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HomeMy WebLinkAbout2016-10-05 Utilities Advisory Commission Summary MinutesUtilities Advisory Commission Minutes Approved on: November 2, 2016 Page 1 of 6 UTILITIES ADVISORY COMMISSION MEETING FINAL MINUTES OF OCTOBER 5, 2016 CALL TO ORDER Vice Chair Danaher called to order at 7:05 p.m. the meeting of the Utilities Advisory Commission (UAC). Present: Vice Chair Danaher, Commissioners Forssell, Johnston, and Trumbull Absent: Chair Cook, Commissioners Ballantine, Schwartz, and Council Liaison Scharff ORAL COMMUNICATIONS None. APPROVAL OF THE MINUTES Commissioner Forssell moved to approve the minutes from the August 31, 2016 UAC special meeting and Commissioner Johnston seconded the motion. The motion carried unanimously (4- 0) with Vice Chair Danaher, and Commissioners Forssell, Johnston, and Trumbull voting yes and Chair Cook and Commissioners Ballantine and Schwartz absent. AGENDA REVIEW AND REVISIONS None. REPORTS FROM COMMISSION MEETINGS/EVENTS None. UTILITIES DIRECTOR REPORT 1. Bay Area SunShares Solar PV & Zero-Emissions Vehicle Program This is the last month to sign up for the Bay Area SunShares program, which offers discounted rates on solar PV systems and zero-emissions vehicles. By harnessing the bulk buying power of homeowners and vehicle buyers, SunShares aims to make it simpler and cheaper to go solar or purchase a zero-emissions vehicle. Participation is open to residents and employees of companies located in any of the nine Bay Area counties, as well as Yolo and Sacramento counties. The last day to join is November 4. Details and registration are available at cityofpaloalto.org/SunShares or bayareasunshares.org 2. No Better Time to Go Solar! With Council direction to revise the method to calculate the Net Energy Metering (NEM) cap, Palo Alto’s NEM cap increased 13% from 9.5 megawatts (MW) to 10.8 MW. Solar customers can still take advantage of the NEM rate, which offers full retail value for their solar production, before the program closes. The City could reach the new NEM cap within the next six months, after which new solar customers will be placed on the NEM Successor Utilities Advisory Commission Minutes Approved on: November 2, 2016 Page 2 of 6 rate. The expansion of the NEM cap and the availability of the SunShares program make now the best time to go solar! Information on Palo Alto’s solar programs is available at cityofpaloalto.org/solar 3. Georgetown University Energy Prize Competition The City continues its participation in the Georgetown University Energy Prize competition which culminates at the end of December 2016. Utilities is collaborating with the Palo Alto Unified School District to develop programs designed to engage residential customers. At the core of the programs is CPAU’s new Utility Portal, an online tool that enables customers to learn about their energy and water use, efficiency measures and tips to reduce usage. In order to increase Portal engagement, Utilities is developing an Energy Passport initiative for elementary schools, as well as a Portal Sign-Up campaign for middle schools and high schools. PAUSD is also connecting its curriculum with the real-life information on energy and water use. More at www.cityofpaloalto.org/georgetown 4. Events & Workshops – details and registration are at cityofpaloalto.org/workshops  September 17, CPAU hosted a workshop on the Bay Area SunShares program  September 18, CPAU tabled at the Midtown Residents Association Ice Cream Social  September 24, CPAU hosted a Landscape Design and Planting Workshop  October 2, CPAU tabled at the Bike Palo Alto, Bike and Roll event  October 15, CPAU will host a Pruning, Propagation & Dead Heading Workshop 5. Joint UAC/Council Meeting The Joint Study Session between the Council and UAC is currently being re-scheduled for either November 28 or December 5. Please look for an email message asking for your availability on those dates. COMMISSIONER COMMENTS None. UNFINISHED BUSINESS 1. Selection of Potential topics for the Joint Study Session with Council Noting that the date for the joint meeting with the Council has to be rescheduled, Vice Chair Danaher said that he and Chair Cook would meet with the Mayor and Vice Mayor to discuss topics for the meeting. NEW BUSINESS ITEM 1: ACTION: Recommendation that the Utilities Advisory Commission Recommend that Council Adopt a Net Energy Metering (NEM) Transition Policy Assistant Director Jane Ratchye noted that, in accordance with the UAC’s recommendation, Council adopted the proposed Net Energy Metering (NEM) Successor Program on August 22, 2016, but requested that staff return to Council with options for the NEM Transition Policy. She added that Council also directed staff to use an alternate method to calculate the NEM cap. Ratchye indicated that the original staff proposal for the NEM Transition Policy was that customers would remain in NEM for 20 years from the date of interconnection and that customers may expand their systems by up to 10% and still remain in NEM. However, solar Utilities Advisory Commission Minutes Approved on: November 2, 2016 Page 3 of 6 photovoltaic (PV) system expansions larger than 10% would result in the entire system being under the NEM Successor Program. Ratchye indicated that a community group, Carbon Free Palo Alto, developed an alternative for the system expansion aspect of the Transition