[ilbegone]

Opinion piece by Walter Moore:

DWP's rates grossly unfair to customers

By Walter Moore, an author and attorney who finished second in the March 2009 L.A. mayoral race.

04/05/2010

When you go to the gas station, the price per gallon is posted clearly.

The price per gallon depends on the grade of gas. Period. The price you pay per gallon is not based on how many people are in your car, whether you're driving for business or pleasure, how much money you made last year, or how many gallons you buy.

The city of Los Angeles, by contrast, uses its monopoly over water and power to impose an incomprehensible mish-mosh of prices, the effect of which is to force some customers to subsidize others' bills.

The Los Angeles Department of Water and Power's Web site shows that the city-owned utility has 19 different power rate schedules, plus three "riders."

Schedule R-1 imposes different rates depending on the time of year (i.e., "high season" or "low season"), where you live (i.e., which "zone"), and how much electricity you use (i.e., what "tier"). The schedule also imposes different rates based on whether the customer is receiving "Standard Service," "Time-of-Use Service," "12-Month Trial Time-of-Use Service," "Low-Income Service," or "Lifeline Service." There is even an "Electric Vehicle Discount."

The differences in the rates can be dramatic. The lowest rate on that schedule is $.04655 per kilowatt-hour, and the highest is $.16061 per kilowatt-hour.

If that seems like a very tiny number, let me put it a different way. For a given amount of electricity, one customer would pay $465.55, and another would pay $1,601.10 - nearly two-and-a-half times more.

Repeat: You could pay $1,601.10 for the same amount of electricity someone else gets for just $465.55.

Schedule R-3 imposes a completely different regime for "master-metered residential facilities and mobile home parks, where the individual single-family accommodations are privately Sub-metered."

General Service Rider EZ, moreover, knocks 35 percent off the bills of businesses that are located in one of several "Enterprise Zones:" the Central Los Angeles Region Enterprise Zone, the East Valley Region Enterprise Zone, the East Los Angeles Enterprise Zone, the Harbor Enterprise Zone, the Hollywood Enterprise Zone, and the Los Angeles Enterprise Zone.

This maze of rates is confusing, unfair, and bound to distort the efficient use of resources. Some people are clearly paying far more than it costs to produce the electricity they use, and some are clearly paying far less.

The DWP is, simply stated, robbing Peter to pay Paul.

If City Hall is going to redistribute income - if it is going to force you to pay someone else's water and power bills - then it should do so openly. City Hall should use tax revenues to provide vouchers to people that we, the taxpayers of Los Angeles, believe deserve help with their bills. That way, we all know who is getting how much of a subsidy, and the basis for it.

Instead, City Hall is using the incomprehensible maze of rates to redistribute wealth from some customers to others - without disclosing that fact to any of us.

The rate that our city-owned utility charges us for electricity should reflect what it costs to produce that electricity. Period. Anything different from that is a secret social policy to redistribute wealth.