Villaraigosa Backs Off Massive Rate Hike Plan (For Now)

Los Angeles Mayor Antonio Villaraigosa on Monday threw his support behind a one-time, "small" rate hike for customers of the Los Angeles Department of Water and Power, acknowledging that his proposal for a series of increases in electricity rates that would reach 28.4 percent for some was too much in this economic climate.

"We heard our residential and the business communities loud and clear," Villaraigosa said in a statement released by his office late Tuesday morning.

The compromise plan would raise rates six percent for residents and 5.7 to 7.1 for businesses, Villaraigosa's office stated. The one-time deal was proposed by Councilman Richard Alarcon as an alternative to Villaraigosa's expansive "carbon surcharge" plan, which aimed at generating thousands of jobs and reducing the city's coal-based power usage by 20 percent in 2010.

The plan was widely criticized, however, after the Los Angeles Times analyzed the numbers and found that rates could jump as much as 28.4 percent for some customers -- despite the mayor's spin that the deal would only cost the average power consumer $2.50 per month in extra cash. In a rare move the City Council defied the mayor and put the brakes on the plan.

"Any further rate increases would only be considered after the DWP implements a series of business -- and ratepayer-friendly reforms to ensure greater transparency and accountability," Villaraigosa said.

Alarcon's plan also calls for creating a city ratepayer advocate and spreading any future rate increases over two years instead of one.


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