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Los Angeles Carbon Reduction Surcharge on DWP Electricity - April 1, 2010

Los Angeles Mayor Antonio Villaraigosa sent out a rate hike notice that goes into effect April 1. The money will be locked up for energy efficiency and renewable energy programs.

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With Los Angeles touting green jobs, and energy incentives -- there's hope that businesses will have new opportunities to help home and building owners improve their energy efficiency and generation systems.

ENERGY RATES are going up in Los Angeles.

Beginning April 1, 2010. However, the increases will be implemented gradually over four quarters (ending January 2011).

Money from the Carbon Reduction Surcharge will be put into a Renewable Energy and Efficiency Trust Fund. This fund will be a renewable energy lock-box that will, for the first time, dedicate revenue to creating jobs in the fields of clean energy and energy efficiency. To monitor the lock-box, there will be a level of transparency and accountability that has quite frankly been missing from the DWP's renewable plan. For the first time, ratepayers will know exactly how much they are investing and exactly what they are getting for their investment.

The good news is that, for the vast majority of Angelenos, the monthly bill will only increase by roughly $2.50 - $3.50. Efficient users will pay less. Wasteful users will pay more.

Rates for Residents and Small Businesses

Rates will go up 2.7¢ per kWh. Of that increase, 0.7¢ per kWh will go to a dedicated fund for renewables and energy efficiency.

Most ratepayers are in the Tier 1 catagory, based on their power usage, which translates into a $2.50 - $3.50 increase on their monthly bills. Customers who use more energy--falling into Tier 2 and 3--will pay proportionally more.

For small businesses, this increase would mean a monthly increase of approximately $54.00, or 20%.

Los Angeles Faces State CARB Fines

Under California's Cap and Trade law (AB 32), unless Los Angeles takes action to cut dependence on fossil fuels, we will end up paying huge fines to Sacramento, with no local benefit. These fines could total up to $300 million in 2011-2012, and more than $600 million the next year.

Or LA citizens can make energy efficiency and renewable energy investments now and go green on our own terms, in a way that will maximize local jobs. With collective investment now, LA can ensure collective benefit for the long term.

Selling Renewable Energy Back to the DWP

In addition to energy efficiency programs, businesses and residents will have the opportunity to participate in a Solar Feed-in Tariff (FiT). A solar feed-in tariff allows the owner of an in-basin solar facility (i.e., businesses who install solar panels on their rooftops) to sell electricity directly to the LADWP at a guaranteed price for a set period of time.

In most cases, under the FiT program, both businesses and residents can dramatically reduce or even eliminate your power bills. In some cases, businesses can even use the Feed-in Tariff to turn a profit.

Creating Local, Green Collar Jobs in Los Angeles.

The Carbon Reduction Surcharge will create as many as 18,000 local jobs over the next 10 years. Using US Department of Energy methodology, the $168 million that the DWP will be investing in renewable energy sources will create 1,826 jobs per year. That translates into 18,260 jobs over 10 years.

We will use the solar feed-in tariff program to turn Los Angeles, with our bountiful sunshine, into a capital of solar power.

According to a Berkeley study, approximately 13 installation jobs and 20 manufacturing jobs are created for every megawatt of solar energy installed. And the DWP will be incentivizing the use of local manufacturing to make sure those jobs go to Los Angelenos.

Edited by Carolyn Allen, owner/editor of California Green Solutions
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