HomeMy WebLinkAboutStaff Report 2401-2496CITY OF PALO ALTO
CITY COUNCIL
Special Meeting
Monday, April 15, 2024
Council Chambers & Hybrid
5:30 PM
Agenda Item
4.Approve the Reliability and Resiliency Strategic Plan as Recommended by the Utilities
Advisory Commission; CEQA Status: exempt, not a project
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: April 15, 2024
Staff Report: 2401-2496
TITLE
Approve the Reliability and Resiliency Strategic Plan as Recommended by the Utilities Advisory
Commission; CEQA Status: exempt, not a project
RECOMMENDATION
The Utilities Advisory Commission (UAC) and staff recommend the City Council approve the
Reliability and Resiliency Strategic Plan for the City’s electric utility.
CEQA Status: Strategies 1.1 – 1.3, Grid Modernization Project: Exempt under CEQA Guidelines
Sections 15302, 15303 and 15183; Strategy 1.4, Potential 2nd Transmission Line: Not a Project;
Strategy 1.5, Foothills Undergrounding: Exempt under CEQA Guidelines Sections 15302;
Strategies 2-6: Not a Project.
EXECUTIVE SUMMARY
The Reliability and Resiliency Strategic Plan (RRSP) is a work item in the 2023-2025 Sustainability
and Climate Action Plan (S/CAP) Work Plan. The RRSP is intended to address the need for a
reliable, well maintained electric system with enhanced reliability to support an electrified
community and a desire among some residential community members for ways to maintain some
level of electric supply during outages, particularly with an electrified home. At its December 6,
2023 meeting, the UAC discussed the proposed RRSP. The UAC recommended the City Council
approve the RRSP with the inclusion of their input. Staff has incorporated the UAC input into the
proposed RRSP (Attachment A).1 Council held a study session2 to review the draft RRSP on
February 12, 2024. Staff has included some changes to the RRSP in redline to address Council
comments at that meeting, specifically 1) adding an action to Strategy 1 to develop goals for
1 The UAC edits are not shown in redline in Attachment A of this report but are included. You can see a summary of
the UAC edits in Staff Report 2311-2211 for the February 12, 2024 City Council meeting (Item 1)
(https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=13351) and the UAC edits are shown in
redline in Attachment A of that report.
2Study Session
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reliability metrics and 2) noting microgrids more prominently in Strategy 5, Action 4. The City
Council Ad Hoc Climate Protection Committee also held a public meeting of the Committee’s
Working Group on March 26 to review the RRSP. Staff and the UAC recommend Council approve
the RRSP with the redlined changes.
BACKGROUND
More background on the RRSP is provided in the December 6, 2023 UAC staff report.3 UAC
feedback4 can be found in the meeting minutes and is summarized below.
ANALYSIS
The RRSP is intended to address questions the community has had about the electric system’s:
•Reliability: how frequently the system experiences outages,
•Modernization: how the system will be upgraded to integrate and effectively utilize new
and existing flexible technologies like solar with batteries or vehicle to grid technology,
•Capacity: the capacity of the system to handle electrification, and
•Resiliency: the system’s ability to minimize the impacts of a major event, recover quickly,
and the utility’s role in helping individual customers maintain service during outages.
It includes six strategies, as follows:
•Strategy 1: Replace and modernize electric distribution infrastructure, which includes:
o the grid modernization project, actions 1.1, 1.2, and 1.3
o the second transmission line project, action 1.4
o the Foothills undergrounding project, action 1.5
•Strategy 2: Implement operational practices to improve reliability and manage outages
effectively
•Strategy 3: Integrate and ease adoption of flexible and efficient technologies and
strategies
•Strategy 4: Evaluate the benefits of flexible and resiliency technologies and efficient
electrification strategies to the utility and community
•Strategy 5: Evaluate the resource needs to promote the adoption of various flexible
demand reduction and resiliency solutions and efficient electrification strategies.
