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HomeMy WebLinkAboutStaff Report 2308-1934Item No. 4. Page 1 of 6 Utilities Advisory Commission Staff Report From: Dean Batchelor, Director Utilities Lead Department: Utilities Meeting Date: September 6, 2023 Staff Report: 2308-1934 TITLE Overview of Sustainability and Climate Action Plan (S/CAP) Activities To-Date and Discussion of Reliability and Resiliency Strategic Plan Policy Guidelines RECOMMENDATION This is a discussion item and no Utilities Advisory Commission (UAC) recommendation is requested EXECUTIVE SUMMARY On June 5, 2023 the City Council adopted the S/CAP and the 2023 – 2025 S/CAP Work Plan (Staff Report 2303-1158)1. Some background on the activities leading to adoption of these documents is included below, as well as an overview of City programs currently in progress that contribute to achieving the S/CAP goals, Work Plan items relevant to the City’s utilities, and an overview of how the Work Plan is being implemented. The S/CAP Work Plan includes a work plan item to complete an evaluation of the reliability and resiliency of the electric infrastructure and systems necessary to support planned electrification (1.B. Reliability and Resiliency Strategic Plan, see page 6 of the Work Plan). The UAC will be the primary oversight body involved in this study. On June 5, 2023, as part of the Work Plan, Council adopted the Policy Guidelines for Reliability and Resiliency Strategic Plan Development (Appendix D of the Work Plan, page 40, also included in Attachment A). Staff intends to develop the Reliability and Resiliency Strategic Plan in line with these Policy Guidelines. This staff report describes how staff tentatively intends to proceed. Staff is seeking feedback from the UAC on its implementation plan and any technologies, processes, or policies that it wants staff to ensure are included in the plan, consistent with the policy guidelines. 1 Staff Report 2303-1158 Item 14 https://cityofpaloalto.primegov.com/meeting/document/1906.pdf?name=Item%2014%20Staff%20Report Item No. 4. Page 2 of 6 BACKGROUND In April 2016, City Council adopted the goal of reducing GHG emissions 80 percent below 1990 levels by 20302 (the “80 x 30” goal), and in October 2022 Council adopted the ambitious goal of achieving carbon neutrality by 20303. In November 2016 Council adopted the S/CAP Framework4, which has served as the road map for achieving Palo Alto’s sustainability goals. In December 2017, Council accepted the 2018-2020 Sustainability Implementation Plan “Key Actions” as a summary of the City’s work program5. In early 2020, the City launched an S/CAP update to determine the goals and key actions needed to meet its sustainability targets, including the 80 x 30 goal. While GHG emissions reduction is not the only goal of the S/CAP, it is the major one. On October 3, 2022 the Council accepted the Goals and Key Actions recommended by the S/CAP Committee. Staff began California Environmental Quality Act (CEQA) review of the S/CAP based on these Goals and Key Actions. In parallel, the 2023-2025 Work Plan was reviewed by the Council Ad Hoc S/CAP Committee and Working Group recommended approval to Council. On June 5, 2023 the S/CAP was approved, including the Goals and Key Actions, along with the CEQA review and the 2023-2025 S/CAP Work Plan. Attachment B provides a detailed history of the S/CAP to date. The City already operates a variety of programs and projects that further the current S/CAP goals. These include programs central to reducing GHG emissions, including active transportation programs, the purchase of renewable energy, and programs to help residents electrify their homes and vehicles. One prominent program is the Advanced Heat Pump Water Heater Pilot Program. These programs have been operated using existing City staff augmented by additional positions approved by Council in the FY 2022 Mid-Year Budget Amendment Ordinance and the FY 2023 Budget. The programs use a variety of funding sources including the General Fund, utility funds, grants, and dedicated revenue sources such as Low Carbon Fuel Standard revenues and revenues related to the City’s participation in the State’s Cap and Trade program. The implementation of these programs is currently a cross-departmental effort led by the Office of Sustainability, part of the City’s Public Works Department. The Utilities Department is heavily involved in the community-focused aspects of the Climate Action section of the plan. As a result of various City-led initiatives, programs, and activities focused on climate change and sustainability, by the end of 2021 Palo Alto reduced GHG emissions an estimated 53.9 percent from the 1990 baseline, despite a population increase of 19.5 percent during that same time. 2 Staff Report 6754 Item 10 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes- reports/reports/city-manager-reports-cmrs/year-archive/2016/id-6754.pdf 