HomeMy WebLinkAboutStaff Report 2409-3441CITY OF PALO ALTO
CITY COUNCIL
Special Meeting
Monday, October 07, 2024
Council Chambers & Hybrid
5:30 PM
Agenda Item
8.Adopt a Resolution Amending Rate Schedules G-1 (Residential Gas Service), G-2
(Residential Master-Metered and Commercial Gas Service), G-3 (Large Commercial Gas
Service), and G-10 (Compressed Natural Gas Service) to Raise the Upper Limit on the
Monthly Transportation Charge; CEQA Status: Exempt Under Public Resources Code
15273(a)
City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: October 7, 2024
Report #:2409-3441
TITLE
Adopt a Resolution Amending Rate Schedules G-1 (Residential Gas Service), G-2 (Residential
Master-Metered and Commercial Gas Service), G-3 (Large Commercial Gas Service), and G-10
(Compressed Natural Gas Service) to Raise the Upper Limit on the Monthly Transportation
Charge; CEQA Status: Exempt Under Public Resources Code 15273(a)
RECOMMENDATION
Staff recommends City Council adopt a resolution amending Rate Schedules G-1 (Residential
Gas Service), G-2 (Residential Master-Metered and Commercial Gas Service), G-3 (Large
Commercial Gas Service), and G-10 (Compressed Natural Gas Service) to raise the upper limit
on the monthly Transportation Charge from $0.25 per therm to $0.30 per therm effective
November 1, 2024.
EXECUTIVE SUMMARY
One component of the City’s natural gas rates is the Transportation Charge. This charge is a pass-
through of the City’s cost to transport natural gas across Pacific Gas & Electric Company’s (PG&E)
pipelines. PG&E’s rates have increased and are projected to increase further; therefore, staff
recommends increasing the upper limit on the Transportation Charge on all of the City’s gas rate
schedules from $0.25 per therm to $0.30 per therm effective November 1, 2024.
BACKGROUND
Natural gas purchased by the City for its customers is brought to Palo Alto via PG&E’s
transportation pipelines. The rate the City pays for those transportation services is based on
PG&E’s Gas Transportation Service to Wholesale/Resale Customers (G-WSL) tariff. This
schedule applies to Palo Alto and other cities and agencies that procure natural gas for resale.
PG&E’s rates are under the purview of the California Public Utilities Commission (CPUC). Staff
receives minimal notice as to when transportation rate changes will take effect or what the
final rate will be.
In October 2016, to address timing uncertainties and avoid potential discrepancies in fund
collection for transportation charges, City Council adopted a Resolution 96291 stipulating that
the City’s Gas Transportation Charge should be: 1) itemized separately on gas rate schedules
and customer bills; and 2) adjusted to reflect PG&E’s G-WSL rate.
In June 2022, Council adopted Resolution 100502 increasing the upper limit on the
Transportation Charge from $0.15 per therm to $0.25 per therm due to increasing PG&E costs
related to improving storage facilities, decommissioning older facilities, wildfire mitigation, and
greenhouse gas mitigation costs.
ANALYSIS
In September 2024, PG&E’s Gas Transportation Rate listed for Palo Alto on PG&E’s G-WSL tariff
increased to $0.27 per therm. PG&E’s Gas Transportation Rate for Palo Alto was $0.22 per therm
for the six prior months. Increases in PG&E’s transportation costs continue to be related to
improving storage facilities, decommissioning older facilities, wildfire mitigation, and
greenhouse gas mitigation costs. It is expected based on staff’s analysis that the rate will
increase approximately 5% annually over the next five years. In order to pass through the entire
gas-related supply costs, staff recommends increasing the upper limit on the Transportation
Rate on the City’s gas rate schedules from $0.25 per therm to $0.30 per therm effective
November 1, 2024.
