The Board of Commissioners of the Los Angeles Department of Water and Power (DWP) voted Wednesday in favor of a rate hike that would average 11% and last for two years, with the proceeds going to replace aging infrastructure and improve the utility's ability to replace coal-fired power with renewable energy.
"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 Thomas Sayles, President of the Board of Water & Power Commisioners in a press release.
DWP has significant deferred maintenance to do on its infrastructure, with some of its power lines and utility poles dating back to the years before World War I, and it must also modernize that infrastructure to meet its 20% Renewable Energy Portfolio target by 2020. DWP must also end the use of ocean water to cool its power plants and meet a 10% energy conservation target.
The hope is that the new expenditures will allow DWP to phase out its reliance on coal-fire electrical power, which now accounts for 39% of thew utility's total power portfolio.
"These are challenging times for any utility," said Evan Gillespie of the Sierra Club's Beyond Coal Campaign. "Deferred investments have left our energy infrastructure crumbling and outdated. The question is not whether LADWP's proposal is needed, but rather how will LADWP use its customers' hard earned money to chart a new course that better reflects Angelenos' overwhelming support for a transition to clean energy."
The proposed increase comes after an 18-month period in which the utility consulted with the public, ratepayer advocates, and energy advocacy groups. The increase now goes to the Los Angeles City Council for approval.