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Come Clean, Austin, Where Has All That DWP Money Gone?

EDITOR’S NOTE: The City Council voted 9-5 Tuesday — one vote short of the two-thirds needed to take jurisdiction of the nearly 5 percent DWP power rate after learning it is permanent, not temporary as many of them, the press and the public believed. Parks, who had opposed the increase and could have supplied the 10th vote, was absent. Alarcon, Cardenas, Hahn, Wesson and Garcetti supported the permanent rate hike. (I erred earlier in saying Zine, missing that Garcetti’s name is now at the bottom of the alphabetical list.)

Austin Beutner has made transparency of the DWP a top priority so taking his word at face value I’ve sent him several requests for information about DWP rates, plans and policies.

Of course, words can mean different things to different people but I’ll go with Wikipedia which says transparency “implies openness, communication, and accountability” which in a government sense includes “open meetings, financial disclosure statements, freedom of information legislation, budgetary review, audits, etc.”
Based on the DWP’s long history of obfuscation, half-truths and outright lies, it could take the middle-aged Beutner the rest of his life to shed light into all the darkness of DWP machinations.

We know with certainty that Beutner’s real job is to be just transparent enough to get massive rate hikes through the City Council which means giving then enough cover so that they can overcome their phobic fear of the wrath of voters.

There must be thousands of questions to ask about what has happened to ratepayers’ billions in recent years, why water mains are bursting and the electrical system aging, why there’s so little green energy, why no comprehensive planning, why salaries are so high, how hundreds of millions can be turned over as “surplus” to general fund every year…

Today, Jan Perry’s Energy and Environment Committee is asking questions about why the DWP needs to spend $6 million a year more for “dumping privileges for dumping dirt, asphalt, and concrete” at landfills on top of the $4 million already allocated.

Questions also could be asked about why the DWP is spending $11.125 million to buy warehouse and industrial property for the mayor’s “clean tech corridor” near downtown and is intending — with help from the other bottomless pit of public wealth, the Community Redevelopment Agency — to buy jobs with massive subsidies.

“The Clean Technology Business Incubator will help CRA/LA fulfill its
role of economic development and job creation by encouraging research
and development in green technologies such as renewable energy,
recycling and next-generation transportation,” said Calvin Hollis,
CRA/LA Interim Chief Executive Officer, according to CurbedLA.

Apart from dressing up the DWP to look respectable, Beutner’s real task as “Jobs Czar” is to turn our bankrupt city government into an economic engine the way the Soviet Union and China in their Communist heydays tried to do without success before turning to that old-fashioned notion of free enterprise capitalism.

Perhaps, he knows something Stalin and Mao did not.

Certainly, a key area of flagrant DWP spending is its crash program to meet the mayor’s artificial political goal of achieving 20 percent renewables by 2010 no matter how much it costs, no matter that there is no plan to get rid of coal plants or to methodically go green at a cost the public can afford.

Other People’s Money has always been something the mayor has generously spent and this report Monday from the Tehachapi News shows just how desperate the DWP officials are to please the mayor without regard to cost or common sense:

“At the April 13 Airport Commission board meeting, Tehachapi Municipal
Airport Manager Tom Glasgow offered a clue as to why the Los Angeles
Department of Water and Power needs its huge rate increase.

“In January, the DWP was fueling its Bell Ranger jet turbine helicopter
at the Tehachapi airport as it ferried crews to a new wind farm
construction site 10 miles to the northeast of Tehachapi.

“The roads had not yet been carved out of the mountains, and the DWP was
utilizing sky cranes to carry out work. The department would drive
crews to the airport and airlift them by helicopter to the job site.

“Jet fuel sales jumped from 186 gallons in January 2009 to 1,821 gallons
in January 2010.”

Money is no object when it’s other people’s and that’s what DWP’s green energy plan is all about: Buying wind and solar power and renewable energy credits on the open market at a premium because they failed to carry out their stated goal more than a decade ago to reduce reliance on coal for nearly half the city’s power, why they even dragged their feet on rooftop solar to the point LA couldn’t even power a square block with solar.

This frantic politically-driven policy of buying renewables was so successful the DWP actually achieved the goal of 20 percent in March but the mayor’s failure to get his 20 to 30 percent rate hike could diminish that to 12 percent by the year’s end.

At that level, LA not only would have the state’s dirtiest energy portfolio but also the one with the lowest level of clean energy.

