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Breakthrough may be near in Villaraigosa-council dispute over electricity rate boost [Updated]

April 14, 2010 |  3:30 pm
Los Angeles Mayor Antonio Villaraigosa and City Council members may be close to a breakthrough in their protracted dispute over how much the municipal utility should charge ratepayers and how much it should contribute to the city’s troubled treasury.

The council voted 8 to 5 on Wednesday to adopt a three-month electricity rate increase of 0.6 of a cent per kilowatt hour to take effect July 1 and be reviewed again by Oct. 1. The action marked the second time that the 15-member council mustered a bare eight-vote majority to back an increase equivalent to a 4.5% boost for ratepayers. Opposing the plan were council members Bernard C. Parks, Jan Perry, Paul Krekorian, Tom LaBonge and Dennis Zine. Councilmen Greig Smith and Ed Reyes were absent.

The proposal largely mirrors an increase that the council approved two weeks ago but that died after the Department of Water and Power’s board of commissioners demanded a larger, longer-lasting hike to pay for the fluctuating costs of coal and the mayor’s renewable energy agenda. That council rejected the DWP’s counter-proposal.

As a result, DWP executives said the department would not transfer $73.5 million to the city’s cash-strapped budget, maintaining that the utility could not afford it without the rate hike. The DWP’s refusal to provide the money has dramatically increased the size of the city’s deficit, expanding it to $222.4 million for the fiscal year that ends June 30, city budget officials said Friday.

The DWP board has scheduled an emergency meeting Thursday to consider accepting the council's increase.

“We’re pleased with the council’s actions,” DWP Acting General Manager Raman Raj said Wednesday afternoon.

Next week, Villaraigosa is expected to announce his list of planned layoffs for the fiscal year that starts July 1.

“I’m guardedly optimistic that this is a done deal,’’ said Councilman Herb Wesson, who added that he has been talking with the mayor daily in an effort to broker a rate hike agreement.

[Updated at 3:52 p.m.: “I think what the mayor did was put the city before some of the things he supported."

Wesson said he has talked with the mayor almost daily since the political feud began, in hopes of finding a compromise. Those discussions began the night of April 2, when Wesson went to the mayor’s home and the two longtime political colleagues spent a few hours smoking cigars and tossing around ideas on how to reach a deal, the councilman said.

“The critical thing is that, as we move forward with all of the other issues, the mayor and the council need to be on the same page whenever we can," he said.

Wesson said the council retains the political leverage necessary to ensure there’s “more transparency" and accountability at the DWP, including possibly installing a ratepayer advocate.]

“We feel the commission will do, independently, what’s in the best interest of the city," said Matt Szabo, Villaraigosa’s deputy chief of staff.

-- Phil Willon and David Zahniser at Los Angeles City Hall