Many residents in Pacific Palisades believe their recent Department of Water and Power bills are excessive and some of them have vented their anger on the social media forum Nextdoor Palisades.
A few have reached out to the DWP, and Deborah Hong, the department’s senior public relations specialist, has agreed to address the problems at an upcoming meeting. The date and locations have not yet been set.
To prevent chaos at this meeting, Hong has asked that beforehand, residents should email their complaint to her (Deborah.Hong@ladwp) and provide name, address, account number, and complaint description and concern, so that it can be addressed.
Mike Feuer
Photo: File photo from LA Attorney’s office.
Meanwhile, one Nextdoor reader wrote: “It appears to be corruption plain and simple. [City Attorney] Mike Feuer had a class-action lawsuit against them [DWP], which seems to be dropped.”
The reader is only partially right. One lawsuit (which was settled) may contain ethical violations, which has led to a new lawsuit, an FBI investigation, DWP’s General Manager David Wright’s early retirement, and may possibly point to corruption in the City Attorney’s office.
DWP overbilling started in 2013 and continued through late 2016. The department had instituted a new software billing system that was launched by PricewaterhouseCoopers. Thousands of customers claimed that they had received inaccurate bills, some of them excessively high.
In 2015, Atwon Jones, a Van Nuys ratepayer, filed a class-action lawsuit.
A July 2019 CityWatch story (“LA’s City Attorney Feuer Owns the DWP Scandal and He Should Resign . .Here’s Why”) examined the lawsuit.
“This suit was settled in record time [2017], without any embarrassing discovery, for $67 million of our Ratepayer money, of which $19 million was paid to the plaintiff’s lawyers,’ said CityWatch.”
Attorney Paul Paradis and Paul Kiesel were hired by City Attorney Mike Feuer’s office to sue PricewaterhouseCoopers to help recoup some of the money.
According to a July 23, 2019 LA Times story (“Dramatic FBI Raids at L.A. City Hall and the DWP Scandal That Won’t Go Away”), the lawyers from PricewaterhouseCoopers said that they had uncovered a conflict of interest: attorney Paradis had once represented the DWP customer whose class-action lawsuit resulted in the $67-million payout.
“Paradis also secured lucrative no-bid contracts from the Department of Water and Power to help the City comply with the terms of the settlement of the class-action suit. The utility ultimately approved more than $36 million in contracts with companies connected to Paradis, in part to address problems stemming from over billing.”
Consumer Watchdog’s Jamie Court in a July 2019 Last story (“LA Mayor Boots DWP Chief the Day After FBI Raids Connected to 2013 Overbilling Scandal”), alleged that “Feuer and his staffers created conflicts of interest when they quickly settled one plaintiff’s lawsuit over the DWP overbilling, then worked with an outside attorney to find a different plaintiff whose allegations and settlement would be more favorable to Los Angeles.”
In July, a new set of attorneys filed, claiming that DWP owes customers more than $50 million more than they were promised in the initial settlement of $67 million.
According to an October L.A. Times story (“Reeling from DWP Scandal, L.A. City Atty. Feuer Tightens Oversight of Outside Contracts”), the 2017 settlement is now under scrutiny by a new law firm.
To clear him and his office, Feuer hired attorney Ellen Pansky, who was paid $176,195 to write a report. The 150-page ethics report “found no evidence that suing DWP customers were denied a ‘fair and reasonable’ recovery.’”
The report did not include independent discovery and did not include interviewing witnesses.
Edward M. Robbins, a former federal prosecutor, was appointed by Los Angeles Superior Court Judge Elihu M. Berle to look at the documents linked to the billing debacle.
Robbins filed a November 14 report that noted that some lawyers involved in the billing-related litigation “committed fraud, by omission and commission, on the court and that some payments made by the City of Los Angeles ‘were induced by fraud.’”
In a November 27 LA Times story (“Investigator Finds Fraud and Ethics Violations in Review of DWP Billing Litigation”), the author wrote that Robbins’ team, which included four former federal prosecutors, had run into a roadblock because of an inability to get some records and that the team was exploring legal option to obtain the necessary downstream bank records.
Mayor Eric Garcetti (left) is shown with Rick Caruso (center) and Councilman Mike Bonin at the groundbreaking for Palisades Village.
Photo: Bart Bartholomew
As a reminder, one might think Mayor Eric Garcetti or even Councilman Mike Bonin would be outraged about possible City Attorney/DWP corruption, but annually DWP transfers 8 percent of its revenue to the general fund to help balance the City’s budget.
It is in the City’s interest to ensure that the DWP continues to pay into the General Fund.
According to the Los Angeles Daily News in 2017 (“Despite Public Criticism, DWP Transfers $241.8 Million to L.A.’s General Fund”), “The payment has routinely been around $250 million for years, but critics have argued that it amounts to an illegal tax.”
In 2018-19 the estimate receipt from “Power Revenue Transfer” was $238 million and in 2019-20 it was $232,557,000.
So yes, the Nextdoor reader was partially correct, alleging that “it appears to be corruption pure and simple.” The questions not answered are who knew, who profited and will any costs from the lawsuits be passed onto ratepayers?
But just as important for current homeowners, can they trust their DWP bills, especially the specific electric and water charges? The upcoming meeting with Deborah Hong should be quite interesting. Circling the News will keep you updated.
