HomeMy WebLinkAbout2002-10-21 City Council (4)City of PMo Alto
C ty Manager’s Report
TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT: UTILITIES
DATE:OCTOBER 21, 2002 CMR:419:02
TITLE:ELECTRIC PUBLIC BENEFITS PROGRAM AND TREE
PLANTING
This is an informational report and no Council action is required.
BACKGROUND
With approval of the 2002-03 budget on June 17th, Council approved a motion
requesting "City staff to explore the possibility of using the Public Benefit funds under
Utilities AB1890 for planting of trees." The City’s Public Benefit Programs are funded by
all electric ratepayers and administered by the Palo Alto Electric Utility. This report
responds to the Council motion and presents the staffs findings.
The governing statute that addresses the purposes for which Utility Public Benefit (PB)
funds can be applied is Assembly Bill 1890, the "Dere~gulation Bill." AB1890 authorizes
and ~equires municipal utilities to spend PB funds on:
o
Demand-side management services to promote energy efficiency and energy
conservation.
New investment in renewable-energy resources and technologies consistent with
existing statutes and regul,ations which promote those resources and technologies.
Research, development and demonstration programs for the public interest to
advance science or technology that is not adequately provided by competitive and
regulated n?arkets.
Services provided for low-income electricity customers including, but not limited
to, targeted energy service and rate discounts.
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AB 1890 does not specifically include or exclude utility tree programs from PB funding.
To help Utilities evaluate PB programs and activities for compliance with AB1890, the
California Municipal Utilities Association has developed a resource guide entitled "’AB
1890 Public Benefits Program Guidebook (1997)." An additional source of guidance for
PB Program validation was a "’Memorandum of Understanding (MOU)" signed in 1998
by such entities as the Natural Resources Defense Council (NRDC), Northern California
Power. Agency, City of Palo Alto Utilities (CPAU), Redding, Roseville, Silicon Valley
Power and Sacramento Municipal Utility District (SMUD). This MOU had participants
agree to a formal ’"Peer Review" of PB programs during 1999, under the review and
approval of the Natural Resources Defense Council (NRDC). The NRDC was a
significant intervenor in the development and passage of AB 1890 and is regarded as an
authority on PB matters. This review of Utility PB Programs was completed during 1999.
The only area of concern in the repgrt with Palo Alto’s PB Program was the potential use
of PB funds to support the development of the fiberoptic network. The report
recommended exclusion of this activity from PB funding which was subsequently
supported by an opinion of the Palo Alto City Attorney’s Office.
DISCUSSION
Staft’s investigation included an overview of California utility tree programs, a legal
review of tree funding applicability under AB 1890, and a review of current utility funded
tree programs in Palo Alto. There are two types of full-scale utility tree planting
programs in California:
1. Shade Tree Programs to reduce heat gain in building/dwelling walls and roofs.
Power Line Tree Replacement Programs to replace large trees under overhead power
lines with trees that grow to a lower height. This activity reduces annual trimming
costs and avoids tree-related outages during storms or snow conditions.
Shade Tree Programs
Trees located adjacent to residences or buildings provide significant benefits" to the
environment and can help reduce energy costs. Walls shaded by trees generally are 15°
cooler than unshaded walls, and direct shade provided by a tree on a roof can make an
attic 20° to 40° cooler on hot, sunny days. In areas of the state with a relatively hot
climate such as in Southern California and in the Central Valley, a number of municipal
utilities have Shade Tree Programs in place. Examples include Riverside, Los Angeles
Department of Water and Power (LADWP), SMUD, and Roseville. While these
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programs unquestionably qualify for funding as an efficiency measure through PB
Programs, Utility Shade Tree Programs have not developed in the Bay Area (with the
exception of Silicon Valley Power), in part due to a relatively milder climate.
Power Line Tree Replacement Programs
To improve system reliability, electric utilities have had tree-trimming programs in place
for many decades. It is a relatively recent approach (within the last 20 years) to remove or
replace particular species of trees that grow tall and interfere with power lines.
While the "AB 1890 Public Benefits Program Guidebook (May, 1997)" does not address
Tree Programs, the Guidebook st~es, that "distribution system upgrades that improve
reliability and efficiency on the utility side of the meter do not fall within the definition of
Demand Side Management." On this basis, PB funding for Power Line Tree
Replacement programs to enhance distribution system reliability is not considered a valid
PB program.
Currently, CPAU, through a City contract with Canopy, a not-for-profit corporation,
provides funding support of approximately $50,000 annually for the "Right Tree in the
Right Place" Program. This program is a model across the state that includes
identificati~on of appropriate tree species to be placed under power lines and benefits
ratepayers due to increased reliability of the electric distribution system. Funds are
included in the electric operations budget for line clearing expenses. In addition, CPAU
reimburses Public Works approximately $925,000 annually for Utility line clearing from
its electric operations budget. In each case, these programs are not part of the Electric
Fund Public Benefit budget.