FISCAL/RESOURCE IMPACT
The maximum Transportation charge is currently $0.25 per therm, and PG&E’s G-WSL rate is
$0.27 per therm. The under collected revenue amount for the months of September and
October 2024 is estimated to be about $60,000 which can be temporarily absorbed by gas
utility reserves. If Council approves the recommended resolution, transportation costs will be
fully recovered via the pass-through rate effective November 1, 2024.
STAKEHOLDER ENGAGEMENT
If the proposed resolution is adopted by Council, the Rate Schedules reflecting the adjusted
Transportation Charge range will be updated accordingly on the City’s website.
ENVIRONMENTAL REVIEW
The Council finds that setting a higher limit on the Transportation Charge on the City’s gas rates
schedules to meet operating expenses is not subject to the California Environmental Quality Act
(CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of the
1 Resolution 9629 https://www.cityofpaloalto.org/files/assets/public/v/1/city-clerk/resolutions/reso-9629.pdf
2 Resolution 10050 https://www.cityofpaloalto.org/files/assets/public/v/1/city-clerk/resolutions/resolutions-
1909-to-present/2022/reso-10050.pdf
California Code of Regulations 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.
ATTACHMENTS:
Attachment A: Resolution
Exhibit A: G-1 Effective 2024-11-01
Exhibit B: G-2 Effective 2024-11-01
Exhibit C: G-3 Effective 2024-11-01
Exhibit D: G-10 Effective 2024-11-01
APPROVED BY:
Dean Batchelor, Director of Utilities
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Resolution No.
Resolution of the Council of the City of Palo Alto Amending Rate
Schedules G-1 (Residential Gas Service), G-2 (Residential Master-
Metered and Commercial Gas Service), G-3 (Large Commercial Gas
Service), and G-10 (Compressed Natural Gas Service) Effective
November 1, 2024
R E C I T A L S
A. The City’s transportation costs for gas are based on the current Pacific
Gas and Electric Company’s (PG&E’s) G-WSL rate for Palo Alto.
B. In October 2016, due to the variability in PG&E’s Gas Transportation
Service to Wholesale/Resale Customers (G-WSL) tariff, which is largely dependent on
the California Public Utilities Commission, the City Council adopted a resolution to
identify the Transportation Charge as a separate, pass-through component of the City’s
rates so that these transportation costs can be fully and timely recovered.
C. In June 2022, Council adopted a resolution raising the upper limit on
the Transportation Charge from $0.15 per therm to $0.25 per therm due to increasing
PG&E costs related to improving storage facilities, decommissioning older facilities,
wildfire mitigation, and greenhouse gas mitigation costs
D. In September 2024, PG&E’s G-WSL tariff increased to $0.27 per therm,
and due to an estimated average increase of 5% annually over the next 5 years, the
City is raising the upper limit on the Transportation Rate on the City’s gas rate
schedules from $0.25 per therm to $0.30 per therm effective November 1, 2024.
E. 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.
The Council of the City of Palo Alto does hereby RESOLVE as follows:
SECTION 1. The Council hereby approves raising the upper limit on the
Transportation Rate on the City’s gas schedules from $0.25 per therm to $0.30 per therm
effective November 1, 2024.
SECTION 2. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule G-1 (Residential Gas Service) is hereby amended to read as attached and
incorporated to this Resolution as Exhibit A. Utility Rate Schedule G-1, as amended, shall
become effective November 1, 2024.
SECTION 3. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule G-2 (Residential Master-Metered and Commercial Gas Service) is hereby
amended to read as attached and incorporated to this Resolution as Exhibit B. Utility Rate
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Schedule G-2, as amended, shall become effective November 1, 2024.
SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code,
Utility Rate Schedule G-3 (Large Commercial Gas Service) is hereby amended to read as
attached and incorporated to this Resolution as Exhibit C. Utility Rate Schedule G-3, as
amended, shall become effective November 1, 2024.
