HomeMy WebLinkAboutRESO 6711. .
RESOLUTION NO. 6711
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO
ALTO ADOPTING A GAS RATE REFUND PLAN
ORIGINAL
WHEREAS, actions cf the Palo Alto City Council will
result in the availability of funds to be refunded to Palo Alto
gas rate payers; and
WHEREAS, the City of Palo Alto has de:ided to forego any
extensive gas exploration program at the present time;
NOW, THEREFORE, the Council of the City of Palo Alto
does hereby RESOLVE as follows:
SECTION 1. It is hereby found to be in the public
interest to grant a refund to the rate payers of the gas utility
of the City of Palo Alto in the dollar amount by which the Gas
Transfer Stabilization Reserve and the Gas System Improvement
Reserve exceed a total of $5.5 million dollars as of .June 30,
1988.
SECITON 2. Refunds as a lump sum payment, showing as a
credit on the customer's monthly bill shall be made as soon as
possible during the 1988-89 fiscal year during or after the July,
1988 billing cycle. Refunds shall be made as a pro rata share of
each customer's gas consumption in relation to the total gas
consumption for the City of Palo Alto for the period July 1, 1987,
through June 30, 1988, which will be the "RefuuJ Billing Period".
Staff shall implement refunds for present and former
customers of the gas utility as described in the City Manager's
Report accompanying this resolution.
INTRODUCED AND PASSED: July 11, 1988
AYES: Bechtel, Cobb, Fletcher, Klein, Levy, Renzel, Sutorius, Woolley
NOES: Patitucci
ABSTENTIONS: None
ABSENT: None
. .
rrrectorof Utit
ACB/kr
2.
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REVISEn 6 _. 9
BUDGET 88-89 Ju1y 7, 1988
THE HONORABLE CITY COUNCIL
Palo Alto, California
Att•nt'fon: Ffnan~e and PuMic Works Cotmrfttee
Pro~osed Gas Rate Decrease. Customer Refund and Suspension of Gas Rate
Pol cy
~embers of the Council:
Thf s report recoimends a suspension of the City's lon~standfn9 po11cy
to set Palo Alto's retail gas rates equal tc Pacific r,as and Electric
Company (PGandE) rate levels, and reauests ap~rova1 of a 15 percent
rate decrease effective July 11, 1988. In addition. staff recommends
that a lar~ portion of ratepayer revenues previously reserved for
financfn9 an extensive Gas Exploration Program be Plllde availahle and
distributed to the City's gas customers in the form of a refund of
approxf!l1!te1y $8.5 ~1111on be~fnnfn~ in the inonth of October. 19SS.
This report also discusses a recent landmark decision rendered by the
CaHfornia Public Utf11tfes Commission (CPUC), the status of the City's
Gas Supply and Deve1oP1"!nt Pro.1ect. the much 1,.,roved financial
condition of the Gas Fund, and related topics which bear directly u~n
the·four reconwnendatfons contained fn this report. The report is
divided into four sections, each with its own background discussion and
specific recollllftendation. For c1ar1fication purposes. it ney be noterl
that the proposa1s for a rate decrease and custorner refun~ are
independent of each other.
Recol'fW"endation to Suspend the City's Gas Rate Policy
Since the early 1S50's, the City of Palo Alto has char~d natural qas
rates equivalent to those char~d in surrounding co11111unitfes by PGandE.
This policy has endured out of co~t1tive necessity and has giYen
implicit recognition to the imprudence of raisin~ ?alo Alto•s retaf1
rates above those in surroundf nq areas. Oespite a brief i>erf od durin~
FY 1975·76 when Councf 1 found ft necessary to raise Pa1o Alto's rates
12 percent above PG&ndE's rates, the Cfty"s gas rates have trac~ed
P66nc1E rates. However, due to a serious or1ce sQueeze sftuatfon
arisin~ with its wholesale supplier. the lias Fund experienced four
years of deficits between 1974 and 1981.