•Strategy 6: Implement any utility-driven programs identified in Strategy 5 that are chosen
by the City Council
3 UAC Staff Report https://www.cityofpaloalto.org/files/assets/public/v/3/agendas-minutes-reports/agendas-
minutes/utilitiesadvisory-commission/archived-agenda-and-minutes/agendas-and-minutes-2023/12-dec-2023/12-
06-2023-packetv2.pdf#page=129
4 UAC Feedback https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/agendas-
minutes/utilities-advisory-commission/archived-agenda-and-minutes/agendas-and-minutes-2023/12-dec-
2023/12-06-2023-approved-uac-minutes.pdf
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More detail on these strategies and how they address reliability, modernization, capacity, and
the resiliency of the electric system can be found in the attached Progress Update (Attachment
B) and the Discussion section of Staff Report 2311-2211 for the February 12, 2024 City council
meeting.5
Attachment B includes a status update (with costs) on the various RRSP strategies and actions.
COMMISSION RECOMMENDATION
In general, the UAC felt the RRSP was aligned with Council policy direction and feedback from the
UAC in earlier meetings. Some minor changes were requested to the document by UAC
Commissioners at the December 6, 2023 UAC meeting and were incorporated into the proposed
RRSP by staff. More detail on these changes can be found in the Commission Recommendation
section of Staff Report 2311-2211 for the February 12, 2024 City Council meeting.6 The UAC
unanimously (7-0) approved staff’s recommendation to recommend to the City Council the
adoption of the RRSP, with modifications discussed by the Commission.
FISCAL/RESOURCE IMPACT
The staffing and consulting resources needed to implement Strategies 1 through 5 are already in
place or will be requested through the annual budget process. Additional resources would likely
be needed to implement Strategy 6 depending which customer resiliency programs Council
chooses to approve. More detail on the resource needs for various aspects of the plan are
outlined in the Fiscal Impact section of Staff Report 2311-2211 for the February 12, 2024 City
Council meeting.6
STAKEHOLDER ENGAGEMENT
Staff has reviewed the proposed RRSP with the UAC, the Council Ad Hoc Climate Protection
Committee, that Committee’s Working Group (in a public meeting), and the Council. The RRSP is
also the product of a variety of public engagement efforts spanning several years prior to
development of the RRSP, as outlined in the Stakeholder Engagement section of Staff Report
2311-2211 for the February 12, 2024 City Council meeting.6
ENVIRONMENTAL REVIEW
The grid modernization project (described in Strategies 1.1, 1.2 and 1.3 in Attachment A) will
replace aging infrastructure and install modern network infrastructure to meet future needs
related to home electrification. This project does not expand the existing footprint of the City’s
network; there is sufficient capacity on the existing sub-transmission lines, substations, and
5Staff Report 2311-2211
https://cityofpaloalto.primegov.com/api/compilemeetingattachmenthistory/historyattachment/?historyId=c8e71a
95-42e0-43ba-ba1e-25f80ba9c330
6February 12, 2024 City Council Meeting
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primary feeders to serve the energy load that is being added to the system. Changes to the
equipment on the network will include replacement and installation of pad-mounted
transformers and new protective devices to improve reliability, and system controls to allow for
the import and export of energy from homes on the network. This project is categorically exempt
from California Environmental Quality Act (CEQA) review under CEQA Guidelines section 15303
(construction and location of limited numbers of new, small facilities or structures; installation of
small new equipment and facilities in small structures) and section 15302 (replacement or
reconstruction of existing structures and facilities). In addition, Council’s approval of the grid
modernization project does not require additional environmental review under CEQA Guidelines
section 15183, because the grid modernization project, an element of the Council-approved
S/CAP, is consistent with the Environmental Impact Report (EIR) Addendum to the City of Palo
Alto Comprehensive Plan Final Environmental Impact Report Council approved on June 5, 2023.7
The potential second transmission line (described in Strategy 1.4 in Attachment B) is distinct
and independent from the grid modernization project; CEQA analysis for this project will be
conducted separately once sufficient details are present to analyze.
