Keeping the lights on: An ongoing report of local power conditions
Uploaded: Friday, April 13, 2001 11:43 a.m.

Residents who use more power will pay for it
Utilities department hoping for increase by July

by Marv Snow

A 43 percent electric-rate hike request for Palo Alto residents, is targeted to take effect July 1 if approved by the City Council. @text:Ratepayers won't feel its effects until the increase is reviewed by the Utilities Advisory Commission and the council's Finance Committee, and finally approved by the City Council sometime in May.

Tuesday night, during a special hearing before the commission, Utilities Director John Ulrich asked for commissioners' comments about his request.

"While it appears to be a large rate increase, the rate stated is far below the market rate."

Ulrich is seeking the increase because of a projected increase from 1.8 cents per kilowatt-hour to 3 cents by the Western Area Power Administration. He is also expecting higher transmission costs from the Independent System Operator as well as higher reliability and Grid Management charges. Charges from the Northern California Power Agency are also expected to rise. The forecasted increases, according to Ulrich, may amount to $53 million.

The rate increase would be different, depending on how much power residents use. More power use means paying more.

For example, a small residential customer who uses 300 kilowatt-hours per month would see his or her bill increase by $4.75, to $18.31, a 35 percent increase. But even with the increase, the rates are still 57 percent below what PG&E charges its customers.

Residential customers who uses 650 kilowatt-hours per month would see their bills climb by $14.38, for a 43 percent rate increase.

Residential customers who use 3,000 kilowatt-hours per month would see their bill jump by 48 percent, by $97.75.

Small commercial businesses would see an increase of 43 percent, up $13.27 if they use 500 kilowatt-hours per month, while a medium user (500,000 kilowatt-hours per month) would see their bill go up by $10,277 per month. A large commercial/industrial user who utilizes 5,500,000 kilowatt-hours would see its bill increase by $114,036, to $379,236.

Commissioner Dick Rosenbaum asked why the department was asking for a rate increase when there was no indicator that the cost of electricity was going to go up imminently.

"It's a prudent step," Ulrich said of passing along increasing costs of electricity to the customer. "We are not giving up on our case with Federal Energy Regulatory Commission and the PG&E bankruptcy. If it warrants, we can come back with a rate increase. We are learning to react and to be far thinking in putting together contingency plans."

"Why not do it (implement rate increase) now?" Commissioner Richard Carlson asked Ulrich. "It would give us the opportunity to shave it (cut the amount of the increase) later. We can put a little money in the bank ahead of time."

"It's better to be safe now than sorry," Commissioner George Bechtel said. "We've been very diligent at looking at our reserves. I'm going to support the rate increase when it comes back before us next month." <@ENDBULLET><@ENDBULLET>




Palo Alto Online
© 2000 Palo Alto Online.