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LA city council sends signal to DWP on energy rates

A divided Los Angeles city council has recommended an immediate increase in energy rates for Department of Water and Power customers. KPCC's Molly Peterson reports that the council vote water and power commissioners.

Commissioners of the city-owned utility and L.A. Mayor Antonio Villaraigosa had wanted a much higher increase of 8 to 28 percent over a year. They called it the energy cost adjustment factor – a fee tacked onto the base rate that's supposed to cover the fluctuating cost of electricity.

But the city council balked, and this week the mayor agreed to a deal councilman Richard Alarcon proposed: a one-time rate hike of 6 percent for residences and 5 to 7 percent for businesses. The council settled on a compromise to that compromise: a 4-and-a-half percent rate increase for all customers.

Water and Power officials argue that in order to avoid state fines for missing renewable energy mandates, the utility needs to raise money for solar and wind projects. Critics, including some on the city council, say the DWP should try to cut other costs before it raises rates. Now, before rate increases take effect, water and power commissioners must pass a new plan to send back to the L.A. city council.