DWP board approves reduced $2.4 billion utility budget.

LOS ANGELES--(BUSINESS WIRE)--June 18, 1996--The Los Angeles Board of Water and Power Commissioners Tuesday approved a $2.4 billion budget for fiscal 1996-97 that reflects continuing cost-cutting measures and staffing reductions in anticipation of a competitive marketplace in the utility industry.

Board President Dennis A. Tito said the new Department of Water and Power budget is $98 million less than the fiscal 1995-96 budget, representing significant progress in transforming the DWP into an efficient, customer-focused utility ready to compete in an open market.

"New priorities in strategic marketing and enhanced customer service programs that are focused on building relationships with existing customers are being funded through cost containment efforts and savings achieved through reduced staffing levels," Tito said. "During the budget year, there will be no rate increases for either water of electric services, and there will not be a need to sell electric revenue bonds to support the energy services capital program."

Tito said DWP staffing levels for 1996-97 will be 840 positions less than the 1995-96 budget authorized.

For the $2 billion energy services budget, $70 million in reductions are made possible by cuts in the capital and operating and maintenance expenditures programs.

Although the reduced capital budget reflects substantial cuts for electric generation, transmission and general facilities areas, 60 percent of the remaining capital program will be used to provide improvements to the electric distribution system. These betterments include strengthening the distribution system infrastructure and improvements for new business. The 1996-97 energy services budget totals $231 million for capital improvements and $503 million for discretionary operating and maintenance work.

The $466 million water services budget includes a $21 million increase, to $175 million, in capital spending for water quality, water reclamation and to improve the distribution system. Major capital expenditures in the budget include $26 million for distribution mains improvements, $15 million for services and water meters, $34 million for the cement lining of mains, and $32 million for water quality improvement projects at three reservoirs.

In the following four years, the water capital program is expected to increase by $40 million to $90 million a year as the DWP complies with surface water treatment rules at its major Los Angeles area reservoirs.

For 1996-97, the DWP anticipates it will provide a $117 million transfer to the city from electric and water sales, an increase of $6 million over the current year.

CONTACT: Department of Water and Power

Ed Freudenburg, 213/367-1382