Author: Ron Kaye

If You Think This DWP Rate Hike Is Bad, the Next One Will Be Worse and
Then the Next . . .

It seemed like the good old days Tuesday when long debates on controversial issues would inevitably end up 8-7 with the majority on the side of what’s good for City Hall and the special interests that it serves.

Those who voted “No” were given a “pass” from the desired unanimity in the name of putting up a front for their constituents and saving their jobs.

That’s more or less what happened Tuesday when Smith, Zine, Parks, Huizar, Alarcon, Krekorian voted against the “emergency” 4 percent DWP power rate hike while Garcetti, Perry, Wesson, La Bonge, Rosendahl, Hahn, Koretz, Reyes voted for it — an 8-6 outcome with Cardenas missing in action. Since the other four Valley members got a pass, you can bet he would have too.

Still, there was a grim satisfaction to the debate climaxing a 2 1/2-week drama set off by the mayor’s sudden declaration that the DWP, despite double-digit rate increases over the last two years and $1 billion in cash on hand, was in financial trouble and that LA desperately needed 20 to 30 percent rate hikes this year to turn its coal plants into clean energy resources overnight.

What little satisfaction there was came from watching the mayor dangling in the wind, repudiated by the Council from almost every direction after having to change his rate hike plan on an almost daily basis. He was finally left with only Richard Alarcon standing with him while the rest of the Council was tearing apart the DWP for deceit, incompetence, secrecy and a host of other deadly sins.

Transparency, accountability, rate payer advocate, public involvement were the catch-words of the day and so was green energy. And that may be the key to the charade we saw — necessary prerequisites for endless rounds of rate hikes that they will impose in the months and years ahead.

The Council voted unanimously for a .1 cent slush fund in the name of green energy, only a third of what the mayor wanted, in addition to the .5 cent increase for the vague catchall Energy Cost Adjustment Factor that also includes funds for green energy. Overall, it’s a 4.5 percent hike when the mayor wanted 6 percent. Grim satisfaction.

What was set in motion was an improved process for screwing the public, driving away business and jobs, cutting deals for green energy that will enrich the mayor’s pals and the unions that live directly and indirectly off the largess of the hostage customers of the DWP.

The DWP Commission will carry out the Council’s orders at 4:30 p.m. today so the rate hikes can take effect Thursday, appropriately April Fool’s Day.

The performance of the DWP Commission as nothing more than a rubber stamp ought to be the nail in the coffin of what was supposed to be a system of citizen watchdogs on government but has become a system of lapdogs providing cover for City Hall’s corruption.

Nonetheless, the debate Tuesday had moments worth sharing: Krekorian’s cogent tearing apart of the myth of a DWP financial crisis, the huffing and puffing of Council members so distraught that Reyes demanded a report on how much the DWP’s power system would bring if sold on the open market and smug performance of Alarcon, a lone wolf legislator who has never gotten anything done except for himself.

After a lengthy debate focused on the DWP’s loss of public trust, the City Council voted 8-6 Tuesday to approve a one-time 4 percent increase in electricity rates equal to .5 cents per kilowatt/hour and voted unanimously for a .1 cent increase per kw/h for green energy and energy efficiency.

The vote represented a repudiation of DWP management, the DWP Commission and Mayor Antonio Villaraigosa’s demand for a .8 cent per kw/h perpetual increase as part of a 2.7 cent per kw/h 12-month increase equal to an average of a 20 to percent hike. The mayor wanted .3 cents in a so-called lockbox for green energy.

The DWP Board, after the vote, called a special meeting consider the Council’s recommendation at 4:30 p.m. at the DWP Headquarters downtown.

Read the full story at http://ourla.org, watch video of the votes on six separate motions and what they mean.

Jimmy Hahn was no glad-handing politician. He suffered from a phobic
distaste for anyone actually touching him, which goes a long way to
explaining why his lackluster pay-to-play service as mayor lasted only
one term.

Antonio Villaraigosa suffers from a different malady. He is the epitome
of the glad-hander but is totally out of touch with everyone except that
small cadre of money-grubbers and power-mad mediocrities who surround
him and flatter his needy ego endlessly.

Many of those who have known him longer and better than I say he always
lacked the attention to detail and the brain power to get atop the horse
of power and really be a leader.

I don’t believe that from my own experience during occasional rambling late-night
phone conversations or numerous more public engagements.

It’s a mystery to me how he could go so wrong as mayor.

Maybe it’s no more than he loves the limelight and the good life of
wine, women and wealth more than he cared about the work of being mayor,
more than he cared about anything or anyone else.

Yeah, but … that  doesn’t explain to my satisfaction how it has all gone so wrong.

I believed from the bottom of my heart that despite all his flaws, Antonio represented the best hope for LA to discover a new spirit that would bring us together as a city, help us find a  vision that transcended our vast differences in backgrounds and stations, bring to life the myths of unlimited freedom and possibility that are at the heart of my own love of LA.

I was wrong.

The opposite has occurred. We are more divided than ever, more fragmented, more in conflict with each other. We have reached the point of no return on the road to the dark side of the destiny of LA, a city of rich and poor, of spectacular displays of wealth and horrifying conditions of poverty.

LA is a city of light and dark and the dark side is winning.

Under Antonio’s leadership, City Hall has become nothing more than a conduit for dispensing of the public wealth to a variety of special interests without regard to public benefit. It is held together by segmenting the population into narrow interest groups and pandering to them with flattery and favors.

The insider dealing that long greased the skids of City Hall turned into outright corruption under the passivity and aloofness under Hahn. Today, the entire system of government is corrupt with commissioners and department heads reduced to being little more than stooges, brow-beaten and threatened to the point where there are no safeguards for the public interest.

Public policy under Antonio is nothing but a series of slogans about sharing the dream, taking over the failing schools, 30-10 plans to fast-track the subway-to-the-sea, the lockbox for green energy.

We have reached the point where we all know the dream is over, where the schools are not only failing but firing teachers and shortening the school year, where the cost of the subway is gutting the DASH system and raising fares for the poor even as traffic congestion worsens, where there is no plan at all to give us cleaner energy.

