HomeMy WebLinkAboutStaff Report 6672
City of Palo Alto (ID # 6672)
City Council Staff Report
Report Type: Informational Report Meeting Date: 3/21/2016
City of Palo Alto Page 1
Summary Title: Utilities Quarterly Update
Title: City of Palo Alto Utilities Update for the Second Quarter of Fiscal Year
2016
From: City Manager
Lead Department: Utilities
This update, on water, gas, electric, wastewater collection and fiber utilities, efficiency
programs, legislative/regulatory issues, utility-related capital improvement programs,
operations reliability impact measures and a utility financial summary, is for the Utilities
Advisory Commission’s (UAC) information. This update has been prepared to keep the UAC
and Council apprised of the major issues that are facing the water, gas, electric, wastewater
collection and fiber utilities.
Items of special interest this quarter include:
a chart showing the City’s water use compared to savings targets as projected through
the end of October 2016 (Figure 11, page 13)
a chart showing participation in the PaloAltoGreen Gas program since the program
launch (Figure 14, page 19)
the heat pump water heater pilot, a part of the electrification work plan, is described on
page 20.
a summary of current state legislation of interest to Palo Alto, including those that are
new in 2016 and those that continue from 2015 (page 24)
the status of the financial reserves as of the end of the second quarter of FY 2016 for all Utilities
funds (Table 17, page 32)
Attachments:
Attachment A: Quarterly Utilities Update for the Second Quarter of FY 2016 (PDF)
Utilities
Quarterly
Update
Second Quarter of
Fiscal Year 2016
March 2016
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
i
Utilities Quarterly Update
Table of Contents
I. Electricity ...................................................................................................................... 1
Electric Supplies ............................................................................................................................................ 1
Electric Transmission Alternatives ................................................................................................................ 3
Electric Budget and Portfolio Performance Measures ................................................................................. 4
II. Natural Gas ................................................................................................................... 8
Market Price History and Projections ........................................................................................................... 8
Gas Supply Retail Rates ................................................................................................................................. 9
Gas Budget and Portfolio Performance Measures ....................................................................................... 9
III. Water ......................................................................................................................... 12
Water Availability ........................................................................................................................................ 12
Recycled Water Project ............................................................................................................................... 13
Water Budget Performance Measures ....................................................................................................... 13
IV. Fiber Optics ................................................................................................................ 15
Commercial Dark Fiber Service ................................................................................................................... 15
Google Fiber ................................................................................................................................................ 16
Fiber‐to‐the‐Premises and Wireless Work Plan .......................................................................................... 16
Fiber and Wireless Program Manager ........................................................................................................ 17
Citizen Advisory Committee ........................................................................................................................ 17
V. Public Benefit, Demand Side Management Programs and Communications ............... 17
Energy Efficiency, Water Conservation and Local Renewable Energy Program Achievements ................. 17
Water Conservation .................................................................................................................................... 19
Communications Update ............................................................................................................................ 21
VI. Research and Development and Innovation ............................................................... 22
Program for Emerging Technologies ........................................................................................................... 22
VII. Legislative and Regulatory Issues ................................................................................ 24
State Legislative Issues ................................................................................................................................ 24
Federal Legislative Issues ............................................................................................................................ 25
State Regulatory Proceedings ..................................................................................................................... 25
VIII. Utility Financial Summary ........................................................................................... 26
Electric Utility Overview .............................................................................................................................. 26
Gas Utility Overview.................................................................................................................................... 27
Wastewater Collection Utility Overview ..................................................................................................... 27
Water Utility Overview ............................................................................................................................... 27
Fiber Optic Utility Overview ........................................................................................................................ 28
CIP Reserves (Reappropriations and Commitments) Summary ................................................................. 29
Residential Bill Comparisons ....................................................................................................................... 30
Non‐Residential Bill Comparisons ............................................................................................................... 31
CIP Project Detail ........................................................................................................................................ 31
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
ii
List of Figures
Figure 1: Electric Supply Resource Projection, 2015 to 2017 (as of January 26, 2016) ............................... 2
Figure 2: Northern California Peak Electric Prices (as of January 26, 2016) ................................................ 3
Figure 3: FY 2016 Electric Load and Resource Balance ................................................................................ 6
Figure 4: FY 2016 Electric Market Purchase Costs and Market Prices ......................................................... 7
Figure 5: Natural Gas Prices – Historical and Projected as of January 27, 2016 .......................................... 8
Figure 6: CPAU’s Gas Commodity Rates—July 2012 through February 2016 .............................................. 9
Figure 7: Cumulative Redwood Pipeline Cost vs. Market Benchmarks ..................................................... 10
Figure 8: Natural Gas Consumption – Budget vs. Actual ........................................................................... 11
Figure 9: Natural Gas Supply Cost – Budget vs. Actual .............................................................................. 11
Figure 10: FY 2016 Natural Gas Prices ($/MMBtu) – Expected vs. Actual ................................................. 12
Figure 11: Water Use Compared to Target for Compliance Period ............................................................ 13
Figure 12: Water Consumption – Budget vs. Actual .................................................................................. 14
Figure 13: Water Cost – Budget vs. Actual ................................................................................................. 15
Figure 14: PaloAltoGreen Gas Program Performance ................................................................................ 19
List of Tables
Table 1: FY 2016 Electric Utility Supply Cost Summary ................................................................................ 4
Table 2: FY 2016 Electric Load and Generation Compared to Budget Projections ....................................... 5
Table 3: Status to date of all applications to the Program for Emerging Technologies ............................. 23
Table 4: Financial Projections, FY 2016 ....................................................................................................... 28
Table 5: FY 2016 Operations Reserves ($000) ............................................................................................ 29
Table 6: Electric CIP Reappropriations and Commitments ......................................................................... 29
Table 7: Gas CIP Reappropriations and Commitments ............................................................................... 29
Table 8: Wastewater Collection Utility CIP Reappropriations and Commitments ..................................... 29
Table 9: Water Utility CIP Reappropriations and Commitments ................................................................ 30
Table 10: Residential Electric Bill Comparison ($/month) .......................................................................... 30
Table 11: Residential Natural Gas Bill Comparison ($/month) ................................................................... 30
Table 12: Residential Water Bill Comparison ($/month) ............................................................................ 30
Table 13: Residential Wastewater Collection (Sewer) Bill Comparison ($/month) .................................... 31
Table 14: Median Residential Overall Bill Comparison ($/month) ............................................................. 31
Table 15: Non‐Residential Electric Bill Comparison ($/month) .................................................................. 31
Table 16: Non‐Residential Natural Gas Bill Comparison ($/month) ........................................................... 31
Table 17: FY 2016 Q2 Reserve Report from the City’s Financial System .................................................... 32
Table 18: Electric Utility CIP Project Detail (pg 1/2) ................................................................................... 33
Table 19: Gas Utility CIP Project Detail (pg 1/2) ......................................................................................... 35
Table 20: Water Utility CIP Project Detail ................................................................................................... 37
Table 21: Wastewater Collection Utility CIP Projects ................................................................................. 38
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
1
I. Electricity
Electric Supplies
Western Area Power Administration (Western) Issues
Unfortunately the ongoing drought continues to keep projected Western Base Resource
generation levels well below long‐term average levels (399 gigawatt‐hours, or GWh). For the
second quarter of FY 2016, Western supply delivered just 21 GWh (52% below long‐term
average levels, and 10% lower than in FY 2015). Even assuming median precipitation levels
going forward, Western is projected to supply only 233 GWh in FY 2016 (42% below long‐term
average levels).
