L.A. City Council votes to limit energy cost hikes
Kimberly Urcho | 3-31-2010 | Comments |
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The Los Angeles City Council voted to limit the Department of Water and Power (DWP) electricity rate to a 0.6 cents per kilowatt-hour (kWh) increase on Tuesday, despite Mayor Villaraigosa’s backing of a plan that would have hiked rates by 0.8 cents.“The DWP’s initial proposal would have raised rates between seven and 28 percent,” said Los Angeles Area Chamber of Commerce President and CEO Gary Toebben. Over the course of a year, it would take an enormous financial toll on the city’s residents and businesses, he said.
The rate increase, which is 25 percent less than the mayor’s plan, is meant to satisfy the rising costs of energy. The new price will also meet the minimum rate hike of 0.5 cents per kWh necessary to maintain the DWP’s bond rating, which determines the credit-worthiness of the agency’s debt.
The additional 0.1 cents per kWh is a remnant of the mayor’s plan, which reflected goals for a greener Los Angeles. This amount will be put in a “lockbox” which will later be used toward renewable energy.
The 4.5 percent boost in resident’s fees did not, however, pass at City Hall without a lengthy debate.
Those in support of the increase stressed the need for the DWP to remain fiscally stable and rallied on the hope for a less-polluted Los Angeles.
“A small portion of what [has been] proposed is for a renewable energy and energy efficiency trust fund,” said Monique Lopez of the Coalition for Clean Air. “I understand that it is a difficult time for the city and our nation, but if this time has taught us anything, it is to prepare for the unforeseen and foreseen issues of the future.”
Those in opposition, however, said the proposal is not truly a plan that will foster a greener city.
“My only problem is this proposal before this council is not an environmental proposal,” said Councilman Greig Smith, who voted against the proposal. “We are not reducing our dependence on coal-generated plants. There is not a plan here to close any of those plants, folks.”
Other council members, including Paul Krekorian, agreed with Smith’s assertion that the agency lacked preparedness.
“This is outrageous arrogance,” said Krekorian, as he reprimanded the DWP for not organizing charts and graphs that would allow for easier decision-making. “This is an insult to this council and to the residents of Los Angeles,” he said.
Councilman Smith also expressed concerns that the rate hike will weaken the Los Angeles economy even further.
With a high rate increase, some companies will be forced economically to move their manufacturing elsewhere, said Smith. “If they can do it up the road, in Bakersfield, for 3 cents a kilowatt less, then that is where they’re going to go,” he said. “That is what business does. We are going to lose a lot of jobs.”
DWP officials responded to concerns of unemployment, citing the agency’s creation of more than 4,300 jobs in Los Angeles with renewable energy projects like Pine Tree wind farm.
“Even more jobs will be created once the green initiative sets in,” one official said.
City Council adopted the new proposal in a 9-5 vote. New rates will become effective in April 2010, given the approval of the counter proposal by the DWP board.
The Los Angeles City Council voted to limit the Department of Water and Power (DWP) electricity rate to a 0.6 cents per kilowatt-hour increase on Tuesday, despite Mayor Villaraigosa’s backing of a plan that would have hiked rates by 0.8 cents.
“The DWP’s initial proposal would have raised rates between seven and 28 percent,” said Los Angeles Area Chamber of Commerce President and CEO Gary Toebben. Over the course of a year, it would take an enormous financial toll on the city’s residents and businesses, he said.
The rate increase, which is 25 percent less than the mayor’s plan, is meant to satisfy the rising costs of energy. The new price will also meet the minimum rate hike of 0.5 cents per kWh necessary to maintain the DWP’s bond rating, which determines the credit-worthiness of the agency’s debt.
The additional 0.1 cents per kWh is a remnant of the mayor’s plan, which reflected goals for a greener Los Angeles. This amount will be put in a “lockbox” which will later be used toward renewable energy.
The 4.5 percent boost in resident’s fees did not, however, pass at City Hall without a lengthy debate.
Those in support of the increase stressed the need for the DWP to remain fiscally stable and rallied on the hope for a less-polluted Los Angeles.
“A small portion of what [has been] proposed is for a renewable energy and energy efficiency trust fund,” said Monique Lopez of the Coalition for Clean Air. “I understand that it is a difficult time for the city and our nation, but if this time has taught us anything, it is to prepare for the unforeseen and foreseen issues of the future.”
Those in opposition, however, said the proposal is not truly a plan that will foster a greener city.
“My only problem is this proposal before this council is not an environmental proposal,” said Councilman Greig Smith, who voted against the proposal. “We are not reducing our dependence on coal-generated plants. There is not a plan here to close any of those plants, folks.”
Other council members, including Paul Krekorian, agreed with Smith’s assertion that the agency lacked preparedness.
“This is outrageous arrogance,” said Krekorian, as he reprimanded the DWP for not organizing charts and graphs that would allow for easier decision-making.
“This is an insult to this council and to the residents of Los Angeles,” he said.
Councilman Smith also expressed concerns that the rate hike will weaken the Los Angeles economy even further.
With a high rate increase, some companies will be forced economically to move their manufacturing elsewhere, said Smith. “If they can do it up the road, in Bakersfield, for 3 cents a kilowatt less, then that is where they’re going to go,” he said. “That is what business does. We are going to lose a lot of jobs.”
DWP officials responded to concerns of unemployment, citing the agency’s creation of more than 4,300 jobs in Los Angeles with renewable energy projects like Pine Tree wind farm.
“Even more jobs will be created once the green initiative sets in,” one official said.
City Council adopted the new proposal in a 9-5 vote. New rates will become effective in April 2010, given the approval of the counter proposal by the DWP board.
Tags: department of water and power energy los angeles los angeles city council mayor villaraigosa