HomeMy WebLinkAboutStaff Report 2411-37534.Staff Recommends the Utilities Advisory Commission Recommend that the City Council
Adopt a Resolution, Approving the FY 2026 Electric Financial Forecast, including Transfers,
Amending Rate Schedules E-1 (Residential Electric Service), E-2 (Residential Master-
Metered and Small Non-Residential Electric Service), E-2-G (Residential Master-Metered
and Small Non-Residential Green Power Electric Service), E-4 (Medium Non-Residential
Electric Service), E-4-G (Medium Non-Residential Green Power Electric Service), E-4 TOU
(Medium Non-Residential Time of Use Electric Service), E-7 (Large Non-Residential
Electric Service), E-7-G (Large Non-Residential Green Power Electric Service), E-7 TOU
(Large Non-Residential Time of Use Electric Service), E-14 (Street Lights), E-16
(Unmetered Electric Service), E-EEC-1 (Export Electricity Compensation), and E-NSE-1
(Net Metering Surplus Electricity Compensation) ACTION 7:55PM – 8:40PM
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Utilities Advisory Commission
Staff Report
From: Kiely Nose, Interim Director of Utilities
Lead Department: Utilities
Meeting Date: April 2, 2025
Report #: 2411-3753
TITLE
Staff Recommends the Utilities Advisory Commission Recommend that the City Council Adopt a
Resolution, Approving the FY 2026 Electric Financial Forecast, including Transfers, Amending
Rate Schedules E-1 (Residential Electric Service), E-2 (Residential Master-Metered and Small
Non-Residential Electric Service), E-2-G (Residential Master-Metered and Small Non-
Residential Green Power Electric Service), E-4 (Medium Non-Residential Electric Service), E-
4-G (Medium Non-Residential Green Power Electric Service), E-4 TOU (Medium Non-
Residential Time of Use Electric Service), E-7 (Large Non-Residential Electric Service), E-7-G
(Large Non-Residential Green Power Electric Service), E-7 TOU (Large Non-Residential Time
of Use Electric Service), E-14 (Street Lights), E-16 (Unmetered Electric Service), E-EEC-1 (Export
Electricity Compensation), and E-NSE-1 (Net Metering Surplus Electricity Compensation)
RECOMMENDATION
Staff recommends the Utilities Advisory Commission recommend that the City Council adopt a
resolution (Attachment A):
1. Approving the Fiscal Year 2026 Electric Utility Financial Forecast shown in this staff report
and attachments; and
2. Approving the transfer at the end of FY 2025 of up to $5 million from the Electric Utility
Supply Operations Reserve to the Distribution Operations Reserve;
3. Amending Rate Schedules (Attachment B) effective July 1, 2025 (FY 2026):
a. E-1 (Residential Electric Service)
b. E-2 (Small Non-Residential Electric Service)
c. E-2-G (Residential Master-Metered and Small Non-Residential Green Power
Electric Service
d. E-4 (Medium Non-Residential Electric Service)
e. E-4-G (Medium Non-Residential Green Power Electric Service)
f. E-4 TOU (Medium Non-Residential Time of Use Electric Service)
g. E-7 (Large Non-Residential Electric Service)
h. E-7-G (Large Non-Residential Green Power Electric Service)
i. E-7 TOU (Large Non-Residential Time of Use Electric Service)
j. E-14 (Street Lights)
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k. E-16 (Unmetered Electric Service) to recover capital and maintenance costs for
utility pole attachments and telecom conduit
l. E-EEC-1 (Export Electricity Compensation) to reflect 2024 avoided cost, and
m. E-NSE-1 (Net Surplus Electricity Compensation) to reflect current projections of FY
2026 avoided cost.
EXECUTIVE SUMMARY
The City of Palo Alto Utilities (CPAU) provides electricity, water, wastewater, natural gas, and
fiber optic services to the Palo Alto community. The Public Works Department also provides
refuse collection and processing for recycling, compost and garbage, wastewater treatment and
stormwater management. The City’s primary goals are to manage these services in a way that
ensures continued safe, reliable, environmentally sustainable, and cost-effective operations. The
City is proposing rate increases this year for electric, natural gas, wastewater and water services.
The stormwater management fee increase will occur per the Consumer Price Index (CPI) as
approved by residents in a 2017 ballot measure. The City strives to be transparent with utilities
customers about the reason for rate changes, including explaining the cost drivers, benefits to
customers, what the City is doing to keep costs low for ratepayers, and the services and programs
provided by the City to help customers keep utility bill costs low. Attachment E outlines CPAU’s
plan for communicating rate changes to customers. Staff are presenting an overview of the
financial forecast and rate change proposal for each utility service to the Utilities Advisory
Commission (UAC) and Finance Committee prior to City Council review and approval in June
2025.
The Electric Utility rate forecast proposes a 5.1% rate increase for FY 2026. Last year’s forecast
projected 5% annual rate increases from FY 2027 to FY 2029. The updated forecast now projects
a 6% increase in FY 2027, 8% increases in FY 2028 and FY 2029, and a 6% increase in FY 2030.
Table 1 shows the proposed rate increases for FY 2026 through FY 2030. The drivers for this
increase relative to last year’s forecast include a new warehouse and laydown yard for grid
modernization, replacement of emergency generators, and an update to the General Fund
Transfer forecast from $15.6 million to $17.4 million beginning in FY 2026. The General Fund
Transfer increase is a result of the estimated grid modernization asset value increase (capital
assets are an input to the Council-adopted General Fund Transfer methodology and when capital
assets increase, General Fund Transfer also increases). Although the General Fund Transfer is
funded by non-rate revenue, less non-rate revenue is projected to be available to pay for other
costs with a larger General Fund Transfer and so a larger rate increase is necessary. The rate
increases in the outer years of the forecast could change as the Council finalizes plans for debt
financing grid modernization costs.
In the current year, FY 2025, power supply costs are expected to be slightly lower than forecasted
a year ago; the main driver for this shift is extremely high market prices for resource adequacy
capacity and renewable energy credits, which have yielded higher wholesale revenues for the
City. The City’s load (consumption) for the current year is projected to be about 10% higher than
previously forecasted, but is then expected to be relatively flat over the next several years.
Meanwhile, output from the City’s hydroelectric resources is projected to be roughly equal to
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long-term average levels over the next few years. Hydroelectric revenue continues to be a large
source of uncertainty in the City’s supply cost projections. In the next five years, staff expects
increasing transmission access charges, rising renewable portfolio standard requirements, and
tightening resource adequacy requirements to steadily increase electric supply costs. Capital
spending and distribution system maintenance spending is rising due to grid modernization,
fiber-related investments and an upgrade to the Hanover Substation which will benefit all electric
rate payers. Staff expects grid modernization and related capital costs to be offset with a series
of debt financing with the first bond issuance in FY 2026.
Table 1: Current Year (FY 2025) and Projected Overall Rate Trajectory from FY 2026 to FY 2030
BACKGROUND
ANALYSIS
Past Trends
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the electric system, and the cost of contract field crews to cover operational work due to
challenges with filling vacancies and multi-year construction projects such as Foothills
undergrounding and grid modernization.
Table 2: FY 2024 Actuals vs. Prior Year’s Forecast ($000)
Net Cost/(Benefit) Variance Type of change
Higher revenues from higher load (5,083)Revenue increase
Lower electric supply costs (7,897)Cost decrease
Higher operational costs 8,799 Cost increase
Lower than forecasted capital investment (28,074)Cost decrease
Net Cost / (Benefit) of Variances (33,156)
Projections
Overview
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Operations costs in FY 2025, other than public benefits and Low Carbon Fuel Standards (LCFS)
expenses, are projected to be $5 million, or 7% higher than FY 2024 actuals. Allocated charges
from other City departments are projected to increase 9% based on adopted FY 2025 budget
numbers.
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Figure 1: Electric Utility Revenues, Expenses, and Rate Changes:
Staff conducted an updated load forecast for FY 2026, with forecast methodologies that
incorporated weather patterns, economic factors, and historical trends. This forecast projected
energy demand at 893,052 MWh and a peak load of 163 MW in FY 2026. This forecast also
included a revised FY 2025 energy demand about 8% higher than last year’s forecast, at 902,133
MWh and 164 MW, driven largely by higher-than-expected sales in FY 2024. The main
contributors of the increased demand include 10% growth in the E-7 rate class, driven primarily
by a customer’s data center expansion, which added nearly 30 GWh to the load. This customer’s
formalized capacity reservation agreement further adds 60 GWh annually and is included in this
forecast. However, long-term trends show a gradual 1% annual decline over the last 20 years in
load due to energy efficiency measures, rooftop solar adoption, and the loss of industrial users,
partially offset by growth in building electrification and EV charging.
Figure 2 shows the forecast of electricity consumption through FY 2044. Electricity consumption,
which was depressed due to the economic effects of the pandemic, is assumed to recover to a
level slightly above the long-term trend line (shown in the FY 2026 Forecast line). Potential factors
that may offset declining sales include another potential data center project and Figure 2 shows
a range of forecasts up to the FY 26 Forecast (high range) line. Building and vehicle electrification
at a business-as-usual level is included in the FY 2026 forecast, but large increases in the pace of
building and vehicle electrification could increase sales further as well. Demand forecasts are
14%6%8%0%
0%
35%
5%6%8%
8%6%
0
50
100
150
200
250
300
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Actuals Projection
$
M
i
l
l
i
o
n
s
Fiscal Year
Capital Investment
Electric Commodity
Operations
Transfers
Grid Modernization Debt
Debt Service
Revenue
-5%
Notes:
1)The 35% increase includes April
2022 activation of the Hydroelectric
Rate Adjuster (HRA), a 5% base rate
increase, and the January 1, 2023
increase of the HRA from
$0.013/kWh to $0.048/kWh.
2) The 5% decrease include July 1,
2023 deactivation of the HRA and a
21% increase to the base rates to
align with long-term expenses.
3) COS Study Adjustment of -6% to
9% Rate Change depending on
usage levels
-6% to 9%
(2)(1)
(3)
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updated every year taking into account fundamental changes. Staff updates the forecast annually
based on the most updated information for financial forecast purposes.
Figure 2: Forecasted Electricity Consumption
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Figure 3: Forecasted Electricity Peak Demand
The Electric Utility receives most of its revenues from sales of electricity to Palo Alto customers,
but about 20 to 25% comes from other non-rate revenue sources. Of these non-rate revenue
sources, about 50% to 75% represents wholesale revenues – from surplus energy sales, surplus
RA sales, and sales of RECs that are in excess of the City’s renewable portfolio standard (RPS)
requirements. These revenues may offset electric supply purchase costs, smooth rate increases,
or fund reserves or costs including the Electric General Fund Transfer and local decarbonization
programs of the remaining revenues, the largest sources are interest income, customer
connection fees for new or replacement electric services, and carbon allowance sales revenues
associated with the State’s cap-and-trade program.
Staff expects Cap-and-Trade allowance revenues to stabilize through the forecast period, but this
revenue source is uncertain as the current regulations are set to sunset in 2030 unless
reauthorized by the State. The California Air Resources Board (CARB) is in the process of updating
Cap-and-Trade regulations to increase the stringency of the program and allowable uses by
lowering the target emissions levels. A revised regulation is expected to be adopted in 2025, with
implementation anticipated in 2026. Staff will update Cap-and-Trade related revenues
projections when more information becomes available.
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The forecast for interest income assumes current interest rates continue, and there are no major
reserve reductions aside from what is anticipated in this forecast. If interest rates rise, interest
income could increase, and if reserves decrease (due to drought or a withdrawal from the Electric
Special Projects (ESP) reserve for a major project), interest income would decrease.
Expenses
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Figure 4: Electricity Supply by Source
Figure 5 and Table 3 show the actual and projected costs for the electric supply portfolio,1 and
Figure 5 also shows average and actual hydroelectric generation.2 FY 2021 and FY 2022 had lower
than average hydroelectric generation, while FY2024 had higher than forecasted generation.
Starting in FY 2023 (in the FY 2024 Electric Utility Financial Plan) staff lowered its projection of an
average hydroelectric year to more closely align with the past 10 years of historical averages.
Renewable energy costs have stayed relatively flat as one renewable energy contract ended while
another renewable project came online to fulfill the City’s carbon neutral and RPS goals. The
current market outlook is uncertain for newer renewables projects because of headwinds from
supply chain issues and interconnection delays, along with the potential for new trade tariffs and
reduced federal subsidies. CAISO transmission access charges are projected to continue to
increase as transmission lines are built throughout California to accommodate new renewable
projects. In total, staff projects net electric supply costs to increase from an average of about $86
million from FY 2022 through FY 2025 to about $117 million by FY 2030.
1 Costs are shown net of wholesale revenues and cannot be directly compared with the electric supply purchase
figures shown in Attachment C: Electric Utility Financial Forecast Table.
2 Average hydroelectric generation based on the currently inactive E-HRA rate schedule.
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
140%
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Actuals Projection
%
S
h
a
r
e
Fiscal Year
Net Market
Purchases/Sales
Hydroelectric
Renewable
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Figure 5: Electric Supply Portfolio Costs
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Net Market Purchases /
(Sales)(20,417)(9,146)(12,684)410 1,632 6,116 10,141
Renewables 33,794 36,196 37,489 38,805 40,283 38,078 35,402
Hydroelectric Costs 18,690 18,819 20,686 21,089 20,434 20,208 20,818
Transmission 30,093 28,559 29,120 30,768 32,844 35,042 37,137
Other Costs 6,349 10,000 17,070 6,111 8,668 12,518 13,529
68,509 84,430 91,682 97,182 103,861 111,961 117,028
0
100
200
300
400
500
600
700
-40
-20
0
20
40
60
80
100
120
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Actuals Projection
Hy
d
r
o
e
l
e
c
t
r
i
c
G
e
n
e
r
a
t
i
o
n
(
G
W
h
)
Su
p
p
l
y
C
o
s
t
s
(
$
M
i
l
l
i
o
n
)
Fiscal Year
Net Market
Purchases / (Sales)
Other Costs
Renewables
Hydroelectric Cost
Transmission
Average Hydro
Generation
Actual/Projected
Hydro Generation
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Operations
•Administration, including financial management of charges allocated to the Electric Utility
for administrative services provided by the General Fund and for Utilities Department
administration, as well as debt service and other transfers (for example, transfers to
General Fund to pay for communications dispatch, fire training, graffiti removal from
poles and boxes, and Office of Emergency Services emergency response). Additional
detail on Electric Utility debt service is provided in the Debt Service section below
•Customer Service
•Engineering work for maintenance activities (as opposed to capital activities)
•Operations and Maintenance of the distribution system;
•Resource Management and Demand Side Management; and
•Transfers including the General Fund Transfer, transfers to the City’s capital project fund,
and technology fund.
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Figure 6: Electric Utility Operational Costs
0
20
40
60
80
100
120
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Actuals Projection
$
M
i
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l
i
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s
Fiscal Year
Resource Management
Demand Side Management
Administration
Operations & Maintenance
(including Engineering)
Customer Service
Transfers
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Capital Improvement Program
Table 4: Electric Utility CIP Spending ($000)
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applied to those FY 2025 actual capital costs for grid modernization and related projects (see
Council staff report 2411-3805,3 December 16, 2024 for a detailed discussion and accompanying
Resolution 102094).
Figure 7: Projected Funding Plan for Grid Modernization Project
The Electric Utility has previously pledged reserves and net revenue as security for non-electric
bond issuances listed in Table 5 even though the Electric Utility is not responsible for the debt
service payments. The Electric Utility’s reserves or net revenues would only be called upon if the
responsible utilities are unable to make their debt service payments. Staff does not anticipate
that this will occur. These pledges have not impacted electric rates. Staff projects that the Electric
Utility’s net revenues in each future year will exceed 125% of debt service (see Attachment C,
Utility Financial Table, line 71).
