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Measure B By Any Other Name Is Still a Blank Check for Defrauding the Public

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.
Thumbnail image for solarb.jpg
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.”
coalplant.jpg
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.


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27 Responses to Measure B By Any Other Name Is Still a Blank Check for Defrauding the Public

  1. Ken Kramer says:

    “There’s a fundamental difference between a publicly-owned utility like Southern California Edison, part of the Sempra empire, and a municipally-owned utility like the LA Department of Water and Power.”
    1. So Cal Edison is an investor-owned utility regulated by the CA Public Utilities Commission (CPUC).
    2. So Cal Edison is not part of Sempra Energy, it is part of Edison International:
    Sempra: http://www.sempra.com/companies/companies.htm
    SCE: http://www.sce.com/AboutSCE/
    3. So Cal Edison has their own Measure B with a project that has them own solar panels on top of buildings and limits the work to IBEW Local 47.

  2. Anonymous says:

    Come on Ron,don`t be so naive, you are getting soft in your old age. IBEW will NEVER let City Hall off the yoke of total and unconditional control. However, public revolt is around the corner.Sooner than you think.

  3. Anonymous says:

    There’s a fundamental difference between a publicly-owned utility like Southern California Edison, part of the Sempra empire (you mean Edison International pal), and a municipally-owned utility like the LA Department of Water and Power.”
    1. Investor owned utitlities must create a “profit” to redistribute to its stock holders. Municipallly-owned utilities like the LA DWP do not. Hence Los Angeles residents pay 30-40% less on their DWP bill then those cities with SoCal Edison.
    2. Investor owned utilities were more easily manipulated by the energy de-regulation and SoCal Edison’s customers had blackouts which hurt poorer and more senior customers. Municipally-owned utilities owned their own power and actually had a surplus of energy during the rolling blackouts – like the Los Angeles DWP.
    3. The Los Angeles DWP is ranked #2 in the West by JD Power and Associates as most customer friendly, Socal Edison isn’t even ranked. Wa-Waa.
    Now Ron, I think your readers are once again seeing what you mastered during your right-wing reign of terror at the Daily News. Why let facts ruin a good press story.

  4. Anonymous says:

    The LA DWP can lower and undercharge it’s electricity rates since it overcompensates and then overcharges it’s water rates. It’s a crooked enterprise run by criminally overpaid bosses and employees. A mafia at best is it’s appropriate description since it doles out contracts to favored persons without regard to merit, ie. IBEW.
    Why the local media doesn’t go wild looking over the LA DWP books can only be explained by collusion and “cooked books”. The local media are in bed with the DWP robbery process. If they weren’t then public disclosure laws would be the means for the media to walk in at any time and request to “see the books”, AND THEY’D DO IT. But for the most part, they don’t.

  5. Anonymous says:

    The City of L.A. needs to file for bankruptcy so it can renegotiate all those mindless union contracts.

  6. Anonymous says:

    To 1:25 AM. You either drink or make the IBEW Kool-Aid. DWP’s “profit” is distributed to the City in the form of an annual transfer in the hundreds of millions of dollars, and to the IBEW employees in terms of wages and benefits that are 30 percent or more above like work in the City. Even line mechanics total compensation exceeds that of SCE. And that info, my friend, is from the IBEW itself. When DWP has true, open transparency to the public then you won’t need the likes of citizen activists crying out for it. Now, what did you say your job title was?

  7. Anonymous says:

    LADWP charges lower rates because it has cheap coal instead of expensive renewable energy and has not maintained and invested in its infrastructure. It also has underfunded its pension and post-retirement health plan liability. If you account for all this, rates will increase to a point surpassing Edison. The free lunch is over for the customers. The big question, when will it be over for the overpaid employees?

  8. Regardless of the differences between public vs municipal ownership, the fact remains that DWP has ignored its infrastructure and transferred many millions of dollars to the city’s general fund instead of investing in improvements.
    To make matters worse, the IBEW owns the City Controller, the very person with the responsibility to audit the utility.
    A charter amendment is needed to have the City Controller possess an active CPA license and not have served as a legislator for at least several years prior.

  9. Anonymous says:

    I wonder why Ron Kaye hasn’t said a peep about the school choice resolution coming up for a vote this Tuesday?
    I mean — I know you support it Ron. Could you be silent because GASP the Mayor supports it too?
    Hypocritical, small and ever such a wimp.

  10. Anonymous says:

    Who’s against a National ID, Real ID, NAIS? Who would have guessed that the ACLU is against this? Who’da thunk Councilperson Jan Perry is for it, no doubt.
    http://www.aclu.org/pizza/images/screen.swf

  11. Anonymous says:

    Everyone should know by now, that the onslaught from government is endless. If they lose on one, they will find another way to win. Does the public have the time or the money to withstand it. Eventually, most give up and let them do whatever. How many people are willing to be tenacious enough to fight them. Don’t expect Ron to do it all.

