Large utility rate increases proposed Large utility rate increases proposed (May 04, 2005)

Average residential property could be charged $36.21 more per month

by Bill D'Agostino

Hold on to your hats -- Palo Alto's utility rates could be rising 16.7 percent on July 1.

The average monthly bill for electricity, gas, water, wastewater, refuse and storm drains could jump $36.21 if the City Council approves the recommendation from the Utilities Department. The average bill would go up from $217 per month to $253.

The biggest jumps come from the electricity rate, proposed to go up 19.5 percent, and gas rate's proposed 15 percent increase.

"Although the City of Palo Alto Utilities has been vigilant in managing expenses and controlling operating costs, many external costs continue to increase," according to department spokesperson Linda Clerkson.

Also playing a role is "flat or declining utilities sales due to the soft local economy."

The electricity rate is proposed for such a high jump partly because a beneficial 40-year contract expired this year. "On Jan. 1, there was a sea change in the electric supply for the city," said John Melton, a member of the city's Utilities Advisory Commission. As a result, he added, the city is now purchasing electricity on the open market, subjecting prices to greater volatility.

The electricity rate is still expected to be 28 percent below Pacific, Gas & Electric rates.

The gas increase is primarily tied to the soft economy, increased distribution costs and a desire to boost the reserves, according to Utilities Director John Ulrich. The city's rate will still be 15 percent below PG&E, he said.

The water, wastewater and refuse rates are also proposed to go up 5, 17 and 8 percent, respectively.

The Utilities Advisory Commission is scheduled to discuss the rate increases at its meeting tonight at 7 p.m. The meeting will be held in the council chambers of City Hall (250 Hamilton Ave.).

The City Council approves the rates as part of its budget approval process, scheduled for late June.

Part of the increase is already set in stone. Last week, city property owners also agreed to increase the monthly storm-drain fee from $4.25 per average residential parcel to $10.

Staff Writer Bill D'Agostino can be e-mailed at bdagostino@paweekly.com.

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