Antonio’s failure of leadership in the budget crisis has led to one decision after another that only makes things worse and perpetuates the crisis of reduced services for years, decades probably, to come.

In the space of barely two weeks, he has changes his position and the storyline on green energy and DWP rate hikes five times and still his only support comes from the unions and renewable energy industry that stand to profit and the environmentalists who are so disconnected from the reality of the city’s four million people that you might think they are living in another world than the rest of us.

I have no better answer to why Antonio is floundering so badly and has lost all credibility than this: He suffers from the disease of our time, narcissism and has so fallen in love with the image of himself in the mirror that he disdains everyone else.

Like Narcissus, he doesn’t realize the reflection is his own. Narcissus perished staring at the reflection he loved so much, unable to move forward. And so it is with Antonio, he is perishing and so are our hopes for a greater LA.

It’s been a busy weekend for the out-of-touch mayor and his team of second raters.

First, he floats the crazy idea that the discredited David Freeman will step down as “interim” general manager of the DWP having caused enough damage during his six-month reign.

His replacement on an “interim” basis likely will be “jobs czar” Austin Beutner, fresh from his triumph of putting together a $5.7 million package of subsidies to lure a garment maker to move his 30 worker factory from South Gate to South LA. That works out to nearly $200,000 per “living wage” $10 an hour job.

Whoopee! What could be more exciting and stimulating of the economy than yet another sweatshop in LA.

Then, after twisting a variety of City Council arms for support over the weekend, the mayor called an 11 a.m. press conference for Monday to announce he’s backing Richard Alarcon’s 13-point proposal  as a “compromise” so he can get the 6 percent rate hike approved now and the other 20 to 30 percent in hikes in a few months. Alarcon couldn’t even get a second for his proposal at Friday’s Council meeting where the mayor’s own plan was rejected 13-1.

That’s really no different than what the DWP Commission approved, only to see it rejected by the Council on Friday in the face of a firestorm of public criticism.

Alarcon, the mayor’s only backer on this, added his own twists by suggesting the so-called carbon surcharge trust fund be used the first year to subsidize “energy efficiency
programs for Los Angeles-based employers most severely affected by the
rate increases.”

He also wants “a hardship exemption program to alleviate rate
impact for commercial  and residential customers most severely affected
by the rate increases” and “an economic development strategy…to maximize creation of local public and
private-sector jobs”

So there you have it, the grand scheme developed in panic to send electricity rates soaring to subsidize the poor and poorly run businesses and to create living wage jobs. It’s right up Beutner’s alley from what we’ve seen so far.

It’s what the plan was when they brought the wealthy Beutner aboard: To turn the DWP into an economic development engine by taking money from residents and businesses to “buy” jobs.

Green energy is a cover story to please environmentalists and to profit the greenwashers and insiders who will no doubt benefit handsomely from their connections.

This is a complete corruption of the DWP’s mission as a publicly-owned utility providing water and power. It is not a fund to subsidize economic development, for transferring wealth from one group to another.

Spinning madly in his desperation, the mayor put out this statement overnight:

“We heard our residential and the business communities loud and
clear. Councilmember
Alarcon’s compromise plan for a small, one-time rate
increase maintains our commitment to clean energy and
green jobs while mandating reforms to protect our ratepayers. It is a
strong first step and a reasonable middle ground which I will urge the Board
of Water and Power Commissioners to adopt if approved by the City Council.”

It’s actually the same .8 cent increase that was previously approved as part of a series of quarterly increases of similar amounts that will double and triple rates before you know it.

The truth is the mayor has lost all credibility. The DWP and its commission have lost all trust. And if the Council goes along with this charade, the circle of failure and deceit will be complete.

The DWP does not have financial problems. It has more than half a billion dollars sitting in the bank untouched for years.

There is no justification for any rate hike until there is a clear and coherent plan with specifics on the table on how it intends to go forward, until all costs are broken down clearly and transparently and subject to full public debate, until there is a credible management team put into place, until the commission is reconstituted to provide independence and genuine public participation, until a Rate Payer Advocate’s Office is created totally independent of all political control.

Those are just a few of the conditions that have to be met before we talk about how we actually achieve cleaner energy at a price residents and businesses can afford and ensure that we get value for our money.

 

Remember back when Antonio told us he was tripling the trash fee and going to put all that money in a lockbox and use it solely to hire cops to make us safe on the streets and in our houses?

He never mentioned his “full cost recovery” policy applied only to homeowners except for the 60,000 who were getting the trash picked up free.

Remember when the state got rid of public access TV and the mayor promised to put $10 million of the $25 million they get from cable franchise taxes into a special account that would used to run Channel 35 and restore our opportunity to provide our own shows about important issues to the public?

He never mentioned he was going to use most of the money to run other departments and that he had no intention of ever restoring public access.

Nor did he bother to tell us that he was going to take all the rollover funds in Neighborhood Council accounts and put it into the general fund along with every other cent that piled up in all the dozens of other “special” accounts and do the same as his mismanagement of the city’s financial affairs reached the crisis point.

So when the mayor tells you he’s going to create a lockbox for his “carbon surcharge” to replace coal power plants with clean solar and wind power, only a fool or an environmentalist would believe him.

There is no such thing as a lockbox or a special fund the way City Hall does business. In their desperation, they have made a mockery of their own processes and destroyed the integrity of nearly every special from the money set aside for new community art centers, to libraries, to parks through one deceit or another.

City Hall cannot be trusted. Look at the record and the truth of that statement is indisputable.

How so many from Al Gore to Arnold Schwarzenegger, from Mary Nichols to the Sierra Club, can be so ill-informed or so indifferent to the public interests as to buy into the mayor’s plan to double and triple electricity rates starting with increases of 20 to 30 percent this year is a sad commentary on the depths of political corruption of our time.

Knowing Antonio as well as they do, and we do, do they really think he came up with his costly green energy plan all by himself late one night after downing a couple of $1,000 bottles of cabernet his friends bought him?

