THE BLOG
06/07/2010 05:12 am ET Updated May 25, 2011

LA Business As Usual and A Better Place

Returning to LA from an inspiring visit to Better Place, I wasn't ready for the now almost perennially bad news about the city's financial health. But more on that in a bit.

Better Place is a still-green joint Israeli/Silicon Valley/Renault-Nissan electric vehicle (EV) and services partnership. After my visit I was feeling almost giddy thinking that the internal combustion engine would soon be a thing of the past. Unless Ahmadinejad gets his wish, first in Israel in 2011 and soon thereafter in Denmark, Japan, Australia, California and Hawaii, Better Place will be launching a network of battery charging/changing stations that will permit EV owners to use their electric vehicle just like they would a conventional gas or diesel car. During a visit to the "Zionist entity" I stopped by the company's first demonstration center, listened to the slick presentation, and test drove a prototype silent, emission-free full-sized sedan built by Renault. What did I think? Loved it, though I wish they'd started out with a compact convertible, better suited to the Mediterranean sun, than a hardtop. I guess that's why I'm not in the EV business.

In order to succeed, apart from the technical difficulties it must overcome, Better Place faces a monumental logistical challenge in building a sufficiently extensive network of stations where a driver's nearly depleted battery can be swiftly swapped out for a fully recharged one. With consumers used to pulling up to the pump, swiping their credit card, quickly filling up, and driving off, the company has a steep grade to climb. Initially Better Place is targeting consumers with dedicated parking where home recharging units can be installed. As for the cost, Better Place says their EVs will be priced competitively with conventional cars. Consumers will be charged for the numbers of kilometers driven and presumably these prices will be competitive as well. Gas and diesel in largely oil-less Israel doesn't come cheap.

Better Place has smartly set up its first demonstration center at a petrol depot just north of Tel Aviv. With a massive fuel tank looming in the background visitors climb into the EVs, which have been plugged in at the curb and recharged as one would an iPod. Of course the energy to power the cars has to come from somewhere, and for now in the US, Japan, Denmark, Israel and elsewhere that will continue to mean coal and petroleum and to a lesser extent solar, wind, water and nuclear to drive the turbines that generate electricity. The hard science types I visited the demonstration center with expressed concern that the company therefore still hasn't solved the emissions issue. They question whether power generation and EV vehicle and infrastructure manufacturing emissions will be any lower than emissions under the current gas and diesel regime. So, in other words, Better Place, or at least the gracious staff at the demonstration center, needs to do a better job responding to these concerns if they want to sell cars to people who understand the science.

The tiny country of Israel seems like a natural place for Better Place to take hold. With most of the population concentrated around the business center of Tel Aviv and the generally dysfunctional government pretty solidly behind the project, Better Place may be the best news to come out of the country since Israelis invented drip irrigation and reworked 'old' Tel Aviv's Bauhaus-lined boulevards with bike- and pedestrian-friendly thoroughfares. In Israel, which boasts an extensive network of buses and a growing commuter rail system, Better Place Israel seems to have a good shot at success. And given the need for an alternative to gas-powered cars and trucks, may it be the first of many successes in forward thinking EV-friendly countries and in states like California.

Encouragingly, here in LA at least three other EV players are looking to set up or expand shop. According to an article in this week's LA Business Journal startup electric carmaker Coda Automotive is the latest company looking to open a final assembly plant in LA to turn out an all-electric sedan by the end of 2011. BYD Co. Ltd. and Tesla Motors are also searching for space in LA County.

According to the Business Journal, Coda's sedan will be a compact that will sell for around $45,000 or in the low $30,000s after state and federal subsidies. In other words, it will still be cheaper to take Metro than to own one of these babies.

In any event, given the local news one has to wonder whether LA's pols will be able to stop squabbling long enough to put on a proper dog and pony show for companies, EV and otherwise, that may want to do business in our town. As good as things look on the 30/10 mass transit front, the city's financial picture appears to be worsening by the day.

In the visually stunning new show, Water: Our Thirsty Resource, at the Annenberg Space for Photography, one image captures for me the fragility of life in California. Edward Burtynsky's photograph of vulnerable homes built cheek by jowl along islands in the Sacramento Delta underscores how the artificial world we have created in the Golden State may be fun while it lasts but won't last forever. Well, if LA's politicians don't start looking after the city and its residents rather than showboating for the cameras, our city is likewise doomed. The latest bad news for Angelenos is the decision by Moody's to lower LA's bond rating with warnings that the city risks further downgrades. The ratings cut means the city will have to pay more to borrow money.

Maybe it's the jetlag, but I just can't help thinking that Moody's action is the result of a gratuitous pissing match between the obstinate City Council and the Mayor. With Villaraigosa in a standoff with the Council over the LA DWP's electricity rates and the city's budget gap, we're all at their mercy until either the Council or Mayor blinks.

To believe the Los Angeles Times and the other mainstream media on the feud with DWP, one would have to conclude that the Council is just looking out for the citizenry in standing its ground on a rate increase. Wednesday's lead editorial in the Times practically screams: "The city is in deep trouble, and the mayor and the Department of Water and Power are to blame."

Really?

According to a source close to the issue, "The LA Times and others have rolled over and bought the Council's take on things without question... and the Times has made heroes of the Council which is the real joke." "In short," the informed source tells me, "the Council, grandstanding as always, decided to 'save' ratepayers $6 million that would have gone to support energy efficiency and renewable energy projects in LA. The cost of rejecting that $6 million is $60 million in undercollections, a likely $90 million in additional finance fees resulting from the downgrade in our bond rating, and the city won't receive the DWP's $73 million transfer. Good work, Council!"

While I'm sure there's enough guilt to go around, it does seem as though the Times and others have been unduly deferential to the perspective of the Council in this dispute. And to what end? According to my source (not me) the show of strength by the Council that they can exert authority over DWP will mean that next year they can go fund raise at the energy companies. In spite of the media's enthusiasm for the war on the big bad DWP the row simply serves to take the heat, hopefully just temporarily, off of the underperforming Council. Guys, come on, the theft of the Owens River is ancient history. I welcome City Controller Wendy Greuel's quick audit. Transparency good. Grandstanding bad.

The spat between the Council, the Mayor and DWP deserves a closer look. The sooner that happens and the sooner this foolishness gets resolved, the sooner City Hall can return to governing and making LA the new industry job engine it needs to be. Who knows, maybe the future is electric vehicle taco trucks and bustaurants? This seems to be one of the few local industries that is weathering the hard times. Which begs the question of whether there is a to-date missed revenue generating opportunity here for Metro as well?

Rather than ban food and drink on board, maybe Metro should be hiring unemployed Starbucks baristas to sell it at the back of its buses? If it's successful the transit agency won't have to cut back on service. And since passengers aren't driving maybe Metro should even serve alcohol as well as lattes.

I can see the Metro billboard now, "Start the weekend early, take M's party bus home from work." To do my part to help revenues exceed expenses, make mine a double.