HomeMy WebLinkAbout2026-06-03 Utilities Advisory Commission Agenda PacketUTILITIES ADVISORY COMMISSION
Special Meeting
Wednesday, June 03, 2026
Council Chambers & Hybrid
6:45 PM
Materials were originally noticed and published on Thursday,
May 21, 2026 and are now being reissued with no changes
for this Special Meeting
Utilities Advisory Commission meetings will be held as “hybrid” meetings with the option to
attend by teleconference/video conference or in person. To maximize public safety while still
maintaining transparency and public access, members of the public can choose to participate
from home or attend in person. Information on how the public may observe and participate in
the meeting is located at the end of the agenda. Masks are strongly encouraged if attending in
person. The meeting will be broadcast on Cable TV Channel 76, live on
YouTube https://www.youtube.com/c/cityofpaloalto, and streamed to Midpen Media
Center https://midpenmedia.org.
VIRTUAL PARTICIPATION CLICK HERE TO JOIN (https://cityofpaloalto.zoom.us/j/96691297246)
Meeting ID: 966 9129 7246 Phone: 1(669)900-6833
PUBLIC COMMENTS
General Public Comment for items not on the agenda will be accepted for up to three minutes
or an amount of time determined by the Chair. In-person comments will be heard at the
beginning of the agenda and remote comments will be heard at the end of the agenda. All
requests to speak will be taken until 5 minutes after the staff’s presentation. Written public
comments can be submitted in advance to UAC@PaloAlto.gov and will be provided to the
Council and available for inspection on the City’s website three days before the meeting. Please
clearly indicate which agenda item you are referencing in your subject line.
PowerPoints, videos, or other media to be presented during public comment are accepted only
by email to UAC@PaloAlto.gov at least 24 hours prior to the meeting. Once received, the Clerk
will have them shared at public comment for the specified item. To uphold strong cybersecurity
management practices, USB’s or other physical electronic storage devices are not accepted.
Signs and symbolic materials less than 2 feet by 3 feet are permitted provided that: (1) sticks,
posts, poles or similar/other type of handle objects are strictly prohibited; (2) the items do not
create a facility, fire, or safety hazard; and (3) persons with such items remain seated when
displaying them and must not raise the items above shoulder level, obstruct the view or passage
of other attendees, or otherwise disturb the business of the meeting.
TIME ESTIMATES
Listed times are estimates only and are subject to change at any time, including while the
meeting is in progress. The Commission reserves the right to use more or less time on any item,
to change the order of items and/or to continue items to another meeting. Particular items may
be heard before or after the time estimated on the agenda. This may occur in order to best
manage the time at a meeting to adapt to the participation of the public, or for any other
reason intended to facilitate the meeting.
1 Special Meeting June 03, 2026
CALL TO ORDER 6:45PM - 6:50PM
AGENDA CHANGES, ADDITIONS AND DELETIONS 6:50PM - 7:00PM
The Chair or Board majority may modify the agenda order to improve meeting management.
IN PERSON PUBLIC COMMENT 7:00PM - 7:15 PM
Members of the public may speak to any item NOT on the agenda. 1-3 minutes depending on number of speakers. In-person
comments will be heard at the beginning of the agenda and remote comments will be heard at the end of the agenda.
APPROVAL OF MINUTES 7:15PM - 7:20PM
1.Approval of the Minutes of the Utilities Advisory Commission Meeting Held on May 6,
2026. Late Packet Report Added
UTILITIES DIRECTOR REPORT 7:20PM - 7:30PM
NEW BUSINESS
2.Special Presentation and Discussion on partnering norms between staff and
Commissioners for maximum effectiveness. CEQA – Not a Project (DISCUSSION: 7:30PM
– 8:15PM)
3.Review and Recommend Utilities Advisory Commission FY 2026-2027 Work Plan for City
Council Approval (ACTION: 8:15PM – 9:15PM) Supplemental Report Added
COMMISSIONER COMMENTS AND REPORTS FROM MEETINGS/EVENTS
VIRTUAL PUBLIC COMMENT
Members of the public may speak to any item NOT on the agenda. 1-3 minutes depending on number of speakers. In-person
comments will be heard at the beginning of the agenda and remote comments will be heard at the end of the agenda.
ADJOURNMENT
OTHER INFORMATION
The materials below are provided for informational purposes, not for action or discussion during this meeting’s agenda. Written
public comments may be submitted in advance and will be provided to the Board and available for public inspection on the
City’s website three days before the meeting.
A.12 Month Rolling Calendar
2 Special Meeting June 03, 2026
B.Public Comments
C.Informational Update on Enrolling Customers in the Voluntary Residential Electric Utility
Time-of-Use (E1-TOU) Rate
3 Special Meeting June 03, 2026
PUBLIC COMMENT INSTRUCTIONS
Members of the Public may provide public comments to teleconference meetings via email,
teleconference, or by phone.
1.Written public comments may be submitted by email to UAC@PaloAlto.gov.
2.Spoken public comments using a computer will be accepted through the teleconference
meeting. To address the Council, click on the link below to access a Zoom-based meeting.
Please read the following instructions carefully.
◦You may download the Zoom client or connect to the meeting in- browser. If using
your browser, make sure you are using a current, up-to-date browser: Chrome 30 ,
Firefox 27 , Microsoft Edge 12 , Safari 7 . Certain functionality may be disabled in
older browsers including Internet Explorer.
◦You may be asked to enter an email address and name. We request that you
identify yourself by name as this will be visible online and will be used to notify you
that it is your turn to speak.
◦When you wish to speak on an Agenda Item, click on “raise hand.” The Clerk will
activate and unmute speakers in turn. Speakers will be notified shortly before they
are called to speak.
◦When called, please limit your remarks to the time limit allotted. A timer will be
shown on the computer to help keep track of your comments.
3.Spoken public comments using a smart phone will be accepted through the
teleconference meeting. To address the Council, download the Zoom application onto
your phone from the Apple App Store or Google Play Store and enter the Meeting ID
below. Please follow the instructions B-E above.
4.Spoken public comments using a phone use the telephone number listed below. When
you wish to speak on an agenda item hit *9 on your phone so we know that you wish to
speak. You will be asked to provide your first and last name before addressing the Council.
You will be advised how long you have to speak. When called please limit your remarks to
the agenda item and time limit allotted.
CLICK HERE TO JOINMeeting ID: 966 9129 7246 Phone:1-669-900-6833
Americans with Disability Act (ADA)It is the policy of the City of Palo Alto to offer its public
programs, services and meetings in a manner that is readily accessible to all. Persons with
disabilities who require materials in an appropriate alternative format or who require auxiliary
aids to access City meetings, programs, or services may contact the City’s ADA Coordinator at
(650) 329-2550 (voice) or by emailingada@PaloAlto.gov. Requests for assistance or
accommodations must be submitted at least 24 hours in advance of the meeting, program, or
service.
