LA City Council steps into DWP's energy rate hike fray

A Los Angeles Department of Water and Power distribution center.
A Los Angeles Department of Water and Power distribution center.
Omar Bárcena/Flickr

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The Los Angeles City Council has voted unanimously to assert control over an energy rate hike proposed for customers of the city’s Department of Water and Power. LA’s mayor warns that without the rate hikes, Los Angeles could face bankruptcy. More on the story from KPCC's Molly Peterson.

In a memo sent to city council members Monday night, L.A. Mayor Antonio Villaraigosa called dumping energy rate hikes "the most immediate and direct route to bankruptcy the city could pursue." The city's chief administrative officer, Miguel Santana, said that without the increase, the DWP could face a downgraded bond rating that would make impossible a transfer of $220 million from the utility into L.A.'s general fund.

"If we do not receive the anticipated transfer we are going to face an additional burden in this fiscal year," Santana warned.

That language — especially the word "bankruptcy" — provoked City Councilman Ed Reyes. "We shouldn't even be using these terms! That term should not even be in that document ‘cause we are trying to build up credibility, we are trying to build up confidence and this verbiage doesn't do that," he said.

L.A. County's executive officer, several powerful business lobbying groups and some ratepayer activists oppose any rate hike. The mayor and his DWP commissioners have argued that the utility needs higher rates to pay for already-purchased power from coal — and to buy renewable energy in the future.

City Councilman Tony Cardenas isn't buying the argument. "I do agree that we need to go in a greener direction," he said. "However, at the same time, I can't trust that the Department of Water and Power is going to efficiently and responsibly use people’s green properly with this increase as it's spelled out today."

The council's Committee on Energy and the Environment will take up the issue at its next meeting.