Loading...
HomeMy WebLinkAboutStaff Report 2303-1165Item No. 1. Page 1 of 2 Utilities Advisory Commission Staff Report From: Dean Batchelor, Director Utilities Lead Department: Utilities Meeting Date: April 12, 2023 Staff Report: 2303-1165 TITLE Utilities Advisory Commission FY 2023 - 2024 Workplan RECOMMENDATION Staff Recommends the Utilities Advisory Commission Review and Approve the Utilities Advisory Commission's 2023-2024 Annual Work Plan, and Recommend the City Council Review the Work Plan and Provide Feedback BACKGROUND ANNUAL WORKPLAN AND PERFORMANCE MEASURES In accordance with the 2020 City Boards, Commissions, and Committees Handbook, each Board and Commission should prepare an annual work plan for proposal to the City Council by the second quarter of the calendar year. The Council will review the work plan and provide feedback annually at a dedicated City Council meeting. The annual report should include the results of the prior year’s plan. When applicable, the City Council would like to see metrics of community involvement and participation in meetings and activities included in the work plan. Council expects Boards and Commissions to work on items in the approved workplan. In addition, Council may refer additional items to the Boards and Commissions in response to new developments. Boards and Commissions should refrain from expending their time and that of the staff liaison on items that have not been approved by the City Council. If the Board or Commission would like to add an issue for review after an annual workplan has been approved by the City Council, a prompt request by the Board or Commission Chair to the City Council is required and the item will then be addressed by the City Council as a whole. ATTACHMENTS Attachment A: Utilities Advisory Commission FY 2023 – 2024 Workplan Item No. 1. Page 2 of 2 APPROVED BY: Dean Batchelor, Utilities Director Utilities Advisory Commission 2023-2024 Workplan Staff Liaison: Dean Batchelor, Director of Utilities Lead Department: Utilities About the Commission The Utilities Advisory Commission (UAC) is charged with providing advice and making recommendations on planning and policy matters, acquisition, development, rate-setting, operating budgets and related reserves, Capital Improvement Projects and financial review of electric, gas and water resources; joint action projects with other public or private entities which impact electric, gas or water resources; environmental implications of proposed electric, gas or water utility projects; and conservation and demand management. Additionally, the UAC is charged with providing advice on the acquisition, development and financial review of the dark fiber network and wastewater collection utilities. As a highly regulated industry, there may be matters not listed below that will be presented to the UAC in accordance with current or future (local, state or federal) legislative requirements. The Commission is composed of 7 members. Terms are for 3 years and commence on the first meeting in April. See Palo Alto Municipal Code (PAMC) Sections 2.23.010 (Membership), 2.23.030 (Term of Office), 2.23.040 (Officers), 2.23.050 (Purpose and Duties), and 2.23.060 (Meetings). Current Commissioners •Lauren Segal (Chair) – may change once the Commission is full •Vacant (Vice Chair) – set to select at the next fully seated Commission meeting •Lisa Forssell 3 •Phil Metz 4 •Vacant 5 – Greg Scharff may remain as a Commissioner until Council selects successors (PAMC 2.23.03) •Vacant 6 •Vacant 7 Mission Statement The purpose of the Utilities Advisory Commission shall be to advise the City Council on present and prospective long-range planning, policy, major program, and project matters relating to the electric, gas, water, wastewater collection, fiber optics utilities, and recycled water matters, and environmental implications of electric, gas or water utility projects, and conservation and demand management. The Utilities Advisory Commission shall have the following duties: •Advise the City Council on long-range planning and policy matters pertaining to: Joint action projects with other public or private entities which involve, affect or impact the utilities; Environmental aspects and attributes of the utilities; Water and energy conservation, energy efficiency, and demand side management; and Recycled water matters not otherwise addressed in the preceding subparagraphs; •Review and make recommendations to the City Council on the consistency with adopted and approved plans, policies, and programs of any major utility; •Formulate and review legislative proposals regarding the utilities, to which the city is a party, in which the city has an interest, or by which the city may be affected; •Review the utilities’ capital improvement programs, operating budgets and related reserves and rates, and the recycled water program, budget, rate, and thereafter forward any comments and recommendations to the finance committee or its successor or to City Council; •Provide advice upon such other matters as the City Council may from time-to-time assign. The Utilities Advisory Commission shall not have the power or authority to cause the expenditure of city funds or to bind the city to any written, oral or implied contract. Metrics of Community Involvement and Participation Between January 2022 and December 2022, the UAC held Twelve (12) hybrid meeting via In-Person/Zoom. The average community attendance was 2 (in-person) and 3 (zoom). Prior Year Accomplishments Heat Pump Water Heater (HPWH) Pilot: 400 customers have been signed up to participate 5 customers have had completed installs Advanced Meter Infrastructure (AMI) Beta