WATER AND
POWER
Fiscal Year 2023-2024
& Fiscal Year 2024-2025
Proposed Budget
City Council
May 9, 2023
2 BWP Performance
19%
38.5% 99.999%
99.999%
99.999%
Workforce
Aging assets
Increasing regulatory
environment Supply chain/Inflation
High energy and gas price spikes
Industry partner
dynamics Climate change
Customer
expectations/development
demands
Helpful technology
BWP Challenges
Technology needed
Prior rate under collection
4 Inflation
Renewables
up 2X – 3X
New substation
buildout up
47%
Substation
rebuild up
67%
Transformers
up 100%
Fiber optic
cable up
20%
Copper coils
for water
service lines
doubled
Ductile iron
pipe up
52-79%
Fire hydrants
up 41%
Water
meter boxes
up 59%
Chlorine
205%
5 Historical Natural Gas and Energy Prices
Natural Gas
Prices
($/MMBTU)
Energy Prices
($/MWH)
2020 $3.01 $47.61
2021 $6.99 $61.81
2022 $9.27 $96.28
2023 $11.33 $88.81
6 BWP Cost Savings and Avoidance
Last 12 months
TDMS database $7,000,000
Early bond and loan redemptions $6,983,000
IPP STS Transmission Losses $5,578,291
Wholesale margin $2,360,000
Use of IPP $2,339,682
Prepayment of gas $989,176
Termination of gas contract $444,000
Other $1,423,187
Total $ 27,117,336
7 Revenue Resources Offsetting Rate Increases
• Aid-in-construction
• Capacity charge
• Grants
• Investing
• Low Carbon Fuel Standard Credits
• OneBurbank
• Plan check fees
• Recycled water sales to LA
• Wholesale trading
8 Pension Cost Reduction Strategies
• Use one-time funds to pay down the unfunded pension
liability
• Improve long-term cash flow by reducing future payment amounts
• Generate significant interest expense savings
Electric Water
Total 2-Year Commitment $2,062,200 $330,000
FY 2023-24 $1,031,100 $165,000
FY 2024-25 $1,031,100 $165,000
Interest Savings $660,935 $105,765
Pay-off Period 21 years 21 years
Proposed Budget Authority
9 10
Electric Fund
11 Under-Collection
FY 16-17 FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25 Customer Rate Increase % 2.1% 0.0% 0.0% 1.0% 0.0% 2.5% 6.0% 8.5% 8.0% Under-Collection from
Prior Year 4,738 1,055 1,223 1,737 8,939 9,687 7,091 15,597 16,424 New Drivers 4,591 2,058 1,136 8,848 7,999 6,608 19,257 25,060 12,309 New Reductions (4,500) 1,890 (622) (7,251) (7,992) (550) (10,308) (4,095) Rate Increase (3,774) - - (1,646) - (1,212) (10,201) (13,925) (15,429) Under-Collection ($000) 1,055 1,223 1,737 8,939 9,687 7,091 15,597 16,424 9,209 Under-Collection ($000)
12 Rate Drivers FY 23-24
($ in 000’s) $ Rate Requirement
Under-collection from prior years $15,597 9.52%
Increased fuel and power costs $18,560 11.33%
Capital financing $6,500 3.97%
2023-24 rate requirement $40,657 24.82%
2023-24 rate increase ($13,925) (8.50%)
ONE Burbank revenues ($400) (0.24%)
Revenue from higher retail load ($618) (0.38%)
Financing of IPP demolition ($2,000) (1.22%)
Operational efficiencies ($1,460) (0.89%)
Reduced pension funding plan ($1,664) (1.02%)
Interest and other income ($4,166) (2.54%)
Projected under-collection $16,424 10.03%
Rate Drivers FY 24-25
13 ($ in 000’s) $ Rate
