HomeMy WebLinkAboutStaff Report 3954 City of Palo Alto (ID # 3954)
City Council Informational Report
Report Type: Informational Report Meeting Date: 8/5/2013
August 05, 2013 Page 1 of 1
(ID # 3954)
Title: Utilities Quarterly Update
Subject: City of Palo Alto Utilities Quarterly Update - 3rd Quarter of Fiscal Year
2013
From: City Manager
Lead Department: Utilities
This report is provided for the Council’s information and no action is required.
Executive Summary
This update, on the City of Palo Alto’s water, gas, electric, wastewater collection and fiber
utilities, efficiency and communications programs, legislative and regulatory issues, and a utility
financial summary, is for the Council’s information. This update has been prepared to keep the
Utilities Advisory Commission and Council apprised of the major issues that are facing the
water, gas, electric, wastewater collection and fiber utilities. The UAC received this
informational report at its July 31, 2013 meeting.
Attachments:
Attachment A: Utilities Report for Third Quarter of FY 2013 (PDF)
Utilities Quarterly Update
3rd Quarter of Fiscal Year 2013
i
Utilities Update for Third Quarter of FY 2013
July 2013
Table of Contents
I. Electricity ................................................................................................................................. 1
Electric Supplies ............................................................................................................................................ 1
Electric Market Price History and Projections .............................................................................................. 4
Electric Transmission Alternatives ................................................................................................................ 4
Cap and Trade: Use of Allowance Revenue .................................................................................................. 5
Electric Budget and Portfolio Performance Measures ................................................................................. 5
II. Natural Gas ............................................................................................................................ 10
Gas Supply Portfolio .................................................................................................................................... 10
Gas Market Price History and Projections .................................................................................................. 10
Gas Pool Portfolio Average Cost vs. Market ............................................................................................... 12
Gas Budget and Portfolio Performance Measures ..................................................................................... 12
III. Water ..................................................................................................................................... 16
Water Availability ........................................................................................................................................ 16
San Francisco Public Utilities (SFPUC) Activities ......................................................................................... 16
Bay Area Water Supply and Conservation Agency (BAWSCA) Activities .................................................... 17
Regional Water Usage Trends ..................................................................................................................... 17
Santa Clara Valley Water District (SCVWD) Activities ................................................................................. 17
Water Budget Performance Measures ....................................................................................................... 18
IV. Fiber Optics ............................................................................................................................ 18
Commercial Dark Fiber Service ................................................................................................................... 18
V. Public Benefit, Demand Side Management Programs and Communications ........................... 19
Renewable Energy Programs ...................................................................................................................... 19
Energy and Water Efficiency Programs ....................................................................................................... 20
Communications Update ............................................................................................................................ 22
VI. Research and Development and Innovation ........................................................................... 24
Emerging Technologies Program ................................................................................................................ 24
Smart Grid Pilot Projects ............................................................................................................................. 24
VII. Legislative and Regulatory Issues ........................................................................................... 24
State Legislative Issues ................................................................................................................................ 24
Federal Legislative Issues ............................................................................................................................ 27
State Electric Regulatory Proceedings ........................................................................................................ 29
Gas Regulatory Proceedings ....................................................................................................................... 30
VIII. Utility Financial Summary ...................................................................................................... 30
Electric Utility .............................................................................................................................................. 30
Gas Utility .................................................................................................................................................... 36
Water Utility ................................................................................................................................................ 41
Wastewater Collection Utility ..................................................................................................................... 45
Fiber Optic Utility ........................................................................................................................................ 48
Utility Reserves Summary ........................................................................................................................... 48
ii
List of Figures
Figure 1: Renewable Energy Supplies ............................................................................................................................ 1
Figure 2: Electric Supply Resource Projection, 2013 to 2015 – as of May 31, 2013 ..................................................... 3
Figure 3: Northern California Peak Electric Prices – as of May 31, 2013 ...................................................................... 4
Figure 4: Electric Consumption ..................................................................................................................................... 6
Figure 5: Electric Supply Cost – Adjusted Budget vs. Actual ......................................................................................... 6
Figure 6: FY 2013 (Jul‐Mar) Electric Supply Costs by Category – Budget vs. Actual ..................................................... 7
Figure 7: FY 2013 Electric Load and Resource Balance ................................................................................................. 8
Figure 8: FY 2013 (Jul‐Mar) Electric Supply Resources – Budget vs. Actual .................................................................. 8
Figure 9: FY 2013 Electric Market Prices – Budget vs. Actual ....................................................................................... 9
Figure 10: FY 2013 Electric Forward Market Purchase Cost vs. Spot Market ............................................................... 9
Figure 11: Fixed‐Price Gas Commitments .................................................................................................................... 10
Figure 12: Natural Gas Prices – Historical and Projected ........................................................................................... 11
Figure 13: Projected Drawdown from Gas Supply Reserve in FY 2013 and FY 2014 .................................................. 12
Figure 14: Natural Gas Cost – Actual vs. Market Benchmarks .................................................................................... 13
Figure 15: Redwood Pipeline Cost vs. Market Benchmarks ....................................................................................... 14
Figure 16: Natural Gas Consumption – Budget vs. Actual .......................................................................................... 15
Figure 17: Natural Gas Supply Cost – Budget vs. Actual ............................................................................................. 15
Figure 18: FY 2013 Natural Gas Prices ($/MMBtu) – Expected vs. Actual .................................................................. 16
Figure 19: Water Consumption – Budget vs. Actual ................................................................................................... 18
Figure 20: Water Cost – Budget vs. Actual ................................................................................................................. 18
List of Tables
Table 1: Renewable Energy Contracts and Green Premiums ........................................................................................ 2
Table 2: Planned Use of Cap‐and‐Trade Allowance Auction Revenue for FY 2014 ....................................................... 5
Table 3: Status of WSIP Regional Projects (as of March 31, 2013) ............................................................................. 16
Table 4: WSIP Schedule and Budget Changes.............................................................................................................. 17
Table 5: Electric Retail Sales and Rate ......................................................................................................................... 30
Table 6: Electric Operating Activity ............................................................................................................................. 31
Table 7: Electric Supply Rate Stabilization Reserve ..................................................................................................... 32
Table 8: Electric Distribution Rate Stabilization Reserve ............................................................................................. 33
Table 9: Electric Capital Improvement Project Reserve .............................................................................................. 34
Table 10: Residential Electric Bill Comparison ............................................................................................................. 35
Table 11: Commercial Electric Bill Comparison ........................................................................................................... 35
Table 12: Gas Retail Sales and Rate ............................................................................................................................. 36
Table 13: Gas Operating Activity ................................................................................................................................. 36
Table 14: Gas Supply Rate Stabilization Reserve ......................................................................................................... 37
Table 15: Gas Distribution Rate Stabilization Reserve ................................................................................................. 38
Table 16: Gas Capital Improvement Project Reserve .................................................................................................. 39
Table 17: Residential Natural Gas Bill Comparison ...................................................................................................... 40
Table 18: Commercial Natural Gas Bill Comparison .................................................................................................... 40
Table 19: Water Retail Sales and Rate ......................................................................................................................... 41
Table 20: Water Operating Activity ............................................................................................................................. 41
Table 21: Water Rate Stabilization Reserve................................................................................................................. 42
Table 22: Water Capital Improvement Project Reserve .............................................................................................. 43
Table 23: Residential Water Bill Comparison .............................................................................................................. 44
Table 24: Wastewater Operating Activity .................................................................................................................... 45
Table 25: Wastewater Collection Rate Stabilization Reserve ...................................................................................... 46
Table 26: Wastewater Capital Improvement Project Reserve .................................................................................... 47
Table 27: Residential Wastewater Collection (Sewer) Bill Comparison ...................................................................... 47
Table 28: Fiber Rate Stabilization Reserve .................................................................................................................. 48
Table 29: Utilities Reserves Summary ......................................................................................................................... 49
Utilities Update for Third Quarter of FY 2013
July 2013
1
I. Electricity
Electric Supplies
Western Area Power Administration Issues
For Fiscal Year (FY) 2012, the Western Base Resource supply was 407 Gigawatt‐hours (GWh),
which is about 7% above the long‐term average level. Assuming median precipitation levels
going forward, Western is projected to deliver approximately 344 GWh in FY 2013 (10% below
long‐term average levels, and a 22% decrease from the projection in the Q2 update) and 314
GWh in FY 2014 (18% below long‐term average levels).
Calaveras Hydroelectric Project Issues
Calaveras generation for FY 2012 was 108 GWh, which is 18% below the long‐term average
level. Assuming median precipitation levels going forward, Calaveras generation is projected to
deliver 64 GWh in FY 2013 (51% below long‐term average levels, and a 29% decrease from the
projection in the Q2 update), and 104 GWh in FY 2014 (21% below long‐term average levels).
Renewable Energy Supplies
Since Council approved three new renewable solar projects on June 17, 2013, the history and
projection of the renewable energy supply portfolio is shown in Figure 1 below.
Figure 1: Renewable Energy Supplies
Utilities Update for Third Quarter of FY 2013
July 2013
2
Renewable Energy Contract Summary
Table 1 lists the contracts that the City has executed for renewable energy supplies. The first
five contracts signed were priced very close to brown power prices and, therefore, did not have
large “green premiums”. Three contracts have been terminated, including two landfill‐gas‐to‐
energy (LFGTE) projects and the Western GeoPower geothermal project. These contracts had
relatively high green premiums. The green premium1 for all active contracts is slightly more
than $1 million, which is equivalent to a rate impact of about 1.1 cents/kWh.
Table 1: Renewable Energy Contracts and Green Premiums
Contract
Executed
Start Date
(Actual or
Anticipated)
Annual
Energy
(GWh)
Levelized
Project
Cost
($/MWh)
Adjusted
Brown
Market Cost
($/MWh)
Green
Premium
($1000/yr)
Small Hydro Before 2000 N/A 10.0 N/A N/A 0
High Winds Nov. 2004 Dec. 2004 48.9 57.6 55.0 125
Santa Cruz LFGTE Nov. 2004 Feb. 2006 11.2 62.3 59.3 33
Shiloh Wind Oct. 2005 June 2006 71.4 63.0 69.5 (464)
Ox Mtn. LFGTE Jan. 2005 Apr. 2009 40.7 59.0 67.5 (348)
Keller Canyon LFGTE Aug. 2005 Aug. 2009 11.8 70.8 83.9 (154)
Butte County LFGTE Nov. 2008 CANCELLED 16.5 98.66 78.6 365
Johnson Canyon LFGTE Aug. 2009 Mar. 2013 10.4 123.6 67.3 586
San Joaquin LFGTE May 2010 June 2013 30.3 118.1 75.6 1,286
Crazy Horse LFGTE May 2010 CANCELLED 21.6 107.6 69.3 826
Western Geo geothermal Apr. 2011 CANCELLED 33.1 113.0 79.5 1,107
Brannon Solar Nov. 2012 Aug. 2014 50.7 77.0 60.1 857
Elevation Solar June 2013 Dec. 2016 80 68.8 73.8 (400)
W. Antelope Solar June 2013 Dec. 2016 50 68.8 74.4 (280)
Frontier Solar June 2013 Dec. 2016 52.5 69.0 72.2 (170)
Total w/o cancelled PPAs 467.9 1,071
Electric Load and Resource Balance
The size of the committed and planned market purchases over the next three calendar years
(CYs) (shown in Figure 2 below) reflects a significantly below average level of hydroelectric
output, as discussed above. It also reflects the fact that the contracts for the Crazy Horse LFGTE
project and the Western GeoPower geothermal project have recently been terminated. The
1 The Green Premium is the difference in the levelized cost of the renewable energy cost (adjusted for its time‐of‐
delivery, transmission charges, which are any costs Palo Alto would incur to get the energy delivered to Northern
California, capacity value, which is any system or local capacity value provided by the resource); and “brown power
cost”, which is the wholesale market price quote for non‐renewable energy delivered to Northern California for an
equivalent term and delivery profile.
Utilities Update for Third Quarter of FY 2013
July 2013
3
projections below incorporate the output of the 20 MW Brannon Solar project, which is
expected to begin operating in August 2014.
For CYs 2013 through 2015, committed fixed‐price forward purchases currently account for
approximately 402 GWh, which represents 13% of the City’s total load for that three‐year
period. Planned market purchases represent 20% of the City’s total load for this period. Long‐
term resources (everything but forward and planned market purchases) currently account for
67% of the City’s total load over this three‐year period, which represents a 10% decrease from
the projection in the Q2 update.
