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Palo Alto’s electricity rates could spike in July, though rates would still be lower than PG&E charges in most neighboring communities.
But the recommended 12 to 21 percent increase is still too high for some Utilities Advisory Commission (UAC) members, who said they prefer single-digit increases.
The magnitude of the increase won’t be determined until April, but a new report by the Utilities Department calls for a rate adjustment that would add between 12 percent to 21 percent to a residential customer’s electricity bill.
For the average residential customer, this means adding between $8.32 and $14.35 to a monthly bill that now runs just under $70 for electricity, not counting gas, Palo Alto utility officials estimate.
The Utility Department hopes the higher rates will help replenish the city’s diminished utility reserves, which are used to stabilize rates and cover sharp increases in operating costs. The City Council revised the reserve guidelines in 2007 and set minimum levels for each fund.
On Wednesday, the UAC discussed the staff’s proposed scenarios. Commissioners urged staff to keep the rate spikes relatively mild. The commission will continue its discussion March 4, when it is expected to recommend action to the City Council.
The city is required by law to send out notifications of rate increases by April 15.
Commissioners Wednesday encouraged staff to consider other ways to reduce expenses and bring in revenues. UAC Chairman Dexter Dawes cited the recession and said he would be much more comfortable with a single-digit increase.
Commissioner John Melton agreed.
“I encourage you to see if you can somehow work it down to single digits,” Melton said. “Irrespective of what numbers come out, I think spiky rate increases are more troublesome than steady-state rate increases.”
Even if the city increases electricity rates by 21 percent, Palo Altans would still pay less than most of their counterparts around the Peninsula. Residents in Mountain View, Redwood City and Menlo Park receive average bills of $98.92 from their supplier, Pacific Gas and Electric Company.
But residential customers in Santa Clara, which also owns its own electric utility and is served by Silicon Valley Power, get charged an average of $56.90.
Under the staff’s three proposals, the rates would spike again in July of next year. The first scenario calls for a 21 percent increase in 2010, followed by a 14 percent increase in 2011. Under the second scenario, a 16 percent increase in 2010 would be followed by a 19 percent increase in 2011. The third scenario would raise the rates by 12 percent in 2010 and by 22 percent in 2011.
UAC members urged staff to consider other alternatives, including deferring expenses or reconsidering capital expenditures. Commissioner Asher Waldfogel asked staff to “put all the tools in our toolbox on the workbench.
“If there are shortfalls in the various funds, we need to look at all the ways to make those up,” Waldfogel said. “I don’t think we can take anything off the table today.”
When the City paid out $21 Million to Enron’s creditors I remember saying that the City would get that money back from the Utility customers anyway they could. My prediction was right on as the City now increases our Utility Rates not just annually in January but also in July, that’s twice a year instead of once a year.
Of course much of this increase will be transferred into the general fund to offset the projected $8 Million deficit.
You and I may economize and cutback our discretionary spending but they City does not, it’s spend, spend, spend!!! The Senior games, a Sustainability Coordinator, Shuttle buses that run with no passengers in them. Soccer players from outside PA that don’t pay enough to cover the rent on the PAUSD playing fields. The list is endless.
If the city raises the electricity bill, I’ll cancel my green energy subscription and that should take it back down to normal. I already pay an extra approx $10 bucks for “green Palo Alto”, but this will stop immediately upon rate increases.
Utility raises rates. Again.
Natural gas prices came DOWN. Where’s our reduced rate?
Palo Alto Utilities. Imagine that. Stealing more and more of our money while operating out of the same building as the Police Dept.
Anyone find out why random citizens are getting randomly ‘spiked’ utility bills?
This totally OUTRAGEOUS.
Simple: IF THEY GO THROUGH WITH THIS INCREASE, I WILL CANCEL MY SUBSCRIPTION TO PALO ALTO GREEN.
Why does the utility and subsequently local journalists accept the statement that Palo Alto utility rate increases are justified by saying that local rates will continue to be lower than PG&E neighboring rates? it may not be true. Who actually checks?
Didn’t we get told only a few months ago that Utilities has a $35 million surplus? Or did I imagine this?
I checked. It drives me nuts that these articles always make comparisons in terms of the cost for an average household. I want to be able to compare actual rates side by side.
So, here’s what I found on the City of Palo Alto website. Residential customers are charged three different rates for three tiers of usage:
Tier One (usage up to 300 KWH per month) is 8.66 cents/KWH.
Tier Two (usage from 301-600 KWH) is 11.824 cents/KWH.
Tier Three (601 KWH and up) is 15.825 cents/KWH.
