Audit: Roll Out Of DWP Billing System Could Cost Customers $200M
LOS ANGELES (CBSLA.com) — A state audit released Tuesday found that the Department of Water and Power's troubled billing system could wind up costing ratepayers more than $200 million.
The audit also found that as of November, the utility was still trying to collect more than $681 million from customers for past-due bills. DWP officials said only about $245 million of that amount is attributable to the new billing system.
"The department originally budgeted $87 million for implementing CIS (customer information system), however, it more than doubled that budget to nearly $181 million over time," according to the report by the California State Auditor. "Nonetheless, immediately after CIS's launch, it became clear that the system was not yet ready and that the department's decision to implement it was questionable at best.
"Consequently, the department's customers began complaining of late utility bills, unwarranted shut-off notices and excessive wait times to speak with customer service representatives," according to the audit.
Auditors found that the department spent $187 implementing and stabilizing the CIS system by September 2014, and its inability to collect on past-due accounts "could add in excess of $40 million to CIS's overall price tag."
Los Angeles City Attorney Mike Feuer announced last week that his office had filed a lawsuit against the accounting firm of PricewaterhouseCoopers, which the city hired to implement the DWP system. Feuer claimed the company misrepresented its level of experience handling such a system, costing the city "millions" of dollars.
Daniel J. Thomasch, an attorney for PwC, called the lawsuit "meritless," contending it was a "transparent attempt by the DWP to shift blame away" from the utility.
The DWP "acknowledged in writing last year that PwC fulfilled each one of its contractual obligations and paid PwC in full," Thomasch said. "We will defend PwC's excellent work and this case vigorously."
In a statement, LADWP said they have routinely corrected incorrectly estimated bills.
"We have been very forthright about the problems with our new customer billing system and we have taken significant steps to fix them. We have made progress and appreciate the recommendations of the State Auditor," LADWP said in its statement.
Those steps have included hiring 200 more customer service representatives to reduce call hold times, completing 100 percent of meter read routes daily and achieving 95 percent or higher meter read performance, decreasing estimated bills from over 20 percent to 5 percent, and completing an internal audit to validate the accuracy of customer billings, LADWP officials said.
(©2015 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)
