Island on the Grid

In the lobby of the 15-story downtown headquarters of the Los Angeles Department of Water and Power, a large digital scoreboard--powered, of course, by electricity--keeps track of the utility’s campaign to erase a debt that three years ago exceeded $4 billion. The number changes constantly, and always in a downward direction. On Thursday afternoon, it was possible to watch the debt tick down in just one minute from $1,367,878,800 to $1,367,877,900--$15 a second.

The goal, as the sign proclaims, is for DWP to be “debt-free by ’03.” Should current trends hold, that target could turn out to be conservative; while the state’s two big investor-owned utilities flirt daily with bankruptcy, the city agency that provides electricity and water to Los Angeles finds itself flush by comparison. No threats of rolling brownouts. No rate increases in the works. Plenty of power to go around, with enough left over to sell to other utilities in what is decidedly a seller’s market.

Since December the department has been issuing daily “energy updates” to journalists, and between the bare-bones lines of these bulletins one can almost detect the sound of crowing. Consider these chipper passages, lifted from the update issued Monday:

The state has extended the Stage 3 alert for the 28th consecutive day, and the Los Angeles Department of Water and Power continues to provide surplus energy to California. . . .

And:

The rolling blackouts from power shortages that have occurred in other parts of California will not be felt by DWP customers. . . .

And:

While electric rates have increased for some utilities in California, Los Angeles city residents continue to enjoy stable rates that have remained unchanged for nine years.

And have a wonderful day.

*

To amend Helen Hunt Jackson’s enduring description of the city, L.A. today finds itself an island, not on the land, but on the grid. This is remarkable in a couple of ways. For one thing, going into deregulation, the DWP often was derided by energy experts as the sort of slow-moving, bloated and witless public power bureaucracy that would not survive in the free market jungle. As Eric J. Tharp, a DWP assistant general manager, recalled: “Five years ago people were saying . . . we would be the first casualty of deregulation.”

This has not proven to be the case. There are reasons. What is called the electricity crisis in large measure is a natural gas crisis. Tight supplies and highly inflated prices of natural gas, the fuel used to power a large percentage of California’s generating plants, have driven production costs sky high. The DWP obtains enough electricity from coal-burning, hydro and nuclear plants to service the city without relying on natural gas plants. When it did fire up a gas-burning plant last week in peak hours to provide emergency power to the state, the cost was so high that the utility found itself accused of gouging.

Of course, the fundamental reason that the DWP has avoided the current miseries is that it chose not to play the deregulation game, period. It opted out of the markets established as part of the California deregulation plan. It did not sell off plants. It extended its long-term contracts with power suppliers. Moreover, a few years back, it launched an aggressive campaign of cost reductions, with widespread layoffs and other cutbacks. And it laid plans to expand its electricity supplies, whittle down its rates, eliminate its debt. Whether by blind luck or keen foresight, the DWP stocked the island well for the coming storm.

*

Beyond the nuts and bolts of energy, that Los Angeles would find itself floating free of the electricity mess--home gas bills are another matter, going up, up, up everywhere--is noteworthy as well in a cultural context. L.A. typically tends to be first in line for any major California plague. Sprawl, smog, gangs, school decay, the divide between rich and poor--the city has stood at ground zero in all these and more.

To Californians who live north of the Tehachapi range or south of the San Gabriel River, Los Angeles often appears to be a teeming monument to urban failure, shorthand for the wrong path taken. For example, no planning commission meeting or school board session in the Central Valley is complete without someone standing to shout the alarm: “We don’t want to become another L.A.”

Now, this fear frequently is rooted more in reputation than any informed understanding of L.A. One thing Lodi does not have to worry about is becoming another Los Angeles. The Getty, the beaches, Hollywood--none of these will be relocating to Ripon any time soon. All that aside, there is no question that the energy crisis has provided a wonderful departure from the standard script. This one they can’t blame on La La Land. For once, the locusts have spared Los Angeles. $1,367,877,885. $1,367,877,870. $1,367,877,855. . . .