AGENDA
MUNICIPAL SERVICES COMMITTEE
REGULAR MEETING NOTICE
SEPTEMBER 24, 2024
PUBLIC MEETING 4:00 P.M.
MEMBERS
Felic
ia Williams, Chair, District 2
Tyron Hampton, Councilmember, District 1
Justin Jones, Councilmember, District 3
Jason Lyon, Councilmember, District 7
STAFF
David Rey
es, Interim General Manager
Lisa Hosey, Assistant City Attorney
Tamer Sabha, Recording Secretary
MISSION STATEMENT
The City of Pasadena is dedicated to delivering exemplary municipal services, responsive to our entire community and consistent
with our history, culture and unique character.
In compliance with the Americans with Disabilities Act of 1990, Assistive Listening Devices are available from the City Clerk’s Office with a 24-hour advance notice.
Please call (626) 744-4124 to request use of a listening device.
Language translation services are avail able for this meeting by calling (626) 744-4124 at least 24 hours in advance.
Hab
rá servicio de interpretación disponible para éstas juntas llamando al (626) 74
4-4124 por lo menos con 24 horas de anticipación.
Items on the agenda may not be called in order listed.
Agendas and supporting documents are available on the Internet at http://ww5.cityofpasadena.net/commissions/city-council-municipal-services-committee/ Materials related to an item on this Agenda submitted to the Municipal Services Committee after distribution of the agenda packet will be posted online and listed as: “Supplemental Agenda Material Received after the Posting of the agenda”.
PUBLIC COMMENT AT THE MUNICIPAL SERVICES COMMITTEE MEETING FOR SEPTEMBER 24, 2024, AT 4:00 P.M. WILL BE ACCEPTED IN-PERSON AND BY VIDEOCONFERENCE/TELECONFERENCE.
Link to City Meeting Policy:
cityofpasadena.net/CityCouncilMeetingPolicy
TO VIEW A LIVE STREAM OF THE MEETING:
http://pasadena.granicus.com/MediaPlayer.php?publish_id=9 AND
WWW.PASADENAMEDIA.ORG
In order to facilitate public participation at meetings the City will accept public comment in the following manner:
1. Whether participating in-person or virtually at the meeting, members of the public may provide public comment by submitting a speaker card prior to the start of public comment on that item, at the following webpage:
www.cityofpasadena.net/commissions/public-comment/
If a public comment speaker wishes to speak on more than one agenda item, please indicate which items on the online form (multiple item speakers will be handled according to the process posted on the agenda and as specified in the City meeting policy). Public comments are limited to 3 minutes each, and the Chair and Committee may limit this time if reasonable under the circumstances.
2. In-person Meeting Participation: Complete an online speaker card at the following website: www.cityofpasadena.net/commissions/public-comment/ After submitting a public speaker card, members of the public may attend the meeting in-person by coming to the Pasadena City Council Chamber, Room S249 at City Hall at the date and start-time of the posted meeting.
Virtual Meeting Participation: For virtual participants, you may attend by connecting to the meeting using a computer, other electronic device, or by telephone. Please review the agenda to identify the published start time for the meeting and connect to the meeting just prior to, or at the start of the meeting.
To participate in public comment for an item and to be recognized to speak, it is required that the speaker login to the meeting using the same name or telephone number used on the Speaker Card form. This will allow City staff to locate and promote the speaker into the meeting when it is time for their public comment.
Participants’ phone calls to the Committee meeting will be recorded as part of the Committee meeting. By staying on the line and making public comment during the Committee meeting by phone, you are agreeing to have your phone call recorded. Following is the connectivity information for virtual participation:
Computer or electronic devices, join the meeting at: cityofpasadena.net/cczoom Telephone only dial-in: 1-669-900-6833, Meeting ID: 161 482 446
3. Speaker Card Help Line: If a public comment speaker needs assistance in completing a speaker card, please call the City Clerk’s Office at: (626) 744-4124. The help line will open 30 minutes prior to the posted start time of the meeting.
4. Members of the public may submit correspondence of any length prior to the start of the meeting, at the following email address:
Correspondence will be forwarded to the Committee prior to the start of the meeting, posted online, and made part of the legislative record for the item.
