DWP’s Gas Bill to Climb Next Year

The Los Angeles Department of Water and Power expects to spend approximately $100 million more next year on natural gas because of escalating prices, an expense that could have been partially offset if officials had locked in lower prices when they had the chance.

The higher prices could make it more difficult for DWP to give extra help to the city’s general fund, as the department did this spring with a transfer of $29 million, said DWP spokesman Randy Howard.

Each year, the department transfers 7% of its revenue to the city’s coffers and occasionally helps out with extra money.

Officials said the DWP will still be able to transfer the 7%, estimated next year to be $151 million. This year’s transfer was $185 million.

Still, the news was a shock to City Council members, who gave the department permission to enter into contracts for lower gas rates last fall and discovered this month that officials did not seal the deals in time.

“It was disappointing,” said Council President Alex Padilla. “I hope the lesson has been learned and that they are more aggressive locking in low rates ... in the future.”

Some on the City Council had talked of paying for more police officers with extra DWP money.

Howard said the increased natural gas costs will not affect rates that residents pay for their power. He also said the deals to lock in low prices are complex, and finding companies to structure them can be difficult.

Still, Howard said, with hindsight officials have realized they “probably didn’t lock in as much as we should have.”