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DWP rate hikes get initial OK

Pending a final council vote, the average monthly bills will rise $7.25 to replace aging water and power lines.

April 03, 2008|David Zahniser | Times Staff Writer

The Los Angeles City Council gave preliminary approval Wednesday to a package of water and electrical rate hikes, saying the increases are needed to replace crumbling water lines and aging electrical cable.

Council members said the five residential, commercial and industrial rate hikes -- two for water, three for electricity -- were needed to avert summer power outages and prevent old water pipes from causing sinkholes and other damage.

Councilman Bill Rosendahl went further, warning that unless the Department of Water and Power receives additional money, the city could see more incidents like last week's electrical explosion in Westchester, where one firefighter was killed and another injured.

"Some people called it a freak accident," said Rosendahl, who represents the neighborhood where the explosion occurred. "I call it a wake-up call."

City officials have said the death of Firefighter Brent Lovrien was the indirect result of decaying DWP equipment. A decades-old electrical cable with a cracked casing is believed to have served as a conduit for fumes that ignited when Lovrien turned on an electric saw.

Rosendahl's comments drew criticism from one constituent, who said the DWP, the nation's largest municipal utility, would have had money to upgrade its wiring if it hadn't contributed $175 million to balance the city budget this year. The DWP has transferred hundreds of millions of dollars over the last decade to pay for other city programs.

"This money was always intended for DWP's use, not the city," Westchester resident David Coffin wrote in an e-mail. "The fact that it was not used as intended may have contributed to the explosion in Westchester."

The council voted 11 to 0 for the electrical rate hikes and 8 to 3 for the water rate hikes, which together are expected to generate $272 million annually. Because the proposals failed to secure 12 votes, they will face another vote next week; under council rules, only eight votes will be needed then for approval.

The council approved the rate hikes despite objections from neighborhood council leaders, who said the DWP should first complete an industrial analysis -- a financial document produced by the utility every five years -- to determine if the rate hikes are needed.

Neighborhood activists also warned that households would be hard hit by the increases, which are expected to add $7.25 per month to the average bill when all of the increases are in effect.

"This is not a good thing," said Margo Harris, a member of the Watts Neighborhood Council. "You've got to know the damage that you're doing."

DWP General Manager H. David Nahai said his agency has agreed to expand the number of low-income customers eligible for discounted rates. And he too cited the Westchester explosion, saying the DWP's aging electrical system contributed to a "terrible and gut-wrenching tragedy."

"Last week was a horrific and very tangible example of the direction we're going in," he told the council.

After the vote, Nahai said he thought the Westchester explosion made the problem of deteriorating electrical equipment "more tangible" for council members. But Councilman Greig Smith took offense at the references to the Westchester tragedy, saying he specifically asked Nahai not to connect the two matters during his comments.

"It's taking the firefighter's death and linking it to a policy decision," Smith said. "We were going to make that decision anyway, and I don't think it's necessary."

The DWP plans to use the money generated by the rate hike to replace 60 miles of high-voltage electrical cable each year, said spokesman Joe Ramallo. Under the current plan, none of the money would go toward the city's 12,000 miles of secondary cable -- which was involved in the Westchester explosion, Ramallo said.

The DWP had spent six months trying to persuade the council to accept the increases, appearing before dozens of neighborhood groups as it sought to build a case for higher rates.

Over the last few weeks, DWP Commission President Nick Patsaouras said he agreed with critics of the utility who complained that too little of the agency's money has gone toward rebuilding electrical lines and too much toward high employee salaries.

Patsaouras also told the council that since Mayor Antonio Villaraigosa was elected, "the waste of the past has been pretty much eliminated" at the DWP.

Councilman Richard Alarcon disagreed, saying he suspected the utility continued to operate inefficiently. Still, during the council session, Alarcon accidentally cast his vote in favor of the two rate hikes.

A frequent critic of the DWP, Alarcon had his vote on the water rate increase changed from a "yes" to a "no," leaving the final tally at 8-3.



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