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HomeMy WebLinkAboutStaff Report 2405-30261.Approval of the Minutes of the Utilities Advisory Commission Meeting Held on May 1, 2024 Item No. 1. Page 1 of 1 Utilities Advisory Commission Staff Report From: Dean Batchelor, Director Utilities Lead Department: Utilities Meeting Date: June 3, 2024 Staff Report: 2405-3026 TITLE Approval of the Minutes of the Utilities Advisory Commission Meeting Held on May 1, 2024 RECOMMENDATION Staff recommends that the UAC consider the following motion: Commissioner ______ moved to approve the draft minutes of the May 1, 2024 meeting as submitted/amended. Commissioner ______ seconded the motion. ATTACHMENTS Attachment A: 05-01-2024 DRAFT UAC Minutes AUTHOR/TITLE: Jenelle Kamian, Program Assistant I Utilities Advisory Commission Minutes Approved on: Page 1 of 9 UTILITIES ADVISORY COMMISSION MEETING MINUTES OF MAY 1, 2024 REGULAR MEETING CALL TO ORDER Chair Scharff called the meeting of the Utilities Advisory Commission (UAC) to order at 6:00 p.m. Present: Chair Scharff, Vice Chair Mauter, Commissioners Croft, Forssell (joined at 6:05 p.m.), Metz and Phillips Absent: Commissioner Segal AGENDA CHANGES, ADDITIONS AND DELETIONS None PUBLIC COMMENT None APPROVAL OF MINUTES ITEM 1: ACTION: Approval of the Minutes of the Utilities Advisory Commission Meeting Held on April 3, 2024 Chair Scharff asked for a motion to approve the April 3, 2024 UAC draft meeting minutes. ACTION: Commissioner Metz moved to approve the draft minutes of the April 3, 2024 meeting as submitted. Commissioner Mauter seconded the motion. The motion carried 4-0 with Chair Scharff, Vice Chair Mauter, Commissioners Metz and Phillips voting yes. Commissioner Croft abstained. Commissioner Forssell absent. UTILITIES DIRECTOR REPORT Utilities Director Dean Batchelor delivered the Director's Report. Water Supply Update: SFPUC, Palo Alto’s water supplier, confirmed water supply is in a solid position this year. SFPUC increased rates by 8.8% to $5.67. This change resulted in a proposed CPAU water rate Utilities Advisory Commission Minutes Approved on: Page 2 of 9 increase of 11%. Last week, staff met with Finance regarding the proposed rates. Finance recommended lowering the CPAU water rate increase to 9.5%; therefore, staff will use funds from the Rate Stabilization Account. The proposed rate increase will be in the Financial Plan presented to Council in June and in the Proposition 218 notices. Heat Pump Water Heater (HPWH) Program Update: As of March 7, the State’s TECH Clean HPWH incentives were fully reserved. On April 15, City Council adopted the HPWH program budget with new pricing. A new 65-gallon HPWH installed through the full-service program is $2300. The City will provide a credit up to $1000 for site preparation work such as plumbing for the condensate line. There is a City rebate up to $3500 for customers who use their own contractor for HPWH installation. As of April 25, 237 HPWHs were installed through the full-service program and 70 HPWHs were installed through the rebate program. Staff is in the process of selecting one or more vendors to implement an Emergency Water Heater Replacement Pilot Program. Facilities Managers Meeting: Last Tuesday, the Commercial team hosted a Facilities Managers Meeting at the Cabana Crown Plaza Hotel. There were 20 participants. Staff presented a case study on the HPWH installation at City Hall, electrification incentives, landscape rebates and AMI. The meeting culminated with a tour of the heat pump HVAC system installed at the hotel. Earth Day Event at Hewlett Packard: The City’s Sustainability and Key Account Program Managers participated in a tabling event for HP’s Earth Day Event to share information about the City’s energy efficiency and electrification programs along with available rebates. City staff and HP’s facility and sustainability staff explored potential partnerships and ways the City can support HP’s sustainability initiatives and educational endeavors. Commercial Energy Efficiency Webinar: Last Thursday, staff hosted its first Commercial Energy Efficiency Webinar. The discussion led