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MEMORANDUM
TO:Honorable Mayor and City Council
FROM:David M. Reyes, General Manager, Water and Power
DATE:December 15, 2025
SUBJECT: OPTIMIZED STRATEGIC PLAN
MUNICIPAL SERVICES COMMITTEE RECOMMENDATION:
On November 5, 2025, the Municipal Services Committee ("MSC") recommended that the City Council adopt and approve PWP's OSP, with five revisions:
1. Clarify that the goal of the OSP is to reach carbon-free on an hourly basis, supporting Resolution 9977;
2. Increase the goat for Additional Local Solar Resources from 50 Megawatts ("MW") 70 MW with at least 50 MW coming from PWP customers;
3. Include a timeline for incentives, initiatives, and an education campaign to increase the adoption of local solar;
4. Remove references to proposed changes to Net Energy Metering ("NEM"); and
5. Provide additional narrative regarding the viability of hydrogen as an emerging technology.
The recommended revisions provided by the MSC have been incorporated into the attached Optimized Strategic Plan. In addition to the changes to the OSP, the MSC also asked staff to return with a discussion on staffing and implementation; an increase to the maximum solar capacity from 150 to 200% of annual usage; consideration of Community Solar Projects within the Utility's annual 5-Year Capital Improvement Program; and a discussion of programs funded by the Public Benefit Charge.
Meeting of: 12/15/2025
Agenda Item No. 18
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Agenda Report
November 17, 2025
TO: Honorable Mayor and City Council
THROUGH: Municipal Services Committee (November 5,2025) FROM: Water and Power Department
SUBJECT: APPROVE THE OPTIMIZED STRATEGIC PLAN ESTABLISHING AN
ACTION PLAN TO ACHIEVE THE GOALS SET FORTH BY CITY
COUNCIL-ADOPTED RESOLUTION 9977
RECOMMENDATION:
It is recommended that the City Council:
1) Find that this action is statutorily exempt from the California Environmental Quality Act (CEQA) pursuant to State CEQA Guidelines Section 15262; and 2) Adopt and approve Pasadena Water and Power's ("PWP") Optimized Strategic Plan ("OSP"), Attachment 1, outlining actionable steps to meet the goals set forth by City Council-adopted Resolution 9977.
MUNICIPAL SERVICES COMMITTEE RECOMMENDATION:
On June 24, 2025, the Draft OSP Annotated Outline was presented to the Municipal Services Committee ("MSC") which summarized the OSP technical analysis, development process and synthesis into an action plan that includes implementation priorities and activities to achieve the objectives of City Resolution 9977. The MSC received and filed the report advising staff to pursue future energy resource portfolios with the aim of serving 100% of the City's energy needs from carbon-free sources on an hourly basis, to accelerate the development of local resources, and to preserve the Glenarm Power Plant while limiting its operations for local reliability and to support the greater California electric grid.
EXECUTIVE SUMMARY:
On January 30, 2023, the City Council adopted Resolution 9977 which declares that climate change is an emergency that threatens the health and welfare of the city, region, state, nation, and the environment.
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1 MEETING OF.12/15/2025AGENDA ITEM NO.18
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Commits the City to environmental stewardship and continued leadership in sustainability;
• Sets forth a policy goal to source 100% of Pasadena's electricity from carbon- free sources by the end of 2030;and
Directs the City Manager to plan multiple approaches to transition to this policy goal and optimize for affordability, rate equity, stability, and reliability of electricity while achieving this goal.
Subsequently, the City Council (through MSC), authorized the City Manager to enter into a contract with Energy and Environmental Economics, Inc. ("E3") to assist in the development of an OSP to achieve these policy goals. The City Manager and the General Manager of PWP established a Technical Advisory Panel ("TAP") comprised of community stakeholders to assist in the development of the OSP and to provide transparency in the process.
Collaborative and Transparent Process
A key theme in the development of the OSP has been extensive outreach, coordination, and collaboration among PWP staff, stakeholder groups, and the Pasadena community.
