LOS ANGELES (CBS) — The Department of Water and Power is severely hampered by a 1970s-era billing system and a bimonthly billing cycle, but is doing all it can to eliminate billing delays that lead to exorbitant bills for customers, the utility’s general manager said Tuesday.

KNX 1070’s Claudia Peschiutta Reports

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The DWP has come under fire in recent weeks, since it was reported that some customers were being issued bills for thousands of dollars because of billing delays due to broken meters or other problems.

General Manager Ron Nichols defended the department during a meeting of the City Council’s Energy and Environment Committee, saying only 0.25 percent of two million customers ever experience problems with their bills.

Nichols said it is DWP policy to give customers the same amount of time to pay for a retroactive bill as the length of time that bill was delayed.

“Of everything that we’re doing right now in our whole customer billing, collections and messaging, if I could waive a wand, it would be to change us to monthly billing for all of our customers,” Nichols said.

The delays mostly stem from up to 2,000 broken DWP meters during an average three-week period. Nichols said that is a small percentage of the total number of meters DWP operates.

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Billing amounts for periods when a customer had a broken meter are calculated using historical water power usage for a given customer.

Nichols said an every-other-month billing regimen exacerbates the problem when a bill is delayed by compounding the amount when it is finally tallied. He said the billing cycle is from an outdated era decades ago when bills were much smaller, and it saved the department money to check meters six times per year instead of 12. The utility does not have a quick, digital way to tally and address billing delays, Nichols told the committee.

“We have a 1970s customer information system … that we’re literally holding together with bailing wire,” Nichols said.

The DWP is overhauling its customer information system. The new system is expected to come on line in early 2013. Mayor Antonio Villaraigosa’s proposed budget allocates about $50 million toward completion of the new system.

Nichols also presented a new DWP bill format that will come out this month, which is supposed to make it much simpler for DWP and customers to know if there is a problem with billing.

The committee also approved Councilman Dennis Zine’s motion for City Controller Wendy Greuel to do her own audit of the DWP’s billing operation.

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