Governance in a Changing Market

The Los Angeles Department of Water and Power

by Walter S. Baer, Edmund D. Edelman, James W. Ingram III, Sergej Mahnovski

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Deregulation, competition, and industry restructuring are changing the production and delivery of electric power in the United States, both for investor-owned and municipally owned utilities. The largest U.S. municipal utility, the Los Angeles Department of Water and Power (DWP), asked RAND to consider possible changes in governance that could improve its decisionmaking and operations while maintaining public ownership. The authors found that the DWP would benefit from simplification and streamlining, whether or not the city's electricity market is opened to competition, which many business, labor, and government stakeholders view as inevitable. The report delineates three governance options for DWP: a city-owned corporation, an independent city agency with a strong governing board, and modifications of the existing departmental structure. While the final decision is up to the Los Angeles city council and ultimately the voters, this report is intended to stimulate informed public discussion and debate.

Table of Contents

  • Preface

  • Tables

  • Summary

  • Acknowledgements

    Acknowledgments

  • Acronyms

    Acronyms and Abbreviations

  • Chapter One

    Introduction

  • Chapter Two

    The Current DWP Governance Structure

  • Chapter Three

    Decisionmaking and Operational Problems Under the Current Structure

  • Chapter Four

    Other Governance Models for Municipal Utilties

  • Chapter Five

    Governance Options for DWP

  • Chapter Six

    What Comes Next?

  • Appendix

    A Brief History of DWP

  • Endnotes

  • Bibliography

The research described in this report was performed under the auspices of RAND Enterprise Analysis.

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