[{"_1":2,"_99":-5,"_100":-5},"loaderData",{"_3":4,"_26":27},"root",{"_5":6,"_17":10,"_18":19,"_20":21,"_22":10,"_23":-5,"_24":-5,"_25":10},"user",{"_7":8,"_9":10,"_11":10,"_12":-5,"_13":-5,"_14":15,"_16":-5},"roles",[],"isAuthenticated",false,"isPremium","planName","subscriptionStatus","featureFlags",{},"insightsBudget","isDevelopmentHost","userPreferences",{},"recaptchaSiteKey","6LcvOJcUAAAAAHsB-gPGfGktcRlKpH7OTIU_dMTD","isImpersonating","impersonation","affiliateStatus","isFreedomPortal","routes/v2/article/layout",{"_28":29,"_30":31},"notFound",true,"relatedArticles",[32,75,87],{"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":48,"_49":50,"_51":52,"_53":54,"_55":56,"_57":58,"_59":60,"_61":62,"_63":64,"_65":66,"_67":68,"_69":70,"_71":68,"_72":73,"_74":73},"mediaId",6592446,"mediaKeyId","2859148-ecd7752e68489c36a5bb980027d8a083","parentId",2859148,"title","Palo Alto utilities staff recommend FY2026 gas rate increases; commission backs one‑time climate credit amid dispute over cost‑allocation study","audioSeconds",4700,"startMs",1680000,"endMs",6380000,"viewUrl","/Search/View?dp=1&key=2859148-ecd7752e68489c36a5bb980027d8a083&start=1680&end=6380","thumbnailUrl","https://assets.pipeline.soar.com/2859148-ecd7752e68489c36a5bb980027d8a083/thumbnail_1680000.jpg","articleUrl","/articles/6592446/Palo-Alto/Santa-Clara-County/California/Palo-Alto-utilities-staff-recommend-FY2026-gas-rate-increases-commission-backs-onetime-climate-credit-amid-dispute-over-costallocation-study","mediaUrl","https://secure.pipeline.soar.com/6592446-ed87eabcb2882810df1dfa9f26a8b466/orig.mp4?Expires=1771195148&Signature=Xekan-c3mXeShILlPO6C9ask3fdYYpeJJ5zveyRDELuOwLVZkuDvb7HeUSbplpInzHocOJiv2xxz-sm37sTA2RE6MC7QS64Ia-WUS5FH55nFlp8Zd5v~h3yzqlpcH6w6WHZwr0Xqk9Gsm~BMfcFBtLRcIV2CDzYwZJHX5V3aMhWzf2sXFiJtld6UmdHv5yiy0LhUKwcZ9Uqtinf4XUmphdP4MFrzIPVJZ32wYuIoFr1lGwAIc6MOYIl6UudnQ5fNpJLUuYZvGadYDTXHvTqB2Wm7mv1APBBA~xoGqRkCYoYD1xHdXmn9WgoDsmRJxBT7X~mIVlYbXvnd1ZAhHbqGnQ__&Key-Pair-Id=KUT5TJCACFTXG","author","Palo Alto City","date","2025-04-03T06:01:15.29Z","article","Palo Alto — Utilities staff on Wednesday recommended the City Council adopt the FY2026 gas utility financial forecast, approve a new cost‑of‑service rate schedule and implement rate schedule changes that collectively raise system revenues by about 5% beginning July 2025. The Utilities Advisory Commission voted 5–2 to recommend council adoption after agreeing to a separate recommendation to use cap‑and‑trade reserve funds for a one‑time residential credit.

The staff presentation, led by Lisa Blair, senior resource planner, showed the updated cost‑of‑service study pushes a larger share of delivered costs onto residential (G1) customers at the median usage level. Blair said the study “is the result of a detailed analysis balancing what our costs are against the safety of the system, the long‑term maintenance risks” and other drivers, and that residential median bills could rise substantially under the new allocations.

Why it matters: The study’s allocation choices matter because state law (cited in staff presentation as Proposition 26) requires rates to reflect cost of service; changes in allocation can shift large sums between customer classes even when overall revenue needs are unchanged. Commissioners flagged that the consultant’s updated allocators and a change in how the general‑fund transfer is allocated increased the residential share of costs relative to the prior study.

What staff proposed and what the commission recommended: Staff proposed a 5% system average rate increase for the gas utility in FY2026 and presented an optional, one‑time climate credit of $73.20 per residential customer funded from the gas cap‑and‑trade auction revenues reserve. Blair said that credit would cost about $1,600,000 and would reduce the median residential bill impact by roughly 2 percentage points (for example reducing a 22% median residential increase down toward 20% in some presentations, or from 22% to 13% when combined with other adjustments noted in the packet).

