Dear Mayor and Council Members,
On behalf of City Manager Ed Shikada, please see staff responses below for questions from Council Member Tanaka on the Monday, March 18 Council Meeting.
Item 6: Adoption of a Resolution Approving an Edison Electric Institute Master Power Purchase
1. Can you explain the specific criteria used to select Silicon Valley Clean Energy for this master agreement over other potential suppliers and what positive benefits or qualitative changes they could bring to the group of energy suppliers?
Staff response: SVCE was not selected over any other potential suppliers, they were the only potential supplier who inquired about executing an EEI master agreement with us and completed negotiations on such. The City has an open process for getting enabled with new electric and gas master agreement counterparties, in which any credit-worthy supplier who will accept the City’s must-have master agreement provisions is welcome become a new master agreement supplier. SVCE met these criteria, and staff hopes they will become an active participant in the City’s solicitations for electricity products, yielding higher levels of competition and better pricing for the City in these efforts.
2. Was there an impact assessment on how this agreement would affect the city’s current and future energy portfolio, more specifically analyzing the potential benefits or drawbacks of diversification of energy suppliers?
Staff response: The City’s pool of enabled electricity counterparties has dwindled somewhat in recent years, as some formerly active counterparties have decided to stop engaging in the California energy markets. As such, staff sees only benefits (and no drawbacks) to expanding the City’s pool of active energy suppliers.
Item 7: Approval of Amendment No. 2 of C19171513 With CLEAResult Consulting, Inc.
1. Was an in-depth demand analysis based on empirical data that suggested the future need for EV charging stations, and if so, what were the key findings that suggested that current EV charging stations were being optimally used and Palo Alto needs more chargers?
Staff response: There has been an internal preliminary assessment made about EV charger needs. This 2021 internal assessment suggests the need for multiple fold increase in chargers by 2030 to meet demand in alignment with the goals of the S/CAP, which is to reduce emissions 80% by 2030. This need for a robust increase in EV charging infrastructure is in line with state’s EV charger needs assessment for meeting the 7 million EVs by 2030 goal. An update to the Palo Alto estimate is currently underway and results available in early 2025.
2. What measures have been taken by the city to assess the current electrical infrastructure's capability to support the increased load from additional EV chargers?
Staff response: An assessment was made on the electrical infrastructure needs to support both EV and building electrification needs. This analysis suggested substantial upgrade needs in residential neighborhoods. The Grid Modernization project, estimated at $200M+, is designed to upgrade the system to meet this increased need. At the February 12, 2024 Council Study Session on the Reliability and Resiliency Strategic Plan, various elements of grid modernization were discussed, including the capacity of the system to handle electrification. For the specific scope involved with this contract, site-specific analyses are conducted to ensure adequate infrastructure for individual installations.
Link to February 12, 2024 Study Session: Reliability and Resiliency Strategic Plan for the City’s Electric Utility:
https://cityofpaloalto.primegov.com/meetings/ItemWithTemplateType?id=4071&meetingT emplateType=2&compiledMeetingDocumentId=9079
3. Should the proposed approval go through, what impact would it have on Palo Alto residents currently dependent on EV charging stations, particularly concerning the cost of recharging and the availability of charging facilities?
Staff response: There will be no impact on electricity rates. The EV program is currently funded solely from revenues derived from the state’s LCFS program, and not from rate- payer funds. While the City does not manage the cost of charging as that is the domain of property owners and EV charging companies to set pricing parameters, this contract increases charger availability for the Palo Alto community. One of the S/CAP goals is to increase access to chargers for residents of multi-family properties by 10% by 2025. This contract puts the City on track to increase access from 4.7% currently to the 10% goal.
Item 8. Approval of a Professional Services Agreement (Contract No. C24190819)
1. Could you detail the mechanisms and systems in place for the Palo Alto community to provide feedback on Pets In Need and the services it may provide, especially since the incident of 7 puppies dying under PIN care during the previous contract? How will this feedback be considered and integrated into ongoing service evaluation and improvement efforts?
Staff response: Community members can provide feedback directly to City staff, the City Manager or City Council. Pets in Need has been discussed four times at Council since February 2022, which provided opportunities for feedback from the community. All comments received are considered and some have influenced the current agreement, for example the policy on handling of feral cats. City and PIN staff meet regularly and any concerns needing resolution are discussed at that time.
2. How were alternative service providers evaluated for animal sheltering services in Palo Alto following the operational challenges with Pets In Need, beyond the City already having prior contact with the business, and what considerations were made to identify a more cost-effective and efficient solution to fulfill the mandatory service requirements?
Staff response: Completion of this contract was at the direction of City Council. Staff presented options for alternative service delivery models on February 14, 2022, and the Council directed staff to proceed with negotiations for a long-term agreement with Pets in Need. A detailed analysis of an in-house model for shelter operations was presented to Council on March 27, 2023.
Item 10: Approval of Amended Palo Alto CLEAN Program Rules and Requirements
1. Given the significant amendments proposed to the Palo Alto CLEAN Program, especially regarding the rate structure of renewable energy resources, can you provide explicit details on the analytical processes used to determine the cost-effectiveness of these rates and how they fit into the current renewable energy market?
Staff response: Staff’s proposed changes to the CLEAN program are not intended to make any significant modifications to the overall program rate structure. Under the proposed staff changes, the program price would remain 16.5 cents/kWh for solar resources up to the participation cap of 3 MW (also unchanged), and the only change would be a slight increase to the “avoided cost” rate that is available to all non-solar renewable resources and to solar resources after the 3 MW participation cap is reached. For example, the contract price available to solar resources that select a 15-year contract term would increase from 8.8 cents/kWh to 9.5 cents/kWh, resulting in a cost impact of less than $25,000 per year to the City. These routine updates to the avoided cost level have been carried out numerous times in the years since the program’s launch.