LA Residents Ask Los Angeles City Council to RESPECT THE CHARTER Regarding DWP Rate Increases

Subject: Respect the Charter
March 11, 2008

Respect the Charter

You would have thought that Antonio Villaraigosa, of all people, would respect the City Charter. But unfortunately, the Mayor, along with DWP, is pressuring the City Council Members to approve the Power Reliability pass thru and the multi year Rate Increase without the benefit of the Charter mandated IEA Survey.

According to the City Charter, this strategic Survey was due in October, in time for the Mayor, City Council, Controller, DWP and the public to reap the benefits of this $1 million survey by independent utility experts ahead of any proposed rate increases.

There are many questions that will be addressed by this Survey that cannot be answered by glib comments in a large public forum. Real analysis based on good information is a must, especially when we are dealing with such large amounts of money.

What is the impact on the Rate Payers of the Power Rate Increases? While described by DWP as ”fairly modest,” a “$1.60 a month,” rates are going up 20% over the two year period. Base rates are up over 15%. Pass thru rates are up over 40%. Modest?

Why have the June 5, 2007 projected Energy Cost Adjustment Factor revenues increased 80%, or $550 million, over the December 9, 2006 projections? Was this rate of increase anticipated when the City Council approved this “pass thru?”

Power System profits were $70 million over budget in the first quarter? What impact will this have on the need for the multi year Rate Increase and the Power Reliability pass thru??

What is the status of the many money saving recommendations of the Huron Consulting Group? Work force management? Project management? Shared Services? Customer Service? Information Technology? Others?

What is the impact of the Rate Restructuring Plan on single family residences? An additional 2 to 4% a year?

While DWP is clamoring for the immediate approval of the “desperately needed” Rate Increase, why did DWP recently agree to fund the Mayor’s $270 million Solar Initiative? And why is there talk of using some of DWP’s $600 million unrestricted cash to help balance the City’s budget?

How do DWP compensation levels compare to City workers and other regional utility workers, especially since DWP is considered the gold standard?

Respect the Charter. Do not rush hed into a major decision without good information and analysis. Respect the 1,400,000 electric and 640,000 water customers. And respect the 80% of the certified DWP MOU Neighborhood Councils which support the completion of the IEA Survey before action is taken.

BLOGGER'S COMMENT: At the time this was written the Metropolitan pass throughs were not included.

We were right. The Mayor plans to incorporate the DWP Rate Increase into his budget!!!!

Who says Nahai is truthful? The increase would be used for the City, not infrastructure. The bond ratings would not be affected up or down with/out the rate increases. Their indebtedness already on the books in unfunded pensions, health benefits, etc. would and do. The lack of increase is not the culprit. What kind of a legacy is Nahai leaving for the next General Manager and Community?

DWP is paying for all of Villaraigosas plans for green power and alternative resources. How much will be left for infrastructure?

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