Palo Alto City Council
March 2, 2026

Attachment A: Palo Alto 2024 Citywide Greenhouse Gas Emissions Inventory

1.a. Overview of Methodology for Quantifying Greenhouse Gas Emissions Cities represent the single greatest opportunity for tackling climate change, as they are responsible for 70% of global energy-related carbon dioxide emissions, with transportation and buildings among the largest contributors.1 The first step for cities to realize their potential is to identify and measure the sources of their emissions. Best practices for identifying these sources and quantifying emissions are to utilize a standardized GHG inventory.

There are two types of Greenhouse Gas (GHG) emissions inventories:

1. Generation-based GHG inventory – This measurement method helps a community understand its level of emissions based on community energy use. It includes 1) direct consumption of energy, 2) consumption of energy via the electrical grid, and 3) emissions from the treatment/decomposition of waste. This is the industry-accepted methodology for quantifying community GHG emissions, with emissions reported by emission source category.2

2. Consumption-based GHG inventory – This measurement method helps a community understand its level of emissions based on consumption. It offers an alternative, more holistic, approach for quantifying emissions within a community, quantifying consumption of goods and services (including food, clothing, electronic equipment, etc.) by residents of a city, with emissions reported by consumption category.

In 2014, World Resources Institute, C40 Cities Climate Leadership Group (C40) and ICLEI – Local Governments for Sustainability (ICLEI)3 partnered to create a global standard protocol for generation-based GHG inventories. The Global Protocol for Community-Scale GHG Emissions Inventories (GPC) provides a robust framework for accounting and reporting city-wide GHG emissions for a generation-based inventory. The GPC Protocol is the official protocol specified by the Global Covenant of Mayors and defines what emissions must be reported and how. In addition, this inventory draws on methods from the U.S. Community Protocol,4 which provides more detailed methodology specific to the U.S. It seeks to:
• Help cities develop a comprehensive GHG inventory to support climate action planning • Help cities establish a base year emissions inventory, set reduction targets, and track their performance
• Ensure consistent and transparent measurement and reporting of GHG emissions between cities, following internationally recognized GHG accounting and reporting principles
1 See UN Environment Programme, ”Cities and Climate Change,” https://www.unep.org/explore-topics/resourceefficiency/what-we-do/cities/cities-and-climate-change 2 There are two reporting frameworks commonly used by cities: the U.S. Community Protocol and the Global Protocol for Communities (GPC). Palo Alto uses the GPC framework. 3 Formerly the International Council for Local Environmental Initiatives, renamed in 2003 to ICLEI – Local Governments for Sustainability.
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• Enable city inventories to be aggregated at subnational and national levels • Demonstrate the important role that cities play in tackling climate change, and facilitate insight through benchmarking – and aggregation – of comparable data Palo Alto’s first generation-based citywide inventory was completed for 2005 and then extrapolated for 1990 (the baseline year). Beginning in 2010, new citywide GHG inventories were completed annually, enabling Palo Alto to track progress over time.

The 2024 Palo Alto Citywide GHG inventory, completed by Rincon Consultants, follows the calculation and reporting standards outlined in the GPC BASIC reporting level.9 Inventory calculations were performed using Rincon’s GHG Inventory tool and uploaded into ClearPath

2.0,10 a software platform designed for creating generation-based GHG inventories.

GHG emissions from community activities are classified into three main sectors:
• Stationary Energy (e.g., building electricity consumption, fugitive natural gas emissions) • Transportation (e.g., on-road passenger vehicles, off-road equipment) • Waste (e.g., solid waste disposal, wastewater treatment and discharge) Activities taking place within a city can generate GHG emissions that occur inside the city boundary as well as outside the city boundary. To distinguish among them, the GPC groups emissions into three categories based on where they occur:
• Scope 1: GHG emissions from sources located within the city boundary, such as stationary fuel consumption.
• Scope 2: GHG emissions occurring due to the use of grid-supplied electricity, heat, steam, and/or cooling within the city boundary.
• Scope 3: All other GHG emissions that occur outside the city boundary as a result of activities taking place within the city boundary.

This inventory follows the city-inducted framework in the GPC protocol, which totals GHG emissions attributable to activities taking place within the geographic boundary of the city.11 Under the Basic reporting level as defined by the GPC protocol, the inventory requirements cover scope 1 and scope 2 emissions from stationary energy and transportation, as well as all emissions resulting from waste generating within the city boundary. While the 2024 Inventory follows GPC BASIC reporting standards and aligns with previous GHG emissions inventories, minor updates to calculation methodologies were included in the 2024 Inventory and previous inventories following the GPC protocol were corrected as well. Of note, the 1990 Inventory was updated to follow GPC BASIC reporting standards and align with GHG emissions inventories from 2019 through 2024. Previously excluded emissions sources were added, including: Airport Emissions, Off-Road Vehicles and Equipment, Caltrain Commuter Rail, Composting, Palo Alto Landfill Gas Flaring, and Wastewater Biosolid Treatment. 9 GPC Executive Summary; https://ghgprotocol.org/sites/default/files/2022-12/GPC_Executive_Summary_1.pdf 10 ClearPath 2.0 tool; https://icleiusa.org/clearpath-2/ 11 GPC Protocol; https://ghgprotocol.org/sites/default/files/standards/GHGP_GPC_0.pdf Item 9
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The City did not complete a consumption-based GHG inventory. The California Air Resources Board (CARB) has been tasked with developing an implementation framework and accounting to track consumption-based emissions over time.15 In particular, this framework needs to address how to account for the embodied emissions in the food, goods, and services the community purchases not covered by generation-based GHG inventories.

1.b. Palo Alto’s 2024 GHG Emissions
In 2024, Palo Alto emitted an estimated 397,791 metric tons (MT) of carbon dioxide equivalent (CO2e) from the residential, commercial, industrial, transportation, waste, water, and municipal sectors. In comparison to the 1990 base year emissions (which have increased to 798,868 MT from the previously calculated 780,119 MT due to corrections in methodology and additions of excluded emissions sources), these emissions represent a 50.2% decrease in total community emissions, despite a population increase of 22% during that same period. Emissions in 2024 equated to 5.9 MT per capita. The California Air Resource Board’s 2017 Scoping Plan Update recommends a goal for local governments of 6 MT CO2e per capita by 2030 and 2 MT CO2e per capita by 2050.8 In order to achieve 80 x 30, Citywide GHG Emissions need to be at 160,000 MT CO2e (corrected from the previous target of 156,024 MT CO2e).

Of the GHG emissions reductions to date, 46.4% came from providing carbon free for the City’s electricity portfolio, 23.4% from declines in transportation emissions, 16.7% from reduction in natural gas (methane) consumption, 11.5% from declines in solid waste emissions, and 1.9% from declines in wastewater-related emissions.

For citywide GHG emission sources in 2024, 64.1% of GHG emissions were from Transportation and Mobile Sources, 31.9% from Natural Gas (Methane) Use, and the remainder are from other sources. A comparison of 1990 and 2019 through 2024 Citywide GHG emissions is shown in Figure 1. The full comparison between the inventories can be found in Attachment B Historical Comparison of Citywide GHG Emissions by Sector.

Total GHG emissions steadily decreased between 1990 and 2021. However, emissions increased between 2021 and 2022 and slightly increased between 2022 and 2023. The main driver of the increase in 2022 was On-Road Transportation, in part due to the shift away from pandemiclevel (reduced) driving frequency, returning to the office after working from home, and economic recovery. These effects likely continued into 2023 as employers continued to change hybrid work policies and economic and travel activities continued to shift.

GHG emissions decreased by 4% between 2023 and 2024. This decrease was primarily driven by reductions in Natural Gas (Methane) Use: residential natural gas GHG emissions decreased by

14.2%, commercial by 10.9%, and industrial by 20.1% since 2023. 15 Executive Department State of California. (2019). Executive Order B-55-18 to Achieve Carbon Neutrality. https://www.ca.gov/archive/gov39/wp-content/uploads/2018/09/9.10.18-Executive-Order.pdf.

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Figure 1: Palo Alto Citywide Greenhouse Gas Emissions by Sector, 1990 and 2019 - 2024 As shown in Figure 2, the two largest categories of emissions are Transportation and Mobile Sources (including On-Road Transportation, Airport Emissions, Off-Road Vehicles and Equipment, and Caltrain Commuter Rail) and Natural Gas (Methane) Use (including Residential, Commercial, and Industrial).

Transportation and Mobile Sources include emissions from private, commercial, and fleet vehicles driven within the City’s geographical boundaries, as well as the emissions from public transit vehicles and the City-owned fleet. Off-Road Vehicles and Equipment include airport ground support, construction and mining, industrial, light commercial, portable equipment, and transportation refrigeration units.

Natural Gas (Methane) Use includes emissions that result from natural gas (methane) consumption in both private and public sector buildings and facilities, and residential, commercial, and industrial sources. Fugitive emissions related to natural gas (methane) consumption are calculated separately and are discussed in Section 1.d. The City’s electricity supply has been carbon free since 2013, when the City Council approved a Carbon Neutral Electric Resource Plan, committing Palo Alto to pursuing only carbon-neutral electric resources and effectively eliminating all GHG emissions from the City's electric portfolio.

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Figure 2: 2024 Palo Alto Citywide Greenhouse Gas Emissions by Sector

1.c. Transportation and Mobile Sources
In 2024, Transportation and Mobile Sources accounted for 64.1% of total citywide GHG emissions in Palo Alto. GHG emissions from Transportation and Mobile Sources are estimated to have increased slightly (by less than 1%) between 2023 and 2024 but remain 27% lower than 1990 transportation and mobile emissions. Within Transportation and Mobile Sources, On-Road Transportation increased slightly (less than half a percent). However, this estimate is preliminary due to lack of data. Vehicle miles traveled (VMT) data for 2024 were not yet available when the 2024 GHG inventory was prepared. City staff and external experts calculated a preliminary estimate of 2024 VMT by scaling 2023 per capita VMT based on 2024 population for passenger vehicles and service population for commercial vehicles and buses. This estimate reflects demographic growth and may not capture actual VMT trends. The largest increase between 2023 and 2024 was from Airport Emissions, which increased 22.4% from 2023. The largest increase from 1990 was from Off-Road Vehicles and Equipment, which increased 173%.

As shown in Table 2, transportation and mobile sources consist of:
• On-Road Transportation – This includes all daily vehicular trips made entirely within the Palo Alto city limits (in-boundary trips), one-half of daily vehicular trips with an origin within Palo Alto city limits and a destination outside of Palo Alto city limits (outbound trips; this assumes that Palo Alto shares half the responsibility for trips traveling from other jurisdictions), and one-half of daily vehicular trips with an origin outside Palo Alto Item 9
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city limits and a destination within Palo Alto city limits (inbound trips; this assumes that Palo Alto shares the responsibility of trips traveling to other jurisdictions). Vehicular trips through Palo Alto (such as commuters on Highway 101) are not included because Palo Alto cannot solely implement policies that influence the trip-making behavior.

Rather, through trips are assigned to other jurisdictions that can influence either the origin or destination side of the trip-making behavior. • Airport Emissions – This includes emissions from take-offs and landings from trips that start and end at Palo Alto Airport. This includes emergency services helicopters, sightseeing helicopters, and training flights. Flights that take-off from Palo Alto Airport but land elsewhere, and flights that land in Palo Alto Airport but take-off from elsewhere are not included per GPC Basic Protocol.
• Off-Road Vehicles and Equipment - This includes airport ground support (based on takeoffs and landings), construction and mining, industrial (based on employment data), light commercial (based on employment data), portable equipment, and transportation refrigeration units (based on service population).
• Caltrain Commuter Rail – This includes emissions from Caltrain travel within Palo Alto.

Table 2: Transportation and Mobile Sources GHG Emissions by Subsector (MT CO2e) Subsector 1990 2019 2020 2021 2022 2023 2024
% of
Total
2024
GHG
On-Road
Transportation 331,840 293,413 217,279 185,925 221,923 225,387 226,019 64.1% Airport
Emissions 3,096 2,192 1,664 2,641 1,837 1,935 2,369 0.6% Off-road
Vehicles 7,431 14,634 15,029 18,961 20,191 19,129 20,287 5.1% Caltrain
Commuter Rail 6,390 4,842 4,552 3,876 7,272 6,377 6,331 1.6% Total MT CO2e 348,757 315,081 238,523 211,403 251,223 252,828 255,006 61.2% Note: Percentages and MT CO2e may not add to the total due to rounding The main driver of GHG emissions from Transportation and Mobile sources is fuel combustion from internal combustion engine (ICE) vehicles, specifically passenger vehicles, commercial vehicles, and buses (69%, 18%, and 2% of all transportation GHG emissions, respectively). Since electricity in the City is carbon-neutral, there are no GHG emissions attributed to passenger, commercial, or bus EVs.

The 2024 inventory utilized vehicles miles traveled (VMT) data from Google’s Environmental Insights Explorer (EIE) and VMT-weighted emission factors from the California Air Resources Item 9
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(CARB) Emission FACtor (EMFAC) model17 to estimate GHG emissions from all passenger, commercial, and bus ICE vehicles. Because 2024 VMT data is not yet available from Google EIE, City staff and external experts calculated a preliminary estimate of 2024 VMT by scaling 2023 per capita VMT based on 2024 population for passenger vehicles and service population for commercial vehicles and buses. When the Google EIE data becomes available, the City will update 2024 VMT accordingly. In 2023, 46% of VMT was from inbound trips, 45% from outbound trips, and 9% from in-boundary trips.

To determine the EV share of passenger VMT, data from CEC’s Zero Emissions Vehicle (ZEV) Statistics database was pulled for the City’s zip codes. Passenger VMT data was then multiplied by the EV share percentage to determine electric VMT (EVMT) of passenger vehicles allocated to the City. All EVMT was then multiplied by a passenger vehicle energy factor, or electricity (kWh) per mile (EPM), generated from CARB’s EMFAC model to determine the total electricity consumption of passenger EVs.

For commercial and bus VMT, Santa Clara County and San Mateo County boundaries were set in CEC’s ZEV Statistics database to determine the average EV share percentage of these vehicle categories.18 Commercial and bus VMT data were then multiplied by their respective EV share percentages to determine EVMT of these vehicle categories.

All electricity consumption from passenger, commercial, and bus EVs were multiplied by the City of Palo Alto Utilities (CPAU) electricity emission factor (zero MT CO2e/kWh) to determine GHG emissions from on-road, EV transportation.

On-road Transportation accounts for approximately 56.8% of Palo Alto’s total emissions, a

31.9% decrease from 1990, but a slight 0.3% increase from 2023. This increase is primarily driven by increased on-road vehicle miles traveled (VMT) in commercial vehicles and buses.

Off-Road Transportation and Equipment accounts for approximately 5.1% of Palo Alto’s total emissions, a 6.1% increase from 2023. GHG emissions from lawn and garden equipment specifically - which are predominantly gasoline-powered equipment - account for less than 1% of total emissions. It is important to note that most of the off-road transportation emissions are based on models at the County level that do not reflect Palo Alto-specific variations. The 2024 inventory sourced Santa Clara County fuel consumption from CARB’s OFFROAD model,19 including airport ground support, construction, mining, industrial, light commercial, portable equipment, and transportation refrigeration units. All attribution factors used to allocate 17 CARB EMFAC v1.0.1.; https://ww2.arb.ca.gov/our-work/programs/msei/on-road-emfac 18 While these percent EV share estimates also come from CEC’s ZEV Statistics database, only county-level data is available for medium- and heavy-duty (i.e., commercial and bus) ZEVs. The average percent EV share for Santa Clara and San Mateo County was used as a proxy for Palo Alto because Palo Alto shares one zip code (94303) with San Mateo, and much I-E/E-I EVMT attributed to Palo Alto is assumed to be between these two counties 19 CARB OFFROAD v1.0.5.; https://arb.ca.gov/emfac/offroad/ Item 9
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countywide fuel consumption to Palo Alto in 2024 remained the same as previous inventories,23 except airport ground support. Attributed fuel consumption from each off-road sector was then multiplied by its respective GHG emissions factor (MT CO2e/gallon) depending on fuel type (i.e., gasoline, diesel, or natural gas) to estimate GHG emissions.

Airport Emissions account for approximately 0.6% of Palo Alto’s total emissions, a 22.4% increase from 2023, but a 23.5% decrease from 1990.

Caltrain Commuter Rail emissions account for approximately 1.6% of Palo Alto’s total emissions, a 0.7% decrease from 2023 and 0.9% decrease from 1990. For the 2024 Inventory, the most recently available Caltrain ridership data included calendar year 2024 (CY24) total system annual AWR and fiscal year 2025 (FY25) (November and December only) Palo Alto stations’ AWR. In the 2024 Inventory, commuter rail fuel consumption was scaled down and attributed to Palo Alto by dividing the sum of FY25 Palo Alto stations’ AWR by CY22 total system annual AWR. Due to no response from the Peninsula Corridor Joint Power Board, Caltrain commuter rail diesel fuel consumption in the 2024 Inventory uses 2022 diesel fuel consumption from Caltrain’s 2023 Sustainability Report as the most recently available data.24 It is assumed that the total fuel consumption and allocation methodology described above is comparable to Palo Alto’s share of Caltrain commuter rail emissions in 2024. This estimation method results in the highest emissions to remain conservative. Caltrain electrification is a key component of the Caltrain Modernization program,25 with Caltrain electrified in late September 2024. Now that the Caltrain Modernization program is complete, most of the Caltrain commuter rail emissions will be eliminated in future Citywide GHG Emissions Inventories.

1.d Natural Gas (Methane) Use
In 2024, Natural Gas (Methane) Use emissions accounted for 31.9% of total 2024 Citywide GHG emissions in Palo Alto, a 13.2% decrease from 2023 and a 34.5% decrease from 1990.

Residential and commercial natural gas (methane) use contributed nearly equally to GHG emissions in the natural gas sector (44% and 45% of emissions from Natural Gas (Methane) Use, respectively), with a remaining 7% of the emissions attributed to industrial natural gas use. As shown in Table 3, Palo Alto’s total natural gas (methane) consumption in 2024 was 23,781,222 therms. Commercial natural gas (methane) use accounts for 15.0% of total emissions, residential accounts for 14.6% of total emissions, and industrial accounts for 2.4% of total emissions. In 2024, Natural Gas (Methane) Use decreased 10.9% in the commercial sector,

20.1% in the industrial sector and 14.2% in the residential sector compared to 2023. These reductions reflect lower overall natural gas consumption, which can fluctuate based on weather conditions, energy efficiency improvements, and occupant behavior. January 2024 was the warmest January on record, which could account for some of the reductions. Other sources for the reductions could be because residents replaced more gas appliances with electric 23 Attribution factors are based off demographic data such as population, employment, and service population (except for airport ground support).
24 Caltrain 2023 Sustainability Report; https://www.caltrain.com/media/33109 25 Caltrain Modernization Program; https://calmod.org/
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appliances. Overall, Natural Gas (Methane) Use emissions remain far below 1990 levels (34.5% decrease).

The City Council unanimously approved Palo Alto’s Carbon Neutral Natural Gas Plan on December 5, 2016. The Natural Gas Plan, implemented on July 1, 2017, achieves carbon neutrality for the gas supply portfolio by 1) purchasing high-quality carbon offsets equivalent to our City and community natural gas (methane) emissions; 2) pursuing efficiency strategies to reduce natural gas (methane) use, and 3) seeking opportunities to fund local offsets that finance actual emissions reductions in Palo Alto and the surrounding region. As a bridging strategy, carbon offsets are being purchased in an amount equal to the GHG emissions caused by natural gas (methane) use within the City. Carbon offsets are not included in this inventory. 1Table 3: Natural Gas (Methane) Consumption by Subsector (Therms) Subsector 2019 2020 2021 2022 2023 2024 % of Total
2024 GHG
Commercial 12,954,768 10,061,842 10,468,041 11,729,819 12,502,216 11,144,038 15.0% Residential 13,565,360 12,952,262 12,756,160 13,037,423 12,686,165 10,884,832 14.6% Industrial 2,707,034 2,253,641 2,294,119 2,372,902 2,193,781 1,752,352 2.4% Total
Therms 28,867,162 25,267,739 25,518,320 27,140,144 27,382,162 23,781,222 31.9% Note: Percentages and Therms may not add to the total due to rounding Natural Gas (Methane) Fugitive Emissions
Natural gas is mainly methane (CH4), some of which escapes during the drilling, extraction, and transportation processes. Such releases are known as fugitive emissions. The primary sources of these emissions may include equipment leaks, evaporation losses, venting, flaring, and accidental releases. Methane is a potent greenhouse gas – approximately 25 times more powerful than carbon dioxide over a 100-year timescale.

In 2024, Natural Gas (Methane) Fugitive Emissions accounted for 1% of total citywide GHG emissions in Palo Alto, a decrease of 13.2% from 2023 and a decrease of 12.5% from 1990. Per the GPC, fugitive emissions from natural gas (methane) are based on overall community consumption and a leakage rate of 0.03%.

As mentioned in Section 1.a., the GPC Basic methodology includes GHG emissions attributable to activities taking place within the geographic boundary of the city. As such, the 2024 GHG inventory does not include a category of emissions that are called “upstream emissions,” which includes emissions from extraction of natural gas (methane) and its transportation across the western United States through California to Palo Alto. Leaks during gas extraction and transportation can be very significant, so the actual impacts of natural gas (methane) use can be much more significant than is represented in a formal Citywide GHG inventory.

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1.e. Solid Waste
In 2024, Palo Alto's solid waste diversion rate was 88%, far exceeding the 50% mandate for local jurisdictions. “Diversion” includes all waste prevention, reuse, recycling, and composting activities that “divert” materials from landfills. The City uses the diversion rate to measure progress on waste reduction and resource conservation goals. The diversion rate of 88% is an improvement from the 62% rate in 2007, 81% rate in 2019, and 84% rate in 2022 and 2021.

However, it is a decrease from the 91% rate in 2022 and 2023 due to increased waste landfilled in 2024. As part of the 2016 S/CAP Framework, the City Council adopted a goal of 95% diversion of materials from landfills by 2030.29
Solid Waste emissions accounted for 2.3% of total 2024 citywide GHG emissions in Palo Alto, a

6.4% decrease from 2023 and an 83.4% decrease from 1990. As shown in Table 4, the 2024 inventory included emissions from solid waste generated in the City but treated biologically outside of the city. This includes composting emissions at the Zero Waste Energy Development Company’s (ZWED) Dry Fermentation Anaerobic Digestion (AD) Facility in San Jose, CA, composting emissions at the Synagro El Nido Central Valley Composting (CVC) facility in Dos Palos, as well as Palo Alto Landfill Gas Flaring Emissions. 2Table 4: Solid Waste GHG Emissions by Subsector (MT CO2e) Subsector 1990 2019 2020 2021 2022 2023 2024
% of
Total
2024
GHG
Organic Waste
Composting 0 731 1,154 843 1,142 1,242 1,308 0.3%
Landfill Gas
Flaring 226 281 316 237 233 186 176 0%
Landfill Gas
Fugitive 24,325 n/a30 n/a n/a n/a n/a n/a n/a
Landfill
Methane 30,732 5,519 4,721 5,029 5,297 6,702 7,715 1.9% Total MT CO2e 55,283 6,531 6,191 6,110 6,672 8,130 9,199 2.3% Note: Percentages and MT CO2e may not add to the total due to rounding Solid Waste emissions increased slightly in 2024, with landfill methane emissions increasing by

15.1% compared to 2023 but remaining 74.9% lower than 1990 levels. Organic Waste Composting emissions also increased slightly (5.3%) compared to 2023, continuing the trend driven by state-mandated organic waste diversion programs such as SB 1383. 29 Sustainability and Climate Action Plan Framework, November 2016; https://www.cityofpaloalto.org/civicax/filebank/documents/64814 30 Not included because the Palo Alto landfill was closed Item 9
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Waste emissions result from organic material decomposing in the anaerobic conditions present in a landfill and releasing methane (CH4) – a greenhouse gas much more potent than CO2.

Organic materials (e.g., paper, plant debris, food waste, etc.) generate methane within the anaerobic environment of a landfill while non-organic materials (e.g., metal, glass, etc.) do not.

This is why diverting waste from landfills is so important. In 2016, Governor Brown signed Senate Bill 1383 (SB 1383) to reduce GHG emissions from a variety of short-lived climate pollutants, including methane from organic materials disposed in landfills. SB 1383 is the largest and most prescriptive waste management legislation in California since the California Integrated Waste Management Act of 1989 (AB 939) and aspires to reduce statewide disposal of organic waste 75% by 2025 and recover at least 20% of the currently disposed edible food for human consumption by 2025. Palo Alto is in compliance with many of SB 1383 requirements due to the City’s progressive zero waste programs and initiatives and is continuing to take initiatives to further reduce organic materials from being disposed in landfills.

1.f. Wastewater Treatment
As shown in Table 5, in 2024 the Regional Water Quality Control Plant (RWQCP) wastewaterrelated emissions accounted for 0.6% of total 2024 GHG emissions in Palo Alto, a 2.2% decrease from 2023 and a 76.2% decrease from 1990. RWQCP GHG emissions originate from electricity, natural gas (methane), and landfill gas usage required to treat the wastewater, as well as GHGs that are emitted from the wastewater itself either during treatment or after (effluent). The nitrogen within wastewater is subject to transformation to nitrous oxide at varying stages in the treatment process as well as after it has been discharged to a receiving water (effluent). These emissions are included in the RWQCP totals.
3Table 5: Wastewater-Related GHG Emissions by Subsector (MT CO2e) Subsector 1990 2019 2020 2021 2022 2023 2024
% of Total
2024
GHG
Wastewater
Biosolid
Treatment33
1,606 403 0 0 0 0 0 0%
Wastewater
Treatment 380 381 346 86 82 85 0%
Wastewater
Effluent
8,504
1,005 1,007 915 2,344 2,163 2,077 0.5%
Wastewater
Sludge
Composting
409 469 412 185 218 247 0.1%
Total MT CO2e 10,110 2,197 1,857 1,674 2,615 2,463 2,409 0.6% Note: Percentages and MT CO2e may not add to the total due to rounding 33 Sludge incineration
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As shown in Figure 3, RWQCP operations achieved significant GHG reductions in 2019 when the facility’s sewage sludge incinerators were replaced with the more environmentally friendly Sludge Dewatering and Truck Loadout Facility. Previously, RWQCP incinerators were the City’s largest facility-related GHG source. The updated biosolids treatment process has and will continue to reduce GHG emissions by approximately 15,000 MT of CO2e per year when compared to the emissions from incineration. This approximates the carbon dioxide emissions of 3,000 passenger cars. The dewatered sludge is used as agricultural soil supplements.

Figure 3: Regional Water Quality Control Plant Historical Total Greenhouse Gas Emissions Item 9
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Attachment C: Palo Alto 2024 Municipal Greenhouse Gas Emissions Inventory Overview of Methodology for Quantifying Greenhouse Gas Emissions The 2024 Municipal Greenhouse Gas (GHG) Emissions Inventory follows the calculation and reporting standards outlined in the International Council for Local Environmental Initiatives’ (ICLEI) Local Government Operation (LGO) Protocol1, which aligns with the Global Protocol for Community-Scale GHG Emissions Inventories (GPC) local government operations protocol.2 Under the LGO Protocol, GHG Emissions from Palo Alto’s municipal operations can be classified into four main sectors:
• Buildings and other facilities (e.g., stationary combustion) • Streetlights and Traffic Signals (e.g., electricity use) • City vehicle and equipment fleet (e.g., mobile combustion) • Wastewater facilities (e.g., wastewater treatment and discharge) • Indirect emissions (e.g., employee commuting, landfilled solid waste generation) Activities taking place within a city can generate GHG emissions that occur inside the city boundary as well as outside the city boundary. To distinguish among them, the LGO Protocol groups emissions into three categories based on where they occur:
• Scope 1 emissions: GHG emissions from sources located within the city boundary • Scope 2 emissions: GHG emissions occurring as a consequence of the use of gridsupplied electricity, heat, steam and/or cooling within the city boundary • Scope 3 emissions: All other GHG emissions that occur outside the city boundary as a result of activities taking places within the city boundary Palo Alto’s 2024 Municipal GHG Emissions
In 2024, the City emitted a total of 14,590 metric tons (MT) of carbon dioxide equivalent (CO2e) from municipal operations. As shown in Figure 1, GHG emissions from Palo Alto’s municipal operations are from five main sectors: Buildings and Other Facilities, Streetlights and Traffic Signals, City Vehicles and Equipment, Wastewater Facilities, and Indirect Emissions. Since the methodology has changed significantly for certain sectors since the first Municipal GHG Inventory was conducted in 2005, it is no longer possible to do an equivalent comparison with previous Municipal GHG inventories. However, the methodologies for Buildings and Other Facilities, Streetlights and Traffic Signals, and City Vehicles and Equipment are similar enough to make rough comparisons. For reference only, in 2005 the City emitted a total of 40,499 MT CO2e from municipal operations. By the end of 2024 the City reduced total municipal GHG emissions roughly 64% from the 2005 baseline.
1 LGO Protocol Rulebook; https://icleiusa.org/resources/local-government-operations-lgo-protocol/ 2 GPC Inventories for local government operations;
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Figure 1: 2024 Palo Alto Municipal Greenhouse Gas Emissions by Sector The majority of municipal GHG emissions, about 37%, are attributed to the Regional Water Quality Control Plant (RWQCP). Since the RWQCP is owned and operated by the City, 100% of GHG emissions are attributed to the City and are Scope 1. These GHG emissions include indirect nitrous oxide (N2O) emissions from wastewater effluent (about 95% of total wastewater GHG emissions), process nitrous oxide emissions from the treatment of wastewater without nitrification/denitrification (about 4% of total Wastewater Facilities sector GHG emissions), and natural gas combustion/leakage (about 1% of total Wastewater Facilities GHG emissions).

The second major contributor to GHG emissions is attributed to the Indirect Sources sector, or the City’s Scope 3 sources. These indirect sources account for about 33% of total GHG emissions and include GHG emissions resulting from employee commute mobile combustion (about 44% of the Indirect Emission Sources GHG emissions) and methane emissions resulting from landfilled solid waste (about 56% of the Indirect Emissions Sources GHG emissions). Landfilled solid waste methane emissions are a product of decomposing organic material generated and sent to the landfill by municipal operations. This subsector attributes methane emissions based on total landfilled solid waste generated in the inventory year and does not account for preexisting landfilled solid waste methane emissions.

The third major contributor to GHG emissions includes GHG emissions from natural gas usage in Buildings and Other Facilities (excluding the RWQCP), considered a Scope 1 source. These GHG emissions accounted for 22% of total GHG emissions and are driven by natural gas combustion (about 97% of Buildings and Other Facilities GHG emissions), and natural gas leakage (about 3% of Buildings and Other Facilities GHG emissions).

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Municipal GHG Inventory
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The final contributor to GHG emissions includes the City’s vehicle and equipment fleet sector, considered a Scope 1 source (except for the City’s electric vehicles, EVs, which are considered a Scope 2 source due to the energy source being purchased electricity). Together, these account for about 9% of total GHG emissions and are mainly driven by the City’s on-road vehicle fleet powered by gasoline, renewable diesel, and compressed natural gas (CNG) and offvehicle/equipment fleet powered by gasoline and diesel. The City’s on-road vehicle fleet makes up about 97% of City Vehicle and Equipment Fleet GHG emissions, while off-road vehicles and equipment make up the remaining 3%.

Since electricity in the City is carbon-neutral, there are no GHG emissions from electricity consumption in City-owned buildings and facilities, streetlight and traffic signals, EVs, or City water-energy consumption.

A comparison of 2005 and 2022 through 2024 Palo Alto Municipal GHG emissions is shown in Figure 2 and Table 1. Overall GHG emissions declined slightly, with about a 5% reduction from 2022 to 2023, about a 1% reduction from 2023 to 2024, and about a total decrease of 6% over the three-year period.

Figure 2: Palo Alto Municipal GHG Emissions, 2005 and 2022-2024 As previously discussed, the methodology has changed significantly for certain sectors since the first Municipal GHG Inventory was conducted in 2005, so it is no longer possible to make an equivalent comparison with previous Municipal GHG inventories. However, the methodologies for Buildings and Other Facilities, Streetlights and Traffic Signals, and City Vehicles and Equipment are similar enough to make rough comparisons.

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Municipal GHG Inventory
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Table 1: Palo Alto Municipal GHG Emissions (MT CO2e)
Sector and Subsector Scope 2005 2022 2023 2024
% Change
in 2024
from
2005*
Buildings and Other Facilities 10,698 3,398 2,844 3,154 - 70.5% - Electricity Use Scope 2 0 0 0
- Natural Gas Combustion Scope 1 3,291 2,755 3,055
- Natural Gas Leakage Scope 1 107 89 99
- Water-Energy Consumption Scope 2 0 0 0
Streetlights & Traffic Signals 748 0 0 0 - 100%
City Vehicles and Equipment Fleet 2,835 1,676 1,352 1,308 - 53.9% - On-road Renewable Diesel** Scope 1 499 182 182
- On-road Gasoline Scope 1 1,045 1,108 1,079
- On-road CNG Scope 1 6 20 7
- On-road Electric Scope 2 0 0 0
- Off-road Renewable Diesel** Scope 1 124 40 37
- Off-road Gasoline Scope 1 3 2 3
Wastewater Facilities (Regional
Water Quality Control Plant) 11,269* 5,715 5,722 5,354 - 52.5%* - Effluent Discharge Fugitive Scope 1 5,448 5,414 5,070 - Process N₂O Emissions Scope 1 200 206 207
- Electricity Use Scope 2 0 0 0
- Natural Gas Combustion Scope 1 65 99 75
- Natural Gas Leakage Scope 1 2 3 2
Indirect Emission Sources 5,567* 4,758 4,873 4,774 - 14.2%* - Employee Commute Scope 3 1,865 1,980 2,096
- Landfill Methane Scope 3 5,567 2,893 2,893 2,678
Power Generation Facilities 9,308 n/a n/a n/a n/a
Water Delivery Facilities 74 n/a n/a n/a n/a
Total MT CO2e 40,499* 15,546 14,792 14,590 - 64%*
Note: Percentages and MT CO2e may not add to the total due to rounding * Not an equivalent comparison due to different methodologies ** Diesel emissions factors were used in 2022
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Despite the overall downward trend, GHG emissions from natural gas combustion (Scope 1) in the Buildings and Other Facilities sector increased between 2023 and 2024 due to higher therms usage. These emissions had previously decreased by 16% from 2022 to 2023 but rose by 11% from 2023 to 2024. Nonetheless, total GHG emissions from natural gas combustion declined by 7% between 2022 and 2024.

Similarly, employee commute GHG emissions from the indirect emissions sources sector (Scope 3) increased by 6% between 2023 and 2024, as well as 6% between 2022 and 2023. This upward trend is attributed to a consistent rise in total daily commute miles due to increases in the number of City employees from filling position vacancies.

City Vehicle and Equipment Fleet emissions (Scope 1) experienced mixed changes. On-road gasoline emissions increased slightly - by 3% from 2022 to 2024 - while on-road CNG and offroad gasoline emissions remained relatively constant. On-road diesel and off-road diesel emissions dropped significantly - by 64% and 70%, respectively - between 2022 and 2024. These reductions are attributed to the City’s transition to renewable diesel for its municipal fleet beginning in 2023, which has a roughly 70% lower GHG emissions factor compared to conventional fossil diesel.5
A comparison of the on-road vehicle GHG emissions by City Department and vehicle fuel type (diesel, gasoline, and CNG) can be found in Table 2. Table 3 shows a historical comparison of on-road vehicle GHG emissions by City Department. Figures 3 and 4 show Palo Alto On-Road Vehicle GHG emissions by City Department. The fleet vehicles used by City Departments are used for the following purposes:
• Administrative Services Department – purchasing and printing • Community Services Department – administration, arts and culture, recreation, parks and golf
• Fire Department – operations, support
• Information Technology Department – information technology • Planning and Development Department – inspection services • Police Department – police, animal services
• Public Works Department – engineering, facilities management, equipment management, operations, wastewater treatment operations, storm drainage, refuse, Palo Alto airport operations
• Utilities Department – administrative services, electric operations, electric engineering, water / gas / wastewater engineering, water / gas / wastewater operations, resource management
5 CARB staff has reached out to several renewable diesel fuel producers and as of February 2023, is aware that renewable diesel produced by Neste meets the regulatory requirements and standards. Estimates in GHG emissions reduction based on emission factors provided by Neste accessed at: https://www.neste.com/enus/products-and-innovation/neste-my-renewable-diesel/product-information Item 9
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Table 2: On-Road Vehicle GHG emissions by City Department & Vehicle Fuel Type (MT CO2e) City Department Diesel
Vehicles
Gasoline
Vehicles CNG Vehicles Total(MT CO2e)
Administrative Services 2.4 0 0.2 2.6
Community Services 5.4 87.8 0 93.2
Fire 52.5 66 0.02 118.5
Information Technology 0 2.3 0 2.3
Planning and Development 0 18.6 0.03 18.7
Police 7 413.5 0 420.5
Public Works 56 214.3 4.5 274.9
Utilities 58.5 276.4 2.5 337.4
Total MT CO2e 181.9 1,078.8 7.3 1,268
Note: Totals and MT CO2e may not add to the total due to rounding Table 3: On-Road Vehicle GHG emissions by City Department (MT CO2e) City Department 2022 2023 2024 % of Total in
2024
Administrative Services 8.3 2.8 2.6 0.2%
Community Services 88.9 87.9 93.2 7.4%
Fire 228.9 118.7 118.5 9.3%
Information Technology 2.5 2.4 2.3 0.2%
Planning and Development 18.1 22.2 18.7 1.5%
Police 430 421.7 420.5 33.2%
Public Works 337.8 323.5 274.9 21.7%
Utilities 436 328.5 337.4 26.6%
Total MT CO2e 1550.2 1307.6 1268 100.0%
Note: Percentages and MT CO2e may not add to the total due to rounding Item 9
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Figure 3: Palo Alto On-Road Vehicle GHG Emissions by City Department Figure 4: 2024 On-Road Vehicle GHG Emissions by City Department Item 9
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Attachment B: Historical Comparison of Palo Alto Citywide GHG Emissions by Sector Sector and Subsector
1990 GHG
emissions
(MT CO2e)
2019 GHG
emissions
(MT CO2e)
2020 GHG
emissions
(MT CO2e)
2021 GHG
emissions
(MT CO2e)
2022 GHG
emissions
(MT CO2e)
2023 GHG
emissions
(MT CO2e)
2024 GHG
emissions
(MT CO2e)
% Change
in 2024
from 1990
% of Total
2024
Emissions
Total Transportation & Mobile Sources 348,757 315,081 238,523 211,403 251,223 252,828 255,0061-26.9% 64.1% - On-Road Transportation 331,840 293,413 217,279 185,925 221,923 225,387 226,019 -31.9% 56.8% - Airport Emissions 3,096 2,192 1,664 2,641 1,837 1,935 2,369 -23.5% 0.6% - Off-road Vehicles 7,431 14,634 15,029 18,961 20,191 19,129 20,287 173.0% 5.1% - Caltrain Commuter Rail 6,390 4,842 4,552 3,876 7,272 6,377 6,331 -0.9% 1.6% Total Natural Gas (Methane) 194,000 153,509 134,365 135,697 144,996 146,289 127,051 -34.5% 31.9% - Commercial Energy 66,987 53,515 55,676 62,667 66,793 59,537 n/a 15.0% - Industrial Energy 14,373 11,961 12,176 12,677 11,720 9,362 n/a 2.4% - Residential Energy 72,149 68,889 67,846 69,652 67,776 58,152 n/a 14.6% Natural Gas (Methane) Fugitive 4,718 5,009 4,384 4,427 4,709 4,751 4,126 -12.5% 1.0% Total Wastewater-Related Emissions 10,110 2,197 1,857 1,674 2,615 2,463 2,409 -76.2% 0.6% - Wastewater Biosolid Treatment2 1,606 403 0 0 0 0 0 -100.0% 0% - Wastewater Treatment 380 381 346 86 82 85 n/a 0%
- Wastewater Effluent
8,504
1,005 1,007 915 2,344 2,163 2,077 n/a 0.5%
- Wastewater Sludge Composting 409 469 412 185 218 247 -97.1% 0.1% Total Solid Waste Emissions 55,283 6,531 6,191 6,110 6,672 8,130 9,199 -83.4% 2.3% - Organic Waste Composting (ZWED) 0 731 1,154 843 1,142 1,242 1,308 n/a 0.3% - Palo Alto Landfill Gas Flaring 226 281 316 237 233 186 176 -22.1% 0% - Palo Alto Landfill Gas Fugitive 24,325 n/a3 n/a n/a n/a n/a n/a -100.0% 0% - Palo Alto Landfill Methane 30,732 5,519 4,721 5,029 5,297 6,702 7,715 -74.9% 1.9% Brown Power Supply (Electricity) 186,000 0
4 0 0 0 0 0 -100.0% 0%
Total GHG Emissions (MT CO2e) 798,868 482,237 385,320 359,312 410,215 414,461 397,791 -50.2% 100% Notes: MT CO2e = metric tons of carbon dioxide equivalent. Percentages and MT CO2e may not add to the total due to rounding 1 Based on a preliminary estimate of 2024 Vehicle Miles Travelled (VMT). 2024 Google Environmental Insights Explorer VMT data was unavailable at time of publication. 2 Sludge Incineration. In 2019, the sewage sludge incinerators at the Regional Water Quality Control Plant were replaced with a Sludge Dewatering and Truck Loadout Facility. 3 Not included because the Palo Alto landfill was closed. 4 Since 2013, the City provides carbon free electricity to all customers.

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Attachment B - Historical Comparison
of Citywide GHG Emissions by Sector
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Attachment D: S/CAP Key Performance Indicators Progress Report This progress report provides an update on the Sustainability and Climate Action Plan (S/CAP) Key Performance Indicators (KPIs) for calendar year 2024. The S/CAP Key Actions are abbreviated for the purposes of this report, but the full key actions can be found in Section 5:

Goals and Key Actions of the S/CAP.1 Significant actions and accomplishments from 2024 can be found on the Sustainability website2.

Climate Action
GOAL
 Reduce GHG emissions 80% below 1990 levels by 2030

KEY ACTIONS
Community assistance
C1. Provide building and transportation emissions consultations for residents C2. Develop major employer custom emissions reduction plans Staff Analysis
C3. Study additional key actions needed for 80 x 30
C4. Study staffing and budgetary needs
C5. Study funding alternatives
C6. Conduct an electrification affordability study
C7. Study carbon neutrality options
Staff and Council action
C8. Accelerate GHG reductions

KEY PERFORMANCE INDICATORS
• GHG reductions
• Community awareness
• Participation in Climate Pledge
Climate Action KPI: GHG Reductions
Palo Alto has already made significant progress in its sustainability and climate action efforts, decreasing its community emissions to 397,791 metric tons (MT) CO2e, or 5.9 MT CO2e per Palo Alto resident in 2024 (50.2% decrease compared to 1990 levels). However, to achieve the 80 x 30 and carbon neutrality by 2030 goals, Palo Alto must meet a greenhouse gas (GHG) emissions target of 160,000 MT CO2e, or 2 MT CO2e per Palo Alto resident by 2030. In order to make 1 2022 Sustainability and Climate Action Plan;
https://www.paloalto.gov/files/assets/public/v/1/sustainability/reports/2022-scap-report_final.pdf 2 Sustainability Actions and Accomplishments; https://www.cityofpaloalto.org/City-Hall/Sustainability/Goals-andProgress/Sustainability-Actions-and-Accomplishments Item 9
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Performance Indicators
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progress on the GHG reductions goal, in 2024 the City focused on community assistance (Key Action C1, C2), staff analysis (C3, C4, C5, and C6), and staff and Council action (C8).

Climate Action KPI: Community Awareness
The City continues to expand outreach to increase community awareness about the S/CAP and the 80 x 30 goal. In 2024, the City held 51 sustainability and climate action events covering all eight S/CAP focus areas. Attendance was not counted for all events, but staff estimates an average of 187 attendees per event. The City published four Sustainability Newsletters and seven Climate Action blogs in 2024. The Sustainability Newsletter has a readership of 3,429 and a 56% open rate, which is the percentage of readers that open the e-mail you send them. The average open rate for electronic newsletters is 21.5%.

The 2024 Palo Alto Community Survey found that 1% of Palo Altans were extremely familiar, 4% were very familiar, 18% were moderately familiar, and 18% were slightly familiar with the S/CAP and its goal to reduce GHG emissions 80% by 2030.5 Fifty-eight percent of Palo Altans were not familiar with the S/CAP and it’s 80 x 30 goal.

Climate Action KPI: Participation in Climate Pledge
The City developed a Planet Protection Pledge (the Climate Pledge), which launched at the Palo Alto Earth Day Festival on April 21, 2024 at Rinconada Library. The goal of the pledge is to encourage residents to “pledge” to take action towards our S/CAP goals. Three Palo Alto residents submitted a form certifying that they completed their Planet Protection Pledge goals in 2024.

Energy
GOALS
 Reduce GHG emissions from the direct use of natural gas in Palo Alto’s building sector by at least 60% below 1990 levels (116,400 MT CO2e reduction)
 Reduce GHG emissions from the direct use of natural gas in Palo Alto’s building sector by at least 60% below 1990 levels (116,400 MT CO2e reduction)

KEY ACTIONS
Reduce greenhouse gas emissions in appliances and equipment E1. Reduce GHG emissions in Single-Family Appliances and Equipment E2. Reduce GHG emissions in Non-Residential Equipment
Reduce natural gas use in buildings
E3. Reduce Gas Use in Major Facilities
E4. Reduce natural gas use at City facilities
5 Palo Alto Community Survey, 2024; https://www.paloalto.gov/files/assets/public/v/1/citymanager/communications-office/general/palo-alto-community-survey-report-2024-final.pdf Item 9
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Make it affordable
E5. Support income-qualified residents and vulnerable businesses with electrification E6. Develop electric rate options
Paving the road to electrification
E7. Use codes and ordinances to facilitate electrification E8. Electric grid modernization plan
E9. Additional electrification opportunities in commercial and multi-family buildings

KEY PERFORMANCE INDICATORS
• GHG emissions from natural gas use in buildings (single-family, multifamily, nonresidential)
• Percentage of single-family households with no gas connections • Percentage of gas use reduction in major facilities and City facilities In order to make progress on the Energy goals, in 2024 the City focused on key actions to reduce GHGs in appliances and equipment (E1, E2), reduce natural gas use in buildings (E3, E4), make it affordable (E5, E6), and pave the road to electrification (E7, E8).

Energy KPI: GHG emissions from natural gas use in buildings (single-family, multifamily, nonresidential)
In 2024, total natural gas (methane) use in buildings was 23,781,222 therms7 or 127,051 MT CO2e, which is a decrease from 2023. In 2023, total natural gas (methane) use in buildings was 27,382,162 therms or 146,289 MT CO2e. This is a slight increase from 2022, when total natural gas (methane) use in buildings was 27,140,144 therms or 144,996 MT of CO2e. This is most likely because it was colder in the first three months of 2023 than it was in the first three months of 2022. It could also be because more people were returning to work in offices and continuing to return to Palo Alto for dining, shopping, and recreation. The decrease between 2024 and 2023 is partly because January 2024 was the warmest January on record. It could also be partly because residents have replaced more gas appliances with electric appliances.

Energy KPI: Percentage of single-family households with no gas connections The City estimates that 2.0% of single-family households (289 single-family homes) have no gas connections. The S/CAP impact analysis found that in order to achieve 80 x 30, virtually all single-family gas appliances need to be switched to electric appliances.

Energy KPI: Percentage of gas use reduction in major facilities and City facilities Natural gas (methane) use in City facilities in 2024 decreased by 45 percent compared to the 2016 baseline. Data is currently not available for other major facilities. 7 One therm is the energy content of approximately 100 cubic feet of natural gas at standard temperature and pressure.

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Performance Indicators
Progress Report
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Electric Vehicles
GOALS
 Reduce transportation related GHG emissions at least 65% below 1990 levels (215,696 MT CO2e reduction)
 Develop a public and private charging network to support EV adoption

KEY ACTIONS
Education, awareness, and collaboration
EV1. Raise awareness of alternative transportation modes, micro-mobility, and EVs EV2. Collaborate to promote EV adoption regionally
EV3. Promote EV adoption and alternative commutes for commuters EV4. Facilitate the adoption of EVs, e-bikes and other light EVs EV5. Promote alternative transportation modes and infrastructure to support adoption Expand EV infrastructure
EV6. Expand EV charging access for multi-family residents EV7. Improve EV charging access for income-qualified residents EV8. Ensure EV charging capacity supports EV growth
Electrify fleet vehicles
EV9. Electrify municipal vehicle fleet
EV10. Support policy to electrify fleet vehicles

KEY PERFORMANCE INDICATORS
• GHG emissions from vehicle travel
• Percentage of registered EV vehicles in Palo Alto
• Percentage of new vehicle sales that are EVs
• Percentage of multifamily residents with access to overnight EV charging • Gasoline sales in Palo Alto
In order to make progress on the EV goals, in 2024 the City focused on key actions on education, awareness, and collaboration (EV1, EV2, EV3, EV4, EV5), to expand EV infrastructure (EV6, EV7, EV8), and electrify fleet vehicles (EV9).