Heat Island Mitigation
Of some interest to Council was whether the PB program could fund trees planted in
median strips to reduce heat island regional heat gain. Regional heat gain is how asphalt
and concrete causes a heat wave to linger and intensify over a city’s urban landscape
where there aren’t enough trees. While trees help mitigate air pollution and reduce the
urban heat island effect, there is insufficient evidence to conclude that such situated trees
appreciably reduce energy usage in air-conditioned dwellings or buildings in the area.
The consensus among local municipal utilities contacted is that trees Iocated in median
strips, parks, and other open areas do not qualify for PB funding because such trees do
not reduce energy usage. This opinion was reinforced by the Natural Resources Defense
Council (NRDC) conversation with staff on the subject of California Tree Programs. The
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NRDC strongly supports technologies which are effective in the measurable reduction of
heat gain in buildings either through traditional tree shading or through newer
technologies such as reflective coatings (such as the State of California’s "Cool Roofs"
program); however, in the opinion of the NRDC, any use of PB funds for the planting of
non-shade trees in open spaces and median strips is not allowed under AB 1890.
Palo Alto’s Current Electric Public Benefit Program
The current Utilities FY2001-03 Public Benefits Plan was approved by City Council on
December 3, 2001 (CMR:421.:01i. This plan provides for a wide range of resource
efficiency programs targeted to meet the diverse needs and interests of Palo Alto
’residents, businesses, and government entities. The FY2001-03 Electric Public Benefit
Plan continued a number of success.ful, high value programs and introduced several new
programs. Examples of continuing programs include customer rebate programs to
. promote resource efficiency, the Photovoltaic (PV) Partners Program, and community
workshops to educate citizens on resource efficiency solutions and technologies. New
programs include the Eichler Home Rebate Program and the Institutional Rebate
Program.
The Public Benefit Program is a dynamic program that evolves and changes to meet the
changing priorities of the community in conformance with guiding principles approved
by Council. Such changes were significant ’during the recent energy crisis as rebate
programs were substantially ramped up and subsequently returned to normal levels. The
guiding principles for the Demand Side Management and Public Benefits Plan for
FY2001-03 are as follows:
,Design and implement innovative programs and services that provide valuable
benefits to our entire community;
,Aggressively pursue opportunities for the City of Palo Alto to serve as a model of
sustainable practices for the community, through pilot programs as well as
incorporation of sustainability into current City practices and projects;
Create customer programs and services with measurable satisfaction, consumption
and positive environmental results;
Use prudent business management practices to ensure that all program and service
obje, ctives are achievable within the desired time frames and allocated resources;
[] Continue to provide the highest quality programs and services within existing
financial and staffing resource constraints;
[]Develop or participate in pilot programs that advance technology and promote
efficient resources; and
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Design and implement programs consistent with City policies, the Palo Alto
Comprehensive Plan, and State and Federal law.
Summary
After legal review of the legislation for PB programs, review of electric utility tree
programs in California, and discussions with the Natural Resources Defense Council,
staff believes that only "Shade Tree" programs meet the goal of appreciably reducing
energy under AB1890 and conforn~s to the Council approved guiding principles.
Accordingly, staff plans to work with the Public Works Department to develop and
coordinate a Shade Tree Program this fiscal year that is applicable to the replacement of
qualifying City-owned trees, funded by Electric Public Benefit revenue. At this time,
staff does not plan to extend appl~.~ability of the Shade Tree Program to all customer-
Owned (business and residential) trees in Palo Alto due to logistical and budget
uncertaintiesl Staff will report the results of the Shade Tree Program as part of the Public
Benefits Recommended Plan for FY2003-05.
RESOURCE IMPACT
The Electric Fund budget for Public Benefit programs is approximately $2 million
annually. Unspent funds are returned to the Public Benefits Reserve for later use in new
or existing efficiency, low income, renewable or research and demonstration programs.
Staff will continue to monitor shading and heat reflecting technologies in order to
continue to identify and implement the most physically and cost effective projects for
Utilities customers.
POLICY IMPLICATIONS
There are no policy implications as a result of this Report. The introduction of a Shade
Tree Program in Palo Alto is consistent with CPAU Strategic Plan Key Strategy 7:
°’Implement programs that improve the quality of the environment."
PREPARED BY:Tom Auzenne, Mgr. Marketing Services
Randy Baldschun, Assistant Director Utilities
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DEPARTMENT HEAD:
CITY MANAGER APPROVAL:
Ci.ty Manager
Utilities
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