In a moment of bravado, if not bluster, the Los Angeles Department of Water & Power?s board of commissioners turned down a request by the city of Los Angeles to transfer $60 million from its power fund to the city?s general fund shortly before adopting a fiscal 2004-05 power system budget calling for $2.95 billion in spending beginning next month. ?I?ve never met an elected official who?s not in favor of the transfer,? said Dominick Rubalcava, president of the board of commissioners, in calling for the transfer to be tabled. To the applause of department employees, other commissioners expressed concern about transferring the money?which would have been above and beyond the routine 7 percent transfer of power revenues to the city?s general fund. The department maintains that a transfer of that magnitude would make it impossible to meet future employee pension obligations and pay for the increase in renewable power sought by the Los Angeles city council. In adopting the budget, the department promised that it would not increase retail power rates in the city for at least five years despite rising costs. Through hedge contracts and prepayments, the department hopes to control its natural gas costs in the coming year. This year, power and fuel purchases have cost the department $1.1 billion, about $125 million more than anticipated. It hopes to reduce the expense to $977 million in the coming year. The department will keep its expenditures for public-benefits programs level in the coming year, at a total of nearly $70 million?with $13 million earmarked for energy conservation, $23 million for low-income lifeline subsidies, $30 million for renewable resources, and $3 million for research and development. Power system salaries and wages paid by the department are slated to increase 8.5 percent. Employee health care costs are budgeted to rise 7.8 percent. Under the budget, LADWP will cut its capital improvement expenditures from $662 million to $586 million but will continue work to repower four generating units at its Haynes and Scattergood power stations. A small hydro refurbishing is slated for $16.5 million. Under its five-year projected budget, the department said it plans to spend $120 million toward the estimated $1.2 billion cost of outfitting the Mohave coal-fired plant?owned by a consortium of utilities, including Southern California Edison?with emission controls needed to clean up pollution that drifts all the way to the Grand Canyon. Under a federal court order, operators must either clean up the plant or shut it down next year.