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Home My WebLink AboutStaff Report 14076 City of Palo Alto (ID # 14076) City Council Staff Report Meeting Date: 3/7/2022 Report Type: Study Session City of Palo Alto Page 1 Title: Joint Study Session With the Utilities Advisory Commission (UAC) Regarding S/CAP Development, Implementation, and the UAC's Role in S/CAP Implementation Efforts From: City Manager Lead Department: Utilities Overview The Council and Utilities Advisory Commission (UAC) are holding a joint study session to discuss sustainability and utility related items. This report provides background on several relevant discussions of the Utilities Advisory Commission and Council Sustainability and Climate Action Plan (S/CAP) Ad Hoc Committee (S/CAP Committee), below. This study session is intended to solicit Council input on the UAC’s roles and responsibilities with respect to the City’s S/CAP implementation efforts, with a few specific. Q1) What are the roles and responsibilities of the City Council and the UAC regarding the S/CAP? Q2) Would the City Council like a UAC representative to work with the S/CAP Committee in its working group meetings? Q3) Does the City Council want the UAC in its full capacity engaged in the various aspects of the S/CAP for consideration by the City Council or the S/CAP Committee? Council S/CAP Committee The S/CAP Committee was constituted at the April 19, 2021 Council meeting at which staff presented the S/CAP update impact analysis (Agenda Item 7; Staff Report 12009; Memo with missing attachments; Minutes; Video; Webinar: S/CAP Impact Analysis Overview) Below is the schedule of S/CAP Committee meetings focused on the City’s S/CAP update. Meeting materials, including meeting recordings, can be found on the S/CAP Committee’s website.1 MEETING DATE MEETING TOPIC 1 https://www.cityofpaloalto.org/City-Hall/City-Council/Sustainability-and-Climate-Action-Plan-Ad-Hoc-Committee City of Palo Alto Page 2 AUGUST 12, 2021 Kickoff Meeting SEPTEMBER 9, 2021 Residential Building Electrification OCTOBER 14, 2021 Non-residential Building Electrification NOVEMBER 4, 2021 Electric Vehicles DECEMBER 9, 2021 Mobility JANUARY 13, 2022 Wildfires and Sea Level Rise FEBRUARY 10, 2022 Funding and Financing The S/CAP Committee has yet to discuss some topics assigned to it, such as reliability and resiliency, which was assigned to be discussed by the S/CAP Committee at the Council’s August 16, 2021 meeting (Item 4, Staff Report 12194, Minutes, Video). In addition to its public meetings the S/CAP Committee has formed a working group of community members active in sustainability from in and around Palo Alto to inform its work. The working group has held two workshops on residential electrification (November 16, 2021 and January 5, 2022). The working group will break into teams to discuss the following topics: 1) Financing; 2) Engagement; 3) Technology; 4) Scaling up S/CAP activities The S/CAP Committee has also held a discussion regarding the electric distribution system and the impacts of electrification (including appliance fuel switching, EV charging, solar, and storage). Utilities Advisory Commission Over the last sixteen months the UAC has held several discussions relevant to the S/CAP, including: • Impact of single-family residential electrification on the gas and electric systems (November 4, 2020; Staff Report 11639, Minutes; Video) • Recommend the City Council Decline to Adopt Energy Storage System Targets and Receive the 2020 Energy Storage Report (December 2, 2020; Staff Report 11357; Minutes; Video) • Projected Electrification Impacts on Gas Utility System Average Rates Impact of single- family residential electrification on gas rates (January 6, 2021; Staff Report 11751; Minutes; Video) • Lifecycle Emissions for Gasoline, Natural Gas and Electricity Consumed in Palo Alto (January 6, 2021; Staff Report 11778; Minutes; Video) • Discussion and Status Update on the 2020 Sustainability and Climate Action Plan Update (February 3, 2021; Staff Report 11867; Minutes; Video) • Permit Processes for Various Energy Technologies: o April 7, 2021 initial presentation (Staff Report 12032; Minutes; Video) City of Palo Alto Page 3 o September 1, 2021 update (Staff Report 13530; Minutes; Video) o January 5, 2022 update (Staff Report 