LA WATCHDOG-Our Department of Water and Power will be announcing that it intends to raise our water and power rates by 5% to 8% a year over the next five years, an increase significantly greater than the rate of inflation. This 25% to 45% cumulative increase in our rates will eventually cost Ratepayers between $1 billion and $2 billion a year.
Needless to say, the DWP and City Hall spinmeisters will unleash a torrent of reasons why this unprecedented five year increase in our rates is in the best interest of the Ratepayers, the Department, and the City.
We will, however, have a hard time buying this propaganda as we all remember the baloney associated with the well-funded campaigns for Measure B, Mayor Villaraigosa’s Solar Initiative that was a payback for campaign contributions from IBEW Union Bo$$ d’Arcy, and Proposition A, the permanent half cent increase in our sales tax. Fortunately, both ballot measures were rejected by the voters who saw through City Hall’s smoke screen.
Any proposed rate increase in our water and power rates needs to be accompanied by a thorough review of the governance of DWP and its relationship with City Hall.
For example, the LA 2020 Commission unanimously recommended the creation of a truly independent Los Angeles Utility Rate Commission to mitigate political interference. Modeled after the California Public Utilities Commission, its five paid members would have a “solid understanding of rates, ratemaking, and how a utility business operates” and would be supported a professional staff of experts. This Commission would also appoint the Department’s General Manager.
Unfortunately, City Council President Herb Wesson has shelved this recommendation.
At the same time, City Hall must recognize that the Ratepayers are not a billion dollar a year ATM. Reform would involve the elimination of the illegal 8% Transfer Fee/Tax ($266 million) that is now subject to class action suit, the gradual phase out of the IBEW Labor Premium and the union’s overly restrictive work rules, and putting a lid on City Hall’s pet projects and dollar a year leases.
Importantly, the Ratepayers need to be protected from the Bureau of Sanitation and the One Water 2040 advocates who want to burden DWP with a disproportionate share of the City’s $8 billion Stormwater Master Plan. This also applies to the funding of the $1.4 billion revitalization plan for the eleven mile stretch of the Los Angeles River.
As part of the rate making process, DWP needs to address a number of issues, including what happened to over $40 million of Ratepayer money that was funneled to the IBEW controlled Joint Safety and Training Institutes. Unfortunately, we may never have the complete story as the City Council caved to the demands of Union Bo$$ d’Arcy to limit the scope of Controller Ron Galperin’s audit.
We also need a thorough explanation of the fiasco involving the Customer Information System that will end up costing the Department more than $400 million in development costs and lost revenue. At the same time, DWP needs to detail its plan to improve customer service (other than throwing money at the problem), including the possibility of hiring experienced outside contractors.
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Ratepayers also deserve a clearer understanding of the most recent front page expose involving the $15 billion cost of fortifying the Department’s water pipes and aqueducts in case of a major earthquake. This would also include how the Department proposes to finance this plan since the idea of the state floating a bond is a pipe dream.
There are many other questions, ranging from the failure of the Power Reliability Program; the cost overruns for the Headworks underground reservoir; the efficiency of the Feed in Tariff program; the cost of utility owned solar facilities and the relationship with the IBEW; staffing levels for the Joint System; the legality of tiered water rates and the 8% Transfer Fee/Tax; and the status of the charter mandated Industrial, Economic, and Administrative Survey that is already a year overdue.
Rather than pursue an unprecedented five year increase that will protect the Mayor and Council Members from criticism over the next election cycle, DWP, Mayor Garcetti, and the City Council should pursue a two year deal for both water and power that reflects the demonstrated requirements of DWP while at the same time embracing a plan to reform our Department of Water and Power into an efficient, transparent, Ratepayer friendly utility.
(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee, The Ratepayer Advocate for the Greater Wilshire Neighborhood Council, and a Neighborhood Council Budget Advocate. Humphreville is the publisher of the Recycler Classifieds -- www.recycler.com. He can be reached at: [email protected])
-cw
CityWatch
Vol 13 Issue 25
Pub: Mar 24, 2015
