L.A.‘s Green Energy Push Costly

[Jeanfromfillmore]

L.A.‘s Green Energy Push Costly

By Don | April 5, 2010

The push for renewable energy has hit another speed bump. This time it's in Los Angeles where city officials are sparring with the local power company over large rate increases the utility says are needed to pay for the green energy.
According to the Wall Street Journal the city council is balking at the requests despite admitting that the utility will need more revenue and that a rate increase later this year is almost inevitable.
The city council which already approved an emergency 2.7 cents a kilowatt hour increase last month to combat a looming revenue shortfall at the Los Angeles Department of Water and Power, the nation's largest municipal utility authorized a 5% increase that was to take effect on April 1 but the utility's board moved for a larger increase which the council halted meaning that there will be no action for another 3 months.
In the meantime the utility will be providing energy to Los Angeles residents at rates that are below their costs of providing service which will only exacerbate the problem.
The city wants to get 20% of its energy from renewable sources by the end of this year and up to 40% by 2020 which they are on track to achieve but in their zest to go green officials failed to properly calculate the increased costs of building wind and solar farms and how that would affect rates. This isn't really all that surprising since green energy advocates tend to gloss over the costs while extolling the virtues of going green and doing the politically correct thing.
Granted coal isn't as clean as wind or solar but nuclear energy is even cleaner and cheaper but not politically viable in California even if President Obama supports the expansion of nuclear energy in the U.S.
Los Angeles has cast its lot with the green crowd and while it may make them feel better it will drive up electricity costs that could drive away businesses. The Journal quoted a spokesperson from brewery giant Annheuser Busch InBev NV that a rate increase would cost the company $2 million a year. The company is certainly large enough to absorb the extra cost but it will likely result in either higher prices to consumers or job losses or both to compensate for the added increase in expenses.
As city councilman Greig Smith told the Journal, the green push will cost a lot of jobs and doesn't shut down a single coal plant.
With cities and states under severe budget pressure it would seem that postponing or even better scrapping their renewable energy projects would be the prudent thing to do to not only save money but save jobs and their tax base.
Unfortunately politicians on both sides of the aisle would prefer to be politically correct than fiscally responsible which will only lead us further down the road to destruction.

http://www.aim.org/don-irvine-blog/l...y-push-costly/

[ilbegone]

Opinion piece by Walter Moore:

DWP's rates grossly unfair to customers

By Walter Moore, an author and attorney who finished second in the March 2009 L.A. mayoral race.

04/05/2010

When you go to the gas station, the price per gallon is posted clearly.

The price per gallon depends on the grade of gas. Period. The price you pay per gallon is not based on how many people are in your car, whether you're driving for business or pleasure, how much money you made last year, or how many gallons you buy.

The city of Los Angeles, by contrast, uses its monopoly over water and power to impose an incomprehensible mish-mosh of prices, the effect of which is to force some customers to subsidize others' bills.

The Los Angeles Department of Water and Power's Web site shows that the city-owned utility has 19 different power rate schedules, plus three "riders."

Schedule R-1 imposes different rates depending on the time of year (i.e., "high season" or "low season"), where you live (i.e., which "zone"), and how much electricity you use (i.e., what "tier"). The schedule also imposes different rates based on whether the customer is receiving "Standard Service," "Time-of-Use Service," "12-Month Trial Time-of-Use Service," "Low-Income Service," or "Lifeline Service." There is even an "Electric Vehicle Discount."

The differences in the rates can be dramatic. The lowest rate on that schedule is $.04655 per kilowatt-hour, and the highest is $.16061 per kilowatt-hour.

If that seems like a very tiny number, let me put it a different way. For a given amount of electricity, one customer would pay $465.55, and another would pay $1,601.10 - nearly two-and-a-half times more.

Repeat: You could pay $1,601.10 for the same amount of electricity someone else gets for just $465.55.

Schedule R-3 imposes a completely different regime for "master-metered residential facilities and mobile home parks, where the individual single-family accommodations are privately Sub-metered."

