HomeMy WebLinkAbout2002-05-13 City Council (6)City of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER
AGENDA DATE:MAY 13, 2002 CMR 235: 02
SUBJECT:UTILITIES STRATEGIC PLAN PERFORMANCE
REPORT, JULY 2001 THROUGH FEBRUARY 2002
This is an informational report and no Council action is required.
BACKGROUND
On May 21,2001, the City Council approved the Utilities Strategic Implementation Plan
[CMR:223:01] and directed staff t0 make periodic progress reports on the performance of
the Utilities Department in meeting the objectives of .the strategic plan, Staff committed
to update.the UAC and City Council twice per year about the performance of the Utilities
Department. The adopted Utilities Strategic Plan is included in Attachment A. The
adopted plan consists of seven key strategies and four supporting objectives.
The first strategic plan performance report was presented to the UAC in November 2001,
and to City Council in January 2002 [CMR:129:02]. This initial report focused on
performance measures. Council indicated a desire to be presented with an additional
discuSsion of strategic plan activities. This report provides-key accomplishments and
activities as well as key performance measures for each of the strategic objectives. The
report also includes discussion of recommended tactical modifications to the Utilities
Strategic Implementation Planin order to adapt to the changing utility industry
environment. The Council-approved strategies remain unchanged. The attached report
(Attachment B) was presented to the UAC on April 10, 2002. UAC feedback from that
meeting is incorporated into this report.
DISCUSSION
Strategic Plan Evolution
This section of the report highlights important external events that have had a significant
impact on implementation of the Utilities Strategic Plan, and summarizes key tactics that
should be modified, in the existing Strategic Plan due to changes in the utility industry
environment.
CMR:235:02 Page 1 of 5
Significant external events affecting the Utilities’ operating environment and impacting
the evolution of the Utilities Strategic Plan include the bankruptcies of PG&E and Enron.
The California energy crisis also led to regulatory changes such as the elimination of
direct access for electric customers. The lack of a competitive market has necessitated
reprioritizing many of the tactics anticipated when the Utilities Strategic Plan was
originally crafted. Several suggested deletions represent consolidation of activities into
fewer tactics. These suggested improvements are summarized in the attached report, and
the UAC provided feedback to staff on the specific tactical adjustments. The Council-
approved strategies remain unchanged.
Key Accomplishments
This section of the report highlights major milestones, accomplishments, and issues tied
to the key strategies and supporting objectives. Major milestones and accomplishments
are from July 2001 through the end of February 2002. Discussion is organized by overall
organization and then by division.
¯Overall Utilities Organization
¯Engineering and Operations Division
o Electric Engineering & Operations
o WGW Engineering & Operations
¯Customer Support Services Division
¯Resource Management Division
Activities undertaken across all divisions asimportant tactics under the seven key
strategies have achieved numerous milestones and accomplishments that further the four
supporting objectives of the Utilities Strategic Plan. The accomplishments described in
the attached report are also summarized in Attachment C, which ,provides a cross-.
{eference relating each activity to the objectives and/or strategies to which it is most
closely related.
Summary Performance Measures
This section of the report provides a summary of the key performance metrics for each of
the four supporting objectives of the Utilities Strategic Plan. The report also provides
Utilities safety statistics.
The key metrics for the four supporting objectives of Customer Satisfaction,
Infrastructure Investment and Reliability, Financial Performance and Municipal Value
demonstrate successful progress towards achieving the objectives of the Utilities
Strategic Plan. Progress to date indicates that Utilities is on track to meet its objectives
for FY 2001/02.
Customer Satisfaction
Utilities staff have implemented an ongoing customer satisfaction feedback process.
CMR:235:02 Page 2 of 5
Customers are provided survey cards on which to describe their recent experience with
Utilities employees. Customer satisfaction is measured by comparing customer scores on
what they expected from the Utilities, to scores on what Utilities delivered to them.. The
"gap" is the difference between the level of service "expected" by the customer and the
level of service "delivered" to the customer. A high number indicates a high level of
delivered service. Figure 1 illustrates, for the past five quarters (1) raw scores for
expected service, (2) raw scores for delivered service, and (3) percent that delivered
service exceeded customer expectations.
7 15%
6 ---5.6
0
3Q-O0 4Q-O0 1Q-01 2Q-01 3Q:01
lO%
5%
o%
-5%
-10%
-15%
Expected (left axis)
Delivered (left axis)
Gap (right axis)
,Figure 1. Customer Satisfaction Survey Gap Analysis - Overall Performance
717 customers contacted 7/00 to 9/01; 272 response
¯ Overall, .Palo Alto utility customers give high ratings to the Utilities in meeting their
¯ expectations. In the third quarter, of 2001, the gap analysis indicates that Utilities has
exceeded customer expectations by nine percent overall. In general, customers give
Utilities very high ratings on courtesy and satisfactory ratings on timeliness in responding
to their needs.
Infrastructure Investment and Reliability
The key reliability measures for each of the four major infrastructure systems for which
Utilities is responsible are summarized in. Table 1. Utilities is on track to meet its
reliability objectives for FY 2001/02.
CMR:235:02 Page 3 of 5
Table 1. Key Infrastructure Reliability Measure Goals and YTD Achievements
Service Reliability Goal Achieved YTD
Electric:< 60 outage minutes/customer 106 mins with 11/01 storm
41 .mins/customer without storm
Natural Gas:95% < 4 hours for restoration 95%
Water:95% < 4 hours for restoration 97%
Wastewater:95% < 2 hours for restoration 89%. Expect 95% target by end
of FY 01-02
Financial Performance
The key measure of financial performance is achieving low and stable rates for Palo
Alto customers. The attached report provides detailed rate history and benchmarking
for residential, commercial and industrial rates for electric, gas, water, and wastewater
servicgs. Historical performance of typical residential bills for the four services for
which the Utilities Department is responsible are illustrated in .Figure 2. Although rates
have risen recently, the overall bill change was dominated by gas rate changes,,
anticipated to drop significantly in FY 02-03.
$200
$18o
$160
$140
$120
$100
$80
$60
$40
$20
$o
$99
$29
--.$32
$115
$41
$171
$150
99-00 Bill 00-01 Bill 01-02 Bill Projected
O2-03 Bill
[] Wastewater
[~Gas
[] Water
[] Electric
Total Monthly Bill
Figure 2. Typical Residential Utility Monthly Bill Components.
(Monthly Use: Gas: 100 therms winter, 30 therms summer; Water 14 CCF;
Electric: 500 kWh)
Municipal Value
Municipal ownership.benefits the City directly through transfers to the General Fund.
The Utilities’ excellent bond rating and status as a municipal government entity
enable access to advantageous cost of capital. In addition to these financial benefits,
local control and community values drive specific product & service development.
More specifically:
CMR:235:02 ¯ Page 4 of 5
¯General Fund: A portion of utility revenues provide steady support of City
government operations.
