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HomeMy WebLinkAbout2025-09-03 Utilities Advisory Commission Summary MinutesUtilities Advisory Commission Minutes Approved on: November 5, 2025 Page 1 of 13 UTILITIES ADVISORY COMMISSION MEETING MINUTES OF SEPTEMBER 3, 2025 REGULAR MEETING CALL TO ORDER Commissioner Phillips called the meeting of the Utilities Advisory Commission (UAC) to order at 6:00 p.m. Present: Vice Chair Mauter (Remote), Commissioners Croft, Gupta, Metz, and Phillips Absent: Chair Scharff and Commissioner Tucher AGENDA REVIEW AND REVISIONS None ORAL COMMUNICATIONS None APPROVAL OF THE MINUTES ITEM 1: ACTION: Approval of the Minutes of the Utilities Advisory Commission Meeting Held on July 9, 2025 ACTION: Commissioner Gupta moved to approve the draft minutes of the July 9, 2025 meeting as submitted. Commissioner Metz seconded the motion. Commissioner Metz thanked staff for appending his comments on Item 5 related to reliability and resilience studies. Commissioner Phillips inquired if Commissioner Metz’s comments were considered part of the minutes or an addition. Kaylee Burton, Utilities Administrative Assistant, explained that Commissioner Metz’s comments were an addition to the minutes as a supporting document. The motion carried 5-0 with Vice Chair Mauter, and Commissioners Croft, Gupta, Metz, and Phillips voting yes. Utilities Advisory Commission Minutes Approved on: November 5, 2025 Page 2 of 13 UTILITIES DIRECTOR REPORT Alan Kurotori, Utilities Director, delivered the Director's Report. On August 11, 2025, the City Council approved the amended water supply agreement with the City and County of San Francisco. Staff brought to Council a rate change update due to a clerical error in the rate schedule effective September 1, 2025. The change did not negatively impact customers but was estimated to impact revenues by about $25,800 for rates associated with the net surplus energy compensation package related to solar. The Northern California Power Agency’s legislative tour included Santa Clara and Palo Alto. In August, 30 federal and state legislative staff visited Rivian’s headquarters and stayed overnight in Palo Alto. The Mayor and Vice Mayor spoke to the delegation. One topic of discussion was Palo Alto’s public-private partnership with Tesla to pay a share of the Hanover Substation upgrades. There has been outreach to customers in the foothill areas susceptible to public safety power shut-offs. Undergrounding of all lines serving the foothills in the city limits west of Highway 280 will be completed by the end of 2025. Because of supply chain issues, the pole-mounted voltage regulator will be exchanged in early April but the rest of the lines will be de-energized. Mr. Kurotori read a comment from the Palo Alto Unified School District (PAUSD) expressing their appreciation to City staff. PAUSD commended the electric utility team for their commitment and hard work that enabled the completion of updates to 9 school campuses prior to the beginning of the schoolyear. Social media was being used to notify customers of residential electrification rebates, and that federal tax incentives will be ending at the end of this calendar year. As of September 1, the Utility has approved 76 rebates and applications totaling $280,000 in reserves for Heat Pump Water Heaters. The Utility’s website has information on rebates between $3500 to $7000, depending on income and if the panel and circuits are upgraded. Customers can get tax breaks, rebates from Palo Alto Utilities, and the State’s Tech Clean incentives when using those contractors. Mr. Kurotori mentioned that some staff will be redeployed to work with CPAU customers and their contractors to get their projects moving forward during this great opportunity to electrify their home. A full update on fiber to the premises will be presented at the October UAC meeting. The fiber hut permit was approved. The secured perimeter of that substation will be expanded to include the fiber hut. One of the challenges with AMI was having a strong enough signal to read all the meters remotely, so a new advanced metering infrastructure base station was put on the rooftop of City Hall. The AMI conversion was about 90 percent complete with over 66,000 meters currently on AMI. With the new base station, the conversion rate was anticipated to increase to 95 percent with an additional 4000 meters by the end of 2025. Due to a combination of age, Utilities Advisory Commission Minutes Approved on: November 5, 2025 Page 3 of 13 condition, difficult location, and having to coordinate with customers, the remaining 5 percent of meters will be converted to AMI in 2026. A CPAU staff member posted a YouTube Shorts video for anyone interested in the new base station and how it was