Cost of Service Study
and Proposed Fiscal
Year 2025-26 & 2026 -
27 Utility Rate
Adjustments
City Council
March 25, 2025
WATER AND
POWER
Cost of Service and Rate-Making
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
2 Electric
3 • State unfunded mandates (SB 35, SB 100,
wildfire mitigation, etc.)
• Increased costs for transmission, capital
costs, and operating costs
• Intermountain Power Project repowered
with natural gas
• Lower than expected load demand
• Prior policy decisions of under-collection &
no rate or insufficient rate increases
Electric Rate Adjustment Drivers
4 Electric Cash Reserves
$ in 000’s
FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30
Reserve
Shortfall $21,490 $35,851 $18,184 $18,260 $ -- 5
Overall Electric
Rate Proposal
• Adjust the overall electric
rate by 9.9% each year for
the next two years
• Implement new rates on
January 1
st
6 Customer Class Rate Plan:
FY 25-26 Increase
Rate Plan:
FY 26-27 Increase
Residential 14.9% 14.8%
Small Commercial 14.9% 14.9%
Medium Commercial 7.0% 6.7%
Large Commercial 6.3% 6.0%
Extra Large Commercial 6.5% 6.2%
Overall System Average 9.9% 9.9%
Rate Adjustment by Customer Class
7 Average Residential Electric Bill Impacts
FY 24-25
Average Apartment/Condo Average Across All Residential Average Single-Family Home Estimated Bill for 345 kwh Estimated Bill for 520 kwh Estimated Bill for 744 kwh $87.95 $138.99 $201.36
$100.65 $158.79 $229.90
$118.53 $182.55 $260.71
+$12.70 +$19.81 +$28.54
FY
24-25
FY
25-26 Type
FY
26-27
+$17.88 +$23.76 +$30.81
8 Residential Electric Bill Comparison
520 kWh
9 Financial Assistance & Ways to Save
Customer Segments Rate Discount One-time Support
Income qualified
age 65+
Lifeline rate or
BUSS discount
• Project Share
• Efficiency
Programs
Disabled or on life
support equipment Life-support rate
• Project Share
• Efficiency
Programs
Income qualified
household struggling
with affordability
BUSS discount
• Project Share
• Payment Plans
• HEAP
• Efficiency
Programs
10 Increased Benefits for Assistance
Programs
Program Requirements Current Benefit Proposed Benefit
Lifeline Rate
Assistance
Low-income qualified
senior customers (62
years and older) or
permanently disabled
40% off electricity,
No 7% UUTax
45% off electricity,
No 7% UUTax
Burbank Utility
Service Subsidy
(BUSS) Program
Low-to-moderate
income qualified
residents
12% discount on
electric service
14% discount on
electric service
Project Share
Low-income qualified
residents who need
temporary assistance
$100 bill credit for
water and electric
$250 bill credit for
water and electric
11 Water
12 Water Rate Adjustment Drivers
• MWD will increase their rates as follows
Implemented 8.5% on January 1, 2025
Proposed 8.5% on January 1, 2026
Proposed 11% on January 1, 2027
Proposed 11% on January 1, 2028
• Increase in MWD meter charges (Fixed Charges)
• Increased capital costs due to maintaining and
modernizing infrastructure
13 Water Cash Reserves
$ in 000’s
FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30
Reserve
Shortfall $7,487 $2,991 $2,216 $2,183 $ --
14 Overall Water
Rate Adjustment
• Increase the overall
water rate by 14%
each year
• Implement new
rates on January 1
st
15 Rate Increases by Customer Class
Customer Type Tiers
Proposed January
1st
2026
Proposed
January 1st
2027
Single-Family Residential
0 to 8 HCF 11.7% 15.1%
9 to 20 HCF 11.7% 15.1%
Over 20 HCF 11.7% 15.1%
Customer Type
Multi-Family 11.7% 15.1%
Commercial & Industrial 11.7% 15.1%
Irrigation 11.7% 15.1%
Temporary Potable 11.7% 15.1%
Private Fire Service 11.7% 15.2%
Recycled Water 11.7% 15.1%
Water Cost Adjustment Charge 9.0% 5.2%
16 Water Availability Charges
