DWP’s Future Under Power Deregulation

The DWP is one of the city’s greatest assets, but Michael E. Tennenbaum (Commentary, April 8) wants to hand it over to private owners, rather than work to maintain and increase its value.

DWP is seeking to supplement its abilities in the areas of wholesale trading, marketing and customer service. The proposed alliance with Duke/Louis Dreyfus currently awaiting City Council approval poses no risk to the department or its customers. In fact, the alliance can only benefit Los Angeles residents and businesses. By enhancing its ability to market its excess generation capacity, DWP will gain additional revenue that will enable it to maintain competitive rates. The retail products and services offered by D/LD will be made available to DWP customers. Energy trading opportunities will not be “siphoned off” to an out-of-state alliance partner because the agreement with D/LD guarantees that the department will maintain its current trading revenue.

Tennenbaum suggests that Edison International has the “market- ing and asset-management capabilities to assist DWP with all its long-term problems.” Edison, with a $6-billion debt, suffers from the same disadvantages as every other traditional utility.

Tennenbaum’s suggestion that the strategic alliance process be reopened to allow consideration of Edison and Pacific Gas & Electric is unwise. DWP is making every attempt to gear up for a competitive market so that Los Angeles customers will benefit. Delay will only worsen DWP’s competitive condition and make it less likely to succeed.

MARCIA F. VOLPERT

Vice President, Board of Water

and Power Commissioners, L.A.

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After reading Tennenbaum’s revealing commentary, I am convinced that our communities are getting shortchanged. I have been following this issue ever since I signed on in support of AB 1890, which addressed the issue of deregulation and restructuring of the electric utilities. I also testified at the City Council’s ad hoc committee on energy restructuring, making the point that this process of determining an alliance with DWP has not been an open one.

The staff’s recommendation to form a strategic alliance with D/LD raises more questions than it answers. For example, why is DWP allying with a company out of state? What impact does this have on jobs, taxes, involvement of local small businesses, etc.? What’s D/LD’s track record? How is it on social and environmental issues? Is there a commitment to affirmative action in hiring and contracting? How much does D/LD depend on nuclear power?

I agree with Tennenbaum’s suggestion that DWP and the City Council reopen the process. Let’s get some community input and some answers to the many questions that are being raised.

WARREN T. FURUTANI

President, Asian Pacific Policy

& Planning Council, Los Angeles