Transparency is the issue and Beutner has to come clean about all the questions about DWP before he has any chance of getting his hands on more of the public’s money.

To do that, he’s going to have to take the politics out of water and power policy, rein in payroll costs that make up nearly 60 percent of DWP spending after buying water and fuel — not the 25 percent of total costs he claims — and put forward clear long-term plans for rebuilding the infrastructure, generating renewable energy, closing coal plants and do all that at rates that don’t kill more jobs than they create and bankrupt more people than they enrich.

In other words, the mission of DWP must be what it’s supposed to be: Providing water and power for the City of Los Angeles, not serving the political games of the mayor. It’s a utility that provides public services, not a jobs or wealth redistribution program.

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18 Responses to Come Clean, Austin, Where Has All That DWP Money Gone?

  1. Noel Weiss says:

    The City Council needs to ‘vet’ Austin Beutner. That requires the introduction and passage of a motion BY THIS FRIDAY under Section 245 of the Charter to take jurisdiction over the April 20th action by the DWP Board to approve Mr. Beutner’s accession to be ‘Interim’ General Manager of DWP.
    The potential for conflicts of interest here is rampant and excessive. The man owns or controls over 3 Million of partnership units and shares of Evercore Stock (which closed Friday at $36.54 per share. . . Do the Math).
    With access to DWP proprietary information, contracts, and business opportunities, this is inviting Wall Street in the front door.
    Why would we do this?
    Mr. Beutner should also be required to give up his job as Deputy Mayor. . . A core point in the Measure B fight was drawing a line between the politics and the business of running the DWP.
    While the Chinese wall may have leaks in it, there is no reason to purposely evade common sense and the obvious negative potential from having a Wall Street insider possesses of zero experience in running any utility (let alone the largest public-owned utility in the nation).
    It is beyond an embarrassment to the people of Los Angeles for the Mayor to do this. It is also an insult to our intelligence.
    We need the Council to step up and thoroughly vet Austin Beutner. He needs to make full public disclosure of his business holdings and let us know why he feels qualified to do this job. He also needs to disclaim that Evercore will ever do any deals with the DWP and that he will not disclose to anyone at Evercore (directly or indirectly) any proprietary information he learns during his tenure.
    Noel Weiss

  2. Anonymous says:

    Certainly, a key area of flagrant DWP spending is its crash program to meet the mayor’s artificial political goal of achieving 20 percent renewables by 2010 no matter how much it costs, no matter that there is no plan to get rid of coal plants or to methodically go green at a cost the public can afford.
    After reading the USC article where you talk about creating “illusions, and pressures, and phantoms and propagandas”, I now realize you don’t care about facts as you do emotionally influence. But for those who do care about facts.
    The 20% goal by 2010 and the 33% goal by 2020 are state mandates, not the mayor’s artificial goal. They were mandated by Assembly Bill 32.
    Plans to remove coal from the portfolio have been in effect for awhile. Mohave coal plant was dropped from the portfolio back in 2005. Resolutions have been passed preventing contracts with the remaining plants, Navajo and Intermountain, from being renewed once they expire. Because of contracts, because coal is used for base load, and because the plants are independently operated, coal energy cannot be ramped down. The entire plant must be dropped from the portfolio, which means an adequate amount of infrastructure must be constructed to replace it. Until that threshhold is reached as was done for Mohave, the coal percentage will stay the same but the natural gas percentage will drop to compensate for green infrastructure construction.
    Concerning the costs of going green, the driving force is the State. The state penalty for failing to go green is 5 cents/KWH up to a maximum fine of 25 million. Meanwhile this blog is complaining about an 0.6 cent/KWH increase and comparing it to the Pearl Harbor bombing.
    If in light of the political gridlock, the State RPS is not met, you ratepayers will eat that 5 cent/KWH fine in 2020. The RPS is also just one of several state or federal mandates with penalities that are driving where DWP is putting its money – NERC FERC reliability and cybersecurity standards, GHG standards, and EPA 316B come to mind.

  3. Walter Moore says:

    I hope Zine’s vote will make it clear to his apologists that he is NO DIFFERENT FROM THE REST.

  4. The real votes will be on transparency: the Rate Payers Advocate, the Inspector General, the reconstitution of the Energy Cost Adjustment Factor, the Smith / Perry Transparency motions (involving Board composition, Council approval of the DWP budget and rate increases, the 2/3′s vote for the removal of the GM and any commissioner, and pension vesting for new employees).
    And will these items be on the ballot?

