HomeMy WebLinkAbout2003-11-17 City CouncilCity of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT: UTILITIES
DATE:
TITLE:
NOVEMBER 17, 2003
UTILITIES PUBLIC BENEFITS PLAN FOR 2003-05
CMR:475:03
This is an informational report and no Council action is required.
DISCUSSION
The City of Palo Alto Utilities (CPAU) provide a wide range of resource efficiency
programs targeted to meet the diverse needs and interests of Palo Alto residents, businesses,
and government entities. The Public Benefits Plan (covering electricity, natural gas, and
water programs) for 2003-05 continues a number of successful programs and leverages
existing CPAU resources to add new activities.
Attached are the updated descriptions, adopted budgets and proposed actions for the Public
Benefits (PB) Programs to be offered during FY 2003-2005. The budgets proposed for the
various PB categories are intended to be flexible and enable redirection of funds to provide
the greatest benefit to the largest number of Palo Alto ratepayers and taxpayers. Promoting
and funding renewable energy as the resource-of-choice remains a high priority.
Guiding Principles
CPAU will design and implement resource efficiency programs and services to:
¯Promote renewable energy.
¯Tailor for, and be valued by, each customer class.
CMR:475:03 Page 1 of 7
¯Leverage limited budget and staff resources to maximize resource efficiency and have
positive environmental results in this community.
¯Provide direct benefits to institutional customers (City government, Palo Alto Unified
School District) while providing indirect benefits to the Palo Alto taxpayer.
¯Promote end-use load management and!or energy efficiency that reduce wholesale
power purchases.
¯Utilize pilot programs that advance resource efficiency technology, are innovative,
and support CPAU as a recognized leader in the industry.
¯Comply with City policies, the Palo Alto Comprehensive Plan, and state and federal
law.
Key Strategies
1. Review all program offerings prior to FY 2004-05 in order to adjust budgets.
2. Suspend the use of selected residential rebate program sunset dates in order to
maximize customer satisfaction with product and service offerings.
3. Use appropriate criteria to prioritize new programs and services that offer the widest
benefits to Palo Alto residents and the environment.
4. Solicit local, state and national recognition for innovative programs and services.
5. Solicit grants and funding from external sources to leverage Public Benefits budgets.
6. Partner with neighboring utilities or trade allies to leverage Public Benefits budgets in
delivering mutually beneficial programs and services.
The overall program direction strives to continue to provide the maximum benefit to the
largest number of Palo Alto ratepayers and taxpayers. The proposed plan "stays the course"
by continuing successful programs and judiciously adding new activities while controlling
staffing levels.
The Palo AltoGreen Program, while not funded by the Public Benefit
continue to remain an integral part of CPAU product mix promoting
stewardship.
program, will
environmental
The following programs, funded solely by the Electric Public Benefits Program (where the
budget has returned to a pre-energy crisis level), will be continued:
¯PV Parmers (photovoltaic) Program (Residential, Commercial, Institutional)
¯Institutional Rebate Program (City facilities and Palo Alto Unified School District)
¯Shade Tree Program (City-owned trees which shade buildings)
CMR:475:03 Page 2 of 7
Key Changes
The following bullets highlight the key changes to the Public Benefits Plan for 2003-05:
Broaden public education for resource efficiency and renewable energy among
residents, the business community and public schools. Actions will focus on
increasing awareness using traditional methods such as on-line tools, additional
training of Utilities customer contact staff, and grants to the Palo Alto Unified
School District to support the purchase of resource-related curriculum materials,
fund teacher workshops, and allow student field trips to examine and report on
renewable energy sites and local watersheds. Non-traditional communications
will leverage the use of public art as a communication medium to promote energy
efficiency and renewable energy themes on Utility infrastructure and!or in public
places such as galleries and museums.
Introduction of load management incentive programs that favorably impact the
Utility’s load shape and help to avoid rising wholesale power costs. This shift
towards such programs will gain momentum in 2005 as the utility’s marginal
power costs begin to escalate and to represent a larger percentage of the overall
wholesale power cost budget. Such load management programs may be funded
from the Supply Rate Stabilization Reserve or the operating budget.
Expansion of the current Electric Public Benefits "Renewable Energy" program.
Although CPAU will continue the current level of rebates for residential,
commercial and institutional photovoltaic systems through the "PV Parmers
Program", there has been a decline in the overall amount of program activity.
Rather than increase the CPAU rebate level to individual property owners (already
at a higher level than that offered by the State of California), unused "PV
Partners" funding, plus additional PB funding, may be directed to co-fund a
municipal solar energy project.
The Public Works Department has applied and been awarded a 50/50 cost-shared
grant of $1.4 million from the Department of Energy (DOE) for installation of
photovoltaic (PV) systems at City facilities ($2.8 million total cost). The project
will provide a significant demonstration of PV technology in the community,
while reducing the operating cost of city government. Since the project was not
approved at the time of budget adoption, staff anticipates returning to Council for
approval of grant acceptance and funding authorization for a future Capital
CMR:475:03 Page 3 of 7
Improvement Program. Depending upon the construction schedule, funding
resources for this effort may be a combination of unused PB funds, the Electric
Fund Public Benefit Reserve and!or the Electric Fund Supply Rate Stabilization
Reserve.
