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California Sets Utility Shutoff Probe, Interim Rules

Lacking a voluntary solution by all the state's major investor-owned utilities (IOU), the California Public Utilities Commission (CPUC) last Thursday ordered interim actions by the IOUs to address the mushrooming problem of energy utility service disconnections, along with opening a statewide proceeding on the festering issue. After obtaining stakeholder feedback and ideas in the weeks and months ahead, the CPUC said it intends to act on a final order in June.

Demonstrating its impatience, the state regulatory panel ordered the major utilities to take two actions within five business days: to inform any customer in danger of shutoff due to past-due payments that he or she can arrange for a special payment plan and to liberalize credit and deposit requirements for customers.

CPUC President Michael Peevey said the current sour economy and the state's extraordinarily high unemployment levels have led to a spike in utility customer shutoffs, and the state regulators' corresponding desire is to reexamine rules regarding the IOU shutoff process. "We want to identify more effective ways for utilities to work with their customers and develop solutions that help avoid unnecessary disconnections without raising undue costs or burdens on other customers," Peevey said.

The rules and the statewide investigation will center on customer notification and education, Peevey said. The interim actions ordered for the four major utilities -- Pacific Gas and Electric Co., Southern California Edison Co., Southern California Gas Co. and San Diego Gas and Electric Co. -- will be folded into the broader "order instituting rulemaking" (OIR).

Peevey said the latest action is reluctantly taken after two previous forums in December and January this year failed to result in a consensus among the IOUs in how to collectively and individually address the problem.

Triggered by reports from utility consumer organizations and a CPUC en banc hearing in mid-December, the IOUs at that time agreed to stop any customer service shutoffs at least through the holidays. A workshop followed, but nothing could be resolved and the CPUC's independent consumer unit, the Division of Ratepayer Advocates (DRA), criticized the utilities for allegedly not doing enough to curb the rising numbers of customer shutoffs for nonpayment.

In response to the CPUC action Thursday, DRA lauded the regulators, as did the consumer group, The Utility Reform Network (TURN), which sought a "kinder, gentler" utility shutoff policy to stem the rising tide of disconnections, estimated by TURN at up to 70,000 households having their electric and/or gas service shut each month.

"The utilities should be in the business of keeping the lights on, not shutting them off," said TURN Executive Director Mark Toney. DRA Director Dana Appling praised the CPUC for its latest action, saying "it comes not a moment too soon," and noting that DRA's latest analysis showed that the problem is worsening. "The utilities themselves have even reported that 2010 would see an even greater increase in customer disconnections," Appling said.

Eventually, Peevey said he hopes the CPUC proceeding will result in a "standardized" approach among each of the IOUs in handling the issue. In the meantime, all five CPUC members, including its newest commissioner, Nancy Ryan, expressed support for the interim requirements for the utilities. Ryan said she was looking forward "to hearing from parties their ideas on how we can continue to improve the way utilities assist consumers."

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