Pasadena Electric Bills Predicted to Increase Between 10% to 20%

Pasadena residents and business owners can expect to pay between ten to twenty percent more for energy as Pasadena leans into utilizing more renewable resources to generate energy over the next three years and beyond.

That’s the message some expect City Councilmembers will hear during extended workshop discussions scheduled to replace the Council’s normal public meeting format Monday night at 6:00 p.m. in Council Chambers.

During the informational meeting, the Council will be given an in-depth look at Pasadena Water and Power’s electric rate structure, proposed rate adjustments, and how increasing costs can be distributed for different types of customers.

“Constituents are relying on us to do the heavy lifting here to understand what the fairest way is to absorb these inevitable increases, and that we’re not increasing the rates any more than we absolutely have to,” Councilmember Terry Tornek said Friday.

“Everybody in Pasadena – whether you’re a resident or a business – gets a power bill,” Tornek continued. “This is something that affects every citizen, every business, every office worker indirectly – it touches every person in Pasadena.”

Back in January, Councilmember Margaret McAustin pointed out the the proposed 7.3% increase over three years (2015-2017) is for the Distribution and Customer Charge portion of the bill only.

The multiple components of the electricity bill itself add to its complexity. The portion that the Council has direct vote over, which involves the actual distribution by Pasadena Water and Power, only makes up one third of the bill that energy consumers see.

“ There are other components of our energy bill that will also need to be increased,” McAustin said in an email. “ The potential increase over three years for all components of the bill could be significant, as much as 21%.”

“In addition to a more meaningful and helpful bill, I would like to see us move to a monthly billing cycle if possible. That’s definitely something that’s been on my agenda,” Councilmember Margaret McAustin said.

McAustin chairs the Municipal Services Committee, which oversees the Pasadena Water and Power Department.

While on a percentage basis, every person who receives an energy bill will see an increase; the absolute dollar cost for most people will not be hugely significant.

The average California household consumes 573 kilowatthours (kWh) of electricity per month, according to the U.S. Energy Information Administration. The average cost in Pasadena is 14.92 cents per kilowatthour. With all proposed increases by the Council and the increases in buying energy from outside sources, over three years the cost per unit will raise by 2.03 cents bringing the total to 16.95.

So what does that mean for the average Pasadena household user? The average consumer may see a $12 increase, with a total bill climbing from $85.49. to $97.12.

This projection, however, does not factor in the proposed differentiations of single-family residences versus multifamily residences, or small commercial businesses versus medium commercial business.

The Council may also vote to make different rates for winter and summer.

Although it is not directly part of the conversation on Monday, how quickly the city adopts renewable energy versus coal-generated energy will also have a significant increase on the average users bill.

The largest portion of the consumer bill, about sixty percent, goes toward actually purchasing the energy, whether manufactured by coal or with renewable resources.

The city committed to a “green” plan to use at least forty percent renewable resources by 2020, and by 2027 to be entirely independent of coal energy bought from Intermountain Power Plant in Utah when the contract expires.

“The price were paying for the coal-generated power or brown power, is half of what we pay for the green power. The more green power we choose to buy, because we want to be environmentally sensitive and minimize our carbon footprint and be a green city – that’s the piece that most effects the customer’s bill,” Tornek said.

Shari Thomas, Assistant General Manager for Finance and Administration at Pasadena Water and Power, echoes Tornek’s comment.

“And at this point in time, renewable energy is more expensive than traditional energy that’s produced either by coal or either natural gas. So the greener we become, the more expensive it is for the moment,” Thomas said.

Tornek says the Council has to walk the tightrope between the rising cost of energy to the consumers and the demand for green energy by several groups in the city including the Sierra Club and various school groups.

“On the one hand we want to be environmentally responsible, we have public policies we’ve adopted that say we’re going to be green. But by the same token, the more aggressive we are on the greening of our power supply, the faster the rates are going to go up,” Tornek said. “By 2027 we’ll have no brown power in our inventory. The question is how fast we get to that point.”

The Council faces pivotal energy decisions that will impact all customers in Pasadena.

“Our customers are our owners. Everyone who is a business owner or a resident of Pasadena is an owner of this utility, that’s the definition of a public utility,” noted the Pasadena Water and Power’s Thomas.

As part owner, you may want to follow the trends and decisions for this topic. The Council will have a workshop discussion on March 31, 2014.

In April and May the city will pursue customer education and feedback through field representatives, district meetings, social media and the Chamber of Commerce.

In April, the Municipal Services Committee will vote on the proposed recommended changes to the rates and the City Council will set a public hearing date. In May or June the City Council will vote on the actual rate increases.

Rates increases are set to go into effect July 1.

“I hope people will at least tune in or ideally come to the Council meeting to begin to get educated about this,” Tornek said, admitting that all the components could be complicated, but, “When you have to write the check it becomes the most interesting topic in the world.”

Monday’s workshop will be held at 6:00 in the City Council Chambers, 100 North Garfield, Room S249.

“The decisions we make about water and power are the longest term decisions that we make. We enter into contracts routinely for power that have 20- to 25-year terms with millions of dollars. These decisions are gigantic decisions with long-term impact that my granddaughters who live in Pasadena are going to be paying for,” Tornek said.