discussions about transformer costs associated with EV charging, the availability of funds, and LCFS credits. There was a balance between having cost recovery for new customers to protect our existing ratepayers and making sure everyone paid their fair share. Regarding the City’s Reach Code, we want businesses to come in and pay their fair share to join our city and get cost recovery to insulate our current customers from new developments. Director Kurotori said that staff had internally talked about the overall cost for our customers to make improvements and upgrades. Treating folks equally and equitably was important, and looking if a transformer will be updated as part of grid modernization. Utilities worked closely with our Development Services and Engineering teams to take a look at those processes. For a new development not part of grid modernization, there was a cost associated with connecting into the system. If a customer was looking to electrify their site, especially since some tax credits were going away at the end SUMMARY MINUTES Page 13 of 13 Climate Action & Sustainability Committee Regular Meeting Summary Minutes: 9/19/2025 of this calendar year, staff was trying to keep pace with customer interest. Our engineers looked at the development applications coming through and see what we would do at that site and location. Vice Mayor Veenker was interested in seeing feedback and options on preapproved equipment setups, anything that can be done to streamline the process. Vice Mayor Veenker wondered if staff considered having a couple chargers that can each go 2 spots left or right with 1 box covering 4 spots, providing a combination of fast and slow charging in 1 box, and imposing a penalty beyond a certain time limit similar to Tesla Superchargers. Ms. DiFranco, Utilities Program Services Manager, stated that 2 ports shared between 1 parking space or smart outlets where people bring their own charger to plug into the outlet were very common in many of the incentivized projects. Smart outlet providers typically had an 15-amp L1 outlet and may also have a low-power L2 outlet of 20 amps or so, and it can manage the load between those outlets and adjust the amount of amps each car was pulling up to a maximum total amount. Many options were available. For example, load management could provide full power to 1 charger for the car to charge quickly and then the power moves on to the next charger. Software programs can set up reservations for shared chargers. You can charge idle fees if you are plugged in but not charging. Motion: Council Member Burt moved, seconded by Chair Veenker, to recommend that the City Council adopt design guidelines for the successor to the current multifamily electric vehicle charger program. MOTION PASSED: 3-0 Future Meetings and Agendas Brad Eggleston, Director of Public Works, announced the next meeting on October 17 will start at 2 P.M. Agenda topics include design guidelines for the advanced rooftop HVAC pilot program and preliminary results on the gas transition study. Adjournment: The meeting was adjourned at 3:57 P.M.