Council Calls Water Rate Proposal an Attempt to Avoid Regulation : Utilities: It urges that Valley and hillside residents get special allowances. Brewery says plan would hit it hard.

In the opening round of City Council hearings on a proposed top-to-bottom restructuring of water rates, council members on Tuesday blasted the proposal as an end run to avoid regulation and urged that San Fernando Valley and hillside residents be given special allowances to use more water.

Anheuser Busch Inc., the city’s largest water user, said its rates would climb 10.8% to 13.8% under the proposal--leading to production cutbacks and work-force reductions. Ken Spiker, a lobbyist representing the brewery, asked the council to delay action on the plan until its full impact can be analyzed.

Under the rate proposal, endorsed by the Water and Power Commission and developed by the mayor’s Blue Ribbon Committee on Water Rates, big and wasteful residential and business users would pay higher rates than small or efficient users.

Proponents say that 71% of residential customers and 65% of business users would see reductions in their bills under the proposed rates structure.

The plan would establish a two-tier rate system for residential users under which any household consuming more than 175% of the median usage would pay a much higher rate for the extra amount.

Businesses would be subject to a similar two-tier system, under which they would pay a higher amount for exceeding 125% of their own average use based on consumption during winter months.

Like electrical rates, water rates would be automatically raised to accommodate changes in sales volume and costs of acquiring additional supplies.

DWP officials defended the proposal, saying it is more equitable than the current system, under which all users pay the same rate. Officials also said that automatic rate adjustments are necessary because of the delays in council deliberations on rate changes.

Dan Waters, DWP general manager, said the “financial stability of the department would be in jeopardy” without the automatic adjustments. He noted that council action on rates typically takes five to seven months.

Still, several council members vowed to change the proposal.

“I will not allow the council to give up its authority,” said Councilman Joel Wachs.

“It is unthinkable that rate increases would not come before elected officials,” added Councilman Zev Yaroslavsky.

Councilman Marvin Braude urged that the proposal be amended to give Valley and hillside residents more water at the lower rates for landscaping purposes.

Despite the criticisms, Councilman Mark Ridley-Thomas, chairman of the ad hoc committee on Water Rates Restructuring, said there is “substantial consensus” on the proposal.

He said proposed changes are more like fine tuning than an overhaul of the plan, which was developed after more than a year of work.

“No one is saying what we come up with will be perfect,” said Ridley-Thomas, “but it will be a substantial improvement.”

The committee will meet again in two weeks, and action by the full council is expected by late October.