Loading...
HomeMy WebLinkAboutStaff Report 2505-4712Approval of the Minutes of the Utilities Advisory Commission Meeting Held on April 2, 2025 Item No. . Page 1 of 1 Utilities Advisory Commission Staff Report From: Alan Kurotori, Director of Utilities Lead Department: Utilities Meeting Date: June 4, 2025 Report #: 2505-4712 TITLE Approval of the Minutes of the Utilities Advisory Commission Meeting Held on April 2, 2025 RECOMMENDATION Staff recommends that the Utilities Advisory review and approve the April 2, 2025 minutes. Commissioner ______ moved to approve the draft minutes of the April 2, 2025 meeting as submitted/amended. Commissioner ______ seconded the motion BACKGROUND The draft Minutes from the April 2, 2025 UAC meeting have been resubmitted to the UAC for review and approval, with the addition of the proposed amendments (Attachment B). ATTACHMENTS Attachment A: 04-02-2025 UAC Minutes Attachment B: Proposed Amendments AUTHOR/TITLE: Alan Kurotori, Director of Utilities Staff: Kaylee Burton, Utilities Administrative Assistant Utilities Advisory Commission Minutes Approved on: Page 1 of 38 UTILITIES ADVISORY COMMISSION MEETING MINUTES OF APRIL 2, 2025 REGULAR MEETING CALL TO ORDER Vice Chair Mauter called the meeting of the Utilities Advisory Commission (UAC) to order at 6:00 p.m. Present: Chair Scharff, Vice Chair Mauter, Commissioners Croft, Gupta, Metz, Phillips, and Tucher Absent: None Vice Chair Mauter announced that Chair Scharff may be joining remotely later. The clerk called roll. AGENDA REVIEW AND REVISIONS None ORAL COMMUNICATIONS There were no public comments. APPROVAL OF THE MINUTES ITEM 1: ACTION: Approval of the Minutes of the Utilities Advisory Commission Meeting Held on March 5, 2025 Vice Chair Mauter invited comments on the March 5, 2025, UAC draft meeting Minutes. Commissioner Croft commented that the water letter stated that the drought happened every hundreds of years, but it should have read hundreds of thousands of years, which was on Page 18 of 27. ACTION: Commissioner Philips moved to approve the draft minutes of the March 5, 2025 meeting as submitted. Utilities Advisory Commission Minutes Approved on: Page 2 of 38 Commissioner Metz seconded the motion. The motion carried 7-0 with Chair Scharff, Vice Chair Mauter, Commissioners Croft, Metz, Phillips, Gupta, and Tucher voting yes. UNFINISHED BUSINESS None UTILITIES DIRECTOR REPORT Kiely Nose, Interim Utilities Director, delivered the Director's Report. She stated that Council had successfully gone through the 2025 Council Priority Objectives and Committee Objectives and work plans. The final list had not been approved and would return on consent, but they had set the goals and objectives. The City had hired 4 new Utilities employees in the Electric Operations Division. There were still positions open and others at various stages in the recruitment process. The department currently had 45 vacancies, which was good news. She provided information related to the Gas Main Replacement Project 24B moving locations. They expected the project to last about 6 weeks. The Utilities team had begun the annual walking and mobile leak surveys, which was routine. The walking survey would cover the southern section of Palo Alto. She provided an update on the Gas Utility Federal Grant, which had been awarded to the City. The City received a new contract from the Federal government on the grant, which staff was reviewing and any necessary actions would be brought to the UAC upon completing the review. The State legislative committees were reviewing bills for this year’s legislative session, and staff was tracking SB 282 and 540, which she detailed. A number of details related to upcoming events could be found at cityofpaloalto.org/[inaudible 18:14]. On April 12, there would be a Landscape Conversation 101. The City of Palo Alto Earth day would be on April 22. On May 1 there would be a facility managers meeting for key account customers. Commissioner Tucher asked how the search for the director was proceeding and the process for the interim director, which he wanted monthly updates on. He asked if staff was satisfied and impressed with the choice of candidates and if there were good recruits for the Electric and the Director positions. Ms. Nose answered that they were nearing the final steps to recruit the assistant director over the Utility’s Electric operations and the engineering team. She expected to announce something at the next UAC meeting. They were in the interview stage for the Utility’s Director, and she expected that it would be another month or two before there would be any additional information. As for the choice of candidates and recruits, she noted that it would be inappropriate for her to speak about personal transactions publicly. They had ran competitive recruitment processes, so a lot of attention and engagement had been attracted. Commissioner Gupta inquired if staff had an initial gut reaction as it related to the Gas Utility grant. Utilities Advisory Commission Minutes Approved on: Page 3 of 38 Ms. Nose replied that they did not has a gut reaction at this time. There were new T’s and C’s referencing some of the new executive orders, so they needed to look at the details of the orders, the contract terms, and State law and reconcile all obligations. NEW BUSINESS ITEM 2: Approval of Chair and Vice Chair to Serve a Short Term of April 2, 2025 through April 1, 2026 ACTION 6:45PM – 6:55PM Vice Chair Mauter asked for motions to nominate a chair