Government Offers L.A. Funds for Utilities Relief

HUD will donate millions of dollars to the city's housing authority to help cover rapidly rising power costs. Nine other communities will get aid.

By ELIZABETH SHOGREN, ERIN TEXEIRA, Times Staff Writers

WASHINGTON--The federal government will give $50 million to public housing authorities in Los Angeles and nine other cities across the country to help them pay utility bills that have soared because of rising power costs and unusually cold winter weather.

The emergency relief effort, to be announced today, also will provide $55 million to help the nation's other 3,100 public housing agencies pay utility bills that exceeded their budgets. The Housing Authority of the City of Los Angeles is the only California agency to qualify as one of the nation's 10 hardest-hit housing agencies, making it eligible for the additional federal assistance, said officials of the Department of Housing and Urban Development.

Energy costs at the 10 agencies eligible for the special emergency money have risen at least 20% above budgeted projections. Los Angeles City Housing Authority's energy costs have been 24% higher than anticipated, HUD officials said. The money will be used to pay for heating and other utility bills for the public housing projects run by the agencies.

The size of the grants will be decided on a case-by-case basis after applications are received, so it was not immediately known how much of the emergency funding Los Angeles could receive, HUD officials said. The $105 million in new aid reflects the Bush administration's growing recognition that the surge of energy costs is too great for many localities to handle alone.

"We are in a situation where some significant response had to be taken in order to avoid hardship for the housing authorities and people who live there," HUD Secretary Mel Martinez said in an interview Sunday. Donald J. Smith, executive director of Los Angeles' housing authority, said he was surprised and pleased at the news that additional money would be available.

The authority had been concerned before the announcement that it would have to pass on some of the increased costs to residents, but Smith said the extra assistance could forestall such an increase. The cost of natural gas has risen across the region. Bills for the Southern California Gas Co.'s 18 million customers, for example, have increased about 60% over this time last year, according to Denise King, a gas company spokeswoman.

"Certainly the gas prices we've seen this winter have been unprecedented, and that has hit our low-income customers hardest," King said. "Any time additional funds become available, that's good for all our customers."

Although Los Angeles has been spared the rolling blackouts that vexed other communities in the state, local officials welcomed the federal aid. "Natural gas rates have escalated so dramatically, it's having a huge effect" on local utility bills, Los Angeles City Councilman Mike Feuer said.

Feuer, who formerly ran a public interest law firm focusing on the needs of low-income residents, acknowledged that Los Angeles "has been insulated from the electricity hikes" in other parts of California. But he added, "this relief will still be welcomed."

Randy Hough, a spokesman for the Department of Water and Power, said that if federal officials "want to give assistance to the city of L.A., then L.A. can sure use it." The emergency aid money comes from funds already allocated by Congress, so there will be little delay between the time a housing agency applies for the money and receives it.

"This was a problem that begged for a strong and immediate response," Martinez said. Other housing agencies have been hit even harder than Los Angeles. In some cases, utility bills have climbed 50% over expectations because of the combination of an unusually cold winter in some regions and increasing energy prices, Martinez said.

The nine other housing authorities that qualified for the special emergency funding are: Atlanta and Savannah, Ga.; Yonkers and Beacon, N.Y.; Des Moines; Cook County, Ill.; Wilkes-Barre, Pa.; Austin, Texas, and Birmingham, Ala. * * * Shogren reported from Washington and Texeira from Los Angeles.

-- Swissrose (cellier3@mindspring.com), March 19, 2001

Answers

Wait a minute. City of L. A. DWP had so much excess generating capacity, they were going to reduce rates to customers or so they said a couple of months ago. What a boondogle. Talk about misappropriated funds.

-- PHO (owennos@bigfoot.com), March 19, 2001.