His Brown-Bag Lunch Was Worth Millions

A bored power plant operator who grabbed a federal code book to read during his lunch break has discovered a loophole in the law that has begun saving Los Angeles residents more than $1 million a year.

Richard Callison was eating a can of chili at the isolated Castaic Power Plant when he stumbled across the fine print in a Federal Energy Regulatory Commission rule book that exempts generating plants such as Castaic’s from paying an annual licensing fee.

Federal officials have already issued a $1.1-million rebate check to the Los Angeles Department of Water and Power for one year’s fee.

Now DWP administrators are trying to win additional reimbursements for past payments made by the Castaic plant--perhaps reaching back more than 20 years.

The heat-and-serve lunch about 1 1/2 years ago that prompted the discovery, meantime, has become known among DWP workers as “Callison’s million-dollar chili.”

Sack lunches and leftovers from home are common lunchtime fare for workers at the plant, located in a remote canyon about 50 miles north of downtown Los Angeles.

“We’re about an hour’s round trip from restaurants in the Santa Clarita Valley. That’s too far to travel,” Callison said. “We don’t have a cafeteria, so we eat a lot of instant, just-add-water food out here.”

Callison, 45, of Saugus, said he usually takes a newspaper to work to peruse during his lunch hour. Other times he reads whatever he can find.

It was desperation time when he pulled the federal code book from his office shelf.

“It seemed at first like a poor choice of relaxation,” he recalled the other day at the power plant, perched on the northern edge of Castaic Lake.

“The more I read through it the more frustrating it was. I should have known better than to pick up a book of federal regulations. It was a lot of left-handed verbiage. And the chili was starting to fight me every inch of the way.”

But Callison dropped his chili spoon halfway through the book.

“There I saw one little clause on exemptions. I reread it 10 times because I couldn’t believe it was so simple. After stumbling through 100 pages of weasel words, it was shocking. We were talking about a real block of money here.”

Leaving his lunch behind, Callison ran into the electric plant’s control room, where co-workers were monitoring power gauges and measuring electricity that the plant’s seven turbines were pumping into the western power grid.

“Look what we’ve got here!” Callison shouted.

Castaic plant chief Robert Bruce said he read and reread the code section that Callison had found and agreed with his plant operations manager.

“We were trying to figure out why nobody else had seen this,” Bruce said.

It turned out that the exemption is an obscure one because it affects few electric plants.

Washington officials routinely collect fees from power plants that are not federally owned but that use water from government dams to turn their hydroelectric turbines. The fees can be waived for plants whose electricity is used for state or municipal purposes and is not sold for profit.

The Castaic Power Plant fits each of those categories. No other Los Angeles plant does.

Familiar to moviegoers as a frequent film backdrop (it portrayed the nuclear plant in “China Syndrome”), it was constructed in 1973 by the DWP to generate power from water cascading between reservoirs created by state-built dams at Pyramid and Castaic lakes.

Adding to the plant’s uniqueness is a feature that allows its turbines to pump water uphill from Castaic to Pyramid at night when electric rates are low. When electric rates are high during the day, the turbines reverse themselves and generate electricity from water pouring downhill from Pyramid to Castaic.

As its electricity is fed into the grid, each kilowatt from the plant is applied to the electricity that the DWP pulls from the network for use by Los Angeles residents and businesses.

DWP administrators said they are examining plant records back to 1973 in hopes of convincing federal officials to repay more money.

“We’re still working on the potential for past collection,” said Charlie Dong, a DWP engineer.

Karen Denne, assistant to the general manager of DWP, said no one is to blame for not noticing the clause that Callison spotted during lunch.

“It’s not as obvious as people think. The regs are incredibly complex” and open to interpretation, Denne said.

She noted that DWP officials had to provide plenty of proof to federal officials before they issued the $1.1-million rebate check.

Callison said DWP officials sent him a photocopy of the federal check to keep as a souvenir.

In June they gave him a $25,000 check to cash.

It was the top prize in last month’s DWP employee suggestion program.