New director brings change to troubled Lodi utility

LODI, CALIFORNIA - If hard work alone could fix the Lodi Electric Utility's financial troubles, new chief George Morrow would have them solved by now.

Twelve-hour days have been the norm for Morrow, the utility's director since Jan. 23.

"I've been trying to dedicate myself to the job and set an example for others," said Morrow, 52, who previously led the city-run utility in Independence, Mo.

And others notice. Now when he arrives at 6:15 a.m. he's not the first on the job.

"I was excited that I was the second one there," he said, although he's typically the last to leave at 7 or 8 p.m., to the detriment of his golf game.

Morrow is beginning to make some changes within the cash-strapped utility, which has the highest rates in California after the City Council imposed a major hike in December to keep the utility solvent.

On May 3, the council approved his recommendation to renovate - rather than tear down and rebuild - an aging substation for a $3 million savings, obtaining at least 80 percent of the benefit at slightly more than half the cost, according to Morrow. Council members also backed his plans to sell nearly $400,000 worth of surplus electrical supplies purchased eight years ago as part of a plan to extend electrical service, through the Woodbridge Irrigation District, to the Turner Road winery formerly owned by Sebastiani.

City Councilman Larry Hansen said he is happy with Morrow's first 31/2 months in Lodi.

"One of the reasons that I believe he was hired is he convinced us he had really sound management practices, that he was conservative and believes strongly in having an electric utility that was financially stable," Hansen said. "I've been very pleased with the steps he's been taking, because they're pretty strong."

Morrow graduated from the University of Texas, El Paso, with a degree in electrical engineering and no idea he was headed for a career in the utility business. He had job interviews his senior year with Rockwell Aerospace, Texas Instruments and El Paso Electric. The utility was the first to offer him a job, so he took it.

"When you're growing up, you really don't know what you're going to do," said Morrow, who is renting an apartment in Lodi, while his wife and 20-year-old daughter have yet to move from Independence. "I know I was very good in science and math, so engineering made sense. I didn't know if I was going to be in the electric side or software."

Morrow spent 10 years with El Paso Electric, then six years as assistant general manager for Pasadena's municipal utility. He was head of the Independence electric utility for 11 years, serving one year on the board of directors of the American Public Power Association, before resigning in November to seek job opportunities in California.

After Lodi fired utility director Alan Vallow in August, the city contracted with the Northern California Power Agency, a consortium of municipal utilities including Lodi, to provide one of its staff members to take over until a permanent director could be hired. Morrow was the only one of six finalists for the job who had led a municipal utility.

"He's got a proven track record," Hansen said. "We did our homework, and he did a good job in Missouri of making that utility fiscally sound."

That task likely will be a long process in Lodi, which will operate $6million to $7million in the red this year, consuming all its reserves. Morrow said it may take five years before the city- owned electric utility is stable.

NCPA officials said Morrow's experience with utilities in the West, Southwest and Midwest gives him a broad perspective that can only help Lodi.

"He bring a lot of experience," said Jim Pope, NCPA's general manager. "He understands the financial world and the basics of running a utility. I think George will be a real asset in working together with the other utilities."

First he has to keep Lodi's from falling in the red. Lodi has purchased most of its power through the rest of 2006, and Morrow hopes wholesale prices don't spike as they did in 2000, 2001 or last fall. That's why he can't make a no-new-rate-increase pledge.

"PG&E is pretty much into rate increases every year," Morrow said. "There's so many new things coming as us that add cost pressures."

One is the historically high cost of natural gas, the fuel that generates most of California's electricity. And population growth creates demand for more electricity each year, he said.

Morrow said it's a matter of time before new nuclear plants are built to provide power for Californians, not only because they may become cost-effective, but because they don't emit greenhouse gases.

Morrow said he supports new solar and wind projects - most anything to encourage a mix of energy sources and reduce harmful plant emissions.

"There's nothing as invigorating or exciting as the California market," he said. "There's something new or dramatic each day."