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Drowning Under the Weight of DWP’s Troubles

Poor David Freeman, here he is rich enough to enjoy a luxurious retirement at the ripe old age of 83, and renowned enough to bask in the glow of his achievements.

Yet he’s taken on the dirtiest job in town as general manager of  the Department of Water and Power at a time when the nation’s largest municipal utility is under siege from all directions.

And he’s off to a terrible start that calls into question his ability to do the job even on the six-month interim basis he says he is committed to serve.

He stood up the Sherman Oaks Neighborhood Council for a scheduled appearance one night, perhaps because he couldn’t catch a ride since he doesn’t drive. Then, he got stood down by the City Council over proposed water rate increases and pressure for an independent Ratepayer Advocate’s Office.

It is only going to get worse.

DWP has suffered serious damage to its credibility due to its near
total lack of transparency, failure to develop a successful green
energy program and the flurry of water main blowouts and power outages
due to its failure to invest in upgrading its aging infrastructure.

management is in disarray from the confusion caused by an endless
series of leadership changes even as virtually every decision has
become politicized by the mayor’s ambition and union boss Brian
D’Arcy’s greed.

The department’s No. 2, the always controversial
COO Raman Raj, is pushing for appointment as acting interim general
manager on the assumption Freeman will be away often enough for him to
get the service credit he needs to spike his pension at a higher level.

There’s little time bombs like the contract coming before the Board of Commissioners to pay Conservation Strategy Group
$1 million to lobby in Sacramento against a measure to cap carbon
emissions — a policy effort that contradicts the mayor’s commitment to
green energy but is necessary because DWP is so heavily reliant on
dirty coal for electricity.

And big time bombs like the raises
D’Arcy is getting this month for the 95 percent of DWP staff and
managers he represents — raises that come in the face of deflation of
nearly 2 percent, the deferral of raises by other city workers and DWP
demands for rate increases.

The public is angry and the City
Council is worried. They stalled on water rate hikes Wednesday, they
back away from lifting the cap on renewable energy and fuel surcharges
last month and they are talking up the need for an Inspector General or
Ratepayer Advocate.

With his love of the good life, you have to
wonder what compels Freeman to take on this task. It does pay $6,300 a
week plus expenses which is helpful, to be sure, and it does give him
the chance to pontificate about his unrealized vision for an energy
future without nuclear, coal gas generated electricity.

things are going to get a lot worse and fast. And Freeman will soon be
wishing he wrote another book, a fantasy memoir perhaps, called “How I
Dreamed I Saved the World from Global Warming.”

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18 Responses to Drowning Under the Weight of DWP’s Troubles

  1. Anonymous says:

    Ron, please give Mr Freeman a chance. When he was GM at DWP they slashed payroll by reducing the employee levels from 11,000 to 7,000. It has creeped back up to about 8,600 workers.
    He can work with Darcy and wont be intimidated by him.
    If anyone can get the job done in that very political environment that is DWP, its David Freeman.

  2. sheila says:

    There would be no need to try to block caps on carbon emissions if the city would simply implement the AB 811 loans that were authorized by the state 16 months ago, which are ZERO risk, no cost to the City, and which would GREATLY DEMOCRATIZE the LA power grid by allowing real people like you and me to install efficiency upgrades and solar panels without any up-front costs, with the costs to be amortized (and offset by reduced energy bills) over 20 years.
    100% of the places that have implemented AB 811 loans have sold out immediately. As if we needed proof that people are STARVING to put solar on their roofs and also cut their electricity consumption. DUH!
    The second facet has to be a FAIR feed in tariff that compensates those of us who invest in clean solar and cut our own usage and thereby feed clean, cheap, democratic energy into the DWP grid. AB 920 will do nothing for any of us, least of all DWP customers, but as a municipal utility, DWP OWES US democratic, not oligarchic energy policy.
    At least their stupid, wasteful, expensive, and highly damaging Green Path is supposedly on hold, but unless they replace it with GOOD policy, they are just maintaining the toxic, monopolistic, disgusting status quo, which is not what LA wants or needs.
    This total failure is sitting entirely on Villaraigosa’s desk, because the solution is really simple, is FREE, is way way cleaner than remote industrial wind and solar, and is fair. Oh, and has been proven to work all over the world.
    WAKE UP LA! You have a perfect, shovel ready answer to property values, jobs, global warming, destructive land use, water waste, monopolistic profiteering, and dirty coal – you just need to insist that your reps give it to you.
    AB 811 loans and Feed in Tariffs at 50 cents for power above and beyond net metering that is fed into the grid. Let’s do this now.

