HomeMy WebLinkAboutStaff Report 3408
City of Palo Alto (ID # 3408)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 1/28/2013
City of Palo Alto Page 1
Summary Title: Utilities 2013 Legislative Policy Guidelines
Title: Utilities Advisory Commission Recommendation that the City Council
Adopt a Resolution Approving the City of Palo Alto Utilities Legislative Policy
Guidelines for 2013
From: City Manager
Lead Department: Utilities
Recommendation
Staff and the Utilities Advisory Commission (UAC) recommend that the City Council adopt the
attached resolution approving the attached Utilities Legislative Policy Guidelines for 2013.
Executive Summary
The Utilities Legislative Policy Guidelines for 2013 (Attachment B) have been updated from the
2012 guidelines to respond to recent legislative and regulatory trends to: 1) provide direction to
staff in evaluating and responding to legislative action involving Utilities issues, and 2) clarify
approved policy and advocacy direction when active involvement of Palo Alto elected officials is
required. These revisions were reviewed and unanimously approved by the UAC at its
December 5, 2012 meeting.
The guidelines are grouped in five sections: the first addressing legislative policy guidelines that
are common to all utilities (electric, fiber optics, gas, wastewater collection, and water), and the
following four sections addressing those guidelines that are specific to electric, gas, wastewater
collection, and water. There is no section specifically for fiber optics as legislative initiatives are
largely not applicable to Palo Alto’s dark fiber system. Each section includes a set of goals for
the utility and guidelines for Palo Alto staff and elected officials when taking action to achieve
the goals.
Background
The utility industry is a high-profile and heavily regulated industry that is subject to continuous
legislative action at both the state and federal levels. Such legislation can influence, among
other things, the reliability and security of the supply and distribution infrastructure,
commodity procurement practices, customer service and billing, program design, rate design,
and activities and costs associated with climate protection. Representatives of the City
City of Palo Alto Page 2
(appointed and elected officials and staff) participate in Federal and State legislative forums to
advocate positions on energy- and water-related issues that facilitate the City’s current
strategic objectives, as adopted in the 2011 Utilities Strategic Plan: ensuring a reliable and safe
supply of utility resources, providing customer service excellence, managing costs, and ensuring
environmental sustainability. The City also participates in joint action efforts to advocate for
goals and objectives shared by other publicly-owned utilities.
At the state level, hundreds of bills focused on the utility industry can be introduced each year.
The number of bills introduced, the pace at which bills change and new language is negotiated,
and the often surprising speed at which bills can be placed for a vote during the legislative year
requires staff and elected officials to respond quickly if the City is to have any influence on the
resulting legislation. Often, a response to an amended bill is required in a matter of a day or
two. These timing constraints preclude a return to the UAC and Council for approval each time
a response is required. Therefore, a set of policy guidelines is developed each year that
identifies the goals and priorities for the City to be applied by staff when evaluating and
responding to legislation. While the guidelines are used by staff for evaluating legislation, any
advocacy positions taken in alignment with these guidelines will be subject to the approval of
the Utilities Director or City Manager per the City’s legislative advocacy process. Although it is
impractical to return for approval each time a letter is sent in response to a bill amendment,
the issues under debate are known to the UAC and Council through their participation in
legislative committee meetings, and updates from the City Manager, the Utilities Director and
City staff. Formal letters responding to legislative bills or amendments will be distributed to the
UAC and Council.
Discussion
Apart from some reorganization of the structure and non-substantive changes to update the
status of existing initiatives, the major revision was the addition of the following new
guidelines:
Under the electric utility guideline 7, which calls for advocating for Congressional, legislative, or
administrative actions on matters impacting costs or operations of the Western Area Power
Administration, a reference was made to the grid modernization goals of the Department of
Energy’s Secretary Chu March 16, 2012 memo. This is something that could potentially impact
reliability, greenhouse gas (GHG) emissions and cost. The new guideline directs support of the
grid modernization goals without compromising the primary mission of Western and
recognizing the achievements already made in California without adding duplicate costly
efforts. This supports the Utilities Strategic Plan goals of ensuring a reliable supply of utility
resources, managing costs, and ensuring environmental sustainability.
Two new guidelines were added for the natural gas utility. One mirrors the guidelines on GHG
cap-and-trade market design that is already included under the electric utility guidelines, and
has been added because the City’s gas utility will come under the GHG cap-and-trade
mechanism in 2015. The other new guideline addresses the issues of hydraulic fracturing, or
“fracking”, in recognition of state and national interest in this process. The current language
does not offer a position other than support of “fair application of environmental rules”. Any
City of Palo Alto Page 3
specific advocacy position on this will require further review of the cost, safety and
environmental impacts of any proposed legislation.
One new guideline was added for the water utility that would address possible calls for
increased infrastructure funding and regulations following the floods in the east coast in 2012.
The guideline supports reliability, but calls for fair cost allocation and avoidance of unnecessary
regulations. This supports the utilities strategic plan goals of ensuring a reliable supply while
managing costs.
Commission Review and Recommendation
The Utilities Legislative Policy Guidelines for 2013 were presented to the UAC at its December
5, 2012 meeting. The UAC had a few clarifying questions on the new guidelines, and accepted
Director Fong’s suggestion to reorganize the sections so that the utilities were listed in
alphabetical order. The UAC unanimously approved a motion to recommend that the City
Council approve the Utilities Legislative Policy Guidelines for 2013. Draft minutes from the UAC
meeting are included as Attachment C.