3 Staff report 2411-3805 “Adoption of a Resolution of Intention to Reimburse Expenditures for the Grid
Modernization and Related Projects of the Electric Utility System Infrastructure from the Proceeds of the Tax-
Exempt Utility Revenue Bonds.” https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=83165
4 Council Resolution 10209 (Dec. 16, 2024) https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=62094
-30
-10
10
30
50
70
90
2025 2026 2027 2028 2029 2030
Projection
$
M
i
l
li
on
Fiscal Year
Debt-Funded Rate/Reserve-Funded
Budgeted Project Expense Annual Debt Service
$86M
Issuance $100M
Issuance
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Table 5: Other Issuances Secured by Electric Utility’s Revenues or Reserves
2009 Water Revenue Bonds
(Build America Bonds)Water $1,977*No Yes
2011 Utility Revenue
Refunding Bonds, Series A
Gas
Water
$1,457 No Yes
*Net of Federal interest subsidy
The Electric Utility currently has two primary contingency reserves, the Supply Operations
Reserve and the Distribution Operations Reserve. In addition, the Electric Utility has a Hydro
Stabilization Reserve, an Electric Special Projects (ESP) Reserve, and a Capital Reserve. Reserve
funds may be utilized with Council approval.
There are a variety of risks associated with the Supply Fund related to resource generation
variability, market price volatility, transmission cost increases, and regulatory changes to market
rules. Because of the high range of uncertainty in energy price predictions more than three years
into the future, this risk assessment is only performed for the first two fiscal years of the forecast
period. It is important to note that the likelihood of all these adverse scenarios occurring
simultaneously, and to the degree described in Table 6, is very low.
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Table 6: Electric Supply Fund Risk Assessment
Of the risks faced by the Electric Utility’s Supply Fund for FY 2027, the largest risk would be facing
a dry year with very low hydroelectric output, accounting for one third ($7.6 million) of all the
adverse cost uncertainty. Since the utility’s costs for its hydroelectric resources are almost
entirely fixed, costs do not decline when the output of those resources are low, but the utility
needs to buy power to replace the lost output. The converse happens when hydroelectric output
is higher than average.
Of the remaining risks for FY 2027, $5.2 million or 20% is related to potential transmission cost
increases above staff’s current forecast. $4.4 million or 17% is related to the potential that total
load (and the associated retail sales revenue) may be lower than projected. Other risks are
related to production from the City’s renewable contracts and market prices for purchases and
sales of energy and resource adequacy (Items 3, 4, 5, 6, and 7 above), totaling $5.6 million or
22%.
As shown in Figure 8, staff anticipates the Supply Operations Reserve will remain within
guideline levels throughout the five year forecast period. Note that the high reserve level in FY
E
O
E
O
F F
1 L 3 4
2 H
C 5 7
3
W 1 1
4 0 0
5 2 1
6 2 -
7 5 1
8 5 5
9 1 1
1 1 1
1 0 0
1 S 0 0
2 2
C
U
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2023 is related to one-time revenues including a $24M refund from the successful litigation
against the Bureau of Reclamation for overcharges related to power purchases from the Central
Valley Project. These funds were redistributed to other purposes in FY 2024, with those
transfers resulting in a reduction in the Supply Operations Reserve.
Figure 8: Electric Supply Operations Reserve Adequacy
Reserve Maximum
Reserve Target
Reserve Minimum
0
10
20
30
40
50
60
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Actuals Projection
$
M
i
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i
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s
Reserve (Year-End)
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Table 7: Electric Distribution Fund Risk Assessment ($000)
Total non-commodity revenue 77,592 85,849 88,142 88,744 92,892 94,459
Max. revenue variance, previous 10 yrs 8%8%8%8%8%8%
Risk of revenue loss 6,124 6,776 6,957 7,004 7,331 7,455
CIP Budget 21,066 - 15,297 23,796 19,172 15,804
CIP Contingency @10% 2,107 - 1,530 2,380 1,917 1,580
8,231 6,776 8,486 9,384 9,249 9,036
In last year’s Financial Plan, staff proposed various reserve transfers to manage a one-year cash
flow issue related to the grid modernization project. Council approved certain transfers
recommended in last year’s Financial Plan in FY 2024 and FY 2025. At year end FY 2024, staff
evaluated the reserve levels based upon actual FY 2024 results and completed necessary
transfers within the Council approved levels. Following is a list of each of the transfers Council
approved for FY 2024 followed by a discussion of the actual transfers completed in FY 2024.
No transfer was necessary from the Electric Special Projects Reserves to the Supply Operations
Reserve. Furthermore, the Electric Utility Supply Operations Reserve was able to repay $2.5
Reserve Maximum
Reserve Target
Reserve Minimum
Risk Assessment
-10
-5
0
5
10
15
20
25
30
35
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Actuals Projection
$
M
i
l
l
i
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n
s
Reserve (Year-End)
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million of an earlier $10 million loan from the Electric Special Projects Reserve in FY 2024. The
current balance of the Electric Special Projects Reserve is $22.6 million. This Financial Forecast
proposes the Electric Utility Supply Operations Reserve to repay the Electric Special Projects
Reserve the remaining $7.5 million of the internal loan in FY 2025. Council also approved a
transfer of up to $30 million from the Supply Operations Reserve to the Electric Special Projects
Reserve in FY 2025 so no further Council action is necessary for staff to complete this transfer
(Resolution 101785). Additionally, this forecast reflects repayments of $1 million per year from
FY 2026 through FY 2030 to the Electric Special Projects Reserve for loans to the water and gas
utilities for AMI investments.
2)Up to $17 million from the Supply Operations Reserve to the Hydroelectric
Stabilization Reserve
Staff completed the $17 million transfer from the Supply Operations Reserve to the Hydroelectric
Stabilization Reserve in FY 2024. The Hydroelectric Stabilization Reserve balance is $17.4 million,
approaching the reserve’s target level of $19 million. This level will allow the City to avoid
activating the hydroelectric rate adjuster if upcoming winters are drier than average. The Electric
Utility was in a position to make this transfer because of one-time sales revenues and supply cost
savings in FY 2024 related to high hydroelectric generation resulting from the rainy winter of
2022/2023. In addition, market conditions enabled the utility to realize higher than usual sales
revenue related to favorable hydrological conditions and high resource adequacy market prices.
3)Up to $58 million from the Supply Operations Reserve to the Distribution
Operations Reserve
Staff completed a $42 million transfer from the Supply Operations Reserve to the Distribution
Operations Reserve. Attachment C, Electric Utility Financial Details table shows the FY 2024 year-
end Electric Operations Reserve (Supply and Distribution combined) is $32.2 million, which is
approximately equal to the minimum guideline range. Figures 8 and 9 show the actual and
projected reserve balances for each of these reserves. In FY 2025, staff proposes a transfer of up
to $5 million from the Supply Operations Reserve to the Distribution Operations Reserve. The
purpose of this transfer is to manage the Distribution Operations Reserve level given the short-
term cash flow issue related to the grid modernization project. The debt issuance is not scheduled
until FY 2026 while some of the CIP work will occur in FY 2025 and will temporarily be funded by
the Electric Utility Distribution Operations Reserve.
Additionally, in accordance with the Electric Utility Reserve Management Practices (Attachment
D), staff transferred $1.9 million from the Supply Operations Reserve to the Cap and Trade
Reserve based upon actual Cap and Trade costs and revenues. The City maintains a Cap and Trade
Program Reserve within the Electric fund to hold any revenues from the sale of carbon allowances
freely allocated by CARB to the Electric Utility that are not spent within the fiscal year. Cap and
Trade Program revenues are provided to the Electric Utility to support a wide variety of carbon
reducing activities. Until the establishment of the REC Exchange program, adopted by Council in
5 Resolution 10178, June 17, 2024, https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=62050
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August 2020 (Staff Report #11556),6 all of this Cap and Trade Program revenue was spent on
purchasing renewable energy and none was held in reserve.
In accordance with Council’s August 2020 direction, the City began selling City-owned renewable
energy (Category 1 RECs, which mostly represent in-state renewable energy) and replacing them
with purchased Category 3 RECs, which represent mostly out-of-state electricity. This exchange
takes advantage of market conditions to reduce supply costs, fund electric utility programs and
capital investment, and raise funds for local emissions reduction. On December 12, 20227 Council
approved continuation of the program with 100% of revenue going to local emissions reduction.
In accordance with Council policy, staff will fund the Cap and Trade Program Reserve with
unspent revenues from the sale of carbon allowances freely allocated to the electric utility in an
amount equal to 100% of each FY’s Renewable Energy Credit (REC) Exchange program revenues,
currently estimated to be between $0.7 million and $1.7 million going forward, for future local
decarbonization projects.
Last year’s financial plan amended the Electric Utility Reserve Management Practices to direct
staff to transfer any unspent CIP budget that is not reappropriated or encumbered at the end of
each fiscal year to the CIP Reserve. These represent ratepayer funds already collected for the
purpose of CIP investment, and retaining them in the CIP Reserve allows the City to use them to
fund future unanticipated CIP expenses (such as mid-year budget adjustments due to increased
costs for specific projects) that were not included in a financial forecast. Last year’s financial plan
also recommended, and Council approved, a transfer of up to $5 million from the Electric
Distribution Operations Reserve to the CIP Reserve in FY 2025. The Capital Reserve balance is
$0.9 million, which is below the minimum guideline range. Staff will evaluate the year-end results
in FY 2025 and complete a transfer to the Capital Reserve to bring it up to the minimum guideline
if this is feasible.
Reserve Balance
The Electric Utility also has a CIP Reserve for short term capital contingencies and as a place to
set aside funds for large, one-time projects that the Utilities would otherwise need to debt-fund.
Figure 10 below reflects the maximum and minimum CIP Reserve guideline levels, starting in FY
2018 through FY 2030. Because of the fluctuating annual dollar amounts and timing of CIP
projects budgeted to occur during the forecast period, as well as the potential for new ongoing
projects to be included in the CIP plan in later years, four years of budgeted CIP are used to
calculate the reserve maximum levels. The minimum CIP Reserve level is 20% of the maximum
CIP Reserve guideline level.
Last year’s Financial Plan recommended to fund the CIP Reserve to its minimum level by the end
of FY 2025, and Council approved a $5 million transfer in FY 2025 for this purpose. Staff will
6Staff Report 11556 https://www.cityofpaloalto.org/civicax/filebank/documents/78046
7December 12, 2022 Staff Report #14375 https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=82045
Item No. 4. Page 22 of 32
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complete the transfer based on FY 2025 actual results, however, this forecast does not include
funds for this transfer based upon current projections.
Figure 10: Electric CIP Reserve Adequacy
Reserve Minimum
Reserve Maximum
-5
0
5
10
15
20
25
30
35
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Actuals Projection
$
M
i
l
l
i
o
n
s
CIP Reserve (Year-End)
Item No. 4. Page 23 of 32
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Figure 11: Electric Utility Reserves (Supply Fund):
Table 13 shows the projected balance of each of the Electric Utility reserves for the period
covered by this Financial Forecast. See also: Attachment C: Electric Utility Financial Table
Item No. 4. Page 24 of 32
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Table 12: Electric Utility Reserves Starting and Ending Balances, Revenues, Transfers
To/(From) Reserves, and Reserve Guideline Levels for FY 2025 to FY 2030 ($000)
*Includes funds of $43.895 million from the CIP Reappropriations and Commitments Reserves
Item No. 4. Page 25 of 32
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Cost of Service Supplement - Unmetered Electric Service (E-16) Rate
8). EES recommends increasing this fee (also adopted by the Federal
Communications Commission as a “safe harbor” rate in 2018) by the annual Consumer Price
Index for All Urban Consumers in the San Francisco-Oakland-Hayward area since 2018. The
recommended updated license fee is $329.44 per year per pole.
8 Staff Report #3133 https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/reports/city-
manager-reports-cmrs/year-archive/2012/final-staff-report-id-3133_amendments-to-util-rate-schedule-e-16.pdf
Item No. 4. Page 26 of 32
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Proposed Rates
Bill Impacts
The City adopted its current electric rates effective July 1, 2024. At that time, the City did not
increase the overall revenue but did implement a series of rate adjustments by customer class
in accordance with the City of Palo Alto Electric Cost of Service and Rate Study, completed by
EES Consulting in April 2024.9 The current and proposed FY 2026 rates are reflected in Table 14
below:
9 Palo Alto Electric Cost of Service and Rate Study https://www.cityofpaloalto.org/files/assets/public/v/3/agendas-
minutes-reports/reports/city-manager-reports-cmrs/attachments/2024-rates/electric-cosa.pdf
TABLE 13: PROPOSED E-16 RATES
Service Current Rate
FY 2025
Proposed Rate
FY 2026
C. Unmetered Electric Service
1.Customer Charge, $/month $9.00 $10.96
2.Energy Charge, $/kWh Same as E-2 Same as E-2
E. Misc Rates
1. Conduit License Fee, $/foot/year $1.94 $1.94
2. Processing Fee for Electric Conduit Usage Actual Cost Actual Cost
3.Pole Attachment License Fee, $/Foot/Year $29.511 $47.60
4.Processing Fee for Utility Pole Attachments, $/pole $55.00 $152.00
5.License Fee for mounting communication
equipment including distributed antenna systems on
utility poles, $/pole
$270.00 $329.44
1.The current rate includes a small incremental increase of $2.80/year for each additional foot of
leased space up to 4 feet.
Item No. 4. Page 27 of 32
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Table 14: Current and Proposed Electric Rates
E-1 (Residential)
Tier 1 Energy ($/kWh)0.19461 0.20570 0.01109 5.7%
Tier 2 Energy ($/kWh)0.21868 0.22944 0.01076 4.9%
Customer Charge ($/month)4.64 5.15 0.51 11.0%
E-2 & E-2-G (Small Non-Residential)
Summer Energy ($/kWh)0.25210 0.26485 0.01275 5.1%
Winter Energy ($/kWh)0.16414 0.17290 0.00876 5.3%
Customer Charge ($/month)5.60 6.22 0.62 11.1%
E-4 & E-4-G (Medium Non-Residential)
Summer Energy ($/kWh)0.15387 0.16171 0.00784 5.1%
Winter Energy ($/kWh)0.11018 0.11579 0.00561 5.1%
Summer Demand ($/kW)45.29 47.59 2.30 5.1%
Winter Demand ($/kW)23.73 24.94 1.21 5.1%
Customer Charge ($/month)113.73 119.53 5.80 5.1%
E-7 & E-7-G (Large Non-Residential)
Summer Energy ($/kWh)0.13570 0.14262 0.00692 5.1%
Winter Energy ($/kWh)0.08797 0.09245 0.00448 5.1%
Summer Demand ($/kW)40.36 42.41 2.05 5.1%
Winter Demand ($/kW)27.79 29.20 1.41 5.1%
Customer Charge ($/month)520.80 547.36 26.56 5.1%
Table 15 shows the impact of the proposed July 1, 2025 rate changes on the residential and non-
residential bills for various consumption levels. The increase for all rate classes is about 5.1%.
Item No. 4. Page 28 of 32
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Table 15: Impact of Proposed Electric Rate Changes on Customer Bills in FY 2026
Net Energy Metering Compensation Rates
The City operates two Net Energy Metering (NEM) programs. Solar customers served by the City
of Palo Alto's (CPAU) original NEM program, also called NEM 1, are compensated at retail rates
for electricity they export to the grid, and solar customers served by the NEM successor program,
or NEM 2 (effective after the City reached its NEM 1 cap at the end of 2017), are compensated at
the Export Electricity Compensation (EEC) rate for exported electricity.
