Sweeping DWP Electric Expansion Proposal Approved by Los Angeles City Council

LOS ANGELES—The Los Angeles City Council approved the Department of Water and Power’s (DWP) sweeping, 10-year power expansion program. The plan calls for a $1.7 billion investment to finance 2,900 MW of repowered in-basin power generation including new renewable sources of energy and demand side management. The plan focuses on improving reliability, lowering prices for customers and addressing environmental concerns.

“The DWP has been on a turnaround effort for the past three years,” said Councilmember Ruth Galanter. “I’m pleased the City Council approved the second phase of these efforts.”

The DWP’s 2000 Integrated Resource Plan details how DWP will meet and exceed the growing demand for electricity, repower in-basin plants, add new capacity to meet super peak needs and help finance the expansion by the sale of DWP’s share of Mohave Generating Station.

“Los Angeles has an old, inefficient power supply system in LA, and although we are providing ample, reliable power to all our customers this summer, we can’t just sit on our lead. DWP’s plan will meet the growing energy needs of the new economy in the years ahead,” said DWP General Manager S. David Freeman. “We are committed to being the leader in providing reliable, clean, low-priced power.”

Central to the plan’s focus on reliability is the DWP’s plan to repower three in-basin power facilities including Valley Generating Station, Haynes and Scattergood. A total of 10 units would be modernized with new highly efficient combined cycle natural gas facilities with state-of-the-art emission controls.

Local generation cuts the risks of power lost through congested transmission lines and other outages associated with power traveling hundreds of miles to reach customers. The first repowering will come on line at Valley in 2003. By 2010 polluting NOx emissions will be cut at DWP’s in-basin plants by more than 65 percent.

Power reliability also will be improved through the addition of in-basin Combustion Turbines (CTs) by next summer. CTs are designed to meet Super Peak power needs, those times when additional power is needed at a moment’s notice due to hot temperatures or interruptions of power from other sources. The CTs will have 300 MW that can be turned on by the “flip-of-a-switch,” a benefit over traditional plants that need hours to come on line and begin delivering power. In-basin CTs have the added advantage of being able to instantly supply power to LA businesses and residents instead of using power that must travel hundreds of miles from outlying generation stations.

In total, the new units will improve power reliability by adding an additional 500 MW to LA’s power supply and increasing local power generation.

Renewable energy sources, distributed generation and demand side management will add another 460 MW to DWP’s in-basin power supply and improve reliability because they are not affected by situations that cause power interruptions at other sources. Renewable energy sources improve the environment and also further diversify LA’s power supply portfolio.

“The strategic shift to more in-basin generation addresses our priority for improving system reliability in the years ahead,” added Freeman. “We want our business and residential customers to know they can count on their power supply. And the efficient clean burning units will produce far less pollution than the existing plants.”

As part of the shift to modern, in-basin power, the DWP plan includes the sale of its 20 percent share of 30-year old Mohave Generating Station in Southern Nevada. The Department would receive $190 million for their share as well as save $75 million needed for pollution controls. This $265 million will help finance new in-basin power.

The Department plan calls for cash funding the remainder of the power improvements over the 10-year period to avoid additional debt that could impact the DWP’s plan to lower power rates. The DWP is on track to pay off all of its old generation facilities debt by 2003 and has committed to lowering rates by 5 percent in 2002 and an overall average 10 percent in 2003.

The DWP pays a dividend of at least five percent to the City and that would continue under the new power plan at the existing level of payment. In 1999, the DWP contributed more than $110 million to support city government.

The Los Angeles Department of Water and Power serves more than 3.7 million people in Los Angeles and was established almost 100 years ago to provide water and electric needs to the city’s businesses and residents.