Figure 2: Electric Supply Resource Projection, 2013 to 2015 – as of May 31, 2013
‐
200
400
600
800
1,000
1,200
2013 2014 2015
An
n
u
a
l
GW
h
Calendar Year
Planned Market
Purchases
Committed
Market Purchases
Solar
Wind
Landfill Gas
Calaveras
Western
20% Deficit 20% Deficit18% Deficit
Utilities Update for Third Quarter of FY 2013
July 2013
4
Electric Market Price History and Projections
As of May 31, 2013, the price for on‐peak energy for the prompt month (June 2013) in Northern
California was $47 per megawatt‐hour (MWh), while the prices for July and August were
$52/MWh and $56/MWh, respectively. These values are an average of $6/MWh higher than
they were at the time of the last quarterly report.2 On‐peak prices for calendar year strips
range from $48/MWh for 2014 up to $58/MWh for 2018. These longer‐term prices are at
approximately the same level as they were at the time of the last quarterly report. Figure 3
below illustrates historical monthly prices and projected monthly forward prices for Northern
California from 2004 through 2017. The forward prices for 2014 and beyond are for a flat
annual calendar year product.
Figure 3: Northern California Peak Electric Prices – as of May 31, 2013
0
20
40
60
80
100
120
140
160
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Pe
a
k
Ele
c
t
r
i
c
Pri
c
e
s
($/
M
W
h
)
ProjectedHistorical
Electric Transmission Alternatives
Staff continues to communicate with staff at the California Independent System Operator
(CAISO) and PG&E on the status of the SLAC/Palo Alto transmission project. The CAISO is ready
to evaluate the SLAC project against PG&E’s alternative proposal to provide a second
transmission corridor connection to Palo Alto from south of Palo Alto. In the meantime, CPAU
2 Market prices for the previous quarterly report were from February 1, 2013.
Utilities Update for Third Quarter of FY 2013
July 2013
5
will work with PG&E on their interim requirements for a special protection scheme, which
would drop a portion of Palo Alto load under certain transmission contingencies. Currently
CPAU’s consultants are rerunning the cost/benefit analysis, and working on a recommendation
for the preferred routing of the SLAC connection (pending easement/land details from
Stanford).
Cap and Trade: Use of Allowance Revenue
So far, CPAU has received $2.7 million in revenue from auctioning the emissions allowances
allocated to its electric utility, and has budgeted revenues of $4.3 million for FY 2014. The City
Council adopted a resolution on December 10, 2012 (Staff Report 3342) that stated the
following permissible uses for allowance revenue: 1) the cost of RECs to fulfill carbon neutrality
goals, 2) RPS‐eligible renewable energy purchases above our State mandated purchases, 3)
energy efficiency costs that are not funded by Public Benefits collections, and 4) rebates to
electric ratepayers. The spending plan for FY 2014 is shown in Table 2 below. This is based on
forecasted costs and quantities of renewable energy delivered. Actual funding amounts will
vary.
Table 2: Planned Use of Cap‐and‐Trade Allowance Auction Revenue for FY 2014
Spending Category
Total Costs
($000)
Allowance
Revenue Funding
FY 2014
Carbon Neutral REC purchases 521 521
Additional Renewables 3,141 2,346
Additional Energy Efficiency 1,429 1,429
TOTAL 5,091 4,296
For FY 2013, because there were no carbon neutral costs (carbon neutral costs for calendar
year 2013 will be incurred in FY 2014), allowance revenues will be split between renewable
energy purchases and energy efficiency. The final allocation to these two uses will be
determined once the fiscal year is complete and the final costs for these programs are known.
Electric Budget and Portfolio Performance Measures
Figure 4, Figure 5, and Figure 6 below show the City’s electric consumption by month as well as
the supply cost by month and by cost category. Consumption is in line with the revised budget
forecast, which is 7% below the adopted budget forecast. The aggregate supply cost for the
first half of FY 2013 was $47.8 million, approximately $1.0 million less than the adjusted budget
of $48.9 million. The revised budget includes a mid‐year adjustment reducing supply costs by
approximately $6 million. The lower costs for the year so far are due to lower than expected
transmission costs, fewer market purchases than expected due primarily to the fact that Palo
Alto electric load was less than forecasted in the budget, and also due to large one‐time
interconnection costs related to new renewable projects due to commence operation in Q2 of
FY 2013, but which are now not expected to come online until late FY 2013 or mid FY 2014.
Utilities Update for Third Quarter of FY 2013
July 2013
6
Figure 4: Electric Consumption
200
400
600
800
1,000
1,200
Lo
a
d
(
G
W
h
)
Actual
Adjusted Budget
Figure 5: Electric Supply Cost – Adjusted Budget vs. Actual
$0
$10
$20
$30
$40
$50
$60
$70
Co
s
t
(
$
M
)
Actual
Adjusted Budget
Utilities Update for Third Quarter of FY 2013
July 2013
7
Figure 6: FY 2013 (Jul‐Mar) Electric Supply Costs by Category – Budget vs. Actual
9.37 8.96
1.25 1.18 2.27 1.90
5.99 5.85
9.08 8.66
9.07 7.85
13.47
13.26
0.17
0.00
$0
$10
$20
$30
$40
$50
$60
Adjusted Budget Actual
Co
s
t
(
$
M
)
Carbon Neutral
Costs
Net Market + Net
Surplus Energy
Renewables
Calaveras Debt
and O&M
Western
NCPA Services
Local Capacity
Transmission
Utilities Update for Third Quarter of FY 2013
July 2013
8
Figure 7 and Figure 8 below summarize the City’s electric supply sources for FY 2013. Due to a
dry spring, hydroelectric generation has been low compared to the budget. This has not
resulted in substantial increases in market purchases compared to the adopted budget because
load has also been low compared to the adopted budget forecast, as discussed above.
Figure 7: FY 2013 Electric Load and Resource Balance
0
10
20
30
40
50
60
70
80
90
100
GW
h
Spot Market
Purchases
Forward
Market
Purchases
Wind
Landfill
Calaveras
Western
Load
Figure 8: FY 2013 (Jul‐Mar) Electric Supply Resources – Budget vs. Actual
253.0 204.9
65.4
46.2
64.2
52.0
79.7
74.7
109.7 331.5
160.9
22.6
0
100
200
300
400
500
600
700
800
Adopted Budget Actual
GW
h
Uncommitted/
Spot Market
Forward Market
Purchases
Wind
Landfill
Calaveras
Western
Utilities Update for Third Quarter of FY 2013
July 2013
9
Figure 9, below, shows that market electricity prices are fairly close to budget projections.
Figure 9: FY 2013 Electric Market Prices – Budget vs. Actual
$-
$5
$10
$15
$20
$25
$30
$35
$40
$45
Av
e
r
a
g
e
P
r
i
c
e
(
$
/
M
W
h
)
Prices Used for Budget Actual Price (CAISO Load Aggregation Point)
Figure 10 compares the current strategy of making laddered fixed‐price forward purchases to a
strategy of buying all market power in the spot market. As of the end of March 2013 the cost of
energy purchased through the City’s Electric Master Agreements for FY 2013 was roughly
equivalent to what it would have cost to purchase the same energy at spot market prices.
Figure 10: FY 2013 Electric Forward Market Purchase Cost vs. Spot Market
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
Cu
m
u
l
a
t
i
v
e
c
o
s
t
(
$
m
i
l
l
i
o
n
)
Cost of Forward Market Purchases
Cost at Spot Market Prices (CAISO Load Aggregation Point)
Utilities Update for Third Quarter of FY 2013
July 2013
10
II. Natural Gas
Gas Supply Portfolio
Figure 11 shows the completed fixed‐price purchases compared to the load as of June 4, 2013.
While fixed‐price gas purchases have ceased, prior commitments to fixed‐price gas purchase
remain through October 2013. Currently, fixed‐price purchases make up 4% of the expected
load in FY 2014.
Figure 11: Fixed‐Price Gas Commitments
Utilities Update for Third Quarter of FY 2013
July 2013
11
Gas Market Price History and Projections
Gas prices at PG&E Citygate have been hovering in the low $4 per Million British Thermal Units
(MMBtu) range in the past few months and are projected to remain under $5/MMBtu through
2016. The monthly gas price index at PG&E Citygate settled at $4.27/MMBtu for June 2013, up
from $2.81/MMBtu a year ago. Forward gas prices at PG&E Citygate are currently
$4.22/MMBtu for the remaining months of 2013 and $4.44/MMBtu for 2014.
Figure 12 below shows historical monthly bidweek index prices and forward natural gas prices
at PG&E Citygate as of June 4, 2013. Also shown in Figure 12 are high and low ranges for the
projected future prices. The high and low prices are derived using the market’s perception of
future price volatility.
Figure 12: Natural Gas Prices – Historical and Projected
$0
$2
$4
$6
$8
$10
$12
$14
Pr
i
c
e
s
(
$
/
M
M
B
t
u
)
Natural Gas Wholesale Prices at PG&E Citygate
as of June 4, 2013
Actual
Projected
High
Low
* High and low prices in the 75th and 25th
percentile projected using Black Scholes model
Utilities Update for Third Quarter of FY 2013
July 2013
12
Gas Pool Portfolio Average Cost vs. Market
Because of prior fixed‐price purchases, the City’s weighted average cost of gas (WACOG) differs
from the current forward market price. The City’s estimated WACOG for the portfolio is
$4.10/MMBtu for FY 2013, or approximately 9% higher than the actual market cost weighted by
monthly load. Figure 13 shows the drawdown on the Gas Supply Rate Stabilization Reserve
based on the mark‐to‐market (current value minus contract cost) of the fixed‐price gas
purchases in FY 2013 and FY 2014. This under‐collection and reserve drawdown were
anticipated and are reflected in the FY 2013 and FY 2014 budgets.
Figure 13: Projected Drawdown from Gas Supply Reserve in FY 2013 and FY 2014
Utilities Update for Third Quarter of FY 2013
July 2013
13
Gas Budget and Portfolio Performance Measures
The monthly average natural gas purchase cost is compared to different market benchmarks in
Figure 14. The figure compares the actual commodity purchase costs for FY 2013, which
includes some purchases made under the City’s former gas purchasing strategy (the gas
laddering strategy) to the current strategy of purchasing gas indexed to monthly or daily PG&E
Citygate prices. The cumulative actual cost of gas for the fiscal‐year‐to‐date is $1 million (12%)
higher than if the gas were purchased at monthly index prices and $1.8 million (22%) higher
than if CPAU had purchased gas at the daily index prices. The last delivery month for which
forward purchases were made under the former strategy is October 2013, after which the
CPAU cost of gas will closely track the monthly index price.
Figure 14: Natural Gas Cost – Actual vs. Market Benchmarks
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
Cu
m
u
l
a
t
i
v
e
C
o
s
t
Mi
l
l
i
o
n
s
Actual Cost Value at Monthly Bidweek Index Value at Daily Index Price
Value of CPAU’s Share of Redwood Pipeline Capacity
The City’s share of the Redwood pipeline provided a net savings of approximately $46,000 in
the third quarter of FY 2013. This is the difference between the value of Redwood capacity of
$160,000 (the difference of month‐ahead index prices at both ends of the Redwood pipeline in
Malin, Oregon and PG&E Citygate) and the transportation cost of using the Redwood pipeline
Utilities Update for Third Quarter of FY 2013
July 2013
14
of $114,000. Figure 15 below shows the cost of Redwood transmission compared to the value
at month‐ahead spot market prices as well as daily spot market prices.
Figure 15: Redwood Pipeline Cost vs. Market Benchmarks
$-
$100.0
$200.0
$300.0
$400.0
$500.0
$600.0
Mo
n
t
h
l
y
C
o
s
t
Th
o
u
s
a
n
d
s
Actual Cost Value at Monthly Bidweek Index Value at Daily Index Price
Utilities Update for Third Quarter of FY 2013
July 2013
15
Natural Gas Consumption and Costs: Budget vs. Actual
Figure 16 and Figure 17 below demonstrate natural gas use and supply costs in comparison
with the FY 2013 budget. Natural gas use for the year to date is 3% below the budget forecast,
but costs were 12% ($1.6 million) lower than budgeted amounts . The lower costs were
primarily due to gas prices that were lower than in the budget forecast at PG&E Citygate (CG)
(see Figure 18) combined with the fact that a larger percentage of the City’s gas purchases were
made in the month‐ahead or day‐ahead market.