Customers on the NEM 1 program who have chosen to have the value of any annual net
generation they produced over the past 12 months credited back to their account do so under
the Net Metering Net Surplus Electricity Compensation (E-NSE-1) rate. The Net Surplus Electricity
Compensation rate represents the value of the City’s avoided cost or value of customer-
generated electricity in Palo Alto, including compensation for the energy, avoided capacity
charges, avoided transmission and ancillary service charges, avoided transmission and
distribution (T&D) losses, and renewable energy credits (RECs), or environmental attributes. Staff
proposes decreasing the E-NSE-1 rate to $0.1012/kWh based on updated avoided cost
calculations reflecting declines in long-term electricity market prices expected to continue into
the future.
Under the City’s NEM successor program, participating solar customers in Palo Alto are billed at
the current retail rate for electricity drawn from the grid, and receive a credit for electricity they
export to the grid at the EEC rate. This compensation rate also reflects the avoided cost or value
Item No. 4. Page 29 of 32
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of customer-generated electricity in Palo Alto, calculated on a forward-looking basis for the
upcoming fiscal year. As shown in the table below, the current avoided cost for solar generation
in Palo Alto is $0.1420/kWh, which is higher than the City’s projected avoided cost, which
requires the proposed NEM compensation rate (E-EEC-1) to decrease to $0.1206/kWh. This
decrease in the overall avoided cost is driven by changes in electricity market prices. Table 16
shows the current and proposed NEM Buyback rates effective July 1, 2025.
Table 16: NEM Buyback Rates – Current vs. Proposed
Bill Comparisons/Competitiveness
Item No. 4. Page 30 of 32
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Santa Clara’s electrical system benefits from a higher load factor with a significantly larger
commercial load compared to Palo Alto’s, resulting in a more efficient distribution system and
lower rates. However, unlike Palo Alto, Santa Clara’s system is not 100% carbon neutral, as part
of its electricity is generated from natural gas.
Table 17: Residential Monthly Electric Bill Comparison (Effective 3/1/2025, $/mo.)
Table 18: Commercial Monthly Electric Bill Comparison (Effective 3/1/2025, $/mo.)
General Fund Transfer
10 Each year it is
calculated according to the 2009 Council-adopted methodology and does not require additional
Council action.
Next Steps
10 For more detail on the ordinance adopting the 2009 transfer methodology, see CMR 280:09, Budget Adoption
Ordinance for Fiscal Years 2009 and 2010; and CMR 260:09, Finance Committee Report explaining proposed
changes to the General Fund Transfer methodology.
Item No. 4. Page 31 of 32
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The City Council will consider adopting this Financial Forecast and rate adjustments as part of the
FY 2026 budget review and adoption process in June 2025. If Council approves the proposed rate
changes, the rates will become effective July 1, 2025.
FISCAL/RESOURCE IMPACT
POLICY IMPLICATIONS
STAKEHOLDER ENGAGEMENT
ENVIRONMENTAL REVIEW
Item No. 4. Page 32 of 32
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The UAC’s review and recommendation to the Council on the FY 2026 Electric Financial Forecast
and rate adjustments does not meet the California Environmental Quality Act’s definition of a
project, pursuant to Public Resources Code Section 21065, thus no environmental review is
required.
ATTACHMENTS
APPROVED BY:
* NOT YET APPROVED *
Attachment A
1
027032125
Resolution No. ____
Resolution of the Council of the City of Palo Alto Approving the Fiscal
Year 2026 Electric Utility Financial Forecast, and Amending Utility Rate
Schedules E-1 (Residential Electric Service), E-2 (Residential Master-Metered
and Small Non-Residential Electric Service), E-2-G (Residential Master-
Metered and Small Non-Residential Green Power Electric Service), E-4
(Medium Non-Residential Electric Service), E-4-G (Medium Non-Residential Green
Power Electric Service), E-4 TOU (Medium Non-Residential Electric Time of
Use Service), E-7 (Large Non-Residential Electric Service), E-7-G
(Large Non- Residential Green Power Electric Service), E-7 TOU (Large Non-
Residential Electric Time of Use Service), E-14 (Street Lights), E-16 (Unmetered
Electric Service), E-EEC-1 (Export Electricity Compensation), and E-NSE-1 (Net
Metering Surplus Electricity Compensation)
R E C I T A L S
A. Each year the City of Palo Alto (“City”) regularly assesses the financial position of its
utilities with the goal of ensuring adequate revenue to fund operations. This includes making
long-term projections of market conditions, the physical condition of the system, and other
factors that could affect utility costs, and setting rates adequate to recover these costs. It does
this with the goal of providing safe, reliable, and sustainable utility services at competitive rates.
The City adopts Financial Forecasts or Plans to summarize these projections.
B. The City uses reserves to protect against contingencies and to manage other
aspects of its operations, and regularly assesses the adequacy of these reserves and the
management practices governing their operation. The status of utility reserves and their
management practices are included in Reserves Management Practices attached to and made
part of the Financial Forecasts or Plans.
C. Pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the Council of the
City of Palo Alto may by resolution adopt rules and regulations governing utility services, fees and
charges.
D. On June 16, 2025, the City Council heard and approved the proposed rate increase
at a noticed public hearing.
The Council of the City of Palo Alto does hereby RESOLVE as follows:
SECTION 1. The Council hereby approves the fiscal year (“FY”) 2026 Electric Utility
Financial Forecast attached to and made a part of the staff report presented to the City
Council;
* NOT YET APPROVED *
Attachment A
2
027032125
SECTION 2. The Council hereby approves a transfer of up to $5 million from the
Electric Utility Supply Operations Reserve to the Distribution Operations Reserve by the end of
FY 2025, as described in the FY 2026 Electric Utility Financial Forecast;
SECTION 3. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate
Schedule E-1 (Residential Electric Service) is hereby amended to read as attached and
incorporated. Utility Rate Schedule E-1, as amended, shall become effective July 1, 2025;
SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate
Schedule E-2 (Residential Master-Metered and Small Non-Residential Electric Service) is hereby
amended to read as attached and incorporated. Utility Rate Schedule E-2, as amended, shall
become effective July 1, 2025;
SECTION 5. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate
Schedule E-2-G (Residential Master-Metered and Small Non-Residential Green Power Electric
Service) is hereby amended to read as attached and incorporated. Utility Rate Schedule E-2-G,
as amended, shall become effective July 1, 2025;
SECTION 6. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule E-4 (Medium Non-Residential Electric Service) is hereby amended to read as
attached and incorporated. Utility Rate Schedule E-4, as amended, shall become effective July
1, 2025;
SECTION 7. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate
Schedule E-4-G (Medium Non-Residential Green Power Electric Service) is hereby amended to
read as attached and incorporated. Utility Rate Schedule E-4-G, as amended, shall become
effective July 1, 2025;
SECTION 8. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate
Schedule E-4 TOU (Medium Non-Residential Time of Use Electric Service) is hereby amended to
read as attached and incorporated. Utility Rate Schedule E-4 TOU, as amended, shall become
effective July 1, 2025;
SECTION 9. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule E-7 (Large Non-Residential Electric Service) is hereby amended to read as
attached and incorporated. Utility Rate Schedule E-7, as amended, shall become effective July
1, 2025;
SECTION 10. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate
Schedule E-7-G (Large Non-Residential Green Power Electric Service) is hereby amended to read
* NOT YET APPROVED *
Attachment A
3
027032125
as attached and incorporated. Utility Rate Schedule E-7-G, as amended, shall become effective
July 1, 2025;
SECTION 11. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate
Schedule E-7 TOU (Large Non-Residential Time of Use Electric Service) is hereby amended to
read as attached and incorporated. Utility Rate Schedule E-7 TOU, as amended, shall become
effective July 1, 2025;
SECTION 12. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate
Schedule E-14 (Street Lights) is hereby amended to read as attached and incorporated. Utility
Rate Schedule E-14, as amended, shall become effective July 1, 2025;
SECTION 13. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate
Schedule E-16 (Unmetered Electric Service) is hereby amended to read as attached and
incorporated. Utility Rate Schedule E-16, as amended, shall become effective July 1, 2025;
SECTION 14. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate
Schedule E-EEC-1 (Export Electricity Compensation) is hereby amended to read as attached and
incorporated. Utility Rate Schedule E-EEC-1, as amended, shall become effective July 1, 2025;
SECTION 15. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate
Schedule E-NSE-1 (Net Surplus Electricity Compensation Rate) is hereby amended to read as
attached and incorporated. Utility Rate Schedule E-NSE-1, as amended, shall become effective
July 1, 2025;
SECTION 16. The Council finds that the revenue derived from the adoption of this
resolution shall be used only for the purpose set forth in Article VII, Section 2, of the Charter of
the City of Palo Alto.
SECTION 17. The Council finds that the fees and charges adopted by this resolution are
charges imposed for a specific government service or product provided directly to the payor that
are not provided to those not charged, and do not exceed the reasonable costs to the City of
providing the service or product.
//
//
//
* NOT YET APPROVED *
Attachment A
4
027032125
SECTION 18. The Council finds that approving the Electric Financial Forecast and Reserve
transfers does not meet the California Environmental Quality Act’s (CEQA) definition of a project
under Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5), because it
is an administrative governmental activity which will not cause a direct or indirect physical change
in the environment, and therefore, no environmental assessment is required. The Council finds
that changing electric rates to meet operating expenses, purchase supplies and materials, meet
financial reserve needs and obtain funds for capital improvements necessary to maintain service
is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public
Resources Code Sec. 21080(b)(8) and CEQA Guidelines Sec. 15273(a). After reviewing the staff
report and all attachments presented to Council, the Council incorporates these documents
herein and finds that sufficient evidence has been presented setting forth with specificity the
basis for this claim of CEQA exemption.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
Assistant City Attorney
Director of Administrative Services
RESIDENTIAL ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-1
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-1-1 Supersedes Sheet No E-1-1
Effective 7-1-20254 dated 7-1-20234
A. APPLICABILITY:
This Rate Schedule applies to separately metered single-family residential dwellings receiving
Electric Service from the City of Palo Alto Utilities.
B.TERRITORY:
This rate schedule applies everywhere the City of Palo Alto provides Electric Service.
C. UNBUNDLED RATES:
Per kilowatt-hour (kWh)Commodity Distribution Public Benefits Total
Tier 1 usage $
0.103730.102 0.095930.086 0.006040.00549 0.205700.194
Any usage over Tier 1 40 79 68
D.SPECIAL NOTES:
1. Calculation of Cost Components
The actual bill amount is calculated based on the applicable rates in Section C above and
adjusted for any applicable discounts, surcharges and/or taxes. On a Customer’s bill
statement, the bill amount may be broken down into appropriate components as calculated
under Section C.
2. Calculation of Usage Tiers
Tier 1 Electricity usage shall be calculated and billed based upon a level of 15 kWh per
day, prorated by Meter reading days of Service. As an example, for a 30-day bill, the Tier
1 level would be 450 kWh. For further discussion of bill calculation and proration, refer
to Rule and Regulation 11.
{End}
Attachment B
RESIDENTIAL MASTER-METERED AND SMALL NON-RESIDENTIAL ELECTRIC
SERVICE
UTILITY RATE SCHEDULE E-2
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-2-1 Supersedes Sheet No E-2-1
Effective 7-1-20254 dated 7-1-20243
A. APPLICABILITY:
This Rate Schedule applies to the following Customers receiving Electric Service from the City of
Palo Alto Utilities:
1. Non-residential Customers receiving Non-Demand metered Electric Service; and
2. Customers with Accounts at Master-Metered multi-family facilities receiving Non-
Demand metered Electric Service.
B. TERRITORY: This rate schedule applies everywhere the City of Palo Alto provides Electric Service.
C. UNBUNDLED RATES:
Per kilowatt-hour (kWh) Commodity Distribution Public Benefits Total
Summer Period
$
0.150750.149
$
0.108060.097
$
0.264850.2
0.093340.092 0.073520.066 0.172900.1
D. SPECIAL NOTES:
1. Calculation of Cost Components
The actual bill amount is calculated based on the applicable rates in Section C above and
adjusted for any applicable discounts, surcharges and/or taxes. On a Customer’s bill
statement, the bill amount may be broken down into appropriate components as calculated
under Section C.
2. Seasonal Rate Changes
The Summer Period is effective May 1 to October 31 and the Winter Period is effective
from November 1 to April 30. When the billing period includes use in both the Summer
Attachment B
RESIDENTIAL MASTER-METERED AND SMALL NON-RESIDENTIAL ELECTRIC
SERVICE
UTILITY RATE SCHEDULE E-2
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-2-2 Supersedes Sheet No E-2-2
Effective 7-1-20254 dated 7-1-20243
and the Winter Periods, the usage will be prorated based on the number of days in each
seasonal period, and the charges based on the applicable rates therein. For further
discussion of bill calculation and proration, refer to Rule and Regulation 11.
3. Maximum Demand Meter Whenever the monthly use of energy has exceeded 8,000 kWh for three consecutive
months, a maximum Demand Meter will be installed as promptly as is practicable and
thereafter continued in service until the monthly use of energy has fallen below 6,000 kWh
for twelve consecutive months, whereupon, at the option of the City, it may be removed.
{End}
Attachment B
RESIDENTIAL MASTER-METERED AND SMALL NON-RESIDENTIAL GREEN POWER
ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-2-G
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-2-G-1 Supersedes Sheet No E-2-G-1
Effective 7-1-20245 dated 7-1-20243
A. APPLICABILITY:
This Rate Schedule applies to the following Customers receiving Electric Service from the City of
Palo Alto Utilities who qualify for E-2 Service and choose to participate in the Palo Alto Green
Program:
1. Non-residential Customers receiving Non-Demand metered Electric Service; and
2. Customers with Accounts at Master-Metered multi-family facilities receiving Non-Demand
metered Electric Service.
B. TERRITORY:
This rate schedule applies everywhere the City of Palo Alto provides Electric Service.
C. UNBUNDLED RATES:
1. 100% Renewable Option:
Per kilowatt-hour (kWh) Commodity Distribution
Public Green
$
0.150750.14
$
0.108060.09
$
0.006040.
$
0.272350.
0.093340.09
0.073520.06
0.006040.
$
0.1716480
Customer Charge 6.225.60
2. 1000 kWh Block Purchase Option:
Per kilowatt-hour (kWh) Commodity Distribution
Public
Benefits
Total
Summer Period
$
0.150750.14
$
0.108060.09
$
0.006040.
$
0.2521026
Attachment B
RESIDENTIAL MASTER-METERED AND SMALL NON-RESIDENTIAL GREEN POWER
ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-2-G
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-2-G-2 Supersedes Sheet No E-2-G-2
Effective 7-1-20245 dated 7-1-20243
Customer Charge 6.225.60
D. SPECIAL NOTES:
1. Calculation of Cost Components
The actual bill amount is calculated based on the applicable rates in Section C above and
adjusted for any applicable discounts, surcharges and/or taxes. On a Customer’s bill
statement, the bill amount may be broken down into appropriate components as calculated
under Section C.
2. Seasonal Rate Changes
The Summer Period is effective May 1 to October 31 and the Winter Period is effective
from November 1 to April 30. When the billing period includes use in both the Summer
and Winter Periods, usage will be prorated based upon the number of days in each
seasonal period, and the charges based on the applicable rates therein. For further
discussion of bill calculation and proration, refer to Rule and Regulation 11.
