HomeMy WebLinkAboutStaff Report 9022City of Palo Alto (ID # 9022)
City Council Staff Report
Report Type: Action Items Meeting Date: 3/19/2018
City of Palo Alto Page 1
Summary Title: 2018 Utilities Strategic Plan
Title: Approval of the City of Palo Alto Utilities 2018 Strategic Plan
(Continued from February 26, 2018)
From: City Manager
Lead Department: Utilities
Recommendation
Staff and the Utilities Advisory Commission (UAC) recommend Council approve the 2018
Utilities Strategic Plan (Attachment A).
Executive Summary
Over the past year, staff has been actively engaged with internal and external stakeholders in
updating its strategic planning document with a renewed focus on its strategic direction and
specific actions and/or initiatives to be carried out by staff over the next three to five years.
The proposed 2018 Utilities Strategic Plan (“Strategic Plan”) is intended to achieve the City of
Palo Alto Utilities’ (CPAU) mission to provide safe, reliable, environmentally sustainable and
cost effective services.
Four high priority focus areas were identified related to workforce, internal and external
stakeholder collaboration, technology, and management of finances and resources. These four
priorities reflect the needs of the organization and customers and transformation of the utilities
industry. Multiple strategies and tactical actions were developed to effectively meet each
priority. Collectively, these priority focus areas along with the Utilities’ mission statement,
strategic direction, strategies, actions and key performance indicators (KPIs) make up the 2018
Utilities Strategic Plan.
The goal of the Strategic Plan is to ensure maximum alignment between C PAU’s resources and
activities with the City Council’s policy direction and to guide CPAU in successfully advancing
the City’s vision and priorities over the next three to five years. The Strategic Plan is not
intended to be an exhaustive list of the activities undertaken by staff on a day-to-day basis to
provide electric, natural gas, water and fiber services to its customers, but rather a plan to
focus on key challenges and priorities. Approval of the Strategic Plan is necessary to provide
CPAU with a cohesive roadmap to better meet the needs of its community, customers and
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employees now and in the future. Staff will provide the UAC and Council annual updates of the
strategic plan including status of actions and/or initiatives, KPI metrics, and recommended
changes. Attachment B provides an overview presentation on the 2018 Utilities Strategic Plan.
Background
On July 18, 2011, Council approved the 2011 Utilities Strategic Plan (Staff Report #1880).
Council updated the Strategic Plan through approval in August 2013 (Staff Report #3950) and
May 2015 (Staff Report #5709). The latest performance report to the UAC on the 2011 Utilities
Strategic Plan is provided in Attachment C, Reference #1.
Recognizing that several internal and external factors have significantly changed since staff last
went through an extensive strategic planning process in 2011 and that the utility industry
continues to increase in complexity, staff felt the necessity to develop a new Strategic Plan
rather than an update of the existing plan. As such, in early 2017, staff began the process to
develop the 2018 Utilities Strategic Plan (“Strategic Plan”).
Staff retained the consulting services of NewGen Strategies and Solutions to facilitate the
development of the Strategic Plan including internal and external stakeholder engagement;
identification of strengths, weaknesses, opportunities and threats; and the development of
strategies, actions and key performance indicators. BluePoint Planning was also retained to
coordinate employee engagement which included an in-depth assessment of employee needs
and concerns. BluePoint also assisted in identifying values to better reflect the CPAU’s
organizational cultural and to align with the City’s stated values and will assist in the
implementation of certain elements of the Strategic Plan.
A core planning team comprised of over 25 CPAU employees representing various functions
and levels throughout the organization was formed to develop the Strategic Plan to address
various dimensions of utilities and to confer with the larger staff throughout the process.
Multiple meetings were held with employees, UAC, key customers and community advocates to
both inform of the process and solicit input.
Throughout the development process the UAC provided input through regular UAC meetings
and at a special UAC meeting held in October 2017, used to get broad community feedback.
Workshop participants were given an opportunity to speak directly with staff and UAC
members regarding the department’s mission, strategic direction and on the four priority areas.
The UAC and City Council discussed related issues in joint session on November 27, 2017.
Staff presented a draft of the Strategic Plan to the UAC in December 2017 and returned on
January 18, 2018 for approval. The UAC had a number of comments and revisions and as such
asked staff to return in February 2018 with a revised version of the Strategic Plan (see
Attachment C, Reference #2). Staff returned to the UAC at its meeting on February 7, 2018,
with specific follow-up to the prior UAC discussion (Attachment C, Reference #3). After a
motion made by Commissioner Trumbull and seconded by Commissioner Johnston, the UAC
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unanimously voted 5-0 to recommend the City Council approve the Strategic Plan (with
Commissioners Ballantine and Danaher absent).
Discussion
The proposed Strategic Plan is significantly different from t he 2011 strategic plan that focused
more on maintaining and/or improving near-term operational and customer performance
measures, and less on future conditions such as infrastructure replacement, workforce
development and emerging technologies.
The new plan focuses on specific priority areas that CPAU must address to remain successful
and meet customer evolving customer needs in the rapidly evolving market and future. Key
elements of the Strategic Plan include:
1. Mission Statement;
2. Strategic Direction;
3. Organizational Culture and Values; and
4. Priority Focus Areas – Strategies, Actions and KPIs
The attached Strategic Plan provides a high level summary of the stakeholder process
undertaken to develop the plan, identification of key drivers, strengths weaknesses,
opportunities, threats and priorities along with detailed strategies and actions. The following is
a discussion of the key components of the Strategic Plan.
1. Mission Statement
The mission statement should be enduring and reflective of the manner in which core utilities
services are delivered to its customers. The current mission statement reads as follows:
The City of Palo Alto Utilities' mission is to provide safe, reliable,
environmentally sustainable and cost effective services.
Staff proposes no modifications to the current mission statement thus reaffirming the
significance of the statement in achieving CPAUs’ goals.
2. Strategic Direction
The strategic direction is an aspirational statement describing how our staff works to meet
current and future community and stakeholder needs. The proposed statement is as follows:
At CPAU, our people empower tomorrow's ambitions while caring for today's
needs! We make this possible with our outstanding professional workforce,
leading through collaboration and optimizing resources to ensure a sustainable
and resilient Palo Alto.
The statement was developed after various iterations taking into consideration input from
employees and community stakeholders. The statement is intended to reflect the balance of
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limited resources, environmental sustainability and the need to achieve core services with the
community’s desire for innovation and increasing levels of services.
3. Organizational Culture and Values
CPAU has an adopted a set of values which are intended to reflect key characteristics important
to individual employees, and if met, define the department’s culture. Additionally, the Cit y as
our overall environment has its own set of defining values, which it promotes as part of an
overall organizational culture. Through surveys and small group meetings, employees were
asked to identify specific work characteristics and values that reson ate most with them and
should be included as part of CPAU’s organizational values. CPAU’s new set of values,
represent employee feedback to supplement and align with the City’s values, as follows:
City’s Values CPAU-Specific Values
These values define CPAU’s culture, and will be promoted throughout the organization through
its actions, and expected from each individual employee. Elements of meeting the values are
included throughout the Strategic Plan.
