Assembly’s GOP Urges Resignation of Power Chief

Assembly Republicans called Thursday for the resignation of S. David Freeman, the former general manager of the Los Angeles Department of Water and Power who now heads the state’s new public power authority.

The lawmakers cited a recent audit, detailed Monday in The Times, showing the DWP’s profits on sales of electricity to other utilities averaged 56% last year. That is much higher than the 15% return DWP officials have for months said they earned.

“We have significant concerns about the role of Mr. Freeman during this energy crisis and the new powers given to him by your appointment,” wrote 27 Assembly members in a letter to Gov. Gray Davis.

Freeman had assured U.S. senators in a July letter that the city utility limited its markup on power sold to 15%.

“It’s just unacceptable to have a public official who is not forthcoming with information on a timely basis and information that is not accurate,” Assembly Minority Leader Dave Cox (R-Fair Oaks) said. “Public officials are not entitled to the hyperbole Mr. Freeman has engaged in.”

Davis spokesman Steve Maviglio dismissed the Republicans’ letter. “They’re upset because Dave Freeman blew the whistle on [former Los Angeles] Mayor Riordan, who was ripping off California,” Maviglio said.

Richard Riordan, a Republican, is exploring a run for governor in 2002.

As a publicly owned utility, the DWP decided not to participate in the market California created in 1998 to replace state regulation of electrical utilities. When prices in that fledgling market began to soar in May 2000 and demand outstripped supply, the DWP sold surplus electricity to Pacific Gas & Electric and Southern California Edison through the market.

In January, when those private utilities became too loaded with debt to continue buying electricity, the DWP sold power to the state Department of Water Resources, which had stepped in to keep electricity flowing to PG & E and Edison customers.

Freeman, 75, has headed some of the nation’s largest public utilities. He resigned from the DWP in April to become an energy advisor to Davis. In August, the Democratic governor named Freeman to head the newly created Consumer Power and Conservation Financing Authority, charged with guaranteeing that California always has at least 15% more power than it needs.

Though Freeman’s appointment is subject to Senate confirmation, he can serve a year as chairman of the public power agency without confirmation. He could not be reached for comment Thursday.

The DWP’s role during the state’s electricity crisis promises to be partisan fodder in the next race for governor.

Republicans accuse Freeman of gouging the state when he ran the DWP, while Democrats say Freeman was under pressure from Riordan to charge the highest prices possible.

“It is very public knowledge that Freeman actually argued for Los Angeles not only to make some accommodations in price, but he also offered a direct deal between DWP and San Diego to help San Diego ratepayers at the height of the crisis,” said Sen. Steve Peace (D-El Cajon), an architect of California’s electricity deregulation.

“It was then that Riordan stepped in and said . . . we’re going to make as much money as we can.”

Jaime de la Vega, an advisor to Riordan, said the former mayor was concerned that DWP not get too far into debt with Edison and PG & E.

But Freeman set the policy on price, he said.