Los Angeles City Council approves DWP rate increases
Elizabeth Hsing-Huei Chou | 3/3/2016, midnight | Updated on 3/3/2016, midnight
The Los Angeles City Council Wednesday tentatively approved hikes to electricity and water rates for Los Angeles Department of Water and Power customers.
The council voted 12-2 to concur with the LADWP board to adopt the water and electricity rate increases, which are to be spread out over the next five years.
Because the decision was not unanimous—Councilmen Mitch Englander and Gil Cedillo cast the dissenting votes—the rate proposals will return for a second vote. Councilman Marqueece Harris-Dawson was not present for the votes.
Under the water rate plan, the average customer will see a 4.76 percent annual increase, amounting to an additional $3 per month. A monthly bill of $57.79 for the typical residential water user would increase to an average rate of $72.90 at the end of the five- year period, according to an example in a staff report.
With the electricity rate increases, the typical single-family household in Los Angeles could see monthly electricity bills go up a total of $12 over five years.
The council only has the ability to affirm or deny the rate hike plans, which were previously approved by the LADWP board comprised of members appointed by the mayor.
The City Council also approved a set of recommendations aimed at helping LADWP to ensure the projected additional revenue will go toward projects and activity that improve or maintain the efficiency and reliability of water and power service.
Councilman Felipe Fuentes, who chairs the Energy and Environment Committee, said he has “reservations'' about the electricity rate hike plan, but feels “we have to move forward."
“The consequences of not doing something really outweigh the impacts of what's being proposed,'' he said.
Utility officials say the rate increases are necessary to upgrade aging water pipes, make energy use more reliable and meet environmental mandates, although some in the city have noted that the hikes will not be nearly enough.
“These rate adjustments are frankly minimal” and are aimed at fulfilling environmental, legal and financial obligations," LADWP General Manager Marcie Edwards said.
But without taking steps to reorganize the utility to rein in bureaucratic and other types of inefficiencies, Edwards said she is “not willing to ask our customers /owners for more'' at this time.
Edwards' statements come as city leaders are weighing a November ballot initiative to change the governance structure of the LADWP, including bringing in full-time, paid members to the utility's board.
The rate hike plans have key support from Mayor Eric Garcetti, environmental groups, neighborhood council leaders and business groups such as the Los Angeles Area Chamber of Commerce.
However, more than 2,000 letters protesting the rate increase were submitted, according to the city clerk, but they were not enough to constitute a majority opposition to the rate hikes.
The relative ease in preliminarily adopting the increases marks a departure from the battle that occurred in 2010 when the LADWP last proposed a major increase to rates.
Councilman Paul Koretz noted that the support for the rate increases is "actually pretty remarkable.''
“We wound up with quite a group of supporters of every stripe, including many that are usually very cranky about this kind of thing,'' he said.