Less than a week after securing a July 1 electricity rate hike, the Board of Water and Power Commissioners is poised to approve today a $73.5 million transfer of surplus revenue from the Department of Water and Power to the city of Los Angeles.
In a letter to the board dated April 28 – the day after the City Council approved the electricity rate hike – DWP's chief operating officer, Raman Raj, and chief financial officer, Jeffery Peltola, recommended the transfer and interim DWP General Manager Austin Beutner approved it.
The letter stated that $73.5 million from the DWP's Power Revenue Fund is "available for transfer based on a review of the Power System's operations as of the close of the 2008/2009 fiscal year."
DWP used to remit 8 percent of its surplus revenue to the city every fiscal year without a problem.
In February, it remitted the first installment of $147 million. In March, however, Raj vowed to withhold the rest of the money – $73.5 million – if the council did not approve an electricity rate hike by the end of the month.
Councilwoman Janice Hahn called the move a "low blow," while Councilman Bernard Parks called it "extortion."
The dispute lasted weeks, but the board eventually acceded to the council's demand that the electricity rate hike be limited to six-tenths of a cent per kilowatt hour, which would increase customer's bills by an average of 4.8 percent a month.
Councilwoman Jan Perry's last-ditch attempt to continue to block the electricity rate hike failed, so the increase became final on April 28 and will be implemented July 1.
Hours after the vote, Perry and Councilman Dennis Zine filed a motion calling on their colleagues to assert jurisdiction over the board's April 20 appointment of Beutner.
They withdrew their motion after Beutner agreed to testify of his own volition.
In an interview with a local wire service, Beutner said he would tell the council about his plans to make the DWP "open, transparent and share information, to hopefully avoid some of the sturm and drang in the past."
Asked whether he agreed with some council members' complaints that the DWP lacked transparency and accountability, Beutner said, "I wouldn't comment on that. I wasn't part of it and all I can do is worry about how we move forward."