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HomeMy WebLinkAbout2006-12-03 Utilities Advisory Commission Summary MinutesMinutes: 12/03/02 Approved 1/14/04 Page 1 of 16 UTILITIES ADVISORY COMMISSION MINUTES DECEMBER 3, 2003 Call To Order.............................................................................................................. 1 Approval of Minutes................................................................................................... 1 Director of Utilities Report......................................................................................... 2 Water Survey .............................................................................................................. 4 Legislative Priorities................................................................................................. 13 Adjournment............................................................................................................. 16 Call To Order Rosenbaum: The Utilities Advisory Commission on December 3rd. Let’s start with a roll call. Start from my left please. Elizabeth Dahlen, Commissioner Bechtel present, Dick Rosenbaum present, Dexter Dawes present, and that’s it. This is it for tonight. Richard Carlson our fifth member has announced his resignation, which I am sure we are all sorry to hear about. He is simply spending too much time away from the City to attend to UAC business. I know I will miss his cogent analysis often based on real world experience and I am sure we all wish him the best. Next item is oral communications. I don’t see anybody here who wishes to address us on something other than the Agenda Items. Approval of minutes is next. Can I have a motion? Approval of Minutes Bechtel: I move approval of the minutes by the Utilities Advisory Commission Meeting held November 5, 2003. Dawes: Seconds. Rosenbaum: Alright. Is there any comments or corrections? If not. Ah yes Elizabeth? Dahlen: I have a question. I was at that meeting. Balachandran: You need to turn your mike on. Minutes: 12/03/02 Approved 1/14/04 Page 2 of 16 Dahlen: Excuse me. I was present for that meeting and I was not included in the roll call. Although I do remember saying that I was there. Rosenbaum: Yes. The minutes should be corrected to show that Commissioner Dahlen was indeed present. With that correction lets vote on the minutes. All those in favor. Aye, Aye, Aye. That passes unanimously. Agenda Review and Revisions. We have with us tonight in the absence of John Ulrich, Girish Balachandran anything you want to do with the Agenda Girish. Balachandran: No Commissioner. Rosenbaum: Alright. Reports from Commissioners on meetings or events. Do we have any? Go on to the Director of Utilities Report. Do we have a report? Bechtel: Mr. Chairman. Rosenbaum: Ah yes. Bechtel: On Monday night, I saw announced a workshop for the City Council on Gas. Did that happen or was that just an error in the Daily News, The Palo Alto Daily Reporting that there was some sort of a 6:00 p.m. workshop meeting on that. Rosenbaum: There was a study session on the Risk Management. That’s Risk Management for the Utility and the gentleman who spoke to us at our last meeting made a similar presentation to the City Council. Bechtel: I see. Thank you. Rosenbaum: Now the…. Dawes: Incidentally I had emailed John Ulrich and asked if there was any need for a Commissioner member to be at that session. He sent back that it would be essentially the same as, although more abbreviated, than we had seen and that it was not controversial and so I did not attend. Rosenbaum: Thank you Dexter. Utility Manager’s Report. Director of Utilities Report Balachandran: Okay. I am Girish Balachandran, Assistant Director of Utilities and I am going to read out the Director’s Report and feel free to ask questions on this. On regulatory issues, Western Area Power Administration announced on December 2nd a decision to form a sub control area and they abandon their efforts to pursue a separate control area this time. The sub control area appears to be more favorable to Palo Alto compared to a separate control area. The Federal Energy Regulatory Commission issued Minutes: 12/03/02 Approved 1/14/04 Page 3 of 16 an Advisory Order on the California ISO’s MD02 Market Design 02 filing and specifically for Palo Alto they supported the load aggregation concept that we requested and that ISO requested. This is a victory for Palo Alto and staff here worked diligently with other Bay Area Municipals and outside Council to help convince the California ISO to change its mind on this on the initial proposal. Moving on to some pending agreements, the Gas Master Agreements were approved by the City Council on November 24th, on December 8th. We will have the second reading of the Ordinance associated with that approval and 31 days after the second reading we can start transacting under this Five Gas Master Agreements. On the electric side the Electric Master Agreements will be going to the Finance Committee on December 9th next Tuesday and to the full Council the week after on the 15th. It is going to be a pretty quick turn around. Again after we will have a second reading 31 days later is when we can actually start transacting and the Council has approved transactions on the electric side. And these meetings, I think, John has sent you an email regarding that December 15th requesting UAC attendance at the December 15th meeting and December 16th actually just the December 15th meeting which is dealing with the CVP Company and the Water Integrated Resource Plan Guidelines. I believe Chairman Rosenbaum will be attending those meetings. Going on to the LEAP Implementation Plan. Two different areas. One is the Power Plant Acquisition and Development RFP that was sent out by NCPA. Seventeen responses have been received. Alameda and Palo Alto are the main