Posted:
April 7, 2008
Editor’s note: This story by Kerry Cavanaugh appeared April 3 in the Los Angeles Daily News.
“I’m voting for this because I don’t like it when the power goes out.”
L.A. City Councilman Tom
LaBonge
Socking Angelenos with higher water and power bills
beginning this summer, the Los Angeles City Council gave initial approval
Wednesday for the Department of Water and Power to raise rates to fund
improvements to the city’s aging utility infrastructure.
But several council members said they were convinced the
city must invest in its infrastructure quickly, particularly after Firefighter
Brent Lovrien was killed last week in a Westchester explosion triggered by a
faulty 60-year-old power cable.
“I don’t call it a freak accident. I call it a wake-up
call,” Councilman Bill Rosendahl said.
And others said the DWP needs more money to replace old
electrical circuits, power poles and cables to prevent blackouts that have
plagued the city over the past two summers.
“I’m voting for this because I don’t like it when the
power goes out,” Councilman Tom LaBonge said.
The council voted 11-0 in favor of the power-rate
increase and 8-3 in support of the water-rate jump.
Councilwoman Janice Hahn and Councilmen Dennis Zine and
Richard Alarcon voted no on the water-rate increase. Alarcon said he also
intended to vote against the power-rate hike, but accidentally cast the wrong
vote.
Both the power- and water-rate increases will be voted on
a second time next week.
When finalized, water rates will increase 3.1 percent
July 1 and another 3.1 percent July 1, 2009.
Power bills will increase 2.9 percent in June, another
2.9 percent July 1 and an additional 2.7 percent July 1, 2009.
The council’s decision establishes back-to-back
electricity increases in June and July, just as customers are most likely to
use more power for air conditioning.
Community members pleaded with the council to reject the
rate hikes, or at least to approve only one round.
“Our seniors cannot bear these increases,” said Margo
Harris with the Watts Neighborhood Council. “There is only so much an
individual can bear and with all the other increases in our society right now,
this would be unconscionable.”
But while DWP General Manager H. David Nahai acknowledged
that customers will see a large increase this summer, he said he did not want
to postpone the increases and delay funding for needed improvements.
“I hope the ratepayers will understand that the cost of
not having these rate increases far outweighs the cost of having them,” Nahai
said. “I think as they see the infrastructure begin to improve and as they see
an improvement in outages, that they will agree that this is an investment
worth making.”
When the water and power hikes are fully implemented
after July 2009, the average DWP customer will see the monthly bill increase by
$7.25 -- or about $87 a year, utility officials said.
But that does not include surcharges for the high price
of natural gas, environmentally friendly power projects and imported water that
critics say will end up boosting customer bills 18 percent to 20 percent more
over the next two years.
Together, rates and surcharges will boost the average
customer’s bill by roughly $130 a year.
Millions in revenue
Jack Humphreville with the DWP/Neighborhood Council
Oversight Committee said the utility has been crying poor, yet still generates
tens of millions of dollars in revenue and funds affordable-housing and job-
training programs for workers.
The utility also has come under fire for employee
salaries. A Daily News review of salary data last year showed that the average
DWP worker makes $76,949 a year -- nearly 20 percent more than the average
civilian city worker.
“My concern is that with all that cash they have, the
mayor is going to raid it to balance the budget,” Humphreville said. “We’re
going to go through this rate increase when they really don’t need it, and the
city is going to keep hitting up the DWP for all these other goodies.”
In 2004, former Mayor James Hahn transferred an extra $60
million from the DWP to help balance the city budget.
Mayor Antonio Villaraigosa’s office said revenue from the
rate increases will not be used to close a projected $450 million budget
deficit next year.
“Revenue generated by this rate adjustment will be used
to reinforce and maintain Los Angeles’ badly aging water and power
infrastructure,” said Matt Szabo, spokesman for the mayor.
Szabo would not guarantee that the mayor would not look
at other DWP revenues to balance the budget, but said it’s unlikely.
Neighborhood council activists also have complained that
DWP leaders have known about the utility’s old power and water system for years
but failed to act or save money.
DWP board President Nick Patsaouras said the council and
community won’t have to trust the utility; they would be able to track the work
done through quarterly progress reports.
Plus, an oversight committee of city officials and a
citizens oversight committee would monitor how the money is spent.
“It’s up to us to convince people,” Patsaouras said. “It
will take a lot of energy and time and commitment to see this through.”
The power-rate increases are supposed to help fund a
five-year, $1 billion power-reliability program that would replace power poles,
upgrade circuits and replace worn power cables.
Repairs to be made
The utility also intends to hire and train 337 more
employees to maintain the system.
The water-rate increase would pay to replace aging water
main lines, repair environmental damage in the Owens Valley -- the source of
most of the city’s water -- and cover open reservoirs to meet water-quality
requirements.
But West Valley Councilman Dennis Zine voted against the
water-rate increase because he said he is not convinced the infrastructure
needs upgrading.
“When it comes to water, I haven’t seen a dramatic
impact. I don’t see that infrastructure collapsing,” he said.
Councilwoman Janice Hahn said she couldn’t support the
current water-rate structure because residents on large lots in hot areas pay
less per gallon than other ratepayers. And that provides no incentive for
residents to conserve water or switch to drought-tolerant landscaping.
“I think people should pay for what they use. If you want
to have a large, green lawn, you should have to pay for that,” Hahn said.
Suit may stop transfer
Meanwhile, the DWP is awaiting results of a lawsuit that
will determine whether the utility can continue transferring roughly $30
million a year in excess water revenue to city coffers.
Taxpayer advocates have sued to block the annual
transfer, which moves 5 percent of water revenue to the city to help fund city
services.
With the current budget crunch, Los Angeles officials are
hoping the ruling will support the continuing transfer.
But if the city loses the lawsuit, the DWP will keep
$63.3 million that could reduce the need for more water-rate increases in the
future.