Palo Alto UAC to rework gas cost study after council remand; forms review subcommittee

The Utilities Advisory Commission on July 9 voted 6–1 to form a temporary, non–Brown Act subcommittee to work with staff and the city’s consultant on a new gas cost-of-service analysis (COSA) after the City Council remanded the 2025 COSA for further review.

The move follows public comments and council concern about the consultant’s 2025 COSA, which critics said shifted costs toward low-usage residential customers. Assistant Director Carla Daley and Senior Resource Planner Lisa Blair briefed the commission on draft design principles that staff proposed to guide a fresh COSA. Assistant City Attorney Amy Bartel reminded commissioners that “Prop 26 isn’t that deep. It simply says rates need to be cost based,” and that the city can adopt additional policy preferences so long as rates remain defensible under that legal standard.

Why it matters: Council asked the UAC to re-examine the 2025 COSA’s methodology and to provide a revised, transparent analysis the council could consider before new rates become effective in January 2026. Commissioners and public speakers said…