HomeMy WebLinkAboutStaff Report 7506
City of Palo Alto (ID # 7506)
City Council Staff Report
Report Type: Informational Report Meeting Date: 12/12/2016
City of Palo Alto Page 1
Summary Title: Utilities Quarterly Report
Title: City of Palo Alto Utilities Update for the First Quarter of Fiscal Year
2017
From: City Manager
Lead Department: Utilities
This update, on water, gas, electric, wastewater collection and fiber utilities, efficiency
programs, legislative/regulatory issues, utility-related capital improvement programs,
operations reliability impact measures and a utility financial summary, is for the Council and
Utilities Advisory Commission’s (UAC’s) information. This update has been prepared to keep the
UAC and Council apprised of the major issues that are facing the water, gas, electric,
wastewater collection and fiber utilities.
Items of special interest this quarter include:
an accounting of the use of the cap-and-trade allowance revenues for the electric fund
since 2012 (page 6 and Table 1 on page 7)
a discussion of the use of cap-and-trade allowance revenues for the gas fund (page 12)
a chart showing that actual gas prices for fiscal year (FY) 2017 to date have been higher
than expected when the budget was prepared (Figure 10 on page 15)
a notice of the Power Content Label with a link to the location on the City’s website
(page 20)
a discussion of the legislative and regulatory issues expected in the coming year (page
21)
the first quarter of FY 2017 financial summary for each fund is not included in this quarterly
report due to the City’s focus on completion of the FY 2016 Comprehensive Annual Financial
Report. A full financial summary and reserve level status update will be provided in the second
quarter update.
Attachments:
Attachment A: Utilities Fiscal Year 2017 First Quarter Report (PDF)
Utilities
Quarterly
Update
First Quarter of
Fiscal Year 2017
December 2016
ATTACHMENT A
Quarterly Update for First Quarter of FY 2017
December 2016
i
Utilities Quarterly Update
Table of Contents
I. Electricity ................................................................................................................... 3
Electric Supplies ............................................................................................................................................ 3
Cap-and-Trade: Use of Allowance Revenue.................................................................................................. 6
Electric Budget and Portfolio Performance Measures ................................................................................. 8
II. Natural Gas............................................................................................................... 12
Gas Supply Retail Rates ............................................................................................................................... 12
Cap-and-Trade: Use of Allowance Revenue................................................................................................ 12
Gas Budget and Portfolio Performance Measures ..................................................................................... 13
III. Water ....................................................................................................................... 15
Water Availability ........................................................................................................................................ 15
Water Use Compared to Targets ................................................................................................................ 15
Recycled Water Strategic Plan .................................................................................................................... 16
Water Budget Performance Measures ....................................................................................................... 16
IV. Fiber Optics .............................................................................................................. 18
Commercial Dark Fiber Service ................................................................................................................... 18
Citizen Advisory Committee ........................................................................................................................ 18
V. Public Benefit, Demand Side Management Programs and Communications ............... 18
Energy Efficiency Program Achievements .................................................................................................. 18
Local Renewable Energy Programs ............................................................................................................. 19
Communications Activities ......................................................................................................................... 19
VI. Research and Development and Innovation .............................................................. 20
Program for Emerging Technologies ........................................................................................................... 20
VII. Legislative and Regulatory Issues .............................................................................. 21
Summary ..................................................................................................................................................... 21
State Regulatory Proceedings ..................................................................................................................... 22
VIII. Utility Financial Summary ......................................................................................... 22
Residential Bill Comparisons (based on 30-day bills).................................................................................. 22
Non-Residential Bill Comparisons (based on 30-day bills) ......................................................................... 24
Quarterly Update for First Quarter of FY 2017