LIVESTREAM WITH CAPTIONING IS AVAILABLE AT WWW.PASADENAMEDIA.ORG, AND ALSO AT WWW.CITYOFPASADENA.NET/COMMISSIONS/AGENDAS,
IF YOU NEED A REASONABLE MODIFICATION OR ACCOMMODATION PURSUANT TO THE
AMERICANS WITH DISABILITIES ACT
BECAUSE YOU ARE UNABLE TO PARTICIPATE ELECTRONICALLY AS SET FORTH ABOVE, CONTACT THE CITY CLERK’S OFFICE
AS SOON AS POSSIBLE AT (626) 744-4124 OR [email protected].
CITY OF PASADENA
REGULAR MEETING OF
THE MUNICIPAL SERVICES COMMITTEE
SEPTEMBER 24, 2024
PUBLIC MEETING: 4:00 PM
PASADENA CITY HALL, COUNCIL CHAMBER
100 NORTH GARFIELD AVENUE, ROOM S249
NOTICE IS HEREBY GIVEN that the regular meeting of the Municipal Services Committee will be held on Tuesday, September 24, 2024, at 4:00 p.m., to discuss matters on the attached agenda.
I HEREBY CERTIFY that this agenda in its entirety, was posted on the Internet at https://www.cityofpasadena.net/commissions/city-council-municipal-services-committee/ and on the Council Chamber Bulletin Board, Room S249, and the Bulletin Board in the rotunda area; City Hall, 100 North Garfield Avenue, this September 19th, 2024, by 6:00 p.m. and that copies hereof were faxed, emailed or delivered to each member of the City Council and to each local newspaper of general circulation, radio or television station requesting notice in writing, all of which recipients are identified on the distribution herein below.
Susana Castro
DISTRIBUTION:
MSC Committee Members Central Library General Manager Pasadena Weekly City Council City Clerk Director of Planning and Permitting Pasadena Star-News City Manager Director of Public Works Los Angeles Times Pasadena Now City Attorney Public Information Officer La Opinion Pasadena Journal
In compliance with the Americans with Disabilities Act of 1990, listening assistive devices are available from the City Clerk's Office with a 24-hour advance notice.
Please call (626) 744-4124 to request use of a listening device. Language translation services may be requested with 24-hour advance notice.
Habra servicio de interpretacion disponible para estas juntas llamando al (626) 744-4124 por lo menos con 24 horas de anticipación.
REGULAR MEETING AGENDA
MUNICIPAL SERVICES COMMITTEE
SEPTEMBER 24, 2024
Public Meeting: 4:00 P.M.
Council Chamber, Pasadena
City Hall 100 North Garfield Avenue, Room S249
APPROVAL OF MINUTES
August 27,
2024 (Regular Meeting)
1. ELECTRIC RATE STUDY INTRODUCTION
2. AN ORDINANCE AMENDING PASADENA MUNICIPAL CODE CHAPTER 13.04 TO
INCREASE ELECTRIC UTILITY ASSISTANCE PROGRAM MONTHLY BENEFITS AND RELAT
ED CHANGES
PUBLIC MEETING - 4:00 P.M.
ROLL CALL
PUBLIC COMMENT
INFORMATION ONLY
ADJOURN
NEW BUSINESS
1 01 08/27/2024
CITY OF PASADENA
MUNICIPAL SERVICES COMMITTEE MINUTES
PASADENA CITY HALL
100 NORTH GARFIELD AVENUE
CITY HALL COUNCIL CHAMBER – S249
AUGUST 27, 2024
MEETING
OPENING The Chair called the meeting of the Municipal Services Committee to order at 4:23 p.m.
ROLL CALL:
Staff:
Councilmember Felicia Williams, Chair
Councilmember Tyron Hampton (arrived at 4:45 p.m.)
Councilmember Justin Jones
Councilmember Jason Lyon
David Reyes, Acting General Manager of Water and Power
Kelly Nguyen, Assistant General Manager of Water and Power Joaquin Siques, Transportation Director
Christopher Page, Project Manager
Lisa Hosey, Assistant City Attorney
Tamer Sabha, Recording Secretary
PUBLIC COMMENT Philippa Richter, Pasadena resident, advocated for a City-wide assessment to identify public areas where solar panels could be implemented.
