Cityview Channel 35 is expected to broadcast today’s DWP Board meeting at 5 p.m.
1 p.m. The DWP Commission meeting started at 1 p.m., half an hour later because Cityfone wasn’t working.
President Lee Alpert opened by honoring outgoing Commissioner Edith Ramirez. DWP Advocacy Chairman Jack Humphreville spoke in public comment saying Ramirez never saw a rate hike she didn’t like, opposed creation of a Rate Payer Advocate and like other board members was remiss in her duty to provide oversight. A second commenter criticized the meeting as a violation of the Brown Open Meeting Act since it is a regular agenda and 72 hours notice should have been provided
Alpert then reported February water use was at a 32 year low.
Interim General Manager David Freeman passed on his report, saying it was in the interst of time.
1:30 p.m. Alpert skips general comment, limits comment on items to two instead of three minutes and starts with Item 22: Energy Cost Adjustment Factor Cap of the Electric Rate Ordinance,
General Provision G.7, from 0.1 cent per kilowatt hour to 0.8 cent
per kilowatt hour,
effective April 1, 2010.
Steve Twining of Bel Air/Beverly Crest NC notes Board has approved 70 percent increase in base rates from 2008-2014 and criticized lack of transparency.
Nick Patsaouras makes his first visit back to DWP since quitting as Board President 18 months ago, saying there must be accountability. He says the .8 cent increase is unjustified, that ratepayers face doubling of rates in a couple of years but there will be no carbon dioxide reduction for five years.
2 p.m. More criticism of full 2.7 cent increase and then Sierra Club and others who support rate hike to reduce carbon emissions speak, take over and call for heavier investment in renewable energy and reduction in coal reliance. Mayor gets their full support although some mention need for greater transparency and accountability with audits by Controller’s Office.. Coalition of Clean Air and Green LA join support.
Humphreville comes back, reporting bills already have risen by thousands of dollars a year for many people and points to Board’s lack of public examination of PA Consulting report. He says no background documents provided the public, that recommendations from PA to split ECAF into segments are not on agenda, no transparency and no planning.
Dr. Clyde Williams points out there is no plan to get rid of coal plants, which should be done. He calls for ECAF to be limited to fluctuations in fuel prices and separation of all the other elements and says MOU with Neighborhood Councils for 90 days notice isn’t being lived up to.
Tony Wilkinson, chair of DWP MOU Committee, expresses dismay at speed of meeting and lack of notice. He notes Board last year backed lifting 1 percent per quarter cap on ECAF but was overruled by City Council. He says .8 cent increase is necessary to clean up commitments already made but nothing else should go forward without full public debate.
2:30 p.m. Freeman still holding court, quotes AB32 and
governor’s executive order to reach 33 percent renewable energy by 2020,
less than mayor’s 40 percent.
Alpert kisses off questions of
whether the meeting is illegal and has City Attorney to explain only 24
hours notice was needed because it is a special meeting.
Freeman
says small users in apartment won’t pay much more but people with
swimming pools and 3,000 square foot house will be hit hard but will get
tips on energy efficiency. Promises an integrated resources plan by
summer with a lot of public input.
CFO Jeff Peltola provides
financial info, citing PA Consulting report and says it would cost $70
to $80 million annually on $3 billion in borrowing if downgraded from AA
to A by bond rating firms.
Freeman cuts in says this is more
serious than just $70 or $80 billion (sic) more. Instantaneous rate
increase needed or the consequences could be dire, compares to energy
crisis impact a decade ago. Alpert questions whether the transfer would
make the transfer to general fund impossible. Freeman says he’d have to
meet his financial obligations to meet bond rating. Board members says
we get nothing for the extra bond cost.
Peltola says utility’s
ability to get rate hikes is what gives credibility with bond raters.
2:45
p.m. Peltola says DWP has scaled back renewable energy purchase to
reach 20 percent this year when they had planned to go as high as 24
percent. Cost pressure led to cutback. Freeman says without ECAF, they
won’t be able to make spot market purchases to reach the 20 percent
figure.
