Los Angeles Customers to Pay 5% More

By Published On: June 5, 2014

Los Angeles Department of Water & Power customers face paying extra for power in the year ahead after the muni’s board increased the limit on pass-through energy costs June 3. Due to this week’s adjustment, the utility’s power bills are going to be 5 percent higher than they were a year ago, said muni ratepayer advocate Fred Pickel. That vote follows on the heels of last month’s adoption of a budget with no base-rate increase. Under the increase in the muni’s energy charge adjustment, the average residential customer has to pay $2.95/month more beginning July 1. The increase of 0.59 cents/kWh, however, is expected to decline by about a third by October 1 after the department recovers under collections needed to cover the cost of fuel and purchased power over the last 12 months, muni chief financial officer Philip Lieber told the board. The muni underestimated its energy costs for the last 12 months. Pickel explained that with the new adjustment, ratepayers’ power will cost 0.7 cents/kWh more than a year ago. Lieber said the latest upward adjustment not only is needed to recover past under collections, but also due to: • The rising price of natural gas burned in power plants; • The need to buy more carbon emissions allowances due to limited hydropower availability during the third year of drought; and • The cost of purchasing a gas-fired power plant in Nevada that is to replace power from the coal-fired Navajo Generating plant by 2015. The increase in the adjustment might have been higher, according to Lieber, if the price of renewable energy wasn’t falling. The pass-through to customers of fuel and purchased energy costs under the adjustment bring in about 45 percent of the muni’s power system revenue, Lieber said. Total power system operating revenues last year were about $3.2 billion.

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