CAN 'VISIONARY' FREEMAN FIX POWER WOES?

Byline: Rick Orlov Staff Writer

Hidden beneath the Stetson hat, cowboy boots and ``aw shucks,'' good ol' Tennessee country boy manner of S. David Freeman is a shark, admirers say. Or a rattlesnake, critics add.

With a lawyer's cunning, an engineer's attention to detail and the expertise of a man who spent most of his 74 years running power utilities and developing energy policy, the head of L.A.'s Department of Water and Power is, by all accounts, the right choice to be Gov. Gray Davis' lead negotiator in finalizing contracts critical to solving the state's energy crisis.

``The governor couldn't ask for a better guy to do what they're asking of him,'' said Councilwoman Ruth Galanter, who first recommended Freeman to Mayor Richard Riordan for the DWP post.

``The rest of the utility guys won't be able to flim-flam him. He's going to know when they they're telling him something that makes sense.''

Freeman was named DWP general manager four years ago when it was saddled with $4 billion in debts and facing deregulation. He saw his options as bankruptcy, selling off its huge and costly excess generating capacity or a miracle.

A miracle is what happened.

The DWP avoided bankruptcy, ducked deregulation and its surplus generating capacity has yielded such huge profits as energy shortages have worsened that its debt has been cut in half and should be eliminated in two years or so.

Rates charged customers in Los Angeles are stable and even likely to be cut, and the city will stand as an island of energy plenty in a state of shortages for years to come.

Freeman has not been shy about taking credit for protecting low prices and providing regular service in Los Angeles.

On Wednesday, Davis named Freeman to a 30-day assignment to help the state negotiate long-term contracts with energy suppliers to solve the immediate power problems facing the state and try to develop a long-range approach to deal with future problems.

The state got 39 bids averaging 6.9 cents per kilowatt hour and must whittle down that figure so Davis can keep his promise not to raise rates to the 25 million Californians affected by the energy crisis.

Like many others who have done business with Freeman, Mayor Richard Riordan is of two minds about the DWP chief: He credits Freeman with saving the DWP, although the two have quarreled in recent weeks over the decision to sell nearly $200 million of electricity on credit to private utilities teetering on the brink of bankruptcy, and doing so at a price that is a fraction of what other energy suppliers are getting.

Still, the mayor supports Freeman taking on his negotiating mission for Davis, in part because he will be able to make sure the city is repaid for the excess energy it has sold and help protect the city's interests that the governor and Legislature might otherwise sacrifice to escape from the current crisis.

``The mayor has said he wants the city to do all it can to help the state resolve this crisis,'' Deputy Mayor Ben Austin said. ``We have a moral obligation to the state. If lending David Freeman to the state for a month or so (will) resolve this, we are perfectly happy to do so.''

A harsher view of Freeman is cast by those who feel he snookered them in negotiations - and reneged on his promises.

Brian D'Arcy, business manager of the International Brotherhood of Electrical Workers, Local 18, negotiated with Freeman the elimination of 3,000 of the union's 8,000 DWP jobs and has dealt with him often in the years since.

``He'll do fine with this,'' D'Arcy said. ``David has the credentials for this kind of thing. He's a visionary when it comes to this. But his forte isn't being a manager.''

D'Arcy recalled that Freeman and Riordan were eager to sell off the DWP's power plants at the time deregulation was being threatened.

``It was the unions that went up to Sacramento and threatened to kill that bill unless municipal utilities were exempted,'' D'Arcy said. ``Everyone seems to forget that now when they're falling all over themselves to take credit.''

D'Arcy said Freeman broke a pledge to the union leader during negotiations several years ago that resulted in the loss of 3,000 of his union's then 8,000 DWP membership. With City Council support, D'Arcy overcame Freeman's objections and won huge payouts for laid-off workers, but eventually paid a price.

`He told me that we would replace everyone after the first 500 left,'' D'Arcy said. ``That never happened. Where I come from, that's called reneging.''

``Visionary'' is the label that has stuck with Freeman over the years.

On the staffs of President Lyndon B. Johnson, President Nixon and the U.S. Senate in the 1960s and '70s, Freeman earned praise for pushing for solar power and alternative energy developments and environmental and safety laws.

Along the way, he has held posts with the Tennessee Valley Authority in his home state and power agencies in New York, Colorado, Texas and Sacramento before coming to Los Angeles.

With trademark white and black Stetsons, Freeman relishes his role in the public spotlight. He can be a smooth-talking Southerner with a bottomless well of charm one moment and a bombastic, plain speaking warrior the next.

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Photo: (color) FREEMAN