HomeMy WebLinkAboutStaff Report 3330
City of Palo Alto (ID # 3330)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 12/10/2012
City of Palo Alto Page 1
Summary Title: Residential CustomerConnect and Time-of-Use Rate Pilot
Title: Finance Committee Recommendation to Approve the Residential
CustomerConnect Pilot Program, Approve a Contract with Elster Solutions
LLC for up to $450,455, and Adopt a Resolution Approving Pilot-Scale Time-
of-Use Electric Rate for Residential Customers
From: City Manager
Lead Department: Utilities
Recommendation
Staff, the Utilities Advisory Commission (UAC), and the Finance Committee recommend that the
City Council:
1. Approve the residential customer engagement (CustomerConnect) pilot program;
2. Approve a contract with Elster Solutions LLC for an estimated cost of $409,455, with the
authorization of additional related, but unforeseen, work which may develop during the
project, for an amount of $41,000, equal to ten percent of the contract amount, for a
not-to-exceed total amount of $450,455; and
3. Adopt the attached resolution approving pilot time-of-use electric rates for residential
customers.
Executive Summary
The proposed residential CustomerConnect pilot program is designed to evaluate how
customers change their energy and water consumption when they are provided with advanced
meters and equipment to view their energy and water use. The pilot program will be available
to 300 residential customers who agree to have advanced electric, natural gas and water
meters installed for free at their homes. Participants will also be provided tools to access,
display and interpret their utility usage information. The pilot will include a time-of-use (TOU)
electric pilot rate for up to 150 residential electric utility customers, particularly those with
electric vehicles, who can shift electric usage to non-peak night hours to reduce the cost of
energy supplies and the environmental impact of on-peak electric usage.
City of Palo Alto Page 2
To participate in the CustomerConnect pilot, customers must provide the City of Palo Alto
Utilities (CPAU) feedback on their experiences in participating in the pilot program with the
objective of assisting CPAU in evaluating the merits and shortcomings of such programs and
associated technologies. While 200 of the participants will be self-selected volunteers, 100 will
be invited by CPAU to participate. If approved by Council, the CustomerConnect pilot will start
in the spring of 2013 and end by December 2015. The cost of the three-year pilot program is
estimated to be about $550,000, which is available in the capital project budget for
implementing the smart meter roadmap. Both the UAC and the Finance Committee
unanimously recommended that the Council approve the pilot program and adopt the
proposed TOU rates.
Finance Committee Review and Recommendation
At its November 14, 2012 meeting, the Finance Committee reviewed the proposed program
(Staff Report #3209 – Attachment C to this report). In response to a question about the
proposed TOU rate structure, staff indicated that the rate was cost-based and developed for
the consumption profile of an average single family home. Staff also mentioned that if
customers shift their loads to off-peak hours, especially their Electric Vehicle charging, they
could expect a 10-15% reduction on their incremental electric bill. UAC Commissioner Melton
explained how staff’s proposal for the pilot program evolved and incorporated input from the
UAC.
The Finance Committee unanimously (by a vote of 4-0) recommended Council approve the
proposed CustomerConnect pilot program, the contract with Elster, and the proposed TOU pilot
rates. The Finance Committee minutes are provided in Attachment D.
Resource Impact
The TOU and CustomerConnect pilots were contemplated in the smart grid work plan, a capital
improvement project with a budget of $750,000. The Elster contract is expected to cost
approximately $409,455. Staff is also requesting $41,000 (10%) for unforeseen project related
work for a total not to exceed amount of $450,455. An additional $100,000 is expected to be
required for information services, minimal modification to the billing system, program
evaluation assistance and other related consulting services. Therefore, the total cost is
expected to be $550,455 plus the $41,000 for contingencies for the Elster contract.
Staff effort will be more significant in the first year of the pilot, amounting to between 2 and 2.5
FTE, but will ramp down in subsequent years to closer to 1 FTE. Staff from various groups are
involved, and the focus of the work will migrate from Resource Management and Engineering,
to Operations, to Customer Support Services, SAP Project Management and IT depending on
City of Palo Alto Page 3
the stage of project development. Some of the efforts, such as communications, will be
ongoing. It is expected this level of multi-divisional/multi-departmental staff effort can be
garnered from existing staff resources. However, the staff time required to implement these
pilots may result in a 6- to 12-month delay of certain capital projects (electric distribution
system upgrade, large commercial customer metering, and gas and water meter replacement
plans), which should not impact service reliability as well as cause delays in certain internal
support services. A limited amount of staff overtime may also be needed for this project. The
pilot project team includes staff from Utilities (Operations, Engineering, Marketing, Customer
Service, and Resource Management), and SAP Project Management office.
All costs for the proposed pilots were included in the FY 2012 budget and do not require an
adjustment to the budget or rates. Full implementation of the EV TOU rate (i.e. beyond the
pilot program) may require additional metering and billing system upgrades. These costs will
be assessed and included in staff’s recommendation to Council at the conclusion of the TOU
pilot program by December 2014.
Policy Implications
The approval of this contract is consistent with existing City policies, including the Council
approved Utilities Strategic Plan Strategy Objectives of offering programs to meet the needs of
the customers and community, and promoting the efficient use of resources. Offering
customers a time-of-use electric rate also meets City’s Electric Vehicle Infrastructure Policy.
Environmental Review
This project does not require review under the California Environmental Quality Act (CEQA).
Attachments:
Attachment A: Resolution Adopting Pilot TOU Rates (PDF)
Attachment B: Agreement with Elster Solutions LLC (PDF)
Attachment C: Final Staff Report ID 3209_Residential CustomerConnect and TOU Rate
Pilots - to Finance 11-14-12 (w/out attachments) (PDF)
Attachment D: Excerpted Draft Minutes of the Finance Committee Meeting of
November 14, 2012 (PDF)
*NOT YET APPROVED*
120822 dm 00710042
Resolution No. _________
Resolution of the Council of the City of Palo Alto Adopting Utility Rate
Schedule E-1 TOU (Residential Time-of-Use Rate Adjustment)
The Council of the City of Palo Alto RESOLVES:
SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule E-1 TOU (Residential Time-of-Use Rate Adjustment), is added as attached and
incorporated. Utility Rate Schedule E-1 TOU shall become effective as of January 1, 2013 and
shall expire on December 31, 2014.
SECTION 2. The Council grants the City Manager or his designee the authority to
implement Utility Rate Schedule E-1 TOU as part of a voluntary participation pilot program
involving up to one hundred (100) of the City’s Electric Utility customers who own electric
vehicles and up to fifty (50) Electric Utility customers who do not own electric vehicles. Electric
service provided under the Utility Rate Schedule will be offered at the sole option of the City
based upon guidelines published by the City Manager or his designee.
SECTION 3. The Council finds that the adoption of this resolution does not constitute
a project under the California Environmental Quality Act, California Public Resources Code
section 21080, subdivision (b)(8).
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
___________________________ ___________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
___________________________ ___________________________
City Attorney City Manager
___________________________
Director of Utilities
___________________________
Director of Administrative Services
EQUIPMENT AND FULLY MANAGED SERVICES AGREEMENT
BETWEEN
CITY OF PALO ALTO
AND
ELSTER SOLUTIONS, LLC
December_, 2012
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FULLY MANAGED SERVICES AGREEMENT
This EQUIPMENT AND FULLY MANAGED SERVICES AGREEMENT (this "Agreement") is entered
into this day of , 2012 (the "Effective Date") by and between Elster Solutions, LLC, a
Delaware limited liability company, with offices located at 208 S. Rogers Lane, Raleigh, NC 27610, USA
("Elster") and the City of Palo Alto, a California chartered municipal corporation, acting by its
Department of Utilities, with a principal place of business located at 250 Hamilton Avenue, Palo Alto,
CA 94301, USA (the "City"). Elster and the City are referred to, collectively, as the "Parties" and,
individually, as the "Party".
RECITALS:
WHEREAS, the City wishes to evaluate advanced utility meters and associated residential customer
engagement software tools with the objective of gauging customer interest and satisfaction utilizing these
technologies to manage their utility services, to quantifY changes to customer electricity, natural gas and
water consumption, and to enhance City's utilities services to customers;
WHEREAS, Elster is in the business of providing advanced meter and networking equipment and fully
managed services solutions for electricity, natural gas and water utilities and customers;
WHEREAS, Elster's subcontractor, Utilismart Corporation ("UC") of Ontario, Canada, provides 'cloud
based' software services which saves customer utility usage and associated information on its computer
servers and provides utility customer analytical and engagement tools;
WHEREAS, Elster as the prime contractor, and UC as a subcontractor to Elster, responded to the City's
Request for Proposal solicitation # 145169, and was selected by the City to provide services to meet
City's requirements as outlined in this Agreement;
AGREEMENT:
In consideration of the Recitals above and the covenants, terms and conditions below, the Parties agree:
1. SCOPE. Elster agrees to sell to the City and the City agrees to purchase from Elster the Equipment
and Fully Managed Services, hereinafter referred to as "Managed Services", as detailed in Exhibit B,
Statement of Work, attached hereto and incorporated herein by reference (the "Statement of Work"),
subject to the terms and conditions of this Agreement and the Exhibits attached hereto. For purposes
of this Agreement, Managed Services are defined as access to a fully managed and maintained
cloud-based EnergyAxis Management System through secure web portals. For purposes of
Equipment licensing and maintenance, Exhibit D contains terms and conditions associated with
software license for the Equipment provided and Exhibit E provides the terms and conditions
associated with the hand-held unit's maintenance.
2. UNDERSTANDING. This Agreement represents the complete understandings, obligations and
responsibilities of the Parties, and binds the Parties to the terms and conditions herein. If the City
elects to issue a separate purchase order for the Managed Services described herein, the purchase
order shall expressly reference this Agreement, and the terms and conditions of this Agreement and
its Exhibits shall prevail in the event of a conflict in interpretation.
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3. TERMS AND CONDITIONS. Any Advanced Metering Infrastructure ("AMI") metering
hardware (the "Metering Equipment") or other services not delineated as "Managed Services" or
provided as part of this Agreement shall be sold by Elster and delivered pursuant to Exhibit A, Elster
Solutions, LLC General Terms and Conditions of Sale, attached hereto and incorporated herein by
reference (the "Elster General Terms").
4. FEES AND PAYMENT SCHEDULE. In consideration of the Managed Services defined herein,
the City shall pay Elster the amounts described in Exhibit C, Rates and Fees (the "Rates and Fees"),
which shall apply to the Statement of Work:
a) Payment by the City for Elster's deliverables shall be made in accordance with the following
payment schedule:
i) Managed Services. The setup fee described in Exhibit C will be billed upon contract
signing. The Managed Services fee is an annual fee billed not later than thirty (30)
days prior to the end of the then current calendar year, with payment due by January 1
of the following calendar year. Annual Fees for the initial year of Service will be
prorated based on the number of days remaining in 1he calendar year calculated from
the date the City completes system training ("Prorated Annual Fee").
ii)Metering equipment and any other deployment services. The City will be
invoiced in accordance with the provisions of Exhibit C.
iii) Additional Training, Consultation. If additional training or consulting is requested
by the City, such additional training or consulting will be billed upon completion of
the additional training or consulting.
iv) Travel and living expenses Expenses for Elster's personnel for on-site work shall
be billed monthly at its cost plus ten percent (10%) upon completion of the travel.
Any such expenses shall be approved in advance by 1he City before they may be
incurred.
b) Payment terms are net cash, payable without offset, in United States Dollars, due thirty (30) days
from date of invoice by wire transfer to the account designated by Elster. The wire transfer
information is, as follows: Electronic Payments (ACH and Fed Wire Payments) to:
ABA Transit Number:
Bank Name:
Bank Address:
Company Name:
Bank Account Number:
Account Type:
SWIFT Code:
021001033
Deutsche Bank Trust Company Americas
60 Wall Street New York, NY 10005
Elster Solutions, LLC
00451610
Checking
BKTRUS33
5. COMPLETE AGREEMENT. This Agreement, together wi1h the Exhibits attached hereto,
constitute the entire agreement between the Parties and supersede and cancel any and all prior
agreements, written or oral, between the Parties relating to the subject matter hereof. This
Agreement may not be amended unless it is in writing and signed by the Parties.
In the event of any inconsistencies among this Agreement and its Exhibits, this Agreement shall
control with respect to any issues relating to the Managed Services and the Elster General Terms
shall control with respect to the supply of any Metering Equipment or services outside the scope of
the Managed Services.
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6. CONFIDENTIALITY
a) Notwithstanding any other provIsIon of this Agreement and the Exhibits, the Parties
acknowledge that the California Constitution and the California Government Code pertain to
writings of the City prepared and/or stored in the ordinary course and scope of the City's
business, which mayor may not be required to be disclosed by the City to the genetal public. To
the extent consistent with applicable laws, each party (the "Receiving Party") shall maintain in
strict confidence any and all proprietary and confidential information about the business,
operations or customers of the other party or any of their affiliates which it acquires in any form
from the other party (the "Disclosing Party"), including without limitation the terms of this
Agreement, or any other information disclosed by the Disclosing Party and identified by
Disclosing Party as confidential ("Confidential Information"). The Receiving Party will not
disclose such Confidential Information with any third parties without the Disclosing Party's
prior written consent. The Receiving Party further agrees to use its best efforts and to take all
reasonable precautions to maintain strict confidentiality with respect to the Confidential
Information and to prevent disclosure thereof to persons other than its employees, accountants,
affiliates, attorneys, bankers, consultants, insurance advisors and carriers, and agents who need
access to such information to carry out a party's obligations under this Agreement, and the
Receiving Party shall be liable for the compliance by such third parties with the confidentiality
obligations hereof.
b) The Receiving Party shall not use, or permit the use of, the Confidential Information for any
purpose other than performing this Agreement and exercising the rights granted under this
Agreement. The Receiving Party acknowledges that the rights of the Disclosing Party in the
Confidential Information are unique, and accordingly the Disclosing Party shall, in addition to
such other remedies as may be available to it at law or in equity, have the right to enforce its
rights hereunder by an action for injunctive relief and specific performance to the full extent
permitted by law. Upon termination of this Agreement and the written request of the Disclosing
Party, the Receiving Party shall return or destroy all copies of all Confidential Information to the
Disclosing Party. Notwithstanding the foregoing, to the extent it would be unreasonably costly
or cumbersome, neither party shall be required to delete intangible copies of Confidential
Information that is made as part of such party's routine systems back-up procedures.
c) The Parties have entered into a non-disclosure agreement, attached and incorporated by
reference as Exhibit H.
7. PROVISION OF SERVICES.
a) Term of Managed Services Agreement. Elster shall provide Managed Services to the City
in accordance with the terms of this Agreement for a period of thirty-six (36) months from
the Effective Date of this Agreement (the "Term"). The Parties may extend the Term on an
annual basis (the "Extension Term") by the City giving not less than thirty (30) days' advance
written notice and by completion of a contract amendment; provided, however, any such
contract amendment for a one-year Extension Term shall not be entered into by the Parties in
excess of three (3) consecutive one-year terms. The Extension Term(s) shall be approved by
the Council of the City of Palo Alto, unless the Council delegates to the City Manager the
authority to execute the contract amendments for the second and third one-year Extension
Terms not exceeding a total of three (3) years in duration. This Agreement may not be
extended beyond three Extension Terms after the expiration of the three-year Term.
b) Completion of Managed Services. At the end of the Term and if the City does not extend
the Term, the Managed Services provided by Elster shall cease, and the City's access to the
Cloud Base Software Services will expire or otherwise be deemed terminated. Prior to the
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end of the Term, the City will be contacted by Elster's Sales Team to discuss next steps. If
the City elects to renew the contract for Managed Services, Elster will continue to support the
existing configuration during contract negotiations per existing rates. The Parties will
endeavor to engage in contract negotiations for a period that does not exceed six (6) months.
c) Third Parties. Elster at its discretion may utilize third parties, to furnish some or all of the
Managed Services; provided, however, Elster shall notify the City of such third party not less
than thirty (30) days before that third party commences provision of services. Those third
parties shall be considered subcontractors of Elster and may be required to execute the type of
non-disclosure agreements referred to in Section 6(c) above and shall meet the relevant terms
and conditions ofthis Agreement.
d) Responsibility for Data and AMI System Operation. The Parties understand that the
Managed Services provided under this Agreement are for use by the City for business
purposes. The Parties also understand that Elster, as part of its technical support for the AMI
System, may periodically "re-boot" the AMI System, perform data or system backups, and
provide other scheduled maintenance services. Elster shall provide the City with not less than
ten (10) days' advance notice before commencing such backup actions.
e) Access to the AMI System. Access to the AMI System shall be made available via web
portal by assigned password and specifically limited to the City's employees. Access by any
other personnel is prohibited except by express written consent by Elster, which consent shall
not be unreasonably withheld.
f) Technical Support. During the Term, Elster will provide technical support at the desired
level, as set forth and purchased in accordance with Exhibit C.
g) Access to the City's AMI Metering Hardware. For technical support for the AMI System
analysis, the City will provide Elster with reasonable access to all of the City's network
devices (including, without limitation, gatekeepers, meters, and water/gas modules) in the
AMI System. Should it be necessary for Elster to directly access these devices for support
purposes, the City will provide Elster with the required addresses and unrestricted passwords
of the gatekeepers for such access, provided Elster acknowledges and understands that it is
obligated to maintain the confidentiality of such information at all times during the Term.
Elster shall notify the City prior to Elster's accessing the AMI system not less than 24 hours
before commencing access. Elster and/or Elster's subcontractors shall treat any City
metering and other customer information it acquires access to in providing the assistance
contemplated by this Section as the proprietary and confidential information of the City, and
shall comply with the terms of Section 6 of this agreement. Elster and/or Elster's
subcontractor shall comply with the Software as a Service Security and Privacy Terms and
Conditions, as set forth in Exhibit G.
h) Training. Training with respect to the web portals in order to access the AMI System will be
provided to the City as set forth in Exhibit B.
i) The City ResponsibiJities and Deliverables. The City shall be responsible for providing the
deliverables set forth in Section 6, Exhibit B.
j) Elster's insurance obligation. During the term ofthis Agreement, Elster at its own cost and
expense, shall obtain and maintain in full force and effect during the term the insurance
coverage described in Exhibit F. Elster shall obtain a policy endorsement naming the City as
an additional insured under any commercial general liability policy.
