DWP Rubberstamps $242 Million Tuesday Takeaway from Ratepayers In Violation Of Their Rights, Says Consumer Watchdog

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Nov 28, 2017, 18:20 ET

SANTA MONICA, Calif., Nov. 28, 2017 /PRNewswire-USNewswire/ -- Today's vote by the Board of Water and Power Commissioners for LADWP to transfer $242 million in ratepayer money to the City's coffers is an illegal tax that should be either rebated or plowed into the LADWP's electric infrastructure, said Consumer Watchdog and LADWP Advocacy Committee President Jack Humphreville.

Consumer Watchdog said that it was exploring legal options to have a court prevent the money from being taken from ratepayers to fill a city budget hole rather than for utility services.

"This is a huge ratepayer rip off that on Giving Tuesday, the LADWP has the nerve to take $242 million from ratepayers instead," said Consumer Watchdog energy project director Liza Tucker.

"It is a travesty that the city's ratepayer advocate, Fred Pickel, did not say a word to stand up for ratepayer rights. And it is a travesty that Mayor Eric Garcetti shamefully abuses his power and breaks our trust by taking this hard-earned money to cover up for the city's own fiscal mismanagement."

Jack Humphreville, President of the LADWP Advocacy Committee, said the money should be used on behalf of LADWP ratepayers. "The money would be better used to fix our infrastructure, fund our capital expenditures, or pay down the LADWP's $4.5 billion unfunded pension liability."

Garcetti campaigned on a platform of LADWP reform and a promise of holding down utility rates and rejecting union demands for outsized raises. DWP workers currently earn an average salary of $100,000 a year and are among the highest paid among municipal utility workers nationally.

"Instead of fulfilling his campaign promises, Garcetti gave in to union demands, backed rate hikes, and dug a deeper hole on pensions that will fall onto ratepayers to fund," said Tucker. "Today's DWP vote is one hand simply washing the other in turn."

The 8% transfer fee violates the state constitution which, after the passage of Prop 26, prohibits the levying of new taxes without a two-thirds vote of the public. Litigation to settle the case against the City for past violations is being settled on the cheap when nearly $2 billion has been taken from ratepayers. The City plans to continue future takings from ratepayers without a vote of the public.

"Settling the case amounts to an admission they did something wrong but with this vote, the city is signaling that it's going to keep right on doing it," said Tucker. "The legality of what they are doing is far from settled."

SOURCE Consumer Watchdog