The City Council’s Municipal Services Committee on Tuesday moved forward a proposal to raise electric rates about 22% in phases over the next year.
The vote sets the stage for a public hearing of the City Council as Pasadena Water and Power seeks additional revenue for infrastructure, technology upgrades and long-term utility needs.
Under the proposal, electric rates would increase in three steps — beginning in March 2026, followed by additional adjustments in October 2026 and March 2027 — with each phase structured around roughly 7% systemwide increases.
“The total system increases as well as the increases per rate are 7% in March 2026 or as soon as practical thereafter,” said David Reyes. “October 2026 and then March 2027 will help us get to our revenue requirements in a three-phase approach.”
According to Reyes, each customer impact will be slightly different because it’s dependent on consumption.
A bill estimator will be available to customers, and PWP will reach out to the public if the City Council approves the rate increase.
The process was delayed earlier to allow for additional legal review and policy revisions.
Utility officials said the revised rate strategy is designed to generate sufficient revenue while maintaining Pasadena’s competitiveness compared with neighboring public and investor-owned utilities.
Officials said the phased approach is intended to ease customer impacts while aligning revenue with rising operational and capital costs.
The rate design is also intended to support broader policy objectives, including conservation and future time-of-use pricing, by sending price signals that encourage customers to shift energy use.
Committee members expressed support for the utility’s financial needs but urged a deliberate public process.
Councilmember Rick Cole cautioned against moving too quickly, noting the importance of allowing residents time to review the proposal and provide feedback.
“To rush through a 21% increase compounded, it seems like we’re asking for trouble,” Cole said. “And I know how hard you’ve worked to get it down to 7% and to get it to these dates. And I know that even a month causes those numbers to shift.”
Cole praised the City for using some of the City’s reserves to buy down the rate increases, but cautioned that “city councils have gotten into big trouble appearing to rush things through when without the opportunity for people to feel heard.”
Councilmember Tyron Hampton suggested the City Council could open the public hearing and then make the discussion on the merits a week later or two weeks later so that people know it’s open.
Use your two-week opportunity to come in and say whatever you want to say about these changes or suggestions. We’ve had public hearings like that before where you open and it’s open for a couple weeks and then we close it.
The public hearing is scheduled for Feb. 23. At that point, the City will most likely open the public hearing but discuss the merits at a later date as not to rush the process and ensure adequate public outreach.
If ultimately approved by the City Council following the hearing and required ordinance readings, the new rates would take effect as soon as administratively feasible thereafter, officials said.
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