Bullshit.

I don't know how to put it more delicately than that. But that's the only word that comes to mind when the mayor parades forth with union boss Maria Elena Durazo and some environmentalists and announces massive rate hikes for electricity of up to 28 percent targeted at single family homes. And that's just this year. Next year will be worse and the years following even worse.

It's a con job, a snow job, all hot air. It's a fantasy story built around one lie after another.

The issue he should be addressing isn't the rising cost of fossil fuels and the even higher cost of green energy. Those are real and must be addressed and they undoubtedly require somewhat higher rates both to reflect costs and to pressure us all to use less electricity.

The issue is the Department of Water and Power, its long-term mismanagement, its failure to plan for the future, its decade-long resistance to going green, its total lack of transparency, its outrageous payroll costs, its giveaways of fortunes of ratepayer money and its sloppy contracting processes.

That's just for openers.

Let's start at the top.

Rubber-stamping of poorly conceived policies and plans by the DWP Commission must end and a new commission put into place that has independence and expertise and the authority to create a Rate Payer Advocate to protect the public and penetrate the wall of obfuscations and deceits used by management to hide the truth.

No one bears greater responsibility for what's wrong with the DWP today than interim General Manager David Freeman.

A decade ago he was fired as GM by then Mayor Richard Riordan for good cause, not the least of which was his initiating the largest solar energy program in U.S. history, a program that produced negligible power while squandering tens of millions of dollars.

He is a man who will say and do anything at this point in his life without regard to the truth, the reason no doubt Antonio Villaraigosa resurrected him as his energy chief and now head of the DWP. He has been tied financially to the Villaraigosa's eminence noir and fund-raiser Ari Swiller among other green energy profiteers that surround the mayor.

Freeman makes deposed GM David Nahai, now a legal consultant on energy, look good. His promised six months is up and he must be replaced by someone of stature, integrity and independence before any significant rate increases are contemplated.

Whatever happened to "shared sacrifice," does it not apply to the DWP? Why should the public pay more when the mayor has given raises up to nearly 6 percent to overpaid DWP employees and even in these deflationary times of economic hardship are still getting raises of up to 4 percent a year for the next four years?

Let's see union bully boy Brian D'Arcy match every dollar ratepayers have to pay with equal dollars in union givebacks.

Of course that's unthinkable since he has most everyone at City Hall scared to death of him and his threats of retaliation and strikes.

The blackmailed contracts D'Arcy has gotten along with the annual transfers of so-called "surplus" electricity revenue is why the DWP is in financial straits. The transfer, raised by Villaraigosa from 5 to 8 percent, comes on top of the 10 percent electricity tax and amounts to more than $200 million a year.

The report on DWP by PA Consulting(IEA-summary.doc)(IEA-excerpts.doc) that was suppressed more than a year ago provided a detailed indictment of the utility's management. The new report by PA Consulting that is being used to justify this new round of rate hikes is even more damning.

You will see just how damning if you read the Conclusions and Findings
(PA-ECAF-Findings.rtf). Jack Humphreville, head of the DWP Advocacy (and Watchdog) Committee, has provided a series of articles at CityWatchLA on the report.

The gist of the report is the DWP lacks a coherent long-term plan to meet artificial green energy targets that are immensely costly and are using the Energy Cost Adjustment Factor to hide the real costs to the public.

The report says DWP is desperate for more money immediately, mainly to avoid embarrassing the mayor for failing to meet the 20 percent renewable goal he set to make himself look good politically. To do that, the DWP has incurred huge costs paying premium prices to buy wind and solar on the open market wherever it can.

The 40 percent goal the mayor set for 2020 is even more costly and unrealistic.

LADWP does not currently have a plan to go beyond this 20% level," the report says.
"However, using a project build plan based on a budget issued by the Department in May 2009, the cost of reaching a 25% level was estimated at an additional $124 million per year, or 0.5 cents/kWh in rates. This would have an additional $2.50 impact on the average residential customer bill. Moving from 25% to 40% introduces even more uncertainty. Extrapolating these cost impacts to the 40% RPS level, PA has estimated a potential additional cost impact of $400 million per year."