In addition to the effect on Base Resource generation, the current drought conditions are also
having a major impact on the City’s Central Valley Project Improvement Act (CVPIA) Restoration
Fund1 obligations. Palo Alto’s CVPIA Restoration Fund obligation for FY 2016 is expected to be
$6.1 million, an estimate that includes a significant cost carryover that power customers have
from their FY 2015 funding obligation. This carryover amount will add an additional $0.9 million
to Palo Alto’s Restoration Fund costs, and is being collected between December 2015 and
August 2016. For reference, FY 2014 Restoration Fund costs for Palo Alto (not including a $1.3
million amount that was carried over to FY 2015) were $3.1 million.
Palo Alto’s contract with Western is in effect through 2024. Palo Alto participated in Western’s
2025 Power Marketing Plan (Marketing Plan) informal stakeholder process by providing
comments to Western on several elements of the proposal. The Marketing Plan establishes,
among other things, the new contract term, product attributes, resource allocations and
subscription process. Western will start the formal comment process in early 2016 in
anticipation of contract commitments in 2020. Palo Alto is coordinating with the Northern
California Power Agency (NCPA) to develop comments during the formal process.
Calaveras Hydroelectric Project Issues
The drought conditions are having a similar impact on Calaveras; for the second quarter of FY
2016 Palo Alto’s share of this project’s generation was just 11.8 GWh (34% below the long‐term
average level, but 37% higher than in FY 2015). Assuming median precipitation levels going
forward, Calaveras is projected to deliver just 80 GWh in FY 2016 (39% below long‐term
average levels).
1 The Central Valley Project Restoration Fund was authorized in the 1992 CVPIA. This Fund provides funding from
project beneficiaries for habitat restoration, improvement and acquisition, and other fish and wildlife restoration
activities in the Central Valley Project area of California.
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
2
Renewable Energy Contract Summary
Since the last quarterly report, the second of the City’s five utility‐scale solar photovoltaic (PV)
projects, the 27 megawatt (MW) Hayworth project near Bakersfield, began full commercial
operation (in late December 2015). It joins the 20 MW Kettleman solar project in Kings County,
which was completed in July and began commercial operations in August 2015. Meanwhile, the
City’s counterparties report that the remaining three solar PV projects that are in the
development process continue to make good progress toward completion, and all are expected
to begin operations by the end of 2016.
Electric Load and Resource Balance
The size of the committed and planned market purchases over the last, current and next two
calendar year (CY) (shown in Figure 1 below) reflects a significantly below average level of
hydroelectric output, as discussed above. For CYs 2015 and 2016 combined, committed fixed‐
price forward market purchases currently account for approximately 491 GWh, which
represents 25% of the City’s total load for the two‐year period. Net planned market purchases
represent another 15% of the City’s total load for this period. (There are currently no planned
forward market purchases for CY 2017). Long‐term resources (everything but forward and
planned market purchases) currently account for the remaining 74% of the City’s total load over
the three‐year period of CY 2015 through CY 2017.
Figure 1: Electric Supply Resource Projection, 2015 to 2017 (as of January 26, 2016)
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
3
Electric Market Price History and Projections
As of January 26, 2016, the price for on‐peak energy for February 2016 in Northern California
was $28.95 per megawatt‐hour (MWh), while the prices for March 2016 and April 2016 were
$26.54/MWh and $27.34/MWh, respectively. These values are all approximately $4.09/MWh
lower than they were at the time of the last quarterly report.2 On‐peak prices for calendar year
strips are in the range of $30 to $36/MWh for 2016 through 2018. These prices are
approximately $1.40/MWh lower than they were at the time of the last quarterly report.
Figure 2 below illustrates historical monthly on‐peak prices and projected monthly forward
prices for Northern California from 2005 through 2022.
Figure 2: Northern California Peak Electric Prices (as of January 26, 2016)
Electric Transmission Alternatives
An update on the ongoing discussions and evaluation of a second transmission pathway was
provided to Council on January 25, 2016 (Staff Report 6416).
2 Market prices for the previous quarterly report were from October 30, 2015.
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
4
Electric Budget and Portfolio Performance Measures
Electric Supply Cost Summary Compared to Budget Estimates
Table 1 below shows the City of Palo Alto Utilities’ (CPAU’s) supply cost by cost category
through the second quarter of FY 2016. Supply costs were $0.6 million (1.5%) over budget
primarily due to higher transmission costs than expected and increased market purchases.
However, hydro costs remained flat. The low hydroelectric output has resulted in the need to
purchase more energy in the market. Hydroelectric costs do not decrease even when output is
low, and the cost of Western hydropower from the Central Valley Project (CVP) has actually
increased due to the drought. When sales to CVP water customers are below average, as they
currently are, unrecovered costs are allocated to power customers like CPAU.
Table 1: FY 2016 Electric Utility Supply Cost Summary
Supply Cost
Category
Actuals,
Year To‐Date
Month by Month Budget Variance
July through June
TOTAL 41.0 million
Renewable Sources 9.5 million ‐2.2
million
Western Hydro 6.2 million ‐0.1
million
Transmission 8.4 million +2.3
million
NCPA Services 1.3 million +0.1
million
Capacity 0.6 million +0.1
million
Carbon Neutral Costs
Amount Over (+) /
Under(‐) Budget
Market Purchases $9.0 million +1.1
million
Calaveras Hydro 6.0 million ‐0.1
million
0.0 million ‐0.3
million
+0.6
million
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
5
Electric Usage and Generation Summary Compared to Budget Estimates
Table 2 and Figure 3 below summarize the City’s electric supply sources through the second
quarter of FY 2016. Hydroelectric generation was substantially below budget projections due
to drought conditions, requiring the purchase of additional energy in the forward markets.
New solar generation was also much lower than budgeted, but this is mainly due to delays of
the commercial operation dates for the City’s first two solar projects.
Table 2: FY 2016 Electric Load and Generation Compared to Budget Projections
Year To‐Date
Month by Month Budget Variance
July through June
Generation Source Generation
Year To‐Date
% of
Portfolio
Month by Month Budget Variance
July through June
24%
4%
9%
12%
5%
34%
13%
TOTAL SUPPLY 499 GWh 100%
Calaveras Hydro 18 GWh ‐31 GWh
Amount Over (+) /
Under(‐) Budget Projection
Load 499 GWh ‐2 GWh
Amount Over (+) /
Under(‐) Budget Projection
Western Hydro 119 GWh ‐33 GWh
Landfill Gas 46 GWh ‐9 GWh
Wind 58 GWh ‐4 GWh
Forward Market 169 GWh +114
GWh
Solar 23 GWh ‐8 GWh
Spot Market 66 GWh ‐30 GWh
+6 GWh
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
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Figure 3: FY 2016 Electric Load and Resource Balance
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
7
Electric Market Prices and Costs Compared to Budget Estimates
Figure 4 shows monthly market prices and the cost of purchasing energy from the market.
Electric market prices through the second quarter of FY 2016 were lower due to lower natural
gas prices that impacted the electricity markets. The cost of market purchases through the
second quarter of FY 2016 was about $1.48M higher than it would have been if all energy had
been purchased in the spot market3. As discussed previously, the total cost of market purchases
was substantially higher than budgeted due to lower than projected output from hydroelectric
and renewable resources.
