Utilities Advisory Commission - February 5, 2025

Commissioners seek clearer resilience analysis before fall decisions

Palo Alto utility advisers asked staff to clarify how the city’s Reliability and Resiliency Strategic Plan fits with Grid Modernization and to distinguish the everyday economic value of distributed-energy technologies from their added value during outages. Commissioners expressed preliminary support for the technologies and modeling approach under review, but took no formal action.

The current quantitative analysis generally covers outages lasting two to eight hours and technologies capable of providing backup power within 24 hours. Some commissioners sought scenario-based analysis of earthquakes and longer, more severe disruptions, while others supported keeping the contracted study focused on shorter events and considering catastrophic outages through a separate future effort.

Commissioners also requested transparent documentation of the uncertainty surrounding estimated outage costs, including whether California-level data adequately represents Palo Alto’s technology-heavy commercial sector. Staff said the model is being adjusted for local reliability, income, customer mix and outage data, with qualitative resilience benefits considered alongside the numerical estimates.

The avoided-cost analysis identified another potential policy issue: Technologies such as solar and storage can produce greater statewide benefits than savings Palo Alto can realize locally because the city does not directly build large generation or transmission projects. Commissioners asked staff to consider a higher value for avoided carbon emissions and possible state funding or collaboration based on the broader benefits. Initial feedback on potential utility programs is expected in April or May, followed by a final report and commission and City Council consideration in fall 2025.

Airport microgrid review will test critical-facility scenarios

A separate study will evaluate solar-and-storage microgrid configurations serving Palo Alto Airport, the Regional Water Quality Control Plant and an airport charging hub. Staff said the analysis is budgeted for three configurations across three outage types, producing nine scenarios, and is targeted for completion by the end of summer.

Commission feedback focused on whether the systems could support mission-critical loads, reduce dependence on diesel generation and provide economically useful energy during normal operations as well as outages. Commissioners also asked the study to examine emergency vehicle charging and clearly separate routine financial benefits from the additional value of resilience.

The work is an analysis rather than a funded construction project. The commission did not approve a microgrid or make a formal recommendation, and staff said any decision to pursue a system and determine its ownership or financing structure would come later.

E3 will study whether flexible technology can defer grid upgrades

Consulting firm E3 will conduct a distribution-cost analysis after contract negotiations with the originally contemplated consultant did not produce an agreement. The study will examine whether smart panels, circuit sharing, lower-wattage equipment, managed vehicle charging and energy storage can defer distribution investments or enable electrification where conventional upgrades are difficult.

Commissioners requested a detailed scope and a clearer explanation of how the analysis will inform Grid Modernization. Staff said grid improvements already underway do not preclude flexible technologies and could help enable them. The distribution analysis is also expected to be completed by the end of summer.

Fiber rates could reach City Council in June

Rates and service packages for Palo Alto’s Fiber-to-the-Home pilot could reach the City Council as soon as June under a tentative review schedule outlined by staff. The proposal would first go to the Utilities Advisory Commission and the Finance Committee. If the council adopts the rates, implementation would likely follow about a month later.

Primary sources

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