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12
Mon, Apr

Angelenos are Not City Hall’s Piggy Bank

LA WATCHDOG--The Los Angeles 100% Renewable Energy Study indicates that the Los Angeles Department of Water and Power can provide the City’s residents and businesses with reliable 100% clean, renewable energy by 2045.

But what this DWP sponsored study by the highly respected National Renewable Energy Laboratory does not discuss is the impact on Ratepayers, especially those that invest in roof top solar, batteries, energy efficiency, and electric vehicles. 

The NREL study estimated this plan will cost up to $86 billion, or about an average of $4 billion a year. This will increase our rates by about 50% since more than half of this expenditure will need to be financed through higher rates because the Power System already has too much debt (over $10.5 billion).  This does not include the impact of increased interest payments on the new debt that will be needed to finance the other half of this very ambitious capital expenditure program. 

But this 100% Renewables plan is not the only capital-intensive project that our friends at City Hall have on the drawing boards.  

  • The DWP is considering an $8 billion wastewater recycling plant at Hyperion that will have require a significant bump in our water bills.  
  • The Department must address the billions needed for deferred maintenance in both its water and power systems.  
  • The City has a deferred maintenance budget of an estimated $10 billion, including $3 to $4 billion needed to repair our lunar cratered streets. 
  • The City’s two pension plans have an unfunded pension liability of $20 billion.  Many consider these plans to be unsustainable.    
  • The City is planning the development of a new Civic Center surrounding City Hall, the revitalization of the Los Angeles River from Canoga Park through downtown, and the expansion of the Convention Center, all at a cost approaching $10 billion. 
  • The City is also under the gun to provide both bridge and permanent supportive housing for the homeless that could easily cost $10 billion, especially if the cost per unit exceeds $500,000.  
  • The City is considering a program for affordable housing which will require billions in subsidies.     
  • Los Angeles International Airport has embarked on a $14 billion expansion program of which a significant portion of the cost will be passed along to travelling Angelenos through higher fares. 
  • We will also be on the hook for any increased costs and new debt for the Los Angeles Unified School District which will require increased revenues to pay for higher salaries demanded by its union, retirement obligations, new facilities, and deferred maintenance.  
  • And if that is not enough, Metro is contemplating a $3 billion a year congestion tax which will focus on DTLA, the Valley, and the Westside (I-10 Freeway). 

One reasonable alternative is for DWP to aim for 90% renewables as the last 10% will cost disproportionately more.  This would save an estimated 25%, or around $20 billion, which may also be a cushion to absorb cost overruns or the failure of new technologies.  At the same time, most of the benefits of the plan will already be achieved as a result of the electrification of the transportation and building sectors of our economy. 

Everybody wants clean air and reliable power (24/7/365), but there is only so much that we can afford.  We are not City Hall’s piggy bank. 

 

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The Executive Summary and the 12 Chapters of the Full Report (a separate tab) of The Los Angeles 100% Renewable Energy Study is over 1,300 pages.  The High Level Finding summary is only 10 pages and will provide a reasonable overview of this very complex study. 

(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee and is the Budget and DWP representative for the Greater Wilshire Neighborhood Council.  He is a Neighborhood Council Budget Advocate.  He can be reached at:  lajack@gmail.com.)

-cw