On Right: Los Angeles Department of Water and Power
The interim manager of L.A.’s Department of Water and Power will present his Long-Term Strategic Plan to board members today at 12:30. Austin Beutner had pledged “a new era of transparency, accountability and financial discipline.” (Audio: KPCC’s Molly Peterson has taken a look this morning at Beutner’s plans. Steve Julian asks her why Beutner wants to sell the Department of Water and Power’s headquarters.)
Updated 9:56 a.m.
The newly installed head of the Los Angeles Department of Water and Power wants to sell natural gas reserves in Wyoming and the DWP's stake in coal-fired power plants in Arizona ahead of schedule to help move the utility into the "green" age, it was reported today.
Austin Beutner, a former investment banker and interim general manager of the DWP, even wants to sell the utility's headquarters building on Hope Street and lease office space back from the buyer to raise to money to transform the nation's biggest municipally owned utility into one that relies on a larger percentage of renewable energy, rather than coal or natural gas.
"Do you want to own a building, or do you want to have renewable energy?" he said in an interview with the Los Angeles Times. "You pick. I don't care. If you like the building better, that's fine. You can't have both. So policy is about making an informed choice."
Beutner told The Times he would not seek for another DWP rate increase this calendar year.
By shifting away from electricity produced by burning fossil fuels, Beutner hopes to cut the utility's carbon emissions in half.
The sale of natural gas assets could net $150 million, while the sale of the DWP building could net as much as $300 million, the newspaper reported. The DWP also owns about 100 acres in Malibu that Beutner may decide to sell.
Beutner's plan is expected to be presented to five-member DWP board Tuesday.
Any revenue from asset sales and cost cutting would help pay for upgrading the DWP's infrastructure, complying with government regulations and pushing ahead with Mayor Antonio Villaraigosa's directive to get more energy from wind, solar and geothermal sources.
Villaraigosa got into a beef with the City Council in March over proposed electricity rate increases, and the council ended up approving a 4.8 percent increase effective July 1.
The DWP is scheduled to divest itself of a 21 percent stake in the coal- fired Navajo Generating Station in Arizona by 2019. But Beutner said he would act far more swiftly to sell that stake, a move that could generate up to $500 million, The Times reported.
One possibility would be to sell the stake within two years while gradually scaling back the city's use of coal from that facility, he said.
Beutner's strategic plan represents a shift in direction for a utility that has had five general managers in three years. During much of that time, Villaraigosa has promised to ensure that the DWP gets 20 percent of its power from renewable sources by Dec. 31 and 40 percent of its power from renewable sources by 2020.