General Service Rider EZ, moreover, knocks 35 percent off the bills of businesses that are located in one of several "Enterprise Zones:" the Central Los Angeles Region Enterprise Zone, the East Valley Region Enterprise Zone, the East Los Angeles Enterprise Zone, the Harbor Enterprise Zone, the Hollywood Enterprise Zone, and the Los Angeles Enterprise Zone.

This maze of rates is confusing, unfair, and bound to distort the efficient use of resources. Some people are clearly paying far more than it costs to produce the electricity they use, and some are clearly paying far less.

The DWP is, simply stated, robbing Peter to pay Paul.

If City Hall is going to redistribute income - if it is going to force you to pay someone else's water and power bills - then it should do so openly. City Hall should use tax revenues to provide vouchers to people that we, the taxpayers of Los Angeles, believe deserve help with their bills. That way, we all know who is getting how much of a subsidy, and the basis for it.

Instead, City Hall is using the incomprehensible maze of rates to redistribute wealth from some customers to others - without disclosing that fact to any of us.

The rate that our city-owned utility charges us for electricity should reflect what it costs to produce that electricity. Period. Anything different from that is a secret social policy to redistribute wealth.

[ilbegone]

A grim assessment of L.A.'s finances

City Controller Wendy Greuel declares an 'urgent financial crisis' and says the only way to continue paying bills in the short term is to begin draining the city's already limited emergency reserve.

By Phil Willon and Maeve Reston

April 6, 2010


The city's top financial official issued a grim assessment of the escalating budget crisis Monday, warning that Los Angeles could be unable to pay its bills in just over four weeks.

City Controller Wendy Greuel declared an "urgent financial crisis" and said the only way to continue paying bills in the short term was to begin to drain the city's already limited emergency reserve.

Greuel's announcement was the latest development in an increasingly bitter standoff between the City Council and the city's Department of Water and Power over how much the municipal utility should charge ratepayers and how much it should contribute to the city's treasury.

DWP officials have proposed rate increases that would range from roughly 9% for most users to as high as 28% for some. The council has blocked those increases, responding to irate reactions from constituents. DWP officials have said that without the extra money, they cannot meet their commitment to send the city an additional $73.5 million on which budget officials say they have been counting.

Interim DWP General Manager S. David Freeman, in a letter sent to Greuel Monday morning, said that he would urge the utility's board of commissioners -- all appointees of Mayor Antonio Villaraigosa -- to withhold the $73.5-million payment. Without the rate increase, he said, the DWP would not have "surplus revenue" to contribute to the city while still paying its own bills.

Angry council members said they were skeptical of Freeman's assertion and accused the giant agency -- the nation's largest municipal utility -- of trying to use the payment to force through the rate increase.

"It seems they are holding the whole city of Los Angeles hostage because of their inability to hold up to their word," council President Eric Garcetti said.

The mayor, in response, reiterated his order for agencies to cut spending and expedite bill collection.

Greuel said the city would need to pull money from its $191 million in reserve funds immediately to pay its bills next month. She expects the city to be out of money, and probably in the red, by June 30.

"This is the most urgent fiscal crisis that the city has faced in recent history, and it is imperative that you act now," Greuel told the mayor and council members. "That is why I am asking you to immediately transfer $90 million from the city's reserve fund to the general fund so I can continue to pay the city's bills, and to ensure the fiscal solvency of the city."

Acting City Administrative Officer Ray Ciranna, the city's top financial analyst, said that using the reserve funds, plus agency spending freezes and other savings could reap enough money to cover Los Angeles' bills through the end of the fiscal year, June 30. Some officials fear that using that money would not only leave the city without reserves in case of emergencies, it would also probably trigger another downgrade in its Wall Street credit ratings.

"We think we could probably cover the current year deficit without the $73 million. But it leaves us with no reserves, which is not good," Ciranna said.

Even with that extra money, several council members remained concerned that the city would be in desperate financial straits at the end of the budget year, especially if tax revenue continues to drop. They also characterized Freeman's recommendation to withhold the money as retribution for the council's rejection of the rate increases, saying DWP's stance would require adding to the 4,000 city job cuts already authorized.