  5. Anonymous says:

    Garcetti the traitor.

  6. meterman says:

    Zine is just a hypocrite like all the rest of the city council. One day he refuses any rate increases brags in his newsletter about the no vote and the next time he approves them. I could never vote for this hypocrite as controller. Jack is right let’s see who really votes for transparency approval.

  7. Walter Moore says:

    Just wait till geniuses Hahn and Reyes discover how much of our electricity we get from Arizona!
    If their boycott is implemented, how much higher will our rates go to “punish” the people of Arizona?!

  8. Anonymous says:

    Why was Parks missing from such an important vote. Does he not get paid enough to do the basic requirement of his job to show up.

  9. Anonymous says:

    Zine IS “different from the rest” in that he’s a two-faced phoney who calls himself a Republican when it suits him to grandstand against the Democrats and their “tax and spend ways,” their “corruption,” but he’s expressed interest in running for Controller and needs all the future help he can get from both/ all sides. He grins in photo-ops with the mayor when it suits him, stabs him and his associates in the back on KABC, KFI and other talk radio. Only thing worse than a buffoon who knows nothing but thinks he’s an expert on every subject from public safety to finance is a two-faced one.

  10. meterman says:

    Hahn and Reyes are making a grandstand play. They should just shut their mouths and take care of our city business like they are paid huge salaries to do. I think Hahn gets up in the morning and the first thing she does is take a stupid pill.

  11. Anonymous says:

    Why don’t we just accept that all of them along with the Mayor are a nightmare for the city. Lets replace them one by one.

  12. Anonymous says:

    A special SHOUT OUT to Mr. Noel Weiss!
    Anon – 3:41 PM
    Zine IS “different from the rest” he is a RepubliCRAT or a “RHINO” Rebuplican in name only with his personal agenda like all politicians.
    Anon- 4:15 PM
    Lets replace them one by one.
    Let’s start the NO votes campaign against
    Lt. Gov. Candidate Janice Hahn. The same people who complain are the same people who continue to vote them into office.

  13. Michael Trujillo says:

    Now folks let us remember something about Arizona.
    Economic boycotts work there.
    Recall that in 1990 the state failed to pass a referendum on creating a state holiday regarding Martin Luther King Jr.
    In retribution the National Football league pulled Super Bowl XXVII from Sun-Devil stadium in Tempe Arizona. A national embarrassment for Arizona and a major economic shot denied to the state.
    And this tactic paid off.
    During the following statewide election in 1992, Arizona citizens passed the state holiday of MLK – one of the last states in the Union to recognize our fallen civil rights leader.

  14. Anonymous says:

    Does the Council understand what they vote on. They have been exposed again and again where when caught they claim they did not read or understand the legislation. The highest paid CC with the largest staff still can’t get it right. They will display the same BS or lack of accountability as the budget process begins.

  15. Anonymous says:

    Who voted against the hike?

  16. James McCuen says:

    Both Parks and Smith are the local equivalent of “Chicken Hawks” – they are fakes. And of course, add Dennis Zine to that club.
    Publicly they criticize DWP and say “I don’t want the rate increase. I want more accountability, etc”
    But then they cooperate with the Mayor and Eric Garcetti in using DWP to help cover up their mistakes and fund their wasteful programs.
    The losers are the working class taxpayers, who are losing their jobs faster than LA gives out zoning variances and small business owners who are leaving Los Angeles faster than the Mayor can book his next out of town business trip.

  17. James McCuen says:

    To By Anonymous on April 27, 2010 5:42 PM,
    Be careful on giving to much credit to those who voted against the DWP rate hike. I get the impression that they are one big club. The best example is Dennis Zine who voted for Eric Garcetti’s potentially illegal “Special 1″ on April 14, 2010 against the advise of the City Attorney. The City Council needed 10 votes to even take that up and approve the rate hike.
    If Dennis Zine wanted to “kill the rate hike” he would have listened to the City Attorney and voted against the findings.
    It seems like backroom deals are made when Smith, Parks, or Zine are absent so that controversial votes will pass and these Councilman can claim that they opposed it.
    Don’t buy into this – instead vote for their opponents and support grass roots folks who are willing to run for office – don’t let Los Angeles down.

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