By Braden Cartwright
Daily Post Staff Writer
The city of Palo Alto takes pride in charging less for power than PG&E, but that won’t be the case for bills that are arriving in the mail now.
For the month of January, Palo Alto customers were charged $4.87 per therm of natural gas, compared to $2.68 per therm for PG&E.
Mayor Lydia Kou wrote a letter on Feb. 7 to elected officials at the state and federal level asking them to investigate whether “market manipulation, anticompetitive behavior or other anomalous activities are driving these ongoing elevated prices.”
“It is clear that the root causes of these extraordinary prices warrant further examination,” she wrote.
January’s rates were a break from the norm, as the city had lower natural gas rates than the private utility throughout last year.
The city’s rates fluctuated between $1.20 and $1.88 per therm, while PG & E’s charged between $1.85 and $2.30 per therm, according to their rate schedules. These rates are for an aver age amount of natural gas. Prices go up when customers use over a certain threshold in a month.
The city sets its rate for customers at the end of each month based on an index by Natural Gas Intelligence, a subscription service that tracks prices on the West Coast.
Palo Alto’s prices fell back down to earth in February. The city’s customers will pay $2.10 per therm, while PG&E is charging $2.75 per therm.
High prices were driven by a lack of storage, insufficient pipelines and drought that has reduced water flows, lowering the amount of power from hydroelectric dams, according to Utilities Director Dean Batchelor.
As for electricity, the city raised rates by 20% for the average resident in December, but they are still paying less than PG&E.
PG&E charges between 29 and 51 cents per kilowatt-hour, depending on the time of day, the season and the rate schedule the customer chooses.
The city of Palo Alto charges residents between 14 and 25 cents per kilowatt-hour, depending on how much they use and how much power is being drawn from dams at the time.
Palo Alto council members Greg Tanaka and Pat Burt have had multiple arguments at council meetings about why Palo Alto’s utility rates are lower.
Tanaka says it’s disingenuous to celebrate lower rates because the city paid for its utility infrastructure 100 years ago, while Burt says the city deserves credit for making that prudent investment.