installed. Commissioner Phillips recalled the goal was to have AMI 100 percent complete by the end of last year, so he asked if the 2-year delay was unanticipated. Dave Yuan, Utilities Strategic Business Manager, stated one reason for the delay was waiting for the electric meters a year longer than anticipated because of supply chain issues. Some of the work the contractors were doing was causing extra work for staff, so the work was brought in- house rather than continuing to outsource it, which will also result in a better customer satisfaction level. UPA, the third-party contractor, left in April, so the remaining meters will be done internally by staff. NEW BUSINESS ITEM 2: Discussion of Gas Utility Transition Study Scoping; CEQA Status – Not a Project Jonathan Abendschein, Assistant Director of Sustainability Climate Action, delivered a presentation. This item falls within the 2023 through 2025 S/CAP Climate Action Work Plan and this year’s Council Priorities. This study was within the Water, Gas, Wastewater Engineering and Operations team for Utilities. If City, State, and regional policies are successful in driving building electrification, gas use will decline significantly. This study aims to quantify and mitigate the physical, operational, and financial impacts; and develop strategies to facilitate abandonment to make the gas transition safe, smooth, and equitable. The study outputs will include cost estimates of gas main and service abandonment, operational cost impact, system average rate changes by class, the amount of funding needed to keep gas rates in line with current forecasts, Cap and Trade cost and revenue impacts, cost impacts to other utilities, and impacts to the General Fund transfer and UUT. Four electrification scenarios will be modeled to represent 20, 40, 60, and 80 percent reduction in gas sales. The scenarios will exclude electrification of large medical and industrial buildings as well as commercial cooking because those gas uses were more complicated to electrify, which was why a maximum of 80 percent gas reduction was chosen. As gas usage decreases, the system will have underused or unused gas mains. This study will analyze where entire blocks of gas infrastructure could be safely abandoned and where gas lines needed to be retained for medical, industrial, and restaurant customers or for operational purposes to keep gas flowing. Retirement of certain gas main materials (e.g., PVC, steel) may yield more savings. The standard practice was to dig and abandon unused lines for safety and to avoid maintenance. Block-level gas system abandonment was more cost efficient than individual service abandonment because of fewer excavations, less labor, and less street repair. All homeowners on the block are required to remove all gas appliances before block abandonment can be accomplished, so one customer with one gas appliance can hold up gas main abandonment for the entire block. Declining gas use and gas abandonment may not Utilities Advisory Commission Minutes Approved on: November 5, 2025 Page 4 of 13 decline enough to enable staff attrition; therefore, the per-unit gas utility cost will increase for remaining customers. The preliminary study results will be brought to the UAC in the next couple months. The final report was anticipated in early 2026. The study results will inform the 2026-2027 S/CAP work plan. Public Comment: None. Commissioner Metz voiced the following questions and comments. Will the study incorporate the impacts of the Bay Area Air Quality Management District’s proposed NOx rules to eliminate residential gas water heaters in 2027 and furnaces in 2029? Had staff thought about options to address the hurdle of one person blocking the shutdown of a block? Will CPAU have an ideal plan on the best way to transition the gas utility and not having to replace aging mains, defining what we want to happen operationally? Expenses and revenue are public information. It would be useful to know if customers will be incentivized to help the City accomplish its plan. Mr. Abendschein explained that the proposed NOx rules were incorporated in a lot of other climate work that staff was doing but it will not be incorporated in this study. This study does not have a time dimension but instead will assess the system at various milestones. The Monte Carlo method will simulate 20, 40, 60, and 80 percent reductions in gas sales to analyze the system. Time becomes very important at 70 or 80 percent electrification, so time dimension was more of a second-stage analysis after strategies were identified to manage the financial impacts to rates and revenue loss. This study will provide an understanding of how much value we gain from helping people facilitate the shutdown of an entire block. Solutions have not yet