City Utility Plan Calls for Rate Hikes, Cutbacks

To keep Pasadena’s city-owned utility viable after deregulation of the electric industry, the city manager will present a plan today that calls for a 5.8% increase in electric rates through 2004, a slashing of the annual lump cash transfer to City Hall, and the closure of a big chunk of the municipality’s local power plant with some possible layoffs.

In a plan to be presented to the City Council, Hawkey says such measures will be needed to generate revenue to pay down an estimated $375-million debt during the next eight years and help the utility survive in a deregulated environment.

In 1998 deregulation will end city-owned utilities’ monopolies and allow customers to buy from any provider. Pasadena officials say the city-owned utility needs to reduce its costs and eliminate its huge debt.

Plans to reduce the utility’s annual transfer to City Hall by more than $1 million next year and $2.3 million annually thereafter will also result in cuts that Hawkey has yet to outline. The plan also suggests that the rate increase may not apply to larger customers.