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Seeking to direct more funding toward residents who faced hardships after a sharp spike in gas utility bills, Palo Alto revised this week its plan to issue rebates to customers.
The City Council approved on Monday a “hybrid” approach that gives a flat payment to every utility customer, with the exact amount based on tiers arranged by bill amounts. Under this approach, customers whose January bills were less than $400 will see a rebate of $70; those with bills between $400 and $800 will get $85 back; and those with bills greater than $800 will receive $100.
In addition, the city is making additional $50 rebates available for the 462 customers who are in the city’s rate assistance program, which serves low-income households; the 747 customers who are in the arrears program because they bills overdue by than 180 days; and those who apply for an additional winter rebate based on their hardships.
In developing the rebate program, the council struggled to reconcile two goals: giving everyone a measure of relief after a startling spike in gas bills and making sure that the program gives a little extra to those who need it most. Council member Julie Lythcott-Haims, who serves on the council’s Finance Committee, spoke for many when she said that there is no “perfect path.”
“We don’t want to give money to people who don’t really need it and we’re not 100% clear on how to identify who does have needs,” Lythcott-Haims said during the Monday discussion.
Prior to this week, the council had considered two options: providing a rebate to each customer equating to 20% of their January gas bills and giving every customer $80.78, which is based on 20% of the average city bill of $403.90. While the council’s Finance Committee leaned toward the flat rate earlier this month, members were somewhat put off by the fact that this option does not differentiate between customers who really need the help and those who don’t.
Resident John Kelley suggested that the city use income levels as a proxy for who should get relief, with rebates focusing on those who make 120% or less of area median income. Neither of the two options that the city had initially presented reach the goal of assisting those most in need, he said.
“Concentrate the relief where it’s needed most,” Kelley said. “I think it should be done voluntarily by people stating which tax bracket they’re in.”
Council member Vicki Veenker supported a hybrid approach in which everyone would get a flat rebate. Those with bills greater than $400 would get an additional rebate totaling about 10% of the amount beyond $400. This plan, she said, offers some help to customers with soaring bills while limiting the level of assistance to those with high gas usage.
“It isn’t necessarily those who use the most gas have the highest income,” Veenker said.
The approach that the council ultimately adopted similarly relies on tiers, rather than exact bill amounts, to determine the size of the rebate. According to data from the Utilities Department, about 7,000 customers — roughly a third of the total customer base — received gas bills greater than $500 in January. Of those, 973 saw gas bills greater than $1,000.
The main reason for the large bills, according to David Yuan, strategic manager at the Utilities Department, was the sharp spike in gas commodity price, which jumped from less than $1 per therm last November to $1.45 in December and to about $4 in January, forcing local gas bills to double or triple.
In addition to these rebates, customers will soon be getting additional payments through the city’s recent settlement with Miriam Green, a resident who sued the city over its policy of transferring funds from the gas utility to the general fund. On Monday, the 6th District Court of Appeal formally approved the city’s negotiated plan for releasing those funds, which will be split into three payments.
“This will put us in position to begin to pay those rebates to customers as well,” City Attorney Molly Stump told the council during her update on the lawsuit this week.
While the amount will be based on customer, a median residential customer is expected to receive $156, according to a city report. Stump said that the city had set aside funds to make the payments under the terms of the settlement, which still has to be cleared by a trial court.
According to previous news stories, the gas overcharge settlement refund can also be requested as a single upfront check if you are 65 or over or in ill health. I checked with the City today and they don’t yet have things set up.
“”We don’t want to give money to people who don’t really need it and we’re not 100% clear on how to identify who does have needs,” Lythcott-Haims said during the Monday discussion.”
Incredible comment on so many fronts from a member of the Finance Committee! who thinks the CC should focused on big global issues like racism and mental health and who routinely lobs fact-free claims like Doria Summa is just another Jim Crow politician, that tiny PASZ is the “loudest voice in the room” and that her neighbors are racist because they dare to object to her building plans??
First, did CPAU consider “need” when they raised the rates for everyone? Or when they delayed paying us back for YEARS in the Miriam Green suit? Or when CPAU continues to waste our money paying for a mailing to compare our water usage vs our neighbors’ during the huge storms even though that practice was found to be ridiculously flawed years ago?
How about paying back EVERYONE who’s been effected as soon as possible?
How’s that audit of all the absurd CPAU fees that make up 1/3 of our monthly bills coming?
Any government official who says things like “”We don’t want to give money to people who don’t really need it and we’re not 100% clear on how to identify who does have needs,” Lythcott-Haims said during the Monday discussion.”, is very worrying. Does she mean a means test and do we really want our city government doing this?
It isn’t just the size of the property, but more likely the number of people living in the house. The more people the more need for hot showers, and heating each and every room. As for water consumption, things like laundry loads are also affected.
Everyone who lives in Palo Alto has been affected by these high bills. All deserve equal consideration of rebate.
Rebates issued to City of Palo Alto Utility gas customers should be exactly proportional to the amount of money that each customer paid the City of Palo Alto for the gas service. The funds that the City of Palo Alto received were because overcharging of gas occurred. The City was overcharged and the City overcharged its customers. There should be no wealth redistribution process going on.
Anything else will just result in a class action lawsuit by the Palo Alto Community against the City of Palo Alto. Didn’t Miriam Greeen just prove this same point in her lawsuit???
Received very high bill for first time since becoming a resident (20 yrs). 2300 sq ft gouse is not a “mansion.”
I think we all should get a rebate – that’s fair.
City Council represents all residents.
I am definitely thinking I did the right thing not voting for Julie Lythcott-Haims. My decision then was based on the outsize campaign contributions from developers. Now I see she doesn’t represent all of us in Palo Alto. Instead we see the knee-jerk comments about social justice. Everyone has been affected by these high utility bills. I remember that, when I took a tour of the house I eventually bought, a Palo Alto utility bill was prominently displayed by the realtor. City of Palo Alto utilities were considered a selling point back then. Some people may have higher incomes (not me by the way) but are paying through the nose for house payments and property taxes so their kids can attend the vaunted Palo Alto Schools. Why should they not also get a decent rebate?
Sometimes the easy way is the correct way! Give everyone an equal rebate and stop overthinking it.
Just based it on our individual bills. When you return something to a store, you want a refund based on your purchase price, not on what someone else bought and returned.
Or maybe the problem is that CPAU is unable to figure that out just like Palo Alto lacks a database to collect employment numbers when planning its business tax like all the other surrounding communities.