4 Special Meeting June 03, 2026
Utilities Advisory Commission
Staff Report
Report Type: APPROVAL OF MINUTES 6:25PM - 6:30PM
Lead Department: Utilities
Meeting Date: June 3, 2026
Report #:2605-6411
TITLE
Approval of the Minutes of the Utilities Advisory Commission Meeting Held on May 6, 2026
This will be a late packet report published on Thursday, May 28, 2026.
Item #1
Packet Pg. 5
On behalf of Utilities Director Alan Kurotori, please find below the staff responses to questions
from Utilities Advisory Commission members.
1.Regarding the parallel track of submitting information to SFPUC for feedback, would it
be possible for us to send a more specific set of YRA questions now so that we might
have time to receive feedback before our next UAC meeting?
We think it would be helpful to ask specifically about the YRA assumptions on storage
levels and reservoir releases, along with the assumptions behind the RWS volume
figures. In particular, could SFPUC explain why “available water” drops from just over
200 mgd to the 140s in Year 2 and the 120s in Year 3, and then remains roughly steady
after that?
It may also make sense to point them directly to the reservoir release numbers and
ask how they are deriving the mgd figures.
Staff response: Thank you Commissioners for your question. Staff coordinated with
BAWSCA to provide the following response from the SFPUC: The model (Hetch Hetchy Local
Simulation Model) that the SFPUC uses to simulate RWS operation for the UWMP scenarios
currently includes 3 levels of delivery shortage. This number is adjustable, but we have
found that 3 levels of shortage is generally sufficient to represent the system water balance
over the design drought. Our convention is to have the shortage level increase over the
course of the extended drought. The 5-year drought sequence that is presented in the
UWMP shows years 2 through 6 of the 8.5 year design drought. In each of the UWMP
scenarios, the first and second level of shortage is apparent in the years that are presented
for the 5-year drought, and the third level of shortage is used in the later years of the design
drought.
2.I'm hoping to find out who within the city is responsible for making sure government
properties are complying with the new "no potable water used on non-functional
turf"? Do you know who is leading this for our turf inside Palo Alto? Public works? I'm
hoping to learn not only how Palo Alto will comply but how communities throughout
the state will comply.
Staff Responses to UAC Questions
Utilities Director
Report
Packet Pg. 6
Staff response: Thank you for your inquiry regarding the City’s compliance with the non-
functional turf watering ban under AB 1572. The Utilities Department is working closely
with the Community Services Department to identify non-functional turf areas at City
properties and evaluate appropriate next steps for compliance. As part of this effort, the
City is assessing which locations on City properties are suitable candidates for conversion
to water-wise landscaping and is exploring converting one of these areas into a public
demonstration garden to showcase alternatives to traditional lawns. The City plans to
participate in Valley Water’s landscape rebate program to help offset a portion of the
project costs associated with these conversions. The City is also a member of the California
Water Efficiency Partnership (CalWEP), which is providing guidance and resources to help
agencies navigate compliance with AB 1572.
Utilities Director
Report
Packet Pg. 7
Item No. 2 Page 1 of 2
Utilities Advisory Commission
Staff Report
From: Alan Kurotori, Director Utilities
Lead Department: City Manager’s Office
Meeting Date: June 3, 2026
Report #: 2604-6224
TITLE
Special Presentation and Discussion on partnering norms between staff and Commissioners for
maximum effectiveness. CEQA – Not a Project
RECOMMENDATION
Discuss partnering norms between staff and Commissioners for maximum effectiveness.
BACKGROUND
On a citywide basis, the Boards, Commissions, and Committees (BCC) Handbook1 provides
comprehensive guidance for the operation of the City’s BCCs. City departments that provide
staff to BCCs periodically discuss opportunities to enhance effectiveness in providing support to
the work and BCCs, and one recently identified area for exploration is establishment of norms
for interactions between BCCs and staff.
In addition to addressing issues of importance to the Palo Alto community, the City’s Boards
and Commissions provide an important role in staff development as well as potentially in the
development of community volunteers. As such it is important that the City provide all
participants an environment that is welcoming and conducive to professional and personal
development, while also effectively and efficiently conducting the work entrusted to each body.
On an ongoing basis, staff work with individual commissioners on concerns with staff
interactions as they arise. This report and discussion represent an effort to proactively address
issues before they become concerns, for the benefit of all. Staff hope to discuss this topic
citywide, with all BCCs. This was discussed the Human Relations Commission on October 16,
and Parks and Recreation Commission on December 16, 2025.
1 City Boards, Commissions, and Committees Handbook;
https://www.paloalto.gov/files/assets/public/v/4/cityclerk/board-and-commission-handbook.pdf
Item #2
Packet Pg. 8
Item No. 2 Page 2 of 2
ANALYSIS
Recognizing the broad range of topic areas and procedures involved with the City’s advisory
bodies, staff is not recommending that each Commission adopt of a uniform set of norms. At
the same time, in order to provide a starting point for each discussion, staff has developed an
initial draft of topic areas for discussion.
This initial draft is provided in Attachment A. This draft is simply provided as a starting point,
with the expectation that Commissioners may have differing views on the topic areas as well as
additional topic areas to suggest. The points provided should serve as a reference point if/when
issues arise in the future.
Depending on the Commission’s interest level, next steps could vary. This could simply be a
one-time discussion, not requiring any follow-up. Otherwise, it could be included as a topic for
further discussion at a future Commission meeting. Additional follow-up may also be suggested.
In any case, staff appreciate the opportunity to discuss this important issue with the
Commission.
FISCAL/RESOURCE IMPACT
No resource impact is anticipated from this report and associated discussion.
ATTACHMENTS
Attachment A: Partnering Norms for Commission / Staff Effectiveness DRAFT
AUTHOR/TITLE:
Ed Shikada, City Manager
Item #2
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Item #2
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Item No. 3 Page 1 of 3
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Utilities Advisory Commission
Staff Report
From: Alan Kurotori, Director Utilities
Lead Department: Utilities
Meeting Date: June 3, 2026
Report #: 2601-5886
TITLE
Review and Recommend Utilities Advisory Commission FY 2026-2027 Work Plan for City Council
Approval
RECOMMENDATION
Staff recommends the Utilities Advisory Commission (UAC) to review, provide feedback, and
recommend City Council approval of the FY 2026 - 2027 Annual Work Plan.
