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DWP proposes rate increase for water, electricity

OW Staff | 4/2/2012, 5 p.m.

Los Angeles Department of Water and Power General Manager Ron Nichols has proposed raising power rates by 10.5 percent and water rates by 4.9 percent over two years.

The rate increases would raise the average monthly bill about $3.35 for most residential power customers and $2.53 for monthly water bills.

Nichols presented the rate increase to the Board of Water and Power Commissioners this afternoon. Nichols said he planned to do extensive public outreach and would bring the rate proposal back to the board in June. If approved, it would then go to the City Council and the mayor for final approval.

During a briefing with reporters before the commission meeting, Nichols said the department has not raised electricity rates since 2010, when utility officials and City Council members waged a bruising public battle over rate increases.

LADWP officials point out that Los Angeles water customers pay among the lowest rates of big cities in the state, an average of $40.18 per month. Water customers pay an average of $62.67 per month in San Diego and $56.35 per month in San Francisco, according to the LADWP.

Nichols said the rate hikes are necessary to meet strict legal mandates and regulatory requirements, such as a state law mandating that the department generate 33 percent of its electricity from renewable sources by 2020. The utility also needs to replace aging power generators and water infrastructure.

Much of the revenue from water rate increases would go to expanding the city's local water supply by funding conservation measures, capturing more storm water and recycling water.
The goal is "to wean us off of imported water," which is the most expensive source of drinking water, Nichols said.

The power rate increase would fund the replacement of aging coal-fired coastal power plants, installing more renewable energy and replacing aging power transmission infrastructure.

The electricity rate increase would also be used to pay for a solar program approved by the City Council Tuesday. The so-called Feed-in-Tariff would allow the department to purchase solar power produced by customers in the city.

Nichols said he expected to ask the City Council to consider the power rate increase first, and the water rate hike later.