Scale back the current commercial rebate programs for lighting, HVAC, motors
and other end use systems, and utilize the available funds to promote commercial
load management and control technologies, such as networked building control
systems. Such systems can improve customer real-time operating knowledge,
identify efficiency opportunities, and allow greater control of existing end use
systems, particularly during peak periods. Enhanced load management and control
can also improve a customer’s ability to participate in other demand response
programs, which may pay customers to reduce peak electric loads. Customer
demand response programs may also favorably impact the Utility’s load shape and
minimize on-peak wholesale power costs, thus lowering rates and increasing
reliability for all Palo Alto consumers. This economic opportunity will gain
momentum starting in 2005 as the marginal power costs facing CPAU could begin
to escalate and could represent a larger percentage of the overall wholesale power
cost budget.
Cease suspending or terminating seiected residential rebate programs. In the past,
there has been a periodic sunset/sunrise of CPAU mainstay program offerings
such as appliance rebate programs, the PV Program, the Smart Energy Program,
and the Eichler Program. This is industry practice in order to incent customers to
decide to replace appliances before the rebate period expires. Typically the
program is restarted 3-12 months later. CPAU intends to offer the rebates year
round to achieve higher customer satisfaction with the programs. Customers will
no longer be turned away for a rebate simply because they missed the "rebate
window".
Residential appliance rebate levels have previously been set to conform among
those of surrounding utilities. Rebate levels will now be evaluated and adjusted so
customers will proactively replace an existing, but inefficient, appliance before it
has reached the end of its life.
Escalation of current "Research, Demonstration and Development (RD&D)"
activities in the Public Benefits Program. By leveraging the City’s resources, to
provide deliverables greater than the initial investment through grants and
parmerships, CPAU can obtain immediate value, such as a recent project for
CMR:475:03 Page 4 of 7
CPAU to hire and mange a subcontractor to develop a "Best Management
Practices in Marketing Green Pricing Programs" resource guide for other
municipal utilities throughout the country. Funded by a $16,000 APPA grant, a
$5,000 Western Area Power Administration grant a CPAU contribution of $5,000,
the study results have assisted CPAU in the development and launch of the highly
successful Palo AltoGreen renewables program.
Other planned RD&D projects include:
a)50/50 cost-sharing for the installation of a Ground Source Heat Pump
demonstration project (for HVAC) in a Palo Alto commercial building,
and tracking of the system performance over time (as measured against
a mirror-imaged building next door with a standard HVAC system to
determine the cost-effectiveness of this promising new technology in
this climate zone);
b)Tests of efficient micro-generation technologies using the power
generation potential of existing systems (such as electricity generated by
water being pumped uphill and flowing downhill through the local
water distribution system)
c)Providing energy usage information through new web-accessible
advanced metering technologies to enhance commercial/industrial
customer satisfaction. These technologies will also dovetail with the
information gathering capabilities of the commercial demand response
program implementation.
On-going Programs
The following programs, jointly funded by the Electric and Gas Public Benefits Programs,
will be continued:
¯Consultant Assistance for Resource Efficiency (audits, Commercial)
¯Smart Energy Program (rebates, Residential)
¯Eichler Home Program (rebates, Residential)
¯Appliance Rebate Program (Residential)
¯Research, Demonstration and Development (various)
¯Residential Rate Assistance Program
¯Consumer education (various)
CMR:475:03 Page 5 of 7
The following program, jointly funded by the Electric and Gas Public Benefits Programs,
will be scaled-back:
Commercial Advantage Program (rebates, Commercial)
The following programs, funded by the Water Demand-side Management Programs (similar
efficiency activities, different nomenclature), will be continued:
¯The "Best Management Practices" (13 residential, commercial and institutional sub-
programs; contract with the SCVWD for implementation assistance)
¯Administration of CPA Water Efficient Landscape Ordinance
¯Management of CPA Landscape Efficiency Standards (with administration by
Utilities Engineering and Operations)
¯Research, Demonstration and Development (various)
¯Residential Rate Assistance Program
¯Consumer education (various)
BOARD/COMMISSION REVIEW & RECOMMENDATION
This Public Benefit Plan went to the Utilities Advisory Commission as an informational
item on October 1, 2003.
RESOURCE IMPACT
The "FY 2003-05 Public Benefit Plan" outlined in this report will be funded by the adopted
budgets for FY 2003-04 and FY 2004-05. If additional funding is required, staff will
request Council approval to utilize the Electric Fund Public Benefits Reserve or the
appropriate Rate Stabilization Reserve.
POLICY IMPLICATIONS
The Public Benefit Plan for FY 2003-05 supports Key Strategy 7 of the Utilities Strategic
Plan: "Implement programs that improve the quality of the environment".
