HomeMy WebLinkAboutStaff Report 8192
City of Palo Alto (ID # 8192)
City Council Staff Report
Report Type: Informational Report Meeting Date: 6/19/2017
City of Palo Alto Page 1
Summary Title: Utilities Strategic Plan
Title: Informational Report to Council on the Development of a New Utilities
Department Strategic Plan and Key Drivers
From: City Manager
Lead Department: Utilities
Request
This report is provided for the Council’s information and no action is required.
Executive Summary
The City of Palo Utilities Department (CPAU) has embarked on a process to update and refresh
its Strategic Plan. The goal of the Strategic Plan is to ensure maximum alignment between
CPAU’s resources and activities with the City Council’s policy direction, citywide organizational
culture, employee and stakeholder interests, and customer service expectations. The Strategic
Plan also is intended to guide CPAU in successfully advancing the City’s vision and priorities over
the next five to ten years.
The Strategic Plan development process will address specific CPAU goals, objectives and
initiatives; revisit the vision and/or mission statements; and result in the identification of
tactical action items a refined system for tracking performance and supporting adaptability to
changing conditions into the future.
Background
On July 18, 2011, the Council approved the 2011 Utilities Strategic Plan (Staff Report #1880).
Council updated the Strategic Plan through approved changes to the Performance Measures
and Strategic Initiatives of the Utilities Strategic Plan in August 2013 (Staff Report #3950) and
May 2015 (Staff Report #5709). The most recent update of CPAU’s progress towards meeting
its Performance Measures and Strategic Initiatives is included in the June 19, 2017 City Council
packet (Staff Report #8192).
Recognizing that several internal and external factors have significantly changed since the last
major Strategic Plan update in 2011 and that the utility industry continues to increase in
complexity, staff felt the necessity to conduct a thorough update of the Strategic Plan. To assist
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in this effort, earlier this year staff issued a Request for Proposals (RFP) to retain consulting
support services. Specifically through the RFP, staff sought assistance in the following areas:
Engagement of key stakeholder to facilitate input into the Strategic Plan;
Identification of key emerging issues facing CPAU in the next two, five and ten years;
Perform high level SWOT (strengths, weaknesses, opportunities and threats) analysis of
CPAU’s ability to achieve organizational goals;
Refinement of vision, mission and values consistent with key stakeholder and community
interests;
Development of measureable goals, objectives, and implementation plan; and,
Development of an approach to monitoring, managing, and communicating progress that
achieves the objectives of this RFP.
After a thorough evaluation process, one vendor was selected to assist CPAU in the
development of the Strategic Plan. Additionally, a second vendor will be retained to assist staff
in the facilitating CPAU employee engagement and communication of several issues including
the development of the Strategic Plan. The contract dollar amount for each agreement is
expected to be within the City Manager’s contracting authority of less than $85,000 per year.
Discussion
The focus of the Strategic Plan update will be on how to balance all stakeholder needs and
expectations while addressing several key drivers, challenges and opportunities including:
Increased sustainability and/or climate action goals and/or requirements;
New legislative and regulatory requirements;
Emerging technologies and smart grid applications;
Changing workforce and retention challenges;
Physical and cyber security threats;
Proliferation of distributed energy resources;
Changes to the availability and feasibility of long-term supply resources; and
Competition in providing utilities services.
The Strategic Plan development process will engage a wide variety of stakeholders, including
the City Council, Utilities Advisory Commission, interdepartmental leadership, community
members, customers and all levels of CPAU staff. This inclusive approach will be focused on
maintaining effective engagement throughout Strategic Plan development, and sustainable
focus on implementation after adoption.
The Strategic Plan will also need to address consistency and coordination with City and other
CPAU initiatives either in place or in process, along with State and Federal legislative and
regulatory requirements, such as:
City’s Sustainability Action Plan,
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Smart Grid/Information Technology Strategic and Implementation Plan,
Recycled Water Plan,
Water Integrated Resource Plan,
Electric Long-term Electric Acquisition Plan/Integrated Resource Plan,
Gas Carbon Neutral Plan
Second electric transmission interconnection plan
Utilities Compliance
Utilities Workforce Sustainability
Capital improvement of the utility infrastructure
Attachment A provides a more detailed list of such key drivers, policies and mandates or
compliance directives.
Next Steps
The vendor selected to develop the Strategic Plan will start in July 2017 along with the
employee engagement process. The figure below, illustrates the process staff intends to use to
develop the Strategic Plan and engage stakeholders, including Council, throughout the process.
The majority of the work is expected to happen through the remainder of 2017 and staff plans
to seek Council approval of the new Strategic Plan in early 2018. Staff will return to Council in
August 2018 with an update.
Figure 1: City of Palo Alto Utilities Department – 2017/18 Strategic Planning Approach
Attachments:
Attachment A: Strategic Plan Key Drivers
Page 1 of 3
No. Policy/Regulation Impact Latest Update
CITYWIDE/DEPARTMENTWIDE
Sustainability and Climate Action Plan Framework for greenhouse gas
(GHG) emission reductions
November 2016
Palo Alto Municipal Code Palo Alto Municipal Code governing
legislation. Title 2: Administrative
Code includes electric and gas
wholesale commodity
procurement. Title 12: Public
Works and Utilities
January 2017
Strategic Plan 5-year Utilities strategic plan
including mission, vision,
performance measures and
strategic initiatives.
