Loading...
HomeMy WebLinkAbout2026-05-06 Utilities Advisory Commission Summary Minutes Utilities Advisory Commission Minutes – May 6, 2026 Page 1 of 24 UTILITIES ADVISORY COMMISSION MINUTES OF MAY 6, 2026 REGULAR MEETING CALL TO ORDER Vice Chair Mauter called the meeting of the Utilities Advisory Commission (UAC) to order at 6:00 p.m. Present: Chair Scharff (Just Cause Alternative Teleconference), Vice Chair Mauter, Commissioners Croft, Gupta, Metz, Phillips, and Tucher Chair Scharff participated via Just Cause Alternative Teleconference as he was traveling on official business for the San Francisco Bay Conservation Commission. He left the meeting at 8:05 p.m. Absent: None AGENDA REVIEW AND REVISIONS None. IN PERSON PUBLIC COMMENT None. APPROVAL OF THE MINUTES ITEM 1: ACTION: Approval of the Minutes of the Utilities Advisory Commission Meeting Held on March 31, 2026 MOTION: Commissioner Metz moved, seconded by Commissioner Phillips, to approve the minutes of the March 31, 2026 meeting. MOTION PASSED: 7-0 UNFINISHED BUSINESS None. Utilities Advisory Commission Minutes – May 6, 2026 Page 2 of 24 UTILITIES DIRECTOR REPORT Alan Kurotori, Utilities Director, delivered the Director's Report. Recent Council Actions: There was a reappointment of Commissioners Mauter, Scharff, and Phillips. City Council values were approved as recommended by the Policies and Services Committee 2026 objectives. There was an amendment to the Larratt Brothers Plumbing contract, which is for the residential emergency water heater replacement program; if a resident has a gas water heater failure and wants to transition to a heat pump water heater, the program is available to help with that. Another contract of note is with Duke's Root Control, which is a sanitary sewer system treatment service that foams mains and laterals to prevent blockages and overflows. Budget Hearings: The Finance Committee reviewed and unanimously approved the Utilities' FY27 Operating and Capital Budgets, which will go to the full City Council. Director Kurotori expressed appreciation for the UAC's input and staff's support through that process. New Electric Supply Contracts: Utilities received 60 responses for RFP for electric generation projects. That will be structured as a power purchase agreement (PPA) and could come to the UAC in 1 or 2 new electric generation contracts as early as July. Utilities will be working with developers and members of the NCPA as they move through the process. Fiber to the Premises (FTTP): In early May, the fiber hut at the Colorado receiving station was put into full operation, supporting the Phase 1 pilot area for residential fiber internet services. Staff completed the installation of the first early adopter customer last week and are working through initial internet performance. They will be scheduling additional early adopter installations from the week of May 11. Residential Energy Assistance Program (REAP): CPAU is expanding REAP to Electrify My Home. Jonathan Abenschein can answer additional questions. CPAU will now cover the cost of installing heat pump systems and electric induction cooktops or ranges, clothes dryers, heat pump water heaters, and energy assistance upgrades for households that qualify for the low- income Rate Assistance Program. Residential Rate Assistance Program (RAP): CPAU will recommend increasing the Residential Rate Assistance Program. The discount will go from 25 to 35 percent and the number of qualifying residents will expand from 50 to 80 percent of Santa Clara County median income. Staff anticipate the number of qualified customers could move from 800 to 1,100. Palo Alto Medical Foundation Rebate Check: Palo Alto Medical Foundation did a series of LED energy efficiency improvements resulting in an annual energy savings of 1.2 GWh, which is equivalent to powering about 145 homes per year and will save the Medical Foundation about $200K in annual energy costs. A rebate check of approximately $98K will be presented to the Palo Alto Medical Foundation at the Facility Managers Meeting. Utilities Advisory Commission Minutes – May 6, 2026 Page 3 of 24 Sustainability and Climate Action Plan (S/CAP) Webinar: On April 22, City staff presented an overview of S/CAP via a DEED webinar through the American Public Power Association. It was well received and has been recorded so other APA members can view it. The City received $75K to perform the webinar. NEW BUSINESS ITEM 2: ACTION: Approval of Chair and Vice Chair to Serve a One-Year Term beginning May 6, 2026 NOMINATION: Chair Scharff nominated Vice Chair Mauter as Chair for 2026. NOMINATION: Commissioner Metz nominated Commissioner Gupta as Chair for 2026. Chair Scharff stated that Mauter has done an excellent job as vice chair and has a great grasp of utilities, especially water, and has demonstrated the ability to run a meeting, which is the most important aspect of being chair. Commissioner Metz emphasized the need for UAC process improvement so it can better advise City Council and asserted that Commissioner Gupta would be effective at moving the UAC in that direction. Commissioner Metz acknowledged the competence and hard work of CPAU staff but expressed frustration that the UAC often receives recommendations for action without enough lead time to review, analyze, make informed decisions, and take effective actions. Commissioner Metz suggested more use of ad hoc committees for pre-assessment of items several months before action is requested and a report out to the full UAC 1 to 2 months before action is due. Commissioner Metz wanted to see the calendar filled out to include routine required actions like budgets, UAC work plan priorities, and plenty of lead time for analysis. Commissioner Mauter thanked Chair Scharff for chairing the Commission through multiple rate cycles, the launch of Grid Mod, and ongoing FTTP discussions. Commissioner Mauter stated she is interested in serving as chair because the next 12 months will be especially important for the City, with FTTP go/no-go decisions, a Grid Mod bond, and substantial rate increases across every utility. Commissioner Mauter offered that, as Chair, she would keep the process focused and efficient and work with staff to sequence items so complex decisions are preceded by dedicated informational briefings rather than combined with them. Commissioner Gupta thanked Commissioner Metz for the nomination and stated that his process is to work hard to understand the substance in and out of UAC meetings, listen to community concerns, and engage with Council members regularly, developing a holistic picture of everything going on in the City and how UAC's actions relate. Commissioner Gupta noted many important issues coming and offered that, as Chair, he would drive forward a better process, getting important agenda items earlier so there is more time and multiple meetings for review so they can understand the issues and provide substantial advice to City Council. Utilities Advisory Commission Minutes – May 6, 2026 Page 4 of 24 Commissioner Tucher stated that anyone on the Commission could do a good job as chair and it is important to keep respect and collegiality. Commissioner Tucher pointed to the Urban Water Management Plan (UWMP) and said the quality of staff reports and presentations needs improvement, as the document does not show where UAC's discussion last month came into play. Commissioner Tucher emphasized the importance of change, stated Commissioner Gupta is the one who can make it happen, and applauded his efforts on the gas COSA that Council sent back to UAC. Commissioner Tucher asserted that Commissioner Gupta's letter of amendments to the UWMP is excellent written communication with a collaborative, diplomatic style. Commissioner Croft spoke in support of Vice Chair Mauter because of the organizational skills she has demonstrated. Commissioner Croft emphasized that the chair's role is to run an orderly meeting, work with staff and commissioners ahead of time to