A ‘Greener’ DWP
The Department of Water and Power, never a nimble marketer, has surprised businesses and environmentalists with a clever plan to ask customers to pay a small surcharge to finance new “green power” generation. The strategy behind “Green Power for a Green LA” is to persuade Angelenos to back renewable energy--generated by windmills, solar cell collectors, biomass or hydroelectric plants--and reduce electricity consumption by switching to more efficient appliances.
This is the latest move of DWP General Manager S. David Freeman’s moves to transform the bloated, inefficient and surly municipal utility into a competitive business. Since September 1997, when he took the job, the DWP has cut its payroll by nearly a quarter, saving $100 million a year, and shaved $1.2 billion from its $4-billion debt.
But the DWP still lives a sheltered life, charging fixed rates and serving a protected market.
Signing up for green power will add $3 to the bill of the average household, now paying roughly $50 a month.
Those below the poverty line will not pay the surcharge. The signing bonus includes free energy-saving lightbulbs and “green rebates” on new, more efficient appliances.
The DWP reckons the energy savings alone will more than offset the program’s cost to consumers. It expects to notify most of its customers of the plan by the end of July.
Spurred largely by environmental concerns, electrical utilities and electricity marketers across the country have been offering “clean energy” to attract customers, especially in states where the utilities have been deregulated.
The Department of Energy, which monitors the trends, estimates that 12% of U.S. electricity is generated by renewable resources, predominantly water.
But unlike other similar programs, the DWP’s plan combines use of green energy with incentives to reduce consumption.
In addition, the DWP says it will invest the revenue from the plan only to generate new sources of green energy, increasing the overall green share of L.A.’s power. It hopes to sell 100 megawatts by 2002, enough to power 100,000 homes.
The DWP boasts that its plan will help clean up the air and make Los Angeles “a greener, more beautiful city.” That’s a stretch.
While 60% of the city’s electricity is generated from coal, the dirtiest of fossil fuels, the plants themselves are hundreds of miles away in Utah and Montana. Still, the DWP’s marketing plan convincingly promotes the use of renewable energy. The Dodgers and the Robinson May Department Stores are among the first corporate clients, and environmental groups strongly endorse it. It is at least another step in the right direction for the DWP.
