Pasadena Considers Electric Rate Increases to Fund Carbon-Free Energy Plan

City officials will discuss electric rate increases Tuesday as Pasadena Water and Power moves toward its goal of carbon-free electricity by 2030.

The Municipal Services Committee will review an Electric Rate Study by PWP that shows different energy scenarios could push systemwide rates from 33 cents to 42 cents per kilowatt-hour by 2031.

The study examines four options for meeting the city’s clean energy mandate under Resolution 9977, according to a PWP report. All scenarios would keep the Glenarm Power Plant as backup power.

The report said two scenarios focus on hourly matching of clean energy with consumption. Two others use annual matching methods.

The most expensive option peaks at 42 cents per kilowatt-hour in 2031. The cheapest scenario reaches 33 cents by 2033.

Current revenue requirements total $306 million in fiscal year 2026. That could rise to between $340 million and $434 million by 2031, depending on which path the city chooses.

The study includes accelerated development of local solar and battery storage within Pasadena’s service territory. Some options add demand response programs and flexible electric vehicle charging.

PWP will implement public engagement efforts segmented by customer profiles. The approach aims to enhance transparency and build trust in the rate-setting process.

The financial model assumes no new debt issuance and rate changes only when cash reserves drop below acceptable levels. Staff said the utility can use debt financing and rate smoothing to stabilize increases.

The study aligns with the city’s Optimized Strategic Plan, which outlines paths to 100% carbon-free electricity by 2030.

In May, the City Council directed PWP to complete four options that allow limited operation of the Glenarm Power Plant while ensuring reliable electricity and affordable rates.

PWP said it will return to the committee with solar and storage options for consideration. Final rate recommendations will cover the next two to three years.

The Municipal Services Committee meeting begins at 4 p.m. Tuesday in the City Council Chamber at City Hall.