4. Focus Priority Areas
The four priorities – 1) Workforce; 2) Collaboration; 3) Technology; and 4) Resources and
Finances are the areas necessitating increased staff focus to achieve CPAU’s current and future
goals and objectives. Strategies and tactical actions have been identified for each priority and
those to be implemented in the next 12 to 18 months are highlighted. The Strategic Plan also
includes KPIs which are intended to track performance towards each priority and such
performance will be periodically reported to the UAC and Council. Attachment A contains the
detailed strategies, actions and KPIs per priority focus area. The following is a summary of the
need for the four priority focus areas and CPAU’s needs.
Priority #1- Workforce
We must create a vibrant and competitive environment that attracts, retains, and invests in a
skilled and engaged workforce.
CPAU along with other utilities providers throughout the state and country struggle w ith
attracting and retaining a skilled workforce. For Palo Alto, this is even more complicated as the
cost of living and/or relocating to the Bay Area is among the highest in the nation. The
Workforce focus area reflects the need to improve retention and recruitment efforts to ensure
long-term CPAU has the staff and/or workforce solutions to meet its core service obligations
and customers’ expectations. The strategies and actions identified are intended to focus in the
areas of retention, recruitment, training and work-life balance needs.
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Priority #2: Collaboration
We must collaborate with internal teams and external stakeholders to achieve our shared
objectives of enhanced communication, coordination, education and delivery of services.
Delivering high quality services to customers is a shared objective across all CPAU services. To
do so in an efficient and consistent manner requires an understanding of customer and
stakeholder needs along with the ability to effectively communicate and coordinate efforts with
customers and throughout the City. The strategies and actions identified highlight certain
projects and/or initiatives requiring a high level of collaboration, such as deployment of
distributed energy resources and electrification, to effectively implement. Additional
Collaboration strategies focus on promoting a culture of collaboration and a systematic process
to ensure two-way communication with customers, within CPAU and throughout the City.
Priority #3: Technology
We must invest in and utilize technology to enhance the customer experience and maximize
operational efficiency.
The increasing convergence of technology, utility services, and customer expectations is driving
significant change in the utility markets. CPAU must embrace techn ology to further enhance
internal operations and improve efficiency in this changing market. Customer adoption of new
technology applications is also dramatically changing utility - customer interactions and
demand for services. The Technology priority in cludes implementing a technology roadmap to
effectively guide CPAU’s customer and operational technology investments and programs.
Additional Technology strategies include AMI deployment, enhancing customer interaction,
improving field operations, and training employees to ensure effective use of existing and new
tools.
Priority #4: - Financial Efficiency and Resource Optimization
We must manage our finances optimally and use resources efficiently to meet our customers’
service priorities.
Facing an evolving utility business environment, aging infrastructure needs, and sustainability
objectives CPAU must maintain a competitive position in the market. Remaining financially
sustainable and competitive in the market while optimizing resources is ke y to maintaining and
enhancing value to customers. Strategies in this Priority focus on proactively renewing and
managing CPAU’s infrastructure, continuously improving financial processes, enhancing
infrastructure maintenance programs, defining CPAU’s role in community resiliency, and
achieving sustainable energy resource and water supply plans.
Next Steps
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Once the Strategic Plan is approved, staff will develop a detailed implementation plan, and
prioritize actions and tasks to carry out the specific initiatives. Annual progress reports will be
provided on the KPIs and status of implementing the Strategic Plan.
Resource Impacts
Approval of the Strategic Plan does not result in a direct resource impact for fiscal year (FY)
2018. Implementation of specific initiatives identified as part of the Strategic Plan may have a
resource impact for FY 2019 and beyond. As additional resource needs are identified, staff will
seek UAC and Council approval as necessary.
Policy Implications
The proposed Strategic Plan works in support of CPAU’s current mission and is consistent with
Council approved policies related to the management and operation of CPAU. Approval of the
Strategic Plan will effectively replace the existing strategic plan. Staff will continue to track
existing KPIs through the end of FY 2018. The new KPIs will be included for consideration in the
FY 19 operating budget.
Environmental Review
The UAC’s support of the proposed Strategic Plan does not meet the definition of a project
under Public Resources Code 21065 and therefore California Environmental Quality Act (CEQA)
review is not required.
Attachments:
Attachment A: 2018 Utilities Strategic Plan
Attachment B: PowerPoint Presentation
Attachment C: Online References
1
ATTACHMENT A
2018 UTILITIES STRATEGIC PLAN
The City of Palo Alto Utilities (CPAU or the Utilities) provides services across the electric, natural gas,
water, sewer, and fiber industries – many of which are in the midst of substantial changes. Many of
these changes are based on shifts in business models, price trends in renewable resources, technology
adoptions, an uncertain regulatory future, evolving workforce dynamics, and increasing customer
expectations. As these trends converge, they drive significant change for utilities in the services offered
to customers and operations. This convergence also amplifies the impacts and creates the potential for
a fundamental shift in the market and eventually, customer needs.
Industry trends and changing utility business models provide both challenges and opportunities that
require periodic updates in strategic planning. To maintain operational excellence and relevancy, CPAU
periodically reviews and revises its Strategic Plan and associated strategic initiatives. Awareness of
these market drivers and trends, as well as a need to understand the potential impacts to CPAU and its
customers, was the starting point and driver for the Strategic Plan development process. While CPAU’s
Strategic Plan is routinely updated, the Utility’s Mission remains unchanged.
CPAU Strategic Planning History and Progression
CPAU’s current Strategic Plan was originally developed and approved in 2011 with City Council
refinements and updates to Performance Measures and Strategic Initiatives in 2013 and 2015. The
current plan includes four Perspectives: Internal Business Process, People and Technology, Financial,
and Customer and Community. Across the four Perspectives, there are more than 25 performance
measures or goals that are tracked and reported for Plan progress. Recognizing that several internal and
external factors have significantly changed since the last update in 2011 and that the utility industry
continues to increase in complexity, CPAU staff felt the necessity to develop a new Strategic Plan rather
than an update of the existing plan.
The proposed Strategic Plan is significantly different from the current Strategic Plan, which focuses more
on maintaining and/or improving current operational and customer performance measures. Rather
than rewriting the existing plan, the proposed Strategic Plan starts from a blank page with a focus on
defining a Strategic Destination, or ‘stake in the ground’ defining where CPAU will be in 5-10 years. The
Strategic Plan also focuses efforts on reporting and tracking progress to a more representative and
strategic set of 12 Key Performance Indicators (KPIs), rather than more than 25 performance measures.
