California lawmakers have rejected a proposal aimed at cracking down on how some of the nation’s largest utilities spend customers’ money.
Despite accusations from consumer groups that utilities are using customer funds for prohibited purposes, a bill in the state Legislature failed to pass a legislative committee for the second time in the face of intense opposition from utilities, including Pacific Gas & Electric (PG&E).
The bill, known as the Utility Accountability Act, would have expanded the definitions of prohibited advertising and political influence to include decisions on rate-setting and franchises for electrical and gas corporations. It would also have allowed regulators to fine utilities that break the rules.
PG&E opposed the bill, arguing that it would take away the power of state regulators to examine utility companies’ costs. The company also claimed that it is appropriate for customers to pay for its membership fees in industry associations because they benefit customers by coordinating emergency response and wildfire training.
Consumer groups, however, argued that the current rules incentivize utilities to find ways to use customer funds for their own interests. They pointed to examples such as PG&E’s $6 million TV advertising campaign promoting its plan to bury power lines, which was funded by a customer-funded account originally intended for wildfire risk reduction.
The California Public Utilities Commission will now decide whether customer funds can be used to pay for the ads. Some consumer groups argue that the ads cross the line and constitute a misuse of ratepayer funds, while PG&E maintains that they provide important safety information to customers who may not have access to the internet or email.
Despite the rejection of the Utility Accountability Act, consumer groups say they will continue to fight to hold utilities accountable for their use of customer money.
