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HomeMy WebLinkAbout2010-01-06 Utilities Advisory Commission Summary MinutesFINAL UTILITIES ADVISORY COMMISSION MINUTES OF JANUARY 6, 2010 CALL TO ORDER Chair Melton called to order at 7:08 p.m. the meeting of the Utilities Advisory Commission (UAC). Present: Commissioners Ameri, Berry, Eglash, Foster, Keller, Melton, Waldfogel, and Council Member Yeh Commissioner Ameri arrived following the discussions on Items 2 and 7 at about 9: 17 p.m. ORAL COMMUNICATIONS None. APPROVAL OF THE MINUTES The minutes from the December 2, 2009 UAC meeting were unanimously approved. AGENDA REVIEW Chair Melton moved Item 7 to be the second on the agenda, to allow for comment on both water-related issues by the public. REPORTS FROM COMMISSION MEETINGS/EVENTS No reports were offered. UTILITIES DIRECTOR REPORT Utilities Director Valerie Fong delivered an oral report on the following items: 1. Smart Grid Consultant RFP: Staff has selected a consultant to assist in evaluating and developing a smart grid road map for the City. Staff expects to take the final contract to Council in February and expect the work to commence there-after. 2. Electric Energy Efficiency Potential Study: Staff is in the process of reviewing work done by a consultant to evaluate long-term energy efficiency potential within the City and other municipal utilities in California. Staff expects to present study results and recommended 10-year efficiency goals to the UAC for input/feedback at the February meeting with final 10-year efficiency goals for UAC approval in March. 3. Fall 2009 Renewable Power RFP: Staff short listed five landfill gas proposals and one solar PV proposal totaling about 16% of Palo Alto’s annual energy needs. They were selected based on their economic attractiveness and viability among other factors. Staff seeks to negotiate Power Purchases for about 12% or slightly more of Palo Alto’s energy needs to fulfill the 33% renewable resource target. Staff anticipates Council will make the final decision on executing the Power Purchase Agreements this spring. Utilities Advisory Commission Minutes Approved on: February 3, 2010 Page 1 of 10 4. Economic Stimulus Funding – Energy Efficiency and Conservation Block Grant (EECBG) and Other Stimulus Funding Efforts: Two projects have been approved from the EECBG funds: Home Energy Reports and LED Street Light Installation. Responses to the Request for Proposals for the Home Energy Report have been received and are being evaluated. As a part of the pilot program nine LED and five induction streetlights have been installed near the City Hall and on the residential streets of Colorado Avenue and Amarillo Avenue. The City is continuing with its pilot program for testing the efficiency, efficacy and operations and maintenance issues related with the new lighting technologies. In addition to the LED and induction lights that have been tested so far, the City is in the process of procuring additional ten LED street lighting fixtures from other reputable vendors. 5. Landscape Water Efficiency Ordinance: Tonight you have a look at the first draft of the new Landscape Water Efficiency Ordinance. This ordinance, required by state law, would impose requirements and water budgets on new or renovated residential landscapes, in addition to the current requirements for commercial landscapes. In California, approximately half of all urban water use is applied to landscaping. Recent challenges to the water supply have brought water conservation to the spotlight, and California has responded with actions to ensure an adequate supply for beneficial uses. State law now requires all cities to adopt more stringent water use requirements for residential and commercial landscapes. 6. LED Holiday Light Program: During the month of December, almost 700 boxes of LED holiday lights were given out in exchange for older lights. The giveaway will be continued until all 1,000 boxes have been given out. This will be mentioned in the January utility bills. The LED lights use 10 to 20 times less energy than older lights (4.5 watts per strand versus 50 to 150 for incandescent lights). If all 1,000 boxes are used in replacement for older incandescent lights, nearly $200,000 in electricity savings will result over 10 years. One thing that the UAC should be aware of is that most insulation on electric wiring, including LED lights, includes lead in the PVC plastic. The LED light boxes post Prop 65 warnings about lead, and some customers have expressed concern. If you've been shopping for holiday lights this season, you may have noticed a warning label on some of them stating that they may contain lead. Wire coating and cords are usually made of PVC plastic that may contain lead. Lead is used in PVC for several reasons. For wires and cords, lead makes the plastic more flexible and reduces the risk of fire. Lead is also used in many PVC products to stabilize the color. Lead in PVC products can disintegrate into lead- laced dust. The labels began appearing on holiday lights, as well as on electronic equipment and cords on other consumer products such as hairdryers, after a number of lawsuits were filed by an environmental advocacy organization in California. The amount of lead in the lights and other consumer products with warning labels may vary considerably. It is not clear if the amount of lead that is released poses a risk to human health. Some tests show that lead could come off on the hands. We recommend the following:  Do not allow children to handle holiday lights or any electric wires.  