The costs just keep piling up and show why all the mayor is talking about now is the next 12 months. In fact, it is a certainty that rates will be doubling and tripling and DWP salaries will keep on soaring.

And you won't have a clue about who's paying and who's profiteering unless there are dramatic changes in the way DWP is run.

That means a complete overhaul of management, rate structures and policies.

What the mayor is proposing is a continuation of failure and deceit. That's why I say bullshit to his plan. What do you say? What do you think the DWP Commission and the City Council will say?



 

For the past two years, I have been documenting from every direction that Los Angeles is "Crossing of the Rubicon," its point of no return at which we have become an old dying city divided between the rich and the poor with a diminishing middle class.

I use the phrase crossing the Rubicon advisedly because it refers to Caesar's 49 BC crossing of the river on his way to conquering Rome and ending its democratic traditions. The writer-philosopher Cicero, a senator who fled Rome for his life, spoke truth to power as few have ever done.

"Freedom," he said, "is the participation in power... a possession of inestimable value."

In endless articles on my blog, at my citizen journalism/community networking site OurLA.org, on radio and TV and at many community meetings, I have tried to convey the vision I developed of our city as a newspaperman for 30 years in Los Angeles.

It is a struggle for democracy against a narrow network of powerbrokers and special interests that served themselves even as they sharply raises taxes, rates and fees, chased away good jobs and let the streets, sidewalks, water and power systems deteriorate.  

Along the way, they resisted every effort at reform, only embracing the most modest progressive changes in the face of the most overwhelming evidence of police brutality against the poor and minorities and the threat of secession by the San Fernando Valley, Hollywood and San Pedro.

What we learned from that secession debate is that the City of Los Angeles is a corporation under the law. It owns everything: Streets, lights, every part of the DWP, all the parks, libraries and city buildings.

The city is no more owned by the residents and businesses, the taxpayers, than the customers of General Motors or any other corporation is owned by its customers who supply the money that feeds their executives, staffs and shareholders.

A picture can say a lot and that's what we meant to do at OurLA.org to illustrate a story by writer Vic Rothman on how the decisions the mayor and City Council are dealing with the budget crisis. Their action are leaving the city in the same position as any homeowner burdened with debt who is seeing the mortgage under water and upside down. Go to OurLA.org to read this revealing analysis of how the city's budget crisis is being handled.

For LA, it's a Race to the Bottom.

The mayor cancelled his scheduled news conference where he was to announce electricity rate increases, saying the proposal needed to be reviewed. He plans to try again Monday. Here's what he might say if he wanted public support instead of the fight he faces:
 
Ladies and gentlemen of the press:

I had planned to meet with you on Friday to discuss my plan to raise electricity rates and how we will use your money to bring solar and wind power to our city to clean our air and bring good-paying green technology jobs to Los Angeles.

But I found out neither I nor my staff understood what we were talking about with regard to rates and that the DWP really didn't have a detailed and comprehensive plan to deliver on our environmental commitment.

I was angry about the misinformation we were putting out, angry at others and at myself. I had a tough time sleeping Friday night and decided to shed my bodyguards Saturday morning and look at our city through fresh eyes.

As I drove through neighborhood and after neighborhood, I saw groups of three and four men standing in front of gas stations and liquor stores and hardware stores hoping for a day's work as a laborer. I saw dozens of houses with signs saying "Foreclosure Auction" and a multitude of storefronts with "For Lease" signs.

From the Eastside to the Valley, to the Westside and South LA, the signs of hard times were visible everywhere.

I reflected on how easy it is to forget what's going on in the city you love when you live in a mansion and are surrounded all day by people looking after you, when so many of the people you engage are rich and influential.

Scenes of encounters I had in Washington last week on my lobbying trip for money for the subway-to-the sea project flashed across my mind, conversations with Senators and House members and their staffs that had little to do with the substance of our transportation plan and a lot to do with manipulating the levers of power for advantage.

It all seemed so empty and pointless, so disconnected from the reality of the lives of the people who live and work here or are looking for work. I thought how much easier it is to spin the truth than to engage it honestly and forthrightly.

When I got home, I canceled all my activities for the weekend and sat alone in the backyard listening to the sounds of the city, enjoying the beauty of a perfect sunny Southern California afternoon.

