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Get Ready For Your Big $10 Refund From The LADWP Lawsuit

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(Photo by Josh via the Creative Commons on Flickr)
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LADWP will now have to return millions of dollars to overbilled customers, but the individual payouts will barely seem like a drop in the bucket.

The Los Angeles Department of Water and Power has tentatively settled a landmark class-action lawsuit yesterday that will refund over $44 million to customers who where overcharged for water, electricity and other services. The excessive charges occurred during the rollout of a new billing system in 2013, reports KPCC. And while the settlement is significant—and will even go to customers who didn't notice the errors—the DWP officials say that the actual payout will be less than $10 per customer.

The U.S. District Court will decide to give preliminary approval next month. Customers could be notified as soon as October if they were overbilled, but refunds and credits might not be processed until June of next year. You know, just in time for those proposed LADWP rate hikes.

The overcharges were caused by a variety of errors, according to the LADWP, including late payment charges, closed accounts and tiered billing calculation errors. LADWP General Manager Marcie Edwards said in a statement, "We know that the problems associated with our billing system caused problems and headaches for far too many of our customers and we apologize to each and every customer who was affected."

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The settlement involves an independent audit of all LADWP customers' bills to determine who was overcharged and for how much. The department will also have to invest $20 million to overhaul its billing system, establish new rules for how the public utility bills customers and appoint an independent monitor to ensure compliance with the agreement, reports ABC 7.

Affected customers will receive a letter notifying them how much they were overbilled and will also have the chance to file a claim independently. While most customers may not see a huge windfall from the settlement, others may see more coming to them next year. "So if you were overbilled $10 you may receive back $10," consumer rights attorney Jack Landskroner explains to KPCC. "But if you were overbilled $1,000 and you paid that bill, you will receive a credit or refund of $1,000."

No word on how the settlement might affect the Van Nuys couple who received a $51,649.32 water bill earlier this year.