A decision to discontinue the City's lon~standfng ~s rate policy !11.!St
nec~ssarf1y be based on the expected financial health of the tltility
and an assessment of the impact of prospectf ve wholesale gas purchase
CMR:1~8:8
cost·.;. ~ecause the cost of purchasfnq aas wholesale froP.t PGantff
represents the lar~st expense of the Palo Alto Sas utf lfty. no issue
is r.iore flf'f'ortant to the financial fntearf ty of the Gas Fund than
obtainfna a fafr PGandE resale rate. Ourfno FY 1983-84 such a fafr
resale fornu1a was f1na'1y adoi>ted hy the CPUC, which resulted 1n ma;\or
rate relief to the City and effectively beqan to turn around the Gas
Utility's financial condition (CMR's:48~:~ and 164:4). The rdte relief
was timely as ft enabled the City Council to establish a Gas System
l"'f>rovernent Reserve (SIR) for ffnancfr.n specific progra"'5. inch1dfnq
the Gas Supply and Oevelopment Prooram. Earlier in 19R3, Council had
directed staff to secure low cnst supolernental su~p11es of natural gas
f n an effort to e~:b1fsh future resources less expensive than P~andE
an1 effect a sa~fnqs to the Utility an~ its ratepayers (CMR:370:3l.
Althouah the ffnancia1 condition of the r.as Utf 1itv was be<rinnfnc to
ftfflrove sfaniffcantlv. a decision to suspend t~e city's aas r!te.polfcy
was necessarf 1y delayed ~u~ to an unfavorable resale rate forttiUla
~roposed hy PGandE w~ich wou1d have eventually re~1aced Palo Alto's
existing resale formJla. The new resale formula could have erode~ the
Gas Fund's tllBr~n approxirriately 50 percent and cost the Cfty an
additional S4 nt111ion annually fn purchased ~s costs. T~ adverse
rate proposal surfaced in the 1q86 CPlfC rate proceed1n~. Con-
se~uently, suspension of Palo Alto's r..as Rate Policy had to await the
outco~ of these CPUC rate hear1n95 which ~estructured gas rates and
re9t1latory J)011cfes in California (CMR:583:6l.
On Oeceat>er 9, 1987. the CPUC fss~d its long awaited decision (No.
e;-12--0~9}. Whtle this 1andli9rk decisfon has altered the desf an and
for"l.lla! of retail. resale. and transportation rates in Cat1forn1a,
Palo Alto wai not adversely impacted by adontf on of a new resale
formula. 8asf ca 11y. the Cf ty prevailed 1 n f ts 1r~11ents that PGandE' s
forll'Ula o~rcharged resale custulners fm• expenditures 1ncll1"'red by
PGandE on be ti al f of 1 ts own re ta 11 di stri but ion eust~rs. One outcome
of the ttec1sfon fs that Pa1o Aito will essentially pay a cost of
service based rate to PG~E, which results fn a slf oht increase fn
purchased gas costs as a re3ult of chan~n~ to tN! new resale for"l.lla.
Since the decision renufres Pf;and£ to net'IQtfatP. nev 5ervice anr~nts
with its 1ar91! custo.rs; staff will seek aporova1 of a new ~neral
servf ce a~eewnent ~th PGandE in the 1110nths ahead.
The s;onfficance of the CPUC decision to Paio A1to is far-reachfno.
Ttie fact that a Plll.1or revision fn resa1P. forl'ltllas did nnt result in a
large increase tn purchased aas costs to the City wtll assure that the
Palo Alto Gas Utf lity w111 re1111.1n ffnancf a11y stron9 in the years
ahead. Of further sianff1cance is the fact that the Cl>ut's adol't1on of
a reasonable res~le for1'1Ula hased on a cost of service a11ocatfon
tnethodolOiJY will substantfally remove the burdenSOllle political cun·
CMR:198:A
. .
sirlerat1ons from resale rate di!s1gn, which had plal'Ue~ the C1ty•s
earliest resale forfllllla in the 1970•s. Finally, an fronf c outcome of
the decision f s that by succeed1na fn "8fnta1nfna a 1ow wholesale rate,
the City's !MS exploration option fs sf«mificantly less attractive.