I emailed Ms. Hong about my excessive bill, and quite soon after, received an email from her saying she had contacted the supervisor in Customer Service. Lo and behold, I received a phone call yesterday from Ms. Fujimoto at 213..367.9868 (no first name given). Of course, she first mentioned leaks. I responded that many, many folks in PP have gotten excessively high bills in recent months, and surely we didn’t all have leaks at the same time. She refused to acknowledge the macro issue (although she did say she was aware of it), and said DWP would come to reread the meter. I’ll let you know what happens.
I’m afraid this article covers history but not what is actually playing out at the moment. There was a previous FBI investigation which has been swept under the carpet because 2 key witnesses declared their fifth amendment rights. That’s practically gone.
But many ratepayers are now very frustrated and angry over the continual unfair actions of the dwp regarding the annual rates rise. This was a proposal back in 2015 and turned in to a nightmare for the ratepayers by the very same people.
From the original proposal right through to the bills approval by the ladwp board and subsequently the LA Controller and the Mayor, the ratepayer was not represented by anyone of a substantive neutrality. Even the one person the dwp voted in as the ratepayers advocate was something questioned by a councilman at the meeting.
Apparently the ladwp need these rate rises in order to improve the infrastructure and improve customer service, none of which the ratepayers has seen over the years.
What the ratepayer has seen is leaflets of figures that don’t match with what was proposed…promised…indicated…no one is sure. One basic figure has already been reported which was laid down by the ladwp and that was the rise in energy prices over the 5 year plan period. The figure would be around 20%. I sat down and took the first four years basic rate rises published which anyone can print out from the ladwp’s website and calculated that the actual figure is around 44%. Like I said this is just the basic figures. Now the ratepayers figures then get changed in to higher rates according to what the ratepayer has used the last year. They call it an ‘incentive’, in order to get ratepayers to use less energy. Now if that’s not crazy enough, the ladwp introduced yet another charge, a so called PAC (Power Access Charge).
Oh yes suddenly after decades of paying for energy the usual way, the dwp has decided to make you pay for the privilege of accessing power. In 2016 this was introduced to higher consumers at $6.00 a month rising to it’s present Tarif of 45.00 a month. So all those with gardens and swimming pools are being hit really hard and from what I can see I am not sure everything is legitimate. However it does not stop there, as I have seen bills where a single household has ben allocated the wrong Tier meaning they use minimal energy but are put in to a higher PAC bracket. Very flexible this system.
Now that’s before we start talking about the facts and figures involved.
One can only guess that the dwp have been manipulated in to this plan or they themselves have been so greedy, it no longer matters, the ratepayer will pay!
You see, this month we have received notice that the City will receive 230 Million from the dwp for the fiscal year 2019/20. Now the simple consumer will be asking, what for? Why do the dwp need all the extra funds only to give a very large sum to the City?
Sounds awfully like a plot from the City. Or is it? Why does this system have 3 Tiers, does the supplier offer energy on a 3 Tier basis. Doubt it.
But the burning questions at the moment are, how could the dwp blindside all their ratepayers to this extent? How did such a ridiculously unfair program be approved at all?
Good reporting!! Thank you. M
The house in pacific palicades has been empty since last October. My water bills have doubled. I cannot understand why. No one is living there and yet I am told I am being charged for last years billing. I cannot continue to pay these unreasonable bills. HELP!
All pipes were replaced last year. There are NO leaks.
Hi Arlene, my name is Valerie S. I’m in Silverlake. I’ve been at my house for over 20+ yrs. (Its a duplex, but that hasn’t changed either, Lol) I’ve always paid for both units (as there’s only one meter, I’m owner occupied. I elected along time ago to keep it that way, as I believe I would just be granting the DWP another meter to over charge if I changed it. Anyway, when I 1st bought the place & moved in (’95) my Bill’s for everything elect, water, sanitation sewage, etc was around $300 every 2 months. Now it’s consistently a heart stopping $1000 (give or take) every 2 mos. Isn’t that like an increase of around 300% (I’m getting old so my math skills may be off?) I’ve tried reaching out to the DWP on occasions throughout the yrs as my Bill’s started doubling (about every 10yrs) only to be told the same thing ?could be leaks,your usage is the same as the previous years etc, etc) there is def something wrong (years ago, over 10, they used to be a little more “forgiving” when you complained, ONCE I recvd a $200 credit because I complained to the right person) they seem to have stopped that now. When I reached out to contact one of the attys dealing with the overpayment case of 2016…he said that the whole process was corrupt, and wished me well but that he was no longer in that type of litigation. One of my GF’s from church suggested that we start a forum with actual mtgs/members that can join maybe using Zoom so we, the rate payers dont feel like we have to do this on our own. It is my opinion that what is occurring is actually that we are being taxec for property tax increases through the DWP that proposition 13 should have done away with. I think we as residents in LA must come together to eliminate this DWP transfer to the city and only then will the City advocate for us, as they will have nothing to lose (as it should be) I do not know about anyone else but, if we do nothing there’s only three things that will happen….either 1) in another 20 yrs our bills will be at 3k+ a month for water &electric,sanitation, etc and we’ll be in our 70’s able to pay 2) we won’t be able to pay so we fight now, 3) or we move, of course we’ll all eventually die too…the DWP I’m sure likes 2 out of those 3 scenarios! I’m not sure how to find you, but if you are interested…please respond to this posting (and anyone else that is interested). Lastly does anyone know what they (DWP) intends to do with the stay & home order and how that is impacting the DWP “tier” rate system?