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DWP’s Power Struggle and the Future of LA




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The emergence of Los Angeles as one of the world’s great cities, despite its location in a resource-stressed desert basin, has always been the surprise outcome of an unnatural act. L.A.’s stunning growth has been fed by a vast network of electric transmission wires that have, for 100 years, drawn in power from around the West to fuel the always-enlarging economic engines of the city.

This form of urban nourishment has been orchestrated by the city-owned Department of Water and Power (LADWP), which has historically provided L.A. with extremely reliable power at an unusually low price. But now, like utilities around the nation, the DWP is facing serious challenges.

First, the DWP will have to provide more and more power to the city. The population of Los Angeles is going to keep expanding, and with technological innovations like electric vehicles, the need for power will only increase. At the same time, new state laws designed to protect our health and the environment will require that the DWP stop relying on dirty energy sources.

Currently, 39 percent of the electricity generated by the utility comes from big, out-of-state plants that burn coal, a cheap but health- and planet-destroying way to generate energy that will have to be replaced by greener, cleaner forms of power production. The move to green power will cost money, and this more costly energy could well end up being squandered in L.A.’s older buildings. That‘s because much of the city’s building stock pre-dates the new energy codes that require buildings to use energy efficiently, and 70 percent of electricity is used in buildings.

Under this scenario, the new, green energy the DWP pays for will be frittered away. And this is during a period of extraordinary economic stress, when city residents and businesses can least afford higher utility bills.

One clear solution to these challenges is to invest more in energy efficiency. Making buildings more energy efficient can reduce bills by 25 percent or more, decreasing the cost of power to residents and small businesses and insulating them from any potential rate increases. Not only will an aggressive energy efficiency program reduce power costs for consumers, it will create jobs for local residents at a time when they are desperately needed — and unlike the jobs created by generating energy in other states, all the income workers earn will cycle back into L.A.’s economy. Plus energy efficiency will save money for the utility as well, which will have to invest less in power procurement.

Energy efficiency programs are such a good idea that they are being adopted widely throughout the United States; other utilities near Los Angeles invest far more in this type of work than the DWP. The results pay off: The Sacramento Municipal Utility District has seen twice the savings in electricity consumption that the DWP has.

A new LAANE report outlines the challenges that the DWP faces and recommends that it pursue energy efficiency as a way to effectively meet them. The utility has kept power flowing reliably and inexpensively into Los Angeles for a century as the city has grown into a globally important metropolis. It is time the DWP start managing the use of that power as well.

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