Utilities Rates

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On June 21, 2021, the Palo Alto City Council will meet to consider rates for the fiscal year starting July 1. After many hours of tough budget talks and reducing expenses by both the Utilities Advisory Commission (UAC) and Finance Committee, the City will not increase Electric and Water rates on July 1. Storm Drain and Dark Fiber rates will increase by 2%.

Gas Rate Changes

The City is proposing to increase gas utility rates by 3% on average for all customers. Rising costs for necessary infrastructure improvements drive much of this change. These projects will help to ensure a safe, reliable and resilient gas system for the future. Learn more about gas rate changes in Staff Report 11888.

Wastewater Rate Changes

On August 9, 2021, the Palo Alto City Council will hold a Public Hearing regarding wastewater collection rates.

The City is proposing to increase wastewater utility rates by 3% on average to pay for rising wastewater infrastructure costs. Costs are increasing to replace and maintain pipes that transport wastewater (sewage) as well as facilities that treat wastewater. The Regional Water Quality Control Plant (RWQCP) is the wastewater treatment plant owned and operated by the City of Palo Alto that serves Palo Alto and several surrounding communities. Rehabilitation and replacement of plant equipment at the RWQCP that has been in use for over 40 years is necessary to ensure the city can provide wastewater treatment operation safely and in compliance with regulatory requirements for the discharge of treated wastewater 24 hours a day. Wastewater rates are also being updated to maintain cost-based rates and for this reason customers in each customer class will experience different rate impacts. Learn more about wastewater rate changes in Staff Report 11886.

Utilities Rates Overview

We hope this web page will provide you with the information you need to understand the drivers behind this year's rate changes, what the City of Palo Alto Utilities (CPAU) is doing to reduce costs, and the value of what you get for what you spend.

Information on Proposed Rate Changes for July 1, 2021

Annual Review

The Utilities Advisory Commission reviewed preliminary financial forecasts for the Electric, Gas, Water and Wastewater Collection utilities at its December 2, 2020 meeting (Staff Report #11649), and the Finance Committee reviewed the same preliminary forecasts at its February 16, 2021 meeting (Staff Report #11864).

The UAC reviewed staff’s final recommendations for the Wastewater Collection utility at its February 3, 2021 meeting (Staff Report #11882) and final recommendations for the following utilities at its March 3, 2021 meeting:

The Wastewater Collection recommendation was passed unanimously by the UAC (7-0). The Electric, Gas and Water recommendations were passed 6-0, with Commissioner Scharff absent.

The Finance Committee reviewed staff’s proposals for the following utilities at its April 6, 2021 meeting, which were all passed unanimously (3-0):

The Finance Committee reviewed staff’s proposals for the Stormwater Management rate (Staff Report #12169) at its April 20, 2021 meeting, which was passed unanimously (3-0).

CPAU evaluates revenues and expenses on an ongoing basis. Rate changes are typically recommended to coincide with the City's fiscal year schedule (July 1 through June 30). To stay updated on important Utility and City matters, sign up to receive:

City Council Meeting: June 21, 2021

Electric, Gas, Dark Fiber and Storm Water rates, as well as Utility Financial Plans

The electric, gas, dark fiber and storm drainage rates will be considered at the June 21, 2021 public hearing.  Should the City Council take action to approve any or all of these rates, they will become effective July 1, 2021. The City Council will also consider changes to financial plans and/or reserve management policies for electric, gas, and water, and should they take action to approve any or all of these plans and/or policies, they will also become effective July 1, 2021.

City Council Meeting: August 9, 2021

Wastewater Collection Rates

On August 9, 2021, the Palo Alto City Council will consider proposed changes to the City’s wastewater collection service rates that, if approved, will become effective on September 1, 2021. The City’s utility rates and charges are evaluated annually to determine if adequate revenues will be collected to pay for operations and maintenance costs, provide funds for important capital improvement programs to preserve and enhance safety and reliability, and maintain emergency financial reserves.

Pursuant to the provisions of California Governor’s Executive Order N-29-20, issued on March 17, 2020, to prevent the spread of Covid-19, this meeting will be held by virtual teleconference only, with no physical location. To participate please use this link and click on “Join Zoom Meeting” or call 1 (669) 900-6833.

The City welcomes your feedback at the hearing.  All residents and other interested persons are invited to submit written or oral testimony at this hearing. You may also submit a written protest against any or all of the proposed charges outlined above.  If you choose to submit a written protest, the City must receive your signed, written protest prior to the close of the public input portion of the public hearing on August 9, 2021. 

