It’s Lonely at the Top for DWP

Money talks.

Only eight days remain before the departure of Los Angeles Department of Water and Power General Manager Bill McCarley, and the city still has not found a permanent replacement.

City Hall sources say a sticking point is salary, and no wonder. The annual salary being offered to general manager candidates--a range of $158,897 to $238,366--is a pittance compared with what investor-owned utilities are paying their top people.

Indeed, the chief executives at California’s investor-owned utilities receive $1 million-plus packages (see chart). Salary was one reason for McCarley’s retirement: He submitted his resignation last fall, not long after the City Council refused to raise his to $190,000 from $175,000.

Of course, there has always been a disparity between municipal- and investor-owned utilities’ pay scales. Public utilities like DWP traditionally hired from within, giving jobs to people for whom the proffered bucks represent a huge raise. McCarley, a 35-year public servant, formerly was a mayoral chief of staff and the City Council’s chief legislative analyst.

Sources say McCarley’s interim replacement, to be announced today, is Harry Sizemore, currently assistant director of the city’s Bureau of Sanitation.

But California utilities, even city-owned ones like DWP, are losing their monopolies and will soon be competing against investor-owned utilities for the same customers and therefore will have to be just as efficient and well-managed. Utilities like DWP must recruit management talent from the private industry they will soon try to emulate.

“Utilities are even bringing in people from outside the utility industry, hiring from consumer marketing, for example, or telecommunications, getting executives who have already experienced deregulation,” said Steven Yamada, principal of the Korn/Ferry executive search firm in San Francisco and a specialist in utility executive searches.

Clearly, the head job at DWP isn’t an easy one to fill. McCarley’s replacement faces a daunting task of guiding the nation’s largest municipal power utility into the uncharted territory of the free market. That’s what state legislators unleashed when they passed a law in September mandating that residential and business customers be given a choice in power providers starting next January.

Although the DWP will remain a city-owned power company, the new GM will have to be as much entrepreneur as bureaucrat, wooing big industrial customers whose continued loyalty to the DWP is crucial to its survival. In short, the new general manager will be expected to perform just like the CEOs of companies like Edison, Enova and PG&E.;

For much less salary.

Gearing Up the EV Plus

Floor models of Honda’s electric vehicle, the EV Plus, have arrived at showrooms of three Los Angeles area dealerships--Miller Honda of Van Nuys, Costa Mesa Honda and Scott Robinson Honda of Torrance--making Honda the second major auto manufacturer to offer “electrics” to the general public. General Motors unveiled its EV1 in December.

The EV Plus will feature “next-generation” nickel metal hydride batteries offering a range of 60 to 80 miles per charge. That’s roughly comparable to the GM car, although the Honda vehicle is heavier and accommodates four passengers to the EV1’s two.

The Honda models will lease for $499 a month for three years, which includes all insurance. Although the vehicles are not for sale, the manufacturers’ suggested retail price is $53,999.

Crude Prices Soften

Although Southland gasoline prices don’t yet reflect it, prices of crude oil have been trending down since hitting a recent high of $26.62 a barrel Jan. 8. Tuesday’s close for March delivery of crude was $22.52 per barrel. Warmer weather and fattened inventories are the causes for the softened crude prices, which should portend a fall in gas prices at the pump.

Many oil analysts predict decreasing oil prices--and a corresponding drop in gasoline prices--through 1997 as fuel stocks fill from increased production in foreign and domestic oil fields.

Chris Kraul can be reached by phone at (619) 544-6040 or by e-mail at chris.kraul@latimes.com

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Utility Pay Gap

Where would you rather work? Here are the salaries and bonuses for the chief executives of California’s top investor-owned utility holding companies in 1995 (the latest year for which figures were available) and the top salary being offered candidates for the vacant top job at the Los Angeles Department of Water and Power:

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Utility Chief executive Salary and bonus Edison International John E. Bryson $1,324,000 Pacific Enterprises Willis B. Wood 1,244,250 Pacific Gas & Electric Stanley T. Skinner 1,041,380 Enova Thomas A. Page 964,577 DWP ? up to 238,366

*--*

Source: Companies

Note: Enova is the former San Diego Gas & Electric, Pacific Enterprises is the holding company for Southern California Gas, and Edison International is the parent of Southern California Edison.