BACKGROUND
In accordance with the 2020 City Boards, Commissions, and Committees Handbook, each Board
and Commission should prepare an annual work plan for proposal to the City Council by the
second quarter of the calendar year. The Council will review the work plan and provide
feedback annually at a dedicated City Council meeting. The annual report should include the
results of the prior year’s plan. When applicable, the City Council would like to see metrics of
community involvement and participation in meetings and activities included in the work plan.
Council expects Boards and Commissions to work on items in the approved work plan. Council
may refer additional items to the Boards and Commissions in response to new developments.
Boards and Commissions should refrain from expending their time and that of the staff liaison
on items that have not been approved by the City Council. If the Board or Commission would
like to add an issue for review after an annual workplan has been approved by the City Council,
a prompt request by the Board or Commission Chair to the City Council is required and the item
will then be addressed by the City Council as a whole.
Item #3
Packet Pg. 11
Item No. 3 Page 2 of 3
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FY 2026 UAC Accomplishments
The Council adopted a workplan for the FY 2026 year that included 11 topics1. The UAC over the
past year has considered several items in alignment with the workplan, a few highlights are
below:
Reviewed and recommended approval of FY2027 rates and financial forecasts for water,
gas, wastewater collection, and electric utilities including the Utilities capital plans and
budgets in each of these utilities (Topic 1 & 5)
As recommended by the UAC And referred by the City Council, reviewed the recent Gas
Cost of Service Analysis (COSA), ensured alignment of cost and customer class variables,
resulting in the adoption of the UAC’s recommended revised report. (Topic 1 & 8)
Discussion of implementation plan for voluntary residential electric time-of-use rates
and pilot rollout (Topic 1)
Reviewed and through rate setting recommended implementation of credit card service
charges (Topic 1)
Review electric portfolio and recommended approval of purchase of battery energy
storage capacity from Trolley Pass Project LLC (Topic 3)
Held a discussion on data centers and large load customers in Palo Alto, providing
feedback to staff to guide future work in this policy area (Topic 3)
Provided feedback and recommended approval of Reliability and Resiliency Strategic
Plan Strategies 4 and 5 (Topics 6 & 9)
Reviewed strategies and progress of key capital projects providing feedback on key
performance indicators for project and program evaluation in the future - fiber-to-the-
premises and grid modernization projects (Topics 5 & 10)
Recommended approval of revised Utilities Legislative Policy Guidelines (Topic 7)
Provided feedback on Gas Transition Study scoping and preliminary analysis of
infrastructure impacts associated with gas decommissioning (Topics 9 & 11)
In addition, to the highlights above, the UAC worked to refine its role and how it provides its
advice to City Council that staff expect to build upon in FY 2027. The UAC successfully aided in
the Finance Committee’s discussion of rate setting and has identified a desire to collaborate
more closely with potentially scheduling a joint session in the next year.
ANALYSIS
Staff is working to prepare a draft UAC workplan for FY 2026-2027 based on standing items for
the Commission. In addition, Utilities Advisory Commissioners were surveyed for proposed FY
2026-2027 priorities for the UAC to consider. A draft workplan and responses received will be
published May 28, 2026. Upon development and approval of the UAC workplan by the
Commission, it will be brough forward to the City Council for review and approval to ensure
1 City Council, February 2, 2026, Item 7
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=85342&dbid=0&repo=PaloAlto&searchid=c819f75e
-9f1b-487c-914f-fe8131bdca15
Item #3
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Item No. 3 Page 3 of 3
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alignment of priorities and resources in Fall 2026. The revised workplan should align with the
Palo Alto Municipal Code Purpose and duties for the UAC 2.23.0503.
Achieve Near-Term Priority Housing Milestones
Cubberley Acquisition and Renovation Funding
Enhance Business Vibrancy
Government Efficiency
FISCAL/RESOURCE IMPACT
ATTACHMENTS
AUTHOR/TITLE:
3 Palo Alto Municipal Code 2.23.050 https://codelibrary.amlegal.com/codes/paloalto/latest/paloalto_ca/0-0-0-
61366
Item #3
Packet Pg. 13
Date: June 3, 2026
12-MONTH ROLLING CALENDAR
FORECAST
Utilities Advisory Commission City Council
CCM – City Council Meeting
June 3, 2026
• Commission Norms
• UAC Work Plan
• Informational Report Update on Time of Use
• FY 2027 Utility Rates and 5-year Forecasts
(ACTION)
• FY 2027 Utilities Operating and CIP Budget
• Commercial Efficiency and Electrification Program
• Commercial Customer Characterization Tool &
Commercial Electrification Technical Assistance
Programs
• Urban Water Management Plan (ACTION)
• Permanent Water Use Ordinance
• Sanitary Sewer CCTV
• Approval to Extend Existing Contract Number
C24185875 with Woodard and Curran, Inc. for
Hydraulic Modeling Support for Wastewater
Engineering Services
• Utility Underground Box Manufacturer
Prequalification Process and Authorization with
Jensen Precast and Oldcastle Infrastructure
• Recommended Changes to Purchasing Thresholds
July 1, 2026
• FTTP Pilot Report Out
• FY 2026 - Q3 Report, Informational
• Grid Mod Project Update
• Approval of Third Phase Agreement with
UAC SUMMER BREAK • FTTP Pilot Report Out (FCM & CCM)
• Sewer Lateral Replacement Project
• Adobe Creek Transformer 21
• CLEAResult for Residential Energy Efficiency and
Electrification
• Approval of Bond Financing for Grid
Modernization Project (FCM)
• Refinancing of the 2009A Water Revenue Bonds
(FCM)
• North American Energy Standards Board (NAESB)
Agreement with JPMorgan Chase Bank, N.A
• Approval of Third Phase Agreement with
Northern California Power Agency (FCM &CCM)
• Fiber Mat'l Contract 4352F Reel & Fiber Const &
September 2, 2026
• Placeholder: Time of Use Update
• Placeholder: Long Duration Resiliency
• Substations’ Electric Equipment and Structures
Painting Contract
• Approval of Bond Financing for Grid
Modernization Project
•
Item #A
Packet Pg. 14
• Placeholder: Approval of the City of Palo Alto’s
Updated 2027 Water, Gas, and Wastewater
October 7, 2026
• FY 2026 – Q4 Report, Discussion
November 2026 November 4, 2026
• FY 2027 Preliminary Rates
• Placeholder: Legislative Updates
Long Duration Resiliency
December 2026 December 2, 2026
• Informational Report on the Annual Review of the
City’s Renewable Procurement Plan, Renewable
Portfolio Standard Compliance, and Carbon
•
• Informational Report on the Annual Review of the
City’s Renewable Procurement Plan, Renewable
Portfolio Standard Compliance, and Carbon
Neutral Electric Supplies for 2025
January 6, 2027
• Placeholder: FY27-Q1 Quarterly Informational
Report
• Placeholder: Utility Guidelines
February 2027
March 2027
• Placeholder: FY2028 Water Rates and 5 Year
Forecasts
• Placeholder: FY2028 Wastewater Rates and 5
•
Forecasts (FCM)
• Placeholder: FY2028 Wastewater Rates and 5
Year Forecasts (FCM)
April 7, 2027
• Placeholder: Election of the UAC Chair and Vice
Chair
• Placeholder: FY2028 Electric Rates and 5 Year
Forecasts
• Placeholder: FY2028 Gas Rates and 5 Year
•
Forecasts (FCM)
• Placeholder: FY2028 Gas Rates and 5 Year
Forecasts (FCM)
Council Recap on Utilities Items – May 2026
Approved By Council & Finance Committee:
• FY 2027 Utilities Operating and CIP Budget (FCM)
• Approval of Contract Amendment No. 4 to Contract C19174648A with VertexOne
Recurring Items Items to Be Scheduled
• Educational Update on any Type of New Technology or Terminology
• Projects with a Resiliency Component
• Quarterly Reports (Q1-3 Info Rpts)(Q4 Discussion Summary of the year)
o Financial Report
o Utilities Programs Update
Informational EV Charger Installation Updates
Informational Bucket 1 REC Sales Updates
Informational Fiber Updates
• Rates and Financial Forecast
• Utilities Budget
•
Item #A
Packet Pg. 15
Page 1 of 4
Utilities Advisory Commission
Staff Report
From: Alan Kurotori, Director Utilities
Lead Department: Utilities
Meeting Date: June 3, 2026
Report #: 2605-6329
TITLE
Informational Update on Enrolling Customers in the Voluntary Residential Electric Utility Time-
of-Use (E1-TOU) Rate
RECOMMENDATION
This is an informational report on the progress of the City of Palo Alto Utilities (CPAU)
implementation of a voluntary residential electric utility service Time-of-Use (E1-TOU) Rate. No
action is required.
