DWP plans one-two punch

first_img AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREGame Center: Chargers at Kansas City Chiefs, Sunday, 10 a.m.“All these charges add up. If it were just 3 percent, nobody would be jumping up and down,” said Soledad Garcia, who heads the Neighborhood Council Oversight Committee, which has opposed the rate increases. But the DWP interim general manager, Robert Rozanski, said the utility has made no secret of the surcharges. He said he has warned ratepayers that – rate increase or not – bills will rise next year simply because of the surcharges. “Everything is going up in cost,” he said. Last year, the DWP reactivated the energy cost adjustment factor, a surcharge that lets the utility pass along the high cost of natural gas. The ECAF surcharge also funds the utility’s efforts to develop more green power to meet Mayor Antonio Villaraigosa’s mandate that the utility buy 20 percent of its power from renewable sources by 2010. The ECAF alone is expected to increase rates by 12 percent over three years. The utility also levies surcharges to cover the extra cost of buying imported water. This year, with record-low rainfall, the DWP has to buy 70 percent of its water, up from just 30 percent in previous years. That extra cost amounts to a $71 million increase from last year, pushing up the purchased-water surcharge passed on to ratepayers. “Customers have a pretty big increase just associated with the low rainfall. That’s beyond our control,” Rozanski said. But even with the surcharges, ratepayers in Los Angeles still pay less than customers in surrounding cities, he said. “At the end of the day, look at our rates, compare them to other municipal utility rates, and we’re still better than most. You look at the investor-owned utilities, and we’re way better,” he said. At the City Council’s first hearing on the proposed rate hikes Tuesday, members signaled they are willing to approve increases if they can ensure the money is spent on much-needed infrastructure upgrades. Council President Eric Garcetti said the DWP must produce a plan with benchmarks and deadlines to show the utility is using the new dollars to replace power poles, upgrade circuits and hire electrical specialists. “If we can show our ability to do this, then we can look our ratepayers in the eyes and say, trust us. But right now I need that trust,” Garcetti said. Councilman Greig Smith introduced a motion calling for creation of a citizens oversight committee to ensure money raised through the proposed rate increases is used only for infrastructure – and not transferred to the city’s general fund. Smith’s motion would address a major complaint of neighborhood councils: Some 7 percent of money raised through rate increases goes to the city’s general fund to pay for streets, police and city services. “If this is really for infrastructure and replacement issues, let’s do it and not use it as a way to increase the transfer (to the general fund),” Smith said. The council also is considering a DWP proposal to divide the city into two temperature zones in which residents in the hotter San Fernando Valley are charged less for electricity than residents in the rest of the city. DWP officials said many utilities in the state already stagger rates based on temperature zones. But some City Council members said they are concerned with making residents south of Mulholland Drive subsidize the electricity bills of Valley residents. Others asked for more elaborate temperature zones to ensure fair rates. “Somebody living on the north side of Mulholland Drive in the hills compared to someone living in Boyle Heights – I bet it’s probably cooler there,” said Garcetti, who asked for more detailed maps. “If we’re trying to truly be fair, that reflects both temperature and politics, as opposed to just temperature.”160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! Even as the Los Angeles City Council weighs a proposed DWP rate hike, surcharges for natural gas, renewable energy and imported water are expected to push ratepayer bills even higher. While the surcharges pass along the fluctuating costs of power and water purchases and are already in place, they are expected to increase again next year. And the charges come on top of the Department of Water and Power’s base rates, which are proposed to increase 9 percent over three years for power and 6 percent over two years for water. Factoring in the surcharges, power rates are expected to increase more than 15 percent by 2010. Anticipated water rates, including the surcharge for purchased water, were not available Tuesday. last_img read more