Pasadena Water and Power Eyes Rate Increase, Green Energy Push in 2026 Budget

Pasadena Water and Power (PWP) will present its fiscal year 2026 recommended operating budget during a budget workshop at Tuesday’s Municipal Services Committee meeting, outlining plans for a $7.6 million rate increase to fund infrastructure improvements and clean energy initiatives.

The budget, scheduled for discussion at 4 p.m. in the City Council Chamber at City Hall, reflects the municipal utility’s strategy to balance sustainability goals with customer affordability while modernizing aging infrastructure and expanding renewable energy programs.

PWP is undertaking a rate study, which will require City Council approval. A placeholder for a modest increase to base rates is identified in the budget planning document. Electric base rates have remained flat since 2019, despite rising costs and infrastructure needs.

Despite rising operational costs driven by personnel benefits and infrastructure investments, PWP officials said they are working to keep rates affordable through debt funding, grant acquisition and municipal tax advantages.

“The department is focused on keeping rates affordable while employing tools such as debt funding, grant acquisition and municipal tax advantages,” according to a budget summary.

The budget emphasizes PWP’s transition away from fossil fuels, including the elimination of coal use at the Intermountain Power Plant and new power purchase agreements with renewable energy providers Grace Orchard Solar Facility and Calwind Resources Inc. The moves align with California’s clean energy mandates and local sustainability goals.

Key infrastructure investments include sub-transmission system upgrades and hardening of the distribution network to improve resilience against extreme weather events. The utility recently recovered from damage caused by the Eaton Fire and windstorms that caused power outages across the city.

The budget also introduces new customer programs, including a $3 million Income Qualified No or Low-Interest Solar + Storage Loan Program targeting low-income homeowners. The initiative partners with financial institutions to reduce upfront costs for solar panel and battery installations.

Water conservation remains a priority, with programs like unidirectional flushing conserving approximately 1.5 million gallons of drinking water annually. The department reported a 5.6% increase in water sales volume, signaling growing demand even as supply costs rise.

Technology upgrades feature prominently in the budget, including implementation of an Enterprise Asset Management system to optimize maintenance and infrastructure lifecycle costs. PWP also plans to deploy Advanced Metering Infrastructure for real-time consumption monitoring and has launched the MyPWP mobile app for customer account management.

The budget requests additional staffing across departments, including new positions in external affairs, customer service, power operations and capital project management. PWP said the workforce enhancements are necessary to support expanding infrastructure projects and maintain service quality.

An Electric Rate Study scheduled for completion in January 2026 will provide recommendations for future rate adjustments to support capital needs and growing operating expenses, including expanded electric vehicle infrastructure maintenance.

The Municipal Services Committee meeting begins at 4 p.m. Tuesday in Room S249 of Pasadena City Hall.