ML20059N663
| ML20059N663 | |
| Person / Time | |
|---|---|
| Site: | Palo Verde  |
| Issue date: | 12/31/1989 |
| From: | Caruso R LOS ANGELES DEPT. OF WATER & POWER |
| To: | |
| Shared Package | |
| ML17305B105 | List: |
| References | |
| NUDOCS 9010170102 | |
| Download: ML20059N663 (58) | |
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'" Accommodating our custonien, large arsd small, will be the measure <{our; a success in the 1990s'," sap Norman E. Nichols, General Mariager and Chief I Engineer ofthe Department <{ hier and Power. "We view the neit decade ;
as a dress rehearsalfor Ihe 21st Century" K . j;*- These words capture the casence of : the utility beetor's New Age, an era in p which deregulation and competition will ~ f forge profound changes in an industry long known for its predictability. Three 1 strr.legic concepts underpin the DWP's
. response to the new era:
i a B Increased efficiency and cost bl , containment. E llealistic rate structures.
; E Conunilment to exedient service.
10 On the next sever.d pages, this Annual-h ' Y E Ileport reviews solue of the ways the O!. Department of Water and Power is pre. paring for the challenges ahead. These - pz ' examples symbolize the new spirit of
;, service shared by the DWP's more than g
w; ll,000. employees. e'
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' , Year ended jud 30 Nt k 1989 1988 (Ikcrea.c) - 1989.- 1988 (Denesw l.- (,
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Servlee -
^
if ~ c.h. in t.ilt m. Aiwan h..n in bmm. '- S-h. t c, ~ Sales - 208.1 203.6 2.2% - 21.9 - ,21.1 . 3.8% L ,! 3 p Customers-average number (thousands)- 640.6 . 637.8 ' O.4% 1.325il 1.304.6 1,6% 9
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Finisticial. In mili In milie. s ( Revenue 8 306.7' 8 259.7- 1 n.1% $ 1,734.6 81,588.1 9.2% ~
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Operating costs
- 206.0 172.4 19.5 % 1,301.2 1,191.7 ~ 9.2% -
, c.
[t .: t l V- 193,4
= Net income - 42.3 34.4 23.0 % 175.6- 10.1 % '
l'ayments to City ofIna Angeles ' 12,9 12.4 4.0% -- 78.5 70.2' 11.8 % SI
.e.~ . ~ .
Capital expenditures . 118.1 97.8* 20.b 3 ~336.2; 317.3" - 6.0 % '
)
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- Net utility plana 1,202.0- 1,114.7 7.8% 3,523.9- 3.324.9 6.0% -
8 ( i
- Capitalization-equity and longderm debt ' l.250.3 1,172.5 t. 6% 3,626.1: 3,444.7. 5.3% -
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M. . WATER AN Di POW ER ' DOLL AR: _,
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19 I Other ' 4. Ihmenta to the City 2 Fire Hydrant rentain . 8 Retirement 1%n cmt related to opernihna ; 5 Gmernmental ' 12 Capitalimprovemenia q
.37 Reelential 16 Debt -nice ro is -
55 Commerrialamtindi5strial 19 Purchawd water and energy ' 'i 19 Other operating expenses 22 Operating salaries and = ages l J l 5 1
.- .' )
l POWEN REVENUE DOLLAR IN CENTS. POW EH E.\ P EN DITU R E DO LL A N IN C ESTS ' i 2 3. 4 5. 1
$: 9 i 1 31 , .J l li h '
53 28' (2 ll l.1 i 15 13 2 Streetlighiing 4 Retirement Plan cuts related to operatiom , 3 Oiher 5 5 Payments to the City 14 Industrial 9 Debt .enice cmts ' 28 Re klential 11 Capitalimpnnements ij 53 Cominertial 12 Operating salaries and wages < , I,
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, ~ success un the 1990s,"says Norman E. Nichols, General AlanagerandlChik , x y j ,
q{vs a Engineer ofthe Department of Water and Power. "We view the next decade; v
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W %la dress i rehearsalfor the 21st Century " + 3 i> c These words capture the essence of i '- .,,. the utility sector's New Age, an era in
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j which deregulation and competition will. 5 forge profound changes in an industry ~ long known for its predictability;Three 1 strategic concepts underpin the DWi"s response to the new era: a increased efficiency and cost a= containment. ' j; 4 a llealistic rate structures. .
^
e Commitment to execllent service. ' s n > -. On the next several pages, this Annual lleport reviews some of the ways the J , Department of Water and Power is pre- o. ' m
,.t.
a paring for the challeriges ahead. Thhie ' 1 U
/>1e '
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The im Angeles Department of Water and Powei supplies waier and electricity to the approximately 3.4 million residents of the nation's second latgest city. As F the largest municipally owned utility in the nation, DWP has more than 11,000
, emphryees serving a 465. quare mile area ranging from the San Gabriel Moun. ,
j tains to the Pacific Ocean, it began municipal distribution of water in 1902 and electricity in 1916, As a proprietary agency of the la Angeles, City gmernment, the DWP receives no tas support, its operations are Gnanced entirely by the sale of water and
- electricity. llevenue bonds nie its main source of external Gnancing.