participants in this RFP. A discussion with a short list of candidates is expected to commence in the coming weeks. A recommendation if any will be brought to the UAC in the spring. An information report on this entire aspect of the plan will be brought to the UAC next month. Dawes: Girish, the energy bill that was recently sort of tabled had some attractive benefits for alternative generators and I think specifically went in there to facilitate our RFP. To your knowledge did the shelving of that perspective legislation is that going to make a difference to any of our seventeen respondents or to your knowledge are those independent of any perspective change to the tax credits and so forth. I guess some credits are expiring and the bill would have extended them. The general question is does that detour affect this solicitation? Balachandran: You are a little ahead of me. I am going to get to the renewables next because the seventeen responses here were straight for thermal generation. It wasn’t the Green Power RFP, which we participated with NCPA. We’ve short-listed the candidates we want to do business with. We will bring our recommendations to you in January. To answer your question we don’t see any impact of scuttling of energy bill on the proposals that we have received. Dawes: Oh. I didn’t realize seventeen proposals are for thermal energy and hole filling proposals and that sort of thing? Balachandran: Actually. On the renewalables RFP, the informational CMR on the short list of supplies and energy sources will be presented to you next month and then will go on as an informational report to the Council when we get to the contract stage we will Minutes: 12/03/02 Approved 1/14/04 Page 4 of 16 bring that back as an action item to the Council. And, lastly in terms of logistics regarding replacement of Commissioner Carlson; the Clerk’s Office will post the vacant position but is not expected to happen until after the lst of the year and then we expect it to be at least couple of months process after that. So we are looking at maybe March will be the earliest. But it is going to be a several months process. And that ends my report. Rosenbaum: Thank you. Do we have any questions for Girish? Dexter. Dawes: One more about the MD02 or whatever it is, you mentioned that the way that is coming down is very favorable to the City. We are facing substantial additional costs before. Does this mean that we have no additional costs? Or just somewhat additional costs? Could you kind of quantify at the level of pain we will experience on our transmission deal? Balachandran: The ISO was proposed this load aggregation concept and they have caviated it saying at this point in time it makes sense to implement load aggregation. So there will be an increase. We expect to be an increase in cost but it is probably not going to be the same magnitude of increase if we had pure notal pricing where the Palo Alto load would be one load. Right now all the loads in Northern California basically have their prices averaged on the load sides. So this is a temporary proposal. The ISO and FERC still believe that in the long term notal pricing is the way to go. But this is basically, I would say, this is a temporary reprieve in terms of the first stage of implementation how we will have load aggregation. And, I am not going to attempt to quantify. Dawes: Thank you. Rosenbaum: Any other questions? If not lets move on. I don’t believe we have any unfinished business. The first item under New Business is the Water Survey. Water Survey Balachandran: And Jane Ratchye, Senior Resource Planner will introduce this topic and I believe hand it over to Bernard Erlich to make the presentation and Bernard is the Senior Market Analyst in the Resource Management Division. Jane Ratchye: That is just what I was going to do. I was going to introduce Bernard Erlich, our Senior Market Analyst and he is an expert in survey design and market information, the acquiring of market information. So I will let him make the presentation. We’d basically like some feedback on the kinds of questions we put together. If you read that draft survey it looks like we have asked the same question about 4 times. We may not want to ask all the questions that we have on that draft survey and would like to hear your feedback which ones you believe would bring us the information that would be valuable to us in making recommendations on how to use or if we use the wells and Bernard is going to go through each question and also kind of walk you through how we would interpret sample results from the questions like the ones we’ve asked. Minutes: 12/03/02 Approved 1/14/04 Page 5 of 16 Erlich: Essentially the survey, the draft survey instrument that you have in front of you is designed to evaluate the community’s preferences regarding trade offs between quality, water availability, and prices. What we are trying to do here is obtain feedback from you about the best way to survey the community on those topics. So I am going to walk you through the questions that we have drafted. The first one that you have in front of you here are two ranking questions. Essentially number 1 asks the customer to rank on a scale from 1 to 3; the quality, the availability of water in a drought and the price. So for instance, if a customer were to rank quality as the highest feature in terms of importance then, availability, and then prices, it would tell us that that customer would be very unlikely to accept lower quality in exchange of lower prices.. The second ranking question is a snapshot of three possible portfolios. Sorry three possible portfolios. All those portfolios are possible droughts supply options and we would essentially ask customers to tell us what is their preferred option. The next slide shows… Dawes: Bernard you want comments as you go or at the end? Erlich: I was planning