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

April 7, 2011 | 10:00 am

Transmission towers line an access road east of the Lowers Owens River at the foothills of the Inyo Mountains near the Owens Valley town of Lone Pine.

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.

Click to read full audit 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.


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