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L.A. Council Dangles Possible Electricty Rate Hike In Bid To Get DWP Cash

Is the Los Angeles City Council crying uncle in its battle with its own Department of Water and Power over $73.5 million the utility is withholding from the city's main coffers? In a letter to the DWP today, ranking members of the council demanded payment but in the same breath said that an increase in electricity rates was certainly possible.

The council had knocked down any rate increases last week in a battle of cents (the council shut the door on any rate hikes after the DWP's board rejected its .6-cents-per-kilowatt-hour increase in favor of .7 cents). The DWP then followed through on a threat to withhold the cash it had promised to City Hall. Now council leadership is putting an power-rate increase back on the table.

"A majority of the council has made it clear that it will support an immediate rate increase and future rate increases that are well-justified and transparent, and nothing in the council's actions should lead you or the rating agencies to conclude otherwise," reads a letter signed by City Council President Eric Garcetti, President Pro-Tempore Jan Perry, Assistant President Pro-Tempore Dennis Zine and Budget and Finance Committee Chairman Bernard Parks.

It's not clear how much weight the promise holds, however: Legally, any rate hikes for the quarter had to be implemented by April 1. The next possible time for an increase is July 1.

The council and Mayor Villaraigosa seem intently focused on the $73.5 million as a real day saver in the city's looming deficit, expected to rise to nearly $700 million in July. However, the cash would only be a Band-Aid that would allow the city to operate beyond May 5, which is when City Hall will run out of cash, according to City Controller Wendy Greuel.

-With reporting from Weekly wire services. Got news? Email us.


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