Los Angeles City Council Approves $30 Million Refund to Power Company

A $50,000 electric bill? The cost of cooling L.A.’s biggest houses in a heat wave? There are enough dollars at stake for the mayor to pay the power company, right?

That was the thinking behind the City Council’s decision last week to approve a settlement.

Los Angeles Mayor Eric Garcetti and the City Attorney’s office agreed that the power company has agreed to refund some of $30 million in excess payments. L.A.’s attorney, Andrew F. Miller, said the city will repay $3.4 million of the $6.6 million it was charged. That leaves $2.8 million owing to the city.

The settlement with PacifiCorp is the culmination of a years-long effort by the city to recoup money lost because of the power company’s error. In 2001, the city settled a related cost-shifting lawsuit with PacifiCorp over $9 million that it had not been paid for. That case ended in 2002 when the state’s high court ruled that California couldn’t enforce an arbitration clause in the agreement.

It’s not that the city did anything to deserve this. The city did nothing wrong, it was just the victim of a lousy business deal.

It’s more that the city got a bad deal, that the power company didn’t play by the rules. And the city didn’t play by the rules when it looked for help — by trying to make sense of a complex system of billing, by trying to find a way to do without private companies.

It didn’t help that the city didn’t make a real effort to educate itself about what was going on. The city should have been more curious, more open to having others look at its problems, and more willing to take criticism. It should have known that what it was doing was against the rules and the spirit of the law.

Instead, it looked at the wrong people for help. When California’s Public Utilities Commission — which oversees the electricity system that provides Los Angeles with its power — took over the investigation in 2010, it did what it does best: It ignored the city and allowed the power company to set the terms and conditions of the

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