Since Palo Alto launched its own electric utility in 1900, its quest for power has involved everything from Belgian-made diesel engines to Lake County geysers belching out energy born beneath the surface of the Earth.

More recently, it's been dams, landfills and wind farms that have been keeping the lights on, along with non-renewable "brown" power bought from the open market.

After early spats with private utility providers like PG&E, the city's electric operation has enjoyed a prolonged period of stability, with local rates generally hovering well below those in surrounding jurisdictions. As Ward Winslow noted in his book, "Palo Alto: A Centennial History," after the first two decades of the 20th century, utilities have "faded from the forefront of municipal politics." The focus of City of Palo Alto Utilities (CPAU), when it comes to electricity, has "remained fixed on quality service and low rates," as well as earning a profit.

Though this focus remains in place today, the utilities department is also now facing a challenge that its founding fathers never had to confront: a mandate to address climate change by shifting, more and more, toward renewable sources. In addition to keeping the energy flowing, the utility also has to keep up with the City Council's increasingly ambitious goals for going green.

The utility hit a significant milestone in this realm in 2013, when it achieved the council's goal of getting a "carbon-neutral" electric portfolio. But even though it did so, the designation relied in part on the purchase of renewable energy certificates, which fund clean energy production elsewhere in order to offset the harm of nonrenewable -- or "brown" -- power that the utility buys on the market.

That practice will end next year, when new solar contracts will come online and more than 50 percent of the city's electric supply will truly come from renewable sources, with most of the balance from hydroelectric.

There is also the city's Local Solar Plan goal of achieving 4 percent of electricity from solar installations in Palo Alto. The program Palo Alto CLEAN (Read "Palo Alto doubles down on solar energy") is just one piece of this puzzle. The utility is also exploring partnerships with the Palo Alto Unified School District for solar projects and is preparing to introduce a "Community Solar" program, in which residents whose homes cannot accommodate solar projects can invest in such projects at more suitable locations.

But the utility cannot rely solely on solar momentum. It's also facing a new mandate: a reduction of the city's carbon emissions by 80 percent by 2030 (with 1990 as the baseline).

To get to that goal, the city's Sustainability and Climate Action Plan, which the council plans to formally adopt later this year, proposes a concept called "Utility of the Future." That new model involves shifting from a central provider of power to one in which energy is generated and stored in multiple locations, as well as "an increased focus on energy services," not just generation and distribution.

Some of the targets in the new plan look like a stretch even by Palo Alto's standards, including having 90 percent of the vehicles in Palo Alto be "zero emission" by 2030. Others bank on a radical change in the behavior of local property owners -- none moreso than the city's new push to convert natural-gas heating systems to electrical ones.

Known as "fuel switching," this proposal came out of a December 2014 memo from council members Larry Klein (who is now off the council), Marc Berman and Pat Burt. The memo characterized natural gas as "only marginally better than coal" because of the non-combusted methane gas that is unintentionally released into the atmosphere during natural-gas extraction and delivery processes.

"Our carbon-neutral electricity is far better for the environment, and we therefore believe that Palo Alto should take a series of steps to promote change from gas use to use of electricity," stated the memo, referring to the fuel switch as a "bold and significant" initiative with "game-changer" potential.

The utility is just starting to dip its toes into this arena, and many obstacles stand in the way. The Sustainability and Climate Action Plan proposes a series of strategies, including promoting electric water heating and space heating in existing homes and businesses; encouraging newly constructed buildings to be "all-electric"; and switching local restaurants from gas to electric cooking equipment. Jane Ratchye, assistant director of CPAU, said the city is performing several studies and a few small pilot programs pertaining to fuel-switching.

The effort faces plenty of hurdles, Ratchye said. A wholesale switch from gas-powered to electric heaters is costly, given today's market prices. It's also difficult to imagine restaurants going all-electric, she said.

"It's going to be a big change for them to go to an electric stovetop," Ratchye said.

But even without the fuel-switching initiative, the city's natural-gas consumption is already dropping significantly because of efficiency measures. The city used about 45 million therms of natural gas a year in the 1970s, Ratchye said. Last year, it used 28 million therms.

The shift away from gas to electricity will place an even greater emphasis on the city's expanding portfolio of solar energy.

In addition to these city-driven efforts, City of Palo Alto Utilities is also facing increasing competition from the private market. Energy storage is becoming cheaper and, as customers have more control than ever over their energy use, the very nature of centrally distributed electricity is undergoing a major shift. The utility is now in the "Internet of Things" era, in which appliances collect and exchange data and a user can control the home temperature from her smartphone and program a washing machine to automatically turn on during the off-peak hours, when price dips below 5 cents per kilowatt hour.

Ratchye said the adoption of "smart" technologies is the biggest shift today for the utilities department, which is now testing 300 smart meters. She cited companies like Nest and Tesla that are transforming the energy-storage business and said the local utility, like others across the nation, are grappling with the "decentralization of everything."

"There are going to be a lot of different competitors that we didn't have," Ratchye said. "We may just become a 'wires place' -- a place that delivers electricity -- and people contract with someone else who provides it and (people) have solar and batteries on site, and they don't need all our services at all."

Related content:

• Will cheaper solar power, and the need to prepare for disaster, usher in a 'microgrid' era in Palo Alto?