As GM of the Los Angeles Department of Water and Power, Marty Adams is in a very unique position in the water world. Not only does he oversee a combined department of water and power, he's doing it for the second largest city in the country, along with all the climate challenges faced by the state of California.
Having worked at LADWP for 39 years, Marty has seen the department through many difficult events in Los Angeles' history - from the LA riots to the 1994 earthquake and more. He frames those challenging moments as learning opportunities, seeing how the entity could adapt and change.
Environmental concerns and regulations have also changed during Marty's tenure, and consumers are more actively concerned. Marty talks about how this has affected his perspective as he prepares LADWP for the coming decades and longer.
While LA has seen many droughts, they recently had one of their wettest years on record. We talk about evolving technology to save and store excess water, trying to cut down on the "yo-yo effect" on customers. We also spend a fair amount of time on Marty's efforts to use more resources inside LA County, and the benefits of the circular economy.
Replacing aging infrastructure is also a priority - while decreasing the average lifespan of pipes is important, it's also critical to use technology to assess pipe quality - age shouldn't be the only consideration.
Marty talks about idea sharing on an international level. LADWP has imported innovative ideas from high-tech solutions to black balls sitting on top of the reservoir. And they've worked with other countries across the world to share ideas. This collaboration will come in handy as Los Angeles prepares to host the Olympic Games in 2028.
Diversity, equity, and inclusion is important on two fronts for LADWP. Los Angeles has some of the richest residents in the country, but 40% of the population live below the poverty line. How can the department continue to generate revenue but not exclude anyone? Also, as we see a shortage in future workers, how do we reach out to underserved communities and make them aware of the career opportunities in this field? You may be surprised to hear what some high schoolers told Marty and his team.
More:
LADWP Website: https://www.ladwp.com/
Marty Adams Bio: https://www.ladwp.com/ladwp/faces/ladwp/aboutus/a-whoweare/a-wwa-ourteam/a-wwa-ot-gm
Aquasight Website: https://aquasight.io/
Mahesh: Good morning, good afternoon, and good evening. I'm here with Marty Adams, general Manager, Los Angeles Department of Water and Power, one of the few utilities in the United States that combines water and power and is at the heart of the water energy Nexus. LADWP, as it's more popularly called as serves 4 million residents, 750,000 connections for water.
And 1.5 million connections for power in combined revenues of $6.3 billion. It's actually pretty close to a Fortune 500 company. The cutoff is $6.4 billion.
Marty: We'll have to work harder at that.
Mahesh: That's right. That's right. Marty came through the ranks of water operations and is now running one of the largest departments in the country. I really look forward to discussing his challenges, his priorities, his strategies. Welcome Marty.
Marty: Thank you very much for having me here today. I really appreciate that.
Mahesh: Really looking forward to, so you've been at LADWP, and I'm not dating this, but you look really young. I can tell that having met you many times, but for 39 years, how do you describe your journey? What are the highs and the lows?
Marty: When I think about my journey, and 39 years is a long time in one spot. There's no doubt about that. It's really been remarkable. I was very fortunate to start when I was in college, working here during the summers, but started full-time right out of college and never looked back.
I never would've imagined a number of opportunities that have been in front of me. And even just in the one department. Being able to move around and do different jobs has been an amazing experience. When I think about the highs and lows. It's interesting. Couple things strike me. I spent about, at this point, probably a little over a third of my career in operations and in the water side, and you really see a lot of remarkable things when you're working with the field forces and you're working through.
Natural disasters and other things. I was in charge of day-to-day operations when we had a strike, when we had the LA riots, and when we had the 94 earthquake. When I think about both highlights and lowlights, it's interesting from an operational standpoint, sometimes the most challenging times that you have and times of adversity, especially in society, are actually the most single, most interesting times from an operational standpoint because you're really forced to be creative.
You're forced to come up with solutions on the fly. You're forced to do things that maybe people thought you wouldn't work that way. And you really have to, in my case, draw on my understanding of hydraulics and my understanding of the system to really serve our customers and get people back on their feet.
So as, as much as I always think about, again, earthquake, And I think how bad an earthquake is and how devastating it is operationally, it's fascinating in terms of what you have to do with the amount of experience you get in a very short amount of time. And so I have both highs and lows when I think of those things.
There's always challenges in the work you do, or a career. There'd be things that you look back on and some people call 'em learning experiences. I'd call 'em mistakes. Sometimes you do things they don't work out like you think they're going to. Or something didn't get accounted for.
And dealing through that. And I've had a few lows that I think about, things that I wish I would've done differently. But all that, helps to become a better engineer and a better manager and hopefully be able to educate next generation to, to avoid those same kind of pitfalls on the high side.
One thing that really strikes me is being able to be creative and innovative with solutions, and that's one of the things that I've been able to do a number of places, both in planning for future water facilities, really changing the way we looked at the system, changing the way we looked at our need for reservoir storage because of the new water quality regulations.
We had the service water treatment rule, disefficient byproducts rule, that really challenged these large open reservoirs that had been the backbone of our water distribution system and how we bypassed those or took them outta service or built filtration plants or other treatments and dealt with.
