As predicted ‘green’ programs to raise utility rates 8% to 28% in LA

March 17, 2010 00:53

As Obama predicted in his 2008 campaign ‘electricity rates would necessarily have to skyrocket’ for green initiatives. Now LA gets a dose of reality.

David Zahniser and Phil Willon at the LA Times report:

Households that get their power from the Los Angeles Department of Water and Power could see their electric bills go up between 8.8% and 28.4%, depending on where they live and how much energy they use, under a plan unveiled Monday by Mayor Antonio Villaraigosa.

Appearing with labor and environmental leaders, Villaraigosa said the proposed increases would ensure that the DWP meets his goal of securing 20% of its energy from renewable sources such as wind and solar by Dec. 31.

The increased revenue would help pay for new environmental initiatives, including more aggressive conservation programs and a solar initiative designed to create 16,000 jobs.

But it also would address the DWP’s failure to collect enough money to cover the cost of existing renewable energy initiatives and the fluctuating price of coal and natural gas, utility officials said.

“Nobody’s denying that this is a big increase — at least I’m not,” said DWP Acting General Manager S. David Freeman. “Because we’ve put it off so . . . long, [ratepayers] have saved money in the last three years.”

The mayor has been talking for weeks about the need for the DWP to charge more. Monday was the first day his team showed its estimate of the effects on consumers of the increase, which is scheduled to be phased in over a full year starting next month.

Under the plan, households that use the smallest amount of electricity — technically known as Tier 1 customers — would see an average increase of 8.8%. Those customers make up 58% of the DWP’s residential ratepayers.

Tier 2 customers, who use more power and make up 36% of the utility’s residential customers, would see an average increase of 16.8% to 18.9%. Tier 3 customers, who use the most power and make up the remaining 6%, would face hikes in their electric bills of 24.4% to 28.4%, according to documents provided by the mayor’s office.


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