Los Angeles Electricity Surcharge Class Action Settlement

Los Angeles utility customers are now getting a discount to make up for a previous electricity surcharge, thanks to a $52 million class action settlement.

Plaintiff Patrick Eck initiated this Los Angeles electricity surcharge class action lawsuit in 2015. He was later joined by co-plaintiffs Tyler Chapman, Brendan Eisan and Justin Kristopher Le-Roy. They brought this utility charges class action lawsuit to challenge an eight percent surcharge added to electric utility rates by the Los Angeles Department of Water and Power.

According to the plaintiffs, this charge exceeds the cost of delivering utility service. The funds collected are allegedly diverted to the City’s Reserve Fund, which is used to fund general City operations.

The plaintiffs claim this surcharge constitutes a tax that under California law must be approved by a vote of the electorate. Since the surcharge has not been approved, it is unlawful under the state constitution and the California Government Code.

Under terms of the electricity surcharge class action settlement, the City and LADWP will set up a settlement fund worth $52 million. This fund will be distributed to LADWP electricity customers in the form of a per-kilowatt-hour credit toward their electric rates. The fund will also cover service awards to the class representatives, class counsel’s attorney fees, and the cost of administering the settlement.

In addition to distribution of the settlement fund, existing LADWP customers started getting a discount on their retail electricity rates on July 1, 2017. This discount will save ratepayers an estimated $243 million over the next three fiscal years.

The City has also agreed not to transfer funds from the LADWP to the City under the 2016 Electric Rate Ordinance and to cap transfers under the 2008 ordinance at eight percent. Two charitable organizations will receive a payment of $650,000 under terms of the electricity surcharge class action settlement.

Class Members automatically benefit from this class action settlement unless they file an opt out form by Dec. 27, 2017.

Who’s Eligible

Class Members include all electricity customers of the LADWP between Jan. 29, 2012 and Sept. 14, 2017.

Potential Award

Varies.

Retail electricity customers of LADWP will receive their settlement benefits in the form of reductions in the rates they currently pay for electricity.

Effective July 1, 2017, customers began an eight percent discount on the amounts charged pursuant to the 2016 Electric Rate Ordinance. The settlement fund will be used to fund a per-kilowatt-hour credit for retail electricity customers.

The settlement fund is intended to be an estimate of eight percent of the city’s retail revenues collected under the 2016 Electric Rates Ordinance between April 15, 2016 and July 1, 2017. The estimate will be reconciled later with the actual amount charged. If eight percent of the actual amount charged is greater than the settlement fund amount, retail electricity customers will receive a credit for the difference.

Proof of Purchase

No proof of purchase or other documentation is necessary.

FAQs

FREQUENTLY ASKED QUESTIONS»

Exclusion Deadline

12/27/2017

Case Name

Eck, et al. v. City of Los Angeles, et al., Case No. BC577028, in the Superior Court for the State of California for the County of Los Angeles

Final Hearing

2/14/2018

Settlement Website

www.LACityTransferSettlement.com

Claims Administrator

LADWP Electric Rate Case Settlement Administrator
c/o Kurtzman Carson Consultants
P.O. Box 404007
Louisville, KY 40233-4007
1-877-306-5238
admin@LACityTransferSettlement.com
Fax: 866-715-4512

Class Counsel

Christopher P. Ridout
ZIMMERMAN REED LLP

Robert P. Ahdoot
AHDOOT & WOLFSON PC

Eric J. Benink
KRAUSE KALFAYAN BENINK & SLAVENS LLP

Defense Counsel

Benjamin Chapman
OFFICE OF THE CITY ATTORNEY FOR THE CITY OF LOS ANGELES