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HomeMy WebLinkAboutStaff Report 13879 City of Palo Alto (ID # 13879) Utilities Advisory Commission Staff Report Meeting Date: 4/6/2022 City of Palo Alto Page 1 Title: Discussion of Wastewater CIP and Update on Utilities' Quarterly Programs Report for Q2 of FY2022 From: Director of Utilities Lead Department: Utilities Executive Summary Linked below for the Utilities Advisory Commissions information is an update on water, gas, electric, wastewater collection and fiber utilities, efficiency programs, legislative/regulatory issues, utility-related capital improvement programs, operations reliability impact measures and a utility financial summary. This updated report (Linked Document) has been prepared to keep the Council and Utilities Advisory Commission apprised of the major issues that are facing the water, gas, electric, wastewater collection and fiber utilities. Attachment A is the 2020 Wastewater Asset Management review. A separate quarterly report on the financial position is prepared consistent with when the City closes its books. Items of special interest in this report are summarized below: COVID-19 Impacts: The COVID-19 shelter in place order significantly affected utility loads in FY 2021: • FY 2022 actual sales through December 2021 were about 4.1% lower than projections, and revenues were about 6% below projections. Decreased loads are mostly attributed to the commercial sector. (Section 1.6.1) • Gas utility demand for through December 2021 was 4.7% lower than forecasted in the FY 2022 Financial Plan. But actual sales revenue was 10.5% higher than forecasted. The higher revenue was due to increases in the market price of gas commodity which is passed through to customers. (Section 2.5.1) • Water demand and revenue through the end of December 2021 was 7% lower than forecasted in the FY 2022 financial plan, mostly due to customer water conservation from responding to the drought. Increased water conservation may further impact revenue and reserve levels. (Section 4.5.1) • Wastewater revenues have not been significantly affected by the pandemic. Electric Utility: 3 Packet Pg. 39 City of Palo Alto Page 2 • Output from the City’s hydroelectric resources is low. Total forecasted hydropower for FY 2022 is 283 GWh, which is 195 GWh (41%) below the long-term average. (Section 1.1.2) • REC sales for CY 2022 are expected to result in $0.77M in net revenue. (Section 1.1.3) • A number of construction projects are in the design phase with construction due to begin in 2022. (Section 1.2) • Vacancies remain high for the electric utility, particularly for electric linespeople. Due to a shortage of linespeople across the industry and challenges in hiring journey level linespeople, CPAU is expanding the linespeople apprenticeship program to develop in- house talent. The apprenticeship program takes approximately four years for an employee to become a journey level linesperson. During this period, CPAU will supplement existing crews with contractors for overhead and underground maintenance, emergency response, capital improvement projects, and customer connections. (Section 1.4) • Reliability goals include being in the first quartile of utilities nationally for System Average Interruption Duration Index (SAIDI) and System Average Interruption Frequency Index (SAIFI), which indicate the frequency and total duration of outages experienced by all customers, and in the second quartile for Customer Average Interruption Duration Index (CAIDI), which indicates the average restoration time, the amount of time customers actually affected by an outage in a given year are out of power. When 2021 data is available, the numbers are expected to be close to the goals. (Section 1.5) • Electric sales for the first two quarters of FY22 were about 4% lower than projected, and revenue was about 6% lower. This trend is reflected in the Financial Plans scheduled for Council approval in June, and staff will recommend activating the Hydro Rate