At the UAC finance discussion, members of the finance subcommittee (Commissioners Phillips, Gupta and Croft) described three alternatives they considered: accept staff’s proposal as presented; recommend drawing the climate‑action (cap‑and‑trade) reserve for a one‑time credit; or recommend a smaller general‑fund transfer than the council’s planning target. Commissioner Phillips said the subcommittee’s “biggest concern … is the 22% increase in the median residential rate,” calling it “excessive and very difficult to swallow.”

After public comment yielded no speakers on the item, the commission voted in two separate actions: first to recommend the council use cap‑and‑trade funds for a one‑time residential climate credit (commission roll call recorded six votes in favor and one vote against) and then to recommend council adopt the FY2026 gas utility forecast and rate changes (motion passed 5–2). The commission asked staff to return with the supporting analysis that shaped the allocation decisions and to continue outreach about ways to mitigate customer impacts.

Key numbers and constraints raised in the meeting:
- System average gas rate increase proposed: 5% (FY2026, effective July 2025).
- Median residential bill impacts discussed in the presentation: staff cited a large median residential increase (presented as about 22% under the cost‑of‑service outcome before mitigation options); staff offered a one‑time $73.20 climate credit as an option to reduce customer impact.
- Suggested climate credit cost to be drawn from cap‑and‑trade reserve: approximately $1,600,000.
- Cap‑and‑trade reserve balances discussed in the packet and at the meeting: staff cited an ending balance for FY2024 of roughly $13.5 million and projected balances in the range of multi‑millions over near years (staff noted a projected decline after planned qualifying expenditures).
- Federal pipeline grant referenced: $16,500,000 (Pipeline and Hazardous Materials Safety Administration grant) was noted as an expected award that staff are reviewing for terms and conditions.

Discussion highlights and staff responses: Commissioners repeatedly pressed staff and the consultant’s cost‑of‑service allocations. Commissioner Gupta asked whether the prior COSA was compliant with Proposition 26; staff answered that the prior study had been compliant. Staff described the key methodological drivers: a revised allocator that accounts for seasonal “peakier” residential usage, a changed allocation method for distribution assets using an average‑and‑excess approach, and a revenue‑based allocation for the general‑fund transfer (the latter reflecting council direction tying the transfer to a percent of gross revenue). Staff said reversing those methodological changes would likely require redoing the integrated study rather than a simple amendment, which would delay rates beyond the July 2025 effective date.

Public outreach and mitigation: Communications staff outlined planned outreach about the rate changes and customer programs to lower bills, saying the strategy will emphasize transparency about system investments, safety and reliability goals, and available assistance and efficiency programs. Staff also noted the cap‑and‑trade fund is eligible to be returned as a non‑volumetric customer credit and that PG&E uses that approach in its territory; the city’s legal review confirmed the credit approach is permissible and can be targeted to a customer class if council directs it.

What the commission asked next: Commissioners asked staff to provide (a) additional detail showing the cost allocators and how changes moved costs between classes, (b) a near‑term schedule for recruitment and staffing items that affect operating budgets, and (c) follow‑up on the federal grant terms. Staff said they will bring additional modeling and reserves detail to future meetings.

Discussion vs. decision: Commissioners distinguished that accepting the COSA (the technical study) is different from policy choices about transfers and credits. Several commissioners said the technical study appears defensible, but some said the commission should advise council to examine whether methodological choices produced a disproportionate residential impact.

Ending: The commission recommended the one‑time climate credit and recommended council adopt the staff‑proposed FY2026 gas forecast and rates. Staff will return with requested breakout and further outreach materials before council consideration.

