Bill would assess DWP service

A year after a heat wave caused widespread power outages in Los Angeles, lawmakers are moving to give the state a new role to assess the reliability of the city Department of Water and Power and nine other municipal utilities.

A bill written by state Sen. Alex Padilla (D-Pacoima) would require the state to “evaluate the adequacy” of electricity distribution systems operated by the municipal utilities and compare them to private utilities, including Southern California Edison. It has passed the Senate and is being considered by committee in the Assembly.

But the bill -- SB 980 -- has sparked a battle over whether it is intended to help consumers as another hot summer bears down or whether it is a gift to politically potent organized labor.

Opponents, fearing the loss of local control over the DWP and other city-run power systems, say it is Padilla’s attempt to curry favor with utility unions that would benefit from the change. Padilla and his allies counter that the DWP has failed to invest enough money to keep its electricity system reliable and cannot be trusted to operate without state scrutiny.

The powerful International Brotherhood of Electrical Workers has long backed Padilla, a former Los Angeles councilman. Local 18 of the union has been pressuring the DWP board to hire more union workers to service its system.

Union leaders have complained for years that the DWP has failed to hire enough staff and provide sufficient training to adequately maintain and modernize the vast water and power system. It has also fought agency efforts to contract out work.

By forcing a comparison with private investor-owned utilities, union leaders hope to show the need for greater investment by the DWP beyond the hundreds of workers that the agency already plans to hire.

The union contributed $6,700 to Padilla’s state election last year, the maximum amount allowed, and $5,500 to his various city campaigns in the previous eight years. His Senate campaign also received $6,700 from the American Federation of State, County and Municipal Employees and $2,300 from Sempra Energy -- two other backers of the bill.

State Sen. Dave Cox (R-Fair Oaks), who voted against the bill, said Padilla was attempting to target the DWP for the union and, as a “subterfuge,” expanded his bill to cover other agencies.

If passed, the bill would require the California Energy Commission to look at the DWP and nine other municipal utilities, including those in Pasadena, Anaheim, Riverside, Glendale and Burbank, as well as the Sacramento Municipal Utility District, or SMUD.

“There is a labor disagreement with the agency in Southern California, and Mr. Padilla wanted to take that agency and put it under the state,” Cox said, adding: “We do not have power problems at SMUD. This is just make-work.”

But Padilla insists that repeated blackouts in the DWP’s service area provide ample evidence that Los Angeles has not maintained its system, and that it is important to look at the 10 largest municipalities to see if the problem is more widespread than just L.A.

Last July, 80,000 households and businesses in the city lost power during a heat wave. The year before, a blackout caused when a work crew shorted out a line left half of Los Angeles without power for 90 minutes.

“Every time I talk to the DWP about this, they give me the chart about how the reliability index is within the standard deviation for the industry,” Padilla said. “So why is it every time there is a mild windstorm in Sylmar the power goes out?”

DWP officials say their agency ranks among the top utilities in the state when measuring reliability.

According to figures compiled by the utilities, about 23.7% of Edison’s customers lost power during the 15 worst days of the heat wave last July, compared with 5.7% of DWP customers who saw their electricity go out.

Sacramento had only “minor and scattered” outages during last year’s heat wave. Its last big outage occurred in September, when a truck backed into an electrical facility, but even then only 9,000 of its 500,000 customers lost power, according to Chris Capra, a spokesman for the Sacramento Municipal Utility District.

When asked why his bill focuses on municipal utilities, Padilla noted that investor-owned utilities, including Edison and Pacific Gas & Electric, are already closely regulated and monitored by the state Public Utilities Commission.

Backers of the bill argue that there also should be state oversight over municipal utilities.

Opponents, however, say elected officials in Los Angeles and other cities are held accountable for their utility’s operations by voters.

In Los Angeles, the DWP board is appointed by the mayor, with confirmation by the City Council. In Sacramento, the utility board is elected.

As a result, Padilla’s bill is “expensive and redundant,” said Brett Barrow, a lobbyist for the California Municipal Utilities Assn., which represents the DWP and 38 other electricity utilities in dealing with Sacramento. It opposes the bill.

He and others worry that the proposal would give the state a foot in the door toward additional power over municipal utilities in the future.

“Erosion of local control is always a threat, and this is one of the biggest threats to that I have seen in a long time,” Barrow said.

Mayor Antonio Villaraigosa deferred comment to the DWP.

Ron Deaton, the DWP’s general manager, said his agency has already budgeted $1.1 billion over the next five years to upgrade many of the city’s 126,000 transformers and other aging equipment that played a role in past power outages. Many transformers are more than 60 years old, and the new plan will replace all of them over 50.

The expanded modernization program will be paid for by an increase in electricity rates of 1% per year over the next three years.

“We are ready for the summer,” Deaton said. “We’ve already replaced 3,000 transformers.”

Marc Joseph, a lobbyist for the Coalition of California Utilities Employees, counters that the DWP is “way, way behind” the system upgrading undertaken by privately owned utilities such as Southern California Edison.

Under the Padilla bill, the utilities would be required to provide the state agency with information on the age and condition of their electrical systems and what the local utilities are doing to modernize them. The evaluation, which could cost up to $700,000, would compare the municipal utilities with private utilities.

DWP Commissioner Nick Patsaouras sees the bill as an attempt by IBEW head Brian D’Arcy to pressure municipal utilities to spend billions of dollars more on hiring union employees to work on the systems to compare favorably.

“It’s disingenuous for Mr. D’Arcy, after we have worked with him for months to create a positive environment, to go back to Sacramento for this,” Patsaouras said.

D’Arcy did not return calls for comment.

Padilla’s move comes as he eyes his political future. He needs the continuing support of utility employee unions should he decide to compete for the post of Senate president pro tem. The current leader, Sen. Don Perata, will be forced out by term limits next year unless a measure aimed at the February ballot changes the rules.

Padilla’s upward ambition has been so widely known that Perata recently castigated him for premature maneuvering.

Another leading contender for the leadership position, Sen. Darrell Steinberg (D-Sacramento), did not support the Padilla bill but said in an interview that his position had nothing to do with competition for the leadership post.

Instead, Steinberg said, the Sacramento municipal utility, which serves his Northern California district, has “a great track record of providing electricity.”

“I didn’t see the purpose” of having the agency report to the state, Steinberg said.

patrick.mcgreevy@latimes. com