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Utilities director’s report: federal PHMSA grant, $300M grid modernization budget, accelerated Green settlement payouts, new rebate hub
Summary
Staff updated the commission on a pending $16.16M PHMSA gas capital grant, a $300M grid modernization estimate (cushioned by a $350M resolution), accelerated payments for the Green settlement, and a new online electrification rebate hub for residents.
At the start of the meeting staff provided a utilities director’s report that covered recent council actions, federal grant status, capital programs and new customer programs.
Kylene Osei, assistant city manager, briefed commissioners that the City has executed its part of a roughly $16.16 million grant from the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) for gas capital improvement work; federal signature and final terms were still pending at the time of the meeting and staff said PHMSA was revising terms and expected guidance for grant recipients.
Osei said the council has a previously approved grid‑modernization resolution and that staff currently estimate grid modernization costs at about $300 million over the five‑year CIP; a December council resolution authorized up to $350 million to provide flexibility if issuance or project costs rise.
Staff also reported on the Green v. City of Palo Alto settlement: rather than pay class customers over three years, the city will accelerate payments so customers will receive the second and third installments between March 10 and April 11, completing settlement distributions before the fiscal‑year close. Postcards will notify customers of the accelerated payments.
On capital projects, staff noted the Gas Main Replacement Project 24B is nearing completion (about 3.5 miles installed from Highway 101 to University Avenue and Webster); crews are finishing the final section on Middlefield Road. On hydro resources, staff reported reservoir and hydro levels are at or above expected levels this year.
On customer programs, staff highlighted a new “rebate hub” launched February 13 to simplify electrification for residents: rebates for heat‑pump HVAC and incentives for gas‑meter disconnections are now accessible online at cityofpaloalto.org/electifymyhome, with a contractor quote feature included.
Staff also noted they are tracking state legislation including SB 540 and related bills concerning regional electricity market and cap‑and‑trade reauthorization, and that the state fire marshal released updated fire hazard severity maps affecting foothill customers. The commission received the report for information.