Provenance: Meeting transcript excerpts from staff presentation, finance subcommittee report and final roll calls were the primary evidentiary basis for this article.","mediaType","Video","parentTitle","Utilities Advisory Commission Meeting - April 2, 2025","oneSentenceSummary","Palo Alto utilities staff proposed a 5% system‑average gas rate increase for FY2026 and presented a one‑time $73.20 residential climate credit funded from cap‑and‑trade revenues; the Utilities Advisory Commission voted to recommend the credit and the overall FY2026 gas package while commissioners debated a new cost‑of‑service study that shifts more costs to residential customers.","taxTitle","Palo Alto, Santa Clara County, California","taxId",3867,"location","headline","","shortSummary",{"_33":76,"_35":36,"_37":38,"_39":77,"_41":78,"_43":79,"_45":80,"_47":81,"_49":82,"_51":83,"_53":84,"_55":56,"_57":58,"_59":85,"_61":62,"_63":64,"_65":86,"_67":68,"_69":70,"_71":68,"_72":73,"_74":73},6592434,"Utilities Advisory Commission finalizes FY2026 work plan after staff and commissioner edits",5572,5658000,11230000,"/Search/View?dp=1&key=2859148-ecd7752e68489c36a5bb980027d8a083&start=5658&end=11230","https://assets.pipeline.soar.com/2859148-ecd7752e68489c36a5bb980027d8a083/thumbnail_5658000.jpg","/articles/6592434/Palo-Alto/Santa-Clara-County/California/Utilities-Advisory-Commission-finalizes-FY2026-work-plan-after-staff-and-commissioner-edits","https://secure.pipeline.soar.com/6592434-26843e8fcb2cc125fee8b0511752a64a/orig.mp4?Expires=1771195148&Signature=jvX2eTyEHFoEtn2G1ie1LPcFI2tw2VHA0srP0qF5H1foyc6wUs8JYNWwOtwk9IcyA7UvI7CWeR7ksw7DEjM5SWpukkIXRP2aT54gbvLv0tjY5EVhKkv0ccGyGVWrMixnbFyJfPNAtvR3lqPUW8kDr6u-hyDn1IkZKM-LxBlUn3QLt9HmmGHo49jKJE0Sl13ZI~uxpdyA1ouDfYrPzQeftC39vQKJz56g2kgRQp~QInuDMRKND78mRwTba2ClDfhNEvY4HJ7b~CLPAvhrmB5YJscBUTHqDNTLdSyX9KwgwLzrnE7v7a-PM0V1z~8JtxW1BhuMfr5GkLMSyZv~7g4XuQ__&Key-Pair-Id=KUT5TJCACFTXG","Palo Alto — The Utilities Advisory Commission completed a multi‑hour, line‑by‑line review of its proposed FY2026 work plan and voted unanimously to approve the final document for City Council consideration. Commissioners debated scope, staff capacity and where to place several proposed topics before consolidating most items into revised standing topics and adding a few distinct priorities.

What changed and why: Commissioners submitted 14 proposed work‑plan items; staff and commissioners iteratively revised the text to avoid duplicative items, to make expectations for staff feasible, and to ensure priorities aligned with council direction. After discussion, the commission accepted language that: (a) adds a distinct review of the long‑term gas utility strategy to be coordinated with the city’s climate and electrification goals; (b) incorporates a data‑center competitiveness and market‑analysis agenda under the electric system/supply standing topic; (c) makes a fiber‑utility pilot review and metric‑based decision point a specific agenda item; and (d) subsumes microplastics/PFAS water questions and emergency preparedness into broader standing topics while asking for explicit performance metrics and an emergency lens for utilities.

Why it matters: The work plan sets the advisory topics the UAC will emphasize when it provides formal recommendations to City Council. Commissioners repeatedly signaled that several items — most prominently a long‑term plan for the gas utility and the fiber pilot metrics — deserve near‑term attention because of budget, equity and policy implications.

Key additions and decisions from the meeting:
- Gas long‑term strategy: The commission added a distinct item to review the gas utility’s long‑term business model, decommissioning sequencing and financial impacts (scope to align with the City’s climate action goals and the SCAP process). Commissioners asked staff to remove strict numeric timelines from the work‑plan text and to align deliverables to SCAP and the utilities’ internal modeling cadence.
- Data‑center market analysis: Commissioners asked staff for an initial scenario analysis showing how large, continuous loads would affect reserves and rates, and for a concise market‑demand briefing the commission can use to decide whether to pursue deeper market outreach.
- Fiber pilot: The work plan now asks staff to return on a schedule that includes pilot metrics and a business‑model review before recommending a full city‑wide fiber rollout.
- Water quality (microplastics/PFAS): Staff advised it will monitor statewide sampling efforts and bring findings back; UAC agreed to subsume the technical monitoring conversation under water quality oversight and revisit when state data are available.
- Emergency preparedness: Commissioners asked that measures of success and a utilities‑specific emergency planning review be included in the resiliency topic; staff agreed to carry those measures into upcoming resilience agenda items.

Final vote and next steps: The commission approved the work plan unanimously. Staff will finalize a redlined document reflecting the commission’s edits and forward the work plan to City Council for its review and approval. Commissioners asked staff to ensure that when items are later brought back to UAC meetings, packet materials explicitly address the metrics and questions the commission identified during the April discussion.