Requirement
Under-collection from prior years $16,424 8.52%
Fuel and power supply $6,202 3.22%
Operations and maintenance $3,826 1.98%
Interest and other income $2,281 1.18%
2024-25 rate requirement $28,733 14.90%
2024-25 rate increase ($15,429) (8.00%)
Revenue from higher retail load ($3,895) (2.02%)
ONE Burbank revenues ($200) (0.10%)
Projected under-collection $9,209 4.77%
• 0.43% and 2.48% higher demand
• 4.1% and 3.0% general inflation
• Utility costs rising @ 2 - 2.6x general
inflation
• Higher energy prices
• IPP coal issues
• Investments in a sustainable future
• 42.5% and 45% renewables
• 8.5% and 8% rate increase
• Utilizing energy cost adjustment charge
(ECAC) and reserves to stabilize rates
14 Highlights and Assumptions
• 53% renewables
• IPP coal decommissioning
• New transmission planning
• Studies for hydrogen and carbon
capture at MPP
• Investments in a sustainable future
• Increase in substation capacity
• Work force modernization
• Continue rate plan toward full cost
recovery
15 Forecast Assumptions
for Years 3-5
• Future staffing needs
• Transmission buildout
• Olive replacement with renewable
peak generation units
• Additional pension liability
prepayment
• IPP decommissioning costs
• Carbon capture & green hydrogen
implementation
• Additional renewable price
increases
16 Future Costs Not
Included in the 5-year
Forecast
17 Cash Reserves in Millions $
18 Power Mix
Coal, 45%
Nuclear, 6%Natural
Gas, 8%
Market,
36%
Large
Hydro, 5%
FY 2001-2002
Coal, 14%
Nuclear, 7%
Natural
Gas, 20%
Market,
12%
Large
Hydro, 2%
Renewables
, 45%
FY 2024-2025
19 Annual Outages
0.39 0.58 0.60
0.69 0.77
0.86 1.02
1.17 0.00
0.20 0.40
0.60 0.80
1.00 1.20
1.40 Burbank Anaheim SDG&E Riverside LADWP SCE PG&E Glendale 5 Year Average 2017-2021
Annual Outages
System Average Interruption Frequency Index (SAIFI)
20 Reliability
Source: DR0050; Includes Planned Outages.
System Average Interruption Duration Index (SAIDI)
2021 Industry Benchmark
Mean Q1 Q2 Q3
74 47 61 88
Minutes
Utilities
BWP , 16.40 Mean, 74
21 Residential Bill for Average
Single-Family Monthly Consumption
22 Income Statement
23 Electric Capital Improvements
Project (In 000's) FY 23-24
Proposed
FY 24-25
Proposed
4kV to 12kV Conversions $5,500 $5,500
Media District 12kV Capacity $4,600
Replace Deteriorated Overhead/Underground Electrical Dist. Lines $2,750 $2,822 Campus Stormwater Management Program $1,967 $1,311
Regional Intermodal Transportation Center (RITC) Solar and Battery $1,700 Meter Data Management System Replacement/Upgrade $1,500 ECC GIS Integration to Utility Network Model $750
EcoCampus Solar and Storage $750
Citywide Solar and Storage $700 $10,000
Ontario Substation- 3rd Bank and Line $4,174
Replacement of AMI $183 $2,263
Customer Payment Options $800
Other Remaining Projects $12,414 $8,964
Total Electric Fund CIP Projects $32,814 $35,834
24 Electric
Aid-in-Construction
Project (In 000's) FY 23-24
Proposed
FY 24-25
Proposed
Build Service to Large Project Over 1 MVA $8,000 $8,000 Media District 12kV Capacity (AIC Share) $5,500
