The URL can be used to link to this page

Home My WebLink About2023-03-21 Finance Committee Action MinutesFINANCE COMMITTEE ACTION MINUTES Page 1 of 5 Regular Meeting March 21, 2023 The Finance Committee of the City of Palo Alto met on this date in the Community Meeting Room at 5:33 P.M. Present In-Person: Burt (Chair), Lythcott-Haims, Stone Present Virtually: Absent: Agenda Items 1. Recommend the City Council Adopt a Resolution Approving a Revised Fiscal Year 2024 Water Utility Financial Plan, Including Revised Proposed Reserve Transfers, and Increasing Water Rates by Amending Rate Schedules W‐1 (General Residential Water Service), W‐2 (Water Service From Fire Hydrants), W‐3 (Fire Service Connections), W‐4 (Residential Master‐ Metered and General Non‐Residential Water Service), and W‐7 (Non‐Residential Irrigation Water Service) ACTION DEFERRED UNTIL ITEM 4 2. The Utilities Advisory Commission and Staff Request That the Finance Committee Recommend the City Council Adopt a Resolution Approving the FY 2024 Wastewater Collection Utility Financial Plan Including Proposed Reserve Transfers and Increasing Wastewater Rates by Amending Rate Schedules S-1 (Residential Wastewater Collection and Disposal), S-2 (Commercial Wastewater Collection and Disposal), S-6 (Restaurant Wastewater Collection and Disposal) and S-7 (Commercial Wastewater Collection and Disposal – Industrial Discharger) (Continued from March 7, 2023) ACTION DEFERRED UNTIL ITEM 4 3. Recommendation to the City Council to Adopt a Resolution Approving the Fiscal Year 2024 Gas Utility Financial Plan, Including Proposed Reserve and General Fund Transfers and Amending the Gas Utility Reserve Management Practices, and Increasing Gas Rates by Amending Rate Schedules G-1 (Residential Gas Service), G-2 (Residential Master-Metered and Commercial Gas Service), G-3 (Large Commercial Gas Service), and G-10 (Compressed Natural Gas Service) ACTION MINUTES Page 2 of 5 Finance Committee Meeting Action Minutes: 3/7/2023 ACTION DEFERRED UNTIL ITEM 4 4. Recommendation to the City Council to 1) Adopt a Resolution Approving the Fiscal Year 2024 Electric Financial Plan and Proposed Reserve Transfers, and Amending Rate Schedules E-HRA (Hydro Rate Adjuster), E-1 (Residential Electric Service), E-2 (Residential Master-Metered and Small Non-Residential Electric Service), E-2-G (Residential Master- Metered and Small Non-Residential Green Power Electric Service), E-4 (Medium Non- Residential Electric Service), E-4-G (Medium Non-Residential Green Power Electric Service), E-4 TOU (Medium Non-Residential Time of Use Electric Service), E-7 (Large Non- Residential Electric Service), E-7-G (Large Non-Residential Green Power Electric Service), E-7 TOU (Large Non-Residential Time of Use Electric Service), E-NSE (Net Metering Net Surplus Electricity Compensation), and E-EEC (Export Electricity Compensation) and 2) Discuss and Potential Direction for an Electric Rebate in 2023 MOTION: Council Member Lythcott-Haims moved, seconded by Vice Mayor Stone to recommend the City Council adopt a resolution approving 1. FY 2024 Water Utility Financial Plan, including 2% water distribution rate increase 2. Up to a $3.746 million transfer from the Capital Improvement Projects Reserve to the Operations Reserve in FY 2023 3. Up to a $3.0 million transfer from the Rate Stabilization Reserve in FY 2023 4. Increasing Water Utility Rates Via the Amendment of Rate Schedules W-1, W-2, W-3, W- 4, and W-7 5. The Fiscal Year 2024 Wastewater Collection Financial Plan, including 9% overall rate increase 6. Transfer up to $3.178 million from the Capital Improvements Projects Reserve to the Operations Reserve in FY 2023 7. Transfer up to $342 thousand from the Rate Stabilization Reserve to the Operations Reserve in FY 2023 8. Increase Wastewater Collection Utility Rates Via the Amendment of Wastewater Collection and Disposal Rate Schedules S-1 (Residential), S-2 (Commercial), S-6 (Restaurant) and S-7 (Industrial Discharger) 9. Approving the fiscal year (FY) 2024 Gas Utility Financial Plan (Linked Document) 10. Approving the Fiscal Year (FY) 2024 Electric Financial Plan modified to reflect the transfers and rate actions listed below in sections 2, 3, and 4; 11. Approving the following transfers at the end of FY 2023: a. Up to $12 million from the Supply Operations Reserve to the Distribution Operations Reserve; and b. Up to $4.5 million from the Supply Operations Reserve to the Cap and Trade Program Reserve; and 12. Approving the following transfers in FY 2024: a. Up to $10 million to the Electric Special Projects (ESP) reserve from the Supply Operations Reserve; and ACTION MINUTES Page 3 of 5 Finance Committee Meeting Action Minutes: 3/7/2023 b. Up to $8 million to the Hydroelectric Stabilization Reserve from the Supply Operations Reserve; and c. Up to $3 million from the Supply Operations Reserve to the Cap and Trade Program Reserve; and 13. Approving the following rate actions for FY 2024: a. Deactivation of the hydroelectric rate adjuster from customer bills effective July 1, 2023; b. An increase to retail electric rates E-1 (Residential Electric Service), E-2 (Small Non-Residential Electric Service), E-4 (Medium Non-Residential Electric Service), E-4 TOU (Medium Non-Residential Time of Use Electric Service), E-7 (Large Non- Residential Electric Service), and E-7 TOU (Large Non-Residential Time of Use Electric Service) of 21% effective July 1, 2023; c. An increase to the Export Electricity Compensation (E-EEC-1) rate to reflect 2022 avoided cost, effective July 1, 2023; d. An increase to the Net Surplus Electricity Compensation (E-NSE-1) rate to reflect current projections of FY 2023 avoided cost, effective July 1, 2023; and e. An update to the Residential Master-Metered and Small Non-Residential Green Power Electric Service (E-2-G), the Medium Non-Residential Green Power Electric Service (E-4-G), and the Large Non-Residential Green Power Electric Service (E-7- G) rate schedules to reflect modified distribution and commodity components, effective July 1, 2023. 14. Defer Rebate decision to April 4 meeting MOTION PASSED: 3-0 MOTION: Council Member Burt moved, seconded by Council Member Lythcott-Haims to recommend the City Council adopt a resolution approving 1. Approving the Fiscal Year (FY) 2024 Electric Financial Plan modified to reflect the transfers and rate actions listed below in sections 2, 3, and 4; 2. Approving the following transfers at the end of FY 2023: a. Up to $12 million from the Supply Operations Reserve to the Distribution Operations Reserve; and b. Up to $4.5 million from the Supply Operations Reserve to the Cap and Trade Program Reserve; and 3. Approving the following transfers in FY 2024: a. Up to $10 million to the Electric Special Projects (ESP) reserve from the Supply Operations Reserve; and b. Up to $8 million to the Hydroelectric Stabilization Reserve from the Supply Operations Reserve; and c. Up to $3 million from the Supply Operations Reserve to the Cap and Trade Program Reserve; and 4. Approving the following rate actions for FY 2024: ACTION MINUTES Page 4 of 5 Finance Committee Meeting Action Minutes: 3/7/2023 a. Deactivation of the hydroelectric rate adjuster from customer bills effective July 1, 2023; b. An increase to retail electric rates E-1 (Residential Electric Service), E-2 (Small Non-Residential Electric Service), E-4 (Medium Non-Residential Electric Service), E-4 TOU (Medium Non-Residential Time of Use Electric Service), E-7 (Large Non- Residential Electric Service), and E-7 TOU (Large Non-Residential Time of Use Electric Service) of 21% effective July 1, 2023; c. An increase to the Export Electricity Compensation (E-EEC-1) rate to reflect 2022 avoided cost, effective July 1, 2023; d. An increase to the Net Surplus Electricity Compensation (E-NSE-1) rate to reflect current projections of FY 2023 avoided cost, effective July 1, 2023; and e. An update to the Residential Master-Metered and Small Non-Residential Green Power Electric Service (E-2-G), the Medium Non-Residential Green Power Electric Service (E-4-G), and the Large Non-Residential Green Power Electric Service (E-7- G) rate schedules to reflect modified distribution and commodity components, effective July 1, 2023. 5. Defer Rebate decision to April 4 meeting MOTION PASSED: 2-1, Stone No 5. Recommendation to the City Council to Approve and Authorize the City Manager or Their Designee to Execute a Third Phase Agreement with Northern California Power Agency for the Purchase of up to 87,600 Megawatt Hours per Year of Geothermal Energy from Calpine Corporation's Geysers Power Company, LLC Over a Term of up to 12 Years for a Total Not to Exceed Amount of $76.2 Million MOTION: Council Member Burt moved, seconded by Council Member Lythcott-Haims to recommend the City Council 1. Authorize the City Manager, or their designee, to execute a Third Phase Agreement with the Northern California Power Agency (NCPA) to purchase up to 87,600 MWh of renewable energy/year from a portfolio of geothermal projects owned by Calpine Corporation’s Geysers Power Company, LLC, over a period of 12 years, at a total cost not to exceed $76.2 million; 2. Authorize the City Manager, or their designee, to execute on behalf of the City all related documents or agreements necessary to administer the Third Phase Agreement that are consistent with the Palo Alto Municipal Code and City Council approved policies, including, but not limited to, collateral assignment agreements; and take any and all actions as are necessary or advisable to implement and administer the Third Phase Agreement; 3. Authorize the City Manager, or their designee, to approve and execute amendments to the Third Phase Agreement, as may be required from time to time, so long as the contract price and length of the agreement remain unchanged; and ACTION MINUTES Page 5 of 5 Finance Committee Meeting Action Minutes: 3/7/2023 4. Waive the application of the anti-speculation requirement of Section D.1 of the City’s Energy Risk Management Policy as it may apply to surplus electricity purchases resulting from the City’s participation in the Calpine contract, due to the variability of the City’s hydroelectric resources and uncertainty around the City’s long-term load forecast. MOTION PASSED: 3-0 Future Meetings and Agendas Adjournment: The meeting was adjourned at 10:04 P.M.