understand what should be on the calendar, and recognize and respect the annual cadence of what the City does. Commissioner Croft concluded that the chair's role is to take what the commissioners give and make sure it is organized, presented to Council, and coordinated with staff. Commissioner Phillips supported Vice Chair Mauter and stated the chair's role is not about who brings the greatest understanding but who can organize the meeting and work with staff and colleagues, which Vice Chair Mauter has demonstrated. Commissioner Phillips shared concerns about the need to get better at closing loops and shared that the Finance Committee Meeting he attended as UAC representative took neither of UAC's recommendations on rates. Commissioner Phillips opined this is a broken process that whoever is chair should fix. Commissioner Phillips stated that everyone works hard on and off the dais and it is critical to understand what happens with the work the Commission does, whether it is influencing decisions, and how UAC can be more effective in future. Public Comment 1. Peter Drekmeier, Policy Director for Yosemite Rivers Alliance, thanked the commissioners for serving and tackling big issues that people in Palo Alto take for granted until there is a rate hike. Peter Drekmeier recalled the UAC's recommendation to incorporate the credit card service charge into utility bills, which saves $200K a year and was well received at the Finance Committee Meeting. Peter Drekmeier stated it is important for UAC to plan the next few months, if not year, and work through potential pitfalls in advance. 2. Hamilton H. stated Vice Chair Mauter is capable of the chair role but preferred Commissioner Gupta for thinking critically, doing the homework, and ensuring the Commission does the deep dive. Hamilton H. noted that Vice Chair Mauter stated it is important not to rubber stamp the Utility Commission, read the packet and do the homework before coming to the meeting, and be responsive to residents and advocate for them. Hamilton H. said that an item being remanded back from Council is a red flag that UAC did not do their job, so there are areas for improvement. Utilities Advisory Commission Minutes – May 6, 2026 Page 5 of 24 First Round of Voting for the position of Utilities Advisory Commission Chair with a One-Year Term. Voting For: Mauter Phillips, Scharff, Croft, Mauter (4) Gupta Tucher, Metz, Gupta (3) NOMINATION FOR MAUTER AS CHAIR FOR 2026 PASSED: 4-3 NOMINATION: Chair Mauter nominated Commissioner Phillips as Vice Chair for 2026. NOMINATION: Commissioner Tucher nominated Commissioner Gupta as Vice Chair for 2026. NOMINATION: Commissioner Croft nominated Commissioner Croft as Vice Chair. Chair Mauter expressed thanks to the Commission for her election to chair and spoke in support of Commissioner Phillips, who has been an effective leader of subcommittees, which has helped the Commission process the rate increases and other agenda items offline. Commissioner Tucher stated he made the case earlier when nominating Commissioner Gupta for chair and emphasized all that can and should be done between meetings, including process things like closing the loop, the advisory function, and managing the calendar. Commissioner Tucher noted that anyone on the dais would do a great job but advocated for the change represented by Commissioner Gupta. Commissioner Croft withdrew her nomination. Commissioner Gupta thanked Commissioner Tucher for the nomination and reiterated his earlier points, stating that process change is needed to give the UAC time to review and understand agenda items before making recommendations, which requires digging deep and working with staff multiples times a month. Commissioner Gupta cited his work on subcommittees and experience in government. Commissioner Phillips congratulated Chair Mauter, thanked Commissioner Scharff for his service, and thanked Chair Mauter for the nomination. Commissioner Phillips expressed enjoyment at working with all members of the Commission and working on ad hoc and subcommittees on the gas COSA, which had a great result for residents. Commissioner Phillips noted his work as liaison to the Finance Subcommittees and how he pushed very hard to get data centers on the calendar. Commissioner Phillips stated important agenda items are reserve policies and the Baker Tilly report, which all commissioners should read. Commissioner Phillips Utilities Advisory Commission Minutes – May 6, 2026 Page 6 of 24 has been working with the Sierra Club on a Drought Demand Model, which he opined is better than the Boston Model and is being used by the Sierra Club and a number of water districts to improve water forecasting. Commissioner Phillips stated he wants to push for more impact and better feedback from City Council through the Finance Subcommittee. Commissioner Scharff spoke in support of Commissioner Phillips for vice chair, noting his measured and thoughtful response to everything and his effectiveness. Commissioner Scharff added he thinks highly of Commissioner Croft and opined she would make a great vice chair. Commissioner Metz stated that everyone in the Commission is very competent and Commissioner Phillips was good in content and process when they worked together on Grid Mod and data centers. Commissioner Metz reiterated the need for process improvement and spoke in support of Commissioner Gupta for vice chair. First Round of Voting for the position of Utilities Advisory Commission Vice Chair with a One- Year Term. Voting For: Phillips Phillips, Croft, Mauter, Scharff (4) Gupta Metz, Tucher, Gupta (3) Croft Nomination withdrawn NOMINATION FOR PHILLIPS AS VICE CHAIR FOR 2026 PASSED: 4-3 ITEM 3: ACTION: Recommendation to the City Council to Adopt the Proposed Operating and Capital Budgets for the Utilities Department for Fiscal Year 2027 Chair Mauter shared that a supplemental report was added and is available in the packet. Dave Yuan, Strategic Business Manager, provided a slide presentation on the FY27 Utilities Operating and Capital Budgets. Utilities' strategy for FY27 is to balance affordability, capital investment, and financial health through cost recovery, operational efficiency, and more support for income qualified programs. In response to an earlier comment by Commissioner Tucher, Manager Yuan noted the UAC Budget Meeting usually happens before Finance, so there must have been a scheduling issue that flipped the order this time. Manager Yuan gave a high-level overview of the budget process review and noted Utilities is freezing or eliminating some positions for FY27. Manager Yuan noted that after the proposed budget was published, they found an error in the restrictive funds, which double-counted the $14M budget for Climate Action activities, which will be corrected in the adopted budget. Total Utilities budget for FY27 is $511M, about $8M or 1.5 percent lower compared to FY26, which can be attributed to cost- Utilities Advisory Commission Minutes – May 6, 2026 Page 7 of 24 cutting initiatives and changing Grid Mod to a when-and-where approach. The biggest piece of the Utilities FY27 budget is electric utility at $84M, of which $57M is allocated to Grid Mod. The fiber utility is allocated $16M, half for tripling the size of the backbone for capacity and the other half for the Fiber-to-the-Premises Project. Cost recovery initiatives for FY27 include passing credit card processing fees to customers, electric capacity fees for new developments, customer connection fees, and water utilities program services. Proposed expenditure reductions include reducing 5 full time meter reader positions, which are no longer needed because AMI transmits meter readings digitally, and freezing 3 full time fiber management positions pending further guidance from UAC and Council. Manager Yuan concluded by covering FY26 accomplishments, initiatives, and vacancies. Public Comment: None Commissioner Tucher commented that the information presented is in the packet twice and suggested