3. Palo Alto Green Program Description and Participation
Palo Alto Green Service includes the purchase by the City of Palo Alto Utilities
Department of enough renewable energy credits (RECs) to match 100% of the metered
energy usage at the Customer’s facility each month. Any Customer may alternately request
that CPAU purchase a specific number of 1000 kilowatt-hour (kWh) blocks of RECs.
CPAU will charge the Customer the Palo Alto Green Charge for each such requested block.
These REC purchases support the production of renewable energy, increase the financial
value of power from renewable sources, and create a transparent and sustainable market
that encourages new development of wind and solar power.
Customers choosing to participate shall fill out a Palo Alto Green Power Program
Attachment B
RESIDENTIAL MASTER-METERED AND SMALL NON-RESIDENTIAL GREEN POWER
ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-2-G
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-2-G-3 Supersedes Sheet No E-2-G-3
Effective 7-1-20245 dated 7-1-20243
application provided by the Customer Service Center. Customers may request at any time,
in writing, a change to the number of blocks they wish to purchase under the Palo Alto
Green Program.
4. Maximum Demand Meter Whenever the monthly use of energy has exceeded 8,000 kWh for three consecutive
months, a maximum Demand Meter will be installed as promptly as is practicable and
thereafter continued in service until the monthly use of energy has fallen below 6,000 kWh
for twelve consecutive months, whereupon, at the option of the City, it may be removed.
{End}
Attachment B
MEDIUM NON-RESIDENTIAL ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-4
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-4-1 Supersedes Sheet No E-4-1
Effective 7-1-20254 dated 7-1-20243
A. APPLICABILITY:
This Rate Schedule applies to Demand metered Secondary Electric Service for Customers with
a maximum Demand below 1,000 kilowatts. This Rate Schedule may include Service to master-
metered multi-family facilities or other facilities requiring Demand metered Service, as
determined by the City.
B. TERRITORY:
This rate schedule applies everywhere the City of Palo Alto provides Electric Service.
C. UNBUNDLED RATES:
Rates per kilowatt (kW) and kilowatt-hour (kWh):
Commodity Distribution Public Benefits Total
Summer Period
Demand Charge (per kW) $ 11.0910.98 $ 38.0834.31 $ 49.1745.29
Energy Charge (per kWh)
0.124410.123 0.027970.025 0.006040.00 0.158420.1538
0.080280.079 0.027970.025 0.006040.00 0.114290.1101
D. SPECIAL NOTES:
1. Calculation of Cost Components
The actual bill amount is calculated based on the applicable rates in Section C above and
adjusted for any applicable discounts, surcharges and/or taxes. On a customer’s bill
statement, the bill amount may be broken down into appropriate components as calculated
under Section C.
Attachment B
MEDIUM NON-RESIDENTIAL ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-4
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-4-2 Supersedes Sheet No E-4-2
Effective 7-1-20254 dated 7-1-20243
2. Seasonal Rate Changes
The Summer Period is effective May 1 to October 31 and the Winter Period is effective
from November 1 to April 30. When the billing period includes use both in the Summer
and the Winter Periods, the usage will be prorated based on the number of days in each
seasonal period, and the charges based on the applicable rates therein. For further
discussion of bill calculation and proration, refer to Rule and Regulation 11.
3. Maximum Demand Meter Whenever the monthly use of energy has exceeded 8,000 kWh for three consecutive
months, a Maximum Demand Meter will be installed as promptly as is practicable and
thereafter continued in Service until the monthly use of energy has fallen below 6,000 kWh
for twelve consecutive months, whereupon, at the option of the City, it may be removed.
The Maximum Demand in any month will be the maximum average power in kilowatts
taken during any 15-minute interval in the month, provided that if the Customer’s load is
intermittent or subject to fluctuations, the City may use a 5-minute interval. A thermal-type
Demand Meter which does not reset after a definite time interval may be used at the City's
option.
The Billing Demand to be used in computing charges under this schedule will be the actual
Maximum Demand in kilowatts for the current month. An exception is that the Billing
Demand for Customers with Thermal Energy Storage (TES) will be based upon the actual
Maximum Demand of such Customers between the hours of noon and 6 pm on weekdays.
4. Changing Rate Schedules
Customers may request a rate schedule change at any time to any City of Palo Alto full-
service rate schedule as is applicable to their kilowatt-Demand and kilowatt-hour usage
profile.
5. Primary Voltage Discount
Where delivery is made at the same voltage as that of the line from which the Service is
supplied, a discount of 2.5 percent for available line voltages above 2 kilovolts will be
Attachment B
MEDIUM NON-RESIDENTIAL ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-4
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-4-3 Supersedes Sheet No E-4-3
Effective 7-1-20254 dated 7-1-20243
offered, but the City is not required to supply Service at a particular line voltage where it
has, or will install, ample facilities for supplying at another voltage equally or better suited
to the Customer's electrical requirements, as determined in the City’s sole discretion. The
City retains the right to change its line voltage at any time after providing reasonable
advance notice to any Customer receiving the discount in this section. The Customer then
has the option to change his system so as to receive Service at the new line voltage or to
accept Service (without voltage discount) through transformers to be supplied by the City
subject to a maximum kilovolt-ampere size limitation.
6. Standby Charge
a. Applicability: The standby charge, subject to the exemptions in subsection D(7)(e),
applies to Customers that have a non-utility generation source interconnected on
the Customer’s side of the City’s revenue meter and that occasionally require
backup power from the City due to non-operation of the non-utility generation
source.
b. Standby Charges:
c. Meters. A separate Meter is required for each non-utility generation source.
d. Calculation of Maximum Demand Credit.
(1) In the event the Customer’s Maximum Demand (as defined in Section D.3)
occurs when one or more of the non-utility generators on the Customer’s side of
the City’s revenue meter are not operating, the Maximum Demand will be reduced
by the sum of the Maximum Generation of those non-utility generators, but in no
event shall the Customer’s Maximum Demand be reduced below zero.
(2) If the non-utility generation source does not operate for an entire billing cycle,
the standby charge does not apply and the Customer shall not receive the Maximum
Demand credit described in this Section.
Attachment B
MEDIUM NON-RESIDENTIAL ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-4
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-4-4 Supersedes Sheet No E-4-4
Effective 7-1-20254 dated 7-1-20243
e. Exemptions.
(1) The standby charge shall not apply to backup generators designed to operate
only in the event of an interruption in utility Service and which are not used to
offset Customer electricity purchases.
(2) The standby charge shall not apply if the Customer meets the definition of an
“Eligible Customer-generator” as defined in California Public Utilities Code
Section 2827(b)(4), as amended.
(3) The applicability of these exemptions shall be determined at the discretion of
the Utilities Director.
{End}
Attachment B
MEDIUM NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-4-G
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-4-G-1 Supersedes Sheet No E-4-G-1
Effective 7-1-20254 dated 7-1-20234
A. APPLICABILITY:
This Rate Schedule applies to Customers who qualify for E-4 Service and who choose to
participate in the Palo Alto Green Program.
B. TERRITORY: The rate schedule applies everywhere the City of Palo Alto provides Electric Service.
C. UNBUNDLED RATES: 1. 100% Renewable Option:
Public Green
$ 49.1745.2
0.124410.12 0.027970.025 0.006040.0.165920.
$ 26.0923.7
0.080280.07 0.027970.025 0.006040.
Attachment B
MEDIUM NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-4-G
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-4-G-2 Supersedes Sheet No E-4-G-2
Effective 7-1-20254 dated 7-1-20234
2. 1000 kWh Block Purchase Option:
$ 49.1745.2
D. SPECIAL NOTES:
1. Calculation of Cost Components
The actual bill amount is calculated based on the applicable rates in Section C above and adjusted
for any applicable discounts, surcharges, and/or taxes. On a Customer’s bill statement, the bill
amount may be broken down into appropriate components as calculated under Section C.
2. Seasonal Rate Changes
The Summer Period is effective May 1 to October 31 and the Winter Period is effective
from November 1 to April 30. When the billing period includes use both in the Summer
and the Winter Periods, the usage will be prorated based on the number of days in each
seasonal period, and the charges based on the applicable rates therein. For further
discussion of bill calculation and proration, refer to Rule and Regulation 11.
3. Maximum Demand Meter
Whenever the monthly use of energy has exceeded 8,000 kilowatt-hours for three
consecutive months, a Maximum Demand Meter will be installed as promptly as is
practicable and thereafter continued in Service until the monthly use of energy has dropped
Attachment B
MEDIUM NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-4-G
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-4-G-3 Supersedes Sheet No E-4-G-3
Effective 7-1-20254 dated 7-1-20234
below 6,000 kilowatt-hours for twelve consecutive months, whereupon, at the option of the
City, it may be removed.
The Maximum Demand in any month will be the maximum average power in kilowatts
taken during any 15-minute interval in the month, provided that if the Customer’s load is
intermittent or subject to fluctuations, the City may use a 5-minute interval. A thermal-type
Demand Meter, which does not reset after a definite time interval, may be used at the City's
option.
The Billing Demand to be used in computing charges under this schedule will be the actual
Maximum Demand in kilowatts for the current month. An exception is that the Billing
Demand for Customers with Thermal Energy Storage (TES) will be based upon the actual
Maximum Demand of such Customers between the hours of noon and 6 PM on weekdays.
4. Changing Rate Schedules
Customers may request a rate schedule change at any time to any applicable full-service
rate schedule as is applicable to their kilowatt-Demand and kilowatt-hour usage profile.
5. Palo Alto Green Program Description and Participation
Palo Alto Green Service includes the purchase by the City of Palo Alto Utilities
Department of enough renewable energy credits (RECs) to match 100% of the metered
energy usage at the customer’s facility each month. Any Customer may alternately request
that CPAU purchase a specific number of 1000 kilowatt-hour (kWh) blocks of RECs.
CPAU will charge the Customer the Palo Alto Green Charge for each such requested block.
These REC purchases support the production of renewable energy, increase the financial
value of power from renewal sources, and creates a transparent and sustainable market that
encourages new development of wind and solar.
Customers choosing to participate shall fill out a Palo Alto Green Power Program
application provided by the Customer Service Center. Customers may request at any time,
in writing, a change to the number of blocks they wish to purchase under the Palo Alto
Green Program.
6. Primary Voltage Discount
Where delivery is made at the same voltage as that of the line from which the Service is
supplied, a discount of 2.5 percent for available line voltages above 2 kilovolts will be
Attachment B
MEDIUM NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-4-G
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-4-G-4 Supersedes Sheet No E-4-G-4
Effective 7-1-20254 dated 7-1-20234
offered, but the City is not required to supply Service at a particular line voltage where it
has, or will install, ample facilities for supplying at another voltage equally or better suited
to the Customer's electrical requirements, as determined in the City’s sole discretion. The
City retains the right to change its line voltage at any time after providing reasonable
advance notice to any Customer receiving the discount in this section. The Customer then
has the option to change the system so as to receive Service at the new line voltage or to
accept Service (without voltage discount) through transformers to be supplied by the City
subject to a maximum kilovolt-ampere size limitation.
8. Standby Charge
a. Applicability: The standby charge, subject to the exemptions in subsection D(8)(e),
applies to Customers that have a non-utility generation source interconnected on
the Customer’s side of the City’s revenue Meter and that occasionally require
backup power from the City due to non-operation of the non-utility generation
source.
b. Standby Charges:
c. Meters: A separate Meter is required for each non-utility generation source.
d. Calculation of Maximum Demand Credit:
(1) In the event the Customer’s Maximum Demand (as defined in Section D.3)
occurs when one or more of the non-utility generators on the Customer’s side of
the City’s revenue Meter are not operating, the Maximum Demand will be reduced
by the sum of the Maximum Generation of those non-utility generators, but in no
event shall the Customer’s Maximum Demand be reduced below zero.
(2) If the non-utility generation source does not operate for an entire billing cycle,
the standby charge does not apply and the Customer shall not receive the Maximum
Demand credit described in this Section.
Attachment B
MEDIUM NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-4-G
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-4-G-5 Supersedes Sheet No E-4-G-5
Effective 7-1-20254 dated 7-1-20234
e. Exemptions:
(1) The standby charge shall not apply to backup generators designed to operate
only in the event of an interruption in utility Service and which are not used to
offset Customer electricity purchases.
(2) The standby charge shall not apply if the Customer meets the definition of an
“Eligible Customer-generator” as defined in California Public Utilities Code
Section 2827(b)(4), as amended.
(3) The applicability of these exemptions shall be determined at the discretion of
the Utilities Director.
{End}
Attachment B
MEDIUM NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE
UTILITY RATE SCHEDULE E-4 TOU
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-4-TOU-1 Supersedes Sheet No E-4-TOU-1
Effective 7-1-20254 dated 7-1-20243
A. APPLICABILITY:
This voluntary Rate Schedule applies to Demand metered Secondary Electric Service for
Customers with Demand between 500 and 1,000 kilowatts per month and who have sustained
this level of usage for at least three consecutive months during the most recent 12 month period.
This Rate Schedule may include Service to Master-Metered multi-family facilities or other
facilities requiring Demand metered Service, as determined by the City.
B. TERRITORY:
This rate schedule applies everywhere the City of Palo Alto provides Electric Service.
C. UNBUNDLED RATES:
Rates per kilowatt (kW) and kilowatt-hour (kWh):
0.172080.170 0.028170.025 $ 0.206290.201
Attachment B
MEDIUM NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE
UTILITY RATE SCHEDULE E-4 TOU
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-4-TOU-2 Supersedes Sheet No E-4-TOU-2
Effective 7-1-20254 dated 7-1-20243
0.120960.119 $ 0.02775 $ 0.154750.150
D. SPECIAL NOTES:
1. Calculation of Cost Components
The actual bill amount is calculated based on the applicable rates in Section C above and adjusted
for any applicable discounts, surcharges and/or taxes. On a Customer’s bill statement, the bill
amount may be broken down into appropriate components as calculated under Section C.
2. Definition of Time Periods
SUMMER PERIOD (Service from May 1 to October 31):
Energy
Peak: 4:00 p.m. to 9:00 p.m. Monday through Friday (except holidays)
Mid Peak: 2:00 p.m. to 4:00 p.m. Monday through Friday (except holidays)
9:00 p.m. to 11:00 p.m.
Off-Peak: All other hours Monday through Friday (except holidays)
All day Saturday, Sunday, and holidays
Demand
Peak: 4:00 p.m. to 9:00 p.m. Monday through Friday (except holidays)
Max Demand: All hours Every day
WINTER PERIOD (Service from November 1 to April 30):
Attachment B
MEDIUM NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE
UTILITY RATE SCHEDULE E-4 TOU
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-4-TOU-3 Supersedes Sheet No E-4-TOU-3
Effective 7-1-20254 dated 7-1-20243
Energy
Peak: 4:00 p.m. to 9:00 p.m. Monday through Friday (except holidays)
Mid Peak: 9:00 a.m. to 2:00 p.m. Monday through Friday (except holidays)
Off-Peak: All other hours Monday through Friday (except holidays)
All day Saturday, Sunday, and holidays
Demand
Peak: 4:00 p.m. to 9:00 p.m. Monday through Friday (except holidays)
Max Demand: All hours Every day
TYPES OF DEMAND CHARGES: The Peak Demand Charge per Kilowatt applies to the
maximum peak-period Demand during the time periods noted above. The Maximum (Max)
Demand charge per Kilowatt applies to the maximum Demand at any time during the month. Both
Demand charges apply in each Billing Period, and the maximum peak-period Demand and
maximum Demand may occur at different times in the Billing Period depending on Customer
usage patterns.
