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HomeMy WebLinkAbout2012-07-11 Utilities Advisory Commission Summary MinutesUtilities Advisory Commission Minutes Approved on: September 5, 2012 Page 1 of 6 UTILITIES ADVISORY COMMISSION MEETING FINAL MINUTES OF JULY 11, 2012 CALL TO ORDER Vice Chair Cook called to order at 7:05 p.m. the meeting of the Utilities Advisory Commission (UAC). Present: Commissioners Chang, Cook, Eglash, Hall, Melton, and Waldfogel Absent: Commissioner Foster and Council Member Liaison Greg Scharff ORAL COMMUNICATIONS None. APPROVAL OF THE MINUTES The minutes of the June 6, 2012 UAC meeting were approved as presented. AGENDA REVIEW Vice Chair Cook stated that the new business agenda item would be considered between items 2 and 3. REPORTS FROM COMMISSION MEETING/EVENTS Vice Chair Cook, noting the absence of Chair Foster, read a statement from him. The statement stated his pleasure on serving his first term on the UAC and his last year as the Chair and that he looked forward to serving on the Commission for a second term, having just been reappointed by Council. The statement also noted the accomplishments of the new commissioner, Audrey Chang, and welcomed her to the UAC. UTILITIES DIRECTOR REPORT Director Fong welcomed the new Commissioner Audrey Chang and offered congratulations to Chair Foster and Commissioner Eglash on their reappointments. 1. Demand-Side Management Update: a. Staff continues to hold a variety of educational workshops, including these in June—Portfolio Manager for business energy use benchmarking, the solar water heating program, irrigation systems, PV/solar electric systems and rebates and EcoHome open houses. b. The temporary residential LED rebate program ended July 1, as planned. Staff is now assessing the program and evaluating programs to offer in the future for this technology. c. A very large rebate was approved for HP at the end of June as a part of its work to make its data center as energy efficient as possible. Staff plans an awards ceremony for HP. d. Residents on our email list will be asked in July whether they would like to volunteer to opt-in to a new pilot project to send out information about upcoming workshops and other events through a “robocall.” Utilities Advisory Commission Minutes Approved on: September 5, 2012 Page 2 of 6 e. Satellite communications company Loral Space & Communications Inc. is selling its subsidiary Space Systems Loral to the Canadian company MacDonald, Dettwiler and Associates Ltd. At this point in time, we understand that this company, one of our largest utility customers, is still planning on remaining in Palo Alto. 2. Communications Update: a. A new outlet to communicate with businesses began in July with the launch of the first bill insert for non-residential customers. We will monitor the effectiveness of this method. b. Ongoing PG&E work on gas lines in town continues to be communicated to residents. Regular updates are made on the Utilities website. 3. CLEAN Program: The Palo Alto CLEAN program’s third application period closed on June 30 without receiving any applications. The June application period is now open. Developers are still inquiring into the program, but activity has slowed. Staff has been unable to identify a suitable City- owned host site that does not already have solar installed. 4. Residential and Small Commercial Customer Engagement and Smart Meter Pilot: In accordance with the smart grid work plan, staff is in the process of developing a 200 home residential customer engagement pilot using smart meters and related smart devices. An RFP was issued in May, and responses from vendors are being evaluated. We expect to bring this pilot program to the UAC for its consideration in October. The planned start date of this pilot is March 2013. UNFINISHED BUSINESS None. NEW BUSINESS ITEM 2: ACTION: Designation of UAC Subcommittees Chair Cook stated that there are currently no standing or ad hoc UAC subcommittees and that the Council- approved UAC bylaws allows the Chair to appoint subcommittees as needed. ACTION: None. ITEM 1: ACTION: Election of Officers ACTION: Commissioner Eglash nominated Vice Chair Cook to the Chair for FY 2013. Commissioner Melton seconded the motion. The motion carried unanimously (6-0). Commissioner Eglash nominated Commissioner Foster as the Vice Chair for FY 2013. Commissioner Melton seconded the motion. The motion carried unanimously (6-0). ITEM 3: ACTION: Designate Spokesperson for FY 2013 for Council Meetings Chair Cook stated that the Council-approved UAC bylaws allows the Chair to appoint a spokesperson to represent the actions and recommendations of the UAC for Council and/or Council Committee meetings. Utilities Advisory Commission Minutes Approved on: September 5, 2012 Page 3 of 6 ACTION: Commissioner Melton moved that Chair Cook be the spokesperson. Commissioner Chang seconded the motion. The motion carried unanimously (6-0). ITEM 4: ACTION: UAC Recommendation that Council Approve a Definition of Carbon Neutrality in Anticipation of Achieving a Carbon Neutral Electric Supply Portfolio by 2015 Senior Resource Planner Monica Padilla provided a presentation summarizing the written report, which recommended consideration of a definition of carbon neutrality for the electric supply portfolio. She described the recommendation to use an industry standard protocol and explained the major aspects of the proposed protocol, including what is included, how emissions are counted, what emission factors to use for resource types, banking of renewable energy credits (RECs), treatment of the PaloAltoGreen program, and resources available to achieve carbon neutrality. Padilla requested feedback from the UAC to help in the development of the carbon neutral plan, which will be presented to the UAC in October to meet the deadline for Council consideration of the plan by December 2012. Commissioner Melton commented that the plan to get to carbon neutrality will be essentially the same as PaloAltoGreen, but for the entire portfolio thus eliminating the need for PaloAltoGreen in its current form. Staff agreed with Commissioner Melton’s