That was a complete twist on our entire history since William Mulholland had designed the water system. And so being part of that and being part of some different solutions, and even now in my current role, looking at how we deal with things differently dealing with workforce differently, dealing with diversity, equity, inclusion, and really tying to be an employer of choice, dealing with being family friendly. All sorts of things that are changing, and changing for how we recruit and hire and how we reach out to underserved communities.
All these are opportunities to be creative and to come up with solutions that are necessary and different than what we've done historically. And to me, those are some of the most exciting things that I do on a day-to-day basis.
Mahesh: It's fascinating and the fact that you have lived through critical events in LA's history while running a critical infrastructure itself is a real thrill. In many respects it's what defines you.
Marty: You get a lifetime of experience in a very short amount of time. And it's funny, I guess say I always hate to say that the earthquake was a tremendous experience because I don't want people to take it wrong, cuz obviously there was tremendous damage and harmed people in their lives.
But from an operational standpoint, we did things that we never knew we could do. And that actually laid the ground for a lot of other changes that we made. And so there's a lot of times adversity is a tremendous learning opportunity. And all you have to do is be open-minded and realize how much you're learning as you go.
Mahesh: Absolutely. Absolutely. Now you're running both water and power in this role, what many would consider right in the middle of the water energy nexus. Can you give an example of how you capitalizing on this nexus within LA?
Marty: It's interesting having both water and power. A lot of utilities are maybe water and wastewater.
There's a few smaller cities around us that are water and power, but it's really an unusual mix. And in our case, they're both big business. Our water business is very big. Our power business, massively big. I think we're the 14th largest power company in the country by looking at that.
So there are tremendous opportunities. When I look at the two halves of the business, at the end of the day, they're both still utilities. And so a lot of the concerns that exist in one exist in the other in terms of managing. But there are opportunities for us. We have a lot of hydropower and use of water.
Not just water for major hydropower that we maybe use somebody else's water in the state water system. But within the city of LA and our own aquatic system, we have a number of power plants that generate clean energy for us. At the same time we realize that water supply has been a critical issue in the power world in terms of, once through cooling for coastal power plants, which have to come offline and now have you the air cooling or circulating cooling. One power plant, we're looking at opportunity to use recycled water for cooling, which should be a game changer for us in terms of meeting regulations and saving what essentially was 90% of the costs are gonna be saved from what the other option was. So there's really some nexus that, and really integrating the two from the standpoint for us is really trying to look at not operating each utility separately. Try to not have that silo and trying to see how water and power really work together. When we have energy shortages. If we have a real hot day, I always have to say in LA we don't have a blanket energy shortage. We might have a little local energy shortage if we call for, saving energy.
The water system has actually been the single biggest responder of any business in terms of reducing power demand, and so there's a lot of things that we can do operationally, even on short terms to, to assist each other. It's funny that one of the things that I find very different about the businesses is the issue of storage, in water.
We store water and of course storing too much water can be a water quality liability, but it's there for fire supply and outages and that sort of thing, and the power over the world. The biggest adjustment in becoming more of a power person in the last part of my career is understanding that energy storage is extremely difficult and what you take for granted on the water side is practically impossible at scale on the power side and really the challenge of the future.
And it's funny, when you look at storage of water in a hydro capacity is I think 93% of all battery storage energy in the country. And for us, it's the biggest piece of energy storage that we have storing clean energy. So I think that we're lucky because we have a big utility, and there's a lot of big moving parts and pieces that we can combine together to get good results, and I think there's a lot of opportunities as we move forward in the water side, as we look to look at new local sources of water.
A lot of those occur at lower elevations, and there'll be more energy intensive. So how do we max the potential use of more energy on the water side? At the same time, we're trying to conserve energy and go green on the power side and make sure that those go hand in hand together. One system isn't undoing the goals of the other because we both have equally important goals that have to be achieved at the same time.
Mahesh: As a leader, a utility leader, it's fascinating that you are able to address these challenges or capitalize on these opportunities. Not man. In the US have such a balance of water and power. So I would say there are probably many people envious of the kind of entity you're running.
But I wanna shift to the water side. Cause that's where you spend majority of your time. And just looking in preparation for this podcast at your OpEx around $600 million, CapEx around $800 million. Where is your investment focus in the water space?
Marty: We do have some serious investments going on in the water side and in the water world.
I don't think there's many capital programs, certainly at a city level in that realm. We have a lot of work going on in infrastructure really. It was a few years ago, our replacement cycle for water pipe was over 300 years, and we realized that was unsustainable. And, of course age is not everything.
There's more than just age of pipe, but we did a lot of assessments over where we thought we were really looking at falling behind and being concerned about that. So we did a massive increase in water pipeline replacement, also trunk line replacement, because certainly moving water around is critical for us.
We've done massive amounts of work keeping our Aqueduct modern, which is built by William Mulholland, well over a hundred years ago. And the amount of capital work that we need to do to make sure that is operational year in and year out, we're certainly not gonna build another aqueduct. So the one we have now has to last forever.
And at the same time, developing new water resources, really committed to developing more sustainable resources. We're still gonna be an importer of water down our aqueduct, and also buying water from Metropolitan Water District who brings water from the Colorado River as well as the state water. But we know that we've seen from recent history particularly that those, supplies are tenuous and we don't know year in a year out whether they're gonna be available.