PWP has shared and discussed the development and analysis of the multiple OSP case studies across a variety of platforms, including TAP meetings, regular updates to the MSC, Environmental Advisory Commission ("EAC"), and City Council, community meetings were also presented, including an Open House Event which invited the general community to share priorities and provide input.
Additionally, because stakeholder and community input have been crucial considerations in the development of the OSP, PWP provided a public comment period from October 6 through October 27, 2025, during which community members could review, share feedback, and ask questions. PWP staff were available for office hours to meet with community members on specific questions or concerns.
Documents representing the full OSP process, including meeting summaries, Agenda Reports, and presentations are available on the OSP website at httDs://DWD.citvofDasadena.net/optimized-strateciic-plan/.
Technical Advisory Panel
The TAP was comprised of broad segment of community stakeholders:
Lauren Siegel, Chair, Environmental Advisory Committee
Sam Berndt, Member, Pasadena 100
Cynthia Cannady, Member, Pasadena 100
Paul Little, President, Pasadena Chamber of Commerce
David Kang, Associate Vice President for Facilities, California Institute of Technology
Dr. Stephen Low, Professor of Computing and Mathematical Sciences and Electrical Engineering, California Institute of Technology •
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Approval of the Optimized Strategic Plan
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David Coher, Resident
The meetings covered a variety of methodologies, technical studies, and conclusions detailed in presentations. The City is appreciative of TAP members for providing their valuable time and input, which was instrumental in shaping the OSP. Below, Figure 1, summarizes the meeting dates of the extensive outreach, coordination, and collaboration between PWP, stakeholder groups, and the Pasadena community.
Figure 1: Optimized Strategic Plan Community Engagement Calendar Optimized Strategic Plan - Community Engagement Calendar Outreach, coordination, and collaboration between PWP, policymakers, stakeholder groups, and the Pasadena community 2024
Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec Pasadena City Council:
Municipal Sen/ice Committee:
Environmental Advisory Commission
Technical Advisory Panel
Pasadena Community Meetings |
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Community
Engagement Calendar
2025
Jan | Feb | Mar | Apr ] May | Jun I Jul I Aug | Sep | Oct | Nov | Dec Pasadena City Council
Municipal Sen/ice Committee
Environmental Advisory Commission
Technical Advisory Panel
Pasadena Community Meetings
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Strategic Plan Development
The OSP outlines a range of pathways and action plans to pursue the goals of Resolution 9977, showcasing the key steps and future decision points that will best position Pasadena to achieve its goal to source all electricity from carbon-free sources by the end of 2030, while maintaining reliability and limiting cost impacts to customers.
The OSP highlights opportunities to leverage local solar and storage development, procure external renewable and storage resources, invest in transmission and distribution infrastructure, and develop customer programs to facilitate the transition to Pasadena's carbon-free goal.
The OSP technical analysis developed multiple case studies to explore all pathways to achieve Resolution 9977 goals and inform the development of planning targets. The OSP produced seven case studies exploring different options to meet 100% of Pasadena's energy needs with carbon-free sources by the end of 2030. While there is no minimum threshold for a specific type of resource, a diverse resource mix plays a vital role in this transition. Maintaining flexibility and adaptability as PWP pursues the planning targets set forth in the OSP will be critical to the achievement of all goals as new technologies emerge, customer preferences evolve, and the cost and availability of resources shifts.
As part of its underlying technical analysis, the OSP explored portfolios designed to meet 100% annual carbon-free goals and 100% hourly carbon-free goals. The 100% Approval of the Optimized Strategic Plan
November 5, 2025
annual portfolios focus on matching the total amount of electricity used over a year with an equal amount of clean energy generated over that year. In contrast, the 100% hourly portfolios aim to power every hour of electricity use with carbon-free sources, ensuring clean energy is available and used in real time.
Clean Energy Tracker
To track Pasadena's progress on key clean energy targets and milestones outlined in the 2023 Power Integrated Resource Plan (IRP) and OSP, PWP has launched a Clean Energy Tracker (httDs://pwp.citvofpasadena.net/clean-enerav-tracker/) that is continuously updated. The Tracker measures Pasadena's compliance with California mandates, carbon-free generation percentages, and average hourly matching of clean energy demand.