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8. REQUESTING CHANGES. All changes requested by either Party to the Statement of Work or the
Term shall be made, in writing, between the City's Project Manager and Elster's Project Manager.
Should the City request changes to the Term, the Parties' Project Managers will manage and schedule
the impacts of those changes, including agreement on cost and scheduling impacts, if any. Prices for
changes to Statement of Work will be furnished by Elster at the then current Time and Materials
rates.
9. DELAYS. Elster is not responsible for Project delays directly caused by the City or any of its
affiliates or contractors. Billing for Managed Services shall commence upon completion of the kick
off meeting as described in Exhibit B.
10. PROPRIETARY RIGHTS.
a) Proprietary Rights of the City.
i. As between Elster and the City, all of the Data (defined as information provided
by the City to Elster), including, without limitation all worldwide patents,
copyrights, trademarks, trade secrets and other intellectual property rights therein
(collectively, "Intellectual Property Rights"), is, and shall at all times remain, the
sole and exclusive property ofthe City.
ii. The City agrees that it shall have sole responsibility and liability for: (a)
acquiring any and all authorization(s) necessary for the use of the Data as
contemplated by this Agreement; (b) the completeness and accuracy of all Data
and other materials provided to Elster by the City pursuant to this Agreement;
and (c) ensuring that the Data does not infringe or violate any Intellectual
Property Rights or other rights of any third party.
iii. The City hereby grants to Elster a non-exclusive, royalty-free, worldwide right
and license to use, reproduce, distribute, modify, create derivative works of,
transmit, publicly perform and display the Data for the purpose of providing the
Managed Services hereunder.
b) Proprietary Rights of Elster.
1. The City acknowledges and agrees that Elster shall own all rights, title and interest in
and to any materials, including Intellectual Property Rights, developed by or on
behalf of the City in connection with this Agreement.
ii. The City further acknowledges and agrees that Elster or its licensors shall retain
ownership of all servers and other hardware and software used by Elster in
connection with the provision of Managed Services under this Agreement.
iii. The City acknowledges that it shall not, by reason of this Agreement, obtain any
rights in the trademarks, service marks or trade names of Elster. The City shall not
take any action that might adversely affect the validity or enforceability of the
trademarks andlor service marks of Elster.
11. LIMITED WARRANTIES AND DISCLAIMER OF WARRANTIES FOR MANAGED
SERVICES.
a) Limited Warranties and Exclusive Remedies. Elster warrants and represents to the City
that the Managed Services will be provided in a workmanlike manner.
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b) Disclaimer of Warranties.
i. OTHER THAN THE EXPRESS LIMITED WARRANTY PROVIDED IN
SECTION lO(a) ABOVE, THE MANAGED SERVICES PROVIDED
HEREUNDER ARE PROVIDED "AS IS" AND ELSTER MAKES NO
WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED EITHER IN
FACT OR BY OPERATION OF LAW, STATUTORY OR OTHERWISE,
INCLUDING WITIIOUT LIMITATION WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE (EVEN IF
ELSTER HAS BEEN ADVISED OF THE PURPOSE), UNINTERRUPTED
SERVICE, ERROR-FREE SERVICE, NON-INFRINGEMENT, AND
WARRANTIES ARISING OUT OF COURSE OF DEALING OR USAGE OF
TRADE. Elster shall not be liable for errors in transmission or for failure to establish
connections, including errors or delays caused by network outages or Internet
interruptions. Elster cannot and does not guarantee the privacy, security, authenticity
and non-corruption of any infonnation transmitted through, or stored in any system
connected to, the Internet.
ii. Elster specifically disclaims any warranty as to the accuracy of the Data, it being
customer's sole and exclusive duty and responsibility to assure that all Data is
accurate.
12. A PARTY'S INDEMNIFICATION OBLIGATION. Each Party shall indemnify, defend and hold
the other Party, its employees, officers, directors, elected officials, representatives, agents, attorneys
and insurers harmless from and against any claims, actions, losses, liabilities, damages and expenses
(including attorney's fees and court costs) threatened, made, assessed or awarded against the other
Party by any third party arising out of or in connection with (i) the Party's breach of this Agreement
or any warranty set forth herein; (U) any injury to persons or property caused by the Party or arising in
connection with any Party's applicable ownership, control or use rights of or in the Managed Services
or any products or services otherwise distributed by any Party in association with the Managed
Services; (iii) any service provided or perfonned or agreed to be perfonned by the Party or any
product sold by the Party; or (iv) any ownership, control or use of the Software by any Party, and its
agents, employees and officers.
13. LIMITATIONS OF LIABILITY. THE AGGREGATE LIABILITY OF ELSTER FOR
DAMAGES ARISING OUT OF THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO
MISTAKES, OMISSIONS, INTERRUPTIONS, DELAYS OR ERRORS OR OTHER DEFECTS,
REPRESENTATIONS OR USE OF MANAGED SERVICES OR ARISING OUT OF THE
FAILURE TO FURNISH THE MANAGED SERVICES, WHETHER CAUSED BY ACTS OF
COMMISSION OR OMISSION SHALL IN NO CASE EXCEED THE COMPENSATION PAID
BY THE CITY, WHICH GIVES RISE TO THE CLAIM. UNDER NO CIRCUMSTANCES SHALL
ELSTER BE LIABLE FOR ANY INCIDENTAL, SPECIAL, INDIRECT, PUNITIVE OR
CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATED TO THE MANAGED
SERVICES, WHETHER LIABILITY IS BASED ON BREACH OF CONTRACT, BREACH OF
WARRANTY (EXPRESS OR IMPLIED) OR OTHERWISE, AND WHETHER ASSERTED IN
CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR OTHERWISE,
AND IRRESPECTIVE OF WHETHER THE P ARTIES HAVE ADVISED OR BEEN ADVISED OF
THE POSSIBILITY OF ANY SUCH DAMAGES. WITHOUT LIMITING THE GENERALITY OF
THE FOREGOING, IN NO EVENT SHALL ELSTER BE LIABLE FOR LOST PROFITS,
BUSINESS INTERRUPTION, LOSS OF BUSINESS, OR COSTS OR DAMAGES INCURRED AS
A RESULT OF LOST DATA OR EQUIPMENT, THE COSTS OF RECOVERING OR SECURING
REPLACEMENTS FOR SUCH ITEMS, OR CLAIMS BY THIRD PARTIES.
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14. ASSIGNMENT. A Party may not assign its rights or obligations under this Agreement to any third
party without the prior written consent of the other Party. In the event that Elster is involved in a
Change of Control (defined below), such an event shall be considered an assignment of this
Agreement subject to the written consent of the City, which consent shall be not unreasonably
withheld. "Change of Control" means a stock sale, reorganization, merger, consolidation or other
form of corporate transaction or series of transactions, in each case, with respect to which persons
who were the shareholders of Elster immediately prior to such stock sale, reorganization, merger or
consolidation or other transaction do not, immediately thereafter, own more than fifty percent (50%)
of the combined voting power entitled to vote generally in the election of directors of the sold,
reorganized, merged or consolidated company's then outstanding voting securities, in substantially
the same proportions as their ownership immediately prior to such stock sale, reorganization, merger,
consolidation or other transaction. Subject to the foregoing, this Agreement shall be binding upon
and shall inure to the benefit of the Parties hereto and their respective successors and permitted
assigns.
15 . WAIVER. The terms, covenants and conditions of this Agreement may be waived only by a written
instrument executed by the party waiving compliance. The failure of any party at any time or times to
require performance of any provision of the Agreement shall in no manner affect the right at a later
date to enforce the same or to enforce any future compliance with or performance of any of the
provisions hereof. No waiver by any party of any condition or other breach of any provision, term or
covenant in this Agreement whether by conduct or otherwise, in anyone or more instances, shall be
deemed to be or construed as a further or continuing waiver of any such condition or the breach of
any other provision, term or covenant of this Agreement.
16. ENFORCEMENT. If any provision of this Agreement is held to be illegal, invalid or unenforceable
under present or future law effective during the term hereof, such provision shall be fully severable
and this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable
provision never comprised a part hereof, and the remaining provisions hereof shall remain in full
force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its
severance herefrom.
17. EXECUTION. This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original, but all of which shall constitute the same instrument. For the purposes of this
Agreement, a facsimile signature shall be deemed an original.
18. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the
laws of the state of California, without regard to conflicts of law principles.
19. INTEGRATION; CONTRACT AMENDMENTS. This Agreement, together with the Exhibits,
Appendices, Pricing, Schedules, Attachments and Addenda listed below, collectively the "Contract
Documents" with English as the prevailing language, represents the complete understanding and
agreement between the Parties, and supersedes and cancels any and all prior agreements, written or
oral, relating to the subject matter hereof. The Contract Documents may not be amended except by
written modification signed by both Parties. Any conflicts among the Contract Documents shall be
resolved by giving precedence to the terms in the documents in the following order:
Fully Managed Services Agreement
Exhibit A -General Terms and Conditions of Sale provides the standard Elster terms for the sale of
goods and provision of services.
Exhibit B -Statement of Work
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Exhibit C -Rates and Fee
Exhibit D -Route and Inspector Manager Software License Agreement (RMLA)
Exhibit E -Handheld Unit Maintenance Agreement (HMA)
Exhibit F -Insurance Requirements
Exhibit G --City of Palo Alto Software as a Service Security And Privacy Terms and Conditions
Exhibit H --Confidentiality and Non-Disclosure Agreement between the City of Palo Alto and Elster
Solutions, LLC dated 9/05/2012
IN WITNESS WHEREOF, THE PARTIES HAVE BY THEIR DULY AUTHORIZED
REPRESENTATIVES EXECUTED TIDS AGREEMENT AS OF THE EFFECTIVE DATE.
CITY OF PALO ALTO
By: ________________________ __
Printed Name: ----------------
Title: ----------------------
Date: ______________________ _
Approved as to form:
Senior Asst. City Attorney
Approved:
Director of Utilities
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By: --~~~-,~----.----------
Title: .\)~ CO"-~ rAJ R(\f~
Date: ___ \{-=+I ___ 7)-+{..:-It..-_____ _
1 General
EXHIBIT A
ELSTER SOLUTIONS, LLC
GENERAL TERMS AND CONDITIONS OF SALE
These terms and conditions may not be changed or superseded by any different or additional terms and
conditions proposed by the City in a purchase order or other document, unless expressly agreed to in writing
by Elster. Notwithstanding the foregoing, any software licenses purchased by the City shall be governed
exclusively by the terms and conditions of the applicable software license agreement or systems license
agreement (including, if applicable, a shrink-wrap or click-wrap software license agreement) in effect between
the parties.
2 Prices
Unless otherwise specified in writing, all proposals or quotations from Elster expire thirty (30) days from the
date thereof.
Unless otherwise specified by Elster, the price does not include any federal, state or local property, license,
privilege, sales, use, excise, gross receipts, or other like taxes which may now or hereafter be applicable. The
City will assume the payment of all taxes, duties, fees and other charges assessed by any taxing authority in the
City'S country or country of ultimate destination with respect to the goods order. The City agrees to payor
reimburse any such taxes, duties, fees or other charges which Elster or its suppliers are required to payor
collect. If the City is exempt from the payment of any tax or holds a direct payment permit, the City shall,
upon order placement, provide Elster a copy, acceptable to the relevant governmental authorities of any such
certificate or permit. Upon delivery by the City of an exemption certificate or other claim for tax exemption,
The City will, and hereby does, indemnify and hold harmless Elster from any sales, use, value-added or similar
tax, charge, excise or fee (including interest, penalties, attorneys' fees and related dispute resolution charges)
assessed against or incurred by Elster in reliance on the City's exemption claim.
Unless otherwise stated herein, prices for Services are based on Services provided during Elster's normal
business hours (8 a.m. to 5 p.m. U.S. Eastern Time, Monday through Friday, excluding Elster holidays).
Overtime and Saturday hours will be billed at one and one-half (1 1/2) times the hourly rate; and Sunday
hours will be billed at two (2) times the hourly rate; hours during Elster holidays will be billed at three (3)
times the hourly rate. If a Services rate sheet is attached hereto, the applicable Services rates shall be those set
forth in the rate sheet. Rates are firm for one year from date of the contract. Thereafter, Elster can change
the rates upon reasonable notice to the City.
3 Changes
Any changes requested by customer affecting the project scope, schedule, or other aspects of the work must
be accepted by Elster, and impacted provisions of the contract, including but not limited to price, schedule,
license fees, warranties, etc., mutually agreed to in writing prior to implementation of any change.
Customer requested changes in the scope will be priced per the unit pricing stated in the pricing exhibit(s)
attached to and incorporated as part of the agreement between the parties, or otherwise as quoted by Elster
on a case-by-case basis.
Any changes to the system or hardware initiated by customer before or after delivery may necessitate
upgrades to third party licenses. Any additional third party license fees will be the responsibility of customer
unless such costs are specifically noted as included in the scope of work pricing.
Elster may, at its expense, make changes in the goods and services as it deems necessary and in its sole
discretion to conform the goods and services to the applicable specifications. If the customer objects to any
such changes, Elster shall be relieved of its obligation to conform to the applicable specifications to the
10
extent that conformance may be affected by such objection. In addition, during the provisioning of goods
and services hereunder, Elster may pass along to the City certain incidental costs incurred by Elster in the
provisioning of such goods and services that directly relate to the provisioning thereof, such as mounting
brackets, washers, gaskets and the like, with such costs not to exceed $10,000.
4 Delivery
All goods manufactured, assembled or warehoused in the continental United States and delivered within the
United States ("U.S.") are delivered FOB Elster factory. Goods delivered outside of the U.S. will be delivered
Ex Works Elster factory, and the City shall arrange for export clearance. The City shall be responsible for any
and all demurrage or detention charges.
If the City requests and Elster agrees in writing that goods shall be delivered FOB point of destination, Elster
will deliver such goods FOB point of destination as selected by the City with all freight costs prepaid by
Elster. In order for Elster to cover the administrative, insurance, and logistic expenses involved with FOB
point of destination deliveries, Elster will add to the City's invoice as a separate line item, an amount equal to
two percent (2%) of the purchase price of the goods being delivered.
If the scheduled delivery of goods is delayed by the City or by Force Majeure, Elster may move the goods to
storage for the account of and at the risk of the City whereupon it shall be deemed to be delivered.
Shipping and delivery dates are contingent upon the City's timely approvals and delivery by the City of any
documentation required for Elster's performance hereunder.
Claims for shortages or other errors in delivery must be made in writing to Elster within ten (10) days of
delivery. Goods may not be returned except with the prior written consent of and subject to terms specified
by Elster. Claims for damage after delivery shall be made directly by the City with the common carrier.
5 Inspection and Acceptance
The City shall have up to forty-five (45) days after delivery of the goods to the specified delivery point or
after provisioning of Services, to inspect and reject or accept the goods or Services. In the event that the City
does not reject the goods or Services in writing citing any applicable non-conformity to a purchase order,
order release or specification during such fort-five (45) day acceptance period, the applicable goods or
Services shall be deemed accepted.
6 Title and Risk of Loss
Title to the goods shall pass to the City upon the City's receipt of the goods as determined by the City's
choice of delivery per section 4 "Delivery" above. Notwithstanding any agreement between the City and
Elster with respect to delivery terms or payment of transportation charges, Elster's standard term for risk of
loss or damage shall pass to the City upon delivery to the FOB Elster factory point of shipment, for United
States delivery, or Ex Works Elster factory as defined in INC01ERMS 2010, for goods delivered outside the
United States. Notwithstanding the foregoing, title to any software delivered to the City shall remain in Elster,
and the City shall receive only a license to use such software pursuant to the terms of the applicable software
license agreement or system license agreement between the parties.
7 Delays
Goods and Services provided by Elster are planned and priced based on project requirements, and are
extremely sensitive to proper utilization of assets and committed resources. Schedule delays that prevent
Elster or its subcontractors from working at the planned pace represent a risk to meeting overall project
objectives. Elster will work closely with the City in an effort to :tninirn.ize the potential for delays through
careful planning and documentation of key interdependencies. If however, the delivery of goods or the
performance of Services are delayed as a result of acts or omissions by the City or its representatives (and not
by Elster or by reasons of force majeure), for unreasonable periods, Elster may, at its discretion, deem such
11
delay a suspension of the General Agreement by the City, and as a result not be bound by the pricing set
forth in the Pricing Schedule, and may at its discretion, require the City to renegotiate the prices.
8 Warranties and Remedies
8.1 Goods Warranty
Elster warrants that goods shall be delivered free of defects in material and workmanship. The warranty
remedy period for goods shall end twelve (12) months after installation or eighteen (18) months after date of
shipment, whichever fttst occurs.
8.2 Goods Remedy
If a nonconformity to the foregoing warranty is discovered in the goods during the applicable warranty
remedy period under normal and proper use, and provided the goods have been properly stored, installed,
operated and maintained (the City to provide proper records), and written notice of such nonconformity is
provided to Elster promptly after such discovery and within the applicable warranty remedy period, Elster
shall, at its option, either (i) repair or replace the nonconforming portion of the goods, or (li) refund the
portion of the price applicable to the nonconforming portion of goods.
8.3 Services Warranty
Elster warrants that services shall be performed in a good and workmanlike manner. The warranty remedy
period for services shall end ninety (90) days after the date of completion of services.
