DWP to refund agencies

The Los Angeles Department of Water and Power will refund $160 million that it overcharged other government agencies for more than a decade, the state attorney general’s office announced Monday.

The DWP agreed to the settlement after a San Bernardino County judge in June 2007 ruled that the nation’s largest municipal utility had intentionally overcharged Los Angeles County, the Los Angeles Unified School District and other local government agencies, and ordered the DWP to refund more than $200 million.

Atty. Gen. Jerry Brown said the refunds would provide much-needed money for Los Angeles schools and other government agencies during the current economic downturn. He said the DWP agreed to settle the case, in part, because of the mounting legal costs of the agency’s appeal.

DWP spokesman Brooks Baker said that the agency had budgeted for a potential settlement, and that “there will be no impact to our ratepayers.”

The biggest beneficiary will be the school district, which is set to receive $25.3 million in the settlement, as well as $28 million in a special account set up for projects to reduce energy consumption. The county will receive $12.4 million, plus $13 million for energy conservation; and the county Metropolitan Transportation Authority will collect $11 million, plus $11 million for energy saving programs.

The Los Angeles Community College District, UCLA, Caltrans, the California Highway Patrol, the state Department of Motor Vehicles and several other state agencies also will receive refunds.

Brown said the legal settlement included money for energy conservation because it served the “common good.”

“It’s just good public policy to drive efficiency,” Brown said.

Under state law, municipal power authorities can bill government agencies for a share of the costs of building power plants and transmission lines, but those charges must be based on the amount of power the customer used from those projects.

The lawsuit asserted that the DWP was charging the plaintiffs as much as 60% more than their legitimate share of capital costs and that the agencies were unaware they were being overcharged until a whistle-blower came forward in 2000.

H. David Nahai, DWP chief executive and general manager, said the agency respected the court’s ruling in the case and had since corrected its billing practices.

“We are pleased to have fashioned an agreement which will enable energy efficiency improvements and overall lowered energy usage for the plaintiffs,” Nahai said in a statement. “We can also take comfort in the fact that the involved parties are government entities whose constituents are largely LADWP customers.”

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phil.willon@latimes.com