Resource Impact
There is no direct resource impact associated with adoption of the proposed legislative policy
guidelines. However, actions taken that support the efficient use of the City’s assets and
resources will help control costs, implement the Council’s policies and goals, and protect utility
customers.
Policy Implications
The recommendation is consistent with Council policy and supports the 2011 Utilities Strategic
Plan’s objectives of: ensuring a reliable and safe supply of utility resources, providing customer
service excellence, managing costs, and ensuring environmental sustainability.
Environmental Review
Approval of a resolution adopting the Utilities Legislative Policy Guidelines for 2013 does not
meet the definition of a project pursuant to Section 21065 of the California Environmental
Quality Act (CEQA), thus, no environmental review is required.
Attachments:
Attachment A: RESO Approving 2013 Util Legislative Guidelines (PDF)
Attachment B: 2013 Utilities Legislative Policy Guidelines (PDF)
Attachment C: Excerpted Draft UAC Minutes of December 5, 2012 Meeting (PDF)
Attachment D: 2013 Legislative Policy Guidelines with Changes from 2012 Guidelines in
Redline/Strikout Formal (PDF)
ATTACHMENT A
* NOT YET APPROVED*
130107 dm 6051826
Resolution No. _________
Resolution of the Council of the City of Palo Alto
Approving the City of Palo Alto Utilities Legislative
Policy Guidelines for 2013
A. The City of Palo Alto Utilities Strategic Plan (“Strategic Plan”), approved by the
Palo Alto City Council on July 18, 2011, [CMR 1880] provides a set of Strategic Objectives for the
City of Palo Alto Utilities Department (CPAU) to follow in ensuring a reliable and safe supply of
utility resources, providing customer service excellence, managing costs, and ensuring
environmental sustainability.
B. CPAU annually identifies Utilities’ Legislative Policy Guidelines that facilitate the
Strategic Plan’s Strategic Objectives, and advocates for utility-related issues at Federal and
State legislative forums in furtherance of those objectives.
C. In December 2012 CPAU staff updated the Legislative Policy Guidelines to
respond to recent legislative and regulatory trends.
D. Action on some of these issues may require active involvement of Palo Alto
elected and appointed officials.
E. The Utilities’ Legislative Policy Guidelines for 2013 were presented to the UAC at
its December 5, 2012 meeting, and the UAC voted unanimously (6-0) to recommend that the
City Council approve the Utilities’ Legislative Policy Guidelines.
The Council of the City of Palo Alto does hereby RESOLVE as follows:
SECTION 1. The Council hereby adopts the resolution approving the Utilities
Legislative Policy Guidelines for 2013.
//
//
//
//
//
ATTACHMENT A
* NOT YET APPROVED*
130107 dm 6051826
SECTION 2. The Council finds that the adoption of this resolution does not constitute
a project under Section 21065 of the California Environmental Quality Act (CEQA) and the CEQA
Guidelines, and therefore, no environmental assessment is required.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
___________________________ ___________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
___________________________ ___________________________
Senior Deputy City Attorney City Manager
___________________________
Director of Utilities
___________________________
Director of Administrative
Services
ATTACHMENT B
Utilities’ Legislative Policy Guidelines for 2013
Advocacy positions taken in alignment with these guidelines will be subject to the approval of the
Utilities Director or City Manager as per the City’s legislative advocacy process
ALL UTILIT IES
Goals
1. Preserve/enhance local accountability in the control and oversight of matters impacting utility
programs and rates for our customers while balancing statewide climate protection goals.
2. Support efforts to maintain or improve the reliability of the supply, transmission, storage and
distribution/collection infrastructures.
3. Support legislation that makes bold progress in cost effectively reducing greenhouse gas (GHG)
emissions, and recognizes early voluntary action.
4. Maintain the City of Palo Alto Utilities’ (CPAU’s) ability to provide safe, reliable, sustainable, and
competitively-priced utility services.
Legislative Policy Guidelines Venue Goals
1. Local
Accountability
2. Reliability
&
Infrastructure
3. Climate
Protection
4. Service
& Cost
Control
1. Advocate goals through active
participation in joint action efforts.
Federal,
State, and
Regional
2. Communicate the City’s record on
environmental and energy efficiency
programs with Legislature, California
Energy Commission (CEC), California
Air Resources Board (CARB), and
Natural Resources Defense Council
(NRDC) via California Municipal
Utilities Association (CMUA),
Northern California Power Agency
(NCPA), and the Bay Area Water
Supply and Conservation Agency
(BAWSCA).
State
Utilities Legislative Policy Guidelines for 2013
Page 2 of 13
1. Local
Accountability
2. Reliability
&
Infrastructure
3. Climate
Protection
4. Service
& Cost
Control
3. Support legislation that will result in
the most cost-effective reduction of
GHG emissions, recognition of early
action, and inclusion of more efficient
solutions, fuel switching, and demand
control programs, in integrated
resource plans.
Federal,
State, and
Regional
4. Promote utility legislation and
regulations that support reasonable
reliability standards and compliance
requirements, and effective and
consistent reporting requirements,
customer communications, and goal-
setting.
Federal,
State, and
Regional
Reliability
Councils
5. Oppose cost shifts from Federal or
State budgets and California Public
Utilities Commission (CPUC)
jurisdictional utilities through active
participation in CMUA and NCPA
legislative activities.
Federal,
State, and
CPUC
6. Advocate for State and Federal grants
for local and regional applications of
energy efficiency, conservation,
renewable resources, fiber,
wastewater collection systems and
recycled water projects.
Federal
and State
7. Maintain right of way access for utility
infrastructure.