Stabilization. (Section 1.6) Gas Utility: • Gas sales were lower than forecasted through December 2021. Cost and revenue were significantly higher due to increasing natural gas market prices. (Section 2.5) • The total gas supply cost passed through to customers, including the commodity charge, transmission charge, and environmental charges (Cap and Trade Program costs and Carbon Neutral Gas Program cost) have increased 15% since July of 2021. This equates to roughly a 12% increase in the system average gas rate. (Section 2.1.1) • A gas main replacement project is currently in progress (GS-13001) and the City is in the midst of a two year inspection project to find “cross bores.” (Section 2.2) Wastewater Utility: • An overview of the status of the Regional Water Quality Control Plant (RWQCP) rehabilitation projects is provided, including an overview of the financing plan for the projects. The first project to begin construction will be the primary sedimentation tank rehabilitation. (Section 3.1) • A sewer system rehabilitation project (SSR 30) was approved by Council on December 31, 2021. Construction is anticipated to start at the end of March 2022. (Section 3.2) • Wastewater Utility revenue for Q1 FY22 was 3.7% lower than budget. (Section 3.4) 3 Packet Pg. 40 City of Palo Alto Page 3 Water Utility: • Atmospheric rivers in October and December generated significant snowpack then January 2022 was the driest January on record at the Hetch Hetchy gauge. Snowpack is near normal (66% of median peak snowpack) while Hetch Hetchy System precipitation was 60% of median annual total). The SFPUC operates its storage to handle a multi-year drought. (Section 4.1) • In August the state curtailed diversions on the Tuolumne River. In response, the SFPUC filed a lawsuit and is applying for a health and safety exemption because per capita use on the system is extremely low. During the October storms, the State Board suspended the curtailments and they remain suspended as of February 3, 2022. • The SFPUC declared a local water shortage emergency on November 23, 2021 calling for voluntary systemwide 10% water use reductions. Each Wholesale Customer has its own requested cutback level and Palo Alto’s voluntary water purchase cutback level is 7.96%. (Section 4.1) • Water sales are 7% lower due to drought-related conservation. Staff projects that with expected revenues and expenses together with transfers from the CIP Reserve, the Operations Reserve will remain at the maximum guideline level at the beginning of FY 2022 and will reach approximately target levels by the end of FY 2022. (Section 4.5) • A rebuild of the City’s Corte Madera Reservoir is in progress to improve seismic safety. Construction is expected to be complete in April 2023. A water main replacement project is currently being designed, and construction is expected to start in June 2022. (Section 4.2) Fiber Utility (Section 5): • Magellan Advisors has completed 60% of the engineering design for the fiber backbone and fiber-to-the-home (FTTH) which includes designs for running overhead and underground lines and route optimization. Staff is identifying potential sites for three fiber huts which will be strategically located (i.e. north, south, west). The City launched the Palo Alto Fiber Community Engagement Hub. The goal of the online platform is to inform the community about the Palo Alto Fiber initiative and increase awareness of the benefits of City-provided internet service. (Section 5.1) • Fiber revenues for FY 2022 are projected to be $3.8 million, which is $0.2 million or 5% below the revenue forecast of $4.0 million. Compared to pre-pandemic revenues, FY 2022 fiber sales are anticipated to be $0.7 million or 15% below FY 2020 fiber sales of $4.5 million. Staff projects annual fiber revenues will return to pre-pandemic level of $4.5 million by FY 2024. (Section 5.4) • Projected ending FY 2022 Fiber Optic Reserve is $34.0 million. (Section 5.4) Customer Programs (Section 6): • The City launched its Business Advantage Program in March 2021 to help local businesses tune their HVAC units for efficiency. Businesses also got an HVAC inspection, a new MERV 13 filter, and advice on tuning the HVAC to increase indoor air flow in line with ASHRAE recommendations for reducing airborne infectious aerosol exposure. As of February 2, 3 Packet Pg. 41 City of Palo Alto Page 4 2022, 57 systems have been installed and 20 additional businesses are pending installation. 