it may be a better use of everyone's time to take a different approach to all slide presentations. Chair Mauter suggested this process discussion take place during the section of the meeting for items not on the agenda and acknowledged that slide presentations are in part to fulfill a public information and transparency function. Commissioner Gupta asked how the Baker Tilly report relates to the budget and to what extent UAC should be integrating it into conversations around budgets and rate planning. Manager Yuan responded that the plan was to invite Baker Tilly to present their findings around rate impacts and gradually implement recommendations to avoid a rate spike at any time. Alan Kurotori, Utilities Director, added that changes to reserve policies will impact rates, so they need to bring Baker Tilly back for conversation with UAC. Director Kurotori stated this is an open point of discussion on what information the UAC wants in order to make a confident recommendation to City Council. Director Kurotori confirmed that the Baker Tilly report has no FY27 implications and will not affect the FY27 budget. Director Kurotori noted those policies would need to be readopted by Council and UAC will have input on those policies and can discuss what they may do to rates. Commissioner Gupta pointed out that Grid Mod will be the biggest capital commitment moving forward and the total estimate has grown to $375M to $450M (Capital Book Page 420) and asked if the when-and-where approach to Grid Mod has been approved yet. Terry Crowley, Utilities Chief Operating Officer, responded that the final official approval for the when-and-where Grid Mod approach comes through this budget, which is still in the approval process for the various boards and City Council. It has gone back and forth to the UAC and Finance Committee and will go back and forth as it follows the budget approval process. Utilities Advisory Commission Minutes – May 6, 2026 Page 8 of 24 Commissioner Gupta spoke in favor of the change to the when-and-where model, stating it is a much smarter structure. Commissioner Gupta asked whether the first $80M bond finance has been built into the FY27 forecast, which staff confirmed. To a query by Commissioner Gupta, Utilities COO Crowley confirmed that the conversion of East Meadow and Hopkins Substations from 4 to 12 kV has been a $63M investment over 5 years and includes upgrades and improvements to the substations and distribution in those areas. Utilities COO Crowley clarified that when sizing the substations, they look at using a standard size of transformer throughout the City to build capacity for electrification and spare capacity for reliability; if a substation went down for maintenance or an unplanned outage, an adjacent substation could pick up that load. For distribution work, they look at electrification and expanding capacity so it is in place and ready when people decide to upgrade to building and transportation electrification. Commissioner Gupta wondered if there is any room to defer some of the substation investment should electrification not proceed at the expected rate. Utilities COO Crowley agreed they want to defer capital improvements as much as possible from a cost and rate impact perspective but noted the challenge with Hopkins and East Meadow areas is they are served from 4 kV substations built in the '50s and '60s and a failure in those substations would result in a multiple-day outage. What drives this project is mitigating the risk of long-term outages, which requires rebuilding the 4 kV systems quicker than in a when-and-where approach. To a question by Commissioner Gupta, Utilities COO Crowley stated that approval of this budget would allow Utilities the dollars to purchase long lead materials, predominantly the substation transformers, which are expected to have a lead time of 3 to 4 years. Approval of the FY27 budget is critical to meeting timelines to rebuild the Hopkins and East Meadow substations. Commissioner Gupta referenced Op Book Page 448 and questioned whether it is a coherent strategy to be sizing for a full electrification scenario while still having a gas utility forecast and assuming continued operations and reinvestment in that. Commissioner Gupta asked if there are opportunities to minimize rate impact for residents based on what is happening with these investments. Utilities COO Crowley stated they are looking at what the peak demand would be for full electrification and planning the electric system for that. Utilities COO Crowley explained that how that could manifest in reduced capital work for the gas system has not been clearly identified but the primary goal is public safety. If a gas pipe is leak or crack prone, the City needs to replace it. Staff continue to look at current electrification levels in figuring out right sizing for capacity. Utilities Advisory Commission Minutes – May 6, 2026 Page 9 of 24 Director Kurotori added that substation improvement is for reliability and as they build out those systems, they have been seeking synergies with neighboring utilities. Director Kurotori noted investor-owned utilities are looking to pilot electrification in lieu of some gas pipeline replacements. Commissioner Gupta wondered about doing zonal decommissioning rather than reinvestment and asked about estimating total stranded asset value if the gas utility is decommissioned by 2040, 2045, 2050, and so on. Director Kurotori responded they are looking at the gas transition study and updated system modeling for the gas utility and watching for that reduction. There is not a City policy around decommissioning, so the first step is looking at the gas transition and how to keep rates affordable for customers who continue to need gas. Commissioner Gupta opined it is important to study and understand stranded asset value with certain forecasts because decarbonizing and decommissioning is in the work plan and a strongly stated goal of the City. Vice Chair Phillips highlighted the proposed FY27 Utilities budget is $511, a $14M or 1.5 percent decrease from FY26, so it appears that rates are going up while spend is going down, though reserve movements play a part. Vice Chair Phillips wondered how to communicate that to residents from a PR perspective. Director Kurotori believed prices are going up because of commodity purchases, which are outside City control, while the decreasing spend is CIP-related pieces like position cuts. Commissioner Tucher disagreed with this assessment and noted the gas commodity going down in cost while distribution cost, not commodity cost, is going up. To Director Kurotori's response that admin costs went down this year, Commissioner Tucher stated that operations and maintenance are going up. The cost of repairing gas pipes and water mains drives cost, which leads to a bigger fixed cost component where there is less volume over which to spread it. Vice Chair Phillips asked about the $16M capital improvement for fiber, acknowledged the fiber backbone needs to be done, and asked how much would be saved in capital if the Fiber-to-the- Premises project does not move forward. Manager Yuan responded that some part of the Fiber-to-the-Premises funds would be saved if the project does not move forward but it depends on Council direction, whether building continues in opportunistic areas only or is stopped completely. To a question by Vice Chair Phillips, Kiely Nose, Assistant City Manager, clarified that Finance Committee has not approved the budgets yet. Finance Committee and Council have a very Utilities Advisory Commission Minutes – May 6, 2026 Page 10 of 24 iterative process to going through the budget. Finance did an initial review and made tentative motions and will discuss with Council on Monday and make a formal recommendation to Council on May 18 or 19. Assistant Manager Nose believed Finance Committee's tentative motions were not reflected in this presentation because they happened 5 hours before the UAC