City Committee Calls for Two-Year Study on Electric Rate Increase

The Municipal Services Committee approved a recommendation for a two-year study on electric rate increases as Pasadena Water and Power (PWP) moves toward carbon-free electricity by 2030.

“We know that we need to do more towards green energy, solar projects, and battery projects,” said PWP General Manager David Reyes. “How fast we go and how much we invest will dictate our progress and impact rates.”

Committee Chair Justin Jones highlighted the significance of the study: “We’re at a pivotal moment to modernize our systems and meet clean energy goals. The Municipal Services Committee unanimously guided PWP to develop a two-year plan based on a 35 KWH rate. This approach provides an off-ramp in 2028 to pause, assess, and make adjustments if needed.”

The current Electric Rate Study shows potential systemwide rates could range from 33 cents to 42 cents per kilowatt-hour by 2031. The study examines four options for meeting the city’s clean energy mandate, with all scenarios maintaining the Glenarm Power Plant as backup power.

Two scenarios focus on hourly matching of clean energy with consumption, while two others use annual matching methods. The most expensive option peaks at 42 cents per kilowatt-hour in 2031, with the cheapest scenario reaching 33 cents by 2033.

Current revenue requirements total $306 million in Fiscal Year 2026, potentially rising to between $340 million and $434 million by 2031, depending on the chosen path.

The study includes accelerated development of local solar and battery storage, with options for demand response programs and flexible electric vehicle charging. PWP plans to implement public engagement efforts 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. The approach aligns with the city’s Optimized Strategic Plan to achieve 100% carbon-free electricity by 2030.

In May, the City Council directed PWP to develop options that allow limited operation of the Glenarm Power Plant while ensuring reliable and affordable electricity. PWP will return to the committee with solar and storage options, with final rate recommendations covering the next two to three years.