HomeMy WebLinkAboutStaff Report 114-10TO: HONORABLE CITY COUNCIL
FROM: CITY MANAGER
DATE: JANUARY 25, 2010
REPORT TYPE: CONSENT
SUBJECT:
DEPARTMENT: UTILITIES
CMR: 114:10
Utilities Advisory Commission Recommendation to Adopt a
Resolution Approving the Utilities' Legislative Policy Guidelines for
2010
RECOMMENDATION
Staff and the Utilities' Advisory Commission (UAC) recommend that the City Council adopt a
resolution approving the Utilities' Legislative Policy Guidelines for 2010.
DISCUSSION
The utility industry is a high profile and heavily regulated industry that is subject to copious
legislative actions at both the regional state and federal level. Such legislation can influence,
among other things, the quality of supplies, reliability and security of the supply and distribution
infrastructure; commodity procurement practices; customer service and billing; program design;
rate design; and activities and costs associated with climate protection. Representatives of the
City (elected officials and staff) participate in federal and state legislative forums to advocate
positions on energy and water -related issues that support the City Utilities Department's key
objectives of providing valued utility services to customers and dependable returns to the City,
and employing balanced environmental solutions. The City Utilities Department also
participates in joint action efforts to advocate for goals and objectives shared by other public
owned utilities.
At the state level, hundreds of bills focused on the utility industry can be introduced each year.
The number of bills introduced, the pace at which bills change and new language is negotiated,
and the often surprising speed at which bills can be placed for a vote during the legislative year
requires Utilities Department staff and elected officials to respond quickly if the City is to have
any influence on the resulting legislation. Often, a response to an amended bill is required in a
matter of days. These timing constraints preclude a return to the UAC and Council for approval
each time a response is required. Therefore, a set of policy guidelines is developed each year
that identifies the goals and priorities for the Utilities Department to be applied by staff when
evaluating and responding to legislation. While it is impracticable to return for approval each
time a letter is sent in response to a bill amendment, the issues under debate are known to the
CMR: 114:10 Page 1 of 3
UAC and Council through their participation in legislative committee meetings, the publications
and summaries circulated from joint action agencies, and updates from the Utilities Director and
her staff. Advocacy positions taken in alignment with these guidelines will be subject to the
approval of the Utilities Director or City Manager per the City's legislative advocacy process.
The Utilities' Legislative Policy Guidelines for 2010 (Attachment B) have been developed by
staff and reviewed by the UAC to: 1) provide direction to staff in evaluating and responding to
legislative action involving utilities and utilities issues, . and 2) clarify approved policy and
advocacy direction when active involvement of Palo Alto elected officials is required.
The report is grouped in four sections: the first addressing legislative policy guidelines that are
common to all utilities (electric, gas, and water), and the following three sections addressing
those guidelines that are specific to water, gas or electric. Each section includes a set of goals for
the utility and guidelines for Palo Alto staff and elected officials when taking action to achieve
the goals.
BOARD/COMMISSION REVIEW AND RECOMMENDATIONS
The Utilities' Legislative Policy Guidelines for 2010 were presented to the UAC at its December
2, 2009 meeting. There was some discussion to clarify the UAC's responsibility under the
municipal code regarding City proposed new legislation, as compared to the purpose of the
guidelines to provide direction in responding to legislation initiated by others and development
of positions with other multi -agency groups. Staff committed to providing copies to the UAC
and the Council on advocacy letters sent by the City. Clarification was also made that the goals
presented in the guidelines were not intended to be taken in priority order.
UAC Chair Melton suggested that the words "preserve/enhance" found in the first goal under
"All Utilities" should be used instead of "protect/enhance" found in the first goal under "Gas"
and "Electric." The UAC unanimously approved a motion to recommend that the City Council
approve the Utilities' Legislative Policy Guidelines for 2010 with the change suggested by Chair
Melton. The motion carried unanimously (6-0), with Commissioner Berry absent. Draft minutes
from the UAC meeting are included as Attachment C.
Staff agrees with the UAC and has incorporated the changes recommended by the UAC into the
attached proposed Utilities' Legislative Policy Guidelines for 2010.
RESOURCE IMPACT
There is no incremental resource impact associated with adoption of these guidelines.