for the term. Commissioner Croft asked if the selection could be pushed to the future to remedy the situation of 2 commissioners being past their terms now. Mayor Lauing discussed why that made sense, and he suggested moving it to the next meeting. Commissioner Philips queried if procedurally the terms of Chair Scharff and Vice Chair Mauter needed to be extended to do that. Mayor Lauing responded that the terms of Chair Scharff and Vice Chair Mauter did not need to be extended. Commissioner Philips moved that this Item be moved to the next meeting. Commissioner Gupta seconded the motion. Commissioner Tucher questioned why it was called short term. Mayor Lauing responded that it was always a 1-year term and that a person could run again and again. Commissioner Tucher seconded the motion. Motion carried 7-0 ACTION: Item 2 was moved to the next meeting. ITEM 3: Staff Recommend the Utilities Advisory Commission Recommend that the City Council Adopt a Resolution Approving the FY 2026 Gas Utility Financial Forecast and Reserve Transfers, the Natural Gas Cost of Service and Rate Study, and General Fund Transfer. And Amending Rate Schedules G-1 (Residential Gas Service), G-2 (Residential Master-Metered and Commercial Gas Service), G-3 (Large Commercial Gas Service), and G-10 (Compressed Natural Gas Service) ACTION 6:55PM – 7:55PM Utilities Advisory Commission Minutes Approved on: Page 4 of 38 Lisa Bilir, Senior Resource Planner, displayed a slide summarizing the median bill projections. She noted that some of the rate increases were substantial, which staff did not take lightly. The proposals were the result of a detailed analysis balancing costs, safety, and maintenance risks. A Cost-of-Service Study had been completed in February, which led to significant increases for residential rates, particularly at the median usage levels, so staff was presenting an option for a 1-time climate credit, which she elaborated on. The overall system average rate increase would be 5 percent in FY2026, which would begin in July 2025. She outlined some of the drivers for the increase. They expected a Federal grant of $16.5M, which would in large part fund a main replacement project, Number 25. There would be a General Fund transfer of 18 percent of 2024 gross revenue, which was estimated at $9.735M in 2026. Since December, the gas increase had been reduced to 5 percent in this proposal, although the COSA meant a higher increase for the residential and large commercial customers. She furnished a chart comparing the amount of revenue that would be recovered in each of the categories based on the 4-year average in 2026 to what would be needed in 2026 to cover the estimated cost in the different categories and slides showing the costs and revenues for the Gas Utility and the Operations Reserve for the Gas Utility. She discussed the gas cost of service methodology. Prop 26 stated that gas and electric rates must represent the cost of service, and rates could not be established based on policy goals unless they were cost based and rates could not be phased in. She presented a slide focusing on the gas bill comparisons for residential and nonresidential customers as a way to represent the overall impact of the Cost-of-Service Study. She mentioned that the summer baseline usage for the seasonal rate would go from 20 to 23 therms for a 30- day billing period. Utilities Advisory Commission Minutes Approved on: Page 5 of 38 not been able to review the COSA until after the meeting. The 22-percent increase in the median residential rates seemed excessive. The subcommittee wanted to find a way to limit that, but they had not converged on the best way to do it. Staff had presented an option, which was the Cap-and-Trade alternative, which had not been uniformly supported by the subcommittee, so they wanted to bring it to the UAC. The other possibility would not do much to replenish reserves and the third possibility was to recommend and do a smaller transfer to the General Fund. The second and third possibilities would impact residential and commercial rates through COSA. He understood that COSA was more or less fixed and there might be some ability to give guidance for future cost-of-service allocations. He did not know if the $16.5M Federal grant was on track. Utilities Advisory Commission Minutes Approved on: Page 6 of 38 COSA. If the UAC did not agree with coding the General Fund transfer allocation, for example, he asked if such pieces could be returned to the consultant to obtain a revised rate schedule. Utilities Advisory Commission Minutes Approved on: Page 7 of 38 would be allocated. She opined that the best course of action would be to explore methodologies that might address some of the concerns when doing the next COSA. However, the concerns could not drive the COSA. Utilities Advisory Commission Minutes Approved on: Page 8 of 38 Vice Chair Mauter understood that a Cost-of-Service Study was an effort to equitably split the pie. It would be unfair to any customer class if the rates did not reflect the cost a customer class was imposing on the system. Utilities Advisory Commission Minutes Approved on: Page 9 of 38 Ms. Dailey answered that the revenue from Cap-and-Trade was the result of free allowances allocated to the Gas Utility as a compliance entity under the Cap-and-Trade Regulation. The State had restrictions on spending the money, and Council had adopted a list of allowable activities to use the money on, which not much of had been spent. Council