Utilities Advisory Commission
2024-2025 Workplan
Staff Liaison: Dean Batchelor, Director of Utilities
Lead Department: Utilities
About the Commission
The Utilities Advisory Commission (UAC) is charged with providing advice on long range planning and policy matters, acquisition, development, and financial review of electric, gas and water resources; joint action projects with other public or private entities which involve electric, gas or water resources; environmental implications of proposed electric, gas or water utility projects; and conservation and demand management. Additionally, the UAC is charged with providing advice on the acquisition, development and financial review of the dark fiber network and wastewater collection utilities. As a highly regulated industry, there may be matters not listed below th at will be presented to the UAC in accordance with current or future (local, state, or federal) legislative requirements.
The Commission is composed of 7 members.
Terms are for 3 years and commence on the first meeting in April .
See Palo Alto Municipal Code (PAMC) Sections 2.23.010 (Membership), 2.23.030 (Term of Office), 2.23.040 (Officers),
2.23.050 (Purpose and Duties), and 2.23.060 (Meetings) .
Current Commissioners
• Greg Scharff (Chair)
• Meagan Mauter (Vice Chair)
• Phil Metz
• Rachael Croft
• Robert Phillips
• Vacant
• Vacant
Mission Statement
The purpose of the Utilities Advisory Commission shall be to advise the C ity Council on present and prospective long-range planning , policy. major program , and project matters relating to the electric, gas, water, wastewater collection, fiber optics utilit ies, and recycled water matters, excluding daily operations.
The Utilities Advisory Commission shall have the following duties:
• Advise the City Council on long-range planning and policy matters pertaining to:
Joint action projects with other public or private entities which involve, affect or impact the utilities; Environmental aspects and attributes of the utilities ; Water and energy conservation, energy efficiency, and demand side management; and Recycled water matters not otherwise addressed in the preceding subparagraphs;
• Review and make recommendations to the City Council on the consistency with adopted and approved plans, policies, and programs of any major utilities;
• Formulate and review legislative proposals regarding the utilities, to which the city is a party, in which the city has an interest, or by which the city may be affected;
• Review the utilities capital improvement programs, operating budgets and related reserves, rates, and the recycled water program, budget, rate, and thereafter forward any comments and recommendations to the finance committee or its successor;
• 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.
The Utilities Advisory Commission may, subject to its C ity Council-approved bylaws and at the discretion of the C ity 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 above.
Prior Year
Accomplishments
Heat Pump Water Heater (HPWH) Pilot:
-687 customers have been signed up to participate
-200 customers have had completed installs
Advanced Meter Infrastructure (AMI)
-6,946 gas customers have had completed installs
-6,138 water customers have had completed installs
-5,766 electric customers have had completed installs
CA Renewable Energy Credits (REC's)
-Approved by Council on 12/12/2022 to continue t he program and return to the UAC and Council in 2025
Fiber-to-the-Premises (FTTP)
-Began coordinating grid mod project with FTTP
-Identified and began addressing key challenges
-Pilot to align grid mod project with FTTP
-CEQA Initial Study for FTTP
Electric Grid Modernization (Grid Mod)
An electric engineering study was completed identifying upgrades needed throughout the electric distribution system, this entails upgrading line transformer capacity, feeder capacity, increasing the number of switches and connections on the system between feeders and substations, and upgrading substation equipment.
Construction on the first modernization project is starting in Q2 2024 in a 1200-home neighborhood pilot area bounded by Louis, Amarillo, 101, and Embarcadero. The modernization projects will be coordinated with fiber to the premise construction.
To capitalize on synergies between GridMod and FTTP, a Pilot area combining both GridMod and FTTP project was identified, and the joint project boundary has been fixed. The GridMod design was contracted with consultant Entrust, and the design and engineering work for Phases 1-7 has been completed. Engineering staff is preparing construction documents which will be released to Operations for construction in the pilot area starting in May 2024. Equipment procurement is currently underway, with poles anticipated to be received by 04/30/2024, aerial secondary wire by 04/30/2024, and transformers expected by 06/30/2024. The target completion date for the Pilot is 12/30/2024.
