Los Angeles residents and businesses will face higher electricity bills as the Department of Water and Power transitions to 100% clean energy, according to a report from the city's Public Accountability Office.
Monthly bills could rise 7.7% annually over the next few years if the city maintains its goal of 100% clean energy by 2035, according to the report, which finds the cost “unreasonable” for customers and recommends pushing back the 2035 benchmark.
According to the DWP, the average monthly electric bill for apartments and homes is $65.81. The city has also proposed increases in sewer rates, which appear on the same bill.
Fred Pickel, a ratepayer advocate for the Public Accountability Office, an independent city department that oversees DWP rates, expressed concern that in the rush to meet the 2035 goal, DWP could commit to outdated technology, which could be more costly in the long run.
One example is the DWP's embrace of battery storage, which could help conserve solar power. That technology is expected to change over the next decade.
The DWP aims to phase out coal and gas and boost wind, solar and geothermal power, as well as possibly green hydrogen, and reach 100% clean energy by 2035.
The 2035 goal, part of an effort to reduce planet-warming carbon emissions that cause deadly heat waves and raging wildfires, among other consequences, was first announced by then-Mayor Eric Garcetti in 2021.
The state of California has a similar mandate, but with a deadline of 2045.
DWP bills are expected to rise due to new systems to distribute clean energy and new technology such as “smart” thermostats, as well as staff increases, according to the Public Accountability Office.
Pickel acknowledged that his report is based on information from the DWP's 2022 plan for the city's energy supply over the coming decades.
The 2024 version of that plan is due out later this year, likely altering the utility's cost projections.
The Public Accountability Office report also fails to account for billions of federal dollars available to utilities under the Inflation Reduction Act of 2022, which is intended to help households save money on energy bills.
Pickel acknowledged that the report does not include the costs to the planet or the effects on human health that could result from delaying the long-standing 2035 target.
However, Pickel expressed concern about the DWP’s approach to meeting the 2035 target, which it had previously stated but never so explicitly. Pickel, who is due to retire at the end of this year, quoted President Eisenhower in his report, writing: “Plans are of no use, but planning is everything.”
“People rightly want to reduce carbon as quickly as possible,” Pickel told the Times. “But Los Angeles will have a bigger impact if we can convince people that it can be done cost-effectively and quickly… We shouldn’t be blindly moving toward 2035, no matter what.”
The DWP provided a statement from Simon Zewdu, senior deputy general manager of the utility's energy system.
The DWP is “absolutely committed” to achieving 100% clean energy by 2035 in an affordable way, Zewdu said.
Mayor Karen Bass affirmed her support for the 2035 goal during her annual State of the City address in April, saying she was “proud to continue Los Angeles’ global leadership on climate change.”
Bass's office did not respond to requests for comment on the report, which was sent to city leaders last month.
If the city were to extend its deadline to 2045 — the state’s benchmark — bills would rise 4.8 percent annually thereafter, the report said, calling the increase “modest.”
In the 2035 scenario, the increase could be even higher at 7.7% per year, depending on how the DWP decides to transition to clean energy.
In contrast, DWP energy bills have risen by between 4% and 4.5% annually over the past two years, according to Pickel.
Projections include expected annual inflation increases of 2.5%, as well as increases resulting from the state's transition to clean energy.
Tony Wilkinson, chair of the DWP's Neighborhood Council Advisory Committee, said city leaders have touted the 2035 target without detailing costs.
He said he fully supports getting to 100% renewable energy, but questioned whether waiting until 2038, for example, would be cheaper.
“The sooner a technology is adopted, the more expensive it will be,” he said.
Environmental leaders said they welcomed some of the report's recommendations, including the need to spend more money on converting transportation and buildings to electric power.
But they rejected pushing back the 2035 date. Julia Dowell, lead organizer of the Sierra Club campaign, said meeting the timeline is “absolutely critical.”
“Failing to rapidly decarbonize the city means exacerbating the country’s worst air pollution and related health costs,” he said. “It also means increasing the likelihood of future climate catastrophes.”
Andrea Vega, an organizer with Food & Water Watch, said there is “a huge cost to public health” from fossil fuel use and that Los Angeles should focus on investing in programs that mitigate rate increases.
Critics also said the report fails to take into account some of the savings drivers could enjoy by not having to buy gasoline, for example.
Loraine Lundquist, an associate professor at Cal State Northridge’s Sustainability Institute, said the report “ignores the incredible costs of continuing to burn fossil fuels.”
“The wildfires currently raging across the state make it clear that the cost of maintaining the status quo is enormous,” he said.
