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DWP overbilling settlement gets conditional approval from judge

This April 7, 2010, file photo shows the exterior of the Los Angeles Department of Water and Power in Los Angeles. A new Department of Water and Power billing system cost ratepayers millions in erroneous charges. A judge on Monday conditionally approved a settlement that would require the utility to pay back every customer who was overcharged.
This April 7, 2010, file photo shows the exterior of the Los Angeles Department of Water and Power in Los Angeles. A new Department of Water and Power billing system cost ratepayers millions in erroneous charges. A judge on Monday conditionally approved a settlement that would require the utility to pay back every customer who was overcharged.
Nick Ut/AP

A judge has granted conditional approval to a settlement that calls for the Los Angeles Department of Water and Power to pay out tens of millions of dollars in refunds to customers over the botched rollout of its new billing system.

DWP has blamed accounting giant PricewaterhouseCoopers for failing to install the system properly in September 2013. The new system led to customers being overbilled for late payment charges, calculation errors and estimated bills masking leaks or electricity loss, among other reasons.

Under the proposed settlement, any customer who was overcharged will receive a credit in the full amount they were overcharged, according to the DWP. Anyone who is no longer a customer will receive a refund.

The DWP has said the total payouts would be less than $10 for most customers, though in total the deal would cost the utility $44 million.

DWP praised the decision Monday from Judge Elihu Berle.

"With this agreement, every customer who was affected will be repaid 100 cents on the dollar. It also includes benchmarks and key performance indicators that we fully intend to meet and report on to an independent monitor appointed by the court on a quarterly basis for 18 months," the utility said in a prepared statement.

L.A. Mayor Eric Garcetti called the ruling a "big step towards closing the chapter on overbilling at the LADWP."

"As we continue to strengthen the performance of our public utility and improve customer service, this settlement implements reforms that will prevent this from happening again," Garcetti said in a statement.

DWP touted its progress in fixing the problems with the new billing system, noting that call hold times have dropped from 30 minutes to below three.

Consumer advocates were less pleased, noting that Tuesday's decision was the third time Judge Berle has postponed granting full preliminary approval of the settlement. Consumer Watchdog called for several changes to the settlement.

The advocacy group said some customers are currently paying installments on bills they don't actually owe. The group called for known refunds and credits to be issued without delay.

It also said DWP should accept a smaller deposit from customers starting installment plans and that the utility should not be allowed to threaten disconnection to force customers into repayment over incorrect bills.

"The DWP has a chance to restore the faith many ratepayers have lost in it and we hope it takes that opportunity seriously before submitting a revised agreement that better informs and protects ratepayers," Consumer Watchdog's Jamie Court said in a statement.

The next court date for a ruling will be Feb. 5, though the judge ruled that Dec. 21 would be the date of record to allow customers to be notified sooner of their rights under the settlement.