"I think we have folks who are over in the DWP that are playing games with people's lives," said Councilman Bernard C. Parks, who heads the city's budget committee.

Parks continued to question assertions by DWP officials that the agency's financial situation had deteriorated. In March, DWP officials assured the council that the utility would transfer a total of $220 million to the city's general fund by June 30 -- the utility has paid only $147 million thus far.

Councilman Greig Smith said the city has few, if any, options to recoup the remaining money before July 1. Even additional layoffs could not be processed that quickly, in part because many employees are protected by a labor agreement through the end of the current fiscal year.

"Our reserve fund was already very marginal to begin with; this could push it over the edge," Smith said. "That would mean we would have nothing in the tank on June 30," at the end of the fiscal year.

The fight with the DWP escalated in late March, when the council rejected the Villaraigosa-backed plan to raise rates for households.

When the proposal was first mentioned two months ago, Villaraigosa and his staff pitched it as an environmentally friendly initiative that would wean the DWP off dirtier coal. Weeks later, the mayor said the extra revenue also would help the utility cover rising coal costs and renewable energy contracts signed by his administration since 2005

To address concerns about the utility's fiscal health, the council approved a smaller electric rate increase of 4.5% last week and sent it back to the DWP board for approval.

But instead of approving the council's more modest rate increase, Villaraigosa's appointees on the DWP board voted for a 5.7% increase over three months, which was swiftly vetoed late that night by the council.

[Jeanfromfillmore]

Originally Posted by ilbegone

Opinion piece by Walter Moore:

This is exactly what I've been posting about. They are charging different rates and adding charges to others to cover the discounted rate 99% of the illegals are receiving. I know who and how they're doing it, and the California Public Utilities Commission is encouraging it and demanding it be done. The municipalities such as DWP are doing it at the bequest of the city politician.

It's time we expose these corrupt and unfair practices. The illegals are getting more than just welfare checks and foodstamps. And these programs don't require that you be a legal citizen to profit from them, and in reality they actually cater to the illegals and shun our citizens. I know that for a fact, I see it happen with my own eyes.

[ilbegone]

Mayor threatens broad city shutdown

By Rick Orlov Staff Writer

04/06/2010

Escalating his dispute with the City Council, Mayor Antonio Villaraigosa said Tuesday he is preparing to shut down large parts of city government for two days a week starting Monday because of the city's budget crisis.

The shutdown will focus on departments not involved in emergency response or revenue generation. That is likely to include libraries, parks, city clerk, planning and public works, among others. Those staying open would include police, fire and sanitation.

The mayor's announcement came a day after the Department of Water and Power refused to make a $73.5 million transfer to the city's general fund because the City Council had rejected a rate hike for the utility.

City Controller Wendy Greuel warned Monday that the city is likely to run out of cash by May 5 without the transfer.

Villaraigosa blamed the shutdown on the City Council and lashed out at council members for engaging in what he called "The politics of no."

"I do not have the luxury of being in a debating society," Villaraigosa said. "I can't stand up and be a demagogue. I have to run this city.

"The politics of no is no more sustainable than the DWP's reliance on coal. Instead of acting in the tradition of past city councils, where progressives put partisanship aside and positioned Los Angeles as a national leader, this council leadership has demonstrated what we've already seen at the national level ... they have shown the results of the politics of no."

City Council members said Villaraigosa's new tactic would not help resolve the issue and they would not support the shutdown, no matter how limited.

"Who's playing chicken with this now?" asked Councilman Bernard Parks, chairman of the Budget and Finance committee. "The real issue is the public will lose in this. The public always loses when services are cut."

The City Council passed a resolution Tuesday asking the DWP to transfer the funds, but does not have the authority to force the utility to act.

City Council members peppered DWP interim general manager S. David Freeman with questions over the utility's financial situation. They noted that at an earlier point Freeman had said the city could receive a $93 million transfer - $20 million more than initially promised - if the higher rate increase was approved.