EV KPI: GHG emissions from vehicle travel
In 2023, 225,387 MT CO2e of citywide GHG emissions were attributed to on-road vehicle transportation. While VMT data were not available for 2024, City staff and external experts calculated a preliminary estimate of 2024 VMT based on 2023 per capita VMT, 2024 population for passenger vehicles, and service population for commercial vehicles and buses. The preliminary estimate of 226,019 MT CO2e is an increase compared to the past four years, but a decrease compared to pre-COVID-19 emissions from VMT. Emissions from passenger vehicles decreased slightly, but emissions from commercial vehicles and buses increased slightly.

EV KPI: Percentage of registered electric vehicles in Palo Alto Item 9
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Electric vehicles (EVs) made up 19% of all registered vehicles in Palo Alto in 2024 (9,673 EVs).9 This percentage follows a trend of increasing EV registrations in Palo Alto since 2021: EVs made up 11% of all registered vehicles in Palo Alto in 2021 (5,499 EVs out of 50,192 total registrations), 13% in 2022 (6,496 EVs), and 16% in 2023 (8,019 EVs).

EV KPI: Percentage of new vehicle sales that are EVs
In 2024, 54% of new vehicle purchases by Palo Alto residents were EVs. This is an increase compared to 2023, when 52% of new sales were EVs. For context, in 2023, electric vehicles accounted for 42.4% of new auto registrations in Santa Clara County, 25% of new auto registrations in CA, and 8.5% of new auto registrations nationwide. Achieving the penetration of electric vehicles needed to achieve the City’s 80x30 goal requires achieving an EV new vehicle registration share of 85% per year or more by 2030.

EV KPI: Percentage of multifamily residents with access to overnight EV charging In 2023, 4% of multifamily residents (416 residential units) had access to overnight EV charging at their place of residence through charging stations installed under the City’s EV Charger Rebate Program. By 2024, this number increased to 7.6% (814 residential units).

EV KPI: Gasoline sales in Palo Alto
Gasoline sales data in Palo Alto is currently not available but will be reported on when it becomes available.

Mobility
GOALS
 Reduce total vehicle miles traveled 12% by 2030, compared to a 2019 baseline, by reducing commute vehicle miles traveled 20%, visitor vehicles miles traveled 10%, and resident vehicle miles traveled 6%  Increase the mode share for active transportation (walking, biking) and transit from 19% to 40% of local work trips by 2030

KEY ACTIONS
Promote alternatives to single occupancy car trips
M1. Increase active transportation and transit for local work trips M2. Expand availability of transit and shared mobility services M3. Implement the Bicycle and Pedestrian Transportation Plan M4. Improve Transportation Demand Management for employees and residents Change the way we think about parking cars
M5. Implement smart parking infrastructure in public garages Learn how we can grow without increasing GHG emissions
M6. Study land use and transportation
M7. Continue to implement the City’s Housing Element
M8. Improve transit and traffic flow
9 Electric vehicles (EVs) and plug-in hybrid electric vehicles combined.

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Performance Indicators
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Leverage current tools to foster mobility related GHG reductions M9. Create housing density and land use mix that supports transit and non-SOV (Single Occupancy Vehicle) transportation modes
M10.Encourage reductions in GHGs and VMT (vehicle miles traveled)

KEY PERFORMANCE INDICATORS
• Total VMT
• Commute mode share for all modes
• Commute Benefits participation by City employees
• Transit ridership, the proportion of residents within a quarter-mile walkshed of frequent transit, and the proportion of residents covered by on-demand transit services (data may not be available every year)
• Number and proportion of residents within a 10-minute walk of retail or other essential services/land uses (data may not be available every year) • Number of businesses participating in Transportation Demand Management (TDM) programs (when regional TDM Program data becomes available) In order to make progress on the Mobility goals, in 2024 the City focused on key actions to promote alternatives to single occupancy car trips (M1, M2, M3), change the way we think about parking cars (M5), learn how we can grow without increasing GHG emissions (M7, M8), and leverage current tools to foster mobility related GHG reductions (M9).

Mobility KPI: Total VMT
In 2023, total VMT was 597,735,000, which is an increase from 2022, when total VMT was 575,389,724. While VMT data were not available for 2024, City staff and external experts calculated a preliminary estimate of 2024 VMT based on 2023 per capita VMT, 2024 population for passenger vehicles, and service population for commercial vehicles and buses. The preliminary estimate of 601,350,463 is an increase from 2023, but significantly less than the pre-COVID 19 VMT of 952,584,400 in 2019.

Mobility KPI: Commute mode share for all modes
Table 1 shows the commute mode share for Palo Alto residents age 16 and older. These data are from the US Census American Community Survey. Data from 2019 is also included as a comparison to pre-COVID 19 pandemic commute mode share. The share of trips taken by solo drivers in automobiles has increased since 2022 but is less than 2019. The share of trips taken by Palo Alto residents driving in carpools has increased from all years. The share of Palo Alto residents taking public transportation has not returned to pre-COVID 10 levels. However, the share of Palo Alto residents bicycling and walking has increased since 2019. It is important to note that the share of Palo Alto residents working from home has increased significantly since 2019, with 9.7% working from home in 2019 compared to 22.4% working from in 2024. The share of Palo Alto residents working from home in 2024 decreased from both 2023 and 2022.

The large increase in Palo Alto residents working from home reduces the total number of work trips and changes the mode share for other modes.

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Performance Indicators
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Table 1. Mode share estimates as a percentage of commute trips taken by Palo Alto residents age 16 and older
Mode 2019 2022 2023 2024
Automobile – Solo Driver 61.2% 46.1% 51.6% 51.5%
Automobile – Carpool 5.2% 2.4% 3.9% 6.2%
Taxi, motorcycle, or other 2.1% 1.7% 2.1% 1.2%
Public Transportation 8.0% 1.6% 2.3% 1.2%
Bicycle 10.0% 9.2% 6.7% 11.0%
Walk 3.9% 6.4% 5.4% 6.6%
Work from home 9.7% 32.6% 27.9% 22.4%
Table 2 shows the mode share for all trips taken within, inbound to Palo Alto, or outbound to Palo Alto by all travelers – residents, commuters, and visitors - in 2022 through 2023. These data are from Google Environmental Insights Explorer, which has not released transportation data for 2024. This includes travel mode share for Palo Alto, which is not yet available for 2024.

Data from 2019 is also included as a comparison to pre-COVID 19 pandemic trip mode share.

The shares of trips taken by automobile, rail, and walking in 2023 were comparable to 2022.

Bus ridership increased in 2023 compared to 2022, returning to pre-COVID 19 levels. However, rail ridership is still lower than pre-COVID 19 and bicycle ridership further decreased below preCOVID 19 levels.

Table 2. Mode share estimates as a percentage of trips taken within, inbound to Palo Alto, or outbound from Palo Alto by all travelers
Mode 2019 2022 2023
Automobile 71.7% 79.8% 79.9%
Rail 2.8% 1.3% 1.5%
Bus 1.3% 0.8% 1.3%
Bicycle 5.2% 5.1% 4.6%
Walk 19% 13.1% 12.8%
Mobility KPI: Commute Benefits participation by City employees In 2024, 25% of full-time City employees participated in commute benefits programs.

Mobility KPI: Transit ridership, the proportion of residents within a quarter-mile walkshed of frequent transit, and the proportion of residents covered by on-demand transit services In 2024, 1.2% of Palo Alto residents took transit for their commute to work. For all trips in Palo Alto by all travelers – residents, commuters, and visitors – 2.1% of all trips were by transit in 2023. 2024 data is not yet available. In 2024, 17.6% of residents were within a quarter-mile walkshed of frequent transit. Walksheds are a visual representation of the area a pedestrian can travel to access transit, and “frequent transit” is defined as a stop or station with service every 15 minutes or less. Since the introduction of Palo Alto Link in 2023, 67,000 Palo Alto residents (99% of the population) are covered by on-demand transit.

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Mobility KPI: Number and proportion of residents within a 10-minute walk of retail or other essential services/land uses
In 2024, 37,800 Palo Alto residents (56.2% of all 67,231 residents) lived within a 10-minute walk of retail locations or other essential services.

Mobility KPI: Number of businesses participating in Transportation Demand Management (TDM) programs
The City will report on the “Number of businesses participating in TDM programs” KPI when regional TDM program data becomes available.

Water
GOALS
 Reduce Palo Alto’s potable water consumption 30% compared to a 1990 baseline (subject to refinement based on forthcoming California water efficiency standards expected in 2024)
 Develop a water supply portfolio which is resilient to droughts, changes in climate, and water demand and regulations, that supports our urban canopy

KEY ACTIONS
W1. Maximize water conservation and efficiency
W2. Build a salt removal facility
W3. Implement One Water Portfolio projects
W4. Develop a dynamic water planning tool

KEY PERFORMANCE INDICATORS
• Estimated indoor per capita residential water consumption • Estimated outdoor residential water consumption for irrigation • Water consumption of commercial customers with irrigation meters • Amount of recycled water used in Palo Alto
• Volume of stormwater that is captured and reused
The near-term focus for water is reducing water consumption while exploring ways to capture and store water and increase the availability and use of recycled water.

In 2024, the City held three landscape workshops on water-saving topics including droughttolerant landscape design, lawn conversion, and information on available rebates. The City tabled at five neighborhood events to educate residents on water efficiency programs and rebates. The City also provides the WaterSmart water management tool which gives residents information about their water consumption and personalized water conservation recommendations.

The Water KPIs are shown in Table 3.

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Table 3: S/CAP Key Performance Indicators for Water (2024) KPI 2024
Estimated indoor per capita residential water
consumption
17,927 Gallons per capita
Estimated outdoor residential water
consumption for irrigation
662 Million gallons
Water consumption of commercial
customers with irrigation meters
349 Million gallons
Amount of recycled water used in Palo Alto 63 Million gallons Volume of stormwater that is captured and
reused
No data to report – no active stormwater
reuse projects at this time
Climate Adaptation and Sea Level Rise
GOALS
 Develop and adopt a multi-year Sea Level Rise Adaptation Plan including a Sea Level Rise Vulnerability Assessment and adaptation plan  Minimize wildland fire hazards by ensuring adequate provisions for vegetation management, emergency access and communications, interagency firefighting, and standards for design and development within wildland areas

KEY ACTIONS
Minimize the impacts of sea level rise
S1. Complete a Sea Level Rise Vulnerability Assessment
S2. Implement a Sea Level Rise Adaptation Plan
S3. Begin design process for a levee project
S4. Complete bridge improvements and identify protection strategies from flood events Minimize the impacts of wildland fire hazards
S5. Implement the Foothills Fire Management Plan
S6. Minimize fire hazards through zoning
S7. Collaborate on reducing wildfire hazards
S8. Implement CAL FIRE education programs

KEY PERFORMANCE INDICATORS
• Percent of vulnerable locations protected from three feet of sea level rise • Percent of properties protected from San Francisquito Creek flooding • Progress towards sea level rise levee alignments
• Implementation of Foothills Fire Management Plan mitigation measures The near-term focus for Climate Adaptation and Sea Level Rise is to develop and adopt a multiyear Sea Level Rise Adaptation Plan and minimize wildland fire hazards through Foothills Fire Item 9
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Management Plan implementation, zoning, and collaborating with Fire agencies. In order to make progress on the Climate Adaptation and Sea Level rise goals, in 2024 the City focused on key actions to minimize the impacts of sea level rise (S1, S2, S3, S4) and minimize the impacts of wildland fire hazards (S5, S6, S7, S8).

Sea Level Rise KPI: Percent of vulnerable locations protected from three feet of sea level rise The “Percent of vulnerable locations protected from three feet of sea level rise” KPI is a longterm project that likely won’t result in near-term changes until project construction details are confirmed.

Sea Level Rise KPI: Percent of properties protected from San Francisquito Creek flooding Data is unavailable for the “Percent of properties protected from San Francisquito Creek flooding” KPI. However, the Hamilton Avenue Capacity Upgrades Project has begun the planning phase. The Project is intended to reduce flooding that occurs during large storm events by increasing the storm drain capacity in a 183 acre watershed connected to San Francisquito Creek. Another capacity upgrade on Center Drive is planned for in the 2015 Storm Drain Master Plan that would improve drainage in a 26 acre watershed that flows to San Francisquito Creek.11,12
Sea Level Rise KPI: Progress towards sea level rise levee alignments Suggested alignments were identified as part of the Strategy to Advance Flood Control, Ecosystem Restoration and Recreation report produced by the San Francisquito Creek Joint Power Authority and then further vetted by the United States Army Corps of Engineers (USACE). The subsequent USACE feasibility study conducted in partnership with Valley Water, determined that there is no federal interest in funding Palo Alto shoreline improvements at this time, and that improvements would not be needed until approximately 2060. This determination was predicated on a USACE model that does not factor in local assets with the federal cost benefit analysis (e.g., wastewater treatment facility or airport). Valley Water has indicated that smaller levee improvement projects may be considered for Valley Water funding and staff will explore those options as resources allow.

In parallel to levee improvements, SB272 (Laird): Sea Level Rise Planning and Adaptation signed in late 2023 requires a Bay Area regional sea level rise adaptation plan and harmonized subregional plans. Plan requirements were published by the Bay Conservation and Development Commission in late 2024. The City is currently awaiting a determination about a SB1 Grant that was submitted by Santa Clara County Office of Sustainability to develop a regional sea level rise vulnerability assessment and adaptation plan. The City of Palo Alto will be a grant partner if SB1 funding is received. This work will inform additional vulnerabilities, provide an estimated cost of inaction, and conceptual adaptation strategies to protect City and 11 Palo Alto Storm Drain Master Plan; 2015; https://www.paloalto.gov/files/assets/public/v/1/publicworks/engineering-services/webpages/stormwater/storm-drain/storm-drain-master-plan-update-june-2015.pdf 12 Ballot Measure Description of the Proposed Storm Water Management Fee; 2017; https://www.paloalto.gov/files/assets/public/v/1/public-works/flood-and-storm/storm-water-managementprogram/stormwater-management-fee-ballot-2017-final.pdf Item 9
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community assets. If funded, this work will complement the preexisting City’s Vulnerability Assessment15 that was completed in 2022. SB1 grant funding is not slated to reexamine levee alignments themselves but would provide additional protection strategies that could be considered.

Climate Adaptation KPI: Implementation of Foothills Fire Management Plan mitigation measures
The City is working on various efforts related to implementation of the Foothills Fire Management Plan, including:
• Leading a multi-departmental Foothills Fire Management Plan Group that encompasses vegetation management, utilities fire mitigation, policy recommendations, wildfire detection technologies, and overarching planning;
• Coordinating with Santa Clara County Fire Department, Stanford University, Santa Clara County FireSafe Council, Town of Los Altos Hills, and Woodside Fire Protection District on regional wildfire prevention and preparedness efforts; and, • Updating the 2025 Palo Alto Community Wildfire Protection Plan (CWPP)/ Foothills Fire Management Plan (FFMP)
The City is working on the deployment of emergency power systems including generators and solar battery back-up improvements in key locations to keep equipment online when electricity may be disrupted or disconnected during a fire. The Utilities Department is nearing completion of the undergrounding of electric lines in the Foothills region and removing de-energized lines and poles. They are also developing plans to harden utilities infrastructure from wildfire in this region. The City is also doing ongoing work to reduce flammable vegetation and other “fuels” in the foothills as part of a multi-year management plan.

Palo Alto Fire Department, OES, and CSD completed an interagency project with Stanford University and Portola Fire Protection District for the installation of fifty N5 smoke sensors across the Foothills WUI, 12 of which were placed on Palo Alto lands.

The “Implementation of Foothills Fire Management Plan mitigation measures” KPI is shown in Table 4.

Table 4: S/CAP Key Performance Indicators for Foothills Fire Management Plan Mitigation Measures (2022-2023)
Foothills Fire
Management
Plan Mitigation
Measure
2022 2023 2024
15 2022 Palo Alto Sea Level Rise Vulnerability Assessment; https://www.cityofpaloalto.org/files/assets/public/v/1/public-works/environmental-compliance/sea-levelrise/palo-alto-sea-level-rise-vulnerability-assessment-june-2022-062822-linked-final.pdf Item 9
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Number of
residential
defensive space
re-inspections
that are required
33 homes 18 homes 21 homes
Percent of miles
of overhead
utility line tree
trimming in
Foothills
completed

65.73%
(7.25 miles)

67.91%
(7.49 miles)

54.49%
(2.91 of 5.34 total miles)
Total miles of
electric lines
undergrounded in
the City of Palo
Alto Utilities
Foothills
Coverage Area
Approx. 2.94 miles
(15,500 feet)
Approx. 1.04 miles
(5,500 feet)
Approx. 2.27 miles
(12,000 feet)
Percent of
electric line miles
undergrounded in
the City of Palo
Alto Utilities
Foothills
Coverage Area

31.5% 11.2% 24.4%
Natural Environment
GOALS
 Restore and enhance resilience and biodiversity of our natural environment throughout the City
 Increase tree canopy to 40% city-wide coverage by 2030  By 2030, achieve a 10% increase in land area that uses green stormwater infrastructure to treat urban water runoff, compared to a 2020 baseline

KEY ACTIONS
Maintain and protect tree canopy
N1. Increase Palo Alto’s tree canopy
N2. Ensure No Net Tree Canopy Loss for all projects
N3. Reduce pesticide use in parks and open space preserves N4. Enhance pollinator habitat
N5. Establish a carbon storage of tree canopy baseline and KPI Restore and enhance biodiversity
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N6. Maximize biodiversity and soil health
N7. Coordinate implementation of the City Natural Environment-Related Plans N8. Expand Water Efficient Landscape Ordinance (WELO) requirements N9. Phase out gas-powered lawn and garden equipment
Reduce pollutants entering the Bay
N10. Support the Green Stormwater Infrastructure Plan.

N11. Incorporate green stormwater infrastructure in municipal projects

KEY PERFORMANCE INDICATORS
• City-wide Tree Canopy coverage
• Native species on City property and in new landscape projects (to measure biodiversity) • Land area that uses green stormwater infrastructure to treat urban water runoff The near-term focus for Natural Environment is to increase Palo Alto’s Tree Canopy, reduce pesticide usage in parks and open space preserves, and support the Green Stormwater Infrastructure Plan and incorporate it in municipal projects. In order to make progress on the Natural Environment goals, in 2024 the City focused on key actions to maintain and protect tree canopy (N2, N3, N4, N5), restore and enhance biodiversity (N6, N7, N8, N9), and reduce pollutants entering the Bay (N10, N11).

Ongoing tree planting efforts to increase tree canopy will be integrated with traditional tree planting programs and Green Stormwater Infrastructure to provide co-benefits including carbon sequestration, improve water quality, capture stormwater when feasible, and reduce the urban heat island.

Natural Environment KPI: City-wide Tree Canopy coverage 2024 canopy coverage data is not yet available. In 2023, citywide tree canopy coverage was 44%, however this includes open space and the Foothills Nature Preserve. Tree canopy coverage in urbanized areas only was 26%.

Natural Environment KPI: Native species on City property and in new landscape projects (to measure biodiversity)
In 2024, City landscape projects included the Boulware Park renovation, Cameron Park butterfly garden installation, and Mitchell Park Dog Park. Of the 996 individual plants established at these sites, 935 were native to California. Across the sites, 22 native species were planted.

Natural Environment KPI: Land area that uses green stormwater infrastructure to treat urban water runoff
There is currently no data to report for the “Land area that uses green stormwater infrastructure to treat urban water runoff” KPI.

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Zero Waste
GOALS
 Divert 95% of waste from landfills by 2030, leading to zero waste  Implement short- and medium-term initiatives identified in the 2018 Zero Waste Plan

KEY ACTIONS
Education and outreach
ZW1. Encourage food waste prevention and require food recovery from commercial food generators
ZW2. Promote residential food waste reduction
ZW3. Champion waste prevention, reduction, reusables, and the sharing economy ZW4. Provide waste prevention technical assistance to the commercial sector Collaborate on and expand policies
ZW5. Prioritize domestic processing of recyclable materials ZW6. Eliminate single-use disposable containers
ZW7. Expand the Deconstruction and Construction Materials Management Ordinance ZW8. Implement Reach Code standard for low carbon construction materials

KEY PERFORMANCE INDICATORS
• Diversion rate
• Number of Zero Waste Plan initiatives implemented
The near-term focus for Zero Waste is to encourage residents and businesses to reduce their food waste, which will also reduce the associated greenhouse gas emissions, lower their waste generation through the undertaking of zero waste living practices of using less at home and at work; to champion waste prevention technical assistance to businesses; eliminate single-use disposable containers; and prioritize domestic processing of recyclable materials.

In order to make progress on the Zero Waste goals, in 2024 the City focused on key actions on education and outreach (ZW1, ZW2, ZW3, ZW4) and to collaborate on and expand policies (ZW5, ZW8). The City developed a new booklet for businesses, “Multi-Ordinance Checklist”, that summarizes Palo Alto’s Zero Waste and SB 1383 requirements such as requirements for the use of colored refuse containers as well as see-through colored bags to match the color of the containers for Compost, Recycle, and Landfill materials. The printed copies were mailed to 425 commercial businesses, specifically food service establishments, in November 2023. In addition, the City developed a new brochure for the Very Small Quantity Generator Program for household hazardous waste and has been distributing it during household hazardous waste events and direct business engagement.

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creating changes on what will be considered recyclable and compostable. The City developed and printed postcard and trifold brochures on the Disposable Foodware Ordinance/AB 1276 to be mailed and handed out to 450 food service establishments.

The Deconstruction and Construction Materials Management Ordinance augmentation (ZW7) will be considered after evaluation of the current ordinance’s effectiveness.

In January 2023, the new reach code standard for low carbon construction materials went into effect. In June 2023, the City launched a new Zero Waste Living outreach campaign and newsletter that enhances and expands information to the community about actionable ways to tackle the waste challenges our community is dedicated to solving. The City is also working to develop waste prevention outreach tools and technical assistance for the commercial sector.

Zero Waste KPI: Diversion rate
As a result of the City’s efforts, the diversion rate for 2024 was 88%, which is a decrease from 91% in 2023 due to increased waste landfilled in calendar year 2024.

Zero Waste KPI: Number of Zero Waste Plan initiatives implemented The City continues to implement Zero Waste Plan initiatives – 18 initiatives are complete (38%), 15 are in progress (31%), and 15 remain to be completed (31%).

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Attachment E: S/CAP Key Performance Indicators Progress Summary Key Performance Indicator 2022 2023 2024
GHG reductions (1990 baseline) 47.4% 48.1% 50.2%
Community awareness No data 68% of participants
indicated that it is
essential or very
important for Palo Alto
to focus on GHGs in
the next 2 years
40% of Community
Survey respondents
indicated they were at
least slightly familiar
with the S/CAP and
80x30 goal
Climate Action
Participation in Climate Pledge No data No data 3
GHG emissions from natural
gas use in buildings
144,996 MT CO2e 146,289 MT CO2e 127,051 MT CO2e
% of single-family households
in Palo Alto with no natural gas
connections

1.2% (208 homes) 1.5% (232 homes) 2.0% (289 homes)
Energy
% of natural gas use reduction
in major facilities and City
facilities (2016 baseline)
No data 45% reduction in City
facilities
45% reduction in City
facilities
GHG emissions, vehicle travel 221,923 MT CO2e 225,387 MT CO2e 226,019 MT CO2e* % of registered vehicles in Palo
Alto that are EVs
13% 16% 19%
% of new vehicle sales in Palo
Alto that are EVs
43% 52% 55%
% of multifamily residents with
access to overnight EV charging
3% 4% 7.6%
Electric Vehicles
Gasoline sales in Palo Alto Data unavailable Data unavailable Data unavailable Total Vehicle Miles Traveled
(VMT)
575,190,655 597,735,000 601,350,463*
(preliminary estimate)
Commute mode share
(commute trips by residents
age 16 and older)
• Automobile – solo driver
• Automobile – carpool
• Taxi, motorcycle, or other
• Public Transportation
• Bicycle
• Walk
• Work from home
• 46.1%
• 2.4%
• 1.7%
• 1.6%
• 9.2%
• 6.4%
• 32.6%
• 51.6%
• 3.9%
• 2.1%
• 2.3%
• 6.7%
• 5.4%
• 27.9%
• 51.5%
• 6.2%
• 1.2%
• 1.2%
• 11.0%
• 6.6%
• 27.4%
Trip mode share (all trips by all
travelers)
• Automobile
• Rail
• Bus
• Bicycle
• Walk
• 71.7%
• 2.8%
• 1.3
• 5.2%
• 19%
• 79.9%
• 1.5%
• 1.3%
• 4.6%
• 12.8%
Data forthcoming*
Mobility
City employee commute
benefits participation
No data 19% 25%
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Key Performance Indicator 2022 2023 2024
• Transit ridership by adult
residents for commute trips
• Transit ridership by all
travelers for all trips
• The proportion of residents
within a quarter-mile
walkshed of frequent transit
• Proportion of residents
covered by on-demand
transit services
• 1.6%
• 2.1%
• Data unavailable
• Data unavailable
• 2.3%
• 2.8%
• 21.9%
• 99.7%
• 1.2%
• Data forthcoming*
• 17.6%
• 99%
Number and proportion of
residents within a 10-minute
walk of retail or other essential
services/land uses
Data unavailable 32,700
(48% of all 68,112
residents)
37,800
(56.2% of all 67,231
residents)
Businesses participating in
Transportation Demand
Management (TDM) programs
Data unavailable Data unavailable Data unavailable
Indoor per capita residential
water consumption (estimated)
24,171 gallons 17,537 gallons 17,927 gallons
Outdoor residential water
consumption for irrigation
(estimated)
427 million gallons 620 million gallons 662 million gallons Water consumption of
commercial customers with
irrigation meters
348 million gallons 312 million gallons 349 gallons
Amount of recycled water used
in Palo Alto
113.5 million gallons 81.05 million gallons 63.21 million gallons Water
Volume of stormwater that is
captured and reused
No data No data No data
Percent of vulnerable locations
protected from three feet of
sea level rise
No data No data No data
Percent of properties protected
from San Francisquito Creek
flooding
No data No data No data
Climate Adaptation and Sea
Level Rise
Progress towards sea level rise
levee alignments
Not launched yet No data USACE feasibility study
conducted; no federal
interest in funding
large levee alignment
projects at this time
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Key Performance Indicator 2022 2023 2024
Implementation of Foothills
Fire Management Plan
mitigation measures
• Number of residential
defensive space reinspections that are
required
• % of miles of overhead
utility line tree trimming in
Foothills completed
• Total miles of electric lines
undergrounded in the City
of Palo Alto Utilities
Foothills Coverage Area
• % of electric line miles
undergrounded in the City
of Palo Alto Utilities
Foothills Coverage Area
• 33 homes
• 65.73% (7.25 miles
completed)
• 2.94 miles
• 31.5%
• 18 homes
• 67.91% (7.49 miles
completed)
• 1.04 miles
• 11.2%
• 21 homes
• 54.49% (2.9 miles
completed of 5.3
total miles)
• 2.27 miles
• 24.4%
City-wide tree canopy coverage No data 26% of urbanized areas 44% including
Foothills Nature
Preserve area
Data forthcoming
Native species on City property
and in new City landscape
projects (to measure
biodiversity)
No data No new landscape
projects to report
935 individual native
plants; 22 native
species
Natural Environment
Land area that uses green
stormwater infrastructure to
treat urban water runoff
No data No data No data
Diversion rate 91% 91% 88%
Zero
Waste
Zero Waste Plan initiatives
implemented
No data 18 completed
15 in progress
15 remaining
18 completed
15 in progress
15 remaining
* VMT data were not available in Google Environmental Insights Explorer (Google EIE) for 2024. City staff and external experts calculated a preliminary estimate of 2024 VMT based on 2023 per capita VMT, 2024 population for passenger vehicles, and service population for commercial vehicles and buses. 2024 KPI data will be revised when 2024 Google EIE data becomes available.

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Attachment F: 2023-2025 S/CAP Work Plan Status
For more details, see the 2025 Q1-2 S/CAP report1. The 2025 Q3-4 report will be published in February. = Completed = In Progress = Delayed / On Hold = Ongoing Item No. Work Plan Item Status
1A Grid Modernization Study
1B Reliability and Resiliency Strategic Plan Development 1C Reliability and Resiliency Strategic Plan (RRSP) Implementation (major implementation item completed in 2025 (cost-benefit study), transitioning this item to an ongoing item in future reports) 1D Evaluate Utility Rates and Fees

2.1A Promote EV Adoption

2.1B Emissions Reduction Advisory Services

2.1C Evaluate small electric vehicles (e-micromobility) program potential

2.1D Heat Pump Water Heater Electrification Pilot Program

2.1E Transition to Full-Scale Heat Pump Water Heater Electrification Program

2.1F Electrification Data Collection Program

2.1G Launch Pilot Programs for Modernized Neighborhoods

2.1H Establish Single-Family Electrification Rebates

2.1I Design Affordable Housing EV Charging and Electrification Pilot

2.1J Establish Multi-Family EV Charger Program

2.1K Multi-family and Affordable Housing Electrification and EV Charger Access Strategy Development

2.2A Rooftop Packaged Heating, Ventilation, and Air Conditioning (HVAC) Pilot 1 City Council, November 3, 2025; Agenda Item A; SR #2505-4672, https://portal.laserfiche.com/Portal/DocView.aspx?id=234369&repo=r704298fc Item 9
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2.2B Rooftop Packaged HVAC Advanced Pilot Design

2.2C Establish Major Employer Partnerships

2.2D Commuter Transportation and EV Charging Strategy

2.2E Identify Regional and State Partnerships

2.3A Transportation and Land Use Policies and Programs

2.3B Housing Element Adoption

2.3C Housing Element Implementation

2.3D Micro-mobility Evaluations

2.3E Launch On-demand Transit Pilot

2.3F Update Bicycle Plan (final draft plan complete, going to Council in early 2026)

2.3G Vision Zero Program (Safety Action Plan completed in 2025, transitioning this item to be to an ongoing item in future reports to reflect ongoing plan implementation)

2.3H Evaluate Expansion of Employer Transportation Demand Management (TDM)

2.3I Proposals for Managing Downtown Parking Availability

2.3J Implement Efficient Downtown Parking Management

2.3K Traffic Signal Improvements & Transit Signal Priority

2.4A Facility Electrification Assessment Plan

2.4B Facility Electrification Assessment Implementation

2.4C Electrify Equipment at City Facilities during Routine Replacement

2.4D Electrify City Vehicle Fleet

2.3E Build City Fleet and Employee Charging Infrastructure

2.4F Publicly Owned Charger Strategic Plan

2.5A Electric Vehicle Strategic Plan Development

3.1A Build awareness of the need for climate action and the benefits the City and its utility can receive and provide

3.1B Drive community actions to achieve S/CAP goals
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3.1C S/CAP Survey Program

3.1D S/CAP Reporting

3.1E Build confidence in the City’s electric infrastructure 4A Multi-family and Commercial End Use Study
4B Idea Generation and Additional Research
4C Additional Emissions Reduction Project Prioritization 5A Resource Needs Assessment
5B Funding Alternatives
5C Affordability Study
5D Gas Utility Financial and Operating Plan
8A Maximize Water Conservation and Efficiency
8B Design and Build a Salt Removal Facility for the Regional Water Quality Control Plant 8C Develop a “One Water” Portfolio for Palo Alto
8D Develop a tool for dynamic water planning in the future 8E Complete the Sea Level Rise Vulnerability Assessment 8F Develop a Sea Level Rise Adaptation Plan
8G Begin Design Process for a Levee Project
8H Identify Protection Strategies from Significant Flood Events at Newell Road Bridge 8I Identify Protection Strategies from Significant Flood Events at Pope Chaucer Bridge and Creek 8J Identify Protection Strategies from Significant Flood Events 8K Implement Foothills Fire Management Plan
8L Minimize Fire Hazards Through Zoning
8M Collaborate on Reducing Wildfire Hazards
8N Implement CAL FIRE Public Education Programs
8O Increase Palo Alto’s Tree Canopy and establish a baseline and Key Performance Indicator for carbon storage of tree canopy
Canopy
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Carbon
Storage
8P Ensure No Net Tree Canopy Loss for all Projects
8Q Reduce Pesticide Use in Parks and Open Space Preserves 8R Coordinate Implementation of City Natural Environment-Related Plans 8S Support the Green Stormwater Infrastructure (GSI) Plan and incorporate GSI in Municipal Projects 8T Encourage Food Waste Prevention and Require Food Recovery from Commercial Food Generators 8U Promote Residential Food Waste Reduction
8V Champion Waste Prevention, Reduction, Reusables, and the Sharing Economy 8W Provide Waste Prevention Technical Assistance to the Commercial Sector 8X Prioritize Domestic Processing of Recyclable Materials 8Y Eliminate Single-Use Disposable Containers
8Z Expand the Deconstruction and Construction Materials Management Ordinance 8aa Implement Reach Code standard for Low Carbon Construction Materials Item 9
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1 2026-2027
Sustainability and Climate Action Plan Work Plan
The Sustainability and Climate Action Plan (S/CAP) outlines the strategies for achieving the City’s greenhouse gas (GHG) emissions reduction targets, while improving our natural environment, adapting to climate impacts, and increasing livability for Palo Alto residents. The S/CAP outlines goals and key actions in eight areas: Climate Action, Energy, Electric Vehicles, Mobility, Water, Climate Adaptation and Sea Level Rise, Natural Environment, and Zero Waste.

The climate action areas of Climate Action, Energy, Electric Vehicles, and Mobility primarily focus on the overarching goals to reduce GHG emissions 80% below 1990 levels and achieve carbon neutrality by 2030. The sustainability areas of Water, Climate Adaptation and Sea Level Rise, Natural Environment, and Zero Waste do not necessarily have a direct impact on greenhouse gas reductions, but have critically important sustainability, public health and safety, regional, resource conservation, and equity benefits that contribute to overall climate action.

The 2026-2027 S/CAP Work Plan is primarily focused on strategies for Palo Alto. The City recognizes the importance of regional collaboration and coordinates with regional climate action and sustainability efforts whenever possible. This includes collaboration with the County of Santa Clara Office of Sustainability and Resilience, the San Mateo County Climate Collaborative, Green Cities California, and Bay Area Air District.

The 2026-2027 S/CAP Work Plan includes 28 strategies focused on climate action, 16 strategies focused on sustainability and three strategies for overall S/CAP Communications for all areas of the S/CAP.

Climate Action
Single-Family
CA1. Continue Advanced Home Electrification Pilot Program: Offer full suite of program services to support residents with home electrification projects, including turnkey service, technical assistance, and rebates. Offer enhanced rebates and 0% financing to income-qualified households. Goals and funding levels to be developed annually and coordinated with annual budget process. Program will be designed and changed as needed to complement the Bay Area Air District’s Zero-NOx rules (Rules 9-4 and 9-6).

Resource Availability: Fully staffed; goals and funding levels to be considered on timeline in alignment with annual budget process. Explore ways to promote resources for renters, including information on appliances like portable induction cooktops and Item 9
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2 window-mounted heat pumps that can help renters reduce emissions without asking landlords to make major improvements to the units. Target Completion Date: Ongoing.

CA2. Develop a Residential Electrification as a Service or Similar Financing Pilot for Council Approval: Offer electrification as a service or similar creative financing pilot to residents to support financing of gas to heat pump projects as a pilot of more financially efficient program design. Develop pilot participation agreement, enable tracking of debt repayment in billing system, create process to enroll customer in EaaS. Resource Availability: Program team fully staffed, IT / administrative staffing needs evaluation; goals and funding levels to be considered on timeline in alignment with annual budget process. Target Completion Date: Q3 2026 (tentative, pending staff evaluation).

CA3. Enhance Data Tracking for Home Electrification: Enhance existing database to more comprehensively track home electrification status and incorporate data from existing program databases, home assessments, gas data analytics to estimate home gas equipment, and results from voluntary data inputs by residents. This will allow staff to more effectively track program results, perform more targeted outreach, and tailor communications to homeowners based on their building characteristics. Resource Availability: As staff time is available; consultant resources needed, covered within existing budget. Target Completion Date: Q4 2026.

Multi-Family
CA4. Launch Enhanced Multifamily EV Charging Infrastructure Program: Update program guidelines, incentives (i.e. rebates, financing), and technical assistance offerings for the installation of EV charging infrastructure that supports multifamily residents through:
• private on-site charging at multifamily properties;
• publicly-accessible charging at neighborhood e-mobility hubs at public or private properties; or
• publicly-owned or public-private partnership neighborhood curbside charging installations
This work includes complementary programming supporting EV adoption by incomequalified customers and integration of alternative transportation infrastructure, launch in alignment with design guidelines approved by the City Council on November 17, 2025. Resource Availability: Fully staffed; goals and funding levels to be considered on timeline in alignment with annual budget process. Target Completion Date: Launch in 2026.

CA5. Develop a Charging-as-a-Service (CaaS) or Similar Financing Pilot for Council Approval: Offer charging-as-a-service (CaaS) or a similar creative financing program to Item 9
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3 multi-family property owners to support financing of EV infrastructure projects developed through the Multifamily EV Charging Infrastructure Program. Develop pilot participation agreement, enable tracking of debt repayment in billing system, create process to enroll customer in CaaS, and collaborate with EV service providers to identify projects. Resource Availability: Program team fully staffed, IT / administrative staffing needs evaluation; goals and funding levels to be considered on timeline in alignment with annual budget process. Target Completion Date: Launch in 2026.

CA6. Continue Affordable Multifamily Building Electrification Incentive Program: Continue pilot electrification program for affordable multifamily properties providing rebates to support the electrification of central water heating and/or space heating equipment in at least 3-5 properties and in-unit electrification of at least one property. The pilot program will provide opportunities to design and test innovative low-interest financing models as well as opportunities to model turn-key multifamily residential electrification. Resource Availability: Fully staffed; goals and funding levels to be considered on timeline in alignment with annual budget process. Target Completion Date: End of 2027.

CA7. Launch Multi-Family Electrification Technical Assistance: Design and implement a technical assistance program to address the particular challenges associated with electrification of multi-family buildings. This would complement incentives or other financial assistance provided by other programs (e.g. via residential whole home programs and electrification as a service for multi-family in-unit improvements and via commercial electrification programs for central system improvements). Resource Availability: As staff time is available; goals and funding levels to be considered on timeline in alignment with annual budget process. Explore ways to promote resources for renters, including information on appliances like portable induction cooktops and window-mounted heat pumps that can help renters reduce emissions without asking landlords to make major improvements to the units. Target Completion Date: End of 2027.

Non-Residential
CA8. Launch Advanced Heat Pump HVAC Program: Launch an advanced Heat Pump HVAC (HPHVAC) program to transition aging gas systems (rooftop units and ground mounted) off of gas in alignment with Council-approved design guidelines. Resource Availability: Fully staffed; goals and funding levels to be considered on timeline in alignment with annual budget process. Target Completion Date: Q4 2026 - Q1 2027.

CA9. Develop a Commercial Electrification as a Service pilot or Similar Financing Pilot for Council Approval: Offer electrification as a service or a similar creative financing program to commercial property owners to support financing of gas to heat pump projects as a pilot of more financially efficient program design. Develop pilot participation agreement, enable tracking of debt repayment in billing system, create process to enroll customer in Electrification as a Service (EaaS). Resource Availability:

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4 Program team fully staffed, IT / administrative staffing needs evaluation. Target Completion Date: Q3 2027 (tentative, pending staff evaluation).

CA10. Launch Workplace EV Charging Pilot: Implement a workplace EV charging program building upon the framework of the multifamily EV charging program. Advance additional analysis as needed on the current state of workplace charging, available electric capacity and commute patterns. Collaborate with the EV Team and Office of Transportation on grant opportunities to promote to commercial property owners.

Resource Availability: Fully staffed. Target Completion Date: 2027 CA11. Launch Pilot Program for Electrification of Centralized Water Heaters and Boilers:

Provide incentives for a select number of large equipment replacements to collect performance data, identify barriers to electrification, and compare cost impacts of like-for-like versus electric options, including effects on customer utility bills. Resource Availability: As staff time is available; goals and funding levels to be considered on timeline in alignment with annual budget process. Target Completion Date: 2027.

CA12. Establish One or More Partnerships with Large Commercial Facility Owners: Develop custom sustainability partnerships with at least one major employer, such as creative financing options, electrification pilots with large facilities, and support of corporate electrification efforts. Resource Availability: Fully staffed; goals and funding levels to be considered on timeline in alignment with annual budget process. Target Completion Date: 2026.

Regulatory, Analytics, Finances, and Strategy
CA13. Develop S/CAP Funding and Financing Strategies for City Council Consideration:

Using insights and models developed for S/CAP Funding Study, City staff will develop potential funding and financing strategies for City Council consideration. Policies will consider different timelines, the effect of regulatory requirements, and equipment focus to provide a range of policy alternatives. Analyses will consider resource needs, additional revenue requirements, and potential impact on utility rates. Resource Availability: Fully staffed, to be absorbed from existing budgets. Target Completion Date: Q4 2026.

CA14. Develop Potential Regulatory Measures to Drive Climate Action: Develop a list of potential regulatory measures to drive electrification, energy efficiency, and EV adoption in Palo Alto for consideration by City Council, in addition to implementation of Reach Codes that apply. Seek regulatory measures that could serve as the “regulatory backbone” of a decarbonization strategy (e.g. a Building Emissions Savings Ordinance that would require compliance at the time of residential or commercial property listing or a commercial Building Performance Standard). Consider the programs needed to make such mandates work, such as incentives and technical assistance programs to help building owners meet regulatory requirements. Resource Availability: Fully staffed. Target Completion Date: Q4 2026.

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5 CA15. Develop Carbon Neutrality Strategies for City Council Consideration: Develop potential strategies for City Council consideration for achieving community carbon neutrality by 2030. Resource Availability: Fully staffed. Target Completion Date: Q4 2026.

CA16. Develop Potential Strategies for Cost-Based Pricing of Non-Electric Decarbonization and Inefficient Electrification: Based in industry research and legal analysis, develop potential strategies for Council consideration for reflecting the cost of decarbonization without electrification (e.g. via renewable fuels like biogas and hydrogen) and the costs of electrification that does not incorporate efficient electrification practices on distribution costs (e.g. due to 400A panel upgrades for higher demand appliances than are needed to serve the electrified uses, leading to the need to build more electric distribution capacity). Examples of potential strategies for consideration include electrical capacity fees and voluntary carbon pricing reflecting the cost of decarbonizing with renewable fuels). Resource Availability: Fully staffed. Some consulting budget may be needed, to be considered via annual budget process. Target Completion Date: Q4 2026.

CA17. Reduce Permitting, Interconnection, and Other Barriers to Adoption of Vehicle and Building Electrification and Flexible Energy Technologies for Reliability and Resiliency: Reduce barriers to adoption of vehicle and building electrification technologies, flexible energy technologies for reliability and resiliency, and efficient electrification best practices. Focus on planning and zoning rules, utility rules and regulations, fees, and potential barriers that could be relieved through climate program services such as technical assistance. Look for efficient project approaches, such as bundling multiple electric readiness projects together at once and exploring different approaches to electric panel load calculations, such as by using smart meter data. Develop and implement annual list of priority areas for consideration and timeline for evaluation of potential options. Resource Availability: As staff time is available, higher level of effort possible with resources. Target Completion Date: Ongoing.

CA18. Develop Public Charging Siting and Business Models: As needed, perform siting analysis and develop business models for public charging on public and private properties to support multi-family, workplace, and visitor charging needs. Work is expected to be performed primarily using in-house staff with light consulting assistance as needed. Resource Availability: Fully staffed; some consulting budget may be needed, to be considered via annual budget process. Target Completion Date: Q1 2027.

Infrastructure
CA19. Continue Grid Modernization: Continue electric distribution system grid modernization program with the completed pilot informing program implementation, at the pace needed to provide adequate capacity for building and vehicle Item 9
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6 electrification. Resource Availability: Fully staffed; project and consulting budgets to be requested via annual budget process as needed. Target Completion Date: Ongoing.

CA20. Develop Gas Transition Management Strategies: Complete study of gas system physical and financial operation under various electrification scenarios, discuss relevant findings with policy makers, and develop and implement any policies, programs, or operational practices needed to ensure safe, financially viable, and equitable operation of the gas utility as electrification proceeds. Resource Availability:

Fully staffed; project and consulting budgets to be requested via annual budget process as needed. Target Completion Date: On-going.

Mobility
CA21. Achieve Benchmarks for Bicycle and Pedestrian Capital Improvement Projects: South Palo Alto Bikeways Demonstration Project: Upgrade crossings and bicycle facilities on East Meadow Drive and Fabian Way to improve safety, especially for students traveling to school. Information learned throughout the demonstration project will be incorporated into an update of the Palo Alto Safety Action Plan and will inform permanent design changes to the corridor. Resource Availability: Project is fully funded but requires staffing. Target Completion Date: Pilot construction anticipated for summer 2027.

Churchill Avenue Enhanced Bikeway Project: Improve walking and bicycling on Churchill Avenue with a multi-use path, intersection improvements, and landscaping.

Project work is focused between the Caltrain tracks and El Camino Real. Target Completion Date: Construction is scheduled to finish by fall 2026.

Quarry Road Extension at El Camino Park: Develop underused portion of El Camino Park to provide a direct connection from El Camino Real to the Palo Alto Transit Center. Project is led by Stanford. Target Completion Date: By fall 2027, project will complete the Caltrans process for the Encroachment Permit and prepare plans, specifications, and estimate construction documents for the project in both Caltrans and City right-of-way. In addition, the team will perform both a bike and transit operations assessment and recommend operational scenarios to inform future bikes, bus and shuttle operations in and around the Transit Center.

South Palo Alto Bike/Ped Connectivity: Identify locations and design concepts for additional east-west bicycle and pedestrian crossings of the Caltrain railroad tracks in the southern part of the City. Council selected the El Dorado Avenue option (also called Alternative A) for further planning and development work. Two variants of Alternative A were advanced: A1 (signalized crossing of Alma Street at El Dorado Avenue) and A2 (tunnel under both Alma Street and the Caltrain tracks). Additional Item 9
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7 community engagement activities are planned for early 2026 to support the decisionmaking process and incorporate public feedback on the alternatives in the vicinity of El Dorado Avenue. Target Completion Date: Study will complete following Council adoption of a final report in spring 2027, and next steps include securing grant funding for environmental documentation, final design and construction.

CA22. Implement Micromobility Feasibility Study Recommendations: Pursue next steps for a bike/e-bike/e-scooter share pilot program or other recommendation as advised by the Micromobility Feasibility Study, to be finalized in early 2026. Resource Availability:

Fully staffed and partially funded, need to evaluate based on recommendation in the study. Target Completion Date: 2027.

CA23. Continue Traffic Signal Operations and Multimodal Improvements: Maintain and modernize current traffic signals and central management systems. Use technology to improve traffic operations and safety. Work with transit providers on transit signal priority where feasible.

Projects that include operational improvements include the Quarry Road Intelligent Transportation Systems and Operations Improvement (in-progress), Citywide Central Management and ITS Updates (Ongoing), Citywide Arterial Operations Optimization (on-going pending staff resources), and Automated Traffic Signal Performance Measure (ATSPM) implementation (near future). Each of these projects includes multimodal improvements and optimization to improve operations and reduce emissions.

Resource Availability: Mostly funded, long-term funding needs being evaluated. Target Completion Date: On-going.

CA24. Continue Implementing the Housing Element / Land Use Planning and Policy:

Implement the goals, policies, and programs in the City's 2023-2031 Housing Element of the Comprehensive Plan to improve the City's jobs-housing balance and to reduce vehicle miles traveled (VMT). Implementation will continue creating a housing density and land use mix that supports transit and non-SOV (Single Occupancy Vehicle) transportation modes, such as efforts on land use and area plans, housing plans, development standards, and affordable housing projects. Resource Availability:

Funding via grants and annual City budget process. Target Completion Date: 2030.

CA25. Update City’s Traffic Calming Policy and Process: Update the City’s Traffic Calming Process to provide more clarity on traffic calming design details and criteria for consideration in relation to engineering judgment. Resource Availability: Proceed as staff time available. Target Completion Date: End of 2027.

Municipal Assets and Operations
CA26. Develop and Begin Implementing a City Facility Electrification Plan: Building on the citywide Facilities Assessment, create a multi-year plan to begin replacing fossil fuel Item 9
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8 use in City buildings in alignment with S/CAP goals, and begin implementing through the Capital Improvement Program. Target Completion Date: On-going.