SECTION 5. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule G-10 (Compressed Natural Gas Service Service) is hereby amended to read as
attached and incorporated to this Resolution as Exhibit D. Utility Rate Schedule G-10, as
amended, shall become effective November 1, 2024.
SECTION 6. The City Council finds as follows:
a.Revenues derived from the gas rates approved by this resolution do not exceed
the funds required to provide gas service.
b.Revenues derived from the gas rates approved by this resolution shall not be
used for any purpose other than providing gas service, and the purposes set
forth in Article VII, Section 2, of the Charter of the City of Palo Alto.
B.
SECTION 7. 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.
SECTION 8. The Council finds that adoption of this resolution raising the upper
limit on the Transportation Rate component on the City’s gas rate schedules is not subject
to the California Environmental Quality Act’s (CEQA) under Public California Public
Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations 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:
City Clerk Mayor
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APPROVED AS TO FORM: APPROVED:
Assistant City Attorney City Manager
Director of Utilities
Director of Administrative Services
Exhibit A
RESIDENTIAL GAS SERVICE
UTILITY RATE SCHEDULE G-1
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No G-1-1 Sheet No G-1-1
dated 711-1-20243 Effective 117-1-2024
5
0
0
7
A. APPLICABILITY:
This schedule applies to the following Customers receiving Gas Service from City of Palo Alto
Utilities:
1. Separately-metered single-family residential Customers;
2. Separately-metered multi-family residential Customers in multi-family residential
facilities.
B. TERRITORY:
This schedule applies anywhere the City of Palo Alto provides Gas Service.
C. UNBUNDLED RATES: Per Service
Monthly Service Charge:......................................................................................................$ 16.93
Tier 1 Rates: Per Therm
Supply Charges:
1. Commodity (Monthly Market Based).......................................... $0.10-$4.00
2. Cap and Trade Compliance Charge ............................................ $0.00-$0.25
3. Transportation Charge.................................................................$0.00-$0.2530
4. Carbon Offset Charge.................................................................. $0.00-$0.10
Distribution Charge:....................................................................................... $ 0.8229
Tier 2 Rates: (All usage over 100% of Tier 1)
Supply Charges:
1. Commodity (Monthly Market Based).......................................... $0.10-$4.00
2. Cap and Trade Compliance Charge............................................. $0.00-$0.25
3. Transportation Charge.................................................................$0.00-$0.2530
4. Carbon Offset Charge.................................................................. $0.00-$0.10
Distribution Charge:............................................................................................. $ 2.1043
Exhibit A
RESIDENTIAL GAS SERVICE
UTILITY RATE SCHEDULE G-1
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No G-1-2 Sheet No G-1-2
dated 711-1-20243 Effective 117-1-2024
5
0
0
7
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.
The Commodity Charge is based on the monthly natural gas Bidweek Price Index for
delivery at PG&E Citygate, adjusted to account for delivery losses to the Customer’s
Meter. The Commodity Charge also includes adjustments to account for Council-
approved programs implemented to reduce the cost of Gas, including a municipal
purchase discount1 and $0.055 per therm for mitigating the impact of short-term natural
gas market price spikes2.
The Cap and Trade Compliance Charge reflects the City’s cost of regulatory compliance
with the state’s Cap and Trade Program, including the cost of acquiring compliance
instruments sufficient to cover the City’s Gas Utility’s compliance obligations. The Cap
and Trade Compliance Charge will change in response to changing market conditions,
retail sales volumes and the quantity of allowances required.
The Carbon Offset Charge reflects the City’s cost to purchase offsets for greenhouse
gases produced when Gas is burned. The Carbon Offset Charge will change in response
to changing market conditions, changing sales volumes and the quantity of offsets
purchased within the Council-approved per therm cap.
The Transportation Charge is based on the current PG&E G-WSL (Gas Transportation
Service to Wholesale/Retail Customers) rate for Palo Alto, accounting for delivery losses
to the Customer’s Meter.
