New LADWP Policy Calls for Spreading Out Infrastructure Upgrade Costs to All Benefitting Customers

by Paul Ciampoli
APPA News Director
August 22, 2023

The Board of Water and Power Commissioners for the Los Angeles Department of Water and Power recently approved a policy under which LADWP’s present and future customers will fairly share in the cost of new power infrastructure upgrades located in the public right-of-way for construction projects, commonly known as underground line extensions.

Under the previous LADWP policy, the cost of electrical infrastructure upgrades to support the electric service needs for new customers, and customers needing upgrades, was assessed to the first customer, typically a developer, rather than apportioning the upgrade costs to all expected power users that will derive a benefit from the upgraded power infrastructure.

Charging the full infrastructure upgrade cost to the first customer requiring the upgrades has been a significant financial burden for many development projects in the city, LADWP noted.

“By apportioning this cost burden and implementing a system to spread out the upgrade cost to all benefitting customers, LADWP will encourage and support the development of new housing and electrification infrastructure, including additional solar and EV chargers,” it said.

Under the newly-adopted policy, LADWP as well as other adjacent customers, would share in the cost of the additional power conduit and structural system upgrades, if they also benefit from the upgrades.

“The change to the policy brings LADWP in step with other electric utilities throughout California and is frankly, a win-win for customers and for LADWP,” said Aram Benyamin, LADWP Chief Operating Officer, in a statement. “We expect to see an uptick of customer-initiated power infrastructure projects throughout the city with the approval of this new approach which will in turn, help us shore up our own electric grid to be more resilient to the modern demands on our power system.”

Separately, the Board also voted to make permanent the practice of LADWP covering the substantial cost of underground line extensions for 100% affordable and permanent supportive housing developments in Los Angeles. The practice has been a key part of LADWP’s successful “Project PowerHouse” Initiative launched in March 2023.

Since its launch, LADWP has received more than two-hundred 100% affordable housing projects with 52 currently in active construction.

“Project PowerHouse has demonstrated that, by working very closely with affordable housing developers on tight timelines, the preliminary, design, and construction phases of affordable housing project development can be dramatically reduced. In total, LADWP has cut the development review, engineering, and construction timeline by 86%,” the public power utility said.

Twenty-nine projects since the launch of the Mayor’s Executive Directive 1 have already been placed into service and benefited from the expedited approval timeline of Project PowerHouse. These projects have already provided 1,849 new 100% Affordable or Permanent Supportive Housing units in Los Angeles.