Californians pay some of the highest electricity rates in the country due to the necessary maintenance and upgrades for electrical equipment to reduce wildfire risk. However, utilities like Pacific Gas & Electric (PG&E), Southern California Edison, and San Diego Gas & Electric have faced scrutiny from consumer groups for how they spend the money collected from customers.
Consumer groups allege that utilities are using customer funds to fund trade groups that lobby legislators and for disguised TV ads as public service announcements. A legislative bill proposes expanding the definitions of prohibited advertising and political influence, including regulators’ decisions on rate-setting and franchises for electrical and gas corporations, and allowing regulators to fine utilities for violations.
The bill faces opposition from utilities and labor unions concerned about prohibiting union members from lobbying. The bill failed to pass in a committee after some Democrats in the majority did not vote. A second vote is scheduled for Monday, and if it fails again, the bill is unlikely to pass this year.
PG&E argues that regulators have allowed splitting various expenses between customers and shareholders, including salaries and trade association membership fees. They also emphasize the benefits provided by some trade associations to customers.
Consumer groups argue that the current rules incentivize utilities to exploit loopholes, pointing to $6 million in TV ads paid for by PG&E to promote its wildfire risk reduction plan, which increased customer bills. PG&E says they have not yet asked regulators to review the expense for those ads, but the California Public Utilities Commission will make the final decision.