10 new contracts were sent to customers and are awaiting signature. (Section 6.1.1) • The City continues to promote its multi-family and workplace EV charger programs. See Section 6.1.2 for more detail. • A pilot project with Mid-Pen Housing, a non-profit housing developer, to convert the gas furnaces at Page Mill Court, a 24-unit apartment complex for low-income adults, to all- electric air source heat pump equipment was successfully completed. The pilot was funded with a grant from the Bay Area Air Quality Management District and the City’s Public Benefit funds (Section 6.1.3). Communications: A digest of major outreach efforts is provided in Section 7, including outreach related to drought, the public safety power shutoff program in the Foothills, and utility scams. Legislative and Regulatory: Major legislative and regulatory items are summarized in Section 8. Attachments: • Attachment A: Wastewater Utility Asset Management Overview CY20 • Attachment B: Presentation 3 Packet Pg. 42 Page 1 of 5 Wastewater Utility Asset Management Overview - 2020 Executive Summary •The City continues to keep up with routine maintenance •Sewer main replacement projects continue as planned •Noticeable annual decline of sanitary sewer overflows •Emergency Response Team continually responds to calls from Dispatch Center •Reduced number of calls received from Dispatch Center due to routine maintenance and main replacement program •Sedaru maintenance software went live in November 2020 Infrastructure Overview Key infrastructure replacement efforts in the next five years include: ●Scheduled biennial sewer main, lateral and manhole replacement projects ●Routine maintenance program for main, laterals, siphons and lift station ●Routine maintenance of SCADA sewer overflow monitoring devices in manhole System Operations and Maintenance Total FTE’s working on Wastewater O&M. Main Maintenance [1.2]18% Construction[1.9]28%Emergency Standby[1.5]22% Main/Lateral Inspection[0.5]8% Lateral Maintenance[1.6] 24% Wastewater Operations and Maintenance (Full-Time Equivelent [FTE] and % of total) Main Maintenance ConstructionEmergency Standby Main/Lateral InspectionLateral Maintenance Asset Management Goals What are our goals? -Properly manage, operate, and maintain the wastewater collection system to deliver reliable service to our community -Repair, rehabilitate, replace, and upgrade system components as needed - Minimize inflow and infiltration (I/I) to provide sufficient system capacity -Maintain a timely response to sanitary sewer overflows (SSO) to reduce overflow impact to public health & the environment -Identify system blockages due to fats, oils and grease (FOG) and develop strategies to decrease backups -Provide regular training for City of Palo Alto Utility staff in wastewater collection system maintenance, operations, and emergency response How do we achieve those goals? -Inspect our collection system routinely to make sure it is flowing properly -Make necessary repairs in a timely manner -Replace assets as they reach end of life or as their condition deteriorates -Identify capacity constraints and risks to our collection system and mitigate these issues promptly through appropriate capital improvement projects -Seek ways to increase our productivity and control costs by completing our work more safely and efficiently -Public outreach with bill inserts or door hangers to inform the residents on FOG prevention along with root/grease treatment with herbicides and grease emulsifying agents Attachment A 3.a Packet Pg. 43 At t a c h m e n t : A t t a c h m e n t A : W a s t e w a