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Primary Source: DWP and city officials pitch their rate increase proposal

Dwp Shortly after unveiling on Monday a plan to increase rates by between 8% and 28% on Los Angeles electricity users to cover the fluctuating cost of coal and natural gas and boost the city's efforts to get more of its energy from renewable sources, Department of Water and Power General Manager S. David Freeman, environmental activists supporting the proposal and other city officials stopped by The Times to pitch their plan to reporters and editorial board members. Much of the discussion focused on how revenue generated by the so-called carbon surcharge on each customer of 2.7 cents per kilowatt-hour of electricity consumed would be divvied up to pay for the increasing cost of fossil fuels -- the city currently gets most of its energy from sources such as coal and natural gas -- and improving conservation. Also discussed were the potential financial consequences the city faces if its continues to generate much of its electricity in out-of-state coal-fired power plants and how this proposal signals a change in the DWP's mission from a utility that provides power cheaply to one that does so cleanly.

Below are audio clips of the discussion divided roughly by topic. Those in attendance at the discussion to support the proposal were Freeman; Matt Szabo, L.A. Mayor Antonio Villaraigosa's deputy chief of staff; David Libatique, the mayor's energy policy director; Rhonda Mills, the Center for Energy Efficiency and Renewable Technologies' Southern California director; and Bill Corcoran, senior regional representative for the Sierra Club. The Times staff members at the discussion who asked questions are editorial writers Dan Turner and Robert Green, and reporter David Zahniser.

An overview by S. David Freeman              (8:05)

Freeman introduces the city's proposal by first citing a recent Times editorial calling for increased conservation efforts during periods of high unemployment. He emphasized that the utility's efforts to increase its renewable energy use would be focused on creating jobs in Los Angeles.

What these rate increases will pay for        (5:58)

Editorial writer Dan Turner asks Freeman to which funds the revenue generated by the rate increase would be directed; Freeman responds, "We're deeply in the hole on the items in the ECAF that exist today like coal; railroad rates have gone up." He talks briefly about the process of increasing the DWP's surcharge, called the Energy Cost Adjustment Factor (or ECAF), noting that in 2006 the City Council and the utility, "in its infinite wisdom, quote end-quote," placed a cap on the ECAF increase of 1/10th of 1% per quarter, limiting the city's ability to pay for the fluctuating costs of both renewable and non-renewable energy sources. He points out that 2 cents of the surcharge will allow the DWP to "break even," while the 0.7 cents will be devoted to expanding the city's renewable energy portfolio.

Meeting L.A.'s renewable energy goals      (4:24)

Reporter David Zahniser asks how far the 0.7-cent increase gets the city to meeting Villaraigosa's goal of 40% renewable energy use by 2020. Freeman says he hopes the rate increase will get the city beyond its 20% goal by 2010, but without the rate increase the city's renewable energy use could drop to 13% over the next five years.

Dividing up the 2.7 cents                           (13:12)

Turner asks another question about what the 2.7 cents will pay for. Freeman says half of the 2-cent increase will pay for current energy efficiency efforts, and half will go toward covering the fluctuating price of coal. He also notes part of the revenue will be devoted to increased payments into the city treasury. Matt Szabo says the rate increase will also be "retrospective; it's because we've been under-collecting, which is why there is a need to have an increase of this size at all." There's also some discussion of the process by which the city will pass the DWP rate increases.

DWP bills compared to other utilities          (1:46)

Turner notes a consulting firm report that said the DWP rate increase would inflate its customers' bills to levels equal to or higher than private utilities. Freeman says the report didn't take into account the pending rate increases at those utilities.

Changing the DWP's mission                       (4:13)

Editorial writer Robert Greene asks Freeman about the DWP's departure from its mission of providing electricity cheaply to one that focuses on renewable electricity. Szabo predicts that DWP customers will actually see rates lower than other utilities' in the long term because of the city's efforts to make home energy efficiency modifications such as installing solar panels more accessible to middle-class ratepayers.

Weaning L.A. off coal                                  (2:00)

The the Center for Energy Efficiency and Renewable Technologies' Rhonda Mills speaks about the importance of reducing L.A.'s demand for coal-generated electricity, noting that the city could face hundreds of millions of dollars in fees should the federal government impose carbon penalties.

Salaries and benefits for DWP workers       (3:44)

Turner brings up the criticism raised whenever rates increase that unionized DWP workers receive generous pay and benefits compared to other city employees. Freeman replies that DWP workers receive salaries comparable to what other local utilities pay their employees.

DWP's lack of transparency                         (4:33)

Greene raises the issue of DWP transparency. Freeman says the DWP, while continuing to make improvements in this area, "isn't any more opaque" than the other publicly owned utilities he's run, noting that the highly technical nature of the DWP's work doesn't lend itself to transparency. He says the biggest change from when he previously headed the DWP during the 2001 energy crisis was that customers were happy "that we kept the lights on." He continues, "We weren't any more transparent then than we are now.... Now we're raising the electric rates in a time of recession." He says the DWP will hold meetings with the City Council more often.

Dirty energy and its consequences for L.A. (7:44)

The Sierra Club's Bill Corcoran says weaning the DWP off dirty energy won't happen overnight, so the city needs to start budgeting now for the transition. He also points out that "there is a suite of federal regulations forthcoming" that will force owners of coal power plants to undertake expensive cleanup efforts. Mills says, "It's at the peril of the rate payer, really, if in a few years if we don't do it."

