City Council Approves Source of Funding for Glenarm Power Plant Revamp Project

The Pasadena City Council approved the sale of $85 million in electric revenue bonds to fund the first phase of the $132 million Glenarm Power Plant revamp project at its Monday meeting on Oct. 7.

In it’s second reading, the ordinance passed with no objections, allowing staff to begin to offer bonds for purchase by one or more firms.

The bonds will not affect the city’s credit rating, officials said, because Pasadena Water and Power’s revenue stream backs them rather than the city’s general fund.

However, the cost of the bonds could lead to a $3 to $7 increase in monthly customer electric bills.

The 5-year capitol improvement project is set to begin construction in 2014. The plant’s last remaining steam generator will be replaced with a gas turbine generator to increase efficiency. The remaining balance of the project will be funded with additional bonds, $9 million in cash reserves and a line of credit.

The bonds will be sold competitively with a maximum term of 30 years and will bear fixed interest rates. The true interest cost is estimated at 4.74 percent based on current market rates, which is subject to change until the actual bidding is complete on the scheduled November 18, 2013 date. The refunding is estimated to generate $330,000 of net present value savings, based on current market conditions.