Adults should wash hands thoroughly after handling the lights.  Do not assume that holiday lights that do not bear the warning label are lead-free. It is possible that the lights are not sold in California. California is the only state that requires the warning label.  Older lights that have not been labeled may also contain lead Utilities Advisory Commission Minutes Approved on: February 3, 2010 Page 2 of 10 7. Hydroelectric conditions: Snowpack and generation forecasts for Calaveras project generation are about average. This contrasts with the Western system having larger reservoirs and porous watersheds and low reservoir storage levels coupled with December 30th snowpack measurements at 85% of average. The Western Central Valley Project will retain water in an attempt to refill, resulting in low generation this year. An El Nino condition exists and it is forecast to produce above average precipitation this year that should improve generation in 2012 if other years have median precipitation. 8. My Utilities Account Launch: The My Utilities Account online bill pay and account maintenance system went online on Monday, January 4. Customers using the system will be able view and pay their bills online, set up automatic repeating payments, and sign up for paperless billing. As the online payment option is adopted by more customers, it is expected to reduce payment processing time by CPAU staff. A marketing plan to increase use of the site is planned for later this year, after Customer Service staff has gained more experience supporting the system. 9. Legislative Update: The second year of the 2009 - 2010 California Legislative Session convened on January 4, 2010. CMUA’s Capitol Day will be on February 1st. We have asked Chair Melton to attend, and are planning to ask Council Member Yeh to attend pending Council assignments. UNFINISHED BUSINESS None. NEW BUSINESS ITEM 1: PRESENTATION ITEM: Presentation on Council Colleague’s Memo Directing the City Manager to Explore Ways to Reduce Potable Water Use in Palo Alto by 20% by 2020 Debra Van Duynhoven, Assistant to the City Manager for Sustainability, gave a presentation on the City Council’s direction to reduce water use by 20% by 2020 with the objective of receiving feedback from the UAC to use in crafting a report to the Council on how to achieve the goal. In addition to this Council direction, the City must reduce water usage by 20% from a baseline under the requirements of new state law (SB7). The recommended baseline is a ten year period, ending in 2004, and the City is currently below that goal, but water usage is expected to increase so that the City will need to do additional water savings measures to meet the SB7 goal. Public Comment on Item #1: Leon Leong, a Palo Alto resident and realtor, commented that a residential program requiring retrofit with efficient appliances or fixtures on resale (RECO) would not be a good approach to save water, as only two to three percent of properties are resold every year, so it would take 30 to 60 years for water efficient measures to be in place all throughout the City. He also pointed out that in some areas of town and for homes with slab foundations, failing to keep the soil wet through watering lawns could cause the soil to compact at the edges of the foundation. Because of the clay-nature of the soil, repeated saturation of the soil in winter and drying of the soil in the summer will further cause the soil compaction at the edges of foundations causing the foundations to crack, potentially causing significant damage. Peter Drekmeier, Director of the Tuolumne River Trust, presented a suggestion that the City use a more recent baseline to measure reductions in water usage, thus requiring more reduction. He also pointed out that the City may want to look to what other areas of the state, such as Orange County, have done with Utilities Advisory Commission Minutes Approved on: February 3, 2010 Page 3 of 10 respect to using recycled water to recharge groundwater and then using groundwater for irrigation. He suggested that Lake Lagunita at Stanford could be used to store recycled water and/or recharge groundwater. Commissioner Keller indicated that she supported the ideas presented by Van Duynhoven, but didn’t see plans to work more closely with the schools. She noted that now is the ideal time to work with schools as they are entering a heavy construction phase. She said that there are many opportunities now for schools and properties in the Stanford Research Park, including rain harvesting and catchment. She also mentioned that there may be opportunities with companies at Stanford Research Park for such innovative solutions. Chair Melton asked staff to respond to Drekmeier’s suggestion about changing the baseline period for the reduction to a more recent period. Assistant Director Jane Ratchye pointed out that state law gives water agencies four options for the baseline, and staff has recommended this option since it is the easiest to achieve and ensures compliance with