been identified because it required practical, legal, and financial modeling of the cost of maintaining gas mains for remaining gas customers, programs, incentives, as well as mandates or regulatory timelines for how long that main can be in operation. Mr. Abendschein said that incentives merited a lot more discussion, including the timing (now or at a certain percentage of gas sales reductions). If the City was interested in pursuing incentives, Alan Kurotori, Utilities Director, highlighted the opportunity for avoiding the big capital cost of main replacements in residential areas. When a main replacement is due, those customers could be advised about the upcoming rules and the cost savings to them and other ratepayers if everyone electrified on that block. This study will identify the benefits of block-level versus individual abandonment, including digging in 2 locations instead of digging up individual services, excavation and pavement replacement, and the avoided cost of main replacement. Mr. Kurotori acknowledged that the timeline discussion was difficult. Mr. Kurotori expressed his desire to work with the team to discuss the feasibility and identify potential areas for a pilot. Vice Chair Mauter wondered how other communities throughout the world have approached this technically, their social engagement and outreach, and lessons learned from shutting down a gas utility. There have been energy transition landmark cases, so Vice Chair Mauter stressed Utilities Advisory Commission Minutes Approved on: November 5, 2025 Page 5 of 13 the importance of having a firm understanding of the legal risks. It was helpful to understand the need for incentives versus unilateral decisions by the City and Utility. The opportunity for avoided infrastructure could help to fund an incentive. Mr. Abendschein assured the Commission that the City Attorney worked very closely with staff. The California Public Utilities Commission has had proceedings with gas utilities that included planning for heavy levels of electrification. Staff and the City’s attorneys were tracking decommissioning pilots. Mr. Abendschein recently spoke with a consultant doing an analysis in Australia. Staff had not sought out international examples but Mr. Abendschein said there were other folks they could talk to and the City had a good network of Sister Cities. Commissioner Croft asked if this study will be done internally or put out to bid for a consultant. Commissioner Croft hoped some of the learnings from past studies could be used for this study but the scenarios were different. The 2021 study had 3 endpoint scenarios (2 for 2030 and 1 for 2025) whereas the current study had scenarios for percentage reduction. Commissioner Croft wanted this study to include an analysis of costs over time. Commissioner Croft echoed Commissioner Metz’s suggestion of using this analysis to develop an electrification plan. Commissioner Croft noted a large percentage of new construction putting in gas stoves and believed the City’s plan should address how to change people’s desire to have gas. Commissioner Croft saw Redwood’s instructions on how to electrify your house and they had an induction cooktop loaner program, which she suggested Palo Alto could try now to encourage people with an upcoming construction project to make the transition. Mr. Abendschein said there were 3 consultants. One consultant helped with building the system model and was still under contract but staff now handled the system model internally. Another contractor with deep analytical capabilities was looking at available equipment and running simulations of different levels of electrification and its effects on main abandonment. Another consultant with a rate background was helping with financial planning. Mr. Abendschein viewed this study as a continuation of the previous study. The previous study analyzed where we were at that point, in 2030 without significant electrification, and if all single-family areas were electrified and there were significant reductions in multifamily and commercial gas use but did not consider people continuing to have 1 or 2 gas appliances. If a lot of the gas system infrastructure could be retired, the rates were very similar to what they would have been in 2030 if you were maintaining a smaller gas system. The previous study did not include what would happen between the beginning point and endpoint, whether or not costs decline quickly and if there will be a gap in covering costs if revenues decline quickly, which this study will analyze. The 2026-2027 S/CAP work plan included piloting electrification approaches and programs that could be scalable to the entire community, the regulatory approaches that could be used, and outreach to make people aware of their options. This