There’s a fundamental difference between a publicly-owned utility like Southern California Edison and a municipally-owned utility like the LA Department of Water and Power.
You can guess which utility is more open about what’s doing, more accountable to the public and, in the case of SCE and DWP, more aggressive about going green.
By law, SCE needs to be pretty transparent so that its shareholders and the public through its regulation by the Public Utilities Commission know what’s going on. Its management can be held accountable by shareholders and its board of directors, if not always the public in general.
By practice, the DWP is not only secretive but does its very best to obscure what it’s really up to and its management is far more likely to be called on the carpet by IBEW union boss Brian D’Arcy than any mayor or the City Council.
Perhaps that’s why SCE is approaching 20 percent of its energy from renewables and DWP about half that percentage, why DWP depends on dirty coal for 40 percent of its electricity and SCE about half that.
Certainly, it’s why a 75-word press release was issued Tuesday by Tempe, Ariz.-based First Solar announcing DWP had contracted to build a “large-scale solar power project in Imperial County…(that) will have a generation capacity of 55 megawatts.”
And why a few hours later, SCE itself put out a press release announcing First Solar will build two large-scale solar power projects in Riverside and San Bernardino counties in Southern California…among the largest of their kind…(with) a generation capacity of 550 megawatts of photovoltaic solar electricity, enough to provide power to approximately 170,000 homes.”
SCE notes it “is the nation’s leading purchaser of renewable energy and, in 2008, delivered 12.6 billion kilowatt-hours of energy to its customers from renewable resources – about 16 percent of its total energy portfolio. In addition, the utility delivered more than 65 percent of the solar energy produced in the United States for its customers in 2008.”
The best boast DWP can make is that it generates more pollution from coal-generating power plants than any other municipal utility in America.
Not to worry, General Manager David Nahai has a plan to catch up. But it’s a secret so he can’t tell you about it. The culture of the DWP and Nahai’s own mindset require secrecy above all else so that only insiders who might benefit personally or politically are allowed access.
All you the public need to know is that it’s going to cost you a ton of money.
The DWP, for instance, doesn’t mention anything about the First Solar deal on its website or much else of use to anyone who wants to understand what it’s doing. The last press release posted came three weeks ago and declared — prematurely, if not falsely — that its new water shortage measures “successfully” reduced consumption.
The website Greentech Media in an article by Ucilia Wang at least supplies some sense of the economic game DWP is playing in signing a power purchase agreement, quoting Mark Bachman, an equity analyst at
Pacific Crest, as saying First Solar “is likely to sell the power plant
to investors before project completion. But the city has an option to
buy the power plant after it’s put in service for seven years.”
What we’re really seeing is Measure B all over again. Except they not only don’t want a public debate about what they’re doing, they don’t want another public vote because they know it would be rejected soundly.
But it’s the same blank check for billions of dollars without planning or analysis.
And it has got the same No. 1 goal as Measure B: Protecting IBEW jobs and its industry-leading wage structure, which by the way is set to rise 3.25 percent higher on Oct. 1 thanks to the sweetheart contract the mayor and City Council awarded four years ago with provision for wage hikes as high as 6 percent.
In general terms, the DWP needs to reduce its huge load of carbon pollution and the easiest way to do that is to upgrade coal plants to natural gas, which has the key benefit of preserving IBEW jobs. But that isn’t renewable energy, just less polluting.
So wind and solar come into play to meet the 20 percent renewable energy quota by next year no matter what they cost.
It doesn’t matter what they cost as far as the DWP is concerned. They have won DWP Commission approval to remove the 4 percent cap on rate hikes for renewable energy, the Energy Cost Adjustment Factor or ECAF.
The ECAF allows for rate hikes to be passed through to ratepayers without going before the City Council or facing meaningful debate or cost analysis.
DWP expects rates to only increase 10 percent a year but they could go far higher since utility officials in their desperation to catch up with other utilities paying above market prices for renewable energy. And that doesn’t even taken into consideration rate increases needed to cover the under-funde DWP pension which faces a $450 million annual shortfall — a fact that officials have done their best to hide from the public.
The council has taken jurisdiction over lifting the cap on ECAF rate increases because it’s already a hot-button issue for the citizen watchdogs on the DWP Committee that led the successful fight against Measure B, the kind of issue that is likely to explode in the faces of the politicians when people see their water and power bills soaring higher than their mortgages.
A lot of effort is being put into creating a Ratepayer Advocate office for the DWP but the real solution is to put someone in charge who actually knows how to run a utility, has the short- and long-term interests of the ratepayers as the primary mission and is backed up by city officials who have mustered the political will to bring the IBEW into line with the city’s financial realities.
Anything less will lead to a public revolt against policies that cost too much and fail to achieve the clean environmental goals that are widely desired.