Palo Alto Weekly

News - August 19, 2011

Palo Alto to shop around for major electricity projects

City considers ways to use a $50 million reserve for 'significant' projects to benefit ratepayers

by Gennady Sheyner

Palo Alto's utility officials have a pleasant conundrum on their hands these days a $50 million fund that the city can use to upgrade its transmission system, install smart meters or pursue other "special projects" relating to electricity.

The fund, known as "Calaveras Reserve," has been in place since 1983 and has undergone several transformations, the latest of which is now in the works.

The City Council launched the reserve to help pay off the city's debt for a new hydroelectric project. But when state legislators passed a law in 1996 deregulating the electric industry and allowing customers to choose their power supplier, Palo Alto officials decided to use the reserve to pay for electricity assets that the city purchased but would have a hard time supporting if it were to lose customers to a competing utility.

By 1999, the reserve balance reached $71 million, which was deemed enough to cover the asset costs, and the city stopped collecting funds, deciding it would draw upon the reserve until it ran out in 2033.

In 2009, to address changing market conditions, the council approved new guidelines for the management of the reserve.

Utility officials are still a long way from determining what to do with the $50 million, but early signs indicate that these funds will not be returned to the ratepayers who were asked to chip into the fund but for one or more long-term big-ticket items.

The city's Utilities Advisory Commission agreed last month that all of the Calaveras money should be placed into a new "Electric Special Project Reserve" and used to fund significant electricity projects. Senior Resource Planner Monica Padilla wrote in a report that top candidates include smart-meter infrastructure; investments in local power generation; and upgrades to the city's transmission-line connection (a subject of major interest since a plane crash caused a citywide power outage in February 2010). The city may also use these funds for energy-efficiency loans to businesses; exploration of "emerging technologies"; and a new Utilities Department building (in addition to its City Hall location, the department occupies a portion of the city's dilapidated Municipal Service Center).

Commissioners John Melton and William Berry both said they would favor spending the money on an upgrade of the city's transmission system. The city is currently connected to the electrical-transmission grid at the Colorado substation at 115 kiloVolts (kV), according to a staff report. Upgrading the system to 230 kV "has the potential of saving up to $5 million per year and improving the city's transmission service reliability." Such an upgrade, however, is estimated to cost more than $160 million, making it "economically infeasible," in staff's opinion.

A cheaper option would be connecting to the 230 kV transmission grid through SLAC National Accelerator Laboratory in the west side of the city. Staff estimated that the project would cost more than $40 million and could provide about half of the city's electric load. It would, however, depend on interest by Stanford and SLAC, according to the staff report.

"If a transmission project was available to us, it would be a worthwhile thing to do and it would reduce the future cost to ratepayers," Berry said at the July 20 meeting.

Not everyone agrees that the entire reserve should be dedicated to major electricity projects. In deciding to use all $50 million in the Calaveras Reserve for such projects, the commission rejected a Utility Department suggestion to use half of the reserve to support utility operations and help stabilize rates.

Utilities Director Valerie Fong said at the July meeting that the department made a "compact with customers" about what the money would be used for. Though the role of the reserve has changed, Fong said she feels "obliged to return it (the money) under the same intent under which it was collected."

The disagreement between staff and the commission means that the City Council will face two competing recommendations when considering the reserve's new role in the fall.

Commissioners John Melton and Steve Eglash both opposed the staff recommendation to split the Calaveras Reserve into two funds, with Eglash saying that the money should be spent on something major and significant and not "dribbled away" to cover operational costs.

"This is a substantial sum of money that we have here, and it's a valuable resource," Eglash said.

"Now is the time to take a real step forward to decide how to use it," he added.

Eglash proposed a set of guidelines for determining how the money should be spent. The funds he said, should be used for major projects (rather than operating costs) that benefit electric ratepayers, that are "worthwhile" (that is, they would be worth doing even if the city didn't have the reserve fund) and that are "impactful relative to the money we have in the reserve."

His colleagues on the commission agreed, with Berry saying he would like to see the funds used for "big significant projects that have a lasting value for the utility."

The council's Finance Committee is tentatively scheduled to consider guidelines for spending the Calaveras Reserve funds in September. The full council would then discuss the Finance Committee's recommendation in October.

Staff Writer Gennady Sheyner can be emailed at gsheyner@paweekly.com.