preferred to use the funds for greenhouse gas reduction activities, but it could legally be returned to the customers on a nonvolumetric basis, and it could be returned to one customer class and not all customer classes, so money could be directed to just the residential customers who would feel the rate change more than others. She added that it was a use Council had approved. The full Cost-of- Service Study would be adopted this year, and it would be in place until the event of another Cost-of-Service Study. Staff’s proposed alternative was a 1-year credit that would be accompanied by encouragement to electrify. Council could decide to continue/increase/decrease a climate credit in future years. Staff was not presenting that alternative today and they were addressing next year, but it did not preclude using that money in the same way in future years. Utilities Advisory Commission Minutes Approved on: Page 10 of 38 Alan Kurotori, Utilities Chief Operating Officer, added that Cap-and-Trade for investor-owned utilities received about 98 percent of all Cap-and-Trade for natural gas. Besides compliance, the funds were used for residential climate credits. They programmed in for a long-term view for Council to consider a balance of the use of the money for S/CAP goals and to consider helping customers given the larger increase for the first year. The UAC and Council could recommend continuing the credit if desired. Utilities Advisory Commission Minutes Approved on: Page 11 of 38 stated that a $3.5M increase was expected in the Cap-and-Trade reserves this year, and she queried how much of that would be proposed to be spent. Utilities Advisory Commission Minutes Approved on: Page 12 of 38 Commissioner Metz questioned if there was a specific number moved. Vice Chair Mauter replied that there was not yet a specific number. She asked if there were questions on use of the General Fund and, if so, she requested a motion on a specific number to propose. She asked how last year’s proposal to reduce to 14.5 percent had been arrived at. Ms. Bilir detailed how the 14.5 percent gross gas revenue had been arrived at last year. Council had adopted the 14.5-percent transfer for FY2025 and had directed that in the future it return to 18 percent. Ms. Dailey recalled that staff had recommended a more gradual ramp to the full 18 percent and that Council did not adopt it. Vice Chair Mauter asked if there were questions related to the gas transfer. Commissioner Tucher remarked that there was strong opposition in the community to the structure in general, and he inquired how this would be defended. Commissioner Philips replied that the taxpayers voted for it. Commissioner Gupta commented that it would be useful to recommend to Council something lower than the full 18 percent, particularly given the high increase in gas prices for residents. He moved to maintain the 14.5 percent from last year, although the number could be amended. Commissioner Metz inquired what the 1-percent payout would equate to in terms of percent in increase in gas rate for residential. Commissioner Philips was not that interested in reducing commercial rates over where they would go with COSA. He expressed why he would probably not support a reduction. Although in general and in principle, he was against the tax on gas to support the General Fund. Chair Scharff was disappointed that Council had not followed what the UAC had recommended. He somewhat associated his comments with Commissioner Philips. He did not support the motion. Vice Chair Mauter invited a motion, which could be discussed. Commissioner Gupta motioned to recommend that Council keep the General Fund transfer to 14.5 percent. He thought the Cap-and-Trade allocation recommended by UAC would be a 1- time allocation, so it would not avoid the issues in the coming years. Holding the General Fund transfer to 14.5 percent might help with gas rates longer term. Commissioner Tucher seconded the motion. Utilities Advisory Commission Minutes Approved on: Page 13 of 38 Motion: Keep GF Transfer to 14.5%, Commissioner Gupta moved Commissioner Tucher seconded the motion Commissioner Croft expressed that in general she did not support subsidizing gas from the General Fund. She only supported the Cap-and-Trade Reserve use for this purpose just to decrease hardship. Going forward, she thought the cost should be accepted and that perhaps it would incentivize people to electrify. She spoke of why she was disappointed that the fixed costs (not the usage costs) were going up. Commissioner Philips clarified that it was not a subsidy but a reduced tax. The Cap-and-Trade was subsidized. Vice Chair Mauter thought that the motion to reduce the transfer would further reduce bills for some customer classes and handicap the ability to use the transfer argument next year to further smooth rates going forward. She would not support the motion. Motion did not carry 3-4, Chair Scharff, Vice Chair Mauter, Commissioners Croft and Phillips voted no Vice Chair Mauter noted that she was looking for a motion to recommend to Council staff’s modified recommendation (Version 2) approving FY2026 Gas Utility. Commissioner Phillips moved to recommend to Council staff’s modified recommendation (Version 2) approving FY2026 Gas Utility. Commissioner Metz seconded the motion. Motion carried 5-1, Commissioner Gupta voted no, Commissioner Tucher abstained. ACTION: Recommend to Council staff’s recommendation approving FY2026 Gas Utility financial forecast, as