NCPA - National Center for Policy Analysis


March 19, 2010

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

  • Villaraigosa said the proposed increases would ensure that the DWP meets his goal of securing 20 percent 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. 

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 percent; those customers make up 58 percent of the DWP's residential ratepayers.
  • Tier 2 customers, who use more power and make up 36 percent of the utility's residential customers, would see an average increase of 16.8 percent to 18.9 percent.
  • Tier 3 customers, who use the most power and make up the remaining 6 percent, would face hikes in their electric bills of 24.4 percent to 28.4 percent, according to documents provided by the mayor's office.
  • Businesses would see increases in the average bill ranging from 20 percent to 26 percent.  

Mike Eveloff, president of the Tract 7260 Homeowners Association, criticized the mayor for seeking more money at the same time the DWP is providing at least $220 million annually to balance the city's budget. "As long as the DWP is showing a surplus, then they have no rational reason for seeking a rate increase," he said. 

Once all the increases are in place, the DWP will receive an additional $648 million per year.  Villaraigosa said the money would help pay for the hiring of "green doctors" to evaluate the energy efficiency of homes and make residents obtain energy-efficient lightbulbs and refrigerators. 

Source: David Zahniser and Phil Willon, "DWP rates may rise between 8 percent and 28 percent to pay for mayor's green initiatives," Los Angeles Times, March 17, 2010. 

For text:,0,7870063.story 


Browse more articles on Environment Issues