Payouts for utility overcharges, which were promised by June, will not be made until next year
L.A. Department of Water and Power officials announced more than a year ago that they would refund tens of millions of dollars to Angelenos who were overbilled because of a faulty computer system. But customers are still waiting, and it will be 2017 before they see any money.
Under a $44-million proposed class-action settlement announced in August 2015, customers were to receive a refund or credit by June of this year. However, the payments have been repeatedly delayed as an independent monitor sifts through DWP documents to find every customer who may have received a faulty bill.
The settlement could receive preliminary approval at a court hearing scheduled for Nov. 18.
“This is a colossal mistake on top of a major billing scandal,” Jamie Court, president of Consumer Watchdog, said Wednesday. “The DWP ratepayers have been waiting years for refunds and for billing corrections that the city acknowledges they are owed, and now they’re going to have to wait another year.”
The DWP contracted with PricewaterhouseCoopers in 2010 to overhaul its 40-year-old billing system. But the 2013 rollout of the system was a disaster. Tens of thousands of customers were overcharged while others were not billed at all, and when they called to complain, they encountered 40-minute hold times.
Average wait times have since decreased to 17 seconds, according to a DWP spokesman.
Since last fall, attorneys for the city have repeatedly asked the court for more time to work on the settlement.
In December of last year, an independent monitor was hired to dig through the utility’s records and find every customer who may be owed money. The monitor has since found an additional $5.4 million owed to residential and commercial customers, according to attorneys representing ratepayers.
A total of 1.6 million accounts are being reviewed.
“In working with our legal team, the court-appointed monitor is conducting an exhaustive review of every possible defect in LADWP’s billing system. As our efforts continue, we expect the total amount owed to customers will continue to rise,” said attorney Jack Landskroner, who is representing DWP customers in the lawsuit.
A spokesman for the utility said the process is working as intended.
“The cornerstone of the settlement was the appointment of an independent monitor to ensure every consumer receives a 100% refund. That is exactly what is occurring,” said DWP spokesman Joe Ramallo.
In a letter Monday, Consumer Watchdog asked Mayor Eric Garcetti to get involved and direct the DWP to issue refunds immediately.
“The mayor is committed to making sure every single ratepayer is paid in full for everything they are owed,” said Connie Llanos, a spokeswoman for the mayor. “This additional time, while inconvenient, is a result of a thorough process, overseen by a court appointed monitor and a respected jurist. They are doing their due diligence to ensure every dollar owed is identified.”
If a judge signs off on the settlement in November, it would still be another six months before Angelenos received any money, the ratepayers’ attorneys say.
In a separate action, the city is suing PricewaterhouseCoopers, alleging that the consulting firm misrepresented how it could help launch the DWP’s system. The firm’s initial contract with the city was $60 million; it was later increased by $9.2 million.
Earlier this summer, attorneys for the city accused senior managers at PricewaterhouseCoopers of inflating their time records to earn additional payments and spending that money on liquor and prostitutes in Las Vegas. Representatives for the firm deny any wrongdoing and have called the original lawsuit “meritless.”