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L.A. water rates could rise by 8% this year, DWP manager says

June 1, 2010 |  5:18 pm

Customers of the Los Angeles Department of Water and Power could see water rate hikes of up to 8% in the coming year, the utility’s top executive said Tuesday.

DWP Interim General Manager Austin Beutner said his budget plan for the nation’s largest municipal utility would likely result in increases for the typical residential water customer of 4% to 6%. Those who use greater amounts could see rate hikes of 7% to 8%, he said.

Beutner, who also serves as Mayor Antonio Villaraigosa’s first deputy mayor and jobs czar, will ask the DWP board to approve his proposed budget when members meet June 15. At least a portion of the proposed water rate increases will be presented to the five-member board in October, with a vote by the City Council scheduled for the following month, according to a budget report.

The proposal comes a few months after Villaraigosa and the council engaged in a bruising standoff over proposed increases in electric rates. At one point, the mayor’s appointees at the DWP threatened to withhold $73.5 million from the city’s budget unless the council approved their package of rates.

Beutner said that the DWP would be able to make a $257-million transfer requested by the council as part of this year’s general fund budget. He also said money from the upcoming water rate increase would help the DWP comply with water quality regulations and pay for repairs to its aging equipment and buildings, such as trunk lines and pumping stations.

While those rates are expected to go up, Beutner said the utility is trying to scale back a proposed series of electricity rate hikes originally planned for the 2010-11 fiscal year.

In February, DWP officials said they would need four consecutive electric rate hikes –--between 21% and 22% for business customers and 9% and 28% for residential customers, depending on where they live and how much power they consume. Beutner said his plan for electric rate hikes would be unveiled in two weeks.

The DWP has 1.4 million electricity customers and nearly 666,000 water customers.

Beutner’s proposed budget trims expenses by $263 million, with some of the savings coming from a reduction in construction contracts and energy efficiency programs, as well as a hiring freeze on nonessential employees.

“None of the cuts will impact the reliability, safety or the quality of the service,” Beutner said.

Beutner said he is also looking for ways of selling, leasing or developing some of its vast real estate holdings over the coming years.

-- David Zahniser at Los Angeles City Hall