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HomeMy WebLinkAbout2005-01-12 Utilities Advisory Commission Summary MinutesDDDRRRAAAFFFTTT MMMIIINNNUUUTTTEEESSS UAC Minutes - 01/12/05 - Page 1 of 10 AAAPPPPPPRRROOOVVVEEEDDD 222///999///000555 I. ROLL CALL The UAC meeting was called to order on January 12, 2005 at 7:00 p.m. in the Council Conference Room. Those in attendance were: Commissioners Dawes, Melton, Bechtel, Dahlen, Rosenbaum, and Council Liaison Bern Beecham. II. ORAL COMMUNICATIONS None. III. APPROVAL OF THE MINUTES In the November 3, 2004 minutes, Commissioner Rosenbaum noted a spelling error in the name of staff that should be corrected. He remarked that the section dealing with the gas rate increase lacked the clarity he expected. Rosenbaum had no solution but stated he feels it didn’t work out well. John Ulrich asked the commissioners to give any feedback on any lack of clarity with a list questions of things not clear so we can cover thoroughly. He also reminded the group that tapes from all meetings are available for review. Dawes motioned for approval of the minutes. Seconded by Melton. MOTION APPROVED: Minutes approved 4-0 with abstention from Rosenbaum. IV. AGENDA REVIEW AND REVISIONS None V. REPORTS FROM COMMISSIONER MEETINGS/EVENTS Commissioner Dawes reported on the CMUA in Sacramento on January 10th. Melton and Dawes attended with John Ulrich and Bern Beecham. They had an hour session with NCPA then panel with CMUA then visited legislators in the afternoon. Where is governor going with items that are important with CMUA? No one seems to know since the budget has not been submitted yet. Important to Munis – renewables and if exempted from rules that legislation will probably get a bill, that might be introduced by Senator Joe Simitian but still up in the air. Group urged to continue to have their legislators represent our needs for resource adequacy – Muni’s generally okay but may be effort to sweep them into requirements that will be promulgated on a state-wide basis. Dawes would like the Senate to push for an integrated bill. The new Senator Martha Escutia, Chair of Energy, Utilities and Communications, did not seem very informed. Assemblyman Ira Ruskin was very friendly and made a point that he will City of Palo Alto Utilities Advisory Commission UAC Minutes - 01/12/05 - Page 2 of 10 work with PAU as things come up. Senator Simitian is not very sympathetic to local control issues and, in fact, urged Munis to be less negative and to realize they have to join with state legislature. Dawes and Beecham expressed the fact that there is a great difference in the size among Munis in the State. Dawes remarked that he feels the differential by size would be important. Melton added committee assignments were not yet decided; it doesn’t appear that either of our two local representatives will be on the committees that will be involved in muni issues. He is not sure our local legislators will be in a position to be very helpful to the municipal utilities in this next session. Beecham added that Assemblyman Ruskin will be on a committee that will have energy issues. Senator Simitian allowed that he will play a significant role on energy renewable standards. Commissioner Keison, in an informal talk, spoke of supporting SB No.1 which would cost $20 billion for 1 million solar homes. Bern suggested if we want to help the environment with CO2 we should consider if that is the best way to spend $20 billion. VI. DIRECTOR OF UTILITIES REPORT John thanked Beecham, Dawes, and Melton for attending this trip with him. He has concern that there is not strong legislation for very clear dynamic energy policy for objectives. After speaking with Senator Simitian –what are we going to do about transmission, our relations between our load and customers – John didn’t leave feeling any more comfortable than when we went. Ulrich spoke of the 20-year contract for a 50% share of 13.4 mGW landfill – Half Moon Bay is on Council agenda for Jan 18th. Price is $53 a MGW hour and represents approximately 5% of PA’s annual load. This will be dispatched against the market. Karl Knapp explained that this will reflect the highest value for Palo Alto and will get the highest value out of this plan. We can’t control seasonally and it runs wherever there is enough landfill available. Palo Alto will take power as available. Ulrich said the generator at the Palo Alto landfill has been decommissioned by the developer. Landfill gas will now be used by WW Quality plant, reducing its natural gas use by 50%. Western operations have no change in frequency but we just ended our 40 year contract with Western. No interruption in power for Palo Alto. Ulrich expressed compliments to NCPA, the Commissioners and CPAU staff for many hours of work to get that in line. Due to low reservoirs, we have not received any Western energy since our contract ended. Beecham gave a brief report on BAWSCA activities. SFPUC is holding a series of workshops this week. SFPUC plans on making revisions to their CIP for Hetch Hetchy upgrade. Staff believes they can meet all requirements but the environmentalists say regardless of that, the users need to reduce future needs. San Francisco will decide on UAC Minutes - 01/12/05 - Page 3 of 10 the scope of the CIP and what kind of future resource supply they will need. Bern will be attending a workshop tomorrow and possibly also on Friday. VII. UNFINISHED BUSINESS Rosenbaum expressed concerns about chloramines. Earlier this week, the hot water stopped running in his kitchen sink. He found the washer had disintegrated in the supply valve. PAU’s website said to get a choloramine-proof washer at the hardware store. He went to the hardware and