PG&E asks customers to pay for ad praising its undergrounding work
Many PGE customers have likely seen an upbeat commercial promoting the utility's effort to put 10,000 miles of power lines underground to protect against wildfires. Little did those customers know they would be asked to pay for it.
Pacific Gas Electric spokesperson Jennifer Robison said in an emailed statement Thursday that PGE billed customers for the advertisement, called “Undergrounding 10,000 miles of Powerlines for Safety,” in filings to its regulator.
In the 30-second ad, which was shown during a recent Golden State Warriors basketball game and has 1.4 million views on YouTube, CEO Patti Poppe shakes hands with workers while sporting a hard hat. She says in a voiceover, “we're transforming your hometown utility from the underground up.”
Robinson said this ad and similar television spots have cost to up to $6 million since April 2022. As part of the company's accounting process with the California Public Utilities Commission, PGE requested those costs be covered by a ratepayer funded fire risk mitigation account.
PGE said this particular TV ad falls into the category of safety communications, which are legally allowed to be covered by customers. Promotional advertising, meanwhile, is required to be paid for by shareholders.
The purpose of the Fire Risk Mitigation Memorandum Account, according to state law, is to record activities including system hardening, event response and vegetation
management.
Katy Morsony, an energy attorney for the Utility Reform Network, believes that the ad is a clear example of brand advertising, not safety messaging.
“This ad is a message about a program that they claim has an impact on safety,” Morosny said, “and something they want public support for.”
The rate request comes amid a new year of rate hikes, with the average PGE household paying an additional $34.50 on its monthly bill, and fears that electricity prices will continue to rise.
Proposed legislation called the Utility Accountability Act, moves through the state legislature. Authored by Senator Dave Min, D Orange County, Senate Bill 938 aims to prevent California's investor-owned utilities from billing customers for political activities, such as lobbying and promotional campaigns.
The measure was inspired by a Sacramento Bee investigation that found SoCalGas, the nation's largest gas provider and another major California
investor-owned utility, booked at least $36 million to ratepayers since 2019 for political opposition to building electrification policies.
Those political activities included creating a front group, transporting sympathetic business owners to meetings and paying a law firm for research into legal action against local gas bans.
Among other reforms, Min's bill will require utilities to say in any given media advertisement whether it is paid for by customers or investors.
“We think that this is a common sense protection for ratepayers from potentially bearing additional costs that they shouldn't have to absorb, especially today,” said Morsony, whose organization is one of the bill's sponsors.
Robison, the PGE spokesperson said in the emailed statement: “Our customers have told us they want to know how we are investing to improve safety and reliability. Television advertising is one of several ways we share this information with our diverse customer base.”
Investor-owned utilities have “above the line” costs billed to customers and “below the line” costs drawn from corporate profits. Billing customers for anything other than providing safe and reliable energy service is a violation of state and federal law.
But supporters of the bill say those laws are riddled with loopholes that have allowed utilities across the country to engage in political lobbying using customer money. Min's bill is aimed at closing several of those gaps in transparency and accountability.
The measure explicitly defines “political influence activity,” prevents the use of customer money for membership dues in trade groups such as the American Gas Association, and requires utilities to disclose whether advertising campaigns are paid for by customers or shareholders.
PGE has come out in opposition to the bill, calling it unnecessary, duplicative and excessive in reach in a recent letter to lawmakers.
After reporting a 25% increase in profits last year, PG&E raised residential electricity rates by about 20% in January an average annual increase of about $400 per household.
“The bill would cause conflicting accounting requirements and negatively impact California's energy and climate goals,” wrote the utility's lobbyist Brandon Ebeck. “The narrative in support of this bill also grossly neglects PGE's leadership as a climate steward.”
SB 938 is scheduled for a hearing in the Senate Energy, Utilities and Communications committee on April 16.