LOS ANGELES (CN) – The L.A. Department of Water and Power will refund $160 million in overcharges to governmental customers, as a result of a whistleblower’s complaint.
Over a ten year period from 1997 to 2007 the Department of Water and Power illegally charged State and local governmental agencies for electricity that far exceeded what they used. According to state law, power authorities can only charge governmental customers a percentage of what it costs to build the power generator and grid.
That percentage is based on the amount of power consumed by the customer.
The state alleged that the Department violated California law and state Constitution by burying overcharges in monthly bills for agencies such as the Los Angeles Unified School District, the State Teachers Retirement System, State Universities, California Highway Patrol, Department of Parks and Recreation, and the Employee Development Department, among others.
Attorney Eric Havian, who represented the original whistle blower, said “The problem was first detected by an individual doing work for another utility who noticed that the Department was not complying with state law and brought it to our attention.”
The settlement includes awards of $6 million to state agencies, plus more than $1.7 million in electricity rate credits and $11.8 million will go towards funding projects to help reduce electricity consumption in state buildings. The remaining $160 million will go to governmental agencies in Los Angeles for funding electricity reduction projects.