Palo Alto, City of

California

RFC recently completed a water cost of service and rate study for the City of Palo Alto (City). The goal of the study was to develop conservation-oriented rates consistent with cost of service to recover adequate revenues to pay for necessary capital improvements, meet debt service coverage requirements, and maintain sufficient reserve requirements. RFC conducted the study with input from the Utilities Advisory Commission made up of City residents. The study included a comprehensive review of the City’s revenue requirements and allocation methodology, review of the City’s user classification, usage patterns, a cost of service analysis, and rate design for City users. The study also included a review of the peaking characteristics of different customer classes, an analysis of the master-metered MFR customers, and a review of separate charges for higher elevations customers.