Figure 4: FY 2016 Electric Market Purchase Costs and Market Prices
3 Note that some market purchases are made on a forward basis to lock in market prices.
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
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II. Natural Gas
Market Price History and Projections
Ample supply and large volumes of gas in storage are keeping gas prices low. Forward gas
prices at PG&E Citygate are in the $2.50 ‐ $3.00 per million British Thermal Units (MMBtu)
range for the next 12 months. Figure 5 below shows historical monthly bidweek index prices
and forward natural gas prices at PG&E Citygate as of January 27, 2016.
Figure 5: Natural Gas Prices – Historical and Projected as of January 27, 2016
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
9
Gas Supply Retail Rates
Since July 1, 2012, the commodity portion of CPAU’s retail gas rates for all customers varies
every month depending on the market price of natural gas. Figure 6 below shows the actual
commodity rates charged from July 2012 through February 2016. These rates can also be found
on the web site at: http://www.cityofpaloalto.org/civicax/filebank/documents/30399. Note
that gas commodity rates are currently at their lowest level since July 2012 when these costs
began being passed on directly to customers on a monthly basis.
Figure 6: CPAU’s Gas Commodity Rates—July 2012 through February 2016
Gas Budget and Portfolio Performance Measures
Value of CPAU’s Share of Redwood Pipeline Capacity
Figure 7 below shows the cost of the Redwood gas transmission line compared to the value at
month‐ahead spot market prices as well as daily spot market prices. The Redwood pipeline
allows the City to buy gas at the receipt point of Malin, Oregon and transport the gas to “PG&E
Citygate”, which is normally a higher value receipt point. The City’s share of the Redwood
pipeline was a net benefit to the Gas Utility of approximately $200,000 through the second
quarter of FY 2016. This is the difference between the value of Redwood capacity of $456,000
(the difference of the monthly index prices at the ends of the Redwood pipeline in Malin,
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
Ga
s
Co
m
m
o
d
i
t
y
Ra
t
e
($
/
t
h
e
r
m
)
Utilities Quarterly Update for Second Quarter of FY 2016
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Oregon and PG&E Citygate) and the transportation cost of using the Redwood pipeline of
$256,000.
Figure 7: Cumulative Redwood Pipeline Cost vs. Market Benchmarks
Natural Gas Consumption and Costs: Budget vs. Actual
Figure 8 and Figure 9 compare actual natural gas use and supply costs with the FY 2016 budget.
Natural gas use through the second quarter of FY 2016 was 9% below the budget forecast, and
costs were 48% lower than budgeted amounts. Gas usage was lower than estimated in the
budget since the weather has been much warmer than average. Reduced gas usage may also
be impacted by the drought and customer’s reduced usage of (hot) water. Lower than
budgeted gas prices were a main contributor to the lower than budgeted commodity cost.
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
11
Figure 8: Natural Gas Consumption – Budget vs. Actual
Figure 9: Natural Gas Supply Cost – Budget vs. Actual
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
12
Figure 10 shows actual gas prices at PG&E Citygate (CG) versus gas prices that were projected
at the time the FY 2016 budget was developed. Since July 2015, gas prices have been lower
than budget. The price of gas is passed directly to consumers through the monthly‐varying,
market‐based commodity portion of CPAU’s gas retail rate.
Figure 10: FY 2016 Natural Gas Prices ($/MMBtu) – Expected vs. Actual
III. Water
Water Availability
Although the state is experiencing above normal precipitation, recovery from the drought will
require extraordinary amounts of precipitation or normal amounts over several years. Water
storage utilized by City’s water supplier, the San Francisco Public Utilities Commission (SFPUC),
has been an effective tool for managing the system and has benefited from recent
precipitation, but is still heavily impacted by the consecutive dry years. As of January 31, 2016
the total water in storage for the SFPUC’s regional water system was only 48% of capacity.
The State Water Resources Control Board (SWRCB) mandated that Palo Alto reduce potable
water use for the compliance period (June 1, 2015 through February 28, 2016) by 24%
compared to usage during the same period in 2013. On November 13, Governor Brown issued
an executive order that authorized the SWRCB to extend the mandatory statewide reduction in
urban potable water usage and on February 2, 2016, the SWRCB extended the regulation
through October 31, 2016.
As in 2015, most of the savings will come from reduced outdoor irrigation during the summer
months. CPAU has placed particular emphasis on continuing to irrigate and protect the health
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
13
of trees in the City while still reducing outdoor irrigation. As of February 4, the City’s water use
was 31.4% less than 2013 for the compliance period and is on track to meet the 24% target, as
shown in Figure 11 below.
Figure 11: Water Use Compared to Target for Compliance Period
Recycled Water Project
Since the City Council certified the Final Environmental Impact Report for expanding the
recycled water pipeline system to reach the Stanford Research Park on September 28, 2015
(Staff Report 5962), staff has been working on developing a request for proposals for pre‐design
work, and preparation of a business plan for the project as well as examining alternatives such
as installing equipment to purify treated wastewater to potable water standards.
Water Budget Performance Measures
Figure 12 and Figure 13 below compare actual water consumption and water supply cost to the
FY 2016 budget projections. The community has responded with substantial water savings
CPAU has been working diligently with the City’s interdepartmental drought team to ensure the
message about necessary water use reduction has been widespread, and to develop innovative
solutions to help the City and community members meet its water use reduction target. Actual
water use through the second quarter of FY 2016 was 10% lower than budget estimates. Actual
Utilities Quarterly Update for Second Quarter of FY 2016
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supply costs through the second quarter of FY 2016 were 9% below budget, mostly due to the
lower consumption.
Figure 12: Water Consumption – Budget vs. Actual
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
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Figure 13: Water Cost – Budget vs. Actual
IV. Fiber Optics
Commercial Dark Fiber Service
The total number of commercial dark fiber customers was 105 as of the end of the second
quarter of FY 2016. There was no change in the total number of customers from Q1 2016 to Q2
2016. The total number of active dark fiber service connections serving commercial customers
and the City is 232 (some customers have multiple connections). Commercial customers
generate 81% of the dark fiber license revenues. Through the end of the second quarter of FY
2016, six new dark fiber service connections to existing and new customers were completed,
while one service connection was disconnected.
Dark Fiber Optic Network Audit
Based on a request for proposal (RFP) process, a vendor has been selected to provide
professional services in the form of a physical audit of the dark fiber optic network. The audit
will aid CPAU to better operate and maintain the fiber optic network. The retrieved data from
the audit will provide complete fiber routes and usage to optimize use and to minimize outages
and optimize efficiency in designing and installing new connections. The principal objective of
the audit is to collect information and data that will verify customer connectivity and populate
GIS. Contingent on Council approval of the contract with the vendor, the audit should begin
within the next month.
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
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Google Fiber
Staff has reviewed Google Fiber’s Draft Project Description (“Fiber to the Premises City‐Wide
Master Plan”) and is currently working on developing a Master Encroachment Agreement to
enable a project determination under the California Environmental Quality Act. Other related
activities include developing a Master License Agreement for use of City‐controlled space on
utility poles and conduit, Cost Recovery Agreement, and a recommendation to Council to
approve and adopt a Budget Amendment Ordinance for the City to start the process to hire
temporary or contract resources for the proposed Google Fiber Project. Staff anticipates that
substantial staff and third‐party contracting resources for legal services, engineering,
inspection, planning and administration will be required in order to prepare for and implement
any approved project. The City has already incurred, and will incur, costs and expenses beyond
what the City would otherwise recover under the Municipal Fee Schedule and will request that
Google reimburse the City for such costs and expenses. Staff is targeting bringing these
agreements to the Council in March 2016.