on showing you how the results could be interpreted at the end and first walk you through the questions if that is fine with you. Dawes: Sure. Erlich: The second question. The second slide here is an example of trade off questions. In the first question, we set the price at the lowest possible level and then we force the customer to make a trade of between quality and availability and so of course they can never have the lowest price the best quality and no cut backs. In this case we fixed the price at the lowest level and we asked them to make a trade off between availability and quality. The second question here fixes the quality at the highest level and ask the customer to make a trade off in terms of prices and availability. In the last question, there is no restriction on water use and the customer must make a trade off between prices and quality. The next question is another version of the trade off approach. In the first example, we are offering unrestricted supply at the lowest cost and we are asking the customer how far they are willing to go in terms of decreased water quality so the first alternative is a blend of Hetch Hetchy Water and highly treated groundwater and the second lowest option is a blend of Hetch Hetchy and groundwater that meets all water quality standards so it is drinkable water. It is not highly treated. The second question here is again a trade off where we offer the customer the lowest possible price for the highest quality and then we are asking them how far they are willing to go in terms of water cutoff. So 5% to more than 20% in a drought. In the last trade-off option, the supply is unrestricted and the quality is very high. Of course in that case the customer has to pay more for water and so we are offering a bunch of price increases that the customer has to choose from. The last part of the survey is more generic information- gathering piece. We are asking Palo Alto’s residents what is their primary source of drinking water. So if you have a choice between tap water filtered, water, bottle water or other and in if they do not use tap water we are asking them to identify the primary reason for using bottled or treated drinking water. That kind of question reveals how Minutes: 12/03/02 Approved 1/14/04 Page 6 of 16 much the customer is willing to pay (by purchasing bottle water) in order to receive what she perceives as higher quality water. I do not know if you have any questions at this point. I am planning now to walk you through possible interpretation, in other words, how we could possibly interpret the survey results based on the questions that we have drafted. Dawes: I would suggest that you define quality in the first slide. You say the highest quality possible and I would put in parentheses taste, smell, clarity. I mean just so that people could judge the answers Erlich: I think quality here is defined as the chemicals and minerals that are included in water. We rate as highest quality Hetch Hetchy the second level quality is a blend of Hetch Hetchy with highly treated well water and the third option is a blend of Hetch Hetchy non treated groundwater however meeting all standards. So there are three level of quality. Taste is not a parameter in the quality evaluation. Ratchye: Commissioner Dawes let me add something here. I like your suggestion. That is a good idea because I think the concept of quality is difficult to get your arms around and to define the idea of having especially this is going to be a web based survey as recommended in the memo that we do use words like that will be meaningful to residents in defining that. Dawes: And particularly in view of what transpired in the last several weeks. The note in the newspaper the lady with hives and so forth due to shutting off the Hetch Hetchy and using the groundwater over in the Sunal area. I mean I certainly could smell the difference and when somebody says quality of Hetch Hetchy Water; smell, clarity, taste is critical. Anyway that is my idea. Dahlen: Can I also ask a question here. When it comes to just the definition I agree with Commissioner Dawes. The survey is focused on drought supply water. We are not going to water supply in general. I take it decision was made. Although I think that it may be useful to open this up to water supply in general. But given that this is limited to drought supply water then wherever there is the term water in the question or in the answer I would define that as drought supply water. so it is clear to people reading through the questionnaire. Do you want comments now on the format of the questions or do you want to reserve that until after your discussion on the analysis? Erlich: We can go over the comments at this point. Dahlen: Okay. I would just point out. I thought the most useful questions where you can you really have a multi variant analysis. You got three key parameters you are looking at. It seems to me that one of the best ways to go about really pulling out where the customer is going, with their what their concerns are. Is your question #2 under the ranking questions where you are providing them with an option? You are listing various categories here and they have to choose between different options. It seems like that is the one you are really going to pull out where the customer stands. And I guess my take Minutes: 12/03/02 Approved 1/14/04 Page 7 of 16 is and this may kind of carry out with what Jane mentioned earlier that some of the questions seem to be repeating earlier themes. I took the trade off questions and the trade of limit questions many of them to be very similar to the options. I guess my suggestion would be focus on option setting as opposed to trying to pull out one parameter at a time. I think that and you will explain how your analysis is done. But it seems to me very difficult to do this type of analysis if you