In an attempt to deter other utilities in the state, Californiaregulators Nov. 5 slapped a $1.68 million fine on Pacific Gas andElectric Co. for allowing an unregulated energy services affiliateto violate newly created state rules earlier this year governingthe use of the parent company name and logo. The PG&ampE utilitycompany expressed disappointment and vowed to appeal the decision,which requires the penalty be paid out of shareholder funds.

If necessary, the utility indicated it would appeal this in thestate appeals court after first seeking a rehearing by theregulators. The California Public Utilities Commission cited 90violations of its so-called utility affiliate transaction rules in”High Voltage” print advertisements published last march forPG&ampE Energy Services.

A PG&ampE utility spokesperson called the penalty “excessive,”indicating that the utility took corrective action immediatelypulling the ads once the violation was recognized. The fine was”far in excess” of what the administrative law judge in the caserecommended ($338,000) and was determined without convening ahearing, something the utility requested, the spokesperson said.”Thus, we think our due-process was violated.”

The focus of the alleged rules violation is a requirement inCalifornia that all advertising, marketing and promotion byunregulated affiliates of the major utilities must use a “plain andlegible or audible” disclaimer, stating that it is not the samecompany as its utility and is not regulated by the CPUC.

“The disclaimer used in the (PG&ampE Energy Services) ads wasnearly illegible due to the low contrast of colors and quality ofnewsprint, and the small print size,” the CPUC said in its newsrelease on the action. “PG&ampE stopped further use of the adsafter March 23 and set up a pre-clearance review policy involvingkey executives for both firms.”

CPUC President Richard Bilas recommended the tougher penalty,developing the alternative order which was approved by the fullfive-member commission of gubernatorial appointees. In taking thisaction, the CPUC stressed that future violations would result in”even higher penalties.”

Under California law, the CPUC may impose penalties of not lessthan $500 nor more than $20,000 for violations of its orders. Eachviolation is considered a separate offense, so in the PG&ampEutility’s case, 20 violations resulted from four advertisementsbeing published March 16, and another 70 violations occurred from16 re-publications of the earlier ads.

Richard Nemec, Los Angeles

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