So we're committed developing sustainable water resources for the future. A lot of that has to do with water recycling and serious investments in that area. And then the other is about stormwater collection and then get into the groundwater basin and then a lot of that then takes place as a groundwater cleanup.
And so one of the challenges for us is the San Fernando Valley, where we have tremendous groundwater rights, is also the site of major Superfund projects. And so we've spent a lot of investment in cleanup projects over the years. We're currently constructing the world's largest groundwater treatment plant.
We have three satellite plants related to that, that are in construction or near completion. Really the challenge is how do you not just store water, but when your storage vessel has its own challenges, how do you get that water back out and use it? So there's a lot of investments in that area.
We had a lot of investments in water quality overall to meet again the new regulations for service water and disinfectant byproducts. Most of those projects after probably a couple decades of work are wrapping up, which is nice to see, but now they're being replaced by groundwater treatment and other more high level, nuanced treatment level projects that are really becoming a important investment for us for the future.
And of course then, like I say developing other resources is huge for us and developing, really, sources that are different than the ones that we utilize now, so that we have resilience for the future.
Mahesh: It sounds like you're investing across the whole cycle. The water supply, securing the water supplies, the water infrastructure in terms of distribution pipes, and then also the treatment facilities.
That's a lot of money. $800 million a year, over 10 years. That's $8 billion of investments and there's a lot of checks for you to cut. I wanna talk about, it's an amazing time because when I was preparing. I said, how are you dealing with drought? And then I look at what happened in last two months and I was in Northern California last week, Marty, and everywhere I see pools or ponds of water up and down that the Bay Area, all the way down to the Big Sur. But I think conservation is still a very important topic, even though you have temporary relief with the snow pack, et cetera. What efforts you believe you'll take from here on in the future to drive more conservation?
And then I also want to couple that with the rates, because LA where there's a big dichotomy between, the haves and the have nots. So on both the conservation side, on the rate side, how are you managing your business moving forward?
Marty: So that is a very interesting question to deal with. When I look at it, I always say we are in a very funny business.
It's the only business I know of where you pay people to buy less of your product by conservation programs and incentives and refunds and rebates. But it's very true. No matter what happens with this year's rain, and we're at about 300% of normal in the Eastern Sierra, we're doing the final numbers, but we believe we're probably looking at the wettest year on record.
But that said, that's this year and we know that storage will last a certain amount of time. Hopefully a lot of that water is caught and put into storage that's durable like groundwater storage, but all over the state. That'll be a challenge. It'll be a challenge everywhere to see. You know how much of this runoff we can catch and how much can be put to use a lot will run to the ocean will be concerned all over the state about damage.
And it's a world of feast or famine. And I think we have a lot of projects geared, not just in LA but around the state, really geared at trying to do a better job of catching that runoff, cuz service water storage is just gonna have a certain limitation. It's a huge role to play, but can't catch everything.
And building new reservoirs is problematic at every level, especially with environmental considerations. But getting that excess water to groundwater basins and especially where plumbing may not exist, to divert that water and get it soaked in the ground is gonna be huge towards capturing that. But given that we're still gonna have dry years, and I think from our standpoint, while we're looking at backing off our number of watering days, cuz there's just no reason to have that kind of restriction.
Conservation is a way of life in California. It has to be because we have to plan for the worst-case condition at any year and make sure that we're able to withstand that. I don't think anything could be worse for society or the environment, for people's lifestyles and then having a yo-yo effect year in and year out as to what they can do with water.
And we looked at, even at these last few years, we've really stepped up our push and increased our rebates for drought tolerant landscape replacement at homes. And one of the things we realized that people cut back watering days is how many hundreds of millions of dollars of landscapes are at risk.
How do we make those more resilient for the future? So just because there's water available doesn't mean we have to find a lot of water. There's still ways to store that water. There's ways for that water to be used, very beneficially for the environment. We don't need to just adopt wasteful practices just because the water is there this year.
We are married to water conservation. We've been at it since the eighties. Really driven our demand down. And when we do that, we also drive the, the customer cost down. One of the challenges you mentioned about equity in our programs is how do you find programs that are really useful for everybody?
And we have the same challenge on the power side, where we look at like solar rooftops and other incentives and realizing that in LA almost two-thirds of the residents do not own the roof that they live under. And so when you have a project, whether it's a landscape project or a solar project or something that's tied to the property, maybe two-thirds of the people cannot participate in those because they don't have the ability to invest in something then that they don't own, and they may not reap the benefit.
So it's a challenge in that way. So one of the things we're always looking for is programs that can fit every customer, that can fit everyone, because we need everyone to be able to save. We realize that, in terms of supply, when there's shortage, anybody saving helps everybody, but at the same time, it's that resultant bill that we need to make sure is fairly distributed so that people pay their fair share, but are also not paying someone else's fair share for the infrastructure that's built just because that person had programs that reduce their demand.
And one of the things that we've got in Los Angeles is all of our charges on water and the predominant portion of charges on power are all volume. And so we don't have a water fixed charge. So though, because of that, there's no standard collection to pay for infrastructure. And that means that every bit of money we bring in is built on how many, how much we sell.
