DWP Abandoning Billing System

Having spent $20 million to develop a new computer billing system, the Los Angeles Department of Water and Power is abandoning pursuit of the project with one vendor because of technological and design problems, officials said Tuesday.

In addition, officials said they are having to replace a separate billing system installed by the same vendor five years ago at a cost of $5 million because the company has decided it will no longer service the system after October.

DWP officials said much of the $20-million development work can be used as the agency switches to another vendor, but they could not estimate Tuesday how much can be salvaged and how much written off.

City Councilman Tony Cardenas fears that the loss to ratepayers will be in the millions of dollars.

“I want to know exactly what happened, why it happened and how it’s not going to happen again,” Cardenas said Tuesday as he and Council President Alex Padilla called for an investigation into the problems with the DWP’s customer information systems.

Cardenas, a former assemblyman, said he saw the same type of problem in Sacramento, where agencies spent millions of dollars developing computer systems only to have to replace them because they don’t work.

“It’s deja vu for me. It’s very frustrating,” said Cardenas, chairman of the council’s Commerce, Energy and Natural Resources Committee.

Council members said they want to determine whether the city has any legal recourse to recover what it has invested.

A representative for the vendor -- Severn Trent, based in Birmingham, England -- could not be reached for comment.

DWP officials said they are preparing a written report on the problems and plan to deliver it to the City Council in the next few weeks.

“Certainly, there are lessons that we can try to take advantage of,” said Pamela Porter, assistant general manager for customer services at DWP.

The DWP spent $5 million in 1998 to have Severn Trent develop, install and service a billing system for its 8,800 customer accounts in the Owens Valley, but the firm has notified the city that it will no longer provide system support, including repairs to the software system, so agency officials have decided to replace that system.

That decision was out of the city’s hands, Porter said.

The DWP has also spent about $20 million in recent years to have Severn Trent develop a computerized billing system for the agency’s customers in Los Angeles.

The DWP decided not to go with the vendor’s system for its 1.3 million water and power customers because the system was determined not to be effective or flexible enough at handling the multiple billing formulas and other complexities of such a large system, officials said.

“We determined it would not meet our long-term needs,” Porter said.

The DWP can keep the source code written for the Los Angeles system and may be able to use other data gathered in any new system developed by another vendor, so all of the investment is not lost, Porter said.

But Cardenas said it appears there will be some loss, and he wants to make sure the agency adopts reforms to ensure such losses are avoided in the future.

“The amount of money government agencies spend on these systems is astronomical,” Cardenas said.

“There needs to be better planning.”