Comments

Posted by Bill, a resident of Embarcadero Oaks/Leland
on Aug 21, 2011 at 10:35 am

NO Smart meters. Palo Alto's meter reading is already erratic and unreliable!!


Posted by AlexT, a resident of Meadow Park
on Aug 21, 2011 at 11:11 am

Why not use it to lower the cost of under-grounding of the utility lines to speed up the conversion? And/or provide low cost/zero interest loans to those who don't have the cash to pay for the cost of underground connections.

In any case, it should go to an infrastructure improvement project and not a operational expense.


Posted by Walter_E_Wallis, a resident of Midtown
on Aug 21, 2011 at 11:53 am

Walter_E_Wallis is a registered user.

Sorry, Bill, but smart metering is the best use of this fund. Like it or not, the price of electricity varies as much as 1000% through the day, but with today's metering we pay as much for off peak power as for peak power. Commercial users, on the other hand, can economize by deferring their demand. At any rate, smart meters have been mandated by the PUC, and so the sooner the better.


Posted by Henry, a resident of Duveneck/St. Francis
on Aug 21, 2011 at 12:07 pm

Completely agree with Walter. Smart metering is a very wise way to invest this money.


Posted by Neglected south PA, a resident of Charleston Gardens
on Aug 21, 2011 at 2:46 pm

I agree with Alex T. this money should first be used to complete the under grounding of our utility wires.

Why is it that three-quarters of North Palo Alto has been under grounded and only about one third of South Palo Alto. Under grounding was promised to ALL Palo Alto about 35 years ago by the then City Council but huge swaths of south Palo Alto has been neglected.

Very soon the City plans to under ground the neighborhood around California Avenue and Downtown North. Please note that doesn't include any of South Palo Alto. Wake up Utilities Department - treat us fairly and offer more sections of South Palo Alto for under grounding.


Posted by Henery, a resident of Duveneck/St. Francis
on Aug 21, 2011 at 3:16 pm

I used to live on Cowper St, south of Middlefield. CPAU identified our area for undergrounding. There were many complainers who did not want to do it, because each property owner needed to pay for their own hookups, from the city pillbox to their own main main breaker. Each homeowner had to pay a few thousands of $$ to make it happen. It finally happened, but it was a big fight. Are the South PA homeowners eager to pay the price? If so, they should petition CPAU to start the process in their neighborhoods.

Smart metering is not only a requirement, going forward, but it makes complete sense. CPAU is forced to build to a peak usage level, and this is very costly. We need to even out the demand pattern by using the pricing mechanism. This is what smart metering provides. Besides, individual users can save money by switching their demand to off-peak hours. Smart metering should have the highest priority on these available funds.




Posted by Walter_E_Wallis, a resident of Midtown
on Aug 21, 2011 at 6:04 pm

Walter_E_Wallis is a registered user.

So it's settled. Smart Meters it is!


Posted by qq, a resident of Barron Park
on Aug 21, 2011 at 11:12 pm

Just opt-out of the smart meter if you don't want it.

Web Link

qq


Posted by RobertWilliams, a resident of another community
on Aug 22, 2011 at 4:05 am

MUST-SEE 4-minute youtube video on Smart meters:
Web Link


Posted by RobertWilliams, a resident of another community
on Aug 22, 2011 at 4:10 am

SMART METER HEALTH PROBLEMS AND CANCER.

A. The WORLD HEALTH ORGANIZATION on May 31 2011 placed the Non-ionizing radiation coming from Wireless smart meters (and some other wireless devices) on the Class 2-B Carcinogen List, along with DDT and Lead.

B. The NATIONAL INSTITUTE OF HEALTH months ago (Feb 2011) found biological changes in the brain after only minutes of exposure to non-ionizing radiation.

C. LABORATORY SCIENTISTS have observed
(1) Human Cell Damage
(2) DNA Chain Breaks
(3) Breaches in the Blood-Brain Barrier
from levels of non-ionizing radiation lower than emitted by WIRELESS Smart meters.

D. INSURANCE COMPANIES Hired Independent Laboratory Scientists and these scientists also observed Cell Damage and DNA Chain Breaks and now the Insurance Companies will NOT Insure Liability of damage from Wireless Smart meters and other wireless devices.
TV Video (3 minutes)
Web Link

So shouldn't installation of Wireless smart meters on people's homes Stop?

