Cost of Service Study and
Proposed Fiscal Year
2025-26 & 2026 -27 Utility
Rate Adjustments
City Council
May 20th, 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
• Historical rate evaluation practices did not
keep pace with operational and capital
needs
Electric Rate Adjustment Drivers
4 Example #2
• Substation Buildout: $40-50 million in early
2025. May exceed $65 million with the
federal tariffs. In 2019, the Ontario substation
costs were significantly less at $17 million.
Electric Rate Adjustment Drivers
5 Example #3
• Equipment: Cable costs have nearly doubled
since 2019 while power transformer prices
have increased by around 75%.
Example #1
• Capital/Infrastructure Projects: BWP is
budgeting more than $70 million this
upcoming fiscal year (2025/26) for power
delivery infrastructure improvements.
Electric Cash Reserves
$ in 000’s
FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30
Reserve
Shortfall $ -- $17,542 $595 $ -- $ -- 6
Overall Electric
Rate Proposal
• Adjust the overall electric
rate by an average of 9.9%
each year for the next two
years
• Implement new rates on
January 1
st
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 and
either
age 65+ or disabled
Lifeline rate or
BUSS discount
• Project Share
• Efficiency
Programs
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
• The Metropolitan Water District of Southern California (MWD) will increase their overall 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 Example #1
• Reservoir Replacement: Reservoir #2 built in
1932 is operating at half capacity due to leaks
and structural defects. It will cost nearly $24
million to replace.
Water Rate Adjustment Drivers
14 Example #2
• Imported Treated Water: The cost for
imported treated water, has increased up
to 21% in 2026 compared to 2024.
Water Cash Reserves
$ in 000’s
FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30
Reserve
Shortfall $4,766 $ -- $290 $6,056 $ -- 15
Overall Water
Rate Adjustment
• Increase the overall
water rate by 14%
each year
• Implement new
rates on January 1
st
16 Water Availability Charges
<=1”
2”
3”
4”
6”
$68.67
$172.53
$291.50
$612.52
$19.25
Current Proposed
2026
Proposed
2027
17 $88.72
$222.91
$376.62
$791.38
$24.87
$102.12
$256.57
$433.49
$910.88
$28.63
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
Average customer 19Average customer Average customer
Residential Water Bill Comparison
Medium home: 12,000 gallons
20 21
Financial Assistance
Programs
Resources to Help
You Save
WATER AND
POWERSewer
Water Reclamation & Sewer Fund 494
City Council
May 20th, 2025
PUBLIC
WORKS
Water Reclamation & Sewer Fund 494
Burbank Water Reclamation Plant (BWRP)
23 • Regulatory permit requirements (SWRCB, RWQCB)
• Contractual charges from the City of Los Angeles
• Capital improvement projects
• Inflationary impacts on chemicals, materials, equipment, and other costs to operate and maintain the BWRP and
sewer system Citywide
Sewer Fund Budget Drivers
24 • Proposing a 6% increase for both FY2025-26 & FY2026-27 • The Single-Family Residential sewer service charges are:
Sewer Fund Rates
25 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
26 WATER AND
POWERRefuse Services
Refuse Collection & Disposal Fund 498
City Council
May 20th, 2025
PUBLIC
WORKS
• State and local mandate compliance
• Increased operations and maintenance costs
• Programmatic replacement of vehicles and
equipment
• Capital projects
• Funding of landfill reserves
Refuse Fund Budget Drivers
28 • 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
29 FY 2025 -26 Refuse Rate Comparison
Monthly Single Family Residential
30 Proposed increase is $3.13
Recommendation
Staff seeks Council’s approval with the utility’s
proposed FY 2025-2026 and FY 2026-2027 rate
increases for: average electric rate increase of
9.9% to go into effect January1, 2026, and 2027;
average water rate increases of 14% to gointo
effect January 1, 2026, and 2027; 6% each year for
sewer and 8% each year for refuse going into effect
on July 1, 2025, and January 1, 2027.
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