This will include defining new or refining existing initiatives and actions to achieve the CPAU’s future
goals and objectives. Key elements of the Strategic Plan include:
Mission Statement: A formal, enduring summary to focus and direct the organization;
communicate a shared understanding of the organization's intended purpose.
Strategic Direction: Statement that provides a snapshot of where the organization should be five
to 10 years into the future.
City of Palo Alto Utilities’ Mission Statement:
To provide safe, reliable, environmentally sustainable and cost effective services
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Priority Areas: A problem, concern, challenge, or issue that the organization must address in
order to achieve its Strategic Direction.
Strategies and Actions: Strategies are the means by which the Priority is resolved, while Actions
are specific activities or tactics (achievable in approximately 12- to 18-months)
Key Performance Indicator (KPI): The means by which to measure, track, and report on
performance
Figure 1 illustrates the overall structure of the Plan and summarizes the relationship of the key elements
identified to realize the Strategic Direction and implement the Plan. While the Mission and Strategic
Direction are longer term, more enduring elements of the Plan, the Plan gets more detailed and tactical
with the Strategies and Actions. These detailed elements are focused on the near-term (e.g., one to
three years). As there are elements of the Plan that focus on the near-term, it is best practice to
periodically (e.g., every three years) refresh or update any strategic plan based on progress of the Plan
to date or significant changes in the organization or market.
Figure 1: Strategic Plan Structure and Elements
Strategic Planning Process
The planning process and development of the 2018 Strategic Plan were designed to engage staff and
stakeholders to ensure alignment with the Community and within the organization. Engaging internal
and external stakeholders throughout the development of the Plan also supports a successful
implementation.
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Stakeholder Engagement
Extensive internal and external stakeholder engagement was included in the Plan development to
ensure community and stakeholder insights were properly integrated. CPAU’s executive leadership
team invited a cross-section of employees to participate as members of the Core Planning Team (CPT) to
support the development of this Plan. The CPT was critical to the development of the Plan and will be a
key driver to the short- and long-term implementation. The CPT’s role included:
Driving the development of the updated Plan (e.g., Priorities, Strategies, Actions) through
participation in five facilitated planning meetings, completing ‘homework’ assignments, and
continued involvement to support Plan implementation.
Providing periodic communication within their broader work groups to explain the planning
process, communicate/discuss the draft elements of the Plan, and solicit feedback throughout
the process.
In addition to the internal CPAU CPT being
responsible for driving the development of the Plan,
the stakeholder engagement process included
additional employee feedback, a community
workshop, and three external stakeholder groups:
the Utilities Advisory Commission (UAC), a Utility
Stakeholder Panel, and City Management
stakeholders. CPAU’s executive leadership included
extensive organizational and employee engagement
as an early requirement of the Plan development. In
addition to the CPT, the internal or employee
engagement included:
10 group meetings to ensure employee
feedback from all levels and divisions within
CPAU.
Two “all-hands” meetings for the entire
organization communicating Plan progress and
soliciting feedback / introducing the Strategic
Direction and more tactical Plan elements.
Two large employee workshops to solicit
feedback on the Priorities, Strategies, and
Actions included in the Plan.
Including external stakeholders in the development of the Plan provided an opportunity to gain
important community feedback on CPAU’s overarching strategic direction while supporting targeted
insights in developing the Plan elements. Providing a mechanism for community engagement and
feedback throughout the planning process also helps to ensure future endorsement of the Plan.
Market Trends
As mentioned previously, one of the key drivers to developing the new Strategic Plan was recognizing
that several organizational and market trends have continued their rapid pace of change and in many
cases significantly accelerated or changed since the last update. The energy industry currently faces
many challenges and opportunities, as well as increasing uncertainty related to regulatory, resource
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availability, security, technology, sustainability, and clean energy issues. As these trends converge, they
drive significant change in the services offered to customers and operations. This convergence also
amplifies the impacts and creates the potential for a fundamental shift in the market and eventually,
customer needs. To support the development of the Strategic Direction, Priorities, and eventual
Strategies and Actions, the planning process included discussion with stakeholders of the key trends or
issues influencing CPAU’s operations, market, and customers. Highlights of the stakeholder feedback on
trends and issues included:
Aging infrastructure / renewal and replacements
Climate change, adaptation, sustainability, and resiliency
Workforce (large portion of CPAU workforce retiring in next 10 years, how to attract new staff)
Customer demands (retail customer pressure, connectivity, flexibility, unlimited options, overall
load is declining)
Community or customer collaboration opportunities (attracting new staff, technology
evaluation/adoption, energy resources)
Balancing goals, sustainability aspirations with competitive rates and affordability
Technology (CPAU operations, cyber security, big data management, Advanced Metering
Infrastructure (AMI), mobile apps/access)
California regulatory trends (CARB/Cap and Trade markets, new renewable energy requirements,
hydropower availability, efficient building codes)
Reducing regulatory barriers, more efficient regulatory process
Increased opportunities to collaborate with other City departments and external stakeholders
Distributed energy resources (DERs) (e.g. customer or commercial energy resources)
Electric vehicle opportunities or incentives
Natural gas utility and potential for electrification; stranded assets for CPAU
Water resource availability, recycling, drought, and conservation
Communicate CPAU’s value and areas of leadership to stakeholders
The market trends and issues insights from stakeholders were directly integrated into the CPT
workshops and the subsequent Priorities, Strategies, and Actions. CPAU’s Strategic Direction and Plan
will help the Utility navigate these trends while remaining effective, valuable, and cost-effective to
customers.
CPAU’s 2018 Strategic Plan
Throughout these changing times and evolving markets, CPAU’s Mission remains the same, forming the
foundation for the utility’s enduring direction. The purpose of a mission statement is to focus and direct
the organization as well as to communicate a shared understanding of the organization's intended
purpose. The 2018 Strategic Plan aligns with and further advances CPAU’s Mission.
The 2018 Strategic Plan provides an update to the efforts and initiatives outlined in the 2011 plan, taking
into consideration recent market trends, emerging priorities, and additional input from our
stakeholders. The Plan should act as the guide and context for utility resource, workforce, technology,
customer expectation, and market related decision making. The 2018 Strategic Plan provides a “line of
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sight” from the organization’s broader strategy to more day-to-day activities by staff, thus aligning the
Utilities organization with the Plan. The Strategic Direction, defining a “stake in the ground” for the next
5-10 years is the first step in providing this “line of sight” from the Mission to day -to-day activities. As
the planning process was designed to engage staff and stakeholders in its development, the following
Strategic Direction was vetted with multiple internal and external stakeholder groups.
Through the planning process CPAU also embraced its position as a department of the City of Palo Alto
by integrating the City’s values, while incorporating several attributes tailored to some of the unique
aspects of the Utilities operations and market. These values and CPAU attributes were also tested
throughout the organization and at an all-hands employee workshop. There was support for adopting
the City values and CPAU attributes along with a desire to promote a culture at the Utility that reinforces
them. Due to the level of interest and importance of the values, the Plan includes a near term Action
item to begin developing tools promoting these values by mid-2018.
