4.  Response to Comments

As noted earlier, the rules revisions we adopt today have been subject to public review and comment. In this section, we respond to the comments received.

4.1 Comments on Tariff Publication Requirements

We received comments from three parties representing broad consumer interests:² our Office of Ratepayer Advocates (ORA); The Utility Reform Network (TURN); and the Greenlining Institute (Greenlining). ORA, without specifically mentioning the tariff publication requirements, "generally supports" the rule revisions set forth in the February 14 draft decision, which include these requirements. Greenlining considers Internet publication a "laudable" advance. TURN supports the Internet publication rule as drafted, and specifically urges us to reject suggestions to adopt a higher annual revenue threshold for the mandatory provisions of that rule. TURN says the Federal Communications Commissions "already requires all carriers to make their rate, term, and condition information available on line . . . . A similar state requirement would not be burdensome." We conclude that the consumer interests in this proceeding generally support the tariff publication rules and specifically endorse the Internet publication requirement.

We received comments from 15 utility parties, some of whom are affiliated utilities or utility associations commenting jointly.³

In concept, the utility parties do not oppose Internet publication of currently effective tariffs. We understand that most of the larger utilities in each of these industries already publish their currently effective tariffs on the Internet. Some of the smaller local exchange companies (Calaveras et al. and Evans et al.) say the proposed rule's annual revenue threshold ($10 million) for mandatory Internet publication is too low; Calaveras et al. would raise the threshold to $50 million, Evans et al. would categorically exempt small local exchange companies from the requirement. The Telco Coalition (made up mostly of "competitive" local and long-distance carriers) would raise the threshold to $200 million. One water company, Valencia, would make Internet publication optional or would allow a utility to request an exception to the requirement. CWA, of which Valencia is a member, suggests a $20 million threshold.⁴

We find that these parties make basically two arguments against the Internet publication requirement as proposed. First, a utility whose customers all live close to its office should not have to provide Internet access to its tariffs. Second, at the proposed revenue threshold, the administrative burden and expense of Internet publication is excessive, particularly for a company that does not already maintain its own Internet site. We reject both of these arguments, as discussed below.

First, Internet access enables a customer to inspect tariffs at a time and place convenient to the customer. The proximity of a utility's office is irrelevant to a customer who needs to check a tariff outside of office hours.

Second, we chose the $10 million revenue threshold on the basis, in part, of our judgment that a utility at or above that threshold will already have computerized most or all of its key office functions, including maintaining its tariffs in an electronic format.⁵ But even assuming a utility's tariffs exist only as typed hard copy, they can readily be scanned into electronic format, which is a key first step to Internet publication. How much of the Internet publication process to perform in-house is a business decision for the individual utility. We are aware that even large utilities (such as Verizon) may contract with a third party for Internet publication services.⁶ If smaller utilities wanted to contract out as a group in order to minimize expense for Internet publication and site maintenance services, they could certainly do so. As long as the utility publishes and keeps up-to-date its tariffs, as currently in effect, at a site on the Internet freely accessible to the public, the utility has wide discretion about how to accomplish that function, consistent with its resources and its business plan. No party has provided persuasive evidence or argument that this burden is excessive for a company with at least $10 million in annual revenues.

Aside from the debate over the Internet publication threshold, there were several criticisms of the tariff access requirements. We summarize and respond to these criticisms below.

Several utility parties ask for a long time (six months to year) as the deadline, after adoption of the order, by which to meet the Internet publication requirement. In response, we have set the deadline at January 1, 2002, which is approximately six months after the expected effective date of this interim decision and more than 10 months after the adopted requirement was first proposed in the February 14 draft decision. We believe that delaying the requirement beyond January 1, 2002 is not warranted by technical or practical considerations.

Several utility parties mischaracterize the rule revisions as requiring Internet publication of tariffs no longer in effect. In fact, we are requiring access to a utility's no longer effective tariffs but not necessarily via the Internet. Under Rule 2.2, however, a utility that does not publish via the Internet may have to make further alternative provisions for access (both to currently effective tariffs and to tariffs no longer in effect) as compared to a utility that does publish via the Internet.

Several utility parties object to a provision in Rule 2.2 requiring a utility, in response to a request, to give free copies of tariffs to a current customer, and to give copies at a charge not exceeding 20 cents per page to any other requester. These parties believe the provision will lead to excessive requests, and since some tariffs run to hundreds of pages, the expense of copying and shipping could be considerable. In response, we have changed this provision of the rule: The limitation on charges will apply only to utilities that do not publish their tariffs on the Internet.⁷ We agree that a utility that makes its tariffs freely downloadable from the Internet should be allowed to charge for copies that it makes itself in response to a request from a current customer or other person.

Several utility parties object to the requirement in Rule 2.2 that they provide a toll-free telephone number at which callers may ask questions regarding the utility's tariffs and order copies or otherwise make arrangements to inspect the tariffs.⁸ They question the need for this additional administrative burden, particularly in light of the availability of tariffs over the Internet. See, e.g., Citizens Comments, March 23, 2001 at 7.⁹ Telco Coalition (at page 18 of its March 23 comments) claims this provision is "impracticable" because it "would require customer service representatives to have detailed knowledge of thousands of different tariff provisions, and would place these representatives in the untenable position of interpreting a legal document."

We are not persuaded by these arguments. First, there are still people who lack Internet access, and even people with Internet access may need to ask questions about the tariffs or (if a utility has lengthy tariffs) what tariff rules or schedules they should review. Second, Telco Coalition's argument, in our view, fundamentally misconstrues the duties of a utility. If (as is the case under current law), a customer is to be bound by the terms of a utility's tariffs, then surely the utility should be charged with the burden of explaining its tariffs, just as it is charged with the burden of applying them correctly. We emphatically reject the suggestion that a utility's customer service department could somehow advise customers about the utility's services and yet not have a "detailed knowledge" of the relevant tariffs. This is not to say that customer service representatives must be lawyers; rather, these representatives must be trained, among other things, to refer calls to appropriate employees when the question presented goes beyond the representative's own expertise.

