Now that you know about the secret LADWP rate that may lower your common area electric bills, here’s how to apply for a rate change.
Alas, the easy-to-use rate calculator has disappeared from the LADWP website. To find out if you might save money by switching, you’ll need to ask LADWP directly.
The good news, though, is that if you do ask, LADWP appears to be more willing than before to help you qualify for that rate. And the rate will be applied retroactively to the date of application–even, as reported to CondoWonk, almost two years later.
Applying is easy. Just email LADWP’s Rates Department at Rates@ladwp.com.
Include your account number and street address in the email, the name on the account and your relationship to the property (such as HOA president or property manager). Ask LADWP to calculate whether the A1A rate is beneficial for your building.
Evaluating Savings
LADWP picks the months in which to calculate your potential savings. Remember that the A1A rate is the rate you will pay all year, with little fluctuation. The biggest savings occur in the summer months when tier 3 pricing on the residential rate jumps up.
If the comparison is done only on cooler months, you may not see the potential savings. To see if you will save money on an annual basis, look at how much you paid for electricity over the last year and compare that to the projected A1A rate, annualized for twelve months.
If the A1A rate is better for you, reply to the Rates Department email that you want to make the change, effective immediately.
There is no obligation in applying. Unless you agree to the rate change, your rate will remain unchanged.
The Goldilocks Effect
To get the best LADWP rate, a building must be in a sweet spot between too big and too small. It’s a generous sweet spot. Many, if not most, condos appear to fit into that category.
Our 26-unit building hit the mark. We paid more than $26,000 in the 12 months before switching to an A1A rate. Since the rate change two years ago, our bills averaged about $21,000 per year.
On the “too big” side, a reader’s 45-unit building with two elevators, a bank of EV chargers and large airconditioned lobby and hallways didn’t qualify for the A1A rate. Instead, they use a different commercial rate, the A-2 rate. That higher level commercial rate is slightly more expensive per KWH than A1A, but it is still a much better rate than the residential LADWP rate.
How Small is Too Small?
Some very small condos may do slightly better on a residential LADWP rate. But even relatively small buildings can benefit.
After our building’s success, our manager requested LADWP rate changes for several other buildings he manages. Buildings with annual common area electric bills as low as $3,000 to $4,000 realized a small savings on electricity.
Even if a small condo just breaks even on an annual level, the A1A rate eliminates the summer rate spikes. Bills on the A1A rate fluctuate very little from month to month, improving cash flow.
Facility Demand
The A1A rate is intended for commercial or multifamily facilities with steady energy consumption and no significant spikes.
Condo buildings are great examples of steady demand. Running electric vehicle chargers from the HOA meter may cause problems, but for the most part, condo buildings usage for lights and elevators, etc., stays within a narrow range.
In a cautionary tale, an electrician described a small office building that had a one-day carnival with bounce houses and other energy consuming activities. They lost their A1A LADWP rate due to the spike in electric use.
Take a look at your HOA electric bill. If it shows not just monthly energy usage (kWh) but also Facility Demand (kW), you have a commercial meter, which helps in the calculation of your eligibility.
Even if you are missing a Facility Demand number, you may still be eligible for the A1A rate.
Solving a Meter Problem
A 50-unit townhouse community told CondoWonk it was denied the A1A rate for their common area because, according to an email they received from LADWP, a commercial grade electric meter is required.
CondoWonk asked LADWP about this issue and was able to get some relief for this reader, as well as useful information for others in a similar situation.
LADWP stated that the HOA can ask LADWP’s Rate Application Group to estimate the kW demand. The spokesperson said:
Select LADWP staff have been trained to estimate kilowatt demand based on the customer’s kilowatt-hour consumption. Customers are advised that this estimate may not be fully accurate, and if the A1A rate results in higher bills, they have the option to return to the R1 rate. Please alert your reader they may resubmit their request for a bill comparison estimate noting that they recognize such estimate in the absence of a demand meter may be less accurate.
If your current electric bills are missing a kW calculation for Facility Demand, include the following language:
We would like our kW demand to be estimated. We understand that the estimate may not be accurate in the absence of a demand meter, and that we can return to the R1 rate if the A1A rate results in higher bills.
Persistence and Pay-Off
One CondoWonk reader contacted LADWP about a rate change in October of 2023, right after the first article appeared. LADWP claimed that they needed to conduct a building inspection (even though the reader’s common area bills included a kW reading) and that all the inspectors were booked. The request also appears to have bounced around between departments and over-the-phone conversations.
The reader recently followed up and the rate was just approved, without the need for a building inspection. In its notice approving the change, LADWP stated it is applying the rate change retroactively to November of 2023—almost two years.
Bottom line: Keep the whole correspondence on rates@ladwp.com (not other LADWP departments) and avoid phone calls. If you don’t get a response or the response is not helpful, follow up at the same email address.
What About Utility Companies Outside LA?
As discussed in the earlier CondoWonk article on the Secret Electric Rate, the California Public Utilities Commission ruled in 2003 that HOA customers should be allowed to switch to commercial LADWP rates to avoid the peak charges on the residential rate.
That ruling is still out there and presumably applies to all privately-owned utilities in California. The ruling did not apply to LADWP, which is a municipal utility.
What LADWP rate are you using? Please write to info@condowonk.com to share your experiences for a follow-up article on how utility companies outside of LA handle electric rates for condo common areas.
