Palo Alto utilities director to retire

Utilities Director Valerie Fong, who has spent the past nine years overseeing the municipal electricity, gas, water and fiber operations, is preparing to hit the off switch on her Palo Alto term in December, creating an opening in one of the city’s most complex and critical positions.

Known for her efficient, no-nonsense manner and deep knowledge of department operations and broader industry trends, Fong had spent more than two decades at PG&E before heading the utilities department in Alameda. She began her stint as Palo Alto’s utilities director in October 2006 and, in addition to overseeing the critical day-to-day operations of the city-owned utilities, helped shepherd the department through a period of growth and transformation.

Under her watch, the city dramatically expanded its solar-energy portfolio, took on a host of new sustainability initiatives and, in 2013, became one of the nation’s first “carbon-neutral” cities (electrically speaking).

The cumulative capacity of solar-panel systems in the city has gone up from 3.8 megawatts in fiscal year 2013 to 6.7 megawatts in 2015 (in fiscal year 2016, which began July 1, the capacity is expected to increase to 8 megawatts), according to the city budget. And the percent of retail sales provided by renewable-supply sources under long-term power-purchase agreements went from 19.6 percent in 2013 to the current level of 35.1 percent.

Even with these initiatives, the city’s utility rates have remained generally competitive with surrounding areas, with electricity costing somewhat less than nearby cities and natural gas costing somewhat more. Water rates, meanwhile, have been going up steeply in recent years, largely because of the higher cost of buying water wholesale and the colossal, multi-year effort by the city’s supplier, the San Francisco Public Utilities commission, to upgrade the Hetch Hetchy system.

Even so, according to the city’s 2016 budget, the average residential utility bill (which includes electricity, gas, water and wastewater) in Palo Alto in the current fiscal year is estimated to be 6 percent below the monthly median residential bill of surrounding cities (a group that includes, among others, Menlo Park, Mountain View, Roseville and Alameda). And customers are generally pleased, with the city’s utility operations earning a “good” or “excellent” rating from 84 percent of the respondents in the city’s most recent National Citizen Survey.

Fong was also in charge in 2009, when the U.S. Department of Transportation seized crates of documents from the city’s Municipal Services Center amid allegations of test fraud by a former employee in the natural-gas division. The federal department ultimately returned the documents and did not take any actions against the city, Fong said.

“It’s been a really, really crazy ride for the last nine years,” she said. “But it’s been one I’m really lucky to have been on because I just have the utmost respect for the people I get to work with.”

Fong, whose last day will be Dec. 30, said one of the best parts of her job is getting feedback from residents about utility crews that arrived during inconvenient hours to check for gas leaks or perform other day-to-day functions in a professional manner.

“It’s the fun part of the job. I love having employees here who take pride in what they do,” Fong said. “It’s a wonderful thing.”

She also said she appreciates the pride Palo Alto residents take in having the city-owned utilities. Not many people in Palo Alto talk about joining PG&E or another large corporation, something that cannot be said for other communities with municipal utilities, she said.

“This community is very appreciative of the fact that it owns the utilities,” she said.

Fong decided to retire earlier this year because of a simple reason: the commute to work has become unbearable. Fong, who commutes from the East Bay, said it typically takes her well over an hour to get to and from work. Her schedule (“start early with the crews; end late with night meetings”) and a lack of good transit options to Palo Alto translated to spending too much time on the road. She does not have another job lined up at this time, she said. The only thing she plans to do once 2016 kicks off is “not commute.”

“I’m so looking forward to that,” she said.

Fong said she is pleased with the current state of City of Palo Alto Utilities, which she said has some of the smartest people in the industry working on a wide range of initiatives, from reducing carbon emissions to lighting up streetlamps downtown with LED bulbs.

“They figure out how to make things happen and they make it look so simple,” Fong said.

The department, which has about 250 employees, currently enjoys a “nice blend of high accountability and high professionalism,” she said. The department is now more “cohesive” than it’s been in the past, with everyone trying to make sure that “across the board, we’re on the same page.” Yet staffing turnover remains a challenge and one that she does not expect to disappear any time soon.

“My fear is that it’s going to be very difficult in the next few years because we do have a workforce that’s highly eligible to retire,” Fong said. “I do think a lot of institutional knowledge will go out the door when they retire. The focus has to be making sure that we have in place folks who can carry on.”

City Manager James Keene praised Fong for her service, citing the strides that the utilities department has taken in the sustainability realm.

“During her time here, the city has really moved to leadership positions on environmental sustainability as it relates to utilities: carbon neutrality, the feed-in tariff program, Palo Alto CLEAN and the look at increasing electrification through fuel switching (from natural gas to electricity),” Keene said. “She’s been working on lots of big-policy issues, while basically managing the staffing and providing quality utilities for the city.

“She’s been really, really dependable and she’s worked through difficult challenges.”

Now, the city is preparing to begin the search for a new replacement. The recruiting period is expected to stretch until the end of January, Keene said. After that, there will be an interview process involving various peer groups of utility professionals and city employees. If things go as planned, the recruitment period will take place during the February and March timeframe.

In the mean time, Assistant City Manager Ed Shikada has been tapped by Keene to lead the utilities department on an interim basis. Keene noted that Shikada is a licensed engineer with strong managerial experience. Taking charge of the department, Keen said, will give him a chance to assess the utility’s operations.

Keene noted that Shikada, in his role as assistant city manager, already has some oversight over the department.

“We looked at whether we should bring in any retired utility folks and it was clear to us this is the best approach to take,” Keene said.