Looking at my January City of Palo Alto bill, I find the total cost worked out to 10.629 cents per KWH (staying in Tier One).
PG&E’s rates seem to change slightly to reflect the season. Here’s what I found on my January 2009 bill:
Baseline Allocation (same concept as Tier One) was adjusted at the start of the new year. At the end of 2008, baseline allocation was 366.4 KWH per month and Baseline Usage was priced at 11.55 cents/KWH.
Currently, Baseline Allocation is 320.6 KWH per month and Baseline Usage is priced at 11.536/KWH.
(I do not know the cost of electricity for tiers exceeding baseline.)
The total cost of electricity on my January PG&E bill was 11.57 cents per KWH (staying inside the Baseline Allocation).
So, to my way of thinking, we’re comparing 10.629 cents/KWH to 11.57 cents/KWH. It appears City of Palo Alto charges 91.87% of the PG&E rate. Or, PG&E is 8.9% higher. The proposed double-digit rate increase may well turn the tables, depending upon what PG&E does with its rates. I cannot predict the future but I can say with certainty that I’ve seen the price gap between the two utilities diminish significantly these last few years. One might argue that Palo Alto’s rates should match market conditions, but then Palo Alto will need to stop boasting about its rates. They’re not THAT great…
Oops, Correction — I did not stay inside Tier One in my January bill for City of Palo Alto, which explains why my total cost per KWH was higher than the Tier One cost.
Years ago, Palo Alto touted owning their own utilities because that enabled the City to shop about for the best prices from suppliers. Back then, they charged significantly lower prices than PG&E. Not the story any longer, by a long shot. Not being a home owner, I would like to know does PA offer the same incentives that PG&E does for utilizing power saving measures? You’ve all seen the commercials, everything from getting rid of that old fridge or washer, to installing better roofing and insulation. Then the ‘bonus’ if you voluntarily cut back 20% of usage by turning down your heat? Turn it down? Hell, mine is OFF. Where’s MY bonus?
Utility rates should be based on the cost of providing service, not on their use as an instrument of social change
Green ya right says: “If the city raises the electricity bill, I’ll cancel my green energy subscription.” Those people who pay extra for so called “green energy” are being fooled. The energy that comes to your home for which you pay extra is exactly the same energy that comes to mine.
Much of the so called green energy is hydroelectrically generated from dams like Shasta and Oroville Dam – they’ve been around since the 1950s generating electricity for Californians. However, it’s become fashionable to label this long time energy source “green energy”. Very very little energy comes from solar or wind.
Our crafty Utility Department has created this “feel good” mantra of providing you with green energy and giving you a “feel good” green energy sign to put in your front yard. Hope it makes you “feel good”!!!
Bravo! Glad to see so many people who are unhappy with the utilities are speaking out. The utilities are unregulated, unfettered, and uncaring. Agree that if rates go up all should cancel Palo Alto Green payments. The Palo Alto utilities rank right up there with the cable companies for ripping off the public … but in this case it’s worse because it’s “their” public… or is it? Remember all this is driven by the City Council when you vote next time. Be sure to get people who are responsive.
PS. And wait for the drought … they will punish those already conserving with a standard useage cut requirement letting the wasters have an easy time … they did it last time, and I’m sure they will do it again. Why? My guess is that few on the Council conserve … or are part of Palo Alto Green. If I am wrong Council members, please weigh in.
Oh yeah we are in for a huge increase with many excuses and no end in sight.
Here’s an article printed in the Weekly last year on the previous utility rate hike:
http://www.paloaltoonline.com/square/index.php?i=3&d=1&t=3508
Nothing’s changed.
Speaking of drought…does it irk anyone elses turtles when we are in a full on drought like last time and you go to L.A. where a lot of our water is piped, then you go through neighborhoods like Hancock Park and see sprinklers throwing out waves of water over lush green lawns? I remember someone actually did a piece about that, arguing about Hetch Hetchy…the lush lawns of So. Cal and the brown lawns of N. Cal.
LA planned ahead and paid for her water. We stand on the GG Bridge and wave goodbye to ours. When libs made providing for the future a sin and people a virus they demonstrated their dead end mentality.
Utility bills are a fair and equitable way of raising city revenues. You only pay for what you use and no-one gets a free ride as they do with prop. 13.
Need a new police building? Just up the utiltiy rates. It will be paid for in no time with everyone contributing according to how much they use instead of when they bought.
Some folk won’t be satisfied until we are all taxed at 100%, then given an allowance according to our perceived need and worthiness.
