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Mayor calls on L.A. council to approve first of four electricity rate increases

March 29, 2010 |  3:52 pm
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Days after City Council members balked at his plan for boosting Department of Water and Power electricity rates, Los Angeles Mayor Antonio Villaraigosa on Monday threw his weight behind Councilman Richard Alarcon’s plan to approve the first of four hikes while putting the next three under greater scrutiny.

With another council vote scheduled for Tuesday, Villaraigosa said Alarcon’s plan was a compromise that would preserve his “lock box” for renewable energy and conservation programs.

Last week, the council rejected the DWP’s March 18 decision to approve the first of the four increases, which would add an estimated 6% to the average residential bill and up to 7% to the average business bill, according to the mayor.

Still, Councilwoman Jan Perry questioned whether there was a substantive difference between the DWP board’s vote and Alarcon’s plan. “I think it’s essentially the same as what the mayor proposed before,” she said.

Alarcon’s proposal asks the DWP board to develop a plan for reducing the financial burden on businesses. Those increases would total 21% to 22% once all are in effect. The councilman also asked the board to consider spreading the four increases, which range from 9% to 28% for residential ratepayers, over two years instead of one.

Villaraigosa agreed, calling on his DWP appointees to consider an extended timetable. "I would urge the board to evaluate that option and implement it if it’s financially feasible,” he said. “If it’s not, we would go back to the council and explain why we cannot do it.”

The mayor has been seeking the additional funds to help the DWP pay for such expenditures as the fluctuating cost of coal, existing renewable energy contracts and new conservation programs.

The first increase would add 0.8 cents to the cost of each kilowatt hour of electricity consumed by ratepayers. Of that total, 0.3 cents would go toward new conservation and renewable energy programs.

Villaraigosa has insisted that the money be preserved so it can eventually be used to help wean the utility off of coal. Some critics say all the money should be used to address the DWP’s finances and keep its credit rating secure.

Over the last week, Villaraigosa has ratcheted up his campaign against resistant council members, saying they have not done their homework on the DWP’s financial situation.

Standing next to Villaraigosa, the head of the powerful county Federation of Labor called out Councilman Ed Reyes specifically, accusing him of branding the mayor’s plan as irresponsible.

“I say it’s irresponsible not to go forward with this plan,” Maria Elena Durazo, the federation’s executive secretary-treasurer, said.

Reyes actually said last week that he believed the mayor was irresponsible for warning that the city would go bankrupt if the rate increases were not approved.

Villaraigosa later disavowed the use of the word “bankruptcy” but continued to warn that the city would run out of money unless the DWP got its rate hike. The extra money would allow the DWP to transfer $73 million to the city’s general fund by June 30, he said.

-- David Zahniser at Los Angeles City Hall

Photo: L.A. Times file

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