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HomeMy WebLinkAboutStaff Report 13961 City of Palo Alto (ID # 13961) Utilities Advisory Commission Staff Report Meeting Date: 3/2/2022 City of Palo Alto Page 1 Title: Staff Recommendation That the Utilities Advisory Commission Recommend the City Council Adopt a Resolution Approving the Fiscal Year 2023 Electric Financial Plan and Reserve Transfers, Amending the Electric Utility Reserve Management Practices, and Amending Rate Schedules E-1 (Residential Electric Service), E-2 (Residential Master-Metered and Small Non-Residential Electric Service), E-2-G (Residential Master-Metered and Small Non-Residential Green Power Electric Service), E-4 (Medium Non- Residential Electric Service), E-4-G (Medium Non-Residential Green Power Electric Service), E-4 TOU (Medium Non-Residential Time of Use Electric Service), E 7 (Large Non-Residential Electric Service), E-7-G (Large Non- Residential Green Power Electric Service), E-7 TOU (Large Non-Residential Time of Use Electric Service), E-14 (Street Lights), E-NSE (Net Metering Net Surplus Electricity Compensation), and E-EEC (Export Electricity Compensation) From: Director of Utilities Lead Department: Utilities Recommendation Staff requests that the Utilities Advisory Commission (UAC) recommend that the Council adopt a Resolution (Attachment A): 1. Approving the Fiscal Year (FY) 2023 Electric Financial Plan (Linked Document); 2. Amending the Electric Fund Reserve Management Practices, specifically amending Section 6: Electric Special Projects Reserve, as follows: a. Amend part e) setting the goal to commit ESP funds by the end of FY 2023; and b. Amend part f) setting the date to revert uncommitted funds to the Electric Supply Operations Reserve to five years after the commitment date (FY 2028) 3. Approving the following transfers at the end of FY 2022: a. Up to $15 million from the Hydro Stabilization Reserve to the Supply Operations Reserve; b. Up to $5 million from the Electric Special Projects (ESP) reserve to the Supply Operations Reserve; and c. As discussed in Staff Report #11556i, approve an allocation of Cap and Trade 9 Packet Pg. 189 City of Palo Alto Page 2 funds up to 1/3 of REC revenue to the Cap and Trade Program Reserve to be spent on local decarbonization programs; 4. Approving the following rate actions for FY 2023: a. An increase to retail electric rates E-1 (Residential Electric Service), E-2 (Small Non-Residential Electric Service), E-4 (Medium Non-Residential Electric Service), E-4 TOU (Medium Non-Residential Time of Use Electric Service), E-7 (Large Non- Residential Electric Service), E-7 TOU (Large Non-Residential Time of Use Electric Service) and E-14 (Street Lights) of 5% effective July 1, 2022; b. An update to the Export Electricity Compensation (E-EEC-1) rate to reflect current projections of avoided cost, effective July 1, 2022; c. An update to the Net Surplus Electricity Compensation (E-NSE-1) rate to reflect current projections of avoided cost, effective July 1, 2022; and d. An update to the Palo Alto Green program pass-through premium charge on the Residential Master-Metered and Small Non-Residential Green Power Electric Service (E-2-G), the Medium Non-Residential Green Power Electric Service (E-4- G), and the Large Non-Residential Green Power Electric Service (E-7-G) rate schedules (Attachment B) to reflect current costs, effective July 1, 2022. Executive Summary The FY 2023 Electric Utility Financial Plan (Linked Document) includes projections of the utility’s costs and revenues through FY 2027. Staff projects costs for the Electric Utility to increase steadily through the forecast period. Revenue increases of at least 5% over the forecast horizon, along with a significant use of Hydro Stabilization and Electric Special Project Reserves, are projected to be necessary to keep operating reserves within guideline levels. Short-term impacts to electric costs arising from dry hydro conditions are a main driver of the need for revenue increases, as well as rising operations costs for contract line-crews and capital costs for infrastructure improvement. Transmission costs continue to rise, also contributing to the need for revenue increases. As projected in the FY 2021 Financial Plan, the lack of precipitation and resulting poor reservoir levels have increased purchase costs and necessitate the utilization of funds from the Hydroelectric Rate Stabilization Reserve. An additional loan may be required from the Electric Special Projects reserve to help keep the Operations Reserve above minimum guideline levels. Operations costs are expected to increase by about 2% per year through the forecast period. Projected capital expenses are higher due to the rebuilding of existing underground districts, substation upgrades, the Foothills rebuild, utility pole replacements and line voltage upgrades. The City is also evaluating the cost and scope of other system resiliency projects which may increase costs and rates in the future. Electric loads have been gradually decreasing and are expected to continue to decrease in the long-term, mainly due to declining consumption in the commercial sector, putting gradual upward pressure on rates. Electrification will likely reverse some of this trend, although the 9 Packet Pg. 190 City of Palo Alto Page 3 pace of that impact is uncertain at this time. This decline has been exacerbated by the continuing COVID pandemic. Consumption is currently around 10% below long-term consumption trends. Current models suggest that pandemic economic recovery will take place through 2022 and 2023, with electric consumption stabilizing on the long run average by 2025. Based on the relative health of the various Electric reserve funds, staff is recommending at least a 5% rate increase for FY 2023, however this will likely result in reserves being close to the minimum guideline levels over the next several years. Background Every year staff presents the UAC with Financial Plans for its Electric, Gas, Water, and Wastewater Collection Utilities and recommends any rate adjustments required to maintain their financial health. These Financial Plans include a comprehensive overview of the utility’s operations, both retrospective and prospective, and are intended to be a reference for UAC and Council members as they review the budget and staff’s rate recommendations. Each Financial Plan also contains a set of Reserves Management Practices describing the reserves for each utility and the management practices for those reserves. The UAC reviewed preliminary financial forecasts at its December 1, 2021 meeting. Discussion Staff’s annual assessment of the financial position of the City’s electric utility is completed in compliance with cost of service requirements set forth in the California Constitution and applicable statutory law. The assessment includes making long-term projections of market conditions, of costs associated with the physical condition of infrastructure, and of other factors that could affect utility costs. Rates are then proposed that will move towards adequate cost recovery, based on the models developed in the 2016 Electric Cost of Service and Rates Study1, updated with current and proposed operating costs. Proposed Actions for FY 2022 and FY 2023: The FY 2023 Electric Utility Financial Plan (Linked Document) includes the following proposed actions: 1. Approving the Fiscal Year (FY) 2023 Electric Financial Plan (Linked Document); 2. Amending the Electric Fund Reserve Management Practices, specifically amending Section 6: Electric Special Projects Reserve, as follows: a. Amend part e) setting the goal to commit ESP funds by the end of FY 2023; and b. Amend part f) setting the date to revert uncommitted funds to the Electric Supply Operations Reserve to five years after the commitment date (FY 2028); 3. Approving the following transfers at the end of FY 2022: a. Up to $15 million from the Hydro Stabilization Reserve to the Supply Operations Reserve; 1 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city-manager-reports- cmrs/year-archive/2016/final-staff-report-id-6857_electric-utility-financial-plan-and-rate-changes.pdf 9 Packet Pg. 191 City of Palo Alto Page 4 b. Up to $5 million from the Electric Special Projects (ESP) reserve to the Supply Operations Reserve; and c. As discussed in CMR 11556, approve an allocation of up to $1 million from the Cap and Trade Program Reserve to be spent on local decarbonization programs; 4. Approving the following rate actions for FY 2023: a. An increase to retail electric rates E-1 (Residential Electric Service), E-2 (Small Non-Residential Electric Service), E-4 (Medium Non-Residential Electric Service), E-4 TOU (Medium Non-Residential Time of Use Electric Service), E-7 (Large Non- Residential Electric Service), E-7 TOU (Large Non-Residential Time of Use Electric Service) and E-14 (Street Lights) of 5% effective July 1, 2022; b. An update to the Export Electricity Compensation (E-EEC-1) rate to reflect current projections of avoided cost, effective July 1, 2022; c. An update to the Net Surplus Electricity Compensation (E-NSE-1) rate to reflect current projections of avoided cost, effective July 1, 2022; and d. An update to the Palo Alto Green program pass-through premium charge on the Residential Master-Metered and Small Non-Residential Green Power Electric Service (E-2-G), the Medium Non-Residential Green Power Electric Service (E-4- G), and the Large Non-Residential Green Power Electric Service (E-7-G) rate schedules (Attachment B) to reflect current costs, effective July 1, 2022. The transfer from the Hydro Stabilization Reserve will help mitigate rising purchase costs resulting from poor hydro conditions and keep the Supply Operations reserve above minimum guideline levels. The transfer from the ESP reserve will also help mitigate rising costs resulting from electric purchases, as well as the cost of contract labor required to complete Capital Improvement Projects (CIP) and ongoing operations and maintenance. Staff anticipates repaying the balance of outstanding loans to this reserve starting in FY 2025, or earlier should economic situations permit. The City of Palo Alto (City or Palo Alto) maintains a Cap and Trade Program Reserve within the Electric fund to hold revenues from the sale of carbon allowances freely allocated by the California Air Resources Board to the City’s electric utility. Cap and Trade Program revenues are provided to the electric utility to support a wide variety of carbon reducing activities, including local decarbonization. In accordance with Council’s August 2020 direction, (Staff Report #11556)2 the City has also exchanged certain types of renewable energy to take advantage of market conditions to reduce supply costs, fund electric utility programs and capital investment, and raise funds for local 9 Packet Pg. 192 City of Palo Alto Page 5 decarbonization. The revenues received from these REC exchanges are kept in the Electric Supply Reserve. With this Financial Plan, and as described in Staff Report #11556, staff is allocating Cap and Trade funds equivalent to 1/3 of the FY 2022 REC Exchange program revenues, or up to an estimated $1 million, for future local decarbonization projects. Table 1 below shows the effects of the proposed transfers on reserve funds, as well as changes to the CIP min/max guidelines. The attached Electric Financial Plan (Linked Document) discusses these reserve changes in greater detail: 9 Packet Pg. 193 City of Palo Alto Page 6 Table 1: Reserves Starting and Ending Balances, Revenues, Expenses, Transfers To/(From) Reserves, Operations and Capital (CIP) Reserve Guideline Levels for FY 2022 to FY 2027 ($000) FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 Starting Reserve Balances 1 Supply Operations 19,875 33,046 37,016 27,381 22,795 21,238 2 Distribution Operations 10,028 11,450 10,135 15,105 11,404 14,104 3 CIP 880 880 2,880 2,880 880 880 4 Electric Special Projects 46,665 29,649 14,649 11,649 17,649 23,649 5 Hydro Stabilization 15,400 400 400 400 400 400 6 Low Carbon Fuel Standard 6,944 6,050 5,028 3,956 3,388 2,935 7 Cap and Trade Program 1,189 1,760 6,183 9,148 11,878 14,337 Revenues 8 Supply 113,983 126,638 123,380 122,102 124,682 130,681 9 Distribution 55,845 60,564 68,520 76,267 80,222 80,483 Transfers 10 Supply Operations 19,429 3,577 (2,965) (8,730) (8,459) (8,212) 11 Distribution Operations - (2,000) - 2,000 - - 12 CIP - 2,000 - (2,000) - - 13 Electric Special Projects (5,000) (8,000) - 6,000 6,000 6,000 14 Hydro Stabilization (15,000) - - - - - 15 Low Carbon Fuel Standard - - - - - - 16 Cap and Trade Program 571 4,423 2,965 2,730 2,459 2,212 Capital Program Contribution 17 Distribution Operations - - - - - - 18 CIP Reserve Expenses 19 Supply Expenses (120,242) (126,244) (130,050) (117,958) (117,780) (119,107) 20 Distribution Non-CIP Expenses (35,758) (37,760) (40,956) (56,247) (58,289) (59,013) 21 Planned CIP (18,664) (22,120) (22,594) (25,721) (19,233) (22,620) 22 ESP funded (12,016) (7,000) (3,000) - - - 23 Hydro funded - - - - - - 24 LCFS funded (893) (1,022) (1,072) (568) (453) (453) Ending Reserve Balance 1+8+10+19 Supply Operations 33,046 37,016 27,381 22,795 21,238 24,600 2+9+11+17+20+21 Distribution Operations 11,450 10,135 15,105 11,404 14,104 12,954 3+12+18 CIP 880 2,880 2,880 880 880 880 4+13+22 Electric Special Projects 29,649 14,649 11,649 17,649 23,649 29,649 5+14+23 Hydro Stabilization 400 400 400 400 400 400 6+15+24 Low Carbon Fuel Standard 6,050 5,028 3,956 3,388 2,935 2,482 7+16 Cap and Trade Program 1,760 6,183 9,148 11,878 14,337 16,549 Operations Reserve Guidelines (Supply) 25 Minimum 19,170 18,843 19,470 19,293 19,430 19,651 26 Maximum 38,340 37,686 38,941 38,586 38,860 39,301 Operations Reserve Guidelines (Distribution) 27 Minimum 8,574 9,451 9,337 9,512 9,727 9,910 28 Maximum 14,739 16,444 16,135 16,433 16,811 17,124 CIP Reserve Guidelines 29 Minimum 4,455 4,483 4,508 4,510 3,162 3,718 30 Maximum 22,275 22,417 22,542 22,551 21,942 23,125 While the continuing COVID-19 pandemic and economic hardships created by it continue to put pressure on City of Palo Alto Utility (CPAU) customers, given the rising costs and weakening reserve health of the Electric fund, staff is proposing a 5% rate increase for FY 2023 and anticipating 5% rate increases for the rest of the forecast period. Under this scenario, utility reserves are projected to drop to near their minimum guideline levels. Possible program and 9 Packet Pg. 194 City of Palo Alto Page 7 service cuts may be needed to make up the difference if the utility’s financial position is worse than forecasted. Table 2 below compares current rate projections to those projected in last year’s Financial Plan. Table 1: Projected Electric Rates, FY 2023 to FY 2027 Projection FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 Current 5% 5% 5% 5% 5% Last Year 5% 5% 2% 1% N/A FY 2023 Financial Plan Projected Rate Adjustments for the Next Five Fiscal Years Table 3 shows the projected rate adjustments over the next five years and their impact on annual median residential electric bill (453 kwh per month in winter, 365 kwh per month in summer). Table 3: Projected Rate Adjustments, FY 2022 to FY 2026 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 Electric Utility 5% 5% 5% 5% 5% Estimated Bill Impact ($/mo) * $3.04 $3.19 $3.35 $3.51 $3.69 * Estimated impact on median residential electric bill, which is currently $60.70 for CY 2021 The rate increases are related to several factors: low hydro supply increasing FY 2022 and FY 2023 purchase costs, increasing transmission costs over the longer term, the need for substantial additional capital investment in the electric distribution system, and increasing operations costs due to larger contracting needs to complete electric distribution system maintenance and capital improvement work. Revenues have also declined as customer usage has decreased, requiring larger rate increases to cover fixed expenses and offset the shortfalls. Historically, total electric utility costs (excluding short-term drought impacts) were roughly $120 million per year, allowing the electric utility to go without a rate increase from July 1, 2009 to July 1, 2016. From FY 2016 to FY 2018, annual costs (net of energy supply related revenue, like surplus energy sales) increased to roughly $140 million per year (costs were unusually low in FY 2019 due to some one-time savings from surplus energy sales). Costs are projected to increase to roughly $175 million by FY 2027 (net of surplus energy sales). Figure 1 shows the overall electric utility’s costs (net of surplus sales revenues) in FY 2018, FY 2023, and FY 2027. Costs for the electric supply portfolio decreased slightly between FY 2018 and FY 2023, but much of this is due to surplus electric supply revenues that are not expected to continue while hydro supplies are low. Additionally, customer sales declined by 1.5% to 2% annually over the past several years. Assuming normal hydro conditions going forward, the continuing trend of load loss, and continually increasing transmission charges, total costs are projected to increase by about 2% annually during the forecast period. 