Cora Hayes is celebrating a big win in a legal case challenging the oversized electricity bills that the Richmond Redevelopment and Housing Authority has imposed on its low-income tenants since 2012.

“We did it,” said the longtime public housing activist who was among the six current and former RRHA tenants who secured a settlement with RHHA that will mean refunds and lower rates going forward for more than 7,000 tenants whom RRHA overcharged.

Under the deal valued at nearly $2.77 million, RRHA will refund about $1.28 million in overcharges and other fees.

The authority also will make adjustments to current and future bills worth an estimated $1.3 million.

On average, affected tenants could receive bill credits or refund checks averaging about $112, with some families receiving larger amounts to reimburse for wrongfully applied late fees and for inaccurate billing.

The settlement was crafted by lawyers with the Legal Aid Justice Center and Consumer Litigation Associates who represented the tenants.

It also represents a significant hit to RRHA’s revenues at a time when the public housing authority is bemoaning the lack of federal funds to maintain its rental units and has yet to ensure the heat will work in all 4,000 units in the city next winter.

The settlement is the largest ever in this type of case in Virginia, but still far smaller than a jury might have awarded if the case had gone to trial.

The settlement would result in refunds to tenants of about 22 percent of the wrongful charges RRHA imposed, according to the final settlement order entered July 10 by U.S. District Court Judge John A. Gibney Jr.

RRHA agreed to the terms in February to end the litigation and Judge Gibney tentatively approved the settlement in March. However, the final order was held up as RRHA reported needing time to correct errors in tenant utility accounts, according to court documents.

When the final settlement went to Judge Gibney, RRHA had boosted the final settlement award by about $220,000, the order states. The total amount could increase by the time settlement payments go out — possibly in late August — because of the interest that is being applied.

According to the order, the settlement will go into effect in 45 days if there is no appeal of the terms. There is a 30-day deadline for filing an appeal, which expires Thursday, Aug. 9. No appeal is expected as virtually everyone affected has accepted it, meaning that current and former tenants should begin receiving payments or credits on or about Aug. 24.

Under the terms of the agreement, Ms. Hayes and her fellow plaintiffs are to receive $1,000 apiece for their time and trouble pursuing the case. The others plaintiffs are Shanta Miles, Jacqueline Turner, Cenquetta Harris and Kathy Allen and her husband, Joseph Allen, who has since died.

RRHA also is to pay $100,000 to the Legal Aid Justice Center for legal fees and court costs.

The majority of funds, totaling about $1.17 million, are to be distributed as follows:

• $815,602 to the full class of 7,236 current and former tenants whom RRHA identified and overcharged between November 2012 and Oct. 31, 2016.

Current tenants would receive credits on their past and future bills, depending on their situation. Former tenants would receive refund checks if their electric bills were fully paid or any remainder if they left a unpaid bill.

RRHA officials told the court that it didn’t have current addresses for 546 tenants it could not find. They will have seven years to claim their refunds. Another 28 people who were never notified of the suit will be given an opportunity to receive the same terms.

• $112,876 to current and former tenants to reimburse them for late fees that resulted from unpaid, excessive and unlawful electricity charges that were billed between Feb. 1, 2013, and Nov. 1, 2016. Current tenants would receive credits; former tenants would receive the money as part of their refund checks.

• $249,506 in refunds to current and former tenants as reimbursement for RRHA-acknowledged billing errors that resulted in overcharges, with refunds handled as above.

RRHA also is taking a bigger charge-off. It is barred from trying to collect $35,834 from current and former tenants it charged too little between October 2014 and November 2016 because of its own mistakes.

Also RRHA must reimburse current and former tenants $105,508 who did not receive a higher allowance for electricity use in 2016.

Even before Ms. Hayes and her fellow plaintiffs filed the class action suit in February 2017, RRHA had voluntarily begun raising the allowance on electricity usage as the result of a 2016 study that found serious and multiple inaccuracies in the utility billing, according to the settlement order. The increased allowance for electricity usage took effect with the January 2017 bills.

The $105,508 in credits or refunds to current and former tenants would reflect the new allowance levels that did not apply to their November and December 2016 bills.

Other terms in the settlement also are designed to benefit tenants.

For example, RRHA no longer can use nonpayment of electricity bills, unpaid fees for late payment of rent and utilities and other non-rent charges as reasons to evict tenants. Only nonpayment of rent can lead to eviction as a result of the settlement.

RRHA also must allow people with verified, past-due power bills up to $1,200 to be put on at least a one-year payment plan and must provide those with past-due power bills more than $1,200 at least a two-year payment plan.

RRHA also must absorb Dominion Energy’s customer charge for tenants who use extra power as long as RRHA receives reimbursement from the U.S. Department of Housing and Urban Development at 85 percent of the cost.

RRHA also must keep the higher allowances for power use and the resulting lower charge for excess electricity usage in place through at least November 2019. The settlement only allows a change if RRHA notifies the court that HUD has stopped the reimbursement.

RRHA also must modify its lease to inform tenants of the allowance for electricity use that is included with the rent and the charge that will apply when power use exceeds the allowed amount.

Also, RRHA must provide some kind of relief on power bills for residents who are elderly or disabled or who have special needs for electrical use that are beyond their control and disclose the ability of tenants to seek relief and provide a process for doing so.

The authority also must train its staff on handling utility charges, tenant requests for relief and grievances to contest charges.

Judge Gibney also deemed that the relief to tenants and former tenants was fair, reasonable, and adequate. He also commended Ms. Hayes and the other plaintiffs for “standing up” to RRHA.

“Unfair excess utility charges put so many families in a state of panic and helplessness,” said Ms. Miles, a former public housing resident who was the lead plaintiff in the suit. “Our efforts to get the housing authority to do the right thing was well worth the many years we put into it. This settlement ensures there will be better accountability between RRHA and tenants.” 

Sylvia Cosby Jones, the lead attorney for the Legal Aid Justice Center, hailed the judge’s ratification of the settlement as “a great day for the tenants and former tenants, who not only will be compensated for past unfair charges, but who will have a clearer and fairer process for bills going forward.”

She said the settlement wouldn’t have been possible without RRHA officials coming to the table and agreeing to terms that were acceptable to both sides.