A monumental class action settlement agreement was announced on August 17, 2015, between the Los Angeles Department of Water and Power (“LADWP”) and its customers. Over $44 million is expected to be refunded to customers overbilled by the department. 1.6 million customers filed a class action lawsuit against LADWP after noticing excessive charges and billing errors following the integration of a new billing system in 2013. The LADWP is the largest municipal utility in the United States, serving almost four million Los Angeles residents and businesses.
LADWP’s General Manager, Marcie Edwards, conducted a review of their billing system and customer accounts to ensure accuracy and correct billing errors. The review identified billing errors and overcharges for various reasons, including closed accounts with credit balances, late payment charges, tiered billing miscalculations, and estimated bills that masked leaks and electricity losses.
In a statement issued on behalf of LADWP, Edwards apologized for the problems encountered by affected customers and vowed to make them whole. According to the department, the vast majority of credits and refunds to be issued will be small, amounting to less than $10 for most customers. The statement also addressed current legal action the LADWP is taking against PricewaterhouseCoopers (PWC), the firm hired to perform the system integration and replacement of their billing system.
In addition to issuing refunds, the LADWP will invest $20 million in a comprehensive overhaul of its billing system, establish new rules regarding how the public utility bills its customers, and appoint an independent monitor to ensure compliance with the terms of the agreement over the next 18 months. An independent audit of all customers' bills is also required.
A hearing is set for September 11, 2015, where the U.S. District Court is expected to decide whether to give the settlement a preliminary approval. It’s anticipated that refunds and credits will be processed by June 30, 2016. The Court will also determine the attorneys’ fees to be awarded at the Final Approval Hearing to be held in December 2015 or January 2016. Affected customers will receive notices by mail or email (depending how they receive their billing statements) containing the refund amount.
More information is available on the LADWP’s website and Settlement FAQ page. Follow BCA on Facebook and Twitter for trending news, scam alerts, and other useful information.
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Business Consumer Alliance (BCA) is a non-profit company that started in 1928. The broad purpose of BCA is to promote business self-regulation. BCA's mission is achieved by assisting consumers in resolving complaints with businesses and using that complaint information, along with other relevant information such as customer reviews, to forecast business reliability. With community support, BCA can identify trustworthy and ethical businesses and warn the public to avoid unscrupulous businesses whose purpose is to defraud the marketplace. BCA also helps businesses promote themselves by providing services and tools to protect their business and reach out to their customers. BCA obtains its funding from member businesses who support the mission and purpose of the organization and who agree to abide by high standards of ethical business practices.