DWP'S FREEMAN TO TAKE STATE JOB.

Byline: Troy Anderson Staff Writer

The general manager of the Los Angeles Department of Water and Power plans to resign as early as next month to manage the newly created California State Power Authority, city officials said Monday.

S. David Freeman, who served as lead negotiator for the state's purchases of power during the current energy crisis, is expected to head the Sacramento-based agency the Legislature will create to ensure a supply of electricity.

``Our Department of Water and Power is in good shape right now, and I am confident that we will keep it that way through the leadership transitions under way both in the department and in city government as a whole,'' City Councilwoman Ruth Galanter, chairwoman of the council's Commerce, Energy and Natural Resources Committee, wrote Monday in a letter to council President John Ferraro.

``Due to the urgency of getting the new power authority up and running, Mr. Freeman may resign his current position as early as next month and certainly before July 1,'' Galanter wrote.

Gov. Gray Davis announced Monday that Freeman will resign from the DWP to serve as the governor's chief energy adviser and lead the drive for new energy conservation programs. But, Davis made no comment about Freeman's role with the State Power Authority, and Capitol sources indicated he was unlikely to do so until the Legislature actually creates the agency.

Freeman could not be reached for comment.

State leaders envision the Power Authority as an agency that would pay for and even build power plants and probably would own and expand the state's power transmission lines. It would ensure a surplus of electricity in California, but the costs would be higher than in many other states.

Freeman has argued that the proposed Power Authority is the only way to get power plants built and paid for and end the state's power crisis.

The city's DWP and other municipal utilities were exempted from the state's faulty deregulation plan and have been spared the worst effects of the crisis.

Deputy Mayor Ben Austin said Los Angeles residents can rest assured they have an affordable and secure source of power.

``If the city of Los Angeles can be helpful in allowing Mr. Freeman to go to Sacramento, we very much want to help our neighbors,'' Austin said. ``We would wish Mr. Freeman well.''

Meanwhile, Austin said Mayor Richard Riordan and Freeman will announce today a major energy rebate plan for the ratepayers of Los Angeles.

``The Department of Water and Power is in very good shape now and we're in a position to offer a rebate to taxpayers,'' Austin said. ``We want to do it in a way that encourages conservation.''

Freeman, 75, a native of Chattanooga, Tenn., has been general manager of the DWP, the nation's largest municipal utility, for the past three years.

He developed a plan to reduce the DWP's billions of dollars in debt for its power generation facilities by 2003. During the current crisis, the city has been selling surplus power to the state.

Known for his trademark Stetson hat, Freeman ran unsuccessfully for the state Assembly in 2000.

He served as president and chief executive officer of the New York Power Authority from 1994 to 1996. An engineer and lawyer by training, he also served as an energy adviser to President Carter and was head of the energy policy staff in the White House Office of Science and Technology.

He began his career in the electric utility industry as a civil engineer at the Tennessee Valley Authority, designing steam generating stations and dams. He later worked as a TVA attorney.

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Photo: FREEMAN