Analysis calls ambitious L.A. solar plan 'extremely risky'
An outside consultant says Measure B, which easily made the March 3 ballot, is more costly than portrayed by the city's Department of Water and Power.
By David Zahniser
December 19, 2008
When members of the Los Angeles City Council agreed last month to put an ambitious solar energy plan on the March 3 ballot, they talked effusively about their desire for cleaner air and "green" technology jobs -- the kind that could boost the economy during a recession.
What they didn't discuss was an analysis by a city-hired consulting firm that called the solar plan "extremely risky" and considerably more expensive than was being portrayed by the Department of Water and Power.
Measure B, which calls for unionized DWP workers to install solar panels on rooftops and parking lots across the city, sailed onto the ballot with a unanimous vote. But days earlier, the council's top policy advisor was so troubled by the proposal that, in an e-mail to Council President Eric Garcetti, he recommended that the council delay it until a future election.
After receiving the analysis from the consulting firm, Chief Legislative Analyst Gerry Miller warned Garcetti that the solar measure could result in "substantial increases" to the electricity bills of DWP customers.
Neither Miller nor Garcetti made those findings part of the public record. Since then, Miller's office has rebuffed requests from The Times for a copy of the consulting firm's analysis, saying the state's public records law allows city officials to withhold any document that would reveal the "deliberative process" between the council and its chief legislative analyst.
Miller said Thursday he is no longer worried about the cost, as long as the DWP can secure $1.5 billion in solar tax credits. But he said the agency still must deal with other findings from the consultant, which concluded that the utility "does not have the planning mechanisms and resources in place" to accomplish the solar plan.
Garcetti, for his part, said the consulting firm's findings were not made part of the record because they were among several opinions that he solicited informally on the ballot measure. Solar industry experts disagreed with the numbers produced by the consultant, he said.
"They said that this [ballot measure] was absolutely doable and that that [the consultant's analysis] was wrong."
Still, foes of Measure B said the findings confirm their worst suspicions about the measure -- and the process used to get it on the ballot.
Opponents have called Measure B a backdoor mechanism to make voters sign off on a huge package of DWP rate increases. And they accused Garcetti and Miller of concealing the findings of the private analysts, P.A. Consulting Group.
"That's the problem with City Hall," said former DWP Commission President Nick Patsaouras, who opposes Measure B and is running for city controller. "They think the average taxpayer is not smart enough to tell them the truth."
In a Nov. 4 e-mail obtained by The Times, Miller told Garcetti that he entered into a "quick contract with a very reputable firm" to study the solar plan at Garcetti's request. He offered to keep the analysis from other council members even as he complained that DWP officials had failed to do their own thorough analysis of the measure. "It concerns me greatly that the department did not come forward with this information themselves," Miller wrote. "It would have been as available to them as it was to me."
Miller later concluded: "Since this request came directly from you, I am not sharing this with [Councilwoman] Wendy [Greuel] or the other members until you clear it."
Garcetti said he later gave Miller permission to give the findings to other council members -- and would not have voted to place the measure on the ballot if he thought the findings were accurate.
Still, Councilman Bernard C. Parks, who heads the council's Budget and Finance Committee, said he never received the findings -- and wished that he had.
"If this is accurate information, or at least a point of view, the council should get the chance to ferret through this," Parks said.
The DWP has already agreed to impose increases of nearly 24% on electricity bills between 2006 and 2010. DWP officials contend the solar plan would lead to rate hikes of no more than 4% for the average household, and that those would occur no sooner than 2011.
But according to a one-page summary attached to Miller's e-mail, P.A. Consulting Group warned that ratepayers could face annual surcharges of up to 12% per year if Measure B passes.
The analysis also said that the solar plan would cost $3.6 billion, not the $1.5 billion suggested by DWP General Manager H. David Nahai.
"Bottom line is they do not believe that the department can deliver on this program at all, and that the costs associated with the program are way understated," Miller wrote in his e-mail to Garcetti.
Mayor Antonio Villaraigosa and council members have embraced the solar plan, which was spearheaded by the International Brotherhood of Electrical Workers, the union that represents DWP employees. Under the plan, all the solar panels would be owned by the DWP and installed by the utility's workers.
In the mayor's office, the measure was handled by Deputy Mayor Nancy Sutley, who was recently tapped by President-elect Barack Obama to fill a high-level environmental post in Washington, D.C. Sutley said Thursday that she never received a copy of the outside analysis. "I heard it referred to once and never again," she said.
Sutley said she could not respond to the assertions in the analysis because she did not know what they were based on. She also said she never asked for the document because she wasn't sure it existed.
Councilwoman Jan Perry, who heads the Energy and Environment Committee, said Miller showed her the one-page summary of the consulting firm's findings. Perry said she was "alarmed" by the potential effect on DWP ratepayers but did not keep the document because she thought it was confidential.
Asked why she voted to put the measure on the ballot anyway, Perry said she thought she could unearth more details about the solar program in the months leading to the election. "I felt that through the committee process, we would be able to better vet the proposal, which is what I'm doing now," she said.
Greuel, who is also running for city controller, said she also looked at Miller's document but concluded that the DWP had answered all the questions raised by it.
Representatives of P.A. Consulting Group did not respond Thursday to requests for comment.
The findings zeroed in on the surcharge -- known as the Energy Cost Adjustment Factor -- that the DWP places on power bills to cover the costs of fluctuating prices, including natural gas and sources of renewable energy.
The firm warned that the surcharge, which stands at 4% annually, could triple if Measure B passes.
DWP officials said they had not received a copy of the outside analysis. But in an interview two weeks ago, Nahai said the prospect for a larger surcharge was unlikely.
"Is that within the realm of political possibility? I would say no."
Thursday, December 18, 2008
Thank God for David Zahniser at the LA Times or it would have take a lot longer to shine some light on the city's proposed solar initiative program. Luckily, I think there is still time for the city to call a special session on Monday and remove this measure from the ballot. At that time each member of the city council should also personally apologize to the citizens of Los Angeles for their actions.