ATTACHMENTS
A:Public Benefits Plan for 2003-05
B:Public Benefits Final Report for 2002-03
C:Public Benefit Programs and Resource Management
CMR:475:03 Page 6 of 7
PREPARED BY:
DEPARTMENT HEAD:
Mgr. Utilities Services
CITY MANAGER APPROVAL:
HARRISON
Assistant City Manager
CMR:475:03 Page 7 of 7
Attachment A
PUBLIC BENEFITS PLAN for 2003-05
Background
The Utilities Administrative Services Division, provides technical expertise, consumer
education, financial incentives and program management in compliance with
legislative mandates (electric "Public Benefits" from AB1890), Council policies and
agreements (natural gas Public Benefits from 1996, water "Best Management
Practices" and "Landscape Efficiency Standards" from 1992), and, the Utilities
Strategic Plan ("Strategy 7: Implement Programs that improve the quality of the
environment"). Target markets are identified as "market sectors": residential,
commercial, industrial and institutional (schools and government). Specific programs
can impact multiple commodities such as clothes washers (water and energy).
The term "demand-side management (DSM)" refers to utility activities that occur "on
the customer’s side of the meter" in order to affect their demand and usage. These
activities include programs and services for: conservation (overall reduction of usage),
efficiency (reduction of unnecessary usage), load shifting (changing the time of "
usage), load shaping (reduce the "peaks and valleys" of usage), load management
(reduce the highest demand), or load building (increase use to reduce system costs
and lower rates).
"Public Benefits" denotes a family of DSM activities in both the Electric Fund and the
Gas Fund and are specific categories in the respective operating budgets. Similar
activities in the Water Fund are still designated as "Demand-side Management".
Funding of Electric Public Benefits are mandated by State law, and funds are collected
from all electric utility customers at a rate of approximately 2.85% of the total electric
bills (annual collections are approximately $2 Million per year. A separate "Electric
Public Benefits Reserve" has been established to either hold unspent annual funds or
to provide additional operating funds when needed. There are specific guidelines
outlining the uses for Electric Public Benefits. The Utilities’ Electric Public Benefits
Program has been audited by an independent third-party and has been found to be in
compliance of the law.
Funding for "Natural Gas Public Benefits" and "Water. Demand-side Management" are
not mandated by law, but reflect Council’s decision in 1996 to provide funding and
programs to improve customer efficiency and improve the environment. Budgets are
significantly lower than that of the Electric Public Benefits Program. Unspent budgets
are returned to the respective Rate Stabilization Reserve.
Proqram and Service Approaches
Water DSM
Programs and services are limited by funding (approximately $170,000
annually).
1 of 16
The primary focus over the next two years will remain the implementation of
those efficiency measures required and reported annually under the 1991
Council-adopted "Memorandum of Understanding" for the implementation of
the water "Best Management Practices (BMPs)" (as authored and amended
by the California Urban Water Conservation Council). Of the 14 current BMPs,
CPAU is providing partial implementation of 11 of the measures either
directly or through a contractual arrangement with the Santa Clara Valley
Water District (CMR: 359: 02).
Palo Alto is the only major water agency in the county not supplied by the
Santa Clara Valley Water District. In addition to the BMP implementation
services provided by contract, CPAU is working cooperatively with SCVWD to
implement existing District programs such as commercial washing machine
rebates, public .workshops, irrigation auditing, and home auditing throughout
the county by including their availability in Palo Alto. Our cooperation
leverages our program dollars to reduce duplicative costs for marketing and
promotion.
A second focus will be to evaluate the current Palo Alto Water Efficient
Landscape Ordinance (PAMC 12.32.040). Guided by the affiliated Landscape
Efficiency Standards, new commercial water customers (or existing
customers substantially modifying their landscaping) are required to install
water efficient irrigation systems, install dedicated irrigation water meters,
plant appropriate vegetation and conform to an annual Maximum Water
Allowance. The Standards are reviewed and periodically updated to ensure
fairness, reasonableness and consistency with State regulations. We will also
continue to aggressively market the one-year old W-7 Water Rate Schedule
(Dedicated Irrigation Water Metered Accounts), to increase the number of
accounts prior to another drought.
Gas Public Benefits
Programs and services are limited by funding (approximately $225,000
annually).
The primary focus over the next two years will be to maintain the existing
slate of rebates for energy efficient end-use technologies for the residential,
commercial, industrial and institutional market sectors.
Electric Public Benefits
Driven by AB 1890 requirements for funding and specific program categories,
and then by the California energy crisis, programs and services have been
characterized by a "prescriptive approach" (promotion of specific, detailed
measures). CPAU has created residential rebates for home appliances and
solar systems and rebates and loans for building shell improvements in the
residential sector. We have also provided rebates for equipment and specific
2 of 16
end use systems in the commercial and industrial sectors. Rebates have been
made for efficiency improvements in City facilities and traffic signal systems.