8.4 Services Remedy
If a nonconformity to the foregoing warranty is discovered in the services during the applicable warranty
remedy period, and written notice of such nonconformity is provided to Elster promptly after such discovery
and within the applicable warranty remedy period, Elster shall, at its option, either (i) re-perform the
nonconforming services or (li) refund the portion of the price applicable to the nonconforming portion of
the services.
8.5 Third Party Goods Warranty
Goods supplied by Elster but manufactured by others are warranted only to the extent of the manufacturer's
warranty. The third party In Home Display is warranted for a period of one year from the date of shipment.
8.6 Third Party Goods Remedy
Remedies, if any, are provided by the manufacturer
8.7 Additional Warranties
Notwithstanding the foregoing, certain warranties may be provided under the System License Agreement, the
System Maintenance Agreement and the Equipment Maintenance Agreement, but any such warranties are
subject to the terms thereof and do not apply to the goods and services warranted in this Section 8.
8.6 Warranty Returns
For warranty returns of Elster metering hardware, the City will pay freight to Elster factory in Raleigh, NC.
Elster will provide all freight charges for return of repaired or replaced items from its factory. After expiration
of the warranty period, the City is responsible for payment of any support or maintenance agreements for
computer hardware and/ or third party software used in the system.
8.7 Exceptions
In no event shall Elster be responsible for gam:mg access to the goods, disassembly, reassembly or
transportation of the goods or parts from or to the place of installation, all of which shall be at the City's risk
12
and expense. Elster shall have no obligation hereunder with respect to any goods which (i) have been
improperly repaired or altered; (n) have been subjected to misuse, negligence or accident; (iii) have been used
in a manner contrary to Elster's instructions; or (iv) are comprised of materials provided by or a design
specified by the City.
The foregoing warranties are exclusive and in lieu of all other warranties of quality and performance, whether
written, oral or implied, and all other warranties including any implied warranties of merchantability or fitness
for a particular purpose, non-infringement or usage of trade are hereby disclaimed. The remedies stated
herein constitute the City'S exclusive remedies and Elster's entire liability for any breach of warranty.
Notwithstanding the foregoing, goods supplied by Elster but manufactured by others are warranted only to
the extent of the manufacturer's warranty, and only the remedies, if any, provided by the manufacturer will be
allowed. Without limiting the generality of the foregoing, while Elster may incorporate a third party
AMR/ AMI communication module into the goods, Elster disclaims any and all warranties, express or
implied, regarding the module and the operation of the combined module/meter, including the implied
warranties of merchantability and fitness for a particular purpose, any warranties arising from the course of
dealing or trade usage, and compliance of the module and the combined module/meter with the ANSI or
FCC requirements. While Elster may act as a broker for the module manufacturer and may assist the City in
obtaining the benefits of the module manufacturer's warranties, any express or implied warranty regarding the
module or the operation of the combined module/meter, to the extent any such warranty may exist, is
provided solely by the module's manufacturer.
9 Limitation of Liability
In no event shall Elster be liable for special, indirect, incidental or consequential damages. Elster's liability for
any claim shall in no case exceed the purchase price allocable to the goods or services or part thereof which
gives rise to the claim. In no event shall Elster be liable for any damages, losses, liabilities, costs and expenses
(including reasonable attorneys' fees) arising from any improper installation or improper use of any goods by
the City, its customers, end users or anyone other than Elster, or arising from any failure by the City to follow
their own safety procedures in connection with the installation or use of the goods.
All causes of action against Elster arising out of or relating to this Agreement or the performance or breach
hereof shall expire unless brought within one year of the installation of the product to which such claim
relates.
10 Force Majeure
Neither party shall be liable for loss, damage, or delay nor be in default for failure to perform (other than
payment obligations) due to causes beyond its reasonable control, including but not limited to acts of God,
acts of war or terrorism, fite, flood, strike, labor disputes, acts or omissions of any governmental authority or
of the other party, compliance with government regulations, embargos, fuel or energy shortage, delays in
transportation, inability to obtain necessary labor, materials, or services from usual sources, or from defects or
delays in performance of a party's suppliers or subcontractors due to such causes. In the event of a delay by
either party due to the foregoing, the date of delivery or time for completion shall be extended by a period of
time reasonably necessary to overcome the delay.
11 Termination
Any order, contract or agreement may be terminated by the City by written notice and payment of reasonable
and proper termination charges, including but not limited to all costs associated with the order or contract
incurred up to the date of the notice of termination (including, without limitation, demobilization costs, sub
supplier and subcontractor termination charges, and standard restocking fees), Payments shall be made within
30 calendar days from receipt of invoice and acceptance of the goods in accordance with these General
Terms and Conditions of Sale. No termination by the City for default shall be effective unless, within thirty
(30) days after receipt by Elster of the City's written notice specifying such default, Elster has failed to initiate
and pursue with due diligence correction of such specified default.
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Elster may terminate any order, contract or agreement and any license granted thereunder at any time and for
any reason, including nonpayment or other material breach by the City that is not cured within thirty (30)
days following written notice thereof.
12 Export Control
The City represents and warrants that the goods and services provided hereunder and the "direct products"
thereof are intended for civil use only and will not be used, directly or indirectly, for the production of
chemical or biological weapons or of precursor chemicals for such weapons, or for any direct or indirect
nuclear end use. the City agrees not to disclose, use, export or re-export, directly or indirectly, any
information provided by Elster or the "direct product" thereof as deftned in the Export Control Regulations
of the United States Department of Commerce, except in compliance with such Regulations.
If applicable, Elster shall me for a U.S. export license, but only after appropriate documentation for the
license application has been provided by the City. The City shall furnish such documentation within a
reasonable time after order acceptance. Any delay in obtaining such license shall suspend performance of this
Agreement by Elster. If an export license is not granted or, if once granted, is thereafter revoked or modifted
by the appropriate authorities, this Agreement may be canceled by Elster without liability for damages of any
kind resulting from such cancellation. At Elster's request, the City shall provide to Elster a Letter of
Assurance and End-User Statement in a form reasonably satisfactory to Elster.
13 Resale
If the City resells any of the goods (other than software, which is non-transferable), the sale terms shall limit
Elster's liability to the buyer to the same extent that Elster's liability to the City is limited hereunder. In
addition, when reselling any of the goods, Client shall maintain strict compliance with the Export
Administration Act of 1979, as amended, or any other United States laws and regulations as shall from time
to time govern the sale, license and delivery of technology or goods abroad by persons subject to United
States law. Resale of goods does not transfer unique LAN identification or software embedded in or related
to meters. The buyer of resold goods must contact Elster directly for such components.
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EXHIBITB
STATEMENT OF WORK
lbis Statement of Work (SOW) defines the work to be completed by Elster and the City of Palo Alto Utilities
(CPAU) for the successful implementation of Elster's EnergyAxis Managed Services. It includes the scope of
work to be completed, the timelines for the overall project, provides visibility into the interdependencies
required to achieve the desired outcome, and will assist all parties in understanding and executing their
respective roles, responsibilities and tasks.
1 Scope of Work
lbis AMI project may include:
• REX2 meters
• EA_ Gatekeepers
• EA_ Water Modules
• EA_ Gas Modules
• Energy Axis Managed Service
• Handheld Equipment
• Associated Software for Handheld
• In-home displays
• Services (i.e. project services and integration) as described herein.
EnergyAxis Managed Service is provisioned in our datacenter and accessible to CPAU and its customers via
the Utility Energy Portal (UEP) and Consumer Energy Manager (CEM) provided by Elster's subcontractor,
UC. All other hardware will be deployed within CPAU territory as identified during the RFP process.
All software, hardware and services not included in the above list are outside the scope of this SOW and are
the responsibility of CPAU to provide if necessary. Elster is willing to provide additional products and
services via a Change Order.
2 Project Organization
A utility's AMI project involves much more than deploying the EnergyAxis solution. To take advantage of
the benefits that EnergyAxis offers, other utility systems and work flows are often impacted and these
impacts need to be managed by CPAU. A successful project requires customer participation throughout the
project. Elster will rely on CPAU to provide overall guidance.
2.1 Customer Responsibilities
Prior to the start of the project, CPAU will designate a person ("CPAU Project Manager") to whom all
communications from Elster will be addressed, and who will have the authority to act on CPAU's behalf in all
matters regarding this SOW. CPAU's Project Manager will serve as the interface between Elster's project
team and all of CPAU's departments and other contractors participating in the AMI project;
• Attend status meetings
• Obtain and provide applicable information, data, consents, decisions and approvals as required by
Elster to complete our responsibilities, within three business days of Elster's request (or in a
timeframe agreed to)
• Help resolve projectissues, and escalate issues within CPAU organization, as necessary
15
• Work with Elster to complete meter and programming forms in timely manner to facilitate hardware
ordering process
• Support the Project Change Order Procedure in a timely manner.
2.2 Elster Responsibilities
Elster Project Manager will serve as the interface between Elster's project team (including those of our
subcontractors) and CPAU's Project Manager;
• Review the SOW, and any associated documents, with CPAU Project Manager
• Facilitate the project kickoff and planning meeting
• Establish and maintain communications through CPAU Project Manager, as defmed in the section
entitled "Project Procedures" below
• Review and administer the Project Change Order Procedure with CPAU's Project Manager, as
defined in the section "Project Procedures below; .
• Coordinate and manage the project activities of Elster's assigned personnel
• Provide status reports and facilitate status meetings as agreed.
The roles of the Elster team are described below. Elster's work is performed both on-site and remotely.
Typically, Elster personnel will be on-site for the project planning/kickoff meeting and as mutually agreed to
with CPAU. All other travel to the site requested by CPAU is outside the scope of this SOW.
Elster Project Manager (P11) serves as the lead project manager for the AMI project and is the main
contact for CPAU. They oversee Elster's responsibilities and deliverables for the CPAU Project. The
Elster Project Manager assembles project teams, assigns individual responsibilities, develops project
schedules, provides status reports, determines and acquires the appropriate resources necessary to resolve
any issues for CPAU project team. Customized data requests will require an additional fee.
Elster Project Engineer provides configuration of EnergyAxis network devices.
Elster Network Planner determines the required number and location of Gatekeepers and Repeaters.
Elster Trainer provides web portal training.
Elster Field Services Engineer provides training and support for field installation and maintenance.
3 Stages of Deployment
Common activities that may be included in CPAU's deployment are listed below. Specific activities, the
timing of the activities and the responsibility for the activities will vary.
1) Initial Engagement: Ramp up to initial deployment
a) Contract Signing
b) Project Planning
c) Finalization of Network Design
d) Discussion of Managed Services Setup Form U1010
e) Coordination with Subcontractors
f) Ordering of Hardware
g) Discuss Scope of Integration Efforts (if applicable)
2) Early Deployment
a) Initial Deployment of Meters and Gatekeepers
16
b) WAN Configuration
c) UEP and CEM Configuration
d) Training
e) Managed Services Becomes Effective
3) Continued Deployment
a) More meters deployed
b) More Gatekeepers deployed
c) Additional meters added to the Managed Service
3.1 Elster's Project Deployment
After the Managed Services are in effect, CPAU will use the Elster Managed Services Support team for
technical support and issue resolution. The support team will escalate issues as necessary within the
organization. Please refer to the Agreement for details.
Elster's pricing includes active management of the project by an Elster Project Manager for up to 12 months
from the date of project kick-off. The Project Manager and their team are highly involved in coordinating
efforts for task completion and mitigation during this time. Upon completion of all defmed activities and
deliverables in this scope of work, Elster shall have met all Project Services obligations within the scope for
this Statement of Work and Project Services shall be released.
If CPAU desires to have the project actively managed after the 12-month period, this can be provided via a
Change Order. Please refer to the professional service rate schedule in Exhibit C of the Agreement.
4 Project Procedures
Project procedures describe communications, interface requirements, and means to control the activities
between CPA U and the Elster project team. The procedures described in this section will be coordinated
with the overall program management procedures implemented by for CPAU and used as agreed to during
the project planning stage.
4.1 Project Communications Procedures
The Project Workbook (Contact List & Communication Matrix) denotes the key project contacts and
distribution of electronic mail and/or other communications for key functional areas of the project.
The Elster Project Manager must approve all formal transmittals. CPAU and the other parties are requested
to implement a similar transmittal policy to assure that documents are properly tracked and recorded. Elster
transmittals will be dated with an agreed upon versioning control nomenclature (e.g. 050311 v 1.0J.
4.2 Project Scheduling
Project schedules are developed and used by the Elster Project Manager and team to plan and control
execution of the Elster project scope of work. The Elster Project Manager is responsible for monitoring
progress on the project schedule, including major milestones associated with contract deliverables.
The project schedule is determined during the Project Planning meeting. Most dates, including installation,
WAN deployment and integration delivery dates, are determined by the utility requirements and resource
availability. Therefore, the entire scope of a utility's project must be considered when developing the project
schedule. CPAU Project Manager is responsible for providing sufficient input regarding CPAU overall
program.
17
4.3 Project Control & Risk :Mitigation
Elster and CPAU will use project control procedures, identified during the planning stage, to ensure that
project schedules and objectives are accomplished in a timely and effective manner. The control function
involves working with the project staff to determine the progress being made, and what problems, if any, are
being encountered in the execution of the work Based on regular reviews, corrective actions will be taken to
prevent or resolve problems.
If a project review indicates that progress is not in accordance with plan, corrective actions are required to
return the project to schedule. These reviews help.to focus on the most effective course of corrective action,
i.e., the course of action that avoids delays in the overall project schedule and provides critical path
mitigation.
4.4 Progress Reports
Progress reports will be created and transmitted by Elster to CPAU based on a mutually agreed schedule.
These reports include a narrative addressing key issues associated with the contract. A typical progress report
narrative includes the following as applicable:
a) Last month progress
b) Project action items
c) Problem areas
Open action items & status d)
e)
f)
g)
List of deliverable documents and equipment
Scheduled activities for next month
Open contractual issues
4.5 Change Order Procedures
All requested contractual changes shall be in writing between CPAU Project Manager and the Elster Project
Manager. When the change impacts project scope or project schedule, CPAU Project Manager and Elster
Project Manager will manage the changes to mitigate possible negative impact on the schedule while
providing the sought after benefits of the change.
The new scope and impact on cost and schedule, if any, will be agreed to and documented via a Change
Order. Changes to the scope requirements will be priced based on work involved.
4.6 Project Review Meetings
CPAU is required to participate in project review meetings that cover: status and schedule reviews,
coordination of CPAU and Elster's scope activities, exchange of technical information, and design reviews of
future work to be performed by the project team.
These meetings will include CPAU and Elster personnel as required to address the key issues. To the extent
possible, meetings will be conducted via conference calls or video conferencing. The Elster and CPAU
project managers will mutually agree upon the frequency of these project meetings. The Elster and CPAU
project managers will also mutually agree to the timing, frequency, and location of any face-to-face meetings.
4.7 Transmittal Reviews
CPAU and Elster will review all submitted transmittals within five (5) business days of submittal. After
documents are reviewed, any comments will be formally transmitted by the receiving party to the other
party's Project Manager. If no discrepancies are indicated, the document is assumed to be correct and
approved. If errors, omissions, or format discrepancies exist, comments indicating the nature of these will be
transmitted by the receiving party to other team's Project Manager.
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5 Deliverables
Bill of Material
Hardware Solutions: Style Number Q
Il. AMI Electric Meter -Form 2S with disconnect and
ZigBee. Form 12S (style number ZF5WKABOOOO) maybe
substitute for form 2S. Refer to Exhibit C for the adder. ZFCWMABOOOO 300
2. EA Water modules -pit mount in-line connector EW202200000 300
• 3. Water module -pit cover lid mounting kit EW200004000 300
4. Water module -splice kit 40301K001 300
EG214000000 American
EG254000000 American 5B
EG224000000 Sensus
5. EA Gas modules -American or Sensus meters EG244000000 Sensus 415 300
6. Gas module mounting kit for American and Sensus EG210001000 American
meters EG220001000 Sensus 300
7. EA_ Gatekeepers -A3TL type single-phase or
polyphase form ZDxxOOW1082 25
8. HAN hardware -ZigBee In-Home Display IHD 50
19
i, ... '.:; ...••.......•• c.. ...... ..,.' < ............... ·.·.\:·.':;~;.·~f.·;;;;;:!L;:::;i! .. \i~i?··c);;::;\.:;t:f;r,i:;,;::i!rtC,;r: •.. ·;;·.·~?,;t;!i;··::···,j;; :"~'J.%?"::~'~(;:C,.
Software Solutions:
One-time set up:
1. Set up for 900 meter endpoints (or 300 homes) N/A 900 meters
.. 2. Utility-branded utility portal-set up N/A 1 lot
3. Utility-branded consumer energy portal -set up N/A 1 lot
4. HAN -Set up N/A 1 lot
Monthly hosting:
5. AMI Monthly hosting N/A 36 months
6. Utility-branded utility portal -monthly hosting N/A 36 months
7. Utility-branded consumer energy portal -monthly
hosting N/A 36 months
8. HAN -Monthly support for up to 50 units of In-Home-
Display only N/A 36 months
9. Mobile App -Monthly support N/A 36 months
..< .•.• '..; ...•. . ....• ' ......i .,·.·····i.. •.. )' >' ..•. J;'. ;;·~·/· •.• ?\y·;:·':l(;<'(; .. >;:\';./;;,.::;;.;
Equipment Installation Tools: Style Number Qua
1. EA_lnstalier handheld (field tool for water/gas
module installation) 7S1500GOOl 2 units
2. EA Inspector handheld upgrade for dual functionality 7S1505GOOl 2 units
3. EA Handheld GPS option lB11920HOl 2 units
4. License for Route Manager and EA_lnspector 7S1560GOOl
Manager 7S1565GOOl 1 lot
5. Equ !lance -Annual fee N/A 3 years
.. ./'~,";;,:;; .. :.( •...... ... ••. ",.l, .:.:?<\;;,) .. );>./....,.:.;: .••••.....•. ;; .... , .• ,': •...•.. ' ..•.• r .. ··· .,;.~'>;.;, ......• <:, ...•.. :',.y,.'
