Los Angeles Department of Water and Power – Water Revenue Surveillance Report

Rating Summary

The long-term rating reflects the stable operating and financial performance of the Department of Water and Power of the City of Los Angeles (“LADWP” or the “Department”) Water System. Supported by conservative, Board-adopted financial planning criteria and full rate-setting authority, the Department has demonstrated consistently strong liquidity, sound debt service coverage, and elevated but manageable leverage. LADWP is the nation’s largest municipal utility and serves as the exclusive provider of electric and water utility services to a broad, primarily residential customer base within the City of Los Angeles (the “City”).

Counterbalancing these strengths is the need for continued increases in already elevated water rates and for substantial additional indebtedness over the near to medium term as the Department addresses costly Water System requirements, including compliance with EPA Safe Drinking Water mandates and the implementation of a $7.7 billion FY 2026 - FY…