modified to provide a one-time credit, of approximately $1.6M that would be spent from the Cap and Trade reserve, to the G1 customers on their bills. Break 7:50 p.m. Return from break 8:04 p.m. ITEM 4: Staff Recommends the Utilities Advisory Commission Recommend that the City Council Adopt a Resolution, Approving the FY 2026 Electric Financial Forecast, including Transfers, Amending Rate Schedules E-1 (Residential Electric Service), E-2 (Residential Master-Metered and Small Non-Residential Electric Service), E-2-G (Residential Master-Metered and Small Non Residential Green Power Electric Service), E-4 (Medium Non-Residential Electric Service), E-4-G (Medium Non-Residential Green Power Electric Service), E-4 TOU (Medium Non-Residential Utilities Advisory Commission Minutes Approved on: Page 14 of 38 Time of Use Electric Service), E-7 (Large Non-Residential Electric Service), E-7-G (Large Non Residential Green Power Electric Service), E-7 TOU (Large Non-Residential Time of Use Electric Service), E-14 (Street Lights), E-16 (Unmetered Electric Service), E-EEC-1 (Export Electricity Compensation), and E-NSE-1 (Net Metering Surplus Electricity Compensation) ACTION 7:55PM – 8:40PM Utilities Advisory Commission Minutes Approved on: Page 15 of 38 outreach events. They provided a way for customers to communicate with them on a 2-way system, which she explained. Engagement with the local media was very effective, so their goal was to engage with media representatives. Utilities Advisory Commission Minutes Approved on: Page 16 of 38 not, and staff did not know where that was exactly, but they were looking at those scenarios closely. ACTION: The staff recommendation was moved. ITEM 5: Review and Recommend Utilities Advisory Commission FY 2025 – 2026 Work Plan for City Council Approval ACTION: 8:40PM – 9:30PM Utilities Advisory Commission Minutes Approved on: Page 17 of 38 Vice Chair Mauter confirmed that it was Work Plan topics 3, 4, 5, and 7. Commissioner Philips did not understand the proposal, and he asked what the advantage would be to doing this instead of what staff had proposed. Vice Chair Mauter stated that the proposal was to modify the language of the standing topics as opposed to adopting a subset or all of the 14 proposed topics submitted by commissioners. Commissioner Croft discussed why she had taken the approach she did. Commissioner Gupta found the approach to be efficient as long as there would not be a later argument that somehow a Work Plan that had been proposed was not included, other than the 4 exceptions. Chair Scharff found that it made it much cleaner and manageable. Kiely Nose, Interim Utilities Director, was not sure of the best approach. However, she felt there was a high likelihood for conflict in the future if taking the high-level approach, which she explained. She was not recommending going through a line-by-line list, but there were serious projects on the list of 14, outside of the 4 identified as exceptions, that would require a significant amount of resources and attention. She added that they were not in line with current direction from Council. She thought those items questioned whether to divert resources in those areas. She was concerned there may be tension in the coming 12 months due to not having the bandwidth to extensively discuss the 10 additional items. She explained that her department was in transition and that they were constrained in taking on new projects. As an example, Item 2, purple pipe, would be a new initiative to reinstate work. They did not have staff dedicated to data center competitiveness. She added that there were others. Vice Chair Mauter stated that several commissioners had not previewed Commissioner Croft’s modifications, and she suggested that they be displayed for the Commission. If there was general consensus to move forward with the modification to the existing standing topics, rather than the addition of new topics, then the proposed list could be used as an opportunity to discuss what the Commission wanted to agendize in the future, what staff did not have the capacity to handle, a Work Plan that may not align with the recommended direction of the Utility itself, and what there would not be time for in this year. She asked the Commission if that was a fair approach. Commissioner Metz wanted to see the list [inaudible 2:47:30]. Vice Chair Mauter stated that Commissioner Croft’s list was a modification of the existing standing topics. Modifications were noted in red, and the brackets indicated where she and Commissioner Croft believed some of the items submitted as proposed topics were being addressed. She suggested the Commission go through the proposed topics to ensure that they Utilities Advisory Commission Minutes Approved on: Page 18 of 38 would all be addressed, and she noted that displayed on the screen was how they would be represented. Utilities Advisory Commission Minutes Approved on: Page 19 of 38 Chair Scharff wanted to address each of those 5 items and decide whether they would be included. Vice Chair Mauter strongly agreed. She wanted to address all of them so it would be understood where they would be addressed in the revised language. The 5 that staff was suggesting not be included could be addressed first and then the others could be addressed in order to revise language to standing topics or determine if a separate topic would be needed. Ms. Nose suggested that Items 2, 3, 8, 9, and 12 be discussed and that staff work on the placement of the