HomeMy WebLinkAbout2026-03-06 Climate Action and Sustainability Committee Agenda PacketCLIMATE ACTION AND SUSTAINABILITY COMMITTEE
Regular Meeting
Friday, March 06, 2026
Community Meeting Room & Hybrid
2:00 PM
Climate Action and Sustainability Committee meetings will be held as “hybrid” meetings with the
option to attend by teleconference/video conference or in person. Information on how the
public may observe and participate in the meeting is located at the end of the agenda. The
meeting will be broadcast live on YouTube https://www.youtube.com/c/cityofpaloalto.
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1 March 06, 2026
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CALL TO ORDER
PUBLIC COMMENT
Members of the public may speak in-person ONLY to any item NOT on the agenda. 1-3 minutes depending on number of
speakers. Public Comment is limited to 30 minutes. Additional public comments, if any, will be heard at the end of the agenda.
STANDING VERBAL REPORTS
A. Staff Comments
B. Committee Member Comments and Announcements
ACTION ITEMS
1.Review and Discussion of 2026-2027 Climate Action Program Goals and Work Plan
Timelines; CEQA Status - Not a Project Late Packet Report Added
2.Grid Modernization Update; CEQA Status - Not a Project Late Packet Report Added
FUTURE MEETINGS AND AGENDAS
Members of the public may not speak to the item(s)
ADJOURNMENT
2 March 06, 2026
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PUBLIC COMMENT INSTRUCTIONS
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CLICK HERE TO JOIN Meeting ID: 853 8091 8387 Phone: 1(669)900-6833
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3 March 06, 2026
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elected official of a local government agency from participating in a proceeding involving a
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4 March 06, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas.
Climate Action and Sustainability Committee
Staff Report
Report Type: ACTION ITEMS
Lead Department: City Clerk
Meeting Date: March 6, 2026
Report #:2602-5989
TITLE
Review and Discussion of 2026-2027 Climate Action Program Goals and Work Plan Timelines;
CEQA Status - Not a Project
This item will be a late packet publication released on 2/26/26.
Item 1
Item 1 Staff Report
Item 1: Staff Report Pg. 1 Packet Pg. 5 of 24
Climate Action and Sustainability Committee
Staff Report
Report Type: ACTION ITEMS
Lead Department: City Clerk
Meeting Date: March 6, 2026
Report #:2602-5990
TITLE
Grid Modernization Update; CEQA Status - Not a Project
This item will be a late packet publication released on 2/26/26.
Item 2
Item 2 Staff Report
Item 2: Staff Report Pg. 1 Packet Pg. 6 of 24
Climate Action and Sustainability Committee
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Public Works
Meeting Date: March 6, 2026
Report #:2602-5955
TITLE
Review and Discussion of 2026-2027 Climate Action Program Goals and Work Plan Timelines;
CEQA Status - Not a Project
RECOMMENDATION
This is a discussion item; no action or recommendation is requested.
EXECUTIVE SUMMARY
At its January 9, 2026 meeting the Climate Action and Sustainability Committee (CASC)
recommended that the City Council adopt a 2026-2027 S/CAP Work Plan. This item is on the
March 2, 2026 City Council agenda. During the January 9, 2026 meeting, the CASC expressed an
interest in seeing timelines and goals for the programs. This report lists the program goals
(which staff has been developing in parallel with the budget process) and timelines for the
2026-2027 Climate Action S/CAP Work Plan items and any remaining 2023-2025 Climate Action
Work Plan items being completed.
BACKGROUND
In efforts to align with the City’s goal of reducing carbon emissions 80% below 1990 levels by
2030 (“80 x 30”), the City adopted a Sustainability and Climate Action Plan (“S/CAP”)1 to guide
actions toward achieving carbon neutrality. The S/CAP provides a comprehensive framework
for reducing greenhouse gas (GHG) emissions across municipal operations, transportation,
waste, and other environmental sectors.
