DWP’s Budget, LA City, and LA100

EASTSIDER-There has been a lot of talk about LA100, the initiative to have 100% renewable energy by 2045.

As usual for Mayor Garcetti’s 20-year plans, by the time we know how well it will play out, no current LA City Councilmember will be around to be accountable. 

To show how complicated projections of renewable energy are, we should remember this started with a 2016 City Council Motion “requesting the DWP” to conduct an analysis as to “what investments should be made to achieve a 100 percent energy portfolio for the DWP.” 

The LA 100 Study Itself 

The results are now in, with a truly groundbreaking, massive study by NREL. For a quick overview of what this was all about, my 2019 column gives a summary. 

“The first thing we all need to know is that this a plan about making the actual plan, notwithstanding the Mayor’s glib assurances. There are two levels to this, and an existing State law, SB100. 

The top level is the National Renewable Energy Laboratory (NREL), which is in fact a lab of the Federal Department of Energy and is operated by an LLC. You can find out more about NREL here. They will be looking at scenarios.  

The next level down, and more local, is the 100% Renewable Advisory Group, which provided a presentation at the October DWP Committee Meeting. Their short name is LA100, and a member provided the audience with an 11”x17” printed Scenario Matrix which contains enough variables to make your head spin.  

They boast over 100 members, that’s right 100 plus members, including corporations, community groups, and subject matter experts. My hat’s off to them for even being able to meet, much less come up with any consensus. They are the ground zero for providing input into the Green New Deal Plan I described above.” 

Now the Report is available, all 1300 pages of it, and with a 67-page Summary. As my friend Jack Humphreville likes to quip

However, this DWP sponsored study by the highly regarded National Renewable Energy Laboratory is very complex, offers many different scenarios accompanied by cluttered graphs, and is very difficult to understand unless you are real lightbulb or have a doctorate from Cal Tech or MIT. ”  

The motive for this column is that the DWP is charged with outreach to explain LA100, and as they are basically an engineering firm, there is a significant risk that Ratepayers will quickly get lost in the weeds during their presentation. 

Here the emphasis is on the money rather than the science. After all, the first question out of the box for LA Ratepayers is “how much?” -- especially anything with the Mayor’s name on it. 

The Good News 

Thank goodness for the behind-the-scenes work and analysis by our Office of Public Accountability, a.k.a., the Ratepayer Advocates Office. They have reviewed the LA100 documents, along with the DWP’s Proposed 2021 Budget, and their interim musings give us some hope. 

As of now, there are no official OPA recommendations on their website, but they did participate with the DWP in presenting information to the DWP Board itself last month. 

They were also kind enough to provide links to the most important slides used in that process: 

-- LA100 study  in the expanded section, "Advisory Group Meetings / Presentations." 

-- Costs and the benefits of the various LA100 scenarios, slide 13 at the Advisory Group Meeting 15, virtual meeting 4 (the link will let you download the information). 

-- Rate impacts, Advisory Group Meeting 15, virtual meeting 6, rate analysis, slides 22 to 33 (also look at slide 8). Again, the link will let you download the information). 

At your DWP Committee’s May meeting, it turns out that based on what we know, through the end of this decade, which ever path LA100 chooses, the cost to the ratepayers is not going to be much different that our normal rate increases. 

Two major conclusions were made evident that are important to us as ratepayers, as opposed to the City Councilmembers’ own interests. First, aside from the DWP’s own budget which controls our rates, we find that the DWP is a giant cookie jar for the City Council and subsidizes the City to the tune of over $700 million dollars a year already. 

Second, and perhaps more concerning, as a “Council Controlled Department,” the City does not let the Department simply run itself within its budget, including hiring. 

The DWP hiring process has to go through the LA City Human Resources Department, which becomes a choke point, disallowing the DWP flexibility to actually advertise and hire employees in key positions. This has the effect of costing ratepayers a lot of money. 

My observation is that if the DWP was a stand-alone entity, they would have their own Personnel Department and could hire as projections required. And it’s not even the fault of the City Personnel Department. They are also straightjacketed by what the City Council pretends to be a budget process. 

The 2021 DWP Budget 

The proposed DWP Budget is well over $7 billion. For context, the entire LA City Budget is about $11 billion for 2021-22. And that comparison is trickier than it sounds. 

First, DWP is not getting a $1.3 billion bailout from the Federal Government. Second, buried in the DWP budget math, there is close to $700 million that DWP ratepayers give back to the City to prop up Garcetti’s budget: 

City 10% Utility Tax                                          $427 million

General Fund Transfer                                      $225 million

City services and the new pavement fee             $100 million 

And the “Payment Restoration Fund” doesn’t even mention all the money that the Sanitation Department saves by DWP providing the work. 

So, if you back out all these numbers, and discount the Federal Bailout and the DWP bailout, the DWP isn’t that much smaller than the City, at its $7.33 billion. The difference is that DWP ratepayers get something for their money.  

The Takeaway 

Having said all this, I believe that the DWP is a much better enterprise than the investor-owned utilities like SCE and PG&E. Not to mention the City of Los Angeles itself. As someone who had So Cal Edison and PG&E up in Tehachapi, I can safely tell you that the DWP is a significantly better deal. 

As for the independent analysis by the Office of Public Accountability of all this data, they are continuing to unravel the approximately one terabyte of information generated by the NREL study. Even for a group of PhDs, it’s a daunting task to validate. 

As soon as it is available, I will post another CityWatch article. This is important stuff for us and the future of our children in a Climate Change world. 

In the meantime, the trick is how to make the City Council actually understand that they either need to fully fund the City Personnel Department so they can do their job for everyone or provide a waiver to the DWP that allows them to run their own Personnel Department and simply provide the results to the City. 

Short version: The key Takeaway for now through 2030, is that going down the road to LA100 will not significantly affect the Ratepayers.


(Tony Butka is an Eastside community activist, who has served on a neighborhood council, has a background in government and is a contributor to CityWatch.) Edited for CityWatch by Linda Abrams.