Utility rates go up and up; residents can’t do much but to keep on paying them | An Alternative View | Diana Diamond | Almanac Online |

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About this blog: So much is right — and wrong — about what is happening in Palo Alto. In this blog I want to discuss all that with you. I know many residents care about this town, and I want to explore our collective interests to help ...  (More)

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Utility rates go up and up; residents can’t do much but to keep on paying them

Uploaded: May 13, 2019
I was cleaning out an old file cabinet drawer recently and stuck to the side was a 1993 bill from the City of Palo Alto Utilities Department for $100.67 for the 8-17- to 9-15-period.

Last September 2018, I paid $325.33 for the same period. That’s a 300 percent increase.

Same house, same two residents (my husband and myself), nothing different (except dual-pane glass downstairs, low-water toilets, a streamlined sprinkler system and less garbage.

A few days ago, I got a letter dated May 3, 2019 from the Palo Alto Utilities Department: “Proposed water and wastewater rate changes.” I went into my file and found a similar letter, “Proposed water and wastewater rate changes,” but dated a year earlier April 27, 2018.

The increases are based on the meter size in one’s home (5/8”, ¾:”, etc.), and the amount of gallons of water one uses – under 6 CCF (748 gallons per month) is less expensive that those over 6 CFF. In 2019 the gallons under 6 CCF will cost $2.56 per CCF, while the water over 6 CCF will go up $5.97 per month (per CCF), an increase of 63 cents per CCF.

Electric rates have escalated more wildly since 1993 – I estimate a 350 percent increase in my rates, despite the fact that we use much less electricity now. Our house has electric heating and in winter months (November through April), we only heat the family room and one bedroom because of the high costs. Yes, I wear layers of sweaters just to stay warm. (My utility bill was $605.03 in January 2019; most were electricity charges.)
Our utility rates in Palo Alto are going up, up and up, way beyond what we used to be paying. Inflation went up 67 percent from 1993 to 2019 -- $100 then is now $167.68 in 2019. That’s way less than our utility increases – and there are a lot of “utilities” in the bill from the city.

For example, storm drainage and garbage rates. In 1993 I was paying $3.25 a month for storm drainage. Now I am paying $11.24. My sewer rate was $13.89; now it is $38.66 – a 300 percent higher rate. And refuse rates for one can in 1993 was $14.30 a month; now refuse is $50.07 monthly (3 cans). Of course we are environmentally more conscious and separating our trash, which is good thing, so I can’t complain about that.

Then there’s the utility users tax, based on all my monthly utility consumption. The city of Palo Alto owns the utilities, they charge me rates to keep their staff and providing maintenance of all our utilities, but why then am I taxed on what I use? It’s not like buying a new chair and paying tax on that tangible good. The taxes are on water, gas, electricity (5 percent for each of those), plus a 4.5 percent tax each on telecommunications and prepaid wireless. (No information is given as to whether these rates have changed the last few years). All the utilities users taxes we pay go directly into the city’s general fund, to spend as the city wishes.

Several months ago a resident challenged that tax by filing a suit against the city, saying the tax was unfair, especially because we residents never voted on it, as the law requires. To my knowledge, that case has not yet been settled.

To protest a new utility rate, a resident must send in a written protest (not email) to the city. One’s utility account number must be included in the protest letter, and if you own the property, you must also include the Assessor’s Parcel Number(s) or street addresses of the parcels. Any objections to the 2019 proposed water increases must be received before June 17, 2019.

Practically speaking, the new taxes will always be approved because 50.1 person of all utility users must object in writing. The city knows it will, realistically, never get so many protesters to send a letter. So our utilities rates keep on climbing up and up and there’s not much any of us can do about it.
What is it worth to you?


Posted by Marc, a resident of Midtown,
on May 13, 2019 at 4:41 pm

Much of the utility costs (sewer, water, electricity, gas and garbage) are due to fixed costs. The sewers, water pipes, meters, meter readers, poles, wires, trucks are there whether or not anyone uses them. The actual consumables (water, electricity, gas) make up a very small portion of the overall costs.

So less water usage results in higher per unit costs. More efficient appliances result in higher per KW rates.

The problem then becomes how to allocate the costs across the userbase. No magic. If you want lower totals costs, then you are going to have to eliminate services or removes costs from the utility department.