And so when people can reduce their purchases, they pay less for the infrastructure that supports them. And in the water world, we all know that water infrastructure is driven by fire demands. Pipe sizing is driven and water storage is driven by fire requirements, not necessarily driven by what people use day in and day out at their homes.
And so trying to balance that equation is something we're always after, trying to make it fair to all of our customers so that there is something in it for everyone, something they could take advantage of to reduce their bills, and ideally it let them contribute toward making yellow more resilient and more sustainable, and at the same time more affordable.
Mahesh: Yeah, so tough job on one side. You gotta maintain the rates. On the other side, you're telling them, use less of my product.
Marty: It's a weird business to be in.
Mahesh: Yeah. Yeah. Circular economy is a huge topic. The one that really brings it home for you is recycled water. You have a current mix. You have a mix of where you get the water from.
LA Aqueduct and Colorado River Aqueduct through Metropolitan Water District, straight Water Project, some groundwaters. How is this mix gonna change for you in the next 10 years?
Marty: So we have really made a move toward looking back internally at the water that's here in Los Angeles. It's interesting, I say we spent a hundred years looking externally to bring water supplies and develop more water supplies coming to LA and now at this point, we're refocusing back on ourselves internally and looking at the water that we already have in our possession.
And so with that, we have one project called Operation Next. That's a big recycling project in partnership with LA Bureau of Sanitation, LA San operates the city's wastewater plants, and the plan is to be able to ideally recycle all of the wastewater going to those plants and make it usable. Right now we have water that people call purple pipe water. It's title 22 Water that gets used for irrigation. It's a drop in the bucket for what we use in terms of overall water use. We're proud that 80% of the city's golf courses are city-owned Golf courses are on recycled water. A lot of green belt spaces on recycled water, but even then that recycled water use is seasonal.
It's used a lot in the summertime, not much in the wintertime, and so it really doesn't optimize that water source all year round. By going to advanced treated recycle water, we can get this, source of water that's already in the city's possession, back into circulation, basically in a short circuit.
The water cycle, instead of waiting for the go get evaporating and go up and become snow and rain and hope it hits to the right place and there's not a dry year, we get it right back into the system. A lot of it'll take place as groundwater recharge, back in the local groundwater basins. And some of it may eventually take place as inflow to our filtration plant where it would mix with other water, which of course people say we put in recycled water as inflow to your filter plant.
20% of the water in the state water project is already recycled, but somehow during the 300 or so miles down, the state water project is just by mother nature and it must be new again. So we know that there's no new water in the world, then people in the water business get that. And depending on where you are on the river, you know that you're using somebody else's effluent as you're influent, and we know how to treat that.
So I think as we work with stakeholders and work on a big robust communication plan, people are understanding that water can be cleaned up. The technology exists and it's important that we build systems and capability to use the water that we already have in our possession because we know not every year's gonna have enough water to import.
And also when we do import that there's impacts in the environment that come from the areas that we bring the water in from. And we wanna make sure that we manage that the best way we can. So in the future, we'll be really looking internally at sources of water. There's probably enough recycled water to make up 40% or 50% of the city's water use.
And then of course you always have to add water to that cuz not every bit of water use is indoors. It's the same thing. So we also have groundwater recharge with stormwater and so there's a Measure W in LA County, which is a big step forward, a big increase on property tax to pay for water recharge projects, storm water capture, and as well as we'll put our own money to those projects as well.
Really to catch the storms that hit in this area. Try not to let that water run off to the ocean and try to get it into our possession underground so we can pull on it when we need to. And I think those things will really shift the water supply from being predominantly exported water coming into the LA Basin to being a very large portion of water here, located right under our feet.
And when we do that, we'll also be much more resilient as a city because we will be less reliant on the supportive water that all the Aqueducts cross the San Andreas Fault, they're all susceptible to interruption. Not just climate change, but just physical interruption. And having as much supply generated locally and stored locally as we can will really give us a kind of resiliency.
And then year in and year out, ability to rely on a good water supply, something we can plan on and not have the kind of crazy reactions that we've seen the last few years during the drought.
Mahesh: That's gonna be an amazing shift. If you see in the next 10 years that 50%, you're gonna insource your own water wastewater, that's gonna be a big shift, and that'll have and earthquake like implication to everything else, whether it's metropolitan water districts or wherever you're getting the water from, right?
Marty: Yeah. And with that, metropolitan has a project similar to ours to recycle with LA County sanitation districts. And together they create a huge amount of water locally in California.
I will tell you when it been raining like crazy and it didn't take long to wait for a rainy day these last few months in California. If you drive over the LA River, you see a massive amount of water, and the problem is LA was built fairly steep. Water runs off quickly, and it's built to get rid of water to avoid flooding.
We've captured more water this year than any other year in our history, but when we get better and better at capturing that water, we will have tremendous local supplies. That'll really be a game changer for us.
Mahesh: Yeah, huge and really positive news. What you're sharing here, for those at least that are worried about the drought, you're in the infrastructure business, of course, you're in the clean water business part, but at the end of the day, underlying each of this infrastructure, and talk about water for now. There are massive amounts of assets, 7,400 miles of pipe. You talked about the replacement cycle as 300 years. So there is one pipe in there. It might be at least a hundred, 200 years old still in the ground. Chlorination stations, pump stations, reservoirs. And you ran operations obviously for a third of your time.
