Pasadena approves phased electric rate increases to fund grid upgrades; council asks staff to reassess before final tranche
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Summary
Council approved a three‑phase rate adjustment to fund capital reinvestment and grid hardening, with phased increases and protections for low‑income customers; council directed staff to report back after Phase 2 to determine whether Phase 3 remains necessary.
Pasadena City Council on March 23 approved a staff‑recommended, three‑phase rate plan for Pasadena Water & Power to support planned capital reinvestment and grid‑hardening work. The plan phases system revenue increases (Phase 1 in April 2026, Phase 2 on Oct. 1, 2026, and Phase 3 on March 1, 2027) to reduce the risk of one‑time rate shock while recovering costs staff says total roughly $68 million of additional revenue needed for upcoming capital investments and operating requirements.
General Manager David Reyes and utility CFO/consultant Lynn Chaimowitz told the council the utility remains in strong financial position and has not increased base rates comprehensively since 2016, but faces rising equipment and contract costs, higher resource prices and a large multiyear capital program (advanced metering infrastructure, sub‑transmission work, wildfire mitigation and other distribution upgrades). Staff said the approach keeps Pasadena's rates broadly below many regional comparators while phasing increases so customers can adapt.
Staff provided sample bill impacts: for a 500‑kWh residential customer (a moderate user), Phase 1 is estimated to result in an approximate $6 monthly decrease because of compositional changes to distribution charges; Phase 2 would add roughly $10 and Phase 3 roughly $20 relative to current bills, for a net increase after all phases in the range described in staff materials. The utility will also phase increases for other customer classes and maintain bill assistance programs; staff said fixed charge increases will be matched by equivalent additional assistance for income‑qualified customers.
Public commenters — residents, institutions and the Chamber — voiced mixed views. Some urged slower phasing or additional mitigation for nonprofits and middle‑income families; others argued the work and the credit‑rating protection the utility gains justify the adjustments. Caltech told the council the proposed step could raise its bills significantly and asked for a longer phase‑in for institutional demand charges.
In action, council approved the staff recommendation but added direction that staff return to the Municipal Services Committee after Phase 2 to reassess whether Phase 3 remains necessary given actual capital spending and revenue performance. Council also introduced an ordinance updating the Light & Power rate code for first reading as part of the package.
The council majority framed the vote as balancing long‑term reliability and affordability: several members asked staff to explore ways to delay or reduce the third tranche if capital expenditures cannot be delivered or alternative revenues appear. The motion passed with no objections.