City Values Adopted for 2018 Plan:
Quality | Courtesy | Efficiency | Integrity | Innovation
Tailored CPAU attributes support culture of:
Respect | Teamwork | Accountability | Reliability | Safety
The next step in the process identified the critical or core challenges that CPAU must address to realize
the Strategic Direction. These critical issues are defined as Priorities in the Plan and include:
Workforce: We must create a vibrant and competitive environment that attracts, retains, and
invests in a skilled and engaged workforce.
CPAU along with other utilities providers throughout the state and country struggle with
attracting and retaining a skilled workforce. For Palo Alto, this issue is amplified as the cost of
living and/or relocating to the Bay Area is among the highest in the nation. The Workforce focus
area reflects the need to do improve retention and recruitment efforts to ensure long-term CPAU
has the staff and/or workforce solutions to meet its core service obligations and customers’
expectations. The strategies and actions identified are intended to focus in the areas of
retention, recruitment, training and work-life balance needs.
Collaboration: We must collaborate with internal teams and external stakeholders to achieve
our shared objectives of enhanced communication, coordination, education, and delivery of
services.
Delivering high quality services to customers is a shared objective across all CPAU services. To do
so in an efficient and consistent manner requires an understanding of customer and stakeholder
issues along with the ability to effectively communicate and coordinate efforts with customers
and throughout the City. The strategies and actions identify projects and/or initiatives requiring a
high level of collaboration to effectively implement as well as promoting a systematic framework
in which to ensure collaboration within CPAU and throughout the City.
STRATEGIC DIRECTION
At CPAU, our people empower tomorrow's ambitions while caring for today's
needs! We make this possible with our outstanding professional workforce,
leading through collaboration and optimizing resources to ensure a sustainable
and resilient Palo Alto.
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Technology: We must invest in and utilize technology to enhance the customer experience and
maximize operational efficiency.
The increasing convergence of technology, utility services, and customer expectations is driving
significant change in the utility markets. CPAU must embrace technology to further enhance
internal operations and improve efficiency in this changing market. Customer adoption of new
technology applications is also dramatically changing utility – customer interactions and demand
for services. The Technology Priority includes implementing the Technology Roadmap to
effectively guide CPAU’s customer and operational technology investments and programs.
Additional Technology strategies include AMI deployment, enhancing customer interaction,
improving field operations, and training employees to ensure effective use of existing and new
tools.
Financial Efficiency and Resource Optimization: We must manage our finances optimally and
use resources efficiently to meet our customers’ service priorities.
Facing an evolving utility business environment, aging infrastructure needs, and sustainability
objectives CPAU must maintain a competitive position in the market. Remaining financially
sustainable and competitive in the market while optimizing our resources is key to maintaining
and enhancing our value to customers. Strategies in this Priority focus on proactively replacing
and managing CPAU’s infrastructure, continuously improving financial processes, enhancing
infrastructure maintenance programs, defining CPAU’s role in community resiliency, and
achieving sustainable energy resource and water supply plans.
To complete the Strategic Plan, more tactical Strategies and Actions were identified and developed to
complete the Tactical Action Plan. Strategies were developed within each Priority to resolve the issue or
challenge identified, while Actions include specific activities and tactics to implement the Strategy.
Reporting and Tracking Plan Progress
Successful strategic plans include the ability to track the Plan’s progress and report on performance
within the organization and to stakeholders. As an organization tracks performance, it can adjust
resources or the Plan, to better respond or act on Priority areas that may lag desired performance levels,
or learn from others that are exceeding expectations. KPIs are the primary tool in concisely
communicating and reporting on performance to stakeholders.
KPIs are a metric or measurable value that demonstrates how effectively the organization is achieving its
Priorities and Strategic Direction. The 2018 Strategic Plan includes 12 KPIs for periodic (e.g., quarterly)
reporting to governing bodies and stakeholders on the Plan performance. These KPIs may also be
applied and tailored throughout the organization to align CPAU divisions, work groups, and individual
contributors with the Strategic Plan. As some of the KPIs identified are dependent on new strategic
initiatives by Utilities, or include a near term completion date, they may require refinement or updating
as completed or the strategic initiatives are scheduled/completed (e.g. technology or system
implementations). The KPIs are included with each of the priorities below.
Tactical Action Plan
The comprehensive Tactical Action Plan including all Strategies and Actions by Priority is included below.
Please note, those Actions that are expected or scheduled for completion in 2018 are noted with bold,
italicized text.
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Priority 1: Workforce
We must create a vibrant and competitive environment that attracts, retains, and invests in a skilled and engaged
workforce.
Strategy 1. Establish CPAU as an organization where employees are proud to work and recruit other strong performers.
Action 1. Support pilot rollout of annual professional/journeyman individual development plans (IDP) and
rollup to department training priorities, to develop internal talent. Complete by December 2018.
Action 2. Review and expand training/education and certificate programs that emphasize mastery of trade,
profession, or management position and promote development and longevity in areas of expected need.
Complete by June 2018.
Action 3. Update Divisional Succession Plans to prepare staff for promotional opportunities and to retain
institutional knowledge within the organization (update existing 5-year succession plan). Complete by
December 2019.
Action 4. Promote a culture that reinforces City and Department values. Complete by June 2018.
Strategy 2. Create a workplace that attracts and retains skilled employees.
Action 1. Prioritize resolution of collective bargaining issues and finalize an agreement that ensures CPAU
will attract and retain high caliber skilled employees that will advance the Department’s Mission.
Complete by December 2018.
Action 2. Reduce processing time to hire new staff to ensure potential candidates are offered positions in a
reasonable time frame. Complete by December 2018.
Action 3. Support CPAU staff communication outreach in recruitment strategy for hiring utilities
employees. Complete by December 2018.
Strategy 3. Evaluate and consider alternative workforce solutions to achieve organizational business objectives.
Action 1. Create opportunities to empower and support individual employees and work groups to offer a
work-life balance through alternative work schedules or other options. Complete by December 2018.
Action 2. Determine the potential for projects and/or functions to be effectively outsourced while continuing to meet
organizational needs and objectives. Complete by December 2019.
Action 3. Consider developing a hybrid workforce of full time employees and non-benefitted staff. Complete by
December 2020.
Action 4. Create an internal labor pool from within the City to fill temporary business needs. Complete by
June 2019.
Workforce KPIs:
Reduce employee turnover rates to less than 10% by 2020 (calculated as a three-year rolling average).
90% of all CPAU positions filled/staffed on annual basis; while 100% of critically identified positions are
filled within 90 days.
100% of employees have implemented an individual development plan with updates every two years.