others. Vice Chair Mauter agreed to proceed in that manner. Public Comment Hamilton Hitchings hoped there would be strong oversight of geographic failure and residential fiber. Regarding geographic failure, he suggested partnering with Stanford, although there were also other alternatives. He discussed the City not having a monopoly on fiber. He stated that the City analysis indicated that an absolute minimum of 27 percent of all homes needed to adopt the City’s fiber service to break even, which would be hard because he understood that AT&T fiber covered 71 percent of the city and was expanding. He asked the Commission to read the University of Pennsylvania’s Municipal Fiber in the United States, a Financial Assessment by Christopher Yoo. He stated that he had AT&T fiber and loved it. Vice Chair Mauter declared that Topic 2 would be addressed. Commissioner Philips asked if there would be a vote on each one. Vice Chair Mauter suggested voting on each item and the Work Plan as a whole. Chair Scharff suggested that staff speak to each item first and then whoever added the item respond and that each item be voted on. At the end of the vote, staff could voice whether they had the bandwidth to do it. Ms. Nose requested that Item 12 not be specific to Stanford but to discuss the prioritization and a second transmission corridor, which was part of staff’s Work Plan. Staff would be concerned if the Commission wanted to specifically explore a Stanford interconnect. Vice Chair Mauter declared that staff would start the discussion with each of the 5 items of concern and then the Commission could discuss them. She addressed Number 2, Feasibility Study of Purple Pipe Expansion. Utilities Advisory Commission Minutes Approved on: Page 20 of 38 Karla Dailey, Assistant Director of Utilities Resource Management Division, stated that it had been studied extensively and was found to be expensive and not feasible as a water supply alternative. They wanted to focus on different types of projects moving forward. Utilities Advisory Commission Minutes Approved on: Page 21 of 38 residents across the Bay Area required accommodations, so he thought it was a significant issue and that it should be considered as a CPAU to ensure services would be available to all. Utilities Advisory Commission Minutes Approved on: Page 22 of 38 Ms. Nose stated that everyone was correct in their statements, that all things could be true, that there were nuances, that it was not one or the other, and that all helped funnel through at the direction of Council. Utilities Advisory Commission Minutes Approved on: Page 23 of 38 Mayor Lauing suggested that the UAC staff liaison talk to the HRC staff liaison to see if there was interest in addressing it. Utilities Advisory Commission Minutes Approved on: Page 24 of 38 centers to drive the business. On the other hand, the City did not have sub 10-cent electricity, which was an argument for data centers being a pie in the sky. He did not know if the City should drive hard to attract data centers or if the City would ever have the wherewithal to attract them. He wanted assessment studies and he wanted to know why those interested in data centers in Palo Alto were interested in them being in Palo Alto. Utilities Advisory Commission Minutes Approved on: Page 25 of 38 Mr. Kurotori confirmed that Chair Scharff’s proposal was feasible. They could go through the process. He had worked with several data center developers and the first question was power availability and when could it be obtained, so staff needed to do that homework in order to have effective communications. Staff could look at resources, system limitations, and if it would be of value to the City and bring it back to the UAC. Commissioner Tucher stated that when the time was right he would move to do more than just answer the question of data centers being good for consumers but to also do the market analysis. If Mr. Kurotori had had conversations with potential customers, he suggested that he summarize what he knew. He wanted to soon have an agenda item on what was known about data centers, specifically the market potential and how it would affect consumer rates. Commissioner Gupta expressed that Commissioner Tucher’s proposal was adequate to vote on. Vice Chair Mauter remarked that she had heard 2 things – a market analysis and the impact on consumers as a separate agenda item and whether it would be a separate Work Plan item could be debated later. Chair Scharff had heard from staff that they would be amenable to determining whether data centers would make financial sense and the impact on rates and that they did not have time to do the broad process outlined on the screen. He felt that Commissioner Tucher wanted to make a motion to do the broad process. Commissioner Tucher responded that he did not want to do the broad process but just the market analysis, which may be summarizing what the Utility team already knew. He wanted to understand the demand potential for data centers. Chair Scharff questioned if staff had concerns with broadening it to what Commissioner Tucher voiced. Mr. Kurotori replied that staff could support determining whether data centers would make sense. In terms of market availability, a consultant may be needed, which they saw as a separate item. He wanted to answer first whether it would make sense and, if so, then bring it back to the UAC to do the next step of the market analysis. Commissioner Tucher wanted to know what potential customers had