Board of Water and Power Commissioners Approved Proposed Water Rate Action to Increase Investment in Replacing Aging Water Infrastructure and Protect Against Prolonged Drought Conditions

Proposed Water Rate Ordinance Sent to City Council for Consideration

Mel Levine, President of the Board of Water and Power Commissioners, said, “The risk of not passing this increase is substantially greater than any risk of passing it. It is important for us to move forward with this rate request to ensure that we meet the mainline and trunkline replacement goals to get ahead of costlier, unplanned pipe breaks. We need to maintain critical water infrastructure, meet regulatory requirements for water quality, and expand our local water supplies.”

The proposed water rate ordinance, which requires review and approval by the Los Angeles City Council, and is subject to approval by Mayor Eric Garcetti, establishes conservation-enhancing rates beginning April 1, 2016. The water rates will provide $330 million in additional annual revenue at the end of five years. Over that period, a “typical” residential customer’s monthly water bill (based on an average of 12 HCF, or hundred cubic feet, per month) will increase just over $3, or 4.76 percent on average each year. For all LADWP customers—including residential, commercial and industrial customers—the proposed rate action represents an average annual increase of 5.26 percent over the five-year period.

The proposed rates are designed to further encourage water conservation by moving from two to four price tiers based on a customers’ water use. The new tiers reflect the increasing cost of water supply at higher usage levels, allowing LADWP to recover the costs of providing water to high users while further encouraging conservation. At the same time, LADWP’s water rates will remain competitive with those of neighboring water utilities, many of which have announced similar or larger rate increases.

According to LADWP General Manager Marcie Edwards, “LADWP has taken steps to reduce and delay the need for rate increases through steps such as negotiating a new labor agreement which will save approximately $456 million over 4 years and $5 billion over 30 years.”

On Monday, Mayor Eric Garcetti announced support of the proposed water rate action as a means of fixing the city’s bursting pipes and encouraging water conservation, while keeping rates affordable. In addition, the OPA/RPA, which released its water rate report on Friday, found that LADWP’s rate request is “just and reasonable.” 

The Board of Water and Power Commissioners will review and consider proposed power rate increases in its next meeting January 5, 2016.

The water and power rates proposal will next be considered by the Los Angeles City Council’s Energy and Environment Committee and the full City Council.

The Board today also approved the mailing of an official notification of the proposed water rate changes under the statewide Proposition 218 requirement. Notices will be mailed to all LADWP water customers of the proposed water rate changes and a public hearing to be conducted by the City Council on February 17, 2016.

For more information about the proposed water and power rates request, visit www.MyLADWP.com.

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