VALLEY WILL GET POWER RELIEF DWP: THREE-TIER SYSTEM IS ADOPTED, LOWERING RATES IN HOTTER AREAS OF CITY.
Angelenos who use more power during the summer will pay higher prices under a new tiered-rate system adopted by the Los Angeles City Council on Wednesday that also gives San Fernando Valley residents a little break.
The new system will take effect in July 2009 and will include lower rates for residents in hotter areas of the city, including most of the San Fernando Valley.
The goal is to encourage residents to reduce their power use from June through September, when demand strains the city's electrical system.
"The rates will send a conservation message," said Los Angeles Department of Water and Power General Manager H. David Nahai.
"Most people will react because it touches the pocketbook and people don't like to pay more for electricity or any product when they don't have to."
The new ordinance sets three tiers of rates based on power usage, and allows residents in "hot zones" to use more electricity before they are bumped into higher-rate tiers.
The DWP already has a temperature zone and tiered rates for water usage.
Still, some ratepayers worry that they won't be able to conserve enough and will see their electric bills jump next summer.
Northeast Los Angeles resident Marc Chinzi said his family of six relies on an extra freezer to keep food bought in bulk and uses window air conditioners when it gets hot, which pushes his home into the second rate tier.
"I live in a small, 1,200-square-foot house. I use compact bulbs where I can," Chinzi said. "I really don't use much electricity."
But DWP officials said the increases between the first and second tiers are still modest, and people such as Chinzi -- who use less than 800 kilowatts per month -- will likely see a small decrease in their power bills.
That's because the tiered rates are supposed to be revenue-neutral for the utility, so the DWP will actually lower its base electricity rate slightly. And that benefits people who don't use a lot of power.
But as households suck up more electricity, they'll get bumped into the higher tiers and pay the higher rates. At around 800 kilowatts per month in the hot zone, customers will begin to see their bills increase with the new rate.
When households hit Tier 3 -- which is 1,050 kilowatts per month in the cooler zone and 1,500 kilowatts per month in the hot zone -- they'll pay an extra 5 cents per kilowatt and see their DWP bill skyrocket.
Nahai said most residents shouldn't see a dramatic change in their power bills, but he hopes the bump still will push people to conserve.
Environmental groups support the new rates. Rhonda Mills, with the Center for Energy Efficiency and Renewable Technology, said the DWP is the last major utility in the West to adopt tiered pricing.
"Tiered rates do encourage conservation," Mills said. "At a time when we're trying to address carbon and climate, we think this is the most important thing you can do."
Some council members had concerns about the temperature zones.
While most of the San Fernando Valley is in the hot zone, based on a 1994 microclimate study by the University of California, Los Angeles, two Valley communities -- Studio City and Toluca Lake -- were excluded.
Located at the base of the eastern Valley, the communities may catch cooler breezes from the Cahuenga Pass, but residents still think their average summer temperatures are higher than 80 degrees, the threshold for the hot zone.
The Studio City Neighborhood Council said the rate plan "places an unfair burden on the stakeholders of Studio City because it forces them to pay higher rates for energy."
At the request of Councilwoman Wendy Greuel, the DWP will hire climatologists to make sure the UCLA study is still accurate.
That analysis should be done by the end of the year and, if needed, the hot zone will be redrawn before the rates take effect next summer.
Greuel said the hot zone/cool zone line in Studio City means people on one side of the street get a rate break while people on the other side don't.
"I'm going to ask them to really walk through the study and explain why Ventura (Boulevard) and Coldwater (Canyon Avenue) on the east side is considered cool and Ventura and Coldwater on the west side is considered hot," Greuel said.
"My hope is they'll go back and look at what is common sense."
NEW RATE SYSTEM
Effective July 2009
DWP customers would fall into three rate tiers. The more electricity used, the higher the rate tier.
The tiers only apply in June, July, August and September, when electricity demand is highest.
People who use a lot of electricity -- more than 1,050 kilowatts in the cooler zone and more than 1,500 kilowatts in the hot zone -- would see their rates increase by 5 cents per kilowatt hour.
The hot zone is any area where the average summer temperature is higher than 80 degrees. That includes most of the San Fernando Valley, East L.A., South L.A. and downtown.
NEW RATE SYSTEM (see text)