During the height of the California energy crisis, a $5 million infusion of
supplemental funding from the Utilities Department, Resource Management
Division, was made to reduce commercial and industrial demand through
accelerated DSM efforts in order to reduce high-cost wholesale electric supply
purchases. Significant staff resources were also spent on the development of
the Summer Load Reduction Program to aggregate the load reductions of
customers in order to reduce the frequency of rolling blackouts.
The four categories of Electric Public Benefit Programs identified by AB 1890,
and our approach during the next two years are:
Demand-side Management programs will continue to offer programs
and services among all customer market sectors.
For residents, rebates will apply to selected home appliances and
systems. While we have incorporated "sunset provisions" for many
programs, use of these dates will be evaluated to determine their
effectiveness.
Although commercial rebates will be continued, the continuing softness
in the commercial industrial market sectors has seen a significant drop
off in standard and custom rebate activity, but an increase in requests
for technical facility audits. These facility audits identify efficiency
opportunities that customers can implement when cash-strapped
capital and maintenance budgets return to normal. We will scale-back
the commercial rebate offerings and re-direct our emphasis to the
promotion of advanced building control systems (including networked,
on-line controls). For those end-use technologies where we will
continue to offer rebates, we will evaluate and adjust rebate levels in
order to help customers capture the "highest-value" opportunities.
Experience with the traffic signal conversion to light emitting diode
technology, the "City Lights" retrofit project, and development of the
"Water and Energy Management Plan for City Facilities", reveal
significant potential for water and energy savings in institutional (local
government and education) facilities. This translates to "bottom-line"
savings for taxpayers. Rebate programs for institutional accounts
receive a 25% bonus.
Efficiency education for all electric customers remains a high priority
and will be aggressively implemented. Programs such as: commercial
and industrial advanced metering can provide load information in 15-
minute interval increments for improved data analysis; on-line
residential audits can help owners and renters identify and prioritize
savings opportunities; public art projects can reinforce awareness and
behavior; support of school efficiency curriculum can reach both the
3 of 16
student and parent or caregiver; supplemental training for Utilities
staff can provide valuable information to customers in less time; and,
providing information on state-of-the-art technologies for efficiency
and renewable energy will allow for informed, cost-effective decision-
making.
Renewable Energy activities and programs have succeeded in
sponsoring, through rebates and education, a market transformation in
the residential market sector installation in Palo Alto. The energy crisis
resulted in greater than anticipated program participation in Palo Alto
and there has been a significant penetration of the newest generation
of photovoltaic technologies (now in over 70 residential and
commercial applications in Palo Alto).
While the State of California has been active in offering rebates for
photovoltaic (PV) systems, continuity has been spotty, at best. Initially
customers of municipal utilities could not participate in the stat program,
then they could, then the funding ran out, then the funding was replaced,
but at a declining level. Although PV installations in Palo Alto have been
slowing (perhaps reflective of the local economy), in order to maintain
consistency in the marketplace, the Utilities Department "PV Partners"
program will remain in place and continue to offer rebates of up to
$4/watt.
The Public Works Department has applied for, and been awarded, a
50/50 cost-shared grant of $1.4 million from the Department of Energy
(DOE) for installation of photovoltaic (PV) systems on City Facilities ($2.8
million total cost). The project will provide a significant demonstration of
PV technology in the community, while reducing the operating cost of city
government. Since the project was not approved at the time of budget
adoption, staff anticipates returning to Council for approval of grant
acceptance, and funding authorization for a future CIP. Depending upon
the construction schedule, funding resources for this effort may be a
combination of unused PB funds, the Electric Fund Public Benefit Reserve
and/or the Electric Fund Supply Rate Stabilization Reserve.
Low-Income funding will continue to support Utilities operations of
the various residential low-income programs.
Research, Development and Demonstration (RD&D) has focused
on supporting local implementation of new technologies for generation
(photovoltaics) and transportation (electric vehicles). These areas are
now seen as mature technologies in the marketplace and our efforts
will be directed elsewhere.
New areas for investigation and/or demonstration projects will include
end-use technologies such as ground source heat pumps (as a low-
energy alternative to traditional air conditioning), advanced customer
metering, and local distributed generation technologies (small scale
4 of 16
distributed generation, combined heat and power applications, low-
head hydro, and solar).
5 of 16
Public Benefits Budgets (2003-05)
Due to the timing of the budget preparation cycle, there can be significant changes
in information between the preparation of the Public Benefits budgets and actual
implementation. Although the overall budget for each Major Activity remains
accurate, the allocation between individual programs are established using the best
available information at the time. One example is the receipt of the $1.4 million
photovoltaic cost-sharing grant from the Department of Energy. Such plans to use
Electric Public Benefit funds, over more than one year, is not reflected in the
adopted budget.
FY 2003-05 ELECTRIC PUBLIC BENEFIT BUDGET ALLOCATIONS
Proposed funding allocations within each Category for FY 2003-04 and 2004-05
may be modified during the course of each year due to changes in customer
participation levels and market conditions. Total Budget will not be exceeded
except by withdrawals from the appropriate Reserve Fund.