, The DWP is administered by the floard of Water and Power Commi,sioners, L. whose fine memben are appointed by the Mayor and confirmed by the City Council for terms of five years. The floard establishes water and electric rates, subject to approval by the City Council, i nt:ra nisit:NT or s Ais:n A h p ros t:n Norman E. Nichol. General hlanager and Chief Engineer Eldon A, Cotton (l i Amistant Gesu ral hlanager-Ibwer i f Duanc 1 Georges,on Amintant General hlanager-Water
- Daniel W. Water.
Aui tant General hlanager- External and Organisational Sen-ices Norman J. Ibwen, Chief financial Ollicer
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in w r c o s T u ta t:a s With the emergence of the Pacific Ilim n* a major economic aial cuhural arena, Ins Angeles has become a gateway for hundreds of thousands of new arrivals-making it the most interna. g tionalized of all U.S. citico. As the community has become multilingual and cross cultural, Department of Water and . Power services hme adapted m cordingly- with bilingual phone and field pen.onnel, with customer materials now printed in sescrallanguages and training programa designed to L accommodaic a variety of ethnic and cultural backgrounds. The influx of newcomer
- to los Angeles has been accompanied by a rapid gnmth in ethnic enterprise, with special utility >,ervice needs that can be complicated by language Imrriers. A four person bilingual team within the DWP's Major Accounts Group worLa with managers of Ilispanic businesse* like El Mercada, the bustling llispanic mmleiplace in Eastern los Angelen. With more than 60 sendora doing a total annual business of mer $ 10 million, it is a major consumer of electricity and water, and a , such warrant
- its own account executive from the DWP's Major Accounts Group.
"Any establishment this big needs special attention," says l' red llerrera, the account execu-the for El Men mlo, " Power reliability in critical for merchants who must keep their pniducts refrigerated. Water quality is essential for sendors e,ening the public, flut there are hundreda of other needs." lierrera's command of Spanish is an important adjunct to his technical exper-tise Ahhough the general _..mager of El Mercado, Pedro llosado, is also bilingual, nmny of the employees there are proficient only in Spanish.
"llaving someone available to us who known our situation, knows the utility business and is fluent in Spanish is a real benefit " says llosado, w ho has managed El Mercado for 12 years.
-/ "In this case, I guess you could say the DWP spealm our language in more ways than one." ,.
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I_ ' tio r c ti s To m E st s -l i A growing llis Angeles has traditionally sobed its water needs through " supply side" i 1 measuret-by importing from water rich areas to the north and ca*t. As environmental i concerns intensify, however, the emphasis has shifted to " demand side" solutions, klay, the DWP is looking towant the newest horizon in water resource management - ! reclaiming and recycling "us ed" water for irrigation and for recharging the underground j water table. . 1 i Underjoint programs of the City's Department of fleereation and Parks and the Department of Public Works, reclaimed water is already used to irrigate two Griffith Park golf courses, ! and it will soon be watering 1,400 recreational acres in the Sepulveda Dam liasin. Now j >f the DWP hopes to find cus.tomers for this water in the private sector.
"Large water users are very interested in this opportunity," says Steve Ott, an engineer / )
i planner for the Greenbelt Project of the DWP. "As supplies of fresh water get tighter, they know deliveries of reclaimed water won't be cut off." j A DWP marketing team under Saturo Matsuda has approached four closely clustered com. l panies with heavy irrigation needs (Forest Lawn and Mt. Sinal Memorial Parks, Lakeside - l
. Country Club and Universal City) aa prospects for the Greenbeh iteclamation Project.
"We're under a lot of pressure dming drought periods," says Jack Clough, Vice President ;
6 i I of Architecture and Engineering for the Forest Lawaromreny, which has more than 100 ; U 4' acres oflawn to irrigate at its Hollywood Ilills Memorial Park. "The Greenbeh Project may .; be our answer " i Matsuda's marketing team has been working with Clough and his counterparts at the other prospect firms for about six months. They hope to have an agreement by early 1990, and i reclaimed Greenbelt water could start flowing as early as the summer of 1990. , Matsuda sees this as a good start, but adds: "We'rejust scratching the surface " i e if Hkliattl 7ut iatt' f(clireca flo.enicM Senior Waict 1%iy %ktani Dairet Cicek hLer!D% P DWP 1 i 12 , I l L 1
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18 0 P C U S T o t2 E st s While no two DWP customers air exactly alike, all e. hare one thing in commom When they [ turn on an electrical switch or water faucet, they expect something good to happen. Thin expectation prmnpted the Department of Water and Power early in 1988 to institute it. Major Accounta Group (M AG), to ene the special needs of the DWP's 1,500 largeit customers, for whom reliability of service is critical. These customers account for around 33 percent of DWP's total power demand. llurgeoning California State Unisenity in Northridge, with a student population of 30,000 and growing, is an example of a major DWP account. And in a couple of years CSUN will be esen bigger, thanta to an ambitioun expansion program now under way, New buildings inevitably mean new demands for water and power, and Susan Smith, a 17-year DWP employee and the executise in charge of the CSUN account, in responsible for e ecing that these needs are met. Though she handles many other major accounta (including 1..A. International Airport), CSUN has been getting the lion's share of her time lately.
