After months of discussions, meetings and revisions, the Los Angeles City Council on Wednesday gave preliminary approval to the first increase in water and power base rates in years.
With a 12-2 vote, the council gave its go-ahead to the Department of Water and Power's proposal to boost water rates 4.7% and power rates 3.86% each year for five years.
The DWP estimates that customers who use “typical” amounts of water and electricity will see a more modest 3% average annual increase to their monthly bills. At the end of five years, those customers would pay about $21 more per month than they do now, the utility says.
Utility officials have said they hope to implement the increase by April 1.
“This rate case … gets the department what it needs until we make a decision about what it is that we want,” said Councilman Felipe Fuentes, who chairs the council's Energy and Environment Committee. “We have to make sure that the department has the ability to function.”
Because the vote was not unanimous, the proposal must return to the council in the coming weeks for a procedural second reading.
Council President Pro Tem Mitch Englander and Councilman Gil Cedillo cast the dissenting votes.
“I cannot support a rate increase that essentially allows the city to delay governance, transparency and customer service reform,” Englander, who is running for a seat on the County Board of Supervisors, said in a statement.
Cedillo said in a statement that Angelenos are already “burdened enough” by high housing costs.
“It is important we have infrastructure replacements and energy efficiency goals, but as the councilman who represents some of the poorest areas of the city, I could not vote for another increase while in the midst of an affordable-housing crisis,” Cedillo said.
DWP officials have been campaigning for the $330-million water rate hike and a $720-million power rate increase for the last several months, even as they have been in discussions about governance reform after a series of scandals. They say the revenue is necessary to repair aging infrastructure and meet energy-related mandates.
It was the first increase to base rates since a power hike in 2012, DWP said. There have been no base rate increases to water since 2009.
Department General Manager Marcie Edwards said some had urged her to push for bigger hikes. But she and other officials said the rate proposals took into account how much work DWP can realistically accomplish and how much money the utility can spend.
Edwards also acknowledged that the utility has become “massively bureaucratized.”
On Wednesday, various members of the council harped on that theme, saying DWP needed reform to rebuild customer trust after a billing scandal and an audit that found cavalier spending of more than $40 million of ratepayer money by two utility-affiliated nonprofits. They mostly agreed to separate the rate discussion from talks about governance, however.
Councilman Paul Krekorian brandished an aged piece of pipe from the dais Wednesday that he said gave way seven years ago in a water main explosion on Coldwater Canyon Avenue.
“That's the pipe that destroyed our constituents' homes and businesses,” Krekorian said. “Anybody who thinks that this utility will continue to function … without investing heavily in its power and water infrastructure, right now, is living in a fantasy world.”
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