Ontario Substation- 3rd Bank and Line (AIC
Share) $2,000
Build New Customer Transformer Stations,
750 kVA & Under $1,200 $1,400
Provide Fiber Optic Services to Business
Customers City Wide $250 $250
69kV Line Metering and Protection
Upgrades $31 $31
Total Electric Fund AIC Projects $16,981 $9,681
25 Golden State Developments
26 Downtown Developments
27 Media District Developments
Site Visits and Confirmations
28 Staffing Summary for
FY 23/24 and FY 24/25
Up to 356 employees
including
• 3.5 new positions
• 8 upgrades
29 Investments:
$1.2M in electric
$116k in water
$758k in LCFS
Over 6.8
million kWh of
energy saved
Over 34.5
million
gallons of
water saved
30 Sustainability Programs
FY 2021-2022
2,548 Participants
EE programs
avoided
4,709 metric tons
of GHG
emissions
EV public
charging sessions
reduced
290 metric tons
of GHG
emissions
Over $865k in
customer energy
and water bill
savings
31 Community Benefits
FY 2021-2022
32 $2.3M in Utility Assistance
FY 2021-2022
1,711 households active on Lifeline Rate
80+ refrigerators replaced
115 COVID Job-loss bill credits
$1.2M CA Arrearage Payment
$0.3M CA Water Arrearage Payment
$0.2M CA Water-Waste Arrearage Payment
33 FY 2022-2023 YTD
$0.6M California Arrearage Payment
$0.4M in Lifeline, BUSS, Project Share
$1.4M in YTD Utility Assistance
205 Residential payment arrangements
for $0.4M
43 refrigerators replaced
1,825 households active on Lifeline Rate
34 FY 23/24 Assistance Programs
Benefit Income Qualification
(family of 4)
Other Requirements
Lifeline Rate
Assistance
40% off electricity
No 7% UUTax
$59,550 62+ or disabled
household member
Federal
Home Energy
Assistance Program
(HEAP)
Utility assistance +
weatherization and
energy efficiency
$59,187 -
Life Support Rate No 7% UUTax None In-home life-
support equipment
35 FY 23/24 Assistance Programs (con’t)
Benefit Income Qualification
(family of 4)
Other
Requirements
Burbank Utility
Service Subsidy
12% electric rate
discount
$92,600 -
Project Share $100 bill credit for
water or electric
$92,600 Job Loss
Payment
Arrangements
Up to 24 months None -
or
Residential Customer
Satisfaction
36 2021 Independent Survey of Residential
Customer Satisfaction – Very Satisfied
“Top 3 Box” = 8, 9, 10 on 0 = Dissatisfied to 10 = Very Satisfied scale.
Base is customers contacting utility. (C-3a)
74% 75% 79% 79%
66% 60%
53%
64%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2014 2016 2018 2021
BWP Muni
90%
80% 81%
68% 71% 70%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2017 2019 2022
BWP Muni
Commercial Customer
Satisfaction
37 2022 Independent Survey of Commercial
Customer Satisfaction
“Top 3 Box” = 8, 9, 10 on 0 = Dissatisfied to 10 = Very Satisfied scale. • Via email, phone or in person.
• Payment arrangements available
for every income level.
• "Always there for you!"
38 Making a Difference
39 Safety
OSHA Total Recordable Injury Rate (TRIR)
Total Recordable Injury Rate
OSHA Recordable Injury Rate – Recordable cases per 100 full time employees.
