L.A. solar plan could raise DWP rates

A plan for adding 400 megawatts of solar power throughout Los Angeles could lead to electricity rate hikes for Department of Water and Power customers ranging from 2% to 8% over the next four years, according to figures provided by the utility.

The L.A. City Council plans to vote today to put a measure on the March 3 ballot ordering the DWP to place solar panels on the roofs and parking lots of government, commercial and industrial buildings by 2014.

The plan has come under fire from former DWP commission president Nick Patsaouras, who said it lacks an outside cost analysis and is being rushed to the ballot. Ratepayers will see their electrical bills go up 24% between 2006 and 2010 and cannot handle much more, he said.

“We are going to chase the middle class away from the city,” said Patsaouras, who is running for city controller.

DWP General Manager H. David Nahai said he won’t have a detailed financial analysis of the $3-billion solar plan until after it goes on the ballot. But his preliminary figures assume the initiative will attract $1.5 billion in federal tax credits -- money that would keep rate hikes to no more than 4% in 2011 or 2012.

If extra savings are found, the rate hikes would be limited to 2%, Nahai said.

The rate hikes could reach 8% if the city fails to secure its tax credits and other savings, according to the DWP’s cost formula. But DWP spokesman Joe Ramallo called that scenario “highly unlikely.”

“There are ways to structure this so that you can get the tax credits. It’s not an iffy thing,” he said.

The solar ballot measure was drafted by an advocacy group headed by two high-level officials with the International Brotherhood of Electrical Workers, the union that represents DWP workers. Under the proposal, the solar panels would be owned by the DWP and installed by the utility’s employees.

Mayor Antonio Villaraigosa and the City Council rushed to embrace the solar plan, bypassing the DWP commission and the city’s network of neighborhood councils. The Los Angeles County Federation of Labor, which plays a pivotal role in local elections, favors the ballot measure, saying it will create thousands of new “green jobs.”

The Los Angeles Area Chamber of Commerce offered a different view, calling the solar plan a “backroom deal” that excludes private-sector solar companies from participating. When the council voted to draft the ballot language, it did not receive favorable testimony from a single environmental group.

Under the proposal, the DWP’s new solar panels would generate enough electricity to power 100,000 homes. DWP officials said the average residential ratepayer will experience only a minor financial hit from the solar program.

A 2% increase would add $1.88 to the average monthly bill, which is currently $69.50. A 4% increase would add $2.78, while an 8% increase would add $5.56 to the monthly bill.

Councilwoman Wendy Greuel, a backer of the solar program, said DWP officials have assured her that ratepayers won’t see increases until 2011, and that any increases will be small.

“They have said they are confident with these numbers,” said Greuel, who is running against Patsaouras for city controller.

Meanwhile, current City Controller Laura Chick voiced dismay that the council bypassed the mayor’s own appointees.

“I’m in a state of shock that something this important, that is all about the DWP, has not been vetted by their commission in public hearings,” she said.

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david.zahniser@latimes.com

Times staff writer Phil Willon contributed to this report.