CA27. Electrify City Vehicle Fleet when Feasible: Convert all Palo Alto municipal vehicles to EVs when feasible and when the replacement is operationally acceptable. Support state policy efforts to electrify fleet vehicles, including delivery trucks. Determine municipal EV charging needs to ensure adequate EV charging infrastructure for City fleet vehicles. Where possible, explore a shared use of fleet chargers that would allow for City staff to use the fleet chargers during the day. Also explore options for providing EV chargers in employee parking lots. Resource Availability: Fully staffed; EV acquisition evaluated with each scheduled vehicle replacement, additional funding needed for certain vehicle classes. Funding for charging infrastructure evaluated project by project and funded through annual budget process. Target Completion Date: On-going.

CA28. Explore the Electric Capacity Needs of the Palo Alto Airport for Electric Aviation:

Explore the electric capacity needs of the Palo Alto Airport to ensure adequate infrastructure to accommodate electric aviation, as well as electric fleet vehicles.

Resource Availability: Proceed as staff time is available. Target Completion Date: 2030.

Sustainability
Water
S1. Implement Water Efficiency and Conservation Measures: Deploy water efficiency and conservation measures that achieve water savings above and beyond what is required by state regulations. Resource Availability: Fully staffed and funded. Target Completion Date: 2030.

S2. Improve Recycled Water Quality through Salt Removal: Improve the quality of recycled water produced at the Regional Water Quality Control Plant. Resource Availability: Fully staffed and funded. Target Completion Date: 2028.

S3. Identify and Implement Water Distribution System Adaptation Measures: Identify risks from climate change to the water distribution system and implement solutions.

Resource Availability: Fully staffed; funding to implement projects not identified. Target Completion Date: 2026.

Sea Level Rise
S4. Finalize Partnership Agreement with Santa Clara County on SB272 Regional Shoreline Adaptation Plan Requirements to Develop a Regional Vulnerability Assessment and Adaptation Plan: If grant funding is received, this project is anticipated to identify and align county-wide sea level rise adaptation planning projects. Resource Availability: To be determined. Target Completion Date: 2027.

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9 S5. Update the City's Sea Level Rise Adaptation Policy to Include Sea Level Rise Planning Decision-Making Points in the City: Update the City's Sea Level Rise Adaptation Policy to include newest technical information, best practices, and decision-making points in the City where sea level rise and shallow groundwater changes should be considered for new projects and operations/maintenance. Resource Availability: Existing funding.

Target Completion Date: 2027.

S6. Complete Construction and Begin Monitoring the Palo Alto Horizontal Levee Pilot Project (PAHLPP): The PAHLPP will be the first Bay Area horizontal levee to be hydrologically connected to the Bay. The project will inform future potential levee improvements that expand habitat benefits. The City and partner agencies will advance monitoring and research following project completion, anticipated in early 2026.

Resource Availability: Existing funding. Target Completion Date: 2026.

S7. Continue Partnership with Valley Water on Sea Level Rise / Shoreline Levee Improvement Efforts: Track developments with Valley Water and Army Corps of Engineers. Resource Availability: Staffing available, future funding needed. Target Completion Date: 2027.

Wildfire Protection
S8. Implement the Foothills Fire Management Plan: Implement the Foothills Fire Management Plan to balance conservation of natural resources with reduction of fire hazards especially in open space areas. Priority implementation areas include:

Mitigating fire risk from electrical equipment through projects such as moving the overhead electric lines underground in areas generally within the City limits west of Highway 280, known as the Foothills area, and mitigating fire risk from vegetation, including through the removal of targeted Eucalyptus groves in specific project areas.

Resource Availability: General Funds, Staffing, CIP EL-21001. Target Completion Date:

On-going.

Natural Environment
S9. Increase Tree Canopy in South Palo Alto: Develop programs to plant trees in South Palo Alto to increase tree canopy – that will be integrated with traditional tree planting programs and Green Stormwater Infrastructure programs – and provide carbon sequestration, improve water quality, capture stormwater when feasible, and reduce the urban heat island effect. Resource Availability: Partially funded, Staff available as time permits. Target Completion Date: On-going.

S10. Reduce Pesticide Use in Parks and Open Space Preserves: Continue to review the use of pesticides in all parks and open space preserves to identify opportunities to further reduce and eliminate the use of pesticides. Resource Availability: Staff available as time permits. Target Completion Date: On-Going.

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10 Green Stormwater Infrastructure
S11. Construct a Green Stormwater Infrastructure Project at a City of Palo Alto Park: A green stormwater infrastructure (GSI) project proposed at Juana Briones Park will be designed and constructed. The GSI project will treat an estimated drainage area of 14.8 acres, 6.6 acres of which are impervious. Proposed design will include community features for park users during dry periods throughout the year. Resource Availability:

Funding includes U.S. EPA grant to be supplemented by Stormwater Management Fund as needed. Target Completion Date for Design: September 2027.

S12. Increase Green Stormwater Infrastructure on City of Palo Alto Property and/or Rightof-Way: Evaluate planned Capital Improvement Program projects for integration of green stormwater infrastructure to treat additional impervious surfaces. Resource Availability: Existing staff resources. Target Completion Date: Ongoing.

S13.Quantify Land Area that Uses Green Stormwater Infrastructure to Treat Urban Water Runoff: Quantify the amount of land area in the City of Palo Alto that uses green stormwater infrastructure to treat urban water runoff. This includes quantifying the amount of impervious surfaces, and will be used as a baseline for future S/CAP work.

Resource Availability: Consultant will be contracted to support City staff. Target Completion Date: December 2026.

Zero Waste
S14. Champion Waste Prevention, Reduction, Reusables, and the Sharing Economy: Create new collaborations with city departments (such as libraries) and community organizations to advance reuse and repair initiatives, including textile re-use and recycling. Resource Availability: Existing staff resources and outreach funding. Target Completion Date: 2027.

S15. Eliminate Single-Use Disposable Containers and Reduce Disposable Foodware: Assess compliance with existing foodware ordinance requirements, identify key challenges and barriers to reducing additional single-use disposables and to requiring reusable alternatives. Develop new comprehensive plan to effectively expand and strengthen the foodware ordinance. Resource Availability: Funded for Ordinance Requirement, need additional funding for implementation of future requirements. Target Completion Date:
2027.

S16. Promote Food Waste Reduction: Maintain and enhance ongoing public education and outreach initiatives aimed at promoting food waste reduction throughout the community. These efforts will also support and ensure continued compliance with the requirements of Senate Bill 1383 (2016). Messaging strategies will be aligned with sustainability goals and tailored to foster greater community engagement and behavioral change. Resource Availability: Existing staff resources and outreach funding.

Target Completion Date: On-going.

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11 Communications
C1. Build Awareness about Sustainability and Climate Action and City Programs Available to the Community. Achieve widespread awareness about sustainability and climate action, the 80 x 30 goal, City services and programs, and achievements. Collaborate with partnerships and volunteers to support grassroots outreach helping to build residents, commercial customers, and contractors awareness. Resource Availability: Fully staffed, partially funded. Target Completion Date: On-going.

C2. Drive Community Actions to Achieve S/CAP Goals: Run effective marketing and outreach campaigns that seek to increase program participation and drive community action in initiatives to achieve S/CAP goals. Resource Availability: Fully staffed, partially funded. Target Completion Date: On-going.

C3. S/CAP Data Collection and Annual Reporting: Track community sentiment and engagement, including key performance indicators, through tools such as surveys and on-line analytics, and program analysis to guide decision making. Annually develop, implement, and report out on S/CAP communications objectives and progress. Resource Availability: Fully staffed, partially funded. Target Completion Date: On-going.

Index of S/CAP Key Actions and the 2026-2027 S/CAP Work Items that Implement them S/CAP Key Action Title 2026-2027 S/CAP Work Plan Item(s) C1. Provide Building and Transportation Emissions
Consultations for Residents
(On-going item initiated in 2023-2025 S/CAP Work
Plan)
C2. Develop Major Employer Custom Emissions
Reduction Plans
CA12. Establish One or More Partnerships with
Large Commercial Facility Owners
C3. Study Additional Key Actions Needed for 80 x 30 CA11. Launch Pilot Program for Electrification of Centralized Water Heaters and Boilers
C4. Study Staffing and Budgetary Needs
CA13. Develop S/CAP Funding and Financing
Strategies for City Council Consideration
CA20. Develop Gas Transition
Management Strategies
C5. Study Funding Alternatives (Completed in 2023-2025 S/CAP Work Plan) C6. Conduct an Electrification Affordability Study (Completed in 2023-2025 S/CAP Work Plan) C7. Study Carbon Neutrality Options CA15. Develop Carbon Neutrality Strategies for City Council Consideration
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12 C8. Accelerate GHG reductions through Mandates
or Price Signals
CA8. Launch Advanced Heat Pump HVAC Program
CA10. Launch Workplace EV Charging Pilot
CA14. Develop Potential Regulatory Measures to
Drive Climate Action
CA16. Develop Potential Strategies for Cost-Based
Pricing of Non-Electric Decarbonization and
Inefficient Electrification
E1. Reduce GHG emissions in Single-Family
Appliances and Equipment
CA1. Continue Advanced Home Electrification Pilot
Program
CA2. Develop a Residential Electrification as a
Service or Similar Financing Pilot for Council
Approval
CA3. Enhanced Data Tracking for Home
Electrification
E2. Reduce GHG emissions in Non-Residential
Equipment
CA8. Launch Advanced Heat Pump HVAC Program
CA9. Develop a Commercial Electrification as a
Service or Similar Financing Pilot for Council
Approval
CA12. Establish One or More Partnerships with
Large Commercial Facility Owners
E3. Reduce Gas Use in Major Facilities
CA8. Launch Advanced Heat Pump HVAC Program
CA9. Develop a Commercial Electrification as a
Service or Similar Financing Pilot for Council
Approval
CA12. Establish One or More Partnerships with
Large Commercial Facility Owners
E4. Reduce Natural Gas Use at City facilities
CA8. Launch Advanced Heat Pump HVAC Program
CA9. Develop a Commercial Electrification as a
Service or Similar Financing Pilot for Council
Approval
CA26. Develop and Begin Implementing a City
Facility Electrification Plan
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13 E5. Support Income-Qualified Residents and
Vulnerable Businesses with Electrification
CA1. Continue Advanced Home Electrification Pilot
Program
CA2. Develop a Residential Electrification as a
Service or Similar Financing Pilot for Council
Approval
CA3. Enhanced Data Tracking for Home
Electrification
CA6. Continue Affordable Multifamily Building
Electrification Incentive Program
CA7. Launch Multi-Family Electrification Technical
Assistance
E6. Develop Electric Rate Options (Completed in 2023-2025 S/CAP Work Plan) E7. Use Codes and Ordinances to Facilitate
Electrification
CA8. Launch Advanced Heat Pump HVAC Program
CA17. Reduce Permitting, Interconnection, and
Other Barriers to Adoption of Vehicle and Building
Electrification and Flexible Energy Technologies for
Reliability and Resiliency
E8. Electric Grid Modernization Plan
CA17. Reduce Permitting, Interconnection, and
Other Barriers to Adoption of Vehicle and Building
Electrification and Flexible Energy Technologies for
Reliability and Resiliency
CA19. Continue Grid Modernization
CA28. Explore the Electric Capacity Needs of the
Palo Alto Airport for electric aviation
E9. Additional Electrification Opportunities in
Commercial and Multi-Family Buildings
CA8. Launch Advanced Heat Pump HVAC Program
CA9. Develop a Commercial Electrification as a
Service or Similar Financing Pilot for Council
Approval
EV1. Raise Awareness of Alternative Transportation
Modes, Micromobility, and EVs.

CA4. Launch Enhanced Multifamily EV Charging
Infrastructure Program
CA5. Develop a Charging-as-a-Service (CaaS) or
Similar Financing Pilot for Council Approval
CA10. Launch Workplace EV Charging Pilot
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14 EV2. Collaborate to Promote EV Adoption
Regionally
(On-going item initiated in 2023-2025 S/CAP Work
Plan)
EV3. Promote EV Adoption and Alternative
Commutes for Commuters
CA10. Launch Workplace EV Charging Pilot
CA12. Establish One or More Partnerships with
Large Commercial Facility Owners
EV4. Facilitate the Adoption of EVs, E-bikes and
other Light EVs.

CA4. Launch Enhanced Multifamily EV Charging
Infrastructure Program
EV5. Promote Alternative Transportation Modes
and Infrastructure to Support Adoption
CA4. Launch Enhanced Multifamily EV Charging
Infrastructure Program
CA6. Continue Affordable Multifamily Building
Electrification Incentive Program
CA7. Launch Multi-Family Electrification Technical
Assistance
EV6. Expand EV Charging Access for Multi-Family
Residents
CA4. Launch Enhanced Multifamily EV Charging
Infrastructure Program
CA5. Develop a Charging-as-a-Service (CaaS) or
Similar Financing Pilot for Council Approval
CA18. Develop Public Charging Siting and Business
Models
EV7. Improve EV Charging Access for IncomeQualified residents CA4. Launch Enhanced Multifamily EV Charging
Infrastructure Program
CA5. Develop a Charging-as-a-Service (CaaS) or
Similar Pilot for Council Approval
CA6. Continue Affordable Multifamily Building
Electrification Incentive Program
CA7. Launch Multi-Family Electrification Technical
Assistance
EV8. Ensure EV Charging Capacity Supports EV
Growth
CA10. Launch Workplace EV Charging Pilot
CA18. Develop Public Charging Siting and Business
Models
EV9. Electrify Municipal Vehicle Fleet CA27.Electrify City Vehicle Fleet when Feasible EV10. Support Policy to Electrify Fleet Vehicles CA27.Electrify City Vehicle Fleet when Feasible Item 9
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15 M1. Increase Active Transportation and Transit for
Local Work Trips
CA21. Achieve Benchmarks for Bicycle and
Pedestrian Capital Improvement Projects
CA22. Implement Micromobility Feasibility Study
Recommendations
CA25. Update City’s Traffic Calming Policy and
Process
M2. Expand Availability of Transit and Shared
Mobility Services
CA21. Achieve Benchmarks for Bicycle and
Pedestrian Capital Improvement Projects
CA22. Implement Micromobility Feasibility Study
Recommendations
CA25. Update City’s Traffic Calming Policy and
Process
M3. Implement the Bicycle and Pedestrian
Transportation Plan
CA21. Achieve Benchmarks for Bicycle and
Pedestrian Capital Improvement Projects
M4. Improve Transportation Demand Management
for Employees and Residents
M5. Implement Smart Parking Infrastructure in
Public Garages and Parking Fees in Business
Districts
M6. Study Land Use and Transportation
M7. Continue to Implement the City’s Housing
Element
CA24. Continue Implementing the Housing Element
/ Land Use Planning and Policy
M8. Improve Transit and Traffic Flow CA23. Continue Traffic Signal Operations and Multimodal Improvements
M9. Create Housing Density and Land Use Mix that
Supports Transit and Non-SOV Transportation
CA24. Housing Element Implementation / Land Use
Planning and Policy
M10. Encourage Reductions in GHGs and VMT
W1. Maximize Water Conservation and Efficiency S3. Identify and Implement Water Distribution System Adaptation Measures
W2. Build a Salt Removal Facility S2. Improve Recycled Water Quality through Salt Removal
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SCAP Work Plan
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16 W3. Implement One Water Portfolio Projects S1. Implement Water Efficiency and Conservation Measures
W4. Develop a Dynamic Water Planning Tool (Completed in 2023-2025 S/CAP Work Plan) S1. Complete a Sea Level Rise Vulnerability
Assessment
(Completed in 2023-2025 S/CAP Work Plan)
S2. Implement a Sea Level Rise Adaptation Plan
S4. Finalize Partnership Agreement with Santa Clara
County on SB272 Regional Shoreline Adaptation
Plan Requirements to Develop a Regional
Vulnerability Assessment and Adaptation Plan.

S5. Update the City's Sea Level Rise Adaptation
Policy to Include Sea level Rise Planning Decision
Making points in the City.

S3. Begin Design Process for a Levee Project
S6. Complete Construction and Begin Monitoring
the Palo Alto Horizontal Levee Pilot Project
(PAHLPP).

S7. Continue Partnership with Valley Water on SLR /
Shoreline Levee Improvement Efforts
S4. Complete Bridge improvements and Identify
Protection Strategies from Flood Events
S7. Continue Partnership with Valley Water on SLR /
Shoreline Levee Improvement Efforts
S5. Implement the Foothills Fire Management Plan S8. Implement the Foothills Fire Management Plan S6. Minimize Fire Hazards Through Zoning (On-going item initiated in 2023-2025 S/CAP Work Plan)
S7. Collaborate on Reducing Wildfire Hazards S8. Implement the Foothills Fire Management Plan S8. Implement CAL FIRE Public Education Programs (On-going item initiated in 2023-2025 S/CAP Work Plan)
N1. Increase Palo Alto's Tree Canopy S9. Increase Tree Canopy in South Palo Alto N2. Ensure No Net Tree Canopy Loss for all Projects (On-going item initiated in 2023-2025 S/CAP Work Plan)
N3. Reduce Pesticide Use in Parks and Open Space
Preserves
S10. Reduce Pesticide Use in Parks and Open Space
Preserves
N4. Enhance Pollinator Habitat
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17 N5. Establish a Carbon Storage of Tree Canopy
Baseline and KPI
S9. Increase Tree Canopy in South Palo Alto
N6. Maximize Biodiversity and Soil Health
N7. Coordinate Implementation of City Natural
Environment-Related Plans
(On-going item initiated in 2023-2025 S/CAP Work
Plan)
N8. Expand Water Efficient Landscape Ordinance
(WELO) Requirements
N9. Phase out Gas-Powered Lawn and Garden
Equipment
(Addressed by CA Assembly Bill 1346 banning the
sale of new gas-powered small off-road engines)
N10. Support the Green Stormwater Infrastructure
Plan
S11. Construct a Green Stormwater Infrastructure
Project at a City of Palo Alto Park
S13. Quantify Land Area that Uses Green
Stormwater Infrastructure to Treat Urban Water
Runoff
N11. Incorporate Green Stormwater Infrastructure
in Municipal Projects
S12. Increase Green Stormwater Infrastructure on
City of Palo Alto Property and/or Right-of-Way
ZW1 Encourage Food Waste Prevention and
Require Food Recovery from Commercial Food
Generators
(On-going item initiated in 2023-2025 S/CAP Work
Plan)
ZW2. Promote Residential Food Waste Reduction S16. Promote Food Waste Reduction ZW3. Champion Waste Prevention, Reduction,
Reusables, and the Sharing Economy
S14. Champion Waste Prevention, Reduction,
Reusables, and the Sharing Economy
ZW4. Provide Waste Prevention Technical
Assistance to the Commercial Sector
(On-going item initiated in 2023-2025 S/CAP Work
Plan)
ZW5. Prioritize Domestic Processing of Recyclable
Materials
(Completed in 2023-2025 S/CAP Work Plan with ongoing review) ZW6. Eliminate Single-Use Disposable Plastics S15. Eliminate Single-Use Disposable Containers and Reduce Disposable Foodware
ZW7. Expand the Deconstruction and Construction
Materials Management Ordinance
(On-going item initiated in 2023-2025 S/CAP Work
Plan)
ZW8. Implement Reach Code standard for Low
Carbon Construction Materials
(Completed in 2023-2025 S/CAP Work Plan)
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SCAP Work Plan
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Attachments H through M for Staff Report 2512-5688 are available at the below links:
• Attachment H: S/CAP Funding and Financing Study
http://paloalto.gov/files/assets/public/v/1/city-clerk/staff-report-links/12.13.25- casc/attachment-h-scap-funding-and-financing-study.pdf
• Attachment I: EV Charger Needs Assessment
https://www.paloalto.gov/files/assets/public/v/1/city-clerk/staff-report-links/12.13.25- casc/attachment-b-ev-charger-needs-assessment.pdf
• Attachment J: Single-family Building Sector Study
http://paloalto.gov/files/assets/public/v/1/city-clerk/staff-report-links/12.13.25- casc/attachment-j-single-family-building-sector-study.pdf • Attachment K: Multi-family Building Sector Study
https://www.paloalto.gov/files/assets/public/v/1/city-clerk/staff-report-links/12.13.25- casc/attachment-d-multi-family-building-sector-study.pdf • Attachment L: Non-Residential Building Sector Study
https://www.paloalto.gov/files/assets/public/v/1/city-clerk/staff-report-links/12.13.25- casc/attachment-e-non-residential-building-sector-study.pdf • Attachment M: Funding Source Survey
https://www.paloalto.gov/files/assets/public/v/1/city-clerk/staff-report-links/12.13.25- casc/attachment-f-funding-source-survey.pdf
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S/CAP Priorities Workshop Summary
Overview
On December 13, 2025, Palo Alto hosted a Climate Action Priorities public workshop aimed at identifying the types of mechanisms that Council and the public is interested in using to advance the Sustainability and Climate Action Plan ( S/CAP) 80x30 goals related to climate action for the residential sector. This workshop was also held as part of a special public meeting of the Climate Action and Sustainability Committee (Committee). The three council members of the Committee (Vicki Veenker, Patrick Burt, and George Lu) and Commissioner Rachel Croft from the Utilities Advisory Commission attended the meeting, with an additional 20 members of the public in attendance. The public workshop was also designed to promote greater understanding of tradeoffs in financing and regulations to achieve the City’s 80x30 goals.

The workshop focused on an interactive tabletop game named “Decarb Quest.” This game asked participants to pick at random cards representing different resident types and characteristics, home types, and home triggers. From there, participants must decide the strategy or combination of strategies that would best promote electrification in each scenario.

Participants could also design additional strategy cards for scenarios in which they felt the suite of potential strategies was not sufficient.

The workshop followed the following agenda:
• Introductions
• Climate Action Priorities Presentation
• Breakout Group Discussion
o Benefits and challenges of mandates and incentives
• Evaluating Decarbonization Programs Presentation
• Breakout Group Discussion
o Decarb Quest game on potential tools and approaches for electrification • Public Comment
• Closing Comments
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Wall Graphic Recording
Below is the wall graphic recording from the workshop that captured high-level takeaways from breakout group conversations.

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Mandates and Incentives Presentation and Discussion
Ahead of the first breakout group discussion on mandates and incentives, Jonathan Abendschein, Assistant Director of Climate Action, delivered a presentation on the S/CAP Electrification Funding Study, discussing the quantification of total benefits to the Palo Alto community over time from switching from gas to electric appliances and some initial considerations for utilizing incentives and mandates to accomplish electrification. Jonathan then took questions and comments from the Council Members present (full list of comments is listed under the detailed notes). Participants were then asked to discuss the benefits and drawbacks of utilizing incentives vs. mandates to accomplish 80% reduction in GHG emissions by 2030.

Summary of Participant Comments
Below are the takeaways from the breakout groups discussion:
• There is a place for both mandates and incentives to reach 80x30 goals • Storytelling and effective communication is essential to support mandates and incentives
o Mandates need to be paired with communication training; if people believe that their contributions are important, more people are likely to follow suit o Voluntary incentives give people agency and encourage personal storytelling • It is important to quantify health savings as part of the discussion about avoided costs from electrification
• City should utilize mandates and include incentives as a stop gap measure o City can set health and safety standards/ mandates that must be met, and then use incentives to get people to reach those standards
• Incentives should focus on less affluent residents with higher need o City must do incentives
o Some groups stated that incentives should be income qualified • Programs that support incentives and mandates should be designed to reduce friction as much as possible for residents
• Workforce needs to be involved in leading electrification efforts Item 9
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Detailed Comments
Below are additional notes from Council Members about the Decarbonization Strategies Presentation.

Council Member Pat Burt
• Emphasize health and safety benefits of electric appliances o Appealing to community for support for programs based on climate impacts will capture chunk of community; more people spurred to action by health benefits o Should quantify economics of health benefits in study and feature these benefits to community
o Safety should be a priority element
• EV trips likely account for greater share of trips than reflected in the EV ownership rate (of 16%)
o Around 50% of purchases are EVs
o Most people who purchase EVs use them more than their older car o Trends in equipment cost moving forward may decline
o Wondered to what degree we are basing funding projections on current costs of electric appliances
Council Member George Lu
• Can the funding study take into account a decrease in EV charging installation costs/ HPWH costs over time?
o Is there a scenario where we can count on some national technology curve • How are offsets assessed to users?
o Offsets could be used more creatively as stick or carrot Vice Mayor Vicki Veenker
• Consider savings from gas transition study from Air District • Implementation of Air District rules could save 89 deaths annually and $890 mil per year Item 9
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Electrification Strategies, Discussion, Decarb Quest Game Before the second breakout group, which focused on electrification strategies, Jonathan delivered a presentation on considerations for electrification strategies, including financing options for incentives. This included considerations for how a Building Emissions Savings Ordinance (BESO) could operate, and an overview of financing cash flows for Electrification as a Service (EaaS) for Palo Alto residents. Jonathan then took questions from the Council Members present (full list of comments is listed under the detailed notes).

Participants then rearranged into different breakout groups and completed an interactive tabletop game, “Decarb Quest.” This game asks participants to pick at random cards representing different resident types and characteristics, home types, and triggers for electrification upgrades. From there, participants must decide the strategy or combination of strategies that would best promote electrification in each scenario. Participants fill out the game board, picking at random from the deck two resident characteristics, a home type card, and a trigger for what may be happening to that home type (e.g. selling house, wanted to remodel, etc.). Participants then score how well that suite of strategies will encourage the resident with that home type to electrify, using game pieces to score on a scale of 1-4. Strategies that score a 1 would mean that residents would not electrify, and 4 means they would certainly electrify.

Participants could also design additional strategy cards for scenarios in which they felt the suite of potential strategies was not sufficient.

Below are images of the blank board and cards that participants were given. The images of the filled out boards from the game are included below at the end of this summary.

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Decarb Quest Game Board
Decarb Quest resident characteristic, housing characteristic and housing trigger cards Item 9
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Summary of Participant Comments
Below are the takeaways from the breakout groups discussion:
• Overall, the BESO and EaaS were popular strategies
o BESO and EaaS work well for more affluent, singly family (SF) households, especially those doing remodels or large projects
o May need to increase cost for BESO-funded upgrades for buyers o Traditional financing and EaaS may work for those with affordability issue o City could host investment fund to help support EaaS program • Communication and storytelling must be part of BESO and EaaS programs o Emphasize that natural gas prices will rise and the City needs to protect residents’ health; by electrifying, the City will end up with lower, cheaper utility bills and improve residents’ health
o Emphasize that electrification increases home value
o Publicize existing programs more!
• The renter segment is difficult to reach
o Mandates would work better for renters; renters need to be empowered to reach landlords
o There are some other residents and scenarios that are difficult to electrify (e.g. a young, financially constrained family who is selling their house; landlord with renters who are high energy users and have a broken appliance) • Multifamily (MF) homes typically have access to a traditional financing qualification • In some scenarios it may make more sense for buyers to complete/ pay for energy assessment as part of BESO; buyer would then be required to upgrade to code when doing a construction project
• Require those selling their home to future proof it to become all-electric • Implement the Watt Diet (strategic selection of electric products and load sharing among devices) to reduce the need for panel upgrades
o City could price amp services differently, with higher watt panels costing more • Technical assistance is a throughline for many electrification strategies • Homeowners associations (HOAs) are a different scenario than rental apartments because there are so many hoops to jump through
o Incentives would not be the driver of upgrades
o EaaS may be a partial solution but there may still be a gap for HOAs • City could pool electrification projects for more income-constrained residents • Should be easier for residents to use electric vehicles (EVs), especially for MF properties o They can be a battery for homes and support resilience o Time of use (TOU) rates could be mandated; they would support EV usage and make EVs more affordable
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Additional Strategies
Below is the full list additional strategies that participants brainstormed during the Decarb Quest game:
• BESO without public reporting
• For BESO, the seller can do the energy assessment but the buyer is required to upgrade (as opposed to the seller)
• Progressive loans (particularly for financially constrained households) • Building owner makes bulk electric appliance purchase at reduced upfront cost (for MF renters)
• Building performance standard– each home has an environmental rating o May not be public for homeowners
o Building performance standards (BPS) may work well for larger, MF properties, and would give these properties a timeline to electrify • Pool electric project scopes for multiple homes
• City fund for electrification as service to reduce costs to residents o Some funds would be invested and get returns, some given to EaaS o This would help subsidize financially constrained residents • EV charging in City lots adjacent to MF properties
• Streetside charging
• Portable induction cooktops
• Use City investment funds so City can be full financer of EaaS (City already covers loans under GoGreen)
• Education and communication around electrification benefits must underpin all strategies o Lawn signs can promote emergency heat pump water heater (HPWH) replacements and GoGreen financing
Detailed Climate Action and Sustainability Committee Feedback Below are additional notes from Council Members about the Decarbonization Strategies Presentation.

Vice Mayor Vicki Veenker
• Very interested in what has traction with residents
• Strategies aren’t necessarily alternatives, but can be combined– what is interplay between the strategies?
• Interested in understanding BESO ordinance
• Sees potential for Electrification as a Service
Council Member Pat Burt
• Under EaaS we have lender involvement; to what extent would that be friction point? How simple could that become?
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o Palo Alto has simplified permitting for solar
o Jonathan: there is discussion regionally on lender friction • Where does funding come from for existing electrification and energy efficiency (EE) efforts and what legal latitude can apply?
o Jonathan: electric public benefits funding is collected for EE, income qualified programs, renewable energy, and research and development. City has used funds for some electrification programs and is in conversation on how to use this in defensible way and what the competing priorities are Council Member George Lu
• Interested in both BESO and EaaS, lots of questions for both • Interested in how we can reach MF apartments through sales of buildings and individual condos
• EaaS is more uncertain and has more moving parts; there are lots of questions to consider
o What lenders exist out there?
o How much risk is City taking on?
o What happens if homeowners want to get expensive appliances? What happens if homeowners get into financial trouble?
o Make process as simple as possible
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Game Board Result Images
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City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Public Works
Meeting Date: March 2, 2026
Report #:2508-5090
TITLE
Status Update on Implementation of the Reliability and Resiliency Strategic Plan; Accept 1) Palo Alto’s Electric System Reliability Indices and Recommended Goals and Reporting, 2) the “Evaluation of Local Energy Resources to Lower Costs and Improve Reliability and Resiliency” Report (as recommended by Climate Action and Sustainability Committee and Utilities Advisory Commission) to Complete Reliability and Resiliency Strategic Plan Strategy Four and Strategy Five; and Provide Direction to Pursue Various Activities Related to Flexible Energy Resource and Efficient Electrification to Improve Reliability and Resiliency; CEQA Status - Not a Project

RECOMMENDATION
Staff recommends that the City Council:

1. Accept Palo Alto’s electric system reliability indices and recommended goals and reporting.

The Climate Action and Sustainability Committee (CASC) and the Utilities Advisory Committee (UAC) recommend that the City Council:

2. Accept the “Evaluation of Local Energy Resources to Lower Costs and Improve Reliability and Resiliency” report to complete Reliability and Resiliency Strategic Plan Strategies Four (Value the benefits of flexible technologies to the utility and community) and Five (Evaluate the resource needs for various demand reduction and resiliency programs).

3. Direct staff to:
a. Promote City of Palo Alto Utilities (CPAU) customer’s use of energy in off-peak periods to reduce both greenhouse gas emissions and strain on the electric grid, and lower energy costs;
b. As opportunities present themselves, and to the extent staff time is available, evaluate large scale solar and battery opportunities in Palo Alto, either at publicly owned facilities or through partnerships with private land owners; and Item 10
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c. Engage the Utilities Advisory Commission, Climate Action and Sustainability Committee, and Council in an additional discussion on microgrids and long-term resiliency in 2026.

The UAC and CASC differed on the level of effort that should be expended on the promotion and reduction of barriers to adoption. The CASC recommended a higher level of effort, with recurring and widespread outreach, more educational materials, online decision tools, and other resources, active auditing of regulations and processes for streamlining opportunities, and more active integration of these technologies into energy and climate programs. The UAC recommended that no additional resources should be added for work and work should proceed as staff time is available. The recommendations are below:

The Climate Action and Sustainability Committee (CASC) recommends that the City Council:

3. Direct staff to:
d. Promote and reduce barriers to adoption, as appropriate, for demand response capable technologies, solar photovoltaics (PV), battery energy storage system (BESS), thermal storage, and vehicle to load, home, and grid technologies, including, but not limited to:
i. Recurring and widespread outreach;
ii. Developing educational materials, online decision tools, and other resources to help community members evaluate these technologies for themselves;
iii. Actively auditing regulations and processes for streamlining opportunities; and
iv. Actively and continuously integrating flexible energy technologies and efficient electrification into energy programs;
e. Within two years, update cost-benefit analysis for demand response, solar PV, batteries, thermal storage, and vehicle to load, home, and grid technologies; Note: Accommodating this higher level of effort without impacting other climate programs or utility operations would require additional staff resources. If the City Council adopts the CASC recommendation staff would identify the resource needs and funding sources and return with a proposal through the FY 2027 budget process.

The Utilities Advisory Committee (UAC) recommends that the City Council:

3. Direct staff to:
d. Promote and reduce barriers to adoption, as appropriate, for demand response capable technologies, solar photovoltaics (PV), battery energy storage system (BESS), thermal storage, and vehicle to load, home, and grid technologies, including, but not limited to:
i. Regular outreach as opportunities present themselves; Item 10
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ii. Posting available educational material on the City’s website; iii. Facilitating regulatory and process changes as staff becomes aware of them and as staff time is available; and
iv. Integrating flexible energy technologies and efficient electrification into energy programs as staff time is available;
e. Within two years, update cost-benefit analysis for demand response, solar PV, batteries, thermal storage, and vehicle to load, home, and grid technologies, with an annual update focused only on electric supply costs; The UAC also recommended that a simplified update of the cost-benefit analysis be done within one year, just updating utility supply cost projections. Staff agreed that this was a simple update and will incorporate the simple update into its work plan.

EXECUTIVE SUMMARY
As an electric utility service provider, reliability and resiliency of that service is key to maintain high service levels and continue to advance climate adaptation and sustainability goals that increasing rely on electric infrastructure and services. This report provides a comprehensive update on RRSP and if approved results in acceptance of key performance indicators for electric services, completion of RRSP strategies four and five, and direction to staff to further Flexible Energy Resource and Efficient Electrification to Improve Reliability and Resiliency.

RRSP Strategy 1, Action 6 (Reliability Standards) Key Performance Indicators: for service today and into the future KPIs are critical to measure system reliability and set targets to instill confidence as customers increasingly rely on electric services. The System Average Interruption Duration Index (SAIDI), System Average Interruption Frequency Index (SAIFI), and Customer Average Interruption Duration Index (CAIDI) are standard indices used across the utility sector.

They provide a good measure of system performance and the ability to compare performance between various utility systems. Palo Alto’s electric system reliability shows improvement over time and compares favorably to other utilities within the region and nationally. These metrics are reported quarterly to the Utilities Advisory Commission (UAC); staff recommends continuing this practice going forward and to forward this reporting to the City Council with the addition of at least annual comparisons of Palo Alto’s performance to adjacent systems (PG&E) and nationally to the City Council as an information item. This additional reporting will ensure heightened awareness of these metrics as the City continues to work to achieve its reliability and electrification goals.

Acceptance of RRSP Strategies 4 and 5: With respect to assessments of flexible energy technologies and efficient electrification, staff, the UAC, and the CASC recommend acceptance of a consultant report implementing Strategies 4 and 5 of the RRSP, along with direction to staff based on the study results. The technologies and strategies discussed in the attached report (Attachment B) benefit the electric grid and the community when voluntarily installed and properly operated. Strategies 4 and 5 ask whether the City should be going further and Item 10
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providing incentives or more intensive programs to actively drive greater participation, which would require additional funding and resources. While the attached report is not a cost of service analysis that will be used to determine utility rates, it does evaluate potential utilityprovided incentives, and finds no cost/benefit ratio that supports providing City or ratepayerfunded incentives or more intensive programs.

Direction to Further Flexible Energy Resource and Efficient Electrification The UAC, CASC, and staff recommend continuing to do outreach and reducing barriers to adoption, as described in this report, while also monitoring and analyzing the cost-effectiveness of these technologies periodically, evaluating larger commercial projects as opportunities arise, and pursuing further discussion of the policy options for long-term resiliency and microgrids described in the attached report. Strategy 3 of the Reliability and Resiliency Strategic Plan (RRSP), which is already being implemented, focuses on promoting these technologies and strategies, helping people learn to operate them well, and reducing barriers to adoption. These activities can be performed with existing staff.

This staff report and the attached consultant report complete Strategies 4 and 5 of the RRSP.

BACKGROUND
The RRSP1 resulted from discussions with the UAC and the Council’s Sustainability and Climate Action (S/CAP) Committee and its Working Group leading up to and following the June 5, 2023, adoption of the S/CAP and the 2023-2025 S/CAP Work Plan2. Included in the S/CAP Work Plan were work items 1.B and 1.C to create and implement the Electric RRSP. At its December 6, 2023, meeting the UAC discussed the elements and scope of the RRSP and recommended Council approval3. The City Council approved the Reliability and Resiliency Strategic Plan (RRSP) on April 15, 20244. The RRSP includes a variety of strategies and actions to improve reliability and resiliency citywide. The status of these strategies and actions is summarized in Attachment A and this staff report.
1 Reliability and Resiliency Strategic Plan, Approved by the City Council April 14, 2024: https://cityofpaloalto.prime gov.com/api/compilemeetingattachmenthistory/historyattachment/?historyId=f90b4733-eb24- 4699b4f1229af03f8fd5
2 Adopted 2023-2025 S/CAP Work Plan: https://www.cityofpaloalto.org/files/assets/public/v/1/sustainability/repo rts/2023-2025-scap-work-plan_final.pdf
3 UAC, Staff report 2311-2263, December 6, 2023, S/CAP Strategic Plan on the Reliability and Resiliency for the Elec tric Distribution Utility. https://www.cityofpaloalto.org/files/assets/public/v/3/agendas-minutesreports/agendasminutes/utilities-advisory-commission/archived-agenda-and-minutes/agendas-and-minutes-/12-dec-2023/12-06- 2023-packet-v2.pdf
4 City Council, Staff Report 2401-2496, April 15, 2024, Approve the Reliability and Resiliency Strategic Plan as Reco mmended by the Utilities Advisory Commission, https://cityofpaloalto.primegov.com/meetings/ItemWithTemplate Type?id=4485&meetingTemplateType=2&compiledMeetingDocumentId=9592 Item 10
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One of those actions is Strategy 1, Action 6, to develop reliability metrics. A report on Council’s June 16, 2025 consent calendar9 recommended acceptance of reliability metrics and goals, but was pulled from the consent calendar and is being presented for discussion tonight.

On a quarterly basis, staff presents outage indices to the Utility Advisory Commission (UAC). As an industry standard, power outages and overall system reliability are tracked through standardized indices that measure average system performance over a defined period, typically 12 months. Three indices are used to track the average duration of outages (SAIDI), average frequency of outages (SAIFI), and the average restoration times for customers experiencing outages (CAIDI). Presentation of this data provides the UAC and City Council with an ongoing indication of system performance and the impact of newly implemented operating procedures, replacement of legacy equipment, and the implementation of modern utility equipment.

The City Council has established these three electric reliability metrics as Key Performance Indicators (KPI) and tasked City staff with recommending goals for reliability metrics and standardized reporting methodology. This staff report presents updated reliability metrics for Palo Alto based upon outage data through the end of calendar year 2025, recommendations for a reporting methodology, and annual reliability goals.

Below is a brief overview of these metrics.
• SAIDI (System Average Interruption Duration Index): This measures the average duration of a power outage for the average customer within a given period (usually a year). A lower SAIDI means customers experience less time without power, indicating better overall reliability.
• SAIFI (System Average Interruption Frequency Index): This measures how often the average customer should expect to experience a power outage over a given period (typically 12 months). A lower SAIFI means customers experience fewer power outages, indicating better service reliability.
• CAIDI (Customer Average Interruption Duration Index): This measures the average time in minutes it takes to restore service to customers who have experienced an outage. A lower CAIDI generally means utilities are able to restore power more quickly when outages do occur, reflecting efficient outage response and quick restoration times.

In essence, these metrics are used by utilities to assess and improve the reliability of their electrical distribution systems. Lower values across all three indicate a more reliable and efficient power supply for customers.
9 City Council, Staff Report 2506-4769, June 16, 2025, Item 11, Accept Electric System Reliability Key Performance I ndices, https://portal.laserfiche.com/Portal/DocView.aspx?id=187543&page=3&repo=r-704298fc&searchid=82efb d8eb3b3-4fc2-8b0f-0e53df677bdf
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Progress on Strategies 4 and 5 of the RRSP is also highlighted in this report; this involved performing a cost/benefit analysis of the contribution flexible energy technologies and efficient electrification strategies could have to reducing electric utility supply costs, deferring electric distribution system investment, and enhancing short-term and long-term reliability and resiliency in the community. This work item responds to early feedback from the City Council’s Ad Hoc Committee and its Working Group on exploring this topic as part of the S/CAP, and strategies to pursue this analysis were added to the RRSP when it was adopted in April 2024.

The UAC and CASC have been involved regularly in the development and completion of these studies as discussed in the Stakeholder Engagement section below.

ANALYSIS
The City is making progress on a variety of aspects of the RRSP, as described in Attachment A.

Some highlights include:
• The first pilot neighborhoods to be upgraded under the Electric Grid Modernization Project have been completed, and the results are being assessed to inform the next phases of the project.
• The City’s Electric Utility has received approval from the California Independent System Operator (CAISO) for a second transmission line into Palo Alto to reduce the chance of an outage due to damage to the current single transmission pathway serving Palo Alto (such as occurred in 2009 from an airplane accident).
• The new outage management system allows CPAU to more quickly detect and respond to power outages and provide customers with timely notifications and updates. • Undergrounding in the Foothills to reduce the chance of wildfire-related outages is nearly complete, with a goal of completion by the June of 2026. • Barriers continue to be reduced for the adoption of solar, battery storage, and efficient electrification. Examples include the incorporation of circuit sharing technologies into building permit load calculation worksheets, and programs the City has put in place to help people avoid panel upgrades when electrifying.

Some specific strategies and actions are highlighted for discussion, including Strategy 1, Action 6 (Reliability Standards) and Strategy 4 (Value the benefits of flexible technologies to the utility and community) and Strategy 5 (Evaluate the resource needs for various demand reduction and resiliency programs).

Strategy 1, Action 6 (Reliability Standards)
Palo Alto’s CY2025 system reliability numbers, or KPIs, are improved from CY2023 and CY2024.

Some of the improvements can be attributed to changes in system restoration procedures while some improvements are due to milder winter weather. Impacts of weather and large system outages are seen when comparing the SAIDI, SAIFI, and CAIDI numbers on the left side Item 10
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of the chart below (Major Event Days Included) against the right side (Major Event Days Excluded).

Major Event Days Included Major Event Days Excluded

CY SAIDI SAIFI CAIDI SAIDI SAIFI CAIDI
2019 132.8 1.065 124.7 25.3 0.225 112.0
2020 46.2 0.830 55.7 20.9 0.165 126.7
2021 39.7 0.277 143.1 9.4 0.029 329.3
2022 71.7 0.622 115.3 13.4 0.070 190.5
2023 154.1 1.182 130.4 43.5 0.176 247.0
2024 134.7 0.844 159.7 67.4 0.474 142.1
2025 68.1 0.614 110.9 27.2 0.111 245.2
Two sets of numbers are presented for the current and past calendar years. One set represents all primary level outages (excludes single customer outages), and a second set of data removes Major Event Days (MED) from the first data set to remove the influence of significant weather events or other large outages that do not represent normal day-to-day operations. By identifying and removing MEDs from outage indices, year over year trends can be established to better indicate if system performance is improving or declining. For the data presented, MED are defined as 24-hour periods with more than 10 percent of Palo Alto’s electric customers impacted by power outages.

Tracking the City’s year-to-year reliability indices is a good measure of internal progress toward improved reliability but does not provide an indicator of industry-wide (national) or regional system reliability. The charts further below present PG&E’s outages indices for the DeAnza Division, Santa Clara, Alameda, and American Public Power Association’s (APPA) tracking of nationwide system reliability. PG&E’s DeAnza Division, which covers the cities and surrounding areas of Cupertino, Los Altos, Los Gatos, and Mountain View, represents our local region’s electric system reliability and the impacts of local weather events. APPA’s collection of nationwide system reliability is narrowed to show the cutoff for the best performing systems (top 25 percent) in the United States. Combined, these comparisons provide additional relevance to Palo Alto’s efforts to provide safe and highly reliable electric service.

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In comparison of both regional and national outage reliability indices, staff is recommending Palo Alto set a goal of remaining within the five-year average of APPA’s top quartile for SAIDI and SAIFI when excluding MED. Staff is further recommending that Palo Alto, at all times, outperform PG&E’s system reliability numbers for the DeAnza Division. Setting these targets will allow comparisons on a national level regardless of weather events and on a local level with and without the impacts of localized weather events.

Future quarterly and annual presentations of outages indices will include these comparisons to aid the UAC, City Council, and utility staff in identifying trends in system reliability.

Strategy 4 (Value the benefits of flexible technologies to the utility and community) and Strategy 5 (Evaluate the resource needs for various demand reduction and resiliency programs) The attached consultant report titled “Evaluation of Local Energy Resources to Lower Costs and Improve Reliability and Resiliency” contains the results of several analyses to evaluate the electric utility supply cost savings, short-term reliability benefits, and potential for deferral of distribution investment. The analyses found that benefits exceeded costs at a community level (the combination of costs and benefits for both the utility and its customers, analogous to the “Total Resource Cost Test” commonly used in analysis of energy efficiency and other demandside management programs)11 only for commercial solar plus batteries, and that benefits would no longer exceed costs for that category of projects once the Federal Investment Tax Credit (ITC) expires. They found that using batteries to defer distribution investment was not costeffective at a community level. They found that commercial solar and batteries could become cost-effective (at a community level) by 2030, but that residential-scale projects were not projected to become cost-effective (at a community level) until 2040. However, both residential-scale and commercial-scale solar and battery projects could be viable for the building owner if the building owner valued long-term resiliency higher than the cost of mitigating an outage (as described in the report, Attachment A, Section 7.3, page 43). The report lays out a framework for considering how to approach the value of long-term resiliency and potential policies the community could adopt.

Based on the report, staff developed several follow-up recommendations for implementation, organized under five categories:
1) time of use promotion
2) technology promotion and barrier reduction
11 A good definition of the Total Resource Cost Test is included on page 18 of the California Public Utilities Commission “California Standard Practice Manual for Economic Analysis of Demand-Side Programs and Projects,” October 2001, which is still used for investor-owned utilities. Publicly-owned utilities use similar analytical methods for their energy efficiency and demand-side cost-effectiveness analyses. https://www.cpuc.ca.gov/- /media/cpuc-website/files/uploadedfiles/cpuc_public_website/content/utilities_and_industries/energy_- _electricity_and_natural_gas/cpuc-standard-practice-manual.pdf Item 10
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3) cost-benefit monitoring and projection
4) case by case commercial scale project evaluations
5) policy review of microgrids and long-term resiliency These are summarized below:

1. Time of Use Promotion
As the City’s Advanced Metering Infrastructure (AMI) project is completed, the City’s Utilities Department will provide customers a time of use billing option that can shift energy use to offpeak periods that reduces emissions and passes through lower energy import costs to the customer. Outreach will include mailers, utility bill inserts, and information on the City’s website.

2. Technology Promotion and Barrier Reduction
Staff currently encourages adoption of demand response, solar PV, BESS, thermal storage, and vehicle to load, home, and grid technologies as staff becomes aware of them, such as recent changes to Fire Department regulations recognizing the lower fire risk of lithium-ferrousphosphate battery technologies or the City’s adoption of SolarApp+ for solar permitting.

Information on these technologies is also available on the City’s website. Staff currently has a Guide to Electrification posted on the City website detailing approaches to efficient electrification. Staff integrates these technologies into programs, such as including a rebate in the City’s Advanced Single Family Electrification Pilot Program that can be applied to circuit sharing technologies, or the inclusion of managed charging technologies in the design guidelines for the next generation multi-family electric vehicle charging program.

The CASC recommended a higher level of effort than what is currently being done, which staff noted would require bringing on hourly assistance for a few years to make a focused effort to actively review and identify streamlining opportunities in City regulations and processes to make it easier to install these technologies (including outreach to contractors), to track the state of the technologies, and to develop material for an outreach campaign focused specifically on these technologies. Any staff augmentation and funding requirements would be incorporated into the City’s budget approval process if the City Council adopted the CASC recommendation.

The UAC recommended against devoting additional resources. If the City Council adopted this recommendation, the current level of effort would continue, seeking opportunities to increase efficiencies to scale programs, and promote and incorporate these technologies as staff time and opportunities present themselves. Staff would also investigate low-cost technical assistance for these technologies when developing programs. No additional resources would be requested.

