DWP 'Knowingly' Overcharged Customers for 10 Years
The DWP Building downtown | Photo by Omar Omar via Flickr
Don't worry (yet), the DWP's overcharging scandal only involves governmental customers such as Metro, LA County and LA Unified School District. “The Los Angeles Department of Water and Power had been imposing illegal and unjustified overcharges on their governmental customers for several years,” said Attorney General Brown in a statement. “The L.A. school district and the other governmental agencies desperately need every available dollar in these hard economic times.” A total of $160 million will be refunded to the agencies.
What exactly did the DWP do? Here's how the Attorney General's Office explains it:
According to state law, municipal power authorities can only charge governmental customers a percentage of what it took to build the power generator and the grid based on the amount of power the governmental customer consumed. For instance, if a governmental customer used 5% of the electricity generated by a power facility, then it should be charged, over a period of time, 5% of what it took to build that facility. The state alleged that the Los Angeles Department of Water illegally charged its governmental customers a percentage far in excess of what they actually used. At trial, the court found that the Department of Water and Power overcharged the State and the local governmental agencies and buried the charges in its monthly bills dating back to 1997, in violation of California law and the state Constitution.