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Plans to raise rates for Los Angeles Department of Water and Power (LADWP) customers were put on hold Wednesday night after the Los Angeles City Council voted 13-0 to reject a proposal by the LADWP Board of Commissioners to raise the rates by 5.7 percent.
The LADWP Board met late Wednesday to consider a proposal approved the previous day by the city council that would have raised the rates by 4.5 percent. That proposal, which was authored by City Council President Eric Garcetti, 13th District, was viewed as a compromise to a plan put forth by the mayor that would have raised rates by between nine and 28 percent over the next 12 months. The LADWP Board rejected the council’s suggested 4.5 percent increase, however, and voted for a 5.7 percent increase that board members contended was necessary to keep the utility fiscally solvent and would allow for new programs designed to reduce the LADWP’s reliance on coal generated power. The city council voted at 9:10pm Wednesday to reject that plan, sending the proposal back to the LADWP Board for further review. LADWP rates will now remain the same for at least the next three months, because any proposal to raise rates had to be approved by April 1 in compliance with a state law that mandates that rate increases can only occur quarterly.
The city council approved the 4.5 percent rate hike on Tuesday in a tight vote of 8-6. That proposal would have increased rates by .6-cents per kilowatt hour per customer, with .5-cents of the money generated going towards keeping the LADWP financially solvent, and .1 cents per kilowatt hour going towards creating new jobs and moving towards using more environmentally-friendly technology. The mayor was seeking a .8-cent per kilowatt hour increase per customer to cover increased costs incurred by the LADWP and to expedite the goal of reducing the city’s reliance on coal powered energy and to increase green jobs within the city.
“I agree that the department must be fiscally solvent and that we must move toward a greener DWP, but in the middle of this economic recession, the timing just is not right for an increase of the size that had been proposed,” Garcetti said. “We called for greater accountability at DWP. We want to know that any increases to ratepayers will be used efficiently. We also do not want to lose businesses because utility rates get too high.”
The mayor’s proposal could have raised the rates as much as 2.7-cents per kilowatt-hour over the next several months, but many members of the city council said they were in favor of a reduced increase, or no increase at all. The six councilmembers who voted no were Bernard Parks, Paul Krekorian, Greig Smith, Dennis Zine, Richard Alarcon and Jose Huizar. Councilman Tom LaBonge, supported the increase that was approved Tuesday, and said he believes it is a fair compromise.
“No one wants to see anything raised, but you have to reinvest in the infrastructure. I think it is a more prudent increase to cover the costs,” LaBonge said. “It’s a balance, but it also takes the first steps in moving away from using coal. It is absolutely important that we make an investment in reducing our carbon footprint.”
The council’s proposal was met with mixed reactions locally, with some people stating that there is a need to look for new sources of revenue. Jeff Jacobergger, chair of the Mid City West Community Council, said they had opposed LADWP rate increases in the past, but had not taken sides with the latest proposal.
“There is a need to shift to other power sources than those that are currently being used, like coal, but on the other hand, I’m not sure there has been a big enough push to make that a reality,” Jacobergger said. “We need more control to make sure the money is being spent in the way it is supposed to be.”
Others members of the community, including Mansfield Avenue resident Eric Spielman, said he doesn’t believe the rates should be increased at all.
“Everything just keeps going up. When does it end?” Spielman said. “The city has a big budget problem, and they expect a bailout. Nobody I know is getting a bailout.”
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