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Finance committee forwards 2026 gas cost-of-service study and amended rates to council
Summary
The Finance Committee unanimously forwarded staff's recommendation that City Council approve the 2026 natural gas cost-of-service analysis and amended gas rate schedules, after hearing technical explanations of methodology changes and public concerns about meter-cost accounting and electrification incentives.
The Palo Alto Finance Committee voted unanimously to forward to the City Council staff's recommendation approving the 2026 natural gas cost-of-service analysis (COSA) and accompanying revised gas rate schedules.
Staff from the Utilities Department, led by Director Alan Curatori and Senior Resource Planner Lisa Belair, presented the study and described four primary methodological refinements that drive the proposed rebalancing of rates. The changes include: (1) recalculating monthly service charges using each customer's meter cost via a weighted average; (2) splitting the G2 commercial/multifamily class into three service-charge tiers based on meter capacity; (3) applying an "average-and-excess" allocation to separate energy-related costs from demand-related (peak) costs; and (4) moving to a base-and-excess approach for residential tiers, which staff said…
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