L.A., pushing big water rate increases, seeks 18% more from typical users (July 8, 2015)

Los Angeles Department of Water and Power officials are seeking an increase in rates over the next five years in a bid to boost water conservation amid California’s drought and expand repairs of crumbling water mains and electricity infrastructure.

The rate increase is significant because it puts the greatest financial pressure on the heaviest residential water users — those who consume roughly 20,000 gallons of water a month and make up 10% of the department’s customer base. For those users, water bills would increase 34% by 2021.

Although such multi-tiered approaches to water billing have been challenged in court, DWP officials said Wednesday that they were confident the rate plan would pass legal muster. The DWP currently has two water rate tiers; the proposal would double that.

In the wake of last year’s catastrophic water pipe break on Sunset Boulevard, which flooded portions of UCLA, DWP officials said that 85% of the new water revenue would be used to replace aging water infrastructure. Current water loss due to leaky pipes is about 5%, according to officials, or roughly half the industry average.

Although Gov. Jerry Brown and Mayor Eric Garcetti have called for significant reductions in residential water use, the plan is likely to encounter heavy scrutiny from ratepayers who say a series of DWP missteps have undermined public confidence in the agency.

We’re paying for the sins of the past, said Jack Humphreville, a member of the Greater Wilshire Neighborhood Council and frequent critic of the agency. In the past, the City Council didn’t give DWP the rate increases they should have had to maintain the system.

However, DWP General Manager Marcie Edwards said the plan was aimed at addressing such concerns.

I think you rebuild trust by being the low-cost provider and providing reliable service, Edwards said. I think this rate plan does that.

Under the plan, which must be approved by DWP commissioners and the City Council, residents would see combined water and power rates increase 2.4% to 5.4% every year for five years.

Typical residential customers would see an average increase of about 3.4%, or $4.75 per month, each year for five years, officials said. Low-use customers would have a combined bill increase of 2.4% on average per year, or about $1.95 per month. High-use customers would pay about 5.4% more, or $17.64 per month, each year for five years.

DWP officials said the department needs to increase water revenue by $230 million over five years to repair infrastructure and comply with government water quality regulations. Funds would also be used to decrease reliance on water imported from Northern California and the Colorado River, officials said.


Source: Matt Stevens and Monte Moran, Los Angeles Times