meeting. Director Kurotori reminded everyone that Council is working through the general fund deficit of $17.1M and talking through some savings in capital projects, so there is a heightened look at what Utilities and the City are doing, which is the reason for the iterative process. Vice Chair Phillips asked what the UAC can realistically influence. Assistant Manager Nose responded that whatever the UAC wishes would be passed forward in staff's presentation to the full Council on Monday and transmitted to the Finance Committee on May 18 for their consideration. Council does not adopt the budget until June 15. Director Kurotori suggested UAC may choose a representative to send to those meetings and report back to UAC. Commissioner Croft shared that she had pieced together the Fiber-to-the-Premises CIP spend, which totals about $15M from 2023 to 2027. Commissioner Croft asked what those budgets are spent on. Director Kurotori replied that the Fiber-to-the Premises budget for FY27 budget is for further expansion. About $5.5M was spent on building the fiber hut, data center, and fiber distribution for the pilot area. Of that, $2.5M was one-time costs while the other $3M is for scalability, like the hut and data center, which can be used for future needs. Director Kurotori clarified that there are no construction costs associated with connecting new customers in the pilot area. To a question from Commissioner Croft, Director Kurotori added that the City is spending less on fiber than budgeted because timing is behind. They have that budget in case they get authority from Council to expand further. Commissioner Croft asked how expenses compared to the original expectations for the fiber expansion model. Director Kurotori responded that the original expectation for fiber expansion was about $5M and the actual expense was about 10 percent over that. Utilities did not get as much synergy or savings from working with Grid Mod. Commissioner Croft pointed to Operating Budget Page 21, which states Grid Mod is aligning with fiber for the buildout to save money, which disagrees with a previous statement that they will not combine. Director Kurotori explained that the original plan was to seek synergies by combining projects that are in the same neighborhood and use the same crews. They found out they need different skill sets for the crews and some skill sets require higher pay. They learned that trying to do one after the other created delays; they had to wait for Grid Mod work to complete before they Utilities Advisory Commission Minutes – May 6, 2026 Page 11 of 24 could start on fiber. Now Grid Mod is changing to a when-and-where approach while fiber has to be built out in a more systematic or linear fashion. Commissioner Croft noted a misleading statement on Page 21, which says money is being spent on undergrounding. Commissioner Croft recommended removing that or specifying that it is only for fire so as not to be misleading, as public commenters come in wishing for undergrounding when it is not being undertaken. Utilities COO Crowley added that the Grid Mod project is looking at feeder ties to improve distribution capacity, which involves looking at planned undergrounding areas. The 5-year CIP includes the intent to move forward with some of the undergrounding utility districts that remain in the citywide plan. As those projects move forward, Utilities will start preliminary design, look at easement requirements, and formalize formation of those districts. That will come back to UAC, all various boards, advisory and ad hoc committees, and finally to Council for approval. Commissioner Croft asked if the wastewater head works estimate doubled from $50M to $100M based on a few years of delay. Director Kurotori noted this item came up with Finance Committee as well and the $50M adjustment is based on looking at costs associated with head works projects in neighboring areas. Chair Mauter shared that she recently took a tour of the wastewater treatment facility and there were some serious issues with degradation of the head works structure that were previously unknown, so the replacement process will be more expensive than originally budgeted. Commissioner Metz pointed out that the OpEx book shows fiber having a cost of $23M and revenue of $5M for a few years, resulting in a loss of $18M for several years. Commissioner Metz asked about options to accelerate growth and more quickly light up the network to sell service. Manager Yuan confirmed that the cost is related to building out the fiber network and customers won't be on it right away, so it will take a while to collect revenues to pay back construction cost. For accelerating growth, Manager Yuan stated they are considering fixed wireless for areas that are harder to build to and looking into new developments where they could get in more quickly and cost effectively. They are doing more marketing and letting developers know fiber is available when they are asking for electric permits, upgrades, or designs. Director Kurotori added that the $18M is not a loss but a reinvestment in infrastructure and the electric utility is partially funding those expansions, so there are some synergies. They are talking about updating the dark fiber website and doing additional outreach with large customers to make them aware of fiber opportunities. To a question by Vice Chair Phillips, Utilities Advisory Commission Minutes – May 6, 2026 Page 12 of 24 Director Kurotori responded that City use of the fiber upgrade is part of retail revenues and is included in the numbers shown. Manager Yuan noted $13M is being transferred from electric to fiber to help pay for the fiber backbone rebuild. Director Kurotori clarified that the fiber utility receives ongoing revenue and the electric utility shares CapEx for that expansion. Commissioner Metz was impressed with the progress made on the CapEx book and opined that it has clear descriptions and helps explain why these projects are needed and how they fit together. Commissioner Metz noticed the OpEx book mentioned a goal to increase PV penetration but mentioned no planned actions related to that. Utilities COO Crowley replied that staff are working on improving the process of PVs and looking at Rule 27, which governs interconnection of rooftop solar, looking to streamline that and capture new technologies that speed the connection and promotion of PV for rooftop and battery storage. That will come forward in late fall as an improvement. The intent is to speed the process for smaller PV systems that are a more routine size and interconnection while leaving space for larger systems to be studied in more detail. Director Kurotori noted there are state mandates around permit fees associated with solar and PV and there was direction for Electric Utility and Climate Action to see what other moneys could be used to lower rates for PV permit and inspection fees. Manager Yuan stated permit fees are $1,500 for 10 kw or less and $1,900 for more. Chair Mauter pointed out the Utility vacancies discussion, which has been going on for 3 years without improvement, and asked if the open positions are necessary, how Utilities is addressing the shortfall, and how much it is costing. Manager Yuan recalled peak was 47 positions. Some vacancies are new positions related to the goal around less outsourcing. Others are hard to fill but they are making progress. Utilities COO Crowley responded that 2 major contractors, VIP and MP Nexlevel, do a lot of work in the City. MP Nexlevel is appropriate for larger projects but not as cost efficient at doing smaller work. If the City can hire its own substructure crew to take smaller projects, they can be done sooner, cheaper, and with better quality. VIP does great line work but is more expensive, so creating a third line crew in the department could create cost savings. VIP is about $15K a day while a City crew would be $8K to $10K per day. The game plan for filling line crews is to hire apprentices, as