Proposed Rates FAQ

Continuing the Legacy

100 years ago, City founders set Riverside up for success by establishing publicly owned electric and water services. As a result, Riverside enjoys the one of the lowest water rates in California, and nearly the very lowest electric rates in the state. Residents and businesses have benefited for decades thanks to the foresight of those who came before us in Riverside. We must continue this legacy, benefiting our children and grandchildren, by keeping the electric and water systems in good shape and building new facilities to serve our growing city.

Every five years the City of Riverside Public Utilities Department analyzes and evaluates current and future water and electric systems, processes, projects, and mandates along with all associated costs. Based on historic practices of keeping rates low, it is then decided if an increase is warranted.

In addition to water and electric rates, the City of Riverside’s Solid Waste service rate structure will be evaluated.

Back to Proposed Rates

Yes. There are no proposed changes to the reliability charge in the 5-year rate plan term.
No, RTRP capital costs within the 10-year financial plan will be in part funded through a combination of reliability charge designated cash reserves and a bond issuance which requires the charge to continue through, at a minimum, the term of the bonds. The Reliability Charge also funds improvements and significant maintenance on internal generation equipment which will continue until the facilities are retired.
The domestic rate increases in the rate design model are applied to both the Tier 1 and Tier 3 energy rates separately. Tier 2 energy rates are increased at a higher rate than Tier 3, reducing the differential between Tiers 2 and 3 and transitioning toward a two tiered energy charge in the future.
The Cost-Of-Service Analysis showed Commercial Demand class existing rate revenue were sufficient to meet the class’s projected costs of service (revenue requirement) during the rate plan period.
Yes. Per Council Resolution 23499, the maximum under collection that can be supported with non-rate revenues is $684,000 per year and once that threshold is reached, the rate class will be closed to new customers.
Any future legislation impacting water service will be addressed in alignment with any future corresponding laws.
Any rate changes that increase rates higher than the approved levels will require a COSA update and same rate setting process and approvals from Board and City Council.
S – Summer (Water- June through October, Electric- June through September)
W – Winter (Water- November through May, Electric- October through May)
The process to adopt rates for the Public Utility is established by state law and the City Charter. City Charter in section 1202(e) authorizes the Board to establish the rates, subject to the approval of the City Council.
Electrification of buildings and transportation is expected to have a positive increase in future electric demands. The transition is not projected to have a material effect over the term of this rate plan due to the continued offsetting impacts of energy efficiency and solar plus battery storage installations.
Natural gas prices affect RPU’s cost to procure electricity. The recent increase in natural gas prices this past winter caused market energy prices to increase resulting in unanticipated power supply cost increases. Additionally, natural gas is purchased up to 3 years in advanced for our internal generation units and these forward markets have doubled in costs over the last two years.
RPU Electric Utility operational costs are primarily fixed (not dependent on quantity of commodity delivered) and include debt service, labor, maintenance and investments in equipment. Variable costs are primarily related to fuel, electricity and purchased power. However, RPU is typical like most electric utilities in that it currently recovers a portion of its fixed costs from the variable portion of its rate structures (the energy charge or cents per kWh). Fixed Costs = 55% of budget: Recovers only 30% as Fixed Charges, and increasing to and estimated 33%.
Water costs are 85% fixed and 15% variable. The variable portion is the cost to pump, treat and deliver the water. Current revenue collection is 39% fixed and is projected to increase to 40% during the rate plan.
It is estimated that approximately 8.3% of water is lost, 2.5% from metering 5.8% from leaks.

RPU could potentially recapture 2-3% by expanding its acoustic water leak detection pilot program to pinpoint undetected subsurface water leaks.
Meter inaccuracies contribute the smallest amount for the Nonrevenue water category. More aggressive water distribution and service line replacements would be needed to reduce water losses to this level. The utility is currently at a 300 year line replacement program. This exceeds industry standard and a master plan to analyze and project costs to reduce this to 150 years will take place during this rate plan. In the interim, more aggressive leak detection efforts will be made to discover and replace leaks that have not previously been detected.
Water demand has been impacted by the mandatory state water conservation mandates, impacts of Covid pandemic and extreme wet weather conditions. It is anticipated that the State’s mandatory reductions will result in a 10% permanent reduction in customer demand. To arrive at projected customer demands, the 3-year average water demand from FY 2019/20 through FY 2021/22 was reduced by 10% and used as the baseline for customer demand projections.
Surplus water sales reduces the Revenue Requirement from rates by $4-$6 million per year.
Water AMI (Advanced Metering Infrastructure) project is not part of the current 2-year budget cycle. Consideration will be given to beginning a transition to AMI meters in the next budget cycle.
In May 2022, the SWRCB adopted a resolution to reduce water demand and improve water conservation, including the requirement that urban water retailers implement level 2 of their water shortage contingency plans. Due to impacts of the State drought mandate when the COSA started, the customer demand was projected to be 10% below normal annual average. The recent FY 2022-23 saw much higher than average precipitation which this 10% reduction to be realized. There will be some customer water demand permanently reduced due to water efficiency.
RPU began implementation of significant cost cutting measures during the Covid pandemic which included managed hiring freezes and delays in capital project construction. As growth and service expectations returns to normal, these practices are not sustainable.
The Capital Improvement Plan for water and electric is includes amounts taken from currently approved capital budgets and adjusted for new projects listed in the presentation such as Hunter Substation and Riverside Habitat and Parks projects. View more.
RPU currently offers a $200 rebate on the Energy Star page of the Riverside website. View more.








Operating (Working Capital) (a)


Annual Operating Expenses / 365 Days * 60 Days





Rate Stabilization (a)



Operating Revenues * 10%


Operating Revenues * 7%


Emergency Capital


Depreciable Assets * 1%





System Improvement Capital


(Most recent (previous) fiscal year audited actual CIP expenditures + Current years original adopted CIP budget expenditures + Following years original adopted CIP budget

expenditures) / 3 / 12 Months * 6 Months







Debt Service


Maximum Debt Service Payment (Semi-Annual) in Upcoming Fiscal Year (Principal and Interest)







Sum of above


Sum of above


(a) Excludes Public Benefits and Water Conservation.

Any reduction to the GFT is expected to reduce the revenue requirement and provide the same reduction to the rates for City of Riverside customers.
The GFT is calculated based on prior year gross operating revenues. The projected FY 2024 electric GFT of $45,419 was calculated using the projected FY 2023 electric retail revenue of $360,500,000 along with the addition of transmission revenues, and other operating revenues excluding restricted revenues (as an example, CAP & Trade).
For the second part of the question, the total retail revenue of $337,876,000 referred to in the Board presentation is actual FY 2022 retail revenues. This amount is being used to determine the FY 2023 GFT along with the addition of transmission revenues and other operating revenues excluding restricted revenues (as an example, CAP & Trade).
The City uses a blended rate for residents, so that equivalent service provided by Athens costs the same as that provided by the City. Rate increases will help to cover costs of State regulations and general cleanup of debris and illegal dumping that benefit all City residents.
Our team has been out in the community and is working with local schools and residents about food waste recycling to educate residents about new organics recycling. Learn more.
New rates will allow us to hire the staff and purchase the equipment & software we need to provide the excellent service Riverside residents deserve.