Retail Energy Buyer

Subscribe to the free weekly newsletter written just for retail energy buyers

LADWP Sends Proposed Power Rate Hike to City Council for Deliberation

January 27, 2016 By Cheryl Kaften

The commissioners of the Los Angeles Board of Water and Power (LADWP) – the largest municipal water and power utility in the nation, serving 1.4 million electric customers and a total of 3.8 million residents and businesses – unanimously approved a multi-year power rate increase plan on January 19.

The proposed electric rate ordinance – which will provide average annual revenue increases of $144 million over each of the next five years, for a total of $720 million – now will be sent to the City Council for consideration.

Specifically, the ordinance provides for a $5.85 average monthly increase for residential customers using a typical 500 kilowatt-hours (kWh) per month over five years. That works out to an extra $1.17 per month every year of the new plan – or a 5.6 percent rate hike annually.

However, depending on the amount of power a customer uses, the electric rate increase actually will be spread over a much wider range, from $4.20 (250 kWh/month) to $26.30(900 kWh/month), over the five-year period.

The board’s action last week followed over six months of public outreach and incorporated input from residents, businesses, a variety of stakeholders, and the Office of Public Accountability/Ratepayer Advocate (OPA/RPA).

We are pleased that the Ratepayer Advocate has found that the power rate request to be ‘just and reasonable,’” LADWP commented after receiving the OPA/RPA report on the proposed power rate action. “… It will allow us to continue the transformation of our power system to a clean energy future that protects the environment, while complying with regulatory mandates.”

If the increase is approved by the City Council, LADWP intends to accelerate the replacement of aging power infrastructure; continue modernizing in-basin power plants to reduce ocean water cooling, improve efficiency, and ability to support renewable energy; support the growth of rooftop solar; and continue expanding renewable energy and energy efficiency programs to meet state climate change mandates.

 

“This power rate increase will fund two main things: meeting the local, state and federal mandates to ensure that we convert our power resources to renewables; and repairing our aging and broken infrastructure,” said Mel Levine, President of the Board of Water and Power. “Without this rate increase, we will default on our mandates, and risk power disruptions that would have astronomical costs and significant impacts to our quality of life.”

He added “While no elected official wants to put forth a rate increase … approving this rate proposal is the responsible thing to do.”

 

LADWP expects the proposed power rate ordinance to be considered by the City Council in the coming weeks.

Leave a reply


*