The acting chief of the Los Angeles Department of Water and Power appeared before the utility’s board of commissioners to present his vision for its long-term goals. Austin Beutner sees tough tradeoffs ahead.
This latest plan for long term goals again shifts the utility's priorities. Beutner's the third general manager in nine months to have something to say about where the DWP is going. These goals, he says, emphasize keeping the lights on and the water flowing. That comes at a price. "We have to look at required investments in infrastructure, required investments in regulatory compliance, and some discretionary investments in renewables. And all that whole mix costs money," he says.
That vision doesn't include new energy rate hikes. But Beutner is floating the idea of selling the 45-year-old John Ferraro building – the DWP's sleek headquarters on Hope Street. Beutner argues that the building is like the natural gas the utility owns in Wyoming: an asset, long held, that can now be used differently.
The building could bring $300 million on the open market. "We haven't made any choice yet about the building. It's iconic. This is our home. It will remain our home.
"But at the same time I want to make sure our ratepayers know we're looking under every rock, we're doing everything we can to make sure – that we've looked at every asset and that it's used optimally. And this is one of those assets we have to look at," Beutner says.
Some L.A. City Council members object. Previous councils have scuttled other proposed building sales, like the central library during the Riordan era. They and others counter that ownership is a hedge against rising office rents.
Beutner's goals depart from past practice in another way. Since L.A. Mayor Antonio Villaraigosa came into office, he's pushed for the DWP to make renewable energy one-fifth of its power mix by this year. The mayor would frequently joke that former GM David Nahai's job depended on reaching 20 percent renewables this year.
Villaraigosa has also aimed to eliminate coal from the utility's portfolio within 10 years. Instead, Beutner proposes cutting DWP's carbon emissions by half – a goal he says is closely related. Beutner's also willing to hedge: he said department finances and the economy could get in the way of that goal. "Goals are a good thing, but at the same time we have to make sure we're looking at what we can afford to do," he says.
In the end, board members for the DWP must share that goal. Water and Power Commission president Lee Kanon Alpert pointed out that he and his colleagues will determine whether to sell the headquarters building and where to invest in renewables. "Many of the decisions that are being recommended here are considered policy decisions that the board would have to vote on including the sale of this building," he said during Tuesday's meeting. He turned to the interim general manager. "Is that correct, Mr. Beutner?" Beutner assented. "Thank you sir," he said with a smile.
Beutner and other utility officials continue a sort of whistle stop tour this week to explain the DWP's goals. Nothing's set in stone, but now customers and city leaders have something to talk about.