9 Packet Pg. 195 City of Palo Alto Page 8 The cost of managing the distribution system (e.g. maintenance, capital investment, customer service, billing, etc.) has increased by about 6% per year and is projected to be about 1 to 2% per year in the next five years once some larger capital projects are completed. FY 2023 capital costs are higher due in part to the Smart Grid Technologies project, but these costs have been approved by Council to come from the ESP Reserve and will not impact rates. FY 2018 capital costs were low relative to FY 2023, but similar to outer years of the financial plan. Overall, costs are projected to increase by about 2% per year over the forecast horizon, but declining loads will necessitate rate increases greater than this to maintain the financial health of the utility. Figure 1: Electric Utility Costs, FY 2018 Actual vs. FY 2023 and FY 2027 Projections Figure 2 shows distribution costs. Capital costs have increased by about 6% per year on average over the last five years but are skewed in this graph due to a large ($7 million) Smart Grid Technology project budgeted for FY 2023 as well as relatively low spending during FY 2018. Larger investments related to underground district rebuilds, substation upgrades, and the rebuilding of the Foothills system are budgeted to occur in the next three years. In the last few years, the City has experienced a higher number of outages in underground districts due to aging equipment and infrastructure. To address this problem, distribution system-related operational spending is projected to increase by about 2% annually. Some of this is due to projected increases in costs of labor and materials. If there are higher than anticipated staff vacancies, more expensive external contracts will be needed to complete necessary electric system maintenance. 9 Packet Pg. 196 City of Palo Alto Page 9 Figure 2: Electric Distribution Costs, FY 2018 vs. FY 2023 and FY 2027 Projections Figure 3 shows commodity costs. While net electric supply portfolio costs stayed relatively stable and even decreased slightly from FY 2018 to FY 2023, this was mainly due to surplus energy revenues and decreasing loads. Transmission costs increased by 8% annually in the same timeframe and are projected to increase by about 9% annually in future years. These increases are due to rehabilitation and replacement of the statewide electric transmission system as well as expansion of that system to accommodate new generation, mostly renewable. Staff works to contain transmission costs through partner agencies, including the Transmission Agency of Northern California (TANC) and Northern California Power Agency (NCPA), and through direct partnerships with other local utilities (the Bay Area Municipal Transmission group, BAMx). These groups intervene in transmission proceedings at the Federal Energy Regulatory Commission (FERC) and the California Independent System Operator (CAISO), and have achieved some reductions in long-term transmission costs. Staff is developing strategies to achieve cost savings in electric supply and will discuss these strategies in greater detail at future meetings. 9 Packet Pg. 197 City of Palo Alto Page 10 Figure 3: Electric Supply Costs, FY 2018 Actual vs. FY 2023 and FY 2027 Projections Staff also recognizes the importance of managing operating costs and maximizing efficiency in order to minimize rate increases. As discussed above, staff is working on cost containment measures related to transmission and renewable energy costs. Utility consumers also see some long-term cost savings from City-wide efforts to manage personnel costs. As reflected in the Utilities Strategic Plan, staff is exploring additional ways to effectively use available resources, particularly across Divisions. Electric Bill Comparison with Surrounding Cities For the median consumption level, the annual CPAU residential electric bill for calendar year 2021 was $728, which was 41% lower than the annual bill for a PG&E customer with the same consumption ($1,237) and approximately 16% higher than the annual bill for a City of Santa Clara customer ($629). The bill calculations for PG&E customers are based on PG&E Climate Zone X, which includes most surrounding comparison communities. Table 4 presents sample median residential bills for Palo Alto, PG&E, and the City of Santa Clara (Silicon Valley Power) for several usage levels. Rates used to calculate the monthly bills shown below were in effect as of January 1, 2022. Over the next several years low usage customers in PG&E territory are expected to continue to see higher percentage rate increases than high usage customers as PG&E compresses its tiers from the highly exaggerated levels that have been in place since the energy crisis. This is likely to make the bill for the median Palo Alto consumer look even more favorable compared to most PG&E customers. Even with the compressed tiers, bills for high usage Palo Alto consumers are likely to remain substantially lower than the bills for high usage PG&E customers. 9 Packet Pg. 198 City of Palo Alto Page 11 Table 4: Residential Monthly Electric Bill Comparison (Effective 1/1/2022, $/mo.) Season Usage (kwh) Palo Alto PG&E Santa Clara Winter 300 41.27 84.72 39.22 453 (Median) 69.22 127.93 59.95 650 107.37 197.16 86.65 1200 213.89 392.28 161.17 Summer 300 41.27 87.11 39.22 (Median) 365 52.18 110.17 48.03 650 107.37 211.27 86.65 1200 213.89 406.39 161.17 Table 5 shows the average monthly electric bill for commercial customers for various usage levels. Table 5: Commercial Monthly Electric Bill Comparison (1/1/2022, $/mo.) Usage (kwh/mo) Palo Alto PG&E Santa Clara 1,000 177 303 196 160,000 24,795 34,211 21,472 500,000 77,477 86,456 66,937 2,000,000 273,431 333,240 267,523 Proposed Rate Changes The City adopted the current rates effective July 1, 2019, when CPAU increased electric rates by 8%. With the onset of the COVID-19 pandemic, usage amongst all customer classes has decreased. Many businesses have been operating at minimum staffing conditions or fully remote. City of Palo Alto staff have reduced expenses where possible, but costs related to ongoing distribution system work have increased, as staffing shortages have required contract crews to complete required maintenance and CIP work. In order to move towards full cost recovery while minimizing rate impacts in light of pandemic- related economic challenges, staff recommends a rate increase to all customer classes of 5%. If, after the pandemic, usage and/or spending looks to be moving in a different direction, staff will suggest a re-balancing of rates at that time. Staff is also engaging the services of consultants to review and revise the Electric Utility’s Cost of Service study and rates. This study will examine how costs are allocated among the residential and commercial classes and realign them if needed, and will develop cost-based rates for several emerging groups, such as: all-electric customers, DC-fast charging facilities, and micro-grid customers. When staff brought the COSA guidelines to the UAC, Finance and Council, there was a directive for staff to propose residential rates to support electrification, prior to a COSA. Staff’s response to that request is provided as Attachment D 9 Packet Pg. 199 City of Palo Alto Page 12 The current rates and proposed rates for FY 2023, and are reflected in Table 6 below: Table 6: Current and Proposed Electric Rates Current Rates Proposed Rates (7/1/2022) Change $ % E-1 (Residential) Tier 1 Energy ($/kWh) 0.13757 0.14445 0.00688 5% Tier 2 Energy ($/kWh) 0.19367 0.20335 0.00968 5% Minimum Bill ($/day) 0.3283 0.3447 0.0164 5% E-2 & E-2-G (Small Non-Residential) Summer Energy ($/kWh) 0.20853 0.21896 0.01043 5% Winter Energy ($/kWh) 0.14624 0.15355 0.00731 5% Minimum Bill ($/day) 0.8359 0.8777 0.0418 5% E-4 & E-4-G (Medium Non-Residential) Summer Energy ($/kWh) 0.12848 0.13490 0.00642 5% Winter Energy ($/kWh) 0.09946 0.10443 0.00497 5% Summer Demand ($/kW) 28.91 30.36 1.45 5% Winter Demand ($/kW) 18.97 19.92 0.95 5% Minimum Bill ($/day) 17.2742 18.1379 0.8637 5% E-7 & E-7-G (Large Non-Residential) Summer Energy ($/kWh) 0.11432 0.12004 0.00572 5% Winter Energy ($/kWh) 0.07738 0.08125 0.00387 5% Summer Demand ($/kW) 30.69 32.22 1.53 5% Winter Demand ($/kW) 17.05 17.90 0.85 5% Minimum Bill ($/day) 49.1139 51.5696 2.4557 5% Table 7 shows the impact of the proposed July 1, 2022 rate changes on the residential and non- residential bills for various consumption levels. Table 7: Impact of Proposed Electric Rate Changes on Customer Bills Rate Schedule Usage (kWh/mo) Bill under Current Rates ($/mo) Bill Under Rates Proposed 7/1/22 ($/mo) Change $/mo % E-1 (Residential) 300 $41.27 $43.34 $2.07 5% (Summer Median) 365 52.18 54.79 2.61 5% (Winter Median) 453 69.22 72.68 3.46 5% 650 107.37 112.74 5.37 5% 1200 213.89 224.58 10.69 5% 9 Packet Pg. 200 City of Palo Alto Page 13 E-2 (Small Non- Residential) 1,000 177 186 9 5% E-4 (Medium Non-Residential) 160,000 24,795 26,035 1,240 5% 500,000 77,477 81,352 3,873 5% E-7 (Large Non- Residential 2,000,000 273,431 287,095 13,664 5% Net Energy Metering Buyback Rates The City operates two Net Energy Metering (NEM) programs. Solar customers served by the CPAU’s original NEM program, also called NEM 1, are compensated at retail rates for electricity they export to the grid, and solar customers served by the NEM successor program, or NEM 2 (effective after the City reached its NEM 1 cap at the end of 2017), are compensated at the Export Electricity Compensation (E-EEC-1) rate for exported electricity. Customers on the NEM 1 program who have chosen to have the value of any annual net generation they produced over the past 12 months credited back to their account do so under the Net Metering Net Surplus Electricity Compensation (E-NSE-1) rate, which is calculated using the utility’s avoided costs from the prior year. The Net Surplus Electricity Compensation rate represents the value of the City’s avoided costs or value of customer-generated electricity in Palo Alto during the prior calendar year, including compensation for the energy, avoided capacity charges, avoided transmission and ancillary service charges, avoided transmission and distribution (T&D) losses, and renewable energy credits (RECs), or environmental attributes. Under the City’s NEM successor program, participating solar customers are billed at the current retail rate for electricity drawn from the grid, and receive a credit for electricity they export to the grid at the Export Electricity Compensation (E-EEC-1) buyback rate. This buyback rate also reflects the avoided cost or value of customer-generated electricity in Palo Alto, calculated on a forward-looking basis for the upcoming fiscal year. As shown in the table below, the current avoided cost for solar generation in Palo Alto is 10.45 cents/kWh, which is slightly lower than the avoided cost on the current NEM buyback rate (10.78 cents/kWh). This slight decrease in the overall avoided cost is driven by a small decrease in the value of the RECs generated by these solar systems. Table 6: NEM Compensation Rates – Current vs. Proposed Rate Current $/kWh Proposed $/kWh Export Electricity (E-EEC-1) $0.1078 $0.1045 Net Surplus Electricity (E-NSE-1) $0.0992 $0.1026 Palo Alto Green (PAGreen) Program 9 Packet Pg. 201 City of Palo Alto Page 14 The PaloAltoGreen (PAG) program provides CPAU’s commercial customers an opportunity to voluntarily pay a premium to receive renewable electricity credits to match their energy usage. Under this program, CPAU staff purchase and retire Green-e certified RECs in the wholesale market on behalf of PAG customers. This enables participating commercial customers to claim credit for the REC purchases in order to satisfy their corporate sustainability goals and meet federal “green certification” requirements. The PAG charge is a pass-through charge; the revenue collected through the PAG rate premium is intended to fully recover the costs of administering the program. The PAG program has very low overhead costs (e.g., the cost of hiring an auditor to carry out an annual Green-e verification process for the program), so the vast majority of the program cost is the purchase cost of the RECs. In the past year the wholesale cost of Green-e certified RECs in the Western US market has continued to increase (from approximately $6/REC to $7.5/REC). As such, the PAG rate premium needs to be raised from $6 per 1,000 kWh block (.6 cents/kWh) to $7.5 per 1,000 kWh block (.75 cents/kWh). This change will be reflected on the Residential Master- Metered and Small Non-Residential Green Power Electric Service (E-2-G), the Medium Non- Residential Green Power Electric Service (E-4-G), and the Large Non-Residential Green Power Electric Service (E-7-G) rate schedules (Attachment B). Reserve Management Practice Changes: Electric Special Projects (ESP) Reserve In November 2011, Council changed the name of the Calaveras Reserve to the Electric Special Project (ESP) Reserve and adopted ESP Reserve Guidelines to ensure the reserve funds were spent to benefit electric ratepayers. The guidelines were established to provide a framework for evaluating projects and set deadlines for committing the funds, to ensure progress was made in expending the funds and returning benefits to the electric ratepayers. Consistent with the guidelines, funds have been used for several initiatives including funding studies and pilot programs in support of bigger initiatives. In addition, Council has approved loans of uncommitted ESP reserve funds to help stabilized Operations Reserves. Per Council approval, $10 million was transferred from the Electric Special Projects (ESP) Reserve to the Operations Reserve in FY 2018 to mitigate higher supply costs due to the drought occurring then, with $5 million having been repaid to date. Staff is requesting an additional $5 million loan to help with the current drought as well as high Operations and CIP expenses. In 2015, Staff recommended to the Utilities Advisory Commission (UAC) and Council two projects to be funded by the ESP: the implementation of smart grid systems, and transmission system upgrades. At the time, given the uncertain timeline and cost of both projects, both the UAC and