Municipal Services Committee to Meet Next Week on Electric Rate Increase

The City Council’s Municipal Services Committee will deliberate on a recommendation to raise electric rates at its first meeting of the year.

Pasadena Water and Power faces a $67.9 million revenue shortfall over the next two years. That stark finding is driving proposed electric rate increases that city officials will discuss on Jan. 13.

“PWP must operate as efficiently and cost-effectively as possible while meeting the power-generation goals set by the Council,” said Justin Jones, who chairs the committee. “The discussion we had on rates at our last MSC meeting was important, and there was consensus amongst the committee to further review the cost-of-service analysis as well as the opportunity to review a redlined version of the ordinance. As we continue this work, I’m mindful that residents are facing real cost-of-living pressures, and any conversation about rates has to weigh affordability carefully alongside reliability and long-term financial stability.”

The committee originally agendized the item late last year, but that meeting was canceled due to the lack of a quorum.

The item will go before the City Council at a later date.

Officials are recommending phased increases of 9.5% annually for Fiscal Years 2026 and 2027. New rates would take effect March 1, 2026, if approved.

The increases would roll out in three steps. The first comes in March 2026. October 2026 brings the second. The final phase hits in March 2027.

PWP’s revenue requirements average $259.6 million for the two-year period, the report said. Forecasts show total needs of $334 million in Fiscal Year 2026 alone.

Rising costs are squeezing the utility hard. Equipment and material expenses have jumped 75% to 100% since 2019.

Clean energy procurement costs have doubled in five years. The utility is also investing in battery storage and wildfire resilience.

Without rate adjustments, PWP’s $409 million in reserves would drop $134 million by Fiscal Year 2029.

Despite the proposed hikes, Pasadena rates remain the region’s lowest, the report said. The utility charged $115 for typical residential use in November.

That compares favorably to competitors. Southern California Edison billed $191. Los Angeles Department of Water and Power charged $139.

Glendale’s rate hit $178. Even Burbank, at $107, came close to Pasadena’s pricing.

The rate study also recommends updating the city’s electric rate ordinance. Changes would modernize outdated provisions in Title 13, Chapter 13.04.

Updates would support time-of-use pricing and advanced metering. They would also facilitate electric vehicle programs and local solar initiatives.

PWP stressed equity in its proposal. Low-income households would receive 100% offset of fixed charges through the Public Benefits Charge.

The utility conducted extensive public outreach. It held webinars and open houses. Officials created a dedicated website at engagepwp.org.