SACRAMENTO — California lawmakers on Monday rejected a proposal aimed toward cracking down on the way in which a number of the nation's largest utilities spend their customers' money.
Consumer groups say utilities are finding ways to get around these rules. They accuse them of using customers' money to fund trade groups that lobby lawmakers and for television ads disguised as public service announcements, including some recent ads from Pacific Gas & Electric.
A bill within the state legislature would have expanded the definitions of prohibited promoting and political influence to incorporate things like regulators' decisions on tariffs and concessions for electric and gas corporations. It would also allow regulators to punish utilities that violate the foundations.
On Monday, the bill didn’t pass a legislative committee for the second time, despite fierce opposition from utilities, including Pacific Gas & Electric.
“We have seen too many examples of blatant misuse of taxpayer dollars across the state,” said Democratic Sen. Dave Min, who authored the bill that didn’t pass Monday. “I know consumers are outraged about this.”
PG&E opposed the bill, saying it will strip state regulators of the authority to look at utilities' costs and judge whether it was “fair or reasonable” for purchasers to pay for them.
Additionally, PG&E lobbyist Brandon Ebeck said it's appropriate for purchasers to pay the corporate's membership fees, which go to numerous industry associations, because they profit customers. He noted that these groups coordinate emergency response and wildfire training. When the war in Ukraine began, the Edison Electric Institute—a national association representing private utilities—sought surplus equipment to send to Ukraine.
“There are many advantages for customers,” said Ebeck.
The bill was part of a bigger backlash against rising electricity prices in California. Electricity is pricey in California, partially due to the hassle required to keep up and upgrade electrical equipment to scale back the chance of wildfires in a state with long, dry summers.
As rates have continued to rise, utilities comparable to Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric are facing increasing scrutiny from consumer groups over how they spend the cash they receive from their customers.
Matt Vespa, senior attorney at environmental group Earthjustice, said Monday's vote was “incredibly disappointing.” He said current rules for utilities “incentivize them to see what they can get away with.”
Min and consumer groups, for instance, said PG&E spent as much as $6 million on television promoting to advertise its plan to bury power lines to scale back the chance of wildfires. Some consumer groups opposed this plan since it increased customers' bills.
The ads first aired in 2022 and show CEO Patti Poppe wearing a tough hat with the corporate's logo and say the corporate is “transforming your hometown energy provider.”
The utility accounted for the expenses for those ads through a customer-funded account dedicated to reducing wildfire risk, as first reported by the Sacramento Bee. PG&E spokeswoman Lynsey Paulo said the corporate has not yet asked regulators to review those costs. The California Public Utilities Commission will resolve whether the ads may be funded with customer money.
Paulo noted that state regulators allow utilities to make use of customer funds to fund television security communications.
“Our customers have told us they want to know how we are investing to improve safety and reliability,” Paulo said. “We also use digital communications and email communications, but some customers do not have internet or email access, so we use methods such as television spots to communicate with all of our customers.”
Some consumer groups say the promoting has crossed the road.
“Only at PG&E would (Poppe's) attempts at rebranding be seen as a 'safety message,'” said Mark Toney, executive director of the Utility Reform Network. “This blatant misuse of fee money is exactly why we need SB 938 and its clear rules and required disclosures for advertising costs.”
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