Los Angeles City Council to review Department of Water and Power budget

The Los Angeles City Council is set to review the Department of Water and Power's proposed budget, which relies on increased water rates.

Under a spending plan DWP Interim General Manager Austin Beutner presented to the Board of Water and Power Commissioners last week, the city-owned utility would raise water rates by 4-6 percent for Tier 1 customers and 6-8 percent for Tier 2 customers, starting Jan. 1.

Meanwhile, a hike of 0.6 cents per kilowatt hour – equal to a nearly 5 percent increase in power bills – approved by the board and City Council a few months ago will take effect July 1.

Beutner said additional electricity rate hikes of 0.1 cent per kilowatt hour are under consideration for October, and again in January and April of next year.

He said the increases are needed to help the DWP comply with requirements set by industry regulators and state legislators. Those include: reducing carbon emissions; increasing renewable energy sources; avoiding the use of ocean water to cool off power plants; covering open reservoirs; and switching from chlorine to chloramine as a disinfectant.

To minimize the rate hikes, Beutner plans to sell or lease pieces of real estate owned by the DWP and not considered "strategic and core to the operating business."

He also decided to postpone the implementation of $75 million worth of projects, and impose a hiring freeze.

The last proposal may put a crimp in the mayor and council's plan to reduce layoffs by transferring employees to the self-supporting DWP, but Beutner explained that 20 to 30 cents out of every $1 paid by DWP customers is currently spent on labor.

The DWP's proposed budget is not subject to the approval of the council or mayor. However, the council does review the budget and – with a two-thirds vote of its members – can assert jurisdiction and potentially veto it.