3. Monitoring Cost-Benefit of Various Technologies
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With the creation of the cost-benefit model used to generate this report, staff now has a manageable way to regularly update the analysis results. Staff would update the model periodically as opportunities presented themselves, such as when a summer intern was available or when workload permitted full-time staff to update the model, but not less than every two years. This may require consulting expenditures, but these could be absorbed within the existing budget. Staff will also do a minor update annually, updating only the electric utility supply costs.

4. Commercial Facility Partnerships – Case by Case Evaluation As opportunities arise, staff evaluates solar and batteries on City-owned sites and partners with commercial property owners who approach the City. Examples include evaluations currently being done for the Cubberley Community Center project and the VMware community microgrid partnership (now defunct) that was established several years ago. Staff will also continue to explore backup power needs at the Regional Water Quality Control Plant (RWQCP) and airport to determine the most economically feasible backup power alternatives to determine whether an electric utility / treatment plant partnership for a solar and storage microgrid at the airport can be made economically feasible, which, per the City’s consultant, would require substantial funding from the RWQCP related to reliability services, since the cost of the power was significantly higher than the City’s avoided cost of power without that additional funding, and would raise electric supply costs if implemented without it. The number of project evaluations completed would depend on staff capacity and available funding for consultants.

5. Microgrids and Long-term Resiliency
The recommendation from the UAC and CASC was to maintain the City’s current policies on microgrids and backup power at this time, but to pursue further discussions on long-term resiliency in 2026. Currently, the City passes on the utility supply cost savings of solar and batteries through its net energy metering and feed-in tariff programs but does not provide additional incentives for solar and batteries. The report describes alternative policies that could be pursued, such as providing incentives for solar and battery microgrids at private facilities that would be valuable to the community in a major emergency (like grocery stores) or providing income-qualified incentives. In 2026, staff will bring forward an additional discussion on these topics, highlighting the community-level planning and equity considerations involved.

FISCAL/RESOURCE IMPACT
The fiscal impact of RRSP strategies and actions is summarized in Attachment A for each strategy and action.

Implementing Strategy 1, Action 6 (Reliability Metrics) involves no fiscal or resource impact.

Future discussions may involve presentations of operating procedures, staffing, and recommended capital improvement program projects intended to improve system performance.

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The studies and draft proposals for implementing RRSP Strategies 4 and 5 have been performed through existing Utilities Resource Management electric utility budget and contracts, which are adequate for project completion. These include:
• A $213,250 contract with Buro Happold for evaluation of supply and short-term resiliency, research and recommendations on potential programs, and development of the final Reliability and Resiliency Cost-Benefit Study and Program Inventory. All funding was utilized, and an additional $10,500 was required for additional analysis based on UAC and CASC feedback.
• A $32,185 contract with Energeia to complete the preliminary analysis of deferring distribution investment, which was completed for $28,676. • A contract with Burns-McDonnell for evaluation of solar and storage at the airport for $208,000, of which $178,000 is for evaluation of microgrid options and use of the energy and $30,000 is estimated for site evaluations to enhance planned Federal Aviation Administration filings for the airport to enable this project in the future. To date, $193,000 has been expended.

Pursuing additional analysis of the potential for deferring distribution investment would require an additional $150,000 to $200,000 in consultant costs and 0.5 FTE in staff time, though there is uncertainty about the amount of staff time needed. If Council directed staff to pursue this approach, staff would return with firmer numbers and a proposed funding source. The City has received a $75,000 grant from the American Public Power Association (APPA) for this work.

Staff is in discussions with APPA to explore reducing the grant and applying it to the preliminary study instead.

The recommended actions in this report require resources, in addition to those described above, as follows:
• Promoting the voluntary use of energy in off-peak periods to reduce both greenhouse gas emissions and strain on the electric grid, and lower energy costs will be performed as part of the rollout of time of use rates through utility bill inserts and information on the web site and will require less than 0.1 FTE of staff time, absorbed from existing staff. • If the CASC recommendation were adopted, staff would bring forward a budget proposal for an 0.5 FTE hourly to promote demand response, solar PV, BESS, thermal storage, and vehicle to load, home, and grid technologies and reducing barriers to their adoption at a higher level of effort than is currently being done. This would also require

0.1 to 0.2 FTE in communications staff time from existing staff. If the UAC recommendation were adopted, promotion and barrier reduction would be done as staff time is available and as issues arise. Staff is expecting this will require less than 0.1 FTE of work from existing staff capacity as time is available. • Every two years, staff will update the cost-benefit analysis for demand response, solar PV, BESS, thermal storage, and vehicle to load, home, and grid technologies. This could Item 10
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be done using summer interns for around $15,000 in staff costs, or as staff time is available (about 0.1 to 0.2 FTE of work) or through about $14,000 in consulting budget from existing Utilities consulting budgets. Staff will also do a minor update annually by just updating the electric utility supply projections, which should require a small amount of staff work annually.
• As opportunities present themselves, and to the extent staff time is available, staff can evaluate large scale solar and BESS opportunities in Palo Alto, either at publicly owned facilities/properties or through partnerships with private landowners. Staff would restrict these efforts to 0.1 to 0.2 FTE of work per year. • Engaging the UAC, CASC, and City Council in an additional discussion on microgrids and long-term resiliency in calendar year 2026 is expected to take 0.1 to 0.2 FTE of staff time, one time, though additional work may be needed depending on Council direction.

STAKEHOLDER ENGAGEMENT
No stakeholder engagement was sought on the reliability metrics as the data collected is internal to City departments and comparison data is available publicly.

Use of flexible technologies and efficient electrification, both before and after adoption of the RRSP, has been the subject of many public meetings and stakeholder discussions, which were summarized in the Stakeholder Engagement section of the July 9, 202513 UAC staff report and again in the August 22, 2025 CASC staff report.14 The feedback from the July 9, 2025 UAC meeting on the preliminary results of the attached study was also summarized in the Stakeholder Engagement section of the August 22, 2025 CASC staff report.14 On August 22, 2025 staff presented the preliminary results of the attached study to the CASC.

At the July 9 and August 22 meetings, staff provided a straw proposal list of policy approaches to both the UAC and CASC for consideration with the intent of reflecting the UAC and CASC feedback in the final report. Below is the list of staff-proposed policy approaches with UAC and CASC feedback incorporated. The policy approaches below have been incorporated into the attached report:

1. Promote ways community members can reduce emissions by reducing peak period load (helping the electric grid) and, once time of use (TOU) rates are launched, potentially 13 UAC, Staff Report 2505-4687, July 9, 2025, Status Update on Studies Related to the Electric Utility’s Reliability an d Resiliency Strategic Plan (RRSP) Strategies 4 and 5 and Request for Feedback on Draft Proposals for Implementati on, https://cityofpaloalto.primegov.com/meetings/ItemWithTemplateType?id=8400&meetingTemplateType=2&co mpiledMeetingDocumentId=15055
14 CASC, Staff Report 2507-4944, August 22, 2025, Status Update on Studies Related to the Electric Utility’s Reliabili ty and Resiliency Strategic Plan (RRSP) Strategies 4 and 5 and Request for Feedback on Draft Proposals for Impleme ntation, https://cityofpaloalto.primegov.com/meetings/ItemWithTemplateType?id=9006&meetingTemplateType= 2&compiledMeetingDocumentId=15478
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save money by doing so as well. The TOU Implementation and Communication Plan discussed at the UAC’s October 1 meeting incorporates this messaging.

2. Monitor demand response technologies for positive benefit-cost opportunities, but do not pursue a demand response program at this time (which continues existing City policies). Project changes to benefit to cost ratios and identify actions to take at the point benefits exceed costs.

3. Promote residential solar and battery adoption, standalone batteries, and thermal storage, but do not provide incentives at this time (which continues existing City policies). Project changes to benefit to cost ratios and identify actions to take at the point benefits exceed costs. Explore low-cost technical assistance programs if feasible.

4. Promote electric vehicle to home or grid as it becomes more available, but do not provide incentives at this time (which continues existing City policies). Project changes to benefit to cost ratios and identify actions to take at the point benefits exceed costs.

Explore low-cost technical assistance programs if feasible.

5. Explore opportunities for larger-scale solar + battery projects on commercial or community facilities on a case-by-case basis and bring forward for consideration if costeffective options can be identified, while continuing to pursue utility-scale solar and storage and other renewables in parallel.

6. Monitor opportunities for distribution investment deferral using flexible technologies and efficient electrification but do not pursue additional analysis or new policies or programs at this time.

7. Maintain the City’s current policies on microgrids and backup power at this time, but bring forward additional discussion on long-term resiliency, highlighting communitylevel planning and equity considerations.

8. Explore backup power needs at the Regional Water Quality Control Plant (RWQCP) and airport to determine the most economically feasible backup power alternatives to determine whether an electric utility / treatment plant partnership for a solar and storage microgrid at the airport can be made economically feasible.

At the CASC’s August 22, 2025 meeting, there was a question about the electric capacity needs for electric aviation and whether microgrids could support that need. Staff noted that a microgrid was one of several potential approaches to providing electricity for electric aviation.

Staff plans to consider this item in the context of the 2026-2027 S/CAP Work Plan rather than the RRSP.

On November 20, 2025 the CASC reviewed the final draft consultant report and staff recommendation and voted unanimously (3-0) to recommend the City Council accept the report and the staff recommendation, also recommending for adoption the optional alternative staff recommendation with a higher level of effort for promotion and barrier reduction of the various technologies, as noted in the Recommendation section of this report. On December 3, 2025, the UAC reviewed the final draft consultant report and voted (3-2) to recommend the City Council accept the report and the staff recommendation, without the optional alternative Item 10
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staff recommendation. One Commissioner who voted against the recommendation said he had wanted to see the City actively promote and build microgrids, while the other Commissioner asked for more extensive quantitative analysis of the long-term resiliency benefits of these technologies and said there was not enough information in the report to audit the consultant’s methodology.

ENVIRONMENTAL REVIEW
Providing a status update on implementation of the Reliability and Resiliency Strategic Plan, the reliability metrics, the City Council’s acceptance of the Evaluation of Local Energy Resources to Lower Costs and Improve Reliability and Resiliency” Report to Complete Reliability and Resiliency Strategic Plan Strategies Four and Five, and Council’s direction to staff to promote various related activities does not require California Environmental Quality Act review, because these activities do not meet the definition of a project under CEQA Guidelines Section 15378(b)(5), as administrative governmental activities which will not cause a direct or indirect physical change in the environment.

ATTACHMENTS
Attachment A: Status Update on RRSP Implementation
Attachment B: Consultant Report, “Evaluation of Local Energy Resources to Lower Costs and Improve Reliability and Resiliency”
APPROVED BY:

Brad Eggleston, Director Public Works/City Engineer
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Status Update: Reliability and Resiliency Strategic Plan Implementation (November 2025) Strategy/Action Status Cost
Strategy 1: Replace and Modernize Infrastructure

1.1 Replace aging
infrastructure

1.2 Upgrade capacity to
accommodate new loads

1.3 Improved feeder
switching capabilities
Strategies 1.1 – 1.3, the grid modernization project, will replace aging infrastructure and increase system capacity to meet future home electrification needs. In 2025 a pilot project replaced and upgraded aging infrastructure serving approximately 1000 residents. Staff evaluated the results from the pilot are and are incorporating lessons learned with future distribution reconstruction. Primarily, staff will be focusing on the replacement of legacy 4kV distribution systems (transformers and wire), replacing overloaded transformers systemwide, and upgrading portions of neighborhoods as residents fully electrify. Additional Capital Improvement work will focus on the reconstruction of substations service large areas of residential customers and upgrades to the City single transmission receiving station.

Electric Fund CIP for Grid
Modernization: roughly $224
million over the next five
years with an expected
additional $250 million
needed in the following five
years.

1.4 Second transmission
connection
Staff, with consultant help, continues to work with the California Independent System Operator (CAISO) and PG&E to build a second transmission corridor from the broader electricity grid to Palo Alto. In May 2025 CAISO approved construction of this second corridor in the form of a new 115 kV line from Ames to Palo Alto to be completed in 2034 as part of the CAISO transmission planning process. Staff and consultants are working with PG&E and CAISO to move the completion date to closer to 2030 as loads are increasing faster than expected in last year’s forecast.

Electric Fund CIP EL-06001
(115 kV Electric Intertie):
$250,000 for planning and
design work for application to
CAISO

1.5 Foothills undergrounding A key wildfire mitigation activity is undergrounding approximately 49,200 feet of electric overhead distribution lines and fiber optic cable in the Foothills area. This iterative project consists of multiple phases 1-5 and is expected to be complete in 2025. Phases 1,2, 3, and 5 were completed May 2025, and 10,000 Feet remaining in the MidPen Phase 4 area actively being constructed and planned for completion by mid-summer of 2026.

Electric Fund CIP EL-21001
(Foothills Rebuild): $8 million
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Strategy/Action Status Cost

1.6 Reliability Metrics Metrics and proposed goals were provided to Council June 16, 2025 (Staff Report 2506-4769 Accept Electric System Reliability Key Performance Indices1) but the report was pulled from the consent calendar and is scheduled for City Council action on March 2, 2026. Metrics are provided in reports to the UAC, also in the Council packet.

0.05 FTE of staff time for
research and metric
development

Strategy 2: Operational Strategies to Improve Reliability and Manage Outages Effectively

2.1 Strengthen the
workforce
Concerted efforts are currently underway to recruitment, train, and retain lineworkers, system operators, engineers, inspectors to maintain system and respond to outages effectively. Staff have also contracted with third-party contractors to supplement staff to undertake emergency response, maintenance, and capital improvement projects. Significant progress has been made in filling critical vacancies like director, assistant director, lineworker, and engineer. In FY 2025, 44 vacancies were filled. Between July 2025 and January 2026, CPAU has 12 new hires and 17 promotions. As of January 2026, CPAU had 39 vacant positions or 14.66% vacancy rate of the authorized 266 FTEs. Nineteen of the vacant positions are in-progress recruitments.

1.0 FTE (spread among three
people) for additional
recruitment and retention
work

2.2 Wildfire protection
maintenance practices
Staff regularly updates its Utility Wildfire Mitigation Plan to reduce the risk of utility caused wildfire within higher fire risk areas. With the undergrounding of the Foothills area, the City’s vegetation management costs will be significantly reduced but still require some maintenance to maintain clear space around padmounted electrical equipment.

Expected future vegetation
management cost within the
fire area of $150,000 to
$200,000 per year
1 https://cityofpaloalto.primegov.com/meetings/ItemWithTemplateType?id=8431&meetingTemplateType=2&compiledMeetingDocumentId=14843 Item 10
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Strategy/Action Status Cost

2.3 Communicate effectively
during outages
The new OMS allows CPAU to more quickly detect and respond to power outages and provide customers with timely notifications and updates. In FY 2025, OMS sent approximately 103,500 text messages for planned and unplanned outages and restorations. Staff has incorporated OMS texting features to support outbound communications during potential and active PSPS events. Staff will explore other uses for OMS, such as customer non-payments.
$73,000 was spent to develop
the system. Ongoing
maintenance involves 0.25
FTE and ongoing system costs
of $108,000 per year.

Strategy 3: Effectively Integrate and Ease Adoption of New Technologies

3.1 Configure the distribution
system to accommodate high
penetrations of solar,
batteries, and other
technologies
Staff has completed an evaluation of the distribution improvements needed to accommodate high penetrations of solar and storage and is currently evaluating whether these same improvements will also accommodate vehicle to grid technologies, smart panels, and flexible loads.
$30,000 to 50,000 in
consultant studies from
electric utility operating
budgets

3.2 Review, communicate,
and streamline permitting
and other regulatory rules for
efficient and flexible
electrification technologies

3.3 Communicate how to
electrify efficiently
Staff completed an inter-departmental internal review of various technologies to establish clear rules and guidelines for implementation:
• Planning and Development Services updated intake forms for electrical load calculations were updated. Status: Complete.
• Utilities updated transformer upgrade fees to eliminate the situation where a resident upgrades to a 400A panel and pays for the entire transformer upgrade.

Status: Complete.

0.25 FTE in staff effort from
being developed in parallel
with the City’s rollout of
advanced existing staff
resources
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Strategy/Action Status Cost

3.4 Communicate how to
use technologies in a
grid-friendly way
• Utilities transformer upgrade policies for multi-family and non-residential properties take into account efficient and flexible technologies and strategies.

Status: Complete.
• Time of use (TOU) rates and a transition plan for these rates are currently metering infrastructure. The voluntary residential TOU rates were approved by Council. Staff provided an update to the UAC on implementation details in October 2025. Initial Launch Planned: Q1 2026
• Utility staff has developed an electrification guide for single family homes and posted it on its website. Status: Complete
• Utilities launched an electrification expert service which can provide guidance to residents on efficient electrification. Status: Complete

Strategy 4: Value the benefits of flexible technologies to the utility and community

4.1 Value the utility benefit of
flexible technologies on
electric supply costs

4.2 Value the utility benefit of
flexible technologies on
electric distribution costs and
capacity

4.3: Explore estimating the
value of resiliency for the
community

4.4: Estimate the cost of
various community resiliency
approaches
Staff is taking its final recommendations for Council review in March 2026. If Council approves the staff recommendations, the only actions needed will be occasional updates to this study as staff time permits.

See staff report for details
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Strategy/Action Status Cost
Strategy 5: Evaluate the resource needs for various demand reduction and resiliency programs

5.1: Evaluate utility-driven
programs to enhance
resiliency and lower the
demand on the grid

5.2 Evaluate equity-based
and need-based versions of
the programs

5.3: Evaluate communitybased versions of the
programs

5.4: Evaluate other resiliency
approaches like
neighborhood level
microgrids
Staff is taking its final recommendations for Council review in March 2026. If Council approves the staff recommendations, some additional work in 2026 related to long-term resiliency and microgrids will be needed before this item is complete.

See staff report for details
Strategy 6: Implement any demand reduction or resiliency programs chosen by the community Staff is taking its final recommendations for Strategies 4 and 5 for City Council review in March 2026. If the City Council accepts the CASC or UAC recommendation, no specific programs will be needed under this Strategy 6, though promotion and barrier reduction will continue to take place under Strategy 3, and commercial solar and battery project evaluations will take place as staff time permits.

See staff report for details
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Implementation
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Evaluation of Local Energy Resources to
Lower Costs and Improve Reliability and
Resiliency
Valuing Flexible Energy Technologies and Efficient Electrification Strategies for Electric Supply Cost Reduction, Distribution Investment Deferral, and Reliability and Resiliency: Cost/Benefit Analysis and Potential Local Programs
City of Palo Alto Utilities Department
DRAFT November 11, 2025
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Energy Resources to Lower
Costs and Improve
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 2 Executive Summary
This study assesses customer programs for flexible energy technologies that enhance customer reliability and resilience in the City of Palo Alto. Customer programs were identified through an extended inventory of programs, pilots, and customer-scale projects throughout the United States, with an emphasis on the California context, that support resilience and electrification with technologies such as battery energy storage systems, solar, vehicle to grid & vehicle to home, thermal energy storage, and demand response technologies. The analysis considered the technological viability of each technology, avoided supply costs, value of short-term resilience, as well as program feasibility, accessibility, and community impacts.

The baseline results indicate that most programs currently yield a negative net value for the Palo Alto community unless additional benefits such as avoided distribution system investment or long-term resiliency are valued, or program characteristics are adjusted to improve performance. By analyzing at a community level first (the combination of costs and benefits for both the utility and its customers together, analogous to the “Total Resource Cost Test” commonly used in analysis of energy efficiency and other demand-side management programs)1the City can see whether these programs would increase or decrease costs at a community level before doing more in-depth analysis on the costs and benefits for the utility alone, program participants, or nonparticipating ratepayers.

On a supply cost and short-term resiliency basis, at a community-level, none of the technologies demonstrated a positive cost-benefit except for commercial solar plus battery, which narrowly broke even at a 1:1 benefit to cost ratio. Commercial standalone battery, commercial demand response, and residential solar plus battery came closest to achieving a positive net benefit. These results are based on current technology costs, the continuation of Palo Alto’s existing electric outage reliability, and the expiration of the 30% federal tax credits for solar and residential battery projects that expires after December 31, 2025.

In the near term, the cost benefit for solar plus storage will remain negative unless adequate benefits can be derived from the deferral of distribution investments or long-term resiliency. In a separate study conducted by City staff and another City consultant, the preliminary results do not find a net benefit to deferral of distribution investments using batteries, and that opportunities were limited due to a variety of factors. Quantifying the benefits of long-term resiliency is beyond the scope of this report, but a qualitative discussion is included and the City is pursuing separate discussions on this topic.

In the long-term, reductions in technology costs are likely to improve the cost-benefit results, particularly for commercial solar plus battery, commercial solar, and residential solar plus battery programs. With sufficient cost reductions, such programs could present a potentially worthwhile investment to enhance reliability and resilience.

Time of Use rates were not analyzed for cost-effectiveness, only analyzed for the potential savings they might yield, but are assumed to be cost-effective due to their potential wide scale adoption and low cost of implementation once advanced metering infrastructure (smart meters) are installed.

The results of this assessment show that technical assistance programs or incentives for flexible energy technologies would not generate savings for the community – costs exceed the benefits. As an alternative, the 1 A good definition of the Total Resource Cost Test is included on page 18 of the California Public Utilities Commission “California Standard Practice Manual for Economic Analysis of Demand-Side Programs and Projects,” October 2001, which is still used for investor-owned utilities.

Publicly-owned utilities use similar analytical methods for their energy efficiency and demand-side cost-effectiveness analyses. https://www.cpuc.ca.gov/-/media/cpuc-website/files/uploadedfiles/cpuc_public_website/content/utilities_and_industries/energy_- _electricity_and_natural_gas/cpuc-standard-practice-manual.pdf Item 10
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Reliability and Resiliency”
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 3 City could consider low-cost strategies for promoting flexible energy technologies and further explore alternative cost-effective measures for local commercial and utility-scale solar plus battery programs. The following programs may result in a positive benefit to cost ratio in the future, though, and the cost-benefit analysis should be updated periodically:
• Commercial solar plus storage, evaluated on a project-by-project basis; • Commercial battery projects or solar plus battery projects where commercial partners value long-term resiliency highly enough to make the project cost-effective; • Residential solar plus storage projects or standalone batteries where residents value long-term resiliency highly enough to make the project cost-effective; and
• Commercial demand response, paired with time of use rates, which could deliver net benefits with sufficient scale and program design.

The report that follows provides detailed coverage of the analysis. It begins with the Objectives and Background, establishing the purpose, scope, and context of the analysis. The Result section summarizes key findings and recommendations across all valuation criteria, with a sensitivity analysis that supports considerations for future customer program adoption. The sections that follow delve further into specific areas of analysis, including a Customer Programs Survey, Supply Cost Valuation, Distribution Cost Valuation, Customer Short-Term Resiliency Valuation, and a discussion on Long-Term Resiliency and Microgrids. Appendix A, B, and C provide supporting data, methodologies, and supplement materials referenced throughout the analysis.

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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 4 Table of Contents
Executive Summary............................................................................................................................................................................................2 Table of Contents................................................................................................................................................................................................4 List Of Figures ......................................................................................................................................................................................................6 List Of Tables.........................................................................................................................................................................................................7 1 Introduction and Background..............................................................................................................................................................8

1.1 Purpose and Scope of the Study - Utility Supply Costs, Customer Resiliency, & Customer Programs.........8

1.2 Associated Studies – Distribution Capacity & Investment, Long Duration Airport Microgrid ..........................8

1.3 Defining Reliability & Resilience ................................................................................................................................................8

1.4 Flexible Energy Technologies ......................................................................................................................................................9

1.5 Palo Alto Context .............................................................................................................................................................................9 2 Results......................................................................................................................................................................................................... 11

2.1 Methodology for Valuing Flexible Energy Technologies and Efficient Electrification Strategies................... 11

2.2 Summary of Results - Customer Program Prioritization Framework ....................................................................... 13

2.2.1 Qualitative Results ............................................................................................................................................................... 13

2.2.2 Quantitative Results and Sensitivity Analysis – Utility Supply and Short-term Resiliency Benefits .... 14

2.2.3 Quantitative Results – Distribution Investment Deferral...................................................................................... 18

2.2.4 Qualitative Results – Long-term Resiliency and Microgrids ............................................................................... 18

2.2.5 Takeaways & Conclusions................................................................................................................................................. 19 3 Customer Programs Survey................................................................................................................................................................ 21 4 Supply Cost Valuation .......................................................................................................................................................................... 27

4.1 CPAU Avoided Cost...................................................................................................................................................................... 27

4.2 Statewide Avoided Cost ............................................................................................................................................................. 29

4.3 Time of Use Rates ......................................................................................................................................................................... 31 5 Distribution Cost Valuation ................................................................................................................................................................ 33

5.1 Results................................................................................................................................................................................................ 33

5.2 Additional Considerations ......................................................................................................................................................... 33

5.3 Methodology .................................................................................................................................................................................. 33

5.4 Efficient Electrification Strategies............................................................................................................................................ 35 6 Short-Term Resiliency Valuation....................................................................................................................................................... 35

6.1 Valuing Reliability and Resilience............................................................................................................................................ 35

6.1.1 Literature Review.................................................................................................................................................................. 35

6.1.2 Distribution of City Outages – reasons, # customers, duration of outages (outage response) - Reliability ................................................................................................................................................................................................... 37

6.2 Approach to Valuing Resiliency in Palo Alto ...................................................................................................................... 39 Item 10
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 5

6.2.1 Model Selection & Parameters....................................................................................................................................... 39

6.2.2 Interruption Costs for SFR, MFR, Small Commercial, and Large Commercial Customers ...................... 41

6.2.3 Quantitative & Qualitative Components of Resilience (Direct, Indirect, Societal Metrics)..................... 41

6.2.4 Adjustments, Limitations, and Uncertainty in the ICE Calculator ..................................................................... 42 7 Long-Term Resiliency and Microgrids............................................................................................................................................ 43

7.1 Microgrids Overview.................................................................................................................................................................... 43

7.2 Valuing Long-term Resiliency................................................................................................................................................... 43

7.3 Value of Long-term Resiliency Needed for Benefits to Exceed Costs ...................................................................... 44

7.4 Community-scale Long-term Resiliency Planning ........................................................................................................... 44

7.5 Community-scale Microgrids ................................................................................................................................................... 45

7.6 Incentives for Individual or Community-Scale Microgrids ........................................................................................... 46 Appendix A – Flexible Energy Technologies ......................................................................................................................................... 47 Batteries .......................................................................................................................................................................................................... 47 Vehicle-to-Home......................................................................................................................................................................................... 50 Generators ..................................................................................................................................................................................................... 52 Heat Pump Water Heaters....................................................................................................................................................................... 54 Enabling Technologies .............................................................................................................................................................................. 55 Appendix B – Customer Program Precedents...................................................................................................................................... 59 Appendix C – Supply Cost Valuation Assumptions............................................................................................................................ 65 Battery Energy Storage System (BESS) ............................................................................................................................................... 65 Demand Response (DR)............................................................................................................................................................................ 71 Thermal Energy Storage System (TESS) ............................................................................................................................................. 73 Vehicle to Everything (V2X)..................................................................................................................................................................... 74 Item 10
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 6 List Of Figures
Figure 1. Cost-Benefit Results for Commercial Programs ............................................................................................................... 16 Figure 2. Cost-Benefit Results for Residential Programs.................................................................................................................. 16 Figure 3. Benefit Cost-Ratio Forecast...................................................................................................................................................... 18 Figure 4. Cost per MWh Delivered Example: Winter Month (January 2026) and Summer Month (August 2026). .. 28 Figure 5. Example Supply Cost Net Savings for Residential Standalone BESS (per 100 installations)........................... 29 Figure 6. Avoided Cost Calculator Input Parameters......................................................................................................................... 30 Figure 7. Example of Avoided Cost Disparity for Residential Standalone BESS (per 100 installations)......................... 31 Figure 8. Reliability vs. Resilience .............................................................................................................................................................. 36 Figure 9. Natural hazards and power interruption cost components ........................................................................................ 37 Figure 10. Sustained Outages by Cause - Sept 2023 - June 2025 ............................................................................................... 39 Figure 11. Changes in Projected Component Costs for Residential BESS (also used for commercial systems) ........ 50 Figure 12. Connected DER meter socket adapter............................................................................................................................... 56 Figure 13. Span and Savant Product Examples ................................................................................................................................... 57 Item 10
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 7 List Of Tables
Table 1. Customer Program Summary..................................................................................................................................................... 11 Table 2. Quantitative & Qualitative Assessment Parameters Overview ..................................................................................... 12 Table 3. Qualitative Results Summary...................................................................................................................................................... 14 Table 4. Community Cost-Benefit Summary ......................................................................................................................................... 14 Table 5. Sensitivity Analysis - Customer Adoption & Program Costs ......................................................................................... 17 Table 6. Sensitivity Analysis - Technology Costs.................................................................................................................................. 18 Table 7. Resilience Technology categories included in program directory............................................................................... 21 Table 8. Program Inventory Summary ..................................................................................................................................................... 23 Table 9. Program Research Framework................................................................................................................................................... 25 Table 10. Customer Program Designs ..................................................................................................................................................... 26 Table 13. Number of transformers by nameplate capacity and number of homes served................................................ 34 Table 14. Modeling Assumptions .............................................................................................................................................................. 34 Table 15. Electric Outage Reliability, FY 2019 through FY 2025 .................................................................................................... 38 Table 16: Tools for Short Duration Outage Impacts........................................................................................................................... 39 Table 17. ICE Calculator Parameters & Inputs ...................................................................................................................................... 40 Table 18. Resilience Benefits per Customer (2025$) .......................................................................................................................... 41 Table 19. Annual Resiliency Value Needed for Breakeven Costs .................................................................................................. 44 Table 20. Portable Batteries - Residential Options ............................................................................................................................. 48 Table 21. Stationary Batteries - Residential Options.......................................................................................................................... 48 Table 22. Stationary Batteries - Commercial Options........................................................................................................................ 49 Table 23. Residential Generators - Product Examples....................................................................................................................... 53 Table 24. Commercial Generators - Product Examples..................................................................................................................... 54 Table 25. Heat Pump Water Heater - Product Examples ................................................................................................................. 55 Table 26. California Program Inventory Summary .............................................................................................................................. 59 Table 27. CPAU Peers Grid............................................................................................................................................................................ 60 Item 10
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 8 1 Introduction and Background

1.1 Purpose and Scope of the Study - Utility Supply Costs, Customer Resiliency, & Customer Programs Flexible energy technologies such as solar generation, batteries, vehicle to grid, and more are becoming increasingly common as new innovations enable localized production and capacity integrated within power systems. These shifts are coinciding with rising electricity demand, driven by increased demand for cooling resulting from extreme temperatures, electrification of buildings and transport, growing consumption by industry, and expansion of the data center sector. Together, these trends present new challenges to Palo Alto’s electric grid.

This study and associated companion studies will evaluate flexible energy technologies and efficient electrification strategies that enhance customer reliability and resilience in Palo Alto. Based on the outcomes of this assessment, potential utility customer programs to leverage these technologies will be prioritized, and recommendations will be provided to inform future planning, operation, and investment decisions for Palo Alto.

These efforts are driven by Strategies 4 and 5 of the City of Palo Alto Utilities’ (CPAU’s) Reliability and Resiliency Strategic Plan (RRSP), which calls for quantifying the value of various distributed technologies, and estimating the resource needs to promote various projects and utility programs.

This report provides a qualitative and quantitative assessment of customer programs for flexible technologies that incorporates the avoided supply costs, distribution costs, the value of resilience, and the technological viability of each technology. This assessment also considers technology adoption and maturity as well as program feasibility, accessibility, and community impacts. The results are synthesized into a customer program prioritization framework with corresponding recommendations, which will be considered alongside concurrent studies to inform CPAU’s future planning and operations.

1.2 Associated Studies – Distribution Capacity & Investment, Long Duration Airport Microgrid Palo Alto staff undertook two separate studies, with the help of other consultants, to examine the merits of utilizing battery energy storage systems (BESS) placed at homes to defer distribution transformer investments by the utility, and the merits of installing a 6.6MW/26.4MWh Solar PV + BESS microgrid at the airport to serve critical loads at the adjacent Water Quality Control Plant (WQCP). The relevant results from these studies are summarized later in this report.

1.3 Defining Reliability & Resilience
Reliability and resilience are central concepts for this study, and they are widely used in the power sector with distinct yet interrelated definitions that are critical for measuring and valuing resilience. Resilience is typically defined as “a system’s ability to anticipate, prepare for, and adapt to changing conditions and withstand, respond to, and recover rapidly from disruptions.”
2 Reliability pertains to maintaining power delivery to customers in the face of routine uncertainty in operating conditions such as fluctuating load and generation, fuel availability, and outage of assets under normal operating conditions. While resilience and reliability are interrelated concepts, and resilience is often conflated with reliability, resilience is an expansive concept that includes and extends to reliability.3 Reliability issues are often seconds to hours, whereas resilience issues come from low-probability, high-consequence disruptive events that may last hours, and days to months. 2 Resilience Roadmap: A Collaborative Approach to Multi-Jurisdictional Resilience Planning 3 Measuring and Valuing Resilience: A Literature Review for the Power Sector Item 10
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 9 Resilience is inherently contextual and goes beyond reliability considerations by incorporating a wide set of characteristics such as operational and resource flexibility, climate-readiness, and economic resilience.4 Resilience also emphasizes the importance of transition time between a disruption and ultimate recovery , with a focus on mitigating higher-level consequences to infrastructure, human-wellbeing, and the economy.

The scope of this study is focused on short-term reliability and resilience for outages within the 24-hour range as opposed to long-term resiliency for multi-day power interruptions. But many of the technologies being considered for customer programs in this study can support long-term resiliency in varying capacities. A residential solar plus storage installation, for example, could provide indefinite power capacity depending on energy consumption. While long-term resilience benefits aren’t quantified in this analysis, they are considered qualitatively against other factors to comprehensively capture the full range of potential benefits from customer programs.

1.4 Flexible Energy Technologies
Flexible energy technologies enhance the adaptability and responsiveness of grid systems, and can help address reliability and resilience issues, especially in the face of fluctuating renewable energy sources. Palo Alto also has unique characteristics that should be considered when valuing/implementing flexible energy technologies. Buro Happold performed a technology assessment (see Appendix A) that includes several technologies currently available to Palo Alto residents, collating information on product accessibility, implementation feasibility, and costs. The technology assessment informed the development of program recommendations by confirming which products are realistic for customer implementation and CPAU budgetary needs. The assessment also highlights which technologies are best suited to provide resilience and/or cost and sustainability benefits. The relevant technologies are included below:
• Battery energy storage systems (BESS) and solar
• Generators
• Vehicle to load, grid, and home (V2L, V2X, and VTH)
• Thermal energy storage
• Enabling technologies (including meter collars and demand response technology) This technology assessment builds on previous research completed by CPAU, encapsulated within the City of Palo Alto Guide to Electrification5. The Appendix provides additional context on each technology, with specific product examples, cost, and sizing information for each technology, with the exception of enabling technologies.

1.5 Palo Alto Context
This study focuses on the use of flexible energy technologies like solar and batteries to provide added reliability and resiliency for community members. It is driven by several trends leading to increased community focus on electric reliability and resiliency, and the study of flexible energy technologies is only one action being taken to improve community reliability and resiliency. These trends and parallel activities are summarized in this section. 4 Power Sector Resilience Planning Guidebook
5 City of Palo Alto Guide to Electrification
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 10

1.5.1.1 GHG Reduction, Electrification, and Greater Reliance on Electricity The Palo Alto community has ambitious Greenhouse gas (GHG) reduction goals, including a goal to achieve 80% reductions in community emissions compared to 1990 levels by 2030 and a goal of community carbon neutrality by 2030. The City is actively promoting the adoption of electric vehicles and the electrification of natural gas appliances at homes and businesses. As the community continues to adopt more electric vehicles and building equipment, there has been a call from the community to place a greater emphasis on maintaining a high levels of reliability and resiliency of the electricity supply systems.

1.5.1.2 Central Generation and Transmission Reliability A 2009 airplane accident in Palo Alto severed the only transmission corridor connecting the community to the broader electric transmission system, leading to a full day citywide outage. In August 2020 a combination of factors led to severe energy constraints and brief rolling blackouts throughout California. Both of these factors led the community to focus on the reliability of the statewide electric system and Palo Alto’s transmission interconnection.

The City of Palo Alto Utilities (CPAU) has access to reliable central generation resources from hydroelectric, solar, wind, landfill and market resources. These supplies are transmitted through the CAISO transmission system for delivery at the Palo Alto’s high-voltage substation. A number of initiatives are underway to maintain the reliability of these systems. In addition, through regulatory interventions at the State and Federal level, Palo Alto participates in ensuring sufficient generation and transmission exists to serve all the electric loads in California.

Within this broader context Palo Alto ensures that the City has adequate capacity to serve the local electrical demand.

The City has advocated for and received approval from the CAISO for PG&E to construct a second corridor to receive transmission services – this, when implemented in 2034 or sooner will increase the reliability of the City’s transmission interconnection.

1.5.1.3 Existing Flexible Distributed Energy Resource Technologies in Palo Alto There are approximately 1,700 PV systems with a total capacity of 19 MW in Palo Alto, which is estimated to meet about 2.5% of the community’s electrical loads. There are approximately 150 BESS systems with a capacity of 1.3MW in Palo Alto, and 9,700 EVs (82% BEV and 18% PHEV). The EV charging load is estimated at ~3% of the community’s total annual loads (8-15% of the residential load and 1% of commercial load).

Unless required by law, CPAU has mostly refrained from providing rebates or incentives for DERs that are not economical to do so from a community perspective6(the combination of costs and benefits for both the utility and its customers together, analogous to the “Total Resource Cost Test” commonly used in analysis of energy efficiency and other demand-side management programs).
7 This is to ensure that customer retail rates are
maintained at the lowest possible level. The only DER rebates CPAU has provided in the past is for Solar PV 6 An exception is the first 3 MW of capacity for the Palo Alto CLEAN feed-in tariff program, which provided additional incentives in the form of a higher feed-in tariff rate. Subsequent capacity does not include additional incentives. Only 100 kW remain available in this first 3 MW of capacity.
7 A good definition of the Total Resource Cost Test is included on page 18 of the California Public Utilities Commission “California Standard Practice Manual for Economic Analysis of Demand-Side Programs and Projects,” October 2001, which is still used for investor-owned utilities.

Publicly-owned utilities use similar analytical methods for their energy efficiency and demand-side cost-effectiveness analyses. https://www.cpuc.ca.gov/-/media/cpuc-website/files/uploadedfiles/cpuc_public_website/content/utilities_and_industries/energy_- _electricity_and_natural_gas/cpuc-standard-practice-manual.pdf Item 10
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 11 system that were required by law – but these rebates ended a decade ago. CPAU continues to provide incentives for cost-effective energy efficiency programs and has achieved ~5% of electrical load reductions over the past 10 years.8

1.5.1.4 Factors Affecting Customer Programs in Palo Alto Due to Palo Alto’s low-cost electric supply and low electric retail rates (~50% lower than the IOUs or CCAs in California), many of the customer programs that are economical in adjoining areas become uneconomical in Palo Alto. In addition, because the number of customers and electrical load is small in Palo Alto, Palo Alto lacks economies of scale to absorb the costs of more expensive incentive programs. This has led, for example, to Palo Alto not having BESS incentives even when investor-owned utilities and some publicly-owned utilities provided them.

In the past, about 10 years ago, CPAU had implemented a commercial customer summer demand response program that had about 6 commercial customers participating and achieved 200-500kW of demand reduction.

The program was discontinued after 5 years because the cost and effort was greater than the value. 2 Results

2.1 Methodology for Valuing Flexible Energy Technologies and Efficient Electrification Strategies In this study, flexible energy technologies and electrification strategies are evaluated within the context of customer program design and implementation. Customer programs chosen to analyze were informed by research of an extended inventory of programs nationwide that support resilience and electrification through various programs, pilots, and customer-scale projects. This inventory also informed each program’s structure, deployment, and implementation mechanics. The selected programs, summarized in Table 1, include battery, demand response, vehicle-to-grid, managed electric vehicle charging, and commercial thermal energy storage. A more detailed description of customer program research and design is provided in Section 0.

Table 1. Customer Program Summary
Program Program
Components
Program
Category
Implementation Mechanics
Battery, Solar +
Battery
• Residential battery
incentive
• Residential solar and
storage leasing option
• Commercial battery
incentive
Grid Scale
Interventions
• Third-party (contractor) upfront one-time
incentive/rebate
• Third-party leasing option or performance-based
incentive
Demand
Response (DR)
• Residential battery
demand response
• Commercial battery
demand response
Demand
Response
• Third-party aggregator – performance based
• Email based alerts
Vehicle to
Home/Grid (V2X)
• Residential V2X
• Commercial V2X
Emerging
Technologies
• 3
rd party (contractor) upfront one-time incentive/rebate • Performance incentive
Residential
Managed EV
Charging
• App-based Managed
EV Charging
Demand
Response
• Third-party managed EV charging app
• Enrollment incentives plus monthly bill credit
• Additional one-time incentives for compatible chargers 8 As estimated using data from annual SB 1037 reports. https://www.cmua.org/sb1037-reports Item 10
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 12 Commercial
Thermal Energy
Storage
• Up-front incentive
equipment incentive
Grid-Scale
Interventions
• Rebate program
• Demand response program
Resilience Hubs
and Microgrids
• Direct project support
• Competitive grant
funding
• CPAU led project
management &
execution
Community
Resilience
• CPAU provides limited support via reimbursement for
activities like federal grant application development or interconnection expenses
• CPAU distributes funds to community led resilience
projects via competitive applications
• CPAU conducts study to identify critical facilities for resilience hub development
Resilience
Awareness
• Utility webpage
• Incentive directory
Education &
Outreach
• Utility webpage and contact email providing guidance
on resilience strategies and available incentives
• Focused outreach to disadvantaged customers
Residential
Enabling
Technology
Incentives
• Up-front equipment
incentives
Mass Market
Technology
Adoption
• One-time incentives for a range of technologies
including meter socket adapters, generators/portable
power stations, smart panels, socket splitters, energy
management devices, and EV meter adapters.

Together, these programs provide a framework to assess the value of flexible energy technologies and electrification strategies. Several key parameters are considered, including supply costs, the value of short-term resilience, distribution costs, program implementation costs, participant cost savings, long-term resilience potential, program precedents, community impact, and carbon reduction potential. These parameters, summarized in Table 2, establish quantitative and qualitative customer, utility, and society-scale considerations for customer program adoption. Additional details on each parameter are also provided in corresponding sections throughout the report, as listed below.

Table 2. Quantitative & Qualitative Assessment Parameters Overview Assessment
Parameter
Description Metric Assessment
Type
Report
Reference
Supply Costs Transmission access charge and
commodity impacts that can enable
savings for customers and CPAU
$ savings Quantitative Section 4
Distribution
Investment Deferral
Utility savings from deferring
distribution equipment upgrades
needed for electrification
$ savings Quantitative Section 5
Value of Short-Term
Resilience
Avoided interruption costs to
customers according to a customer
damage function
$ savings Quantitative Section 6
Technology Viability Capital & operating expenditure costs $, $/kWh Quantitative Section 4 Program
Implementation
Staffing & budget allocation required
to support programs
FTE, $ / year Quantitative Section 3
Long-term Resilience
Potential
The range and extent to which
customer energy needs are met for a
multi-day outage
High, Medium,
Low duration
Qualitative Section 7
Program Precedents Prevalence and level of demonstration for similar programs across
California/U.S. utilities
High, Medium,
Low
Qualitative Section 3
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 13 Community Impact Potential to support community
resilience and/or provide equity
benefits through increased access for
low-income residents
High, Medium,
Low
Qualitative Section 3
Carbon Reduction
Potential
Potential to mitigate statewide carbon
emissions
Low, Medium,
High
Qualitative Section 3
While all programs are considered through a qualitative lens, quantitative parameters are not applicable for all customer programs, particularly those focused on education, outreach, and community-scale resilience projects.

For this reason, the quantitative evaluation only includes battery, solar plus battery, demand response, V2X, managed EV charging, and thermal energy storage programs. An Excel-based Program Typology Matrix, provided as a separate attachment to this report, is the basis for the qualitative assessment and comparison tool for customer programs identified during the Customer Programs Survey.

An Excel-based Technology Valuation Tool, also provided as a separate attachment to this report, integrates the quantitative parameters into a cost-benefit analysis that provides the net present value and benefit-cost ratios of each customer program. Detailed discussion of the underlying mechanics and inputs of this tool can be found in Section 4. The cost-benefit analysis also includes a sensitivity analysis that considers the range of outcomes based on program scale, implementation costs, as well as future declines in technology costs.

2.2 Summary of Results - Customer Program Prioritization Framework The qualitative and quantitative results from these assessments are summarized in the following sections:
• Section 2.2.1 provides a high-level summary of qualitative results • Section 2.2.2 provides quantitative results from the cost-benefit and sensitivity analysis • Section 2.2.3 covers the impact of distribution investment deferrals, which is included as a supplement to the cost-benefit analysis results
• Section 2.2.4 covers long-term resilience potential, which is included as a separate qualitative supplement to the cost-benefit analysis results

2.2.1 Qualitative Results
The qualitative results, summarized in Table 3 suggest that grid scale interventions (solar and battery energy storage systems), demand response, and emerging technology programs (V2X) generally perform better relative to programs focused on community resilience, education, and enabling technologies. This is due in part to the former’s ability to support long-term resilience while providing cost-savings to program participants, as well as greater carbon reduction potential. However, programs for grid scale interventions and emerging technologies may favor higher-income, property-owning customers due to installation costs and barriers for renters, thereby creating inequities depending on program design. Incentives provided for solar and battery programs or V2X therefore have limited community impact in comparison to resilience awareness programs or resilience hubs, which are generally more accessible and widespread in their impact. Careful program design is needed in either case to consider customer adoption and the impacts on residents of varying income levels.

There are numerous precedents for most of these programs across California and the United States, highlighting how utilities are employing a variety of approaches to address resilience and electrification in various capacities.

Apart from thermal energy storage and vehicle-to-grid/home technologies, there is a substantial level of program demonstration that that can inform potential adoption in Palo Alto. Qualitative parameters alone, however, insufficiently enumerate the impacts of these programs on the City and its residents. The qualitative Item 10
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 14 outlook is also dependent on the weighting and prioritization of each parameter, which requires further deliberation beyond the scope of this analysis. The section that follows explores the impacts of these programs qunatitatively based on utility supply cost savings and the value of short-term resiliency during utility outages.

Table 3. Qualitative Results Summary
Program
Participant CostSavings
Long-Term
Resilience
Potential
Program
Precedents
Community
Impact
Carbon
Reduction
Potential
Battery Low Medium High Medium Medium
Solar + Battery High High High Medium High
Demand Response Medium Low High High Low
V2X Low-Medium Medium Low Medium Medium
Residential Managed
EV Charging Medium N/A Medium Medium Medium
Commercial Thermal
Energy Storage Low N/A Low Low Low
Resilience Hubs &
Microgrids N/A Low Medium High Low
Resilience Awareness N/A N/A High High Low
Residential Enabling
Technology Incentives Low/Medium N/A High High Low

2.2.2 Quantitative Results and Sensitivity Analysis – Utility Supply and Short-term Resiliency Benefits The quantitative results in Table 4 indicate that in most cases the benefits of customer programs for flexible energy technologies do not exceed the costs. One exception is solar plus battery systems, which provide a positive net present value for commercial customers. Commercial battery systems are nearly cost effective, and they outperform residential battery systems due to economies of scale, lower capital costs, and a higher value of resilience for commercial customers. These cost-benefit calculations do not include the investment tax credit.

Vehicle to grid programs differ from battery energy storage systems due to varying charging schedules that limit energy arbitrage, as well as other factors like reserve depths and program adoption rates. Demand response programs require little up-front investment from customers, but the benefits are still exceeded by costs because they require high levels of customer participation for utility programs to be cost effective. Lastly, programs for thermal storage are not cost effective at the scale of system considered most applicable for a broad program.

Table 4. Community Cost-Benefit Summary
Program Benefits9 Costs10 Net Present Value
Benefit-Cost
Ratio (Baseline)
100 Residential Battery
Installations $650,127 $2,224,335 -$1,574,208 0.29
100 Residential Solar +
Battery $3,118,274 $4,411,335 -$1,293,061 0.69
35 Commercial Battery $5,968,264 $6,663,615 -$695,351 0.90 35 Commercial Solar +
Battery $20,119,852 $20,089,615 $30,236 1.00
9 This includes all of the benefits calculated using the methodologies in Sections 4 and 6 of this report. 10 This includes both the capital cost of the equipment and the cost of program administration, as shown in Appendix C Item 10
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 15 100 Residential Vehicle to
Grid (VTX) Installations $365,980 $465,509 -$465,509 0.44 35 Commercial VTX
Installations $157,435 $464,283 -$306,847 0.34
250 Demand Response $505,493 $943,999 -$438,506 0.54
75 Commercial Demand
Response $1,931,685 $2,208,023 -$276,338 0.87
35 Thermal Storage
Installations $222,852 $2,257,088 -$2,034,235 0.10
Figure 1 and Figure 2 visualize the costs and benefits of each program, highlighting which component of each program is most influential in determining program performance as well as the additional value needed to reach break-even costs. For example, solar plus battery programs require large capital expenditures but also generate significant customer savings. Capital expenditures for VTX and Demand Response programs on the other hand are quite low and far outweighed by program administration costs.

