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?