Provenance: The article is based on the transcript sections where commissioners proposed edits, staff explained capacity and policy intersections, and the final unanimous vote to approve the plan.","After lengthy discussion and edits, the Utilities Advisory Commission approved a revised FY2026 work plan for submission to City Council. The final plan highlights grid modernization, a long‑term gas strategy, fiber pilot metrics, data‑center market analysis and water quality monitoring among the commission’s priorities.",{"_33":88,"_35":36,"_37":38,"_39":89,"_41":90,"_43":91,"_45":92,"_47":93,"_49":94,"_51":95,"_53":96,"_55":56,"_57":58,"_59":97,"_61":62,"_63":64,"_65":98,"_67":68,"_69":70,"_71":68,"_72":73,"_74":73},6592440,"UAC backs 5.1% FY2026 electric rate plan as staff outlines grid modernization needs and bond financing",1106,4407000,5513000,"/Search/View?dp=1&key=2859148-ecd7752e68489c36a5bb980027d8a083&start=4407&end=5513","https://assets.pipeline.soar.com/2859148-ecd7752e68489c36a5bb980027d8a083/thumbnail_4407000.jpg","/articles/6592440/Palo-Alto/Santa-Clara-County/California/UAC-backs-51-FY2026-electric-rate-plan-as-staff-outlines-grid-modernization-needs-and-bond-financing","https://secure.pipeline.soar.com/6592440-bbb1a9d59f88fb393bf8d6f551147de0/orig.mp4?Expires=1771195148&Signature=htUVoNSxLijAcBpfO5ejVYpL3BEwM3mv56q8JetPkmY6C0fFzL2NxSgbrSwyYk6cmMpc6Rbt0xO7Jodp4q6I4JzAvR5WcSM18bLHyXhmot~q4NdkZ7~WnoUj1c1JOPzSj2Xgkrebxp4heyhssfzAcCaDE4v09JjvyeRiHUIOQCod42KSgRU1yc8IPSmqYyuMdHOnLMknk2KP7FypcioQsFI3RU6LzU4TEk-F74Q26kDMExuqmDgxif3ej~MCpbqmWuqRyMh6cmN~mMH2~dQD-YYW-~f7OhcUp893FKx~m2haKqcZIZt9cOY-mb2Kr~evZRobv-57Z9Wpqiuy8VCShA__&Key-Pair-Id=KUT5TJCACFTXG","Palo Alto — Staff presented the Utilities Advisory Commission with an electric rate proposal that would raise system average electric rates by 5.1% for FY2026, driven primarily by distribution investments and an expected first bond issuance to support grid modernization.

Senior resource planner Lisa Blair and Jim Stack, senior resource planner for electric, told the commission the FY2026 proposal combines an 11% increase in distribution charges with roughly a 1% increase in supply charges. Blair said the increase reflects the start of multi‑year grid modernization and related financing costs; staff described the FY2026 budget year as the first year in a planned bond issuance to fund larger distribution and modernization projects.

Why it matters: Staff emphasized that the electric utility needs healthy financial reserves and access to efficient debt markets to execute multi‑year grid modernization projects that support reliability, renewable integration and resilience. Blair noted that reserve balances are recovering after earlier drawdowns and that future years could see higher increases depending on transmission, renewable procurement and resource adequacy cost trends.

Public outreach and competitiveness: Utilities communications manager Catherine Albert said the communications plan will highlight the value of the grid modernization investments, the city’s comparative monthly bills and customer programs to lower bills. Staff also presented comparative bill tables showing Palo Alto’s residential bills are lower than PG&E in many comparisons but higher than some neighboring municipal utilities; staff said rate competitiveness depends on long‑term investments and load assumptions.

Commission action: After asking clarifying questions about forecast assumptions and how load growth scenarios (including potential data center demand) might affect rates, the UAC voted 7–0 to recommend the FY2026 electric rate proposal to council. Commissioners asked staff to continue annual financial forecasting and to return with more detailed scenarios that reflect possible high‑load futures.

Next steps: Staff will present detailed budget and financing materials to council and continue public outreach about electric rate changes and the grid modernization plan. Commissioners asked for scenario modeling showing how large new loads would affect reserve targets and future rate paths.

Provenance: The article is based on staff slides and the commission’s unanimous roll call vote recorded in the public transcript.","City staff proposed a 5.1% overall electric rate increase for FY2026 (driven by distribution investments and grid modernization). The Utilities Advisory Commission unanimously recommended the proposal to City Council.","actionData","errors"]

Article not found

Palo Alto utilities staff recommend FY2026 gas rate increases; commission backs one‑time climate credit amid dispute over cost‑allocation study

Utilities Advisory Commission finalizes FY2026 work plan after staff and commissioner edits

UAC backs 5.1% FY2026 electric rate plan as staff outlines grid modernization needs and bond financing