I thought about my childhood and how I had gotten to this place as your mayor and realized that somewhere along the way, my ideals had become distorted and confused.

"Oh my God," I thought, "it's all come to nothing. I've lost my way."

Today, I'm going to make a new beginning as your mayor. I have asked my staff to reach out to business, labor, Neighborhood Councils, environmentalists and many other sectors of our community, to people from every part of LA, to meet with me in small groups over the next two weeks to talk about how we face our problems together, how we put aside our differences, how we balance our private interests with the public interest so we can work together for the greater good of the city.

Out of these meetings, I will create a Mayoral Council of Advisers who will have full access to all the resources of City Hall and all departments. They will bring their intelligence, skill, expertise and their devotion to LA to helping create a new vision that unites us in our purpose and resolve.

Our problems are great, time is of the essence. We cannot go on as we have. We must change the way City Hall does business.

Toward that end, I signed an executive order for the City Planning Department to only approve new developments that have clear economic benefits to the city and enhance the quality of lives in our neighborhoods. This will require close coordination with the community and developers to find solutions that achieve these goals.

I also am directing the Department of Water and Power to come back within a week with a new power rate structure that will encourage conservation while we develop longer term strategies to replace fossil fuels with clean technologies that provide renewable energy. I want it be perfectly clear to everyone how these rates will work, who will pay and how much. Electricity rates need to go up sharply over time to encourage conservation, to achieve our environmental goals and to develop green jobs for the future.

The price point is critical to conservation as we have seen with our achievements at reducing our water usage and you have a right to expect value for your money and the goals are being met.

Later today, I will be meeting with the heads of all city unions to lay out the plain truth. We need them to reduce our payroll and benefits costs dramatically to preserve city services and bring our spending in line with our revenue.

To achieve this, taxpayers are going to have to meet them halfway.

We cannot mortgage our future through borrowing or simply sell our assets at a fire sale, laying off workers and cutting services that we all depend on.

A year ago, I talked about the need for shared sacrifice. Then, it was a slogan. Today, it is the operating policy of my administration. I am reducing my salary and staff by 25 percent immediately and calling on the City Council to do the same

These are only the first steps along the road to balancing the city budget, restoring confidence in our city government and making sure that the future of Los Angeles is even greater than its past.

To my fellow Angelenos, I want to say this: I am asking for a second chance from you. I need your help if we are to achieve great things for the city we love.

I'll take you questions now, if you have any.

DWP Report Calls for Massive Power Rate Hikes
Friday, 26 February 2010

The long-awaited consulting report on pass-through electricity charges was released Friday, calling for an immediate 800 percent increase in the energy cost adjustment factor and increases every quarter that will raise overall power rates by more than 20 percent within a year.
The massive increases are being sought as DWP officials face intense pressure to have a revenue stream to be able to close at least four deals to buy solar and wind energy to meet the stand-mandated goal of 20 percent renewable energy by the end of this calendar year.

BOARD OF WATER AND POWER COMMISSIONERS' MEETING OF TUESDAY, MARCH 2, 2010, CANCELLED

Los Angeles Electric Rate Linked to Solar Power

By JENNIFER STEINHAUER, New York Times

Published: March 10, 2010

Now, the Los Angeles Department of Water and Power, the largest municipal utility in the United States, is poised to pass a roughly 5 percent rate increase on electricity use.

The commission that governs the utility, which is losing about $6 million a week or an estimated $500 million by the end of the 2011 fiscal year,

This isn't just Chinatown, Jake, it's becoming like China itself.

There's no other way to see what the leftist mayor is doing in finding a roundabout way to pull his quotes from the Reason Foundation and embrace free enterprise capitalism.

No other way to understand what he is doing with the city's golf courses by setting them up as a semi-independent entity with its own enterprise fund and the goal to become profitable as in making money and being run as a business for profit and the benefit of its customers and employees.

Isn't that how the commies in China found a way around their doctrinaire past to become a global economic giant? That way they didn't have to admit communism had failed.

Showing his own political flexibility, Antonio Villaraigosa is using the same strategy to avoid admitting LA's experiment in municipal socialism is a dismal failure.

