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I began working in the public affairs division of the Los Angeles Department of Water and Power in 1987, writing press releases and answering media questions. Then as now, much of the public outright disliked the nation’s largest municipal utility. Even if its power was the cheapest in California, the DWP often seemed to be a fumbling bureaucracy that was constantly raising its rates. My job was to help make it appear otherwise.
The first thing I learned there was that the utility looked down on City Hall, and not just because its gracious 1965 headquarters was on a hill a few blocks away. DWP employees were proud. They were better paid than other city workers. They had better benefits. They had their luxury cafeteria with big grand piano, deep green carpets, and terrace dining. While City Hall workers pushed paper, went the thinking, DWP workers kept Los Angeles alive—a magic the DWP pioneers had conjured out of the rugged Sierra early in the last century.
Though the job was a bad fit, I left six months later with a lofty respect for the blue-collar workforce that set up and maintained the utility’s 14,000 miles of power lines and 7,200 miles of water mains. But I also saw how the DWP’s senior bureaucracy had grown to be a fortified elite over its eight-decade existence, holding the mayor and city council carefully at bay. The bureaucrats, playing a byzantine Game of Desks in order to maintain a line of succession to the top post of general manager, had every reason to suppose this status quo would last another 80 years.
Then in 1994, Mayor Richard Riordan booted a GM who refused to give up extra DWP money to hire more cops. Like all L.A. mayors, Riordan signed off on who was brought in as general manager, and he appointed his own man for the position, breaking the bureaucratic succession that insiders had counted on. What ensued was seemingly endless management churn: Twelve GMs—four in 2004 alone—presided over the DWP until 2014. Executive authority eroded, with City Hall taking a greater administrative role and Brian D’Arcy, who is chief of the utility’s potent International Brotherhood of Electrical Workers’ Local 18, gaining strength in negotiations over wages, benefits, and working conditions. Those years would be perhaps the most difficult in the utility’s history.
Now that Marcie Edwards sits at the GM’s desk, overseeing a $6.2 billion annual budget and a workforce of some 8,800, hopes are high that the days of turmoil are over. When she started in March 2014, she became the DWP’s first female general manager. “This is my 11th ‘first woman in the job’ job. Actually, I stopped counting at 6,” Edwards says, leaning back comfortably in a sprawling haute ’60s office that Mad Men senior partner Bert Cooper might have killed for. She’s also the first GM in memory to ascend from the DWP’s manual labor side.
A third-generation employee at the utility, she began at the DWP in 1976 as a clerk typist before climbing from steam plant assistant to, eventually, assistant general manager for marketing and customer service. Just a step from the top. “If I hadn’t worked in all those crafts positions, I would not be here today,” says Edwards, who at 58 wears a blond bouffant and has a serious smile. “Those jobs taught me how to deal with uncertainty, how to show leadership when things were very problematic.”
In 2001, Edwards left the DWP to be municipal utility manager in Anaheim. To round out her tool kit, she picked up a bachelor’s degree and then a master’s during a tenure that left a strong impression on everybody I spoke to. “There’s a handful of individuals in leadership roles that have both the technical expertise and the people skills to navigate challenges and capture opportunities,” says Anaheim councilwoman Kris Murray. “Marcie is one of them.”
DWP board president Mel Levine encountered a similar reaction when former colleagues in L.A. learned that she was interviewing for the job here. “DWP people kept coming up to us, greeting her, encouraging her, and congratulating her,” he says. Even competing candidates recommended her.
Edwards knew what she was in for when she accepted the $345,000-a-year position. The revolving door to the GM’s office was only part of the problem. There were the nine-figure cost overruns between 1998 and 2005 on a legally required project to mitigate the dust plumes that routinely drifted from Owens Lake—a side effect of the L.A. Aqueduct, which had transformed it into a dusty plain. In 2004, it was discovered that the utility had rather gullibly paid $4.2 million in fraudulent bills from the FleishmanHillard public relations firm. Two of the firm’s executives went to prison as a result.
In 2013 came news of the $40 million spent on two training and safety trust funds maintained by the union. Asked what all that money—contractually funded with DWP employees’ pay—was going toward, union head D’Arcy simply declined to provide details. But nothing angered customers more, or generated worse press, than the 2013 meltdown of the DWP’s new $178 million customer billing system, which sent out erroneous bills of up to $51,000 and unleashed such a flood of complaints that customers were kept on hold for hours as they waited to sort matters out. In August a class action settlement promised $44 million to overbilled customers. (In July J.D. Powers released a survey in which the DWP scored the lowest customer satisfaction of any utility in the west.)