are addressing each parameter separately and then you are also doing the full option questions. I can see that you may get inconsistent results there. It may be very difficult to evaluate. The question on the trade of limit questions number one where you are looking at the blend of Hetch Hetchy water with highly treated groundwater versus blend of Hetch Hetchy with groundwater. This particular question seems to me to be a bias question. I didn’t like the tone of this question at all. It looks like there’s. We are claiming that we are going to be providing the customer with quality water, with high quality water. So suddenly we are talking about highly treated groundwater as if there is variability here in the quality. All the waters is going to meet the regulatory requirements. So this one seems to put a bias on that. In addition the highly treated groundwater looks to me like there is a sort of a hidden agenda there. I guess it may be the wording there that may be worth looking at. Ratchye: Let me ask you a question Commissioner Dahlen. The idea there is there are different levels of quality even though all of them will meet all the drinking water standards. There is a minimum level that could meet the drinking water standards but you could also go as far as reverse osmosis. To make that definitely improve water quality so how do you recommend that we phrase that question. Dahlen: I quess then the question is more what do you need from the person taking this questionnaire? What answer are you looking for on this particular question? Ratchye: We need some way to characterize water of different qualities. And the lowest quality would still meet the drinking water standards but that there are levels that are higher than that and so we struggled with how to describe those. I mean I am not sure that even using even the short hand of Hetch Hetchy is automatically in peoples mind supreme quality. Maybe people don’t even think that Hetch Hetchy to us kind of means the top of the line but I am wondering do you have any recommendations for us to use just the best quality, the lowest minerals or how would you describe that? Dahlen: I think that number 2 where you go through the different droughts of by options you are bringing out a quality variation in those comparisons. Meets all standards, highest, high. I mean right there you’ve put in different levels of quality within those options. Dawes: Excuse me. May I interject you that I think people would respond to a subjective measure here because if I read each of these two I would say Gee if these things tasted like what I have and didn’t smell and was clear I’d accept both of those happily. But if you say that the trade offs are what we have now which is defined as the highest quality water in the state. Second is a blend of Hetch Hetchy water and highly treated groundwater which would be like what we have but might have a slight smell or Minutes: 12/03/02 Approved 1/14/04 Page 8 of 16 might have a slight cloudiness to it. Then the third one is blend of Hetch Hetchy water and groundwater. This meets all standards but it would most certainly have an odor of dead leaves to it and have a slightly cloudy look. I mean that is what the differences in quality are. I mean you get to drink well water and frankly the water that we are getting right today has a smell to it. When I take a shower I can smell dead leaves. And I have not a very good smeller. Rosenbaum: I agree with those comments. I will give you a general my general reaction is that the survey is far too complex and I would limit to one question which of these three would you be willing to take the Hetch Hetchy I mean that’s a… and explain that Hetch Hetchy is what you are getting now and that Hetch Hetch with highly treated groundwater, which may be undetectable from Hetch Hetchy alone, and Hetch Hetchy with untreated groundwater which meets standards but you will most likely know the difference. If you can get hundred people that tell you which of those they want and there maybe reasons which you haven’t even gone into here as to why people don’t want to use well water. It causes ground subsidence, it is environmentally undesirable so there well maybe a group of people who just want to use, who will put up with the shortage and just use Hetch Hetchy. But I would try to keep it as simple as possible. Erlich: Very well. Bechtel: On this I have just one comment Bernard or maybe two. One is I understand where you are going and I think the way you have asked questions are fine. I put them together so I know what you are trying to do is identify specific thing. I would take out any words like reverse osmoses or any of those kinds of things. I think the way Chairman Rosenbaum describe it was quite clear and others that describe is good probably in words probably at the beginning. And I guess my third comment was we haven’t discussed how you collect it. Whether it is web or telephone or so on. I opt for dropping a few of the questions if you can, particularly because even though we have a lot of internet savvy people here not everybody has broadband. If they are using a dial up connection to ask to do a bunch of surveys, it maybe a little tedious for these people, so you want to make sure that you do not assume everybody has a broadband connection and can take all the time in the world to do the survey. Therefore my feeling to drop a few questions, eliminate some of the technical words or add some things at the beginning or write their response. I think it would make it easier for people to answer the questions. Erlich: Okay. I am going to proceed to the possible interpretation of the results starting with the trade off limit questions. Here is what I have done. I have presented a hypothetical answer to the trade off limit questions. On the first trade off question, the customer is willing to accept 