Power player: Mary Nichols has impeccable environmental credentials. Now she wants to reform L.A.'s troubled Department of Water & Power.

MARY Nichols, the new president of the Board of Commissioners for the L.A. Department of Water & Power, is overseeing an agency in crisis. After years of contracting scandals and a succession of permanent and interim managers, the DWP suffered a string of recent blackouts that pointed up the agency's inability to adequately maintain both its water and power systems. Nichols gained recognition as head of the state Air Resources Board under then-Gov. Jerry Brown. During her tenure, the board required cars to have catalytic converters and banning lead in gasoline. After a brief stint on the DWP board under former Mayor Tom Bradley, Nichols went to Washington as assistant administrator for air quality issues at the Environmental Protection Agency during the first Clinton administration. Shortly after returning to California, Gray Davis tapped her to be state Resources Secretary. Nichols came back to L.A. to head up the UCLA Institute for the Environment and, now, a return stint on the DWP board.

Question: Given all the problems at the Department of Water & Power, why did you agree to take the commission post?

Answer: This may not seem to be an example of upward mobility after

my time in Washington and Sacramento, but I regard this as the epitome of my career. It puts all the pieces together: my work on the environment, my concern about environmental justice issues and being a steward of valuable resources. At the DWP, I have a chance to put some of this into action, to make Los Angeles the greenest big city in the country.

Q: What's your assessment of the DWP?

A: My first impression was of an agency under a lot of stress. There was an obvious need for setting direction, and I found that the people there welcomed the setting of direction. The DWP is an agency that's now in financial difficulties. We've got to make some decisions and make them fast.

Q: What kind of decisions?

A: There's a need to make new capital expenditures and to look ahead to how we will get our water and energy 20 years from now. But the agency lacks the financial resources to make major new leaps forward and the rates have been frozen for a very long time. Decisions on how and when to seek more revenue are bound to be controversial and have to be weighed against a lot of other factors.

Q: What about the recent blackouts?

A: First of all, I feel personally punished. My neighborhood in the Wilshire Center area has been under a siege of blackouts. Because of changes in the distribution system in the area, every time they replace a frayed wire, it seems the power goes out for a while. The service in all areas needs to be upgraded. It's clearly time to see where we have underinvested and take steps to bring the system up to date.

Q: What about the water system?

A: The key issue for water is that we need more reliable long-term supplies. And I'm not just talking about new supplies from far away. We need to make better use of what we have here already. When and how we're going to be using reclaimed water for landscaping and other non-drinking purposes must be at the top of the agenda.

Q: But the DWP tried that before and faced those "Toilet to Tap" headlines.

A: We have to get beyond this rhetoric. What that's going to take is an education effort, not just by the DWP but also from environmentalists.

Q: The DWP has come under fire for its contracting practices, most recently with the CH2M Hill contract in the Owens Valley that went from $120 million to $415 million in three years. How do you get contracting under control?

A: Previously, commissioners have focused on assuring compliance with minority and women-owned business contracting requirements and on opening up the contracts to small business. While that's good, the commission does need to make sure that the contracts are being executed appropriately.

Q: In the Hahn administration, commissioners were criticized for becoming too involved in contracting decisions.

A: Yes, I agree, there's a concern about commissioners getting too involved in contracts. But as things stand right now, 80 percent to 90 percent of our business in open session is approval of contracts. The commission needs a bigger role than approving pre-cooked recommendations of the staff. We're not here to be a rubber stamp.

Q: The "green power" program has also come under a lot of heat for not having enough power generated from non-fossil fuel sources.

A: We are looking at ways to boost our portfolio of renewable energy sources. We had a big meeting on this just last week and we'll be putting together a plan in the next several weeks. Mayor Villaraigosa has set a goal that by 2010, 20 percent of the DWP's power portfolio will be from renewable sources, like wind and geothermal energy. We need to make some big decisions very quickly.

Q: But won't this cost DWP customers more?

A: Look, right now, DWP customers are paying anywhere from 20 percent to 40 percent lower electricity rates than customers of adjacent utilities. So we do have some room here. But the goal is not to raise rates. The goal is to green up the power supply. We also need to protect ourselves against spikes in natural gas prices--right now, we're too dependent on natural gas for our power generators. All the renewable sources are looking much more attractive right now compared to natural gas.

Q: What's your impression of Mayor Villaraigosa?

A: I supported him in both his mayoral campaigns. He is the only politician I've met--and I've met a lot of them--who doesn't just bring up one set of concerns in front of one audience and another set in front of another. We talked early on--well before the election--about my serving on the DWP and he said he would like me to be the commission president.

Q: What about Gov. Schwarzenegger?

A: I give him a mixed report card. He gets high marks for his leadership on global warming and using his executive authority to cement California as a leader in the fight against global warming. But he deserves a poorer grade for his lack of support of the state's natural resources and for not putting together comprehensive energy and water policies. He also faltered badly when he appointed Cindy Tuck, an industry lobbyist, to chair the state Air Resources Board. I have nothing against Cindy as a person, but the state's top environmental regulatory board--one that's looked at as a model across the nation and the world--really needs somebody with proven environmental credentials at the helm.

Q: Under Gray Davis, your agency became the nation's biggest purchaser of power during the energy crisis. And the administration was faulted for locking in long-term contracts at peak prices. What was your role in that?

A: I actually had a minimal role and that was by choice. I felt that with (ex-DWP chief) David Freeman in there negotiating the contracts, if I stepped in, that would be too many cooks spoiling the soup. I instead focused on ensuring we had enough supplies of natural gas.

Q: Why did you become an environmental attorney?

A: That goes back to my decision to become a lawyer. In the mid-1960s, I was in the South helping in the efforts to get African-Americans the vote. I saw first hand the power that attorneys had in that effort and that's when I chose to become a lawyer. But at that time, there was no opening for a white woman at the NAACP, which was my first choice. Instead, this whole new field of environmental law was just opening up. I realized that as an environmental lawyer, I would be able to make the world a better place for poor communities of color. I was practicing environmental justice issues before that term was even invented.

Q: What was your first big case?

A: My first case was as one of four associates at O'Melveny & Myers in 1972 representing the communities along the route of the proposed Century Freeway. We focused not only on the environmental harm the freeway would cause but also on the effects it would have on residents and communities in the area. This was a case that united the NAACP and the Sierra Club.

Mary Nichols

Title: President

Organization: Board of Commissioners, L.A. Department of Water & Power

Born: 1945, Minneapolis

Education: B.A. Russian literature, Cornell University; J.D., Yale Law School 

Career Turning Point: Participating in Freedom Rides in the South

Most Admired People: Burke Marshall, assistant attorney general for civil rights in Kennedy administration; L.A. Mayor Tom Bradley

Personal: Married, two grown children

Hobbies: Hiking, choral singing, reading and writing poetry

HOWARD FINE Staff Reporter