For the foreaofn~ reasons, staff recnmmends a departure fro~ the Citv's
long standfna policy to char~ qas rates eouf valent to PGan<tr's reta11
rates and that the City's rates be reduced below PGandE's rates. In
this manner the ratepayers fn Palo Alto wfll directly benefit from the
City's efforts to lftinhrize fts 01>eratin!'.J costs. At the sa111e tfme, qas
rates, lfke electric and water rates. wf 11 become based on a fiscal
year bud~t and reflect similar rateM1.kin~ oh.iectives and policies.
~coft!Plendatf on to n1scontinue Plans Reoardfng an Er.tensive Gas
txpioration Procn"afll ·
One of the ll'IC>re prom1sin~ approaches to secure 1ow-cost ~s supolies
involves a ~s exploration alternative fn Cal1fornfa's Central Valley
(CMR:370:~). Clearly, acou1r1no ~rship in reserves throunh a
successful drillf"~ progra~ could offer the City a hed91! a(Jainst risin9
91s prf ces and enable the Gas UtiHty to exercise increased control
oyer its lar~st expense. However. as recoan1zed in staff's initial
assess"'!nt. a n!IMer of ina.ior ohstac1es are associated with thi !•
aoproach.
Certainly one s1Ql"lff1cant obstacle is rafsinc the reoufsfte ffnancfn~.
Jn the first several years nf gas exploration, a substantial sum w~uld
be required •up front• to cover the dri11fn~ costs ~fan adecuate
number of we11s -to Meet Palo Alto's averaoe qas dePBnd. Such a sinn
could aJ;proach u; "'1111on. otner pertinent· factors relevant t<' a
decision to explore include the prevailing and proJected well-head
price of natural ~s as well as the el{J)ected PC,andF wholesale rate.
Perhaps the lar~st barrier confronting the Citv is obtainino a
lono-term reliable (finn). transfrissfon apreement with PGantlf at a fair
rate. In an effort to remove the rate and regulatcry obstacles
associated with acquiring ~ranstnission service from PGandE, the City
and a lar~ nul!t>er of other interested parties ha¥e actively pursued
remedies fn onaoinQ CPuc·rate oroceed1n"5 since 1984. As a result of
an extensive CPUC fnvestf ~tfon into t~ transportation practices of
investor-owned utilftfes, Pr..andE p~e!~nt1y ~ffers transmission
services. f4oweV@r, the rates are "lt!ry hi ah for such servf ces and
thereby adversely affect the ec«"nomcs of an ertens'f ve Gas Exnlo•·,ation
Program. On the other hand. ff the City elected to pursue a limited
drf 111n~ or acquisition proaram to acoufre ~s for its interruptible
customers o"ly. then PGanrlE's short-term transmission serrice mfnht
acconwmodate that cr~nario since the rate ~ould be lower.
While a nutftber of issues were addressed in CPUC evidentiary hearfn~s,
one 1""°rtant issue which has a significant affect on the economics of
CMR:198:f'
~s explorati~n in California has vet to be examined. The unresolve~
1ssue is a ·~as ~ather1ia charoe• co11ected hy Pr.andE In addition to
the transportation rate ft charoes for a11 ~s pr~rluced and transporte~
fn California. Aside fro~ the ouestf onable rnerft of this char~. the
affect of this ~therin~ charf.le fs to reduce the eeonoM1C
attractf veness of qas exp1orat1on in California. Althounh the CPllr.
promisP.d in 1qs6 an fnvestioation into the need for the charoe, no such
fnvestf ~tion has taken place. Recently Pr,anrl£ reouested that any such
investi?ation be deferred to a later date.