Based on Council direction, the City Manager and Chief Information Officer have met with
Google Fiber officials to explore what a “co‐build” model for fiber‐to‐the‐premises would look
like on a conceptual level. The key objective for these discussions is to explore the possibility of
the City collaborating with Google as they build their network to install City fiber equipment,
possibly aerially and underground in furtherance of a possible parallel citywide dark fiber
network. The intent of the discussions is to form a basis for a set of principles to pursue a model
that would need to be vetted by the legal counsel of both organizations. The City has also
reached out to AT&T regarding a co‐build, but discussions have not occurred.
AT&T GigaPower
In April 2014, AT&T announced its plan to bring fiber to the Silicon Valley area. Palo Alto is now
included in AT&T plans. AT&T’s “GigaPower” project is an upgrade to its existing U‐verse
services (Project Lightspeed) and will be deployed to residents initially in neighborhoods with
high potential for adoption. AT&T plans to begin construction and provide GigaPower service to
selected Palo Alto neighborhoods in 2016 under phase one of the project.
Fiber‐to‐the‐Premises and Wireless Work Plan
Staff is currently working on the following tasks as directed by the Council on September 28,
2015:
1. Identifying disagreements with the Citizen Advisory Committee regarding the FTTP Master
Plan and Wireless Network Plan reports prepared by CTC Technology & Energy and
reporting those disagreements to the Council.
2. Developing a “Dig Once” ordinance.
3. Developing and issuing a request for information (RFI) to explore potential municipally‐
owned and public‐private partnership models for fiber‐to‐the‐premises. A draft RFI is
currently being reviewed by the Citizen Advisory Committee and a vendor distribution list
has been finalized.
Utilities Quarterly Update for Second Quarter of FY 2016
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4. Developing information to issue an RFP(s) to expand Wi‐Fi access in unserved City facilities
and high traffic retail areas, in addition to dedicated wireless communications for Public
Safety and Utilities.
Fiber and Wireless Program Manager
On November 30, 2015, Council approved a staff recommendation to hire a temporary Fiber
and Wireless Senior Program Manager for up to 3 years at an annual cost of $228,000. This
position will manage various City fiber and wireless activities, including working as a special
point of contact for the City if Google Fiber builds its network in Palo Alto. A job description for
the temporary position is complete and recruitment is underway.
Citizen Advisory Committee
Staff continues to meet on a regular basis with the committee regarding fiber and wireless
issues.
V. Public Benefit, Demand Side Management Programs and
Communications
Energy Efficiency, Water Conservation and Local Renewable Energy Program Achievements
CPAU offers a wide range of customer programs and services to encourage energy and water
efficiency and customer‐owned renewable generation. Some of these programs are
administered by CPAU staff, although the majority of the energy and water savings are
achieved through third‐party administered programs. The Annual DSM Report summarizes
overall savings goals versus achievements, program‐level achievements and expenditures, as
well as key initiatives undertaken by CPAU. The Annual DSM Report for FY 2014 was provided
to UAC on May 6, 2015 and Council on May 18, 2015 (Staff Report 5708).
Home Efficiency Genie Program
Staff launched a new residential energy audit program called the Home Efficiency Genie where
residents pay a small co‐payment for an in depth building performance audit. Since initial
participation was slow, in December 2015, staff launched a co‐marketing campaign with the
PaloAltoGreen Gas program to increase participation in both programs. A program video was
produced and the logo and website were redesigned to launch the extensive marketing
campaign in January.
Refrigerator Recycling Program
JACO Environmental, the contractor who runs our residential refrigerator and freezer recycling
program, went into receivership in November 2015 and shut down their operations. JACO was
one of the largest recyclers of household appliances in the United States and have partnered
with Utilities in 28 states. Utilities staff contacted all customers who were waiting for rebates
from JACO and issued payments to those who verified they had not yet received their rebates.
CPAU staff is actively looking for a replacement contractor for this program.
Utilities Quarterly Update for Second Quarter of FY 2016
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Georgetown University Energy Prize Competition
In December 2015, Georgetown University released the rankings of the 50 communities
participating in the Energy Prize Competition. After two quarters of data from CY 2015, Palo
Alto ranked 17th in the competition. Beginning in 2016, the City hopes to increase energy
savings with the Home Efficiency Genie audit program and the soon to be released Utility Portal
where customers can learn about their commodity use, CPAU’s efficiency programs, tips to
reduce usage, and CPAU’s new energy savings lottery program (a key part of our Georgetown
strategy) that will be unveiled in Spring 2016.
PaloAltoGreen Gas
The voluntary PaloAltoGreen Gas (PAGG) program provides the opportunity for residential and
commercial customers to reduce or eliminate the impact of GHG emissions associated with
their gas usage, through the purchase of certified environmental offsets. PAGG is the first
Green‐e Climate certified gas offset program offered by a municipal utility, and the first to be
offered to individual community members. The program’s goal for 2020 is to achieve
subscription of 20% of natural gas customers, representing approximately 10% of gas load and
16,000 metric tons of GHG emission reduction. As shown in Figure 14 below, as of end of
December 2015, 978 customers have signed up for PAGG, representing 6.07% of December’s
total city gas load. Although the bulk of the participants are residential customers, the majority
of the gas load enrolled in the program is for City facilities since all City facilities enrolled in the
program for 100% of their gas usage starting in July 2015. Staff anticipates that program
participation will grow following the marketing push that started in early 2016.
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
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Figure 14: PaloAltoGreen Gas Program Performance
Water Conservation
CPAU partners with the Santa Clara Valley Water District (SCVWD) to provide residential and
commercial water conservation programs which includes, free water audits to residential
customers, landscape surveys, rebates for landscape conversions, irrigation hardware, clothes
washers, high efficiency toilets and urinals. The payment to SCVWD includes customer rebates
as well as various program expenditures. CPAU also offers an additional energy efficiency
rebate to customers for high efficiency clothes washers. Despite a vastly increased budget
during the drought, Santa Clara Valley Water District's funding for numerous programs has
been depleted for the current fiscal year.
Real‐Time Water Use Monitoring Pilot for Commercial Customers
In 2012, the City implemented a real‐time water use monitoring pilot with selected large
commercial customers to actively engage them in reducing water usage and water losses. The
pilot deploys a simple, relatively low cost technology that enables standard water meters to
track real‐time consumption, similar to an advanced water meter. A wireless device attached to
the water meter transmits real‐time data to a cloud‐based software platform. Customers
securely log into a web portal to view water usage on a minute by minute interval, identify
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n
U
p
0.00%
2.00%
4.00%
6.00%
8.00%
%
o
f
T
o
t
a
l
C
o
n
s
u
m
p
t
i
o
n
10
82
4
93
6
52
7
80
7
79
7 87
8
85
8
86
0
82
0
78
2
81
1
43
0.
0
2
%
0.
1
1
%
2.
2
9
%
6.
1
2
%
8.
2
3
%
6.
3
4
%
4.
2
5
%
3.
7
5
%
Type
Commercial Residential City
2014
Dec
2015
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
# of Sign Ups
% of Total
Consumption 0.02%
10
6.07%
978
5.91%
860
7.32%
898
9.20%
918
6.92%
837
2.52%
900
1.06%
818
1.04%
813
1.53%
831
1.55%
789
1.29%
530
0.11%
43
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
20
water leaks or other anomalies in water use, and address these issues before they become
maintenance or billing problems. Over a two‐year period, the total water use among pilot
participants was reduced by approximately 8%.
