Los Angeles Mayor Antonio Villaraigosa's appointees at the Department of Water and Power took the first step Thursday toward imposing electric rate increases of up to 28%, despite complaints from neighborhood activists and business groups.
On a 4-0 vote, the board agreed to increase the cost of electricity by 0.8 of a cent per kilowatt hour, the first of four increases planned over the next year to help the nation's largest municipal utility cover its financial commitments and continue Villaraigosa's plan for securing more renewable power.
DWP commission President Lee Kanon Alpert said he feared that inaction would be greeted unfavorably by leaders of Wall Street companies, who could respond to a 'no' vote by reducing the utility's bond rating.
Such a move would add $70 million to $80 million each year to the agency's borrowing costs, DWP officials said.
"What's very striking to me is the risk and potential of harm that will come to this department and our ratepayers if we do not approve this," he said.
The City Council must now decide whether it wants to conduct its own review of the proposal, which would otherwise take effect. Council members Eric Garcetti, Jan Perry and Dennis Zine said they want to do so.
Backers of the plan called it a major step away from coal power, which makes up 44% of the DWP's energy portfolio. Coal has been less expensive but is a huge polluter. Opponents said the increases would hurt businesses and families already hard hit by the recession.
No really, people want to pay more for electricity; especially businesses. They want the city of LA to clean itself up so much that they'll probably leave to give them the space to do it ie Detroit.
What's so "progressive" about higher utility costs?
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