APPROVAL OF MINUTES It was moved by Councilmember Lyon, seconded by Councilmember Jones, to approve the minutes of June 25, 2024, July 9, 2024, July 23, 2024, and August 13, 2024 as submitted. ( Motion unanimously approved) (Absent: Councilmember Hampton)
INFORMATION ONLY METROPOLITAN WATER DISTRICT UPDATE BY CYNTHIA KURTZ
Cynthia Kurtz, from the Metropolitan Water District Board of Direct ors, provided an update on the District’s current activities, their business model, upcoming projects, and responded to questions.
Following discussion, on the order of the Chair, and by consensus of the Committee, the information was received and filed.
Councilmember Hampton
arrived at 4:45 p.m.
OPTIMIZED STRATEGIC PLAN UPDATE BY E3
David Reyes, Acting General Manager of Water and Power, provided introductory remarks on the item. Kelly Nguyen, Assistant General Manager, provided a brief background on the item and introduced Nick Schlag, partner with Energy+Environmental Economics (E3), who gave a status update on the development of the Optimized Strategic Plan for Pasadena Water and Power. Mr. Schlag reported on the balance of carbon-free energy resources, a project timeline for the optimized strategic plan, and the Technical Advisory Panel used to provide community feedback on the plan.
Councilmember Hampton suggested adding two more Pasadena residents to the Technical Advisory Panel.
2 02 08/27/2024
The following individuals advocated for the City to increasingly incorporate rooftop solar and provide more opportunities/assistance for the community to convert to solar energy, and/or provided various comments:
Cynthia Cannady, representing Pasadena 100
Wes Reutimann, Pasadena resident
Claudia Funke, Pasadena resident
Davis Weeshoff, representing Pasadena Audubon Society
Joe Feinblatt, Pasadena resident
Yadi, Pasadena resident
Lauren Cor y, representing Pasadena 100 , advocated for homeowners to be able to install up to twice their current need of solar batteries.
Recording Secretary Sabha reported that two letters providing comments relating to this item were received by the City Clerk’s Office, distributed to the committee, posted online, and made part of the public record for the item.
In response to Councilmember Jones’ inquiry regarding the difficulties of installing solar, Acting General Manager Reyes noted that installing solar requires an electrical permit which may take some time with contractors; he noted that the Water and Power Department is working with the Planning Department to streamline a n online permit process.
Councilmember Hampton added that the process to install solar has greatly improved over the past two years and thanked staff for addressing cumbersome requirements.
Councilmember Hampton advocated for City staff to look into developing a community solar hub or finding alternatives that ensure extra power is available when needed.
Councilmember Williams advocated for City staff to provide residents with thorough information regarding the solar installation process to ensure that they are well informed, especially when picking a contractor for their project.
Following discussion, on the order of the Chair, and by consensus of the Committee, the information was received and filed.
NEW BUSINESS APPROVAL OF A PILOT PROGRAM TO ALLOW PERSONAL
DELIVERY DEVICES TO OPERATE ON CITY SIDEWALKS AND
PEDESTRIAN PATHS
Christopher Page, Economic Development Project Manager, gave a PowerPoint presentation on the benefits of Personal Delivery Devices (“PDD”) program, similar programs in other cities, and the community outreach conducted, and responded to questions.
In response to Councilmember Lyon’s inquiries regarding the logistics of the PDD s, Project Manager Pa ge, described how participating restaurants would operate the devices and how many devices are 3 03 08/27/2024
limited to each restaurant and area. He also noted that the PDDs are not allowed to block public right of ways or ADA access.
In response to Councilmember Hampton’s inquiry regarding prohibited items, Project Manager Page confirmed that alcohol and cannabis are among products on the list of prohibited items.
Joaquin Siques, Director of Transportation, reported th at City staff will work on routing the devices to alleyways in central areas where sidewalk space is limited.
Councilmember Hampton suggested that the PDDs could be utilized for more than deliveries; he stated that if the PDDs are equipped with cameras and surface scanning abilities, it could report street/sidewalk impediments to City staff to address such matters.
Councilmember Lyon cautioned that the PDDs may impact jobs and their ability to record may raise privacy concerns.
Carl Hanse n, representing Coco Robotics, shared some
background on the PDD company and their initiatives.
Yadi, Pasadena resident, expressed concerns relating to PDDs and the decrease in parking and shopping revenues, privacy concerns, and obstructive impacts on traffic.
