CAPHCC Wins Utility Fight

CEO@caphcc.orgLegislative, News for PHCC Members - All

The California Public Utilities Commission rejected a plan advanced by Sempra Energy owned San Diego Gas and Electric Company (SDG&E) to use its customers’ bills to provide Line Item Billing Service on a non-tariffed (or “nontariffed”) basis for non-utility services provided by non-utility providers. SDG&E needed the PUC’s authorization to establish a fee for this service that would be added to the consumers’ regular utility bill.

Sempra Energy, based in San Diego, is a Fortune 500 energy services holding company with 2014 revenues of more than $11 billion. The Sempra Energy companies’ 17,000 employees serve more than 32 million consumers worldwide.

SDG&E proposed to initiate a program by which it will allow non-discriminatory access by third-party providers (including affiliates) of energy-related or home safety and convenience services approved by SDG&E. The service would offer customers the option to pay for specific approved products or services via their monthly SDG&E bill. The only example of such products or services SDG&E provided, when asked by the PUC, was a home warranty. Currently, SDG&E does not have Commission approval of such a category.

CAPHCC argued successfully that these policies distort the market and disadvantage contractors in the service and repair industry who typically have to agree to perform work at below market rates. Specifically, we argued:

  • SDG&E has a unique relationship with its paying customers and as such, enjoys a distinct advantage relative to third-parties such as the protesting parties. SDG&E should not take advantage of its unique relationship to sell “unrelated products and services.”
  • Third-party providers may be encouraged to provide minimum levels of service or use the cheapest possible contractors.

In their rejection the PUC cited these reasons:

  • The requested authorization to establish Line Item Billing Service on a non-tariffed basis is too broad and lacks specificity. It places no limits on the type of products and services for which SDG&E could provide the billing services.
  • The proposed Line Item Billing Service program has no safety or other benefits for utility customers.

The decision of the PUC was unanimous.

Obviously, the PUC could have rejected SDG&E’s request without our protest but absent our opposition, it would have gone to the commission without any industry or consumer comments – and the outcome would probably have been different.

The point of this? CAPHCC speaks and acts on your behalf to preserve your rights as business owners to compete with each other, not with companies with $11 billion in annual revenue.