LA water and power board orders rate review after bill spikes

The Los Angeles Department of Water and Power board of commissioners passed a resolution on Tuesday night requesting a comprehensive review of the agency's rates. The vote follows months of customer complaints regarding steep increases in monthly bills, with some residents seeing their costs rise by thousands of dollars.

Tim O'Connor, executive director of the Los Angeles Office of Public Accountability, called the decision a positive step. His office serves as the independent ratepayer advocate for the city. O'Connor noted that the agency's current rate structures were designed more than a decade ago. He argued that the review should modernize these systems to better reflect current technology and usage patterns.

A major point of contention is the speed of the rate increases. An analysis from the UCLA School of Law Emmett Institute on Climate Change and the Environment found that LADWP rates surged by 45% over the last year. In comparison, Southern California Edison, a private utility serving the same region, raised rates by only 4% during that same period.

Denise Grab, a director at the Emmett Institute, described the LADWP increase as far exceeding inflation. She explained that the agency is catching up on deferred maintenance and funding new capital projects. This shift has caused what she calls sticker shock for many Angelenos who previously paid below-state-average rates.

Executive compensation has also drawn scrutiny. CBS California Investigates found that nine LADWP executives earn more than $700,000 annually. Additionally, more than two dozen supervisors make over $600,000 per year. LADWP stated in a news release that these salaries are necessary to attract skilled workers in a competitive market.

The utility provided a breakdown of labor costs to address concerns. Overtime pay accounts for 5% of the agency's $10.8 billion budget. Total labor costs represent 18% of that budget. LADWP reported that overtime compensation rose by 17%, moving from approximately $426 million in 2024 to over $499 million in 2025.

Despite the high percentage increase, LADWP rates remain lower than those of its neighbors. A 2026 study commissioned by the city of Pasadena and conducted by New Gen Strategies found that LADWP bills are cheaper than those from Glendale Water and Power, Southern California Edison, Burbank Water and Power, and Pasadena Water and Power.

LADWP plans to install new smart meters over the next year to help customers track their usage in real time. O'Connor said this data is essential for consumers to manage their bills. He emphasized that the review should also look at time-of-use pricing. He wants to incentivize customers to use power during off-peak hours when solar energy is abundant and cheaper.

O'Connor also urged the agency to adjust its low-income assistance program. He argued that using the federal poverty level as a benchmark is inappropriate for Los Angeles due to the city's high cost of living. He wants to raise the income threshold for eligibility to help more residents afford basic utility services.