In 2023, the City adopted the 2023–2025 S/CAP Work Plan, 2 which outlines specific actions
designed to advance progress toward the City’s long-term carbon reduction targets. The
1 https://www.paloalto.gov/City-Hall/Sustainability/SCAP
2 2023-2025 S/CAP Workplan, 2023;
https://www.paloalto.gov/files/assets/public/v/1/sustainability/reports/2023-2025-scap-work-plan_final.pdf
Item 1.
Item 1 Late Packet Report
Item 1.: Staff Report Pg. 1 Packet Pg. 7 of 24
workplan identifies eight primary focus areas, four of which are climate-focused and directly
support the “80 x 30” goal. At its January 9, 20265 meeting the CASC heard a progress update
on the 2023-2025 S/CAP Work Plan and recommended adoption of a proposed 2026-2027
S/CAP Work Plan.
ANALYSIS
6 for water heaters take effect January 1, 2027
as currently scheduled. It further assumes continued provision through the end of 2027 of a
comprehensive suite of services for all community members, including incentives, financing,
technical assistance, and a direct installation program option. However, staff anticipates
piloting other creative financing programs (e.g. on-bill financing, electrification as a service),
with the intent of gradually transitioning away from community-wide incentives for the heat
pump water heater component of this program as the regulation continues into its second and
third years.
FISCAL/RESOURCE IMPACT
5 Climate Action and Sustainability Committee, January 9, 2026; Agenda Item 1; SR #2507-5027,
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=18309
6 https://www.baaqmd.gov/rules-and-compliance/rule-development/building-appliances
Item 1.
Item 1 Late Packet Report
Item 1.: Staff Report Pg. 2 Packet Pg. 8 of 24
STAKEHOLDER ENGAGEMENT
3
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
Item 1.
Item 1 Late Packet Report
Item 1.: Staff Report Pg. 3 Packet Pg. 9 of 24
Attachment A
February 2026 Status Update on 2026-2027 S/CAP Work Plan Timelines and Program Goals
#Work Item Timeline (Tentative)
2026-2027 Goals
(annual rate by 2027
year end)1
2025 Results
(for comparison)
HPWH 326 200 installs, 40 rebate
projects in progress
HP HVAC 245 224 rebate application
(of which, 117 done)
Stoves 50 >20
CA1 Continue Advanced Home
Electrification Pilot Program
Extend full-service water heater program
to other home appliances in Q1 2026 to
complete comprehensive suite of
services, continue through the end of
2027
Gas
Disconnect
48 40 rebate applications
(of which, 20 are done)
CA2 Develop a Residential
Electrification as a Service or
Similar Financing Pilot for
Council Approval
Aiming for Q3 2026 or earlier program
launch, but likely Q4 2026 or Q1 2027.
Pace is partially dependent on
organizational capacity based on staffing
or alternative service delivery options and
on feasible pace of billing system
implementation.
225 financing
participants (40% of
eligible participants)
22 on-bill financing
participants (20% of
eligible HPWH
participants)
CA3 Enhanced data tracking for
home electrification
Q4 2026. Database of contact
information, building characteristics,
information or estimation of appliance fuel
source, and program participation already
in progress, continue to move forward as
staff time is available. This may involve
implementation of multiple data systems
or systems that evolve as new platforms
become available.
N/A N/A
CA4 Launch Enhanced Multifamily
EV Charging Infrastructure
Program
Launch Q4 2026 or earlier. Pace is
partially dependent on organizational
capacity based on staffing or alternative
service delivery options.
32 projects in new
enhanced program (on-
site shared or individual
charging, mobility hubs,
or on-street charging)
9 projects in existing
program
1 NOTE: The 2026-2027 goals refer to the rate of adoption staff will aim for by the end of 2027, growing programs throughout 2026 and 2027 to reach the goal. For
example, 326 HPWH per year translates into about 27 per month, so if the community was showing that rate of adoption in Q4 2027, this would represent
achievement of the goal. It does not necessarily represent the number of annual installations staff expects in 2026 and 2027.