3 Staff Report 14720 Item 9 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas- minutes/city-council-agendas-minutes/2022/20221003/20221003accsm-amended-presentations.pdf#page=131 4 Staff Report 7304 Item 9 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas- minutes/city-council-agendas-minutes/2022/20221003/20221003accsm-amended-presentations.pdf#page=131 5 2018-2020 Sustainability Implementation Plan https://www.cityofpaloalto.org/files/assets/public/sustainability/policies-and-plans/2018-2020-sustainability- implementation-plan-with-council-amendments.pdf Item No. 4. Page 3 of 6 ANALYSIS Work Item 1.B. (Reliability and Resiliency Strategic Plan) in the 2023-2025 S/CAP Work Plan6 is to develop a Reliability and Resiliency Strategic Plan using the Policy Guidelines in Appendix D of the Work Plan7. These Policy Guidelines include the following objectives: •Maintain and improve electric system reliability •Improve utility outage communication •Prepare the electric system for increased penetration of solar, batteries, electric vehicles and chargers, electrified building equipment, and similar new technologies •Optimize the use of local grid capacity in a cost-effective way •Promote technologies and behaviors that contribute to the efficient and reliable operation of the statewide and local electric system The Policy Guidelines also includes a number of concepts to be explored as part of the Strategic Plan. Based on these objectives and concepts staff expects to divide the work on the Reliability and Resiliency Strategic Plan as follows, with the results of all tasks summarized in a final document: Task 1: System Reliability, Outage Response, and Capacity Building This task includes evaluating measures to improve system reliability and outage communication and prepare the electric grid for new technologies and widespread electrification: •Addressing utility workforce issues •Replacing aging infrastructure as part of a grid modernization plan •Installing additional switching and other solutions to improve reliability and recovery from outages as part of a grid modernization effort •Improving utility outage management system and communications protocol •Increasing transformer capacity to accommodate higher loads •Continuing to pursue a second transmission line and other grid-level resiliency strategies. These types of issues are already being addressed through workforce planning efforts, the grid modernization effort, and other efforts. The Strategic Plan would summarize these efforts and identify any gaps and potential mitigations. Task 2: New Technology Integration 6 2023-2025 S/CAP Work Plan, page 6 7 2023-2025 S/CAP Work Plan, page 40, Policy Guidelines for Reliability and Resiliency Strategic Plan Development Item No. 4. Page 4 of 6 In this task staff would perform an analysis on what is needed to integrate new technologies and prepare the electric grid for widespread vehicle and building electrification. The results of this analysis will be integrated into the Reliability and Resiliency Strategic Plan. This analysis is already in progress and is expected to be completed in fall of 2023. It will include: •An assessment of the grid impacts of high penetrations of distributed energy technologies and any additional equipment that would need to be added to the electric distribution system to accommodate them. •A review of customer demand management technologies and the potential distribution system benefits and impacts. •A review of utility scale technologies to reduce peak system load and provide other distribution system benefits. Task 3: Customer and Neighborhood Resiliency Several of the concepts listed in the Policy Guidelines address customer and neighborhood resiliency. Staff’s goal in the Reliability and Resiliency Strategic Plan would be to review existing literature on these types of solutions and identify possible projects for future follow-up and the resources that would be needed to analyze them. Whether to move forward with any individual project would require Council policy guidance (with recommendations from the UAC): •Technologies like vehicle to load or vehicle to home for home resiliency •Equity in resiliency – how to provide resiliency to income-qualified residents •Neighborhood-level resiliency solutions such as microgrids and local utility-scale battery storage •Community emergency center resiliency •Mobile battery strategies, such as large electric vehicles that could double as emergency resiliency solutions Task 4: Efficient Electrification And lastly, part of the Reliability and Resiliency Strategic Plan will be a review of low-wattage electrification solutions and discussion of business process and regulatory changes that might be needed to accommodate them, including any resource needs. This will include both