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DWP customers to weigh in on proposed electric rate hike

Customers of the Los Angeles Department of Water and Power get their first chance Thursday to weigh in on Mayor Antonio Villaraigosa's latest plan for hiking electric rates.

The DWP commission, whose five members are appointed by Villaraigosa, will meet at 12:30 p.m. to review the proposal to charge households between 8.8% and 28.4% more for their power, depending on where people live and how much electricity they use.

S. David Freeman, the utility's top executive, said the money generated by the increase would allow Villaraigosa to carry out a longtime promise: securing 20% of the DWP's power from renewable sources, such as solar and wind energy, by Dec. 31. The money also is needed to "maintain the financial integrity" of the DWP and pay for the rising cost of coal, according to a report submitted to the commission.

"I'm not one to holler poverty, but this is a serious financial situation that has to be solved in a matter of weeks," Freeman said earlier this week as he rolled out the proposal.

City Councilwoman Jan Perry, who heads the Energy and Environment Committee, questioned Freeman's demand for swift action and said she said will ask her colleagues to review the DWP's decision.

"They created this time crunch to put pressure on their board members to vote for it affirmatively with a minimum of questions," she said.

The increase would be phased in over the next year, and Thursday's vote would represent the first of four rate hikes. The board must decide whether to add .8 cents to each kilowatt hour of power consumed by ratepayers. Following three more increases, DWP customers would be required to pay an extra 2.7 cents for each kilowatt hour by January 2011, according to the plan.

"On a systemwide basis, this represents a 22% increase to power system rates," stated the report submitted to the DWP board.

Environmentalists and labor leaders have already signed on to the plan, saying it will help create thousands of "green" jobs and begin the process of moving the DWP away from dirtier fossil fuels. Critics contend the utility needs more money to pay for costs associated with a labor contract backed by Villaraigosa last year. That pact will give DWP workers annual raises ranging from 2% to 4% in each of the next four years.

The DWP faces other financial burdens. Retirement costs for its workforce are projected to go up by 65% over the next four years, from $292 million this year to $483 million in 2013. Meanwhile, the utility has been asked to provide at least $220 million to help balance the city's budget and hire workers from other departments to help slash the city's payroll costs.

The Thursday meeting is scheduled to take place on the 15th floor of DWP headquarters at 111 N. Hope St. in downtown Los Angeles.

-- David Zahniser at Los Angeles City Hall

Comments () | Archives (14)

Pay cuts?

DWP's $100,000 secretary? Great job if you can get it, Steve Lopez
December 11, 2009

Villarigosa and Freeman have both lost their minds especially the Mayor. Because he is a lame-duck he is proposing all of these rate hikes because he is termed out, but wouldn't it be funny to see the unfaithful little worm recalled and fired by the very people that voted for him. As for Freeman, his welfare check given by the Mayor should also be cancelled. Los Angeles is proving to be Cancerous feeding off of itself.

How can the DWP ask for rate increases when they already have a surplus of $220 million dollars? Couldn't they use that money instead of increasing rates?
This is just a way to increase taxes without a vote.

More rate hikes during and economic depression is simply squeezing the turnips for more blood. We can't afford DWP or this renewable proposal. They need to look into why we aren't signing on in the first place for their so-called green energy program. The math is simple, most of us can't afford any more rate increases. For some it's the choice of hot water versus having electricity. Or groceries for the kids versus, doing laundry. Or gas in the car to go to work and pay for those 300 dollar per billing cycle.

It is OUTRAGEOUS that the mayor and DWP would even THINK about raping us further during these times.


another Enron?

Just default on payments to DWP retirees and the problem would be solved. Go one better and rescind the recent pay increases.

"latest plan for hiking electric rates".

Why would any normal person approve these higher rates?????

This is one of the most over paid department in LA. I saw an ad for a secetarty, just a secetarty, paying close to $100,000......

Come on folks and this is just a simple positioin not even asking for a degree....

A $100,000 and they want YOU to approve rate hikes????????

Here's the public comment I emailed the Board this morning:

Dear Commissioners:

Please include this email and the two attached PDF files as public comment regarding Items 22, 23, 24, 25 and 26 on your agenda for your meeting today, March 18, 2010, at 12:30 p.m.

