Los Angeles city officials proposed Friday to increase the amount of electricity they obtain from solar, wind and other renewable sources to 20% by 2017, but warned the shift to green power could boost utility rates.
The Department of Water and Power said any rate increase would be deferred at least three years, then gradually phased in over 13 years. Officials also held out the possibility that bills may not increase at all if bids from green-power producers come in lower than expected.
The DWP's preliminary plan was sent to the City Council, where members will have to balance their desire to develop green power with their aversion to raising constituents' utility rates.
"I agree we need to increase our renewable portfolio. We are all concerned about air quality and the environment," said Councilman Tony Cardenas, chairman of the council committee that oversees the DWP.
But, he added, "We also have to keep in mind the ratepayer."
The DWP took a beating last month when the council shot down its proposal to raise water rates by 18% to cover the increased costs of security and maintenance. After criticizing the DWP's spending habits, the council approved an 11% rate increase.
In drafting their latest proposal, DWP officials emphasized that renewable energy sources could be more expensive than gas and coal. During a public hearing this week, DWP Board Chairman Dominick Rubalcava warned that any change in the way the agency generates power could hurt residents' pocketbooks.
But Cardenas, who led the opposition to the 18% water rate increase, said a rate hike of up to $3 a month phased in over 13 years may be reasonable.
His Commerce, Energy and Natural Resources Committee will open hearings on the DWP green power proposal Tuesday, with the goal of finalizing a plan by the end of the year.
Only 2.2% of Los Angeles' electricity now comes from renewable energy sources, including solar, wind, geothermal and biomass power.
Bernadette Del Chiaro of the group Environment California was skeptical of the potential need for a rate increase.
"Our research shows meeting a true renewable portfolio standard of 20% by 2017 wouldn't necessarily cost the ratepayer anything and that under worst-case conditions, it would cost less than 50 cents a month," she said.
The DWP plan calls for the city to seek requests for competitive proposals from green-power firms this month and develop a preliminary plan detailing the mix and cost of green power by October.
The agency would hold public hearings and seek input from neighborhood councils through the fall and submit a final plan to the DWP board and City Council in January. That would allow the city to begin awarding contracts in February.