The announcement Thursday that the general manager of the Los Angeles Department of Water and Power will resign at the end of the month throws the nation's largest publicly owned utility into yet another period of turmoil.
Ron Nichols brought industry expertise and an aversion to political showmanship to an agency that has gone through eight general managers since 2000 and cycled through one controversy after another. Why so much turnover? Because the general manager has a nearly impossible job — essentially to serve as CEO of a $4.3-billion enterprise, which he or she is expected to operate with private-sector efficiency while beholden to the shifting political demands of City Hall.
After three years on the job, Nichols got caught in the political vortex. There's a struggle for control of the utility between Mayor Eric Garcetti and Brian D'Arcy, the business manager of the International Brotherhood of Electrical Workers Local 18, the union representing most DWP employees. D'Arcy's ability to bankroll political candidates has given him tremendous power in City Hall and thus over DWP operations. But D'Arcy backed Garcetti's opponent in the mayoral election, which turned a union ally into an adversary; now, the mayor seems inclined to make DWP reform a key issue of his administration.
The struggle came to a head this week when D'Arcy refused to release financial records showing how two nonprofit trusts co-managed by him and Nichols spent $40 million in ratepayer funds. Nichols says he wants to comply but cannot do so without D'Arcy's cooperation. City leaders, with Garcetti's blessing, said Wednesday that they would issue subpoenas to compel the union leader to turn over the documents. Nichols resigned 24 hours later, apparently by his own choice.
That's a shame. Garcetti is right to demand transparency from the DWP, and he's wise to focus on cutting costs and improving customer service, as the utility is likely to seek rate increases soon. But it's worrisome to see the DWP losing another general manager, especially given the tremendous challenges ahead, such as securing enough green electricity to meet the state's renewable energy mandates; replacing aging pipelines, power poles and other infrastructure; and figuring out how to conserve and recycle enough water to get the city through the next drought.
DWP general managers seem to alternate between industry wonks and political animals, depending on the mayor and the controversy of the moment. Yet in picking a new leader, the fundamentals should always be the same: someone who knows how to keep the lights on, the water running and the customer bills as low as possible while still investing in the system and meeting environmental regulations. Garcetti should handle the political fights and let his general manager run the utility.Copyright © 2015, Los Angeles Times