Federal
and State
8. Protect the value of existing assets
and contracts and local regulatory
approvals of same.
Federal
and State
Utilities Legislative Policy Guidelines for 2013
Page 3 of 13
ELECTRIC
Goals
1. Preserve/enhance the ability of municipal utilities to exercise local accountability and oversight over
matters impacting customer service, programs (such as demand side efficiency and conservation
programs), and rate structure.
2. Preserve/enhance the reliability and security of infrastructure.
3. Support legislation that makes bold progress in cost effectively reducing greenhouse gas emissions
and encourages early voluntary action.
4. Preserve just and reasonable utility rates/bills.
Legislative Policy Guidelines Venue Goals
1. Local
Accountability
2.
Reliability
3. GHG
Reduction
4. Cost
Control
1. Advocate goals through Northern California Power
Agency (NCPA), California Municipal Utilities
Association (CMUA), American Public Power
Association (APPA), Transmission Agency of
Northern California (TANC), and Bay Area
Municipal Transmission Group (BAMx) with
support from Palo Alto staff to speak with a
coordinated voice.
Federal
and
State
2. Support NCPA in its continued efforts to
streamline the state regulatory reporting
responsibilities, to eliminate duplicative data and
report submittals to multiple state regulatory
agencies, including the CEC, CARB, and the
California Independent System Operator (CAISO).
State
3. Advocate for legislation/regulations that provide
local control and support for:
cost-effective clean distributed generation and
cogeneration projects, and standards for
connecting such resources to the local
distribution system;
cost-effective electric efficiency programs;
implementation of renewable portfolio
standards;
cost-effective storage integration;
direct access requirements;
smart meters and smart grid design and
implementation, and
public benefit funds (as allowed in AB1890
(1996)).
Federal
and
State
Utilities Legislative Policy Guidelines for 2013
Page 4 of 13
1. Local
Accountability
2.
Reliability
3. GHG
Reduction
4. Cost
Control
4. Support cap-and-trade market designs that:
protect consumers from the exercise of market
power;
allocate allowances that help mitigate impacts
to Palo Alto customers while providing
incentives for utilities to move to lower GHG
emission portfolios;
provide flexible compliance mechanisms such
as banking and borrowing of allowances; and
allocate funds generated from cap-and-trade
markets to GHG related activities, not as a
revenue source for state or federal general
funds.
Federal
and
State
5. Support legislation for renewable portfolio
standards that:
promote the 33% goal for the state;
maintain local compliance authority;
allow utilities to pursue low cost alternatives by
utilizing existing transmission system to access
out-of-state resources, including use of
Renewable Energy Certificates (RECs);
prevent double jeopardy in the assessment of
penalties for non-compliance; and
restrict extension of CEC jurisdiction over
Publicly Owned Utilities.
Local
and
State
6. Support/encourage transmission, generation, and
demand-reduction projects and solutions including
advocating for financing or funding
solutions/options for projects that:
enhance/ensure reliability;
ensure equitable cost allocation (including
protection against imposition of state-owned
electric contract costs on municipal utility
customers);
improve procurement flexibility (e.g. resource
adequacy rules that ensure reliability and
provide flexibility in meeting operational
requirements or flexibility in meeting State
renewable portfolio standards);
improve market transparency (particularly
transparency of IOU’s transmission and
procurement planning and implementation
activities); and
lower the environmental impact on the Bay
Area and the Peninsula.
Local,
State,
and
Federal
Utilities Legislative Policy Guidelines for 2013
Page 5 of 13
1. Local
Accountability
2.
Reliability
3. GHG
Reduction
4. Cost
Control
7. Advocate for Congressional, legislative, or
administrative actions on matters impacting costs
or operations of the Western Area Power
Administration such as:
support of Congressional Field Hearings to
explore modernizing flood control strategies,
river regulation and generation strategies at
Central Valley Project (CVP) plants to enhance
generation, water delivery, flood control and
fisheries;
protection of the status of Western Power
Marketing Administration and cost-based rates;
provisions for preference customers’ first take
at land available with economic potential for
wind farms;
balancing efforts for competing environmental
improvements in rivers and Delta conditions
with water supply and hydropower impacts;
and
Achieving the grid modernization goals of
Secretary Chu’s March 16, 2012 memo without
compromising the primary mission of Western
and recognizing the achievements already
made in California without adding duplicate
costly efforts.
Federal,
State
and
Regional
8. Advocate for Congressional, legislative, or
administrative actions on matters relating to
overly burdensome reporting and compliance
requirements established by the North American
Reliability Corporation (NERC), the Federal Energy
Regulatory Commission (FERC) or the Western
Electricity Coordinating Council (WECC).
Federal,
State
and
Regional
9. Support fair and reasonable assessment of grid
reliability established by NERC, WECC, or FERC and
seek Congressional remedies (if needed) for
punitive application of fees and fines.
Federal
and
Regional
10. Work with California Independent System
Operator (CAISO) or through FERC:
to give buyers of renewable intermittent
resources relief from imbalance penalties; and
to promote financial and operational changes
that result in timely and accurate settlement
and billing.
Federal
and
State
Utilities Legislative Policy Guidelines for 2013
Page 6 of 13
1. Local
Accountability
2.
Reliability
3. GHG
Reduction
4. Cost
Control
11. Monitor cyber security issues to ensure that CPAU,
which currently does not have critical cyber assets,
is not subject to NERC cyber security standards
and support NCPA to protect it and its member
agencies from unnecessary cyber security
regulations.