Pilot Program Management Support:
1. Elster's Professional Services as defined in this SOW
covering the 12 month period from the kick-off meeting N/A I 1 lot
2. Estimated travel and living. N/A 1 lot
Elster Managed Services includes the license to use EnergyAxis via the UEP and CEM as defmed in this
Agreement. Elster provides Support Services as defined in this Agreement.
6 Project Service Deliverables and Responsibilities
This section is intended to provide clarity on the tasks required and the interdependencies among all parties.
The responsible party for each task is indicated in the section entitled "Responsibility Matrix."
6.1 Project Planning Meeting
Elster will provide up to two (2) days on-site by Elster Project Manager to assist in refining the scope of
work. Topics include:
1. Project Management Activities deliverables/ scope, ordering, invoicing, meetings, reports and
communications
2. VPN requirements
20
3. Subcontractor discussions
4. Network planning
5. IT integration planning
6. Field Installation
7. Meter Conftgurations
8. Managed Services Setup Form U1010
9. Training
10. Project Schedule
CPAU will have the appropriate personnel participate to support the project planning effort. This includes
participation by CPAU project manager, Metering and Field Customer Services, Meter Reading, Billing,
Customer Service, Technology Services and IT personnel.
Elster Deliverables
a) Final project schedule identifying deliverables and milestones that must take place to meet the
requirements of the contract. Each party's responsibilities will be clearly identified on the
schedule and the parties will agree to it pursuant to the Documentation Review section of this
SOW. Upon approval by the parties, this project schedule will be deemed by the parties as
incorporated in this SOW.
b) Project communications plan describing the meetings, documentation, points of contacts and all
other project communications.
6.2 Network Planning
As part of the Network Planning effort, Elster will discuss typical Gatekeeper and EA_Repeater planning
guidelines.
Considering that CPAU will deploy only a subset of meters throughout the City's limit, CPAU shall provide a
list of participations before the network planning effort can proceed. CPAU shall provide Elster with suitable
electrical distribution and geographical maps of the installation locations that can be used to show
meter/ device coordinates, allowing approximate communications distances between points to be determined
and meter and other device locations in lat/lon format or other format which can be goo-coded. CPAU is
responsible for finalizing the Gatekeeper and EA_Repeater locations and conducting site surveys of the
proposed locations if necessary upon receipt of recommendations on proposed locations from Elster.
During planning for the remaining deployment, Elster will provide one additional network design to include
the remaining meters and to relocate or install additional EA_Gatekeepers if necessary.
CPAU Deliverable
a) Address locations or GPS coordinates for participants
b) List of available locations for the installation of the EA_ Gatekeepers and/or EA_Repeaters.
Elster Deliverable
a) File with proposed Gatekeeper and EA_Repeater locations for initial deployment
b) File with proposed Gatekeeper and EA_Repeater locations for remaining deployment
6.3 Elster Managed Service Setup
Elster Deliverables
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a) Provision Meters and Gatekeepers in Managed system
b) Configure EnergyAxis UEP and set up requited accounts for utility
c) Configure EnergyAxis CEM for utility .
d) Train utility users on UEP /CEM web views and functionality
6.4 Optional Billing Setup
Elster can work with CPAU to develop a customized file format for direct import into CPAU's billing
system. This can be provided via a change order.
CPAU Deliverable
a) Provide a requited file format by CPAU's billing system.
Elster Deliverable
a) Provide a file format that complies with the input file format specified by CPA U's billing system.
6.5 Gas and Water Metering
6.5.1 Handheld Equipment
The handheld equipment is requited for installation of gas and water modules.
6.5.2 Handheld Associated Software
EA_Inspector -resides on the handheld and supports troubleshooting and other
functionality at the meter/module site.
EA_InstallerPlus resides on the handheld and communicates with Route Manager to
facilitate gas and water module installation.
Route Manager resides on a desktop PC
EA_Inspector Manager -resides on a desktop PC
6.5.3 Route Manager Integration
Elster's Route Manager Software is reguited to complete installation and configuration of EA_Gas Module
and the EA_ Water modules, create marriage files, and for ongoing route maintenance and adding modules.
Integration is requited between the customer CIS and Route Manager.
CPAU Deliverable
a) Customer and meter data from CIS for importing to Route Manager software in Elster defmed
format. Optionally, Elster can provide the format conversion for CPAU for an additional fee.
Elster Deliyerable
a) Planning call (up to 2 hours) with CPAU Project Manager, CPAU IT representative, Installation
partner, gas/water department operations to discuss installation of Route Manager.
22
b) Installation of software.
c) Planning call (up to 2 hours) to discuss module programming elements.
d) Training on Route Manager and EA_Gas Module and EA_ Water Module installation and
programming (2-3 days).
6.6 Installation of Field Devices
CPAU is responsible for installation of all field devices including but not limited to, meters, EA_Gatekeepers,
EA_Repeaters, EA_ Water Modules, EA_Gas Modules.
6.7 WAN Communications
CPAU is responsible for installation and operation of all WAN communications between the Gatekeepers
(and direct-connected meter/device locations) and Elster's datacenter. Sufficient incoming communication
channels shall be installed to ensure adequate throughput in sending data over those communication lines and
sufficient capacity to support unsolicited call-ins by Gatekeepers for outages and alarms, for future system
expansion and other functionality as desired by CPAU. CPAU shall provide the IP addresses of each
Gatekeeper to Elster Managed Services to establish communication with the datacenter.
6.8 Provisioning of EnergyAxis Meters/Devices in the Managed System
To enable Elster to setup meter/devices in the managed service environment, CPAU is required to perform
several tasks including:
• Gather technical information
o Provide contacts details for utility's primary technical contact
o Provide sufficient information to Elster Managed Services (to be provided in the planning
stage).
• Activate WAN communications to each Gatekeeper and provide access to Elster Support
personnel.
• Provide all configuration details of WAN, including IP address of each Gatekeeper, to Elster
Managed Services
• Collaborate with Elster Managed Services to test message flow between each Gatekeeper and the
managed system.
• Collaborate with Elster Managed Services to troubleshoot any communication issues between
each Gatekeeper and the managed system.
In addition, CPAU will complete the U1010 form which captures data such as:
For Each Gatekeeper:
• Elster serial number for Gatekeeper
• Installation date
• Billing password
• Unrestricted password
• IP address
• Latitude (decimal format)
23
• Longitude (decimal format)
For Each Meter:
• Customer serial number
• Installation date
• Account number
• Account name
• Street number
• Street name
• Unit number
• Latitude (decimal format)
• Longitude (decimal format)
6.9 IT Infrastructure
Elster Managed Services shall operate and maintain the following IT infrastructure:
• Facilities suitable for all required server hardware, including proper environmental conditioning,
power back up and surge protection.
• Physical installation of server hardware and operating system.
• Backup and other required support processes
• Maintenance of servers and operating systems
6.10 Training
Training on the UEP and CEM will be conducted via webinar. Elster will also provide training on the use of
the handheld equipment and the associated software.
CPAU Deliverable
A small number of meters and Gatekeepers configured on the Managed System
Elster Deliverable
a) Elster will provide V2 day of remote training via webinar on the usage of the UEP and CEM
portals.
b) Training on meter/device additions and removals
c) Handheld and Supporting software training
24
6.11 Data Redundancy and Security
Elster provides the EnergyAxis Managed Service from two data centers. The data centers provide full
redundancy, including power supply, ftre suppression systems, cooling, and high reliability. The data
centers are secure environments with controlled and monitored access and multiple levels of physical
network security. A dedicated connection between the two data centers enables data replication in
different physical locations.
7 Responsibility Matrix
To facilitate understanding of the roles of each party, the matrix below includes Elster's subcontractors.
Elster remains responsible for its work and that of its subcontractors.
"P" indicates primary responsibility; "S" indicates supporting responsibility
,:}
. ",," , , .:," .....•.. <:
' .. ',
.......
1 Project Planning Meeting P S S
2 Network Planning P S
3 Managed Service Setup S P S
4 Route Manager Integration S P
Installation of Field Devices
5 Meters/ EA_Modules P
6 Gatekeepers P
7 WAN fteld devices (if necessary) P
8 WAN Communications P
9 Provisioning Meters/Modules in System S P
10 IT Infrastructure P
Training
11 Training on web portals S P S
12 Training in installation handheld P S
13 Documentation P
25
8 Appendices
User Training on the UEP and CEM curriculum
Module Name Audience Topics Mode
I System Overview Utility staff • Utility Energy Portal (UEP) Presentation
responsible for • Consumer Energy Manager (CEM) metering and • EnergyAxis Management System billing. (EA_MS) and other hosted
applications
• Role of Elster Managed Services for
application, network, server, database
and security administration
• How to access the support team at
Elster Managed Service
Utility Energy Utility staff • Log onto UEP Presentation
Portal (UEP)-responsible for • Navigate through the Dashboard, & Exercises
Navigation metering and Meter Map, Data Export, Meter Load
billing. Status and Data Statistics applications
UEP-Data Utility staff • Select type of flat me to export to Presentation
Export responsible for your billing system & Exercises
billing • Select quality flags of data
validation prior to export
• Review flat me after export
UEP -Meter Utility staff • Set criteria for Meter Search Presentation
Map responsible for • View meter info & Exercises
metering • Analyze communication problems
with communication path, distance
calculator and map/satellite tools
• Execute On-Demand Read
• Execute Disconnect/Reconnect
command
• View log of remote request
messages
UEP-Meter Utility staff • Navigate and Interpret the message Presentation
Load Status responsible for log for each Meter & Exercises
metering • Navigate and Interpret the message
log for each Gatekeeper
UEP-Data Utility staff • Navigate between Billing Cycle and Presentation
Statistics responsible for Gatekeeper views. & Exercises
metering • Reading and Interpreting Data
Statistics
• Reading and Interpreting data gaps,
estimates and flags within interval and
register reads.
26
Module Name Audience Topics Mode
Consumer Utility staff • Log onto CEM Presentation
Energy Manager responsible for • Navigate through the Account & Exercises
! (CEM) metering and Management, Consumption Report,
billing Cost Report and Energy Saving
applications
CEM -Account Utility staff • Configure appliance profile Presentation
Management responsible for • Configure retailer profile & Exercises
billing
CEM-Utility staff • Navigate bar graph from multi-Presentation
I C ' ! onsumptton responsible for month to intraday views & Exercises
i Report billing • Navigate chart
CEM-Cost Utility staff • Navigate cost comparison graph Presentation
Report responsible for from multi-month to intraday views & Exercises
billing • Navigate cost report for any data
range
CEM -Energy Utility staff • Navigate, Configure and Interpret Presentation
Savings responsible for the Load Shifting tool & Exercises
billing • Read and Interpret the
Conservation tool
27
EXHIBIT C
RATES AND FEES
Hardware Solutions: Style Number
1. AMI Electric Meter -Form 25 with disconnect and
ZigBee. Please see pricing note #1 for form 125 meter ZFCWMABOOOO
2. EA_Water modules -pit mount in-line connector EW202200000
3. Water module -pit cover lid mounting kit EW200004000
4. Water module -splice kit 40301KOOl
EG214000000 American
EG254000000 American 58
5. EA_Gas modules -American or Sensus Meter. Please see EG224000oo0 Sensus
pricing note #5 EG244000000 Sensus 415
6. Gas module mounting kit for American or Sensus EG210001000 American
meters. Please see pricing note #5 EG220001000 Sensus
7. EA_Gatekeepers -A3TL type single-phase or polyphase
form ZDxxOOW1082
8. HAN hardware -ZigBee In-Home Display IHD
,,,": ':'.,,' ::.: . , {J J' .. ' .. ::.'. 'i.< ~:'.<";': ' ...... J,.' ..... ,; ..... ,
.' "'." :: ... '.' .• : •.•. ; ... ,., .•. ::. ..• , • :." .,J , .. :. ',.," • ' ':.:., ,J.: "' .. :,. 'c'
Software Solutions:
One-time set up fee:
1. Set up fee for 900 meter endpoints (or 300 homes) N/A
2. Utility-branded utility portal -set up fee N/A
3. Utility-branded consumer energy portal -set up fee N/A
4. HAN -Set up fee N/A
Monthly hosting fee:
5. AMI Monthly hosting fee N/A
6. Utility-branded utility portal -monthly hosting fee N/A
7. Utility-branded consumer energy portal-monthly
hosting fee N/A
8. HAN -Monthly support fee for In-Home-Display only.
Please see pricing note #2 N/A
9. Mobile App -Monthly support fee N/A
Quantity Extended Price
300
300
300
300
$ 122,570
300
300
25 I
50
.,.,',; :' "
.: ~' ". ::
900 meters
110t $ 4,040
110t
1 lot
36 months
36 months
36 months $ 94,860
36 months
36 months ::,rr"( "'" ; ,';', <;A> ' >:":: :;,',:.:,;, .'. '<.:i ::':Y,' J:: ';"';,/:{ ... \. .",' : ... , ...... ;
;".:" ;" :,'. ,:'. ' ""(> ,;:,.. .. ,.;:
Equipment Installation Tools:
1. EA_lnstalier handheld (field tool for water/gas module
installation) 7S15OOGOOl 2 units
2. EA Inspector handheld upgrade for dual functionality 7S1505GOOl 2 units
3. EA Handheld GPS option lB11920HOl 2 units $ 24,830
7S1560GOOl
4. License for Route Manager and EA-,nspector Manager 7S1565GOOl 1 lot
5. Equipment maintenance -Annual fee N/A 3 years
28
Total Project Cost $
Estimated Sales Tax 8.375% $
Contingency Planning 5.00% $
Total Project +
Contingency $
Pricing Notes:
1. REX2 form 12S (style number ZF5WKABOOOO) maybe substitute for form 2S. The adder for each
form 12S meter is $25 net each.
2. HAI\I Pricing notes:
a. HAN hosting fee is applicable for up to 50 in-home-displays. Additional fee applies for
thermostats and load control devices.
b. HAN hosting fee includes decommissioning and re-commissioning for up to 200 times
annually. If exceeding 200 times annually, additional fee applies; furthermore, Elster
recommends that CPAU will need to deploy the Demand Response Server, which is not in
the scope ofthis SOW.
3. Elster's Professional Services include the following:
a. Twelve (12) month duration from the kick-off meeting to assist with project management
and planning during the deployment of electric meters, EA_Water and EA_Gas modules.
b. On-site kick-off meeting
c. AMI network design and planning
d. On-site training on the operation of the installation tools -up to 3 days
e. On-site supervision and consultation on the installation ofthe gatekeepers, electric meters,
EA_Water and EA_Gas modules -up to 15 days
f. Should CPAU complete the deployment of electric/gas/water meters at 300 homes before
12 months from the kick-off meeting and elect to end the support of Elster's Professional
Services early, a credit of $5,000 per month of early ending of Professional service will be
provided by Elster. This credit will be up to $30,000, in the event the services end 6 months
after kick-off meeting. At such time, Elster's Professional Services will conclude.
29
378,200
12,345
18,910
409,455
4. Travel and living are invoiced at cost plus 10%
5. Pricing for EA_Gas Modules does not include any Riotronics device or special adapters. Elster
assumes CPAU will provide all necessary Riotronics devices and/or special adapters required for
successful implementation.
a. When the Riotronics device is in used, EA_gas module for stand-alone application will be
required. Style number of stand-alone EA.JSas module is EG103100000. The adder for each
stand-alone gas module is $4 net each.
b. The mounting kit options for the stand-alone EA_gas module are (1) wall mounting kit -style
number EG100002100; th.e adder for each wall mounting kit is $10.30 net each or (2) pipe
mounting kit -style number EG 100003100; the adder for each pipe mounting kit is $19.40
net each.
Summary Projected Payment Plan
1 Hardware $122,570
Invoiced Upon Shipment
Set-up Fee $ 4,040
2 Invoiced Upon Contract Signing per paragraph
4(a)(i) of the Agreement
Managed Service Fees (Hosting Fees) Total $ 94,860
3 Invoiced annually per paragraph 4(a) (i) of the $31,620 per year
Agreement
4 Estimated Travel & Living $12,500
Invoiced per paragraph 4(a)(iv}
Equipment Installation Tools Total $ 24,830
5 Software invoiced upon installation $4,800
Handheld invoiced Upon Shipment $7,330 each
Annual Maintenance Fee invoiced per Exhibit E $895 each per year
Project Services Total $119,400
Invoiced Monthly as Estimated Herein
January, 2013 $ 26,400
February, 2013 $ 18,120
6
March,2013 $15,240
April,2013 $ 8,640
May, 2013 $ 8,640
30
June, 2013 $ 12,320
July, 2013 $ 5,000
August, 2013 $ 5,000
September, 2013 $ 5,000
October, 2013 $ 5,000
November, 2013 $ 5,000
December, 2013 $ 5,000
31
lTD:······
Elster Solutions, LLC
208 S Rogers Lane
Raleigh, NC 27610
Work requested by customer:
System Maintenance Agreement
Professional Services Request Form
1\'fTNi:.: ';,.}.
Systems Support Manager
Fax: (919) 250 5439
(Attach additional page(s) if more space is required)
Rates: The rates quoted below apply to work initiated in calendar year 2012 and completed within one (1) year. Rates are
for labor only and DO NOT include travel and living expenses.