Council recommended that timelines for evaluation and use of ESP funds be extended. Today, the Smart Grid project is underway with Council-approved ESP funding, anticipated to be $22 million over the next five years. Transmission system upgrades and negotiations have been slower to develop, and in the interim staff is developing a list of other projects which may 9 Packet Pg. 202 City of Palo Alto Page 15 be applicable for ESP funding. Staff will discuss proposals for using ESP funds with the UAC budget sub-committee in early 2022. Given this, staff is requesting that the timelines for evaluation be extended, with a goal to commit funds by the end of FY 2023, and to have any uncommitted funds revert to the Electric Supply Operations Reserve five years after that (FY 2028). If Council does not approve this change, the funds will revert to the Operations Reserve at the end of FY 2022. Timeline The Finance Committee is scheduled to review the FY 2023 Electric Financial Plan (Linked Document) in April 2022. The City Council will consider adopting the Financial Plan and rate amendments as part of the FY 2023 budget review and adoption process. Stakeholder Engagement The UAC reviewed preliminary financial forecasts at its December 1, 2021 meeting, and the Finance Committee reviewed the preliminary forecasts at its February 1, 2022 meeting. Staff and the UAC’s recommendation on the FY 2023 Electric rate increases will go to the Finance Committee in April and be presented to City Council in June during the budget adoption process. Resource Impact The estimated FY 2023 revenue impact would be an increase of $7.9 million in the Electric Fund. The City is a utility customer, so rate increases will also result in estimated City expense increases of about $281,000. Resource impacts to City departments and funds of the recommended rate adjustments carried in the FY 2023 proposed budget will be reflected in the annual budget process. Environmental Review The UAC’s review and recommendation to Council on the FY 2023 Electric Financial Plans and rate adjustments does not meet the California Environmental Quality Act’s definition of a project, pursuant to Public Resources Code Section 21065, thus no environmental review is required. Attachments: • Attachment A: Resolution • Attachment B: Proposed Electric Rate Schedules • Attachment C: Presentation i https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city-manager-reports- cmrs/year-archive/2020-2/id-11566.pdf 9 Packet Pg. 203 Attachment A 6055603 Utility Electric Rate Schedules FY23 Electric Financial Plan *Yet to be Passed* Resolution No. ____ Resolution of the Council of the City of Palo Alto Approving the Fiscal Year 2023 Electric Utility Financial Plan and Reserve Transfers, Amending the Electric Utility Reserves Management Practices and Amending Utility Rate Schedules E-1 (Residential Electric Service), E-2 (Residential Master-Metered and Small Non-Residential Electric Service), E-2-G (Residential Master- Metered and Small Non-Residential Green Power Electric Service), E-4 (Medium Non-Residential Electric Service), E-4-G (Medium Non-Residential Green Power Electric Service), E-4 TOU (Medium Non-Residential Time of Use Electric Service), E 7 (Large Non-Residential Electric Service), E-7-G (Large Non- Residential Green Power Electric Service), E-7 TOU (Large Non-Residential Time of Use Electric Service), E-14 (Street Lights), E-NSE (Net Surplus Electricity Compensation Rate), and E-EEC (Export Electricity Compensation) R E C I T A L S A. Each year the City of Palo Alto (“City”) regularly assesses the financial position of its utilities with the goal of ensuring adequate revenue to fund operations. This includes making long-term projections of market conditions, the physical condition of the system, and other factors that could affect utility costs, and setting rates adequate to recover these costs. It does this with the goal of providing safe, reliable, and sustainable utility services at competitive rates. The City adopts Financial Plans to summarize these projections. B. The City uses reserves to protect against contingencies and to manage other aspects of its operations, and regularly assesses the adequacy of these reserves and the management practices governing their operation. The status of utility reserves and their management practices are included in Reserves Management Practices attached to and made part of the Financial Plans. C. Pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the Council of the City of Palo Alto may by resolution adopt rules and regulations governing utility services, fees and charges. D. On June __, 2022, the City Council heard and approved the proposed rate increase at a noticed public hearing. The Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION 1. The Council hereby approves the FY 2023 Electric Utility Financial Plan. 9.a Packet Pg. 204 At t a c h m e n t : A t t a c h m e n t A : R e s o l u t i o n ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) Attachment A 6055603 Utility Electric Rate Schedules FY23 Electric Financial Plan SECTION 2. The Council hereby approves amendments to Section 6 (Electric Special Projects Reserve) of the Electric Utility Reserves Management Practices to read as attached and incorporated. SECTION 3. The Council hereby approves the following transfers to be made by the end of FY 2022, as described in the FY 2023 Electric Utility Financial Plan: a. Approve a transfer of up to $15 million from the Hydro Stabilization Reserve to the Supply Operations Reserve; b. Approve a transfer of up to $5 million from the Electric Special Projects (ESP) reserve to the Supply Operations Reserve; and c. Approve an allocation of up to $1 million from the Cap and Trade Program Reserve to be allocated to local decarbonization programs); and SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-1 (Residential Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-1, as amended, shall become effective July 1, 2022. SECTION 5. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-2 (Residential Master-Metered and Small Non-Residential Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-2, as amended, shall become effective July 1, 2022. SECTION 6. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-2-G (Residential Master-Metered and Small Non-Residential Green Power Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-2-G, as amended, shall become effective July 1, 2022. SECTION 7. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-4 (Medium Non-Residential Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-4, as amended, shall become effective July 1, 2022. SECTION 8. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-4-G (Medium Non-Residential Green Power Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-4-G, as amended, shall become effective July 1, 2022. SECTION 9. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-4 TOU (Medium Non-Residential Time of Use Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-4 TOU, as amended, shall become effective July 1, 2022. 9.a Packet Pg. 205 At t a c h m e n t : A t t a c h m e n t A : R e s o l u t i o n ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) Attachment A 6055603 Utility Electric Rate Schedules FY23 Electric Financial Plan SECTION 10. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-7 (Large Non-Residential Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-7, as amended, shall become effective July 1, 2022. SECTION 11. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-7-G (Large Non-Residential Green Power Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-7-G, as amended, shall become effective July 1, 2022. SECTION 12. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-7 TOU (Large Non-Residential Time of Use Electric Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-7 TOU, as amended, shall become effective July 1, 2022. SECTION 13. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-14 (Street Lights) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-14, as amended, shall become effective July 1, 2022. SECTION 14. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-NSE (Net Surplus Electricity Compensation Rate) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-NSE-1, as amended, shall become effective July 1, 2022. SECTION 15. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-EEC-1 (Export Electricity Compensation) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-EEC-1, as amended, shall become effective July 1, 2022. SECTION 16. The Council makes the following findings: a. The revenue derived from the adoption of this resolution shall be used only for the purpose set forth in Article VII, Section 2, of the Charter of the City of Palo Alto. b. The fees and charges adopted by this resolution are charges imposed for a specific government service or product provided directly to the payor that are not provided to those not charged, and do not exceed the reasonable costs to the City of providing the service or product. // // // 9.a Packet Pg. 206 At t a c h m e n t : A t t a c h m e n t A : R e s o l u t i o n ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) Attachment A 6055603 Utility Electric Rate Schedules FY23 Electric Financial Plan SECTION 17. The Council finds that approving the Financial Plan and Reserve transfers does not meet the California Environmental Quality Act’s (CEQA) definition of a project under Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5), because it is an administrative governmental activity which will not cause a direct or indirect physical change in the environment, and therefore, no environmental assessment is required. The Council finds that changing electric rates to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ___________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ___________________________ Assistant City Attorney City Manager ___________________________ Director of Utilities ___________________________ Director of Administrative Services 9.a Packet Pg. 207 At t a c h m e n t : A t t a c h m e n t A : R e s o l u t i o n ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) RESIDENTIAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-1 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-1-1 Sheet No E-1-1 dated 7-1-20198 Effective 7-1-20192022 A. APPLICABILITY: This Rate Schedule applies to separately metered single-family residential dwellings receivingElectric Service from the City of Palo Alto Utilities. B.TERRITORY: This rate schedule applies everywhere the City of Palo Alto provides Electric Service. C. UNBUNDLED RATES: Per kilowatt-hour (kWh) Commodity Distribution Public Benefits Total Tier 1 usage $0.0854708 339 $0.0542904971 $0.0046900447 $0.1444513757 Tier 2 usage Any usage over Tier 1 0.11858115 69 0.0800807351 0.0046900447 0.2033519367 Minimum Bill ($/day) 0.34473283 D.SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above andadjusted for any applicable discounts, surcharges and/or taxes. On a Customer’s bill statement, the bill amount may be broken down into appropriate components ascalculated under Section C. 2. Calculation of Usage Tiers Tier 1 Electricity usage shall be calculated and billed based upon a level of 11 kWh per day, prorated by Meter reading days of Service. As an example, for a 30-day bill, the Tier 1 level would be 330 kWh. For further discussion of bill calculation and proration,refer to Rule and Regulation 11.{End} Attachment B O CITYOF PALO ALTO UTILITIES 9.b Packet Pg. 208 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) RESIDENTIAL MASTER-METERED AND SMALL NON-RESIDENTIAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-2 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-2-1 Sheet No E-2-1 dated 7-1-20198 Effective 7-1-202219 A. APPLICABILITY: This Rate Schedule applies to the following Customers receiving Electric Service from the City of Palo Alto Utilities: 1. Small non-residential Customers receiving Non-Demand Metered Electric Service; and 2. Customers with Accounts at Master-Metered multi-family facilities. B. TERRITORY: This rate schedule applies everywhere the City of Palo Alto provides Electric Service. C. UNBUNDLED RATES: Per kilowatt-hour (kWh) Commodity Distribution Public Benefits Total Summer Period $0.1215111855 $0.0927608551 $0.0046900447 $0.2189620853 Winter Period 0.0871508502 0.0617105675 0.0046900447 0.1535514624 Minimum Bill ($/day) 0.87778359 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes. On a Customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. 2. Seasonal Rate Changes The Summer Period is effective May 1 to October 31 and the Winter Period is effective from November 1 to April 30. When the billing period includes use in both the Summer and the Winter Periods, the usage will be prorated based on the number of days in each seasonal period, and the charges based on the applicable rates therein. For further discussion of bill calculation and proration, refer to Rule and Regulation 11. O CITYOF PALO ALTO UTILITIES 9.b Packet Pg. 209 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) RESIDENTIAL MASTER-METERED AND SMALL NON-RESIDENTIAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-2 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-2-2 Sheet No E-2-2 dated 7-1-20198 Effective 7-1-202219 3. Maximum Demand Meter Whenever the monthly use of energy has exceeded 8,000 kWh for three consecutive months, a maximum Demand Meter will be installed as promptly as is practicable and thereafter continued in service until the monthly use of energy has fallen below 6,000 kWh for twelve consecutive months, whereupon, at the option of the City, it may be removed. The maximum Demand in any month will be the maximum average power in kilowatts taken during any 15-minute interval in the month provided that if the Customer’s load is intermittent or subject to fluctuations, the City may use a 5-minute interval. A thermal-type Demand Meter which does not reset after a definite time interval may be used at the City's option. The billing Demand to be used in computing charges under this schedule will be the actual maximum Demand in kilowatts for the current month. An exception is that the billing Demand for Customers with Thermal Energy Storage (TES) will be based upon the actual maximum Demand of such Customers between the hours of noon and 6 pm on weekdays. {End} O CITYOF PALO ALTO UTILITIES 9.b Packet Pg. 210 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) RESIDENTIAL MASTER-METERED AND SMALL NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-2-G CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-2-G-1 Sheet No E-2-G-1 dated 7-1-202119 Effective 7-1-202221 A. APPLICABILITY: This Rate Schedule applies to the following Customers receiving Electric Service from the City of Palo Alto Utilities under the Palo Alto Green Program: 1. Small non-residential Customers receiving Non-Demand Metered Electric Service; and 2. Customers with Accounts at Master-Metered multi-family facilities. B. TERRITORY: This rate schedule applies everywhere the City of Palo Alto provides Electric Service. C. UNBUNDLED RATES: 1. 100% Renewable Option: Per kilowatt-hour (kWh) Commodity Distribution Public Benefits Palo Alto Green Charge Total Summer Period $0.1215111855 $0.0927608551 $0.0046900447 $0.00750060 $0.2264621453 Winter Period 0.087150850 2 0.061710567 5 0.0046900 447 0.0075006 0 $0.161051 5224 Minimum Bill ($/day) 0.87778359 2. 