and Electrification 353 gas customers have completed installs 359 water customers have completed installs 440 electric customers have completed installs Outage Management System (OMS) RFP issued on 3/2/2022 Contract approved by City Council on 9/27/2022 Anticipate install/integration complete by the end of Q2 FY24 CA Renewable Energy Credits (REC's) Yielded $1.75 million in net revenue in calendar year 2022 Approved by Council on 12/12/2022 to continue the program and return to the UAC and Council in 2025 STANDING TOPIC 1:Annual Budget - Rate changes to Water, Gas, Electric, Wastewater collection, and Fiber services. BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW / COUNCIL-APPROVED The community will have a better understanding of the rates and why they are set at the levels they are being charged. Rates are reviewed annually and each rate change is determined by the COSA reports. UAC review is in February, FCM review is in April and CCM approval is in June Staff time, Legal team review time, Consultant time to create the COSA reports. Council approval of rate changes and Utilities budget N/A HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED POLICY UPDATE Rates are always a high priority. The change has an impact on the community and economy.N/A N/A STANDING TOPIC 2: Water Supply: Water infrastructure and potential future sources of water supply. This includes recycled water, demand management programs, grey water, treatment efforts, and use of effluent. BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW / COUNCIL-APPROVED The benefit to the community is to have ample water sources and supply for basic uses and when needed in the event of a drought or other water reduction events or population shifts This is not a single effort or project; however, a year-round effort Staff time, Legal team review time, Consultant time for development of the One Water Plan which is a holistic 20-year water portfolio Council approval of the One Water Plan which includes adaptable, dynamic, water supply portfolios. N/A HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED POLICY UPDATE Having knowledge of where the City's water supply is coming from and how we maintain that supply is a maintained priority. N/A N/A STANDING TOPIC 3: Electric Supply: Consider updates to the electric supply portfolio, environmental impacts of the electric supply portfolio, electric infrastructure, electrification, and issues relating thereto. BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW / COUNCIL-APPROVED Reliability for customers, health benefits, and clean energy responsible for the vast carbon reduction the City has achieved over the past decade This is an ongoing regularly monitored effort and does not have a start or completion time Approved budget, staff time, legal review time, consultants as needed, and technology Release of RFP for more renewable energy supply options in the Integrated Resource Plan (IRP). Have the IRP near completion to present to the UAC for review and approval. Maintaining the zero emissions portion of the portfolio and carbon neutral plan. N/A HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED POLICY UPDATE The health and well being of the community is a high priority for Council and Utilities N/A N/A STANDING TOPIC 4: Gas Supply: Consider aspects of the gas infrastructure and supply portfolio; environmental impacts of the gas portfolio such as the carbon offset program. BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW / COUNCIL-APPROVED Gas is a type of energy used to provide some residence and businesses in Palo Alto with heat for their facilities and some cooking appliances. This is not a single effort or project; however, a year-round effort Staff time, Legal team review time, Consultant time when necessary Utilities on average are 10% below PG&E's rates year round N/A HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED POLICY UPDATE The health and well being of the community is a high priority for Council and Utilities N/A N/A STANDING TOPIC 5: Utilities Capital Improvement Programs (CIP): Discuss and advise on CIP projects. BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW / COUNCIL-APPROVED There are multiple CIP's throughout the Utilities, each with their own benefits to the City and the community from rebuilding the water reservoirs, repairing and replacing sewer lines or water mains, maintaining street lights, building out the fiber backbone, upgrading and replacing the electric and gas systems, upgrading the meter system, and installing a new outage management system(*) Utilities has multiple projects in their Council approved CIP budget. Most of these projects are multiyear . •Anticipate install/integration complete by the end of Q2 FY24 Staff time, Legal review time, Procurement time for setting up contracts, contractors for work completion •IT time •Staff time Utilities CIP success is completion of the project within the timeline that was approved by Council. •To increase outward communication to community N/A HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED POLICY UPDATE Maintaining quality of life for the community creates the priority for Utilities projects N/A N/A STANDING TOPIC 6: Reliability and Resiliency: Ongoing evaluations and discussions regarding the reliability and resiliency of the utilities. BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW / COUNCIL-APPROVED This matter encompasses a number of situations including but not limited to the S/CAP program and power outages. The benefit of any of the reliability or resiliency projects is to support the City and community now and into the future