Sewer System Replacement 31 (SSR31)
-Conducted successful outreach meeting with Barron Square HOA residents who have been impacted by the activity at the project’s laydown yard. The on-going communication has been effective to keep the Barron Square residents informed. -The portion of the work requiring 2-lane closure on El Camino Real was performed at night. No more nighttime work is anticipated on this project, unless unexpected condition dictates. -Continue with daytime work. The remaining work will be performed on El Camino Real between Fernando and Sheridan and on Page Mill Road between El Camino Real and Ramons Way. -Project is currently on track to be completed in May 2024, before Caltrans and County of Santa Clara’s paving projects start.
Water main replacements
9,893 Feet of water main replaced
252 services replaced
STANDING TOPIC 1:
Annual Budget - Rate changes to Water, Gas, Electric, Wastewater collection, and Fiber services.
BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /
COUNCIL-APPROVED
The community will have a better
understanding of the rates and why they
are being charged.
Rates are reviewed annually and each rate
change is determined by the COSA reports.
UAC review is in March, FCM review is in
April and CCM approval is in June
Staff time, Legal team review time,
Consultant time to create the COSA report.
Council approval of budget N/A
HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED
POLICY UPDATE
Rates are always a high priority. The change has an impact on the community and economy. N/A N/A
STANDING TOPIC 2:
Water Supply: Consider potential future sources of water supply. This includes recycled water, demand management programs, grey water, treatment efforts, and use of effluent.
BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /
COUNCIL-APPROVED
The benefit to the community is to have
ample water source and supply when
needed in the event of a drought or for
basic uses
This is not a single effort or project;
however, a year-round effort
Staff time, Legal team review time,
Consultant time for development of the One
Water Plan which is a holistic 20-year water
portfolio
Council approval of the One Water Plan
which includes adaptable, dynamic,
water supply portfolios.
N/A
HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED
POLICY UPDATE
Having knowledge of where the City's water supply is coming from and how we maintain that supply is a maintained priority..
N/A N/A
STANDING TOPIC 3:
Electric Supply: Consider updates to the electric supply portfolio and issues relating thereto.
BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /
COUNCIL-APPROVED
Reliability for customers, health benefits,
and clean energy responsible for the vast
carbon reduction the City has achieved
over the past decade
This is an ongoing regularly monitored
effort and does not have a start or
completion time
Approved budget, staff time, legal review
time, consultants as needed, and
technology
Release of RFP for more renewable
energy supply options in the Integrated
Resource Plan (IRP). Have the IRP near
completion to present to the UAC for
review and approval. Maintaining and
expanding the zero emissions portion of
the portfolio and carbon neutral plan.
N/A
HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED
POLICY UPDATE
The health and well being of the community is a high priority for Council and Utilities N/A N/A
STANDING TOPIC 4:
Gas Supply: Consider aspects of the gas supply portfolio and issues relating thereto
BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /
COUNCIL-APPROVED
Gas is a type of energy used to provide
some residence and businesses in Palo
Alto with heat for their facilities and some
cooking appliances.
This is not a single effort or project;
however, a year-round effort
Staff time, Legal team review time,
Consultant time when necessary
Utilities on average are 10% below
PG&E's rates year round
N/A
HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED
POLICY UPDATE
The health and well being of the community is a high priority for Council and Utilities N/A N/A
STANDING TOPIC 5:
Utilities CIP's: Discuss CIP projects.
BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /
COUNCIL-APPROVED
There are multiple CIP's throughout the
Utilities, each with their own benefits to the
City and the community from rebuilding
the water reservoirs, repairing and
replacing sewer lines or water mains,
maintaining street lights, building out the
fiber backbone, upgrading the meter
system to upgrading the outage
management system
Utilities has multiple projects in their Council
approved CIP budget. Most of these
projects are multi year based.
Staff time, Legal review time, Procurement
time for setting up contracts, contractors for
work completion
Utilities CIP success is completion of the
project within the timeline and budget that
was approved by Council.