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List of Figures
Figure 1: Electric Supply Resource Actual and Projection, 2015 to 2017 (as of Oct. 26, 2016) .................... 5
Figure 2: CY 2017 Monthly Electric Supply Resource Projection .................................................................. 5
Figure 3: Northern California Peak Electric Prices (as of October 25, 2016) ................................................ 6
Figure 4: FY 2016 Electric Load and Resource Balance ............................................................................... 10
Figure 5: FY 2016 Electric Market Purchase Costs and Market Prices ........................................................ 11
Figure 6: CPAU’s Gas Commodity Rates—July 2012 through November 2016 .......................................... 12
Figure 7: Cumulative Redwood Pipeline Cost vs. Market Benchmarks ...................................................... 13
Figure 8: Natural Gas Consumption – Budget vs. Actual ............................................................................ 14
Figure 9: Natural Gas Supply Cost – Budget vs. Actual ............................................................................... 14
Figure 10: FY 2016 Natural Gas Prices ($/MMBtu) – Expected vs. Actual .................................................. 15
Figure 11: Water Use Compared to Voluntary Target ................................................................................ 16
Figure 12: Water Consumption – Budget vs. Actual ................................................................................... 17
Figure 13: Water Cost – Budget vs. Actual.................................................................................................. 17
List of Tables
Table 1: Use of Cap-and-Trade Allowance Auction Revenue and Expenditures .......................................... 7
Table 2: FY 2016 Electric Utility Supply Cost Summary ................................................................................ 8
Table 3: FY 2016 Electric Load and Generation Compared to Budget Projections ....................................... 9
Table 4: Status to date of all applications to the Program for Emerging Technologies ............................. 21
Table 5: Residential Electric Bill Comparison ($/month) ............................................................................ 22
Table 6: Residential Natural Gas Bill Comparison ($/month) ..................................................................... 23
Table 7: Residential Water Bill Comparison ($/month) .............................................................................. 23
Table 8: Residential Wastewater Collection (Sewer) Bill Comparison ($/month) ...................................... 23
Table 9: Median Residential Overall Bill Comparison ($/month) ............................................................... 23
Table 10: Non-Residential Electric Bill Comparison ($/month) .................................................................. 24
Table 11: Non-Residential Natural Gas Bill Comparison ($/month) ........................................................... 24
Quarterly Update for First Quarter of FY 2017
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I. Electricity
Electric Supplies
Western Area Power Administration (Western) Issues
Unfortunately the ongoing drought continues to keep projected Western Base Resource
generation levels well below long-term average levels (399 gigawatt-hours, or GWh). For the
first quarter of FY 2017, Western supply delivered 119 GWh (28 GWh below long-term average
levels, but 22 GWh higher than in FY 2016). For the first quarter of FY 2017, Western supplied
only 119 GWh (19% below long-term average levels) and cost $4.1M (6% lower than the FY
2017 Adopted Budget).
At the October 5, 2016 Western Customer Meeting, the Bureau of Reclamation (“Reclamation”)
announced that $4.2 million will be reimbursed to Western Base Resource power customers to
reflect a loss of value in energy resulting for excess releases from the Trinity Reservoir.
Reclamation had released water in excess of what was mandated to support fisheries over the
course of several years creating an adverse impact to power customers in foregone power
opportunities. The $4.2 million reimbursement will be disbursed to power customers in the
form of lower Western Base Resource bills going forward.
In December, 2015, the California Independent System Operator (CAISO) and Western signed
the Market Efficiency Enhancement Agreement (MEEA), which changed the pricing points
applied to Western Base Resource schedules imported into the CAISO. Prior to the MEEA,
Western Base Resources were was priced as if they wereit was imported into the CAISO at the
California-Oregon border, resulting in substantial congestion price risk with an inability to
manage such risk. Since the implementation of the MEEA, savings to Western customers are
estimated to be $1.6 million, with Palo Alto’s share about $200,000. Palo Alto staff along with
staff from the City of Santa Clara and the Northern California Power Agency (NCPA) invested
substantial time assisting with Western’s negotiations with the CAISO.
Western officially started the development of its 2025 Power Marketing Plan. The Plan sets
allocations and terms for marketing energy from Central Valley Project hydroelectric generation
after 2024 when the current Western Base Resource Contract expires. The proposed 2025
Marketing Plan would extend the current Western Base Resource Contract 30 years through
2054 with allocations up to 98% of current allocations. Palo Alto submitted comments on the
plan to include certain termination, allocation reduction and cost containment provisions.
Western will publish the Final 2025 Power Marketing Plan in June 2017. Staff will bring this item
to the UAC and Council for discussion along with a tentative schedule and decision points.