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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 16 Figure 1. Cost-Benefit Results for Commercial Programs
Figure 2. Cost-Benefit Results for Residential Programs These figures highlight how changes in assumptions could markedly improve program performance. In turn, the sensitivity analysis in
$5,968,264 $6,663,615
$20,119,852 $20,089,615
$157,435 $464,283
$1,931,685 $2,208,023
$222,852
$2,257,088
BenefitsCosts BenefitsCosts BenefitsCosts BenefitsCosts BenefitsCosts Com BESS Com Solar + BESS Com VTX Com DR Thermal Storage Program Costs
Customer Costs
Short-term Reliability Benefits
Supply Cost Benefits
Battery Energy
Storage System
Solar +
BESS
Vehicle
to Grid
Demand
Response
Thermal
Storage
Additional value needed from
long-term resilience or avoided
distribution investments
$650,127
$2,224,335
$3,033,704
$4,411,335
$365,980
$831,489
$505,493
$943,999
Benefits Costs Benefits Costs Benefits Costs Benefits Costs Res BESS Res Solar + BESS Res VTX Res DR
Program Costs
Customer Costs
Short-term Reliability Benefits
Supply Cost Benefits
Battery Energy
Storage System
Solar + BESS Vehicle to
Grid/Home
Demand
Response
Additional value needed
from long-term resilience or
avoided distribution
investments
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 17 Table 5 demonstrates how scaling the programs (increasing adoption) and reducing upfront administrative and operational costs can improve program performance and the corresponding benefit-cost ratios, particularly for VTX and demand response where program costs are proportionally much larger than technology installation costs. At sufficient scale, demand response programs for residential and customer programs have a nearly net positive value and net positive value, respectively. Meanwhile, the performance of solar and battery programs is only marginally impacted by changes in program scale and administration costs.

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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 18 Table 5. Sensitivity Analysis - Customer Adoption & Program Costs Program Customer Adoption
Program Administration Costs
$150K $300K $500K
Residential Battery
100 0.31 0.29 0.27
250 0.32 0.31 0.30
500 0.33 0.32 0.32
Residential Solar +
Battery
100 0.73 0.71 0.68
250 0.74 0.73 0.72
500 0.74 0.74 0.73
Residential VTX
100 0.52 0.44 0.36
250 0.59 0.54 0.49
500 0.62 0.59 0.56
Residential Demand
Response
250 0.73 0.54 0.40
500 0.89 0.73 0.59
750 0.96 0.83 0.70
Commercial Battery
35 0.91 0.90 0.87
100 0.92 0.91 0.90
200 0.90 0.92 0.91
Commercial Solar +
Battery
35 1.01 1.00 0.99
100 0.94 0.92 0.92
200 0.92 0.90 0.9
Commercial VTX 35 0.48 0.34 0.25
100 0.64 0.54 0.45
200 0.71 0.64 0.57
Commercial Demand
Response
75 0.99 0.87 0.76
150 1.05 0.99 0.91
300 1.09 1.05 1.01
Sensitivity analyses of technology costs in Table 6 demonstrate how future price reductions could result in a net positive value for solar and battery customer programs. These projections are based on moderate scenario estimates by the National Renewable Energy Laboratory’s Annual Technology Baseline (ATB), providing potential percentage reductions by year. The benefits of residential battery programs are unlikely to outweigh the costs under current projections and would have to fall over 90% to reach breakeven. Commercial battery and residential solar plus battery programs could be net positive with a 14% reduction and a 40% reduction in costs, respectively. Commercial solar plus battery already provides a net positive value and can be expected to improve with future cost reductions. Vehicle to grid/home technologies do not currently have reliable forecasted price reductions. Even so, any reduction in installation costs isn’t sufficiently large enough to improve program feasibility, given the relative program administration costs.

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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 19 Table 6. Sensitivity Analysis - Technology Costs
Year Residential Battery Residential
Solar + Battery
Commercial Battery Commercial Solar +
Battery
BCR % Reduction BCR % Reduction BCR % Reduction BCR % Reduction 2025 0.29 0.71 0.90 1.00
2030 0.32 12.8% 0.81 14.8% 1.03 18.0% 1.17 15.8%
2035 0.34 18.2% 0.92 26.1% 1.08 23.1% 1.33 26.9%
2040 0.36 23.6% 0.99 32.3% 1.13 28.3% 1.43 32.7%
2045 0.38 29.1% 1.07 38.4% 1.19 33.4% 1.55 38.3%
Figure 3. Benefit Cost-Ratio Forecast

2.2.3 Quantitative Results – Distribution Investment Deferral Palo Alto’s grid modernization program includes upgrading 4kV circuits to 12 kV circuits, replacing aging substation transformers, and upgrading distribution transformers. The primary driver for upgrading distribution transformers and associated secondary circuits is to meet projected increase in electrification loads in single family homes due to EV charging and electrification of natural gas appliances.

City staff, in partnership with a separate consultant, did a preliminary assessment of the economics of utilizing small residential batteries to defer the replacement of distribution transformers. It was estimated 362 of the 1,750 distribution transformers slated for replacement could be deferred by installation of 2,400 residential batteries. The annualized cost of batteries was estimated to be $1.3 million compared to saving of $1 million from deferral of transformer upgrades, thus making such an investment uneconomical. In addition to being uneconomical, implementing such a customer program with controllers to dispatch the batteries at customer homes when the transformer is overloaded poses logistical and technological hurdles too, making such a program infeasible at this time.

Based on the above analysis, flexible DER technologies do not appear to offer economic opportunities to defer distribution system investments, and City staff recommend no further analysis of this strategy.

2.2.4 Qualitative Results – Long-term Resiliency and Microgrids While this study was not intended to do a quantitative study of solar and batteries (or vehicle to home) for longterm resiliency City staff performed a qualitative assessment. Staff assessed that while solar plus battery systems are currently not cost-effective, additional benefits from long-term resiliency could make it worthwhile for a Item 10
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 20 customer to invest. Currently the City passes on the supply-related benefits to the utility on to the solar customer through net energy metering and its feed-in tariff program, but this is not enough value to pay for a solar and battery investment. Community members who value short-term and long-term resiliency highly enough, however, may be willing to pay extra for solar and storage on their property. The City does not currently provide incentives for solar and battery systems, and if the City Council wants to provide such incentives for the longterm resiliency value, City staff outlined some potential approaches in Section 7. If incentives were provided for facilities that would be of value to the community during a major emergency, some level of community emergency power disaster planning would be needed, and City staff outlines this need in Section 7 as well. Lastly, staff also assessed the long-term resiliency value and generally economics of microgrids, including communityscale microgrids, through a study of a potential microgrid encompassing Palo Alto’s airport and wastewater treatment plant. The insights from this study are summarized in Section 1.

2.2.5 Takeaways & Conclusions
While most customer programs assessed in this study are not currently cost effective, there are additional benefits that could justify future investment. These benefits may be derived from long-term resiliency, changes in program scale, reductions in administrative costs, or declining technology costs, and could provide a net positive value for the City of Palo Alto.

For all program designs, the smaller scale of Palo Alto is a particular challenge as administrative costs risk being a significant portion of the overall costs and benefits. Reducing program costs could be achieved by leveraging alternative funding sources (such as grants or State or Federal incentives, if available) or by integrating technologies into existing programs. Further evaluation of program design and implementation may help increase adoption rates (which may be especially beneficial for demand response programs) thereby improving overall cost-effectiveness.

Cost projections for solar and battery technologies suggest that future reductions could further improve commercial solar plus battery programs and yield positive benefit-cost ratios for commercial battery and residential solar plus battery programs. Continued monitoring of these trends is recommended, as future shifts in market conditions or policy could make these technologies more viable. In the meantime, technical assistance programs or incentives are not recommended, but the City could still play a proactive role in promoting flexible energy technologies to its customer base and further evaluating the feasibility of larger utility-scale and commercial solar and storage programs in parallel. Additional considerations for long-term resiliency may also be applicable on a case-by-case basis for microgrids and backup power circumstances.

Scaling incentives for, or specifically targeting, low-income residents may also be necessary to address inherent equity issues associated with programs. These groups are less likely to adopt flexible energy technologies without targeted support, which risks exacerbating existing disparities in access to and adoption of flexible energy technologies. More broadly, strategic communication and outreach efforts could help raise awareness and encourage adoption of enabling technologies across the Palo Alto community. Such efforts would not only support equitable access but also enhance overall community resilience, especially to the extent that these efforts improve participation among vulnerable populations.

Based on these findings, one reasonable policy choice would be to have the City continue current practices while evaluating the feasibility of customer programs for flexible energy technologies on an ongoing basis. The City should explore alternative cost-effective strategies for building community-scale resilience while continuing to monitor cost-benefit ratios. Under this policy approach, the following approaches could be pursued for each respective technology and customer program:

1. Promote ways community members can reduce emissions by reducing peak period load (helping the electric grid) and, once time of use (TOU) rates are launched, potentially save money by doing so as well.

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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 21 The TOU Implementation and Communication Plan discussed at the UAC’s October 1 meeting incorporates this messaging.

2. Monitor demand response technologies for positive benefit-cost opportunities, but do not pursue a demand response program at this time (which continues existing City policies). Project changes to benefit to cost ratios and identify actions to take at the point benefits exceed costs.

3. Promote residential solar and battery adoption, standalone batteries, and thermal storage, but do not provide incentives at this time (which continues existing City policies). Project changes to benefit to cost ratios and identify actions to take at the point benefits exceed costs. Explore low-cost technical assistance programs if feasible.

4. Promote electric vehicle to home or grid as it becomes more available, but do not provide incentives at this time (which continues existing City policies). Project changes to benefit to cost ratios and identify actions to take at the point benefits exceed costs. Explore low-cost technical assistance programs if feasible.

5. Explore opportunities for larger-scale solar + battery projects on commercial or community facilities on a case-by-case basis and bring forward for consideration if cost-effective options can be identified, while continuing to pursue utility-scale solar and storage and other renewables in parallel.

6. Monitor opportunities for distribution investment deferral using flexible technologies and efficient electrification but do not pursue additional analysis or new policies or programs at this time.

7. Maintain the City’s current policies on microgrids and backup power at this time, but bring forward additional discussion on long-term resiliency, highlighting community-level planning and equity considerations.

Explore backup power needs at the Regional Water Quality Control Plant (RWQCP) and airport to determine the most economically feasible backup power alternatives to determine whether an electric utility / treatment plant partnership for a solar and storage microgrid at the airport can be made economically feasible.

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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 22 3 Customer Programs Survey
Utility programs promoting resilience technologies are emerging across the country, particularly in California. To inform program design considerations, the team conducted research to develop an inventory of existing resilience technology programs including details such as the utility/funder, location, sector, incentive amounts and equity elements. The resulting inventory includes 100 programs, pilots and projects designed to promote or support the adoption of one of the resilience technologies or approaches listed in Table 7.

Table 7. Resilience Technology categories included in program directory Technology Description
Battery Electric energy storage system; includes residential, commercial and industrial applications.

Thermal Storage Includes technology that stores energy for later use, typically for space conditioning, water heating or refrigeration. Includes both C&I and residential applications.

Generator Includes devices that generate electricity using fuels such as propane, gasoline, natural gas or diesel. Also includes portable electric generators.

Solar and Storage Batteries as defined above when paired and integrated with a solar system.

Managed EV Charging The practice of automatically pausing EV charging when rates and/or load are high.

Vehicle-to-Home & Vehicleto-Grid (V2X)Practices leveraging bidirectional charging technology to either power a home or discharge to the electric grid using electric vehicle (EV) batteries.

EV Time of Use (TOU) Rates Electric rates that change depending on the time of day (or electricity load) to be higher when load is high and lower when load is low, to incentivize off-peak charging.

Microgrid Small network of interconnected loads and distributed energy resources (DERs) that can be operated separately from the rest of the grid for short or long duration outages.

Resilience Hub Buildings or groups of buildings with DERs and/or storage allowing for sustained operation during a resiliency event.

Smart Panels Technology that replaces a traditional electric panel and allows individual circuits/loads to be monitored and controlled independently. Particularly advantageous for homeowners with battery so that critical loads can be assigned and adjusted.

Meter Socket Adapters A device inserted between an electricity meter and a meter socket creating a new interface where additional devices can be installed such as remote disconnects and DERs. Also referred to as “Meter Collar”, "Backup power transfer switch" and "Tesla Back-up Switch (BUS)".

Other Includes any technologies resiliency solutions that are not listed above but are present within the identified programs.

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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 23 The identified programs range from large established IOU programs like California’s Self Generation Incentive Program (SGIP),11 which provides incentives for a wide range of self-generation equipment including energy storage systems, to innovative pilots implemented by small publicly owned utilities (POUs) like Cape Light Compact’s Cape and Vineyard Electrification Offering,12 which provides solar, storage and heat pump installations from low to no cost for income qualified residents. At least one program was identified within each of the listed technology categories. However, there were some clear market leaders among the technologies, and several that remain in the pilot stage. summarizes the offerings listed in the program directory. This directory is not intended to be a comprehensive directory of equity programs offered nationwide but is intended to capture a reasonable sample of resilience-oriented offerings that exist across the country. For this analysis, offerings were placed in one of the following three categories, intended to represent the design of each offering. • “Programs" are categorized as offerings that provide a financial incentive, service or product to customers and are recurring or considered as part of a standard offering for the funder. • "Projects/Pilots" are defined as programs or projects with a limited duration or budget intended to test or demonstrate a program or technology concept.
• "Policies/Plans" are categorized as enabling policies or rate plans available to customers that do not neatly fall into the categories of programs, pilots or projects but enable the installation of emerging technology or offer other resilience benefits to customers.

Offerings that include an equity component are flagged in the directory and are summarized in this table in the columns labeled “w/ equity”. The sum of the offerings listed by technology may not equal the subcategory totals because several offerings include more than one listed technology. 11 Participating in Self-Generation Incentive Program (SGIP) 12 CVEO - Cape Light Compact
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 24 Table 8. Program Inventory Summary
Programs Pilots/Projects Policies/Plans TOTAL Qty. w/ Equity Qty. w/ Equity Qty w/ Equity Qty w/ Equity Totals 63 10 19 3 18 0 100 13
Battery 22 4 7 1 1 0 30 5
Thermal Storage 7 1 0 0 0 0 7 1
Generator 9 2 0 0 1 0 10 2
Solar and Storage 10 4 2 1 0 0 12 5
Managed EV Charging 9 0 1 0 1 0 11 0
V2X 1 0 6 1 0 0 7 1
EV TOU Rates 0 0 0 0 11 0 11 0
Microgrid 4 0 2 1 0 0 6 1
Resilience Hub 6 0 1 0 0 0 7 0
Smart Panels 1 1 0 0 0 0 1 1
Meter Socket Adapters 1 0 0 0 6 0 7 0
Other 3 1 1 0 0 0 4 1
Battery programs quickly became a leader among identified offerings with 22 identified programs, seven identified pilots/projects, and one identified policy or plan. Solar and storage programs were also prevalent and had a much higher portion of offerings with an equity component, with almost half of the identified offerings containing some sort of equity focused component. Other technologies with a notable presence among existing offerings include Managed EV Charging, V2X Pilot projects, EV TOU rates, Generators and Thermal Storage.

Technologies with less presence in the market included V2X programs, Resilience Hubs, Meter Socket Adapters, Microgrid, and Smart Panels. Vehicle to Home and/or Grid offerings almost exclusively fell into the Pilot category, with several small-scale offerings identified that intended to test this emerging technology. While meter socket adapter enabling policies were found at six utilities, only one offering, administered by PPL electric utilities,13 actively incentivizes the technology by providing it to customers at no upfront cost.

Among the identified offerings, 13% include some equity component. Most offerings with this characteristic provide larger financial incentives to customers that meet an income qualification or a geographic qualification such as residing in a designated disadvantaged community (DAC) per the U.S. Environmental Protection Agency.

These incentives range from incremental increases from the base rates to large incentives covering up to 100% of the project cost. Microgrid and resilience hub programs and projects with an equity consideration typically target sites within communities where larger portions of residents live below the poverty line, or in a DAC. Some more unique offerings with an equity consideration included a Green Mountain Power battery program that features a no-interest leasing option,14 reducing the up-front capital investment required for participation, and the 13 Meter Collar Devices
14 Home Energy Storage - Green Mountain Power
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 25 previously mentioned Cape and Vineyard Electrification Offering,15 that provides solar and storage and heat pump installations at low to no cost for residents depending on income qualifications.

The methods used by utilities to deploy resilience technologies vary. While some programs or pilots are presented as independent offerings, others are combined with larger offerings or grouped with electrification measures. For example, solar and storage are commonly paired among utility programs, where batteries are presented as an adder to an existing solar incentive program. Batteries are also seen grouped with generation technologies like electric or gas generators and presented as back-up power or “self-generation” programs. Only one program was identified that provides incentives for smart panels; Silicon Valley Power’s offering is embedded within their standard incentive program.16 Offerings like this one may indicate that there are additional smart panel rebates available that were not identified in this research, because they are embedded within larger program offerings and therefore less searchable. Alternatively, V2X programs were most often presented as an independent offering, except for Portland General Electric’s (PGE) Smart Grid Test Bed.17 While the surveyed technologies were selected based on their applicability to resilience, very few offerings were presented as resilience programs. Instead, offerings were often linked to electrification efforts or presented without resilience or electrification emphasis. Programs that did have a resilience emphasis were typically offerings supporting microgrids, resilience hubs or generators. Two generator programs in California only provided incentives for residents located in California Public Utility (CPUC) High Fire Threat District Tiers 2 or 3.18 19 After completing the program research, the team concluded that utilities are adopting resilience programs through diverse design approaches within each technology type. To guide the city's next steps, the team reviewed the program research which informed a variety of program designs for consideration. The team determined that most programs fell into one of six program categories, as described in Table 9. These program categories were then used to inform the development of program designs for the cost effectiveness valuation.

During the analysis of existing programs, the team evaluated various factors, including the size of the implementing utility, the apparent success or longevity of the programs, and the prevalence of similar programs in the market. To provide the city with a diverse representation of program categories and implementation approaches, the team also sought to include as many program categories as possible, while considering suitability for program scale deployment supporting of resilience goals. Based on these considerations, the program team proposed eight program designs for cost-effectiveness analysis, summarized in Table 10. The proposed programs were ultimately selected with the intention of providing a variety of design options that encompass a majority of approaches observed in the market. These programs were assumed to be funded from utility ratepayer funds, with the cost-effectiveness analysis (using the methodology described elsewhere in this report) determining whether the programs would be cost-effective for the community as a whole on that basis, and therefore viable for implementation using ratepayer funding. 15 CVEO - Cape Light Compact
16 Rebates | Silicon Valley Power
17 Smart Grid Test Bed | PGE
18 Rebates & Incentives | Rebates, Incentives, & Savings Tips | Your Home | Home - SCE 19 Generator & Battery Rebate Program
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 26 Table 9. Program Research Framework
Program Category Description Relevant Technologies Comments Grid-Scale
Interventions
Investments in widespread,
grid-scale technologies to
enhance resilience across the
utility network.
• Utility-scale generator
• Microgrids
• Solar and Storage
• Thermal Storage
Program category that can
form the basis for a costeffectiveness analysis .

Demand Response
(DR)
Programs to encourage,
incentivize, and enable
demand shifts or reductions
at specific times to prevent
grid stress and save costs.
• TOU
• Residential DR
• Commercial DR
• Managed EV Charging
•
Program category that can
form the basis for a costeffectiveness analysis
Emerging
Technologies
Focused on piloting, scaling,
and deploying emerging
technologies to enhance grid
resilience and innovation.
• V2X
• V2H
Program category that can
form the basis for a costeffectiveness analysis
Mass Market
Technology
Adoption
Incentives or rebates
provided to customers to
install low-tech resilience
interventions or improve
efficiency.
• Portable Solar and
Storage
• Smart Panels
• Meter Socket Adapter
• Efficient Electrification
Enabling function, less
suitable for resilience
program cost-effectiveness
analysis, but could be
considered as part of
electrification programs.

Community
Resilience
Targeted investments for
communities in need to build
community resilience.
• Resilience Hubs
• Solar and Storage
• V2X
Supports community
resilience, less suitable for a
scalable program for target
outcomes, recommended for
separate study.

Education &
Outreach
Communication strategies to
improve customer
awareness, adoption of
technologies, and enrollment
in various energy programs.
• Varies by program Enabling function, to
encourage private adoption
taking advantage of
voluntary TOU rates coming
into effect.

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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 27 Table 10. Customer Program Designs
Program Program
Components
Program
Category
Technology Sector
Application
Implementation Mechanics for Program as
Analyzed for Cost-Effectiveness
Equity Component
Opportunities
Battery • Residential battery
incentive
• Residential solar
and storage leasing
option
• Commercial battery
incentive
Grid scale
Interventions
(1)
Battery Residential
& Nonresidential
• Upfront one-time incentive: $/kWh capacity
• Solar and storage leasing option: customers may
lease battery or solar and storage from third-party.
• Set a # of discharge events per year, cannot be
only used for backup.
• Higher rebates for
income eligible
customers
• Leasing option is only
available to income
qualified customers.

Demand
Response
(DR)
• Residential battery
demand response
• Commercial battery
demand response
DR (2) Battery Residential
& Nonresidential
Two model options:
• Performance: $/kWh discharged during peak
events
• Participation: Enrollment incentive plus monthly
bill credit for participation
N/A
V2X • Residential V2X
• Commercial V2X
Emerging
Technologies
(3)
V2G Residential
& Nonresidential
Flat rate incentive for bidirectional charger and one
of the following:
• Performance: $/kWh discharged during peak
events
• Participation: Monthly bill credit for participation
in peak events
Higher bidirectional
charger incentive for
income qualified
customers
Residential
Managed
EV
Charging
App-based
Managed EV
Charging
DR (2) Managed
EV Charging
Residential • Participants must download custom CPAU
managed EV charging app.
• Participation incentives: enrollment incentive plus
monthly bill credit
• Additional one-time incentive for compatible
charger
N/A
Commercial
Thermal
Energy
Storage
Commercial Thermal
Energy Storage
Grid-Scale
Interventions
Thermal
Storage
Commercial Incentive (upfront): $/kW demand saved (system size)
N/A
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“Evaluation of Local Energy Resources
to Lower Costs and Improve Reliability
and Resiliency”
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 28 4 Supply Cost Valuation

4.1 CPAU Avoided Cost
The calculation to estimate CPAU’s avoided cost for each of the technologies included within the Technology Valuation Tool uses data provided by CPAU from their avoided electric supply cost projection model. This model provides the cost ($) per unit of energy (MWh) delivered within the CPAU network in an hourly format for each month spanning calendar years 2025 through 2035. As many technologies and load shifting/reduction strategies have useful lives exceeding this timeframe, an observed linear trend was extrapolated to 2050. Various sub-costs are factored into the data source, including:
• Energy Cost
• Resource Adequacy (RA) System Capacity Cost
• RA Local Capacity Cost
• California Independent System Operator (CAISO) Ancillary Service Cost Allocation • CAISO Grid Management Charge (GMC) Cost Allocation
• Locational Marginal Pricing (LMP) Differential Between Load Aggregation Points (LAP) and NP-15 • Low Voltage Transmission Access Charge
• High Voltage Transmission Access Charge
• Renewable Energy Certificate Value
• Distribution System Losses
A yearly (8,760 hour) model was developed given the raw input data, to account for technologies and strategies that could be implemented multiple days per month during different time periods. An example of the load profile for a sample winter month (January 2026) and summer month (August 2026) are provided in Figure 4 below. As demonstrated, the cost of energy ($/MWh) delivered within CPAU’s network fluctuates throughout the day, as well as throughout the months of the year. This disparity is the key component in understanding the benefit (or non-benefit) of the simulated technologies and strategies on the total supply cost attributable to CPAU. Many of the technologies (battery energy storage, vehicle-to-everything, thermal energy storage) aim to reduce the City’s supply costs by charging during low-cost times of day and discharging during higher cost times of day, while load reduction strategies (demand response, distributed generation) aim to mitigate supply costs through the displacement of energy use. While the technologies aiming to reduce supply costs overall have the need to charge, increasing supply costs during that period (coupled with losses associated with roundtrip efficiency, noted in the Assumptions section), it is the goal to have these periods coincide with times when energy delivery costs are lower. Conversely, it is the goal to have the discharge periods coincide with times at which delivery costs are higher, thus creating a net-positive benefit to CPAU.

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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 29 Figure 4. Cost per MWh Delivered Example: Winter Month (January 2026) and Summer Month (August 2026).

For each of the technologies and reduction strategies, a few key variables are developed to simulate the benefit to CPAU’s supply cost. An overview of these key variables is described below with a full account of assumptions for each technology and strategy in the Assumptions section. • Total Energy Demand, typically expressed in kilowatts (kW) or megawatts (MW) • Charge/Discharge Duration, expressed in hours
• Charge/Discharge Start Time, noted as a specific time of day • Frequency, which varies daily (battery energy storage, vehicle-to-everything) and seasonally (demand response, thermal energy storage)
• System Degradation, as applicable based on technology The simulation is then conducted on an annual basis, across the time horizon specified which ranges from 15 years to 20 years. The sum of the net benefit is then determined for each year and a net present value (NPV) of the lifetime expected savings is calculated using a rate of 5% to determine a comparative current value of the future savings. It should be noted that the value determined as part of this exercise does not portray the total benefits to CPAU, as there will often be negative impacts to CPAU’s distribution and commodity revenue streams that are discussed in the subsequent sections.

An example of the daily arbitrage associated with a standalone battery energy storage system (per 100 installations) in a residential application is provided in Figure 5 below. As shown in the figure, when the system is charging there is a negative impact on CPAU’s supply cost, while there is a positive impact when the system is discharging. In total, the discharging benefit ($166.58) outweighs the charging negative benefit (-$135.47), for a net positive benefit of $31.11. This same methodology is determined for each day and summed for a full year.

This example also highlights the efficiency losses, with a difference in energy that's delivered back to the grid after being stored, compared to the energy put into the system for charging.

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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 30 Figure 5. Example Supply Cost Net Savings for Residential Standalone BESS (per 100 installations)

4.2 Statewide Avoided Cost
The final simulation performed is an assessment of the technologies and strategies impact on the statewide grid.

For this, the statewide Avoided Cost Calculator (ACC) Electric Model v1bfor the same climate zone (CZ4) was developed, as shown in Figure 6 below. Like the hourly data provided by CPAU, this tool provides an insight into the valuation of energy at the statewide level on an hourly basis for the same time period of evaluation as the CPAU avoided cost.

Month Day Hour
Discharge Energy
(MWh)
Charge Energy
(MWh)
Total Energy
(MWh)
Avoided Cost of
1 MWh
Delivered
1 1 1 0.000 0.000 0.000 $ -
1 1 2 0.000 0.000 0.000 $ -
1 1 3 0.000 0.000 0.000 $ -
1 1 4 0.000 0.000 0.000 $ -
1 1 5 0.000 0.000 0.000 $ -
1 1 6 0.000 0.000 0.000 $ -
1 1 7 0.000 0.000 0.000 $ -
1 1 8 0.000 0.000 0.000 $ -
1 1 9 0.000 0.000 0.000 $ -
1 1 10 0.000 -0.275 -0.275 $ (34.95)
1 1 11 0.000 -0.275 -0.275 $ (34.22)
1 1 12 0.000 -0.275 -0.275 $ (33.64)
1 1 13 0.000 -0.275 -0.275 $ (32.66)
1 1 14 0.000 0.000 0.000 $ -
1 1 15 0.000 0.000 0.000 $ -
1 1 16 0.000 0.000 0.000 $ -
1 1 17 0.248 0.000 0.248 $ 41.29
1 1 18 0.248 0.000 0.248 $ 42.02
1 1 19 0.248 0.000 0.248 $ 41.78
1 1 20 0.248 0.000 0.248 $ 41.49
1 1 21 0.248 0.000 0.248 $ -
1 1 22 0.000 0.000 0.000 $ -
1 1 23 0.000 0.000 0.000 $ -
1 1 24 0.000 0.000 0.000 $ -
Net Benefit $ 31.11
$ 166.58
$ (135.47)
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 31 Figure 6. Avoided Cost Calculator Input Parameters
The same example from the previous sections is provided in Figure 7 below to highlight the disparity between the value of energy at the local (CPAU) level versus the statewide level. While the local avoided cost values the technology in this example as a benefit of $31.11, the statewide valuation of this same period is $14.89. This demonstrates the need to evaluate the technologies and strategies at a local level, to truly understand the benefits to CPAU and make informed decisions regarding implementation of cost-effective programs. While certain technologies may not present a significant benefit when evaluated at the statewide level, they may present an opportunity locally to the City, and vice versa. While the statewide avoided cost is not included in the cost-effectiveness analysis, this analysis is included for context to help illuminate why programs with economics that work in one California service territory may not work in Palo Alto.

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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 32 Figure 7. Example of Avoided Cost Disparity for Residential Standalone BESS (per 100 installations)

4.3 Time of Use Rates
Time of use (TOU) rates are a key enabling factor for flexible energy technologies and demand response programs, as they provide incentives to shift or shed end-use load. In addition to enabling demand flexibility, grid reliability, and efficient use of electricity, price-based signals can provide cost savings for some groups of participating customers while creating a net benefit to utilities implementing them. Time of Use (TOU) pricing is a common program employed to send price-based signals, where customers pay different prices at various times of the day, based on the actual costs to deliver service at those times of day.

Demand response programs, enabled by price-based signals such as TOU, are increasingly being considered for their technical potential to provide additional resource capacity for utilities through future load forecasting and integrated resource planning. However, the current lack of data and experience with TOU programs limits their broader application in utility distribution system plans. Currently, there is no widespread consensus of how assumptions of price-based demand response load reductions from TOU should be incorporated into resource planning.

Recent studies shed light on the technical potential of TOU rates and demand response programs. California’s 2018 TOU pilot (including PG&E, SCE, and SDG&E) averaged 4.6% in energy demand peak period load reduction.

Of nearly 150 programs assessed by the Lawrence Berkeley National Laboratory, 20% reported outcomes on demand reductions, and 14% reported outcomes on program spending:
• Utilities realized an estimated average demand reduction of 0.06 to 0.9 kW/participant/event Month Day Hour Discharge Energy
(MWh)
Charge Energy
(MWh)
Total Energy
(MWh)
CPAU Avoided
Cost Statewide ACC
1 1 1 0.0000000 0.0000000 0.0000000 $ - $ -
1 1 2 0.0000000 0.0000000 0.0000000 $ - $ -
1 1 3 0.0000000 0.0000000 0.0000000 $ - $ -
1 1 4 0.0000000 0.0000000 0.0000000 $ - $ -
1 1 5 0.0000000 0.0000000 0.0000000 $ - $ -
1 1 6 0.0000000 0.0000000 0.0000000 $ - $ -
1 1 7 0.0000000 0.0000000 0.0000000 $ - $ -
1 1 8 0.0000000 0.0000000 0.0000000 $ - $ -
1 1 9 0.0000000 0.0000000 0.0000000 $ - $ -
1 1 10 0.0000000 -0.2750000 -0.2750000 $ (34.95) $ (19.18) 1 1 11 0.0000000 -0.2750000 -0.2750000 $ (34.22) $ (18.25) 1 1 12 0.0000000 -0.2750000 -0.2750000 $ (33.64) $ (20.30) 1 1 13 0.0000000 -0.2750000 -0.2750000 $ (32.66) $ (20.30) 1 1 14 0.0000000 0.0000000 0.0000000 $ - $ -
1 1 15 0.0000000 0.0000000 0.0000000 $ - $ -
1 1 16 0.0000000 0.0000000 0.0000000 $ - $ -
1 1 17 0.2475000 0.0000000 0.2475000 $ 41.29 $ 22.98
1 1 18 0.2475000 0.0000000 0.2475000 $ 42.02 $ 23.65
1 1 19 0.2475000 0.0000000 0.2475000 $ 41.77 $ 23.14
1 1 20 0.2475000 0.0000000 0.2475000 $ 41.49 $ 23.14
1 1 21 0.0000000 0.0000000 0.0000000 $ - $ -
1 1 22 0.0000000 0.0000000 0.0000000 $ - $ -
1 1 23 0.0000000 0.0000000 0.0000000 $ - $ -
1 1 24 0.0000000 0.0000000 0.0000000 $ - $ -
Net Benefit $ 31.11 $ 14.89
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 33 • Residential reductions for TOU programs ranged from 1-6% per participant. • Commercial and Industrial TOU reductions ranged from 1.5-5%. • Utilities spent approximately $40-100 per kW for first-year costs CPAU already has voluntary TOU rate designs for medium and large commercial customers and will be implementing voluntary TOU rates for residential and small-scale non-residential customers in the upcoming year. In relation to the cost-effectiveness study used for this report, TOU rate implementation is assumed when analyzing the cost-effectiveness of customer demand response programs, for both residential and nonresidential customers. Furthermore, they can help integrate renewable energy sources into the grid, particularly for customer programs focused on distributed energy resources.

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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 34 5 Distribution Cost Valuation
City staff partnered with other consultants to complete a distribution cost valuation. City staff considered building a complete model of the electric system under a complete electrification scenario to identify which transformers would need upgrading and whether batteries, vehicle to grid, and efficient electrification could defer transformer replacements. Before committing to a complete model, though, City staff partnered with a consultant to complete a preliminary analysis to determine the need for the full analysis. That analysis, summarized below, found that the potential for deferring capital investment was limited and very likely not cost effective.

5.1 Results
In one scenario, staff identified potential savings from deferral of infrastructure investment from 326 transformers out of over 1,700 in Palo Alto. If these could be deferred without cost the savings would be equal to about $1 million per year in avoided debt service costs or about a 0.55% reduction in rates. However, staff estimated that 2,400 utility-funded energy storage systems at well over 1,000 homes would be required to achieve this deferral, at a debt service cost of about $1.3 million per year, exceeding the potential savings. When combined with the additional considerations below, especially those related to the legality, novelty and complexity of such a program, the analysis points to there being negative value to pursuing deferral through utility-controlled flexible energy technologies.

5.2 Additional Considerations
Beside the lack of cost effectiveness, several additional factors would make implementing such a program difficult:
• This program depends on the use of transformer-level microgrid controllers that are not extensively used in the utility world at this time, leading to some operational risk due to use of an earlier-stage technology, and likely staff time and ongoing cost impacts that may not be accounted for in the estimates above. It would require very rapid launch of a major program effort to deploy utility-controlled batteries at homes
• It also results in less efficient infrastructure investment and may involve higher operational costs from maintaining a diversity of equipment
• And lastly, if construction inflation continues to exceed general inflation, deferring investments in infrastructure could mean the real cost is greater later on, meaning higher rates for future Palo Altans.

5.3 Methodology
Staff did a simple calculation to estimate the number of 13.5 kWh, 3.375 kW four-hour batteries needed to manage any grouping of homes that exists on the City’s electric system. Staff used the Grid Modernization Study coincident peak load assumption of 6 kVA per home to evaluate the peak transformer loading, then calculated the number of batteries needed to reduce the total loading below the transformer limit (which is 80% of nameplate capacity). An underlying assumption of this method is that the energy capacity of the batteries is sufficient to discharge at all hours needed to keep the transformer loading below the load limits. A Monte Carlo simulation using actual AMI data found that this assumption did not hold in all scenarios, meaning this methodology yields an optimistic outcome, and in reality, more batteries would likely be needed to achieve the program’s goals.

Staff then identified candidate transformers for deferral: those less than 20 years old and that are not being replaced as part of a 4 kV -> 12 kV upgrade, 326 transformers. Staff ran the calculation for each transformer and found the following:

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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 35 Table 11. Number of transformers by nameplate capacity and number of homes served Number of connected
homes
Number of transformers with these characteristics (transformer size and number of homes)
25 kVA 37.5 kVA
4 22
5 24 11
6 33 5
7 30 21
8 32 15
9 21 16
10 11 31
11 13
12 30
13 11
TOTAL 173 153
GRAND TOTAL: 326
In this preliminary analysis, the City is assumed to pay for these batteries because they are used exclusively for distribution management. Staff estimated the total up-front cost of the batteries needed, then calculated the cost of debt financing those costs over 20 years. Staff then compared that to the debt service cost of upgrading the transformers instead of doing the program. The modelling assumptions and results are shown below:

Table 12. Modeling Assumptions
Average cost per transformer upgrade $50,000
Avoided upgrades 326
Total avoided capital investment $16.3 million
Debt service (30 years, 4.5% interest rate) $1.0 million per year savings Cost per battery $5,900
Batteries 2,400
Total required capital investment $14.3 million
Debt service (20 years, 6.5% interest rate) $1.3 million per year cost The ongoing debt service for the batteries in this case exceeds the savings generated by deferring distribution investment. In addition, this preliminary analysis does not include the cost of battery controllers to match battery charge and discharge to transformer loading, program costs to deploy the batteries, and staffing for ongoing maintenance of the battery controller system. Battery systems may not last the full 20 years assumed in this analysis (most have only 10-15 year warranties), and capacity declines with age, which is also not accounted for.

With these included, the total cost of the program would exceed the savings by far more. The preliminary analysis also does not account for degraded battery performance overtime, losses incurred during battery Item 10
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 36 charging cycles, possible benefits from shifting consumption (thru battery charging/discharging) to periods of lower cost and/or cleaner energy production, potential of higher customer peak demands due to electrification, and changes in construction pricing. In general, further sensitivity analysis is expected to result in a higher cost to pursue the battery storage alternative, and no further analysis is recommended.

5.4 Efficient Electrification Strategies
Efficient electrification strategies are tools that will result in lowering customers peak load, which will also enable customers to electrify their homes without having to upgrade their electrical panel. Electrical panel upgrades, which may also trigger utility upgrades will be costly and could potentially delay customer’s electrification projects.

Tools such as smart electrical panels, circuit splitters, circuit sharers could enable homeowners to serve their electrification needs with their current electric panel or lower the upgrade needs. For example, enable a customer to electrify with their current 200A panel, without having to upgrade it to 400A or enable to upgrade their 100A panel to a 200A panel and not having to increase it further. City’s guide for such techniques is linked here:
www.paloalto.gov/electrifymyhome#ElectricGuide
City’s customer programs publicize these tools and have anecdotal examples of how customers have used efficient electrification technologies to electrify their homes without upgrading their 200A panel to 400A.

Utilizing such techniques will enable grid mod projects to be methodically implemented by neighborhood and minimize the need to do one-off transformer upgrade projects in different neighborhoods. 6 Short-Term Resiliency Valuation

6.1 Valuing Reliability and Resilience

6.1.1 Literature Review
To incorporate the value of reliability and resiliency in the cost-benefit analysis, the consultant team conducted a literature review of the latest research from authoritative sources, including the National Renewable Energy Laboratory (NREL), Lawrence Berkeley National Laboratory (LBNL), Pacific Northwest National Laboratory (PNNL), the North American Electric Reliability Corporation (NERC), and the Energy Systems Integration Group (ESIG). The insights from this research established definitions for reliability and resilience (as outlined in the background section of this report), and a corresponding framework with metrics and methodologies to assess the quantitative and qualitative values of resilience within Palo Alto’s electricity system.

The methods for valuing reliability and resilience in the electric grid are distinguished by the duration and scale of a power disruption event, with resilience covering long-duration, large-scale impacts beyond 24 hours.

Conversely, reliability measures are associated with short-duration, small-scale impacts below 24 hours. Figure 1 summarizes these distinctions. There are multiple methods for valuing reliability and resilience, but in both approaches the benefit of reliability and/or resilience is typically conceptualized as the present value of the avoided costs from disruptive events, and the avoided costs of alternative investments.

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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 37 Figure 8. Reliability vs. Resilience
Figure by NREL20
The costs imposed by power disruption events are numerous, extending from customers to utilities and society.

Figure 9 provides a summary of these costs and the potential impacts from power interruptions. At the customer level, there are direct costs to residential and commercial customers, including lost production and any assets or perishables lost due to power interruption. Utilities bear the costs of lost revenue, damaged energy infrastructure, the cost of recovery and risk reduction, and potential legal liabilities (Leddy et al. 2023). At a broader scale, there are indirect costs to the local and regional economy and intangible impacts from increased health risks and environmental damages linked to power outages. Lastly, there are social consequences from power disruption due to interdependencies in critical infrastructure and disparate impacts on vulnerable communities.
20 Measuring and Valuing Resilience: A Literature Review for the Power Sector Item 10
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 38 Figure 9. Natural hazards and power interruption cost components Figure by NREL, adapted from Baik et al. (2021)
The methods for assessing the costs of localized, short-duration (below 24 hours) power interruptions associated with reliability are generally well understood, whereas the costs from wide-spread, long-duration (above 24 hours) power interruptions associated with resilience are relatively new and have not been studied as completely.

Measuring the costs of short-duration outages for reliability are generalized using customer damage functions (CDFs), which define outage costs as a function of duration of the outage, customer characteristics, and outage attributes (time of day, season). CDFs can be determined through bottom-up methods such as stated preference surveys assessing customer’s willingness to pay, or directly assessing the costs to a business associated with an outage. The Value of Lost Load (VOLL) is the most common monetary metric that defines a customer’s willingness to pay for avoiding power disruption, expressed as a $/kWh or $/MWh value.

Measuring the costs of long-duration outages build on the direct costs captured by CDFs and include the indirect costs of outages associated with spillover effects to the wider economy. Regional economic models, such as Input-Output (IO) models or Computer General Equilibrium (CGE), estimate economy-wide impacts and account for interdependencies between various economic sectors and supply demand relationships. Regional economic models are sometimes calibrated by stated preference surveys (a hybrid model approach), although there are limited studies available for long duration outages. There are also methodological concerns about customers’ ability to accurately assess long-term outages. Implementing economy wide models of power interruptions is still an emerging research area, and existing studies are often specific to a single event or location, creating limitations to generalizability.

6.1.2 Distribution of City Outages – reasons, # customers, duration of outages (outage response) - Reliability
CPAU tracks electric power outages through industry recognized indices. A summary chart of these outage indices can be found below. Staff is presenting both outage indices with and without the impacts of “major event days” (MED). For Palo Alto a MED is defined as a 24-hour period that impacts more than 10% of Palo Alto’s electric customers, irrespective of the cause of impact.

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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 39 Table 13. Electric Outage Reliability, FY 2019 through FY 2025 Major Event Days Included Major Event Days Excluded
FY SAIDI21 SAIFI22 CAIDI23 SAIDI SAIFI CAIDI
2019 114.7 0.935 122.7 44.4 0.330 134.6
2020 63.9 0.486 131.4 26.2 0.248 105.6
2021 70.6 0.720 98.1 14.7 0.053 279.9
2022 7.2 0.159 45.4 1.2 0.009 132.8
2023 148.9 1.378 108.0 26.1 0.164 159.6
2024 153.1 0.786 194.7 72.3 0.362 199.7
2025 95.4 0.779 122.5 44.5 0.283 157.4
The above Palo Alto reliability indices are far superior to comparable reliability indices of neighbouring DeAnza Division in PG&E’s service territory. Palo Alto reliability indices are slightly better compared to the top performing utilities nationally (top quartile).

The pie chart below separates unplanned power outages occurring between September 2023 through June 2025 by their primary cause. In September 2023 CPAU staff implemented a robust outage tracking tool that provided improved tracking of outage durations, frequencies, and causes. Over this period, the largest number of unplanned outages (by count) was due to equipment-related failures (failure, damage, or worn). The next largest contributor to unplanned outages were trees contacting power lines. Being the leading cause of unplanned outages, continued equipment failures indicates an aging system that requires additional and/or continued funding for planned infrastructure replacements. To address equipment failures, the City has committed significant funding to rebuild the City’s electric system while simultaneously increasing capacity to serve new electric loads (transportation and building space and water heating). Additionally, CPAU staff are implementing new operational procedures (staffing, emphasis on customer restoration, etc.) and seeking additional isolation points (e.g. fuses) to limit the scope of power outages and speed restoration when they do occur. 21System Average Interruption Duration Index (SAIDI) - Measure of the total duration of an interruption for the average customer during a given time frame. SAIDI = (Sum of Customer Minutes Interrupted) / (Total Customers Served) 22System Average Interruption Frequency Index (SAIFI) - the average number of times a customer will experience an interruption during a given time frame. SAIFI = (Total Customers Interrupted) / (Total Customers Served) 23Customer Average Interruption Duration Index (CAIDI) - the average time to restore service. CAIDI = (Sum of Customer Minutes Interrupted) / (Total Customers Interrupted)
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 40 Figure 10. Sustained Outages by Cause - Sept 2023 - June 2025 Based upon recent reliability indices, the Palo Alto community enjoys a relatively high level of distribution system reliability.

6.2 Approach to Valuing Resiliency in Palo Alto

6.2.1 Model Selection & Parameters
The focus of the resilience valuation in this study is on short-duration power disruptions in the 24-hour range.

The customer programs being evaluated are associated with behind-the-meter customer technologies, which narrows the resilience valuation to the cost of interruptions for electricity customers. Broader impacts to utility infrastructure and community-scale impacts are considered qualitatively, while direct customer impacts are quantified. The consultant team identified and evaluated several existing tools according to these criteria to measure the direct impacts from short-duration power disruptions, and selected the Interruption Cost Estimate (ICE) Calculator as the most suitable tool for the analysis. Compared to the other tools, the ICE Calculator offers the most extensive customization for adapting estimates to community and utility system characteristics in Palo Alto, while providing separate estimates for different customer types (whereas some tools focus only on facilityscale estimates). Furthermore, the ICE Calculator is informed by the largest dataset and is being more actively managed and updated relative to the other tools considered for this study. A summary of the tools identified is provided below in Table 14.

Table 14: Tools for Short Duration Outage Impacts
Tool Developer Methodology & Outputs
Customer Damage
Function (CDF)
Calculator
National Renewable
Energy Laboratory
Estimates site-specific outage costs as a function of outage duration for discrete outage lengths. Based on fixed cost, spoilage cost, and incremental cost inputs.

Interruption Cost
Estimate (ICE)
Calculator
Lawrence Berkeley
National Laboratory
Estimates interruption costs and/or benefits associated with reliability improvements for electric reliability planners, utilizing customer interruption survey data.

Social Burden
Method
Sandia National Lab Survey-driven / mode-driven approach to assess value of maintaining delivery of services considered most valuable to a community FEMA Benefit-Cost
Analysis
Federal Emergency
Management Agency
Toolkit of pre-calculated values for benefits and “loss of service” values for critical facilities
VOR123 Clean Coalition Provides resilience multipliers across three tiers of loads – critical, priority, and discretionary loads – across facility types.

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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 41 The ICE Calculator is developed by LBNL and relies on a comprehensive meta-analysis of 34 datasets from surveys fielded by 10 different utility companies from 1989-2012, totalling over 105,000 observations. The surveys ask representative samples of customers to estimate costs they would experience given a number of hypothetical outage scenarios with different sets of characteristics (see Sullivan et al. 201824 for additional details on the sampling strategy and survey design).

Responses are aggregated to generate CDFs, which can be applied to calculate customer a weighted average of interruption costs for industrial, commercial, and residential customers. The results of the model can be statistically generalized to costs for specific outage durations and customer populations of interest, and the online interface for the tool allows users to adjust the model parameters for these specific conditions. Table 15 provides a summary of the available model parameters and the inputs used for this study.

Table 15. ICE Calculator Parameters & Inputs
Parameter Input Source
Customer Base
Residential Customers 25,783
CPAU Annual Average of Rate Groups Small C&I Customers 2,803 Medium/Large C&I
Customers
837
Reliability Statistics
System Average Interruption Index 99.38
Historical Reliability Statistics for FY18-
FY23
System Average Interruption
Frequency Index

0.83 Customer Average Interruption
Duration Index
118.34
Annual Usage (MWh)
Residential 6.05 Average Annual Electricity
Small C&I 16.6 Consumption for Building End Uses
M/L C&I 741
Median Household Income $184,068 2023 ACS 5-year
Power Interruption Distribution
% Summer 51
Sept. 2013 thru. June 2023 Historical
Outage Data
% Morning 39
% Afternoon 25
% Evening 25
% Night 9
Industry Percentage
Construction 2%
Manufacturing 5% Customer NAICS Codes
All Other 93%
Backup Generation 1% Backup Generation Survey for Major Accounts
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 42

6.2.2 Interruption Costs for SFR, MFR, Small Commercial, and Large Commercial Customers Interruption costs reported by the ICE Calculator for residential and non-residential customers differ in important ways. Residential costs are based on a survey respondent’s willingness to pay whereas direct cost estimates are used for commercial and industrial customers. In other words, residential values are reported under the assumption that much of the “cost” of interruptions is associated the hassle, inconvenience, and personal disruption of an outage, as opposed to direct out-of-pocket expenses. Commercial and industrial customers report direct costs associated with their business operations and revenue structure. Due to these differences, interruption costs for residential customers tend to be more homogenous than business customers, while business customer costs are more variable and comprise a much larger portion of a utility’s outage costs.

