The Board also formally adopted LADWP’s “Project PowerHouse” Initiative which has helped bring online over 1,800 units of 100% affordable and permanent supportive housing in support of Mayor Bass’ Executive Directive 1
LOS ANGELES (August 17, 2023) — On Tuesday, the Board of Water and Power took an important step toward spurring economic development throughout the city by approving a policy that will have LADWP’s present and future customers 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, is 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.
“From the start of my administration, I have been working to remove the bureaucratic red tape and barriers that prevent the building of housing that Los Angeles so desperately needs,” said Mayor Karen Bass. “I commend the LADWP Board for taking important action on policies that may have led to hurdles for development. This action will accelerate the development of affordable and permanent supportive housing as well as reducing the cost of power upgrades in these projects. The City is coordinating across departments to accelerate and reduce the cost of affordable housing throughout Los Angeles.”
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. 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.
“Fairly apportioning the often-significant costs to build-out required public right-of-way power infrastructure for development projects in Los Angeles is a policy reform that demonstrates our desire and willingness to ‘Lead with Equity,'” said Cynthia McClain-Hill, President of the Board of Water and Power Commissioners. “Spreading the costs for underground line extensions to all prospective customers that will benefit from them, not simply the first builder, is a fair approach. That’s ‘Leading with Equity.’ That’s not just our belief. It’s our perspective. And it’s the right one.”
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 move to amend the former policy reflects the Board of Water and Power Commissioners’ determination to modernize the way LADWP does business to serve the City and its customers’ needs.
“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. “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, in support of the Mayor’s Executive Directive 1. The practice has been the hallmark 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%.
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 the City of LA.
STATEMENTS OF SUPPORT:
“VICA would like thank the Commission and the Department of Water and Power for coming up with this creative outside the box style policy change. This policy change will add much housing stock by removing a financial obstacle and encourage economic development by sharing some of the LADWP costs required for customer-initiated projects. This change will also bring LADWP into alignment with other electric utilities throughout the state of California.”
-Stuart Waldman, VICA President
“By sharing costs and resources, LADWP can collaborate with other electric utilities throughout California and drive a more unified and sustainable power distribution strategy. Even more so, the proposed amendment allows LADWP to bear the costs of underground line extension for 100% affordable and permanent supportive housing projects. This alignment supports ongoing initiatives to address homelessness and housing challenges, such as Mayor Bass’ Executive Directive No. 1.”
-Nella McOsker President & CEO Central City Association
LADWP Media Relations: 213-367-1323