'.profes.s,i6i1ais.en?<:er,ole·s .'. '" ··,<~()iJr,lf;ia~~";~',~~rVi¢~,j:j~sb?J>#op;;; ".':;: or,> . 'L" • . i\,i . '\ ;'.:':' '.' .;
Program Manager $220 Project Management Office for large scale and turn key projects, including projects
involving multiple vendors
Project Manager $180
Business Process Specialist $250
Integration Developer $180
IT architect $170
Field Service Engineer $170
Database Administrator $170
Support Engineer $160
Logistics Coordinator $145
Assemble the project team, develop and execute the project schedule, report weekly
status, and acquire the appropriate resources necessary to resolve issues
Technical expertise for business process analysis re-engineering and integration
scoping for Enterprise AMI integration
Develop software to integrate Enterprise business applications
Technical expertise to ensure that the network elements, metering end points and
hardware interfaces of the AMI system deployed function as intended to meet the
specified AMI system requirements and configuration of network to meet Licensee's
Enterprise IT Requirements
Field installation coordination and field trouble shooting
Assistance with database management, optimization and migration
Assistance with maintenance services outside the scope
Coordination of equipment and material delivery logistics
Test Engineer $140 Definition and execution of system acceptance test of Licensor approved system
configuration
Unless otherwise stated herein, Service prices are based on normal business hours (8 a,m, to 5 p,m, Monday through Friday), "Time"
is on-the-job plus travel time to and from the job site from the regularly assigned office location. "Time" starts and ends at the
person's regularly assigned office location unless otherwise agreed upon prior to the start of work. Overtime, Saturday hours will be
billed at one and one half (1 '/2) times the hourly rate; Sunday will be billed at two (2) times the hourly rate and holiday hours
recognized by Licensor will be billed at three (3) times the hourly rate. Minimum billable time per person will be four (4) hours.
, SendI~y()i¢esTo: : -.' ~
Company:
Address:
City, State ZIP: Printed Name
ATTN:
Telephone No.:
Signature Date
••.. *J,iterthne TracI#gSyst~mraskName"
All services and products delivered under this request are governed exclusively by Elster Solutions, LLC General Terms and
Conditions.
32
i
/.1
ExhibitD
Route and Inspector Manager
Software License
This Route and Inspector Manager License Agreement (RMLA or Agreement) is made part of
EQUIPMENT AND FUllY MANAGED SERVICES AGREEMENT ('Agreement') between Elster and
the City (also referred to as is between Elster Solutions, LLC, ("Elster"), and City of Palo Alto
Utilities ("Licensee" or "CPAU").
In consideration of their mutual promises, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:
1 TERM
The term of this RMLA is one (1) year beginning on the Effective Date with automatic renewals
for successive one (1) year periods unless terminated earlier by either Party in accordance with
the provisions set forth herein
2 LICENSE GRANT
Licensor hereby grants to Licensee a nonexclusive, nontransferable license for Route and
Inspector Manager License, subject to the terms and conditions set forth in this RMLA, to Use
the Software.
If the Licensee's role is that of Utility providing electricity, water and gas to the general public,
the software license granted herein authorizes use of the Software for reading devices owned by
the Utility, provided such devices are within the Utility's existing network. The software license
does not support a Utility's current or planned expansion to other utilities.
Trademarks, trade names or logos included or embedded in the Software and Third Party
Software shall remain with the Software and Third Party Software and may not be removed or
altered by Licensee.
3 OWNERSHIP AND INTELEECTUAL PROPERTY RIGHTS
Licensee hereby acknowledges and agrees that the Software, and all patents, copyrights, trade
secrets and trademarks related thereto are the exclusive property and Confidential Information of
Licensor or its affiliates and their Third Party Software licensors and that Licensor or its
affiliates and their respective Third Party Software licensors, as applicable, own all rights, title
and interest, including, without limitation, all worldwide patent, copyright, trade secret and
trademark rights and all goodwill associated therewith, in and to the Software and Third Party
Software.
Except for the license granted by Licensor to Licensee pursuant to Section 3 of this RMLA,
Licensee shall acquire no right, title or interest of any kind or nature whatsoever in or to the
Software or any Third Party Software or any patent, copyright, trade secret or trademark .of
Licensor, Licensor's affiliates or Licensor's licensors.
The Software is protected under United States and international copyright, trade secret and other
intellectual property laws. Without limiting the generality of the foregoing, the parties
33
acknowledge and agree that the source code, binary code and all visual, printed and other outputs
of the Software are trade secrets of Licensor and its affiliates and licensors. Except as otherwise
expressly permitted under this RMLA, Licensee may not copy, translate, modify, display, patch,
alter or otherwise change or make derivative works of the Software, Third Party Software, the
applicable Documentation or any individual part thereof. Licensee shall not alter or remove any
copyright notice or any propriety legend contained in or located on any part of the Software,
Third Party Software, or the applicable Documentation and shall reproduce and maintain all such
copyright notices or proprietary legends in and on any copy of the Software, Third Party
Software, or Documentation that Licensee makes as permitted by this Agreement.
4. RESTRICTIONS ON USE, TRANSFER AND PROVISION OF SERVICES
Licensee shall not derive or attempt to derive the source code or structure of all or any portion of
the Software or Third Party Software by reverse engineering (except as required by law for
interoperability), disassembly, decompilation or any other means. Licensee shall not give, sell,
rent, lease, pledge, encumber, hypothecate, timeshare, provide subscription services for,
sublicense, disclose, publish, assign, market, transfer or distribute any portion of the Software,
Third Party Software or the applicable Documentation or other rights to any third party,
including but not limited to Licensee's subsidiaries and affiliates. Licensee shall not publish the
results of any benchmark tests run on the Software or Third Party Software and shall treat such
results as Confidential Information of Licensor.
5. CONFIDENTIALITY
The parties shall comply with the Confidentiality provisions of the General Agreement with
respect to treatment of Confidential Information. Notwithstanding the foregoing, Licensor shall
be entitled to disclose to a third party licensor of any Third Party Software (a) the fact of this
RMLA (including the identity of Licensee) and (b) audit results with respect to Licensee's
compliance with the Third Party Software terms of this Agreement. The provisions of this
Article shall survive any termination of this RMLA or of any license granted hereunder.
6. DELIVERY
Licensor shall deliver the number of copies of the Software as specified in the price sheet.
7. LICENSE FEES AND PAYMENT
Licensee shall pay Licensor the System License Fees set forth in Exhibit C upon execution of
this Agreement and completion ofEA_MS installation and training. Licensee shall pay Licensor
interest on any late payments at the lesser of one and one-half percent (1.5%) per month or the
maximum rate permitted by law.
License fees do not include shipping charges, or any sales, use, withholding, excise or other
taxes now or hereafter imposed on the production, storage, transportation, import, export,
licensing or use of the products or services provided under this RMLA. Such expenses and taxes
shall be paid by Licensee. Licensee shall indemnify Licensor for any such expenses or taxes
which Licensor is required to pay.
This RMLA defines the understandings, obligations and responsibilities of the parties, and will
function in place of a separate purchase order for the same.
34
8. INFRINGEMENT REMEDY
Licensor shall, at its expense, defend any suit which may be brought against Licensee by a third.
party claiming that the Software infringes upon such third party's United States patent or
copyright, and Licensor shall pay all judgments and costs recovered against Licensee in any such
suit and shall reimburse Licensee for costs or expenses incurred by Licensee in the defense of
any such suit, provided that Licensee gives Licensor prompt notice of such suit no later than ten
(10) days after Licensee receives notice of such suit, or sooner if required by applicable law;
reasonable assistance in the defense thereof; and full opportunity to control all aspects of the
defense thereof, including settlement. In the event the Software is held to be infringing, and the
use of the Software is enjoined, Licensor shall, at its option, procure for Licensee the right to
continue using the Software; replace it with non-infringing software; modifY it so it becomes
non-infringing; or remove the Software or the infringing portion thereof and refund the license
fees applicable thereto.
Licensor's obligations under this Section do not apply with respect to a claim of infringement if
and to the extent such claim arises out of: (A) compliance with Licensee's specifications, (B) the
use by Licensee or any of its customers of any third-party software or equipment that infringes
any patent, copyright, trademark or trade secret of any third party, (C) any modification or
alteration of the Software (other than by or on behalf of Licensor), (D) use of a version of the
Software that has been superseded or (E) use of the Software after notice of the claimed
infringement has been received by Licensee. The foregoing states the exclusive remedy of
Licensee and the sole liability of Licensor for infringement.
9 LIMITATION OF LIABILITY
The Licensor's total liability relating to this RMLA, the Software or to the license granted
hereunder, shall not exceed the license fees paid by Licensee to Licensor under this RMLA.
Licensor and its Licensors (including Licensors of Third Party Software) will not be liable in any
event for loss or inaccuracy of data, loss of use of systems, cost of replacement software or
systems, loss of profits, loss of revenue or any other indirect, special, incidental or consequential
damages, whether or not foreseeable and even if Licensor has been advised of the possibility of
such damages. In no event shall Licensor be liable for any damages, losses, liabilities, costs and
expenses (including reasonable attorneys' fees) arising from any improper installation or
improper use by Licensee, its customers, end users or anyone other than Licensor of the software
or any goods supplied by Licensor, or arising from any failure by Licensee, its customers, end
users or anyone other than Licensor to follow their own safety procedures in connection with the
installation or use of the software or any other goods supplied by Licensor.
10. FORCE MAJEURE
Neither party shall be liable for loss, damage, or delay nor be in default for failure to perform
(other than payment obligations) due to causes beyond its reasonable control, including but not
limited to acts of God, acts of war or terrorism, fire, flood, strike, labor disputes, acts or
omissions of any governmental authority or of the other party, compliance with government
regulations, embargos, fuel or energy shortage, delays in transportation, inability to obtain
necessary labor, materials, or services from usual sources, or from defects or delays in
performance of a party's suppliers or subcontractors due to such causes. In the event of a delay
35
by either party due to the foregoing, the date of delivery or time for completion shall be extended
by a period of time reasonably necessary to overcome the delay.
11. AUDIT
Licensor and its licensors shall have the right, upon notice to Licensee, to enter onto Licensee's
premises to perform an audit to ensure that Licensee is in compliance with this RMLA. Licensee
shall keep, and shall allow Licensor to access, accurate records of each computer on which the
Software, portions of the Software, and/or any Third Party Software are installed, the locations
of such computers, the number of Network Devices for which the Software is used and the
number of Authorized Users Using the Software. Licensor shall have the right to disclose the
results of any audits to its respective licensors.
12. ASSIGNMENT
Neither this RMLA nor any interest under this agreement shall be assigned by Licensee without
the prior written consent of Elster, except that either Party may assign this Agreement without
prior consent in connection with a sale of controlling interest in the capital stock or other equity
interest of such Party, a sale of all or substantially all of the assets of such Party, or pursuant to a
merger or consolidation. Subject to the foregoing, this RMLA shall be binding upon and shall
inure to the benefit of the Parties hereto and their respective successors and permitted assigns.
13. TERMINATION
Either Party may terminate this RMLA in accordance with the termination provisions in Exhibit
A, General Terms and Conditions of Sale. Within ten (l0) days after the date of termination,
Licensee will cease use of the Software and Third Party Software and return, or at Elster's
direction, destroy all originals and copies, in whole or in part and in any form, of any Software or
other Elster furnished documentation in the Licensees possession, and will certifY to the
foregoing to Elster in writing
14. GOVERNMENT REGULATIONS
The Software and Third Party Software is provided with RESTRICTED RIGHTS. Use,
duplication, or disclosure of the Software, Third Party Software or Documentation by any
department or agency of the federal government is subject to restriction as set forth in
subparagraph (b)(3) of the Right in Technical Data and Computer Software clause at DFARS
252.227-7013 or subparagraphs (c)(I) and (2) of the Commercial Computer Software-Restricted
Rights at 48 CFR 52.227-19, as applicable. For purposes thereof, "Contractor" is Elster
Solutions, LLC, 208 S. Rogers Lane, Raleigh, NC 27610.
Licensee shall not export or transmit the Software, Third Party Software, or any part thereof,
directly or indirectly, to any restricted countries or in any manner that would violate the Export
Administration Act of 1979, as amended, or any other United States laws and regulations as shall
from time to time govern the license and delivery of technology abroad by persons subject to
United States law.
15 NOTICES
Any notice required or permitted hereunder shall be in writing and shall be deemed to have been
delivered on the date evidenced by receipt obtained upon transmission by fax, upon delivery by
36
commercial delivery service, or upon delivery by certified or registered mail to a party's address
or facsimile number shown below:
If to Elster
Elster Solutions, LLC
208 S Rogers Lane
Raleigh, NC 27610
ATTN: Contracts Department
Michelle Simmons
csa@us.elster.com
If to Customer
City of Palo Alto Utilities
250 Hamilton Avenue,
Palo Alto, CA 94301, USA
Either Party may at any time change its respective address or point of contact by sending written
notice of the change to the other Party.
16 MISCELLANEOUS
This RMLA, including the Appendices attached hereto, contains the entire understanding of the
parties with respect to the matters contained herein. This Agreement may not be modified except
by writing, executed by authorized representatives of Licensor and Licensee.
The headings and captions contained herein shall not be considered to be a part hereof for
purposes of interpretation or application hereof, but are for convenience only.
No action, regardless of form, arising out of the transactions under this RMLA may be brought
by Licensee more than two (2) years after the cause of action has accrued.
Either party's failure to exercise any right under this RMLA shall not constitute a waiver of any
other terms or conditions of this RMLA with respect to any other or subsequent breach, nor a
waiver by such party of its right at any time thereafter to require exact and strict compliance with
the terms hereof.
Third Party Software providers are third party beneficiaries to this RMLA with respect to
provisions applicable to Third Party Software. Licensee will be bound by the terms and
conditions of use of any Third Party Software provider.
The provisions of Sections 2, 3, 4, 5, 8, 9, 11, 12, 14 and 15, shall survive the cancellation,
termination or expiration of this Agreement.
If any provision of this RMLA is held to be illegal, invalid or unenforceable in any respect, the
remaining provisions of this RMLA shall remain in full force and effect to the maximum extent
possible.
This RMLA shall be governed by and construed in accordance with the laws of the State of
California, without regard to the choice of law or conflicts of law rules of any jurisdiction. The
parties agree that the Uniform Computer Information Transactions Act shall not apply to the
terms or interpretation of this Agreement. The parties further agree that all causes of action
against either party under this RNfLA shall be brought solely and exclusively in the State Courts
of the State of California. Licensee acknowledges that this Agreement constitutes a legal
agreement that obligates certain payments as noted herein. Should Licensee'sbusiness processes
37
require that one or more purchase orders be issued to provide for payments obligated by this
RMLA, that these purchase orders will be issued to address these payment obligations.
In no event shall Licensor be liable for, and Licensee shall indemnify and hold harmless
Licensor, its affiliates and their respective officers, directors and employees from, any damages,
losses, liabilities, costs and expenses (including reasonable attomeys' fees) arising from any
improper installation or improper use by Licensee, its customers, end users or anyone other than
Licensor of the Software or any goods supplied by Licensor, or arising from any failure by
Licensee, its customers, end users or anyone other than Licensor to follow their own safety
procedures in connection with the installation or use of the Software or any other goods supplied
by Licensor.
38
ther Hardware & Services
ExhibitD-l
HARDWARE
handheld (field tool for water/gas module
installation)
Subtotal-Other Hardware & Services
SOFTWARE
Price
$5,500
o EA _Inspector and/or Route Manager Software consisting of:
o EA_Inspector Manager installed on the customer computer system(s)
o Route Manager installed on the customer computer system(s)
Total
$11,000
o The EA_Inspector application on the handheld device(s) used with the system
o PI 900 software on the handheld device(s) used with the system
Additional Fees for Handheld Software License Qty Price
EA_Inspector handheld upgrade for dual functionality 2 1,500
EA _Handheld GPS Option 2 330
License for Route Manager and EA_Inspector Manager 1 4,800
39
Total
$3,000
$660
$4,800
EXHIBITE
HANDHELD UNIT MAINTENANCE AGREEMENT
THIS HANDHELD UNIT MAINTENANCE AGREEMENT ("HMA"or agreement) is made part of the
EQUIPMENT AND FULLY MANAGED SERVICES AGREEMENT (Agreement) between Elster and
the City (also referred to as CPAU or Licensee).
1. PURPOSE
This HMA defInes extended maintenance services available to the CPAU after expiration of the
manufacturers' new product warranty, and is limited in application to Elster's EA Inspector and EA Installer
handheld units ("Handheld Units" "Units" or "Handhelds''). By executing this HMA, the CPAU has elected
to purchase extended maintenance services for the Handhelds listed in Attachment A for the fees defIned
therein.
2. TERM
The term of this HMA shall begin on the Effective Date of the Agreement and shall continue through
December 31st of the then current calendar year (the "Initial Term"). Thereafter, this HMA shall
automatically renew annually for successive one-year renewal terms (each a "Renewal Term'') unless the
HMA is terminated by either Party upon written notice to the other party at least sixty (60) days prior to the
end of the then current term.
3. HANDHELD UNIT INSPECTION / HMA PURCHASE CONDITIONS
CPAU may purchase an HMA to cover rnaintenance services on Handhelds no longer covered by the
manufacturer's new product warranty; reinstate a lapsed HMA to extend maintenance services of Handhelds
previously covered by the HMA; or add Handhelds not under warranty to an existing HMA. In each case
Elster must perform an eligibility inspection, and if necessary reconditioning of the Handheld Units, to
qualify the Handhelds as eligible for extended maintenance services. CPAU is responsible for paying the
eligibility inspection fee ("Inspection Fee''); the cost of reconditioning the Handheld Units if required; and
the standard HMA maintenance fee for the then current term. HMA Inspection fees and reconditioning costs
do not apply to Handhelds under the manufacturers new product warranty at the time the HMA is
purchased., Thus, if the CPAU elects to purchases a HMA to cover Handhelds prior to expiration of the
Handheld Unit warranty, only the standard HMA maintenance fee for the then current term will apply.
4. MAINTENANCE SERVICES PROVIDED
Upon CPAU return of Handheld Units to Elster for service, Elster will inspect the Handhelds to determine
the Units eligibility status under the manufacturers' new product warranty or an existing HMA. Handhelds
covered under warranty or an existing HMA will be repaired if necessary without additional charge.