POLICY IMPLICATIONS
The recommendation is consistent with the Council policy and supports the Council's 2009 Top
3 Priorities of Environmental Protection and Economic Health.
ENVIRONMENTAL REVIEW
Approval of a Resolution Adopting the Utilities' Legislative Policy Guidelines for 2010 does not
meet the definition of a project pursuant to Section 21065 of the California Environmental
Quality Act (CEQA), thus, no environmental review is required.
CMR: 114:10 Page 2 of 3
ATTACHMENTS
A: Resolution Adopting the Utilities' Legislative Policy Guidelines for 2010
B: Utilities' Legislative Policy Guidelines for 2010
C: Excerpt from Draft UAC Meeting Minutes of December 2, 2009
PREPARED BY:
REVIEWED BY:
DEPARTMENT APPROVAL:
CITY MANAGER APPROVAL:
DEBRA LLOYD
Senior Resource Planner
E O. RATCHYE
ilities Assistant Director, Resource Management
VALE
Director o
O.
Uti
CMR: 114:10 Page 3 of 3
ATTACHMENT A
NOT YET APPROVED
Resolution No.
Resolution of the Council of the City of Palo Alto Approving
the Utilities' Legislative Policy Guidelines for 2010
WHEREAS, the City of Palo Alto Utilities Strategic Plan ("Strategic Plan"),
approved by the Council of the City of Palo Alto on March 7, 2005, [CMR 148:05] provides a
set of Key Objectives for the City of Palo Alto Utilities Department (CPAU) to follow in the
areas of customer satisfaction and utility infrastructure, employment of balanced environmental
WHEREAS, CPAU annually identifies Utilities' Legislative Policy Guidelines that
facilitate the Strategic Plan's Key Objectives; and advocates for utility -related issues at Federal
and State legislative forums in furtherance of those objectives; and
WHEREAS, in January 2009 CPAU staff updated the 2009 Legislative Policy
Guidelines to respond to recent legislative and regulatory trends, in particular the increasing
emphasis on climate change at the State and Federal level; and
WHEREAS, the 2010 Legislative Policy Guidelines also support the City Council's
inclusion of "Environmental Protection" in the 2009 Council Top 3 Priorities, and the
recommendations of the Mayor's Green Ribbon Task Force on Climate Protection; and
WHEREAS, action on some of these issues may require active involvement of Palo
Alto elected officials; and
WHEREAS, the Utilities' Legislative Policy Guidelines for 2010 were presented to
the UAC at its December 2, 2009 meeting, and the UAC voted 6 to 0 (with Commissioner Berry
absent) to recommend that the City Council approve the Utilities' Legislative Policy Guidelines.
NOW, THEREFORE, the Council of the City of Palo Alto does hereby RESOLVE
as follows:
SECTION 1. The Council hereby adopts the resolution approving the Utilities'
Legislative Policy Guidelines for 2010.
SECTION 2. The Council finds that any revenue derived from the authorized
adoption enumerated herein shall be used only for the purpose set forth in Article VII, Section 2,
of the Charter of the City of Palo Alto.
/1
/1
1
100111 syn 6051046
NOT YET APPROVED
SECTION 3. The Council finds that the adoption of this resolution does not
constitute a project under Section 21065 of the California Environmental Quality Act (CEQA)
and the CEQA Guidelines, and therefore, no environmental assessment is required.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
Deputy City Attorney City Manager
Director of Utilities
Director of Administrative
Services
2
100111 syn 6051046
ATTACHMENT B
Utilities' Legislative Policy Guidelines for 2010
Advocacy positions taken in alignment with these guidelines will be subject to the approval of the
Utilities Director or City Manager as per the City's legislative advocacy process
ALL UTILITIES
Goals
1. Preserve/enhance local accountability in the control and oversight of matters impacting utility
programs and rates for our customers while balancing statewide climate protection goals.
2. Support legislation that makes bold progress in cost effectively reducing greenhouse gas emissions,
and recognizes early voluntary action.
3. Support efforts to maintain or improve the reliability of the supply, transmission and distribution
infrastructures.
4. Maintain CPAU's ability to provide reliable, sustainable, and competitively -priced utility service.
Legislative Policy Guidelines
Venue
Goals
1. Local
Accountability
2. Climate
Protection
3. Reliability
&
Infrastructure
4. Service
& Cost
Control
1. Advocate goals through active
participation in joint action efforts.