6.2.3 Quantitative & Qualitative Components of Resilience (Direct, Indirect, Societal Metrics) Using inputs provided by CPAU, the consultant team tailored the ICE Calculator parameters to fit Palo Alto’s utility characteristics, generating estimates of $/event, $/kW, $/kWh, and total annual costs from outages for residential and non-residential customer types. The ICE Calculator is based on outage durations up to 16 hours, and these costs were estimated for Palo Alto by adjusting the ICE Calculator’s SAIDI inputs while holding all other parameters constant. Estimates were calculated for outages up to 24 hours, assuming the cost per unserved kWh is constant, and by interpolating missing values that were not calculated with the ICE Calculator. Altogether, these values generate a customer damage function for residential, small commercial & industrial, and medium/large commercial & industrial customers in Palo Alto.

To estimate resilience benefits from flexible energy technologies, the consultant team calculated the present value of avoided outage costs across a 20-year time horizon, using a 3% escalation rate for customer costs and a 5% discount rate. Two separate calculations for each customer type were conducted for a baseline and long-term resilience scenario:
• The baseline estimate assumes Palo Alto sustains current reliability characteristics, where average interruption durations reflect the previous 5-year average of 1.66 hours. • The high estimate assumes a scenario of more frequent extreme weather as well as capacity challenges induced by grid electrification, increasing the frequency and probability of long-duration outages. Using NREL’s (2022) Estimated Recurrence Intervals for 12 to 24-hour outages in the Western U.S.,25 the longterm resilience scenario conservatively assumes a 2-year recurrence interval of 24-hour outages. In Palo Alto, only three of 156 sustained outages were greater than 24 hours and only 16 of the 156 were greater than 12 hours during the period from September 2023 through June 2025.

Table 16. Resilience Benefits per Customer (2025$)
Customer Baseline High
Residential $156 $434
Small C&I $17,780 $26,692
M/L C&I $277,187 $966,123
The baseline and high scenarios respectively provide status quo and conservative/low-probability estimates for direct benefits from avoided power interruptions. The specific magnitude of benefits is differentiated by customer type and estimated adoption levels for each program. For example, residential batteries (assuming typical design for off-grid operation) and V2X bidirectional chargers (assuming design for grid isolation) can 25 Exceedance Probabilities and Recurrence Intervals for Extended Power Outages in the United States Item 10
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 43 provide backup generation for up to a 24-hour outage, so the direct benefits per customer are the same across technologies, varying by customer adoption. Commercial solar and battery storage systems provide backup storage for shorter durations due to larger demand and the general inability of a solar system to fully recharge a battery within the time needed to maintain commercial operations. The estimated level of adoption for each program is multiplied by resilience benefits per customer to generate aggregated resilience benefits, which are incorporated in the quantitative component of the cost-benefit analysis.

From a qualitative perspective, the technologies in this study can confer many of the indirect benefits cited in the literature review - benefits to the local and regional economy by maintaining business continuity, risk reductions for CPAU, and broader health and environmental benefits to Palo Alto from the reduced likelihood of future outages. These qualitative benefits are contingent on the extent to which the technologies can be coordinated and managed to mitigate power interruptions. Otherwise, these technologies may not support broader grid reliability and resiliency in the same way that distribution and transmission investments, and may induce negligible qualitative benefits as a result.

6.2.4 Adjustments, Limitations, and Uncertainty in the ICE Calculator There are notable limitations and uncertainties associated with the model that should be considered in the interpretation of ICE Calculator estimates:
• Half of the data in the ICE Calculator’s meta-database are from surveys that are 15 or more years old, so there may be concerns around the precision of older data. • Statistical uncertainty is not modelled in the ICE Calculator, so the potential variance of interruption costs is not quantitatively modelled.
• All of the surveys used in the meta-analysis measure economic costs of a single interruption, not for additional interruptions. As a result, changes in the costs of interruption if the frequency of interruptions increase or decrease are not well understood.
• The ICE Calculator only estimates interruptions up to 16 hours, and only 2-3% of survey observations for all customer classes account for interruptions over 12 hours.

While the survey data may be older, previous updates to the ICE Calculator included an intertemporal analysis, demonstrating that costs have not changed significantly over the years. Technology trends in the past decade may also lead to an increase in interruption costs, particularly as home and business life increasingly rely on electricity reliability for internet connected technologies as well as connecting to data centers and cloud computing. These costs may rise further due to forecasted increases in electricity demand, extreme weather events, and greater awareness of resilience challenges, all of which could increase customer’s valuation of reliability. It is therefore reasonable to anticipate that ICE Calculator estimates provide a lower bound to current outage costs, and that these estimates will increase in the future.

Given the limitations of survey data available for outages over 12 hours, and the extrapolation method used to generate estimates up to 24 hours in this study, the upper bounds of resilience benefits should be interpreted with some caution. Within the ICE Calculator model, the marginal cost ($/kWh) of an outage decreases with increasing outage durations, suggesting a limit to customer willingness to pay, especially if incremental costs from an outage are negligible at a certain point in time. Beyond the ICE Calculator model, the nature of impacts and indirect spillover effects to the broader community change as the duration of power interruptions approaches 24 hours or more. The quantitative estimates should therefore be considered as conservative lower bounds, particularly for longer duration power interruptions.

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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 44 At the time this portion of the analysis was completed, the ICE Calculator had last been updated in March 2018, and the outputs provided were in USD 2016$. These values have been adjusted in this study to USD 2025$ using the GDP Deflator Index. An updated ICE Calculator 2.0 was released in April 2025 and the previous ICE Calculator was retired. The current estimates from the original ICE Calculator capture the stated intent for this study and are deemed sufficient. If at any point this analysis is updated for future studies, the results could be updated to incorporate new estimates from ICE Calculator 2.0.
7 Long-Term Resiliency and Microgrids
This study was not scoped to include a quantitative analysis of long-term resiliency, but as part of this study City of Palo Alto staff framed the qualitative considerations in considering the value of long-term resiliency and microgrids to the community. This section represents their work.

7.1 Microgrids Overview
A microgrid is any group of electric generators and electric loads that can operate both as part of the broader electric grid and independently of it during an electric grid power outage or shortage. It provides both electric power under normal operating circumstances and acts as a backup generator, and can be valued by comparing it to the cost of utility provided power plus the cost of traditional backup generation. A microgrid can include both fossil fuel and renewable generators, but in Palo Alto the most common type of microgrid discussed is a solar plus battery microgrid. This is the only type that will be discussed in this section.

Staff identified two alternatives to a solar plus battery microgrid in Palo Alto:

1. Utility power plus a diesel backup generator

2. Utility power plus a dual fuel diesel / natural gas generator Diesel backup generators are generally easier to install from a regulatory compliance standpoint, but their benefit during a long-term outage is limited to the amount of diesel fuel available. A dual fuel diesel and natural gas generator, on the other hand, can have a virtually unlimited fuel supply so long as the natural gas supply has not been damaged, but the permitting for these types of units under Air District regulations can be challenging.

Natural gas systems are less likely to be damaged in a natural disaster than electric systems, but take longer to restore. If considering natural gas generators, the long-term viability of the natural gas connections serving the generator must also be considered. If the generator is in a location that would be costly for a gas utility to serve in a future high electrification scenario, gas system retirements could raise the costs or even make it impossible to use a dual fuel generator in that location.

Solar and batter microgrids also have a virtually unlimited fuel supply (the sun) that is not subject to interruption in a natural disaster, but they are limited by the amount of surface area on the site and the available sunlight varies seasonally and with the weather, so careful planning and evaluation is needed to compare them to fossil fuel backup generators, which do not have annual variability in their generating capacity.

7.2 Valuing Long-term Resiliency
Long-term resiliency can be challenging to value, both at the individual and societal level. Valuing long-term resiliency at the societal level requires complex models estimating natural disaster damage, including macroeconomic models estimating continuing economic effects. It requires assessing vulnerable infrastructure at a regional level and what systems and infrastructure are needed to mitigate the impacts of an emergency. At an individual level, valuing long-term resiliency requires assessing personal circumstances and vulnerabilities in a natural disaster as well as specific vulnerabilities of an individual’s home, livelihood, and other things, people, and conditions the individual values. Quantitatively estimating individual or societal value of long-term resiliency is Item 10
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 45 beyond the scope of this study. However, it is possible to create a framework for making qualitative judgements of individual and societal resiliency and the resources the community or individual community members are willing to commit to it.

7.3 Value of Long-term Resiliency Needed for Benefits to Exceed Costs Some technologies considered in this study can help relieve the impacts of short-term outages. Vehicle to load, vehicle to home, and standalone batteries can all provide power in these situations, but only when combined with solar panels can they provide longer-term resiliency for multiple days or even weeks. As noted in Section

2.2.2 (Quantitative Results), residential solar and batteries combined do not have benefits exceeding costs at a community level (the combination of utility and customer benefits) just based on the utility supply cost savings (avoided imported energy from utility-scale power plants and avoided resource adequacy requirements) combined with the benefit of avoiding short-term outages. These utility supply cost savings are passed directly through to customers through the City’s net energy metering rates and Palo Alto Clean Local Energy Accessible Now (CLEAN) feed-in tariff program. Only commercial solar and battery benefits exceed costs right now on this basis, but they will not once the Investment Tax Credit expires.

Having calculated the benefits utility customers can realize due to utility supply cost benefits, and taking into account the benefit to them of short-term outage protection, we can then calculate how much additional longterm resiliency value is needed to make benefits exceed costs. This amount is shown in Table 17 for both commercial and residential solar and battery projects in terms of first year dollars per year.

Table 17. Annual Resiliency Value Needed for Breakeven Costs Program Net Present Value Annual Resilience Value
Needed
Annual Resiliency Value Per
Customer
Residential Solar +
Battery (with ITC)
-$131,269 $10,533 $105
Residential Solar +
Battery (without ITC)
-$1,293,061 $103,759 $1,038
Commercial Solar +
Battery (with ITC)
$4,058,036 Not Needed – breakeven costbenefit without long-term resiliency value
Not Needed – breakeven costbenefit without long-term
resiliency value
Commercial Solar +
Battery (without ITC)
-$2,092,864 $167,937 $4,798
This table (the rightmost column) essentially estimates the amount of money a residential or commercial customer would hypothetically be willing to pay each year for extra long-term resiliency. If they value long-term resiliency as much as or higher than this amount of money, a solar and battery project would have benefits that exceed costs for them. If benefits exceed costs, the community member would then need to compare the cost of solar and batteries as a solution to the cost of fossil fuel backup generation, and also consider the qualitative differences between fossil fuel backup generation and solar and batteries, as described above in 7.1.

7.4 Community-scale Long-term Resiliency Planning
Currently the City plans backup power needs for City facilities, especially public-facing facilities that have a role in City emergency response. But it does not have the staff capacity allocated to facilitate community wide backup power planning to provide long term resiliency at private facilities, even if those facilities may be helpful during an emergency (e.g. grocery stores). Some private facilities (e.g. hospitals) are subject to State regulations that drive backup power planning. At the individual readiness level, community members who value resiliency highly Item 10
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 46 enough install their own backup power systems can do so, as described above. But a similar analysis can be done at the community level to determine the amount of value a particular City or private facility needs to have during an emergency to make it worthwhile to spend additional community resources to make a solar and battery project at that site worthwhile.

Staff performed this analysis for a hypothetical solar and battery microgrid at the Palo Alto Airport providing resiliency services to the Airport and Regional Water Quality Control Plant (RWQCP). The RWQCP has diesel backup generators, but these are limited to a few days of fuel, so a longer-duration backup solution would be beneficial. Preliminary results of this study were summarized for the City’s Utilities Advisory Commission at its July 9, 2025 meeting.26 The analysis found that a solar and battery microgrid at the Palo Alto Airport required $2.5 to $3.7 million per year27 in additional resiliency value28 for the project to be economical. In other words, the electricity supplied by a 6.6MW/26.4 MWh Solar + BESS microgrid at the airport is more expensive than the City importing corresponding amounts of electricity from the California electrical grid (City’s avoided cost of electricity supply). The costs were also analyzed comparing the airport microgrid to electricity supplied to the City from a large Solar + BESS project located in the Central Valley with power delivered via transmission lines to Palo Alto - this analysis found the airport microgrid to be $3.1 million per year more expensive.

The City intends to compare the cost of this approach to the cost of backup power to other options such as a dual fuel generator or increasing diesel fuel storage, taking into consideration the qualitative differences between the different approaches as described in 7.1.

This analysis was not replicated for other sites as part of this study but could be performed in the future if directed, either on a site-by-site basis or systematically. To do a systematic analysis of public- and privatelyowned facilities would require staff and consultant resources with skills in disaster planning to work with stakeholders and the Council to identify sites to be analyzed and to perform a planning level analysis to determine the best solution for each site and the cost of implementation.

7.5 Community-scale Microgrids
Occasionally a community member has suggested integrating multiple sites into a single neighborhood-scale or community-scale microgrid. City staff considered this as part of the airport microgrid study cited above in 7.7.

City staff identified several insights about community-scale microgrids as part of that study. Most importantly, it became apparent that a community-scale microgrid only provides additional value when all of the following conditions apply:
• A site has a critical electricity use that requires long duration backup power capability 26 Utilities Advisory Commission, July 9, 2025, Status Update on Studies Related to the Electric Utility’s Reliability and Resiliency Strategic Plan (RRSP) Strategies 4 and 5 and Request for Feedback on Draft Proposals for Implementation. Attachment D, https://portal.laserfiche.com/Portal/DocView.aspx?id=204574&repo=r-704298fc 27 The range is dependent on whether the capital cost of the project was amortized over a 15 or 25-year period. 28 The WQCP diesel generation units have diesel fuel to meet the plant load for three days. The large microgrid could provide three additional days of back-up power during the winter months (when solar generation is the least) and 45 additional days of back-up power during the summer period (when solar generation is high). However, the incremental backup duration could be as low as 1 day if the battery is depleted when the initial outage occurs.

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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 47 • Lack of availability of diesel fuel in an extended emergency is a concern • The site may not be prioritized by emergency planners for limited diesel supplies (e.g. a high priority use like a hospital trauma center may have fewer concerns about diesel availability than a medium priority use)
• The critical electricity use cannot be served adequately just using solar on the property • Site is near other parcels with roof and/or land space for solar panels in excess of that needed for any critical electric uses on those parcels
• Site owner is able and willing to pay for additional solar + storage and the physical • Infrastructure to connect across parcels to supplement diesel backup is available Dual-fuel backup generation (natural gas + diesel) should be considered as an alternative to cross-property solar + storage microgrids when addressing diesel fuel concerns.

City staff intends to use these criteria going forward when evaluating the utility of a community-scale microgrid.

In staff’s estimation, the Airport and RWQCP combined meet these criteria.

7.6 Incentives for Individual or Community-Scale Microgrids The City does not currently provide incentives for individual community members to put in solar and battery microgrids or for those microgrids to be added to City or privately-owned facilities that would be valuable to have powered during an emergency. As described in 7.2, the City’s electric utility passes through the utility value of solar and batteries to customers through its net energy metering and feed-in tariff programs, and if utility customers value long-term resiliency highly enough, they will proceed with a project. If the Council wanted to change that policy and add subsidies for local solar and battery projects to promote local resiliency, a detailed cost of service study would be needed to determine whether these projects can legally be funded by ratepayers.

Otherwise, non-ratepayer funds would be required to comply with California constitutional limits on utility ratemaking. Council would also need to determine who would be eligible to receive those subsidies. Some possibilities include:
• Incentives available to everybody. Incentives at this scale would require a funding source beyond existing special revenues typically used for renewable energy incentives projects. This would require increased taxes or utility rates, either of which would raise household expenses, essentially forcing all community members to value resiliency identically.
• A “first come, first served” program with limited funding. This type of program could be implemented using special utility revenues that can be used for renewable energy incentives, such as Public Benefits and Electric Cap and Trade, though any use of these funds for that purpose would need to be balanced against their use for energy efficiency and electrification programs. • Incentives for critical community facilities in an emergency (e.g. grocery stores, City facilities). Depending on the number of facilities receiving incentives, this could potentially be funded by special utility revenues as described above.
• Incentives for income-qualified community members. The scale of the program would need to be defined to determine whether additional funding sources would be needed.

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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 48 Appendix A – Flexible Energy Technologies
Batteries
Batteries, also referred to as battery energy storage systems (BESS), provide backup power in the case of outages and enable load shaving during peak hours to alleviate grid stress and reduce energy bills. Batteries can provide extended off-grid operation when paired with a solar system, and depending on-size, can support activities for hours to days when deployed alone. This technology is generally accessible and well-regulated to optimize onsite safety – products range from portable options to utility-scale and can often be purchased on a retail basis (although larger batteries require consultation with the selected manufacturer).

Application and Operational Considerations
Several battery options exist with varying purchase prices. Operations and maintenance costs for stationary batteries are generally consistent across applications at around $50 to $100 per kWh over 10 years.29 Portable Batteries
Portable batteries require no permanent infrastructure, reducing maintenance costs. Portable batteries can support small loads, like laptops and microwaves – the amount of power or the available support duration is dependent on the type of appliance. For example, the Goal Zero YETI 500X can charge a 12Wh smart phone 42 times and support a 25W portable fridge for 20 hours. The products listed in Table 18can be charged from several sources, including solar, wall outlets, and vehicles.30 In addition to their adaptable charging capabilities, most of the products can adapt to demand via their respective smart phone applications, enabling owners to select when battery charging and discharging occurs.31 These products are shown as examples, not recommendations, neither the City nor its consultants have reviewed or vetted these products..

Portable batteries generally last between 3 to 10 years, depending on what they are used to power and how often.32 The products listed in Table 18have warranties between 2 to 5 years although most can be extended up to five years. The technology is likely better suited to support niche resilience needs (e.g. medical devices). 29 BESS Costs Analysis: Understanding the True Costs of Battery Energy Storage Systems 30 Goal Zero Yeti 500X Portable Power Station | New Lower Price! 31 Download EcoFlow App for Portable Power Stations | EcoFlow US 32 How Long Does a Portable Power Station Battery Last? Item 10
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 49 Table 18. Portable Batteries - Residential Options
Product
Pecron
E600LFP
Goal Zero
YETI 500X
EcoFlow
River 2 Pro
Goal Zero
YETI 1500x
Pecron
E3600LFP
Goal Zero
YETI 6000x
EcoFlow
DELTA Pro 3
Solar Charging Yes Yes Yes Yes Yes Yes Yes
Capacity 0.614 kWh 0.497 kWh 1.8 kWh 1.615 kWh

3.072 –

15.36kWh
(expandable)

6.071 kWh 4 to 48 kWh
(expandable)
Size (LxWxD)
(in) 11.7x7.8x8.5 7.5x11.25x5.8 10.6x10.2x8.9 15.3x10.2x10.4 17.5x12.1x13.8 15.3x10.1x17 27.3x13.4x16.1 Retail Price ($) $300 $500 $600 $1,300 $1,600 (@3kWh) $3,000 $3,700 (@4 kWh) Stationary Batteries
Table 19. Stationary Batteries - Residential Options
Product
Enphase
Encharge 10
LG
Resu Prime 16H
Tesla
Powerwall
Solar Charging Yes Yes Yes
Capacity 10 kWh 16 kWh 13.5 kWh
Size (LxWxD)
(in) 26.4x42.1x12.6 19.8x42.8x11.6 43.5x24x7.6
Retail Price ($) $8,960 $9,000 $9,200
Residential customers requiring more energy capacity may seek to purchase an on-site stationary battery – these can vary in size and are often modular, allowing for flexible storage options. Stationary batteries with larger capacities may support whole home energy consumption and enable full off-grid operation when paired with solar. Newer batteries can be controlled via mobile application or can be paired with a home energy management system, enabling customers to monitor and control their energy consumption.33 This functionality is particularly useful in the case of an outage, when customers may prefer to prioritize more critical loads.

The Tesla Powerwall is a highly rated product on the market today – the Tesla website allows customers to size and model product benefits prior to completing their purchase. This exercise was completed for a home in Palo Alto with an estimated roof area of 2,000 square feet and an average monthly energy consumption of 504 kWh.34 33 Encharge-10-DS-EN-US.pdf
34 Energy Consumption Data from CPAU
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 50 With one Powerwall 3 and a 4.10 kW solar array, customers fitting this profile will have seven or more days of backup power in the summer and 1.5 days of backup power in the winter. This scenario assumes that most customers will reduce their energy use to 72% of their overall consumption during an outage.35 A Powerwall paired with a Tesla solar product cost approximately $23,000 with no incentives and $16,000 if the customer is eligible to receive federal IRA credits. This example is provided for context only, and the City and its consultants have not reviewed or endorsed this or any other battery products. Other products may have higher or lower pricing.

The battery examples listed in Table 19 all have 10-year warranties and will last anywhere from 5 to 20 years, where useful life depends on customer charging and discharging patterns.36 Stationary batteries can provide more comprehensive resilience opportunities than portable batteries and act as demand management tools to reduce utility bills.

Commercial Batteries
Table 20. Stationary Batteries - Commercial Options
Product
Schneider Electric
EcoStructure Microgrid Flex
ABB
eStorage Flex
Eaton
xStorage
ELM MicroGrid
Gen2 MG Series
Solar Charging Yes Yes Yes Yes
Capacity 246 – 1720 kWh 550 – 1210 kWh 279 – 1117 kWh 1376 – 8256 kWh Size (LxWxD)
(in)
7 ft BESS: 82.8x50.4x92.4
20 ft BESS: 238.8x96x114
Flex 20-550: 236.2x96.5x114.8
Flex 40-1210: 472.4x96.5x114.8 53.5x58.5x68.9 126 x 59 x 108 Retail Price ($) Consultation required Consultation required Consultation required Consultation required Stationary commercial batteries serve the same purposes as stationary residential batteries but are defined by their larger capacities to serve larger commercial loads. Although some customers may be considered commercial, their business operations may only require batteries with smaller capacities as represented in Table

19. The products listed in Table 20are best suited for larger-scale applications, those with energy intensive enduses, or those that would severely suffer in the case of an outage, like data centers.

Cost information for these products is not publicly available since they require consultation with the manufacturer or supplier prior to purchase. However, a 2022 report published by NREL estimates that a 1,200- kWh system, including “battery packs, containers, thermal management system, and fire suppression system” costs about $393 per kWh.37 Market research indicates that larger batteries cost less on a per kWh than smaller batteries.
35 Powerwall Direct | Tesla
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 51 Commercial batteries have expected lifespans of 10 to 20 years38, although this is heavily dependent on their storage conditions and applications. Warranties vary based on battery size and configuration but typically sit at around 10 years.

Adoption and Market Maturity
Portable batteries are generally more accessible than stationary batteries – they are affordable in comparison and do not have space limitations, enabling their use in multifamily buildings that may not be suitable for stationary battery implementation. Residential stationary batteries are becoming more readily accessible, with the Tesla Powerwall leading in marketability. Commercial battery options require contacting the manufacturer to discuss production options and purchase price.

Figure 11. Changes in Projected Component Costs for Residential BESS (also used for commercial systems) Source: Commercial Battery Storage | Electricity | 2024 | ATB | NREL The cost reduction potentials generated in 2019 and featured in Figure 11 were applied to the latest battery cost projections published by NREL in 2024. Battery costs are projected to decrease drastically year-over-year, increasing accessibility for customers even as installation and other soft costs are slower to decrease.

Vehicle-to-Home
Summary
Vehicle-to-Everything (V2X) technology allows EVs to power other loads in addition to enabling the vehicle charging process. V2X encompasses the following technology categories:
• Vehicle-to-Load (V2L): Allows EVs to supply power to smaller loads, like laptops, and requires little additional infrastructure to support. Most EVs currently on the market support this capability. • Vehicle-to-Home (V2H): Allows EVs to supply power to homes and vice versa. More EV models are beginning to enable this capability. Additional infrastructure is required to support this capability. • Vehicle-to-Grid (V2G): Requires additional infrastructure that can communicate between the vehicle and the utility, often with the purpose of providing demand response services to the utility.

V2H and V2G technology enhances energy resilience during outages or peak demand periods. With this emerging technology, homeowners can use their existing EVs as a two-in-one product – harnessing their capabilities for both transportation and home energy storage. Although the concept itself is efficient, utilizing an 38 What’s The Life Expectancy of Battery Storage Systems? | Eco Affect Item 10
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 52 EV as energy storage requires the integration of on-site bidirectional chargers and a home energy management (HEM) system. The HEM should allow users to monitor vehicle charge and depending on the system, select where and when energy will flow from the vehicle battery to end-uses.

V2L technology exists as another resiliency solution enabled by EV technology – however, V2L only enables the use of EV power for one appliance or device at a time and limits the loads that can be served39. Most EVs currently on the market have V2L capabilities.

Application and Operational Considerations
Electric vehicles and associated bidirectional charging infrastructure should function properly for 12 to 15 years – however, consistently using the vehicle battery for peak load shaving will impact battery degradation and shorten its useful life.40 All automakers offer at least an eight-year warranty – amounting to approximately 100,000 miles on batteries.41 As more V2H technology emerges, product useful life will likely increase to allow for more functionality across transportation and energy storage.

To benefit from their bidirectional charging capable vehicles, users simply need to plug their specialty chargers into their EVs and control energy dispersion via an integrated home energy management system.

Vehicle battery back-up duration is dependent on which end uses customers want to prioritize. Based on a study completed by the Schultz Fellows for CPAU in 2021, a fully charged vehicle with a capacity of 60 kWh should be able to support the average Palo Alto home for 3 to 4 days. Ford claims that the Ford F-150 Lightning standard range can power a home for 2 days and 3 days with extended range.42 Implementing V2H technology is most beneficial during outage events rather than for day-to-day peak load shaving – this is especially true without the application of TOU rates that can incentivize customers to use their technology and provide reliability benefits to the grid during peak demand hours. In terms of providing reliability at the grid distribution level, V2H and V2G technology offers limited opportunity if sparsely employed rather than consistently implemented in regions where grid stress is most prevalent.

V2H technology is most used amongst residential utility customers but may expand to commercial and industrial applications as larger vehicles electrify and pilot projects provide proof of concept. PG&E is taking the lead on incentivizing V2H and V2G technology by sponsoring a program that provides funding for customers to purchase EVs and bidirectional charging technologies. The program currently offers incentives to three customer types: residential, commercial, and customers currently participating in a microgrid plan. As an example, residential customers may receive $2,500, or $3,000 if income eligible, to purchase a Ford F-150 Lightning (2022 or newer).43
Adoption and Market Maturity
Several vehicles with bidirectional charging capabilities exist on the market today. The following are highly ranked vehicles that can support multiple home end-uses during a power outage or for demand management purposes. They are provided as examples only, the City and its consultants has not vetted these products:
39 Bidirectional Charging EVs: V2G, V2H, And V2L Explained 40 Vehicle-to-Home (V2H): Everything You Need to Know – iEVPower 41 Electric Car Battery Life: How Long They Last and What to Know 42 What_Can_IBP_Power.pdf
43 Vehicle to Everything (V2X) Pilot Programs
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 53 • Ford F-150 Lightning Flash
• Nissan Leaf
• Kia EV9
• Mitsubishi Outlander
• Hyundai Ioniq 5
• Volkswagen ID.3 & ID.4
• BM@ i3
• Audi e-tron
• Rivian R1T
• Lucid Air
• RAM 1500 EV
• Chevy Silverado EV
The listed options vary in price as well as capacity, where hybrid options have at least 13 kWh and the more powerful EVs have over 130 kWh of capacity. However, costs are still relatively elevated when compared to other EVs as users must purchase the home charging infrastructure that safely enables V2H charging. More vehicles with V2H capabilities are expected to enter that market in 2025 and 202644, which will likely decrease the costs of both the vehicles and the additional home charging infrastructure.

V2H charging infrastructure is currently scarcer than the typical EV charger, with less regulations than regular batteries and EV chargers.45 V2H charging infrastructure is also more complex than regular chargers since a home management/integration system is required to manage the flow of electricity to or from the vehicle. The following are examples of available bidirectional infrastructure:
• GM Energy V2H Bundle46: Includes the GM Energy PowerShift Charger and GM Energy V2H Enablement Kit. The Enablement Kit is composed of a Home Hub to control energy flow to and from the EV, an inverter, and a Dark Start Battery to initiate the charging process. The Bundle costs $7,300 and is compatible with GM vehicles that support bidirectional charging. • Ford Charge Station Pro47: Bidirectional charger compatible with the Ford F-150 Lightning – Ford sells the charger ($1,310) exclusively and recommends purchasing the required home integration system from Sunrun (cost not publicly available, must request quote).

Generators
Summary
Generators are currently the most common backup power generation solution, deployed for both residential and commercial applications. If large enough, generators can support end uses for weeks at a time – however, they require a steady fuel supply which may not be accessible in the case of an extended outage. For example, natural gas-fuelled generators are less reliable during severe earthquakes where gas lines have been damaged.

Generators, although reliable and highly available in the market, are not considered to be at the forefront of 44 Everything You Need to Know About Bidirectional Charging and the EVs That Support It - CNET 45 Bidirectional EV Chargers Review — Clean Energy Reviews 46 GM Energy V2H Bundle | Comprehensive Home Energy Solutions 47 Ford Charge Station Pro | Chargers.Ford.com
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 54 energy storage due to their dependency on fuel (which may be in short supply during a major regional disaster event) and the associated fugitive emissions.

Application and Operational Considerations
Fuel-powered generators range from gasoline to diesel-powered, where most residential generators can consume either propane or natural gas, and commercial generators offer more variety in diesel-powered products. Fuel-powered generators release fugitive emissions and air pollutants during the combustion process (during which energy is generated). 48 Due to this harmful release of emissions and the need to refuel, sometimes manually, generators are not often considered ideal for demand management and are used for backup power instead.

Table 21. Residential Generators - Product Examples
Product
Generac
Guardian Wifi Enabled Dual Fuel
Home Standby Generator
Briggs & Stratton
Power Protect 12000-Watt 200-
Amp Home Standby Generator
Champion
14 kW Whole House Home
Standby Generator
Kohler
20 kW Home Standby Generator
Size 10 kW 12 kW 14 kW 20 kW
Size (LxWxD)
(in) 48x25x29 28x24.5x37.2 49x28x28 48x26x29
Fuel Propane or Natural Gas Propane or Natural Gas Propane or Natural Gas Propane or Natural Gas Retail Price ($) $3,217 $4,650 $5,000 $5,700
Warranty 5-year 6-year 10-year 5-year
The length and amount of support that a generator can provide during an outage varies depending on size. For example, Generac estimates that a 0 to 1,500 square-foot home requires 7.5 kW to support essential functions and 10 kW to support the whole home for about 24 hours while a 2,500+ square-foot home requires 22 kW to support essential functions and 24 to 25 kW to support all functions. Essential end uses for a smaller home are determined to be a small percent air conditioning, kitchen, furnace, sump pump, one bathroom and bedroom, and living areas. This excludes the well pump or water heater, home office, and garage that a larger generator can support.49 Scaling up generator size for commercial purposes increases support potential – however, commercial end-uses are likely more energy intensive than those of a large home.

Residential generator inspections and maintenance may cost between $160 and $600 annually, assuming services are pursued twice a year. Larger generators likely necessitate larger service. Forbes also estimates that a 20-kW natural gas generator costs $90 a day to fuel while “diesel and propane generators of the same size cost around $200 per day” and “a portable 5kW [gasoline] generator costs around $100 per day to run”.50 48 Emissions for Standby Generators
49 Generac Guardian WIFI Enabled Dual Fuel (Liquid Propane/Natural Gas) Home Standby Generator 7171 at Lowes.com 50 Average Generator Cost – Forbes Home
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 55 Residential generators have a lifespan of about 5 to 10 years while Industrial generators typically last 20 to 25 years – commercial generators can last somewhere in between these ranges. 51, 52 Table 22. Commercial Generators - Product Examples
Product Generac
Standby Generator, 48kW
Cummins
C30D6 30kW QuietConnect
Series
Kohler
30RCLA 30kW Generator
Caterpillar
C175-20 (60 HZ)
Size 48 kW 30 kW 30 kW 4 MW
Size (LxWxD)
(in) 83.4x33.5x46 93.8x34x60.5 74x32.9x46.0 Min.: 261.5x85.4x87.6 Fuel Propane or Natural Gas Diesel Propane or Natural Gas Diesel Retail Price ($) $17,217 $18,242 - $21,619 $14,955 - $15,205 > $1M Warranty 5-year 2-year 5-year ?
Adoption and Market Maturity
Generators are perhaps to the most accessible backup power generator solution on the market today with products available for order online and pickup in stores like Home Depot. Although residential products are the most available, commercial products may also be found at select retailers.

Heat Pump Water Heaters
Summary
Water heaters are a type of thermal energy storage – water is heated and stored for future use. Water heaters can act as a demand management strategy in that water is heated during off-peak hours and then ready for use during peak hours, effectively lowering strain on the grid and decreasing utility costs. Heat pump water heaters (HPWH) are a type if water heater and per Energy Star, they “extract heat from the surrounding environment and transfer it into the water inside the tank. They are electrically powered and deliver hot water up to five times more efficiently than standard electric resistance, gas, and propane water heaters.” 53 Application and Operational Considerations
A household or entity that consumes 80 million BTU annually might expect to spend $1,700 in operating costs.54 51 What Is The Life Expectancy Of Industrial Generators? » Turnkey Industries 52 How Long Does a Generator Last? (+ 3 Maintenance Tips) - Assurance Electrical 53 Heat Pump Water Heater Guide
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 56 Table 23. Heat Pump Water Heater - Product Examples
Product Rheem
Various Models
AO Smith
Various Model
Steibel Eltron
Accelera
Bradford White
AeroTherm
ECO2
GS5-45HPC
Type 120V Hybrid HPWH
Shared, dedicated circuit
120V HPWH
Shared circuit 240V Hybrid HPWH 240 Hybrid HPWH 240V HPWH Gallons 40, 50, 65, 80 66, 80 58, 80 50, 65, 80 43, 83
Size (HxD) 63 to 7 5x 21 to 55 62 to 69 x 27 61 to 76 x 28 60 to 71 x 22 to 25 33 x 12 x 27 (compressor)
39 or 69 x 25 (tanks)
Refrigerant Type R134A R134A R134A R134A R744 (CO2)
First Hour
Delivery (gal)
45, 55, 63, 84 76, 93 50, 74 65, 79, 88 69, 121
Uniform Energy
Factor

2.8, 3.0, 3.3, 3.5 3.2, 3.0 3.12, 3.61 3.44, 3.64, 3.59 3.66 – 3.80 Retail Price ($) $2,000 - $3,000 $2,500 - $3,100 $2,600 - $2,900 $2,300 - $3,400 $5,700 - $ Source: CPAU Electrification Guide
HPWHs are about 70% more efficient than electric resistance or gas water heaters.55 A presentation published by the National Resources Defence Council (NRDC) indicates that electric water heater consumption peaks cost the utility between $50 to $100 more per MWh than uncontrolled HPWHs during peak hours – these savings are the direct result of equipment energy efficiency. Controlled HPWHs, those that have demand management and load shifting capabilities, almost completely reduce costs per MWh during peak hours.56 HPWHs ultimately provide substantial savings when compared to electric resistance water heaters, and there are additional savings provided by adding controls.

Many HPWHs current on the market are compatible with the CTA-2045 protocol or have a built in CTA-2045 port (also called an EcoPort) – this compatibility enables utilities to communicate directly with the product. Utilities can tell the HPWH to load up during certain times, shed load, and resume normal operations, all to reduce strain on the grid.57 In addition to a CTA 2045 port, most HPWHs can connect to mobile application that provides consumption data and allows customers to schedule operating modes and set points – for example, Rheem heat pump water heaters can connect to the EcoNet mobile app.58 Enabling Technologies
Meter Socket Adapters
Meter socket adapters (MSAs) are devices that are installed between a home or business’s meter socket and utility meter, allowing additional loads such as solar generation systems to be plugged in safely. Collar placement 55 Costs and Helpful Tips for Your Home Electrification Project 56 Load Shifting with ENERGY STAR Connected Water Heaters 57 https://www.energy.ca.gov/sites/default/files/2022-12/JA13_2022_Qualification_Requirement_HPWH_DM_ADA.pdf 58 RCW-HPE-100_0303C_Final.pdf
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 57 enables the utility to meter the energy used by the home or business from on-site generation or electrical demands, potentially without a more costly panel upgrade. Installing a collar for EV charging is beneficial since a Level 2 charger might require customer electrical panel upgrades.

ConnectDER is a popular meter socket adpater manufacturer on the market today, selling a product that enables the integration of battery storage, solar generation, and EV charging to the home with “plug-and-play” functionality.59 However, ConnectDER products are currently only available in California via Pacific Power, as utilities must approve the product to enable deployment in their service areas.60 San Diego Gas & Electric (SDG&E) produces and sells their own Renewable Meter Adapter (RMA), marketed specifically for residential solar integration.61 SDG&E customers may request this product directly via the utility while customers across other regions must find and purchase approved products individually. A variation on this product is the Tesla Back-up switch, the purpose of which is to facilitate disconnect from the grid for off-grid operation.

Figure 12. Connected DER meter socket adapter
Smart Panels
Smart panels are enhanced circuit breakers – they keep home circuits organized and prevent electrical fires.

However, they differ from traditional electrical panels with the added benefit of energy consumption tracking and control capabilities via a mobile application, ultimately providing resilience services and energy cost savings. 62 Span is a highly ranked full electrical panel that encapsulates these capabilities – however, the panel itself costs $3,500 where the added cost of installation labour sits at around $6,000.63 Cost saving products in this realm include those typically lumped into the smart panel category that are not actually full panels. These are sub-panels that can be attached to existing breaker boxes for enhanced control capabilities. Savant offers modules that can fit into a standard breaker panel and control circuits individually – 59 Home - ConnectDER
60 Check Availability - ConnectDER
61 Renewable Meter Adapter | San Diego Gas & Electric
62 Smart Electrical Panels: What You Should Know | EnergySage 63 SPAN® Panel | Lower your energy bill
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 58 this product can also be controlled via mobile application.64 Before installation, Savant modules cost $120-$240 each.65
Figure 13. Span and Savant Product Examples
AutoDR
Automated Demand Response (AutoDR) is the concept of utility communication with relevant customer enduses. This communication is facilitated by Open Automated Demand Response (OpenADR), an internet messaging protocol already employed by several utilities. To participate in automated demand response programs, customers must have OpenADR certified appliances that can receive communication from the utility.6667 Examples of such appliances include the Rheem HPWHs and Siemens building automation systems.

SmartAC
PG&E offers a SmartAC program in which a SmartAC switch is installed on or near the customer’s AC unit – the switch is activated during events only from May 1st through October 31st. During an event, the customer’s air conditioner compressor cycles on and off in short increments for no longer than six hours, and often just for two hours. This technology enables to utility to reduce demand on the grid during hot summer months when customers use their air conditioning the most. New customers receive a fifty dollar check for participating and device installation plus AC check-up are free of charge.68 EV Telematics Based Managed EV Charging
A telematics device can be described as a sort of “smart computer” within a vehicle that collects key performance and driving pattern data – telematics is ultimately the integration of this device with data processing and management capabilities.69 The data collected by the device, a series of internal sensors, is transmitted to a centralized system which is typically a cloud-based platform. Using telematics can optimize EV charging by 64 Get Savant - Savant
65 The Best Smart Panels 2024 | EnergySage
66 26824_AutoDR_FAQ_Bv4.pdf
67 Auto-DR Express Control Incentives
68 SmartAC™
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 59 informing when the battery needs to be charged and aligning charging and discharging times with TOU rate structures.7071
70 Telematics and EV Fleet Management [Report] – Ampcontrol 71 Set it and Forget it: The Future of EV Charging | SEPA Item 10
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 60 Appendix B – Customer Program Precedents
To further tailor the results of the program precedent research to the city of Palo Alto, the research team dedicated additional time to look for offerings within the state of California, paying close attention to small POUs. The California research included offerings identified through web-based searches for the priority technologies and detailed review of utility websites for a subset of utilities. Detailed research was completed for 100% of California IOUs and 21% of California POUs, Rural Electric Co-ops and Community Choice Aggregators (CCAs). The California exclusive results are summarized in the following table.

Table 24. California Program Inventory Summary
POUs CCAs IOUs
ProgramsPilotsPoliciesProgramsPilotsPoliciesProgramsPilotsPoliciesTOTAL Total 11 3 5 13 4 3 11 2 10 62
Battery 3 1 0 4 2 0 2 0 0 12
Thermal Storage 1 0 0 0 0 0 1 0 0 2
Generator 0 0 0 0 0 0 4 0 0 4
Solar and Storage 1 0 0 3 1 0 0 0 0 5
Managed EV Charging 1 0 0 3 0 0 0 0 1 5
V2X 0 1 0 0 0 0 0 1 0 2
EV TOU Rates 0 0 3 0 0 3 0 0 5 11
Microgrid 0 0 0 0 0 0 2 1 0 3
Resilience Hub 2 0 0 3 1 0 1 0 0 7
Smart Panels 1 0 0 0 0 0 0 0 0 1
Meter Socket Adapters 0 0 2 0 0 0 0 0 4 6
Other 2 1 0 0 0 0 1 0 0 4
While the California analysis still demonstrated many battery offerings, resilience hub offerings and meter socket adapter policies held a significant share of the documented offerings. Alternatively, the quantity of thermal storage program offerings were found to be less prevalent in the state. This however is not indicative of the customers reached by these offerings, as the Self Generation Incentive Program (SGIP) is implemented by four large IOU’s and serves a large volume of customers every year.

Table 24 also breaks down the resilience programs found in California by utility type. This breakdown illustrates where POUs, CCAs and IOUs are dedicating their resources within each technology group. While no dramatic variations were identified, it was found that programs supporting Microgrids were exclusively supported by IOUs, which are predominantly to support communities impacted by outages, public safety power shutoffs, and other natural hazard events driven by climate change. This is likely due to the large financial investment required to support microgrid projects. IOUs were also the only utilities with programs providing incentives for generators.

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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 61 CCAs lead the group for offerings supporting solar and storage and Managed EV Charging. Notably, no IOUs were identified with a Managed EV charging offering.

While POUs, like the City of Palo Alto, appear to be prioritizing Battery programs, there is no strong trend towards any other technology group. The information may indicate that POUs are experimenting with a variety of resilience technologies within their portfolios. To further illustrate the activity of utilities and CCAs similar to CPAU, the research team plotted existing programs among a subset of POUs (represented in blue) and CCAs (represented in green) that the CPAU team identified as “peers”. The results of this exercise are shown in Table 25.

Table 25. CPAU Peers Grid
Peer Utility
BatteryThermal StorageGeneratorSolar and StorageManaged EV ChargingV2XEV TOU RatesMicrogridResilience HubsSmart Panels Meter Socket Adapters (allowed)Demand Response (DR) Roseville Utilities
Redding Electric Utility
Silicon Valley Power ✔ ✔ ✔
Alameda Municipal Power ✔
Turlock Irrigation District
Burbank Water and Power ✔ ✔
Pasadena Water and
Power
Anaheim Public Utilities ✔ ✔
Riverside Public Utilities
Sacramento Municipal
Utility District
✔ ✔ ✔ ✔ ✔
Los Angeles Department
of Water and Power
✔ ✔ ✔ ✔
Silicon Valley Clean Energy ✔ ✔ ✔ ✔
Peninsula Clean Energy ✔ ✔
Ava Community Energy ✔ ✔
Sonoma Clean Power ✔ ✔ ✔
Marin Clean Energy ✔ ✔ ✔ ✔
Central Coast Community
Energy
✔
The precedent research results informed the following program designs:

Battery
The proposed battery program design includes the following three components that can be combined or implemented independently.

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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 62

1. The first component is a residential battery incentive, where participants are paid an upfront $/kWh incentive for enrolling a battery in the program.

2. The second program design component is a residential solar and storage no-interest leasing option. There are two recommended approaches to implementing the leasing model: (1) partnering with a third party to facilitate the system sale and leasing agreement or implementing a feed-in-tariff model where the CPAU pays participant the avoided supply cost for energy and the customer pays a predetermined Power Purchase Agreement (PPA) rate.

3. The third program design component is a commercial battery incentive with the same structure as the residential incentive, but with different $/kWh incentive rates.

For all program design components, customers will be required to set a specified number of discharge events per year, so that the CPAU receives an energy arbitrage benefit. To ensure that CPAU is maximizing supply cost benefits, enrolled batteries cannot only be used for backup power. This program can also be used to increase participation in a DR program by requiring that participants also enroll the battery in the DR program to receive the rebate.

Elements of this program design are well demonstrated among existing utility program portfolios, listed below. • Silicon Valley Power, another California POU, has a residential battery incentive program that exists within their energy efficiency rebate portfolio.72 • The CalChoice Power Choice program provides a free solar and storage installation to participating customers, with the agreement that the customer will then purchase the energy produced by the system. 73
• Green Mountain Power administers a battery program that includes a leasing option where the utility leases the system to the customer for $55/month for 10 years.74 • The Los Angelos Department of Water and Power (LADWP) has a FiT+ Pilot program that employs a Feed-in Tariff model to promote distributed solar installations.75 If cost-justified or if non-ratepayer funds are available, this program can be designed with an equity component by providing higher $/kWh incentive rates for low-income customers. In addition, the leasing option reduces the barriers to entry for low-income customers, because of the eliminated or reduced capital investment. The program design could be modified to only offer the leasing option to customers that meet certain income criteria or reduce the monthly payments for income qualified customers to further expand the equity impact.

This program design could be launched as an independent resilience offering or could be tied into existing program frameworks. The standard upfront incentive component could easily be integrated within the City of Palo Alto’s Electrification Rebate Hub.

Demand Response
72 Rebates | Silicon Valley Power
73 Energy Programs - California Choice Energy Authority 74 Home Energy Storage - Green Mountain Power
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 63 The proposed DR program includes residential and commercial battery components that could be combined or implemented separately. There are two proposed options for how the battery DR program could be structured.

1. The first option includes providing a $/kWh incentive for each kWh discharged to the grid during peak events.

2. The second option includes a monthly flat rate bill credit for participation in peak events.

Demand response is well demonstrated in California and across the country. Many DR programs enroll other devices like smart thermostats to curb demand during peak events. Battery centered DR programs are less common, but still well demonstrated. The program inventory includes 12 different battery DR programs with similar designs to what is proposed. A subset are listed below. • The My Energy Optimizer Partner+ program implemented by Sacramento Municipal Utility District (SMUD) provides a one-time incentive for the enrollment of up to three batteries, in addition to an ongoing quarterly incentive. 76 In return, participants allow SMUD to optimize battery operation by discharging enrolled batteries during peak times. • Marin Clean Energy (MCE) implements an Energy Storage for Facilities program that provides $/kWh performance payments and monthly bill credits to enrolled customers who allow MCE to automatically shift facility demand from the grid to their energy storage system.77 • The City of Anaheim offers a Battery Storage Rebate for customers that agree to enroll in their broader demand response program and TOU rate structure for at least twelve months.78 Demand response programs are typically launched as independent offerings due to their complex design and need for ongoing engagement and incentive payments. However, the battery DR program could be integrated within a broader DR offering that includes smart thermostats, compatible EV chargers, and other technologies.

V2X
The proposed Vehicle to Home and Grid (V2X) program includes both residential and commercial components that could be combined or implemented separately. There are two proposed options for the implementation structure of the program, similar to the options proposed for the DR program.

1. The first option is a performance-based incentive payout where customers will receive a $/kWh incentive for every kWh discharged during peak events.

2. The second option is a monthly flat rate bill credit for participation.

Both options would be combined with an upfront incentive to offset the incremental cost of the bidirectional charger.

V2X programs are not well demonstrated, with only a few existing in today’s market. The V2X programs identified in the program inventory were almost all pilot scale programs. Two examples of V2X pilots with similar design structure are listed below.
76 Battery storage for homeowners
77 Energy Storage for Your Business or Facility
78 Battery Storage | Anaheim, CA - Official Website
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Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 64 • The Vehicle-to-Everything (V2X) pilot run by PG&E includes incentives for commercial and residential customers, with higher incentive rates for customers in DAC. Incentives include a onetime incentive for the purchase of a bi-directional charger, early adopter incentives, a backup power testing incentive (recurring), an interconnection incentive and several end of pilot incentives.79
• The Portland General Electric (PGE) Smart Grid Test Bed pilot includes a collection of pilot programs including a V2X demonstration.80 The V2X demonstration provides a upfront incentive for a bi-directional charger as well as a monthly bill credit for participation.

In addition, two programs were identified through article source links, but could not be found on utility websites, indicating that they may have been cancelled or never developed into a full-scale program. Similarly, information on the PG&E Vehicle to Everything pilot page seems to indicate that there has been very little engagement in the program, with most of the budgeted incentives still available.

