Consumer Watchdog Chides LA Mayor And City Attorney For LADWP Settlement That Delays Ratepayer Refunds into 2017 And Beyond While Paying Millions To Lawyers Quickly

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Santa Monica, CA — The latest proposed settlement of a $44 million LADWP overbilling scandal offers some improvements over the last two, but still unfairly disadvantages ratepayers, Consumer Watchdog said today in a letter to LA Mayor Eric Garcetti and LA City Attorney Mike Feuer.

“Ratepayers who have received large bills and entered into installment plans are expecting credits or refunds to their accounts,” the letter from Consumer Watchdog President Jamie Court said. “Many have been threatened with disconnection if they didn’t pay, and that practice goes on today at DWP for those who have not entered payment plans. Nonetheless, under the proposed settlement DWP does not have to refund or credit overcharged ratepayers until March of 2017 at the earliest, and not until 2018 or 2019 if there are appeals and objections.”

Read the letter at:

Read the source documents:

“By contrast, the attorneys from Cleveland settling this case will receive $13 million in June of 2016 under a special ‘quick pay’ provision in the settlement, before the agreement becomes effective, regardless of whether there are appeals or objections that delay overcharged ratepayers guaranteed payments until 2018 or later.

“In no circumstance should attorneys be paid millions before overcharged ratepayers get their money back. It’s outrageous that the agreement would allow for the payment of $13 million in attorneys fees 10 months before overcharged ratepayers are guaranteed to receive their own money back under the best-case scenario. This shows the priorities in the settlement are to give maximum control to DWP, to take care of the Cleveland attorneys who were willing to settle on the cheap after working only 87 days on case, and leave ratepayers with no guarantees of refunds for years.  

“DWP continues to threaten ratepayers who have received large back bills with disconnection. The Department demands large deposits (30 to 40%) before entering into payment plans, even for low-income customers on lifeline plans. Now DWP has given itself until 2017 before it needs to repay those it’s overcharged, even though it knows who they are and how much they must pay now. And, as the settlement agreement reiterates again, customers are only given 100% of the refund that DWP claims it thinks it should pay back.

“This settlement doesn’t forgive back bills for those charged years too late for services, even though customers don’t have thousands of dollars extra to pay. It doesn’t address the large deposits required of customers on payment plans. It doesn’t deal with the way DWP uses the threat of disconnection to force customers into payment for mistakes DWP has made. For those the settlement promises to repay 100% of the money DWP acknowledges it stole from them, it lets DWP wait until March 2017, at the earliest, to give customers their money back.

“The fact that this settlement could be this weak and corrupted, and that you’ve turned a blind eye, shows the continued arrogance at DWP and your offices’ continued deference to a renegade Department.

“How could such a settlement seem fair to you or any other real representative of the public?” Court wrote. “I urge you to look closely and fix the errors or the wrath of ratepayers will rightly fall on your offices.”

For more on the LADWP settlement process, see:“ratepayer-advocate”-and-explain-fairness-n

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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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