A dozen cities that buy electricity from Southern California Edison are exploring ways to lower power costs.
The west Los Angeles County cities of Carson, Culver City, E1 Segundo, Gardena, Hawthorne, Lawndale, Lomita, and Torrance "are in - the preliminary stage of looking at all the alternatives right now," Winston Peterson, a managing director of Prager, McCarthy & Sealy, said Friday.
Similar discussions-are taking place in the desert cities of Cathedral City, Palm Desert, Palm Springs, and Rancho Mirage, Peterson said.
If a state regulatory agency follows through on a pledge to open up competition next year, the cities will have greater clout in their relationship with Edison, one of California's three investor-owned utilities.
The role of the California Public Utilities Commission to set rates and govern corporate utilities "would be diminished" in such a deregulated environment, Peterson said.
Less regulation could create what Peterson calls "open competition" in which cities. might compete with power suppliers for their electricity needs, "whether they want to be competing or not."
For example, he said, "a small city that owns its own electric utility -- and has a large industrial customer that disappears to somebody else -- may well find itself in a very difficult financial condition."
To guard against that scenario, Peterson said, cities could join forces. A city could take over Edison's power distribution facilities within its boundaries and join with other cities to form a joint powers agency that would negotiate power supplies from sources other than Edison. Presumably, this would lower rates.
Cities might issue bonds to finance the acquisition of distribution systems from Edison, Peterson said. While the bonds would be taxable under the federal tax code, the cities might qualify to issue some industrial development bonds, which would be tax-exempt.
A debt-financed underground parking garage in downtown Los Angeles is on track to open as scheduled m early 1996, but construction of the Wait Disney concert hall -- to be built on top of the garage -- will be delayed because of a $50 million funding shortfall.
Construction of the hall was scheduled to start next month, but the date has been pushed back because Los Angeles County requires that funds must be pledged for 95% of the hall's costs before work can begin.
In August, it was disclosed that the 2,350-seat concert hall, originally expected to cost about $125 million, would probably cost about $175 million.
Last week, Los Angeles County Music Center officials, who are overseeing the concert hall project, said they have contracted with a construction management firm to undertake a $100,000 cost-cutting study.
The project's $175 million cost estimate does not include the parking garage, which was financed with an issuance of $116 million of certificates of participation by the county in January 1993. Certificate proceeds also funded street improvements and capitalized interest.
County funds, not garage revenues, will pay the certificates' holders, said Maureen Sicotte, a senior finance analyst for the county's chief administrative office. "We are committed to paying debt service" on the certificates, she said.
She said the garage will open and begin collecting parking revenues as early as February 1996, even as construction on the symphony hall goes on above it. "We know it will be an eyesore, but we can still pull in the revenue" during construction, she said.
The concert hall and parking lot project was inaugurated in 1987 when Disney widow Lillian B. Disney pledged a $50 million gift that she and her family subsequently expanded to about $93 million.
"The garage could be used for parking without a concert hall," said LeSlie Young, project manager for Skadden, Arps, Slate, Meagher & Flora, which represents the county in the real estate-related legal work on the project. "It is obviously better to have a concert hall on top of it."
