Modified PWP Proposal Passes

The City Council unanimously passed a modified rendition of Pasadena
Water & Power’s (PWP) proposed water rate increase at the Council
meeting Monday night.

The adopted plan included three modifications. PWP’s original plan was
modified based on community and City Council input from the June 5
City Council meeting.

The modifications include phasing in a flat fee increase over a
three-year period instead of a two-year period, providing a credit to
consumers in Blocks 4 and 5 for revenues that exceed the actual
penalty costs imposed by the Metropolitan Water District (MWD) and
providing rate relief from Block 5 for efficient water consumers.

Expected revenue from the Distribution & Customer charges (D&C) is
totaled at $9.9 million over three years and would be used to
eliminate deficit conditions, said PWP General Manager Phyllis Currie
at the June 22 meeting.

Rate restructuring block sizes that portion a total annual revenue of
$1.5-2 milllion annually will offset the MWD increases from July 1,
2009 and the anticipated future increase on Sept. 1, 2009, thus
coverng the actual supply and cost of water, Currie said.

If there is no reduction in water consumption, Blocks 4 and 5 are
expected to draw in a total revenue of $2-4 million annually and will
be used to offset MWD penalty costs. If there are no penalties
imposed, the consumers who paid will be credited back, Currie said.

With the exception of a 5 percent increase last year, the PWP has not
increased rates since 1995, Currie said. But now, due to current
state-wide shortages, there has been a 10 percent reduction in the
city’s water supply with higher penalty rates from the MWD if the city
exceeds its target.

“Our community has enjoyed low water rates for a long time and that’s
been something we’ve prized,” Currie said. “And it was until I think
the whole paradigm of water use in California shifted…The days of
imported water being cheap doesn’t apply anymore.”

Currie added that she believes the city should have moved their
reclaimed water sooner and should now focus on increasing local
resources, but expects that the flat fees will remain permanent.

In expressing his support for the motion, Councilman Terry Tornek told
the Council Monday night that he believes the City will just have to
change their water consumption practices.

“We are going to have to change the way we think about water,” he
said. “Cheap water has gone the way of a buck and a half gas. It’s
gone and it’s not coming back, and we’re just going to have to adjust
our behaviors and our consumption patterns accordingly.”

Tornek added that he believes it is now up to the largest users to
“lead the way”.

“The greatest opportunities are still there,” he said. “The biggest
users still have the chance to save the most water.”