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Priority 2: Collaboration
We must collaborate with internal teams and external stakeholders to achieve our shared objectives of enhanced
communication, coordination, education and delivery of services.
Strategy 1. Increasing communication through active listening and engagement with the community enhances customer
satisfaction and community trust and will help us deliver programs and content based on community desires.
Action 1. Establish a routine practice of involving stakeholders on strategic projects and initiatives to
support customer satisfaction, customer choice, and program outcomes. Ongoing.
Action 2. Proactively communicate about capital improvement projects to mitigate the impacts of
construction, while maximizing public support and the allocated financial resources. Ongoing.
Action 3. Identify and develop proactive strategies and customer education that allows CPAU to support
customer needs for Distributed Energy Resources (DER), including storage, solar, EVs, energy efficiency.
Ongoing with DER plan timeline; phase 1 to be complete by December 2018.
Action 4. Partner with community stakeholders to facilitate large scale residential building electrification (beyond
rebate scale). No timeline; beginning conversations and research now.
Action 5. Enhance customer service through deployment of technology such as upgraded online bill
payment, account access system and advanced metering infrastructure (AMI). Ongoing with Utilities
technology roadmap.
Action 6. Build customer support for programs and understanding of how we provide cost-effective
services. Ongoing.
Action 7. Create interdepartmental work groups to identify and resolve ongoing workflow and priorities
involving permitting, procurement and legal. Ongoing.
Strategy 2. Strengthening coordination and integration across City departments aligns Utilities and City goals while improving
performance and efficiency
Action 1. Enhance current coordination of scheduling, synchronization and communication of capital
improvement, maintenance, operations projects and other Utilities programs and services with other
departments to improve implementation and efficiency. Ongoing.
Action 2. Explore opportunities to improve City processes, policies and information sharing that allows the
community to easily understand and implement DER opportunities such as EVs, solar, storage, energy
efficiency, and building electrification. Ongoing with DER timeline; phase 1 to be complete by
December 2018.
Action 3. Share information and opportunities across departments to expand outreach about CPAU
employment. Ongoing.
Action 4. Promote regular interdepartmental information sharing throughout the City to assist employees
understand City (and common) goals. Ongoing.
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Priority 2: Collaboration
We must collaborate with internal teams and external stakeholders to achieve our shared objectives of enhanced
communication, coordination, education and delivery of services.
Strategy 3. Fostering a culture of cooperative work within Utilities improves productivity and awareness, and understanding of
our common goals.
Action 1. Support the implementation of the Utilities’ technology roadmap with comprehensive communication of:
technological advancements and the department's short-term and long-term goals; how these advancements reflect
customer and operational needs; how projects are prioritized; and how decisions are made. Ongoing with timeline
of Utilities technology roadmap; full implementation scheduled for completion by December 2022.
Action 2. Strengthen existing tools for intradepartmental communication to ens ure transparency and
informed staff that understand the Strategic Plan and other key CPAU issues and how they directly relate to
the work of our employees. Ongoing; some tasks by April 2018 with completion of the Strategic Plan.
Action 3. Collaborate with staff involved in deployment of AMI and develop a comprehensive outreach plan
to communicate AMI and supporting technologies, impact to staffing resources, staff responsibilities, and
how the customer engagement platform operates. Ongoing with timeline of Utilities technology roadmap;
AMI full deployment scheduled to be complete by October 2018.
Action 4. Support upgrade of MUA by communicating the customer and utility operational benefits and
functionalities. Ongoing with timeline of MUA; phase 1 complete by July 2018.
Action 5. Establish intradepartmental team to evaluate and determine best practices for an outage management
system (OMS), including communication across divisions to reduce restoration time and provide customers with
more real-time outage information. Integrate with Technology S3, A4. Complete by June 2019.
Action 6. Support the workforce priorities by aligning organizational values and reiterating employee roles
within the framework of the Utilities Strategic Plan. Ongoing.
Strategy 4. Collaborating with government, trade, and regional agencies enhances our sphere of influence, allows us to
identify common ground, and leverage economies of scale.
Action 1. Continue to work with Industry/trade/regional groups (NCPA, League of Cit ies, CMUA, BAWSCA,
E Source etc.) to collaborate on shared objectives. Ongoing.
Action 2. Coordinate on regional utility programs to streamline processes, achieve mutual objectives, and realize
greater impacts. Ongoing; some tasks can be completed by December 2019.
Action 3. Communicate our public awareness efforts and resources with government agencies (DOE, EPA,
CEC, etc.) to improve public and stakeholder awareness of utility issues, programs, and shared goals.
Ongoing.
Action 4. Collaborate with educational institutions and companies to attract local candidates for CPAU positions.
Ongoing; some tasks can be completed by December 2019.
Collaboration KPIs:
Maintain 85% or higher “excellent” or “good” performance ratings in annual customer satisfaction survey.
Maintain 50% or higher level of customer awareness for customers affected by CPAU’s key programs,
incentives, and /or initiatives.
Maintain 60% or higher level of agreement regarding employees who feel they contributed and/or were
involved with CPAU projects or decisions that directly affect their roles or work.
CITY OF PALO ALTO UTILITIES STRATEGIC PLAN SUMMARY
10
Priority 3: Technology
We must invest in and utilize technology to enhance the customer experience and maximize operational
efficiency.
Strategy 1. Finalize and implement technology road map to clearly identify CPAU’s short-term and long-term goals, reflect
customer and operational needs, prioritize projects and guide decisions.
Action 1. Identify, align and prioritize customer-focused and operational technologies to improve customer
satisfaction and operational efficiency. Ongoing.
Action 2. Implement Technology Road Map including project prioritization, 10-year timeline, and co-dependencies.
2018 through 2022.
Strategy 2. Deploy AMI to increase reliability, enhance customer service, and improve response time.
Action 1. Finalize Business Case including cost and benefit analysis, scenarios, and staffing impacts.
Complete by June 2018.
Action 2. Develop AMI/MDM System Requirements to identify functional and system requirements. Complete by
June 2019.
Action 3. Evaluate Multi-Agency AMI/MDM with NCPA to pool resources, share ideas and increase purchasing
power. Complete by June 2019.
Action 4. Proof of Concept Phase to deploy 2,000-5,000 meters, install all network infrastructure, establish system
integrations, , develop future state business processes, provide testing and training, and pilot customer
engagement. Complete by September 2021.
Action 5. Citywide AMI/MDM Deployment of 73,000 electric, gas and water meters. Complete by September 2022.
Strategy 3. Invest in technology infrastructure to enhance customer engagement and satisfaction.
Action 1. Upgrade Utilities customer portal: My Utilities Account (MUA 2.0) to provide customers additional
24/7 self-services and customer information to better manage their consumption and choices. Complete by
September 2018.
Action 2. Leverage City’s mobile app (Palo Alto 311) to provide residents, businesses and visitor s more access to
City services and information. Complete by December 2019.
