$2 MILLION DWP LOAN FOR SCOOTER PROJECT?

Byline: Beth Barrett Staff Writer

Los Angeles Department of Water and Power commissioners today will consider giving a nearly $2 million unsecured loan to a Hawaiian company that has spent a decade trying to develop electric scooters and a network of stations to exchange their rechargeable batteries.

Personal Electric Transports Inc., based in Kailua, is seeking the $1,875,000 loan to develop ``smart'' removable battery packs for the scooters, as well as the exchange stations, which it plans to partially manufacture in Los Angeles and sell initially in overseas markets.

DWP management and its largest union support the proposal.

In late August, representatives from the company, the DWP union, the Mayor's Office and others visited South Africa to explore market opportunities for the three types of scooters in prototype - recreational, one-person and two-person.

``It seems to me this is a lot of wishful thinking and nothing very real,'' Councilwoman Ruth Galanter, who went on the South African trip, said Monday.

``As far as I can see, there's no market and no marketing program. There's nowhere in the world where a recharging network is in anyone's plans.''

Galanter said there were no utility company representatives during the meetings in South Africa, though she said PET officials told her they were seeking one.

The impetus behind the proposal seems to be union pressure on the Hahn administration to create jobs, she said.

``They believe the jobs will materialize. I don't know why they believe it,'' said Galanter, who chairs the council's Commerce, Energy & Natural Resources Committee. ``As a ratepayer, I want to know, and everyone in Los Angeles should know if DWP is throwing money at a company, it's doing so for some benefit.''

Galanter said if the commission approves the loan, she'll invoke a new charter provision that with 10 council votes would allow the council to examine the loan, and potentially force the DWP to reconsider it.

In a Dec. 18 letter to the DWP commission seeking approval of the loan, General Manager David H. Wiggs and Assistant General Manager Thomas C. Hokinson said, ``There is no security for the loan.'' Randy Howard, the DWP's director of corporate communications, said the DWP's involvement is part of ``our commitment to economic development and job creation in the city.''

``DWP has a very active electric transportation program,'' Howard said. ``We continue to look at new technologies that are available for public transportation.''

Repaying the loan

PET's CEO, Tony Locricchio, said Monday that the three-year loan would be repaid, and that the security for it is the several million dollars' worth of design work the company has already invested in the prototypes.

The city would benefit, he said, because the company has committed to hiring local labor at union rates.

Eighteen workers would be employed in the first 15 months, and 150 within 5 1/2 years from the start of the project, according to DWP documents.

Locricchio estimated a labor force of up to 1,700 workers eventually. The company's eight managers on the project would be exempt from the union requirements, he said.

``We're trying to use American labor to compete with the Chinese.''

The DWP was approached because of its capabilities for recharging the vehicles' batteries and other advantages. Initially, PET plans to market mainly overseas, as it is optimistic recharging facilities will be built in other countries.

``Our concern is global warming,'' Locricchio said.

``You need to involve the utilities. They will become the Standard Oil of the future. They have resources; they can charge (vehicles battery packs) at night, which you can't find elsewhere. They keep their generators going and can recharge very inexpensively.''

Locricchio and International Brotherhood of Electrical Workers Local 18 - whose representatives joined PET and city officials on the South African trip - have teamed up before.

IBEW members workers rode the PET scooter in last year's Tour de Sol, an East Coast race that showcases alternative-fuel vehicles, for example.

IBEW officials could not be reached for comment Monday.

Locricchio said he met with several members of Mayor James Hahn's staff weeks ago at City Hall.

Officials in the Mayor's Office could not be reached on the Martin Luther King Jr. holiday.

The DWP commission took up the proposal Dec. 3. It was not immediately clear what action was taken and why it was being considered again.

3 scooter models

Locricchio said his company has developed eight prototypes but has not gotten beyond that stage. There are three scooter models proposed under the current L.A. project, though larger vehicle prototypes have been developed.

The company feels its breakthrough prototype, which the loan would help develop, is the ``smart'' removal battery pack, which would allow for the proper billing of customers as they dropped off their battery packs and picked up new ones. The batteries exchanged at either private or utility- operated ``quick change'' stations would eliminate the wait for a recharge.

Each pack weighs about 100 pounds and would be rolled to and from the scooters or vehicles.

``We need to make the power pack smart ... the hardware and software. It's a major piece of work,'' he said.

Locricchio said about $200,000 would go a a subcontractor to help develop the stations, which would first be tested in Los Angeles. He declined to provide specifics before the commission acted.

Locricchio said he anticipated initially leasing factory space in Los Angeles if the project goes forward.

``We have a budget all worked out, but I don't have the figures in front of me. I don't want to guess for publication,'' he said.

``We're getting a relatively small amount of money from Los Angeles,'' he said. ``(We'll) need a great deal more money to pull it off.''

Locricchio said additional funds would come from various suppliers in private enterprise. He said the company could have done the prototype work with private funds, but that local residency and union wage requirements make it more costly.

Locricchio said only partially assembled scooters would be shipped from Los Angeles to avoid the high duties on fully assembled ones. Single stand-up scooters are expected to be sold for no more than $700, with two-person scooters at less than $2,000.

Locricchio said he believes that South Africa, Costa Rica and Australia are interested in the scooters and would develop the necessary infrastructure.

Locricchio said the local union also asked for assurances that foreign workers who do the final assembly would be paid fair wages.

``They don't want to be part of an agreement where they'd be ripping them off,'' he said.

In time, prototypes for three-wheel cars and even buses could be manufactured, which could use the removable battery packs in Los Angeles, should the city develop an infrastructure of exchange stations.

And he said other electric-vehicle companies, using the same removal battery packs, would be encouraged to locate to the city.