City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: March 23, 2026
Report #:2601-5849
TITLE
Approval of Contract Amendment Number 4 to Contract S18165157 with Smart Energy Water Inc. (SEW) in the Amount of $972,625 for an Additional Three Years and for a Revised Not-to- Exceed Total of $2,002,771 for Licensing and Upgrade of the Utilities MyCPAU Customer Portal; CEQA Status – Not a Project
RECOMMENDATION
Staff recommends that the City Council approve and authorize the City Manager or designee to execute Amendment Number 4 (Attachment A) to Contract S18165157 with Smart Energy Water, LLC (SEW), increasing the not-to-exceed amount by $972,625 for an additional three years to extend the City’s annual license subscription and to upgrade the existing MyCPAU Utilities customer portal. This amendment results in a revised contract not-to-exceed of $2,002,771 over the eleven (11) year and six-month term.
EXECUTIVE SUMMARY
The current contract with the Utilities customer portal vendor, Smart Energy Water (SEW), is set to expire on March 31, 2026. The customer portal is widely adopted by Utilities customers with 84% (26,334) of all active utility accounts currently enrolled; 66.8% of all utility bill payments were submitted via the portal for FY2025, and traffic to the portal averages 429 distinct user logins per day for FY 2025. Amendment Number 4 provides funding for three additional years and a new scope for the anticipated portal upgrade to Version 11 (from Version 7), implementation of a new mobile application, and user friendly chatbot.
In addition, staff is recommending one-time integration work required to support the SAP Enterprise Resource Planning (ERP) system S/4 HANA upgrade in 2026. SAP is critical to ensure the City’s Finance, Payroll/HR, and Utilities systems remain secure, reliable, and supported beyond 2027 as the current SAP platform support is scheduled to end on January 1, 2028.
BACKGROUND
MyCPAU, fully launched in April 2020, provides customers with a convenient and secure way to manage their utility services online, including viewing and paying bills, reviewing monthly consumption and charges, and accessing energy efficiency tips. Customers can track tiered consumption and monthly charges through interactive usage and graphing features and export a full year of Advanced Metering Infrastructure (AMI) interval data, including 15-minute, hourly, and daily usage for energy analysis. Additional features include recurring credit card payments and the ability to update mailing addresses and phone numbers in real time within the City’s SAP system. The portal is fully responsive across all devices and screen sizes, with a modern design, enhanced security, and improved website analytics for City staff. New program services were introduced in February 2023, including features that provide customers with a dedicated page to view energy home loan details, including balances and monthly payments, for participants enrolled in the Advanced Heat Pump Water Heater program.
Since MyCPAU launched in April 2020, the number of registered utilities accounts has increased by 38.6%, representing an increase of 7,334 accounts with an average annual growth rate of
5.7%, from the previous My Utilities Account (MUA) customer engagement platform. Early adoption exceeded the strategic goal of 10% annual growth; however, as enrollment approaches full participation, growth has naturally moderated to approximately 5% per year.
About 66% of 31,401 active accounts no longer receive a paper invoice by mail, exceeding another strategic goal of 10% annual growth. The number of online account move-outs (stop service requests) has increased by 84.7% since the launch of MyCPAU, averaging roughly 12% growth per year. In FY 2025, 1,640 of the 3,688 total customer move-outs were completed online, representing 44% of all move-outs.
Staff report links to prior amendments:
Contract Duration
Not-to-Exceed
Amount Council Date and Staff Report Number
Amendment #4 Apr 2026 - Mar 2029 $ 972,625 March 16, 2026 Staff Report #2601-5849 Amendment #3 Apr 2023 - Mar 2026 $ 684,023 May 1, 2023 Staff Report #2302-09091 Amendment #2 Dec 2022 - Mar 2023 $ 0 No staff report. Time extension only.
Amendment #1 Oct 2020 - Nov 2022 $ 215,500 October 7, 2019 Staff Report #106192 Original Oct 2017 - Sep 2020 $ 130,623 November 16, 2016 Request for Proposal #165157
Total Oct 2017 - Mar 2029 $ 2,002,771
1 Amendment #3 - Council Meeting May 1, 2023 – Staff Report #2302-0909:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=82271&dbid=0&repo=PaloAlto&cr=1 2 Amendment #1 – Council Meeting October 7, 2019 – Staff Report # 10619:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=86572&dbid=0&repo=PaloAlto
ANALYSIS
Staff is dedicated to improving the functionality of the MyCPAU customer self-service online portal as part of its goal to make utility information readily available for customers to make informed decisions on their own utility costs, energy savings and climate actions. In addition, staff is committed to engaging with its residents, businesses, and technology experts to transform customer experience and empower individuals to make decisions about their energy and water management. The following updates, changes, and enhancements have been completed over the past two years:
Integrated data from the City’s AMI vendor to present interval meter usage information, including 15-minute, hourly, and daily electric usage, and hourly and daily water and gas usage.
Implemented Time-of-Use (TOU) usage charts for customers on the newer E1-TOU rate schedule including visualizations of super off-peak, off-peak, and peak usage. Enhanced export and download functionality, enabling customers to quickly receive a full year of interval usage data emailed to their primary account. Added tracking of the customer’s highest kilowatt usage for a selected period and over the prior past twelve months for residential and small commercial accounts. Updated the interface to integrate with the new invoice PDF vault vendor, InfoSend. Added a weather service to correlate potential energy usage with hourly temperature data.
