Pension & Health Pressures LADWP ‘Green’ Commitment

By Published On: May 6, 2011

The Los Angeles Department of Water & Power is likely to commit to a relatively small solar feed-in tariff. This is despite the expansive hopes of a Los Angeles business group--backed by the mayor--for a program aimed at cultivating up to 600 MW of solar rooftops. The revelation came as a key city council member pressured the department to cut costs, particularly the tab for pensions and employee health insurance. LADWP general manager Ron Nichols said the muni hopes to launch a pilot-scale feed-in tariff program in October aimed at pinpointing how much it needs to pay business and homeowners to install rooftop solar panels that feed the grid. He said May 2 the muni probably would pay businesses around 20 cents/kWh and homeowners “a little more.” Once it completes the pilot program, Nichols said the muni plans to roll out a bigger solar pay-back program with a capacity cap of about 75 MW. That’s still a fraction of the maximum 1,400 MW potential outlined by the Los Angeles Business Council (Current, April 29, 2011). Los Angeles City Council budget and finance committee members had little comment on the feed-in tariff at their meeting this week, focusing mostly on the department’s plan to cut $440 million in spending over the next three years. Nichols noted that the department’s staff would fall by as many as 2,000 workers over the next three to four years under a hiring freeze designed to account for $207 million of the savings. Council member Bernard Parks--who chairs the committee--urged the muni to find additional savings by opening up the health plan coverage for International Brotherhood of Electrical Workers Local 18 to competitive bidding. IBEW-represented workers at the muni receive coverage through Anthem Blue Cross, which Parks indicated was expensive. He said putting the health insurance contract out to competitive bidding could bring significant savings. Parks also urged the muni to control the cost of pensions, which he said represent 40 percent of LADWP payroll costs.

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