voiced to Mr. Kurotori or others, which should not require additional market research. Chair Scharff noted that there should be a vote. He thought it would be fine to put data center competitiveness in the Work Plan and for staff to tell the UAC at some point during the year whether data centers would raise or lower residential rates and at what megawatt levels it would make sense and not make sense, and after gathering that information, the UAC could Utilities Advisory Commission Minutes Approved on: Page 26 of 38 determine whether staff should hire a consultant, etc. He would support that if that was what staff was referring to. Utilities Advisory Commission Minutes Approved on: Page 27 of 38 understood the water supply and the wastewater. He wanted to do testing to be able to consider new information as it came in. He noted that a lot of the infrastructure upgrades were introducing plastic components in the water and wastewater lines and there was growing science with respect to that. He wanted to get in front of the issues and understand them before they potentially became an expensive concern. Utilities Advisory Commission Minutes Approved on: Page 28 of 38 Vice Chair Mauter took a vote to recommend that proposed Topic Number 9 be adopted in the Work Plan. Commissioner Gupta clarified that it would not include wastewater. Vice Chair Mauter stated that wastewater was not in the domain of the UAC. She voiced that following the accessibility recommendation, there could be a discussion with the Public Works liaison. Mr. Zucca would be happy to interface with Public Works and report back. Vice Chair Mauter took a straw vote on Work Plan Item Number 9, Microplastics and Forever Chemicals in Water Supply and Wastewater. A yes vote would indicate a desire for the distinct Work Plan as currently presented. If voting no, Commissioner Croft’s recommendation would move forward to include the water quality component only into the standing topic. She declared that there was 1 yes vote, so it would not be on the Work Plan for this coming year in distinct form but water quality would be included in the oversight of the Water Utility. She moved to Number 12, Stanford Interconnection. Ms. Nose suggested moving straight to a straw vote. Staff had suggested changing the language of Commissioner Croft’s proposal to read second transmission corridor instead of reading second transmission line. Commissioner Croft’s language was furnished on the screen. Vice Chair Mauter requested that the second transmission line be modified to read second transmission corridor. Commissioner Metz, as one of the authors, addressed the second transmission line/corridor. He was amenable to including it with the insertion of specifically the Stanford corridor. He discussed the important technical reason for doing that. He wanted to explicitly consider the option of [inaudible 4:04:45]. Vice Chair Mauter disclosed that she was a faculty member at Stanford and at SLAC where the interconnect laid, so she had a potential conflict. She announced that she would not vote, but she thought she could still Chair. Commissioner Croft questioned why the Stanford item was strongly [inaudible 4:05:56]. Mr. Kurotori replied that the Stanford item had been pursued for about 10 years with Stanford. The item had been returned to Council in terms of not being able to move forward, and it pivoted to looking at a second transmission corridor in connection with CAISO, so they had done some studies and they were moving forward. They hoped it would be scheduled to go to the CAISO in the next month or so and that they would have good information to bring back. The study gave diversity in terms of the connection points, which he elaborated on. Utilities Advisory Commission Minutes Approved on: Page 29 of 38 Chair Scharff stated that staff had been talking with Stanford for at least 20 years and Council had looked at it, and there was no deal to be had for years. It would be great to get a deal with Stanford, but it did not appear that it would happen soon. He commented that it should not be a separate callout. If the situation changed, he thought staff would address it. He expressed it would be great to get a second line and that staff was already working on it. Mr. Kurotori stated that it could be brought back into the 1-year time frame of the Work Plan. Vice Chair Mauter called for a straw vote. A vote of yes would maintain the Item Number 12 proposal as it was. A no vote would support using the language in Commissioner Croft’s revisions to the existing Work Plan. Commissioner Gupta noted that he was one of the authors of the Work Plan. He had looked into the timing of negotiating with Stanford, and it seemed that they suffered a fairly major power outage afterward. He remarked that maybe it did not need to be a dedicated callout. He suggested that staff reach out again to see if there was any interest on Stanford’s side. Ms. Nose replied that staff would be happy to raise the UAC’s interest with the Stanford liaison. Other than that, she did not see any further work being fruitful. Vice Chair Mauter called for a hand vote. A vote of yes would be for a separate dedicated work plan. A no vote would move forward Commissioner Croft’s specific highlighting of a second transmission corridor. Commissioner Metz thought the first option was to have a callout within the language of the Croft document. Vice Chair Mauter asked if it was adequate. Commissioners Metz, Croft, and Gupta answered that