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L.A. Utility Faces Third Lawsuit Over Billing

LOS ANGELES (CN) - The city of Los Angeles has been hit with another class action lawsuit claiming it overcharged thousands of customers by estimating meter readings after the botched roll out of its new billing system.

Customer Hayley Fontaine filed the complaint against the city and the L.A. Department of Water and Power on Thursday.

The plaintiff claims the department ignored state and municipal laws by imposing rate hikes on customers based on inaccurate readings, and threatened to cut off customers' electricity and water if they did not pay the bills.

The latest complaint follows a January state court class action which made similar allegations against the department.

In December, two other plaintiffs also filed a lawsuit over excessive billing, the Los Angeles Times reported last month.

Fontaine estimates several thousand customers have been affected.

As the largest municipal utility provider in the nation, the Department of Water and Power serves more than 3.8 million people and employs 8,800 workers.

"Despite its size and vast workforce," over the last year the department has failed to bill customers accurately for their water and electricity use, according to the Feb. 5 lawsuit.

In response, the department said teething problems with the new billing system rolled out in September 2013 caused the overcharges.

"Early on in our billing system roll out, the system did estimate some bills," the department says on its website. "Estimated bills found not to be accurate were canceled and we re-billed those customers according to the physical meter data. We have been very forthright about the problems with our new customer billing system and we have taken significant steps to fix them."

Under city and state laws, Fontaine says, the department should invoice customers and read meters every billing period.

"Instead, defendants either sent no bill for the services used, or guessed what the meter readings might look like or billed based on those estimates until months in the future when they read the customers' meters and then sent one huge bill several billing cycles later," the lawsuit says.

"To make matters worse," the complaint adds, customers were placed in "more expensive" tiers in the department's rates system.

There is no way for customers to appeal the charges, leaving them with no choice but to "set up a payment plan to pay the excessive and exorbitant charges," Fontaine says.

"Defendants have also threatened to shut off plaintiff and the class members' electricity and water - their basic needs to sustain life - if they do not pay LADWP's excessive charges," the 17-page filing states.

In a report, the department blamed the botched roll out on an "inadequate" project management team.

The vendor hired to implement the new system, PricewaterhouseCoopers, also "lacked the necessary experience to manage a task of such complexity," the department said.

"This gap, combined with the lack of November 18, 2014 effective project management from the department, resulted in critical missed deadlines and frequent warning signs that were ignored," the department said.

According to the utility provider its customer service representatives were unprepared for the volume of inquires after the new system was put in place.

It says it has since hired 200 customer service representatives and meter readers, and decreased estimated bills from 21 percent to 5 percent.

Fontaine seeks a declaration that the city and department are violating its rules, codes and laws. She also wants the court to enjoin the defendants from billing customers at the more expensive rates.

She is represented by Barbara A. Rohr of Faruqi & Faruqi. The attorney did not immediately respond to a request for comment.

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