Through grant funding from SCVWD, the City will launch a larger real‐time water use
monitoring pilot covering 100 City facility meters and 24 business customer sites. Pilot
customers will be able to access real‐time water consumption data through wireless sensors
installed on the water meters. The pilot is expected to launch in early 2016 and will run for one
year.
Business Water Reports Pilot Program
Through grant funding from SCVWD, the City will launch a Business Water Reports pilot to
engage small to medium businesses in the hospitality and food service industries to actively
manage their water use. The format and content of the report may vary slightly for customers
in the hospitality versus food service sectors. The key objectives of the Business Water Reports
are to communicate water use and potential ways to reduce water consumption, and to
motivate behavior change for improved water use efficiency. The pilot is expected to launch in
early 2016 and will run for one year.
Net Energy Metering Cap
On October 26, 2015 City Council approved a formal definition of the Net Energy Metering
(NEM) cap of 9.5 MW (Staff Report 6139). As of January 20, 2016 Palo Alto has 7.4 MW of local
solar photovoltaic (PV) capacity, representing 78% of the NEM cap.
Heat Pump Water Heater Pilot
Staff is planning to launch a Heat Pump Water Heater pilot during the first quarter of CY 2016
to encourage residential customers to replace their gas water heater with a heat pump water
heater (HPWH). HPWHs are more efficient than standard gas water heaters, and also help to
reduce GHG emission due to CPAU’s carbon‐neutral electric supply. There are many adoption
barriers involved with replacing a gas water heater with a HPWH unit, including the lack of
awareness among consumers and contractors, as well as additional retrofit costs to add a 240V
electrical conduit to the location of the HPWH. Through this pilot, CPAU hopes to promote
awareness of HPWH among consumers, support market transformation within the supply
chain, streamline the permitting process for HPWH installation, and gather customer feedback
on the retrofit process and performance of HPWHs.
Education, Workshops and Community Outreach Activities
Workshops and events targeted to residents continued this quarter. CPAU teamed with
BAWSCA and coordinated three water workshops to help customers get through the current
drought and prepare for potential heavy rains. Workshop topics included Fundamentals of
Waterwise Gardening and Rainwater Harvesting and Greywater Reuse. CPAU also hosted a
hands‐on workshop to re‐landscape in front of City Hall. By this time of year, the enthusiasm
for drought related classes ran dry and attendance was very low. However, there was robust
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
21
interest in rainwater harvesting and greywater. In total approximately 70 residents attended
these three workshops.
Communications Update
This section summarizes communications highlights, updates on major campaigns and
noteworthy events.
City Sends Aid for Power Restoration at Northern California Fire Area
In September, the state of California experienced devastating wildfires in Lake, Almador and
Calaveras County areas. The City dispatched electric utility crews to the Northern California
wildland fire areas to assist with power restoration efforts. Some of the power plants, electric
transmission, distribution, and electricity generating facilities operated by the Northern
California Power Agency (NCPA), of which the City is a member, were impacted by the fires. As
part of a mutual aid agreement under NCPA, Electric Operations staff traveled to the impacted
areas and assisted by framing and setting poles to restring electrical wires.
Drought Outreach
The City continued its outreach efforts in response to California’s drought conditions, including
educating the community about the need to irrigate trees to preserve their lasting legacy
through the severely dry conditions. CPAU set up a webpage dedicated to drought response at
cityofpaloalto.org/water which provides links to a variety of resources related to water
management:
View a copy of the City's presentation at the August 12 public meeting on the drought.
City of Palo Alto Utilities Drought FAQ
Read a Brief Summary of Current Water Use Restrictions ‐ also available in Spanish and
Traditional Chinese.
Download the City’s trifold drought brochure
Groundwater Pumping/Water Reuse FAQ
Learn more about Recycled Water and water reuse opportunities.
It is vital that we care for our urban canopy during the drought! Click here for an
instructional tree‐care brochure.
Share your water‐saving tips with us on Facebook, Twitter, Instagram or by email at
UtilitiesCommunications@cityofpaloalto.org We'll post them on our water‐saving
strategies page!
CPAU also provides links to other resources to help people protect trees during the drought.
It is vital that we care for our urban canopy during the drought! Click here for an
instructional tree‐care brochure.
Visit Canopy's online Tree Library to pick drought resistant trees before planting. Canopy
also provides watering instructions, tree care guides, and more.
The City sent out a news release on the subject, as well as an email blast newsletter to
subscribers of the City of Palo Alto Utilities Efficiency Services GovDelivery Newsletter. CPAU
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
22
has also been regularly posting daily messages on social media platforms, including Twitter,
Facebook and NextDoor. (NextDoor seems to be one of the most effective ways to reach Palo
Alto residents.)
Winter Storm Preparation
City staff has been reaching out to Palo Alto residents and businesses to inform and prepare
them with resources in anticipation of upcoming winter storm and flood season conditions,
with the possibility of El Niño type rain events. The City has been distributing safety and
emergency preparedness tips in utility bill inserts, ads, social media, on the web and through a
new Utilities Emergency Preparedness and Safety brochure. With help from neighborhood
block leaders and emergency services volunteers, staff has had the opportunity to attend many
neighborhood, school and business group meetings or events, and participate in emergency
preparedness and safety panel presentations or fairs. The webpage cityofpaloalto.org/storms
provides a wealth of information on these subject matters.
VI. Research and Development and Innovation
Program for Emerging Technologies
CPAU’s Program for Emerging Technologies, or PET, (www.cityofpaloalto.org/UTLInnovation)
provides the opportunity for local businesses and organizations to submit proposals for
innovative and impactful products to CPAU for review as a prospective partner. The goal is to
find and nurture creative products and services that will manage and better use electricity, gas,
water and fiber optic services. From the program’s inception in June 2012 through the second
quarter of FY 2016, the program received a total of 45 applications. Table 3 below summarizes
the status of all applications through the second quarter of FY 2016.
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
23
Table 3: Status to date of all applications to the Program for Emerging Technologies
Deadline Total Received Under Review Declined/Closed Active Completed
July 2012 2 0 2 0 0
Oct 2012 5 0 5 0 0
Jan 2013 1 0 1 0 0
April 2013 5 0 3 0 2
July 2013 3 0 2 0 1
Oct 2013 5 0 3 1 1
Jan 2014 3 0 3 0 0
April 2014 4 0 1 2 1
July 2014 2 0 2 0 0
Oct 2014 5 0 2 2 1
Jan 2015 2 0 1 1 0
April 2015 6 2 3 0 1
July 2015 2 0 1 0 1
Oct 2015 1 0 0 0 1
TOTAL 46 2 29 6 9
PET Project Highlight from the second quarter of FY 2016:
Using Utility Data to Help Seniors and their Caregivers in our Community – CPAU partnered
with the Palo Alto Medical Foundation (PAMF) Innovation Center for a research pilot that
utilizes passive signals in the home, such as electricity, gas, and water data from advanced
metering infrastructure, to allow family caregivers to remain updated on the wellbeing of
their senior family members. CPAU staff first successfully demonstrated the technical
feasibility of implementing the pilot project with the City’s utility infrastructure at two
volunteer households. At present, PAMF and CPAU are recruiting 20 more pilot participants
for the study to achieve the goal of reaching 50 households. Please contact Utilities Program
Services at CPAUresidential@cityofpaloalto.org or 650‐329‐2241 for more information
about participating in the pilot program.
