The Los Angeles City Council postponed a decision Tuesday on a plan to raise water and electrical rates despite a warning by the Department of Water and Power that a delay would increase the chances of hot-weather power outages.

DWP General Manager H. David Nahai voiced dismay about the one-week delay, saying that the higher rates are needed to fix aging water systems and electrical lines.

"We're going to get pushed back again, and it's not right," Nahai said moments before the vote. "We've got urgent needs in this city."

The DWP has been trying for nearly six months to win the council's approval of the phased-in rate hikes -- a combined 8.5% for electricity and 6.2% for water, both by July 2009.

Neighborhood councils are largely opposed to the increases, saying that the DWP should first complete a study to determine if money can be saved elsewhere. Foes of the rate hikes also fear that the council plans to increase other fees later this year.

Ratepayers "cannot afford this nickel- and dime-ing to death," said Lydia Grant, a member of the Sunland-Tujunga Neighborhood Council.

The increases are expected to generate an additional $263 million annually.

Opponents of the rate hikes have long criticized city officials for using $175 million in DWP power funds each year to balance the city budget. Over the last two years, Mayor Antonio Villaraigosa and the council also agreed to transfer $63 million in water funds to the city budget -- a move that was suspended in the wake of a lawsuit.

City officials expect a ruling on that case as early as this week.

DWP commission President Nick Patsaouras believes that the rate hikes will ultimately be approved. But he argued that the council must be willing to trust the DWP and its ongoing efforts to trim expenses.

"I can sit here and say with confidence that the waste of the past has been pretty much eliminated -- not 100%, but pretty much eliminated," he said.

david.zahniser@latimes.com