¯Leverage through consortia: Participating in groups of other government
organizations enables the Utilities Department to influence regulatory,
legislative, and other issues more effectively, and to behave differently than the
private sector players to mutual advantage.
¯Rate options: The City’s rates are Competitive, yet also respond to specific
customer class needs.
¯Renewable energy: The Future Green rate option supports electric purchases
from 100% .renewable sources.
¯Energy efficiency: Programs are tai!ored to Palo Alto customers’ interests.
¯Load management: Business customers participated in programs to provide
’rolling blackout "insurance" for Palo Alto customers during sudden ISO-
mandated load reductions
ATTACHMENTS
A:Utilities Strategic Plan
B:Utilities Strategic Plan Performance Report, July 2001 through February 2002
C:Strategic Plan Accomplishments Matrix
PREPARED BY:
Senior Resource Planner
APPROVED BY:
CITY MANAGER APPROVAL:
of Utilities
EMILY HARRISON
Assistant City Manager
CMR:235:02 Page 5 of 5
Attachment A I
MISSION STATEMENT
"To build value for our citizen owners, to provide dependable returns to the City and
citizens of Palo Alto, and to be the preferred full service utility provider while sustaining,
the environment."
SUPPORTING OBJECTIVES
1.Enhance customer satisfaction by delivering valued products and services.
2.Invest in utility infrastructure to deliver reliable service.
3.Provide superior financial performance to the City and competitive ratesto
customers.
4. To identify and maintain the unique advantages of municipal ownership.
STRATEGY 1:
STRATEGY 2:
STRATEGY 3:
STRATEGY 4:
STRA TEGY 5:
S TRA TEG Y 6:
S TRA TEG Y 7:
KEY STRATEGIES Years 2001-06
Operate distribution systems M a cost-effective manner.
Preserve a supply cost advantage compared to the market.price.
Streamline and manage business processes to allow CPAU to work
efficiently and cost-effectively.
Deliver products and services for competitive markets.
Attract and retain employees with critical skills and knowledge.
Maximize the General Fund transfers and maintain financial strength.
Implement programs that improve the quality of the environment.
Last Update: December 11, 2001 Page 1 of 4
KEY TACTICS FOR 7 STRATEGIES
S 1" Operate distribution systems in a cost-effective manner.
A. Accelerate the capital improvement program to reduce maintenance costs in
later years when competition will become more intense.
B. Offer distributed generation products where they meet customer and reliability
needs in an economically justifiable fashion.
C. Develop multi-year supplement contracts with local contractors to reinforce
staff’s installation of new water~ gas, and wastewater services.
D. Provide customized reliability solutions to meet customer needs.
IS 2: Preserve a supply cost advantage compared to the market price.
A. Explore alternative supply methods and projects to control the cost of electric,
gas, and water commodities to meet existing and future customer needs.
B. Investigate partnerships, alternative sources, and projects to secure low cost,
reliable transmission for commodity supplies.
C. Manage exposure to energy commodity price risk.
D. Enhance wholesale revenues through optimization of contractual rights for
transmission and generation.
E.Work through partner agencies such as BAWUA, TANC and NCPA to become
a more effective voice for our mutual benefit.
-IS 3: Streamline and manage business processes to allow CPAU to work efficiently & cost
effectively.
A. Develop, execute, and monitor service level agreements with other City
Departments.
B. Outsource certain support functions.
C. Review the City Charter for governance and organization changes, which
could improve Utilities success under deregulation.
D.Eliminate or streamline low value work.
E.Support City effort to streamline budget, administrative, and regulatory
processes.
Last Update: December 11, 2001 Page 2 of 4
F.Investigate a regulatory process where customer confidentiality is protected
to the extent possible.
G.Track and evaluate other departments’ charges to Utilities accounts.
S 4: Deliver products & services for competitive markets through establishing a brand
presence while providing customer valued products in a variety of areas.
A.Reliability services
B.Convenient customer bill payment options
C.Power quality services
D.Energy and water efficiency services
E.Financial assistance using CPAU’s low capital cost to assist customers to
obtain valued energy products and systems (e.g. backup generation)
F. Installation and maintenance services
G. Commodity products
H. Telecom products
I. Energy and water information and control services
J. Special Facilities and meteringoptions
K. Special customer contracts
L. Distributed generation devices
M. Pursue.profitable retail sales outside the City
N. Develop a competitive e-commerce position
S 5: Attract and retain employees with critical skills and knowledge.
A. Offer compensation and benefit packages that are competitive with private
industry and consistent with the local markets.
B. Evaluate hiring practices to allow the Utility to respond to a competitive
environment.
C. Promote a safe and drug free work place.
D. Evaluate establishing apprenticeship and recruiting programs.
I S 6: Maintain stable transfers to the General Fund.
A. Maintain reserves within established guidelines.
B. Balance transfers between enterprise funds to provide flexibility.
C. Maintain bond-financing ratings and consider it to fund major projects.
Last Update: December 11, 2001 Page 3 of 4
D.Assess the value of individual business units.
E.Optimize the economics of buying rather than leasing property.
F.Complete the work order cost system,
G.Design standby and/or exit charges to recover fixed or stranded costs.
H.Create performance measures and establish budgetary and cost monitoring
tools
I S 7: Implement programs that improve the quality of the environment.
A, Support implementation of the environmental components of the City’s
Comprehensive Plan.
B, Improve existing green pricing program.
C. Supportimplementation of the City’s Sustainability Program.
D. Support investment in future green resource projects.
E. Implement Public Benefits and demand side management programs.
F, Provide sustainability life cycle cost analysis to Pal~ Altocustomers.
G, Enhance conservation,
Last Update: December 11, 2001 Page 4 of 4
ATTACHMENT B
Utilities Strategic Plan Performance Report
July 2001 through February 2002
April 10 UAC Meeting
4/02/02
OUTLINE:
1.Strategic Plan Evolution
2.Key Accomplishments
Multi-Division
’Electric Engineering & Operations
WGW Engineering & Operations
Customer Support Services
Resource Management
3.Summary Performance Measures
4.Appendix: Utilities Strategic Plan Summary (with proposed revisions)
1. Strategic Plan Evolution
This section highlights important external events that have had a significant impact on
implementation of the Utilities Strategic Plan, and summarizes key tactics that should
be modified from the existing Strategic Plan due to changes in the utility industry
operating.environment.
Industry changes that have impacted Utilities operations during the review period
¯ PG&E barflcruptcy
The PG&E bankruptcy has posed significant challenges to Utilities staff, and has
become an important activity under $2 that had not been anticipated.
Enron banlcruptcy
Enron’s deteriorating credit rating and eventual bankruptcy required utilities staff to
implement emergency processes and controls to continue smooth delivery of gas
supplies to Palo Alto customers. Managing these interim operations and evaluating
and implementing a new replacement for gas operations has required more resources
for to $2 and $3 that had not been anticipated.