observation and reminded the UAC, that as directed by Council, staff is in the process of looking at modifications to the PaloAltoGreen program. Public Comment: Bruce Hodge urged the UAC to support staff's recommendation and stated that he was happy to see that the emissions of the internal generation (City-owned back-up generator, or COBUG, unit) is included in the carbon footprint and that staff is proposing to neutralize carbon emissions on an annual basis as opposed to an average over three-years or some other period. Commissioner Hall asked if the definition proposed is as simple as stating that the carbon emissions associated with all generation and delivery to customers will be neutralized, which staff confirmed. Commissioner Chang recommended that the City’s counting and reporting of greenhouse gas emissions be consistent with what the California Air Resources Board (CARB) uses for accounting for emissions reductions in accordance with AB32 goals. She added that staff consider energy efficiency and reductions in load as resources to achieve reductions in greenhouse gas emissions. Assistant Director Jane Ratchye replied that staff is updating the ten-year energy efficiency goals earlier than required so that the updated goals can be incorporated into the carbon neutral plan. She stated that the updated goals are scheduled to be reviewed by the UAC in September and that a report describing the framework for evaluating the potential for energy efficiency was provided to the UAC for its June 2012 meeting. Commissioner Waldfogel asked if there was a different definition that could be used and what the consequences might be for different potential definitions. He asked if the proposed protocol accounts for all emissions associated with landfill-gas-to-energy generation. Staff explained that the definition follows a national standard and the protocol accounts for the emissions associated with burning the landfill gas in the generator and that such emissions will be counted. Commissioner Eglash said that while this discussion is on the definition of carbon neutrality for the electric portfolio, there are other issues that will be discussed later. One of those is the cost of achieving carbon Utilities Advisory Commission Minutes Approved on: September 5, 2012 Page 4 of 6 neutrality and that it is important to understand that carbon neutrality should not be pursued at any cost. He also noted that the City needs to consider the cost impacts on non-residential customers. ACTION: Commissioner Hall moved that the Utilities Advisory Commission (UAC) recommend that the City Council approve the following definition of carbon neutrality as the basis for the City’s pursuit of a carbon neutral electric supply portfolio: Carbon Neutrality: A carbon neutral electric supply portfolio will demonstrate annual net zero greenhouse gas (GHG) emissions, measured at the Citygate, in accordance with The Climate Registry’s Electric Power Sector protocol for GHG emissions measurement and reporting. Commissioner Eglash seconded the motion. The motion carried unanimously (6-0). ITEM 5: ACTION: UAC Recommendation that Council Adopt a Resolution Approving the Pilot Program for Time-of-Use Electric Rates for Residential Customers with Electric Vehicles Senior Resource Planner Shiva Swaminathan provided a presentation summarizing the report. The impetus for the residential Electric Vehicle time-of-use (EV TOU) rate is to encourage EV charging at night when electricity costs are lower. He stated that EVs are expected bring about 0.5% to 2% new electric load to the City 2020. The pilot program will assess customer experience with the rate and evaluate the effectiveness of whether customers actually shift the time of EV charging to nights. The pilot will be phased in to a total of 100 customers by the end of 2014 and includes a control group. The cost of the program is $25,000 plus staff time equal to a total of 0.5 full-time equivalents (FTE). Swaminathan described the proposed rate as maintaining the three tiers of the existing residential electric rate schedule, E-1, with a premium or discount for the peak and off-peak periods, respectively. Overall, an average customer will save $38/year with the proposed rate, which is the amount the utility is expected to save so all the savings are passed on to the customer. Participants in the pilot must have an EV and can not have a solar photovoltaic (PV) system due to extensive billing system issues with the net metering of PV systems. The first phase begins in October 1, 2012 with 20 customers. Swaminathan described the customer communication plan, which includes a new web page with frequently-asked questions, and the timeline to roll out the phases of the pilot program. Commissioner Waldfogel commented that the Council supports EVs and TOU rates as a great way to send a price signal and added that PG&E's TOU rate structure has a much greater price difference between on- and off-peak periods. He does not understand why the program needs to be restricted to EV owners as the TOU rate schedule could encourage other equipment to be moved from on- to off-peak periods. He recommended developing clear definitions for which vehicles qualify for the rate. Commissioner Waldfogel also said that the rate sets a new precedent of using marginal cost instead of average cost as the basis for rates and suggested that care be taken. He also asked if there was any legal issues with the rate proposed and questioned if the rate was discriminatory by only offering to EV owners Senior Deputy City Attorney Amy Bartell answered that at this point, the City is proposing a pilot program and the City has the discretion to test theories about time of use pricing applied to a subset of customers. Municipal utilities have the discretion to make some judgment calls for these types of pilot programs. Commissioner Waldfogel suggested that the City may not want to go too far with a pilot rate program if it was thought to be discriminatory in the long term. Bartell stated that she can’t speak to how the program Utilities Advisory Commission Minutes Approved on: September 5, 