DWP Gives the City an Annual Donation to Meet Its Budget 

DWP routinely gives about $250 million to the City of L.A. to help it balance its budget.

At the annual Palisades Democratic Club meeting on January 31, one person complained on Zoom about his high DWP bills.

Mayor Eric Garcetti asked that person to contact his office and he would help.

How helpful will the Mayor be? Circling the News does not know if that ratepayer was helped, but here’s the tango that the City of L.A. does with the L.A. Department of Water and Power.

In 2020, the DWP transferred $320 million to the City—which was noted in a ratepayer’s bill.

Routinely, LADWP transfers eight percent of its annual revenue to the general fund to help balance the city’s budget. This usually represents a transfer of about $250 million.

How is the DWP bringing in enough revenue to justify this annual donation? The answer is that residents are paying add-on fees, above the cost of what it takes to run the utilities.

In March 2016, the City Council passed ordinance 84133, which approved increased rates fixed by the DWP, including a three-tier system and a Power Access Charge, both of which were new.

The ordinance, signed by Garcetti and approved by City Attorney Michael Feuer, noted that residents had been notified of the increase through a notice that was published in a daily newspaper and a posting for 10 days in one of three public places: a bulletin board on the Main Street entrance to City Hall, another on the Main Street entrance to the Los Angeles City Hall East, and a third on a bulletin board located on the Temple Street entrance to the Los Angeles County Hall of Records.

The new 2016 Power Access Charge was a 3.86 percent raise to everyone’s bill, purely for the purpose of “providing access to the power grid.”

According to LADWP, “The PAC is a fixed monthly charge that is based on the highest monthly energy delivered in the last 12 months, reset every October.” This means that even if a resident was on lower tiers for 11 months and had one month of increased energy, the PAC would then be based on the highest month the following year.

Highlands resident Peter Bullen has kept track of his annual PAC increases.

In 2016, it started at $6; the next year it was $15, a jump of 150 percent. In 2018, he saw a $3.50 increase to $18.50 (a 22 percent jump) and in 2019, it rose another 23 percent to $22.70. Bullen noted an article published by the DWP on March 15, 2016, that said ALL ratepayers were promised an annual average increase of 3.86 percent over 5 years.

(Editor’s note: This story formerly ran on March 23, 2021. CTN noted that in a subsequent story, it would would examine the tiers, the “Eck, et al. v. City of Los Angeles, et al. Settlement” and is it legal for a utility company to capture excess revenue to pay the City.)


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2 Responses to DWP Gives the City an Annual Donation to Meet Its Budget 

  1. Sherry Whitsett says:

    Hmmm…maybe the DWP will make a yearly donation to it’s customers so they can balance their budgets. Maybe the city could take less of a donation to fund it’s citizens budgets.

  2. Cindy Simon says:

    Honestly, the DWP is corrupt – I don’t know any other way to put it

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