WHY LA UPPED ITS POWER RATE

Carbon Reduction Surcharge
March 15, 2010 (City of Los Angeles)

"Mayor Villaraigosa is directing the Board of Water and Power Commissioners to create a Carbon Reduction Surcharge and a related Renewable Energy & Energy Efficiency Trust Fund… This action is an unprecedented step towards creating thousands of green-collar jobs and turning Los Angeles into the greenest big city in America…

"…Rates will go up 2.7¢ per kWh [beginning April 1, 2010, and implemented gradually to January 2011]. Of that increase, 0.7¢ per kWh will go to a dedicated fund for renewables and energy efficiency. Most ratepayers…[will have] a $2.50 - $3.50 increase on their monthly bills. Customers who use more energy…will pay proportionally more…[S]mall businesses…[will have] a monthly increase of approximately $54.00, or 20%."

The biggest part of the rate increase will go to pay for volatile fuel costs. (click to enlarge)

"…[T]he objective of this initiative is not to charge more, it is to use less. So we are dedicating 100% of the Carbon Reduction Surcharge to renewable energy and energy efficiency…To mitigate the impact of the increase, LA residents will have access to the Green Doctor program, where the DWP will conduct house-calls for energy audits and offer free energy efficiency improvements, and other energy efficiency programs. And small businesses will qualify for up to $2500 in free energy-efficiency lighting upgrades – which could lower your energy costs by up to 25%…

"Even more importantly, the DWP will institute a Solar Power Feed-in Tariff program (FiT), to allow users to sell solar power back to the DWP. The FiT program will not only enable users to drastically cut their rates, but it will incentivize the installation of solar panels, creating good, green-collar local jobs…A solar feed-in tariff allows the owner of an in-basin solar facility…to sell electricity directly to the LADWP at a guaranteed price for a set period of time…[B]oth businesses and residents can dramatically reduce or even eliminate your power bills. In some cases, businesses can even use the Feed-in Tariff to turn a profit…"

The Mayor is counting on the fact that LA is willing to pay for New Energy and Energy Efficiency to get the rate increase through. Will the City Council go along? (click to enlarge)

"…[T]he $168 million that the DWP will be investing in renewable energy sources will create 1,826 jobs per year. That translates into 18,260 jobs over 10 years…According to a Berkeley study, approximately 13 installation jobs and 20 manufacturing jobs are created for every megawatt of solar energy installed. And the DWP will be incentivizing the use of local manufacturing to make sure those jobs go to Los Angelenos.

"…Under California's Cap and Trade law (AB 32), unless we take action to cut our dependence on fossile fuels, we will end up paying huge fines to Sacramento, with no local benefit. These fines could total up to $300 million in 2011-2012, and more than $600 milliion the next year…Or we can make these investments now and go green on our own terms, in a way that will maximize local jobs…[and] ensure collective benefit for the long term."