2012 Page 5 of 6 might be rolled out in the future to every customer, but there is discretion for municipal electric providers to make calls as to how they want to structure rates as long as there is a rational basis for the decisions. Commissioner Eglash stated that this discussion gets to whether theTOU pilot should be limited to non-EV owners. This will address Commissioner Waldfogel’s comment squarely. Commissioner Waldfogel agreed that this was behind his point that the program not be discriminatory and be available to all customers. Director Fong added that the City is designing a pilot program to engage residential customers with commodity usage information available from smart meters. This pilot will be available to non-EV owners. Commissioner Melton asked if we roll out the pilot and find that the on-/off-peak difference is not sufficient, the public may not be happy about the small savings. Director Fong stated that CPAU does recognize that public communication is a significant part of the program. Commissioner Hall asked how the $38 annual savings estimate was calculated. Swaminathan explained that the savings estimate assumed that the incremental load was only added in the off-peak periods. Commissioner Waldfogel discussed with an expert from EPRI that there could be an issue with the life of transformers that are not cooling down at night due to the increased night-time load. Commissioner Eglash asked for an estimate for the number of EVs in Palo Alto by December 2014. Swaminathan stated that there will be an estimated 500 EVs by the end of 2014. Commissioner Eglash asked what the bill impact of adding an EV is since there is an increase in the use of electricity. Swaminathan said that the additional cost will be about $32/month for charging an EV due to the increased use of electricity and that the TOU rate will save $38/year compared to the current rate for the average residential customer. Commissioner Eglash asked if the meters and software used for the pilot are scalable for a larger roll-out. Swaminathan explained that some of the bill presentation will be manually done at the start and the metering is scalable. Commissioner Eglash noted that the rate design to pass on all the savings to the customer makes sense. However, he asked why the pilot would not be available to non EV owners. Commissioner Eglash commented that the proposed pilot size of only 100 customers for two years seems much too conservative. He recommended a shorter and larger pilot. Swaminathan stated that resource constraints are a limiting factor. Director Fong added that the meter group that does installation and maintenance is quite constrained and the pilot will be used for training. She added that a larger pilot program will require a greater level of automation that is not possible with current staff and budget. Commissioner Eglash stated that he hoped that the pilot would be about ten times as large and recommended that more meters should be installed. He stated that every EV owner should want to get on the rate and many other customers will have an interest in modifying the use of certain equipment such as pool pumps, dishwashers and electric dryers. Commissioner Melton said that customer communication will be very important since he expects that the program will be so popular that many who want to get on the rate will not be able to. The issue will be that customers may feel that they are treated differently from their neighbors. Commissioner Waldfogel asked if a customer's electric use is in the third tier will they save money if they have equipment that uses energy during the day. Abendschein replied that it depends on individual use Utilities Advisory Commission Minutes Approved on: September 5, 2012 Page 6 of 6 patterns. The rates were designed so that customers in any tier could save money, but customers with significant on peak use would not benefit from the proposed rates. Chair Cook agreed that the pilot size seemed too small. Commissioner Waldfogel said he would support a program this size if it were not restricted to EV owners only. Commissioner Eglash clarified that large users that adds EV charging will still be exposed to the third tier and, indeed, have higher usage in the third tier. He asked what alternatives were examined, including the use of a separate meter for EVs. Abendschein said that staff looked at many other utilities rates and best practices. He noted that one of the consequences is that EV owners could be subject to additional costs. Abendschein described one of the features of the proposed premium/discount rate design is that the bill will show the amount under the existing rate and the premium and discount applied due to the TOU periods so that customers can see the impact of the rate structure on their bills. Commissioner Hall noted that the pilot allows customers who are negatively impacted to leave the pilot, which is a protection for customers who find that the rate does not benefit them. Commissioner Eglash asked if the program could be expanded faster than planned. Commissioner Hall asked for clarification on whether the motion prohibited any faster expansion. Director Fong said staff would prepare for expansion of the program while the pilot program was in progress. ACTION: Commissioner Melton made a motion to accept the staff recommendation noting that the City should move ahead despite his preference that the program be larger. The motion died for lack of a motion. Commissioner Waldfogel made a motion to modify the staff recommendation by not restricting the participants to EV owners. Chair Cook seconded the motion. The motion was for the UAC to recommend that Council adopt a resolution approving the residential E1 EV TOU rate that is part of a pilot program for TOU electric rates for residential customers with EVs, but that the program be open to non EV owners. The motion carried (5-1) with Commissioner Eglash voting no. ITEM 6: ACTION: Potential Topic(s) for Discussion at Future UAC ACTION: None. COMMISSIONER COMMENTS None. Meeting adjourned at 9:10 p.m. Respectfully submitted, Marites Ward City of Palo Alto Utilities