People seem confused. I seem confused! As the worst press release in the world once said to me at Morning Edition, “There is so much going on in the world today, it is all one great swirl.” I sat down last night late into the evening to try to catch up and make sense of it all. I’ll work on links within this list this afternoon, but for now, here’s a cheat sheet about higher rates and a carbon surcharge for energy customers of the LA Department of Water and Power who may be wondering what we’re talking about.
- The mayor’s proposing raising BILLS 8 to 28% for two reasons: higher rates, thanks to the Energy Cost Adjustment Factor, and a new “carbon surcharge” to pay for – well, we don’t know exactly. Energy efficiency and renewable energy projects, the mayor said, in a “lockbox.” Why this is different from other revenues, what conditions are on the money…we’re still finding out about that. Generally, they’re saying energy efficiency and renewables.
- Maybe you’re asking how they’ve been getting the ECAF so wrong that they need to kick it up so much faster now. Coal and gas are volatile markets, perhaps more so lately, but pretty much all the time of late: are they really swinging more wildly now, or is the DWP just catching up all at once as it cleans house? The answer is: there’s a cap on how fast they can raise rates via ECAF. Thursday, they’re gonna talk about lifting that cap.
- Water and power commissioners will talk about modifying the ordinance that limits ECAF adjustment upward. One justification for it in board documents is meeting the 20% renewable energy goal this year.
- As for those goals: some of the goals the mayor talks about are state law mandates. Some are political promises made to L.A. by Mayor Villaraigosa. But the state law requirements, like for AB32 and RPS – “renewable portfolio standards” – how much energy is not fossil-fuel generated – can have very real financial penalties attached – up to hundreds of millions of dollars. (That sword of Damocles hangs over utilities heads’ now. If Meg Whitman and Republican legislators get their way, AB32 and some of the Governator’s green goals could get rolled back.)
- Political green-power goals: Mayor Villaraigosa has vowed throughout his administration to get us to 20% renewable energy by the end of this year. Last summer, he upped the challenge to himself by vowing to make Los Angeles coal-free within 10 years. We still rely on coal for about 43-44% of our energy portfolio now. Those are simply promises the mayor’s made; if the city doesn’t make those goals, no financial penalties attach.
- DWP already has a Green Power for a Green LA program. 18-thousand people belong to it, and about 700 businesses. Interim general manager S. David Freeman said on KPCC he’d look into combining that program with the new program; that’s the opposite of what I heard at the press conference Tuesday. I was told there that the Green Power program is voluntary, and the “carbon surcharge” is mandatory, so they can’t be combined. But the bottom line is that the current program never really got off the ground, and now the DWP’s demands may have left it in the dust.
- Around 19-thousand voluntary customers for Green Power. Curious that the mayor says 64% of people (people polled, of course) would be willing to pay (a small amount) more for clean energy. Does that mean something’s really wrong with the Green Power program, or that enough people don’t know about it? Probably the latter. But I think we’ll see from public hearings about how accurate the 64% is when writ large.
- Now that the DWP board meeting is tomorrow, we’re seeing the first numbers for how they project higher ECAF (with a carbon surcharge like an easter-egg inside it) will affect bills. With residential customers, that answer is dictated by usage. At the low end, Tier 1 users, the information to the board projects a monthly change upward of $1.19-$1.68. For Tier 2, a monthly change upward of $6.61-7.39. For Tier 3, a monthly change upward of $18.86-30.84. (Remember, just to make it extra-impenetrable, there are weather Zones overlaying the tiers, giving a bit of a break to the hot places.) There are far more people in Tier 1 than in the 2 or 3, which is why the DWP puts the average in the $2.50-$3.50 range.
- None of this explains why Tom LaBonge will pay an additional almost-11 dollars on his 93.16 average monthly bill, which is what he said at the press conference Monday. I talked to the councilman about that; he had just called DWP up to find out. I believe he said he’s a Tier 2 customer, but he may be a thrifty one, of course.
- What’s city council’s role in all of this? Well. City Council has expressed skepticism about the need to raise ECAF in the past, and has asked DWP to get independent analyses (like the one PA consulting did last month) about ECAF.
Bottom line: I’m v. intrigued by the water and power commissioners’ meeting.
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