DWP plan would give Valley a rate break

Los Angeles Times Staff Writer

The Los Angeles Department of Water and Power has assembled a plan to charge many households in the San Fernando Valley lower rates for electricity during the summer compared with the rest of the city, on the grounds that those who live in a hotter climate deserve a break.

Even as it pushes a series of electrical rate hikes overall, the DWP has devised a separate rate structure for Valley power customers that would, in many cases, charge them less per kilowatt-hour than their counterparts south of Mulholland Drive -- particularly as the amount of power consumption rises.

The move has been greeted skeptically by four City Council members who represent low-income neighborhoods south of the Santa Monica Mountains, who questioned whether it would reward a section of the city with large numbers of single-family homes.


Council President Eric Garcetti, who serves on the council’s Energy and Environment Committee, said he wanted to ensure that the plan didn’t leave “working-class folks in one part of the city subsidizing wealthier folks in another.”

“Yes, the Valley is hotter. But the flats of South L.A. are also hotter than parts of West L.A.,” he said. “So we have to be a lot more nuanced than we have been about it. Temperature cannot be the dominant factor.”

The temperature-zone proposal was incorporated into a package of electrical and water rate hikes that is scheduled to go before the Energy and Environment Committee today.

Because of the questions about the temperature plan, the committee will take up only the rate hikes -- not the climate-zone proposal or a larger request to restructure electrical rates.

The DWP’s complicated rate-restructuring plan has been pitched to environmental groups as a conservation-minded initiative because it would force households in all parts of the city to pay higher rates when they consume significantly larger quantities of power.

Under the plan, the DWP would create three levels of summer power rates.

Yet the proposal also creates two “temperature zones,” with rates differing between the Valley and the rest of the city during the summer, depending on the level of power consumed.


For example, Valley households would begin paying a higher rate for power once they have exceeded 1,000 kilowatt-hours on their bimonthly bills.

By comparison, households in the remainder of the city would begin paying a higher rate once they passed 700 kilowatt-hours on their bimonthly bills.

Mayor Antonio Villaraigosa has backed the rate-restructuring plan, saying he sees no contradiction between the effort to encourage conservation and the extra consideration for the Valley.

“Their temperatures are so much more extreme, so you have to take that into account,” he said Monday. “It would be unfair otherwise.”

DWP officials say they based the Valley temperature zone on a climate map created by the California Public Utilities Commission.

The map, which is used by such utilities as Southern California Edison, places the Valley in the same climate zone as the Santa Clarita Valley and parts of the Inland Empire, said Jeffery Peltola, the DWP’s director of budget, rates and efficiency.


Peltola said he pushed for the new temperature zone after he went out into neighborhoods to discuss the DWP’s proposed rate hikes.

“We got feedback from the neighborhood councils who said, ‘You’re not accounting for the climate change in the Valley,’ ” he said. “I may have looked like I wasn’t listening, but I was listening.”

Villaraigosa’s rate-restructuring plan was approved last month by the DWP commission, whose members are appointed by the mayor. Although Southern California Edison relies on five levels of pricing, the DWP went with only three to ensure that customers wouldn’t experience a “rate shock,” Peltola said.

Councilwoman Wendy Greuel, who represents part of the Valley, said she was open to the notion of a separate temperature zone, especially since such a system already exists for DWP water customers.

But she argued that the DWP would need to explain clearly why a separate Valley zone would be equitable.

“It can’t just be for the reason that you want to get Valley” support for a rate hike, she said. “You have to demonstrate that this is a fair and useful policy.”


Peltola said his agency determined that Valley households need 1,000 kilowatt-hours per bimonthly billing cycle during the summer to pay for basic necessities, such as refrigeration and other appliances -- a calculation that does not include air-conditioning. Those who stay under 1,000 kilowatt-hours would pay the lowest rate, he said.

By comparison, the DWP concluded that other neighborhoods in Los Angeles need only 700 kilowatt-hours per billing cycle to cover their basics during the summer.

The rate differential expands as Valley households use more power, according to the plan. For example, Valley residents would begin paying the most expensive electrical rate once they exceed 3,000 kilowatt-hours in a billing cycle. By comparison, neighborhoods in the remainder of the city would start paying the most expensive rate once they exceed 2,100 kilowatt-hours.

Councilwoman Jan Perry, who represents part of South Los Angeles, said she believed Valley residents know before they buy a home that they are going to be paying more for electricity. Perry said she was not ready to back the separate zone.

“Do I think it’s equitable? I’m not convinced that it is, no,” she said. “Because, regardless of where you live, there are always unique issues you have to deal with.”