Each lapse involved a general manager’s failure to say no. Each time, the city council called in the GM for a chewing out before its Energy and Environment Committee, which monitors the DWP—or in extreme cases, before the full council itself. The result was often mutual incomprehension. “The people in City Hall do not understand the complex operations required to deliver reliable water and power,” says former councilwoman Ruth Galanter, who chaired the committee when it had a different name. “And the professionals have a hard time explaining in terms City Hall can understand.’”
Edwards’s varied background has helped bridge that divide. Still, for an executive so widely admired, her tenure could have started more smoothly. While news of the $40 million employee trusts had surfaced well before her arrival, city controller Ron Galperin completed his audit 13 months after Edwards took the post. The report found no criminal wrongdoing, but it was scathing, with details about “steak dinners,” conferences in Hawaii, and the like. D’Arcy wouldn’t speak to me for this article; however, I was provided with union documents clearly indicating that the money came from worker wages, not public funds.
To the surprise of many, Edwards responded with a letter, cosigned by D’Arcy, stating the audit was “littered with accusatory innuendo and peppered with contradictory statements.” Mayor Eric Garcetti, who not only appoints DWP commissioners but partly based his campaign on reforming the DWP, said that he disagreed with her response. (His office did not return calls for this story.) Soon after, Edwards recanted (somewhat) at a DWP board meeting, saying, “I regret allowing my frustrations with the audit process overall to lead me to agree to some characterizations which were not appropriate.” At the least, cosigning might have bought Edwards goodwill with D’Arcy when labor negotiations with the IBEW begin before the contract expires in 2017.
This past August Edwards and the mayor demonstrated some public unity following that spat when they joined in the ceremonial dumping of “shade balls” into the Los Angeles Reservoir. The sheer oddity of the event helped it go viral, dwarfing the June coverage when Edwards celebrated a more significant milestone, the completion of the first half of Headworks—the west’s largest covered reservoir—near Griffith Park.
When you’re leading the DWP, politics are inevitable. They’re what precipitated the ouster of GM David Nahai, who held the post before Mayor Antonio Villaraigosa replaced him, on an interim basis, with David Freeman in 2009. But even now Nahai looks back fondly on those years. “It’s a job that can give you a sense of accomplishment that no other job can,” he says.
Edwards points to something similar. “You want to be able to make a difference,” she tells me. “You want to take the skill set you spent 30 years developing and apply it to some fairly tough problems.” They’re getting tougher, too.
While Edwards acknowledges that the current drought is a major concern, she says it is only a part of the utility’s complex future. “Water recycling’s time is now,” she says. “Rooftop solar power, home battery storage, smart grid—we’re researching them all. What happened in the past is not a good predictor.… What will future customers demand of us? No one has the answer.”
Until recently the DWP derived 42 percent of its power from greenhouse-gas-spewing coal-fired plants. This past summer the agency sold off its interest in its coal-fired Navajo Generating Station in Arizona. It aims to derive a third of its energy from renewable sources (mostly wind and solar) by 2020 and to have phased out all coal-fired plants in its portfolio by 2025.
What’s more, Garcetti has stated his goal to replace 50 percent of the water L.A. imports in the next decade with water that originates within city limits. To that end the utility will have to remove toxic aerospace-age solvents from local groundwater while building facilities to channel storm water into aquifers rather than out to sea. The DWP is also reinitiating its much-delayed effort to recycle wastewater with a long-term project that will clean it and send it into the groundwater supply in the same way Orange County does.
All of this will take money, which means rate increases. Edwards sought her first in July, a $1.3 billion package with four rate-payer tiers based on usage, elevating rates by an average of 17 percent over what they currently are, she says. (The city council is expected to provide final approval by mid-December.) Even then, Edwards points out, the DWP’s electric rates will remain among the state’s lowest.
Mark Gold, UCLA’s Associate Vice Chancellor for Environment and Sustainability, doesn’t think the utility is raising rates enough to foot the bill for what lies ahead, and he said as much in a Los Angeles Times op-ed piece. But DWP officials contend they’ll also be able to tap into Proposition 1, the state’s 2014 drought initiative, to stay on track.
Making that happen will require not only a stable GM’s office, but something the utility has long lacked: better community outreach. As Nahai says, “The DWP has to sell three things: water, power, and trust.” Without employee trust, he explains, service sags. And without public trust, the DWP can’t get the money to sustain the service. Keeping that trust as the utility changes the way it provides service may be Edwards’s biggest challenge of all.
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