it is easier to hire entry-level positions. Apprentices take 4 years to go from new hire to journey level. Commissioner Tucher commented that electric contract services have gone from $5M or $6M to $24M and gas contract services have doubled to $4M. Utilities Advisory Commission Minutes – May 6, 2026 Page 13 of 24 Chair Mauter asserted there needs to be clear accountability on this vacancy issue, which has been outstanding for several years. Director Kurotori said they do active tallies of vacancies and their reasons, whether due to attrition, voluntary separation, retirement, changeover, or promotions. Director Kurotori noted vacancies not filled are in part a staff capacity issue but they are working closely with HR on external resources, outside hiring firms, and how positions are being marketed. The focus is on the operations side, which has the most vacancies. Director Kurotori added that 5 vacant meter readers positions are proposed for elimination, so the vacancy number will drop to 28 on July 1. Chair Mauter asked about the baseload vacancy number and wanted to see it in the single digits. Vice Chair Phillips agreed and wanted to see the baseload vacancy number presented as a KPI metric, a specific goal number that staff marks progress toward. Commissioner Tucher expressed frustration at the process that put the budget in front of Finance before UAC. Commissioner Tucher opined it was pointless to ask questions and stated he will not be able to vote to support the budget because the story does not hang together and has not been presented in a timely and thorough enough way. Commissioner Tucher observed that wastewater is up the most of all utilities at 17 percent and the document is unclear on why while admin for wastewater went up 70 to 100 percent in recent years. Commissioner Tucher noted that every fund statement lists sources and uses but it is impossible to understand these budget documents because important line items are confusing: each fund shows costs first but does not call them costs; revenue comes second, which is unusual; and net income, profit, margin, or contribution are not shown. Commissioner Tucher acknowledged that City Council and commissioners may understand terms like gas and electric equity transfers but if the budget is a public document and PR in a sense, the financial story should be clear and explained enough for everyone to follow. Other confusing terms under revenue sources include charges to other funds, operating transfers in, and return on investment. Commissioner Tucher emphasized that the budget does not show the reserve levels; some of the biggest money moving around is coming in or out of reserves but there is no single summary picture of the reserves. Manager Yuan pointed out a reserve summary at the beginning of the budget book called Enterprise Summary, which he offered to include in budget materials for the UAC in the future. MOTION: Commissioner Metz moved, seconded by Vice Chair Phillips, to recommend that the City Council adopt the proposed operating and capital budgets for the Utilities Department for Fiscal Year 2027. MOTION PASSED: 5-1-1 Tucher no, Gupta abstain Utilities Advisory Commission Minutes – May 6, 2026 Page 14 of 24 Commissioner Scharff left at 8:05 p.m. ITEM 4: ACTION: Recommendation to the City Council to Adopt a Resolution Adopting the 2025 Urban Water Management Plan, a Resolution Adopting the 2025 Water Shortage Contingency Plan, and an Ordinance to amend the City’s Water Use Ordinance Adriana Artola, Senior Resource Planner, presented key updates to the 2025 Urban Water Management Plan (UWMP). The draft plan is included in the staff report as Attachment A and available for public review on the UWMP website. Senior Planner Artola noted Tom Francis, BAWSCA Water Resources Manager, was present to answer questions. The State requires UWMPs to be updated every 5 years and the 2025 plan must be adopted by Council and submitted to DWR by July 1, 2026. The UWMP is important for compliance with State regulatory standards and affects the City's outstanding and new loans from the State, which in turn affects rate affordability. Key elements of the 2025 plan include Palo Alto's historic, current, and projected water demand; water conservation measures like automated AMI leak alerts; water supply reliability assessments; and a water shortage contingency plan. The Water Shortage Contingency Plan outlines response actions during a water shortage and can be updated as needed. Staff are proposing updating the permanent water use ordinance to reflect and comply with AB 1572, which prohibits use of potable water on decorative grass. Staff also proposed updating the water ordinance to prohibit irrigation with potable water between 9 a.m. and 6 p.m. Public Comment 1. Peter Drekmeier, Policy Director for Yosemite Rivers Alliance, stated it was very helpful to have the briefing on March 31, which gave time for the public to share information and for the UAC to think about the issues. Peter Drekmeier was pleased by Commissioner Gupta's letter and expressed disappointment in the draft UWMP because it does not reflect the conversation from March 31, which is included in the staff report. Peter Drekmeier responded to an earlier comment about the water storage figures he presented, clarifying that they created a water supply calculator to check the SFPUC's numbers and look into possibilities of lower demand or postponing the design drought. It starts with full storage and subtracts 96,000 acre-feet, so no dead storage is included and the numbers reflect usable water. After 5 consecutive dry years, there are just over 600,000 acre-feet in storage and at the end of 8 years, there are 47,000 acre-feet left in storage. The numbers match up with SFPUC's intention of getting through an 8½-year drought but if a drought does not happen, the hoarded water gets spilled. Peter Drekmeier encouraged everyone to support Commissioner Gupta's language and commended Vice Chair Phillips for mentioning the Sierra Club Drought Model, which is used throughout the state though not necessarily embraced by model agencies. 2. Stephen Rosenblum, Palo Alto resident, expressed appreciation for the work the Commission does in supporting public utilities. Regarding water usage, Stephen Rosenblum Utilities Advisory Commission Minutes – May 6, 2026 Page 15 of 24 was concerned about the report's population projection on Page 17, Table 3, which shows a rapid increase in the coming years, which he opined was not accurate. Stephen Rosenblum stated water consumption for the last 5 or 10 years has been low and constant even though the population has been growing, which belies the assumptions in the drought model mentioned. Stephen Rosenblum believed the model manufactures a situation in which people have to think about conserving water unnecessarily. Stephen Rosenblum pointed out that, in 2018, City Council passed a resolution supporting the Bay Delta Plan, which SFPUC has not accepted. Stephen Rosenblum urged the UAC to create a water plan that takes into account what Palo Alto wants and the realities of the water situation. 