Item 1.
Attachment A - 2026-2027 SCAP Work
Plan Timelines and Goals
Item 1.: Staff Report Pg. 4 Packet Pg. 10 of 24
1
0
5
8
5
#Work Item Timeline (Tentative)
2026-2027 Goals
(annual rate by 2027
year end)2
2025 Results
(for comparison)
CA5 Develop a Charging-as-a-
Service (CaaS) or Similar
Financing Pilot for Council
Approval
Q4 2026 or earlier. Pace is partially
dependent on organizational capacity
based on staffing or alternative service
delivery options and on feasible pace of
billing system implementation.
25% or more of projects
participating in financing
program
N/A
CA6 Continue Affordable
Multifamily Building
Electrification Incentive
Program
Ongoing. Staff has been working with
providers to prepare applications for State
LIWP program and is releasing City grant
rules in Q1 2026.
Complete 2025 pipeline
by end of 2027, which
would result in 30% of
central systems and
17% of in-unit systems
in affordable housing
developments being
electrified
Pipeline of projects
preparing to participate
in affordable housing
grant program: 12
buildings, 762 housing
units served, 11 central
water heating systems,
315 units to have in-unit
equipment electrified
CA7 Multi-Family Technical
Assistance
Timeline TBD, staff is reviewing results of
two recent CPA and NCPA RFPs before
determining whether a separate RFP is
needed
N/A N/A
CA8 Advanced Commercial Heat
Pump HVAC Program
Q4 2026 or earlier. Features will roll out in
stages, starting with revised rebate
structures, then technical assistance,
contractor lists, and with financing likely
the last feature
18 projects 11 projects in permitting,
construction, or
completed
CA9 Develop a Commercial
Electrification as a Service
pilot or Similar Financing
Pilot for Council Approval
Q3 2027 or earlier. Pace is partially
dependent on feasible pace of billing
system implementation.
15% or more of projects
participating in financing
program
N/A
2 NOTE: The 2026-2027 goals refer to the rate of adoption staff will aim for by the end of 2027, growing programs throughout 2026 and 2027 to reach the goal. For
example, 326 HPWH per year translates into about 27 per month, so if the community was showing that rate of adoption in Q4 2027, this would represent
achievement of the goal. It does not necessarily represent the number of annual installations staff expects in 2026 and 2027.
Item 1.
Attachment A - 2026-2027 SCAP Work
Plan Timelines and Goals
Item 1.: Staff Report Pg. 5 Packet Pg. 11 of 24
1
0
5
8
5
#Work Item Timeline (Tentative)
2026-2027 Goals
(annual rate by 2027
year end)2
2025 Results
(for comparison)
CA1
0
Workplace EV Charging Pilot Q4 2027 or earlier. Depends on
demonstration of viable business models
in the multi-family context (see CA4, CA5)
To be determined after
business models
developed for CA4, CA5
N/A
Item 1.
Attachment A - 2026-2027 SCAP Work
Plan Timelines and Goals
Item 1.: Staff Report Pg. 6 Packet Pg. 12 of 24
1
0
5
8
5
#Work Item Timeline (Tentative)
2026-2027 Goals
(annual rate by 2027
year end)3
2025 Results
(for comparison)
CA1
1
Launch Pilot program for
electrification of centralized
water heaters and boilers
Q1 2027 or earlier. 13 boilers 13 boilers in affordable
housing and non-
residential pipeline –
some may enter this
program
CA1
2
Establish One or More
Partnerships with Large
Commercial Facility Owners
Q4 2026 or earlier.At least one additional
partnership
Partnerships with
PAUSD and Stanford
Health Care on EV
charging
CA1
3
Develop Funding and
Financing Strategies for
Consideration
Complete modeling and present to CASC
by Q4 2026 or earlier. Tentatively
expecting first discussions of the topic in
Q2 2026.
