Consumer Watchdog Still Working To Force DWP Ratepayer Advocate Out

Consumer Watchdog Still Working To Force DWP Ratepayer Advocate Out


March 14, 2018

Consumer Watchdog still working to force DWP ratepayer advocate out

The group Consumer Watchdog continued its campaign Wednesday to force out the Los Angeles Department of Water and Power’s ratepayer advocate, as the group released a report outlining its claim that he has cost ratepayers nearly $7 billion through either faulty advice or failing to oppose costly projects.

While he was supposed to advocate for ratepayers, the report said, Fred Pickel “has endorsed or remained silent about questionable DWP decisions that cost ratepayers nearly $7 billion.”

“The $6.93 billion price tag for Pickel’s consent includes rate hikes of more than $1 billion despite DWP’s cash reserves of $1.6 billion, hefty pay raises for DWP workers who are among the highest paid utility workers in the nation, surcharges on power bills that are not used to improve utility services, and billions to refurbish unnecessary natural gas power plants,” it stated.

Consumer Watchdog, a nonprofit consumer advocacy organization, along with Food & Water Watch, an environmental advocacy nonprofit, have been conducting an ongoing campaign against Pickel for some time.

Pickel did not directly respond to a request to comment on the Consumer Watchdog report, but in an email he referred to the Office of Public Accountability’s website that includes links to the reports he has published.

“I’d like the OPA’s website to be the record on my work,” he said.

In June, he told City News Service, “I believe the Consumer Watchdog has plenty of fire but is short on fact.”

Pickel, a longtime energy industry consultant, was appointed in February 2012 to be the official watchdog of the LADWP. The term has since expired and he is working on a month-to-month contract.

“It’s time to hire a ratepayer advocate to start fighting for people and stop rubber-stamping wasteful projects that unfairly cost Los Angeles families,” said Brenna Norton, Southern California organizer for Food & Water Watch.

Consumer Watchdog’s report criticized Pickel in several ways, including that he endorsed rate hikes of $1.1 billion between 2016 and 2020 “without questioning whether other monies might be available to offset rate hikes on burdened ratepayers when the utility holds $1.6 billion in cash reserves,” the report said.

In June, Pickel told CNS that he has done plenty to fight rate hikes, including a hike that was being proposed in 2012 that he fought when he first took office. Although a hike did go through, changes he proposed saved ratepayers $50 million per year, he said.

The report also criticized Pickel for not weighing in on an annual transfer of hundreds of millions of LADWP funds into the city’s general fund, which Consumer Watchdog argues is an illegal tax under 2010’s Proposition 26, a state ballot measure that says charges for government services must be linked to the cost of providing the service.

The annual transfer has caused controversy, lawsuits and threats of future lawsuits, but Pickel said in June that as a city employee, he was given privileged information about the budget transfer and as a result is not able to publicly speak about it due to the litigation.

The report also criticized Pickel for reporting in 2017 that the cost of funding the Delta tunnels project was “affordable” for ratepayers. The $17 billion Delta tunnels project, which is officially known as California WaterFix, would change how water is moved from the Sacramento-San Joaquin Delta to Southern California and other areas through the construction of a pair of 35-mile tunnels, and must be primarily paid for by local water districts, although the state recently scaled back the immediate plan to one tunnel at a cost of $11 billion. Pickel’s report on the two-tunnel plan found it would cost Los Angeles ratepayers an average of $1.73 per month in 2017 dollars.

Pickel stressed in June that his report was a financial analysis and did not advocate for or against the project.

The Consumer Watchdog report also said Pickel supported a raise for the International Brotherhood of Electrical Workers union, did not weigh in on a plan to “refurbish vastly overbuilt and polluting natural gas power plants,” and failed to avoid a scandal in 2013 that led to many LADWP customers being over-billed and the utility having to agree to repay ratepayers $67.5 million.

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