March 2, 2026
Reliability & Resiliency
Strategic Plan Status
Update and Actions
City Council
PaloAlto.gov
Presenters:
Jonathan Abendschein, Assistant Director, Climate Action Terry Crowley, Utilities Chief Operating Officer
Meeting Objectives
• Provide a status update on the Reliability and Resiliency Strategic Plan (RRSP)
• Consider staff recommendation on reliability metrics
• Consider CASC and UAC recommendations on:
• Acceptance of a consultant report: “Evaluation of Local Energy Resources to Lower Costs and Improve Reliability and Resiliency”
• Direction to staff regarding the following topics:
• Promotion and barrier reduction for various technologies • Periodic updates to the cost-benefit analysis described in the report • Evaluation of large-scale solar+battery projects as opportunities arise • Bringing forward additional discussion on long-term resiliency in 2026 2 RRSP Status Update
March 2, 2026 PaloAlto.gov
RRSP Overview
Reducing Barriers
Traditional Utility Operations
Incentives and other
more intensive
efforts to drive
adoption
Strategy 3
Strategy 1
Strategy 2
Strategy 4
Strategy 5
Integrate and Ease Adoption: promotional outreach, reduce permitting and interconnection barriers, other barrier reduction Replace and Modernize Infrastructure: grid modernization, undergrounding for wildfire protection, 2nd transmission line, metrics Operational Strategies: workforce recruitment and retention, wildfire protection, outage communication
Valuation of Costs and Benefits: Evaluate the benefits in reducing utility supply/distribution costs and improving community resiliency Evaluate Potential Programs: Identify potential programs for any high-potential technologies identified in the cost-benefit analysis Strategy 6 Implement Chosen Programs: Implement programs as directed by the City Council
Flexible Energy Resources
and Efficient Electrification
4 Strategies 3-6 (Flexible Tech/Efficient Strategies)
• Barrier Reduction: Various actions already completed:
• Updated transformer upgrade fees
• Incorporated load management in transformer evaluations • Acknowledged circuit sharing in building permit load calcs • TOU rates adopted
• Electrification guide created for single-family homes • Electrification expert service developed
• Cost-Benefit Analysis and Development of Program Options:
Completed, UAC/CASC made recommendations that will be
discussed tonight
5 Strategy 1 (Infrastructure Investment)
• Grid modernization:
• first neighborhood upgraded, currently evaluating approach with UAC, CASC, City Council
• Investing in aging infrastructure: e.g. substation rebuilds (4kV to 12kV), distribution ties
• Capacity expansion for electrification: distribution
transformers, pole replacements at pace with electrification • Second transmission line: in May 2025 CAISO approved new line constructed by 2034, staff working to advance to 2030
6 Strategy 2 (Operational Strategies)
• Workforce recruitment / retention: Have filled positions, but many are promotions, so vacancy rate remains 14%
• Wildfire protection:
• Implementing Wildfire Mitigation Plan
• Aim to complete Foothills undergrounding summer 2026
• Outage communication: New outage management
communications system in place as of FY 2025
7 Reliability Metrics
March 2, 2026 PaloAlto.gov
Commonly Used Reliability Metrics
• SAIDI (System Average Interruption Duration Index):
Average duration of a power outage for the average
customer over the year
• SAIFI (System Average Interruption Frequency
Index): How often the average customer should
expect to experience a power outage over the year
• CAIDI (Customer Average Interruption Duration
Index): Average time in minutes it takes to restore
service to customers who have experienced an
outage.
9 Reliability Goals
• Staff-recommended reliability goals:
• Remain within the five-year average of American Public Power Associations' top quartile for SAIDI and SAIFI when excluding Major Event Days.
• At all times, outperform PG&E’s system reliability numbers for the DeAnza Division.
10 Performance vs. Other Utilities (CY 2024)
0 50
100
150
200
250
SAIDI CAIDI
Minutes
CPAU
APPA Top Quartile -
five year average
PG&E De Anza2
Alameda
Santa Clara
0 0.2
0.4 0.6
0.8 1
1.2 1.4
1.6 1.8
SAIFI
Outages
SAIFI, SAIDI, and CAIDI statistics shown without major event days 11 “Evaluation of Local Energy Resources…” Report
March 2, 2026 PaloAlto.gov
Study Objectives and Timeline
• Objective: Evaluate the value of flexible energy technologies and efficient electrification in:
• Reducing electric supply costs;
• Deferring distribution system investment; and
• Enhancing short-term and long-term resiliency
• Intended to address Strategies 4 and 5 of the RRSP
• Timeline:
• April 2024: RRSP approved, including Strategies 4 and 5 • September 2024: Consultant scope reviewed with UAC
• Summer 2025: Preliminary results reviewed with CASC, UAC • Nov / Dec 2025: CASC and UAC recommend acceptance of the study, make recommendations to City Council regarding future staff work 13 Study Approach and Results
• Evaluated the potential benefits and costs of various technologies on supply costs, distribution investment deferral, and short-term and long-term resiliency
• All technologies had benefits, making barrier reduction, promotion, and low-cost technical assistance worthwhile • None had benefits outweighing costs, which would have made incentives worthwhile.
• Large-scale local commercial solar and storage breakeven – could be cost-effective on a case-by-case basis.
• Time of Use rates cost-benefit not evaluated, but potential impact estimated
14 Residential Cost-Benefit Results
15 Supply Cost Benefits
Capital Costs
Commercial Cost-Benefit Results
16 Supply Cost Benefits
Capital Costs
Staff Recommendation
March 2, 2026 PaloAlto.gov
Recommendation
Staff recommends that the City Council:
1. Accept Palo Alto’s electric system reliability indices and recommended goals and reporting.
The CASC recommends 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 and Five; and
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. 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:
18 Recommendation
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;
b. Within two years, update cost-benefit analysis for demand response, solar PV, batteries, thermal storage, and vehicle to load, home, and grid technologies; c. 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 landowners; and d. Engage the Utilities Advisory Commission, Climate Action and Sustainability Committee, and Council in an additional discussion on microgrids and long- term resiliency in 2026.
19 Recommendation
Differences between CASC and UAC recommendations:
• UAC recommended continuing the current level of effort on promotion and barrier reduction rather than a higher level of effort
• UAC recommended doing an annual “light” update to the cost-benefit analysis just updating the electric supply costs in addition to the full update every other year. Staff agreed this would not be difficult to add to its work plan.
Differences in staff time and budget:
20 Activity CASC recommendation UAC recommendation
Technology promotion and
barrier reduction
0.5 FTE new hourly + 0.1 to
0.2 FTE comms every year
Less than 0.1 FTE every
year
Update cost-benefit
analysis
0.1 to 0.2 FTE every other
year
0.1 to 0.2 FTE every other
year + <0.1 FTE annually
Evaluate commercial
projects as available
0.1 to 0.2 FTE every year 0.1 to 0.2 FTE every year