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DWP customers to weigh in on proposed electric rate hike

March 18, 2010 |  7:18 am

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