DWP Ratepayers, Grab Your Wallets!

LA WATCHDOG

LA WATCHDOG--As part of LA’s Clean Energy Future program, Mayor Eric Garcetti and the Los Angeles City Council and its Energy, Climate Change, and Environmental Justice Committee (formerly known as the Energy and Environment Committee) have called for the Department of Water and Power to study and develop a plan for DWP to generate 100% of its power requirements from renewable energy resources. 

 

Over the last ten years, DWP has increased it renewable energy from 6% to 29%, exceeding the State’s target of 25%.  It also sold its Navajo Generating Facility (granted at a fire sale price) which allowed it to reduce its dependence on coal from 44% to 24%.  

The Department has also developed plans to achieve 65% renewables by 2036.  This involves the elimination of coal by 2025 and the expansion of programs for power reliability, conservation and energy efficiency, energy storage systems, and distributed energy resources such as roof top solar.  

The Department is also encouraging the use of electric vehicles.  

In June, the Department even put on hold the repowering of its local once through cooling, gas fired facilities (Scattergood, Haynes, and Harbor units) despite years of planning. 

To achieve its goal of 65% renewables by 2036, the Department will eliminate coal as a power source and cut its use of natural gas by almost 50%.  This will require billions, if not tens of billions, in new facilities and operating expenses over the next twenty years.  But this ambitious project that exceeds the State’s current guidelines will demand a dramatic increase in our power rates that will dwarf the recent five year, 20-25% rate increase. 

To date, the financial aspects of this plan, and its impact on our rates, has not been addressed in an open forum despite repeated requests.  

Nor has the huge influx of new cash into the City’s coffers from the City Utility Tax and the Transfer Tax been a topic of conversation. 

The plan to go to 100% renewables will require astronomical rate increases as incremental changes become significantly more expensive.  Again, rates have not been a topic of conversation as the Department and its consultants have ducked the issue of rates. 

Even at 65% renewables, the Department does not have the financial flexibility to support this plan to say nothing of the 100% renewables plan.  

Over the last ten years, DWP Power System’s long term debt has more than doubled to almost $9 billion.  At the same time, the net worth has increased only 30%, resulting in a debt to equity ratio of 62%, up from less than 50% ten years ago. 

And this does not include almost $2 billion in unfunded pension and retirement liabilities which would cause the debt ratio to soar to an unhealthy 66%. 

While the Power System’s balance sheet took a major league hit, the City managed to feather its own next at Ratepayer expense by extracting over $2.3 billion from the Department through the illegal Transfer Tax.  This Ratepayer cash was used to fund the City’s ever increasing pension contributions and salary demands and not to repair and maintain our lunar cratered streets and the rest of our deteriorating infrastructure.  This does not include the haul of almost $3 billion from the City Utility Tax. 

DWP has been using the slogan, “Putting Customers First,” on documents involving LA’s Clean Energy Future.  But this hardly is the case as the Department, its consultants, the Mayor, and the City Council refuse to disclose the financial impacts on Ratepayers of this ambitious renewables plan.  But we are first in line to finance the tens of billions needed to accomplish this ambitious  repowering of DWP’s Power System.  

Mayor Garcetti pledged that DWP would be an open and transparent enterprise.  It is time that he and the politically appointed Board of Commissioners (led by Board President Mel Levine and VP Bill Funderburk) honored this Back to Basics priority.  

 

(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee and is the Budget and DWP representative for the Greater Wilshire Neighborhood Council.  He is a Neighborhood Council Budget Advocate.  He can be reached at:  lajack@gmail.com.)

-cw 

 

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