What are the changes to the power rate structure?

A:

While there are no changes to the existing tiered structure for usage and geographic location during the peak season, June through September, LADWP is proposing several other changes including:

  • Infrastructure Adjustment: Much of LADWP’s power grid was built in the 1940s –1960s. Over 45% of LADWP’s 321,000 poles are 60-plus years or older and more than that will need replacing in the next five years. The infrastructure pass-through factor will support the cost of upgrading and replacing these poles and other critical infrastructure that is aging. To protect customer costs, this factor includes an annual cap and only collects for expenses that have been incurred.
  • Base Rate Revenue Target (BRRTP): The BRRT uses a standard industry practice called decoupling to encourage conservation while covering LADWP’s fixed costs of providing reliable water and electricity service. Revenues above the sales target will be returned to customers while revenues below the sales target are recovered through charges over the next calendar year. 

  • Power Access Charge:  Previously, LADWP had no service charge (a fixed monthly charge) for residential customers. The 2016-2020 rates include a graduated, consumption-based service charge. The charge is designed with three tiers of usage—Tier 1 being the lowest. The goal is to ensure that all customers contribute to the fixed costs of operating the power system in proportion to the amount of power they use.
  • Rebalancing: In developing the proposed rates ordinance, LADWP has “rebalanced” the rates to be equitable among customer sectors, based on a 2014 Cost of Service Study.