Government Affairs Palo Alto Seeks to Raise Utility Rates

In order to improve infrastructure and increase services Palo Alto is proposing to increase the average residential utility bill to $400 a month. Typically, residents pay around $370 currently but rising costs of water, 100-year-old infrastructure, and a number of other needs are putting upward pressure on rates.

Last week the Palo Alto City Council’s Finance Committee heard a report and recommendation on the topic from city staff but did not take or recommend any action. The committee is expected to hear the item one more time before passing it to the full council late this spring or early summer.

Staff suggested another driving factor in the costs was the fact the city held down cost increases and deferred projects during the pandemic in order to protect customers. The proposal as currently drafted would raise electric rates 5%, gas by 9%, wastewater rates by 15%, and water rates by 10%. Some of those increases would be spread into 2025. Despite the increases, staff noted their rates are still well below PG&E and other nearby utility providers.

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