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Ratepayer advocate recommends stabilizing DWP, shaking up LA's labor politics

The LADWP's John Ferraro Building
The LADWP's John Ferraro Building
T Hoffarth/Flickr (Creative Commons-licensed)

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The ratepayer advocate for the city of Los Angeles has recommended that water and power commissioners raise electricity rates to keep the publicly-owned utility stable. Some of his other comments could shake up LA city politics.

A citizen's committee appointed Fred Pickel to increase transparency about the LA Department of Water and Power's rates and finances. Pickel says an immediate hike in energy rates would pay for capital expenses the utility must incur under state and federal law. He also recommended that the DWP keep investing in conservation measures, because ratepayers demand them.

"It's the most commonly asked for component in every meeting I attended. 'How can you help me with conservation?'," Pickel said.

In the longer term, though, Pickel questioned DWP's efforts to own - not just operate - its own power, because energy market analysts forecast that the market will shrink. On top of that, he said the utility's labor costs are too high. 

"We need to work on collaborative efforts between the city, DWP and labor on contracting out and bringing salary and benefits closer to market rates," Pickel said. "That will be challenging but the organization as a whole will be much riskier without successful collaboration on that."

DWP's current contract with IBEW Local 18 - the union that represents many of its employees - expires in two years. Pickel's next move will be reporting on water rates, late next week. The DWP board and city council  expect to decide on those rates in September. 

LADWP has posted a copy of Pickel's presentation today, though Pickel did say that there were some small errors on one of the slides. In a written release, Ron Nichols expressed approval of how Pickel's doing his job. "The Ratepayer Advocate recognizes that LADWP has taken significant steps to cut costs and it affirms the approximate 10% system average power rate increase proposed by LADWP," Nichols said. 

Because it's almost fall when the rates discussion picks up again in earnest, here's a video LADWP recently released explaining why rates are going up.