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Electric rates may rise

City officials say 6% hike is needed to pay for capital improvements.

July 06, 2012|By Brittany Levine, brittany.levine@latimes.com

Glendale Water & Power expects to increase electricity rates more than 6% over multiple years to generate roughly $13 million annually — continuing a steady course of ever-rising costs for consumers as the utility struggles to balance operating costs with income.

The rate increase proposal has not been announced publicly at City Hall, but was included in a report last month from Fitch Ratings, which said the electric rate increase was needed to bolster the utility's thin revenue margins. City officials, who confirmed the 6% figure this week, say that without a rate increase, needed capital improvements will be delayed.

The city plans to host four outreach meetings about the proposed increase this month before it's reviewed by the Glendale Water & Power Commission and eventually the City Council later this summer.

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The proposed electric rate boost comes after the city earlier this year changed water rates to charge residential customers more depending on how much water they use. The city is set to get less than a 1% revenue boost the first year, 2% the next and then 4% and 5% the next two years after that.

Glendale's average residential water customer now pays $60.36 per month under the new rate, which is a few dollars more than Burbank and about $15 less than Crescenta Valley, according to the latest Glendale Water & Power report.

Since 2007, water rates have increased about 38.8%, but that was after years of no change.

According to Fitch Ratings, the electric rate increase is needed to bolster revenues on the electric side of the utility.

Meanwhile, the City Council approved transferring $21 million, 10.4% of Glendale Water & Power's electricity revenue, to the city's General Fund — which pays for most public services like public safety and libraries — even as a debate over the practice rages on.

Critics contend the transfer is illegal and contributes to the need for the utility to raise rates.

Last year, the city halted its $4-million transfer from Glendale Water & Power's water side as a precaution after recent court cases threw the legality of the practice into doubt. But the state proposition that limits how property-related assessments can be spent excludes electrical services.

And city officials have argued that Glendale Water & Power revenue should be fair game to City Hall, as both are part of one entity.

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