N/A
HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED
POLICY UPDATE
Maintaining quality of life for the community creates the priority for Utilities projects N/A N/A
STANDING TOPIC 6:
Reliability,Resiliency and adaptation: Ongoing discussions regarding the reliability and resiliency of the utilities.
BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /
COUNCIL-APPROVED
This matter encompasses a number of
situations including but not limited to the
S/CAP program. The benefit of any of the
reliability or resiliency projects is to
support the City and community now and
into the future with reliable, safe
connections, water, electricity, fiber and
natural gas
These programs and projects are year
round and do not have a beginning or an
end. For example the S/CAP is set to
accomplish the goal by 2030
Budget approval, staff time, additional staff,
and some use of consultants
Maintaining a high level of efficient, safe,
economic, and reliable services.
YES
HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED
POLICY UPDATE
The S/CAP is a Council priority and therefore a High priority for the Utilities Advisory Commission to focus on
N/A N/A
STANDING TOPIC 7:
Legislative Initiatives: The Utility tracks many local, state and federal bills that touch on utilities. Should any new laws, regulations, or ordinances pass during the year, the UAC may need to discuss the changes.
BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /
COUNCIL-APPROVED
Staff tracks the possible changes in laws
and regulations and presents the
proposed changes to the UAC for review
and consideration to the Council.
Legislature meets throughout the year and
possible changes can occur at any point
that effect utilities
Staff time, travel, and legal review time This is a non-measurable project State Mandated
HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED
POLICY UPDATE
N/A The level of priority is based on the particular legislation being proposed and how it effects the regulated utilities
N/A
STANDING TOPIC 8:
Council Driven Initiatives: The UAC will address any matter assigned by the City Council.
BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /
COUNCIL-APPROVED
The UAC is made up of a diverse group
with insight of the innerworkings of and
vast knowledge in the utilities arena.
Timeline will be addressed once assigned UAC, Staff and legal review time Council approval of completed task YES
HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED
POLICY UPDATE
Typically when Council requests a review of an item it is considered a priority N/A N/A
Standing Topic 9:
S/CAP Support: Discuss community engagement, technology (current & emerging), finance, and community scaling of S/CAP plans to meet the City’s goals for sustainability and climate action. This includes electrification efforts, possible code modifications, potential full or partial retirement of the gas distribution system, and electrification of gas appliances. It also includes permitting and inspection processes for customers wishing to upgrade panels, electrify appliances, or install solar PV, energy storage, and/or EV charging systems.
BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /
COUNCIL-APPROVED
UAC expertise will help the Council S/CAP
Committee make progress on achieving
S/CAP goals with benefits to reducing the
impacts of climate change.
In these areas:
Ongoing support to the S/CAP Committee Staff time The development of clear plans for building electrification, including concrete
improvements to utility or permitting
processes resulting from UAC actions.
YES
HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED
POLICY UPDATE
Support S/CAP Committee goals to develop plans and improve processes for building electrification
Discussions of other forms of emissions reduction besides building electrification YES
FY2025 Topic 1:
One Water Plan
BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /
COUNCIL-APPROVED
Community will have a 20 – year
adaptable roadmap for implementation of
prioritized water supply and conservation
portfolio alternatives that can be used as
a water supply plan.
For Council approval in Fall 2024 Staff time, budget for consultant time, Legal team review time
Council approval of the One Water Plan
which includes an adaptable, dynamic
water supply portfolio.
N/A
HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED
POLICY UPDATE
The One Water Plan will serve as a long-term guide to prepare the City’s water supply for future uncertainties like multi-year drought, and climate change.
N/A N/A
FY2025 TOPIC 2:
Electric Grid Modernization and Fiber-to-the-Premises pilot project
BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /
COUNCIL-APPROVED
Pilot will inform staff how to align the
electric grid modernization and fiber -to-
the-premises project to help minimize
utility engineering pole make -ready work,
pole replacements, noise disruption, and
construction activity in neighborhoods,
Construction is scheduled to begin in April
2024 and expected to be completed by end
of 2024
Staff time, contractor time, and budget
Completion of construction of electric grid
modernization and fiber -to-the-premise
including upgrade of 4kV to 12kV
distribution system and offering Palo Alto
Fiber ISP to residents in the pilot area.
