Over the past year, more than 500 water customers in Palo Alto have called the city to complain about higher-than-expected water bills, a problem that may have been caused by a leaking toilet, a malfunctioning irrigation system or a billing error.

But if the leak occurs between a home and the water meter, the customer is out of luck. Under a policy that the city had adopted in 2006, the customer bears the sole responsibility to maintain their lines and equipment so that leaks don't occur. The policy also states that the City of Palo Alto Utilities (CPAU) "shall not make billing adjustments for Water, Gas or Wastewater charges resulting from leakage in a line on the Customer Premises beyond the CPAU Meter, unless CPAU determines that City staff were solely responsible for such leakage."

The policy has created consternation for some customers, who view the city's prohibition on credits as deeply punitive -- particularly in cases where it takes a resident a long time to detect slow leak and the bill ends up running higher than $1,000. On a recent message board, residents of the Crescent Park neighborhood alluded to horror stories about water bills, including ones for $1,500 and $7,000, with "no possibility of any adjustment from the city."

When a customer reached out to Utilities earlier this week to inquire about their own bill, the response from the Assistant Director Tom Auzenne reaffirmed the decade-long policy and the department's lack of regular "flexibility" to offer credits.

That, however, may soon change. On Wednesday night, the city's Utilities Advisory Commission will consider revising the policy to one that would allow for more leniency. This could mean going back to the pre-2006 policy, which prohibited billing credits "unless a determination has been made by CPAU that the customer had no control of such device(s) leaking." That policy also made exceptions for "force majeure" events, defined as occurrences that are "beyond the reasonable control of the utility Customer and, which by reasonable efforts, the Customer could not prevent."

"Such events include, but are not limited to, an Act of God, an irresistible, superhuman cause, fire, flood, earthquake, or any other similar cause."

But according to a new report from the Utilities Department, that policy was at times difficult to interpret and apply. Investigating and interpreting high-water consumption took "extensive time and expense," with staff being required to determine the "relative merits of each submission," establish precedents and effectively "prove to the customer that there was a leak for which they were responsible."

The 2006 rule, the report notes, "is designed to ensure fairness to all customers, such that some customers do not effectively subsidize leaks on other customers' properties.

"The City's bright line rule for water leaks is consistent with statewide water regulatory trends that put a premium on water conservation and are focused on eliminating water waste," the report states. "The rule is clear and facilitates consistent application by staff in a manner that has the potential to strengthen the City's position should the City become involved in litigation over costs or charges in the future."

On Wednesday, the commission will consider whether to maintain the policy, revert to the earlier one or take another approach. Some agencies, according to the report, take the hard stance; others handle requests for billing adjustments on a case-by-case basis or limit the allowed adjustment to either a maximum dollar amount of a percentage of the bill.

The meeting will begin 7 p.m. in the Community Meeting Room at City Hall, 250 Hamilton Ave.