Palo Alto faces rising water costs amid regional supply changes

Palo Alto residents may soon face increased water costs as the city navigates significant changes to its regional water supply agreements. During the Utilities Advisory Commission meeting on June 4, 2025, officials discussed the implications of reduced water purchases from the San Francisco Public Utilities Commission (SFPUC) and the potential financial impact on local consumers.

The commission highlighted that as regional partners begin to decrease their water purchases, Palo Alto may experience higher costs for its Hetch Hetchy water supply. This shift raises concerns about the long-term affordability of water for residents, as the city must maintain its water system despite reduced revenue from water sales.

Commission members emphasized the need for a thorough understanding of these changes, questioning whether a sensitivity analysis has been conducted to assess the potential cost impacts over the next two decades. The discussion underscored the importance of balancing regional cooperation with the financial well-being of Palo Alto residents.

While the changes to the water supply agreement were characterized as not overly drastic, the commission acknowledged the uncertainty surrounding their effects. As the city prepares for these adjustments, residents are urged to stay informed about potential changes in water pricing and the broader implications for local water management.

Moving forward, the commission will continue to evaluate the situation and seek clarity from SFPUC to ensure that Palo Alto can effectively serve its community while adapting to the evolving regional water landscape.