The prices that the City of Palo Alto Utilities (CPAU) and other utilities in the region pay for natural gas and electricity delivered to customers rose significantly this winter. Most residents will see the effects of these increased prices on their bills in the first few months of 2023. The city is urging people to save energy to avoid surprisingly high utility bills and offering several ways for customers to get help paying bills if needed.
As Palo Alto's municipally owned utility, CPAU works hard to keep rates low for residents and businesses, while prioritizing green energy sources and infrastructure to bolster the resiliency of the city's power supply.
This winter, unusually cold temperatures boosted demand for heating even as regional prices for gas hit historic highs. Gas commodity prices for January this year were five times higher than last January's gas prices, which could triple customers' gas bills. Gas bills are tripling instead of increasing over five times because the commodity price is only one component (about 40%) of a gas utility customer's bill. The rest is for the cost of transporting gas to customers and environmental fees, which have not increased significantly compared to last year. A gas customer's volumetric charges will vary based on volume of gas used in any given month. We now have a new tool on our website at cityofpaloalto.org/ReadYourBill to help you calculate your gas bill.
The February 2023 gas rate is lower than January 2023, declining from about $4 per therm in January to $1.26 per therm in February. However, most customer bills in February will remain high, possibly higher than January, as the consumption and charges will be reflective of January usage and rates. Thankfully the declining costs in February will offer some relief for gas bills in March and beyond.
Meanwhile, the cost of electricity has also risen sharply. The recent drought reduced the supply of energy available from hydroelectric sources, pushing prices higher as a result.
Like other utilities, CPAU does not mark up the prices it pays for gas and electric power for our customers. But soaring energy prices mean residents and businesses across California will face higher gas and electricity bills.
As CPAU's director, I know high bills are a tough hit for many in our community, especially right after the holidays. That's why I want to personally encourage Palo Alto residents and businesses to take advantage of our programs and payment plans set up to help you save this quarter.
I also want to assure you that we are doing everything in our power to minimize the impact on your bills, while continuing our focus on delivering safe, reliable, cost-effective, and sustainable services. We are closely monitoring the situation with energy prices and working hard to provide you with the most competitive rates available. We are also collaborating with our legislators and partners, the Northern California Power Agency (NCPA) and California Municipal Utilities Association (CMUA) to seek long-term solutions for keeping energy costs low.
Immediate ways to save on energy and get help with your bills
Free energy advisory assessments: The city is providing free assessments from our home energy advisor, the Home Efficiency Genie, to help people reduce consumption and save money. You can call for a free phone consultation at 650-713-3411 and schedule a home assessment appointment online at cityofpaloalto.org/efficiencygenie.
Free business efficiency service: Businesses can also get a free on-site assessment and customized efficiency recommendations through CPAU's Business Energy Advisor program at cityofpaloalto.org/businessenergyadvisor or by calling 650-761-6417.
Extended payment arrangements: The city is offering payment arrangements for those who need extra time paying their winter gas bills as well as other financial assistance measures. Payments can be extended for six to eight months. Contact Utilities Customer Service at 650-329-2161, visit our Utilities Customer Service page at cityofpaloalto.org/Departments/Utilities/Customer-Service or email UtilitiesCustomerService@cityofpaloalto.org for more information.
Online energy efficiency steps to take now: There are many daily activities all of us can take to reduce our energy use. Visit cityofpaloalto.org/efficiencytips for immediate no-cost and low-cost ways to save energy now and help keep utility bill costs low.
When it comes to saving energy, every kilowatt counts — but this year, especially, your bank account will thank you.
Taking climate action
There's another reason to start making energy efficiency improvements right now. Climate change is a key driver of severe weather, such as what we have seen this winter. This winter our region saw much colder temperatures earlier in the year than we historically experience. Although winters in the U.S. overall are seemingly getting shorter and warmer, climate change also creates conditions for big swings in temperature and severe weather, including extreme cold and heavy snowfall, severe rainfall and flooding, and extreme heat and drought that fuel wildfires.
Palo Alto isn't standing by but is acting now to reduce the city and community's greenhouse gases that contribute to climate change 80% below 1990 levels by 2030. Last month, the City Council named "Climate Change and the Natural Environment: Protection and Adaptation" as a top priority for 2023.
As the impacts of our changing climate, such as extreme weather patterns, become more evident, we must work together individually and collectively to make our 80x30 vision a reality. Steps you take right now to reduce your energy consumption and power bill will also move Palo Alto closer to achieving our community's bold commitment to measurable climate action.
CPAU is at the ready to help you every step of the way.