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Nahai justifies rate increase, saying it is needed to continue DWP’s ‘tradition of excellence in providing reliable, high-quality water and power at the lowest possible costs’

Posted by: Aqua Blog Maven on March 25, 2008 at 5:55 am

dwp-fountain.jpgFrom the Los Angeles Daily News:

No new chief of a utility – public or private – wants to advocate for a rate increase at the outset of their administration. So why am I, as the new general manager of the Los Angeles Department of Water and Power, making such a case?

Because I am convinced that our customers deserve the most reliable, high-quality electric and water service at the lowest possible cost. And to do that we must invest in our city’s infrastructure today to continue providing reliable water and power tomorrow.

It is indisputable that our infrastructure is deteriorating and must be renovated. Most of the nation’s cities face similar challenges. Much of our system of power poles and transformers, power lines and water mains is between 40 and 70 years old.

During the past two summers, we battled heat storms that caused 80,000 of our 1.4 million customers to lose power in 2006 and 75,000 in 2007 as our infrastructure struggled under the strain of load growth and climate change. The cost of those outages in human misery, economic losses and health-care costs far exceeds the rate increase we are seeking. In fact, customers of other utilities in the state fared much worse during the past two summers.

Just as the challenge of aging infrastructure is not unique to Los Angeles, neither is the practice of making a transfer payment from the DWP to the city’s general fund. Every major utility – whether owned by investors or the public – makes a payment to its host city.

In fact, the “transfer” made by the DWP is about average with payments made by other municipal utilities in the nation. This inconvenient fact is ignored by those who criticize this sound tradition.

Read the full text of David Nahai’s commentary in the Daily News by clicking here.

March 25, 2008 · Filed Under LA DWP, Water Agency News (all)

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