City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: December 15, 2025
Report #:2509-5220
TITLE
Adoption of a Resolution Approving and Attesting to the Veracity of the City's 2024 Power Source Disclosure and Power Content Label Reports. CEQA Status: Not a project
RECOMMENDATION
Staff recommends that the City Council adopt a resolution (Attachment A) approving and attesting to the veracity of the City’s Power Source Disclosure reports and Power Content Labels for 2024.
BACKGROUND
Senate Bill 13051 was approved in 1997 to ensure that all retail suppliers of electricity disclose to consumers the sources of energy used to provide the electric service in an accurate, consistent, and easy to understand manner. The SB 1305 Report is commonly referred to as the Power Source Disclosure (PSD) report. The City of Palo Alto is required to submit an annual PSD report to the California Energy Commission (CEC) by June 1st of each year. The information contained in this report is used to prepare the annual Power Content Label (PCL), which is mailed to City of Palo Alto Utilities customers and posted on the City’s website each year at www.cityofpaloalto.org/powercontentlabel and on the CEC’s website at energy.ca.gov/power- content-label.
ANALYSIS
CEC regulations governing the Power Source Disclosure Program2 require retail electricity sellers to engage a third-party certified public accountant to perform an audit to verify the specific purchases, resales, and self-consumption of energy by fuel type.3 However, publicly owned 1 Senate Bill 1305: http://www.leginfo.ca.gov/pub/97-98/bill/sen/sb_1301- 1350/sb_1305_bill_19971009_chaptered.html
2 California Code of Regulations, Title 20, Sections 1391-1394. 3 California Code of Regulations Title 20, Section 1394(a)(2).
electric utilities are exempt from the audit requirement if the governing board of the utility “submits to the Energy Commission an attestation of the veracity of each annual resource report for the previous year.”7
In Palo Alto’s case, this means that the PSD reports and PCLs for the City’s two retail electricity products (the “standard rate” carbon neutral product and the voluntary PaloAltoGreen product, which is available to all commercial customers and allows them to pay a small premium in order to receive a power supply comprising only wind generation) can both be approved by the City Council, as described above.
In 2024, CPAU’s hydroelectric generation was about 30% greater than long-term average levels, largely due to the record levels of precipitation the state received during the winter of 2022- 2023. Also in 2024, CPAU continued its REC Exchange Program, which involves taking a regional approach to fulfilling its Carbon Neutral Electric Portfolio goals by selling renewable energy from the City’s long-term renewable contracts and using the most cost-effective renewable energy from outside the state to fulfill carbon neutrality requirements. 8 Although the power sourced out-of-state remains renewable and carbon-neutral, the CEC categorizes such power as “unspecified power” on the PSD and PCL documents.
Under the City’s REC Exchange Program and Carbon Neutral Plan, the City sold a total of 160,000 MWh of in-state renewable generation in 2024 and purchased the same volume of out-of-state renewable generation, yielding $10.86 million in net revenue9. Of this amount, $2.83 million was attributable to the REC Exchange Program, and per Council’s direction in 2022, an amount equivalent to this level of net revenue will be set aside in the City’s Cap and Trade Program Reserve and used to fund investments in local decarbonization initiatives (Staff Report 14735).
As a result of these renewable energy sales—and the fact that the CEC’s regulations do not recognize out-of-state renewable generation as an “eligible renewable” energy source—the share of the City’s standard power mix that is attributed to eligible renewables sources on the PSD reports and PCLs was lower in 2024 (38%) than in many previous years, such as 2018 (65%).
However, as noted earlier, the City’s power supply remained carbon neutral in 2024 in accordance with the Council-adopted Carbon Neutral Plan (Staff Report 11556 10), and the City remained in compliance with the state’s Renewable Portfolio Standard (RPS) mandate.
Utilities Department staff submitted the City’s annual PSD reports for calendar year 2024 (Exhibit 7 California Code of Regulations Title 20, Section 1394(a)(2). 8 The City Council approved the REC Exchange Program in August 2020 (Staff Report 11556):
https://www.paloalto.gov/files/assets/public/v/1/agendas-minutes-reports/reports/city-manager-reports- cmrs/year-archive/2020-2/id-11566.pdf.
9 There is typically a lag of up to 12 months before the City receives the funds from these transactions, due to the time required for the RECs to be registered and transferred, as well as the time required for the billing and settlements process to transpire.
10 Staff Report 11556: https://www.paloalto.gov/files/assets/public/v/1/agendas-minutes-reports/reports/city- manager-reports-cmrs/year-archive/2020-2/id-11566.pdf
A to Attachment A) to the CEC in May 2025, along with the associated attestation form. The City’s 2024 PCLs (Exhibit B to Attachment A) were mailed to each electric utility customer as a bill insert in November 2025, in accordance with the Power Source Disclosure Program regulations.15 They are also posted on the City’s website. The attached resolution (Attachment A) approves the annual PSD reports and PCLs for both the standard power mix and the PaloAltoGreen product and provides for Council’s attestation to the veracity of these four documents as required for exemption from the third-party audit requirement.
Staff anticipates submitting the City’s annual PSD reports for calendar year 2025 to the CEC by June 1, 2026 and providing the 2025 PCLs to electric customers by October 1, 2026.
FISCAL/RESOURCE IMPACT
Adoption of the attached resolution will not result in a financial impact to the City.
STAKEHOLDER ENGAGEMENT
Staff has mailed a copy of the City’s 2024 PCLs to each electric utility customer as a bill insert.
This year’s PCLs have also been posted on the City’s website.
ENVIRONMENTAL REVIEW
Adoption of the attached resolution is not subject to California Environmental Quality Act (CEQA) review as an administrative government activity that will not result in any direct or indirect physical change to the environment as a result (CEQA Guidelines section 15378(b)(5)).
ATTACHMENTS
Attachment A: Resolution Approving 2024 Annual PSD and PCL Reports APPROVED BY:
Alan Kurotori, Director of Utilities
Staff: Jim Stack, PhD, Senior Resource Planner
15 California Code of Regulations Title 20, Section 1393.1: “The power content label shall be provided to customers in written promotional materials by the end of the first complete billing cycle for the fourth quarter of the year.”