Edison Pitches for DWP Partnership
Edison International on Friday finally made its first detailed case to the Los Angeles City Council as to why it, and not Duke/Louis Dreyfus, should be the Los Angeles Department of Water and Power’s strategic partner.
Speaking before a council subcommittee hearing, Edison Chief Executive John Bryson promised that his team of Edison and NGC Corp. would guarantee DWP with a minimum of $30 million in profits from energy sales over three years, more than the $18 million minimum promised by Duke/Louis Dreyfus.
NGC, a Houston-based natural gas marketer, would help manage DWP’s wholesale energy sales while Edison would help DWP in retail energy sales, Bryson told the committee. The alliance would be only a first step in a “longer term, more comprehensive relationship” between DWP and Edison, he said.
Earlier this month, the DWP’s commission approved an alliance with Duke/Louis Dreyfus, a power marketer based in Wilton, Conn., to help DWP sell off its vast excess power capacity and develop more sophisticated and efficient power services for its residential and commercial customers. Outside partnerships are seen by the DWP and its consultants as vital if the nation’s largest municipal utility is to compete effectively when the state opens up the power market to free competition starting next January.
The Duke/Louis Dreyfus alliance is now being considered by the City Council, which could vote in early April.
Rosemead-based Edison has mounted an intense lobbying campaign to derail the alliance, but until Friday had not gone public with specific terms of a partnership. Edison says an alliance makes geographic sense but some DWP and city officials see Edison’s opposition to Duke/Louis Dreyfus as an effort to keep a powerful competitor out of its market.
In any case, Edison’s offer could complicate the DWP’s eight-month search for an ally. For Edison’s proposal to be considered, the city would have to reject Duke/Louis Dreyfus and then issue another request for proposals, a process that could take several months more, assistant city attorney Thomas Hokinson said Friday.
City Council member Ruth Galanter, who chairs the subcommittee, said Edison’s offer was “pretty last minute.”
Edison maintains that it was unfairly excluded from the competition to be DWP’s partner when the city issued a request for outside partner proposals last spring. The request for bids effectively excluded Edison and Pacific Gas & Electric because the city then feared that a combination with either would be too large to pass regulatory scrutiny.