No, the carbon surcharge and the virtually unlimited and unscrutinized increases in the Energy Cost Adjustment Factor that lumps together all kinds of DWP costs is nothing but the bastard son of Measure B that voters rejected a year ago.

Measure B was the clumsy handiwork of Brian D’Arcy, bully boss of the IBEW, who is the No.1 reason that LA has lagged so far behind other utilities in going green, relies for nearly its power on labor-intensive (i.e. IBEW labor) coal-burning plants and is paying a huge premium to buy renewable energy at premium prices on the open market.

D’Arcy got his grossly overpaid members 6 percent raises from the mayor in good times and now are getting up to 4 percent raises in tough (and deflationary) times. In return, he is the No. 1 financial backer of the mayor , Controller Wendy Greuel and nearly everybody else at City Hall.

So who do you think came up with this new attempt to soak the public for billions of dollars in the name of green energy, in the name of getting rid of cheap coal power, when there isn’t even a remote plan in the bowels of the DWP to achieve either goal?
The best informed among us point to no one other than D’Arcy and they say his motives are anything but environmentally friendly.

At is issue is plans by the Air Resources Board under Mary Nichols, the governor’s appointee as chair, to implement the four-year-old AB32 legislation intended to roll back carbon emissions in the state to 1990 levels.

On July 1, Nichols intends to announce drastic measures she swears will create more jobs than they kill, eventually, to pressure utilities and every business in the state to invest heavily in green technologies and efficiency measures.

The costs, of course, will be passed on to people like us, the consumers, the ordinary folks, the taxpayers and ratepayers who go to work every day and try to make ends meet even as our wages and benefits shrink and we or our spouses lose jobs or live in fear of losing jobs.

The issue of AB32’s implementation already is a big element in Meg Whitman’s campaign for governor and will explode in importance come summer. There is a rational, methodical and value-based way to achieve its goals but not in Mary Nichols’ or the environmental movements’ minds.

“No matter what it costs” — that’s the Sierra Club’s motto. Because, you know, the end of the world is coming, the end of the world is coming, and we’re supposed to repent our sins and starve to death because it could happen a century, or 10 centuries, or sometime in the long away future.

I, for one, don’t doubt that 7 billion people and hyper-consumerism, particularly by Americans, has caused terrible damage to the planet and great changes are needed.

But if they put it to a vote, nearly everyone would be on the side of protecting their own jobs and their current standard of living versus the if-come-maybe of what will be the consequences some day.

Brian D’Arcy most of all takes that view: To hell with everything else as long as his workers have jobs and more of them are created and their wages keep going up and up along with the union money he needs to control City Hall.

For D’Arcy the dream goal is the ECAF becoming carte blanche for the DWP to control 
of rate increases without sharing any plans or facing any oversight. And if the public gets mad, as they have, and scares the City Council into intervening, as it has, and AB32 implementation gets stalled, it’s all the better.
 
And that’s the crime in all this.

We could move forward without destroying jobs, bankrupting or chasing away good jobs, overtaxing the public in the middle of the Great Depression, the Sequel, reduce consumption and replace dirty coal with cleaner energy sources.

It’s what nearly everyone wants. But not the people who have power and influence.

They want to profit handsomely from it or serve some ideological belief that makes them feel superior. As bad as the corruption of our environment is, the corruption of political environment is worse and more deadly for the human spirit.

Frankly, I’d rather to choke on CO2 than let these people get away with what they are trying to do. Of course, I’m a heavy smoker and never thought I’d live forever.

Somebody must have spiked the bottled water City Council members drink with IQ raising drugs, or maybe it’s just fear of voter retribution that has awakened them from their long, deep sleep of denial of the hell they have wrought.

All of a sudden, Ed Reyes is worried about how city policies are terrorizing the middle class and taking apart the mayor’s gofer Matt Szabo for the sins of his patron.

Tony Cardenas has become a folk hero with penetrating questions that expose the fallacies of city policies, exposes his colleague RIchard Alarcon’s abusive humiliations of bureaucrats and points the finger at the mayor, the rest of his colleagues and himself for the city’s descent into chaos and bankruptcy.

Who knew that within Jan Perry lurked the command of an army general and knowledge of a utility executive as she showed off Thursday when she left top DWP officials mumbling and grumbling in their endless sea of lies and deceits?

Even Paul Koretz and Tom LaBonge have had moments when they have strung together two sentences that actually make sense.

There are exceptions, of course.

Janice “Sunday Fun Day” Hahn stills sounds like she is better suited to cheerleading at a school booster club.

Bill Rosendahl is finding that ignorance of what he’s voted for, even in areas like public access TV that he spent his career in, cannot be concealed by how deeply he cares for everyone.

And Eric Garcetti has the faraway look of a man who wishes he were in Congress where nobody knows what they do or off on a battleship somewhere as a Naval Reserve officer. He even stutters when he talks about city workers taking huge pay cuts and looks at the sky knowing what hot air he’s blowing when he declares that giving overpaid DWP workers raises of nearly 20 percent actually saves $164 million because utility executives budgeted for even bigger raises over the next five years.

Strange things are happening at City Hall, providing at least faint hope that some, if not all, of our elected officials are getting the message that their day of reckoning is coming.

Nine months into the fiscal year, the Council is spending day after day learning how badly they mismanaged the city’s affairs and how they paid no attention what they were voting on or the impact on the budget and city services to the public.

They are in quicksand and their struggle to free themselves is only making matters worse. Not a day goes by that doesn’t show their strategy to chase declining revenue numbers downhill is failing.

They tried sweetheart deals to get senior employees to retire early, then a shotgun approach to budget cuts, causing nothing but chaos and confusion since both tactics were untargeted.

Then, they resorted to announcing 1,000 layoffs, then more layoffs while weeping for the impact on city workers and hardly noticing the 14 percent unemployment rate and the hundreds of thousands of people in the private sector who have lost their jobs.

Now, they are hoping against hope that city workers who do have jobs and haven’t gotten pay raises from cops to civilian employees will take huge pay cuts while those in the IBEW keep getting more and more in their paychecks.