EXECUTIVE SUMMARY
On September 15, 2025, the Palo Alto City Council approved a voluntary residential
electric utility service Time-of-Use rate schedule (E-1 TOU), effective January 1, 2026.1 On
October 1, 2025, staff discussed the TOU implementation and communication plan with
the Utilities Advisory Commission (UAC).2
CPAU enrolled seven customers in the voluntary TOU rate in February 2026, an additional
three customers in April, and four customers in May. As of May 2026, fifteen more
customers have expressed interest in enrolling in TOU. CPAU intentionally planned a
small, phased enrollment period for TOU to validate billing accuracy, test integration with
utility billing systems and verify the presentment of TOU rate on utility bills and in the
online utilities account management system, MyCPAU. Attachment A provides an
illustration of how the TOU rate will display in the MyCPAU customer portal.
1 Staff Report 2505-4750; https://cityofpaloalto.primegov.com/viewer/preview?id=0&type=8&uid=031339b2-
900e-422e-96c0-b5a0be11056b
2 Staff Report 2508-5128 (page#73);
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=11770&dbid=0&repo=PaloAlto&searchid=d60e7ed
5-040c-4522-842a-a6b31aa090a7
Item #C
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Page 2 of 4
CPAU successfully produced utility bills displaying the new TOU rate for enrollees in March
and April. However, full implementation including the ability to accurately display the
TOU rate on the MyCPAU portal has taken longer than anticipated due to the complexity
of integrating various billing systems. Staff are working with vendors on this matter and
expect to resolve it by July 2026. As a result, staff have delayed enrollment and marketing
campaign for the TOU rate until calculation and presentment of TOU rate are accurately
displayed in the MyCPAU portal. The initial timeline for opening TOU enrollment to all
residential customers was July 2026. Staff currently plan to open enrollment and market
TOU more broadly to customers as part of a mass marketing campaign in August 2026.
Item #C
Packet Pg. 17
Page 3 of 4
noted that solar NEM1 customers are unlikely to benefit from enrolling in the TOU rate.
For customers who are unable to substantially shift their current loads away from the
high-cost 4 p.m. to 9 p.m. on-peak periods, the TOU rate is most monetarily beneficial for
households with electricity consumption of greater than 600-800 kilowatt hours (kWh)
per month. For customers with lower electricity consumption of less than 600 kWh per
month who are unable to shift away from the on-peak period, it would be beneficial to
remain on the standard residential electric utility service rate (E-1).
FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
Item #C
Packet Pg. 18
Page 4 of 4
The TOU rate was approved by the City Council in September 2025. Staff discussed the TOU
implementation plan with the UAC on October 1, 2025. Staff plan to publicize the TOU rate,
including the environmental and cost benefits, to customers once enrollment opens in August
2026.
ENVIRONMENTAL REVIEW
ATTACHMENTS
AUTHOR/TITLE:
Item #C
Packet Pg. 19
8
9
2
5
Attachment A: Illustration of TOU Displayed in the MYCPAU Customer Portal
Item #C
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8
9
2
5
Illustration of Daily Consumption Chart
Item #C
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8
9
2
5
Illustration of Monthly Consumption Chart
Item #C
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Attachment B: Sample Customer Communication Materials
Sample Removable Cling Sticker for Time-of-Use Rates
Appliance Application Example of Removable Cling Sticker for Time-of-Use Rates
Item #C
Packet Pg. 23
Persons with disabilities who require materials in an appropriate alternative format,
auxiliary aids, or modifications to policies or procedures to access City meetings,
programs, or services should contact the City’s ADA Coordinator George Hoyt at
(650) 329-2550 or by emailing ADA@paloalto.gov.
8/25 Printed on 100% post-consumer recycled paper, bleached without chlorine
PUT YOUR APPLIANCES
IN MIDDAY MODE.
Introducing a new Time-of-Use electric rate!
A Time-of-Use (TOU) rate is a type of utility billing arrangement in which the amount you
pay for electricity changes based on the time of day you use power. With the current
residential electric billing (E-1) rate, you pay the same amount for electricity regardless of
when you use it.
With the new TOU rate (E-1-TOU), your electric rate changes based on when you use power:
Highest rates (Peak): 4 PM-9 PM
Lowest rates (Super Off-Peak): 9 AM-3 PM
Mid-range rates (Off-Peak): All other times
Palo Alto Utility customers have the choice of staying on the E-1 rate or
switching to the new rate. The TOU rate works best for customers who:
Curious about how TOU may impact your bill?
Email utilitiescustomerservice@paloalto.gov with your address for a custom TOU bill
impact assessment. We’ll analyze your past 6-12 months of usage to show how
the TOU rate could affect your bill.
Starting January 1, 2026, customers can enroll for a TOU rate plan by completing
our online enrollment form.
