PWP Asks for Public Hearing on 7.1 Percent Water Rate Increase

Pasadena Water and Power is seeking approval from the City Council to raise water rates by 7.1 percent starting in April this year, and by an additional 7.2 percent to start in January 2023.

PWP said the rate adjustments are necessary in order to increase revenue in the midst of higher costs for water purchased from the Metropolitan Water District, reduced sales due to Pasadena’s assertive conservation goals, and the higher costs for operating and maintaining the City’s water supply systems.

Such additional costs include the pumping and treatment of local groundwater, and an increased level of capital investment on infrastructure projects, PWP said.

As a requirement before PWP could implement rate hikes, PWP is asking the Pasadena City Council to set a public hearing on March 14 where PWP will explain why the increases are necessary, and which part of customers’ water bills will be impacted.

A PWP Agenda Report for Monday’s City Council meeting showed the department wants to increase the “commodity charge” on water bills effective April 1. This is expected to add an annual revenue of between $1.5 million and $2 million to PWP. Also starting April, PWP wants to increase the “distribution and customer charge” to generate an additional $1 million per year.

Effective January 1, 2023, PWP wants to increase the commodity charge for an additional $1.8 million, the distribution and customer charge to make an additional $1 million, and the “capital improvement charge” to get an additional $1 million in annual revenue, the report showed.

A table included in the report showed these increases could translate to an additional $3 to $4 in the bill for residential customers when implemented, and an additional $19 to $20 per commercial customer.

PWP is also seeking a redefinition of the “capital improvement charge” or CIC in customers’ water bills to apply to all water capital improvement projects approved by the City Council, instead of being limited only to water distribution system projects. The department said this will only clarify the definition but will not change the CIC formula.

Once the City Council decides to approve the March 14 public hearing date, PWP will send out notices to all customers by email, including the recommended rate adjustments and other necessary information. Based on PWP’s projection, an updated water rate ordinance could be approved before the end of March.

PWP serves approximately 171,000 customers through a total of 38,000 meter connections. More than 80 percent of the City’s customers are within Pasadena’s City limits, with the remaining customers located in the surrounding communities of Altadena and Los Angeles County.

About 85 percent of PWP’s water customers are residential, including both single-family and multi-family services.