Customer protests must include the City of Palo Alto Utilities account number(s) or street address(es). Protests by property owners must include the Assessor’s Parcel Number(s) or street address(es) of the parcels for which protests are submitted.  You may mail written protests in advance to:  City Clerk, 250 Hamilton Avenue, Palo Alto, California 94301

Except for protests submitted during the public hearing, protests cannot be submitted electronically.  If you wish to submit a protest during the public hearing, please announce over Zoom your intent to do so, and staff will give you instructions.  All written protests must be received by the City Clerk no later than the close of the public input portion of the public hearing.

The City Clerk will follow the guidelines for the submission and tabulation of protests adopted by the City Council on May 12, 2008 as Resolution No. 8815.  If written protests are filed by a majority of the affected wastewater customers or with respect to a majority of the parcels subject to the proposed rates, the wastewater rate increase will not be imposed.

Council Action

After the August 9th Public Hearing is opened and testimony from members of the public accepted, City Council may choose to:

  1. Close the hearing and take action; or
  2. Close the hearing and defer action until the close of the budget adoption; or
  3. Continue the hearing until the end of the budget adoption hearing (should the budget adoption hearing be continued to another Council meeting), and then reconvene the hearing, take any additional wastewater collection rate testimony, close the hearing, and take action.

The latter option has been used in prior years when the budget adoption process has spanned multiple City Council meetings. It is customary in such circumstances to continue to accept written protests up until the hearing is closed. Unless written protests are filed by a majority of affected wastewater collection customers, Council may vote on the proposed rate actions. If approved, the wastewater collection rates will become effective September 1, 2021.

Utility Resources Supply Information

The mission of the City of Palo Alto Utilities (CPAU) is to provide safe, reliable, environmentally friendly and cost-effective utility services. Read more below about these services. 

Electricity

Effective January 2013, Palo Alto achieved an "all green" carbon neutral electric supply portfolio. Palo Alto gets its electricity from several sources. The exact numbers from each source vary annually.

Gas

 The City uses a "market-based" purchase strategy(PDF, 402KB). This means that gas rates change every month based on market prices.  The City of Palo Alto adopted a carbon neutral gas portfolio in 2017. Click here to learn more

Water

Palo Alto is fortunate to get its water from the Hetch-Hetchy system, one of the most pristine, high-quality sources in the country. Like all Californians, we face the risk of not having enough water to meet ever-growing needs in some years; a challenge that is not going away. Recurring drought cycles are a permanent feature of water supply in this state. Learn more about our water supply and through our Urban Water Management Plan

Infrastructure Projects

Electric

CPAU is always performing ongoing maintenance on its equipment. Several infrastructure projects to replace aging lower voltage lines are ongoing. The new, higher voltage lines will better serve Palo Alto's growing electric needs. 

Gas

CPAU leads the industry with an aggressive capital improvement and maintenance program, continuing our work to upgrade, replace and improve the gas distribution infrastructure to reliability and safety. 

Water

Palo Alto's water supplier, the San Francisco Public Utilities Commission (SFPUC) is in the process of completing the Water System Improvement Program (WSIP), a $4.8 billion dollar infrastructure improvement program to seismically retrofit the facilities that transport water to the Bay Area. Debt service costs to fund WSIP infrastructure upgrades will continue to increase over the next few years and will be paid off over approximately 30 years. Parts of the SFPUC’s system not included in the WSIP will also need rehabilitation after the WSIP is completed.

  • CPAU continues a proactive program to upgrade its own water distribution pipelines as well. The City is undergoing a multi-year project to rehabilitate, replace and install new reservoirs and wells. These efforts will bolster our local emergency water supply system. 
  • Both the SFPUC and CPAU projects are investments in the long-term viability of our superior water supply. 

Sewer

CPAU continues to maintain and replace sewer lines that are reaching the end of useful life. Since July 2011, the City has engaged in an industry-leading program to search for and identify any gas line crossbores into sewer pipes. This program will help ensure customer safety when dealing with blocked sewer lines. One of the main drivers for the increase in the Wastewater Collection Utility’s costs (and therefore rates) over the next several years is the cost for wastewater treatment as the City makes several upgrades to the Regional Water Quality Control Plant. Future projects include secondary treatment upgrades as well as replacement of the headworks facility.