DWP, city council agree: rates will rise almost 5% in July

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Commissioners for the Los Angeles Department of Water and Power have approved an energy rate hike of nearly 5 percent to take effect in July. KPCC's Molly Peterson reports.

The DWP board rejected this same increase in a heated battle with the L.A. City Council two weeks ago. Last night commission president Lee Kanon Alpert let everyone know that cooler heads prevail now.

"It has become apparent to the commission, is what we need to do is take a deep breath, work with the city council and the mayor's office, try and do what is best for the city of Los Angeles along with the Department of Water and Power," Alpert said.

With the general manager position vacant, the utility's chief operating officer Raman Raj reversed himself to endorse the hike. In doing so Raj made clear he thought a one-time increase was riskier than bigger increases over a year. He also warned that the DWP would be less likely to meet renewable energy goals with each passing day.

"This is going to make it almost impossible to meet the 20 percent by 2010 goal we established under your leadership," Raj said.

That's a blow to L.A. Mayor Antonio Villaraigosa, who has made aggressive energy policy a keystone of his environment hopes. DWP Assistant General Manager Laraine Paskett said not missing targets for the renewable portfolio standard, or RPS, would inflict economic harm on the utility.

"If we come back on RPS and we don't use as much carbon neutral mostly renewable energy and our emissions increase then our risk, our financial risk, will increase," Paskett said.

Paskett pointed out that the delay could put the DWP in a tough position when the state's greenhouse gas limits and penalties kick in. The DWP board and the city council must evaluate everything all over again before a rate increase goes forward in October.

The mayor's deputy Matt Szabo acknowledged that bigger bills won't make consumers happy in this economy. But he depicted the unanimous vote as a good first step.

"No solution - which is where we were last week - is simply unacceptable," he said. "And we worked with our allies on the council to achieve a reasonable compromise to ensure that particularly when the economy picks back up we'll be able to move forward with renewables."

The jury's out on how well that compromise will work. Water and power commissioners directed DWP's staff to report back at the next meeting about how the rate hike may slows progress for the utility's renewable energy and energy efficiency programs.