SEASONAL RATE CHANGES: When the Billing Period includes use in both the Summer and
the Winter periods, the usage will be prorated based on the number of days in each seasonal period,
and the Charges based on the applicable rates therein. For further discussion of bill calculation
and proration, refer to Rule and Regulation 11.
3. Demand Meter Whenever the monthly use of energy has exceeded 8,000 kilowatt-hours for three consecutive
months, a Demand Meter will be installed as promptly as is practicable and thereafter continued
in Service until the monthly use of energy has fallen below 6,000 kilowatt-hours for twelve
consecutive months, whereupon, at the option of the City, it may be removed.
The Billing Demand to be used in computing charges under this schedule will be the actual
Maximum Demand in kilowatts taken during any 15-minute interval in each of the designated time
periods as defined under Section D.2.
4. Changing Rate Schedules
Customers electing to be served under E-4 TOU must remain on said Rate Schedule for a
minimum of 12 months. Should the Customer so wish, at the end of 12 months, the Customer
may request a Rate Schedule change to any applicable City of Palo Alto full-service Rate
Attachment B
MEDIUM NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE
UTILITY RATE SCHEDULE E-4 TOU
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-4-TOU-4 Supersedes Sheet No E-4-TOU-4
Effective 7-1-20254 dated 7-1-20243
Schedule as is suitable to their kilowatt Demand and kilowatt-hour usage.
5. Primary Voltage Discount
Where delivery is made at the same voltage as that of the line from which the Service is
supplied, a discount of 2.5 percent for available line voltages above 2 kilovolts will be offered,
but the City is not required to supply Service at a particular line voltage where it has, or will
install, ample facilities for supplying at another voltage equally or better suited to the Customer's
electrical requirements, as determined in the City’s sole discretion. The City retains the right to
change its line voltage at any time after providing reasonable advance notice to any Customer
receiving the discount in this section. The Customer then has the option to change his system so
as to receive Service at the new line voltage or to accept Service (without voltage discount)
through transformers to be supplied by the City subject to a maximum kilovolt-ampere size
limitation.
7. Standby Charge
a. Applicability: The standby charge, subject to the exemptions in subsection D(7)(e),
applies to Customers that have a non-utility generation source interconnected on the
Customer’s side of the City’s revenue Meter and that occasionally require backup power
from the City due to non-operation of the non-utility generation source.
b. Standby Charges:
c. Meters. A separate Meter is required for each non-utility generation source.
d. Calculation of Maximum Demand Credit.
(1) In the event the Customer’s Maximum Demand occurs when one or more of the
non-utility generators on the Customer’s side of the City’s revenue Meter are not operating,
the Maximum Demand will be reduced by the sum of the Maximum Generation of those
non-utility generators, but in no event shall the Customer’s Maximum Demand be reduced
below zero.
Attachment B
MEDIUM NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE
UTILITY RATE SCHEDULE E-4 TOU
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-4-TOU-5 Supersedes Sheet No E-4-TOU-5
Effective 7-1-20254 dated 7-1-20243
(2) If the non-utility generation source does not operate for an entire billing cycle, the
standby charge does not apply and the Customer shall not receive the Maximum Demand
credit described in this Section.
e. Exemptions.
(1) The standby charge shall not apply to backup generators designed to operate only in
the event of an interruption in utility Service and which are not used to offset Customer
electricity purchases.
(2) The standby charge shall not apply if the Customer meets the definition of an “Eligible
Customer-generator” as defined in California Public Utilities Code Section 2827(b)(4), as
amended.
(3) The applicability of these exemptions shall be determined at the discretion of the
Utilities Director.
{End}
Attachment B
LARGE NON-RESIDENTIAL ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-7
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-7-1 Supersedes Sheet No E-7-1
Effective 7-1-20254 dated 7-1-20243
A. APPLICABILITY:
This Rate Schedule applies to Demand metered Service for large non-residential Customers with
a Maximum Demand of at least 1,000KW per month per site, who have sustained this Demand
level at least 3 consecutive months during the last twelve months.
B. TERRITORY:
This rate schedule applies everywhere the City of Palo Alto provides Electric Service.
C. RATES: Rates per kilowatt (kW) and kilowatt-hour (kWh):
Customer Charge
D. SPECIAL NOTES:
1. Calculation of Charges
The actual bill amount is calculated based on the applicable rates in Section C above and
adjusted for any applicable discounts, surcharges and/or taxes. On a Customer’s bill
statement, the bill amount may be broken down into appropriate components as calculated
under Section C.
Attachment B
LARGE NON-RESIDENTIAL ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-7
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-7-2 Supersedes Sheet No E-7-2
Effective 7-1-20254 dated 7-1-20243
2. Seasonal Rate Changes
The Summer Period is effective May 1 to October 31 and the Winter Period is effective
from November 1 to April 30. When the billing period includes use both in the summer
and in the winter periods, the usage will be prorated based on the number of days in each
seasonal period, and the charges based on the applicable rates therein. For further
discussion of bill calculation and proration, refer to Rule and Regulation 11.
3. Request for Service
Qualifying Customers may request Service under this schedule for more than one Account
or one Meter if the Accounts are on one site. A site, for the purposes of this Rate Schedule,
consists of one or more Accounts which cover contiguous parcels of land with no
intervening public right-of-ways (e.g. streets) and which have a common billing address.
4. Maximum Demand Meter
Whenever the monthly use of energy has exceeded 8,000 kilowatt-hours for three
consecutive months, a Maximum Demand Meter will be installed as promptly as is
practicable and thereafter continued in Service until the monthly use of energy has fallen
below 6,000 kilowatt-hours for twelve consecutive months, whereupon, at the option of the
City, it may be removed.
The Maximum Demand in any month will be the maximum average power in kilowatts
taken during any 15-minute interval in the month provided that if the Customer’s load is
intermittent or subject to fluctuations, the City may use a 5-minute interval. A thermal-
type Demand Meter which does not reset after a definite time interval may be used at the
City's option.
The Billing Demand to be used in computing charges under this schedule will be the actual
Maximum Demand in kilowatts for the current month. An exception is that the Billing
Demand for Customers with Thermal Energy Storage (TES) will be based upon the actual
Maximum Demand of such Customers between the hours of noon and 6 pm on weekdays.
Attachment B
LARGE NON-RESIDENTIAL ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-7
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-7-3 Supersedes Sheet No E-7-3
Effective 7-1-20254 dated 7-1-20243
5. Changing Rate Schedules
Customers may request a rate schedule change at any time to any applicable full service
rate schedule as is applicable to their kilowatt-Demand and kilowatt-hour usage profile.
6. Primary Voltage Discount
Where delivery is made at the same voltage as that of the line from which the Service is
supplied, a discount of 2.8 percent for available line voltages above 2 kilovolts will be
offered, but the City is not required to supply Service at a particular line voltage where it
has, or will install, ample facilities for supplying at another voltage equally or better suited
to the Customer's electrical requirements, as determined in the City’s sole discretion. The
City retains the right to change its line voltage at any time after providing reasonable
advance notice to any Customer receiving the discount in this section. The Customer then
has the option to change his system so as to receive Service at the new line voltage or to
accept Service (without voltage discount) through transformers to be supplied by the City
subject to a maximum kVA size limitation.
7. Standby Charge
a. Applicability: The standby charge, subject to the exemptions in subsection D(8)(e),
applies to Customers that have a non-utility generation source interconnected on
the Customer’s side of the City’s revenue Meter and that occasionally require
backup power from the City due to non-operation of the non-utility generation
source.
b. Standby Charges:
c. Meters. A separate Meter is required for each non-utility generation source.
d. Calculation of Maximum Demand Credit.
Attachment B
LARGE NON-RESIDENTIAL ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-7
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-7-4 Supersedes Sheet No E-7-4
Effective 7-1-20254 dated 7-1-20243
(1) In the event the Customer’s Maximum Demand (as defined in Section D.4)
occurs when one or more of the non-utility generators on the Customer’s side of
the City’s revenue Meter are not operating, the Maximum Demand will be reduced
by the sum of the Maximum Generation of those non-utility generators, but in no
event shall the Customer’s Maximum Demand be reduced below zero.
(2) If the non-utility generation source does not operate for an entire billing cycle,
the standby charge does not apply and the Customer shall not receive the Maximum
Demand credit described in this Section.
e. Exemptions.
(1) The standby charge shall not apply to backup generators designed to operate
only in the event of an interruption in utility Service and which are not used to
offset Customer electricity purchases.
(2) The standby charge shall not apply if the Customer meets the definition of an
“Eligible Customer-generator” as defined in California Public Utilities Code
Section 2827(b)(4) , as amended.
(3) The applicability of these exemptions shall be determined at the discretion of
the Utilities Director.
{End}
Attachment B
LARGE NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-7-G
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-7-G-1 Supersedes Sheet No E-7-G-1
Effective 7-1-20254 dated 7-1-20243
A. APPLICABILITY:
This Rate Schedule applies to Customers who qualify for E-7 Service and who choose to
participate in the Palo Alto Green Program.
B. TERRITORY:
The rate schedule applies everywhere the City of Palo Alto provides Electric Service.
C. UNBUNDLED RATES:
1. 100% Renewable Option:
Public Green
$ 43.6140.
30.5727.
Attachment B
LARGE NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-7-G
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-7-G-2 Supersedes Sheet No E-7-G-2
Effective 7-1-20254 dated 7-1-20243
2. 1000 kWh Block Purchase Option:
$ 43.6140.
30.5727.
D. SPECIAL NOTES:
1. Calculation of Charges
The actual bill amount is calculated based on the applicable rates in Section C above and
adjusted for any applicable discounts, surcharges and/or taxes. On a Customer’s bill
statement, the bill amount may be broken down into appropriate components as calculated
under Section C.
2. Seasonal Rate Changes
The Summer Period is effective May 1 to October 31 and the Winter Period is effective
from November 1 to April 30. When the billing period includes use both in the Summer
and the Winter Periods, the usage will be prorated based on the number of days in each
seasonal period, and the charges based on the applicable rates therein. For further
discussion of bill calculation and proration, refer to Rule and Regulation 11.
3. Maximum Demand Meter
Whenever the monthly use of energy has exceeded 8,000 kilowatt-hours for three
Attachment B
LARGE NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-7-G
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-7-G-3 Supersedes Sheet No E-7-G-3
Effective 7-1-20254 dated 7-1-20243
consecutive months, a Maximum Demand Meter will be installed as promptly as is
practicable and thereafter continued in Service until the monthly use of energy has dropped
below 6,000 kilowatt-hours for twelve consecutive months, whereupon, at the option of the
City, it may be removed.
The Maximum Demand in any month will be the maximum average power in kilowatts
taken during any 15-minute interval in the month, provided that if the Customer’s load is
intermittent or subject to fluctuations, the City may use a 5-minute interval. A thermal-type
Demand Meter which does not reset after a definite time interval may be used at the City's
option.
The Billing Demand to be used in computing charges under this schedule will be the actual
Maximum Demand in kilowatts for the current month. An exception is that the Billing
Demand for Customers with Thermal Energy Storage (TES) will be based upon the actual
Maximum Demand of such Customers between the hours of noon and 6 PM on weekdays.
4. Request for Service
Qualifying Customers may request Service under this schedule for more than one Account
or one Meter if the Accounts are at one site. A site, for the purposes of this Rate Schedule,
consists of one or more Accounts which cover contiguous parcels of land with no
intervening public right-of-ways (e.g. streets) and which have a common billing address.
5. Changing Rate Schedules
Customers may request a rate schedule change at any time to any applicable full service
rate schedule as is applicable to their kilowatt-Demand and kilowatt-hour usage profile
6. Palo Alto Green Program Description and Participation
Palo Alto Green Service includes the purchase by the City of Palo Alto Utilities
Department of enough renewable energy credits (RECs) to match 100% of the metered
energy usage at the Customer’s facility each month. Any Customer may alternately request
that CPAU purchase a specific number of 1000 kilowatt-hour (kWh) blocks of RECs.
CPAU will charge the Customer the Palo Alto Green Charge for each such requested block.
These REC purchases support the production of renewable energy, increase the financial
value of power from renewal sources, and creates a transparent and sustainable market that
encourages new development of wind and solar.
Attachment B
LARGE NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-7-G
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-7-G-4 Supersedes Sheet No E-7-G-4
Effective 7-1-20254 dated 7-1-20243
Customers choosing to participate shall fill out a Palo Alto Green Power Program
application provided by the Customer Service Center. Customers may request at any time,
in writing, a change to the number of blocks they wish to purchase under the Palo Alto
Green Program.
7. Primary Voltage Discount
Where delivery is made at the same voltage as that of the line from which the Service is
supplied, a discount of 2.8 percent for available line voltages above 2 kilovolts will be
offered, but the City is not required to supply Service at a qualified line voltage where it
has, or will install, ample facilities for supplying at another voltage equally or better suited
to the Customer's Electrical requirements, as determined in the City’s sole discretion. The
City retains the right to change its line voltage at any time after providing reasonable
advance notice to any Customer receiving the discount in this section. The Customer then
has the option to change the system so as to receive Service at the new line voltage or to
accept Service (without voltage discount) through transformers to be supplied by the City
subject to a maximum kilovolt-ampere size limitation.
9. Standby Charge
a. Applicability: The standby charge, subject to the exemptions in subsection D(9)(e),
applies to Customers that have a non-utility generation source interconnected on
the Customer’s side of the City’s revenue Meter and that occasionally require
backup power from the City due to non-operation of the non-utility generation
source.
b. Standby Charges:
Reserved Capacity)
Summer Period 9.259.16 $ 31.5428.41 $ 40.7937.57
c. Meters: A separate Meter is required for each non-utility generation source.
d. Calculation of Maximum Demand Credit:
Attachment B
LARGE NON-RESIDENTIAL GREEN POWER ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-7-G
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-7-G-5 Supersedes Sheet No E-7-G-5
Effective 7-1-20254 dated 7-1-20243
(1) In the event the Customer’s Maximum Demand (as defined in Section D.3)
occurs when one or more of the non-utility generators on the Customer’s side of
the City’s revenue Meter are not operating, the Maximum Demand will be reduced
by the sum of the Maximum Generation of those non-utility generators, but in no
event shall the Customer’s Maximum Demand be reduced below zero.
(2) If the non-utility generation source does not operate for an entire billing cycle,
the standby charge does not apply and the Customer shall not receive the Maximum
Demand credit described in this Section.
e. Exemptions:
(1) The standby charge shall not apply to backup generators designed to operate
only in the event of an interruption in utility Service and which are not used to
offset Customer electricity purchases.
(2) The standby charge shall not apply if the Customer meets the definition of an
“Eligible Customer-generator” as defined in California Public Utilities Code
Section 2827(b)(4), as amended.
(3) The applicability of these exemptions shall be determined at the discretion of
the Utilities Director.
{End}
Attachment B
LARGE NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE
UTILITY RATE SCHEDULE E-7 TOU
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-7-TOU-1 Supersedes Sheet No E-7-TOU-1
Effective 7-1-20254 dated 7-1-20243
A. APPLICABILITY:
This voluntary Rate Schedule applies to Demand metered Service for non-residential Customers
with a Maximum Demand of at least 1,000KW per month per site, who have sustained this
Demand level at least 3 consecutive months during the last twelve months.
B. TERRITORY:
This rate schedule applies everywhere the City of Palo Alto provides Electric Service.
