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HomeMy WebLinkAboutStaff Report 315-06City of Palo Alto C ty Manager’s Report 8 TO: FROM: DATE: SUBJECT: HONORABLE CITY COUNCIL CITY MANAGER AUGUST 7, 2006 DEPARTMENT: UTILITIES CMR:315:06 CITY COUNCIL ENDORSEMENT OF THE CALIFORNIA PUBLICLY OWNED ELECTRIC UTILITIES’ PRINCIPLES ADDRESSING GREENHOUSE REDUCTION GOALS RECOMMENDATION Staff recommends that City Council endorse the CMUA "California Publicly Owned Electric Utilities’ Principles Addressing Greenhouse Reduction Goals." BACKGROUND On June 5, 2006, the Board of Governors of the California Municipal Utilities Association (CMUA) adopted a resolution pledNng to support state goals for geenhouse gas reduction. CMUA is a statewide association of local-governments serving water, gas, and electricity to California consumers. The adopted principles support the adoption by each publicly owned electric utility etected board of the following measures: Developing a ~eenhouse gas reduction plan consistent with the state’s reduction goals. Proactively implementing state law, which requires that "...each local publicly owned electric utility, in procuring energy, shall first acquire all available energy efficiency and demand reduction resources that are cost-effective, reliable, and feasible." After first investing in energy efficiency, then pursuing renewable energy supplies, and other non-geenhouse gas emitting energy resources and clean fossil resources: o Continuing to ag~essively pursue renewable energy supply o Facilitating distributed generation/combined heat and power (DGiCHP) projects. Quantifying the financial risk of ~eenhouse gas-producing resources in the planning and procurement process, including, but not limited to, a quantified carbon emissions risk adder (credit) for both in-state and out-of-state resources. CMR:315:06 Page 1 of 3 Considering envirolm~ental justice issues in its overall resource procurement and ~-eenhouse gas reduction policies. Supporting standardized, mandatory ~eenhouse gases reporting from all si~fificant sources. Providing measurement and verification of programs that reduce geenhouse gas emissions. Providing education to customers on ways that they can reduce their ~eenhouse gas emissions, and providing assistance where feasible. RESOURCE IMPACT The development and implementation of a climate action plan consistent with the California Publicly Owned Electric Utilities’ Principles Addressing Greenhouse Reduction Goals are included in the approved budget. Economic impacts of recommended specific actions will be brought to Council as part of that plan at a future date, expected in 2007. POLICY IMPLICATIONS The CMUA principles are consistent with and complement the Objectives and Guidelines of the Council-approved Long-term Electric Acquisition Plan (LEAP) and can se~e as a core foundation for deve!opment of the Climate Action Plan as described in the LEAP Implementation Task #1 (CMR 169:06, April 17, 2006), which states, "Promote environmental stewardship by completing the California Climate Action Registry process for reporting and certifying ~eenhouse gas emissions, developing a Climate Action Plan for utilities, and supporting City efforts to address climate change and other environmental issues." The principles also support the City’s Sustainability Policy Statement adopted April 2, 2001 (CMR 175:01), the Green Govermnent Pledge adopted July 19, 1999 (CMR 284:99), and elements of the Comprehensive Plan, specifically: 1.GOAL N-9: A clean, efficient, competitively-priced energy supply that makes use of cost-effective renewable resources, and Policies 2.POLICY N-44: Maintain Palo Alto’s long-term supply of electricity and natural gas while addressing enviro~m~ental and economic concerns. 3. POLICY N-48: Encourage the appropriate use of alternative energy technolo~es. The principles also support the U.S. Mayors Climate Protection A~eement. ATTACHMENTS A.California Publicly Ov~ned Electric Utilities’ Principles Addressing Greenhouse Reduction Goals. PREPARED BY:Karl E. Knapp, Senior Resource Planner Girish Balachandran, Assistant Director CMR:315:06 Page 2 of 3 DEPARTMENT APPROVAL: CITY MANAGER APPROVAL: / EMIL~ HARRISON Assistant City Manager CMR:315:06 Page 3 of 3 ATTACHMENT A CALIFORNIA MUNICIPAL UTILITIES ASSOCIATION 9"[ 5 L STREET, SUITE "[ 460 ¯SACRAMENTO, CALIFORNIA 95814 ,, (916) 326-5800 ¯FAX (9"I 6) 326-5810 California’s Publicly Owned Electric Utilities’ Principles Addressing Greenhouse Gas Reduction Goals California’s publicly owned electric utilities have a long histoi’y of environmental stewardship, investment in renewable technologies, and commitment to energy efficiency. As not-for-profit utilities regalated by local elected officials and ultimately responsible to their customer/owners, they are motivated by providing value to, and responding to the