SACRAMENTO, Calif. (AP) — California lawmakers on Monday rejected a proposal aimed at cracking down on how some of the nation's largest utilities spend customers' money.
California's investor-owned utilities can't use money from customers to pay for things like advertising their brand or lobbying for legislation. Instead, they’re supposed to use money from private investors to pay for those things.
Consumer groups say utilities are finding ways around those rules. They accuse them of using money from customers to fund trade groups that lobby legislators and for TV ads disguised as public service announcements, including some recent ads by Pacific Gas & Electric.
A bill in the state Legislature would have expanded the definitions of prohibited advertising and political influence to include things like regulators’ decisions on rate-setting and franchises for electrical and gas corporations. It would also allow regulators to fine utilities that break the rules.
Monday, the bill failed to pass a legislative committee for the second time in the face of intense opposition from utilities, including Pacific Gas & Electric.
“We’ve seen too many examples of the blatant misuse of ratepayer funds across the state,” said Democratic state Sen. Dave Min, who authored the bill that failed to pass on Monday. “I know that consumers are outraged by this.”
PG&E opposed the bill because it said it would take away the power of state regulators to examine utility companies’ costs and decide whether it is “just or reasonable″ for customers to pay for them.
Plus, PG&E lobbyist Brandon Ebeck said it’s appropriate for customers to pay for the company’s membership fees that go to various industry associations because they benefit customers. He noted those groups coordinate emergency response and wildfire training. When the war in Ukraine started, the Edison Electric Institute — a national association representing investor-owned utilities — sought to find surplus equipment that could be sent to Ukraine.
“There’s a lot of benefits to customers,” Ebeck said.
The bill was part of a larger backlash against the rising cost of electricity in California. Power is expensive in California in part because of the work required to maintain and upgrade electrical equipment to reduce the risk of wildfires in a state with long, dry summers.
As rates have continued to climb, utilities like Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric have faced increasing scrutiny from consumer groups over how they spend the money they collect from customers.