The Los Angeles City Attorney’s Office filed a lawsuit Friday accusing a contractor of mismanaging the rollout of a Department of Water and Power billing system that resulted in inaccurate and inflated bills being sent to numerous customers, and leaving others with no bills at all.
City Attorney Mike Feuer alleges PricewaterhouseCoopers misrepresented its level of experience in handling such a system, costing the city “millions” of dollars.
Daniel J. Thomasch, an attorney for PwC, called the lawsuit “meritless,” contending it was a “transparent attempt by the DWP to shift blame away” from the utility.
The DWP “acknowledged in writing last year that PwC fulfilled each one of its contractual obligations and paid PwC in full,” Thomasch said. “We will defend PwC’s excellent work and this case vigorously.”
Feuer lashed out at PwC during a City Hall news conference.
“Instead of solving the problem of modernizing our roughly 40-year-old system, we allege the contract was so poorly performed, so pervaded with misrepresentations, that the results were disastrous,” he said.
“The ratepayers of the city paid $70 million for a billing system that didn’t work,” and then paid millions of dollars “to two other companies to fix the problem,” Feuer said.
“The DWP lost tens millions of dollars in under-billings from commercial customers alone,” the city attorney said.
Feuer contends the company misled the DWP while bidding for the $70 million city contract, by claiming it had a “100 percent success rate” in implementing the billing system, and falsely touted its success with a similar system for the Cleveland Water Department.
The lawsuit filed in Los Angeles Superior Court alleges the company’s inability to handle the implementation left the DWP unable to bill about 180,000 customers, many for a period of 17 months, costing the utility millions of dollars per month in revenue.
Most of the problems have been fixed, Chief Deputy City Attorney Jim Clark said, but “the problems are so severe, and the cover-up was so extensive, it’s difficult to say today it’s entirely been fixed.”
The DWP, which has said it was unprepared to deal with the volume of calls prompted by the billing system issues, has since hired more customer service representatives and opened up customer service centers on Saturdays.
DWP General Manager Marcie Edwards thanked Feuer “for taking strong action today to address the problems too many of our customers experienced when we launched our new customer care and billing system 18 months ago.”
“During our billing system rollout, the new system estimated far too many bills, causing confusion and frustration for too many of our customers and for our own customer service representatives who were trying to help them,” she said.
“I want to assure our customers that since the rollout, we have routinely corrected incorrectly estimated bills found not to be accurate by canceling and rebilling those customers according to actual meter data,” she said. “Still, the problems we experienced were significant, and we understand the anger and frustration experienced by those who were affected.”
She added that the DWP has been “very forthright about the problems with our new customer billing system and we have taken significant steps to fix them.”
— City News Service