Edison Pitches for DWP Partnership
Making a last-ditch effort to derail the Department of Water and Power’s proposed business alliance with Duke/Louis Dreyfus, Edison International told Los Angeles City Council members Friday that it would outdo the dollar guarantee made by the power marketer if Edison were named DWP’s partner instead.
Edison’s promise to pay $30 million over three years, more than the $18 million minimum put forth by Duke/Louis Dreyfus, is the first hard figure offered by Edison after months of lobbying against DWP’s decision to exclude it from alliance consideration. The DWP commission earlier this month approved a Duke/Louis Dreyfus alliance, which now faces a council vote.
“We will guarantee more dollars to DWP and provide the people of Los Angeles with more products and services,” Edison Chief Executive John Bryson told the council’s ad hoc committee on energy restructuring. “This is a gateway to a longer-term, more comprehensive relationship” than that offered by Duke/Louis Dreyfus, he said.
The Rosemead-based utility’s offer comes as the Council and the municipally owned DWP struggle to wind up an eight-month process that began last spring, when the city issued a request for outside partner proposals that specifically excluded Edison and Pacific Gas & Electric.
The city feared that a combination with either would be too large to pass regulatory scrutiny. But Edison has argued that its decision last fall to sell off 12 power generation plants now eliminates the “market power” aspect of the alliance that concerned the city.
Along with a drastic restructuring to include layoffs, debt reduction and a residential rate increase, outside partnerships are seen by the DWP and its consultants as vital if the nation’s largest municipal utility is to compete effectively in the state’s deregulated power market being phased in starting next year.
Edison maintains that its geographic proximity makes it the DWP’s logical partner. But DWP management and city officials complain that the Edison offer is designed merely to delay the process and bar the entry of a potential competitor in the deregulated energy market. Mayor Richard Riordan asked Edison last summer to submit a proposal in writing, but Edison declined until now.
Assistant city attorney Thomas Hokinson told the subcommittee that it could vote only on whether to approve DWP’s proposed contract with Duke/Louis Dreyfus, a recommendation that would be then passed along to the full council. For Edison’s proposal to be considered, the city would have to issue another request for proposals, a process that could take several months.
