COST OF LIVING, EXPLAINED--Following a much hotter late summer and early fall, LADWP received calls from customers who felt their bills were higher than in prior years.
Some felt they had conserved and used less electricity than the prior year, while others felt that their bill was higher due to recent rate adjustments. We asked our financial services staff to take a closer look at this summer’s residential customer bills and wanted to share a few key facts about how much hotter it really was, how many customers experienced an increase in their bill (and how many didn’t), how much our rates have increased, and how our customers can reduce their water and electric use and save on their bill.
This past summer was HOT! How hot? Daily temperatures were 17% hotter in the summer of 2018 when compared to the summer of 2017. This resulted in many customers using more water and electricity than they did a year ago, and, as a result, average residential electric bills were up 12% in August and September, while the average water bill went up 6% (June – September). This increase included the recent rate adjustments which took effect July 1st. Considering it was much hotter than the previous year, the average bill increase inclusive of new rates wasn’t as severe as one might think and a testament to how much our customers continue to conserve, even in the midst of more extreme weather events.
Taking a closer look at our customers’ summer bills, our rates staff also calculated that approximately 70% of our water and electric customers experienced no increase to their bills at all, or actually saved when compared to the same months in 2017. Less than 10% of our customers experienced a significantly higher bill (15% - 30%) than the same period a year ago. So why did bills seem so much higher?
In many cases, customers compared the bill they received to the prior two month bill, rather than the same period in the prior year. Our two-month billing cycle also amplifies the difference from one billing period to another. When our customer service team walked many customers through their bill, most customers realized that their bill corresponded with their actual use, due largely to higher air conditioning use this summer. In some cases, customers’ bills were actually lower than the previous year, but they didn’t realize it until it was explained by our customer service staff. Remember, for a true apples-to-apples comparison, look at the chart (below) on your bill showing your use for the same period last year.
For some of our customers, higher than historic electric and water use pushed them into higher rate tiers for the first time. Based on LADWP’s tiered rates, with progressively higher rates for higher amounts of water and electricity use, a small segment of our customers experienced much higher bills for their summer use than in prior years. Under LADWP’s rate structures, all residential customers receive a set amount of water and electricity at the lowest rate, depending on which temperature zone they live in, and, if they exceed it, the rate is higher for the amount used over the baseline. The rates are designed this way to allow all customers to share in our lowest cost resources, but, as they use more, they pay more to cover the cost of the additional, often higher-cost resources. This tiered pricing structure reflects, in part, the higher cost of resources used by a small number of high volume users. For some super-users, the price signal resulting from these rate structures is strong, and serves as encouragement to invest in energy efficiency or water conservation measures to lower their use, and their bill. That’s where we come in. LADWP has many money-saving programs to help customers reduce their water and electricity use and their bills.
Rebates Help Reduce Use & Save $
Our new attic-insulation program is one easy way for customers to reduce their electricity use, and we’re offering to cover 80% of the cost for qualifying customers. We continue to offer other great water and electricity conservation rebates including for turf removal, variable speed pool-pumps, efficient washing machines, weather-based irrigation controllers and many other efficient products, and home improvements. For more info, customers should visit www.ladwp.com/conservation.
LADWP: Competitively Priced Water & Electricity
We know our customers are always striving for value in the services and products they purchase. We also know that, for a portion of our customers, rate increases present financial hardship, which is why we work hard to keep our rates low and competitively priced when compared to other utilities. Like many other water utilities, our water rates have increased about 23% over the past 3 ½ years, reflecting the cost of severe drought and funding critical replacement of aging infrastructure. Our electric rates have gone up less, about 12% over the same time-period, as we replace aging infrastructure and reduce our reliance on fossil fuels. Even with these adjustments, our rates remain 15% - 20% lower than other nearby water and electric utilities. As a municipally-owned utility, we’re proud that we’ve been able to keep our rates low while making significant investment to upgrade our infrastructure and develop more local, renewable water and electric supplies.
If you or a loved one is having trouble paying their utility bill, we encourage you to call us at 1-800-DIAL-DWP or login online and apply for an extension or a convenient payment plan or even check if you qualify for our low-income discount rate programs. Our customer service representatives can also provide personalized help and evaluate your situation and often can provide immediate payment assistance or an extension.
(Ann Santilli is Los Angeles Department of Water and Power Chief Financial Officer.)