Get rid of the city employees, out source the maintenance to lower cost providers. Eliminate garbage pickup. Require everyone to go to greenwaste to drop off their cans. Put up with longer outages.


Posted by Resident, a resident of Another Palo Alto neighborhood,
on May 13, 2019 at 5:00 pm

I have a utility pole in my backyard. Each year a team come and trim the trees (not the way a tree should be trimmed but just so that there are no branches likely to bring the lines down). Once the transformer blew at the top of the pole. We lost power but we did not know for a couple of hours that the problem was the transformer in our yard until a team came to fix it. The team consisted of nearly a dozen people and several large trucks.

I mention this because the fact that utility wires dangle through trees all over Palo Alto is a problem. It causes a lot in wages and overtime.

There must be cheaper ways to run a utilities company than dangling lines among trees.

Posted by Max Hauser, a resident of Mountain View,
on May 13, 2019 at 5:48 pm

Overall point taken; however, for apples-to-apples comparisons across years, please always *start* any such comparison by correcting for inflation (a.k.a. currency devaluation). Your $100.76 in September 1993 is roughly $175 in September-2018 dollars (per the imperfect but convenient CPI inflation calculator, which is at least a starting point for quantifying inflation).

By that measure, the bill still increased, but by less than 2:1 (instead of more than 3:1 as claimed above).

Posted by Diana Diamond, a Almanac Online blogger,
on May 13, 2019 at 6:35 pm

Diana Diamond is a registered user.

Max --

"Just a technicality, but I did the inflation comparison. I wrote:

"Our utility rates in Palo Alto are going up, up and up, way beyond what we used to be paying. Inflation went up 67 percent from 1993 to 2019 -- $100 then is now $167.68 in 2019. That’s way less than our utility increases – and there are a lot of “utilities” in the bill from the city."

But we both agree that our rates have increased far above the inflation rate. And thanks for pointing this out.

Posted by jlanders, a resident of Barron Park,
on May 14, 2019 at 11:50 am

jlanders is a registered user.

A short note about electric rates between 1993 and 2018.

In 1993, CPAU (City of Palo Alto Utilities) was still operating under the terms of the 40 year 1964 contract with the Federal Bureau of Reclamation. CPAU purchased 90% of the city's power from the CVP (Central Valley Project) at about 40-50% of PG&E rates. The terms were favorable to CPAU, with PG&E responsible for balancing the variability of the hydroelectric power supplied by the CVP.

In the mid to late 1990's, the California PUC deregulated the electric industry and the California Independent System Operator (CAISO) was born. The energy crisis in 2000 and 2001 caused power and delivery prices to skyrocket just a CPAU was trying to plan for the end of the 1964 CVP agreement.

Among other changes, the new contract only supplied about 30% of the city's power and left the city responsible for balancing power variability from the CVP's hydroelectric sources. Then, in 2013, the City adopted a plan for a 100% carbon neutral supply further limiting the markets where CPAU could purchase power.

Given all of these changes since 1993, it's not surprising that our electric rates have increased faster than inflation.

Posted by Coquelicot, a resident of Ventura,
on May 14, 2019 at 9:33 pm

Coquelicot is a registered user.

Just be thankful you don't have to pay PG&E's electric rates which are 43 - 88% higher for a median residential electric bill and is from power generated with greater carbon emissions.

Web Link

Web Link

Posted by margaret heath, a resident of Evergreen Park,
on May 15, 2019 at 11:37 am

margaret heath is a registered user.

Don't forget that that our city utilities bill contain a built in profit which is transferred to the general fund. A practice the city council instigated a decade or so ago to fill a hole in the general fund, now approaching $20 million a year in utility profits. Some have referred to this as a hidden tax since this is anything but transparent.

Posted by Curmudgeon, a resident of Downtown North,
on May 16, 2019 at 4:19 pm

"Just be thankful you don't have to pay PG&E's electric rates which are 43 - 88% higher for a median residential electric bill and is from power generated with greater carbon emissions."

True on the first point, not true on the second but not thru your fault. Palo Alto's claim of decarbonated electricity is based on accounting gimmicks Web Link Our actual power comes from the same grid that supplies our neighbors. Like, flipping on a light bulb in Palo Alto causes the same carbon emissions as switching on the same wattage bulb in Menlo Park, or Mountain View, or Redwood City, or Los Altos, or ... .

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