What are the secrets to Running a well-oiled machine that not only is reliable, but efficient from your experience being in the water operation side?
Marty: This reminds me of a situation I had when I was senior GM of Water a few years ago. We had a real large number of pipe breaks and at the same time we were going through try to address our water rates.
And it seemed like we had everything breaking at once. It actually wasn't all that bad, but they all made the news and so we got a lot of notoriety. And if you looked at our track record, our leak rate was actually very low and had been decreasing because we've been very strategic about pipeline replacement and about addressing the worst pipes.
And when I look at age of pipes, 30% of our pipe is over 80 years old. We've got pipe that's a hundred years old that when you dig it up, it looks brand new. We've had pipe this 30 years old. When you dig it up, it's got some problems. And so it's more than just age, installation, condition. It's materials, it's the back fill, it's cathartic protection.
It's everything. And so we've gotten pretty educated about really assessing what pipe we think is at risk. One of the things I told my commissioners at the time, I said, I can't tell you the pipe breaks that didn't happen, but I can show you the track record. And the track record says that we're choosing wisely and while we're gonna have breaks, there's always gonna be breaks.
I said, if we ever get to the point there's no pipe breaks, then I'm wasting money. I'm wasting money on infrastructure that it doesn't need replacing because then I've replaced things that obviously were perfectly fine. And so it's that question of how you evaluate that and assess that. And we've done a good job historically, but we've done an even better job recently with much more data, much more modeling.
Of where we see the risks and where we see, the real of the vulnerabilities in the pipe and going beyond just age and classification of backfill, but really trying to target that. And I think if you look at our track record, we've been successful because the number of pipe breaks always trends down.
And that's what we wanna see happening. We've been increasing our pipeline replacement overall, just cuz we realize it doesn't matter what. 300 years is not sustainable. So our target is to get a life cycle of around 150 years if we did that by increasing our replacements of mainline. And so right now we're replacing about 210,000 feet of mainline a year, and that's a lot of pipe. There's a lot of pipe year in and year out. And that is predominantly done entirely by our own field crews, which also gives us tremendous capability when there are leaks because it means we have a huge staff that knows exactly how to deal with the emergencies, how to deal with breaks. We'll be able to deal with an earthquake and that sort of thing.
But by doing this rate we had a massive increase, probably, in the last decade of rate of replacement, and that's getting us to where we need to be. In terms of the long-term plan, one of the other things we did is we started looking at some of our older facilities like pump stations and tanks. And I remember looking at the capital budget a number of years ago, and we would have projects that would say, we need to replace this pump station.
And then when you look at asset management and it's why do we need to replace that? What's gonna actually fail? So we took a much more discerning look at, do we need to actually replace this facility? What if it's big enough, what's gonna go wrong? Is it on bad soil? Do we need to replace the headers?
Is the roof gonna collapse? What's gonna fail first? And how do we stop that? And really looked at how do you get the most out of the existing infrastructure out? Just replacing it, because my house is quite a bit older than me. It hadn't fallen over yet, and I don't know that it will fall over.
I don't know if it'll ever fall over. So do I ever need to rebuild it? And that's the question is there are things that we've built and we've built them beyond standard and to last. And so when we do that, the question is if we just need to keep it going, if it's fine and it meets capacity, it meets our demands, how do we maximize our rate payers' funds by investing in what we need to and not just saying we need to build a new one?
And so that's actually been a good way to maximize the use of existing infrastructure. And really optimize that useful lifespan and extend it by really looking in more at a component basis. One of the things we did on our pipe that's interesting to mention is that, we've started putting in earthquake resilient pipe.
There's a product from Japan we've been using. There's some other products we're looking at. We know that we've gotten lot of pipe breaks during earthquakes. We think the earthquake resilient pipe, at least in our backbone network will really help us to do well and perform well in the next kind of disaster that we have.
So we started, I think we're the first ones in the US to do earthquake resistant ductal iron pipe. Back in 2013 and now we have a regular system that our own crews put this pipe in certain installations, and including earthquake resilient fall crossings on trunk lines. We're doing the first one ever in one of our trunk lines where we know we're crossing a place that's gonna give us problems in the future.
We're trying to avoid those problems now. So this also helps to really extend the life of infrastructure going forward that we're putting in infrastructure that should last through the kind of disasters that we might expect to see.
Mahesh: These are, we're talking 7.5. Richter scale resistant levels?
Marty: Yeah, and what it is a pipe that allows a has a sleeve that allows the spigot to insert inside the bell further, and actually allows for a certain amount of bending as well without leaks.
When you look at the 94 earthquake, we had about 1500 pipe breaks, and a lot of that was the bell and the spigot of cast iron and ductile iron pipe slamming against each other. And so this would completely eliminate that. And then it allows water to stay on in a critical backbone network that would be able to feed hospitals and other critical users.
And really help us out that way. Plus then you have a lot less to repair at the end of the day as well we think that things like that are, not just infrastructure replacements, but actually improving the kind of infrastructure we have as well.
