HomeMy WebLinkAbout1998-05-19 City Council (9)BUDGET
’98- ’99 City of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
ATTENTION:FINANCE COMMITTEE
FROM:,_ CITY MANAGER DEPARTMENT: UTILITIES
DATE:MAY 19,1998 CMR:237:98
SUBJECT:PROPOSED ELECTRIC PUBLIC BENEFIT PROGRAMS
FOR FISCAL YEAR 1998-99
REPORT IN BRIEF
This report requests that Council approve new Public Benefit Programs in accordance with
Assembly Bill 1890. AB 1890 requires municipal electric utilities to commit 2.85 percent
of their revenues for Public Benefit Programs. The total amount budgeted for FY 1998-99
is $1.773 million, and any unspent funds will be returned to a Public Benefits Reserve i.u the
Electric Fund.
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RECOMMENDATION
Staff recommends that Council approve $1.773 million for the proposed Public Benefit
programs. A description of these programs is shown in Attachment B.
BACKGROUND
California State AB 1890 requires Mlmicipal Utilities to collect a non-bypassable electric
charge, beginning January 1, 1998, to be used for Public Benefit Programs. AB1890
establishes four categories of qualifying programs:
Cost-effective demand-side management programs (promoting electrical
energy efficiency)
New investment in renewable energy resources (power from solar
photovoltaics, wind, small hydro, biomass and geothermal resources)
Research, development and demonstration programs (promotion of electrical
energy efficiency and demonstration technologies that are not yet mature for
the market)
Low income services (such as Electric Rate Assistance).
On July 1, 1997, the City of Palo Alto Utilities unbundled charges on the Utility bill,
including an electric charge for Public Benefit Programs. For FY 1998-99, the Public
Benefits Charge is estimated to be 0.16 cents/kwh to meet AB 1890 requirements. The
.current City Council-authorized funding levels for gas and water demand side management
programs will not increase.
DISCUSSION
The table below shows the allocation range for each proposed program category. The ranges
allow funding flexibility between programs, but total annual expenses for all programs shall
not exceed the $1.773 Million budgeted for FY 1998-99. Attachment B shows the details of
each program.
CMR: 237:98 Page 2 of 11
Allocation in $ $300,000- $900,000 $100,000-$1,000,000 $122,000 - $325,000 $20,000- $50,000
Allocation in % 17% - 51%6%-56%7%-18%1%-3%
Current
Programs
Residential education,
Commercial/Industrial
audits, new
construction design
review
none Qualifying EPRI and
ESource dues
(for research and
development of energy
efficiency and generation
projects)
Rate Assistance
Program (RAP)
New Programs
(in addition to
current
programs) "
Expanded Residential
education, Green
Business program, and
Industrial/Commercial
incentives
Improvements to
small hydro,
and investments in
new renewables
Electric vehicle program,
and local demonstration
of photovoltaic systems
Expanded
Rate Assistance
Program
New programs were screened with the criteria listed below. The criteria has been developed
basedon staff’s interpretation of AB1890. The criteria was also developed in accordance
with the California Municipal Utilities Association’s AB1890 Public Benefit’s Program
Guidebook.
Public Benefit nro~rams shall:
~Offer local benefits serving all market segments that responds to customer’s interests
~Offer environmental benefits
~Provide consumer education and public relations benefits
~Provide support for technologies to overcome barriers to commercial adoption
~Support partnerships and avoid redundancy with other existing programs
Demand Side Management programs shall:
Be cost effective
Renewable Ener_wy programs shall:
Add new renewable resources to the system power mix
Research, Development and Demonstration programs shall:
CMR: 237:98 Page 3 of 11
Advance science or technology not adequately provided by current market
Have commercial potential
Provide customer education benefits with local demonstration projects
Improve the City of Palo Alto Utilities’s position for renegotiating the Western Area
Power Administration power contract (which favors Photovoltaic resources)
Low Income programs shall:
Expand level of benefits to low income clients
RESOURCE IMPACT
AB 1890 requires that funds be collected beginning on January 1, 1998, but does not require
that funds be spent in a particular time period. If programs are not fully implemented in a
budget year, funds will remain in a dedicated Public Benefits Reserve for future use. The
establishment of a Public Benefits Reserve is one of the Utilities Reserve Policy
recommendations for the 98-99 budget. Funding of the Public Benefit Program is included
in the FY 1998-99 budget.
POLICY IMPLICATIONS
Approval of the proposed Public Benefit Programs will implement existing policies.
ENVIRONMENTAL REVIEW
The approval of these Public Benefit Programs does not constitute a project under the
California Environmental Quality Act (CEQA), and therefore no environmental assessment
is necessary.
