An increase in electric rates for Los Angeles Department of Water and Power customers is a bit closer to reality.
The Los Angeles Board of Water And Power Commissioners Wednesday approved a two-year rate hike that would increase the DWP's system average rate by 11.1 percent, or 1.4 cents per kilowatt-hour, over two years.
Residential customers who use less than 500 kilowatt hours per month would see an average annual increase of 5.5 percent over two years and pay $3.65 more on the current average monthly electric bill of $65.79 in the second year of the increase.
Rate increases are scaled to send a conservation signal to residents who use more water. For example, customers who use four times the monthly average will see an average annual increase of 8.1 percent.
The rate increase would allow the DWP to comply with legal mandates for reduced energy consumption, increased renewable energy use and the elimination of ocean water use at coastal power plants, DWP officials said in a written statement.
It would also facilitate infrastructure improvements and an expansion of efficiency incentives, according to the department, which expects to borrow an additional $2.4 billion over the next two years.
"It is never easy to raise our customers' rates, but the department has made the case that these investments are needed to comply with legal mandates and to invest in replacing aging infrastructure that is essential to maintaining reliable service to our customers," said board President Thomas Sayles.
Even after the increases, if approved, DWP's charges to the average residential customer are lower than the rates charged by utilities in Pasadena, Glendale, Burbank, San Diego and by Southern California Edison, department analysts said.
A voter-mandated ratepayer advocate charged with vetting the department's rate proposals gave his approval in August, saying the hikes are justified by the billions of dollars in capital projects and infrastructure improvements needed to meet clean and renewable energy targets mandated by the state and federal governments.
However, advocate Frederick Pickel also said the department must do more to reduce labor costs in future years. DWP employees are paid "substantially in excess" of workers at comparable public and private utilities, Pickel said.
The rate increase requires Los Angeles City Council approval.