Judge Approves 'In Principle' Proposed $44M LADWP Settlement

LOS ANGELES (CBSLA.com) — A judge gave conditional approval to a proposed settlement Monday that would require the Department of Water and Power to pay out tens of millions of dollars in refunds to customers who overpaid during an overhaul of the utility's billing system.

KCAL9's Randy Paige reports Superior Court Judge Elihu Berle has approved 'in principle' a proposed refund/credit settlement, but the proposal is still subject to review. Berle said he wants changes to be made in the agreement to make the refund claims process less complicated for DWP ratepayers, according to an attorney who represents one of the plaintiffs in the deal.

Another hearing was set for Feb. 5 to consider preliminary approval of the deal.

Berle also would not commit to $13 million in attorneys' fees that, under the current proposed agreement, would be given to the lead attorney seven days after the deal's final approval, according to the attorney. The judge said he would decide after actual refund amounts -- rather than estimated figures -- have been calculated, the attorney said.

Berle had delayed granting preliminary approval in two previous hearings, after attorneys for some of the plaintiffs raised objections to the way another attorney had drawn up the terms with the DWP.

The preliminary approval comes after Berle delayed making a decision on the deal in two previous hearings after attorneys for some of the plaintiffs raised objections to the way another attorney had drawn up the terms with the DWP. Consumer advocates also said they were concerned about the deal because its terms give DWP officials too much power in deciding how much they would refund or back-bill customers.

Utility officials say the deal, if accepted by the court, would result in $44 million in overcharges to be credited back to customers and would give back "100 cents on the dollar to every customer affected by our billing system problems." The settlement would also give customers a "thorough and fair neutral process for resolving claims, including the opportunity to have their claims heard directly by the court."

The new settlement, which was filed in court last month, includes all 12 revisions requested by the judge, including putting in signature lines for class plaintiff representatives, using six languages on the claims forms, setting up an online claims submission system, and giving clearer information about the kinds of claims ratepayers could make. Under the deal, customers will be allowed to object to the offer they receive and also will have the right to be excluded from the deal.

Consumer advocates critical of the deal say that despite the recent revisions, the settlement terms still give DWP too much power to dictate the refund amount. Consumer Watchdog President Jamie Court last month called the revised settlement "remarkably flawed," and the claims process it would set up "confusing."

Court also lashed back at the DWP's statements, saying that the attorney who crafted the settlement will get his $13 million in fees as soon as the settlement deal goes through, while customers may need to wait until 2017 or later to get their checks.

Tom Merriman, an attorney with the Cleveland law firm that hammered out the agreement with the DWP that is now being discussed in court, said his first priority is full repayment of over-billed customers.

"We want to make sure every rate payer gets every penny they're due back," he said.

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