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DWP quietly scales back Villaraigosa's ambitious renewable energy goal

Leadership upheaval at the agency has resulted in shifting priorities. Under First Deputy Mayor Austin Beutner, the agency is revising plans to generate 40% of its power from renewable sources by 2020.

December 06, 2010|By David Zahniser, Los Angeles Times

As Los Angeles Mayor Antonio Villaraigosa prepares to pick the next general manager of the Department of Water and Power — his sixth in three and a half years — the massive utility is quietly backing away from his ambitious goal of generating 40% of its power from renewable sources by 2020.

That shift, initiated under the leadership of First Deputy Mayor Austin Beutner, is only the latest at an agency marked by upheaval as it pursues the mayor's lofty environmental agenda.

Since Villaraigosa took office in 2005, the nation's largest municipally owned utility has been in a state of churn. Multimillion-dollar initiatives have been announced, then abandoned. Executives have been installed, then jettisoned.

Leadership turnover — five general managers over the last three and a half years and four DWP board presidents since 2006 — has caused the utility to lurch from one environmental strategy to the next, investing time and ratepayer dollars on projects, only to see them scrapped.

The DWP is on track this year to hit a key environmental goal, securing 20% of its energy portfolio from wind, solar and other renewable sources. But that accomplishment has come at a cost, with the utility now considered by many officials to be the most politically contentious agency in the city.

Three ballot measures have been drafted to impose new oversight at the utility. Council members now routinely demand to review DWP decisions. A dispute over rate hikes, sought last spring to help pay for new environmental initiatives, exploded into a highly public standoff that briefly threatened the city's overall financial standing.

And at one point last year, an organizational psychologist was brought in to sort out frictions between top utility managers.

Villaraigosa set the 40% renewable target during his second-term inaugural address, part of his bid to make Los Angeles "the greenest big city in America." But Beutner has dismissed that figure as "arbitrary," and the DWP, faced with resistance to the higher electricity rates needed to obtaincleaner power, is looking to scale back the target, according to a draft plan being circulated by the utility.

The proposed 20-year plan calls for the DWP to reach a 33% renewable energy target by 2020, putting it in line with state regulations. That move would cut costs to the utility's residential and business customers by up to $2.4 billion over 20 years.

DWP spokesman Joe Ramallo said that plan does not stray at all from Villaraigosa's inaugural vision. The utility always planned to get to 40% in part by using more renewable power sources and partly by making its customers more energy efficient, he said.

That view was not shared by former DWP General Manager H. David Nahai, who said the DWP's latest plan "constituted a U-turn" from the mayor's 2009 inaugural speech, Nahai said.

Beutner, who has been running the DWP on a temporary basis since April, has questioned the 40% goal, the brainchild of his predecessor, S. David Freeman. In an interview, he also said Villaraigosa's previous target of 35% had no science or "economic means testing" behind it.

A better strategy, Beutner said, would be to make steady progress while keeping the city's power reliable. "Clearly we need to have more energy from renewable sources," he said. "Whether we can cost-effectively and reliably add that much renewable energy remains to be seen."

The debate over the renewable energy goal is just one example of the utility's shifting strategies.

Consider the effort to develop geothermal energy: In 2006, Villaraigosa's appointees to the DWP board purchased thousands of acres near the Salton Sea for $5.5 million. Led by Nahai, the utility spent two years in talks with officials in Imperial County about tapping the land's rich supply of underground steam and sending it along a Green Path transmission line.

By October 2009, Nahai was out. Two months later, his replacement, Freeman, scrapped the geothermal plan, along with Green Path and other environmental initiatives backed by Nahai.

For Freeman, 84, it was his second stint heading DWP. Instead of the geothermal plan, he chose to pursue the development of a massive solar energy farm that, he predicted, would cover up to 80 square miles of dry lake bed in the Owens Valley.

Four months later, Freeman was pushed out as well, replaced by Beutner, a former investment banker who insisted on a more cautious approach to the solar initiative, including figuring out how much it would cost.

"Solar on that scale has never been done in this country. Never," said Beutner, who is Villaraigosa's top advisor on job creation. The DWP is now studying a solar project that is one-twentieth the size of Freeman's, officials said.

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