Learn more at paloalto.gov/TOU
Use more than
800 kilowatt hours
(kWh) per month
Have an electric
vehicle (EV) or plan
to get one
Can shift major
electricity use to
9 AM-3 PM
Want to support
clean energy and
grid decarbonization
Sample Utility Bill Inserts Item #C
Packet Pg. 24
Persons with disabilities who require materials in an appropriate alternative format,
auxiliary aids, or modifications to policies or procedures to access City meetings,
programs, or services should contact the City’s ADA Coordinator George Hoyt at
(650) 329-2550 or by emailing ADA@paloalto.gov.
8/25 Printed on 100% post-consumer recycled paper, bleached without chlorine
HIT THE SWEET SPOT FOR
LOWER ENERGY COSTS.
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hours with typicall
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9:00 a.m.
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Introducing a new Time-of-Use electric rate!
A Time-of-Use (TOU) rate is a type of utility billing arrangement in which the amount you
pay for electricity changes based on the time of day you use power. With the current
residential electric billing (E-1) rate, you pay the same amount for electricity regardless of
when you use it.
With the new TOU rate (E-1-TOU), your electric rate changes based on when you use power:
Highest rates (Peak): 4 PM-9 PM
Lowest rates (Super Off-Peak): 9 AM-3 PM
Mid-range rates (Off-Peak): All other times
Palo Alto Utility customers have the choice of staying on the E-1 rate or
switching to the new rate. The TOU rate works best for customers who:
Curious about how TOU may impact your bill?
Email utilitiescustomerservice@paloalto.gov with your address for a custom TOU bill
impact assessment. We’ll analyze your past 6-12 months of usage to show how
the TOU rate could affect your bill.
Starting January 1, 2026, customers can enroll for a TOU rate plan by completing
our online enrollment form.
Learn more at paloalto.gov/TOU
Use more than
800 kilowatt hours
(kWh) per month
Have an electric
vehicle (EV) or plan
to get one
Can shift major
electricity use to
9 AM-3 PM
Want to support
clean energy and
grid decarbonization
Item #C
Packet Pg. 25
Persons with disabilities who require materials in an appropriate alternative format,
auxiliary aids, or modifications to policies or procedures to access City meetings,
programs, or services should contact the City’s ADA Coordinator George Hoyt at
(650) 329-2550 or by emailing ADA@paloalto.gov.
8/25 Printed on 100% post-consumer recycled paper, bleached without chlorine
INTRODUCING A NEW
TIME-OF-USE ELECTRIC RATE!
9:00 AM-3:00 PM is your time to maximize your
electric consumption, reducing costs and emissions.
A Time-of-Use (TOU) rate is a type of utility billing arrangement
in which the amount you pay for electricity changes based on the time of day you
use power. With the current residential electric billing (E-1) rate, you pay the same
amount for electricity regardless of when you use it.
With the new TOU rate (E-1-TOU), your electric rate changes based on
when you use power:
Highest rates (Peak): 4 PM-9 PM
Lowest rates (Super Off-Peak): 9 AM-3 PM
Mid-range rates (Off-Peak): All other times
Palo Alto Utility customers have the choice of staying on the E-1 rate or
switching to the new rate. The TOU rate works best for customers who:
Curious about how TOU may impact your bill?
Email utilitiescustomerservice@paloalto.gov with your address
for a custom TOU bill impact assessment. We’ll analyze your past 6-12 months
of usage to show howthe TOU rate could affect your bill.
Starting January 1, 2026, customers can enroll for a TOU rate plan
by completing our online enrollment form.
Learn more at paloalto.gov/TOU
Use more than
800 kilowatt hours
(kWh) per month
Have an electric
vehicle (EV) or plan
to get one
Can shift major
electricity use to
9 AM-3 PM
Want to support
clean energy and
grid decarbonization
Item #C
Packet Pg. 26
Time-of-Use Webpage with Frequently Asked Questions
www.paloalto.gov/TimeofUse
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Item #C
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Utilities Advisory Commission
Staff Report
Report Type: APPROVAL OF MINUTES
Lead Department: Utilities
Meeting Date: June 3, 2026
Report #:2605-6364
TITLE
Approval of the Minutes of the Utilities Advisory Commission Meeting Held on May 6, 2026
RECOMMENDATION
Staff recommends that the Utility Advisory Commission review and approve the May 6,2026
minutes.
Commissioner ______ moved to approve the draft minutes of the May 6, 2026 meeting as
submitted/amended.
Commissioner ____ seconded the motion.
ATTACHMENTS
Attachment A: May 6, 2026 Draft Minutes
APPROVED BY:
Alan Kurotori, Director Utilities
Staff: Belle Farias, Administrative Associate III
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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.
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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.
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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.
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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.
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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
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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-
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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.
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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.
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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
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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
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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,
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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.
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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
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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
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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.
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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.
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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.
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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
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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:
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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
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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
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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
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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. 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.
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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.
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9
9
0
8
Utilities Advisory Commission
Supplemental Memo
From: Alan Kurotori, Director of Utilities
Meeting Date: June 3, 2026
Item Number: 3
Report #:2605-6417
TITLE
SUPPLEMENTAL REPORT: Review and Recommend Utilities Advisory Commission FY 2026-2027
Work Plan for City Council Approval
BACKGROUND/ANALYSIS
Attached are 1) a draft workplan for FY 2026-2027 and 2) a compilation of all suggested
workplan items submitted by six of the Commissioners.
Draft workplan for FY 2026-2027:
This draft workplan takes on a new format, to align with the City Council priorities and
objectives setting annual process. Each objective is intended to reflect what the action of the
UAC would be during the course of the year and have been referenced back to the duties of the
UAC as outlined in the Palo Alto Municipal Code (PAMC). Staff did work to address some of the
feedback Commissioners provided in the draft workplan objectives to align with what is
achievable in a 12 month time period, given current resources, and the City Council’s priorities
and adopted objectives for 2026.
In addition to the objectives a few themes were apparent as priorities across the majority of
Commissioner feedback that would consistently inform the completion of the objectives:
affordability and competitiveness of Palo Alto Utility rates, and reliability of utility services and
infrastructure.
Commissioner Suggested Workplan Items:
Six Commissioners submitted workplan feedback by today May 28, 2026 and these are included
in Attachment B in alphabetical order. In reviewing the inputs, there appears to be broad
alignment in a few topic areas:
A cohesive energy transition plan, as work continues to evaluate the transition of the
gas utility to inform timelines for electric grid capacity and investments.