state law. The City can set a separate internal goal or establish a different internal baseline to reduce more water use. Commissioner Foster asked if it is possible to have both a goal based on state law and a City-specific goal. Director Valerie Fong responded that that she was not aware that the two goals were not permitted and further that goals can always be reset. Commissioner Keller asked how the 1% savings noted in the informational report on efficiency comported with the statement that the City has already achieved more than 20%. Utility Marketing Services Manager Joyce Kinnear reported that the savings in the report are first year savings for the City’s water efficiency programs in the past year, and that these savings are cumulative throughout the life of the items. It does not include savings that the community may have achieved apart from participating in the City’s programs. Commissioner Keller asked if the City needs to do more than it has been doing to achieve 20% additional savings, and Kinnear responded in the affirmative. Commissioner Waldfogel stated that he is comfortable with the baseline, and that the City should start out with goals that are achievable. He asked for an explanation on why the irrigation accounts for 50% of statewide residential water usage, but that it is 39% for Palo Alto. Senior Resource Planner Nico Procos explained that the statewide average is influenced by usage in the Central Valley where yards tend to be bigger and temperatures hotter, so much more water is used on landscaping. Commissioner Waldfogel asked if we have a comparison of water usage per square foot of landscaping. Procos responded that we do not, but we believe that part of the reason why Palo Alto uses so much water per capita is related to the large lot sizes in Palo Alto. Commissioner Foster then wanted to know if the baseline for the 20% reduction was set to 2009 usage, how much would that impact the City? Ratchye pointed out that 2009 usage is below the recommended baseline, but that usage does change from year to year and 2009 was extremely low due to the drought and all the attention that it has received. If 2009 consumption is established as the internal baseline, then quite a bit of additional water consumption savings would be required in future years to meet this extremely aggressive goal. Van Duynhoven added that more water conservation needs to occur, and that she supports an aggressive goal. Foster asked what the next steps are for this process. Chair Melton deferred that request and said that he believed the Council would want to save additional water. Using the past five years as the baseline would be reasonable and would require additional savings. He added that the City should focus on small changes that everyone could make to reduce water use. Utilities Advisory Commission Minutes Approved on: February 3, 2010 Page 4 of 10 Commissioner Keller thought that perhaps the City should identify what the “ideal” amount of water usage is and make goals to get to that point. City Council Member Yeh said that as a co-developer of the Colleague’s Memo with the 20% reduction, the Council is looking for the UAC to assist in creating criteria to review all water saving ideas. That would include cost, impact on use and other considerations. The analysis could be done by sectors. Yeh recommended that staff needs to qualify the impacts of each potential measure on water use, costs, who pays, and other impacts and considerations. In addition, water use by customer sector should be analyzed to determine the potential for savings. He also wanted more explanation from staff on the four different baseline options. Ratchye pointed out that one option is not yet developed by the Department of Water Resources (DWR), but that of the options currently known, the recommended option is preferable for purposes of compliance with SB7. Commissioner Foster asked what the UAC’s role will be in developing a plan. Van Duynhoven said that she will be going to Council in March with an update on options and ideas. Chair Melton offered the services of the UAC as a sounding board to her on this process. Commissioner Waldfogel requested that Van Duynhoven include the gardening community in her review of the options. Commissioner Keller mentioned that Canopy was interested in a demonstration garden and requested that Acterra be involved in any City options and wanted to know what community meetings were being held to discuss this proposal. Director Fong said that at this stage, staff is developing the Council Memo and that Van Duynhoven is working to include as much community input as possible. Commissioner Berry said that one of the ideas on the list was to raise water rates. He asked how this idea fit in and whether we have any information on how elastic water usage is to price increases. He noted that large water price increases are already expected due to San Francisco’s implementation of its program to repair and upgrade the regional water delivery system. Director Fong said that the UAC will discuss the rate structure and prices later in the spring, but that water demand is not that elastic with respect to water price. ITEM 7: DISCUSSION ITEM: Discussion of an Updated Water Efficient Landscape Ordinance for Recommendation of Council Approval (discussion moved to after Item #1) Utility Marketing Services Manager Joyce Kinnear gave a presentation focusing on the history of the update to the Water Efficient Landscape Ordinance (WELO), including its passage into law by the legislature in 2006 (AB1881), the Department of Water Resource’s (DWR’s) model ordinance, and the integration with the Bay Area Water Supply and Conservation Agency (BAWSCA) on developing a regional template that increases the water savings from DWR’s model ordinance to help to achieve the SFPUC’s water supply limitations. Utility Account Representative Catherine Cox provided details on the tiered application of the WELO and how it would integrate with the City’s other environmental policies, including the Green Building Ordinance. Chair Melton asked for clarification on whether the WELO would kick in without the Green Building Ordinance taking effect. Kinnear clarified that in the current draft, the WELO would only trigger jointly with the current processes in the Green Building Ordinance. Commissioner Eglash pointed out that this ordinance would only make a small reduction in water usage and stated that the proper perspective to have on this is that it will only be a very small piece of how the City will save water since it will take decades to have a large effect. In order to have meaningful water use Utilities Advisory Commission Minutes Approved on: February 3, 2010 Page 5 of 10 reductions in a 10-year period, this will not be a significant part of the solution. Director Fong agreed, but added that the changes would be constant and cumulative on a yearly basis. Eglash stated that it is important to weigh the costs and benefits of each program and suggested that this program would have a small impact, but a significant cost to those impacted. Cox clarified that the way the BAWSCA’s template ordinance set the tiers, more projects would be captured than under the state ordinance, which would improve the City’s ability to reduce water usage. Kinnear added that this program is only one part of the total portfolio of programs and measures to reduce water use. Chair Melton asked what would happen if the City only followed the DWR model ordinance, and not the BAWSCA template. Kinnear said that the Tier One customers would be missed, along with the ability to provide information to customers through the self-certification process. Commissioner Waldfogel wanted to know if a resident was only completing interior work through the Green Building Ordinance, would the WELO be triggered? Kinnear responded that feedback from the UAC on this issue would be appreciated. Waldfogel said that he could envision a scenario where a customer would continue to get small or different permits that did not trigger the WELO to avoid its implementation. He is troubled by this approach and would prefer that the City developed a wider net that captured more customers, not those just doing an upgrade to their buildings. City Planner and Manager of the City’s Green Building Program Kristin Parineh pointed out that the Green Building Ordinance is expected to continue to capture more upgrades each year. The first year number, 86, was low due to the economy and the fact that projects already in place did not fall under the Green Building Ordinance. She pointed out that combining the WELO with the Green Building Ordinance is a relatively low cost strategy for implementation. She also mentioned that residents who fall into the Green Building Ordinance are completing at least $100,000 in upgrades to their property, so they are already expecting to spend a significant amount of money and the requirements under the WELO are very low cost in comparison. Commissioner Waldfogel noted that this could be easy for Planning, but it was very cumbersome for applicants. He read a quote from a landscape designer who worried that the state’s requirements would put a burden on residents. Cox also provided a quote from a landscape designer that stated that some designers are supportive of this legislation and feel that requirements are the only way to get residents to use less water in their landscaping. Commissioner Keller asked whether school construction would trigger the WELO or Green Building Ordinance. Kinnear noted that playing fields have different standards. Parineh added that schools are under the Department of State Architect and must meet state standards for water reduction. Commissioner Eglash requested that when staff returns in February, that more information is brought regarding costs to implement the program for customers and benefits in water reduction. Council Member Yeh also requested that more information be available on budget impacts of this proposal in comparison with other options. Director Fong reminded the Commission that this ordinance is required by state law, so while the staff is involved in other more holistic approaches, this particular option is a requirement from the state. Commissioner Waldfogel requested more information on the flexibility to do some other type of ordinance and require all residents to use less water. Parineh responded that staff can only influence those who come to the City for permits in this area and that it would be extremely difficult to enforce a program not tied to permits. Utilities Advisory