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Sun, Jul

DWP: Mission Creep on the Ratepayers’ Dime

LA WATCHDOG

LA WATCHDOG - There is widespread concern that the tripling of our power rates proposed by the Department of Water & Power in its LA 100% Renewable Energy Study will have an adverse impact on ratepayers, especially on those who live in disadvantaged communities.

Under this $86 billion plan, DWP’s electrical generating system would be powered by 100% Renewable energy by 2035. This is, however, is not a prudent use of Ratepayer money because the incremental cost of going from 80% to 100% renewables is “cost prohibitive.” According to one expert, the cost to eliminate greenhouse gas for the last 20% is $1,200 a ton compared to the current market of $50. 

If the Department were to establish a goal of 80% renewables, this would save an estimated $30 billion over the next ten years and our rates would “only” double by 2035.  This would save the average household between $200 and $300 a month, or about $3,000 a year.

Importantly, the 80% goal would lessen the burden on disadvantaged communities.

The Department recently released its LA100 Equity Strategies report that focused on the impact of the 100% Renewables plan on disadvantaged communities. This 17-chapter, 1,300-page document (the executive summary is only 72 pages!) involves much more than the affordability of increased rates as it discusses current and historical inequities associated with redlining, racial discrimination, and historical inequities.

 

For example, the Department offered $340 million in solar net metering incentives.  But what it failed to mention was that a Ratepayer who installed rooftop solar made a substantial financial investment in a project encouraged by DWP that did not make economic sense, even with the net metering incentives.   

 

The report also delved into affordability strategies including low-income assistance programs and income based fixed charges.  But these programs will need to be approved by the voters who will need an independent and transparent analysis on their impact on rates.  To date, there has not been any analysis of the impact of “cost shifting” on rates despite numerous requests.

The report is also proposing other worthwhile programs, but they are the responsibility of the City and should not be on the Ratepayers’ dime. 

Should DWP be providing low-income households who are exposed to high temperatures with free air conditioners and the weatherization of apartment buildings?  Should DWP be investing and subsidizing shared solar programs if they do not make economic sense?  Should DWP be subsidizing the purchase of used electric vehicles, e-bikes, and EV charging stations? Should DWP be subsidizing the purchase of heavy-duty trucks to lower the pollution levels in disadvantaged communities?  And what are the economics of each of these programs?

No.  These pet projects are a classic case of mission creep.   

The DWP is charged with delivering reliable and affordable power. It is not an ATM for the City Council or the Mayor.

(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee, the Budget and DWP representative for the Greater Wilshire Neighborhood Council, and a Neighborhood Council Budget Advocate.  He can be reached at:  [email protected].)

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