Mahesh: No, it's fascinating. You're taking a sniper approach and a shotgun approach to how you replace your assets and then you're cutting your replacement from 300 years to 150 years with a crew that's doing 10,000 feet per year.
That's if I understood your number correctly. That's a tremendous experience and tremendous statistics to talk about. I wanna talk about technology cause I know in the past when you and I talk you're a big fan of technology and for different types, even those black balls, if I remember that right?
Or just digital technologies that we know of today. That's more in the news. What are you most excited about? Can you give some examples that you feel like you, you wanna deploy?
Marty: It's very funny that you mentioned the black balls cuz maybe not all technology is high tech. Some of it's just new ideas and so when I look at technology, cuz we don't think technology in terms of electrons and IT type tech, but it's also innovation and innovative technologies.
And so we did do the shade balls. You mentioned that the 96 million balls on LA Reservoir, which actually reduced our evaporation. Essentially eliminated our use of chlorine in the reservoir, which reduced well over half our need for chlorine in the entire water system, and solved a aluminum water quality problem with a very low tech, but very innovative solution at the same time.
Right next to that, we have both the second and third largest UV disinfection plants in the country. One on each end of that reservoir. An entirely new technology to us. Not entirely new in the water business, but entirely new to us, and certainly new at this scale. Only one bigger is the plant treating the water in New York.
So when I look at those technologies, we've done a lot in terms of moving in water treatment. One of the other areas that we're moving a lot in is in some of the monitoring, a lot of monitoring technologies really advanced recently in terms of getting sensors out in the system, being able to look at pressure transients.
Getting more data about the water system. And a lot of that now ties into direct modeling where you take real time information in the system, have a run through hydraulic modeling, and get a lot better information of what's going on out in the system. And those technologies were really in their infancy.
I'm not sure they even existed a decade ago, but, and until the last few years when they've really stepped up in their application, and so we're engaged in that. Some of it is engaging in pilots to find out which products actually work best for us and might be of the best use, but we're certainly, they have a very robust innovation program and a lot of that is aimed at accessing new technologies, really trying to find how to plug those into the water system.
I find myself at a different situation between water and power, I might say, because in the power system everything plugs in, it's all electric. In theory, it's easy to monitor, it's easy to do. Remote metering. You have to collect data, but it's very different in the water system where so much of what we deal with has not changed in decades, if not hundreds of years.
In terms of the actual physical infrastructure we're trying to put technology on large pieces of cast iron and stainless steel and things that are buried in the ground, and it's a very different world. We've done a lot in the technology world. We did a lot with water treatment, working at our filter plant.
We actually worked some products from. We called it Lab in a Bucket, for lack of a better name. It had an actual commercial name, but it was this kind of water quality monitoring on a very small, like a card type basis where you'd get electronic monitoring of water quality. And we actually rolled that back to folks in Paris in preparation for the Olympics and working in conjunction with them.
And there's a lot of things out there that we have the ability to test because we're a big utility and have a lot of places to play. But we're very interested in what's out there and how we can modernize. One of the things we did with technology recently this last summer. We wrote out a program at the flume meter.
A flume is a third party basically a strap on meter. It straps on to a regular water tumbler meter, and gives an electronic signal to both the homeowners and us about water use. And it was a way to get around the fact that we don't have a remote metering for the water right now, right?
But it got us the ability to get that in customers' hands at a very cheap price. Get the customer some real time data, get us some data as well. And there's nothing to say to that meter read off that flume is any less accurate than the actual meter that physically moves and physically passes water?
So I think we're learning a lot that way in terms of how we might take advantage of third-party products and other things that could help us shortcut our way to the future and the information that we need.
Mahesh: No, it's exciting times for sure. When you talk about technology, you talked about Paris and Japan, I know you've been very actively engaged with your peers around the world, and I've seen some of the events that you actually also hosted in LA with your peers, what have you learned, that they're doing? That you picked up, saying, I wanna bring this here.
Marty: One of the things that we've really emphasized in the last decade with part of our innovation program is really reaching out to other utilities and seeing what they're doing. Try not to reinvent the wheel, trying to take advantage of things that they're doing.
So other utilities around the world. You can look to Singapore for water recycling and the advances that they've made and they've been very willing partners with other utilities around the world to really try to advance the technology surrounding that to make more water supply accessible and available.
But I look at not just utilities, but also companies. We did recently engage with Canada. We've had several what we call roadshows where the Canadian Consulate set up, at one time, of the many of two dozen companies coming in to talk to us about products and they gave us a list of companies that had things that were in the technology area and some of these were some water treatment. One actually was a pipe liner, so I wouldn't call that high-tech, but as a new technology.
And we went through and looked at the ones we thought had application to us and they brought them in for a couple days of going through and presenting. And some of those materialized into projects that we took advantage and partnered on. Did one recently with around a dozen companies that came from Canada and we talked a lot about the hydraulic modeling and just performance of the system, asset management.
So besides, the typical things that you see, different kind of devices, measuring water quality. We did a similar thing once with Spain. Have not had as mature relationship on that. Certainly France, because of the Olympics. There's a lot of synergies going on in terms of preparation for the Olympics.
We also worked with Salt Lake City after their Winter Olympics on things that they did to watch and monitor incoming water quality. Sometimes the best things you learn are the things that people tell you don't do. They said here's what we did. Do not do it. And those are fascinating experiences and examples.