goals of, the community they serve. Publicly owned utilities have been in the forefront of the development of solar energy, ~dnd energy, fue! cells, and energy efficiency. During California’s ill-fated electric restructuring exercise, Caiifornia’s publicly owned utilities continued to meet their obligation to serve. Today, they remain vertically integrated entities, planning for the load they serve and investing in energy efficiency and a diverse resource mix to serve that load. California"s publicly owned utilities recognize the necessity of reducing greenhouse gas (Ghg) emissions in accord with state policies while maintaining reliability of electric ¯ service, public safety, and economic energy prices. They look forward to working collaboratively with both the state and federal governments to develop and implement greenhouse gas reduction programs that involve all sectors of the economy that contribute to greenhouse gas emissions. PRENCIPLES Therefore, the Board of Governors of the California Municipal Utilities Association (CM’UA), representing the State’s publicly owned electric utilities agree to the foIlowdng principles and farther agree to recommend the adoption of these principles by the governing boards and councils of Iocal publicly owned electric utilities. Each utility ~dll develop a greenhouse gases reduction plan, consistent with the State’s reduction goals, adopted by its elected governing board in public hearings, and provided to the California Energy Commission when adopted and whenever updated. Smaller utilities may choose to aggregate their plans into a single, larger plan. Each utility will explore the impact of a "sustainable portfolio" to allow the utility to meet its overall load-based greenhouse gas reduction goals by balancing investments in renewable energy, energy efficiency and demand reduction,, carbon trading, carbon emissions mitigation, and/or through other innovative ways. In the design of programs to reduce greenhouse gases emissions, each utility supports the concept of receiving credit for early action to reduce greenhouse gases emissions. 2.As a means of meeting greenhouse gases reduction goals, each utility will proactively implement state law, which requires that "... each local publicly owned eIectric utility, in procuring energy, shall first acquire at! available energy efficiency and demand reduction resources that are cost-effective, reliable, and feasible." Such investment in cost-effective energy efficiency and demand reduction resources wil! not be limited to public benefits funds allocations. 3. As a means of meeting greenhouse gases reduction goals and meeting energy needs after implementing point 2 above, each utility wi!l first pursue renewable energy supplies, and second, other non greenhouse gas emitting energy resources and clean fossil resources: a_ In considering renewable resources in competition with fossil fuel resources each utility will quantify the financial risk of greenhouse gas producing resources in their planning and procurement process, including but not limited to a quantified carbon emissions risk adder for both in-state and out-of-state resources. b. Each utility will continue to aggressively pursue its renewable energy supply in accordance with its renewable portfolio standard (RPS), pursuant to punic utilities code section 387. c. Each utility will facilitate distributed generation/combined heat and power (DG/CI-IP) projects that reduce greenhouse gases emissions in their service territory by evaluating transmission and distribution benefits and providing equitable methods for the DG/CHP owner to sell excess electricity to the host utility. d. Each utility will consider environmental justice issues in its overall resource procurement and greenhouse gas reduction policies. 4.Each utility will support standardized, mandatory greenhouse gases reporting from all significant sources. Smaller utilities may choose to aggregate their greenhouse gases reporfingl 5.Each utility will provide measurement and verification of programs that reduce greenhouse gases emissions. 6. Each utility will provide education for its customers on ways that they can reduce their greenhouse gases emissions, and provide assistance where feasible. Any utility that provides financial assistance shall receive credit for appropriate share of the reductions towards that ufility’s goals. INIMEDIATE ACTIONS The CMUA Board of Governors recommends that all electric utility members initiate the following actions immediately: 1.Obtain governing board or council adoption of these principles. 2.Schedule a joint planning workshop with the California Energy Commission regarding the implementation of these principles. LONG TERM ACTIONS The CMUA members will initiate the detailed actions necessary to implement the principles approved by their governing board or council.