Water cost and management by regional bodies (SFPUC and BAWSCA)
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Fiber to the Premises and an opportunity to advise on key performance indicators (KPIs)
and any investment beyond the initial pilot area prior to continued build out in the
Phase I area
Review of CIP investments, specifically in the wastewater utility area, to meet utility
service needs and inform rates
Review how UAC operates as a body and its effectiveness in advisory to the City Council
ATTACHMENTS
Attachment A – FY 2026-2027 DRAFT UAC Workplan
Attachment B – Commissioner Workplan Feedback
APPROVED BY:
Alan Kurotori, Director of Utilities
Staff: Kaylee Burton, Utilities Administrative Assistant
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UAC Purpose & Duties:
The purpose of the utilities advisory commission shall be to advise
the city council on present and prospective long‐range planning and
policy and major program and project matters relating to the electric
utility, gas utility, water utility, wastewater collection utility, fiber
optics utility and recycled water matters, excluding daily operations.
See PAMC UAC Purpose & Duties 2.23.050
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Review and recommend to City Council FY 2028 rate changes to Water (including advise on a new Cost of Service Study), Gas, Electric
(including Time of Use Rates), Wastewater Collection, and Fiber Optic Services. (PAMC 2.23.050.(b).(4))
Utility Advisory Commission Annual Workplan ‐ FY 2027 [DRAFT]
City Council Priorities 2026:
FY 2027 DRAFT OBJECTIVES
Staff expects to complete the gas transition study including capital investment criteria for a managed transition ‐ enables review of
baseline infrastructure maps that explore potential targeted electrification utilizing selection criteria aligned with state level
(CPUC/SB1221) frameworks. (PAMC 2.23.050.(b).(1).(A) & 2.23.050.(b).(4))
Advise on updates to ensure Water Utility regulatory compliance such as but not limited to the Risk and Resiliency Assessment (RRA)
and emergency response and preparedness plan. (PAMC 2.23.050.(b).(2))
Review and advise on reserve policies changes informed by the Baker Tilly Utility Reserve Assessment, that balance the need to be
attractive to private markets and rates that are affordable to residents and competitive to businesses, for inclusion in the FY 2028 rate
setting. (PAMC 2.23.050.(b).(4))
Procure New Power Purchase Agreements or other supplies to ensure electric supply contracts are cost‐effective, and aligned with the
City's long‐term electric portfolio strategy. (PAMC 2.23.050.(b).(2))
Advise on funding and financing strategies for S/CAP for City Council consideration (see S/CAP 2026‐2027 Work Plan Item CA13) and
advise on revision to current Carbon Neutral and Cap and Invest (C&I) funding City Council spending resolutions to clarify uses balancing
S/CAP strategies, long term affordability, and decarbonization incentives. (PAMC 2.23.050.(b).(5)
Annual report on customer survey results, communication methods, and new initiatives for the year (e.g. implementation of leak
notifications), including review of effectiveness of engagements to inform continued iterative changes. (PAMC 2.23.050.(b).(5).(c))
Provide advise to the BAWSCA Board Director (Vice Mayor Stone) clearly communicating UAC's recommendation for Palo Alto’s
perspectives and priorities regarding San Francisco Public Utilities Commission water policies. (PAMC 2.23.050.(b).(1).(B))
Review Fiber to the Premises (FTTP) pilot results including use of key performance indicators (KPI) to inform a recommendation to
continue the build out of the whole FTTP phase 1 expansion geographic area. (Examples of KPIs include: take rate, customer satisfaction,
cost per passing, financial forecast projection) (PAMC 2.23.050.(b).(5))
Develop policies and fee and rate structures specifically for large electric load growth including but not limited to a financial charge for
the reservation of electric system capacity, expansion of the large non‐residential electric rate (E‐7) or new rate structure for large
commercial loads within Palo Alto. (PAMC 2.23.050.(b).(1) and 2.23.050.(b).(4))
Recommend FY 2028 and five year capital improvement program including projects to be included, timing of the projects, pace of
infrastructure replacements, and use of financing mechanisms vs pay‐go to ensure affordability across the five year rate projections and
financial plans. (PAMC 2.23.050.(b).(4))
Review and evaluate preliminary results of the E‐1 Electric Utility time of use rate design on energy usage patterns to inform further
implementation to the full Palo Alto community, financial impacts. (PAMC 2.23.050.(b).(2) and 2.23.050.(b).(4))
Report on and seek advisory positions on legislative proposals at the local, state and federal level impacting any of the five utilities
through new laws, regulations, or ordinances. (PAMC 2.23.050.(b).(3))
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2.23.050 Purposes and duties.
(a) The purpose of the utilities advisory commission shall be to advise the city council on present and prospective long-
range planning and policy and major program and project matters relating to the electric utility, gas utility, water utility,
wastewater collection utility, fiber optics utility and recycled water matters, excluding daily operations.
(b) The utilities advisory commission shall have the following duties:
(1) Advise the city council on long-range planning and policy matters pertaining to:
(A) Development of the electric utility, gas utility, water utility, wastewater collection utility, fiber optics utility, and the
recycled water resource;
(B) Joint action projects with other public or private entities which involve, affect or impact the electric utility, gas utility,
water utility, wastewater collection utility, fiber optics utility, and the recycled water resource;
(C) Environmental aspects and attributes of the electric utility, gas utility, water utility, wastewater collection utility, fiber
optics utility, and the recycled water resource;
(D) Water and energy conservation, energy efficiency, and demand side management; and
(E) Recycled water matters not otherwise addressed in the preceding subparagraphs (A) through (D);
(2) Review and make recommendations to the city council on the consistency with adopted and approved plans, policies,
and programs of any major electric utility, gas utility, water utility, wastewater collection utility, fiber optics utility, or the
recycled water resource;
(3) Formulate and review legislative proposals regarding the electric utility, gas utility, water utility, wastewater collection
utility, fiber optics utility and the recycled water resource, to which the city is a party, in which the city has an interest, or by
which the city may be affected;
(4) Review the electric utility, gas utility, water utility, wastewater collection utility, and fiber optics utility capital
improvement programs, operating budgets and related reserves, and rates, and the recycled water program, budget, and
rate, and thereafter forward any comments and recommendations to the finance committee or its successor;
(5) Provide advice upon such other matters as the city council may from time to time assign.
The utilities advisory commission shall not have the power or authority to cause the expenditure of city funds or to bind the
city to any written, oral or implied contract.
(c) The utilities advisory commission may, subject to its city council-approved bylaws and at the discretion of the city
council, foster and facilitate engagement with the general public, not excluding representatives of commerce and industry, in
regard to the utility matters referred to in subsections (b)(1)(A) through (E).