C. UNBUNDLED RATES:
Rates per kilowatt (kW) and kilowatt-hour (kWh):
0.181990.18 $ $ $
0.122250.12 $ $ $
Attachment B
LARGE NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE
UTILITY RATE SCHEDULE E-7 TOU
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-7-TOU-2 Supersedes Sheet No E-7-TOU-2
Effective 7-1-20254 dated 7-1-20243
D. SPECIAL NOTES:
1. Calculation of Charges
The actual bill amount is calculated based on the applicable rates in Section C above and adjusted
for any applicable discounts, surcharges and/or taxes. On a Customer’s bill statement, the bill
amount may be broken down into appropriate components as calculated under Section C.
2. Definition of Time Periods
SUMMER PERIOD (Service from May 1 to October 31):
Energy
Peak: 4:00 pm to 9:00 p.m. Monday through Friday (except holidays)
Mid Peak: 2:00 p.m. to 4:00 p.m. Monday through Friday (except holidays)
9:00 p.m. to 11:00 p.m.
Off-Peak: All other hours Monday through Friday (except holidays)
All day Saturday, Sunday, and holidays
Demand
Peak: 4:00 p.m. to 9:00 p.m. Monday through Friday (except holidays)
Max Demand: All hours Every day
WINTER PERIOD (Service from November 1 to April 30):
Energy
Peak: 4:00 p.m. to 9:00 p.m. Monday through Friday (except holidays)
Mid Peak: 9:00 a.m. to 2:00 p.m. Monday through Friday (except holidays)
Attachment B
LARGE NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE
UTILITY RATE SCHEDULE E-7 TOU
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-7-TOU-3 Supersedes Sheet No E-7-TOU-3
Effective 7-1-20254 dated 7-1-20243
Off-Peak: All other hours Monday through Friday (except holidays)
All day Saturday, Sunday, and holidays
Demand
Peak: 4:00 p.m. to 9:00 p.m. Monday through Friday (except holidays)
Max Demand: All hours Every day
TYPES OF DEMAND CHARGES: The Peak Demand Charge per Kilowatt applies to the
maximum peak-period Demand during the time periods noted above. The Maximum (Max)
Demand charge per Kilowatt applies to the maximum Demand at any time during the month. Both
Demand Charges apply in each Billing Period, and the maximum peak-period Demand and
maximum Demand may occur at different times in the Billing Period depending on Customer
usage patterns.
SEASONAL RATE CHANGES: When the Billing Period includes use in both the Summer and
the Winter periods, the usage will be prorated based on the number of days in each seasonal period,
and the Charges based on the applicable rates therein. For further discussion of bill calculation
and proration, refer to Rule and Regulation 11.
3. Request for Service
Qualifying Customers may request Service under this schedule for more than one Account or one
Meter if the Accounts are on one site. A site, for the purposes of this Rate Schedule, consists of
one or more Accounts which cover contiguous parcels of land with no intervening public right-of-
ways (e.g. streets) and which have a common billing address. 4. Demand Meter
Whenever the monthly use of energy has exceeded 8,000 kilowatt-hours for three consecutive
months, a Demand Meter will be installed as promptly as is practicable and thereafter continued
in Service until the monthly use of energy has fallen below 6,000 kilowatt-hours for twelve
consecutive months, whereupon, at the option of the City, it may be removed.
The Billing Demand to be used in computing charges under this schedule will be the actual
Maximum Demand in kilowatts taken during any 15-minute interval in each of the designated time
periods as defined under Section D.2.
Attachment B
LARGE NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE
UTILITY RATE SCHEDULE E-7 TOU
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-7-TOU-4 Supersedes Sheet No E-7-TOU-4
Effective 7-1-20254 dated 7-1-20243
5. Changing Rate Schedules
Customers electing to be served under E-7 TOU must remain on said Rate Schedule for a minimum
of 12 months. Should the Customer so wish, at the end of 12 months, the Customer may request
a Rate Schedule change to any applicable City of Palo Alto full-service Rate Schedule as is suitable
to their kilowatt Demand and kilowatt-hour usage.
6. Primary Voltage Discount
Where delivery is made at the same voltage as that of the line from which the Service is supplied,
a discount of 2.8 percent for available line voltages above 2 kilovolts will be offered, but the City
is not required to supply Service at a particular line voltage where it has, or will install, ample
facilities for supplying at another voltage equally or better suited to the Customer's electrical
requirements, as determined in the City’s sole discretion. The City retains the right to change its
line voltage at any time after providing reasonable advance notice to any Customer receiving the
discount in this section. The Customer then has the option to change his system so as to receive
Service at the new line voltage or to accept Service (without voltage discount) through
transformers to be supplied by the City subject to a maximum kilovolt-ampere size limitation.
7. Standby Charge
a. Applicability: The standby charge, subject to the exemptions in subsection D(8)(e),
applies to Customers that have a non-utility generation source interconnected on the
Customer’s side of the City’s revenue Meter and that occasionally require backup power
from the City due to non-operation of the non-utility generation source.
b. Standby Charges:
c. Meters. A separate Meter is required for each non-utility generation source.
d. Calculation of Maximum Demand Credit.
(1) In the event the Customer’s Maximum Demand occurs when one or more of the
Attachment B
LARGE NON-RESIDENTIAL ELECTRIC TIME OF USE SERVICE
UTILITY RATE SCHEDULE E-7 TOU
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No E-7-TOU-5 Supersedes Sheet No E-7-TOU-5
Effective 7-1-20254 dated 7-1-20243
non-utility generators on the Customer’s side of the City’s revenue Meter are not operating,
the Maximum Demand will be reduced by the sum of the Maximum Generation of those
non-utility generators, but in no event shall the Customer’s Maximum Demand be reduced
below zero.
(2) If the non-utility generation source does not operate for an entire billing cycle, the
standby charge does not apply and the Customer shall not receive the Maximum Demand
credit described in this Section.
e. Exemptions.
(1) The standby charge shall not apply to backup generators designed to operate only in
the event of an interruption in utility Service and which are not used to offset Customer
electricity purchases.
(2) The standby charge shall not apply if the Customer meets the definition of an “Eligible
Customer-generator” as defined in California Public Utilities Code Section 2827(b)(4) , as
amended.
(3) The applicability of these exemptions shall be determined at the discretion of the
Utilities Director.
{End}
Attachment B
STREET LIGHTS
UTILITY RATE SCHEDULE E-14
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No. E-14-1 Supersedes Sheet No. E-14-1
Effective 7-1-20254 dated 7-1-20242
A. APPLICABILITY:
This Rate Schedule applies to all street and highway lighting installations ranging in voltages from
120 to 480 which CPAU elects to operate and maintain.
B. TERRITORY:
Within the incorporated limits of the City of Palo Alto and on land owned or leased by the City.
C. RATES: $ Per Lamp Per Month –
Attachment B
STREET LIGHTS
UTILITY RATE SCHEDULE E-14
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No. E-14-2 Supersedes Sheet No. E-14-2
Effective 7-1-20254 dated 7-1-20242
$ Per Lamp Per Month –
CPAU supplies electricity and
switching and maintains lighting
system, including lamps and glassware.
Lamp Rating:
Street Lights
Mercury-Vapor Lamps
400 watts 53.5348.29
High Pressure Sodium Vapor Lamps
70 watts 35.37 31.90
100 watts 45.35 40.92
150 watts 62.00 55.94
250 watts 95.30 85.99
Light Emitting Diode (LED) Lamps
70 watts-equivalent 13.27 11.96
100 watts-equivalent 20.83 18.79
150 watts-equivalent 27.80 25.07
175 watts-equivalent 31.43 28.35
250 watts 46.87 42.28
Traffic Signals
12” Head Total (Red Yellow Green) 27.12 24.45
8” Head Total (RYG) 23.55 21.22
12” Arrow Total (RYG) 25.49 22.97
12” Beacon 10.19 9.19
Pedestrian Head 9.36 8.44
Controller 20.05 18.10
Speed Signs 92.73 83.74
Attachment B
STREET LIGHTS
UTILITY RATE SCHEDULE E-14
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No. E-14-3 Supersedes Sheet No. E-14-3
Effective 7-1-20254 dated 7-1-20242
D. SPECIAL CONDITIONS:
1. Point of Delivery: Delivery will be made to the Customer's system at a Service point or at points
designated by CPAU. CPAU will furnish the Service connection to one point for each lamp or group
of lamps, provided the Customer has designed the system to include the minimum number of delivery
points. CPAU will make all underground connections to CPAU’s system at the Customer's expense.
2. Switching: CPAU will perform switching (on CPAU's side of the points of delivery) at no Charge,
provided there are at least 10 kilowatts of lamp load on each circuit separately switched, including all
lamps on the circuit whether served under this Rate Schedule or not. An extra charge of $2.50 per month
will be made for each circuit separately switched unless such switching installation is made for CPAU's
convenience.
3. Annual Burning Schedule: The rates in this Rate Schedule apply to lamps which will be turned on
and off once each night in accordance with a regular burning schedule approved by CPAU and not
exceeding 4,100 hours per year.
4. Maintenance: The rates in this Rate Schedule include all labor necessary for replacement of
glassware, including inspection and cleaning. Maintenance of glassware by CPAU is limited to standard
glassware that is commonly used and manufactured in reasonably large quantities, as determined by
CPAU in its sole discretion. The rates include maintenance of circuits between lamp posts and of circuits
and equipment in and on the posts, provided these are all of good standard construction as determined
by CPAU. CPAU in its sole discretion may decline to grant rates for maintenance of systems with non-
standard glassware, or inadequate circuitry and equipment. Rates applied to any agency other than the
City of Palo Alto also include painting of posts with one coat of good ordinary paint, as determined by
CPAU to be needed to maintain good appearance. Maintenance does not include replacement of posts
damaged by third parties or acts of nature.
5. Rates For Lamps Not on this Rate Schedule: In the event a Customer installs a lamp which is not
represented on this Rate Schedule, CPAU will prepare an interim rate reflecting CPAU's estimated costs
associated with the specific lamp. This interim rate will serve as the effective rate for billing purposes
until the new lamp rating is added to Rate Schedule E-14.
{End}
Attachment B
UNMETERED ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-16
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No. E-16-1 Supersedes Sheet No. E-16-1
Effective 7-1-202516 dated 07-01-2016
A. APPLICABILITY:
This rate schedule is applicable under the terms and conditions of the City of Palo Alto Utilities
Department to Customers who contract with the City for unmetered electric service for
billboards, unmetered telephone services, telephone booths, railroad signals, cathodic protection
units, traffic cameras, wireless antenna and related equipment, community antenna television and
video systems, cable TV power supplies, and automatic irrigation systems and also applies to
other miscellaneous Electric Utility fees to various public agencies and private entities.
B. TERRITORY:
Within the incorporated limits of the City of Palo Alto and land owned or leased by the City.
C. NET MONTHLY BILL:
1. Customer Charge using annual SEIU salary schedule: $9.007.31 per
month
2. Energy Charge:
(for all kWh supplied) using Electric Rate Schedule E2 plus all applicable riders
3. Minimum Charge:
Minimum monthly charge will be the Customer Charge.
D. DETERMINATION OF ENERGY REQUIREMENTS:
a. Initial Inventory
Customer shall enter into a contract for service under this Schedule and provide a written
inventory of all equipment at each of service requested, including the type and nameplate
rating for each piece of equipment. The billing energy for each point of service will be
determined by the Utilities Electric Engineering Division estimation of the kWh usage
based on the type, rating and quantity of the equipment provided by the Customer.
Monthly bill will be based on the following calculations:
1. Total Wattage.
2. Total Wattage times estimated annual operating hours as set in the contract equals
annual watt hours.
3. Annual watt hours divided by 1000 hours equals annual kilowatt hours (kWh)
Attachment B
UNMETERED ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-16
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No. E-16-2 Supersedes Sheet No. E-16-2
Effective 7-1-202516 dated 07-01-2016
4. Annual kWh divided by twelve (12) months equal monthly kWh.
5. Monthly kWh times current rate per kWh = monthly bill for each unmetered service
location or equipment.
b. Updating Inventory
Customer will update its inventory by informing the Utilities Electric Engineering Division
in writing of changes in type, rating and/or quantity of equipment as such changes occur,
and billings will be adjusted accordingly. Upon Utilities Electric Engineering Division
request, but no later than the one year anniversary of the date on which Customer first takes
service, Customer shall provide an updated inventory of all equipment at each point of
service.
c. Test Metering
The Utilities Electric Engineering Division may, at its discretion, test meter the load at
various types and ratings of the Customer’s equipment to the extent necessary to verify the
estimated kWh usage used for billing purpose and, where dictated by such test metering,
Utilities Electric Engineering Division will make prospective adjustments in estimated
usage for subsequent billing purposes; however, Utilities shall be under no obligation to
test meter- the load of Customer’s equipment. Utilities’ decision not to test meter the load
of Customer’s equipment shall not release Customer from the obligation to provide to
Utilities Electric Engineering Division, and to update, annually as provided in section b,
an accurate inventory of the types, rating and quantities of equipment upon which billing
is based.
d. Inspection
The Utilities Electric Engineering Division shall endeavor to inspect the equipment at each
point of service annually as close to the anniversary date of the contract as is practical, and
make prospective adjustments in billing as indicated by such inspections; however,
Utilities shall be under no obligation to conduct such inspections for the purpose of
determining accuracy of billing or otherwise. Utilities decisions not to conduct such
inspections shall not release Customer from the obligation to provide to Utilities Electric
Engineering Division, and to update, an accurate inventory of the types, rating and
quantities of equipment upon which billing is based.
e. Billing for Service
As the service described in this schedule is unmetered, Customer agrees to pay amounts
billed in accordance with the current inventory, regardless of whether any of the
installations of the Customer’s equipment were electrically operable during the period in
Attachment B
UNMETERED ELECTRIC SERVICE
UTILITY RATE SCHEDULE E-16
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Sheet No. E-16-3 Supersedes Sheet No. E-16-3
Effective 7-1-202516 dated 07-01-2016
question and regardless of the cause of such equipment failure to operate.
E. MISCELLANEOUS RATES:
Service Description Rate *
1. License Fee for Electric Conduit Usage
(A) Exclusive use $ 1.94/ft/yr
(B) Non-Exclusive use 0.97/ft/yr
2. Processing Fee for Electric Conduit Usage Actual Cost
3. License Fee for Utility Pole Attachments
(A) 1 ft. of usable space $ 29.5947.60/pole/yr
(B) 2 ft. of usable space 32.3995.20/pole/yr
(C) 3 ft. of usable space 35.18142.80/pole/yr
4 ft. of usable space $37.98/pole/yr
4. Processing Fee for Utility Pole Attachments $1525.00/pole
5. License Fee for mounting communication equipment
including distributed antenna systems on utility poles
$329.44270.00/pole/yr
* Rates are monthly unless otherwise indicated.
F. NOTES:
The fees set forth in Section E.1 through E.5, inclusive, are subject to adjustment annually in
accordance with fluctuations in the Consumer Price Index (CPI), if any. The base for computing
the adjustment is the Consumer Price Index for All Urban Consumers (CPI-U) for the San
Francisco-Oakland-San Jose MSA, which is published by the U.S. Department of Labor,
Bureau of Labor Statistics for the month of December of a base year, which falls within the
year in which a master license agreement is signed by the City and the licensee. The adjustment
shall be calculated, if there is an increase or decrease between December of a base year (when
the rate(s) is/are first applicable) and December of any subsequent base year.
{End}
Attachment B
EXPORT ELECTRICITY COMPENSATION
UTILITY RATE SCHEDULE E-EEC-1
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No. E-EEC-1 Sheet No.E-EEC-1
dated 7-1-20243 Effective 7-1-20254
A. APPLICABILITY:
This Rate Schedule applies in conjunction with the otherwise applicable Rate Schedules for each
Customer class. This Rate Schedule may not apply in conjunction with any time-of-use Rate Schedule.