Figure 16: Natural Gas Consumption – Budget vs. Actual
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
Cu
m
u
l
a
t
i
v
e
C
o
s
t
Mil
l
i
o
n
s
Actual Cost
Budget Cost
Figure 17: Natural Gas Supply Cost – Budget vs. Actual
0
5
10
15
20
25
30
35
Cu
m
u
l
a
t
i
v
e
C
o
n
s
u
m
p
t
i
o
n
(
T
h
e
r
m
s
)
Mil
l
i
o
n
s
Actual Consumption
Budget Consumption
Utilities Update for Third Quarter of FY 2013
July 2013
16
Figure 18: FY 2013 Natural Gas Prices ($/MMBtu) – Expected vs. Actual
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$4.50
$5.00
CG
Budget
CG
Actual
III. Water
Water Availability
Precipitation at Hetch Hetchy for 2013 Water Year to date (October 1, 2012 through June 30,
2013) is around 72% of average. Total storage for the system is approximately 130,000 acre‐
feet (AF) lower than at the same time last year. While the runoff is below normal this year, the
reservoirs are expected to fill this year and no calls for conservation are anticipated at this time.
San Francisco Public Utilities (SFPUC) Activities
The SFPUC has made significant progress implementing its Water System Improvement
Program (WSIP). The total cost for the WSIP is expected to be $4.6 billion, of which about $3.5
billion is for projects for the regional water system about $1.1 billion is for projects in the City of
San Francisco that are paid for entirely by San Francisco residents and businesses. The status of
the WSIP’s regional water system projects is shown in Table 3 below.
Table 3: Status of WSIP Regional Projects (as of March 31, 2013)
Project Phase No. of Projects Percent by No.
of Projects
Total Project
Value ($M)
Percent by
Project Value
Planning 1 2% $25 1%
Design 2 4% $147 4%
Bid & Award 1 2% $99 3%
Construction 15 32% $2,703 76%
Close‐Out 6 13% $146 4%
Completed 22 47% $429 12%
Total 47 100% $3,549 100%
Utilities Update for Third Quarter of FY 2013
July 2013
17
As Table 3 indicates, many of the 47 projects are complete, but the bulk of the value of the
remaining regional projects are in the construction phase.
Table 4 indicates the changes over time in the WSIP budget and schedule. Note that that the
program will not be complete until April 2019
Table 4: WSIP Schedule and Budget Changes
Program
Revision
Commission
Approval
Budget
($ millions)
Schedule (Final Program
Completion Date)
2003 (Original) March 2003 $3,628 March 2016
2005 (Baseline) Nov. 2005 $4,343 June 2014
2007 (Revised) Feb. 2008 $4,392 Dec. 2014
2009 (Revised) July 2009 $4,586 Dec. 2015
2011 (Revised) July 2011 $4,586 July 2016
2013 (Latest Approved) April 2013 $4,640 April 2019
Bay Area Water Supply and Conservation Agency (BAWSCA) Activities
The SFPUC submitted a WSIP Notice of Change for the Calaveras Dam Project and the Alameda
Creek Recapture Project. Both projects are facing cost and time delays that may impact the
SFPUC’s Level of Service goal of having no greater than a 20% system‐wide water shortage
during a dry year.
BAWSCA has been working on a Long Term Reliable Water Supply Strategy to provide options
to member agencies for cost effective water supply alternatives to augment their SFPUC supply.
For FY 14, the BAWSCA Board will consider several actions for future implementation, including
adopting more stringent Level of Service goals, a pilot dry year water transfer, water project
partnerships, and new conservation measure implementation.
Regional Water Usage Trends
The latest SFPUC Regional Water Consumption Report details the current level of water usage
relative to the index period (5‐year average for 2008 to 2012). Total system consumption for
the January 1 to May 19 time period is slightly above the index period. Palo Alto’s consumption
for the same period is 4.91% above the index period.
Santa Clara Valley Water District (SCVWD) Activities
The City recently submitted a formal request to the SCVWD to evaluate an extension of the
SCVWD West Pipeline to an interconnection point with the SFPUC/Palo Alto Page Mill Turnout.
The SCVWD is embarking on an Infrastructure Reliability Plan and will be evaluating Level of
Service and other reliability metrics over the next several years. The letter expresses the City’s
desire that an extension of SCVWD’s West Pipeline be included in the evaluation.
Utilities Update for Third Quarter of FY 2013
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Water Budget Performance Measures
Figure 19 and Figure 20 below compare actual water consumption and water supply cost to the
budget projections. Actual water use as of Q3 of FY 2013 was 1% lower than budgeted and
actual supply costs were 2% above the budget.
Figure 19: Water Consumption – Budget vs. Actual
Figure 20: Water Cost – Budget vs. Actual
IV. Fiber Optics
Commercial Dark Fiber Service
The total number of commercial dark fiber customers is 88, for a net increase of 10 customers
since the end of FY 2012. The total number of active dark fiber service connections serving
commercial customers and the City is 216 (some customers have multiple connections).
Seventy‐six percent of dark fiber license revenues are generated by commercial customers.
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From July 1, 2012 through March 31, 2013, 21 new service connections were completed to
existing and new customers and 9 dark fiber service connections were disconnected.
Palo Alto Unified School District (PAUSC) Fiber Project Update
Eighty percent of the substructure work for the PAUSD fiber project has been completed at
seventeen schools and the District’s business office on Churchill Avenue. The bid packet for the
installation of the aerial duct will be issued at the end of May 2013. The installation is expected
to be completed in September 2013. Pulling the fiber cable through the aerial duct and
backbone splicing activities will occur after the installation of the aerial duct and should be
completed in the late fall of 2013.
An important phase of the project is to establish a fiber pathway from the District’s business
office on Churchill Avenue, which serves as their network hub site, to a splice point on the fiber
backbone system located on Alma Avenue to connect the District’s network hub to the Palo
Alto Internet Exchange (PAIX). This fiber route requires crossing the Caltrain tracks at the
intersection of Churchill Avenue and Alma Avenue. A permit application has been filed with
Caltrain for the crossing and the work will commence after the application is approved and
issued to CPAU.
Two Stanford campus fiber access points have been recently reinforced to support more
connections to the Stanford campus and the Stanford Research Park, in addition to the Nixon
and Escondido schools located on Stanford property.
V. Public Benefit, Demand Side Management Programs and
Communications
Renewable Energy Programs
PaloAltoGreen
The voluntary PaloAltoGreen program is currently being redesigned and different opportunities
are being reviewed to evolve the program in a beneficial way for the community.
Solar Water Heating Program
This program has paid rebates for 40 residential and two commercial solar water heating
installations through March 2013, despite gas price conditions that make this measure have an
extremely long payback.
Solar Photovoltaic (PV Partners) Program
The PV Partners Program provided over $8.7 million in rebates to 527 customers for installing
3.7 MW of photovoltaic systems from 1999 through March 2013.
Palo Alto CLEAN Program
No applications have been submitted. Staff continues to market the program to the solar
industry and CPAU customers and building owners.
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Energy and Water Efficiency Programs
Home Energy and Water Reports
The Home Energy Reports are being sent to about 17,700 customers every other month,
through June 2013. This behavior‐based program continues to be our most cost‐effective
residential program. In April, Council approved a new 3‐year contract with Opower, which will
work with a subcontractor, WaterSmart Software, Inc. (“WaterSmart”), to deliver similar
behavior‐based water reporting services to up to 20,000 residential customers. These “Home
Water Reports” will take the form of the WaterSmart platform including website, paper reports
and email communications. A control group will be established to benchmark results of the
program. Opower and WaterSmart services will be separate and distinct until the companies
can integrate the two platforms together. Opower will lead coordination with WaterSmart so
that the timing of communications sent for each program is optimized.
Smart Energy Rebate Program
The City provides rebates to residents who install energy efficient appliances and equipment in
their homes or on their property. Among these are home heating and cooling systems,
insulation, water heaters, clothes washers, pool pumps, power strips, refrigeration and
refrigerator/freezer recycling. A total of 673 applications were processed in this quarter, for a
savings of 111,385 kWh and 4,377 therms.
LED Lighting Program
Each winter holiday season, CPAU offers a LED holiday light exchange. During the 2012‐2013
season, residents responded positively to being able to exchange lights at two local hardware
stores. This fall, CPAU will host an LED light bulb rebate program and promote it in conjunction
with a public art display of a large tree created with LED bulbs, named the “Aurora.”
Green@Home
Through a volunteer‐driven program with Acterra, CPAU offers free in‐home audits,
personalized efficiency tips and direct installation of CFLs, faucet aerators and home energy
monitors (for higher consumption customers). Close to 50 homes were surveyed this quarter.
Low Income Program, Residential Energy Assistance Program (REAP)
Customer involvement remains high in this program. The bulk of residents waiting for energy
efficiency retrofits have received education, weatherization and lighting upgrades. CPAU
replaced a water heater on an emergency basis, installed attic insulation and new HVAC
systems for some very grateful residents. In total, CPAU has served 84 homes and saved 95,000
kWh and 6,500 therms. This year’s remaining budget has been allocated to additional home
upgrades and we are now scoping out multi‐family low income projects for the next fiscal year.
Zero‐Interest Loans
There has been very little interest from residents in this program. Staff is looking into
increasing the term of the loans from 6 months to 12 months, and will be running a short
marketing campaign to increase awareness and interest in the program.
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Water Conservation Programs
The City continues its delivery of water conservation and efficiency programs through a cost‐
sharing agreement with the Santa Clara Valley Water District. This program includes free
indoor and outdoor water audits for customers and rebates for upgrading or replacing water‐
using fixtures such as toilets, clothes washers, commercial food service equipment, irrigation
hardware, turf grass conversions and customized projects for facility process improvements. A
total of 108 customer audits and rebates were completed in this quarter.
New Construction Assistance
The residential new construction rebate program, which provides incentives to make efficiency
improvements beyond what is required in the building codes, has seen a marked increase in
number of applications. Five sizable rebates were awarded in this quarter and a 37‐unit
development project is on the horizon. Another 25 applications are pending until construction
is complete.
Key and Major Accounts
Key Account Representatives continue to work with large customers on efficiency,
conservation, rate and fiber installation issues. Key Account representatives began recruiting
customers to participate in the 2013 Summer Demand Response program.
Small and Medium Commercial Programs
There are currently three energy efficiency programs tailored specifically for small to medium‐
sized commercial customers. These include the Right Lights Plus, Palo Alto Hospitality and Keep
Your Cool programs. These programs cover a wide variety of measures for multiple business
types including: office buildings, restaurants, hotels, nursing facilities, medical and dental
offices, grocery, liquor, and convenience stores. To date, 51 commercial customers have
participated in the various programs.
General Business Programs
Business customers are offered rebates for many types of equipment and facility upgrades,
including: lighting, motion sensors, refrigeration, motors, pumps, boilers, pipe insulation,
commercial food service equipment, vending, LED exit signs, computer power management
software, fume hood and other laboratory equipment, and custom electric and natural gas
saving projects. Large business customers may receive building commissioning assistance
through the third‐party contractor, Enovity, while all business customers can apply for
prescriptive or performance‐based rebates through the Commercial Advantage Program. Five
rebates were awarded this quarter for a total savings of 898,150 kWh.
Education and Outreach Activities
Every quarter, the Utility Marketing Services (UMS) group hosts a variety of free residential
workshops on topics ranging from water‐efficient landscaping to green building and solar PV
technologies. Water efficient landscape workshops are typically coordinated with BAWSCA
and/or the SCVWD. A total of nine workshops and tours or open houses of the Palo Alto Eco
Home were offered in this quarter. UMS staffs multiple tabling events throughout the year at
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community and business fairs to promote residential and commercial programs, pilots, and
services. Additional training and/or outreach efforts are aimed at the business community,
including major and key account customers.
Measurement & Evaluation Results of Energy Efficiency Programs
On an annual basis, CPAU budgets 4 to 5% of its total Energy Efficiency (EE) program budget on
Evaluation, Measurement and Verification (EM&V) activities by an independent consultant as
required by regulations. In addition to meeting legislative requirements (AB2021, 2006), the
goals of the EM&V effort are three‐fold: (1) obtain feedback and recommendations to improve
CPAU’s EE programs; (2) assess the effectiveness of the EE programs and the quality of the
program data; and (3) increase confidence in reported EE program results to meet ongoing
supply and climate goals.
The EM&V effort for energy efficiency programs implemented in FY 2012 has been completed
and final report issued by Navigant Consulting, Inc. on May 29, 2013. The EM&V effort focused
on three commercial programs – the Commercial Advantage Program (CAP), Right Lights+, and
Enovity’s program. The reported energy savings from these three programs make up 82% and
69% of CPAU’s reported electric and gas efficiency savings, respectively. The EM&V results
show that the actual electric savings for the Right Lights+ program are 26% lower than
expected. The key recommendations include using the actual hours of operation to estimate
savings from lighting fixtures (rather than the assumed operating hours used in the statewide
efficiency database for a specific customer type) and working with customers to ensure that the
appropriate data is logged for energy use analysis.
Communications Update
This section does not detail all recent ongoing communications outreach activity and media
coverage but summarizes highlights from major campaigns and noteworthy events.
