LADWP ANNOUNCES PROPOSAL TO RAISE ELECTRIC RATES

The LA Department of Water and Power (LADWP) asked recently for an increase of 2 cents per Kilowatt Hour in current commercial and residential electricity rates in order to maintain support for the Department’s double A Bond rating. The increase would be capped at 10% in any one year.

With rising energy costs, partly due to the City’s commitment to increased use of renewable energy sources such as solar and wind, the LADWP believes additional funds will be needed to maintain cash for debt service and keep debt below 60%, an important threshold in financial markets.

The City is also considering modifying the rate structure for residential rates. The goal is for those using large amounts of electricity, beyond their base amount, to pay significantly more. It is hoped the increased price will signal these residents to conserve more energy.

A number of individuals testified regarding the rate increase and restructuring. Some environmental groups supported the increase, citing the importance of moving to renewable energy. Others argued the plan should be reworked, as residents and businesses are struggling to stay afloat in this economy.

On September 1st, the L.A. City Council Energy and Environment Committee denied the initial request to raise rates, and asked the Department to return soon with additional information. BOMA/GLA will keep you posted on this important issue.