DWP Head to Step Down

The head of the Department of Water and Power, which is embroiled in a financial dispute over a pair of union trusts, will resign at the end of the month, Mayor Eric Garcetti announced Thursday.

Ron Nichols, who has been DWP general manager for three years, will step down at the end of the month. In a letter to the mayor and other city leaders, Nichols said the decision to step down "is my own and is for personal reasons."

"I was brought in to lead DWP by the prior administration and I felt it important to stay on board afterward to provide time for the new administration's transition," wrote Nichols, who previously worked in the private sector as a water and energy consultant.

Nichols said he does not have "specific plans for a future leadership role in the industry elsewhere" to avoid potential conflict of interest.

Nichols is paid an annual salary of about $345,000.

Garcetti thanked Nichols and said he was "focused on continuing to reform the DWP to cut costs, improve customer service and increase transparency."

City Councilman Felipe Fuentes, who chairs the Energy and Environment Committee, said he was "disappointed" by the news.

"Given the repeated turnover in leadership at DWP, I hope that moving forward we can bring greater stability to the utility in the selection of its next general manager," Fuentes said. "I look forward to working with his replacement."

Nichols' resignation came amid intense scrutiny into a pair of trusts that received more than $40 million in ratepayer money from the DWP. Even though Nichols sits on the boards of those trusts, he was unable to provide financial documents city leaders requested to determine how the money was used.

City Controller Ron Galperin is conducting an audit into the financial activities of the trusts. Nichols attended an initial meeting with Galperin and provided some materials.

City officials said the rest of the financial records need to be provided by the DWP employee union head, Brian D'Arcy, who has so far refused to turn over the documents.

At the direction of Galperin, LAPD officers Thursday served a subpoena to force D'Arcy to appear at an audit meeting and release the rest of the documents by Jan. 23.

Nichols also presided over a troubled overhaul of DWP's 39-year-old billing and customer information system. Glitches in the initial months of the $162 million changeover resulted in tens of thousands of incorrect bills being sent out, with some customers being charged several times more than they owed and receiving shutoff threats from the utility. Customer service call wait times also ballooned as people called in to fix their bills.

Nichols, who lasted longer than any other general manager in the past 12 years, "brought stability and good leadership to the department and he's clearly going to be missed," said Mel Levine, president of the Water and Power Commission, the panel that sets policy for the utility.

"It's a tough job," he said, that requires someone comfortable with leading an "entity right in the center of the political structure of Los Angeles" and dealing with "contending forces."

"If shortages occur and questions are raised, it immediately becomes an issue that impacts massive number of citizens, quickly getting the attention of office holders," he said.

Levine said Nichols informed him "quite awhile ago" that he planned to step down for personal reasons, and "having his presence, with his knowledge of the very complicated details of the department, has been very helpful."

Water and Power Commission Vice President William W. Funderburk credits Nichols with going beyond government mandates in promoting water efficiency measures and enacting reforms to allow the city to end its reliance on coal power early.

"He was very sensitive to balancing environmental issues with the need to deliver reliable and clean power and water," he said.

Water and Power Commissioner Jill Banks Barad said she was "sorry to see" Nichols leave, and said she feels the "fallout" from D'Arcy's refusal to divulge financial details about the two trusts hurt the general manager.

"I thought he was a good general manager," she said. "Not only did he have the technical knowledge, he was very open and I liked working with him."

It will be a challenge to find a replacement "who has exceptional managerial skills, the technical knowledge of water and power, and also political skills to deal with the City Council and the public, the neighborhood councils and the union," she said.

- City News Service