The proposed two-year rate increases by the Los Angeles Department of Water and Power were presented by the leader of the department, General Manager Ron Nichols, to the leaders of the Valley's neighborhood councils Thursday evening at the monthly meeting of the Valley Alliance of Neighborhood Councils (VANC).
Representatives of 20 neighborhood councils listened intently as Nichols articulated the various legal mandates and infrastructure replacements necessary to maintain system reliability. On the power side, LADWP plans to terminate its participation in the Navajo coal project by 2015 through energy efficiency and renewable energy additions such as solar, wind, and geothermal. Natural gas will also be used.
He noted that the infrastructure of the power system is aging rapidly and needs accelerated repair and replacement, saying that "We have 41,000 fix-it tickets in the queue. It would take nearly three million work hours to catch up."
Nichols emphasized that local solar programs foster local jobs and the overall economy and provide customers power supply options, reporting that solar incentives and feed-in tariff programs are proposed to funded by at least $67 million during the next two years.
Overall, the power supply replacement program is proposed to be increased over the next two years from $691 million to $745 million, the power reliability program from $707 million to $896 million, and the customer opportunity programs from $135 million to $167 million.
Power rates, Nichols said, have had no base rate or reliability cost adjustment increase since July 2009 nor an energy or fuel cost adjustment since July 2010 and that regulatory mandates and priority programs cannot be completed without a rate increase this year.
Under the proposed rates, a typical residential customer (500 kWh/month) would experience a 2% increase, or $1.35 a month, during the first year and 3%, or $2.00 a month, during the second year. A high-use single family residential customer (1,000 kWh/month) would have a 6% increase, or $8.10 a month, during the first year and 7%, or $10.05 a month, during the second year. Actual amounts vary with usage. Rates for commercial customers would increase approximately 11% over the two years.
Nichols observed that the residential rates, even with the proposed increase, would be below the neighboring cities of Burbank, Glendale, and Pasadena as well as the rates of Southern California Edison and San Diego Gas and Electric, both of which have filed for increases ranging from 10.9 to 14.3%.
On the water side, LADWP plans to reduce its dependence on Metropolitan Water District purchases, which current average 52% of the City's total, by greater use of local sources and conservation. These include recycled water, stormwater capture, customer conservation, and groundwater cleanup and management which would see an increase from $71 million currently to $168 million in two years.
The safe drinking water program includes regulatory compliance, reservoir covers and bypasses, and trunkline replacement proposed to be funded at $308 million in two years compared with $191 million now.
The water system reliability program includes replacing aging pipeline and related infrastructure, including regulator stations, pumping stations, and maintaining the Los Angeles Aqueduct which runs from the Eastern Sierras. It would be increased from $275 million to $351 million in two years.
The water rate increases, not including the cost of purchased water from the MWD, is proposed to be increased for all customers 0.47% the first year and 4.46% the second year.
All proposed rate increases will be reviewed by Dr. Fred Pickel, the City's new ratepayer advocate, before being considered by the Board of Water and Power Commissioners and the City Council. Action on the power rates is anticipated by August 2012 with water rates to follow.
Further information on the proposed rate increases is available from the LADWP website: https://www.ladwp.com/ladwp/faces/wcnav_externalId/a-fr-prop-rates?_adf.ctrl-state=deuuekfbt_4&_afrLoop=154838877129000