Customer Engagement Portal for Energy and Water Use and Management – In partnership
with Nexant, CPAU officially launched a pilot portal on February 1, 2016, called iEnergy for
data management, analytics and customer engagement. Through the portal, all residential
utilities customers will be able to better manage and control their energy and water usage.
For instance, portal users will be able to view historical monthly consumption data, receive
information on CPAU’s efficiency programs and rebates offerings, and learn more about
renewable energy and related program opportunities. Additional portal features are slated
to roll out in March.
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
24
VII. Legislative and Regulatory Issues
State Legislative Issues
2016 is the second year of California’s two‐year (2015‐2016) legislative session and the
legislature reconvened January 4, 2016. February 19 was the deadline for new bills to be
introduced. The anticipated legislative focus for 2016 includes cleanup of certain provisions
from last year’s SB 350, 2030 greenhouse gas (GHG) reductions goals, a successor to the net
energy metering program (NEM 2.0), customer utility data disclosure, demand response and
energy storage targets, regionalization (or expansion) of the California Independent System
Operator (CAISO), changes to the Power Content Label (PCL), further drought‐related actions,
and, notably, an overhaul of the California Public Utilities Commission (CPUC). Following is a
summary of current bills of interest to CPAU, including those that are new in 2016 and those
that continue from 2015:
Energy Legislation
AB 110 (Ting) – GHG emissions intensity reporting: retail electricity suppliers: This bill would
require every retail supplier of electricity to annually report to its customers the GHG emissions
intensity of the supplier’s electricity sources. Further, it would disallow adjustments to GHG
emissions reporting resulting from RECs, offset credits, or other attributes acquired from any
facility not generating the electricity procured by the retail supplier for delivery to customers.
For the City’s electric utility this would mean there would be a GHG emissions intensity factor
associated with the electric portfolio, despite its carbon neutral position under the City’s
adopted protocol for calculating carbon neutrality.
Status: Stalled in the Senate in 2015
AB 1330 (Bloom) – Demand response: This bill would require the CPUC, by June 30, 2018, in
consultation with the California Energy Commission (CEC), electrical corporations, Publically
Owned Utilities (POUs), and community choice aggregators, to establish an annual goal for
demand response. This would mandate that the demand response goal advances renewable
energy resources integration, GHG reductions, and grid reliability and be achieved by each
electrical utility through supply‐side demand response and types of load‐modifying demand
response.
Status: Stalled in the Senate in 2015
SB 32 (Pavley) – California Global Warming Solutions Act of 2006: This would require the
California Air Resources Board (CARB) to approve statewide GHG emissions limits equivalent to
40% below the 1990 level by 2030 and 80% below the 1990 level by 2050, with an interim goal
by 2040. Prohibits CARB from implementing the next update of the California Global Warming
Solutions Act of 2006 Scoping Plan until it has taken specified actions, including waiting at least
one year before adopting the Plan. While CARB is moving forward with a scoping plan for
meeting the post‐2020 targets, this bill would formalize CARB’s role.
Status: Stalled in the Assembly in 2015
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
25
Water Legislation
SB 814 (Hill) – Drought: excessive water use: urban retail water suppliers: This bill, enforceable
only during a declared emergency based on drought conditions, would mandate that each
urban water supplier adopt a definition for an “excessive water user.” It would prohibit
excessive water use (a waste or unreasonable use of water), and mandate a fine of at least
$500 per hundred cubic feet of water used above the adopted definition in a billing cycle.
Additionally, if requested, the names, addresses, and utility usages of each residential excessive
water user must be provided to the requester.
Status: Referred to Senate committees
Federal Legislative Issues
Senator Feinstein is circulating a discussion draft of a potential drought relief bill, “The
California Long‐Term Provisions for Water Supply and Short‐Term Provisions for Emergency
Drought Relief Act.” Currently, the potential bill would allow for competitive funding of
recycled water projects, long‐term water supply projects such as storage and desalination, and
short‐term, temporary solutions to make the water‐delivery system more efficient during the
current drought.
Meanwhile, the Energy Policy Modernization Act of 2015 (S. 2012), which had been forging
ahead with broad bipartisan support, stalled in early February because of conflict over whether
and how to address the public health crisis related to Flint, Michigan’s water supply. Prior to
this, NCPA supported amendments to: streamline hydropower licensing; expand the bill’s
energy workforce development initiative to ensure the eligibility of public power systems, and
include continuing education (filed by Senator Feinstein); and facilitate vegetation management
on federal lands adjacent to utility rights‐of‐way.
State Regulatory Proceedings
California Air Resources Board (CARB)
CARB held a public workshop in February to discuss a proposed regulation to create compliance
penalties supporting enforcement of the RPS Program for POUs. AB 32 bifurcated the
enforcement of POUs’ RPS compliance: the CEC is tasked with determining whether a utility
complied with the RPS requirements then, once compliance is determined, CARB takes over to
determine what penalty, if any, should be imposed on a non‐compliant utility. Following NCPA
comments and the workshop, CARB has agreed that there should be specific language added to
the draft regulations articulating how they will actually process penalty recommendations.
A major focus for CARB this year is the agency’s coordinated updates to the state’s climate
Scoping Plan, updates to the cap‐and‐trade regulations (both to address the post 2020 GHG
reduction goals), and implementation of the federal Clean Power Plan. CARB’s current schedule
is to bring the cap‐and‐trade amendments to its board this Spring, along with placeholders for
various post‐2020 issues (such as post‐2020 allowance allocation). The final update of the
Scoping Plan is planned for the end of the year, submission of a working draft final
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
26
implementation plan to the federal Environmental Protection Agency (EPA) on September 6th,
with a final plan approved in 2017.
California Energy Commission (CEC)
RPS Enforcement Rule – The latest version was approved by the CEC at its October 14 business
meeting. Further modifications are expected in early 2016 based on SB 350’s 50% RPS by 2030
requirements; the rule may take a year or so to complete.
Several CEC proceedings this year will focus on the SB 350 requirements, along with the 50%
RPS is implementation of the mandate to double energy efficiency, and review or POUs’
integrated resource plans.
State Water Resources Control Board (SWRCB)
Although Californians continued to work to reduce water usage, in early February the SWRCB
approved the Extended Emergency Regulation for Urban Water Conservation. Conservation
targets will continue through the end of October, although water officials agreed to review the
regulations again this spring.
VIII. Utility Financial Summary
This section describes the unaudited actual financial results for FY 2016 for all Utilities funds.
The Council‐adopted long‐term Financial Plans for the Electric, Gas, Wastewater Collection, and
Water Funds will be updated for FY 2017 during the budget review process.
Electric Utility Overview
Sales through the second quarter of FY 2016 were 0.3% higher than expected. Sales revenues
have consequently been higher, but due to the ongoing drought, deliveries from Western and
Calaveras hydroelectric resources have been lower than average. While this has necessitated
additional electricity market purchases, market prices have been 27% lower than projected.
Offsetting this, but also increasing market purchases, are lower renewables costs stemming
from a delayed start to the Kettleman and Hayworth solar projects. Current projections indicate
higher net energy costs of $3.81 million for FY 2016.