1000 kWh Block Purchase Option: Per kilowatt-hour (kWh) Commodity Distribution Public Benefits Total Summer Period $0.1215111855 $0.0927608551 $0.0046900447 $0.2189620853 Winter Period 0.087150850 2 0.061710567 5 0.0046900 447 0.1535514 624 Minimum Bill ($/day) 0.87778359 Palo Alto Green Charge (per 1000 kWh block) $7.506.00 O CITYOF PALO ALTO UTILITIES 9.b Packet Pg. 211 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) RESIDENTIAL MASTER-METERED AND SMALL NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-2-G CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-2-G-2 Sheet No E-2-G-2 dated 7-1-202119 Effective 7-1-202221 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes. On a Customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. 2. Seasonal Rate Changes The Summer Period is effective May 1 to October 31 and the Winter Period is effective from November 1 to April 30. When the billing period includes use in both the Summer and Winter Periods, usage will be prorated based upon the number of days in each seasonal period, and the charges based on the applicable rates therein. For further discussion of bill calculation and proration, refer to Rule and Regulation 11. 3. Palo Alto Green Program Description and Participation Palo Alto Green provides for either the purchase of enough renewable energy credits (RECs) to match 100% of the energy usage at the facility every month, or for the purchase of 1000 kilowatt-hour (kWh) blocks. These REC purchases support the production of renewable energy, increase the financial value of power from renewable sources, and create a transparent and sustainable market that encourages new development of wind and solar power. Customers choosing to participate shall fill out a Palo Alto Green Power Program application provided by the Customer Service Center. Customers may request at any time, in writing, a change to the number of blocks they wish to purchase under the Palo Alto Green Program. O CITYOF PALO ALTO UTILITIES 9.b Packet Pg. 212 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) RESIDENTIAL MASTER-METERED AND SMALL NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-2-G CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-2-G-3 Sheet No E-2-G-3 dated 7-1-202119 Effective 7-1-202221 4. Maximum Demand Meter Whenever the monthly use of energy has exceeded 8,000 kWh for three consecutive months, a maximum Demand Meter will be installed as promptly as is practicable and thereafter continued in service until the monthly use of energy has fallen below 6,000 kWh for twelve consecutive months, whereupon, at the option of the City, it may be removed. The maximum Demand in any month will be the maximum average power in kilowatts taken during any 15-minute interval in the month, provided that if the Customer-s load is intermittent or subject to fluctuations, the City may use a 5-minute interval. A thermal-type Demand Meter which does not reset after a definite time interval may be used at the City's option. The billing Demand to be used in computing charges under this schedule will be the actual maximum Demand in kilowatts for the current month. An exception is that the billing Demand for Customers with Thermal Energy Storage (TES) will be based upon the actual maximum Demand of such Customers between the hours of noon and 6 pm on weekdays. {End} O CITYOF PALO ALTO UTILITIES 9.b Packet Pg. 213 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) MEDIUM NON-RESIDENTIAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-4 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-4-1 Sheet No E-4-1 dated 7-1-20198 Effective 7-1-202219 A. APPLICABILITY: This Rate Schedule applies to Demand metered Secondary Electric Service for Customers with a maximum Demand below 1,000 kilowatts. This Rate Schedule applies to three-phase Electric Service and may include Service to master-metered multi-family facilities or other facilities requiring Demand-metered Service, as determined by the City. B. TERRITORY: This rate schedule applies anywhere the City of Palo Alto provides Electric Service. C. UNBUNDLED RATES: Rates per kilowatt (kW) and kilowatt-hour (kWh): Commodity Distribution Public Benefits Total Summer Period Demand Charge (per kW) $4.524.41 $25.8424.50 $30.3628.91 Energy Charge (per kWh) 0.1096010536 0.0206101865 0.0046900447 0.1349012848 Winter Period Demand Charge (per kW) $2.822.75 $17.1016.22 $19.9218.97 Energy Charge (per kWh) 0.0791307634 0.0206101865 0.0046900447 0.1044309946 Minimum Bill ($/day) 18.137917.2742 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes. On a customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. 0 CITY OF PALO ALTO UTILITIES 9.b Packet Pg. 214 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) MEDIUM NON-RESIDENTIAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-4 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-4-2 Sheet No E-4-2 dated 7-1-20198 Effective 7-1-202219 2. Seasonal Rate Changes The Summer Period is effective May 1 to October 31 and the Winter Period is effective from November 1 to April 30. When the billing period includes use both in the Summer and the Winter Periods, the usage will be prorated based on the number of days in each seasonal period, and the charges based on the applicable rates therein. For further discussion of bill calculation and proration, refer to Rule and Regulation 11. 3. Maximum Demand Meter Whenever the monthly use of energy has exceeded 8,000 kWh for three consecutive months, a Maximum Demand Meter will be installed as promptly as is practicable and thereafter continued in Service until the monthly use of energy has fallen below 6,000 kWh for twelve consecutive months, whereupon, at the option of the City, it may be removed. The Maximum Demand in any month will be the maximum average power in kilowatts taken during any 15-minute interval in the month, provided that if the Customer’s load is intermittent or subject to fluctuations, the City may use a 5-minute interval. A thermal-type Demand Meter which does not reset after a definite time interval may be used at the City's option. The Billing Demand to be used in computing charges under this schedule will be the actual Maximum Demand in kilowatts for the current month. An exception is that the Billing Demand for Customers with Thermal Energy Storage (TES) will be based upon the actual Maximum Demand of such Customers between the hours of noon and 6 pm on weekdays. 4. Power Factor For new or existing Customers whose Demand is expected to exceed or has exceeded 300 kilowatts for three consecutive months, the City has the option of installing applicable Metering to calculate a Power Factor. The City may remove such Metering from the Service of a Customer whose Demand has been below 200 kilowatts for four consecutive months. 0 CITY OF PALO ALTO UTILITIES 9.b Packet Pg. 215 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) MEDIUM NON-RESIDENTIAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-4 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-4-3 Sheet No E-4-3 dated 7-1-20198 Effective 7-1-202219 When such metering is installed, the monthly Electric bill will include a “Power Factor Adjustment”, if applicable. The adjustment will be applied to a Customer’s bill prior to the computation of any primary voltage discount. The Power Factor Adjustment is applied by increasing the total energy and Demand charges for any month by 0.25 percent (0.25%) for each one percent (1%) that the monthly Power Factor of the Customer’s load was less than 95%. The monthly Power Factor is the average Power Factor based on the ratio of kilowatt hours to kilovolt-ampere hours consumed during the month. Where time-of-day Metering is installed, the monthly Power Factor shall be the Power Factor coincident with the Customer's Maximum Demand. 5. Changing Rate Schedules Customers may request a rate schedule change at any time to any City of Palo Alto full- service rate schedule as is applicable to their kilowatt-Demand and kilowatt-hour usage profile. 6. Primary Voltage Discount Where delivery is made at the same voltage as that of the line from which the Service is supplied, a discount of 2 1/2 percent for available line voltages above 2 kilovolts will be offered, but the City is not required to supply Service at a particular line voltage where it has, or will install, ample facilities for supplying at another voltage equally or better suited to the Customer's electrical requirements, as determined in the City’s sole discretion. The City retains the right to change its line voltage at any time after providing reasonable advance notice to any Customer receiving the discount in this section. The Customer then has the option to change his system so as to receive Service at the new line voltage or to accept Service (without voltage discount) through transformers to be supplied by the City subject to a maximum kilovolt-ampere size limitation. 7. Standby Charge a. Applicability: The standby charge, subject to the exemptions in subsection D(7)(e), applies to Customers that have a non-utility generation source interconnected on the Customer’s side of the City’s revenue meter and that occasionally require backup power from the City due to non-operation of the non-utility generation source. 0 CITY OF PALO ALTO UTILITIES 9.b Packet Pg. 216 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) MEDIUM NON-RESIDENTIAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-4 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-4-4 Sheet No E-4-4 dated 7-1-20198 Effective 7-1-202219 b. Standby Charges: Commodity Distribution Total Standby Charge (per kW of Reserved Capacity) Summer Period $0.69 $15.23 $15.92 Winter Period $0.63 $9.04 $9.67 c. Meters. A separate Meter is required for each non-utility generation source. d. Calculation of Maximum Demand Credit. (1) In the event the Customer’s Maximum Demand (as defined in Section D.3) occurs when one or more of the non-utility generators on the Customer’s side of the City’s revenue meter are not operating, the Maximum Demand will be reduced by the sum of the Maximum Generation of those non-utility generators, but in no event shall the Customer’s Maximum Demand be reduced below zero. (2) If the non-utility generation source does not operate for an entire billing cycle, the standby charge does not apply and the Customer shall not receive the Maximum Demand credit described in this Section. e. Exemptions. (1) The standby charge shall not apply to backup generators designed to operate only in the event of an interruption in utility Service and which are not used to offset Customer electricity purchases. (2) The standby charge shall not apply if the Customer meets the definition of an “Eligible Customer-generator” as defined in California Public Utilities Code Section 2827(b)(4), as amended. (3) The applicability of these exemptions shall be determined at the discretion of the Utilities Director. {End} 0 CITY OF PALO ALTO UTILITIES 9.b Packet Pg. 217 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) MEDIUM NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-4-G CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-4-G-1 Sheet No E-4-G-1 dated 7-1-202119 Effective 7-1-20221 A. APPLICABILITY: This Rate Schedule applies to Demand metered Secondary Electric Service for Customers with a maximum Demand below 1,000 kilowatts (kW) who receive power under the Palo Alto Green Program. This Rate Schedule applies to three-phase Electric Service and may include Service to Master-metered multi-family facilities or other facilities requiring Demand metered Service, as determined by the City. B. TERRITORY: The rate schedule applies everywhere the City of Palo Alto provides Electric Service. C. UNBUNDLED RATES: 1. 100% Renewable Option: Commodity Distribution Public Benefits Palo Alto Green Charge Total Summer Period Demand Charge (per kW) $4.524.41 $25.8424.50 $30.3628.91 Energy Charge (per kWh) 0.1096010536 0.0206101865 0.0046900447 0.00750060 0.1424013448 Winter Period Demand Charge (per kW) $2.822.75 $17.1016.22 $19.9218.97 Energy Charge (per kWh) 0.0791307634 0.0206101865 0.0046900447 0.00750060 0.1119310546 Minimum Bill ($/day) 18.137917.2742 O CIT Y OF PALO ALTO UTILITIES 9.b Packet Pg. 218 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) MEDIUM NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-4-G CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-4-G-2 Sheet No E-4-G-2 dated 7-1-202119 Effective 7-1-20221 2. 1000 kWh Block Purchase Option: Commodity Distribution Public Benefits Total Summer Period Demand Charge (per kW) $4.524.41 $25.8424.50 $30.3628.91 Energy Charge (per kWh) 0.1096010536 0.0206101865 0.0046900447 0.1349012848 Palo Alto Green Charge (per 1000 kWh block) $7.506.00 Winter Period Demand Charge (per kW) $2.822.75 $17.1016.22 $19.9218.97 Energy Charge (per kWh) 0.0791307634 0.0206101865 0.0046900447 0.1044309946 Palo Alto Green Charge (per 1000 kWh block) $7.506.00 Minimum Bill ($/day) 18.137917.2742 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges, and/or taxes. On a Customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. 2. Seasonal Rate Changes The Summer Period is effective May 1 to October 31 and the Winter Period is effective from November 1 to April 30. When the billing period includes use both in the Summer and the Winter Periods, the usage will be prorated based on the number of days in each seasonal period, and the charges based on the applicable rates therein. For further discussion of bill calculation and proration, refer to Rule and Regulation 11. 3. Maximum Demand Meter Whenever the monthly use of energy has exceeded 8,000 kilowatt-hours for three consecutive months, a Maximum Demand Meter will be installed as promptly as is practicable and thereafter continued in Service until the monthly use of energy has dropped below 6,000 kilowatt-hours for twelve consecutive months, whereupon, at the O CIT Y OF PALO ALTO UTILITIES 9.b Packet Pg. 219 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) MEDIUM NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-4-G CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-4-G-3 Sheet No E-4-G-3 dated 7-1-202119 Effective 7-1-20221 option of the City, it may be removed. The Maximum Demand in any month will be the maximum average power in kilowatts taken during any 15-minute interval in the month, provided that if the Customer’s load is intermittent or subject to fluctuations, the City may use a 5-minute interval. A thermal-type Demand Meter, which does not reset after a definite time interval, may be used at the City's option. The Billing Demand to be used in computing charges under this schedule will be the actual Maximum Demand in kilowatts for the current month. An exception is that the Billing Demand for Customers with Thermal Energy Storage (TES) will be based upon the actual Maximum Demand of such Customers between the hours of noon and 6 PM on weekdays. 4. Power Factor For new or existing Customers whose Demand is expected to exceed or has exceeded 300 kilowatts for three consecutive months, the City has the option of installing applicable Metering to calculate a Power Factor. The City may remove such Metering from the Service of a Customer whose Demand has dropped below 200 kilowatts for four consecutive months. When such Metering is installed, the monthly Electric bill will include a “Power Factor Adjustment”, if applicable. The adjustment will be applied to a Customer’s bill prior to the computation of any primary voltage discount. The Power Factor Adjustment is applied by increasing the total energy and Demand charges for any month by 0.25 percent or (1/4) for each one percent (1%) that the monthly Power Factor of the Customer’s load was less than 95%. The monthly Power Factor is the average Power Factor based on the ratio of kilowatt-hours to kilovolt-ampere hours consumed during the month. Where time-of-day Metering is installed, the monthly Power Factor shall be the Power Factor coincident with the Customer's Maximum Demand. 