Residents complain, GWP officials explain proposed electricity rate hikes

At Glendale Water & Power’s final community meeting Thursday on a series of proposed electricity rate hikes, some residents said they understood the need, they just wish it wasn’t such a steep increase.

“We are all hurting,” said resident Edward Haroutunian at the Pacific Edison Community Center Thursday night. “Come up with a more realistic figure.”

Officials have proposed five years of what they call “significant” rate hikes, beginning with an average jump of 8%, followed by further increases of 7%, 5%, 2% and 2% in subsequent consecutive years. They warned that without the rate hikes, the utility would become insolvent by 2017.

Resident Judy Lan suggested officials flip the rate changes, pushing the larger increases to the far-out years. But doing that wouldn’t support a $60-million bond issuance the utility wants for badly needed capital improvements, said City Manager Scott Ochoa.

“This is the means for us to afford the bond, to do the work,” Ochoa said.

The City Council approved five years of water-rate increases that gradually grew over time in March 2012, but those changes didn’t immediately erase the water department’s deficit. The water side of the utility isn’t expected to be back in the black until 2016.

Officials said the electric utility dug itself into a hole when officials there spent $100 million since 2007 on capital projects and maintenance without imposing a rate increase. That drove down the electricity side’s reserves, which are now at about $60 million — far below the $124 million called for in city policy.

In addition to spending beyond their means, utility officials are faced with meeting stringent state standards on renewable energy, such as wind and solar power, which is expensive to acquire.

As at several other community meetings about the rising rates, residents also complained about a controversial annual transfer of about $21 million from the electric side of Glendale Water & Power to the city’s General Fund, which pays for most public services.

Officials say the transfer is necessary to support the level of police, fire, library and other general services that residents have come to expect from the city. At a council meeting Tuesday, Ochoa said getting rid of the transfer would mean the city would have to slash the workforce by 131 positions.

Last year, the city axed about 150 positions to close a $15.4-million budget gap.

Critics call the transfer a backdoor tax because they say it artificially inflates utility rates. The Los Angeles County Civil Grand Jury recommended the city put the matter on the ballot for a special election. But city officials have lambasted the grand jury’s finding as erroneous and politically motivated.

“Even if you eliminate the transfer, you still end up at a loss,” Ochoa said. “That rate has to go up.”

Resident Bob DeWees said he understood the need for higher rates, but was upset that officials had kept the utility revenue transfer out of a 30-minute presentation they made at the beginning of the meeting.

“It’s a bad taste in people’s mouths,” DeWees said.

But even more troubling to resident Roseanne Longtain was the light attendance at the meeting. There were about 15 people in the audience, about equal to the number of city staffers.

“It’s disconcerting to see so few people here,” she said.

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