State lawmaker presses for audit of troubled DWP billing system

A Los Angeles-area lawmaker is pressing for a state audit to determine how a new billing system beset with errors was rolled out at the city Department of Water and Power, a week after the agency acknowledged a $200-million shortfall in collections.

In a statement, Assemblyman Raul Bocanegra (D-Pacoima) called the new system “a boondoggle from the start,” citing as many as 70,000 customers billed late or erroneously under the new system.

“It’s an outrage, and ratepayers deserve real answers and accountability,” Bocanegra said.

The new system issued bills that were as much as 40 times the correct amount, resulting in bank overdraft notices for some ratepayers who use autopay. In November, the agency suspended its automated collections process as it tried to tackle the problems.

“In cases of chronic non-payment, where shut-offs have been necessary, we have had staff manually verify that the billings are accurate and the shut-off is warranted,” DWP Interim General Manager Jim McDaniel said in a Monday email the The Times.

Bocanegra said he had asked the Legislature’s Joint Legislative Audit Committee to investigate several things about the new billing system, including how many customers were repaid for overcharges and how much money was spent fixing the errors.

The DWP learned about Bocanegra’s request Monday, and “we will be reaching out to him regarding the concerns expressed in his letter,” McDaniel said.

Bocanegra also asked how much DWP revenue had fallen since the billing system went live. In a statement posted on the DWP website, a high-level official recently said the agency was $200 million short on collections due to billing delays and its decision to stop disconnections for nonpayment, but said the revenue shortfall was only temporary.

“We expect to recover this money over time as we continue to work with our customers through the transition to our new billing system,” Chief Financial Officer Philip Leiber said in the statement.

Leiber added that DWP operating expenses and capital spending were under budget and that cash reserves were “more than sufficient” to absorb the shortfall. In an email to The Times, Leiber said the agency did not expect the shortfall to affect the more than $200 million a year that the DWP transfers to the city general fund, which pays for basic services.

City ratepayer advocate Fred Pickel said the shortfall was not a concern in the short run because the DWP was under budget in other areas. However, he questioned whether the $200-million shortfall was entirely tied to the billing disruptions, or whether Los Angeles residents were using less electricity -- which would mean the problem is not totally temporary.

City Administrative Officer Miguel Santana said he had asked the inspector general of collections to work with Pickel and his office “to get to the bottom of it.”

“We are concerned and will be raising it as an issue in our next financial status report,” Santana said.

Reacting to the news Monday, a spokeswoman for Los Angeles Mayor Eric Garcetti emphasized the mayor’s “focus on DWP reform.”

“We welcome the help of Assemblymember Bocanegra as we work to improve customer service and save ratepayer money,” Vicki Curry said in an email.

Twitter: @latimesemily

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Times staff writer David Zahniser contributed to this report.