study in conjunction with the 2026-2027 S/CAP work plan represent a plan for action for the entire community on driving electrification and how to respond as it starts to affect the gas utility. Mr. Abendschein would have to verify if Acterra still had an induction cooktop loaner program locally, and agreed it was an important component to helping people electrify. Utilities Advisory Commission Minutes Approved on: November 5, 2025 Page 6 of 13 Commissioner Gupta asked the following questions. What progress has been made toward meeting the goal of 44 percent reduction in single-family residential gas use by 2025 mentioned in a table of electrification scenarios on Page 4 of the 2021 report? Do we capture and use data to see how it might help with costs or is the data sample too small? Will the study provide mapping to depict what blocks might be best to begin electrifying; perhaps color coding the priorities with red, yellow, and green? Is it possible to model the holdout problem? Can we model cost with a sensitivity analysis of 10, 20, 30 percent customers per block refusing transition? There may be a natural disincentive for holdouts because the cost allocation will be greater for the remaining customers as more folks disconnect from the gas system, which should lead to more customers wanting to disconnect. When studies are presented to the Commission and Council, Commissioner Gupta wanted to see an assessment of the social cost or cost avoidance. For example, the EPA estimate of the social cost of carbon is $190 per ton of carbon dioxide emissions. Based on the 2021 report numbers, Commissioner Gupta estimated that electrifying all single-family homes would avoid 9 million therms, which could represent $9 to $11 million per year in avoided social damages. Can the current study’s output metrics include miles of main retired per year, overall cost reductions in maintenance costs, and climate cost avoided? Commissioner Gupta noted Table 4 on Page 8 of the 2021 analysis projected a 17 percent system average rate increase in FY 2025 with a mid-transition bulge, which disproportionately impacted multifamily homes and small businesses. Can the rate impact be modeled by customer class and income level under a few different rate designs to address equity concerns? What is the relationship between this study and our electrification goals, and how does it relate to grid modernization? The 2020 study estimated $30 million to $75 million of electric grid upgrades needed for electrification of single-family residents because several transformers were overcapacity. Will this study inform the approach on grid modernization? Is the core gas network defined as the 86-mile skeletal system modeled in the 2020 report? Does this study relate to Palo Alto’s approaches on building codes and its effect on the City’s electrification goals? For example, even if there are gas appliances, require new constructions or remodels to place 220 volt outlets behind the stove and dryer or for an EV charger. Has staff looked at PG&E’s Gas Asset Analysis tool to see what information was used to build that tool? Ithaca, New York has a Green New Deal initiative aiming for 100 percent electrification. Commissioner Gupta offered to email a list of studies to staff. Mr. Abendschein addressed Commissioner Gupta’s questions. The scenarios on Page 4 of the 2021 report arrived at 44 percent by taking a straight-line approach from 2021 to 2030. The 2021 report was completed before S/CAP developed climate goals. As climate goals were developed, it was understood that instead of a straight line it would be an S-curve with not many early adopters, followed by significant acceleration, and then people at the end who will not get off gas without a big push. Mr. Abendschein did not have the number of current residential gas users with him but recalled 3 percent of homes had no gas, and 6 percent verified but as many as 10 percent have at least 1 major all-electric appliance, which was a significant improvement from the 2020 study where 168 homes had no gas. Mr. Abendschein Utilities Advisory Commission Minutes Approved on: November 5, 2025 Page 7 of 13 thought the data was not statistically significant yet but was helpful to validate the models in the gas transition study and to provide a base level of information for analyses on the electric side. Knowing the location of all-electric homes in addition to the AMI data for those homes will help with the electric utility’s capacity planning. Mr. Abendschein explained that identifying the best blocks to electrify was mainly driven by pipe materials and size. For about the next 20 years, the materials on the gas replacement list were typically PVC pipe and steel. It was important to look at the maintenance requirements for