  3. LA Moderator says:

    Yes Sheila, that’s exactly the type of solutions we need!
    Many NC’s who have banded together, for example via the LANCC DWP Committee, and are voicing their concerns and suggestions as to how DWP can revamp and redeem their Solar Plan. If you’re not already on board, I’d encourage you to check it out.
    But it may be good to expand this directly to the grass roots level. The same kind of coalition that embraced SLAP, fiscal conservatives, and ecologically motivated activists; all who shared a desire to see DWP retrofitted in a fair and transparent manner.
    Playfully, I’d coin a point of convergence as a “Green Tea Party”…but it’s early yet.
    Still the point is, some of the things we can be doing don’t have wait for the DWP.

  4. Anonymous says:

    I would like to know more about this AB811 plan.
    I tried some months ago by calling an installer but was told it would $25K – of course that is
    a ridiculous figure. He must not have wanted the job.

  5. Anonymous says:

    “big time bombs like the raises D’Arcy is getting this month for the 95 percent of DWP staff and managers he represents — raises that come in the face of deflation of nearly 2 percent, the deferral of raises by other city workers and DWP demands for rate increases.”
    Your Oct 2 blog post has a scanned document that shows D’Arcy offered to defer the October COLA in exchange for a contract extension and a lump sum. Unless something new has happened that noone except you knows about, the council is backing this so there will be no raise.

  6. Robert says:

    Poor cops get thrown under the bus by their political police union. The cops get no increase, no overtime and who knows what else is getting cut but AGAIN DWP is the bomb everyone is afraid of. Who can get a them audited? How can the people just watch as Nahai gets all that money and not do anything. I say its time for a PEOPLE REVOLT ON CITY HALL.

  7. sheila says:

    I definitely agree that the grass roots needs to rise up and make their demands known asap. I am not an organizer, more of an analyzer, so I will leave that to the pros, like you Ron!
    To Anonymous – AB 811 was state legislation passed about 16 months ago which permits all cities and counties in CA to offer loans to their residents so the residents can retrofit for efficiency gain (HVAC, insulation, etc.) and/or for solar panels (water or PV). The city/county is allowed to use the property tax system to (a) put a lien on the property to ensure 100% repayment and (b) to amortize the repayment of the loans across 20 years, with the repayments made as an additional assessment on your property tax (not everyones, just yours).
    So, there is no risk to the city/county. The property owner will install whatever makes sense financially (if you can offset/earn $100/month in electric bills, then whatever you finance should not cost more than about $1200/year to repay, which simplified is roughly $24K over the 20 years), and the loan stays with the property, not the borrower, so you do not have to recapture the full cost of the improvement in a sale.
    So, since it’s no risk to lender or borrower, and would solve a LOT of the clean energy needs of our city, county and state, why won’t LA (city or county) fund the loans? They can do bond issues or use pension funds (no risk, remember) or partner with private lenders – it’s really GREAT for us, great for the city, great for the planet, yet here we are 16 months later and nothing?
    It smacks of monopolistic, greedy calculations to me.
    $25K is not a ridiculous number if you are getting enough power to offset at least $110/month, which if you have a sunny southern exposure, is pretty certain. There are lots of installers out there who can run the numbers for you. If, like many of us, your power bill is small but your roof is large and sunny, then you should be PAID for feeding excess power into the grid at a rate where you can offset the cost of your system. This is how EVERY successful solar rooftop program works in the world – except ours (which is by all measures a failure).
    it’s SO much cheaper for ratepayer generators and non-generating ratepayers than remote monopolistic boondoggles and massive transmission lines, not to mention WAY better for the planet. total win, except it means that DWP is reduced to a load-balancing distributor, not a monopolistic profit center that rips off ratepayers while killing the ecosystem. apparently, that doesn’t appeal to them, but since they work for us, why are they calling the shots?
    AB 811 loans and feed in tariffs are what we need NOW.

  8. Anonymous says:

    To: Anonymous on October 15, 2009 1:30 PM
    Get real. Freeman was hand-in-hand with the Proponents of Measure B.
    His attitude continued when the Mayor was moving forward with a defacto Measure B and Freeman called David Nahai a “Ratepayer’s advocate.”
    This is the ultimate of smoke and mirrors.
    You need to understand that several generations of ratepayers/taxpayers have bought and paid for DWP even with all of its warts. And when Freeman was the head of DWP, he was rushing to sell off much of DWP’s assets at fraction of its book value.

  9. Anonymous says:

    7:43, which assets was Freeman trying to sell?