POU – Publicly Owned Utilities – Bureau of Labor Statistics PASMA – Public Agency Safety Management Association (Utilities only data) APPA – American Public Power Authority – Avg. recordable injury rate, all respondents Non-POU – Not a Publicly Owned Utility
40 MPP Joint
Power Authority
41 Proposed Budget
42 Tieton Joint Power Authority
43 Proposed Budget
Street Lighting Fund
44 45
Proposed Budget
46 LED Conversions
47 ONEBurbank
• Animation Guild
• Buddy’s All Stars
• Burbank Studios
• BUSD
• Cast & Crew
• Catalina Media
• CBS
• Century Link
• Critical Content
• Deluxe
• Digital Preservation Labs
• Disney
• Entertainment Partners
• Estrella Media
• FotoKem
• Hasbro
• Keycode Media
• Mobeon Media
• Moviola
• Music Express
• NBC Universal
• New Wave Entertainment
• MSG Entertainment
• Pixelogic Media
• Producers/Writers Guild
• SAG
• Sohonet
• Burbank YMCA
• Viacom Inc. (Nickelodeon)
• Warner Brothers
• Worthe Real Estate
48 Customers
49 ONEBurbank Revenues
Revenues ($ in 000’s)
• $586k BWP cost savings
• $659k City departments cost
savings
• $373k BUSD cost savings
50 Annual Broadband
Benefits
51 Communications
Fund
Proposed Budget
52 53
Water Fund
54 Under-Collection
FY 16-17 FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25 Customer Rate Increase % 3.4% 3.4% 4.9% 4.9% 0.0% 6.0% 9.0% 9.0% 9.0% Under-Collection from
Prior Year $551 $1,105 $1,370 $912 $1,686 $2,808 $3,839 $2,642 $1,493 New Drivers $3,506 $2,318 $1,618 $2,342 $1,554 $2,145 $4,443 $3,454 $471 New Reductions ($2,202) ($1,267) ($861) ($325) ($432) ($117) ($1,318) ($1,925) ($683) Rate Increase ($750) ($786) ($1,215) ($1,243) - ($997) ($4,322) ($2,678) ($3,060) Projected Under-
Collection $1,105 $1,370 $912 $1,686 $2,808 $3,839 $2,642 $1,493 ($1,780) Under-Collection ($000)
Rate Drivers FY 23-24
55 ($ in 000’s) $ Rate
Requirement
Under-collection from prior years $2,642 8.88%
Higher operating expenses $2,147 7.22%
Higher water supply expenses $1,307 4.39%
2023-24 rate requirement $6,096 20.49%
2023-24 potable rate increase ($2,678) (9.00%)
Recycled revenues ($458) (1.54%)
Higher sales volume ($928) (3.12%)
Reduced pension funding plan ($367) (1.23%)
Fee adjustments ($172) (0.58%)
Projected Under-collection $1,493 5.02%
Rate Drivers FY 24-25
56 ($ in 000’s) $ Rate
Requirement
Under-collection from Prior Years $1,493 4.39%
Operation and Maintenance $471 1.39%
2024-25 rate requirement $1,964 5.78%
2024-25 Potable rate increase ($3,060) (9.00%)
Recycled revenues ($342) (1.01%)
Higher sales volume ($249) (0.73%)
Fee adjustments ($92) (0.27%)
Additional Reserve Replenishment ($1,780) (5.23%)
Highlights and Assumptions
• 9% rate increases in both years
• 5% and 7% increased water costs
from MWD
• Lower sales compared to pre-
COVID
• Must modernize infrastructure
• 6% system losses
• Water conservation continues
• Matching funds for potential
grants
57 Continued Price Increases
• High inflation for specialty products in FY 22:
205% for chlorine gas
14% for paving materials
59% for water meter boxes
52% to 79% for ductile iron pipe
• Continued high inflation for specialty products:
Chlorine gas:
60% FY 23/24
30% FY 24/25
Ductile iron pipe: 15% per year
58 Forecast Assumptions
for Years 3-5
• Rate plan that balances affordability,
reliability, and sustainability
• Maintain a sustainable work force
• Higher water supply costs
• Higher water sales from development
• Continued emphasis on water
conservation
• Investments in modernizing
infrastructure
• Replenish cash reserves
• Continue rate plan toward full cost
recovery
59 Future Costs Not
Included in the 5-year
Forecast
• Future staffing needs
• Increase in pipeline
replacement rate
• Revenue loss due to uncertain and
highly variable climatic conditions
• MWD rate increases to construct
the delta conveyance project and
other regional water supply
projects not yet approved by their
board
• Future regulations and permit
requirements to treat new and
emerging contaminants
60 61
Residential Bill Comparison
Medium home: 12,000 gallons with a 1″ connection
62 Cash Reserves in Millions $
63 MWD Variable Charges