One factor which could mi ti oate the adverse iq>act of the PG1-E ~therf n~ charoe is a siqnfffcant rise in natural ~s prices at the
wt.?11-head and an attendant increase in Palo Alto·s wholesale rate with
PGandE. Since the economic sav1ngs of a gas exploration alternative
depend to a lar~ extent on the well-head price of natural gas and the
PGandE wholesale r&te. the merit of this apnroach improves with risin~
gas prices. HQweyer, in recent years. gas prices have dropped
substantially. In particular, the 1986 plutrmet in ofl prices and its
accompany1n~ influence on natural ~s prices materially affected the
econo~ics of the City's ~s exp1orat1on ootf on. In 1ge3 the City paid
Pt~ndE 46 cents per ther~. Today that wholesale rate has dropped
approxf Pa.tely 40 percent to 27 cents per ther~.
tn su"'"8.ry, the feasibility of embarkfn~ upon an extensive Gas
Exploration Proora~ in California has been adversely affected by
several devel01>mP"•!. Certainly the unavailability of lon~term, firm.
trans"'1ssion service priced ~t a fair rate fs an important deficfencv.
Secon~ly. an excessive gatherin~ char9! for talffornfa ~s production
places an a~de~ burden UT>On exploration in the State. Finally. the
drop in natural aas prices which be9an January 1, 1985 has effectivelv
recaptured a 1ar~ ainount of the savfn~ whf ch would have occu,.,.ed
under much hi~r prices. As mentioned earlier. the City's wholesale
~s price remafns at a reasonable level in accordance wfth the recent
CPUC decision. Rased on these factors and the contfnufno uncertaf"tv
of the CPUC to resnlve l'Bny outstandino issues, staff has' conclude~ ·
that an extensive ~as Exploration Pro9"am is not fn the City's best
interests at this tine. In the eve"t circul'ftStancP.s chanoe, the City
can re-evaluate the option at that tftne. ·
The staff's recomnendatfon to df scontinU@ plans reoardino tftt! extensive
Gas Explor3tfon Program does not preclude the City.from pursuin~ other
less •capital orfenteo• approaches to acoufre supp1efftenta1 supplies.
For exalftP1e, Palo Alto began to purchase qas on the spot market in
Septellber, 1qs7 and has purchas&d 100 percent of its needs fn five of
the 1ast seven months from three different sources located f n the
Southwestern United States. The savin~ to the City below PSandE's
rate is approxfll\ltely $160.000 for that period and f s the first til'l'e
f n 58 years that the C;ty has purchased natural 93S fr°'" I supplier
other than Pnand£. It is staff's fntentf on to retain the spot f'llitrket
purchase approach as a vtahle alternative to PGandE svstelft oas purchases. · ·
CMR:198:8
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Proposed Customer Refund Plan
With reoard to f1nancfnQ the extensive drillinq costs atten~ant to the Gas
Exploration Pro9J"am, it was noted earlier that funds ~ere set aside for this
~urpose heg1nnfn9 1n FY 1983-84. While a nu!Tlher of key factors pertinent to
ultimate resnlutinn of the vf a~f 1ity of a Gas Exploration Pro~am were bein9
addressed at the CPUC between 1984 and the e~d of 1987, the Gas Utility was
financially able to build up reserves sf ~fffcantly during this period. For
the current fiscal year, the balances in the System Improvement R~serve and
Transfer Stabilization Reserve are projected t~ be aoproximate1y $5 million and
$9 million, respectively, as of June 30, 19AA.
Since an extensive Gas Exploratinn Pro9J"a~ is not deemed a viable approach to
pursue in today's ntarket, staff reco11111en~s that a l'ajor portion of the revenue
earll'lltrked for the Gas Supply and Development Progra~ he refunded to the
ratepayers in the form of a credit nn their utility bill. The proposed refund
amount is approximately sa.s million and is based on the difference hetween the
pro~ected reserve balances at the end of the current fiscal year (approxi-
mately $14 million) and the desired reserve balance to begin FY 1988-89 ($5.5
TI'illion}. The $5.S million reserve balance retains S3.0 million for a limited
gas exploration option ff developments arise in the futur~ which justify such
an approach or can be used to fund other Council approved protira~s.
The proposed refund olan is similar to the plan used successfully by the City
fn 1980 and 1985 (CMRS:37~:0 and 494:5}. Aecordin~ly, staff reco111Mends Council
adopt the refund plan described below:
o Refund to be ·ma~! in a one ti1ne credit to each oualifvf"o customer. Refund
will be shown as a credit o. the custoiter•s 111nnthly ~s bill and a
statement will accompany the bill fully advising the customer reoardin~
the refund. In the event the credit exceeds the total c:Jas bill, the credit
will be carried forward to the successive YnOnth(s) until it is zero.
o Dishurse"'!nt of the refund will be~n durin9 the Octotier 19~8 hillfn~ cycle.