it was adequate. Vice Chair Mauter withdrew Item Number 12 and declared that a vote would not be held. She stated that 9 other items were submitted as discrete proposed topics, and the majority of those had been included in Commissioner Croft’s revisions with the exception of Items 3, 4, 5, and 7. She noted that 3 had already been covered. She requested that staff comment on Item 4, Regional Collaboration on Water Supply. She stated that staff had not provided guidance on their sense of resource adequacy within staff employee time and/or interface between this proposed recommendation and the role of [Rosqua 4:13:09] and Council. Ms. Nose stated that it could not be worked in because it was part of the work underway, which she explained. Staff would be forwarding to Council the work done by the UAC last month, and she thought that accomplished the step that the UAC could make at this time in alignment with what short term 6 through 12 was. To go beyond that work, she thought the Utilities Advisory Commission Minutes Approved on: Page 30 of 38 path direction the UAC had given to staff would be important, but otherwise that was why staff had said it was underway and why the UAC had taken the initial steps. Utilities Advisory Commission Minutes Approved on: Page 31 of 38 Ms. Nose answered that staff would likely do the analysis off cycle and return to the UAC for discussion, and then the UAC could choose to do an off-cycle rate change or roll it into the coming year. Commissioner Philips inquired if it would be a rate or a policy change. Ms. Nose replied that it could potentially be both. They could remove the dates. Chair Scharff understood that staff would do the work and that the UAC would vote on it at some point and possibly ask Council that people pay their own credit card fees. It made sense to add this separately since staff would do the work anyway, but he was not opposed to putting it in the way it had been done. Vice Chair Mauter wanted to take a straw vote, and she asked for expressions of strong opinions either way prior to the vote. Commissioner Gupta supported including it separately because it seemed to be a quick win and it was already being done. Vice Chair Mauter stated if it was to be included separately that it would be important to look at the language already in the Work Plan. In its current form, it suggested that it would be implemented in the next 3 to 6 months, although staff stated it was not feasible and, as a result, it was not possible to do the medium-term goal. She needed a proposal to revise it or to move forward with Commissioner Croft’s language. Chair Scharff proposed to revise it. He moved that it say staff would return and give an analysis with the necessary information to make a recommendation to Council that customers using credit cards pay their own credit card fees. Commissioner Philips argued for including it. It seemed unusual to have it singly called out. Chair Scharff agreed. He wanted it to return to the UAC. Vice Chair Mauter declared that it would be included. She trusted that staff, the Chair, and Vice Chair would make sure it would be agendized. She moved to Item 7, Federal Issues and Collaboration. Ms. Nose noted that it was Topic 7 in the UAC’s Work Plan. Vice Chair Mauter stated that it was specifically duplicated. She thought what the commissioners submitted contained more color. She requested that staff comment on the feasibility and appropriateness of the specific action items. Utilities Advisory Commission Minutes Approved on: Page 32 of 38 Ms. Nose thought the additional information proposed was helpful feedback for staff to consider in the Federal and State legislative advocacy efforts. However, she thought it dipped into the operations of how business was done as opposed to the outcome, which was monitoring major federal items as they came down. A legislative session with the UAC may be helpful. She felt the topic as previously written was specific enough for the policy level work the UAC should do. metrics affecting City decision instead of details affecting City decision, which she elaborated on. She suggested using the higher-level one and staff filling out some of the additional details in the item to Council. Utilities Advisory Commission Minutes Approved on: Page 33 of 38 Ms. Nose stated that staff had 2 minor edits to what was before them. They would remove the second white section on the far right related to recycled water and the purple pipe. Ms. Nose suggested, under Reliability, Resiliency, and Adaptation under the CIP projects, that it specify that the emergency preparedness would be an emergency preparedness plan for Utilities as it would not be under the UAC’s purview to do the broader citywide EOC. Utilities Advisory Commission Minutes Approved on: Page 34 of 38 estimated cost to define different approaches. He thought staff planned to address all the items on the list but probably not on that timeline, at least not until there was more resolution of what the future system would look like and what the cost of it would be. It would be helpful to remove the time line. Utilities Advisory Commission Minutes Approved on: Page 35 of 38 Commissioner Croft stated that she submitted the Time of Use rates suggestion. She suggested subsuming it. She voiced that it could read “Electric” Time of Use rates. She was interested in withdrawing Number 10. Utilities Advisory Commission Minutes Approved on: Page 36 of 38 how they would fit into the broader context of the