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HomeMy WebLinkAboutStaff Report 3706 City of Palo Alto (ID # 3706) Policy and Services Committee Staff Report Report Type: Meeting Date: 4/9/2013 City of Palo Alto Page 1 Council Priority: Environmental Sustainability Summary Title: Innovation and Emerging Technology Demonstration Program Title: Update on Innovation and Emerging Technology Demonstration Program Implementation From: City Manager Lead Department: Utilities Executive Summary The City’s Innovation and Emerging Technology Demonstration Program was approved in January 2012 and launched in June 2012. The program focuses on promoting the testing, evaluation and deployment of new technologies related to the provision of utility service. Since the launch, the program has received eight applications requesting collaborative technology demonstration opportunities. Three applications were accepted and are in various stages of review and implementation, four were declined because the proposals did not meet the program objectives, and one is still under consideration. In addition to the projects received through this program, the City is also proactively working on a number of emerging technology programs for the benefit of utility customers. Staff is continuing to monitor the program to determine whether a broader emerging technologies program could be beneficial in other areas of the City. Background Council approved the Innovation and Emerging Technology Demonstration Program (also known as the Innovation or Test Bed program) in January 2012 (Staff Report 2372). The program objectives, evaluation criteria used to screen application, the role of the City of Palo Alto Utilities (CPAU) in the program and the different phases of the program are outlined below. Program Objective: The objectives of the Emerging Technology Demonstration program are to:  Promote the testing, evaluation and deployment of new technologies or applications of existing technology in innovative applications that could be used in a variety of areas City of Palo Alto Page 2 related to the provision of utility service, and for the benefit of City of Palo Alto Utilities (CPAU) customers; and  Support technologies related to energy and water efficiency and conservation, renewable energy generation, business process improvement, improved customer service, improved utility operations, smart grid related technologies and application. Evaluation Criteria of Program Applicants: Applications to participate in the Program are evaluated based on the following primary and secondary criteria. Primary Evaluation Criteria (required terms and conditions for participation) 1. Innovative nature of the product or application. 2. Applicant’s willingness to offer financial or other benefits to the City/Community. 3. Applicant acceptance of the City’s contractual indemnity and customer privacy protections. 4. Applicability of the technology or process to CPAU and the Community. 5. Beneficial features of the technology and market potential to CPAU and its customers. For example, demonstration of potential for: cost reductions; measurable and local environmental benefits; process improvement; and/or energy or water use benefits. Secondary Evaluation Criteria: 1. Proposed start date, milestones and duration of the demonstration. 2. Reliability and track record of promoters of the technology and partnering arrangement being sought. 3. CPAU staff resource requirement. 4. Amount of funding required from CPAU and funding available by applicant 5. Local economic development opportunities and coordination with local research institutions. Project applications that propose to use CPAU customer data or utility system information must conform to City’s information security and confidentiality requirements. CPAU Role as Project Partner: The Program was designed for CPAU to take on a variety of roles based on applicant needs. While a program budget of $200,000 was approved, it is anticipated that most of the $200,000 funding provided will be used to hire consultants who will evaluate the performance of the technologies after they have been installed and tested for some period of time. CPAU’s role may include any or all of the following activities: 1. Enable access to customers who are willing to participate. 2. Facilitate the program by identifying customers willing to participate in projects; providing appropriate access to the utility system, rights-of-way, and/or data; or by providing marketing and customer support. City of Palo Alto Page 3 3. Allow use of City facilities/processes for a test bed. 4. Utilize funds to seek expert input on technology evaluation and selectively fund equipment. 5. Provide staff or consultant time. 6. Coordinate or participate in the application of research grants, such as the American Public Power Association’s Demonstration of Energy-Efficient Developments Program. 7. At the conclusion of a demonstration project, report on the results to the UAC and Council. Any insight from successful applications will be shared with other City departments. Case studies and reports from the demonstration projects may also be posted on-line. Outline of Program Phases: Applicants may submit applications any time during the year and the staff team reviews all applications received on a quarterly basis. The program’s ongoing phases include:  Phase 1: Quarterly evaluation and selection of submitted applications.  Phase 2: This is a two-step phase: first, CPAU and applicant agree on project scope and roles and responsibilities for implementation; then, the project is implemented as planned with results to be verified by CPAU. The partnership agreement negotiation, implementation and post-demonstration evaluation may take 12 to 24 months.  Phase 3: For any project that successfully demonstrates potential in Palo Alto, the City may decide to roll out a larger scale pilot or even a full-scale customer program. This phase will conform to the regular city procurement process. Discussion After Council approved the program in January 2012, staff developed an application form and a webpage to publicize the program (www.cityofpaloalto.org/UTLinnovation) and received the first set of applications in June 2012. The City also developed the contractual form to document roles and responsibilities of parties under the program. Internal staff resources were re-assigned to help manage the program and support the selected applicants during the implementation phase. Progress to date The eight formal project proposals received by the Program as of January 2013 varied widely. Some were definitive and clearly thought out proposals, while some were conceptual ideas seeking City funds for further development. Some were relatively easy or less cumbersome for CPAU to