Direct Access (DA) suspension
The current regulatory environment for utilities requires that staff evaluate
implications of State suspension of DA and the costs and consumer interest of Palo
Alto’s DA programs. Based on the results of the evaluation,- utilities should decide
ATTACHMENT B
whether to continue, modify, or terminate gas and/or electric DA in Palo Alto. This
activity is a new tactic for $4.
California energy crisis
Throughout the summer, Utilities staff continued to be diverted to activities in
response to the energy crisis such as increased participation in efficiency programs,
installation of back up generation, increased portfolio and risk management
monitoring and accelerated City facility retrofit project oversight.
Proposed changes to the Utilities Strategic Plan
¯Recommended deletions:
S1B:
s3B:
$3C:
S3F:
$4C:
S4E:
S4K:
S4M:
S4N:.
S6D:
S6G:
Offer Distributed Generation (DG) products where they meet customer and
reliability needs in an economically justifiable fashion.
Outsource certain support functions.
Review the City Charter fc;r governance and .organizational changes, which
could improve Utilities success under deregulation.
Investigate a regulatory process where customer confidentiality is protected to
the extent-possible.
Power quality services.
Financial assistance using CPAU’s low capital cost to assist customers to
obtain valued.energy products and systems (e.g. backup generation)
Special customer contracts.
Pursue profitable retail sales outside the City.
Develop a competitive e-commerce position.
Assess the value of individual business units.
Design standby and/or exit charges to recover fixed or stranded costs.
Recommended additions:
S1E:Identify and implement measures to reduce the frequency of that contractors
accidentally rupture distribution system mains.
$40: Provide around-the-clock, 24 x 7 field customer service.
Recommended modifications:
$4:Reword "Deliver products & services for competitive markets through
establishing a brand presence while providing customer valued products in .a
variety of areas" to read "Deliver products & services valued by our
customers".
S4I.Combine "Energy and water information and control services" with S4D
"Energy and water efficiency service,s?’
S4L:Reword "Distributed generation devices" to read "Provide technical assistance
and standards for customers who wish to install distributed generation
equipment."
2
¯. ATTACHMENT B
Key Accomplishments
This section highlights major milestones, accomplishments, and issues tied to the Key
Strategies and Supporting Objectives. Major milestones and accomplishments are
from July 2001 through the end of February 2002.
Overall Utilities Organization
Completed COBUG generator project. (02, $1, $4)
Four natural gas generators have been installed at the Municipal .Service Center
(MSC) to replace the diesel units temporarily installed in Mawr 2001. The new natural
gas units are.able to provide up to 5.4 megawatts (MW) of backup power to the City
in the event of electricity use reductions requested by the California Independent
System Operator. This emergency backup capacity can also be used during other
major generation or transmission outages. The generators are permitted to operateup
to 2,600 hours per year.
Completed traffic signal LED upgrade. (02, 04, S 1)
The successful retrofit o~ incandescent lamps toenergy-efficient light emitting diode
(LED) technology at 89 intersections in Palo Alto’s traffic signal system was
completed. This project resulted in direct electric savings to the Utilities Department
and $90,000 in savings to the. City’s General Fund. The $681,000 project was funded
by the General Fund and the Utilities Department, in addition to a $190,000 grant
from the State of California.
Completed electric load curtailment program. (O 1, 02, 04, S 1)
The Spring and Summer Load Reduction Programs were designed, implemented and
terminated in 2001. These programs, designed to achieve voluntary load reductions
from large electric customers during critical shortages, combined communication
protocols, customer notifications, advanced metering, and on-line tracking and
reporting systems for customer reductions. Utilities terminated the programs in the
fall of 2001 with the cessation of the California electric crisis.
Modified both natural gas and electricity Direct Access programs. (O1, 03, 04, $2,
$4, $6)
Council approved staff’s recommendation to make adjustments to the electric and gas
Direct Access (DA) programs to minimize the financial risk for "captive", or
portfolio, customers. Staff implemented fixed-term gas rates (G-11) by providing
daily fixed prices to customers until all eligible customers selected a fixed-term rate.
All electric customers originally eligible for DA waived their rights to select another
supplier. Staff prepared reports to the Risk Oversight Committee about the expected
costs and revenues of the customers with fixed-term rates.
¯Spdnsored Covey Training for CPAU’s semor managers. ($3, S5)
3
ATTACHHENT B
After reviewing several ieadership training programs, Senior Managers selected the
Franklin-Covey model, "The Habits of Highly Effective People" and "The Four Roles
of Leadership.,’ since it was most aligned with the objectives and strategies of the
Utilities Strategic Plan. The training focuses on strengthening the character and
competence of the individuals in an organization. These managers and supervisors
continue to participate in monthly lunch-time sessions to encourage and enhance their
personal and professional growth.
Electric Engineering & Operations
¯Completed the design and construction of the Fiber to the Home Project (FTTH) in
early October 2001 and the trial is in progress. (O1, $4)
¯Completed all mandated California Public Utilities Commission General Order
(G.O.) 165 Inspections and Patrols. (SI)
Completed the connection of all electric customers in Underground District 37. (02,
Sl)
Upgraded the.distribution system serving the Stanford Business Park. (02, S1, $7)
Since inception of the Stanford Business Park Rebuilding project many upgrades
have been completed: 31 submersible switches have been replaced with 20 pad-
mounted switches; 400 submersible elbows and 9 submersible transformers have been
removed from the system; three 4 kV feeders have been eliminated; 24,000 feet of old
main line feeder cable has been removed; and 48,000 ft. of new main line feeder
along with 60,000 feet of local loop feeders have been installed.
Completed electric distribution conversion projects, upgrading from 4 kW to 12 kV.
(02, Sl)
The Stanford West Project and the Stanford Shopping Center 4 - 12 kV conversion
projects were completed with the exception of the Senior’s Center which is currently
on hold.
