LADWP board to begin rate-increase review

The Los Angeles Department of Water and Power this week begins the process of raising rates to add up to $270 million per year to update its aging pipe system and power grid.

City power rates last went up in 2012, the base water rate hasn't risen since 2009.

The utility has been studying its operations and efficiency to make a public case to justify the increases, which must win approval from the DWP's board.

The proposal would also have to get the approval of the City Council and mayor. The next step is scheduled for Wednesday, when consultants sketch out for the DWP Board of Commissioners how to raise the money.

The agency says it needs about $90 million more per year in spending to replace more miles of old water pipes than it is installing now. At its  current pace, it would take about 250 years to replace all of DWP's pipes, even though they only have a lifespan of around a century. New rates would bring in enough new money to reduce that replacement cycle to 182 years, so even with new spending the water system would still have a lot of very old pipes.

The DWP's two-tiered residential water rates might turn into four tiers, with the biggest users paying the most. That's according to the DWP's indpendent ratepayer advocate, Fred Pickel. His office will review the rate increase proposal and advices the DWP board, but he does not have the power to impose any changes, Pickel said. Some of the many surcharges on the water bill could be collapsed into fewer line items, he said.

On the power side, DWP needs $180 million more per year, according to a consultant's study presented in May. Most would be spent increasing reliability of the power grid – and that includes replacing thousands of power poles that are over 50 years old. It’s also spending on renewable energy and increasing efficiency. It’s also increasing local solar power and getting out of coal-fired energy.