Action 3. Implement a Street Work Notification customer portal for long-term construction projects that may result in
traffic, parking or other impacts to neighborhoods. Complete by December 2019.
Action 4. Evaluate and upgrade Outage Management System (OMS) to reduce restoration time and provide
customers near real-time outage information. Complete by June 2019.
Strategy 4. Implement technologies to improve response time, security and operational efficiency.
Action 1. Deploy Mobile/Field Technologies (devices and software) to reduce operational costs and
improve service delivery. Complete by December 2018.
Action 2. Upgrade Customer Information/Billing System (CIS) to improve responsiveness and ensure customer
data is accurate and secure. Complete by September 2020.
Action 3. Maintain Supervisory Control and Data Acquisition (SCADA) system to ensure a safe, reliable,
and efficient distribution system. Ongoing.
Action 4. Integrate with new GIS (ESRI) to ensure accurate infrastructure information for customer service and
infrastructure improvements. Complete by June 2019.
Action 5. Ensure that CPAU systems keep pace with customer adoption of new technologies to enhance
the customer experience and choice. Ongoing.
2018 UTILITIES STRATEGIC PLAN
11
Priority 3: Technology
We must invest in and utilize technology to enhance the customer experience and maximize operational
efficiency.
Strategy 5. Ensure and empower employees with current Technologies to perform work efficiently.
Action 1. Streamline business processes to facilitate adoption of new technological solutions that improve
performance in targeted priority functions. Complete by December 2018.
Action 2. Implement continuous education and evaluation of new technology applications and related
utility trends to ensure CPAU maintains an effective, competitive, and optimal use of technology
applications. Ongoing.
Action 3. Train employees to adopt and maximize utilization of new technologies. Ongoing.
Technology KPIs:
Increase the number of MUA registered users by 10% per year and utilization by 5% per year (e.g., paying
bill, reviewing consumption, etc.).
Provide 50% of field support staff with paperless workorder and maintenance documentation tools by
December 2018 and 90% by December 2019.
100% of staff affected by new or upgraded technology receive / attend applicable training.
CITY OF PALO ALTO UTILITIES STRATEGIC PLAN SUMMARY
12
Priority 4: Financial Efficiency and Resource Optimization
We must manage our finances optimally and use resources efficiently to meet our customers’ service priorities.
Strategy 1. Establish a proactive infrastructure replacement program, based on planned replacement before failure to support
reliability and resiliency.
Action 1. Initiate a program to update data in the utility asset management system to establish
infrastructure replacement programs and support maintenance plans. Complete by December 2018.
Action 2. Develop, prioritize, and propose planned infrastructure replacement programs based on currently
available key asset information for implementation in F iscal Year (FY) 2020 and begin reporting of planned
infrastructure replacement status. Complete by September 2018.
Action 3. Establish a system of regular reporting on planned replacement progress, including management
reports appropriate to every level of the organization. First report by September 2018.
Action 4. Develop a plan to fill data gaps and ensure data accuracy identified in A1 and implement collection
process. Complete by September 2019.
Action 5. Use updated data in comprehensive asset management system and database to improve planned
replacement programs and status reporting. Start implementation in July 2020.
Strategy 2. Develop financial planning processes that provide stability and clear communication of service priorities and th e
cost of achieving those priorities.
Action 1. For FY 2019 budget process, collaborate between Rates, Admin, and Water -Gas-Wastewater
Engineering to pilot an infrastructure budget development process for one utility (Water, Gas, or
Wastewater Collection) that coordinates Capital Improvement Project (CIP) budget development with
planning for funding sources and reserves management. Complete by March 2018.
Action 2. Starting with the FY 2020 budget process, implement an integrated and replicable CIP budgeting
process with Admin, Rates, and Water-Gas-Wastewater Engineering to develop a CIP reserve and an annual
CIP contribution amount for one utility. Complete by September 2018.
Action 3. For FY 2021 budget process, expand and apply the integrated CIP budgeting process to at least one
other utility (Electric, Water, Gas, or Wastewater Collection) with remaining funds in FY 2022. Complete by
September 2019.
Action 4. In 2019, update benchmark study for one utility. Begin a process of regular benchmarking of one utility
per year going forward. Complete by December 2019.
Strategy 3. Enhance planned maintenance programs for all utilities through clearly defined maintenance plans, improved
management reporting, and developing innovative ways to ensure efficient completion of all mainte nance.
Action 1. Develop an inventory of existing maintenance programs and a reporting framework to monitor
progress. Identify areas where planned maintenance is not being completed and areas where more data is
needed to design maintenance plans. Complete by December 2018.
Action 2. Identify and evaluate asset data requirements and accuracy to develop and monitor proactive
maintenance programs and identify any data gaps. Complete by December 2018.
Action 3. Identify staffing, software, and other resources required to implement and monitor maintenance
programs, identify gaps in existing resources, identify alternative ways to implement the programs and the
costs and benefits of different approaches. Complete by September 2018.
Action 4. Establish a system of regular reporting on maintenance progress, including management reports
appropriate to every level of the organization. Provide first report by September 2018.
Action 5. As additional asset data becomes available from data collection efforts identified in S1 A1 and S1 A4,
update and improve applicable maintenance plans. Implementation to be determined.
2018 UTILITIES STRATEGIC PLAN
13
Priority 4: Financial Efficiency and Resource Optimization
We must manage our finances optimally and use resources efficiently to meet our customers’ service priorities.
Strategy 4. Achieve a sustainable and resilient energy and water supply to meet community needs.
Action 1. Work with other City Departments to establish an implementation plan through FY 2020 to
achieve the City’s carbon reduction and water management goals while assessing utility operational risks
and mitigations associated with electrification. Complete by June 2018.
Action 2. Establish and implement a Distributed Energy Resources plan to ensure local generation
(e.g. solar), storage, electric vehicles (EVs), and controllable loads (like heat pump water heaters) are
integrated into the distribution system in a way that benefits both th e customer and the broader
community. Complete by December 2018.
Action 3. Evaluate recycled water, groundwater, and other non-potable water sources and integrate the results and
outcomes with water supply plans. Complete by December 2018.
Action 4. Incorporate a review of the changing competitive landscape (such as low-cost local solar and storage, the
rise of Community Choice Aggregators, and the potential for competition and Direct Access) into routine electric
supply planning processes. Complete by December 2020.
Action 5. Adopt and implement for the Electric utility an integrated resource plan for 2018 through 2030.
Complete by December 2018.
Strategy 5. Engage stakeholders and define CPAU’s role in supporting and facilitating community resiliency.
Action 1. Engage in community outreach to identify what aspects of resiliency are important to the
community for each utility to support development of a resiliency work plan. Complete by December 2018.
Action 2. Define minimum emergency service commitments and targeted full system recovery times in case of a
major disaster(s) and communicate general guidance on recovery times to the public. Implementation to be
determined and dependent on A1.
