The board that oversees the Los Angeles Department of Water and Power on Tuesday approved the utility’s plan to increase water rates about 4.7% each year over the next five years.
Under the proposal, typical customers would pay about $15 extra — about 26% more — on their monthly bills by the end of the five-year increase, according to DWP estimates.
The new rate structure, approved in a 4-0 vote, would also increase the number of pricing tiers to four from two and charge the highest rates to customers who use the most water.
Utility officials have said they need the approximately $330 million in additional revenue to repair aging water pipes and other infrastructure.
Board President Mel Levine called the water rate hike “critically important.”
“The risk of not passing this increase is certainly substantially greater than any risk of passing it,” Levine said.
Last year, two massive trunk lines ruptured on Sunset Boulevard, flooding UCLA and the surrounding area with millions of gallons of water.
The flooding damaged cars and ruined Pauley Pavilion’s basketball court, and focused attention on the city’s deteriorating pipes. A Times analysis this year of the department’s 6,730-mile water main system found that the agency had given 6% of the pipes grades of D and F.
The department says it has a $1.3-billion plan to replace all the pipes now ranked D and F by 2025.
In a presentation to the DWP board Tuesday, Chief Financial Officer Jeff Peltola said 78% of water revenue would go to infrastructure. Much of the rest would be invested in developing local water sources.
“This isn’t perfect. I’m not even sure that it’s good,” Commissioner Michael Fleming said. “But it’s unquestionably needed and necessary.”
The board also heard from about a dozen speakers. Although some worried that the increases would have a detrimental effect on low-income residents, others wondered whether the rate increase was high enough to cover the escalating costs of pipe repair and replacement.
The city’s ratepayer advocate said last week that the water rate proposal was “reasonable” and on Monday, Mayor Eric Garcetti announced his support for the plan.
“No one likes to raise rates,” Garcetti said in a statement. “But the price of inaction will be much higher for all of L.A.'s residents.”
The water rate ordinance approved Tuesday had been slightly modified from the department’s initial proposal released in July.
Officials said the increase grew slightly to reflect new costs connected to dust mitigation in the Owens Valley, high levels of water conservation during the drought and other changes.
They cautioned that how much residents ultimately pay will fluctuate depending on the weather and how much they conserve.
Under the DWP’s plan, customers who use the most water would be hit with the largest increases to their monthly bills.
A household that used about 6,000 gallons of water a month would see its monthly bill increase by only about $5 after five years, or about 14%. The monthly bill for a household using about 20,000 gallons of water a month would increase about $55 after five years — a 41% increase.
The DWP has also proposed raising electricity rates. The Board of Water and Power Commissioners is expected to discuss the proposed power rate increase Jan. 5.
Any ordinance related to water and power rates must also be approved by the City Council. DWP officials want the increases to take effect by April 1.