technological solutions (e.g. smart panels, right-sizing appliances, circuit pausers) and behavioral solutions (e.g. encouraging equipment use at particular times of day, setting equipment for efficiency, setting vehicles to charge at particular times or at lower rates of charge) Timelines The tasks would be completed on the following timelines: Item No. 4. Page 5 of 6 •Task 1 (System reliability and outage management): In progress, staff would summarize progress and identify any gaps by the end of 2023 •Task 2 (New technology integration): In progress, staff would complete the analysis by early 2024 •Task 3 (Customer and neighborhood resiliency): Study to be completed by fall of 2024. •Task 4 (Efficient electrification): Efficient electrification strategies to be identified and programs / outreach implemented by fall of 2024. • Staff is looking for feedback from the UAC on staff’s approach to implementation of this work plan item. Possible questions to consider may be: •Is staff’s implementation in line with the Policy Guidelines? •Are the right topics included? Is there a need for any additions, deletions, or clarifications? •Are there any technologies, processes, or policies that UAC wants staff to ensure are included in the plan? •Are the timelines appropriate? FISCAL/RESOURCE IMPACT The total staff time and non-salary budget required to complete the Reliability and Resiliency Strategic Plan is estimated to be 0.7 FTE and $80,000 to $130,000, respectively. This will be fulfilled using previously approved budgets and staffing. Projects to fulfill the goals of the Reliability and Resiliency Strategic Plan require more resources, much of which is already budgeted. For examples, grid modernization and the utility outage management system updates require significant staff time and capital / operating expenditures, some of which is already budgeted and some of which will be included in future years. Other items are not yet budgeted and would require additional resources to complete (e.g. resiliency projects identified in Task 3). The resources needed to complete the Reliability and Resiliency Plan include: •Task 1 (System reliability and outage management): This includes a minimal amount of staff time to summarize the following efforts already budgeted and in progress: • Workforce recruitment and retention efforts • The grid modernization, projected to cost up to $300 million and requiring about 5-8 FTE annually over seven years, which includes replacement of aging infrastructure that would be required regardless of electrification ($100 million to $150 million based on very approximate estimates), expansion of capacity to increase distribution system capacity to accommodate electrification, and addition of various systems to improve reliability. Item No. 4. Page 6 of 6 • Utility outage management system updates (a project expected to cost $630,000, including five years of annual maintenance, and requiring 0.65 FTE up front and 0.25 FTE ongoing). •Task 2 (New technology integration): $72,000 in consulting work and 0.1 FTE. This would cover the analysis, not any subsequent implementation. •Task 3 (Customer and neighborhood resiliency): This section is still being scoped, but is expected to cost up to $50,000 to $80,000 and 0.25 FTE in staff time. This is just to do the plan. Resources for project implementation would require additional salary and non- salary budgets, which would be estimated as part of this task. •Task 4 (Efficient electrification): This review is expected to cost up to $30,000 to $50,000 and take up to 0.25 FTE in staff time STAKEHOLDER ENGAGEMENT The 2023-2025 S/CAP Work Plan was reviewed by the Council Ad Hoc S/CAP Committee and a variety of stakeholders working with the committee. Staff expects to solicit stakeholder feedback on Tasks 3 and 4 of the Reliability and Resiliency Strategic Plan as they are developed. When the Strategic Plan is complete it will require public communications and community support. Electric system reliability and resiliency are routine topics of concern in public discussions of electrification, and the measures identified in these studies are expected to provide information that can be used in these discussions. Work on efficient electrification will also inform future program design and communication of efficient electrification solutions to the community. ENVIRONMENTAL REVIEW Development of a Reliability and Resiliency Strategic Plan is exempt from the California Environmental Quality Act (CEQA) because it can be seen with certainty that completing a study will not result in any environmental impacts. ATTACHMENTS Attachment A: Reliability and Resiliency Strategic Plan Guidelines Attachment B: Timeline of the Sustainability and Climate Action Plan to-date Attachment C: Presentation AUTHOR/TITLE: Jonathan Abendschein, Assistant Director of Resource Management