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HomeMy WebLinkAbout2010-11-03 Utilities Advisory Commission Summary MinutesFINAL UTILITIES ADVISORY COMMISSION - MEETING MINUTES OF NOVEMBER 3, 2010 CALL TO ORDER Chair Waldfogel called to order at 7:06 p.m. the meeting of the Utilities Advisory Commission (UAC). Present: Commissioners Berry, Cook, Eglash, Foster, Keller, Melton and Chair Waldfogel and Council Member Yeh ORAL COMMUNICATIONS None. APPROVAL OF THE MINUTES The Minutes from the October 6, 2010, UAC meeting was approved as presented, with the motion moved by Commissioner Melton and seconded by Commissioner Eglash. AGENDA REVIEW No changes to the agenda were requested. REPORTS FROM COMMISSION MEETINGS/EVENTS No Commission Meeting Reports. UTILITIES DIRECTOR REPORT Utilities Director Valerie Fong delivered an oral report on the following items: 1. Wholesale Water Rate Update: The wholesale water RATE is projected to increase beyond what was forecast last year as a result of lower water usage across San Francisco’s regional water system. Preliminary projection is a wholesale rate increase of 28% to 34% as of July 1, 2011, instead of the 10% anticipated last year. Although we don’t expect our BILL from SFPUC to increase above what was projected last year, Palo Alto has also experienced declining water consumption. Staff is revising the water financial projections to incorporate updated sales projections. Early indications point to a retail water rate increase of up to 10%, instead of the 7% projected last year. 2. Interim Water Supply Allocation: The San Francisco Public Utilities Commission (SFPUC) must establish an Interim Supply Allocation (ISA) for each BAWSCA agency by December 31, 2010. On October 1, the SFPUC released a second draft ISA, which incorporates the Individual Supply Guarantee into the calculation of the ISA. On November 9, the SFPUC staff will provide an update on the process to the SFPUC Commission. The Commission is scheduled to adopt the ISA on December 14. 3. Smart Grid Pilot … Distribution Feeder Monitoring Project sponsored by CEC: The City is a demonstration site for a distribution feeder sensing and monitoring pilot project funded by the California Energy Commission. Under this project, Utilities Department will be installing current sensors on a Utilities Advisory Commission Minutes Approved on: December 1, 2010 Page 1 of 6 feeder from Colorado Substation that serves the area in the vicinity of Colorado Avenue-West Bayshore Road-Loma Verde Avenue-Middlefield Road; and along Middlefield Road from Colorado Avenue to Channing Avenue. This feeder was selected because of its combination of overhead and underground construction, length, customer diversity, and recent history of outages. The sensors will provide real time monitoring and recording of electric current at nine (9) selected locations on the feeder. This information will be readily available to Electric System Operators and Engineers. The data will provide insight on feeder load distribution and assist with troubleshooting outages on the feeder and reducing outage durations. The CEC will use this information in studying enabling technology for “smart grid” applications. The equipment for this project was provided at no cost to the City and will be removed and returned in mid-2011 at the conclusion of this study. Staff will use the information gained to help shape future distribution system automation projects now being evaluated as part of the smart grid analysis. 4. Home Energy Reports (OPOWER): Delivery of reports will begin the first week of November. Staff is continuing to work with OPOWER and internal City IT resources to provide some information to net metered, new, and control group customers; however, at this time, those customers are not scheduled to receive the first report. Some portion of the reports or other information avenue for these customers in the 2011 period is still under review and discussion. 5. Election Results Analysis: Proposition 23 failed. Prop 23 would have suspended implementation of air pollution control law (AB 32) requiring major sources of emissions to report and reduce greenhouse gas emissions that cause global warming, until unemployment drops to 5.5 percent or less for full year. Prop 26 (the 2/3 vote to pass local taxes and fees) also passed. 6. Holistic Landscape Management Workshop: On Saturday, October 23, Utilities Marketing Services partnered with the Bay Area Water Supply and Conservation Agency (BAWSCA) to offer a free workshop to the community on Holistic Landscape Management. About 90 class participants, including Palo Alto residents and landscape professionals, attended the workshop to learn the basics of water efficient plant selection, irrigation design, soil health, and integrated pest management. 