Pasadena Prepares for Electric Rate Overhaul Amid Push for Carbon-Free Future

The Pasadena Municipal Services Committee will review Pasadena Water and Power’s latest update on its Electric Rate Study, a key step in reshaping the city’s energy future, at its regular meeting Tuesday, Sept. 9.

The study aims to develop a cost-based rate plan that supports fiscal stability, infrastructure upgrades, and sustainability goals.

Pasadena Water and Power is targeting a transition to 100 percent carbon-free electricity by 2030.

A two-year rate plan is under development, using financial modeling that projects system-wide effective rate increases of 9.5 percent in both 2026 and 2027.

These increases are expected to generate $21.5 million in 2026 and $25.5 million in 2027, according to Pasadena Water and Power projections.

The financial model accounts for rising costs in grid maintenance, renewable energy procurement, and long-term investments like advanced metering infrastructure.

Pasadena Water and Power has committed to purchasing only renewable resources since 2018.

Market indices show renewable energy prices have more than doubled over the past five years.

Pasadena Water and Power is also reviewing the Light and Power Rate Ordinance to modernize outdated provisions and streamline rate schedules for future revisions.

Proposed updates include removing obsolete sections, revising contract language, and adding new provisions for electric vehicles and time-of-use pricing.

The utility is considering separating pricing from the ordinance to align with other city fee schedules and simplify future rate adjustments.

A cost-of-service analysis is underway to allocate expenses across customer classes and determine appropriate retail pricing structures.

Pasadena Water and Power plans to present rate recommendations in the fall, following completion of the pricing design and ordinance review.

The utility said public engagement remains central to the process, with outreach efforts including webinars, community events, and a new online platform called “engagePWP.”

Phase 1 of engagement focused on gathering input from residents and large customers about expectations and rate preferences.

Phase 2 will begin after City Council approval, highlighting transparency and education about the new rates and available customer programs.

Pasadena Water and Power is also preparing outreach kits for community-based organizations to ensure broad awareness and participation.

The Pasadena Municipal Services Committee may take action following Tuesday’s discussion, though the memorandum is presented for information only.