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DWP considers selling assets

June 15, 2010 12:00:00 AM PDT
The interim general manager of the Los Angeles Department of Water and Power asked its board Tuesday to sell its landmark building in downtown Los Angeles and other assets to raise hundreds of millions of dollars without raising rates. "This strategic plan offers a very clear picture of what needs to happen for the department to keep the lights on and water flowing for Los Angeles, to meet regulations and environmental commitments, to revamp outdated financing strategies and to find new internal funding sources so that ratepayers are not asked to pay for big increases, especially during this difficult economy," Austin Beutner told the Board of Water and Power Commissioners.

Beutner said the nation's largest municipal utility will not push for additional power rate increases in 2010.

Beutner is hoping to generate $150 million by selling city-owned natural gas reserves in Wyoming. He's also proposing to sell the city's stake in an Arizona coal-fired power plant for up to $500 million.

DWP would sell the utility's office building on Hope Street for about $300 million and then would lease back the building from the buyer.

Other assets include a 100-acre parcel the DWP owns in Malibu.

Beutner has said he will seek increases of 5 percent for electricity and 7.3 percent for water next year.

"We are facing tough choices, and we are facing a choice of increasing rates or redeploying assets including this building, (which is worth) almost $300 million," Beutner said.

"This asset is owned by our ratepayers, and one of the things we have to look at is turn over every stone and see where we have resources, other than going to our ratepayers to pay to provide reliable power, and continue to transition to renewable and cleaner sources of energy."

The board deferred making a decision on the matter until its next meeting.