Bowing to continuing distrust on the part of city residents, the Los Angeles City Council March 25 balked again at approving a rate hike requested by the Los Angeles Department of Water & Power to upgrade its aging infrastructure. “We’re going to get pushed back again,” a frustrated David Nahai, LADWP general manager told the council. “It’s not right. We have urgent needs.” On an 11-2 vote, the council backed continuing the matter until April 2 after a stream of neighborhood council activists voiced opposition to the 9 percent hike, which would be levied in three steps by July 2010. The delay marked at least the third continuance of the proposed rate hike, which the department is planning to use largely to rebuild its shrinking staff and decrepit distribution system. The muni’s infrastructure has been implicated in increasingly frequent blackouts. “The infrastructure needs to be repaired,” agreed council member Jan Perry. “The need is clear, but there is hesitation. Some of it has to do with trust.” Residents testifying to the council complained that the department has not minded its money carefully and that they already have seen increases in their power bills as a result of the pass-through of higher fuel costs. They also questioned the timing of the hike, in light of rising gasoline and food prices and a shakier economic outlook than in many years. “We feel the rate increases will destabilize the ‘bread basket’ middle class and working class neighborhoods,” said Diane Rose of the Encino Neighborhood Council. To ameliorate such economic worries, as well as concerns about whether the department would spend the money improving infrastructure, council member Greig Smith proposed authorizing the first increase of 2.9 percent in the three-step hike, but then requiring council approval before the subsequent two steps could take effect. Other members of the council expressed interest in his proposal, although it could not be adopted without redrafting the whole proposal, a city attorney advised. In reaction, Nahai told the council that such a strategy would be akin to approving construction of only the first 20 stories of a 50 story building and then having to come back to get the money needed to build the next 30 stories. “You can’t build that way,” he said. “You keep talking about reliability,” he continued, “but now you’re coming back to cut us off at the knees.” As an alternative, the department has supported regular reports on how its spends the money to carry out its five-year infrastructure upgrade plan, as well as appointment of an oversight board that would hold it accountable to sticking to the blueprint. The department has faced an uphill struggle in arguing its rate case, introduced last spring. It would be the first general power rate increase the department has seen since 1992. However, the request comes after several controversies at the department under previous general managers and boards of commissioners. They included mismanagement of contracts and what some called an exorbitant pay raise for workers. However, council president Eric Garcetti credited Nahai and the current board of commissioners appointed by Los Angeles Mayor Antonio Villaraigosa with changing the culture of the department. “We have made tremendous progress,” he said.