Following discussion, it was moved by Councilmember Jones, seconded by Councilmember Lyon, to direct City staff to return with additional information regarding PDDs, relating to data collection, the impact on jobs, the vendor selection process, and the complaint process at the next Municipal Services Committee meeting . ( Motion unanimously approved) (Absent: None)
ADJOURNMENT On the order of the Chair, the meeting of the Municipal Services Committee was adjourned at 5:57 p.m.
ATTEST:
____________________
Christine Soo
Recording Secretary
__________________________
Councilmember Felicia Williams, Chair
Municipal Services Committee
4 ITEM #1
5 PASADENA WATER AND POWER
MEMORANDUM
September 24, 2024
To: Municipal Services Committee
From: David M. Reyes
Interim General Manager
Subject: Electric Rate Study Introduction
This report provides information to the Municipal Services Committee (“MSC”) about the status of Pasadena Water and Power’s (“PWP”) Electric Rate Study.
BACKGROUND:
On April 23, 2024, the MSC recommended a contract with NewGen Strategies and Solutions, LLC (“NewGen”) for Electric Rate Study services to the City Council. On May 13, 2024, the Pasadena City Council approved the contract with NewGen.
NewGen is a management and economic consulting firm specializing in serving the utility industry. NewGen primarily serves public sector utilities and provides expertise in load forecasting, utility cost-of-service and rate design studies, financial feasibility studies, municipalization efforts, depreciation and appraisal studies, litigation support for state and federal regulatory proceedings, utility financial planning, and community engagement for electric, water, wastewater, solid waste, and natural gas utilities. NewGen has recently completed multiple electric rate studies in Southern California, including Glendale, Anaheim, and Riverside.
The Electric Rate Study aims to evaluate and develop a recommended rate plan that aligns with established Council policies and legal constraints. The objective is to collect sufficient revenue while also supporting both community and utility goals. This is achieved by sending price signals to customers that convey important information and incentivize behaviors that are beneficial for both the community and the utility. With the use of empirical data and NewGen’s expertise of industry best practice, PWP will explore rate structures and pricing incentives that will accommodate evolving electric industry trends and customer practices.
The study is comprised of several phases, the first phase is the data gathering for the cost- of-service portion and building the financial model, which will serve as the primary tool for analysis. Future phases include a comprehensive public participation process, rate design, 6 Electric Rate Study Introduction
September 24, 2024
scenario analysis and ultimately, a recommendation to City Council for rate ordinance adoption.
Project Overview
With this informational item, PWP is pleased to take the next steps in the electric rate study process with the first phase of cost allocations (or cost-of-service study) as well as building the foundational tool which will be used in the rate-making process (i.e. the financial model).
The Electric Rate Study will be aligned with the Optimized Strategic Plan (“OSP”). The OSP intends to outline power supply actions needed to achieve the City’s goal of sourcing 100% of electricity from carbon-free sources by the end of 2030. The outputs of the studies that comprise the OSP will be inputs to the financial model. Other inputs to the Electric Rate Study will include economic metrics combined with historical revenue and expenses, Council adopted operating and capital budgets, and Council policy parameters or directives to best inform future financial status of the Power Fund. Engagement with the community is also a critical piece of the project’s scope. PWP will study and assess how to best convey information and incentivize behavior in a way that uniquely fits Pasadena’s customers.
Next Steps
The electric system data collection efforts are near completion and the development of the financial model and cost-of-service analysis are underway. Staff plans to return to MSC early this fall to recommend removing outdated provisions in the Pasadena Municipal Code to prevent confusion during the study and to simplify future ordinance changes. In addition, staff plans to return with an informational item regarding the study’s plan for public participation. Progress of the Electric Rate Study will be reported to MSC periodically throughout the project.
7 © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC
ELECTRIC RATE STUDY
PHASE ONE
MSC
September 24, 2024
8 © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC
NEWGEN STRATEGIES AND SOLUTIONS, LLC
2 OUR FIRM
12 Locations
nationwide
Be a consulting company that makes a
difference for our clients, our employees, and
in our communities.