(Ord. 5096 § 1, 2010: Ord. 4938 § 1, 2007: Ord. 4027 § 1 (part), 1991)
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ATTACHMENT B
Utility Advisory Commissioner Suggestions for Workplan Objectives
Suggestions received as of May 28, 2026
Review the attached report which includes a list of suggestions from the UAC Commissioners
regarding the Commission Annual Workplan. The previously published staff report noted that
Commissioner input would be published as a late packet report for the June 3 Utility Advisory
Commission meeting. The suggested changes for the workplan are typically discussed at the
Commission in relationship to changes to the annual workplan that ultimately is sent to the full
City Council for approval.
Staff received responses from 5 Commissioners regarding the Annual Workplan for the UAC.
The responses are listed below in alphabetical order.
Croft:
1. Time of Use Rates: Roll out and promote TOU rates to the full Palo Alto community,
conduct new COSA if needed to fine tune rates. Design and extend offering for NEM
customers. Measures/metrics of Success:
# of households signed up
% of households signed up (5% goal in within the year)
Average, high and low $ savings / excess spend on electricity / month by
participating households
Quantify shifts in usage
Implement and report on initiatives to help customers shift load (eg. Point
customers to efficient timer-equipped appliances, develop case studies, educate
re: residential battery storage)
2. Electric Affordability / Advantageous Regional Pricing: Pursue ways to limit electricity
price increases and maintain substantially cheaper prices than surrounding cities, while
remaining carbon neutral. Keeping rates low will help affordability, encourage
electrification and be attractive to commercial tenants, supporting PA’s employment,
daytime population and tax base. Measures/metrics of Success:
Price discount relative to surrounding PG&E communities (maintain or improve)
Long term price trajectory stays under inflation
Electricity portfolio review: Add PPAs to fill out power needs, % exposure to
market purchases and impact on rates
Explore investing in positive NPV battery projects
Add efficient (not wasteful) electric load provided it doesn’t increase prices:
o Recruit small-medium datacenters
o Enabling more EV charging in PA (residential and employee charging,
charging stations)
o Transition gas use to electric (residential, commercial, government)
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ATTACHMENT B:
Utility Advisory Commission Suggestions for Workplan Objectives
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3. Utility Modernization and Communication: Develop means of communicating regularly
by email or text with all customers to build awareness of utility initiatives, incentives,
the AMI portal, SCAP goals, and notification in emergencies. For customers refusing to
giving contact info, develop annual mailer. Implement water and gas leak notifications
for all customers (opt-out). Measures/metrics of Success:
% of customers with email/cell # on file (goal: 100%)
% of customers visiting MYCPAU (goal: at least 50% within the next year)
% of customers registered to receive leak notifications (goal 100% - opt out)
Report to UAC on communications completed and result/response
Provide households/businesses with an annual report on usage, opportunities to
decarbonize, efficiency opportunities, other important utility initiatives
Gupta:
1. Rate Affordability & Transparency: Combined median bill on track from $442.60 →
~$638/mo by FY 2031 (+~44%), before Baker Tilly (additional +2–8% to +20–26%), gas
decommissioning recovery, or further SFPUC pass-through. No standing combined-bill
view exists.
#Action Cadence Owner Target
1.1 Direct staff to include a combined-bill
scorecard in every rate report brought to
UAC
Recurring Staff Every rate
report
1.2 Receive a phased Baker Tilly implementation
plan with explicit dollar ceilings and forward
UAC's recommendation
One-time Staff →
UAC
Before FY
2028 rate
adoption
1.3 Direct staff to publish a bill-burden analysis
by income segment (10th/25th/50th/75th
percentile + State Low-Income threshold)
Annual Staff Timed for
Rate
Assistance
Program
scoping
1.4 Adopt an annual UAC CIP prioritization
review through an affordability lens
Annual UAC +
Staff
Each budget
cycle
1.5 Direct staff to present a resident
communication plan ahead of every major
rate decision
Recurring Staff Ahead of
each major
rate decision
2. SFPUC & BAWSCA: Water rates ~52% cumulative FY27–FY31, with SFPUC 6–7× forecast
misses, an 8.5-year Design Drought lacking 1,100-year tree-ring analog, and a 2025 WSA
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Utility Advisory Commission Suggestions for Workplan Objectives
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Amendment whose cost to Palo Alto was presented ~5× lower than the audited-data
calculation. Palo Alto does no independent vetting.
#Action Cadence Owner Target
2.1 Direct staff to apply more defensible
reliability assumptions in UWMP and water
planning (document SFPUC inputs;
sensitivity-test against observed-data and
Bay-Delta Plan scenarios)
One-time Staff Starting with
current
UWMP cycle
2.2 Adopt a recurring UAC docket to review
BAWSCA/SFPUC rate filings, CIP, drought
modeling, MPQ changes
Recurring UAC +
Staff
Every UAC
meeting
where action
arises
2.3 Recommend that Council revisit the 2025
WSA Amendment and adopt a cost-causer-
pays principle for future BAWSCA cost-shifts
One-time Council Before
BAWSCA Dec
2026
deadline
2.4 Convene a UAC-hosted public water forum
including Drekmeier alongside BAWSCA /
SFPUC staff
One-time UAC During FY
2026–27
2.5 Lead UAC outreach to fellow BAWSCA
member agencies on shared regional review
Ongoing UAC Starting Q1
FY 2027
3. Energy Transition Coherence: Gas and electric being planned under different implicit
electrification assumptions, with no published reconciliation. $71M over 5 years in gas
CIP alongside $375–$450M Grid Mod; decommissioning costs removed from rate
forecast; no stranded-asset range.
#Action Cadence Owner Target
3.1 Direct staff to produce a single integrated
20-year energy-transition plan reconciling
Grid Mod sizing with gas decommissioning
timeline
One-time Staff By end of FY
2027
3.2 Direct staff to publish a stranded-asset range
(2040 / 2045 / 2050) before further
discretionary gas CIP
One-time Staff Before next
gas CIP
approval
3.3 Direct staff to design a small-scale gas
decommissioning pilot (defined assets reach
end of life without replacement; customers
transitioned to electric)
One-time Staff Design in FY
2026–27;
pilot launch
FY 2028
3.4 Direct that Grid Mod CIP include adoption-
triggered investment gates
One-time Staff Before FY
2028 CIP
adoption
3.5 Adopt a UAC practice of classifying every gas
CIP item discretionary vs. mandatory
Annual UAC +
Staff
Each CIP
review
4. Wastewater: Steepest cumulative rate trajectory of any utility (~57% FY27–FY31);
Headworks Replacement doubled to ~$103M, slipped to 2031; $153.8M SRF debt. UAC's
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Utility Advisory Commission Suggestions for Workplan Objectives
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charter covers collection only; treatment sits at the regional RWQCP without dedicated
commission oversight. Emerging PFAS and microplastics regulation is on a clear federal +
California trajectory; current CIP is being designed without baseline data.