Design contracts were awarded for the following projects: Underground District 38,
Park Boulevard Bus rebuilding, Park Boulevard Breaker Relocation, Relay
Replacements at Quarry Road Substation and SCADA System Upgrades. (02, Sl)
Designed 336 work orders for new construction and system improvements. (O1)
WGW Engineering & Operations
Completed the design of 250 work oiders for new
distribution and collection systems. (O 1, 02)
service installations in the
4
ATTACHMENT B
¯Completed the Stanford Corridor Water, Gas and Sanitary Sewer Projects including
Stanford Shopping Center Improvements, Quarry.Road, Sand Hill Road, and Stanford
West Apartments. (O1, 02, S1)
¯Completed the design of 16,000 linear feet of water main for Water Main
Replacement 15. (O1, 02, S1)
Completed the design of 30,000 linear feet of gas main for Gas Main Replacement
11. (Ol, 02, Sl)
Completed 50% of the New Wastewater Collection System Master Plan :project. (02,
s1)
¯Completed 363 plan reviews for new customers. (O1, S 1, $3)
¯Awarded the construction contracts for Water Main Replacement Project 15 and Gas
Main Replacement Project 11. (01, 02, S1)
¯Completed construction on the following Water-Gas-Wastewater Capital
Improvement Program (CIP) projects: Sanitary Sewer Rehabilitation Project 9,
Sanitary Sewer Project 10, Water Main Replacement Project 14 and Gas Main
Replacement Project 10. (O1, 02, S1)
Completed the design and installation of.a remote control safety shut-off valve at Gas
Station Number 2. (O1, 02, S1, $3)
Completed the design for safety shut-off valves at Gas Stations 1 & 4. (O1, 02, Sl,
S3)
Completed. consultant selection and began negotiations t6 hire the. designer for the
Water Wells,. Regional Storage and Distribution Study projects. (O1, 02, S 1, S3)
Completed installation of 250 new water, gas and Sanitary sewer service work orders
in the distribution and collection systems. (O1, 02, S 1)
Completed 275 gas service transfers on CIP Gas Main Replacement Project 7. (O1,
02, S 1, S3)
Completed 40 gas main system connections on Gas Main Replacement 7 and Gas
Main Replacement 8. (O1, 02, S1, $3)
¯Completed installations of 30 new large diameter gas work orders for the Stanford
West Apartment Project. (O1, 02, S1)
¯Conducted a tour of the Palo Alto water system for local government officials and
other interested individuals to explain our water system, how it operates and the
planned improvements related to the 1999 system study. (O1, 02, S1, S4)
Customer Support Services
Increased green power participation by 220% from 2001 over year 2000. (01, 04, $4,
ST).
ATTACHMENT B
Consumer demand for green resources through the Utilities’ Future Green program
resulted in the purchase of 986 MWH of wind and biomass resources (6!8 MWh for
wind and 368 MWH of existing biomass). Customer comments regari:ling the
program’s complexity and user confusion has initiated a major program redesign
effort. The new program is expected to begin on July 1, 2002.
Funded selected CIP projects with Utility Revenue Bonds. ($6)
During FY01-02, Utilities issued approximately $24 million in revenue bonds to
finance selected CIP projects in the Water and Gas Fund. Utilities departed from the
traditional pay-as-you-go approach to fund capital projects for two primary reasons.
First, bond financing was used to supplement funding of a major one-time Water
Fund capital expenditure related to the planned E1 Camino Park Reservoir and Pump
Station as well as rehabilitation of well sites and water main replacements. Second,
borid financing will help provide rate relief to gas customers by funding the CII’ for
three years through revenue bonds instead of rates.
Achieved an excellent rating for 2002 Utility Revenue Bonds ($6)
Standard and Poors and Moodys awarded AA- and Aa3 ratings, respectively, on the
2002 Utility Revenue bonds. Proceeds from these bonds will be used for gas and
water capital improvements. While at the lower end of the "high-quality grade"
rating, the rating received is excellent given the volatile utility markets. The rating
agencies recognized the Utilities’ strong reserves, solid revenues and sound
management in the light of significant upheaval in the commodity markets. As
¯ Moody’s states, "The Aa3 rating on the current offering reflects ample coverage by
system revenues and rate stabilization funds, an affluent service area, satisfactory
legal provisions, and modest debt position." The City’s overall rating of AAA (a
rating based on issuing General Obligation bond debt) has not changed. The winning
bid on the bonds resulted in an interest cost of 4.70 percent.
Obtained a $680,000 grant for energy efficiency. (04, $7)
Utilities received a $680,000 grant from the California Energy Commission (CEC) as
part of its statewide Peak and Load Reduction Grant Program to upgrade lighting
efficiency in Palo Alto’s municipal buildings. The Lighting Retrofit Project involved
the replacement and recycling of approximately 10,000 inefficient lamps with highly
efficient lamps and.ballasts in 60 city government facilities. The total cost of the
project was estimated at $780,000 of which nearly 85 percent will be covered by the
~CEC grant. Energy .and cost savings to the City and taxpayers of Palo Alto are
estimated at 1,5 million kilowatt-hours, or approximately $100,000 annually in
savings. Thus, the net cost to the City for this project is approximately $100,000,
which will be offset by the first year’s energy savings. The energy efficiency upgrade
project is a component of the Water and Energy Management Plan for City facilities
developed last year by the City staff on the interdepartmental "Sustainability
Committee
ATTACHMENT B
Completed the Residential Energy Advantage Program. (O1, $4, $7)
Palo Alto residents invested significantly in energy improvements as the highly
popular Residential Energy Advantage Program (EAP) ended in December 2001. The
$250,000 rebate activity for December 2001 alone was twice the monthly norm as
residents recognized that this was the last opportunity to participate in the program.
Although EAP has ended, a new efficiency incentive program will be rolled out on
February 1, 2002. The new program, Palo Alto Smart Energy Program, will include
some of the rebate measures of EAP as well as add some new ones such as compact
fluorescent lamps and do-it-yourself window insulation ldts. In addition, all federal
ENERGY STARTM products will qualify for rebates.
Developed a Public Benefits Plan for 2002-03. (O1, $4, S7)
OmNovember 19, 2001, Utilities recommended and obtained City Council approval
of the FY 2001-03 Public Benefits and DSM plans. Included were proposals to
establish program "sunset dates" in order to add new programs in an organized
manner, develop new programs for local tax-funded institutions such as the City of
Palo Alto and the Palo Alto Unified School District (that do not have the tax
advantages of other customers for infrastructure improvements), a new construction
program that focuses on incorporating higher efficiency improvements into the
building design phase, and a special package of incentives for the traditionally
inefficient Eichler-style home.
Expanded Field Customer Service to a 24 x 7 Operation (S4)
To enhance the safety and reliability of utilities in Palo Alto, Utilities Field Customer
Service employees moved to an around-the-clock operation on January 1, 2002.
Although staff has always handled utility emergencies 24 hours a day, 7 days a week
(24x7), previously staff came in on an on-call basis. Now, on-duty Utilities personnel
in town respond to emergencies as well as routine customer appointments 24 hours a
day, 7 days a week. Such emergencies may involve gas leaks, water main breaks, or
power disruptions. An on-duty presence in town means that the Utility can respond
more quicldy than if the employee is coming from his residence, which may be as far
away as San Jose. As expected, response times have significantly improved. Besides
being ready and available to address emergencies, the expanded Field Service
coverage allows customers to schedule any service request at their convenience on
week-ends or any hour of the evening and early morning. Such appointments include
service turn-ons/offs, gas furnace pilot re-lights, or high consumption investigations.
Resource Management
Negotiated a long-term wholesale gas supply contract. (O1, 03, $2, $3)
For FY 01-02, a new type Of gas contract was negotiated to increase the ability of the
City to obtain competitive prices from suppliers. The contract is for operational
services such as daily gas management as well as to supply the City’s residual gas
supply needs. The new contract allowed the City to use multiple suppliers in order to
7
ATTACHMENT B
obtain competitive forward prices for gas while limiting exposure to volatile market
prices. The contract also shielded CPAU fi:om daily price fluctuations. This is the first
time in recent history that Utilities has negotiated a contract that allowed for gas
deliveries by third party suppliers. The contract, however, was terminated on
November 30, 2001, as the supplier (Enron) was unable to perform.
