The City of Los Angeles was uniquely successful in dealing with the generating fuel shortage of the winter of 1973-74. A city ordinance required residential and industrial customers of the Los Angeles Department of Water and Power to cut their energy usage by 10 percent, and commercial customers by 20 percent, or face a 50 percent surcharge on their entire bill for the first violation and a service cutoff for subsequent violations. Customers responded rapidly, and total energy demand dropped by 17 percent instead of the 12 percent that was expected. Rand investigated Los Angeles' experience for its applicability to other areas, and found that most of the commercial establishments interviewed considered a 20 percent reduction reasonable; that they were maintaining the reduced level for economic reasons and because it was satisfactory; that changes in lighting usage accounted for most of the reduction. One of the major reasons for the overall effectiveness of the ordinance was the flexibility permitted individual establishments in meeting the targeted reductions.
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