20 Apr 2009

LADWP Raises Rates

This is slightly old news, but it's good news, and I have some comments.
Warning that the city faces a water shortage this summer, Los Angeles officials approved new water rates Tuesday that will penalize residents if they don't cut their water use by 15%.


Customers will have to use less water to stay within a base rate. If they already are well within that range -- as many low-income customers are -- their bills should not rise, officials said.

Charges in a second tier above that base level will jump 44% under the plan. Higher overall summer rates will remain in effect year-round.


Citywide water use has dropped 5% since officials stepped up conservation calls 18 months ago because of a statewide drought now in its third year. But department officials said that is not enough to counter the 12% shortage in city supplies they expect.
This is good news because the price increase hits those who use more water, i.e., those in the second tier. Here's LADWP's justification for a second tier:
Two-tiered rates were first implemented by the DWP in 1993 to encourage conservation. The significant impact of this change was on single-family residential customers. The single-family residential tiers were revised in 1995 to account for lot size, temperature zone, and household size.

The motivation for the two-tier rate structure of the DWP is (1) to induce efficient water use, and (2) to confront future droughts without having to increase rates for those customers practicing conservation and thus remaining within the first tier usage block.
The parts that I dislike are three:
  1. Allocation within a tier is determined by lot-size. I dislike the idea that bigger lots (lawns!) get cheaper water.
  2. Allocation is also determined by temperature. I don't think we should give more cheap water to people who choose to live in hotter places.
  3. As I pointed out here, tiers are TOO BIG, i.e., most people get a HUGE amount of cheap water before they face a rate hike.
So my suggestions for LADWP's next move are to reduce the allowance for lot size and temperature zone, and reduce the quantity of water in the cheapest tier.

Wait! In this update on the City Council's approval of the rates proposed above, there are a few telling remarks:
Council members complained that DWP bills don't make it clear to residents how much they have to cut consumption to stay in the first-tier pricing. "Why can't you just put it on the bill?" asked Councilman Dennis Zine.


Councilman Richard Alarcon, who represents part of the San Fernando Valley, said the new pricing would hurt horse owners. "You can't tell your horse, 'Don't drink that much today.' "

He proposed an amendment, which was passed, asking the DWP to devise hardship exemptions for customers with livestock and special medical needs.
Excuse me? Exemptions for HORSE OWNERS?!? Why not give an exemption for people with Mercedes? After all, they face high car payments. Geez.

As to Zine's comment, I fully agree. That's why LADWP should adopt HUMAN-based rate schedules: Count the people in the house, multiply by 75 gallons, and then you know how much water you have in the cheapest tier.

Bottom Line: We will not conserve water until it's expensive! Some (not too much) for free, then pay MORE for more. Oh, and we will ALSO not conserve water if we cannot understand our water bills!

hattips to DW and RR

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