Los Angeles Superior Court judge will decide today whether to accept a proposed settlement that would result in tens of millions of dollars in refunds to Department of Water and Power customers who were overcharged amid the agency’s troubled $181 million billing system overhaul.
Los Angeles Superior Court Judge Elihu Berle is expected to issue a ruling on the proposed deal, but attorneys for some members of the class-action lawsuit have come out strongly against the terms, saying they contain “fatal flaws” that would limit DWP customers’ ability to challenge the refund amounts.
Thousands of DWP customers were issued faulty bills following a problem- filled upgrade of the utility’s billing system, with many of the payment amounts based on estimated, rather than actual, water and electricity use.
The city was hit with several lawsuits by customers contending they were overbilled. Settlement talks led to a proposed deal — announced by one of the attorneys and later confirmed by Department of Water and Power officials — for distributing credits and refunds to overcharged customers.
But Consumer Watchdog advocates joined attorneys for other members of the class action lawsuit in recent months to push back on the deal proposal, saying it would allow only DWP officials to decide how much to refund ratepayers.
The refund amounts would be reviewed by an “independent” monitor, but consumer advocates said the appointee, a utility consultant, who would likely side with DWP officials.
Customers would be asked to give up their right to sue before knowing how much they would be receiving or paying back, Consumer Watchdog officials said in a letter to Mayor Eric Garcetti and City Attorney Mike Feuer.
“Make no mistake, this settlement is not fair to ratepayers,” says the letter signed by Consumer Watchdog President Jamie Court and consumer advocate Liza Tucker. “It is an inside job between the LADWP and an attorney who doesn’t truly represent the interest of the community.”
The settlement plan “will shortchange, confuse and anger ratepayers,” Court and Tucker said.
DWP officials and the City Attorney’s Office did not immediately respond to the Consumer Watchdog group’s letter.
Attorney Jack Landskroner, who negotiated the settlement deal, defended the terms, saying it would “not only return 100 percent of the overcharges LADWP billed to customers,” but that the amounts would be “verified by an independent court-appointed monitor.”
The monitor, Paul Bender, “is one the most experienced utility billing experts in the country,” with a “track record for standing up for ratepayers by challenging and stopping wrongful billing practices by large utilities,” Landskroner said.
He added that he sympathizes with the consumer advocacy group’s “distrust of LADWP based on past history,” but thinks the “well-intended grassroots group may have been manipulated and misinformed by trial lawyers who have a personal financial interest in obstructing the settlement.”
Consumer Watchdog officials previously accused Landskroner, who would be paid $13 million in legal fees under the settlement, of designing a deal that would be financially lucrative for him despite only having done “87 days of work.”
