The Los Angeles City Council gave final approval for a 9 percent power rate hike for its Department of Water & Power on a 13-to-1 vote April 9. Proceeds from the hike--the first since 1992--largely are to be dedicated to rebuilding the muni’s aging distribution infrastructure, which has been implicated in an increasing number of blackouts within the sprawling city. The council approved the increase with extensive oversight provisions to ensure that the money is spent as promised and dedicated to system improvements and not siphoned off for other purposes. The council members who approved the rate increase said it was needed to prevent worsening blackouts. “I don’t want the people to be out of power,” said council member Tom LaBonge. Under the action, the department’s base rate will increase 2.9 percent next month, another 2.9 percent July 1, and a final 2.7 percent on July 1, 2009. Stiff opposition had delayed the hike for months before the city council. The city’s neighborhood councils were the main opponents, but eventually capitulated after the local lawmakers included extensive oversight provisions when they tentatively approved the increase April 2. Soledad Garcia, chair of the Los Angeles Neighborhood Council LADWP Oversight Committee, and some council members urged the department to put together a plain English plan outlining how the distribution system will be rebuilt with the new money. Part of the opposition stemmed from an earlier council decision to allow the department to pass through to its customers the rising cost of fuel and cost of moving to renewable energy. Previous to that decision last year, the department had to bear those costs under its existing revenues. However, council members and department officials pointed out that the pass-through is capped at four percent a year to protect ratepayers against volatility in natural gas prices. They also noted that the new rates increased the discount for low income customers from 15 to 20 percent and that the department pledges to provide more energy efficiency money to the city’s poor, which constitute 19 percent of its population. Another basis for the opposition was the past reputation of the department for cost overruns on contracts. However, activist Zuma Dogg credited both LADWP general manager David Nahai and its board of commissioners’ president Nick Patsaouras with seeking to end wasteful spending at the muni.