Telco Coalition also considers too stringent the requirement that a utility update its tariffs published on the Internet within five business days of Commission approval of a change to the utility's tariffs. Telco Coalition suggests a ten business day window for such updating. No other party commented on this specific requirement, and we will retain it. We consider the requirement sets a reasonable level of effort for a company with at least $10 million in annual California revenues.

Avista, which is a multi-state group of affiliated utilities, says that the affiliated utilities, for reasons of efficiency, have centralized their tariffs at their respective corporate headquarters. Avista proposes that a request from a California customer for a no longer effective tariff be routed by the local California office to the corporate headquarters, which would then mail the copy to the customer. We note that Rule 2.2 requires "reasonable" access to tariffs (including no longer effective tariffs) within the utility's California service area. In Avista's circumstances, and considering the other provisions of Rule 2.2 (including the toll-free telephone number), we think Avista's proposal is reasonable. So long as the request for copies of no longer effective tariffs can be made by phone or from an Avista office in California, the fact that the copy is mailed from corporate headquarters out-of-state does not violate Rule 2.2.

As noted earlier, we do not require a utility's no longer effective ("historical") tariffs to be as readily accessible as its tariffs currently in effect. It should be understood, however, that historical tariffs are not merely of academic interest. Utilities increasingly offer promotions, optional rate plans, differently-bundled services, etc., all of which may change frequently. As a result, many disputes require review of historical tariffs to determine whether the utility actually provided the services for which the customer signed up. Thus, we recommend that utilities consider maintaining their historical tariffs on the Internet, at least on a going-forward basis from the adoption of GO 96-B. We note that the Energy Industry Rules still pending in this proceeding would impose such a requirement on energy utilities.

Several utility parties urge that we not require maps to be published on the Internet. We expressly do not require such publication.¹⁰

4.2 Comments on Information About Tariffed Services

Consumer representatives support efforts to make tariffs more informative in order to better serve consumers. TURN generally urges adoption of GO 96-B as an important consumer protection measure; specifically regarding the rule requiring disclosure of service options and alternatives, TURN says this rule is "necessary to ensure that customers receive accurate and complete information about the rates, terms and conditions applicable to their service." Supporting the same rule, ORA considers these disclosure requirements to be appropriate in a competitive environment. ORA reasons as follows:

[T]he name of the game in a competitive environment is informed customer choice. That informed choice requires full disclosure by the utility about its various offerings. To that end, utilities should make their service alternatives apparent to the customer upfront. The tariff is a good place to start.

Greenlining criticizes the provisions on information about tariffed services; Greenlining's criticism; however, is not that the provisions are unnecessary but rather that they do not go far enough. Greenlining proposes that we require tariffs to be "clear and concise;" today's decision neither approves nor rejects that proposal, which remains under consideration pending our final order in this proceeding.

There is little controversy regarding the rule that tariff ambiguities be construed in favor of the customer. SoCalGas and SDG&E argue that the rule should be modified to state that in evaluating ambiguities, the customer's interpretation must be reasonable. We believe that both the courts and this Commission can distinguish genuine ambiguity from fanciful interpretation; consequently, we will adopt the rule as written.

Several utility parties (mostly telecommunications service providers) object to the rule requiring disclosure of service options and alternatives. They consider the rule vague and burdensome. PacBell, for example, says, "Our thousands of pages of tariffs were not written to conform with the requirements of this new rule. To rewrite our tariffs to comply with all of the possible interpretations of this rule is simply not realistic . . . The Commission has applied its rule regarding interpreting tariff ambiguities against utilities for years. That rule is enough." (PacBell Comments, March 23, 2001, at 10.) Pac-West would have the subject matter of this rule referred to our rulemaking (R.00-02-004) on telecommunications consumer protection. Calaveras et al. (Comments, March 23, 2001, at 4) assert that "Tariffs should not be considered marketing tools." According to Calaveras et al., "the Commission should let basic, economic incentive dictate how carriers notify customers of rate plans and the like." (Id.)

In response, we acknowledge that tariffs historically have not been structured to accomplish what Rule 3 requires.¹¹ However, utilities historically have not provided their customers many choices. As choices proliferate in the traditional utility industries, tariff practice must change too. Utilities reap large economic gains from providing a broader range of services, and we believe that those who profit from economic activity should bear the associated expenses.

We agree that tariffs are not marketing tools. The same can be said of credit card agreements, insurance policies, mortgage instruments, warranties, and a host of other commercial documents that are subject to exacting disclosure requirements. The "fine print" should not be a trap for the unwary customer, and we have concluded that it is time to apply this principle to tariffs.

Rule 3 is stated in general terms.¹² It requires tariffs to identify service options and alternatives, and to explain how the customer may choose among them. We think the rule's generality is appropriate, given our intent that it apply to all of the utility industries. We agree that there may be difficulties in implementing the rule, so we provide for workshops, as discussed later. These implementation difficulties are not arguments against the rule, they are arguments for getting started now.

   Equilon also objects to the rule requiring a toll-free telephone number because, as Equilon reads the rule, it requires this telephone number to be the same number as that of the individual (typically, a senior utility officer) shown on the face of the utility's tariff sheets as responsible for those filings. We are uncertain about the source of this misunderstanding; in any event, nothing in the rules adopted today, or in any prior version of the rules proposed in this proceeding, would impose such a requirement.