Because Cell Phone use and other devices are Voluntary and can be shut off at the user's discretion, that is a different issue.

1. WIRELESS SMART METERS – 100 TIMES MORE RADIATION THAN CELL PHONES.
Video Interview: Nuclear Scientist, Daniel Hirsch, (5 minutes).
Web Link

2. WIRELESS SMART METERS – CANCER, NERVOUS SYSTEM DAMAGE, ADVERSE REPRODUCTION AFFECTS.
Video Interview: Dr. Carpenter, New York Public Health Department, Dean of Public Health, (2 minutes).
Web Link

3. THE KAROLINSKA INSTITUTE IN STOCKHOLM (the University that gives the Nobel Prizes) ISSUES GLOBAL HEALTH WARNING AGAINST WIRELESS SMART METERS.
2-page Press Release:
Web Link

4. RADIATION MEASURED FROM SMART METER MOUNTED ON A HOME (once active in the utility system) SHOWS RADIATION BURST PULSES APPROXIMATELY ONCE EVERY FOUR SECONDS 24 HOURS PER DAY traveling into and through the bodies and brains of the inhabitants of that home.
Youtube Video (6 minutes, 1st minute is sufficient).
Web Link


Posted by SteveU, a resident of Barron Park
on Aug 22, 2011 at 5:01 am

SteveU is a registered user.

Spend it on a redundant feed widely separated from the existing EPA path so we don't have whole day outages in case of disasters like that plane crash.
No Smart meters (the would want to Upgrade Water and Gas at the same time to benefit by eliminating a Meter Reader for cost saving an THAT is not funded.)


Posted by Walter_E_Wallis, a resident of Midtown
on Aug 22, 2011 at 5:26 am

Walter_E_Wallis is a registered user.

Balderdash! But if you want to opt out, then set your rate at the highest peak use rate, since your meter does not discriminate. If you are ready to have your electric bill quadruple then so be it.


Posted by Way to go Walter, a resident of College Terrace
on Aug 22, 2011 at 6:57 am

As Walter says...balderdash on the smart metering "dangers".....

Simple, though, CA has made an option for the tin-foil crowd, just opt out.

You pay for it, but not enough unfortunately. But, feel free to do so.


Posted by Give-Us-Our-Money-Back, a resident of Another Palo Alto neighborhood
on Aug 22, 2011 at 7:59 am

The city is spending about $1M a year now to read the analog meters. A shift to smart readers will pay for itself in just a few years.

Why not return the money to the rate payers, who have been overcharged for a long time now?


Posted by Steve, a resident of Evergreen Park
on Aug 22, 2011 at 10:59 am

Here would be my vote for spending the money:

+ Increased Reliability
+ Redundant feed
+ Undergrounding
+ Energy Flexibiity
+ Smart Meters
+ Return money to customers

Note smart meters would help solar PV since solar typically generate the most electricity during peak electricity rates.

As for the Smart Meter Health issues --- that's just plain crap. I mean a microwave and a cell phone next to your head generates far more non-ionizing radiation than a smart meter. Microwave and cell phone dangers have long been debunked so many times.


Posted by Steve, a resident of Evergreen Park
on Aug 22, 2011 at 11:01 am

Woops, my list didn't format correctly. It should be

+ Increase Reliabiity
+++ Redundant feed for supplant EPA feed
+++ Undergrouding
+ Energy Flexibility
+++ Smart Meters
+ Return money to customers


Posted by Frank, a resident of Ventura
on Aug 22, 2011 at 11:02 am

Why not make the solar electric permit / install process easier and cheaper? I understand from solar installers that Palo Alto is one of the worst cities to do an install in.

I'd like to get under grounded even if it cost me a few $$


Posted by Smart, a resident of Another Palo Alto neighborhood
on Aug 22, 2011 at 11:22 am

Some background:
It takes 12 hours to shutdown a coal-fired plant. That means it's actually cheaper to just let it run all the time. The extra energy in off-peak hours is just CO2 up the chimney. If the utility can get people to flex their usage to use more off-peak energy, they can sell it cheaper, produce less CO2 and reduce the number of power plants required.

The similar statistic for a natural gas-fired plant is 3 hours, by the way.

Since Smart Meters encourage off-peak use, they are a sound investment and great for the environment as well.