If cost-justified or if non-ratepayer funds are available, the proposed program design can be modified to include an equity component by providing higher up-front incentive rates for income qualified customers. Similar incentive structures are used by other V2X pilots in the market, providing higher bidirectional charger incentives for customers located in DACs or that meet income qualifications.

Commercial Thermal Energy Storage
Commercial thermal energy storage programs aim to reduce energy use during peak hours by leveraging stored thermal energy within a phase change material to be used at a later time. Typically, the phase change material is charged during off-peak energy price hours and discharged during peak energy price hours, thus allowing a customer to arbitrage the time-of-use differential for on-bill savings. The phase change material is typically installed in-line with the supply duct system of an HVAC system and charged from the existing compressor.

During a cooling demand within the peak energy price window, the phase change material discharges the stored cooling load, thus alleviating compressor demand to meet the system cooling load without the need for mechanical cooling. The program design includes an upfront incentive based on the size of enrolled equipment.

Customers will receive a set $/kW of demand saved.

This program design is very similar to a commercial thermal energy storage incentive available at the City of Burbank81. The City of Burbank Program provides a $/kW incentive for enrolled commercial air conditioning equipment. Commercial and residential thermal energy storage programs exist across the country but are still relatively uncommon compared to traditional energy efficiency program offerings. This technology can be combined with battery offerings and marketed as an energy storage program such as the Self Generation Incentive Program (SGIP) offered by PG&E, SCE, SoCalGas, and SDG&E82.

Resilience Hub and Microgrid
79 Vehicle to Everything (V2X) Pilot Programs
80 Smart Grid Test Bed | PGE
81 City of Burbank Business Rebates
82 Participating in Self-Generation Incentive Program (SGIP) Item 10
Attachment B - Consultant
Report, “Evaluation of Local
Energy Resources to Lower
Costs and Improve
Reliability and Resiliency”
Item 10: Staff Report Pg. 83 Packet Pg. 614 of 711
Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 65 Programs supporting the design and development of resilience hubs and microgrids are present across the US, particularly in California. Most resilience hub programs use general language outlining the use case and rational hubs for resilience hubs, typically referencing extreme weather events.

A program design may include competitive grant funding, allocated by the utility, for projects related to resilience hubs and microgrids. Projects may include feasibility studies, resilience hub construction or microgrid construction. An additional program design may include utility led project management and execution of a resilience hub or microgrid project. A third program design option may be prescriptive financial support from the utility for specific activities related to the development of resilience hubs or microgrids, such as state/federal grant application development or interconnection expenses.

These types of programs are fairly well demonstrated in California and include a unique equity opportunity.

Projects can be prioritized in DACs or communities with a higher concentration of low-income residents. This ensures that the microgrid or resilience hub is most likely to benefit vulnerable populations. This type of program or project is also accessible to renters who may otherwise be unable to access prescriptive resilience incentives.

Enabling Technologies
Programs supporting individual enabling technologies such as meter socket adapters, smart panels, generators, socket splitters, energy management devices or EV meter adapters are well situated to integrate within existing offerings. One or several of the listed enabling technologies could be incentivized, along with electrification measures or other energy efficiency measures to reduce administrative costs.

Programs providing incentives for the listed enabling technologies are present to a varying degree within the US.

For example, several programs exist that provide incentives for socket splitters or energy management devices but are most often paired with electrification programs. While utilities are increasingly releasing policies or guidance around meter socket adapters, none were found that provide a capital incentive for the installation of the technology. A resilience focused incentive program could have an equity consideration by providing higher incentive rates for income qualified customers.

Managed EV Charging
A residential managed EV charging program provides incentives for participants that program their EVs to charge during off-peak hours. Programs are typically supported by an app that customers download that allows for charging scheduling. Participants are paid incentives for enrollment and receive a monthly bill credit for participation. Some designs may also provide an incentive for a compatible EV charger.

Managed EV charging programs appear to be gaining popularity among California utilities, and also with many CCAs, and are being implemented outside of the state as well. Nearly all managed EV charging programs included in the program inventory leverage the use of an app. This program design is most effective when paired with EV-TOU rates to further incentivize customers to shift charging times.

Item 10
Attachment B - Consultant
Report, “Evaluation of Local
Energy Resources to Lower
Costs and Improve
Reliability and Resiliency”
Item 10: Staff Report Pg. 84 Packet Pg. 615 of 711
Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 66 Appendix C – Supply Cost Valuation Assumptions
Battery Energy Storage System (BESS)
Residential Standalone BESS
Variable Assumption Explanation
Quantity of Installations 100 The population of single-family residences in Palo Alto is 15,371. An installation of 100 units represents 0.65% of the total population implementing this measure.

Nominal BESS Capacity (kWh) 13.2 The assumption aligns with the statewide (Self Generation Incentive Program) rating for a Tesla Powerwall BESS.

Rating is typical for a residential application of similar technology across other manufacturers.

BESS Round-trip Efficiency 90%
This variable represents the percentage of energy that's delivered back to the grid after being stored, compared to the energy put into the system for charging. Lithium-ion batteries have high round-trip efficiencies, often exceeding 90%.

BESS Discharge Duration (hrs) 4
Residential battery energy storage systems typically have discharge durations ranging from 2 to 6 hours at their maximum power output. 4 hours used as an average of the duration potential.

BESS Discharge Start Time 4PM
The CPAU peak demand period is between 4PM and 9PM. The tool assumes the BESS will discharge when consumer energy prices are highest, thus providing the most end-user benefit.

BESS Charge Start Time 9AM The CPAU super off-peak demand period is between 9AM and 3PM. The tool assumes the BESS will charge when consumer energy prices are lowest, thus providing the most end-user benefit.

BESS Depth of Battery Reserve 25%
The depth of discharge (DoD) when discharging is the percentage of the battery's capacity that can be used. This varies by technology, with lithium-ion batteries capable of handling discharges up to 80%. The tool assumes a conservative DoD of 75%, resulting in a battery reserve of 25%.

BESS Estimated Useful Life
(yrs) 20 Typically, useful life for BESS is 10-20 years with proper maintenance, according to TESMAG. The tool assumes the higher end of a typical application, a conservative estimate given proper system maintenance.

Program 1st Year 2026 The tool assumes a Program starting in 2026.

BESS Average Install Cost per
kWh $1,277 The assumption aligns with the average installation cost from Tesla website before incentives and tax credits.

Program Administration Costs $300,000 $150,000 for setup and $30,000 ongoing annual costs for five years of program duration. This assumption is based on estimated staffing costs in Palo Alto and comparable program costs from utilities in California.

Item 10
Attachment B - Consultant Report,
“Evaluation of Local Energy Resources
to Lower Costs and Improve Reliability
and Resiliency”
Item 10: Staff Report Pg. 85 Packet Pg. 616 of 711
Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 67 Residential BESS Coupled with Solar PV (BESS Charged from Grid) Variable Assumption Explanation
Quantity of Installations 100 The population of single-family residences in Palo Alto is 15,371. An installation of 100 units represents 0.65% of the total population implementing this measure.

Nominal Solar PV System Size
(kW-DC) 8.1 Data from EnergySage indicates that the average residential solar PV system size in California for 2023 was 8.1 kW (Solar & Storage Marketplace Report 2023).

Solar PV Annual Degradation
Factor 0.5% A 2021 study by the National Renewable Energy Laboratory (NREL) found that, on average, solar panel output decreases by 0.5% to 0.8% each year.

Solar PV System Installation
Cost per Watt $2.70 Data from EnergySage indicates that the average solar PV system size in California for 2023 has a median cost per watt of $2.70 (Solar & Storage Marketplace Report 2023).

Nominal BESS Capacity (kWh) 13.2 The assumption aligns with the statewide (Self Generation Incentive Program) rating for a Tesla Powerwall BESS.

Rating is typical for a residential application of similar technology across other manufacturers.

BESS Round-trip Efficiency 90% This is the percentage of energy that's delivered back to the grid after being stored, compared to the energy put into the system for charging. Lithium-ion batteries have high round-trip efficiencies, often exceeding 90%.

BESS Discharge Duration
(hours) 4
Residential BESSs typically have discharge durations ranging from 2 to 6 hours at their maximum power output. Four hours is used as an average of the duration potential.

BESS Discharge Start Time 4PM The CPAU peak demand period is between 4PM and 9PM. Assumes the BESS will discharge when consumer energy prices are highest, thus providing the most end-user benefit.

BESS Charge Start Time 9AM The CPAU super off-peak demand period is between 9AM and 3PM. Assumes the BESS will charge when consumer energy prices are lowest, thus providing the most end-user benefit.

BESS Depth of Battery Reserve 25%
The depth of discharge (DoD) when discharging is the percentage of the battery's capacity that can be used. This varies by technology, but lithium-ion batteries are capable of handling discharges up to 80%. The tool assumes a conservate DoD of 75%, resulting in a battery reserve of 25%.

Solar PV & BESS Estimated
Useful Life (years) 20 Typically, useful life for BESS is 10-20 years with proper maintenance, according to TESMAG. The tool assumes the higher end of a typical application, a conservative estimate given proper system maintenance.

Program Administration Costs $300,000 $150,000 for setup and $30,000 ongoing annual costs for five years of program duration. This assumption is based on estimated staffing costs in Palo Alto and comparable program costs from utilities in California.

Item 10
Attachment B - Consultant Report,
“Evaluation of Local Energy Resources
to Lower Costs and Improve Reliability
and Resiliency”
Item 10: Staff Report Pg. 86 Packet Pg. 617 of 711
Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 68 Residential BESS Coupled with Solar PV (BESS Charged from Excess Solar PV) Variable Assumption Explanation
Quantity of Installations 100 The population of single-family residences in Palo Alto is 15,371. An installation of 100 units represents 0.65% of the total population implementing this measure.

Nominal Solar PV System Size
(kW-DC) 8.1 Data from EnergySage indicates that the average residential solar PV system size in California for 2023 was 8.1 kW (Solar & Storage Marketplace Report 2023).

Solar PV Annual Degradation
Factor 0.5% A 2021 study by National Renewable Energy Laboratory found that, on average, solar panel output falls by 0.5% to 0.8% each year.

Solar PV System Installation
Cost per Watt $2.70 Data from EnergySage indicates that the average solar PV system size in California for 2023 has a median cost per watt of $2.70 (Solar & Storage Marketplace Report 2023).

Nominal BESS Capacity (kWh) 13.2 The assumption aligns with the statewide (Self Generation Incentive Program) rating for a Tesla Powerwall BESS.

Rating is typical for a residential application of similar technology across other manufacturers.

BESS Round-trip Efficiency 90%
This variable represents the percentage of energy that's delivered back to the grid after being stored, compared to the energy put into the system for charging. Lithium-ion batteries have high round-trip efficiencies, often exceeding 90%.

BESS Discharge Duration (hrs) 4
Residential battery energy storage systems typically have discharge durations ranging from 2 to 6 hours at their maximum power output. 4 hours used as an average of the duration potential.

BESS Discharge Start Time 4PM The CPAU peak demand period is between 4PM and 9PM. The tool assumes the BESS will discharge when consumer energy prices are highest, thus providing the most end-user benefit.

BESS Charge Start Time 10AM Based on a simulation of solar PV performance, the highest 4-hour period of production is from 10AM-2PM which would be expected to provide the potential for excess PV to charge.

BESS Depth of Battery Reserve 25%
The depth of discharge (DoD) when discharging is the percentage of the battery's capacity that can be used. This varies by technology, with lithium-ion batteries capable of handling discharges up to 80%. The tool assumes a conservate DoD of 75%, resulting in a battery reserve of 25%.

Solar PV & BESS Estimated
Useful Life (yrs) 20 Typically, the useful life of BESS is 15-20 years, but can potentially extend to 30 years with proper maintenance. The tool assumes the higher end of a typical application, a conservative estimate given proper system maintenance.

Program Administration Costs $300,000 $150,000 for setup and $30,000 ongoing annual costs for five years of program duration. This assumption is based on estimated staffing costs in Palo Alto and comparable program costs from utilities in California.

Item 10
Attachment B - Consultant Report,
“Evaluation of Local Energy Resources
to Lower Costs and Improve Reliability
and Resiliency”
Item 10: Staff Report Pg. 87 Packet Pg. 618 of 711
Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 69 Non-Residential Standalone BESS
Variable Assumption Explanation
Quantity of Installations 35 The population of non-residential accounts in Palo Alto is 3,783. An installation of 35 units represents 0.93% of the total population implementing this measure.

Nominal BESS Capacity (kWh) 200
Based on CPAU electric data provided for Commercial, Industrial, Public Facilities, and City owned properties, the weighted average peak demand is estimated as 49.07 kW. Therefore, a four-hour discharge battery would be, on average, sized for approximately 196 kWh (4h X 49.07 kW). The tool assumes a rounded value of 200 kWh.

BESS Round-trip Efficiency 90%
This variable represents the percentage of energy that's delivered back to the grid after being stored, compared to the energy put into the system for charging. Lithium-ion batteries have high round-trip efficiencies, often exceeding 90%.

BESS Discharge Duration (hrs) 4
Battery energy storage systems typically have discharge durations ranging from 2 to 6 hours at their maximum power output. 4 hours used as an average of the duration potential.

BESS Discharge Start Time 4PM
The CPAU peak demand period is between 4PM and 9PM. The tool assumes the BESS will discharge when consumer energy prices are highest, thus providing the most end-user benefit.

BESS Charge Start Time 12AM Energy prices based on the CPAU non-residential TOU structure are the lowest during nighttime hours. The tool assumes the BESS will charge when consumer energy prices are lowest, thus providing the most end-user benefit.

BESS Depth of Battery Reserve 25%
The depth of discharge (DoD) when discharging is the percentage of the battery's capacity that can be used. This varies by technology, with lithium-ion batteries capable of handling discharges up to 80%. The tool assumes a conservate DoD of 75%, resulting in a battery reserve of 25% BESS Estimated Useful Life
(yrs)
20 Typically, the useful life of a BESS is 15-20 years, but can potentially extend to 30 years with proper maintenance. The tool assumes the higher end of a typical application, a conservative estimate given proper system maintenance.

Program 1st Year 2026 The tool assumes a Program starting in 2026.

BESS Average Install Cost per
kWh $1,011 The assumption aligns with average installation cost from a contractor source before incentives and tax credits.

BESS Investment Tax Credit
Available (% of Total System
Cost)
30% The Federal government offers an Investment Tax Credit (ITC) for commercial BESS at 30% of the system's cost. The credit is available for systems placed in service after December 31, 2021, and before January 1, 2033.

Program Administration Costs $300,000 $150,000 for setup and $30,000 ongoing annual costs for five years of program duration. This assumption is based on estimated staffing costs in Palo Alto and comparable program costs from utilities in California.

Item 10
Attachment B - Consultant Report,
“Evaluation of Local Energy Resources
to Lower Costs and Improve Reliability
and Resiliency”
Item 10: Staff Report Pg. 88 Packet Pg. 619 of 711
Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 70 Non-Residential BESS Coupled with Solar PV (BESS Charged from Grid) Variable Assumption Explanation
Quantity of Installations 35
The population of non-residential accounts in Palo Alto is 3,783. An installation of 35 units represents 0.93% of the total population implementing this measure.

Nominal Solar PV System Size (kWDC)
140
Based on CPAU electrical data provided for Commercial, Industrial, Public Facilities, and City owned properties, the average weighted annual usage is approximately 210,000 kWh. A solar PV system sized to meet this load would be approximately 140 kW-DC.

Solar PV Annual Degradation Factor 0.5% A 2021 study by National Renewable Energy Laboratory found that, on average, solar panel output falls by 0.5% to 0.8% each year.

Solar PV System Installation Cost per
Watt
$2.74 The assumption aligns with the average non-residential installation cost from contractors before tax credits.

Nominal BESS Capacity (kWh) 200
Based on CPAU electrical data provided for Commercial, Industrial, Public Facilities, and City owned properties the average peak demand is estimated as 49.07 kW. A four-hour discharge battery would be, on average, sized for approximately 196 kWh (4h X 49.07 kW). The tool assumes a rounded value of 200 kWh.

BESS Round-trip Efficiency 90%
This variable represents the percentage of energy that's delivered back to the grid after being stored, compared to the energy put into the system for charging. Lithium-ion batteries have high round-trip efficiencies, often exceeding 90%.

BESS Discharge Duration (hrs) 4
Battery energy storage systems typically have discharge durations ranging from 2 to 6 hours at their maximum power output. 4 hours used as an average of the duration potential.

BESS Discharge Start Time 4PM
The CPAU peak demand period is between 4PM and 9PM. The tool assumes the BESS will discharge when consumer energy prices are highest, thus providing the most end-user benefit.

BESS Charge Start Time 12AM
Energy prices based on the CPAU non-residential TOU structure are the lowest during nighttime hours. The tool assumes the BESS will charge when consumer energy prices are lowest, thus providing the most end-user benefit.

BESS Depth of Battery Reserve 25%
The depth of discharge (DoD) when discharging is the percentage of the battery's capacity that can be used. This varies by technology, with lithium-ion batteries capable of handling discharges up to 80%. The tool assumes a conservate DoD of 75%, resulting in a battery reserve of 25%.

Solar PV & BESS Estimated Useful Life
(yrs)
20 Typically, the useful life of a Solar PV and BESS is 15-20 years but can potentially extend to 30 years with proper maintenance. The tool assumes the higher end of a typical application, a conservative estimate given proper system maintenance.

Program 1st Year 2026 The tool assumes a Program starting in 2026.

BESS Average Install Cost per kWh $1,011 The assumption aligns with average installation cost from a contractor source before incentives and tax credits.

BESS Investment Tax Credit Available
(% of Total System Cost)
30%
The Federal government offers an Investment Tax Credit (ITC) for commercial BESS at 30% of the system's cost. The credit is available for systems placed in service after December 31, 2021, and before January 1, 2033.

Program Administration Costs $300,000
$150,000 for setup and $30,000 ongoing annual costs for five years of program duration. This assumption is based on estimated staffing costs in Palo Alto and comparable program costs from utilities in California.

Item 10
Attachment B - Consultant Report,
“Evaluation of Local Energy Resources
to Lower Costs and Improve Reliability
and Resiliency”
Item 10: Staff Report Pg. 89 Packet Pg. 620 of 711
Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 71 Non-Residential BESS Coupled with Solar PV (BESS Charged from Excess Solar PV) Variable Assumption Explanation
Quantity of Installations 35
The population of non-residential accounts in Palo Alto is 3,783. An installation of 35 units represents 0.93% of the total population implementing this measure.

Nominal Solar PV System Size (kWDC)
140
Based on CPAU electrical data provided for Commercial, Industrial, Public Facilities, and City owned properties the average weighted annual usage is approximately 210,000 kWh. A solar PV system sized to meet this load would be approximately 140 kW-DC.

Solar PV Annual Degradation Factor 0.5% A 2021 study by National Renewable Energy Laboratory found that, on average, solar panel output falls by 0.5% to 0.8% each year.

Solar PV System Installation Cost per
Watt
$2.74 The assumption aligns with the average non-residential installation cost from contractors before tax credits.

Nominal BESS Capacity (kWh) 200
Based on CPAU electrical data provided for Commercial, Industrial, Public Facilities, and City owned properties the average peak demand is estimated as 49.07 kW. A four-hour discharge battery would be, on average, sized for approximately 196 kWh(4h X 49.07 kW). The tool assumes a rounded value of 200 kWh.

BESS Round-trip Efficiency 90%
This variable represents the percentage of energy that's delivered back to the grid after being stored, compared to the energy put into the system for charging. Lithium-ion batteries have high round-trip efficiencies, often exceeding 90%.

BESS Discharge Duration (hrs) 4
Battery energy storage systems typically have discharge durations ranging from 2 to 6 hours at their maximum power output. 4 hours used as an average of the duration potential.

BESS Discharge Start Time 4PM
The peak demand period is between 4PM and 9PM. The tool assumes the BESS will discharge when consumer energy prices are highest, thus providing the most end-user benefit.

BESS Charge Start Time 10AM
Based on a simulation of solar PV performance, the highest 4-hour period of production is from 10AM-2PM which would be expected to provide the potential for excess PV to charge.

BESS Depth of Battery Reserve 25%
The depth of discharge (DoD) when discharging is the percentage of the battery's capacity that can be used This varies by technology, with lithium-ion batteries capable of handling discharges up to 80%. The tool assumes a conservate DoD of 75% resulting in a battery reserve of 25%.

Solar PV & BESS Estimated Useful Life
(yrs)
20 Typically, useful life of a Solar PV and BESS is 15-20 years, but can potentially extend to 30 years with proper maintenance. The tool assumes the higher end of a typical application, a conservative estimate given proper system maintenance.

Program 1st Year 2026 The tool assumes a Program starting in 2026.

BESS Average Install Cost per kWh $1,011 The assumption aligns with average installation cost from a contractor source before incentives and tax credits.

BESS Investment Tax Credit Available
(% of Total System Cost)
30%
The Federal government offers an Investment Tax Credit (ITC) for commercial BESS at 30% of the system's cost. The credit is available for systems placed in service after December 31, 2021, and before January 1, 2033.

Program Administration Costs $300,000
$150,000 for setup and $30,000 ongoing annual costs for five years of program duration. This assumption is based on estimated staffing costs in Palo Alto and comparable program costs from utilities in California.

Item 10
Attachment B - Consultant Report,
“Evaluation of Local Energy Resources
to Lower Costs and Improve Reliability
and Resiliency”
Item 10: Staff Report Pg. 90 Packet Pg. 621 of 711
Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 72 Demand Response (DR)
Residential DR
Variable Assumption Explanation
Quantity of Participants 250 The population of single-family residences in Palo Alto is 15,371. An enrollment of 250 participants represents 1.63% of the total population participating in the DR curtailment event.

Nominal Curtailment
Commitment (kWh) 6.25
According to the 2019 Residential Appliance Saturation study, a typical residence in California consumes 20-25 kWh of electricity per day. Approximately half of this daily usage, approximately 12.5 kWh, is anticipated to fall within the window of a DR event (4PM-9PM) due to increased HVAC and occupancy demands. A DR event nominal curtailment commitment typically aims to reduce the residence’s load by 50%. Therefore, 6.25 kWh is assumed by the tool.

DR Event Duration (hrs) 5
The peak demand period is generally between 4PM and 9PM (see PG&E) and typically is associated with higher grid strain and would warrant a DR curtailment event. The DR event is assumed to be necessary for the duration of the defined 5-hour period.

DR Event Start Time 4PM The DR period is assumed to start at 4PM and last until 9PM.

Life of Program (yrs) 20
A 20-year horizon was anticipated for a DR program. This type of program would be an ongoing effort and is not limited to specific technology useful life’s as it is a manual curtailment effort. The tool does not consider Auto-DR enabling technologies.

Program 1st Year 2026 The tool assumes a Program starting in 2026.

DR Event Timeframe May-October The tool assumes a similar DR event timeframe to the neighboring PG&E territory, which indicates the potential for the call of DR events for May through October. This period typically coincides with high grid strain.

DR Events per Month 2
In alignment with the neighboring PG&E territory, DR events are assumed to be sporadic and 2 events per month between May and October is assumed.

Program Administration Costs $300,000 $150,000 for setup and $30,000 ongoing annual costs for five years of program duration. This assumption is based on estimated staffing costs in Palo Alto and comparable program costs from utilities in California.

Item 10
Attachment B - Consultant Report,
“Evaluation of Local Energy Resources
to Lower Costs and Improve Reliability
and Resiliency”
Item 10: Staff Report Pg. 91 Packet Pg. 622 of 711
Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 73 Non-Residential DR
Variable Assumption Explanation
Quantity of Participants 75 The population of non-residential customers in Palo Alto is 3,783. An enrollment of 75 participants represents 2.0% of the total population participating in the DR curtailment event.

Nominal Curtailment
Commitment (kWh) 125
Based on CPAU electrical data provided for Commercial, Industrial, Public Facilities, and City owned properties, the average weighted peak demand is approximately 49.07 kW. A DR event nominal curtailment commitment aims to reduce the customer’s load by 50%, or 25 kW in this instance. Over a 5-hour event, that equates to 125 kWh.

DR Event Duration (hrs) 5
The peak demand period isgenerally between 4PM and 9PM (see PG&E) and typically is associated with higher grid strain and would warrant a DR curtailment event. The DR event is assumed to be necessary for the duration of the defined 5-hour period.

DR Even Start Time 4PM The DR period is assumed to start at 4PM and last until 9PM.

Life of Program (yrs) 20
A 20-year horizon was anticipated for a DR program. This type of program would be an ongoing effort and is not limited to specific technology useful life’s as it is a manual curtailment effort. The tool does not consider Auto-DR enabling technologies.

Program 1st Year 2026 The tool assumes a Program starting in 2026.

DR Event Timeframe May-October The tool assumes a similar DR event timeframe to the neighboring PG&E territory, which indicates the potential for the call of DR events for May through October. This period typically coincides with high grid strain.

DR Events per Month 2
In alignment with the neighboring PG&E territory, DR events are assumed to be sporadic and 2 events per month between May and October are assumed.

Program Administration Costs $300,000 $150,000 for setup and $30,000 ongoing annual costs for five years of program duration. This assumption is based on estimated staffing costs in Palo Alto and comparable program costs from utilities in California.

Item 10
Attachment B - Consultant Report,
“Evaluation of Local Energy Resources
to Lower Costs and Improve Reliability
and Resiliency”
Item 10: Staff Report Pg. 92 Packet Pg. 623 of 711
Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 74 Thermal Energy Storage System (TESS)
Non-Residential TESS
Variable Assumption Explanation
Quantity of Installations 35 The population of non-residential accounts in Palo Alto is 3,783. An installation of 35 units represents 0.93% of the total population implementing this measure.

Nominal Cooling Capacity per
Site (tons) 20
Based on CPAU electrical data provided for Commercial, Public Facilities, and City owned properties, the weighted annual energy usage is approximately 168,000 kWh. From the Diversegy Commercial Energy Advisory, a typical commercial building (generalized) consumes approximately 22.5 kWh per square foot per year. Using this metric, a typical non-residential customer in the territory is estimated to be, using a weighted average, approximately 7,500 square feet (excluding industrial applications). An engineering rule of thumb of 400 square feet per ton of cooling is then used to approximate a cooling capacity of 18.75 tons, rounded up to 20 tons for a nominal basis.

Nominal Cooling Efficiency
(kW/ton) 0.980 The Federal standard is an efficiency for packaged/split HVAC systems of 14 Seasonal Energy Efficiency Ratio (SEER), which loosely converts to 12.25 EER or 0.980 kW/ton.

Cooling Season MaySeptember Given the climate zone, cooling demand is expected to be realized at the site from May through September.

TESS Discharge Duration (hrs) 2 From a manufacturer, the phase change material can generally be charged and discharged during a 2-hour period.

TESS Discharge Start Time 4PM
The peak demand period is between 4PM and 9PM. The tool assumes the TESS will discharge when consumer energy prices are highest, thus providing the most end-user benefit.

TESS Charge Start Time 6AM The phase change material is expected to charge in a 2-hour window prior to normal building operation, or from 6AM-8AM.

TESS Estimated Useful Life
(yrs)
15 From the Database of Energy Efficiency Resources (DEER) most HVAC technologies have an estimated useful life of 15 years.

Program 1st Year 2026 The tool assumes a Program starting in 2026.

TESS Average Install Cost per
Cooling Ton $3,000 The assumption aligns with the cost estimate provided by a manufacturer for the installation of the technology.

Program Administration Costs $300,000 $150,000 for setup and $30,000 ongoing annual costs for five years of program duration. This assumption is based on estimated staffing costs in Palo Alto and comparable program costs from utilities in California.

Item 10
Attachment B - Consultant Report,
“Evaluation of Local Energy Resources
to Lower Costs and Improve Reliability
and Resiliency”
Item 10: Staff Report Pg. 93 Packet Pg. 624 of 711
Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 75 Vehicle to Everything (V2X)
Residential V2X
Variable Assumption Explanation
Quantity of Installations 50 The population of single-family residences in Palo Alto is 15,371. An installation of 50 bi-directional chargers represents 0.33% of the total population implementing this technology and charging/discharging strategy.

Nominal Vehicle Capacity
(kWh) 71.4
Based on data provided by the Electric Vehicle Database, the average usable battery capacity of an electric vehicle is

71.4 kWh. The range of the database spans 21.3 kWh -118.0 kWh. A limited number of electric vehicles, such as the Ford Lightning, Nissan Leaf, and Mitsubishi Outlander, are compatible with V2X as of January 2025.

Vehicle Discharge Duration
(hrs) 4
It is assumed that the vehicle would be available for a 4-hour window each day to mitigate energy usage at home throughout the year. However, it should be noted that this would not be a fixed realization, reference “Realization Rate” discussion below.

Vehicle Discharge Start Time 6PM
The peak demand period is between 4PM and 9PM. The tool assumes the vehicle battery will discharge when consumer energy prices are highest, thus providing the most end-user benefit. However, it is assumed that travel from 4PM-6PM could not be avoided, thus the discharge window is assumed to start at 6PM.

Vehicle Charge Start Time 12AM Due to the nature of car use and adjustable schedules, it is assumed that vehicle charging will take place during nighttime hours when the vehicles are stationary and available for charging.

Vehicle Depth of Battery
Reserve
50% A conservative estimate of depleting the battery no more than 50% of rated capacity would be implemented by the end-users to have sufficient reserves for vehicle use as needed throughout the day.

Vehicle Estimated Useful Life
(yrs) 20
A Stanford University study estimates that a typical EV battery has a lifespan of approximately 280,000 miles. From Kelley Blue Book, the average miles driven by a consumer is approximately 13,500 miles per year, yielding an expected useful life of 20 years.

Program 1st Year 2026 The tool assumes a Program starting in 2026.

Bi-Directional Charger Average
Install Cost $4,000 The Department of Energy estimates the incremental cost of a bi-directional charger compared to a conventional EV charger to be approximately $4,000.

Frequency of Vehicle
Charge/Discharge
Daily, YearroundIt is assumed that the charge/discharge cycle could be implemented daily throughout the year, however, would not be consistent. See discussion of “Realization Rate” below.

Realization Rate 15%
To account for the variability of discharging the EV battery to power a residence, a realization rate of 15% was assumed. This means that only 15% of the available capacity (kWh) will be available for discharge due to behavioral variability.

Program Administration Costs $300,000 $150,000 for setup and $30,000 ongoing annual costs for five years of program duration. This assumption is based on estimated staffing costs in Palo Alto and comparable program costs from utilities in California.

Non-Residential V2X
Variable Assumption Explanation
Item 10
Attachment B - Consultant Report,
“Evaluation of Local Energy Resources
to Lower Costs and Improve Reliability
and Resiliency”
Item 10: Staff Report Pg. 94 Packet Pg. 625 of 711
Local Energy Resources to Lower Costs and Improve Reliability and Resiliency 76 Quantity of Installations 50 The population of non-residential accounts in Palo Alto is 3,783. An installation of 50 bi-directional chargers represents 1.32% of the total population implementing this technology and charging/discharging strategy.

Nominal Vehicle Capacity
(kWh) 130
Based on data provided by the Electric Vehicle Database, the average usable battery capacity of an electric vehicle is

71.4 kWh. The range of the database spans 21.3 kWh -118.0 kWh. However, fleet vehicles such as school buses can offer between 130 kWh – 150 kWh.

Vehicle Discharge Duration
(hrs) 4
It is assumed that the vehicle would be available for a 4-hour window each day to mitigate energy usage throughout the year. However, it should be noted that this would not be a fixed realization, reference “Realization Rate” discussion below.

Vehicle Discharge Start Time 6PM
The peak demand period is between 4PM and 9PM. The tool assumes the vehicle battery will be discharged when consumer energy prices are highest, thus providing the most end-user benefit. However, it is assumed that travel from 4PM-6PM could not be avoided, thus the discharge window is assumed to start at 6PM.

Vehicle Charge Start Time 12AM Due to the nature of car use and adjustable schedules, it is assumed that vehicle charging will take place during nighttime hours when the vehicles are stationary and available for charging.

Vehicle Depth of Battery
Reserve
50% A conservative estimate of depleting the battery no more than 50% rated capacity would be implemented by the end-users to have sufficient reserves for vehicle use as needed throughout the day.

Vehicle Estimated Useful Life
(yrs) 20
A Stanford study estimates that a typical EV battery has a lifespan of approximately 280,000 miles. From Kelley Blue Book, the average miles driven by a consumer is approximately 13,500 miles per year, yielding an expected useful life of 20 years.

Program 1st Year 2026 The tool assumes a Program starting in 2026.

Bi-Directional Charger Average
Install Cost $4,000 The Department of Energy estimates the incremental cost of a bi-directional charger compared to a conventional EV charger to be approximately $4,000.

Frequency of Vehicle
Charge/Discharge
Daily, YearroundIt is assumed that the charge/discharge cycle could be implemented daily throughout the year, however, would not be consistent. See discussion of “Realization Rate” below.

Realization Rate 15%
To account for the variability of discharging the EV battery to power a building, a realization rate of 15% was assumed. This means that only 15% of the available capacity (kWh) and participants would coincidentally implement the strategy.

Program Administration Costs $300,000 $150,000 for setup and $30,000 ongoing annual costs for five years of program duration. This assumption is based on estimated staffing costs in Palo Alto and comparable program costs from utilities in California.

Item 10
Attachment B - Consultant Report,
“Evaluation of Local Energy Resources
to Lower Costs and Improve Reliability
and Resiliency”
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City Council
Staff Report
From: City Manager
Report Type: INFORMATION REPORTS
Lead Department: City Clerk
Meeting Date: March 2, 2026
Report #:2602-5925
TITLE
Informational Report for Council: League of California Cities Annual Report 2025

RECOMMENDATION
This is an annual report from the League of California Cities (Cal Cities). Staff recommends the City Council receive this annual report to get more information about the efforts of Cal Cities throughout the year. The report is attached as Attachment A.

ATTACHMENTS
Attachment A: Cal Cities Annual Report 2025
APPROVED BY:

Mahealani Ah Yun, City Clerk
Item A
Item A Staff Report
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Annual Report
2025 Navigating Change
Powering Progress
Item A
Attachment A - Cal Cities
Annual Report 2025
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Message from
the Executive
Director and CEO
Carolyn Coleman
Recovering from devastating wildfires. Balancing budgets in the face of economic uncertainty. Countering misinformation
and polarization. Dealing with immigration
enforcement efforts. Harnessing technology that is rapidly changing city operations. Driving solutions to the housing and homelessness crisis.

This year has tested the resolve and
strength of our communities and our city
leaders. As local leaders, you faced these
challenges with courage, resilience, and
passion for your cities.

And Cal Cities, the organization created
by you, has been with you every step of
the way. Together, we’re navigating the
changing political, social, and economic
realities to power your progress and uplift
your communities.

With over 98% of California cities as members, Cal Cities is the only organization that can genuinely say that it represents
California cities.

Our success lies in the fact that we deliver
results that benefit cities: funding, legislation, resources, legal clarity, and opportunities to learn from and lean on each other.

Our collective achievements would not
have been possible without all of you,
the 2024-25 Cal Cities Officers and Board
members, and the dynamic Cal Cities
staff.

I am honored to present the 2025 Annual
Report, which captures all we accomplished together this year. I am excited for what the future holds.

Carolyn M. Coleman
Executive Director and CEO
League of California Cities
1 League of California Cities
Item A
Attachment A - Cal Cities
Annual Report 2025
Item A: Staff Report Pg. 3 Packet Pg. 629 of 711
Annual Report 2025 2
The Cal Cities 2024-25 Board of Directors
Mission
Vision
To expand and protect local control for cities through education and advocacy to enhance the quality of life for all Californians.

To be recognized and respected as the leading advocate
for the common interests of California’s cities.

Cal Cities is a beacon for collaboration and advocacy. Our unity is our strength. When we speak with one voice — on housing, public safety, infrastructure, fiscal stability, or climate resilience — we amplify the needs of our residents and the hopes of our communities.

Lynne Kennedy, Rancho Cucamonga Mayor Pro Tem
and Cal Cities Board President
Item A
Attachment A - Cal Cities
Annual Report 2025
Item A: Staff Report Pg. 4 Packet Pg. 630 of 711
Who we are
Cal Cities is a member-informed organization powered by the voices of city officials. Together, we elevate Cal Cities as the leading voice for California cities.

We serve
thousands of city officials and staff...
• Mayors and
Council Members
• City Managers
• City Attorneys
• City Clerks
• Fire Chiefs
• Fiscal Officers
• Human Resources
Directors
• Planning
Commissioners
• Police Chiefs
• Public Works
Officers
...and cities of ALL population sizes.

Less than 50K
50K-100K
100K-200K
200K-500K
500K-4M
305 cities
104 cities
51 cities
17 cities
6 cities
3 League of California Cities
Item A
Attachment A - Cal Cities
Annual Report 2025
Item A: Staff Report Pg. 5 Packet Pg. 631 of 711
Mobilizing members to power advocacy
Cal Cities is a powerhouse, member-driven organization that advances the interests of cities in the Legislature, in the courts, and at the ballot box. Grassroots mobilization through our public affairs team is key to advancing those efforts.

State and federal courts play an increasingly outsized role in shaping the laws that affect cities, and city voices are integral to our efforts to further cities’ collective legal interests. Over the last year, Cal Cities filed 30 amicus briefs and letters
in support of cities in state and federal courts.

In the Legislature, Cal Cities sponsored 15 bills
— the most in recent history! Eight of those bills
made it to the Governor’s desk, and six were
signed into law.

City officials traveled from every corner of the
state to testify in Sacramento. Cities sent over
1,300 letters to the Capitol. Regional divisions
hosted forums with lawmakers to highlight how
legislation would impact their communities and
led lobby days that shaped the outcomes of
legislative debates.

All of this helped us advance legislation that will
serve communities throughout California and
stop bills that would harm our cities.

Heather Ferbert, San Diego City Attorney
Local government plays an essential role in shaping the dayto-day lives of Californians. Through Cal Cities, we are able to elevate the legal issues cities are facing, contribute to statewide policy, and help shape effective, practical solutions. I’m grateful for the chance to support that work and strengthen the legal tools that help cities protect and serve their communities.

Annual Report 2025 4
Item A
Attachment A - Cal Cities
Annual Report 2025
Item A: Staff Report Pg. 6 Packet Pg. 632 of 711
Local Revenues
In a time of significant state and national fiscal uncertainty, we must fight more than ever to protect local revenues. This year, we sponsored a bill that
would crack down on illegal short-term rentals
and enable cities to capture the millions of tax
dollars left uncollected each year. Deep-pocketed corporations pushed back with a robust disinformation campaign, but ultimately, SB 346
(Durazo) sailed through the Legislature with bipartisan support before being signed into law.

Homelessness
Cal Cities has long urged state leaders to provide ongoing, reliable homelessness funding.

But in June, the state zeroed out the biggest
homeless prevention grant program for the
fiscal year and set aside half of the normal
amount in the next budget. Cal Cities fought
back to prevent any interruption in services,
despite the significant funding cuts. We also
forced changes to SB 634 (Perez), which threatened cities’ ability to address encampments.

After overwhelming opposition from nearly 100
cities, the measure was significantly amended
to address our concerns.

Housing
Over 180 cities joined Cal Cities in the fight
against SB 79 (Wiener), a measure that gives transit agencies unprecedented land use authority while disregarding local zoning and state-certified
housing elements. The groundswell of opposition
resulted in the bill being amended 13 times, significantly narrowing its impact before becoming law. Cal Cities also channeled long-simmering
frustrations from city officials about the timeliness,
consistency, and fairness of the state’s housing
element approval process and sponsored AB
650 (Papan). The common-sense bill would have
made it easier for cities to plan for homes faster
and more effectively. Although it received unanimous bipartisan support, the Governor vetoed it based on cost concerns.

Climate change
The climate crisis is affecting cities’ core functions: infrastructure, public safety, and housing.

To respond to these impacts, cities need resources and a strong partnership with the state. This year, Cal Cities and a broad coalition secured
an extension of the Cap-and-Trade program,
which invests millions of dollars into communities
to help meet the state’s climate goals. Cal Cities
fought to ensure that the program continues to
fund city priorities and includes specific funding
for affordable housing and wildfire resilience.

Legislative highlights
5 League of California Cities
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Annual Report 2025
Item A: Staff Report Pg. 7 Packet Pg. 633 of 711
For a decade, cities have struggled with the lack of accountability and transparency over recovery housing facilities. Despite efforts by Cal Cities, the Legislature refused to act — until recently. Thanks in part to strong engagement from Orange County Division city officials, Cal Cities successfully pushed through two new laws, AB 492 (Valencia) and AB 424 (Davies), that will bring much-needed oversight to recovery housing facilities. City leaders traveled to the Capitol to testify in favor of the Cal Cities-sponsored bills and joined Cal Cities for a press conference alongside lawmakers calling for reforms.

Recovery housing reforms bring transparency
and accountability
The political heft of the League of California Cities has helped push the reform agenda forward this session.”
Columnist Teri Sforza, writing for the Orange County Register Other legislative achievements
Recent changes to state licensing requirements were stalling city efforts to commission murals. Cal Cities sprang into action and built a coalition with city officials and
artists to secure much-needed reform. The
new law, SB 456 (Ashby), provides a narrow
exemption to state licensing requirements,
making it easier for cities to commission local artists and uplift their communities.

Annual Report 2025 6
Item A
Attachment A - Cal Cities
Annual Report 2025
Item A: Staff Report Pg. 8 Packet Pg. 634 of 711
City officials connecting and learning together
The Cal Cities Annual Conference and Expo
had its highest attendance in 20 years, as over
2,300 city officials, partners, sponsors, and vendors came together for three days to explore solutions to city issues, learn from each other,
and celebrate achievements.

Five of Cal Cities’ department conferences
sold out in 2025, a strong indicator of just how
much city officials value coming together with
colleagues from throughout the state.

The City Leaders Summit saw a record number
of city officials come together in Sacramento.

Cal Cities led delegations of city officials to
meet with all 120 legislative offices, celebrated
California Cities Week, and held a rally and
press event on the Capitol lawn calling attention to city priorities in the state budget. City officials also explored local solutions to statewide problems through educational sessions.

As a young, Latina/AAPI, woman who started as a
councilmember and now, mayor, and being the first in many aspects, I was met with empowerment by Cal Cities. It empowers elected officials to advocate and share their experiences to create better cities and a stronger voice at the state level.

Rachel Hernandez, Riverbank Mayor
7 League of California Cities
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Attachment A - Cal Cities
Annual Report 2025
Item A: Staff Report Pg. 9 Packet Pg. 635 of 711
Cal Cities builds community
The diversity caucuses strengthen Cal Cities'
role as the leading advocate for city interests.

The caucuses provide crucial support for
Cal Cities members from our state's diverse
demographic groups and make meaningful
connections with historically underrepresented
communities throughout California.

Jeffrey Koji Maloney, Alhambra Vice Mayor
CCLI celebrates
20 years!
Cal Cities’ California Civic Leadership Institute celebrated its 20th anniversary in 2025, marking two
decades of helping local government officials prepare for the state Legislature.

Established in 2005, CCLI helps
ready local leaders for statewide campaigns, strengthens Cal Cities' relationships with
future legislators, and builds
connections among California’s
political leaders.

An impressive list of 54 alumni
went on to serve in higher office:
• U.S. Senator Alex Padilla
• California Attorney General
Rob Bonta
• California State Treasurer
Fiona Ma
• California State
Superintendent of Public
Education Tony Thurmond
• 14 California Assembly
Members
• 11 California Senate Members
• Two California Congressional
Members
Cal Cities serves as a convener — meeting officials where they are and connecting them to resources and, more importantly, each other. This year, more than 15,000 city officials participated in a Cal Cities conference, webinar, division event, or roundtable to share ideas, hear from experts, and learn from each other.

Cal Cities’ five diversity caucuses and 10 municipal departments also bring together city leaders to advance shared solutions and connect with peers who share similar concerns. This year, diversity caucuses sponsored several panels at Cal Cities’ conferences, as well as virtual and in-person events on a wide range of issues to help educate city officials. In addition, thousands of city officials participated in member-driven department and issue-based roundtables, providing members with a safe space to learn from their peers on issues as diverse as wildfire preparedness, Brown Act reforms, federal immigration enforcement efforts, and supporting groups impacted by hate crimes.

New this year, Cal Cities launched the Veterans and Military City Officials member group. These local leaders have dynamic perspectives, shaped by their service to our country. This dedicated group is another Cal Cities opportunity for members to connect and collaborate.

Annual Report 2025 8
Item A
Attachment A - Cal Cities
Annual Report 2025
Item A: Staff Report Pg. 10 Packet Pg. 636 of 711
Cal Cities elevates city voices to influence
statewide conversations
As the nation’s media landscape becomes
more fractured, local officials and city issues
must be at the forefront of conversations between lawmakers, the media, and the public.

That’s why in 2025, Cal Cities made a concerted effort to strengthen relationships with the media and increase its online visibility.

As a result, Cal Cities and the voices of cities
were featured in several regional publications and prominent national and statewide Cal Cities empowers local leaders to turn challenges into opportunities for communities across California. As a city manager, I’ve seen how Cal Cities amplifies our collective voice and delivers results. Together, we’re shaping a stronger, more inclusive California.

LaTanya Bellow, Emeryville City Manager and Cal Cities Board Member media outlets, including the Associated Press,
CalMatters, Los Angeles Times, Politico, and
San Francisco Chronicle.

Strong media coverage helped get one major
measure across the finish line and significantly altered another one. Cal Cities worked with an LA city official to place an op-ed urging lawmakers
to pass SB 346 (Durazo), a bill that makes it easier
for cities to enforce short-term rental ordinances
and receive transient occupancy taxes. It also
9 League of California Cities
Item A
Attachment A - Cal Cities
Annual Report 2025
Item A: Staff Report Pg. 11 Packet Pg. 637 of 711
At the end of the day, local
government is where the
rubber really meets the road…
Local government is where
government is connected to
the people, and celebrating
the work of our cities that are
tackling the big issues, from
housing to homelessness to
climate change, is so important.

Assembly Member Nick Schultz
worked with two other city officials to pen an
op-ed urging caution when ceding local land
use authority. Although the Governor signed SB
79 into law, he did so only after bruising committee fights and dozens of rounds of changes.

Also central to Cal Cities’ advocacy wins is
#LocalWorks, which highlights how cities are
meeting today’s challenges head-on. These 26
stories appeared in Western City magazine and
Cal Cities Advocate — the weekly newsletter —
as well as in advocacy materials to lawmakers.

When the state says cities aren’t doing enough,
we say, “Yes, we are: Here's how.”
At no time during the year was our visibility higher than during California Cities Week in April, when hundreds of city officials converged on
the Capitol. Lawmakers heard from city officials
and recognized the many ways California’s
diverse cities make life better for all.

We are grateful to Cal Cities for its steadfast commitment to protecting local control and amplifying the voices of smaller cities. Cal Cities empowers Paramount and other cities to shape policies that reflect our local needs while working together to strengthen the foundation of local governance statewide.

Peggy Lemons, Paramount Mayor
Annual Report 2025 10
Item A
Attachment A - Cal Cities
Annual Report 2025
Item A: Staff Report Pg. 12 Packet Pg. 638 of 711
The Cal Cities team
Supported by a staff of over 70, Cal Cities is the leading advocate and premier educational resource for California cities and their leaders. 1400 K Street, Suite 400, Sacramento, CA 95814
916.658.8200
www.calcities.org
Follow us!