t e r U t i l i t y A s s e t M a n a g e m e n t O v e r v i e w C Y 2 0 ( 1 3 8 7 9 : U t i l i t i e s ' Q u a r t e r l y P r o g r a m s R e p o r t F Y 2 2 - Q 2 ) Page 2 of 5 ● Main Maintenance (1.2 FTE): o *Hydro-flushing: high-velocity hydro flushing/vacuum truck o *Root/Grease Treatment: herbicides, along with grease emulsifying agents are used to control root and Fat, Oils and Grease (FOG) issues. ● Lateral Maintenance (1.6 FTE): o *SOAP: Peventive maintenance program includes: Sewer Overflow Alternative Program (SOAP) using an electric power rodder and a hydro jetting tool to clear systemic sewer blockages. ● Main / Lateral Inspections (0.5 FTE): routine field inspections of mains, laterals, siphons, manholes and other sewer components (lift station). Process involves remote Closed-Circuit Television (CCTV) cameras and visual inspections. ● Emergency Response Team (ERT) (1.5 FTE): consist of a standby team of 3 which includes 2 installers and a heavy equipment operator. ERT receives calls from Dispatch Center and responds promptly to investigate and mitigate sewer issues, during business and non-business hours. When the team is not responding to calls during business hours, the team works on Lateral Maintenance. ● Construction (1.9 FTE): consist of repair work for defects that need immediate attention, new service lateral installs, and emergency manhole repairs. *Priority programs critical to daily operation Maintenance Status: ● Essential maintenance programs are carried out continuously. ● Main/Lateral inspection program continues to provide Engineering Dept. with pipe assessment records for CIP replacement project prioritization. ● Aging remote overflow monitoring devices need upgrading to support current technology. 3.a Packet Pg. 44 At t a c h m e n t : A t t a c h m e n t A : W a s t e w a t e r U t i l i t y A s s e t M a n a g e m e n t O v e r v i e w C Y 2 0 ( 1 3 8 7 9 : U t i l i t i e s ' Q u a r t e r l y P r o g r a m s R e p o r t F Y 2 2 - Q 2 ) Page 3 of 5 Wastewater Maintenance and Construction Charts 1. Planned Activities 2. Unplanned Activities 42,62354,76148,415 2,591 85,55150,92942,77884,822106,37175,82287,29859,106 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Main Maintenance Completed, 2020(Linear Feet of Mains per Month) FlushingGoal (33K) 279 307 239 360 215 202 210 260 252 255 229 180 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Lateral Maintenance Completed, 2020(Number of Laterals per Month) Lateral TagsGoal (275) 7 11 4 0 6 9 7 2 5 6 4 2 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Construction Work Orders Completed, 2020 --- - 3.a Packet Pg. 45 At t a c h m e n t : A t t a c h m e n t A : W a s t e w a t e r U t i l i t y A s s e t M a n a g e m e n t O v e r v i e w C Y 2 0 ( 1 3 8 7 9 : U t i l i t i e s ' Q u a r t e r l y P r o g r a m s R e p o r t F Y 2 2 - Q 2 ) Page 4 of 5 Table 1: Status of Collection System Operation and Maintenance Programs System Operation or Maintenance Program Status Green = good Yellow = room for improvement Comments Lateral Maintenance Daily lateral maintenance tags were completed year-long with the help from standby ERT crew members. However, goals were not met in 2020; emergency standby staff was pulled from these tasks due to emergency event calls. Main Maintenance Flushing was performed on a regular schedule throughout the year. Wastewater Operations exceeded its goal for main cleaning schedule in 2020 and completed 741,067 L.F. of flushing. New goals need to be evaluated to help balance the FTE assignments. Main/Lateral Inspections (CCTV) Operations typically work off a scheduled inspection; however, there are times when the crew works on a list of special request inspections that tend to postpone the current month's inspections. Emergency Dispatched calls The City maintains 24-hour system monitoring. Several staff are adequately trained to handle this function in the event of a staffing emergency to ensure redundancy. There are no backlogs of leaks or assets in need