This Rate Schedule applies to Customer-Generators as defined in Rule and Regulation 2 who are either
not eligible for Net Energy Metering or who are eligible for Net Energy metering but elect to take
Service under this Rate Schedule.
B. TERRITORY:
This rate schedule applies everywhere the City of Palo Alto provides Electric Service.
C. RATE:
The following compensation rate shall apply to all electricity exported to the grid.
Per kWh
Export electricity compensation rate $ 0.1243 0.1420
D. SPECIAL CONDITIONS
1. Metering equipment: Electricity delivered by CPAU to the Customer-Generator or received by
CPAU from the Customer-Generator shall be measured using a Meter capable of registering the
flow of electricity in two directions (aka “bidirectional meter”). The electrical power
measurements will be used for billing the Customer-Generator. CPAU shall furnish, install and
own the appropriate Meter.
2. Billing:
a. CPAU shall measure during the billing period, in kilowatt-hours, the electricity delivered
and received after the Customer-Generator serves its own instantaneous load.
b. CPAU shall bill the Customer-Generator consumption charges for the electricity delivered
by CPAU to the Customer-Generator based on the Customer-Generator’s applicable Rate
Schedule.
c. In the event the electricity generated exceeds the electricity consumed and therefore is
received by CPAU, the Customer will receive a credit for all electricity received by CPAU
at the buyback Rate designated in section C above.
{End}
Attachment B
NET METERING NET SURPLUS ELECTRICITY COMPENSATION
UTILITY RATE SCHEDULE E-NSE-1
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No. E-NSE-1 Sheet No. E-NSE-1
dated 07-01-20243 Effective 7-1-20254
A. APPLICABILITY:
This Rate Schedule applies to eligible residential and small commercial Net Energy Metering Election
A Customers who, at the end of an annual settlement period, as described in Rule 29, are Net Surplus
Customer-Generators of electricity who elect to receive monetary compensation as such preference is
indicated on the net surplus electricity election form. This Rate Schedule only applies to Customers
who participate in Net Energy Metering, and does not apply to Customers that take service under the
City’s Net Energy Metering Successor Rate, as each of these terms are defined in Rule and Regulation
2.
B.TERRITORY:
This rate schedule applies everywhere the City of Palo Alto provides Electric Service.
C. RATES:
Per kWh
Net Surplus Electricity Compensation rate $ 0.1273 0.1427
D. SPECIAL CONDITIONS
1.Net Surplus Electricity Compensation Rate eligibility shall be determined as specified in Rule 29.
Net surplus electricity, as specified in Rule 29, if applicable, will be multiplied by the above
compensation rate to determine the Customer’s annual net surplus electricity compensation stated
in dollars.
2. Additional terms, conditions and definitions govern Net Energy Metering Service and
Interconnection, as described in Rule 29.
{End}
Attachment B
Attachment C
Electric Utility Financial Details
Attachment C
Electric Utility Capital Improvement Program (CIP) Financial Details
Attachment D
6
8
5
9
APPENDIX A: ELECTRIC UTILITY RESERVES MANAGEMENT PRACTICES
Attachment D
6
8
5
9
e) For cash flow management and contingencies related to the Electric Utility’s Capital
Improvement Program (CIP), as described in Section 10 (CIP Reserve)
f) For rate stabilization, as described in Section 11 (Rate Stabilization Reserves)
g) For operating contingencies, as described in Section 12 (Operations Reserves)
h) For tracking revenues earned via the sale of Low Carbon Fuel Credits allocated by the
California Air Resources Board to the City, as well as expenses incurred, in accordance
with California’s Low Caron Fuel Standard program, as described in Section 15 (Low
Carbon Fuel Standard Reserve)
i) Any funds not included in the other reserves will be considered Unassigned Reserves
and shall be returned to ratepayers or assigned a specific purpose as described in
Section 13 (Unassigned Reserves).
Section 4. Reserves for Commitments
At the end of each fiscal year the Electric Supply Fund and Electric Distribution Fund Reserves
for Commitments will be set to an amount equal to the total remaining spending authority
for all contracts in force for the Electric Supply Fund and Electric Distribution Fund,
respectively, at that time.
Section 5. Reserves for Reappropriations
At the end of each fiscal year the Electric Supply Fund and Electric Distribution Fund Reserves
for Reappropriations will be set to an amount equal to the amount of all remaining capital
and non-capital budgets that will be reappropriated to the following fiscal year for each Fund
in accordance with Palo Alto Municipal Code Section 2.28.090.
Section 6. Electric Special Projects Reserve
The Electric Special Projects Reserve (ESP Reserve) will be managed in accordance with the
policies set forth in Resolution 9206 (Resolution of the Council of the City of Palo Alto
Approving Renaming the Calaveras Reserve to the Electric Special Project Reserve and
Adoption of Electric Special Project Reserve Guidelines). These policies are included from
Resolution 9206 as amended to refer to the reserves structure set forth in these Reserves
Management Practices:
a) The purpose of the ESP Reserve is to fund projects that benefit electric ratepayers;
b) The ESP Reserve funds must be used for projects of significant impact;
c) Projects proposed for funding must demonstrate a need and value to electric
ratepayers. The projects must have verifiable value and must not be speculative, or
high-risk in nature;
d) Projects proposed for funding must be substantial in size, requiring funding of at least
$1 million;
e) Set a goal to commit funds by the end of FY 2025;
f) Any uncommitted funds remaining at the end of FY 2030 will be transferred to the
Electric Supply Operations Reserve and the ESP Reserve will be closed;
Attachment D
6
8
5
9
Section 7. Hydroelectric Stabilization Reserve
after the
transfers described above shall be the basis for staff’s determination, with Council
approval, of whether to implement the Hydro Rate Adjuster (Electric Rate E-HRA) for
the following fiscal year.
Attachment D
6
8
5
9
Maximum Level Average annual (12 month)1 CIP budget, for
48 months of budgeted CIP expenses2
b) Changes in Reserves: At the end of each fiscal year staff will transfer from the Distribution
Operations Reserve to the CIP Reserve an amount equal to the amount of electric utility
unspent CIP budget at the end of the fiscal year reduced by the amount of any contractual
commitments and reappropriations. Any other additions to or withdrawals from the CIP
reserve require Council action.
c) Minimum Level:
i) If, at the end of any fiscal year, the minimum guideline is not met, staff shall present
a plan to the City Council to replenish the reserve. The plan shall be delivered by the
end of the following fiscal year, and shall, at a minimum, result in the reserve reaching
its minimum level by the end of the next fiscal year. For example, if the CIP Reserve is
below its minimum level at the end of FY 2017, staff must present a plan by June 30,
2018 to return the reserve to its minimum level by June 30, 2019. In addition, staff
may present, and the Council may adopt, an alternative plan that takes longer than
one year to replenish the reserve, or that does so in a shorter period of time.
d) Maximum Level: If there are funds in this reserve in excess of the maximum level staff
must propose in the next Financial Plan to transfer these funds to another reserve or
return them to ratepayers in the funds to ratepayers, or designate a specific use of funds
for CIP investments that will be made by the end of the next Financial Planning period.
Staff may also seek City Council to approve holding funds in this reserve in excess of the
maximum level if they are held for a specific future purpose related to the CIP.
Section 11. Rate Stabilization Reserves
Funds may be added to the Electric Supply or Distribution Fund’s Rate Stabilization Reserves
by action of the City Council and held to manage the trajectory of future year rate increases.
Withdrawal of funds from either Rate Stabilization Reserve requires action by the City
Council. If there are funds in either Rate Stabilization Reserve at the end of any fiscal year,
any subsequent Electric Utility Financial Plan must result in the withdrawal of all funds from
this Reserve by the end of the Financial Planning Period. The Council may approve exceptions
to this requirement, when proposed by staff to provide greater rate stabilization to
customers.
Section 12. Operations Reserves
The Electric Supply Fund and Electric Distribution Fund Operations Reserves are used to
manage normal variations in the costs of providing electric service and as a reserve for
contingencies. Any portion of the Electric Utility’s Fund Balance not included in the reserves
described in Section 4 to 11 above will be included in the appropriate Operations Reserve
unless the reserve has reached its maximum level as set forth in Section 12 (e) below. Staff
will manage the Operations Reserves according to the following practices:
Attachment D
6
8
5
9
a) The following guideline levels are set forth for the Electric Supply Fund Operations
Reserve. These guideline levels are calculated for each fiscal year of the Financial
Planning Period based on the levels of Operations and Maintenance (O&M) and
commodity expense forecasted for that year in the Financial Plan.
Minimum Level 60 days of Supply Fund O&M and commodity expense
Target Level 90 days of Supply Fund O&M and commodity expense
Maximum Level 120 days of Supply Fund O&M and commodity expense
b) The following guideline levels are set forth for the Electric Distribution Fund Operations
Reserve. These guideline levels are calculated for each fiscal year of the Financial
Planning Period based on the levels of O&M expense forecasted for that year in the
Financial Plan.
Minimum Level 60 days of Distribution Fund O&M expense
Target Level 90 days of Distribution Fund O&M expense
Maximum Level 120 days of Distribution Fund O&M expense
c) Minimum Level: If, at the end of any fiscal year, the funds remaining in the Supply Fund
or Distribution Fund’s Operations Reserve are lower than the minimum level set forth
above, staff shall present a plan to the City Council to replenish the reserve. The plan
shall be delivered within six months of the end of the fiscal year, and shall, at a
minimum, result in the reserve reaching its minimum level by the end of the following
fiscal year. For example, if the Operations Reserve is below its minimum level at the end
of FY 2014, staff must present a plan by December 31, 2014 to return the reserve to its
minimum level by June 30, 2015. In addition, staff may present an alternative plan that
takes longer than one year to replenish the reserve.
d) Target Level: If, at the end of any fiscal year, either Operations Reserve is higher or
lower than the target level, any Financial Plan created for the Electric Utility shall be
designed to return both Operations Reserves to their target levels by the end of the
forecast period.
e) Maximum Level: If, at any time, either Operations Reserve reaches its maximum level,
no funds may be added to this Reserve. Any further increase in that fund’s Fund
Balance shall be automatically included in the Unassigned Reserve described in Section
13, below.
Section 13. Unassigned Reserves
If the Operations Reserve in either the Electric Supply Fund or the Electric Distribution Fund
reaches its maximum level, any further additions to that fund’s Fund Balance will be held in
the Unassigned Reserve. If there are any funds in either Unassigned Reserve at the end of
any fiscal year, the next Financial Plan presented to the City Council must include a plan to
assign them to a specific purpose or return them to the Electric Utility ratepayers by the end
of the first fiscal year of the next Financial Planning Period. For example, if there were funds
in the Unassigned Reserves at the end of FY 2016, and the next Financial Planning Period is
FY 2017 through FY 2021, the Financial Plan shall include a plan to return or assign the funds
in the Unassigned Reserve by the end of FY 2017. Staff may present an alternative plan that
retains these funds or returns them over a longer period of time.
Section 14. Intra-Utility Transfers between Supply and Distribution Funds
Attachment D
6
8
5
9
Transfers between Electric Distribution Fund Reserves and Electric Supply Fund Reserves are
permitted if consistent with the purposes of the two reserves involved in the transfer. Such
transfers require action by the City Council.
Section 15. Low Carbon Fuel Standard (LCFS) Reserve
This reserve tracks revenues earned via the sale of Low Carbon Fuel Credits allocated by the
California Air Resources Board to the City, as well as expenses incurred, in accordance with
California’s Low Caron Fuel Standard program. At the end of each fiscal year, the LCFS
Reserve will be adjusted by the net of revenues and expenses associated with California’s
LCFS program.
Section 16. Cap and Trade Program Reserve
This reserve tracks unspent or unallocated revenues from the sale of carbon allowances freely
allocated by the California Air Resources Board to the electric utility, under the State’s Cap
and Trade Program. Funds in this Reserve are managed in accordance with the City’s Policy
on the Use of Freely Allocated Allowances under the State’s Cap and Trade Program (the
Policy), adopted by Council Resolution 9487 in January 2015. At the end of each fiscal year,
the Cap and Trade Program Reserve will be adjusted by the net of revenues and expenses
associated with the Cap and Trade program.
Section 17. Electrification Reserve
This reserve is used to track funding of City buildings, appliance and vehicle electrification
projects and programs, including development and implementation costs and associated
financial incentives, loans and rebates for participating customers. The reserve may be
funded by any lawful source of funds available for such programs, including new or ongoing
utility revenues derived from customer participation. The reserve balance shall be annually
adjusted based on the net of revenues and expenses associated with the City’s building
appliance and vehicle electrification projects and programs using this reserve.
Attachment E
COMMUNICATIONS PLAN AND OUT REACH EXAMPLES
The fiscal year (FY) 2026 electric utility communications strategy addresses the cost drivers for a rate
increase including the City’s significant investment in electric grid infrastructure, rising costs for
transmission access charges, increasing renewable energy portfolio standards, tightening resource
adequacy requirements, and financial reserve recovery. One of the larger capital improvement projects
in progress now is the electric grid modernization, which was developed to expand capacity and enhance
reliability for increased electric load. Thus the equity transfer to the General Fund has increased along
with the grid modernization asset value and will be reassessed as the utility issues debt.
Staff will inform customers of the need to recover funds to bring electric supply operations reserves
above the minimum guidelines following the reserve drawdowns during the pandemic, drought, and
high winter energy prices during 2022-2023. It is also important to educate customers about the cost to
buy and transport electricity to Palo Alto, and distribute it within Palo Alto. Critical components of CPAU’s
expenses include maintaining and replacing infrastructure, customer service, billing, and administration.
Long-term cost trends show supply and distribution costs increasing over time. Despite raising rates,
electric costs to customers still remain lower than the comparator regional investor-owned utility, PG&E.
City of Palo Alto Utilities (CPAU) communication methods include utilities webpages, utility bill inserts,
messaging on utility bills and MyCPAU online account management platform, email newsletters, print
and digital ads, social media, and business and neighborhood customer presentations. CPAU promotes
energy efficiency programs to help customers keep utility bill costs low even as market prices increase
or CPAU raises utility rates. Programs such as GoGreen Financing and advisor services for energy
efficiency and electrification offer residents assistance for home upgrades. CPAU provides free
consulting services and rebates for commercial energy efficiency upgrades and programs for electric
vehicle (EV) charging infrastructure to assist in the switch from fossil fueled transportation to clean,
electric driving. Throughout the year, CPAU hosts free educational workshops to help residents and
businesses better understand energy usage and learn ways to improve efficiency to keep utility costs
low. The MyCPAU online account management portal provides customers with direct access and more
information about utility account and consumption data.
CPAU customers benefit from local control and policy setting, and community values-driven programs
and services, including the decision to go carbon neutral in 2013. Palo Alto’s renewable energy purchase
agreements contribute to our utility’s long-term energy security and commitment to sustainability. The
City’s Sustainability and Climate Action Plan (S/CAP) focuses on electrification as a primary way to reduce
greenhouse gas emissions. CPAU recently launched several new rebate programs in partnership with the
State and other industry entities to offer rebates for customers to switch from natural gas appliances to
electric. CPAU will highlight these resources and reinforce how community-driven policies, such as for
beneficial electrification, factor into our utility rates, and reflect the value provided by CPAU as a
municipal utility.