Federal,
State, and
Regional
✓
✓
✓
✓
2. Communicate with Legislature,
California Energy Commission (CEC),
California Air Resources Board
(CARB), and Natural Resources
Defense Council (NRDC) via California
Municipal Utilities Association
(CMUA), Northern California Power
Agency (NCPA), and the Bay Area
Water Supply and Conservation Agency
(BAWSCA) regarding the City's record
on environmental and energy efficiency
programs.
State
✓
✓
✓
3. Support legislation that will result in the
most cost-effective reduction of GHG
emissions, recognition of early action,
and inclusion of more efficient
solutions, such as cogeneration,
distribution resources, and demand
control programs, in integrated resource
plans.
Federal
State, and
Regional
✓
✓
✓
✓
Utilities Legislative Policy Guidelines for 2010
1. Local
Accountability
2. Climate
Protection
3. Reliability
&
Infrastructure
4. Service
& Cost
Control
4. Support legislation to reduce onerous,
costly, redundant and time -intensive
reporting requirements with diverse data
recording mechanisms that keep the
various reports from being comparable.
Also, improve value of information
reported to the public.
State
✓
✓
✓
5. Oppose cost shifts from Federal or State
budgets and California Public Utilities
Commission (CPUC) jurisdictional
utilities through active participation in
CMUA and NCPA legislative activities.
Federal,
State, and
CPUC
✓
✓
6. Advocate for and request State and
Federal grants for local and regional
applications of energy efficiency,
conservation, renewable resources, and
recycled water projects.
Federal
and State
✓
✓
V
Page 2 of 7
Utilities Legislative Policy Guidelines for 2010
WATER
Goals
1. Increase the security and reliability of the regional water system owned and operated by the San
Francisco Public Utilities Commission (SFPUC).
2. Maintain the provision of an environmentally sustainable, reliable supply of high quality water at a
fair price.
3. Support ability of municipal utilities to develop and manage their own conservation and efficiency
programs and retain authority over ratemaking, including the imposition of non -volumetric customer
meter or infrastructure charges for water service.
4. Support efficiency and recycled water programs in order to minimize the use of imported supplies.
Legislative Policy Guidelines
Venue
Goals
1.
Reliable
infrastructure
2.
Maintain
supplies
3. Local
Authority
4.
Minimize
imports
1. Advocate goals through active participation in
the Bay Area Water Supply and Conservation
Agency (BAWSCA) and California Municipal
Utilities Association (CMUA), with support
from Palo Alto staff for BAWSCA and the
San Francisco Bay Area Regional Water
System Financing Authority (RFA).
Local,
Regional
& State
✓
✓
✓
✓
2. Participate in California Urban Water
Conservation Council (CUWCC) Best
Management Practice (BM?) revisions and
development to ensure that proposals are
reasonable, achievable, and cost-effective.
State
V
✓
3. Advocate to ensure that legislative actions
regarding the Hetch Hetchy Reservoir include
the following requirements:
• timely rebuilding of the regional water
system;
• maintains the quality of delivered water;
• minimizes any increase in the cost of
water;
• creates no additional exposure to more
frequent or severe water shortages;
• supports the existing water system and its
operation.
Local,
Regional
& State
✓
✓
Page 3 of 7
Utilities Legislative Policy Guidelines for 2010
1.
Reliable
infrastructure
2.
Maintain
supplies
3. Local
Authority
4.
Minimize
imports
4. Advocate for interpretations or
implementation of Water Code provisions
(such as those enacted by AB 1823 (2002),
AB 2058 (2002) and SB 1870 (2002)) that
maintain or reinforce the authorities and
protections available to the City and
BAWSCA members outside of San Francisco.
Local,
Regional,
and State
✓
✓
✓
5. Support provision of sufficient resources for
BAWSCA to enable it to advocate for:
• an environmentally sustainable, reliable
supply of high quality water at a fair
price;
• preservation of Palo Alto's existing
contractual water allocation and
transportation rights on the SFPUC Hetch
Hetchy system;
• regional planning for conservation,
recycled water, and other water supply
projects.
Local
and
Regional
✓
✓
✓
✓
6. Support infrastructure security and reliability
including equitable allocation of funds for
increasing the security of infrastructure,
development of a regional crisis management
plan, and an interconnection between the
SCVWD West Pipeline with the SFPUC's
Bay Division Pipelines 3 and 4.
