Discussion

TURN's motion raises serious issues for PG&E customers and this Commission. TURN describes a system under which PG&E appears to have been interpreting its tariffs in such a manner as to allow it to "back-bill" customers or estimate customers bills for extended periods of time due to temporary delays or deficiencies in its billing system. TURN's motion also raises issues concerning PG&E's policies with regard to customer deposits.

In its December 30, 2004 response to TURN's motion, PG&E acknowledges that it has issued both "delayed" and "estimated" bills for periods in excess of three months, but argues that its actions were consistent with the requirements of its tariffs. PG&E points to several Commission decisions addressing billing issues that it claims support its positions. PG&E also points to letters issued by CAB that it claims further support its position. However, since, PG&E filed its Response, the Commission issued G-3372, addressing PG&E's Rules 17.1, 17.2 and the requirements of D.86-06-035. In G-3372, the Commission found that under "the proper interpretation of existing tariffs," "failure to issue bills should be treated as billing error." While the Commission declined to adjudicate the question of whether or not PG&E's past actions were inconsistent with its tariffs through the AL, the Commission specifically responded to PG&E's assertion by stating that "consistent with existing CPUC policy, tariffs, and requirements, including the requirements of D.86-06-035," failure to issue a bill or estimating a bill due to changes to a billing system should be treated as a billing error for purposes of applying gas or electric Rule 17.1."¹²

Both TURN's Motion and PG&E's Response raise a number of material factual issues that warrant investigation. While the questions regarding PG&E's interpretation of the tariffs have been resolved on a going forward basis in Resolution G-3372, the question of whether PG&E's past conduct violated the tariffs, rules or order of the Commission will be adjudicated in this proceeding. The adoption of Resolution G-2887 in no way implicates the disposition of issues which arise from past behavior.

In addition, although both PG&E's December 30, 2004, Response to TURN's Motion and PG&E's Report on Delayed and Estimated Bills From 2000 through 2004 describe several possible reasons for delayed and estimated bills, neither document resolves all of the outstanding issues. While PG&E claims that its estimated bill numbers compare favorably to prior levels and industry norms, the factual evidence is limited, and both parties should be afforded the opportunity to test and validate the information through testimony and cross-examination. Furthermore, it is clear from both documents that neither the number of customers affected by delayed and estimated bills nor the total dollar amount of the delayed and estimated bills is insignificant.

Table 4 of PG&E's Report of Estimated and Delayed Bills from 2002 to 2004 lists the number of "long bills" ¹³ issued as follows:¹⁴

Year	Number of Residential Long Bills Issued with Energy Use Over 60 Days	Number of Non-Residential Long Bills Issued with Energy Use Over 60 Days
2000	200,000	96,000
2001	265,000	88,000
2002	390,000	76,000
2003	868,000	173,000
2004	297,000	79,000

PG&E's Table 6 provides PG&E's estimate of the total dollar amounts billed to residential and non-residential customers with energy use over 60 days.

Year	Total Amounts Billed to Residential Customers with Energy Use Over 60 Days	Total Amounts Billed to Non-Residential Customers with Energy Use Over 60 Days
2000	$37,000,000	$176,000,000
2001	$63,000,000	$199,000,000
2002	$70,000,000	$126,000,000
2003	$193,000,000	$1,249,000,000
2004	$88,000,000	$934,000,000

PG&E does not provide data for the number of residential customers receiving estimated bills prior to 2003, but states that 637,000 residential customers received estimated bills in 2003 and 430,000 received estimated bills in 2004.

Moreover, the Commission continues to receive complaints and comments from customers who feel that PG&E is not complying with Tariff Rule 171. and/or are other wise dissatisfied with PG&E's billing and collecting operations.

Two recent comments regarding PG&E's billing and collection practices are summarized below.

On February 1, 2005, a PG&E customer testifying at a public participating hearing held as part of A.04-06-024, stated:

"Recently, I've had repeated contact with PG&E, which puts me in an optimal position to evaluate its performance in key areas....First, customer service. Last month I received a 48-hour turn-off notice, the identical notice I had received the previous month. Since my accounts were in good order I was fairly certain that this notice, like the December one, was a mistake....I proceeded through various menu options, all leading to a dead end...Eventually I figured out how to bypass the menu, but it took me 20 minutes... The customer service agent informed me that I had thrown off the utility's computer by paying the December bill before the due date. ..."

"I, myself was back billed in January 2004 for the period August 2002-March 2003. I was also back billed in late 2003 for the period March - July 2003. These back bills for eight and four months respectively, presented me with a significant financial burden.¹⁵

Another customer at the same PPH stated:

"I had a big problem with PG&E. I moved into a new house. I called. I canceled my old service. Got my new service. And one month, no bill. Two months, no bill. I called them and said...you guys haven't billed me. What's going on? Send me a bill so I can pay you the money I owe you, because I'm fearing some $500 bill down the road. Six months goes by."¹⁶

Similarly, at the February 2, 2005 public participation hearing (PPH) in the same proceeding, another individual submitted the following comments:

"I am a program manager at Community Action Marin in San Rafael, CA.  One of my duties is overseeing the Home Energy Assistance Program funded by the California State Department of Community Services and Development (CSD). During the past year or so (since November of 2003) our program has been deluged with request for assistance to address PG&E bills.  Our `safety net' program is failing to help these households to the degree is could in previous years, and the system is approaching collapse.  Our energy assistance program has disbursed $60,000 in the first month of activity, and will almost certainly be out of money by the end of March.  CSD expects us to run this program twelve months a year.  CSD has added another component to their program, which allows us to make `supplemental' payments for clients beyond the usual assistance.  While this helps with the enormous bills our customers receive, it only further depletes our resource.