Calaveras Hydroelectric Project Issues
Drought conditions are lessening their impact on Calaveras, as the reservoir has benefited from
average precipitation during the El Niño winter. For the first quarter of FY 2017 Palo Alto’s
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share of this project’s generation was 10.9 GWh (75% below the long-term average level, and
185% higher than in FY 2016).
NCPA staff is monitoring the impacts of the Bay Delta Water Quality Control Plan (WQCP) on
the Calaveras hydroelectric facilities which is on the Stanislaus River and part of the San Joaquin
watershed. The proposed Bay Delta WQCP would require a 40% unimpaired flow criteria1 on
the San Joaquin River, potentially resulting in a shift of water available for discretionary
generation from the Calaveras hydroelectric project and other hydro projects in the same
watershed. While the flow criteria may not alter the amount of water which will flow through
the project the timing of such flows may be impacted, resulting in a potential loss of energy
value.
Electric Load and Resource Balance
The size of the committed and planned market purchases over the last and current calendar
years (CYs) (shown in Figure 1 below) reflects a below average level of hydroelectric output, as
discussed above. For CYs 2015 and 2016 combined, net committed fixed-price forward market
purchases currently account for approximately 543 GWh, which represents 28% of the City’s
total load for the two-year period. For CY 2017, near normal hydro output is projected along
with a surge in solar resources. Long-term renewable resources (landfill gas, wind and solar) are
projected to provide 54% of the City’s total CY 2017 load. Overall electric supply resources are
expected to be surplus to load by about 1% for CY 2017; however, some periods will see
significant surplus positions while other periods will be deficit (see Figure 2 below).
1 Unimpaired flow is defined as “the flow that would occur if all runoff from the watershed remained in the river,
without storage in reservoirs or diversions, such as irrigation, power generation, or water supply.”
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Figure 1: Electric Supply Resource Actual and Projection, 2015 to 2017 (as of Oct. 26, 2016)
Figure 2: CY 2017 Monthly Electric Supply Resource Projection
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Electric Market Price History and Projections
As of October 25, 2016, the price for on-peak energy for November 2016 in Northern California
was $33.66 per megawatt-hour (MWh)2, while the prices for December 2016 and January 2017
were $38.99/MWh and $39.62/MWh, respectively. These values are approximately $3.83/MWh
lower than they were at the time of the last quarterly report.3 On-peak prices for calendar year
strips are in the range of $35 to $37/MWh for 2016 through 2018. These prices are
approximately $1.90/MWh lower than they were at the time of the last quarterly report. Figure
3 below illustrates historical monthly on-peak prices and projected monthly forward prices for
Northern California from 2005 through 2023.
Figure 3: Northern California Peak Electric Prices (as of October 25, 2016)
Cap-and-Trade: Use of Allowance Revenue
As of the end of CY 2015, CPAU received $11.98 million in revenue from auctioning the
emissions allowances allocated to its electric utility. The City Council adopted a resolution on
December 10, 2012 (Staff Report 3342) that identified the following permissible uses for
allowance revenue: 1) the cost of RECs to fulfill carbon neutrality goals, 2) RPS-eligible
2 Note that $30 per megawatt-hour is equal to 3 cents per kilowatt-hour.
3 Market prices for the previous quarterly report were from September 13, 2016.
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renewable energy purchases above State mandated purchases, 3) energy efficiency costs that
are not funded by Public Benefits collections, and 4) rebates to electric ratepayers.
For CY 2012 through 2014, there was a surplus of allowance revenue over expenditures.
Table 1
Table 1 shows the actual expenses and revenues for CY 2012 through CY 2015. For CY 2016,
staff anticipates that all allowance revenue will be spent on Carbon Neutral REC purchases and
renewable energy.
Table 1: Use of Cap-and-Trade Allowance Auction Revenue and Expenditures
CY 2012 CY 2013 CY 2014 CY 2015
Projected Allowance Revenue
Annual Revenue 1,145,326 2,912,695 3,913,232 4,008,407
Prior Year Carryover 0 1,145,326 1,041,501 951,363
Total Allowance Revenue 1,145,326 4,058,021 4,954,733 4,959,771
Funding from Auction Revenues
for Eligible Expenditures
Carbon Neutral REC Purchases 0 0 434,088 361,642
Additional Renewables 0 1,710,388 1,620,838 4,598,129
Additional Energy Efficiency 0 1,306,133 1,948,444 0
Total Expenditures 0 3,016,520 4,003,370 4,959,771
Remaining Funds 1,145,326 1,041,501 951,363 0
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Electric Budget and Portfolio Performance Measures
Electric Supply Cost Summary Compared to Budget Estimates
Table 2Table 2 below shows the City of Palo Alto Utilities’ (CPAU’s) supply cost by cost category
through the first quarter of FY 2017. Supply costs were $2.2 million (9.4%) under budget
primarily due to less than expected market purchases.