Demand-side
Management
(DSM)
Low Income
Programs
Research,
Demonstration
and
Development
(RD&D)
Renewable
Energy *
Total
Expenditures
Total FTE
Total Temp
Positions
2001-02
Actuals
6,774,260
4,549
180,361
657,913
$7,617,083
2.85
0.00
2002-03
Adjusted
Budget
2,055,160
5,000
195,667
148,433
$2,404260
4.00
0.00
2003.04
Adopted
Budget
1;820,935
(93.3%)
5,000
(0.3%)
35,000
(1 8O/o)
90,141(4.6O/oI
$1,951,076 I(100°/o) I
5.35
0.00
2003-04
Budget
Change
(234,225)
0
(160,667)
(58,292)
$(453,184)
1.35
0.00
2004-05
Adopted in
Concept
Budget
1,938,835
5,000
35,000
92,822
$2,071,657
5.35
0.00
2004-05
Budget
Change
117,900
0
0
2,681
$120,581
0.00
0.00
* Does not reflect current or future funds required under the DOE grant proposal.
FY 2003-05 GAS PUBLIC BENEFIT BUDGET ALLOCATIONS
Proposed funding allocations within each Category for FY 2003-04 and 2004-05
6 o£16
may be modified during the course of each year due to changes in market
conditions. Total Budget will not be exceeded except by withdrawals from the
appropriate Reserve Fund.
Demand-side
Management
(DSM)
Low Income
Programs
Research,
Demonstration
and Development
(RD&D)
Total Expenditures
Total FTE
Total Temp
Positions
2001-02
Actuals
82,511
2,548
0
$85,059
0.60
0.00
2002-03
Adjusted
Budget
306,901
2003-04
Budget
Change
2004-05
Adopted in
Concept
Budget
227,210
5,000
0
" $311,901
0.60
0.00
$289~675 I
0.45
0.00
(82,226)
45,000
15,000
($22,226)
(0.15)
0.00
50,000
15,000
$292,210
0.45
0.00
2004-05
Budget
Change
2,535
0
0
$2,535
0
0.00
FY 2003-05 WATER DSM BUDGET ALLOCATIONS
Total Budget will not be exceeded except by withdrawals from the appropriate
Reserve Fund.
’ Demand-side
Management
(DSM)
Total
Expenditures
Total FTE
Total Temp
Positions
2001-02
Actuals
70,097
70,097
N/A
0.00
2002-03
Adjusted
Budget
250,681
25o,681
N/A
0.00
2003:04
Adopted
Budget
169,865
0.75
0.00
2003-04
Budget
Change
(80,816)
(8o,816)
N/A
0.00
2004-05
Adopted in
Concept
Budget
171,283
171,283
0.75
0.00
2004-05
Budget
Change
1,418
1,418
0
0.00
7 of 16
Public Benefits Plan for 2003-05
Implementation Elements
Element
Water DSM
Gas Public
Benefits
(DSM, Low
Income, RD&D~__
Electric Public
Benefits
SM
Low Income
Research,
Development
and
Demonstration
Renewables
Strategy
1) Work with internal team
to determine future
funding levels
2) Maintain integrity of
"Landscape Efficiency
Standards"
3)Develop an algorithm to
simplify assignment of
water budgets (in order
to discontinue the use of
consultants)
1)Maintain current
prog ra ms
Tactics
1) Primary emphasis will remain BMP
implementation, with subcontracting
through other agencies
2) Review Municipal Code language to
keep program current with City goals
and objectives
3) Review and modify program policies
and procedures to allow justifiable
exemptions
4) Market the W-7 rate to applicable
customers
1) Piggy-back with Electric PB for
consistency and economies of scale
1)Maintain current
residential program
offerings
2)Maintain current CARE
program, reduce CAP
rebates to fund control
systems
3) Maintain 25% rebate
premium for Local
Government and Schools
Expand ability of
Customer Services to
respond to residential
questions
1) Maintain funding for
Utilities salaries
1) Complete the current
RD&D studies (City Hall
Lighting Controls, Ground
Source Heat Pump
Study)
2) Develop a rebate
program model for
Operations and
Maintenance activities
1) Maintain current"PV
Partners" program
2) Support Sustainability for
City Facilities
1)Fund residential efficiency training
opportunities for CSR and Field Service
Reps
2)Implement on-line tools that assist CSR
and FSR staff respond to residential
customer efficiency enquiries
3) Implement an on-line residential audit
package for customers
4) Develop a new commercial building
control program to take advantage of
efficiency and demand response
opportunities
5) Cease suspension or termination of
selected residential programs
1) Include in annual budget
1)Maintain monitoring of test systems
and complete final reports
2)Implement the "Energy Visualization
Project" component of the "O&M Study"
3) Seek local opportunities for distributed
generation
4) Expand number of test sites for
advanced metering study
5) Conduct a residential appliance and
efficiency saturation survey to
determine new program areas
1)Maintain current"PV Partners" program
2)Develop a funding schedule for the $1.4
million DOE cost sharing grant
8 of 16
Attachment B
2002-03 Annual Public Benefits Report
STRATEGY 1: Provide expertise, education, incentives and marketing to support customer
efficiency improvements, demonstrate renewable technologies and efficiency alternatives, and
provide tow-income efficiency services (Public Benefits and Demand-side Management).
