Utility rates will increase significantly for Burbank ratepayers next month. The average household could see a 16.5% increase on their power bill, with an 18% increase for water over the next two years. Sewage and refuse will also rise slightly.
Concerns for climate change, the growth of cost-effective renewable energy and energy storage, and the pending retirement of one of Burbank Water and Power’s primary legacy energy sources, a coal-fired power plant called Intermountain Power Project, are all elements in the mix, BWP officials said.
On June 6, the Burbank City Council unanimously approved the increases which will go into effect July 1, with another increase set for July 1, 2024. Many residents decried the rate hikes, saying that everyday people are struggling to stay afloat financially.
“It is no secret many people in this community are hurting today. We have been battered, badly battered by inflation, by corporate greed. The middle class is slowly disappearing as the wealth gap widens every day and the rich just get richer,” said Roger Aldi, a Burbank resident.
“You’re asking for rate increases for water and power — rate increases that exceed the rate of inflation — and of course you cite the reason as rising costs. People are hurting and those proposed increases don’t help,” he added.
In response, BWP officials said that they must yield to state regulations when considering a change in utility rates. “As a not-for-profit community-owned utility, BWP complies with state regulations which require that its rates must equal the cost of providing water and electric services,” wrote Drew Johnstone, BWP assistant general manager and spokesperson.
But the most significant concern for the utility has to do with state-mandated renewable energy goals, which, if ignored, could cost the city millions in fines which would lead to huge rate increases.
BWP has had to significantly rethink its cost and energy demand projections due to recent California energy legislation. Examples of these include Senate Bill 350 and Senate Bill 100 which, among other things, mandate energy efficiency and renewable energy requirements for local utility agencies such as BWP.
SB 100 established a landmark policy requiring that renewable energy and zero-carbon resources supply 100% of electric retail sales to energy consumers by 2045, and 60% by 2030. To comply with state goals and face the climate crisis, BWP must embrace rising costs for renewable resources.
Officials cautioned that if the city were to table water and power rate increases this year, investment in the renewable energy transition would be delayed. If BWP were to miss its state-mandated goals for renewables, fines from the city would soar for ratepayers.
“If we don’t meet the state mandated 60% renewable energy targets by 2030 — which I will gently remind [everyone] is only six and a half years away — we risk fines of up to $147 million. That would be about an 82% rate increase, and we would also still have to meet the renewable requirements,” said BWP General Manager Dawn Lindell during the June 6 public hearing.
Lindell added that BWP currently gets about 39% of its energy from renewables at this time.
To add to the rising list of costs behind BWP’s rate hikes, inflation has brought up the cost of materials and goods such as power poles, renewable energy components, chlorine, power lines, transformers, water pipes and fire hydrants by as much as 200%, BWP officials said. They also cited “aging infrastructure that needs repair to avoid power outages and water service interruptions” in their reasons for increasing rates.
“Well, the water department needs the money because of rising operating expenses. ‘Ay, Dios mío.’ Like the owners didn’t have those same rising operating expenses … it’s just hypocritical,” said Burbank resident and property owner Julio Jaramillo at the June 6 City Council hearing.
Meanwhile, BWP faces a 266% increase in natural gas prices. The department also purchases a portion of its energy from the open market and officials said those costs almost doubled from 2022 to 2023.
The department has postponed rate increases for years because of the financial strain of the COVID-19 pandemic on Burbank households. Rates have only increased 1% since 2017, because the department chose to use its cash reserves “to soften the impact to residents instead of increasing rates during the pandemic,” said BWP’s Energy Services and Utility Rates Manager Miles Collins.
“But now our reserves are low and need to be raised to acceptable levels to ensure a fiscally sustainable future, respond to emergencies and maintain our excellent credit rating,” Collins said.
RISING RATES
The average systemwide increase in electric rates amounts to 8.5%, which is approximately $12.77 per month for an average residential customer, along with a 9% average systemwide increase in water rates, which is about $10.86 per month for the average residential customer, said BWP officials, though rates will increase again by another 9% in July 2024.
Some residents said that their total increases would amount to over $100 per month by 2025.
Water rate increases have been applied on a sliding scale, meaning those who use more water monthly will see a larger percentage increase, and those who use less water will see a lower rate increase.
Burbank residential water and electric bills will continue to stay below those of most utility providers in the region, including Glendale, Pasadena and Los Angeles, which officials said will increase rates in the coming years.
Exact rates will vary based on a household’s projected usage, but the average home will see the following increases:
• Water rates will increase 9% from 2023 to 2024, and another 9% from 2024 to 2025.
• Electric rates will increase 8.5% from 2023 to 2024, and another 8% from 2024 to 2025.
• Refuse will increase 6% from 2023 to 2024, and another 6% from 2024 to 2025.
• Sewer rates will increase 4% from 2023 to 2024, and another 4% from 2024 to 2025.
While sewer and refuse increases account for about $3 per month for the average household, some residents said that their total increases would amount to more than $100 per month by 2025.
“BWP recognizes the strain these increases may have on the community and offers a wide variety of programs designed to help Burbank’s residents and businesses save money and conserve resources. From financial assistance programs for all income levels, to programs and rebates that make homes and businesses more efficient, we stand ready to help our customers,” BWP officials wrote in a statement.
First published in the June 17 print issue of the Burbank Leader.