Table 2: FY 2016 Electric Utility Supply Cost Summary
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Electric Usage and Generation Summary Compared to Budget Estimates
Table 3Table 3 and Figure 4Figure 4 below summarize the City’s electric supply sources through
the first quarter of FY 2017. Load was 7% lower than budget. Solar generation was below
budget (-20%), but was mostly balanced out by Western hydro generation, which was above
budget (+12%). Some spot market purchases were expected; however, the City ended up selling
power on the spot market instead due to a combination of the above factors. As a result, total
supply was just a little below budget.
Table 3: FY 2016 Electric Load and Generation Compared to Budget Projections
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Figure 4: FY 2016 Electric Load and Resource Balance
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Electric Market Prices and Costs Compared to Budget Estimates
Figure 5 shows monthly market prices and the cost of purchasing energy from the market.
Electric market prices through the first quarter of FY 2017 were lower due to continued lower
natural gas prices that impact the electricity markets. The cost of market purchases through the
first quarter of FY 2017 was equal to what it would have been if all energy had been purchased
in the spot market4. The total cost of market purchases in the first quarter was lower than
budget mainly due to lower than expected load.
Figure 5: FY 2016 Electric Market Purchase Costs and Market Prices
4 Note that some market purchases are made on a forward basis to lock in market prices.
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II. Natural Gas
Gas Supply Retail Rates
Since July 1, 2012, the commodity portion of CPAU’s retail gas rates for all customers varies
every month depending on the market price of natural gas. Figure 6 below shows the actual
commodity rates charged from July 2012 through November 2016. These rates can also be
found on the web site at: http://www.cityofpaloalto.org/civicax/filebank/documents/30399.
Note that gas commodity rates have risen from the low rates in the spring of 2016.
Figure 6: CPAU’s Gas Commodity Rates—July 2012 through November 2016
Cap-and-Trade: Use of Allowance Revenue
Calendar year 2015 was the first year the CPAU Gas utility had a compliance obligation in
CARB’s cap-and-trade program. As of the end of CY 2015, CPAU received $501,000 in revenue
from auctioning the emissions allowances allocated to its gas utility. The City Council adopted a
resolution on January 26, 2015 (Staff Report 5397) that identified the following permissible
uses for allowance revenue: 1) Investment in energy efficiency programs for the City’s natural
gas portfolio and retail customers, 2) purchases or investment in cost effective renewable bio-
gas resources for the City’s gas portfolio, 3) Investment in other carbon reduction activities for
the City’s natural gas utility, including system maintenance or replacement to reduce fugitive
gas emissions; and 4) Rebates to natural gas retail ratepayers provided on a non-volumetric
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basis. All available funds were carried over into CY 2016 and are planned to be expended this
year.
Gas Budget and Portfolio Performance Measures
Value of CPAU’s Share of Redwood Pipeline Capacity
Figure 7Figure 7 below shows the cost of the Redwood gas transmission line compared to the
value at month-ahead spot market prices as well as daily spot market prices. The Redwood
pipeline allows the City to buy gas at the receipt point of Malin, Oregon and transport the gas
to “PG&E Citygate”, which is normally a higher value receipt point. The City’s share of the
Redwood pipeline was a net benefit to the Gas Utility of approximately $76,000 through the
first quarter of FY 2017. This is the difference between the value of Redwood capacity of
$246,000 (the difference of the monthly index prices at the ends of the Redwood pipeline in
Malin, Oregon and PG&E Citygate) and the transportation cost of using the Redwood pipeline
of $170,000.