of repair. The City maintains an emergency on-call program to respond to and control water leaks or other system emergencies at any hour of the day or night. Construction (Repair main/laterals, new laterals) An Operations crew is assigned the task to perform construction work for new Development Services installations and emergency repair work for our sewer mains and lower laterals, when work needs immediate attention and is not included in our Capital Improvement Program (CIP) projects. In the last 10 years, the sanitary sewer overflows (SSO) have noticeably decreased due to annual maintenance and biennial sewer main, lateral and manhole replacement CIP projects. With collaboration with Wastewater Operations department, Engineering staff uses sewer asset maintenance reports to help prioritize which neighborhoods would benefit from a sewer replacement. 357 328 235 118 133 102 81 121 70 64 67 431010101011172323232211 9200920102011201220132014201520162017201820192020 Sanitary Sewer Overflows (SSO) (By Year)SSO's Median SSO Volume u • • - 3.a Packet Pg. 46 At t a c h m e n t : A t t a c h m e n t A : W a s t e w a t e r U t i l i t y A s s e t M a n a g e m e n t O v e r v i e w C Y 2 0 ( 1 3 8 7 9 : U t i l i t i e s ' Q u a r t e r l y P r o g r a m s R e p o r t F Y 2 2 - Q 2 ) Page 5 of 5 Table 2: Condition of Collection System Assets Asset Class Aggregate Maintenance Asset Condition Manholes Various locations Manholes are inspected during main flushing. Manhole walls and bases are visually inspected for I & I. Feedback is provided to Engineering with recommendations for future replacement. Old brick manholes are typically replaced with more reliable pre-cast concrete structures. Over time brick manholes introduce groundwater via cracks at the base or wall structures. Mains and Lateral services In 2020: ~ 140 miles of mains, ~2,988 laterals Operation forecasts a 36- month schedule for maintenance for the entire city. High frequency lines are cleaned every 3 to 6 months; Easement lines every 36 months; Trunk lines (>15-inches) are cleaned every 60 months; Siphons every 12 months; all other lines every 12 to 36 months. Lift Station / Force main 1 station / ~900 linear feet of 10- inch force main Wastewater Operations perform routine operational checks of the station once a month and the wet well is cleaned quarterly. Preventive maintenance for mechanical and electrical equipment is done annually by WGW Operations. The station has an audible alarm and is connected through a SCADA system to the Utilities Dispatch Center. The station serves approximately 25 homes and a portable generator is available in the event of power outages. Our lift station currently requires only minor and routine maintenance and is in good condition overall. 3.a Packet Pg. 47 At t a c h m e n t : A t t a c h m e n t A : W a s t e w a t e r U t i l i t y A s s e t M a n a g e m e n t O v e r v i e w C Y 2 0 ( 1 3 8 7 9 : U t i l i t i e s ' Q u a r t e r l y P r o g r a m s R e p o r t F Y 2 2 - Q 2 ) Wastewater Collection System April 6, 2022 1 UAC April 06,2022 B A c1Tv OF V PALO ALTO • MEETING □ IZl Received Before Meetin 3.b Packet Pg. 48 At t a c h m e n t : A t t a c h m e n t B : P r e s e n t a t i o n ( 1 3 8 7 9 : U t i l i t i e s ' Q u a r t e r l y P r o g r a m s R e p o r t F Y 2 2 - Q 2 ) 2 Wastewater Infrastructure •216 miles of sewer mains in the collection system •Council adopted a CIP/Infrastructure program in 1990 (CMR:183:0) •36% or 78 miles of sewer mains have been replaced or rehabilitated •138 miles of sewer mains remain to be replaced 2 3.b Packet Pg. 49 At t a c h m e n t : A t t a c h m e n t B : P r e s e n t a t i o n ( 1 3 8 7 9 : U t i l i t i e s ' Q u a r t e r l y P r o g r a m s R e p o r t 3 Sanitary Sewer Project Replacement Rate •Past replacement rate: o ~2.5 miles per year o Annual CIP project between 1990 and 2020 •Current replacement rate: o ~1 mile per year o Biennial CIP project since 2021 3 3.b Packet Pg. 50 At t a c h m e n t : A t t a c h m e n t B : P