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HomeMy WebLinkAbout2007-09-05 Utilities Advisory Commission Summary Minutes Utilities Advisory Commission Minutes from: September 5, 2007 Approved on: November 7, 2007 Page 1 of 8 FINAL UTILITIES ADVISORY COMMISSION MINUTES OF SEPTEMBER 5, 2007 CALL TO ORDER Chairman Rosenbaum called to order at 7:00 p.m. the scheduled special meeting of the Utilities Advisory Commission. Present: George Bechtel, Dexter Dawes, Dick Rosenbaum Absent: Marilyn Keller, John Melton ORAL COMMUNICATIONS NONE APPROVAL OF THE MINUTES The minutes from the Aug. 1, 2007 were unanimously approved. AGENDA REVIEW NONE REPORT FROM COMMISSION MEETINGS/EVENTS Dawes noted attendance at the NCPA Commission meeting in Murphy’s California in late August. Noted discussion of politics and pending bills with regard to greenhouse gas legislation, and the apparent direction of the California Legislature to move to a cap and trade system. Also noted the many special interests that will demand attention. Dawes was unable to remain to the end of the discussion and asked whether there was any further update. Fong summarized the end of the meeting as NCPA members giving Utilities Advisory Commission Minutes from: September 5, 2007 Approved on: November 7, 2007 Page 2 of 8 direction to the NCPA General Manager to work within the municipal community (CMUA) to help craft principles that can be supported by the municipal community at the same time making every effort to retain local control over the implementation of laws around GHG reductions. UTILITIES DIRECTOR REPORT Valerie Fong provided an update on the additional budget funds requested and approved for the PV Partners program to be able to serve all of the demand for the Vantage townhouses mentioned in a recent Mercury News article, as flagged by Chair Rosenbaum. Fong also provided updates on the Palo Alto RFP for renewable generation projects with 8 bids being received by the close of bid this afternoon (September 5, 2007), on the customer education efforts for the Emergency Water Supply Advisory Vote Ballot measure, and a quick overview of an announcement of a public scoping meeting for the recycled water facility plan project. Additionally, Fong mentioned the resolutions expressing appreciation to retirees Lucie Hirmina and Blake Heitzman, to be approved by the Council at its September 10th meeting. Fong asked the Commissioners to let her know if they are interested in attending the NCPA Annual meeting to be held September 26 to 28, and noted that because staff does not anticipate any major legislative or regulatory updates prior to the October Commission meeting, staff recommends cancellation of the October Commission meeting. Dawes raised two issues: (1) why the increase in budget for the PV Partners program was not brought to the UAC, particularly since the Electric Supply Reserve budget was drawn down for this purpose, and (2) why the recycled water project was not brought to the UAC. Bechtel remarked that the new website reads well although some of the different sorting categories (such as the “Know Zone”) are less intuitive. Bechtel also noted his recollection that the recycled water project was brought to the UAC many months ago, and encouraged the continued study of the recycled water project. Utilities Advisory Commission Minutes from: September 5, 2007 Approved on: November 7, 2007 Page 3 of 8 Rosenbaum also recollected consideration of the recycled water project and noted his vote in opposition of the project, and noted the uneconomic nature of the project. Rosenbaum suggested that items such as the PV Partners budget amendment be brought in some fashion to the UAC’s attention so that the UAC could be well informed in the event of press coverage of a Utilities matters. Jane Ratchye, Assistant Director of Utilities, confirmed the uneconomic nature of the recycled water project and explained the need to complete the facilities planning study and environmental review in order to be in line for State grant funding. Ratchye also explained the benefit of obtaining State grant monies in making the project more economic for Palo Alto. Rosenbaum noted that if a project is not economic, getting subsidies from the state or others does not make it so. [Note: while no one present seemed to recall exactly when the recycled water project study was brought to the UAC, it was an educated guess that the presentation occurred at a meeting that Dawes was unable to attend.] UNFINISHED BUSINESS NONE NEW BUSINESS ITEM 1: STUDY SESSION: Study Session on Draft Program EIR for San Francisco’s Water System Improvement Program Ratchye summarized the Draft Program Environmental Impact Report (PEIR) for San Francisco Public Utilities Commission’s (SFPUC’s) Water System Improvement Program (WSIP) and the objectives for the WSIP set by the SFPUC. The current water supply for SFPUC’s regional water system consists of 218 million gallons per day (MGD) from the Tuolumne River and 47 MGD from local supplies in the East Bay and the Peninsula. The water supply to