2012 management and economic consulting
firm created by consultants who are
dedicated to our client’s mission and
recognized as experts in our respective
fields of service.
established
61 employees
OUR CLIENTS
OUR VALUES
9 © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC
NEWGEN CALIFORNIA EXPERIENCE
3 Working with many California public power
entities:
• Assisted SVP with detailed cost of service and rate design analysis (2020).
• Completed comprehensive electric cost of service study for Riverside (2024).
• Completed electric cost of service analyses for Port of Oakland for Seaport and Airport operations (2024).
• Completed detailed analysis for Glendale Water and
Power (2023).
• Analytical rate support and data analysis for the majority of the California Community Choice Aggregators (CCAs)
(ongoing).
10 Procurement
Implementation
Consultant
Selection/Contract
Study / Financial Modeling
Public Hearings /
Adoption
Public Participation
Rate Design and Impact Analysis
Rate Implementation
ELECTRIC RATES ROADMAP
2024 2025 2026
Public
Participation
Cost of Service Study
Rate Design
Recommendation
/Budget Adoption
You are here
11 5NEWGEN STRATEGIES AND SOLUTIONS, LLC
Rate Study
Process:
Revenue
Requirement
STEP 1
STEP 2
STEP 4
STEP 3
STEP 5
Determine the revenue
requirements of the utility
Unbundle costs by functions and
services (power supply,
transmission, distribution, etc.)
Classify costs (demand, energy,
customer costs, etc.)
Allocate cost among customer
classes
Design rates
Revenue Requirement
Cost Allocation
5 12
© 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC
FINANCIAL FORECAST – SCENARIO ANALYSIS AND OPTIMIZATION Financial Forecast Optimization –
Manage/Adjust the Following:
6 PWP’s Financial Metrics measure financial
sustainability and health. These will directly
impact the cost of debt and credit agencies
ratings.
Debt Rate
Changes
Prioritize
Capital
Cash
Reserves
Monitor Key Financial Metrics:
• Debt Service Coverage Ratio
(PWP Targets and Bond
Requirements)
• Days Cash on Hand (Cash Reserves)
Identify
optimal mix to
meet PWP
goals
13 © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC
FINANCIAL FORECAST AND REVENUE REQUIREMENT
7 Test Year Revenue Requirement:
Total costs to provide electric services to customers over the study period (e.g., 2026–2030). Foundation of the COS and based on forecast.
Base Year Financials
Budget Year 2025
Costs
Adjustments and
Evaluations
Forecast 2026–2030
Debt/Rate/CIP
Amounts Set
Test Year Revenue
Requirement
(Avg. Costs for
2026–2030)
14 © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC
FULL COST OF SERVICE PROCESS
8 Step 1 Step 2 Step 3 Step 4
Illustrative – not PWP classes.
15 © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC
COS RESULTS VS. CURRENT REVENUES
9 Illustrative – not PWP COS or classes.
16 © 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC
GOING FROM COST OF SERVICE TO RATE DESIGN
10 Cost of Service
• Revenue Requirement
• Functionalize
• Classify
• Allocate
• Guide for cost-based
rates
“Rate Making”
• Policy Decisions
• Incentivize behavior
• Industry practice is to
move towards COS
Rates do not always
match COS; prop 26
compliance
Rates
• Collect sufficient revenue
• Support community goals
• Support utility goals
• Price signal to customers
• Convey information
• Change behavior
17 11NEWGEN STRATEGIES AND SOLUTIONS, LLC
ELECTRIC
RATE STUDY
UP NEXT
• Ordinance legacy items clean-up
• Information on public engagement plan
11 18
© 2024 NEWGEN STRATEGIES AND SOLUTIONS, LLC
2029
Plan Integrations and Dependencies
Task May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Optimized Strategic Plan
Preparatory Studies
Portfolio Development
Cost Impacts
Optimized Plan
Community Partners Engagement
Electric Rate Study
Preparatory Analysis
Rate Development
Rate Adoption
Community Partners Engagement
Operating Budget Development
Capital Budget Development
2027Power Delivery Master Plan
2028Integrated Resources Plan
2029
Annually with 5-year forecasts
Annually with 5-year plan
Where relevant, all planning efforts will
work in concert to leverage the
available resources and use the best
available information for decision-
making.
PWP will coordinate closely to avoid
confusion to customers.
FY 2024 FY 2025 FY 2026
19 ITEM #2
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22 23
24 25
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