The Foothills undergrounding project (described in Strategy 1.5 in Attachment B) is distinct and
independent from the grid modernization project and categorically exempt under CEQA
Guidelines 15302 (replacement or reconstruction of existing structures and facilities/conversion
of overhead electric utility distribution system facilities to underground).
Strategies 2 through 5 are not projects under CEQA because the operational activities, software
upgrades and program evaluations in Strategies 2 through 5 are administrative governmental
activities which will not result in any environmental impacts. Individual programs and
installations chosen by the community after the completion of Strategies 2 through 6 will
undergo CEQA evaluation before implementation, as needed.
ATTACHMENTS
Attachment A: Proposed Reliability and Resiliency Strategic Plan
Attachment B: March 2024 Status Update on RRSP Strategies and Actions
AUTHOR/TITLE:
Dean Batchelor, Director of Utilities
Staff: Jonathan Abendschein, Assistant Director of Utilities/Resource Management
7Environmental Impact Report https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=12530
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Attachment A: Reliability & Resiliency Strategic Plan – Draft for Discussion/Approval
(Note that many of the actions below are also part of other documents like the Utilities Strategic Plan)
Strategy 1: Replace and modernize electric distribution infrastructure
To avoid outages the utility will replace aging infrastructure, make sure new technologies can be easily
integrated into the distribution system, increase the interconnectedness of the electric system, and
ensure the utility has the capacity to complete its maintenance and investment needs. Infrastructure
investment to reduce wildfire risk will also reduce outages.
S1, Action 1: Replace aging infrastructure
Large amounts of the utility’s infrastructure are aging and needs replacement. The utility will replace much
of this infrastructure over a seven-year grid modernization effort while simultaneously addressing the
capacity issues in Action 2.
S1, Action 2: Upgrade capacity to accommodate new loads
The utility will invest in new capacity to accommodate new loads created by the electrification of vehicles
and buildings.
S1, Action 3: Improved switching to improve system flexibility, efficiency, and reliability
The utility will construct additional distribution feeder circuit ties and switches to make the electric
distribution system more interconnected to reduce the impact of outages, and enable more flexibility in
configuring power flows to more effectively integrate solar, storage, and other new technologies and to
reduce system losses.
S1, Action 4: Second transmission connection
The utility will pursue a second interconnection to PG&E’s transmission system to reduce the chance of a
single incident resulting in the loss of service to the entire community.
S1, Action 5: Foothills undergrounding
The utility will underground lines in the Foothills to reduce the risk of wildfire liability and minimize the
need for forced outages during windy high fire risk days to avoid the risk of electric lines being blown into
trees and starting wildfires.
S1, Action 6: Reliability metrics
The utility will work with the City’s Utilities Advisory Commission and Council to establish goals for its
reliability metrics as outcomes for the City’s capital investments taking place under this strategy.
Strategy 2: Implement operational practices to improve reliability and manage outages
effectively
The utility will reduce operational risks that lead to outages by ensuring key positions are filled, reducing
outage risks caused by vegetation, and communicating effectively during outages to give residents the
information they need to manage the impacts of outages.
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S2, Action 1: Strengthen the workforce
The utility will recruit, train and retain line-workers, system operators, engineers, inspectors to maintain
system and respond to outages effectively and, when there are staff vacancies, contract with third-party
contractors to supplement staff to keep up with regular utility operations, investment, and maintenance.
S2, Action 2: Employ best maintenance practices for wildfire protection
The utility will follow the practices in its Wildfire Mitigation Plan to reduce wildfire risk and the attendant
health and safety, liability, and outage risks.
S2, Action 3: Communicate effectively during outages
The City will communicate with residents effectively about outages using its newly upgraded outage
management system.