Attachment E
MEMORANDUM
Unmetered Electric Service Rate Methodology
1
16701 NE 80th Street Suite 102 Redmond, WA 98052 425-889-2700 Fax 866-611-3791 www.gdsassociates.com
Georgia Texas Alabama New Hampshire Wisconsin Florida Maine Washington California
MEMORANDUM
TO Jim Fleming
FROM Amber Gschwend
DATE February 11, 2025
RE Unmetered Electric Service Rate Technical Memo
INTRODUCTION
This memo summarizes the methodology and assumptions used to develop rates for the City of Palo Alto’s
Unmetered Electric Service Rate Schedule (E-16). This schedule includes the following services:
1.Unmetered Electric Service
2.License Fee for Electric Conduit Use
3.License Fee for Utility Pole Attachments
4.License Fee for mounting communications equipment on utility poles (including antenna systems)
This memo provides the rate calculations for each of the above fees. The appendix contains a rate survey of
local utilities providing the same services.
UNMETERED ELECTRIC SERVICE
The current rate for Unmetered Electric service is $9/month plus estimated energy use billed at the E-2 energy
rate. The fixed charge is based only on the staffing cost to calculate bills for unmetered customers. At the
current rate for Program Assistant I, the staff who performs the annual billing, it requires on average two hours
to recalculate, invoice, and track each unmetered customer bill on an annual basis. At a current fully loaded
labor rate of $65.78/hour for a Program Assistant I,1 the annual cost is $131.55, or $10.96/month. This rate
should be updated when the City of Palo Alto Labor Agreements Salary Schedule is updated. The energy charges
are equal to E-2 rates.
POLE ATTACHMENT RATE
To provide electric service, CPAU owns 5,888 utility poles. Communication providers and PG&E have
attachments on CPAU’s poles and share the maintenance costs.
This memo describes the assumptions and methodologies used to calculate an appropriate pole
attachment rate for potential new attachments. The recommended pole attachment rates are based on
the AB1027 (2011) framework for calculating pole attachment rates, codified at Public Utilities Code (PUC)
section 9510 et seq.; with the goal that adopted pole attachment rates do not either subsidize or over-
charge communication providers. PUC section 9512(c) exempts poles that are under joint ownership
including Northern California Joint Pole Association. This memo applies to attachments that are not part
of the joint ownership agreement.
1 Labor rate of $43.85/hour plus 50% for benefits.
Attachment F
MEMORANDUM
Unmetered Electric Service Rate Methodology
2
Input Assumptions and Methodology
Assembly Bill 1027 2 allows utilities to recover the annual ownership cost of associated utility poles
including ongoing maintenance costs and annual capital costs (depreciation). Costs are based on a utility’s
current asset values and maintenance costs. The annual cost is calculated based on the attachment’s share
of the utility pole’s capacity. In addition to the annual fee, a one-time fee may also be charged for new
pole attachments.
Key inputs to the pole attachment rate are summarized in Table 1.
TABLE 1: POLE ATTACHMENT RATE METHODOLOGY
Usable Space Measured in feet, the space
available for attachments
• PUC 9512(a)(1) dictates 13.5 feet,
subject to factual rebuttal
Space Occupied by
Attachment
Measured in feet, space required for
each attachment
1 ft is standard
Usable Space Share Measured as a percentage equal to
the space occupied by the
•
13.5 feet of usable space
•
•
•
•
•
average age from CPAU pole database
• Useful life of a pole is 80 years based
on CPAU replacement schedule
• Estimated values as described later in
•
•
adjusted by 15% to remove value of
appurtenances used only for electric
•
• Based on FY2023 actual costs
Depreciation Annual cost of capital Annual depreciation expense is 1.3%
based on 80-year asset life
The net book value for poles is an important input for calculating the cost share for overhead
maintenance, depreciation, and administration cost adders. The net book value must be adjusted for
capital contributions. The City does not have a long-standing record for capital contributions for the
history of its current pole population. However, the current agreements indicate that pole costs are often
2Now part of the California Public Utilities Code (PUC) section 9510 et seq
Attachment F
MEMORANDUM
Unmetered Electric Service Rate Methodology
3
shared 50% between the City and communications providers. Therefore, it is conservatively assumed that
50% of the net book value for poles is contributed capital. This amount is removed from the bare cost of
the poles.
POLE ATTACHMENT RATE
Figure 1 illustrates the pole attachment rate methodology. Table 2 details the resulting pole attachment
rate using the methodology and inputs described. The resulting annual fee is $47.60/ attachment. CPAU
is planning for significant pole replacements in the next 5-10 years and should revisit this calculation with
updates, as the net book value of the poles is expected to increase over time with the capital expenses
planned.
FIGURE 1: POLE ATTACHMENT LEASE METHODOLOGY
Lease Rate
($/Attachment/Year)
Bare Pole
Net Book
Value
($/Pole)
Annual
Operating Costs
($/Pole)
Depreciation +
G&A +Annual
O&M
Annual
Operating Costs
($/Pole)
Net Book
Value
Ownership
($/Pole)
Ownership
($/Pole)
Usable Space
Factor
(%)
Attachment F
MEMORANDUM
Unmetered Electric Service Rate Methodology
4
TABLE 2: POLE ATTACHMENT RATE CALCULATION
Line Formula/Source
O & M Adder
1 Maintenance Expense FY2024 Prelim. Actual $3,690,146
2 Net Investment (Accumulated Depreciation) Line 8 - Line 9 $10,757,928
3 Line 1/Line 2
G & A Adder
4 Total General & Administrative Expense FY2023 Actual $6,090,703
5 Net Book Value (All Plant in Service) As of Ending FY2023 $215,968,770
6 Line 4/Line 5
Capital Cost Adder
7 Annual Depreciation Rate 1/80 years 1.3%
8 Capital Cost Original Cost $21,622,546
9 Net Book Value Original Cost less Depreciation $10,864,618
10 Line 8/Line 9 × Line 7
11 Net Book Value Line 9 $10,864,618
12 Number of Poles Pole Database 5,888
13 Net Cost of Bare Pole (Line 11/Line 12) × (1-15%) $1,568.43
14 Average Height of Pole (ft) From CPAU Pole Database 46
15 Space Occupied by Attachment Number of Feet Required 1
16 Usable Space (ft) PUC section 9510 et seq 13.5
17 Usable Space Share of Pole Height (%) Line 16/Line 14 29.3%
18 Net Cost of Bare Pole Line 13 $1,568.43
19 Carrying Cost Percentage Sum lines 3, 6, 10 39.6%
20 Annual Operation Cost per pole Line 18 × Line 19 $621.25
21 Cost of Ownership Line 18+ Line 20 $2,189.68
22 Cost of Ownership (Based on Usable Space) Line 17× Line 21 $642.62
23 Usable Space Factor (%) Line 15/ Line 16 7.4%
24 Line 22 × Line 23
In addition to the attachment fee, a processing fee is charged per pole to cover engineering and field review.
This processing fee is calculated based on the current labor rate of $152/hour and the hours required (1.0
hours). This hourly rate includes benefits and administrative overhead. The resulting fee is $152 per pole. This
Attachment F
MEMORANDUM
Unmetered Electric Service Rate Methodology
5
is the same charge from URS C-1 Utility Miscellaneous Charge. The rate schedule could reference URS C-1
rather than providing the rate in URS-16.
TABLE 3: POLE ATTACHMENT PROCESSING FEE
0.5 $152.00 $76.00
0.5 $152.00 $76.00
LICENSE FEE FOR SMALL CELL ATTACHMENTS
In 2018, the Federal Communications Commission (FCC) established new rules around small cell attachments
to utility poles. The order intended to make more available the deployment of 5G networks. Utilities may
recover the annual cost of service to small cell attachments as long as those costs are deemed reasonable. The
FCC further states that reasonable annual costs are typically limited to $270 per pole per year for small cell
attachments. The current annual fee for small cell attachments is set at the 2018 value of $270. The
recommended annual fee updates this value using the Consumer Price Index for All Urban Consumers in the
San Francisco-Oakland-Hayward area. The recommended updated license fee is $329.44 per year per pole.
CONDUIT LEASE RATE
The lease fee for electric conduit use is calculated much the same way as the pole attachment rate. The
conduit lease is for exclusive use only since conduit is not shared. The City tracks O&M costs for
underground conduit separately. Annual O&M costs are $300,000. General and administrative costs plus
depreciation expense is calculated at 4.9% of the net book value for conduit. These costs plus direct
conduit O&M costs total to produce an annual rate of $1.94/foot. Figure 2 illustrates the general
methodology while Table 4 provides the detailed calculations.
FIGURE 2: CONDUIT LEASE FEE METHODOLOGY
Conduit
Lease Rate,
($/ft/year)
Conduit Net
Book Value
($/ft)
Direct Annual
Operating
Costs
($/ft/year)
Adder for
Depreciation
and G&A
(%)
Attachment F
MEMORANDUM
Unmetered Electric Service Rate Methodology
6
TABLE 4: CONDUIT LEASE RATE CALCULATION
line Formula/Source
1 CPAU Records Feet of Conduit 575,264
2 Account 366 Fixed Assets Capital Cost $34,186,622
3 Net Book Account 366 Depreciation $17,403,632
4 Line 2 - Line 3 Net Book Value $16,782,990
5 Line 4 / Line 1 Net Book Value per Foot of Conduit, $/ft $29.17
6 CPAU Records Annual O&M Costs $300,000
7 Line 6 / Line 1
8 Actual FY23 Expenses Total General & Administrative Expense $6,090,703
9 Fixed Assets Net Book Value (All Plant in Service) $215,968,770
10 Line 8 / Line 9 Administrative Expense Adder 2.8%
11 1/100 years Annual Depreciation Rate 1.0%
12 (Line 2/Line 4) × Line 11 Depreciation Adder 2.0%
13 Line 10 + Line 12 Total Carrying Cost Adder 4.9%
14 Line 13 × Line 5
15 Line 7 + Line 14
Attachment F
MEMORANDUM
Unmetered Electric Service Rate Methodology
7
SUMMARY
Table 5 compares the current and recommended rates for Unmetered Utility Service:
TABLE 5: RECOMMENDED RATES
FY2026 Rate
1.Customer Charge, $/month $9.00 $10.96
2.Energy Charge, $/kWh Same as E-2 Same as E-2
1.Conduit License Fee, $/foot/year $1.94 $1.94
2.Processing Fee for Electric Conduit Usage Actual Cost Actual Cost
3.Pole Attachment License Fee, $/Foot/Year $29.511 $47.60
4.Processing Fee for Utility Pole Attachments, $/pole $55.00 $152.00
5.License Fee for mounting communication
equipment including distributed antenna systems
on utility poles, $/pole
1.The current rate includes a small incremental increase of $2.80/year for each additional foot of
leased space up to 4 feet.
The recommended unmetered service rate aligns closely with the FY2025 E-2 rate and excludes costs
related to meter reading since Utility Rate Schedule E-16 provides the process for determining energy
requirements based on equipment specifications. For pole attachments, it is recommended that CPAU
charge the same fee for each foot of usable space licensed for communications use. This recommendation
is consistent with PUC 9510(a)(1). The Appendix shows that the calculated pole attachment rate is higher
than the rates published by other utilities surveyed. The sampling of utilities for pole attachment rates is
difficult since many participate in the Northern California Joint Pole Association that manages standard
pole attachments for member agencies. Pole attachment rates in other states are commonly in the $30-
$40/attachment range. The rate level is mostly impacted by the net book value of the pole attachment
and the depreciation schedule.
Attachment F
MEMORANDUM
Unmetered Electric Service Rate Methodology
8
APPENDIX
TABLE 6: POLE ATTACHMENT RATE COMPARISON
$47.60
$18.50
$21.94
TABLE 7: SMALL CELL ATTACHMENT RATE COMPARISON
$329.44
$1,475 deposit
$94.08 increased 2.5% annually
$303.41 increased 3% annually
$270 increased 3% annually each
effective date
TABLE 8: UNMETERED SCHEDULE
$10.961
Summer (May 1-Oct 31) (E-2)$0.26485
Winter (Nov 1- Apr 30) (E-2)$0.17290
$15.75 $0.20113
$5.06
First 800 kWh $0.24377
Above 800 kWh $0.22130
$13.28 $0.15700
$20.75 $0.27180
1. Updates according to hourly rate of Program Assistant I at 2 hours per year.
https://www.cityofpaloalto.org/Departments/Human-Resources/Labor-
Agreements-and-Salary-Schedules
Attachment F
April 2, 2025 www.cityofpaloalto.org
FY 2026 Electric Rate Proposal
Utilities Advisory Commission
2
Proposal
•5.1% overall rate increase in FY 2026 (11% increase in distribution rates, combined with 1% increase in supply rates)
Drivers
•Significant investment in grid modernization funded by revenues and bond financing; first bond issuance in FY 2026
•Reserves recovering from 2020-2022 drawdown
•In current year, power supply costs lower than budget
•Longer-term transmission costs & renewable energy targets are rising and Resource Adequacy requirements are
tightening; Resource Adequacy costs are expected to increase while Resource Adequacy sales revenue declines
Compared with Preliminary Rates
•Cost increases including: new warehouse and laydown yard for grid modernization , replacement of emergency
generators, General Fund Transfer increase to reflect grid modernization asset value
•Reflects climate action budget
•Supply forecast update
Electric Rate Proposal
3
Electric Bill Comparisons
Note: PG&E Rates Effective March 1, 2025; Santa Clara Rates Effective January 1, 2025; Palo Alto Rates Effective July 1, 2024
**calculated using the "average" bundled total rates, and Climate Zone X, which includes most nearby comparison communities
*Includes the annual climate credit, and Climate Zone X, which includes most nearby comparison communities
4
Electric Cost and Revenue Projections
5
Electric Supply Operating Reserve Projections
Received $24M Overcharges Refund
6
Electric Distribution Operating Reserve Projections
Maintained rates with no
increases in FY2021 and FY2022,
and utilized the operating
reserve to cover expenses
7
Electric Bill Impact
8
Communication and Outreach
Key Messages
•Reasons for rate increases and benefits to customers
•Competitive rates to other utilities and neighboring cities
•What the City is doing to keep costs down
•City programs and services to help customers keep utility bill costs low
Outreach Strategies
•Public Meetings: UAC, Finance, City Council
•Digital Communication:website, social media,
email newsletters, City blog, videos
•Direct Mail: utility bill inserts,Proposition 218
notice,SFPUC rates postcard
•Local Media Engagement: articles, interviews
Sample utility bill insert
about energy efficiency
Replacing a utility pole as
part of the Electric Grid
Modernization Project
9
Electric Recommendation
U
1.Approving the Fiscal Year 2026 Electric Utility Financial Forecast shown in this staff report and
attachments; and
2.Approving the transfer at the end of FY 2025 of up to $5 million from the Electric Utility Supply Operations
Reserve to the Distribution Operations Reserve.
3.Amending Rate Schedules (Attachment B) effective July 1, 2025 (FY 2026): E -1 (Residential Electric Service),
E-2 (Residential Master-Metered and Small Non-Residential Electric Service), E -2-G (Residential Master-
Metered and Small Non-Residential Green Power Electric Service), E-4 (Medium Non-Residential Electric
Service), E-4-G (Medium Non-Residential Green Power Electric Service), E-4 TOU (Medium Non-Residential
Time of Use Electric Service), E-7 (Large Non-Residential Electric Service), E-7-G (Large Non-Residential
Green Power Electric Service), E -7 TOU (Large Non-Residential Time of Use Electric Service), E-14 (Street
Lights), E-16 (Unmetered Electric Service), E-EEC-1 (Export Electricity Compensation), and E-NSE-1 (Net
Metering Surplus Electricity Compensation)