Governance in a Changing Market: The Los Angeles Department of Water and Power

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. ds