7. NCPA Annual Strategic Issues workshop: NCPA Strategic Issues meeting and January Commission meeting are currently scheduled for Wednesday, January 26 and Thursday, January 27. Additionally, preceding the Strategic Issues meeting, NCPA will offer its annual tutorial “NCPA 101” on Tuesday afternoon, January 25. The NCPA 101 tutorial outlines NCPA’s history and highlights many of its key functions and current programs. 8. Gas Operations: At staff’s recommendation, the City Manager terminated the professional services contract between the City of Palo Alto and Golden Valley Gas Services, Inc. (GVGS) for gas operations services. GVGS performed daily gas scheduling on behalf of the City, but is not a gas supplier and, therefore, could not provide residual gas supplies needed for daily and monthly balancing. A transaction under a master agreement was entered into with one of the City’s gas suppliers for combined operations services and intra-month gas supply to match the City’s daily load swings. The term of the transaction will be 11 months beginning December 1, 2010, and the new arrangement will save the City at least $57,200 for the 11-month term in addition to administrative time savings. 9. UAC Calendar: Rolling calendar of upcoming items for UAC meetings. Utilities Advisory Commission Minutes Approved on: December 1, 2010 Page 2 of 6 UNFINISHED BUSINESS None. NEW BUSINESS ITEM 1: PRESENTATION: Transmission Interconnection Alternatives Updates Assistant Director Tomm Marshall gave a presentation on the current status of adding an additional transmission interconnection to the City. Marshall stated that the city and PG&E had evaluated a number of proposals and agreed that an 115kV interconnection project between PG&E Ames Substation and the City’s Adobe Creek Substation would be submitted to California Independent System Operator for consideration in the annual planning process. This project would be funded by PG&E and, if approved, would be constructed in 2014. Marshall also discussed the current negotiations with Stanford on a 60kV connection from Palo Alto’s Quarry Substation, a Stanford Substation, and SLAC’s 230kV substation. The City is current coordinating with Stanford on several studies related to loading and system configuration. Commissioner Cook asked why the 60kV interconnection to SLAC was underground and would it save money if it was overhead. Marshall indicated that it would save money if the line was overhead. He also indicated that he did not believe that Stanford would allow an overhead transmission line to cross across their property. Commissioner Melton asked about whether there was interest from Stanford on an interconnection between Palo Alto and Stanford’s Cardinal Cogeneration Plant. Marshall indicated that preliminary discussions had taken place about this interconnection. Director Fong stated that Stanford was planning on decommissioning the plant and that any deal would be a temporary arrangement. Commissioner Berry asked whether PG&E would be paying the entire cost of the Ames to Adobe Creek Substation interconnection. Marshall indicated that PG&E would be paying the majority of the costs, and there may be some cost to the City at the interconnection points. Commissioner Eglash asked if the city was doing a risked based analysis of the system and evaluating the best alternatives based on assessed risk levels. Marshall indicated that staff was evaluating risk and would be using this analysis to determine the best alternatives. He also indicated that staff had completed an analysis at Colorado Substation with help from the Electric Power Research Institute. Commissioner Melton asked if the 115kV interconnection to Ames would support the entire Palo Alto load in an emergency. Marshall indicated that it would be able to support the entire load for the City. Chair Waldfogel asked whether PG&E’s Ravenswood Substation represented a single point of failure for Palo Alto, and Marshall replied that it did not. ITEM 2: ACTION: Proposed Change to Compressed Natural Gas Rate Schedule G-10 and G-3 Effective February 1, 2010 Senior Resource Planner Ipek Connolly was present to take questions from the Commissioners. Commissioner Keller asked for an explanation of the range of $0.10 to $2.00/therm for the commodity charge in Rate Schedule G-10. Connolly explained that the range is given to cover the large range of potential