3. Mark Shahinian with the Sierra Club stated the Bay Delta Plan is one of the Sierra Club's top priorities in California and projections about demand and water flows in the Tuolumne River are very important. Mark Shahinian opined that SFPUC is not a friend to the City and BAWSCA is not properly representing the City's interests. Palo Alto water rates partially depend on what neighboring cities project for their water use and affect dollars spent on infrastructure. Mark Shahinian stated he obtained through public record requests the water demand model for Palo Alto and other agencies and found errors which inflate demand, which he described in a letter forwarded to the UAC. Mark Shahinian noted that nearly all savings programs stop at about 2035 in the BAWSCA model, which is nonfactual. Mark Shahinian stated the Sierra Club’s demand model projections are about 34 percent lower than SFPUC's projections and 10 percent lower than the City's projections, a difference Palo Alto residents will pay for over time. 4. Dave Warner appreciated the UAC's discussion on this topic and echoed Mark Shahinian on how Palo Alto's demand projections have done well compared to other BAWSCA agencies. Dave Warner highlighted that when someone looks at water shortage cutbacks and sees huge numbers, the casual reader is not going to understand that those are highly unlikely to happen. Dave Warner expressed concern about SFPUC promoting these percentages and Palo Alto conveying them. Dave Warner asked if the UWMP could state that numbers are based on an artificial drought model to give casual readers a sense of low concern to negate the fear factor SFPUC is trying to create with their rationing percentages. Chair Mauter asked if the 3 items in the recommendation should be considered together or separately. Director Kurotori confirmed they are presented as 1 item but the UAC can separate them if desired. Commissioner Tucher asked if cutbacks that may be imposed by SFPUC would go against the actual amount being used or the total guaranteed amount. Lisa Bilir, Assistant Utilities Director, noted that the Individual Supply Guarantee (ISG) applies during non-drought years and cutbacks are against the most recent usage. The formula for calculating this was voted on recently by UAC. Utilities Advisory Commission Minutes – May 6, 2026 Page 16 of 24 Commissioner Tucher inquired if SFPUC responded to the numbers presented by Peter Drekmeier at the last meeting about 600,000 acre-feet of water being in storage after a 5-year drought. Assistant Director Bilir confirmed that staff corresponded through BAWSCA with SFPUC to get a response but they do not have an answer. Commissioner Tucher expressed astonishment that SFPUC cannot provide information on this and considered the response Assistant Director Bilir forwarded to be a brush-off. Regarding a query by Vice Chair Phillips, Senior Planner Artola confirmed that the water ordinance amendment brings the City into compliance with AB 1572. Agencies are required to update their water ordinance consistent with AB 1572 by January 1, 2027. Senior Planner Artola further confirmed that the primary reason for the UWMP is to meet State requirements that enable the City to get low-interest loans. As to whether Commissioner Gupta's proposed amendments would jeopardize the UWMP's acceptance as a compliant document, Assistant Director Bilir responded that the additional information requires thorough analysis to vet those numbers. Whether including them would no longer meet regulatory requirement is a question for the legal team. Staff responded that if they are to incorporate Commissioner Gupta's amendments in the UWMP, they need to hire a consultant to independently evaluate that information. Staff do not recommend that information be included without vetting and the process might involve an addendum to be adopted by City Council. Vice Chair Phillips and Commissioner Gupta pointed out that much of the additional information is from public documents, much of it from the SFPUC itself, and asked staff to point to what information from the proposed amendments requires vetting by a full consultant. Director Kurotori stated that the UAC may choose to recommend an alternate UWMP with the new information included and staff would then bring that recommendation to City Council while proposing the existing UWMP. Staff could not commit to completing a full analysis between this meeting and City Council's scheduled review of the UWMP. Commissioner Croft noticed that Packet Page 51, Table 2, which outlines the review process, shows several boxes with no checkmarks and wondered if those coordinating agencies have seen this draft or if that is a future step. Senior Planner Artola explained that this is tentative information because they have yet to submit the plan but they have reached out to partner agencies to send them notice of plan preparation. As part of the required public engagement process that the State Water Code outlines, they will be sending public notices prior to the City Council meeting. Utilities Advisory Commission Minutes – May 6, 2026 Page 17 of 24 Assistant Director Bilir added that the notice of public hearing will include a link to the draft, which is available on the City website. The current checkmarks on Table 2 reflect who will have been notified at the time that the public hearing notice is completed. Commissioner Croft requested that staff use consistent metrics and noted the struggle to reconcile the paragraph on Palo Alto Recycled Water Production and Table 9 on Packet Page 73. Senior Planner Artola stated the 196 shown in Table 9 is the 2 percent of water use mentioned in the slide presentation. Senior Planner Artola had no answer regarding capacity but offered to look into it. Commissioner Croft wished to see the capacity being used but understood it varies because of seasonal irrigation. Senior Planner Artola City's added that recycled water is used for certain public facilities like the golf course and Greer Park and use is dependent on the season. In response to a query by Commissioner Croft, Director Kurotori explained that dual plumbing is the use of recycled water for toilet and urinal flushing. While the packet says dual plumbing is required in the building code, the recycled water system is not being expanded in Palo Alto because the study done by Public Works found it was not cost effective. Commissioner Croft responded that the Planning and Utilities Departments should align their requirements and not have requirements that Palo Alto will not fulfill. Director Kurotori noted that only places where recycled water is available are required to have dual plumbing and customers are not prohibited from adding infrastructure for on-site water reuse if they wish. Commissioner Metz asked when the Public Works study on purple pipe cost effectiveness was done. Staff confirmed it was brought to Council in 2019 or 2020. Commissioner Croft asked about water use restrictions on Packet Page 223. Senior Planner Artola explained that during a drought, staff would recommend water shortage response actions corresponding to the stage of drought being experienced and those recommendations would require Council approval. The Water Shortage Contingency Plan can be amended as needed and it was amended during the most recent drought to remain consistent with neighboring agencies. Commissioner Croft commented that Stage II, Item 2, which states hotels should give guests the option of not laundering towels and linens daily, is widely practiced by hotels and should be standard practice even outside of drought conditions. Commissioner Croft noted Stage IV, Item 1 talks about drought tolerant landscaping, which should be required outside of drought conditions or moved to Stage I in the Water Shortage Contingency Plan. Director Kurotori stated the City tries to keep restrictions aligned with water retailers, especially Valley Water, so they can effectively communicate them to residents and businesses. Assistant Director Bilir offered that the most recent drought response involved coordination among agencies across Santa Clara County and the state. Utilities Advisory Commission Minutes – May 6, 2026 Page 18 of 24 Commissioner Croft responded that it sounds like the City is unwilling to do work that is out of line with other agencies. Commissioner Tucher agreed and thanked Commissioner Croft for bringing this up. Vice Chair Phillips commented on the lack of references to specific City Housing Projects like the San Antonio Area Plan and asked whether they are incorporated intrinsically in population growth numbers. Senior Planner Artola explained that the plan uses the City's adopted Housing Element for its growth projections and UWMP does not reflect specific development plans. The Water Code prescribes agencies to use their