The mayor is oblivious to all that is going on.

He prefers to live in a fantasy world in the faraway future so all that matters now is talking about spending billions upon billions of dollars to build a subway-to-the-sea in and purify the air with green energy instead of coal power plants.

He doesn’t even seem to notice that he has lost clout with the Council and would lose in a landslide if he faced re-election today.

He wants a blank check for his green energy trust fund but there is
no trust. And there is no money. Did he not hear the business community
tell him that massive electricity rate hikes will mean far more jobs
lost than he claims might be created over time, maybe, by going green no
matter how much it costs? Did he not notice that the downtown
Marriott Hotel sold yesterday for $60 million, half its value three
years ago?

Living like a multimillionaire in Getty Mansion at
taxpayer expense surrounded by servants and bodyguards and sycophants he
probably doesn’t know homeowners like all property owners and
businesses and workers have lost huge chunks of their paper wealth and
incomes. 

If he had even a small shred of leadership ability, he
could marshal the political forces of the city into coming to grips
with problems and avert this crisis from becoming a catastrophe.

In
the vacuum of leadership is opportunity.

It is up to the
community and civic and business and labor leaders to fill the void but
time is running short. In a few weeks, the mayor will present his budget
for next year with its deficit approaching $600 million — 15 percent
more than revenue — and then the Council will take it up.

The
decisions they make change the face of Los Angeles for decades to come.
They will do no better than we deserve if we sit on the sidelines as if
we were spectators in our lives.

With support only coming from environmental groups, the massive
long-term rate hikes approved by the DWP Commission in an emergency
meeting last week took a beating Thursday at a three-hour hearing of Jan
Perry’s Energy and Enviroment Committee.

Relying heavily on testimony from the Council-hired PA Consulting and
sharp criticism from the business and activist communities, Perry
Committee unanimous recommended instructing the Chief Legislative
Analyst and City Administrative Officer to provide answers to a series
of concerns by Tuesday — a sign of the mistrust for the DWP’s
management.

The committee asked for a report on what is needed to provide minimum
financial stability for the city and DWP while protecting ratepayers
from rate hikes that could reach 34 percent for some customers within 12
months and rise sharply higher in the following years.

(READ FULL STORY AT OurLA.org)

How would you like to be a Gold Card public library user contributing money entitling you to boast you kept 100 workers from being fired so the Central Library and eight regional ones don’t have to close on Sundays starting April 11?

Janice Hahn thinks it’s a great idea and can’t wait to declare “Sundays Fun Days” as the slogan for the honor of carrying the otherwise meaningless Gold Card. Maybe she’ll make it part of her campaign for lieutenant governor.

Or maybe you just would like to write a check for several million dollars from your trust fund to save all 73 city libraries from closing a second day next fiscal year. Bill Rosendahl thinks that’s a winner and is putting out calls to the billionaires who populate his wealthy district.

Their ideas might appear lame-brained considering the Council unanimously has abdicated its responsibilities for years and now has pushed the city to within $73 million of bankruptcy —  if you believe the mayor and his pathetic attempt at blackmailing the Council into approving a blank check for rate hikes for the discredited management of the Department of Water and Power.

There’s an innocence to Hahn and Rosendahl that makes their sins somewhat forgivable. The same cannot be said about Richard Alarcon, suspect in a criminal investigation involving election fraud for falsely claimed he actually lives in the district he serves, allegedly.

Alarcon’s pretentious and deceitful posturing on behalf of the city’s unions puts him in a class by himself.

His increasingly frequent and vicious attacks on bureaucrats dealing with the budget catastrophe he and his colleagues created are shocking in their cruelty. His repeated expressions of contempt in public ought to prompt a censure motion if the other members of the Council truly had the bleeding hearts filled with compassion for their fellow man as they would have us believe.

His performance Wednesday when Martin Gomez, chief city librarian, explained the impact of having to leave 100 jobs vacant, losing 100 workers to the Early Retirement Incentive Program and facing 100 more job losses to looming layoffs — a 30 percent staff reduction — wasn’t as obnoxious as some of his grandstand plays. But it ranked high enough to be worthy of condemnation for his unseemly efforts at humiliating people trying to do their jobs.

Tony Cardenas did that shortly after Alarcon spoke, putting him down deftly by asking City Administrative Officer Miguel Santana who makes the decisions on budgets and policies.

“The Mayor and City Council,” Santana dutifully answered.

With newfound passion for the public interest, Cardenas then forcefully, made the point as he as done several times recently, that the responsibility for the city’s financial woes, layoffs of workers and drastic cuts in services are not the fault of the bureaucrats.

The decisions are those of elected officials and they are the ones who should be held accountable, he said.

Cardenas is a lone voice of reason among our city officials at a time when others prefer to blame the sun, the moon and the stars rather than themselves for the crisis facing the city. He reiterated his statement later when the Internet Technology officials described how Channel 35 and the small semblance of what’s left of public access TV and numerous support services were being sharply cut.
The library system, ITA, parks, cultural affairs, human services, Neighborhood Councils, planning, building code enforcement among many others that provide basic public services are suffering most of the cuts.

On Thursday, the Library Commission approved the April 11 closures unanimously and other commissions will soon be following suit.

The Council went into closed session on Wednesday after getting all the bad news from various department heads and came out and announced it was ordering Santana to meet with leaders of the Police and civilian unions to discuss possible cuts in wages and benefits to prevent the announced 4,000 layoffs.

Eric Garcetti seemed to stammer uncharacteristically as he announced the latest ploy — layoffs or givebacks — which itself amounts to the same sort of blackmail that the mayor and DWP are using on the Council to get massive rate hikes.

“>

David Freeman and Raman Raj — agents of the IBEW far more than public servants — were fired once before from top jobs at the Department of Water and Power and must be fired again before the City Council gives them even one cent in rate increases.

They have both been accused of lying and deceit this week by Tony Cardenas, who has suddenly emerged as the City Council’s lone voice standing up for the public interest with penetrating questions and passionate statements of principle.