N/A N/A
CA1
4
Regulatory Measures Develop recommended policy options for
CASC consideration in Q4 2026 or earlier
in coordination with the analysis in CA13.
Tentatively expecting first discussions of
the topic in Q2 2026.
N/A N/A
CA1
5
Carbon Neutrality Develop recommended policy options for
CASC consideration in Q4 2026 or
earlier. Tentatively expecting first
discussions of the topic in Q3 2026.
N/A N/A
CA1
6
Cost-Based Pricing of Non-
Electric Decarbonization and
Inefficient Electrification
To be considered in coordination with
CA13, integrating options into those
policy options to be developed by Q4
2026.
N/A N/A
CA1
7
Permitting, Interconnection,
and Other Barrier Reduction
Ongoing. Development of first annual
barrier reduction list by Q2 2026
N/A N/A
3 NOTE: The 2026-2027 goals refer to the rate of adoption staff will aim for by the end of 2027, growing programs throughout 2026 and 2027 to reach the goal. For
example, 326 HPWH per year translates into about 27 per month, so if the community was showing that rate of adoption in Q4 2027, this would represent
achievement of the goal. It does not necessarily represent the number of annual installations staff expects in 2026 and 2027.
Item 1.
Attachment A - 2026-2027 SCAP Work
Plan Timelines and Goals
Item 1.: Staff Report Pg. 7 Packet Pg. 13 of 24
1
0
5
8
5
#Work Item Timeline (Tentative)
2026-2027 Goals
(annual rate by 2027
year end)3
2025 Results
(for comparison)
CA1
8
Public Charging Siting and
Business Models
Q4 2027 or earlier. Depends on
demonstration of viable business models
in the multi-family context (see CA4, CA5)
To be determined after
business models
developed for CA4, CA5
N/A
Item 1.
Attachment A - 2026-2027 SCAP Work
Plan Timelines and Goals
Item 1.: Staff Report Pg. 8 Packet Pg. 14 of 24
1
0
5
8
5
#Work Item Timeline (Tentative)
2026-2027 Goals
(annual rate by 2027
year end)4
2025 Results
(for comparison)
CA1
9
Grid Modernization Ongoing. Strategy for next projects
under discussion with UAC, CASC, and
City Council
N/A N/A
CA2
0
Gas Transition Management Completion of Gas Transition Study and
discussion with UAC in Q1 2027 or
earlier, followed by discussion with CASC
N/A N/A
CA2
1
Achieve Benchmarks for
Bicycle and Pedestrian
Capital Improvement
Projects
Various dates for four projects:
South Palo Alto Bikeways pilot
construction by Q2/Q32027
Churchill Bikeway construction by end
of Q4 2026
Quarry Road Extension – plans,
specifications by end of Q4 2027
South Palo Alto Connectivity – final
report by end of Q4 2026
N/A N/A
CA2
2
Implement Micromobility
Feasibility Study
recommendations
Depends on City Council direction before
end of Q2 2026
N/A N/A
CA2
3
Traffic Signal Operations and
Multimodal Improvements
Ongoing – various projects in
coordination with transit providers, as
detailed in 2026-2027 S/CAP work plan
N/A N/A
CA2
4
Housing Element
Implementation / Land Use
Planning and Policy
Ongoing – various goals, policies, and
programs reflected in the City’s Housing
Element
N/A N/A
CA2
5
Update City’s Traffic Calming
Policy and Process
Proceeding as staff time is available, no
specified timeline
N/A N/A
4 NOTE: The 2026-2027 goals refer to the rate of adoption staff will aim for by the end of 2027, growing programs throughout 2026 and 2027 to reach the goal. For
example, 326 HPWH per year translates into about 27 per month, so if the community was showing that rate of adoption in Q4 2027, this would represent
achievement of the goal. It does not necessarily represent the number of annual installations staff expects in 2026 and 2027.
Item 1.