Action 3. Develop an outreach and education program to facilitate individual customer resiliency efforts.
Implementation dependent on A1.
Action 4. Identify high priority issues that could interfere with emergency service commitments and recovery times
and develop a plan to improve resiliency in these areas. Implementation dependent on A1.
Action 5. Complete evaluation of redundant/backup transmission service to CPAU and communicate to
stakeholders. Complete by December 2018.
Financial Efficiency and Resource Optimization KPIs:
Identify/catalog 90% of critical assets or components in asset management system by 2022
Complete 80% of critical component planned replacement annually; and 90% critical component planned
maintenance annually
Maintain average (e.g. median) or below residential and commercial utility bills as compared to
surrounding utilities and communities.
CITY OF PALO ALTO UTILITIES STRATEGIC PLAN SUMMARY
14
List of Acronyms
AMI Advanced Metering Infrastructure
BAWSCA Bay Area Water Supply & Conservation Agency
CARB California Air Resources Board
CEC California Energy Commission
CIS Customer Information System
CMUA California Municipal Utilities Association
CPAU City of Palo Alto Utilities
CPT Core Planning Team
DER Distributed Energy Resource
DOE Department of Energy
EV Electric Vehicle
EPA Environmental Protection Agency
FY Fiscal Year
GIS Geographical Information System
IDP Individual Development Plan
MDM Meter Data Management
MUA My Utility Account
OMS Outage Management System
NCPA Northern California Power Agency
SCADA Supervisory Control & Data Acquistion
UAC Utilities Advisory Commission
Appendix A
Stakeholder Groups
Core Planning Team
Leadership Team
Tom Auzenne, Customer Service Richard Simms, Operations
Monica Padilla – Resource
Management/ Strategic Plan Project
Manager
Debbie Lloyd, Engineering Rick Baptist, Operations
Ed Shikada, General Manager Jimmy Pachikara, Engineering Rui Silva, Operations
Dean Batchelor, Chief Operating
Officer
Lynn Krug, Engineering Ryan Johnson, Operations
Catherine Elvert, Communications Silvia Santos, Engineering Scott Williams, Operations
Dave Yuan, Administration Heather Dauler, Legislative
Regulatory
Bruce Lesch, Resource Management
Sushma Tappetla, Administration Althea Carter, Operations Jonathan Abendschein, Resource
Management
2018 UTILITIES STRATEGIC PLAN
15
Joshua Wallace, Resource
Management
Mike Haynes, Operations Lisa Benatar, Resource Management
Crystal Jensen, Customer Service Anna Vuong, Administration Sonika Choudhary, Resource Mgmt
Utility Advisory Commission
Michael Danaher, Chair Judith Schwartz
Arne Ballantine, Vice Chair Lauren Segal
Lisa Forsell Terry Trumbull
A.C. Johnston
Utility Stakeholder Contributors
Name Affiliation
Chris Boreta
Brendan Curran
Greg Mills
Moniques Henry
Palo Alto Office Center
Stanford Health Center
Palo Alto Medical Foundation
Genencor
Ron Gawer Stanford University
Sandra Slater Cool Block & Palo Alto Forward
Steven Elliot Veterans Hospital
David Coale Carbon Free Palo Alto, Acterra, Sun Works, SV Bike Coalition
Tess Byler San Francisquito Creek
Nicholas White Merck
Ronald Sichau Stanford
Bret Anderson citizen
Sven Thesen Climate One & EV advocate
Jon Foster former UAC member
John Melton former UAC member
Citywide Management Contributors
James Keene – City Manager Lalo Perez – Administrative
Services
Kenneth Deuker– Emergency
Services
Rumi Portillo – Human
Resources
Jonathan Reichental–
Information Technology
Peter Pirnejad– Development
Services
Gil Friend - Sustainability Mike Sartor – Public Works
2018 UTILITIES STRATEGIC PLAN
Palo Alto City Council Approval
March 19, 2018
ATTACHMENT B
2
3
Overview
•Planning Effort and Engagement
•Employees
•Customers & key stakeholders
•Utilities Advisory Commission
•Key Drivers and Trends
•Challenges and opportunities
•Strategic Plan Elements
•Mission Statement and Strategic
Direction
•Priority Focus Areas
•Strategies and Actions
•Key Performance Indicators
BR
E
A
D
T
H
(
R
a
n
g
e
o
f
A
f
f
e
c
t
e
d
A
c
t
i
v
i
t
i
e
s
)
DEPTH (Specificity of Operational Impact)
CPAU Strategic Plan
Smart Grid Technology Roadmap
Recycled Water Business Plan
Gas Utility Long-Term Plan
Carbon Neutral Gas Plan
CPAU Rules & Regulations
Water Integrated Resource Plan
Distributed Energy Resources Plan
Federal/California OSHA & CPUC Orders
Electric Integrated Resource Plan
Carbon Neutral Electric Plan
Multi-Utility
Electric
Water
Natural Gas
Recycled
Color Key:
Low
Hi
g
h
High
City Budget
Labor Agreements
Strategic Planning Context: Relationship to Other Key Drivers
4
5
Strategic Planning Effort & Stakeholder Engagement
•Changes in workforce
–Retirements, succession planning and change in skill sets
–Work-life balance
•Challenges in retaining and recruiting -regional issue
–Affordable housing, commutes and interest
•Technology advancements
–Advanced metering infrastructure –“smart grid”
–Consumerization –data-driven innovation & smart homes
•Changes in how customers use/view energy
–Distributed Energy Resources –EE, DR, DG, EVs, ES
–Rate Offerings –net energy metering & time-of-use
•Resiliency –understanding and meeting expectations
•Regulatory and legislative changes
•Rising cost to deliver services
–Supply cost, transmission and transportation, reliability and capital
improvement projects
•Variable water, gas and electric sales
•Climate and sustainability goals -electrification
6
Key Drivers and Trends
7
2011 Strategic Plan
8
2018 Strategic Plan –Framework for Focusing
Mission
Statement,
Strategic
Direction,
and Values
Priority Area 1
Strategy 1.1
Action 1
Action 2
Strategy 1.2
Priority Area 2 Strategy 2.1
Strategies: Means by
which the Priority Area is
resolved
Priority Areas: issues CPAU
must address to achieve
the Strategic Destination
Long Term / Enduring Elements Short/Mid Term / Detailed Elements
9
Priority 1: Workforce
We must create a vibrant and competitive environment that attracts, retains, and
invests in a skilled and engaged workforce.
Strategies and First Year Actions:
S1: Establish CPAU as an organization where employees are proud to work and recruit
other strong performers.
