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Palo Alto utilities to cut gas rates by 10 percent

Original post made on Mar 4, 2009

Palo Alto is proposing to cut its natural-gas rates by 10 percent in July, though residents should expect to see increases in electricity and water rates, a new staff report states.

Read the full story here Web Link posted Wednesday, March 4, 2009, 8:42 AM

Comments (29)

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Posted by Jo Ann
a resident of Embarcadero Oaks/Leland
on Mar 4, 2009 at 10:44 am

How nice they'll cut gas rates in July when few people are using heat.
And even nicer that we get no warning about the meeting tonight. Feh.

If anyone's going to be at the meeting, maybe someone could question the next round of increases, especially since world oil rates are dropping like a stone:

"The transaction would do little, however, to prevent another major increase next year. Staff is projecting a 15 percent increase in electricity rates in Fiscal Year 2011 and increases of 5 percent in each of the following two years.

Water rates, meanwhile, are slated to rise by 5 percent, largely because of increases in the wholesale costs of water."

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Posted by pat
a resident of Midtown
on Mar 4, 2009 at 10:54 am

I guess we're supposed to be grateful that the city is taking ONLY $16.8 million -- instead of $19.6 million -- from our utility payments.

"This is a commonly used methodology," Keene said Monday, explaining the transfer. "Since the city is facing an $8 million to $10 million general fund deficit, this puts into perspective what it is we're dealing with."

"Commonly used" where? PGE doesn't transfer our utility payments to the state budget.

The perspective the city needs to adopt is to cut costs.

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Posted by Jenny
a resident of South of Midtown
on Mar 4, 2009 at 10:58 am

Then gas rates will be increased again on Jan 1st 2010 just in time for Winter. Meanwhile electricity rates will go up 10%!!! It's the electricity rates which are sooooo expensive not the gas rates.

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Posted by resident
a resident of Adobe-Meadow
on Mar 4, 2009 at 11:15 am

Can we vote on this?

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Posted by Jo Ann
a resident of Embarcadero Oaks/Leland
on Mar 4, 2009 at 11:20 am

Where's the Palo Alto Chamber of Commerce on this? If I were a merchant, I'd be furious that money that could have been spent at my establishment is being diverted to the city.

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Posted by jardins
a resident of Midtown
on Mar 4, 2009 at 11:49 am

Palo Alto has always owned its utilities in order to give its residents lower prices. It's failing to do that these days, so I vote to close down the Utilities Department.

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Posted by YouShouldKnow
a resident of Old Palo Alto
on Mar 4, 2009 at 12:16 pm

Oh yeah, July. That helps. And, it's no discount at all since we don't use heat in July anyway. Doubly no discount since they plan to raise the whole damn REST of the bill.

The price of natural gas went DOWN in 2008. That 20% discount should be made retroactive to Oct/Nov '08 and the refund put toward any current utility bill owed. Just last night as I was walking around my house freezing (we took the batteries out of our thermostat so it won't automatically kick on when the the house goes under 50), I was wondering how much longer this was going to be! We have used our heat one month and four days this winter, never over 58, because of the high bills! We would be getting a BONUS from PG&E. We are getting quite something else from Palo Alto Utilities. I feel like I dropped the soap.


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Posted by Anna
a resident of Downtown North
on Mar 4, 2009 at 1:56 pm

Utility rates are going higher in Palo Alto for 2 reasons. First overhead expenses are rising because the turmoil in the Utilities Department has had effects on operational efficiency, and the ongoing fraud at the Utilities Department is expensive.

Second, transfers to the General Fund from the Utilities Department and other accounting manipulations to get utility money into the city's general operating funds are at an unprecedented high. THis money is used to fund cushy union contracts, and to pad the pension fund payments that allow city workers to retire in their 50's with lifetime inflation-adjusted pensions and full health benefits.

You're freezing in the dark so PA employees can have retirements you can only dream about.

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Posted by Eric
a resident of Greater Miranda
on Mar 4, 2009 at 2:02 pm

If this is the way our new City Manager Jim Keene plans to finance our City we're in for an expensive rocky ride for the next few years.

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Posted by YouShouldKnow
a resident of Old Palo Alto
on Mar 4, 2009 at 3:06 pm

Supposedly we are still paying higher rates because of the City and Enron, purchase price at an inflated rate, bad investments, whatever.

Thing is, Enron was years ago now. In the past, and I mean 15-20 years ago, Palo Alto utilities were significantly lower. Maybe 30% lower than my PG&E paying friends with similar domiciles in Mountain View.
I took utility expense into consideration when deciding between Palo Alto and Mountain View before I had kids and schools became the priority.

Then the tech bubble hit and the City started to slowly and quietly raise rates. Fair market value and all that. Same excuse as $3000 rents on musty 500 sq.ft. studios with a microwave on the toilet tank qualifying as a 'kitchen'. (I'm not joking, we looked at one of those).