ATTACHMENTS
Attachment A:
Attachment B:
AB 1890 Section on Public Benefit Programs for Municipal Utilities
Public Benefit Program Descriptions
PREPARED BY:Lindsay Joye, Marketing Engineer
Tom Habashi, Assistant Director of Utilities, Resource Management
DEPARTMENT HEAD APPROVAL:
EDWARD ~. MRIZ~EK ’
Director of Utilities
CITY MANAGER APPROVAL:
HARRISON
Assistant City Manager
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ATTACI-IMENT A: AB 1890 SECTION ON PUBLIC BENEFIT PROGRAMS FOR
MUNICIPAL UTILITIES
AB1890
385. (a) "Each local publicly owned electric utility shall establish a nonbypassable, usage
based charge on local distribution service of not less than the lowest expenditure level of the
three largest electrical corporations in California on a percent of revenue basis, calculated
from each Utility’s revenue requirement for the year ended December 31, 1994", "in any or
all of the following:
Cost-effective DSM services to promote energy efficiency and energy conservation.
New investment in renewable energy resources and technologies consistent with
existing statutes and regulations which promote those resources and technologies.
Research, development and demonstration programs for the public interest to advance
¯ science or technology which is not adequately provided by competitive and regulated
markets.
Services provided for low-income electricity customer, including but not limited to,
targeted energy efficiency service and rate discounts.
CMR: 237:98 Page 5 of 11
ATTACHMENT B: PUBLIC BENEFIT PROGRAM DESCRIPTIONS
Demand Side Management Programs
I . ICAP-
DESCRIPTION:
Market Segment:
ANNUAL BUDGET:
OBJECTIVE:
START DATE:
PROJECT MANAGER:
INDUSTRIAL COMPREHENSIVE AUDIT PROGRAM
ICAP offers comprehensive consulting services to identify efficiency
measures. Studies are co-fimded with customer. Incentives for
implementation are available to make projects cost effective. Program
benefits are allocated to each Key customer up to 25% of their Public
Benefit charge contribution.
Key and Major Commercial and Industrial customers
$240,000- $600,000
10 Studies and 10 implemented customer projects each year
The audit component of the program began in 1997.
component will begin 7/98.
LindsayJoye
The incentive
2. NEW
DESCRIPTION:
CONSTRUCTION DESIGN REVIEW PROGRAM
Program offers design assistance and building commissioning services
for new construction projects. The City of Palo Alto Utilities’s consultant
joins customer’s design team to optimize the building’s energy
performance.
MARKET SEGMENT:Large Non-residential construction projects
ANNUAL BUDGET:$20,000- $100,000
OBJECTIVE:5 projects per year
START DATE:The program began in 1997.
PROJECT MANAGER:Lindsay Joye
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3.CoNsUMER EDUCATION PROGRAM
DESCRIPTION :Offers educational fact sheets, billstuffers, and outreach services
(participation in Chamber of Commerce events, neighborhood
association presentations and work with community groups)
MARKET SEGMENT: Residential and Small business
ANNUAL BUDGET: $20,000- $100,000
START DATE:Consumer energy efficiency education is an ongoing activity.
PROJECT MANAGER:Linda Clerkson
4.BAY AREA GREEN BUSINESS RECOGNITION PROGRAM
DESCRIPTION:Participate in the County of Santa Clara’s program for establishing
"Green Business" standards in energy efficiency. The program helps
local businesses demonstrate they meet minimum standards in energy &
water efficiency, solid waste reduction and pollution reduction.
Qualifying participants receive the "Green Business" certification and
promotional materials. Electric Public Benefit fimds shall be combined
with water and gas DSM funds to address efficiency opporttmities in all
commodities.
MARKET SEGMENT: All businesses
ANNUAL BUDGE: $20,000- $100,000
START DATE:12/98 - Program is dependant on other cities’ participation. Coordination
with Public Works is required for the non-Utilities related standards.
’PROJECT MANAGER:Tom Auzenne
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Renewable Energy Programs
I .IMPROVEMENTS TO EXISTING RENEWABLE GENERATORS
DESCRIPTION:The following 3 projects list potential enhancements to Northern California
Power Agency’s (NCPA) existing generation facilities. The renewable
enhancement projects would be initiated through the Generations/Operations
business unit board. Palo Alto’s portion of the project costs is dependant on
the other NCPA participants.
Replace existing malfunctioning McKays micro turbine and combined
generator unit (500 KW total, 100 KW The City of Palo Alto Utilities’s share).
The City of Palo Alto Utilities’s portion of the estimated project cost =
$100,000 - $500,000 (approximately 3.5 Cents / kwh ).
Replace and/or upgrade New Spicer Meadow 5 MW transmission and
transformer. The City of Palo Alto Utilities’s portion of the estimated project
cost = $200,000- $900,000 (approximately 3.5 Cents/kwh).
