Replacing old power poles and eliminating once-through cooling at generating units are among the chief infrastructure requirements facing the Los Angeles Department of Water and Power (LADWP), according to a report for the utility by PA Consulting.
LADWP has an aging infrastructure and 61% of its power poles are more than 50 years old, PA said in its LADWP “Revenue Requirement Evaluation” presented to the Los Angeles Board of Water and Power Commissioners on May 19.
Projections show that the number of poles over 50 years old will decrease over five years, but the average age will still be over 50 years, PA said.
“LADWP’s revenue requirement should allow the Department to meet renewable energy mandates and increase infrastructure reliability investments in a measured manner,” PA said in the analysis.
In addition the Los Angeles utility must continue to work to eliminate once-through cooling in order to meet Environmental Protection Agency (EPA) mandates, PA said. The affected generators include Haynes Units 1 and 2 as well as Units 5 and 6 and Haynes Unit 8; along with Scattergood Units 1, 2 and 3 as well as Harbor Unit 5.
LADWP has not had a base water rate change in over five years; however, other major California cities have been increasing rates to address the challenges facing the industry, PA said in the report.
Pm the power system side, LADWP’s non-labor spending is projected to increase from $827m in FY 2013-14 to $1.41bn FY 2019-20, according to the PA analysis. Based on an analysis of the financial plan, underlying budget and required major programs, LADWP’s current Power System revenues will not cover the revenue requirement, according to the report.
To meet its obligations, LADWP will require $180m additional revenue requirements on average over the next five years. About 10% of that revenue requirement will be dedicated toward coal power replacement.
LADWP took a major step toward a goal of eliminating coal from its power mix on May 19 by approving an agreement to sell its 21% share in the coal-fired Navajo Generating Station outside of Page, Ariz.