An Idea that Could Help the DWP Recover Some of the Lost Love

GUEST WORDS-The Los Angeles Department of Water and Power, arguably the most reviled public utility in the nation, evokes anger and frustration among the millions of ratepayers in Los Angeles, and for very good reasons. The DWP is full of incompetence and errors unlike any other. Even Mayor Eric Garcetti said during his first State of the City address that there would not be any DWP rate hikes this year because the depart ment has not earned the trust and credibility of customers. 

How incompetent? DWP computer professionals installed a new billing system and the resulting chaos included customers receiving erroneous bills, checking accounts debited gross amounts and in some cases---water and power turned off. Even associated entities, such as the two DWP non-profits have squandered millions in funds. Thus far, $40 million remains unaccounted for and the person responsible has ignored elected city leaders’ pleas to open the books for independent auditing. 

Moreover, the stench remains from last year’s mayoral campaign in which the union that represents the vast majority of DWP employees spent millions funding the campaign of one candidate via an Independent Expenditure (I.E.). 

Additionally, there have been incidents reported where many people have had to endure the lack of electricity for days after a natural disaster like an earthquake−or a “wind” event. Meanwhile, their neighbors across the street have their power restored in hours. 

While there is no such thing as a so-called magic bullet that can help the DWP regain some customer satisfaction, there is an avenue that would benefit ratepayers and in turn make a dent in the visceral disdain they have for this public utility. 

It’s called a Level Pay plan. In various iterations, it would allow business and residential customers to receive monthly bills based on their average water and electricity usage of the prior six or 12 months. Southern California Gas Company offers customers this option, and public utility SMUD (Sacramento Municipal Utility District) offers a reasonable facsimile called “Budget Billing.” Private utility BGE, which serves Central Maryland (including Baltimore) offers a clear reason to choose it: “Budget Billing spreads out your utility payments evenly throughout the year, so you will know what to expect each month.” 

The DWP would begin by taking a look at a customer’s prior six or 12-month water and electricity usage and deduce a monthly average. Once the average usage is determined, the bill for the next six months would have a floor−and a ceiling. Of course as usage increases, so will the average.  But there will no longer be any more bills going up and down like a roller coaster. That’s why it is called a level pay plan. 

Some utilities such as Southern California Edison offer a version of a Level Pay plan that is a bit different. By Month 12, customer statements will show if usage has been lower than the average for the previous 11 months and then a credit will appear.  If usage has been higher than the average, the user will pay a bit more. 

Commercial and residential customers familiar with spiking DWP bills rocketing skyward as a result of rising temperatures will no longer open their bill, utter an expletive and question how they will pay it.  Businesses contemplating capital outlays and expenditures will have the benefit of knowing they will not be getting hit with an enormous bill just as they contemplate spending money to improve their infrastructure, hire more workers, or invest in technology that will enable them to serve their customers in a more efficient way. Families (especially in the San Fernando Valley) enjoying summer vacations will not come home to ponder how they will pay for both the vacation and to keep the house cool. 


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Most public and private utilities in the nation have been aboard the “averaging” plan option for years. It remains a mystery why the DWP has not jumped on the bandwagon.  Is it due to an obstinate DWP bureaucracy resistant to change? General Managers not seeing its wisdom and efficacy? Or is the large union that represents most DWP workers afraid of being unwilling to agree to a fundamental shift in the billing system? 

For those who wonder how the DWP will be able to actually give customers this option since they botched the installation of the new billing system, there is an adage: “You get what you pay for.” Considering that the computer and tech folks at the DWP earn much more in salary than their counterparts at all the other city departments−people need to ask if the discrepancy in salary for the same job classification needs to be remedied. 

In a survey done by J.D. Power among residential customers in the West released in 2013, SMUD ranked second among large utilities in customer satisfaction, with the six areas being: power quality and reliability; price; billing and payment; corporate citizenship; communications; customer service. 

Where did the DWP rank? Dead last. 

It is time for the Board of Water and Power Commission to investigate and explore the option of Level Pay or a variation thereof for ratepayers. Even so, they have to battle entrenched bureaucrats who are more interested in protecting a failed status quo system than implementing a sound, tried-and-true billing route. If the DWP fails to address the overwhelming structural problems inherent in its bureaucracy, perhaps it will give impetus to implode the DWP (figuratively) and start anew with a completely different, non-proprietary public utility to serve the City of Los Angeles. 

As a well-known nationally elected leader has stated accurately on numerous occasions: “Change is hard.” But change has its benefits too.


(Howard P. Cohen is a Political Analyst and was the 1992 Democratic Nominee for State Assembly in the 38th District. The views expressed are Mr. Cohen’s)






Vol 12 Issue 78

Pub: Sep 26, 2014