Power Cost Adjustment March 2023
The Pasadena Water and Power’s (“PWP”) Power Cost Adjustment (“PCA”) will increase by 2.5¢/kWh effective March 1, 2023. The monthly impact for an average electric residential customer using 500 kWh per month will be $14.00. PWP staff presented additional information at the February 28, 2023 Municipal Services Committee meeting.
Everyone is all too aware of the increase in the price of natural gas and its effect on the gas bills of every resident and business in the area. This increase unfortunately also impacts the regional wholesale price of electricity, as natural gas is a cost factor in the production of electric power across the region and wholesale prices in the California Independent System Operator (CAISO) area.
PWP will be increasing its electric energy rate to recover these market costs for energy procurement. While regional natural gas prices are typically near $4/MMBtu, during the month of December 2022 prices climbed above $30/MMBtu and continue to remain volatile. Although the increase in our customers’ cost of electricity will not spike in the same high proportion as that reflected in natural gas bills, it is important that we work to make our PWP electric customers aware of the upcoming billing increase.
To responsibly manage periodic spikes in energy costs, PWP must dynamically adjust the energy rate to reflect market conditions. PWP relies upon a variety of electrical generation resources using diverse fuel types to help manage energy market volatility, to include relying upon renewable generation resources within our energy portfolio. The overall management of the PWP electric generation fleet or portfolio has helped lessen the impact of natural gas volatility and wholesale electric prices.
Changes to the PCA will be reflected in the energy rate of the billing effective March 1, 2023. PWP has historically adjusted the PCA infrequently, however, due to heightened market price volatility, going forward the PCA shall be calculated each month and any adjustments from the resulting values shall be automatically implemented on the first day of the following month. If the energy market volatility and energy prices decrease to more traditional levels, the PCA will be revised downward accordingly over time, as has been demonstrated by PWP in prior years.
For customers who need assistance in paying their utility bills, PWP provides ongoing utility bill support programs to income-qualified customers through the EUAP (Electric Utility Assistance Program), CARES, CARES+ and LIHEAP (Low Income Home Energy Assistance Program) and LIHWAP (Low Income Household Water Assistance Program). LIHEAP and LIHWAP are federally funded and administered independently by the Maravilla Foundation. More information on these programs can be found online by clicking here.