future gas market prices that are passed through to the customer. Utilities Advisory Commission Minutes Approved on: December 1, 2010 Page 3 of 6 Commissioner Melton questioned the need to involve two departments in setting a rate for the public. Director Fong explained that Public Works department is the owner/operator of the Compressed Natural Gas (CNG) facility, and the Utilities Department charge is to ensure that the CNG facility has natural gas and that the Utility Department recovers the costs of the natural gas. Commissioner Cook expressed concern that the requirement for training sessions to be certified to fuel a vehicle was removed from the revised G-10 rate schedule. Connolly explained that it was removed because it does not belong with the rate schedule. ACTION: Commissioner Melton made a motion to recommend Council approval of the changed rate schedules. Commissioner Cook seconded the motion. The motion carried unanimously (7-0). ITEM 3: DISCUSSION: Utilities Strategic Plan Status Update Assistant Director Jane Ratchye provided a brief presentation on the current status of the development of the Utilities Strategic Plan. Ratchye indicated that staff had met several times to discuss the vision and draft the strategic objectives for the plan. The proposed mission statement is: “The City of Palo Alto Utilities provides safe, reliable, and cost-effective services that are in support of the vibrant community of Palo Alto.” The vision discussion was greatly assisted by the interviews staff conducted with Council Members, UAC Commissioners and community leaders. Feedback from the interviews was summarized. The vision that emerged from the interviews was that the City of Palo Alto Utilities (CPAU) should strive to be a high quality provider. Alternatives include the lowest cost provider, or a product leader. The proposed vision statement consisted of three parts, or goals: 1) CPAU will be in the top quartile nationally in providing safe and reliable service; 2) By 2015, CPAU will achieve a customer satisfaction rating of at least 85%; and 3) the average customer bill for CPAU services will be no more than the average of those in surrounding communities. The strategic objectives to support this vision were presented by perspective – financial, learning and growth, internal business process, and customer and community. The draft strategy map with all the strategic objectives was also presented. The strategic initiatives, new programs to achiever the strategic objectives and vision, were also presented. Commissioner Eglash stated that he liked the vision statement since it captures the sense of what CPAU should be doing. He stated that the strategic plan should anticipate future trends, identify how community resources can be utilized, and provide a satisfying work environment to ensure employee retention. Commissioner Melton said he was also pleased with the proposed mission and vision statements. He said that we may want to change “high quality provider” with “high value provider.” Melton also stated that for the average bill comparison, we should use comparable surrounding communities. For example, we should compare to other agencies that get water from SFPUC. Melton said that fiber was not mentioned in the strategic plan, but fiber certainly needs to have a strategic direction. Commissioner Cook said that environmental awareness and energy efficiency should be included in the mission statement. In addition, he asked if emergency preparedness should be in the mission or vision. He agreed that fiber was missing from the strategic plan. Utilities Advisory Commission Minutes Approved on: December 1, 2010 Page 4 of 6 Commissioner Keller commented that the process was good so far and involved good communication. She asked if reducing greenhouse gas (GHG) emissions should be part of the visions statement. For example, do we have a goal of where we want to be in 5 years with respect to GHG emissions? Commissioner Foster stated that the mission and visions should include a reduction in GHG emissions and efficient use of resources. He suggested that the mission statement could be written as CPAU “provides safe, reliable, and cost-effective services in a way to maximize efficient use of resources.” Foster also supported a fourth part of the vision statement to address GHG emission reduction. Commissioner Keller suggested that mission could be rewritten as CPAU “provides safe, reliable, and cost-effective services while also reducing use of non-renewable resources.” Commissioner Melton noted that many of the interviews of the community