  12. Jimmy James says:

    Paul Hatfield: Regarding your Charter Amendment idea regarding the Controller’s office, do remember that most of us liked Laura Chick for her study and criticism of DWP and her personally opposing Measure B. But Chick wouldn’t have qualified for the office on at least one of the grounds-she had just served as City Councilwoman. And for the second proposal for qualification, did she have a CPA?
    On another note, I would support cutting the City Council’s salary in half, taking their salary increase off the automatic indexing to judge’s salaries, and returning the term limit to 2 years.

  13. Sandy Sand says:

    This is a re”volt”in’ development, indeed, but not unexpected.
    DWP has carte blanche to raise our rates, and you say a re’volt’ by us is coming…but how?
    Change the laws regarding DWP? Ain’t gonna happen and it would take too long.
    We can’t boycott; DWP is the only game in town.
    Everyone refuse to pay their DWP bill? We couldn’t get 25 percent to do that; they’d turn off the power, then charge us even more to flip a switch and turn it back on.
    We can’t afford to spend thousands to solar panel our home and be our own producers.
    All that’s left is to sic Bruno on them.

  14. Anonymous says:

    Sandy,yes,revolt is coming.Stay tuned.

  15. Sandy says:

    Can’t wait to see how it plays out, and we’re backed up by a “real” Plan B…just in case.

  16. Jimmy James says:

    Paul Hatfield: Regarding your Charter Amendment idea regarding the Controller’s office, do remember that most of us liked Laura Chick for her study and criticism of DWP and her personally opposing Measure B. But Chick wouldn’t have qualified for the office on at least one of the grounds-she had just served as City Councilwoman. And for the second proposal for qualification, did she have a CPA?
    On another note, I would support cutting the City Council’s salary in half, taking their salary increase off the automatic indexing to judge’s salaries, and returning the term limit to 2 years.

  17. Anonymous says:

    so much misinformation on this stupid blog
    Coal powers 50% of the nation. no matter what Antonio or Obama says, words like “green” and “renewable” are just catch phrases to look progressive. Coal is not going away any time soon. The wind doesn’t always blow, the sun doesn’t always shine, but coal will always burn
    If you look at SCE’s service area compared to DWP, you’ll see it’s misleading to even compare generation capacities. Check it out. http://www.sce.com/AboutSCE/CompanyOverview/territorymap.htm. DWP runs that little white spot south between LA County and the ocean. With that much service are and higher rates, SCE is always going to have a larger renewable energy output because they have the ability to undertake bigger and more progressive projects like renewables. SCE also runs San Onofre. Can you even imagine DWP building a nuclear power plant with ratepayer money? Never gonna happen.
    DWP salaries are higher compared to the rest of the city, but NEED to be to be competitive with SCE, SDG&E, and municipal utilities like Anaheim and Glendale. Because if a power engineer is job hunting, he’s not gonna apply at the Department of Sanitation, he’s gonna apply at Edison
    Most DWP employees go career. If you post salaries at a time where a disproportionate chunk of the workforce is nearing retirement, you’re posting salaries that have been reached after 25-30 years. You really think people about to retire are going to have entry-level salaries? Obviously they’re gonna be higher. Nice timing
    You honestly think a private corporation is under more pressure than a public department to be transparent? The Nahai’s at Edison don’t get their ass ripped daily

  18. Anonymous says:

    WHY IS bratton really leaving?

  19. Anonymous says:

    Why is BRATTON REALLY LEAVING?

  20. anonymous says:

    So, this ECAF is a “legal” way of doing what would otherwise be illegal? Could someone explain? It just doesn’t seem right to increase rates without public input (not that it would matter).
    We all knew that our(gag)elected officials would find “legal” ways to go around the democratic process when Measure B was defeated.
    Look at what they are doing to larger lot owners with the new tiered water rate. Those folks with larger lots and more than an acre are toast. They’re making a killing off this.