"Mr. Freeman, your logic is inconsistent," Parks said at one point. "How can us approving a $40 million increase for you mean you would give us $93 million?"

Without the rate increase, Freeman said, the utility faces the prospect of a reduced bond rating.

"We can't transfer money we don't have," Freeman said.

Villaraigosa said he has asked the City Administrative Office to prepare the shutdown plans for April 12.

The Coalition of L.A. City Unions, which represents most city employees, blasted the mayor's proposal, saying city employees and residents were "about to become collateral damage" in a battle between the city and the DWP.

"This is playing brinkmanship and city residents will pay the price," the union said in a written statement. "This is not a game. It shouldn't be treated as a game.

Villaraigosa also said he would call a meeting of the Executive Employee Relations Commission - on which he sits with City Council members - to discuss the plan.

The DWP announced on Monday it would not be able to make the $73.6 million transfer, its final payment out of a promised $220 million this year, because of the council's refusal to increase the Energy Cost Adjustment Factor charged residents. The utility wanted to see it increased by 0.8 cents per kilowatt hour in April and increasing over the next year by a total of 2.7 cents per kwh. The series of increases would have boosted some customers' bills by up to 28 percent.

The council had authorized a 0.6 cent increase, which the Board of Water and Power Commission rejected and suggested a 0.7 cent increase. That was rejected by the City Council, meaning no increase can take effect before July 1.

Parks said when city officials budgeted the $220 million last year, there was no mention from DWP at the time that it was contingent on a rate increase.

Parks and Councilwoman Jan Perry pointed out the amount of money being discussed was 0.2 of one percent of the DWP's overall budget and the agency has nearly $1 billion in reserves that it could use to make the promised payment to the city.

Freeman, who is being replaced next week as interim general manager of the DWP, said there was always an assumption the department would receive some kind of increase.

Assistant DWP General Manager Raman Raj said his staff is preparing an alternative proposal for the commission to consider in coming weeks with a goal of having something in place by July 1.

One area expected to be reviewed is changing all the factors that go into the Energy Cost Adjustment Factor so that it would be limited solely to the cost of purchasing fuel to general electricity. It currently includes funds for renewable energy and energy efficiency programs.

Villaraigosa said he also wants to remove a cap on the fund, and have it fluctuate based on the actual costs of fuel.

Perry said she also plans to begin conducting public hearings on a consultant's report to develop a plan acceptable to the City Council.

DWP Board Chairman Lee Kanon Alpert said he and the other commissioners had been sincere and thoughtful when they pushed for a higher increase last week than the council had approved.

"We did what we felt we had to do and what was in the best interests for this department and the city," Alpert said. "I hope, in the future, we are able to reach some kind of agreement with our elected officials."

[ilbegone]

Mayor calls for agency shutdowns

Villaraigosa, battling with the City Council over a growing fiscal crisis, seeks to slash city services starting Monday.

By Phil Willon, Maeve Reston and David Zahniser

April 7, 2010

Los Angeles Mayor Antonio Villaraigosa called for shutting down non-essential agencies two days a week Tuesday as he and City Council members remained locked in a standoff over the intertwined issues of electricity rates and the city's worsening budget shortfall.

Villaraigosa's action topped another day of threats and name-calling at City Hall.

During a morning news conference, the mayor said the council had caused the latest financial crisis by engaging in the "politics of 'no' " and accused it of "the kind of demagoguery you see in the Congress."

Those were "the kind of scare tactics you saw around the healthcare debate," he said.

Councilman Bernard C. Parks, who chairs the Budget Committee, brushed aside the mayor's assertions and said city leaders should be focused on stabilizing city finances.

"I think we have to get beyond the issues of name calling and get to the issue of financial stability of the city," Parks said. He added: "I'm not going to trade names with the mayor. He can call us whatever he wants."

The latest escalation of the financial crisis began Monday when the Department of Water and Power took steps to withhold a promised $73.5-million payment to the city's depleted treasury.

