Consumer Watchdog Tells LA Mayor That Ratepayers Should Be Paid Interest On Money DWP Owes in Overbilling Scandal And Calls For Transparency About DWP Problems

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Santa Monica, CA — Consumer Watchdog wrote Mayor Eric Garcetti today that last-minute revisions to a DWP ratepayer overbilling settlement now boost attorneys’ fees 46 percent to $19 million from $13 million, but shortchange ratepayers who should be paid interest on refunds owed them for three years.

Consumer Watchdog pointed out that while $67 million in overcharges will finally go back to consumers, $42 million will go to attorneys and computer consultants without explanation. ($19 million attorneys, $20 million computer consultants and companies, $3 million in lawyer expenses for so-called “independent monitor.”)

“The settlement is an outrageous example of lawyers and insiders larding themselves at the public trough,” wrote Consumer Watchdog President Jamie Court and consumer advocate Liza Tucker. “Meantime, ratepayers are at the back of the bus—they don’t get paid back with interest, and they have to wait until late 2017 to see a penny. The public deserves the right to know what went wrong and ratepayers deserve interest on stolen money.”

Read the letter at:

The letter continued: “Mr. Mayor, the settlement with ballooning public costs offers no public transparency into why these billing errors occurred or how they will be prevented in the future, let alone how ratepayers know they will receive appropriate refund amounts without an independent claims administrator.”

“Paying $19 million to attorneys who have not taken a single deposition in this case and failed to represent ratepayers aggressively is an abuse of taxpayer dollars,” Consumer Watchdog wrote. “Overall, more than $42 million in public money from this over $100 million expenditure is going to attorneys, computer consultants, and computer systems without ratepayers receiving any explanations.”

The letter called on Garcetti to order interest be paid to ratepayers on money owed since 2013, stop customers from being threatened with termination of service until the billing scandal is sorted out, and require DWP to be more transparent about its relationship with outside attorneys.

DWP has refused to answer Consumer Watchdog Public Records Act requests for an accounting of all fees and expenses associated with attorneys and consultants, as well as for documents addressing problems with the billing system, and all ratepayers who have been terminated for non-payment of bills.

“DWP continues to mask its insider dealings from the public,” wrote Court and Tucker.

In addition, the letter pointed to conflicts of interest among the attorneys in the case.

“The attorneys in this case appear to have entered a deal with the defense attorneys for the City, who are also the private plaintiff attorneys prosecuting the City’s case against Price Waterhouse Cooper (PWC), to inflate this settlement in a way that guarantees maximum payout in their case against PWC,” Court and Tucker pointed out. “Those private plaintiff attorneys working for the City defending the ratepayer case have a conflict of interest in that they also stand to receive a windfall in contingency fees from the case against PWC. Our Public Records Act requests to determine how much these attorneys have received from taxpayers to date have not been answered by DWP for the last two months.

“Moreover, we have no independent ratepayer advocate to determine whether what ratepayers receive is fair, reasonable, or adequate. You failed to replace Fred Pickel, the head of the DWP’s Office of Public Accountability. His own self-dealing was one reason why voters rejected Charter Measure RRR, which would have allowed you to wash your hands of this dysfunctional utility and let DWP police itself. As you know, Pickel, a former Enron consultant, wrote Measure RRR to include new five-year contract paying him $276,000 a year but failed to disclose this in the ballot summary he wrote. He should be replaced with a true independent ratepayer advocate immediately.”

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Liza Tucker
Liza Tucker
Liza Tucker is a consumer advocate for Consumer Watchdog, following everything from oil and gas to the regulation of toxic substances in the state of California. She comes to us from Marketplace, the largest U.S. broadcast show on business and economics heard by ten million listeners each week on 400 radio stations. Liza worked at this public radio show for a decade, first as Commentary Editor and then as Senior Editor for both Washington and Sustainability News.

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