HomeMy WebLinkAbout1999-03-15 City Council (19)City of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
FROM: CITY MANAGER DEPARTMENT: UTILITIES
DATE:MARCH 15, 1999 CMR:180:99
SUBJECT:SENATE BILL 1305, THE POWER CONTENT LABEL
This is an informational report and no Council action is required.
BACKGROUND
The purpose of Senate Bill 1305 is to ensure that retail suppliers of electricity disclose to
consumers "accurate, reliable, and simple ~o understand information on the sources of energy
that are used to provide electric services" (Public Utilities Code Section 398.1 (b).) As such,
the law requires retail suppliers of electricity to disclose fuel source information to
consumers with a Power Content Label developed by the. California Energy Commission
(CEC).
The new label identifies the "Califomia Power Mix" which includes a variety of resources
used to generate California’s electricity, such as natural gas, coal, large hydroelectric
projects and nuclear plants, as well as renewable technologies. The label allows consumers
to compare the power "content" - or resource mix - of a specific electricity product with the
California Power Mix. At a glance, customers can see how the electricity they purchase is
created and feel confident that retailers purchase what the customers paid for.
In addition to informing consumers about their power mix, retail electricity suppliers who
sell power different from the Califomia Power Mix must undergo independent audits and
annually submit information about the previous year’s purchases, sales and disclosures to the
CEC. This reporting is designed to minimize fraudulent claims.
CMR:180:99 Page 1 of 3
DISCUSSION
The City of Palo Alto Utilities (CPAU) purchases its power through a combination of the
Calaveras hydroelectric project, the Western Area Power Administration (Western) long-term
contract, and other short-term contracts from the wholesale market. The majority of CPAU
power needs are met through Calaveras and Western purchases. Western power comes from
two sources, the Central Valley Project hydroelectric facilities and wholesale power contracts
from suppliers in California and the Northwest United States.
SB 1305 assumes that all wholesale market purchases reflect the resources known to
comprise the California Power Mix. By law, CPAU wholesale market purchases are
required to be reported as containing the California Power Mix. CEC regulations also require
that wholesale power purchased by Western (non-Central Valley Project) be categorized and
reported as California Power Mix. Therefore, it is the wholesale power purchases made by
CPAU and Western that lead to a reported content that includes resources such as nuclear,
coal, natural gas, geothermal, wind, solar and biomass, in which CPAU has made no long-
term investments nor any specific purchases. To avoid confusion, staff will disclose this fact
when reporting the Power Content Label to customers.
All retail electricity suppliers must display the label in product-specific written promotional
materials, and send quarterly label updates to their customers. The Power Content Label will
first be sent to CPAU customers requesting an electric deregulation education brochure. The
brochure and Power Content Label will also be sent to all commercial customers in
preparation for Phase III of electric direct access. Utilities staff is currently investigating
legally acceptable methods for informing customers of the Power Content Label, including
(but not limited to) bill inserts, direct mail and advertisements in the Palo Alto Weekly. All
reasonable attempts to develop materials and methods to comply with the new law, and its
deadlines, are being made.
ENVIRONMENTAL REVIEW
This is not a project for the California Environmental Quality Act (CEQA). No
environmental assessment is required.
CMR: 180:99 Page 2 of 3
ATTACHMENTS
Attachment A:Power Content Label factsheet to accompany the Deregulation
Education Brochure
PREPARED BY: Sherilyn Hill, Utility Marketing Services
DEPARATMENT HEAD:
Director of Utilities
CITY MANAGER APPROVAL:
EMIL HARRISON
Assistant City Manager
CMR:180:99 Page 3 of 3
Introducing... Power Content Label
POWER CONTENT LABEL
Eligible Renewable
-Biomass & waste
.Geothermal
-Small hydro
-Solar
-Wind
Coal
Large Hydroelectric
Natural Gas
Nuclear
Other
TOTAL
*64% of CPAU Power is specifically purchased from individual suppliers.
*°Percenteges are estimated annually by the California Energy Commissio~
based on the electricity sold to California consumers dudng the previous year.
For specific information about this electricity product, contact City of Palo Alto
Utilities at 650-329-2161. For general information about the Power Content
Label, contact the Califomia Energy Commission .at 1.800-555-7794 orwww, energy.ca.gov/consu met.
5%~11%
1%2%
2%5%
2%2%
0%<1%
0%1%
8%21%
71%23%
11%30%
5%15%
0%<1%
100%100%
Deregulation has brought about many changes in the
¯ California Hectric Utility industry. One change includes
legislation requiring electric energy service providers to
inform all California electric consumers about the sources
of their electric power generation.
As your energy service provider, the City of Palo Alto
Utilities (CPAU) is providing this "Power Content Label"
which includes information on CPAU’s projected power
mix for 1999 and compares it with the 1998 California
system power mix.
Please note that in our deregulation brochure, we state
that 80% our electricity comes from large hydroelectric
power. This information is based on the origin of actual
power purchased in 1997. The Power Content Label has
the current projection of power content mix for 1999.
Percentage changes occur each year depending on what
electricity is available and which purchases best suit Palo
Alto’s needs and cost requirements in order to continue
providing low rates.
Where CPAU Power Comes From
CPAU purchases the power it needs through a combination of the Calaveras hydroelectric project, the Western
Area Power Administration (Western) long-term contract, and other short-term contracts from the wholesale
market. The majority of CPAU power needs are met through Calaveras and Western purchases. Western power
comes from two sources, the Central Valley Project hydroelectric facilities and wholesale power contracts from
suppliers in California and the Northwest United States.
CPAU wholesale market purchases are required to be reported as containing the California Power Mix. Regula-
tions also require that wholesale power purchased by Western (non-Central Valley Projec0 be categorized and
reported as California Power Mix. Therefore, it is the wholesale power purchases made by CPAU and Western
that lead to a reported content that includes resources such as nuclear, coal, natural gas, geothermal, wind, solar
and biomass in which CPAU has made no long term investments nor any specified purchases.
If you have any questions about the CPAU Power Content Label, please contact us at 650-329-2161.
CITY OF PALO ALTO
UTILITIES