<=1”
2”
3”
4”
6”
$68.67 $88.72 $102.12
$172.53 $222.91 $256.57
$291.50 $376.62 $433.49
$612.52 $791.38 $910.88
$19.25 $24.87 $28.63
Current Proposed
25/26
Proposed
26/27
17 Residential Water Bill Impacts
FY 24-25
Small Single-Family with
little turf grass
Medium Single-Family
with native landscaping
Medium Single-Family
with turf grass
Large Single-Family with
pool and turf grass
6,000 Gallons / 8 HCF 9,000 Gallons / 12 HCF 12,000 Gallons / 16 HCF 19,000 Gallons / 26 HCF $52.77 $75.64 $98.51 $160.12
$61.75 $87.01 $112.28 $180.38
$68.85 $96.81 $124.77 $200.36
+$8.89 +$11.37 +$13.76
FY
24-25
FY
25-26 Type
+$20.26
1 Hundred Cubic Feet (HCF) = 748 Gallons
~25% of customers
use less
~50% of customers
use less
~75% of customers
use less
average customer
+$7.10 +$9.79 +$12.49 +$19.98
FY
26-27
18 Multifamily, Commercial, IrrigationFY 24-25
Multifamily Commercial Irrigation
34,000 Gallons / 45 HCF 20,000 Gallons / 27 HCF 48,000 Gallons / 64 HCF $204.02 $159.11 $357.75
$228.09 $183.88 $403.12
$249.94 $204.10 $446.08
+$24.07 +$24.77 +$45.37
FY
24-25
FY
25-26 Type
FY
26-27
+$21.85 +$20.21 +$42.96
50% of customers 50% of customers 50% of customers 19
Residential Water Bill Comparison
Medium home: 12,000 gallons
20 Next Steps:
Implementing Rate Changes
STUDY SESSION
ON RATES WITH
CITY COUNCIL
(MAR. 25)
01 SEND BIG HORN
MAILER FOR
45-DAY NOTICE
OF PUBLIC
HEARING
(MAR. 31)
02 BWP BOARD
MEETING:
RECOMMEND
RATE
ADJUSTMENT
(APR. 3)
03 PUBLIC
HEARING -
REQUEST
COUNCIL
APPROVAL
(MAY 20)
04 IF APPROVED:
IMPLEMENT
ELECTRIC &
WATER RATES
INCREASE
BEGINNING
JAN. 1, 2026
05 21
Townhall Meeting with Stakeholders
• Townhall #1:
• April 23, 2025 , 12:00 – 1:30 PM, BWP Campus
• Townhall #2:
• April 26, 2025 , 10:00 AM – 12:00 PM, Joslyn Center
• Townhall #3:
• May 8, 2025 , 6:00 - 8:00 PM, Community Services
Building – Room 104 (Hybrid)
22 WATER AND
POWERWastewater (Sewer)
Water Reclamation & Sewer Fund 494
City Council
March 25, 2025
PUBLIC
WORKS
Water Reclamation & Sewer Fund 494
Burbank Water Reclamation Public
24 • Regulatory permit requirements (SWRCB, RWQCB)
• Contractual charges from the City of Los Angeles
• Capital improvement projects
• Inflationary impacts on labor, chemicals, materials,
equipment, and electrical costs to operate the BWRP
• Salary increases
Sewer Fund Budget Drivers
25 • Proposing a 6% increase for both FY2025-26 & FY2026-27 • The Single-Family Residential sewer service charges are:
Sewer Fund Rates
26 FY 2025-26 Sewer Rate Comparison
$- $10 $20 $30 $40 $50 $60 $70 $80
Los Angeles
San Diego
Glendale
South Pasadena
Burbank
Pasadena
$67.84
$58.39
$31.60
$30.45
$30.01
$29.01
Proposed increase is $1.70
27 WATER AND
POWERWaste Management
Refuse Collection & Disposal Fund 498
City Council
March 25, 2025
PUBLIC
WORKS
• State and local mandate compliance
• Salary increases
• Programmatic replacement of vehicles and
equipment
• Capital projects
• Funding of landfill reserves
Refuse Fund Budget Drivers
29 • Seeking an 8% increase for both years.
• First increase: July 1, 2025 – Dec 31, 2026 (18 months) • Second increase: Jan 1, 2027 – Dec 37, 2027
• The increases shown are for a 64-gallon single-family cart, which is the most abundant type in the City.
Refuse Fund Rates
30 FY 2025-26 Refuse Rate Comparison
Monthly Single Family Residential
Proposed increase is $3.13
31 CONTACT
Joseph Lillio
Chief Financial Officer
[email protected]
(818) 238-3723 office
John Molinar
Assistant Public Works Director –
Streets and Waste Management
[email protected]
(818) 238-3919 office
Stephen Walker
Assistant Public Works Director –
Wastewater Systems
[email protected]
(818) 238-3804 office
32