planning documents, which is what staff did. Vice Chair Phillips noted pushback from staff on incorporating the proposed amendment from Commissioner Gupta and a strong feeling of discontent from the Commission toward SFPUC and BAWSCA. Vice Chair Phillips stated that one reason for the amendment is not to change what the City does but to have it in writing that the Commission views with skepticism some assumptions put forward by SFPUC and embodied in this document. Vice Chair Phillips asked if there is another mechanism by which the amendment could be incorporated and communicated effectively to SFPUC and BAWSCA if not through the UWMP. Assistant Director Bilir said staff have good relationships with neighboring agencies and BAWSCA and recommended working together with BAWSCA Director Stone to build on those relationships and get the information the Council and UAC are seeking. Director Kurotori clarified his intent is not to minimize the solid work by the UAC and Commissioner Gupta but to outline the reality of the process. Commissioner Gupta responded in support of having two versions: staff's recommendation without additions and UAC's version with additions. Commissioner Gupta suggested staff could vet the additions and Council could have a discussion around it on what to do about the UWMP. Commissioner Gupta recommended providing options that reflect the UAC discussion and stated nothing is lost by providing that extra option. Commissioner Croft stated the issue with design drought and SFPUC has repeatedly come up and the UAC has not figured out how to have an influence. Commissioner Croft asserted that this needs a subcommittee to brainstorm, meet with Councilmember Stone, and find ways to push the needle outside of UWMP. Commissioner Croft suggested commissioners need to go to SFPUC meetings and lobby with other cities in a comprehensive way. Commissioner Metz felt it was a good idea and offered that it would likely be an ad hoc committee. Chair Mauter stressed that while the goal is to vote on this item, that is not intended to undermine the discussion about how to get a more active advisory role related to Palo Alto's engagement in BAWSCA or SFPUC. Chair Mauter concluded the UWMP is not the appropriate Utilities Advisory Commission Minutes – May 6, 2026 Page 19 of 24 place for that given the financial implications and wanted to identify what on their rolling agenda would better align. Director Kurotori stated this might be prioritized as an interest of the UAC in their annual work plan, which goes to the full Council. The work plan process is tentatively set for June. Director Kurotori added that the Sustainability and Climate Action Committee is interested in a joint meeting with the UAC, so staff are working on dates for that. Chair Mauter recommended that this be added to the work plan discussion next month, which would not remove other options they could take in terms of sending someone to represent UAC discussions as this motion is considered at Council in June. Commissioner Croft stated disagreement with some parts of the substitute motion and suggested the UAC talk through each item. To a question by Commissioner Metz, Assistant Director Bilir confirmed the UWMP is typically accepted by the State, sometimes with a few minor edits. Commissioner Metz expressed sensitivity to the broad issue around SFPUC and felt this was the wrong hill to die on, since it is a regulatory requirement. Commissioner Metz agreed with a lot of the language in the substitute motion but did not believe this is the right place to address it. Commissioner Tucher asked if there is any more authoritative document than Palo Alto's UWMP. Assistant Director Bilir responded that Palo Alto has traditionally done an Integrated Resource Plan, which is where they have made recommendations and surveyed water supplies for the future. Mauter added there was a long discussion about a One Water Plan. Tucher emphasized he cannot support the UWMP as written. Commissioner Gupta stated that if commissioners have issues with how Palo Alto presents SFPUC's numbers without framing or additions of other numbers, they should support the substitute motion because it adds everything the UAC has been discussing, balances a lot of commentary from multiple UAC commissioners, and would be great for Council to consider. MOTION: Chair Mauter moved, seconded by Vice Chair Phillips, to recommend that the City Council adopt a resolution adopting the 2025 Urban Water Management Plan, a resolution adopting the 2025 Water Shortage Contingency Plan, and an Ordinance Amending Municipal Code Chapter 12.32 (Water Use Regulations). SUBSTITUTE MOTION: Commissioner Gupta moved, seconded by Commissioner Tucher, to recommend that the City Council: 1. Adopt a resolution adopting the 2025 Urban Water Management Plan, incorporating the following amendments: Utilities Advisory Commission Minutes – May 6, 2026 Page 20 of 24 a. The Section 1 framing edit at page 12 b. The Table 20 Finance Bureau sensitivity at page 93 with new note (e) c. The AWS Program cost-exposure and conditional-support paragraph at page 76 d. The 2021–2023 Water Shortage Emergency lookback at pages 97 and 111 e. The >20% allocation reservation-of-rights at page 116 f. A new appendix presenting SFPUC end-of-year system storage under the Design Drought and g. A LTVA-applicability paragraph in Section 6. 2. Adopt a resolution adopting the 2025 Water Shortage Contingency Plan, and 3. Adopt an Ordinance Amending Municipal Code Chapter 12.32 (Water Use Regulations). SUBSTITUTE MOTION FAILED: 2-4-1, Phillips, Croft, Mauter, Metz no, Scharff absent The UAC discussed how to proceed and decided against a friendly amendment, which would involve debating each of the 7 paragraphs in Commissioner Gupta's letter. The UAC chose to make a new substitute motion that attaches and endorses the letter to Council for review. Commissioner Croft believed the letter was difficult to navigate and would be difficult for Council to follow. Commissioner Croft suggested that a red line document would be easier. Commissioner Gupta disagreed and asserted that a 100-page red line document with only 7 edits would be more unwieldy than the letter. Commissioner Gupta opined that the Council is more than capable of understanding. Commissioner Croft felt the letter needs to have personal representation to help walk Council through the amendments, which Commissioner Gupta volunteered to do. Chair Mauter suggested that the representative to Council should be someone more neutral than Commissioner Gupta, who is actively proposing the amendments. Commissioner Tucher noted a lack of clarity around what is being advised to Council when some commissioners disagree with the letter. Commissioner Tucher wondered if it is as effective to have Commissioner Gupta bring the letter forward via public comment instead. Commissioner Gupta responded that the benefit of the motion versus public comment is Council will see which commissioners voted in support of the letter. Commissioner Croft stated disagreement with some parts of the letter and felt the need to vote against the whole because of those parts. SUBSTITUTE MOTION: Commissioner Gupta moved, seconded by Commissioner Metz, to recommend that the City Council adopt a resolution adopting the 2025 Urban Water Management Plan, a resolution adopting the 2025 Water Shortage Contingency Plan, and an Ordinance Amending Municipal Code Chapter 12.32 (Water Use Regulations) and Utilities Advisory Commission Minutes – May 6, 2026 Page 21 of 24 1. The UAC submit Commissioner Gupta's May 2, 2026 Companion Memo (Public Comment Letter submitted to the UAC) to the City Council as additional information. SUBSTITUTE MOTION PASSED: 4-1-1-1, Croft no, Mauter abstain, Scharff absent The UAC selected Commissioner Gupta to represent his letter to the Council in a neutral fashion. Chair Mauter encouraged Commissioner Gupta to reach out to Commissioner Croft to understand her views and concerns