Figure 7: Cumulative Redwood Pipeline Cost vs. Market Benchmarks
Natural Gas Consumption and Costs: Budget vs. Actual
Figure 8Figure 8 and Figure 9Figure 9 compare actual natural gas use and supply costs with the
FY 2017 budget. Natural gas use through the first quarter of FY 2017 was 2.6% below the
budget forecast, and costs were 3.3% lower than budgeted amounts.
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Figure 8: Natural Gas Consumption – Budget vs. Actual
Figure 9: Natural Gas Supply Cost – Budget vs. Actual
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Figure 10Figure 10 shows actual gas prices at PG&E Citygate (CG) versus gas prices that were
projected at the time the FY 2017 budget was developed. During FY 2017 thus far, gas prices
have been higher than budget.
Figure 10: FY 2016 Natural Gas Prices ($/MMBtu) – Expected vs. Actual
III. Water
Water Availability
Because the rainy season is just beginning, more information regarding water supply will be
available for the next quarterly report.
Water Use Compared to Targets
The City is conserving water at a rate far beyond the San Francisco Public Utilities Commission
(SFPUC) request for 10% voluntary water use reductions. As of October 21, the City’s water use
was 24.3% less than 2013 as shown in Figure 11 below
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Figure 11: Water Use Compared to Voluntary Target
Recycled Water Strategic Plan
On October 11, 2016 the SCVWD approved the proposed cost share distribution for the
Northwest County Recycled Water Strategic Plan (see Staff Report 6700). The cost share
distribution states anticipates a 90% cost share for SCVWD (not to exceed $1.8 million) and a
combined 10% cost share for all the partners of the Regional Water Quality Control Plant.
Water Budget Performance Measures
Figure 12Figure 12 and Figure 13Figure 13 below compare actual water consumption and water
supply cost to the FY 2017 budget projections. Actual water use through the first of FY 2017
was 10% higher than budget estimates. Actual supply costs through the first quarter of FY 2017
were 10% above budget, due to the higher consumption. These increases are likely due to the
loosening of drought restrictions.
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Figure 12: Water Consumption – Budget vs. Actual
Figure 13: Water Cost – Budget vs. Actual
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IV. Fiber Optics
Commercial Dark Fiber Service
The total number of commercial dark fiber customers increased from 107 to 108 in the first
quarter of FY 2017. The total number of active dark fiber service connections serving
commercial customers decreased from 219 to 216 in the first quarter of FY 2017 (some
customers have multiple connections). Commercial customers generate 81% of the dark fiber
license revenues. Through the end of FY 2016, 22 new dark fiber service connections to existing
and new customers were completed, while 30 service connections were disconnected.
Dark fiber Engineering and Operations are installing additional fiber along key routes between
the Stanford Research Park and Downtown due to fiber capacity issues. This effort represents
the beginning of a larger project to overlay fiber along the entire system.
Fiber-to-the-Premises Master Plan and Wireless Network Plan
Staff is currently working on the following tasks for the FTTP and Wireless Plans as directed by
the Council on September 28, 2015:
1. “Dig Once” ordinance: Staff, including the City Attorney’s office and the City’s consultant
CTC Technology & Energy (CTC), is working to evaluate existing dig once models, ordinances
and strategies implemented by other municipalities and counties. Staff anticipates bringing
a recommendation to the Council late this year or in early 2017.
2. In May 2016, a Request for Information (RFI) was issued for a partnership for deployment of
citywide fiber-to-the-premises. Eight responses were received and reviewed by staff and
CTC. CTC recommended conducting additional discussions with three of the respondents.
Meetings were held with these respondents in early October 2016. CTC and staff are
currently evaluating the information collected in these meetings to determine if additional
discussions are warranted with these respondents.
3. Staff is working with CTC to develop RFPs for a Mobile Broadband Network for Public Safety
(e.g. “in-vehicle” broadband access) and a Point-to-Multipoint Network for Secure City
Enterprise Access to improve command and control of critical City infrastructure for Public
Safety and Utilities. The RFPs are expected to be released in mid-November 2016.
Citizen Advisory Committee
Staff continues to meet on a regular basis with the committee regarding fiber and wireless
initiatives. Five new members have been appointed by the City Manager which expands the
committee to eleven members.