I just canceled my Palo Alto “Green,” if only because our utilities department is sitting on an extra $32 million surplus, which our council is “looking for ways to spend.”
So folks, what are we going to do about the way our city is run — besides complaining on blogs?
Cancelled my Palo Alto Green after 2 years of participating and when utilities asked why, I said because you have a huge budget surplus and still plan to raise rates! Ridiculous. Glad I did it.
I also asked about why the gas bill continues to be so high even after natural gas prices have fallen dramatically and the utilities customer service person said “Because we buy our gas ahead of time.”
Excuse me, but Palo Alto must have done a HORRIBLE JOB hedging the natural gas market. The city must have bought gas at the peak of the commodities bubble last year and they are passing on THEIR HEDGING MISTAKE to us residents. Just pathetic.
Those cancelling PA Green, you do realize all this does is take money away from renewable energy suppliers? This extra money doesn’t go into PA Utilities pockets, it just determines where they buy their energy.
Yes, cancel your subscription and just hand the money to the likes of Enron instead. Good choice!
Facepalm, Palo Alto better do a better job buying their energy as they are charging us LAST YEAR’S PRICES on natural gas!!!! When natural gas prices have dropped 70% the city continues to charge us peak prices. Now you tell me where your utilities money is going?
I feel we’re being feed bogus data. I feel the utilities advisory committee sits and gets spoon-feed by the city staff. Everyone goes along….does anyone have the bxxxs to truly question and stand up to the city staff?
Here are my own findings:
We’re a family of four. We spend 44K six years ago to double pane our Eichler Windows (from top to bottom). Monthly bill for Utilities Jan 2009 was $850.00. Next door is a single old lady (turns the heat down in the middle of the night and when she’s gone during the day). Her January 2009 Utility Bill: $900.00 (OK she has 1 extra room)
My friend in Foster City (PG&E Country)paid $95.00 in January and considered that high. OK… I know… add the garbage, sewer etc,etc. but double, triple or even quadruple his $95.00 and you’re wondering what we’re doing wrong here in our beautiful Palo Alto.
As citizens, we should DEMAND a top to bottom review of where EVERY dollar coming in from our Utility is allocated to. There is something very wrong going on, right under our nose. (And it’s a bleeding nose at that)
How do we start demanding such an audit?
Where is the Weekly staff on this????? Unbelievable. Hello, Jay! People are really hurting because of the utilities department. I would say you have a massive investigative story here. Here are some questions your reporters can ask:
How does the city “hedge” or “fail to hedge” natural gas prices.
Why are our gas prices so high in comparison.
What other cities in California charge as high gas prices as Palo Alto?
Why does the city need to raise utility rates again even when they have a budget surplus?
These are all important questions that a lot of us would like to have answered. You are the watchdogs of this community, now go out and please watch this issue for us!
Staywme: I think there are plenty of us who have the bxxxs to stand up to the city council and staff. But what good does it do? We go to council meetings, write emails, and post on the ridiculous “Open City Hall” website. If we criticize the sacred powers-that-be, we’re labeled as naysayers, disgruntled, or NIMBYs. And nothing changes! The denizens of city hall continue to pat themselves on the back, give out bonuses, and babble about “civic engagement.”
I cut my gas bill by 2/3’s last month, by turning the furnace “off” and heating my spare room with an electric space heater. Now the City wants to increase my electric bill!
I live in a sixty year old home, it would cost me tens of thousands of dollars to make it environmentally efficient. I just can’t afford it!
I just have to vent as I know the City is not going to change.
I am slowly going broke, thank God for Safeway in Midtown as they sell Banquet TV dinners for $1.00 each. ( My favorite is spaghetti with meatballs)
Fixed Income/ Senior: the Utilities dept. does have reduced rates for people in your situation–it says so on the monthly bills. I’d contact them and ask. You shouldn’t have to be cold!
Jarden’s
Thanks for the scoop, I have checked into the program. To qualify you almost have to be homeless! The program is more PR than anything else. I have my health, life is great!
Resident, you really don’t understand how Palo Alto Green works.
Fixed Income/ Senior:
http://www.cityofpaloalto.org/forms/pagreen/index.html
“DISCOUNT BASED ON FINANCIAL NEED: If you are experiencing financial hardship, you may be eligible for a 20 percent discount on water, gas, electricity and storm drain charges. All customers will qualify if their total monthly or annual household income is equal to or less than the income guidelines described below. Customer’s discount eligibility is based on monthly income received in the most current months. “
Size of Household | Monthly |Yearly
1 | $3,096 | $37,150
2 | $3,538 | $42,450
…
‘T’ should check PG&E’s E-1 rate. Go to their tariff sheet at http://www.pge.com/tariffs/tm2/pdf/ELEC_SCHEDS_E-1.pdf
if you want a shock. Their steeply graduated residential rate would send the average Palo Alto complainer into a sizzle.
