As more residents go electric, Palo Alto eyes major grid upgrade

If Palo Alto succeeds in reaching — or even nearing — its goal of becoming carbon neutral by 2030, it would have to overcome a steep hurdle: an electric grid that wasn't designed for such lofty ambitions.

The city's plan leans heavily on electrification — the powering up of local cars and homes not by gas but by renewable electricity. Under a recently adopted "reach code," developers are already required to make all new buildings all-electric. And a new sustainability plan that the City Council unanimously approved Monday includes the installation of new electric-vehicle charging equipment near multi-family developments and pilot programs to encourage the installation of electric appliances such as heat pump water heaters for single-family homes and electric HVAC equipment for commercial properties.

While pursuing these programs, Palo Alto will also undertake its largest electrical-grid update in decades: a project that is expected to cost between $220 million and $306 million and take about seven years to complete, according to a presentation that Tomm Marshall, assistant director at city of Palo Alto Utilities, gave to the city's Utilities Advisory Commission on Wednesday, June 7.

The project will kick off in neighborhoods with overhead electrical lines and later move on to the underground districts, where infrastructure upgrades are expected to be more costly and contentious.

Utilities administrators also plan to upgrade two existing substations to increase their capacity, Marshall said.

While not as splashy as some of Palo Alto's other recent infrastructure projects — a list that includes a bike bridge, a replaced fire station and a new police headquarters that is nearing completion — the grid update is key to helping the city meet its climate goals.

According to the plan, buildings produced about 37.8% of the city's total emissions in 2021, and the city hopes to reduce this figure through electrification programs such as a recently launched effort to get 1,000 customers to install heat pump water heaters this year.

Strengthening the grid

But with more residents increasingly relying on electric appliances and vehicles, the city's grid is already showing signs of strain, including flickering lights and low voltage at some homes. Some transformers are starting to fail, Marshall said.

The project will involve converting existing 4 kVa (kilo volt ampere) lines in the city's overhead system to 12 kVa, increasing their capacity and allowing them to meet what staff project to be future electricity demand. Utilities plans to start with overhead lines in north Palo Alto neighborhoods around University Avenue and Embarcadero Road and near Rinconada Park, which currently have 4 kVa lines. In south Palo Alto, the area around East Meadow Circle would see similar upgrades.

According to the Utility Department's timeline, the city would begin the upgrade of the overhead system later this year with the goal of completing it in 2027.

"The reason we're attacking that first is probably about 60-70% of all customers are connected to the overhead system, so we're looking at getting that done as soon as possible so that customers won't be restricted by the capacity of the existing network," Marshall said.

Underground districts would follow, and staff expects this phase to be particularly complex, expensive and politically tricky. The city does not install subsurface equipment anymore, so it will have to find locations in neighborhoods where pad-mounted transformers would be installed.

Marshall and Utilities Director Dean Batchelor both cited opposition from neighbors to past projects that required installation of electric equipment near their properties.

"These are difficult negotiations that have to occur with neighborhoods to find locations to put the equipment," Marshall said.

The upgrade of underground utilities would stretch from 2026 to 2030, according to the current timeline.

Some members of the Utilities Advisory Commission wondered whether the city can adopt policies to speed up the installation of new transformers. Commissioner Lisa Forssell asked whether this process really needs to be a negotiation.

"Are there policies that the council could adopt that would make it be less complex?" Forssell asked.

At the moment, however, utility leaders are loath to force the new equipment — green boxes with humming sounds — on neighborhoods. Marshall said the city doesn't want to engage in a "public relations nightmare" with its customers. Batchelor concurred and said he isn't sure that forcing customers' hands is the best approach. That said, the city will have to find enough locations to accommodate a doubling of its transformers.

"What you see now in someone's backyard or even a pad-mounted transformer, there may be three more transformers that may have to be put into that community," Batchelor said. "And who's going to be the lucky one who'll have to now see the box all of a sudden? I think it's going to be some long conversations, and we're going to have to work through that."

The council's new sustainability plan underscores the importance of the upgrade and includes as one of its stated goals: Modernize the electric grid to support increased electric demand and to accommodate state-of-the-art technology.

Council member Pat Burt, who chairs the council's S/CAP Committee, said during the Monday discussion of the sustainability plan that the issue will become particularly critical as the city moves ahead with implementing its Housing Element, which calls for accommodating more than 6,000 new dwellings between 2023 and 2031.

"All those new units are going to be immediately fully electric with carbon-neutral electricity," Burt said.

The city remains far from its goal of carbon neutrality. As of 2021, it has reduced its emissions by about 54% from 1990 levels. By far the largest factor was its switch to a carbon-free electricity portfolio in 2013. Burt, however, expressed optimism that the new work plan, which includes grid modernization, offers a reasonable blueprint for reaching the target.

"We're back on a committed path," Burt said. "And if we fall short, we're not going to fall way short. We're seeing there's a real rapid transformation that's occurring."