Strategy 3: Integrate and ease adoption of flexible and efficient technologies and strategies
Many technologies are being currently added to the electric system that are capable of charging and
discharging, generating electricity, or flexing their electric use by time period. Technologies include
rooftop solar, home batteries, vehicle to home and vehicle to grid systems, and grid-responsive home
equipment. These technologies can also create challenges for the distribution system at high
penetrations, resulting in voltage issue, failures in system protection, or other issues because the system
is not designed for them. But they can also create benefits when used well, reducing the cost of electricity,
reducing emissions, reducing strain on the local distribution system, and creating home resiliency. The
utility intends to facilitate the adoption of these technologies.
This strategy is intended to lower the barriers for these technologies and promoting their voluntary
adoption even before any utility incentive or assistance programs are established (utility incentive or
assistance programs will be evaluated in Strategies 4 and 5). Barrier reduction and effective grid
integration are a first step toward facilitating these technologies and realizing their benefits, especially
when paired with promotion of best practices for installing and operating them in an efficient manner.
S3, Action 1: Configure the distribution system to accommodate high penetrations of solar,
batteries, and other technologies
The utility will complete an evaluation of how to configure the electric system to accommodate high
penetrations of solar, batteries, and other technologies and integrate the findings of this evaluation into
the grid modernization study.
S3, Action 2: Review, communicate, and streamline permitting and other regulatory rules for
efficient and flexible electrification technologies
The utility to establish clear utility rules and policies on the installation of efficient electrification
technologies (e.g. low-wattage EV chargers, circuit pausers, smart panels, grid-responsive equipment and
vehicle chargers) and will work with other City departments to establish clear permitting guidelines.
S3, Action 3: Promote Efficient Electrification
The utility will partner with the City’s Sustainability and Climate Action Plan (S/CAP) team and other City
departments to promote efficient electrification strategies to residents, particularly those doing
construction or renovation projects, and incorporate them into electrification programs where feasible.
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S3, Action 4: Promote the use of flexible technologies in a grid-friendly way
The utility will promote energy use during times of day when it results in lowest emissions and is most
grid-friendly, and will send price signals via time of use rates once advanced metering infrastructure is in
place
Strategy 4: Evaluate the benefits of flexible and resiliency technologies and efficient
electrification strategies to the utility and community
The utility will value the benefits of flexible and resiliency technologies (such as solar + batteries, vehicle
to grid, and grid-responsive water heaters and other equipment) to the utility’s supply and distribution
costs and estimate the value of to the community of the resilience that some of these technologies can
provide, with the results supporting an evaluation of the utility’s potential role in facilitating or promoting
these technologies.
S4, Action 1: Value the utility benefit of flexible technologies on electric supply costs
The utility will evaluate the electric supply cost benefits of outreach, education, and time of use rates to
encourage the shifting of energy use to times of day when prices and emissions are lower and the grid
faces fewer constraints, and will evaluate the benefits of strategies like automated demand response
programs in enhancing customer participation in load shifting.
S4, Action 2: Value the utility benefit of flexible technologies on electric distribution costs and
capacity
The utility will attempt to value the utility benefit to electric distribution costs and capacity of outreach,
education, and time of use rates to encourage the use of flexible technologies to shift energy use to other
times of day, and will also explore the availability and cost/benefit of technologies that could automate
the operation of these flexible technologies to be responsive at the transformer level. These valuation
exercises are complex, so the utility will seek partners (e.g. with SLAC’s GISMO Lab) or consultants to
complete this action, and will not proceed unless this action can be completed without slowing the grid
modernization efforts described in Strategy 1, Actions 1, 2, and 3
S4, Action 3: Explore estimating the value of resiliency for the community
The utility will attempt to value of extra resiliency for the community to support program design.
S4, Action 4: Estimate the cost of individual customer and community resiliency approaches
The utility will estimate the cost of various community resiliency approaches such as microgrids and
compare them to the value of resiliency estimated in Strategy 4, Action 3 above.
Strategy 5: Evaluate the resource needs to promote the adoption of various flexible demand
reduction and resiliency solutions and efficient electrification strategies
Based on the cost and value of various flexible demand reduction and resiliency solutions investigated in
Strategy 4 the utility will develop outlines of potential programs to facilitate and promote the use of
flexible technologies to reduce supply and distribution costs, optimize the use of distribution capacity,
and enhance community resiliency. The goal of this strategy is to characterize and estimate resource
needs for the potential program approaches described below and to provide policy choices to the Utilities
Advisory Commission and Council consideration.