  21. Anonymous says:

    What we really need is part-time government. Pay them 50% of their outrageous salaries and if
    they quit, so much the better.
    Watch for a petition just starting to change
    California’s legislature (a source of many of our Los Angeles problems including disenfranchising the Valley’s right to secede)
    that will convert (if supported) into a part-time entity. They have so much time on their
    hands now that they are interfering with our
    personal rights.
    The government unions are an atrocity – one must join if one is accepted for employment.
    They are a shadow government. And somehow, someday they will be disenfranchised and illegal.
    How? When people refuse to join them. I know of
    people who changed their entire careers by refusing to join unions. They refused to pay
    “bosses” to threaten them every day of their
    lives. And they have never regretted their decisiions. Teddy Howell

  22. Anonymous says:

    Why is BRATTON REALLY LEAVING?
    He sees the writing on the wall. He’s not dumb. He’s going while the going’s good, the opportunity in New York. If the opportunity in London came to fruition he would have grabbed it.
    Watch for the LA RAZA Mayor Villaraigosa replace him with a pro-LA RAZA. To further Mexicanize Los Angeles is Villaraigosa’s true aim.

  23. Anonymous says:

    @August 24, 2009 4:05 PM, who say:
    Most DWP employees go career. If you post salaries at a time where a disproportionate chunk of the workforce is nearing retirement, you’re posting salaries that have been reached after 25-30 years. You really think people about to retire are going to have entry-level salaries? Obviously they’re gonna be higher. Nice timing
    You clown. NO FOR PROFIT COMPANY KEEPS “MOST OF THIER EMPLOYEES” AT NEAR RETIREMENT SALARIES. THAT’S GROSSLY IRRESPONSIBLE. IN THE REAL WORLD TODAY, THERE ARE NO LIFETIME JOBS. IT’S NOT COST EFFECT OR EFFICIENT.

  24. Anonymous says:

    You clown. NO FOR PROFIT COMPANY KEEPS “MOST OF THIER EMPLOYEES” AT NEAR RETIREMENT SALARIES. THAT’S GROSSLY IRRESPONSIBLE. IN THE REAL WORLD TODAY, THERE ARE NO LIFETIME JOBS. IT’S NOT COST EFFECT OR EFFICIENT.
    Good one jackass
    First DWP is not a private company, so stop treating it like it is. And as that one guy pointed out, if it was, LA would have been screwed during deregulation. The fact that it’s a government department and offers pensions based on length of service, and step increases due to the union, is what keeps people on board, which keeps DWP from constantly hiring like Edison or SDG&E does. Which goes back to my 2 points
    1. DWP salaries are competitive with SCE salaries up until upper management, where SCE salaries start to break away considerably. On top of that, tbere are cases where comparable positions at other utilies make more money. Burbank load dispatchers for example make more than DWP load dispatchers. Meanwhile Burbank load dispatchers are responsible for about 5 stations. DWP load dispatchers are responsible for several hundred
    2. If you post salaries where a disproportionate amount of the workforce is nearing retirement and has been there for around 30 years, and use it to argue they’re overpaid (implying DWP’s hiring and retentino patterns are identical to private industry) you’re being misleading
    I’m all in agreement that this city needs an overhaul and DWP has problems that need to be fixed. But if you’re selectively leaving out facts, making BS comparisons, and in some cases straight out lying just to make an argument, you’re not helping anybody

  25. Anonymous says:

    DWP employees are grossly overpaid. They have no special skills that would justify this kind of pay. That is why they make bulk of the over $100,000 pension club. Whenever pension reform comes, no one should get more than $150,000 in pension benefits. The current formula based on number of years served has to change. When it does, you will see them start leaving after 30 years, instead of hanging around doing next to nothing. There are too many chiefs in all city departments who do very little work.

  26. Anonymous says:

    DWP is a poorly managed, over paid, corrupt, “mafiosa club” of buddy boy, butt kissing employees keeping their jobs by keeping their mouths shut.
    You say, “making BS comparisons, and in some cases straight out lying just to make an argument, you’re not helping anybody.” YOU PRESENT THE LIES AND THE OBSTRUCTISM.

  27. Anonymous says:

    They have no special skills that would justify this kind of pay.
    Yeah, so I guess employees at Edison, PG&E and municipal utilities that are paid similarly to design and install pieces of equipment that could kill them if they make a mistake have no special skills either. I guess physicians have no special skills
    Whenever pension reform comes, no one should get more than $150,000 in pension benefits.
    This I agree with. You can drop that number even more and it would still be generous.
    When it does, you will see them start leaving after 30 years, instead of hanging around doing next to nothing.
    A few years back a large chunk of employees took the package and left when the department was threatened with layoffs. Very few people are actually hanging around just to increase their pension and out of these people, a large number do love their job and others are just waiting for the economy to recover
    And as far as doing nothing, DWP is one of the busier departments in the city. There are people out there working more than 12 hour days 6-7 days a week just to upgrade infrastructure. And yeah there are a chunk of people that don’t do anything but private industry is not immune to this
    YOU PRESENT THE LIES AND THE OBSTRUCTISM
    Address my arguments and prove it then. You’re like a 5 year old who thinks if he keeps repeating it over and over and believes hard enough, he can make it come true

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