This combination of higher costs and lower revenues results in a decrease in the level of the
Electric Supply Operations Reserve to $13.2 million. Both the Electric Distribution and Electric
Supply Operations Reserves may fall below the FY 2016 reserve minimum guideline levels based
on preliminary reserve projections, in which case an additional transfer of funds or other
intervention may be requested. The Electric Rate Stabilization Reserve has $14.4 million which
could be used for this contingency.
As shown in Table 6, the Electric Utility CIP Reappropriation and Commitment Reserves totaled
$16.3 million at the end of Q2 FY 2016, of which $4.7 million was under contract.
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
27
Gas Utility Overview
Gas Utility sales through the second quarter of FY 2016 were lower than budget by 4.9%. FY
2015 sales were 13.2% lower than budget, mainly due to warm weather and also to lower (hot)
water usage because of the drought. While the decreased consumption has resulted in
$278,000 lower distribution sales revenue to date, it is too early in the winter heating season to
determine whether this trend will continue. Gas supply revenues to date have also been lower
than budget by $742,000, or 17%, although costs are reduced as well since as gas prices are
passed through directly to customers through the market‐based monthly‐varying commodity
rate. The Gas Operations Reserve is projected to be between the minimum and maximum
reserve guideline range for FY 2016.
As shown in Table 7, preliminary levels for the Gas Utility CIP Reappropriation and Commitment
Reserves totaled $9.4 million at the end of Q2 FY 2016, of which $3.8 million was committed to
projects under contract.
Wastewater Collection Utility Overview
Sales revenues are projected to be slightly lower than forecast, mainly due to lower winter
water usage and thus lower commercial wastewater revenues. The Wastewater Collection
Operations Reserve is projected to be at the minimum reserve guideline level for FY 2016.
Should it be needed, the CIP reserve has an additional $2.6 million that could be utilized in case
of emergency.
As shown in Table 8, the Wastewater Collection Utility CIP Reappropriation and Commitment
Reserves totaled $13.9 million at the end of Q1 FY 2016, of which $8.3 million was committed
to projects under contract.
Water Utility Overview
Due to the ongoing drought, the Water Fund continues to be volatile with respect to sales and
revenue. Because of the reductions in water use mandated by the SWRCB after the preparation
of the FY 2016 Financial Plan, sales revenues and purchase costs were revised downward and
Council activated the drought surcharge effective September 1, 2015.
The FY 2016 Financial Plan estimated water purchases of 4.77 million hundred cubic feet (CCF)
for FY 2016, but this was revised to 4.27 million CCF after the SWRCB mandate. Staff is
continuing to monitor revenues closely, and will likely return to City Council as part of the FY
2016 midyear budget review report with a recommendation to adjust revenues to align with
actual experience during the first six months of the fiscal year. The Water Operations Reserve
is projected to be within the guideline range, but should it be needed, the CIP Reserve has an
additional $13.3 million that could be utilized.
As shown in Table 9, the Water Utility CIP Reappropriation and Commitment Reserves totaled
$18.5 million at the end of Q1 FY 2016, of which $6.7 million was for projects under contract.
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
28
Fiber Optic Utility Overview
Fiber sales and expenses through the second quarter of 2016 are $2.0 million and $1.1 million
respectively, both are in alignment with the FY 2016 budget. Expenses are expected to increase
by $1.6 million from FY 2015 to FY 2016, $2.4 million to $4.0 million respectively, primarily due
to the Fiber Optic System Rebuild CIP project. The dark fiber network was constructed in the
early 1990s. Several sections of the dark fiber system have either reached capacity or are in
need of repair, thus limiting the City’s ability to add new customer connections. As shown in
Table 5, the Fiber Optics Rate Stabilization Reserve is projected to be $22.2 million as of the end
of FY 2016.
Table 4: Financial Projections, FY 2016
Sales Volumes
Revenue
($000)
Expense
($000)
Net Reserve Change
($000)
Electric Utility
Financial Plan 483,501,640 kWh 129,249 (139,587) (10,338)
Current Forecast 484,761,064 kWh 126,541 (140,176) (13,635)
Change from
Financial Plan
1,259,424 kWh (2,708) ( 589) (3,297)
0.3% (2.1%) 0.4%
Gas Utility
Financial Plan 11,489,114 therms 35,993 (40,683) (4,690)
Current Forecast 10,925,857 therms 34,973 (39,970) (4,997)
Change from
Financial Plan
‐563,257 therms (1,020) 713 ( 307)
‐4.9% (2.8%) (1.8%)
Water Utility
Financial Plan 2,585,722 ccf 41,517 (46,454) (4,937)
Current Forecast 2,163,798 ccf 39,570 (46,126) (6,556)
Change from
Financial Plan
‐421,924 CCF (1,947) 328 (1,619)
‐16.3% (4.7%) (4.7%)
Wastewater Collection Utility
Financial Plan 18,319 (20,164) (1,845)
Current Forecast 18,219 (20,164) (1,945)
Change from
Financial Plan
(100) ‐ ( 100)
0.1% 0.0%
Fiber Optic Utility
Financial Plan 4,842 (3,785) 1,057
Current Forecast 4,842 (3,958) 884
Change from
Financial Plan
0
0.0%
(173)
4.6%
(173)
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
29
Table 5: FY 2016 Operations Reserves ($000)
Electric
Supply
Electric
Distribution
Gas Water
Wastewater
Collection
Fiber
Optic *
Beginning 16,012 6,486 10,543 11,664 2,431 21,361
Projected Change (11,802) (1,833) (4,997) (6,556) (1,945) 884
Transfers 9,000 ‐ 3,400 4,700 3,950 ‐
FY 2016 Ending 13,210 4,653 8,946 9,808 4,436 22,245
Reserve Minimum 14,762 7,835 5,884 6,208 2,445 895
Reserve Maximum 29,523 15,670 11,768 12,415 6,112 2,238
* For Fiber Optics, the Reserve is the Rate Stabilization (not the Operations) Reserve
CIP Reserves (Reappropriations and Commitments) Summary
Table 6: Electric CIP Reappropriations and Commitments
Table 7: Gas CIP Reappropriations and Commitments
Table 8: Wastewater Collection Utility CIP Reappropriations and Commitments
.
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
30
Table 9: Water Utility CIP Reappropriations and Commitments
Includes unspent funds from previous years carried forward or reappropriated into the current fiscal year
**Equal to Reserve for Reappropriations + Reserve for Commitments (CIP Reserves).
Residential Bill Comparisons
Table 10: Residential Electric Bill Comparison ($/month)
As of February 1, 2016
Season Usage (KWh/mo) Palo Alto PG&E Santa Clara Roseville
Winter
(Nov ‐Apr)
300 28.57 54.45 34.16 53.70
453 (Median) 48.49 88.13 52.21 69.87
650 76.33 142.09 75.47 98.42
1200 172.03 333.61 140.38 184.87
Table 11: Residential Natural Gas Bill Comparison ($/month)
As of February 1, 2016
Season Usage (therms) Palo Alto
Menlo Park, Redwood City,
Mountain View, Los Altos, and
Santa Clara (PG&E Zone X)
Roseville
(PG&E Zone S)
Winter
(Nov‐May)
30 31.25 40.23 40.23
54 (Median) 48.34 72.42 72.42
80 77.16 117.37 118.25
150 163.10 245.51 246.39
Table 12: Residential Water Bill Comparison ($/month)
As of February 1, 2016
Usage CCF/month Palo Alto
Menlo
Park
Redwood
City
Mountain
View
Los
Altos
Santa
Clara Hayward
4 41.31 44.11 43.69 31.46 32.75 16.64 28.68
(Winter median) 7 63.47 62.25 57.13 48.77 44.11 29.12 48.42
(Annual median) 9 82.51 74.36 66.77 60.31 51.68 37.44 61.58
(Summer median) 14 130.11 106.12 95.46 89.16 71.58 58.24 96.24
25 234.83 176.80 182.14 187.23 115.85 104.00 181.49
Based on the FY 2013 BAWSCA survey, the fraction of SFPUC as the source of potable water supply
was 100% for Palo Alto, 95% for Menlo Park, 100% for Redwood City, 87% for Mountain View, 10%
for Santa Clara and 100% for Hayward.