"llight now, their needs are pretty great," kaya Smith, w hot.e optimistu in a major asset in her work, "so this in where my priorities belong. These problems emit wait."
Among the needs CSUN has put before Smith are three new industrial stations, box car ize unita that DWP has been asked to install on the campus in the next 18 months. These units x lower the voltage ofincoming power to make it compatible with the university's system. It'n her responsibility to put the CSUN development team in touch with the right people at DWP to get thin done, then to follow through and make sure escrything comes together.
"We're moving our project along generally on chedule," ays CSUN Director of Facilities Planning, Stesen C. lohr. " Sue Smith in one of the people helping us keep it there."
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DO P COMTO Ml;H8 Part of the new environment facing public utilitiee in the 1990s i* a tnmger emphasis on marketing the pnnlucts and services they prmide. The DWP has mmed boldly into this arena with its new lleat Pump Group. lleat pumps, Grst intnnluced in the early 1950,,, work on the same principle as room air conditioners, which transfer warmth Imm the interim to the outdoons. Ilut heat pump work . both directions, extracting warmth from outside air (esen w hen it seems cohl) to heat inside spaces in winter, and resersieg the pnicesi, during hot weather. Ileai pumps hme become more efGcient in recent years, and their costs hme gone dow n, As a re ult, the DWP in 1987 began promoting their u c a a ub,titute for conventional heating and cooling units, e pecially for mall spaces. The program pnivides Gnancial incentises for builders and homeow ners w ho equip new buildings, or retrofit ohl ones. Again. senice in the key.
"We have to make the builder or homeow ner aware of the advantage, mer comentional heating and air conditioning," says Steve Mai uda, Director of the DWP lleat Pump Group.
" People like their Ocxibility, comenience and clean operation." So far, the DWP has paid out more than $4 million in incentise, to contractors for installing i,ome 25,000 units in the DWP enice area.
"The program has done wonden, for DWP in the marketplace," ays Dan S. Palmer, a partner in G ll. Palmer Associates, a lirentwood deselopment company that installed heat pumps in a 760-unit project completed in 1989. "The DWP really pulled with us. We're very plea ed."
So, evidently, are other people. The program has been steadily acceleiating since its incep-tion, to the extent that o. ales during the ccond quarter of 1989 exceeded sales for the entire first year of the program. then Jones i unti % lo il!r ilo o a a;( umluo s enn., ( letL h pia
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OPEHATIONS OV E H VIE W Another year of below average precipitation ir Southern California, the waten heds of the Colorado and , Sacramento 1(ivers and Eastern Sierra Nevada gave new urgency to consenation efforts by the Depart-ment of Water and Power in 1988-89. The thini shortfall in Sierra snowmelt in as many 3 ears lowered water delheries from the les Angeles Aqueduct to 70 percent of the 20-year merage. Electrical production from the Aqueduct was down 21 percent from the previous year. Colorado itiser water and power production were abo lower. These reductions were made up through additional purchases of water from the Metropolitan Water Dis-trict and of electrical power from out of state generating facilities. These purchases resulted in higher costs that had to be passed on to DWP customers. In all, the DWl' Water System supplied approximately 208.1 billion gallons to some 640,572 customers in 1988-89, compared with 203.6 billion gallons and 637,793 customers in the presious year. The record year for water use was 1986 87, when the DWP sold more than 210 billion gallons. The Power System in fiscal 1988 89 sold 21.9 thousand gigawatt. hours of electricity to around 1,325.300 customen (both new high ,1, compared with 21.1 thousand gigawatt. hours and 1,305,000 customers in 1987-88. In l'ebruary 1989, Norman E. Nichols was confirmed as General Manager and Chief Engineer, replacing Paul H.1.ane, w ho retired after 40 years' service. Mr. Nichols' replacement as Assistant General Manager-Power is Eldon A. Cotton. u rT E n si sT r u nic u uc u i s Major deselopments occurred this year in two long standing legal issues surrounding DWP water rights in the Owens Valley and at Mono 1.ake. The Inyo County Board of Supersisors and the DWP llourd have given preliminary approval to an environmental protection plan that clears the way for implementing a long-term Owens Valley underground water management plan. An El Dorado County superior court granted a petition for a preliminary injunction sought by the National Audubon Society and Mono I.ake Committee. The injunction granted through March 3,1990, halts DWP __- disersions of water from the Mono Basin until the water lesel at Mono I.ake rises to 6,377 feet. Ileplacing the water the City willlose from this injunction, along with lost electricity generated by Mono Basin runoff, will require increased water imports from the Sacramento Delta and will cost los Angeles . consumers around $15 million annually. Imprmements in water quality continued last year, with the new los Angeles Aqueduct Filtration Plant
- discharging water with average turbidity more than 500 percent better than state standards. More than two-thirds of the City's total water demand goes through this plant. l.evels of trichloroethylene in San Fernando Valley groundwater also showed imprmement in 1988-89, falling to a lesel nearly five times better than regulatory requirement.
28
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