15% cutbacks in her water supply. The same customer is willing, in order to ensure unrestricted water supply and high quality, to pay a monthly bill of $80.00. This customer , in order to have unrestricted supply at the lowest price per gallon, is willing to trade off quality and accept a blend of Hetch Hetchy water and groundwater. Let us first look at this table to show you what I an trying to achieve with these questions. The table summarizes the customer’s answers If you look at the first line here you have for the best quality and uninterrupted supply the customer is willing to Minutes: 12/03/02 Approved 1/14/04 Page 9 of 16 pay $30.00 more than what he is currently paying (i.e., she is now paying $80.00) . The average residential bill is around $50.00 so the customer is willing to pay $30.00 more for this portfolio (best quality and uninterrupted supply). Now the second line shows that for the lowest price and uninterrupted supply she is willing to trade of quality and get Hetch Hetchy with groundwater and the last line shows that for the best quality and the lowest price she is willing to accept 15% cutback. And so the two bold Xs show that if you look at the lines that correspond to best quality, you can see that to avoid a 15% cutback this customer is willing to pay $30.00 more than her current water bill. So that allows us to quantify the value of reliability in dollar terms. Dahlen: You are putting the dollar amount at $80.00 per month is very helpful. It would be nice if the survey somehow told you that what you are signing up for is going to be $20.00 per month or $30.00 starting with a baseline of $50.00 I think if the customer knew what they are choosing for the dollar amount they have that in front of them and understood where this was going, you might get more honest answers once they realize wow okay I am going from $50.00 to $80.00 a month now I know what the cost is. The thing that putting it in terms of 10%, 15% if people don’t have a number in front of them to work with a dollar number, it is difficult to interpret this. Erlich: So what let me make sure I understand what you are saying. The dollar amount here is $30.00 above their current water bill and the 15% cutback is decrease in reliability and I think what you are suggesting if I am correct is to make sure to communicate to the customer that there is a $30.00 increase in what they would pay and make it understandable what the 15% cutback represents in terms of I don’t’ know how many showers they can take everyday or something like that. Dahlen: Absolutely, and make it clear on the question that their baseline should be $50.00. Because sometime the people know what their whole utility bill is but they don’t always have in their head what their water portion is. Making that clear I think would help. Erlich: Very good. This is the same customer but another reading of his answers. In this case we fixed the supply to highest possible, which is uninterrupted supply, and we see that the customer is willing to pay $30.00 in order to increase water quality from a blend of Hetch Hetchy and groundwater to the highest quality. So again it allows us to quantify in monetary term what value they put here on water quality. I am going to go over the ranking questions now and again this is an hypothetical answer customer would have ranked the quality of the water as the most important criteria for him. No restriction comes second and the lowest price as third. Essentially the way we interpret this is very simple: the customer is least willing to sacrifice water quality during drought time This question is a portfolio ranking question; essentially we present the customer with three possible water supply profiles. Customers’ responses would represent the aggregated preference of the residential population pertaining to the three possible drought time water supply options. So if we were to tell the customers: “these are your choices, pick one.” This question would tell us which profile the residential customers prefer. Minutes: 12/03/02 Approved 1/14/04 Page 10 of 16 I am going to go over some additional trade off questions. This question allows us to evaluate how sensitive customers are to one dimension of the choice they have to make here. In order to illustrate this, I have chosen to illustrate the reliability of the supply. In the ranking questions we were asking the customers to tell us whether the price was the most important criteria, reliability or quality. In this case we are going to look at the percentage of the customers who have ranked uninterrupted supply as their number 1 or number 2. From that we can infer that less than 40% or 40% of the population would be potentially unhappy if there were any type of water restriction. Now, if we take those customers who have ranked water supply as the third (least important criteria in their choice) and we start looking at how these customers responded to cutbacks; we could find out that say 20% of those customers would be are accepting a 5% cutback in water supply. We could then infer that a 5% cutback would potentially make 60% of the population unhappy at max. And we go on with further cutbacks. Essentially what we are looking at is the sensitivity of the customer with regards to reliability of the supply. We do the same exercise for prices and quality and we would look at sensitivity profile we could possibly discover that quality is a much more sensitive criteria than reliability. That concludes the interpretation of the results. I’d be happy to try to answer questions if you have any. Rosenbaum: Thank you Bernard. Do we have questions? George. Bechtel: I didn’t see any introduction to the subject. I guess what I am saying is I did not see a pro forma of dialogue if you are doing a telephone survey or even a web survey as to why we are asking these questions. Do you