Carbon‐Neutral Electricity
Commitment to Carbon‐Free Electricity—a press release and rap video issued in March
garnered months of national coverage in both print and broadcast media of this historic
decision. (The video alone has gotten over 4,000 views.) Radio station KLIV broadcast an
hour‐long interview on the subject as part of their Inside Silicon Valley series. Messages
were sent to neighborhood groups, as well as running a series of follow‐up ads in bills, local
press, and online, plus the rap video was aired during Cable TV programs to further educate
the community about this important development. In addition, staff delivered a guest
lecture on the Carbon Neutral Plan to a graduate level Stanford class on Greenhouse Gas
Mitigation.
New Solar Contracts—again, a big media push resulted in national coverage of the City’s
approval of three big contracts for solar power. Broadcast coverage included spots on KCBS
and KQED’s California Report. On July 24th, CPAU Resource Management staff conducted a
national webinar hosted by the Vote Solar Foundation describing the process and benefits
of acquiring these contracts in the context of the City’s overall carbon neutral electric
policy.
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Crossbore Program—Call Before You Clear
As the sewer inspection program has continued to identify and repair any gas‐sewer crossbores
in Palo Alto, it was felt that previous educational outreach had not emphasized sufficiently the
critical safety issue of residents and businesses not calling the City prior to clearing sewer lines.
Therefore, a focused campaign to emphasize the “call before you clear” message was
conducted over the last two months, which included information on and with the utilities bills,
direct mail, ads in local publications, videos and the use of social media.
Great Race to Save Water
In April, staff organized this community run/walk, including involving the Tuolumne River Trust
and dozens of other local agencies, schools etc. The event attracted hundreds of participants
and got substantial media coverage, thereby both garnering some national presence for the
City as well as giving a big boost to the cause of local water conservation. A follow‐up video of
the event was broadcast through the web and social media.
Youth Outreach
With the help of summer interns, CPAU is ramping up its youth outreach efforts, hosting many
events in conjunction with various camps, international student groups, Girl Scouts etc. as well
as participating in local events such as Twilight Concerts and the July 4th Chili Cook‐off.
Rate Changes
A major educational campaign using bill inserts, social media, website info, customer group
emails and advertisements in various venues was designed to both explain this year’s water
rate increase in a clear, engaging way and emphasize that no other commodity rate increases
were needed this year. It was pointed out that electric rates have been the same since 2009
and gas rates actually dropped due to the switch to market‐based pricing.
PG&E Projects
CPAU has continued to handle public communications regarding the numerous projects related
to PG&E’s three big gas transmission lines that run through Palo Alto. This has involved weekly,
and oftentimes daily, notices via group emails and social media as well as press releases and
maintenance of a web page with detailed information.
Recent National Awards & Recognition
American Public Power Association “Gold Level” Reliable Public Provider Award (March)
DOE National Renewable Energy Lab—#1 Renewable Energy Program—PaloAltoGreen
(June)
DOE NREL‐‐#3 Best Ratio of Renewable to Total Electric Sales (June)
Solar Electric Power Association—#7 Solar Systems Installed per Capita (June)
American Public Gas Association—Consumer Marketing and Education Award (July)
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VI. Research and Development and Innovation
Emerging Technologies Program
The CPAU Innovation Test Bed Program (www.cityofpaloalto.org/UTLInnovation) includes the
option for businesses in the area to submit proposals to CPAU for review and potential
assistance. Since its inception in June 2012, the Innovation Test Bed Program has received 13
applications as of end of May 2013. Of these applications: 4 were accepted and are in various
stages of progress; 5 were declined because the proposals did not meet the program
objectives; and 4 applications are still under consideration. A informational report on these
programs was provided to the Council Policy and Services Committee on April 9, 2013 (See
https://www.cityofpaloalto.org/civicax/filebank/documents/33809.)
Smart Grid Pilot Projects
Staff is also working on number of elements of the smart grid pilot projects.
Residential CustomerConnect Pilot Program
Progress is being made on the 300 home CustomerConnect pilot, where advanced meters and a
customer energy portal will be provided to the 300 pilot customers. Customer portals are
expected to be activated in Fall.
Conservation Voltage Regulation
Based on the voltage sensing technology of the advanced electric meters in the 300 homes
participating in the CustomerConnect pilot, staff is also exploring the feasibility of how to
optimally operating the distribution feeders by lowering service voltage to save energy.
VII. Legislative and Regulatory Issues
State Legislative Issues
CPAU staff participates on the legislative committees of the California Municipal Utilities
Association (CMUA) and NCPA. This is year one of California’s two‐year 2013‐2014 legislative
session. May 31 was the final day for the Assembly and Senate floors to pass legislation that
originated in their respective houses. Although bills remaining in their house of origin could
become two‐year bills and be taken up again in 2014, the deadline resulted in a dramatic
reduction in the number of bills still pending in the Legislature for this year. Staff is watching
the following bills because of their potential impact to CPAU.
Energy Related Bills
Community Solar programs:
AB 1014 (Williams)/AB 1295 (Hernandez)/SB 43 (Wolk) – Despite strong opposition from
investor‐owned utilities (IOUs), AB 1014 and SB 43 both passed out of their respective Houses.
The IOU‐sponsored AB 1295 was amended to remove the mandate on publicly‐owned utilities
(POUs) and passed in the Assembly as well. None of the bills currently establish a mandate on
POUs to develop community solar programs whereby energy consumers who may not be able
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to, or want to, install solar PV on their own sites have the opportunity to enjoy the benefits of
solar generation.
Proposition 39 Implementation:
AB 39 (Skinner)/AB 114 (Salas)/SB 39 (de Leon & Steinberg)/SB 64 (Corbett)/SB 267 (Pavley) –
California Proposition 39 (Income Tax Increase for Multistate Businesses) passed in November
2012 and creates the Clean Energy Job Creation Fund. The fund will receive $550 million
annually for five years (FY 2014 – FY 2018). A number of bills were introduced to direct the use
of these funds with many bills focusing on energy efficiency installations/programs for schools.
There remains disagreement between the Governor and the Legislator over implementation of
the funds, with the Governor insisting the funds for energy efficiency be provided to school
districts on a per capita basis. By contrast, AB 39 (Skinner) appropriates 89% of the revenue to
the Department of Education to award grants to school districts, with the remaining 11%
allocated to the Chancellor of the California Community Colleges. Additionally, SB 39 (de Leon)
directs the California Energy Commission (CEC) to award grants to school districts based on
average daily attendance with weighted preference for disadvantaged and underserved
schools. AB 114 focuses on job training on energy efficiency and clean energy projects that
serve low‐income or unemployed residents of economically disadvantaged communities; SB 64
establishes a competitive financial assistance program for energy efficiency and clean energy
onsite generation projects; and SB 267 would establish a financial assistance program to assist
the California Community Colleges, the California State University, and the University of
California with energy efficiency and clean energy onsite generation projects. All five of these
bills passed out of their respective Houses. AB 29, mentioned in the last quarterly report, fell
by the way side.
Renewable Energy and Energy Efficiency Projects:
AB 1131 (Skinner) – This bill revises and extends the Clean Energy Upgrade Program (CEUP)
administered by the California Alternative Energy and Advanced Transportation Financing
Authority, which offers assistance to financial institutions for privately‐issued loans for real
property projects, including energy and water efficiency improvements and renewable
distributed generation. AB 1131, which is supported by CMUA, passed to the Senate.
Natural Gas:
AB 1257 (Bocanegra) – This bill would require the CEC, on or before January 1, 2015, and every
four years thereafter, to prepare and submit to the Governor a report identifying strategies to
maximize the benefits obtained from natural gas as an energy source. AB 1257 has passed to
the Senate.
Water Related Bills
Drinking Water:
AB 145 (Perea) – State Resources Control Board: This bill, which has passed to the Senate,
would transfer the Division of Drinking Water and Environmental Management (Division) of the
California Department of Public Health (CDPH) to the State Water Resources Control Board
(SWRCB). CMUA has taken an opposed unless amended position on AB 145, recommending
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instead a Performance Audit of the Division in order to provide information to improve public
accountability and facilitate decision‐making on the future of the Division. SB 117 (Rubio),
which was listed in the last quarterly report, was amended and is no longer energy or water
related so has been dropped from our watch list.
Hydraulic Fracturing:
AB 7 (Wieckowski)/SB 4 (Pavley) – These bills would require an operator of a well to record
and include all data on hydraulic fracturing treatment, including the risk posed by potential
seismicity, as a part of the history of the drilling of the well. The bills would also require
adoption of a number of rules and regulations specific to hydraulic fracturing, including
governing the construction of wells and well casings and full disclosure of the composition and
disposition of hydraulic fracturing. AB 7 remains in the Assembly so could be brought up again
next year. SB 4 passed to the Assembly, with the author’s commitment to remove moratorium
provisions.
Water Recycling:
AB 803 (Gomez) – Water Recycling Act of 2013: Existing law requires any person who causes or
permits any sewage or other waste, or the effluent of treated sewage or other waste to be
discharged in or on any waters of the state, or where it probably will be discharged in or on any
waters of the state, to immediately notify the local health officer of the director of
environmental health of the discharge. This bill, the Water Recycling Act of 2013, would
provide that this notification requirement does not apply to an unauthorized discharge of
effluent of treated sewage defined as recycled water. The purpose of the bill, according to the
author, is to align existing provisions in law and reduce unnecessary paperwork resulting from
the reporting of incidental run‐off from recycled water projects. AB 803 is supported by CMUA
and has passed to the Senate.
Water Bond:
The four bills mentioned in the last quarterly report (AB 142, SB 36, SB 40, SB 42) have either
been amended or failed to progress and have been dropped from our watch list.
Potential Two‐Year Bills:
AB 122 (Rendon) – Nonresidential Building Energy Retrofit Financing: Held in the Assembly
Appropriations committee. This bill would enact the Nonresidential Building Energy Retrofit
Financing Act of 2012 and would require the CEC to establish the Nonresidential Building
Energy Retrofit Financing Program to provide (through a third‐party administrator) financial
assistance through revenue bonds for owners of eligible buildings to implement energy
efficiency improvements. While this does not create a utility program, possible financing
options will be of interest to our customers.
AB 1258 (Skinner) – This bill would require the CEC to perform a technical analysis of the ability
of existing hydroelectric and pumped storage facilities to provide additional operational
flexibility to integrate intermittent renewables, such as solar and wind. The bill targets the
electrical output of specific facilities, namely units of the State Water Project, for which
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electrical generation is a secondary purpose. The bill was strongly opposed by electric and
water utilities.
Federal Legislative Issues
Tax reform and the deficit reduction remains a focus in Washington, but there is still legislative
debate over cybersecurity, federal hydropower regulatory reform, and fixes to the Commodity
Futures Trading Commission’s (CFTC) swap dealer definition. NCPA continues to try to focus
attention with the Bureau of Reclamation and the Western Area Power Administration to urge
further progress in resolving the issue of Central Valley Project power customers paying a
disproportionately higher assessment of the environmental Restoration Fund than intended in
the Central Valley Project Improvement Act.
Cyber Security
The Bipartisan Policy Center—a Washington think tank that also has an energy project co‐
chaired by former‐Senator Byron Dorgan—has recently formed an initiative on electric grid
cyber security. The effort will be led by former FERC Chairman Curt Hebert, former
Massachusetts regulator Sue Tierney, and former CIA Director General Michael Hayden. The
initiative specifically intends to look at cyber threats targeted at the distribution system and
federal options for preventing and responding to such threats. This promises more challenges
to maintaining local control and the jurisdictional separation between the “bulk electric
system” and local distribution systems. NCPA is monitoring this initiative.
Federal Hydropower Regulatory Reform and Efficiency Measures
In May, the Senate Committee on Energy and Natural Resources moved several bills related to
hydropower development and energy efficiency, demonstrating the Committee’s resolve to
work in a bipartisan fashion and advance small‐scale, single‐issue bills to the Senate floor. The
Committee took up Ranking Republican Lisa Murkowski’s (R‐AK) Hydropower Improvement Act
of 2013, legislation that authorizes FERC to expedite their licensing process for small
development of hydropower projects. Signaling the desire to move the legislation
expeditiously, the Committee substituted the text of its House‐approved companion hydro bill
and passed the measure by unanimous voice vote. The Committee similarly approved the
House‐passed version of legislation to streamline the development of hydropower projects on
Bureau of Reclamation conduits. The Committee also approved legislation providing incentives
for energy efficiency efforts in buildings and manufacturing. The measure, the Energy Savings
and Industrial Competiveness Act of 2013 (S. 761), authored by Senators Bob Portman (R‐OH)
and Jeanne Shaheen (D‐NH), has the support of a broad coalition of public sector, business,
environmental and utility organizations.