and ensure they are well represented at Council. ITEM 5: ACTION: 2026 Annual Water Shortage Assessment Report Adriana Artola, Senior Resource Planner, reported that based on information from SFPUC, particularly their Water Supply Availability Update provided in April, there is no anticipated water shortage for FY27. Chair Mauter asked how snowmelt impacts Palo Alto's yearly water allocation. Lisa Bilir, Assistant Utilities Director, responded that staff are not prepared to go into great detail about snowmelt impact but noted that this year was unusual with most snowmelt occurring in March, so they can ask for more information and come back to UAC with more details. Chair Mauter commented about non-potable water use, noting it is a decent investment for very small use. Chair Mauter wanted to think about and incorporate discussions around the non-potable use resource, especially in the context of spending choices on the wastewater side. Commissioner Tucher added that the Public Works study on purple pipe was done 5 to 7 years ago and wondered whether it would be helpful to agendize and revisit the question of extending purple pipe. Chair Mauter believed it could be included in the work plan discussion. Commissioner Gupta referenced Attachment A, Table 2, which shows reported demand was flat from FY26 to FY27 with a 25-year decline trajectory, and wondered if the decline trajectory is more backloaded. Assistant Director Bilir responded the water shortage report follows a procedure that requires staff to use the demand forecast model from the prior, outdated plan. Staff are trying to set a procedure for next time that does not require using the outdated information. MOTION: Chair Mauter moved, seconded by Vice Chair Phillips, to recommend that the City Council adopt the 2026 Annual Water Shortage Assessment Report Utilities Advisory Commission Minutes – May 6, 2026 Page 22 of 24 MOTION PASSED: 6-0-1, Scharff absent FUTURE TOPICS FOR UPCOMING MEETINGS Chair Mauter noted this is the month for doing the 12-month rolling calendar and asked for future meeting topics. Commissioner Croft expressed thanks for the Energy Risk Management Report that was sent to Council and discussed at a prior meeting. Commissioner Croft suggested it be provided to UAC whenever it is on the calendar for Council. Commissioner Croft acknowledged staff plans to share the power portfolio strategy and PPA updates with the UAC and asked the strategy for that. Alan Kurotori, Utilities Director, confirmed that staff will show the UAC annual energy needs, current contract status, and how the new PPA will fill some gaps. Director Kurotori believed that it would be brought to UAC in July and offered to double check timing and report back. Vice Chair Phillips was glad to see the response to the Baker Tilly report on reserves that staff recommends a work plan over the coming year to review and revise City policies with the assistance of UAC and Finance Committee. The Commission agreed that discussing the report on reserves is important and should be scheduled for July. They noted the preference for an earlier date outweighs the desire to have Baker Tilly directly involved. Chair Mauter noted City Council needs to consider any policy changes with respect to reserves and wondered when it would be on their calendar this year. Kiely Nose, Assistant City Manager, stated the next step in the process is to put together a work plan and the timing is not laid out. Baker Tilly needs to send their assessment to Council to adopt as a consent item and it should be done in June, before the end of Council's break. Commissioner Metz stated he will hold his suggested meeting topics until the work plan meeting. Commissioner Tucher suggested a discussion around the goals of the work plan. Chair Mauter responded it is about developing a 12-month schedule for meeting topics, which goes to Council for approval or amendment. Commissioner Tucher recommended they start with an assessment of how well last year's work plan went. COMMISSIONER COMMENTS AND REPORTS FROM MEETINGS/EVENTS Utilities Advisory Commission Minutes – May 6, 2026 Page 23 of 24 Commissioner Tucher recalled his earlier criticism of the budget and wanted to highlight the good things, such as talking about achievements, initiatives, and goals. Commissioner Tucher opined there is no better document for helping community or commission members understand what is happening at CPAU. Commissioner Tucher asserted there should be monthly or quarterly updates on goals and initiatives and a dashboard for tracking progress. Commissioner Metz attended the Stanford Sustainability Data Center Symposium last Friday and reported there was very little discussion of environmental sustainability. He found the meeting unrealistically positive about data center impacts with inadequate examination of the challenges. There was a California panel on AI infrastructure, including PG&E CEO Poppe and State Senator Josh Becker, who viewed data centers as a beneficial load. Poppe said that 1 GW additional load lowers rates 1 percent and adds about $300M sales tax revenue. The belief throughout the conference was that data centers will pre-pay for infrastructure. They estimated 9 to 17 percent electricity growth due to AI, which is hoped to maximize use of existing infrastructure but there have been discussions about transmission shortages throughout the country, so there is conflicting data. Commissioner Metz opined that one of the most interesting presentations was from Nico Procos of Silicon Valley Power, which has 58 data centers and their own 147-MW generating plant. Graham Richard, a former mayor from Indiana, talked about a Google data center, codename Zodiac, which illustrated some issues Palo Alto will face, namely doing research on other cities' experience with data centers. The tricky part is that data centers want secrecy, so it is hard to make informed decisions and the real information shows up at the last minute. Libby Schaaf, head of Bay Area Council, emphasized altitude, which is the need for making land use decisions above the local level, which is the direction she and others are thinking and may not be a happy message for Palo Alto. Commissioner Metz offered to share more detailed notes with anyone interested. Commissioner Croft provided an update on the time-of-use pilot, in which she is a participant. It has been a few months and she has been tracking what she uses and when. Commissioner Croft stated this pilot aligns with one of the reasons she wanted to be on UAC, to help motivate consumers to use cleaner energy at better times. The Utilities Portal now shows usage color coded by month, day, and hour. Commissioner Croft shared that even as an extremely motivated person working at home during the day, it is very hard to move the load. Commissioner Croft stated much analysis can be done and she would love to get in touch with others in the pilot to exchange ideas. In addition to gathering data, it would help to compare motivation levels to outcomes and be able to compare past use and cost to current levels. Commissioner Gupta had an opportunity to visit the Tesla Gigafactory Panasonic and Redwood Materials and offered to share more information with anyone interested. Commissioner Gupta stated he has been seeking lessons from other places in the world on decarbonization and gas decommissioning, including dinner with New Zealand energy executives when they were visiting Palo Alto, who have experience decommissioning cold fuel lines. Stanford hosted Norwegian energy executives including Statkraft, the largest renewable energy provider in Europe. Commissioner Gupta noted many places are moving toward decarbonization. Utilities Advisory Commission Minutes – May 6, 2026 Page 24 of 24 Chair Mauter shared that the wastewater treatment plant welcomes any commissioners for tours if they are interested. VIRTUAL PUBLIC COMMENT None. ADJOURNMENT Adjournment: The meeting was adjourned at 10:20 p.m.