May 2015
City of Palo Alto Utilities (CPAU) Rules
& Regulations
Defines operating rules and
responsibilities for interaction with
customers
October 2014
Smart Grid Smart grid assessment and utility
strategic technology work plan
May 2017
Legislative Guidelines Annual establishment of legislative
priorities and guidelines.
February 2017
UTILTY-SPECIFIC POLICIES & PLANS
Long-Term Electric Acquisition Plan
(LEAP)
10-year electric integrated
resource plan including objectives,
strategies and implementation plan
for the acquisition and
management of hydroelectric,
renewable, and carbon neutral
resources. Updated every 3 to 5
years.
April 2012
Gas Utility Long-Term Plan Gas utility long-term plan including
objectives, strategies and
implementation plan for the
acquisition and management of gas
supply resources.
March 2012
Water Integrated Resources Plan Assessment of new water resources
and the preservation of existing
supplies
March 2017
Urban Water Management Plan A 20-year planning horizon to
ensure adequate water supplies are
available to meet existing and
future water demands.
May 2016
Carbon Neutral Plan Definition, strategies, resources
and price cap for achieving carbon
neutrality for electric supply
portfolio.
March 2013
Carbon Neutral Gas Plan Carbon neutral gas plan to reduce
greenhouse gas emissions by
natural gas
November 2016
ATTACHMENT A
Page 2 of 3
Electric Financial Plan
Annual electric financial plan and
rate proposal
May 2016
Gas Financial Plan Annual gas financial plan and rate
proposal
May 2016
Water Financial Plan Annual water financial plan and
rate proposal
May 2016
Wastewater Financial Plan
Annual wastewater financial plan
and rate proposal
May 2016
UTILITY-SPECIFIC OPERATIONS & REGULATIONS
Fed OSHA 1910 for other safety orders Occupational Safety and Health
Administration, employers are
responsible for providing a safe and
healthful workplace.
Ongoing
Cal OSHA Title 8 Construction and
General Safety Orders
Minimum standards for workplace
safety and health
Ongoing
California Public Utilities Commission
(CPUC) Public Orders – Operations &
Engineering:
GO 95
GO 128
GO 165
GO 174
GO95 - construction guidelines for
overhead electric lines.
GO 128 - construction guidelines
for underground electric lines.
GO 165 - inspection cycle on
overhead transformers, switches,
capacitors, poles, and etc.
GO 174 - Rule for Electric Utility
Substations including inspection
cycles
Ongoing
California State Public Utilities Code
• Part 1 Article 8: Public benefits
program
• Part 1 Article 14: Power source
Disclosure
• Part 1 Article 16: RPS Program
• Section 2827: Net energy metering
• Section 9621: Integrated Resource
Planning
Codes and legislative mandates for
the procurement, management and
reporting of electricity and related
services
Ongoing
Department of Transportation
Regulations
Title 49 of the Code of Federal
Regulations:
Parts 40 and 199:workplace drug and
alcohol testing (HR responsibility)
Parts 190-192: natural gas pipeline
regulations
Federal regulations applicable to
gas pipeline safety
Ongoing
Page 3 of 3
NERC/WECC Reliability Standards National electric distribution
provider reliability standards
Ongoing
Safe Drinking Act Environmental Protection Agency –
Safe Drinking Water Act and
applicable code – Chapter 7
Ongoing
California Energy Commission - Public
Utilities Code
California code of regulations
applicable to electric and gas
services providers
Ongoing
INDIVIDUAL PROJECTS & PROGRAMS
Electric Energy Efficiency Goals 10-year efficiency goals and
measures. Updated every 5 years.
March 2017
Cap-and-trade program
Policy for use of state allocated
allowances to support GHG
emission reduction of electric and
gas usage to relieve the impact on
ratepayers
January 2015
Water, Gas, and Electric Demand-Side
Management Programs
Annual CPAU achievements of
electric, natural gas, and water
efficiency programs
May 2016
Low Carbon Fuel Standard
Use of Low Carbon Fuel Standard
Credits to Encourage Electric
Vehicles
March 2016
Electrification (Fuel Switching) Greenhouse gas reduction
strategies by reducing natural gas
and gasoline use through
electrification
August 2015
Local Solar Plan Increase installation of local solar
PV facilities to provide 4% of city
electric needs by 2023
April 2014
Second Electric Transmission Line Construction of new secondary
60kV electric transmission line
between CPA, DOE, SLAC Stanford
and/or PG&E.
January 2016
Fiber to the Premises Expansion of fiber network to
premises to provide faster and
more cost-effective broadband
services
May 2017
Recycled Water Collaborating with Santa Clara
Valley Water District to expand the
regional use of recycled water as an
alternative local water supply.
December 2016