For example, a usage of 655 kilowatt-hours would cost approximately $130. With a projected increase of 15%, for example, the monthly cost would be around $100 in Palo Alto.
Quit sniveling. The best way to save the planet from ourselves is to price drugs like fossil fuels high in order to reduce demand. We could actually spend money on better insulation, more efficient lighting, furnaces, and appliances. What a concept! Its a better payoff than the jackals on Wall Street will ever offer you and, money saved cant be taxed!
Sorry Senior:
Rates for utilities will continue to go up for the foreseeable future.
If you’re close to the breaking point now, move to a cheaper home in cheaper part of the country. Things are not going to get better!
Just be happy you’re not retiring 20 years from now, when Social Security will pay out at about 70% of today’s levels and Medicare will not exist in its current form.
Very few of the city officials and department heads live in Palo Alto. Go to the internet. It’s al there. The people determining our lives pay their utilities someplace else. Their paychecks go into the economy of other cities. They have no vested interest in the people of Palo Alto other than a source of their income and retirement and benefits – and they laugh at us all the way to their bank. We are really suckers to allow this to happen – again and again and again. And senior, join Avenidas and eat a wonderful lunch there. If you are cold, join us at the library.
Energyman, just what exactly is your point?
I am aware that PG&E is more expensive than City of Palo Alto utilities. No one pretends that PG&E isn’t expensive. My point is that CPAU is always touting their rates in comparison to PG&E, but they’re not *that* much better. As was mentioned by someone else earlier, PG&E refunds money periodically for lower energy usage. This effectively lowers the price gap you claim above.
My house is fully insulated (including walls), has low-e dual-paned windows, a tankless water heater, etc., and I still stand by what I said before.
energyman,
If PGE baseline is 320.6 (From T’s bill)
Then using your web page
baseline 320.6 is charged at .115
1.3*320.6 – 320.6 = 416.8 – 320.6 = 96.2 is charged at .131
2*320.6-416.8 = 641.2 – 416.6 = 224.6 is charged at .247
655-641.2 = 13.8 at .354
320.6*.115 + 96.2*.131 + 224.6*.247 + 13.8*.354 = $112.40
its not $130 yet, did I miss an additional $18 fee?
I think the fools that run our city should take pay cuts and have layoffs….I am sorry to say. It is obvious that to many people make to much money for the lousy job that they do and yet year after year they vote to give themselves raises. A normal person would be fired for such a weak job performance. I have lived here all of my life and in the house for 14 years. I have seen my bill go from $60/month to over $400…..something is terribly wrong.
I think the fools that run our city should take pay cuts and have layoffs….I am sorry to say. It is obvious that to many people make to much money for the lousy job that they do and yet year after year they vote to give themselves raises. A normal person would be fired for such a weak job performance. I have lived here all of my life and in the house for 14 years. I have seen my bill go from $60/month to over $400…..something is terribly wrong.
I think the fools that run our city should take pay cuts and have layoffs….I am sorry to say. It is obvious that to many people make to much money for the lousy job that they do and yet year after year they vote to give themselves raises. A normal person would be fired for such a weak job performance. I have lived here all of my life and in the house for 14 years. I have seen my bill go from $60/month to over $400…..something is terribly wrong.
I think the fools that run our city should take pay cuts and have layoffs….I am sorry to say. It is obvious that to many people make to much money for the lousy job that they do and yet year after year they vote to give themselves raises. A normal person would be fired for such a weak job performance. I have lived here all of my life and in the house for 14 years. I have seen my bill go from $60/month to over $400…..something is terribly wrong.
I think the fools that run our city should take pay cuts and have layoffs….I am sorry to say. It is obvious that to many people make to much money for the lousy job that they do and yet year after year they vote to give themselves raises. A normal person would be fired for such a weak job performance. I have lived here all of my life and in the house for 14 years. I have seen my bill go from $60/month to over $400…..something is terribly wrong.
I think the fools that run our city should take pay cuts and have layoffs….I am sorry to say. It is obvious that to many people make to much money for the lousy job that they do and yet year after year they vote to give themselves raises. A normal person would be fired for such a weak job performance. I have lived here all of my life and in the house for 14 years. I have seen my bill go from $60/month to over $400…..something is terribly wrong.