Then the bubble burst, and along with that, so did the income of many residents. The Utilities continued to go up, and exceed the supply and demand pricing. The surplus of $ in the utilities fund proves this.

Now the bubble hasn't only burst, but the residue has been washed clear off the sidewalk. Residents are in worse financial straits than ever before and our utilities continue to rise, the City keeps funding unnecessary projects and the politicians see the surplus as a healthy Christmas account to plunder. Now we are being told we are going to get a break for 6 warm months on gas, only to have it go back up again in January of 2010 (didn't it just go up THIS Jan too? According to PAU 8 mos. ago that was a slated increase). Then, in case we were planning a mind trip to a Fools Paradise anticipating a small break, we are told that we will have an increase in the REST of our utility bill. So, what this all boils down to is, within a year we will still be paying an elevated gas price the City blames on Enron, PLUS more on electricity and water. Screwed, with no money left to pay for dinner first!

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Posted by Walter_E_Wallis
a resident of Midtown
on Mar 4, 2009 at 3:15 pm

Walter_E_Wallis is a registered user.

I think they heard the villagers getting the tumbrels ready and the Madam G. sharpened.

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Posted by 50-year PA homeowner.
a resident of Community Center
on Mar 4, 2009 at 5:24 pm

Our utility bills are outrageous! 17% of my total annual income has gone to utilities this past year, and the city is planning on MORE hikes? Just because the City Manager has a high salary, and evidently the City Council members do also, there are those of us living on a very low fixed income that find Palo Alto Utilities way beyond what we can afford. The least that can be done is to use all of the Utility surplus fund to relieve the long-suffering home owners, not put it into the the city's General Fund. PG&E couldn't be worse, why not use them instead of Palo Alto Utilities?

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Posted by YouShouldKnow
a resident of Old Palo Alto
on Mar 4, 2009 at 6:01 pm

Please don't forget the freakishly high RANDOM bills people are receiving. The 300, 360, 325, 700!!!, 300 type thing happening to different households, and when utilities is contacted, they receive a response that isn't only unsatisfactory, but really borders on 'it is what it is because WE SAY SO'.

Think about it. How often do you discuss your bills in detail to your neighbors? Not really a commonly shared topic. What a perfect scam, if that's what it is. Select a certain number of households to get a HUGE bill one month, other households the next and so on! That would really generate some income for the City. I have talked to a lot of people around here about anomalies in their utility bill and several have received one outrageous bill that has no valid justification. Even people who have been out of town with everything turned down or off have received one for that very same time period! A computer glitch or something more sinister? Maybe we should do a Palo Alto poll and see how many people this has happened to!

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Posted by rolling eyes
a resident of Crescent Park
on Mar 4, 2009 at 7:44 pm

i think a poll of the average bill broken down gas, electric and water would be great. including the square footage of the home would be helpful too in order to give it some basis for comparison.

the chart that is included in your monthly bill never seems to correlate to the monthly "list" of this year vs. last year. i called one time and tried talking to two customer service people-they both said the chart is incorrect and they "don't know why its printed and put in our bill." this made me furious. what are they doing over there? and does this mean i'm the only one trying to make sense of my bill?

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Posted by YouShouldKnow
a resident of Old Palo Alto
on Mar 4, 2009 at 7:57 pm

I know what you mean! Some of the numbers have been so off that we have had people out to see if we had broken pipes or gas leaks! That is based on an extreme, not just a minor suspicion!

I know of more than one person including myself that has gone in person to the utility dept. to do an itemized breakdown and it still doesn't make sense.
And it still all boils down to too bad, you want to make payment arrangements?

Words of warning: if you decide to go in and do the budget by year where plan you pay the same amount monthly you'd better make sure you have not received one of the freak bills or had unusual use or your rate will be based on an artificially or unusually high past billing.

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Posted by rolling eyes
a resident of Crescent Park
on Mar 4, 2009 at 8:10 pm

Does anyone know the name of the President (or CEO?) of the Palo Alto Utilities is? I can't find it on their site and would like to contact he/she directly.

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Posted by Kate
a resident of Duveneck/St. Francis
on Mar 4, 2009 at 9:21 pm

To rolling eyes:

The head of Palo Alto Utilities is highly paid Valerie Fong. But she's a little busy now with a federal investigation of the utility department.

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Posted by George
a resident of Old Palo Alto
on Mar 4, 2009 at 10:08 pm

This is called stealing. It's disgusting. Just tax us to death scum lords.

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Posted by Outside Observer
a resident of another community
on Mar 4, 2009 at 11:33 pm

Here's one for Walter, and everyone else.

The last Professional Engineer to run CPAU was Ed Mrizek. He retired in 1999.

After that the City hired Benest, and Benest hired Utilities Director John Ulrich. Remember him? He and Benest and City Attorney Baum are the ones who gave Enron 25 million....

