Energy crisis could hit residents' pocketbooks

Publication Date: Wednesday Mar 14, 2001

UTILITIES: Energy crisis could hit residents' pocketbooks

Council may consider 30 to 40 percent increase to electricity bills

by Marv Snow

The impact of the current energy crisis may hit Palo Alto utilities users sometime this summer, should the City Council approve a recommended 35 to 40 percent increase in electricity rates. The proposed rate increase went to the newly formed Standing Oversight Committee--made up of Mayor Sandy Eakins and Council members Bern Beecham, Dena Mossar and Vic Ojakian--last week for review. The next step is a review by the Finance Committee. Its recommendations will be sent on to the City Council for approval or rejection.

"The committee didn't decide on the rate," Beecham said. "They (Palo Alto Utilities Department) expect to be coming to the council late this spring with a recommendation to raise the rates to cover (costs). This is something they see coming down the road."

Beecham characterized the recent order by the federal government to rebate $69 million in overcharges to electric companies in California as "extremely good."

"It's a tremendous step. It gives us some hope that in the summer California won't be subjected to $1,000 a megawatt," he said.

While there was already a recommendation last year to raise the gas rate in April and again in July, the energy crisis is forcing the utilities department to ask for an increase of up to 1.8 cents per kilowatt hour in July, according to Randy Baldschun of the utilities department.

"The bulk of the rate increase is for electricity wholesale rates," Baldschun said, "that we anticipate for the rest of the year."

The exact amount of the rate increase has not been established, but could be between 30 and 40 percent, he said.

Currently ratepayers in Palo Alto pay 5 cents per kilowatt hour. The maximum increase would be to 6.8 cents per kilowatt hour. 

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