Rate Outlook
64 MWD Fixed Charges
Rate Outlook
0 5,000
10,000
15,000
20,000
25,000
30,000Acre-Feet
Recycled Water
Draw on Stored
Groundwater
Import Return Credit
Replenishment Purchases
(Spread)
Physical Solution Purchases
MWD Treated
Water Planning
BWP Water Sources
65 66
LA Exchange
0.01 12.67
51.83 42.73 49.97 46.98 50
75.5 134.5
284.5
0 50
100
150
200
250
300
16-17 17-18 18-19 19-20 20-21 21-22 22-23
(Estimate)
23-24
(Estimate)
24-25
(Estimate)
25-26
(Estimate)
Fiscal Year
Acre Feet
20% by 2020 = 155
67 Water Use per Capita
Gallons per Capita per Day
Gallons per day for fiscal years ending June 30th
Income Statement
68 Potable Capital Improvements
69 Project (In 000's) FY 23-24
Proposed
FY 24-25
Proposed
Potable Water Mains $2,605 $2,970
Upper Zones Disinfection Residual Improvement/Upper Zones CL2 Booster $1,938 $1,791 Design-Build Pipeline Project $1,690
FEMA Seismic Pipeline Retrofit Grant $1,607
System Expansion Services (AIC) $550 $550
Meter Replacements $369 $377
Pipeline Condition Assessment (various technologies) $250 VPP Disinfection System $250
Valve Replacements $150 $150
Other Remaining Projects $865 $818
Total for Potable Water System $10,024 $6,905
Water Fund's Shared Projects $945 $496
Recycled Capital
Improvements
70 Project (In 000's) FY 23-24
Proposed
FY 24-25
Proposed
RW Interior Tank Coating $270 $107
Potable Reuse -
Study/Program $200 $200
Meters - Recycled Water $36 $37
SCADA Software Upgrade $35
Other Remaining Projects $88 $69
Total for Recycled Water $594 $448
• 278 miles of pipe in
Burbank
• 30 miles of pipe that are
100+ years old
• Aged pipe is cast iron
• Break history - calendar
year
• Reliability exceeded
99.999% consistently over
the last five years
71 Pipe Age and Break History
Year Break/
Leak
2012 23
2013 27
2014 27
2015 13
2016 16
2017 23
2018 25
2019 16
2020 17
2021 17
2022 14
Water Main Monitoring &
Condition Assessment
• Statistical Study/Machine Learning:
• Pipeline risk assessment using artificial
intelligence to determine:
Likelihood of Failure (LoF)
Consequence of Failure (CoF)
• Satellite Leak Detection
• Images of our water system
34 potential leaks were investigated
13 locations were actual leaks that
were immediately repaired
72 Water Main Monitoring &
Condition Assessment
• Automated Leak Detection:
40 devices installed on critical pipelines
Detects leaks when they are small
One leak was identified and repaired
• Acoustic Signal Processing:
Predicts life-span of pipe
Approximately 10,000 feet of pipeline
was surveyed
73 BWP Budget Summary
• Extreme climate variability
• Increased focus on sustainability
• Balance affordability with prudent
financial planning to reduce past
revenue shortfalls
• Continue investments to maintain
reliability
• Invest in our employees who continue
to rise to the challenge
74 WATER AND
POWER
Fiscal Year 2023-2024
& 2024-2025 Proposed
Water & Electric Rates
City Council
May 9, 2023
Cost of Service and Ratemaking
Budgeting / Revenue Requirement
Determine the cost to run the utility
Cost of Service
Categorize costs by function and
type
Allocate to customer classes
Rate Design
Translate results
into rates
77 Water Cost of Service and Rate Design
• Cost of service last conducted internally in 2016
• BWP retained Raftelis to conduct study and
consult on rate design
Allocation to water cost components
SUPPLY DELIVERY PEAKING COSTS METER
MAINTENANCE
CUSTOMER
SERVICE
Cost of Service
Revenue Requirement
Amount of Water Used ($/gal) Fixed Charges by Pipe Size 79 Share of Revenue Requirement
by Class
Current Rates Proposed Rates
(Cost to Serve)
80 Rate Design
Customer Type Current Tiers Proposed Tiers
Single-Family
Residential
0 to 15 HCF 0 to 8 HCF
16 to 30 HCF 9 to 20 HCF
Greater than 30 HCF Greater than 20 HCF
Customer Type Current Structure
Proposed
Structure
Proposed
Structure
Multi-family /
Commercial Seasonal (Summer & Non-Summer)
Multi-Family
All Months
Commercial &
Industrial
Irrigation
Private Fire Service Seasonal (Summer & Non-Summer) Private Fire Service
Temporary Potable Seasonal (Summer & Non-Summer) Temporary Potable
$X
current
12,000 gal.
