Mayor’s Panel Advises Keeping Winter Water Rates : Utilities: Committee votes to extend controversial lower price structure, which could be a boon for Valley homeowners.

A blue-ribbon panel has recommended that the city not re-implement a controversial water-rate system that sparked complaints by San Fernando Valley homeowners who last summer were hit with unexpectedly large water bills.

Instead, the Mayor’s Blue Ribbon Committee on Water Rates voted last week to keep in place a lower winter-rates structure through the summer, or at least until a more equitable rate system can be drafted.

Although keeping the lower winter rates in place could mean up to $3 million in lost revenue for the city’s Department of Water and Power, Mayor Richard Riordan apparently supports his panel’s recommendation.

“There is going to be a cost to this but it’s an interim measure designed to balance the needs of fairness and conservation,” said spokesman David Novak.

Riordan reconvened the advisory committee in September following a slew of complaints from Valley homeowners, whose bimonthly summer DWP bills ranged as high as $500 to $900.

But Jerry Gewe, the DWP’s liaison to the committee, said the panel is proposing the extension of winter rates because it missed its self-imposed February deadline to draft a new rate system. He said the committee now plans to propose a new rate system by the end of May.

“Basically, the panel is looking for a long-term solution that will create more equity and still further our conservation message,” he said.

Gewe said the recommendation approved by the panel Thursday actually will reduce DWP revenues by about $7 million this year. But the utility will only suffer a $3-million shortfall because it has nearly $4 million in surplus revenue from fees collected last year, after the new rate system was adopted, he said.

Under the rate system adopted in November, 1992, and enacted in January, 1993, the highest summer rates were 28% higher than the highest winter rates.

The rate system had two tiers for residential users: a high rate for customers who used more than twice the median amount of water and a lower rate for smaller users. That two-tier system was supposed to encourage water conservation by penalizing the big users.

But the system ended up creating huge water bills for those residents who have bigger lawns and live in the city’s hottest regions--such as Valley dwellers.

The recommendation to keep the winter rates in place will be considered March 15 by the DWP’s Board of Commissioners, then it will go before the City Council by April, where it is expected to face a tough sell.

Last year, when Valley council members criticized the rates and demanded a review of the system, several other council members argued that the new rate system freed DWP customers outside the Valley from having to subsidize Valley homeowners’ water rates.

Francine Oschin, an aide to Councilman Hal Bernson, said she does not expect the winter rates recommendation to win majority support from the council because of opposition from council members who supported the new rates.

“When it comes to the City Council, there are not going to be eight votes to keep the winter rates in place,” she said.

Oschin said Bernson, who represents the northwest portion of the Valley, opposes the new summer rates because they impose “punitive measures” on Valley residents.

Councilwoman Laura Chick, who represents the northeast part of the Valley, said she has also pushed for fair utility rates for Valley residents and backs the committee’s recommendation to temporarily keep the winter rates in place.

Chick also said she still has many unanswered questions about the rate structure, particularly regarding the surplus revenue that has been collected.