Maintenance service for covered Units will include routine software updates and upgrades and repairs or
replacement of parts or boards, in which case replacement parts or boards may be functionally equivalent,
reconditioned or new. All parts and boards removed in the repair process shall become the property of
Elster. CPAU will prepay shipping charges and insurance for Handhelds returned to Elster regardless if the
Units are covered by the original manufacturers' warranty or an existing HMA. Elster will pay the cost of
returning the Handhelds to CPAU, limited .to ground service only. To arrange Handheld Maintenance service
under this HMA, contact Customer Service at 888.757.1918 for a return material authorization number and
shipping instructions.
40
5. FEES AND HMA RENEWAL
The annual fee for Handheld Unit maintenance services ("Maintenance Fee") is Eight Hundred Ninety-Five
Dollars and 00/100 ($895.00) per Unit. The Maintenance Fee for the Initial Term shall be prorated from the
Effective Date of the Agreement for the number of days remaining in the calendar year and invoiced
accordingly. The Inspection Fee for Handhelds previously purchased and no longer covered by the
manufacturers' new product warranty or an existing HMA, is Eight Hundred Ninety-Five Dollars and 00/100
($895.00) per Unit. Inspection Fees are not prorated or refundable, and do not apply to new Handheld Units
or Units still under the original manufacturers' warranty when such Units are added to an existing or new
HMA. Maintenance Fee calculations are based on a calendar year and annual HMA Renewal Term fees are
invoiced in October of each year for the following annual term. Onsite support services and/or any other
additional services provided by Elster are billed at the end of the month in which the services are provided.
For Inspection Fees, onsite support and other Services, all invoice payments are due net thirty (30) days from
the date of invoice and CPAU will be assessed a late payment charge on any amount unpaid after the due
date, computed at a rate equal to the lesser of one and one-half percent (1.5%) per month or the maximum
amount permitted by law on the unpaid balance for each month such balance remains unpaid. The late
payment charge shall be in addition to any other remedies Elster may have at law or in equity. All HMA Fees
will be invoiced and paid in US dollars. Software license fees corresponding to Handheld Unit (EA Inspector
/ EA Installer) software are included as part of the System License Agreement fee, thus no additional license
fees apply to handhelds covered by an HMA.
Maintenance Fees and Inspection Fees are subject to annual adjustment following the Initial Term. Elster at
its discretion shall have the right to increase HMA Fees at the time of annual renewal by the greater of three
percent (3%) or the percent increase in the most recent, annualized Consumer Price Index for Urban
Customers (CPI-V) posted by the Bureau of Labor Statistics of the US Department of Labor.
6. HANDHELD UNIT ADDITIONS/DELETIONS
The CPAU may at any time request the addition or removal of CPAU owned Handheld Units under an
HMA. All requests are conditional on meeting the requirements of Sections 3 and 5 herein, and must be
directed to Elster in writing along with the serial numbers of the Units to be added or removed. Maintenance
Fees previously paid for Handheld Units removed will not be prorated or adjusted for the length of coverage,
and except as noted in Section 10, refunds will not be made.
7. HANDHELD UNIT MAINTENANCE WARRANTY
Elster warrants that all Handheld Unit maintenance services will be performed in a good and workmanlike
manner. Replacement parts and boards are warranted for ninety (90) days from the date of repair or the
balance of the HMA Term, whichever is longer. No other warranties of any kind, expressed or implied,
including warranties of merchantability or guarantee of fitness for a particular use, are offered with respect to
services performed or parts furnished by Elster. This warranty excludes defects, malfunctions, performance
failures or damages to any Units resulting from use in an other than normal and customary manner, misuse,
accident, neglect improper alterations, or unauthorized disassembly by anyone other than Elster or its
authorized representative.
8. LIMITATION OF LIABILITY
The maximum liability of Elster with regard to Handhelds covered by this HMA is limited to repair of the
Units or refund of the corresponding Maintenance Fee paid during the term when such Units are determined
by Elster to be beyond repair. In no event shall Elster be liable for damages in excess of the original
Maintenance Fee paid for the then current term, or for any loss of use, lost time or inconvenience,
commercial loss, lost profits or savings, or any other incidental, special or consequential damages arising out
of this HMA or of the use or inability to use such Units, to the full extent such may be disclaimed by law.
41
9. TERMINATION
Either Party may terminate this Agreement in accordance with the termination provisions detailed in Exhibit
A, General Terms and Conditions of Sale. Notwithstanding the foregoing, if Elster determines it can no
longer maintain or support certain Handheld Units, Elster shall have the right to terminate maintenance
services of such Units, remove the Units from the HMA, and refund the CPAU the pro-rated Maintenance
Fee less any cost of repairs performed during the then current term.
10. GOVERNING LAW
The HMA shall be governed by and construed in accordance with the laws of the State of California, without
regard to the choice of law or conflicts of law rules of any jurisdiction. The parties agree that all causes of
action against either party under this Agreement shall be brought solely and exclusively in the State Courts of
the State of California, or the U.S. District Court for California.
11 SEVERABILITY
If any provision of this Agreement is held to be illegal, invalid or unenforceable in any respect, the remaining
provisions of this Agreement shall remain in full force and effect to the maximum extent possible.
12 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original,
and all of which together shall constitute one and the same instrument. For purposes of this Agreement, a
facsimile or email transmitted PDF signature shall be deemed an original.
13 SURVIVAL
The provisions of Sections 7, 8, 9 and 12 shall survive the cancellation, expiration or termination of this
HMA.
14 NOTICES
Any notice required or permitted hereunder shall be in writing and shall be deemed to have been delivered on
the date evidenced by receipt obtained upon transmission by fax, upon delivery by commercial delivery
service, or upon delivery by certified or registered mail to a party's address or facsimile number shown below:
Either Party may at any time change its respective address or point of contact by sending written notice of the
change to the other Party.
If to Elster
Elster Solutions, ILC
208 S Rogers Lane
Raleigh, NC 27610
ATTN: Contracts Department
Michelle Simmons
csa@us.elster.com
15 ASSIGNMENT
If to Customer
City of Palo Alto Utilities
250 Hamilton Avenue,
Palo Alto, CA 94301, USA
This HMA is not transferable to any other party without prior written authorization from Elster.
42
43
ATTACHMENT A
EA INSPECTOR AND EA INSTALLER HANDHELD UNITS UNDER AGREEMENT
Customer name ----------------------------------------------------------------Address
------------~--------------------------------------------------City, State ZIP ----------------------------------------------------------------Contact name
Telephone No. ----------------------------------------------------------------
EA_Inspector (FW900 and/or FW950) Annual Fee per Unit ------~--~--------------~--------------------------------7S1500G002
Serial Number(s) (Beginning with "UM"):
1. 895.00
2. 895.00
3. 895.00
(Add lines as necessary)
EA Installer (FW900 and/or FW950)
EA Installer -7S1500G001
Serial Number(s) (Beginning with "UM''):
1. 895.00
2. 895.00
3. 895.00
(Add lines as necessary)
Total HMA Fees:
By submission of this order, the customer hereby requests annual Equipment Maintenance for the
units listed above.
Signature --------------------------------------------------------------Printed name
------------------------------------------------------------~ Title --------------------------------------------------------------Date --------------------------------------------------------------Note 1: The EA_Inspector may have the optional PI 900 application installed. In these "dual load" cases, a
single EA_Inspector HMA fee is charged.
Please return this completed and signed form to:
Elster Solutions, LLC
Attn: Contracts Department
Michelle Simmons
208 S. Rogers Lane
Raleigh, NC 27610
csa@us.elster.com
44
REQUIRED
YES
YES
YES
YES
YES
EXHIBITF
INSURANCE REQUIREMENTS
CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM
OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE
SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST'S KEY RATING OF A-:VII, OR HIGHER,
LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA.
AWARD IS CONTINGENT ON COMPLIANCE WITH CITY'S INSURANCE REQUIREMENTS, AS
SPECIFIED, BELOW:
MINIMUM LIMITS
TYPE OF COVERAGE REQUIREMENT EACH
OCCURRENCE AGGREGATE
WORKER'S COMPENSATION STATUTORY
EMPLOYER'S LIABILITY STATUTORY
BODILY INJURY $1,000,000 $1,000,000
GENERAL LIABILITY, INCLUDING
PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE $1,000,000 $1,000,000
PROPERTY DAMAGE BLANKET
CONTRACTUAL, AND FIRE LEGAL BODILY INJURY & PROPERTY DAMAGE $1,000,000 $1,000,000
LIABILITY COMBINED.
BODILY INJURY $1,000,000 $1,000,000 -$1,000,000 $1,000,000 -EACH OCCURRENCE $1,000,000 $1,000,000
AUTOMOBILE LlABILlTY,INCLUDING
ALL OWNED, HIRED, NON-OWNED PROPERTY DAMAGE $1,000,000 $1,000,000
BODILY INJURY AND PROPERTY $1,000,000 $1,000,000
DAMAGE COMBINED
PROFESSIONAL LIABILITY,
INCLUDING, ERRORS AND
OMISSIONS, MALPRACTICE (WHEN
APPLICABLE), AND NEGLIGENT
PERFORMANCE ALL DAMAGES $1,000000
THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND
EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY
RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS
SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS' COMPENSATION, EMPLOYER'S LIABILITY
AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS,
AND EMPLOYEES.
I. INSURANCE COVERAGE MUST INCLUDE:
A. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE
FOR CONTRACTOR'S AGREEMENT TO INDEMNIFY CITY.
II. CONTACTOR MUST SUBMIT CERTIFICATES(S} OF INSURANCE EVIDENCING REQUIRED
COVERAGE.
III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO
45
"ADDITIONAL INSUREDS"
A. PRIMARY COVERAGE
WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED
INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT
ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR
FOR THE BENEFIT OF THE ADDITIONAL INSUREDS.
B. CROSS LIABILITY
THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS
UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS
OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT. AND THE NAMING OF
MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY
UNDER THIS POLICY.
NOTICES SHALL BE MAILED TO: PURCHASING AND
CONTRACT ADMINISTRATION CITY OF PALO ALTO
P.O. BOX 10250 PALO ALTO, CA 94303.
46
EXHIBITG
SOFTWARE AS A SERVICE SECURITY AND PRIVACY
TERMS AND CONDITIONS
This Exhibit shall be made a part 0/ the EQUIPMENT AND FULLY MANAGED SERVICES
AGREEMENT between Elster and the City 0/ Palo Alto
In order to assure the privacy and security of the personal information of the City's customers
and people who do business with the City, including, without limitation, vendors, utility
customers; library patrons and other individuals and businesses, who are required to share such
information with the City, as a condition of receiving services from the City or selling goods and
services to the City, including, without limitation, the Software as a Service services provider
(the "Consultant") and its subcontractors, if any, including, without limitation, any Information
Technology ("IT") infrastructure services provider, shall design, install, provide, and maintain a
secure IT environment, described below, while it renders and performs the Services and
furnishes goods, if any, described in the Statement of Work, Exhibit 8, to the extent any scope
of work implicates the confidentiality and privacy of the personal information of the City's
customers. -rhe Consultant shall fulfill the data and information security requirements (the
"Requirements") set forth in Part A below.
A "secure IT environment" includes: (a) the IT infrastructure, by which the Services are provided
to the City, including connection to the City's IT systems; (b) the Consultant's operations and
maintenance processes needed to support the environment, including disaster recovery and
business continuity planning; and (c) the IT infrastructure performance monitoring services to
ensure a secure and reliable environment and service availability to the City. "IT infrastructure"
refers to the integrated framework, including, without limitation, data centers, computers, and
database management devices, upon which digital networks operate.
In the event that, after the Effective Date, the Consultant reasonably determines that it cannot
fulfill the Requirements, the Consultant shall promptly inform the City of its determination and
submit, in writing, one or more alternate countermeasure options to the Requirements (the
"Alternate Requirements" as set forth in Part B), which may be accepted or rejected in the
reasonable satisfaction of the Information Security Manager (the "ISM").
Part A. Requirements:
The Consultant shall at all times during the term of any contract between the City and the
Consultant:
(a) Appoint or designate an employee, preferably an executive officer, as the security
liaison to the City with respect to the Services to be performed under this Agreement.
(b) Provide a full and complete response to the City's Supplier Security and Privacy
47
Assessment Questionnaire (the ((Questionnaire") to the ISM, and also report any major
non-conformance to the Requirements,as and when requested. The response shall
include a detailed implementation plan of required countermeasures, which the City
requires the Consultant to adopt as countermeasures in the performance of the
Services. In addition, as of the annual anniversary date of this Agreement the
Consultantshall reportto the City, in writing, any major changes to the IT infrastructure.
(c) Within three (3) months afterthe Effective Date, consultant and its Subcontractor will
use their best efforts to adopt and implement information security and privacy policies
that are documented, accessible to the City, and as necessary, conform to ISO 27001/2 -
Information Security Management Systems (ISMS) Standards. See the following:
http:Uwww.iso.org!iso/home!store!cataloguetc!cataloguedetail.htm?csnumber=421
03
http:Uwww.iso.org!iso!isocatalogue!cataloguetc!cataloguedetail.htm?csnumber=5
0297
(d) Conduct routine data and information security compliance training of its personnel that
is appropriate to their role.
(e) Within three (3) months after the Effective Date, the Contractor and/or its
Subcontractor as applicable, will develop and maintain detailed documentation ofthe IT
infrastructure, including software versions and patch levels.
(f) Develop an independently verifiable process, consistent with industry standards, for
performing professional and criminal background checks of its employees that (1) would
permit verification of employees' personal identity and employment status, and (2)
would enable the immediate denial of access to the City's confidential data and
information by any of its employees who no longer would require access to that
information or who are terminated.
(g) Provide a list of IT infrastructure components in order to verify whether the Consultant
. has met or has failed to meet any objective terms and conditions this].
(h) Implement access accountability (identification and authentication) architecture and . . . . .
support role-base access control (({RBAC') and segregation of duties (({SoD")
mechanisms for all personnel, systems and software used to provide the Services.
({RBAC" refers to a computer systems security approach to restricting access only to
authorized users. ({SoDII is an approach that would require more than one individual to
complete a security task in order to promote the detection and prevention of fraud and
errors.
(i) Assist the City in undertaking annually an assessment to assure that: (1) all elements of
the Services' environment design and deployment are known to the City, and (2) has
implemented measures in accordance with industry best practices applicable to secure
coding and secure IT architecture.
0) Provide and maintain secure intersystem communication paths that would ensure the
confidentiality, integrity and availability of the City's information.
(k) Within three (3) months after the Effective Date, the Contractor and/or its
Subcontractor as applicable will deploy and maintain IT system upgrades, patches and
configurations conformingto current patch and/or release levels by not later than one
(1) week after its date of release. Emergency security patches must be installed within
48
24 hours after its date of release.
(I) Provide for the timely detection of, response to, and the reporting of security incidents,
including on-going incident monitoringwith logging.
(m) Notify the City within one (1) hour of detecting a security incident that results in the
unauthorized access to or the misuse of the City's confidential data and information.
(n) Inform the City that any third party service provider(s) meet(s) all of the Requirements.
(0) Within three (3) months after the Effective Date, the Contractor and/or its
Subcontractor as applicable will perform security self-audits on a regular basis and not
less frequently than on a quarterly basis, and provide the required summary reports of
those self-audits to the ISM on the annual anniversary date or any other date agreed to
by the Parties.
(p) Accommodate, as practicable, and upon reasonable prior notice by the City, the City's
performance of random site security audits at the Consultant's site(s), including the
site(s) of a third party service provider(sL as applicable. The scope ofthese audits will
extend to the Consultant's and its third party service provider(s)' awareness of security
policies and practices, systems configurations, access authentication and authorization,
and incident detection and response.
(q) Cooperate with the City to ensure that to the extent required by applicable laws, rules
and regulations, the Confidential Information will be accessible only by the Consultant
and any authorized third party service provider's personnel.
(r) Perform regular, reliable secured backups of all data needed to maximize availability of
the Services.
(s) Maintain meter data relating to the Services for a period of three (3) years after the
expiration or earlier termination of this Agreement and in a mutually agreeable storage
medium. Within thirty (30) days after the effective date of expiration or earlier
termination ofthis Agreement, all meter data relating to the performance ofthe
Services shall be provided to the ISM.
(t) Maintain the Confidential Information in accordance with applicable federal, state and
local data and information privacy laws, rules and regulations.
(u) Encrypt the Confidential Information before delivering the same by electronic mail to
the City and or any authorized recipient.
(v) Unless otherwise addressed in the Agreement, shall not hold the City liable for any
direct, indirect or punitive damages whatsoever including, without limitation, damages
for loss of use, data or profits, arising out of or in any way connected with the City's IT
environment, including, without limitation, IT infrastructure communications.
Notwithstanding the forgoing, in the event that any confidential information regarding
Consultant security is compromised by the City it will immediately notify Consultant and
the Consultant reserves its right to hold the City liable for any damages arising from the
same.
Part B. Alternate Requirements [TBA1:
49
EXHIBITH
NON-DISCLOSURE AGREEMENT BETWEEN
CITY OF PALO ALTO AND ELSTER SOLUTIONS, LLC
(ATTACHED)
50
City of Palo Alto (ID # 3209)
Finance Committee Staff Report
Report Type: Action ItemsMeeting Date: 11/14/2012
City of Palo Alto Page 1
Council Priority: Environmental Sustainability
Summary Title: Residential Customer Connect and TOU Rate Pilots
Title: Utilities Advisory Commission Recommendation to Approve the
Residential Customer Connect Pilot Program, Approve a Contract with Elster
Solution LLC for up to $450,455, and Adopt a Resolution Approving Pilot
Scale Time-of-Use Electric Rates for Residential Customers
From: City Manager
Lead Department: Utilities
Recommendation
Staff and the Utilities Advisory Commission (UAC) recommend that the Finance Committee
recommend that the City Council:
1. Approve the residential customer engagement (CustomerConnect) pilot program;
2. Approve a contract with Elster Solutions LLC for an estimated cost of $409,455, with the
authorization of additional related, but unforeseen, work which may develop during the
project, for an amount of $41,000, equal to ten percent of the contract amount, for a
not to exceed total amount of $450,455; and
3. Adopt the attached resolution approving pilot time-of-use electric rates for residential
customers.
