A multimillion dollar blunder at the Los Angeles Department of Water and Power could soon have ratepayers seeing red.
According to a state audit released Wednesday, the botched 2013 rollout of the department’s new billing system has resulted in an additional $245 million in uncollected debt on top of an existing $436 million shortfall. That’s because the department failed to collect payments from some consumers, even while it was overcharging others.
“The department originally budgeted $87 million for implementing CIS [the new customer information system], however, it more than doubled to nearly $181 million over time,” according to the California State Auditor’s report. “Nonetheless, immediately after CIS’s launch, it became clear that the system was not yet ready and that the department’s decision to implement it was questionable at best.”
Utility spokesman Joseph Ramallo says some of the money is likely to never be recovered. The State Auditor agrees and says DWP customers could be the ones to foot the bill.
"The department's poor decision making and poor communications with its board ... may unncessarily cost it millions of dollars from unpaid customer bills -- costs that it will ultimately need to either absorb or pass on to its customers in the form of rate increases,'' according to the report.
The board has pointed the finger at PricewaterhouseCoopers, the vendor which helped launch the new system. In a lawsuit filed last week, City Atty. Mike Feuer alleged that the company intentionally misled DWP officials regarding its ability to handle such a large system.
Read more about recent audit here.