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L.A. council endorses back-to-back DWP rate hikes

September 25, 2012 |  5:08 pm

DWP wind farm in Tehachapi Mountains. L.A. council endorses back-to-back DWP rate hikes.
After months of community meetings and public hearings, a two-year package of DWP electricity rate hikes totaling 11.1% won preliminary approval Tuesday from the Los Angeles City Council.

The council voted 10 to 4 to back the increases, which are expected to generate $321 million by June 2014. The plan, which needs a second vote next week before going into effect, was approved despite complaints from ratepayers and a few council members that DWP pay is too high when compared with other utilities and other city workers.

“DWP does not have an income problem,” said Vicki Micciche, 45, of San Pedro, appearing before the council. “It has a spending problem.”

A city-commissioned report released last month concluded that DWP salaries are “significantly higher” than those at other utilities, with customer service workers making 29% more than counterparts. The analysis said DWP meter readers earned 46% more than those employed by 13 comparable utilities.

DWP officials downplayed the results, noting that only 3% of its jobs had been analyzed and saying that personnel costs make up only a fourth of its financial burden. Nevertheless, Councilman Mitchell Englander said the employee pay issue contributed to his decision to vote against the increases.

“This was just one of many issues that need to be dealt with and not glossed over,” he said. Other council members who voted no were Jan Perry, Bernard C. Parks and Dennis Zine.

Tuesday’s increases may be only the beginning. Independent ratepayer advocate Fred Pickel told the council that the DWP’s financial plan called for possible increases of 7.8% in 2014, 7.6% in 2015 and 6% in 2016. Pickel said he would work to ensure that those increases are reduced. And DWP General Manager Ron Nichols said those estimates are “nowhere near as well vetted” as the rate hikes planned for the next two years.

Despite the smattering of complaints, the vote went much more smoothly than the last rate increase. Two years ago, the council and the DWP engaged in a brutal back-and-forth over the size and number of increases sought by Mayor Antonio Villaraigosa to support cleaner-burning energy.

By comparison, the increases approved Tuesday had broad support from business leaders, environmentalists, labor activists and backers of a new energy efficiency program. Councilman Tony Cardenas, a longtime DWP critic, said the utility had emerged from “the dark years” by speaking openly about its finances.

“Now the department is very open and very transparent,” he said.

Nichols said proceeds from the two increases will be used to help the DWP move to more renewable energy sources, such as solar and wind energy, and reduce pollution of seawater by DWP plants near the ocean. Part of the proceeds will go toward the utility’s energy efficiency program, which includes weatherproofing homes and has seen its budget boosted from $50 million in 2011-2012 to $126 million this fiscal year.

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-- David Zahniser at Los Angeles City Hall

Photo: Los Angeles Department of Water and Power wind farm in the Tehachapi Mountains. Credit: Al Seib / Los Angeles Times 

 

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