Policy such that systems could expand and remain under NEM, but that the transition period would be proportionally reduced by the amount of the increase. Ratchye said that the proposal is now staff’s new recommendation. She explained that staff’s original proposal accommodated increased systems that would be prompted by the need to replace a failed panel or two in a system. The revised expansion policy accommodates larger PV system expansions that could be prompted by the desire to increase a system size since the price of PV panels has decreased or because electric use has increased with the addition of an electric vehicle (EV), or after electrification of an appliance. Ratchye indicated that the revised methodology for calculating the NEM cap is 5% of the sum of the customer class non-coincident peak loads, rather than 5% of the overall system load. The revised calculation increases the NEM cap from 9.5 megawatts (MW) to 10.8 MW providing more room under the cap for the Vice Chair Danaher described the NEM program as one that pays the retail rate for all PV generation and noted that the program will transition to the NEM Success Commissioner Johnston clarified that the original proposal allowed an expansion of a system by up to 10% without any change in the transition period, but the new proposal would shorten the transition period even with a system expansion of up to 10%. Ratchye said that this statement was correct. ACTION: Commissioner Forssell made a motion that the UAC recommend that Council adopt the proposed Net Energy Metering Transition Policy. Commissioner Johnston seconded the motion. The motion carried unanimously (4-0, with Vice Chair Danaher and Commissioners Forssell, Johnston, and Trumbull voting yes and Chair Cook and Commissioners Ballantine and Schwartz absent). ITEM 2. ACTION: Staff Recommendation that the Utilities Advisory Commission Recommend that the City Council Approve Design Guidelines for the 2017 Gas Cost of Service Analysis Vice Chair Danaher asked staff to provide some background on why the City completes cost of service analyses (COSAs) prior to developing its rate proposals. Acting Rates Manager Eric Keniston explained that, for gas and electric rates, the City is subject to the requirements of Proposition 26, which requires that all rates be based on the cost of service. A cost of service analysis allocates expenses across ratepayer groups. Vice Chair Danaher noted that the City’s electric supplies are carbon neutral and that the Council will consider a proposal to convert the gas supplies to be carbon neutral. He said that the Council encourages, and the UAC supports, moving towards electrification. Commissioner Forssell asked if the 9% projected rate increase in July 2017 will change as a result of the COSA. Keniston responded that the system wide rate increase will be determined by the City, but that the COSA may reveal the need to make adjustments between costs allocated to different customer groups. Utilities Advisory Commission Minutes Approved on: November 2, 2016 Page 4 of 6 Commissioner Johnston asked if there would be different customer groups identified. Keniston said that this would be looked at and is addressed by proposed Design Guideline 3 (The COSA should involve a review of all existing rate schedules for applicability in the COSA). Senior Deputy Assistant City Attorney Jessica Mullan said that the first guideline is the overall guiding principle and that any policies that may be considered must be compliant with the overarching cost of service guideline and must be in compliance with Proposition 26. ACTION: Commissioner Trumbull made a motion that the UAC recommend that Council approve the proposed Design Guidelines for the 2017 Gas Cost of Service Analysis. Commissioner Forssell seconded the motion. The motion carried unanimously (4-0, with Vice Chair Danaher and Commissioners Forssell, Johnston, and Trumbull voting yes and Chair Cook and Commissioners Ballantine and Schwartz absent). ITEM 3. DISCUSSION: Discussion of Energy Storage and Microgrid Applications in Palo Alto Senior Resource Planner Shiva Swaminathan presented the study results on the application of microgrid and energy storage systems in Palo Alto. He outlined that the study did not find any cost-effective application for such system at present, but anticipated the proliferation of energy storage in the coming years as cost decline and value for such services increase. He also outlined elements of a potential storage pilot project for 125kW/500 kWh at a cost of $250,000. Commissioner Trumbull noted the Commission’s recent discussion of potentially encouraging customers to switch from natural gas to electricity, and asked about reliability if a customer used only electricity. Swaminathan acknowledged that, having two fuel sources coming to your home—electricity and natural gas—will have diversification value in the event of an emergency like an earthquake. However, there may be other customers who want to eliminate the smoke coming out of their smoke stacks at home by burning gas; for them, electrification may be the solution. Swaminathan said that it is a trade-off each person has to make. Vice Chair Danaher asked staff to explain the State’s establishment of storage mandates. Swaminathan explained that the State is interested in storage to manage intermittent renewables like solar and wind. Since storage