S. David Freeman, the folksy Tennessean who headed up the L.A. Department of Water & Power for the last four years, could always be counted on to spice things up with his cowboy hat and colorful quotes. Routinely available to the press, the 75-year-old industry veteran is credited with keeping the DWP out of deregulation and restoring its financial health.
So when Gov. Gray Davis named him last week as the first chair of the state's new public power authority, it was a little odd that he was unavailable for interviews.
Well, maybe not so odd.
Freeman, who has served as Davis' chief energy adviser and power contract negotiator for most of this year, has kept to the background, even though the authority he is set to chair has the potential to completely transform California's electric power landscape.
No doubt Freeman was adhering to the policies of tightly controlled public appearances of his boss, Davis. But his silence speaks to his unaccustomed position: playing defense after negotiating long-term power contracts for the governor that are now coming under sharp criticism. Those contracts, critics say, were negotiated in excessive secrecy and, in hindsight, haveFavorable media image
"Dave is a person who needs oversight," said Ed Smeloff, assistant general manager for power policy at the San Francisco Public Utilities Commission who has known Freeman for 15 years. "And if there is any criticism that could be made, it's that these long-term contracts that he negotiated were not reviewed by an independent second party before they were signed."
Thirteen years ago, Smeloff, then president of the board of trustees of the Sacramento Municipal Utility District, recruited Freeman to take over the general manager's post at SMUD. At the time, Smeloff said, SMUD was in a "world of hurt," with voters having shut down its largest energy source, the Rancho Seco nuclear power plant.
Freeman diversified SMUD's energy portfolio, adding geothermal, solar and wind generation sources. And he pushed through the building of three additional power plants, though he initially pushed for five.
"He may have been a little too aggressive at times and there were occasional sparks, but he definitely deserves the lion's share of credit for turning around SMUD," Smeloff said.
Freeman had already headed the Tennessee Valley Authority the nation's largest and several other public power authorities before coming to Sacramento. And he went on to head the New York Power Authority and the L.A. DWP.Getting credit
Yet as his reputation grew, Freeman often was either given credit or took credit for initiatives that weren't totally his. The most notable example: late last year and early this year he claimed that under his tenure, the L.A. DWP opted not to "go down deregulation road," as he liked to call it.
While that was true, the real credit belongs to the municipal utility lobby. In 1996 a full year before Freeman returned to California they successfully got municipal utilities exempted from deregulation.
When Freeman began his tenure at the DWP four years ago, his mantra was to prepare the then-bloated agency for deregulation, not keep the DWP out of it. Freeman took credit for slashing 2,000 positions from the agency's budget, even though the L.A. City Council authorized 1,500 of those cuts before he even took the post.
"Freeman does deserve some credit there for going ahead with a clearly unpopular mandate and even getting the unions to sign off on it," said Arthur O'Donnell, editor and associate publisher of the California Energy Markets newsletter.
Freeman also resisted pressure to sell off some of the DWP's generating assets plants that in the last year have brought in hundreds of millions of dollars in surplus revenues to the agency.
But he also took some heat for selling surplus DWP power to the state at a profit during the height of the energy crisis last fall and winter. Ironically, in his role as energy adviser to Davis, Freeman has pledged to go after all those who overcharged the state for power.
But it's Freeman's actions as energy adviser to Davis that have drawn the most criticism. When he was brought on for the first time in January, the state's options for securing power at the height of the crisis were limited and the state's negotiating position weak.
Yet "someone with Freeman's experience should have been warning Davis about the pitfalls of locking in too much power at excessively high rates," said one source who has worked for him over the years.
Freeman may have given Davis those warnings, but because so many decisions were made then behind closed doors and neither he nor anyone else connected with the Davis administration will talk about those decisions, it's hard to know who proposed what.
Freeman did win more acclaim for his other assignment from Davis: administering the administration's "20/20" rebate program in which electricity customers who cut their usage 20 percent from last year's levels received an additional 20 percent discount on their bills. More than three million customers met the 20 percent conservation goal in June.
Now the 75-year-old is in the hot-seat once again, as the newly-named chair of the California Consumer Power and Conservation Financing Authority, pending state Senate confirmation.
Freeman sees the authority as modeled after the New York Power Authority, which he briefly headed before being forced out by Republican New York Gov. George Pataki. The authority's purpose is to serve as a backstop so the state has power to draw on when the market comes up short.
"This power authority is key to the future of California's power marketplace," O'Donnell said. "It's is David Freeman, more than anyone else, who will determine how those powers are used."
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