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DWP accused of reneging on debt to council consultant

July 23, 2010 |  5:16 pm
Tensions between the Los Angeles City Council and Department of Water and Power flared anew Friday when officials disagreed over a debt owed to a consulting firm that recently had advised council members on the utility’s financial woes. That advice helped fuel a sharp debate over a rate increase sought by DWP executives.

On Thursday, the DWP board of commissioners declined to pay the $600,000 balance of a bill from P.A. Consulting after their lawyers said the agency did not have the proper documentation to make the expenditure.

On Friday, however, Councilwoman Jan Perry proposed that the council write a check to the firm from the city’s general fund and then withhold $600,000 from the DWP that is owed by the city Department of General Services for its electric bill.

Perry said she believed DWP officials tried to punish P.A. Consulting for providing much-need information about the DWP's plans for seeking rate increases.

“I would hate to think that the department wouldn’t honor its agreements because they’re angry, because a third party provided the council and the public with information they needed to know” about the rate hikes, she said.

DWP officials said they have no interest in revisiting the rate debate but insist that they were never asked to increase P.A. Consulting’s contract from $250,000 to $850,000. In an e-mail to The Times, DWP's interim general manager, Austin Beutner, said his agency asked six to eight weeks ago for the documentation to verify that the firm’s services had been authorized but had not obtained the information.

“This ... all happened prior to my arrival at DWP and I have no interest in a food fight over this invoice,” he wrote.

DWP officials said they would pay the bill once the city attorney signs off on the expenditure.

The utility has had an antagonistic history with P.A. Consulting. During the recent standoff with the council, the utility’s chief operating officer, Raman Raj, accused P.A. Consulting of shifting its position on electrical rates in order to placate the council.
The firm initially recommended a series of increases similar to ones sought by Mayor Antonio Villaraigosa. However, the firm’s representatives later told council members that, for the time being, a single, smaller increase would be enough to help the DWP with its financial woes while the council sought more information about the utility’s spending practices.

Perry’s office said her proposal would come up for a council vote Tuesday.

-- David Zahniser at Los Angeles City Hall