Aram Benyamin, head of power division, says 3.5 percent
of renewable energy coming on spot market, the most expensive. Lack
funding to move ahead on wind/solar projects without ECAF. Freeman says
we’ll only be at 15 percent by 2014 without ECAF. Board is supportive.
Peltola
says fuel costs rising from !.3 billion to $1.85 billion, mainly
because of renewables. Coal up $83 million. Commissioner Forescee
Hogan-Rowles fully supports proposal, saying we need to get rid of coal.
Nobody notes DWP plan does nothing about that. Benyamin talks about
coal prices rising. Freeman says DWP getting rid of Navajo plant.
Peltola
says costs for various energy sources vary from $29m/wh for coal to $59
to gas to $110 for solar. He adds the plan is to get rid of gas
production in coming year.to partially defray cost of renewables.
If
ECAF kept in place at .1 undercollection will reach $800 million in a
couple of years. It will be $6 million over same time with .8 ECAF.
3
p.m. Peltola brings up how cheap nuclear power from Palo Verde in
Arizona is and how if it went down, costs would rise. It’s capacity down
from 90 percent to 70 percent now..
Freeman wants cap on ECAF
totally eliminated for the “things that are beyond are control.”
Alpert
says we wouldn’t have this problem if no cap. Freeman says he’s trying
to be kind about past policy. Alpert gets a laugh, “You were part of the
past.”
Peltola says renewable rate hike will be put into a trust
fund and and not touched unless “stress factors” occur, something PA
noted has happened only twice.He says .3 of the .8 ECAF increase will go
to trust fund. That’s the budgeted case unless problems arise. Freeman
again says the ECAF needs to be uncapped and automatic.
Trust
fund limited to renewable, energy efficiency and similar, Peltola says.
Freeman says a lot of public input will come with integrated services
plan in summer. Peltola says DWP has become more transparent and worked
with NCs. Freeman mocks critics, saying some people are “slow learners.”
Peltola
says big increase up to 2.7 cents won’t happen without meeting 90-day
timeframe for NCs to review if rate hikes need Council approval. They
repeat that statement and City Attorney agrees that’s the MOU
requirement.
3:30 p.m. Peltola says killiing Salton Sea and Green
Path and low “projected” labor costs because of new five-year contract
with IBEW have freed up money for renewable investments to reduce
reliance on natural gas.
Residential rates being restructured to
protect low users, small commericial about even with Burbank and
Glendale with expected increases. Generally will be on part with most
other utilities but LA’s large commercial will remain lower. Edison and
PG&E charge more for third tier use than DWP proposes.
Commissioner
Jonathan Parfrey, the environmentalist, applauds rate hikes and
renewable purchases, talking at length of unaccounted for health costs
due to mining, air pollution and other energy related problems.
Peltola
says 2 cent kw/h increase plus trust fund of .7 cents equals overall
2.7 increase for most businesses, offers a comparison to current rates
for cold storage now at 12 cents so it’s a 22 percent increase,.
Residential will be higher, up to 40 percent, for many because of new
tier charges.
Motion on Item 22 is modified to make trust fund
subject to audit by City Controller Wendy Greuel, a major beneficiary of
IBEW campaign cash.
Alpert acknowledges San Fernando Valley
residents will be hit hard during hot summer months but responsibility
is to the DWP and ratepayers. He supports mayor’s plan and support .8
increase because failure to do so would cause harm, automatic
downgrading.
He brings up transfer to city and franchise fees are
not unusual. Without rate hike, transfer to general fund might not
affordable which would harm city.
Unanimously approved.
4
p.m. Item 24.(Recommended by Chief Operating Officer and Chief
Financial Officer)
(Approved
by Interim General Manager)
Resolution approving the estimated
expenditures for fuel, purchased
power, demand-side management, and
renewable portfolio standard
expenditures to be included in the
Energy Cost Adjustment Factor for
the 12-month period commencing
April 1, 2010 ($0.0080/kWh Cap
Tony Wilkinson of MOU Committee
says the fuel costs need to be separated out so costs and benefis can be
clear and full public debate allowed.
Steve Twining quotes PA
Consulting strong recommendation to create specific items outside ECAF
for all elements with only fuel price fluctuations in ECAF.
Dr.