is a fast-acting resource and can respond to the vagaries of intermittent resources, storage is expected to take on a larger role in the coming years. Commissioner Forssell noted that backup power is one value stream shown in the analysis, but there are other values too such as frequency regulation. Swaminathan concurred. Commissioner Forssell asked which customers value backup generation. Swaminathan indicated that many customers such as hospitals and location with computer servers need higher reliability service. He said that if a customer is totally reliant on electricity and does not use natural gas, they may wish to have energy storage systems to improve reliability. Utilities Advisory Commission Minutes Approved on: November 2, 2016 Page 5 of 6 Vice Chair Danaher noted to the visiting students in the audience that the City has large utility- scale solar resources and other renewable supplies, but that the City relies on others to manage the transmission grid to deliver this power to Palo Alto. Vice Chair Danaher mentioned that the energy price arbitrage is a low value. Swaminathan concurred. Commissioner Forssell asked whether the pilot project proposal was to partner with a customer to install storage at their site and learn from the operations. Swaminathan agreed, but mentioned that the objective is to have more than one customer participate in the pilot. Commissioner Johnston asked if staff had identified any customers to participate in the pilot. Swaminathan said no, but that there have been inquiries. Vice Chair Danaher agreed with the analysis finding that there was low value proposition at this time and asked for the rationale for spending $250,000 for a pilot project. Swaminathan said the objective was to learn about the technology, the permitting rules, how to optimally operate the system, and the impact on such systems on the retail rate-making process. Vice Chair Danaher asked if there was a way to reduce the cost. Swaminathan said that the project could be scaled down, but the minimum size to bid ancillary services into the CAISO is 100 kilowatts (kW), the size of the proposed pilot. Vice Chair Danaher mentioned the value is to determine how to bid these resources into the CAISO system. Vice Chair Danaher asked if we have control of Calaveras hydro project operation. Swaminathan replied in the affirmative. Vice Chair Danaher asked about the objective of a pilot. Swaminathan responded that this technology is coming and the idea is to learn about how we could have a win-win solution in conjunction with our customers; the question of whether we can afford such a pilot is part of this discussion. Swaminathan indicated that staff believes that spending $50k/per year for 5 years in R&D funds may be a good use of funds to better prepare for the future. Vice Chair Danaher asked for an explanation of the value chart. Swaminathan outlined the multiple value chains shown in the “spider-chart” in the report. Commissioner Trumbull again asked what storage techniques could be used to protect customers from electrical outages if the City adopted an electrification strategy. Assistant Director Jane Ratchye mentioned that the current reliability level is very high. She also pointed out that no decision has been made about electrification and we are not walking down the road of wholesale electrification yet. Commissioner Forssell added that the purpose of this discussion today is to meet a legislative requirement under AB 25142 and not the topic of electrification at the Commission’s prior meeting. Vice Chair Danaher asked how Demand Response (DR) differs from storage. Swaminathan mentioned that DR resources tend to be less expensive, but storage is faster acting and more reliable. Utilities Advisory Commission Minutes Approved on: November 2, 2016 Page 6 of 6 Vice Chair Danaher asked if there are other DR programs that would be more productive than storage, such as EV batteries. Swaminathan mentioned that staff is working on a program with EVs and expect to come to the Commission in the spring along with the storage recommendation. Vice Chair Danaher asked if staff could describe the City’s new technology program. Swaminathan explained the elements of the Program for Emerging Technology (PET), which is designed to provide an opportunity to demonstrate new technologies on City facilities or using willing Utilities customers, at no cost to the City. Technologies tested under PET include PV on streetlights with a grid monitoring sensor and motion sensing LED lights installed in City Hall’s parking garage. Commissioner Forssell said she supported the R&D pilot like Commissioner Danaher and that she was looking forward to seeing a fleshed out pilot project proposal from staff. ITEM 4. ACTION: Selection of Potential Topic(s) for discussion at Future UAC Meeting Commissioner Forssell asked that she would like a discussion on the next steps on the Fiber to the Premises (FTTP) project and stated that it could be a discussion at the UAC/Council joint meeting. General Manager Shikada said that this would be a good topic to revisit with the Council at the joint meeting. Vice Chair Danaher noted that the Utilities strategic planning is also a topic that will be coming to the UAC and could be discussed at the joint meeting. ACTION: None. Meeting adjourned at 8:18 p.m. Respectfully submitted, Marites Ward City of Palo Alto Utilities