Adopted Energy Plan Means Pasadena Electricity Bills Likely to Increase

At a public hearing Monday night, Pasadena Water and Power officials said they expect residents’ power bills to become more costly in coming years because the state requires that California gradually moves toward using greener, and thus more expensive energy.

The 2011 senate bill X1-2 mandates that California utilities must currently procure 20% of their energy from renewable resources. That requirement increases incrementally until 2020, when 33% of procured energy must come from renewable resources.

In 2009 Pasadena voluntarily established an energy plan with goals higher than the state requirement.

“We’ve had an aggressive agenda when attaining renewable resources,” said Councilmember Margaret McAustin. “It’s easy to say we want to be the greenest city in the world, but this is only one component of our utility costs. People are looking at water as well.”

The city’s plan is to have 40% of its energy come from renewable resources by 2020.

These energy resources are divided into three categories. Category one is the most expensive kind of renewable resource, while category three is the least valuable resource.

“PWP is required to purchase a minimum amount of category one products and no more than a maximum amount of Category 3,” states the PWP RPS procurement plan.

Currently, the state mandates that 50% of procured resources must come from category one resources, and the percentage requirement for category one keeps increasing to 75% in 2020.

Meanwhile, category three resources are slowly being phased out. Through 2013, 25% of resources are allowed to come from category three resources, but it must be less than 10% by 2020.

A PWP representative explained that power bills are divided into different charges – an energy charge, a distribution charge, a public benefits charge. Because category one resources are more expensive, PWP estimates a 6-9% increase in the energy cost, though they stressed that energy rates for the rest of the state will go up as well. PWP said that energy costs make up about half of a bill.

Wendy de Leon, PWP’s media relations manager, said that she couldn’t say when exactly the rates would go up, as that would also depend on when old contracts expire and which new ones Pasadena enters into.

“I think our PWP people are doing a good job chasing the most cost-effective renewable energy available, but it’s not cheap,” said Tornek. “Every citizen of Pasadena, every business of Pasadena is going to be confronted with this reality and we’re going to hear about it later. This is an increasingly contentious and complicated matter to deal with at this council.”

Senate bill X1-2 states that, “the program was developed on the heels of the state’s electricity crisis which was in part due to the volatility of natural gas markets.”

The intent of the state’s requirements as listed in the bill are to “promote stable electricity prices, protect public health, improve environmental quality, stimulate sustainable economic development, create new employment opportunities, and reduce reliance on imported fuels.”