Politics

Consumer advocates seek interest payments for overbilled DWP customers

The Reflecting Pool surrounds Los Angeles Department of Water and Power's headquarters in Downtown Los Angeles
The Reflecting Pool surrounds Los Angeles Department of Water and Power's headquarters in Downtown Los Angeles
Kevin Ferguson/KPCC

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Consumer advocates on Thursday said Los Angeles water and power customers who were overcharged during the flawed rollout of a new billing system should also receive interest on top of any refunds they are entitled to. But attorneys representing customers in a class-action lawsuit stemming from billing fiasco disputed the idea. 

A proposed settlement of the lawsuit filed on behalf of thousands of Los Angeles Department of Water and Power customers  goes before a Superior Court judge on Friday. The utility rolled out a new computerized billing system in 2013 before flaws had been corrected. Some people were overbilled, others underbilled and some people went months without receiving any bills.

The lawsuit was filed a year later on behalf of overbilled customers.

Jamie Court, president of Consumer Watchdog, wrote  a letter to Mayor Eric Garcetti asking him to order city officials to pay interest with any refunds.

The settlement proposes giving full refunds to customers who overpaid. Consumers could start receiving refunds by the summer if a Superior Court judge gives preliminary approval to the $67.5 million settlement on Friday.
    
"It's incomprehensible to me that ratepayers would not get interest on money that was taken from them illegally," said Court, whose organization is monitoring the lawsuit, but is not a party to it.

But DWP spokesman Joseph Ramallo said the interest that customers would be due would probably be less than the cost of figuring out the total interest for each customer.
    
"We did not think it made any sense to burden all ratepayers with the (computer) programming cost for what would be very minimal interest," Ramallo said.
    
That's because "each affected customer would have a different circumstance, different period and potentially multiple periods at varying rates over time,"  Ramallo said in an email statement. The interest to be paid out could amount to less than the computer programming to accurately calculate the interest, he said.

Some interest would be paid in the limited circumstances where customers had unrefunded deposits. In that case, DWP policy would require the interest to be paid.
    
Attorney Tom Merriman represents DWP consumers in the class action case. He says interest payments are not common in consumer class-action lawsuits where payouts are often far below what consumers lost.
    
"For a settlement to be delivering 100 percent of every penny overbilled, that's a great settlement for consumers," Merriman said.
    
The estimate of refunds, now at $67.5 million dollars, could climb higher as an independent monitor appointed by the judge combs through bills issued in the flawed rollout of the new billing system in 2013. That's up from an estimated $44 million several months ago.

Customers who were underbilled are not being made to pay the difference, Merriman said.
    
A preliminary approval of the settlement on Friday would start a 90-day period during which attorneys for both sides would inform overbilled customers of their rights to join in the settlement or to take some other action, like challenging the amount, opting out of the lawsuit, or bringing their own case. For now, there is no action required of consumers to remain eligible to receive part of the settlement, Merriman said.