Regional,
and State
✓
7. Advocate for financing or funding for water
conservation programs and for
solutions/options for recycled water projects
that meet end -use needs and conserve potable
water.
Regional,
State and
Federal
✓
✓
V
✓
Page 4 of 7
Utilities Legislative Policy Guidelines for 2010
GAS
Goals
1. Preserve /enhance the ability of municipal utilities to develop their own demand side efficiency and
conservation programs, alternative gas supplies, and rate structure.
2. Support efforts to reduce greenhouse gas emissions and protect the environment.
3. Increase the security and reliability of the gas supply and transmission infrastructure. This includes
retaining access to intra- and interstate gas transmission systems to reliably serve customers.
4. Preserve just and reasonable utility rates.
Legislative Policy Guidelines
Venue
Goals
1. Local
Authority
2.
Environ-
ment
3. Reliability
of
Infrastructure
4. Cost
Control
1. Advocate most of these goals mainly
through the American Public Gas
Association (APGA) with minor support
from Palo Alto staff.
Primarily
Federal with
minor
advocacy at
State level
✓
✓
✓
✓
2. Work with Northern California Power
Agency (NCPA) and California Municipal
Utilities Association (CMUA) to the extent
that the City's goals as a gas distributor
align with generators' use of natural gas.
Federal and
State
✓
✓
✓
✓
3. Support increased production/incentives
for renewable gas supplies.
Federal and
State
✓
✓
✓
✓
4. Support incentives for energy efficiency
and solar water heating measures.
Federal and
State
✓
✓
✓
✓
5. Support maintenance of incentive for
municipal utilities to enter into pre -pay
transactions for gas supplies.
Federal
✓
Page 5 of 7
Utilities Legislative Policy Guidelines for 2010
ELECTRIC
Goals
1. Preserve /enhance the ability of municipal utilities to exercise local accountability and oversight over
matters impacting customer service, programs (such as demand side efficiency and conservation
programs), and rate structure.
2. Protect/enhance the reliability and security of infrastructure.
3. Support legislation that makes bold progress in cost effectively reducing greenhouse gas emissions
and encourages early voluntary action.
4. Preserve just and reasonable utility rates/bills.
Legislative Policy Guidelines
Venue
Goals
1. Local
Accountability
2.
Reliability
3. GHG
Reduction
4. Cost
Control
1. Advocate goals through Northern California
Power Agency (NCPA), California Municipal
Utilities Association (CMUA), American Public
Power Association (APPA), Transmission
Agency of Northern California (TANC), and
Bay Area Municipal Transmission Group
(BAMx) with support from Palo Alto staff to
speak with a coordinated voice.
Federal
and State
✓
✓
✓
✓
2. Support legislation/regulations that permit
solutions tailored to local needs on:
• clean distributed generation and cogeneration
projects, and standards for connecting such
resources to the local distribution system;
• energy efficiency programs;
• implementation of renewable portfolio
standards;
• Smart Grid design and implementation
• provision of reliable and competitively priced
service to customers; and
• allocation of public benefit funds (as allowed
in AB 1890 (1996)).
Federal
and State
✓
✓
✓
✓
3. Support cap -and -trade market designs that
protect consumers from the exercise of market
power, or advocate for alternative mechanisms
for achieving GHG emissions reductions.
Federal
and State
✓
✓
4. Support/encourage transmission, generation, and
demand -reduction projects and solutions
including advocating for financing or funding
Local,
State,
and
✓
✓
✓
✓
Page 6 of 7
Utilities Legislative Policy Guidelines for 2010
1. Local
Accountability
2.
Reliability
3. GHG
Reduction
4. Cost
Control
solutions/options for projects that:
• enhance/ensure reliability;
• ensure equitable cost allocation (including
protection against imposition of state-owned
electric contract costs on municipal utility
customers);
• improve procurement flexibility (e.g.
resource adequacy rules that ensure
reliability and provide flexibility or use of
Renewable Energy Certificates (RECs) in
meeting State renewable portfolio standards);
• improve market transparency (particularly
transparency of IOU's transmission and
procurement planning and implementation
activities); and
• lower the environmental impact on the Bay
Area and the Peninsula.