However, the Committee’s strategy on advancing single issue bills is now being challenged. The
aforementioned noncontroversial and bipartisan S. 761, is now being threatened by efforts to
advance more controversial issues such as amendments on climate change, the Keystone
Pipeline, and nuclear waste. The Committee and Senate leadership will be exploring whether
these issues can be defused or deferred, but the outcome will determine whether energy
legislation can move forward this year in this political environment.
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CFTC swap dealer definition
All of the members of the NCPA House congressional delegation, including Congresswoman
Eshoo, have cosponsored H.R. 1038—the “Public Power Risk Management Act of 2013.” This
legislation, authored by Rep. Doug LaMalfa (R‐CA), would lift the overly restrictive Commodity
Futures Trading Commission (CFTC) regulations that have driven non‐bank counterparties to
decide to not enter swap transactions with public power systems in order to avoid the onerous
and costly requirements that apply to registered swap dealers. The legislation treats swap
deals with public power systems the same as swap transactions with all other utilities. Absent
this fix, public power systems face fewer options and higher costs for mitigating fuel and power
supply risk.
Power Marketing Administration Recommendations
Just prior to Secretary of Energy Steven Chu’s departure from his cabinet post as head of the
Department of Energy (DOE), the DOE/Western Joint Outreach Team released its final
recommendations implementing Chu’s initiatives seeking to substantially modify and expand
the mission of the federal Power Marketing Administrations (PMAs). The final
recommendations, which resulted from a year‐long review process, ultimately became a
measured and qualified set of studies that largely comport with Western’s statutory authority
and build on existing processes. Of the original fourteen recommendations, only seven are
slated for immediate implementation, but not without first requiring additional study and input
from customers. The others will be delayed due to limited resources, or have been discarded
entirely, such as the “retail” initiatives including energy conservation and electric vehicles.
During the discussions of Chu’s initiatives, Palo Alto and NCPA argued to retain local
responsibility and control, not to expand Western’s statutory authorities, and to ensure that
those who benefit from investments pay for them.
The seven recommendations cited for immediate implementation are: (1) Develop a consistent
methodology for defining "Required Regulation Reserve Capacity"; (2) OASIS consolidation into
a single, accessible site; (3) Take steps to conform with WestConnect's Large Generator
Interconnection Procedures; (4) Evaluate the potential to standardize transmission and ancillary
service rate methodologies; (5) Identify opportunities for increased integration of transmission
systems within each region; (6) Continue to work with regional reliability organizations to
implement intra‐hour scheduling, including the implementation of 15‐minute scheduling, and;
(7) Participate in regional and sub‐regional efforts to identify common problems and solutions
to resolve geographic related issues preventing the efficient use of the existing transmission
infrastructure and to explore challenges and solutions for reliably and cost‐effectively
integrating variable energy resources.
There remain issues slated for study and action that still require scrutiny and customer
engagement. However, in his April confirmation hearing, the new head of the DOE, Dr. Ernest
Moniz, displayed a greater appreciation for the role of federal PMAs. Dr. Moniz acknowledged
“the core responsibility of the PMAs is to deliver power as inexpensively as possible to
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preferential customers.” He went on record to say that he would not support policies that
would increase rates since the PMA customers would not support them.
State Electric Regulatory Proceedings
California Air Resources Board (CARB) and AB 32 Implementation
The second phase of the Cap‐and Trade regulation that will impact the City’s gas utility is
currently underway. Palo Alto, along with other gas utility groups, is participating in discussions
with CARB staff regarding the implementation details of the regulation. Current proposals from
CARB staff would allocate free allowances to the natural gas distribution utilities, but how
carbon costs should be passed onto customers is still being debated. CARB is hosting a series of
cap‐and‐trade workshops in June and July. The first workshop, held June 3, 2013, focused on
how natural gas suppliers will be accounted for in the cap‐and‐trade program beginning in
2015. The second will focus on cost containment, addressing concerns about potential
consumer exposure to rapid increases in carbon allowance prices as the cap‐and‐trade program
moves past 2015. A final workshop, scheduled for July 18th, will review draft modifications to
the cap‐and‐trade regulations the CARB Board will consider later this year.
CARB is also taking steps to update its AB32 Scoping Plan, California’s framework for the state’s
greenhouse gas (GHG) emission reduction program. The initial Scoping Plan was first approved
by CARB in 2008, but the agency is required by AB32 to update the plan every five years to
ensure that California is on track to achieve its goal of reducing GHG emissions to 1990 levels by
2020. A focus of this update will be on the direction of the carbon program beyond 2020, a
topic not previously addressed in any detail.
California Energy Commission Rulemaking on Emission Performance Standards (EPS)
The current CEC proceeding will not address the EPS standard, but there will be a joint
CEC/CPUC proceeding to look into whether the standard should be lowered. No new
developments.
California Energy Commission Renewable Portfolio Standard Enforcement Regulations
On May 22, 2013, the CEC released a second round of revisions to the “Proposed Regulations
for Enforcement Procedures for the Renewables Portfolio Standard for Local Publicly Owned
Electric Utilities”. The proposed regulations set forth the procedures by which the CEC will
enforce the 33% renewable portfolio standard (RPS) mandated by Senate Bill (SB) X1‐2. The
anticipated effective date for these regulations is October 2013. Given CPAU’s accelerated goal
of 33% RPS by 2015 and its adoption of the carbon neutral electric portfolio, many of the details
being debated in the proposed regulations do not impact the City’s electric utility. However,
CPAU remains supportive of comments by NCPA and CMUA that the CEC’s authority to enforce
the RPS standards is set out in SB X1‐2 and the CEC should not exceed that authority.
State Water Resources Control Board (SWRCB) and Delta Reform Act
Delta Flow Criteria refer to new rules requiring flows into the Delta (released from reservoirs)
to be based on high fractions of unimpaired inflow levels in winter and spring months when
reservoirs are normally trying to refill by retaining most inflow water. The currently proposed
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flow criteria, if implemented, would have the effect of shifting the majority of summer water
releases to early Spring, and would thereby reduce the value of Central Valley Project (CVP)
generation, increase the cost of electricity, and undermine ongoing environmental restoration
activities. In May, Governor Jerry Brown announced several appointments to the five‐member
SWRCB. Current board members Tam Doduc and Frances Spivy‐Weber were re‐appointed to
serve another term, and Dorene D’Amamo was picked to fill the vacancy created by the recent
retirement of Chairman Charlie Hoppin. The appointments require Senate confirmation.
Governor Brown also made official his appointment of current SWRCB member Felicia Marcus
as the new chair. Prior to her serving on the SWRCB, Ms. Marcus was western director for the
Natural Resources Defense Council from 2008 to 2012.
The SWRCB is in Phase 2 of a four‐phased process of developing and implementing updates to
the Bay‐Delta Plan, which includes developing new flow objectives for the Sacramento River.
Since the SWRCB’s last workshop in November where they heard from stakeholders, including
NCPA, regarding potential impacts to hydropower generation, they have yet to outline a
process or schedule for moving forward.
Gas Regulatory Proceedings
As a result of PG&E’s Gas Pipeline Safety Enhancement Plan, the local transmission rate charged
to Palo Alto increased from $0.025 per them to about $0.035 per therm. There have been no
new developments in this proceeding.
VIII. Utility Financial Summary
Electric Utility
Retail Sales Volume and System Average Retail Rate
Table 5 below shows the Electric Fund’s retail sales volumes and resulting system average retail
rate for FY 2012 and FY 2013. For the period ending March 31, 2013, sales volumes were 7.5%
lower than budget estimates, and the system average retail rate was 0.3% higher. Demand has
been lower across most of the commercial customer groups, but the main driver of the
decrease is a delay in the schedule of a significant load addition for a large customer.
Projections for the rest of the year assume this trend will continue.
Table 5: Electric Retail Sales and Rate
Electric ‐ Retail FY 2012
Unaudited
Actuals
FY 2013
Adopted
Budget
FY 2013
Unaudited
Actuals
Difference of
Adopted
Budget and
Actuals
%
Variance
to Budget
Jul 11‐Jun 12 Jul 12‐Mar 13 Jul 12‐Mar 13
Sales Units (kWh) 942,561,974 765,096,875 707,428,913 (57,667,962) ‐7.5%
System Average
Retail Rate ($/kWh)
0.11558 0.11612 0.11643 0.00030 0.3%
Utilities Update for Third Quarter of FY 2013
July 2013
31
Operating Activity
Table 6 below contains a summary of the Electric Fund’s overall activity for FY 2013.
Table 6: Electric Operating Activity
Electric ‐ Operating Activity All figures in thousands (000’s)
Adjusted
Budget
FY 2013
Unaudited
Actuals
Jul 12‐Mar 13
Projected
Activity
Apr 13‐Jul 13
Projected
FY 2013
Activity
Variance
to
Budget
Electric Supply Fund
Net Sales * $ 70,800 $ 49,517 $ 16,074 $ 65,591 $ (5,209)
Other revenues 11,925 6,282 2,945 9,227 (2,698)
Purchase cost to serve retail load (63,364)(43,057)(15,995) (59,051) 4,313
Other expenses ** (15,067)(9,726)(5,239) (14,965) 102
Surplus Energy costs (2,828)(1,048)(713) (1,761) 1,067
Surplus Energy revenues 2,289 720 565 1,284 (1,005)
Total $ 3,754 $ 2,688 $ (2,364) $ 324 $ (3,430)
Electric Distribution Fund
Net Sales * $ 47,604 $ 32,681 $ 11,875 $ 44,556 $ (3,048)
Other revenues 2,930 2,244 686 2,930 ‐
Other expenses ** (49,209) (34,995)(14,214) (49,209) ‐
Total $ 1,325 $ (70)$ (1,653) $ (1,723) $ (3,048)
* Includes misc. sales, adjustments, discounts, and bad debt
** Includes debt service, reserve transfers, salaries, allocated charges, other misc. expenses and
encumbrances
As of March 2013, the cost of purchases to serve retail load for FY 2013 was expected to be
$4.3 million lower than the adjusted budget, primarily due to decreased load, but also due to
lower renewables costs related to the delay in the start of three landfill‐gas‐to‐energy
renewable energy projects, lower than projected transmission rates, greater than expected
congestion and loss revenues, lower local capacity costs, and greater than projected hydro
generation. Net sales have been reduced by $5.2 million to reflect lower sales, both to‐date
and for the rest of the fiscal year. Revenues related to carbon allowances are projected to be
lower than budgeted by $919,000, and Central Valley Project Operations and Maintenance (CVP
O&M) repayments are projected to decrease by $1.8 million, which is offset by an equal
decrease in CVP O&M costs that is factored into the purchase costs3. Surplus energy sales are
3 CVP O&M Loan Advance and Loan Credits are planned payments and equal amounts of credits associated with
the financing of operations and maintenance of eleven federal dams, power plants, and transmission facilities as
part of the Western Area Power Administration’s CVP system. The loan advance and loan credits are a financing
mechanism to facilitate the maintenance and upgrades at these federal facilities. The actual cost of these projects
is included in the charges associated with the Western Power.
Utilities Update for Third Quarter of FY 2013
July 2013
32
projected to decrease by $1.1 million. Corresponding surplus energy costs are projected to
increase by $1 million. The net effect of these changes is a projected $324,000 funding of the
Electric Supply Rate Stabilization Reserve (E‐SRSR) rather than the $3.8 million funding of the E‐
SRSR in the adjusted budget.
For the Electric Distribution Fund, the net sales are expected to be $3.05 million below the
budget estimates for FY 2013 due to ongoing lower sales trends, resulting in a corresponding
drawdown in the Electric Distribution Rate Stabilization Reserve (E‐DRSR) as opposed to the
funding of $1.3 million in the adjusted budget.
Electric Supply Rate Stabilization Reserve
As a result of the changes in operating activity, the E‐SRSR is expected to have an ending
balance of $66.3 million, which is above the long‐term maximum E‐SRSR reserve guideline level
as shown in Table 7 below.
Table 7: Electric Supply Rate Stabilization Reserve
Estimated Electric Supply Rate Stabilization Reserve
All figures in thousands (000’s)
FY 2013 Adopted Budget Beginning Balance $ 60,702
Changes to FY 2013 Beginning Balance per FY 2012 Accounting $ 5,227
FY 2013 Beginning Balance after accounting changes $ 65,929
Net sum of FY 2013 Unaudited Actuals to date * $ 2,688
Current Projected Reserve Balance as of End of FY 2013 $ 68,617
Net sum of Projected Activity through Year End $ (2,364)
Estimated FY 2013 Ending Balance $ 66,253
Adopted Budget E‐SRSR Minimum Guideline $ 31,721
Adopted Budget E‐SRSR Maximum Guideline $ 63,442
* Includes Encumbrances for CIP & Operations
Utilities Update for Third Quarter of FY 2013
July 2013
33
Electric Distribution Rate Stabilization Reserve
As a result of the changes described above, the E‐DRSR is expected to have an ending balance
of $7 million, which is within the E‐DRSR long‐term minimum and maximum reserve guideline
levels as shown in Table 8 below.