BACKGROUND:
Pasadena has consistently outpaced State mandates for renewable energy, producing energy resource portfolios in its planning studies that envision more aggressive pathways towards decarbonization than required. Furthering this commitment, on December 11, 2023, the Pasadena City Council unanimously approved PWP's 2023 Power IRP, a 25-year planning roadmap to provide the local community with safe, reliable, and environmentally responsible electricity services at competitive rates. In addition to meeting CEC's IRP requirements, the 2023 Power IRP also incorporates Resolution 9977.
As part of the IRP approval, the City Council requested the development of an OSP to define and outline actions needed to achieve the goals of Resolution 9977. It was further recommended that the OSP would be created in collaboration with a consultant experienced in green energy to ensure a feasible plan for meeting Pasadena's ambitious targets. Accordingly, the City Council approved the reengagement of E3, an industry leader in clean energy policy that provided technical review services for the 2023 IRP and has a good understanding of Pasadena's clean energy goals.
Plan Development Process
The OSP development process and workflow involved a series of analytical studies using state of the art power system planning models. The 3-phase scope of work included nine studies that resulted in an optimized plan for achieving carbon-free goals. n
Approval of the Optimized Strategic Plan
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Phase 1
Preparatory Studies
Identify and characterize alt
potential resource options
Distributed Solar
and Storage
Figure 2: OSP Scope of Work
Technical Analysis
Phase 2
Portfolio Development
Use detailed power system
modeling to construct multiple
portfolios that meet clean
energy goals and maintain
reliability
Phase 3
Impact Assessment
Calculate cost metrics;
Identify feasibitity concerns,
dependencies, and risks of
each portfolio
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Long-Term
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Cost Impacts
Production Cost
Modeling
Distribution
System Analysis
Action Plan/
Final Report
The findings of the independent analytical studies provided the foundational data and analysis to help guide further actions needed to transform PWP's energy resource portfolio while maintaining reliability and limiting cost impacts to customers.
The completion of the technical analysis was synthesized into the development of a OSP action plan and final report which highlight the diverse mix of local solar and storage, external renewable resources and storage, investments in transmission and distribution infrastructure, and customer programs that can facilitate to the achievement of Resolution 9977's goals.
Key Components of the Optimized Strategic Plan
PWP is pursuing the "100% Hourly Accelerated Local Resources Portfolio," while maintaining reliability and minimizing costs to ratepayers. Pasadena's hourly carbon- free goal continues to rank among the most ambitious in the nation and requires a flexible, adaptive action plan that drives progress while minimizing potential risks to public health, safety, and security. Progress must be steady but also cautious, using a phased-in approach to resource investment and considering evolving technologies and market conditions. Most importantly, it requires rigorous and ongoing monitoring, followed by diligent evaluation at the 2028 Waypoint to objectively assess the progress made and associated impacts, so that required actions or changes can be incorporated in the 2028 IRP.
The OSP reaffirms Pasadena's commitment to a clean energy future and presents a strategy centered on actions included in the following five pillars, shown below in Figure 3:
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Approval of the Optimized Strategic Plan
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Figure 3: Pillars of the Optimized Strategic Plan
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Prioritize affordabilityand
equity to serve our diverse
community
Equity and affordability are core objectives of Resolution 9977. PWP remains committed to keeping energy bills affordable and ensuring that the incremental costs to transition to carbon-free electricity are allocated fairly among all customers and customer classes.
To ensure an equitable transition to carbon-free energy, PWP will prioritize the needs of the entire Pasadena community, including low-income and disadvantaged communities, by integrating equity and affordability into all phases of planning and implementation.
By partnering with community-based organizations and engaging directly with residents, PWP will create solutions that enhance local resilience and ensure that all community members share in the benefits of a clean energy future.
Approval of the Optimized Strategic Plan
November 5, 2025
In addition, as a community-owned utility, PWP is committed to engaging with the community and developing partnerships to advance decarbonization and to find equitable solutions. Collaboration and public engagement are critical to achieving the goals of Resolution 9977. The OSP highlights opportunities to raise awareness through outreach and marketing, including collaborating with major customers and key accounts that share a common commitment to sustainability.
