Ratepayers Advocate: Now the Work Begins

LA WATCHDOG - Hallelujah.  We have a Ratepayers Advocate.

But now the heavy lifting begins as the newly appointed Ratepayers Advocate, Dr. Frederick H. Pickel, must review and analyze the proposed three year increases of 22% and 25% in our water and power rates, respectively.And it appears we have a winner in Dr. Pickel, the unanimous selection of the Citizens Committee.  

Beginning in early December, this volunteer Committee, along with Heather Renschler of the executive search firm of Ralph Anderson & Associates, did yeoman’s work, screening over 60 qualifying resumes and conducting two rounds of in person interviews, including the final in depth interviews that required the four finalists to review and analyze reams of information about our Department of Water and Power and the proposed rate increases.

Dr. Pickel has had over 30 years of experience in the utility industry, both as an utility employee and as a consultant to many publicly owned and investor owned utilities as well as their customers and suppliers.  He has also made numerous presentations to industry conferences and provided testimony and comment to many regulatory bodies such as the California Public Utilities Commission and Federal Energy Regulatory Commission.

He is an engineering and economics graduate of Harvey Mudd College, located in Claremont, about 35 miles due east of City Hall. He also has two masters’ degrees (civil engineering and operations research) and a Ph.D. (engineering/economic systems analysis) from a well known Eastern trade school located down the Charles River from Harvard University, often times referred to as the Massachusetts Institute of Technology.

Dr. Pickel is also a resident of our City and, as such, a DWP Ratepayer.

He is a well respected board member of the Greater Wilshire Neighborhood Council who is very often the voice of reason, in large part because he has considered the issue before he speaks and taken the time to understand all sides of the issue.

But Dr. Pickel will be in a bit of pickle.

He will be under considerable pressure from all sides, whether it our all knowledgeable Elected Elite, the bureaucratic DWP, the strident, cost be damned environmentalists, or the abused Ratepayers, all of whom know that they are absolutely in the right.

There are many issues involving our Department of Water and Power in addition to the proposed rate increases and the underlying cost pressures related to its infrastructure and numerous environmental mandates.

Over the next ten years, the DWP’s Strategic Plan anticipates spending $60 billion for operations and maintenance and capital expenditures.  There is the Power System’s Integrated Resource Plan, the Solar Incentive Plan, Feed in Tariffs, Once thru Cooling, the Urban Water Management Plan, and the Recycled Water Master Plan.

There is the early phase out of the Navajo Generating Station at a cost to Ratepayers of $800 million; the over reliance on very expensive solar power; the increased need for energy efficiency and conservation; and the costly legislative mandate for 33% renewable energy by 2020.

And what about the dumping of 1,600 City employees on the DWP and forcing the DWP Pension Plan to absorb almost $200 million in unfunded pension benefits?

And how does DWP intend to fund the $1.9 billion shortfall in its less than 80% funded pension plan?

And what is the status of pet projects, including, but certainly not limited to, the $200 million for covered reservoirs in Elysian Park and Upper Stone Canyon, the $230 million Head Works Reservoir in Griffith Park, and the $1 billion proposal to bury seven miles of high voltage lines along the Los Angeles River?

And there is also the IBEW Labor Premium and the overly restrictive work rules that may add 5% to 10% to our DWP bills.

And what is the status of the recommendations of the charter mandated Industrial, Economic, and Administrative Survey, especially those related to benchmarking the efficiency of DWP’s operations?

There is also the not so minor issue of Proposition 26 (The Supermajority Vote to Pass New Taxes and Fees Act) and its impact on, among other things, the legality of the 8% Power Transfer Fee that is anticipated to generate over $250 million for the City’s General Fund.

Needless to say, many people have questioned whether Dr. Pickel is absolutely crazy to take on this high profile assignment with so many moving parts. But rather than questioning his sanity, the City Council and the Mayor need to approve Dr. Pickel as the Ratepayers Advocate so he can provide Ratepayers and the public with an independent analysis of the proposed rate increases and other matters that impact the DWP and our rates.

After all, it has been over ten months since 78% of the voters approved the Ratepayers Advocate.


(Jack Humphreville writes LA Watchdog for CityWatch He is the President of the DWP Advocacy Committee and the Ratepayer Advocate for the Greater Wilshire Neighborhood Council. Humphreville is the publisher of the Recycler -- www.recycler.com. He can be reached at:   lajack@gmail.com) –cw

Tags:  Ratepayers Advocate, Dr. Frederick H. Pickel, utility industry, city council, dwp, Greater Wilshire Neighborhood Council, Department of Water and Power

Vol 10 Issue 6
Pub: Jan 19, 2012