DWP Debt Tied to Utah Power Plant

Re “DWP Debt Tops $7 Billion; City Sees Fiscal Threat,” Nov. 16:

How does a public monopoly with no competition drive itself $7 billion in debt and why are taxpayers the last to know? The DWP, with its $2.4-billion budget and 9,000-person work force, is a case study in government’s inability to deliver essential services. Its determination to keep its financial condition a secret borders on criminality!

The DWP has been fostered by decades of political incompetence that supported sweetheart deals for energy and massive capital construction that could have been delayed until after deregulation takes effect. Why is it that the Intermountain Power Project has been insulated from public scrutiny? Why have Mayor Richard Riordan and the City Council abdicated all public authority from an agency that is completely out of control? How can Los Angeles knowingly enter into agreements to purchase electricity “regardless of price” for the next 30 years? Why would DWP pay above-market prices for the coal that fuels this facility while repaying debt service for its very construction?

NICK ANTONICELLO

Venice

* I worked in the coal industry for nearly 18 years. When a utility invests the type of money required for a mega-power station such as IPP, it’s important to secure a long-term source of supply for the fuel. Coal-fired boilers are designed for the type of coal to be used. (Not all coals are alike, unlike other fuels used for electricity generation.) Utilities secure the coal via long-term contracts where quality and quantity guarantees are made in exchange for a specified price. Contract prices and escalation terms, as well as reopener clauses, are negotiated. If the price currently paid by IPP exceeds the spot market price, this is not necessarily a reflection of gouging by the supplier.

How would the people of Los Angeles feel if there had been no long-term coal contract and IPP was unable to supply the power plant and therefore no electricity to the city?

DEBBIE TYBER

Palos Verdes Estates

* If what you’ve uncovered is true, this is grand theft on a scale not seen since the S&L; bailout! It means every DWP customer has been overcharged for years simply because the DWP was (is) a monopoly with no choice for its users but to pay whatever extortion it demanded! Further, it could abuse its power by making bad deals, with incompetent man- agement that was obviously overpaid, bloated payrolls, etc.

Now will it suddenly act fiscally sound and be competitive? Lower rates? Is no one, retired or otherwise, accountable for this mess? Could we not look at some of those fat pensions?

FRANK BRUNNER

Northridge