Attachment A - 2026-2027 SCAP Work
Plan Timelines and Goals
Item 1.: Staff Report Pg. 9 Packet Pg. 15 of 24
1
0
5
8
5
#Work Item Timeline (Tentative)
2026-2027 Goals
(annual rate by 2027
year end)4
2025 Results
(for comparison)
CA2
6
Develop and begin
implementing a City Facility
Electrification Plan
RFP issued in early 2026, proceeding
with design and bidding for projects
through 2026
Five pilot sites with 16
pieces of gas
equipment, 110 MT
CO2e per year in
emissions reductions
N/A
Item 1.
Attachment A - 2026-2027 SCAP Work
Plan Timelines and Goals
Item 1.: Staff Report Pg. 10 Packet Pg. 16 of 24
1
0
5
8
5
#Work Item Timeline (Tentative)
2026-2027 Goals
(annual rate by 2027
year end)5
2025 Results
(for comparison)
CA2
7
Electrify City vehicle fleet Ongoing – refer to vehicle replacement
schedule
N/A N/A
CA2
8
Explore the electric capacity
needs of the Palo Alto Airport
for electric aviation
Proceeding as staff time is available N/A N/A
5 NOTE: The 2026-2027 goals refer to the rate of adoption staff will aim for by the end of 2027, growing programs throughout 2026 and 2027 to reach the goal. For
example, 326 HPWH per year translates into about 27 per month, so if the community was showing that rate of adoption in Q4 2027, this would represent
achievement of the goal. It does not necessarily represent the number of annual installations staff expects in 2026 and 2027.
Item 1.
Attachment A - 2026-2027 SCAP Work
Plan Timelines and Goals
Item 1.: Staff Report Pg. 11 Packet Pg. 17 of 24
Climate Action and Sustainability Committee
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Utilities
Meeting Date: March 6, 2026
Report #:2507-5030
TITLE
Grid Modernization Update; CEQA Status - Not a Project
RECOMMENDATION
This is a discussion item and no recommendation is requested.
EXECUTIVE SUMMARY
Palo Alto’s Electric Grid Modernization Project (Grid-Mod) was developed to prepare the City’s
electric grid in anticipation of building and transportation electrification and to improve system
reliability. Palo Alto’s electric grid can be characterized as an efficient but aged system that has,
in large part, reached the end of its useful life. Some in-service equipment was originally installed
in the mid 1950’s and has served the City well over those 70+ years. However, due to both the
age of the electric system and electrification’s forecasted increased energy demands, the City’s
grid must be reconstructed and modernized to serve these higher loads while maintaining system
reliability.
To prepare for Palo Alto’s increased electric demands, it will be cost effective, at the time of
replacing legacy system components, to modernize by incorporating newer technologies,
implementing current and emerging utility best practices, and preparing for higher adoption
rates of self-generation and energy storage. However, the age and size of Palo Alto’s system
requires a large financial commitment, two to three times historical funding levels, over many
years to fully support electrification within the residential sector. The initial estimate for Grid-
Mod was approximately $300 million over a five-year period. Current staff estimates, with
distribution upgrades (local transformers and secondary) paced to match customer participation,
reach $342 million (present value) between FY 2026 and FY 2034. If all 12kV distribution upgrades
are completed before FY 2034 staff-estimated costs for Grid-Mod through FY 2034 are $443
million (present value). Staff will need to integrate these estimates into strategic discussions
regarding matching the community’s pace for electrification, how costs could vary depending on
faster or slower rates of residential electrification, and how much aging infrastructure
replacement is needed regardless of that pace. Staff does expect installation costs will follow
Item 2.
Item 2 Late Packet Report
Item 2.: Staff Report Pg. 1 Packet Pg. 18 of 24
expected inflation trends for construction costs. However, as adoption rates ramp up staff expect
to rely more heavily on contracted services that come with a higher cost than internal staff
resources.
