Jul 26 - McClatchy-Tribune Business News Formerly Knight Ridder/Tribune Business News - Daily News, Los Angeles

The Department of Water and Power has failed to invest enough in a modern power system, creating the potential for wider outages and failures as record heat stresses a now-inadequate distribution system, utility officials admitted Tuesday.

While DWP officials had blamed triple-digit temperatures and aging transformers for outages that left 16,000 San Fernando Valley households without power on Monday, they acknowledged the problem had worsened by Tuesday and could spread even further.

The admission was among the first indications of potentially sweeping problems at the nation's second-largest utility, which has long touted its reliability and surplus power supplies, even as it spent tens of millions of dollars on union salaries, public-relations contracts and other perks.

And it drew heated criticism from some DWP commissioners.

"They screwed up," Commissioner Nick Patsaouras said in an interview. "There was lack of a master plan, lack of looking forward, and a lack of accountability."

Patsaouras said Department of Water and Power revenue that for years has been siphoned off to beef up the city's general fund could instead have been used to upgrade equipment.

But he said recent studies also had warned of a breakdown, underscoring climbing repair bills the utility was incurring.

"They highlighted the issue exactly. The very high maintenance costs indicated antiquated equipment. It's like an old car that you have to take to the dealer more often."

And during a City Council meeting, DWP General Manager Ron Deaton said that the utility has failed to keep up with the city's power needs.

"We have been reviewing this, and beginning with this year and next year's budget, we are making a substantial investment in our infrastructure. We have been spending more on maintenance and repair than we have on the infrastructure itself," Deaton said.

Henry Martinez, who heads the DWP's power division, said more than $3.5 million will be spent this year on transformers, and a full analysis of the system's needs is under way.

Overall, the DWP plans to spend $377 million on power infrastructure and reliability in fiscal 2007, including $274 million on the distribution system.

In the last five years, the DWP has spent $1.6 billion on power infrastructure and reliability measures, including generation -- with $1.1 billion spent on distribution upgrades and reliability measures.

DWP officials said circuits from stations that serve Koreatown and parts of the Hollywood Hills have had to be repaired, and those that failed in the Atwater area could mean residents will have no power for several more days.

"The problem isn't behind us yet," power executive Randy Howard said during a briefing of the DWP Commission.

"We're getting behind the curve in distribution. As we get people on, as many people go off," Howard said in an interview after the briefing.

Customers who lose power now because of circuit problems cannot be switched to other circuits because those, too, are overloaded.

DWP officials estimated a couple hundred customers have been without power for more than 60 hours for an assortment of reasons.

But they also expressed confidence the utility has adequate power reserves, although it has purchased 100 megawatts to provide a cushion as repairs were made to a generating plant near Los Angeles International Airport.

"I don't see this as some kind of Armageddon that's coming on," Deaton said in an interview. "I don't see this as a massive deterioration of the system."

But he also predicted it will be difficult to get the distribution system back on track if triple-digit heat continues in the Valley and elsewhere.

And DWP Chief Operating Officer Robert Rozanski acknowledged the utility can no longer replace its aging transformers in a piecemeal fashion -- as they fail or as upgrades occur to handle new development.

"Clearly we need to take a systematic look at it," he said.

The utility tries to keep the load on a transformer at about 70 percent of its capacity. The heat storm that set city records bumped up demand, placing unprecedented loads on transformers.

Since Friday, he said the DWP has received 430 transformer-related calls for a system that includes 126,000 transformers on poles and in underground vaults.

Of those, 156 transformers required replacement, while 274 were repaired much like a fuse would be replaced or reset in a home, Rozanski said.

With the heat wave projected to continue for at least another week, officials warned that drastic conservation efforts are needed to prevent wider outages.

"Without conservation, we're not getting out of this," DWP Commission Vice President David Nahai said.

Mayor Antonio Villaraigosa has directed city departments to cut back on energy use by setting thermostats to 78 degrees, turning off unused equipment and reducing lighting.

As of Tuesday afternoon, DWP officials said there were some 625 outages reported around the city and 128 crews -- some from as far away as Utah -- had been brought in to respond to the emergency.

Several City Council members joined in urging the DWP to develop a more detailed strategic plan to respond to customer complaints in an emergency.

Deaton said only 10 customer service representatives were on duty over the weekend and more were brought in as outages increased. It still took several hours to deal with the backlog of calls.

"We have never experienced anything like this," Deaton said. "I don't think anyone could have anticipated the demand that we faced."

Councilman Tom LaBonge said the city should begin a more detailed look at all of its infrastructure needs and have an annual review each October to set investment priorities.

In another heat-related problem, aides to the mayor said city crews have doubled up on their work to trim trees.

 

By Beth Barrett and Rick Orlov