Plan OKd to Cut Most Water Bills : Utilities: Council gives preliminary approval to committee’s compromise on rate restructuring. It aids Valley residents, but large or wasteful users would face increases.

In a move to end the long-running battle over Los Angeles’ water rates, the City Council gave preliminary approval Friday to a major rate restructuring that would reduce the water bills of most residents and businesses but increase the rates for large or wasteful users.

The top-to-bottom restructuring proposed by the council’s Ad Hoc Water Rate Restructuring Committee provides incentives to those who conserve water and is expected to reduce the water bills of 79% of residential customers and 65% of business users, officials said.

The new rate structure, approved 10 to 2, is similar to a plan proposed in July by a citizens commission set up by Mayor Tom Bradley. But it contains compromise provisions aimed at aiding San Fernando Valley residents, who would have been hardest-hit by earlier proposed rate changes because of their heavy use of water for landscape irrigation during the summer.

“People will pay based on what they use,” said Councilman Mark Ridley-Thomas, who chaired the committee that developed the plan. “If they use too much they will be penalized accordingly. This is a fairer water rate for all.”

But Councilman Hal Bernson, who voted against the new rate setup, said it would still disproportionately affect his Valley constituents. And Councilwoman Joan Milke Flores, who also opposed the measure, disagreed with a provision extending subsidies to apartment dwellers who pay for water as part of their rent.

Council members Ernani Bernardi, Joel Wachs and Michael Woo were not present for the vote.

The plan--which would result in far simpler water bills for the Department of Water and Power’s 650,000 customers--would establish a two-tier rate system for residential users. Any household using more than 200% of the median usage would pay a substantially higher rate for the excess amount. That median usage would increase during the summer, so Valley residents could use proportionally more water without being penalized.

The typical residential customer, who uses 24 billing units, or 18,000 gallons, every two months, would see his bill drop by about $5.50, to $41.52, according to the DWP.

Officials said the plan is “revenue-neutral,” raising the same amount of money as the current system but with a fairer and less cumbersome rate structure. If adopted next week, the new rate structure will become effective Jan. 1.

“This plan is designed to give more equity to the Valley,” said Jerry Gewe, a DWP engineer. “It basically allows the customers to tell the city (through their water use) if they want to use less water and defer their costs.”

Businesses would be subject to a similar two-tier system, in which they would pay a higher amount for exceeding 125% of their own average use based on consumption during the winter. Officials estimated that about 65% of commercial and industrial users would have lower rates under the new system and that most of the remainder would see increases of less than 10%.

The new rate system contains provisions designed for periods of water shortage. When water availability is low, the DWP would determine the degree of shortage and then, with council approval, increase water rates for those who exceed 200% of the median usage.

Bradley formed his committee in June, 1991, with the mission of imposing a mandatory conservation plan to deal with the prolonged drought. The council later demanded that a complete review of the rates be conducted as part of its approval of a 3.6% water rate hike that went into effect in January.

The council’s ad hoc committee reviewed the rate restructuring proposed by the mayor’s group and seven other alternatives before coming up with the compromise plan adopted Friday. A Bradley spokeswoman said the mayor “is satisfied that the consensus plan incorporates the important elements of the blue-ribbon commission’s recommendations.”