HomeMy WebLinkAboutStaff Report 14660
City of Palo Alto (ID # 14660)
City Council Staff Report
Meeting Date: 9/27/2022 Report Type: Consent Calendar
City of Palo Alto Page 1
Title: Adoption of a Resolution Approving and Attesting to the Veracity of the
City's 2021 Annual Power Source Disclosure and Power Content Label
Reports
Council Priority: Climate Change: Protection & Adaption
From: City Manager
Lead Department: Utilities
Recommendation
Staff recommends that the City Council adopt a resolution (Attachment A) approving and
attesting to the veracity of the City’s two Power Source Disclosure reports for 2021 and the
City’s two Power Content Labels for 2021.
Background
Senate Bill 1305 (Link) was approved in 1997 to ensure that all retail suppliers of electricity
disclose to consumers the sources of energy used to provide the electric service in an accurate,
reliable, and easy to understand manner. The SB 1305 Report is commonly referred to as the
Power Source Disclosure (PSD) report. The City of Palo Alto is required to submit an annual PSD
Report to the California Energy Commission (CEC) by June 1st of each year. The information
contained in this reporting is used to prepare the annual Power Content Label (PCL), which is
mailed to our customers and posted on the City’s website by October 1st of each year at
www.cityofpaloalto.org/powercontentlabel and on the CEC’s website at energy.ca.gov/power-
content-label.
Discussion
In 2017, the CEC updated the regulation1 implementing SB 1305 making the changes
retroactively effective in October 2016. (The regulation was subsequently modified in May
2020.2) The changes included a provision that requires utilities to engage a third-party certified
1 “Power Source Disclosure Program Regulations,” California Energy Commission, CEC-300-2017-048, October
2016. http://docketpublic.energy.ca.gov/PublicDocuments/14-OIR-
01/TN216978_20170412T103905_Power_Source_Disclosure_Program_Amended_Regulations.pdf.
2 “Modification of Regulations Governing the Power Source Disclosure Program,” California Energy Commission,
Docket Number: 20-PSDP-01, May 2020.
https://efiling.energy.ca.gov/GetDocument.aspx?tn=232986&DocumentContentId=65451
City of Palo Alto Page 2
public accountant to perform an audit to verify the specific purchases, resales, and self-
consumption of energy by fuel type.3 However, the regulation includes an exemption from the
audit requirement for publicly owned electric utilities, if the governing board of the utility
“submits to the Energy Commission an attestation of the veracity of each annual report and
power content label for the previous year.”4
In Palo Alto’s case, this means that the PSD reports and PCLs for the City’s two retail electricity
products (the “standard rate” carbon neutral product and the voluntary PaloAltoGreen product,
which is available to all commercial customers and allows them to pay a small premium in order
to receive a power supply comprising only wind and solar generation) can both be approved by
the City Council, as described above.
In 2021, CPAU’s hydroelectric generation was well below long-term average levels, due to the
ongoing drought conditions the state has experienced over the last several years. Also in 2021,
with approval by the City Council in August 2020 (Staff Report 11556), CPAU continued its REC
Exchange Program, which involves taking a regional approach to fulfilling its Carbon Neutral
Electric Portfolio goals by selling renewable energy from the City’s long-term renewable
contracts and using the most cost-efficient renewable energy from outside the state to fulfill
carbon neutrality requirements. The earnings from this program can be used for purposes such
as local decarbonization or rate reduction. Although the power sourced out-of-state remains
renewable and carbon-neutral, the CEC categorizes such power as “unspecified power” on the
PSD and PCL documents.
Under the City’s REC Exchange Program the City sold a total of 287,210 MWh of in-state
renewable generation in 2021, and purchased a total of 358,408 MWh of out-of-state
renewable generation, yielding $2.22 million in net revenue. Per Council’s direction, for these
2021 earnings, at least one-third of this revenue will be invested locally in electrification efforts
necessary to meet the City’s ambitious climate goals, while the remainder will be used to offset
other supply purchase costs and minimize rate increases as a way of helping the community
manage the economic impacts of the pandemic.
As a result of these renewable energy sales—and the fact that the CEC’s regulations do not
recognize out-of-state renewable generation as an “eligible renewable” energy source—the
share of the City’s standard power mix that comes from eligible renewables sources was lower
in 2021 (33.7%) than in many previous years, like 2019 (36.3%) or 2018 (65%). However, as
noted earlier, the City’s power supply remained carbon neutral in 2021 in accordance with the
Council-adopted Carbon Neutral Plan (Staff Report 11556), and the City remained in compliance
with the state’s Renewable Portfolio Standard (RPS) mandate.