A1: Develop individual development plans (IDP)
A2: Review and expand training/education and certificate programs
S2: Improve retention and recruitment efforts
A1: Finalize bargaining agreements
A2: Reduce hiring/processing time
S3: Pursue alternative work and workforce solutions
A1: Promote work-life balance solutions
Key Performance Indicators:
•Employee turnover rate < 10% by 2020 (3-yr average)
•90% of all positions filled annually; 100% of critical positions filled within 90 days
•100% of employees implementing individual development plans
10
Strategic Planning Example: Staff Development
Department-wide
staff interest in
training &
development
•Core Planning Team
discussions
•All-hands meetings &
informal input
CPT & Workforce
Team discussion of
various individual
and organizational
interests:
•Promotion
•Expertise
•Teamwork
•Succession
Piloting Individual
Development
Plans
•Communicates
interests to managers
•Allows department to
prioritize programs
and resources
•Separate from
performance reviews
Input Evaluation Outcome
11
Priority 2: Collaboration
We must collaborate with internal teams and external stakeholders to achieve our shared
objectives of enhanced communication, coordination, education and delivery of services.
Strategies and First Year Actions:
S1: Enhance community communication
A3: Targeted engagement/communication for distributed energy resources
S2: Strengthen coordination and interaction within City
A2: Improve City processing time to facilitate DER implementation
S3: Foster cooperative culture within the department
A2: Communicate Strategic Plan and key initiatives to all employees
A3: Coordinate AMI outreach plan
S4: Collaborate with outside agencies
Key Performance Indicators:
•85% or higher “excellent/good” rating in annual customer satisfaction survey
•50% or higher customer awareness for customers affected by CPAU’s key
programs/initiatives
•60% or higher employees agree they contributed/involved with decisions directly affecting
their work
12
Strategic Planning Example: Distributed Resources
Stakeholders & UAC
communicate
importance of
customer interests
in CPAU program
priorities and
design
•Market Segmentation
•Process & Financial
Barriers
Planning for
Distributed Energy
Resources provides
opportunity to
confirm customer
interests:
• Solar
•Electric Vehicles
•Battery Storage
•Smart/Efficient
Appliances
Customer surveys &
possibly focus
groups to be
conducted prior to
UAC consideration
of DER Strategy
•Customer Awareness
•In-Home Energy
Investment Priorities
•Interest & Timing
Input Evaluation Outcome
13
Priority 3: Technology
We must invest in and utilize technology to enhance the customer experience and
maximize operational efficiency.
Strategies and First Year Actions:
S1: Complete technology roadmap
A1: Engage customers and establish priorities
A2: Begin implementation of technology roadmap
S2: Deploy advanced metering infrastructure (AMI)
A1: Finalize business case
S3: Enhance customer engagement tools
A1: Upgrade My Utilities Account (MUA 2.0)
S4: Improve system operational efficiency
A1: Deploy mobile/field technologies
A3: Supervisory Control and Data Acquisition (SCADA) system
S5: Empower employees with technology
A1: Streamline priority business processes
Key Performance Indicators:
•Increase My Utilities Account (MUA) user registration by 10% and utilization by 5% each year
•Paperless tools for field support staff: 50% by December 2018 / 90% by December 2019
•100% of staff trained on applicable new or upgraded technology
14
Strategic Planning Example: Advanced Metering
UAC and
Community
Workshop
confirms interest
in expediting
implementation of
Advanced Meter
Infrastructure
Multiyear
Workplan requires
department-wide
focus and
resources to
ensure timely and
effective
implementation
Staff advancing
resource plan,
procurement, and
communication for
up to $19 million
investment
Input Evaluation Outcome
15
Priority 4: Finances and Resources
We must manage our finances optimally and use resources efficiently to meet our
customers’ service priorities.
Strategies and First Year Actions:
S1: Deploy planned infrastructure replacement
A1: Update data in the utility asset management system
A2: Prioritize planned infrastructure replacement programs
A3: Report on planned replacement progress
S2: Stabilize CIP funding
A1: Pilot an infrastructure budget development process for one utility for FY 19.
S3: Implement planned maintenance
A1: Conduct a planned maintenance needs analysis
A2: Develop and monitor proactive maintenance programs and identify any data gaps.
A3: Develop a planned maintenance implementation plan
A4: Establish and report on planned maintenance progress
16
Priority 4: Finances and Resources -continued
We must manage our finances optimally and use resources efficiently to meet our
customers’ service priorities.
Strategies and First Year Actions:
S4: Achieve sustainable and resilient energy and water supplies
A1: Assist with achieving the City’s carbon reduction and water management goals
A2: Establish and implement a Distributed Energy Resources plan
A3: Evaluate recycled water, groundwater, and other non-potable water sources
A4: Adopt Electric utility integrated resource plan
S5: Build community resiliency
A1: Assess community’s resiliency needs and develop resiliency work plan
A5: Complete evaluation of redundant/backup transmission line to Palo Alto
Key Performance Indicators:
•90% of critical assets in asset management system by 2022
•80% of critical component replacement; 90% maintenance annually
•Median or below residential/commercial bills vs. surrounding communities
17
Strategic Planning Example: Cost Containment
All Stakeholders
are concerned
with keeping
utility rates as low
as possible (while
acknowledging
competing
priorities)
Strategic Planning
raised visibility of
new cost
containment
strategies
•Electric equipment
replacement
•Water reservoir
system
•Fiber capacity
constraints
Cost issues are
addressed
throughout
Strategic Plan
•Rate benchmarking
•Complete asset
inventories
•Capital replacement
prioritization
•Communication of
rate drivers among
staff and stakeholders
Input Evaluation Outcome
18
Strategic Planning Example: Resiliency
UAC and
Community
Interest in
Comprehensive
Hazard Mitigation
•Multiple Threat
Review
•Utility-Side Actions
•Customer-Side
Options
Second Electric
Transmission Line
remains important
but may be too
narrowly focused
on single risk and
strategy
UAC Workshops
Planned to
Prioritize
Strategies
•Grid Options
•Utility Storage
•Local Islanding
•DER Standards
Input Evaluation Outcome
19
20
Next Steps
•Proceed with organizational
alignment steps
•Develop internal communication
tools –“dashboards”
•Implement tactical action plans
•Report on progress and KPIs
•Enhance communication –both
internally and externally
21
Photo Slide Bulleted Content
22
Attachment C
Online References
1.“Utilities Strategic Plan Performance Update”, Report to City of Palo Alto Utilities
Advisory Commission, March 1, 2017.
https://www.cityofpaloalto.org/civicax/filebank/documents/56116 .
2.City of Palo Alto Utilities Advisory Commission Minutes of January 18, 2018, pp 5-8.
www.cityofpaloalto.org/civicax/filebank/documents/63778.
3.“Staff Recommendation that the Utilities Advisory Commission Recommend Council
Approve the 2018 Strategic Plan”, Report to City of Palo Alto Utilities Advisory
Commission, February 7, 2018, see Attachment B.
https://www.cityofpaloalto.org/civicax/filebank/documents/63210.