organization, and the areas of risks that further investments needed to be made in. Utilities Advisory Commission Minutes Approved on: Page 37 of 38 Commissioner Croft stated that it may warrant its own item, but she was concerned about being too specific in what was being asked for, so she wondered if the topic could be generalized as a separate item if subsuming it did not call it out enough. ACTION: Item 2 [inaudible 3:06:38]. Item 3 was withdrawn and the respective representatives would be in touch. While agendizing data centers, it would not include a separate data center competitiveness item in the Work Plan. Work Plan Item 9 would not be on the Work Plan in distinct form for this coming year, but water quality would be included in the oversight of the Water Utility. Item Number 12 was withdrawn. Item 4 would not move forward. Item 5 would be included and return to the UAC. Item 7 was withdrawn. Staff would add a standing topic item related to Fiber Utility, and metrics from the pilot would be included to decide whether to move forward. Item 1 passed as a distinct Work Plan item. Numbers 10 and 11 were withdrawn. Regarding Topic 13, measures of success would be added to Commissioner Croft’s language. Item 14 [____ 5:05:48]. The Work Plan was completed. Review of the Gas Utility and Fiber had been added, and many of the existing standing topics had been substantially revised. The UAC unanimously voted to approve the final plan. FUTURE TOPICS FOR UPCOMING MEETINGS ON (May 7, 2025) AND REVIEW OF THE 12 MONTH ROLLING CALENDAR COMMISSIONER COMMENTS and REPORTS from MEETINGS/EVENTS Utilities Advisory Commission Minutes Approved on: Page 38 of 38 ADJOURNMENT Vice Chair Mauter moved to adjourn. Chair Scharff seconded the motion. The motion carried 7-0 with Chair Scharff, Vice Chair Mauter, Commissioners Croft, Gupta, Metz, Phillips, and Tucher voting yes. Meeting adjourned at 11:00 p.m. ACTION: Regarding the Utilities Advisory Commission FY 2025-2026 Work Plan (Agenda Item 5), the following outcomes were determined for the proposed topics: • Work Plan Topic 1 (Long-term Natural Gas Utility Strategy): This topic passed as a distinct Work Plan item, with modifications to remove specific dates and ensure alignment with SCAP goals; sta> was given editing liberty while preserving the topic's intent. • Work Plan Topic 2 (Feasibility of Purple Pipe Expansion): This topic was eliminated by vote after discussion. • Work Plan Topic 3 (Universal Access): This topic was withdrawn by the submitter with the understanding that UAC and Human Relations Commission (HRC) liaisons would discuss the topic’s appropriate placement. • Work Plan Topic 4 (Regional Coordination on Water Supply): This topic was withdrawn by the submitter, as recent UAC e>orts had addressed much of its intent. • Work Plan Topic 5 (Credit Card Fees): This topic was subsumed into the revised Annual Budget standing topic, with the understanding that sta> would conduct an analysis and the item would return to the UAC for discussion. • Work Plan Topic 6 (Fiber Utility Pilot Review): This topic was approved to be a new standing Work Plan topic; the language will include 'metrics' for evaluating the pilot program to inform the City's decision to move forward with a full rollout. • Work Plan Topic 7 (Federal Issues and Collaboration): This topic was withdrawn by the submitter, with the understanding that a legislative session with sta> would occur to cover these matters. • Work Plan Topic 8 (Data Center Competitiveness): This topic will be addressed via a future agenda item but was not added as a separate Work Plan item; it was subsumed under the revised 'Electric system and supply' standing topic. • Work Plan Topic 9 (Microplastics and Forever Chemicals): This topic will not be a distinct Work Plan item. Its water quality aspect was subsumed into the revised Water Supply standing topic. Sta> will interface with Public Works regarding the wastewater aspect and report back to the UAC. • Work Plan Topic 10 (Time of Use Rates): This topic was withdrawn by the submitter and its focus on electric time of use rates was subsumed into the revised Annual Budget standing topic. • Work Plan Topic 11 (Demand-Side Management): This topic was withdrawn by the submitter and subsumed into the revised Reliability, Resiliency, and Adaptation standing topic, with its detailed points to inform future discussions. • Work Plan Topic 12 (Stanford Interconnection): This topic was withdrawn. It is understood to be covered under the 'second transmission corridor' language within the revised Electric System and Supply standing topic, and sta> will raise UAC interest with the Stanford liaison. • Work Plan Topic 13 (Emergency Preparedness): This topic was subsumed into the revised Reliability, Resiliency, and Adaptation standing topic. The four measures of success outlined in the original proposal for this topic will be added to the revised standing topic's language to guide future discussions. • Work Plan Topic 14 (Grid Modernization Strategy): This topic was subsumed into the revised 'Electric system and supply' standing topic, which includes grid modernization. The FY 2025-2026 Work Plan was completed. As noted, new distinct standing topics for the Long-term Natural Gas Utility Strategy and the Fiber Utility Pilot Review were added, and many of the existing standing topics were substantially revised to incorporate other proposed items. The UAC unanimously voted to approve the final revised Work Plan.