Phasing out once-through cooling at state coastal power plants could cost the Los Angeles Department of Water & Power $1.7 billion, requiring a 5 percent rate hike, according to Austin Beutner, the muni’s newest interim general manager. In presenting the department’s 2010-11 budget to the Los Angeles City Council June 8, Beutner said the department is “actively” discussing rule modifications with state officials. That includes stringing out its compliance deadlines. “This is a great example of California regulation run amok,” he said. LADWP operates three coastal power plants. The California Water Resources Control Board adopted a policy last month requiring most of the state’s 19 coastal power plants to either install dry-cooling systems or shut down by the end of the decade. The plants use billions of gallons of sea water every day to cool spinning turbines, killing fish, other marine species, and damaging the ecosystem (Current, May 7, 2010). “The goal of the policy is to protect marine life,” said Judie Panneton, Water Board spokesperson. She noted that power plant operators like LADWP can seek delays or variances from the requirement. In late April, just before adoption of the state’s final phase out plan, the department announced it had cut seawater use at its Harbor Generating Station 73 percent through repowering the nine original generating units. It said previous and future repowering at its Haynes Generating Station should cut water use 50 percent. The department added it plans to outfit two units at its Scattergood Generating Station with dry cooling by 2015 for a 45 percent flow reduction. The state policy requires that the water consumption via power plant intakes be slashed by 93 percent at each facility unit. The LADWP interim general manager made his remarks while presenting a scaled-down $4.2 billion muni budget for the fiscal year beginning July 1 The muni’s budget includes $263 million in cuts, including $189 million in permanent reductions and $74 million in deferred expenditures. It also continues a hiring freeze except for “essential” positions. Council member Jan Perry called the budget “an excellent first cut.” Her remark indicated eased tensions between the council and the department since Los Angeles Mayor Antonio Villaraigosa appointed Beutner to replace former interim general manager S. David Freeman earlier this spring. Freeman was and remains an outspoken advocate of renewable energy (Current, April 16, 2010). Near the end of Freeman’s brief tenure, the department and Villaraigosa on one hand, and the council on the other, became embroiled in a bitter struggle over a rate increase that included a carbon surcharge. Eventually, the department dropped the plan after the council refused approval. LADWP settled for a temporary slimmed-down rate hike aimed at maintaining its financial rating (Current, April 30, 2010). Beutner this week pledged to work with the council to develop a rate scheme that would move the department toward a lower carbon future. He also signaled the department would support appointment of a ratepayer advocate, something sought by members of the council and ratepayer activists in Los Angeles in response to recent power and water rate increases. Freeman resisted the idea.