Federal
and
Regional
Utilities Legislative Policy Guidelines for 2013
Page 7 of 13
GAS
Goals
1. Preserve/enhance the ability of municipal utilities to develop their own demand side efficiency and
conservation programs, alternative gas supplies, and rate structure.
2. Increase the security and reliability of the gas supply and transmission infrastructure. This includes
retaining access to intra- and interstate gas transmission systems to reliably serve customers.
3. Support efforts to reduce greenhouse gas emissions and protect the environment.
4. Preserve just and reasonable utility rates/bills.
Legislative Policy Guidelines Venue Goals
1. Local
Authority
2. Reliability of
Infrastructure
3.
Environ
-ment
4. Cost
Control
1. Advocate most of these goals mainly
through the American Public Gas
Association (APGA) with minor support
from Palo Alto staff.
Primarily
Federal with
minor advocacy
at State level
2. Work with Northern California Power
Agency (NCPA) and California Municipal
Utilities Association (CMUA) to the extent
that the City’s goals as a gas distributor
align with generators’ use of natural gas.
Federal and
State
3. Support increased production/incentives
for renewable gas supplies from in or out of
state.
Federal and
State
4. Advocate for financing or funding for cost-
effective natural gas efficiency and solar
water heating end uses.
Federal and
State
5. Support market transparency and efforts to
eliminate market manipulation through
reasonable oversight
Federal
6. Support municipal utilities’ ability to enter
into pre-pay transactions for gas supplies.
Federal
7. Support efforts to improve pipeline safety.
Work with partners to discourage extension
of CPUC regulatory authority over
municipal gas operations. Oppose
legislative proposals resulting in
unreasonable costs for Palo Alto’s
customers.
Federal and
State
Utilities Legislative Policy Guidelines for 2013
Page 8 of 13
1. Local
Authority
2. Reliability of
Infrastructure
3.
Environ
-ment
4. Cost
Control
8. Support cap-and-trade market designs that:
protect consumers from the exercise of
market power;
allocate allowances that help mitigate
impacts to Palo Alto customers while
providing incentives for natural gas
utilities to move to lower GHG emission
portfolios;
provide flexible compliance mechanisms
such as banking and borrowing of
allowances; and
allocate funds generated from cap-and-
trade markets to GHG related activities,
not as a revenue source for state or
federal general funds.
Federal and
State
9. Advocate for the fair application of Clean
Water Act rules and other existing
environmental rules on the practice of
hydraulic fracturing or “fracking” for natural
gas development.
Federal and
State
Utilities Legislative Policy Guidelines for 2013
Page 9 of 13
WASTEWATER COLL ECTION
Goals
1. Support ability of municipal utilities to develop and manage their own conservation and efficiency
programs and retain authority over ratemaking, including the imposition of non-volumetric
customer meter or infrastructure charges for wastewater collection service.
2. Increase the reliability of the local wastewater collection systems.
3. Maintain the provision of an environmentally sustainable, reliable high quality wastewater collection
service at a fair price.
4. Support equal comparisons of wastewater collection systems by regulatory agencies in order to
minimize and reduce onerous, costly and time-intensive reporting requirements and improve value
and accuracy of information reported to the public.
Legislative Policy Guidelines Venue Goals
1. Local
Authority
2. Reliable
infrastructure
3. Maintain
service
4.Valuable
Reporting
1. Advocate goals through active
participation in the Association of Bay
Area Governments (ABAG).
Local,
Regional
& State
2. Advocate to ensure that legislative
actions regarding the comparison of
wastewater collections systems for future
regulations include the following
requirements:
timely rebuilding of the local
wastewater systems;
maintains the quality of delivered
wastewater collection service;
minimizes any increase in the cost of
wastewater collection service;
creates no additional exposure to
more frequent or severe wastewater
overflows;
supports the existing wastewater
collections systems and their
operation.
Local,
Regional
& State
3. Support provision of sufficient resources
for ABAG to enable it to advocate for:
environmentally sustainable, reliable
wastewater collection service at a fair
price;
regional comparisons of wastewater
collection projects for future state
grant funding.
Local and
Regional
Utilities Legislative Policy Guidelines for 2013
Page 10 of 13
1. Local
Authority
2. Reliable
infrastructure
3. Maintain
service
4.Valuable
Reporting
4. Support infrastructure security and
reliability including equitable allocation of
funds for increasing the security of
infrastructure.
Regional,
and State
5. Advocate for funding and local
regulations for wastewater collections
system projects and requirements that
reduce overflows and improve collection
system efficiency.
Regional,
State and
Federal
Utilities Legislative Policy Guidelines for 2013
Page 11 of 13
WATER
Goals
1. Support ability of municipal utilities to develop and manage their own conservation and efficiency
programs and retain authority over ratemaking, including the ability to optimize volumetric and
fixed charges to balance the goals of revenue certainty and water use efficiency.
2. Increase the security and reliability of the regional water system owned and operated by the San
Francisco Public Utilities Commission (SFPUC).
3. Support efficiency and recycled water programs in order to minimize the use of imported supplies.
4. Maintain the provision of an environmentally sustainable, reliable supply of high quality water at a
fair price.
Legislative Policy Guidelines Venue Goals
1. Local
Authority
2.
Reliable
infrastructure
3.
Minimize
imports
4.
Supplies
at fair
cost
1. Advocate goals through active participation in
the Bay Area Water Supply and Conservation
Agency (BAWSCA) and California Municipal
Utilities Association (CMUA), with support from
Palo Alto staff for BAWSCA and the San
Francisco Bay Area Regional Water System
Financing Authority (RFA).