V. Public Benefit, Demand Side Management Programs and
Communications
Energy Efficiency Program Achievements
CPAU offers a wide range of customer programs and services to encourage energy and water
efficiency and customer-owned renewable generation. The Annual DSM Report summarizes
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overall savings goals versus achievements, program-level achievements and expenditures, as
well as key initiatives undertaken by CPAU. The Annual DSM Report for FY 2015 was provided
to Council on April 18, 2016 and UAC in May 2016 (Staff Report 6715). The Annual DSM Report
for FY 2016 will be completed in early 2017. Below are highlights from selected programs.
2016 Summer Demand Response Program
The Demand Response pilot program called two Peak Load Reduction events in 2016—on June
3rd and September 26th. These events are called only when the temperature is projected to be
the highest of the year for the purpose of alleviating stress on the electrical grid. The 2016
citywide peak load occurred on September 26th (one of the event days), with an hourly peak
load of 168.9 MW at 5 p.m. On this day, 237 kW of reduction was achieved.
Local Renewable Energy Programs
Net Energy Metering Cap
On August 22, 2016 Council approved the Net Energy Metering (NEM) Successor Program and
revised the NEM cap to 10.8 MW. As of October 12, 2016 Palo Alto has had 7.8 MW of local
solar photovoltaic (PV) capacity installed, representing 73% of the NEM cap. Staff will launch a
NEM Reservation program in November to allow customers who have signed PV purchase or
lease contracts to apply for a reservation for the remaining NEM capacity. Once the remaining
NEM capacity is fully reserved customers will be placed on the NEM Successor program. CPAU
will maintain a NEM Reservation wait list in the event that a project with an approved NEM
Reservation is cancelled.
Communications Activities
Education, Workshops and Community Outreach Activities
The following activities were held since the last quarterly report:
September 17: Residential Solar and EV Workshop for SunShares program
September 18: CPAU tabled at the Midtown Residents Association Ice Cream Social
September 24, CPAU hosted a Landscape Design and Planting Workshop w/ BAWSCA
October 2: CPAU tabled at the Bike ‘n Roll Event in front of City Hall
October 15: CPAU hosted a Pruning, Propagation & Dead Heading Workshop
w/BAWSCA
November 5: CPAU hosted a workshop featuring the Home Efficiency Genie Program
Communications Highlights
This section summarizes communications highlights, updates on major campaigns and
noteworthy events. Copies of all current and past ads and bill inserts are available online at
cityofpaloalto.org/UTLbillinsert
Advocacy for Electrification
At the invitation of California Energy Commissioner Hochschild, on August 30 CPAU staff Shiva
Swaminathan and Christine Tam made a presentation to CEC on Palo Alto electrification
initiatives. The presentation covered four areas under evaluation: customer programs to
incentivize replacement of gas appliances with electric alternatives, building code changes to
Comment [AmyB1]: Is a word missing here, like
‘reserved’, ‘installed’, etc?
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require electric appliances for new construction and renovation projects, changes to the utility
rate structures, and support for electric vehicle adoption. The presentation also discussed the
role of electrification to meet the Governor’s greenhouse gas reduction goal of 80% by 2050,
and how policy makers, utilities, and local governments can coordinate their efforts to support
electrification.
Bay Area SunShares Solar PV & Zero-Emissions Vehicle Program
Staff worked on a promotional campaign this quarter for the Bay Area SunShares program,
which offered discounted rates on solar PV systems and zero-emissions vehicles (ZEVs). The
program was designed to make it simpler and cheaper to go solar or purchase a ZEV by
leveraging the bulk buying power of homeowners and vehicle buyers. Participation was open to
residents and employees of companies located in the nine Bay Area counties and Yolo and
Sacramento counties. Since this was a limited time only program that closed on November 4,
CPAU engaged in a great deal of outreach to increase participation, including workshops, bill
inserts, ads, email blasts, webpages, and social media posts. Information on Palo Alto solar
programs is available at www.cityofpaloalto.org/solar
No Better Time to Go Solar!
Staff developed communication materials to inform customers and other solar stakeholders
that customers can take advantage of the NEM rate, which offers full retail value for their solar
production, before the program closes (when the NEM cap is reached). Messaging centered
around the idea that with the expansion of the NEM cap and availability of the SunShares
program, there was no better time to go solar!