5. Changing Rate Schedules Customers may request a rate schedule change at any time to any applicable full-service rate schedule as is applicable to their kilowatt-Demand and kilowatt-hour usage profile. O CITYOF PALO ALTO UTILITIES 9.b Packet Pg. 220 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) MEDIUM NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-4-G CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-4-G-4 Sheet No E-4-G-4 dated 7-1-202119 Effective 7-1-20221 6. Palo Alto Green Program Description and Participation Palo Alto Green provides for either the purchase of enough renewable energy credits (RECs) to match 100% of the energy usage at the facility every month, or for the purchase of 1000 kilowatt-hour (kWh) blocks. These REC purchases support the production of renewable energy, increase the financial value of power from renewal sources, and creates a transparent and sustainable market that encourages new development of wind and solar. Customers choosing to participate shall fill out a Palo Alto Green Power Program application provided by the Customer Service Center. Customers may request at any time, in writing, a change to the number of blocks they wish to purchase under the Palo Alto Green Program. 7. Primary Voltage Discount Where delivery is made at the same voltage as that of the line from which the Service is supplied, a discount of 2.5 percent for available line voltages above 2 kilovolts will be offered, but the City is not required to supply Service at a particular line voltage where it has, or will install, ample facilities for supplying at another voltage equally or better suited to the Customer's electrical requirements, as determined in the City’s sole discretion. The City retains the right to change its line voltage at any time after providing reasonable advance notice to any Customer receiving the discount in this section. The Customer then has the option to change the system so as to receive Service at the new line voltage or to accept Service (without voltage discount) through transformers to be supplied by the City subject to a maximum kilovolt-ampere size limitation. 8. Standby Charge a. Applicability: The standby charge, subject to the exemptions in subsection D(8)(e), applies to Customers that have a non-utility generation source interconnected on the Customer’s side of the City’s revenue Meter and that occasionally require backup power from the City due to non-operation of the non- utility generation source. O CITYOF PALO ALTO UTILITIES 9.b Packet Pg. 221 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) MEDIUM NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-4-G CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-4-G-5 Sheet No E-4-G-5 dated 7-1-202119 Effective 7-1-20221 b. Standby Charges: Commodity Distribution Total Standby Charge (per kW of Reserved Capacity) Summer Period $0.69 $15.23 $15.92 Winter Period $0.63 $9.04 $9.67 c. Meters: A separate Meter is required for each non-utility generation source. d. Calculation of Maximum Demand Credit: (1) In the event the Customer’s Maximum Demand (as defined in Section D.3) occurs when one or more of the non-utility generators on the Customer’s side of the City’s revenue Meter are not operating, the Maximum Demand will be reduced by the sum of the Maximum Generation of those non-utility generators, but in no event shall the Customer’s Maximum Demand be reduced below zero. (2) If the non-utility generation source does not operate for an entire billing cycle, the standby charge does not apply and the Customer shall not receive the Maximum Demand credit described in this Section. e. Exemptions: (1) The standby charge shall not apply to backup generators designed to operate only in the event of an interruption in utility Service and which are not used to offset Customer electricity purchases. (2) The standby charge shall not apply if the Customer meets the definition of an “Eligible Customer-generator” as defined in California Public Utilities Code Section 2827(b)(4), as amended. (3) The applicability of these exemptions shall be determined at the discretion of the Utilities Director. {End} O CITYOF PALO ALTO UTILITIES 9.b Packet Pg. 222 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) MEDIUM NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE UTILITY RATE SCHEDULE E-4 TOU CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-4-TOU-1 Sheet No E-4-TOU-1 dated 7-1-201918 Effective 7-1-202219 A. APPLICABILITY: This voluntary Rate Schedule applies to Demand metered Secondary Electric Service for Customers with Demand between 500 and 1,000 kilowatts per month and who have sustained this level of usage for at least three consecutive months during the most recent 12 month period. This Rate Schedule applies to three-phase Electric Service and may include Service to Master- Metered multi-family facilities or other facilities requiring Demand-metered Service, as determined by the City. In addition, this Rate Schedule is applicable for Customers who did not pay power factor adjustments during the last 12 months. B. TERRITORY: This rate schedule applies everywhere the City of Palo Alto provides Electric Service. C. UNBUNDLED RATES: Rates per kilowatt (kW) and kilowatt-hour (kWh): Commodity Distribution Public Benefits Total Summer Period Demand Charge (per kW) Peak $2.712.61 $8.898.44 $11.6011.05 Mid-Peak 0.9795 8.898.44 9.869.39 Off-Peak 0.9795 8.898.44 9.869.39 Energy Charge (per kWh) Peak $0.1002209642 $0.0206001864 $0.0046900447 $0.1255111954 Mid-Peak 0.1264712142 0.0206001864 0.0046900447 0.1517614453 Off-Peak 0.0772107451 0.0206001864 0.0046900447 0.1025009763 Winter Period Demand Charge (per kW) Peak $1.571.53 $9.539.04 $11.1010.57 Off-Peak 1.571.53 9.539.04 11.1010.57 Energy Charge (per kWh) Peak $0.1226811781 $0.0206001864 $0.0046900447 $0.1479714092 Off-Peak 0.1051610113 0.0206001864 $0.0046900447 0.1304512425 0 CITY OF PALO ALTO UTILITIES 9.b Packet Pg. 223 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) MEDIUM NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE UTILITY RATE SCHEDULE E-4 TOU CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-4-TOU-2 Sheet No E-4-TOU-2 dated 7-1-201918 Effective 7-1-202219 Commodity Distribution Public Benefits Total Minimum Bill ($/day) 18.137917.2742 D. SPECIAL NOTES: 1. Calculation of Cost Components The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes. On a Customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. 2. Definition of Time Periods SUMMER PERIOD (Service from May 1 to October 31): Peak: 12:00 noon to 6:00 p.m. Monday through Friday (except holidays) Mid Peak: 8:00 a.m. to 12:00 noon Monday through Friday (except holidays) 6:00 p.m. to 9:00 p.m. Off-Peak: 9:00 p.m. to 8:00 a.m. Monday through Friday (except holidays) All day Saturday, Sunday, and holidays WINTER PERIOD (Service from November 1 to April 30): Peak: 8:00 a.m. to 9:00 p.m. Monday through Friday (except holidays) Off-Peak: 9:00 p.m. to 8:00 a.m. Monday through Friday (except holidays) All day Saturday, Sunday, and holidays SEASONAL RATE CHANGES: When the billing period includes use in both the Summer and the Winter periods, the usage will be prorated based on the number of days in each seasonal period, and the charges based on the applicable rates therein. For further discussion of bill calculation and proration, refer to Rule and Regulation 11. 3. Demand Meter Whenever the monthly use of energy has exceeded 8,000 kilowatt-hours for three consecutive months, a Demand Meter will be installed as promptly as is practicable and 0 CITY OF PALO ALTO UTILITIES 9.b Packet Pg. 224 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) MEDIUM NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE UTILITY RATE SCHEDULE E-4 TOU CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-4-TOU-3 Sheet No E-4-TOU-3 dated 7-1-201918 Effective 7-1-202219 thereafter continued in Service until the monthly use of energy has fallen below 6,000 kilowatt-hours for twelve consecutive months, whereupon, at the option of the City, it may be removed. The Billing Demand to be used in computing charges under this schedule will be the actual Maximum Demand in kilowatts taken during any 15-minute interval in each of the designated time periods as defined under Section D.2. 4. Power Factor Adjustment Time of Use Customers must not have had a power factor adjustment assessed on their Service for at least 12 months. Power factor is calculated based on the ratio of kilowatt hours to kilovolt-ampere hours consumed during the month, and must not have fallen below 95% to avoid the power factor adjustment. Should the City of Palo Alto Utilities Department find that the Customer’s Service should be subject to power factor adjustments, the Customer will be removed from the E-4-TOU rate schedule and placed on another applicable rate schedule as is suitable to their kilowatt Demand and kilowatt-hour usage. 5. Changing Rate Schedules Customers electing to be served under E-4 TOU must remain on said Rate Schedule for a minimum of 12 months. Should the Customer so wish, at the end of 12 months, the Customer may request a Rate Schedule change to any applicable City of Palo Alto full-service Rate Schedule as is suitable to their kilowatt Demand and kilowatt-hour usage. 6. Primary Voltage Discount Where delivery is made at the same voltage as that of the line from which the Service is supplied, a discount of 2 1/2 percent for available line voltages above 2 kilovolts will be offered, but the City is not required to supply Service at a particular line voltage where it has, or will install, ample facilities for supplying at another voltage equally or better suited to the Customer's electrical requirements, as determined in the City’s sole discretion. The City retains the right to change its line voltage at any time after providing reasonable advance notice to any Customer receiving the discount in this section. The Customer then has the option to change his system so as to receive Service at the new line voltage or to accept Service (without voltage discount) through transformers to be supplied by the City subject to a maximum kilovolt-ampere size limitation. 0 CITY OF PALO ALTO UTILITIES 9.b Packet Pg. 225 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) MEDIUM NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE UTILITY RATE SCHEDULE E-4 TOU CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-4-TOU-4 Sheet No E-4-TOU-4 dated 7-1-201918 Effective 7-1-202219 7. Standby Charge a. Applicability: The standby charge, subject to the exemptions in subsection D(7)(e), applies to Customers that have a non-utility generation source interconnected on the Customer’s side of the City’s revenue Meter and that occasionally require backup power from the City due to non-operation of the non- utility generation source. b. Standby Charges: Commodity Distribution Total Standby Charge (per kW of Reserved Capacity) Summer Period $0.69 $15.23 $15.92 Winter Period $0.63 $9.04 $9.67 c. Meters. A separate Meter is required for each non-utility generation source. d. Calculation of Maximum Demand Credit. (1) In the event the Customer’s Maximum Demand occurs when one or more of the non-utility generators on the Customer’s side of the City’s revenue Meter are not operating, the Maximum Demand will be reduced by the sum of the Maximum Generation of those non-utility generators, but in no event shall the Customer’s Maximum Demand be reduced below zero. (2) If the non-utility generation source does not operate for an entire billing cycle, the standby charge does not apply and the Customer shall not receive the Maximum Demand credit described in this Section. e. Exemptions. (1) The standby charge shall not apply to backup generators designed to operate only in the event of an interruption in utility Service and which are not used to offset Customer electricity purchases. (2) The standby charge shall not apply if the Customer meets the definition of an “Eligible Customer-generator” as defined in California Public Utilities Code Section 2827(b)(4), as amended. 0 CITY OF PALO ALTO UTILITIES 9.b Packet Pg. 226 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) MEDIUM NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE UTILITY RATE SCHEDULE E-4 TOU CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-4-TOU-5 Sheet No E-4-TOU-5 dated 7-1-201918 Effective 7-1-202219 (3) The applicability of these exemptions shall be determined at the discretion of the Utilities Director. {End} 0 CITY OF PALO ALTO UTILITIES 9.b Packet Pg. 227 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) LARGE NON-RESIDENTIAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-7 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-7-1 Sheet No E-7-1 dated 7-1-201918 Effective 7-1-202219 A. APPLICABILITY: This Rate Schedule applies to Demand Metered Service for large non-residential Customers with a Maximum Demand of at least 1,000KW per month per site, who have sustained this Demand level at least 3 consecutive months during the last twelve months. B. TERRITORY: This rate schedule applies everywhere the City of Palo Alto provides Electric Service. C. RATES: Rates per kilowatt (kW) and kilowatt-hour (kWh): Commodity Distribution Public Benefits Total Summer Period Demand Charge (kW) $5.165.03 $27.0625.66 $32.2230.69 Energy Charge (kWh) 0.1147610932 0.0005900053 0.0046900447 0.1200411432 Winter Period Demand Charge (kW) $2.962.89 $14.9414.16 $17.9017.05 Energy Charge (kWh) 0.0759707238 0.0005900053 0.0046900447 0.0812507738 Minimum Bill ($/day) 51.569649.1139 D. SPECIAL NOTES: 1. Calculation of Charges The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes. On a Customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. O CITYOF PALO ALTO UTILITIES 9.b Packet Pg. 228 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) LARGE NON-RESIDENTIAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-7 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-7-2 Sheet No E-7-2 dated 7-1-201918 Effective 7-1-202219 2. Seasonal Rate Changes The Summer Period is effective May 1 to October 31 and the Winter Period is effective from November 1 to April 30. When the billing period includes use both in the summer and in the winter periods, the usage will be prorated based on the number of days in each seasonal period, and the charges based on the applicable rates therein. For further discussion of bill calculation and proration, refer to Rule and Regulation 11. 3. Request for Service Qualifying Customers may request Service under this schedule for more than one Account or one Meter if the Accounts are on one site. A site, for the purposes of this Rate Schedule, consists of one or more Accounts which cover contiguous parcels of land with no intervening public right-of-ways (e.g. streets) and which have a common billing address. 