Second 7% Electric Rate Increase Partly Offset by Seasonal Power Supply Charge Drop

The second of three recent 7% Pasadena Water and Power electric rate increases authorized earlier this year by the City Council was partly offset by a seasonal decrease in power supply charges, according to the City of Pasadena.

A residential customer using 500 kilowatt-hours a month will see a bill increase of less than 2%, about $1.70, and one using 1,000 kilowatt-hours an increase of about 5%, about $13, according to the city. As a publicly owned, not-for-profit utility, Pasadena Water and Power sets rates to recover only the cost of service, including maintaining aging infrastructure and investing in a cleaner, more reliable grid, according to the city.

The council adopted the rate resolution March 23 without dissent, with Councilmember Tyron Hampton absent, and adopted the ordinance March 30 on a 6-0 vote. Staff projected the increases would generate about $84 million a year. The City Charter provides for an annual transfer to the General Fund equal to 12% of the utility’s gross electric sales, which the council set at $28.5 million for Fiscal Year 2027 in June.

General Manager David M. Reyes said in March that a rate adjustment was “necessary to keep the [Pasadena Water and Power] electric system reliable.” The City Clerk reported 33 letters opposing or raising concerns about the increases and five in support before the hearing. The Pasadena Chamber of Commerce and Civic Association’s board voted to oppose them, writing, “It makes no sense to increase the onus on businesses and residents.” The chamber said the increases would harm business owners at a time when many small businesses can ill afford higher costs, and urged the utility to cut costs and use reserves instead. Caltech said it expects its demand charge to rise at least $2.6 million a year and asked that the increases be spread over three years and that the city consider a consumption-based fee rather than a peak-demand charge.

The state Legislative Analyst’s Office reported in January 2025 that “California’s electricity rates are among the highest in the country,” second only to Hawaii, and that average residential rates rose about 47% from 2019 through 2023. It found investor-owned utility rates averaged more than 50% above those of publicly owned utilities, whose rates are closer to the national average. Southern California Edison’s average residential bill for a typical customer using 500 kilowatt-hours a month on its TOU-D-4-9pm plan rose to $188.64 on Oct. 1.

The third 7% increase is scheduled for March 1, 2027, but the council required the matter to return to its Municipal Services Committee after the second increase to determine whether the third is needed. The utility also offers flexible payment plans, bill credits for income-qualifying households, a no-cost Home Improvement Program with in-home evaluations and water- and energy-saving installations, and rebates for Energy Star-certified refrigerators, dishwashers and room air conditioners, according to the city. Qualifying low-income customers can receive a $17.50 monthly bill credit.

A bill estimator is at https://pwp.cityofpasadena.net/2026-electric-rate-adjustment/ and assistance programs are listed at https://pwp.cityofpasadena.net/low-income/. Customer Service can be reached at (626) 744-4005.