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Strategy 5, Action 1: Evaluate utility-driven programs to enhance resiliency and lower the demand
on the grid
Evaluate possible utility programs to help community members install grid-responsive equipment, solar,
storage, and/or vehicle to home or vehicle to grid solutions. Program approaches could include, but are
not limited to, incentives, technical assistance, power purchase agreements or feed-in tariffs, direct
installation and possibly ownership of equipment, or public-private partnerships with an aggregator.
Types of locations to investigate include single-family homes, multi-family buildings, at small and medium
businesses, or in larger commercial facilities in Palo Alto.
Strategy 5, Action 2: Evaluate equity-based and need-based versions of the programs
The utility will consider how the programs above may need to be adjusted to address the needs of
customers with special needs (e.g. medical needs) or low-income customers.
Strategy 5, Action 3: Evaluate community-based versions of the programs
The utility will evaluate how the programs in Action 1 could be adjusted to provide community emergency
resources at community facilities or via public-private partnerships.
Strategy 5, Action 4: Evaluate other resiliency approaches like neighborhood-level microgrids
The utility will evaluate other potential approaches to providing community resiliency such as mobile
battery storage or neighborhood-level microgrids.
Strategy 6: Implement any utility-driven programs identified in Strategy 5 that are chosen by
the City Council
The utility will implement strategies identified in Strategy 5 as directed by Council
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Attachment B: Reliability & Resiliency Strategic Plan – Progress Update March 2024
Strategy/Action Status Cost
Strategy 1: Replace and Modernize Infrastructure
1.1 Replace aging infrastructure
1.2 Upgrade capacity to
accommodate new loads
1.3 Improved feeder switching
capabilities
Strategies 1.1 – 1.3, the grid modernization project, will replace aging
infrastructure and install a modern network infrastructure to meet future home
electrification needs. This project does not expand the existing footprint of the
network; there is sufficient capacity on the existing sub-transmission lines,
substations, and primary feeders to serve the energy load that is being added to
the system. Changes to the equipment on the network will include
replacing/installing transformers, installing new protective devices to improve
reliability, and the installation of system controls to allow for the import and
export of energy from homes on the network.
A pilot project will replace and upgrade aging infrastructure serving
approximately 1200 residents. Once the pilot is completed the grid
modernization project will be expanded to approximately 6500 residences.
The grid modernization project has the following timeline:
•Upgrade transformer and feeder capacity in the overhead sections of the
system (which represent over 90% of single-family neighborhoods) by
the end of 2027. Upgrade underground sections by 2030.
•Add switches, connections, and upgrade substations by 2030.
•Construction on the first modernization project is starting in Q2 2024 in
a 1200-home neighborhood bounded by Louis, Amarillo, 101, and
Embarcadero. The modernization projects will be coordinated with fiber
to the premise construction.
Electric Fund CIP EL-24000
(Grid Modernization):
$300 million (of which staff
very preliminarily
estimates 50% - 60% is for
existing infrastructure
replacements that would
occur regardless of
electrification)
1.4 Second transmission
connection
Staff, with consultant help, continues to work with the California Independent
System Operator (CAISO) and PG&E to build a second transmission line to the
Adobe Creek Substation, from Moffett field, but no definitive progress has been
made to date.
Electric Fund CIP EL-06001
(115 kV Electric Intertie):
$1.8 million for planning
and design work for
application to CAISO
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1.5 Foothills undergrounding A key wildfire mitigation activity is undergrounding eleven miles of electric lines
in the Foothills area. This iterative project consists of multiple phases and is
expected to be complete in 2025. CPAU already installed two of four required
substructures and is designing the next two. The first two phases were
completed in September 2023.
