The Los Angeles Department of Water & Power?s board cut funding for distributed generation. It also stretched amortizing solar rebates, which some observers say will lead to a collapse of local solar businesses. The November 18 actions show it will be tough sledding for renewable energy, say critics. ?We?re encouraging these things, but within fiscal constraints,? said Dominick Rubalcava, president of the department?s board. ?It may well be within our future but may come a little slower due to our fiscal constraints.? LADWP is helping to alleviate the city?s own fiscal problems with cash infusions. Last year the department provided the city $213 million toward its general fund, and this year it projected it will provide $179 million. Observers note that even though the board professes to encourage renewables, LADWP backs a coal-powered plant expansion project in Utah and has yet to develop a renewables portfolio standard plan. Funding for distributed generation rebates was cut from $21 million over the next three years to $6 million. Approval now is expected for a related rate package for distributed generators encouraging them to use their equipment during peak-load periods. LADWP also ordered that rebates be provided solely for renewables and fuel cells, not for combustion systems, with the exception of microturbines that run on landfill and sewage plant digester gas. Both the South Coast Air Quality Management District and the Coalition for Clean Air asked the commission to delay its decision to give them time to work with the department?s staff on ways to increase support for renewable energy technology. That request was denied. In a related action, LADWP?s attempt to get customers to install solar systems was too successful, and it had to change its accounting to deal with an $11.7 million over commitment in solar rebates. The budget for the solar rebate program was set at $8.5 million a year for two years. ?That was always the intent of the board, to ramp down the dollar amount committed,? said Lillian Kawasaki, the department?s assistant general manager for environmental affairs and economic development. Pete Parrish, president of California Solar Engineering, worries that LADWP?s inability to fund rebates for new applications has caused the effective collapse of the local solar installation business within the department?s territory. Meanwhile, with the department?s commitment to renewable energy flagging, Environment California in a report this week blasted the municipal utility for planning to increase the operation and emissions of its power plants in the Los Angeles Basin. For instance, the report cited the department?s Valley power plant, which ran on boilers and was used in recent years only during peak-load periods. The plant was repowered with combined-cycle turbines set to increase capacity from 323 MW to 533 MW. While it will produce less pollution per megawatt of output, the department plans to begin using the facility as a base load unit, according to Bernadette Del Chiaro, clean-energy advocate for Environment California. ?They plan on increasing their use of in-basin power plants and increasing their pollution to in part sell to the California market at a profit,? Del Chiaro said. Emissions of nitrogen oxides from the plant potentially would be 140 tons a year. Two years ago the plant emitted 94 tons a year, according to the South Coast Air Quality Management District.