The Commodity, Cap and Trade Compliance, Carbon Offset and Transportation Charges
1 Adopted via Resolution 9451, on September 15, 2014.
2 Adopted via Resolution 10187 on August 19, 2024.
Exhibit A
RESIDENTIAL GAS SERVICE
UTILITY RATE SCHEDULE G-1
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No G-1-3 Sheet No G-1-3
dated 711-1-20243 Effective 117-1-2024
5
0
0
7
will fall within the minimum/maximum ranges set forth in Section C. Current and historic
per therm rates for the Commodity, Cap and Trade Compliance, Carbon Offset and
Transportation Charges are posted on the City Utilities website.3
2. Seasonal Rate Changes:
The Summer period is effective April 1 to October 31 and the Winter period is effective
from November 1 to March 31. 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 for each period. For further
discussion of bill calculation and proration, refer to Rule and Regulation 11.
3. Calculation of Usage Tiers
Tier 1 natural gas usage shall be calculated and billed based upon a level of 0.667 therms
per day during the Summer period and 2.0 therms per day during the Winter period,
rounded to the nearest whole therm, based on meter reading days of service. As an
example, for a 30 day bill, the Tier 1 level would be 20 therms during the Summer period
and 60 therms during the Winter period months. For further discussion of bill calculation
and proration, refer to Rule and Regulation 11.
{End}
3 Monthly gas and commodity and volumetric rates are available here, or by visiting
https://www.cityofpaloalto.org/files/assets/public/utilities/rates-schedules-for-utilities/residential-utility-rates/monthly-gas-
volumetric-and-service-charges-residential.pdf
Exhibit B
RESIDENTIAL MASTER-METERED AND COMMERCIAL GAS SERVICE
UTILITY RATE SCHEDULE G-2
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No G-2-1 Effective 117-1-2024
dated 711-1-20243 Sheet No G-2-1
5
0
0
8
A. APPLICABILITY:
This schedule applies to the following Customers receiving Gas Service from the City of Palo
Alto Utilities:
1. Commercial Customers who use less than 250,000 therms per year at one site;
2. Master-metered residential Customers in multi-family residential facilities.
B. TERRITORY:
This schedule applies anywhere the City of Palo Alto provides Gas Service.
C. UNBUNDLED RATES: Per Service
Monthly Service Charge:....................................................................................................$ 156.90
Per Therm
Supply Charges:
1. Commodity (Monthly Market Based) ......................................... $0.10-$4.00
2. Cap and Trade Compliance Charges ........................................... $0.00-$0.25
3. Transportation Charge.................................................................$0.00-$0.2530
4. Carbon Offset Charge.................................................................. $0.00-$0.10
Distribution Charge: .................................................................................................. $1.0809
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.
The Commodity Charge is based on the monthly natural gas Bidweek Price Index for
delivery at PG&E Citygate, adjusted to account for delivery losses to the Customer’s
Meter. The Commodity Charge also includes adjustments to account for Council-
approved programs implemented to reduce the cost of Gas, including a municipal
purchase discount1 and $0.055 per therm for mitigating the impact of short-term natural
1 Adopted via Resolution 9451, on September 15, 2014.
Exhibit B
RESIDENTIAL MASTER-METERED AND COMMERCIAL GAS SERVICE
UTILITY RATE SCHEDULE G-2
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No G-2-2 Effective 117-1-2024
dated 711-1-20243 Sheet No G-2-2
5
0
0
8
gas market price spikes2.
The Cap and Trade Compliance Charge reflects the City’s cost of regulatory compliance
with the state’s Cap and Trade Program, including the cost of acquiring compliance
instruments sufficient to cover the City’s Gas Utility’s compliance obligations. The Cap
and Trade Compliance Charge will change in response to changing market conditions,
retail sales volumes and the quantity of allowances required.
The Carbon Offset Charge reflects the City’s cost to purchase offsets for greenhouse
gases produced when Gas is burned. The Carbon Offset Charge will change in response
to changing market conditions, changing sales volumes and the quantity of offsets
purchased within the Council-approved per therm cap.
