City of Palo Alto CA : Utilities Quarterly Update - 1st Quarter of Fiscal Year 2017 (Filebank)

MEMORAN DUM‌

TO: UTILITIES ADVISORY COMMISSION FROM: UTILITIES DEPARTMENT‌‌‌

DATE: SUBJECT:

JANUARY 11, 2017

Utilities Quarterly Update - 1st Quarter of Fiscal Year 2017

This update, on water, gas, electric, wastewater collection and fiber utilities, efficiency programs, legislative/regulatory issues, utility-related capital improvement programs, operations reliability impact measures and a utility financial summary, is for the Council and Utilities Advisory Commission's {UAC's) information. This update has been prepared to keep the UAC and Council apprised of the major issues that are facing the water, gas, electric, wastewater collection and fiber utilities.‌

Items of special interest this quarter include:

• an accounting of the use of the cap-and-trade allowance revenues for the electric fund since 2012 (page 6 and Table 1on page 7)

• a discussion of the use of cap-and-trade allowance revenues for the gas fund (page 12)

• a chart showing that actual gas prices for fiscal year (FY 2017 to date have been higher than expected when the budget was prepared (Figure 10 on page 15)

• a notice of the Power Content Label with a link to the location on the City's website (page 20)

• a discussion on the legislative and regulatory issues expected in the comingyear (page 21)

• the first quarter of FY 2017 financial summary for each fund is not included in this quarterly report due to the City's focus on completion of the FY 2016 Comprehensive Annual Financial Report. A full financial summary and reserve level status update will be provided in the second quarter update.‌

Attachment:

Attachment A: Utilities Fiscal year 2017 First Quarter Report

REVIEWED BY: APPROVED BY:‌‌‌‌

VA_ SWAMNATHAN,Senior Resource Planner

;;.

ED SHIKADA‌

Utilities General Manager

ATTACHMENT A

Utilities Quarterly Update

First Quarter of Fiscal Year 2017

December 2016

Quarterly Update for First Quarter of FY 2017 December 2016 Utilities Quarterly Update Table of Contents

1. Electricity 3

   Electric Supplies 3

   Cap-and-Trade: Use of Allowance Revenue 6

   Electric Budget and Portfolio Performance Measures 8

2. Natural Gas 12

   Gas Supply Retail Rates 12

   Cap-and-Trade: Use of Allowance Revenue 12

   Gas Budget and Portfolio Performance Measures 13

3. Water 15

   Water Availability 15

   Water Use Compared to Targets 15

   Recycled Water Strategic Plan 16

   Water Budget Performance Measures 16

4. Fiber Optics 18

   Commercial Dark Fiber Service 18

   Citizen Advisory Committee 18

5. Public Benefit, Demand Side Management Programs and Communications 18

   Energy Efficiency Program Achievements 18

   Local Renewable Energy Programs 19

   Communications Activities 19

6. Research and Development and Innovation 20

   Program for Emerging Technologies 20

7. Legislative and Regulatory Issues 21

   Summary 21

   State Regulatory Proceedings 22

8. Utility Financial Summary 22

Residential Bill Comparisons (based on 30-day bills) 22

Non-Residential Bill Comparisons (based on 30-day bills) 24

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Quarterly Update for First Quarter of FY 2017 December 2016 List of Figures

Figure 1: Electric Supply Resource Actual and Projection, 2015 to 2017 (as of Oct. 26, 2016) 5

Figure 2: CY 2017 Monthly Electric Supply Resource Projection 5

Figure 3: Northern California Peak Electric Prices (as of October 25, 2016) 6

Figure 4: FY 2016 Electric Load and Resource Balance 10

Figure 5: FY 2016 Electric Market Purchase Costs and Market Prices 11

Figure 6: CPAU's Gas Commodity Rates-July 2012 through November 2016 12

Figure 7: Cumulative Redwood Pipeline Cost vs. Market Benchmarks 13

Figure 8: Natural Gas Consumption - Budget vs. Actual 14

Figure 9: Natural Gas Supply Cost - Budget vs. Actual 14

Figure 10: FY 2016 Natural Gas Prices ($/MMBtu) - Expected vs. Actual 15

Figure 11: Water Use Compared to Voluntary Target 16

Figure 12: Water Consumption - Budget vs. Actual 17

Figure 13: Water Cost - Budget vs. Actual 17

List of Tables

Table 1: Use of Cap-and-Trade Allowance Auction Revenue and Expenditures 7

Table 2: FY 2016 Electric Utility Supply Cost Summary 8

Table 3: FY 2016 Electric Load and Generation Compared to Budget Projections 9

Table 4: Status to date of all applications to the Program for Emerging Technologies 21

Table 5: Residential Electric Bill Comparison ($/month) 22

Table 6: Residential Natural Gas Bill Comparison ($/month) 23

Table 7: Residential Water Bill Comparison ($/month) 23

Table 8: Residential Wastewater Collection (Sewer) Bill Comparison ($/month) 23

Table 9: Median Residential Overall Bill Comparison ($/month) 23

Table 10: Non-Residential Electric Bill Comparison ($/month) 24

Table 11: Non-Residential Natural Gas Bill Comparison ($/month) 24

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