Council receives report on DWP sale of Mojave plant interest amid questions on future power access

The Los Angeles City Council on Friday received and filed a report and related materials about the Department of Water and Power's recent sale of a portion of the city's interest in the Mojave Generating Station.

The item, called special by Councilmember Holden, reviewed earlier council actions that approved selling a 20% interest in the Mojave plant and noted that subsequently DWP completed paperwork and sold only a 10% interest, and collected what a department speaker described as "90 some odd million dollars." The council voted 10-0 to receive and file the report.

Why it matters: Councilmembers pressed DWP and each other on whether selling part of the city's ownership could reduce available local generation and create future upward pressure on electricity rates. Councilmember Holden said the sale risked "giving away the opportunity to produce energy" that could help keep rates lower for Los Angeles customers.

Detail of the sale: A department representative told the council that Salt River Project, a joint owner in the Mojave facility, exercised a right of first refusal and purchased the interest that had been offered to AES, the original buyer. The speaker said Salt River Project will use its acquired share for its own loads; the portion retained by the city remains available for DWP use in California. The representative also said the city earlier received the cash proceeds noted above.

Council discussion centered on (1) why the sale ultimately involved only 10% rather than the earlier 20% figure, (2) whether the city retained and could deploy the remaining interest for local needs, and (3) whether the sale and transfer of ownership to an out-of-state purchaser could influence future rates. DWP staff described operational reasons, including plans to repower and rehabilitate in-basin generating stations, that led the utility to retain a portion of the plant to meet near-term needs.

Outcome and next steps: The motion to receive and file the report was approved by voice vote, recorded as 10 ayes. No ordinance, contract award, or new authorization was approved on the floor during this item; the council did not adopt a new directive beyond receiving the report and placing the discussion in the public record.

Council members who spoke during the item included Councilmember Holden and a Department of Water and Power representative. The item closed with the council receiving and filing the materials.

Ending note: The council's action put the information on the public record but did not reverse prior sales. Members expressed interest in continued oversight of DWP resource decisions as the utility rehabilitates other generating stations.