I believe the health impact of a smart meter is non-existent to miniscule.


Posted by Alex Panelli, a resident of Another Palo Alto neighborhood
on Aug 22, 2011 at 11:32 am

Smart meters make sense to me.

Question: why are smart meters always wireless? As I recall, some utilities use PLC technology to send data over the power lines.

Web Link


Posted by John, a resident of Barron Park
on Aug 22, 2011 at 11:46 am

If Palo Alto's metering reading is "erratic and unreliable," that's the reason we need smart meters.


Posted by jardins, a resident of Midtown
on Aug 22, 2011 at 2:38 pm

re Smart's comments:

"Since Smart Meters encourage off-peak use, they are a sound investment and great for the environment as well.

I believe the health impact of a smart meter is non-existent to miniscule."

1. Brits have used off-peak electricity for decades WITHOUT smart meters having to be installed!

2. We need FACTS, not belief, about the safety or non-safety of using smart meters. See Robert Williams' post above about what other communities have discovered about smart meters.


Posted by Resident, a resident of Another Palo Alto neighborhood
on Aug 22, 2011 at 4:26 pm

Here is a link to the UK off peak electricity system called Economy 7
Web Link

Separate meters are used, but they are not smart meters.


Posted by Henry, a resident of Duveneck/St. Francis
on Aug 22, 2011 at 4:47 pm

For those who are concerned about privacy concerns (one link provided, above, was hypersensitive about it), smart meters provide no more overall usage than analog meters. Yes, they can differentiate time of day (of course!), but how does that matter if I am growing marijuana in my cellar...it it the total that counts. If I am running an illegal business (e.g. severs), same thing...it's the total that counts.

The advantage of smart meters is that they provide differential price points on a continual basis. There is no need for two meters...just one smart meter. Dah?

It is up to the paranoids to prove that low level radio waves cause health effects. The U.S. government denies such effects.

Smart meters are the way to go!


Posted by everyone in the pool!, a resident of Another Palo Alto neighborhood
on Aug 22, 2011 at 6:29 pm

Solar for everyone!!


Posted by Henry, a resident of Duveneck/St. Francis
on Aug 22, 2011 at 7:35 pm

"Solar for everyone!!"

That's interesting. What happens when the sun doesn't shine?


Posted by Give-Us-Our-Money-Back, a resident of Another Palo Alto neighborhood
on Aug 23, 2011 at 9:21 am

> 1. Brits have used off-peak electricity for decades WITHOUT
> smart meters having to be installed!

True .. but the Brits are a society not known for a lot of innovation, and certainly a society in decline. Best not look to the Brits for guidance on these sorts of matters.

The biggest reason for moving to smart meters is to reduce the cost of meter reading. The current cost is over $1M a year (salaries and benefits) of the people walking, from house-to-house, here in the middle of the Silicon Valley.

Ratepayers are going to be under constant attack in the coming years because this is a municipal utility, which does not have any outside oversight (for the most part). So--looking to reduce costs should be our primary concern as consumers of this government-controlled operation.


Posted by Resident, a resident of Another Palo Alto neighborhood
on Aug 23, 2011 at 10:59 am

<<True .. but the Brits are a society not known for a lot of innovation, and certainly a society in decline. Best not look to the Brits for guidance on these sorts of matters.>>

I hope that is a sarcastic comment. From mail, newspapers and modern banking and finance, the historic innovations from the Brits are trailblazers. At present, their rail system, motorway system, road/pedestrian/bicycle safety, cctv, to name but a few, are leagues ahead of the US. The fact that they have had off peak residential electricity for decades is very relevant to this discussion.


Posted by Carlito Waysman, a resident of Old Palo Alto
on Aug 23, 2011 at 11:56 am

Better yet,If it needs to be spent and have trouble coming up with ideas on how to get rid of this money;e spend it to beef up the utilities Dept employees bonuses , pay, and retirement. Or how about a big cut in our utilities bill?


Posted by Give-Us-Our-Money-Back, a resident of Another Palo Alto neighborhood
on Aug 23, 2011 at 12:20 pm

> From mail, newspapers and modern banking and finance,
> the historic innovations from the Brits are trailblazers

So how come Silicon Valley ended up here?

How come the US has had to save Britain from itself during most of the 20th Century.

And not having Smart Meters is another example of a society that is looking backward, not forward.