1. Failure To Give Timely Notice
The Board should refuse to vote on Items 22-26 today at all, because the Board has not given the public adequate notice of the meeting. I believe the legal minimum required is 72 hours notice. Nor was there any particular "emergency" justifying shorter notice. I gather Mayor Villaraigosa has planned the proposed rate hike for weeks. There is, therefore, no good reason to deny the public at least 72 hours notice.

2. Illegal Tax Increase Requiring Voter Approval
The proposed rate hike would violate Article XIII C of the California Constitution because it would constitute a "special tax" requiring approval by two-thirds of the voters. Villaraigosa knows it's a tax, which is why he tried to get voter approval for essentially the same proposal last year; this was "Proposition B" on the ballot, referred to as "Measure B" by the public, and it was defeated.

Though characterized as a "fee," this charge is in effect a "special tax" because it would apply to virtually everyone in the city rather than to a discrete group for a discrete service. Don't take my word for it. Have your legal team look at the California Court of Appeal case where a city tried to impose a "fee" on all telephone users to pay for its 9-1-1 system. The Court struck it down as an illegal tax. The same thing will happen here if you impose this fee. I myself am thinking seriously about filing a lawsuit if the City tries to impose this tax without voter approval.

3. Villaraigosa Has Misled The Public Regarding The Amount
Less than a week ago, Villaraigosa has told the public that his rate hike proposal would cost the average customer just $2.50 per month. In fact, however, the average customer would have to pay nearly 15 times more than that. (See the attached PDF files for details.) Hence, the overwhelming majority of the public has been misinformed about the impact of the proposed rate hike. This aggravates the problem created by your giving less than 72 hours' notice of the meeting.

4. A Massive Rate Hike During This Recession Would Be A Disaster
Unemployment in our city is at 13.2% according to the latest figures. Families are struggling. Businesses are struggling. We need to make it more affordable, not less affordable, to live and do business in Los Angeles. If you want more money for power programs, then stop characterizing the DWP's profit as "surplus funds," and stop transferring that profit to the City's reserve fund each year.

5. DWP Solar Monopoly Or Near Monopoly Would Unduly Burden Consumers
There is no legitimate reason to expand the ranks of DWP employees in the name of solar power. After all, solar power can be installed on buildings owned by individuals and businesses. Rather than hiring more DWP employees -- at above-market rates, and with massive pension obligations -- the Board should instead ensure that any new solar program relies on the private sector. For example, rather than hiring DWP employees to install solar systems, the DWP could instead provide a rebate or rate reduction to people who buy solar systems from private companies. This would promote competition and efficiency: the companies that deliver superior service at reasonable prices will thrive. That won't happen if the DWP has a monopoly on installation.

Walter Moore

First it was a trash fee increase to provide more useless cops and now this. Thanks for your help mayor. Whats next?

"The DWP faces other financial burdens. Retirement costs for its workforce are projected to go up by 65% over the next four years, from $292 million this year to $483 million in 2013."

These unfunded retirements and pension plans MUST BE STOPPED. If the only way to renegotiate these contracts is through bankruptcy, then so be it.

Although I am not an LA resident and this pay hike does not affect me (I have Edison), I think this is in extremely poor taste considering how much more DWP employees make versus regular city employees. Yes, executive secretaries DO make around 100K per year as I also have seen the bulletin for that position. Before approving pay raises to DWP employees, you need to ensure that you have the funding for those raises versus demanding MORE from your customers who are stretched to the max during this economic downturn. An investigation needs to be conducted to see where the money is REALLY going before any rate hikes are approved. This is one city government that does not care for its citizens.

Recall Villarigosa. That's the only mechanism that seems to cut through the fog with Progressives.

Villarigosa won the last election with only 11% of the eligible electorate. We can find enough recall votes in the 89% who did not vote for him. Just proposing such an outrageous scheme is grounds for recall. Let's get it going.

Now we see the real issue in the article today that came out: this rate increase has nothing to do with renewable energy. We are being held hostage by the DWP because they have chosen to intermingle their funds with the general fund (which no other prioprietary does!!), and they are admitting that this increase is simply to keep the sinking ship afloat.

Shameful. We will not stand for this outright theft.


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