(Editor’s note: this is the first of a two-part story about the Los Angeles Department of Water and Power and why customer rates are so high.)
The biggest question is not whether your water bill is going to raise, it will. The biggest question is who will be indicted next in the LADWP/City Attorney’s office billing scandal?
Why are water bills going up?
Many residents received a mailing from Los Angeles Department of Water and Power telling them at some point in 2021 their account reached either a Tier 3 or Tier 4 water-use level.
“We want to inform you of a water rate change that went into effect January 1, 2022. Customers will see rate adjustments on their water bill. Those with the highest usage will see the biggest increase, while lower water users using the same amount of water as in 2021, will see their bi-monthly water bill remain about the same.”
LADWP then reminded ratepayers that the department’s Board of Commissioners approved a rate increase on September 28, 2021.
Ratepayers didn’t vote for an increase. Rather, the increase was approved by the five-person board of commissioners, who were appointed by Mayor Eric Garcetti in his capacity as mayor.
Annually, the LADWP gives about eight percent of its revenue to the general fund to help balance L.A. City’s budget. This usually represents a transfer of about $250 million. In 2020, the DWP transferred $320 million to the City.
The utility holds $1.6 billion in cash reserves. Residents are paying more fees to the utility than what is needed to run the company. Residents are helping balance the City budget with DWP fees. This means L.A. and its mayor do not have a stake in keeping consumer rates low.
This isn’t the first-time ratepayers have questioned a lack of transparency, and Mayor Garcetti, in 2011, appointed a ratepayer advocate, Dr. Frederick Pickel, whose starting salary was $276,000 (and is funded by LADWP ratepayers).
Pickel, the consumer advocate, endorsed power and water rate hikes of $1.1 billion between 2016 and 2020.
Pickel endorsed a new 5-year IBEW contract in 2017 hiking salaries by 13-22 percent for a total $280 million when DWP employees are among the highest-paid utility workers in the country and earn two-and-a-half times more on average than other workers in comparable L.A. jobs.
How much more will you be paying with the new rates?
For customers paying Tier 3 rates, the cost of 748 gallons of water will increase from $9.192 to $10.436.
Those in Tier 4, the highest water users, will increase from $9.192 to $12.794 per 748 gallons.