Commission Minutes Approved on: February 3, 2010 Page 6 of 10 Chair Melton called for public comment on this item. Public Comment on Item #7: Fran Adams, a member of the public and a landscape architect, stated that state law (AB 1881) says that any permit for landscaping should trigger the requirements. Astrid Gaiser, a member of the public, stated that she supported the ordinance and that as many people as possible should be impacted by it as required in the state’s model ordinance. Chair Melton added that he has a gut feeling that requiring the landscape changes without some landscape work in the permit would be a problem. Commissioner Eglash shared the Chair’s concern, adding that it just doesn’t make sense to require ripping out landscaping if an applicant was only remodeling a bathroom. Kinnear pointed out that asking all customers to reduce usage, even those who have already implemented many efficiency measures, also has equity issues. Cox said that it is the City’s intent to have as fair a process as possible and that the state model ordinance says that local agencies have discretion about what permit is required. Commissioner Keller said that she thought the goal is to reduce water usage, but hoped for some wriggle room in implementation and asked if the water reductions from the ordinance have to be from landscaping, or whether they could be from other water using fixtures such as toilets or washing machines. Commissioner Waldfogel stated that the state’s model ordinance is applicable to landscape projects and reconfirmed that he did not support a WELO that was triggered solely by interior construction projects. ITEM 2: ACTION ITEM: The “New Two-Thirds Requirement for Local Public Electricity Providers” Ballot Initiative Commissioner Ameri joined the meeting and announced that he was absent during the discussions for Items 1 and 7 as he recused himself from discussions of those water related issues since he works for a water agency in the East Bay that receives water from the same supplier as Palo Alto. He explained that there was no financial conflict of interest, but since there could be a perception of a conflict, he has chosen to not participate in the discussion. Senior Resource Planner Debra Lloyd made a presentation on a proposed ballot initiative sponsored by PG&E and staff’s recommendation that the UAC recommend that the Palo Alto City Council take an oppose position on the initiative. She described the initiative’s proposed changes to current law that would require a two-thirds voter approval before any expansion of municipal electric service could occur to new annexations. She also described permissible actions and restrictions on Public Agencies in responding to voter initiatives. Commissioner Foster indicated his support for staff’s recommendation. Commissioner Keller also indicated her support and asked how the UAC could educate residents. Lloyd stated that we are permitted to post educational materials (such as Attachment C to the items’ report) on the City’s web site or send them to customers. Commissioner Eglash asked how this would affect Palo Alto. Lloyd stated that it could be triggered by the City’s investment in an asset outside of the City such as a transmission line or a non-renewable power generation project. Utilities Advisory Commission Minutes Approved on: February 3, 2010 Page 7 of 10 Commissioner Berry noted that the measure was a constitutional amendment and was vague. Even if it didn’t directly affect Palo Alto, it could affect facilities that are jointly owned with the Northern California Power Agency (NCPA) or the Transmission Agency of Northern California (TANC). He indicated that he supports staff’s recommendation. Commissioner Ameri asked if the UAC could contact other agencies. Fong indicated that some agencies have already taken official positions. ACTION: Commissioner Foster made a motion to recommend that the City Council oppose the “New Two- Thirds Requirement for a Local Public Electricity Providers” ballot initiative and that the City Council reach out to other entities as it sees fit. Commissioner Keller seconded the motion. The motion passed unanimously (7-0). ITEM 3: DISCUSSION ITEM: Report on Current Status and Future Alternatives to Consider for the Continuing the Electric Overhead to Undergrounding Conversion Program Electrical Engineering Manager Patrick Valath made a presentation on the City’s overhead line to underground conversion program. He briefly reviewed the history and background, the advantages and disadvantages of the undergrounding, how it is budgeted, and the recent impact to the program due to the change in AT&T’s participation level. A summary of Policy Options on the undergrounding program was presented for consideration and feedback from the UAC for developing a process to review and formulate a new undergrounding policy recommendation. Chair Melton, referring to the policy options presented on the undergrounding program, noted that in addition to the fourth policy option of using bond finance for undergrounding there is a fifth option which is to discontinue the undergrounding conversion program. Assistant Director of Engineering Tomm Marshall said that we need to focus on how the move the process forward and engage the community in a decision on whether to