Table 8: Electric Distribution Rate Stabilization Reserve
Estimated Electric Distribution Rate Stabilization Reserve
All Figures in thousands (000’s)
FY 2013 Adopted Budget Beginning Balance $ 10,995
Changes to FY 2013 Beginning Balance per FY 2012 Accounting $ (2,275)
FY 2013 Beginning Balance after accounting changes $ 8,680
Net sum of FY 2013 Unaudited Actuals to date * $ (70)
Current Projected Reserve Balance as of End of FY 2013 $ 8,610
Net sum of Projected Activity through Year End $ (1,653)
Estimated FY 2013 Ending Balance $ 6,957
Adopted Budget E‐SRSR Minimum Guideline $ 6,747
Adopted Budget E‐SRSR Maximum Guideline $ 13,494
* Includes Encumbrances for CIP & Operations
Electric Special Projects (ESP) Reserve
No new projects have been identified for funding from the ESP Reserve. The largest project
being evaluated is a second transmission line that could have the potential of using all or a
significant amount of the ESP Reserve. The estimated balance of the ESP Reserve is $50.32
million as of the end of FY 2013 (the same as the balance at the end of FY 2012).
Capital Improvement Program (CIP) Reserve
The balance of the electric utility CIP reserve at the end of Q3 FY 2013 was $18.6 million. Table
9 shows the list of active CIP projects and the remaining budget for each project. The table
does not show the active contract amounts for each project, and therefore is not a complete
picture of each project’s activity or inactivity. Staff’s intention is to show active contract
amounts in future versions of this table. Also, the table below does not account for FY 2013
mid‐year adjustments to the CIP budgets or projects that were completed and closed following
March 31, 2013. These adjustments will appear in future reports.
For detailed project descriptions, see the CIP Budget for the year the project was adopted,
which is indicated by the first two digits of the project number (for example, refer to the 2013
CIP Budget for the project description for EL‐13004). For status updates, please refer to the
attachments to the staff report associated with the FY 2013 mid‐year Budget Amendment
Ordinance (Staff Report 3442).
Utilities Update for Third Quarter of FY 2013
July 2013
34
Table 9: Electric Capital Improvement Project Reserve
Project # Project Name
Reappropriated
/ Carried
Forward from
Previous Years
Current Year
Funding
Spending,
Current Year
Remaining in CIP
Reserve Fund
EL‐04010 Foothills System Rebuild 102,802 ‐ (63,157) 39,645
EL‐04012 Utility Site Security 411,980 200,000 (121,059) 490,921
EL‐05000 El Camino Underground Rebuild 147,112 300,000 (14,809) 432,303
EL‐06001 230 kV Electric Intertie 69,695 100,000 (3,905) 165,790
EL‐06002 UG District 45 209,085 ‐ (47,468) 161,617
EL‐08000 E. Charleston 4/12kV 373,164 ‐ (36,626) 336,538
EL‐09000 Middlefield Underground Rebuild 540,824 ‐ (541,775) ‐951
EL‐09002 Middlefield/Colorado 4/12 kV Conversion 40,078 ‐ ‐ 40,078
EL‐09003 Rebuild UG Dist 17 (Downtown)707,515 ‐ (159,569) 547,946
EL‐09004
W. Charleston/Wilkie Way to South City
Limit 4/12 kV Conversion 85,000 550,000 ‐ 635,000
EL‐10006 Rebuild UG Dist 24 973,673 ‐ (11,371) 962,302
EL‐10008 Advanced Metering Infrastructure 251,400 ‐ (12,130) 239,270
EL‐10009 Street Light System Conversion Project 1,688,335 1,200,000 (796,742) 2,091,593
EL‐11001 Torreva Court Rebuild 62,412 ‐ (48,807) 13,605
EL‐11003 Rebuild UG Dist 15 69,461 400,000 (276) 469,185
EL‐11004 Hewlett Subdivision Rebuild Los Trancos 574,540 ‐ (374,695) 199,845
EL‐11006 Rebuild UG Dist 18 302,838 ‐ (61,245) 241,593
EL‐11007 Rebuild Greenhouse Condo Area 377,289 ‐ (27,430) 349,859
EL‐11008 Rebuild UG Dist 19 106,185 ‐ (1,435) 104,750
EL‐11010
UG District 47 ‐ Middlefield, Homer Avenue,
Webster Street and Addison Avenue 1,622,520 200,000 (22,331) 1,800,189
EL‐11014 Smart Grid Technology Installation 486,715 ‐ (100,040) 386,675
EL‐11015
Reconductor 60kV Overhead Transmission
System with ACCR conductor 1,781,708 1,750,000 (1,684,074) 1,847,634
EL‐11016 Electric Vehicle Charging Infrastructure 117,387 ‐ ‐ 117,387
EL‐12000 UG District 12 0 80,000 (48,599) 31,401
EL‐12001 UG District 46 ‐ Charleston/El Camino Real 99,883 9 ‐ 99,892
EL‐12002 Hanover 22 ‐ Transformer Replacement 987,373 200,000 (108,917) 1,078,456
EL‐12003 Hopkins Substation Rebuild 0 250,000 ‐ 250,000
EL‐13004
Hansen Way/Hanover 12kV
Ties 0 75,000 ‐ 75,000
EL‐13005 Colorado 20/21‐Transformers Replacement 0 100,000 ‐ 100,000
EL‐13006 Sand Hill / Quarry 12 kV Tie 0 50,000 ‐ 50,000
EL‐13007
Underground distribution
System Security 0 300,000 ‐ 300,000
EL‐13008 Upgrade Electric Estimating System 0 150,000 ‐ 150,000
EL‐02011 Electric Utility GIS 217,394 ‐ (95,342) 122,052
EL‐02010 SCADA System Upgrade 243,023 50,000 ‐ 293,023
EL‐89028 Electric Customer Connections 599,960 2,100,000 (1,938,744) 761,216
EL‐89031 Communications System 208,112 125,000 ‐ 333,112
EL‐89038 Substation Protection 224,148 260,000 (132,533) 351,615
EL‐89044 Substation Facility 18,459 170,000 (20,862) 167,597
EL‐98003 Electric System Improvements 1,565,797 2,300,000 (1,108,708) 2,757,089
TOTAL 15,265,867 10,910,009 (7,582,649) 18,593,227
Utilities Update for Third Quarter of FY 2013
July 2013
35
Bill Comparison
The last electric rate adjustment was a 10% increase effective July 1, 2009. Table 10 presents
residential monthly bills for Palo Alto and surrounding cities for a several usage levels for the
summer (May through October) billing period based on published rates as of May 1, 2013. As
shown, Palo Alto has the lowest bills for low usage residential customers. For those using the
median amount of electricity, Palo Alto is the lowest for summer bills. For larger users, Santa
Clara customers have the lowest bills with Palo Alto the second lowest. Note that for the
median residential usage, PG&E customers pay 32% more than Palo Alto’s customers in the
summer season.
Table 10: Residential Electric Bill Comparison
Residential Monthly Electric Bill
As of May 1, 2013
Season Usage (KWh/mo) Palo Alto PG&E Santa Clara Roseville
Summer
(May‐Oct)
300 $ 28.57 $ 39.69 $ 30.37 $ 43.99
(Median) 365 $ 37.04 $ 48.92 $ 37.19 $ 51.35
650 $ 76.33 $ 127.31 $ 67.11 $ 90.52
1200 $ 172.03 $ 313.59 $ 124.84 $ 182.32
Table 11 presents monthly electric bills for commercial customers for various usage levels.
Note that Palo Alto commercial customer bills are significantly lower than PG&E’s and
comparable to those in Santa Clara and Roseville.
Table 11: Commercial Electric Bill Comparison
Commercial Monthly Electric Bill
As of May 1, 2013
Usage (KWh/mo) Palo Alto PG&E Santa Clara Roseville
1,000 $ 141 $ 234 $ 156 $ 138
160,000 $ 21,290 $ 28,557 $ 17,756 $ 20,571
500,000 $ 61,395 $ 84,325 $ 54,354 $ 48,718
2,000,000 $ 213,070 $ 290,285 $ 210,131 $ 178,927
Utilities Update for Third Quarter of FY 2013
July 2013
36
Gas Utility
Retail Sales Volume and System Average Retail Rate
Table 12 below shows the Gas Fund’s retail sales volume and system average retail rate for FY
2012 and FY 2013. For FY 2013, as of the end of March 2013, sales have been lower than
budgeted by 2.9%. Note that the system average rate for the gas utility reflects market rates
for the commodity portion for all natural gas customers, which have been lower than budget
estimates.
Table 12: Gas Retail Sales and Rate
Gas – Retail FY 2012
Unaudited
Actuals
FY 2013
Adopted
Budget
FY 2013
Unaudited
Actuals
Difference of
Adopted Budget
and Actuals
%
Variance
to Budget
Jul 11‐Jun 12 Jul 12‐Mar 13 Jul 12‐Mar 13
Sales Units (Therms) 29,983,129 23,459,994 22,790,478 (669,517) ‐2.9%
System Average Rate
($/Therm)
1.389 1.240 1.166 (0.074) ‐6.0%
Operating Activity
Table 13 below contains a summary of the Gas Fund’s overall activity for FY 2013.
Table 13: Gas Operating Activity
Gas ‐ Operating Activity All figures in thousands $ (000’s)
Adjusted
Budget
FY 2013
Unaudited
Actuals
Jul 12‐Mar 13
Projected
Activity
Apr 13‐Jul 13
Projected
FY 2013
Activity
Variance to
Budget
Gas Supply Fund
Net Sales * 15,592 10,325 3,003 13,328 (2,264)
Other revenues 237 131 106 237 ‐
Purchase costs (15,572)(11,037)(2,133)(13,170) 2,402
Other expenses ** (860)(1,920)1,061 (860) ‐
Total (603) (2,502)2,037 (465) 138
Gas Distribution Fund
Net Sales * 21,824 16,125 4,484 20,609 (1,215)
Other revenues 1,531 1,185 346 1,531 ‐
Other expenses ** (25,418) (17,737)(7,681) (25,418) ‐
Total (2,063)(427)(2,851)(3,278) (1,215)
* Includes misc. sales, adjustments, discounts, and bad debt
** Includes reserve transfers, salaries, allocated charges, other misc. expenses and encumbrances
For the Gas Supply Fund, the variance of $2.3 million in net sales is due to the lower than
expected market rates for gas. This is also reflected in lower purchase costs of $2.4 million.
PG&E’s transportation rates to Palo Alto were budgeted to increase this year but as of
Utilities Update for Third Quarter of FY 2013
July 2013
37
November the expected increase in PG&E transportation rates had not materialized. Council
reduced the transportation rates charged to customers effective January 1, 2013. However,
PG&E recently informed the California Public Utilities Commission (CPUC) of its intention to
raise the transportation rate, but no final decision has been made by the CPUC as to what PG&E
will be allowed to collect.
For the Gas Distribution Fund, net sales are slightly below budget estimates due to the reduced
gas usage. This results in a drawdown of $3.3 million from the Gas Distribution Rate
Stabilization Reserve (G‐DRSR) as opposed to the $2.1 million drawdown in the adjusted
budget.
Gas Supply Rate Stabilization Reserve
As shown in Table 14 below, based on activity to date and projections for the fiscal year, the
Gas Supply Rate Stabilization Reserve (G‐SRSR) is expected to have an ending balance of $7.2
million, which is within the long‐term minimum and maximum G‐SRSR guideline levels.
Table 14: Gas Supply Rate Stabilization Reserve
Estimated Gas Supply Rate Stabilization Reserve
All Figures in thousands (000’s)
FY 2013 Adopted Budget Beginning Balance $ 6,630
Changes to FY 2013 Beginning Balance per FY 2012 Accounting $ 988
FY 2013 Beginning Balance after accounting changes $ 7,618
Net sum of FY 2013 Unaudited Actuals to date * $ (2,502)
Current Projected Reserve Balance as of End of FY 2013 $ 5,116
Net sum of Projected Activity through Year End $ 2,037
Estimated FY 2013 Ending Balance $ 7,153
Adopted Budget G‐SRSR Minimum Guideline $ 4,072
Adopted Budget G‐SRSR Maximum Guideline $ 8,144
* Includes Encumbrances for CIP & Operations
Utilities Update for Third Quarter of FY 2013
July 2013
38
Gas Distribution Rate Stabilization Reserve
As shown in Table 15 below, the G‐DRSR is expected to have an ending balance of $5.1 million,
which is between the long‐term minimum and maximum G‐DRSR guideline levels.