On or below budget
YES
HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED
POLICY UPDATE
Electric grid modernization will enhance reliability, resiliency, and capacity and enable electrification. Fiber-to-the-premises will provide fast, reliable, affordable, and city-owned fiber internet service to residents and businesses.
N/A N/A
FY2025 Topic 3:
Workforce: Discuss ongoing issues with hiring and retaining qualified utility workers.
BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /
COUNCIL-APPROVED
Having the ability to maintain a workforce
gains consistency in Utility maintenance,
and completion of Council approved CIP's
By the end of 2024 a succession plan will
be in place
Ongoing HR time, Utility staff time, budget Filling of all open positions with the right people
N/A
HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED
POLICY UPDATE
It is a high priority to fill these open positions in order to lower the overall cost of the Utilities.
If critical positions are filled, the need for having contract workers lowers the cost to serve the community.
N/A N/A
FY2025 Topic 4:
Tesla Project - $10M Upgrade to Hanover Substation
BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /
COUNCIL-APPROVED
Upgraded substation increases capacity
to facilitate electrification process.
Start October 2023, completion anticipated
September 2024
CPAU design review (1 FTE), construction
resource manager (FTE), engineering
support and inspection (1FTE each)
2 Fully upgraded 50 mva transformers N/A
HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED
POLICY UPDATE
Electrification and an increase of load by 30-50 mva. N/A N/A
FY2025 Topic 5:
Heat Pump Water Heater
BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /
COUNCIL-APPROVED
Reduces the use of natura l gas, by
reducing carbon emissions and improves
indoor air quality
December 31, 2024 Staff time, budget 1,000 HPWH’s installed by the end of 2024
YES
HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED
POLICY UPDATE
This is the 1st program for the community to start on the achievement to electrification by eliminating most gas appliances in CPA which is needed to reach the 80/30 goals N/A S/CAP policy
FY2025 Topic 6:
Gas Hedging
BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /
COUNCIL-APPROVED
Lowers the risk to the city by decreasing
the volatility of extreme high market
pricing that would be passed on to the
customer
UAC approval in May, Finance Committee
approval in June,
Council approval in August, and
Completion by October
Staff time, budget Execution of hedges for the appropriate winter months
Council
approval needed
HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED
POLICY UPDATE
Due to the need to have this implemented in order to execute the transactions in October for the winter months
N/A N/A
FY2025 Topic 7:
Gas Rate Design Review
BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /
COUNCIL-APPROVED
Gas rates that are cost -based,
constitutionally compliant and with an eye
toward competitiveness with gas rates in
neighboring communities.
Council approval in September 2024 Staff time, budget for consultant time, legal review time.
Gas rates that are competitive with
neighboring communities across
customer classes.
N/A
HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED
POLICY UPDATE
Rate impacts on Palo Alto residents and businesses. N/A N/A
FY2025 Topic 8:
Management of potential future gas commodity price spikes: Recommend revisions to the Gas Utility Long -term Plan (GULP) to include a strategy for mitigating the impact on customers of market price spikes
BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /
COUNCIL-APPROVED
Protect customers from short -term bill
impacts
For Council approval in Summer 2024 Staff time, Legal team review time Council approval of revised GULP. Yes
HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED
POLICY UPDATE
The revised GULP objectives and strategies will provide a framework through which short- term, unexpected commodity price spikes can be mitigated
N/A N/A
FY2025 Topic 9:
Electric Portfolio Rebalancing: Decision regarding the City’s large hydroelectric resource, the contract with the Western Area Power Administration (WAPA)
BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /
COUNCIL-APPROVED
The W APA contract accounts for half of
the City’s power needs in an average
hydro year. The City must take action to
renew the contract or reduce the amount
of power purchased under the agreement
in the future. Regulatory uncertainty and
climate change warrant an evaluation of
the contract which will be used to make a
recommendation to Council.
For Council approval in Summer 2024 Staff time, Legal team review time Council approval. N/A
HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED
POLICY UPDATE
N/A N/A