continue the undergrounding program. Commissioner Eglash said that the aesthetic benefit of underground line is great, but the cost is very high, on the order of $280 million for the entire City. It was expensive with or without the participation of AT&T and Comcast and even if the conversion was done as slowly as it has been done, it would take more than seventy years to complete. He also noted that there is not parity throughout the City and agreed that we need to engage the public, including possibly an election. Commissioner Keller asked if underground system was more expensive for first cost only, or for operation as well. Marshall replied that the underground system is more expensive both to own and to operate. Keller said that we need to ask the community if the $25,000 spent was acceptable to improve aesthetics. There could be other things that would improve aesthetics as well at a lower cost. Commissioner Ameri asked if funding was similar to the Rule 20 that PG&E adopts in funding the undergrounding. Marshall replied that similar guidelines were followed and that the funding was being limited to 2% of the annual electric revenue. Commissioner Foster shared the concerns about cost and would support the option of stopping the program since it’s just too expensive. He asked if the funding currently available for undergrounding were not used, whether rates could be lowered or whether funds would be used for other infrastructure needs. Utilities Advisory Commission Minutes Approved on: February 3, 2010 Page 8 of 10 Marshall replied that any of those options could apply including use of the funds for other programs such as the smart grid. Chair Melton said that, if the UAC recommended and the Council approved, this would be a major change in a 40-year old policy. He agreed with Eglash that this is a big, citywide issue and should be getting community input. He recommended a plan be developed for staff and the UAC to hold workshops or study sessions on the issue at various community centers in the City. Marshall suggested that a recommendation could be made to the Council to form a study group to take a look at this. Commissioner Eglash noted that even if the ultimate goal is to terminate the undergrounding program it would be nice to do that in a way that everyone understands how a final decision is made on this issue. Commissioner Foster asked if the UAC could help with outreach and a recommendation to Council. He asked for Council Member Yeh’s opinion. Council Member Yeh said that the Council expects the UAC to engage the community to develop a recommendation. Yeh asked if staff considered fiber optics in the value of an undergrounding project. Commissioner Keller stated that not all residents feel that being in an underground district is a benefit since homeowners must pay $5,000. Commissioner Foster asked how we plan on going forward with the community outreach program. Fong said that staff would develop a plan to do a customer outreach and preferred a strong presence of UAC members at these workshops. Marshall added that staff could conduct a study session with the UAC prior to conducting community outreach meetings. ITEM 4: ACTION ITEM: Form an Ad Hoc Subcommittee to Write UAC Bylaws Chair Melton requested the tabling of the formation of this subcommittee until the City Attorney’s office releases draft bylaws and until the Council Ad Hoc Subcommittee on the roles and responsibilities of the UAC has developed its recommendations. ITEM 5: ACTION ITEM: Form an Ad Hoc Subcommittee to Review FY 2011 Utilities Operating Budget Chair Melton noted that there was already an Ad Hoc Subcommittee to review the FY 2011 Utilities CIP Budget. He stated that this subcommittee’s scope will be expanded to include review of the FY 2011 Utilities Operating Budget and he appointed Commissioner Berry to join the existing subcommittee members, Commissioners Eglash and Waldfogel. ITEM 6: ACTION ITEM: Form an Ad Hoc Subcommittee on Innovation, Technology and Projects Chair Melton appointed Commissioners Eglash, Foster, and Keller to this new Ad Hoc Subcommittee. ITEM 7: Note that Item 7 was discussed after Item 1. Notes from the discussion are above. ITEM 8: ACTION ITEM: Potential Topic(s) for Discussion at Future UAC Meetings After reviewing the 12-month rolling calendar of upcoming agenda topics, there were no additional topics that commissioners requested to be added to future agendas. Utilities Advisory Commission Minutes Approved on: February 3, 2010 Page 9 of 10 INFORMATIONAL REPORTS The following reports were provided for information only, but were not discussed by the Commission:  Annual Report on Efficiency, Conservation, and Renewable Programs  Report on State Energy Program Initiatives with Other Agencies COMMISSIONER COMMENTS Commissioner Foster indicated that, as a board member of Environmental Entrepreneurs, he will be traveling to Washington DC in February to discuss energy policies. He will be representing himself and not the City, the UAC or the Utilities Department, but asked if there were any ideas that he should consider, to please convey them to him. Meeting adjourned at 10:30 p.m. Respectfully submitted, Marites Ward City of Palo Alto Utilities Utilities Advisory Commission Minutes Approved on: February 3, 2010 Page 10 of 10