The Transportation Charge is based on the current PG&E G-WSL (Gas Transportation
Service to Wholesale/Retail Customers) rate for Palo Alto, accounting for delivery losses
to the Customer’s Meter.
The Commodity, Cap and Trade Compliance, Carbon Offset and Transportation Charges
will fall within the minimum/maximum ranges set forth in Section C. Current and historic
per therm rates for the Commodity, Cap and Trade Compliance, Carbon Offset and
Transportation Charges are posted on the City Utilities website.3
{End}
2 Adopted via Resolution 10187 on August 19, 2024.
3 Monthly gas and commodity and volumetric rates are available here, or by visiting
https://www.cityofpaloalto.org/files/assets/public/utilities/business/business-rates/monthly-gas-volumetric-and-service-
charges-commercial.pdf
Exhibit C
LARGE COMMERCIAL GAS SERVICE
UTILITY RATE SCHEDULE G-3
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No G-3-1 Effective 117-1-2024
dated 711-1-20243 Sheet No G-3-1
5
0
0
9
A. APPLICABILITY:
This schedule applies to the following Customers receiving Gas Service from the City of Palo Alto
Utilities:
1. Commercial Customers who use at least 250,000 therms per year at one site;
2. Customers at City-owned generation facilities.
B. TERRITORY:
This schedule applies anywhere the City of Palo Alto provides Gas Service.
C. UNBUNDLED RATES:Per Service
Monthly Service Charge: $ 717.89
Per Therm
Supply Charges:
1. Commodity (Monthly Market Based)....................................................$0.10-$4.00
2. Cap and Trade Compliance Charges .....................................................$0.00-$0.25
3. Transportation Charge..........................................................................$0.00-
$0.2530
4. Carbon Offset Charge........................................................................... $0.00-$0.10
Distribution Charge: ............................................................................................................$ 1.0702
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.
The Commodity Charge is based on the monthly natural gas Bidweek Price Index for
delivery at PG&E Citygate, adjusted to account for delivery losses to the Customer’s
Exhibit C
LARGE COMMERCIAL GAS SERVICE
UTILITY RATE SCHEDULE G-3
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No G-3-2 Effective 117-1-2024
dated 711-1-20243 Sheet No G-3-2
5
0
0
9
Meter. The Commodity Charge also includes adjustments to account for Council-
approved programs implemented to reduce the cost of Gas, including a municipal
purchase discount1 and $0.055 per therm for mitigating the impact of short-term natural
gas market price spikes2.
The Cap and Trade Compliance Charge reflects the City’s cost of regulatory compliance
with the state’s Cap and Trade Program, including the cost of acquiring compliance
instruments sufficient to cover the City’s Gas Utility’s compliance obligations. The Cap
and Trade Compliance Charge will change in response to changing market conditions,
retail sales volumes and the quantity of allowances required.
The Carbon Offset Charge reflects the City’s cost to purchase offsets for greenhouse gases
produced when Gas is burned. The Carbon Offset Charge will change in response to
changing market conditions, changing sales volumes and the quantity of offsets purchased
within the Council-approved per therm cap.
The Transportation Charge is based on the current PG&E G-WSL (Gas Transportation
Service to Wholesale/Retail Customers) rate for Palo Alto, accounting for delivery losses
to the Customer’s Meter.
The Commodity, Cap and Trade Compliance, Carbon Offset and Transportation Charges
will fall within the minimum/maximum ranges set forth in Section C. Current and historic
per therm rates for the Commodity, Cap and Trade Compliance, Carbon Offset and
Transportation Charges are posted on the City Utilities website.3
2. Request for Service
A qualifying Customer may request service under this schedule for more than one account
or meter if the accounts are located on one site. A site consists of one or more contiguous
parcels of land with no intervening public right-of- ways (e.g. streets).