Implementation Roadmap
To achieve goals, the OSP establishes a robust Action Plan ("Plan") that includes the procurement of new utility-scale clean energy contracts; development of local solar and storage on city-owned property; customer programs, outreach, and marketing campaigns; and pilot projects showcasing new and emerging technologies. These initiatives will build upon the current progress PWP has already established with planned actions that include modernization of power infrastructure and phase out of fossil fuel resources.
A major component of the Plan is to rapidly scale proven carbon-free technologies by expanding carbon-free energy through renewable and storage projects. By early 2026, the Plan recommends issuing competitive solicitations for new utility-scale resources and development of solar and battery storage on City-owned properties. It also recommends development of new incentives, outreach, and financing options that support customer rooftop solar efforts.
To help customers use energy more efficiently and support grid resilience, the Plan recommends developing new demand response programs that incentivize the shifting of energy use to times when renewable power is most available. Such programs will be enabled by the planned Advanced Metering Infrastructure ("AMI") and time-of-use rates.
The Plan also identifies opportunities to reduce reliance on the Glenarm Power Plant through expansion of energy import capabilities, distribution system upgrades, and ongoing evaluation of emerging technologies such as long-duration storage. To provide accountability and transparency, PWP plans to provide annual updates on Glenarm's operations and to reassess options for a long-term transition strategy at the 2028 Waypoint identified in the IRP.
A summary of action planning targets is shown in Figure 4. It demonstrates some of the key actions for each of the OSP pillars and a general timeline to achieve each item. For a more comprehensive description and timeline for each of the actions, see the OSP document.
Approval of the Optimized Strategic Plan
November 5, 2025
Figure 4: Summary of the OSP Action Plan
Action Ptm Ham (Orcnlfd by OSP PIUan)
Provide quaiterty pfopesa updatBS to Municipal Sen/icnsCommittBB Maintain Clean Energy Tracker websif
Publish 2028 Integrated Resource Plan
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2026-2028
2028
2029-2030
2029-2030
Revise policy on customer solar sizing
Launch public outreach and education campaign
Identify municipal sites (or solar developmsnt
Conduct studios to Identity polantial mcrogrid ates
Dnvalop Glsnarm BESS project (25 MW, online 2027)
Develop taad-in tariff (FIT) program for solar & star ag8 targeting targe instilutional cljstomers StteamlinopcrmiltingandtnlerconnectionprocBsse*
Develop (he low inlercsi loan program for (ow-income cuartomers Develop Incantivn program for customcr-ownad storagn
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Develop microgrids at initial selected municipal ptoparlies Partner with commercial and insltiutfonat sites for microgrid dcvelopmanl Continue public outreach and education campaipt
Davnlop municipal solar installations at up to ten addilional sitBS (8-16 MW online 2029-2030) Paitnar with targa cuatomcrs and institutions to dc vs lop solar and storage under FIT piop am Evaluate tanns that incentive customer sotai and sloiage adoption Continuo dovolopmont of mtcrogrids at additional silos
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2027-2028
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November 5, 2025
Performance Metrics and Reporting
The City Council, stakeholders, and the Pasadena community have expressed strong support and interest for the goals outlined in Resolution 9977. However, in order to continue maintaining reliable service, system safety, and ratepayer affordability, the OSP presents a flexible and adaptable set of action plans that position PWP to address new or changing conditions and priorities. To ensure transparency and accountability, PWP has developed a plan with regular checkpoints and updates to track progress and make adjustments, as needed. Key reporting efforts include:
Quarterly Updates to MSC
Annual and upon request updates to EAC
Clean Energy Tracker Webpage
2026 and 2028 Waypoints
Annual Customer Program Reports
City Council Review of New Power Purchases
These efforts will allow the public to stay informed, and support City leadership so that they can make well-informed decisions. By working transparently and collaboratively, PWP will be better positioned to achieve goals.
