Former Enron Consultant To Be Reappointed As DWP Ratepayer Representative Without Job Review; City Council To Rehire Pickel In Power Play, Garcetti To Be Tested

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Dec 05, 2018, 16:29 ET

LOS ANGELES, Dec. 5, 2018 /PRNewswire/ -- Consumer Watchdog called the City Council's vote to reappoint Fred Pickel as the head of the DWP's Office of Public Accountability without a job review a power play and public disgrace that will leave them without a voice. Mayor Garcetti will still have the opportunity to reject Pickel.

Consumer Watchdog president Jamie Court said Pickel's rehiring to the $298,000 per year job without a review of his performance and after his actions cost ratepayers billions was a slap in the face to ratepayers. He said it would come back bite council members and the Mayor, if he approved Pickel, a former Enron consultant, because DWP was destined for another scandal.

"The head of the DWP's Office of Public Accountability should not be above accountability, particularly when scandal after scandal happened on his watch," said Jamie Court, president of Consumer Watchdog. "Apparently going along and getting along with rate hikes, salary hikes and billion dollar fund transfers from ratepayers to the City is how to get City Hall's blessing for the Public Accountability head. No city worker should be above a job review. Ratepayers deserve a ratepayer advocate, not a lap dog for the powers that be. If Mayor Garcetti rehires Pickel he will prove that he cares little about public accountability and more about going along and getting along with the powerful DWP public employees union and the DWP bureaucracy. That record will be felt in Iowa as much as LA."

During the city council process it was revealed that Pickel has failed to hire a ratepayer advocate at the OPA, despite the mandate in the city charter amendment in 2011 that created the office. Ratepayers have had no voice at DWP since his appointment.

Among the problems for ratepayers:

JD Powers rates DWP the worst among utilities for customer service.
Pickel deceived voters in the ballot summary he wrote for Measure RRR in 2016. As reported by the LA Times, Pickel wrote the ballot summary for voters without ever mentioning that he was grandfathering himself a six year job extension into it.
In the "Price of Pickel" report from March 2018 Consumer Watchdog found Pickel cost ratepayers as much as $7 billion in added costs. Read it: https://www.consumerwatchdog.org/sites/default/files/2018-03/ThePriceOfPickel-LAYOUT-final.pdf

The report finds:

Pickel endorsed power and water 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.
Pickel endorsed a new 5-year IBEW contract in 2017 hiking salaries by 13-22 percent for a total $280 million when DWP employees are among the highest-paid utility workers in the country and earn two-and-a-half times more on average than other workers in comparable L.A. jobs. But he raised no red flags on unfunded DWP worker pension and post-retirement medical liabilities calculated at $3.8 billion by an independent watchdog.
Pickel has not weighed in against spending $731 million through 2020—and a total of $2.4 billion by 2025—to refurbish vastly overbuilt and polluting natural gas power plants. But he criticized a successful solar program to pay large-scale commercial and residential developers for power sold back to DWP at a fraction of that tab for being too expensive.
Pickel stayed silent on illegal transfers to city coffers of "surplus" power rates of about $1 billion since 2012 to be used for purposes other than utility services. The annual transfers amount to an illegal tax under 2010's Prop 26, which mandates that the public must vote on the use of rates for purposes other than improving utility services.
In 2017, Pickel endorsed as "affordable" for ratepayers a plan to shoulder up to $140 million annually during drought years to fund Governor Jerry Brown's controversial North-South water diversion project, though ratepayers will not see additional water supplies from the scheme that subsidizes massive agricultural interests.
Pickel has failed to improve customer service that ranks at the bottom of major Western regional utilities, starting with failing to fend off a massive, but avoidable, software billing scandal in 2013. The $193 million system is costing at least $20 million to fix, while a legal settlement calls for DWP to pay ratepayers back $67.5 million for rampant over-billing.

"Ever since the film Chinatown defined the control over LA's water and power as a mysterious and corruptible enterprise, the truth has not lagged far beyond the fiction," said Court. "City Council members led by DWP pawn Nury Martinez want to keep the cloud over DWP, but they do so at their own jeopardy. Next DWP scandal the blood will be on their hands because they refuse to bring transparency to DWP. Shame on them."

SOURCE Consumer Watchdog