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DWP approves 4.8-percent electrical rate hike

April 15, 2010 12:26:02 AM PDT
Two weeks after the DWP rejected the city council's proposal of a nearly 5 percent rate increase, they held a special meeting Thursday to approve that increase. The amount will add up to about $4 a month on the average household utility bill. But some are warning this may be just the beginning of further increases.Los Angeles Department of Water and Power commissioners voted unanimously Thursday to raise electricity rates by 4.8 percent, possibly ending a political tug of war between the utility and the Los Angeles City Council.

"What we need to do is take a deep breath, work with the city council, with the mayor's office," said Lee Kanon Alpert, DWP president.

The rate hike is considerably less than the 5.7-percent increase approved by the DWP last month, but vetoed by the city council. As a result, the DWP threatened to withhold $73.5 million it had promised to put in the city's depleted general fund. That damaged the city's credit rating and increased the city's budget shortfall.

While it wasn't clear Thursday if the DWP board will now make that payment, the mayor's office seems confident.

"We fully expect that we'll receive the entire transfer to the general fund," said Matt Szabo, the mayor's deputy chief of staff.

In a statement Mayor Villaraigosa said the rate hike addresses the concerns of ratepayers, commits the DWP to clean, renewable energy and maintains their fiscal well-being.

But the utility's acting manager, Raman Raj, warned that because of the recent impasse with the city, it's unlikely the DWP will be able to meet the mayor's renewable energy goal for this year.

"This is going to make it almost impossible for us to meet the 20 percent by 2010 goal," said Raj.

A former president of the DWP, Nick Patsaouras, calls the utility's actions of late "irresponsible."

"They have been pleading poverty, but by the rejection of two weeks ago, they forfeited $36 million for this quarter," said Patsaouras.

The new rate hike will go into effect July 1, and would last for three months.

The new electricity rate increase will be reviewed on October 1, and at that time, L.A. residents may be in for yet another rate hike to meet the utility's fiscal, and operational target.


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