Local,
Regional
& State
2. Participate in California Urban Water
Conservation Council (CUWCC) Best
Management Practice (BMP) revisions and
development to ensure that aggressive and cost-
effective efficiency goals are incorporated and
operating proposals are reasonable, achievable,
and cost-effective.
State
3. Advocate to ensure that legislative actions
regarding the Hetch Hetchy Reservoir and
conveyance system include the following
requirements:
timely rebuilding of the regional water
system;
maintains the quality of delivered water;
minimizes any increase in the cost of water;
creates no additional exposure to more
frequent or severe water shortages;
supports the existing water system and its
operation.
Local,
Regional
& State
Utilities Legislative Policy Guidelines for 2013
Page 12 of 13
1. Local
Authority
2.
Reliable
infrastructure
3.
Minimize
imports
4.
Supplies
at fair
cost
4. Advocate for interpretations or implementation
of Water Code provisions (such as those enacted
by AB 1823 (2002), AB 2058 (2002) and SB 1870
(2002)) that maintain or reinforce the authorities
and protections available to the City and
BAWSCA members outside of San Francisco.
Local,
Regional
and
State
5. Support provision of sufficient resources for
BAWSCA to enable it to advocate for:
an environmentally sustainable, reliable
supply of high quality water at a fair price;
preservation of Palo Alto’s existing
contractual water allocation and
transportation rights on the SFPUC Hetch
Hetchy system;
regional planning for conservation, recycled
water, and other water supply projects.
Local
and
Regional
6. Advocate for:
actions that preserve Palo Alto’s existing
contractual rights
supporting actions that preserve local
control over water use and limit
encroachment from outside jurisdictions
Local
and
Regional
7. Support infrastructure security and reliability
including an interconnection between the
SCVWD West Pipeline with the SFPUC’s Bay
Division Pipelines 3 and 4.
Regional
and
State
8. Support notification requirements that aid
residents/customers but do not inflict undue or
unobtainable requirements on the utility.
State
9. Support local control of public benefit funds
funding levels and program design.
State
10. Support beneficiary pays methodologies to
prevent taxes or fees, in particular those
imposed on SFPUC customers, to fund
infrastructure improvements and costs of other
water sources such as the Delta.
State
11. Advocate for financing or funding for water
conservation programs and recycled water
projects that meet end-use needs and conserve
potable water and oppose legislation that would
reduce such funding.
State,
Regional
and
Federal
Utilities Legislative Policy Guidelines for 2013
Page 13 of 13
1. Local
Authority
2.
Reliable
infrastructure
3.
Minimize
imports
4.
Supplies
at fair
cost
12. Support infrastructure security and reliability
that includes equitable allocation of funds for
increasing the security of infrastructure and that
protects the City from unnecessary regulations.
EXCERPTED DRAFT MINUTES OF THE DECEMBER 5, 2012
UTILITIES ADVISORY COMMISSION MEETING
ITEM 2: ACTION: Staff Recommendation that the Utilities Advisory Commission Recommend
that the City Council Adopt a Resolution Approving the City of Palo Alto Utilities Legislative
Policy Guidelines for 2013
Senior Resource Planner Debbie Lloyd provided a summary of the legislative guidelines,
specifically identifying the changes in the 2013 guidelines from the 2012 guidelines. She noted
the new guidelines added for the water and wastewater collection utilities to reflect
Commissioner Hall’s suggestions from the UAC’s November meeting regarding emergency
preparedness and possible introduction of Federal standards on water reliability given the
extent of damage following the East coast storms this year. She also highlighted the new gas
utility guidelines on greenhouse gas cap-and-trade market design and hydraulic fracturing, and
inclusion of the Department of Energy, Secretary Chu’s memo in the electric utility guidelines.
Commissioner Waldfogel asked to have clarified that the absence of a section for the fiber
utility was an affirmative decision. He also suggested that he would like to see how the new
guidelines align with the strategic plan goals. He would like to be sure that the guidelines do
not diverge from what we've done strategically.
Commissioner Melton asked about the new gas guideline on fracking. He asked why we added
this guideline, which he found very nebulous. Director Fong noted that the issue was coming
up at the American Public Gas Association and there may be legislation coming up at the
federal level. Lloyd stated that the guideline is a placeholder and, if an actual proposal were to
arise, staff may need to return to the UAC and Council to determine the City's position.
Commissioner Melton commented on the new water guideline 12, which seemed to cover two
different subjects: infrastructure needs and associated funding, and protecting the city from
unnecessary regulations. Lloyd referred back to the issue raised by Commissioner Hall that the
floods in the east coast this year may lead to increased calls for infrastructure funding and
regulations, and according to the goals the City would support reliability with fair cost allocation
and avoiding unnecessary regulations.
Director Fong suggested a non-substantive change to the guidelines to list the utilities in
alphabetical order.
ACTION:
Vice Chair Foster moved to support the staff's recommendation. Commissioner Chang
seconded the motion. The motion carried unanimously (6-0) with Commissioner Hall absent.
ATTACHMENT D
Utilities’ Legislative Policy Guidelines for 2013
Advocacy positions taken in alignment with these guidelines will be subject to the approval of the
Utilities Director or City Manager as per the City’s legislative advocacy process
ALL UTILIT IES
Goals
1. Preserve/enhance local accountability in the control and oversight of matters impacting utility
programs and rates for our customers while balancing statewide climate protection goals.
2. Support efforts to maintain or improve the reliability of the supply, transmission, storage and
distribution/collection infrastructures.
2.3. Support legislation that makes bold progress in cost effectively reducing greenhouse gas (GHG)
emissions, and recognizes early voluntary action.