Table 15: Gas Distribution Rate Stabilization Reserve
Estimated Gas Distribution Rate Stabilization Reserve
All Figures in thousands (000’s)
FY 2013 Adopted Budget Beginning Balance $ 7,299
Changes to FY 2013 Beginning Balance per FY 2012 Accounting $ 1,075
FY 2013 Beginning Balance after accounting changes $ 8,374
Net sum of FY 2013 Unaudited Actuals to date * $ (427)
Current Projected Reserve Balance as of End of FY 2013 $ 7,947
Net sum of Projected Activity through Year End $ (2,851)
Estimated FY 2013 Ending Balance $ 5,096
Adopted Budget G‐DRSR Minimum Guideline $ 3,339
Adopted Budget G‐DRSR Maximum Guideline $ 6,678
* Includes Encumbrances for CIP & Operations
Capital Improvement Program (CIP) Reserve
The balance of the gas utility CIP reserve at the end of Q3 FY 2013 was $20.9 million. Table 16
shows the list of active CIP projects and the remaining budget for each project. The table does
not show the active contracts in place for each project, and therefore is not a complete picture
of each project’s activity or inactivity. Staff’s intention is to show active contract amounts in
future versions of this table. Also, the table below does not account for FY 2013 mid‐year
adjustments to the CIP budgets or projects that were completed and closed following March
31, 2013. These adjustments will appear in future reports.
For detailed project descriptions, see the CIP Budget for the year the project was adopted,
which is indicated by the first two digits of the project number (for example, refer to the 2013
CIP Budget for the project description for GS‐13002). For status updates, please refer to the
attachments to the staff report associated with the FY 2013 mid‐year Budget Amendment
Ordinance (Staff Report 3442).
Utilities Update for Third Quarter of FY 2013
July 2013
39
Table 16: Gas Capital Improvement Project Reserve
Project # Project Name
Reappropriated
/ Carried
Forward from
Previous Years
Current Year
Funding
Spending,
Current Year
Remaining in CIP
Reserve Fund
GS‐01019 Global Positioning System 82,448 ‐ ‐ 82,448
GS‐02013 Directional Boring Equipment 475,764 45,000 ‐ 520,764
GS‐03007 Directional Boring Equipment 135,252 64,000 ‐ 199,252
GS‐03008
Polyethylene Fusion Equipment
Replacement 43,754 34,000 ‐ 77,754
GS‐03009 System Extensions ‐ Unreimbursed 175,641 172,000 (54,473) 293,168
GS‐07002 Gas Main Replacements ‐ Project 17 577 ‐ (577) 0
GS‐08000 Gas Station 2 Rebuild 99,752 ‐ (44,655) 55,097
GS‐08011 Gas Main Replacements ‐ Project 18 2,198,845 ‐ (1,640,674) 558,171
GS‐09000 Gas Station 1 Rebuild 96,359 ‐ (44,655) 51,704
GS‐09002 Gas Main Replacements ‐ Project 19 5,485,203 ‐ (721,135) 4,764,068
GS‐10000 Gas Station 3 Rebuild 100,461 ‐ (45,771) 54,690
GS‐10001 Gas Main Replacements ‐ Project 20 6,586,508 ‐ ‐ 6,586,508
GS‐11000 Gas Main Replacements ‐ Project 21 447,486 6,150,000 (418,871) 6,178,615
GS‐11001 Gas Station 4 Rebuild 165,264 ‐ (73,838) 91,426
GS‐11002 Gas System Improvements 126,526 206,000 (103,177) 229,349
GS‐12001 Gas Main Replacements ‐ Project 22 468,000 ‐ (94) 467,906
GS‐13002 General Shop Equipment/Tools 0 50,000 ‐ 50,000
GS‐80017 Gas System Extensions 243,085 720,000 (686,448) 276,637
GS‐80019 Gas Meters and Regulators 74,335 315,000 (25,652) 363,683
TOTAL 17,005,260 7,756,000 (3,860,020) 20,901,240
Utilities Update for Third Quarter of FY 2013
July 2013
40
Bill Comparison
Table 17 presents residential monthly bills for Palo Alto and surrounding cities for several usage
levels for the summer (April through October) billing period based on published rates as of May
1, 2013. As Palo Alto’s gas commodity rates now fluctuate monthly with short‐term market
prices, bills have decreased and are comparable to PG&E’s for all usage levels. For the median
usage level, PG&E customer bills are 19% lower than Palo Alto customer’s bills in May, but only
6% for the fiscal year to date (July through May)
Table 17: Residential Natural Gas Bill Comparison
Residential Monthly Natural Gas Bill
As of May 1, 2013
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)
Summer
(Apr‐Oct)
15 $ 17.27 $ 23.04 $ 17.65
(Median) 18 $ 20.81 $ 25.67 $ 22.05
30 $ 38.43 $ 41.35 $ 39.67
45 $ 60.45 $ 62.24 $ 61.68
Table 18 below presents monthly gas bills for commercial customers for various usage levels.
Note that bills for Palo Alto customers are slightly higher than for PG&E customers for smaller
commercial customers, but bills are significantly higher for larger commercial customers due to
higher distribution costs.
Table 18: Commercial Natural Gas Bill Comparison
Commercial Monthly Natural Gas Bill
As of May 1, 2013
Usage (therms/mo) Palo Alto PG&E
500 $ 601 $ 471
5,000 $ 5,338 $ 4,320
10,000 $ 10,602 $ 7,905
50,000 $ 52,616 $ 36,772
Utilities Update for Third Quarter of FY 2013
July 2013
41
Water Utility
Retail Sales Volume and System Average Retail Rates
Table 19 below shows the Water Fund’s retail sales volume and the system average retail rate
for FY 2012 and FY 2013. For the period ending March 31, 2013, sales have been slightly lower
by 1.8% from the adopted budget for the same period.
Table 19: Water Retail Sales and Rate
Water – Retail FY 2012
Unaudited
Actuals
FY 2013
Adopted
Budget
FY 2013
Unaudited
Actuals
Difference of
Adopted
Budget and
Actuals
%
Variance
to Budget
Jul 11‐Jun 12 Jul 12‐Mar 13 Jul 12‐Mar13
Sales Units (CCF) 5,062,873 3,760,550 3,692,511 (68,039) ‐1.8%
System Average Rate ($/CCF) 5.859 7.077 7.123 0.046 0.6%
Operating Activity
Table 20 below contains a summary of the Water Fund’s overall activity for FY 2013. While
water sales and revenues have been lower by 1.2% for the first nine months (amounting to
$313,000), due to the variable nature of sales this is not projected as a net change in expected
sales for the fiscal year as a whole. The same can be said for purchase costs, which have been
lower than expected to date. This is due to both lower losses (purchase quantities minus sales
quantities) and differences in timing between the wholesale SFPUC billing periods and CPAU’s
retail billing periods.
The more significant change to FY 2013 expenses is the reduction and return of CIP project
funds. In mid‐year budget adjustments, staff deferred $2.74 million for current CIP projects
from this year’s budget to FY 2014. In addition, the mid‐year budget adjustment includes $1.85
million in previously budgeted funds being returned as costs were lower than expected. Total
midyear adjustments amounted to $4.6 million.
Table 20: Water Operating Activity
Water ‐ Operating
Activity
All figures in thousands (000’s)
Adjusted
Budget
FY 2013
Unaudited
Actuals
Jul 12‐Mar 13
Projected
Activity
Apr 13‐Jul 13
Projected FY
2013 Activity
Variance
to
Budget
Net Sales to date * $ 35,963 $ 26,449 $ 9,514 $ 35,963 $ ‐
Other revenues to date 2,751 3,244 (493)2,751 ‐
Purchase costs to date (15,940)(10,066)(5,874)(15,940) ‐
Other expenses to date ** (19,849)(19,919)70 (19,849) ‐
Total $ 2,924 $ (292)$ 3,216 $ 2,924 $ ‐
* Includes misc. sales, adjustments, discounts, and bad debt
** Includes reserve transfers, salaries, allocated charges, other misc. expenses, and encumbrances
Utilities Update for Third Quarter of FY 2013
July 2013
42
Water Rate Stabilization Reserve
As shown in Table 21, an addition of $2.9 million to the Water Rate Stabilization Reserve (W‐
RSR) is expected as opposed to the drawdown of $1.7 million that was originally budgeted. This
results in a projected W‐RSR ending balance of $10.9 million. While this is slightly above the
long‐term maximum guideline level for the W‐RSR, water reserves are heavily influenced by
water usage in spring and summer and therefore these estimates are subject to change.
Table 21: Water Rate Stabilization Reserve
Estimated Water Rate Stabilization Reserve
All Figures in thousands (000’s)
FY 2013 Adopted Budget Beginning Balance $ 9,488
Changes to FY 2013 Beginning Balance per FY 2012 Accounting $ (1,492)
FY 2013 Beginning Balance after accounting changes $ 7,996
Net sum of FY 2013 Unaudited Actuals to date * $ (292)
Current Projected Reserve Balance as of End of FY 2013 $ 7,704
Net sum of Projected Activity through Year End $ 3,216
Estimated FY 2013 Ending Balance $ 10,920
Adopted Budget W‐RSR Minimum Guideline $ 5,427
Adopted Budget W‐RSR Maximum Guideline $ 10,854
* Includes Encumbrances for CIP & Operations, bond related debt removed
Capital Improvement Program (CIP) Reserve
The balance of the water utility CIP reserve at the end of Q3 FY 2013 was $15.75 million . Table
22 shows the list of active CIP projects and the remaining budget for each project. The table
does not show the active contracts in place for each project, and therefore is not a complete
picture of each project’s activity or inactivity. Staff’s intention is to show active contract
amounts in future versions of this table. Also, the table below does not account for FY 2013
mid‐year adjustments to the CIP budgets or projects that were completed and closed following
March 31, 2013. These adjustments will appear in future reports. This report does not include
the bond‐funded Emergency Water Supply project.
For detailed project descriptions, see the CIP Budget for the year the project was adopted,
which is indicated by the first two digits of the project number (for example, refer to the 2013
CIP Budget for the project description for WS‐13002). For status updates, please refer to the
attachments to the staff report associated with the FY 2013 mid‐year Budget Amendment
Ordinance (Staff Report 3442).
Utilities Update for Third Quarter of FY 2013
July 2013
43
Table 22: Water Capital Improvement Project Reserve
Project # Project Name
Reappropriated
/ Carried
Forward from
Previous Years
Current Year
Funding
Spending,
Current Year
Remaining in CIP
Reserve Fund
WS‐02014 W‐G‐W Utility GIS Data 243,553 100,000 (185,201) 158,352
WS‐07000
Water Regulation Station
Improvements 341,036 ‐ (11,421) 329,615
WS‐07001 Water Recycling Facities 605,245 ‐ (9,782) 595,463
WS‐08001 Water Reservoir Coating 1,835,637 500,000 (21,837) 2,313,800
WS‐80015 Water Meters 215,445 222,000 (3,833) 433,612
WS‐08017
Water Main Replacement ‐
Project 22 141,637 ‐ ‐ 141,637
WS‐09000 Seismic Water System 3,474,400 600,000 (2,658) 4,071,742
WS‐09001
Water Main Replacement ‐
Project 23 1,993,583 ‐ (1,837,470) 156,113
WS‐10001
Water Main Replacement‐
Project 24 3,052,947 ‐ (901,404) 2,151,543
WS‐11000
Water Main Replacement‐
Project 25 284,906 3,152,000 (3,984) 3,432,922
WS‐11001
Vacuum Excavation
Equipment 275,000 ‐ ‐ 275,000
WS‐11003
Water Distribution System
Improvements 212,336 212,000 (29,289) 395,047
WS‐11004
Water Supply System
Improvements 232,898 212,000 (48,487) 396,411
WS‐12001
Water Main Replacement‐
Project 26 305,000 ‐ ‐ 305,000
WS‐13002 Equipment Tools 0 50,000 ‐ 50,000
WS‐13003 GPS Equipment Upgrade 0 200,000 ‐ 200,000
WS‐13004
Asset Management Mobile
Deployment 0 100,000 ‐ 100,000
WS‐13006
Water Meter Shop
Renovations 0 115,000 (27,852) 87,148
WS‐80013 Water System Extensions 61,762 430,000 (426,365) 65,397
WS‐80014
Service and Hydrant
Replacements 148,286 222,000 (272,549) 97,737
TOTAL (CIP RESERVE)15,756,539
WS‐08002
Emergency Water Suppy
Project 17,643,474 ‐ (8,581,545) 9,061,929
BOND FUNDED (NOT INCLUDED IN CIP RESERVE) 9,061,929
Utilities Update for Third Quarter of FY 2013
July 2013
44
Bill Comparison
Palo Alto’s overall water rates increased on July 1, 2012 by 15%. Table 23 presents monthly
residential bills for Palo Alto and surrounding cities for various usage levels based on published
rates as of May 1, 2013. All agencies presented have rate increases proposed for the upcoming
fiscal year.