by industry experts and engineers discussed strategies for making commercial buildings more energy-efficient, particularly through HVAC and lighting advancements. After the webinar, one attendee signed up for the Business Energy Advisor program and was interested in pursuing energy efficiency projects. With close to 60 RSVPs for this session and the success of this workshop, staff plans to put together other webinar opportunities for our commercial customers. EV Charger Program: The EV Charger Program has 15 sites in the permitting or installation phase. Most of these projects will be completed by the end of the year. More than 30 additional properties are in earlier project phases, including site assessment, bidding and vendor selection. EV Technical Assistance Program (EVTAP): The three-year extension with CLEAResult began April 16 to provide technical assistance to sites in the pipeline. The extension guarantees a minimum of 19 additional sites going live within the life of the contract. It takes at least two years on average to complete an EV charger project. Events: The Commercial team attended an Earth Month Celebration at Stanford Research Park and a Sustainability Fair at Hewlett Packard. Staff tabled at the Downtown Palo Alto Farmers Market to promote the HPWH Program. On April 13, staff hosted an in-person workshop entitled “Tips & Tricks for Successful Turf Conversion” attracting over 60 people. On April 21, staff from Utilities, Public Works, Community Services and the Office of Transportation hosted the City’s Earth Day Festival at Rinconada Library and had over 700 attendees. On April 23, Utilities staff participated in the Palo Alto High School Utilities Advisory Commission Minutes Approved on: Page 3 of 9 Earth Day event. More than 30 students came to the Utilities table to play an interactive game and learn about heat pump water heaters, EVs and PV systems. NEW BUSINESS ITEM 2: ACTION: Recommendation to Retain the Current WAPA Hydroelectricity Base Resource Contract Allocation From 2025-2030 ACTION: Vice Chair Mauter moved to approve Staff’s recommendation that the UAC recommend that the City Council keep the City of Palo Alto’s full share of its allocated hydroelectric resource under the current hydroelectricity supply contract, the 2025 Base Resource Contract from Sierra Nevada Region of the Western Area Power Administration (2025 WAPA Contract), as approved by Council in February of 2021 (Staff Report #11679). ITEM 3: DISCUSSION: Discussion of the Northern California Power Agency Issuing Bonds to Prepay for the Energy Received Under the 2025-2037 Geysers Power Purchase Agreement Utilities Advisory Commission Minutes Approved on: Page 4 of 9 PFM Financial Advisors Managing Director Michael Berwanger explained the energy prepayment structure. Northern California Power Agency (NCPA) CFO Monty Hanks stated the PPA participants were Palo Alto 10%, Santa Clara 70%, Lodi 10% and five other entities totaled the remaining 10%. ACTION: None ITEM 4: ACTION: Utilities Advisory Commission Recommendation to Adopt a Resolution Amending the Gas Utility Long-term Plan (GULP) Objectives, Strategies and Implementation Plan; Amending the Gas Utility Reserves Management Practices, Amending the FY 2025 Gas Fund Budget, and Amending Rate Schedules G-1 (Residential Gas Service), G-2 (Residential Master-Metered and Commercial Gas Service), Utilities Advisory Commission Minutes Approved on: Page 5 of 9 G-3 (Large Commercial Gas Service), and G-10 (Compressed Natural Gas Service). CEQA status: Not a project under Public Resources Code 15378(b)(5) and exempt under Public Resources Code 15273(a). Utilities Advisory Commission Minutes Approved on: Page 6 of 9 an answer. Mr. Yuan pointed out that CPAU’s Rate Assistance Program had about 500 participants in gas and 700 in electric. Staff can use the Rate Assistance Program to identify low-income customers. ACTION: Vice Chair Mauter moved to recommend the City Council advise Staff to investigate options to protect low-income customers and provide additional price spike informational campaigns and to consider the following: ITEM 5: ACTION: Staff