plan to put together a statement upfront to discuss with the or at least inform the recipient of the survey as to why we are doing this. Erlich: Yes. We are planning to explain that we are looking at the various drought time water supply options and that we are investigating what the preferences of the residents of Palo Alto are in terms of water supply. I know we have to phrase this differently. But the purpose of the survey would be stated clearly; if it is a web survey it would be stated at the very beginning of the web presentation. Bechtel: Thank you. I think we would like to see that at some point I think it could be interesting for us to at least see how we are introducing this before the survey is actually carried out. Erlich: Okay. Dahlen: Bernard, I had a question. Do you want to put a question in there that asks the customer whether they care where their water comes from? Erlich: Specifically the origin is not listed as criteria. However, the origin influences the quality, which is one of the decision criteria. So indirectly the origin of the water (e.g., Hetchy or groundwater) will be reflected in the customer choices through the quality dimension of the choice. But we are not specifically asking if they prefer Hetch Hetchy to some other supply in the survey. Minutes: 12/03/02 Approved 1/14/04 Page 11 of 16 Rosenbaum: When we had the last drought per unit prices of water were increased sharply for two reasons. One because you still have to meet the capital cost. So if you are selling less water the capital cost per unit goes up and the other because that was our method of discouraging use. So we had a very highly inverted structure so that even if we used no well water in the event of a drought and you are going to have a significant increase in cost. Have you thought about that in the phrasing of your question which seems to suggest that there is an option out there with no cost increase at all. Erlich: I think the survey shows that no cost increase is a possibility since one of the supply profile shows $50.00 monthly bill but then the customer has to trade of either quality or reliability. So the pricing is included in the survey in terms of where you can have fixed prices or you can have stable prices, prices that are essentially identical to what you are paying now but then there will be cutbacks or the quality of the water will decrease. Rosenbaum: I guess I am saying that you can have both cutbacks and price increases because of the need to increase the price per unit. Erlich: Right. That is correct and I am not sure that it is not one of the options in the survey actually. Ratchye: Mr. Rosenbaum I think that we are talking about is during this whole survey as Commissioner Dahlen and I identified is just for supplies in a drought and so the baseline cost would be the baseline cost in a drought which you are right would be higher than a normal year. You know there could be the baseline cost or even higher and so I think we could have that as part of the preamble that the cost would be higher in a drought but there would still be a baseline price that would be likely. Now I guess if what you are getting at is if you used a lower amount in other words if you cut back personally then your bill would go down. Is that what you are asking us to communicate. Rosenbaum: No No. I am just wondering if you have given this any thought in the phrasing of your questions and clearly if you used the same amount of water or well. People complained in the last drought that even though they were conserving their total bill was higher because the increase in the price per unit was considerably greater than their percentage of reduction in use. So I think it would be a typical situation in another drought and that there would be increases in people’s bills even if they accepted a reduction. I guess I would still having heard all this comes back to my original suggestion with one modification. One question would you be willing to put up with some percentage less and get the same water we get now. Would you be willing to perhaps have as much water as you get now but have it be of definitely lower quality and I don’t know whether there is a dollar cost associated with that and the third one is would you be willing to put up with water that might be identical to Hetch Hetchy by using highly treated groundwater but at some significant additional cost if that’s where the numbers come out and I think that would probably be about us as good a piece of information as you can get. Jane. Minutes: 12/03/02 Approved 1/14/04 Page 12 of 16 Ratchye: I had an answer to Commissioner Bechtel’s question. You were asking that you’d like to see the preamble for the survey before it is final and we had the next steps up here. We were planning to conduct a survey in the relative near future. So I am not sure there would be time to come back to UAC with that. On the other hand I am slightly worried about surveying the community at the moment because of the water quality change that we are undergoing right on and that is going to be that way until February and then there is the introduction of chloramines. So I am worried that the survey results somehow be informed by very recent or current water quality and the water issues that we have right now. So it is possible that we may delay it beyond our current plans so it was just a comment. We haven’t made that decision. Dawes: One other suggestion on the preamble, which we touched on a little bit. The environmental concerns of the community are huge variable here. And I think that the preamble should put those to rest saying that the PAU has studied the groundwater situation extensively and our engineers have assured the utility that temporary use of groundwater during droughts will not cause subsidence or long term sea water intrusion under Palo Alto or well