Cost of Water Conservation Could Be an Increase in Fees

Drought-conscious Los Angeles residents could be rewarded with higher utility bills for conserving almost twice as much water as required if a Department of Water and Power proposal to raise water rates by 11% is approved.

The DWP is also seeking to raise electricity rates by 7%, the first increase in power rates in three years.

The proposed changes, which represent an annual increase of about $39.2 million in water revenues and about $133.6 million in power bills, would begin Oct. 1 if approved by the DWP Board of Commissioners and the City Council.

The DWP held the first of two hearings on the proposals Tuesday night. The second public hearing will be held at 7 tonight at Carpenters Hall in Van Nuys.

An ironic byproduct of the city’s mandatory water conservation effort is that it has created revenue problems for the DWP, according to Jerry Gewe, manager of water resources planning. The DWP has costs that remain relatively steady regardless of the amount of water it sells, Gewe said.

City law requires a 15% reduction in water use, but customers thus far have cut back consumption by nearly 30%. “It’s been a superb response, a magnificent display of public spirit,” Gewe said.

But by using less water, residents have been paying smaller water bills, DWP officials said, and that has cut the district’s revenue by about $13 million since the mandatory conservation program began in March.

In all, officials said they are anticipating a $24-million shortfall in water revenues. In addition to lower sales, the department is also faced with increased costs for improved water quality as well as reclamation and conservation programs, officials said. Overall, the water system budget will increase $25.8 million, to $184.9 million this year.

Officials said an electricity rate increase is also necessary to cover the increasing costs of materials and services since the last increase in 1988. For instance, DWP officials said, the cost of electric transformers is up 38%, underground cable is up 65%, the hourly costs of a worker are up 14% and even utility poles cost about 4% more than they did three years ago.

DWP officials also said they are planning to invest $193 million over the next four years to bring power generating stations into compliance with new environmental laws.

The average homeowner’s monthly electric bill would rise from $40.70 to about $43.60 if the proposal is adopted.

Bills for water use may not fully reflect the proposed 11% rate increase.

Officials are projecting that the average monthly household bill would increase from $22.49 to $23.04, an increase of 55 cents or about 2.5%.

Much of the proposed 11% rate increase will be offset by lower usage, Gewe said.

If the cutbacks continue near 30%, the MWD surcharge reduction will about match the 11% rate increase, and residents’ bills will remain about the same, Gewe said. But if the cutbacks slip to the required 15%, the general rate increase will cause bills to rise by about 2.5%.