DWP's $160 Million Ripoff

Ratepayers get the bill for a decade of overcharging government agencies for electricity

If you thought you'd seen just about everything from the Department of Water and Power, you were wrong. Now the city-owned utility company has admitted it cheated government agencies for a decade and will have to pay them $160 million as part of settlement announced Monday.

That's 10 times what DWP officials claim it will cost extra to give its workers a whopping 5.9 percent pay raise in the middle of the worst recession in a generation.

So you know what your rate hikes will be going for and why so many more are coming:

In June 2007, Superior Court Judge John P. Wade ruled that DWP had inflated its electric bills to governmental customers going back to 1998 by a total of $223.8 million because it charged them more than a share of the capital costs needed to generate electricity in proportion to the share of the plant's output they used.

Use 5 percent of the plant's electricity, pay 5 percent of what it cost to build: That was the rule. That was the law. But DWP plays by its own rules and charged a lot more than that.

So here's the windfall coming to local agencies:

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