Photo: The solar array on a covered parking lot at DWP headquarters in downtown Los Angeles.

Credit: Brian VanderBrug / Los Angeles Times

 

Comments () | Archives (10)

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JSA26

What a bunch of PR bologna!

We are in a severe recession where the citizens of this city are suffering severe hardships. Except of course DWP employees who just got a 20% raise.

On top of that they are feeding the city hundreds of millions of excess charges.

This is nothing but a tax increase during a recession.

It gets harder and harder to live in Los Angeles.

Mr. Mayor what the heck are you doing?

CalSolarEng

Last Summer LADWP switched to a tiered rate structure which set the stage for this increase in customers bills! These "fees" for the fluctuating price of oil are far from over.
Meanwhile, the cost of solar panels is less that it was last year. The faster energy prices rise, the quicker owners of solar power see a return on their solar investment. If you'd like to put your money into your home, instead of into the pockets of those passing bills like this one, start thinking about solar. It seems too expensive-- until you consider the price of having no control over the cost of energy!

Jay

My reason for writing is:

Absolutely NO to a DWP rate increase.

DWP employees recently received a 5 year contract with pay raises while other non-DWP City employees are taking pay cuts and receiving termination notices;

City residents are being killed with fees, fines, and taxes imposed by the City. For example, the $36 per month trash fee, taxes on every non-City owned utility which are just passed on to us, and monster-sized fines for parking citations and traffic violations;

My property tax bill this year has a $800 assessment for school construction. Unfortunately, LA schools are so bad that none of my grandchildren attend them!;

The City’s transfer of over $200 million from the DWP Power Fund to the City General Fund is continuing to steal the “profit” made by DWP on electricity and diverting it to general city expenditures. This money should be spent on system infrastructure improvements;

We absolutely don’t want any more “green doctors” and “green police” running around the City telling us what we cannot do and giving money to people who are not poor for upgrades to their homes;

Rate payers have enough trouble paying their DWP bills right now. We do not wish to finance the Mayor’s green initiatives, job programs, and his pet projects any longer.

The Mayor and the Council need, as Dr. Phil would say, to Get Real! Your constituents are going broke, businesses have already left the City, too many of us are unemployed right now, and those of us who are still earning and paying might be thinking about leaving the City for less costly and more pleasant places to live.

J.H Brown

Why wasn't John Q Citizen not invited to the discussion of lies? How come no one asked Freeman why it was being brought the back door? No one brought up the fact about the voters voting down Meassure B. The Times just gave DWP free press. The Times really think we are STUPID. The Times needs to start being honest with the citizens, and stop trying to screw us like the Mayor and his puppets.

yousmellfoul

Re: JSA26 -"DWP employees who just got a 20% raise."
&
Re: Jay - "DWP employees recently received a 5 year contract with pay raises..."

There is no new or recent contract. The current contract was made nearly five years ago. There is no 20% raise and there never has been anything near 20% raises. Past "raises" were actually cost of living increases based on the Consumer Price Index.
Where did you two get your info? Did you pull it out of your A's?

JSA26

Yousmellfoul well maybe it came out of my A but how about

http://latimesblogs.latimes.com/lanow/2009/12/dwps-100000-secretary-great-job-if-you-can-get-it.html

http://www.latimes.com/news/local/la-me-lopez9-2009dec09,1,6056845.column

or

"A five-year package of pay raises for employees of the Department and Water and Power sailed through the Los Angeles City Council today on a unanimous vote.

Council members agreed to give a 3.25% increase this year and four consecutive raises ranging from 2% to 4%, depending on inflation."

http://latimesblogs.latimes.com/lanow/2009/12/la-council-unanimously-approves-raise-for-dwp-employees.html

From what I've read and the response of my city council representative the DWP employees are looking at 5 years of RAISES that total about 20% .

Where are you getting your information sir?

  YSF Brown

Yousmellfoul:

JSA26& Jay are correct, and they comprehend what they read as I do. Where did you get your information from? You must be one of the ones receiving the raises. You need to learn how to count.

Nero's Fiddle

RED FLAG. Look at the hidden (or blatant) 2.7 cents paragraph. "...notes part of the revenue will be devoted to increased payments into the city treasury." Why, oh why, is the City profiting from this? Shouldn't this all be renewable? Isn't the DWP non-profit?

Craig Wilson

I am a city of LA resident and a DWP employee AND a candidate for City council. 2009 and 2013 Council dist 11. I say to voters : Keep on voting in Rosendahl and similar candidates who take MY union dues, from MY union , IBEW in exchange for yes votes on various measures and developers ideas etc. Don't blame me, the lowly worker. I have no say in what my union does. I disagree with 98% of the Socialist ideas my union embraces. Keep on voting in open borders candidates, gang loving mayors, spl order 40 lovers. sanctuary city policy lovers. You the voters have a choice.

armando rodriguez

what the point of clean renewable energy if my bill is which is $675.oo now will eventuality go up to$800.00.im am preparing to leave this state,and remember i am one of the people who pay taxes. i am leaving this state. in search of a cheaper place to live


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