The 1110st recent twelve month period prior to df shursP-ment is the period July
1987 tnrou~h June 19R8, which will be the •refund bfllin9 period•.
o Oualifyino customers are all active qas users at the til'le of ~f shursement
who purchased gas during the refund billin~ period. A general attempt will
not he ,iade to refund to former Palo Alto ~s custolflers, since findino such
custoP"ers could be eJtremely costly, time-consumfn~ and aenera11y
unsuccessful as current addresses of all such customers are not available.
However, forl!ler customers who coll'e forward to initiate a request can re-
ceive a refund, if they W@re customers dur1n9 the r~fund bf 11fn~ perio~. A
notice re~rdfn~ the procedure to obtain a refund will be provided fn
local newspapers. Also, customers who have moYed within the City durino the
refund billing period ran apply for an additional credit for ~as usaoe at
their previous Palo Alto address. Applications for this additional credit,
CMR:l9A:fi
as we11 as !"e01Jests for refuntts fro"" for111er Palo Alto custo!fters, will he
tccepted no later tha~ March 31. 1989. Our experience wf th the last
refund f n 1985 was that very few forrner cu~toners applie~ for a refunrl.
o The customer's refund will be based upon their consumption durinc the
refund bf llf n~ period, prooor1:fonate to Palo Alto•s total ~as consu!'lflt1on
by active customers durfng that period. For example, ff a customer has
been a Palo Alto qas customer since November of 19B7, then the refund will
be based upon rec~rded consumption during the period November 1, 19~7
through June 30, 19AR.
o Invest1t11tfon of the al'ltOunt of refund will be !'Y.l~e upon customer innufry and
adjustments will be made ff dee111ed appropriate, when a present custorner
disputes a refund.
o The recol'l'llended refund forniula fs as follows:
$8,500,000 = Refund Rate/Ther'lTI fofa1 therms sold to
exfstino customers
durf n9 FY 1987-88
Refund Rate/Therm X Respective Custo..ers Usage Ourfn~ FY 1987-~B =
Customer's Refund Credit
o Applyfn~ this formula, custo1t1er refunds will average approximately
$200,00/resfdential customer. Sl,250.00/ccmmercfal customer, and
$11,500.00/industrfal customer. A refund at this level represents
approximately a seven f!IOnth period of no ~as charges to the customer.
Proposed Gas Rate Decrease
Based on the fair resale rate treatment established by CPUC Decf sion No.
87-12-039, the r,as Fund should re"'8fn ffnancially strong in the years ahead.
While future resale rate increases will undoubtedly occur, PG~ndE reta11 rate
levels should similarly rfse. Consequently, staff believes that the Gas ~und
f s well positioned to reduce fts retaf 1 rates (except G-50 rates) below PGandE
rates on July 11, 1988 and that the C1ty•s rates should continue to rell\8f n
below PGandE ~s rates fri the years aheact.
Accordingly, ft f s staff's reco~ndatfon to reduce Palo Alto's retaf l ~s
rates approximatelv 15 percent or S2,745,000 on a" annual ~asis effective July
11, 1988. If Council approves thh pr-oposal, the City's ~s rates will drop to
their lowest level sfnce July 19~1, and ft woulrl !'l!rk the first time in at
least 35 years that Palo A~to's cas rates are below the rates char~d in
surrounding collll'Qnitfes. It would also represent the fffth consecutive
decrease f n the City's retail gas rates since January 1qAs.