Electric Fund CIP EL-21001
(Foothills Rebuild):
$15 million
Strategy 2: Operational Strategies to Improve Reliability and Manage Outages Effectively
2.1 Strengthen the workforce Concerted efforts are currently underway to recruitment, train, and retain line-
workers, system operators, engineers, inspectors to maintain system and
respond to outages effectively. Staff have also contracted with third-party
contractors to supplement staff to undertake emergency response,
maintenance, and capital improvement projects.
1.0 FTE (spread among
three people) for
additional recruitment and
retention work
2.2 Wildfire protection
maintenance practices
Staff regularly updates its Wildfire Mitigation Protection Plan to protect power
lines in the Foothills, and is exploring innovative software to make vegetation
management more efficient.
Implementation requires
$150,000 to $200,000 for
vegetation clearance
annually
2.3 Communicate effectively
during outages
In September 2023 CPAU implemented and operationalize a new OMS system.
The new OMS will also allow CPAU to more quickly detect and respond to
power outages and provide customers with timely notifications and updates.
$73,000 was spent to
develop the system.
Ongoing maintenance
involves 0.25 FTE and
ongoing system costs of
$108,000 per year.
Strategy 3: Effectively Integrate and Ease Adoption of New Technologies
3.1 Configure the distribution
system to accommodate high
penetrations of solar, batteries,
and other technologies
Staff has completed an evaluation of the distribution improvements needed to
accommodate high penetrations of solar and storage and is currently evaluating
whether these same improvements will also accommodate vehicle to grid
technologies, smart panels, and flexible loads. Expected completion: Q1 2024
$30,000 to 50,000 in
consultant studies from
electric utility operating
budgets
3.2 Review, communicate, and
streamline permitting and other
regulatory rules for efficient and
flexible electrification
technologies
Staff is conducting an inter-departmental internal review of various
technologies to establish clear rules and guidelines for implementation of these
technologies, after which it will begin developing resources for the community
to use and outreach to raise awareness. Time of use rates and a transition plan
0.25 FTE in staff effort
from existing staff
resources
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3.3 Communicate how to
electrify efficiently
3.4 Communicate how to use
technologies in a grid-friendly
way
are currently being developed in parallel with the City’s rollout of advanced
metering infrastructure. Expected completion: Q2 2024
Strategy 4: Value the benefits of flexible technologies to the utility and community
4.1 Value the utility benefit of
flexible technologies on electric
supply costs
Staff is developing a request for proposals for a consultant to perform these
analyses, as well as the analysis of Actions 4.3, 4.4, and the analyses in
Strategy 5. Staff expects to be able to bring a consultant contract to Council by
August 2024, with study completion tentatively planned by Q1 2025.
Estimated $70,000 to
$120,000 in consulting
assistance, 0.25 FTE in staff
effort.
4.2 Value the utility benefit of
flexible technologies on electric
distribution costs and capacity
Staff is in talks with its electric engineering consultant and a potential academic
partner about partnering to complete this analysis. The tentative completion
date is Q1 2025.
Estimated $50,000 to
$200,000 in consulting
assistance, 0.1 FTE in staff
effort
4.3: Explore estimating the value
of resiliency for the community
4.4: Estimate the cost of various
community resiliency
approaches
See status update for 4.1, above.See status update for 4.1,
above.
Strategy 5: Evaluate the resource needs for various demand reduction and resiliency programs
5.1: Evaluate utility-driven
programs to enhance resiliency
and lower the demand on the
grid
5.2 Evaluate equity-based and
need-based versions of the
programs
5.3: Evaluate community-based
versions of the programs
Staff is developing a request for proposals for a consultant to perform these
analyses, as well as the analysis of Actions 4.1, 4.3, and 4.4, above. The tentative
completion date for this study is Q1 2025.
See status update for 4.1,
above
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5.4: Evaluate other resiliency
approaches
Strategy 6: Implement any demand reduction or resiliency programs chosen by the community
No actions planned until Strategies 4 and 5 are completed and policy direction is received from Council