Statement by LADWP General Manager Marcie Edwards Regarding the State Legislative Audit Report on Implementation of the Customer Care and Billing System

*** UPDATED*****

This statement was updated at 2:20pm, with information that clarified financial information contained in the state audit and initial media reports.  

Today, a State Legislative Audit Report was issued on the implementation of LADWP’s Customer Care and Billing System, which was put into service 18 months ago.  The Audit Report follows LADWP’s own in-depth review and report by a third-party expert on what went wrong with the new system, which was presented to the Board of Water and Power Commissioners, to the Los Angeles City Council Energy & Environment Committee, and to the public last November.  The Legislative Audit Report echoes many of the findings of our expert third-party review, without going into the same level of depth and detail of our own report.  It includes recommendations to strengthen communication and oversight of future projects by the Board, with which LADWP agrees. 

While we agree with the auditor’s recommendations, we disagree with the basis for making them.  Our strong disagreement is based on the findings of an independent investigation undertaken on behalf of the City of Los Angeles and the LADWP, which confirmed that consulting firm PricewaterhouseCoopers (PwC), the vendor hired to implement the new customer billing system: (i) intentionally misrepresented its ability to implement the new customer billing system; (ii) intentionally failed to disclose material information to the LADWP, including facts concerning PwC’s failure to properly implement a nearly identical new customer billing system for the Cleveland  Water Department; and (iii) breached several material provisions of the contract that governed implementation of the new system.  On Friday, City Attorney Mike Feuer, filed a lawsuit against PricewaterhouseCoopers in the Los Angeles Superior Court alleging fraudulent inducement through misrepresentation, fraudulent inducement through omission, and breach of contract. 

I want to assure our customers that since the rollout of the new customer billing system, we have routinely corrected inaccurate estimated bills by cancelling and rebilling those customers according to actual meter data. Still, the problems we experienced were significant, and we understand the anger and frustration experienced by those who were affected. 

We have been very forthright about the problems with our new customer billing system and we have taken significant steps to fix them.  We have made tremendous progress and appreciate the recommendations of the State Auditor.  This progress includes:

1. Hiring over 200 customer service representatives and meter readers to reduce call hold times and to better serve our customers;
2. Completing 100% of meter read routes daily and achieving 95% or higher meter read performance, leaving only inaccessible meters unread;
3. Decreasing average call wait times from over 35 minutes to under 5 minutes;
4. Decreasing estimated bills from over 20% to 5%;
5. Improving timely billing from 95% to over 98.5% – exceeding utility industry standards;
6. Completing an internal audit to validate the accuracy of customer billings;
7. Retaining a 3rd party expert consultant to review and validate that bills are calculated correctly and presented accurately on our customers’ bills;
8. Offering a Late Payment Forgiveness Program;
9. Offering online, self-service payment arrangement/plan options for customers; and
10. Improving our responsiveness to email customers.

We are committed to continuing this improvement and to offering better service to our customers as we work to offer budget billing/level pay plans, more convenient payment options and lower call hold times, among other ongoing initiatives.

We know that a very small percentage of our customers continue to have problems with bills they are receiving.  Most of these cases involve bills that have been corrected over multiple billing periods, and are clearly labeled as such on the bill.  We are in the process of proactively reaching out to these customers to explain the corrected charges and answer any questions they may have.  We also encourage any customer who has a question about their bill to contact us at 800-DIAL-DWP (800-342-5397).  Any customer who has tried to have their billing problems addressed and are still not satisfied are encouraged to contact me directly online at www.TellMeDWP.com.

More information about our billing system, its status and the steps we have taken to improve can be found online at www.ladwp.com/BillingInfo.

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