Proposed Edits to the Palo Alto UWMP
Based on the YRA letter of April 30, 2026
Prepared for: Palo Alto Utilities Advisory Commission · Meeting of May 6, 2026 · Item 4 Utsav Gupta, Commissioner
How to read this document
Each section below reproduces the actual draft 2025 UWMP language verbatim and shows proposed edits inline. Color and formatting are used as follows:
Marker Meaning
black, plain Existing UWMP draft text — unchanged.
blue, bold Proposed insertion (added language).
red, strikethrough Proposed deletion (removed language).
Scope and posture. This memo does not propose replacing SFPUC's water-supply reliability numbers with non-SFPUC numbers. Staff has stated that the City is required to use SFPUC's information in the UWMP itself (May 6 Item 4 staff report, p. 9). The edits below instead (i) clarify the provenance of those numbers (they are SFPUC modeling outputs, not Palo Alto-adopted planning standards), (ii) add a transparent sensitivity using SFPUC's own Finance Bureau projections, (iii) disclose the SFPUC's end-of-year storage levels under its Design Drought, (iv) add a 2021–2023 Water Shortage Emergency lookback to the financial-impact discussion, (v) record Palo Alto's reservation of contractual rights regarding >20% allocations, and (vi) note Palo Alto's potential cost exposure under the AWS Program. All proposed insertions are additive; no SFPUC figure is removed.
────────────────────────────────────────────────────────────────────────────────────────── Edit 1 — Section 1, Lay Description (p. 12)
Subject: framing the 48% rationing figure as an SFPUC scenario, not a Palo Alto-adopted standard.
Existing draft text (verbatim, UWMP p. 12):
Given the City's forecasted water demand and projections of water supply availability provided by the SFPUC, the City anticipates the need to implement water use reductions of up to 48% in consecutive dry year scenarios post implementation of the Bay Delta Plan Amendment. During the drought that occurred in 2012– 2016 (2015 drought), the City was able to reduce water use by 31% by restricting landscape irrigation to two times per week as well as a number of other measures. This was followed by the drought that occurred in 2020–2023 (2021 drought) during which the City reduced water use by 15% in response to voluntary water reductions measures.
Proposed revision (edits shown inline):
Given the City's forecasted water demand and projections of water supply availability provided by the SFPUC, the City anticipates the need to implement water use reductions of up to 48% in consecutive dry year scenarios post implementation of the Bay Delta Plan Amendment. , as projected by the SFPUC under its 8.5- year Design Drought planning model. The Design Drought is a hypothetical drought sequence developed by the SFPUC for system-modeling purposes; the SFPUC's own Long-Term Vulnerability Assessment, which incorporated 100 years of observed data, 1,100 years of tree-ring reconstructions, and 25,000 simulated runs, did not produce a drought of equivalent severity. Other large California water agencies, including Valley Water and EBMUD, plan against the drought of record (1987–1992); under that planning standard the City would not anticipate mandatory rationing in a five consecutive dry-year sequence. Staff presents the SFPUC figure for regulatory completeness and the comparative context for transparency. During the drought that occurred in 2012–2016 (2015 drought), the City was able to reduce water use by 31% by restricting landscape irrigation to two times per week as well as a number of other measures. This was followed by the drought that occurred in 2020–2023 (2021 drought) during which the City reduced water use by 15% in response to voluntary water reductions measures.
Editor's note — The current paragraph presents "up to 48%" as a single planning figure without telling the reader that it derives from one SFPUC modeling scenario (the Design Drought). Staff itself has noted (Item 4 staff report, p. 6, fn. 7) that the projected 31–48% wholesale cutbacks exceed the 20% threshold under which the Tier 2 Drought Response Implementation Plan applies, so the Tier 2 Plan cannot govern allocation in the scenario the UWMP describes. Adding the proposed sentence keeps SFPUC's number in place while making clear it is one scenario among several. This also responds to the Commissioner request, recorded on p. 9 of the staff report, to alter the UWMP language to indicate the City's view of SFPUC's reliability projections and Design Drought. ────────────────────────────────────────────────────────────────────────────────────────── Edit 2 — Section 6, Table 20 (p. 93)
Subject: add a Finance Bureau sensitivity row beneath the Water Enterprise (UWMP) projections.