Continued reliable gas operations despite loss of primary supplier. (O1, 03, $2)
In light of Enron’s worsening financial situation, Utilities terminated all Enron
contracts, including its natural gasone. Staff quickly arranged with PG&E and an
interim gas pool manager to change, operational responsibilities and to secure gas
supplies so that there would be no disruption of gas service to Palo Alto customers.
The gas purchases formerly completed with Enron were quickly re-hedged so as to
limit the price risk exposure resulting from the contract termination.
Achieved natural gas cost stability due to management of gas portfolio. (O1, 03, $2,
S6)
In midst, of extremely high gas prices in the fall and winter of 2000,. staff
implemented a 3-year "ladder" for gas supply purchasing. To minimize price
uncertainty, additional .gas was purchased for FY 01-02. Although these purchases
resulted in temporarily higher rates than PG&E’s, Utilities achieved its goal of gas
cost stability. As natural gas prices came down, Utilities purchased additional
resources for FY 02-03 in order to capture favorable market prices in early 2002.
These purchases should result in a rate decrease effective July 1, 2002, pending
Council approval,
Obtained Council approval of four Primary Objectives in Developing the Electric
Supply Portfolio Plan. ($2)
The four Primary Objectives in Developing the Electric Supply Portfolio Plan were
presented and approved by the UAC September 251 2001, and approved by City
Council on November 13, 2001 [CMR 425:01]. These objectives will. provide
direction for Utilities when developing and managing the electric portfolio.
Ensure low and stable electric supply rates for customers.
Provide superior financial performance to customers and the City by maintaining
a supply portfolio cost advantage compared to market cost and the retail supply
rate advantage compared to PG&E.
3. Enhance supply reliability to meet City and customer needs by pursuing
opportunities including transmission system upgrades and local generation.
4.Balance 6nvironment, local reliability, rates and cost. impacts when considering
renewable resource and energy efficiency in~cestments.
¯Conducted cogeneration study at a Key Customer site. (O1, S1, $4)
ATTACHHENT B
A possible electricity resource within Palo Alto is Distributed Generation (DG), a
source that could, generate up to 20 MW and may be installed on customer premises
or Utilities facilities. A feasibility study for a large industrial Utilities’ customer was
conducted and concludes that there is potential for a combined heat and power (CHP
or cogeneration) application at this site with a customer payback of 7-10 years. Low
electric rates in Palo Alto and high natural gas market prices, however, reduce the
cost-effectiveness of such an investment for customer-owned generation. Adequate
low-cost electric supply resources currently in the electric portfolio for the next few
years also reduce the cost-effectiveness for a utility-owned plant of this scale (1-2
MW).
Completed local generation feasibility study in conjunction with Northern California
Power Agency (NCPA). (02, 04, S2, $4)
A power plant siting study, funded by NCPA, included an initial screening of a 50-
100 MW combined-¢ycle power plant located in Palo Alto adjacent to the Regional
Water Quality Control Plant (RWQCP), along wlth several other potential sites within
the territory of other utilities. Space and stack height regulations limit the plant scale
at the site in Palo Alto but the study concluded that some of the other sites evaluated
(Lodi and Roseville) were more economic. It may be feasible to locate a smaller
generation facility ( 20-50 MW) somewhere in Palo Alto to tie into Park Boulevard,
Hansen or Hanover substations. Although sites for a medium-scale-generator range
have not yet been evaluated, local generation could have valuable reliability
implications.
Achieved favorable FERC rulings in PG&E bankruptcy cases. ($2, 03)
FERC 205 Ruling in Palo Alto’s favor disallowed PG&E’s attempt to move
Western’s 2948A contract to Market Rates. After a highly accelerated eight-
month legal battle, the Federal Energy Regulatory Commission (FERC) ruled
October 24, 2001 that Padific Gas and Electric Company (PG&E) did not have the
contractual authority to unilaterally amend a 35-year old contract with the
Western Area Power Administration (Western), one of Palo Alto’s major
electricity sources. Had FERC ruled in PG&E’s favor, the higher rates proposed
by PG&E would have gone into effect on October 28, 2001 and would have cost
Palo Alto an additional $500,000 a month.
FERC granted a 5-month suspension of Termination of PG&E Interconnectibn
Agreements on March 13, 2002. This ruling moves the potential termination date
from April 1 to September 1, 2002. FERC will oversee settlement discussions.
Canceled supply contracts with a defaulting Enron. (S2, 03)
On November 30, 2001, the City terminated three natural gas contracts and one 25
megawatt (MW) electricity contract between the City of Palo Alto and Enron. The
City cancelled all of its energy supply and services contracts with Enron Power
Marketing Inc. and Enron North America Corporation in light of the downgrade of
Enron debt to junk bond status. Enron’s deteriorating financial condition and
9
ATTACHMENT B
creditworthiness led to the conclusion that Enron would be unable to provide reliable
delivery of commodities and services for the full duration 0fthese supply contracts.
Served in a leadership position on the Water Resources Committee of the Bay Area
Water Users Association. (BAWUA. (04, $2, $7)
A Utilities staff member acted as the chair of the Bay Area Water Users Association’s
Water Resource. Committee. The committee implemented a pilot water conservation
program for washing machine rebates and any interested BAWUA member agency is
eligible to participate in this regionally administered program.
Took a leadership role with BAWUA to pressure the San Francisco Public Utilities
Commission to fix the regional Hetch Hetchy water system.(O2, 04, $2)
Utilities staff has taken a leadership role in advocating that the San Francisco Public
Utilities Commission (SFPUC) needs to finance and fix the regional water system.
The SFPUC hasnot adopted or. implemented a Capital Improvement Program (CIP)
to address system deficiencies identified in its own reports. Studies indicate that an
emergency such as a major earthquake could leave many agencies, including Palo
Alto, without water for up to 60 days. Lack of response by the SFPUC led the
BAWUA to turn to the political arena to fred support. Support coalesced with the
leadership ofPalo Alto’s 2001 Mayor, Sandy Eakins, her meeting with San Francisco
Mayor Willie Brown and other BAWUA agency elected officials, and Utilities staff
organizing and urging attendance of elected officials and BAWUA representatives at
Assemblyman Lou Papan’s town hall meetings in September, October and December
2001.
Managed town hall meetings and Council study sessions on the reliability of the local
and regional water system. (02, 04, S1)
On September 19, 2001, Utilities and BAWUA provided an update to City
Council on the state of the regional water system managed by the SFPUC,
BAWUA warned that Hetch Hetchy system users could be without water for up to
60 days and the SFPUC has been slow to repair and upgrade the system. Utilities
provided an overview of local CIP projects which would improve Palo Alto’s
emergency preparedness in order to survive long term outages.