steel when considering block electrification. Some locations have been identified for block electrification pilots. Palo Alto has a network system and certain lines were backbones running through the neighborhoods and therefore have less potential for a block electrification pilot or early targeting. Mapping will done to identify the remaining lines and quantify the amount of possible gas main abandonment in higher electrification scenarios. Some customers will want to disconnect because of higher costs. The likelihood of people disconnecting once their major appliances are electrified is unknown because it is too early in the process to have enough statistical data. This analysis will provide an understanding of the value obtained by raising the likelihood to disconnect. This study will answer how much additional gas main abandonment we could get by using incentives, programs, outreach, recognition, or price signals to influence more people to electrify. If funding can be found, policy decisions need to be made about mitigating some of the impacts of rising gas rates on customers and for who we want to control gas rates. This study will address what the finances will look like, what the sales are, and the allocation to different customer classes. Numbers for avoided social damages could be included for informational purposes. Mr. Abendschein will have to think about Commissioner Gupta’s rate design question. The model will see how different sectors within the community might be disproportionately affected and identify options for mitigation. Climate cost avoided is less of a focus for this study but some information could be provided for context. Overall cost reductions and maintenance were the primary output measures. This study will not put timelines on anything but some estimates could be made of the average number of miles of line that are able to be retired over the Monte Carlo simulations for the 20, 40, 60, and 80 percent scenarios. This study is focused on gas but there is another study focused on the electric side. Mr. Abendschein did not have a precise definition for the core gas network but it tended to be the larger-diameter gas mains. PG&E had a branching system whereas Palo Alto had a system that went from higher-diameter mains running through the city like a skeleton and then gradually down to lower-diameter mains. Inputting some of the higher electrification scenarios into the system model will tell us whether the simulations were trying to disconnect higher-diameter mains that are needed to keep the system functioning during the transition. Regarding Commissioner Gupta’s question about the Reach Code, Mr. Abendschein stated this study was about responding to the electrification the community chooses to engage in. The 2026-2027 S/CAP work plan being developed with the Sustainability Committee will focus on how to affect and speed up the electrification rate. Mr. Abendschein welcomed Commissioner Gupta’s offer to email information on the studies he found. Utilities Advisory Commission Minutes Approved on: November 5, 2025 Page 8 of 13 Commissioner Phillips was supportive of the scope of this study but had the following concerns and questions. Imposing increased costs on a smaller set of people will result in a tremendous burden and at some point becomes unviable. Palo Alto was the smallest gas utility in California at 24,000 customers, with the next largest being the City of Long Beach with 500,000 customers. What decisions have to be made and what are the options? Is it technically and economically feasible to have a gas utility with 15,000 customers spread across Palo Alto’s geography or will it require an infusion from the General Fund or other sources of funds? Commissioner Phillips was very concerned about the social justice aspect because the people impacted cannot afford to transition. Is there was a way to combine with PG&E to avoid having a tiny group of customers bear the City’s fixed cost for gas? Has anybody else gone from the scale of Palo Alto’s gas utility to 20 percent or 40 percent over a 5 or 10-year period, and what was their experience? Mr. Abendschein stated the preliminary results of the S/CAP funding study showed electrification was a net benefit for the community overall, which included the loss of gas utility revenue but did not include distribution cost savings within the gas utility. There will be savings from not buying gas commodity from outside the city. Around 60 percent of costs are variable in the gas utility. The gas transition study will assess the scale of the impact from massively declining gas sales. Staff expected that outside funds and a plan was needed on how to handle the cost of abandonment, especially when it starts getting to the tail end. Broader discussion