Existing draft text and table (verbatim, UWMP pp. 92–93):
Table 19 shows the availability of RWS supplies for the SFPUC's retail Customers and wholesale customers in normal years. Table 20 shows the current and projected RWS supply needs to meet retail and wholesale customer demands based on information and projections presented in the SFPUC's 2025 UWMP.
Table 20 (existing, unchanged in the proposal):
RWS Supply
Allocation
2030 2035 2040 2045 2050
Retail
Customers
(a)(b)
62.7 61.2 61.9 64.0 66.7
Wholesale
Customers
(c)(d)
133.92 136.32 140.53 144.12 148.36
Total RWS
Supplies
196.62 197.52 202.43 208.12 215.10
Proposed addition: insert the following sensitivity table immediately after Table 20, with new note (e):
Sensitivity
(proposed
addition)
2030 2035 2040 2045 2050
Total RWS —
SFPUC Finance
Bureau (e)
— 182.1 185.2 190.2 193.9
Total RWS —
Water
Enterprise
(Table 20)
196.62 197.52 202.43 208.12 215.10
Difference
(mgd)
— 15.4 17.2 17.9 21.2
(e) The SFPUC publishes two sets of RWS demand/sales projections: the Water Enterprise projections, presented in the SFPUC's UWMP and reproduced in Table 20 above; and the Finance Bureau projections, prepared annually for budgeting and rate-setting and published in the SFPUC Water Enterprise Financial Plan.
The SFPUC has stated that the Water Enterprise projections "represent an outside bound of whatever demand will occur" and "will likely always be greater than actual demands," while the Finance Bureau projections are "as close to actual as we can make them." Both are presented above so that the UWMP records both the SFPUC's regulatory-planning view (Water Enterprise) and its budgetary view (Finance Bureau), reflecting the ~21 mgd gap at the 2050 planning horizon.
Editor's note — Adding a Finance Bureau row beneath Table 20 does not replace SFPUC's regulatory numbers; it discloses a second SFPUC-published number set that the SFPUC itself uses for budgeting. Both are SFPUC products, addressing staff's stated concern that the UWMP must rely on SFPUC information. A 21.2 mgd gap at 2050 is material to any downstream investment decision (AWS cost-share, rate setting, conservation budgets), and recording it in the UWMP itself prevents staff and Council from being asked to reconcile the two figures only later, in a separate document. ────────────────────────────────────────────────────────────────────────────────────────── Edit 3 — Section 6, Alternative Water Supply Program (p. 76) Subject: quantify Palo Alto's potential cost exposure and condition the City's support.
Existing draft text (verbatim, UWMP p. 76, abridged at "…"):
In 2019, the SFPUC established the Alternative Water Supply (AWS) Program to identify and plan water supply and storage projects and actions that increase the dry-year reliability of the RWS. Based on the 2045 planning horizon that the SFPUC applied in its February 2024 AWS Plan, the SFPUC anticipates a water supply gap will occur in future dry years. … Since the development of that plan, three projects have been deferred (Daly City Recycled Water Expansion, Alameda County Water District-Union Sanitary District Purified Water, and Calaveras Reservoir Expansion) and one project has been canceled (Los Vaqueros Reservoir Expansion).
The AWS Program is continuing to pursue the following two projects: PureWater Peninsula and South Bay Purified Water.
Proposed addition: append the following paragraph to the AWS Program subsection.
Cost exposure to Palo Alto and conditional position. PureWater Peninsula is currently budgeted at $747 million for 6 mgd of yield (SFPUC Water Enterprise FY 2027–2036 Ten-Year CIP, January 13, 2026, p. 94).