On October 30, Utilities hosted a community discussion regarding alternate
governance options for the Hetch Hetehy regional water system currently owned
and operated by the city and county of San Francisco. Assemblyman Lou Papan
(D-Millbrae) organized the town hall meeting to collect input to formulate a
¯ legislative proposal in January 2002 to address the governance of the water
system.
Plans were made for a Council study session for March 11 on the risks to Palo
Alto’s water supply in the event of a large earthquake and what is being done
locally and regionally to reduce those risks. Utilities staff and Palo Alto’s elected
officials have undertaken a multi-pronged approach to address these local and
regional water supply risks.
10
ATTACHHENT B
Conducted an assessment of the Risk Management Program. (03, $2, $4, $6)
Utilities engaged Deloitte and Touche (D&T) in 2001 to evaluate Utilities’ risk.
management .control infrastructure. D&T recommended improvements in several
areas including: reorganizing and-updating the risk management policies, guidelines,
and procedures; establishing credit risk management guidelines; and creating
additional risk management reports for improved oversight. In response, Utilities staff
has developed risk management reports for the Risk Oversight Committee (ROC)
which provide detailed information as to oversight, risk exposure, and portfolio
performance. Staff has also developed monthly reports for the ROC to provide
detailed information on risk management issues ’that arise as well as ongoing
performance indicators, and current and historical market prices. Staff ~s continuing
to improve the quality and usefulness of the information in these reports, and to
address the other remaining recommendations.
o Summary Performance Measures for Supporting Objectives
This section provides a summary of the key performance metrics for each of the four
Supporting Objectives of-the Utilities Strategic Plan. More detail on these and other
impact measures are provided in the UAC quarterly reports.
A. Customer Satisfaction: Customer Satisfaction Gap Analysis
Utilities staff implements an ongoing customer satisfaction feedback process. Customers
are provided, survey cards on which to describe their recent experience with Utilities
employees such as those performing routine field work, overseeing construction projects,
handling an onsite visit, administering an efficiency program, etc. This data is collected
on an ongoing basis and analyzed on a quarterly basis. The "gap" is the difference
between the level of service "Expected" by the customer and the level of service
"Delivered To" the customer. Customer Satisfaction is measured by comparing 1) the
customer’s scores on what they expected from the Utilities, to 2) their scores On what
Utilities delivered to them. A high number indicates a high level of delivered service.
The tables below show for the past five quarters (1) raw scores for delivered service and
.(2) percent that delivered service exceeded customer expectations.
Gap Analysis - Average Raw Score for Delivered Service (Scale 1 to 7)
¯2000 2001
3Q 4Q 1Q .2Q 3Q
WaterGasWastewtr Ops 5.7 5.1 6.1 6.1 5.8
Energy Efficiency Program 6.4 5.9 6.7
Utilities Engineering 5.8 ¯ 5.9 6.6 6.4 4.2
OVERALL 5.7 5.1 6.2 ,6.0 6.1
11
ATTACHMENT B
Gap Analysis - % Exceeding Customer Expectations at Point of Contact
2000 2001
WaterGasWastewtr Ops 1%-11%7%7%6%
Energy Efficiency Program 7%3 %13%
Utilities Engineering 4% -- 1%11%21%_-26%
OVERALL 1%-11%7%6%9%
Conclusions:
¯Overall, Palo Alto utility customers give high ratings to the Utilities in meeting
their expectations. In the Third Quarter of 2001, the Gap Analysis indicates that
Utilities has exceeded customer expectations by nine percent overall.
¯In general, customers give Utilities very high ratings on Courtesy and satisfactory
ratings on Timeliness in responding to their needs.
¯Customer comments continue be very positive, and all customer feed back is used
to help improve services where needed,
¯Satisfaction ratings in Public Benefits / Energy Efficiency remain high.
¯There is some variability in the Utilities Engineering scores, due to lower sample
sizes in some quarters, but an overall positive score was also achieved in that area.
Infrastructure Investment and Reliabili.ty:
¯ Electric: Average outages as number of outage minutes per customer. (O1,$1)
Outage minutes are on track to meet the year=end goal of less than 60 minutes per
customer average. These numbers exclude the November 2001 Storm Data.
,.. 100.
a0
$ e0
£ 40
t-
20
Electric Service Interruptions FY 01-02
120 104.3106.5
98.1....~..___-.~JAil outage data ]
’ 73.-. "
IGoal- 60 minutes per customer per year
!
/38.9 41.1
............................................................
1.0
July Aug Sep Oct Nov Dec Jan Feb Mar Apt May Jun
I*A~erage for storm on 1/24/01 is 65.4 minutes ]
¯ WGW: Service Restoration times. (Ol,Sl)
Water service restoration times are better than target.
12
ATTACHHENT B
Gas service restoration times are better than target.
Wastewater service restoration is currently below target due to major storm
responses, but restoration times are on track to meet the target for FY 01-02.
Water System O&M -Mainline Leak Repairs
9.5% service restoration in 4 hrs. or less. Shut Down Main To Make Repairs
Fiscal Year 01/02
40 .
30 ~ .........................................................~°-----~-~-:-------t .........:..~.~.r...u.:!.o ...................o ~1 .........................................................7t ......../ ...........t ........°"~°" ..................=,~I............. .............7.i.~ .If. ii:::I ...........¯
,o~ ...........................7.-.t ~, ::::::::::: ....... .............~ .....o ~,~:~:~.~,:-’~-~~:~~ i--.-,,.,,---.--,=~,.,~:~.:~.=~,. .......
Break N urn be~"
I -~-Target -----Actual
Graph 3 - As of February 2002
97% service restored within 4 hrs.
32-unplanned 0-planned
Total No. of Breaks- 32
Avg. Hrs. to Repair- 5.2
including disinfection time
Gas System O&M - Mainline Leak Repairs
Target 95% gas service restoration in 4 hours or less
Fiscal Year 01/02
1 3 5 7 9 11 13 t5 17 19 2t 23 25 27 2e 31 33 35 37 3g 41 43 45 47 49 5t 53
1~4 HourLImltTarget ~--ActualRepalrTIme I
Graph 5 - As of February 2002
95% of.repairs completed within 4 hours
50-unplanned,4 -planned
Total No. of Leaks- 54
Avg. Hrs. to Repair- 2,3
13
ATTACHMENT B
Wastewater O&M - System Stoppages
95% Response/Clear in two hours or less
Fiscal Year 00101
3.5
Stoppage Number
I~Terget ~Actu=, I
Graph 8 - As of" February 2001 Total Stoppages.- 36
8g% of stoppages cleared within 2 hours Avg. Hrs. to clean- 1.hrs.
14
ATTACHMENT B
C. Financial Performance and Competitive Rates: Rate Comparisons
Palo Alto’s utility rates are benchmarked against PG&E for electric and gas rates, and
benchmarked against nearby cities for water and wastewgter rates. Comparisons are
shown for total monthly bills of an average residential, commercial and industrial
customer for electric, gas, and water, and for an average residential customer for
wastewater.