was told they haven’t come in yet. He remarked that we are offering information on our website that is of no practical use and staff should check to see if there is a supply and where available before directing the public. VIII. NEW BUSINESS 1. Annual Legislative Priorities Report – Action Ulrich offered to answer questions the Commissioners may have. We are doing this pursuant to the Muni code that asks us to review and formulate plans. PAU is always willing to provide proposals. Debra Lloyd and Girish Balachandran are here to answer any questions. Melton had no questions but did comment that this is an omnibus type of document. Without any indication of priorities on this report it is hard to make any judgment about it. He thinks all the goals are reasonable but not sure he sees much of anything to take an action on but he has no issues with the action items. Bechtel recommended the goals for the electric utility. Goal in Palo Alto for more green energy, should have a goal that talks about increasing development of alternative energy resources (i.e., solar homes and supporting development). Thinks we should be more specific in our recommendations. Balachandran said we do have a Long Term Resource Plan and a Public Benefits Plan where we direct money. Council decides how to spend that money. Bechtel remarked that we should monitor statewide and federal activities and support them if they make sense to us. Dawes said we need to meet long term renewable power goals. Beecham said there will be another push for an energy plan through the Senate. Bechtel remarked that we don’t say anything in our own legislative plan. Girish spoke about the monitoring __________________. Rosenbaum thinks we have presented a thorough, complete list. Dahlen agreed. She mentioned that in the Water topic a lot of our key issues and concerns were identified. Questioned regarding No.7 under Water – advocacy pipeline, is this part of existing plan or hope for a new plan? Balachandran answered this is talking about San Francisco UAC Minutes - 01/12/05 - Page 4 of 10 and Santa Clara. Dahlen asked if we are just monitoring these discussions. AB1823 and 1860 monitor to ensure what codes are enacted. Who would be modifying these? Beecham said there has been occasion where agencies like BAWSCA or SFPUC has wanted to make changes.. We want to ensure any changes that come up are doable. BAWSCA has no plans to make any changes at this time. Dawes mentioned on No5. Electric: Action – promote funding should be expanded to analyze any regulations that limit that. No 10 in Electric; assumed a statewide problem rather than Muni. Munis are to develop their own policies. Separate interconnection standard seems odd. Knapp replied that different Munis have their own needs. Rule 21 includes a step-by- step process to get your interconnection processed. Rule 21 is a total process. Palo Alto has bought into this for the time being but it may not always make sense for Palo Alto to do so. Balachandran remarked that we want our own governing bodies to institute rules. Dexter mentioned Water Goals (no.10)- develop own Public Benefits programs. Has there been any activity at the state level to extract our Public Benefits that we set aside? Girish said there is always pressure for us to conform with what the IOUs do but he is not aware of any attempt to control our money. Ulrich said there are some Munis who have thought about co-mingling their funds but we think since the money is collected from our customers in Palo Alto we should have it just for our Palo Alto community. Dawes asked for a motion to recommend approval. Bechtel inquired if the UAC is being asked to approve these or are they asking the City Council on behalf of the staff to approve these? Girish said our thinking is to formulate and review – the formulate part is the action. No intention of taking this to Council for approval. MOTION: Bechtel motioned that the UAC approve the legislative proposals for electric, gas, and water presented by the staff and approve the action items contained in this report. Rosenbaum seconded. MOTION PASSED: Unanimously approved. 2. Annual Public Benefits Plan Update – Information Ulrich introduced Anthony Enerio and informed the Commissioners that this is the annual update on where the money is being spent. He asked the Commissioners for questions. UAC Minutes - 01/12/05 - Page 5 of 10 Dahlen asked about the bullet item on PV demonstration – given the timeline on money to be spent, it seems like a tight time-frame. Are we on schedule and if not, will we still get the money? Anthony Enerio introduced Karl Knapp who said it should not be a problem to meet the schedule. The concept has already gone to the ARB once. Actual construction takes 2 weeks to 2 months. Most of the time spent on the project is figuring what you want to do and then hiring the designer. Bechtel asked about page one, Commercial Programs, he feels the explanation needs more details. Explain what commercial programs are under Public Benefits? Enerio explained two: Commercial Advantage (rebate program) lighting HVAC, chillers, boilers and the Customer Resource Efficiency Program – we provide energy audits to our large and key customers. The CARE program has a cap of money we provide for each customer; $10,000 for the study and $5,000 for small customers. Attachment B has the details of the expenses we have for these two programs. Bechtel commended staff for working with small businesses. Anthony’s proposal is for the 05/07 lighting retro fit. These are the hardest types of businesses for us to reach. We are in the process of RFP of selecting the contractor. Hoping to have program up and running in March. Anthony said this