Assuming a two-thirds BAWSCA cost share and Palo Alto's allocation share within BAWSCA of approximately 7%, Palo Alto's potential capital exposure is on the order of $35 million, plus operating costs. The City supports continued AWS planning, but conditions any cost-share commitment on the SFPUC and BAWSCA demonstrating a supply gap that persists under (i) Finance-Bureau-class demand projections (see Table 20 sensitivity, page 93) and (ii) a drought-of-record (1987–1992) planning methodology comparable to that used by Valley Water and EBMUD. The City notes that, since the February 2024 AWS Plan, three of six identified regional projects have been deferred and one has been canceled, indicating that the underlying supply-gap analysis remains unsettled.
Editor's note — The current paragraph names the AWS projects but does not quantify what those projects could cost Palo Alto. Three of six projects deferred and one canceled within ~24 months is itself evidence that the supply-gap analysis is volatile. Recording Palo Alto's evaluative criteria in the UWMP — rather than only in correspondence — gives staff a principled basis on which to engage future BAWSCA cost-share votes. ────────────────────────────────────────────────────────────────────────────────────────── Edit 4 — Section 7, WSCP Financial Impacts (pp. 97 and 111) Subject: add a 2021–2023 Water Shortage Emergency lookback to the financial-impact discussion.
Existing draft text — UWMP p. 97 (Palo Alto's Drought Experience):
During the 2021 drought, City water use declined by 15% in response to SFPUC's system-wide voluntary water reduction measure.
Existing draft text — UWMP pp. 111–112 (Revenue Reductions):
As a retail provider, the City's fixed costs primarily relate to the cost of operating and maintaining the City's distribution system. Due to the City's volumetric rate structure, decline in sales revenue will exceed the decline in expenses. For each stage in the WSCP and assuming 2025 rate schedules, the revenue shortfall, net of the decline in expenses and based on FY 2025 costs and revenues, is calculated to be:
Stage 1: Up to 10% target water savings results in $1.8 million shortfall Stage 2: 10% – 20% target water savings results in $3.5 million shortfall Stage 3: 20% – 30% target water savings results in $5.3 million shortfall Stage 4: 30% – 40% target water savings results in $7.0 million shortfall Stage 5: 40% – 50% target water savings results in $8.8 million shortfall Stage 6: Greater than 50% target water savings results in greater than $8.8 million shortfall Proposed addition: insert the following "Lookback" paragraph at the end of the Revenue Reductions subsection (after the stage list, before "Mitigation Actions"):
Lookback — Financial Consequences of the 2021–2023 Water Shortage Emergency. In November 2021, the SFPUC declared a Water Shortage Emergency and called for system-wide voluntary water-use reductions.
At the time of the declaration, SFPUC system storage was at approximately 4.5 years of supply; storage never fell below approximately 4 years of supply during the entire 2020–2023 drought. The City's response — the 15% voluntary reduction described on p. 97 — produced an estimated $2.5 million revenue shortfall for the City and contributed to a long-term ~10% per-account reduction in water use that persisted through FY 2025 (see p. 53). The SFPUC itself experienced an FY 2023–24 revenue shortfall of approximately $25 million in retail sales and $5 million in wholesale sales after declining to lift the drought surcharge until May 2023, despite SFPUC system storage reaching 92% of capacity by mid-January 2023.
Going forward, the City should weigh these revenue and rate-stability consequences when responding to future voluntary or mandatory conservation calls and should request from the SFPUC the supply-storage data underlying any future Water Shortage Emergency declaration before the City implements corresponding WSCP stages.
Editor's note — The current paragraph quantifies revenue shortfalls per WSCP stage but provides no historical context on whether the conditions that triggered prior shortages were warranted. The 2021–23 episode is the most relevant, recent case study and is directly responsive to the Water Code §10632(a)(8)(A) requirement to describe potential revenue reductions associated with shortage response actions. The lookback is factual, sourced to SFPUC's own drought- conditions updates and budget reports, and it provides Council and staff a basis for setting more deliberate triggers for future WSCP activations.
