DWP'S GREEN SCHEME CUSTOMERS WHO MAKE POWER WILL PAY MORE.

Byline: Lisa M. Sodders Staff Writer

Despite mandates to boost renewable power sources, the Los Angeles DWP gives the Los Angeles Unified School District a discounted rate to delay its alternative-energy program and plans to charge other large customers more for generating their own electricity, the Daily News has learned.

Beginning in January, the Department of Water and Power will charge a new fee to the Los Angeles Community College District and nearly a dozen other unidentified customers that generate a portion of their own electricity, officials said.

``The fact of the matter is, they do not want you to self-generate,'' said Tony Fairclough, an engineering management consultant for the college district. ``They want to appear to be 'green,' but they want those dollars.''

But officials with the municipal utility say the new rate schedule will cover the costs of providing back-up power in case the customer's self- generating system fails.

``Our reason for doing this is not to make it less attractive to do co-generation,'' said Ron Deaton, the city's former chief legislative analyst who took over last fall as general manager of the DWP.

``If you're going to hook up to our system, we have certain costs that we have to bear in order to pick up your load. We don't think it's fair to the rest of the customers for one group not to pay those costs.''

DWP officials also insist the utility is committed to meeting the so-called Renewable Portfolio Standard, which calls for increasing renewable power from just 5 percent of the city's energy mix now to 13 percent by 2010 and 20 percent by 2017.

Henry Martinez, DWP chief operating officer for power, said the utility is seeking proposals for renewable-energy projects and is also considering producing some alternative energy itself.

But the new rate has infuriated customers, some of whom have received millions in grants from the DWP and other entities to install generators, solar panels and other alternative-energy equipment.

After getting permits from the DWP, the Community College District installed four microturbines at Los Angeles City College and four at Valley College, with the goal of generating the electricity needed to provide air conditioning and heat the pool at the respective campuses.

``They've been there for 18 months, and we can't switch them on or we'll be hit by a bigger bill than just using the DWP's power,'' said Fairclough, who is being paid approximately $8,000 a month to manage the engineering and technical details for the district.

``They're changing the damn goal posts so many times, we don't know where we are.''

Los Angeles Mayor Antonio Villaraigosa, who called for more ``green power'' in his inaugural address just a month ago, said through an aide that the situation ``defies common sense.''

``The DWP should be doing everything possible to promote the production of renewable energy,'' spokeswoman Janelle Erickson said.

``(Villaraigosa) has made the greening of Los Angeles one of his priorities and believes the DWP should be leading the nation on green power.''

While the DWP refused to say which customers would be affected by the higher rate, Los Angeles County officials say they have been notified they'll have to pay more for the 30 megawatts it generates for several county buildings downtown and at Olive View Medical Center in Sylmar.

Howard Choy, with the county's energy division, says he's asked the DWP for more information but hasn't yet heard back from anyone.

And in separate action, the LAUSD signed a contract with the DWP in 1997, agreeing not to pursue any alternative energy plans until 2008 in exchange for a 5 percent discount on its standard rates.

But the district has formally asked the utility to waive that provision of the contract so it can include alternative-energy equipment as it plans a $14 billion school construction program.

``They didn't respond to us,'' said Ken Davis, the school district's energy and utilities manager.

The DWP refused to discuss the LAUSD contract, citing an ongoing lawsuit with the district, the county and other entities over allegations they'd been overcharged millions for electricity since 1990.

But Los Angeles City Councilman Tony Cardenas, who chairs the council's Commerce, Energy and Natural Resources Committee, said he introduced a motion in April urging the DWP to invest more money in clean energy.

``In the spirit of that motion, I am going to support amending the contract (with the LAUSD), which will allow our school district to build more environmentally sound classrooms,'' Cardenas said. ``However, we must also analyze the impact of this on the rest of the city's ratepayers, because DWP will have to supply energy to these schools if their technology fails.''

The DWP isn't the only utility to struggle with ``going green.''

Scott Tomashefsky, senior adviser to the chairman of the California Energy Commission, said standby or backup charges are something that utilities statewide are struggling with.

``A lot of the standby tariffs have killed a lot of projects,'' he said.

Under the complicated rate structure that will take effect in January, a community college campus that used 1,800 kilowatts of power, but generated 180 kilowatts of its own, would pay a distribution charge of $5 per kW on the total 1,800 kW amount, plus a charge of $5.99 on the 1,620 kW purchased from DWP.

If the DWP supplied all the power, the rate would be a flat $8.25 per kW, and the total bill about $3,300 less, Fairclough said.

Matt Petersen, president and CEO of Global Green, an environmental advocacy group, said it's not surprising the DWP would balk at a large entity wanting to generate its own power.

The DWP is ``a bureaucracy set up to provide consistent revenue for the city. They look at solar with a great deal of caution, and anything they don't own, they have a bias against it,'' Petersen said.

The DWP in fiscal 2005 transferred nearly $250 million to the city general fund.

Deaton and others with the DWP said that the municipal utility charges far less for electricity than Southern California Edison, which supplies power to three of the nine LACCD campuses.

But LACCD officials say they see substantial cost savings with SCE with each kilowatt they generate on their own. The DWP may be cheaper overall, even with the new rates, but they object to seeing their costs increase as a result of generating their own power - by as much as $200,000 a year if the district reaches its goal of 10 percent self-generation.

The college district plans to ask Villaraigosa to intervene but also is considering other options.

``We have even considered running the new (satellite) campus at Atwater without DWP involvement,'' by self-generating all the campus' power with solar and natural gas, Fairclough said. ``We can disconnect from DWP and they get nothing.''

Lisa M. Sodders, [phone]

lisa.sodders(at)dailynews.com

GREEN POWER PROGRAM

The Los Angeles Department of Water and Power launched its Green Power Program in 1999, with the goal of developing or purchasing renewable energy in the form of hydropower, biomass energy, solar power, wind energy and geothermal energy.

The program is funded through a voluntary premium paid by customers who want to support the program. In 2003 - the most recent figures available from the DWP - that included 367 commercial customers and 29,310 residential customers. The program collected $2.8 million that year and spent approximately $900,000, which included the purchase of 9,000 megawatt-hours of wind energy.

According the utility's 2003 report, customers generated 94,000 megawatt-hours of renewable energy, enough to power 15,000 homes for one year. By using renewable sources, those customers also avoided producing 162 million pounds of greenhouse gases that would have been generated by more conventional power means, utility officials say.

- Lisa M. Sodders

CAPTION(S):

photo, 2 boxes

Photo:

Pierce College produces 35% of its own electricity with photovoltaic cells in parking lots and microturbines. Under new rates taking effect in January, the college will pay nearly $50,000 more for power than if it purchased all its power from the DWP.

Michael Owen Baker/Staff Photographer

Box:

(1) MORE GREEN TO GO GREEN?

SOURCE: Tony Fairclough, LACCD engineering management consultant.

Gregg Miller/Staff Artist

(2) GREEN POWER PROGRAM (see text)