Financial and Resource Implications
Development of the OSP included utilization of a long-term capacity expansion ("LTCE") model to create complete resource portfolios including local and external resources.
These portfolios were optimized to meet system requirements while minimizing costs, balancing power needs, meeting carbon-free targets, and satisfying resource adequacy requirements. The resulting portfolios represent a broad set of case studies through which to pursue carbon-free goals. Five portfolios were designed to provide carbon-free energy in each hour of the year, while two met needs over the course of the year.
Figure 5 below shows the differences in installed capacity by resource type as compared to PWP's existing resource portfolio.
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0 Approval of the Optimized Strategic Plan
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Figure 5: Installed Capacity by technology for OSP case studies in 2031 Cunant 2031
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PWP is committed to continuing to implement strategies to keep rates affordable and equitable for all rate classes and ratepayers. The OSP highlights efforts and strategies including reducing operational costs through long-term financial planning and investing in clean energy solutions that offer the best return on investment. PWP plans to leverage its ability to access low-cost, tax-exempt financing, allowing infrastructure investments to be spread over time and shared equitably across future generations of customers.
RECOMMENDATION AND NEXT STEPS:
Staff recommends that the City Council adopt the OSP as a flexible and adaptive plan for the City to achieve the objectives of Resolution 9977. The intent of the recommendation is to create a living and dynamic plan that will enable PWP to continue to progress towards the 2030 carbon-free goal, and also evolve with advancements in technology, shifting market conditions, changes in state and federal policies, and evolving customer priorities.
As the Plan is implemented, multiple action items outlined in the OSP will be presented to the City Council for approval including but not limited to the following:
Contracts for utility-scale renewable solar and storage resources; Contracts for the development of solar and storage on city-owned properties; Rate and customer program changes; and
Capital plans for power delivery infrastructure upgrades.
In addition to the quarterly MSC updates, additional information will be shared on our progress at the 2028 Waypoint to ensure that priorities are incorporated in the developing 2028 IRP.
Approval of the Optimized Strategic Plan
November 5, 2025
COUNCIL POLICY CONSIDERATION:
As a strategic plan specifically designed to decarbonize PWP's energy resource portfolio as soon as possible, the OSP supports the City Council's strategic goal to increase conservation and sustainability. It also supports the 2030 carbon-free goal set by Resolution 9977, which has been incorporated in PWP's 2023 Power IRP, and also contributes to the overall greenhouse gas reduction efforts of the City's Climate Action Plan.
ENVIRONMENTAL ANALYSIS:
This action has been determined to be statutorily exempt from the California Environmental Quality Act (CEQA) pursuant to State CEQA Guidelines Section 15262.
This Section states that a project involving only feasibility and planning studies for possible future actions which the agency has not approved, adopted, or funded are exempt from CEQA.
A primary goal of the OSP is to analyze ways to reduce the environmental impacts of Pasadena's overall energy portfolio, particularly the reduction of Greenhouse Gas emissions. Furthermore, any specific construction projects undertaken pursuant to the OSP will be subject to full CEQA compliance, both as and when appropriate.
Approval of the Optimized Strategic Plan
November 5, 2025
FISCAL IMPACT:
Approval of the findings of the OSP and supporting PWP's OSP optimized future energy resource portfolios as identified herein will have no direct fiscal impact at this time. As PWP procures resources to meet clean energy targets, in response to the costs and availability of resources in the market, future utility portfolios and their associated costs may differ from the case studies developed in this planning exercise. Implementation of the goals outlined in the OSP Action Plan would hold potential substantial cost implications for PWP and its ratepayers. This exposure will be measured, since each implementation step would be brought before City Council before PWP commits to it.
Respectfully submitted,
c',
DAVID M. REYES
General Manager
Water and Power Department
Prepared by:
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Kelly Nguyen
Assistant General Manager
Approved by:
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MARQUEZ
City Manager
Attachments: (3)
Attachment 1: Pasadena Water and Power Optimized Strategic Plan Attachment 2: OSP Action Plan Summary Chart
Attachment 3: PWP Key Accomplishments Since 2018 Power IRP