BOARD OKS DWP RATE HIKE INCREASES APPROVED DESPITE CRITICISM THE UTILITY IS WASTING MONEY.

Byline: BETH BARRETT

Staff Writer

Los Angeles Department of Water and Power officials unanimously approved water and electric rate hikes Tuesday, despite criticism that the massive utility has for years mismanaged its money.

Under the plan, electric rates would increase 9 percent over three years and water rates would increase 6 percent over two years.

But the plan comes amid increased scrutiny of the DWP in the wake of a Daily News review of salary data that show that the average DWP worker makes $76,949 a year -- or nearly 20 percent more than the average civilian city worker.

DWP salaries also are much higher than private-sector workers' even as the utility has come under fire for recent power problems -- including a summer outage that left 60,000 Angelenos sweltering in record heat.

Still, DWP Commission President David Nahai said the wage disparities are historical and that the rate hikes remain necessary to fix an aging electrical system.

"It's clear from last summer and this summer's heat storms, and rain and wind (related outages) that we have a problem today," Nahai said. "While we have to move on many fronts ... we have to move forward today on this."

Nahai said the DWP's rates would remain lower than those of other utilities even with the hikes.

But on Tuesday, the rate hike drew an outcry from the neighborhood councils' oversight panel, which opposed the move amid questions over the high pay of DWP workers and what some charged was a limited time available to review the potential impact of a rate hike.

"There's such a huge premium being paid to DWP workers versus the rest of the city," said Jack Humphreville, a member of the neighborhood councils' DWP oversight committee.

"Basically the rate increase they're talking about are equal to the salary increases going to the DWP workers. DWP says they have low rates, but the reason isn't efficiency; it's tax- exempt bonds, and coal."

DWP officials have continued to defend the need for the hikes and said high demand and staffing shortages have left the DWP unable to keep up with replacing faulty and aging transformers, old poles and worn cable in a system mostly 40 years to 70 years old.

In June, the DWP board adopted a $4 billion budget that includes a five-year, $1 billion upgrade program for the utility, along with the rate increase.

"If these issues aren't addressed, reliability will go down," said acting DWP General Manager Robert Rozanski.

Rozanski also defended the utility's outreach to communities.

"Neighborhood councils have had unprecedented access," Rozanski said. "We have a good relationship with (them)."

If the City Council approves the hikes, the new electric rates would start in January with a 2.9 percent increase, or about $1.75 per month to the average customer.

In July, another 2.9 percent increase would take effect, and a final 2.9 percent hike would be posted on bills in July 2009, bringing the total increase to $5.25 a month on average.

Officials estimate that by the end of the hikes, the average customer would see an approximate increase of $24.50 in their bimonthly electric bills.

The commission also approved a power-rate restructuring plan for residential and commercial customers, which also takes into account higher summer temperatures in the San Fernando Valley.

The new water-rate increases would start next July with a 3.1 percent boost expected to add about $1 to the average water-user's bimonthly bill. Another 3.1 percent boost would take effect in July 2009.

Officials said the hikes would bring the average water-user's bill to about $35 per month.

Money from the hikes is expected to generate about $100 million to cover the cost of replacing aging pipelines, repairing environmental damage in the Owens Valley -- the source of most of the city's water -- and covering open reservoirs to meet water-quality requirements.

The DWP increased water rates last year by 2.75 percent, raising the average bill by $24 a year. Rates went up again by 2.75 percent this past July.

The power-rate increases are expected to generate about $315 million for upgrades in power-transmission lines, transformers and overall electrical reliability. This would be the first increase to base power rates since 1992.

beth.barrett(at)dailynews.com

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