$X
12,000 gal.
$44.17
FY 22-23
$44.65
FY 23-24
$X
current
12,000 gal.
$X
12,000 gal.
$X
current
12,000 gal.
$X
12,000 gal.
$X
current
12,000 gal.
$X
12,000 gal.
5,236 gallons/month 8,976 gallons/month 11,220 gallons/month 13,465 gallons/month Single-Family Residential Bill Impacts
$63.07
FY 22-23
$69.51
FY 23-24
$74.41
FY 22-23
$85.27
FY 23-24
$86.83
FY 22-23
$101.03
FY 23-24
~25% of customers use less ~50% of customers use less Average customer ~75% of customers use less +$0.48 +$6.44 +$10.86 +$14.20
7 HCF 12 HCF 15 HCF 18 HCF
Multi-Family Building Commercial Irrigation
Multi-Family, Commercial, Irrigation
$110.81
FY 22-23
$131.84
FY 23-24
$110.81
FY 22-23
$119.28
FY 23-24
$110.81
FY 22-23
$117.76
FY 23-24
Bill for ~15,000 gallons (20 HCF) Bill for ~15,000 gallons (20 HCF) Bill for ~15,000 gallons (20 HCF) +$6.95 +$8.47 +$21.03
Water Availability Charges
1”
2”
3”
4”
6”
$56.67 $63.19
$113.34 $158.77
$177.08 $268.26
$354.19 $563.70
$17.72 $17.71
Current Proposed
84 Residential Water Bill Comparison
Small home: 6,000 gallons with a ¾ ″ connection
85 Residential Water Bill Comparison
Medium home: 12,000 gallons with a 1″ connection
86 Electric Cost of Service and Rate Design
• Cost of service last conducted internally in 2017
• BWP retained NewGen Strategies and Solutions in 2022
Electric Cost of Service Methodology
Revenue Requirement
Production DistributionTransmission Customer
Energy Charges Demand Charges Customer Charges
88 Customer Class Contributions to Monthly BWP System Peaks Residential customers account for 40-45% of load during summer peaks Cost of Service Results and Rate Plan
Current
FY 22-23
$72.00
FY 23-24
Estimated bill for 345 kwh Estimated bill for 520 kwh Estimated bill for 744 kwh Estimated Average Residential Bill Impacts
+$7.98
$64.02
Proposed
Current
FY 22-23
$114.10
FY 23-24
+$12.77
$101.33
Proposed
Current
FY 22-23
$165.40
FY 23-24
+$18.52
$146.88
Proposed
Average Apartment/Condo Average Across All Residential Average Single-Family Home 91 Average Residential Bill Comparison
520 kWh/month with 12.75% increase
92 Financial Assistance
For financial assistance, please
contact us Monday through Friday
between 8:00 am and 5:00 pm at
818-238-3700 or visit us online at
BurbankWaterAndPower.com/
financial-help
WATER AND
POWERQuestions?