¯A.Manage the "Commercial
Advantage Program"
B.Manage the "PV Partners
Prog ram"
Implemented the "Commercial Advantage Program"
(rebates) and the "Consultant Assistance for
Resource Efficiency (CARE) program (funding for
engineering efficiency studies). In spite of a
depressed local economy, CPAU provided $228,400
in rebates to 21 commercial customers (down from
$563,000 the prior year), and $292,000 for 39
engineering studies.
The CARE brochure was redesigned to delete
references to particular consultants and contractors
(in order to effectively lengthen the availability of
these under-CPAU-contract consultants for unusual
application studies).
Palo Alto now has 71 PV systems totaling 231
kilowatts.
Conducted the annual Solar Homes Tour in Palo Alto
in October 2002 (400 attendees from 37 cities
touring 20 Palo Alto homes).
For its efforts to develop a solar electric community,
the City of Palo Alto Utilities (CPAU) was recently
awarded the Solar Electric Power Association (SEPA)
Award for Business Program Achievement in the
"Development of a Solar Community." The Solar
Electric Power Association is a nonprofit organization
whose membership consists of more than 120
electric service providers, utilities, associations,
manufacturers, government agencies, research
organizations, and educational institutions from eight
countries. CPAU has a long-standing tradition of
supporting Photovoltaics (solar electricity) for use in
large and small systems throughout Palo AIto’s
residential and business community.
The Department of Energy recognized the Bay Area
Solar Consortium (CPAU is a founding member) for
being the first partnership in the nation to exceed
our 5,000 solar roof goal. The award was presented
in June 2003.
Palo Alto reopened its PV Partners program in
January 2003, after the State of California closed its
rebate program to municipal utility customers.
Program pays a $4 per watt rebate to residential and
9 of 16
C.Implement the "Smart Energy
Program", the "Appliance
Rebate Program" and other
residential efficiency
programs.
non-profit utility customers for installing a PV
system. Changes to the program include a cap on
the maximum rebate paid ($12,000 for residents,
$40,000 to non-profits, and $50,000 for commercial
customers). The rebate for commercial PV systems
was reduced to $2 per watt because commercial
customers are eligible for federal tax incentives
equivalent to $3 per watt.
Staff organized a meeting in January 2003 for
California PV program managers from 15 utilities to
discuss program design and implementation
strategies.
Provided technical assistance and solar siting
surveys for the City of Palo AIto’s $1.4 million
Department of Energy Matching PV installation
grant.
Initiated the new "Smart Energy" residential rebate
program. Initiated the 2002 "Eichler Home" rebate
program, which targeted the approximately 2000
Eichler (and similar architecture) homes in Palo Alto.
Continued the Appliance Rebate program.
For the FY 2002-03 ending June 30th, 2003, UMS
processed rebates for 2,169 individual measures and
appliances from the Smart Energy, Eichler Home and
Appliance Rebate programs totaling $408,529, with
estimated kWh/yr savings of 759,265 and 84,360
Therms. Of the 2,169 rebates, 975 were appliances
(610 clothes washers for $121,900 and 490,920
kWh/yr saved; 161 dishwashers totaling $16,200
and 12,075 kWh/yr saved; and, 204 refrigerators for
$40,700 with annual savings estimated at 104,652
kWh.
The 1,1194 non-appliance rebates totaled $229,729
with estimated savings of 232,618 kWh/yr.
2002-03 Eichler Home results also included 19 loans
completed for $33,990 through the Palo Alto Credit
Union.
Implemented the public "Power Lunch" Lunchtime
Energy Efficiency Workshop series in the City Hall
Council Chambers. Sponsored 2 workshops For the
Palo Alto Chamber of Commerce Showcase. Provide
current program informa~tion to residents and
customer employee groups at "Earth Day" and
"Public Power Week" workshops and community
events.
Began development of long-run (multi-year)
programs for appliances and would include market
10 of 16
E:
F:
G:
Ho
Research, evaluate and
implement new residential
resource efficiency activities
and/or programs.
Actively market CPAU Public
Benefits and DSM Programs to
Key Account customers.
Actively market the Public
Benefits and DSM programs to
assigned Major Account
customers.
Actively market the Public
Benefits and DSM programs to
assigned small business
customers.
Manage consultants for
efficiency studies of non-
residential facilities.
saturation surveys and higher rebate levels to incent
consumers to replace inefficient appliance BEFORE
"burnout".