Villaraigosa blamed the action on the council's rejection of an electricity rate increase, which DWP officials said was necessary to cover the DWP's fluctuating fossil fuel costs and the mayor's renewable energy agenda.

City Controller Wendy Greuel has warned that, without the DWP payment, Los Angeles could run out of money to pay its bills and employees within weeks.

The political feud between Villaraigosa and the council -- and the threat to shut down services and stop paying employees -- flabbergasted some officials. Councilman Paul Koretz called the mayor's threat "bizarre" and warned that Villaraigosa and the council were engaging in "a crazier and crazier game of chicken."

"It's absolutely a manhood contest. That's what it's been from the very beginning," said Koretz, who represents much of the Westside.

The mayor directed acting City Administrative Officer Ray Ciranna to prepare to shut down parks, libraries and other general fund services starting Monday. Public safety, trash collection and revenue-generating agencies would be exempt.

"I am duty bound to make sure that I'm not in a position to make people work if we don't have the cash to pay them," Villaraigosa said. Union leaders questioned whether the mayor had the authority to enact what amounts to a furlough program in which thousands of city workers would see their paychecks cut by two-fifths.

"We take this absolutely seriously," said Julie Butcher, regional director for Service Employees International Union Local 721, which represents more than 10,000 city employees. "The mayor's endangering services and people's lives."

As Villaraigosa was addressing the media at City Hall, a few doors away the council was voting unanimously to ask DWP board members to "honor their commitment" to hand over the promised $73.5 million. They also called on the mayor to work with board members, whom he appoints, to find the money within the DWP's cash reserves.

Council members grilled interim DWP head S. David Freeman about the agency's refusal to transfer money from the utility's Power Revenue Fund. Several members noted that as recently as March 1, DWP officials promised to make the $73.5 million payment of "surplus revenue" -- which ultimately comes from ratepayers. At the time, they did not link that payment to a rate increase.

The council agreed last week to allow the DWP to increase bills by 0.6 cents per kilowatt hour of electricity consumed. DWP board members rejected that, however, and said they wanted an increase of 0.7 cents per kilowatt hour instead. The council then killed that proposal.

Both proposals would have provided DWP with 0.5 cents per kilowatt hour to pay for the utility's existing financial obligations. Any additional money -- 0.1 cents under the council's proposal, 0.2 cents from the DWP board's proposal -- would have been directed toward new energy conservation and renewable power initiatives.

Council members said Tuesday that they could not understand how the standoff over the rate increase was preventing the DWP from making the transfer to the general fund. The council's proposal would have provided $30 million over the next three months to help the DWP pay its bills. The proposed transfer is more than twice that amount.

"The numbers just don't add up," Council President Eric Garcetti said.

Freeman told council members that the failure to approve an electricity rate increase had "decimated our financial future."

He noted that on Monday, one of the nation's top bond-rating agencies withdrew a AA rating on two DWP bonds worth $720 million, which could increase the agency's borrowing costs.

Freeman said the utility's board "has a responsibility for DWP not to get in a situation where we can't borrow money and where our bond rating goes down, down, down." The agency is not collecting enough money to cover its costs, he said.

"I don't see how you can expect the department to declare a surplus when we have a deficit on our hands," Freeman said.

Villaraigosa said, despite calls by the council, that he does not have the authority to order the DWP to turn over the $73.5 million. The utility's board has a fiduciary responsibility to make sure the DWP remains solvent.

Hours after Villaraigosa announced his plan to scale back services, the DWP board held off on a pair of expenses that had been planned by the utility. The board postponed a decision to use open positions to hire 11 tree surgeons in line to be laid off from the Bureau of Street Services -- a move that would have saved their jobs and provided relief to the city's struggling general fund budget.

The DWP board also tabled a plan to purchase renewable power from a wind farm based in Utah at an estimated cost of $9.5 million in the 2010-11 budget year. Both items are being delayed because the utility did not get its rate increase, said Raman Raj, the DWP's chief operating officer.

Raj said he would also develop a cost-cutting plan to help the utility avert a bond-rating downgrade in the next two weeks.

