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New DWP leader pledges to restore stability as L.A. Council votes 11-0 to confirm his appointment

January 18, 2011 | 12:25 pm

Los Angeles Mayor Antonio Villaraigosa’s newest pick to run the Department of Water and Power promised on Tuesday to restore leadership stability at the agency, saying he wanted to bring an end to the utility’s revolving door of top executives.

The council voted 11 to 0 to make Ron Nichols, a Seattle-based utility consultant, the DWP’s general manager -- its sixth since 2007. Moments before that vote, Nichols said the rapid turnover “hasn’t made life easy” for the DWP in recent years.

“I’m very mindful of that,” he said. “It’s my desire to be here a long time.”

Nichols arrives as the DWP presses ahead with Villaraigosa’s strategy for securing more renewable sources of energy, such as wind, geothermal and solar power. Utility managers warned last month that the DWP may need electricity rate increases of 5% to 8% in each of the next five years to cover its long-range environmental goals and its ongoing expenses.

Although the confirmation hearing lasted roughly an hour, Nichols provided no specifics on the types of rate hikes that customers might see in the next few years. Instead, he told the council that there are no “easy answers” for the DWP as it deals with financial pressures on its water and electrical operations.

“There are some really tough decisions we have to make,” he said.

Pressed further by Councilwoman Janice Hahn about the timing of the next rate hike, he said: “I’m not going to sit and misguide you. There’s major upward pressure that we’re going to have to push back on,” he said.

The council’s vote comes nearly a year after the DWP and the city council had an acrimonious standoff over a Villaraigosa proposal to increase electricity rates. The money was needed in part to pay for weaning the utility off of coal, its current primary fuel source.

Villaraigosa celebrated the utility’s recent success in getting 20% of its power from renewable sources during 2010. Still, DWP officials have warned that the number could roll back to 13% by 2015 unless the utility gets more money to negotiate new energy contracts.

Councilman Paul Krekorian told Nichols that last year’s rate dispute helped create a “crisis of confidence” in the utility. Nichols said, in response, that he aimed to help the DWP regain the public trust by providing accurate and timely information.

The mayor’s pick to run the DWP drew major praise from S. David Freeman, who ran the utility during most of last year’s rate debate. Freeman said Nichols provided sound advice to state officials in 2001 as they negotiated long-term electricity contracts, agreements that brought an end to rolling blackouts for power customers across California.

“He was a key player in overcoming that mess,” said Freeman.

Nichols will receive a salary of $345,000, plus $15,000 in moving expenses, according to DWP officials. In addition, he will receive a monthly housing allowance of $3,200 during his first year on the job.

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-- David Zahniser at Los Angeles City Hall

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