BACKGROUND
1 indicated that to meet the 80x30 goal, the City would need, among other things,
to electrify all single-family homes by replacing natural gas equipment with efficient electric
appliances and support electric vehicle charging. The 2020 study estimated peak demands from
single-family dwellings at 8.5kW without consideration of home EV charging. When including a
single, level-2 EV charger, customer peak demands could rise to 19.5kW. Compared to historical
average peak demands of 1 to 2kW per home, residential electrification represents a significant
new demand on CPAU’s distribution system. Due to the higher expected demands, Palo Alto’s
electric system requires extensive upgrades to increase capacity while replacing aging equipment
to improve system reliability.
ANALYSIS
1 City of Palo Alto (2020), Preliminary Analysis of the Utility Costs & Staffing Impact to Electrify All Single-Family
Residences in Palo Alto
Item 2.
Item 2 Late Packet Report
Item 2.: Staff Report Pg. 2 Packet Pg. 19 of 24
Elimination of Legacy 4kV Systems While Increasing Capacity
Item 2.
Item 2 Late Packet Report
Item 2.: Staff Report Pg. 3 Packet Pg. 20 of 24
staff expects the rate of these failures to increase until the equipment is replaced. Both the
Hopkins (installed 1967) and East Meadow (installed 1955) substations are beyond their expected
life and should be reconstructed to maintain system reliability. Additionally, the Hopkins and East
Meadow substations are 4kV stations and cannot be quickly restored following a major
equipment failure. Staff are beginning the design phase to replace both Hopkins and East
Meadow substations to mitigate the risk of failed equipment while increasing system capacity to
serve the higher demands of electrified homes. Due to four-to-five-year lead times of substation
power transformers, these projects will begin the design phase in FY 2026 but will not complete
construction until FY 2030 or after. Once completed, the reconstructed East Meadow and
Hopkins substations allow offloading (transferring of customer loads to adjacent substations) the
Colorado substation to facilitate needed equipment replacements within that substation.
Item 2.
Item 2 Late Packet Report
Item 2.: Staff Report Pg. 4 Packet Pg. 21 of 24
Tentative Project Schedule
Table:1 – General timelines for key Grid-Mod Projects in support of electrification alongside estimated project costs
adjusted for inflation.
Item 2.
Item 2 Late Packet Report
Item 2.: Staff Report Pg. 5 Packet Pg. 22 of 24
Table 2: Key Grid Mod Projects and Expected Spend Rates
Table:2 - General timelines for key Grid-Mod Projects with 12kV upgrades spread out over a longer period but tied
directly to residential customers speed to install efficient electric appliances. Estimated project costs adjusted for
inflation.
FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
th, 2026.
During the meeting the UAC generally showed support to align the pace of distribution system
reconstructing with the pace of Palo Altans’ adoption of electrification. The Commissioners noted
that the slower pace will help maintain lower electric rates which ultimately supports fuel-
Project Description FY2026 FY2027 FY2028 FY2029 FY2030 FY2031 FY2032 FY2033 FY2034
Sub-Transmission Reconductor
4kV Substation Conversions
Colorado Substation Upgrades
Adobe Creek Substation Upgrades
Colorado 12kV Substation Upgrades
4kV Distribution Conversions
Grid-Mod 12kV Distribution Upgrades
Grid-Mod Estimate Costs w/ inflation
($ Millions)$15.65 $36.54 $37.11 $24.71 $39.81 $59.89 $85.73 $58.80 $32.17
Item 2.
Item 2 Late Packet Report
Item 2.: Staff Report Pg. 6 Packet Pg. 23 of 24
switching. UAC Commissioners noted that this approach will require closely tracking and
matching the speed of residential building permits related to electrification. Commissioners
further noted that it will be important to support the implementation of S/CAP initiatives and
any resulting programs that ramp up fuel switching.
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
Item 2.
Item 2 Late Packet Report
Item 2.: Staff Report Pg. 7 Packet Pg. 24 of 24