Both Freeman and Raj were put into the No.1 and No. 2 jobs at the DWP by Mayor Antonio Villaraigosa — a failed leader who has engineered spectacular raises for already overpaid IBEW members under contracts that run from 2005 to 2014.

Like the mayor, they have now engaged in a naked attempt to blackmail the City Council into approving electricity rate hikes of more than 20 percent this year with blank checks to double and triple rates in the following few years.

Like the mayor, they have threatened to withhold $73 million in “surplus” revenue transfers to the general fund by manufacturing a financial crisis at the DWP that its own consultants have testified is not in “financial distress” and only needs a small increase to avoid a credit rating downgrade.

As Jan Perry takes up the rate hike demand today in committee, she should make it clear that lying will not be tolerated and blackmail will not be paid.

Freeman and Raj must go or there’s no deal. Anything less will inflame this issue and show to the city that the Council’s taking jurisdiction over this 800 percent quarterly increase in the catchall Energy Cost Adjustment Factor is just a pretense, a delaying tactic before the Council goes along with the full rate hike by summer.

Freeman brought Raj aboard because he was an IBEW ally when  Richard Riordan was mayor.
When Riordan figured out who Freeman really was, he fired him.

Not long after Raj was fired too after the DWP.”spent $3.3 million settling employee accusations that the utility had condoned racial discrimination — and interfered in efforts to investigate those complaints,” according to the LA TImes.

“The allegations prompted the DWP to hire an outside law firm, which concluded that one high-level official, then-Assistant General Manager Raman Raj, had shielded union employees from disciplinary action and discouraged employee complaints. The firm recommended that he leave for the good of the agency.”

Two years ago, Villaraigosa, at the behest of IBEW union boss Brian D’Arcy,  made it a condition of appointing David Nahai as General Manager that he bring back Raj as Chief Operating Officer at a salary of $247,000.

Several months later, after approving rate hikes of 25 percent, the DWP Commission awarded Raj with an extra $152,000 toward his pension even as questions were being raised about the utility’s contracting with a former client of Raj’s.

These two men have compromised the integrity of other DWP managers with their machinations and deceits and destroyed whatever trust the public has in the city’s utility.

Council members now in these troubled times must decide whether they are the side of the residents and businesses of LA or on the side of the profiteers at the public expense.

A lot more is at stake in LA these days than just electricity rate hikes and closed parks and libraries.

Our system of government itself has been corrupted to the point of dysfunction. That’s why the city is running massive deficits and facing the threat of bankruptcy, why workers facing layoffs are being transferred and getting huge pay raises, why City Hall costs too much and delivers too little from crumbling streets and sidewalks to green energy.

It didn’t just happen overnight. The cancer of corruption has been eating away at City Hall a long time with unions, developers, contractors, consultants and their campaign cash holding almost all the power, and the people almost none.

The administration of Antonio Villaraigosa has accelerated this trend by using slogans as symbols in place of real policies — a million trees, mayoral takeover of the schools, the carbon surcharge to close coal power plants to name a few examples — and intimidation in place of persuasion to coerce commissioners and bureaucrats into docile obedience to his self-serving political agenda.

Commissioners are supposed to be citizen watchdogs on the operations of all city departments but they have become mere lapdogs with rare exceptions like Jane Usher and Nick Patsaouras who resigned as heads of Planning and DWP rather than do the mayor’s bidding when they knew what they were ordered to do was wrong.

None of the four DWP Commission members had such qualms last Thursday when they approved massive rate hikes without even considering the Council-ordered report by PA Consulting which called for major changes in policy to achieve transparency, effective management and coherent green energy policies.

They didn’t even have copies of the report on their desks when they rubber-stamped the mayor’s ill-conceived “carbon surcharge” policy. They didn’t even consider the recommendations of the DWP citizens committees when they proposed gutting efforts to create an independent Rate Payer Advocate by putting it under Controller Wendy Greuel, who owes her political career to the IBEW as much as to her personal charm.

As they did when the commission approved a 2,000 percent increase in the Energy Cost Adjustment Factor surcharge six months ago, the City Council on Tuesday repudiated the DWP Commission’s approval of an 800 percent increase, and did so unanimously.

In the space of eight days, the mayor had gone from proclaiming a 20 to 30 percent rate increase — which he falsely claimed was just a $2.50 a month increase — as necessary to raise nearly $700 million extra annually to replace DWP’s coal-burning plants with solar and wind energy.

He ignored the fact that the DWP’s five-year plan contains no provision to reduce the utility’s reliance on coal for 45 percent of its energy, the only reason its rates are 16 percent lower than other utilities.

By Thursday, the commission changed the story. It based its action not on replacing coal but on avoiding a credit rating downgrade due to the “under-collection” of $130 million in revenue when natural gas prices soared three years ago — a fraction of the revenue it had declared surplus and turned over to the general fund during that time.

By Tuesday, the mayor was resorting to the desperate argument that the city will go bankrupt if rates aren’t raised high enough to keep paying $220 million a year — 8 percent of all electricity revenue — to the general fund.

The shifting argument, the dishonesty of DWP officials, the lack of transparency cost him dearly politically and in terms of credibility.

City Hall is now in chaos.

Early retirement with sweetened pensions for 2,400 workers, threatened layoffs of 4,000 others have left nearly every department outside the DWP, Harbor, Airport and LAPD into confusion with gaps in skills and experiences and uncertainty about which services to protect and how to provide them.

We are nine months into the fiscal and still have a budget deficit of more than $200 million with much bigger deficits looming in the years ahead.

It’s clear nobody at City Hall has a clue about what to do. They are only making matters worse.

The commitment the Council made Tuesday in defying the mayor’s bullying tactics and promising to bring the shadowy policies of the DWP into the light of day is the first step on the long road to cleaning up the corruption at City Hall.

Citizen commissioners should take heed, starting with the DWP Commission.

In their acquiescence to the mayor’s coercion, they have failed to fulfill their duty to provide oversight on the DWP. They have been called out by the public and the Council, their actions denounced.