and a policy decision were needed on which groups or if all groups within the community will we hold gas rates steady and for what purposes. The legal and financial dimensions needed to be considered. Early indications from the S/CAP funding study were that there were available resources and potential solutions. Mr. Abendschein did not have examples of shutting down a gas utility but shutting down other utilities and large infrastructure could be looked at as models of a stream of revenue that dried up at a certain point, such as landfill closings and decommissioning nuclear power. Commissioner Phillips said that decommissioning a nuclear reactor was part of a much broader utility system, and every nuclear decommissioning he saw had underestimated costs often by a factor of 2. Commissioner Phillips was concerned about underestimations with regard to gas. Commissioner Phillips offered to talk offline with Mr. Abendschein about other approaches. Mr. Abendschein mentioned that the work plan and S/CAP funding study will include funding sources. There will be sensitivities around the cost estimates. Mr. Kurotori commented that the City was making investments and maintaining the gas system in accordance with all state and federal requirements. The recent CPUC audit of our system was clean. The gas transition study will provide options and alternatives as well as awareness of potential pitfalls. ACTION: No Action Utilities Advisory Commission Minutes Approved on: November 5, 2025 Page 9 of 13 ITEM 3: Recommend that the City Council Approve Amendment No. 1 to the Memorandum of Agreement Between California Alternative Energy and Advanced Transportation Financing Authority and City of Palo Alto to Extend the Term of the Agreement from Two Years to Five Years and Continue Offering the GoGreen Home Energy Financing Program for Palo Alto Residents Public Comment: None. Shiva Swaminathan, Senior Resource Planner, delivered a presentation. The ability for Palo Alto residents to access consumer loans for electrification and efficiency projects was critical in meeting greenhouse gas reduction goals. In September 2023, the City Council approved a 2- year agreement with CAEATFA. To date, 1 loan for $25,000 had been processed for a heat pump space heating project for a Palo Alto resident with a good credit rating at an interest rate of 3.98% for a term of 2½ years. Staff recommended extending the CAEATFA agreement for 3 additional years with an unchanged budget of $300,000. The budget was anticipated to provide loan guarantees for up to $2 million in loans. Jonathan Abendschein, Assistant Director of Sustainability Climate Action, explained that when this agreement was put in place 2 years ago, staff anticipated the whole-home electrification program would start quickly but the program launch was delayed to this year. Staff has seen a significant increase in number of higher-cost projects since the launch of the whole-home electrification program, which were the type of projects this GoGreen Home Energy Financing Program was intended to serve. The first GoGreen loan occurred within a couple months of launching the whole-home electrification program. The proposed extension of this agreement will allow sufficient opportunity to determine whether it is a potential solution for financing over the longer term. Alan Kurotori, Utilities Director, reviewed the previous UAC discussion about this program and noted the initial request was for a 5-year contract but it was decided to start with a 2-year contract and staff would bring information on the administrative costs back to the UAC. The initial contract was several tens of thousands of dollars to start and then an ongoing monthly cost; however, the administrative costs were relatively small because there have not been many loans. The 15 percent coverage for the risk of loan defaults was reduced by more than half because the level of defaults was not as high as anticipated. Mr. Kurotori felt there was not a huge risk in continuing this program. The funding source was from natural gas Cap and Trade funds, which were restricted funds that could be used for these types of customer programs. Commissioner Croft was in support of staff’s recommendation. Commissioner Croft wondered how robust the list of GoGreen contractors was, and if contractors had issues with submitting proposals and waiting until the end to be paid. Mr. Abendschein heard feedback that those were aspects of the program that contractors were less than excited about. The City’s full-service contractor signed up with GoGreen. Utilities Advisory Commission Minutes Approved on: November 5, 2025 Page 10 of 13 Mr. Swaminathan replied there were about 100 contractors serving Santa Clara County. With a 4% interest rate and $2 million but only 