Clyde Williams brings up putting trust fund in ECAF only obscures what
goes into it even more and limits public scrutiny and awareness. Snow
job, shell game are the metaphors that come to mind.
Humphreville
says public has no information about Item 24, no links, no documents,
absolutely nothing.
Peltola says it’s just consistent with Item
11. Unanimous Approved.
Item 23: Residential Rates:
23.(Recommended by Chief Operating Officer and Chief Financial Officer)
(Approved
by Interim General Manager)
Resolution recommending amendment of
Electric Rate Ordinance
No. 180127, to restructure the residential
tiered electric rate
to encourage energy conservation during peak
power usage, effective
July 1, 2010 and July 1, 2011.
Council
approval by ordinance is required.
Dr. Williams says top 10 or
25 percent of users should pay even more than this proposal to encourage
conservation and reduce use less energy from coal.
Steve Twining
says middle class, single family homeowners taking it in the shorts.
This is “social engineering” since rich can afford and poor not getting
significant rate hikes.
Tony Wilkinson suggest smart meters. Jack
Humphreville says again “we don’t know what we are talking about.” No
financial info available, not even the resolution.
Jeff Peltola
says Tier 1 rates will be reduced. He says 93 percent of customers never
leave Tier 1 or Tier 2 in cooler zones of city. In warmer zone, 95
percent are in Tier 1 and Tier 2.
Restructuring of lighest users
will raise bills 8.5 percent from $28 to $31. Tier 2 users will go up
$14, Tier will rise with ECAF to $37 but with Tier 3 rates will go to
$66. Amazingly, in summer, residents in cooler areas use one-third more
energy than in the warmer zone.
Unanimously Approved.
Monica
Harmon says majority of Council dubious, LA Times called it a “whiff of
dection” and DWP workers getting huge salaries and pay raises when cops
and other city workers are not and just about everybody having trouble
paying their bills. Sharply criticizes the board. “You’re not fooling
us…how do you sleep at night.”
4:30 p.m. Item 25. Motion
regarding the creation of a Ratepayer Advocate Function and
Position
within the Office of the City Controller.
Speaker after speaker
question how effective the RPA would be if is under the Controller, who
is beholden to the IBEW.
Nick Patsaouras says “we don’t need a
stooge in Brian D’Arcy (IBEW boss)” in the Controller’s Office. He tells
them they need to reject this to erase the board’s image as a rubber
stamp.” Jack Humphrevile says it’s a conflict of interest for the
Controller to oversee the RPA.
Alpert acknowledges his past
opposition to RPA but now feels it’s time to do something, disputes
criticism with Greuel, so he wants to get it started in an “appropriate”
manner.
He argues the RPA would be independent, moves GM should
coordinate with Controller’s Office to create RPA. DWP would pay costs
with report back in 60 days. “If that’s what everybody is crying
for…let’s do it.” Never seen any compromise by Controller’s Office.
Alpert
defends DWP Board’s openness and integrity. Sayles wonders if 60 days
long enough.
Freeman defends his position that he’s the ratepayer
advocate and expects the RPA will agree with him most of the time on
rate hikes. Thinks 60 days not long enough. Alpert agrees to his
suggestion of 90 days.
Forescee Hogan-Rowles chastises Freeman
for using the word “H-E-L-L.” and says she opposes RPA. Parfrey and
Alpret reserve the right to reject the proposal when it’s brought back.
Sayles said he’s concerned about putting it in the controller’s office
without looking at alternatives.
Approved with Hogan-Rowles
objecting.
5 p.m. Item 26.(Recommended by Chief Operating
Officer, Chief
Financial Officer,
and Senior Assistant General Manager – Water
System)
(Approved by Interim General Manager)
Resolution
recommending amendment of the Water Rates Ordinance to
modify
General Provision R, Shortage Year Rates, and the Second Tier
water
rates specified in the Ordinance to fully include water
procurement
costs in the rates to encourage conservation on a
year-round basis,
and to reflect the actual costs of water to LADWP.
Council approval
by ordinance is required.
Peltola says only Tier 2 users will get
higher rates, poorer customers will get slight reductions.
Unanimously
approved.
End of Coverage