June 9, 2009

RISING COSTS SPUR PROPOSED WATER RATE INCREASES
 

The Pasadena City Council has continued its public hearing on Pasadena Water & Power’s (PWP) proposal to increase water rates to Monday, June 22, at 7:30 p.m. at City Hall, 100 N. Garfield Ave., Room S249.

Before bringing the matter to council for the initial public hearing on June 8, PWP hosted a series of community meetings to explain why increases are crucial at this time and what the impact will be on customers’ bills. Depleted funds for basic services and escalating costs from water suppliers are the driving factors behind the department’s proposal.

“While PWP has had only one water rate adjustment for fixed costs over the past 13 years, our operational and maintenance costs have grown steadily,” said Shari Thomas, assistant general manager of finance and administration.

The department has been using its reserve funds to maintain essential services but those funds are now nearly depleted.

To correct this cost/revenue imbalance, PWP has proposed to increase two separate fixed-rate charges: the Distribution and Customer Charge (D&C) and the Fire Protection Surcharge (FPS). The D&C covers operational costs, distribution system maintenance, metering upgrades, customer service and billing; the FPS is required to maintain, repair, install and upgrade public fire hydrants. Both are based solely on a customer’s meter size.

“We’re talking about the nuts and bolts of our utility, from water quality testing to testing valves to project engineering to meter reading,” Thomas said. “[These are] investments that need to be made regardless of the amount of water delivered to our customers.”

An increase to the D& C and FPS is proposed for July 1, 2009. A second increase to only the D&C would take effect July 1, 2010. For a typical residential customer, this would be a total increase of $4.15 or $7.89 per month, depending on meter size, starting this year and then an additional charge of $3.82 or $7.27 per month starting next year. A typical small business with a 1½-inch meter would see a monthly increase of $16.69 in 2009 and $13.41 in 2010. Charges are greater for each successive meter size, which ranges from 5/8 of an inch to 12 inches.

Concurrent with these charge increases, PWP has also proposed to revamp its block rate structure to encourage conservation and align rates with cost increases passed down from the Metropolitan Water District (MWD). Beginning July 1 MWD, from which PWP receives 65 percent of its water supply, will cut PWP’s allocation by 10 percent and impose penalty rates for any excessive consumption. In addition, MWD will raise its prices 19.7 percent on Sept. 1.

In response, PWP has proposed to reallocate the amount of water available in each of its three current price brackets (or blocks) while adding two news blocks at the upper end of its rate structure. Rates in Blocks 4 and 5 are directly related to the penalty rates imposed by MWD and will not affect 90 percent of PWP customers.

“This new structure sends a price signal to our customers to remind them to stay in those lower blocks through conservation,” Thomas said. “We’re taking steps to ensure that customers who are already doing a great job of conserving are not penalized by this structure.”

“We also want to assure customers that the new rates would be in line with other water agencies and that municipal utilities like PWP are non-profit enterprises,” she added. “Every penny generated by the new rates will be invested in Pasadena’s future.”

A video about the proposed water rate increase can be viewed at any time at www.cityofpasadena.net/budget; and on 55 KPAS Mondays at 9:30 a.m., Tuesdays at 1:30 p.m., Wednesdays and Thursdays at 9 p.m., Fridays at 12:30 p.m., Saturdays at 8 a.m. and Sundays at 8:30 p.m.

For more information, including a water bill estimator, call (626) 744-6970 or visit www.cityofpasadena.net/savewater.