For months, her utility bill seemed low. But Rose Hogue, 67, thought it was because she was spending more time away from her San Pedro home.

She had no idea what was really happening. The Los Angeles Department of Water and Power had been estimating her bill since December, using citywide averages because the department’s $162 million new billing system was broken.

Typically, Hogue’s two-month tab for electricity, water, sewer and trash is less than $300. But on August 14, after the DWP read her meter, she opened a bill for $1,395.

“I almost had a heart attack,” said Hogue, who has congenital heart disease, diabetes and uses a walker because of arthritis. She lives off her monthly Social Security check of $1,483.

Hogue called the department to find out what happened, and she was placed on hold for more than an hour. She ultimately found out she had a leak and worked out a payment plan. If she can prove she repaired the leak, Hogue could qualify for a partial credit.

Thousands more DWP customers are facing similar problems. Since the agency launched its $162 million billing system a year ago this September, the customer service problems have not relented.

A wave of huge bills with actual meter readings flooded mailboxes in recent months. Shocked and angry customers, unwilling or unable to wait on hold for more than an hour, have taken to social media, dinner parties, the Consumer Affairs website (where the DWP rates one out of five stars) and anywhere else they can complain.


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“It’s an absolute nightmare for the customer,” said Nick Vyas, the director of the USC Marshall Center for Global Supply Chain Management.

Vyas, who has consulted for Fortune 50 companies, compared the DWP’s problems to the troubled rollout of the Affordable Care Act website. In both cases, officials launched the system before it was ready.

They should have thoroughly tested it on small groups of willing customers, he said, until all the kinks were ironed out. That way, “you’re not subjecting the customer to feeling the pain of learning your system,” he said

But the DWP, unlike the federal government, hasn’t fixed all of its glitches. The system mistakenly charged higher rates when one-time corrections pushed the underestimated customers into a high-usage category. Others were assigned late fees after they were assured they would be waived.

“A lot of our customers are quite frustrated, and we recognize and apologize for it,” DWP Senior Assistant General Manager Randy Howard said in an interview.

The department is trying to solve the problems. Earlier this month, the DWP civilian oversight board approved a $16 million technical support contract with Oracle. Officials have hired 88 customer service representatives since January, and hope to hire 200 more by December.

Howard said all customers who were incorrectly pushed into the higher rate tier would see a billing credit by September. He couldn’t say how many fit that scenario. Also, he said managers recently decided to waive all late fees — a change they have not yet announced.

We’re moving all in the right direction,” Howard said. “It’s just taking us longer than any of us expected.”

While the computer glitches are worked out, customers are frustrated by long phone hold times and multiple phone calls that don’t resolve their problems.

David Landau has called the DWP seven times since late April about his home bill, which has climbed to more than $4,100 with mistaken late fees, he said.

On one call, he waited on hold for an hour and a half — and that’s not unusual, said Ratepayer Advocate Fred Pickel. Some people wait up to two hours before they speak to someone, while others are disconnected before that can happen, Pickel said.

Landau’s single family home in Los Feliz, which has a swimming pool, usually gets bi-monthly bills around $1,000. But like many others, Landau didn’t receive a statement for eight months. Instead of estimating some bills, the system simply withheld them.

Each time he called, he made arrangements with representatives, Landau said, but the next bill wouldn’t reflect the changes. DWP spokesman Joe Ramallo said Landau recently paid late, which may have cancelled an arranged payment plan.

“It was as if I never had a conversation with anybody,” said Landau. “The time-suck, the aggravation of it, the incompetence. They kept screwing it up every month.”

FLOOD OF CALLS

Since the launch, the DWP has struggled to stay ahead of problems. Fixing one problem just caused another. At first, the system was spitting out inaccurate bills — some double the normal cost, and others for nothing. The software was so unpredictable that officials decided around Thanksgiving they couldn’t justify shutting off service to delinquents.

They worked out some software bugs and hired 50 emergency customer service workers. Businesses long past due received their first cancellation notices in April. When the average phone hold time dropped from about 30 minutes to 15 minutes in May, officials resumed shutting off service to late residential customers.

Meanwhile, new meter readers collected accurate information and the department dropped higher bills into the mail. Calls started flooding in. Since February, before collections began, the call volume nearly doubled — from 15,000 calls per week to 27,000 in August, which is also typically one of the busiest months. The average hold time climbed back to 35 minutes by the first week of August, and has dropped slightly since then.

The department should have anticipated the flood of calls from estimated bills, said Vyas from USC, and mailed customers an explanation with a dedicated hotline to call. Many find the DWP bills hard to understand, anyway, and don’t realize the significance of the italicized word “estimated” by their charges.

“It requires leadership and the ability to stay ahead of the problems,” Vyas said, “not just react to them.”

That has been a challenge, said Howard from the DWP, who began overseeing customer service five months ago. While officials tried to warn all customers who weren’t receiving bills, like Landau, they didn’t explain the possible consequences of estimations.

“I would ask that our customers continue to have some patience and work through the process with us,” Howard said.