As part of this year’s budget review for FY2002-03, Utilities is proposing three rate
changes to be effective July 1, 2002, pending Council approval. The net impact of the
proposed rate changes is expected to be an overall decrease of nearly 9 percent or
$240 per year in residential customer bills. The proposed change~ are for a natural gas
decrease of 32-36%, a water increaseof 20% and a wastewater increase of 25%.
15
ATTACHMENT B
$10o
$90
$80
$7o
$60
$50
$4O
$30
$20
$10
$-
$30,000
$25,000
$20,000
$15,000
$10,000
$5,ooo
$-
$7oo,ooo
$600,000
$5o0,ooo
$4oo,ooo
$300,000
$200,000
$1oo,ooo
$-
History of Average Residential Electric Bills
650 kwhlmonth
98-99 99-00 00-01 01-02
Fiscal Year
[r~ Pa,o Alto ¯ PG&EI
History of Average Commercial Electric Bills
200,000 kwh & 500 kw/month
98-99 99-00 00-01 01-02
Fisca I Year
[m Palo Alto ¯ PG&E1
History of Average Industrial Electric Bills
5,500,000 kwh & 10,000 kw/month
98-99 99-00 00-01 01-02
Fiscal Year
] 13 Palo Alto [] PG&E 1
Projected
02-03
Projected
02-03
Pr~ected
02-03
ATTACHMENT B
$100
$9O
$80
$70
$60
$50
$40
$30
$20.
$1o
$-
$8,000
$7,000
$6,000
$5,000
$4:000
~. $3,000
$2.ooo
$1,ooo
$-
$40,000
$35,o00
$3O,0OO
$25,000
$20,000
$15,ooo
$10,000
$5.0o0
$-
History of Average Residential Gas Bills
30 therms summer, 100 therms winter
98-99 99-00 00-01 Estimated Projected
01-02" 02-03
Fiscal Year
*F:~.-,&Echanges gas prices monthly; FG&E fulure costs are eslimaled
11~ Palo Alto ¯ PG&E J
History of Average Commercial Gas Bills
5000 therms I month; bills averaged for summerlwinter
98-99 99-00 00-01 Estimated Projected
01 -O2* O2-O3
Piscal Year
*FG&Echang~s gas prices monthly; F~Efulure costs areeslimated
Ira Pal0 Alto ¯ PG&Ej
History of Average Industrial Gas Bills
30,000 therms I month; bills averaged for summer/winter
98-99 99-00 00-0’1 Estimated Projected
01-02* 02-03
Fiscal Year
*PG&Echanges gas prices rnonthty; FG&Efuture costs are eslirnated
lm Palo Alto m PG&E J
17
ATTACHMENT B
History of Average Residential Water Bills
14 ccf/month
$45
$4O
. $35
$3O
$25
$2O
$15
$10
$5.
$-
98-99 99-00 00-01.01-02
Fiscal Year
Projected
02-03
IBPalo Alto ¯ Menlo Park [] Redwood City [] Los Altos ¯ Mount¯an View
History of Average Commercial Water Bills
300 ccf/month, 3’; meter
$1,000
$9OO
$8OO
$7o0
$600
$5oo
$400
$3oo
$20o
$1oo
$-
98-99 99-00 00-01 01-02 Projected
02-03
Fiscal Year
IB Palo Alto ¯ Menlo Park 13 Redwood City 13 Los Altos ¯ Mount¯an View
History of Average Industrial Water Bills
3000 ccfl month, 6" meter
$10,000
$9,000
$8,OOO
$7,OOO
$6,000
$5,ooo
$4,000
$3,ooo
$2,ooo
$1,000
$-
98-99 99-00 00-01 01-02 Projected
02-03
Fiscal Year.
tB Palo Alto ¯ Menlo Park 13 Redwood City 13 Los Altos ¯ Mount¯an View
ATTACHMENT B
History of Average Residential Wastewater Bills
$25
$2O
$15
$10
$5
98-99 99’00 00-01 01-02 Projected
02-03
Fiscal Year
I[] Palo Alto ¯ Menlo Park [] Redwood City ¯ Mountian View E] Los Altos
D. Municipal Ownership
In addition to excellent bond ratings discussed in Section 2: Key Accomplishments and
the concomitant, advantageous cost of capital, a key element of value is created for Palo
Alto utilities customers due to municipal ownership through the special products and
customized services that have been made available that are otherwise unavailable to
customers of investor-owned utilities. These include:
¯Fixed-term gas rate (G-11) and managed portfolio gas rate (G-7). These rates
provide rate certainty for large customers for terms of up to 24 months.
¯"Future Green".renewable energy rate options. These rates provide all Palo :Alto
-electric customers the opportunity to subscribe for a small premium to electric
purchases made by Utilities that are generated from 100% renewable resources.
¯Energy conservation programs tailored to Palo Alto’s interests. The residential
advantage program enjoyed high participation rates and resulted in replacement of
over 4 acres of old residential, windows with high-efficiency double-glazed
windows. New programs are designed to meet local needs and are subject to
¯ approval by City Council rather than the California Energy Commission or
California Public Utilities Commission.
¯Load curtailment programs that provided rolling blackout "insurance" for Palo
Alto customers. Compliance with sudden ISO-mandated load reductions was
partly accomplished through cooperation with large customers instead of
cumbersome contracts.
19
ATTACHMENT B
E. Safety
Although safety activities are not mentioned specifically in the Utilities Strategic Plan,
proper safety equipment and training is the foundation of a safe work environment.
Consequently,.-safety statistics for all Utilities operations and activities are monitored and
reported on an ongoing basis.
Claims Frequency for the calendar year 2001 was down for Utilities from 21% of
the City’s total in 2000 to 17%.of the City’s total in 2001.
¯Claims cost also decreased fo~ Utilities from 21% of the City’s total to 8% in
2001.
¯Water Gas Wastewater Engineering & Operations went 485 days without a lost
¯time injury. Electric Engineering & Operations went 547 days without a lost work
time injury.
¯Engineering and Operations went over 10 months without a single automotive
incident.
Utilities SafetyStatistics Fiscal Year 2001-02 YTD (7/01 - 2/02)
Division OSHA Lost Time Avoidable Unavoidable
Recordable ,Injuries Automotive Automotive
Injuries Incidents Incidents
Electric 4 0 0 1
WGW 4 1 5 1
20
ATTACHMENT B
APPENDIX: Utilities Strategic Plan Summary (with proposed edits shown)
MISSION
["To build value for our citizen owners to provide dependable returns to the City and citizens of [
IPalo Alto and to be the preferred full service utility provider while sustaining the environment."I
SUPPORTING OBJECTIVES
1. Enhance customer satisfaction by delivering valued products and services.
2. Invest in utility infrastructure to deliver reliable service.
3. Provide superior financial performance to the City and competitive rates to customers.
4. To identify and maintain the Unique advantages of municipal ownership.
KEY STRATEGIES, Years 2001-06
STRATEGY 1." Operate distribution systems in a.cost-effective manner.