The honorable thing would be to resign immediately. And so should every other commissioner who has succumbed to pressure from the mayor or others to put special interests ahead of public interests.

It’s my belief that few would still be serving if they put honor ahead of position.

Department managers and other high-ranking bureaucrats have the same moral obligation to stand up in public and private for what is right for the city even in the face of threats to fire them.

It’s asking a lot of people to put themselves at risk for the common good of the city and its people. But if those in high positions don’t make a stand for what’s best for the city, what do the think the rabble, of which I’m proud to be part of, to do?

It’s my pleasure to be a weekly commentator with actress Debra Skelton on “The Filter with Fred Roggin,” an experiment in reinventing local TV news. It’s broadcast Monday-Thursday on NBC’s digital station  Channel 225 at 7:30 p.m. Starting soon, the best segments from the week’s shows will be aired on Channel 4 at 11:30 p.m. Sundays. You can see other past shows at NBCFilter on YouTube.

Here’s the segment from Tuesday night on the DWP story.
 

And the Vice President isn’t the only one coming out for
our innovative plan. Today, the Sierra Club also stood behind our
aggressive agenda for escalating our renewable energy goals and spurring
job creation in the City.


In a must read blog post on the Huffington Post, Jim
Corcoran of the Sierra Club’s Beyond Coal campaign writes:

It makes neither long-term nor short-term economic sense for
Los Angeles to continue exporting our money to out of state coal
corporations when we can instead invest in energy efficiency and
renewable energy technologies that will put thousands of Angelenos to
work.

[The Carbon Reduction Surcharge] would shine much-needed sunlight on the
DWP planning process, create thousands of local jobs and generate the
funds for energy efficiency and renewable energy projects that will
harness the power of sunlight to wean our City off dirty and dangerous
coal-fired power.

We’re grateful to Vice President Gore and
the Sierra Club for their support in our efforts to turn Los Angeles
into a capital of the new, green economy.

To read more about the Carbon Reduction Surcharge, read this fact sheet.

Thank you,
Mayor Villaraigosa

Antonio Villaraigosa committed one of the worst political blunders imaginable on Tuesday, costing himself, his mythical green energy plan and the Department of Water and Power what little credibility they had.

It gives credence to gadfly John Walsh’s ravings that the mayor is sick or drugged. Maybe he’s just out of touch and surrounded by mediocrities above him pulling his strings and below him doing his bidding.

It’s Measure B all over again, except this time the magnitude of the boondoggle and blundering deserves BBB, like the city’s bond rating that has fallen under his ineffective leadership as fast as the budget deficit has grown.

Now, in an amazing miscalculation to drive desperately needed cash into the general fund, he tried to bill a $684 million electricity rate hike that would raise bills 20 to 30 percent as a $2.50 surcharge to replace billions of dollars in dirty coal-burning plants with wind and solar power. He coerced the DWP Commission to unanimously back his plan no questions asked even in the face of the certainty power bills would double and triple in the years ahead.

Even more incredibly, on Tuesday, he resorted to trying to blackmail the City Council into going along by warning the city faced bankruptcy if it doesn’t get the DWP’s full $220 million transfer of “surplus” electricity revenue on top of its 10 percent utility tax.

It backfired into one of the greatest political blunders LA has seen in ages.

In a City Hall that is bankrupt of leadership, the mere mention of the possibility that LA could have to file for bankruptcy is the ultimate taboo.

The Council voted unanimously 15-0 to take jurisdiction over the rate hike plan but not until one after another took shots at the mayor, his staff, the DWP management and the total lack of honesty, transparency and planning.

It was historic — if even for a moment since some rate hikes are inevitable. But for the first time there is reason to hope that this rogue agency will be brought under some semblance of control and accountability.

Tony Cardenas went so far as to directly accuse Interim General Manager David Freeman of outright lying to the Council nearly a decade ago when he previously serve as GM about the cost of cleaning up the mess in Owens Valley the DWP had caused by stealing its water and turning it into a dust bowl.

Freeman, who now wants to pave the area with 80 square miles of solar panels at an unspecified cost in the billions, had claimed mitigation of the damage would cost $150 million when his own consultant’s report said it would cost three times that. The actual cost, Cardenas noted, has been $450 million.

Anyone who ever verified Freeman’s glib musings could find hundreds of similar lies, deceits and obfuscations.

DWP CFO Jeff Peltola and CEO Raj Raman also felt the sting of hostile questioning by the Council over their long-standing pattern of false and misleading statements.

Raman tripped up offering a lame excuse on why the DWP Board didn’t act three weeks ago and Peltola for misleading the Council by assuring it two months ago that the DWP would make its full transfer payment and not leave it $73 million short as it did.

At every junction, the DWP management under Freeman and the DWP Board were exposed for disregarding the PA Consulting reports recommendations as the company’s three representatives stood their ground in response to questions that showed there is no plan to get rid of coal plants and other lies the mayor has told.

The mayor’s briefing paper and the heavy-handed comments of Deputy Mayor Matt Szabo, the PR man who has become the administration’s financial wizard, were the bombshells that removed any doubt that Jan Perry would prevail in her effort to take jurisdiction. She hold a committee hearing Thursday to determine what the next steps are.

The Council completely repudiated the mayor and the cornerstone of his strategy to save his political career with a phony green energy plan that united the business community which warned of massive job losses and residents who warned that electricity would become unaffordable for tens of thousands of people.

Only the environmentalists who support green at any price and the IBEW that supports their paychecks and union treasury no matter what it costs everybody else were on the mayor’s side.

How someone who once had as much promise as Antonio Villaraigosa could become so out of touch, so irrelevant is an astonishing turn of events.

Everything he does now will be tainted more than ever by the suspicion that he’s trying to deceive the public and serve one special interest or another at public expense.

He is a badly weakened mayor who was held in contempt by a City Council that for too long went along for a ride on his bandwagon. He is a crippled lame duck without the ability or credibility to provide leadership.. 