3. Changing Rate Schedules
Customers may request a rate schedule change at any time to any applicable City of Palo
1 Adopted via Resolution 9451, on September 15, 2014.
2 Adopted via Resolution 10187 on August 19, 2024.
3 Monthly gas and commodity and volumetric rates are available here, or by visiting
https://www.cityofpaloalto.org/files/assets/public/utilities/business/business-rates/monthly-gas-volumetric-and-service-
charges-commercial.pdf
Exhibit C
LARGE COMMERCIAL GAS SERVICE
UTILITY RATE SCHEDULE G-3
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No G-3-3 Effective 117-1-2024
dated 711-1-20243 Sheet No G-3-3
5
0
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Alto full-service rate schedule.
{End}
Exhibit D
COMPRESSED NATURAL GAS SERVICE
UTILITY RATE SCHEDULE G-10
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No G-10-1 Effective 117-1-2024
dated 711-1-20243 Sheet No. G-10-1
5
0
1
0
A. APPLICABILITY:
This schedule applies to the sale of Gas to the City-owned compressed natural gas (CNG) fueling
station at the Municipal Service Center in Palo Alto.
B. TERRITORY:
Applies to the City’s CNG fueling station located at the Municipal Service Center in City of Palo Alto.
C. UNBUNDLED RATES:Per Service
Monthly Service Charge:.....................................................................................................$ 106.11
Per Therm
Supply Charges:
Commodity (Monthly Market Based)................................................................$0.10-$4.00
Cap and Trade Compliance Charges..................................................................$0.00-$0.25
Transportation Charge....................................................................................$0.00-$0.2530
Carbon Offset Charge.........................................................................................$0.00-$0.10
Distribution Charge..............................................................................................................$ 0.0175
D. SPECIAL CONDITIONS
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.
The Commodity Charge is based on the monthly natural gas Bidweek Price Index for delivery at
PG&E Citygate, adjusted to account for delivery losses to the Customer’s Meter. The
Commodity Charge also includes adjustments to account for Council-approved programs
implemented to reduce the cost of Gas, including a municipal purchase discount1 and $0.055 per
1 Adopted via Resolution 9451, on September 15, 2014.
Exhibit D
COMPRESSED NATURAL GAS SERVICE
UTILITY RATE SCHEDULE G-10
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No G-10-2 Effective 117-1-2024
dated 711-1-20243 Sheet No. G-10-2
5
0
1
0
therm for mitigating the impact of short-term natural gas market price spikes2.
The Cap and Trade Compliance Charge reflects the City’s cost of regulatory compliance with the
state’s Cap and Trade Program, including the cost of acquiring compliance instruments sufficient
to cover the City’s Gas Utility’s compliance obligations. The Cap and Trade Compliance Charge
will change in response to changing market conditions, retail sales volumes and the quantity of
allowances required.
The Carbon Offset Charge reflects the City’s cost to purchase offsets for greenhouse gases
produced when Gas is burned. The Carbon Offset Charge will change in response to changing
market conditions, changing sales volumes and the quantity of offsets purchased within the
Council-approved per therm cap.
The Transportation Charge is based on the current PG&E G-WSL (Gas Transportation Service to
Wholesale/Retail Customers) rate for Palo Alto, accounting for delivery losses to the Customer’s
Meter.
The Commodity, Cap and Trade Compliance, Carbon Offset and Transportation Charges will fall
within the minimum/maximum range set forth in Section C. Current and historic per therm rates
for the Commodity, Cap and Trade Compliance, Carbon Offset and Transportation Charges are
posted on the City Utilities website.3
{End}
2 Adopted via Resolution 10187 on August 19, 2024.
3 Monthly gas and commodity and volumetric rates are available here, or by visiting
https://www.cityofpaloalto.org/files/assets/public/utilities/business/business-rates/monthly-gas-volumetric-and-service-
charges-commercial.pdf