Develop cloud seeding program for the New Spicer watershed. The City of
Palo Alto Ufilities’s portion of the estimated project cost = $50,000 -$400,000
up front and $40,000 - $65,000/year (approximately 3.0 Cents / kwh ).
ANNUAL BUDGET:
START DATE:
PROJ ECT MANAGER :
$50,000 - $1,000,000
To be determined, depending on the Northern California Power Agency
Generations/Operations board’s action.
Tom Kabat
2.PURCHASE OF QUALIFYING RENEWABLE ENERGY RESOURCE OUTPUT
DESCRIPTION:The program would purchase qualifying renewable energy from NCPA
or other Green suppliers. Portfolio shall have no more than 50% system
power to be certified as "Green" (using the definition established by the
Center of Resource Solutions)
MARKET SEGMENT:All
ANNUAL BUDGET: $10,000 - $100,000 (depends on the status of the NCPA enhancement
projects)
CMR: 237:98 Page 8 of 11
START DATE:7/98
PROJECT MANAGER:Tom Kabat
Research Development and Demonstration Programs
I.NEW PHOTOVOLTAIC DEMONSTRATION PROJECT(S)
DESCRIPTION:Provides grants for one or more local Photovoltaic
demonstration projects. Grants shall be awarded using an RFP
selection process for the best demonstration projects with
environmental and public education benefits leading to
commercialization. Grants may be combined with other agency
programs such as Western Area Power Administration’s
PhOtovoltaic grant program ($1.O0/Watt).
MARKET SEGMENT: Public buildings, residential and commercial facilities.
ANNUAL BUDGET: $50,000- $200,000
START DATE:7/98 - Begin the RFP process.
PROJECT MANAGER:Chris Barbee
ELECTRIC VEHICLE (EV) PLAN FOR PALO ALTO
DESCRIPTION :The program would promote Electric vehicles (EV’s) using the
following approaches: ,~
EV’s for the City/Utilities: City will lease two or three EV
vehicles to be primarily used by our Utility Marketing Staff.
Currently, our customer reps have access to a passenger car, a
mini-van, and a pick-up track. Most likely, the passenger car
and the mini-van will be replaced by leased vehicles. Leasing
Cost: $12,000 to $15,000.
EV’s for the Community: City will provides grants for one or
more local organizations to lease EV’s. Grants will be awarded
through a selection process for the best demonstration with local
environmental and public education benefits. Grants may be
combined with other agency programs, such as Bay Area Transit
Information Project by Bay Area Air Quality Management
District (BAAQMD). Grants Available: $35,000 to $80,000
CMR: 237:98 Page 9 of 11
Palo Alto Electric Infrastructure Development Plan: City will
initiate a infrastructure development action plan with the
assistance of an expert which will include equipment, service,
and charging stations/outlets necessary for proper operation of
the vehicles proposed under "EV’s for the City/Utilities". Cost:
$5,000 - $10,000
MARKET SEGMENT:
ANNUAL BUDGE’r: $52,000- $105,000
START DATE:7/98 - Begin infrastructure plan, and selection process for the grants. The
City vehicles will be leased as soon as the program plan is approved and
money is available.
PROJECT MANAGER:Ceyda Can
3. MEMBERSHIP ~N EPRI
DESCRIPTION:EPRI’s Customer Systems provides Utility clients with R&D services for
DSM programs. The City of Palo Alto Utilities’s subscribed targets
include: mass markets/residential, office, educational/public facilities,
small business, lodging and health care. Deliverables include Information
Products (technical reports, guidebooks, case studies), Resource center
and hotline for inquiries, Analytical tools (software), Market
segmentation analysis and Tailored collaboration demonstration projects.
MARKET SEGMENT:All
ANNUAL BUDGET: $12,000
START DATE:Membership in EPRI is an ongoing activity.
PROJECT MANAGER:Ceyda Can
4. MEMBERSHIP ~N ESOURCE
DESCRIPTION:ESource is the premier resource for efficient end use technologies.
Membership benefits include: Technology Atlas, reports and bimonthly
CMR: 237:98 Page 10 of 11
updates, Strategic Issues Papers, Referral service, and Online database
of ESP Intelligence.
MARKET SEGM ENT:~I
ANNUAL BUDGET; $8,000
START DATE:Membership in ESource is an ongoing activity.
Lindsay JoyePROJECT MANAGER:
Low Income Programs
RATE ASSISTANCE PROGRAM (RAP)
DESCRIPTION:Provides a 15% electric rate discount to qualifying low income residents.
Current participation is $18,000 per year. Potential expansions to the
program include: increasing the rate discount amount to 20% and
increasing participation rates via program promotion.
MARKET SEGMENT:Residential
ANNUAL BUDGET: $20,000- $50,000
START DATE:~ is an ongoing program.
PROJECT MANAGER:Toni Joyner
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