He is ready to turn over valuable assets like the Convention Center and the Pershing Square parking structure to private companies, undoubtedly friends and contributors, right when they are starting to turn a profit.

This didn't just happen overnight.

The mayor made such a mess of the city's finances with expanded social welfare programs, massive hiring, subsidized developments and sweetheart union contracts that the city seeing is running in the red and can't pay its bills.

So what else can he do but sell off assets and fire workers?

As luck would have it, there is something else he can do and he took the bait Monday by agreeing to keep the "for sale" sign off the city's nine golf courses and instead turn them into a business enterprise, the kind the makes money instead of losing it by being burdened with wasteful, and in to a great extent, fictitious costs.

So when his henchman, Chief of Staff Jeff Carr, hauled Recreation and Parks General Manager Jon Kirk Mukri on the carpet Monday the conversation took an unexpected turn. Instead of eliminating huge chunks of his staff, Mukri cut a deal to spin off the nine golf courses into a separate "enterprise fund" rather than seek bids from private companies to run the golf program as the county does profitably despite significantly lower fees than the city.

"Organized labor and organized golf have been working together on this for a long while," Craig Kessler, executive director of the Public Links Golf Association.

"The budget crisis is an opportunity for a team effort to make the golf enterprise fund succeed. We need to recognize the need for consensus, push for transparency and see what is working and not working."

There is no guarantee that the mayor or the rest of City Hall actually intends to do anything beyond getting the 165 golf jobs out of the general fund and into a special fund so that a similar numbers of jobs in the Parks Department is saved.

Power sharing is a more threatening concept to City Hall than capitalism is to the commies these days.

But there is real opportunity, as with Neighborhoods Councils and other agencies that are being gutted, for citizen activists, workers and bureaucrats to work collaboratively together and make city government work better at lower costs.

Like the Chinese, the mayor finds the idea of sharing sacrifice and costs more palatable than sharing power. But that's the heart of the question that ought to inspire those committed to specific areas of city government to work harder and work together for real change.

For years, golf enthusiasts and union leaders have been pushing a plan to run the network of city golf courses into a profit-making business instead of the loser it has become because it's saddled with millions of dollars in costs that have nothing to do with the facilities.

The city's budget crisis has created the opportunity to finally implement their proposal and preserve some youth and other programs and avoid closure of many parks because of layoffs.

The challenge is to demonstrate that the golf courses can be run in a business-like manner by scaling their real costs to revenue, reinvesting profits into improvements and even generate income for other parks programs.

That will take real participation from the Golf Advisory Council that too often have been ignored in the past and cooperation from the unions that too often have been inflexible in the past.

"The wolf is at the door. The status quo is not sustainable," said Kessler. "The Parks Department is a little bit of a fortress and that has to change."

Whether the mayor and meddling City Council will stand in the way of change, of power sharing, remains to be seen but this is one case where community activists and labor unions are on the same side and have worked together for several years to make it happen.

While much of what the city does fails because of poor political leadership, bad management and work rules that encourage inefficiency, there are examples like the General Services printing shop as fully competitive with private companies on price and quality.

The golf program is not in that category.

The city's response to the recession-caused decline in the number of rounds played is to sharply raise green fees under the same doctrine of revenue neutrality the mayor has used in running the Department of Water and Power. The less we use of water or power in the name of conservation the higher the rates go. The higher the salaries go the higher the rates go.

Such policies go a long to way towards explaining why the golf courses are in worse condition, why the water and power systems are falling apart, why the streets and sidewalks are crumbling and just about everything provided by the city is getting worse, and the worst is yet to come.

Neighborhood Councils, environmentalists, the disabled and many other segments of the community have tried to step forward as full participants in running the city.

But like the unions who have been promised a full partnership, they mostly get lip service instead of respect.

It would be ironic if it was golfers who teed up the model for a new Los Angeles.

Lights. Camera. Action. Bullshit!

No sooner have our city employees cleared the champagne glasses at Getty House from Antonio's pre-Oscar party last week, or read of his recent lobbying exploits in far-away Washington (I guess they turned off his phone), then we learn this morning that he's clamping down on spending -- by everyone else.

