Our Department of Water and Power is proposing to increase our water and power rates by 25 percent and 12 percent, respectively, over the next two years. Underlying these rate increases are extensive unfunded environmental mandates, an aging infrastructure and escalating personnel expenditures. And, in the case of the water system, rates are also increasing because of the need to purchase more expensive water from the Metropolitan Water District due to lower snowfall in the Eastern Sierras.
The economics of this two- year, $500 million increase in our rates will be thoroughly reviewed and analyzed by the newly appointed Ratepayers Advocate Fred Pickel, as well as by the City Council, homeowners and businesses.
But ratepayers also need increased transparency into the operations and finances of the department, especially given the projected doubling of our power rates over the next seven years.
What are rates going to be in 2020 as a result of the state mandate that 33 percent of DWP’s power be from renewable resources and California’s 2006 Global Warming Solutions Act? Why are DWP wages and benefits so much higher (up to 40 percent) than other city workers? Why are ratepayers on the hook for the labor premium estimated to cost more than $250 million per year? Why hasn’t DWP established benchmarking standards so it can determine the efficiency (or inefficiency) of its operations compared to other regional and Western utilities? Why are ratepayers funding millions in the City Council’s pet projects that are the responsibility of the City?
We also need the opinion of City Attorney Carmen Trutanich as to the questionable legality of the $250 million transfer from the power system to the City’s General Fund as this transfer appears to be inconsistent with Proposition 26 (the measure to Pass New Taxes and Fees Act) approved by voters in November, 2010.
And how does the City justify the $250 million transfer when DWP’s infrastructure requires billions to update the water and power systems?
The City Council needs to realize that DWP is not its piggy bank that can be used to fund pet projects or political paybacks to campaign funding IBEW union boss Brian d’Arcy.
That is why we must demand complete transparency for our Department of Water and Power.
By Jack Humphreville. He is on the board of the GWNC, chair of the DWP Advocacy Committee and writes for City Watch.