────────────────────────────────────────────────────────────────────────────────────────── Edit 5 — Section 8, Dry Year Scenarios (p. 116)
Subject: add a one-sentence reservation of rights regarding >20% allocations.
Existing draft text (verbatim, UWMP p. 116):
For water shortages up to 20%, the Tier One water shortage plan will be applied. The Tier One plan does not apply to system-wide shortages greater than 20%. Implementing water use reduction greater than 20% requires the SFPUC to meet and discuss with Wholesale Customers a strategy for meeting incremental reductions above the Tier One plan. The SFPUC has the authority to make final allocation decision for the portion above 20%, though the Wholesale Customers have the contractual right to challenge the proposed approach. This analysis assumes the relative split of available water between SFPUC Retail and Wholesale Customers will be the same for shortages greater than 20% as shortages of 20%.
Proposed revision (edits shown inline):
For water shortages up to 20%, the Tier One water shortage plan will be applied. The Tier One plan does not apply to system-wide shortages greater than 20%. Implementing water use reduction greater than 20% requires the SFPUC to meet and discuss with Wholesale Customers a strategy for meeting incremental reductions above the Tier One plan. The SFPUC has the authority to make final allocation decision for the portion above 20%, though the Wholesale Customers have the contractual right to challenge the proposed approach. The Tier 2 Drought Response Implementation Plan, which allocates the wholesale share during dry years, applies only to system-wide shortages of 20% or less; because the projected wholesale cutbacks in this UWMP range from 31% to 48%, the Tier 2 Plan cannot be applied. The City will exercise its contractual right to challenge any proposed allocation greater than 20% that is not supported by reservoir- storage and supply-availability data at the time the allocation is contemplated, and reserves all rights and remedies available under the Water Supply Agreement, Section 3.11(c)(3). This analysis assumes the relative split of available water between SFPUC Retail and Wholesale Customers will be the same for shortages greater than 20% as shortages of 20%.
Editor's note — The Tier 2 acknowledgment is staff's own (Item 4 staff report p. 6, fn. 7); putting it in the UWMP body, rather than only in the staff report, makes the limitation visible to Council and to ratepayers. The reservation-of-rights sentence does not reject SFPUC's analysis; it records that any future >20% allocation will be evaluated against then- current physical supply, consistent with the WSA contractual right that the existing paragraph already references. This is the textual change a Commissioner suggested at the March 31, 2026 UAC meeting (per staff report, p. 9). ────────────────────────────────────────────────────────────────────────────────────────── Edit 6 — New Appendix: SFPUC End-of-Year Storage Under the Design Drought Subject: add an appendix table so readers can see SFPUC system storage at the end of each Design Drought year.
There is no existing UWMP text to replace; this is a proposed new appendix entry, to be referenced from p. 92 (where the UWMP describes the Design Drought as an 8.5-year sequence) and from p. 116 (where the multiple-dry-year cutbacks are presented).
Proposed appendix entry (full text shown as insertion):
Appendix [X]: SFPUC System Storage Under the Design Drought. The table below presents SFPUC end-of- year system storage under the SFPUC's 8.5-year Design Drought sequence, assuming the Bay Delta Plan is in effect and using SFPUC 2050 demand projections. The table is included for transparency: it shows that, even under the SFPUC's own most-severe planning scenario, system storage remains above 600 thousand acre-feet (TAF) at the end of year 5 and does not approach the RWS "dead pool" of approximately 96.8 TAF until the end of year 8. The cutback percentages presented in Table 27 (UWMP p. 117) are therefore a function of SFPUC storage-management rules under the Design Drought model, not a function of physical absence of water in the system.
Proposed Appendix Table:
Design
Drought
Year
86–87 87–88 88–89 89–90 90–91 91–92 92–76 76–77
Annual
storage
impact
(TAF)
-469 -263 +41 -206 -14 -159 -208 -192
Total
SFPUC
end-of-
year
storage
(TAF)
1,048 785 826 620 606 447 239 47
Source: derived from data provided by the SFPUC; presentation by Yosemite Rivers Alliance, Table YRA-1.
