When the Los Angeles City Council gave preliminary approval to electrical and water rate hikes last week, the debate focused almost exclusively on a series of modest, single-digit increases planned between now and summer 2009.
In reality, electricity bills will go up at least 23% over a four-year period, thanks to the Department of Water and Power's decision to ask ratepayers to absorb the higher cost of natural gas and the switch to other environmentally friendly forms of energy.
Mayor Antonio Villaraigosa's appointees on the DWP board have been quietly adding a 1% surcharge on electrical bills every three months since September 2006, decisions that do not need council approval.
By summer 2010, 15 of those surcharges will have been imposed to pay for the rising cost of natural gas and for renewable fuel sources including wind, DWP officials said.
The increases are on top of the council's three planned electrical rate hikes, which come up for a final vote today and will total nearly 9% when all are in effect.
Soledad Garcia, who heads a group of neighborhood council members that opposes the rate hikes, said Tuesday that the DWP broached the subject of the surcharges months ago. But she said the utility has avoided showing the long-term effect on customers.
"Has it been straightforward? No," Garcia said. "When they talk about the rate increases, [the surcharge] is never included."
Utility officials say they regularly discussed the surcharges during information sessions with homeowner groups and neighborhood councils. And DWP General Manager H. David Nahai said the council gave his utility the authority to pass the rising cost of power on to customers in 2006, as part of an effort to help the utility deal with fluctuating natural gas prices.
The increases were limited to no more than 4% a year. Because that decision was made two years ago, no one thought to reopen it during the current rate hike debate, he said.
"It's been going on for a year and a half now, and there has been no complaint about it because it's capped," he said.
The average monthly household electricity bill was $52.79 in fall 2006, according to DWP spokesman Joe Ramallo. By summer 2010, the various rate hikes and surcharges will bring the bill to $65.04, he said.
Still, DWP officials argue that even after all the increases and surcharges have been imposed, power rates will remain lower than those of other utilities, from investor-owned Southern California Edison to municipal systems in Pasadena and San Francisco. The DWP is the nation's largest publicly owned utility.
