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Electric rates stir up crowd

Transfer of utility funds to the city's General Fund heats up the discussion.

July 12, 2012|By Brittany Levine, brittany.levine@latimes.com
  • Glendale Water & Power is seeking to raise electric rates by 14.7% over four years, starting with a 3% bump in 2013.
Glendale Water & Power is seeking to raise electric… (Raul Roa / Staff…)

City officials on Wednesday embarked upon a series of public outreach meetings to explain the need for higher electricity rates. Instead, they found themselves defending the transfer of millions of dollars from the utility to Glendale’s coffers — a move critics say artificially pushes rates up.

Glendale Water & Power is seeking a 14.7% electricity rate increase over four years, starting with a 3% bump in 2013, citing the need to boost revenues to cover the cost of badly needed infrastructure projects and to maintain its standing with credit rating agencies.

In 2013 alone, the revenue generated by the initial rate increase and the sale of bonds would total $20 million. At the same time, the city plans to transfer $21 million of Glendale Water & Power’s electricity revenue to the General Fund — which pays for libraries, police and other public city services — this fiscal year.

It’s a practice that’s been in place for decades, but in recent years a fiery debate has been sparked over the transfers, with some likening them to a backdoor tax.

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“Is this a tax increase or a rate increase?” asked resident John Kociemba as others questioned whether the utility would need to boost rates at all if officials halted the transfer.

But City Manager Scott Ochoa said even without a transfer, the utility would need to raise rates, noting that the increase may reduce the need to issue bonds to pay for infrastructure improvements. Glendale Water & Power officials hope to complete $87.6 million in critical capital improvements on the utility’s electricity side over five years.

Hiking rates by 3% in 2013 and 2014, and then by 4% in 2015 and 2016 — as well as issuing about $60 million in bonds — would provide the city with enough money to cover those costs through 2017, officials said.

The work includes improving the aging Grayson Power Plant, using more renewable energy — a state-mandated change that is more expensive than natural gas — and updating technology.

Rondi Werner, president of the Adams Hill Neighborhood Assn., said raising electricity rates now is bad timing, given that Glendale Water & Power overhauled the water rate structure in March to charge customers differently, depending on how much water they consume and the size of their meters.

“Every time they do a rate increase, they say it’s for improving infrastructure,” Werner said.

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