Table 23: Residential Water Bill Comparison
Residential Monthly Water Bill ($/month)
As of May 1, 2013
Usage CCF/mo Palo Alto
Menlo
Park
Redwood
City
Mountain
View
Los
Altos
Santa
Clara Hayward
4 31.90 35.89 33.72 18.14 25.78 12.68 22.20
(Winter median) 7 48.04 52.72 44.09 31.40 35.48 22.19 37.35
(Annual median) 9 62.16 63.94 51.53 40.24 41.95 28.53 47.45
(Summer median) 14 97.46 93.21 73.67 62.34 58.93 44.38 74.50
25 175.12 158.29 140.55 110.96 96.74 79.25 143.25
Based on the FY 2011 BAWSCA survey, the fraction of SFPUC as source of potable water supply was
100% for Palo Alto, 90% for Menlo Park, 100% for Redwood City, 86% for Mountain View, 12% for Santa
Clara and 100% for Hayward.
Utilities Update for Third Quarter of FY 2013
July 2013
45
Wastewater Collection Utility
Operating Activity
Table 24 contains a summary of the Wastewater Collection Fund’s overall activity for FY 2013.
Sales are very stable for the Wastewater Collection fund as 53% is from residential customers,
whose rate consists of fixed monthly service charges. A component of business sales revenues
is based on winter water use levels which are rather stable as well. At this time there are no
significant projected changes to budgeted revenue projections.
Staff proposed mid‐year budget changes, the largest related to CIP expenditures with $540,000
being returned to operating reserves ($310,000 related to a main replacement budgeted for
this fiscal year but moved to FY 2014, and $230,000 in funds from prior projects which have
been completed.) The total of all budget adjustments was $518,000.
Table 24: Wastewater Operating Activity
Wastewater Collection
‐ Operating Activity
All figures in thousands (000’s)
Adjusted
Budget
FY 2013
Unaudited
Actuals
Jul 12‐Mar 13
Projected
Activity
Apr 13‐Jul 13
Projected
FY 2013
Activity
Variance
to
Budget
Net Sales to date * $ 14,980 $ 11,238 $ 3,742 $ 14,980 $ ‐
Other revenues to date 1,519 1,839 (320)1.519 ‐
Treatment costs to date (8,556)(6,417)(2,139)(8,556) ‐
Other expenses to date ** (9,104)(6,315)(2,789)(9,104) ‐
Total $ (1,162)$ 345 $ (1,507)$ (1,162) $ ‐
* Includes misc. sales, adjustments, discounts, and bad debt
** Includes reserve transfers, salaries, allocated charges, other misc. expenses, and
encumbrances
Utilities Update for Third Quarter of FY 2013
July 2013
46
Wastewater Collection Rate Stabilization Reserve
As shown in Table 18, the reserve drawdown is projected to be $1.16 million in the adjusted
budget, resulting in a Wastewater Collection Rate Stabilization Reserve (WC‐RSR) ending
balance of $3.6 million. This is within the long‐term minimum and maximum reserve guideline
levels.
Table 25: Wastewater Collection Rate Stabilization Reserve
Estimated Wastewater Collection Rate Stabilization Reserve
All Figures in thousands (000’s)
FY 2013 Adopted Budget Beginning Balance $ 6,579
Changes to FY 2013 Beginning Balance per FY 2012 Accounting $ (1,828)
FY 2013 Beginning Balance after accounting changes $ 4,751
Net sum of FY 2013 Unaudited Actuals to date * $ 345
Current Projected Reserve Balance as of End of FY 2013 $ 5,096
Net sum of Projected Activity through Year End $ (1,507)
Estimated FY 2013 Ending Balance $ 3,589
Adopted Budget WC‐RSR Minimum Guideline $ 2,253
Adopted Budget WC‐RSR Maximum Guideline $ 4,506
* Includes Encumbrances for CIP & Operations, bond related debt removed
Capital Improvement Program (CIP) Reserve
The balance of the wastewater utility CIP reserve at the end of Q3 FY 2013 was $13.4 million.
Table 26 shows the list of active CIP projects and the remaining budget for each project. The
table does not show the active contracts in place for each project, and therefore is not a
complete picture of each project’s activity or inactivity. Staff’s intention is to show active
contract amounts in future versions of this table. Also, the table below does not account for FY
2013 mid‐year adjustments to the CIP budgets or projects that were completed and closed
following March 31, 2013. These adjustments will appear in future reports.
For detailed project descriptions, see the CIP Budget for the year the project was adopted,
which is indicated by the first two digits of the project number (for example, refer to the 2013
CIP Budget for the project description for WC‐13002). For status updates, please refer to the
attachments to the staff report associated with the FY 2013 mid‐year Budget Amendment
Ordinance (Staff Report 3442).
Utilities Update for Third Quarter of FY 2013
July 2013
47
Table 26: Wastewater Capital Improvement Project Reserve
Project # Project Name
Reappropriated
/ Carried
Forward from
Previous Years
Current Year
Funding
Spending,
Current Year
Remaining in CIP
Reserve Fund
WC‐07004
Sewer System Rehabilitation /
Augementation ‐ Project 20 470,838 ‐ (158,784) 312,054
WC‐08012
Sewer System Rehabilitation /
Augementation ‐ Project 21 454,108 ‐ (216,348) 237,760
WC‐09001
Sewer System Rehabilitation /
Augementation ‐ Project 22 2,401,304 ‐ (454,408) 1,946,896
WC‐10002
Sewer System Rehabilitation /
Augementation ‐ Project 23 3,029,301 ‐ (572,005) 2,457,296
WC‐11000
Sewer System Rehabilitation /
Augementation ‐ Project 24 3,119,500 ‐ (152,782) 2,966,718
WC‐12001
Sewer System Rehabilitation /
Augementation ‐ Project 25 300,000 2,912,000 ‐ 3,212,000
WC‐13001
Sewer System Rehabilitation /
Augementation ‐ Project 26 0 310,000 ‐ 310,000
WC‐13002
Fusion and General Equipment
/ Tools 0 50,000 ‐ 50,000
WC‐15002
Wastewater System
Improvements 55,870 212,000 (20,291) 247,579
WC‐80020 Sewer System Extensions 134,286 350,000 (297,594) 186,692
WC‐99013 Sewer Manhole Rehabilitation 1,281,245 570,000 (367,077) 1,484,168
TOTAL 11,246,452 4,404,000 (2,239,289) 13,411,163
Bill Comparison
Palo Alto’s wastewater collection rates changed on July 1, 2012. The rate change resulted in a
5% increase in overall revenues. Table 27 presents typical monthly residential bills for Palo Alto
and surrounding cities based on published rates as of May 1, 2013. The bill for a Palo Alto
customer is currently just 76% of the average of the bills for the six comparator cities. Staff did
not propose a rate change for July 1, 2013, however five of the agencies have proposed or
already approved rate increases for the upcoming fiscal year.
Table 27: Residential Wastewater Collection (Sewer) Bill Comparison
Residential Monthly Wastewater Collection Bill
As of February 1, 2013
Palo Alto Menlo Park Redwood City Mountain View Los Altos Santa Clara Hayward
29.31 62.67 57.88 24.25 29.25 29.20 27.27
Utilities Update for Third Quarter of FY 2013
July 2013
48
Fiber Optic Utility
Operating Activity
Table contains a summary of the Fiber Fund’s overall activity for FY 2013.
Table 24: Fiber Operating Activity
Fiber – Operating
Activity
All figures in thousands $ (000’s)
Adjusted
Budget
FY 2013
Unaudited
Actuals
July 12‐Mar 13
Projected
Activity
Apr 13‐June 13
Projected
FY 2013
Activity
Variance
to
Budget
Net Sales to date * 3,574 3,424 1,000 4,424 850
Other revenues to date** 303 265 219 484 181
Other expenses to date*** (1,789)(1,036)(753)(1,789) 0
Total 2,088 2,653 466 3,119 1,031
* Includes misc. sales, adjustments, discounts, bad debt.
** A recent bankruptcy settlement in the amount $181,000 is included in the projected activity
for other revenues.
*** Includes reserve transfers, salaries, allocated charges, other misc. expenses, and
encumbrances.
Fiber Rate Stabilization Reserve
Actual and projected sales and expenses for dark fiber service connections indicate a positive
variance of approximately $1.0 million, as compared to FY 2013 budget projections. The Fiber
Optics Fund has encumbered $446,000 and $259,000 from prior year budgets for customer
connections and network system improvements, respectively. As shown in Table 28, the Fiber
Optics Rate Stabilization Reserve (F‐RSR) is projected to be $15.6 million as of the end of FY
2013. This is above the F‐RSR long‐term maximum guideline level of $1.8 million for FY 2013.
Table 28: Fiber Rate Stabilization Reserve
Estimated Fiber Rate Stabilization Reserve
All Figures in thousands (000’s)
FY 2013 Adopted Budget Beginning Balance $ 11,729
Changes to FY 2013 Beginning Balance per FY 2012 Accounting $ 741
FY 2013 Beginning Balance after accounting changes $ 12,470
Net sum of FY 2013 Unaudited Actuals to date * $ 2,653
Current Projected Reserve Balance as of End of FY 2013 $ 15,123
Net sum of Projected Activity through Year End $ 466
Estimated FY 2013 Ending Balance $ 15,589
Adopted Budget F‐RSR Maximum Guideline $ 1,788
* Includes Encumbrances for CIP and Operations
Utility Reserves Summary
A summary of fiscal year beginning and expected ending reserve balances along with minimum
and maximum guidelines is provided for each Utility reserve in Table 29.
Utilities Update for Third Quarter of FY 2013
July 2013
49
Table 29: Utilities Reserves Summary
Beginning
Reserve
Balance as
of 6/30/12
FY 2012
(ASD)
Current
Projected
Reserve
Balance as
of 12/31/12
FY 2013
(ASD)
Current
Projected
Reserve
Balance for
06/30/13
FY 2013
(Util)
Projected
Reserve
Balance
(based on
Budget) for
FY 2013
Minimum Maximum
Electricity
Supply/Commodity 65,929$ 68,617$ 66,253$ 31,721$ 63,442$ 57,560$
Distribution 8,680 8,610 6,957 6,747 13,494 10,717
CIP 14,545 18,593 N/A
Public Benefit 1,149 1,149 1,261 1,261
ESP 50,320 50,320 50,320 50,320
All Others 6,679 6,767 N/A
Sub total Cash Reserves 147,302 154,056 N/A
Net Capital Investment 166,085 166,955 N/A
Total 313,387$ 321,011$ N/A
Gas
Supply/Commodity 7,618 5,116$ 7,153$ 4,072$ 8,142$ 5,726$
Distribution 8,374 7,947 5,096 3,339 6,678 4,819
CIP 16,015 20,901 N/A
All Others 4,999 6,449 1,000 1,000
Sub total Cash Reserves 37,006 40,413 N/A
Net Capital Investment 76,606 77,351 N/A
Total 113,612$ 117,764$ N/A
Water
Distribution 7,996$ 7,704$ 10,920$ 5,427$ 10,854$ 7,833$
CIP 13,382$ 15,749 N/A
All Others 4,940$ 10,463 1,000 1,000
Sub total Cash Reserves 26,318 33,916 N/A
Net Capital Investment 70,454$ 71,105 N/A
Total 96,772$ 105,021$ N/A
Fiber Optic
Distribution 12,470$ 14,963$ 14,557$ 715$ 1,788$ 13,818$
CIP 697 907 N/A
All Others 1,084 1,066 1,000 1,000
Sub total Cash Reserves 14,251 16,936 N/A
Net Capital Investment 7,226 7,194 N/A
Total 21,477$ 24,130$ N/A
Wastewater Collection
Distribution 4,751$ 5,096$ 3,589$ 2,253$ 4,506$ 4,899$
CIP 10,944 13,433 N/A
All Others 1,100 1,156 1,000 1,000$
Sub total Cash Reserves 16,795 19,685 N/A
Net Capital Investment 67,677 67,475 N/A
Total 84,472$ 87,160$ 4,589$
Budgeted Reserve
Guideline Range for
FY 2013
City Of Palo Alto
Utility Fund Reserve
Quarterly Projections - Unaudited
As of 3/31/2013 - UNAUDITED
(in thousands)