The Los Angeles City Council on Friday rejected Mayor Antonio Villaraigosa's plan for boosting electric rates, sending the proposal back to the Department of Water and Power even as members promised to continue working on an alternative plan next week.
The decision, made on a 13-1 vote, was viewed by some as procedural, given that the council is scheduled to take up the issue of rate hikes again on Tuesday, first in a committee and then on the council floor. Several members have already said they think some form of increase is needed to safeguard the municipal utility's financial health.
Council President Eric Garcetti said he was concerned about the size of the increase planned by Villaraigosa over the next year and because the DWP is months from completing its plan for weaning the utility off coal.
"I've never been opposed to a responsible step forward" in increasing electric rates, Garcetti said. "But to take a giant leap in the biggest economic downturn since the Great Depression seems to be rash."
Villaraigosa criticized the vote, saying the council was taking the city backward in its effort to reduce the DWP's reliance on fossil fuels. "Instead of taking an historic opportunity to put the city on a permanent path to a sustainable, cleaner, greener future, the council voted to perpetuate the status quo at the Department of Water and Power," the mayor said in a statement.
In recent days, Villaraigosa had warned that a "no" vote would undermine the fiscal health of the city's electrical utility, rendering it incapable of following through on a promise to transfer $73 million to the city's struggling general fund, which pays for basic services. That, in turn, would cause the city to run out of money before June 30, the mayor said.
Villaraigosa has called for four consecutive rate hikes in order to meet his goal of securing at least 20% of the DWP's energy from renewable sources, such as wind, solar and geothermal power. Within 12 months, those rate hikes would result in increases to households of 9% to 28%, depending on how much power they use.
The first increase of 0.8 of a cent per kilowatt hour was approved by the DWP board on March 18. Councilman Richard Alarcon has called for the council to approve that proposal and warned that members could veto the other hikes if the DWP fails to meet a series of demands.
One of those is for the DWP to create the position of ratepayer advocate. Another is to ask DWP officials to spread the increases over two years instead of one.
Friday's vote meant a change in plans for the council, which was scheduled to decide next week whether to send the proposal back to the DWP. Councilwoman Jan Perry said she accelerated the timetable to let the DWP board know that it should schedule its own meeting next week.
That meeting would need to occur on Tuesday afternoon, after the council has conducted a meeting at which members can offer suggestions on the rate hikes, Perry said.
Joe Ramallo, a spokesman for the utility, had no comment after the vote. S. David Freeman, DWP interim general manager, said last week that his plan for weaning the DWP off coal would be ready this summer.