The proposed decrease fs based on arrfvfna at a revenue leYel which allows the
Gas Fund in FY 1988-89 to meet all its operatfn~ costs. includf n~ a Sl,103,00n
CMR:198:8
-----------------------------~-·-· -·--··--
transfer to the General Fund fn accordance with the Utility Enterprise
Methodology. In addition, the Transfer Stabilization Reserve and the System
Improvement Reserve are funded at reasonahle levels. Staff anticipates that
such reserves will act as •buffers• to fund unanticipated swines fn operation
costs. 1 nclucfi r.o PGandE ~as purchase costs. -
In spreadin9 this 15 percent revenue decrease. all rates were lowered s11ohtly
more than the syste~ averaoe of 15 oercent with the exception of the
•interruptible .. rates contained on Schedule G-50 which serves four lar~e
nonresidential CQStomers. The G-50 rates were necessarily increased to a level
approximately 5 cents· above the projected ~as purchase cost in order to avoi~
sellina ~s to such customers at a dfrect loss to the lltility. As a result,
all other retail customers will experience bf 11 reductions f" the 16 to 17
percent ranQe. As future cost of service studies are performed and experience
1s ~ined regarding the price responsiveness of the City's fuel switchin~
customers. the appropriateness of the five cent per therm marqfn will he ~xamined and reconnendations made accordfnQly. PGan~E's lowest retail rate is
its r.-~o rate. which is approximately eaufvalent to Palo Alto's resale rate.
The l>f..anrlE G-50 rate 1s based on a minimal rrero1n recovery by the Utility and a
•spot gas• Drfce which is perhaps the lowest cost resource fn PGandE's
portfolio of sup~lies. Staff believes that with today's market conditions and
prices the 11kelf hood is mfnil'l\al that a Palo Alto G-50 custoP.1er woulrl reauest
an alternate suppiier ~iven the hiqh costs of transportation.
It can he noted that effective fillay 1, 198R PGandE 1s authorized to i"4'.>lement
its ma .ior restructurf no of ret:1i 1 gas rates. The rates approved by the CPUC
allow for an 11.8 percent increase in reside"t1a1 rates and a 4.9 percent
decrease in commercial rates. tonsequently, the table shown below dep1ctfna
the effect of staff's proposed rate decrease indicates a varyfno percenta~
below PGandE's retail rates (effective May 1, 198Al.
S Prop.
$ Increase Percent P.A.Bi 11
Customer Therms Monthly (Decrease) Increase {Below) Above
Season llsed Bill Per Month (Oecrease) PGf.E Rates
Ri!S i dent 1a 1 Winter
Winter 100 $33.04 ~( 6.56) (16.6) (26.6)
Residential
Winter 150 64.26 (13.09} (16.9} (26e4)
Resf ftential
Sl11'Wl11!r 26 10.11 2.04) (16.8) (15 .O}
Resident1a1
Su111mer 24 2l.Q7 4.S?l f17.ll ( ?1. ~,
CMR:l98:8
Corrnercial
Winter soo 235.59 (47.91} {16.Q) c2n.1>
Industrial
Winter 4,000 1,884.71 (3R3.2Q} (16.9) (18.0)
Industrial
(G-50) 60,000 20.100.00 3, lA0.00 18.8 7.7
Conclusion
On Oecent't!r 9, 1987, the CPUC issued a far-reaching decision which, among other
thin9s. authorizes PGanrlE to raise residential rates May 1, 1988 and
establishes a ne1111 PGandE resale rate forlll.lla applicable to Palo f.lto gas
f)urchases. Under the new forll'tlla, the Gas Fl1nd's fina!lcial condition should
remain strong in the years ahead. As a result, staff has recommended that
Council suspend the City 1s lon~standfng policy to track PGandE rates and lower
the City's ~s rate's appro~i111ately 15 percent or $2,745,000 on an annual
basis. If Council ap~roves this recomnendation, the Gas Utility will be a~le
to avoid raising residential rates unnecessarily on May 1, and the City's rates
can fall well be1ow those of surroundino areas for the first tit"ll! in at least
35 years. In addition, due to a cont>inatf on of factors. staff recorrmen~s fn
this report that plans to fund an extensive Gas Exploratf on Procrram be
discontinued and an approximately $8.5 million custoll'ler refunri he initiated in
October 1988. to distribute revenues prev1ous1y set aside to finance this
prc~am.
