DWP APPROVES SCOOTER LOAN FOR HAWAII FIRM NEARLY $2 MILLION DEAL CARRIES UNCERTAINTY, UTILITY OFFICIAL SAYS.

Byline: Beth Barrett Staff Writer

Los Angeles Department of Water and Power commissioners unanimously approved on Tuesday a nearly $2 million unsecured loan to a Hawaiian company to develop electric scooters and a network of stations to exchange rechargeable batteries.

DWP General Manager David H. Wiggs conceded that the three-year, $1,875,000 loan had ``lots of uncertainties,'' but said Personal Electric Transports Inc., based in Kailua, would be closely monitored. PET initially would get $825,000, and would have to meet performance goals to get the rest.

``There are certainly no guarantees here,'' Wiggs said. ``There is exposure up front.''

Wiggs recommended loaning the money, even though markets are uncertain, there is no existing infrastructure for exchange stations and the company would have to raise other capital.

``It's a reasonable opportunity to create jobs,'' he said, adding that the project has ``strong support'' from labor for the local union work anticipated.

Wiggs said the loan was backed by the department ``in conjunction'' with Mayor James Hahn's office.

He said PET, as a start-up company, needed enough money to give it a reasonable chance to succeed.

Commissioner Mary Leslie said the loan's structure sounded reasonable.

Without further comment, the two other commissioners present, Vice President Dominick Rubalcava and Annie Cho, also voted for it. Absent were President Kenneth Lombard and Commissioner Sid Stolper.

Councilwoman Ruth Galanter said Tuesday she was exploring whether there were 10 council votes to bring the loan before the council, which under the City Charter could force the DWP to reconsider it.

Galanter, who went to South Africa with representatives from the company, the DWP union, the Mayor's Office and others in late August to explore markets for the scooters, criticized the loan approval, saying the DWP was carrying too much of the risk.

``It's one thing to be sharing a risk, but we're assuming the risk and I can't see why,'' said Galanter, who chairs the council's Commerce, Energy & Natural Resources Committee. ``Why should all this be happening on ratepayers' money?''

Galanter said her staff was contacted Tuesday morning by the mayor's staff, and told PET had submitted a more detailed business plan. Galanter said she hadn't yet received a copy.

``I want to know where are they getting the capital to develop this,'' Galanter said.

Officials in the Mayor's Office did not return calls for comment.

PET's CEO Tony Locricchio, who has spent about a decade trying to develop the electric scooters and other electric vehicles, along with the exchange stations, said he was ``pleased.''

``We've been poised to get started,'' Locricchio said. ``The big fear was that we'd lose people who were standing by to work on the project.''

He said the first step would be to nail down contracts with technical experts to develop one- and two-person and recreational scooters, along with the battery packs that range from 10 to 100 pounds.

A commuter vehicle also is envisioned, he said.