  10. Anonymous says:

    October 15, 2009 7:56 PM:
    Generation assets. Freeman originally went along with Riordan and wanted to sell DWP’s Generation assets as part of deregulation. He even admitted that. The City Charter and other “cumbersome” rules slowed that process down until CA hit the point of blackouts and brownouts with the whole Enron scandle. But now Freeman takes credit for saving LA by keeping DWP’s Generation.
    He also started selling off DWP land. Maybe that was a good business decision, but it should have been reviewed by the City Council (and now that we have them, Neighborhood Councils, Ratepayer’s Advocates, Watch dogs, etc).

  11. Anonymous says:

    To: sheila on October 15, 2009 5:19 PM
    In terms of DWP being a profit center, monopolistic – that’s partially true, but more applicable to Southern Cal Edison (SCE), PG&E, and SDG&E/Sempra. All of these are publicly traded for profit utilities regulated by the PUC.
    DWP is actually a non-profit municipal utility (like Burbank, Glendale, and Pasadena), a proprietary Department of the City of Los Angeles. However the City officials that were voted into office chose to use DWP by transferring funds to the City and using DWP funds/services for non-core work to benefit pet projects.
    Some argue that the transfer of funds is like a dividend to the “owners,” i.e. the ratepayers. But that’s a whole discussion by itself.
    Finally, having decentralized solar power is a great idea, however there are costs associated with having back-up or stand-by power if you remain on the grid. Some chose to use batteries and other methods such as backup generators, however in a practical sense, public and private commercial buildings, streets, etc will still need have their electricity delivered through centralized generation (at least for an interim period of time).

  12. Anonymous says:

    Freeman not a bad guy
    I think Freeman makes a lot of sense to me. I like what he had to say on this program. I can’t find anything wrong with what he said – in fact I agree with him.

  13. Anonymous says:

    Thank you for your information about AB811.
    My last bill (two months) from 7/23 to 9/22/09
    is for 778KWH and I pay $1.50 per day for electricty. My bill for energy was 96.14 with the rate increase from ladwp.
    My roof is south facing with no shade from trees except in late afternoon from the neighbor’s tree on the west side.
    I don’t know. I think I shall be paying more
    in order to help the environment. But someone else will probably find your information very useful. Thank you for sharing.

  14. LA Moderator says:

    With regards again to Sheila’s helpful dissemination of AB 811…that’s the kind of communication, based on information that leads to organization! (Not sure if analyzation is a word…)
    But as I was going through my NC Inbox, I found another example where the DMV rank and file, with the GM’s reeling from karma, have to rely on public imput, and actually make those little changes so badly needed.
    We here near Griffith Park have been battling the annual man-made traffic jam, in December, for the DWP Holiday Light Festival. Some progress has been made to make this a non-vehicle event, but when the DWP added a few nights without hundreds of idling engines, they then added busses to shuttle from the parking lots.
    It’s bad enough that they’re delaying the multi-year River Supply Project currently tearing up the park by expensively pulling out their equiptment for a hiatus during the show.
    But after many letters and stakeholder meetings, they’ve added more nights without vehicles, and worked a deal with the Zoo for parking, eliminating the need for shuttles!
    Deep down, I beleive that there are plenty of people of good conscience in city departments. And even those juvenile technocrats can be shamed into behaving if you’re just a little firm with them.
    Point is, while the good apples see the rotten ones brought to task, they’ll feel better about bobbing to the top.

  15. Anonymous says:

    “By Anonymous on October 15, 2009 1:30 PM
    Ron, please give Mr Freeman a chance. When he was GM at DWP they slashed payroll by reducing the employee levels from 11,000 to 7,000. It has creeped back up to about 8,600 workers.
    He can work with Darcy and wont be intimidated by him.
    If anyone can get the job done in that very political environment that is DWP, its David Freeman.”
    How can cutting payroll by adding more people to the numbers of the City’s unemployed help the LADWP and the City’s budget?
    I also would like to know why the infrastructure is so bad today if he was such a great manager in the past.

  16. Anonymous says:

    The selling of generation assets was state mandated, not city mandated. All municipal utilities in California were required to be a part of deregulation until the 11th hour, when the state decided to make municipal utilities exempt.
    Regarding infrastructure, if the department was not going to be owning generation and transmission assets, it wouldn’t make sense to spend money on maintenance of assets that would be taken away anyway. It also wouldn’t make any sense to keep employees around who were responsible for these assets because once deregulation went into effect, they would not have any work to do. As much as I don’t like Freeman, the workforce reductions were really just smart management because at the time, everyone assumed Ladwp would be deregulated along with private utiliies. Obviously Ladwp is now paying for it because rate increases are needed to restore the workforce and deal with infrastructure that sat there untouched for years. But if someone is to blame, it’s the state for not thinking deregulation through before trying to implement it.

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