Guest Opinion | Rick Cole: Costly ACES Contract a Bad Deal for Pasadena

On Tuesday, the Municipal Services Committee of Pasadena’s City Council voted to recommend a $427,000 contract for consulting services to assist in preparing a legally-required “Integrated Resource Plan.” Only Councilmember Jess Rivas dissented. 

The IRP serves as a “blueprint for Pasadena Water and Power to deliver reliable, environmentally responsible electricity services at competitive rates over a 25-year planning period.” If you don’t care about keeping your lights on, or how high your electric bill will be over the next few years or whether Pasadena is doing its fair share to promote clean energy, you don’t need to read further. But if any of those things are important to you, you may want to let your Councilmember know your opinion before this costly consulting contract is rubber stamped by the full Council in the coming weeks.

Normally, few people pay attention to who gets City contracts, even ones that run to six figures. But these are not normal times. California just endured the most brutal September heat wave in history. Pasadena suffered through nine straight days where the thermometer topped 100 degrees. Miraculously, the power stayed on, despite the highest energy demand ever recorded in the state.

All this takes place in midst of what the United Nations has called a “planetary red alert.” The worldwide toll of record-shattering heat waves, drought, ice melt, flooding, storms and wildfires is now a staple of daily news coverage. As the Colorado River dries up, we are reduced to once a week watering.

But it appears that at Pasadena Water and Power, it’s business as usual. With at least two international full-service engineering giants bidding for the contract, the utility is instead recommending the selection of an oil and gas trading firm based in Carmel, Indiana. ACES has previously had contracts for wholesale energy sales with the utility. Diversity? The top five executives at ACES are all white men.

The evaluation of the bids scored ACES highest. Since there was no public or Council representation in the evaluation process, one must assume good faith on the part of those doing the analysis. What it really shows is the flaws in the Request for Proposals inviting bids. Clearly Pasadena is not prioritizing a cost-effective transition to renewable energy sources, despite the public commitment to achieving the State requirement of 60% renewable by 2030. Yet SB 1020, awaiting the Governor’s signature, will require 90% of Pasadena’s energy to come from renewable energy by 2035. Even if Pasadena can achieve the current 2030 goal, it will be a steep climb to get to 90% just five years later.

We need to be planning now to meet – or exceed – that goal. As a former Pasadena Councilmember and senior executive in two other cities with their own electric utilities, I know that energy projects require years of planning and development. Ensuring Pasadena Water and Power has access to reliable renewable energy sources will not be easy. Remember, California is also transitioning the transportation sector from fossil fuels to electric power. To meet the growing demand for electricity, we’ll be competing with every other public and private utility to harness the power of solar, wind and other renewables. We will have to do so in a way that ensures reliability 24 hours a day even as the climate continues to heat up. 

All this was detailed in letters and remarks by public speakers at  this week’s Municipal Services Committee meeting. The Department of Water and Power’s interim General Manager Jeff Kightlinger defended the selection, insisting: “What we are really looking at is technical expertise in modeling, number crunching and crafting the proposals and ultimately the scenarios will be presented to the council where the policy direction will be received.” Kightlinger’s argument, however, ignores what my late colleague on the City Council John Crowley used to call “The Law of Increasing Compulsion.” If you start off on the wrong foot, it gets harder and harder to reverse course. If we base our future scenarios on outmoded carbon-dominated electricity supply models, we’ll preclude the forward thinking so critically needed for energy resilience. For nearly half a million dollars in ratepayer money, we should be insisting on world-class experience and expertise in renewable resource development, not a firm steeped in oil and gas trading. We should be planning for the world of 2050, not 1950.

Councilmember Rivas states it clearly: “I want Pasadena to be a leader in renewable energy. We should be partnering with other leaders in renewable energy, not those firmly in the oil and gas industry.”

All of us have a huge stake in our public utility. It not only provides the power and water we depend on, it is one of the largest contributors to the city’s budget that funds public safety, parks and libraries. We can’t afford to make costly mistakes in planning for the utility’s future. Fortunately, the Inflation Reduction Act contains major new sources of funding to help cities like Pasadena invest in a clean energy future. The safest path forward is to send this process back to the drawing board, rewrite the Request for Proposals to reflect the importance of planning for a cost-effective renewable energy future and get the best minds available to help guide us to that goal.

Rick Cole is a current Planning Commissioner and former Mayor.