$228 Million OKd for New Valley DWP Plant

Salvaging a project to boost local power production, the Los Angeles City Council voted Tuesday to pay a new partnership $228 million to build a plant to replace the San Fernando Valley Generating Station.

When finished in 2004, the plant should produce 500 megawatts, enough to power 450,000 homes, with a savings of $50 million each year from enhanced fuel efficiency and with less pollution, said Enrique Martinez, assistant general manager of the Department of Water and Power.

“This is the first major step in rebuilding the power system for the city of Los Angeles, which needs to be done over the next several years to provide a reliable power source,” Martinez said. The project will replace the Sun Valley plant built in 1954.

Council President Alex Padilla, in whose district the power plant is situated, supported the project based on promises that it would reduce air pollution for neighboring residents.

“Although the capacity of the generating station will increase, the pollutants and emissions will go down,” Padilla said. “It’s good for the San Fernando Valley as a whole because it adds to our stability and reliability of energy services, and we are doing it in a way that is environmentally responsible.”

Padilla asked for quarterly reports on pollution levels and requested that the DWP meet with neighbors to discuss the new plant.

Conceived before California’s energy crisis, the project is part of a plan by Los Angeles to upgrade its power plants, a system that has allowed the city to avoid the blackouts that have hit much of the rest of the state.

The project faltered after a union representing electrical workers complained that the Industrial Co., the managing partner in the team expected to win the contract, did not have a good record of hiring union workers.

When the union threatened to demand arbitration, a process that could have delayed the project by as much as six months, DWP General Manager David H. Wiggs Jr. decided to seek new bids.

The builder, L.A. Power Joint Venture, agreed to a reorganization, in which the Industrial Co. went from managing partner to a minority partner and dropped its interest from 60% to 15%. A subsidiary of Kiewit Construction Group, a firm that hires union workers, assumed managing-partner status, with its interest increasing from 40% to 85%.