Federal
5. Advocate for Congressional, legislative, or
administrative actions on matters impacting
costs or operations of the Western Area Power
Administration such as:
• support of Congressional Field Hearings to
explore modernizing flood control strategies,
river regulation and generation strategies at
CVP plants to enhance generation, water
delivery, flood control and fisheries;
• protection of the status of Western Power
Marketing Administration and cost -based
rates; and
• provisions for preference customers' first
take at land available with economic
potential for wind farms.
Federal,
State and
Regional
✓
✓
✓
6. Work with California Independent System
Operator (CAISO) or through the Federal
Energy Regulatory Commission (FERC):
• to give buyers of renewable intermittent
resources relief from imbalance penalties;
• to promote financial and operational changes
that result in timely and accurate settlement
and billing; and
• to protect value of existing contracts and
local regulatory approvals of such contracts.
Federal
and State
✓
✓
✓
Page 7 of 7
ATTACHMENT C
DRAFT
UTILITIES ADVISORY COMMISSION
EXCERPT MINUTES OF DECEMBER 2, 2009
ITEM 2: ACTION ITEM: Utilities Legislative Policy Guidelines for 2010
Senior Resource Planner Debra Lloyd noted that the commission discussed the 2010 legislative policy
guidelines at the November 2009 meeting. The proposed guidelines incorporated the recommended
change provided at that meeting.
Commissioner Keller asked if the goals presented in the guidelines were listed in priority order. Lloyd
responded that they were not in order of priority; rather, staff attempts to balance the goals for each issue
that arises.
Commissioner Foster asked if it would be possible for staff to email the UAC when the City has decided to
take a position on a legislative initiative to allow individual members of the UAC to comment. Director Fong
stated that this would be a burden on staff and that there could be compliance issues with the Brown Act for
such a practice. Commissioner Eglash stated that this suggestion to solicit UAC input on a position taken
could put a wrench in the works, but that he would like to know about the position taken after the fact. In
support of Commissioner Eglash's suggestion, Commissioner Foster then withdrew his suggestion.
Commissioner Waldfogel stated that he appreciates the concerns about staff needing to act quickly to
respond to legislative initiatives and take positions in line with the guidelines, but noted that the UAC has an
affirmative responsibility under the municipal code to be involved in legislative initiatives. He said that he
understands the problem with dealing with issues real time, but approving guidelines annually is at the
other end of the spectrum. Fong stated that the City Attorney has said that the municipal code refers to
cases where the City is actually proposing new legislation, not necessarily to the development of positions
with respect to legislative initiated by others. She added that generally the City will participate in the
development of positions with other multi -agency groups, such as the Northern California Power Agency
(NCPA) or the California Municipal Utilities Association (CMUA)
Chair Melton agreed that Palo Alto only rarely takes a position alone. Instead, it participates with other
agencies to negotiate positions so that the weight of more agencies can be brought to bear on the issue at
hand. Melton added that he finds the weekly summaries of legislative information that staff passes on from
NCPA to be highly informative and uses them as an opportunity to ask questions of staff.
Public comment on Item #1:
Herb Borak, Palo Alto resident, commented on three areas:
1, The UAC's authority in the municipal code should be unambiguous and he would like to hear
from the City Attorney's office on the interpretation of it, not from staff.
2. At one time, the Council had a standing legislative committee. This could be done again.
3. There is a Brown Act issue as Commissioner Foster's suggestion sets the stage to violate the
Act. A response would put staff in an intermediary position.
Utilities Advisory Commission Minutes Approved on: Page 1 of 2
Attachment C
Council Member Yeh agreed with staff that time doesn't allow for direct input into the process, but UAC
members can talk directly to individual Council Members. Also, UAC members sometimes attend
legislative advocacy meetings.
Chair Melton suggested that the words "preserve/enhance" found in the first goal under "All Utilities" should
be used instead of "protect/enhance" found in the first goal under "Gas" and "Electric."
ACTION: Commissioner Waldfogel made a motion to recommend that the City Council approved the
proposed Utilities Legislative Policy Guidelines for 2010 with the change suggested by Chair Melton.
Commissioner Eglash seconded the motion. The motion carried unanimously (6-0).
Utilities Advisory Commission Minutes Approved on: Page 2 of 2