Executive Summary
The proposed Residential CustomerConnect pilot program is designed to evaluate changes in
energy and water use for customers provided with advanced meters and equipment to view
their energy and water consumption. The pilot program will be available to 300 residential
customers who agree to have advanced electric, natural gas and water meters installed for free
at their homes. Pilot participants will also be provided tools to access, display and interpret
their utility usage information. The pilot will include a time-of-use (TOU) electric pilot rate for
up to 150 residential electric utility customers, particularly those with electric vehicles, who can
City of Palo Alto Page 2
shift electric usage to non-peak night hours to reduce the cost of energy supplies and the
environmental impact of on-peak electric usage.
To participate in the CustomerConnect pilot, customers must provide the City of Palo Alto
Utilities (CPAU) feedback on their experiences in participating in the pilot program with the
objective of assisting CPAU in evaluating the merits and shortcomings of such programs and
associated technologies. While 200 of the participants will be self-selected volunteers, 100 will
be invited by CPAU to participate. If approved by Council, the CustomerConnect pilot is
expected to start in the spring of 2013 and end by December 2015. The cost of the three-year
pilot program is estimated to be about $550,000, which is available in the capital project budget
for implementing the smart meter roadmap.
Background
Application of Smart Grid Technologies in Palo Alto
CPAU began investigating the applicability of smart grid technologies in Palo Alto in 2009. In
March 2010 a consultant was engaged to determine smart grid applications applicable to
CPAU’s electric, gas and water utility services and to undertake a benefit-cost assessment for
implementation. In April 2011, the UAC received a summary of the consultant’s report,
“Assessment of Smart Grid Application for Palo Alto.” The consultant identified smart grid
applications that are relevant to Palo Alto but found that the benefits of such applications in
Palo Alto did not justify the estimated $15 million capital investment. However, the consultant
predicted the cost of implementation would decline as the value of the technology became
more apparent in the coming years.
Based on the findings, the consultant recommended that, rather than investing in a full-scale
smart grid, CPAU should implement small-scale pilot projects over the next several years. This
strategy allows CPAU to determine customer interest and to develop a better understanding of
the value proposition for implementing such a system in Palo Alto at a future date when the
costs may decrease and the technology has matured.
Based on the consultant’s recommendations, staff developed a smart grid road map with nine
projects (Staff Report #24431). The CustomerConnect and time-of-use (TOU) rate pilot
programs are two of those projects. The results of the TOU and CustomerConnect pilots
(together with results from the planned commercial customer engagement pilot and the
ongoing Commercial Customer Peak Demand Response program) will provide Palo Alto-specific
information that will be used to update the 2011 smart grid implementation cost-benefit
assessment.
1 http://archive.cityofpaloalto.org/civica/filebank/blobdload.asp?BlobID=30212
City of Palo Alto Page 3
Discussion
The proposed CustomerConnect pilot program will be available to 300 residential customers
who agree to participate in the program. In order to reduce any self-selection bias, 200 of the
participants will be volunteers and the remaining 100 will be invited by CPAU to participate.
The proposed pilot program will utilize advanced communicating electric, natural gas and water
meters and associated infrastructure to provide web-based utility usage information and
analytical tools to the participants and the utility. The TOU rate pilot, which is part of the
CustomerConnect pilot, is designed to encourage up to 150 residential electric utility
customers, particularly those with electric vehicles (EVs), to shift electric usage to non-peak
night hours. All of the TOU pilot participants will be included in the CustomerConnect pilot.
The details of the proposed program are discussed in the following sections:
A. CustomerConnect Pilot Overview
B. TOU Pilot Overview
C. Evaluation plan of the pilot program and incorporating customer input
D. Customer eligibility criteria to participate in the pilot
E. Customer Communication Plan
F. Post-Pilot Plan
A. CustomerConnect Pilot Overview
Objectives
The objectives of the proposed CustomerConnect pilot program are to:
1. Gauge residential customer interest, experience and satisfaction using advanced meters
and associated engagement tools;
2. Quantify the change in residential customer energy use through efficiency and
conservation measures as a result of the customer engagement tools;
3. Evaluate the impact of the programs on utility costs and revenues;
4. Quantify residential customer bill impact; and
5. Gain insight into the costs and benefits of implementing full-scale smart meter-based
residential customer services.
City of Palo Alto Page 4
CustomerConnect and TOU rate Pilot Coordination
In the CustomerConnect pilot, 300 residential customers who agree to participate in the pilot
will be provided advanced electric, natural gas, and water meters, and customer engagement
tool(s), including easy-to-understand relevant, and timely energy and water usage information
and analytical tools. Of the 300 pilot participants, up to 150 will also participate in the TOU rate
pilot.
The coordination and timeline of the CustomerConnect and TOU rate pilots is shown in the
Figure 1. Beginning in January 2013, before the smart meters are available, TOU meters will be
installed for the first 20 EV owners participating in the TOU rate pilot. In April 2013, all 300
CustomerConnect participants will receive smart meters (including the first 20 EV owners) and
30 additional EV owners and up to 50 non-EV owners will be placed on the TOU rate. An
additional 50 EV owners (the “control” group) will not be put on the TOU rate until November
2013. All 300 participants will receive customer engagement tools to help interpret the data
provided from the smart meters.
Figure 1: TOU and CustomerConnect Pilot Program Timeline
City of Palo Alto Page 5
CustomerConnect Pilot Equipment and Services Contract
Through a competitive bid process2, the City selected a proposal that is a joint effort between
Elster Solution LLC (Elster), an advanced utility meter and meter network equipment provider,
and UtiliSmart Corporation (UC), an IT hosting and cloud computing provider with utility and
customer information tools. The agreement with Elster (and UC as a subcontractor to Elster)
includes the following tasks:
1. Provide advanced communicating electric meters and communicating radios to retrofit
the City’s natural gas and water meters to serve 300 customers;
2. Install a ‘meshed radio network’ using Elster’s ‘Energy Axis Gatekeeper’ devices to set-
up a radio network that will enable customers throughout the City to participate in the
pilot program;
3. Utilize the City’s existing service arrangement with Verizon Wireless to provide wireless
connections to approximately 30 Gatekeeper devices to transmit customer usage data
and store it in the EnergyAxis AMI platform in the internet cloud;
4. Provide customer engagement tools for participating customers to analyze their usage
patterns on a granular and timely basis with information made available through web
and smart phone applications for all three utility services;
5. Provide 50 in-home-display (IHD) devices that pilot participants may borrow for three
months at a time to view their home’s instantaneous electrical usage;
6. Support City staff with meter installation and customer communication and help trouble
shoot issues encountered by customers using software tools;
7. Provide equipment service, warranties and service level agreements;
8. Provide program management support; and
9. Enhance customer engagement tools on a semi-annual basis.
The cost of the contract is estimated to be $409,455 over a three-year term. The agreement
has an option to extend the term on an annual basis after the initial three-year term
(Attachment H). Staff is requesting an additional $41,000 (10%) contract amount authorization
in the event staff seeks additional unforeseen project related work from Elster. Installation of
the advanced meters and associated equipment is expected to occur in the spring of 2013, if
Council approves the agreement.
2 A request for proposal was issued in May 2012 and four proposals were received in June 2012. Among the four
proposals, two proposals from Stanford University and Bidgely were rejected as unresponsive. Upon review of the
two responsive proposals from Itron, Inc. and Elster Solutions, LLC, Elster’s proposal was considered best suited to
meet the pilot program objectives.
City of Palo Alto Page 6
CustomerConnect Pilot Related Ancillary Service Contracts
In addition to the vendor contract described above, CPAU will utilize the City’s existing service
agreements with Verizon for wireless services. The cost of such services is projected to be less
than $5,000 per year. CPAU also plans to contract for services to obtain EV energy usage
patterns, analyze pilot program data and update internal guidelines and policies related to
safeguarding customer information. A Customer Information Privacy and Security Guideline to
ensure cloud-based service providers adhere to industry best practices to protect customer
data was developed in collaboration with the City Information Technology Department and is
being incorporated into the Elster Contract. These additional tasks are expected to cost a total
of approximately $100,000 and will be undertaken under existing authorizations.
Results of the 2010 Smart Grid Customer Survey and Design of the CustomerConnect Pilot
In the fall of 2010, in conjunction with other California municipal electric utilities, CPAU
commissioned a survey on a variety of topics including customer perceptions and concerns
about implementing smart grid related technologies and systems. The major smart grid related
findings of this survey were as follows:
CPAU enjoys a high degree of credibility with its residential and commercial customers;
Customers approached smart grid technologies cautiously and appeared to be aware of
missteps by PG&E;
Among the 250 residential customers:
o 71% were aware of smart meters;
o 67% identified smart meter concept a good idea, 22% thought it was not a good
idea and 12% were not sure;
o 73% of customers believed smart meters would help them manage usage more
efficiently; and
o 65% were willing to participate in a CPAU smart grid pilot program.
Residential customer concerns related to smart meters were as follows:
o 27% expressed concern about impact on cost/rates;
o 21% were concerned about meter accuracy and reliability;
o 18% did not have any concerns;
o 15% were concerned about privacy and usage information control;
o 7% had concerns about how and where these advanced meters will be installed;
o 2% did not want this technology; and
o 16% expressed a variety of other concerns or wanted more information.
City of Palo Alto Page 7
Staff has incorporated this input from customers when designing the pilot by:
Updating the utility customer information security and privacy guidelines and controls,
with heightened due diligence from the City’s Information Security Manager;
Contracting for services from reputable vendors who have implemented comprehensive
approaches to information security that assures confidentiality, integrity, availability
and auditability of their IT infrastructure;
Verifying that the wireless radios in customer and network meters meet regulatory
standards regarding the health and safety of CPAU customers;
Testing meters for accuracy of utility consumption measurement;
Designing the pilot evaluation plan to seek participant input and learn from actual
customer experience; and
Deciding not to make large-scale investment in smart grid and advanced metering
technology unless it is clear that such investments will provide a positive monetary
return and service enhancements to utility customers.
These pilot programs and their evaluation will provide CPAU and the community knowledge
and experience to make informed decisions regarding smart grid technologies investments.
B. TOU Rate Pilot Overview
The proposed residential TOU rate pilot is designed to encourage up to 150 residential
customers, particularly those with electric vehicles (EVs), to shift electric usage to non-peak
night hours. The TOU pilot electric rates are lower for night time electric consumption since
they reflect CPAU’s costs to buy energy, which is less expensive during the off-peak hours.
Shifting usage to off-peak periods reduces CPAU’s cost, minimizes the adverse impact on the
environment and reduces the impact of EVs on residential distribution transformers and the
electric distribution system. If 100 typical residential customers with EVs participate in the TOU
pilot and shift their electric loads (EV charging and other household electric usage) to less costly
periods, the customers could collectively save approximately $3,800 per year, and the City
would realize an equivalent amount of savings from the purchase of lower priced energy.
TOU Pilot Objectives
All TOU pilot participants are also enrolled in the CustomerConnect pilot program. There are,
however, additional objectives for the residential TOU pilot program including:
1. To gauge customer interest and customer satisfaction with the TOU rates;
2. To quantify the TOU rate benefit to customers and the utility;
City of Palo Alto Page 8
3. To evaluate the impact of a TOU rate on customers’ electric consumption patterns, both
for EV charging and other household uses, and, thus, to evaluate the impact of the
program on utility costs and revenues; and
4. To investigate ways to incorporate modern smart grid technologies to provide relevant
and timely electric usage/billing information to customers in a manner that will assist
customers to optimally use electricity at their homes, including shifting loads to late
night periods.
TOU Pilot Phases (Total of 150 customers)
Phase 1: Because advanced Elster meters will not be delivered and installed until April 2013 at
the earliest, the first phase of the TOU pilot, beginning in January 2013, will be limited to 20
residential customers who will be provided with TOU meters. Monthly consumption data will
be collected for three time periods per day offering some insight into customers’ usage
patterns. To be eligible to participate in the first phase of the TOU pilot, residential customers
must also be EV owners. Phase 1 will be used to work through any metering and billing issues.
Phase 2: In the spring of 2013, the TOU pilot will enter Phase 2, and the pilot will be expanded
to include additional customers. All customers will have Elster advanced meters. Advance
meters provide greater granularity by allowing utilities to collect, and customers to view, hourly
electricity usage information every day. Such detailed information will reveal peak usage
shifting patterns that may occur under a TOU rate.
In Phase 2, the 20 EV customers from Phase 1 will have their TOU meters exchanged for
advanced meters and continue to be on the TOU rate. In addition to the 20 EV Phase 1
customers, 30 EV owners and 50 non-EV owners will have advanced meters installed and be put
on the TOU rate. This group, 50 EV owners and 50 non-EV owners, will be the “Treatment
Group.”
At the same time (April 2013), 50 additional EV owners will have advanced meters installed, but
they will remain on the standard E-1 residential electric rate. These customers will be the
“Control Group.” Phase 2 will be used to compare customer behavior on the TOU rate versus
the standard E-1 rate.
Phase 3: In November 2013, Phase 3 will be implemented in which the 50 customers in the
Control Group in Phase 2 will be placed on the TOU rate. At this point, all 150 TOU pilot
participating customers will be on the TOU rate. The TOU Pilot program will end in December
2014. If fewer than 150 customers sign-up for TOU rates, customers in Phases 2 and 3 will be
City of Palo Alto Page 9
reduced and the number of participants in the CustomerConnect pilot program will increase
accordingly up to a total of 300 in the program.
The three TOU pilot phases are summarized in Table 1 below.
Table 1: TOU Pilot Phase Summary
Phase 1 Phase 2 Phase 3
Timing January to
April 2013
May to November 2013 November 2013 to
December 2014
Customers 20 EV
owners
Treatment Group – 100
customers:
20 EV owners (from Phase 1)
with TOU meters converted
to advanced meters;
30 additional EV owners; and
50 non-EV owners
Control
Group – 50
customers:
50 EV
owners
All 150 participants from
Phase 2
Meter
type
TOU meter Advanced meter Advanced
meter
Advanced meter
Electric
rate
TOU rate TOU rate E-1 rate TOU rate
Goal Work
through any
issues with
metering
and billing
Establish a control group to test the impact
of TOU rates versus standard E-1 rate on
customer behavior
Expand TOU rate to all 150
TOU pilot customers and
evaluate changes in
customer behavior when
subject to the TOU versus
the E-1 rate
Proposed TOU Rate
Table 2 summarizes the current E-1 residential rate and the proposed TOU pilot rate, E-1 TOU.
The proposed E-1 TOU rate is structured as an adjustment to the existing tiered E-1 rates,
rather than a simpler (un-tiered) TOU rate with rates for each time period. Analysis showed
that a standalone voluntary TOU rate would provide excessive benefits to high consumption
customers and no benefit to customers with low consumption. The proposed rate adjustment
enables all customers to receive a benefit equivalent to the cost savings generated for the
utility. The rate enables the customer to receive a discount for off-peak energy usage, but the
customer would pay a premium for energy during the peak hours. The discount or premium is
applied to usage in the peak, mid-peak or off-peak periods and subtracted or added to the
customer’s bill calculated using the E-1 rate schedule. An illustration of this calculation, a
City of Palo Alto Page 10
sample customer bill format, and the proposed rate schedule is provided in Attachments D, E,
and B, respectively. For an average customer driving an EV 10,000 miles/year, electric bill
savings with the proposed TOU rate are about $36/year, a 10% to 15% discount from the bill on
the standard E-1 rate3. A customer with a continuous operation, single-speed pool pump would
save a similar amount on the TOU rate by running the pump solely at night.
Table 2: Summary of Existing E-1 Rate and Proposed E-1 EV TOU Rate*
E-1 Rate (Existing base rate)
Rate:
Tier 1: 9.5 ¢/kWh
Tier 2: 13.0 ¢/kWh
Tier 3: 17.4 ¢/kWh
Tiers:
Tier 1: 10 kWh/day
Tier 2: Next 10 kWh/day
Tier 3: All additional consumption
Proposed E-1 TOU (Rate adjustment from E-1 Rate)
Summer (Jun-Sep)
Peak (premium): +5.8 ¢/kWh
Mid-peak (premium): +0 ¢/kWh
Off-peak (discount): -1.9 ¢/kWh
Winter (Oct-May)
Mid-peak (premium): +0.4 ¢/kWh
Off-peak (discount): -1.3 ¢/kWh
Summer Peak:
noon-6 pm, weekdays
Off-peak:
11 pm - 6 am every night, year round
Mid-peak:
All other hours
(*) Rounded to nearest tenth of a cent per kWh.
Metering Requirements for TOU Pilot Participants
TOU and advanced meters will be installed at customer premises at no cost to the customer.
The pilot participants’ entire electric usage will be billed under the TOU rate. Staff evaluated
the option of providing a second TOU meter for EV charging only. This option would require
electric panel reconfiguration, a cost borne by the participant. A potential benefit of the
3 This assumes 7% of the monthly consumption in the summer occurs in the peak hours specified in the table.
Consumers who consume a larger percentage of their energy during on-peak periods may not benefit as much, and
in some cases the rate may even result in higher bill. Note that the peak period accounts for almost 18% of the
summer hours, while the mid- and off-peak hours account for 53% and 29% of the summer hours, respectively.
City of Palo Alto Page 11
second meter option is that under the AB32 Low Carbon Fuel Standard regulation4, the utility
may be able to claim free emission allowances credit for electricity consumed by EVs. However,
data from other utilities reflect this is not a popular option with customers; therefore, staff is
not recommending offering a second meter at this time. If a substantial number of customers
request a second meter, or if it becomes attractive for CPAU to claim EV-related emission
allowance credits, this decision will be revisited.