Posted by jb, a resident of Leland Manor/Garland Drive
on Aug 23, 2011 at 3:04 pm

No thought given: Firing meter readers is cutting jobs in a 12% jobless economy, guys!!


Posted by Perspective, a resident of Meadow Park
on Aug 23, 2011 at 3:06 pm

Always remember, jb...like with famous "blame ATMs" line by Obama for our unemployment, fewer tellers perhaps, but more ATM makers and fixers, aren't there? Fewer readers, more smart meter employees.

When cars came in, fewer horsemen, more auto mechanics.

We have to shift with the times.


Posted by Millie, a resident of Embarcadero Oaks/Leland
on Aug 24, 2011 at 10:29 am

How about using those surplus funds to cut our utility bills instead of shopping around for ways to spend them?

Too sensible for our fine Utility Dept.?


Posted by Walter_E_Wallis, a resident of Midtown
on Aug 24, 2011 at 12:50 pm

Walter_E_Wallis is a registered user.

Smart Meters could be used to cut your bill by judicious deferral of use until off peak times. This is far better than the current system of punitive rates for heavy users even if their use is off peak.


Posted by jardins, a resident of Midtown
on Aug 24, 2011 at 9:18 pm

Mr Wallis said:

"Smart Meters could be used to cut your bill by judicious deferral of use until off peak times. This is far better than the current system of punitive rates for heavy users even if their use is off peak."

Smart meters aren't necessary for us to know that off-peak power is cheaper!

Already in the 1970s, Europeans were using storage heaters (heaters that were powered up in the early hours when electricity was cheaper) that then would turn off the power around breakfast time and radiate their heat (they contained special kinds of bricks)throughout the day and the evening.

Why is it that Americans need to reinvent the wheel, and go in for costly devices of questionable safety when Europeans have quietly been much more conserving and common-sense-endowed for the last 40 years?


Posted by Walter_E_Wallis, a resident of Midtown
on Aug 25, 2011 at 9:09 am

Walter_E_Wallis is a registered user.

The European scheme required either a second meter or a great deal of trust in customer honesty. It had absolutely no use in encouraging off-peak use. As for safety, no one has raised any question as to why a Smart Meter was in any way less safe than a Stupid Meter.
"Smart meters aren't necessary for us to know that off-peak power is cheaper!" They are, however, necessary to enable selective billing. Without Smart Meters, you pay peak rate 24 hours a day. Real Dumb!


Posted by jardins, a resident of Midtown
on Aug 25, 2011 at 8:36 pm

Dear Mr. Wallis,

Perhaps the Europeans use a second meter--one that measures usage of electricity at off-peak hours. I myself would be very willing to have a second meter installed--a meter of that kind, NOT a Smart meter.

I don't think that trusting in customer honesty was part of the European picture.

If you look back through this entire thread, you'll see a post by Robert Williams; he provides several links to discussions of the questionable safety in using Smart meters. The NYT also ran a long article on the subject, earlier this year.


Posted by Give-Us-Our-Money-Back, a resident of Another Palo Alto neighborhood
on Aug 26, 2011 at 1:39 pm

> The NYT also ran a long article on the subject ..

The NYT is not a particularly credible when it comes to any number of topics.

So .. "smart meters" have been around for quite a while now. Can anyone point to any credible evidence of health-related problems that has been attributed clear to the meters? When you do, maybe it's time to be concerned. Listening to a "the sky is falling" hysteria might generate revenue for the NYT, but it doesn't do much to reduce the cost of utilities in PA.

We should stipulate that one doesn't need a "smart meter" to understand that off-peak use of power will save money if there is an "off-peak" pricing plan in place. The PAU has previously claimed that it would not consider "off-peak" pricing. So, the benefit of off-peak power use becomes less obvious.

However, saving $1M/year in salaries for meter readers is a tangible benefit that all ratepayers can relate to.


Posted by Walter_E_Wallis, a resident of Midtown
on Aug 26, 2011 at 5:53 pm

Walter_E_Wallis is a registered user.

Perhaps if we had a REAL engineer in charge of utilities we would have had off-peak pricing schedules in place just waiting for the smart meters. Perhaps it might take a lawsuit to get them off the dime. Valerie is too concerned with whiz-bang and lacking appreciation of real saving potential. I wasted my bouquet.


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