support, while others required more structured implementation and extensive staff resources. Some applicants, after initial application submission, did not follow through or lost interest. The table below summarizes the eight projects and their status as of end of March 2013. City of Palo Alto Page 4 Date Applied Technology Description Status Progress To date/ Outcome End Date July 2012 Disaggregation of residential electric load to show how much energy is used for each end use (e.g. lighting, refrigeration, heating, pool pump, dishwasher, washing machine, etc.) using advanced meters and proprietary software, with voluntary residential customer participation Implementation in progress Partnership agreement signed. Began recruitment of 30 pilot customers at Stanford West Apartments. Dec 2013 July 2012 Online tool for residential customers to make informed decision to reduce energy use based on customer’s personal objectives Under review Discussion in progress TBD Oct 2012 Utility pole mounted solar PV, with distribution system sensors for smart grid applications Active In the process of selecting test sites TBD Oct 2012 Distributed grid modeling tool for high penetration renewable generation deployment Declined Conceptual proposal, not well defined N/A Oct 2012 Distribution grid optimization with capacitors and sensors Active Applicant to determine equipment that would be made available for trials Fall 2014 Oct 2012 Electric Vehicle charging management system demonstration Declined Conceptual proposal not well defined N/A Oct 2012 Integrated PV and energy storage system Declined Applicant not responsive to clarification sought N/A Jan 2013 Use of ‘big-data’ to assist with targeted marketing opportunities for energy efficiency projects Declined Proposal does not have a clear organizational fit at this time N/A Other Utilities Innovation and Emerging Technology Projects In addition to these formal project submissions to the Utilities Emerging Technology Demonstration Program, the smart grid application pilot projects approved by Council in February and December of 2012 have spurred additional innovative applications and demonstrations in Palo Alto during the past year. These proactive initiatives include: City of Palo Alto Page 5 1. Xatori, a Palo Alto based start-up, is testing software to enable CPAU to get access to Electric Vehicle (EV) charging patterns in the City. The objectives of this effort are to: a. Enable participation of EVs in CPAU’s demand response program; and b. To reliably measure the electricity used by EVs in Palo Alto to be able to formally claim valuable “CO2 emission allowances” under the California Air Resource Board’s (CARB’s) cap-and-trade program. 2. CPAU is collaborating with SAP Labs and PG&E to develop an EV buyer smart phone application that will improve the experience of customers at local EV dealerships. 3. Progress is being made to implement the CustomerConnect pilot program to deploy advance electric, gas and water meters and customer analytical tools at 300 customer homes: a. In January 2013, an initial group of 17 customer volunteers began being billed for electricity under the new Council approved Time-of-Use (TOU) residential electric rates. Additional customers will be enrolled in the summer and towards the year’s end. b. More than 380 applications were received for the 300 program openings. 150 customers will participate in the TOU rate pilot, of which 73 are EV owners who will be able to charge their EVs at the cheaper nighttime rate. c. Installation of the advanced electric meters and gas/water meter radios is expected to be completed in early summer. Customers will be provided web-based tools to monitor and analyze their utility use before the end of summer and staff will determine the experience of the customers throughout the duration of the pilot. 4. Once all 300 advanced electric meters are installed for the CustomerConnect pilot, the voltages at these customer sites could also be monitored to determine the health of the distribution system. The City has supported an intern application for a grant from the American Public Power Association’s Demonstration of Energy and Efficiency Demonstration (DEED) program to analyze ways to more efficiently operate CPAU’s electric distribution system using this data. 5. The City’s support for innovative ideas by opening up the City infrastructure as a ‘test bed’ has been well received by the community and Stanford. An anecdotal example of how such initiatives have assisted with the economic vitality of the community is the story of Autogrid, Inc. The company’s first contract was from the City, to assist the City with the Commercial Customer Electricity Demand Response program in 2011. The company was a Stanford based start-up, but is now located in Palo Alto. At present Autogrid has two dozen employees working from its Palo Alto offices. The City also assisted Autogrid in obtaining a multi-million dollar grant from the federal government. 6. The City supported the applications of two Palo Alto based companies’ applications for a multi-million dollar grant from the prestigious ARPA-e program. One of the applications was accepted and the other was declined. City of Palo Alto Page 6 Next Steps and Plans for the Coming Year The first year of program implementation has progressed largely as planned, with the pace of applicants within manageable numbers. The program has enabled CPAU to streamline the process of reviewing requests for demonstration and research projects which were previously managed in an ad-hoc manner and to evaluate and compare the proposals on a clear and consistent basis. A large increase of applicants would require additional staffing resources to process and implement, but there is no indication that this will happen in the coming year. The experience of this Utilities program has been monitored by other City departments. As the program progresses, staff will determine whether it could be expanded to meet the overall City’s economic and environmental sustainability goals. In the meantime, staff in other departments has been evaluating partnership opportunities with emerging technologies on a case-by-case basis. Resource Impact Since approval of the program in January 2012, it is estimated that approximately 400 hours of staff time was spent on implementing the program over the past 15 months. Of the $200,000 allocated to the program to cover consulting and related expenditure, none has been spent to date. This is expected since the funds were intended to be applied primarily to after-the-fact evaluation of the projects supported. Policy Implications The development of the Utilities Emerging Technology Demonstration Program is a strategic initiative in the Council-approved 2011 Utilities Strategic Plan.