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Anticipated DWP rate hike meets controversy

March 12, 2010 12:00:00 AM PST
DWP customers already pay a surcharge called the Energy Cost Adjustment Factor. In the past four years it's gone up 76 percent. L.A. Mayor Antonio Villaraigosa wants to boost it up even more, by another 50 percent. Even though the mayor's calling it a carbon surcharge, one consumer watchdog group says it's less about the environment than it is about political patronage.Higher rates may soon be in store for LADWP customers, boosting their utility bills. The mayor is getting ready to announce his plan. The new rate increase from the Los Angeles Department of Water and Power is planned, affecting many customers who are already struggling to make ends meet.

DWP customers already pay a surcharge called the Energy Cost Adjustment Factor. In the past four years it's gone up 76 percent. L.A. Mayor Antonio Villaraigosa wants to boost it up even more, by another 50 percent. Even though the mayor's calling it a carbon surcharge, one consumer watchdog group says it's less about the environment than it is about political patronage.

Mayor Villaraigosa's so-called carbon surcharge hasn't even been officially announced but already he's being forced to defend it. He says it's needed to clean up the city's notorious reputation for generating pollution.

"I said early on, four years ago, that we were going to move to make the dirtiest public utility in the United States of America the cleanest," said Villaraigosa.

Villaraigosa was slated to reveal the specifics of the rate hike Friday morning, but put off the announcement until Monday. That didn't stop reporters from asking if charging residents more during an economic downturn is the right thing to do.

The mayor's response implied that it is acceptable because DWP rates are relatively low.

"We provide power 30 percent less than Southern California Edison," said Villaraigosa. "The idea that somehow our public utility is somehow out of sorts with the competition just isn't true."

"We recognize that rates are going to go up, but what we'd like is a little transparency," said consumer advocate Jack Humphreville. Humphreville is a DWP watchdog for the Greater Wilshire Neighborhood Council.

Humphreville characterizes the DWP Board as the mayor's political lackeys who spend DWP funds irresponsibly, including a fat contract for the electrical workers union.

"They just got $150-million raise this last year when everybody in the city was getting clocked," said Humphreville. "We've seen the payroll of the DWP go up about $100 million in the last year alone."

Humphreville says DWP rates have already jumped roughly 25 to 30 percent over the past three years.

Some DWP customers said it's been noticeable.

"You know, every time I get my bill, it seems like it's going up and I kind of feel helpless," said DWP customer Margot Herrick. "There's nothing we can do, and it's very, very frustrating."

The mayor didn't reveal the exact amount of the surcharge, but published reports peg it between 2.5 and 3 cents per kilowatt hour.

Humphreville says don't let the talk of pennies fool you.

"Two and half, three cents sounds like chump change," said Humphreville. "It isn't chump change. It's $700 million to $750 million."

The mayor is set to reveal the details of that carbon surcharge on Monday. If the DWP Board approves surcharge, then the L.A. City Council gets a chance to review it.


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