ENERGY COST ADJUSTMENT CARBON REDUCTION SURCHARGE

ISSUE BRIEFING FOR THE

HONORABLE MEMBERS OF
THE

LOS ANGELES CITY COUNCIL

./ ./

 

OFFICE OF MAYOR
ANTONIO R. VILLARAIGOSA

MARCH 22,
2010 

MayorDWPBriefing.pdf 

TABLE OF CONTENTS

PAGE

3. Once the City Council
“a~serts jurisdiction” over the DWPBoard’s action

using Charter Section
245, what are the Council’s options?

4. How is the Board of
Water and Power Commission action different from the

PAConsulting
recommendation? What is the difference between the rate

increase recommended
by the DWPBoard / Mayor’s Plan and the plan

recommended by PA
Consulting?

5. The Los Angeles Times has reported
that the DWPBoard’s proposal will

raise rates between
8.8% and 28%. How are those increases applied?

What does that mean
for the average ratepayer’s bill?

6. We all support
ending our over-dependence on coal, but why must we

act now? Can’t we
simply raise the rates a little bit now to get our head

above water, and
address the carbon issue later?

7. If the Council
approves this increase, how will DWPrates compare to

surrounding Investor
Owned utilities like SCE,PG&Eand SDG&E?

8. How many jobs would
the DWPBoard‘s proposal create?
Would they be

IBEWjobs or private
sector jobs?

9. What is a Green
Doctor? How would they help average residents?

10. What is a Feed-in–Tariff? What are its
benefits and how does it create

jobs?

11. How will these
proposed increases affect business in Los Angeles?

Wouldn’t the PA
Consulting proposal be better for business?

12. Councilmember
Koretz is urging the Council to reject the DWP‘s proposal

and instead ask the
Board to “restructure” the ECAFbefore approving any

additional increases
beyond April 1. What impact would that have on the

City’s commitment to
renewables?

13. If affirmed by the
Council, what impact will the DWPBoard’s action have

on the City’s General
Fund?

14. Would Council
rejection of the DWPBoard’s action put the City’s finances

at risk?

 

ONCE THE CITY
COUNCIL” ASSERTSJURISDICTION” OVER

THE DWP BOARD’S
ACTION USING
CHARTER SECTION 245,

WHAT ARE THE COUNCIL’S
OPTIONS?

Once the City Council
votes to assert jurisdiction over the

DWP Board’s
action, it has
21 calendar days to take one of

. three
basic options:

1. The Council may affirm the Board’s
action with a

majority vote.

2. The
Council may
Receive and File the item, thus

deeming the action
approved.

3. The
Council may veto
the Board action with a 2/3

majority vote, and
remand the item back to the Board

for further
consideration.

The Council may not:

1. Make
any amendments to
the Board action.

2. Require
the Board to
amend its original action in any

way.

 

BOTTOM LINE: If
the Council asserts
jurisdiction over the

Board action, it has
two options; (1) approve or (2) reject.

The Charter prohibits
any Council-initiated amendments,

negotiations or
compromises even after the Council asserts

jurisdiction over the
Board action.

 

How IS THE
BOARD OF WATER
AND POWER COMMISSION

ACTION DIFFERENTFROM
THE PA
CONSULTING

RECOMMENDATION?

WHAT IS THE DIFFERENCE
BETWEENTHE RATEINCREASE

RECOMMENDED BY THE DWP BOARD /
MAYOR’S PLAN
AND

THE PLAN RECOMMENDED
BY PA
CONSULTING?

• The only difference
between the DWP’s Board action and

the PA Consulting
recommendations is that the DWP

Board dedicates a
portion of the recommended rate

increase to a
Renewable Energy & Energy Efficiency Trust

Fund.

• There is no
difference between the rate increases

recommended by the
Council-authorized
independent

consultant and the DWP
Board. Both
recommend an

identicaI2.7c/kWh
increase and raising the cap to 0.8

c/kWh per quarter to provide
DWPthe flexibility
to

maintain financial
ratios. Note: Neither report

recommends returning
to a 0.1c/kWh cap.

• The only difference
iswhether the DWPdedicates a

portion of the rate
increase to renewable energy (DWP

action) or whether it
uses the rate increase to perpetuate

the fossil
fuel-dependent status quo (PA Consulting).

 

THE Los ANGELES
TIMES HAS REPORTED
THAT THE DWP

BOARD’S PROPOSAL WILL
RAISE RATES BETWEEN 8.8% AND

28%. How ARE
THOSE INCREASES
APPLIED? WHAT DOES

THAT MEAN FOR THE
AVERAGE RATEPAYER’S BILL?

• The majority of
ratepayers (55% – 60%) will see their

electricity rates increase
by
approximately 8.8%.

• In actual cost, this
translates into an average of a $2.40 –

$3.40 increase in the
monthly bill.

• When the Times
mentions a 28.8% increase, it is referring to

the increase applied
to only the 5%- 7%highest-end

ratepayers (Tier3).
DWP rates are structured to

encourage conservation.
Those who
conserve pay less,

those who use more
energy pay exponentially more.

The chart below
explains the proposed rate increases.

These increases are
identical to the increases proposed by

PA Consulting.

 

 

WE ALL SUPPORT ENDING
OUR OVER-DEPENDENCE ON

COAL, BUTWHY MUST WE
ACT NOW? CAN’T WE SIMPLY

RAISE THE RATES A
LITTLEBIT NOW TO GET OUR HEAD ABOVE

WATER, AND ADDRESS THE
CARBON ISSUE LATER?

• Raising
the rates now
only to perpetuate the status quo at

DWPwould only tighten
the noose around the necks of

LA ratepayers.

• Under AB 32 and a
subsequent executive order by

Governor
Schwarzenegger, the City of LosAngeles will
be

on the hook for $634
million in carbon fines in 2012 if we

don’t take radical and
immediate action to wean the

DWP off of its
over-dependence on fossilfuels (Based on

$40 per ton of
carbon).

• Establishing a
renewable energy and energy efficiency

trust fund now is
absolutely essential because we will be

able to invest in
projects to reduce our carbon

emissionsand create
good jobs. Doing this now

minimizes
the city’s
contribution to the inevitable state

mandated carbon fines.