Utilities Department staff submitted the City’s annual PSD reports (Exhibit A to Attachment A)
for calendar year 2021(Linked Document) to the CEC in June 2022, along with the associated
3 California Code of Regulations Title 20, Section 1394.2(a).
4 California Code of Regulations Title 20, Section 1394.2(a)(2).
City of Palo Alto Page 3
staff attestation forms. The 2021 PCLs (Exhibit B to Attachment A) (Linked Document) will be
mailed to each electric utility customer as a bill insert and posted on the City’s website in
September 2022, in accordance with the regulation. The attached resolution (Attachment A)
approves the annual PSD reports and PCLs for both the standard carbon neutral power mix and
the PaloAltoGreen product and provides for Council’s attestation to the veracity of these four
documents as required for exemption from the third-party audit requirement.
Staff anticipates submitting the City’s annual PSD report for calendar year 2022 to the CEC by
June 2023 and providing the 2022 PCL to electric customers around September 2023.
Resource Impact
Adoption of the attached resolution will not result in a financial impact to the City.
Policy Implications
Adoption of the attached resolution will enable the City to comply with the CEC regulations
implementing SB 1305 (California Code of Regulations, Title 20, sections 1391 to 1394).
Environmental Review
Adoption of the attached resolution is not subject to California Environmental Quality Act
(CEQA) review as an administrative government activity that will not result in any direct or
indirect physical change to the environment (CEQA Guidelines section 15378(b)(5)).
Attachments:
• Attachment A: Resolution
Resolution No. ____
Resolution of the Council of the City of Palo Alto Approving and
Attesting to the Veracity of the City’s 2021 Power Source
Disclosure and Power Content Label Reports
R E C I T A L S
A. The California Legislature adopted Senate Bill 1305 in 1997 to ensure that all retail
suppliers of electricity, including the City of Palo Alto, disclose to consumers the sources of energy
used to provide electric service in an accurate, reliable and easy to understand manner.
B. The SB 1305 Report is commonly referred to as the Power Source Disclosure (PSD)
report, which shows the City’s electric portfolio purchases for the prior calendar year, as well as
the fuel mix for the City’s retail electricity sales for the prior calendar year.
C. The information contained in the PSD report is used to prepare the City’s annual
Power Content Label (PCL), which discloses the fuel mix of the City’s retail electricity sales during
the prior calendar year, as well as the fuel mix for the state as a whole, and which is mailed to
the City’s electric utility customers via a bill insert by October 1st every year.
D. California Code of Regs., title 20, sections 1394.2(a)(2), updated by the California
Energy Commission effective May 2020, allows the City Council to approve and attest to the
veracity of each PSD report and PCL for the previous year, including the reports for Palo Alto’s
voluntary PaloAltoGreen product, which is provided to commercial customers who
participate in the PaloAltoGreen program.
E. The PSD report submissions for both the City’s standard carbon neutral power
portfolio, and the City’s PaloAltoGreen product are prepared by the Northern California Power
Agency (NCPA), a joint power authority of which Palo Alto is a member. The draft PSD reports are
then checked by City staff against the City’s account in the Western Renewable Energy
Generation Information System (WREGIS), where the City tracks its renewable and carbon-free
energy. The PaloAltoGreen renewable energy supplies are then verified by a third-party verifier,
in order to achieve Green-e certification for that program.
F. In June 2022, Utilities Department staff submitted the 2021 Annual PSD reports for
both the City’s standard carbon neutral portfolio and the PaloAltoGreen program, to the Energy
Commission in accordance with the applicable regulations.
The Council of the City of Palo Alto (“City”) RESOLVES as follows:
SECTION 1. The City Council approves the submission and attests to the veracity of the
2021 Annual Power Source Disclosure reports for the City’s standard carbon neutral portfolio,
and for the City’s voluntary PaloAltoGreen program (attached as Exhibit A to this resolution) which
staff submitted to the California Energy Commission in June 2022.
SECTION 2. The City Council approves and attests to the veracity of the 2021 Annual Power
Content Label reports for the City’s standard carbon neutral portfolio, and for the City’s voluntary
PaloAltoGreen program (attached as Exhibit B to this resolution) which staff distributed to Utilities
customers as an insert in their September Utilities bills.
SECTION 3. The Council finds that the adoption of this resolution is not subject to
California Environmental Quality Act (CEQA) review because it is an administrative government
activity that will not result in any direct or indirect physical change to the environment (CEQA
Guidelines section 15378(b)(5)).
INTRODUCED AND PASSED: September 26 , 2022
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
Assistant City Attorney City Manager
Director of Utilities
Director of Administrative Services