meet purchase requests of 300 MGD in 2030 for the Proposed WSIP consists of 243 MGD from Utilities Advisory Commission Minutes from: September 5, 2007 Approved on: November 7, 2007 Page 4 of 8 the Tuolumne River, 47 MGD from local supplies, and 10 MGD from recycled water, groundwater, and conservation measures in the City of San Francisco. Drought supplies for the proposed WSIP consist of less Tuolumne River and local supplies, additional storage capacity in Calaveras and Crystal Springs Reservoirs, 23 MGD of transfers from Modesto and Turlock Irrigation Districts (MID and TID), and a conjunctive use program which involves substituting regional system water with groundwater use in droughts. In addition, rationing of up 20% in any year will be necessary in an extended drought. The PEIR identifies the nature and magnitude of impacts associated with the projects as well as program level mitigations. Project-level EIRs that tier off of the PEIR will be done for individual projects as appropriate. Growth inducement is analyzed only in the PEIR; it will not be revisited in the Project EIRs. The major controversial issues identified in the PEIR include: a) growth inducement; b) purchase request increases; c) filtration avoidance goal; d) drought planning assumptions; and e) additional water diversions from the Tuolumne River. Regarding growth inducement, the WSIP supports planned growth in SFPUC’s existing service area, but not all the growth that the WSIP could support has been addressed in adopted general plans, partly because adopted general plans do not extend to 2030. Purchase request projections of the wholesale water agencies are being questioned by some as overestimated. Some believe that the projections should have taken into account more potential for additional conservation, water recycling, or other new technologies. Some have asked if the filtration avoidance goal limits alternatives that may make sense. Some believe that SFPUC will ultimately have to filter Hetch Hetchy water anyway. Regarding the drought rationing goal, some argue that the 20% cutback goal is a disincentive to invest in aggressive conservation efforts since after such investments, additional cutbacks in droughts will be difficult to achieve. Utilities Advisory Commission Minutes from: September 5, 2007 Approved on: November 7, 2007 Page 5 of 8 The WSIP proposal to take more water from the Tuolumne River is under attack from many environmental advocacy organizations who argue: a) that demands will not materialize; b) demands did not account for price elasticity; and c) adequate recycling programs and conservation measures were not included. The PEIR evaluates three Water Supply Variants: a) All 35 MGD from Tuolumne would have more severe impacts on Tuolumne, although no additional mitigations; b) regional desalination instead of transfers from MID/TID for drought would have a slight reduction of impacts on Tuolumne, but greater impacts from desalination facility; and c) 10% max rationing in droughts through additional transfers from MID/TID would have more severe impacts on Tuolumne, but no additional mitigations The PEIR analyzed seven alternatives to the WSIP: 1) no program; 2) no purchase request increase; 3) aggressive conservation, recycling, and groundwater; 4) lower Tuolumne River diversion; 5) year-round desalination; 6) regional desalination for drought; and 7) modified WSIP. In the No Program Alternative, projects to meet regulatory requirements would be built. Additional water demand would be served from increased diversions from Tuolumne, but rationing could go up to 30%. The alternative does not meet program objectives regarding seismic, delivery, and water supply reliability. The No Purchase Request Increase Alternative requires that the wholesale customers be restricted to the contractual limitation of 184 MGD (currently purchases = 170 MGD). Water transfers from MID/TID would be 1 MGD (instead of 23 MGD). The Aggressive Conservation, Recycling, and Groundwater Alternative counts on 19 MGD of additional conservation, recycled water, groundwater in service areas of the wholesale customers. There would be no drought-time transfers from MID/TID. In the Lower Tuolumne River Diversion Alternative, the increased diversions would come from the lower section of the Tuolumne. Additional facilities for diversion, conveyance, and treatment would be required. Transfers of 23 MGD of from MID/TID would be the same as the Proposed WSIP. Utilities Advisory Commission Minutes from: September 5, 2007 Approved on: November 7, 2007 Page 6 of 8 Year-round Desalination Alternative replaces additional Tuolumne River diversions with a 25 MGD desalination plant. No transfers from MID/TID would be needed for this alternative, but there would be increased impacts due to construction and operation of the desalination plant and conveyance (energy use, brine disposal). The Regional Desalination for Drought Alternative is the same as Water Supply Variant 3. in normal years, the water supply would be as in proposed WSIP with the desalination