The Department of Water and Power will need to hike utility rates to replace the city's aging infrastructure and invest in green energy, but the actual rates won't be determined until after a series of community meetings, officials said Saturday.
More than 70 percent of the city's electric generation system will need to be replaced, and the use of coal, which accounts for 40 percent of the city's energy supply, is slated to be entirely eliminated by 2030 in moves that city officials called a "massive transformation" of the DWP.
"That is a sea change to have that happen so quickly," said DWP Manager Ron Nichols at a first-of-its-kind joint meeting between the council's Energy and Environment Committee and the civilian DWP commission. "We can't do that with our current finance levels."
The plan also calls for imported water to be cut by half within 25 years, while the city shifts its supply to recycled water, conservation and treatment of ground water and storm water, Nichols said.
"There's no question that it's exceptionally cost efficient to be using storm water that is generated locally rather than importing water 500 miles away," said Councilman Paul Krekorian. "Especially realizing that 25 percent of the state's electricity is used to move water around the state to be treated. It's absurd."
Facing a budget deficit, the DWP made cuts to renewable energy projects and water operations and maintenance last year, and cut another $440 million to its basic business costs. The DWP would need to borrow $1 billion over the next four years to maintain operations, Nichols said.
The city's water mains, which have an average lifespan of about 100 years, are being replaced at a frequency of about 400 years, while power poles, which last less than 100 years, are replaced about every 150, Nichols said.
"We're being as cost efficient as we can, but we can't just keep cutting programs and costs forever," Nichols said. "These are investments we need to do for the future."
Meanwhile, hundreds of environmentalists filled the council chambers and called for the city to fast-track its goal of eliminating coal use by a decade to 2020, citing pollution issues.
"The best way to protect the ratepayers down the line is to get off coal because the cost of coal is only going to rise," said Jenny Binstock, an organizer with Greenpeace. "We're challenging LA to get on the bandwagon sooner."
The new rates are scheduled to take effect November after a series of meetings with ratepayers and neighborhood councils this month and next to discuss cost priorities.
"It's going to be a very long, laborious process as we get into much more specific information," said Councilwoman Jan Perry. "A renewable portfolio ... obviously is going to cost the ratepayers and at some point, we're going to just need to ask them directly whether or not that's something they want to pursue."
Three meetings will take place in the San Fernando Valley:
East Valley - June 15, 6:30-9 p.m. at the Marvin Braude Constituent Center in Van Nuys
West Valley, June 16, 6:30-9 p.m. at the Warner Center Holiday Inn, Woodland Hills North Valley
Northeast Valley - Special Workshop for Neighborhood Councils, June 18, 10 a.m.-12:30 p.m., Los Angeles Mission College, San Fernando