Emergency Water Heater Replacement Service

The City of Palo Alto Utilities (CPAU) is issuing this Request for Proposal (RFP) to implement a Heat Pump Water Heater Emergency Replacement (HPWH ER) Pilot Program (“PILOT”). This PILOT is intended to complement the current Full-Service Heat Pump Water Heater Program to support customers who need to quickly replace their existing gas water heater due to a sudden equipment failure. CPAU intends to award a contract to up to three CONTRACTORs in order to provide prompt and competitively priced emergency water heater replacement service delivered by experienced contractors that have demonstrated excellence in customer service. Most water heater replacements are performed on an emergency basis after the equipment has failed, and customers expect access to hot water within 1 to 3 days of failure. The HPWH ER PILOT will help customers make the switch from gas to electric, while providing a quick response to emergency water heater replacement needs. The PILOT will provide customers with

either a permanent installation of 120V plug-in heat pump water heater if the site is suitable, or a temporary installation of gas water heater followed by a permanent installation of a heat pump water heater at a later time. For customers who receive a temporary gas water heater and later decide not to move forward with a heat pump water heater, they have the option to keep the “loaner” gas water heater for a fee.BackgroundThe City of Palo Alto is a charter City located in the San Francisco Bay Area of Northern California. Palo Alto provides electricity, natural gas, water, wastewater collection, fiber and other utility services to customers within its boundaries through the City of Palo Alto Utilities Department (CPAU). CPAU is the only municipal utility in California that operates publicly-owned services in all of the above areas. CPAU is a department of the city government under the management of the General Manager of Utilities, who reports to the City Manager. The City Manager reports to Palo Alto City Council. Utility rates for customers are set by the City Council. CPAU serves over 29,000 utility customers, of whom slightly more than 25,000 are residential. CPAU’s peak electric demand is approximately 170 megawatts (MW), and its annual energy consumption of approximately 1,000 gigawatt hours (GWh) is provided through carbon-neutral supply resources since 2013. CPAU is one of a small handful of utilities in the world with a carbon neutral electric portfolio. Residential customers account for approximately 16% of annual electric sales with the remaining load provided to commercial, industrial and institutional customers. CPAU launched the Full-Service Heat Pump Water Heater (FS HPWH) Program in March 2023 that provides an end-to-end advisory and installation service to homeowners to switch from a gas water heater to a HPWH at a discounted price. The program also offers an on-bill financing option with 0% interest for customers to lower their upfront cost by agreeing to a monthly bill payment of $20 for 5 years. The Home Efficiency Genie team at CLEAResult has been providing customer support for this program, while Synergy is the installer that provides the project cost estimate and completes the installation. The City has also been partnering with a marketing consultant to drive program leads through creative marketing campaigns in various channels including targeted Google ads. As of December 21, 2023, the program has completed the installation of 154 HPWH units with another 25 units scheduled for installation. One important way to improve the current FS HPWH Program is to add the capability of handling emergency water heater replacements.TimelineRelease Project Date:February 29, 2024Question Submission Deadline:March 8, 2024, 1:00pmProposal Submission Deadline:March 22, 2024, 3:00pm