The cost of providing our community with reliable and sustainable services continues to rise. This includes maintaining the equipment and parts that keep our lights on and the water flowing, purchasing the water we serve to our customers, and securing long-term sources of renewable energy. As a not-for-profit utility, our rates reflect the cost of providing water and electric services to our customers. BWP provides an industry-leading 99.999% reliability for water and 99.997% reliability for electric while maintaining the lowest regional rates and meeting conservation and sustainability goals.
Next year, beginning January 1, 2026, BWP is proposing an electric system average rate increase of 9.9%, and a water system average rate increase of 14%. On January 1, 2027, we’re proposing identical increases. We understand this is potentially a large increase and appreciate the opportunity to explain the cost drivers to our community owners.
Why Are We Seeing a Cost Increase?
There are several factors driving the need for rate adjustments. These include:
- Regulatory Compliance: Meeting California’s state-mandated goal of 100% carbon-free energy by 2045, with Burbank committed to achieving this by 2040. We must also meet the goals of Senate Bill 35, which requires the development of affordable housing units.
- Capital Projects: Investments in long-term reliability, such as replacing 100+ year-old water mains, a water reservoir built in 1932, and aging electric substations.
- Production Costs: Rising costs for electricity and water production, including operations at the Magnolia Power Plant, natural gas, transmission costs, water purchases, and the Burbank Operable Unit, our water treatment facility.
- Raw Materials: Increased prices for essential materials like copper, steel, and water treatment supplies.
- Infrastructure Maintenance: Upgrading and maintaining critical systems like transformers, pumps, and switchgear to ensure reliable service. As a result of the windstorm, we need to perform maintenance on infrastructure that was impacted – which includes inspecting and replacing more poles, wires and other equipment.
- Financial Health: By maintaining strong reserves, BWP remains a highly rated utility, enabling us to secure funding for major projects at favorable interest rates, and stay prepared to respond swiftly to emergencies or natural disasters that may damage critical infrastructure.
Each of these factors alone has a significant financial impact. Combined, they create a monumental challenge as we balance reliability, affordability, and compliance with state mandates.
Impact of Tariffs on Utility Rates:
Supply chain disruptions have resulted in rising costs for essential resources and materials necessary to maintain energy and water infrastructure. Proposed tariffs on imported goods may further escalate the expense of equipment, technology, and maintenance supplies required for reliable utility services. While these potential tariff impacts are not currently accounted for in the proposed adjustments to water and electric rates, BWP remains committed to delivering uninterrupted, high-quality services to the community. Should tariffs be implemented, the additional costs may need to be reflected in the proposed rates to ensure the continued reliability and sustainability of our operations.
Cost Examples
Here are some examples of rising costs:
Average Pole-Mount Transformer – Current Costs (2025) between $3,500–$5,000. Costs two years ago (2023) were around $2,500–$3,500, an increase of 40–50% and since 2020 as high as 80% increase. Future Projected cost expected to rise another 10–20% by 2026 due to grid modernization demands (this estimate does not include potential increases from tariffs and higher cost for raw materials such as copper and steel).
Larger substation transformers have increased even more in price, with longer lead time. The National Renewable Energy Lab (NREL) researchers produced a report that indicated, “lead times for transformers has grown fourfold in three years, with orders sometimes taking two years. Additionally price increases of four to nine times have been reported in the past 3 years”.
Substation Buildout – $40-$50 million today. May exceed $65 million with the federal tariffs.
By comparison, in 2019, our Ontario substation build costs were significantly less, at $17 million.
Substations are the intermediary that ensures electricity reaches residents and businesses efficiently and safely. Without them, delivering power from generating stations to end users would be unfeasible.
Increased costs for capital, operating costs, and transmission – Increase in costs due to the rebuild of the Southern Transmission System, which allows us to continue to procure zero-carbon resources from the east – the cost has risen 3x since 2017 and is now approaching $3 Billion.
Intermountain Power Project (IPP) – Costs associated with repowering the Intermountain Power Project (IPP) with natural gas and retiring the coal plant was $1.7 billion in 2017 and is now approaching $3 billion.
Renewable Energy Costs: Transitioning to 100% carbon-free energy by 2045 requires significant investment. Managing the grid to ensure Burbank is energized 99.997% of the time and delivering a reliable and affordable supply of electricity every time a switch is flipped is a complex process requiring management of available electricity sources, real-time energy cost analysis, hedging supplies of natural gas, and ultimately transmission.
To learn more about Burbank’s energy future see our previous Ask an Expert article – Transitioning to Renewable Energy: A Complex Path for Burbank’s Future
Water Costs: Burbank is 100% reliant on imported water purchased from the Metropolitan Water District (MWD). MWD has approved annual rate increases of 8.5% for untreated water and 11% for treated water in 2025, followed by 10% for treated water in 2026. This is the cost for water only, it does not include Burbank’s cost to store, treat and distribute the water.
What Is BWP Doing to Manage Costs?
To help offset these increases, BWP has aggressively pursued cost-saving measures, resulting in approximately $6 million in savings over the past 12 months. Additionally, we’ve secured external funding, such as $16.1 million in grants for funding new pilot projects and infrastructure such as upgrading our water treatment systems. We also actively seek state and federal funding opportunities to reduce the financial burden on our community. BWP is a top contender for a $50 million grant from the California Energy Commission (CEC), to upgrade the Magnolia Power Project (MPP).
Programs to Help Customers
As your community-owned utility, we prioritize affordability and offer a suite of programs to help customers manage bill increases, regardless of income level. Visit BWP’s Financial Help webpage to learn more and apply for assistance.
We’re committed to transparency and will continue to share updates through community meetings and informative articles. Join us at a town hall or “Meet the GM” event to learn more and share your feedback.
At BWP, we are committed to ensuring safe and reliable electric and water services for all of Burbank. To continue providing the level of service you depend on, we are proposing increases to electric and water rates.
Starting January 1, 2026, we are proposing an average rate increase of 9.9% for electricity and 14% for water. The following year, beginning January 1, 2027, the proposed increases are identical, 9.9% for electricity and 14% for water. These adjustments reflect the growing costs of maintaining and improving the infrastructure that delivers these essential services to your home and business.
We understand that any change in rates can be challenging. That’s why BWP offers a variety of programs to help households manage their bills. These resources are available to all customers, regardless of income level, to provide support during these transitions.
To learn more about our financial assistance programs or to find out how we can help, please visit our website or call us at (818) 238-3700.
Madam General Manager, I went to your public meeting where you invited public questions on April 23. I asked you to talk about wasteful spending within your department.
I asked you about the needless travel to seminars all over the country for your top management.
I asked why some users pay less than others and why some users pay more than others.
I asked you about the out of control overtime within your department and why some of your employees are making over $500,000.00 per year with overtime. (Your answer to this one question was lame as you blamed it on the wind, when in fact this out of control overtime has been going on for years – before the recent wind storm.) In fact your employees make more on average than most employees in the police and fire departments.
I asked you when was the last time you said NO to the unions.
And most importantly, I asked you to name the top 5 things you have done to reduce spending within your department. This question was simply ignored.
I told you I understand inflation and state mandates, but you need to be running a cost effective organization BEFORE you ask for an obscene rate increase.
I also asked you about possible fraud within the multiple programs the BWP offers for people who are having difficulties paying, this question was also ignored.
Sorry Ms. Samra, not everybody is buying what you are selling above.
Joel Schlossman
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