ANAHEIM : Power, Water Rate Hikes to Be Weighed

Two months after it rejected a larger rate increase, the City Council tonight will consider a Utility Department proposal to increase the city’s average electric rate by 3.5% and its average water rate by 4.5% while cutting the utility work force.

Utility General Manager Edward K. Aghayan said the increases are necessary if larger rate hikes are to be avoided in the next two years. The rate increase is paired with a proposal to decrease the Utility Department’s staff by 15 employees next year, which would save the department $1.6 million a year.

Aghayan said the rate hikes are necessary because both the Metropolitan Water District, which supplies most of the city’s water, and its electric suppliers are increasing charges to the city. Water rates are also being affected by improvements to the city’s filtration plant, he said.

The 15 utility employees would be eliminated by contracting out some jobs to the private sector, through attrition and, if necessary, layoffs, Aghayan said.

In October, the council voted 3 to 1 to reject a proposed 5.5% increase in the water rate and a 4.5% increase in the electric rate, citing the poor economy. Aghayan said the department took a second look at its proposal and agreed to cut back the increases but he added that scrapping the rate-hike proposal altogether would not be feasible.

“There is not much else we can do,” he said. Compared to other cities, Anaheim would still have among the lowest utility rates if the rate hike is approved, Aghayan said. He added that he did not know how much the increase would cost the average consumer.

The proposal to be considered tonight calls for increasing the residential electric rate by 2.8%, the small business rate by 5%, the large business rate by 3.3% and the industrial rate by 3.8%.

Water rates would be increased by 5.3% for homes, 6.3% for apartments and 2.4% for businesses.

The city’s Utility Board, which advises the council on rate increases, has unanimously approved the proposed increases.

If no increase is passed, the utility department has told the council an electric rate hike of 16% will be needed in 1993 plus a 9% increase in 1994. Water rates would have to be raised by 17% in 1993 and 13% in 1994 if the proposal fails, the department said in a report.

But even if the proposal passes, the department says it will need an electric rate increase of 9% in 1993 plus a 7% increase in 1994. Water rates would still have to be increased by 12% in 1993 and again in 1994, the report said.

The council imposed a 2% tax on all utilities last October as part of the effort to shave a multimillion deficit in the city’s budget. It also agreed to a 10% increase in the water rate last May and an electric rate increase of 9% last year.

The council meeting begins at 5 p.m. at City Hall, 200 S. Anaheim Blvd.