facility operated only in dry years (replacing the drought time transfers from MID/TID). The Modified WSIP Alternative was identified as the “environmentally superior alternative.” It includes an additional 5-10 MGD of conservation, recycled water, groundwater by wholesale customers and year-round transfers of 23 MGD of conserved water from MID/TID. This alternative attempts to minimize/avoid reduction of flows on the lower Tuolumne River. It also includes the following operational changes: a) minimum winter flows on Alameda Creek; b) modified operations at Pilarcitos Reservoir; and c) modified water levels in Crystal Springs Reservoir. There is one project that goes through Palo Alto – Project BD-2, crossovers between Bay Division Pipelines 3 and 4. BAWSCA’s activities in have included: • Reviewing the PEIR for overall accuracy in describing retail agency activities; • Recommend agencies review how their own systems and growth plans are described; • Make sure comments do not unintentionally conflict (intentional conflicts may exist); • Want to convey the urgency of the seismic improvements needed for the system – water supply decisions are not urgent; and • Recommend 10% rationing variant – same environmental impact with increased reliability and reduced economic impact The areas of comment being discussed by the Council subcommittee include: • Request re-evaluate value of extending SCVWD West Pipeline to an intertie with Bay Division Pipelines 3&4 as a reliability improvement for both wholesale systems; Utilities Advisory Commission Minutes from: September 5, 2007 Approved on: November 7, 2007 Page 7 of 8 • Provision of information on conservation activities, conserving rate structures, recycled water activities, water waste ordinances; Provision of information on smart growth initiatives; and • Possible comments on: Project BD-2, which is located in Palo Alto; construction mitigations, support for the environmentally superior alternative, and limiting additional diversions from the Tuolumne River. The timeline for the PEIR is for a Council study session on September 17, Council action on the comments on September 24, and submittal of comments before the October 1 deadline. The City of San Francisco is expecting to certify the Final PEIR and publication of response to comments on the Draft PEIR by May 2008. At that time, the SFPUC can act on the WSIP. Motion on Program EIR: Dawes: (1) Moved that the UAC recommend that the Council strongly support completion of the WSIP project to seismically improve the water system; (2) moved that the UAC recommend the Council support the following “BAWSCA Activities”: • Reviewing PEIR for overall accuracy in describing retail agency activities • Recommend agencies review how their own systems and growth plans are described • Make sure comments do not unintentionally conflict (intentional conflicts may exist) • Convey the urgency of the seismic improvements needed for the system – water supply decisions are not urgent and (3) moved that the UAC recommend that the Council include a cost effectiveness measure such as a cost not to exceed more than 10% of the projected water rate of $1600/acre-ft for any conservation measures pursued within TID or MID. Note: Bechtel suggested broader language regarding cost impacts of each of the variants, however, after discussion amongst the Commissioners, agreed that cost impacts would not be available by the October filing date of Palo Alto’s comments. Bechtel asked that staff forward any Council memo on the PEIR to the UAC. Staff agreed to do so. Dawes moved, Bechtel seconded, unanimous vote in favor. ITEM 2: ACTION ITEM: Utilities Advisory Commission Minutes from: September 5, 2007 Approved on: November 7, 2007 Page 8 of 8 Ultra-Clean Local Distributed Generation Incentive Program and Natural Gas Rate for Electric Generation Service: Karl Knapp, Senior Resource Planner, summarized the proposed incentive program implementation plan and modifications to the program guidelines. The program establishes incentives, rates, and rules for ultra- clean customer-sited small-scale distributed generation. Rosenbaum inquired as to the origin of the restriction on water in the approved guidelines, which had arisen through the internal stakeholder process involving city staff from multiple departments and divisions. Dawes inquired as to details regarding the economic analysis applicable to the program. Knapp said he would send the analysis that had been shared with the UAC previously to clarify. Bechtel moved, Rosenbaum seconded, unanimous vote in favor of staff recommendation to recommend approval of the modifications to the program guidelines, adoption of the program implementation plan and handbook, and approval of the new natural gas retail rate “G-COG” applicable to distributed generation. Next meeting is scheduled for November 7. Fong agreed to send out a notice to the Commission regarding cancellation of the October meeting. Action Taken: Meeting adjourned at 9:00 p.m. Respectfully submitted, Melody Vega City of Palo Alto Utilities