DWP proposing rate hikes

Department of Water and Power General Manager Ron Nichols said Tuesday the city needs to begin to look at the long-term needs of the utility. (File photo)

A year after a bruising political battle over rate hikes, the Department of Water and Power is preparing to push for another series of increases that would boost bills by more than 15 percent over three years.

DWP General Manager Ron Nichols on Tuesday detailed a proposal that would use dramatic increases in water and power rates to fund the utility's long-term needs.

The proposal would increase water rates by 4.2 percent and power rates by 6 percent by Nov. 1. By 2014, water rates would have to jump by 15.3 percent and power rates by 16.8 percent.

The average residential water bill now is $44.47 a month and the average power bill is $66 a month.

If the proposals for this year are approved, it would add $2.24 to the average water bill per month and $4.04 to the average power bill each month.

"We will still be lower than our competitors," Nichols said in an interview. "What we have to do is explain it to our customers on what we need and what our options are.

"Current rates are not adequate to support the cost of our basic business needs," Nichols said, adding the agency might have to reduce the amount of surplus revenue it transfers to the city each year without the increases.

Among the reasons for the rate hikes are new state regulations to increase the amount

of renewable energy and local policies to reduce reliance on coal. The city also needs to find new water sources to reduce the costs of importing supplies.

In addition, both water and power systems are aging and need to be replaced.

"We are now at the point where we replace our (water) pipes every 100 years and our power poles every 145 years," Nichols said. "We need to do better."

A detailed multimedia program is at the DWP's website, ladwp.org/laforward, which includes the proposed rate increases as well as detailed presentations on the water and power systems.

The DWP can expect to face another tough battle in selling the increases to the City Council and to ratepayers.

Last year, the agency sparred with the council over a proposal to increase the Energy Cost Adjustment Factor, which is an element of the power rate. The agency damaged its relationship with the council when it threatened to withhold a $73 million transfer to the city's general fund if it didn't get the full increase, but ultimately it did end up settling for a smaller hike.

Partly fueled by that fight, the council then authorized a ballot measure, later approved by voters, to create more oversight on the agency.

Councilwoman Jan Perry, who chairs the City Council's Energy and Environment Committee, has said she will block any effort to increase rates until the Office of Public Accountability - with the ratepayer advocate - is formed.

The City Council is scheduled to consider creating a five-member panel to hire an executive director for the new office.

Nichols said he would like to move ahead without the ratepayer advocate, hoping the person will be selected within the next few months and then be able to weigh in on the proposal.

Jack Humphreville, a member of the DWP Oversight Committee, said the complexity of the issues demonstrates the need to wait for a ratepayer advocate.

"There are too many moving parts for mere mortals to understand," Humphreville said. "We need to have a thorough review of the proposed rate increases and strategic investments."

Nichols is planning a series of community workshops beginning at 6:30 p.m. Thursday at the Holiday Inn, 21101 Ventura Blvd., Woodland Hills.

"We will have facilitators there to help us find out what people think of what we're proposing," Nichols said.

Nichols said the presentation is designed to present customers with a menu of options on what they would like to see the agency do - from conservation to renewable energy programs.

Other meetings will be at 6:30 p.m. Friday at the Marvin Braude Constituent Center in Van Nuys; 10 a.m. Saturday at Los Angeles Mission College in Mission Hills, for neighborhood councils; 6 p.m. at Boyle Heights Technology Youth Center; 6:30 p.m. June 21 at the California African American Museum in Exposition Park, 6:30 p.m. June 22 at the Stephen S. Wise Temple and 6:30 p.m. June 27 at the Crowne Plaza Los Angeles Harbor.

After those sessions, Nichols said he will return to the Board of Water and Power Commissioners with a final recommendation and then to the City Council for consideration.

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