is a turn-key program and we will be assisting Ecology Action (EA). EA will go into the stores and do the entire retro-fit at one time. Bechtel asked about the PV Partners incentive. Anthony said for the amount we haven’t determined the actual amount since it hasn’t come out from the CEC. We would pay them for how much energy they generate from their PV over a period of time. PAU will not giving money up front but giving out as they produce the energy. Melton asked about page 4 – PAGreen program. Our standing in the nation is for participation measured by participants. PAU has measured kWh as the measure rather than number of participants. How do we stack up against others in the nation? Anthony said that while he has asked for that information, they haven’t started tallying up that metric information yet. We are at 11% now, our goal is to be number 1. Beecham said the residents have signed up Agilent, HP, Roche, CV Therapuetics, Lockheed and other commercial customers. Staff is currently working on signing up commercial customers. Melton asked on Page 11; series of public benefits budget items; electric public benefits, budget low income programs - there is a tripling of that budget from this year to the next couple of years. Why? Anthony explained this is due to the new program we are proposing. It is in relation to the energy assistance program where we will be expanding our current low income partners. We will partner with ESCO to provide components of different programs. UAC Minutes - 01/12/05 - Page 6 of 10 Melton asked if new services go to the same customer base that currently gets this. Anthony said we are expanding low-income to include some fixed income. PAU is working on developing this criteria but it will cover additional services and additional customers. Dawes asked about Public Benefits budget and funding by override on utility bills, does that accumulate as reserve and then come out as projects are completed or is it a year- by-year thing. Anthony said there is a reserve which was at $2million the last time he checked. Our share for the PV project will be coming out of that reserve ($1.4 million). Additional money will be coming from the Public Benefits fund. Funding for PV project from reserves and current benefits. To be spent 05-06 and 06-07. Should be more like $350,000 each. Dawes asked about fiber optic technology, “access additional benefits technology using utilities-owned optics to connect the meters”. Is there a separate study? Anthony said this is a pilot we are currently doing in City Hall. We call in for information using regular phone lines. We are looking at using the fiber optic connection to expand. Phone lines we can’t get real time data. Dawes asked if PAU is thinking about laying more fiber cable in the ground? Anthony said no, this is only to use what lines are currently out there. No thought in expanding the fiber optics. Bechtel asked for and received confirmation from Anthony and John that this would be for customers where fiber already runs to their building, commercial customers only. Ulrich said it could lead to potential benefits by using fiber we already have then look at expanding if it will make or save money. Melton asked a tangential question: Page 8 first sentence – Palo Alto is the only major agency not supplied by SCVWD. Ulrich said it costs $15 million to hook up. Melton said the day after the big one hits and Hetch Hetchy is down, that $15 million will look mighty cheap. Melton would like a strategic discussion agendized at a future meeting to discuss this issue. Dawes said the Commission has spent a lot of time on this topic before Melton came on board. At one time SCVWD said they would only have a proposal that they would build and we would pay for it and we would be committed to using. SCVWD is lower quality than Hetch Hetchy water. Numbers changing $15 million is lower that Dexter had heard of previously. Ulrich said $15 million would be to extend the pipe but didn’t include cost of ownership. If you do this, the pipe is there- now someone has to own it, pay for it and maintain it. Carollo looked at this as part of our plan. Ulrich will be sending Melton information about the Water Integration Resource Plan we reviewed and spent many hours working and discussion. Ulrich remarked that a problem is that no one can tell us if major earthquake hits, if it would render one pipe available and one pipe un-available. We would have no assurance that our supply of water would be available after a major earthquake. If you put wells in as the Plan calls for now, you’d have a better chance of UAC Minutes - 01/12/05 - Page 7 of 10 a supply of water after an earthquake happens. Beecham said the design goal is to have water re-supplied within 24 hours after a major earthquake. Melton remarked that today we are looking at 60 day down if earthquake is tonight. Ulrich said it is safe to say we have a plan but if it happens today or tomorrow or this next year we will be in trouble. Our plan is the reservoir and wells. Ulrich told Melton if he wants to bring back and have a discussion we can do that. Bechtel wants the quarterly water report to give us a status on current CIP. Ulrich said there is a significant difference in the money set aside for reservoir and 8 hour supply. We need that in place before you use the wells. Melton says our current plan does not get us through a major event. Ulrich remarked that we’ve been through all this and it’s in the Water Resource Plan. If the Commission does not feel we’ve spent the money in the right place there is a major concern. Decide if you want us to continue this study and go back and change the plan. You need to feel comfortable we’re doing the