LA city audit: DWP was not in as dire financial hot water

The idea of an energy rate increase for customers of the Los Angeles Department of Water and Power sparked a pitched political battle earlier this spring. DWP officials insisted the utility could not complete a planned $73 million transfer to the city without seeking higher rates. Now a new audit from the Los Angeles City Controller's Office concludes that DWP wasn't in the financial jeopardy some of its top executives suggested it was.

"At best, the DWP zealously overprotected its financial position. At worst the DWP attempted to extort the city council into paying its proposed ECAF increase...[and] unnecessarily plunged the DWP further into a financial crisis," Greuel wrote. Her letter was sent to Mayor Antonio Villaraigosa, city attorney Carmen Trutanich, and the members of the Los Angeles city council.

In a written statement, DWP's acting interim general manager Austin Beutner, said a preliminary review by his utility finds that "there may be several errors of fact in the report."

DWP, he says, intends to move forward, not look back.

"We’ve put in place a plan to reduce costs in this budget year by $263 million and we have shared this plan with the City Council, our customers, and the community," said Beutner. "These cost savings will help reduce rates." DWP will finish releasing a new budget for the upcoming year next week.

Audit of Los Angeles Department of Water and Power