#Action Cadence Owner Target
4.1 Recommend that Council convene a formal
wastewater governance review (UAC, Public
Works, or dedicated commission)
One-time Council During 2026
4.2 Adopt a standing Headworks oversight
cadence at UAC
Quarterly UAC +
Staff
Through 2031
completion
4.3 Direct staff to establish a budgeted
microplastics + PFAS influent/effluent
monitoring program at RWQCP
Annual Staff Annual public
reporting
5. Fiber to the Premises: Council approved the program in 2022 and appropriated
reserves; the pilot has slipped from 2024 → 2025 → service launch in/around March
2026 (now). The work for FY 2026–27 is ensuring staff has the resources and visibility to
succeed on both build/operate and marketing, so the pilot generates the data Phase 1
needs and the program reaches citywide.
#Action Cadence Owner Target
5.1 Adopt a standing FTTP execution scorecard
at every UAC meeting with KPIs and
thresholds defined in advance
Monthly UAC +
Staff
Every UAC
meeting
5.2 Adopt a standing FTTP marketing scorecard
at every UAC meeting with its own KPIs
defined in advance
Monthly UAC +
Staff
Every UAC
meeting
Mauter:
Review the performance of the recycled water utility and advise on any modifications to City
strategy around recycled water.
Review the capital improvement plans and operating expenses for the wastewater utility in
support of preparing for future rate increases and identifying potential cost saving measures.
Metz:
1. Gas Utility Long-term business strategy: Develop a comprehensive 10–20-year business
plan for the gas utility that addresses strategic, financial, operational, organizational and
resource concerns, and incorporates external forces including electrification,
sustainability, future costs and the revenue stream to the City of Palo Alto.
FY 2027 Success Metrics:
Completion of a draft strategic plan and submission to City Council
2. Electric Utility business strategy and strategic planning process: Develop a flexible
scenario-based business strategy that incorporates impacts on CPAU of increased and
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highly uncertain demand from data centers and other loads, both within CPAU territory
and throughout CAISO: How should CPAU respond? How will it manage and shape
future demand to minimize surprises for the benefit of ratepayers? How will it manage
generation and delivery of electricity, and maintain required reserves?
FY 2027 Success Metrics:
Completion of a draft strategic plan and submission to City Council
Establishment of process for rapid assessment of future demand impacts, and
revision of strategy and generation / delivery options.
3. Improve UAC operational effectiveness: Improve how UAC operates so that UAC can
better advise City Council. UAC often receives recommendations for action only a few
days before meetings on topics that require much more than 1 week of review and
analysis for informed decision-making and effective action. UAC needs an operational
process that anticipates recurring deliverables and provides adequate review structure
and lead time for proper review, assessment, and decision-making.
FY 2027 Success Metrics:
Completion of a plan for improving UAC operation.
Implementation of the improved process and structure for selected issues, e.g.,
use of ad hoc committees for pre-assessment before UAC action.
Process review and refinement.
4. Emergency preparedness: As agreed in 2025, advance emergency preparedness as part
of the Reliability, Resiliency, and Adaption standing topic.
FY 2027 Success Metrics:
Completion of actions agreed in 2025:
o Determination of the “design emergencies” to be used as the basis for CPAU
emergency preparedness.
o Establishment of CPAU’s risk assessment framework in coordination with
OES.
o Determination of CPAU’s roles and specific actions in each such emergency.
o Completion of action planning and implementation in coordination with OES.
5. Increase FTTP cash flow: Accelerate cash flow for CPAU’s FTTP program. Under the
current pilot approach, with large expenses and no revenue, FTTP is a cash sink. It
would be valuable to find ways to generate revenue now. Approaches might include
increased sales focus to rapidly sign-up customers, or faster-to-provision “last foot”
technology, such as radio, that could be installed and provisioned immediately to “light
up” our network of dark fiber throughout the City.
FY 2027 Success Metrics:
Revenue
Cash flow improvement.
Number of new customers signed up.
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Utility Advisory Commission Suggestions for Workplan Objectives
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Phillips:
1. Approve a comprehensive long-term strategy for PA Natural Gas consistent with the
Palo Alto SCAP.
2. Achieve a clear go/no go decision on Fiber to the Premises
3. Have a clear strategy for addressing potential demand for data centers within Palo Alto
including guidelines for when attracting data centers should be encouraged.
4. Review Reserve Management Polices and potentially change as needed.
5. Clearly communicate PA concerns regarding SFPUC Water Policies to BAWSCA and the
SFPUC.
1. GridMod — In my view, our $450M GridMod project — and the Electric strategy behind
it — should be Goal #1 of UAC. It’s the City’s biggest capex project (with RWQCP), yet
the need is not well enough understood, nor are the benefits. There’s a familiar claim
that half the project needs doing regardless, but that delineation is unclear. Nor is it
clear which parts of the grid are most in need of investment. I think UAC has seen no
heatmap showing hotspots and bottlenecks at the substation and feeder level. Time has
passed (2-3yrs) since the GridMod plan was devised, and in that time the cost and
availability of grid components have changed significantly — tariffs, shortages, upward
price pressure, etc. Meanwhile, the cost and viability of distributed resources (DER) like
BESS and grid storage (batteries) have changed. IMO, there’s need for more scrutiny of
GridMod and our electric strategy in light of all this — including on Commercial
customers, who represent the bulk of CPAU load, which is something UAC has long
asked for.)
2. Water — Water cost trends, environmental policy (e.g., BayDelta Plan) and Palo Alto's
stance toward SFPUC and regional water planning — these comprise the #2 priority.
UAC should make specific recommendations to Council on topics like:
What Palo Alto objectives should be vis-a-vis SFPUC and BAWSCA, and how
to advance them?
How to foster region-wide discussion on drought planning and AltWater
investment?
3. Gas Abandonment Plan — We should accelerate plans for shutting down gas. If it's a
City objective to transition off gas, then by when? And under what conditions would we
proceed? With what carrot/stick measures? What amount of Gas reserves will we need
to subsidize the switchover, and how will that impact rate increases? Discussions on
this topic to date have seemed vague.
4. Fiber — We should be in position to recommend a clear “Go, No go” decision on FFTP by
end FY’27. IMO this will require discussion more candid — about pricing, marketing,
take rates, etc. — than Staff has been willing/able to conduct in public meetings
5. UAC Internal Improvements — I put this at #5 … but IMO it hovers over all UAC
priorities. Items to discuss:
more use of TACs
improving staff reports & presentations
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ATTACHMENT B:
Utility Advisory Commission Suggestions for Workplan Objectives
Page 6 of 6
bringing more structure and monthly tracking to Director’s Report
clarifying the Advisory function to Council
improving UAC Minutes — more concise, more automated, better
highlighting of follow-up items
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