DWP OFFERS MORE TIME TO PAY CITY PANEL OKS NATURAL-GAS SURCHARGE.

Byline: KERRY CAVANAUGH Staff Writer

Even as the DWP offered customers more time to pay sky-high electric bills resulting from last month's heat wave, a city panel voted Tuesday to impose a surcharge to offset rising natural-gas prices.

Residential and commercial customers in good standing can formally request a 90-day extension to pay this month's bills, which are expected to be astronomical because of the cost of air conditioning during a three-week stretch of record-high temperatures.

It can cost more than $1 an hour to air-condition a 3,500-square-foot house, officials estimated. Adding in the cost of powering the dishwasher, refrigerator, dishwasher, computer and television and some homeowners expect their bills to top several hundred dollars.

``We always work with customers when there's a hardship. We recognize that our customers may be experiencing a hardship in paying their bills especially after this record heat,'' DWP spokeswoman Carol Tucker said. ``We'll work with them on an individual basis.''

DWP officials also detailed their $28.2 million energy-efficiency campaign, which includes rebates, free compact fluorescent light bulbs and advice to businesses on creating a more energy-efficient operation.

By encouraging conservation, the DWP hopes to cut the utility's peak energy demand by 25 megawatts -- about half the output of a small power plant.

The goal is to reduce demand on the city's power system so the DWP can handle the electricity demand during the next heat wave without blackouts and other problems.

DWP board President Mary Nichols said investing in energy efficiency is the ``quickest, cheapest way to heat-proof our city.''

Conservation measures can reduce electric-generation costs to about 2 cents per kilowatt hour, compared with the 7.5-cent-per-kilowatt-hour cost of steam-generated power, said Jeff Peltola, the DWP's budget director.

The utility has expanded its residential customer rebate program, offering rebates for energy-saving refrigerators, air-conditioning systems, windows and pool pumps.

The DWP is also making a big push to hand out 20,000 compact fluorescent light bulbs, which consume 66 percent less power than a regular light bulb, and offer discounts on 800,000 more.

``We basically want to get rid of all the old incandescent bulbs that use all the electricity,'' Peltola said. ''It's tremendously cost-effective for us.''

In addition, the DWP is offering incentives for businesses to switch to more efficient lighting and cooling systems. And businesses can request help from a DWP engineer to develop a custom plan to reduce energy consumption and power bills.

Environmental groups have prodded the DWP toward greener power and Sheryl Carter with the Natural Resources Defense Council's western energy programs praised the utility's plan.

``It's got many pluses. This will save a lot of money for customers and reduce problems in terms of needing new generation and new transmission. It increases the reliability of the system by taking pressure off,'' Carter said.

``They're going to have to monitor and measure and evaluate to make sure they're getting the savings they target.''

As the DWP board discussed a payment plan, the City Council's Energy and Environment Committee recommended reviving a fuel adjustment charge -- first used in the 1970s and '80s -- to offset the higher cost of natural gas, which is used to generate electricity.

DWP General Manager Ron Deaton said the adjustment could cost homeowners $9 more a year.

The city froze its rates when the cost of natural gas was $3 per million- unit. Recently, those costs soared to $15 -- with each $1 increase equaling a $1 million cost to the utility.

More recently, Deaton and DWP officials said the cost has dropped to $6 or $7 per million-unit. Under the proposal, rates would not change unless the cost of gas tops $5.50.

Staff Writer Rick Orlov contributed to this report.

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