1 loan for $25,000, Mayor Lauing, Council Liaison, wondered if customers were not aware of this loan program. Mayor Lauing advised staff that Council might question continuing this program if there was only 1 loan in 2 years. Mr. Swaminathan said people were aware of this loan program because outreach was done on an ongoing basis and it was promoted through our customer programs. Mr. Abendschein explained that the advanced heat pump water heater pilot program had dedicated on-bill financing. Some promotion was done for the GoGreen loan program. People going through our rebate process for whole-home electrification are notified of the GoGreen program. Customers can look for certified contractors on the GoGreen website. There have not been incentives for larger projects until recently, so staff recommended extending this agreement instead of cutting off the program before getting a sense of how well it can work. ACTION: Commissioner Metz motioned to recommend that the City Council approve Amendment No. 1 to the Memorandum of Agreement between the California Alternative Energy and Advanced Transportation Financing Authority and the City of Palo Alto to extend the term of the agreement from 2 years to 5 years, and continue offering the GoGreen Home Energy Financing Program for Palo Alto residents. Commissioner Gupta seconded the motion. The motion carried 5-0 with Vice Chair Mauter and Commissioners Croft, Gupta, Metz, and Phillips voting yes. FUTURE TOPICS FOR UPCOMING MEETINGS ON October 1, 2025 AND REVIEW OF THE 12- MONTH ROLLING CALENDAR Commissioner Metz was interested in the Big Beautiful Bill and changes in renewable tax credits, and stressed the importance of scheduling the grid modernization strategy and data center competitiveness. It had been said that data centers could help lower or level our costs but the press had been reporting that rates were going up around the country because of growth in data centers, so this was an urgent issue. Competitiveness suggests we are competing for that business whereas Commissioner Metz thought the issue was that other customers do not get negatively impacted by the addition of data centers, especially stranded assets. Alan Kurotori, Director of Utilities, reported that staff went to D.C. with NCPA and other member agencies earlier this year. Staff had been tracking the summaries of the Big Beautiful Bill, and how it will impact the Utility and our customers. A legislative and regulatory update as well as incorporation of potential updates to the guidelines will be provided to the UAC in Utilities Advisory Commission Minutes Approved on: November 5, 2025 Page 11 of 13 November. A fellow working for the City was developing a white paper on data centers, and it will be scheduled as soon as staff is available to review it. The City had a strong process in working with businesses to make sure they pay their fair share of the capacity increases necessary to serve their needs. For example, Tesla funded a lot of the Hanover substation improvements and Tesla partnered with the City on the improvements to the distribution substation serving all customers. The Tesla contract included protections on their ramp rate and use to insulate customers from potential revenue loss or stranded assets. The grid modernization strategy will be scheduled as soon as possible but included looking at our distribution system serving our residential customers, analyzing our 60 kV subtransmission system and capacity needs, substations, the useful life of existing transformers and breakers and standardizing them, and how we can do distribution ties to increase reliability and resiliency. Commissioner Croft wanted the electricity resource plan agendized on a regular basis to see the forecasted needs, what contracts were rolling off, what was the gap we needed to fill, and what the Utility was doing to fill the supply gap. Mr. Kurotori said the Aypa energy storage agreement gave a snapshot of our projections. Staff was actively working with NCPA and going through another procurement process and RFP for solar, battery, and other resources. The budget process will include growth projections that will inform our future needs. Mr. Kurotori will look into how this topic can be added to the calendar. Commissioner Gupta asked if a fiber update was agendized for the next UAC meeting, and if a report on the fiber pilot will be given in January 2026. Commissioner Gupta asked if a vote on the will be scheduled for a future meeting. Mr. Kurotori said the fiber update will possibly be in the October Director’s Report, and at that point he will have better information on any modifications to the timeline. The fiber update will be an agenda item if it is a more detailed update or if the UAC chooses a more active discussion. The