contamination. In effect that their environmental concerns should be laid to rest for temporary use during droughts. Rosenbaum: Good point Dexter. Alright. Is there anything else? Elizabeth. Dahlen: I had a question on the format for the survey. I personally prefer mailing surveys. I think when you get them in the mail you tend to look at them and set aside to a point where you have time to look at it and put some effort in responding to it. I just wanted to throw that out since I saw that you had come to the conclusion that you were going to do it as a web base survey. Any thoughts on that? Erlich: I agree that the major advantage of a web survey is that the respondent will take the time to complete the survey and it is for her convenience and the response might be more thoughtful. Dahlen: Bernard. Do you mean of the mail survey? Erlich: That’s what you were asking, isn’t it? Dahlen: I thought you had answered web survey. I think you did. Erlich: I am sorry. I meant mail survey. This is one of the major advantages. The drawback of the mail survey is it can be pretty time consuming. Probably it would be a little bit more costly than a web survey. Essentially in a mail survey we are going to go through two or three rounds of sending request for information and gathering the results and keying in the results. For analysis it is more time consuming than a web survey but I agree with you that in terms of the thoughtfulness of the responses a mail survey is likely to allow for the customer to think carefully before answering. However if the survey is limited to questions about customer preferences for three water supply options, it is not Minutes: 12/03/02 Approved 1/14/04 Page 13 of 16 clear to me that the level of thoughtfulness that needs to go into the answer grants the loss of time that a mail survey would make us incur. Rosenbaum: Alright. I think those are all our questions and comments. I hope our feedback has been useful and as I understand that if you decide to delay the survey you might even come back with a revised version for yet further feedback but that is clearly a staff’s option. Alright thank you Bernard and thank you Jane. Let us move on to our next item which is Legislative Priorities. Legislative Priorities Balachandran: Okay. I believe this is the third year we are doing this. Several years back UAC asked us to put this together in December timeframe. I just have a general guideline of the direction we headed and we have done this for two years in a row. This is the third year. The format is basically the same as what you have seen before. Actually I am going to stop right here and handed over to Tom Kabat who will take you through this report and will be available to answer questions. Rosenbaum: Thank you Tom. Kabat: I am Tom Kabat, Senior Resource originator for the Utilities. You see again this draft legislative priorities for 2004. Its here for your comment. I believe the agenda specifies it is also here for action but was incorrect. Balachandran: Sorry I was incorrect, the agenda does say action. Kabat: As a result of the comments we got from the commission last year we added a general section of priorities for all utilities incorporating some of those comments we received and then went back to the staff as well to find out what their priorities resources and venues they would have used. To implement these priorities for the year 2004. So I would like to throw it open for your discussion and our note taking. Rosenbaum: Colleagues George. Bechtel: I want to clarify UAC action on this. We did not notice as requiring action, just comments back to you, feedback is I suppose what you are referring to. Balachandran: I believe that’s the way we did for the last couple of years and by the way this report we don’t plan to take to the City Council other than the standard in the UAC reports and minutes that get forwarded to the City Council. My recollection is we asked you for feedback both of the times. We have incorporated that feedback. Dawes: I agree with that recollection. This does not require any action but normally we take action when the council has to take action to guide their voting and this does not require that. Minutes: 12/03/02 Approved 1/14/04 Page 14 of 16 Dahlen: Thank you Commissioner Rosenbaum. I had two questions one is for water on priorities. Are these the actual Is this your prioritization of these issues the way you got them numbered here 1,2 ,3 and 4 and so forth? Kabat: I don’t believe that this is a rank order of the priorities. It is just these 7 items are the high priority items together. Dahlen: Okay thanks. And then with regards to the priorities under water. Item Number 6 - I had a question on this one. Support the development of a regional crisis management plan. Is this the drought protection plan or what plan is this referring to? Balachandran: Fortunately we don’t have a water expert in the meeting but I will tell you what I know about this. As part of the state auditor’s report and everything that has been done to analyze this system, one of the things that was addressed was we don’t have a crisis plan if we have a major earthquake before all the fixes are made. There really isn’t a coordinated crisis management plan. It is a kind of a parallel process so that you make sure you had the crisis management plan in place. And the different water districts SFPUC and Santa Clara Valley Water District are doing some vulnerability studies and some coordination is going on in this area. I have reached the end of my knowledge on that right now. Dahlen: Thanks Girish. I had one last question on the Telecom and Fiber. Under priorities there we indicate that “insure the municipalities are allowed to enter the Fiber business”. We can’t insure this. So I was wondering why we used the word insure. Balachandran: Should we spell ‘en’? Rosenbaum: Dexter Dawes: My question too dealt with that number 5. The commission has asked on several occasions for a legal paper on what we can and can’t do with respect to FTTH and to date we have not received anything written. We did get an oral assurance from our Telecom Manager that as far as they could see there was nothing that would prohibit this program from going forward. But at this juncture I am still very much in the dark about what legalities surround the City of Palo Alto entering the Telecommunications arena and going into the television business. So you know I have no clue whether these priorities are right now because I don’t know what handcuffs we have on us. And I don’t know that anybody does at this juncture. So I don’t know what it means. Rosenbaum: George. Bechtel: On water - Elizabeth’s question about regional crisis management cause me to think about something called mutual assistance. And maybe as crisis management. Is it feasible or could it be made a study of this management of mutual assistance of storage that is moving water from one city to another. I don’t know how much storage we have. Do we have all of the engineering, do you know if there is a survey or a database of water Minutes: 12/03/02 Approved 1/14/04 Page 15 of 16 storage capabilities for each of the members of BAUWA. For example, in the case of a major earthquake that covers part of our system the system allow us to share water between cities? Certainly, no one would really want to give up their sources, but it seems to me that if you are going to deal with crisis management I would hope a lot of thought would go into that. A good workshop on that could spring forth with some good ideas. On the other hand, maybe another priority exists on the water side. I notice we had some discussions like desalination and immediately, one of us commented how expensive that was and so on. I think it would be a priority legislative-wise if we are proposing study funds that we look at supporting research. I guess it is not right to call them green water sources (that has a bad connotation) but alternative water sources other than normal rainfall or groundwater It would seem to me, we support other alternative energy sources therefore we should support alternative water sources like desalination, if could ever be made cheap enough. That would certainly be helpful to us. So there seems to be no items that are called R&D projects on the water priority side. I would like to see something along those lines. There is security of infrastructure that is I think dealing really with security issues, act of terrorism and so on. On the gas side ,Dexter mentioned earlier in the evening about the energy bill and I would think I would like to see us have some sort of analysis of the current energy bills that are on the table that have been tabled over the holidays to be brought up next year. What impact will that energy bill have on us from our gas point of view? I frankly did not get a chance to look at all that stuff so I basically see the tables and the press there are a lot of give aways by our government. Some cities receive all sorts of things in that bill. I don’t know how many pages it is but maybe there is something in there we ought to know about that would be relevant to us. So certainly from the gas point of view maybe from the electric point of view too. Close following the energy bill would be a good thing for us to do. On the electric side again on priorities my last item has to do with item number 7 under priorities. We say promote funding for the distributed generation. Nobody is going to give us money to build something so what did you have in mind here, a grant? Are you talking about getting grants for distributed generation? Are we are talking about research on different distributed generated methods or just more specifically I was wondering what you had in mind under that item for generation? So I think it could be flushed out to add some more specifics about what we have in mind legislatively for the distributed generation. Otherwise I think it is a very comprehensive list and if we follow all these items I think we will be on the top and we have a full plate of legislative issues to bring up at our meetings with our legislators. Rosenbaum: I have a couple of comments perhaps some more serious than others. Under all Utilities, I kind of get a kick out of “ protecting against the efforts to balance on the budget on the back of “ is usually worded “on the back of labor” but you made it “utility customers”. On the other hand if you would have added cities if you were to say city, state, or federal budgets, then we would have a conflict. When I think back to putting the traffic signals under the utilities we would be conflict on that one but of course you don’t mention city there. Under Telecom and Fiber Resources we got the Minutes: 12/03/02 Approved 1/14/04 Page 16 of 16 FTTH council which hardly seems to belong in the same group as all those august bodies. It is a bunch of manufacturers of Telecommunications equipment who are trying to survive and I am not sure I would look to them for much of a resource. Otherwise I think it is a very useful exercise and I appreciate staff putting it together for us each year. Anything else on this issue. If not you have our feedback and we thank you. Adjournment Meeting adjourned. We will have our next regularly scheduled meeting, which will be January 14, and there are a couple of things I want to mention. Randy Baldschun is having his farewell party downstairs in the Cafeteria from 3:00pm – 4:00pm next Wednesday, 12/10 and if we can I am sure it would be appreciated if we attend and with regard to the minutes Dexter Dawes has volunteered to review the minutes of this meeting. So let Dee know that she should contact Dexter when she has them ready for review and with that we are adjourned.