"None of us enjoy what's going on, least of all certainly me," said DWP Commission President Lee Kanon Alpert.

[ilbegone]

Originally Posted by Jeanfromfillmore

This is exactly what I've been posting about. They are charging different rates and adding charges to others to cover the discounted rate 99% of the illegals are receiving. I know who and how they're doing it, and the California Public Utilities Commission is encouraging it and demanding it be done. The municipalities such as DWP are doing it at the bequest of the city politician.

It's time we expose these corrupt and unfair practices. The illegals are getting more than just welfare checks and foodstamps. And these programs don't require that you be a legal citizen to profit from them, and in reality they actually cater to the illegals and shun our citizens. I know that for a fact, I see it happen with my own eyes.

I have believed for a long time that illegals are being subsidized every which way to Sunday but what was missing was exactly "who".

Can all this be put together in a comprehensive "who did it" and "who directed what"?


As far as LA goes, the two above articles show what a cat fight all of this has turned into. All bets are off as to the outcome, which I don't believe is going to be pleasant.

I think there is going to be a real melt down.

[Jeanfromfillmore]

What LA is doing is doing is offing the discount in whole districts, neighborhoods and blocks. Where as the private utilities are doing it through the CARE, LIEE, LIEHP and other programs many of the nonprofits contract out. But the cost of these programs are charged on everyone's utility bills.

These Green Programs are basically a scam. They are a way of requiring everyone to swap out their old system with a new one. With the guise of being earth friendly, which in reality often isn't, the companies doing the manufacturing or delivering the service have a whole new market to sell to. Kind of like clothing designers change trendy styles to get more sales.

Los Angeles has welcomed all the poverty it now has, and squeezed the middle class to subsidize them. Now LA is at a turning point where it has so much poverty, and it's becoming very obvious that LA can not afford what that sanctuary city has become.

It's like the LA Raza leaders telling everyone to keep breeding and they will breed their way into prosperity without realizing someone has to support them.

When those paying those high utility bills start having to cut back on other needs, then you're going to see a spiraling down even quicker. People will cut back on eating out or what ever/where ever they can. Then those businesses will lay off, and so on.

[ilbegone]

These Green Programs are basically a scam. They are a way of requiring everyone to swap out their old system with a new one. With the guise of being earth friendly, which in reality often isn't, the companies doing the manufacturing or delivering the service have a whole new market to sell to. Kind of like clothing designers change trendy styles to get more sales.

I think I know what you're saying.

The Solar and Wind farms are out for DWP, as far as what I see.

There was the proposed Solar project in the Coachella Valley which was scratched due to "environmentalist activism" concerning related transmission line construction through Riverside and San Bernardino County Desert to the DWP substation north of Victorville.

The other part, which might work, has to do with Federal tax incentive solar panel construction on roof tops, which is payed for by the customer but are payed back over the years to the customer by tax breaks and utility buying excess generation into the grid.

However, the utility is not going to pay for any generation into the grid over the customer's zeroed out electrical usage.

The "green jobs" which are supposed to come out of rooftop solar in Los Angeles has to do with Local 18 inside wiremen largely sowing up the installation of such facilities. It's been some time and I might not remember exactly, but I believe there has been a law passed which states that only Licensed contractors can install the systems (which excludes qualified journeyman electrical workers or any one else doing so with a valid permit and inspection on their own residences) and which also favors exclusive employment of local 18 electricians by those contractors.

And remember, with the configuration set up required, if the utility servicing your house has a power outage of any kind, you are out of power as long as anyone else on your part of the utility circuit due to the legally required switching system at your house. No such thing as a "free" lunch.

I don't know what the scheme is now, but a utility in California was required to buy electricity from independently owned wind and solar farms at the highest determined avoided cost of building new utility owned generation facilities, which in the 80's might have have been determined to be be 13 cents a Kilowatt hour when the utility might have been able to either generate with existing facilities or purchase electricity at 4 cents or less a Kilowatt hour (My best recollection).

Those costs get passed on to the consumer.