13806; Minutes; Video) • Utilities Wildfire Mitigation Plan (June 2, 2021; Staff Report 12190; Minutes; Video) • One Water Plan Objectives, Scope and Community Engagement (July 7, 2021; Staff Report 12332; Minutes; Video) • Impact of Decarbonization on the Resiliency of Single Family Homes in Palo Alto (November 3, 2021; Staff Report 13608; Minutes; Video) • Discussion of Objectives and Scope of Energy Resiliency and Reliability Plan (January 5, 2022; Staff Report 13821; Minutes; Video) • Discussion of electric distribution system impacts (February 2, 2022 meeting; Staff Report 13923; Video) Attachments: • Attachment A: Commissioner Memo on SCAP Grid Modernization 1 City of Palo Alto Commissioners MEMO DATE: March 07, 2022 TO: City Council Members and Utilities Advisory Commissioners FROM: Commissioner Johnston, Commissioner Metz SUBJECT: COMMISSIONER MEMO ON ELECTRIC GRID MODERNIZATION Objective Our goal is to ensure that CPAU electric distribution grid modernization receives the urgency, attention, and resources needed to keep pace with Palo Alto’s Sustainability & Climate Action Plan (SCAP) implementation. To that end, we recommend as a first step the immediate development of a high-level Roadmap for grid infrastructure modernization. Such a Roadmap, in addition to underpinning SCAP implementation, will help reduce grid infrastructure upgrade cost and risk of technological obsolescence by anticipating opportunities to optimize energy demand. Background Accomplishing Palo Alto’s Sustainability & Climate Action Plan (SCAP) is a top priority for the City to achieve its sustainability and climate change objectives. Electrification of services now powered by fossil fuel, including personal transportation, domestic hot water, cooking and space heating, is core to SCAP success; SCAP outcomes needed by 2030 include “85% of all Palo Alto new vehicle purchases are EVs…virtually all single-family gas appliances and virtually all commercial rooftop HVAC units are electrified…significant additional multi-family and commercial building electrification…”. (2021 S/CAP Update Report, April 19, 2021) As discussed in the February 2 UAC meeting, delivering those energy services electrically will require modernization of the CPAU electric distribution infrastructure: The existing infrastructure has insufficient capacity for a sufficient level of electrification of EV transportation and electrical heating to meet the SCAP goals, and the grid has other technical shortcomings that need to be addressed. But CPAU has “no staffing to manage Grid Modernization program and contracting”. (Discussion & Presentation on the Electric Distribution Infrastructure Modernization for S/CAP ID # 13923, February 2, 2022) 2 Recommended Actions To address this challenge, we recommend as a first step development of a high-level Roadmap for grid infrastructure modernization and adoption of a timetable for each step. 1. Within days develop a plan and a cost estimate (currently funded or not) for hiring or contracting resources to develop a high-level Roadmap for CPAU distribution infrastructure modernization consonant with SCAP. 2. Within days hire or contract the resources to develop the grid modernization Roadmap. 3. Complete the Roadmap within months. We suggest the Modernization Roadmap should include: 1. A high-level estimate of the fraction of the grid/generation/transformer/switch/storage components requiring upgrade 2. Key milestones and decision points 3. Specific links and coordination of grid modernization stages with the SCAP rollout 4. Ballpark capital and operating costs for grid modernization implementation 5. Approximate human resource requirements for modernization implementation 6. Top opportunities to mitigate, reduce, or delay grid modernization expenditures, especially ways to reduce future energy consumption or to reduce/shift peak demand: a. Increased use of high-efficiency space conditioning or water heating equipment b. Improved building envelopes or other energy efficiency initiatives c. Local energy generation and storage (on both sides of the meter), including EV storage d. Demand management To ensure that the Grid Infrastructure Modernization Project receives continued emphasis, we would request that progress on the project be reported at least quarterly to the UAC.