4. Maximum Demand Meter Whenever the monthly use of energy has exceeded 8,000 kilowatt-hours for three consecutive months, a Maximum Demand Meter will be installed as promptly as is practicable and thereafter continued in Service until the monthly use of energy has fallen below 6,000 kilowatt-hours for twelve consecutive months, whereupon, at the option of the City, it may be removed. The Maximum Demand in any month will be the maximum average power in kilowatts taken during any 15-minute interval in the month provided that if the Customer’s load is intermittent or subject to fluctuations, the City may use a 5-minute interval. A thermal-type Demand Meter which does not reset after a definite time interval may be used at the City's option. The Billing Demand to be used in computing charges under this schedule will be the actual Maximum Demand in kilowatts for the current month. An exception is that the Billing Demand for Customers with Thermal Energy Storage (TES) will be based upon the actual Maximum Demand of such Customers between the hours of noon and 6 pm on weekdays. O CITYOF PALO ALTO UTILITIES 9.b Packet Pg. 229 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) LARGE NON-RESIDENTIAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-7 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-7-3 Sheet No E-7-3 dated 7-1-201918 Effective 7-1-202219 5. Power Factor For new or existing Customers whose Demand is expected to exceed or has exceeded 300 kilowatts for three consecutive months, the City has the option to install applicable Metering to calculate a Power Factor. The City may remove such Metering from the Service of a Customer whose Demand has been below 200 kilowatts for four consecutive months. When such metering is installed, the monthly Electric bill shall include a “Power Factor Adjustment”, if applicable. The adjustment shall be applied to a Customer’s bill prior to the computation of any primary voltage discount. The power factor adjustment is applied by increasing the total energy and Demand charges for any month by 0.25 percent (0.25%) for each one percent (1%) that the monthly Power Factor of the Customer’s load was less than 95%. The monthly Power Factor is the average Power Factor based on the ratio of kilowatt hours to kilovolt-ampere hours consumed during the month. Where time-of-day Metering is installed, the monthly Power Factor shall be the Power Factor coincident with the Customer's Maximum Demand. 6. Changing Rate Schedules Customers may request a rate schedule change at any time to any applicable full service rate schedule as is applicable to their kilowatt-Demand and kilowatt-hour usage profile. 7. Primary Voltage Discount Where delivery is made at the same voltage as that of the line from which the Service is supplied, a discount of 2 1/2 percent for available line voltages above 2 kilovolts will be offered, but the City is not required to supply Service at a particular line voltage where it has, or will install, ample facilities for supplying at another voltage equally or better suited to the Customer's electrical requirements, as determined in the City’s sole discretion. The City retains the right to change its line voltage at any time after providing reasonable advance notice to any Customer receiving the discount in this section. The Customer then has the option to change his system so as to receive Service at the new line voltage or to accept Service (without voltage discount) through transformers to be supplied by the City subject to a maximum kVA size limitation. O CITYOF PALO ALTO UTILITIES 9.b Packet Pg. 230 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) LARGE NON-RESIDENTIAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-7 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-7-4 Sheet No E-7-4 dated 7-1-201918 Effective 7-1-202219 8. Standby Charge a. Applicability: The standby charge, subject to the exemptions in subsection D(8)(e), applies to Customers that have a non-utility generation source interconnected on the Customer’s side of the City’s revenue Meter and that occasionally require backup power from the City due to non-operation of the non-utility generation source. b. Standby Charges: Commodity Distribution Total Standby Charge (per kW of Reserved Capacity) Summer Period $0.84 $12.55 $13.39 Winter Period $0.72 $6.04 $6.76 c. Meters. A separate Meter is required for each non-utility generation source. d. Calculation of Maximum Demand Credit. (1) In the event the Customer’s Maximum Demand (as defined in Section D.4) occurs when one or more of the non-utility generators on the Customer’s side of the City’s revenue Meter are not operating, the Maximum Demand will be reduced by the sum of the Maximum Generation of those non-utility generators, but in no event shall the Customer’s Maximum Demand be reduced below zero. (2) If the non-utility generation source does not operate for an entire billing cycle, the standby charge does not apply and the Customer shall not receive the Maximum Demand credit described in this Section. e. Exemptions. (1) The standby charge shall not apply to backup generators designed to operate only in the event of an interruption in utility Service and which are not used to offset Customer electricity purchases. (2) The standby charge shall not apply if the Customer meets the definition of an “Eligible Customer-generator” as defined in California Public Utilities Code O CITYOF PALO ALTO UTILITIES 9.b Packet Pg. 231 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) LARGE NON-RESIDENTIAL ELECTRIC SERVICE UTILITY RATE SCHEDULE E-7 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-7-5 Sheet No E-7-5 dated 7-1-201918 Effective 7-1-202219 Section 2827(b)(4) , as amended. (3) The applicability of these exemptions shall be determined at the discretion of the Utilities Director. {End} O CITYOF PALO ALTO UTILITIES 9.b Packet Pg. 232 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) LARGE NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE UTILITY RATE SCHEDULE E-7 TOU CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-7-TOU-1 Sheet No E-7-TOU-1 dated 7-1-201918 Effective 7-1-202219 A. APPLICABILITY: This voluntary Rate Schedule applies to Demand Metered Service for non-residential Customers with a Maximum Demand of at least 1,000KW per month per site, who have sustained this Demand level at least 3 consecutive months during the last twelve months. In addition, this Rate Schedule is applicable for Customers who did not pay power factor adjustments during the last 12 months. B. TERRITORY: This rate schedule applies everywhere the City of Palo Alto provides Electric Service. C. UNBUNDLED RATES: Rates per kilowatt (kW) and kilowatt-hour (kWh): Commodity Distribution Public Benefits Total Summer Period Demand Charge (per kW) Peak $3.243.11 $9.088.62 $12.3211.73 Mid-Peak 0.990.97 9.088.62 10.079.60 Off-Peak 0.990.97 9.088.62 10.079.60 Energy Charge (per kWh) Peak $0.1192111356 $0.0005900053 $0.0046900447 $0.1244911856 Mid-Peak 0.1501114299 0.0005900053 0.0046900447 0.1553914799 Off-Peak 0.0921208776 0.0005900053 0.0046900447 0.0974009276 Winter Period Demand Charge (per kW) Peak $1.511.47 $7.567.17 $9.078.63 Off-Peak 1.511.47 7.567.17 9.078.63 Energy Charge (per kWh) Peak $0.0799707619 $0.0005900053 $0.0046900447 $0.0852508119 0 CITY OF PALO ALTO UTILITIES 9.b Packet Pg. 233 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) LARGE NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE UTILITY RATE SCHEDULE E-7 TOU CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-7-TOU-2 Sheet No E-7-TOU-2 dated 7-1-201918 Effective 7-1-202219 Off-Peak 0.0686406540 0.0005900053 0.0046900447 0.0739207040 Minimum Bill ($/day) 51.569649.1139 D. SPECIAL NOTES: 1. Calculation of Charges The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes. On a Customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. 2. Definition of Time Periods SUMMER PERIOD (Service from May 1 to October 31): Peak: 12:00 noon to 6:00 p.m. Monday through Friday (except holidays) Mid Peak: 8:00 a.m. to 12:00 noon Monday through Friday (except holidays) 6:00 p.m. to 9:00 p.m. Off-Peak: 9:00 p.m. to 8:00 a.m. Monday through Friday All day Saturday, Sunday, and holidays WINTER PERIOD (Service from November 1 to April 30): Peak: 8:00 a.m. to 9:00 p.m. Monday through Friday (except holidays) Off-Peak: 9:00 p.m. to 8:00 a.m. Monday through Friday (except holidays) All day Saturday, Sunday, and holidays SEASONAL RATE CHANGES: When the billing period includes use in both the Summer and the Winter periods, the usage will be prorated based on the number of days in each seasonal period, and the charges based on the applicable rates therein. For further discussion of bill calculation and proration, refer to Rule and Regulation 11. 3. Request for Service O CIT Y OF PALO ALTO UTILITIES 9.b Packet Pg. 234 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) LARGE NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE UTILITY RATE SCHEDULE E-7 TOU CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-7-TOU-3 Sheet No E-7-TOU-3 dated 7-1-201918 Effective 7-1-202219 Qualifying Customers may request Service under this schedule for more than one Account or one Meter if the Accounts are on one site. A site, for the purposes of this Rate Schedule, consists of one or more Accounts which cover contiguous parcels of land with no intervening public right- of-ways (e.g. streets) and which have a common billing address. 4. Demand Meter Whenever the monthly use of energy has exceeded 8,000 kilowatt-hours for three consecutive months, a Demand Meter will be installed as promptly as is practicable and thereafter continued in Service until the monthly use of energy has fallen below 6,000 kilowatt-hours for twelve consecutive months, whereupon, at the option of the City, it may be removed. The Billing Demand to be used in computing charges under this schedule will be the actual Maximum Demand in kilowatts taken during any 15-minute interval in each of the designated time periods as defined under Section D.2. 5. Power Factor Adjustment Time of Use Customers must not have had a power factor adjustment assessed on their Service for at least 12 months. Power factor is calculated based on the ratio of kilowatt hours to kilovolt-ampere hours consumed during the month, and must not have fallen below 95% to avoid the power factor adjustment. Should the City of Palo Alto Utilities Department find that the Customer’s Service should be subject to power factor adjustments, the Customer will be removed from the E-7-TOU rate schedule and placed on another applicable rate schedule as is suitable to their kilowatt Demand and kilowatt-hour usage. 6. Changing Rate Schedules Customers electing to be served under E-7 TOU must remain on said Rate Schedule for a minimum of 12 months. Should the Customer so wish, at the end of 12 months, the Customer may request a Rate Schedule change to any applicable City of Palo Alto full-service Rate Schedule as is suitable to their kilowatt Demand and kilowatt-hour usage. 7. Primary Voltage Discount O CIT Y OF PALO ALTO UTILITIES 9.b Packet Pg. 235 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) LARGE NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE UTILITY RATE SCHEDULE E-7 TOU CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-7-TOU-4 Sheet No E-7-TOU-4 dated 7-1-201918 Effective 7-1-202219 Where delivery is made at the same voltage as that of the line from which the Service is supplied, a discount of 2 1/2 percent for available line voltages above 2 kilovolts will be offered, but the City is not required to supply Service at a particular line voltage where it has, or will install, ample facilities for supplying at another voltage equally or better suited to the Customer's electrical requirements, as determined in the City’s sole discretion. The City retains the right to change its line voltage at any time after providing reasonable advance notice to any Customer receiving the discount in this section. The Customer then has the option to change his system so as to receive Service at the new line voltage or to accept Service (without voltage discount) through transformers to be supplied by the City subject to a maximum kilovolt-ampere size limitation. 8. Standby Charge a. Applicability: The standby charge, subject to the exemptions in subsection D(8)(e), applies to Customers that have a non-utility generation source interconnected on the Customer’s side of the City’s revenue Meter and that occasionally require backup power from the City due to non-operation of the non-utility generation source. b. Standby Charges: Commodity Distribution Total Standby Charge (per kW of Reserved Capacity) Summer Period $0.84 $12.55 $13.39 Winter Period $0.72 $6.04 $6.76 c. Meters. A separate Meter is required for each non-utility generation source. d. Calculation of Maximum Demand Credit. (1) In the event the Customer’s Maximum Demand occurs when one or more of the non-utility generators on the Customer’s side of the City’s revenue Meter are not operating, the Maximum Demand will be reduced by the sum of the Maximum Generation of those non-utility generators, but in no event shall the Customer’s Maximum Demand be reduced below zero. O CIT Y OF PALO ALTO UTILITIES 9.b Packet Pg. 236 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) LARGE NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE UTILITY RATE SCHEDULE E-7 TOU CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-7-TOU-5 Sheet No E-7-TOU-5 dated 7-1-201918 Effective 7-1-202219 (2) If the non-utility generation source does not operate for an entire billing cycle, the standby charge does not apply and the Customer shall not receive the Maximum Demand credit described in this Section. e. Exemptions. (1) The standby charge shall not apply to backup generators designed to operate only in the event of an interruption in utility Service and which are not used to offset Customer electricity purchases. (2) The standby charge shall not apply if the Customer meets the definition of an “Eligible Customer-generator” as defined in California Public Utilities Code Section 2827(b)(4) , as amended. (3) The applicability of these exemptions shall be determined at the discretion of the Utilities Director. {End} O CIT Y OF PALO ALTO UTILITIES 9.b Packet Pg. 237 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) LARGE NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-7-G CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-7-G-1 Sheet No E-7-G-1 dated 7-1-202119 Effective 7-1-202221 A. APPLICABILITY: This Rate Schedule applies to Demand metered Service for large non-residential Customers who choose Service under the Palo Alto Green Program. A Customer may qualify for this Rate Schedule if the Customer’s Maximum Demand is at least 1,000KW per month per site, who have sustained this Demand level at least 3 consecutive months during the last twelve months. B. TERRITORY: The rate schedule applies everywhere the City of Palo Alto provides Electric Service. C. UNBUNDLED RATES: 1. 100% Renewable Option: Commodity Distribution Public Benefits Palo Alto Green Charge Total Summer Period Demand Charge ( per kW) $5.165.03 $27.0625.66 $32.2230.69 Energy Charge (per kWh) 0.1147610932 0.0005900053 0.0046900447 0.00750060 0.1275412032 Winter Period Demand Charge (per kW) $2.962.89 $14.9414.16 $17.9017.05 Energy Charge (per kWh) 0.0759707238 0.0005900053 0.0046900447 0.00750060 0.0887508338 Minimum Bill ($/day) 51.569649.1139 O CIT Y OF PALO ALTO UTILITIES 9.b Packet Pg. 238 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) LARGE NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-7-G CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-7-G-2 Sheet No E-7-G-2 dated 7-1-202119 Effective 7-1-202221 2. 