PANEL DECRIES SCOOTER LOAN COUNCIL CAN'T PULL PLUG ON $2 MILLION DEAL.

Byline: Beth Barrett Staff Writer

A Los Angeles City Council committee recommended Friday that the DWP reconsider extending a $2 million unsecured loan to an electric-scooter company in Hawaii amid new concerns raised by top city officials.

Councilwoman Ruth Galanter's Commerce, Energy & Natural Resources Committee sent the recommendation to the council for consideration Tuesday. If the council disapproves of the loan, it cannot act on its own; it can only ask the Department of Water and Power to reconsider the deal.

In a report to the committee, Chief Legislative Analyst Ron Deaton said Personal Electric Transports Inc., based in Kailua, got the loan without any competition, without providing specifics about proposed new jobs and without evidence it could repay the money.

``The loan would be unsecured and an analysis of the loan documents provide no evidence that PET has the capacity to repay the loan,'' Deaton wrote.

Galanter was joined by Councilwoman Janice Hahn in sending the recommendation to the council. The other committee member, council President Alex Padilla, was at another meeting but has serious concerns about the contract, a spokesman said.

``I don't think the city is protected in the deal,'' Hahn said, adding that the deal might be restructured if the DWP is ``wedded'' to PET.

The PET plan has been promoted by the DWP's union, International Brotherhood of Electrical Workers Local 18, and backed by Mayor James Hahn, Janice Hahn's brother.

Deputy Mayor Matt Middlebrook said the mayor continues to support the proposal, despite concerns by other city officials.

``It has the opportunity to provide good-paying jobs for clean technologies right here in Los Angeles,'' Middlebrook said.

DWP Chief Administrative Officer Frank Salas said the utility still plans to move forward with the loan.

PET's CEO, Tony Locricchio, did not return calls.

Assistant legislative analyst Gerry Miller said PET has no other funding commitments as it seeks to develop electric scooters with ``smart'' removable battery packs that could be quickly exchanged at stations run by a utility or private company.

Locricchio told the committee Monday that engineering giant Bechtel Corp. had a major involvement in the quick-change system.

According to the city's tape of that meeting, Locricchio said: ``The ratepayers are not paying, in effect, for the quick-change system development. Bechtel is probably spend (sic) $800,000 to $1 million. They'll be reimbursed only about $200,000 of those expenses, so their involvement is major.''

Locricchio added that Bechtel ``would not agree to taking over the whole thing,'' because PET insisted the bulk of the work be done in Los Angeles.

``Are they putting anything into it?'' Galanter asked.

``They're putting about $600,000 to $800,000,'' Locricchio said.

But Andrea Dravo, manager of marketing and public affairs for Bechtel Telecommunications and Industrial, a unit of Bechtel Corp., in Frederick, Md., said the company was not investing in the PET project, and would participate only if it were paid to provide services.

``We're not an equity investor or a financial backer,'' Dravo said in a phone interview Friday.

In a letter sent to Padilla on Friday, Locricchio wrote that PET would hire Bechtel if it got funding for the project.