Power Content Label
CPAU produces a Power Content Label each year and typically distributes it to customers via
utility bill inserts, email newsletters, on the website and in social media during the month of
September. This year, CPAU developed two Power Content Labels: one for residential
customers and one for non-residential customers. Two different versions are necessary in order
to accommodate information on the PaloAltoGreen program, as that program is no longer
available for residential customers, but is still available to non-residential customers. View
these at www.cityofpaloalto.org/PowerContentLabel
VI. Research and Development and Innovation
Program for Emerging Technologies
CPAU’s Program for Emerging Technologies, or PET, (www.cityofpaloalto.org/UTLInnovation)
provides the opportunity for local businesses and organizations to submit proposals for
innovative and impactful products to CPAU for review as a prospective partner. The goal is to
find and nurture creative products and services that will manage and better use electricity, gas,
water and fiber optic services. From the program’s inception in June 2012 through the first
quarter of FY 2017, the program received a total of 61 applications. Table 4 below summarizes
the status of all applications through the first quarter of FY 2017.
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Table 4: Status to date of all applications to the Program for Emerging Technologies
Deadline Total Received Under Review Declined/Closed Active Completed
FY 2013 13 0 11 0 2
FY 2014 15 0 11 1 3
FY 2015 15 1 10 2 2
FY 2016 14 5 4 0 5
FY 2017 4 4 0 0 0
TOTAL 61 10 36 3 12
VII. Legislative and Regulatory Issues
While the City operates on the (July through June) Fiscal Year, the State legislature operates on
the Calendar Year and Congress on the Federal Fiscal Year (October to September). In order to
provide accurate information in this report, staff notes below current issues and those items
appearing since the last quarterly report, regardless of each entity’s operating year.
Summary
As noted in the last quarterly report, the State Legislature has ended its 2016 session. Congress
will be in recess for part of November and will return for only a few weeks before ending its
session. While state and federal elected officials are between sessions, CPAU staff has time to
collaborate with stakeholders on continuing issues or those items we anticipate will appear in
2017. These issues are noted below.
Water: lead testing in schools
In 2016, a failed bill would have water suppliers testing lead in private and public schools,
health care centers, and other locations. While that legislation did not move far, there is a
current regulatory move to mandate lead testing in schools. The issue is under consideration
now at the State Water Resources Control Board (Water Board) and CPAU staff is discussing the
issue with other members of the California Municipal Utilities Association (CMUA). CMUA has
expressed its desire for the Water Board to set direction that clearly notes the reasonable roles
of water suppliers and school districts regarding testing and any potential mitigation, as well as
to ensure the number of samples and timelines are appropriate. As this issue moves forward,
CMUA staff will relay these comments to Water Board staff.
Energy: Changing market structure
In 2015, SB 350 created the provision for a fundamental change in California’s energy market by
allowing other states to join the California market. Colloquially called regionalization, CPAU
staff and many other stakeholders have spent more than a year thus far discussing the issue of
combining markets and sharing energy resources. Governor Brown attempted to introduce
legislation formalizing the regional structure, however; too many concerns and questions
remained at the end of the legislative session and a bill was never filed.
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Now, legislative staff has begun holding stakeholder meetings to ensure such a bill is introduced
in 2017. The Northern California Power Agency (NCPA) is an engaged member at these
meetings and keeps CPAU well informed, as does CMUA. Staff will continue to work with these
agencies to ensure any market changes do not adversely affect CPAU’s energy customers.
State Regulatory Proceedings
California Air Resources Board
CARB continues to hold public workshops regarding a proposed regulation to create publicly-
owned utility (POU) compliance penalties supporting enforcement of the Renewable Portfolio
Standard (RPS) Program. It also continues work on cap-and-trade regulations for post 2020
implementation and updates to the climate scoping plan. CARB also released its draft plan to
comply with the federal Clean Power Plan.
California Energy Commission
The CEC continues to work on implementing SB 350 and CPAU, through NCPA, is active in this
process, particularly on the requirements for integrated resource plans (IRPs). The CEC also
continues its efforts on power source disclosure regulations (i.e. the “Power Content Label”),
and has created reporting templates. Like CARB, the CEC is also working on RPS enforcement
and recently promulgated draft pre-rulemaking amendments to current procedures. One such
amendment would potentially harm Palo Alto by impeding its ability to contract for
hydroelectric generation through its agreement with Western. CPAU staff recognized the issue
and worked with NCPA to gain an audience with CEC staff to describe the problem and suggest
different language.
