Utilities Advisory Commission - January 7, 2025

Commissioners seek fuller Grid Mod cost and technology review

Utilities commissioners asked staff for a detailed review of Grid Mod’s costs, demand assumptions, technology choices, customer benefits and financing as Palo Alto moves beyond its pilot. No formal recommendation was made, but staff will place a fuller discussion on the commission’s rolling calendar and provide clearer timelines for major phases and technology evaluations.

Commissioners said planning for vehicle-to-grid systems, storage, microgrids, electric-vehicle charging and customer load management should proceed alongside foundational infrastructure work rather than wait until later phases. Staff said the program initially focuses on replacing aging equipment and increasing capacity while the utility evaluates flexible technologies, grid interconnections and potential microgrids.

Staff reported that the roughly 1,000-home pilot had prepared about 400 homes for electrification and was expected to finish in February or March 2025. Phase One, covering about 7,000 homes citywide, is scheduled for completion in 2026 and is the first part of a 10-phase, 10-year program. Each phase requires City Council approval.

Commissioners also asked staff to reconcile program cost figures discussed in a range from roughly $300 million to $500 million. Staff anticipated an initial revenue-backed bond issuance within 18 to 24 months, likely no more than $100 million, subject to Finance Committee and City Council authorization. Staff will also consider customer surveys and outreach after the pilot, including notifying households newly able to electrify or upgrade their service.

A three-member group will draft the One Water response

The commission voted unanimously, 7-0, to appoint three members to draft a letter concerning the One Water Plan, work with staff and return the proposed text for commission review. Any recommendation to the City Council would require later action by the full commission.

The 2025–2045 plan is intended as a framework for evaluating conservation and water-supply alternatives if reliability, regulations or regional partnerships change. Staff said it is not recommending an immediate capital project and expects the City Council to consider accepting the document in March 2025.

Commissioners questioned the plan’s evaluation methodology, drought and reliability assumptions, supply and demand projections, contingency triggers and regional coordination. They discussed sending the report to the council for reference without endorsing its framework or recommending action, but did not adopt final transmittal language. A public commenter also challenged the basis for a potential 50% drought cutback scenario used in the analysis.

Foothills undergrounding is expected to finish by June

Staff said work on the Foothills undergrounding project was continuing and was expected to be completed by the end of the fiscal year, likely in June 2025. The wildfire-mitigation project is moving overhead power lines underground in the city’s Tier 2 wildfire urban-interface area.

Staff will add Council outcomes to monthly reports

After commissioners sought clearer follow-through on their recommendations, staff agreed to include relevant City Council actions and the outcomes of previously reviewed items in the monthly Utilities Director’s Report. Staff also said commission representation at Finance Committee meetings could be coordinated when the commission identifies a need.

The discussion also clarified the commission’s advisory boundaries. Staff described personnel decisions, procurement assignments and daily system operations as administrative matters, while policies, programs, rates, major projects, budgets and capital planning remain appropriate subjects for commission review.

Primary sources

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