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Some in L.A. pleased that electricity rate hikes have stalled

April 1, 2010 |  1:49 pm

While City Hall scrambled Thursday after the City Council effectively killed the mayor's proposed electricity rate hike, some residents expressed relief that the increase was being put off -- at least for now.

"The city has no conscience. This is coming out of our pockets," said Sally Kroener as she shopped at a Sherman Oaks Ralphs supermarket Thursday morning.

The Los Angeles City Council and the Los Angeles Department of Water and Power dueled over rate increases late Wednesday, with each side rejecting the other's proposal to boost the price of electricity.

By the end of the night, the standoff had effectively killed the effort by Mayor Antonio Villaraigosa, the council and the DWP to impose higher rates for the next three months. That's because Thursday was the deadline to sign off on the increases, which can only be imposed on a quarterly basis under California law, officials on both sides of the dispute said.

Van Nuys resident Sam Manocchio retired just months ago and is getting by on his pension and savings. The 81-year-old says a rate hike wouldn't break the bank but might force him to pare down on vacations and other frills he planned on as a retiree.

"They keep telling us there's a shortage. And they raise the prices, but they never bring them back down," he said.

He said he understands the need for residents to contribute their fair share, but not to fund the "inflated salaries of DWP execs."

"These guys are living high. If you're gonna raise the prices on the people, they should cut their own salaries first," he said. Though he said another secession initiative would "just create another bureaucracy," the Van Nuys homeowner does think the San Fernando Valley gets a raw deal.

"In the Valley, you have to run your AC, and that uses a lot of power. And once you use a certain amount, they penalize you."

Kroener strolled into the Sherman Oaks Ralphs supermarket Thursday morning with reusable bags in tow. She said she can't stand being wasteful, and wished the DWP would steward its resources as well.

The 69-year-old said her husband has closely monitored their DWP bill for years. Despite skimping on heating and air conditioning, their bill has risen.

"It's all of these taxes," she said.

With the hot-weather months approaching, she said she worries what a rate increase would do to her many friends on fixed incomes.

The power struggle over the rates began Wednesday evening, when Villaraigosa's appointees on the DWP board met to review the City Council's proposal for a 4.5% electricity rate hike.

In a unanimous vote, the DWP board opted for a larger increase that was closer to the amount the mayor had sought to pay for his renewable-energy proposals. In doing so, the panel ignored the wishes of council members Eric Garcetti and Jan Perry, who appeared at the meeting to ask the board to respect the council's proposed rate increase of 0.6 cents per kilowatt hour, on the grounds that it would have a softer financial impact on ratepayers.

Instead, the board voted for an increase of 0.7 cents per kilowatt hour, which would translate into a 5.7% rate hike for residents and businesses, according to a high-level utility executive. DWP board members portrayed that as a compromise, saying it showed respect for the council and the mayor -- who wanted an increase of 0.8 cents per kilowatt hour.

The council responded swiftly. At 9:10 p.m., less than an hour after the DWP board's vote, the council voted 13 to 0 to veto the rate increase and send it back to the utility for more work. The exchange eliminated any chance for either plan to go into effect on Thursday, as originally planned, Perry said.

"They overplayed their hand, and they didn't need to," said Perry, who heads the council's Energy and Environment Committee. "The council had voted on a reasonable proposal, and they still rejected it."

Not everyone is directing their frustration at the DWP.

"Just hard times," said Dan Hull, 31. The Sherman Oaks resident and his wife have a baby on the way -- and were planning on moving into a house soon. They were already expecting increased energy bills with the move, but the potential hike would be an added burden.

"I'm bummed. Just another added cost at a bad time" Hull said.

-- Robert Faturechi in Van Nuys and David Zahniser at L.A. City Hall

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