DWP Even Rips Off Other Government Agencies -- Ratepayers on Hook for $160 Million in Overcharges

UPDATE: True to form, DWP General Manager David Nahai issued a smiley face statement about the latest screwup which continued under his watch as president of the utility's board and went to trial for six weeks last year, adding millions to the overall cost. "We are pleased to have fashioned an agreement which will enable energy efficiency improvements and overall lowered energy usage for the plaintiffs in this action. We can also take comfort in the fact that the involved parties are government entities whose constituents are largely LADWP customers. That the beneficiaries of this settlement serve the residents of the city and County of Los Angeles was a prime factor for LADWP to enter settlement negotiations."


Now you know what your DWP rate hikes are going for and why so many more are coming:

You have to pay for the incompetence and dishonesty of your officials.

A settlement was announced today between lawyers for various government agencies and the Department of Water Power which had to admit it had cheated them for a decade and will have to pay them $160 million. Or more precisely, you will have to pay them.

That's 10 times what DWP officials claim it will cost extra to give its workers a whopping 5.9 percent pay raise in the middle of the worst recession in a generation.

In June 2007, Superior Court Judge John P. Wade ruled that DWP had inflated its electric bills to governmental customers going back to 1998 by a total of $223.8 million because it charged them more than a share of the capital costs needed to generate electricity in proportion to the share of the plant's output they used.

Use 5 percent of the plant's electricity, pay 5 percent of what it cost to build. That was the rule. That was the law. But DWP plays by its own rules and charged a lot more than that.

"This settlement will give back to the school district and our other
clients some much-needed funds," said Eric R. Havian, a San Francisco
attorney with Phillips & Cohen LLP, which is representing all the non-State
agencies. "We are pleased that the matter was resolved without the need for
further litigation."

So here's the windfall coming to local agencies:

* Los Angeles Unified School District -- $67.7 million
* Los Angeles County -- $32.3 million
* Metropolitan Transportation Authority-- $28.1 million
* State agencies -- $22.3 million
* Los Angeles Community College District -- $5.58 million
* University of California at Los Angeles -- $3.8 million.