1000 kWh Block Purchase Option: Commodity Distribution Public Benefits Total Summer Period Demand Charge (per kW) $5.165.03 $27.0625.66 $32.2230.69 Energy Charge (per kWh) 0.1147610932 0.0005900053 0.0046900447 0.1200411432 Palo Alto Green Charge (per 1000 kWh block) $7.506.00 Winter Period Demand Charge (per kW) $2.962.89 $14.9414.16 $17.9017.05 Energy Charge (per kWh) 0.0759707238 0.0005900053 0.0046900447 0.0812507738 Palo Alto Green Charge (per 1000 kWh block) $7.506.00 Minimum Bill ($/day) 51.569649.1139 D. SPECIAL NOTES: 1. Calculation of Charges The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes. On a Customer’s bill statement, the bill amount may be broken down into appropriate components as calculated under Section C. 2. Seasonal Rate Changes The Summer Period is effective May 1 to October 31 and the Winter Period is effective from November 1 to April 30. When the billing period includes use both in the Summer and the Winter Periods, the usage will be prorated based on the number of days in each seasonal period, and the charges based on the applicable rates therein. For further discussion of bill calculation and proration, refer to Rule and Regulation 11. 3. Maximum Demand Meter Whenever the monthly use of energy has exceeded 8,000 kilowatt-hours for three consecutive months, a Maximum Demand Meter will be installed as promptly as is O CIT Y OF PALO ALTO UTILITIES 9.b Packet Pg. 239 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) LARGE NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-7-G CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-7-G-3 Sheet No E-7-G-3 dated 7-1-202119 Effective 7-1-202221 practicable and thereafter continued in Service until the monthly use of energy has dropped below 6,000 kilowatt-hours for twelve consecutive months, whereupon, at the option of the City, it may be removed. The Maximum Demand in any month will be the maximum average power in kilowatts taken during any 15-minute interval in the month, provided that if the Customer’s load is intermittent or subject to fluctuations, the City may use a 5-minute interval. A thermal-type Demand Meter which does not reset after a definite time interval may be used at the City's option. The Billing Demand to be used in computing charges under this schedule will be the actual Maximum Demand in kilowatts for the current month. An exception is that the Billing Demand for Customers with Thermal Energy Storage (TES) will be based upon the actual Maximum Demand of such Customers between the hours of noon and 6 PM on weekdays. 4. Request for Service Qualifying Customers may request Service under this schedule for more than one Account or one Meter if the Accounts are at one site. A site, for the purposes of this Rate Schedule, consists of one or more Accounts which cover contiguous parcels of land with no intervening public right-of-ways (e.g. streets) and which have a common billing address. 5. Power Factor For new or existing Customers whose Demand is expected to exceed or has exceeded 300 kilowatts for three consecutive months, the City has the option of installing applicable Metering to calculate a Power Factor. The City may remove such Metering from the Service of a Customer whose Demand has dropped below 200 kilowatts for four consecutive months. When such Metering is installed, the monthly Electric bill shall include a “Power Factor Adjustment”, if applicable. The adjustment shall be applied to a Customer’s bill prior to the computation of any primary voltage discount. The power factor adjustment is applied by increasing the total energy and Demand charges for any month by 0.25 percent or (1/4) for each one percent (1%) that the monthly Power Factor of the Customer’s load was less than 95%. O CIT Y OF PALO ALTO UTILITIES 9.b Packet Pg. 240 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) LARGE NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-7-G CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-7-G-4 Sheet No E-7-G-4 dated 7-1-202119 Effective 7-1-202221 The monthly Power Factor is the average Power Factor based on the ratio of kilowatt-hours to kilovolt-ampere hours consumed during the month. Where time-of-day Metering is installed, the monthly Power Factor shall be the Power Factor coincident with the Customer's Maximum Demand. 6. Changing Rate Schedules Customers may request a rate schedule change at any time to any applicable full service rate schedule as is applicable to their kilowatt-Demand and kilowatt-hour usage profile 7. Palo Alto Green Program Description and Participation Palo Alto Green provides for either the purchase of enough renewable energy credits (RECs) to match 100% of the energy usage at the facility every month, or for the purchase of 1000 kilowatt-hour (kWh) blocks. These REC purchases support the production of renewable energy, increase the financial value of power from renewal sources, and creates a transparent and sustainable market that encourages new development of wind and solar. Customers choosing to participate shall fill out a Palo Alto Green Power Program application provided by the Customer Service Center. Customers may request at any time, in writing, a change to the number of blocks they wish to purchase under the Palo Alto Green Program. 8. Primary Voltage Discount Where delivery is made at the same voltage as that of the line from which the Service is supplied, a discount of 2 1/2 percent for available line voltages above 2 kilovolts will be offered, but the City is not required to supply Service at a qualified line voltage where it has, or will install, ample facilities for supplying at another voltage equally or better suited to the Customer's Electrical requirements, as determined in the City’s sole discretion. The City retains the right to change its line voltage at any time after providing reasonable advance notice to any Customer receiving the discount in this section. The Customer then has the option to change the system so as to receive Service at the new line voltage or to accept Service (without voltage discount) through transformers to be supplied by the City subject to a maximum kilovolt-ampere size limitation. 9. Standby Charge O CIT Y OF PALO ALTO UTILITIES 9.b Packet Pg. 241 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) LARGE NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-7-G CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-7-G-5 Sheet No E-7-G-5 dated 7-1-202119 Effective 7-1-202221 a. Applicability: The standby charge, subject to the exemptions in subsection D(9)(e), applies to Customers that have a non-utility generation source interconnected on the Customer’s side of the City’s revenue Meter and that occasionally require backup power from the City due to non-operation of the non- utility generation source. b. Standby Charges: Commodity Distribution Total Standby Charge (per kW of Reserved Capacity) Summer Period $0.84 $12.55 $13.39 Winter Period $0.72 $6.04 $6.76 c. Meters: A separate Meter is required for each non-utility generation source. d. Calculation of Maximum Demand Credit: (1) In the event the Customer’s Maximum Demand (as defined in Section D.3) occurs when one or more of the non-utility generators on the Customer’s side of the City’s revenue Meter are not operating, the Maximum Demand will be reduced by the sum of the Maximum Generation of those non-utility generators, but in no event shall the Customer’s Maximum Demand be reduced below zero. (2) If the non-utility generation source does not operate for an entire billing cycle, the standby charge does not apply and the Customer shall not receive the Maximum Demand credit described in this Section. e. Exemptions: (1) The standby charge shall not apply to backup generators designed to operate only in the event of an interruption in utility Service and which are not used to offset Customer electricity purchases. (2) The standby charge shall not apply if the Customer meets the definition of an “Eligible Customer-generator” as defined in California Public Utilities Code Section 2827(b)(4), as amended. (3) The applicability of these exemptions shall be determined at the discretion of the Utilities Director. O CIT Y OF PALO ALTO UTILITIES 9.b Packet Pg. 242 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) LARGE NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE UTILITY RATE SCHEDULE E-7-G CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No E-7-G-6 Sheet No E-7-G-6 dated 7-1-202119 Effective 7-1-202221 {End} O CIT Y OF PALO ALTO UTILITIES 9.b Packet Pg. 243 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) STREET LIGHTS UTILITY RATE SCHEDULE E-14 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No. E-14-1 Sheet No. E-14-1 dated 7-1-201918 Effective 7-1-202219 A. APPLICABILITY: This Rate Schedule applies to all street and highway lighting installations, which CPAU elects to operate and maintain. B. TERRITORY: Within the incorporated limits of the City of Palo Alto and on land owned or leased by the City. C. RATES: Per Lamp Per Month Class A: CPAU supplies electricity and switching service only. Lamp Rating: High Pressure Sodium Vapor Lamps 100 watts 6.215.91 200 watts 11.4610.91 250 watts 14.0813.41 310 watts 17.4216.59 400 watts 22.4321.36 O CIT Y OF PALO ALTO UTILITIES 9.b Packet Pg. 244 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) STREET LIGHTS UTILITY RATE SCHEDULE E-14 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No. E-14-2 Sheet No. E-14-2 dated 7-1-201918 Effective 7-1-202219 Per Lamp Per Month – Class C: CPAU supplies electricity and switching and maintains lighting system, including lamps and glassware. Lamp Rating: Mercury-Vapor Lamps 400 watts 35.8334.12 High Pressure Sodium Vapor Lamps 70 watts 32.9731.40 100 watts 34.5532.90 150 watts 37.1735.40 250 watts 42.4240.40 Light Emitting Diode (LED) Lamps 70 watts-equivalent 29.4828.08 100 watts-equivalent 30.6829.22 150 watts-equivalent 31.7730.26 250 watts 34.7833.12 D. SPECIAL CONDITIONS: 1. Type of Service: This Rate Schedule applies to series, multiple, and single lamp street lighting systems to which CPAU delivers Service at secondary voltage. Unless a variation is approved by CPAU in its sole discretion, Service to street lighting systems will be delivered at 120/240 volts, three-wire, single-phase or 120/208 volt three-wire, single phase from star-connected poly-phase lines. Single phase service from 480-volt sources will be available in certain areas at CPAU’s discretion. All voltages stated herein are nominal, and reasonable variations may occur. New lights will normally be installed as multiple lamp systems with a single Service point or single lamp with and individual Service point. 2. Point of Delivery: Delivery will be made to the Customer's system at a Service point or at points designated by CPAU. CPAU will furnish the Service connection to one point for each O CIT Y OF PALO ALTO UTILITIES 9.b Packet Pg. 245 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) STREET LIGHTS UTILITY RATE SCHEDULE E-14 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No. E-14-3 Sheet No. E-14-3 dated 7-1-201918 Effective 7-1-202219 lamp or group of lamps, provided the Customer has designed the system to include the minimum number of delivery points. CPAU will make all underground connections to CPAU’s system at the Customer's expense. 3. Switching: CPAU will perform switching (on CPAU's side of the points of delivery) at no Charge, provided there are at least 10 kilowatts of lamp load on each circuit separately switched, including all lamps on the circuit whether served under this Rate Schedule or not. An extra charge of $2.50 per month will be made for each circuit separately switched unless such switching installation is made for CPAU's convenience. 4. Annual Burning Schedule: The rates in this Rate Schedule apply to lamps which will be turned on and off once each night in accordance with a regular burning schedule approved by CPAU and not exceeding 4,100 hours per year. 5. Maintenance: The Class C rates in this Rate Schedule include all labor necessary for replacement of glassware, including inspection and cleaning. Maintenance of glassware by CPAU is limited to standard glassware that is commonly used and manufactured in reasonably large quantities, as determined by CPAU in its sole discretion. The Class C rates include maintenance of circuits between lamp posts and of circuits and equipment in and on the posts, provided these are all of good standard construction as determined by CPAU. CPAU in its sole discretion may decline to grant Class C rates for maintenance of systems with non-standard glassware, or inadequate circuitry and equipment. Class C rates applied to any agency other than the City of Palo Alto also include painting of posts with one coat of good ordinary paint, as determined by CPAU to be needed to maintain good appearance. Maintenance does not include replacement of posts damaged by third parties or acts of nature. 6. System Owned In-Part by CPAU: If CPAU agrees to a Customer’s request for CPAU to install, own, or maintain any portion of the lighting fixtures, supports, and/or interconnecting circuits, the Customer shall be responsible for an extra monthly Charge of one and one-fourth percent of CPAU's contribution to the cost of the street lighting system. 7. Rates For Lamps Not on this Rate Schedule: In the event a Customer installs a lamp which is not represented on this Rate Schedule, CPAU will prepare an interim rate reflecting CPAU's estimated costs associated with the specific lamp. This interim rate will serve as the effective rate for billing purposes until the new lamp rating is added to Rate Schedule E-14. {End} O CIT Y OF PALO ALTO UTILITIES 9.b Packet Pg. 246 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) EXPORT ELECTRICITY COMPENSATION UTILITY RATE SCHEDULE E-EEC-1 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No. E-EEC-1 Sheet No.E-EEC-1 dated 7-1-202119 Effective 7-1-202221 A. APPLICABILITY: This Rate Schedule applies in conjunction with the otherwise applicable Rate Schedules for each Customer class. This Rate Schedule may not apply in conjunction with any time-of-use Rate Schedule. This Rate Schedule applies to Customer-Generators as defined in Rule and Regulation 2 who are either not eligible for Net Energy Metering or who are eligible for Net Energy metering but elect to take Service under this Rate Schedule. B. TERRITORY: Applies to locations within the service area of the City of Palo Alto. C. RATE: The following buyback rate shall apply to all electricity exported to the grid. Per kWh Export electricity compensation rate $0.10451078 D. SPECIAL CONDITIONS 1. Metering equipment: Electricity delivered by CPAU to the Customer-Generator or received by CPAU from the Customer-Generator shall be measured using a Meter capable of registering the flow of electricity in two directions (aka “bidirectional meter”). The electrical power measurements will be used for billing the Customer-Generator. CPAU shall furnish, install and own the appropriate Meter. 2. Billing: a. CPAU shall measure during the billing period, in kilowatt-hours, the electricity delivered and received after the Customer-Generator serves its own instantaneous load. b. CPAU shall bill the Customer-Generator consumption charges for the electricity delivered by CPAU to the Customer-Generator based on the Customer-Generator’s applicable Rate Schedule. c. In the event the electricity generated exceeds the electricity consumed and therefore is received by CPAU, the Customer will receive a credit for all electricity received by CPAU at the buyback Rate designated in section C above. {End} O CITYOF PALO ALTO UTILITIES 9.b Packet Pg. 247 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) NET METERING NET SURPLUS ELECTRICITY COMPENSATION UTILITY RATE SCHEDULE E-NSE-1 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No. E-NSE-1 Sheet No.E-NSE-1 dated 07-01-202119 Effective 7-1-202221 A. APPLICABILITY: This Rate Schedule applies to eligible residential and small commercial Net Energy Metering Customers who, at the end of an annual settlement period, as described in Rule 29, are Net Surplus Customer-Generators of electricity who elect to receive monetary compensation as such preference is indicated on the net surplus electricity election form. This Rate Schedule only applies to Customers who participate in Net Energy Metering, and does not apply to Customers that take service under the City’s Net Energy Metering Successor Rate, as each of these terms are defined in Rule and Regulation 2. B. TERRITORY: This rate schedule applies anywhere the City of Palo Alto provides electric service. C. RATES: Per kWh Net Surplus Electricity Compensation rate $0.10260992 D. SPECIAL CONDITIONS 1. Net Surplus Electricity Compensation Rate eligibility shall be determined as specified in Rule 29. Net surplus electricity, as specified in Rule 29, if applicable, will be multiplied by the above compensation rate to determine the Customer’s annual net surplus electricity compensation stated in dollars. 