leaders focused on emergencies. For communications, should focus on outages and out of the ordinary situations. Melton suggested that should be the top focus of communications and that CPAU must get that right first. Commissioner Eglash stated that communications should be broader than outages only. Referring to the vision statement on being in the top quartile for reliability, Chair Waldfogel asked where CPAU is now with respect to reliable service. Director Fong explained that, for electric, we are in the second quartile currently. With respect to customer satisfaction, Ratchye explained that overall satisfaction ratings from residential customers were 83% in 2006, 79% in 2008, and 65% in 2010. Commissioner Berry stated that the vision should be aspirational; however, the proposed vision reads more like performance measures. Commissioner Berry also noted that a vision should be easily communicated and understood in addition to being aspirational. Chair Waldfogel asked why the proposed mission statement removed the “dependable returns to the City” part. He also noted that there are many different stakeholders and each has different interests to bring to bear in the discussion. For example, customers, ratepayers, and taxpayers could all be distinct and how can these viewpoints be reconciled. Council Member Yeh asked how the transfer to the General Fund ties in to the value and how is it integrated into budget development. Yeh also noted that economic development is a City priority and asked how can it get integrated into the strategic plan. Chair Waldfogel asked that another meeting of the UAC’s Ad Hoc Committee on the Strategic Plan be scheduled to discuss completion of the plan. ITEM 4: ACTION: Proposed Long-term Electric Acquisition Plan (LEAP) Implementation Plan Senior Resource Planner Monica Padilla provided a brief presentation on the LEAP, noting that the UAC recommended approval of the LEAP Objectives and Strategies at its September 2010 meeting. She noted that the proposed Implementation Plan consists of 38 steps that were identified to implement the policy objectives in the LEAP Objectives and Strategies. Chair Waldfogel agreed that the UAC’s consideration of the LEAP Implementation Plan was perfunctory as they had already provided the policy direction in the development of the Objectives and Strategies. Utilities Advisory Commission Minutes Approved on: December 1, 2010 Page 5 of 6 Utilities Advisory Commission Minutes Approved on: December 1, 2010 Page 6 of 6 Commissioner Eglash indicated that he supported the plan, but expressed concern about the workload that the 38 implementation items represented. He added that he hoped that the resource requirements to complete the tasks in the plan would not increase costs or the need for additional personnel. Ratchye explained that the tasks differ in level of effort and that some required much less work than others. ACTION: Commissioner Cook made a motion to recommend Council approval of the LEAP Implementation Plan. Commissioner Eglash seconded the motion. The motion carried unanimously (7-0). ITEM 5: ACTION: Process to develop UAC Bylaws including possible formation of Ad Hoc Subcommittee Commissioner Melton described the draft bylaws provided by the City Attorney’s office and the recommendation that the bylaws remain generic, similar to bylaws adopted by the Planning and Transportation Commission. Council Member Yeh reminded the UAC that Council has requested that the bylaws be taken to the Council for approval and they will need to address the process for the UAC to facilitate engagement with the general public, therefore generic bylaws will not be sufficient. Chair Waldfogel suggested that an ad-hoc committee be formed to review the draft bylaws and then propose changes to the full UAC. Commissioner Eglash requested that the full UAC discuss the reason for adopting bylaws; to charge and authorize the UAC to conduct the business it needs to do. He requested that all members of the UAC first review the draft bylaws and return next month for a discussion. Director Fong said that she would send the UAC the draft bylaws and a link to the CMR taken to Council describing the changes to the UAC scope. ACTION: Continued to next meeting. ITEM 7: ACTION: Potential Topics for Discussion at Future UAC Meetings Commissioner Cook suggested having a discussion of emergency preparedness at a future meeting; however, no agreement was reached on adding this as a future item. COMMISSIONER COMMENTS None. Meeting adjourned at 9:02 P.M. Respectfully submitted, Marites Ward City of Palo Alto Utilities