Mayor Warns City Could Go Bankrupt Without DWP Rate Hike; City Council Officially Stands In Plan's Way

What a difference a week makes. It was only last week that the mayor of Los Angeles was cloaking his massive Department of Water and Power rate-hike proposal as a green initiative designed to ween the city off of coal power. Today, before the City Council, Antonio Villaraigosa got down to the nitty gritty of the matter: The hike, which would eventually include 28.4 percent increases for some customers, is a Band-Aid for the city's near $700 million deficit (coming in July). Failure to enact the increases "would be the most immediate and direct route the bankruptcy the city could pursue," Villaraigosa stated.

Funny, because Mayor V. has been saying for months that the word bankruptcy is not in his vocabulary -- that it's not going to happen under his watch. Of course, he did not tie his DWP rate increases to the city's budget problems -- which would make the hikes look like indirect taxes -- until Tuesday.

We have applaud Villaraigosa for at least coming clean. It was tiresome hearing how the "carbon surcharge" plan would only cost average DWP customers an average $2.50 a month. The Los Angeles Times looked at the proposal in depth and came to the conclusion that it could eventually increase power bills by 8.8 to 28.4 percent.

The DWP recently contributed a much-needed $147 million to the city's general fund, so it's not like there isn't a connection between rate hikes and the city budget. Keep in mind that many DWP workers will see raises this year, even as the city plans to lay off 4,000 people as a result of its budget challenges.

On Tuesday the City Council voted to assert jurisdiction over the first of four proposed hikes under the mayor's carbon surcharge plan. That means it can prevent the first increase from happening on April 1 and send the proposal back to the DWP's board for reconsideration. This took place even as the mayor enlisted the endorsement of former Vice President Al Gore.

Some on the council are concerned that the rate increases come at the wrong time for a city hurt by unemployment.

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

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