Utility Affiliates Under Fire in California
California state regulators chastised an unregulated affiliate of Pacific Gas and Electric Co. for breaking state-mandated marketing guidelines at the same time they proposed a new special complaint procedure to be used in policing the rules governing relationships between natural gas and electric utilities and their unregulated energy affiliates. The ongoing opening up of the state's gas and electricity markets makes the sanctions necessary.
Fines of up to $10 million are being proposed by the California Public Utilities Commission, although in its actions April 9 it did not impose any fines yet against PG&E.
The CPUC said it sided with consumer advocacy groups that had accused PG&E of allowing its affiliate, PG&E Energy Services, "to misuse the parent name and logo in soliciting business."
Regulators said they will obtain more details on the newspaper advertisement in question before setting a penalty, adding that it wants to "put on notice both PG&E and other electric utility distribution companies that they must clearly show the distinction between the parent utility company and affiliates using the parent company name and logo in advertising for electricity customers."
The controversial ad, which first appeared in newspapers March 23, prompted both The Utility Reform Network (TURN), a long-time utility watchdog group, and the CPUC Office of Ratepayer Advocates (ORA) to file a motion to stop the ad from being published further. However, PG&E voluntarily stopped publication of the ad once the controversy arose, and the CPUC did not have to impose an injunction.
The focus of the concern centered on the fact that the CPUC-required disclaimer by PG&E Energy Services in using its affiliated utility's logo was printed too small and vertically, making it virtually impossible for consumers to read.
In the future, these disputes will be handled by the CPUC's proposed special complaint process, which will include commission mediation if the utility cannot quickly resolve the complaint. Comments on the CPUC's new procedure are due May 12.
Richard Nemec, Los Angeles
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