r e s e n t a t i o n ( 1 3 8 7 9 : U t i l i t i e s ' Q u a r t e r l y P r o g r a m s R e p o r t 4 Pipe Condition Assessment and Defects in Sewer System 4 •Perform CCTV inspection to assess pipe condition for sewer system •Use defect scoring and WW Ops feedback to prioritize replacement projects •Categories of pipe condition defects: o O&M defects o Structural defects •How to address pipe condition defects? o Routine maintenance o Replacement 3.b Packet Pg. 51 At t a c h m e n t : A t t a c h m e n t B : P r e s e n t a t i o n ( 1 3 8 7 9 : U t i l i t i e s ' Q u a r t e r l y P r o g r a m s R e p o r t 5 CCTV video of a deteriorated sewer main 5 3.b Packet Pg. 52 At t a c h m e n t : A t t a c h m e n t B : P r e s e n t a t i o n ( 1 3 8 7 9 : U t i l i t i e s ' Q u a r t e r l y P r o g r a m s R e p o r t 6 CCTV video of a deteriorated sewer main 6 3.b Packet Pg. 53 At t a c h m e n t : A t t a c h m e n t B : P r e s e n t a t i o n ( 1 3 8 7 9 : U t i l i t i e s ' Q u a r t e r l y P r o g r a m s R e p o r t 7 CCTV video of a deteriorated sewer main 7 3.b Packet Pg. 54 At t a c h m e n t : A t t a c h m e n t B : P r e s e n t a t i o n ( 1 3 8 7 9 : U t i l i t i e s ' Q u a r t e r l y P r o g r a m s R e p o r t 8 8 CCTV images of typical O&M defects Root intrusion Grease Cracks 3.b Packet Pg. 55 At t a c h m e n t : A t t a c h m e n t B : P r e s e n t a t i o n ( 1 3 8 7 9 : U t i l i t i e s ' Q u a r t e r l y P r o g r a m s R e p o r t 9 Routine maintenance activities •Hydro-flushing/jetting to remove roots, grease, and debris •Rodding to remove roots in clay pipes •Chemical root foaming in less accessible areas •CCTV inspection of pipe condition •Responds to service calls •Sewer lateral preventive replacement program 9 3.b Packet Pg. 56 At t a c h m e n t : A t t a c h m e n t B : P r e s e n t a t i o n ( 1 3 8 7 9 : U t i l i t i e s ' Q u a r t e r l y P r o g r a m s R e p o r t •Structural defects such as broken pipe or missing section require replacement •Mechanical devices used for routine maintenance could disturb the broken section to make it worse •Potential damage if broken sections collapse: ▪Sewer main blockage/backup ▪Sewage overflows into street and storm drain system ▪Street sink hole 10 Sewer mains with structural defects 10 3.b Packet Pg. 57 At t a c h m e n t : A t t a c h m e n t B : P r e s e n t a t i o n ( 1 3 8 7 9 : U t i l i t i e s ' Q u a r t e r l y P r o g r a m s R e p o r t 11 Effectiveness of CIP and Routine Maintenance •Sanitary sewer overflow (SSO) has declined due to on-going sanitary sewer replacement (SSR) projects and routine maintenance program 11 3.b Packet Pg. 58 At t a c h m e n t : A t t a c h m e n t B : P r e s e n t a t i o n ( 1 3 8 7 9 : U t i l i t i e s ' Q u a r t e r l y P r o g r a m s R e p o r t 12 Remaining sewer mains to be replaced or rehabilitated •138 miles of original pipe remaining •Installed between 1950s and 1970s •It will take 138 years to replace them all at current rate of 1 mile per year •1970 pipes would be 190 years old in 138 years 12 3.b Packet Pg. 59 At t a c h m e n t : A t t a c h m e n t B : P r e s e n t a t i o n ( 1 3 8 7 9 : U t i l i t i e s ' Q u a r t e r l y P r o g r a m s R e p o r t 10 CCTV image of defects in a sewer main installed in 1952 13 3.b Packet Pg. 60 At t a c h m e n t : A t t a c h m e n t B : P r e s e n t a t i o n ( 1 3 8 7 9 : U t i l i t i e s ' Q u a r t e r l y P r o g r a m s R e p o r t 12 Conclusion •138 miles of remaining sewer mains are between 50 to 70 years old, mainly VCP (Vitrified Clay Pipe) •Life expectancy of clay pipe is ~100 years in Palo Alto ▪clay soil expands and contracts -earth movement causes pipe to crack ▪root intrusion at pipe joints, also cause pipe to crack •To meet the 100-year replacement cycle, need to replace 2.5 miles of sewer mains per year 814 3.b Packet Pg. 61 At t a c h m e n t : A t t a c h m e n t B : P r e s e n t a t i o n ( 1 3 8 7 9 : U t i l i t i e s ' Q u a r t e r l y P r o g r a m s R e p o r t