Editor's note — The current UWMP describes the Design Drought as an 8.5-year sequence (p. 92) and presents the resulting cutback percentages (Table 27, p. 117), but does not show the intermediate storage values. Disclosing the storage trajectory in an appendix lets Council and ratepayers see that physical supply is not exhausted until very late in the modeled sequence — a fact that is material to evaluating the >20% rationing scenario discussed in Edit 5. ────────────────────────────────────────────────────────────────────────────────────────── Edit 7 — Section 6, Climate Change / SFPUC Climate Studies (pp. 78–80) Subject: respond to Commissioner request for an LTVA-applicability discussion in the UWMP.
The May 6 Item 4 staff report (p. 9) records that two Commissioners requested staff "take into consideration the Long- Term Vulnerability Assessment (LTVA) and Adaptation Plan for the SFPUC and be prepared to explain how this work applies to the UWMP." The current UWMP refers to the LTVA but does not explain its relationship to the Design Drought figures used elsewhere in the document. Recommended addition:
Proposed insertion in the SFPUC Climate Change Studies subsection (Section 6):
Relationship of the LTVA to the Design Drought used in this UWMP. The SFPUC's Long-Term Vulnerability Assessment, completed in partnership with the Water Research Foundation, evaluated regional water- supply reliability using 100 years of observed hydrologic data, 1,100 years of tree-ring–based reconstructions, and approximately 25,000 simulated stochastic model runs. None of the stochastic runs produced a drought sequence as severe as the SFPUC's Design Drought (described on p. 92). The Design Drought, rather than the LTVA's stochastic ensemble, is the planning input for the multiple-dry-year cutback percentages presented in Table 27 (p. 117) and for the SFPUC's Alternative Water Supply Program.
This UWMP presents the SFPUC-derived Design Drought figures for regulatory completeness; the LTVA is included to give Council and ratepayers a fuller picture of the range of plausible future hydrologic conditions.
Editor's note — This edit responds directly to the Commissioner request recorded on p. 9 of the staff report. It does not modify any SFPUC figure; it explains the relationship between two SFPUC products (the LTVA and the Design Drought) so that the UWMP itself answers the question Commissioners raised at the March 31 meeting. ────────────────────────────────────────────────────────────────────────────────────────── Suggested UAC Motion
"The Utilities Advisory Commission recommends that staff incorporate, prior to City Council transmittal of the 2025 Urban Water Management Plan, the seven in-context edits set out in the May 2, 2026 companion memo: (1) the Section 1 framing edit at p. 12; (2) the Table 20 Finance Bureau sensitivity at p. 93 with new note (e); (3) the AWS Program cost-exposure and conditional-support paragraph at p. 76; (4) the 2021–2023 Water Shortage Emergency lookback at pp. 97 and 111; (5) the >20% allocation reservation-of-rights at p. 116; (6) a new appendix presenting SFPUC end-of-year system storage under the Design Drought; and (7) an LTVA-applicability paragraph in Section 6. None of these edits alters or replaces an SFPUC-provided number; all are additive and use only SFPUC-published or publicly-sourced data." Sources
• Item 4 Staff Report, UAC packet, May 6, 2026, including Attachment A (Draft 2025 Palo Alto UWMP). • Yosemite Rivers Alliance letter to PAUAC dated April 30, 2026, with Attachments A–D. • SFPUC Water Enterprise Financial Plan Dashboard (Projected Wholesale Sales FYE 2036–2050). • SFPUC Water Enterprise FY 2027–2036 Ten-Year CIP, January 13, 2026, p. 94 (PureWater Peninsula). • SFPUC Drought Conditions Updates, December 2021 – January 2023; SFPUC FY 2023-24 4th Quarter Budget Report. • SFPUC Long-Term Vulnerability Assessment.