Design was completed for a "Residential Summer
Workshop" series and "Summer Smart Energy
Program" Marketing Campaign to increase customer
participation among all programs.
¯A residential on-line energy audit RFP has been
completed and awaits next fiscal year before release.
Expected to be released in late Summer 2003.
Successfully completed a yearlong study, in
conjunction with the Department of Energy, of the
water efficient technology represented by the
"D’Mand Water Recycling System." For homes and
businesses, the under sink motor and pump injects
the cold water typically lost down the drain while the
user waits for hot water, back into the cold water
line. This technology may be highlighted in a future
CPAU program.
Commercial Efficiency efforts have compensated for
the lack of rebate program activity by targeting and
funding customer facility studies (CARE) so that
efficiency investments can be budgeted when
financial resources again become available.
¯Conducted a customer workshop focusing on CPAU
programs and ground source heat pump technology.
¯Conducted site visits, coordinated CARE studies,
processed customer rebate applications.
¯For the Palo Alto Chamber of Commerce Showcase,
UMS sponsored 2 workshops. The first workshop was
"Surge Protection and UPS selection for Small
Businesses." The second workshop dealt with
"Improving Energy Efficiency in the Home" and
included typical benefits from energy conservation.
The workshop also gave an overview of CPA
residential efficiency programs and services.
¯Implemented the "pre-rinse" restaurant sprayer
program in conjunction with the Santa Clara Valley
Water District.
¯Maintained marketing material (print and electronic
media).
¯Managed consultant contracts and tracking budget
and expenditures.
¯Negotiated study costs between consultants and
customers.
¯Reviewed all consultant work (Scope of Services,
draft and final reports)
11 of 16
I.Coordinate the City’s actions to
meet the requirements of the
"Best Management Practices" of
the California Urban Water
Conservation Council (CUWCC)
J. Coordinate and support on-
going communication plan to
inform and educate CPAU
residential customers on
resource efficiency.
K.Manage the Public Benefits
and DSM Programs.
Maintained file of consultant reports with identified
efficiency savings.
Completed the 2002 "Best Management Practices
Report" for submittal to the CUWCC.
Initiated a new partnership between the City of Palo
Alto Utilities and the Santa Clara Valley Water
District to: 1) create joint marketing of selected
water efficiency "Best Management Practices", and
2) hire the District to cost-effectively implement 7
other selected "BMP’s" on behalf of the City.
Effective July 1, 2002, a new Water Rate Schedule
was instituted for all dedicated irrigation water
meters at Palo Alto commercial/industrial sites.
During non-drought conditions, the dollar cost per
unit for water will remain the same under the new
W-7 Irrigation Rate as for general water service to
non-residential accounts. Customers with irrigation
water meters have two specific benefits: 1) Water
metered through these meters is exempt from sewer
charges, 2) Water measured through these meters
may be compared to the water budget on a routine
basis. Facilities management crews or landscape
maintenance contractors may make any needed
adjustments to keep water use on track, saving both
water and money.
When W-7 was implemented, 233 customers
qualified and were placed on the new rate. As of
June 30, 2003, there were 245 customers were on
this rate.
¯Member of the Utilities Communication Team working
with public relations to leverage current communicatio
options.
¯Provide information on resource efficiency in 3 bill
inserts and 3 UCA’s (memo’s on customer bills).
¯Provide current program information to residents at
"Earth Day", "Public Power Week", workshops and
community events.
On August 22, 2002, City of Palo Alto Utilities
(CPAU) was presented with one of the first California
"Flex Your Power Energy Conservation Awards." The
award recognized CPAU for outstanding energy
conservation efforts and organizational leadership in
conjunction with the state’s "Flex Your Power"
energy conservation campaign last year. The City
was one of 18 public, private and non-profit
organizations in California to receive the award.
12 of 16
Unique CPAU programs that earned the award
honors were:
¯The City Lights Program, a lighting retrofit
program completed in 60 city facilities;
¯The Traffic Signal Light Bulb Conversion
Program, in which low-energy bulbs replaced
older, less-efficient bulbs in 89 city-owned traffic
signals;
¯"Earthfest 2001", where 20,000 energy-efficient
fluorescent light bulbs were given away;
¯The City’s original Water and Energy
Management Plan (WEMP) created and
implemented during the height of California’s
energy crisis to reduce the City’s energy use.
¯Managed UMS budget via monthly ASD Reports and
weekly Contracts and Blanket Order Reports
(internally generated).
¯Provided funding for electric vehicle chargers for the
two new municipal garages.
¯Funded the "Sunflowers" public art project
(incorporating movable photovoltaic panels) on
California Avenue as part of the community
educational component of the Electric Public Benefit
Program.
¯Initiated a funding program for replacement of
municipal shade trees in order to mitigate the "heat
island effects" within the community.
IStrategy 2: Develop and implement energy programs and services that meet key
customer and utility needs
¯A:Identify new technologies to
improve, monitor, measure or
control resource efficiency in
customer facilities.