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
31
Table 13: Residential Wastewater Collection (Sewer) Bill Comparison ($/month)
As of February 1, 2016
Palo Alto Menlo Park Redwood City Mountain View Los Altos Santa Clara Hayward
31.95 81.08 74.95 28.80 32.01 37.94 28.93
Table 14: Median Residential Overall Bill Comparison ($/month)
As of February 1, 2016
Utility and Usage Palo Alto
Menlo
Park
Redwood
City
Mountain
View Los Altos
Santa
Clara Hayward
Electricity (453 kWh/mo) $ 48.49 $ 88.13 $ 88.13 $ 88.13 $ 88.13 $ 52.21 $ 88.13
Gas (54 th/mo) 48.34 72.42 72.42 72.42 72.42 72.42 72.42
Wastewater 31.95 81.08 74.95 28.80 32.01 37.94 28.93
Water (9 CCF/mo) 82.51 74.36 66.77 60.31 51.68 37.44 61.58
TOTAL $211.29 $315.99 $302.27 $249.66 $244.24 $200.01 $251.06
Non‐Residential Bill Comparisons
Table 15: Non‐Residential Electric Bill Comparison ($/month)
As of February 1, 2016
Usage (KWh/mo) Palo Alto PG&E Santa Clara Roseville
1,000 127 202 175 139
160,000 17,245 23,348 19,961 20,029
500,000 50,430 64,325 61,120 49,694
2,000,000 178,800 272,313 236,299 188,852
Table 16: Non‐Residential Natural Gas Bill Comparison ($/month)
As of February 1, 2016
Usage (therms/mo) Palo Alto PG&E
500 518 572
5,000 4,510 4,953
10,000 9,231 8,859
50,000 44,711 38,104
CIP Project Detail
Tables showing the details regarding the Capital Improvement Program projects are shown in:
1. Table 18 for the Electric Utility;
2. Table 19 for the Gas Utility;
3. Table 20 for the Wastewater Collection Utility; and
4. Table 21 for the Water Utility
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
32
Table 17: FY 2016 Q2 Reserve Report from the City’s Financial System
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
33
Table 18: Electric Utility CIP Project Detail (pg 1/2)
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
34
Table 18: Electric Utility CIP Project Detail (pg 2/2)
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
35
Table 19: Gas Utility CIP Project Detail (pg 1/2)
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
36
Table 19: Gas Utility CIP Project Detail (pg 2/2)
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
37
Table 20: Water Utility CIP Project Detail
Utilities Quarterly Update for Second Quarter of FY 2016
March 2016
38
Table 21: Wastewater Collection Utility CIP Projects
Project #Project Name
Reappropriated /
Carried Forward from
Previous Years
Current Year
Funding
Budget
Amendments
Spending,
Current Year
Remaining in
CIP Reserve
Fund Commitments FY 2017 FY 2018 FY 2019 FY 2020
SEWER SYSTEM REHABILITATION AND AUGMENTATION (SSR/A) PROGRAM
WC‐07004 SSR/A ‐ Project 20 39,293 ‐ ‐ ‐ 39,293 ‐ ‐ ‐ ‐ ‐
WC‐08012 SSR/A ‐ Project 21 151,847 ‐ (151,847) ‐ ‐ ‐ ‐ ‐ ‐ ‐
WC‐09001 SSR/A ‐ Project 22 (42,912) ‐ 42,912 (176) (176) ‐ ‐ ‐ ‐ ‐
WC‐10002 SSR/A ‐ Project 23 982,263 ‐ ‐ ‐ 982,263 224,253 ‐ ‐ ‐ ‐
WC‐11000 SSR/A ‐ Project 24 2,340,130 206,084 (206,084) (268,736) 2,071,394 2,032,231 ‐ ‐ ‐ ‐
WC‐12001 SSR/A ‐ Project 25 2,686,175 528,246 (528,246) (233,134) 2,453,041 2,046,281 ‐ ‐ ‐ ‐
WC‐13001 SSR/A ‐ Project 26 3,163,649 268,014 (268,014) (289,627) 2,874,022 2,705,906 ‐ ‐ ‐ ‐
WC‐14001 SSR/A ‐ Project 27 216,417 3,358,133 (268,133) (79,938) 3,226,479 1 ‐ ‐ ‐ ‐
WC‐15001 SSR/A ‐ Project 28 ‐ 330,000 ‐ ‐ 330,000 ‐ 3,183,000 ‐ ‐ ‐
WC‐16001 SSR/A ‐ Project 29 ‐ ‐ ‐ ‐ ‐ ‐ 327,849 3,278,490 ‐ ‐
WC‐17001 SSR/A ‐ Project 30 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 337,684 3,376,845 ‐
WC‐19001 SSR/A ‐ Project 31 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 347,815 3,478,150
WC‐20000 SSR/A ‐ Project 32 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 358,249
WC‐21000 SSR/A ‐ Project 33 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐
Subtotal, Sewer Rehab./Augmentation 9,536,862 4,690,477 (1,379,412) (871,611) 11,976,316 7,008,672 3,510,849 3,616,174 3,724,660 3,836,399
ONGOING PROJECTS
WC‐13002 Fusion & Gen. Equip./Tools 78,132 50,000 (78,132) ‐ 50,000 ‐ 50,000 50,000 50,000 50,000
WC‐15002 WW System Improvements 435,981 232,000 (377,717) (578) 289,686 216,120 239,000 246,000 253,000 260,000
WC‐99013 Sewer / Manhole Rehab. 621,917 600,000 (506) (163,561) 1,057,850 1,015,451 618,000 636,540 655,636 675,305
Subtotal, Ongoing Projects 1,136,030 882,000 (456,355) (164,139) 1,397,536 1,231,571 907,000 932,540 958,636 985,305
CUSTOMER CONNECTIONS (FEE FUNDED)
WC‐80020 Sewer System Extensions 210,275 383,000 (305,227) (183,067) 104,981 57,994 394,000 405,820 417,995 430,534
Subtotal, Customer Connections 210,275 383,000 (305,227) (183,067) 104,981 57,994 394,000 405,820 417,995 430,534
GRAND TOTAL 10,883,167 5,955,477 (2,140,994) (1,218,817) 13,478,833 8,298,237 4,811,849 4,954,534 5,101,291 5,252,239
Funding Sources
Connection/Capacity Fees 383,000 (305,227) 394,000 405,820 417,995 430,534
Funded by Rates and Other Revenue 5,572,477 (1,835,767) 4,417,849 4,548,714 4,683,296 4,821,704
CIP‐RELATED RESERVES DETAIL
6/30/2015
(Actual) 9/30/2015
Reappropriations 2,700,167 5,180,596
Commitments 8,183,000 8,298,237