C. Evaluation Plan for the Pilot Programs and Incorporating Customer Input
Program evaluation will include both an impact and process evaluation components. The
impact evaluation will include impacts to the customers’ bills and to CPAU’s net revenue. The
process evaluation will focus on the customers’ experience based on feedback regarding the
program attributes, as well as CPAU’s operational experience implementing the pilots.
Customer feedback will be sought on such areas as: usefulness of the software tools to analyze
utility usage patterns, overall experience and any change in behavior and its impact on utility
bills, pilot program design, responsiveness of customer service staff in addressing their specific
questions and issues, and ease of participation and ability to save on the program. Customer
concerns related to technology, costs, privacy and security of their usage data, impact of radio
waves on health and other aspects will be solicited and analyzed.
For the 150 CustomerConnect pilot participants who are not included in the TOU pilot, 50 will
be self-selected and 100 will be randomly selected. This will eliminate ‘self-selection bias’ and
allow CPAU to obtain valid results that could reasonably be extrapolated to residential
customers who receive all three utility services from CPAU directly (primarily single-family
homes).
For the 150 TOU pilot participants, CPAU will conduct an evaluation study comparing
customers’ electric consumption patterns on a standard rate versus a TOU rate to determine
the impact of TOU rates on customers’ bills, as well as utility costs and revenues. In order to
compare customer usage patterns under a standard rate versus a TOU rate, customers who sign
up to participate in the TOU pilot program must agree to be selected, in a random draw, to be
part of the Treatment or the Control Group. Customers selected to participate in the Control
Group will receive advanced meters, but will not be offered the TOU rates until November 2013
(about 6 months after receiving advanced meters). This will allow CPAU to have six months of
“pre-TOU rate” hourly usage data for the Control Group. The before and after consumption
data for the Treatment and Control Groups will be used to determine the impact of the TOU
rate.
4 Under the AB32 Low Carbon Fuel Standard regulation, electric utilities will be able to claim free emission
allowances for electricity consumed by EVs, but there are specific metering requirements to measure consumption
and associated reporting requirements to claim allowance credits after 2015.
City of Palo Alto Page 12
The results of the impact and process evaluations will be used to recommend changes to the
TOU program, if any, and will form the basis for long term implementation plans to deploy
advanced utility technologies. Modifications to the TOU rates as well as other program design
elements may occur based on the results of the program evaluation.
D. Customer Eligibility Requirements
For both pilots, the eligibility requirements are:
1. Participants must receive all three utilities services directly from CPAU;
2. Participants must complete the registration form;
3. Participants must be willing to utilize the engagement tools provided by the
CustomerConnect pilot, and provide feedback to CPAU; and
4. Participants may not receive service through CPAU’s Automated Meter Reading (AMR)
infrastructure
Eligibility for participation in the TOU pilot program will be based on guidelines developed by
CPAU. The proposed resolution (Attachment A) grants the City Manager or his designee the
authority to establish the eligibility guidelines. This authority will provide flexibility in designing
the program and making small adjustments during implementation, where necessary, to the
pilot program. Staff will also retain the right to decline interested participants if unanticipated
operational hurdles are encountered in enrolling them in the pilot.
The following are the additional proposed eligibility requirements to participate in the
residential TOU pilot program:
1. Participants must be single-phase residential customers currently served under the E-1
rate schedule;
2. Participant may not have a solar photovoltaic (PV) system in the home; and
3. TOU participants must also participate in the CustomerConnect pilot.
Residential customers with PV systems are not eligible for the TOU pilot due to billing system
constraints. However, those customers may be included in the future and may participate in
the CustomerConnect pilot.
City of Palo Alto Page 13
To apply, customers will be required to submit a registration form (draft provided in
Attachment C). CPAU will make best efforts to enroll all customers who seek participation, but
retains the right to decide who will be accepted in the program and when they can enroll on
the TOU rate if applicable. Protocols are under development for customers who move or
decide to drop out of the pilots.
In addition, customers interested in the TOU pilot will be provided with a sample bill calculation
(similar to that in Attachment D) and answers to frequently asked questions (Attachment E). A
sample bill format will be developed as well. These documents and additional resources such
as rate comparison calculators will be available on the City’s website
(www.cityofpaloalto.org/electricvehicle).
E. Customer Communication Plan
A communication plan has been developed to ensure information is timely and thorough and to
maximize customer participation and value creation. The communication plan identifies
program steps from initial communications, to customer sign-up and on-going feedback
channels and, finally, to program evaluation.
In order to eliminate the “self-selection” bias, CPAU will inform 100 customers they have been
randomly selected to participate in the pilot and will request that they complete the enrollment
form to confirm their willingness to participate.
Based on the 2010 customer survey, staff is generally aware of the large scale enthusiasm of
customers to participate in such a pilot and the concerns the customers have about the
technology and costs. Communication channels through social media and other avenues will be
established with participants to seek their input and feedback on their experience participating
in the pilot.
F. Post-Pilot Plan
Before the TOU rate program is offered to all customers, staff will evaluate the meter reading
and software and billing system requirements in light of the estimated number of interested
customers. The development of the full scale TOU program will include an assessment of the
needs and costs associated with billing system related upgrades. While the goal is to seek
Council’s approval for full implementation of residential TOU rates by January 2015, staff may,
depending on the assessment, recommend an extension of the TOU pilot or postponement of
the program and full implementation. Results of the CustomerConnect pilot will be provided to
Council at the end of 2015.
City of Palo Alto Page 14
Commission Review and Recommendation
On July 11, 2012, the UAC considered a proposal for a pilot TOU rate program proposed to be
open to 100 residential electric customers with Electric Vehicles (EVs). All commissioners were
supportive of a TOU pilot program, but several commissioners stated that the number of
customers allowed in the proposed pilot was too small. Commissioners also explored the
possibility of making the TOU rate available to a broader group of customers, not just EV
owners, with that availability being earlier than the December 2014 date proposed by staff.
Ultimately, the UAC voted to recommend Council approve the TOU pilot with a modification to
allow non-EV owners to participate as well.
Based on this feedback from the UAC, staff presented for discussion a revised TOU rate pilot
proposal and proposed that the TOU pilot be part of the larger Residential Customer
Engagement (CustomerConnect) pilot at the September 5, 2012 meeting. At this meeting the
Commissioners expressed unanimous support for both pilot programs. A number of
Commissioners suggested staff consider collaborative opportunities with local universities and
disseminate information gathered through these pilot programs to the industry and research
communities. The minutes from the UAC’s September 5, 2012 meeting are provided as
Attachment F.
At the October 3, 2012 meeting the UAC unanimously recommended Council approve both
pilot programs and associated resources. The draft minutes from the UAC’s October 3, 2012
meeting are provided as Attachment G.
Resource Impact
The TOU and CustomerConnect pilots were contemplated by the smart grid work plan, which
has a budget of $750,000. The Elster/UtiliSmart contract is expected to cost approximately
$409,455. Staff is also requesting $41,000 (10%) for unforeseen project related work for a total
not to exceed amount of $450,455. An additional $100,000 is expected to be required for
information services, minimal modification to the billing system, program evaluation assistance
and other related consulting services. Therefore, the total cost is expected to be $550,455 plus
the $41,000 for contingencies for the Elster contract.
Staff effort will be more significant in the first year of the pilot, amounting to between 2 and 2.5
FTE, but will ramp down in subsequent years to closer to 1 FTE. Staff from various groups is
involved, and the focus of the work will migrate from Resource Management and Engineering,
to Operations, to Customer Support Services, SAP Project Management and IT depending on
the stage of project development. Some of the efforts, such as communications, will be
ongoing. It is expected this level of multi-divisional staff effort can be garnered from existing
staff resources. However, the staff time required to implement these pilots may result in a 6-
City of Palo Alto Page 15
to 12-month delay of certain non-critical capital projects (electric distribution system upgrade,
large commercial customer metering, and gas and water meter replacement plans) as well as
delays in certain internal support services. A limited amount of staff overtime may also be
needed for this project. The pilot project team includes staff from Utilities (Operations,
Engineering, Marketing, Customer Service, and Resource Management), IT and SAP Project
Management.
All costs for the proposed pilots were included in the FY 2012 budget and do not require an
adjustment to the budget or rates. Full implementation of the EV TOU rate (i.e. beyond the
pilot program) may require additional metering and billing system upgrades. These costs will
be assessed and included in staff’s recommendation to Council at the conclusion of the TOU
pilot program by December 2014.
Policy Implications
The approval of this contract is consistent with existing City policies, including the Council
approved Utilities Strategic Plan Strategy Objectives of offering programs to meet the needs of
the customers and community, and promoting the efficient use of resources. Offering
customers time-of-use electric rate also meets City’s Electric Vehicle Infrastructure Policy.
Environmental Review
This project does not require review under the California Environmental Quality Act (CEQA).
Attachments:
Attachment A - Resolution Adopting Pilot TOU Rates (PDF)
Attachment B - Rate Schedule E-1 TOU (PDF)
Attachment C - Registration for Customer Connect and TOU Rate Pilot Programs (PDF)
Attachment D -Bill Calculation Examples (PDF)
Attachment E - EV related FAQ (PDF)
Attachment F - Excerpted minutes of the UAC's 09-05-2012 meeting (PDF)
Attachment G - Excerpted minutes of the UAC's 10-03-2012 meeting (PDF)
Attachment H - Draft Agreement with Elster Solutions LLC (PDF)
FINANCE COMMITTEE
DRAFT EXCERPT
Page 1 of 5
Special Meeting
November 14, 2012
Item #3 - Utilities Advisory Commission Recommendation to Approve the
Residential Customer Connect Pilot Program, Approve a Contract with Elster
Solution LLC for up to $450,455, and Adopt a Resolution Approving Pilot Scale
Time-of-Use Electric Rates for Residential Customers.
Shiva Swaminathan, Senior Resource Planner discussed the background of the
Smart Grid and how in the past they found that implementing Smart Grid in Palo
Alto was not cost effective at that time. Due to that, Council recommended the
implementation of pilot programs. There were nine projects, two of which were
scheduled for discussion. In addition to the pilot there was a survey that was
done among residential and commercial customers. They found that about 2/3’s
of the residential customers viewed the technology favorably but had issues
related to privacy, control, cost benefits, and supply. Staff wanted to overcome
the concern that the customer’s had. The objective of the CustomerConnect Pilot
was to allow the customer to view their water consumption and energy usage the
day after their usage and for them to continually monitor the use of their own
energy. Staff also wanted to learn to better serve the customer and to reduce the
costs. Staff wanted to replace the electric meter and add radio’s to their gas and
water meters to provide a web-based tool for customer’s to view their
consumption. The pilot will be conducted with 300 residents, 150 of which they
reserved for people that were interested in Time of Use (TOU). Staff wanted to
try to run the TOU pilot phase for 2 years and CustomerConnect pilot for three
years, and then come back to Council with the results. There were electric, gas,
and water meters at the home where the data was collected. The data from the
home meters tramist them through a local mesh-network to meters called gate-
keepers. The gate-keeper meters will then transmit the consumption data
through the regular cellular networks and store the data at a vendor maintained
server in the ‘cloud.’ Customers then get to view their consumption in the cloud
via internet the the next day. There will be two portals for viewing information,
one for the City and one for the customer. The TOU pilot was beginning in
connection to the CustomerConnect Pilot, with about 150 customers, which
DRAFT EXCERPT
Page 2 of 5
Finance Committee Special Meeting
Draft Excerpt 11/14/12
involved electric vehicles. There were between 200-250 electric vehicles in the
City currently and Staff estimated about 100 users would benefit from the
program. The electric vehicle factor provided the customer with a discount of 1.9
cents if they were to charge their car between 11:00 P.M. and 6:00 A.M, year
around, but have to pay a premium of 5.8 cents/kWh from noon to 6pm during
the 4 summer months.
Vice Mayor Scharff was concerned that most people would plug in their electric
vehicle before they went to bed and asked if there was a way to set a timer for
people to begin charging their vehicles.
Ms. Fong said there was a timer on the vehicles themselves.
Mr. Swaminathan said there were two ways to set up the charger: one had to do
with when they started charging, the other setting depended on the time a
person wanted to leave their house to use their car in the morning. This was
coordinated with the CustomerConnect Pilot and they expected to get results for
this within a few years. After a few years they were planning to open the
program to all customers. He said the pilot should begin in January, with Smart
Meters installed by June, and then the pilot would end in 2014 and 2015. He said
they had a contract set up with Elster for $409,455.00 for meters, location
equipment, support services, and the customer portal. They spent some of the
money on consulting services and the design of the pilot. Staff’s recommendation
was to have Council approve the overall design of the CustomerConnect pilot, to
approve the contract with Elster Solutions LLC, and to adopt the resolution for the
pilot TOU rates.
John Melton, Utilities Advisory Commissioner said this proposal cycled through
the Utilities Advisory Commission (UAC) several times. He said the improvement
was that Staff brought this to them as two separate meetings. The initial proposal
was to have the TOU pilot only for electric vehicles, but at UAC suggestion staff
have now included non-electric vehicle customers too. He remarked that it was
going to take time to get good results.
Council Member Burt asked whether combining of the TOU and the electric
vehicle study meant there was a sub-set of the TOU people that were electric
vehicle people.
DRAFT EXCERPT
Page 3 of 5
Finance Committee Special Meeting
Draft Excerpt 11/14/12
Mr. Melton said of the 300 people, 100 to 150 were electric vehicle people.
Council Member Burt asked if the funding came from the energy efficiency or if it
was separate.
Mr. Swaminathan said the funding came from the Smart Grid CIP project funds.
Council Member Burt confirmed that the funding was already budgeted in.
Vice Mayor Scharff confirmed there was 5.8 cents added to the rates for any
energy used during peak hours, depending on which tier a person belonged to;
there were three tiers.
Mr. Swaminathan clarified that the customer had a tiered rate. The bill was
determined by multiplying 5.8 cents to the period of time used during summer
peak hours, and then adding that amount to the base bill. Then, the final bill
amount was determined by subtracting 1.9 cents times the amount of
consumption during nigh time hours year around.
Vice Mayor Scharff wanted to know if a person switched their electric vehicle off
peak hours, was it going to cost them more; he wanted to know why people
would enroll.
Ms. Fong said it costs less than if a person was not on the TOU program.
Vice Mayor Scharff said that did not seem to be the case.
Ms. Fong said if a person was using more electricity it was going to cost a person
more.
Vice Mayor Scharff gave an example of varying only a person’s electric vehicle and
wanted to know if this was going to cost a person more or less.
Mr. Swaminathan said it depended because the average household used 600
kilowatts per hour (kWh) of energy per month. If a person drove the electric
vehicle 10,000 miles per year, that calculated to about 200 kWh per month, which
was an additional cost of 1/3. The savings was 10 to 15 percent.
DRAFT EXCERPT
Page 4 of 5
Finance Committee Special Meeting
Draft Excerpt 11/14/12
Ms. Fong said peak hour charges were higher under TOU rate and a person paid
more if the usage was during peak hours because there were higher charges.
Vice Mayor Scharff confirmed the average household bill was 650 kWh per
month, which equated to $70.00 per month. He asked if that included single
family and condominiums.
Jane Ratchye, Assistant Director of Utilities said 650 kWh was high. She clarified
the median was 340 kWh.
Vice Mayor Scharff said it was not clear to him whether this equation was for
people that had a place to charge their car.
Mr. Swaminathan said the pilot was geared more toward single family homes and
said that in order for a person to participate in this program they needed to
receive all three services from the CustomConnect Program.
Council Member Burt asked to whether the conservation saving from the
customerconnect pilot was considered in the prior presentation on Energy
Efficiency program goals.
Mr. Swaminathan said any conservation gained through the pilot was going to be
incorporated into the savings.
Council Member Burt confirmed that these were additional load growth
opportunities that may come into fruition. He asked, with regard to the projected
growth in electric vehicles, was that load going to off-set gain in efficiency or was
it working out to be an expanded load.
Mr. Swaminathan said it was an expanded load and electric vehicles were
projected to be 1-2% by 2020 and was smaller than the efficiency gains expected
by 2020.
Council Member Burt said, looking at the Carbon Neutral Portfolio, people were
moving off petroleum gasoline and natural gas, and moving toward electricity. He
wanted to start thinking about the future of natural gas and petroleum use in
connection with their discussion that day.
DRAFT EXCERPT
Page 5 of 5
Finance Committee Special Meeting
Draft Excerpt 11/14/12
Vice Mayor Scharff remarked that this was a purely voluntary pilot. He wanted to
know how Staff arrived at the calculation 5.8 cents, how it was all priced, and why
they thought it was going to work.
Mr. Swaminathan said the TOU customers will be self-selecting. The participants
could monitor their bills and determine whether this was going to work for them
or not. Staff was also able to monitor participant usage, consider the electric
vehicle usage pattern, and determine whether or not it was beneficial for the
resident or not.
Vice Mayor Scharff was concerned that Staff was going to have a problem getting
enough of a sample, due to the ratio of people that owned electric vehicles and
the amount of people that wanted to participate in the study. He thought the 5.8
cents premium was not going to provide enough of a study sample.
Mr. Swaminathan said City wanted the program to be cost based so that the
program does not provide any cross subsidies.
Vice Mayor Scharff confirmed that the 1.9 cents off-sets 5.8, so the program was
cost-neutral.
Mr. Swaminathan said for an average customer savings accrue as a result of
shifting.
MOTION: Vice Mayor Scharff moved, seconded Council Member Burt to
recommend the City Council:
1) Approve the residential customer engagement (CustomerConnect) pilot
program;
2) Approve a contract with Elster Solutions LLC for an estimated cost of
$409,455, with the authorization of additional related, but unforeseen,
work which may develop during the project, for an amount of $41,000,
equal to ten percent of the contract amount, for a not to exceed total
amount of $450,455; and
3) Adopt the resolution approving pilot time-of-use electric rates for
residential customers.
MOTION PASSED: 4-0