"Los Angeles Mayor Antonio Villaraigosa sent a letter to city departments Wednesday demanding a freeze on much of their spending, from the purchase of new furniture to the use of food and beverages at city events," the Dog Trainer reported.

That sound you hear is every dog in the neighborhood howling with laughter.

We're living in a comedy that would probably earn an Oscar -- if it weren't so tragic.

The Trainer's reporter David Zahniser, as always, has at least some of the story:

"With the city facing a $484-million shortfall in the fiscal year that starts July 1, Villaraigosa also instructed several departments to halt negotiations for leased office space and barred any efforts to remodel city offices."

DZ, as he is known around City Hall, which is the opposite of ZD, which is short for my pal Zuma Dogg  added the memo does not apply to several city departments, including the Department of Water and Power, the Port of Los Angeles, Los Angeles World Airports and two agencies that oversee pension funds for retired and civilian city workers.

I guess those guys, who have huge fat-filled budgets, can buy food and beverages, purchase furniture, rent space and, well, party, as Prince (a popular dog name) sung, "like it's 1999," which really was a good year.

Problem is it ain't 1999, which is probably when Dick Riordan should have started working on this budget mess.

Woof! 

If you thought the massive electricity rate hike about to be rubber-stamped next week by the DWP Commission is bad news, think again.

There is even worse news today in the New York Times: The DWP "is losing about $6 million a week or an estimated $500 million by the end of the 2011 fiscal year."

Who knew? The DWP losing money? How is that possible?

Of course, it isn't, The DWP just sent $147 million in "surplus" power revenue to the city general fund, part of its 8 percent annual revenue donation that comes on top of the 10 percent electricity tax. It just gave checks for 3.25 percent of their salaries to its 8,000 employees with some getting back pay raises for two years of up to nearly 6 percent and granted raises of up to 4 percent for each of the next four years.

But Jennifer Steinhauer -- the NYT's Los Angeles Bureau chief who's heading to Washington to cover Congress -- knows all about the DWP losing money along with other facts nobody in this left coast town has heard.

Nobody at least except Chief Deputy Mayor Jay Carson, who appears to the only source for Steinhauer's exclusive report under the headline "Los Angeles Electric Rate Linked to Solar Power."

Undoubtedly, Steinhauer and Carson crossed paths when she was covering the 2008 presidential race and he was Hillary Clinton's spokesman so his word is as good as gold.

She reports that the DWP "is poised to pass a roughly 5 percent rate increase on electricity use...(the DWP Commission) is expected to vote next week to increase by seven-tenths of 1 cent the current user rate of 12 cents per kilowatt hour."

That doesn't sound so bad. But then it isn't what the DWP is seeking unless Carson has shared with her insider information that none of us know. The 5 percent rate hike hardly would begin to cover the DWP supposed deficit and the provide for "renewable energy purchases and programs, including one that would repay people or businesses that use solar panels to contribute to the power grid."

To Steinhauer, the rate hike "is equivalent to a carbon tax because all consumers will see rates fall as the city becomes less reliant on coal-powered energy."

I get it now: Rate hikes mean lower rates. No wonder she is best known for her obsession with rattlesnakes that are plaguing all of LA and even brings them into this story's opening with the observation that in LA "environmentalists outnumber rattlesnakes in many parts of the sprawling city."

In contrast to Steinhauer's report, the cost of going green runs into the billions of dollars and a 5 percent rate hike doesn't come close to paying the bill. The DWP's own consultant's report calls for a rate hike of 2.7 cents per kilowatt hour -- four times what Steinhauer reports -- and Carson's boss wants an additional surcharge as well with even higher rates coming year after year..

In Steinhauer's math, the modest 5 percent rate hike will somehow "shore up the (DWP) budget shortfall, in the hope of protecting the utility's bond rating ... (and) go to renewable energy sources, like wind farms, and to help subsidize a program that would essentially repay solar-panel users for feeding energy into the power grid."

Even beyond all those costs to be covered by the rate hike, "Mayor Antonio Villaraigosa and his staff are billing the increase as a move that will bring jobs to the city. Los Angeles has never embraced the idea of solar energy, largely because of the high cost of the programs."

"There are so few solar panel manufacturing companies in the city, mayoral aides have had to scramble to find an appropriate place to announce the new plan later this week."

