The Los Angeles City Council on Friday rejected Mayor Antonio Villaraigosa’s plan for boosting electric rates, sending the proposal back to the Department of Water and Power even as members promised to continue working on an alternative plan next week.
The decision, made on a 13-1 vote, was viewed by some as procedural since the council is scheduled to take up the issue of rate hikes again Tuesday — first in a committee and then on the council floor. Several members have already said they think some form of increase is needed to safeguard the municipal utility’s financial health.
Council President Eric Garcetti said he was concerned about the size of the increase planned by Villaraigosa over the next year, and that the fact that the DWP is months away from completing its plan for weaning the utility off coal.
“I’ve never been opposed to a responsible step forward” in increasing electric rates, Garcetti said. “But to take a giant leap in the biggest economic downturn since the Great Depression seems to be rash.”
Villaraigosa’s aides did not immediately have comment on the vote, saying they were still trying to understand what council members were trying to accomplish. But in recent days, Villaraigosa has warned that a rejection of his plan would represent a step backward in the city’s effort to reduce its reliance on fossil fuels.
Both the mayor and the DWP had warned that a “no” vote would undermine the fiscal health of the city’s electrical utility, rendering it incapable of following through on a promise to transfer $73 million to the city’s struggling general fund budget, which pays for basic services.
That, in turn, would cause the city to run out of money before June 30, the mayor said.
Villaraigosa has called for four consecutive rate hikes in order to meet his goal of securing at least 20% of the DWP’s energy from renewable sources, such as wind, solar and geothermal power. Within 12 months, those rate hikes would result in increases to households of 9% to 28%, depending on how much power they use.
The first increase of 0.8 cents per kilowatt hour was approved by the DWP board March 18. Councilman Richard Alarcon has called for the council to approve that proposal while warning that members could veto the remaining three rate hikes if the DWP fails to follow a series of demands.
One of those demands is for the DWP to create a ratepayer advocate. Another is to ask DWP officials to spread the increases out over two years instead of one.
Friday’s vote was a sharp change in plans for the council, which was originally scheduled to decide next week whether to send the proposal back to the DWP. Councilwoman Jan Perry said she accelerated the timetable to let the DWP board know that it should schedule its own meeting on that day.
That meeting would need to occur Tuesday afternoon after the council has conducted a meeting in which members could offer suggestions on the rate hikes, Perry said.
DWP spokesman Joe Ramallo had no comment after the council cast its vote. DWP Interim General Manager S. David Freeman said last week that his plan for weaning the utility off coal would be ready this summer.
— David Zahniser at Los Angeles City Hall