Utility substructure installation contracts will go to City Council in October. The UAC needed to create a budget subcommittee ad hoc, so Mr. Kurotori will put it on the list to start those discussions. COMMISSIONER COMMENTS and REPORTS from MEETINGS/EVENTS Commissioner Gupta reported the Gas COSA Subcommittee met with staff on August 14 and August 26. The next meeting was scheduled for September 23. The gas COSA was scheduled for review by the full UAC on November 5. On August 26, Commissioner Phillips represented the UAC at a meeting of board and commission chairs and vice chairs with Mayor Lauing and Vice Mayor Veenker. Among the issues discussed was the lack of feedback to the UAC on its decisions, motions, and discussions. For example, Electric Time-of-Use Rates, Connection Fee Updates, and the Gas Cost of Service Utilities Advisory Commission Minutes Approved on: November 5, 2025 Page 12 of 13 Analysis were addressed by the Finance Subcommittee meeting last night but the UAC was not aware what came out of that discussion. Commissioner Phillips wondered if there was a better process to keep the UAC informed, and to make sure the Finance Committee and City Council had full advantage of the UAC’s recommendations and consultations. Mayor Lauing, Council Liaison, recalled a UAC meeting where commissioners told staff they wanted more direct feedback on what Council accomplished, so the Assistant City Manager started to include it in the Director’s Report. The UAC could decide whether to assign a UAC Commissioner to attend the Council and Finance Committee meetings every time there was a substantial UAC recommendation or subject. Because of the complexity of their items, the PTC attended Council and Finance Committee meetings. If the staff report was sufficient and there was nothing additional Council needed to know, the Council does not call on the PTC Commissioner. Therefore, a commissioner could be at a Council meeting for 1 or 2 hours but not be called on. It was acceptable for the UAC Commissioner to tell Mayor Lauing if they wanted to address the Council. Commissioner Phillips invited fellow commissioners’ thoughts on whether this should be discussed as an agenda item at a future meeting. Commissioner Gupta commented that Chair Scharff, Commissioner Tucher, Commissioner Gupta, the Director, and staff discussed ways to improve reporting out. Commissioner Gupta felt it was worthwhile to agendize a discussion item in the future and make some recommendations on improving the process. Commissioner Croft agreed. Vice Chair Mauter believed it would be helpful to have a discussion about how this Commission wanted to operate and represent but substantive issues should be defined with a high bar. Council Members look at UAC minutes and understand the issues. Vice Chair Mauter wanted to see this as Council requesting the UAC’s additional input and representation. Mayor Lauing was open to hearing the UAC advise on any issue. Alan Kurotori, Utilities Director, will look into scheduling a discussion but the earliest would be at the December meeting. Commissioner Croft attended the Climate Working Group meeting earlier today, where discussion included emergency revisions to the Reach Code and upcoming NOx standards for people replacing their water heaters. One emergency revision was to try to get people to move over to heat pump heating units when changing out their air conditioning units. Renovation or addition projects of 1000 square feet or more needed to meet a point system on efficiency or greenhouse gas emission reducing changes and updates to the house but an emergency revision would exclude this requirement if it was over 20 percent of the project cost. On Friday, the Climate Working Group Committee will address the Reach Code revisions and discuss ideas on incentives to help people upgrade to a heat pump water heater instead of other low NOx Utilities Advisory Commission Minutes Approved on: November 5, 2025 Page 13 of 13 options such as electric resistance heating or electric tankless water heaters that we do not want people to use. Commissioner Gupta attended the MSC Open House and reported it was a wonderful and educational event, and highly recommended attending it next year. The MSC Open House offered rides on a line truck and there was free soft serve ice cream. Commissioner Gupta learned about our stormwater management and saw it visually in a model display. Commissioner Phillips did not attend this year’s MSC Open House but attended the 2 previous years and agreed it was a great event. ADJOURNMENT Commissioner Metz moved to adjourn. Vice Chair Mauter seconded the motion. The motion carried 5-0 with Vice Chair Mauter, Commissioners Croft, Gupta, Metz, and Phillips voting yes. Meeting adjourned at 7:55 p.m.