From: Cynthia Cannady
To: Gao, Beilei
Subject: Agenda item #1
Date: Tuesday, June 24, 2025 2:03:20 PM
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June 24, 2025
Municipal Services Committee of the Pasadena City Council
By email
Dear Councilmembers:
Agenda item #1
You can make cost analysis justify anything if the cost data is hidden from the public. This rate study has been conducted with a totally non-transparent process undertaken without coordination with the OSP.
Non-transparency and lack of coordination hide a number of weaknesses in this report.
1. You cannot estimate the cost of implementing a plan when there is no plan yet. We and MSC members pointed this out last year, but PWP assured this Council that they would not begin cost analysis until a plan was settled on. This assurance has been violated.
2. The rate consultants accepted the very rough range of estimates of “incremental cost” from the OSP consultants, and then added their own non-transparent “data” on cost projections for the future.
But the OSP consultants (E3) admit that they did NOT model what costs and rate impacts would be if Pasadena followed business as usual. How is it possible to attribute rate increases if you don’t know the impact of the alternative: a mixed portfolio including carbon resources and unspecified market purchases on rates?
We know that rates are likely to increase (and already have) but the known drivers of cost increases are:
a.) inflation
b.) supply chain problems related to trade, tariffs and war; c.) deferred infrastructure costs (delivery grid repair/modernization) d.) Equipment defects and breakdowns at Glenarm
The rate study appears to lump items c and d together with the cost of carbon free resources.
We also know that money spent on a more resilient system is an investment in our future and will protect ratepayers. That cannot be said of electricity generated by burning gas, whose only legacy is climate disaster.
3. E3 includes the cost of private investment in rooftop solar, the so-called "Total System Cost" metric used by the for-profit utilities to justify their attack on solar. This metric inflates the cost and is inaccurate.
4. E3 does not distinguish between cost data for resident solar and front of meter solar. It also biases the results by assuming PPA style contracts with third parties which add profit into the cost mix.
5. E3 assumes that demand response must be paid for, an assumption that ignores the success of voluntary programs.
6. E3 declined to include the social cost of carbon metric, which is very real in our lives today as we deal with the damage the fires, heat, health impacts and insurance cancellations.
All of these assumptions give the misleading impression that the transition to carbon free electric power will raise rates independently of other factors that have nothing to do with renewable resources.
This study is so misleading that Pasadena Now has already reported that the MSC is being asked to approve rate increases attributable to the Climate Emergency Resolution.
Further, the rate study includes a number of erroneous statements that are significant: one example: the description of the 4 portfolios on page 9 which is incorrect.
Another example: the statement about carbon neutrality in the last sentence, 4 th paragraph,
p. 7 is also incorrect. The hourly matching portfolios do not include carbon neutrality.
We encourage the MSC to return this preliminary rate study report to PWP with an instruction to wait until a plan has been developed, with a timeline and specific action items, before estimating costs. And then to practice transparency with respect to factual assumptions about cost, which does not mean disclosing information after the study is complete.
Cynthia