So we've done a lot along those areas. In the power world, we had folks come over from Lithuania talking about power transmission and things that they were looking at considering over there in terms of their real energy independence. And wanted to talk to our folks and get our take on what they were doing and look at some of the studies we've done and wondering how to replicate those things themselves.
So it's been a very good two-way street in technology and we're happy to share what we've learned and things we've come up with. And at the same time, really happy to learn from others and to find out, what products are out there. Not everything fits. One of the things that was tough early on was people bringing us ideas that didn't really fit what we needed, but when we started saying, here's what we need, do we have ideas that fit? And trying to just turn the table on that a little bit. We got a lot better results and a lot of people were able to bring us products and ideas and thinking that we think we could really take advantage of.
Said it's helped us a lot by expanding the community that we deal with just outside of our local community and union outside of the US to really deal with people that are leading in many areas of the water business and the power business as well.
Mahesh: No, it's fascinating. I love the fact that you've seen so many events in the history of the City of LA and now you are talking about the Olympics. 2028, if I remember it?
Marty: Yes, that's right.
Mahesh: And making sure all of those have hundred percent power and a hundred percent of water that they want to use.
Marty: And Olympics are tough because it's not just the city of LA. It'll be areas that are supplied, powered by Southern California Edison, a number of other water agencies.
We are expected to play a big leadership role in all that, but a lot of it'll be out of our control. So there will be a lot of opportunities to partner with other agencies as well to make sure that no matter where you go for your Olympic experience, that doesn't change by what locale you're in. And that's another important thing that I look for.
Mahesh: Right. Now, working in a big city like LA is no easy task. There's no question. And you must be answerable to many commissioners, mayors, other departments, residents. What's your approach to running a department in one of the most complex cities in the world?
Marty: One of the things that was important to me in thinking on this role was really understanding our role as a city department. The department of water and power goes back a long way, and we've done a lot to make sure the city's had the water and energy, but a lot has changed over time. Governance remained the same, but interest in what we're doing has changed. Particularly interest in, the environmental impacts and the implications of what we're doing and how we're addressing that.
Before CEQA came around and the whole world of environmental documentation came around, it was a much different ballgame. And so one of the things that was important to me was really understanding our role as the city department and how we're not just the provider of water power, but actually a real benefit to our customers and to the city family that owns us.
Our rate payers are our stockholders. We need to show that there's value to having a city department that provides your water and power and not just, matter of turning on the lights switch or turning on the faucet and sending a bill every month. So for us that, that means that we have a bigger responsibility, a bigger social responsibility to the city overall.
Equitable access to water and power has been huge for us. I mentioned our programs and how we protect that, how we look at how rates are structured so that we are not only competitive, which we are extremely competitive. Our water rates are in the middle third in California, we're amongst the very lowest in the state for power, and we don't want that to change.
At the same time, a lot of people are still challenged by the ability to pay, and so making sure that we move forward in a way that doesn't leave anyone behind that is fair to everyone is hugely important. Not just us as a business. But to the city functioning as a city, it is definitely a complex place.
LA is extremely diverse. You have some of the richest of the rich and 40% of the people below poverty level, and so you have extremes that all have the same basic needs for the services that we provide. Really water and power really lets society happen. And so if it wasn't for, the water system that was built, LA would not be Los Angeles.
And of course, nowadays nobody can get by with, without that power for more time than it takes for your battery to run down. So we take our role very seriously. There's a huge amount of interest in what we do, in doing it correctly, and a huge amount of interest in us becoming greener and becoming more environmentally friendly as we do that.
So how we go about our business is as important to everyone as actually doing our business, right? There's a lot more expectations about how we communicate with customers. About how we're able to modernize. And that's one of the challenges for us with technology is that, we're very far behind.
We're no Amazon or anybody like that where you can pick up your phone and do everything in a matter of seconds. But we want to get there. But to modernize ourselves to get there was gonna take a big lift. But that, I think, will help our customer base a lot and really meet the expectations that the city has for us.
But to me, understanding our role in the city is Understanding our commitment to customers. They have a water and powered department for a reason. We're not a contract agency. We are belonging to the city for a reason. We need to make sure that reason is always in the forefront of our minds.
So we give everyone the value that we're committed to.
Mahesh: Yeah. What I find very interesting, Marty, in the response you gave, even though you've been 39 years and you reached the top of the house, You still actively asking what's the value for department beyond supplying water and power? That tells me a lot about your leadership and the purpose and the mission.
Just not sitting in that corner office after working your way all the way through these years. So that kudos to you. And I'm not saying it because I have to say it, but I'm saying it because I met many CEOs in my life through all these 25 years.
We are in the tail end of the conversation and I wanna ask two questions now. Talent gap, it is a big issue in the sector as a whole. Certainly, I assume is a big issue at LADWP. How are you filling this gap?
Marty: This is a real challenge, I believe for us, is talent gap. It's funny cuz coming up in the engineering ranks, I always think of technical skills and we are pretty competitive in that arena, but we're noticing this, the world's changing kids outta college.