with reliable, resilient and safe connections and provisioning of water, electricity, fiber and natural gas These programs and projects are year- round and do not have a beginning or an end. For example, the S/CAP is projected to accomplish its goal by 2030 Budget approval, staff time, additional staff, and some use of consultants Maintaining a high level of efficient, safe, and reliable services with an emphasis on moving forward with a pilot program of converting homes to electric. YES HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED POLICY UPDATE The S/CAP is a Council priority and therefore a High priority for the Utilities Advisory Commission N/A N/A STANDING TOPIC 7: Legislative Initiatives: The Utility tracks many local, state and federal bills that touch on utilities. Should any new laws, regulations, or ordinances be proposed or pass during the year, the UAC may need to discuss the implications. BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW / COUNCIL-APPROVED Staff tracks the possible changes in laws and regulations and presents the proposed changes to the UAC for review and consideration to the Council. Legislature meets throughout the year and possible changes can occur at any point that affect utilities Staff time, travel, and legal review time This is a non-measurable project State Mandated HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED POLICY UPDATE N/A The level of priority is based on the particular legislation being proposed and how it affects the regulated utilities N/A STANDING TOPIC 8: Council Driven Initiatives: The UAC will address any matter assigned to it by the City Council. BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW / COUNCIL-APPROVED The UAC is made up of a diverse group with insight of the innerworkings of and vast knowledge in the utilities arena. Timeline will be addressed once assigned UAC, Staff and legal review time Council approval of completed task YES HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED POLICY UPDATE Typically, when Council requests a review of an item it is considered a priority N/A N/A FY2024 Topic 1: S/CAP Support: Discuss community engagement, technology (current & emerging), finance, and community scaling of S/CAP plans to meet the City’s goals for sustainability and climate action. This includes electrification efforts, possible code modifications, potential full or partial retirement of the gas distribution system, and electrification of gas appliances. It also includes permitting and inspection processes for customers wishing to upgrade panels, electrify appliances, or install solar PV, energy storage, and/or EV charging systems. BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW / COUNCIL-APPROVED UAC expertise will help the Council S/CAP Committee make progress on achieving S/CAP goals with benefits to reducing the impacts of climate change. Ongoing support to the S/CAP Committee Staff time The development of clear plans for building electrification, including concrete improvements to the utility or permitting processes resulting from UAC actions. YES HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED POLICY UPDATE Support S/CAP Committee goals to develop plans and improve processes for building electrification Discussions of other forms of emissions reduction beyond building electrification YES FY2024 Topic 2: Advanced Metering Infrastructure Project: Discuss the launch and deployment of the utility’s AMI project. BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW / COUNCIL-APPROVED Empower customers to more efficiently utilize utility supplies, facilitate customer adoption of distributed energy resources (DER) such as solar photovoltaics, energy storage, and electric vehicles, and enable the timely detection of water leaks The initial small-scale testing of meters will take place over 12 months between CYQ3- 2022 to CYQ2-2024. The full rollout is scheduled to commence during CYQ3- 2023 and expected to be completed by CYQ4-2024, according to the current timeline Staff, Legal, and Contractor time and budget, Implementing the fully deployed AMI system YES HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED POLICY UPDATE Having a fully implemented system provides time of use rates, identifies gas and water leaks, restores outages quicker and more efficiently, enables energy efficiency for residents N/A N/A FY2024 Topic 3: Electric Integrated Resource Plan BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW / COUNCIL-APPROVED Long term supply planning A report is required every 5 yrs., the most recent due date is December 31, 2023 Staff and legal review time and budget State approved report YES HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED POLICY UPDATE N/A Mandated by the state energy commission N/A FY2024 Topic 4: One Water Plan BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW / COUNCIL-APPROVED Community will have a 20 – year adaptable roadmap for implementation of prioritized water supply and conservation portfolio alternatives that can be used as a water supply plan. For Council approval in Fall 2023 Staff time, budget for consultant time, Legal team review time Council approval of the One Water Plan which includes an adaptable, dynamic water supply portfolio. N/A HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED POLICY UPDATE The One Water Plan will serve as a long-term guide to prepare the City’s water supply for future uncertainties like changes in population, multi-year drought, and climate change. N/A N/A FY2024 TOPIC 5: Undergrounding: Discuss the progress and potential acceleration of undergrounding electric