Recommends That the Utilities Advisory Commission Recommend the City Council Adopt the Proposed Operating and Capital Budgets for the Utilities Department for the Fiscal Year 2025 Utilities Advisory Commission Minutes Approved on: Page 7 of 9 Mr. Batchelor remarked that components of the large dollar amounts included building the hardware; costs for poles, wires, transformers and labor. Almost all the secondary needed replacement. Some of the feeder had to be replaced coming out of the substations. The substations needed upgrades. Oil breakers have to be replaced to harden the system. In response to Commissioner Croft’s question, Mr. Yuan explained why expenses exceeded revenues. The electric fund did not fully budget the bond financing. After the IFB and cost estimate, staff will perform a midyear (or later) revenue adjustment to account for the remaining bond finance. Ms. Vuong outlined the preliminary plan for the FY 2024-2030 grid modernization project. Purchase equipment and construction to upgrade all overhead areas in Years 1 through 4. Purchase equipment in Year 3 for construction to upgrade substation transformers in Years 5 and 6. Purchase equipment in Year 5 for construction to upgrade all underground areas in Years 6 and 7. As pilots are completed, staff will bring forth information to the UAC for review, comments and recommendations. The Fiber Fund FY 2025 initiatives included expanding the fiber backbone network into the foothills, conducting cost and benefit analysis study, as well as launching Palo Alto Fiber Internet in the pilot area. Mr. Yuan remarked that the fiber pilot would launch in CY 2025 Q1 or Q2. After CEQA approval in June, construction and material purchasing can begin. Gas initiatives for FY 2025 included Gas Main Replacement 24B, Cross-bore Phase IV, as well as conducting a study and identifying proof of concept area for downsizing the gas system. Ms. Vuong explained the Customer Connection Project. Customers fully pay for gas connections but the City pays for the portions of work needed to meet the customer’s needs in the public right of way or that benefit the City’s gas distribution system. Wastewater Fund FY 2025 initiatives included completing the Sewer Master Plan Study. Vice Chair Mauter was curious about the Sewer Master Plan Study objectives around changes in the magnitude of precipitation and if it’s tied into resiliency work the City might be doing on flooding. Ms. Vuong was not familiar with the goals or scope other than flow analysis of the system and recalibrating the sewer system hydraulic model. Mr. Batchelor remarked Utilities was working with Public Works to evaluate what needed to be done in the flooding areas. A full hydraulic model of the sewer system is updated periodically. Water Fund FY 2025 initiatives included Water Main Replacement Project 29, Water Seismic Project for Park and Dahl Reservoirs, as well as completion of alternative water resource approaches for the One Water Plan. Discussion ensued regarding backflow devices. Mr. Batchelor stated that about 80% of customers have their backflow device inspected; however, 20% were repeatedly not in compliance. Staff addressed this problem with Legal. CPAU was advised they did not have the right to shut off water. Those 20% are causing us to be out of compliance with the State for the last four or five years. Staff discussed charging $50 to $60 for the City to certify backflow devices and have parts for making repairs if needed. CPAU will shut off service if the backflow is nonfunctional. There are 7800 backflow devices in Palo Alto. Utilities Advisory Commission Minutes Approved on: Page 8 of 9 ACTION: Commissioner Phillips moved to approve Staff recommendation the Utilities Advisory Commission recommend the City Council adopt the Proposed Operating and Capital Budgets for the Utilities Department for Fiscal Year 2025. COMMISSIONER COMMENTS and REPORTS from MEETINGS/EVENTS FUTURE TOPICS FOR UPCOMING MEETINGS NEXT SCHEDULED MEETING: June 3, 2024 ADJOURNMENT Utilities Advisory Commission Minutes Approved on: Page 9 of 9 Commissioner Segal absent. Meeting adjourned at 10:13 p.m.