Utilities Advisory Commission - December 3, 2025

Commission backs staff's energy approach in 3-2 vote

The Utilities Advisory Commission voted 3-2 to approve the staff recommendation on flexible energy resources and efficient electrification, amended to require annual updates to electricity-price inputs in the cost-benefit model. Other technology inputs may still be refreshed within two years. The commission did not adopt an alternative calling for a more proactive promotion and barrier-reduction effort.

Staff said the evaluated technologies generally did not show community benefits exceeding incentive costs under current conditions. Commercial solar paired with storage was approximately break-even and expected to improve, while a previous demand-response pilot involving six commercial customers cost more than it produced in benefits. A narrower study of using batteries, solar or vehicle-to-grid resources to defer distribution-transformer replacements also found that costs exceeded benefits; it did not examine substation-transformer deferral.

Commissioners disagreed over how much weight to give resilience and emerging opportunities whose economics are not yet favorable. Some pushed for a stronger commitment to local batteries, microgrids and large-customer projects, while others favored targeted work with major customers and city facilities using existing account-management staff rather than a broader new outreach effort.

Staff said preliminary analysis of substation batteries and other grid-modernization options is planned for January 2026. A broader discussion of long-term resilience is expected in 2026, and staff plans to keep consulting other utilities and providers about virtual-power-plant and demand-response models.

Budget subcommittee will examine electric and water affordability

The commission also established a temporary, two-member budget subcommittee to review affordability in the fiscal 2027 financial plan and five-year forecast for the electric and water utilities. Its term runs from Dec. 3, 2025, through June 3, 2026.

Staff had recommended limiting the work to electric utility finances because of staff-capacity and Brown Act constraints, but commissioners added water to the scope. The subcommittee's charge remains limited to affordability; staff said the broader utility-wide reserves evaluation will return to the full commission, with recommendations expected in the first quarter of 2026.

Council representation will be decided case by case

The commission took no formal vote on a standing process for carrying its recommendations to the City Council or Finance Committee. Members nevertheless generally favored deciding representation when individual items are considered, either by including a request in the substantive motion or taking a separate vote on logistics, then coordinating through the council liaison and mayor.

Commissioners said a representative should present both majority and minority reasoning when a recommendation is split or controversial. Staff will continue using the utilities director's report to flag recent and upcoming Council and Finance Committee matters, while commissioner-authored memos will continue through the bylaws review process before returning to the full commission.

Primary sources

Watch the meeting on YouTube · Read the official meeting agenda