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CPUC Allows Affiliate Employees Free Range

August 10, 1998
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CPUC Allows Affiliate Employees Free Range

California regulators last week (Aug. 6) liberalized the use of utility employees in non-utility energy affiliate companies as part of their action finalizing a set of rules on the interaction between the state's three major electricity utilities and their affiliated companies. With the advent of retail electric competition each of the utilities have several unregulated affiliates offering energy supplies and related services.

Setting aside staff suggestions of a ban against shifting utility employees among affiliates and the regulated company, the five-member California Public Utilities Commission decided to allow utility employees to spend up to 30% of their annual time working for affiliated, unregulated energy companies as long as the utility is reimbursed for the full cost of the employee, plus premiums of 10 and 1%.

"The utilities basically got what they wanted," said a CPUC staff member who was lobbying hard to have the CPUC allow only permanent moves of at least one year for utility employees transferring to an unregulated affiliate.

"It is a big blow to the separation rules. And it is going to be very hard to keep track of this and enforce it."

Generally, the CPUC adopted individual compliance plans by the utilities for dealing with rules that restrict joint marketing efforts between utilities and their affiliates and require the use of a disclaimer on all promotion by the utility affiliates, including the business cards of their employees, stating they are separate and independent from the utility and CPUC regulation.

Competing marketers from out of state have been lobbying long and hard to have the CPUC adopt the toughest possible rules, with costly penalties for violating the rules. Thus far, the CPUC appears to be taking a more moderate approach.

Richard Nemec, Los Angeles

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