Your ideas of what work looks like. Where they should come to work, be able to work from home. How we change the nature of work to meet what people will sign on for is something that's in an evolution right now. But the biggest gap I see actually is in the field forces. And there's just not as many people coming outta high school and college that are looking at skilled trades as areas of work.
And I think you see this, for a while you saw the utility industry, particularly on the power side, but I think you start to see it in all of society. We need people to be able to work with their hands and be smart and deal with skilled trades. And it's a tough challenge for us. And I will tell you on the power side, the shortage of electrical line workers has been a huge issue.
All over the country and really acutely an issue in the West and something that, that we're struggling with and it impacts all of our goals moving forward. There are some ways I think we could solve this. I think really looking at particularly underserved communities, local communities here in Los Angeles where maybe people don't know about the jobs that are available.
There are really good paying utility jobs that are available that they take some training and some effort, but it's training and effort that we're willing to provide and willing to get people to get into this. I think that, we're working to really diversify our workforce. We're very diverse, I say, horizontally, but not very diverse vertically sometimes. And so we're working. We have Engineering groups. We have a Society of Women Engineers, society of Hispanic Professional Engineers the National Society of Black Engineers, all engaged in really helping us recruit top talent. We're working with our IBEW Local 18 chapter that's a union that represents the majority of our workforce on, how we increase opportunities for people to come in, how people can come in and get training on the job and qualify for civil service classifications.
And at the same time we're looking at civil service rules. How do we honor the civil service system, but make sure that the testing and the criteria that we're using are pertinent to the job. Are there ways to qualify people based on junior college classes they take or things that would speed up the hiring process and really make these jobs more accessible to more people? I think there's a lot of people who would do this work if they knew more about it and knew how to get their foot in the door. And I think that's one of the challenges for us is how to make the work more known and more available. But it is a real challenge overall.
And then one thing we're doing for sure is to reach more to high schools, and we did work with Crenshaw High 10th grade class on branding. It's fascinating what a hundred and thirty 10th graders gave us back on branding. But one of their suggestions was, you need to start this in middle school. So that kids have something to look forward to and something to aim for, and something to understand is out there.
So it tells us that we need to keep targeting a little bit younger and getting these ideas in people's heads that there are jobs, there are opportunities. Not everyone's cut out to go to college. Not everybody has to go to college. There are things you can do to really good, meaningful careers that cover a variety of skills and a variety of interests.
And yeah, we need to make sure that we tell people about those.
Mahesh: Yeah. And you thought going to high school is good enough to change the minds and the high school kids are telling you to go to middle school?
Marty: Yes. It was a eye-opener. It was it interesting.
Mahesh: That was crazy. So here's my last question. What do you want your legacy to be?
Marty: I'll tell you one, one thing I didn't want it to be, I didn't want it to be about, I managed through Covid and we survived. That seemed way too simple and shallow. And then that's one of the reasons that I, continue to want to do this job is I haven't seen through the things that I like to do.
I came in on the heels of some controversy involving our billing program. And we've gotten past that. But I think we still have a lot of work to do to build trust with our customers. And to have people really turn to us. One of the difficult things being a big utility is I know a lot of small cities people take local pride and I'd love to see that local pride as a big city, we have pride in the Dodgers and we have pride in the Lakers, but I'd like to have people have pride in their utility as well.
And to do that, I think they need to see us doing the right thing. They need to see us serving their needs. They need to see us being responsive. See us being efficient and really hitting all the things that people care about. People care about their neighborhoods. They care about the quality of life.
They care about their environment, and we need to do things that support those interests to really regain our customer's trust and have them. Proud in who they have as serving them as their utility, and it's really the utility that they are the owners of. And I want us to be known as being excellent. I want us to be known in the utility business as doing a top-notch job.
I know there's other utilities that do a fantastic job and not to take away from them, but I wanna make sure we're recognized right amongst them as being at the top of our game. Being amongst the best of what we do and people knowing they can both trust us and listen to us and know that what they're hearing are good ideas, good thinking, and really a solid path forward.
We sit in a place where we set a really big example for others. We drive policy change. When we did low flush toilets back in the nineties, I guess it was, maybe it was the eighties. After a while we had such an effect on the market. You could not buy anything but a low flush toilet after a while and the whole world has changed.
I think we'll be making changes in our power site for fuel mix changes, looking at green hydrogen and other things. Already things we're doing are noticed around the world, but I think these things will be of national significance, and I think that's a huge responsibility that we carry. And we need to always remind ourselves that we are setting an example, we are setting a pace, and we have the opportunity to really mold the future in a very sustainable way.
And at the same time keep up the level of service and reliability we always have had in the past. And so to me, those, as we embrace that responsibility, that's what I want us to see us be. And that's the legacy I'd like to leave.
Mahesh: It's fascinating Marty to see you lived through the major LA events, now preparing for Olympics. You fundamentally transformed your replacement cycle from 300 years to 150 years. Focused very heavily towards creating this legacy that views LADWP at the same level as some of the marquee teams.
This is ambitious, but it also reflects the kind of vision you are trying to drive at the organization. So it's fascinating to hear you, fascinating to listen, and I certainly wish you all the best of luck and thank you for being part of this podcast.
Marty: I really appreciate the opportunity to be here with you today. So thank you very much.