right thing. If you want to expand the Plan, the UAC needs to direct staff to do so. Dahlen said the integrated resources plan, as she recalls it, was a $15 million price with regards to drought supply as opposed to the strategic plan to add more redundancy to our water supply. She suggested we think about adding the integrated resources plan as another line item. Taping into that line, additional problems we might have, would they be willing to let us tap into only during emergency. Ulrich will send the Plan to commissioners again for review. Ulrich wants to get on with getting the water supply completed but is concerned that the Commissioners don’t approve of the Integrated Water Resource Plan. Dahlen said this is a new item, think of spending more money on redundancy in the system. Ulrich asked if she means we are not to look at this as our salvation for water during earthquake but in a drought situation? Dahlen replied no – should look at as a long term emergency supply if we are unable to receive Hetch Hetchy water for a longer period of time. Ulrich said factor in the cost of that redundancy. Girish said we ruled this out ; it’s a take or pay contract. How to deal with droughts – already have a plan for emergency needs. For normal years we were going to stick with Hetch Hetchy, then we went into cost for drought time but we rejected that idea. Girish asked what is new, what should we look at that we haven’t looked at before? Beecham noted the different backgrounds here among the commissioners. He asked staff to provide Melton all the information he needs then if there is a problem, we could have a further discussion. UAC Minutes - 01/12/05 - Page 8 of 10 Dexter remarked that for the Carollo emergency plan, as an add on to that plan we asked them to look at having that connection as an emergency alternative to us spending that money but the answer came back it wouldn’t full-fill that. No other questions. 3. Utilities Updated Strategic Plan - Action Ulrich introduced the revised update to the Utilities Strategic Plan (USP). Based on UAC feedback staff re-worked the plan. Changes are noted in red. Ipek Connelly and others have put a lot of time into this report. Dexter commended staff for the red lines which simplified review and thinks this is a great job. Melton echoed Dexter’s comments. Thinks UAC comments were considered and a fine job has been done. Dahlen questioned environmental measure Number 3 under water quality – it’s not in the updated version , is it somewhere else? Ipek said we will continue doing this but we were trying to be succinct in this plan and this will not be a measure. Bradshaw said it’s the annual water report – State Water Quality Report. We are required to do on an annual basis. Customer Values unique value – don’t keep local control? Girish directed group to page 5 of 10 last sentences refers to local control in that way. Didn’t specifically say local control. Thought a person off the street could understand. Sentiment is local control. Rosenbaum mentioned that he is pleased with financial measures, competitive rates. We are going to compare our rates with Santa Clara. Noticed we plan to compare the average gas bill to PG&E and Long Beach which is the only other municipal gas in California (may be a couple of others). They want to mirror So Cal Gas on how they buy gas for their customers. UTL buying on a monthly basis from the south. Beecham said our goal is to flatten it out. PG&E and Long Beach will have ups and downs. A long-term average basis might tell us if our strategy is superior to theirs. Balachandran said we have information going back to 1998 . We will try out several scenarios to see what works. Rosenbaum said on the actual water bill, we have been getting information. BAWSCA and Cal Water which is a private wholesale of Hetch Hetchy. They are the largest comparison we have. Balachandran thinks this would be a good start Rosenbaum asked UAC Minutes - 01/12/05 - Page 9 of 10 what is the BAWSCA average, is it an average of all cities? Balachandran said yes. How would BAWSCA measure it? View since they have two sources. Balachandran said we would look at both sources. Rosenbaum asked for CalWater what rate would be recorded as a CalWater? Ulrich said under CPUC jurisdiction, they explain where it is delivered in their territory. Charge reflecting work done by the city that owns the pipe system, they have a rate schedule. Ulrich was reluctant to get into a great amount of detail. Bechtel asked as part of our membership in BASWCA are we required to report information to them on a monthly basis. His goal is to not create extra staff time. Balachandran said information is there, purpose of this plan is to provide information to our governing bodies and the public at large. We are trying to winnow-down measures but that doesn’t mean we will stop doing other comparisons. Ulrich said our reason for doing the measurement is to show if we are meeting our goals in the USP. Don’t want to get into staff time getting into the details of comparison studies. Enough is enough to measure it. Dawes said previously it was too general and that is why we were asked for more specificity. Bechtel asked that the quarterly report statistic the same where we report more detail on other cities? Dawes asked for a motion. Rosenbaum moved that the UAC indicate to the City Council it approves the updated Strategic Plan. Bechtel seconded. Motion passed: Unanimous. IX. NEXT REGULARLY SCHEDULED MEETING February 9, 2005 – Council Conference Room X. FUTURE HIGHLIGHTS Possibly water to be scheduled. XI. ADJOURNMENT at 8:35 Respectfully submitted, UAC Minutes - 01/12/05 - Page 10 of 10 Dee Zichowic, CPAU Administrative Assistant