"A well-crafted carbon surcharge achieves two goals," Los Angeles's chief deputy mayor, Jay Carson, said. "The first is a drastic reduction in fossil fuel usage for energy, but the second, and more important for Los Angeles, is the creation of thousands of green-collar jobs."

Finally, the dashing Jay Carson appears after having so successfully spun a New York Times star reporter who clearly made no effort to check the "facts" she was being spoon-fed.

The question arises then: What was Carson trying to achieve? A test drive of how the LA press corps and populace are going to be spun? Deluding Wall Street to somehow believe DWP actually has a solar plan so it will lend the utility money without lowering its bond rating?

I don't know. I just thought you ought to know how the spinmeisters like Carson operate and how even star reporters like Steinhauer and newspapers like the NYT can't be trusted any more than your ordinary citizen blogger without checking the facts yourself.

You can do that by going to OurLA.org, which broke the rate hike plan story on Feb. 26, and read the DWP report on rate hikes prepared by PA Consulting.

Take a deep breath, Jan, and sock it to me -- you're the LA Legislator of the Year. Here's the announcement from BreatheLA:

Next Month: Breath of Life Awards

BREATHE LA presents the 2010 Breath of Life Awards to be held at the Petersen Automotive Museum on Thursday, April 8, 2010.  The awards recognize honorees who strive to promote clean air and healthy lungs in Los Angeles County each and every day.     WHO:            Mr. Masa Tanaka, CEO of Union Bank: Breath of Life Award                       Los Angeles City Councilwoman Jan Perry: Legislator of the Year Award                      Los Angeles Unified School District: Community Impact Award                      BMW Group: Innovation Award               WHEN:          April 8, 2010                      6:00pm -10:00pm                                     WHERE:        Petersen Automotive Museum                     6060 Wilshire Boulevard                     Los Angeles, CA 90036   TICKETS:     Cost is $75 per individual ticket. Sponsorships are also available. An estimated 150 - 200 dignitaries, community leaders and clean technology experts will gather for an inspirational evening to benefit the most vulnerable in our community through BREATHE LA's high quality programs and services.  The event includes private hosted museum tours as well as special viewings of new vehicles and green energy products.  There will also be a silent auction, a dinner and awards reception, and live jazz music.

Imagine the scenes at the Pacific Dining Car and in the back rooms of City Hall in the next few days as the nation's highest paid municipal officials and their armies of staffers, each with their taxpayer-supplied Priuses, back slap and praise each other for all their hard work above and beyond the call of duty.

Job well done.

High fives all around. They have been in combat these last few weeks. They have seen the enemy and it is us, the taxpayers, the businesses, the people. And they have survived through daily sessions, and the pitfalls of posturing and hypocrisy as if they had braved incoming shells and snipers and improvised explosive devices.

No, it hasn't been easy but they have gotten through and have lived to destroy again another day.

You can understand their need to fly off to the nation's capital to wine and dine with the men and women at the pinnacle of the political machinery of public deceit, or to spend a few days on the beaches of Maui far from the maddening crowd of ordinary folks begging for crumbs from their table of power.

Such is the burdens of self-importance in an age of transformation when the rules no longer apply, when the center of inertia no longer holds, when the abnormal has become the norm.

These are the people we have anointed to lead us through these times of troubles and they are delighted to have danced and preened, to have shown their heartfelt concerns, to have made it through pretending to have faced the demon of their massive deficits without having done anything at all.

And they are still in place in their high stations to enjoy the privileges and perks they have come to expect as a birthright for their virtue and goodness.

Oh, what a happy day it is, what a well deserved vacation they have coming next week for their public service.

They have confused and fragmented the populace and shown their superiority and put the  grumbling rabble in their place, worried about themselves and their parks and libraries and their petty concerns as they try to preserve the quality of their little lives.

It was brilliant and worth all the sweat of donning their fancy clothes every day though they will have to call in chits from their wealthy friends to cover the inflated dry cleaning bills they have from having to show up at work every day.

Of course, they never all show up at the same time.

That's one of the wonders of the Council. They arrange their schedules so that they have just enough members -- a dirty dozen -- to enact everything they and their puppet masters want on unanimous votes on first reading.