Pasadena Water and Power (PWP) will increase electricity rates to compensate for higher-than-average prices of natural gas beginning March 1.
“As of March 1st, we’re looking to implement a 2.5¢/kWh [increase] of the Power Cost Adjustment (PCA),” Jeremy Marquette, acting assistant general manager of finance and administration for PWP said during the meeting of Municipal Services Committee (MSC) on Tuesday, Feb. 28. “To our average residential customer that is about a 12.1 percent increase and about $14 a month on their bill.”
The Power Cost Adjustment is a mechanism that allows the PWP to regularly adjust the price of electricity to reflect fluctuations in the cost of fuel, or purchased power used to supply electricity.
The rate ordinance dictates that PWP is responsible for monitoring the PCA monthly and making increases and decreases depending on market conditions.
According to Marquette, several factors, including the El Paso Pipeline Rupture as well as other macroeconomic factors drove the price of natural gas up.
“This is a localized issue — in California — but in my time and industry, going back 30 years, it has never been imagined to be this high, I’ve never seen it this high,” PWP General Manager Sidney Jackson said, referring to gas prices increase.
“It’s definitely been unprecedented, these prices as many of you know from paying your natural gas bills,” Marquette for his part said. “In the past we haven’t had the need to make adjustments because we’ve utilized our reserves and the market conditions have not been as severe.”
According to PWP’s report to the MSC, while regional natural gas prices are typically near $4/MMBtu (Metric Million British Thermal Unit) during the month of December 2022 prices climbed above $30/MMBtu and continue to remain volatile.
“Although the increase in our customers’ cost of electricity will not spike in the same high proportion as that reflected in natural gas bills, it is important that we work to make our PWP electric customers aware of the upcoming billing increase,” PWP’s report stated. “To responsibly manage periodic spikes in energy costs, PWP must dynamically adjust the energy rate to reflect market conditions.”
According to Marquette, PWP’s recommended PCA increase is still “small” compared to some of Pasadena’s neighboring utilities which also have PCAs in place.
“One neighboring utility actually asked for an increase by double for six months of what we’re recommending,” Marquette said without mentioning the utility.
During the meeting, members of the Municipal Services Committee including Councilmember Tyron Hampton and Justin Jones urged the City to look for ways to help families in need pay their electric bills amid the impending power rate increase.
“This $160-180 a year means I’m not going to get eggs or I’m not going to get bread or I’m going to have to cut somewhere else,” Hampton remarked. “I think it’s time that we increase what we see is low income.”
Vice Mayor Felicia Williams also called for future discussion on the current measures in place that aim to help low income families pay electric bills and make adjustments if need be.
For customers who need assistance in paying their utility bills, PWP provides ongoing utility bill support programs to income-qualified customers through the EUAP (Electric Utility Assistance Program), CARES, CARES+ and LIHEAP (Low Income Home Energy Assistance Program) and LIHWAP (Low Income Household Water Assistance Program).
More information on these programs can be found at PWPweb.com/BillAssistance.
Additionally, residential electric customers are encouraged to participate in energy efficiency programs including the Home Improvement Program, which provides an expert in-home evaluation and personalized installations to help households save water and power. Qualifying commercial electric customers can participate in the Water and Energy Direct Install Program (WeDIP) to receive up to $7,500 water and energy saving equipment at no cost. More information about all PWP commercial customer incentive programs is available at PWPweb.com/Business.
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