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Los Angeles utility lucked into meeting renewable energy goals, audit says

The Los Angeles Department of Water and Power spent the last four years pushing aggressively toward the adoption of renewable energy without developing a coherent strategy for paying for such fuels, according to an audit released Thursday by City Controller Wendy Greuel.

The 69-page audit found that the DWP clearly tracked its drive to meet Mayor Antonio Villarigosa's signature environmental goal: obtaining one-fifth of the city's power from renewable sources like wind and solar energy by 2010.

The utility did not track as clearly that program's cost, which is ultimately absorbed by ratepayers, the audit said. And it has been helped by a number of factors beyond its control, the controller said.

"While the DWP's unaudited numbers state that they achieved the goal of 20% renewable energy by 2010, it appears that this was likely due more to luck than to strong planning and policies," Greuel wrote. "Our auditors estimate that the DWP only achieved a 20% renewable energy portfolio due to abnormally cool temperatures and higher than expected wind at department-owned wind farms."

Standing next to Greuel at a morning news conference, DWP General Manager Ron Nichols said the utility should not be shy about its success. He brushed aside the notion that the DWP lucked its way into reaching its 20% goal for renewable energy.

"A win is a win," said Nichols.

The DWP's long-range effort for renewable energy was disrupted last year when ratepayers rebelled against a package of rate hikes. No additional rate hikes have been approved since a bruising standoff between Villaraigosa and the City Council over the increases.

In the wake of that fight, the DWP suspended decisions on securing some sources of renewable power, throwing its long-range environmental goals into jeopardy, Greuel said.

State regulators are expected to require the DWP to obtain one-third of its power from renewable sources by 2020. The department has been preparing a long-range plan to meet that goal, a plan that would spell out the rate increases needed.

Nichols, the sixth executive to run the DWP since 2007, said he is not scared of the state's coming renewable energy mandate. And he argued that utility officials learned what it takes to obtain more renewable energy from the process of reaching the mayor's goal.

"Maybe sometimes it might not have been totally pretty," he said, "but we got there."

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