Judge Rejects Preliminary Approval Of DWP Overbilling Case For Third Time: Calls For Pro-Consumer Changes, Warns Attorneys Won’t Be Paid Until Ratepayers Are

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Los Angeles, CA – Los Angeles Superior Court Judge Elihu Berle for the third time failed to grant preliminary approval to an overbilling settlement with DWP ratepayers, calling for more disclosure and pro-consumer changes.  He said he would grant preliminary approval if those conditions are met.

Consumer Watchdog has raised numerous concerns about the settlement, some of which were answered by Judge Berle.  For example, the nonprofit, nonpartisan consumer group warned that ratepayers would be confused by notices mailed to them about the settlement and Berle today ordered that communiqués to ratepayers be clarified and simplified.

In addition, Consumer Watchdog raised issues about a “quick pay” attorney fees provision that would have allowed Cleveland lawyers settling the case with DWP to receive up to $13 million ten months before ratepayers received refunds. Judge Berle stated he would not order attorneys fees until he was certain that ratepayers had received refunds and claims had been processed appropriately.

“Judge Berle answered some concerns about the settlement today, but now it is up to DWP to step up and guarantee a more pro-consumer attitude,” said Jamie Court, president of Consumer Watchdog. “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.”

The next preliminary approval hearing is February 6th.

The following are critical changes that Consumer Watchdog says must be incorporated in a revised settlement of the DWP overbilling case if the interests of ratepayers are to be served.

Refunds or credits that are known should be issued immediately.  Customers are currently paying installments on bills they don’t owe, having been forced into installment plans under threat of disconnection. The deadline to repay them under the best case scenario in the settlement – absent objections, appeals or other delays – is March 2017.  That’s unacceptable. Refunds and credits that are known should be issued immediately, subject to any administrative review and correction later if necessary.

Installments without deposits:  Currently, DWP policy is that a 30% deposit be paid before installment plans commence (20% on very large balances).  That’s a big nut, particularly for lifeline plan customers. No deposit should be required on the four year payback, and when there is a missing payment, there should be no acceleration of balance.

No threat of disconnect for back bills.   If people cannot pay their back bills, take them to collections, but don’t threaten to shut their power off because of DWP’s negligence in billing them too late. Currently, even those with incorrect/inflated bills are being forced into installment plans under the threat of disconnection. Disconnection should not be used as a threat to force payment.

DWP should pay 100% of what is owed, not 100% of what DWP claims processing unit claims it owes.   Throughout the language of the settlement agreement the terms of the agreement allow DWP to determine what is owed overcharged customers, even though DWP has proved to be the problem in straightening out the problems it created at each interval.  The language of the agreement should be modified to state that DWP should pay 100% of what it owed period.

Attorneys should not be paid before judgment is final and ratepayers are paid.  A quick pay provision allows attorneys to take home $13 million in legal fees, even if there are appeals and objections, before the judgment is final.  Ratepayers would have to wait ten more months to have their accounts credited or receive refunds for overcharges.  Attorneys should not be paid before ratepayers. Judge Berle today said he would need to see proof of an effective refund and claims process before attorney are paid.


Jamie Court
Jamie Court
Consumer Watchdog's President and Chairman of the Board is an award-winning and nationally recognized consumer advocate. The author of three books, he has led dozens of campaigns to reform insurance companies, financial institutions, energy companies, political accountability and health care companies.

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