LADWP may have to return millions due to court ruling

The Los Angeles Department of Water and Power may have to return millions of dollars to its customers if a court ruling becomes final. KPCC’s Molly Peterson has more.

The case is part of a decade-long dispute over how the DWP manages money customers pay into its water fund. The utility has long taken money from the water fund and transferred it to the city’s general fund, where it paid for police, fire and street services, and libraries.

Taxpayers’ rights groups said that violates state law prohibiting new levies without a vote. Two years ago, city officials took the case to court, essentially suing the public, to protect the transfer money. The Howard Jarvis Taxpayers Association argued in response that the DWP can only charge for its own services.

Now a tentative ruling from a superior court judge concludes that the practice of transferring money among funds violates state law. The proposed decision will become final next week if the city doesn’t challenge it – and the utility will have to return upwards of $30 million or credit it to customers’ accounts. The DWP says it’s studying the ruling.