3. Support efforts to maintain or improve the reliability of the supply, transmission, storage and
distribution/collection infrastructures.
4. Maintain the City of Palo Alto Utilities’ (CPAU’s) ability to provide safe, reliable, sustainable, and
competitively-priced utility services.
Legislative Policy Guidelines Venue Goals
1. Local
Accountability
2. Reliability
&
Infrastructure
23.
Climate
Protection
4. Service
& Cost
Control
1. Advocate goals through active
participation in joint action efforts.
Federal,
State, and
Regional
2. Communicate the City’s record on
environmental and energy efficiency
programs with Legislature, California
Energy Commission (CEC), California
Air Resources Board (CARB), and
Natural Resources Defense Council
(NRDC) via California Municipal
Utilities Association (CMUA),
Northern California Power Agency
(NCPA), and the Bay Area Water
Supply and Conservation Agency
(BAWSCA).
State
Utilities Legislative Policy Guidelines for 2013
Page 2 of 13
1. Local
Accountability
2. Reliability
&
Infrastructure
23.
Climate
Protection
4. Service
& Cost
Control
3. Support legislation that will result in
the most cost-effective reduction of
GHG emissions, recognition of early
action, and inclusion of more efficient
solutions, such as cogeneration,
distributed resources fuel switching,
and demand control programs, in
integrated resource plans.
Federal,
State, and
Regional
4. Promote utility legislation and
regulations that support reasonable
reliability standards and compliance
requirements, and effective and
consistent reporting requirements,
customer communications, and goal-
setting.
Federal,
State, and
Regional
Reliability
Councils
5. Oppose cost shifts from Federal or
State budgets and California Public
Utilities Commission (CPUC)
jurisdictional utilities through active
participation in CMUA and NCPA
legislative activities.
Federal,
State, and
CPUC
6. Advocate for State and Federal grants
for local and regional applications of
energy efficiency, conservation,
renewable resources, fiber,
wastewater collection systems and
recycled water projects.
Federal
and State
7. Maintain right of way access for utility
infrastructure.
Federal
and State
8. Protect the value of existing assets
and contracts and local regulatory
approvals of same.
Federal
and State
Utilities Legislative Policy Guidelines for 2013
Page 3 of 13
WATER
Goals
1. Support ability of municipal utilities to develop and manage their own conservation and efficiency
programs and retain authority over ratemaking, including the ability to optimize volumetric and
fixed charges to balance the goals of revenue certainty and water use efficiency.
1.2. Increase the security and reliability of the regional water system owned and operated by the San
Francisco Public Utilities Commission (SFPUC).
3. Support efficiency and recycled water programs in order to minimize the use of imported supplies.
2.4. Maintain the provision of an environmentally sustainable, reliable supply of high quality water at a
fair price.
3. Support ability of municipal utilities to develop and manage their own conservation and efficiency
programs and retain authority over ratemaking, including the ability to optimize volumetric and
fixed charges to balance the goals of revenue certainty and water use efficiency.
4. Support efficiency and recycled water programs in order to minimize the use of imported supplies.
Legislative Policy Guidelines Venue Goals
1. Local
Authority
12.
Reliable
infrastructure
3.
Minimize
imports
24.
Supplies
at fair
cost
1. Advocate goals through active participation in
the Bay Area Water Supply and Conservation
Agency (BAWSCA) and California Municipal
Utilities Association (CMUA), with support from
Palo Alto staff for BAWSCA and the San
Francisco Bay Area Regional Water System
Financing Authority (RFA).
Local,
Regional
& State
2. Participate in California Urban Water
Conservation Council (CUWCC) Best
Management Practice (BMP) revisions and
development to ensure that aggressive and cost-
effective efficiency goals are incorporated and
operating proposals are reasonable, achievable,
and cost-effective.
State
3. Advocate to ensure that legislative actions
regarding the Hetch Hetchy Reservoir and
conveyance system include the following
requirements:
timely rebuilding of the regional water
system;
maintains the quality of delivered water;
minimizes any increase in the cost of water;
Local,
Regional
& State
Utilities Legislative Policy Guidelines for 2013
Page 4 of 13
1. Local
Authority
12.
Reliable
infrastructure
3.
Minimize
imports
24.
Supplies
at fair
cost
creates no additional exposure to more
frequent or severe water shortages;
supports the existing water system and its
operation.
4. Advocate for interpretations or implementation
of Water Code provisions (such as those enacted
by AB 1823 (2002), AB 2058 (2002) and SB 1870
(2002)) that maintain or reinforce the authorities
and protections available to the City and
BAWSCA members outside of San Francisco.
Local,
Regional
and
State
5. Support provision of sufficient resources for
BAWSCA to enable it to advocate for:
an environmentally sustainable, reliable
supply of high quality water at a fair price;
preservation of Palo Alto’s existing
contractual water allocation and
transportation rights on the SFPUC Hetch
Hetchy system;
regional planning for conservation, recycled
water, and other water supply projects.
Local
and
Regional
6. Advocate for:
actions that preserve Palo Alto’s existing
contractual rights
supporting actions that preserve local
control over water use and limit
encroachment from outside jurisdictions
Local
and
Regional
7. Support infrastructure security and reliability
including an interconnection between the
SCVWD West Pipeline with the SFPUC’s Bay
Division Pipelines 3 and 4.
Regional
and
State
8. Support notification requirements that aid
residents/customers but do not inflict undue or
unobtainable requirements on the utility.
State
9. Support local control of public benefit funds
funding levels and program design.