Staff has initiated a six-month pilot program for
selected Key and Major Accounts, which will allow
on-line access to their 15-minute interval data (one
day afterwards). Using a customizable web portal
with powerful graphics, reporting and analysis
capability, Utilities will also be able to bring
customers: demand data, consumption data,
Utilities program information, weather data and
useful links. The pilot will determine whether such
a service can be provided on a long-term basis on a
fee-for-service basis. Possible enhancements
during the pilot period will include a gas metering
option, a water metering option, power quality
reporting, and load management pricing signals
(demand response).
Developed a geothermal demonstration project
comparing the efficiency of conventional packaged
A/C units with geothermal heat pumps in our
climate. Completed the RFP~ selected participants,
13 of!6
Bo Manage utility support of
sustainable energy projects at
PAUSD sites.
developed monitoring specifications.
Implementation delayed until 2003-04 due to death
of the facility owner. Project slated to go forward
under new ownership.
Installed a state-of-the-art lighting control system
on the 3r~ Floor of City Hall. This technology
demonstration ("Watt Stopper") is a computer-
based intelligent timeclock that eliminates lighting
when unneeded. Using "zone controls" the system
can be locally overridden upon demand by simply
telephoning the system. Unused zones remain off
until needed.
Developed and implemented a PAUSD funding plan
for a curriculum of resource efficiency ($50,000) to
meet the educational components of the Public
Benefit program and the water Best Management
Practices (BMP#8 "School Education").
Assisted in creating the Sustainable Schools
committee’s presentation to the PAUSD board in
June.
14 of 16
Attachment C
Public Benefit Programs
and
Resource Management
Resource Management ("supply") alternatives can overlap the objectives of the
DSM and Public Benefits ("demand") programs to provide cost-effective efficiency
and additional energy services to residential and commercial customers in several
areas including:
(a)
(b)
acquisition of water or energy supplies during periods of physical
constraint,
acquisition of water or energy supplies during periods of economic
volatility,
customer water or energy demand that is affected by market
prices, thus changing efficiency cost-effectiveness criteria, and,
investments in environmentally and economically beneficial
generation technologies to meet long-term supply portfolio
objectives and guidelines.
These areas of overlap can offer potential for cost-effective Utilities investment
from either stand-alone supply/resource management funds (i.e. the $5 Million
supplement for efficiency programs during the energy crisis, resulting in an overall
system demand reduction of 5 MW), or when leveraged by DSM and Public Benefits
investment, where the two arenas overlap.
Beyond the economics of wholesale water and energy supply, these joint areas of
water and energy efficiency, environmentally sensitive supplies, or resource
alternatives can improve overall system efficiency or operational economics, and
may overlap different resources such as electricity and gas - e.g. cogeneration,
improved insulation, or development of fuel cells.
15 of 16
The approaches range from R&D to feasibility studies to demonstration projects to
full implementation. Specific examples of such alternatives include, but are not
limited to the following:
1.Distributed generation
2.Renewables
3.Cogeneration (combined heat and power)
4.Supply efficiency (reduced losses in generation and transmission)
5.Distribution efficiency (deferred infrastructure replacement, low loss
transformers)
6. Power quality
7. System load reduction (conservation, energy efficiency)
8. System load shape management (peak shaving/, energy storage)
9. Customer Demand Response (wholesale/retail pricing, Time-of-Use rates,
shared savings)
10. Clean generation (fuel cells, low head hydro)
11. Water reuse or recycling
Similar to customer rebate or technical assistance programs, resource alternatives
that are not by themselves cost effective without including social benefits, but do
represent a net social gain for Palo Alto residents and businesses, may be
supported without needing to raise retail rates for Palo Alto customers. DSM and
Public Benefit funding may be applicable to renewable energy generation, demand
response programs, research into innovative energy supply, or load management
technologies or strategies.
Broad general guidelines for evaluating such potential opportunities include the
following criteria:
1. Leverage: Can funding be leveraged with outside resources (e.g. US DOE,
CEC, APPA, or other grants)?
2. Time limitations: Is the window of opportunity closing?
3. Integrated evaluation: Consider all integrated costs (generation,
transmission, distribution) and lifecycle analysis.
4. Minimum scale: Is the project of a reasonable scale to warrant in-house time
and resource allocation given current priorities?
5. Joint Action: Are other cities, organizations or other entities interested in
participating the project?
6. Local benefits: Are there sufficient local benefits to warrant the effort?
7. Community support: Is there evident public support for the activity?
8. Priority: Is the project as or more effective than other existing programs
competing for the same funds?
CPAU staff continuously monitors technology and market developments for
opportunities for such projects. The above criteria serve to rank the relative
merits of potential projects as the ideas arise. As such projects are identified,
CPAU may utilize both Resource Management and DSM and Public Benefits
funding, within Council-approved limits, to advance and implement projects
that on their own would not be cost-effective, but provide sufficient societal
benefits to warrant consideration and possible implementation.
16 of 16