Palo Alto council adopts water, wastewater, electric and gas rate increases; delays permanent gas rebate

The Palo Alto City Council on June 16 adopted a package of utility rate and financial-plan resolutions that will raise residential utility bills overall and set a timetable for follow-up work on rate design and an internally proposed gas rebate.

The council approved a 10% increase in water rates and a 20% increase in wastewater collection rates after public hearings required under Proposition 218. The council also approved rate adjustments for the city’s electric, gas, fiber and stormwater programs (electric +5.1%, gas +5%, fiber pricing range approved for pilot offers, and a CPI-tied stormwater increase). Council voted separately to remove a staff-recommended $1.1 million one-time gas “climate credit” drawn from cap-and-trade funds and to remand that question back to the Utilities Advisory Commission for further study and policy review.

Why it matters: The increases come after multi-year revenue shortfalls and reserve drawdowns, and follow intense public comment focused on regional water planning and the San Francisco Public Utilities Commission (SFPUC) planning assumptions. The decisions raise customer bills this year while directing staff and advisory bodies to return with more detailed cost-of-service analyses, equity alternatives and policy options for cap-and-trade funds.

Most important facts - Water: Council adopted a 10% rate increase (listed by staff as roughly $11.40/month for the median residential customer). Written protests: 8. Customers subject: 19,441 (majority protest…