infrastructure. BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW / COUNCIL-APPROVED Reduces the impact to visual nuisances, increased reliability, especially during severe weather, safer for staff and the public [I might leave off the visual nuisance portion in light of the many discussion with the Green Acres group re above ground transformers.] Districts are designated for undergrounding and have been selected based on the age of the system in place Staff time, contractor time, and budget Removal of overhead lines in the designated districts YES HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED POLICY UPDATE Because of the impact on safety and reliability N/A N/A FY2024 Topic 6: Cybersecurity: Discuss issues related to the cybersecurity of utility operations. BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW / COUNCIL-APPROVED Protect and secure Utility data at risk and in transit. Utilities created a SCADA cybersecurity team to set a policy to prevent outside attempts to infiltrate our systems. Ongoing IT staff, Utility staff, budget Zero data loss, zero infrastructure damage N/A HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED POLICY UPDATE Due to the sensitive nature of the Utilities, cybersecurity protects against theft, destruction, economic impacts, public health risks, financial loss (ransomware), and data (community, commercial and residential) information available in our systems, protecting it from attacks is critical N/A N/A FY2024 Topic 7: Water Quality: Discuss community concerns with water quality BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW / COUNCIL-APPROVED CPAU regularly collects and tests water samples from reservoirs and designated sample points throughout the city. Ongoing Staff time CPAU customers are fortunate to have access to high quality water flowing from the faucet - the pristine snowmelt from Hetch Hetchy State Water Resource Control Board regulated HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED POLICY UPDATE N/A Palo Alto maintains high quality control with frequent testing of its water to maintain a higher than state standard N/A FY2024 Topic 8: Tesla Project - $10M Upgrade to Hanover Substation BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW / COUNCIL-APPROVED Upgraded substation increases capacity to facilitate electrification process. Start October 2023, completion anticipated end of 2nd quarter 2024 CPAU design review (1 FTE), construction resource manager (FTE), engineering support and inspection (1FTE each) 2 Fully upgraded 50 mva transformers N/A HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED POLICY UPDATE Electrification and an increase of load by 30-50 mva.N/A N/A FY2024 Topic 9: Sanitary Sewer Replacement Project 31 BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW / COUNCIL-APPROVED Replacement of aging infrastructure to prevent sewer back ups, sink holes, and lessen the need to take up newly paved streets Construction start July 2023, anticipated duration is 9 months Utility staff, budget Changed out 11,000 linear feet of sewer main YES HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED POLICY UPDATE Due to the timing of collaboration with Caltrans repaving work on El Camino Real N/A N/A FY2024 Topic 10: Heat Pump Water Heater customer installation program BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW / COUNCIL-APPROVED Reduces the use of natural gas thereby reducing carbon emissions and improving indoor air quality December 31, 2023 Staff, Consultant, and Contractor time, budget, and S/CAP Committee time 1,000 HPWH’s installed by the end of 2023 YES HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED POLICY UPDATE This is the 1st program for the community to start on the achievement to electrification by eliminating most gas appliances in CPA which is needed to reach the S/CAP 80/30 goals N/A S/CAP policy FY2024 Topic 11: Electric Rate Design Review BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW / COUNCIL-APPROVED Evaluate cost of service and set rates accordingly and in alignment with policy objectives wherever possible. Anticipated completion December 31, 2023 Staff time, budget, legal review. And possible additional resources completion of study and adoption of any rate changes. N/A HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED POLICY UPDATE Because rate design can impact customer investment choices related to electrification N/A N/A FY2024 Topic 12: Gas Supply Hedging in the Winter months BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW / COUNCIL-APPROVED Lowers the risk to the city by decreasing the volatility of extreme high market pricing that would be passed on to the customer UAC approval in August Council approval in September Completion by October Staff and Consultant time, and budget Execution of hedges for the appropriate winter months, if it makes sense Council approval needed HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED POLICY UPDATE Due to the need to have this implemented in order to execute the transactions in October for the winter months N/A N/A FY2024 Topic 13: Gas Rate Design Review BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW / COUNCIL-APPROVED Gas rates that are cost-based, constitutionally compliant and with an eye toward competitiveness with gas rates in neighboring communities. Council approval in September 2023 Staff time, budget for consultant time, legal review time. Gas rates that are competitive with neighboring communities across customer classes. N/A HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED POLICY UPDATE Rate impacts on Palo Alto residents and businesses.N/A N/A