Burbank City Council Approves $120M Bond for BWP Infrastructure, Sustainability, and Disaster Resilience

2
1265
Photo By Ross A. Benson

As your community-owned utility, Burbank Water and Power (BWP) manages the utility in alignment with community priorities while balancing regulatory and compliance mandates. Burbank City Council approved a $120 million electric bond issuance on January 24, 2023, which provides the cash-inflow necessary to ensure BWP maintains top reliability, makes progress towards California-mandated sustainability targets, and ensures we can withstand a disaster.

WHAT IS A BOND?

A bond is a way to fund significant capital and infrastructure projects. Instead of asking the community to pay for the complete investment upfront, BWP is financing the work, much the same way that many finance a home or car. In the home example, an individual takes out a mortgage (debt) and pays that off over 30 years. This makes homeownership affordable. Similarly, BWP takes out a bond (debt) for the utility to fund the important projects that will provide us value over the 30 years we are paying it back.  

BWP elected to take out a bond so that the community could more easily afford to make the necessary investments in the electric grid without a difficult 50% rate increase. The financing will be about 3.75% of our annual operating revenue and will be paid by current customers and those who will benefit from these investments in the future.   BWP is a not-for-profit organization; every dollar we collect from the community is spent in alignment with our approved City Council budget to ensure Burbank has the best service. 

WHAT IS BWP INVESTING IN?

Reliability – Investments will be made in maintenance and upgrades to the electrical system to ensure that we can safely provide electricity to Burbank. Two substations will be built, Golden State and Willow, which will enable Burbank to receive electricity from across the country and deliver it to the community. The Golden State substation caught fire in 2019, and the Willow substation will replace the old Naomi substation. These substations will be built with the most modern capabilities, which are necessary to electrify future developments, integrate local renewable energy, and enable electric vehicle charging.

Sustainability – In 2022, BWP had 38.5% of its electric portfolio fueled by renewable energy. In 2023, BWP is on track to supply 41.25% of its electric portfolio by renewable energy. In 7 years, BWP will need to be at 60% renewables per California standards. If we do not meet this target, we are subject to fines that could be as high as $147 million per year. It is prudent for us to secure contracts now so that we are not at risk of missing this compliance target. Some of the projects we will invest in are a 4-acre roof-top solar installation at our Regional Intermodal Transport Center, local solar + storage projects on our city owned buildings as well as a feasibility study for solar plus storage in partnership with Burbank Unified School District (BUSD).

Financial Reserves – BWP must replenish our cash reserves to meet the needs of this community in case of a disaster. This past year BWP needed to dip into our savings to pay for unexpected expenses, including the high natural gas and energy costs, inflation, and unplanned electrical equipment repairs. BWP has been seeing price increases unseen in recent memory. The electrical equipment necessary to decrease voltage so that it is usable in a home, a transformer, increased in price by 50%.  Renewable energy projects increased 114% from $35/MWh to $75/MWh. We now must bring our savings back up to the level recommended by our financial company to ensure we are prepared for other unexpected expenses, including disaster response.

BWP’s purpose is to power the flow of life today and tomorrow; everything we do gives back to the city we serve. What we invest in now impacts generations for the next 100 years. Thank you for allowing us to serve this community.

    2 COMMENTS

    1. BWP told the Burbank City Council the ratepayers can expect their bills to INCREASE 50% to pay for this bond. Fact. BWP has shown itself to be a wasteful organisation spending $5,000.00 per year on dinners for it’s employees and board members that are not needed. BWP top employee’s enjoy travel all over the country for various seminars that are questionable in need. Most troubling is the fact BWP allows unlimited overtime with one Line Mechanic Supervisor making $519,000.00 per year. Many, many others at the BWP are in the $400,000.00 to $500,000.00 per year range. Of the 41 highest paid city employees in all of Burbank, 24 work at the BWP. If you are a ratepayer here in Burbank, THIS is why your monthly bills are so high. Do not be fooled by this article written by a nameless BWP employee. Also, “SPONSORED POST” means the BWP paid (ratepayer money) to place this ad.

    Comments are closed.