Burbank Water and Power to team up with LADWP

For 36 years, the Southern California Public Power Authority has brought together various cities to work on energy projects. Now Burbank Water and Power and the Los Angeles Department of Water and Power want to form a new joint powers authority to do the same for water projects.

The Burbank City Council unanimously voted Tuesday to allow its public utility to team up with LADWP to create the Southern California Public Water Authority in an effort to work with one another on joint water projects or to issue rate reduction bonds, said Bob Liu, chief finance officer for BWP.

Rate reduction bonds are bonds that usually have a higher rating, which typically result in lower interest rates, Liu said. He added that the city already has AAA-rated bonds — the highest grade of bonds — for water bonds. However, he said, it would be good to have access to rate reduction bonds should the city’s utility be downgraded by rating agencies.

“Even without rate reduction bonds, it’s a great foundation to have,” Liu said. “[Southern California Public Power Authority] did this about 35 years ago and at that time, they probably didn’t realize how great an asset they would be.”

Burbank has been involved with the Southern California Public Power Authority on the city’s agreement with Hoover Dam, the Palo Verde Nuclear Power Plant and in accessing wind farms and solar plants.

“These are all great projects from SCPPA and these projects help keep our power costs down,” Liu said.

Though the joint powers authority will initially include Burbank Water and Power and the Los Angeles Department of Water and Power, City Manager Ron Davis said that neighboring cities or other interested agencies may join later down the road.

Councilman David Gordon expressed concern about the financial risk the city would be taking being in a joint powers agency with the Los Angeles Department of Water and Power.

Liu said that the city would be spending between $20,000 and $50,000 to start the joint powers authority with LADWP. There would be minimal costs to maintain the agency and no liabilities to the city unless it is involved in a project, according to a city staff report.

Davis explained to Gordon that like the projects that come forward to the dais that involve the Southern California Public Power Authority, all the benefits and risks would be vetted on a project-to-project basis.

“We come to you and talk about the unique nature of each project, its risks, what’s in it for Burbank and why should we do this deal,” he said.

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Anthony Clark Carpio, anthonyclark.carpio@latimes.com

Twitter: @acocarpio