2. Additional terms, conditions and definitions govern Net Energy Metering Service and Interconnection, as described in Rule 29. {End} O CIT Y OF PALO ALTO UTILITIES 9.b Packet Pg. 248 At t a c h m e n t : A t t a c h m e n t B : P r o p o s e d E l e c t r i c R a t e S c h e d u l e s ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d R a t e s ) March 02, 2022 www.cityofpaloalto.org ELECTRIC UTILITY FINANCIAL PLAN ANDPROPOSED RATECHANGES FOR FY 2023 Attachment C • CITY OF PALO ALTO UTILIT 9.c Packet Pg. 249 At t a c h m e n t : A t t a c h m e n t C : P r e s e n t a t i o n ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d 2 FY 2023 proposal: •5 to 8% overall increase •Lower revenues from rates and interest income; Higher purchase costs, contract line crew costs •Reserve margins are minimal. Some combination of reserve withdrawals, cost reductions, or rate increases will be necessary. •5% involves changes to and activation of the Hydro Rate Adjuster at the $0.013/kWh level •8% scenario was originally presented to the UAC in December Future years: •5 to 7% rate increase in FY 2024, depending on hydro situation •Electric Special Project Reserve loan repayments rescheduled to FY 2025/2026. Electric Rate Proposal ~CITY OF ~PALO ALTO 9.c Packet Pg. 250 At t a c h m e n t : A t t a c h m e n t C : P r e s e n t a t i o n ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d 3 Electric Utility Cost Structure Electric Distribution costs (in green): $62 million 42% Electric Supply: The cost to buy electricity and transport it to Palo Alto, including operational overhead (e.g. energy scheduling) Electric Supply costs (in blue): $86 million 58% Electric Distribution: The cost to distribute electricity within Palo Alto, including: maintaining and replacing electric infrastructure, customer service, billing, administration, etc. ~CITY OF ~PA ILO ALTO 31% ~ Generation ■ Operations 38% 11% 5% 15% ~ Transm ission □ Supp ly Overhead ~ Capita l Investment 9.c Packet Pg. 251 At t a c h m e n t : A t t a c h m e n t C : P r e s e n t a t i o n ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d 4 LONG TERM COST TRENDS Annualized Increase, FY18-FY23: Annualized Increase, FY23-FY27: Supply: -1%/yr Distribution: 6%/yr Supply: 3%/yr Distribution: 1%/yr • . CITY OF PALO ALTO ,_...., II) C 0 ·---·-~ ....._. -v,.. 200 150 100 .50 FY 2018 FY 2023 (Projected) Electric Distribution Fy 2027 (Projected) 9.c Packet Pg. 252 At t a c h m e n t : A t t a c h m e n t C : P r e s e n t a t i o n ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d 5 LONG TERM COST TRENDS: SUPPLY Annualized Increase, FY18-FY23: Annualized Increase, FY23-FY27: Transmission: 8%/yr Generation: -4%/yr Transmission: 9%/yr Generation: -0.3%/yr Overhead: 2%/yr Overhead: 2%/yr • . CITY OF PALO ALTO 100 80 -160 (/') £: 0 ·-40 ~ --<.n-20 -■ ■ 1 I ■■ I I'■■ I ■ ■ <I I ■ ■ I I ■ ■ I I ■ ■ 1 I ■■ I I ■■ I l:i • • i " • • • • • • I - -.. - -... --. --.. --.. --.. --.. --... - -. ■■II ■■ I I ■■ I I ■■II ■■ I I ■■ I ■ ■ .. I ■ ■ I I ■ ■ I I ■ ■ 1 I ■■ I I ■■ I l:i • • • • • • • • • • I - -.. , --... --. FY 2018 ~ Generation .. -.. --.. - -. ' . ,, ' .... ' .. ,, ' ■■II ■■ I I ■■ I I ■ ,1 I ■■ <II ■■ <I I ■■I I ■■ I I ■■ I I ..... -.... -..... . -.. - -.. - -.. .. -.. --.. - -. ' . ,, ' . . .. ' .. ,, ' ■■II ■■ I I ■■ I I ■ .. I ■ ■ ,I I ■ ■ .. I ■■II ■■ I I ■■ I I .................. --.. - -.. - -.. .. -.. --.. --. ' • J' •• ,, ' •• ,, ' ■■II ■■ I I ■■ I I ■,I I ■■ ,II ■■ ,I I ■--■ •• ■--■ ............ .............. ............ .. ■--■ •• ■--■ ............ ............ ............ .. ■--■ •• ■--■ ............ .............. ............ ■.•"l■• ■.•"I■• ............ .............. ............ .. ■--■ •• ■--■ ............ .............. ............ .. ■--■ •• ■--■ ............ .. ··-· ...... ............ -• -. -• -. -• - FY 2023 Fy 2027 (Projected) (Projected) Transmission ~ Overhead 9.c Packet Pg. 253 At t a c h m e n t : A t t a c h m e n t C : P r e s e n t a t i o n ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d 6 Supply Cost Drivers •Low hydroelectric conditions and high market prices due to increased natural gas costs have dramatically increased electric supply costs •Overhead costs have decreased as NCPA has sought revenue by providing services to more agencies •Transmission costs have increased dramatically –system replacement, new lines to integrate new generators. CPA partners with others to advocate for cost control. •Renewable projects have come online. In the longer term, generation costs should stay fairly stable due to CPA’s long- term fixed price contracts ~CITY OF ~PA ILO ALTO 9.c Packet Pg. 254 At t a c h m e n t : A t t a c h m e n t C : P r e s e n t a t i o n ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d 7 LONG TERM COST TRENDS: DISTRIBUTION Annualized Increase, FY18-FY23:Annualized Increase, FY23-FY27: Capital: 5%/yr Operations: 6%/yr Capital: 0.3%/yr Operations: 1%/yr • . CITY OF PALO ALTO 90 80 70 -60 Vl C: 50 0 40 ~ 30 --u,. 20 10 FY 2018 IFY 2023 (Projected) Fy 2027 (Projected) Debt Service □ Operations ~ Capital Investment 9.c Packet Pg. 255 At t a c h m e n t : A t t a c h m e n t C : P r e s e n t a t i o n ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d 8 Distribution Cost Drivers •Medical/retirement benefit costs and associated overhead costs continue to increase •Increased capital investment in the electric distribution system needed due to system age •Underground construction costs have increased substantially •Additional contract expense for line crew until internally staffedUJ ,11. rn I I ~CITY OF ~PALO ALTO 9.c Packet Pg. 256 At t a c h m e n t : A t t a c h m e n t C : P r e s e n t a t i o n ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d 9 Option 1: Electric Cost and Revenue Projections Cos t / R e v e n u e Ill C .5! ~ ~CITY OF ~PA ILO ALTO 6% 8% 0% 0% 5% 5% 11% 14% 5% 5% 5% $200 RA TE CHANG ES: ________________________________________________________________________ _ $150 ~Electric Commodity ~Capital Investment $100 CJJTra nsf ers □Operations $SO ---• Debt Service -Revenue $0 r--00 O'I 0 .-t N ("I") <::t U") I.D r--.-t .-t .-t N N N N N N N N 0 0 0 0 0 0 0 0 0 0 0 N N N N N N N N N N N >->->->->->->->->->->-u.. u.. u.. u.. u.. u.. u.. u.. u.. u.. u.. Actuals Projections -------------------------------------------------------------------------------------------- 9.c Packet Pg. 257 At t a c h m e n t : A t t a c h m e n t C : P r e s e n t a t i o n ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d 10 Option 1: Electric Supply Operating Reserve Projections "' $45 C: .2 ·-~ $40 ~CITY OF ~PA ILO ALTO $35 $30 $25 $20 $15 $10 $5 $0 ------------------ -Reserve Maximum -------------------------------------------------------------------------------------------------------------·Reser,te-,·ar-ge ----------· -Reserve Minim um -Reserve (Year-End) FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 9.c Packet Pg. 258 At t a c h m e n t : A t t a c h m e n t C : P r e s e n t a t i o n ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d 11 Option 1: Electric Supply Reserve Adequacy ~CITY OF ~PA ILO ALTO .,, $60 C ~ ~ $50 $40 $30 $20 $10 $0 §8:§IHydro Stabilization Reserve (Year-End) !millOperations Reserve (Year-End) -Risk Assessment FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 9.c Packet Pg. 259 At t a c h m e n t : A t t a c h m e n t C : P r e s e n t a t i o n ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d 12 Option 1: Electric Distribution Operating Reserve Projections ~CITY OF ~PA ILO ALTO .,, $18 C ~ ~ $16 $12 $10 1 ___ :::___ __________ =:::=======================:::::;:;:===------ $8 --.. -----· · -· · -· · -· · --· · -__ .. --·· -·· . ---.. -··-··-··---··---$6 --Reserve Maximum $4 --Reserve Target ------------------------------------------ --Reserve Minimum $2 --Reserve (Vear-tna) Risk Assessment $0 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 9.c Packet Pg. 260 At t a c h m e n t : A t t a c h m e n t C : P r e s e n t a t i o n ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d 13 Option 2: Electric Cost and Revenue Projections Cos t / R e v e n u e .,, C: .2 ~ ~CITY OF ~PA ILO ALTO 11% 14% 6% 8% 0% 0% 8% 7% 6% 4% 1% $200 $150 RA TE CHANGES: _____________________________________________________________ ~if: __ _ I milllElectric Commodity Capital Investment $100 ______ IiI! _____ _ EJJTransfers □Operations $50 ---•Debt Service -Revenue $0 r---00 O"I 0 ..-1 N f'() s::t I.() I.D r--- ..-1 ..-1 ..-1 N N N N N N N N 0 0 0 0 0 0 0 0 0 0 0 N N N N N N N N N N N >->->->->->->->->->->-LL LL LL LL LL LL LL LL LL LL LL Actuals Projections ------------------------------------------------------------------------------------------- 9.c Packet Pg. 261 At t a c h m e n t : A t t a c h m e n t C : P r e s e n t a t i o n ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d 14 Option 2: Electric Supply Operating Reserve Projections ~CITY OF ~PA ILO ALTO Ill $45 C: .2 ·-~ $40 $35 $30 $25 $20 $15 $10 $5 $0 __ -.._ _______ _ -Reserve Maximum -------------------------------------------------------------------------------------------------------------R·esenre-T-ar-g·et------------ -Reserve M inimum -Reserve (Yea r-End) FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 9.c Packet Pg. 262 At t a c h m e n t : A t t a c h m e n t C : P r e s e n t a t i o n ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d 15 Option 2: Electric Supply Reserve Adequacy Ill C: .2 ~CITY OF ~PA ILO ALTO $60 $50 $40 $30 $20 $10 $0 ~Hydro Stabilization Reserve (Year­ End) &~:,~:,~IOperations Reserve (Year-End) -Risk Assessment FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 9.c Packet Pg. 263 At t a c h m e n t : A t t a c h m e n t C : P r e s e n t a t i o n ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d 16 Option 2: Electric Distribution Operating Reserve Projections Ill $20 C: .!2 ~ $18 ~CITY OF ~PA ILO ALTO $16 $14 $12 $10 $8 $6 $4 $2 $0 --------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------- ~~---~---------~---------:::::-~----=--------=---=-------------- ------------------- ----, ----~ --~ -... ~ - --------------------,--·-------------------------------------------------------------------- -----------------------------------7 ~ -------__________ Q@ti _____________________________________ ,__... • -r ----------------------------- -------------. . . -.. --· ·---.. -•·-· ,__ .. ___ ___ -------------------------------------------------------------------ReseF1.i:e--Msa.xi-1:-r:1a1.1aR+--- - -Reserve Target ---------------------------------------------------------------------------------------------- -Reserve Minimum ---------------------------------------------------------------------ReseFve--(-Y-eaF-End)--- -Risk Assessment FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 9.c Packet Pg. 264 At t a c h m e n t : A t t a c h m e n t C : P r e s e n t a t i o n ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d 17 Estimated Bill Changes Rate Sche ule E-1 ( R,esid entfla I) E-2 (Smal Non- Resi dentia ) E-4 (Med ium · o n-Resi dentia I) E-7 (Large Nori1- Resiid e rit'i a I ~CITY OF ~PALO ALTO Bill under Usage Wh/n1p) Current Rates ($/mo) 3.00 $41.27 (S1Umme r Median) S2 .. ,18 3,65 (Winter Median) 69' 22 • IIJ"· 453 650. 10Z.37 1200. 213.89 1 JOOO 177 16:0JOOO. 2..41795 5001 000. 771477 2,000JOO.O. 2.731431 Bill U der Rates Change Pro ased 7/1/22 ($/mo) $/mo % $43.34 $2.07 5% 54..79 2.61 5% 72 68 3.46 So/c '·. □ 112.74 5.37 5% 224.58 :10.69 5% 186 9 5% 26,035 1,,240 5% 81,35.2 3,,873 5% 287,095 13,664 5% 9.c Packet Pg. 265 At t a c h m e n t : A t t a c h m e n t C : P r e s e n t a t i o n ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d 18 Current Bill Comparison Residential Commercial ,. Season Usage (kwh) 300 W inte r 453 (Med ia n) 650 1200 300 Summer (Mled ia n)i 365 650 1200 ~CITY OF ~PALO ALTO - Palo Alto PG&E 4-1.27 84.72 16"9.22 12.7.93 107.37 1'97.16 213.89 392.28 4-1.27 87.11 52.18 110.17 107.37 211.27 213.89 4J06.39 Santa Clara 39.22 .59.95 86.65 I 16117 39.22 48.03 86.65 161.17 --., Usage (kwh/mo) Pa~o Alrto PG&E Sant a CII a ra l.1000 177 303 '196 160,1000 24_.795 34,211 21i 1Tl 500,101)0 77_.477 86,,456 6619137 2 .. 000.1000 273_.431 333,240 2671523 9.c Packet Pg. 266 At t a c h m e n t : A t t a c h m e n t C : P r e s e n t a t i o n ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d 19 Staff requests that the Utilities Advisory Commission (UAC) recommend that the Council adopt a Resolution (Attachment A): 1.Approving the Fiscal Year (FY) 2023 Electric Financial Plan 2.Approve a transfer of up to $15 million from the Hydro Stabilization Reserve to the Supply Operations Reserve; 3.Approve a transfer of up to $5 million from the Electric Special Projects (ESP) reserve to the Supply Operations Reserve; 4.Approve an allocation of Cap and Trade funds up to 1/3 of REC revenue to the Cap and Trade Program Reserve to be spent on local decarbonization programs; 5.Approve amendments to the Electric Utility Reserves Management Practices, Section 6: Electric Special Projects (ESP) Reserve: 1.Change the date by which the funds for the ESP Reserve must be committed to the end of FY 2023, instead of by the end of FY 2017; and 2.Change the date by which any uncommitted ESP Reserve funds will be transferred to the Electric Supply Operation Reserve and the ESP Reserve closed to the end of FY 2027, instead of FY 2022. Staff Recommendation ~CITY OF ~PALO ALTO 9.c Packet Pg. 267 At t a c h m e n t : A t t a c h m e n t C : P r e s e n t a t i o n ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d 20 Staff requests that the Utilities Advisory Commission (UAC) recommend that the Council adopt a Resolution (Attachment A): 7.Approve an increase to retail electric rates E-1 (Residential Electric Service), E-2 (Small Non-Residential Electric Service), E-4 (Medium Non-Residential Electric Service), E-4 TOU (Medium Non-Residential Time of Use Electric Service), E-7 (Large Non- Residential Electric Service), E-7 TOU (Large Non-Residential Time of Use Electric Service) and E-14 (Street Lights) of 5% effective July 1, 2022; 8.Update the Export Electricity Compensation (EEC-1) rate to reflect current projections of avoided cost, effective July 1, 2022; 9.Update the Net Surplus Electricity Compensation Rate (E-NSE) rate to reflect current projections of avoided cost, effective July 1, 2022; 10.Update the Palo Alto Green program pass-through premium charge on the Residential Master-Metered and Small Non- Residential Green Power Electric Service (E-2-G), the Medium Non-Residential Green Power Electric Service (E-4-G), and the Large Non-Residential Green Power Electric Service (E-7-G) rate schedules to reflect current costs, effective July 1, 2022. Staff Recommendation (continued) ~CITY OF ~PALO ALTO 9.c Packet Pg. 268 At t a c h m e n t : A t t a c h m e n t C : P r e s e n t a t i o n ( 1 3 9 6 1 : F Y 2 0 2 3 E l e c t r i c F i n a n c i a l P l a n s a n d