Reco1t1nendati on ·
Staff recomniends that Council adopt the attached resolutions which will:
1. Ar.end Reso1ut1:>n No. 6568 to suspend the City's existin9 Gas Rate Policy;
2. Confirm staff's intention to discontinue plans and fundino of an extensive
r,as txploration Progra";
3. Adopt staff's proposed approxill'lltely ~R.S million Gas Customer Refund Plan; antt,
4. Revise Gas Rate Schedul~s G-1 and G-50 to decrease gas revenues
approxflftately 15 percent effective July 11. 19R8.
Resi!!~~subnlltted, ~ ~~
W. RANOY RALOSCHIJN
~~~~~~e!!Ulations
WILLIAM ZANE~w
Cfty Manaqer
CMR: 198:8
~J...~~
RICHARD l. voufG •
Of rector cf utilities
APPLICABILITY:
GEIERAI. NATURAL &AS SERVICE
UTILITY RATE SCHEOULE G-1
This schedule applies to all firm natural gas service.
TERRITORY:
Within the service area of the City of Palo Alto and on land owned or leased
by the City.
RATES:
Gl-R Convnodity Charge: (For individually metered residential customers.)
Summer Rate (May 1 to October 31):
Per Meter
Per Month
0-20 therms per therm .•.. , •...•.......•......................•..... 31. 8~
Over 20 therms per therm .•......................................... 6-2.4i
Winter Rate (Nov. 1 to April 30):
0-96 therms per therm ..•..••...••••...••..•.•.....•..••..•.....•... 31. 8~
Over 96 therms per therm .....•.....................•.•......•...... 62.4~
Special Remote Meter Register Charge: per month ..........••••... $1.00
Gl-C CollltlOd;.y Charge: For all other customers. including co11111ercial customers)
tear-round rate for all gas usage:
0-25,000 therms per therm .......................................... 4 7.1,
Over 25,000 therms per therm ....•••....•...•••...........•......... 40. 9~
SPECIAL CONDITIONS:
1. Seasonal rate changes: The baseline allowances for space heating will be
prorated in the May and November billing periods based on the rates ot the
number of days prior to May 1 and subsequent to October 31. respectively, to
the total nllftber of days in the billing period.
CITY OF PALO Al TO UTILITIES
Issued by the City Counci 1
Supersedes Sheet No. G-l-1 dated 1-1-87
Effecti¥e 7-11-88
Sheet Ho. G-1-1
-NATURAL &AS SERVICE
UTILITY RATE SCHEDULE G-50
APPLICAllLlTY:
This schedule applies to interruptible service for customers who have
alternate fuel standby facilities and whose usage is classified as Prior-
ities PJ and P4 according to the California Public Utilities Conwnissionjs
Gas Curtaflment Priority System.
TERRITORY:
Within the service area of the City of Palo Alto and on land owned or leased
by the City.
RATES:
Customer Charge: $250.00 per month. applicable to customers whose monthly
usage is 50,000 therms or less.
$600.00 per month, applicable to customers whose monthly
usage is greater than 50.000 therms.
Demand Charge: A mont.hly demand charge will be billed based upon the
customers January, 1988 gas usage times 3 cents/therm.
Conmodity Charge: Per Meter
Per Month
Per ther1~-........................................................ 30 .. Of
Mf nimum Charge:
This charge is for the first 5000 therms per meter per month.
SPECIAL CONDITIONS:
1. Service under this schedule is subject to discontinuance in whole or in part
in case of actual or anticipated shortage of natural gas resulting from an
insuff1cient supply, inadequate transmission or delivery capacity of
facilities, or shortag~ requirements. However, the City will attempt to
minimize disruption by providing adequate notice prior to curtailment. The
City will not be liable for damages occasioned by interruption or
discontinuance of service supplied under this schedule.
2. No customer sh~ll be entitled to service hereunder unless adequate standby
equipment and fuel are provided and are ready at all times for innediate
operation in the event that the supply of gas hereunder shall be discontinued
in whole or in part.
CITY Of PALO ALTO trrILITIES
Issued by the c;ty Coun~ii
Supersedes Sheet No. G-50-1 dated 1-1-87
Effective 7-11-88 Sheet No. G··t:0-1