"There have been several events which have negatively impacted our ability to help our clientele...PG&E's conversion of its account number system (November 2002) created chaos in the system.  Many clients were not billed for months at a time, then received bills for these unbilled periods, the totals of which they were unable to meet....PG&E began a period of inflexibility in payment plans, despite their violation of their own regulations regarding billing.  Wholesale shutoff notices were the result. In the ensuing months, utility rates, particularly for gas service, have increased exponentially.  Many of our clients come into our offices with gas bills which are 100% higher than the previous year.

"Each of these issues has reduced the ability of our program to get our clients out of trouble.  This program, which was designed to help people with occasional, emergency situations, has become the sole resource for large numbers of households, many of which had never sought assistance in the past.

"PG&E is a `public utility.'  It is estimated that approximately 11% of households in the Bay Area are living at or below the Federal Poverty level.  Constantly escalating home energy bills present an increasingly volatile part of household budgets, even among the most conservative rate payers.  Where not too long ago it was true that low income households were paying 300% higher energy bills in proportion to their incomes, that percentage is approaching 600%.  For many of our clients, a $ 150.00 energy bill represents 19% of the household income each month.  (When reconnect fees and security deposits are included, the percentage goes way up.)  This population must be considered in any application for rate increases or some other consideration must be made.  All of our applicants are required to apply for the CARE program, but with the size of the bills this winter, that is little relief."¹⁷

While we cannot accord these comments the same weight as evidence presented in sworn testimony and subject to cross-examination, these comments reinforce the decision to formalize the Commission's informal review and grant TURN's motion. The performance described in these comments, if accurate, is unacceptable.

In addition, it is worth noting that the San Francisco Board of Supervisors issued a resolution urging the Commission to open a public investigation into PG&E's practices of estimating electric usage rather than reading electric meters.¹⁸

Like TURN's motion, the resolution expressed concern that PG&E's practices might harm consumers by requiring them to pay for more electricity than they used.

We reject PG&E's claim that the Commission is barred from conducting an investigation into PG&E's practices due to various CAB staff communications. PG&E is well aware that Commission staff does not speak for the Commission and that only Commission order carry the weight of law. As noted in Resolution G-3372, "[t]he Commission has the authority to rescind staff disposition of complaints"... "issues formal opinions only through its decisions and resolutions."¹⁹

We also reject PG&E's claim that TURN's request is procedurally flawed because it proposed to open an inquiry with potential financial consequences to PG&E in a GRC in which the revenue requirement has already been fixed. On the contrary, reviewing PG&E's billing and collection practices in the very proceeding in which we adopted a revenue requirement for performing those services is appropriate. This ruling, like the initiating OII, provide PG&E with notice of the investigation, and the forthcoming hearings will provide PG&E with the opportunity to be heard.

We will not deny PG&E its due process rights and the ability to be heard regarding its past actions, nor will we deny TURN's motion without adjudicating the factual issues raised by the motion.

This investigation will review the facts to determine whether PG&E violated D.86-06-035 and Tariff Rules 9 and 17.1 by billing customers in excess of the three month limitation imposed by Rule 17.1. This investigation will also evaluate the scope and impact of PG&E's billing and collection practices on PG&E's customers. The scope of this investigation will include, but is not limited to:

· Whether PG&E has implemented any changes to its billing practices since the beginning of 2002 that would impact the number of estimated or delayed bills it issues to its customers.

· The effect of PG&E's new billing system Cordaptix on the utility's billing practices.

· Whether PG&E has implemented any change to its collection practices since the beginning of 2002?

· How PG&E determines whether and when to require a deposit, including whether it has implemented any change to its deposit requirement practices since the beginning of 2002.

· In each year since 2002, of the customers who had their service terminated due to non-payment of their utility bill, how many had received estimated or delayed bills?

· In each year since 2002, the number of customers from which PG&E requested a new or additional deposit for continuation of service.

· In each year since 2002, of the customers from whom PG&E requested a new or additional deposit, how many had received estimated or delayed bills?

· Investigate whether PG&E's actions with regard to estimated and delayed bills and the impacts that these bills have on the utility's customers warrant imposition of a fine.

· Investigate appropriate reparations to the PG&E customers who have suffered from the utility's estimated and delayed billing practices and the associated collection activities for delinquent amounts from such bills.

In addition, this investigation will consider PG&E's request for authority to implement a late payment fee. It would be inimical to customers' interests if the Commission were to grant PG&E authority to charge a late payment fee for undercollections or late payments resulting from delayed bills. Therefore, in addition to the issues described above, this proceeding will evaluate the reasonableness of PG&E's request for a late payment fee in light of the current CIS system and the revenue requirement adopted in D.04-05-055.

¹² Resolution G-3372, Finding of Fact 24.

¹³ Id., Table 6, p. 18.

¹⁴ (PG&E Report on Estimated and Delayed Bills from 2000 through 2004, dated February 4, 2005, p. 3.)

¹⁵ February 1, 2005 oral comments of R. Ruth Linden in A.04-06-024.

¹⁶ February1, 2005 oral comments of Mr. Alesandro in A.04-06-024.

¹⁷ Written comments of Richard McKee, submitted in response to the February, 2, 2005 PPH in A.04-06-024.

¹⁸ Resolution 585-04 adopted September 21, 2004.

¹⁹ Resolution G-3372, p.10, footnote 1; p. 17.