STRATEGY2."
STRATEGY 3."
STRATEGY 4:
STRA TEGY 5:
STRATEGY 6:
STRATEGY 7:
Preserve a supply cost advantage compared to the market price.
Streamline and manage business processes to allow CPAU to work efficiently
and cost-effectively.
Deliver products and services for competitive markets.
Attract and retain employees with critical skills and knowledge.
Maximize the General Fund transfers and maintain financial strength.
Implement programs that improve the quality of the environment.
KEY STRATEGIES with TACTICS
STRATEGY 1: Operate distribution ~ystems in a cost-effective manner.
A.Accelerate the capital improvement program to reduce maintenance costs in later years when
competition will become more intense.
eccnc~Jca!!y justifiaU~!e fa~b.’:cn.
C.Develop multi-year supplement contracts with local contractors to reinforce staffs installation of new
water, gas, and wastewater services
D.Provide customized reliability solutions to meet customer needs.
E. Identify and implement measures to reduce frequency contractors accidentally rupture mains.
STRATEGY 2: Preserve a supply cost advantage compared to the market price.
A.Explore alternative supply methods and projects to control the cost of electric, gas, and water
commodities to meet existing and future customer needs.
B.Investigate partnerships, alternative sources, and projects to secure low cost, reliable transmission for
commodity supplies.
C.Manage exposure to energy commodity price risk.
D.Enhance wholesale revenues through optimization of contractual rights for transmission and
generation.
E.Work through partner agencies such as BAWUA, TANC and NCPA to become a more effective vmce
for our mutual benefit.
21
ATTACHHENT B
STRATEGY 3: Streamline and manage business processes to allow CPAU to work efficiently & cost
effectively.
A. -Develop, execute, and monitor service level agreements with other City Departments.
succe~ under dereg~,a!ation.
D.Eliminate or streamline low value work.
E.Support City effort to streamline budget, administrative, and regulatory processes.
Track and evaluate other departments’ charges to Utilities accounts.
STRATEGY 4: Deliver products & eervice~
v,’~,A!e provid~g valued by Our cu~tomerq -;a!u~d prc~’act~ ;..~. a va~ety of area~.
A.. Reliability services
B.Convenient customer billpayment and self-service options
D.Energy and water efficiency, information and control services
......................... ~, ............v .............................................gY
F.Installation and maintenance services
G.Commodity products
H.Te’lecom products
I.~ ........a .......;,~" ....; ....,~ ......~ ....;~° [.combine with 4d,]
J.Special Facilities and metering options
K.Special customer
L.Provide technical assistance and standards for customers who wish to install distributed generation
equipment Dis~ibuted generation gevices
O. Provide 24 x 7 field customer service
STRATEGY 5: Attract and retain employees with critical skills andknowledge.
A. Offer compensation and benefit packages that are competitive with private industry and consistent with
the local markets.
B.Evaluate hiring practices to allow the Utility to respond to a competitive environment.
C.Promote a safe and drug flee work place.
D.Evaluate establishing apprenticeship and recruiting programs.
STRATEGY 6: Maintain stable transfers to the ~eneral Fund.
A.Maintain reserves within established guidelines.
B.Balance transfers between enterprise funds to provide flexibility.
C.Maintain bond-financing ratings and consider it to fund major projects.
E.Optimize the economics of buying rather than leasing property.
F.Complete the work order cost system.
H. Create performance measures and establish budgetary and cost monitoring tools.
STRATEGY 7: Implement programs that improve the quality of the environment.
A.Support implementation of the environmental components of the City’s Comprehensive Plan.
B.Improve existing green pricing program.
C.Support implementation of the City’s Sustainability Program.
D.Support investment in future green resource projects.
E.Implement Public Benefits and demand side management programs.
F.Provide sustainability life cycle cost analysis to Palo Alto customers.
G.Enhance conservation.
22
A3-1"ACH MENT C
Strategic Plan Accomplishments Matrix
ACTIVITY
Multi-Division
COBUG generator project completed
Traffic signal LED upgrade completed.
Completed load curtailment program.
Customer choice program adjusted.
Covey Training .
Customer SupportServices
Green power use up.220% 2001 over year 2000.
Selected CIP proiects funded with Revenue Bonds.
mS~EO~.r~
City receives excellent ratings on 2002 Utility Revenue Bonds
$680,000 grant for energy efficiency..
Residential Energy Advantage Program completed.
Public Benefits Plan in place for 2002-03.
Expansion of Field Customer Service to 24 x 7 Operation
Resource Management
Long-term wholesale gas-supply contract negotiated
Gas operations continued reliably even with loss of supplier
Gas portfolio management leads to gas cost stability
Council approved Primary Objectives in Developing the Electric
Supply Portfolio Plan
Cogeneration study at key customer site conducted.
Local generation feasibility study completed in conjunction with
NCPA.
FERC rulings in PG&E bankruptcy cases favorable.
Contracts canceled with a defaulting Enron.
Leadership on BAWUA Water Resources Committee
Regional water agency takes on lack of performance by San
Francisco
Water system town hall meetings held.
Risk Management program assessment conducted.
Page 1
A3-1"ACH MENT C
Strategic P!an Accomplishments Matrix
ACTIVITY
Electric Engineering & Operations
Design and construction of the Fiber to the Home Project completed.
Completed all mandated G.C). 165 Inspections and Patrols.
Completed the connection of all electric customers in Underground
District 37.
Stanford Business Park Rebuilding proiect.
The Stanford West Project and the Stanford Shopping Center 4-12
kV conversion proiects mostly completed.
Design Contracts were awarded for the several infrastructure
projects.
336 work orders for new construction and system improvement.
WGW Engineering & Operations
250 work orders for new service installations.
Stanford Corridor Water, Gas and Sanitary Sewer Projects
completed.
Completed design of 16,000 linear feet of water main for WMR 15.
Completed design of 30~000 linear feet of gas main for GMR 11.
New Wastewater Collection System Master Plan project 50%
complete.
1363 plan reviews for new customers.
Construction contracts awarded for Water Main Replacement Project
15 and Gas Main Replacement Project 11.
Construction completed on the four WGW CIP projects.
Safety shut-off valve upgrades for.Gas Stations 1, 2~ & 4.
Vendor selection progress for the Water Wells, Regional Storage
and Distribution Study proiects.
250 new water, gas and sanitary sewer service work orders.
275-gas service transfers on Gas CIP Gas Main replacement proje.ct7
40 gas main system connections on GMR 7 and GMR 8.
30 new large diameter gas work orders for the Stanford West
Apartment ProiectTour of the Palo Alto water system conducted for local government
officials and other interested individuals.
~8
¯ ,.L Page 2