Then, under Ulrich's watch there was the moonlighting scandal. Ultimately Ulrich was forced to retire over that one after it got into the press, but only after Benest had dragged things out long enough that Ulrich was "vested" and got a full retirement and lifetime free health care.

Then Asst. CM Harrison and Admin Svcs Director Yeats ran Utilities, and supposedly rooted out all the corruption in Utilities. They are the ones who appointed Dornell and Ghaffari. The very managers that are now the center of the DOT investigation.

Well, Harrison moved on to employment in Santa Clara after being the subject of a harassment scandal.

Yeats retired with full pension and lifetime free health care.... (is there a pattern here?) I won't even go into Yeats responsibility for the accounting practices that lead to the Childrens Theater fiasco.

And Benest hired the new director Valerie Fong. Under her watch we've had the rate hikes, billing spikes, reserve surpluses, and general fund transfers.....

And there is more that is slowly working through the courts. The political firing of meter reader Brandon Porter. Chump change in the scheme of things, but expect another $$$ payout to Mr. Porter from City Attorney Baum.

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Posted by Resident
a resident of Charleston Gardens
on Mar 5, 2009 at 8:17 am

I recommend anyone having billing problems to go down to City Hall and discuss the problem with them. If you call you will get some low paid employee with given talking points. I had a billing problem which was resolved in my favor very quickly when I showed up at the Utility Dept office.

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Posted by okay
a resident of Greenmeadow
on Mar 5, 2009 at 12:06 pm

How 'bout we all go down to City Hall? Seems we're all having billing problems with utilities.

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Posted by genius
a resident of Midtown
on Mar 5, 2009 at 3:19 pm

The Council Members are geniuses. Politically to appease residents cut gas rates, but during the summer time when residents use less gas so no actual dollar loss to the city. Political gain and no real monetary damage to city coffers.

And then raise electricity and water rates during the height of summer when people most need air conditioning and water to cool down. So actually, net increase to city coffers.

Genius. I must commend the city in its expertise on extracting new money from residents in every conceivable way possible.

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Posted by bruce
a resident of Crescent Park
on Mar 5, 2009 at 4:09 pm

> commend the city in its expertise on extracting new money
> from residents in every conceivable way possible.

This is the new total war method of doing business that has pervaded the
country and led to the collapse of people actually being able to live and
get what they need at a reasonable price.

If you are not a big shot you deserve to be screwed over in every possible
way and if you are you are screwing eveyone else over so you can afford
the BS that your peers are foisting on everyone anyway.

The bloated financial over-class has everyone else over a barrel, and
instead of trying to fix it everyone else thinks they can find a way to
join in on the fun. We deserve what we get only because of the sell

I am sick of being screwed over by companies that have used the same
games that Enron used to screw CA in 2000. Nothing happened to these
people except they dispersed and spread around the county teaching
their methods to others. The price of gas has proven to be speculation
and if the citizens of the country do not figure out some way to stop this
and take control we are going to be virtual slaves to these bastards.

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Posted by Questioning
a resident of another community
on Mar 5, 2009 at 6:03 pm

Outsiude Observer is right about the atmosphere of entitlement, corruption, and incomptenece that blossomed in the Benest-Harrison-Yeats-Baum years. The scandals appear to be contiuuing too, judging by the current federal investigation of the Utilities Department.

This crew was great at feathering its own nest - one example: Benest and Yeats made sure to gull the City Council into increasing City retirement payouts formula by 35% the year before, just coincidentally, they themselves retired - and avoiding accountability.

The only way to change this City of Palo Alto organizational culture is to broom out all those in City of Palo upper management still in their positions who have been part of this whole sorry story of misfeasance, malfeasance, greed, and corrupt practices, including City Attorney Baum, HR Director Carlsen (the hatchet man for Benest and Harrison), PW Direrctor Roberts, and Utilities Director Fong.

City Manager Keene and City Council need to step up for clean government.

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Posted by Methane
a resident of Duveneck/St. Francis
on Mar 5, 2009 at 8:17 pm

Natural gas prices in the US.

Web Link

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Posted by YouShouldKnow
a resident of Old Palo Alto
on Mar 6, 2009 at 2:04 am

So we have a consensus.

Now, what can we actually DO about it? Getting ride of just about everyone from just over department managers right on up to the top sounds great to me!

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Posted by Questioning
a resident of another community
on Mar 6, 2009 at 7:09 am


City Council and City Manager should act to clean house. If they do not do so, a grand jury should be convened to shine a bright spotlight on the whole mess and then have it all cleaned up by the courts.

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Posted by YSK
a resident of Old Palo Alto
on Mar 6, 2009 at 12:43 pm

The City Council and Manager are part of the problem!

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Posted by Palo Alto Green tax
a resident of Adobe-Meadow
on Mar 6, 2009 at 2:35 pm

Everyone, please cancel your Palo Alto Green subscription for starters and let them know why. It's because we don't trust the council anymore.

Sorry, but further commenting on this topic has been closed.

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