DWP begins push for new $5 monthly rate increase
Posted: 11/15/2011 07:27:49 PM PST
Suffering from the success of its own conservation program, the Los Angeles Department of Water and Power on Tuesday began pushing for a new rate increase of more than $5 a month on average water bills.
The proposal to increase the utility's Water Quality Adjustment Factor is in addition to separate planned DWP increases of 5 percent in water rates and 7.5 percent in electricity, two proposals temporarily on hold until the city hires a ratepayer advocate.
But DWP head Ron Nichols wants the increase in the utility's Water Quality Adjustment Factor to move forward before a ratepayer advocate is in place, warning that the city could face penalties for missing deadlines to meet federal water quality standards.
The increase, he said, also is needed in part because the utility lost some $75 million in revenue through its own efforts to encourage water conservation and lower water rates at the time. Water usage has been reduced by 19 percent since the latest conservation efforts began two years ago.
"People are paying less for water," Nichols said. "Overall, water rates are down 6 percent this year compared to last year."
Nichols also hopes to avoid the political conflicts experienced last year between the Los Angeles City Council and the DWP over an effort to increase the Energy Cost Adjustment Factor that nearly lead to a downgrade of the DWP's credit rating.
"We are doing all we can to avoid those problems," Nichols said. "We are presenting this to the (DWP) board for their information and will ask them to approve this at their meeting in January."
Under the proposal, the average bill for a 1,500-square-foot residence would go from $40.30 a month this year to $45.91 next year. But DWP noted that the average was $44.47 last year, so the increase over the three-year period is relatively minimal.
For smaller commercial customers, the average would climb from $361.07 this year to $403.91 next year.
Nichols said he hopes the city can hire someone to fill the job for the new Office of Public Accountability and its ratepayer advocate and can review the two other rate requests the DWP has submitted.
Nichols said the DWP's capital obligations include covering five reservoirs, converting the Los Angeles Reservoir to ultraviolet light treatment and completing more than 100 other improvements as part of a 20-year program.
Jack Humphreville, who serves on a citizens committee that reviews DWP issues, said he supports the emergency increase.
"I surprised myself when I realized what I was saying," Humphreville said. "But the reality is, they have contracts out there and they need the money to live up to them. Not filling a contract is a bad thing."
The proposal to increase the utility's Water Quality Adjustment Factor is in addition to separate planned DWP increases of 5 percent in water rates and 7.5 percent in electricity, two proposals temporarily on hold until the city hires a ratepayer advocate.
But DWP head Ron Nichols wants the increase in the utility's Water Quality Adjustment Factor to move forward before a ratepayer advocate is in place, warning that the city could face penalties for missing deadlines to meet federal water quality standards.
The increase, he said, also is needed in part because the utility lost some $75 million in revenue through its own efforts to encourage water conservation and lower water rates at the time. Water usage has been reduced by 19 percent since the latest conservation efforts began two years ago.
"People are paying less for water," Nichols said. "Overall, water rates are down 6 percent this year compared to last year."
Nichols also hopes to avoid the political conflicts experienced last year between the Los Angeles City Council and the DWP over an effort to increase the Energy Cost Adjustment Factor that nearly lead to a downgrade of the DWP's credit rating.
"We are doing all we can to avoid those problems," Nichols said. "We are presenting this to the (DWP) board for their information and will ask them to approve this at their meeting in January."
Under the proposal, the average bill for a 1,500-square-foot residence would go from $40.30 a month this year to $45.91 next year. But DWP noted that the average was $44.47 last year, so the increase over the three-year period is relatively minimal.
For smaller commercial customers, the average would climb from $361.07 this year to $403.91 next year.
Nichols said he hopes the city can hire someone to fill the job for the new Office of Public Accountability and its ratepayer advocate and can review the two other rate requests the DWP has submitted.
Nichols said the DWP's capital obligations include covering five reservoirs, converting the Los Angeles Reservoir to ultraviolet light treatment and completing more than 100 other improvements as part of a 20-year program.
Jack Humphreville, who serves on a citizens committee that reviews DWP issues, said he supports the emergency increase.
"I surprised myself when I realized what I was saying," Humphreville said. "But the reality is, they have contracts out there and they need the money to live up to them. Not filling a contract is a bad thing."
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