 

IF THE COUNCIL
APPROVES THIS INCREASE, HOW WILL DWP RATES COMPARE TO
SURROUNDING INVESTOR OWNED

UTILITIES LIKE SCE ,
PG&E AND SDG&E?

• Even after this
proposed rate increase, DWP’s
electricity

rates will be
comparable to
surrounding Investor Owned

utilities’
(IOUs) current
rates, and will remain lower than

the IOU’s rates even
after their expected rate increases.

 

 

How MANY
JOBS WOULD THE DWP BOARD’S PROPOSAL

CREATE?

WOULD THE JOBS BE IBEW JOBS
OR PRIVATE SECTOR
JOBS?

• The DWP Board’s
proposal will create 18,000 jobs over 10

years.

• Solar Installation
and Manufacturing: 16,500 jobs over 10

years.

• Energy Efficiency:
1,140 jobs over 10 years.

These job creation
estimates refer to private-sector jobs.

The DWP’s current plan
for 400 MW of utility-owned solar

power will also create
an additional 700+ IBEW Local 18

jobs.

 

WHAT ts A
GREEN DOCTOR? How WOULD GREEN

DOCTORS/ENERGY
EFFICIENCY HELP AVERAGE RESIDENTS?

• Fundsfrom the
Renewable Energy & Energy Efficiency

TrustFund will augment
ARRAfunds to support a GREEN

DOCTORS & EXPANDED
DIRECT
INSTALL PROGRAM.

• Under this program,
the DWP,working in conjunction with

the LA Community
College District, the Community

Development
Department, and the Joint Training Institute,

will recruit
entry-level
workers, train them
and deploy

them in
teams to conduct
energy audits and energy

efficiency retrofits .

•’ These retrofits can
include: lighting
exchange, airconditioning

tune-ups, pool pump
exchange and

refrigerator
exchange.

Energy efficiency has
three advantages:

• First,it is the
cheapest way of fulfilling our energy needs –

at approximately 2.5 cents
per kWh, it is cheaper than

coal.

• Second, it can be a labor-intensive
activity offering

meaningful job
creation potential.

• Third, it offers a
way for residential and commercial

customers to cope with
rising electricity rates.

 

 

WHAT IS A
SOLAR FEED-IN-
TARIFF?

WHAT ARE ITS
BENEFITSAND HOW DOES IT CREATE JOBS?

• A solar
Feed-in-Tariff allows residential or commercial

property owners who
install solar panels to sell electricity

directly to DWPat a
guaranteed price (¢ per kWh) for a

set period of time.

• Residential and
commercial customers who participate in

the solar
Feed-in-Tariff program can drastically reduce or

eliminate their electricity
bill, and in some cases
generate

a net profit by
feeding solar energy back to DWP.

• A robust solar
Feed-in-Tariff program contemplated by

the DWPboard’s action
would create approximately

16,500 jobs over ten years .

 

How WILL
THESE PROPOSED
INCREASES AFFECT BUSINESS IN

Los ANGELES?

WOULDN’T THE PA
CONSULTING PROPOSAL BE BETTERFOR

BUSINESS?

• The DWP Board action
and PA Consulting recommend

identical increases in
electricity rates for LA commercial

customers. There is no
difference in the recommended

rate ·change.

• However, the DWP
Board action provides additional

programs and opportunities
for commercial
customers to

reduce or eliminate
their electricity bill through efficiency

and Feed-in-Tariff programs.

• The PA Consulting
report does not contemplate programs

to assist LA
businesses/commercial customers.

 

 

IF AFFIRMED BY THE
COUNCIL, WHAT IMPACT WILL THE DWP

BOARD’S ACTION HAVE ON
THE CITY’S GENERAL FUND?

The DWPBoard action includes
two
significantly positive

.impacts on the City’s
General Fund:

1. Ihe Board
approved a package of cuts and

efficiencies that will
allow the
department to transfer

an additional $20 million
to the City’s
General Fund THIS

FISCAL YEAR.

2. The
Board’s actions
will yield an additional $70
million in

annual transfer to the
City’s General Fund based on the

over increase in
DWPrevenue.

COUNCILMEMBER KORETZ
IS URGING THE COUNCIL TO

REJECTTHE DWP’s PROPOSAL
AND INSTEAD
ASK THE BOARD

TO
“RESTRUCTURE”THE ECAF BEFOREAPPROVING
ANY

ADDITIONAL INCREASES
BEYOND APRIL 1.

WHAT IMPACT WOULD THAT
HAVE ON THE CITY’S

COMMITMENT TO
RENEWABLES?

• Councilmember
Koretz’s proposal (submitted to the DWP

Board on March 18)
would eviscerate LA’s commitment

to renewable energy,
promote over-dependence on

carbon-emitting fossil
fuels and set
up LA
ratepayers for a

crushing rate hike in
2012 (based on carbon fines we will

owe the State of California).

• Council member
Koretz recommends that the Council

reject the DWPplan to
create a Renewable Energy &

Energy Efficiency
TrustFund, and instead “restructure” the

ECAFin a
manner that limits
the increases to coal and

natural gas only.

• The practical result
of this action would be a massive and

direct pass-through of
the state-sanctioned carbon fines

to the individual LA
ratepayer without any local job

creation or investment
in renewable energy.

Villaraigosa Puts Bankruptcy “Gun to Head’ of Council on DWP Rate Hikes


Mayor Villaraigosa sent a letter to the City Council Tuesday warning that rejection of the DWP rate hikes of 20 to 30 percent would cause the city to run out of cash and face bankruptcy within four months because the utility would not be able to transfer its full “surplus” of more than $200 million from the power fund, the Times reported.


Council Unanimously Takes Jurisdiction

VIDEO ONE:

Councilwoman Jan Perry opened the City Council’s consideration Tuesday of a motion to take jurisdiction of the DWP rate hikes approved last week by reading a letter she gave to each member:
:

VIDEO TWO

VIDEO THREE

VIDEO FOUR

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VIDEO FIVE>

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VIDEO SIX

VIDEO SEVEN