DWP had no coherent strategy to pay for renewable-energy effort, city controller audit finds [Updated]

The Department of Water and Power spent the last four years pushing aggressively toward the adoption of renewable energy without developing a coherent strategy for paying for such fuels, according to an audit released Thursday by City Controller Wendy Greuel.

The 69-page audit found the DWP clearly tracked its drive to meet Mayor Antonio Villarigosa’s signature environmental goal -- securing one-fifth of the city’s power from renewable sources like wind and solar energy by 2010.

But it did not clearly track that program’s cost, which is ultimately absorbed by ratepayers, the audit said.

Document: Read the full audit

“While the DWP’s unaudited numbers state that they achieved the goal of 20% renewable energy by 2010, it appears that this was likely due more to luck than to strong planning and policies,” Greuel wrote in a letter accompanying the audit. “Our auditors estimate that the DWP only achieved a 20% renewable energy portfolio due to abnormally cool temperatures and higher than expected wind at department-owned wind farms.”

[Updated at 11:12 a.m.: Standing next to Greuel at a morning news conference, DWP General Manager Ron Nichols said the utility had achieved a major environmental milestone and deserved to boast about its success. He brushed aside the notion the DWP somehow lucked its way into reaching its 20% goal for renewable energy.

“A win is a win,” he said.]

The utility’s long-range strategy for renewable energy was disrupted last year when ratepayers rebelled against a package of rate hikes.

Since the bruising standoff between Villaraigosa and the council, no additional rate increases have been approved.

In the wake of that fight, the DWP suspended decisions on securing more renewable power, throwing its long-range environmental goals into jeopardy, Greuel said.

State regulators are expected to require the DWP to obtain one-third of its power from renewable sources by 2020.

The department has been preparing a long-range plan to meet that goal, one that would spell out the size of rate increases needed at the DWP.

RELATED:

Document: The full audit of DWP's renewables program

DWP to make $400 million in cuts, not seeking rate increase at this time

-- David Zahniser at Los Angeles City Hall

Photo: Transmission towers line an access road at the foothills of the Inyo Mountains near the Owens Valley town of Lone Pine, an area in which the DWP is considering placing solar panels. Credit: Brian van der Brug / Los Angeles Times

Comments

[rene]

Thank you Wendy keep up the good work.

[Bolita]

This is not news....this is exactly why California, and the rest of this Nation is up to it's eye balls in debt. Bad planning and bad execution, it's been a Government problem since the begining of time. This is why we need to reform the way we do business and fire incompetent managers. But Some idiots do not belive in failure...they say Bail them out and lets be sympathetic. Thats why we are broke..

[Anonymous]

Duh. Liberals always think "hate oil, we'll go wind and solar and our problems are solved", then they move on without thinking about it.

[Astonished]

With all due respect, I disagree with Ms. Gruel's finding that DWP had no clear cut strategy in place to pay for the fuel. They had a plan that was perfectly acceptable to them. It's called the Stick It To The Ratepayers plan! And it almost worked!

[TAM]

What do you expect when the Pint Size Mayor hires inept people as himself. The rate payers are due a refund, not a rate increase. The statement a win is a win is stupid. When you do not have an conscience you make stupid statements as that.

DWP has never had a coherent strategy on anything that is honest since the Pint Size Mayor came into office with his lies. The coherent strategy has only been how to get more money out the rate payers, and the city council has rubbered stamped everything.

[Indian Joe]

Take the $ out of the pensions, then maybe they will do a better job...

[Jon K.]

The DWP is unionized.

[Kiljoy616]

And when do companies fire incompetent CEO, almost never and when they do their golden parachutes makes sure firing them is going to hurt plenty. Its pathetic to think that the managers where incompetent since they did have goals that politicians bowed to the masses of illiterates who think the world is a free ride.

We either pay for it and get with renewable energy or we keep giving our money to foreign countries who hate us any way. There is no free ride your going to pay one way or another. Politicians not taxing correctly all the classes not just the middle would have dealt with this problem.

[edward99]

You know, none of this is surprising. The LADWP is a bloated, mismanaged and expensive department. Anyone who has dealt with them on a management level (and yes I have many times), knows just how incompetent their people are to work with. Where are all those DWP supporters now?

[trust no one]

Wendy, good job. Thanks for staying on top of DWP, an organization that at every opportunity displays ineptitude, arrogance and entitlement.

[affableman]

"Liberals always think "hate oil, we'll go wind and solar and our problems are solved", then they move on without thinking about it." Don't lump us altogether, we don't all think the same way as the dittoheads do. Some of us are capable of independent thought.

[dirtraveler62]

Actually, the DWP has some of the lowest rates in the West. They had worked diligently on the strategic plan. I know, because I was at the meetings.Here's the problem; If we don't start using renewable energy sources, our energy costs are expected to double by 2020. "Peaker plants" are now ten years over their rated lifespan and will need to be rebuilt. You can spend a billion on renovations, or you can have individuals create their own power, and pay the majority of the cost themselves. Which would you choose? The coal fired plants in AZ are also slated for CO2 sequestration at a multi-billion dollar retrofit price. Expect Nuclear plants to go through some stringent control upgrade after Japan. Meanwhile, thousands of people are getting clean power on their rooftops. Since they are paying for their own installation (less subsidies) the cost to the taxpayer is a fraction of the end cost of retrofitting the old sources. I did not even cover the Infrastructure improvement costs yet!
Expect "time of use" billing soon. If you're solar it won't matter much.

[Judy]

Wow! Who would think this kind of thing could happen at DWP? Hahahahahahahahahaha! One area where the Times is excelling. Do more of this.