OFFICERS
Lynne Kennedy, Mayor Pro Tem, Rancho Cucamonga, President Gabe Quinto, Mayor Pro Tem, El Cerrito, First Vice President Teresa Acosta, Council Member, Carlsbad, Second Vice President Daniel Parra, Council Member, Fowler, Immediate Past President Carolyn M. Coleman, Executive Director and CEO

DIRECTORS
Ashleigh Aitken, Mayor, Anaheim, Large City
Paul Akinjo, Mayor, Lathrop, Central Valley Division
Walter Allen III, Council Member, Covina, At-Large
Jan Arbuckle, Council Member, Grass Valley, Mayors and Council Members Department
Karen Bass, Los Angeles, Large City
Scott Bauer, Council Member, Eureka, Redwood Empire Division LaTanya Bellow, City Manager, Emeryville, Personnel and Employee Relations Department
Priya Bhat-Patel, Mayor Pro Tem, Carlsbad, Women’s Caucus James Bozajian, Mayor Pro Tem, Calabasas, Los Angeles
County Division
Ulises Cabrera, Mayor, Moreno Valley, Latino Caucus
Michael Cao, Mayor, Arcadia, At-Large
Andrew Chou, Council Member, Diamond Bar, At-Large
David Cohen, Council Member, San Jose, Large City Representative Karen Comstock, Council Member, Chino, Inland Empire Division Christine Dietrick, City Attorney, San Luis Obispo, City Attorneys Department
Alice Dowdin Calvillo, Council Member, Auburn, Sacramento Valley Division
Jerry Dyer, Mayor, Fresno, Large City
Marilyn Ezzy Ashcraft, Mayor, Alameda, East Bay Division Neysa Fligor, Vice Mayor, Los Altos, At-Large
Todd Gloria, Mayor, San Diego, Large City
Karen Goh, Mayor, Bakersfield, Large City
Renee Golder, Council Member, Santa Cruz, Monterey Bay Division Rene Guerrero, Assistant Director of Public Works, Ontario, Public Works Department
Alexander Hamilton, Fire Chief, Oxnard, Fire Chiefs Department Alma Hernandez, Mayor, Suisun City, North Bay Division
Britt Huff, Council Member, Rolling Hills Estates, At-Large Randi Johl, Legislative Director/City Clerk, Temecula,
City Clerks Department
Ellen Kamei, Mayor, Mountain View, Peninsula Division
Jim Lewis, City Manager, Atascadero, City Managers Department César Macias, Special Assistant to Mayor, Oakland, Large City Representative
Jeffrey Maloney, Council Member, Alhambra, API Caucus
Caity Maple, Council Member, Sacramento, Large City Representative Ray Marquez, Council Member, Chino Hills, At-Large
Yvonne Martinez Beltran, Council Member, Morgan Hill, At-Large Rudy Mendoza, Mayor, Woodlake, At-Large
John Minto, Mayor, Santee, San Diego County Division
Eric Nelson, Planning Commissioner, Dana Point, Planning and Community Development Department
Ida Obeso-Martinez, Mayor Pro Tem, Imperial, Imperial County Division Ian Oglesby, Mayor, Seaside, African American Caucus
Jaime Patino, Council Member, Union City, At-Large
Randall Putz, Council Member, Big Bear Lake, Desert Mountain Division Ana Maria Quintana, Council Member, Bell, At-Large
Roberta Raper, Dir of Finance & Technology, West Sacramento, Fiscal Officers Department
Dana Reed, Mayor Pro Tem, Indian Wells, Riverside County Division Rex Richardson, Mayor, Long Beach, Large City
David Sander, Council Member, Rancho Cordova, NLC
Cindy Silva, Council Member, Walnut Creek, At-Large
Jeff Smith, Police Chief, Pismo Beach, Police Chiefs Department Erica A. Stewart, Mayor, San Luis Obispo, Channel Counties Division Ali Sajjad Taj, Mayor, Artesia, At-Large
John Taylor, Council Member, San Juan Capistrano, Orange County Division
Kuldip Thusu, Council Member, Dinuba, South San Joaquin Valley Division
Tyller Williamson, Mayor, Monterey, LGBTQ Caucus
The Cal Cities Board of Directors
Item A
Attachment A - Cal Cities
Annual Report 2025
Item A: Staff Report Pg. 13 Packet Pg. 639 of 711
City Council
Staff Report
From: City Manager
Report Type: INFORMATION REPORTS
Lead Department: Administrative Services
Meeting Date: March 2, 2026
Report #:2512-5668
TITLE
Sales Tax Digest Q3 2025 (Jul-Sept)

ANALYSIS
This report transmits information regarding the City of Palo Alto’s sales tax receipts for the third quarter (July - September) of 2025. Highlights from the report are included below. Detailed discussion and data can be found in the Sales Tax Digest (Attachment A).

Regional and statewide sales tax - adjusted benchmark year (Attachment A, p. 2):
• Palo Alto: decreased by 6.4%
• San Francisco Bay Area: decreased by 1.6%
• California statewide: decreased by 1.7%
Benchmark year comparisons reflect a rolling four-quarter view of economic activity, adjusted to exclude non-period-related payments.

City’s most significant activity – quarterly year-over-year comparison (Attachment A, p. 1):
• Business to Business – Leasing: decreased by 89.1%; represents 2.1% of total sales tax • Transportation – New autos: decreased by 5.5%; represents 14.7% of total sales tax These two segments account for over 15% of Palo Alto’s total sales tax for the period and were the primary drivers of the overall decline.

County Pool - quarterly year-over-year comparison (Attachment A, p. 4) • City share: decreased from 5.9% to 5.6%, or 30 basis points. • Total County pool: increased $0.2 million, from $1.4 million to $1.6 million Over the most recent four quarters, the City received approximately $6.8 million from the County Pool, representing about 19% of the City’s total sales tax revenue of $34.1 million during that period.

Item B
Item B Staff Report
Item B: Staff Report Pg. 1 Packet Pg. 640 of 711

ATTACHMENTS
Attachment A: 2025 Q3 Sales Tax Digest Summary
APPROVED BY:

Lauren Lai, Administrative Services Director
Item B
Item B Staff Report
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City of Palo Alto
Sales Tax Digest Summary
Collections through December 2025
Sales July through September 2025 (2025Q3)
neumo.com (800) 800-8181 Page 1
California Overview
For the year ending in the third quarter of 2025, cash receipts increased 2.1% statewide and S.F. Bay Area increased 3.8% in the same period. However, when adjusted for non-period-related payments, the overall economic sales tax activity for the year ending in the third quarter of 2025 decreased by 1.7% statewide and decreased by 1.6% in S.F. Bay Area.

City of Palo Alto
For the year ending in the third quarter of 2025, sales tax cash receipts for the city decreased by 2.2% from the prior year. However, when adjusted for non-period related payments, the overall economic sales tax activity in Palo Alto for the year ending in the third quarter of 2025 decreased by 6.4%. The decrease in Palo Alto's sales tax revenue was primarily driven by the leasing and new auto sales sectors. On an economic basis, leasing sales tax revenue decreased by 58.0%, representing 8.7% of the city's total sales tax for the year ending in the third quarter of 2025. New auto sales decreased by 29.4% over the same period, contributing 11.6% to the total sales tax revenue for the same period.

Same quarter sales tax cash receipts increased by 4.5% in California from Q3 2024 to Q3 2025. Palo Alto citywide sales tax cash receipts decreased by 0.7% over the Q3 2024 to Q3 2025 period. In addition to negative misallocations in Q3 2024, it should be noted that the primary reason for the 0.7% decrease this quarter was due to a significant decrease in cash related activities in the current period. Consequently, on an economic basis (actual sales activity solely during the Q3 quarter) there was a 5.2% decline. The key reasons for the Palo Alto economic decrease this period were due to significant declines in two segments:
the leasing segment, which decreased by 89.1% or $1,157,953 in sales tax from Q3 2024, and the new auto sales segment decreased by 5.5%, which comprises 14.7% of the total sales tax for the city. According to the California New Car Dealers Association (CNCDA), California’s new light vehicle registrations increased by 5.3% in 2025Q3. Lastly, increases for restaurants (19.6%) and miscellaneous related items (44.0%) partially mitigated the decreases for leasing and new auto sales.

ATTACHMENT A
Item B
Attachment A - 2025 Q3
Sales Tax Digest Summary
Item B: Staff Report Pg. 3 Packet Pg. 642 of 711
City of Palo Alto
neumo.com (800) 800-8181 Page 2
% of Total / % Change Palo Alto California
Statewide S.F. Bay Area
Sacramento
Valley Central Valley South Coast Inland Empire North Coast General Retail 31.9 / 13.9 29.2 / 0.1 23.1 / -2.4 31.0 / 7.0 38.6 / -6.0 27.8 / 1.2 36.5 / 2.6 27.9 / -0.5 Food Products 21.1 / 7.4 22.1 / -0.2 24.6 / 1.7 17.4 / -2.4 15.2 / -4.6 23.9 / -0.2 18.4 / 1.0 19.5 / 0.3 Transportation 15.4 / -25.0 22.0 / -5.4 19.0 / -4.2 25.6 / -7.2 21.2 / -8.4 22.5 / -5.1 22.1 / -3.1 27.5 / -5.2 Business to Business 24.8 / -26.9 16.0 / -1.7 21.6 / -3.3 13.5 / -9.4 14.8 / -5.0 15.9 / 0.6 10.4 / -1.8 10.3 / -2.8 Misc/Other 6.9 / 42.9 10.7 / -1.9 11.7 / 1.3 12.5 / -11.0 10.2 / -5.6 10.0 / -0.4 12.6 / -2.4 14.8 / -7.1 Total 100.0 / -6.4 100.0 / -1.7 100.0 / -1.6 100.0 / -3.3 100.0 / -6.1 100.0 / -0.9 100.0 / -0.1 100.0 / -2.9 Palo Alto California
Statewide S.F. Bay Area
Sacramento
Valley Central Valley South Coast Inland Empire North Coast Largest Segment Restaurants Restaurants Restaurants
Miscellaneous
Retail
Miscellaneous
Retail Restaurants
Miscellaneous
Retail Restaurants
% of Total / % Change 19.2 / 8.1 16.2 / 0.5 18.6 / 2.7 13.8 / 19.7 18.4 / 1.1 17.9 / 0.5 19.4 / 4.9 12.8 / 2.1 2nd Largest Segment Auto Sales -
New
Miscellaneous
Retail
Auto Sales -
New
Restaurants Department
Stores
Auto Sales -
New
Restaurants Department
Stores
% of Total / % Change 11.6 / -29.4 11.8 / 7.7 9.1 / -4.8 12.1 / -1.2 11.0 / -4.5 11.6 / -2.5 12.2 / 2.6 11.4 / -2.4 3rd Largest Segment Miscellaneous
Retail
Auto Sales -
New
Miscellaneous
Retail
Auto Sales -
New
Restaurants
Miscellaneous
Retail
Auto Sales -
New
Auto Sales -
New
% of Total / % Change 9.6 / 28.3 10.8 / -2.0 7.6 / 12.1 11.7 / 1.6 10.1 / -6.4 10.2 / 8.5 10.8 / 2.1 11.0 / -0.3 ECONOMIC CATEGORY ANALYSIS FOR YEAR ENDED 3rd Quarter 2025 ECONOMIC SEGMENT ANALYSIS FOR YEAR ENDED 3rd Quarter 2025 Regional Overview
The chart on page two shows adjusted economic benchmark year amounts, which shows the year ended third quarter of 2025 compared to the year ended third quarter of 2024 (benchmark years are rolling annual comparisons through the current quarter). The divergence in growth rates between California and Palo Alto is attributed to the stronger overall performance of sales tax generating businesses statewide compared to those operating in Palo Alto.

Regional Overview Chart (Economic)
BENCHMARK YEAR 2025Q3 COMPARED TO BENCHMARK YEAR 2024Q3

ATTACHMENT A
Item B
Attachment A - 2025 Q3
Sales Tax Digest Summary
Item B: Staff Report Pg. 4 Packet Pg. 643 of 711
City of Palo Alto
neumo.com (800) 800-8181 Page 3
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
Quarterly Benchmark Year
Leasing

8.7%
Restaurants

19.2%
Auto Sales - New

11.7%
Office Equipment

7.6%
Apparel Stores

7.8%
All Other

45.0%
Net Pools & Adjustments

23.3%
Gross Historical Sales Tax Cash Receipts by Benchmark Year and Quarter (Before Adjustments) Net Cash Receipts for Benchmark Year Third Quarter 2025: $34,128,948 *Benchmark year (BMY) is the sum of the current and 3 previous quarters (2025Q3 BMY is sum of 2025 Q3, 2025 Q2, 2025 Q1, 2024 Q4)

ATTACHMENT A
Item B
Attachment A - 2025 Q3
Sales Tax Digest Summary
Item B: Staff Report Pg. 5 Packet Pg. 644 of 711
City of Palo Alto
neumo.com (800) 800-8181 Page 4
2022Q4 2023Q1 2023Q2 2023Q3 2023Q4 2024Q1 2024Q2 2024Q3 2024Q4 2025Q1 2025Q2 2025Q3 Quarter
Over
Quarter
Total County Pool 29,548,556 24,937,663 27,690,772 22,345,960 24,427,230 25,411,165 25,387,888 23,265,567 31,312,972 27,268,380 27,503,817 28,287,141 21.6% Jurisdiction Share 1,817,421 1,499,631 1,755,562 1,489,193 1,638,965 1,523,986 1,611,681 1,377,891 1,834,044 1,673,551 1,685,234 1,595,260 15.8% Jurisdiction % of Total 6.2% 6.0% 6.3% 6.7% 6.7% 6.0% 6.3% 5.9% 5.9% 6.1% 6.1% 5.6% Anderson Honda Magnussen's Toyota Stanford Health Care
Apple Stores Neiman Marcus Tesla
Arco AM/PM Mini Marts Nordstrom Department Store Tesla Lease Trust Audi Palo Alto Restoration Hardware Tiffany & Company
Bloomingdale's Richemont Union 76 Service Stations
Hermes Sephora Varian Medical Systems
HP Enterprise Services Shell Service Stations Volvo Cars Palo Alto Louis Vuitton Shreve & Co. Wilkes Bashford
Macy's Department Store
County Pool Results
The California sales tax system is known as a "sales and use tax" system. County Pool revenues primarily reflect the use tax generated from transactions that do not involve a physical point of sale within California. Businesses report their use tax quarterly, based on activity conducted throughout the county.

The County Pool is distributed each quarter based on a proportional formula. A jurisdiction's quarterly percentage is determined by dividing its total gross sales tax receipts for the quarter by the total gross sales tax receipts of all jurisdictions within the county. Consequently, if Palo Alto's gross sales tax receipts increase relative to the rest of the county during a quarter, the city's share of the total County Pool will also increase. This quarterly percentage is multiplied by the total countywide pool to determine the jurisdiction's quarterly County pool revenue.

In the third quarter of 2025, cash receipts for the overall County Pool increased by 21.6% from the same quarter in the prior year. The City’s share of the Countywide Pool decreased to 5.6%. The City’s revenues from the County Pool increased from $1,377,891 in 2024Q3 to $1,595,260 in 2025Q3.

TOP 25 SALES/USE TAX CONTRIBUTORS
The following list identifies Palo Alto’s Top 25 Sales/Use Tax contributors. The list is in alphabetical order and represents the year ended in the third quarter of 2025. The Top 25 Sales/Use Tax contributors generate 52.8% of Palo Alto’s total sales and use tax revenue.

ATTACHMENT A
Item B
Attachment A - 2025 Q3
Sales Tax Digest Summary
Item B: Staff Report Pg. 6 Packet Pg. 645 of 711
City of Palo Alto
neumo.com (800) 800-8181 Page 5
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
Benchmark Year 2025Q3 Benchmark Year 2024Q3
Sales Tax from Largest Non-Confidential Sales Tax Segments (Economic)

ATTACHMENT A
Item B
Attachment A - 2025 Q3
Sales Tax Digest Summary
Item B: Staff Report Pg. 7 Packet Pg. 646 of 711
City of Palo Alto
neumo.com (800) 800-8181 Page 6
Economic Category % 2025Q3 2025Q2 2025Q1 2024Q4 2024Q3 2024Q2 2024Q1 2023Q4 2023Q3 2023Q2 2023Q1 Business To Business 17.9% 1,446,306 1,829,261 2,584,832 2,352,638 2,228,773 2,366,493 2,149,237 2,343,293 2,943,907 2,683,293 2,135,883 Miscellaneous/Other 21.5% 1,731,803 1,504,679 1,542,138 1,284,493 1,682,849 1,595,196 1,951,428 1,870,170 1,546,096 1,302,322 1,517,005 General Retail 26.4% 2,128,953 2,096,092 1,813,504 2,466,315 1,828,014 2,044,006 1,739,261 2,315,882 1,834,297 2,017,885 1,640,927 Food Products 18.1% 1,458,554 1,514,585 1,396,065 1,448,644 1,349,524 1,394,270 1,288,207 1,348,051 1,277,173 1,349,926 1,195,458 Subtotal Economic (Local Business) 83.9% 6,765,615 6,944,617 7,336,539 7,552,090 7,089,160 7,399,964 7,128,134 7,877,395 7,601,473 7,353,426 6,489,274 Net Pools & Adjustments 16.1% 1,302,731 1,856,667 633,409 1,737,280 1,033,269 1,359,165 1,143,798 1,867,172 1,986,175 2,084,763 1,586,938 Total Cash Receipts 100.0% 8,068,346 8,801,284 7,969,948 9,289,370 8,122,429 8,759,129 8,271,932 9,744,567 9,587,647 9,438,189 8,076,212 Economic Segment % 2025Q3 2025Q2 2025Q1 2024Q4 2024Q3 2024Q2 2024Q1 2023Q4 2023Q3 2023Q2 2023Q1 Miscellaneous/Other 37.6% 3,034,581 3,294,198 4,175,255 3,939,826 4,070,462 4,102,841 4,114,784 4,409,850 4,635,983 4,197,978 3,818,384 Restaurants 16.5% 1,328,254 1,376,526 1,268,403 1,307,103 1,222,917 1,259,885 1,162,863 1,214,598 1,154,189 1,214,502 1,073,621 Miscellaneous Retail 8.1% 652,655 602,137 529,255 717,726 512,154 582,600 489,040 689,939 480,649 512,077 448,322 Apparel Stores 6.4% 517,728 534,216 455,466 633,554 480,138 531,926 440,402 586,863 478,973 509,894 423,470 Department Stores 5.9% 472,934 503,087 406,470 570,391 432,925 501,499 411,345 549,893 435,388 492,374 356,626 Service Stations 2.3% 183,776 183,941 187,356 187,487 201,591 226,411 198,584 214,900 229,911 222,029 192,723 Food Markets 1.4% 109,640 118,511 107,424 117,774 111,242 114,071 107,031 112,372 103,251 111,465 101,978 Business Services 5.8% 466,047 332,000 206,909 78,229 57,730 80,732 204,085 98,980 83,130 93,106 74,150 Subtotal Economic (Local Business) 83.9% 6,765,615 6,944,617 7,336,539 7,552,090 7,089,160 7,399,964 7,128,134 7,877,395 7,601,473 7,353,426 6,489,274 Net Pools & Adjustments 16.1% 1,302,731 1,856,667 633,409 1,737,280 1,033,269 1,359,165 1,143,798 1,867,172 1,986,175 2,084,763 1,586,938 Total Cash Receipts 100.0% 8,068,346 8,801,284 7,969,948 9,289,370 8,122,429 8,759,129 8,271,932 9,744,567 9,587,647 9,438,189 8,076,212 Historical Analysis by Calendar Quarter
The chart above shows the categories and segments in quarterly economic-based amounts. The total amount is the net cash receipts, and it was obtained by adding up the categories/segments with the “Net Pools & Adjustments” amount.

ATTACHMENT A
Item B
Attachment A - 2025 Q3 Sales Tax
Digest Summary
Item B: Staff Report Pg. 8 Packet Pg. 647 of 711
City of Palo Alto
neumo.com (800) 800-8181 Page 7
Economic Category % 2025Q3 2024Q3 2023Q3 2022Q3 2021Q3 2020Q3 2019Q3 2018Q3 2017Q3 2016Q3 Business To Business 20.1% 6,869,015 9,399,855 10,689,186 8,678,935 7,083,644 8,170,476 8,199,747 6,134,751 5,533,774 5,274,809 Miscellaneous/Other 17.9% 6,105,927 6,980,799 6,236,815 6,732,776 6,508,799 5,535,588 8,214,058 7,119,237 6,064,700 6,214,339 General Retail 26.0% 8,856,515 7,775,757 7,714,150 7,714,757 6,207,000 5,183,848 7,805,483 8,440,417 8,410,442 8,066,588 Food Products 17.2% 5,854,499 5,449,905 5,127,830 4,647,611 3,235,060 3,389,571 4,918,993 4,804,294 4,641,731 4,623,265 Subtotal Economic (Local Business) 81.1% 27,685,956 29,606,316 29,767,980 27,774,079 23,034,503 22,279,484 29,138,281 26,498,699 24,650,648 24,179,001 Net Pools & Adjustments 18.9% 6,442,992 5,291,740 6,923,156 5,676,052 5,340,914 5,578,666 5,788,719 5,471,637 4,896,415 4,110,008 Total 100.0% 34,128,948 34,898,056 36,691,136 33,450,131 28,375,417 27,858,150 34,927,000 31,970,336 29,547,063 28,289,009

Economic Segment % 2025Q3 2024Q3 2023Q3 2022Q3 2021Q3 2020Q3 2019Q3 2018Q3 2017Q3 2016Q3 Miscellaneous/Other 0.0% 12,927,875 12,448,262
Restaurants 15.6% 5,321,832 4,924,771 4,604,551 4,131,263 2,792,862 2,909,068 4,342,670 4,202,201 4,040,236 4,021,805 Miscellaneous Retail 7.8% 2,660,401 2,072,883 1,895,774 2,031,252 1,751,595 1,231,667 1,653,266 1,682,875 2,034,384 1,992,497 Apparel Stores 6.3% 2,148,334 2,035,253 1,949,764 1,873,244 1,433,251 1,196,455 1,951,720 1,931,692 1,721,857 1,631,712 Department Stores 5.7% 1,952,882 1,915,593 1,817,587 1,774,543 1,327,392 1,014,928 1,842,137 2,085,700 2,032,059 2,188,368 Service Stations 2.2% 767,452 844,203 865,212 867,158 566,217 505,648 693,546 671,528 601,794 554,825 Business Services 3.2% 1,085,287 306,842 402,095 609,268 268,371 547,952 845,196 819,074 790,083 832,423 Food Markets 1.3% 454,747 448,747 438,455 404,790 345,115 385,774 450,076 482,100 502,359 509,109 Subtotal Economic (Local Business) 81.1% 27,685,956 29,606,316 29,767,980 27,774,079 23,034,503 22,279,484 29,138,281 26,498,699 24,650,648 24,179,001 Net Pools & Adjustments 18.9% 6,442,992 5,291,740 6,923,156 5,676,052 5,340,914 5,578,666 5,788,719 5,471,637 4,896,415 4,110,008 Total 100.0% 34,128,948 34,898,056 36,691,136 33,450,131 28,375,417 27,858,150 34,927,000 31,970,336 29,547,063 28,289,009 Historical Analysis by Calendar BMY from 2016Q3 to 2025Q3 The chart above shows the categories and segments in benchmark year economic basis amounts. The total amount is the net cash receipts, and it was obtained by adding up the categories/segments with the “Net Pools & Adjustments” amount. Benchmark year (BMY) is the sum of the current and 3 previous quarters (2025Q3 BMY is sum of 2025 Q3, 2025 Q2, 2025 Q1, 2024 Q4).

ATTACHMENT A
Item B
Attachment A - 2025 Q3 Sales Tax
Digest Summary
Item B: Staff Report Pg. 9 Packet Pg. 648 of 711
City of Palo Alto
neumo.com (800) 800-8181 Page 8 General Retail Food Products Transportation Business to Business Misc/Other 2025/3 Total 2024/3 Total % Chg Largest Gain Second Largest Gain Largest Decline Second Largest Decline Campbell 2.6% 0.1% -5.0% 10.4% 1.0% 2,451,723 2,433,271 0.8% I.T. Infrastructure Florist/Nursery Bldg.Matls-Whsle Auto Sales - Used Cupertino 2.2% -3.7% -3.7% -55.8% 19.8% 4,548,732 8,543,003 -46.8% Electronic Equipment I.T. Infrastructure Office Equipment Food Markets Gilroy -2.1% 1.5% 2.8% 11.7% -0.8% 4,145,175 4,099,857 1.1% Auto Sales - New Miscellaneous Retail Apparel Stores Auto Sales - Used Los Altos -8.1% -4.5% -2.1% -39.0% 1.0% 575,296 622,155 -7.5% Miscellaneous Retail Heavy Industry Electronic Equipment Restaurants Los Gatos -3.1% -3.7% -4.2% 8.0% -13.1% 1,269,333 1,316,741 -3.6% Biotechnology Auto Sales - New Service Stations Restaurants Milpitas 13.2% 3.3% -7.0% 10.6% 43.1% 6,346,228 5,831,835 8.8% Office Equipment Miscellaneous Retail Electronic Equipment Apparel Stores Morgan Hill -4.9% 3.4% -6.5% 24.1% -1.6% 2,468,878 2,482,237 -0.5% Electronic Equipment Heavy Industry Misc. Vehicle Sales Service Stations Mountain View 9.6% -0.3% 4.6% 45.4% 44.1% 4,590,893 4,256,537 7.9% Office Equipment Miscellaneous Retail Service Stations Auto Sales - Used Palo Alto 15.5% 5.6% -5.7% -34.9% 31.1% 6,767,977 7,138,856 -5.2% Business Services Miscellaneous Retail Leasing Auto Sales - New San Jose 9.0% 4.8% -9.4% -3.2% 4.5% 56,661,831 55,552,013 2.0% Miscellaneous Retail Restaurants Green Energy Auto Sales - New Santa Clara 3.1% 7.2% 6.5% -16.0% 10.1% 14,801,014 15,676,392 -5.6% Restaurants Auto Sales - New Office Equipment Electronic Equipment County of Santa Clara 38.0% -2.7% -50.7% -12.6% -5.5% 1,324,834 1,372,753 -3.5% Apparel Stores Food Markets Misc. Vehicle Sales Electronic Equipment Saratoga -5.3% -2.8% -14.9% 36.3% -55.0% 251,332 273,969 -8.3% Furniture/Appliance Office Equipment Bldg.Matls-Whsle Auto Parts/Repair Sunnyvale -4.6% 2.4% 6.6% 17.6% -18.5% 8,384,289 7,861,482 6.7% Light Industry Business Services Miscellaneous Retail Office Equipment Quarterly Analysis by Sales Tax Category: Change from 2024Q3 to 2025Q3 (Economic) Unlike the chart on page one which showed a ‘benchmark year’ through the third quarter of 2025, the chart above shows a comparison of one quarter only – third quarter of 2025 to third quarter of 2024. This chart is for local ‘brick and mortar’ businesses, and it excludes county pools and adjustments.

ATTACHMENT A
Item B
Attachment A - 2025 Q3 Sales Tax
Digest Summary
Item B: Staff Report Pg. 10 Packet Pg. 649 of 711
City of Palo Alto
neumo.com (800) 800-8181 Page 9
California Avenue % CHANGE QoQ 2025Q3 QE 2024Q3 QE 25Q3 % OF TOTAL 24Q3 % OF TOTAL FOOD PRODUCTS 10.4% 110,405 99,992 64.8% 61.2%
GENERAL RETAIL 2.0% 25,986 25,473 15.3% 15.6%
ALL OTHER -10.5% 33,974 37,977 19.9% 23.2%
TOTAL 4.2% 170,365 163,443 100.0% 100.0%
El Camino Real and Midtown % CHANGE QoQ 2025Q3 QE 2024Q3 QE 25Q3 % OF TOTAL 24Q3 % OF TOTAL FOOD PRODUCTS -3.6% 149,218 154,811 81.7% 81.1%
GENERAL RETAIL -5.9% 30,321 32,239 16.6% 16.9%
ALL OTHER -19.1% 3,032 3,747 1.7% 2.0%
TOTAL -4.3% 182,572 190,798 100.0% 100.0%
Greater Downtown % CHANGE QoQ 2025Q3 QE 2024Q3 QE 25Q3 % OF TOTAL 24Q3 % OF TOTAL FOOD PRODUCTS 7.0% 521,829 487,827 63.4% 63.8%
GENERAL RETAIL 17.3% 260,543 222,177 31.6% 29.1%
BUSINESS TO BUSINESS -15.0% 32,833 38,641 4.0% 5.1%
MISCELLANEOUS 31.3% 8,068 6,143 1.0% 0.8%
CONSTRUCTION -99.7% 35 10,017 0.0% 1.3%
TRANSPORTATION 0.0% 0 0 0.0% 0.0%
TOTAL 7.6% 823,307 764,805 100.0% 100.0%
Stanford Shopping Center % CHANGE QoQ 2025Q3 QE 2024Q3 QE 25Q3 % OF TOTAL 24Q3 % OF TOTAL GENERAL RETAIL 4.9% 1,304,771 1,244,093 87.3% 80.0%
FOOD PRODUCTS -17.4% 132,216 160,132 8.8% 10.3%
ALL OTHER -61.2% 58,425 150,683 3.9% 9.7%
TOTAL -3.8% 1,495,412 1,554,908 100.0% 100.0%
City of Palo Alto Geo Areas & Citywide Chart Data: Change from 2024Q3 to 2025Q3 (Economic)

ATTACHMENT A
Item B
Attachment A - 2025 Q3 Sales Tax
Digest Summary
Item B: Staff Report Pg. 11 Packet Pg. 650 of 711
City of Palo Alto
neumo.com (800) 800-8181 Page 10
Town And Country Shopping Center % CHANGE QoQ 2025Q3 QE 2024Q3 QE 25Q3 % OF TOTAL 24Q3 % OF TOTAL FOOD PRODUCTS 5.2% 118,209 112,356 59.8% 61.3%
GENERAL RETAIL 3.7% 73,429 70,839 37.1% 38.6%
ALL OTHER 5048.5% 6,073 118 3.1% 0.1%
TOTAL 7.9% 197,710 183,313 100.0% 100.0%
All Other Geos Combined % CHANGE QoQ 2025Q3 QE 2024Q3 QE 25Q3 % OF TOTAL 24Q3 % OF TOTAL GENERAL RETAIL 5.9% 1,774,914 1,675,242 33.9% 26.7%
TRANSPORTATION -5.7% 1,239,400 1,314,344 23.7% 20.9%
FOOD PRODUCTS 4.4% 1,199,755 1,149,563 22.9% 18.3%
BUSINESS TO BUSINESS -56.6% 888,201 2,046,020 17.0% 32.6% MISCELLANEOUS 57.5% 96,072 61,013 1.8% 1.0%
CONSTRUCTION -2.4% 31,894 32,665 0.6% 0.5%
TOTAL -16.7% 5,230,236 6,278,847 100.0% 100.0%
All Other Geo Area Totals with Balance of Jurisdiction
Comparison 25Q3 & 24Q3 % CHANGE QoQ 2025Q3 QE 2024Q3 QE 25Q3 % OF TOTAL 24Q3 % OF TOTAL Balance of Jurisdiction -31.0% 2,360,869 3,421,581 45.1% 54.5% Stanford Shopping Center -3.8% 1,495,412 1,554,908 28.6% 24.8% Greater Downtown 7.6% 823,307 764,805 15.7% 12.2%
Town And Country Shopping Center 7.9% 197,710 183,313 3.8% 2.9% El Camino Real and Midtown -4.3% 182,572 190,798 3.5% 3.0% California Avenue 4.2% 170,365 163,443 3.3% 2.6%
TOTAL -16.7% 5,230,236 6,278,847 100.0% 100.0%
Palo Alto citywide QE 25Q3 & 24Q3 % CHANGE QoQ 2025Q3 QE 2024Q3 QE 25Q3 % OF TOTAL 24Q3 % OF TOTAL GENERAL RETAIL 15.5% 2,128,953 1,842,890 31.5% 25.8%
FOOD PRODUCTS 5.6% 1,458,554 1,381,790 21.6% 19.4%
BUSINESS TO BUSINESS -34.9% 1,446,306 2,221,607 21.4% 31.1% TRANSPORTATION -5.7% 1,242,085 1,317,354 18.4% 18.5%
MISCELLANEOUS 40.3% 364,733 259,926 5.4% 3.6%
CONSTRUCTION 10.5% 127,346 115,289 1.9% 1.6%
TOTAL -5.2% 6,767,977 7,138,856 100.0% 100.0%
City of Palo Alto Geo Areas & Citywide Chart Data: Change from 2024Q3 to 2025Q3 (Economic) Cont.

ATTACHMENT A
Item B
Attachment A - 2025 Q3 Sales Tax
Digest Summary
Item B: Staff Report Pg. 12 Packet Pg. 651 of 711
City of Palo Alto
neumo.com (800) 800-8181 Page 11

FOOD PRODUCTS,

10.4% CHANGE, $110,405 ,

64.8% TOTAL

GENERAL RETAIL,

2.0% CHANGE,
$25,986 , 15.3% TOTAL

ALL OTHER,
-10.5% CHANGE,
$33,974 , 19.9% TOTAL
California Avenue 2025Q3 SALES TAX AMOUNTS
FOOD PRODUCTS, $99,992 ,

61.2% TOTAL

GENERAL RETAIL,
$25,473 ,

15.6% TOTAL
ALL OTHER, $37,977 ,

23.2% TOTAL
California Avenue 2024Q3 SALES TAX AMOUNTS

FOOD PRODUCTS,
-3.6% CHANGE, $149,218 ,

81.7% TOTAL

GENERAL RETAIL,
-5.9% CHANGE,
$30,321 ,

16.6% TOTAL

ALL OTHER,
-19.1% CHANGE,
$3,032 , 1.7% TOTAL
El Camino Real and Midtown 2025Q3 SALES TAX AMOUNTS
FOOD PRODUCTS, $154,811 ,

81.1% TOTAL

GENERAL RETAIL,
$32,239 , 16.9% TOTAL
ALL OTHER, $3,747 ,

2.0% TOTAL
El Camino Real and Midtown 2024Q3 SALES TAX AMOUNTS
City of Palo Alto Geo Area Pie Charts

ATTACHMENT A
Item B
Attachment A - 2025 Q3 Sales Tax
Digest Summary
Item B: Staff Report Pg. 13 Packet Pg. 652 of 711
City of Palo Alto
neumo.com (800) 800-8181 Page 12

FOOD PRODUCTS,

7.0% CHANGE, $521,829

63.4% TOTAL

GENERAL RETAIL,

17.3% CHANGE,
$260,543 ,

31.6% TOTAL

BUSINESS TO BUSINESS,
-15.0% CHANGE, $32,833 ,

4.0% TOTAL

MISCELLANEOUS,

31.3% CHANGE, $8,068 ,

1.0% TOTAL

CONSTRUCTION,
-99.7% CHANGE, $35 ,

0.0% TOTAL
Greater Downtown 2025Q3 SALES TAX AMOUNTS

FOOD PRODUCTS,
$487,827 , 63.8% TOTAL

GENERAL RETAIL,
$222,177 , 29.1% TOTAL

BUSINESS TO BUSINESS,
$38,641 , 5.1% TOTAL
MISCELLANEOUS, $6,143

0.8% TOTAL
CONSTRUCTION, $10,017

1.3% TOTAL
Greater Downtown 2024Q3 SALES TAX AMOUNTS

GENERAL RETAIL
$1,244,093

80.0% TOTAL
FOOD PRODUCTS, $160,132

10.3% TOTAL
ALL OTHER, $150,683

9.7% TOTAL
Stanford Shopping Center 2024Q3 SALES TAX AMOUNTS

GENERAL RETAIL,

4.9% CHANGE, $1,304,771
FOOD PRODUCTS, 87.3% TOTAL
-17.4% CHANGE
$132,216 ,

8.8% TOTAL
ALL OTHER, -61.2% CHANGE
$58,425 , 3.9% TOTAL
Stanford Shopping Center 2025Q3 SALES TAX AMOUNTS
City of Palo Alto Geo Area Pie Charts

ATTACHMENT A
Item B
Attachment A - 2025 Q3 Sales Tax
Digest Summary
Item B: Staff Report Pg. 14 Packet Pg. 653 of 711
City of Palo Alto
neumo.com (800) 800-8181 Page 13

FOOD PRODUCTS,

5.2% CHANGE, $118,209 ,

59.8% TOTAL

GENERAL RETAIL,

3.7% CHANGE, $73,429 ,

37.1% TOTAL
ALL OTHER, 5048.5% CHANGE, $6,073 , 3.1% TOTAL
Town And Country Shopping Center 2025Q3 SALES TAX AMOUNTS

FOOD PRODUCTS,
$112,356 ,

61.3% TOTAL

GENERAL RETAIL,
$70,839 ,

38.6% TOTAL
ALL OTHER, $118 , 0.1% TOTAL
Town And Country Shopping Center 2024Q3 SALES TAX AMOUNTS

GENERAL RETAIL,

5.9% CHANGE
$1,774,914 ,

33.9% TOTAL

TRANSPORTATION,
-5.7% CHANGE, $1,239,400

23.7% TOTAL

FOOD PRODUCTS,

4.4% CHANGE
$1,199,755 ,

22.9% TOTAL

BUSINESS TO BUSINESS,
-56.6% CHANGE, $888,201

17.0% TOTAL
MISCELLANEOUS, 57.5% CHANGE,
$96,072 , 1.8% TOTAL

CONSTRUCTION,
-2.4% CHANGE, $31,894 ,

0.6% TOTAL
All Other Geos Combined 2025Q3 SALES TAX AMOUNTS

GENERAL RETAIL,
$1,675,242 ,

26.7% TOTAL

TRANSPORTATION,
$1,314,344 , 20.9% TOTAL

FOOD PRODUCTS,
$1,149,563 ,

18.3% TOTAL

BUSINESS TO BUSINESS,
$2,046,020 ,

32.6% TOTAL

MISCELLANEOUS,
$61,013 , 1.0% TOTAL

CONSTRUCTION,
$32,665 , 0.5% TOTAL
All Other Geos Combined 2024Q3 SALES TAX AMOUNTS
City of Palo Alto Geo Area Pie Charts

ATTACHMENT A
Item B
Attachment A - 2025 Q3 Sales Tax
Digest Summary
Item B: Staff Report Pg. 15 Packet Pg. 654 of 711
City of Palo Alto
neumo.com (800) 800-8181 Page 14

GENERAL RETAIL,

15.5% CHANGE, $2,128,953 ,

31.5% TOTAL

FOOD PRODUCTS,

5.6% CHANGE, $1,458,554 ,

21.6% TOTAL

BUSINESS TO

BUSINESS,
-34.9% CHANGE,
$1,446,306 ,

21.4% TOTAL

TRANSPORTATION,
-5.7% CHANGE,
$1,242,085 ,

18.4% TOTAL
MISCELLANEOUS, 40.3% CHANGE,
$364,733 , 5.4% TOTAL

CONSTRUCTION,

10.5% CHANGE, $127,346 ,

1.9% TOTAL
Palo Alto citywide 2025Q3 SALES TAX AMOUNTS

GENERAL RETAIL,
$1,842,890 ,

25.8% TOTAL
FOOD PRODUCTS, $1,381,790 ,

19.4% TOTAL BUSINESS TO

BUSINESS,
$2,221,607 ,

31.1% TOTAL

TRANSPORTATION,
$1,317,354 ,

18.5% TOTAL
MISCELLANEOUS, $259,926 ,

3.6% TOTAL
CONSTRUCTION, $115,289 ,

1.6% TOTAL
Palo Alto citywide 2024Q3 SALES TAX AMOUNTS
Balance of Jurisdiction,
-31.0% CHANGE,
$2,360,869 ,

45.1% TOTAL
Stanford Shopping Center,
-3.8% CHANGE, $1,495,412 ,

28.6% TOTAL
Greater Downtown,

7.6% CHANGE,
$823,307 ,

15.7% TOTAL
Town And Country Shopping Center,

7.9% CHANGE, $197,710 ,

3.8% TOTAL
El Camino Real and Midtown,
-4.3% CHANGE, $182,572 , 3.5% TOTAL California Avenue, 4.2% CHANGE, $170,365 , 3.3% TOTAL
All Other Geo Area Totals with Balance of Jurisdiction
Comparison 2025Q3 SALES TAX AMOUNTS
Balance of Jurisdiction,
$3,421,581 , 54.5% TOTAL
Stanford Shopping Center,
$1,554,908 , 24.8% TOTAL
Greater Downtown,
$764,805 , 12.2% TOTAL
Town And Country Shopping
Center, $183,313 , 2.9% TOTAL
El Camino Real and Midtown, $190,798 ,

3.0% TOTAL
California Avenue,
$163,443 , 2.6% TOTAL
All Other Geo Area Totals with Balance of Jurisdiction
Comparison 2024Q3 SALES TAX AMOUNTS
City of Palo Alto Geo Area & Citywide Pie Charts

ATTACHMENT A
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Digest Summary
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City Council
Staff Report
From: City Manager
Report Type: INFORMATION REPORTS
Lead Department: Utilities
Meeting Date: March 2, 2026
Report #:2601-5845
TITLE
Informational Report on Residential Electric and Water Utility Customer Satisfaction Survey Results

RECOMMENDATION
This is an informational item. There is no recommendation.

EXECUTIVE SUMMARY
The City of Palo Alto Utilities (CPAU) conducts annual utilities customer satisfaction surveys to gauge perspectives on critical utilities issues. This report summarizes the latest results of the residential electric and water utility customer surveys performed October 14 through November 25, 2025. Key findings include:
• CPAU significantly outperforms aggregated statewide municipal and investor-owned utility (IOU) benchmarks in both water and electric across most key metrics. • Results indicate strong local trust, high performance in reliability and quality, and benefits from a carbon-neutral, community-focused utility model. • CPAU should focus on customer service first-contact resolution to reduce repeat contacts by standardizing workflows for the most common inquiries, such as billing issues, and developing a process for rapid resolution review. • It is recommended that CPAU communicate more broadly about emergency preparedness, emergency response, and coordination with other City departments, such as the Office of Emergency Services, so customers have a better understanding of how well their utility is prepared to handle natural disasters or drought.

Staff presented this report of survey results and presentation linked below to the Utilities Advisory Commission (UAC) on February 4, 2026. The presentation describes the goals, methodology, key findings, and strategic action considerations for CPAU based on customer feedback and insights. Additionally, copies of both the full report of results from the electric and water surveys are included as attachments to this report. The discussion with Item C
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Commissioners focused on the need to expand communication in the areas of customer programs, emergency response, and infrastructure projects to highlight reliability improvements and conservation benefits. Customer survey results revealed that when ratings to questions are lower, it is often due to customers responding they are ”unsure” about how CPAU ranks in a certain area. This is an opportunity to increase email and other digital means of communication, as well as continue with print materials, to reach a broader audience, particularly for some of these core topics.

The surveys were conducted with the primary purpose of assessing customer awareness and satisfaction related to the following areas: service reliability, utility rates and affordability, customer service, communication, infrastructure management, customer programs, sustainability practices, and overall engagement with CPAU's services. The outcome of this research will enable CPAU to clearly understand customer expectations, act on near-term opportunities for improvement, and create a strategic roadmap to increase customer satisfaction.

BACKGROUND
The surveys were conducted in collaboration with California Municipal Utilities Association (CMUA) members and administered by GreatBlue Research, Inc. CPAU participated with other CMUA members in a statewide survey of municipal utility and investor-owned utility (IOU) customers. Subsequently CPAU engaged with GreatBlue Research, Inc. to implement a followup “oversample” survey of Palo Alto residents for expanded understanding of local utility customer insights and benchmark comparisons to other municipal utilities and IOUs. This is the second residential survey conducted for CPAU by GreatBlue Research, Inc. following an initial survey of residential customers in 2023.

CPAU staff are working with GreatBlue Research, Inc. on quality assurance in survey methodologies to improve constituent responsiveness, address technical issues that surfaced during the last survey, and ensure the city obtains responses from a statistically representative demographic profile of community members. As the city conducts a variety of community surveys each year, it is important to synchronize timing and affirm the legitimacy of outreach to instill confidence in respondents.

ANALYSIS
Overall Performance Context
CPAU continues to significantly outperform the aggregated statewide municipal utility benchmarks across nearly all key metrics in both water and electric services. • Water Service: CPAU's average positive rating across organizational characteristics was

80.0% (+1.1 percentage points compared to 2023), compared to 63.3% for the statewide municipal utility customer aggregate. CPAU scored higher on every single characteristic, Item C
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with the largest gaps in “environmental responsibility” (+23.2 percentage points), "promoting efficient use and conservation" (+22.4 percentage points) and “monitoring water quality” (21.0 percentage points).
• Electric Service: CPAU's average positive rating was 74.4% (+3.5 percentage points compared to 2023), compared to 62.0% for statewide municipal utilities and 62.6% for IOUs. CPAU led on 10 of 11 characteristics, with the highest scores in reliability (+19.5 percentage points), outage restoration (+18.3 percentage points), and commitment to renewables (+23.7 percentage points).

These ratings suggest CPAU benefits from strong local trust, operational excellence in core reliability and quality areas, and advantages from its carbon-neutral portfolio and communityfocused programs.

Key Strengths Highlighted in Deeper Analysis
• Alignment of Performance and Priorities: In both surveys, CPAU shows strong alignment between what customers rate as most important (e.g., water quality and monitoring, reliable supply, value for cost) and where CPAU earns its highest scores.

This alignment is tighter than the municipal utility averages, contributing to high Net Positive Scores (86.1% among water customers; 82.1% among electric customers). Net Positive Score (NP+S) = (advocates + loyal + satisfied). • Value and Affordability Perception: Despite rate pressures felt industry-wide, CPAU customers rate value and reasonableness higher than benchmarks. For example, 68.0% rate water value "good/very good"; and 71.8% find electric rates reasonable, which is

7.4 percentage points higher than other electric municipal utilities in California. • Environmental and Conservation Leadership: High ratings for conservation promotion and renewable commitment stand out as differentiators versus other municipal utilities.

Areas of Opportunity
While CPAU remains a top performer, a few areas showed slight declines compared to 2023 that align with broader industry trends.
• Customer Service Resolution: First contact resolution dipped modestly among both water customers (-13.9 percentage points) and electric customers (-3.8 percentage points). Billing inquiries and lack of prior resolution were common drivers of repeat contacts. These are common pain points for many municipal utilities dealing with rate complexity. Also, customers are increasingly expecting to find more information on their utility’s website and turning to customer service when they cannot find this information. • Preparedness Perceptions: Lower confidence in drought, natural disaster, and emergency preparedness. These are notably below municipal utility averages in some Item C
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cases and may reflect statewide anxiety around climate risks rather than CPAU-specific issues. • Digital Tools and Communication: Satisfaction with self-service digital options lagged behind municipal utility averages in the electric survey (-9.8 percentage points), suggesting room to enhance online portals for account management or other selfservice activities.

Action Items
• Strengthen customer service first-contact resolution through billing issue workflows, identifying common failure points such as unclear bill language, difficulty navigating online account tools, or delayed processing. Integrate proactive digital tools, such as estimated bill explanations or usage trend visualizations, to help customers selfdiagnose matters before contacting support, reducing call volume and complexity. • Enhance education about utility rates and affordability through robust outreach campaigns, utilizing a variety of different media, to better communicate the value of publicly owned utilities.
• Expand communication about infrastructure improvements, highlighting regular updates on water and energy infrastructure projects to showcase reliability improvements and conservation benefits. Clearly articulate how these investments align with CPAU’s mission, customer priorities, and affordability. • Communicate more broadly about CPAU’s emergency preparedness and emergency response planning, particularly in partnership with other city departments such as the Office of Emergency Services. This relates to CPAU’s abilities to respond to natural disasters such as earthquakes or wildfires, and droughts. Communication outlets include utility bill inserts, website updates, and community outreach events. • Develop income-specific messaging pathways for electric appliance replacement programs that reflect the motivations, financial constraints, and support needs of each group. Offer simplified “guided installation pathways,” including contractor recommendations and step-by-step support for high-income customers who prioritize convenience and trusted installation partners. Enhance outreach during key replacement moments, such as emergency replacements, with clearer, faster messaging on available rebates and financing options.
• Amplify outreach campaigns to inform water customers about efficient usage and rebate opportunities. Align rebate tiers and cost-share structures with demonstrated willingness-to-pay segments, ensuring that lower-cost options remain accessible to customers with limited budgets.

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• Seek additional ways to communicate more frequently with customers via both digital channels such as email and direct mail about important utilities issues.

Expected Outcomes
CPAU plans to implement the identified action items and address key takeaway results to improve customer satisfaction, trust, awareness, and engagement. Survey results indicate that an improved understanding of rates and the value of what goes into those investments, including program benefits, will lead to increased satisfaction and trust. Dedicated efforts to raise awareness among different customer groups about programs and resources will lead to higher participation in energy and water efficiency initiatives, as well as accelerate adoption of electrification solutions and conservation practices. Expanding educational outreach and awareness around rates, infrastructure investments, emergency preparedness, and affordability initiatives will build greater trust in CPAU among customers. Customer relationships will be strengthened, solidifying CPAU’s reputation as a reliable utility provider focused on community needs.

FISCAL/RESOURCE IMPACT
CPAU compensated GreatBlue Research, Inc. in the amount of $22,000 for the statewide residential electric and water customer surveys and oversampling survey of Palo Alto residents.

STAKEHOLDER ENGAGEMENT
GreatBlue Research, Inc. utilized digital data collection to field responses from a statistically significant, random sampling of residents. Staff provided public outreach to the Palo Alto community to ensure the legitimacy of the surveys and encourage greater participation. Staff presented this report of results to the Utilities Advisory Commission on February 4, 2026, and have incorporated feedback from the commissioners in this report to City Council.

ENVIRONMENTAL REVIEW
This does not meet the definition of a project, pursuant to Section 21065 of the California Environmental Quality Act, thus no environmental review is required.

ATTACHMENTS/LINKS:

Attachment A: City of Palo Alto Utilities Residential Electric Customer Satisfaction Report 2025 Attachment B: City of Palo Alto Utilities Residential Water Customer Satisfaction Report 2025 Presentation
APPROVED BY:

Alan Kurotori, Director of Utilities
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