State
10. Support beneficiary pays methodologies to
prevent taxes or fees, in particular those
imposed on SFPUC customers, to fund
infrastructure improvements and costs of other
water sources such as the Delta.
State
11. Advocate for financing or funding for water State,
Regional
Utilities Legislative Policy Guidelines for 2013
Page 5 of 13
1. Local
Authority
12.
Reliable
infrastructure
3.
Minimize
imports
24.
Supplies
at fair
cost
conservation programs and recycled water
projects that meet end-use needs and conserve
potable water and oppose legislation that would
reduce such funding.
and
Federal
12. Support infrastructure security and reliability
that includes equitable allocation of funds for
increasing the security of infrastructure and that
protects the City from unnecessary regulations.
Utilities Legislative Policy Guidelines for 2013
Page 6 of 13
GAS
Goals
1. Preserve/enhance the ability of municipal utilities to develop their own demand side efficiency and
conservation programs, alternative gas supplies, and rate structure.
2. Increase the security and reliability of the gas supply and transmission infrastructure. This includes
retaining access to intra- and interstate gas transmission systems to reliably serve customers.
2.3. Support efforts to reduce greenhouse gas emissions and protect the environment.
3. Increase the security and reliability of the gas supply and transmission infrastructure. This includes
retaining access to intra- and interstate gas transmission systems to reliably serve customers.
4. Preserve just and reasonable utility rates/bills.
Legislative Policy Guidelines Venue Goals
1. Local
Authority
2. Reliability of
Infrastructure
23.
Environ
-ment
4. Cost
Control
1. Advocate most of these goals mainly
through the American Public Gas
Association (APGA) with minor support
from Palo Alto staff.
Primarily
Federal with
minor advocacy
at State level
2. Work with Northern California Power
Agency (NCPA) and California Municipal
Utilities Association (CMUA) to the extent
that the City’s goals as a gas distributor
align with generators’ use of natural gas.
Federal and
State
3. Support increased production/incentives
for renewable gas supplies from in or out of
state.
Federal and
State
4. Advocate for financing or funding for cost-
effective natural gas efficiency and solar
water heating end uses.
Federal and
State
5. Support market transparency and efforts to
eliminate market manipulation through
reasonable oversight
Federal
6. Support municipal utilities’ ability to enter
into pre-pay transactions for gas supplies.
Federal
Utilities Legislative Policy Guidelines for 2013
Page 7 of 13
1. Local
Authority
2. Reliability of
Infrastructure
23.
Environ
-ment
4. Cost
Control
7. Support efforts to improve pipeline safety
in light of recent incidents on the PG&E
system and elsewhere. Work with partners
to discourage extension of CPUC regulatory
authority over municipal gas operations.
Oppose legislative proposals resulting in
unreasonable costs for Palo Alto’s
customers.
Federal and
State
8. Support cap-and-trade market designs that:
protect consumers from the exercise of
market power;
allocate allowances that help mitigate
impacts to Palo Alto customers while
providing incentives for natural gas
utilities to move to lower GHG emission
portfolios;
provide flexible compliance mechanisms
such as banking and borrowing of
allowances; and
allocate funds generated from cap-and-
trade markets to GHG related activities,
not as a revenue source for state or
federal general funds.
Federal and
State
9. Advocate for the fair application of Clean
Water Act rules and other existing
environmental rules on the practice of
hydraulic fracturing or “fracking” for natural
gas development.
Federal and
State
y
Utilities Legislative Policy Guidelines for 2013
Page 8 of 13
ELECTRIC
Goals
1. Preserve/enhance the ability of municipal utilities to exercise local accountability and oversight over
matters impacting customer service, programs (such as demand side efficiency and conservation
programs), and rate structure.
2. Preserve/enhance the reliability and security of infrastructure.
3. Support legislation that makes bold progress in cost effectively reducing greenhouse gas emissions
and encourages early voluntary action.
4. Preserve just and reasonable utility rates/bills.
Legislative Policy Guidelines Venue Goals
1. Local
Accountability
2.
Reliability
3. GHG
Reduction
4. Cost
Control
1. Advocate goals through Northern California Power
Agency (NCPA), California Municipal Utilities
Association (CMUA), American Public Power
Association (APPA), Transmission Agency of
Northern California (TANC), and Bay Area
Municipal Transmission Group (BAMx) with
support from Palo Alto staff to speak with a
coordinated voice.
Federal
and
State
2. Support NCPA’s in their continued efforts
legislative initiative to streamline the state
regulatory reporting responsibilities, to eliminate
duplicative data and report submittals to multiple
state regulatory agencies, including the CEC, CARB,
and the California Independent System Operator
(CAISO).
State
3. Advocate for legislation/regulations that provide
local control and support for:
cost-effective clean distributed generation and
cogeneration projects, and standards for
connecting such resources to the local
distribution system;
cost-effective electric efficiency programs;
implementation of renewable portfolio
standards;
cost-effective storage integration;
direct access requirements;
smart meters and smart grid design and
implementation, and
public benefit funds (as allowed in AB1890
(1996)).
Federal
and
State
Utilities Legislative Policy Guidelines for 2013
Page 9 of 13
1. Local
Accountability
2.
Reliability
3. GHG
Reduction
4. Cost
Control
4. Support cap-and-trade market designs that:
protect consumers from the exercise of market
power;
allocate allowances that help mitigate impacts
to Palo Alto customers while providing
incentives for utilities to move to lower GHG
emission portfolios;
provide flexible compliance mechanisms such
as banking & and borrowing of allowances; and
allocate funds generated from cap-and-trade
markets to GHG related activities, not as a
revenue source for state or federal general
funds.