Summary of Proposed Contract Terms
The new mobile application will provide customers with easy-to-view usage and invoice information, alerts, and personalized text notifications, while enabling secure and convenient mobile payments and service requests. The advanced chatbot will enhance customer experience by driving self-service and streamlining routine interactions. Version 11 will modernize the customer portal with a more intuitive and responsive interface, enhanced self- service functionality, stronger security controls, and to assure compliance. The upgrade will also deliver better performance, scalability, and system integration capabilities while reducing support risks associated with the older Version 7 platform.
The following is a breakdown of services and fees identified as recurring subscription, one-time implementation, and optional services under Amendment #4.
Amendment Number 4 Highlights
Extends the subscription and contract with SEW for three years, from 2026 to 2029. Adds mobile access implementation and service subscription, enabling secure and convenient mobile payments and service requests.
Includes the upgrade fee to migrate the customer portal from Version 7 to Version 11. Provides professional services for required interface and API updates to support the City’s SAP S/4 HANA system, planned to go live in February 2027. Adds an optional service subscription and implementation of the advanced WeSmart chatbot.
Extends the option for customers to receive text notifications for monthly bills and late notices; currently, notifications are limited to email notifications. Extends funding for a dedicated User Acceptance Testing environment to support long- term project testing.
Adds one additional single sign-on (SSO) integration to a future third party Customer Relationship Management (CRM) portal.
Description 2026/27 2027/28 2028/29 Total
Recurring Subscription Services:
Web Portal $71,605 $100,000 $100,000 $271,605
Mobile $25,000 $50,000 $75,000
Max Support $60,000 $60,000 $60,000 $180,000
Subtotal $131,605 $185,000 $210,000 $526,605
One-Time Implementation Fees:
Integration to S/4 HANA $79,500 $79,500
Upgrade to portal V11 $165,000 $165,000
Subtotal $244,500 $0 $0 $244,500
Optional Services:
WeSmart Chatbot - Implementation $24,650 $24,650
WeSmart Chatbot $29,750 $29,750 $59,500
Additional Test Environment $8,790 $8,790 $8,790 $26,370 Text Notification $10,000 $10,000 $20,000
SSO Integration $26,000 $26,000
Professional Services for Enhancements $15,000 $15,000 $15,000 $45,000 Subtotal $49,790 $88,190 $63,540 $201,520
Total $425,895 $273,190 $273,540 $972,625
Extends the “Max Support” option, providing additional dedicated resources to resolve complex issues in a timely manner, particularly for existing integrations with SAP and third-party systems such as SmartWorks and WaterSmart.
Adds a limited reserve of funding for future enhancements and professional services such as enabling installment plan setup in MyCPAU with automatic creation in SAP.
For cost comparison, the average annual subscription services under Amendment #3 for calendar years 2023-2026 was $110,605 compared to $175,535 for Amendment #4. The new amendment includes a new mobile application and improved functionalities, integration, and security under Version 11. Total one-time implementation fees were $30,602 for Amendment #3 for minor enhancements. In Amendment #4, staff is recommending one-time implementation fees of $244,500 to support integration work required for the citywide SAP S/4 HANA project upgrade currently in progress, as well as the subsequent upgrade of the MyCPAU customer portal from Version 7 to Version 11. Total optional services are decreasing from $321,606 under amendment #3 to $201,520 under amendment #4 because some of the future enhancements are included in the base product under Version 11.
FISCAL/RESOURCE IMPACT
Funding for the first year of Amendment #4 is available in the FY 2026 Utilities Operating Budgets. Funding for subsequent years are contingent upon Council appropriation and approval of funds through the annual budget process.
STAKEHOLDER ENGAGEMENT
The online MyCPAU customer account management system was presented to the Utilities Advisory Commission on UAC Meeting March 6, 20195. CPAU received input from Utility industry consultants, E Source; survey results from 1,200 CPAU customers; and system requirements from multiple divisions in Utilities including Customer Support, Billing and Utilities Program Services. Staff provided a detailed update on the key features, improvements, and metrics with MyCPAU to the Utilities Advisory Commission in June 2021 (UAC Meeting June 2, 2021 Staff Report #121796).
ENVIRONMENTAL REVIEW
Council’s approval of this amendment for subscription licensing and professional services is categorically exempt from the California Environmental Quality Act (CEQA) under CEQA Guidelines, Title 14 California Code of Regulations section 15301(c) (operation, repair, maintenance of existing facilities), and not a Project under section 15378 (organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment)), thus no environmental review is required. 5 Utilities Advisory Commission Meeting March 6, 2019: Microsoft PowerPoint - Item 2_New Online Customer Portal 6 Utilities Advisory Commission Meeting June 2, 2021 – Staff Report #12179:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=86573&dbid=0&repo=PaloAlto
ATTACHMENTS
Attachment A: Amendment Number 4 to Contract S18165157 with Smart Energy Water Inc.
APPROVED BY:
Alan Kurotori, Director of Utilities
Staff: Kevin Enderby, Utilities Principal Business Analyst