VIII. Utility Financial Summary
Due to City accounting staff working on the FY 2016 Comprehensive Annual Financial Report,
financial reserve estimates and other financial details for the first quarter of FY 2017 are not
available in time for this report. The next Utilities quarterly update (for the second quarter of FY
2017) will contain all relevant financial information, including the estimated levels of financial
reserves.
Residential Bill Comparisons (based on 30-day bills)
Table 5: Residential Electric Bill Comparison ($/month)
As of November 1, 2016
Season Usage (KWh/mo) Palo Alto PG&E Santa Clara Roseville
Winter
(Nov -Apr)
300 33.09 55.06 34.16 53.70
453 (Median) 57.18 69.24 52.21 69.87
650 90.48 145.72 138.43 98.42
1200 183.43 365.63 359.47 184.87
Quarterly Update for First Quarter of FY 2017
December 2016
23
Table 6: Residential Natural Gas Bill Comparison ($/month)
As of November 1, 2016
Season Usage (therms) Palo Alto
Menlo Park, Redwood City,
Mountain View, Los Altos, and
Santa Clara (PG&E Zone X)
Roseville
(PG&E Zone S)
Winter
(Nov-Mar)
18 25.70 27.52 27.52
54 (Median) 56.45 82.56 82.56
80 89.43 134.28 135.32
150 186.92 281.96 283.01
Table 7: Residential Water Bill Comparison ($/month)
As of November 1, 2016
Usage CCF/month Palo Alto
Menlo
Park
Redwood
City
Mountain
View
Los
Altos
Santa
Clara Hayward
4 43.69 44.46 46.47 34.63 33.37 19.80 31.20
(Winter median) 7 67.18 63.03 65.43 53.68 45.20 34.65 52.62
(Annual median) 9 87.24 75.43 78.07 66.38 53.09 44.55 66.90
(Summer median) 14 137.39 107.95 119.47 98.13 73.81 69.30 104.51
25 247.72 180.33 229.94 206.08 119.91 123.75 197.02
Based on the FY 2015 BAWSCA survey, the fraction of SFPUC as the source of potable water supply
was 100% for Palo Alto, 100% for Menlo Park, 100% for Redwood City, 94% for Mountain View, 11%
for Santa Clara and 100% for Hayward.
Table 8: Residential Wastewater Collection (Sewer) Bill Comparison ($/month)
As of November 1, 2016
Palo Alto Menlo Park Redwood City Mountain View Los Altos Santa Clara Hayward
34.83 85.91 75.11 34.30 33.93 41.65 29.80
Table 9: Median Residential Overall Bill Comparison ($/month)
As of Novemberr 1, 2016
Utility and Usage Palo Alto
Menlo
Park
Redwood
City
Mountain
View Los Altos
Santa
Clara Hayward
Electricity (453 kWh/mo) $ 57.18 $ 69.24 $ 69.24 $ 69.24 $ 69.24 $ 52.21 $ 69.24
Gas (54 th/mo) 56.45 82.56 82.56 82.56 82.56 82.56 82.56
Wastewater 34.83 85.91 75.11 34.30 33.93 41.65 29.80
Water (9 CCF/mo) 87.24 75.43 78.07 66.38 53.09 44.55 66.90
TOTAL $235.70 $313.14 $304.98 $252.48 $238.82 $220.97 $248.50
Quarterly Update for First Quarter of FY 2017
December 2016
24
Non-Residential Bill Comparisons (based on 30-day bills)
Table 10: Non-Residential Electric Bill Comparison ($/month)
As of November 1, 2016
Usage (KWh/mo) Palo Alto PG&E Santa Clara Roseville
1,000 114 209 175 140
160,000 18,494 24,364 19,963 19,921
500,000 54,285 67,335 61,122 50,460
2,000,000 171,790 283,628 236,301 190,599
Table 11: Non-Residential Natural Gas Bill Comparison ($/month)
As of November 1, 2016
Usage (therms/mo) Palo Alto PG&E
500 597 683
5,000 5,266 6,054
10,000 10,673 11,071
50,000 51,857 49,323