Federal
and
State
5. Support legislation for renewable portfolio
standards that:
promote the 33% goal for the state;
maintain local compliance authority;
allow utilities to pursue low cost alternatives by
utilizing existing transmission system to access
out-of-state resources, including use of
Renewable Energy Certificates (RECs);
prevent double jeopardy in the assessment of
penalties for non-compliance; and
restrict extension of CEC jurisdiction over
Publicly Owned Utilities.
Local
and
State
6. Support/encourage transmission, generation, and
demand-reduction projects and solutions including
advocating for financing or funding
solutions/options for projects that:
enhance/ensure reliability;
ensure equitable cost allocation (including
protection against imposition of state-owned
electric contract costs on municipal utility
customers);
improve procurement flexibility (e.g. resource
adequacy rules that ensure reliability and
provide flexibility in meeting operational
requirements or flexibility in meeting State
renewable portfolio standards);
improve market transparency (particularly
transparency of IOU’s transmission and
procurement planning and implementation
activities); and
lower the environmental impact on the Bay
Area and the Peninsula.
Local,
State,
and
Federal
7. Advocate for Congressional, legislative, or Federal,
Utilities Legislative Policy Guidelines for 2013
Page 10 of 13
1. Local
Accountability
2.
Reliability
3. GHG
Reduction
4. Cost
Control
administrative actions on matters impacting costs
or operations of the Western Area Power
Administration such as:
support of Congressional Field Hearings to
explore modernizing flood control strategies,
river regulation and generation strategies at
Central Valley Project (CVP) plants to enhance
generation, water delivery, flood control and
fisheries;
protection of the status of Western Power
Marketing Administration and cost-based rates;
provisions for preference customers’ first take
at land available with economic potential for
wind farms; and
balancing efforts for competing environmental
improvements in rivers and Delta conditions
with water supply and hydropower impacts;
and.
Achieving the grid modernization goals of
Secretary Chu’s March 16, 2012 memo without
compromising the primary mission of Western
and recognizing the achievements already
made in California without adding duplicate
costly efforts.
State
and
Regional
8. Advocate for Congressional, legislative, or
administrative actions on matters relating to
overly burdensome reporting and compliance
requirements established by the North American
Reliability Corporation (NERC), the Federal Energy
Regulatory Commission (FERC) or the Western
Electricity Coordinating Council (WECC).
Federal,
State
and
Regional
9. Support fair and reasonable assessment of grid
reliability established by NERC, WECC, or FERC and
seek Congressional remedies (if needed) for
punitive application of fees and fines.
Federal
and
Regional
10. Work with California Independent System
Operator (CAISO) or through FERC:
to give buyers of renewable intermittent
resources relief from imbalance penalties; and
to promote financial and operational changes
that result in timely and accurate settlement
and billing.
Federal
and
State
Utilities Legislative Policy Guidelines for 2013
Page 11 of 13
1. Local
Accountability
2.
Reliability
3. GHG
Reduction
4. Cost
Control
11. Monitor cyber security issues to ensure that CPAU,
which currently does not have critical cyber assets,
is not subject to NERC cyber security standards
and support NCPA to protect it and its member
agencies from unnecessary cyber security
regulations.
Federal
and
Regional
Utilities Legislative Policy Guidelines for 2013
Page 12 of 13
WASTEWATER COLLECTIO N
Goals
1. Support ability of municipal utilities to develop and manage their own conservation and efficiency
programs and retain authority over ratemaking, including the imposition of non-volumetric
customer meter or infrastructure charges for wastewater collection service.
12. Increase the reliability of the local wastewater collection systems.
23. Maintain the provision of an environmentally sustainable, reliable high quality wastewater collection
service at a fair price.
3. Support ability of municipal utilities to develop and manage their own conservation and efficiency
programs and retain authority over ratemaking, including the imposition of non-volumetric
customer meter or infrastructure charges for wastewater collection service.
4. Support equal comparisons of wastewater collection systems by regulatory agencies in order to
minimize and reduce onerous, costly and time-intensive reporting requirements and improve value
and accuracy of information reported to the public.
Legislative Policy Guidelines Venue Goals
1. Local
Authority
12. Reliable
infrastructure
23.
Maintain
service
4.Valuable
Reporting
1. Advocate goals through active
participation in the Association of Bay
Area Governments (ABAG).
Local,
Regional
& State
2. Advocate to ensure that legislative
actions regarding the comparison of
wastewater collections systems for future
regulations include the following
requirements:
timely rebuilding of the local
wastewater systems;
maintains the quality of delivered
wastewater collection service;
minimizes any increase in the cost of
wastewater collection service;
creates no additional exposure to
more frequent or severe wastewater
overflows;
supports the existing wastewater
collections systems and their
operation.
Local,
Regional
& State
3. Support provision of sufficient resources
for ABAG to enable it to advocate for:
environmentally sustainable, reliable
wastewater collection service at a fair
Local and
Regional
Utilities Legislative Policy Guidelines for 2013
Page 13 of 13
1. Local
Authority
12. Reliable
infrastructure
23.
Maintain
service
4.Valuable
Reporting
price;
regional comparisons of wastewater
collection projects for future state
grant funding.
4. Support infrastructure security and
reliability including equitable allocation of
funds for increasing the security of
infrastructure.
Regional,
and State
5. Advocate for funding and local
regulations for wastewater collections
system projects and requirements that
reduce overflows and improve collection
system efficiency.
Regional,
State and
Federal